Sept 8/Another mini flash crash on gold and silver fails again/Gold still up $1.10 but silver retreats by one cent/Israel strikes into Syria destroying a chemical factory but does so on the Lebanese side of the border./Mexico, the largest supplier of silver to the USA has an 8.1 magnitude earthquake/Irma heading into Florida as it’s path will divide the state in half guaranteeing all major cities in Florida will be hit as well as the coast of Georgia and South Carolina/final draft

GOLD: $1346.60 UP   $1.10

Silver: $18.03  DOWN 1 CENT(S)

 

Closing access prices:

 

Gold $1346.50

silver: $17.97

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: $1355.02 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1348.95

PREMIUM FIRST FIX:  $6.07

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1353.46

NY GOLD PRICE AT THE EXACT SAME TIME: $1353.50

Premium of Shanghai 2nd fix/NY:$0.00

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1350.90

NY PRICING AT THE EXACT SAME TIME: $1351.15

LONDON SECOND GOLD FIX  10 AM: $1346.25

NY PRICING AT THE EXACT SAME TIME. 1346.91

For comex gold:

SEPTEMBER/

NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 0 NOTICE(S) FOR  0  OZ.

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

For silver:

SEPTEMBER

 570 NOTICES FILED TODAY FOR

2,850,000  OZ/

Total number of notices filed so far this month: 4,088 for 20,440,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

 

 

Friday’s are very good for the bankers to orchestrate a raid due to the fact that the physical time zones ( London and China) have already been put to bed and the crooks do not have to worry about contracts sold short being exercised for deliver.
Please do not worry: gold and silver will be robust in price to the positive starting Monday morning after we witness the devastation of Irma.

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE BY HUGE 3010 contracts from  184,142 UP TO 187,152 WITH THE GOOD SIZED GAIN IN PRICE THAT SILVER UNDERTOOK IN YESTERDAY’S TRADING (UP 18 CENT(S). WITH YESTERDAY’S FAILED FLASH CRASH, MORE NEWBIE SILVER LONGS  BECAME EMBOLDENED TO TAKE ON THE BANKERS.   ONCE SILVER CLEARED THE 18 DOLLAR HURDLE IT WAS CLEAR SAILING WITH THE NEWBIE LONGS, WITH ADDED VIGOUR, TAKING ON THE BANKERS  WHO WITH THEIR GREAT DAUNTING CRIMINAL SPIRIT SUPPLIED THE SHORT PAPER.

RESULT: A GOOD RISE IN OI COMEX  WITH THE 18 CENT PRICE RISE. 

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.936 BILLION TO BE EXACT or 134% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 570 NOTICE(S) FOR 2,850,000  OZ OF SILVER

In gold, the open interest ROSE BY A GIGANTIC 13,263 CONTRACTS WITH THE GOOD SIZED GAIN  in price of gold ($4.35 GAIN YESTERDAY). The new OI for the gold complex rests at 579,581.

AGAIN,THE NUMBER OF  NEWBIE SPECS  ENTERING THE GOLD ARENA INCREASES WITH THE COMMERCIALS AGAIN SUPPLYING THE NECESSARY PAPER. THE FAILED MINI FLASH CRASH YESTERDAY, NO DOUBT EMBOLDENED MORE SPECS TO ENTER THE GOLD ARENA TO WHICH THE BANKERS WERE VERY HAPPY TO SUPPLY.

Result: A HUGE SIZED GAIN IN OI WITH THE RISE IN PRICE IN GOLD ($4.35). THE COMMERCIALS SUPPLIED THE NECESSARY SHORT PAPER. MORE NEWBIE LONGS ENTERED THE COMEX CASINO WILLING TO TAKE ON THE BANKERS ONCE THE SILVER RESISTANCE WAS PIERCED AND THAT EMBOLDENED THEM FURTHER.  THE BANKERS WERE MORE THAN HAPPY TO COMPLY WITH THE ADDED SHORT PAPER. 

we had: 0 notice(s) filed upon for NIL oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:

Tonight , we had a tiny  change in gold inventory: a withdrawal of .34 tonnes which no doubt would be used to pay for fees

Inventory rests tonight: 836.87 tonnes

SLV

Today: no change in inventory.

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 3,001 contracts from 184,142  UP TO 187,152(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH YESTERDAY’S 18 CENT GAIN 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 WITH RECKLESS ABANDON ESPECIALLY AFTER YESTERDAY’S FAILED RAID. THIS TIME, THE BANKERS HAD NO CHOICE BUT TO SUPPLY THE NECESSARY SHORT PAPER.

RESULT:  A  HIGHER OI AT THE COMEX WITH THE RISE IN PRICE OF 18 CENTS.  BANKERS SUPPLIED THE NECESSARY  SHORT PAPER AND WERE NOT HAPPY CAMPERS WITH THE FAILED RAID. SILVER BROKE THROUGH THE  18.00 DOLLAR RESISTANCE AND NEVER LOOKED BACK.  ANOTHER FLASH CRASH ORCHESTRATED BY OUR BANKER FRIENDS FAILED AGAIN TODAY.

(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 THURSDAY night/FRIDAY morning: Shanghai closed DOWN 0.25 POINTS OR 0.01%   / /Hang Sang CLOSED UP 145.55 POINTS OR 0.53%/ The Nikkei closed UP 145.55 POINTS OR 0.63%/Australia’s all ordinaires CLOSED DOWN 0.25%/Chinese yuan (ONSHORE) closed UP at 6.4784/Oil UP to 48.95 dollars per barrel for WTI and 54.66 for Brent. Stocks in Europe OPENED GREEN EXCEPT LONDON. Offshore yuan trades  6.4930 yuan to the dollar vs 6.4920 for onshore yuan. NOW THE OFFSHORE MOVED MUCH WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN MUCH STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LITTLE 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/

b) REPORT ON JAPAN

c) REPORT ON CHINA

i)The sharp rise in the yuan against the dollar is causing Beijing fits.  They want a lower Yuan and so they have now given speculators the green light to short the currency

( zerohedge)

ii)One by one, the players who have shorted the yuan are throwing in the towel.  Now Corriente Advisors’ Mark Hart ends his 7 yr bet on a massive yuan devaluation.

( zero hedge)

 

4. EUROPEAN AFFAIRS

Draghi floats a trial balloon giving 4 scenarios as to how they will taper.  The market responded by driving the Euro higher still

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

ISRAEL/SYRIA/RUSSIA

Israel strikes into Syria but did not invade Syrian territory.  They fired missiles at a chemical factory from inside Lebanon.  We now await Syria/Russia’s response:

(zero hedge)

6 .GLOBAL ISSUES

i)CANADA

Toronto home prices burst as this market enters a bear market.

( WolfRichter/WolfStreet)

ii)MEXICO

Wow! this will hurt Mexico: a huge 8.1 magnitude earthquake in Southern Mexico.

(courtesy zerohedge)

7. OIL ISSUES

( zerohedge)

iiRig counts slump and now we are experiencing a drop in USA crude production(courtesy zero hedge)

8. EMERGING MARKET

VENEZUELA

9.   PHYSICAL MARKETS

i)Bill Murphy discusses how the suppression is about to end

( GATA)

ii)Gold miners in Australia are not happy campers as the government breaks a royalties promise by doubling them

(Paul Garvey/the Australian/gata)

iii)Maduro states that he will shun the USA dollar in favour of the yuan plus other currencies.  The problem is that it is too late for this socialistic country

( Reuters/GATA)

iv)Bitcoin crashes on massive volume as China plans to shut down local exchanges.  China prefers gold and does not want another competing currency

( zero hedge)

 

v)China has not let up in its pursuit of gold.  This month they added 161 tonnes and for the past 12 months they have demanded (SGE=withdrawn) 2050 tonnes.  If you add India’s demand of 1000 tonnes, these two countries take up all of gold’s demand.

( Lawrie Williams/Sharp’s Pixley)

10. USA Stories

i)Wholesale inventory rise but sales drop.  This may temporarily help in Q3 but they will pay for it in Q$

( zerohedge)

ii)The House passes the debt ceiling government funding by suspending it for another 3 months.  However they will probably have 6 months to pass another debt ceiling limit.  Harvey relief funds were also passed

( zerohedge)

iii)Thursday night:

40% of all gas stations are now out of gas

( zero hedge)

iv)Thursday night:  

Georgia and South Carolina will also be hit with storm surges and flooding

(courtesy zerohedge)

v)Friday morning;

Irma is now a Cat 4 and heading for the Florida keys and then up directly dividing east and west Florida.  Just about all major Floridian cities will be hit hard.  Millions will be without power.

( zerohedge)

vi)Markets will not like this.  Now Trump hates Gary Cohn who may be pressured to leave the White House.  So not only will he lose the chance at becoming Fed Chairman, he will not have the ear of the President

( zero hedge)

vii)Absolutely brilliant!! 143 million USA social security numbers has been hacked at Equifax.  Also included are credit cards  and driving licences etc. Lawsuits will start flying!

(courtesy zero hedge)

 

vii b) Simon Black discusses the above fiasco

( Simon Black/SovereignMan)

viii)The Amazon effect strikes again after Target announces cuts to thousands of items
( zero hedge)

ix)You have to scratch your head on the following: how did 102 billion in credit card debt, student and auto loans just disappear.  Remember that this is an asset on somebody’s books:

( zerohedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY A HUGE 13,263 CONTRACTS UP to an OI level of 579,581 WITH THE FAIR SIZED GAIN IN THE PRICE OF GOLD  ($4.35 GAIN IN YESTERDAY’S trading). This time 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 longs have reacted also to the failed mini crash that the bankers orchestrated yesterday. We are getting closer to record levels of open interest in gold, despite gold being 500 dollars cheaper.

Result: a  MONSTROUS SIZED open interest INCREASE with an good sized RISE  in the price of gold.  

The new non active September contract month saw it’s OI RISE BY 2 contracts UP to 832.   We had 2 notices filed on yesterday so we GAINED 4 contracts or an additional 400 oz will stand AND 0 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 GAIN of 261 contracts UP to 45,150.

The November contract saw A GAIN OF 31 contracts UP to 187.

The very big active December contract month saw it’s OI GAIN 12,081 contracts UP to 456,876.

We had 0 notice(s) filed upon today for  NIL oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
And now for the wild silver comex results.  Total silver OI ROSE BY A CONSIDERABLE 3,010 CONTRACTS FROM 184,142 UP TO 187,152 WITH YESTERDAY’S  18 CENT GAIN IN PRICE. NEWBIE LONG SPECS CERTAINLY  BECAME MORE EMBOLDENED TO TAKE TO TAKE ON SOME OF OUR BANKERS ONCE SILVER PIERCED THE 18 DOLLARS BARRIER.. THUS NEWBIE LONGS ENTERED THE ARENA WITH THE BANKERS SUPPLYING THE NECESSARY PAPER. 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).
RESULT:  A GOOD SIZED INCREASE IN OI AT THE COMEX WITH A 18 CENT GAIN 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 AS THEY COULD NOT CAUSE ANY SILVER LEAVES (OI) TO FALL!!. SILVER NOW ADVANCES FROM THE 18 DOLLAR RESISTANCE/SUPPORT LEVEL. IT WITHHELD ANOTHER FLASH CRASH ATTEMPT TO DRIVE SILVER’S PRICE BELOW $18.00

We are now in the active contract month of September (and the last active month until December). Today we witness Sept. OI RISE by 54 contacts UP to 1620. We had 440 notices filed yesterday, so we again gained A MONSTROUS 494 contracts or an additional 2,470,000 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 GAINED 23 contacts UP TO 972. November saw a GAIN of 1  contract(s) and thus ADVANCING to 33. After November, the NEXT big active contract month is December and here the OI GAINED 2259 contracts UP to 162,815 contracts.

We had 570 notice(s) filed for  2,850,000 oz for the SEPT. 2017 contract

VOLUMES: for the gold comex

ESTIMATED VOLUME TODAY: 382,527 CONTRACTS WHICH IS EXCELLENT

YESTERDAY’S confirmed volume was 381,576 which is excellent

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for SEPTEMBER

 Sept. 8/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
1991.400 oz
Brinks
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
 nil
No of oz served (contracts) today
 
0 notice(s)
NIL OZ
No of oz to be served (notices)
832 contracts
(83200 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   9,096.6  oz
Today we HAD  0 kilobar transaction(s)/ 
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  0 oz
we had 0 customer deposit(s):
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
 i) out of Brinks: 1,991.4 oz
total customer withdrawals; 1991.4 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 0  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. (832 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 88,300  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 + {(832)OI for the front month  minus the number of  notices served upon today (0) x 100 oz which equals 88,300 oz standing in this  active delivery month of SEPTEMBER  (2.746 tonnes)
We GAINED 4 contracts or 400 oz will stand and 0 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 270.44 tonnes for a  loss of 33  tonnes over that period.  Since August 8/2016 we have lost 34 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  84 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE AUGUST DELIVERY MONTH
September initial standings
 Sept 8  2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
20,050.02 oz
Scotia
Deposits to the Dealer Inventory
nil  oz
Deposits to the Customer Inventory 
 777,031.940 oz
 HSBC
No of oz served today (contracts)
570 CONTRACT(S)
(2,850,000 OZ)
No of oz to be served (notices)
1050 contracts
(5,250,000 oz)
Total monthly oz silver served (contracts) 4088 contracts (20,440,000 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 3,993,139.3 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 1 customer withdrawal(s):
i) Out of Scotia:  20,050.02 oz
TOTAL CUSTOMER WITHDRAWALS: 20,050.02 oz
We had 1 Customer deposit(s):
i) Into HSBC:  1,399,888.79 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: 1,399,888.79 oz
 
 we had 0 adjustment(s)
The total number of notices filed today for the SEPTEMBER. contract month is represented by 570 contract(s) for 2,850,000 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 4088 x 5,000 oz  = 20,440,000 oz to which we add the difference between the open interest for the front month of SEPT (1620) and the number of notices served upon today (570) x 5000 oz equals the number of ounces standing.
 

 

.
 
Thus the INITIAL standings for silver for the SEPTEMBER contract month:  4088 (notices served so far)x 5000 oz  + OI for front month of SEPTEMBER(1620 ) -number of notices served upon today (570)x 5000 oz  equals  25,690,000 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. (ON AUGUST 31 (FIRST DATE NOTICE) WE HAD 20.15 MILLION OZ STAND. THUS IN THE FIRST 8 DAYS OF SEPTEMBER, WE HAVE HAD A HUGE INCREASE OF  5,54 MILLION OZ STAND FOR DELIVERY AS DEALERS JUMP QUEUE TRYING TO FIND THE NECESSARY SILVER TO SUPPLY TO OUR LONGS.)
 
WE HAD AN INCREASE OF 494 CONTRACTS OR AN ADDITIONAL 2,470,000 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.SOMEBODY BIG WANTS SILVER IN A VERY BIG WAY.
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: 85,708 CONTRACTS WHICH IS  HUGE
YESTERDAY’s  confirmed volume was 93,312 contracts which is GIGANTIC
YESTERDAY’S CONFIRMED VOLUME OF 93,312 CONTRACTS WHICH EQUATES TO 466 MILLION OZ OF SILVER OR 67% 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:   216.675 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 7.3 percent to NAV usa funds and Negative 7.0% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.0%
Percentage of fund in silver:38.0%
cash .+0.0%( Sept 8/2017) 
2. Sprott silver fund (PSLV): STOCK   NAV RISES TO -0.16% (Sept 8/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.48% to NAV  (Sept 8/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -0.16%/Sprott physical gold trust is back into NEGATIVE/ territory at -0.48%/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 8/we had a tiny withdrawal of .34 tonnes and probably that would be to pay for fees like insurance etc.

 

Inventory rests at 836.87 tonnes

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 8 /2017/ Inventory rests tonight at 836.87 tonnes
*IN LAST 228 TRADING DAYS: 104.23 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 165 TRADING DAYS: A NET  53.20 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY.
*FROM FEB 1/2017: A NET  21.81 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Sept 8/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

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 8.2017:

Inventory 327.088  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.40%
  • 12 Month MM GOFO
    + 1.53%
  • 30 day trend

end

 

At 3:30 pm we receive the COT report which gives us position levels of our major players. First let us head over and see what the gold COT offers us tonight:

 

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
336,073 90,775 54,858 125,145 386,952 516,076 532,585
Change from Prior Reporting Period
17,190 2,939 877 6,115 19,893 24,182 23,709
Traders
188 102 76 53 64 272 216
 
Small Speculators  
Long Short Open Interest  
50,741 34,232 566,817  
3,760 4,233 27,942  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, September 5, 201

Our large speculators

those large specs that have been long in gold added a large 17,190 contracts to their long side.

those large specs that have been short in gold added 2939 contracts to their short side

 

large specs go net long by 14,000 contracts.

Our commercials

our crooked commercials that have been long in gold added 6115 contracts to their long side.

those commercials that have been short in gold added 19,893 contracts to their short side.

commercials go net short by 13,900 contracts.

Our small speculators

those small specs who have been long in gold added 3760 contacts to their long side’

those small specs who have been short in gold added 4233 contracts to their short side.

Conclusion:  the boat is getting very lopsided and you can bet the farm that the crooks are going to orchestrate another huge raid.

 

AND NOW FOR OUR SILVER COT

Our large speculators

Those large specs who have been long in silver added 3444 contracts to their long side.

those large specs who have been short in silver covered a huge 7082 contracts from their short side.

large specs go net long by 10400 contracts.

Our commercials

those commercials who have been long in silver pitched 3990 contracts from their long side.

those commercials who have been short in silver added 7110 contracts to their short side.

commercials go net short by 11,000 contracts.

 

Our small speculators

those small specs who have been long in silver added 298 contracts from their long side

those small specs who have been short in silver covered 276 contracts from their short side.

 end

Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

 

Gold Has 2% Weekly Gain,18% Higher YTD – Trump’s Debt Ceiling Deal Hurts Dollar

– Gold hits $1,355/oz as USD at 32-month low -concerns about Trump, US economy
– Silver and platinum 2.3% and 1.2% higher in week; palladium 3% lower
– Euro Stoxx flat for week – S&P 500, Nikkei down 0.65% and 2.2%
– Geo-political concerns including North Korea, falling USD push gold 2.1% in week
– Gold prices reach $1,355 this morning following Mexico earthquake

– Safe haven demand sees gold over one year high, highest since August 2016
– Silver touches $18.24 – highest level since April 2017
– Goldman, BoAML and Deutsche Bank all warn re markets this week

Editor: Mark O’Byrne

Gold price Sept 2017

This morning the earthquake in Mexico likely contributed to gold eking out further gains to $1,355/oz, its highest since August 2016. The gold price is now up 2.1% for the week.

Sadly some of the short-term performance in both gold and silver is because of devastating events around the globe. From hurricanes and earthquakes to potential nuclear wars.

However, as explained earlier this week, while gold is reacting to geopolitical events in the short term, the real driver of gold will be the impact of these events which is government money printing and debasement of the currency. Only this week, Trump extended the debt ceiling – with the devastation of the floods in Texas and Hurricane Irma the latest reason to increase the US national debt.

Is the Euro too strong?

Yesterday the ECB decided to leave interest rates unchanged. On the back of the decision, the euro rose to $1.20 pushing the US dollar to a 32-month low. Draghi did not express concern over the currency’s strength.

Some indication was given as to the when the ECB would taper asset purchases – October is expected.

Relative to gold and silver in the last week, the euro has underperformed.

No increase in the US rates or the dollar

Meanwhile in the US weak economic data and events in Texas and Florida have likely pushed any chance of further rate hikes back. Data yesterday showed weekly jobless claims rose this week to their highest since 2015. Hurricane Harvey likely contributed to this and it is likely the start of a trend and will likely get worse.

Odds of the increase happening this year have slipped from 40% to 29%. For many a rate hike would be bad news for gold and silver prices. However so far this year this has not proven to be as damaging as some bears expected. Indeed, as we have shown with data and charts many times, rising interest rates generally corresponds with rising gold prices – as seen in the 1970s and from 2003 to 2006.

Trump’s deal-making and money printing 

This week President Trump struck a short-term deal with the Democrats in order to avoid a showdown over the US debt ceiling. Many had been worried that the issue would be dragged out by both parties. Republicans were reportedly furious at Trump’s decision.

As a result gold fell back somewhat after a stellar start to the week. Many market participants had expected the debt ceiling issue to be a far greater issue than it turned out to be. Of course, it still is a big issue as Trump and the Democrats have merely pushed the can down the road, but for now this is something they (and markets) will likely not worry about too much.

There are concerns over the discontent and discord in the White House which has still not passed any meaningful legislation since Trump’s inauguration. This is providing greater support for gold which appears to be gaining strength due to issues in Washington.

Is it about geopolitical risks?

Short-term hikes in the gold and silver price are thanks to expected increases in safe haven demand considering events such as North Korea, potential genocide in Myanmar, Venezuelan economic crisis and of course, extreme weather events and now a massive earthquake.

However these are not necessarily the long-term drivers of the gold and silver price. As we explained earlier this week. It is most likely down to concerns over governments and their monetary policies.

Trump and his government are of course creating geopolitical risks, however it is the fact that his policis are (and will continue) to result in currency debasement that will provide longer-term support for gold.

Goldman Sachs’ analysts suggested this week that gold’s rise to one-year highs is thanks to perceived pro-growth promise from Trump which are currently floundering but will result in more money creation. His to-do (and expense) list has also grown as a result of hurricanes in the country.

Conclusion 

We should rightly pay attention to events happening around the world. They are devastating the lives of so many people.

However, when it comes to our portfolios we should not look to the pattern of a hurricane or the sabre-rattling of a dictator to justify our decisions to hold certain assets.

Instead we need to switch off the 23-hour rolling news and ask ourselves what this means for the long-term.

All of it whether war, recovery from an environmental disaster or peacekeeping operations in Myanmar means spending. Money does not grow on trees and no Western government has any money left … just debt and lots of it.

Currency debasement continues on a massive scale globally. This in time will have devastating consequences for our economies and our digital and paper savings and investments. Investors should prepare their portfolios in the same way one would for an environmental disaster or war – with good, solid insurance.

News and Commentary

Gold climbs to 1-year high as U.S. dollar sees fresh weakness (MarketWatch.com)

Gold rises to one-year high amid sluggish dollar (Reuters.com)

Dollar Tumbles as Yen, Euro Rally on Irma, ECB (Bloomberg.com)

ECB keeps door open to even more stimulus (Reuters.com)

Hurricane Harvey lifts U.S. jobless claims to more than two-year high (Reuters.com)

Source: Bloomberg

Yen Losing its Haven Sheen to Gold on North Korea (Bloomberg.com)

Gold to reach $1400 on dollar weakness and North Korea (CNBC.com)

Flight to quality may see further gains for gold bullion (CNBC.com)

Gold prices boom as fears grow over North Korea nuclear crisis (Independent.co.uk)

Own Gold for Long Term as Fiat Money is Doomed – Frisby (MoneyWeek.com)

Gold Prices (LBMA AM)

08 Sep: USD 1,350.90, GBP 1,026.82 & EUR 1,120.71 per ounce
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

Silver Prices (LBMA)

08 Sep: USD 18.21, GBP 13.80 & EUR 15.09 per ounce
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


Recent Market Updates

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

END

 

China has not let up in its pursuit of gold.  This month they added 161 tonnes and for the past 12 months they have demanded (SGE=withdrawn) 2050 tonnes.  If you add India’s demand of 1000 tonnes, these two countries take up all of gold’s demand.

(courtesy Lawrie Williams/Sharp’s Pixley)

LAWRIE WILLIAMS: Chinese gold demand heading for 2,000 tonnes this year

Chinese gold demand this year, as represented by withdrawals from the Shanghai Gold Exchange (SGE), are currently 4.5% up on a year ago and if this margin is maintained through the remainder of the year, the full year figure could total around 2,050-2,060 tonnes as against 1,970 tonnes in 2016. However this would still be well down on the record 2015 year when SGE withdrawals totaled 2,596 tonnes for the full year.

In the latest full month (August), SGE withdrawals came in at 161.41 tonnes compared with 144.44 tonnes during the same month a year ago.

As we have pointed out before it is a contentious point as to whether SGE withdrawals are actually a measure of total Chinese gold demand. The various major gold-focused consultancies come up consistently with far lower figures, but regardless, DSG withdrawal figures have to be a year-on- year measure of the overall strength of Chinese gold demand given the lack of other published official data. We would also emphasise that the published SGE withdrawal figures come out far closer to known Chinese gold imports (as published by countries which break these figures down – notably Hong Kong, Switzerland, the U.K., the U.S.A. and Australia) plus China’s own gold production of around 450 tonnes. If one adds in a couple of hundred tonnes for scrap conversion one comes up with gold flows absorbed by China as being very close to the SGE withdrawal totals – something which seems to be ignored by the consultancies which seem to have a limited definition of demand.

See below a table of month by month gold withdrawal figures for the past three years as published by the SGE. In our view they are certainly the best measure of actual Chinese gold absorption available given the country does not allow gold to be exported..

Table: SGE Monthly Gold Withdrawals (Tonnes)

Month 2017 2016 2015 % change 2016-2017 % change 2015-2017
January 184.41 225.08 255.42 – 18.1% -27.8%
February* 148.24 107.60 156.36 +37.8% -5.2%
March 192.25 183.24 213.35 +4.9% -9.9%
April 165.78 171.40 195.45 -3.3% -15.2%
May 138.08 147.28 162.15 -6.2% -14.8%
June 155.51 138.51 195.67 +12.3% -20.5%
July 144.71 117.58 285.50 +23.1% -49.3%
August 161.41 144.44 265.27 +11.7% -39.2%
September 170.90 259.98
October 153.25 176.29
November 214.72 202.71
December 196.37 228.21
Year to date 1290.39 1235.13 1729.17 + 4.5% – 25.4%
Full Year 1,970.37 2,596.37

Source: Shanghai Gold Exchange, Lawrieongold.com

So what does all this mean in terms of global gold demand. With some estimates suggesting that Indian demand may be returning to previous levels, and certainly substantially higher than a year ago, China and India between them will account for around 90% of global new mined gold supply – and at long last this latter figure is beginning to turn down. Peak gold appears at last to be with us having been predicted to come about ever since the gold price saw its huge turndown in 2011/12. Major new discoveries have been few and far between and the big new mines which were in the development pipeline back then are now in production, while older operations are seeing falling grades and diminishing output. The lower gold prices of the past five to six years saw gold exploration fall and capital for big new projects extremely difficult to raise so the industry may see a slow production decline for many years to come.

A rising gold price – it breached the $1,350 level overnight last night – is not necessarily a panacea. It may lead to a pick up in exploration but the development time for a new mine from discovery to production nowadays is probably 10 years plus for a project of any significant size. Meanwhile a higher gold price can prompt miners to return to mining lower grades to extend mine lives – which itself leads to lower metal production. We are thus in something of a slow downward gold production spiral, while demand in Asia and the Middle East in particular is running strong. A pick up in American and European demand in particular, which appears to be beginning to happen, could put increased pressure on the gold price and certainly puts $1,400 in its sights by the end of the year.

There are moves to keep the gold price under control, but the lower dollar index is seeing the price rise in dollar terms at least, and it is the dollar price which the markets look at. With the dollar index falling below 92 today, gold could see further rises as it does its job in wealth preservation.

08 Sep 2017

-END-

 

Bill Murphy discusses how the suppression is about to end

(courtesy GATA)

Events converging against gold and silver suppression, GATA chairman says

 Section: 

11:19a ET Thursday, September 7, 2017

Dear Friend of GATA and Gold:

GoldSeek Radio’s Chris Waltzek today interviews GATA Chairman Bill Murphy, who says events are converging to challenge the suppression of gold and silver prices by central banks and bullion banks. The interview is 12 minutes long and can be heard at GoldSeek Radio here:

http://radio.goldseek.com/nuggets.php

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

end

Gold miners in Australia are not happy campers as the government breaks a royalties promise by doubling them

(courtesy Paul Garvey/the Australian/gata)

Gold miners take hit as Western Australian government breaks royalties promise

 Section: 

By Paul Garvey
The Australian, Sydney
Thursday, September 7, 2017

Western Australia’s gold miners will cop a 50 percent hike in gold royalties under new measures announced by the state’s government today.

Treasurer Ben Wyatt revealed that the state’s gold producers would pay a 3.75 percent royalty, up from the existing 2.5 percent, as part of efforts to bring the state’s budget back under control.

The state’s gold miners will also be hit by a hike in payroll tax, which will apply to the biggest 1,200 or so companies in the state.

Mr. Wyatt said the measures were likely to cost the miners an extra $20 per ounce of production and will deliver the state an additional $392 million in revenue over the forward estimates. …

The gold royalty hike represents a broken promise for Western Australian Premier Mark McGowan, who while in opposition had strenuously argued against the exact same royalty rise when it was proposed by then-Premier Colin Barnett. …

… For the remainder of the report:

http://www.theaustralian.com.au/business/mining-energy/gold-miners-to-ta…

 end
Maduro states that he will shun the USA dollar in favour of the yuan plus other currencies.  The problem is that it is too late for this socialistic country
(courtesy Reuters)

Venezuela’s Maduro says he will shun U.S. dollar in favor of yuan, others

 Section: 

From Reuters
Thursday, September 7, 2017

CARACAS — Venezuelan President Nicolas Maduro said on Thursday his cash-strapped country would seek to “free” itself from the U.S. dollar next week, using the weakest of two official foreign exchange regimes and a basket of currencies.

Maduro was refering to Venezuela’s “DICOM” official exchange rate in which the dollar buys 3,345 bolivars, according to the central bank.

At the strongest official rate, one dollar buys just 10 bolivars, but on the black market the dollar fetches 20,193 bolivars, a spread versus the official rate that economists say has fostered corruption.

A thousand dollars of local currency bought when Maduro came to power in 2013 would now be worth $1.20.

“Venezuela is going to implement a new system of international payments and will create a basket of currencies to free us from the dollar,” Maduro said in an hours-long address to a new legislative superbody, without providing details of the new mechanism.

“If they pursue us with the dollar, we’ll use the Russian ruble, the yuan, yen, the Indian rupee, the euro,” Maduro said. …

… For the remainder of the report:

https://www.reuters.com/article/us-venezuela-forex/venezuelas-maduro-say…

end

Bitcoin crashes on massive volume as China plans to shut down local exchanges.  China prefers gold and does not want another competing currency

(courtesy zero hedge)

Bitcoin Crashes On Massive Volume As China Plans To Shut Local Exchanges

Having bounced back dramatically from the 20% plunge following China’s ban of ICOs, Bitcoin is getting battered again this morning on very heavy volume as Caixin reports Chinese authorities plan to shut local Bitcoin exchanges.

Via Google Translate

The supervisory authority has decided to close the exchange of virtual currency in China , which involves all the currencies and currencies of the currency , such as “currency line”, “coins” and “Bitcoin China.”

 

Journalists confirmed the news from the person who came close to the Internet Financial Risk Special Rectification Working Group (hereinafter referred to as the Leading Group) and learned that the resolution had been deployed to the local level.

 

This is following the September 4 People’s Bank of seven ministries and commissions joint announcement (hereinafter referred to as the announcement) after further supervision action. The announcement will mark ICO (Initial Coin Offering) as “illegal financial activities” and order the ICO to be banned on the date of publication of the announcement. All ICO tokens trading platforms need to be cleared to close the transaction.

Note, Caixin reports that the purpose of regulation is not limited to more than 60 ICO tokens trading platform, will not engage in a number of ICO virtual currency trading platform into the clean-up range, limited to close.

“In other words, the future in China can not have the so-called virtual currency and the currency between the trading platform.”

 

The close to the leading group, said: “In this way, there is no so-called tokens, virtual currency and RMB between the two Can not trade the problem. “

Of course, Chinese authorities are careful to point out how nefarious Bitcoin is…

Regulators believe that virtual currency investment activities for illegal fund-raising and other types of illegal financial activities provided a hotbed, easy to cause greater financial risk.

 

Because ordinary investors can not distinguish between the difference between Bitcoin and Leigh coins, but also can not identify the difference between the various pseudo-virtual currency. And a large number of “money” illegal fund-raising activities are from the bitter currency frenzy, including the special currency trading places frenzy. “The bitter market is hot all the crazy ‘currency’ market and one of the root causes of illegal activities chaos, ICO crazy also from Bitcoin crazy.

 

Bitco currency trading place chaos and bit currency hot , Triggering the use of Bitcoin to support illegal financial activities, including pyramid schemes, fraud and other issues.

All sounds very ominous, and the reaction is swift…

 

With all the largest cryptocurrencies tumbling…

 

However, if traders read the full report, Caixin explains the regaulory crackdown is on ICOs and not Bitcoin…

The domestic exchange between all the virtual currency and the renminbi, represented by Bitcoin, Etherfax, Okcoin, will be closed within the deadline; but the regulation is not against the virtual currency itself, nor does it prohibit the one-on-one off-exchange of the virtual currency.

The bottom-line appears to be – just as we saw early in the year – China cracking down on capital outflows by disallowing the exchange of fiat currency into crypto via local exchange. But, most critically, they remain open-minded to the private exchange of virtual currencies. This is exactly what we saw early in the year when local P2P services jumped up to support this ‘private’ exchange away from ‘official’ exchanges.

It appears the future of bitcoin trading will be decentralized.

Buy the dip?



Your early FRIDAY 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 6.4784 (REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES SLIGHTLY WEAKER TO ONSHORE AT   6.4930/ Shanghai bourse CLOSED DOWN 0.25 POINTS OR 0.01%  / HANG SANG CLOSED UP 145.55 POINTS OR 0.65% 

2. Nikkei closed UP 121.70 POINTS OR 0.63%    /USA: YEN FALLS TO 107.85

3. Europe stocks OPENED GREEN EXCEPT LONDON     ( /USA dollar index FALLS TO  91.35 AND BREAKS RESISTANCE OF 92.00/Euro UP to 1.2037

3b Japan 10 year bond yield: FALLS  TO  -+.004%/ 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::  48.95 and Brent: 54.66

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 FALLS TO  +.318%/Italian 10 yr bond yield DOWN  to 1.966%    

3j Greek 10 year bond yield RISES TO  : 5.4920???  

3k Gold at $1347.50  silver at:18.08 (8:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 21/100 in  roubles/dollar) 57.10-

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 107.85 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  0.9471 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1399 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to  +0.318%

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 2.059% early this morning. Thirty year rate  at 2.679% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

 

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

Crashing Dollar Sends European Stocks, US Futures Reeling; Yuan Has Best Week On Record

 

European stocks dropped, Asian and EM market rose, and S&P were lower by 0.3% as investors assessed the latest overnight carnage in the USD which plunged to the lowest level since the start of 2015, sending the USDJPY tumbling to 107, the euro extending gains to just shy of $1.21 and a slowdown in China’s export growth which however did not prevent the Yuan from posting its best weekly gain on record.

It was all about the seemingly huge currency moves overnight as the dollar plunged for the 7th day in a row, the biggest 7 day drop in 4 months, amid doubts about further Federal Reserve tightening, North Korea tensions and as Hurricane Irma threatens South Florida.  The Yen rose to the strongest level against the dollar since Nov. amid nervousness about possible provocation from North Korea ahead of its foundation day on Saturday; yen surged past 108 per dollar as options barriers gave way, triggering a series of stop-losses. The Yuan rallied toward 6.45/USD in both onshore and offshore markets as traders speculate PBOC will tolerate a stronger currency after it rose past the psychological 6.50 mark Thursday. The Australian dollar surged to the highest in more than two years on the back of dollar weakness while the cherry on top was the 10Y TSY yield touching a YTD low of 2.014% before rebounding to ~2.035%.

Meanwhile, natural disasters were aplenty, including the most powerful earthquake this century to shake Mexico, while Hurricane Irma is projected to hit Florida Sunday, and North Korea is widely expected to launch an ICBM on its September 9 holiday.

As reported last night, the big overnight story was the dramatic plunge in the dollar in Asian trading….

… which also pushed the EURUSD to the highest level since January 2015, a move that was not helped by this morning’s Reuters “trial balloon” according to which the ECB was considering 4 QE reducing scenarios.

“At its current level, the Euro is not a threat for the Eurozone,” Philippe Ithurbide, global head of research at Amundi Asset Management, said in a report. “If the euro stabilizes, or continues a gradual appreciation path as in our base scenario, the ECB could announce — maybe in October — a reduction, starting in January 2018, of the quantitative easing program. Should the euro continue to appreciate rapidly, the ECB could become more dovish and postpone its tapering.”

This morning, the USD has attempted to stabilize after said heavy selling in Asian session, which has seen the DXY hit a fresh YTD low. Meanwhile, the USD/CNH has bounced from levels last seen in Dec. 2015 after reports of Chinese concerns on yuan strength. The Yuan was set for its best weekly gain since records began in 2007. The onshore yuan headed for the third weekly advance in a row, with a gauge of the dollar tumbling toward the biggest decline since May. The CNY climbed 0.48% to 6.4543 per dollar as of 5:11 p.m. in Shanghai on Friday; extending the weekly advance to 1.6%, the most since Bloomberg began compiling CFETS data in 2007.  On Friday morning, the PBOC strengthened the daily reference rate by 0.36% to 6.5032 per dollar, extending the 10-day run of increases to 2.4%.  The Bloomberg replica of CFETS index, which tracks the yuan against 24 currencies, climbs 0.10% to 95.16

The Yuan’s recent appreciation has been bigger than expected – and it’s also more than what can be explained by the dollar’s moves – which is likely driven by strong corporate dollar selling and positive market sentiment, UBS economist Wang Tao writes in report sent Friday. “Allowing the yuan to gain versus the basket is a step toward convincing the market of increased two-way flexibility; not expecting it to embark on a multi-year appreciation path in effective term” Wang adeded.

According to Reuters, China policy makers are increasingly worried a sharp CNY rally could hurt exports and the economy, however China is unlikely to intervene forcefully to cap the CNY due to worries of criticism from the US.

Overnight, NY Fed president Bill Dudley became the latest U.S. central banker to lay out his views ahead of a policy-setting meeting later this month as expectations for an interest-rate increase have been scaled back. According to Bloomberg, Dudley reiterated the need to continue raising rates while conceding that the Fed may have to rethink its inflation model.

USD/JPY holds close to overnight levels after tripping downside stops through 108.00. As noted earlier, Bund futures sell off after latest ECB sources give more details on potential tapering, curve steepens. Treasurys partially retrace overnight spike higher, precipitated by the USD weakness.

In equities, European equity markets open lower and slowly grind back to unchanged led by bank sector, Santander +2.5% after being upgraded at Morgan Stanley. Mining sector underperforms after base metals sell off  aggressively in response to China trade data. Stocks in Europe struggled for traction as the euro extended its march above $1.20, while S&P 500 index futures dropped. The most powerful earthquake this century shook Mexico, adding to investor anxiety.

Asia equity markets traded mixed following similar indecisiveness in US and as the region digested a slew of economic releases including Japanese GDP and Chinese Trade data. ASX 200 and Nikkei 225 were lower as financials mirrored the underperformance in their US peers, with Japan also dampened by a weaker than expected Final Q2 GDP which showed the largest downward revision since the current accounting method began in 2010. Shanghai Comp. and Hang Seng were positive despite another OMO skip by the PBoC which resulted to a larger net weekly liquidity drain W/W, as strength in property and energy names kept sentiment upbeat while traders mulled over the release of mixed Chinese Data. China released its latest trade balance data which showed that Exports missed, but Imports surpassed expectations to suggest strong domestic demand. Exports growth for China moderated to 5.5% yoy in August from 7.2% yoy in July, below expectations, while imports growth was up to 13.3% yoy from 11.0% yoy in July, above consensus. In sequential terms, exports contracted by 0.4% mom sa, albeit less than that in July ( -2.0% mom sa). Imports increased by 2.9% mom sa, rebounding from -1.9% mom sa in July. The trade surplus moderated to US$42.0bn from US$46.7bn in July

  • Chinese Trade Balance (CNY)(Aug) M/M 286.5B vs. Exp. 335.7B (Prev. 321.2B)
  • Chinese Exports (CNY)(Aug) Y/Y 6.90% vs. Exp. 8.70% (Prev. 11.20%)
  • Chinese Imports (CNY)(Aug) Y/Y 14.40% vs. Exp. 11.70% (Prev. 14.70%)

Meanwhile, the threat from North Korea lingers. U.S. President Donald Trump said it’s not “inevitable” that the U.S. will wind up in a war with North Korea over its continued development of nuclear weapons, though military action remains an option. Pyongyang may test a missile this weekend to coincide with its “founding day” on Sept. 9.

Ten-year Treasury yields fell toward 2 percent and gold headed for a third week of advance ahead of a potential North Korean missile launch. Copper led most industrial metals lower and crude oil dropped. The yield on 10-year Treasuries declined less than one basis point to 2.04 percent, the lowest in 10 months. Britain’s 10-year yield advanced one basis point to 0.982 percent.

West Texas Intermediate crude fell 0.4 percent to $48.91 a barrel, the largest fall in more than a week. Gold gained 0.2 percent to $1,351.25 an ounce, the strongest in almost 13 months. Copper declined 1.4 percent to $6,802.00 per metric ton, the lowest in more than a week on the largest drop in more than four months.

Economic data include wholesale inventories.

Market Snapshot

  • S&P 500 futures down 0.4% to 2,455.75
  • STOXX Europe 600 down 0.2% to 374.04
  • German 10Y yield fell 1.3 bps to 0.294%
  • MSCI Asia up 0.4% to 161.82
  • MSCI Asia ex Japan up 0.4% to 534.48
  • Nikkei down 0.6% to 19,274.82
  • Topix down 0.3% to 1,593.54
  • Hang Seng Index up 0.5% to 27,668.47
  • Shanghai Composite down 0.01% to 3,365.24
  • Sensex up 0.03% to 31,671.21
  • Australia S&P/ASX 200 down 0.3% to 5,672.62
  • Kospi down 0.1% to 2,343.72
  • Euro up 0.2% to $1.2046
  • Italian 10Y yield fell 10.2 bps to 1.634%
  • Spanish 10Y yield rose 1.6 bps to 1.511%
  • Brent Futures up 0.5% to $54.76/bbl
  • Gold spot up 0.4% to $1,354.10
  • U.S. Dollar Index down 0.4% to 91.27

Top Overnight News

  • Reuters: ECB discussed scenarios yesterday and agreed the next step is to cut stimulus but should be done with broadest possible consensus; options included reduction to EU20b or EU40b and extension by 6 or 9 months, according to people familiar; ECB’s Liikanen: Some QE decisions will be taken in December
  • Fed’s Dudley: Appropriate to continue to remove monetary policy accommodation gradually, low inflation may be structural; Fed’s George says it’s time to continue with Fed rate hikes
  • President Donald Trump said it’s not “inevitable” that the U.S. will wind up in a war with North Korea over its continued development of nuclear weapons, but that military action remains an option
  • Trump suffered another setback on his travel ban, with an appeals panel leaving in place a lower-court ruling that forces the administration to accept people with grandparents, cousins and other relatives in the U.S.
  • Traders braced for economic damage to Florida from Hurricane Irma, set to make landfall on Sunday. The most powerful earthquake this century shook Mexico, adding to investor anxiety and sending the peso weaker
  • Federal Reserve Bank of New York President William Dudley reiterated the need to continue raising interest rates while conceding that the U.S. central bank’s inflation model may be in for a rethink soon
  • White House is considering at least six candidates to be the next head of the Fed; a chance Yellen will be renominated, though Cohn’s prospects have dimmed according to people familiar
  • Chinese officials are beginning to worry about the rallying yuan due to the strain on exporters, according to people familiar: Reuters
  • China Aug. Trade Balance: +$41.9b vs +$48.5b est; Exports 5.5% vs 6.0% est; Imports 13.3% vs 10.0% est.
  • Delta Cancels Flights for South Florida Airports on Irma
  • Strongest Quake in Century Hits Mexico, at Least Three Dead
  • White House Is Said to Be Considering at Least Six for Fed Chair
  • Equifax’s Historic Hack May Have Exposed Almost Half of U.S.
  • U.S. Is Said to Target North Korea Violators, With ZTE’s Help
  • BlackRock Is Said to Be in Talks for Calpers’s Buyout Business
  • ECB Is Said to Study QE Options That Don’t Need Rule Tweaks
  • Apple-Backed Billionaire Makes Case to Buy Toshiba Chip Unit
  • China’s Export Engine Slows as Imports Maintain Steady Gains

Asia equity markets traded mixed following similar indecisiveness in US and as the region digested a slew of economic releases including Japanese GDP and Chinese Trade data. ASX 200 and Nikkei 225 were lower as financials mirrored the underperformance in their US peers, with Japan also dampened by a weaker than expected Final Q2 GDP which showed the largest downward revision since the current accounting method began in 2010. Shanghai Comp. and Hang Seng were positive despite another OMO skip by the PBoC which resulted to a larger net weekly liquidity drain W/W, as strength in property and energy names kept sentiment upbeat while participants also mulled over the release of mixed Chinese Data where Trade Balance and Exports missed, but Imports surpassed expectations to suggest strong domestic demand. 10yr JGBs gained amid the risk averse sentiment in Japan and as yields tracked the declines seen in their US counterparts, while the BoJ were also present in the market for a total of JPY 880bln of JGBs across the curve.  China policy makers worry a sharp CNY rally could hurt exports and the economy; China unlikely to intervene forcefully to cap the CNY due to worries of criticism from the US, according to sources.

Top Asian News

  • Tencent’s Giant Rally Is a Problem for Some China Investors
  • SpiceJet Shows Long-Haul Intent With Boeing-Airbus Contest
  • Japan’s GDP Growth Revised Down on Softer Capital Expenditure
  • Citi Sees Pressure on Yuan, Philippines Peso Amid Reserves Trend
  • China No. 4 Developer Seeks to Repay Overdue Debt at Lower Rate
  • Topix Has Worst Week Since April on N. Korea, Natural Disasters
  • Yuan Surge Feeds Speculation Policy Makers to Loosen Control

Soft risk off tone has highlighted this lacklustre Friday morning, as much of the price action was seen yesterday. Equity markets
opened marginally lower and have traded around these levels from the open with 8/10 Euro Stoxx sectors trading in the red. The
stronger EUR has supported the mild risk-off tone following yesterday’s ECB meeting and the EUR continuing to ramp.
Stock specific sees basic resources struggling, being affected by the pressure of copper prices, elsewhere the finance sector is one
to trade in the marginal green, buoyed by Morgan Stanley’s upgrade of Santander. Peripheral bonds are seeing slight downward pressure, likely due to profit taking following yesterday’s outperformance amid the
ECB press conference. Price action across European curves has been quiet, as the EU AAAs all trade around levels seen in the
open.

Top European News

  • U.K. Manufacturing Jumps, Construction Falls as Quarter Starts
  • Akzo Nobel Warns on 2017 Profit as Paintmaker Replaces CFO
  • Nordea Move Has Riksbank Chief Warning of Dangerous Fallout
  • Swedish Government Backs Away From Plan to Cut Riksbank Reserves
  • Overlooked in Cancer, Glaxo and Sanofi Look to Get Into the Race
  • Greene King Shares Slump on Trading Update, Dragging Pubs Lower
  • Mercedes Fields Buzz Aldrin to Take on BMW While Fiat Stays Home
  • Trinity Mirror Starts Talks to Buy Desmond’s U.K. Tabloids
  • Germany’s Facebook Case Tackles Crucial Digital Issues: Mundt

FX markets have seen subdued trade following yesterday’s volatility being followed by an attack on the greenback overnight. Much anticipation was on the UK Manufacturing and Industrial Production data, the formers slight beat vs. expected sparked little sterling buying, with the data causing no real price action. USD/JPY broke through the 108 handle during the Asia/European crossover, knocking through option barriers on the way through. The week’s aggressive buying between 108.00/108.50 has aided with the bearish pressure, as stops were triggered through the 108.00 level, now firmly through April’s low. July 16, 2016 high has paved some support for the pair, however, a break through 107.50 is likely to see a 105 print.

In commodities, the US storms remain a concern to energy traders, the catastrophic events are likely to lead to refiners and recovery projects competing for the same labour, in turn driving up costs or causing labour shortages. Brent futures have flipped back into its pre-hurricane backwardation after fears of a significant drop in crude demand failed to leak into markets. Copper has been the noticeable laggard in metal markets, as the precious metals all perform well amid the risk-off tone.

Looking at the day ahead, there is the final reading for wholesale inventories
along with consumer credit data. Away from the data, the Philadelphia
Fed President Harker will speak on consumer behaviour in credit.

US Event Calendar

  • 8:45am: Fed’s Harker Speaks on Consumer Finance in Philadelphia
  • 10am: Wholesale Inventories MoM, est. 0.4%, prior 0.4%; Wholesale Trade Sales MoM, est. 0.5%, prior 0.7%
  • 3pm: Consumer Credit, est. $15.0b, prior $12.4b

DB’s Jim Reid concludes the overnight wrap

So unsurprisingly the talk of the town over the past 24 hours has been the ECB and President Draghi. As expected there was no change to policy but that was never going to be the talking point. Draghi did however more or less confirm that a decision on tapering will likely be taken at the October meeting. A “very, very preliminary discussion” was said to have taken place within the governing council yesterday but the “bulk of decisions” will be made in October for beyond 2017 according to the President.

The biggest focus going into the meeting though was on what sort of rhetoric we would get from Draghi around the recent strength in the currency. While questioned and addressed at least half a dozen times, the general feeling was that Draghi felt relatively comfortable suggesting that he and the council view Euro strength as a sign of improving economic fundamentals. That gave the green light for the single currency to rally another +0.89% yesterday and so close above 1.200 for the first time since January 2015. This morning it’s up further, at 1.2070 as we go to print. The President did yesterday highlight up front that “the recent volatility in the exchange rate represents a source of uncertainty which requires monitoring” along with making various other references. However Draghi also played up growth and failed to really downplay inflation. Draghi called growth “robust” and “broad based” and signalled that the ECB had upgraded this year’s growth forecast to 2.2% from 1.9%. 2018 and 2019 forecasts were left unchanged. On inflation the impact of the recent currency move was to only shade one-tenth off the 2018 and 2019 headline forecasts, and leave 2017 as is at 1.5%. That said core inflation expectations were revised down in 2019 by twotenths. Overall though it felt a bit like every time Draghi tried to downplay the currency he ended up caveating it with a positive.

Away from that, another notable snippet from the press conference included Draghi saying that the ECB “haven’t really discussed the scarcity issue (for bond buying) because so far we’ve consistently shown that we’ve been able to cope with this issue quite successfully”. DB’s Mark Wall summed up in his report by saying that his baseline expectation is a “slow and extend” decision on QE at the October meeting, extending until mid-2018 at the slower rate of EUR40bn per month. He expects a dovish tightening and notes that the ECB could achieve this by justifying slower QE on the basis of partial normalisation of core while saying that full normalisation is susceptible to FX appreciation, and also maintaining the QE guidance by saying that the Bank is prepared to do more if necessary.

The failure to temper the move in the currency resulted in an interesting market dynamic as it essentially cleared the path for European bonds to rally. 10y Bund yields closed -4.1bps lower at 0.302% and the lowest since late June. France and Netherlands were -5.0bps and -4.5bps lower respectively while the periphery outperformed with yields in Italy, Spain and Portugal -11.1bps, -7.3bps and -10.5bps respectively. The Stoxx 600 also rebounded from an early fall to close +0.27%.

Meanwhile across the pond, 10y Treasuries plunged to a new YTD low during the day of 2.032% and are continuing to flirt with that 1% handle. They eventually closed just off that at 2.040% which is where they are this morning. That move for Treasuries appeared to be more European led but clearly the threat of Hurricane Irma (and two other Hurricanes) inching closer to Florida and reports per Bloomberg about another possible missile test by North Korea is keeping the bond market propped up. The cloud hanging over the Fed now with the all the antics in Washington and an uncertain Fed Board composition is clearly not helping too. The S&P 500 closed virtually flat (-0.02%), but within the sectors, health care rose but banks (-1.76%) and insurers (-1.90%) were hit given the potential drags from lower bond yields and Hurricane  Irma respectively. Elsewhere, the US dollar index fell -0.68%, Gold rose +1.12% to a new one-year high but WTI Oil was little changed.

On the topic of uncertainty, the feeling was that it might be a two-horse race between Janet Yellen and Gary Cohn to be the next Fed Chair, but Bloomberg reported last night that Trump may be considering six more possible candidates for the top job. The list is fairly broad and includes: Kevin Warsh (former Fed governor), Glenn Hubbard (professor at Columbia Uni.), John Taylor (professor at Stanford Uni.), Lawrence Lindsey (former economic advisor to President Bush), Richard Davis (former US Bancorp CEO) and John Allison (former CEO of BB&T). With the various other departures on the Board, Trump is going to have a rare opportunity to handpick and reshape the composition of the Federal Reserve. However as we’ve been saying in recent days, this very much keeps the clouds of uncertainty from dissipating over the Fed for a while.

On a related note, following up from the Fed’s Vice-Chair Stanley Fischer’s early resignation the other day, our US team took a closer look at the potential implications. They argue that the FOMC has lost one of its more hawkish members  and with the December FOMC decision already on a course to be contentious, it is possible that there could be at least three dissents to a rate hike decision.

This morning in Asia, markets are heading into the end of the week a bit mixed. The Nikkei (-0.38%), Kospi (-0.13%) and ASX 200 (-0.36%) are all softer but the Hang Seng (+0.50%) and Shanghai Comp (+0.24%) have edged higher. It’s worth noting that trade data in China this morning showed export growth as slowing to +5.5% yoy in Dollar terms from +7.2%. Expectations were for a slower decline to +6.0%. Imports on the other hand surged to +13.3% yoy from +11.0% after the consensus was also for a slowdown in the growth rate. It’s worth noting that this is the second month in a row that export numbers have disappointed.

Back to the US debt ceiling. Now that the September deadline has been extended to December, President Trump suggested yesterday that there are “a lot of good reasons” to get rid of the debt ceiling altogether. Senate minority leader Schumer and Senate Finance Chairman Hatch along with others supports the idea, but some do not, including House Speaker Paul Ryan who said that “there is a legitimate role for the power of the purse and Article One powers”.

Staying with the US, we’ve had two more Fed speakers in the last 24 hours. The usually hawkish Cleveland’s Fed President Mester said she is “comfortable” raising interest rates again this year and added that not hiking rates between now and March 2018 is not her idea of a gradual rise. Elsewhere, The NY Fed President Dudley said that “I expect the US economy will perform quite well… as this occurs, I anticipate that wage growth will firm and price inflation will gradually rise” and that “we will continue to gradually remove monetary policy accommodation”.

Moving on. The latest on Brexit talks yesterday saw EU Chief Brexit negotiator David Barnier say “I’ve been very disappointed by the UK position…there is a moral dilemma here, you can’t have 27 (states) paying for what was decided by 28” and that “the UK needs to tell us what it wants and we will see what is possible”. Elsewhere, the President of the European Parliament, Antonio Tajani, said “it would seem very difficult that sufficient progress can be achieved by October”. Here in the UK, the Guardian noted that PM May has rejected an invite to address the EU Parliament to explain Britain’s position, instead preferring to discuss with leaders in closed sessions.

Before we take a look at today’s calendar, a quick recap of yesterday’s economic data. In the US, the initial impact of Hurricane Harvey has seen initial jobless claims rise 62k to 298k (vs. 245k expected), with applications in Texas up 52k. Continuing claims were broadly in line at 1,940k (vs. 1,945k expected). Elsewhere, the final reading for nonfarm productivity was above market at +1.5% qoq (vs. +1.3% expected), resulting in a through-year gain of +1.3% yoy.

Back in Europe, the final reading on the Eurozone’s 2Q GDP was unrevised at +0.6% qoq and +2.3% yoy (vs. 2.2% expected). In Germany, July industrial production was flat (vs. +0.5% mom expected), but annual growth is still up +4.0% yoy (vs. +4.6% expected). In the UK, the Halifax house price index was well above market at +1.1% mom (vs. +0.2% expected) and +2.6% yoy (vs. +2.1% expected). Over in France, the trade deficit widened to EUR6.0bn in July, with +4.9% yoy growth in exports outpaced by +9.2% yoy growth in imports.

Looking at the day ahead, Germany’s trade balance, current account balance and export / imports stats are due this morning. For the UK and France, industrial production (+0.2% mom expected for UK; +0.5% mom for France), manufacturing production and trade balance stats are also due. Over in the US, there is the final reading for wholesale inventories along with consumer credit data. Away from the data, the Philadelphia Fed President Harker will speak on consumer behaviour in credit.

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed DOWN 0.25 POINTS OR 0.01%   / /Hang Sang CLOSED UP 145.55 POINTS OR 0.53%/ The Nikkei closed UP 145.55 POINTS OR 0.63%/Australia’s all ordinaires CLOSED DOWN 0.25%/Chinese yuan (ONSHORE) closed UP at 6.4784/Oil UP to 48.95 dollars per barrel for WTI and 54.66 for Brent. Stocks in Europe OPENED GREEN EXCEPT LONDON. Offshore yuan trades  6.4930 yuan to the dollar vs 6.4920 for onshore yuan. NOW THE OFFSHORE MOVED MUCH WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN MUCH STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LITTLE 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

b) REPORT ON JAPAN

end

c) REPORT ON CHINA

The sharp rise in the yuan against the dollar is causing Beijing fits.  They want a lower Yuan and so they have now given speculators the green light to short the currency

(courtesy zerohedge)

Yuan Tumbles After Beijing Gives Speculators Green Light To Short The Currency

And now, Trump finally has reason to be angry with China for intervening in its currency to manipulate it lowernot higher.

* * *

After the biggest weekly surge in the Yuan on record, the first sign that Beijing had had enough of the relentless surge in the currency was unveiled overnight, when according to a Reuters report quoting “policy insiders” China had “begun to worry about a rallying yuan as exporters come under strain” a sign the currency’s gains might lose steam after it hit a two-year against the dollar just weeks before Beijing is set to host a crucial Communist Party gathering in the autumn.

For those who have not been following our daily morning update on the Yuan, here is how sharp the move has been in recent weeks, and how painful to countless Yuan shorts who have been left with massive margin losses.

In a rapid turn in fortunes after last year’s slide, the yuan’s sharp rebound since May has presented a fresh headache for authorities as Chinese exporters are suddenly facing the same pressure as their European peers (where the 1.20 line in the EURUSD has proven to be a “red line” for the ECB, beyond which exporter profits are expected to tumble). However, intervening to cap the Yuan could expose China to accusations of currency manipulation by U.S President Donald Trump, effectively tying the PBOC’s hands.

“Appreciation is better than deprecation, but the pace of appreciation cannot be too fast, otherwise it will be unfavourable for domestic firms,” a policy insider told Reuters.

The rally has been spurred by the dollar’s broad decline, optimism about the economy, a crackdown on capital outflows, and more recently the central bank’s tighter control of the mid-point, from which the yuan can rise or fall 2 percent.0

 

The yuan has gained nearly 7.8 percent against the dollar so far this year, including just over 6 percent since late May, more than making up its losses of 6.5 percent in 2016 – the biggest annual drop since 1994.

The surge in the Yuan, coupled with a plunge in the dollar, accelerated dramatically overnight as we observed, leaving many worred about the disruption to the economy ahead of the Communist Party Congress in October, where President Xi Jinping hopes to strengthen and extend his leadership of the party, should it remain unchecked.

“It could be disastrous if the yuan rises sharply,” said another policy adviser, one of the four sources involved in internal policy discussions but are not part of the final decision-making process.

 

“The economy has just showed some improvement due to a stronger global economy,” the adviser said.

Confirming the Reuters report, one policy insider said commerce ministry officials – staunch advocates for exporters – had expressed concerns over the yuan’s surge. And yet, as noted above, authorities were said to be unlikely to intervene forcefully to weaken the yuan for fear of sparking fresh criticism over its currency practices from the United States.

The U.S. Treasury releases its next report on currency practices of trading partners in October. In April, it said the test for Beijing would be how they handled a strengthening yuan, leaving China in a bit of bind on how to respond to a rallying currency without raising Washington’s ire.

China will need to demonstrate that its lack of intervention to resist appreciation over the last three years represents a durable policy shift by letting the (yuan) rise with market forces once appreciation pressures resume,” the Treasury said.

Furthermore, signs that the PBOC had had enough with the Yuan’s appreciation emerged even before the Reuters reports, when traders began to suspect the central bank was starting to signal a desire for the rally to moderate when on Friday, the central bank raised its official yuan midpoint for the 10th straight session – but it was much weaker than market expectations.

* * *

Fast forward to today, when the PBOC appears to have found a brilliant solution to both problems, when as Bloomberg reported that China’s central bank would remove a reserve requirement for financial institutions trading in FX forwards for clients by cutting it to zero from 20% currently. The change will take effect on September 11.

As a reminder, banks, funds and other financial institutions trading FX forwards for clients were required from October 2015 to set aside 20% of the past months’ sales as reserves in a move that was aimed at curbing currency speculation. Subsequently, the PBOC further punished traders, or rather shorts, by boosting short-term margin requirements on FX positions, making it virtually impossible to hold on to a short position for a long period of time.

So what happened today? Well, the PBOC has just U-turned, and has given a greenlight to the same FX speculators whom it criticized (remember the Chinese anti-Soros media campaign), slammed, punished, and in some cases arrested, to now short the Yuan once more

On the surface, this is a brilliant solution to Beijing’s problems: it lowers the Yuan on one hand, and on the other, it’s not the PBOC who is manipulating the currency, it’s the evil speculators who are “guilty.” 

Most importantly, it’s work, as the following chart of the USDCNH clearly shows. 

Now the question, of course, is how long will the PBOC allow this move to continue before it once again pulls out the rug from under the “speculators” with a well-timed FX margin hike to 100% or more, crushing all shorts, and reseting the cycle.

 

end

 

One by one, the players who have shorted the yuan are throwing in the towel.  Now Corriente Advisors’ Mark Hart ends his 7 yr bet on a massive yuan devaluation.

( zero hedge)

China Capitulation: Corriente Advisors’ Mark Hart Ends 7-Year Bet On A “Massive Yuan Devaluation”

China bears like Kyle Bass claimed victory last year after bets that the Chinese yuan would weaken paid off handsomely – particularly if they were supercharged by leverage. Hopefully, for their sake, yuan decided to lock in those gains early this year. Because since January, China’s currency has whipsawed higher, reversing most of its 2016 depreciation as the US dollar has endured a period of broad weakness, and Chinese policy makers have turned their attention to managing the currency’s valuation against a basket of currencies.

But Mark Hart, who, like Bass is a Texas-based fund manager, and who built his bear case against China on the theory that the PBOC would opt for a series of one-off devaluations in the yuan, instead of allowing it to gradually depreciate, which would be tantamount to a policy error.

Here’s more from a post on Hart’s outlook that we published last year:

“Hart believes that the Chinese crawling devaluation is an error as it carries with its the latent threat of much more devaluation in the future, thus encouraging even more outflows, which in turn forces China to sell even more reserves, which destabilizes the economy even further, forcing even more devaluation and so on.

 

Instead, a one-off devaluation would allow policy makers to “draw a line in the sand” at a more appropriate level for the yuan, easing pressure on China’s foreign-exchange reserves and removing an incentive for capital outflows, according to Hart, who’s been betting against the currency since at least 2011. He adds that China should devalue before its $3.3 trillion hoard of reserves shrinks much further, he said, because the country can still convince markets it’s acting from a position of strength.”

According to Hart, while a devaluation this year would be “jarring” and may initially accelerate capital outflows, it would ultimately put China in a stronger position. He said the country could explain the move by saying it would put the yuan at a level more reflective of market forces and allow the currency to catch up with declines in international peers.

However, the 50% devaluation that Hart had been anticipating never materialized. So, after seven years, Bloomberg is reporting that Hart has (pun intended ) had a change of heart after spending $240 million on his losing bet against the currency, which nearly cost him his sanity.

Hart is now taking the other side of the trade, joining the ranks of Bridgewater Capital’s Ray Dalio and other yuan bulls:

“Mark Hart spent seven years and $240 million waiting on a crash in China’s currency.

 

He lost sleep. He lost clients. He damn near lost his sanity.

 

And now he’s lost his conviction: Hart, who called for a more than 50 percent yuan devaluation last year, has turned bullish on China and its currency.”

According to Bloomberg, Hart’s dedication to his short-yuan position left employees demoralized at his Fort Worth, Texas fund. Hart claims that his investing thesis was sound. His biggest mistake? Hart says he was “too early” in putting on the trade.

“His reversal hasn’t come easily. From his base in Fort Worth, Texas, the hedge fund manager spent countless nights on the line to Hong Kong, parsing market news and exchange rates. At times, the stress took a toll on Hart personally and left his employees demoralized.

‘I always thought we had a good risk-reward trade on, but we made a number of mistakes, including being way too early,’ Hart, who started the yuan bet after predicting both the U.S. subprime mortgage bust and the European debt crisis, said in a telephone interview. ‘And now the world has changed.’”

Hart now believes that G-20 leaders tacitly conspired to a “Plaza Accord”-type agreement to stanch the dollar’s appreciation while putting a floor under the yuan last February during a G-20 summit in Shanghai.

“In cool hindsight, the 45-year-old founder of Corriente Advisors sees last year’s Group of 20 summit in Shanghai as a key turning point. Like many investors, Hart suspects the meeting resulted in a tacit agreement among world leaders to prevent the yuan from tumbling. He calls it China’s “whatever it takes” moment – when policy makers resolved to prop up the currency at any cost.”

The agreement has tremendously benefited China, Hart says.

“‘China now has the breathing room it needs to either temporarily stave off a slowdown with fiscal and monetary stimulus, or reform, grow and upgrade itself into the world’s largest developed economy,’ Hart said.”

Regardless of whether Hart’s “conspiracy theory” is accurate, China has clearly succeeded in stabilizing the exchange rate. The yuan ended a three-year slide in late December and has rallied almost 7 percent in 2017. China’s central bank strengthens its daily reference rate for onshore yuan for a ninth day on Thursday, 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.

Even at its weakest point, the yuan never weakened enough for the options that Hart originally purchased in 2009 to pay off. His dedicated China funds, which had fixed lifespans, bought options that were designed to deliver one of two outcomes. According to Bloomberg, a massive payoff in the event of a currency crash, or a near total wipeout if a major devaluation failed to occur.

Draghi floats a trial balloon giving 4 scenarios as to how they will taper.  The market responded by driving the Euro higher still

(courtesy zero hedge)

Draghi’s 4 QE Scenarios Unveiled As ECB’s Reuters “Trial Balloon” Strikes Again

In our concluding comments on the ECB’s disjointed message yesterday, in which Draghi feebly tried to talk down the EUR while talking up the European economy and also hinting at the start of policy normalization but without actually doing so in the process sending the EUR shooting higher, we said “And now that the market is supremely confused, we expect the ECB to lob the next Reuters trial balloon any moment to punish all those who keep buying the EUR.”

Less than one day later, this is precisely what happened because just before 5am ET on Friday, the ECB’s “sources” struck again through, guess whom Reuters which reported that contrary to Draghi’s responses during yesterday’s Q&A, the European central bank had discussed four QE scenarios in detail and agreed that the next step is to cut stimulus, to wit:

  • ECB POLICY-MAKERS DISCUSSED 4 QE SCENARIOS ON THURSDAY AGREED NEXT STEP IS TO CUT STIMULUS & SHOULD BE DONE WITH BROADEST POSSIBLE CONSENSUS
  • ECB QE OPTIONS INCLUDED BUYS AT 40 BILLION EUROS OR 20 BILLION A MONTH; EXTENSION OPTIONS INCLUDE 6 MONTHS OR 9 MONTHS – SOURCES

Ironically, however, the Reuters “post-script” ended up confirming what the EUR bulls knew all too well: the ECB has no choice but to taper QE, and soon, in the process pushing the EUR even higher.

As the ECB’s favorite FX trading news service Reuters details further, “ECB policymakers meeting on Thursday were in broad agreement that their next step will be reducing their bond purchases and discussed four options, two sources with direct knowledge of the discussion said. Possibilities discussed by the ECB included – but are not limited to – cutting assets buys to 40 billion euros a month or 20 billion euros, with extension options including 6 months or 9 months.” 

Per the details, the ECB is merely trying to apply the Fed’s own normalization template to its gargantuan balance sheet:

Although the scenarios included specific monthly volumes and extensions, much of the focus of the discussion was on the overall amount of the purchases. This includes the reinvestment of proceeds from maturing bonds, which will slowly rise towards 15 billion euros per month next year, the sources said.

 

Policymakers also agreed that interest rates will not be raised before the asset buys end, the sources said, indicating by default that any extension of the program would also push out the first rate hike.

Why wait one whole day before unveiling this addendum to Draghi’s press conference? It appears the ECB wanted to see which way the market will turn and how Mario’s words would be digested by the market. Furthermore, the ECB hopes to telegraph a “broad consensus”, which ironically needs a pre-release from a wire service to gauge investor sentiment.

Worried about the euro’s strength, the bank stayed pat on Thursday, honing in on October for the key decision after more than 2 trillion of euros worth of asset buys.

 

The cautious approach raises the chances that the ECB will opt to phase out quantitative easing, designed to boost growth and inflation, only very slowly next year, despite solid economic growth in the euro zone and worries about real estate bubbles in richer countries such as Germany.

Furthermore, as Draghi hinted during the press conference, Reuters “sources” added that the so-called issuer limit, which caps any ECB buying to a third of a country’s outstanding debt, is not up for discussion because it would open the program, already under review by the European Court of Justice, for a legal challenge.

But maintaining the cap and the program’s other self-imposed constraints would limit the purchases as the ECB is already approaching its limit in several countries – notably Germany, the euro zone’s biggest economy and the ECB’s top critic.

And while all of the above was largely expected, if not at all mentioned by Draghi , who was too scared to discuss it during yesterday’s announcement, purchases what is most notably was the ECB’s confirmation that if QE purchases are left unchanged, “Germany could hit the limit in the first half of 2018.” At least it’s good to know that simple math still works at the ECB.

Finally, in terms of market response, judging by the EURUSD, which moved up all of 20 pips on the “news”, the ECB should have just avoided this latest PR fiasco. The reaction was more notable among Bunds, where futures fell, reversing their earlier advance as German debt had opened higher, tracking gains in Treasuries.

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

ISRAEL/SYRIA/RUSSIA

Israel strikes into Syria but did not invade Syrian territory.  They fired missiles at a chemical factory from inside Lebanon.  We now await Syria/Russia’s response:

(courtesy zero hedge)

Israel Launches Air Strikes On Syria And Assad’s “Waiting Game”

Immediately after Israel’s latest unprovoked strike on Syria we posed the question, did Benjamin Netanyahu just panic?The answer is yes, Israel is now acting from a position of desperation as it has failed in its goal of regime change in Syria. Overnight (Wed. evening/Thursday early morning), Israel attacked a Syrian military base near the town of Masyaf at about 3:00 a.m. which Syria has now confirmed in a statement that warns of “serious repercussions”. Syria reported two troop deaths in the attack. It appears to have been a massive strike – grainy photos show a large fireball lighting up the night sky outside of Masyaf.

Israel appears to have timed its attack to occur on the very night a controversial U.N. report was released earlier in the day (Wednesday) which blames the Assad government for using chemical weapons against civilians at Khan Sheikhoun in April. A number of Israeli analysts and media reports purport the Masyaf base to be a site for chemical and non-conventional weapons storage (such as “barrel bombs”) while claiming the attack was motivated by “humanitarian” concern for Syrian civilians.


First image produced from Israeli strike on Al-Tala’i facility near Masyaf. Via Twitter.

But this is the reason for Israeli media and defense officials quickly claiming that the strike at Masyaf was on a chemical weapons facility: they know the “humanitarian” angle sells in the West, especially when coupled with allegations of civilians being gassed. Currently, this is putting the dubious and contested claim that the Syrian government attacked Khan Sheikhoun with sarin gas back in the spotlight at a time when Israel is eager to sell war for regime change while casting its actions in terms of protecting and defending civilians from a brutal dictator. In typical fashion the big newsrooms, which rarely report from inside Syria but instead opt for the comfort of Beirut, are uncritically echoing the “humanitarian airstrike” narrative. The New York Times, in a report filed from Jerusalem, narrates the attack as follows while relying on unnamed “former Israeli officials” and a single Syrian pro-opposition outlet:

Israeli officials did not comment on the strike, but a Syrian monitoring group and two former Israeli officials said it had targeted an installation of a government agency that produced chemical weapons and a military base that produced advanced missiles.

 

The strike came a day after a United Nations commission accused the Syrian government of using chemical weapons in an attack in April that killed dozens in the town of Khan Sheikhoun and flooded clinics with victims gasping for breath.

Initially some Syria observers questioned how the Israeli Air Force could strike so deep inside Syria with no response from the country’s advanced Russian made S-400 anti-aircraft system. But it appears Syrian airspace was never violated as the Israeli jets reportedly fired from over Lebanon. Masyaf lies west of Hama and just north of the Lebanese border. While Israel’s incursion into sovereign Lebanese airspace is illegal according to international law, Lebanon cannot respond as it has no air force nor does it possess adequate anti-aircraft missiles.


Close-up of the Israeli airstrike aftermath. Image source: Al-Masdar News

It is further significant that Israel chose to fire from over Lebanon (not for the first time) even though it has routinely violated Syrian air space in previous attacks. It appears that Israel calculated it’s strike position to be in the vicinity of Russian military presence yet without forcing a Russian response by directly violating air space. The attack comes just over two weeks after Israeli Prime Minister Benjamin Netanyahu met with Vladimir Putin in Sochi. By many accounts the meeting was contentious as Netanyahu warned Putin that Israel would not tolerate Iranian presence in Syria. It was further revealed that a senior Israeli official accompanying Netanyahu on the trip threatened to assassinate Syrian President Assad by bombing his palace in Damascus, while further adding that Israel will seek to derail the US-Russia brokered de-escalation deal reached in Astana, Kazakhstan earlier this summer.

Russia’s Pravda described a frantic and upset Netanyahu at the Sochi talks with the following: “according to eyewitnesses of the open part of the talks, the Israeli prime minister was too emotional and at times even close to panic. He described a picture of the apocalypse to the Russian president that the world may see, if no efforts are taken to contain Iran, which, as Netanyahu believes, is determined to destroy Israel.”

At first glance it does appear that Netanyahu is now making good on his threats, but is this latest flagrant aggression against Syria a sign of more attacks to come?Will Netanyahu pursue escalation in the hope of dragging the US and other allies into war? It’s not likely. Realistically that possibility ended when Syria retook Aleppo and with the US-Russia Astana ‘de-escalation’ deal which tacitly legitimized Iranian presence in Syria. Even some within the pro-opposition regime change crowd took to social media after the strike to say “too little, too late”.  Simply put, Israel lost the covert war and is now left “holding the bag” while its more powerful allies pull out of the full push for regime change.

But what is clear is that Israel remains deeply uncomfortable with the Syrian Army’s overwhelming momentum of late (just this week the army initiated the liberation of Deir Ezzor from ISIS) and seeks to keep the fires burning in Syria, at least enough to bog down Assad and Iran. Worse for Netanyahu, Hezbollah seems stronger than ever, along with the so-called ‘resistance axis’ that stretches from Tehran to South Lebanon.

Israeli officials have gone so far as to declare their preference for Islamic State terrorists on their border rather than allies of Iran. But as we’ve repeatedly pointed out, Israel is acting from a position of weakness and desperation. All that Netanyahu can hope for now is that an Israeli provocation leads to a direct Syrian military response, but it appears that Assad is not taking the bait.

In 2013 when Israel launched a massive missile attack against a Syrian defense technology facility in Jamraya outside of Damascus, it claimed to be attacking a parked Hezbollah weapons convoy. Perhaps more brazen was the 2016 attack targeting Damascus International Airport, which killed a well-known Hezbollah commander. And in a significant admission earlier this month, the head of Israel’s air force acknowledged nearly one hundred IDF attacks on convoys inside Syria over the course of the past 5 years.

Netanyahu himself was recently caught on a hot mic bragging that Israel had struck Syrian targets at least “a dozen times”. And this is to say nothing of Israel’s covert support to al-Qaeda linked groups in Syria’s south, which has reportedly involved weapons transfers and treatment of wounded jihadists in Israeli hospitals, the latter which was widely promoted in photo ops involving Netanyahu himself. As even former Acting Director of the CIA Michael Morell once directly told the Israeli public, Israel’s “dangerous game” in Syria consists in getting in bed with al-Qaeda in order to fight Shia Iran.

Indeed Assad has not taken the bait for years now. While pro-government Syrians have themselves at times complained about Israel’s seeming ability to strike inside sovereign Syrian territory with impunity, Assad has the long-game in mind of “survival now, retaliation later”. It was clear from the start that Israel’s attacks on largely non-strategic targets were more about provocation: should Damascus lob missiles back in Israel’s direction Netanyahu would launch an all-out assault while Syria was at its weakest in the midst of a grinding and externally funded al-Qaeda insurgency.

Israel has also been careful to frame its actions in terms of counter-terror strikes on Hezbollah targets for the sake of maintaining an air of legitimacy to its aggression. But as the Astana agreement demonstrates (a strategic victory for Russia-Iran-Syria),  Syria’s ability to absorb Israel’s repeat provocations seems to be part of a strategic “waiting game” born of an accurate self assessment of past and current vulnerabilities. As The Century Foundation concludes:

Syria’s contemporary leaders seem to have adopted a simplified version of the “long breath strategy” of the former president—and father of Syria’s current leader—Hafez al Assad. This strategy was named for Syria’s ability to draw a deep breath and weather short-term pain and setbacks in pursuit of a better deal.

And this strategy seems to be working, resulting in a shift in perspective which is even beginning to permeate at least part of the Israeli defense establishment:

A formerly very high-placed source in Israel’s security system spoke to Al-Monitor last week. He said on condition of anonymity, “It’s high time to admit that perhaps all our assessments were erroneous. The prevailing consensus of the last five years was that Syria will never return to its former state. We thought that however this turns out, the Syrian state as we knew it had passed from the world.But evidently we were wrong.”

 

Israel’s top decision-makers have not changed course, but it is likely that such arguments are heard in private discussions, and top-secret intelligence assessments see it as a real possibility that Assad is capable of outsmarting those who prematurely eulogized him and Syria as we knew it.

 

Syria is returning, that is clear now,” said the source. “It’s not about the quantity of territory, it’s about central rule. If nothing unexpected happens, in the near future, Assad will be declared the final, unequivocal winner of this war. Following that, the path to Syria’s rebuilding and reconstruction will be short.”

Concerning Israel’s adventurist military action this week, contrary to the claims of unnamed “Israeli officials” who say the latest attack was against a branch of Syria’s Scientific Studies and Research Center (SSRC), it is likely that this week’s air strike was yet another “routine” attack on a Hezbollah weapons depot.

Wrong: It was a Hezbollah/Iran warehouse. Russia won’t take part of Israel-Hez struggle and the action is not newhttps://twitter.com/YadlinAmos/status/905689722810400768 

According to Elijah Magnier – a veteran Kuwait-based Middle East journalist, fluent Arabic speaker, and one who reports from on the ground in Syria (and has done so for years) – Israel in truth hit another Hezbollah weapons storehouse (not a chemical weapons production facility). But with renewed claims that Syrian government possesses and has used sarin gas, Israel is seeking to maximize the propaganda value of the strike. After all, the world’s attention now seems far away from Syria and the Israeli gloves are off. Israel will do and say whatever it can to get the wheels of internationally backed regime change in motion again.

END

6 .GLOBAL ISSUES

Toronto Home Price Bubble Bursts Into Bear Market

CANADA

Toronto home prices burst as this market enters a bear market.

(courtesy WolfRichter/WolfStreet)

Authored by Wolf Richter via WolfStreet.com,

With surprise rate hike, Bank of Canada turns against housing market…

Home sales in the Greater Toronto Area, the largest housing market in Canada, plunged 34.8% in August compared to a year ago, to 6,357 homes, with sales of detached homes and semi-detached homes getting eviscerated:

Sales by type:

  • Detached houses -41.6%
  • Semi-detached houses -37.3%
  • Townhouses -27.5%:
  • Condos -28.0%.

Even as total sales plunged, the number of active listings of homes for sale soared 65% year-over-year to 16,419, with 11,523 new listings added in August, according to the Toronto Real Estate Board (TREB).

“The relationship between sales [plunging] and listings in the marketplace today [soaring] suggests a balanced market,” the report explained, adding hopefully:

“If current conditions are sustained over the coming months, we would expect to see year-over-year price growth normalize slightly above the rate of inflation. However, if some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels.”

And the average price of all homes, at C$732,292 in August, plunged 20.5% from the crazy peak in April (C$920,761). By this measure, it has now entered a bear market.

The average price in April had shot up 30% year-over-year.

To cool this nutty business, the Ontario government introduced a laundry list of measures on April 20. It included most prominently a 15% transfer tax on nonresident foreign speculators. That appears to have done the trick.

Given the enormous price gains in recent years, the market remains hyper-inflated, and the four-month downturn into a bear market hasn’t even brought prices back to the year-ago level, with the average price for all types of housing up 3%, and the condo price up 21.4% year-over-year.

To cool a similarly nutty housing bubble in Vancouver, the government of British Columbia had passed a year ago similar legislation with a 15% nonresident foreign speculator tax. But worried about an outright implosion of the bubble, it has since been subsidizing with taxpayer money down-payments aimed at first-time buyers and condos, which has inflated the condo bubble and condo speculation to new heights.

Politicians – they’re desperately dependent on extracting property taxes from homeowners – don’t want the world’s most majestic housing bubble to implode. They just want it to remain stable so that taxes can be extracted from willing homeowners that have gotten rich off years of house-price inflation. But for now, the Ontario government is letting the market ride.

The TREB report said that the sharp drop in average prices “points to fewer high-end home sales this year compared to last.” So are speculators with the most money abandoning the market?

Even the Bank of Canada has been warning home buyers – particularly speculators – all year long about big potential losses. Then in July, it raised its target for the overnight rate by 0.25 percentage points. Another rate hike was expected in December, to match the Fed’s presumed rate hike.

But today, in a surprise move, it raised rates again by 0.25 percentage points, to 1% – and there are now expectations that it might raise its target rate a third time later this year. In response, the loonie jumped 1.3% against the US dollar this morning.

These rate hikes “would just further dampen” the housing market, explained Bank of Montreal chief economist Doug Porter, adding that the surprise increase so soon after July’s rate hike “accentuates” the Bank of Canada’s urgency to raise rates.

“So I wouldn’t brush it off – I think that will put a bit more upward pressure on some of the medium and longer-term mortgage rates as well, and of course the variable rates will move almost instantaneously,” he said.

Variable-rate mortgages account for about 30% of all mortgages in Canada. So these rates ticked up after the July hike; they will after this hike; and if there’s another hike later this year, they’ll tick up again. A 0.75 percentage points increase in the interest rate on a C$800,000 mortgage would raise the annual interest costs by C$6,000.

Homeowners with variable-rate mortgages will now have to come up with more money to pay for their homes. And potential homebuyers are looking at steeper costs – something they will likely keep in mind, now that easy price gains may no longer be so easy, and that the Bank of Canada, rather than just warning about it, is actively working to deflate the housing bubble.

And the housing bubble in the US?Read… The US Cities with the Biggest Housing Bubbles

END

MEXICO

Wow! this will hurt Mexico: a huge 8.1 magnitude earthquake in Southern Mexico.

(courtesy zerohedge)

Mexico Shaken By “Most Powerful Earthquake In A Century”, At Least 15 Dead

Southern Mexico was shaken late Thursday by an 8.1-magnitude earthquake that killed at least 15 people, triggered a tsunami warning and was felt as far away as Mexico City . Despite the immense power of the tremor, which Mexican President Enrique Pena Nieto described as the most powerful earthquake in a century,” authorities said it had caused limited damage – but warned residents in affected areas to brace for aftershocks.

According to the Associated Press, the quake caused buildings to sway violently in Mexico’s capital more than 650 miles away from its epicenter. Residents fled buildings in their pajamas and gathered in frightened groups in the street.

While Mexico City avoided the widespread devastation of a 1985 quake that killed thousands, the tremor was strong enough to shatter windows at Mexico City airport and knock out power for one million residents, according to Reuters. For many, access has yet to be restored.

View image on TwitterView image on Twitter

: Damage reported at airport in following 8.4 magnitude earthquake.

A number of buildings suffered severe damage in parts of southern Mexico. Some of the worst initial reports came from Juchitan in Oaxaca state, where sections of the town hall, a hotel, a bar and other buildings were reduced to rubble. The cornice of a hotel fell in the southern tourist city of Oaxaca, a witness told ReutersThe tremor was felt as far away as neighboring Guatemala.

The death toll could rise as first responders look for more victims in the affected area. The government closed schools Friday in at least 11 states to check them for safety, according to the AP.

Tsunami warning as 8.2-magnitude  strikes off south-western  coast https://on.rt.com/8mi7 pic.twitter.com/6utkvslnir

— R…

Chiapas Gov. Manuel Velasco said that three people were killed in San Cristobal, including two women who died when a house and a wall collapsed. He asked that people who live near the coast leave their homes for protection in case there are aftershocks.

“There is damage to hospitals that have lost energy,” he said. “Homes, schools and hospitals have been damaged.”

One witness said his house moved “like chewing gum.”

“‘The house moved like chewing gum and the light and internet went out momentarily,’ said Rodrigo Soberanes, who lives near San Cristobal de las Casas in the southernmost state of Chiapas.”

Tabasco Gov. Arturo Nunez said two children had died in his state. One of them was killed when a wall collapsed. The other, a baby, died in a children’s hospital that lost electricity, cutting off the infant’s ventilator. Meanwhile, the town hall in San Cristobal was badly damaged.

Palacio Municipal de San Cristobal de Las Casas, afectado por sismo de 8.1. 

 

The Pacific Tsunami Warning Center said waves more than three feet above the tide level were measured off Salina Cruz. Smaller tsunami waves were observed in several other places. The center’s forecast said Ecuador, El Salvador and Guatemala could see waves of a meter or less. Hawaii and much of the South Pacific were expected to be unaffected. In neighboring Guatemala, President Jimmy Morales asked residents to stay calm while security crews checked for damage.

“We have reports of some damage and the death of one person, even though we still don’t have details,”Morales said. He said the unconfirmed death occurred in San Marcos state near the border with Mexico.

Lucy Jones, a seismologist in California who works with the U.S. Geological Survey, told the AP that the quake was expected.

“Off the west coast of Mexico is what’s called the subduction zone, the Pacific Plate is moving under the Mexican peninsula,” she said. “It’s a very flat fault, so it’s a place that has big earthquakes relatively often because of that.”

 

“There’s likely to be a small tsunami going to the southwest. It’s not going to be coming up and affecting California or Hawaii,” she said. “For tsunami generation, an 8 is relatively small.”

Pena Nieto and his team set up a response center to coordinate a response to the quake.

Estamos con el Presidente @EPN en  evaluando daños por  y coordinando acciones de atención.

Meanwhile, residents of nearby Veracruz are preparing for the possible landfall of category 2 Hurricane Katia, one of three active cyclones in the Atlantic basin. Further north, in Southeastern Florida, hundreds of thousands of Americans rushed to evacuate as Hurricane Irma, currently a category four storm, is expected to make a historic landfall this weekend.

* * *

Separately, in what some have described as a “fascinating” phenomenon, a mysterious glow called earthquake lights appeared in the skies above Mexico’s capital, baffling residents who had gathered outside to commiserate about the quake, according to RT. The lights could be seen flashing above Mexico City in hues of greens and white.

Little is known about the phenomenon, RT says, though it can sometimes be explained by exploding generators or power grids. Some scientists believe the tectonic movement of rocks like quartz generates a piezoelectric field, which produces flashes of light.

END

7. OIL ISSUES

 

(courtesy zerohedge)

 

Rig counts slump and now we are experiencing a drop in USA crude production

(courtesy zero hedge)

 

Rig Count Slumps To 3-Month Lows As US Crude Production Collapses

US crude production collapsed this week with most of Texas offline and we would expect rig counts to have continued to stabilize (if not fall) following the lagged track of WTI, and they did – oil rigs dropped 3 to 756, the lowest since June.

 

As a reminder, Crude production in the Lower 48 collapsed…

This is the biggest week-on-week fall since August 2012, when Hurricane Isaac shut in more than 1.3 million barrels a day of Gulf of Mexico production.

 

WTI prices tumbled today after China refinery cut headlines…

Uncertainty has the “market pulling in their horns ahead of the storm. They are worried about demand destruction,” Phil Flynn, senior market analyst at Price Futures Group, says. The market also “seems to be a little technically heavy”

8. EMERGING MARKET

VENEZUELA/USA

end

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

Euro/USA   1.2037 UP .0009/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 except london

USA/JAPAN YEN 107.85 DOWN 0.431(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 1.3196 UP .0093 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.2139 up .0031 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS FRIDAY morning in Europe, the Euro ROSE by 9 basis points, trading now ABOVE the important 1.08 level  RISING to 1.2037; / Last night the Shanghai composite CLOSED  DOWN 0.25 POINTS OR 0.01%     / Hang Sang  CLOSED  UP 145.55 POINTS OR 0.53% /AUSTRALIA  CLOSED DOWN 0.25% EUROPEAN BOURSES OPENED  ALL IN THE GREEN EXCEPT LONDON 

The NIKKEI: this FRIDAY morning CLOSED UP 121.70 POINTS OR 0.63%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 145.55 POINTS OR 0.53%  / SHANGHAI CLOSED DOWN 0.25 POINTS OR 0.01%   /Australia BOURSE CLOSED DOWN 0.25% /Nikkei (Japan)CLOSED UP 121.70 POINTS OR 0.63%   / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1347.75

silver:$18.10

Early FRIDAY morning USA 10 year bond yield:  2.059% !!! UP 1   IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

The 30 yr bond yield  2.679, UP 1 0 IN BASIS POINTS  from THURSDAY night.

USA dollar index early FRIDAY morning: 91.35 DOWN 32  CENT(S) from THURSDAY’s close. AND BREAKS RESISTANCE OF 92.00

This ends early morning numbers  FRIDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 2.799% UP 6 in basis point(s) yield from THURSDAY 

JAPANESE BOND YIELD: +.004%  DOWN 3/5   in   basis point yield from THURSDAY/JAPAN losing control of its yield curve/NOW NEGATIVE

SPANISH 10 YR BOND YIELD: 1.544% UP 5  IN basis point yield from THURSDAY 

ITALIAN 10 YR BOND YIELD: 1.959 UP 3 POINTS  in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 50 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.312% UP 1  IN  BASIS POINTS ON THE DAY

END

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.2036 UP .0009 (Euro UP 9 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 107.75 DOWN 0.529(Yen UP 53  basis points/ 

Great Britain/USA 1.3201 UP  0.0099( POUND UP 99 BASIS POINTS)

USA/Canada 1.2138 UP .0027 (Canadian dollar DOWN 27 basis points AS OIL FELL TO $48.21

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP  by 9 basis points to trade at 1.2036

The Yen ROSE to 107.75 for a GAIN of 53  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 99  basis points, trading at 1.3201/ 

The Canadian dollar FELL by 27 basis points to 1.2138,  WITH WTI OIL RISING TO :  $48.21

The USA/Yuan closed at 6.4944/
the 10 yr Japanese bond yield closed at +.004%  DOWN 3/5 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 1  IN basis points from THURSDAY at 2.059% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.679 DOWN 1 in basis points on the day /

Your closing USA dollar index, 91.26  DOWN 40 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 FRIDAY: 1:00 PM EST

London:  CLOSED DOWN  19.35 POINTS OR 0.26%
German Dax :CLOSED UP 7.35 POINTS OR 0.06%
Paris Cac  CLOSED DOWN 1.13 POINTS OR 0.02% 
Spain IBEX CLOSED UP 4.70 POINTS OR 0.05%

Italian MIB: CLOSED UP 54.15 POINTS OR 0.25% 

The Dow closed UP 13.01 OR 0.06%

NASDAQ WAS closed DOWN 37.68  POINTS OR 0.59%  4.00 PM EST

WTI Oil price;  48.21  1:00 pm; 

Brent Oil: 54.19 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.26 UP 40/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 40 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO  +0.312%  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:$47.58

BRENT: $53.70

USA 10 YR BOND YIELD: 2.052%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.672%

EURO/USA DOLLAR CROSS:  1.2034 up .0007

USA/JAPANESE YEN:107.78  DOWN  0.488

USA DOLLAR INDEX: 91.32  down 34  cent(s)/BREAKS RESISTANCE OF 92.00  

The British pound at 5 pm: Great Britain Pound/USA: 1.3200 : UP 96 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2141 down 30 BASIS pts 

German 10 yr bond yield at 5 pm: +0.312%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Kim, Don, Gary, & Irma Spark Dollar Exodus As Gold Gains Most Since Brexit

 

Catastrophic storms, worst week for macro data since July, debt ceiling to be cancelled, Gary Cohn off the list for Fed Chair (amid resignation chatter) and Korean hydrogen bombs… gold spikes, dollar dumps, bond yields plunge, and… stocks limp less than 1% lower…

 

Bonds (red) & Bullion (orange) surged on the week, stocks (blue) and the dollar (USDJPY green) tumbled…

 

Trannies were the only major index in the green on the week…Nasdaq was the week’s biggest loser…

 

 

Financials were the week’s biggest loser (rates lower and flatter and Gary Cohn) with the worst week in almost 6 months, along with Tech…

 

Financials in fact broke below their 50-, 100- and 200-DMA

 

FANG Stocks tumbled today, erasing any gains on the week…

 

Insurers bounced today as Irma was downgraded to a mere Cat-4 and a slight trajectory shift…Today was the best day for S&P Insurers Index since Feb 2016

 

VIX rose on the week – the first time in 4 weeks – but hovered, like the S&P, in a very narrow range after the initial Korea reaction on Tuesday…

 

Treasury yields tumbled on the week (with a bounce today)…

 

The bounce started at 10Y broke to a 2.01% handle…

 

The Dollar Index suffered its worst weekly drop since July 2016…

 

Yen gained the most against the greenback on the week…

 

Yuan was crushed today…after tagging 6.45 it appeared like someone stepped in…

 

After spiking to 18 month highs overnight… and the best week in over a decade

 

While WTI tumbled (biggest daily drop in 2 months) on China refinery cutbacks (WTI broke below its 50- and 100-DMA), it managed to hold on to gains for the week (the first weekly gain in the last six weeks) as RBOB slipped lower…

 

Gas prices remain high – but judging by the reversion in wholesale prices, may be peaking…

 

Bitcoin took another nosedive today after headlines about China closing local exchanges…

 

OJ Futures jumped most since October on the week…

 

And Finally, Gold extended gains on the week – to complete the best 2-week rally since Brexit (June 2016)

end

 

Wholesale inventory rise but sales drop.  This may temporarily help in Q3 but they will pay for it in Q$

(courtesy zerohedge)

Wholesale Inventory Ratio Jumps To Highest Since November As Sales Slide

Wholesale Sales has fallen for 4 of the last 5 months with July sales dropping 0.1% MoM from June. While sales dropped, inventories surged 0.6% MoM, pushing the inventory-to-sales ratio to 1.30x – the highest since before the election(Nov 2016).

Year-over-year inventories growth is the highest since September 2015 as Sales growth slows…

 

The absolute wholesale trade “gap” is on the rise once again…

 

And with sales down and inventories spiking in July, the ratio has pushed back higher – highest since Nov 2016…

 

So while this may help Q3 GDP (inventories), the hangover is coming.

END

 

The House passes the debt ceiling government funding by suspending it for another 3 months.  However they will probably have 6 months to pass another debt ceiling limit.  Harvey relief funds were also passed

 

(courtesy zerohedge)

 

Can Kicked: House Passes Debt Ceiling, Government Funding, $15Bn Storm Relief Package

After the Senate passed Trump’s “pivotal” bill to extend the debt ceiling by three months, while buying the government enough time to avoid shutdown until December 8, as well as $15 billion in funding for storm relief, moments ago the the package got a majority of the House to vote on it…

  • HOUSE HAS VOTES TO CLEAR DEBT LIMIT EXTENSION, VOTE CONTINUES

… officially kicking the can on the government shutdown until mid-December, while buying the Treasury enough time until some time in March before it once again runs out of cash.

end

Thursday night:

 

40% of all gas stations are now out of gas

 

(courtesy zero hedge)

40% of Miami/Ft Lauderdale gas stations are now out of gas:

Authored by Mike Shedlock via MishTalk.com,

As Hurricane Irma nears Florida, everyone is in a rush to fill up their tanks. About 40% of the gasoline stations in the Miami-Fort Lauderdale region are now without fuel. Floridians have turned to the Crowd-Sourced ‘Gas Buddy’ App to determine which stations still have gas.

The above image from the web version of Gas Buddy Tracker. Zoom into the area you’re looking for gas to see the red and green symbols indicating fuel shortages. Gas Buddy says the mobile app is more accurate.

Patrick DeHaan, the senior petroleum analyst at Gas Buddy, said their newest feature – the Gas Availability Tracker – has now been rolled out to those who could be affected by Hurricane Irma in Florida, Georgia and the Carolinas.

 

“The tool seeks to help motorists in need to find gasoline, and certainly in some cases. will also help motorists find stations that have power,” DeHaan said.

 

The app was developed during Hurricane Harvey in Texas. People can log in to view gas stations in their area. A red fuel pump icon indicates the station currently has gas. A red lightning bolt icon indicates the station has power, especially helpful for those in areas affected by power outages.

 

The data is largely crowdsourced by users who submit information through the app.

 

Florida Gov. Rick Scott announced in Miami that he’s asked the governors of Alabama and Georgia to waive trucking regulations so tankers can get fuel into the city, which is experiencing one of the largest shortages statewide as residents prepare for the hurricane’s landfall.

 

He told residents of the Florida Keys that “we’re doing everything to get fuel to you as quickly as possible.” Tourists are under a mandatory evacuation order, which began Wednesday morning.

 

Residents will then be ordered to evacuate, but the fuel shortage is putting a hitch in that.

Governor Promotes Gas Buddy, Expedia, Google Maps, Xfinity

TechCrunch reports As Irma nears, Florida Governor tells residents to use Gas Buddy, Expedia, Google Maps.

Speaking at a press conference this morning, Florida Governor Rick Scott told state residents to turn to apps and other online resources, including Gas Buddy, Google Maps, Expedia and Comcast’s Xfinity Wi-Fi hotspot finder, to help them find fuel, navigate safely, and stay connected both ahead of and following Hurricane Irma’s arrival.

 

The lack of readily available gasoline, in particular, has been a huge problem facing the state – something that Scott admitted he knew had been “frustrating” in this time of crisis. Not only have some gas stations had long lines, many simply keep running out of gas entirely, as people prepare for possible evacuations by topping off their tanks.

 

The company tells TechCrunch that it’s now seeing hundreds of gas stations across Florida, Georgia, North Carolina and South Carolina without fuel. It says the hardest hit cities are Miami (30% of stations are out of gas), West Palm Beach (29%), Fort Myers-Naples (20%), Tampa (13%), and Orlando (9% are out.)

 

The app has seen a ton of usage following Harvey and ahead of Irma – its App Store ranking has jumped 150 spots over the past week or so, and is now in the top 50 Overall.

 

In addition to Gas Buddy, Scott noted that the state was working with Google to keep its mapping app updated with the most current information on road closures.

 

“Real time traffic information and evacuation routes is available at FL511.com,” said Scott. “We have traffic cameras on every major roadway in the state and are clearing traffic issues in real-time so we can keep people moving,” he continued. “We’re coordinating with Google’s emergency response team to prepare to close roads in Google Maps in real-time in the event that Hurricane Irma forces a closure of any roads in the aftermath of the storm,” Scott added.

 

Of course, the Google-owned Waze app may be more useful ahead of Irma’s landfall. The crowdsourced navigation tool is great for finding out about traffic incidents, road closures, speeds, and other hazards in real-time as well. This information is additionally fed into Google.org’s Crisis Maps, which displays other details like precipitation, public alerts, evacuation routes, shelters, forecasts and more.

 

“If you need a hotel, go to Expedia.com/florida,” said Scott. “Expedia is working on hotel occupancy in real-time.”

 

Scott noted that Comcast was opening 137,000 hotspots to help people stay connected, too. These Xfinity Wi-Fi hotspots will be made free across the state for non-Xfinity customers and subscribers alike. AT&T, Verizon, and T-Mobile are all setting up additional Wi-Fi hotspots as well, he said.

Hurricane Preparation

The Florida.Gov website has updates on Hurricane Irma Preparedness.

Today, Governor Rick Scott received a full update on Hurricane Irma from the State Emergency Operations Center. The Governor is traveling the state today to meet with local officials, ensure communities have all the resources they may need, and to encourage families and visitors to be fully prepared. Evacuation orders have been issued in Monroe County and additional orders are expected as the storm nears the state. The Governor will continue to be in constant communication with state and local emergency management officials, city and county leaders, and utility officials who are also working to ensure the state is prepared to respond to any potential impacts from Hurricane Irma.

Evacuation Notices and Orders

  • Broward County has issued voluntary evacuations of mobile homes and low-lying areas beginning today.
  • Collier County has issued voluntary evacuations of Marco Island beginning today.
  • Monroe County has issued mandatory evacuations for visitors beginning this morning. Mandatory evacuations for residents will begin this evening.
  • Individuals with special needs started being evacuated from Miami-Dade County this morning.
  • Additional evacuations are expected throughout the state. All Floridians should pay close attention to local alerts and follow the directions of local officials.
  • To find available shelters by county, visit floridadisaster.org/shelters

 

end

 

Thursday night:  Georgia and South Carolina will also be hit with storm surges and flooding

 

(courtesy zerohedge)

Not Just Florida: Georgia And South Carolina Face “Catastrophic Storm Surge”

As Hurricane Irma looks to be hurdling straight for a direct hit on Southern Florida, meteorologists from Weather Underground are warning that the most devastating impacts of the storm could be felt much further north in towns along the coast of Georgia and South Carolina where the storm surge could be a catastrophic 20-28 feet high in certain areas.  To put that in perspective, Hurricane Katrina in 2005 set a record for the largest storm surge ever recorded along the U.S. coast at 27.8 feet.

If Irma makes a trek up the East Coast from Miami to southern South Carolina as a Category 3 or 4 hurricane, as the models currently suggest, the portions of the coast that the eyewall touches will potentially see a massive and catastrophic storm surge, breaking all-time storm surge records and causing many billions of dollars in damage. Even areas up to a hundred miles to the north of where the center makes landfall could potentially see record storm surges. The area of most concern is the northern coast of Florida, the coast of Georgia, and the southern coast of South Carolina, due to the concave shape of the coast, which will act to funnel and concentrate the storm surge to ridiculous heights. If we look at wunderground’s storm surge maps for the U.S. East Coast, we see that in a worst-case Category 3 hurricane hitting at high tide, the storm tide (the combined effect of the storm surge and the tide) ranges from 17 – 20’ above ground along the northern coast of Florida, and 18 – 23 feet above ground along the Georgia coast. If Irma is a Cat 4, these numbers increase to 22 – 28 feet for the coast of Georgia. This is a Katrina-level storm surge, the kind that causes incredible destruction and mass casualties among those foolish enough to refuse to evacuate.

So, which coastal towns are most at risk?  As Weather Underground notes, Savannah in Southern Georgia could see a surge of up to 23 feet if Irma strikes as a Category 3 storm.  Obviously, the surge would be even larger if Irma manages to maintain Cat-4 winds.

Maximum of the “Maximum Envelope of Waters” (MOM) storm tide image for a composite maximum surge for a large suite of possible mid-strength Category 3 hurricanes (sustained winds of 120 mph) hitting at high tide (a tide level of 3.5’) along the coast of Georgia. What’s plotted here is the storm tide–the height above ground of the storm surge, plus an additional rise in case the storm hits at high tide. Empty brownish grid cells with no coloration show where no inundation is computed to occur.Inundation of 19 – 23’ will occur in a worst-case scenario along most of the coast.

 

Meanwhile, further north in Charleston, SC the surge could also exceed 20 feet and flood areas many miles inland from the shore.

Maximum of the “Maximum Envelope of Waters” (MOM) water depth image for a composite maximum surge for a large suite of possible mid-strength Category 3 hurricanes (sustained winds of 120 mph) hitting at high tide (a tide level of 2.5’) along the coast of South Carolina near Charleston. If Irma is a Cat 3 in South Carolina, a worst-case 17 – 21’ storm tide can occur.

 

Of course, as we noted earlier, this data has already prompted the governors of Georgia and South Carolina to declare a state of emergency and to call for citizens of coastal areas to begin evacuations immediately.

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

I’ve expanded the state of emergency to 24 additional counties & ordered mandatory evac for some. Read more —> http://bit.ly/2eJfVAo 

View image on TwitterView image on Twitter

NEW: South Carolina Gov. Henry McMaster asks citizens to prepare for Hurricane Irma; declares state of emergency http://cbsn.ws/2w7LdHz 

 

Ironically, even though Irma will be her strongest when washing ashore in Southern Florida, Weather Underground notes that deep water just offshore helps to subdue the storm surge from Miami to Fort Lauderdale…

South Florida is not at as great of a risk of a high storm surge, since there is deep water offshore, and the mound of water the hurricane piles up can flow downward into the deep ocean instead of getting piled up on land. The worst-case storm tide from a Category 4 hurricane for the coast from Miami Beach to West Palm Beach is 7 – 9 feet. However, that deep water allows much larger waves to build up, and Irma will create big waves that will pound the coast and cause heavy damage. There is a region of the coast from downtown Miami southwards, including Biscayne Bay, where the water is shallow, and the storm tide can be up to 15 feet in a Category 4 hurricane. The Great Miami Hurricane of 1926, a Category 4 storm, brought a 10 – 15’ storm surge to the coast of Miami along Biscayne Bay.

 

…which also should help to somewhat protect the coast on the western shores of Florida.

The Atlantic (Florida Straits) side of the Florida Keys also has deep water offshore, limiting the maximum storm surge in a Cat 4 to 8 – 10 feet. The risk is higher on the west (Florida Bay) side of the Keys, where the water is shallower; a worst-case storm tide of 12 – 15 feet can occur there. Any storm tide over six feet is extremely dangerous in the Florida Keys, due to the low elevation of the land. The greatest risk in the Keys, if the current NHC forecast verifies, would be on the Florida Bay (west) side of the Upper Keys, after the center of Irma moves just to the north. The counter-clockwise flow of air around the hurricane will then bring winds out of the southwest that will drive a large storm surge into the west side of the Upper Keys.

 

Be that as it may, with winds in excess of 120 mph expected pretty much across the entire state of Florida, one might be best suited to prepare for the worst no matter how close you are to the shore.

European model wind gust swathe covers Florida peninsula in hurricane force wind gusts …  continues up I-75 thru Georgia.

 

END

 

 

Friday morning;

 

Irma is now a Cat 4 and heading for the Florida keys and then up directly dividing east and west Florida.  Just about all major Floridian cities will be hit hard.  Millions will be without power.

 

(courtesy zerohedge)

Millions To Be Without Power As “Deadly, Devastating” Irma Closes In On Florida

After “carving a path of destruction through the Caribbean,” a path which left 90% of Barbuda “uninhabitable” and nearly a million people without power in Puerto Rico, a slightly weakened, but still devastatingly massive Category-4 Hurricane Irma is closing in on Florida.  Here is the latest from the National Hurricane Center:

Irma is forecast to remain in a favorable warm water, light shear environment for the next 36-48 h.  The intensity guidance shows a slow weakening during this time, but Irma is expected to remain at least a Category 4 hurricane until landfall in Florida.  After landfall, a fairly quick decay in maximum winds is expected due to land interaction and increased shear, although Irma’s large wind field is likely to still produce hurricane-force winds over a large area.  There are two caveats to the intensity forecast.  First, some additional weakening could occur during the eyewall replacement, followed by re-intensification as the cycle completes.  Second, the ECMWF, UKMET, and NAVGEM forecast a track over or close to the coast of Cuba that is not currently a part of the track forecast. If this occurs, Irma could be weaker than currently forecast along the later parts of the track.

 

KEY MESSAGES:

 

1. Irma is an extremely dangerous Category 4 hurricane and will continue to bring life-threatening wind, storm surge, and rainfall hazards to the Turks and Caicos Islands and the Bahamas through Saturday.  Heavy rainfall is still possible across portions of Hispaniola through today.  Hurricane conditions will also spread over portions of the north coast of Cuba, especially over the adjacent Cuban Keys through Saturday.

 

2. Severe hurricane conditions are expected over portions of the Florida peninsula and the Florida Keys beginning Saturday night. Irma is likely to make landfall in southern Florida as a dangerous major hurricane, and bring life-threatening storm surge and wind impacts to much of the state.  A Hurricane Warning is in effect for southern Florida, the Florida Keys, Lake Okeechobee, and Florida Bay, while Hurricane Watches have been issued northward into central Florida.

 

The NHC is currently forecasting that Irma will make its Florida landfall sometime late Saturday night or early Sunday morning as a powerful Cat-4 storm…

 

packing winds of 155 mph

FORECAST POSITIONS AND MAX WINDS

  • INIT  08/0900Z 21.7N  73.8W  135 KT 155 MPH
  • 12H  08/1800Z 22.1N  75.7W  135 KT 155 MPH
  • 24H  09/0600Z 22.6N  77.8W  135 KT 155 MPH
  • 36H  09/1800Z 23.3N  79.4W  135 KT 155 MPH
  • 48H  10/0600Z 24.5N  80.4W  130 KT 150 MPH
  • 72H  11/0600Z 28.0N  81.5W   90 KT 105 MPH…INLAND
  • 96H  12/0600Z 33.0N  84.0W   40 KT  45 MPH…INLAND
  • 120H  13/0600Z 36.0N  87.0W   25 KT  30 MPH…INLAND

 

and a storm surge of up to 10 feet in the Florida Keys.

STORM SURGE:  The combination of a dangerous storm surge and the tide will cause normally dry areas near the coast to be flooded by rising waters moving inland from the shoreline.  The water is expected to reach the following HEIGHTS ABOVE GROUND if the peak surge occurs at the time of high tide…

  • Jupiter Inlet to Bonita Beach, including Florida Keys…5 to 10 ft
  • Bonita Beach to Venice…3 to 5 ft
  • Jupiter Inlet to Sebastian Inlet…3 to 6 ft

 

The deepest water will occur along the immediate coast in areas of onshore winds, where the surge will be accompanied by large and destructive waves.  Surge-related flooding depends on the relative timing of the surge and the tidal cycle, and can vary greatly over short distances.  For information specific to your area, please see products issued by your local National Weather Service forecast office.

 

Meanwhile, the strong winds are expected to take a toll on Florida’s power grid leaving a million or more people without power, potentially for weeks.  Per Reuters:

Hurricane Irma poses a bigger menace to power supplies in Florida than Hurricane Harvey did in Texas because Irma is packing near 200 mile-per-hour winds (320 km/h) that could down power lines, close nuclear plants and threats to leave millions of homes and businesses in the dark for weeks.

 

Irma’s winds rival the strongest for any hurricane in history in the Atlantic, whereas Harvey’s damage came from record rainfall. Even as Houston flooded, the power stayed on for most, allowing citizens to use TV and radio to stay apprised of danger, or social media to call for help.

 

“When Harvey made landfall in Texas it made it fully inland and weakened pretty quickly. Irma, however, could retain much of its strength,” said Jason Setree, a meteorologist at Commodity Weather Group.

 

Most Florida residents have not experienced a major storm since 2005, when total outages peaked around 3.6 million during Hurricane Wilma. Some of those outages lasted for weeks.

 

Setree compared the projected path of Irma to Hurricane Matthew in 2016, which knocked out power to about 1.2 million FPL customers in October.

 

“Should Irma’s worst fears be realized, our crews will likely have to completely rebuild parts of our electric system. Restoring power through repairs is measured in days; rebuilding our electric system could be measured in weeks,” FPL Chief Executive Eric Silagy said.

 

end

 

Markets will not like this.  Now Trump hates Gary Cohn who may be pressured to leave the White House.  So not only will he lose the chance at becoming Fed Chairman, he will not have the ear of the President

 

(courtesy zero hedge)

 

Trump Now “Hates” Gary Cohn, Who “May Be Pressured To Leave White House”: Report

When Gary Cohn criticized Trump’s response to the Charlottesville tragedy, he set off a sequence of events which not only reportedly cost the former Goldman COO his future position as Fed chair, but – according to an overnight report from Reuters – his job as Trump’s chief economic advisor.

Extending on recent reports from the WSJ that Gary Cohn has lost Trump’s good graces in recent days, Reuters focuses on that the newly fraying relationship between U.S. President Donald Trump and top White House economic adviser Gary Cohn, which has raised questions about how long Cohn will stay in his job, according to two people with close ties to the White House. Several sources quoted by Reuters said Cohn had long planned to stay in his post for at least a year. But one source said concern had grown among Cohn’s allies over the past 24 hours that he might be pressured to leave.

The recent concerns stem from a report in the Wall Street Journal that Cohn was unlikely to be nominated by Trump as a potential successor to Fed Chair Janet Yellen. Trump had mentioned Cohn in July for the job. Cohn resigned as president of Goldman Sachs to join the new administration.

“The calculus has shifted for Gary. He’s gone, essentially, from untouchable to possibly being bounced out,” the source said. “The message is clear that suddenly Cohn’s job in the White House has real downside risk.”

As reported at the time, the formerly sterling relationship between the two men broke down last month when Cohn crossed Trump, critizing the president in a Financial Times interview for his response to the violence at a rally organized by white nationalists in Charlottesville, Virginia, in which one woman died.

Cohn, who is Jewish, told the newspaper the administration “must do better” in condemning neo-Nazis and white supremacists.

One source close to the White House said Trump wanted to fire Cohn. “Hates him. But that could be ephemeral,” the source said.

While Cohn’s FT interview was intended to signal that Cohn had no plans to leave the White House and planned to push ahead with his signature project, tax reform, sources said the comments upset Trump.

Trump has gone hot and cold on other advisers, some of whom have stayed, while others have left.

“Relationships change,” said a third source with close ties to the White House. “If Gary sticks around, I fully expect that Gary’s relationship with the president will improve.”

 

People who know Cohn say that when he does leave the White House, he wants it to be on his own terms.

Meanwhile, the official narrative is that all remains well: a White House official said Cohn was focused on his job, especially tax reform.

“Gary is focused on his responsibilities as the director of the National Economic Council, including a once-in-a-lifetime opportunity to deliver meaningful tax reform that creates jobs and grows the economy,” the official said.

Perhaps… but not according to the market: as recently as late August week Gary Cohn was seen as the frontrunner to succeed Janet Yellen.  As Of this moment, he is barely in the top 3 according to PredictIt.

 

 END
The Amazon effect strikes again after Target announces cuts to thousands of items
(courtesy zero hedge)

Retail Bloodbath After Target Announces Price Cuts On “Thousands Of Items”

Amazon may have the most razor thin margins in the entire retail world, but that doesn’t mean that its peers can’t catch up as the global race to the deflationary bottom enters its final stage.

Moments ago, that’s precisely what Target did when it announced on its blog that it has taken a “close look” at products most important to its customers to ensure they’re priced right daily, and has cut prices on “thousands of items.” The company also unveiled that it has “eliminated more than two-thirds of our price and offer call-outs so you can more easily spot the savings” and that it is not “ditching promotions.”

In short, Target just pre-preannounced that it will very shortly be guiding both margins and earnings much lower. The only question is whether Amazon will allow it to expand revenues by enough to offset the bottom line drop.

Judging by the market, the answer is no…

… and not only at Target, but the entire retail sector has been similarly crushed as Amazon takes another multi-billion chunk in market cap from of its comeptition.

Below is the full Target blog post that inspired today’s retail bloodbath:

Pssst… Here’s How to Save Big During Your Target Run (And There’s No Math Required!)    

 

If you love Target for incredible exclusive brands, super-chic collaborations and one-stop shopping for pretty much everything on your list, you’re going to really love this: We’ve lowered our prices on thousands of items, from cereal and paper towels to baby formula, razors, bath tissue and more.

 

Sure, there’s nothing like that victorious rush of nabbing a spectacular deal, but having to figure out what “As Advertised!” and “Temporary Price Cut” mean or waiting for just the right sale to roll around can be, well … super frustrating.

 

So, we’ve put our prices and promotions under the microscope. Our mission? To cut through the clutter and provide guests with great everyday value, while continuing to offer additional savings on the right products at the right times.

 

“We want our guests to feel a sense of satisfaction every time they shop at Target,” says Mark Tritton, Target executive vice president and chief merchandising officer. “Part of that is removing the guesswork to ensure they feel confident they’re getting a great, low price every day. We’ve spent months looking at our entire assortment, with a focus on offering the right price every day and simplifying our marketing to make great, low prices easy to spot, all while maintaining sales we know are meaningful to guests. And guests are taking note, appreciating much easier, more clear—and more consistent savings—at Target.”

 

Ready for a few tips for saving big every day at Target?

  • Fill your cart with confidence. Go ahead, choose from thousands of items, from milk and eggs to crayons, markers and more … and simply drop them in your cart. We’ve taken a close look at the products that are most important to our guests, making sure they’re priced right daily.
  • Watch for simple, easy messages. Say goodbye to all those little signs and ads letting you know about the “Weekly Wow!” or “Bonus Offer.” We’ve eliminated more than two-thirds of our price and offer call-outs so you can more easily spot the savings.
  • Delight in the right sales. Don’t worry—we’re not ditching promotions! We’re just making sure to offer only our best, most compelling sales—when it makes the most sense for our guests.

 

Here’s to even happier Target runs—and a break for your budget!

Absolutely brilliant!! 143 million USA social security numbers has been hacked at Equifax.  Also included are credit cards  and driving licences etc. Lawsuits will start flying!

(courtesy zero hedge)

Massive Data Breach At Equifax: As Many As 143 Million Social Security Numbers Hacked

Credit-reporting company Equifax shocked investors, and more than a third of America, when it announced on Thursday afternoon that hackers had breached its data systems, compromising the personal information of approximately 143 million U.S. consumers. The information accessed “primarily includes names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers.” In other words, pretty much everything that should have been hidden behind an n-number of firewalls, is now available to the dark net’s highest bidder.

The company, which in delightful irony offers credit-monitoring and identity-theft protection products to “guard consumers’ personal information”, said that it had learned of the incident on July 29, 2017, at which point it reported the intrusion to law enforcement and contracted a cybersecurity firm to conduct a forensic review: based on the company’s investigation, the unauthorized access occurred from mid-May through July 2017.

As if 143 million leaked social security numbers wasn’t enough, Equifax said that criminals also accessed credit card numbers for approximately 209,000 U.S. consumers, and certain dispute documents with personal identifying information for approximately 182,000 U.S. consumers. But wait, there’s more: the company also identified unauthorized access to limited personal information for certain UK and Canadian residents.

The good news, is that according to Equifax, “this issue has been contained.” The bad news is that, well, as many as 143 million social security numbers have been hacked. So no, it’s not contained.

“This is clearly a disappointing event for our company, and one that strikes at the heart of who we are and what we do,” Equifax Chief Executive Richard Smith said in prepared remarks. “I apologize to consumers and our business customers for the concern and frustration this causes.”

In a Q&A posted on the company’s website, the management team revealed what’s really important with the following question and answer:

Does this cybersecurity incident impact your capital allocation priorities going forward?

 

Our capital allocation priorities are unchanged at this time. As we have previously indicated, our investment
priorities in order of importance are: (1) internal investment; (2) dividends; (3) acquisition; and (4) share
repurchase. We do, however, expect to increase our capital spending in an effort to further accelerate IT
infrastructure, systems and data security and resiliency improvement actions
.

Oh, good, because a hack involving 143 million SSNs is one of those cases where capex probably should have taken precedence over stock buybacks.  Don’t worry though, because as it explains in the same quesionnaire, “Equifax remains committed to delivering on the long term financial model of 7-10% revenue growth and 11%- 14% growth in Adjusted EPS on average over a business cycle. Equifax’s long term financial model reflects our continuing fundamental ability to utilize our unique and differentiated data assets and leading analytical capability to deliver high value products and services to our customers.”

Uhm, after this… what customers?

After falling as much as 12% in the after hours, EFX stock had stabilized some 7% lower.

And now the best news: with Putin clearly behind this hack – as “all 17 intelligence agencies”, WaPo and NYT will shortly “confirm” – the US economy is about to undergo a renaissance as hundreds of millions of (unsolicited) purchases prompt a golden age for US retailers while sending Amazon market cap into the $1 trillions…  even if the shipping address for said purchases happen to be small, frigid villages deep in the Russian taiga.

Full statement from Equifax here.

end

 

Simon Black discusses the above fiasco

 

(courtesy Simon Black/SovereignMan)

With Scumbags Like This, It’s Easy To Understand Why Bitcoin Is At $4400…

Authored by Simon Black via SovereignMan.com,

File this one away under ‘utterly repulsive’.

As you probably heard, yesterday the US-based credit reporting agency Equifax announced a massive cyberattack that affects as many as 143 million consumers.

Names. Birth dates. Addresses. Social Security Numbers. Even some credit card numbers were stolen.

Literally over one third of the entire US population is at risk of identity theft now thanks to Equifax’s bungling.

Bear in mind this is the THIRD TIME in 16 months that Equifax has been hacked– there was another breach earlier this year, and another in May 2016.

Even worse– this wasn’t an overnight attack. Hackers spent MONTHS probing the Equifax network, burrowing deeper into the system and gaining access to more and more data with each attempt.

Yet Equifax’s defenses failed to detect anything.

Finally on July 29, a whopping TEN WEEKS after the attacks started, Equifax realized that something was wrong.

Senior executive responded to the data breach by… selling their stock.

Yes, in the days following their discovery of the hack, three of the company’s executives sold nearly $2 million worth of stock.

Bear in mind, these “insider sales” have to be reported to the Securities and Exchange Commission, so there is a public record every time a company executive sells stock.

These executives would have known this, and that the public would find out they sold their stock right after the data breach was discovered.

This suggests to me that these guys are either complete idiots… or they simply don’t care… both of which seem par for the course at Equifax.

Moreover, given that the company is responsible for making the SEC filings, it’s obvious that Equifax knew about these executives selling their stock. Clearly they don’t care either.

In another weak, spineless, immoral decision, Equifax waited six weeks between discovering the hack and informing the public.

I find this appalling.

Equifax has access to our most sensitive data. And by the way, they collect this data WITHOUT OUR CONSENT.

No credit reporting agency ever asked me if I’m OK with them storing every bit of information about me, including information that can easily be used to engage in potentially life-wrecking fraud.

And when this information was stolen, they sat on the news for weeks.

In what is perhaps the most insipid, pathetic apology in recent memory, Equifax CEO Richard Smith released the following zinger in prepared remarks:

“I apologize to consumers and our business customers for the concern and frustration this causes.”

This is the sort of insensitive, out-of-touch PR bullshit that makes people despise the system. How about a shred of raw honesty instead?

“Due to our utter incompetence and failure to learn from recent mistakes, we totally screwed 143 million people who never even consented to us monitoring them. And rather than even let them know right away, we quietly took care of ourselves first. We have that little respect for the public.”

The worst part about all of this is that you can’t opt out.

If you’re tired of Google tracking your every click across the Internet, for example, you can simply stop using their services (and start using competitors which don’t track you– like DuckDuckGo.com)

Or if you get tired of being screwed by the banks, you can choose to hold cash, buy pre-paid cards, or open an account overseas at a conservative, well-capitalized foreign bank.

Point is you can typically opt out of the system.

Except with the credit reporting system. If you get screwed by Equifax, you have almost no recourse.

There are three major credit reporting agencies– TransUnion and Experian being the other two– and they have a stranglehold over all consumer data.

Banks and credit card companies (among others) make heavy use of this data to decide whether or not to loan you money.

And this does make sense: it’s a lot easier to make a loan decision if you can review a potential borrower’s credit history.

But that’s all theory.

In practice, in addition to their utter incompetence when it comes to safeguarding data, the credit reporting agencies also have a LONG history of inaccuracy.

The US government’s Federal Trade Commission issued a report in 2013, in fact, showing that one in five Americans discovered a material error in his/her credit report.

That’s a pretty big failure rate for an industry that’s supposedly been in the business of maintaining accurate information SINCE 1899!

And that’s precisely the problem– the need for an accurate credit history is obvious. But the entire method behind gathering, storing, [not] verifying accuracy, etc. is totally antiquated.

It’s a slow, cumbersome, bureaucratic system that boasts business practices from the mid-20th century at best.

Think about it: it’s 2017. How absurd is it that consumers are still identified by the Social Security Numbers and birth dates?

With all of the digital technology we have at our disposal, is this the best that the credit reporting industry can come up with? Relying on a 9-digit number that was created in the 1930s? Seriously?

The complete lack of innovation in this industry ranks almost as highly as its incompetence and immorality.

It also means that credit reporting is RIPE for DISRUPTION.

The basic model in credit reporting is to properly identify consumers, collect information about their loan history, and make that history available to lenders.

All the tools required to do this in the digital world already exist.

For example, consumer loan payments could be published directly to the Blockchain, which would ensure objective reporting and 100% accuracy of your credit history.

Consumers could even have a choice whether or not to participate in this system.

There are so many tools available to fix these problems, none of which are being used by the Big Three reporting agencies.

That’s why they probably won’t be around in ten years.

And when you see how financial technology can be applied to other industries like Credit Reporting, it’s easy to understand just how big Blockchain and cryptocurrencies can become.

Do you have a Plan B?

end

 

You have to scratch your head on the following: how did 102 billion in credit card debt, student and auto loans just disappear.  Remember that this is an asset on somebody’s books:

 

(courtesy zerohedge)

 

$102 Billion In Credit Card Debt, Student And Auto Loans Was Just “Wiped Away”

While there were few surprises on the surface of today’s latest monthly Federal Reserve consumer credit report, which showed that in July total consumer credit increased by $18.5 billion, more than the $15.0 billion expected, on the back of a $2.6 billion increase in revolving credit coupled with $15.9 billion in non-revolving credit…

… there was one quite notable observation which stood out in today’s report: a huge historical revision from November 2015 to December 2015, as a result of which some $102 billion in consumer credit was wiped out from the historical record, as shown below, first in revolving, i.e. credit card, debt which was “reduced” by $27 billion:

At the same time, non-revolving, or student and auto loans, credit was also revised lower by a far greater $75 billion, or from $2.83 trillion to $2.76 trillion.

As a result of today’s peculiar revision, which was not explained by the Fed, total consumer credit declined by roughly $102 billion from $3.856 trillion as of June 2017, or the last month’s pre-revision data point, to $3.754 trillion as of July 2017, which was published today.

Since this is a book-keeping equivalency, and since said consumer credit liaiblity is someone else’s asset, we would be fascinated to learn just which entity or entities saw their assets “revised” lower by over $100 billion, and why.

Oh, and it also means that all those headlines about revolving credit having surpassed the financial crisis peak of $1.022 trillion as of July 2008 are now wrong, and the previous record remains safe for at least several more months, because as of today revolving credit has been revised down to $994.5 trillion, meaning that US household credit card debt has just been mysteriously revised by $27 billion less.

Which reminds us of what this website first reported one month ago, when we observed that “A Quarter Trillion Dollars In US Savings Was Just “Wiped Away” as $226 billion in personal savings magically disappeared following the latest data revision.

To summarize: in the past two month $262 billion in personal savings “vaporized”, and were offset by $102 billion in personal debt which likewise was just “revised” away. To all those trying to keep up with the US economy, and these rather sizable data revisions, good luck.

 

Let us close out the week with this offering from Greg Hunter of USAWatchdog

 

(courtesy Greg Hunter..)

Debt Deal with Dems, What Does Trump See Coming, Dollar Dump Gold Pop

By Greg Hunter On September 8, 2017 In Weekly News Wrap-Ups

President Donald Trump broke with the Republicans who have been overtly and covertly blocking him to get a short- term debt deal done. Some of the money is going to help the victims of Hurricane Harvey, but there is also a push to get the so-called debt ceiling repealed. Some in the GOP are furious, but this is the game of politics we find in Washington.

Why is President Trump in such a hurry to get a debt deal done even for a short three months? What does he seeing coming that the rest of do not see. Will it be the devastation coming for Hurricane Irma that looks like it will crush Florida? Is it the bills stacking up from Hurricane Harvey that one Texas Congressman says the total loss will be $1 trillion? Will Irma also cost $1 trillion in total damages? Are we going to strike North Korea? Is there a plan for wider war? The fact is there is a lot going on behind the scenes, and I find it odd that Trump jumped on a debt deal and got very little for it according to some.

So, if we do repeal the debt ceiling, that many call a farce because we keep raising it, what will be the downside? Look no further than the dollar which is selling off on the global stage. What’s the upside? Look at gold since January and it’s up and up big. That means inflation is coming right along with the deflation that is also coming, according to Charles Nenner. So, prepare for inflation in prices for things you need and deflation or debt destruction. Gregory Mannarino, founder of TradersChoice.net, says the Fed is stuck and it will explode it’s balance sheet as it is forced to buy everything.

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

Video Link

https://usawatchdog.com/debt-deal- with-dems-what-does-trump-see-coming-dollar-dump-gold- pop/

(To Donate to USAWatchdog.com Click Here )

end

 

that about does it for tonight

 

HAVE A GREAT WEEKEND

I will see you MONDAY  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: