Sept 7Gold and silver both stymie efforts by the bankers on their mini raid yesterday: gold rises by $4.35 and silver finally breaks above $18.00 to close at $18.04 up 18 cents/ Draghi sends conflicting signals and that causes the Euro to skyrocket (and the dollar to sink)/Hurricane Irma hammers Barbuda with 90% of the island destroyed/Irma heading straight for Miami and it is still a Cat 5/Senate passes the suspension of the debt ceiling for 6 months/now up to the House/many Republicans furious/suspension of debt ceiling is good for gold as they are freely spending/

GOLD: $1345.50 UP   $4.35

Silver: $18.04  UP 18 CENT(S)

Closing access prices:

Gold $1349.50

silver: $18.12

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: $1339.47 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1334.25

PREMIUM FIRST FIX:  $5.22

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1347.91

NY GOLD PRICE AT THE EXACT SAME TIME: $1335.00

Premium of Shanghai 2nd fix/NY:$12.91

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1340.45

NY PRICING AT THE EXACT SAME TIME: $1339.60

LONDON SECOND GOLD FIX  10 AM: $1343.50

NY PRICING AT THE EXACT SAME TIME. 1343.20

For comex gold:

SEPTEMBER/

NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 2 NOTICE(S) FOR  200  OZ.

TOTAL NOTICES SO FAR: 51 FOR 5100 OZ  (0.1586 TONNES)

For silver:

SEPTEMBER

 440 NOTICES FILED TODAY FOR

2,200,000  OZ/

Total number of notices filed so far this month: 3,518 for 17,590,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

 

 As I indicated to you yesterday, the mini flash crash would fail as gold/silver would rebound to positive territory as soon as the physical time zones for our precious metals would arrive  (2 15 am est  China and 4 am London). The demand for physical metals is intense and is overpowering the paper shorts.  Actually you can visualize that for yourself by witnessing how the amount of silver standing  (physical demand) is increasing every single day at the silver comex.

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE BY STEADY 866 contracts from  183,276 UP TO 184,142 WITH THE SMALL SIZED LOSS IN PRICE THAT SILVER UNDERTOOK IN YESTERDAY’S TRADING (DOWN 1 CENT(S). WE NOW HAVE MORE NEWBIE LONGS ENTER THE SILVER CASINO WITH NO SILVER LONGS EXITING FOR EFP’S. THE BANKERS HAD NO CHOICE BUT TO SUPPLY THE PAPER SHORT.  SILVER TRIED TO PIERCE 18 DOLLARS AND WAS REBUFFED BUT NOT TODAY AS IT BLEW THROUGH THIS RESISTANCE IN FLYING COLOURS. 

RESULT: A FAIR RISE IN OI COMEX  WITH THE 1 CENT PRICE FALL. 

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.920 BILLION TO BE EXACT or 132% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 440 NOTICE(S) FOR 2,200,000  OZ OF SILVER

In gold, the open interest FELL BY A TINY 499 CONTRACTS DESPITE THE FAIR SIZED FALL  in price of gold ($4.90 GAIN YESTERDAY). The new OI for the gold complex rests at 566,318.

AGAIN,THE NUMBER OF  NEWBIE SPECS  ENTERING THE GOLD ARENA INCREASES WITH THE COMMERCIALS AGAIN SUPPLYING THE NECESSARY PAPER. THE MINI FLASH CRASH NO DOUBT CAUSED SOME SPECS TO EXIT BUT THE NET CHANGE WAS SMALL. THE BANKERS DID NOT GET THEIR WISH OF A MUCH HIGHER OPEN INTEREST DROP IN GOLD.

Result: A SMALL SIZED LOSS IN OI WITH THE FALL IN PRICE IN GOLD ($4.90). THE COMMERCIALS SUPPLIED THE NECESSARY SHORT PAPER. MORE NEWBIE LONGS ENTERED THE COMEX CASINO WILLING TO TAKE ON THE BANKERS BUT WERE RELIEVED OF THEIR LONGS (THOSE THAT HAD STOP LOSSES) WITH THE MINI FLASH CRASH ORCHESTRATED BY THE BANKERS. GOLD SPECS POURED ON THE JUICE THIS MORNING ONCE THEY SAW SILVER BREAK LOOSE FROM THE 18.00 BARRIER)

we had: 2 notice(s) filed upon for 200 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:

Tonight , we had no  changes in gold inventory:

Inventory rests tonight: 837.12 tonnes

 

SLV

Today: VERY STRANGE!! WE HAD A HUGE CHANGE IN SILVER INVENTORY TONIGHT: A WITHDRAWAL OF 945,000 OZ

WITH SILVER UP 18 CENTS TODAY AND OVER 50 CENTS THESE PAST FEW DAYS, THIS MAKES ABSOLUTELY NO SENSE!

WITHOUT A DOUBT, CRIMINAL ACTIVITY BY THE BANKERS BORROWING PAPER SILVER IN AN ATTEMPT TO CONTAIN SILVER.

INVENTORY RESTS AT 327.088 MILLION OZ

end

.

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

1. Today, we had the open interest in silver ROSE BY A STEADY 866 contracts from 183,276  UP TO 184,142(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH YESTERDAY’S 1 CENT LOSS IN TRADING. SILVER RESPONDED LIKE GOLD TO THE ECONOMIC CLIMATE (E.G NORTH KOREA’S ATOMIC BLAST/HURRICANE HARVEY/HURRICANE IRMA.) AS NEWBIE LONGS PILED INTO THE SILVER ARENA. THE BANKERS HAD NO CHOICE BUT TO SUPPLY THE NECESSARY SHORT PAPER. THE MINI CRASH DID NOT CAUSE ANY OF OUR SILVER LONGS TO VACATE THE ARENA. SILVER BROKE THROUGH THE HUGE 18.00 RESISTANCE AND WILL NOW SET THEIR EYES ON THE BIGGY: $18.50 SILVER.

RESULT:  A  HIGHER OI AT THE COMEX WITH THE FALL IN PRICE OF 1 CENT.  BANKERS SUPPLIED THE NECESSARY  SHORT PAPER AND WERE NOT HAPPY CAMPERS WITH THE FAILED RAID. SILVER BROKE THROUGH THE TINY 18.00 DOLLAR RESISTANCE. 

(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 WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 19.89 POINTS OR 0.59%   / /Hang Sang CLOSED DOWN 90.84 POINTS OR 0.33%/ The Nikkei closed UP 38.55 POINTS OR 0.20%/Australia’s all ordinaires CLOSED UP 0.02%/Chinese yuan (ONSHORE) closed UP at 6.4920/Oil UP to 49.05 dollars per barrel for WTI and 54.43 for Brent. Stocks in Europe OPENED GREEN. Offshore yuan trades  6.4972 yuan to the dollar vs 6.4920 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 VERY HAPPY TODAY

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA/

ON TESTS IT CERTAINLY LOOKS LIKE IT WILL DO THE JOB

( ZERO HEDGE)

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

i)First the statement: rates unchanged and QE until Dec 20177 or beyond..

we await his press conference for details..

( zero hedge)

ii)Conflicting signals sends the Euro higher, Bund yields tumble as Draghi kicks the can down the road for another month.  In October he will have no choice but to taper which will send the Euro skyrocketing something that he does not wish for.

( zerohedge)
iii)SPAIN/CATALONIA

Showdown in Barcelona.  The wealthy province of Catalonia which houses Barcelona wants separation from Spain. For years this area sends in more tax dollars than it receives and this is why the Catalan parliament has approved a referendum vote to be held on October 1.  Madrid of course, opposes this move but what can they do short of invasion?

( Mish Shedlock/Mishtalk)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

Caribbean island of Barbuda is totally demolished

( zerohedge)

7. OIL ISSUES

Harvey causes demand for both WTI and gasoline to drop.  Crude just saw a huge inventory buildup. Irma will no doubt cause a huge drop in demand as well

( zerohedge)

8. EMERGING MARKET

VENEZUELA

9.   PHYSICAL MARKETS

i)Gold trading last night but a little boost from South Korea:

( zerohedge)_=

ii)Mike Kosares explains why you want to own gold

( Kosares/GATA)

iii)We brought this to your attention yesterday;  the CFTC sues California gold dealer Monex in a fraud.

( Reuters/GATA)
iv  Bill Holter latest article:
“Mutiny for the Bounty”
This is a must read.  You will recall that during the weekend, China announced that it was now proceeding with a PETRO -Yuan scheme which would by pass the USA dollar.  In essence this is the death knell for the dollar
please take time to read the following Bill Holter paper
( Bill Holter/Holter Sinclair collaboration)

10. USA Stories

i)Futures tumble on hearing that Gary Cohn is unlikely to be the next chair at the Fed

( zerohedge)

( zerohedge)

( zero hedge)

iv)We knew this would be inevitable; jobless claims spiked up 62,000 thanks to that huge surge in Texas as the impact of Hurricane Harvey ripples through Texas

( zerohedge)

v)Not good for the New York commercial real estate market as sales plunge over 50% due to the fact that we have an absence of buyers. Owners are refinancing instead of selling..this looks very troublesome!

( zerohedge)

vi)Very scary!! Florida has two nuclear power plants directly in the path of Hurricane Irma and they have not yet made plans to shut them down

( Michael Snyder/Economic Collapse Blog)

vii)this would be good for gold: Trump wants to end the debt ceiling

 

( zero hedge)

viii)A good harbinger of things to come; Disney tumbles after the CEO cuts outlook;

(courtesy zerohedge)

ix)Irma

FEMA chief warns that Irma is a devastating “nuclear” hurricane

(courtesy zerohedge)

x)Are the walls closing in on Debbie Wasserman Schultz?

 

( zerohedge)

xi) he Debt Ceiling bill is passed by the Senate.  They will have until March to pass the next ceiling

 

(courtesy zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY TINY 499 CONTRACTS UP to an OI level of 567,504 DESPITE THE FAIR SIZED LOSS IN THE PRICE OF GOLD  ($4.90 GAIN IN YESTERDAY’S trading). This time the bankers again supplied the necessary gold short paper when newbie longs took on our criminal bankers realizing that the geopolitical climate  was to their liking as they continued to pile into the gold comex with the commercials, undaunted, supplying the necessary short paper.  The bankers yesterday called for a mini flash crash which drove gold down in price but their action did not cause any of the gold leaves to fall from the gold tree. GOLD RESPONDED BEAUTIFULLY TODAY DRIVING OUR PRECIOUS METAL NORTHBOUND ESPECIALLY WHEN THEY SAW SILVER PIERCE $18.00

 

Result: a  TINY SIZED open interest decrease with an good sized FALL in the price of gold.  THE MINI FLASH CRASH ON GOLD FAILED. 

The new non active September contract month saw it’s OI FALL 5 contracts DOWN to 830.   We had 0 notices filed on yesterday so we LOST 5 contracts or an additional 500 oz will NOT stand AND  5 EFP’s WERE ISSUED which entitles them to a fiat bonus plus a deliverable contract on a different exchange and most likely that would be London.  These are private deals so we do not get to see the makeup of these deals only the number of EFP’s issued.

The next active contract month is Oct and here we saw a LOSS of 276 contracts DOWN to 44,889.

The November contract saw A GAIN OF 38 contracts UP to 156.

The very big active December contract month saw it’s OI LOSE 1293 contracts DOWN to 444,795.

We had 2 notice(s) filed upon today for  200 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
And now for the wild silver comex results.  Total silver OI ROSE BY 866 CONTRACTS FROM 183,276 UP TO 184,142 DESPITE YESTERDAY’S  1 CENT LOSS IN PRICE. NEWBIE LONG SPECS CERTAINLY  BECAME MORE EMBOLDENED TO TAKE TO TAKE ON SOME OF OUR BANKERS WITH SILVER READY TO PIERCE 18 DOLLARS. HOWEVER THE BANKERS WANTED NONE OF THAT SO A MINI FLASH CRASH WAS ORCHESTRATED WITH THE GOAL TO CAUSE AS MANY GOLD AND SILVER LEAVES TO FALL.  IN SILVER HOWEVER THE DEMAND FOR PHYSICAL SILVER REMAINS EXTREMELY HIGH AS AGAIN THE AMOUNT STANDING FOR DELIVERY INCREASED AGAIN.  WE HAVE BEEN WITNESSING THIS PHENOMENA FOR THE PAST 5 MONTHS.  (SEE BELOW). WE LOST NO SEPT LONGS TO EFP’S TODAY. WITH YESTERDAY’S FAILED FLASH CRASH, SILVER EASILY PIERCED THE 18 DOLLAR BARRIER TODAY.
RESULT:  A GOOD SIZED INCREASE IN OI AT THE COMEX WITH A 1 CENT LOSS IN PRICE. DEMAND FOR PHYSICAL SILVER RISES AGAIN AS THE AMOUNT STANDING INCREASES FOR THE SEPT CONTRACT MONTH.  THE BANKERS THIS TIME DID SUPPLY THE NECESSARY SHORT PAPER BUT COULD NOT CAUSE ANY SILVER LEAVES (OI) TO FALL!!. SILVER PIERCES THE 18 DOLLAR RESISTANCE.

We are now in the active contract month of September (and the last active month until December). Today we witness Sept. OI fall by 44 contacts down to 1566. We had 160 notices filed yesterday, so we again gained 116 contracts or an additional 580,000 oz will stand for delivery. This phenomenon has been happening in silver for the past 5 months whereby the amount standing increases on each and every delivery day.  This queue jumping highlights the huge demand for silver that we have been witnessing around the globe. The next non active contract month for silver after September is October and here the OI LOST 2 contacts DOWN TO 949. November saw a loss of 4  contracts and thus reducing to 36. After November, the NEXT big active contract month is December and here the OI lost by 1401 contracts down to 160,556 contracts.

We had 440 notice(s) filed for  2,200,000 oz for the SEPT. 2017 contract

VOLUMES: for the gold comex

ESTIMATED VOLUME TODAY: 328,513 CONTRACTS WHICH IS EXCELLENT

YESTERDAY’S confirmed volume was 328,513 which is excellent

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for SEPTEMBER

 Sept. 7/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
1736.100 oz
Scotia
54 kilobars
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
 nil
No of oz served (contracts) today
 
2 notice(s)
200 OZ
No of oz to be served (notices)
827 contracts
(82700 oz)
Total monthly oz gold served (contracts) so far this month
51 notices
5100 oz
0.1586 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month   7,105.2  oz
Today we HAD  1 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 1 customer withdrawal(s)
 i) out of Scotia: 1736.10 oz
(54 kilobars)
total customer withdrawals; 1736.10 oz
 we had 0 adjustment(s)
For SEPT:

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 2  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.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the initial total number of gold ounces standing for the SEPTEMBER. contract month, we take the total number of notices filed so far for the month (51) x 100 oz or 5100 oz, to which we add the difference between the open interest for the front month of SEPT. (830 contracts) minus the number of notices served upon today (2) x 100 oz per contract equals 87,800  oz, the number of ounces standing in this active month of SEPT.
 
Thus the INITIAL standings for gold for the SEPTEMBER contract month:
No of notices served so far (51) x 100 oz  or ounces + {(830)OI for the front month  minus the number of  notices served upon today (2) x 100 oz which equals 87,800 oz standing in this  active delivery month of SEPTEMBER  (2.7309 tonnes)
We LOST 5 contracts or 500 oz will stand and 5 EFP’s were issued for September which gives the long holder a fiat bonus plus a deliverable product on another exchange and that most likely will be London.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Total dealer inventory 741,512.035 or 23.06 tonnes  (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,696,886.850 or 270.51 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 270.51 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 13 MONTHS  83 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE AUGUST DELIVERY MONTH
September initial standings
 Sept 7  2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
312,932.40 oz
CNT
Scotia
Deposits to the Dealer Inventory
nil  oz
Deposits to the Customer Inventory 
 777,031.940 oz
 HSBC
No of oz served today (contracts)
440 CONTRACT(S)
(2,200,000 OZ)
No of oz to be served (notices)
1126 contracts
(5,630,000 oz)
Total monthly oz silver served (contracts) 3518 contracts (17,590,000 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 3,973,089.3 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 CNT:  1,982.200 oz
ii) Out of Scotia:  310,950.210 oz
TOTAL CUSTOMER WITHDRAWALS: 312,932.400 oz
We had 1 Customer deposit(s):
i) Into HSBC:  777.031.940 oz
***deposits into JPMorgan have stopped  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: 777,031.940 oz
 
 we had 1 adjustment(s)
i) out of CNT:  298,733.100 oz was adjusted out of the customer and this landed into the dealer account of CNT
The total number of notices filed today for the SEPTEMBER. contract month is represented by 440 contract(s) for 2,200,000 oz. To calculate the number of silver ounces that will stand for delivery in SEPTEMBER., we take the total number of notices filed for the month so far at 3518 x 5,000 oz  = 17,590,000 oz to which we add the difference between the open interest for the front month of SEPT (1566) and the number of notices served upon today (440) x 5000 oz equals the number of ounces standing.
 

 

.
 
Thus the INITIAL standings for silver for the SEPTEMBER contract month:  3518 (notices served so far)x 5000 oz  + OI for front month of SEPTEMBER(1566 ) -number of notices served upon today (440)x 5000 oz  equals  23,220,000 oz  of silver standing for the SEPTEMBER contract month. This is excellent for this active delivery month. Silver is being constantly demanded at the silver comex and we witness again the amount of silver demanded daily increase right from the get go.
 
WE HAD AN INCREASE OF 116 CONTRACTS OR AN ADDITIONAL 580,000 OZ OF SILVER WILL STAND FOR DELIVERY IN THIS ACTIVE CONTRACT MONTH OF SEPTEMBER. THIS HAS BEEN THE 5th CONSECUTIVE MONTH THAT WE HAVE WITNESSED EITHER AN INCREASE (95% OF THE TIME) OR STANDING PAT (THE OTHER 5%).  WE HAVE NOT HAVE A DECREASE IN STANDING I.E. AS THEY DELIVERY MONTH PROCEEDS NOBODY WISHES AN EFP PRODUCT IN EXCHANGE FOR A DEPARTING LONG.
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: 78,980 CONTRACTS WHICH IS  HUGE
YESTERDAY’s  confirmed volume was 132,778 contracts which is GIGANTIC
YESTERDAY’S CONFIRMED VOLUME OF 132,778 CONTRACTS WHICH EQUATES TO 663 MILLION OZ OF SILVER OR 95% 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:  42.210 million (close to record low inventory  
Total number of dealer and customer silver:   215.295 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 5.9 percent to NAV usa funds and Negative 6.0% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.6%
Percentage of fund in silver:37.4%
cash .+0.0%( Sept 7/2017) 
2. Sprott silver fund (PSLV): STOCK   NAV FALLS TO -0.50% (Sept 7/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.50% to NAV  (Sept 7/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -0.50%/Sprott physical gold trust is back into NEGATIVE/ territory at -0.50%/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

Sept 7./no changes in gold inventory at the GLD/Inventory rests at 837.21 tonnes

SEPT 6/WE HAD ANOTHER DEPOSIT OF 5.91 TONNES INTO THE GLD/IN THE LAST TWO DAYS: 20.69 TONNES/INVENTORY RESTS AT 837.21 TONES

Sept 5/we had a huge deposit of 14.78 tonnes into the GLD/Inventory rests at 831.21 tonnes

Sept 1/ no change in gold inventory at the GLD/Inventory rests at 816.43 tonnes

AUGUST 31/no change in gold inventory at the GLD. Inventory rests at 816.43 tonnes

August 30/another deposit of 2.07 tonnes into the GLD inventory/inventory rests at 816.43 tonnes

August 29/a huge deposit of 9.16 tonnes of probable paper gold/inventory rests at 814.36 tonnes

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Sept 7 /2017/ Inventory rests tonight at 837.21 tonnes
*IN LAST 227 TRADING DAYS: 103.89 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 164 TRADING DAYS: A NET  53.54 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY.
*FROM FEB 1/2017: A NET  22.15 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Sept 7/STRANGE!! WITH DEMAND FOR SILVER HUGE WE HAD ANOTHER 945,000 OZ WITHDRAWN. NO DOUBT THAT THIS IS CRIMINAL ACTIVITY AS SILVER IS WITHDRAWN AND USED TO CONTAIN THE RISE IN PRICE/INVENTORY RESTS AT 327.088 MILLION OZ/

SEPT 6/STRANGE WITH A HUGE DEMAND FOR SILVER THROUGHOUT THE WORLD THESE DOORKNOBS WITHDRAW A HUGE 3.148 MILLION OZ OF SILVER FROM THE SLV/INVENTORY RESTS AT 328.033 MILLION OZ

Sept 5/2017: no change in silver inventory at the SLV/Inventory rests at 331.178 million oz/

Sept 1/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 331.178 MILLION OZ

AUGUST 31/STRANGE!! a huge withdrawal of 2.019 million oz with silver up today./INVENTORY RESTS AT 331.178 MILLION OZ

August 30/no change in silver inventory at the SLV/inventory rests at 333.178 million oz

August 29/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 333.178 MILLION OZ

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

Sept 7.2017:

Inventory 327.088  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.42%
  • 12 Month MM GOFO
    + 1.52%
  • 30 day trend

end

Major gold/silver trading/commentaries for THURSDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

 

Things Have Been Going Up For Too Long’ – Goldman CEO

– “Things have been going up for too long…” – Goldman Sachs’ CEO
– Lloyd Blankfein, Goldman CEO “unnerved by market” (see video)
– Bitcoin bubble is no outlier says Bank of America Merrill Lynch

– Bubbles are everywhere including London property
– $14 trillion of monetary stimulus has pushed investors to take more risks
– We are now in a new era of bigger booms and bigger busts – BAML
– “Seeing signs of bubbles in more and more parts of the capital market” – Deutsche Banks’ John Cryan
– Global debt bubble and China very vulnerable too – warns Steve Keen
– Bubbles, bubbles everywhere … lots of potential pins … got gold?

Editor: Mark O’Byrne

Video – Goldman CEO Unnerved By Market. Image: Getty Images via CNBC

The B word is something which is almost whispered in financial circles. To acknowledge there might be a bubble somewhere is like admitting the proverbial elephant is in the room.

But, like many taboo words, it seems the mainstream are coming around to the idea that it is ok to mention the word ‘bubble’ and express their concerns about the possibility of at least one existing.

This week Goldman Sachs’ Lloyd Blankfein, Deutsche Banks’ CEO John Cryan and strategists at Bank of America Merrill Lynch have separately expressed concerns that there are signs of bubbles in the markets – from the obvious bitcoin bubble to the less obvious bubble in London and other property markets and bubbles in many stock and bond markets.

The most obvious one is bitcoin. Bitcoin is up 380% this year whilst the combined market cap of cryptocurrencies is up by 800%. However these are by no means anomalies according to analysts at BAML.

Wealth effect

Cryan and Blankfein agree, thanks to central bank money printing and low interest rates, they too are expressing their concerns over the state of markets.

“When yields on corporate bonds are lower than dividends on stocks? That unnerves me … “
Lloyd Blankfein

There’s no bubble here

Professor Robert Shiller has been calling a bubble in bitcoin for a couple of years, for him it is the latest sign of ‘Irrational Exuberance’. 

“The best example right now [of irrational exuberance] is Bitcoin. And I think that has to do with the motivating quality of the Bitcoin story. And I’ve seen it in my students at Yale. You start talking about Bitcoin and they’re excited! And I think, what’s so exciting? You have to think like humanities people. What is this Bitcoin story?”

The bitcoin community was not best pleased when the man who is credited with being able to spot speculative manias decided to single out the cryptocurrency as the latest one.

In response CoinTelegraph wrote an article entitled ‘Bitcoin So High Above the Bubbles They Can’t Be Seen’. The author claims that bitcoin is failing to follow the pattern of other bubbles.

In fact, a closer inspection of the growth, and the eventual burst of the associated bubbles shows that Bitcoin is so far off the charts that it looks like an absolute outlier.

The bitcoin crowd are doing exactly what so many tend to do when a market is massively outperforming – they build a narrative from it and begin to fuel the belief that the price can only go up.

A BBC Capital article on the bitcoin phenomenon quotes a small bitcoin investor as saying ‘“I don’t know how far it’s going to grow,” he explains, “but if something is growing at hundreds of per cent, that’s a pretty valuable return.” Note ‘I don’t know how far it’s going to grow…’ The investor is convinced this can only go one way.

For now we can perhaps assure ourselves that unlike in some other markets few investors will have gone all in or driven themselves into debt (as per the housing market).

A happy, bubbly narrative

Bubbles are created when investor enthusiasm and optimism are at excessive levels.

In a 2010 interview with the Financial Crisis Inquiry Commission (FCIC) Warren Buffett explained that this happens because investors originally invest based on a sound premise, which is then the only focus for the investment strategy and they end up blinkered.

Simply put investors begin to invest based on a sound premise, for example house prices are going to go up because money is losing its value and there is a more demand than supply.

Investors are convinced that as house prices are climbing they must buy now. This goes on and on based on the original premise. Investors ignore other developments such as house price climbs are now outstripping inflation. We are seeing a similar thing in bitcoin.

The housing example is no more pertinent right now than in Australia which is basically a $1.7 trillion house of cards. According to LF Economics, Australian housing speculators are able to use unrealized gains in properties as a ‘cash substitute’ for down payments on other investment properties. ‘Profitability is therefore predicated on ever-rising house prices…“[Many] international wholesale lenders … may find out the hard way that they have invested into nothing more than a $1.7 trillion ‘piss in a fancy bottle scam’,”

Homebuyers forget the original premise and and become blinkered by the price action – which is that house prices are going up and up. Because it has been relatively easy and cheap to borrow money to finance purchases on these properties homebuyers suddenly see themselves as investors and decide to buy more than one house, because ‘it’s only going to go up’.

This is where we are with so many asset classes right now, including bitcoin, property, vintage cars and equities.

Debt and bubble junkies

But what gets the narrative going in the first place? In the last ten years it has been the generosity of central banks in their infinite money printing and low interest rate policies.

“Post the financial crisis, the largesse of central banks appears to be inducing quicker and steeper price gains in assets compared to the case historically,” analysts at BAML wrote “Speculative behavior in assets is cropping up more frequently and in more places than just credit markets.”

Earlier in the summer Citi’s Hans Lorenzen said the effect of the central banks’ ‘largesse’ was that “the wealth effect is stretching farther and farther afield.”

BAML’s analysts are also seeing this spread of the bubble effect across a number of markets, not just in credit markets where there is an unprecedented buying spree. ‘Asset bubbles seem to be becoming more “bubbly” as time goes by…’

Unlike our bitcoin friends, BAML sees a key issue with the current trajectory of the crypto’s price:

For instance, the increase in Japanese equities was pronounced between mid-1982 and the end of 1989, with share prices rising around 440% over the period. But Bitcoin, for instance, has risen roughly 2000% since just mid-2015. And other, recent, in-vogue indices seem to be surging higher as well.

Not to mention the Nasdaq index has soared over 18 % this year while the S&P 500 and Dow Jones indexes are each around 10% higher – building on the already large gains seen in recent years. Throughout the year U.S. bond yields at the 10-year and 30-year maturities have also fallen.

As Deutsche Bank’s John Cryan pointed out much of this inflation in the market place is thanks to the prolonger period of low-interest rates and cheap monetary policy. He called for the ECB to put an end to their current monetary policy and it is now causing “ever greater upheaval.”

“We are now seeing signs of bubbles in more and more parts of the capital market where we wouldn’t have expected them…I welcome the recent announcement by the Federal Reserve and now also from the ECB that they intend to gradually bring their loose monetary policy to an end.”

Is no one else worried about this?

Cryan pointed out that today volatility is markedly cheap given what is going on in both financial markets and the wider geopolitical space.

“The interesting thing about the markets today is that obviously they pay some regard to these hotspots but they don’t seem to be paying too much regard because we see very high asset prices in almost all asset categories…”

In Professor Steve Keen’s book Can We Avoid Another Financial Crisis?, he argues that many countries have become debt junkies.

“They face the junkie’s dilemma, a choice between going ‘cold turkey’ now, or continuing to shoot up on credit and experience a bigger bust later.”

Is it all about to go ‘pop’?

BAML strategist Barnaby Martin thinks not. Currently the market has a benign view on rates and this will most likely only be altered by an ‘inflationary shock’ which will see the major flows into the credit cycle fall back. Or the ECB swiftly stops with its current QE programme.

The latter may come sooner than we think, today the ECB is expected to give some indication on its plans regarding bond purchases, but in reality it probably won’t make much difference.

As Martin writes, this party isn’t coming to an end just yet:

“the end of the credit party will likely require a big inflationary “shock” in Europe, and one strong enough to reset market expectations over the pace of rate hikes. Safe to say that this seems a long way off to us.”

As a result, helped by falling political uncertainty (note European policy uncertainty is now lower than US policy uncertainty – the first time since mid-2012) and the renewed rise in negative yielding assets (note record number of European countries now with negative yielding debt), we see credit spreads heading tighter into year-end.

China swoops in from the left-field

How might all this end? Who knows. The last time interest-rates were this low for as long was during the 1930s and that ended with the Second World War.

It might be through trying to avoid World War III that the financial collapse is finally triggered. Currently Trump is relying heavily on China to cool things down with Kim Jong-Un of maniacal despot fame.

In Keen’s latest book China is one of the countries he believes is a debt junkie. The country’s credit-driven expansion has accounted for more than half of global growth since 2008. Why? Because it dealt with the collapse of the Western credit bubble in 2008 by fuelling a bubble of its own.

Today Chinese banks have $35tn of assets on their balance sheets – a fourfold increase since 2008. In the last decade private debt as a proportion of the country’s annual economic output (GDP) has increased from 120% to 210%.

Its financial system could almost be a mirror to those seen in the US and UK in the run up to the financial crisis. It has a large shadow banking system and special investment vehicles that take assets off balance sheets.

How does this relate to Trump, North Korea and the next financial crisis? Trump needs China on side when dealing with Kim Jong-Un. However, last week Beijing said that in the event of war between the two nuclear powers it would sit on the sidelines.

Trump now has to decide how to handle China as the country clearly has its limits in how much it will help. The most obvious option would be to impose economic sanctions for example, slapping tariffs on steel imports. It could also put China in a negative light in terms of its dealings in markets such as going back to Trump’s old rhetoric branding the country as a currency manipulator or accusing it of facilitating illegal piracy businesses.

Should sanctions be imposed then a trade war would inevitably erupt. This eruption would firmly put a pin in China’s bubble and ripples would be sent out across the world.

Bubbles, bubbles everywhere … lots of potential pins … got gold?

News and Commentary

Gold holds steady amid softer dollar (Reuters.com)

Stocks Rise, Treasuries Fall on Debt-Ceiling Deal (Bloomberg.com)

Trump cuts deal with Democrats in Congress to avert immediate budget and debt crisis (LATimes.com)

Fed’s Beige Book finds worry about health of U.S. auto industry (MarketWatch.com)

Fischer to Step Down in Mid-October as Fed Vacancies Mount (Bloomberg.com)

Source: Bloomberg

“Sum of All Fears” Restores Investors’ Faith in Gold (Bloomberg.com)

How Investors Are Preparing for the Worst on North Korea (Bloomberg.com)

We’re Going into Another Long-Term Gold, Silver Bull Market – Neumeyer (SmallCapPower.com)

Gold Break Above $1,375/oz Should See Rise To “Initial Target of $1,705/oz” – BMO (GoldSeek.com)

‘Things Have Been Going Up for Too Long’ – Goldman CEO (CNBC.com)

Gold Prices (LBMA AM)

07 Sep: USD 1,340.45, GBP 1,026.52 & EUR 1,119.54 per ounce
06 Sep: USD 1,340.15, GBP 1,028.03 & EUR 1,122.11 per ounce
05 Sep: USD 1,331.15, GBP 1,029.51 & EUR 1,120.43 per ounce
04 Sep: USD 1,334.60, GBP 1,030.98 & EUR 1,120.53 per ounce
01 Sep: USD 1,318.40, GBP 1,020.18 & EUR 1,107.98 per ounce
31 Aug: USD 1,305.80, GBP 1,013.17 & EUR 1,098.31 per ounce
30 Aug: USD 1,310.60, GBP 1,014.93 & EUR 1,096.71 per ounce

Silver Prices (LBMA)

07 Sep: USD 17.79, GBP 13.59 & EUR 14.85 per ounce
06 Sep: USD 17.77, GBP 13.62 & EUR 14.90 per ounce
05 Sep: USD 17.88, GBP 13.80 & EUR 15.03 per ounce
04 Sep: USD 17.80, GBP 13.75 & EUR 14.95 per ounce
01 Sep: USD 17.50, GBP 13.53 & EUR 14.69 per ounce
31 Aug: USD 17.34, GBP 13.47 & EUR 14.62 per ounce
30 Aug: USD 17.44, GBP 13.49 & EUR 14.60 per ounce


Recent Market Updates

– Physical Gold In Vault Is “True Hedge of Last Resort” – Goldman Sachs
– Bitcoin Falls 20% as Mobius and Chinese Regulators Warn
– Gold Surges To $1338 as U.S. Warns of ‘Massive’ Military Response
– Precious Metals Outperform Markets In August – Gold +4%, Silver +5%
– 4 Reasons Why “Gold Has Entered A New Bull Market” – Schroders
– Gold Reset To $10,000/oz Coming “By January 1, 2018” – Rickards
– Gold Surges 2.6% After Jackson Hole and N. Korean Missile
– Diversify Into Gold On U.S. “Political Instability” Advise Blackrock
– Trump Presidency Is Over – Bannon Is Right
– The Truth About Bundesbank Repatriation of Gold From U.S.
– Cyberwar Risk – Was U.S. Navy Victim Of Hacking?
– Global Financial Crisis 10 Years On: Gold Rises 100% from $650 to $1,300
– Mnuchin: I Assume Fort Knox Gold Is Still There

END

Gold trading last night but a little boost from South Korea:

(courtesy zerohedge)_

Gold, Yen Spooked higher After South Korea Scaremongers Looming North Korean Launch

After President Trump’s modest de-escalation in the North Korea situation during the US day session, South Korea has decided to reignite the smoldering fires tonight.

Scaremongering of “expectations of a Sept 9th ICBM missile launch,” which was widely known since it is a public holiday in North Korea, South Korea’s Prime Minister Lee Nak-yon warned ominously that there’s “not much time left until North Korea is fully nuclear-armed.”

His words sent JPY and Gold higher…

Gold Tops $1350, Bond Yields Plunge, USDJPY Snaps

Well that escalated quickly…

Catalysts for this shift include Gary Cohn ‘out’ as Fed head contender (why would he stay?), more dismal wage data from BLS, spike in jobless claims, Trump Jr. possible public hearing, potential carnage from Irma…

Gold and Yen are bid…

 

Gold is now testing the spike highs of election day last year…

 

Bond prices are ripping higher as stocks sink…

 

10Y TSY yields have a 2.04% handle as the dollar index tumbles to its weakest since Jan 2015…

 

10Y Yield pushing close to election lows…

(courtesy Kosares/GATA)

Mike Kosares: When the U.S. owned most of the gold on Earth

 Section: 

2:50p ET Wednesday, September 6, 2017

Dear Friend of GATA and Gold:

Gold is more than a hedge against the stock and bond markets, USAGold’s Mike Kosares writes today. It is also a hedge against the times, which have been changing as the United States has lost a majority of the gold reserves it held at the end of World War II. Kosares’ commentary is headlined “When the United States Owned Most of the Gold on Earth” and it’s posted at USAGold here:

http://www.usagold.com/cpmforum/2017/09/06/when-the-united-states-owned-…

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

END
We brought this to your attention yesterday;  the CFTC sues California gold dealer Monex in a fraud.
(courtesy Reuters/GATA)

CFTC sues California gold dealer Monex in fraud scheme

 Section: 

From Reuters
Wednesday, September 6, 2017

WASHINGTON — The U.S. Commodity Futures Trading Commission said today it filed a civil lawsuit against California-based gold dealer Monex Deposit Co. in what it called the biggest-ever retail precious metals fraud enforcement action brought by the regulator.

The CFTC alleges that Monex, deploying high-pressure sales tactics, deceived thousands of retail customers who lost a total of $290 million in connection with illegal, off-exchange leveraged precious metals transactions. …

… For the remainder of the report:

https://in.reuters.com/article/cftc-enforcement/cftc-sues-california-gol…


 

END
This is a must read.  You will recall that during the weekend, China announced that it was now proceeding with a PETRO -Yuan scheme which would by pass the USA dollar.  In essence this is the death knell for the dollar
please take time to read the following Bill Holter paper
(courtesy Bill Holter/Holter Sinclair collaboration)

Latest article; Mutiny “for” the bounty.

 

China recently announced they will trade oil for yuan “backed” by gold. The story has gotten some press (none of it mainstream mind you), and many have questions as to what it really means. While quite complicated as a whole, when you break this down into pieces I believe it is a quite simple and logical end to Bretton Woods.

For a background, China has had an exchange open for about a year where gold can be purchased with yuan, though the volumes so far have been miniscule to this point. China has also been all over the world inking trade deals (in yuan) and investing in all sorts of resources from oil to gold to grains, they have made no secret about this. With the most recent example here. They have trade arrangements and treaties with Russia, Iran and many other non Western nations. They have also “courted” many Western nations privately (remember their meeting with the King of Saudi Arabia?) and actually lured many with their “Silk Road” plans via the AIIB which was huge news last year (but nearly forgotten by Americans at this point?). We also know China has been a huge importer of gold for the last 4-5 years and done so publicly via Shanghai receipts and deliveries.

So what exactly does “oil for yuan” mean? In my opinion, China is basically leading a “mutiny FOR the bounty” (we’ll explain this shortly). The only things holding the dollar up from outright death for many years has been the oil trade (and other trade commerce) between nations and settled in dollars. Anyone wanting to buy oil had to first buy dollars in order to pay for the trade. Anyone getting out of step and suggesting they would accept currency other than dollars was dealt with swiftly and harshly (think Saddam and Mohamar). In other words, the U.S. military “enforced” the deal Henry Kissinger made with the Middle East (lead by Saudi Arabia) where ALL oil was settled in dollars. International trade settlement alone supported the dollar after the Nixon administration defaulted on its promise to exchange one ounce of gold for $35.

China is now suggesting THEY will be the ones to trade oil and not use the dollar for settlement. Instead, settlement will be in yuan. But why now? I believe for one of two reasons or more likely both. First, and as we have recently spoken about, it very well may be that the US. military technology has been cracked or leap frogged. It is looking like a distinct possibility and if so, China/Russia now have less fear of U.S. military “retribution”.

The other possibility pertains to gold. We have no way of knowing whether or not the “bottom of the barrel” as far as gold reserves is in sight but we can have a pretty good idea. Physical demand for gold has exceeded mine supply by some 1,500 tons for the last 20 years, “Scrap” supply can not have made up the shortfall. The only place the gold to supply for delivery can have come from are Western (think Ft. Knox) vaults. If the Chinese know their “supplier” of gold is at or near zero, this could also explain “why now”. My bet is both, military technology AND lack of gold supply are at work here.

The next question is this, does China want to become the world’s reserve currency? I do no think so as they have seen economies of the issuers of the reserve currency destroyed time after time throughout history. Rather, China wants to lead the parade away from the dollar or at least steer it. Whether via a larger slice of the SDR pie, or another as yet to be introduced currency I do not know.

What we do know: the U.S. is broke and very likely nearly out of gold. The U.S. has “led” the world with an iron fist and trampled many in its wake …pissing off nations all the while over the last 20+ years in particular. China knows this and also knows the rest of the world will follow them just as school kids will follow the one who stands up to the school bully. Besides, on the surface it certainly looks like better (more fair) trade and settlement terms for anyone who goes along.

Wrapping this up, we need to know “what” all this means? Most importantly it means the world will have an alternative to settling in dollars …which means less overall demand for dollars. This alone will weaken the dollar much further than the huge move we have already seen. A weaker dollar will mean much higher prices (inflation) for the imported goods we no longer manufacture at home. There is a bigger problem here that few are thinking of yet. How will the U.S. settle trade if the dollar becomes so weak it becomes shunned …AND we have no gold for international settlement left? This is a very serious question and one pertaining directly to the standard of living for Americans.

Answering the question as to the meaning of “mutiny for the bounty”, this is simple. You can think of “bounty” as “prosperity” if you will. Prosperity in today’s world means you produce goods and trade, trade, trade! By and large I believe the world wants peace and prosperity …which go hand in hand and are not mutually exclusive. If the world is offered a “more fair” way to settle trade, will they go for it? You bet! Especially if they are offered “cover” or protection from the U.S. military …for trading in a currency they deem more fair than dollars!

So it seems to me, China is leading a world that is ready to follow in a direction away from dollars. As for gold, it will explode in price in terms of a weakening dollar but there is potentially more. China without ANY DOUBT is THE largest holder of gold on the planet. It is for this reason China now has the ability to “price” gold wherever they want to. In other words, China can mark the price of gold to the moon which will do several things. It will make them the wealthiest nation on the planet while at the same time making it extremely expensive and difficult for anyone to catch up by amassing their own gold horde.

As to the yuan becoming gold backed, I doubt it in reality. I highly doubt they will ever “exchange” their current gold horde. It is more likely they will only exchange further gold accumulated from this point forward but that is a story for another day.

We have speculated for several years that China might try to supplant the dollar. It now makes sense and one would have to wonder why they wouldn’t lead the mutiny if they were to become the new captain?

Standing watch,

Bill Holter

Holter=Sinclair collaboration

 end


Your early THURSDAY 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 MUCH STRONGER 6.4920 (REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES SLIGHTLY WEAKER TO ONSHORE AT   6.4972/ Shanghai bourse CLOSED DOWN 19.89 POINTS OR 0.59%  / HANG SANG CLOSED DOWN 90.84 POINTS OR 0.33% 

2. Nikkei closed UP 38.55 POINTS OR 0.20%    /USA: YEN FALLS TO 108.87

3. Europe stocks OPENED GREEN     ( /USA dollar index FALLS TO  91.80 AND BREAKS RESISTANCE OF 92.00/Euro UP to 1.1981

3b Japan 10 year bond yield: FALLS  TO  -+.010%/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 108.87/ 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::  49.05 and Brent: 54.43

3f Gold UP/Yen UP 

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 UP 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  +.358%/Italian 10 yr bond yield DOWN  to 2.008%    

3j Greek 10 year bond yield FALLS TO  : 5.4820???  

3k Gold at $1339.25  silver at:17.89 (8:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 42/100 in  roubles/dollar) 56.96-

3m oil into the 49 dollar handle for WTI and 54 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 FAIR SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 108.87 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  0.9519 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1406 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 RISING to  +0.358%

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 2.089% early this morning. Thirty year rate  at 2.707% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

6. USA CASH BALANCES ON HAND: $40 BILLION

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

All Eyes On Draghi: Futures Flat, Euro Surges, Dollar Slides; Yuan Breaches 6.50

 

S&P futures are flat, still spooked by the WSJ’s report that Gary Cohn will not be the next Fed chair, while both European stocks and Asian shares gain in a overnight session on edge in which everyone is looking forward to today’s main risk event: the ECB meeting and Draghi press conference due in under two hours. The dollar continued to weaken against most G-10 peers as tensions over North Korea, concerns over Stan Fischer’s resignation and the increasingly cloudy Fed outlook outweighed positive sentiment from the US debt ceiling extension.

Summarizing the traders’ plight, as one big bank puts it this morning, “markets don’t know where to look” – between unexpected announcements from the Fed, surprise hikes, US political developments and yet more last minute ECB sources, “there’s a sense of manic markets”, guaranteeing continued choppiness and headline trading.

Sentiment yesterday was defined by President Donald Trump’s surprising deal with Democrats in Congress to raise the U.S. debt limit and provide government funding until Dec. 15, embracing his political adversaries and blindsiding fellow Republicans in a rare bipartisan accord. There was some disappointment the deal had been so short term. “The deadline on the debt ceiling has been extended just by three months so it will come back to haunt markets again later this year. Still, markets liked it as we don’t have to worry about it for now,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management. Traders also remain alert to a potential escalation of North Korea risks amid concerns Pyongyang may fire a ballistic missile. Trump said that military action against the country wasn’t his first choice as South Korea moved to bolster its missile shield. Meanwhile, Fischer’s early departure, effective next month, adds to uncertainty about Fed leadership, given that Janet Yellen’s term as chair expires early next year.

The Stoxx Europe 600 Index rose 0.3% as a fifth day of gains in auto stocks helped German shares outperform a sluggish open for European equities with banks under pressure before the much-awaited ECB meeting, while miners declined as the rally in industrial metals stalled. Europe is on edge ahead of ECB President Mario Draghi who is expected to lay the groundwork to wind back its asset purchase program, though few investors expect to see a clear framework just yet. According to a report on Wednesday, the Governing Council has been presented with documents outlining multiple scenarios for adjusting quantitative easing, according to euro-area officials familiar with the matter. Ahead of the ECB meeting, Euro 2-week vol spiked to the highest since April.

Despite uncertainty about what Draghi will say, the EUR/USD pushes through yesterday’s high, trading at 1.1978 last. The euro’s dramatic rise this year is causing discomfort in part of the euro zone: a fourth day of gains took the common currency back above $1.1950 against the dollar while a broad tick higher in European bond yields pushed 10-year German debt up 2 basis point to 0.36 percent and Spanish and Italian paper to 1.45 and 2 percent respectively.

“Most people are on the same page that the ECB will do something to reduce their accommodation (soon),” said JP Morgan Asset Management Strategist Nandini Ramakrishnan, although nobody is willing to say when.  “We don’t expect them to announce the start of tapering this meeting, but we do expect them to give us an idea they will start in January. The details are more likely to come at the October meeting,” she added.

All the economic activity signals suggest it should take its foot off the gas, but the 13 percent surge of the euro already this year is playing havoc with its sub-target inflation outlook and it will want to step lightly for fear of compounding the problem with another exchange rate jump.

Meanwhile, in Asia, the Topix index rose 0.4 percent at the close in Tokyo, while South Korea’s KOSPIwhich has been burdened by tensions over North Korea, jumped 1.2 percent too, on course to mark its biggest gain in four months amid signs that major powers were talking intensively on the situation. Australia’s S&P/ASX 200 Index was flat. Hong Kong’s Hang Seng Index fell 0.3 percent as Chinese indexes fluctuated. The MSCI Asia Pacific Index climbed 0.4 percent.  Speaking in Russia, South Korean President Moon Jae-in said he was having discussions with the leaders of Russia, Japan and the United States and that there would be no war on the peninsula.

As the dollar pounding continued overnight, Canada’s dollar held its gains, after a surprise interest rate rise on Wednesday reminded everyone that G7 monetary settings will not remain super-easy forever. It also showed the very clear implication of policy tightening right now – the Canadian dollar surged more than 2 percent at one point to its highest levels in two years.

Overnight, China’s central bank strengthens its daily reference rate for onshore yuan for a ninth day, the longest run of increases since January 2011. The PBOC raised the yuan reference rate by 0.06% to 6.5269 per dollar, extending the strengthening streak since Aug. 28 to 2%.

Meanwhile, the offshore yuan surged, sending the USDCNH below 6.50 for the first time since May 3, 2016, declining as much as 0.55% to 6.4908 per dollar Thursday, and outpacing a 0.3 percent drop in the Bloomberg Dollar Spot Index; the offshore rate climbed 0.59%. Some speculate that the PBOC may seek to slow yuan’s rally after the
currency surged past 6.5 per dollar for the first time since May 2016,
according to analysts.

Overnight the PBOC announced that its FX reserves increased for the 7th month in August, rising $10.8bn from end-Jul to $3.0915 trillion, however missing expectations of $3.095tn, 2.9% below Aug 2016.

S&P 500 Index futures dropped after the resignation of Federal Reserve Vice Chairman Stanley Fischer and a Canadian interest-rate increase surprised U.S. markets late Wednesday. Traders are also watching Hurricane Irma, which is headed for Florida. West Texas Intermediate crude fluctuated.

The news of the debt limit extension lifted yields on U.S. Treasuries, with the 10-year yield holding back to 2.1 percent US10YT=RR from its 10-month low of 2.054 percent touched on Wednesday. Germany’s 10-year yield increased one basis point to 0.36 percent. Britain’s 10-year yield rose two basis points to 1.024 percent.

In Commodities, oil prices maintained much of this week’s strong gains as the reopening of U.S. Gulf Coast refineries improved the outlook after sharp falls caused by Hurricane Harvey. WTI futures were at $49.07 per barrel, down 0.2 percent from late U.S. levels after having gained 3.0 percent in the previous three sessions. Brent traded at $54.11 a barrel, down 0.2 percent but still not far from its 3-1/2-month high of $54.31 touched on Wednesday. Traders are now shifting their focus to Hurricane Irma, ranked as one of the five most powerful Atlantic hurricanes in the last 80 years, which was passing over the northernmost Virgin Islands on Wednesday afternoon and expected to reach Florida at the weekend.

Traders are now shifting their focus to Hurricane Irma, ranked as one of the five most powerful Atlantic hurricanes in the last 80 years, which was passing over the northernmost Virgin Islands on Wednesday afternoon and expected to reach Florida at the weekend. Economic data on Thursday includes initial jobless claims. Dell, Barnes & Noble are due to release results.

Bulletin Headline Summary from RanSquawk

  • European equities trade higher ahead of today’s ECB policy announcement with slight underperformance in
    financial names
  • EUR is also seen firmer while SEK lags after the Riksbank failed to provide a hawkish tilt to their release
  • Looking ahead, highlights include ECB rate decision & press conference, US weekly jobs and DoEs

Market Snapshot

  • S&P 500 futures down 0.2% to 2,461.50
  • STOXX Europe 600 up 0.28% to 374.98
  • MSCI Asia up 0.3% to 160.58
  • MSCI Asia ex Japan up 0.4% to 530.99
  • Nikkei up 0.2% to 19,396.52
  • Topix up 0.4% to 1,598.24
  • Hang Seng Index down 0.3% to 27,522.92
  • Shanghai Composite down 0.6% to 3,365.50
  • Sensex up 0.1% to 31,707.62
  • Australia S&P/ASX 200 unchanged at 5,689.88
  • Kospi up 1.1% to 2,346.19
  • German 10Y yield rose 1.4 bps to 0.361%
  • Euro up 0.4% to $1.1961
  • Brent Futures up 0.6% to $54.52/bbl
  • Italian 10Y yield rose 2.8 bps to 1.736%
  • Spanish 10Y yield rose 0.4 bps to 1.571%
  • Gold spot up 0.3% to $1,338.10
  • U.S. Dollar Index down 0.3% to 91.99

Top Overnight News

  • Hurricane Irma is threatening to wreak havoc on Florida farmlands, menacing $1.2 billion worth of production in the top U.S. grower of fresh tomatoes, oranges, green beans, cucumbers, squash and sugarcane
  • Russian President Vladimir Putin and his South Korean counterpart Moon Jae-in said Thursday they saw the Trump administration as willing to solve the North Korean crisis through diplomacy
  • Prime Minister Theresa May’s flagship piece of Brexit legislation will be debated for the first time Thursday, giving opponents an opportunity to lay out their objections in Parliament
  • Trump is unlikely to nominate Gary Cohn as Fed chairman: WSJ
  • German industrial production stagnated in July as momentum slowed after a stellar performance in the first half of the year
  • Sweden’s Riksbank left its repo rate at -0.5% and kept the rate path intact saying that monetary policy needs to remain expansionary for inflation to continue to be close to 2%
  • U.K. house prices rise 1.1% in August, annual rate rises first time in 2017
  • N.Z. Labour Party extends lead over ruling National Party in Colmar poll
  • Trump’s Surprise Deal With Democrats Sets Up Christmas Showdown
  • U.S. Is Said to Seek a Ban at UN on Crude Oil to North Korea
  • Draghi Kicks Off QE Exit Debate He Has Long Sought to Avoid
  • Amazon Opens Largest Indian Fulfillment Center in Hyderabad
  • IBM to Invest $240 Million to Develop AI Research Lab With MIT
  • Citi Starts First Facebook Messenger Banking Chatbot Service
  • Apple, LG Said to Discuss OLED Deal For Supplies Starting 2019
  • Facebook Found Election Ad Spending Likely Linked to Russia
  • Apple-Aligned 3D-Sensing Stocks Well Placed, Deutsche Bank Says
  • P&G Told It Must Modernize, Digitize as Peltz Escalates Fight
  • SpaceX to Launch Secret Spy Craft Mission, If Weather Cooperates
  • Chevron Phillips Chemical Assessing Flood Damage at Cedar Bayou
  • ABB to Expand Industrial Robot Factory in Michigan, Reuters Says
  • Hurricane Irma Menaces Florida After Wrecking Caribbean Islands

Asia stock markets were mixed as the region somewhat failed to maintain the positive momentum from Wall St. where stocks gained after US President Trump agreed with congress leaders to pass the Harvey aid and raise the debt ceiling. This inspired early upside in the ASX 200 (flat) and Nikkei 225 (+0.2%), in which energy names coat-tailed on oil gains and telecoms outperformed as investors bought the Telstra dip. In addition, Rio Tinto was another notable gainer as shares in the mining giant printed its highest in over 6-months after the Co. boosted its ore reserve estimates by about 50% at its Kestrel coal mine, although optimism in the ASX 200 later waned and so did the gains. Hang Seng (-0.3%) and Shanghai Comp. (-0.6%) were indecisive after the PBoC refrained from its regular open market operations but then later provided funds through a 1yr medium-term lending facility. Finally, 10yr JGBs were relatively flat with demand sapped by the positive risk sentiment in Japan, and after the 30yr JGB auction showed weaker demand as the MOF sold less than planned and the b/c declined from prior. PBoC skipped open markets operations, but announced CNY 298bln via 1yr Medium-Term Lending Facility. PBoC set CNY mid-point at 6.5269 (Prev. 6.5311)

Top Asian News

  • China Foreign Reserves Rise a Seventh Month Amid Yuan Strength;China End-Aug. Forex Reserves at $3.0915T; Est. $3.0950T
  • Malaysia Holds Interest Rate at 3% as Economic Outlook Improves
  • China Cities Face Surging Funding Costs on Default Concerns
  • Hong Kong Dollar Surges Most in a Month Against Greenback
  • Japan Stocks to Watch: Japan Tobacco, Panasonic, Sekisui House
  • Onshore Yuan Rises Past 6.5 Per Dollar First Time Since May 2016
  • Ford China Aug. Sales Fall 1% Y/y to 97,863 Units

European equity markets were mostly higher in early European trade as markets look ahead to the ECB’s interest rate decision. Financials were slightly underperforming while utilities outperformed, supported by RWE and Innogy after reports in Spanish press that Iberdrola are looking at a large-scale acquisition in Europe. Bunds opened lower but have traded sideways throughout the European morning ahead of the ECB decision. The lower open came as US yields rose following the temporary extension of the debt ceiling. Peripheral spreads were steady while the Spanish Tesoro sold four lines in a relatively well-received auction while the French 10yr slipped around 10 ticks after the market absorbed the latest supply from France.

Top European News

  • French May Be Souring on Macron, But He’s All They’ve Got
  • U.K. House Prices Climb Most This Year, Bucking Recent Trend
  • German Industry Output Stagnates as Manufacturing Momentum Slows
  • Woodford Says We’ve had a Tough Couple of Months; Blames China
  • Norwegian Jumps After CFO Says Could Sell Leasing Unit, Jets
  • Euro Extends Gains as Dollar Pressured; Riskies Edge Higher
  • May’s Key Brexit Bill Set for First Debate in Parliament

In FX, the EUR strengthened across the board ahead of the ECB rate decision, although news flow and data from the Eurozone
was relatively light. Some reports circulated that the ECB decision would be released after the usual time of 1345CST which led
to speculation that policy change was coming, however, this was a mistake and the ECB have said the decision will be released at
the usual time. The SEK weakened after the Riksbank’s rate decision where they kept interest rates and the QE programme
unchanged and stated they are prepared to implement more easing if necessary. Elsewhere, CAD remains in close proximity
to yesterday’s BoC-inspired gains vs. the USD, while the USD is broadly weaker across the board as USD/JPY trades circa 40 pips
lower despite the risk sentiment seen in equity markets.

In commodities, WTI and Brent crude futures had been lower in early European trade as Libyan oil production has resumed from certain oilfields,
including the Sharara field, which is the country’s largest. However, the impact from the recent hurricanes is still having an impact on the market. As oil refineries continue to come back online in Texas demand for crude is expected to pick up. 3.8mln bpd of
refining  capacity was still shut-in on Wednesday although a number of refineries are in the process of restarting.
US API weekly crude stocks (01 Sep, w/e) 2790K (Prev. -5780K).

Looking at the day ahead, there is initial jobless claims, continuing claims and final readings for Q2 nonfarm productivity due. Away from the data, in the UK, Brexit Secretary David Davis faces questions in the House of Commons about the state of Brexit talks. In the US, Cleveland Fed President Mester and NY Fed  President Dudley are schedule to speak. Elsewhere, the IMF Managing Director Lagarde, BOJ Deputy Governor and BOK Governor will meet for a two-day conference on growth in Seoul.

US Event Calendar

  • 8:30am: Initial Jobless Claims, est. 245,000, prior 236,000; Continuing Claims, est. 1.95m, prior 1.94m
  • 8:30am: Nonfarm Productivity, est. 1.3%, prior 0.9%; Unit Labor Costs, est. 0.3%, prior 0.6%
  • 9:45am: Bloomberg Consumer Comfort, prior 53.3
  • 12:15pm: Fed’s Mester Speaks on Economic Outlook and Monetary Policy
  • 7pm: Fed’s Dudley Speaks on U.S. Economic Outlook, Monetary Policy
  • 8:15pm: Fed’s George Speaks on the Economic Outlook

DB’s Jim Reid concludes the overnight wrap

It’s amazing what a difference a day makes. US politics returned to be the dominant driver in markets again yesterday following the news that President Trump had reached an agreement with the Democrats to kick the debt limit can firmly into the month of December

Before we jump into that in more detail though, looking ahead today is all about the ECB with the policy meeting outcome scheduled for 12.45pm BST and Draghi’s press conference due about 45 minutes later. As we noted on Monday we aren’t expecting any policy announcements. It’s well known that a QE exit step is expected in the next few months so any hints on that will be closely watched. Our economists expect the exit signal to be weak today (their expectation is a dovish October announcement) given concern about market overshooting. Indeed they expect the ECB to leave the current rhetorical framework “confidence, patience, persistence and prudence” largely intact today while adding a mild verbal warning that the Euro exchange rate is “important to growth and inflation”. Indeed the extent to which Draghi jawbones the  currency today is likely to be the most important driver for the ECB outlook and he won’t need to be reminded that the Euro is up +3.6% since the last policy meeting and up +13.4% YTD.

Interestingly, just as Europe was heading for the doors last night, a Bloomberg article hit the screens suggesting that policy makers have already been given a first look at various QE scenarios for 2018. The crux of the article was that the governing council have been presented with multiple scenarios without going into further detail aside from suggesting that different combinations for the size and duration of purchases were made. The article also suggested that a decision doesn’t look likely before the October 26th meeting which isn’t a great surprise. The article did also suggest that officials “may talk about altering their  forward guidance on interest rates” and that ECB staff “slightly lowered their inflation forecasts for 2018 and 2019”. Without knowing just how much these forecasts are tweaked it’s probably too early to read into those factors, although if the use of the word “slight” is a clue then maybe this shows that the ECB isn’t hugely concerned about the currency. We should know in about 6 to 7 hours.

Back to the big news across the pond now where just after that ECB article hit, the White House announced that President Trump had agreed to a deal initially proposed by the Democrats that will see a three-month government spending and debt limit extension added to a hurricane relief bill. So in other words this now means that the debt limit can has been kicked back to December 15th. Prior to that news House Speaker Ryan had said in the morning that the Democratic proposal for a three-month extension was “unworkable” and “ridiculous”. It has since emerged that Trump also went against the will of Treasury Secretary Steven Mnuchin and Senate Majority leader Mitch McConnell who both wanted a longer extension. Unsurprisingly T-Bills maturing on October 5th and October 12th had a field day, rallying -16.5bps and -13.4bps respectively, however December T-Bills were as much as +8.7bps higher in yield intraday. Longer dated bonds were only modestly weaker with 10y Treasury yields finishing +4.5bp higher at 2.105%. Risk assets took the news well with the S&P 500 bouncing back to a +0.31% gain. Gold closed -0.41% lower.

So while this clears the runway for a few months and removes a potential near term risk for markets it was fairly amazing to see Trump outright defy Republican leaders in Congress. It also begs the question of whether we could see Trump do the same in future deals. It’s worth keeping in mind too that the December Fed meeting is scheduled for the 12th and 13th, so two days prior to the deadline. A lot can change between now and then but this certainly ups the uncertainty factor to that meeting.

On a related note, the big news over at the Fed yesterday was the announcement that Vice-Chair Stanley Fischer had resigned, taking effect next month. Fischer was already scheduled to step down in June next year however the acceleration of his resignation means that the Fed will now be competing with the loss of another senior hawkish member (or at least the hawkish side of centre). Notably, this means that the Fed is left with four vacant seats on the board which surely adds another cloud to the outlook. How quickly Fischer is replaced will be determined by President Trump. With question marks still around Janet Yellen when her term as Chair expires in February, there appears to be more questions than answers right now.

Wrapping up the remaining central bank news from yesterday, there was a reasonable surprise hike from the Bank of Canada which raised the benchmark rate by 25bps to 1%. Canadian 2y bond yields surged 10.1bps by the close while the CAD rallied +1.20% for its strongest day in nearly two months. Only 6 of 26 economists had expected the move this month. However, the BoC’s action was mainly a surprise for its timing rather than substance as most commentators, including DB’s Brett Ryan, had expected the BoC to take this step next month. The BoC justified the move by noting that stronger than expected data had  supported the Bank’s view that domestic growth is becoming more broadly-based  and self-sustaining. Looking ahead, the BoC noted that “future monetary policy decisions are not predetermined and will be guided by incoming economic data and financial market developments as they inform the outlook for inflation”. We note the Bloomberg calculator currently suggest a 65% chance of a further rate hike in December

This morning in Asia, markets have largely followed the lead from the US in trading firmer, with Nikkei (+0.37%), Kospi (+1.07%), ASX 200 (+0.27%) and Hang Seng (+0.23%) all up. Bourses in China are little changed. The 10y Treasuries are slightly stronger this morning (-1.2bp). Elsewhere, four more US THAAD missile launchers have arrived in South Korea today, partly boosting security in anticipation for more missile tests by North Korea, potentially as soon as this weekend.

In terms of other markets yesterday, in Europe the Stoxx 600 edged up +0.06%, but the DAX rose +0.75%, led by gains from the auto secto r (+2.23%). European bond yields increased modestly, with 10y Bunds (+0.9bp), Gilts (+0.5bp) and French OATs (+1.5bp) all higher. Elsewhere, WTI Oil rose 1% as more Texan oil refineries resume operations. Both the US Dollar index and the Euro were little changed.

Moving on and to the latest on Brexit. Yesterday we learned that the office representing PM Theresa May had distributed a letter to FTSE 100 listed UK companies, asking senior executives to sign and publicly support her government’s Brexit strategy. According to Sky News, the leaked letter expressed confidence in the future of a global Britain and says the government’s repeal bill will “make Britain ready for life outside the EU”. In response, some executives expressed incredulity and are unlikely to sign the letters. May’s Brexit legislation bill will be debated for the first time in parliament today.

Turning to other data releases from yesterday. In the US, the August ISM nonmanufacturing composite index rose mom but was a tad lower than expected at 55.3 (vs. 55.6 expected). In the detail, the employment index rose 2.6pts to 56.2 (1.7pts above the YTD average), the new orders index rose 1.6pts to 57.1 (1.9pts below the YTD average) and the prices paid index rose to 57.9  (highest reading since February). Elsewhere, the final reading for the Markit services and composite PMIs were also slightly weaker, with services at 56.0 (vs. 56.9 expected) and the composite at 55.3 (vs. 56.0 previously). The July trade balance figures were slightly above market at -$43.7bn (vs. -$44.7bn expected).

Meanwhile the latest Beige Book was reasonably positive with all twelve Federal Reserve Districts reporting that economic activity had expanded at “a modest to moderate pace”. Employment growth was said to have “slowed some” on balance, and labour markets said to be “widely characterized as tight”. However, the majority of Districts reported only “modest to moderate” wage growth. In Germany, the July factory orders fell more than expected at -0.7% mom (vs. 0.2% expected) driven by weaker domestic orders, but annual growth was still up +5.0% yoy (vs. +5.8% expected).

Looking at the day ahead, Germany’s industrial production for July (+0.5% mom expected) is due along with France’s trade balance and current account balance stats this morning. Elsewhere, house price data in the UK and Q2 GDP (final revision) for the Eurozone is due. This is all before the ECB meeting around midday. Over in the US, there is initial jobless claims, continuing claims and final readings for Q2 nonfarm productivity due. Away from the data, in the UK, Brexit Secretary David Davis faces questions in the House of Commons about the state of Brexit talks. In the US, Cleveland Fed President Mester and NY Fed  President Dudley are schedule to speak. Elsewhere, the IMF Managing Director Lagarde, BOJ Deputy Governor and BOK Governor will meet for a two-day conference on growth in Seoul.

3. ASIAN AFFAIRS

i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 19.89 POINTS OR 0.59%   / /Hang Sang CLOSED DOWN 90.84 POINTS OR 0.33%/ The Nikkei closed UP 38.55 POINTS OR 0.20%/Australia’s all ordinaires CLOSED UP 0.02%/Chinese yuan (ONSHORE) closed UP at 6.4920/Oil UP to 49.05 dollars per barrel for WTI and 54.43 for Brent. Stocks in Europe OPENED GREEN. Offshore yuan trades  6.4972 yuan to the dollar vs 6.4920 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 VERY HAPPY TODAY 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

ON TESTS IT CERTAINLY LOOKS LIKE IT WILL DO THE JOB

(COURTESY ZERO HEDGE)

 

Can The U.S. Intercept A North Korean Missile?

North Korea’s nuclear program has gathered serious and frightening momentum over the past few months, culminating in the isolated regime test-firing a missile over Japan in August and detonating a hydrogen bomb last Sunday. As diplomatic efforts stall, Statista’s Niall McCarthy points out that eyes are turning to the region’s missile-defense technology.

Despite it being South Korea’s first line of defense against a nuclear attack, the U.S. Army’s THAAD system has proven controversial in the country with residents fearful the areas surrounding the launchers could become North Korean targets. The most recent nuclear test has prompted the country’s defense ministry to deploy the four remaining THAAD launchers, on top of the two already in operation.

That decision may turn out to be well-founded, considering that theTHAAD system has a 100 percent success rate in test interceptions.That’s according to the U.S. Missile Defense Agency, who say the system hit 13 targets in 13 attempts up to May 2017 (as well as another successful test since then).

Infographic: Can The U.S. Intercept A North Korean Missile? | Statista

You will find more statistics at Statista

Countries in the region can also count on the Aegis missile system fitted to U.S. and Japanese naval vessels. Its Raytheon Standard missiles cannot currently engage ICBMs but they are capable of destroying ballistic missiles. They have proven reasonably reliable in tests, destroying 35 targets and failing on seven occasions.

The U.S. Patriot surface to air missile system is also used by South Korea and Japan. When it is used to engage missiles, it has a shorter range and is more effective protecting strategic targets rather than larger areas. Despite controversy regarding the system’s record intercepting Iraqi SCUD missiles during the Gulf War, anti-missile tests have generally proven successful.

The Ground-Based Midcourse Defense is responsible for defending North America by intercepting incoming warheads in space during the midcourse phase of ballistic trajectory. So far, however, the system has proven far from reliable with only 10 out of a total of 18 tests ending in success.

Israel has demonstrated how far missile defense technology has evolved, deploying its Iron Dome system with great success.

As North Korea continues testing and sabre-ratting, the U.S. and its allies will be hoping their own defenses won’t be put to a far greater test.

b) REPORT ON JAPAN

end

c) REPORT ON CHINA

 

end

First the statement: rates unchanged and QE until Dec 20177 or beyond..

we await his press conference for details..

(courtesy zero hedge)

ECB Keeps Rates, Statement Unchanged; QE To Run Until “December 2017 Or Beyond”

The ECB has kept not only its three key rates and pace of QE unchanged, but also its most recent statement, reiterating that it sees QE “at the current monthly pace of €60 billion, are intended to run until the end of December 2017, or beyond, if necessary”, sees rates at present level well past the end of QE – according to more than half of economists in a recent Bloomberg survey, the ECB will keep its rates on hold until 2019 –  and that QE will run until the inflation path has sustainably adjusted.

  • ECB SEES QE RUNNING UNTIL END OF DECEMBER OR BEYOND IF NEEDED
  • ECB: QE TO RUN UNTIL INFLATION PATH HAS SUSTAINABLY ADJUSTED

The Full statement:

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council expects the key ECB interest rates to remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases.

 

Regarding non-standard monetary policy measures, the Governing Council confirms that the net asset purchases, at the current monthly pace of €60 billion, are intended to run until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. The net purchases are made alongside reinvestments of the principal payments from maturing securities purchased under the asset purchase programme. If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the programme in terms of size and/or duration.

 

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 14:30 CET today.

And now, on to the press conference, where as previewed earlier, the focus will be on the ECB’s inflation forecasts and language about the size of future asset purchases.

END
Conflicting signals sends the Euro higher, Bund yields tumble as Draghi kicks the can down the road for another month.  In October he will have no choice but to taper which will send the Euro skyrocketing something that he does not wish for.
(courtesy zerohedge)

SPAIN/CATALONIA

Showdown in Barcelona.  The wealthy province of Catalonia which houses Barcelona wants separation from Spain. For years this area sends in more tax dollars than it receives and this is why the Catalan parliament has approved a referendum vote to be held on October 1.  Madrid of course, opposes this move but what can they do short of invasion?

(courtesy Mish Shedlock/Mishtalk)

Showdown In Spain: Madrid Moves To Block Catalonia Referendum

Authored by Mike Shedlock via MishTalk.com,

In a move many people thought would never happen, the Catalan parliament approved a referendum that would allow a vote on the region’s independence from Spain.

The central government seeks intervention from the Constitutional Court. But short of invasion who is going to stop the vote?

The Spanish government has accused the Catalan Parliament of committing a “constitutional and democratic atrocity” by approving legislation to allow next month’s bitterly disputed independence referendum to go ahead.

 

On Wednesday night, the region’s ruling, pro-sovereignty coalition – which has a majority in the Catalan Parliament – managed to get the referendum law passed despite angry objections from opposition MPs, who complained that usual parliamentary procedures had been disregarded.

 

The legislation passed by 72 votes after 52 opposition MPs walked out of the chamber in Barcelona in protest at the end of an ill-tempered, 11-hour session.

 

The move was denounced by the Spanish government, which once again said it would do everything in its legal and political power to stop the vote from going ahead on 1 October.

 

The Spanish prime minister, Mariano Rajoy, ordered government lawyers to file a complaint with the country’s constitutional court so that the vote could be annulled.

 

The public prosecutor’s office also said it was preparing a case against Catalan parliamentary officials – including the speaker, Carme Forcadell – for disobeying previous court orders forbidding legislative steps towards independence.

 

Catalan separatists insist the wealthy north-eastern region has a political, economic and cultural right to self-determination.

 

But Madrid is opposed to independence, arguing that it is a violation of the constitution, and has refused to offer a Scottish-style referendum on the matter.

 

Three months ago, Puigdemont announced that the referendum would be held on 1 October and that voters would be asked: “Do you want Catalonia to be an independent country in the form of a republic?”

 

More than 80% of participants opted for independence in the 2014 poll – although only 2.3 million of Catalonia’s 5.4 million eligible voters took part.

 

The Catalan government insists that the results of the October vote will be legally binding. If successful, the regional government will declare independence from Spain 48 hours after the result is in and set about building a sovereign state.

 

According to a poll at the end of July, 49.4% of Catalans are against independence while 41.1% support it.However, a poll this week found that, were the referendum to go ahead, the yes campaign would take 72% of the vote on a turnout of 50%.

 

The Catalan government has not set a threshold for minimum turnout, arguing the vote will be binding regardless of the level of participation.

Spain Moves to Block Catalonia Referendum

The Wall Street Journal reports Spain Moves to Block Catalonia Referendum on Independence.

The Spanish government on Wednesday asked a top court to block the Catalan regional government’s bid to hold a referendum on independence, the latest clash in what has become Spain’s most pressing political issue.

 

“The government has asked the Constitutional Court to declare null and void the adopted agreements,” Deputy Prime Minister Soraya Sáenz de Santamaría said. “We are defending the rule of law in Spain and democracy in Catalonia,” she added.

 

The clash between the central government in Madrid and regional leaders in Barcelona, the capital of Catalonia, has been building for decades and began to accelerate when a financial crisis hit Spain several years ago. The economy has since recovered and support for independence in Catalonia has flagged somewhat. A majority of Catalans, however, still support a vote on whether the region should separate from Spain.

What It All About?

  1. Tax Collection – Catalonia is the industrial superstate of Spain. Catalonia sends far more to Madrid than it gets back. Secession would cost Spain approximately 20% of tax revenue.
  2. Language – Catalan is not a dialect of Spanish, but a language that developed independently out of the vulgar Latin spoken by the Romans who colonized the Tarragona area. It is spoken by 9 million people in Catalonia, Valencia, the Balearic Isles, Andorra and the town of Alghero in Sardinia. Since the early 1980s, the imposition of a system known as “immersion,” with Catalan as the only vehicular language in state schools, has guaranteed everyone educated in the past 30 years has a command of it. However, thanks to the presence of Spanish in daily life and the media, virtually all Catalans are perfectly bilingual.
  3. History – Dating back to 1150 and 1707 Catalonia was not part of Spain. Numerous kings tried with no success to end the Catalan language. Those attempts ended in 1931. The Telegraph has a nice historical perspective on Why Catalonia wants independence from Spain.

Map

Eurozone Implications

The independence referendum is not a vote to leave the EU or the Eurozone.

As an independent country, Catalonia would have to apply for membership to the EU and to the Eurozone.

Mish Take

It’s certainly easy enough to draw a map of Spain without Catalonia.

I am in favor of just that. Short of invasion who is going to stop the vote?

Moreover, Catalonia could adopt the euro as its national currency whether or not it was officially part of the Eurozone by treaty.  It would not have the ability to print euros.

Inability to print money at will is an ideal setup.

END

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

Russia/USA

6 .GLOBAL ISSUES

Caribbean island of Barbuda is totally demolished

(courtesy zerohedge)

Barbuda “Totally Demolished” After Hurricane Irma Levels 90% Of All Dwellings

Having mauled the Caribbean island of St. Martin overnight, where this morning the French government said that the four “most solid” buildings have been destroyed, Hurricane Irma – now at 185mps for a record 33 straight hours – has just passed north of Puerto Rico, buffeting the US island territory’s capital, San Juan, with heavy downpours and strong winds that scattered tree limbs across roadways, but not before totally demolishing” the island of Barbuda, with 90% of all dwellings leveled, Prime Minister Gaston Browne said.

Images show Irma damage in Barbuda; officials say destruction could be “upwards of 90%” http://cnn.it/2vMPepD 

Browne said that Irma has unleashed “absolute devastation” on the island making Barbuda, home to some 1,800 people, “basically uninhabitable” with preliminary damage estimated at some $150 million.

View image on TwitterView image on Twitter

Antigua & Barbuda’s Prime Minister: “The way it stands now,  is basically uninhabitable.”

Photos: ABS Television/Radio.

View image on TwitterView image on TwitterView image on TwitterView image on Twitter

First images out of Barbuda from a Facebook broadcast live by ABS Radio & TV.

Widespread destruction has occurred on the island.

He said that the island’s communication network is 100% destroyed.

Antigua & Barbuda’s PM Browne: “‘s communication network is 100% destroyed”

Photo: ABS Television/Radio

View image on Twitter

Unbelievable.  has snapped all the cell towers on . That’s reinforced steel – photo: ABS

A before and after photo confirms the devastation:

“This rebuilding initiative will take years,” Browne told local television after a visit to the island, where he confirmed at least one person had died due to the storm. A second storm-related fatality, that of a surfer, was reported on Barbados and the French government said at least two people were killed in Caribbean island territories of St. Martin and Saint Barthelemy.

Irma, with top sustained winds of 185 miles per hour (300 km per hour), was on track to reach Florida on Saturday or Sunday, becoming the second major hurricane to hit the U.S. mainland in as many weeks.

While Irma’s intensity could fluctuate, and its precise course remained uncertain, the storm was expected to remain at least a Category 4 before arriving in Florida.

Irma is not alone, and as reported earlier, two other hurricanes formed on Wednesday. While Katia, in the Gulf of Mexico, poses no threat to the U.S. Hurricane Jose in the open Atlantic, about 1,000 miles (1,610 km) east of the Caribbean’s Lesser Antilles islands, could also eventually threaten the U.S. mainland, a third hurricane landfall on the U.S. in under a month.

According to Reuters, Florida emergency management officials, chastened by Harvey’s devastation, began evacuations days in advance of Irma’s arrival, ordering all tourists to leave the Florida Keys, a resort archipelago off the state’s southern tip, starting Wednesday morning. Evacuation of residents from the Keys was to begin Wednesday evening.

Ed Rappaport, acting National Hurricane Center director, interviewed on Miami television station WFOR-TV, called Irma a “once-in-a-generation storm,” adding that for Florida, “It’s the big one for us.”

Chuck Watson, disaster modeler with Enki Research, said in a note that “Irma is the kind of storm where you get thousands of lives lost. This is not going to be the big slow-motion flood like Harvey – this is a real, honest-to-God hurricane.”

Late on Wednesday, the eye of Irma passed just north of Puerto Rico.

You can use of  spectrum width to show dev. of ‘s secondary  b/c it depicts areas of strong boundary layer turbulence.

“The winds that we are experiencing right now are like nothing we have experienced before,” Puerto Rico Governor Ricardo Rossello told CNN. “We expect a lot of damage, perhaps not as much as was seen in Barbuda.”

At least half of Puerto Rico’s homes and businesses lost electricity by nightfall, according to a Twitter message posted by an island utility executive. According to the Miami Herald, Puerto Rico residents could be left without power for four to six months after Hurricane Irma grazes the island.

“There are going to be blackouts. Areas that will spend three, four months without electricity,” Ricardo Ramos, executive director of Puerto Rico’s energy agency, said, according to the Spanish-language news agency EFE.

On its current path the core of Irma, which the Miami-based center said marked the strongest hurricane ever recorded in the Atlantic Ocean, was expected to scrape the northern coast of the Dominican Republic on Thursday. It was on a track that would put it near the Turks and Caicos and southeastern Bahamas by Thursday evening.

Trump, whose waterfront Mar-a-Lago estate in Palm Beach, Florida, could take a direct hit from the storm, has already approved emergency declarations for Florida, Puerto Rico and the U.S. Virgin Islands, mobilizing federal disaster relief efforts. He spoke with governors of all three by telephone on Wednesday, the White House said.

 

Florida Governor Rick Scott said Irma could be more devastating than Hurricane Andrew, a Category 5 storm that struck the state in 1992 and still ranks as one of the costliest ever in the United States.

Residents in most coastal communities of densely populated Miami-Dade County were ordered to move to higher ground beginning at 9 a.m. ET (1300 GMT) on Thursday, Mayor Carlos Gimenez announced on Wednesday. The evacuation orders will affect more than 100,000 residents, the Miami Herald reported. Miami-Dade has a population of 2.7 million.

 watches could be issued for portions of the Florida Keys and the Florida peninsula on Thursday. http://hurricanes.gov 

Scott told a news conference in the Keys that 7,000 National Guard troops would report for duty on Friday, ahead of the storm’s expected arrival. Statewide emergency declarations were issued in both North and South Carolina, and Georgia Governor Nathan Deal declared an emergency for six coastal counties in anticipation of Irma’s arrival.

END

7. OIL ISSUES

Harvey causes demand for both WTI and gasoline to drop.  Crude just saw a huge inventory buildup. Irma will no doubt cause a huge drop in demand as well

(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 THURSDAY morning 7:00 am

Euro/USA   1.1981 UP .0055/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/HOUSTON FLOODING/EUROPE BOURSES ALL IN THE GREEN

USA/JAPAN YEN 108.87 DOWN 0.291(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 1.3090 UP .0045 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.2176 DOWN .0059 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS THURSDAY morning in Europe, the Euro ROSE by 55 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1981; / Last night the Shanghai composite CLOSED  DOWN 19.89 POINTS OR 0.59%     / Hang Sang  CLOSED  DOWN 90.84 POINTS OR 0.33% /AUSTRALIA  CLOSED UP 0.02% / EUROPEAN BOURSES OPENED  ALL IN THE GREEN 

The NIKKEI: this WEDNESDAY morning CLOSED UP 38.55 POINTS OR 0.20%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 90.84 POINTS OR 0.33%  / SHANGHAI CLOSED DOWN 19.89 POINTS OR 0.59%   /Australia BOURSE CLOSED UP 0.02% /Nikkei (Japan)CLOSED UP 38.55  POINTS OR 0.20%   / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1338.75

silver:$17.88

Early THURSDAY morning USA 10 year bond yield:  2.089% !!! DOWN 1   IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

The 30 yr bond yield  2.707, DOWN 0  IN BASIS POINTS  from WEDNESDAY night.

USA dollar index early THURSDAY morning: 91.80 DOWN 49  CENT(S) from WEDNESDAY’s close. AND BREAKS RESISTANCE OF 92.00

This ends early morning numbers  THURSDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 2.737% DOWN 11 in basis point(s) yield from WEDNESDAY 

JAPANESE BOND YIELD: +.010%  DOWN 1/5   in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve/NOW NEGATIVE

SPANISH 10 YR BOND YIELD: 1.495% DOWN 7  IN basis point yield from WEDNESDAY 

ITALIAN 10 YR BOND YIELD: 1.927 DOWN 10 POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 57 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.307% DOWN 4  IN  BASIS POINTS ON THE DAY

END

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.2008 UP .0082 (Euro UP 82 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 108.40 DOWN 0.755(Yen UP 76  basis points/ 

Great Britain/USA 1.3078 UP  0.0026( POUND UP 32 BASIS POINTS)

USA/Canada 1.2144 DOWN .0091 (Canadian dollar UP 91 basis points AS OIL ROSE TO $49.15

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP  by 82 basis points to trade at 1.2008

The Yen ROSE to 108.40 for a GAIN of 76  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 32  basis points, trading at 1.3078/ 

The Canadian dollar ROSE by 91 basis points to 1.2144,  WITH WTI OIL RISING TO :  $49.15

The USA/Yuan closed at 6.4870/
the 10 yr Japanese bond yield closed at +.010%  DOWN 1/5 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 2  IN basis points from WEDNESDAY at 2.049% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.667 DOWN 2 in basis points on the day /

Your closing USA dollar index, 91.49  DOWN 80 CENT(S)  ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00 

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

London:  CLOSED UP  42.85 POINTS OR 0.58%
German Dax :CLOSED UP 62.09 POINTS OR 0.67%
Paris Cac  CLOSED UP 13.21 POINTS OR 0.26% 
Spain IBEX CLOSED DOWN 6.10 POINTS OR 0.06%

Italian MIB: CLOSED DOWN 92.05 POINTS OR 0.42% 

The Dow closed DOWN 22.86 OR 0.10%

NASDAQ WAS closed UP 4.55  POINTS OR 0.07%  4.00 PM EST

WTI Oil price;  49.15  1:00 pm; 

Brent Oil: 54.36 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.34 DOWN 17/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 17 BASIS PTS)

TODAY THE GERMAN YIELD FALLSS TO  +0.307%  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:$49.13

BRENT: $54.49

USA 10 YR BOND YIELD: 2.044%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.663%

EURO/USA DOLLAR CROSS:  1.2027 up .0100

USA/JAPANESE YEN:108.46  DOW  0.693

USA DOLLAR INDEX: 91.518  down 77  cent(s)/BREAKS RESISTANCE OF 92.00  

The British pound at 5 pm: Great Britain Pound/USA: 1.3105 : UP 60 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2116 UP 119 BASIS pts 

German 10 yr bond yield at 5 pm: +0.307%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Dollar & Bond Yields Plunge As Cohn Doubts, A Draghi Dud, & Debt Ceiling Denials Dominate

Ugly jobs data (hopefully transitory), uglier energy industry data, and ugliest comments from Trump on throwing away any fiscal restraint with the debt-ceiling bathwater left the dollar down, stocks lower, and bonds and bullion bid…

 

Was this Gary Cohn driven?

 

The Dow (hurt by DIS, GS, and TRV) and Small Caps sank on the day… (stockas levitated after Europe closed yet again)

 

Trannies scrambled back to unch on the week…

 

Reinsurers extended losses today…

 

VIX limped lower again today, desperate to get S&P green (but failed)

 

Even as realized vol surges…

 

For now only FX vol is “getting it”…

 

Bonds are from Mars, Stocks are from Venus?

 

Treasury yields tumbled once again…

 

Pushing 10Y to a 2.03% handle…

 

The lowest since election day…

 

But, but, but… how can interest rates be this low? It’s the ‘real’ economy, stupid!

 

Bloomberg’s Vincent Cignarella points out something interesting…Lest you have any doubts that the Fed is on hold for the time being, consider this: Is the central bank really determined to drive the effective Fed Funds rate through the two-year yield with another 25 basis point hike? Highly unlikely.

 

The Dollar Index plunged most in 6 months today after Draghi delivered a nothingburger and Trump suggested doing away with the debt ceiling…

 

The Dollar index fell to its lowest since Jan 2015… (NOTE the USD is down 3.7% YoY – the biggest Annual drop since July 2014)

 

WTI and RBOB sank today but the former held above $49…

 

Gold spiked to its highest since the election night spike highs – breaking above $1350 – perfectly mirroring USDJPY as usual

 

OJ Futures bounced 3% today as Irma neara Florida…

 

Finally, now it gets exciting…

Last night

Futures tumble on hearing that Gary Cohn is unlikely to be the next chair at the Fed

(courtesy zerohedge)

Stocks Tumble After WSJ Reports Gary Cohn “Unlikely” To Be Next Fed Chair

US Equity futures just opened and tumbled in what seems like a delayed reaction to the Cohn news…

 

Nasdaq, Dow, and S&P Futs all opened lower…

 

*  *  *

As we detailed earlier, just hours after Fed Vice Chair Fischer resigned, and Goldman CEO Lloyd Blankfein threw his support behind Gary Cohn…

“No one’s perfect, but he’s the best I know,” Blankfein said of Cohn, his former No. 2 at Goldman Sachs, during a talk with journalists on Wednesday at the bank’s headquarters in New York.

 

“He’d be a different kind of person” than Fed Chair Yellen, Blankfein added.

 

“He’s not an academic. I don’t know that he reads a lot of policy papers, let alone write them.”

‘Sources’ confirm President Trump is unlikely to nominate Gary Cohn to become Federal Reserve Chairman, WSJ’s Nate Becker reports in tweet.

@WSJ scoop crossing now: Trump unlikely to nominate Cohn as Fed chair; his chances dropped after he criticized Trump on Charlottesville.

As The Wall Street Journal reports, this shift inside the Oval Office was largely due to Mr. Cohn’s reaction to Mr. Trump’s response to the violence in Charlottesville, Va., in which the president at times blamed both white supremacists opposing the removal of a Confederate war statue and counterprotesters.

According to PredictIt, Cohn’s odds just crashed…

 

Interestingly there is some reaction in stocks, as some wonder what Cohn is sticking around for now… (especially after being called out as a “globalist” by Trump)

(courtesy zerohedge)

Stocks Tumble To ‘Gary Cohn’ Lows – Give Up Overnight Gains

With Mario Draghi offering little, US equities gave up their overnight gains rather quickly once US equities opened…

As EURUSD reversed lower so stocks remembered just how much they love Gary Cohn…

FEMA chief warns that Irma is a devastating “nuclear” hurricane

(courtesy zerohedge)

FEMA Chief, Miami Beach Mayor Warn: “Get Out Now, This Is A Devastating, Nuclear Hurricane”

After laying waste to the Northern Caribbean and leaving most of bankrupt Puerto Rico without power – perhaps for months – Hurricane Irma, still a category five storm, is expected to make landfall near Miami this weekend. Florida Gov. Rick Scott has already declared a state of emergency, and last night more than 100,000 Miami-Dade residents in Miami Beach and low-lying mainland areas were instructed to leave their homes by Miami Mayor Carlos Gimenez, who issued his first evacuation order.

Now, FEMA Chief Brock Long says that the storm will have a “truly devastating” impact when it slams into southern coastal areas of the US, adding that people in Florida and other states must heed evacuation orders after the storm killed more than 10 people in the Caribbean.

The FEMA chief said Irma would be only the fourth Category Five hurricane to hit the United States since 1985, conjuring memories of Hurricane Andrew, which demolished parts of Florida in 1992.

“Bottom line is the majority of people along the coast have never experienced a major hurricane like this. It will be truly devastating,” he told CNN.

While mandatory evacuation orders have so far only been issued in parts of Florida, Brock expects similar orders to be issued for Georgia, South Carolina and North Carolina within the next 48 hours, Long said: “The entire southeastern United States better wake up and pay attention,” he added.

The mayor of Miami Beach Philip Levine also warned that Irma could have an impact of “nuclear” proportions, though it was unclear if he was referring to the two nuclear power plants that lie directly in the path of the hurricane.

“We have talked to people in your city who say, ‘We ain’t going,’” CBS4’s Hank Tester told Levine. “I hate to hear that. I’ll do anything in my power to convince them this is a very serious storm. This is a nuclear hurricane.They should leave the beach, they must leave the beach.”

“As you know, as of yesterday, I have been telling our residents I strongly urge they please leave Miami Beach. You have friends, you have family – go visit them,” Levine said. “Get out of the barrier island and I am very happy Mayor Gimenez issue the mandatory evacuation early this evening.”

The storm is massive and already doing catastrophic damage to several island nations, Levine said.

“This storm will envelope us whether it is off shore or on shore. It won’t make a difference,” Levine said.

As weather forecaster Michael Ventrice noted on Twitter, Miami remains the most likely major city to experience hurricane-force winds because of Irma.

Here is the latest Calibrated City-level probabilities to see Hurricane force winds (>73mph); Miami leading the way but East Coast %s rising

Long, whose agency is still busy with the aftermath of Hurricane Harvey, which hit Texas and Louisiana last month, said around 3,000 federal workers have been mobilized to deal with the emergency. A Harvey relief bill has passed the House, and looks to soon become law after Trump made a deal with Democratic leaders Chuck Schumer and Nancy Pelosi. Otherwise, the agency risks running out of funding by the end of the week. Three navy ships are also anchored off the coast of Puerto Rico “to support life-saving missions,” Long said, although there have so far been no reports of major damage after Irma swept over the island on Wednesday night.

 

(courtesy zero hedge)

What Wage Growth? Unit Labor Costs Decline Despite So-Called “Tight Labor Market”

Despite all the hope for higher incomes spewing from within the various soft-surveys of individuals and businesses across America, Q2 saw unit labor costs decline 0.2% year-over-year – the second YoY drop in the last 3 quarters.

Despite all the great news about lowe eunemployment rates and solid payrolls prints, aggregate unit labor costs for America are unchanged since Dec 2015.

Don’t stop believin’…

Worse still Real Compensation tumbled 0.8% YoY – the 3rd quarterly decline in American wages in a row…

Still – somewhere, there is the Phillips Curve’s tight-labor-market-driven wage pressures…

end

 

We knew this would be inevitable; jobless claims spiked up 62,000 thanks to that huge surge in Texas as the impact of Hurricane Harvey ripples through Texas

(courtesy zerohedge)

Jobless Claims Spike Most Since 2005 Amid Harvey Hangover

Initial jobless claims spiked 62k last week – thanks to a 51k surge in Texas – as the impact of Hurricane Harvey ripples (transitorily) through economic data.

This 26% spike in claims is the largest since 2005 (and biggest absolute rise since 2012).

The 298k print is the highest since April 2015.

The results are among the first to show that Harvey, which made landfall on Aug. 25 along the Gulf Coast in Texas, will cause swings in broader economic data. Employment may be depressed initially until rebuilding and recovery efforts in flooded areas around Houston take hold.

end

this would be good for gold: Trump wants to end the debt ceiling

 

(courtesy zero hedge)

Trump Reportedly Wants To End The Debt Ceiling

If you are wondering what is dragging the dollar down to 32-month lows, perhaps you should add this to the calculus…

Politico reports that President Donald Trump suggested to congressional leaders on Wednesday morning that votes to raise the debt ceiling could be done away with altogether, according to three people familiar with the conversation.

In a meeting with GOP and Democratic leaders, in which Trump sided with the Democrats on a fiscal deal to raise the debt ceiling, the president said he believes the votes are unproductive, those people said.

 

With Congress set to lift the debt ceiling into December as part of the deal, Trump floated the idea that the next time Congress votes to raise the debt ceiling, it could be the last.

 

He said conversations should happen over the next three months, according to people in the room.

The Dems seem open to it…

Schumer said such a move could not be accomplished now, but indicated he would talk to his caucus about considering structural changes to the debt limit in December, a conversation Trump supported.

 

House Minority Leader Nancy Pelosi (D-Calif.) also appeared interested in the deal but was noncommittal. The debt ceiling is a key leverage point for members of the minority, particularly because it can be filibustered in the Senate and require 60 votes.

We suspect Reps won’t be so happy…

Freedom Caucus legislators, angry about Wednesday’s deal, promised a spirited fight in December over the debt ceiling.

 

Conservatives are unhappy that the White House and congressional leaders have agreed to raise the debt ceiling without spending cuts.

Translated: Trump suggests that there should be no constraint at all, not even the fiscally conservative pretense of the debt ceiling law, over how much debt the government can pile on the backs of future generations of Americans. If Obama can add $10 trillion, we are sure Trump can do “better.”

Not good for the New York commercial real estate market as sales plunge over 50% due to the fact that we have an absence of buyers. Owners are refinancing instead of selling..this looks very troublesome!

(courtesy zerohedge)

NYC Commercial Real Estate Sales Plunge Over 50% As Owners Lever Up In The Absence Of Buyers

So what do you do when the bubbly market for your exorbitantly priced New York City commercial real estate collapses by over 50% in two years?  Well, you lever up, of course. 

As Bloomberg notes this morning, the ‘smart money’ at U.S. banking institutions are tripping over themselves to throw money at commercial real estate projects all while ‘dumb money’ buyers have completely dried up.

A growing chasm between what buyers are willing to pay and what sellers think their properties are worth has put the brakes on deals. In New York City, the largest U.S. market for offices, apartments and other commercial buildings, transactions in the first half of the year tumbled about 50 percent from the same period in 2016, to $15.4 billion, the slowest start since 2012, according to research firm Real Capital Analytics Inc.

 

At the same time, the market for debt on commercial properties is booming. Investors of all stripes — from banks and insurance companies to hedge funds and private equity firms — are plowing into real estate loans as an alternative to lower-yielding bonds. That’s giving building owners another option to cash in if their plans to sell don’t work out.

 

“Sellers have a number in mind, and the market is not there right now,” said Aaron Appel, a managing director at brokerage Jones Lang LaSalle Inc. who arranges commercial real estate debt. “Owners are pulling out capital” by refinancing loans instead of finding buyers, he said.

 

But don’t concern yourself with talk of bubbles because Scott Rechler of RXR would like for you to rest assured that the lack of buyers is not at all concerning…they’ve just “hit the pause button” while they wander out in search of the ever elusive “price discovery.”  

At 237 Park Ave., Walton Street Capital hired a broker in March to sell its stake in the midtown Manhattan tower, acquired in a partnership with RXR Realty for $810 million in 2013. After several months of marketing, the Chicago-based firm opted instead for $850 million in loans that value the 21-story building at more than $1.3 billion, according to financing documents. The owners kept about $23.4 million.

 

“The basic trend is you have a really strong debt market and a sales market that has hit the pause button while it seeks to find price discovery,” said Scott Rechler, chief executive officer of RXR.

 

The debt market has become so appealing that landlords are looking at mortgage options while simultaneously putting out feelers for buyers, said Rechler, whose company owns $15 billion of real estate throughout New York, New Jersey and Connecticut. That’s a departure for Manhattan’s property owners, who in prior years would pursue one track at a time, he said.

Of course, this isn’t just a NYC phenomenon as sales of office towers, apartment buildings, hotels and shopping centers across the U.S. have been plunging since reaching $262 billion nationally in 2015, just behind the record $311 billion of real estate that changed hands in 2007, according to Real Capital. Property investors are on the sidelines amid concern that rising interest rates will hurt values that have jumped as much as 85 percent in big cities like New York, compounded by overbuilding and a pullback of the foreign capital that helped power the recent property boom.

The tough sales market has put some property owners in a bind — most notably Kushner Cos., which has struggled to find partners for 666 Fifth Ave., the Midtown tower it bought for a record price in 2007. The mortgage on the building will need to be refinanced in 18 months.

Thankfully, at least someone interviewed by Bloomberg seemed to be grounded in reality with Jeff Nicholson of CreditFi saying that it just might be a “red flag” that buyers have completely abandoned the commercial real estate market at the same time that owners are massively levering up to take cash out of projects.

Some lenders view seeking a loan to take money off the table as a red flag, according to Jeff Nicholson, a senior analyst at CrediFi, a firm that collects and analyzes data on real estate loans. It may signal the borrower is less committed to the project, and makes it easier to walk away from the mortgage if something goes wrong, he said.

But, it’s probably nothing…

 

 

END

Very scary!! Florida has two nuclear power plants directly in the path of Hurricane Irma and they have not yet made plans to shut them down

(courtesy Michael Snyder/Economic Collapse Blog)

Two Nuclear Power Plants In Florida Are Directly In The Path Of Hurricane Irma

Authored by Michael Snyder via The American Dream blog,

Hurricane Irma is more powerful than all of the other major Atlantic storms this year combined, and it has an eye as large as the entire Detroit metro area. It is being reported that “upwards of 90%” of Barbuda has already been destroyed by the storm, and it is being projected that some areas of Puerto Rico could be without power “for between four and six months”. You may want to view these photos and these videos to get a better idea of the immense destructiveness of this very powerful storm. The latest forecasts have Hurricane Irma making landfall in Florida, but so far the two nuclear power plants in Florida that would be directly in the path of the storm have not even started the process of shutting down

In anticipation of powerful Hurricane Irma, which projections on Wednesday showed headed straight for South Florida, Florida Power & Light’s two nuclear plants were finalizing staffing plans and cleaning up the grounds.

 

But neither Turkey Point nor the St. Lucie plant further up the coast had made the call yet to shutting down the plants.

Peter Robbins, spokesman for FPL, said shutting down a reactor is a gradual process, and the decision will be made “well in advance” of the storm making landfall.

Robbins said the plant’s reactors are encased in six feet of steel-reinforced concrete and sit 20 feet above sea level. Turkey Point has backup generators, extra fuel and, as a “backup to the backup,” replacement parts and materials can be flown in from Tennessee.

 

The St. Lucie Nuclear Power Plant is equally protected, Robbins said, and can withstand severe flooding from storm surges. St. Lucie’s nuclear plant survived Hurricanes Frances and Jeanne in 2005 and Wilma the year after.

 

When the eye of Andrew passed over Turkey Point, some facilities around the reactor buildings took a beating. Ultimately, the state’s oldest nuclear plant suffered $90 million in damages, including to systems that were supposed to be hurricane-proof.

 

One of the 400-foot smokestacks for the old oil-burning power plant was cracked in half, even though it was rated to survive 235-mph winds. Andrew blew down all but six of the 41 warning sirens within 10 miles of the plant. The storm left the plant running on backup generators for more than a week to cool the shut-down reactor. A main access road was blocked by debris.

 

“It handled Andrew as it was designed to,” Robbins said. “It’s one of the safest and most robust structures in the state, of not the country.”

ZH: One word comes to mind hearing all this – “contained.”

We all remember what happened with Fukushima, and we definitely do not want to see a repeat on U.S. soil. The Fukushima nuclear disaster changed millions of minds about the safety of nuclear power, and as a member of Congress I will do all that I can to encourage the development of our solar power, wind power and geothermal power capabilities.

Let us hope that Hurricane Irma weakens before it gets to Florida, because the destruction that it is causing right now is off the charts. When it made landfall in Barbuda, there were some wind gusts that were “above 215 mph”

Irma first made landfall in Barbuda — an island with a population of about 1,600 — around 1:47 a.m. ET Wednesday. Local weather stations there captured wind gusts of 155 mph before going silent, indicating the instruments had been blown away. Irma’s sustained winds have been reported at 185 mph, with gusts above 215 mph.

When you have winds that high, there is little that you can do to prepare. According to one top official, “upwards of 90%” of Barbuda has already been destroyed…

At least one death was reported in Barbuda, according to ABS TV Antigua. Charles Fernandez, minister of foreign affairs and international trade for Antigua and Barbuda, told ABS that destruction on Barbuda was “upwards of 90%.”

 

Irma destroyed government buildings, tore roofs from houses and left northern Caribbean islands without power or communications.

Considering what has already happened in the Caribbean, it astounds me that Miami is not being evacuated yet. If all of these communities in the south Florida area try to wait until the last minute to evacuate, it is going to create a traffic nightmare of epic proportions. According to CNN, we could be looking at “one of the largest mass evacuations in US history”…

Based on Irma’s projected path, which includes Florida’s heavily populated eastern coast, the enormous storm could create one of the largest mass evacuations in US history, CNN senior meteorologist Dave Hennen said. Miami-Dade, Broward and Palm Beach counties combined have about 6 million people.

 

Monroe County, home to the Florida Keys, has already ordered mandatory evacuations. Broward County, which includes Fort Lauderdale, issued a mandatory evacuation Wednesday for areas east of Federal Highway.

There is still a chance that the storm may not hit Florida at all, and let us hope that is the case.

Sadly, there are some out there that actually want the storm to hit Florida. In fact, some leftists on Twitter are actually rooting for the storm to destroy President Trump’s Mar-a-Lago resort.

How can people be so cruel? When I first made the decision to jump into the world of politics, I thought that I would be able to avoid much of the nastiness, but I quickly found out that people are going to call me all sorts of names too. I am starting to understand why it is so hard to get good people to run for office, because there is a great price to be paid for putting yourself out there.

In this situation, my hope is that people down in south Florida won’t wait for a formal evacuation order and will start getting out well ahead of this storm. According to CNBC, Hurricane Irma could cause a quarter of a trillion dollars in damage if it is still a category 5 storm once it reaches Miami…

But if it stays a Category 5 and hits Miami, the $125 billion estimate could be doubled, making it by far the costliest storm ever. At $105.8 billion, Hurricane Katrina in 2005 is currently the leader, though Hurricane Harvey, which struck Houston two weeks ago, could well surpass that total.

Can you imagine what a quarter of a trillion dollars of damage would look like?

And let us not forget that another hurricane is following right behind Irma. This could easily become the worst hurricane season in all of U.S. history, and we still have many more weeks to go before the season is over.

Meanwhile, a disaster of another sort is unfolding out west. Large portions of Washington, Oregon, Idaho and Montana are literally on fire. One of the reasons why we are having such a huge problem with wildfires out west is because the federal government is not properly managing public lands. So when these fires hit areas controlled by the feds, they tend to burn more intensely than they should. I intend to fight to have control of those lands transferred to state governments, and I hope that you will support my efforts. Here in Idaho, it has been estimated that we have more than a trillion dollars worth of natural resources under our feet, and if we can get full control of our public lands it would end our state budget problems permanently.

Our world is increasingly becoming a very unstable place, and we are certainly seeing evidence of that this month.

Let us hope that things start settling down, but unfortunately I don’t think that is going to happen any time soon…

end

 

A good harbinger of things to come; Disney tumbles after the CEO cuts outlook;

(courtesy zerohedge)

 

 

Disney Tumbles After Bob Iger Cuts Outlook

Once upon a time, Disney used to be the hedge fund world’s media darling. Not today, however, when at the BofA Media Communications Conference in New York, Disney CEO Bob Iger slashed the company’s outlook and said earnings in 2017 will be “roughly in line” with last year, sending the stock tumbling as much as 3.9%.

The entertainment giant, which has been under pressure to improve profit at its TV business amid criticism it failed to anticipate the competitive threat posed by Netflix and overpaid for sports rights for its ESPN cable network, was expected to post EPS growth of 3.2%. It will be lucky to get 0.0%.

Not even Iger’s promise that the parks business is having a “tremendous” year, or his promise that fiscal year “will be stronger than 2017” did anything to dent the wholesale revulsion against Mickey Mouse.

Iger’s other comment, that among DIS’s key priorities include a succession process, will likely further add to near-term stock concerns.

The other announcements made by Iger today, which had zero impact on the stock, included:

  • ESPN app will offer a plus service for more programming, Disney’s
    Chief Executive Officer Bob Iger says at Bank of America conference.
  • ESPN app will have 10,000 new live sporting events
  • ESPN app will be “a sport marketplace platform”
  • Iger says Disney will talk about app pricing in early 2018
  • Iger sees Disney app being introduced internationally before in the U.S.
  • Distributors will be able to distribute future Disney apps
  • Iger says Disney’s direct to consumer app to debut in late 2019

Disney’s weakness has quickly translated to other large cap media stocks, which have quickly fallen in sympathy including CBS -1.7%, VIAB 1.4%, and FOXA -1.3%.

end

 

Are the walls closing in on Debbie Wasserman Schultz?

 

(courtesy zerohedge)

Did Imran Awan Turn On Wasserman Schultz? New Report Suggests He Led Police To Her Laptop

For months now various media outlets have speculated on whether Debbie Wasserman Schultz (DWS) and her now-indicted IT staffer may have colluded to conceal evidence potentially linked to the infamous ‘DNC hacks.’  While Schultz and the DNC have maintained that the hacks were orchestrated by Russians from a remote location, others have argued that the stolen documents must have been taken by an insider with direct access to DNC servers.  Meanwhile, the mystery surrounding the ongoing controversy has only been amplified by the DNC’s rather curious refusal to allow the FBI access to their servers after the supposed ‘attacks.’

But, according to a new report from The Daily Callereven if Awan was originally acting to protect/extort DWS, that may have all changed on April 6, 2017 when he seemingly led U.S. Capitol Police directly to her laptop.

A laptop that Rep. Debbie Wasserman Schultz has frantically fought to keep prosecutors from examining may have been planted for police to find by her since-indicted staffer, Imran Awan, along with a letter to the U.S. Attorney.

 

U.S. Capitol Police found the laptop after midnight April 6, 2017, in a tiny room that formerly served as a phone booth in the Rayburn House Office Building, according to a Capitol Police report reviewed by The Daily Caller News Foundation’s Investigative Group. Alongside the laptop were a Pakistani ID card, copies of Awan’s driver’s license and congressional ID badge, and letters to the U.S. attorney. Police also found notes in a composition notebook marked “attorney-client privilege.”

 

The laptop had the username “RepDWS,” even though the Florida Democrat and former Democratic National Committee chairman previously said it was Awan’s computer and that she had never even seen it.

 

The laptop was found on the second floor of the Rayburn building — a place Awan would have had no reason to go because Wasserman Schultz’s office is in the Longworth building and the other members who employed him had fired him.

DWS

 

Of course, DWS’s story on the now-infamous laptop has ‘evolved’ over the months…originally it was apparently her laptop back when she decided to threaten the U.S. Capitol Police Chief but later, after he stood his ground, DWS backtracked saying she had never seen the laptop and it never belonged to her.

Wasserman Schultz used a televised May 18, 2017 congressional hearing on the Capitol Police budget to threaten “consequences” if Chief Matthew Verderosa did not give her the laptop. “If a member loses equipment,” it should be given back, she said.

 

Verderosa told her the laptop couldn’t be returned because it was tied to a criminal suspect. Wasserman Schultz reiterated that, while Awan was a suspect, the computer should be returned because it is “a member’s … if the member is not under investigation.”

 

She changed her story two months later, claiming it was Awan’s laptop — bought with taxpayer funds from her office — and she had never seen it. She said she only sought to protect Awan’s rights. “This was not my laptop,” she said August 3. “I have never seen that laptop. I don’t know what’s on the laptop.”

For those who missed DWS threatening the cops for a laptop that apparently didn’t even belong to her…it’s good entertainment.

 

Of course, for a conniving person like Awan who has been accused of multiple counts of federal bank fraud, making the simple mistake of accidentally leaving critical evidence out in the open for all to see would seem unlikely.

The circumstances of the laptop’s appearance described in the police report suggest Wasserman Schultz was trying to keep the police from reviewing a laptop that Awan himself may have wanted them to find. The former phone booth room where police found the items is small, and there was no obvious reason to enter it.

 

Leaving important items there accidentally would seem extremely unlikely, according to Rep. Louie Gohmert, a Texas Republican, former prosecutor, and member of the House Judiciary Committee.

 

“Imran Awan is a calculating person who made great efforts to cover his tracks, both electronically and physically,” Gohmert told TheDCNF. “Placing that laptop with his personal documents, which may well incriminate him, those he worked for, or both, in the dead of night in a House office building, was a deliberate act by a cunning suspect, and it needs to be investigated.”

And then there is the simple question of why DWS has gone through the trouble of hiring lawyers to fight for a laptop that never belonged to her and could provide valuable evidence against a man who has been charged with a federal crime?

Even though the laptop was allegedly used only by an IT aide who worked for numerous members, Wasserman Schultz has hired an outside counsel, William Pittard, to argue that the laptop not be examined. Pittard argued that the speech and debate clause — which only protects a member’s information directly related to legislative duties — should prevent prosecutors from examining the laptop’s contents, TheDCNF has learned. Pittard did not respond to requests for comment.

 

Pittard, a partner with KaiserDillon, is the former acting general counsel of the House. Hiring an outside counsel to argue the speech and debate clause on behalf of Wasserman Schultz is highly unusual, because the general counsel of the House offers opinions on speech and debate issues for free.

So, what say you?  Giant ‘nothing burger’ or are the walls closing in on DWS?

end

 

the Debt Ceiling bill is passed by the Senate.  They will have until March to pass the next ceiling

 

(courtesy zero hedge)

Senate Passes Debt Ceiling/Govt Funding Deal: Here’s What Happens Next

Moments ago the Senate, as expected, passed the debt ceiling, government funding, hurricane aid deal, cobbled between Trump and the Democrats, to howls of protest from the GOP.

  • MAJORITY OF U.S. SENATE VOTES TO APPROVE $15.25 BILLION IN DISASTER AID, MEASURES TO FUND GOVT AND RAISE DEBT LIMIT THROUGH DEC. 8

As a result, the debt limit will be suspended until December 8 and and fund govt through Dec. 8; it also provides $15.25b in disaster funding for hurricane assistance.  A vote in the House is expected tomorrow (or perhaps today), where the bill will also pass: it will be interesting which Republicans vote against the Trump/Democratic proposal.

So what happens next?

Well, for one thing, the next “X-Date”, or tha day when the Treasury runs out of cash and uses up emergency measures, is not December 15 as some still erroneously believe (as explained last night), but sometime in the first quarter, perhaps as far ahead as August, although according to a just released analysts by Goldman, the net debt limit increase will be due March, meaning the US has just bought itself another 6 months before this week’s farce has to be repeated.

Logistics aside, and these are explained below, the question for Democrats is whether the 6 month debt-extension interval falls inside the 6 month extension period on DACA before Congress has to vote on whether or not to keep Dreamers in the US, a political “quid-pro-quo” in exchange for not shutting down the government. Should the debt ceiling negotiation fall outside the DACA term, it would result in another violent breach between Trump and the Democrat leadership.

Political maneuvering around DACA aside, what’s next for capital markets? Here are the details from Goldman’s chief political analyst Alec Phillips:

With the text of the final version of the Senate amendment now posted, we estimate the next debt limit increase will be necessary by March, rather than between March and August as we noted earlier today.

 

  1. The Senate Appropriations Committee has posted the final version of the fiscal amendment expected to be voted on tomorrow by the Senate. Contrary to an earlier version that had been published by various media outlets, the final version does not allow the Treasury to keep a $150bn cash balance at the time the debt limit is reinstated. Without this, we estimate the debt limit will need to be raised by March.
  2. Two unknowns could affect this timing somewhat, beyond the usual fluctuations in tax receipts. First, there is some question as to whether the Treasury can fully replenish the “extraordinary measures” it uses to preserve borrowing authority once the debt limit is reinstated. Since those measures have essentially been exhausted ahead of the current deadline, with the reinstatement coming so soon, it is possible that the Treasury might not have time to replenish them, and that the amount of extraordinary measures could be smaller than normal. This is hard to evaluate but we note that after the last debt limit increase, the Treasury notified Congress that about 2/3 of the total amount of extraordinary measures normally available had been replenished roughly one month after the debt limit was suspended, and that they were fully replenished roughly three months after the last suspension. Since the debt limit suspension lasts roughly three months, we assume that most of the typical amount of extraordinary measures will be available to the Treasury.
  3. Second, it is possible that outlays related to Hurricane Harvey, and potentially Hurricane Irma or other storms, could increase the deficit in the near term and bring the date forward somewhat. We note that based on the experience in prior hurricanes, spending tends to be spread over many months, so only a fraction of the headline figures discussed would be spent after the debt limit is reinstated in December 2017 and March 2018. For reference, it would probably take additional spending of $30bn or more per month during that period to pull the deadline forward from March to February, all other things being equal.
  4. Regarding timing of the legislation, the Senate is expected to vote tomorrow morning [it just passed], followed by the House tomorrow afternoon. Many Republican lawmakers have expressed opposition to this agreement, but at this point this does not appear to be an obstacle to passage. That said, changes are clearly still possible related to the substance of the agreement or the probability of passage, so changes to the outlook for the debt limit are still possible.

 

END

 

An excellent commentary tonight from Dave Kranzler on the upcoming run on both banks and pension funds:

 

(courtesy Dave Kranzler/IRD)

The Coming Run On Banks And Pensions

“There are folks that are saying you know what, I don’t care, I’m going to lock in my retirement now and get out while I can and fight it as a retiree if they go and change the retiree benefits,” he said.  – Executive Director for the Kentucky Association of State Employees,  Proposed Pension Changes Bring Fears Of State Worker Exodus

The public awareness of the degree to which State pension funds are underfunded has risen considerably over the past year.  It’s a problem that’s easy to hide as long as the economy is growing and State tax receipts grow.  It’s a catastrophe when the economic conditions deteriorate and tax revenue flattens or declines, as is occurring now.

The quote above references a report of a 20% jump in Kentucky State worker retirements in August after it was reported that a consulting group recommended that the State restructure its State pension system.   I personally know a teacher who left her job in order to cash completely out of her State employee pension account in Colorado (Colorado PERA).  She knows the truth.

But the problem with under-funding is significantly worse than reported.  Pensions are run like Ponzi schemes.  As long as the amount of cash coming in to the fund is equal to or exceeds beneficiary payouts, the scheme can continue.   But for years, due to poor investment decisions and Fed monetary policies, beneficiary payouts have been swamping investment returns and fund contributions.

Pension funds have notoriously over-marked their illiquid risky investments and understated their projected actuarial investment returns in order to hide the degree to which they are over-funded.  Most funds currently assume 7% to 8% future rates of return. Unfortunately, the ability to generate returns like that have been impossible with interest rates near zero.

In the quest to compensate for low fixed income returns, pension funds have plowed money into stocks, private equity funds and illiquid and very risky investments,  like subprime auto loan securities and commercial real estate.   Some pension funds have as much as 20% of their assets in private equity.  When the stock market inevitably cracks, it will wipe pensions out.

As an example of pensions over-estimating their future return calculations, the State of Minnesotaadjusted the net present value of its future liabilities from 8% down to 4.6% (note:  this is the same as lowering its projected ROR from 8% to 4.6%).   The rate of under-funding went from 20% to 47%.

I can guarantee you with my life that if an independent auditor spent the time required to implement a bona fide market value mark-to- market on that fund’s illiquid assets, the amount of under-funding would likely jump up to at least 70%.  “Bona fide mark-to-market” means, “at what price will you buy this from me now with cash upfront?”

For instance, what is the true market price at which the fund could sell its private equity fund investments?   Harvard is trying to sell $2.5 billion in real estate and private equity investments.   The move was announced in May and there have not been any material updates since then other than a quick press release in early July that an investment fund was looking at the assets offered.  I would suggest that the bid for these assets is either lower than expected or non-existent other than a pennies on the dollar  “option value” bid.

At some point current pension fund beneficiaries are going to seek an upfront cash-out. If enough beneficiaries begin to inquire about this, it could trigger a run on pensions and drastic measures will be implemented to prevent this.

Similarly, per the sleuthing of Wolf Richter, ECB is seeking from the European Commission the authority to implement a moratorium on cash withdrawals from banks at its discretion. The only reason for this is concern over the precarious financial condition of the European banking system.  And it’s not just some cavalier Italian and Spanish banks.  I would suggest that Deutsche Bank, at any given moment, is on the ropes.

But make no mistake. The U.S. banks are in no better condition than their European counter-parts.  If Europe is moving toward enabling the ECB to close the bank windows ahead of an impending financial crisis, the Fed is likely already working on a similar proposal.

All it will take is an extended 10-20% draw-down in the stock market to trigger a massive run on custodial assets – pensions, banks and brokerages.  This includes the IRA’s.  I would suggest that one of the primary motivations behind the Fed/PPT’s  no-longer-invisible hand propping up the stock and fixed income markets is the knowledge of the pandemonium that will ensue if the stock market were allowed to embark on a true price discovery mission.

Like every other attempt throughout history to control the laws of economics and perpetuate Ponzi schemes, the current attempt by Central Banks globally will end with a spectacular collapse.   I would suggest that this is one of the driving forces underlying the repeated failure by the western Central Banks to drive the price of gold lower since mid-December 2015.   I would also suggest that it would be a good idea to keep as little of your wealth as possible tied up in banks and other financial “custodians.”   The financial system is one giant “Roach Motel” – you check your money in but eventually you’ll never get it out.

***

end

 

that about does it for tonight

 

 

I will see you FRIDAY  night

 

Harvey.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: