August 28/GOLD AND SILVER BREAK THROUGH RESISTANCE: GOLD FINISHES UP $16.95 TO $1309.65 /SILVER ENDS UP 38 CENTS AT $17.45/HURRICANE HARVEY UNLEASHES HAVOC ON HOUSTON AND SURROUNDING TOWNS/HOUSTON IS FLOODED/THE HURRICANE HAS RETREATED BACK ONTO THE GULF AGAIN AND IT MAY REPEAT ON THE LOUISIANA AND TEXAS BORDER/CHINA VOICES HER ANGER AT THE USA FOR SANCTIONS AGAINST VENEZUELA/

GOLD: $1309.85  UP $16.95 *BREAKS RESISTANCE OF $1300.00

Silver: $17.45  UP 38 CENTS *BREAKS RESISTANCE OF $17.25

Closing access prices:

Gold $1310.40

silver: $17.46

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1299.64 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1204.25

PREMIUM FIRST FIX:  $5.38

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SECOND SHANGHAI GOLD FIX: $1300.33

NY GOLD PRICE AT THE EXACT SAME TIME: $1295.03

Premium of Shanghai 2nd fix/NY:$5.03

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LONDON FIRST GOLD FIX:  5:30 am est  $closed/holiday

NY PRICING AT THE EXACT SAME TIME: $xxx

LONDON SECOND GOLD FIX  10 AM: $closed/holiday

NY PRICING AT THE EXACT SAME TIME. xx

For comex gold:

AUGUST/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 38 NOTICE(S) FOR  3800  OZ.

TOTAL NOTICES SO FAR: 4622 FOR 462,200 OZ  (14.376 TONNES)

For silver:

AUGUST

 70 NOTICES FILED TODAY FOR

350,000  OZ/

Total number of notices filed so far this month: 1248 for 6,240,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

Today both gold and silver broke through huge resistance levels. Gold broke through $1300.00 to end up $1309.85 and silver broke through $17.25 to end up at $17.45.  The big news of the day was the catastrophe in Houston which is flooded.  Damages is expected to exceed $40 billion. Now the big question: how will this be funded if the debt ceiling is not raised? The Hurricane has reversed course and it is now back into the Gulf.  It looks like it will pick up huge moisture and head back to the Louisiana-Texas coast for another shot at damage.

Let us have a look at the data for today

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In silver, the total open interest FELL by A TINY 248 contracts from 188,413 DOWN TO 188,145 DESPITE THE RISE IN PRICE THAT SILVER UNDERTOOK WITH  FRIDAY’S TRADING (UP 9 CENTS).WHEN WE LOOK OVER OUR SHOULDER AND SEE THE HUGE RISE IN OI IN GOLD DUE TO THEIR FAILED RAID, ONE WOULD EXPECT TO SEE THE SAME FOR SILVER. YOU WILL RECALL ME TELLING YOU THAT SOME OF THE PAPER PLAYERS (WHO HAVE NO DESIRE FOR PHYSICAL DELIVERY) ONCE WE APPROACH AN ACTIVE DELIVERY MONTH LIKE SEPTEMBER, WOULD TENDER SOME OF THEIR LONGS FOR EFP’S WHICH GIVES THEM A FIAT PROFIT AND A DELIVERABLE PRODUCT PROBABLY A LONDON BASED FORWARD. THE ISSUANCE OF EFP’S DESTROYS THE PRICE DISCOVERY MECHANISM BECAUSE WE HAVE NO PHYSICAL PRICE ANYWHERE IN THE EQUATION. THIS TRANSFER IS ALLOWED SUPPOSEDLY FOR EMERGENCY USE ONLY WHEN PHYSICAL  DELIVERY CANNOT TAKE PLACE AT THE COMEX.  HOWEVER OUR BANKERS MISUSE THIS VEHICLE TERRIBLY. FRIDAY’S FAILED RAID CAUSED NEWBIE LONG PLAYERS INTO THE ARENA AND THAT IS WHY WE HAD ONLY A SMALL LOSS IN OI INSTEAD OF THE MUCH LARGER AMOUNTS WE GENERALLY SEE JUST PRIOR TO FIRST DAY NOTICE. THE BANKERS STILL CARRY THE OBLIGATION TO DELIVER ON THESE EFP’S TO LONDON OR OTHER PHYSICAL EXCHANGES. THE BANKERS INITIALLY SUPPLIED THE SHORT PAPER BUT IMMEDIATELY TRIED TO COVER WHEN THEY REALIZED THE RAID WAS A FAILURE.  SOME SPECS SOLD FOR A PROFIT AT THE HIGHER PRICE

RESULT: A SMALLER LOWER OI WITH A GOOD PRICE INCREASE AND AN UNSUCCESSFUL RAID.

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.940 BILLION TO BE EXACT or 134% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 70 NOTICE(S) FOR 350,000  OZ OF SILVER

In gold, the open interest ROSE BY A CONSIDERABLE 5,335 CONTRACTS WITH THE RISE  in price of gold ($6.00 GAIN ON FRIDAY .). The new OI for the gold complex rests at 514,546.

AS IN SILVER, THE GEOPOLITICAL LANDSCAPE WITH TRUMP THREATENING TO CLOSE GOVERNMENT IF HE DID NOT GET HIS WALL AND THE DOVISH SPEECHES BY BOTH DRAGHI AND YELLEN, CAUSED A HUGE NUMBER OF NEWBIE SPECS TO AGAIN ENTER THE GOLD ARENA WITH THE COMMERCIALS SUPPLYING THE NECESSARY PAPER. FRIDAY MORNING WITNESSED A MASSIVE 2 MILLION OZ OF PAPER SHORTS SUPPLIED BY OUR BANKERS. HOWEVER THIS RAID AGAIN BECAME TOTALLY UNSUCCESSFUL. THE BANKERS REALIZING ANOTHER FAILURE IN THEIR ATTEMPT TO CONTAIN PRECIOUS METAL PRICES, TRIED TO COVER IN HURRY AND PROBABLY TO NO AVAIL .

Result: A GOOD SIZED GAIN IN OI with A FAIR RISE IN PRICE IN GOLD AND AN UNSUCCESSFUL RAID.

we had: 38 notice(s) filed upon for 3800 oz of gold.

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With respect to our two criminal funds, the GLD and the SLV:

GLD:

Late Friday night , we had a big  change in gold inventory: a deposit of 5.91 tonnes into the GLD inventory

Inventory rests tonight: 805.20 tonnes

IN THE LAST 31 TRADING DAYS: GLD SHEDS 31.77 TONNES YET GOLD IS HIGHER BY $77.30 .

SLV

Today:  WE HAD NO CHANGES IN SILVER INVENTORY TONIGHT:

INVENTORY RESTS AT 333.178 MILLION OZ

end

.

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver FALL BY 248 contracts from 188,413 DOWN TO 188,145 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH FRIDAY’S 9 CENT GAIN IN TRADING. SILVER RESPONDED TO THE GEOPOLITICAL CLIMATE WHEREBY TRUMP THREATENED TO SHUT DOWN GOVERNMENT UNLESS HE GOT HIS WALL PLUS THE TWO DOVISH SPEECHES BY YELLEN AND DRAGHI AT JACKSON HOLE. SOME PAPER PLAYERS TENDERED SOME OF THEIR LONGS FOR SEPT. EFP’S BUT THAT OBLIGATION STILL RESTS WITH THE BANKERS BUT ON A DIFFERENT EXCHANGE  (LONDON).  SO AT THE COMEX THE GAIN IN OI FROM THE NEWBIE LONGS ENTERING THE CASINO COUNTERBALANCED THOSE LONGS LEAVING FOR EFP’S

RESULT:  A SLIGHTLY LOWER OI AT THE COMEX, WITH A HIGHER PRICE. (AND A GAIN IN DELIVERABLE PRODUCT IN LONDON)

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

 i)Late SUNDAY night/MONDAY morning: Shanghai closed UP 31.30 POINTS OR 0.93%   / /Hang Sang CLOSED UP 15.13 POINTS OR 0.05%/ The Nikkei closed DOWN 2.71 POINTS OR 0.01%/Australia’s all ordinaires CLOSED DOWN 0.55%/Chinese yuan (ONSHORE) closed UP at 6.6230/Oil DOWN to 47.44 dollars per barrel for WTI and 52.60 for Brent. Stocks in Europe OPENED RED. Offshore yuan trades  6.6253 yuan to the dollar vs 6.6230 for onshore yuan. NOW THE OFFSHORE MOVED SLIGHTLY WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN MUCH STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS HAPPY TODAY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA/

Kim  fires 3 short range ballistic missiles and they were all duds..complete failure

( zero hedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

i)How will China fight back against China in a trade war?  Simple..dump all of its USA dollar assets

( zerohedge)

ii)India and China finally agree to “disengage troops of their respective borders:
( zerohedge)

iii)Now it is China’s turn to slam the USA for its latest sanctions on its “close ally” Venezuela

( zero hedge)

4. EUROPEAN AFFAIRS

i)France

Boy did this escalate fast:  Macron’s approval rating has crashed twice as fast as Donald Trump

( zerohedge)

ii)Italy

The sanctions on Russia by the USA is hurting one big Italian bank’s 5 billion euro loans deal

 ( Reuters)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

FINLAND

Finland largest pension fund dumps all of his USA stocks because in his words: ‘there is no President of the USA”

( zero hedge)

7. OIL ISSUES

i)Hurricane Harvey was devastating to the USA.  Today gasoline prices skyrocket due to the shutdown of the refiners and they still do not know when they can resume their refining capacity

 

( zerohedge)

ii)Oil tumbles below $47.000 per barrel amid speculation that up to 30% of the USA refining capacity will be off line

 

( zerohedge)

8. EMERGING MARKET

VENEZUELA

9.   PHYSICAL MARKETS

i)Interesting:  Japan is now seeing gold used in smuggling as the criminal organization Yakuza as well as Chinese wealthy citizens team up in this operation:
( zero hedge)

ii)Story on that historic Klondike gold discovery.(courtesy Tukker/CBC.Toronto/GATA)

iii)Extremely important and Andrew should know: Goldman Sachs and two other bullion banks are buying gold in London.  These guys are joining China and Russia in the accumulation of gold.  The end game will now bloom in full force:
this is a must read.. the important passage…
‘Vampire Squid’ Goldman Sachs Moving In For The Kill
The footprints are there to see. My large clients, and these include sovereigns, are watching with great interest the split in the Gold Cartel that is unfolding. Eric, we spoke about this some months ago when we saw the first signs of the break in the Cartel ranks. I am now absolutely certain that Goldman Sachs and two other bullion banks have allied themselves with China, and are stealthily moving net long physical gold.
( Andrew Maguire/Kingworldnews/GATA)

iv)How the USA dollar as a reserve currency eventually destroyed the USA economy( Hugo Salinas Price/GATA)

v)Hong Kong deliverable physical gold has now succeeding and this will put pressure on the paper centric  Comex

( GATA/South China Morning post)

vi)Bullion star charts gold for August:
(courtesy Bullion star/GATA)

vii) It sure looks like we have had a credit event with respect to large commodity trader Noble.  They have asked for an extension in payments and that always signals a default.

We now have Goldman Sachs (the supposed winner) facing off against JPMorgan, (the supposed loser)

(zerohedge)

 

10. USA Stories

 

i)SATURDAY MORNING /GALVESTON AND SURROUNDING TOWNS IN TEXAS:
Devastation begins in the Galveston and surrounding towns due to damage from Hurricane Harvey
( zerohedge)

ii)SUNDAY MORNING

HOUSTON FLOODED
( zerohedge)
iii)Wow! this is some devastation:  FEMA expects over 450,000 victims from Hurricane Harvey with 30,000 pour souls seeking shelter:
( zero hedge)

iv) Texas activates 12,000 National Guardsmen.  no doubt that the total cost of Hurricane Harvey will exit 40 billion dollars

( zero hedge)
v)Now we witness SUV’s in a downturn with respect to the uSA economy.  This class is wildly overweight and sales have been quite slow despite the fact that huge incentives have been given to make the sale. This should hurt mfg.’s bottom line:
( zero hedge)

vi)Rumours abound that Tillerson is very frustrated with Trump and may exit:( zero hedge)

vii)Trump this morning slams globalists and demands that the USA House/Senators give him China tariffs

( zero hedge)

viii)This makes no sense;  Mueller is reportedly probing Flynn’s role in trying to find Hillary’s 30,000 missing emails

( Wall Street Journal/zero hedge)

ix)Another nationalist member of Trump’s team, Sebastian Gorka resigns from his White House advisory post:

( zerohedge)

x)Trump pardons Sheriff Joe Arpaio and that widens the rift between Republicans as McCain and Flake blast the “lawless” Trump

(  zerohedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY CONSIDERABLE 5,335 CONTRACTS UP to an OI level of 514,546 WITH THE GOOD SIZE GAIN IN THE PRICE OF GOLD + THE HUGE UNSUCCESSFUL RAID ($6.00 GAIN / FRIDAY’S trading).  This time the bankers did supply the necessary gold short paper. Early Friday morning, the bankers initiated a monstrous raid with a massive 2 million oz paper gold short.  HFT traders, true to form, followed the lead of the bankers and accentuated the price of gold/silver southbound.  However, this time,  newbie longs took on our criminal bankers realizing that the geopolitical climate in the states was getting to their liking as Trump threatened to close government unless he got his wall plus the two dovish speeches by Yellen and Draghi at Jackson Hole. The bankers realizing they were in trouble tried to cover their new shorts but that was to no avail.

Result: a  higher open interest with an increase in the price of gold plus the huge unsuccessful raid.

We are now in the contract month of August and it is the 3rd best of the delivery months after December and June.

The active August contract LOST 19 contract(s) to stand at 667 contracts. We had 0 notices filed on FRIDAY so we LOST 19 contracts or an additional 1900 oz will NOT stand at the comex and 19 EFP’s were issued in August which entitles the long holder to a fiat bonus plus a futures contract and most probably that would be a London based forward.

The non active September contract month saw it’s OI GAIN 17 contracts UP to 1167.

The next active contract month is Oct and here we saw a LOSS of 89 contracts DOWN to 51,804.

The very big active December contract month saw it’s OI gain 5,188 contracts up to 403,711.

We had 38 notice(s) filed upon today for  3800 oz

For those keeping score: in the upcoming front delivery month of August:

LAST YEAR WE HAD A MONSTROUS 44.7 TONNES OF GOLD INITIALLY.  BY THE CONCLUSION OF THE AUGUST 2016 CONTRACT MONTH 44.358 TONNES STOOD FOR DELIVERY. THIS YEAR, WE INITIALLY HAD 25.85 TONNES STANDING ON AUGUST 1/2017 AND WE WILL END UP WITH PROBABLY 16.33 TONNES.

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And now for the wild silver comex results.  Total silver OI FELL BY  248 CONTRACTS FROM 188,413 DOWN TO 188,145 DESPITE FRIDAY’S TINY 9 CENT GAIN IN PRICE (AND ANOTHER HUGE UNSUCCESSFUL RAID). SILVER RESPONDED TO THE GEOPOLITICAL CLIMATE WITH TRUMP THREATENING TO SHUT DOWN GOVERNMENT UNLESS HE GETS HIS WALL AS WELL AS THE TWO DOVISH SPEECHES BY YELLEN AND DRAGHI AT JACKSON HOLE. SOME PAPER PLAYERS TENDERED SOME OF THEIR SEPT. LONGS FOR SEPT. EFP’S BUT THAT OBLIGATION STILL RESTS WITH THE BANKERS BUT ON A DIFFERENT EXCHANGE  (LONDON).  SO AT THE COMEX, THE GAIN IN OI FROM THE NEWBIE LONGS ENTERING THE CASINO, COUNTERBALANCED THOSE LONGS LEAVING FOR EFP’S. WE DO NOT GET TO SEE THE DETAILS OF THESE CONTRACTS BECAUSE THE DEAL IS PRIVATE. DEMAND HAS NOT RETREATED WHATSOEVER. ACTUALLY YOU CAN WITNESS THAT YOURSELF WHEN YOU SEE TODAY HOW THE AMOUNT STANDING FOR SILVER INCREASED DRAMATICALLY AGAIN. THUS THE BANKS TECHNICALLY COVERED THEIR SHORTFALL ON THIS SIDE OF THE POND BUT THE OBLIGATION CONTINUES FOR THEM OVER IN LONDON. AT THE COMEX, NEWBIE LONG SPECS  ENTERED THE ARENA WILLING TO TAKE ON THE CROOKED BANKERS WHO ARE GETTING DEEPER AND DEEPER INTO A MESS IN SILVER.
RESULT:  SLIGHT INCREASE IN OI WITH A GAIN IN PRICE AND A SMALL TRANSFER OF LONGS FOR ANOTHER PHYSICAL DELIVERY PRODUCT PROBABLY A LONDON FORWARD.

We are now in the next big non active silver contract month of August and here the OI GAINED 22 contract UP TO 70. We had 28 notice(s) filed yesterday.  Thus we GAINED ANOTHER 50 contract(s) or an additional 250,000 oz will stand for delivery in this non active month of August and AGAIN zero EFP’s were issued for the August contract month. Please note that in gold we continually see EFP’s issued but not in silver!! HOWEVER WE DID HAVE A SMALL NUMBER OF LONGS IN SEPTEMBER RECEIVE EFP’S (PROBABLY IN EXCESS OF 3200 EFP’S) IN EXCHANGE FOR THEIR DEPARTED LONG POSITIONS.

The next active contract month is September (and the last active month until December) saw it’s OI fall by 9,905 contacts down to 40,217.  The next non active contract month for silver after September is October and here the OI GAINED 15 contacts UP TO 752. After October, the big active contract month is December and here the OI GAINED by 9,47- contracts UP to 131,675 contracts.

We had 42 notice(s) filed for  230,000 oz for the AUGUST 2017 contract

VOLUMES: for the gold comex

ESTIMATED VOLUME TODAY: 305,325 WHICH IS HUGE

YESTERDAY’S confirmed volume was 371,785 which is HUGE

volumes on gold are STILL HIGHER THAN NORMAL!

Initial standings for AUGUST

 August 28/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
NIL oz
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
  NIL oz
No of oz served (contracts) today
 
38 notice(s)
3800 OZ
No of oz to be served (notices)
629 contracts
(62,900 oz)
Total monthly oz gold served (contracts) so far this month
4622 notices
462,200 oz
14.376tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month   35,491.3  oz
Today we HAD  0 kilobar transaction(s)/ 
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  0 oz
we had 0 customer deposit(s):
total customer deposits; NIL  oz
We had 0 customer withdrawal(s)
total customer withdrawals;  NIL oz
 we had 0 adjustment(s)
For AUGUST:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 38  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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To calculate the initial total number of gold ounces standing for the AUGUST. contract month, we take the total number of notices filed so far for the month (4622) x 100 oz or 462,200 oz, to which we add the difference between the open interest for the front month of AUGUST (667 contracts) minus the number of notices served upon today (38) x 100 oz per contract equals 525,100  oz, the number of ounces standing in this active month of AUGUST.
 
Thus the INITIAL standings for gold for the AUGUST contract month:
No of notices served so far (4622) x 100 oz  or ounces + {(667)OI for the front month  minus the number of  notices served upon today (38) x 100 oz which equals 525,100 oz standing in this  active delivery month of AUGUST  (16.332 tonnes)
 we LOST 19 contracts or an additional 1900 oz will NOT stand for delivery and 19 EFP’s for August were issued.(FOR FIAT BONUS PLUS ANOTHER DELIVERABLE CONTRACT WHICH MOST LIKELY IS A LONDON BASED FORWARD)
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Total dealer inventory 735,302.365 or 22.87 tonnes  (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,697,497.7 or 270.52 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 270.52 tonnes for a  loss of 32  tonnes over that period.  Since August 8/2016 we have lost 83 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best.
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 12 MONTHS  83 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE AUGUST DELIVERY MONTH
August final standings
 August 28  2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
35,212.576 oz
BRINKS
DELAWARE
Deposits to the Dealer Inventory
nil  oz
Deposits to the Customer Inventory 
 602,910.170 oz
JPMORGAN
No of oz served today (contracts)
70 CONTRACT(S)
(350,000 OZ)
No of oz to be served (notices)
0 contracts
( NIL oz)
Total monthly oz silver served (contracts) 1248 contracts (6,240,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month 3,300,940.5 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil   oz
we had 0 dealer withdrawals:
total dealer withdrawals: nil oz
we had 2 customer withdrawal(s):
i) Out of BRINKS: 30,213.93 oz
ii) Out of DELAWARE: 4,998.646 oz
TOTAL CUSTOMER WITHDRAWALS: 35,212.576 oz
We had 1 Customer deposit(s):
 I) INTO JPMORGAN:  602,910.170 OZ
***deposits into JPMorgan have RESUMED  again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: 602,910.170 oz
 
 we had 1 adjustment(s)
 i) from Brinks:  45,678.630 oz was removed from the dealer and this entered the customer account of Brinks
The total number of notices filed today for the AUGUST. contract month is represented by 70 contract(s) for 350,000 oz. To calculate the number of silver ounces that will stand for delivery in AUGUST., we take the total number of notices filed for the month so far at 1248 x 5,000 oz  = 6,240,000 oz to which we add the difference between the open interest for the front month of AUGUST (70) and the number of notices served upon today (70) x 5000 oz equals the number of ounces standing
 

 

.
 
Thus the FINAL standings for silver for the AUGUST contract month:  1248 (notices served so far)x 5000 oz  + OI for front month of AUGUST(70 ) -number of notices served upon today (70)x 5000 oz  equals  6,240,000 oz  of silver standing for the AUGUST contract month. This is extremely high for a non active delivery month. Silver is being constantly demanded at the silver comex and we witness again the amount of silver increases daily right from the get go.
(TO GIVE YOU AN IDEA OF THE HUGE DEMAND FOR PHYSICAL IN THIS AUGUST NON ACTIVE DELIVERY MONTH WE HAD INITIALLY 1.965 MILLION OZ STAND FOR DELIVERY ON AUGUST 1. WE HAVE ENDED WITH 6.24 MILLION OZ EVENTUALLY STAND.)
We GAINED ANOTHER 50 contracts or an additional 250,000 oz wishes to stand for delivery in this non active month of August and 0 EFP’s were issued for the silver August month. HOWEVER IN EXCESS OF 3200 EFP’S WERE ISSUED IN SEPTEMBER FOR SILVER.
At this point in the delivery cycle last year on August 29/2016 we had 23,748 contracts standing vs this yr at 40,217. JUDGING FROM WHAT WE HAVE BEEN EXPERIENCING IN SILVER, NEXT WEEK’S FIRST DAY STANDING WILL BE A DILLY!!
Last yr on the first day notice for the Sept silver 2016 contract we had 17.070 million oz stand for delivery.
By month end:  16.075 million oz/
 
Volumes: for silver comex
ESTIMATED VOLUME TODAY: 142,942 WHICH IS OUT OF THIS WORLD
FRIDAY’s  confirmed volume was 161,945 contracts which is OUT OF THIS WORLD
FRIDAY’S CONFIRMED VOLUME OF 161,945 CONTRACTS WHICH EQUATES TO 810 MILLION OZ OF SILVER OR 115% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.
 
Total dealer silver:  38.318 million (close to record low inventory  
Total number of dealer and customer silver:   216.516 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 5.8 percent to NAV usa funds and Negative 6.0% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.4%
Percentage of fund in silver:37.6%
cash .+0.0%( August 28/2017) 
2. Sprott silver fund (PSLV): STOCK   NAV RISES TO -0.27% (August 28/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.20% to NAV  (August 28/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -0.27%/Sprott physical gold trust is back into NEGATIVE/ territory at -0.20%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada

 Section: Daily Dispatches

From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017

http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…

Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.

The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.

The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.

“They weren’t interested in having those discussions,” Williams said.

 Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.

If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.

“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”

Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.

The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.

Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.

Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.

end

And now the Gold inventory at the GLD

AUGUST 28/a huge deposit f 5.91 tonnes of gold into GLD inventory/inventory rests at 805.20 tonnes

AUGUST 25/NO CHANGE IN GOLD INVENTORY/INVENTORY RESTS AT 799.29 TONNES

AUGUST 24/no change in gold inventory at the GLD/inventory rests at 799.29 tonnes

August 23/no change in gold inventory at the GLD/Inventory rests at 799.29 tonnes

August 22/no change in gold inventory at the GLD/Inventory rests at 799.29 tonnes/

AUGUST 21/this is good!! a huge deposit of gold into the GLD to the tune of 3.85 tonnes/Inventory rests at 799.29 tonnes

August 18/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 795.44 TONNES

August 17/late last night, a deposit of 4.43 tonnes of gold at the GLD/inventory rests at 795.44 tonnes/the bleeding of gold has stopped.

August 16/no change in gold inventory at the GLD. Inventory rests at 791.01 tonnes

August 15/no change in gold inventory at the GLD/inventory rests at 791.01 tonnes

August 14/this is good!!: a gain of 4.14 tonnes of gold into the GLD inventory/the removal of GLD gone to the east has now stopped probably because there is no physical to send/inventory rests at 791.01 tonnes

August 11/no change in gold inventory/Inventory rests at 786.87 tonnes

August 7/no changes in gold inventory at the GLD/Inventory rests at 787.14 tonnes

AUGUST 4/ANOTHER LOSS OF 4.48 TONNES OF GOLD FROM GLD INVENTORY/INVENTORY RESTS AT 787.14 TONNES.THIS IS A HUGE CRIME SCENE!!

August 3/no change in gold inventory at the GLD/Inventory rests at 791.88 tonnes

August 2/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 791.88 TONNES

Aug 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 791.88 TONNES

July 31/NO CHANGES AT THE GLD/INVENTORY RESTS AT 791.88 TONNES

July 28/ANOTHER MASSIVE WITHDRAWAL OF 3.54 TONNES OF GOLD WITH GOLD UP $9.15/INVENTORY RESTS AT 791.88 TONNES

July 27/LATE LAST NIGHT, A HUGE WITHDRAWAL OF 5.03 TONNES WITH GOLD UP $10.45 ON THE DAY/INVENTORY RESTS AT 795.42 TONNES

July 26/NO CHANGE IN GLD INVENTORY WITH GOLD DOWN $2.55/INVENTORY RESTS AT 800.45 TONNES

July 25/A MASSIVE 9.17 TONNES OF GOLD WITHDRAWN FROM THE GLD/INVENTORY RESTS AT 800.45 TONNES

July 24/A massive 9.62 tonnes withdrawal and yet the price remains constant (down only 25 cents)..inventory drops to 809.62 tonnes

July 21/with gold up $8.75 again, we had no changes in gold inventory at the GLD/inventory rests at 816.13 tonnes

July 20/WITH GOLD UP AGAIN TODAY ($3.50) WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 816.13 TONNES

jULY 19/STRANGE!! AGAIN WITH GOLD UP $0.50 WE HAD ANOTHER HUGE 5.32 TONNES WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 816.13 TONNES  THIS GOLD IS HEADING TO SHANGHAI

July 18/STRANGE AGAIN/WITH GOLD UP $7.50 WE HAD ANOTHER HUGE 5.62 TONNES WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 821.45 TONNES

July 17/strange again! with gold up $4.20 we had another huge withdrawal of 1.77 tonnes/inventory rests at 827.07 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
August 28 /2017/ Inventory rests tonight at 805.20 tonnes
*IN LAST 221 TRADING DAYS: 144.68 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 160 TRADING DAYS: A NET  12.75 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY.
*FROM FEB 1/2017: A NET  4.06 TONNES HAVE BEEN WITHDRAWN.

end

Now the SLV Inventory

AUGUST 28/no change in silver inventory at the SLV/Inventory rests at 333.178 million oz/

AUGUST 25/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 333.178 MILLION OZ

AUGUST 24/A HUGE WITHDRAWAL OF 1.229 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 333.178 MILLION OZ

August 23/no change in silver inventory at the SLV/Inventory rests at 334.407 million oz

August 22/no change in silver inventory at the SLV/inventory rests at 334.407 million oz.

AUGUST 21/no change in silver inventory/inventory rests at 334.407 million oz/

August 18/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REST AT 334.407 MILLION OZ

August 17/A WITHDRAWAL OF 1.418 MILLION OZ LEAVES THE VAULTS OF THE SLV (WITH SILVER UP 25 CENTS YESTERDAY?)/INVENTORY RESTS AT 334.407 MILLION OZ

August 16/no change in silver inventory at the SLV/Inventory rests at 335.825 million oz/

August 15/no change in silver inventory at the SLV/Inventory rests at 335.825 million oz.

August 14./no change in silver inventory/inventory rests at 335.825 million/

August 11/no change in silver inventory tonight.  However we lost 3,781 million oz from Tuesday through Thursday. Inventory rests at 335.825 million oz/

August 7/no change in silver inventory at the SLV/Inventory rests at 339.606 million oz

AUGUST 4/A WITHDRAWAL OF 945,000 OZ/INVENTORY RESTS AT 339.606 MILLION OZ

August 3/A WITHDRAWAL OF 1,181,000 OZ FROM THE SLV/INVENTOR RESTS AT 340.551 MILLION OZ/

August 2/NO CHANGES IN SILVER INVENTORY AT THE SLV

INVENTORY RESTS AT 341.732 MILLION OZ/

August 1/A HUGE WITHDRAWAL OF 945,000 OZ/INVENTORY RESTS AT 341.732 MILLION OZ/

July 31/no change in silver inventory at the SLV/inventory rests at 342.677 million oz

July 28/ A HUGE WITHDRAWAL OF 1.15 MILLION OZ OF SILVER LEAVES THE SLV DESPITE SILVER BEING UP 11 CENTS TODAY/INVENTORY RESTS AT  342.677 MILLION OZ

July 27/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 343.812 MILLION OZ WITH SILVER UP 13 CENTS TODAY.

July 26/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 343.812 MILLION OZ

July 25/A MASSIVE 3.309 MILLION OZ OF INVENTORY WITHDRAWN FROM THE SLV DESPITE SILVER’S 10 CENT RISE TODAY.

July 24/no change in silver inventory despite its 4 cent drop/inventory remains at 347.121 million oz

July 21/STRANGE! WITH SILVER UP AGAIN TODAY (11 CENTS), NO CHANGE IN SILVER INVENTORY AT THE SLV/inventory 347.121 million oz/

July 20/STRANGE! WITH SILVER UP AGAIN TODAY, THE SLV INVENTORY LOWERS BY 945,000 OZ/INVENTORY RESTS AT 347.121 MILLION OZ/

July 19/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 348.066 MILLION OZ

July 18/a huge 946,000 oz withdrawal from the SLV despite silver’s 16 cent gain!

Inventory rests at 348.066 million oz

July 17/no change in silver inventory at the SLV/Inventory rests at 349.012 million oz

August 28.2017:

Inventory 333.178  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.35%
  • 12 Month MM GOFO
    + 1.49%
  • 30 day trend

end

 

Major gold/silver trading/commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

 

Diversify Into Gold On U.S. “Political Instability” Advise Blackrock

  • By Mark O’Byrne

    – Gold set to shine as Washington stumbles
    – “Bet on gold’s diversifying properties rather than political stability”

    – World’s largest asset manager believes Trump and political drama in the U.S. means gold likely to rise
    –  Real rates flattening out and rising political instability – Blackrock’s Koesterich
    – “For now my bias would be to stick with gold” – Blackrock

    – U.S. debt ceiling issue to be fractious as bankrupt U.S. hits $20 trillion debt
    – Investors will again turn to gold in coming political strife

    http://maxpixel.freegreatpicture.com/Election- Politics-Donald-Trump-Presidential-1757583

    “For now I would prefer to bet on gold’s diversifying properties rather than political stability” – Russ Koesterich, Blackrock.

    Not for the first time this year, Blackrock’s Koesterich has spoken about his faith in gold during times of both financial and political instability.

    Those times are now, the world’s largest money manager believes. Since the beginning of the year Koestrich has been adding to the gold position of the $39bn  Global Allocation Fund. Gold is now the fund’s second-largest position.

    Gold’s performance, up 12% year-to-date, is particularly interesting. A hard-to- define asset, gold is often thought to perform best when either inflation and/or volatility is rising. This year has been notable for both falling inflation and record low volatility, raising the question: What is powering gold’s ascent and can it continue? Two trends stand out:

    Real rates have flattened out

    Political uncertainty has risen

    Real rates – plateauing and boosting gold

    Gold is most correlated with real interest rates (in other words, the interest rate after inflation), not nominal rates or inflation. While real rates rose sharply during the back half of 2016, the trend came to an abrupt halt in early 2017. U.S.10-year real rates ended July exactly where they began the year, at 0.47%. The plateauing in real yields has taken pressure off of gold, which struggled in the post- election euphoria.

    Heightened political uncertainty

    Koesterich said earlier this month that

    “There has been a Pavlovian response by investors to disregard any piece of bad news or any spike in volatility, and that has been a very profitable strategy but we do think that there are risks in the world that are not being priced in.”

    Currently there is heightened geopolitical risk across the world, with a focus on how the US will manage. Investors will no doubt be looking to reduce their risk exposure as events unfold between the US and North Korea as well as Venezuela’s chaos which shows no sign of dissipating.

    The VIX index is often referred to as the ‘Fear Index’. Many believe this is a misnomer and does not portray  what is really going on. The index has been trading at historically low levels. Apparently investors continue to bet that the index will remain low if money keeps pouring into markets and the global economy carries on improving.

    Koesterich doesn’t think this will be the case. For him political risk has not yet been reflected in the markets.

    Although market volatility has remained muted, albeit less so the past week, policy uncertainty has risen post-election (see the accompanying chart, above). This is important. Using the past 20 years of monthly data, policy uncertainty, as measured by the U.S. Economic Policy Uncertainty Index, has had a more statistically significant relationship with gold prices than financial market volatility. In fact, even after accounting for market volatility, policy uncertainty tends to drive gold prices.

    To a large extent, both trends are related. Investors came into 2017 expecting a boost from Washington in the form of tax cuts and potentially infrastructure spending—resulting in the so-called “reflation” trade. Thus far neither has materialized. While economists can reasonably debate whether either is actually needed, lower odds for tax reform and stimulus have resulted in a modest drop in economic expectations. This, in turn, has caused a reversal in many reflation trades, a development that has allowed gold to rebound.

    Going forward, gold’s performance may be most closely linked with what happens in D.C. Absent fiscal stimulus, the U.S. economy appears to be in a state of equilibrium: modest but stable growth. In this environment, gold should continue to be supported by historically low real rates and continued political uncertainty. Alternatively, if Congress does manage to enact a tax cut or other stimulus, we are likely to see some, albeit temporary, reassessment of growth and a corresponding backup in real rates, a scenario almost certainly negative for gold.

    Conclusion – No crystal ball but stick with gold

    Koesterich does not claim to ‘have any special insight into the Greek drama that is modern day Washington.’ But he is clear in his conviction that a ‘bet on gold’s diversifying properties rather than political stability’ is the way to trade right now.

    Whilst Koesterich’s blog has made headlines and been featured on a range of sites, there should really be no surprise over his comments. All he is saying is that gold will continue to perform well thanks to a series of unknowns in the political and economic sphere.

    It will act as a form of financial insurance and safe haven. This is no real news given history has demonstrated this as has the performance of gold in the last 10 years and as a hedge in the long term.

    Most importantly the money manager is saying that he has little faith in the performance and abilities of the US government. In turn this means he is concerned for the strength of their currency and economy.

    Individual savers and investors should take note – gold’s safe haven properties will be coming into their own as Washington continues to bicker and stumble.

 END
Gold trading today: Gold breaks 1300.00 dollar per oz/silver breaks $17.25 both upper resistance levels;
(courtesy zero hedge)

Spot Gold Spikes Above $1300 To Highest Since Election

While Dec gold futures broke above $1300 overnight (and are spiking above $1310)…

 

Spot Gold prices just broke above $1300 to the highest price since Trump’s election…

 

Highest since the election…

 

Since Friday’s close, before the worst of Harvey hit, gold is the best performing asset with bonds, dollar, and stocks slightly lower…

end
Interesting:  Japan is now seeing gold used in smuggling as the criminal organization Yakuza as well as Chinese wealthy citizens team up in this operation:
(courtesy zero hedge)

Japan Sees Surge In Gold Smuggling As Yakuza & Wealthy Chinese Team Up

In a story that was seemingly tailor-made for the tabloids, Japanese news agency Nikkei is reporting that, in an unusual but tantalizing example of financial symbiosis, wealthy Chinese investors are teaming up with Yakuza gangsters to smuggle gold into Japan. The payoff for each side is simple: Chinese investors, who are increasingly fearful that a depreciating yuan will create turbulence in local stock and bond markets, can circumvent China’s stringent capital controls and move their money out of the country. And by cheating the Japanese government out of a consumption tax, the Yakuza stand to make a healthy profit.

“The argument goes that the rich, having lost confidence in the Chinese yuan and with investment in other assets becoming difficult, are turning to gold smuggling to move their wealth out of the country. They supposedly hire mules to carry the gold from China, as well as places like South Korea and Taiwan, into Japan, where the consumption tax increase has made it easy for them to pay off the carriers and bribe staff at Asian airports.”

While Nikkei admits that its story is mostly based on hearsay, data show that a spike in demand for gold on the mainland has coincided with an increase in busts for gold smuggling by Japanese customs officials.

“On the data side, statistics from World Gold Council show that while global demand for gold used in jewelry and as an investment dropped 13.3% on the year in the three months through June, China’s demand rose 7.8%.

 

On the anecdote side, Chinese media outlet Shenyang Daily recently reported that 21 members of a gold smuggling gang had been discovered by customs officials in Shenyang, the largest city in Liaoning Province. Six were arrested on suspicion of trying to smuggle 45kg of gold out of China, while several other members were caught in the early morning of March 21 at Shenyang’s Taoxian International Airport carrying 37kg of gold. One member was sent back to Shenyang from Japan after being caught trying to smuggle in 8kg of gold in January.”

Meanwhile, Nikkei reports that Japan is quickly becoming a popular destination for gold smugglers, as the number of cases has ballooned since the increase in Japan’s consumption tax in April 2014 to 8% from 5%. While the tax hike has been a burden for consumers, it has proven to be a boon for criminals.

“Japan is fast becoming the go-to place for gold smugglers. According to data from the Finance Ministry, fines or other punishments were handed down for 177 gold smuggling cases in the year through June 2015. To put that into context, 2012 and 2013 each saw less than 10 cases punished. The surge continued the following year, with the number of cases reaching an all-time high of 294 — and this may be only the tip of the iceberg, as authorities believe there are numerous cases that have yet to come to light.”

The scam is relatively complex: With the cooperation of insider employees at budget airlines like Japan’s Vanilla Air, Japanese gangsters hide caches of gold aboard a given aircraft after it lands in China.

Then they wait for the same plane to be used for a domestic flight, allowing them to carry the gold off the plane without risking being caught by customs officials.

Once the gold has been safely off-boarded, the smugglers sell it through a seemingly legitimate merchant, pocketing the consumption tax.

“In Japan, consumption tax must be paid on gold when it is brought into the country. This amount is later tacked onto the price of the gold when it is sold, passing the cost of the tax onto the buyer. By circumventing the initial taxation process, smugglers can make a “profit” equal to the amount of that tax. Jacking up the consumption tax rate means bigger gains for smugglers.”

Japanese officials say they’ve been surprised by the level of sophistication exhibited by the smugglers, adding that they appear to be backed by “big organizations” with “big funds.” One recent case involved members of the Inagawa-kai, who were caught smuggling 112 kilos of gold into Japan from Macau using a private jet.

“The method using budget carriers really surprised us,” a member of the Customs and Tariff Bureau said. “There was also a case in Saga Prefecture that used a method often used by drug smugglers, delivering gold by sea. Whoever is behind these cases is really putting a lot of thought into the process.”

 

Japanese authorities suspect “big organizations” with “big funds” are carrying out the smuggling operations, hiring different people for different phases of the act. Much of the blame falls on yakuza organized crime groups. A case in 2016 involved members related to the Inagawa-kai group who were prosecuted for smuggling 112kg of gold on their private jet from Macau. Finance Ministry statistics show that in 51% of the 294 cases that year, the perpetrators were Japanese.”

If conditions in mainland China are any indication, incidences of gold smuggling will probably continue to rise. Early this year, the Communist Party tightened its capital controls, making it more difficult for wealthy individuals to move money offshore. Chinese authorities have also forced bitcoin exchanges, long suspected of helping customers move money out of the country, to tighten their financial controls to ensure that their customers don’t violate local financial regulations.

If there’s anything to be learned from the Nikkei report, it’s that Chinese investors are becoming increasingly desperate to move their money offshore.

Resorting to smuggling to move money offshore certainly doesn’t signal confidence in the country’s financial system.

The scene of the crime, Friday with the failed raid using 2 million oz of paper gold
(courtesy Bloomberg/GATA)

Gold is shaken by a mysterious 2-million-ounce trade

 Section: 

By Susanne Barton and Luzi-Ann Javier
Bloomberg News
Friday, August 25, 2017

So much for a quiet Friday in late August.

After weeks of relative slumber, gold traders were rudely awoken to a surge in volume and volatility. In a span of one minute 21,256 gold futures contracts, equal to more than 2 million ounces, traded just before Federal Reserve Chair Janet Yellen addressed a gathering of policy makers in Jackson Hole, Wyoming.

The episode jolted the market after a measure of 60-day volatility on the metal touched the lowest since 2005. Gold had been in quiet mode even amid political discord in Washington, concerns about rising U.S. interest rates, and tensions between the U.S. and North Korea. Yellen’s speech, which lacked clear rate cues, did little to calm the price swings and damped expectations of a rate hike this year. …

Gold futures for December delivery rose 0.4 percent to $1,297.20 an ounce at 12:38 p.m. on the Comex in New York, after falling as much as 0.8 percent and climbing 0.7 percent to briefly pierce the $1,300 threshold. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-08-25/gold-shaken-out-of-sl…

END

Lawrie Williams, on Friday’s flash crash

(courtesy Lawrie Williams/Sharp’s Pixley)

LAWRIE WILLIAMS: Even another flash crash can’t keep gold price down

2 million ounces of gold were dumped on the gold market in a minute on Friday, just ahead of Janet Yellen’s speech at Jackson Hole – and, apart from a brief downwards spike to below $1,280, the gold price rapidly climbed back to unchanged. This has to be an incredibly bullish signal for gold in that even this amount of presumably paper gold thrown at it (62.2 tonnes) couldn’t keep the gold price down. Bloomberg described the 2 million ounce trade as ‘mysterious’ but at least that is perhaps a welcome change from the usual ‘fat finger’ attribution which seems to be applied to these seemingly increasingly frequent mega-sales of paper gold which, despite protestations to the contrary, seem to be designed to keep the gold price suppressed.

Today, the gold price drifted upwards ahead of New York’s opening and then, at around 11.00 am New York time the price spiked upwards sharply, soaring through the $1,300 psychological barrier. The question is where to next?

The key here may well be what has been happening with physical gold. On Friday the SPDR Gold Shares ETF (GLD) had almost 6 tonnes of gold bought into it. GLD has thus seen 18.33 tonnes of physical gold added to it in 2 weeks after what we might describe as ‘mysteriously’ seeing some 80 tonnes withdrawn over the prvious two months – during which time the gold price didn’t seem to be spooked by this amount of gold being taken out of the world’s biggest gold ETF. We had already pointed out the anomaly that America’s second biggest gold ETF – the iShares Gold Trust (IAU) – had not seen corresponding metal liquidations. The Swiss gold import and export statistics, also reported in these pages, had shown that there appears to be a ready market for any physical gold released in the west, and this could well be a sign that gold could be moving into a short supply situation in the West. If America starts buying physical gold again, we could thus see big price rises with buyers bidding up what might be an increasingly rare commodity.

As I write, the gold price rise seems to have stalled at the $1,306-7 level and there will almost certainly be attempts to drive it down, or at least prevent it rising further. But it does seem to have some momentum behind it and could well move up to the $1,320s. But, as we have pointed out before, this time next week is the U.S. Labor Day holiday and this often seems to provide an inflection point in economic trends. It could presage a sell-off in gold or see the price boosted into the stratosphere, figuratively speaking. Nothing is simple with gold. But if gold gets a boost after September 4th we could see equities – and perhaps bitcoin – moving sharply in the other direction. Both would seem to be in bubble situations and sooner or later all bubbles burst.

We’d rather bet on gold than alternatives. Even if there is a turndown ahead it is likely to be relatively minor, while the fall, when it comes, as come it must, in equities and bitcoin could be devastating. Food for thought ahead of the U.S. holiday weekend.

https://www.sharpspixley.com/articles/lawrie-williams- even-another-flash-crash-cant-keep-gold-price- down_271075.html

 

-END-

 

It sure looks like we have had a credit event with respect to large commodity trader Noble.  They have asked for an extension in payments and that always signals a default.

 

we now have Goldman Sachs (the supposed winner) facing off against JPMorgan, (the supposed loser)

 

end

 

 

 

It’s Goldman vs JPMorgan As ISDA’s Noble Indecision Roils CDS Market

Several years ago, the International Swaps and Derivatives Association, or ISDA, lost much of its credibility when during the peak of the Eurozone debt crisis, it first refused to determine that CDS on Greece had been triggered, only to eventually concede – following substantial outside pressure – that Greece had, in fact, defaulted (if only on bonds not held by a certain central bank), but not before penning a “petulant” blog post in which it claimed amusingly that the “credit event/DC process is fair, transparent and well-tested”. The fiasco prompted many, this site included, to dub sovereign Credit Default Swaps as “Schrodinger’s CDS”, contracts which may or may not pay out in case of a default, depending on which way the political winds were blowing at any given time.

Fast forward to today when not only is ISDA in hot water again, but the entire corporate CDS market has been roiled by another indecision by ISDA, which said “it was unable to determine” if Singapore-listed Noble Group, formerly Asia’s largest independent commodity trader was in default or not, creating a vacuum similar to what happened with Greece 5 years ago, and which, according to the FT, has resulted in mass confusion in the corporate bond and CDS market. What is more striking, however, is that this is the first time ISDA has dismissed a question of default without making a ruling either way.”

Specifically, on August 9, ISDA ruled the following:

The AEJ Determinations Committee (DC) has discussed over the course of a number of meetings the question as to whether a Restructuring Credit Event has occurred in respect of Noble Group Limited (Noble).  The AEJ DC considers that it currently does not have sufficient information that is public or that can be made public to determine the Restructuring Credit Event DC Question one way or the other, in particular the AEJ DC has not been able to obtain the underlying documentation in respect of the Borrowing Base Facility (and amendments thereto) and Noble’s guarantee in respect thereof (the Relevant Documentation). 

Noble Group, of course, had for the past two years been one of the best advance indicators of stress in the Asian commodity markets, as noted here back in 2015. Since then the company’s acute troubles intensified, leading to its repeat near-insolvency, profit collapse and accelerated asset liquidation meant to stave off an inevitable default. Last month, Bloomberg summarized Noble’s woes best:

Noble Group has been in crisis for more than two years, marked by vast losses, mounting concern it will default and accusations it inflated the value of some contracts, which it’s denied. In an effort to raise funds, placate investors and pay down debt, the company has been selling businesses. With billions of dollars of borrowing outstanding, JPMorgan Chase & Co. said in a note that a coupon payment due July 29 on its 2020 bonds is now a key event to track.

The Noble salvage process culminated most recently with an extension to Noble’s loan repayment terms, an event which many CDS buyers, if not sellers and creditors, said amounted to a debt restructuring. And, as the FT adds, “the dispute rippled through debt markets in London and Asia last week after banks and funds served notice to sellers of CDS protection.

This is when the problem first emerged, because “earlier this month the ISDA committee responsible for deciding on the status of Noble’s debt said it was unable to determine if the Singapore-listed commodity trader was in default or not, creating a vacuum that allowed bilateral claims to proliferate across the market. It is the first time ISDA has dismissed a question of default without making a ruling either way.”

But since there is more than $1.2 billion of CDS written on Noble’s debt, it means that some of the biggest names on Wall Street would likely be involved.

They were indeed, and in a potential confrontation for the generations, the fate of Noble’s default status has pitted some of the biggest names against each other.

According to the FT, on one hand we have Goldman Sachs, Nomura and hedge funds who bought CDS protection on Noble and would profit if ISDA determined that a CDS trigger event had taken place as they would then be paid off by the sellers of protection; these entities, however, are facing off against JPMorgan, BNP Paribas and other traders who sold the protection. As a result, more so than even the fate of Greek CDS, what happens to Noble, a pure-play corporate name, “is shaping up to be an important test for reforms made to the $10tn CDS market a decade after it was widely blamed for exacerbating the financial crisis.

Meanwhile, as ISDA unexpectedly decided to play coy, the market had already moved on with the first claim filed early last week, forcing a chain reaction of claims and counterclaims that spiralled through the market, with one source saying 12 institutions had triggered notices of default. The net total owed by sellers of CDS protection on Noble could be up to $157 million.

“Notices were flying all around the city,” said one hedge fund trader involved in the CDS market. “They wanted to be below the radar on this but the banks receiving the notices were obviously freaked out.”

The issue, however, is that without a formal determination by ISDA, Noble CDS remains untriggered and no payouts are actually due.

And while in the case of the Greece CDS trigger, ISDA was facing massive political pressure by the European political (and central bank) class, in the case of Noble the lobbying interests are more nuanced and all reside within Wall Street.

JPMorgan and BNP Paribas, which are said by traders in the CDS market to stand to lose in the event of a Noble default, have now filed questions with ISDA to move the process back in front of the industry body’s so-called determinations committee, which will meet on Tuesday. Goldman Sachs, Nomura, JPMorgan and BNP Paribas all declined to comment on their CDS positions. ISDA also declined to comment.

As a reminder, ISDA introduced the determinations committee system eight years ago in response to the chaos that credit derivatives caused in the financial crisis, after the mass triggering of protection linked to subprime mortgage bonds had to be settled between financial institutions bilaterally at the peak of the crisis. The most prominent example of cascading default triggers was of course the $85bn bailout of AIG by the US government after the insurer almost collapsed due to CDS exposure.

And so, until the ISDA D/C finds either way, “banks and funds that have bought or sold Noble CDS are essentially flying blind, with no precedent to follow, except how the market operated pre-2009.

“It’s like the whole last 10 years of market development have been put to one side,” said Nigel Dickinson, a derivatives lawyer at Norton Rose Fulbright.

 

“Because the ISDA determinations committee mechanism was supposed to avoid problems like this — market participants would ideally not need to trigger credit protection bilaterally.”

To be sure, there have been other ISDA controversies involving CDS trigger event: more recently, the collapse of Spain’s Banco Popular sparked a dispute over the payout on CDS due to a dispute over legal claims against the bank. Then there is the whole issue of deeply rooted conflicts of interest:

The ISDA determinations committee has also faced criticism for being made up of representatives of the same banks and investors that stand to lose or benefit from their decisions.

There is a simple solution: ignore ISDA and let counterparties agree among themselves bilaterally whether there has been a default trigger event. Alas, that now appears impossible, even though the sum that would ultimately exchange hands is relatively modest. Furthermore, as the FT notes, “going back to the old system of bilateral settlements raises the prospect of more disputes and expensive court cases. Senior bank CDS traders say there is little appetite for a return and are looking for ISDA to make a call.”

“The CDS market has made a lot of enhancements over the years,” said one person familiar with the business. “Moving to a determinations committee framework has definitely been a positive move.”

Except when ISDA itself is deadlocked and can’t decide, of course.

In any case, the showdown between JPM on one side and Goldman on the other should be decided tomorrow, following repeat submissions of determination by both JPMorgan and BNP Paribas, both sellers of protection, which have pressed the ISDA DC to find whether

a Credit Event Notice, delivered on or prior to 4pm London time on 23 August 2017, valid (and therefore will settlement obligations apply with respect thereto), if that Credit Event Notice indicates a Restructuring Credit Event on Noble Group Limited without the Unavailable Documentation, or without further relevant evidence (evidence unavailable to the DC) confirming the occurrence of a Restructuring Credit Event with respect to an Obligation of Noble Group Limited?

For the decision (hopefully) due tomorrow, which can be found here when it hits – which will inevitably displease either Goldman or JPMorgan – check back in 24 hours.

Story on that historic Klondike gold discovery.

(courtesy Tukker/CBC.Toronto/GATA)

Historic Klondike gold nuggets return to Yukon

 Section: 

By Paul Tukker
Canadian Broadcasting Corp., Toronto
Thursday, August 24, 2017

Evan Nelson’s arrival in Yukon this week couldn’t have been better timed.

It was Monday — Discovery Day, the annual holiday in Yukon that commemorates the 1896 discovery of gold in the Klondike. And Nelson, a doctor from Minnesota, had brought with him some small and shiny rocks, direct links to one of the central characters in that well-told story.

They were gold nuggets, once owned by “Skookum Jim” Mason. Nelson even has the papers to prove it.

“It’s just been something that we’ve kept, and I thought always should come back to Whitehorse,” Nelson said. “Because of the history.”

Nelson said his father was in Yukon for a brief spell in 1944 and was given the gold, along with a letter and other papers to prove its authenticity, by his friend Willard “Deacon” Phelps, a lawyer and businessman who had been in Yukon since the gold rush.

Phelps, the story goes, got it directly from Skookum Jim some 40 years earlier, as payment for legal services.

Nelson then inherited it after his father died.

“I just kept it in good condition,” Nelson said.

Eventually, he decided to donate it to the MacBride Museum of History in Whitehorse, and he recently sent an email telling the story. …

… For the remainder of the report:

http://www.cbc.ca/news/canada/north/skookum-jim-gold-rush-nugget-1.42614.

 END
Extremely important and Andrew should know: Goldman Sachs and two other bullion banks are buying gold in London.  These guys are joining China and Russia in the accumulation of gold.  The end game will now bloom in full force:
this is a must read.. the important passage…
‘Vampire Squid’ Goldman Sachs Moving In For The Kill
The footprints are there to see. My large clients, and these include sovereigns, are watching with great interest the split in the Gold Cartel that is unfolding. Eric, we spoke about this some months ago when we saw the first signs of the break in the Cartel ranks. I am now absolutely certain that Goldman Sachs and two other bullion banks have allied themselves with China, and are stealthily moving net long physical gold.
(courtesy Andrew Maguire/Kingworldnews/GATA)

Maguire sees gold cartel splitting; Rickards predicts revaluation by year-end

 Section: 

4:34p ET Friday, August 20, 2017

Dear Friend of GATA and Gold:

London metals trader Andrew Maguire tells King World News today that the gold price suppression cartel is splitting, that Goldman Sachs and two other bullion banks have allied with China and are going long, and that Indian gold buying is strong, not weak as has been reported. An excerpt from the interview is posted at KWN here:

http://kingworldnews.com/whistleblower-andrew-maguire-says-us-orchestrat…

Coincidentally, in a promotion for his proprietary newsletter yesterday, fund manager and author James G. Rickards, who has enjoyed U.S. government security clearance, asserted yesterday that the U.S. government is likely to join with other major governments and officially revalue gold to $10,000 per ounce by the end of the year:

https://pro.agorafinancial.com/p/AWN_dollarreboot_0717/EAWNT864/Full

As for GATA, we’ll believe it when we see it, but there’s no harm in having a nice weekend imagining the dawn of another golden age. If gold price suppression ever comes to an end we can always move on to flying saucers, the abominable snowman, the Loch Ness monster, or, come winter, the Bermuda triangle. (It’s warmer down there.)

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

END

How the USA dollar as a reserve currency eventually destroyed the USA economy

(courtesy Hugo Salinas Price/GATA)

 

Hugo Salinas Price: Dollar’s reserve status ruined U.S. economy

 Section: 

10:25a ET Saturday, August 26, 2017

Dear Friend of GATA and Gold:

The United States destroyed its own economy by elevating the dollar as the world reserve currency, the president of the Mexican Civic Association for Silver, Hugo Salinas Price, writes.

Once the Bretton Woods agreement in 1944 made the dollar the reserve currency and the dollar’s convertibility to gold at a fixed rate was ended in 1971, Salinas Price writes, “The key for all countries was to undersell U.S. producers of whatever the rest of the world had for sale. There was no other way to obtain dollars.

He adds: “It is fitting to remember how pleased Americans were back in the 1970s to see their smoky, polluting industries close down, to be replaced with green malls and pleasant cafes, with areas for exercising, sunning, and shopping. The time was hailed as the ‘the greening of America.'”What happened to America was a Greek tragedy writ large. By its own hand the United States has destroyed itself. Its huge advantage — the right to issue the world’s fundamental money, the dollar — turned into the sword that disemboweled its own guts.”

Salinas Price’s commentary is headlined “There Is No Cure for this Disease” and it’s posted at the association’s internet site, Plata, here:

http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=3…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

END

 

Hong Kong deliverable physical gold has now succeeding and this will put pressure on the paper centric  Comex

(courtesy GATA/South China Morning post)

 

 

Becoming deliverable, Hong Kong gold futures contract succeeds

 Section: 

Third Time Lucky for Hong Kong Bourse as Gold Futures Trading Gets Off to a Glittering Start

By Enoch Yiu
South China Morning Post, Hong Kong
Sunday, August 27, 2017

The Hong Kong stock exchange’s successful launch last month of gold futures was a boon for the city’s beleaguered brokers, offering the small and medium firms that are feeding off the crumbs of the bourse extra trading activity and fee income, at a time when equities transactions have slowed to a trickle.

“The gold futures launched last month were a good beginning,” said Alfred Yeung Ping-kwan, founder and chairman of Glory Sky Group, a mid-tier broker and market maker for the yuan-denominated and dollar-denominated gold futures products in the city. “This is still far from a huge success as in the United States, but at least we have taken a good start with a new product at the stock exchange.”

It’s third time lucky by the Hong Kong stock exchange in its attempt to introduce gold futures trading, as it seeks a broader selection of investment options to cement the city’s role as Asia’s financial centre. …

Another big change is the allowance of physical settlements in gold futures, instead of cash settlements as with the two previous attempts, which attracted end investors to the trades, said Yeung. …

… For the remainder of the report:

http://www.scmp.com/business/banking-finance/article/2108474/third-time-…

END

Bullion star charts gold for August:
(courtesy Bullion star/GATA)

 

Bullion Star’s gold market charts for August

 Section: 

8:09p ET Sunday, August 27, 2017

Dear Friend of GATA and Gold:

Bullion Star has posted its gold market charts for August, covering China, India, Russia, Switzerland, and London, and they show no notable change in demand. They’re posted at Bullion Star here:

https://www.bullionstar.com/blogs/gold-market-charts/gold-market-charts-…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

END


 

 


Your early MONDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight

 
 

1 Chinese yuan vs USA dollar/yuan STRONGER 6.6230 (REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES SLIGHTLY WEAK TO ONSHORE AT   6.6253/ Shanghai bourse CLOSED UP 31.30 POINTS OR 0.93%  / HANG SANG CLOSED UP 15.13 POINTS OR 0.05% 

2. Nikkei closed DOWN 2.71 POINTS OR 0.01%    /USA: YEN FALLS TO 109.23

3. Europe stocks OPENED IN THE RED     ( /USA dollar index FALLS TO  92.46/Euro UP to 1.1926

3b Japan 10 year bond yield: FALLS  TO  +.011%/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 114.34/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  47.44 and Brent: 52.69

3f Gold UP/Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil DOWN for WTI and UP  for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.386%/Italian 10 yr bond yield UP  to 2.097%    

3j Greek 10 year bond yield FALLS to  : 5.541???  

3k Gold at $1297.50  silver at:17.21 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 11/100 in  roubles/dollar) 58.48-

3m oil into the 47 dollar handle for WTI and 52 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A SMALL SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 109.23 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9545 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1383 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to  +0.386%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.1711% early this morning. Thirty year rate  at 2.7561% /POLICY ERROR)GETTING DANGEROUSLY HIGH

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Futures Flat As Gasoline Soars On Harvey Devastation, Rising Euro Sends European Stocks Lower

With billions in economic losses and unknown supply chain shocks to come following devastating and historic flooding in Texas, S&P futures are virtually unchanged (down less than 0.1% at time of writing) while European and Asian shares are modestly lower as oil was little changed. As reported yesterday, gasoline futures surged as the greater impact of the storm that shut more than 10% of U.S. fuel-making capacity was becoming more evident. The Bloomberg Dollar Spot Index fell to its lowest since January 2015 after Janet Yellen and Mario Draghi refrained from discussing monetary policies at Jackson Hole on Friday.

The US dollar continued to slip against the euro after central bankers’ comments at Jackson Hole provided little reason for a change in this year’s trend. U.S. Treasury futures were steady ahead of a combined $60 BN worth of two- and five-year debt auctions and Friday’s payroll numbers. USDJPY hovered above 109.00 handle, with initial main support at 108.60, the low on Aug. 18. EURUSD little changed after rallying initially, but failed to break above 1.20 handle. European bond markets were waiting for impetus as a bank holiday in the U.K. weighed on trading volumes.

Unlike the US, European stocks started the week on the back foot, with every sector retreating following Friday’s euro surge. the European Stoxx 600 index declined following a surge in the euro towards $1.20 after Draghi did not express concern about the currency’s recent rally at Jackson Hole as some analysts had expected. The Euro Stoxx 50 falls 0.7%, while the exporters-heavy DAX drops 0.7% and France’s CAC falls 0.7%; U.K. markets are closed for public holiday. Germany’s DAX Index fell 0.5 percent to the lowest in a week.

“The strong euro is weighing on European stock markets,” said London Capital Group analyst Ipek Ozkardeskaya. “Tapering talks could further demoralise stock traders in the run-up to the ECB verdict (next month). IT stocks are again on the chopping block.”

Media shares were among the big losers in the Stoxx Europe 600 Index. European outperformers include Bolsas y Mercados Espanoles +0.9%, Novo Nordisk +0.8%, Steinhoff International Holdin +0.8%, Swiss Prime Site AG +0.7%, Michelin +0.7%, Aryzta AG +0.7%. Underperformers include: EMS-Chemie -1.9%, Vivendi -1.5%, Stora Enso -1.5%, SAP -1.4%, UPM-Kymmene OYJ -1.4%, Infineon -1.2%, SCA -1.1%, Dialog Semiconductor PLC -1.1. German 10yr yields are little changed at 0.38%, while the Italian benchmark yield is little changed at 2.1%. The currency trends from Friday continue with the Euro spot up another 0.06% at 1.1931, as the dollar index declines another 0.31% to 92.454.

UK PM May has pencilled in August 30th 2019 as the date she will quit as PM, giving her two years to see the UK through Brexit.

In Asia, South Korea’s won led gains among emerging Asian currencies as broad dollar weakness more than offset the impact of more missile tests from Pyongyang on Saturday morning. The MSCI EM Asia Index of shares rose for a sixth day, up 0.1% while government bonds were mixed.  The yen led gains among major currencies even as Bank of Japan Governor Haruhiko Kuroda vowed to maintain an accommodative monetary policy. “We can expect the upside momentum in Asian currencies to continue, at least in the near term,” said Peter Chia, an FX strategist at United Overseas Bank Ltd. in Singapore. “However, we still maintain our view of slightly weaker Asian currencies from now till end-year. The upcoming announcement on U.S. balance-sheet reduction in September should trigger a meaningful rebound in the dollar.”

As noted on Friday, the latest tapering by the BOJ, when it cut purchases in the 5-to-10 year bucket has not had an adverse impact on JGB yields, with 10Y yields sliding again to 4 month lows, down to 0.1% and on the verge of turning negative once again.

Among the more notable Asian events, the onshore yuan rose, while 10-year bonds fell as the Shanghai Composite Index continued its recent advance above 3,300, rising 0.9% to a 20 month high of 3,362.65 after a series of strong earnings. On Monday, the PBOC set the strongest yuan fixing in a year. The onshore yuan extended last week’s gain above 6.65 per dollar after the central bank set the reference rate at the strongest level in a year and the greenback tumbled in late trade Friday. At the same time, the CNY advanced 0.31% to 6.6277 per dollar, set for strongest close since August 2016.

QQ.com reported that in its latest crackdown on bitcoin and other virtual currencies, China may regulate offerings of new crypto-currencies. Early data show China manufacturing and smaller businesses strengthened while picture is slightly dimmer for sales managers and steel sector. Over the weekend, Chinese Industrial Profits rose Y/Y 16.5%, down from 19.1% previously; the slowest growth in 3 months.

As Bloomberg recaps the recent action, with the much-anticipated – and disappointing – Jackson Hole meeting now behind them, investors this week will be eager for signs of constructive progress in U.S. politics after comments on Friday from Gary Cohn, director of the National Economic Council, cut through much of the gloom that had been generated by recent White House scuffles. Cohn said in an interview he expects tax reform to pass this year and that he didn’t intend to resign over the president’s reaction to riots in Virginia.

Over the weekend, North Korea conducted another missile test in which it launched short-range projectiles into the sea which travelled around 250km. Separately, there were some reports on social media that suggested that South Korea had said that North Korea has completed preparations for a nuclear test.

Treasury traders face a week headlined by Tuesday’s auction of bills that mature Sept. 29. They will then look forward to inflation and payrolls data that will be key for determining the Fed’s next moves. Federal Reserve Bank of Cleveland President Loretta Mester urged her colleagues to look past recent weak inflation data and to stick to their gradual pace of lifting interest rates.

In currencies, the Bloomberg Dollar Spot Index dipped less than 0.05 percent to the lowest in more than two years. The euro increased 0.1 percent to $1.1935, the strongest in more than two years. The British pound rose 0.1 percent to $1.2899, the strongest in a week.

In rates,  the yield on 10-year Treasuries increased less than one basis point to 2.17 percent. Germany’s 10-year yield gained one basis point to 0.39 percent.

In commodities, gasoline futures soared as much as 6.8 percent as the storm, which came ashore on Friday, continued to batter the state. They were last up 4.5 percent. The impacted region is home to a quarter of U.S. crude oil refining capacity and some areas are expected to receive a year’s worth of rainfall in a week. At least two people have died so far. Harvey has knocked out a quarter of oil production from the Gulf of Mexico, prompting fears it could overturn years of excess U.S. oil capacity and low prices.

“Although the full impact of the storm’s damage is yet to be determined, the markets expect the impact will be felt globally and affect energy markets for many weeks,” an analyst at FxPro said in a note.

U.S. economic growth more than halved in the quarter after Hurricane Katrina mauled Louisiana in August 2005, but bounced back by early 2006 as reconstruction began and gasoline prices moderated. After surging on Friday, oil prices were mixed on Monday as markets tried to gauge Harvey’s impact on oil production and refinery demand.

the biggest move was the surge in gasoline while oil was unchanged as flooding from Tropical Storm Harvey inundated refining centers along the Texas coast, shutting more than 10% of U.S. fuel-making capacity. West Texas Intermediate crude dipped 1.2 percent to $47.28 a barrel, the lowest in more than a week. Gold rose 0.4 percent to $1,296.73 an ounce.

Economic data include wholesale inventories and Dallas Fed manufacturing activity. Catalent, Parexel and Prospect Capital are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures down 0.1% to 2,441.50
  • VIX up 4.70% to 11.75
  • STOXX Europe 600 down 0.3% to 372.96
  • MSCI Asia up 0.1% to 160.62
  • MSCI Asia ex Japan up 0.01% to 531.65
  • Nikkei down 0.01% to 19,449.90
  • Topix up 0.2% to 1,600.12
  • Hang Seng Index up 0.05% to 27,863.29
  • Shanghai Composite up 0.9% to 3,362.65
  • Sensex up 0.4% to 31,736.56
  • Australia S&P/ASX 200 down 0.6% to 5,709.89
  • Kospi down 0.4% to 2,370.30
  • German 10Y yield rose 0.9 bps to 0.389%
  • Euro up 0.09% to $1.1935
  • US 10Y yield up 0.1% to 2.17%
  • Italian 10Y yield fell 1.0 bps to 1.809%
  • Spanish 10Y yield unchanged at 1.609%
  • Brent futures down 0.02% to $52.42/bbl
  • Gold spot up 0.4% to $1,296.72
  • U.S. Dollar Index down 0.3% to 92.42

Top Overnight News

  • WTI crude reverses Friday’s increase; floodwaters overwhelmed swathes of Houston as Tropical Storm Harvey continued to inundate southeastern Texas, pounding America’s fourth-largest city with unprecedented levels of rainfall and crippling the core of the U.S. energy industry.
  • President Donald Trump is planning to kick off one of the most important sales pitches of his presidency this week — getting Americans fired up about rewriting the U.S. tax code. But there’s no plan to sell.
  • Floodwaters overwhelmed swathes of Houston as Tropical Storm Harvey continued to inundate southeastern Texas, pounding America’s fourth-largest city with unprecedented levels of rainfall and crippling the core of the U.S. energy industry
  • Gasoline surged to the highest in two years and oil declined as flooding from Tropical Storm Harvey inundated refining centers along the Texas coast, shutting more than 10 percent of U.S. fuel-making capacity
  • Uber Technologies Inc. will appoint Expedia Inc.’s Dara Khosrowshahi to run the global ride-hailing leviathan, two people familiar with the matter said. He’ll succeed co-founder Travis Kalanick, who led the firm to $20 billion in annual bookings before scandals forced him out
  • Under pressure from its banks, Toshiba Corp. is racing to resolve several final disagreements with Western Digital Corp. before it can complete a deal to sell its chips business to the U.S. company and other investors by the end of August, according to people familiar with the matter
  • Athene Holding Ltd., untested at running pension funds, wants to compete with the industry’s oldest and biggest firms
    More investors are joining the cast of Wall Street veterans from Jeff Gundlach to Ray Dalio in warning that risky assets are overvalued
  • Samsung to Invest $7 Billion in China Flash-Memory Production
  • China Allows Merger to Create World’s Largest Power Company
  • Traders Ditch Risk as Dalio to Gundlach Warn on Emerging Markets
  • Cohn or Yellen? Bond Managers of $1 Trillion Say Same Difference
  • CBS Squeezes Out Murdoch to Snap Up Ailing Australia Network
  • Altice to Buy Back Up to $1.2 Billion in Stock, Will Eye M&A
  • DLF Founders Sell Stake in Rental Assets to GIC for $1.4 Billion
  • Toshiba Is Said in Talks on Last Hurdles in Western Digital Deal
  • Trump’s Pivot to Taxes Is Fraught With ’Pitfalls Everywhere’
  • Trump’s Afghan Plan Poised to Fail, Pakistan Premier Says
  • White House Sanctions May Scare Off Venezuela Vulture Investors

Asia stocks traded mixed with most bourses dampened after a lack of fireworks at last week’s Jackson Hole symposium, while participants also digested North Korean concerns and the devastation from tropical storm Harvey. ASX 200 (-0.6%) and Nikkei 225 (unch) traded subdued with the former underperforming amid weakness in its largest-weighted financials sector, as CBA shares declined on reports the APRA is to undertake an inquiry into the governance at the bank. KOSPI (-0.2%) was also cautious on further provocation by North Korea. Chinese markets bucked the trend as the Shanghai Comp. (+0.9%) advanced and Hang Seng (+0.1%) briefly broke above 28,000 for the 1st time since 2015, amid earnings including Sinopec which reported an over 40% increase in H1 net. 10yr JGBs initially gained amid the cautious risk tone in the region and with the BoJ also present in the market for JPY 710bln of government debt concentrated in the short-end, although prices then failed to sustain the upside and gradually returned flat.
Chinese Industrial Profits (Jul) Y/Y 16.5% (Prey. 19.1%); slowest growth in 3 months.

Top Asian News

  • Kuroda Sees Yield-Curve Control Allowing BOJ to Buy Fewer JGBs
  • Kuroda Cautions That Japan Can’t Maintain Current Growth Rate
  • India, China End Months-Long Military Face-Off in Himalayas
  • Wanda Drops on Reports of Chairman Wang Stopped at Airport
  • Nomura Hires Citigroup’s Rob Webb as Head of Equity Products
  • Singapore Says Sept. 23 Elections If Presidential Post Contested
  • World’s Second-Largest Stock Market Is Getting Interesting Again

European equity markets are lower with all the sectors trading in negative territory. Reinsurers in Europe are lower after Hurricane Harvey battered Houston and other cities in Texas, although Hannover Re have said they do not expect damage from the Hurricane to be as large as that seen from Katrina. European bonds have opened the week with little fanfare, as the German benchmark lOy yield is mostly unchanged at 0.38%. French yields are higher by over a basis point as Macron’s popularity continues to decline, according to recent polls. Italian yields are lower by over a basis point as Italian economic confidence hits its highest level since the financial crisis.

Top European News

  • May Under Pressure From Labour and EU as Brexit Talks Resume
  • Macron Dreams of Start-Up Nation But First He Must Face the Past

In currencies,  the USD remains under pressure although as EUR/USD reached its highest level since January 2015 after the Jackson Hole Symposium. Draghi’s comments were light on details but markets have viewed his refusal to comment on the strength of the EUR as an opportunity to push the pair higher. Cable also gapped higher at the open, although this has been due to general USD weakness rather than any UK specific news, given the public holiday in the UK today. USD/JPY has also drifted lower but has so far found support ahead of 109.00 where there are said to be strong domestic bids.

In commodities, Hurricane Harvey caused a spike in gasoline futures, up as much as 6% at the open of electronic trade, as refining capacity along the east coast was shut down. Platts estimates that 2.2mln bpd of capacity is shut or in the process of being shut because of the flooding. The WTI/Brent spread also continues to widen with supply disruptions in Libya continuing to support Brent as the Sharara and El Feel oil fields remain shut.

US Event Calendar

  • 8:30am: Wholesale Inventories MoM, est. 0.3%, prior 0.7%
  • 8:30am: Advance Goods Trade Balance, est. $64.5b deficit, prior $63.9b deficit, revised $64.0b deficit
  • 8:30am: Retail Inventories MoM, prior 0.6%, revised 0.6%
  • 10:30am: Dallas Fed Manf. Activity, est. 16.8, prior 16.8

DB’s Jim Reid and his team concludes the overnight wrap

No update from Jim yet but I know that he will be over the moon that the likely last game Liverpool have played before the twins are due was a 4-0 hammering versus my beloved Arsenal side. A gritted teeth congratulations knowing that he is reading this with a big grin. The bad news though is that the twins have probably missed the peak for Liverpool this season. Although maybe that is a good thing.

A bit like Arsenal yesterday, Friday’s Jackson Hole speeches from Yellen and Draghi ended up being something of an anticlimax too. In fact the most interesting aspect of President Draghi’s speech was that he voiced no concern about the recent appreciation in the Euro at all. That gave the green light for the single currency to surge again on Friday evening and it closed up +1.06% at 1.1924 versus the Greenback for its highest close since 5th January 2015. It has now also finished firmer in six of the last seven weeks. This morning the Euro initially opened another +0.33% higher but has since pared those gains as we go to print. On Friday there was some mention from the ECB President of still not seeing evidence of a self-sustained convergence of inflation towards the ECB’s objective but in reality that was nothing new either.

So markets now have a bit of breathing room until the ECB’s governing council meeting on September 7th. With regards to Fed Chair Yellen, her speech was equally dull in all honesty. M uch of the focus was on her comments around warnings about dismantling some of the post-crisis financial regulation but really there wasn’t much in it for markets. There had been some chatter in the market leading into the speech that Yellen could choose to address the recent easing in financial conditions but this didn’t end up being the case.

In the end then there was no Sintra repeat although at least both Draghi and Yellen remained co-ordinated, only this time it was a co-ordinated silence. Looking ahead, with the Jackson Hole now out of the way, it feels like a lot of the focus is already turning to the debt ceiling debate which will surely only ramp up in the next couple of weeks. In case you were away last week, we had President Trump warn that he was prepared to shut down the government should Congress not commit to paying for the Mexico border wall. The President also attacked two senior members of his own party – House Speaker Ryan and Senate  majority leader McConnell – over the topic while Fitch warned about a possible sovereign rating implication. So expect this saga to rumble on particularly as political negotiations have a habit of going to the wire.

On a related note an interesting test this week for the bond market might be Tuesday’s 4-week bill offering given that the maturity lines up nicely with the September 29th date that Treasury Secretary Mnuchin called critical for raising the ceiling. Mnuchin also said on Friday that he is 100% certain that the ceiling will be lifted so this should be an interesting test given that last week we saw a bit of selling pressure in that part of the curve.

We’ve also got some interesting data to come towards the back end of the week as you’ll see in the week ahead at the end. Of most significance for the Fed will be the PCE inflation data on Thursday, while on Friday we’ll then get the August employment report. It’s worth noting that those releases will also be out just before the US heads into a 3-day weekend next week. So it could be a busy week. Closer to home the next round of Brexit negotiations are due to kick off today. The news over the weekend is that the Labour Party have voiced their backing for the UK remaining in the single market for a transition period after leaving the EU. There is some talk now of a potential parliamentary vote when MPs return in early September and with PM May suffering from a divided cabinet it is one to keep an eye on.

In terms of other weekend news, the Cleveland Fed President Mester reiterated her thoughts on the US economy. On inflation, she views the current softness as largely one-off and noted “I would be worried if the low inflation were telling us that aggregate demand was really falling off…I don’t see that in the data..” and “I do expect inflation to remain below 2% over the next couple of months… and then eventually rise up to our 2% goal”. On the balance sheet unwind, she expects it to begin “soon” and doesn’t anticipate any disruption in the financial markets. Overall Mester also signalled that she favours a “gradual” pace of hikes by the Fed.

Overnight in Asia markets are a bit mixed with newsflow relatively thin. The Nikkei (-0.08%), ASX (-0.66%) and Kospi (-0.40%) are weaker (the latter not being helped by the news of more missile launches in North Korea), but the Hang Seng is up +0.56% following solid corporate results and Chinese bourses are up 0.9%-1.4% as we type. The big mover in commodity markets has been Gasoline which is up over +5% reflecting the impact of Tropical Storm Harvey over the weekend in Texas.

Recapping markets on Friday quickly. US equities closed slightly higher following the two speeches and Trump’s top advisor Gary Cohn noting that tax reforms are likely to be done by the end of the year and that he has no intention to resign. The S&P closed +0.17% higher and the Dow nudged up +0.14%. European markets were broadly softer, with the Stoxx 600 closing -0.12%, although these moves preceded Draghi’s speech at NY. Elsewhere bond yields fell modestly in the US (UST 10y -3bp) but were little changed in Europe. In commodities WTI oil was up +0.9% on Friday, following concerns about the impact of the  aforementioned storm on the refining hubs at Texas (accounts for c.10% of US refining capacity). Gasoline was little changed.

In terms of the macro data on Friday, in the US, the core durable goods orders (ex-transportation items) for July was slightly higher than expected at 0.5% (vs. 0.4% expected), while the capital goods new orders (ex-aircraft) were in line at 0.4%. Over in Germany, the final readings for 2Q GDP were confirmed at 0.6% qoq and 2.1% yoy, supported by a solid contribution from domestic demand (+2.8% yoy). The August IFO expectation index were higher than expected at 107.9 (vs. 106.8), which is the best reading since January 2014 and one that suggests that stronger GDP growth lies ahead, while the business climate index was also slightly higher at 115.9 (vs. 115.5 expected). In France, the August consumer confidence indictor was in line at 103, with the index now 5pts below its post-election peak, but still 4pts higher than where it ended 2016.

To the week ahead now. Today kicks off with the Eurozone’s M3 money supply stats for July. Then Italy’s August confidence indicators for consumer, manufacturing and the broader economy are due. Over in the US, there is the Dallas Fed manufacturing activity index for August and July wholesale and retail inventories data. Onto Tuesday, Japan’s July jobless rate and UK’s August Nationwide house price index will be out in early morning followed by Germany’s consumer confidence index. Then France’s preliminary 2Q GDP stats and consumer spending for July are due. In the US, there is the Conference Board consumer confidence index for August and the June Case-Shiller house price indices. Turning to Wednesday, Japan’s July retail sales will be due in the early morning. Then we have Germany’s inflation readings for August and Italy’s July PPI data. In the UK, the July mortgage approvals and data on money supply as well as net credit lending are due. Elsewhere, the Eurozone’s August confidence indicators for business, consumer and the economy  are also due. Across the pond, US’s ADP employment change for August and second readings for 2Q GDP and core PCE are due. For Thursday, China’s August manufacturing PMI and Japan’s July industrial production, vehicle production, housing starts and construction orders will be due in early morning, along with UK’s consumer confidence data and Germany’s July retail sales. Then we have the July unemployment rate for the Eurozone and Italy, along with the August unemployment change stats for Germany. The inflation data for the Eurozone, Italy and France are also due. Over in the US, the July PCE, personal income /  spending data, initial jobless claims, continuing claims, pending home sales and Chicago business barometer are all due. Finally on Friday, China’s caixin manufacturing PMI for August and Japan’s capital spending for 2Q and final reading for Nikkei manufacturing PMI will be due in early morning. Then we have the final markit PMIs for Germany, Eurozone, UK, France and Italy. In the US, there is the August ISM manufacturing stats, unemployment rate and of the course the employment report for August, along with the July construction spending and University of Michigan confidence indicators.

Away from the data, on Monday, the next round of Brexit talks is set to start. Turning to Wednesday, the Fed’s Powell will speak. Then onto Thursday, the China President will host the 9th BRICS summit. Finally, on Friday, ECB governing council member Nowotny joins a panel discussion and ECB VP Constancio will speak. Elsewhere, the second round of NAFTA negotiations begins in Mexico City.

 END

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed UP 31.30 POINTS OR 0.93%   / /Hang Sang CLOSED UP 15.13 POINTS OR 0.05%/ The Nikkei closed DOWN 2.71 POINTS OR 0.01%/Australia’s all ordinaires CLOSED DOWN 0.55%/Chinese yuan (ONSHORE) closed UP at 6.6230/Oil DOWN to 47.44 dollars per barrel for WTI and 52.60 for Brent. Stocks in Europe OPENED RED. Offshore yuan trades  6.6253 yuan to the dollar vs 6.6230 for onshore yuan. NOW THE OFFSHORE MOVED SLIGHTLY WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN MUCH STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS HAPPY TODAY 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

Kim  fires 3 short range ballistic missiles and they were all duds..complete failure

(courtesy zero hedge)

(courtesy zerohedge)

 

NORTH KOREA FIRES BALLISTIC MISSILE WHICH FLIES OVER JAPAN

 

Three days after North Korea launched three short-range ballisitic missiles, a move which as we discussed last night was met virtually without any response by the US administration and which we said would embolden North Korea to proceed with further provocations, Kim Jong Un has done just that and moments ago Yonhap reported that North Korea has fired another missile.

  • N.KOREA FIRED UNIDENTIFIED PROJECTILE FROM PYONGYANG: S.KOREA

Yonhap also adds that the projectile was fired into the East Sea.

According to Japan’s NHK, the Japanese government warns that the North Korea missile is headed toward Northern Japan:

  • JAPAN GOVT WARNS PEOPLE IN NORTHERN JAPAN TO TAKE PRECAUTIONS AGAIN POSSIBLE NORTH KOREA MISSILE – NHK

North Korea missile passed over Hokkaido around 6:06am JST, according to NHK.

South Korean military confirms North Korean ballistic missile flew over Japan.

This is the government emergency warning that was blasted moments ago on all TV channels, urging the population to take “precations”:

Government emergency warning through mobiles and on all TV channels, North Korea missile launched…

As NHK adds, the Japanese government urges citizens to take refuge in solid buildings or underground shelters.

Source: @RussianMarket

The USDJPY is tumbling on the news…

The S&P is lower, and Gold higher…

… Although the latest update from NHK is that contrary to initial reports, the missile has passed over Japan, reportedly over Hokkaido:

  • NORTH KOREA MISSILE HAS PASSED OVER JAPAN – NHK

NHK also adds that Japan did not attempt to shoot down the missile:

  • JAPAN DIDN’T ATTEMPT TO SHOOT DOWN MISSILE: JAPAN GOVT VIA NHK

Unconfirmed reports state that the launch was from a submarine:

Where is this missile heading ? Stay safe!

Reports of Submarine launch by North Korea

If the Japanese report is accurate, and a N.Korean missile indeed flew over Japan, it will be seen as a substantial escalation in hostilities and will most likely merit a response.

 

end

b) REPORT ON JAPAN

end

c) REPORT ON CHINA

How will China fight back against China in a trade war?  Simple..dump all of its USA dollar assets

(courtesy zerohedge)

“Unloading Dollar Assets Would Be Most Effective” – Chinese State Media Unveils Trade War ‘Countermeasures’

After President Trump declared “economic war” with China, seemingly following Bannon’s strategy to maintain hegemony

“We’re at economic war with China,” he added. “It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path.

 

Bannon said he might consider a deal in which China got North Korea to freeze its nuclear buildup with verifiable inspections and the United States removed its troops from the peninsula, but such a deal seemed remote. Given that China is not likely to do much more on North Korea, and that the logic of mutually assured destruction was its own source of restraint, Bannon saw no reason not to proceed with tough trade sanctions against China.

 

“To me,” Bannon said, “the economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we’re five years away, I think, ten years at the most, of hitting an inflection point from which we’ll never be able to recover.”

China state media immediately signaled the nation would hit back against any trade measures, as it has done in past episodes, and now, thanks to a treatise in Chinese official mouthpiece, China People’s Daily newspaperwe have an idea of what those countermeasures could be…

China could take three countermeasures against the recent “Section 301” investigation initiated by the U.S. government, experts told Chinanews.com.

 

With growing trade friction between the two largest economies, the spokesperson of China’s Ministry of Commerce made a strong response on Monday, saying China strongly opposes unilateral and trade protectionism acts conducted by the U.S., and will take all appropriate measures to safeguard its legitimate interests.

 

According to the report, limiting imports from the U.S., reducing exports to the U.S., and unloading dollar assets would be the most effective countermeasures.

 

China is America’s largest export market behind the North America region, and also one of the fastest-growing export markets of the U.S. Uncle Sam relies heavily on China for trade.

 

Statistics show that the annual growth in exports from the U.S. to China averaged 11% in the past decade, almost twice the figure of Chinese exports to the U.S. Sixty-two percent of soybean, 14% of cotton, 25% of Boeing aircraft, 17% of automobiles, and 15% of integrated circuits produced by the U.S. have been shipped to China.

 

In addition, China is the second-largest export market of American agricultural products, buying 15% of the total export volume, according to U.S. government data.

 

Against such a backdrop, restricting imports of agricultural products and high-end goods would be a trump card for China as a counter action.

 

Marcus Noland, executive vice president of the Peterson Institute for International Economics, once said during an interview that it would be destructive if China limits the imports of American soybean and aircraft.

 

In addition, being the largest export market of China, the U.S. enjoys the benefits of cost-effective “made-in-China” products.

 

According to data released by the US-China Business Council, trade with China has saved American families $850 in 2015 on average. Oxford Economics estimates that China’s low-price goods have resulted in a 1-1.5% lower price level in the U.S.

 

At a time when Americans are expecting Donald Trump’s new trade policy to improve the current situation, the bilateral trade conflict would be damaging, said Lian Ping, chief economist of the Bank of Communications. Even small losses are unacceptable, he added.

 

Besides, China regained the title of Uncle Sam’s largest creditor in June. America’s financial stability would be impacted if China unloads its dollar assets on a large scale.

 

However, these three countermeasures would also harm China. As Chinese officials have stressed, there is no winner or future in a trade war.

 

Because of the resilience and huge potential of the Chinese economy, the U.S. would be worse hit in the long run, said Wang Wen, executive dean of the Chongyang Institute for Financial Studies at Renmin University of China.

 

With a complete industrial system, China is the only country in the world that owns all industrial sectors listed in the United Nations industrial classification of all economic activities.

 

Once conflict deepens, America’s losses may not necessarily be less than China’s losses, noted Bai Ming, executive director of the Institute of International Trade of Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

 

Mutual benefit leads to win-win results. Only by the joint efforts of both parties can trade relations between the two countries be pushed forward in a healthy manner.

As a reminder – and the following chart suggests – “nothing lasts forever” and time is ticking…

Source: The Burning Platform

As we noted previously, history did not end with the Cold War and, as Mark Twain put it, whilst history doesn’t repeat it often rhymes. As Alexander, Rome and Britain fell from their positions of absolute global dominance, so too has the US begun to slip. America’s global economic dominance has been declining since 1998, well before the Global Financial Crisis. A large part of this decline has actually had little to do with the actions of the US but rather with the unraveling of a century’s long economic anomaly. China has begun to return to the position in the global economy it occupied for millenia before the industrial revolution. Just as the dollar emerged to global reserve currency status as its economic might grew, so the chart below suggests the increasing push for de-dollarization across the ‘rest of the isolated world’ may be a smart bet…

 

The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.

“The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. “The solution to this is to replace the national currency with a global currency.”

 

END

 

India and China finally agree to “disengage troops of their respective borders:
(courtesy zerohedge)

 

India And China Agree To “Disengage Troops” Along Disputed Border Area

On Monday morning, the world had one less geopolitical hotspot to worry about, when following months of escalating verbal jawboning and explicit threats on both sides, India agreed with China to disengage at the contested territorial dispute face-off site in Doklam. India’s foreign ministry spokesman Raveesh Kumar tweeted on Monday that disengagement of border personnel at the “face-off site at Doklam” has been agreed to and is on-going, with China confirming that India had pulled its troops from the Chinese side of a disputed Himalayan border area on Monday afternoon, after a months-long stand-off which started in June.

The de-escalation started earlier on Monday when India’s foreign ministry said it had agreed with China to an “expeditious disengagement” of troops from the Doklam plateau, an area close to the borders of China, India and Bhutan, SCMP reports.

“In recent weeks, India and China have maintained diplomatic communication in respect of the incident at Doklam,” India’s Ministry of External Affairs said. “On this basis, expeditious disengagement of border personnel at the face-off site at Doklam has been agreed to and is ongoing.”

The announcements come ahead of a meeting in China this weekend of BRICS countries, a bloc comprising Brazil, Russia, India, China and South Africa.

Not surprisingly, each side differed on the details of the “disengagement”: Beijing said Indian troops had pulled back by early afternoon, but did not say whether Chinese personnel had done the same. Indian media reports said the “disengagement” would not be completed on Monday. The Chinese foreign ministry said Indian military personnel had pulled out of the Chinese side by 2.30pm on Monday.

“I am pleased to confirm that trespassing Indian personnel have all pulled back to the Indian side of the boundary,” foreign ministry spokeswoman Hua Chunying said. “Chinese troops continue to patrol on the Chinese side of the boundary.” The ministry also said China would continue to “exercise its sovereign rights and defend territorial sovereignty in accordance with the historical demarcation agreement”.

Meanwhile, Indian media reports said both Indian and Chinese troops were slowly being withdrawn from the disputed zone. India’s NDTV reported that soldiers from both sides had started pulling out, but the process of removing them would not be completed on Monday.

The move comes a week ahead of a BRICS summit in Xiamen, Fujian province, where Chinese President Xi Jinping will play host to Indian Prime Minister Narendra Modi and leaders of three other major emerging economies. The Chinese foreign ministry said that at the peak of the crisis, up to 400 Indian soldiers and two bulldozers were engaged in the confrontation.

Dr Rajeev Ranjan Chaturvedy, a research associate at the Institute of South Asian Studies at the National University of Singapore, told SCMP that officials from both sides had worked hard to defuse the tensions.

“The diplomatic channels were open throughout,” Chaturvedy said. “Withdrawing troops will ease some tension and will provide room for both leaders at the BRICS [summit].”

As a reminder, the border row started in June when India sent troops to stop China building a road in the Doklam area, a remote, uninhabited territory claimed by both China and Bhutan. India said it sent in troops because Chinese military activity there was a threat to the security of its own northeast region. But China said India had no role to play in the area and insisted it withdraw unilaterally or face the prospect of an escalation. Chinese state media had warned India of a fate worse than its crushing defeat in the war in 1962.

end

Now it is China’s turn to slam the USA for its latest sanctions on its ”
close ally” Venezuela

(courtesy zero hedge)

China Slams White House For Latest Sanctions On “Close Ally” Venezuela

Shortly after the White House unveiled new sanctions last Friday against Venezuela while prohibiting U.S. trading in various bonds issued by the country (while exempting the notorious Goldman “Hunger Bonds”), Venezuela’s “close ally” China slammed the latest diplomatic crackdown and said on Monday that external interference and unilateral sanctions only make things “more complicated and will not help resolve problems.”

Asked by reporters about the new U.S. measure, Chinese Foreign Ministry spokeswoman Hua Chunying said China’s position had consistently been to respect the sovereignty and independence of other countries and not to interfere in their internal affairs. “The present problem in Venezuela should be resolved by the Venezuelan government and people themselves.”

“The experience of history shows that outside interference or unilateral sanctions will make the situation even more complicated and will not help resolve the actual problem,” Hua told the daily news briefing.


Oil pumps in Lake Maracaibo, Lagunillas, in the state of Zulia, Venezuela

As discussed on previous occasions, China and Venezuela have extensive business links, with oil being the largest, where the countries have a multi-billion loan-for-oil deal, which assures Beijing of obtaining Venezuela crude at below market prices.

Earlier in August, China said it believed voting in Venezuela’s Constituent Assembly election was “generally held smoothly”, brushing off widespread condemnation from the United States, Europe and others and evidence of voting irregularities, as China wishes to remain on Maduro’s good side due to concerns that a public uprising and/or revolution would void its billions in loans made to the current regime which Venezuela has been repaying in barrels of crude. As Reuters reported recently, Venezuela owes China more than $62 billion and is behind in the oil shipments. The Maduro regime similarly owes Russia billions in loans under a similar arrangement.

Many analysts have said the loans from China and Russia have prevented Venezuela from default. Earlier this monthRussian oil major Rosneft announced that it paid $6 billion to Venezuela’s PDVSA as an up-front payment for oil from the country. In November 2016, Rosneft received a 49.9% stake in a Venezuelan-owned American refiner and transportation fuels Citgo as collateral.

American lawmakers have said the Russian stake is a big problem for US national security and sent a warning letter to President Donald Trump. For now, just like Goldman, Trump has exempted Citgo from the recent round of sanctions. The White House has explained it as an attempt “to mitigate harm to the American and Venezuelan people.” In April, media reported that Citgo gave $500,000 to President Trump’s inauguration committee through a subsidiary.

end

4. EUROPEAN AFFAIRS

Italy

The sanctions on Russia by the USA is hurting one big Italian bank’s 5 billion euro loans deal

 (courtesy Reuters)

Exclusive: Russia sanctions disrupt Italian bank’s 5 billion euro loan deal

The Intesa Sanpaolo logo is seen in Milan, Italy, in this January 18, 2016 file photo. To match Insight ITALY-BANKS/FUNDStefano Rellandini – RTX2A32V

LONDON/MILAN (Reuters) – Italian bank Intesa Sanpaolo has encountered problems syndicating a loan to Glencore and Qatar’s wealth fund to finance their purchase of a stake in the Kremlin-controlled oil major Rosneft because of new U.S. sanctions against Russia.

Four banking sources told Reuters that Western banks including from the United States and France have so far put on hold their participation in the syndication of the 5.2 billion euro ($6.13 billion) loan that Intesa provided last year.

Intesa (ISP.MI) invited about 15 banks to join the loan when it opened the syndication in May. A loan of this size would normally take between four and six weeks to syndicate, though deals involving emerging markets can sometimes take a few weeks longer.

The banking sources said their compliance departments needed to understand the new sanctions.

They also said the syndication was complicated by a political stand-off between Qatar and Saudi Arabia. Banks are taking a more cautious approach to deals involving Qatar as they are wary of damaging their relations with Saudi Arabia and the other three Gulf nations embroiled in the dispute.

“The syndication is stuck because of new U.S. sanctions on Russia. The new sanctions are so wide-reaching that they will surely impact all similar deals involving Russian state firms,” said a London-based source with a large Western bank invited by Intesa to participate in the syndication.

Intesa, Italy’s largest retail bank, declined to comment. The banking sources did not want themselves or their banks to be named because they were not cleared to speak about the deal and because talks between Intesa and the banks about the syndication are confidential.

Last month, Washington imposed new sanctions on Russia in the strongest action against Moscow since 2014 following Russia’s annexation of Crimea and incursion in east Ukraine.

The new round of sanctions was in part a response to conclusions by U.S. intelligence agencies that Russia meddled in the 2016 U.S. presidential election. The sanctions dashed hopes of a rapprochement between Moscow and Washington.

The syndication was meant to spread the risk for Intesa which has so far lent all of the money. The loan helped commodities house Glencore (GLEN.L) and the Qatar Investment Authority buy 19.5 percent in Rosneft (ROSN.MM) to help the Russian government plug budget holes.

The Italian government says the loan is compliant with the new sanctions.

COMPLICATED

Intesa, which ranks as a fairly small investment banking player but has good connections in Russia, invited several French, Dutch and U.S. banks as well as China’s Bank of China and ICBC to participate in the deal.

A source said ICBC and Bank of China had indicated they would be willing to participate in the deal, though they are more wary now given the political problems hitting Qatar. An official at ICBC declined to comment and one at BOC did not immediately respond to a request for comment.

Bankers said the syndication was always expected to be complicated.

Rosneft, its boss Igor Sechin and Russia’s top state banks are all subject to sanctions imposed after Russia’s annexation of Crimea from Ukraine in 2014, and some banks had refused to consider the deal on these grounds from the start.

In addition to that, Glencore and QIA never disclosed full details of the deal, prompting the bankers to question whether they could go ahead with the syndication without knowing all beneficiaries of the transaction.

A spike in tensions between Qatar and its Gulf neighbors including Saudi Arabia also happened just as Intesa started syndicating the loan.

“The regional dispute has not helped – it is tough,” a London-based loan banker said.

“Political tensions around Qatar slowed the deal somewhat. But a real problem came when the U.S. imposed new sanctions (on Russia) in July,” another London-based banking source said.

Back in 2014, U.S. and European sanctions made it impossible for Russian state-owned companies and many private ones to raise new capital but left loopholes for raising money.

“With the new sanctions, I expect a lot of troubles with lending to projects led by Russian state firms… And possibly to many private ones,” said one of the banking sources.

($1 = 0.8477 euros)

end

 

France

Boy did this escalate fast:  Macron’s approval rating has crashed twice as fast as Donald Trump

 

(courtesy zero hedge)

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

END

6 .GLOBAL ISSUES

FINLAND

Finland largest pension fund dumps all of his USA stocks because in his words: ‘there is no President of the USA”

(courtesy zero hedge)

Finland’s Largest Pension Funds Dumps US Stocks Because “There Is No President In The US”

As President Donald Trump prepares to meet with Finnish President Sauli Niinisto in the White House on Monday, a portfolio manager at the Baltic state’s largest pension fund has told Bloomberg that he will be trimming exposure to US stocks. The reason? “It seems as if there is no president in the US.”

Risto Murto, chief executive officer of Varma Mutual Pension Insurance complained that Trump’s response to the attack in Charlottesville Va. demonstrated that he is incapable of governing the world’s largest economy, and that it appears the US is more or less running on autopilot.

The reason for Murto’s concern: as the financial crisis showed us, when there is trouble in the US, it runs the risk of spreading to the rest of the world. Musto also cited Trump’s seeming inability to work with Congress as “particularly worrying,” given that it threatens to disrupt the implementation of the Trump economic agenda. Hoped-for tax cuts and infrastructure spending helped push US stocks to record highs in the wake of Trump’s inauguration.

“’It seems as if there is no president in the U.S.,’ Risto Murto, chief executive officer of Varma Mutual Pension Insurance Co., said in an interview in Helsinki on Wednesday. ‘If I look at what is the moral and practical power, there is no longer a traditional president.’

 

The unorthodox start to Donald Trump’s presidency – dominated by Twitter outbursts that have included nuclear saber rattling with North Korea and a defense of white nationalist protesters – has turned the U.S. into a source of global political risk. The legislative program that many investors had hoped would support economic growth looks to have stalled, and Murto says Trump’s apparent inability to work with Congress is particularly worrying, given the global ramifications of decisions made in Washington.”

Varma reduced his fund’s equity weight by 5% in the second quarter, before the recent pullback in US stocks, by cutting a chunk of its US-stock holdings, according to Bloomberg. Varma has apparently listened to Jeffrey GundlachT Rowe Price, and a host of others who have warned about a selloff in the coming months. To this end, Murto has increased his fund’s cash holdings, preparing to seize upon any “opportunities” that present themselves in the near future. The fund is also using derivatives to hedge its fixed-income position in anticipation of further interest-rate hikes from the Federal Reserve.

Of course, another reason for selling was to lock in profits after “a very good run in equities.”

“Varma reduced its equity weight by 5 percent in the second quarter, mostly by cutting U.S. stocks. It’s now holding more cash and is ready to jump on opportunities as they arise. The fund has also shortened the duration of its fixed-income investments using derivatives positions to prepare for higher interest rates.

 

Some of the reduction in U.S. stocks has to do with realizing profits after “a very good run in equities since February 2016,” said investment chief Reima Rytsola. “It’s natural that it will halt a little bit.” The “U.S. economy is still doing ok,” he said. But the bottom line is that ‘we are worried.’”

Furthermore, Varma worries that Trump has already squandered whatever good will he had with Congress, raising the possibility that he may never pass the fiscal stimulus measures that had energized so many equity bulls earlier this year.

Stocks rallied in the months after Trump’s election win, on anticipation his administration would push through a business-friendly agenda. But the president’s lack of leverage with Congress now leaves his policy agenda – from taxation to infrastructure and domestic policies – ‘totally open,’ Murto said.”

To be sure, Trump’s inability to push through controversial policies could benefit countries like Finland, according to Bloomberg, because it could prevent Trump from fully embracing protectionism.

“One bright spot for trade-reliant nations like Finland is that a stalled Trump agenda means he may fail to push through his protectionist goals, Murto said. Most of Varma’s stock portfolio is in Finnish companies that rely heavily on Asian business. ‘In terms of direct exposure, the bigger news to us is that China is accelerating,’ Murto said.”

Then again, if recent fund flows are any indication, Murto’s investing thesis has failed to account for one of the most important factors influencing global equity valuations: Central bank intervention.

7. OIL ISSUES

Hurricane Harvey was devastating to the USA.  Today gasoline prices skyrocket due to the shutdown of the refiners and they still do not know when they can resume their refining capacity

(courtesy zero hedge)

“Oil Markets Roiled”: Goldman Calculates The Impact From Harvey’s “Devastation”

Oil markets were roiled, sending gasoline prices surging on Monday after Tropical Storm Harvey wreaked havoc along the Gulf Coast over the weekend, crippling Houston and its port, and knocking out numerous refineries as well as some crude production. As noted on Sunday, gasoline prices hit two-year highs as massive floods caused by the storm forced refineries in the area to close. Meanwhile crude futures fell as the refinery shutdowns could reduce demand for US crude production. As a reminder, Texas is home to 5.6 million barrels per day (bpd) of refining capacity, and Louisiana has 3.3 million bpd. Over 2 million bpd of refining capacity was estimated to be offline as a result of the storm.

While the U.S. National Hurricane Center said Harvey was moving away from the coast, it was expected to linger close to the shore through Tuesday, and that floods would spread from Texas eastward to Louisiana.

As Reuters reports, US traders were seeking oil product cargoes from North Asia with transatlantic exports of motor fuel out of Europe expected to surge. “Global refining margins are going to stay very strong,” said Olivier Jakob, managing director of Petromatrix. “If (U.S.) refineries shut down for more than a week, Asia will need to run at a higher level, because there’s no spare capacity in Europe.”

At the same time, about 22%, or 379,000 bpd, of Gulf production was idled due to the storm as of Sunday afternoon, the U.S. Bureau of Safety and Environmental Enforcement said. There may also be around 300,000 bpd of onshore U.S. production shut in, trading sources said.

In a note released this morning, Goldman’s Damien Courvalin calculated the estimate near-term impact from the “devastating” fallout from Harvey. As Courvalin writes, data available so far point to sizably larger refining than production disruptions: as of Sunday, August 27, nearly 3 mb/d of refinery capacity was offline (16.5% of the 18.2 mb/d US capacity) vs. c.1 mb/d of crude production (11% of 9.3 mb/d current production) and 2 Bcf/d of gas production (3% of 72 Bcf/d current production).

Should these levels of outages remain in place, and using past hurricanes as proxies for the impact on oil demand, Goldman estimates that the impact of Harvey on the US oil market would be to increase domestic crude availability by 1.4 mb/d while removing 615-785 kb/d of gasoline and 700 kb/d of distillate supplies. Larger refinery outages would increase these long crude and short product impacts.

Should the storm continue to head East towards Houston, as forecasts project, it risks creating further refinery outages with 850 kb/d of capacity in Houston not yet reported offline.

The hurricane is therefore likely to lead to further strengthening in product cracks given the loss in domestic refined product supply. The loss of USGC refining capacity will further support refinery margins for non-affected refiners to incentivize them to operate at higher utilization. The hurricane will however lead to a weakness in domestic crude prices given the lack of refining outlet. From a global oil supply-demand perspective, the storm is likely to lead to higher crude and product inventories over the next couple of months given the likely larger hit on US demand than supply.

The impact on production is far smaller, with 1 mb/d of crude production offline (11% of 9.3 mb/d current production) and 2 Bcf/d of gas production (3% of 72 Bcf/d current production). The flooding currently taking place is however leading to a greater loss of onshore supply (from the Eagle Ford) than historically has been the case. Gulf of Mexico production was instead spared by the path of the hurricane. Historically, onshore production has rebounded faster than offshore production and this would be consistent with producer commentary that loss of production is due to preventive shut-ins for now.

Finally, the ports of Corpus Christi, Galveston, Houston (inc. East), Texas City, Freeport and Galena Park remain closed. According to Reuters data, these ports averaged so far this year: 600 kb/d of crude net imports, 250 kb/d of gasoline net exports and 250 kb/d of distillate net exports.

And some additional observations:

Should these levels of outages remain in place, and using past hurricanes as proxies for the impact on oil demand, we roughly estimate that the impact of Harvey on the US oil market would be to add 1.4 mb/d of crude while removing 615-785 kb/d of gasoline and 700 kb/d of distillate. Larger refinery outages would increase the long crude and short product impacts.

  • Refinery crude intake is down 3 mb/d with oil production down 1 mb/d and net crude imports down 0.6 mb/d. As a result, every day these outages remain in place, US crude inventories increase by 1.4 mb due to the hurricane.
  • Gasoline production is down 1.25 mb/d (assuming yields of refineries disrupted are in line with the Texas Gulf Coast EIA sub-PADD 3 region) with net exports down 0.25 mb/d. Our analysis of the past 10 hurricanes to hit Texas/Louisiana showed that total oil demand falls for c.3 weeks and that in the monthly data, the loss of gasoline demand is 150 kb/d on average. This implies a daily loss in gasoline demand of 215 kb/d each day during these three weeks. This would leave the US gasoline market short 785 kb/d as long as current refinery and port outages stay at current levels. Should monthly gasoline demand fall 270 kb/d as it did during the month when hurricane Ike hit the USGC, the US gasoline market would be short 615 kb/d instead due to the hurricane.
  • Distillate production is down 950 kb/d with net exports down 250 kb/d. Our analysis of the past 10 hurricanes to hit Texas/Louisiana showed that distillate demand was on average flat after the hurricane, supported by reconstruction and power generator demand. This would leave the US distillate market short 700 kb/d due to the hurricane as long as current refinery and port outages stay at current levels.

These impacts will likely lead to crude accumulating in the US, and more specifically in Cushing as pipe flows to the USGC are set to decline. This could weigh further on the WTI-Brent differential by weakening the US leg (long oil now) and strengthening the offshore market (with stronger refinery runs there). Gasoline and distillate cracks are likely to strengthen.

Overall, the impact of hurricane Harvey on the oil market (total demand vs. total supply) is likely be of higher oil inventories over the next couple of months. First, onshore US production typically normalizes in the month after a hurricane (as most wells are preventatively shut-in) while historically the impact on demand lasts several months. Second, the historical declines in demand observed during strong hurricanes Rita-Katrina (-1.0 mb/d the first month) and Ike-Gustav (-1.4 mb/d) are larger than the onshore (and currently observed) declines in oil production. Two caveats to this historical template: the proximity of these pairs of hurricanes overstates the demand impact while the magnitude of the onshore production impact of Harvey is unprecedented.

end

Oil tumbles below $47.000 per barrel amid speculation that up to 30% of the USA refining capacity will be off line

 

(courtesy zerohedge)

8. EMERGING MARKET

VENEZUELA/USA

end

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings MONDAY morning 7:00 am

Euro/USA   1.1926 UP .0007/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/EUROPE BOURSES RED

USA/JAPAN YEN 109.23 DOWN 0.102(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/   

GBP/USA 1.2913 UP .0038 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.2466 DOWN .0013 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS MONDAY morning in Europe, the Euro ROSE by 7 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1926; / Last night the Shanghai composite CLOSED  UP 31.30 POINTS OR 0.93%     / Hang Sang  CLOSED  UP 15.13 POINTS OR 0.05% /AUSTRALIA  CLOSED DOWN 0.33% / EUROPEAN BOURSES OPENED IN THE RED  

The NIKKEI: this MONDAY morning CLOSED DOWN 2,71 POINTS OR 0.01%

Trading from Europe and Asia:
1. Europe stocks  OPENED IN THE RED 

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 15.13 POINTS OR 1.20%  / SHANGHAI CLOSED UP 31.30 POINTS OR 0.93%   /Australia BOURSE CLOSED DOWN 0.55% /Nikkei (Japan)CLOSED DOWN 2.71  POINTS OR 0.01%   / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1299.05

silver:$17.24

Early MONDAY morning USA 10 year bond yield:  2.1711% !!! UP 1/2   IN POINTS from FRIDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

The 30 yr bond yield  2.7561, UP 1/2  IN BASIS POINTS  from FRIDAY night.

USA dollar index early MONDAY morning: 92.46 DOWN 28  CENT(S) from FRIDAY’s close.

This ends early morning numbers  MONDAY MORNING

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And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield: 2.860% DOWN 1 in basis point(s) yield from FRIDAY 

JAPANESE BOND YIELD: +.011%  DOWN 1   in   basis point yield from FRIDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.601% DOWN 1   IN basis point yield from FRIDAY 

ITALIAN 10 YR BOND YIELD: 2.082 DOWN 2  POINTS  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 48 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.376% DOWN 1/2  IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR MONDAY

Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM 

Euro/USA 1.1975 UP .0057 (Euro UP 57 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 109.24 DOWN 0.77(Yen UP 8  basis points/ 

Great Britain/USA 1.2929 UP  0.0055( POUND UP 55 BASIS POINTS)

USA/Canada 1.2497 UP .0017 (Canadian dollar DOWN 17 basis points AS OIL FELL TO $46.36

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This afternoon, the Euro was UP  by 57 basis points to trade at 1.1975

The Yen ROSE to 109.24 for a GAIN of 8  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 55  basis points, trading at 1.2929/ 

The Canadian dollar FELL by 17 basis points to 1.2492,  WITH WTI OIL FALLING TO :  $46.36

The USA/Yuan closed at 6.614/
the 10 yr Japanese bond yield closed at +.011%  DOWN 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 1/ 2  IN basis points from FRIDAY at 2.173% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.769 UP 1/2 in basis points on the day /

Your closing USA dollar index, 92.27  DOWN 47 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY: 1:00 PM EST

London:  CLOSED HOLIDAY
German Dax :CLOSED DOWN 44.47 POINTS OR 0.37%
Paris Cac  CLOSED DOWN 24.58 POINTS OR 0.48% 
Spain IBEX CLOSED DOWN 59.40 POINTS OR 0.57%

Italian MIB: CLOSED DOWN 3.66 POINTS OR 0.02% 

The Dow closed DOWN 5.27 OR 0.02%

NASDAQ WAS closed UP 17.37  POINTS OR 0.28%  4.00 PM EST

WTI Oil price;  46.36 at 1:00 pm; 

Brent Oil: 51.71 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  58.56 DOWN 4/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 4 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO  +0.376%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$46.73

BRENT: $51.95

USA 10 YR BOND YIELD: 2.157%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.7554%

EURO/USA DOLLAR CROSS:  1.1977 UP .0059

USA/JAPANESE YEN:109.27  DOWN  0.056

USA DOLLAR INDEX: 92.26  DOWN 48  cent(s) ** BREAKS THROUGH RESISTANCE OF 93.00/HUGE RESISTANCE STILL AT 92.00

The British pound at 5 pm: Great Britain Pound/USA: 1.2931 : UP 56 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2505 UP 27 BASIS pts 

German 10 yr bond yield at 5 pm: +0.376%

END

And now your more important USA stories which will influence the price of gold/silver

TRADING IN GRAPH FORM FOR THE DAY

“We Have A Problem” – Houston Hits Stocks, But Bonds & Bullion Bid

“Unprecedented”

 

Gold was the big gainer on the day with bonds barely green and stocks and the dollar lower…

 

And remains the big winner YTD…

 

The Dow ended the day red, but ranges were very narrow…Because nothing says buy small cap (domestic) stocks like an unprecedented crisis in Texas…

 

FANG Stocks closed higher but gave back their early short-squeeze gains…

 

S&P remains below its 50DMA…

 

But VIX was hammered lower to ensure a green S&P close…

 

Tech outperformed (and Utes closed green) as Retailers, Energy, and Financials dropped early and never bounced…

 

Meanwhile, Speculators have never been more net long Dow futures

Notably VIX short positioning was reduced (less short) and aggregate bond futures positioning remains near its longest since 2013 (and aggregate FX futures positioning is near the most USD short since 2013).

Aside from the long-end, Treasury yields fell modestly on the day (belly outperforming the tails)…(NOTE: UK Bank Holiday today)

10Y Yields dropped to 2.15% – lowest since Draghi’s June hawish comments.

 

The Dollar Index drifted lower during the US session (extending the Yellen/Draghi losses from Friday) after trading in a very narrow range overnight…

 

The Dollar Index fell below otys 200-week average for the first time since 2014..

 

Gold futures settled above $1300 for the first time since Nov 2016…

 

To the highest close for front-month futures since Sept… (biggest day for Gold in over 3 months)

 

Silver also blew through $17 convincingly, closing above its 200DMA for the first time since April…

 

While gold had a big day, the copper/gold ratio remains notably decoupled from bonds… Gold up more? Bond prices down? Copper crumble?

 

Finally, of course, the big news today was the swings in the energy complex. While RBOB Gasoline spiked at last night’s open, its drifted lower all day and WTI tumbled to one-month lows…

 

There could be some relief as the WTI-RBOB Crack leaked lower into the close…

 

end
SATURDAY MORNING /GALVESTON AND SURROUNDING TOWNS IN TEXAS:
Devastation begins in the Galveston and surrounding towns due to damage from Hurricane Harvey
(COURTESY ZEROHEDGE)

Live Coverage: Over 200,000 Without Power As Hurricane Harvey Brings “Devastating Winds And Rain” To Texas

Live CBS Coverage:

Hurricane Harvey settled over southeast Texas on Saturday morning, “devastating torrential rain” and lashing the state’s Gulf Coast with damaging winds over hundreds of miles of coastline that braced for what forecasters predicted would be life-threatening storm surges.

“This is going to be a very major disaster,” Texas Gov. Greg Abbott said Friday, hours before the storm hit between Port Aransas, just outside Corpus Christi, and Port O’Connor, to the north. Utilities reported widespread power outages on Saturday, some of which emergency officials said could last for days

Harvey made landfall just before midnight on Friday between Port Aransas and Port O’Connor as a monstrous Category 4 storm – the first of that level to strike the U.S. since Charley in 2004, and the strongest storm in more than 50 years to hit Texas.

By daybreak it had been downgraded to a Category 1 storm from a Category 4, according to the National Weather Service. But the storm was expected to settle in over South Texas for several days. As much as 30 inches of rain is forecast to fall by next Wednesday, with some areas getting as much as 40 inches.

Meanwhile, the storm surge could bring flooding of 6 to 12 feet to a coastal area that includes Matagorda Island and Port O’Connor. An estimated $40 billion worth of damage is expected to be left behind.


Craig “Cajun” Uggen, 57, nearly floods his truck as Hurricane Harvey comes ashore 

in Corpus Christi, Texas, on Friday, August 25, 2017. Minutes later, high winds blew 
off the camper carrying all of his belongings

Tyner Little, a spokesman for Nueces County, which includes Corpus Christi, said conditions were still severe in the area, but that winds appeared to be dying down. But Saturday brought a new threat: more rain, and possibly days of it. Mr. Little said the region was bracing for severe flooding as the storm sat over the coast with little signs of it dissipating anytime soon. According to forecasters, the storm could potentially cause devastating flooding in cities like Houston later in the week.

.@NASA releases new image of Hurricane Harvey as seen by its satellites at 7 a.m. ET: http://cbsn.ws/2wdsMmt 

On Saturday morning, emergency workers and police spread out across coastal communities of Corpus Christi and Rockport to assess the damage, but conditions were making such operations difficult. No fatalities were immediately reported from the storm, the first substantial hurricane to hit Texas since Hurricane Ike struck the Gulf Coast in 2008. The last Category 4 storm to hit Texas was Hurricane Carla in 1961, according to the National Weather Service.

Meanwhile, approximately 213,000 local customers were without power, Electric Reliability Council of Texas, which manages the state’s power grid, said Saturday according to the WSJ. About 162,000 people were without power in the Corpus Christi area specifically, according to American Electric Power, a utility that serves the region. Early Saturday, Corpus Christi officials warned residents to reduce the use of toilets and faucets as the power outage had impacted the city’s wastewater-treatment plant. A boil advisory was in effect for water use in the city, which has about 325,000 residents.

According the National Hurricane Center, Harvey was moving slowly over the state, and would continue to produce torrential rains. In a Saturday morning bulletin, the center said that catastrophic flooding was expected over the next few days.”

According to the WSJ, the City of Rockport, along the coast near Corpus Christi, appeared to take a direct hit from the hurricane, local officials said late Friday night. Larry Sinclair, a commander with the Rockport Police Department said damage in at least in some parts of city was significant.

Mr. Sinclair said that officers and emergency workers were trying to assess the extent of the damage to buildings and were checking to see whether anyone was trapped inside. But he said wind conditions were making it difficult for emergency workers to evaluate the level of devastation the city and its residents had suffered.

 

“We were pretty much ground zero,” he said.

 

Earlier in the day, the mayor of Rockport told a local television station that residents of his coastal city who don’t evacuate should use a marker to write their names and Social Security numbers on their arms.

Defying forecasts that the storm would weaken as it headed inland, Harvey had picked up strength churning toward the Gulf Coast, and is expected to drench the state with as much as 40 inches of rain in some areas, according to the National Weather Service. The National Hurricane Center warned of “catastrophic flooding” from the storm. Even before the center of the storm made landfall Friday night, hurricane-force winds were being reported along the coast, according to the National Hurricane Center. Friday night, 104,000 people had lost power, according to a tweet from a state power-grid operator.

Late on Friday, Texas Gov. Abbott said FEMA had granted his request for a presidential disaster declaration in response to Harvey. President Donald Trump also tweeted that he had signed the declaration, making more federal aid available to the state. On Saturday morning, Trump congratulated the on-the-ground response to Hurricane Harvey for avoiding mistakes his predecessor made in response to Hurricane Katrina in 2005.

“We have fantastic people on the ground, got there long before #Harvey. So far, so good!” he tweeted. He was responding to a warning from Sen. Chuck Grassley (R-Iowa) the day before to “keep on top” of Harvey in order to avoid repeating the “mistake” former President George W. Bush made during Hurricane Katrina.

.@ChuckGrassley – got your message loud and clear. We have fantastic people on the ground, got there long before . So far, so good!

White House officials said President Trump had been briefed on storm preparations, and that he would have access to any staff or resources he might need while spending the weekend at Camp David, the presidential retreat in Maryland. Trump intends to visit Texas early next week as part of his response to the hurricane, White House press secretary Sarah Huckabee Sanders said.

Homeland Security adviser Tom Bossert, also a former homeland security adviser to Bush, spoke frankly of mistakes made during Katrina on Friday during a White House press briefing. “I think it’s not just what’s on my mind but on the minds of all of the emergency managers in our community, especially those in Texas and Louisiana,” Bossert said of Katrina. “That experience is still in their minds, in their muscle memory. Congress has gotten better, passed laws to allow us flexibility to employ not just deploy in advance of an event.”

* * *

Before the storm made landfall on Friday, thousands of people fled inland, leaving behind deserted coastal communities with boarded-up homes and businesses, and barren grocery stores. But others stayed behind, prompting fears from local officials as the hurricane grew more powerful.

Threatening the local energy infrastructure, major ports were closed, and oil operations along the Texas coast were suspended. There are more than 800 oil platforms in the path of the storm and more than 100 refineries and terminals on the shore that could be disrupted, according to the consultancy firm Riskpulse.

According to Bloomberg calculations, the hurricane has forced shutdown of approximately 1 million b/d of crude and condensate refining capacity in Texas, which equates to ~10% of PADD3 refining capacity. It had also suspended ~22%, or 377k b/d, of Gulf of Mexico oil production. Among the shuttered refiners are the following:

  • Citgo 163k b/d Corpus refinery is said to shut ahead of hurricane
  • Flint Hills Corpus Christi East, West plants shut; capacity 293k b/d; company declared force majeure on plant
  • Magellan Corpus Christi, Texas, condensate splitter; capacity 50k b/d
  • Valero shuts Corpus Christi East, West plants and Three Rivers refinery; combined capacity 478k b/d
  • Shell Deer Park said to shut largest crude unit; refinery capacity 316.6k b/d

The U.S. Geological Survey forecast that the storm’s power could significantly impact 65% of the state’s coastline.

Separately, Gov. Abbott said that in addition to strong winds, officials are concerned about flooding caused by the storm hovering over the coastal bend of Texas.

“We are going to be dealing with immense, really record-setting flooding in multiple regions across the state of Texas,” Gov. Abbott said according to the WSJ. “There will be a tremendous amount of rain dropped on miles upon miles of Texas.” People who hadn’t moved away from the coast face the possibility of going a long time without access to basic necessities such as water, power and food, the governor said.

* * *

From small coastal communities to major ports such as Houston and Corpus Christi, which handled hundreds of billions of dollars worth of cargo last year, emergency officials scrambled Friday to make final preparations before Harvey hit.

Houston officials said the city was preparing for significant effects from the hurricane, mostly in the form of heavy rains that could swamp the city. Police and fire officials started preparing evacuation boats, high-water rescue vehicles and supplies in anticipation. Residents were being urged to have a week’s worth of food and water on hand. Houston officials said Friday that no mass evacuations will be called for the Houston region, despite expectations the area will see a massive amount of rain over the next several days. Officials say flooding is likely, especially as rainfall builds up in the local bayous.

 

“We want people to be alert, prepared, on guard, stocked up, patient, sheltered, calm and ready,” Houston Mayor Sylvester Turner said as he urged people to stay off the roads.

 

In an interview at Houston TranStar, a government emergency operations center where officials are coordinating storm efforts, Mayor Turner said storm surge out of Galveston could also cause problems, as it blocks water from the draining into the Gulf.

In Corpus Christi, a city of roughly 325,000, city officials said that people living in low-lying areas were being strongly encouraged to leave, but officials had not issued a mandatory evacuation order. Mayor Joe McComb defended the city’s decision not to order people out, saying he had consulted at length with local officials. He added that many residents had heeded warnings to leave, though he didn’t have any estimates on how many had left.

Corpus Christi’s shoreline was empty Friday as rain and wind whipped against now boarded-up hotels that line the street, the occasional police car slowly patrolling. Nearby, residents rushing to a HEB grocery store for last-minute supplies were turned away. The store, like many others here, had shut its doors early.


Luis Perez watches waves crash in Galveston, Texas as Harvey intensifies: Photo AP

SUNDAY MORNING
HOUSTON FLOODED
(courtesy zerohedge)

“It’s Catastrophic, Unprecedented, Epic”: 5 Dead As Houston Reels Under Historic Flooding

Live Feed from CBS

Emergency workers and rescue crews in Houston have been overwhelmed overnight with calls for water rescues, having responded to “hundreds” as of early Sunday, the Houston Chronicle is reporting, as Harvey, the most powerful storm to hit the state in more than 50 years, roared inland. According to the Houston newspaper, five people are now reported dead in Houston as Tropical Storm Harvey has dumped up to 30 inches of rain.

“It’s catastrophic, unprecedented, epic — whatever adjective you want to use,” Patrick Blood, a National Weather Service meteorologist, told the Chronicle“It’s pretty horrible right now.” The newspaper reported the weather service said five people have died in the Houston area in unconfirmed flood-related deaths.

http://www.ssd.noaa.gov/PS/TROP/floaters/09L/imagery/vis_lalo-animated.gif

As the Statesman puts it“It was supposed to be bad. It wasn’t supposed to be this bad.”

A tweet from executive weather producer at the Weather Channel, Matthew Sitkowski, summarized the situation best: “surreal.”

This image and the forecast of what is still to fall…. This is surreal.  

Underscoring the severity of the storm, moments ago president Trump tweeted “Wow – Now experts are calling #Harvey a once in 500 year flood! We have an all out effort going, and going well!”

Wow – Now experts are calling  a once in 500 year flood! We have an all out effort going, and going well!

In its latest bulletin, the National Weather Service similarly did not mince words, saying this morning that “catastrophic flooding is ongoing with flash flood emergencies in effect. The threat for continued additional, catastrophic, unprecedented and life threatening flooding continues today and into next week with periods of heavy rain from bands coming off the Gulf. Flash Flood Watches and Warnings are currently in effect for all of southeast Texas.”

NWS computer models show continued rounds of thunderstorms spawned by Harvey, which has been downgraded from a hurricane to tropical storm. Blood said the Houston area can expect at least an additional 15 to 25 inches over the next few days.

Thunderstorms pummeled this city overnight Saturday as Tropical Storm Harvey stalled out again, dropping more nearly two feet of rain in some residential neighborhoods, which triggered widespread flooding that is already blamed for five deaths. To the south, it was even worse. More than two feet of rain fell at the National Weather Center’s Houston office in League City, about 30 miles south of Houston proper. Emergency responders turned swamped freeway overpasses into ramps to launch rescue boats, Houston Chronicle reporter Dug Begley tweeted early Sunday morning.

Texas governor Greg Abbott told Fox News that damage from Harvey will be in the billions of dollars statewide. President Donald Trump took to Twitter this morning to say, “I will be going to Texas as soon as that trip can be made without causing disruption. The focus must be life and safety.”

Some neighborhoods have been hit with more than 15 inches of rain, the Chronicle reported, forcing some residents to flee to their attics, especially along Interstate 45 between downtown and Clear Lake, including parts of Pasadena. One resident described seeing a woman’s body floating in the streets during a flash flood in the same western part of the city. The flash floods were several feet high, the resident told local TV station abc13.

A mobile park is destroyed in the Coast Bend area on Saturday in Port Aransas, Texas

According to Reuters, Houston’s William P. Hobby Airport canceled all inbound and outbound flights early on Sunday due to standing water on the runway. The airport said its arrivals area was flooded, and the National Weather Service issued a flash flood alert for the surrounding area. Authorities have urged residents to stay off the streets of Houston and other southeast Texas cities as rain falling at up to 5 inches per hour flooded roads and major intersections.

The storm has killed at least two people and Harris County Sheriff Ed Gonzalez said on Twitter the death toll could rise, with his deputies responding to reports of a deceased woman and child inside a submerged vehicle on Interstate 10 near Houston.

 

On Friday night, a man died in a house fire in the town of Rockport, 30 miles (48 km) north of Corpus Christi. Another dozen people in the area suffered injuries including broken bones, another official said.

 

The Harris County Joint Information center said first responders were conducting hundreds of rescues early on Sunday morning.

Gonzalez’ Twitter feed was inundated by residents asking for help. The sheriff could only tell some of them that crews were doing the best they can. “All agencies care but everyone simply operating at maximum capacity,” he tweeted at one point.

Some in Houston have climbing into attics to flee rising flood waters, the Houston Chronicle also reported . “Have reports of people getting into attic to escape flood waters,” tweeted Houston Police Chief Art Acevedo, Austin’s previous police chief. “Do not do so unless you have an ax or means to break through onto your roof.” Those reports were coming from areas along Interstate 45 between downtown Houston and Clear Lake, the Chronicle reported.

Early Sunday, sheriff Gonzalez tweeted that there were reports of several submerged vehicles on Interstate 10 at Lathrop and added that, while it was unconfirmed, crews were investigating reports that one of the vehicles possibly had a deceased woman and child inside.

Harvey slammed into Texas late Friday as a Category 4 hurricane with winds of 130 miles per hour (210 km per hour), making it the strongest storm to hit the state since 1961. It has since lingered over the state, dumping amounts of rain that threaten to break the record established nearly 40 years ago when Alvin, Texas, was deluged by 43 inches of rain in 24 hours from July 24-25, 1979.

The storm has ripped off roofs, snapped trees, triggered tornadoes and flash floods and had cut off power to nearly 230,000 people on Saturday night. Houston police officials said officers were evacuating two flooded apartment complexes. Oil and gas production was largely halted in the state, prompting price hikes at the pumps.

“There are a number of stranded people on our streets, calling 911, exhausting needed resources. You can help by staying off the streets,” Houston Mayor Sylvester Turner said on Twitter.

Officials here have reported performing at least 1,000 high-water rescues with thousands more needed as homes were inundated by the water. The 911 system here was so overwhelmed that officials begged Houstonians to only use it if they were in immediate danger.

The weather forecast shows no reprieve in sight for this city and county of 4.5 million people. Rain, including more torrential downpours, remains in the forecast for the rest of today.

* * *

Even though Harvey was downgraded to a tropical storm on Saturday, it is expected to lash Texas for days as it heads inland, according to the National Hurricane Center (NHC), which described the forecast for the state as potentially “catastrophic.” The coastal town of Rockport took a direct hit from the storm, leaving streets flooded and strewn with power lines and debris on Saturday. A dozen recreational vehicles were flipped over on a sales lot, one blown into the middle of the street. A convoy of military vehicles arrived in the Rockport area on Saturday to help in the recovery efforts, and town officials announced an overnight curfew for residents.


Daylight shows the devastation in Rockport and surrounding areas of southeast Texas,

“It was terrible,” resident Joel Valdez, 57, told Reuters. The storm ripped part of the roof from his trailer home at around 4 a.m., he said as he sat in a Jeep with windows smashed by the storm. “I could feel the whole house move.”

Before the storm hit, Rockport’s mayor told anyone staying behind to write their names on their arms for identification in case of death or injury. A high school, hotel, senior housing complex and other buildings suffered structural damage.

Texas Governor Greg Abbott said he was activating 1,800 members of the military to help with the statewide cleanup, while 1,000 people would conduct search-and-rescue operations. The Texas Department of Criminal Justice said it was forced to evacuate about 4,500 inmates from three state prisons near the Brazos River because of rising water.


A destroyed apartment complex in Rockport, TX

Meanwhile, the U.S. Coast Guard said it had rescued 20 people from distressed vessels on Saturday, and was monitoring two Carnival Corp cruise ships carrying thousands of people stranded in the U.S. Gulf of Mexico.  Authorities warned of the potentially life-threatening impact of heavy rains between Houston and Corpus Christi over the next several days, with the latest forecast saying Harvey could loop back toward the Gulf of Mexico coast before turning north again on Tuesday.

“This rain will lead to a prolonged, dangerous, and potentially catastrophic flooding event well into next week,” the National Weather Service said.

In a Sunday morning tweetstorm, instead of taking shots at his political opponents, president Trump assured people on the ground that government support is on the ground: “Many people are now saying that this is the worst storm/hurricane they have ever seen. Good news is that we have great talent on the ground.” He added that “I will be going to Texas as soon as that trip can be made without causing disruption. The focus must be life and safety.”

I will be going to Texas as soon as that trip can be made without causing disruption. The focus must be life and safety.

END
Wow! this is some devastation:  FEMA expects over 450,000 victims from Hurricane Harvey with 30,000 pour souls seeking shelter:
(courtesy zero hedge)

“You Couldn’t Dream This Up”: FEMA Expects Over 450,000 Harvey Victims, 30,000 To Seek Shelter

The Federal Emergency Management Agency said it was committed to getting federal resources to Texas as quickly as possible to help with the flooding caused by Tropical Storm Harvey. Speaking on Monday morning FEMA administrator Brock Long said more than 30,000 people were expected to be placed temporarily in shelters and more than 450,000 people likely to seek assistance. A disaster declaration request from the Louisiana governor would also likely be expedited.

“We are not out of the woods yet”- FEMA official on Tropical Storm Harvey

Long said that 30 to 50 Texas counties have been affected by Tropical Storm Harvey and that work was underway to restore power for critical infrastructure. Other highlights, courtesy of Bloomberg:

  • “This is a life safety, life-sustaining mission”
  • In addition to search and rescue, next objective is to relocate survivors to shelters
  • Evacuation of Houston could take days
  • Says people must listen to Houston-area local officials
  • Helping Texas overcome this disaster is going to be bigger than FEMA; “We need citizens to be involved”
  • “You could not dream this forecast up”; this has been a “landmark event”

The FEMA administrator said the agency is working with the Army Corps of Engineers to restore power and critical infrastructure to the Southern Texas region. Long also said FEMA is working with the Department of Homeland Security and the Department of Defense to bolster security forces in the region.

Another FEMA official at briefing said rivers won’t crest until later this week, with the peak of the torrential rainfall expected to hit around Wednesday or Thursday, while National Weather Service’s Louis Uccellini says flooding will be very slow to recede.

The silver lining: according to the Coast Guard no oil spills have been detected yet.

Also on Monday, Emergency workers began releasing water into the Buffalo Bayou from two flood-control dams in Houston on Monday, a move that could impact thousands of residents, officials said. The U.S. Army Corps of Engineers said it began to release water from the Addicks and Barker dams early Monday morning to prevent uncontrollable flooding of the Houston-metropolitan area as water levels continued to rise rapidly beneath torrential rains being released by Tropical Storm Harvey.

Engineers were forced to start the process earlier than previously announced because water levels in the reservoirs had “increased dramatically in the last few hours,” officials said early Monday, adding that the release would likely cause additional street flooding that could potentially spill into homes. This is the first time engineers have done this for flood control, officials said.

 

“If we don’t begin releasing now, the volume of uncontrolled water around the dams will be higher and have a greater impact on the surrounding communities,” Col. Lars Zetterstrom, Galveston District commander, said in a statement Monday.

The two dams were constructed by the federal government in the 1940s to reduce flooding along Buffalo Bayou, a narrow body of water that runs through downtown Houston. But development along the edges of the reservoirs has in recent years placed homes at risk upstream of the dams as well. The reservoirs, located on western outskirts of Houston, are about 17 miles away from downtown Houston.

“Both reservoirs are rising more than half a foot per hour,” Zetterstrom said. “Residents adjacent to the reservoirs need to be vigilant because the water in the reservoirs is rising rapidly.”

 end
Texas activates 12,000 National Guardsmen.  no doubt that the total cost of Hurricane Harvey will exit 40 billion dollars
(courtesy zero hedge)

Texas Activates 12,000 National Guardsmen “In Response To Harvey Devastation”

Moments ago, in response to the devastation from hurricane Harvey, Texas Governor Abbott announced he is activating the entire Texas National Guard, bringing the total number of deployed guardsman to roughly 12,000. These National Guardsman will assist in the ongoing search and rescue effort for any Texans in immediate danger, and will be heavily involved in the extensive recovery effort in the aftermath of the storm.

°It is imperative that we do everything possible to protect the lives and safety of people across the state of Texas as we continue to face the aftermath of this storm,” said Govemor Abbott. The Texas National Guard is working closely with FEMA and federal troops to respond urgently to the growing needs of Texans who have fallen victim to Hurricane Harvey, and the activation of the entire Guard will assist in the efforts already underway. I would like to thank FEMA Administrator Brock Long, as well as all our brave first responders for their hard work in helping those impacted by this terrible storm.”

Maj. Gen. John F. Nichols, Texas Adjutant General, said that “we will not rest until we have made every effort to rescue all those in harm’s way. We will remain here as long as we are needed. I want to thank Govemor Abbott for his continued leadership and look forward to serving the great people of Texas.”

The full statement, which judging by the number of grammatical errors was clearly rushed, is below:

Governor Abbott Activates Entire Texas National Guard In Response To Hurricane Harvey Devastation

 

Governor Greg Abbott today announced he has activated the entire Texas National Guard in response to Hurricane Harvey, bringing the total number of deployed guardsman to roughly 12,000. These National Guardsman will assist in the ongoing search and rescue effort for any Texans in immediate danger, and will be heavily involved in the extensive recovery effort in the aftermath of the storm.

 

°It is imperative that we do everything possible to protect the lives and safety of people across the state of Texas as we continue to face the aftermath of this storm,” said Govemor Abbott. The Texas National Guard is working closely with FEMA and federal troops to respond urgently to the growing needs of Texans who have fallen victim to Hurricane Harvey, and the activation of the entire Guard will assist in the efforts already underway. I would like to thank FEMA Administrator Brock Long, as well as all our brave first responders for their hard work in helping those impacted by this terrible storm.”

 

“While this is still a dangerous situation with a long response effort ahead, the state and people of Texas are resilient,” said FEMA Administrator Brock Long. °FEMA was here before the storm hit, and we will be here as long as needed, actively coordinating the full resources of the federal government, to support Gov. Abbott and the state.”

 

“The men and women of the Texas National Guard are working around the clock to support all relief efforts from Hurricane Harvey,” said Maj. Gen. John F. Nichols, Texas Adjutant General. “We will not rest until we have made every effort to rescue all those in harm’s way. We will remain here as long as we are needed. I want to thank Govemor Abbott for his continued leadership and look forward to serving the great people of Texas.”

 

The Texas Guard currently has approximately 3,000 personnel activated and mobilized for operations relating to Hurricane Harvey rescue and recovery. This new mobilization by Govemor Abbott send those who are physically able, not currently deployed, preparing to deploy or in a combat preparation cycle to answer the call for help and assist their fellow Texans in need. All Texas Military Department personnel should report to their respective units for further instructions.

Now we witness SUV’s in a downturn with respect to the uSA economy.  This class is wildly overweight and sales have been quite slow despite the fact that huge incentives have been given to make the sale. This should hurt mfg.’s bottom line:
(courtesy zero hedge)

Carmageddon Continues – Dealers “Wildly Overweight” SUVs As Sales Slow

Authored by Mike Shedlock via MishTalk.com,

The auto boom, one of the key components propping up consumer spending, has come to an end.

Dealers are wildly overweight SUVs just as the market turned.

As auto-industry growth stalls and family sedans go the way of the flip phone, one silver lining had been the trusty “crossover” SUV. Sales in the category boomed amid lower gasoline prices and higher demand for spacious wagons with all-wheel drive.

 

But more clouds seem to be gathering as the summer car-selling season comes to an end. Incentives on SUVs are skyrocketing amid rising inventories, a trend that promises to dent the fat profits the segment has long returned.

 

Auto makers report sales on Friday, and August volume is expected to rise 2% compared with the same month in 2016, but only because dealers have an extra selling day this year. On an adjusted basis, the rate of retail sales—stripping out deliveries to fleet buyers—will hit the lowest point of 2017, according to J.D. Power, despite hefty sales incentives and new model offerings.

 

The U.S. auto market’s slowdown isn’t a new story, as analysts widely expected a seven-year growth streak to end and for sales to plateau at roughly 17 million a year for the foreseeable future. Red flags for the crossover market, however, represent a whole new set of headaches, particularly for companies like General Motors Co.

 

“The industry is wildly overweight on crossovers,” John Murphy, an auto analyst for Bank of America Merrill Lynch, said in a recent presentation. The number of crossover models sold in U.S. dealerships is expected to rise to 110 nameplates by late 2020, up from 78 today, he estimated.

 

Auto makers like GM—long dominant in the SUV market—have relied on bigger or heavier vehicles with higher price tags to drive profits, and offset the losses that result from sales of family sedans or compact cars. But in the first half of 2017, incentives for SUVs shot up 33%, according to research website Edmunds.com, with the average discount or rebate in the segment reaching $3,200.

 

Ford Motor Co. is currently offering a $3,500 cash rebate on the Ford Escape, along with 0% financing for 72 months. A Ford spokesman said the SUV market is “increasingly competitive,” noting average transaction prices last month fell $400 compared to a year earlier.

Economists Expect Plateau

At every peak, economists expect a “plateau”, be it the stock market, the housing market, or cars.

Reasons to Expect a Crash

  • Self-driving features are on the way and many people will wait for them
  • Lots of retiring boomers purchased their last car
  • Anyone who bought with long-term financing in the past few years is deeply underwater, making trade-ins difficult
  • Auto sales are increasingly subprime
  • After years of record sales, who needs a newer car away?

Vehicles account for 20% of retail spending. A crash or even a significant slowdown will impact retail sales and thus GDP.

END

Rumours abound that Tillerson is very frustrated with Trump and may exit:

(courtesy zero hedge)

Tillerson Out? “Frustrated” Trump “Fed Up” With Secretary Of State: Axios

After North Korea launched three more short-range ballistic missiles into the East Sea early on Saturday morning, local time, political observers were eagerly looking forward to Trump’s response, especially since the president had managed to get boxed in by Kim Jong Un: on one hand, do nothing and be mocked and ridiculed not only by the North Korean press, but by the rest of the developed world, whose view of Trump’s diplomatic skills could hardly be any worse; or on the other hand, launch a military campaign, either surgical or broad, and risk a retaliation against South Korea and millions of US allies dying.

In the end the US appears to have chosen the former and on Sunday, Secretary of State Rex Tillerson said the firing of three ballistic missiles by North Korea this week was a provocative act but that the United States will continue to seek a peaceful resolution. The de-escalating tone took place just days after Tillerson credited the North with showing some restraint by not launching a missile since the ICBM test in July, and he had expressed hope that the easing of tension could lead to dialogue. That was not meant to be, although in it appears that what happened next is North Korea called the US bluff, and the US folded. 

“We do view it as a provocative act against the United States and our allies,” Tillerson said in an interview on Fox News Sunday. “We’re going to continue our peaceful pressure campaign as I have described it, working with allies, working with China as well to see if we can bring the regime in Pyongyang to the negotiating table.”

As the NYT also reported, North Korea used multiple-rocket launchers off its east coast on Saturday to fire three short-range missiles that could strike United States military bases deep in South Korea, officials in Seoul said. The launches were the North’s first rocket tests since two intercontinental ballistic missile, or ICBM, were fired last month.

By resuming the tests, North Korea defied repeated urgings from the United States and South Korea to stop weapons trials and other provocations to pave the way for dialogue. The United States Pacific Command said that one of the three ballistic missiles had blown up immediately after blastoff, but that two others had traveled about 155 miles before splashing down. That would be far enough to reach major South Korean and American military bases, including those near the city of Pyeongtaek, about 60 miles south of Seoul. The range would also be sufficient to reach Seongju, a South Korean town where the United States has begun installing an advanced missile-defense system known as Thaad.

Kim Dong-yub, a defense analyst at the Institute for Far Eastern Studies at Kyungnam University in Seoul, said the tests on Saturday appeared to be aimed at expanding the strike range.

 

Nevertheless, the nature of the tests prompted some relief in the region.

 

The missiles flew to the northeast, not toward Guam, home to major United States Air Force and Navy bases. North Korea threatened to launch ballistic missiles in a “ring of fire” around Guam after President Trump threatened to hit the North with “fire and fury” if it persisted with its development of ICBMs.

Surprisingly, South Korea did not issue its usual condemnatory statement against the tests. In Tokyo, the chief cabinet secretary, Yoshihide Suga, said the missiles did not fall in Japanese waters or pose a threat to his nation’s safety. White House officials said that Mr. Trump had been briefed on the tests but did not immediately have any further comment.

And while North Korea was certainly on Tillerson’s agenda, what the media was focused on was Tillerson’s reported distancing from Trump’s remarks after the deadly Virginia protests, saying the president “speaks for himself.” Tillerson’s comment on “Fox News Sunday” follows Gary Cohn, the president’s chief economic adviser and the director of the National Economic Council, saying in a Financial Times interview published last week that the administration “can and must do better” in condemning hate groups.

In the exchange below, Chris Wallace asked Tillerson about Trump’s response to the racist carnage in Charlottesville. Tillerson replied: “I don’t believe anyone doubts the American people’s values or the commitment of the American government, or the government’s agencies to advancing those values and defending those values.”

Wallace asked the obvious follow-up question: “And the president’s values?”

“The president speaks for himself,” Tillerson said, leaving Wallace with a surprised look on his face.

Must-watch. Wallace asks Tillerson if Trump speaks for American values: “The President speaks for himself.” (Note Wallace’s reaction.)

So, in response moments ago Axios reported that Tillerson appears to be the next top administration in Trump’s proverbial board room, who may soon here the trademarked Trump phrase: “You’re Fired!” According to Axios, “there’s a ticking problem with Rex Tillerson, and it’s growing louder by the day, citing officials inside and close to the White House.”

President Trump has been growing increasingly frustrated with his Secretary of State. One time recently, after Trump had returned from a meeting on Afghanistan, a source recalled Trump saying, “Rex just doesn’t get it, he’s totally establishment in his thinking.”

As Axios adds, “Trump is getting more and more fed up with Tillerson, who has still yet to staff his agency.”

So is Tillerson the next top administration official to get kicked out by Trump? Unfortunately, the firings at the White House have been so fast and furious in recent weeks, the online political prediction marketplace PredictIt.com hasn’t had the time to put together a contract tracking the odds of Tillerson’s imminent survival, or lack thereof.

end

 

 

 

Trump this morning slams globalists and demands that the USA House/Senators give him China tariffs

(courtesy zero hedge)

Trump Reportedly Slams Administration’s Globalists, Demands “Bring Me China Tariffs”

It appears Goldman and the Globalist gang in The White House may have less power and influence than assumed in the absence of Steve Bannon. In what could be one of the most comprehensive (and easily traced) leaks from within Trump’s administration, Axios report sdetails of a small Oval Office meeting with Trump raging at senior staff as they push back against his hawkish trade war position.

Seemingly frustrated at his senior staff’s efforts to wage economic war against China, Trump lashed out at his new Chief of Staff General Kelly:

“John, you haven’t been in a trade discussion before, so I want to share with you my views. For the last six months, this same group of geniuses comes in here all the time and I tell them…

 

‘Tariffs. I want tariffs.’ And what do they do? They bring me IP. I can’t put a tariff on IP.

Axios, who confirm this account by sources with knowledge of the meeting and undisputed by the White House, explain in great detail, that Gary Cohn, a globalist who opposes tariffs and the protectionist trade measures pushed by the nationalist Bannonites, had his shoulders slumped and was clearly appalled by the situation.

 Trump added…

“China is laughing at us,… Laughing.”

 

“John, I want you to know, this is my view. I want tariffs. And I want someone to bring me some tariffs.

With seeming intimate knowledge of the transcript and actions within the meeting, Axios then describes how senior trade advisor Peter Navarro tried to rescue the situation, only to be rebuked by the president…”I don’t even know what I’m looking at here.”

However, it is Axios’ quoted conclusion of the meeting that raises the most eyebrows about just where the power and influence really remains in The White house…

“John, let me tell you why they didn’t bring me any tariffs,” he said.

 

“I know there are some people in the room right now that are upset. I know there are some globalists in the room right now. And they don’t want them, John, they don’t want the tariffs. But I’m telling you, I want tariffs.”

Finally, here’s the non-denial that the White House gave to Axios:

“The president has been very clear about his agenda as it relates to trade. Discussions pertaining to specific tariffs and trade deals are ongoing and have already resulted in many positive developments.”

It seems President Trump is more prone to ignore the Goldman-sponsored Globalist status quo seekers, and is still following Bannon’s strategy to maintain hegemony

“We’re at economic war with China,” he added. “It’s in all their literature. They’re not shy about saying what they’re doingOne of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path.

 

Bannon said he might consider a deal in which China got North Korea to freeze its nuclear buildup with verifiable inspections and the United States removed its troops from the peninsula, but such a deal seemed remote. Given that China is not likely to do much more on North Korea, and that the logic of mutually assured destruction was its own source of restraint, Bannon saw no reason not to proceed with tough trade sanctions against China.

 

“To me,” Bannon said, “the economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we’re five years away, I think, ten years at the most, of hitting an inflection point from which we’ll never be able to recover.”

As we noted earlierChina has already implied its response to any ‘economic war’ actions would likely lead to “unloading dollar assets.

(courtesy  zerohedge)

Sheriff Joe Arpaio Pardon Widens Republican Rift As McCain And Flake Blast “Lawless” Trump

It wasn’t just millions of Democrats that were left ‘triggered’ by Trump’s pardon of Sheriff Joe Arpaio over the weekend as several prominent Republicans, including John McCain, Jeff Flake and Paul Ryan, also decided to take a very public stand against the decision.  Both McCain and Flake took to twitter to blast Trump’s apparent lawlessness while Arpaio responded in weekend interviews saying “it’s sad” the Republicans continue to “go after the President.”  Per the Wall Street Journal:

“They’re trying to go after the president. He’s a great guy and I’m with him and will always be with him,” said Mr. Arpaio, a longtime sheriff in Maricopa County, Arizona, in an interview Sunday. “I’m sad what they’re doing to him. It’s sad.”

 

Several prominent Republican lawmakers objected to the pardon over the weekend, saying it short-circuited the legal system and undermined the rule of law. Among the critics of Mr. Trump’s move were Arizona’s two GOP senators, John McCain and Jeff Flake, and House Speaker Paul Ryan of Wisconsin.

 

Mr. Arpaio voiced disappointment in Mr. McCain’s position, saying, “It’s probably payback time” because Mr. Arpaio had campaigned for the senator’s Republican opponents in both of Mr. McCain’s presidential bids. As for Mr. Ryan, Mr. Arpaio said, “He ought to get on board and support our president.” Sen. McCain’s staff didn’t respond to a request for comment.

 

If lawmakers are upset about the pardon, Mr. Arpaio said, they should hold hearings into his legal case and look into the “bias” that he said he was shown.

Regarding the Arpaio pardon, I would have preferred that the President honor the judicial process and let it take its course.

 

Speaker of the House Paul Ryan also decided to weigh in on Trump’s blatant disregard for the “rights of everyone in the United States.”

Through a spokesman, Mr. Ryan said Saturday he “does not agree with the decision.”

 

“Law-enforcement officials have a special responsibility to respect the rights of everyone in the United States. We should not allow anyone to believe that responsibility is diminished by this pardon,” said Mr. Ryan’s spokesman, Doug Andres.

Meanwhile, perhaps the only person actually defending the Arpaio pardon on the weekend talk show circuit was Arizona state Senator Steve Montenegro who blasted the “hypocrisy of the left” for forgetting that it was Obama who pardoned and commuted the sentences of more hardened criminals than any president in history.

“What’s on display here is frankly the hypocrisy from the left,”Arizona state Sen. Steve Montenegro, a Republican, said on CNN’s “State of the Union.”

 

“We had President Obama pardoning hundreds of thugs… Where was the outrage from the left when he was pardoning thugs and murderers and unrepentant terrorists like that?” Mr. Montenegro said.

 

Of course, Montenegro seems to have a point…here is how Obama’s acts of clemency stack up against other Presidents…can anyone spot the outlier?

Commutatins

 

Ironically, Obama’s commutations and pardons weren’t blasted by the media…they were celebrated.

BREAKING: @POTUS has now commuted the sentences of 1,715 men and women, more than any president in history. http://go.wh.gov/6ULdiL 

Mueller Reportedly Probing Flynn’s Role In Attempt To Find Hillary’s 30,000 Missing Emails, WSJ

Back in June we noted a Wall Street Journal story about a longtime Republican operative from Chicago’s North Shore, Peter W. Smith, who apparently set out on a private mission to track down Hillary Clinton’s 30,000 missing emails.  Here’s how we described the story at the time:

To summarize the ‘bombshell’, the story is about a long-time Republican opposition researcher, 81-year-old Peter W. Smith, who apparently set out on a mission to find Hillary’s 30,000 emails which the FBI confirmed had gone missing.  In his efforts to find those emails, he scoured hacking chat rooms looking for clues and/or hackers that might be able to help him.  The WSJ alleges that Smith may or may not have been working with Michael Flynn but, in the end, they found absolutely nothing.  To summarize even further, a guy tried to find Hillary’s missing emails and failed…HALT THE PRESSES!

Now, the WSJ is back with an update suggesting that Special Counsel Robert Mueller’s team is interested in learning more about how/if Michael Flynn may have assisted Peter Smith in his search.

Special counsel Robert Mueller is examining what role, if any, former national security adviser Mike Flynn may have played in a private effort to obtain Hillary Clinton’s emails from Russian hackers, according to people familiar with the matter.

 

The effort to seek out hackers who were believed to have stolen Mrs. Clinton’s emails, first reported by The Wall Street Journal, was led by a longtime Republican activist, Peter W. Smith. In correspondence and conversations with his colleagues, Mr. Smith portrayed Mr. Flynn as an ally in those efforts and implied that other senior Trump campaign officials were coordinating with him, which they have denied. He also named Mr. Flynn’s consulting firm and his son in the correspondence and conversations.

 

The special counsel is investigating potential coordination between Donald Trump’s presidential campaign and Russia in the 2016 election.

Of course, even if Flynn did assist in attempts to track down Hillary’s missing emails, it’s unclear how exactly that is different from someone hiring Fusion GPS in attempts to track down dirt on President Trump.  While paying someone explicitly to hack into a computer network is obviously illegal, that is not what is alleged to have happened in this case as Smith was simply trying to track down information that many speculated had already been obtainedwhich is no different from what the media does on a daily basis.  

 

Meanwhile, the story of Mr. Smith took an even more bizarre twist when he committed suicide shortly after exposing his apparently unsuccessful attempts to find Hillary’s emails.  Smith is thought to have committed suicide due to an ongoing health problem.  Here’s an excerpt from our previous post:

Smith was found with a bag over his head with a source of helium attached. A medical examiner’s report gives the same account, without specifying the time, and a report from the Rochester, Minnesota police further details his suicide, according to the Chicago Tribune. Smith’s death occurred at the Aspen Suites in Rochester, records show. They list the cause of death as “asphyxiation due to displacement of oxygen in confined space with helium.”

 

In the note recovered by police, Smith apologized to authorities and said that “NO FOUL PLAY WHATSOEVER” was involved in his death. He wrote that he was taking his own life because of a “RECENT BAD TURN IN HEALTH SINCE JANUARY, 2017” and timing related “TO LIFE INSURANCE OF $5 MILLION EXPIRING.”

 

Mystery shrouded how and where Smith had died, but the lead reporter on the stories said on a podcast he had no reason to believe the death was the result of foul play and that Smith likely had died of natural causes.

/p>

Smith had been staying at the hotel – in a room typically used by patients of the Mayo Clinic – for several days and had extended his stay at least once but was expected to check out on the day his body was found. “Tomorrow is my last day,” Smith told a hotel worker on May 13 while he worked on a computer in the business center, printing documents, according to the police reports.

 

One of Smith’s former employees told the Tribune he thought the elderly man had gone to the famed clinic to be treated for a heart condition. Mayo spokeswoman Ginger Plumbo said Thursday she could not confirm Smith had been a patient, citing medical privacy laws.

 

Smith had a history of doing opposition research against President Bill Clinton and had a hand in exposing the “Troopergate” allegations about Bill Clinton’s sex life.

Needless to say, it could be a good sign for the Trump administration if this is truly the best thing that Special Counsel Mueller has to spend his time on.

end

Another nationalist member of Trump’s team, Sebastian Gorka resigns from his White House advisory post:

(courtesy zerohedge)

Sebastian Gorka Resigns From White House Post

A week after the White House pushed out former chief strategist Steve Bannon, the Trump administration has lost another controversial staffer. The departee this week is Sebastian Gorka, a deputy assistant to the president and former Breitbart employee who was closely allied with the White House’s rapidly shrinking anti-globalist faction. News of Gorka’s resignation was first reported by the Federalist, and later confirmed by Axios and a host of other news outlets.

As with Bannon’s ouster last week, the storyline of who said what when has gotten muddled: Gorka claimed he resigned, while the White House insinuated that he was pushed out.

News of Gorka’s ouster broke shortly after Trump announced that he would be pardoning sheriff Joe Arpaio, a decision that was widely expected after Trump hinted that he “wouldn’t do it tonight” at a rally in Phoenix earlier this week. It also comes as Hurricane Harvey, which has been upgraded to a category four hurricane, is threatening to lay waste to the southwest.

In a copy of Gorka’s bluntly worded resignation, which he leaked to the Federalist, the former staffer “expressed dissatisfaction with the current state of the Trump administration.”

“[G]iven recent events, it is clear to me that forces that do not support the MAGA promise are – for now – ascendant within the White House,” Gorka wrote. “As a result, the best and most effective way I can support you, Mr. President, is from outside the People’s House.”

In the letter, Gorka blamed the president’s failure to outline a plan for exiting Afghanistan after “16 years of disastrous policy decisions” for being the final straw. He also criticized the president and his military advisers for omitting any mention of Radical Islam from the president’s statement on Afghanistan, delivered earlier this week.

“Regrettably, outside of yourself, the individuals who most embodied and represented the policies that will ‘Make America Great Again,’ have been internally countered, systematically removed, or undermined in recent months. This was made patently obvious as I read the text of your speech on Afghanistan this week…

 

“The fact that those who drafted and approved the speech removed any mention of Radical Islam or radical Islamic terrorism proves that a crucial element of your presidential campaign has been lost…

 

“Just as worrying, when discussing our future actions in the region, the speech listed operational objectives without ever defining the strategic victory conditions we are fighting for. This omission should seriously disturb any national security professional, and any American who is unsatisfied with the last 16 years of disastrous policy decisions which have led to thousands of Americans killed and trillions of taxpayer dollars spent in ways that have not brought security or victory.”

Echoing comments made by Bannon following his ouster last week, Gorka reportedly told the president that he could better serve his America First agenda from the outside: “[I]t is clear to me that forces that do not support the MAGA promise are – for now – ascendant within the White House…”

That’s probably not far from the truth. As Axios points out, Gorka, a self styled national security and counterterrorism expert, was best known for his fiery television appearances, his only real contribution to the administration, and the quality that initially endeared him to the president. Gorka can easily keep up his TV schedule from outside of the West Wing. Gorka was widely reviled by Trump opponents because of his reputed affiliation with Hungarian nationalist group Vitezi Rend.

According to Axios, Gorka’s resignation is a sign that Chief of Staff John Kelly is tightening control of the White House’s sprawling, unaccountable fiefdoms.

The White House communications department confirmed that Gorka was no longer employed at the White House, but wouldn’t comment on whether he was fired or left voluntarily, according to ABC.

“I can confirm he no longer works at the White House,” the official said.

His ouster brings the number of officials who have been fired or otherwise departed the Trump administration to 14:

Finally, with the ouster of Bannon, the list of high-ranking personnel fired by Trump rises to 14. They are:

Sally Yates
Michael Flynn
Katie Walsh
Preet Bharara
James Comey
Michael Dubke
Walter Shaub
Mark Corralo
Sean Spicer
Micheal Short
Reince Priebus
Anthony Scaramucci
Steve Bannon
Sebastian Gorka

end

Amazon slashes Whole Foods prices  and this should send a price war against WalMart, Costco and other grocery outlets.

 

(courtesy zero hedge)

Amazon Slashes Whole Foods Prices As Much As 43%, Channel Checks Reveal

Following up on last week’s story that sent grocer – and Wal-mart – stocks tumbling, when Amazon annonced it would cut Whole Foods prices as soon as Monday, Bloomberg reports that according to channel checks, “Amazon spent its first day as the owner of a brick-and-mortar grocery chain cutting prices at Whole Foods Market” by as much as 43%.

Some early examples observed at the Whole Foods store on 57th Street in Manhattan:

  • organic fuji apples were marked down to $1.99 a pound from $3.49 a pound;
  • organic avocados went to $1.99 each from $2.79;
  • organic rotisserie chicken fell to $9.99 each from $13.99;
  • banana prices were slashed to 49 cents per pound from 79 cents.

Following the news, European grocer stocks ticked lower again, while Kroger was down 2%, as apparently the size of the markdowns came as a surprise to the market and as Whole Foods peers will now struggle to catch down to its heavily subsidized competitor, watching their margins and profitability erode in the process.

Maybe Trump will start putting weekly firings on the White House calendar?

end

 

I will see you Tuesday  night

Harvey.

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