Sept 26/COMEX OPTIONS EXPIRY CROOKS IN ACTION TODAY LOWERING THE PRICE OF GOLD BY $9.65 TO $1298.45 AND SILVER BY 24 CENTS DOWN TO $16.87/SILVER DEMAND AT COMEX REMAINS STRONG AS 32.7 MILLION OZ ARE STANDING FOR PHYSICAL/

GOLD: $1298.45 DOWN   $9.65

Silver: $16.87  DOWN 24 CENT(S)

Closing access prices:

Gold $1294.00

silver: $16.80

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: $1317.93 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1310.30

PREMIUM FIRST FIX:  $6.78 (premiums getting larger)

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SECOND SHANGHAI GOLD FIX: $1314.74

NY GOLD PRICE AT THE EXACT SAME TIME: $1311.90

Premium of Shanghai 2nd fix/NY:$2.84  

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LONDON FIRST GOLD FIX:  5:30 am est  $1306.80

NY PRICING AT THE EXACT SAME TIME: $1306.05

LONDON SECOND GOLD FIX  10 AM: $1300.05

NY PRICING AT THE EXACT SAME TIME. 1300.55

For comex gold:

SEPTEMBER/

NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 10 NOTICE(S) FOR  1000  OZ.

TOTAL NOTICES SO FAR: 93 FOR 9300 OZ  (0.2892 TONNES)

For silver:

SEPTEMBER

 157 NOTICES FILED TODAY FOR

785,000  OZ/

Total number of notices filed so far this month: 6,460 for 32,300,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

Let us have a look at the data for today

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In silver, the total open interest FELL BY 712 contracts from  188,644 DOWN TO 187,932 DESPITE THE GOOD SIZED RISE IN PRICE THAT SILVER UNDERTOOK IN YESTERDAY’S TRADING (UP 16 CENTS ).IT SURE LOOKS LIKE WE GOT A TINY AMOUNT OF SILVER SHORTS TO COVER. TODAY IS OPTIONS EXPIRY ON THE COMEX AND ALWAYS THEY RAID LIKE CLOCKWORK.

RESULT: A SMALL FALL IN OI COMEX  WITH THE 16 CENT PRICE RISE. IT LOOKS LIKE WE HAD A TINY AMOUNT OF BANKER SHORTS COVERING EVEN THOUGH THEY WERE RAIDING TODAY.

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.939 BILLION TO BE EXACT or 134% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 157 NOTICE(S) FOR 785,000  OZ OF SILVER

In gold, the open interest ROSE BY A LESS THAN EXPECTED 5,971 CONTRACTS DESPITE THE HUGE  RISE  in price of gold ($14.00 GAIN WITH YESTERDAY’S COMEX TRADING.  The new OI for the gold complex rests at 558,350.  WE  HAVE NOW ENTERED OPTIONS EXPIRY WEEK AND TODAY WAS THE FINAL DAY FOR COMEX OPTIONS  SO IT WAS NOT SURPRISE THAT THE CROOKS RAIDED TODAY.

 

Result: A SMALL INCREASE IN OI WITH THE GOOD SIZED  RISE IN PRICE IN GOLD ($14.00).

we had: 10 notice(s) filed upon for 1000 oz of gold.

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

GLD:

Tonight , no changes in gold inventory at the GLD

 

Inventory rests tonight: 856.08 tonnes.

SLV

Today: a no changes in inventory:

INVENTORY RESTS AT 326.757 MILLION OZ

end

.

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

1. Today, we had the open interest in silver FELL BY 712 contracts from 188,932  DOWN TO 187,932 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . IT SURE SEEMS THAT SOME OF OUR BANKER SHORTS THOUGHT TO COVER EVEN THOUGH THEY KNEW THAT THEY WERE RAIDING TODAY.

RESULT:  A SMALL SIZED DROP IN SILVER OI  AT THE COMEX WITH THE GOOD SIZED RISE IN PRICE OF 16 CENTS IN YESTERDAY’S TRADING. 

(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 MONDAY night/TUESDAY morning: Shanghai closed UP 2.03 POINTS OR 0.06%   / /Hang Sang CLOSED UP 12.67 POINTS OR 0.05%/ The Nikkei closed UP 67.38 POINTS OR 0.33%/Australia’s all ordinaires CLOSED DOWN 0.21%/Chinese yuan (ONSHORE) closed WELL DOWN at 6.6305/Oil DOWN to 51.97 dollars per barrel for WTI and 58.63 for Brent. Stocks in Europe OPENED MOSTLY MIXED TO RED . Offshore yuan trades  6.6273 yuan to the dollar vs 6.6305 for onshore yuan. NOW THE OFFSHORE MOVED MUCH STRONGER  TO THE ONSHORE YUAN/ ONSHORE YUAN HUGELY WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER  DOLLAR. CHINA IS NOT VERY HAPPY TODAY 

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea

North Korea is following through on its threats to shoot down USA fighter jets and bombers that travel near its airspace as it boosts its coastal defenses”

( zerohedge)

ii)McMaster stats that the USA has 4 or 5 options dealing with North Korea some worse than others

( zerohedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

An excellent commentary on the Kurdish situation in Iraq, Syria and Turkey and how they want statehood and eventually be combined into one country

(courtesy E Magnier )

 end

6 .GLOBAL ISSUES

 

i)Bali, Indonesia

Bali, a huge destination for tourists must be cognizant of our next natural disaster looming:  an imminent volcanic eruption

(courtesy Mac Slavo/SHFTPlan.com)

ii)Quebec, Canada

First the UK and now Quebec, Canada: Uber must cease all operation in Quebec province.

( zero hedge)

7. OIL ISSUES

WTI climbs back over 52 dollars on an unexpected crude draw

( zerohedge)

8. EMERGING MARKET

9.   PHYSICAL MARKETS

i) Gold trading:the clowns are at it again: more policy error!

ii)Keith Neumeyer on the demoralization of gold/silver investors/miners

(Kingworldnews/Keith Neumeyer)

iii)We brought this to your attention last week: Hugo’s report that when China links oil to gold, the world will change as the Petrodollar scheme slowly disintegrates as excess dollars around the world will not be needed and thus they re enter the uSA causing massive inflation

(Hugo Salinas Price/GATA)

iv) Chris Mullen’s report from last week’s conference on the future of money, metals, and liberty

( Chris Mullen/Goldseek/GATA)

10. USA Stories

i)The last ditch effort to repeal Obamacare ends after Collins says no to the Cassidy-Graham bill

( zerohedge)

ii)Leaks on Trump’s tax proposal is down to 3 levels and the lowest rate has been raised from 10 to 12% but double the standard deduction to 12,000.  Many lower income citizens will thus end up paying no tax.  As David Stockman suggests, a huge number of filers in the uSA pay no tax and this number will increase.  USA needs a consumption tax for additional revenue.

(courtesy zerohedge)

iii)USA Consumer Confidence drops as Americans are now beginning to lose faith even in the stock market

( zerohedge)

iv)New home sales,  (hard data) continues to show a pattern of now growth.  Sales tumbles to the lowest level in one year.

 

( zerohedge)

v)Steve Bannon on the warpath against Republican establishment such as Mitch McConnell as he predicts a day of reckoning for them.  He blasts the NFL for their behaviour on Sunday and Monday night

( zerohedge)

vi) Famed real estate expert Sam Zell warns that this is not a time to buy any real estate: it is a falling knife…the amazon effect on bricks and mortar operations

( zerohedge)

 

vii)Connecticut’s capital Hartford has just been downgraded to deep junk, CC ,and S and P now states that their default is a virtual certainty

 

( zerohedge)

 

viii)This is getting stranger by the minute.  We now learn that the IRS has already been investigating Manafort and yet they did not participate in the raid at his house in which the subject was tax evasion. There is a very limited amount of information that can be shared between the IRS and Mueller.  It can go one way from Mueller to the IRS but not the other way. The object of the exercise is eventually to get dirt on Trump

 

( zerohedge)

 

Let us head over to the comex:

The total gold comex open interest ROSE BY LESS THAN EXPECTED 5971 CONTRACTS UP to an OI level of 558,350 WITH THE RISE IN THE PRICE OF GOLD  ($16.00 GAIN IN YESTERDAY’S TRADING).

Result: a  SMALLER SIZED open interest INCREASE WITH THE GOOD SIZED RISE IN THE PRICE OF GOLD ( $14.00.) 

 

 The new non active September contract month saw it’s OI FELL BY 11 contracts DOWN to 528.   We had 0 notices filed UPON YESTERDAY so we LOST 11 contracts or an additional 1100 oz will not stand for delivery in this non active month of September.  We had 11 EFP’s ISSUED FOR SEPTEMBER which entitles them to a fiat bonus plus a deliverable contract on a different exchange and most likely that would be London.  These are private deals so we do not get to see the makeup of these deals only the number of EFP’s issued.

The next active contract month is Oct and here we saw a LOSS of 2274 contracts DOWN to 19,482.

The November contract saw A GAIN OF 111 contracts UP to 838.

The very big active December contract month saw it’s OI LOSS OF 5319 contracts DOWN to 437,732.

We had 10 notice(s) filed upon today for  1000 oz

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And now for the wild silver comex results.  Total silver OI FELL BY 712 CONTRACTS FROM 188,644 DOWN TO 187,932 WITH YESTERDAY’S GOOD SIZED  16 CENT GAIN IN PRICE. WE HAVE HAD  CONSTANT TORMENT FROM THE BANKERS THESE PAST 11 DAYS, AND IT CONTINUED WITH TODAY BEING THE FINAL DAY FOR COMEX OPTIONS BUT WE STILL HAVE LONDON/OTC TO DEAL WITH AND THEY EXPIRE AT 9- 10 AM FRIDAY MORNING. HOWEVER OUR LONGS REMAIN RESOLUTE DETERMINED TO TAKE ON OUR BANKERS AS A TINY FRACTION OF SILVER LEAVES LEFT THE SILVER THEATRE. WE MUST HAVE HAD SOME BANKER SHORTS COVERING.  WE AGAIN WITNESS THE AMOUNT STANDING FOR SILVER DELIVERY INCREASE AND THIS TIME BY  570,000 OZ.  WE HAVE BEEN WITNESSING THIS PHENOMENA FOR THE PAST 5 MONTHS.  (SEE BELOW).
RESULT:  A SMALL DECREASE IN OI AT THE COMEX  WITH A 16 CENT GAIN IN PRICE. DEMAND FOR PHYSICAL SILVER RISES AGAIN AS THE AMOUNT STANDING INCREASES FOR THE SEPT CONTRACT MONTH BY A GOOD SIZED 570,000 OZ.SILVER DEMAND REMAINS EXTREMELY STRONG/THE RAID ALL WEEK LONG HAD NEGLIGIBLE EFFECT ON OUR RESOLUTE LONGS. WE MUST HAVE HAD SOME SMALL NUMBER OF BANKERS COVER THEIR SHORTS WITH THE RISE IN SILVER PRICE

We are now in the active contract month of September (and the last active month until December). Today we witness Sept. OI GAIN 47  contacts UP to 239. We had 67 notices filed yesterday, so we again gained 114 contracts or an additional 570,000 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 28 contacts UP TO 1095. November saw a GAIN of 8 contract(s) and thus RISING TO  85. After November, the NEXT big active contract month is December and here the OI LOST 1066  contracts DOWN to 149,036 contracts.

We had 157 notice(s) filed for  785,000 oz for the SEPT. 2017 contract

VOLUMES: for the gold comex

ESTIMATED VOLUME TODAY: 371,945 CONTRACTS / EXCELLENT

YESTERDAY’S confirmed volume was 384,465 which is EXCELLENT

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for SEPTEMBER

 Sept.26/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
105.675 oz
DELAWARE
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
 
10 notice(s)
1,000 OZ
No of oz to be served (notices)
518 contracts
(51,800 oz)
Total monthly oz gold served (contracts) so far this month
93 notices
9300 oz
0.2892 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   39,990.7  oz
Today we HAD  1 kilobar transaction(s)/ 
 WE HAD 0 DEALER DEPOSIT:
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  0 oz
we had 0 customer deposit(s):
 i) Into Scotia: nil oz
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
i) Out of Delaware:  105.675 oz
total customer withdrawals; 105.675  oz
 we had 1 adjustment(s)
Out of Manfra:  23,230.25 oz was adjusted out of the dealer Manfra and into the customer Manfra account:  this was kilobars:  735 kilo bars.
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 10  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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To calculate the initial total number of gold ounces standing for the SEPTEMBER. contract month, we take the total number of notices filed so far for the month (93) x 100 oz or 9300 oz, to which we add the difference between the open interest for the front month of SEPT. (528 contracts) minus the number of notices served upon today (10) x 100 oz per contract equals 62,100  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 (93) x 100 oz  or ounces + {(528)OI for the front month  minus the number of  notices served upon today (10) x 100 oz which equals 62,100 oz standing in this  active delivery month of SEPTEMBER  (1.931 tonnes)
We LOST 11 contracts OR AN ADDITIONAL 100 OZ WILL NOT STAND FOR GOLD and 1 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. IT IS OBVIOUS THAT  THERE IS HARDLY ANY GOLD TO DELIVER UPON LONGS IN SEPTEMBER.  THUS THE CROOKS  USE THE EFP’S TO TRANSFER THEIR OBLIGATION TO ANOTHER EXCHANGE. THIS IS WHY OVER 7400 EFP’S WERE ISSUED FOR OCTOBER THIS PAST FRIDAY.
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Total dealer inventory 692,502.452 or 21.54 tonnes  (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,697,105..917 or 270.516 tonnes 
 
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 13 MONTHS  83 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE AUGUST DELIVERY MONTH
September initial standings
 Sept 26  2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 nil oz
Deposits to the Dealer Inventory
 nil oz
Deposits to the Customer Inventory 
 nil oz
No of oz served today (contracts)
157 CONTRACT(S)
(785,000 OZ)
No of oz to be served (notices)
82 contracts
(410,000 oz)
Total monthly oz silver served (contracts) 6460 contracts (32,300,000 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 6,384,375.1 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 0 customer withdrawal(s):
TOTAL CUSTOMER WITHDRAWALS: nil  oz
We had 0 Customer deposit(s):
***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: nil  oz
 
 we had 0 adjustment(s) 
The total number of notices filed today for the SEPTEMBER. contract month is represented by 157 contract(s) for 785,000 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 6460 x 5,000 oz  = 32,300,000 oz to which we add the difference between the open interest for the front month of SEPT (239) and the number of notices served upon today (157) x 5000 oz equals the number of ounces standing.
 

 

.
 
Thus the INITIAL standings for silver for the SEPTEMBER contract month:  6460 (notices served so far)x 5000 oz  + OI for front month of SEPTEMBER(239 ) -number of notices served upon today (157)x 5000 oz  equals  32,710,000 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 26 DAYS OF SEPTEMBER, WE HAVE HAD A HUGE INCREASE OF  12.7 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 114 CONTRACTS OR AN ADDITIONAL 570,000 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 HAD 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: 84,154 CONTRACTS: (HUGE)
YESTERDAY’s  confirmed volume was 91,265 contracts which is EXCELLENT
YESTERDAY’S CONFIRMED VOLUME OF 91,265 CONTRACTS WHICH EQUATES TO 456 MILLION OZ OF SILVER OR 65% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.
 
Total dealer silver:  38.674 million (close to record low inventory  
Total number of dealer and customer silver:   218.719 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 6.6 percent to NAV usa funds and Negative 6.8% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.8%
Percentage of fund in silver:37.2%
cash .+0.0%( Sept 26/2017) 
2. Sprott silver fund (PSLV): STOCK   NAV RISES TO -0.13% (Sept 26/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.30% to NAV  (Sept 26/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -0.13%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.30%/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 26/no changes in gold inventory at the GLD/Inventory rests at 856.08 tonnes

Sept 25./Another big deposit of 3.84 tonnes into GLD/Inventory rests tonight at 856.08 tonnes

Sept 22/with gold up only 1 dollar on the day we had a massive 6.21 tonnes of gold added to the GLD/.this is a good sign that gold will advance nicely this coming week.

Sept 21/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 20/no change in gold inventory tonight/inventory rests at 846.03 tonnes

Sept 19/another deposit of 2.07 tonnes of gold into the GLD/inventory rests at 846.03 tonnes

Sept 18/a huge 5.32 tonnes of gold deposit into the GLD despite gold’s whack today/inventory rests at 843.96 tonnes

Sept 15./strange!!no change in GLD after the whacking of gold/inventory remains at 838.64 tonnes

Sept 14./no changes at the GLD/inventory rests at 838.64 tonnes

Sept 13/late last night a huge 4.14 tonnes of gold was added to the GLD inventory/inventory rests at 838.64 tonnes.

Sept 12/as of 5: 40 pm est, no changes in gold inventory at the GLD/Inventory rests at 834.50 tonnes

Sept 11/Today we had a rather large 2.37 tonnes of gold removed from the GLD/Inventory rests at 834.50 tonnes

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.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Sept 26 /2017/ Inventory rests tonight at 856.08 tonnes
*IN LAST 237 TRADING DAYS: 85.02 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 172 TRADING DAYS: A NET  72.41 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY.
*FROM FEB 1/2017: A NET  41.02 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Sept 26./no change in silver inventory at the SLV/.inventory rests at 326.757 million oz

Sept 25./ a big deposit of 1.842 million oz into the SLV/inventory rests at 326.757 million oz/

Sept 22/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz/

Sept 21/no change in silver inventory at the SLV/Inventory rests at 324.915 million oz

Sept 20/no changes in silver inventory/Inventory remains at 324.915 million oz

Sept 19/strange!! another withdrawal of 1.134 million oz despite the rise in silver/inventory rests at 324.915 million oz

Sept 18/a withdrawal of 1.039 million oz from the SLV/Inventory rests at 326.049 million oz

Sept 15./no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 14/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 13/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 12.2017/no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

Sept 11.2017: no change in silver inventory at the SLV/Inventory rests at 327.088 million oz/

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

Sept 26.2017:

Inventory 326.757  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.36%
  • 12 Month MM GOFO
    + 1.57%
  • 30 day trend

end

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

“Gold prices to reach $1,400 before the end of the year” – GoldCore

by MarketWatch

Gold finished sharply higher on Monday, recouping roughly half of last week’s loss, as declines in the U.S. stock market and growing tensions between the U.S. and North Korea lifted prices for the yellow metal to the highest settlement in more than a week.

December gold rose $14, or 1.1%, to settle at $1,311.50 an ounce. Prices, which lost about 2.1% last week, saw their highest finish since Sept. 15, according to FastSet data as reported by Marketwatch.

“The backdrop for gold today is as bullish as it has been in a long time,” said Mark O’Byrne, research director at GoldCore in Dublin.

Gold in USD (5 years) 

He expects gold prices to reach $1,400 before the end of the year.

With President Donald Trump “in the White House and the political situation in the U.S. and globally more uncertain than it has been in many years, gold will almost certainly continue to see robust safe-haven demand,” he said.

“This should push gold higher in the coming months.”

Recent military tensions between North Korea and the U.S. and its allies has helped to underpin gold’s haven status as a hedge against a sudden escalation in geopolitical tension.

According to media reports Monday, North Korean Foreign Minister Ri Yong Ho told reporters that Trump’s tweet that leader Kim Jong Un “won’t be around much longer” was a declaration of war, and Japanese leader Shinzo Abe on Monday called a snap general election in a bid to consolidate power in the midst of a diplomatic crisis with North Korea.

Gold is “coming out of a bear market, and “the technical position looks better and better after gold bottomed in December 2015,” said O’Byrne.

“Since then, we have seen a series of higher lows and higher highs.”

“Global demand remains robust with strong demand being seen in many sectors—especially in the ETFs and also in Chinese demand”, he said.

Gold is also considered a counter to what some market participants have described as lofty levels for U.S. equities potentially ripening for a correction.

The Dow Jones Industrial Average DJIA, -0.24% and the S&P 500 index SPX, -0.22% recently touched all-time highs, but traded broadly lower to start the week.

Gold gained even as the ICE U.S. Dollar Index DXY, +0.24% which measures the buck against a half-dozen currencies, was up 0.5%.

The two markets often move inversely as a weaker dollar can make commodities pegged to the currency, including most of the world’s gold, more appealing to buyers using weaker monetary units.

The dollar strengthened against the euro, which was under pressure after a heavy drop in support for mainstream parties in Germany’s general election on Sunday left the way forward in doubt for German Chancellor Angela Merkel’s conservative alliance.

News and Commentary

GoldCore expect “gold prices to reach $1,400 before the end of the year” (MarketWatch.com)

North Korea Tensions Drives Gold up 1.2% (Bloomberg.com)

Tech stocks, North Korea tensions drag Asian markets down (MarketWatch.com)

Fed’s Kashkari again says more Fed rate hikes are a bad idea (MarketWatch.com)

Euro Drops, Stocks Mixed as Korean Crisis Simmers: Markets Wrap (Bloomberg.com)

 Bullion surges as North Korea tensions resurface. Source: Bloomberg

Video: We’re Reaching Peak Gold (Bloomberg.com)

It makes sense to invest in gold now (Rediff.com)

It’s the Debt Stupid! (Campaigner.com)

Here’s how indoor farming can help feed 9.1 billion people by 2050 (MarketWatch.com)

Investors Take Cover in Gold as North Korea Threatens War: Chart (Bloomberg.com)

Gold Prices (LBMA AM)

26 Sep: USD 1,306.90, GBP 969.59 & EUR 1,105.38 per ounce
25 Sep: USD 1,295.50, GBP 957.89 & EUR 1,089.26 per ounce
22 Sep: USD 1,297.00, GBP 956.15 & EUR 1,082.09 per ounce
21 Sep: USD 1,297.35, GBP 960.56 & EUR 1,089.00 per ounce
20 Sep: USD 1,314.90, GBP 970.53 & EUR 1,094.79 per ounce
19 Sep: USD 1,308.45, GBP 969.30 & EUR 1,091.25 per ounce
18 Sep: USD 1,314.40, GBP 970.16 & EUR 1,100.68 per ounce

Silver Prices (LBMA)

26 Sep: USD 17.01, GBP 12.67 & EUR 14.43 per ounce
25 Sep: USD 16.95, GBP 12.57 & EUR 14.27 per ounce
22 Sep: USD 16.97, GBP 12.52 & EUR 14.18 per ounce
21 Sep: USD 16.95, GBP 12.58 & EUR 14.24 per ounce
20 Sep: USD 17.38, GBP 12.84 & EUR 14.48 per ounce
19 Sep: USD 17.15, GBP 12.70 & EUR 14.31 per ounce
18 Sep: USD 17.53, GBP 12.94 & EUR 14.66 per ounce


Recent Market Updates

– Commodities King Gartman Says Gold Soon Reach $1,400 As Drums of War Grow Louder
– Bitcoin “Is A Bubble” but Gold Is Money Says World’s Biggest Hedge Fund Manager
– Pensions and Debt Time Bomb In UK: £1 Trillion Crisis Looms
– Gold Investment “Compelling” As Fed May “Kill The Business Cycle”
– “This Is Where The Next Financial Crisis Will Come From” – Deutsche Bank
– Global Debt Bubble Understated By $13 Trillion Warn BIS
– Bitcoin Price Falls 40% In 3 Days Underlining Gold’s Safe Haven Credentials
– Gold Up, Markets Fatigued As War Talk Boils Over
– Oil Rich Venezuela Stops Accepting Dollars
– Massive Equifax Hack Shows Cyber Risk to Deposits and Investments Today
– British People Suddenly Stopped Buying Cars
– Buy Gold for Long Term as “Fiat Money Is Doomed”
– Conor McGregor – Worth His Weight In Gold?

END

Gold trading:

the clowns are at it again: more policy error!

Gold Drops, USD Pops As Yellen Warns “Fed Should Be Wary Of Moving Too Gradually”

On the heels of Fed chair Janet Yellen warning of looming inflation and the need for The Fed to perhaps not move as slowly as they have suggested, gold has snapped back below $1300 (erasing North Korean risks) and the dollar is extending gains…

Yellen’s comments sent Dec rate hike odds to 78%…

 

And banged gold lower…

 

Stocks, bonds, and bullion are all sliding…

 

Notably so is the 5s30s yield curve…

end

Keith Neumeyer on the demoralization of gold/silver investors/miners

(Kingworldnews/Keith Neumeyer)

Monetary metals industry shouldn’t be so demoralized, Neumeyer tells KWN

 Section: 

12:13p ET Monday, September 25, 2017

Dear Friend of GATA and Gold:

Mining entrepreneur Keith Neumeyer, interviewed today by King World News, discusses the demoralization in the monetary metals mining industry and explains why he doesn’t think it is justified. The interview is excerpted at KWN here:

http://kingworldnews.com/is-this-why-the-rally-in-gold-silver-is-happeni…

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

END
We brought this to your attention last week: Hugo’s report that when China links oil to gold, the world will change as the Petrodollar scheme slowly disintegrates as excess dollars around the world will not be needed and thus they re enter the uSA causing massive inflation
(Hugo Salinas Price/GATA)

Hugo Salinas Price: If China links oil to gold, the world will change

 Section: 

3:18p ET Monday, September 25, 2017

Dear Friend of GATA and Gold:

If China really offers to pay for oil in gold, returning gold to the international payments system, it will change all currency values, Hugo Salinas Price of the Mexican Civic Association for Silver writes today.

Eight years ago fund manager and author Jim Rickards made a similar prediction about Russia’s ability to change the system by demanding gold as payment for its oil and gas exports:

http://www.gata.org/node/8787

Of course demanding gold for oil is exactly what the United States persuaded Saudi Arabia not to do in 1974 in exchange for a guarantee of military defense.

Salinas Price’s commentary is headlined “Prospects for Gold II” and it’s posted at the association’s internet site here:

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

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

END
Chris Mullen’s report from last week’s conference on the future of money, metals, and liberty
(courtesy Chris Mullen/Goldseek/GATA)

Chris Mullen: A report from the Nexus conference in Aspen

 Section: 

3:25p ET Monday, September 25, 2017

Dear Friend of GATA and Gold:

GoldSeek’s Chris Mullen reports today on last week’s Nexus conference in Aspen, Colorado, where presentations discussed the future of money, liberty, and just about everything else. Mullen’s report is headlined “Economic Winter Is Coming: A Recap of My Experience at the Nexus Crypto/Blockchain Conference in Aspen” and it’s posted at GoldSeek here:

http://news.goldseek.com/GoldSeeker/1506362179.php

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

END



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

 
 i) Chinese yuan vs USA dollar/yuan HUGELY WEAKER AT 6.6305 (DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES  STRONGER TO ONSHORE AT   6.6273/ Shanghai bourse CLOSED UP 2.03 POINTS OR 0.06%  / HANG SANG CLOSED UP 12.67 POINTS OR 0.05% 

2. Nikkei closed UP 67.39 POINTS OR 0.33%    /USA: YEN FALLS TO 111.93

3. Europe stocks OPENED MOSTLY IN THE RED    ( /USA dollar index RISES TO  92.95 /Euro DOWN to 1.1795

3b Japan 10 year bond yield: RISES  TO  -+.034%/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.14/ 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::  51,97 and Brent: 58.63

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.404%/Italian 10 yr bond yield UP  to 2.118%    

3j Greek 10 year bond yield RISES TO  : 5.610???  

3k Gold at $1303.50  silver at:17.04 (8:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 1/100 in  roubles/dollar) 57.55-

3m oil into the 51 dollar handle for WTI and 58 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 HUGE SIZED DEVALUATION SOUTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.83 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  0.9713 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1458 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  +0.404%

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 2.218% early this morning. Thirty year rate  at 2.758% /POLICY ERROR/FLATTENING OF THE CURVE)

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

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

Euro Tumbles Ahead Of Yellen, Macron Speeches As Stocks Shake Off Korean Crisis

S&P futures are flat after Monday’s drop in the S&P 500 where a rout in Apple weighed on tech companies and tensions with North Korea persist; Asian stocks are modestly lower while Europe has shaken off the Korean crisis and is in the green on the back of a sharp drop in the EUR/USD which has tumbled below 1.18 as the USD rises ahead of much anticipated speeches by the Fed Chair and the French president.

At 12:45pm ET Janet Yellen is due to speak at an economics conference in Cleveland on the topic of “inflation, uncertainty and monetary policy”, while other U.S. and European central bankers will also offer more clues to the path of monetary policy. Investors will be parsing Yellen’s words for clues on whether the U.S. central bank will stick to plans to raise interest rates in December. “Investors are not fully up to speed with the risk of hawkish signals from Fed officials,” Mizuho strategist Antoine Bouvet said. “The Fed is back in a situation where it would want to show optimism at the very least, and the market should be pricing in more hikes in the coming months and quarters than it is currently.” Money markets currently point to a 70 percent chance of a hike in December but only a 20% chance of a further hike in March 2018, and just under 3 rate hikes for the next two years.

Another big speech on today’s calendar will be delivered by French president Emmanuel Macron: it is being billed as a big Euro integration platform, although it comes as a bad time, just 2 days after Merkel’s ability to embrace the idea has taken a set-back. Looking at what’s expected from Macron, the press have suggested that the speech will include plans for a permanent finance minister for the euro area, a euro area  budget worth several percentage points of aggregate GDP and a “European Monetary Fund”. As if to acknowledge the necessity of progress, German Finance Minister Schaeuble recently reciprocated, saying he intends to publish proposals for a reinvigorated ESM shortly after the election. We will see if the German election result cautions either. After the dust settles in Germany, the rush to integrate may need to slow. Merkel’s room for manoeuvre on conditionality just got narrower, meaning progress towards integration will likely be slower and the scale of common resources agreed will likely be more limited.

While global equities were mostly flat, the big movers overnight were the rising dollar, and the sliding euro. Indeed, as Bloomberg notes, markets attempted to stabilize as investors digested a host of catalysts from North Korean war threats and central-bank policy to tailwinds for oil and the aftermath of the German election.

The euro tumbled below $1.1800, its weakest since August 25, sliding below its 55-DMA for the first time in 5 months, as investors continued to unwind long positions, with fresh tactical selling pressure setting in ahead of Yellen’s speech. What started off as a knee-jerk reaction after the German election now appears to have become a broader hit on euro bulls’ conviction. Concern that the European Central Bank may not shed sufficient light on stimulus tapering even at its next meeting is weighing on the sentiment, amid growing speculation that the $1.20 level marks the limit of the central bank’s tolerance for gains in the common currency for now, Bloomberg notes. Additionally, the euro’s inability to stage a significant rally during the most recent war of words between the U.S. and North Korea also raised doubts whether it can re-test $1.20 level soon enough.

The good news for Europe is that a weaker euro automatically meant higher European stocks, and the Stoxx 600 was trading about 0.2% higher at publication time after opening in the red.  In terms of sector specific performance, healthcare names sit at the bottom of the pack with Swiss heavyweight Roche trading lower after being downgraded at Exane. To the upside, energy names lead the way higher amid yesterday’s surge in crude prices, with RBC’s downgrade of Total failing to place too much pressure on the sector.

There was no further reaction in Asia trading hours to the most recent threats from North Korea, and the risk-off moved quickly stalled (though it has not yet been reversed). The general feeling in Asia is that this is simply further noise – although as Citi notes some spooky parallels have been drawn with the infamous 1969 EC-121 shoot-down incident, when NK did shoot down a US reconnaissance plane, and Nixon resisted the urge to hit the big red button. Asian stocks fluctuated without clear direction with neither large gains or losses across the the main indexes. The Korean Kospi was modestly lower as won drops following latest escalation in U.S.-North Korea rhetoric.  Yesterday’s Nasdaq rout pressured ASX 200 (-0.22%) and Nikkei 225 (-0.33%), although strength in energy names following a 3% rally in crude later helped stem downside in Australia. Hang Seng (+0.05%) and Shanghai Comp. (+0.06%) also conformed to the lacklustre, indecisive tone amid a lack of drivers and a weaker PBoC liquidity operation.

As the Euro fells, the dollar strengthened against most G-10 peers as recovery from the multi-year low hit earlier this month continues. The New Zealand dollar underperformed after business confidence plunged to a two-year low. The pound briefly supported as EUR/GBP cross breaks through yesterday’s session low. Treasuries edge lower from overnight highs, initially spurred by North Korean risks. Yields marginally higher across the curve, long-end flattens with most participants eagerly awaiting Yellen speech for hints on next policy direction

Meanwhile safe havens such as gold took a breather. The yellow metal and the Swiss franc pared some of yesterday’s gains, which followed North Korea’s declaration it could shoot down U.S. warplanes. WTI crude fell, but remained close to a five-month high after also surging on Monday as Turkey threatened to shut down Kurdish crude shipments.

In bigger picture terms, markets continue to oscillate between risk-on and risk-off stances since early August as tensions simmer on the Korean Peninsula. Equities have edged away from recent record highs as the U.S. and North Korea trade threats, and now an assortment of global political risks look set to further cloud the outlook.

“I think we have a classic case of risk-on, risk-off across markets,” said Saxo Bank’s head of FX strategy, John Hardy. “There is a lot being attributed to North Korea but I think there are a lot of other factors here,” he added, citing the drop in Apple and big U.S. tech stocks and the weekend German elections that saw a far-right party enter parliament.

The yen, which traditionally performs strongly in jittery markets, was beginning to fade meanwhile having gone as high as 111.550 yen to the dollar as gold also dropped off a 1-week high it had hit on Monday. That came after North Korea’s foreign minister said a tweet by U.S. President Donald Trump that “little Rocket Man” might not be around for too long amounted to a declaration of war.

The bond market’s reaction to the latest escalation in tension between North Korea and the U.S. proved short-lived. Yields on U.S. Treasuries and German Bunds fell to a day’s low follow North Korean Foreign Minister’s Ri Yong Ho comments on Trump’s tweet. Both traded back up early on Tuesday in what analysts say reflects a widespread belief that diplomacy will prevail. All other euro zone bond yields were also a touch higher.

A rise in oil to a 26-month high, which bolsters inflation, and an upcoming sale of two-year German debt should also keep upward pressure on yields. Brent crude futures dipped fractionally to $58.85 a barrel, having earlier hit $59.49, the highest since July 2015 and more than 34 percent above the 2017 low. The rise was supported by Turkey’s threat to cut crude exports from Iraq’s Kurdistan region as well as signs that market rebalancing is accelerating. Turkish President Tayyip Erdogan threatened on Monday to cut off the pipeline that carries 500,000-600,000 barrels of crude per day from northern Iraq to the Turkish port of Ceyhan, intensifying pressure on the Kurdish autonomous region over its independence referendum.

Alongside geopolitics, this week’s bevy of central bank speakers continues to offer more clues to the path of monetary policy and the fate of stimulus. It’s Federal Reserve Chair Janet Yellen’s turn on Tuesday, who will weigh in as policy makers continue to disagree on whether to raise U.S. interest rates again this year. Finally investors will be monitoring the ongoing saga that President Donald Trump’s domestic policies have become in a bid to gauge the chances of any meaningful tax reform in the world’s biggest economy.

Economic data include new home sales, consumer confidence. Scheduled earnings include Nike, Carnival, Micron

Market Snapshot

  • S&P 500 futures down 0.01% to 2,495.25
  • STOXX Europe 600 up 0.2% to 384.55
  • MSCI Asia down 0.3% to 161.66
  • MSCI Asia ex Japan down 0.5% to 529.61
  • Nikkei down 0.3% to 20,330.19
  • Topix unchanged at 1,672.74
  • Hang Seng Index up 0.05% to 27,513.01
  • Shanghai Composite up 0.06% to 3,343.58
  • Sensex down 0.05% to 31,610.25
  • Australia S&P/ASX 200 down 0.2% to 5,670.98
  • Kospi down 0.3% to 2,374.32
  • Brent Futures down 0.6% to $58.65/bbl
  • Gold spot down 0.3% to $1,306.87
  • U.S. Dollar Index up 0.2% to 92.85
  • German 10Y yield rose 0.2 bps to 0.402%
  • Euro down 0.3% to $1.1811
  • Italian 10Y yield unchanged at 1.814%
  • Spanish 10Y yield fell 0.2 bps to 1.622%

Bulletin Headline Summary from RanSquawk

  • European and Asian equities traded with little in the way of firm direction as equity markets shrugged off mounting geopolitical tensions
  • NZD extended on political uncertainty, as USD gains some ground as markets await Yellen
  • Looking ahead, highlights include US new home sales, APIs, ECB’s Praet, Fed’s Yellen, Mester and Brainard, US 2yr note auction

Top Overnight News

  • The U.S. has gamed out four or five different scenarios for how the crisis with North Korea will be resolved, and “some are uglier than others,” National Security Adviser H.R. McMaster said as tensions remain high between the two countries
  • U.S. Senate Republicans fail in their push to repeal Obamacare; Senator Susan Collins said Monday the bill would cause too many Americans to lose insurance
  • French Prime Minister Emmanuel Macron will make proposals for re-shaping Europe that he acknowledges will need German Chancellor Angela Merkel’s support to push through
  • U.K. Prime Minister Theresa May’s speech last week failed to break the Brexit stalemate, as the EU demands more from the U.K. if there’s to be any hope of a discussion about trade next month. As the fourth round of talks kicked off, both sides remain divided over when Britain should agree to the size of its bill
  • While Austria may have successfully sold a 100-year bond this month, other European countries may be slow to follow suit given the concerns over demand, liquidity and legal restrictions
  • The Bank of Greece plans to start stress tests for the country’s four systemic banks in late February with a view to determine by June if they need fresh capital before the end of the Greek bailout program
  • CVC Is Said to Mull Options for $4 Billion Drugmaker Alvogen
  • Baidu’s iQiyi Is Said to Seek a U.S. IPO at Over $8b Valuation
  • Jaguar Land Rover Is Said to Hunt for Luxury Brand Purchases
  • Demise of Obamacare Repeal Shows How Far GOP Remains From Goal
  • Turkey Warns Iraq Kurds It Can ‘Close Valves’ on Oil Exports
  • Nestle Aims to Boost Profitability Amid Pressure From Loeb
  • Trump’s State-Tax Plan Could Cause Headaches for 52 Republicans
  • Banks Lobbying to Stem MiFID’s Spread Spark a U.S. Client Revolt
  • Uber’s New ‘Good Cop’ Tack Will Face Test in U.S. City Tussles

Asian stocks lacked any solid direction after the weak momentum from US where all 3 major indices closed negative due to geopolitical concerns, while the Nasdaq took the brunt of the worst day for the tech sector in over a month. This pressured ASX 200 (-0.22%) and Nikkei 225 (-0.33%), although strength in energy names following a 3% rally in crude later helped stem downside in Australia. Hang Seng (+0.05%) and Shanghai Comp. (+0.06%) also conformed to the lacklustre, indecisive tone amid a lack of drivers and a weaker PBoC liquidity operation. 10yr JGBs were relatively flat with only minimal support seen from the cautious risk tone in Japan, while today’s 40yr auction also failed to spur firm demand despite the b/c at the highest since 2015, as this was relatively stable from the prior. PBoC injected CNY 40bln via 14-day reverse repos and CNY 10bln via 28-day reverse repos. PBoC set CNY mid-point at 6.6076. BoJ Minutes from July 19th-20th meeting stated that Japan’s economy was expanding moderately and that financial conditions were highly accommodative. The minutes also stated that exports are on an increasing trend and that momentum towards achieving the 2% price stability target was being maintained. RBA’s Bullock says high levels of debt leave households vulnerable and that RBA will take this into consideration for monetary policy.

Top Asian News

  • Cindat Capital Says Estimates Put China NPLs Up to $1 Trillion
  • Euro Hits One-Month Low as Stops Triggered Across the Board
  • Iron Ore Faces ‘New Reality’ on Flight to Quality, BHP Says
  • Modi Starts $2.5 Billion Plan to Electrify Every India Home
  • Singapore Cryptocurrency Firms Facing Bank Account Closures

European equites started the session on the backfoot, albeit modestly so with lingering geopolitical tensions continuing to act as a source of concern for investor sentiment. In terms of sector specific performance, healthcare names sit at the bottom of the pack with Swiss heavyweight Roche trading lower after being downgraded at Exane. To the upside, energy names lead the way higher amid yesterday’s surge in crude prices, with RBC’s downgrade of Total failing to place too much pressure on the sector. From a fixed income perspective, the 10yr Bund trades relatively flat after initial losses have been pared throughout the morning. However, analysts at IFR highlight that paper could be halted at 162.05 which marks the 50% retracement of the 8th-21st September move. In the periphery, yields continue to remain resilient to the fallout of the German election with RBC downplaying the concerns for peripheral markets in a research note this morning. That said, investors will continue to remain wary over potential Catalan-related headlines over the coming days.

Top European News

  • ECB Is Said to Start Stress Tests at Greek Banks in February
  • EU Dangles Praise for U.K. But Asks More for Brexit Trade
  • London Luxury Home Values Set for 20% Rebound Over Five Years
  • BNP Paribas Aims to Grow German Revenue 8% Per Year Through 2020
  • Monte Paschi Restructuring Will Cut Bank in Half: EU Official
  • Pandora’s U.S. September Campaign Failed, Carnegie Says: Ritzau
  • Deutsche Wohnen, Vonovia Lead Europe Real Estate Stocks Higher

In currencies, the JPY remains at better levels after yesterday’s comments from the North Korean Foreign Minister in which he stated that the
war of words from President Trump has been deemed as a declaration of war. Additionally, PM Abe also called a snap election which will likely be held around late October, as such uncertainty heading into the event could suggest that risks are skewed to the
downside in USD/JPY.
With regards to the USD itself, the USD-index is broadly higher as participants await comments from Fed’s Yellen and
look for any further clarity on the train of thought at the Fed after last week’s meeting very much left a Dec hike on the table.
Additionally, broader USD strength has also likely been supported by EUR softness which was initiated by a break of September’s
lower in EUR/GBP.
NZD notably weaker overnight with NZD/USD slipping 0.45%, as political uncertainties, alongside poor overnight data weighed on
the Kiwi. As it stands, the RBNZ are not seen lifting interest rates until Sep’18, according to OIS markets. Focus will be on the
comments from the RBNZ where there may be an air of caution given the latest election results.

In commodities, both WTI and Brent have given back a small percentage of yesterday’s noteworthy gains which were largely triggered by tensions surrounding the Kurdish independence referendum. As  such, WTI has briefly moved back below the USD 52/bbl level in early European trade. However, markets will likely remain sensitive to any Turkish involvement in the matter after President Erdogan threatened to cut off the pipelines that transfer oil from Northern Iraq. Elsewhere, copper was seen higher during Asia-Pac trade while safe-haven gold was mildly underpinned as geopolitical concerns  lingered. Local press reports state that ASX will likely suspend most of Australian listed gold sector if WA government budget with new gold royalty increases is passed

Looking at the day ahead, there is the Conference board consumer confidence index, Richmond Fed manufacturing index, CoreLogic house price data for key cities as well as new home sales data. Onto other events, there is the BOJ Minutes for its July meeting. In the US, the Fed’s Mester, Brainard and Bostic will speak. Further, Mrs Yellen will speak on inflation, uncertainty and monetary policy. Back in the Europe, UK’s PM May and EU president Tusk will meet to discuss Brexit, while France’s Macron will outline his plans to reform the EU.

US Event Calendar

  • 9am: S&P Case Shiller 20-City MoM SA, est. 0.2%, prior 0.11%; 20-City YoY NSA, est. 5.7%, prior 5.65%
  • 9:30am: Fed’s Mester Moderates Session NABE
  • 10am: New Home Sales, est. 585,000, prior 571,000; New Home Sales MoM, est. 2.45%, prior -9.4%
  • 10am: Conf. Board Consumer Confidence, est. 120, prior 122.9; Present Situation, prior 151.2; Expectations, prior 104
  • 10am: Richmond Fed Manufact. Index, est. 13, prior 14
  • 10:30am: Fed’s Brainard Speaks on Labor Market Disparities
  • 11:30am: Fed’s Bostic Speaks to the Atlanta Press Club
  • 12:45pm: Yellen Speaks on Inflation, Uncertainty, and Monetary Policy

DB’s Jim Reid concludes the overnight wrap

What happens when you cross a middle aged man with two recent knee operations and a trampoline at a 2 year olds birthday party. Answer a very sore and ‘clicky’ knee. Over the weekend I went on a trampoline for possibly the first time in around 4 decades and got my timing a bit wrong. I bounced high in the air and then misjudged the landing and over extended just as the trampoline came to meet my leg. It was quite painful at the time and 3 days later it just clicks all the time. I’m hoping I haven’t done any damage! As a minimum it’s going to make me very bad at surveillance going forward. It does worry me that the next few years I’m going to be doing more and more silly things to impress my children or their friends or probably their parents! I may as well already book in a surgeon for
a few weeks after my first sports day whenever that is!

Bunds bounced better than me at the weekend after the uncertain German election results with 10 year bunds 4.6bps lower yesterday. In both bonds and equities the core outperformed the peripheral (more below). For today, we have a Yellen speech at 12:45pm ET entitled “inflation, uncertainty and monetary policy” to look forward to and a Macron speech where timing is not ideal given
that it was billed as a big Euro integration platform 2 days after Merkel’s ability to embrace the idea has taken a set-back.

Looking at what’s expected from Macron, the press have suggested that the speech will include plans for a permanent finance minister for the euro area, a euro area budget worth several percentage points of aggregate GDP and a “European Monetary Fund”. As if to acknowledge the necessity of progress, German Finance
Minister Schaeuble recently reciprocated, saying he intends to publish proposals for a reinvigorated ESM shortly after the election. We will see if the German election result cautions either. After the dust settles in Germany, the rush to integrate may need to slow. Merkel’s room for manoeuvre on conditionality just got narrower, meaning progress towards integration will likely be slower and the
scale of common resources agreed will likely be more limited. For more details, please refer to DB’s Mark Wall’s “Reality check for the Macron Pivot”.

Focusing back now on the German election and its near term implications. As a recap, Merkel’s CDU/CSU remained the strongest party, scoring 33% of the votes, but it’s also the worst result since 1953 and substantially less than 2013 (41.5%).
A feasible alliance to govern is the Jamaica coalition between the CDU/CSU, the Greens and the FDP. Looking ahead, DB’s Barbara Boettcher believes markets will face a period of political uncertainty as coalition building will take time.

Further, coalition talks are unlikely to turn serious before the elections in Lower Saxony on Oct 15. Thus, it is likely that Merkel will be re-elected as chancellor  only just-in-time for the December EU summit. Overall, the risk of a failure of coalition forming is small, in part as German voters demand predictability and
responsibility in uncertain times.

This morning in Asia, markets are trading a bit softer. As we type, the Hang Seng (-0.03%), ASX 200 (-0.13%) and the Kospi (-0.39%) is down slightly. Elsewhere,he Nikkei is down -0.40% as the initial optimism from PM Abe’s stimulus package and his call for a snap election has somewhat faded. The new election is likely to
take place on 22 October and is opportunistic from Abe in an attempt to capitalise on his growing approval ratings (now c50% vs. c30% in July).

Moving on to markets yesterday now. US bourses softened following rising geopolitical tensions and weakness in large cap tech stocks. The S&P and Dow both closed c0.2% lower following North Korea’s Foreign minister threatening to shoot down US warplanes in any airspace given that “the US has declared a war”.
The Nasdaq fell 0.88% (worse day since mid-August), impacted by increased selling in the FANG stocks (down 1% to 4.7% each). Elsewhere, suppliers to Apple and Apple’s own shares were down c3% and -0.88% respectively, after Digitimes reported Apple has instructed suppliers to slow down delivery of some of the
component shipments for the production of the iPhone X. Elsewhere, the energy sector rose 1.47% (+9.3% for the month) on the back of higher oil prices (more below).

European markets were mixed but little changed, the Stoxx 600 and the Dax rose 0.18% and 0.02% respectively following Merkel’s election win. Across the region, most indices traded lower though, with the FTSE (-0.13%) and CAC (-0.27%) down slightly, while the peripherals slightly underperformed (FTSE MIB -0.63%; IBEX
-0.86%), perhaps a reflection of the rising populist vote in Germany.

Over in government bonds, there was a similar theme with core bond markets firmer but peripherals underperforming. Core bond yields were modestly lower in the US (UST 2Y: -1bp;10Y: -3bp) and also across Europe, with Bunds (2Y:-3bp; 10Y: -5bp), Gilts (2Y: -1bp; 10Y: -2bp) and French OATs (2Y: -3bp; 10Y: -3bp)
all down 1-5bp across maturities. Conversely, peripherals such as Italian BTPs (2Y: +0.3bp; 10Y: unch) and Portuguese (2Y: +2bp; 10Y: +2bp) bond yields were slightly higher.

Turning to currencies, the EURUSD fell 0.86%, partly reflecting the uncertainties with Merkel’s new coalition mandate. Elsewhere, the US dollar index gained 0.52% while Sterling was little changed (-0.28%). In commodities, WTI oil rose 3.08% and Brent jumped 3.80% to $59.02/bbl (the highest close since November 2015) after Turkey indicated it may shut down Kurdish oil exports that pass through its territory. Precious metal were slightly higher (Gold +1.04%; Silver +1.08%) while other base metals are also trading higher this morning, with Copper (1.12%), Zinc (+2.87%) and Aluminium (+0.30%) all slightly higher.

Away from the markets and onto central bankers commentaries. In the US,the NY Fed’s Dudley has noted that inflation should eventually pick up and“stabilise around the Fed’s 2% goal over the medium term”. Thus in response,“the Fed will likely continue to remove monetary accommodation gradually”.
Elsewhere, the more dovish Chicago Fed’s Evans disagreed and noted that “as the FOMC comes to decision points over the coming months, I think we need to see clear signs of building wage and price pressures before taking the next step in removing accommodation”.

Over in Europe, ECB’s Draghi talked up the economy, noting “economic expansion is now firm and broad based across countries and sectors”, but gave little away on the extent and potential approach on the tapering plans. Notably, he said “we have to be sensitive about the danger of halting a recovery through
hasty monetary policy decisions” and that we know “a very substantial degree of monetary accommodation is still needed for the upward inflation path to materialize.” Elsewhere, ECB’s Executive Board member Coeure indicated that the ECB was not “scared” by the prospect of QE exit, but noted that exit would
have to be carried out carefully.

Moving onto Brexit, the EU’s Chief Brexit negotiator Barnier has signalled he is  unwilling to discuss a trade deal until the UK provides more clarity. He said “what is important now is for the UK government to translate the (PM May’s) speech
into a clear negotiating position”. His counterpart David Davis has reiterated UK will honour its financial commitments, but has avoided specifics. We wait and see how the Brexit talks evolves.

With the US congressional leaders expected to release the parameters of a tax framework shortly, DB’s Binky Chadha gauges that little or nothing has been priced in. He expects the fundamental impact of a cut in corporate tax rate to be modest at the aggregate level, but the relative impacts could be large for small
vs. large companies.
Finally, the latest ECB CSPP holdings were released yesterday. They bought €1.77bn last week which equates to €353mn/day vs. €349mn/day since CSPP started. Overall, the CSPP/PSPP ratio of net purchases continues to run well above average, at 14.8% last week (vs. 19.2%, 13.6%, 12%, 10.3% and 9.6% in previous weeks), which continues to suggest the ECB has tapered credit
purchases less than government bonds.

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 2.03 POINTS OR 0.06%   / /Hang Sang CLOSED UP 12.67 POINTS OR 0.05%/ The Nikkei closed UP 67.38 POINTS OR 0.33%/Australia’s all ordinaires CLOSED DOWN 0.21%/Chinese yuan (ONSHORE) closed WELL DOWN at 6.6305/Oil DOWN to 51.97 dollars per barrel for WTI and 58.63 for Brent. Stocks in Europe OPENED MOSTLY MIXED TO RED . Offshore yuan trades  6.6273 yuan to the dollar vs 6.6305 for onshore yuan. NOW THE OFFSHORE MOVED MUCH STRONGER  TO THE ONSHORE YUAN/ ONSHORE YUAN HUGELY WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER  DOLLAR. CHINA IS NOT VERY HAPPY TODAY 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

North Korea is following through on its threats to shoot down USA fighter jets and bombers that travel near its airspace as it boosts its coastal defenses”

(courtesy zerohedge)

 

McMaster stats that the USA has 4 or 5 options dealing with North Korea some worse than others

(courtesy zerohedge)

McMaster Says US Has “Four or Five” North Korea Scenarios, “Some Are Uglier Than Others”

As tensions between North Korea and the U.S. continue to escalate with every Trump tweet and subsequent response by Kim Jong-Un, National Security Adviser H.R. McMaster said that the U.S. has prepared “four or five different scenarios” for how the crisis with North Korea will be resolved, adding ominously that “some are uglier than others.” 

McMaster declined to comment on the extent to which North Korea’s deeply-buried nuclear program was vulnerable to U.S. military strikes — an assessment made of Iran before the 2015 framework agreement designed to stop its nuclear program.

 

He acknowledged that every military option assumed a reaction from North Korea that endangered South Korean citizens, adding it’s “foremost in our minds.” That danger “is certainly taken into consideration in all our planning and war gaming, table-top exercise efforts,” McMaster said.

Still, while McMaster said the threat from Pyongyang is “much further advanced” than anticipated and the Pentagon said the president has a “deep arsenal” to draw upon if needed, Bloomberg quoted U.S. officials who dismissed North Korean Foreign Minister Ri Yong Ho’s comment that President Donald Trump’s warnings to Pyongyang at the United Nations amounted to a declaration of war.

That said, both governments have said “all options” are on the table in dealing with the tensions. Defense Secretary Jim Mattis, speaking in India on Tuesday, said the U.S. wants to keep engagement with North Korea in the diplomatic realm as long as possible. But on Monday Ri escalated tensions with his remark that North Korea would be within its rights to shoot down U.S. warplanes flying in international airspace. That startled markets, coming just days after the Pentagon sent planes near North Korea’s border.

Additionally, as reported this morning, North Korea boosted defenses on its eastern coastline after the US flew B-1B Lancer bombers and F-15C Eagle fighter escorts from Okinawa, Japan, just off the coast of North Korea – the farthest north of the demilitarized zone any U.S. fighter or bomber aircraft have flown off North Korea’s coast this century, the Pentagon said. North Korea was surprised by the bombers, which weren’t caught by its radar,
Yonhap News reported, citing the head of the intelligence committee of South Korea’s parliament.

The Pentagon said its most recent bomber and fighter exercises were meant to underscore “the seriousness with which we take DPRK’s reckless behavior,” White said last week, using the initials for North Korea’s formal name. “This mission is a demonstration of U.S. resolve and a clear message that the President has many military options.”

The question of course, is how would Pyongyang respond to any potential strike: military analysts have said any conflict between the U.S. and North Korea would risk a devastating attack by Pyongyang on the South Korean capital Seoul.

There’s not a ‘precision strike’ that solves the problem,” McMaster said at an event in Washington hosted by the Institute for the Study of War. “There’s not a military blockade that can solve the problem. What we hope to do is avoid war, but we cannot discount that possibility.”

Meanwhile, Lu Kang, a spokesman for China’s foreign ministry said assertiveness from both sides would only increase the risk of confrontation. “We have witnessed a lot of saber rattling recently on the Korean peninsula,” he said. “We hope the U.S. and DPRK politicians can realize that resorting to military means will never be a viable way out for this issue.”

* * *

In conclusion, Bloomberg reminds us that in 1969, President Richard Nixon considered tactical nuclear strikes after North Korea shot down a U.S. reconnaissance plane, according to documents declassified in 2010 and published by the National Security Archive.

b) REPORT ON JAPAN

end

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

An excellent commentary on the Kurdish situation in Iraq, Syria and Turkey and how they want statehood and eventually be combined into one country

(courtesy E Magnier )

“Yes” Vote for Iraqi Kurdistan: A New Chaos Is Redefining Middle East Borders

Submitted by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media

Iraqi Kurds voted “yes” in the referendum to start materializing the dream of the 30 million Kurds inhabiting Iraq, Turkey, Syria and Armenia – a dream which begins by establishing an independent state in Iraqi Kurdistan. Despite the announcement of the Iraqi Kurdish leader Masoud Barzani that the referendum is only the beginning of a negotiation with the central government in Baghdad (and not a “divorce” from the state of Iraq), he hopes (and most probably knows) that independence will be recognized as a fact by the international community sooner or later.

For certain, this referendum – if its result is implemented – can lead to a redefinition of the map of the Middle East, and the countries of Iraq and Syria to start with where Kurds in both countries control enough energy resources to sustain their “state”. Leaders around the world said, during the war in Syria, that the Middle East would never return as it was to before 2011, probably referring to the “Islamic State” (ISIS) occupation of large part of Syria and Iraq. But today, their prediction may come true through the Kurds – even though the “Islamic State” (ISIS) “project” failed to reach its objective, that of dividing Syria and Iraq.

Thus, the Kurdish will to establish an independent state is giving greater power to Turkey, which will hold the key of the Kurdish future state and to the partition of the Middle East. In fact, in Iraq, Ankara will play a crucial role in the coming months or years in reshaping Mesopotamia and the Levant. Kurdistan exports its main oil revenue through Turkey, putting Erbil at Ankara’s mercy. Therefore, if Turkey considers independence a threat to its national security, it will not hesitate to send troops into Kurdistan, triggering probably numbness and little effective reaction from Baghdad. Moreover, recent media coverage which showed Iranian Kurds in Kirkuk encourages a free hand and perfect excuse for Tehran to hit these forces in Iraq if Erbil takes further measures towards independence.


Image via Elijah J. Magnier

Just prior to Monday’s referendum, a Kurdish delegation from Erbil visited Baghdad to negotiate with the central government a postponement and rescheduling of the vote. They presented a series of conditions (considered unacceptable by Baghdad) insisting on a future Kurdish independent state. Iraqi Prime Minister Haidar Abadi showed no flexibility and launched threats against Erbil. Abadi declared the closure of airspace over Erbil and asked neighboring countries to follow this step, to which Tehran and Ankara have responded positively. According to Nawzad Adham, Kurdistan general director at the Trade and Industry local Ministry, Kurdistan business exchanges with Turkey and Iran exceed $10 billion per year. Kurdistan imports 95% of its agriculture needs from Turkey and Iran and depends on Turkey to export its oil.

Kurdistan escaped most of the destruction caused by the first Gulf war in 1991, the Iraqi occupation in 2003 and the war against ISIS in 2014 (to-date). The Kurds are spread over 40.000 km2, they control over 20% of the Iraqi oil  (Iraq produces around 4.35 million barrels per day (b/d) and Kurdistan 900.000 b/d), its energy reserves are estimated around 45 billion barrels of oil and 150 trillion cubic meter of gas, and it exports around 600.000 b/d via Turkey. Oil has long been the source of dispute between Baghdad and Erbil: in October 2011, the Kurds signed an exploration deal with the US oil giant Exxon Mobil (of which US Secretary of State Rex Tillerson is the former CEO) for six exploration blocks, and this without Central government approval, sparking the first official confrontation with Kurdistan Regional Government (KRG). Since then, Kurdistan has refrained from agreeing on any fiscal control from the finance Ministry related to oil (and telecommunication) revenue cashed in by Erbil and consequently Baghdad has refrained from paying 17% of its total oil revenue – since 25% of Iraqi total oil revenue is apparently ending in Kurdish leaders’ pockets.

Many western officials considered the Kurds as the only serious US partner against ISIS. However, it was the same Barzani who praised the ISIS occupation of Mosul in June 2014 because it offered an opportunity for the partition of Iraq. Moreover, Iraqi forces (including the Popular Mobilization Units) lost more than 10,000 men, and recovered most of the territory controlled by ISIS, while the Kurds of Erbil limited them to defend Kurdistan, lost around 1300 men, and took back Sinjar in a few hours after allowing ISIS to leave the Iraqi city to Syria.

Barzani counts on international recognition to protect his “new state” in the future, regardless of the verbally negative stance of many countries, including the US, the UK and the UN. The Kurdish leader is not politically suicidal and would never insist on such a controversial step without enough international political support behind him, despite what is overtly announced by the major external powers.Kurds in Iraq believe the referendum is a historical opportunity that can’t be missed, while Baghdad believes it is a huge mistake which Kurds will regret in the future. In fact, Iraqi PM Abadi is taking gradual measures against Barzani. These measures are expected to increase, putting in jeopardy the future of Iraqi Kurdish businesses and communities in many parts of Iraq, which includes over 1.5 million Kurdish employees within the various Iraqi state ministries and official institutions, and may very well lead to a military confrontation in the main contested areas, especially the oil-rich northern city of Kirkuk (the oil fields are situated outside the city and under Kurdish Peshmerga control).


Army Col. Ralph Peters’ controversial “Blood Borders” map envisioning the future Middle East and studied at US war colleges. Originally published in the Armed Forces Journal – which identifies the map as its most viewed and downloaded of all time. Via Wiki Commons.

In Syria, the Kurdish future “federation” (Kurds in Syria are expected to start with a request for a federation before moving on towards a state, like in Iraq) will force a Damascus-Ankara collaboration, obliging Syria to turn a blind eye on the Turkish forces present in the north of the country and postpone its claim to recover its territory for a while. A rich Kurdish Federation in Syria and “state” in Iraq will definitely create a serious menace to Turkey that is holding the largest Kurdish population (over 16 million). The Turkish President Recep Tayyib Erdogan is in a privileged position but also needs to play his cards skilfully to avoid consequences on his own territory: once the Kurds of Iraq show their will to have a state, those in the rest of the region won’t stay long before following the same path.

In fact, the Syrian Kurds count around 8% of the population but control (under the US forces command and guidance)today 25% of the territory and 40% of oil and gas resources assuming they keep control over the oil and gas rich province of Deir Ezzor in northeast Syria. The Kurds have already initiated local community elections and are planning for council elections in the next months, with the election of a parliament expected next year in northeast Syria.

The end of ISIS’s control of territories in Syria and Iraq is certain by 2018. However, it is also certain that the Middle East is coming into a new period of chaos, putting all borders into question, and affecting the stability of the region.

6 .GLOBAL ISSUES

Bali, Indonesia

Bali, a huge destination for tourists must be cognizant of our next natural disaster looming:  an imminent volcanic eruption

(courtesy Mac Slavo/SHFTPlan.com)

50,000 Evacuated From Bali As Nation Faces Imminent Volcanic Eruption

Authored by Mac Slavo via SHTFplan.com,

Fears of an imminent eruption on the Indonesian tourist island of Bali have led to the evacuation of an estimated 50,000 people.  

The Mount Agung volcano is going to erupt, scientists say.

Waskita Sutadewa, the spokesman for the disaster mitigation agency in Bali, said people have scattered to all corners of the island and some have crossed to the neighboring island of Lombok.

http://players.brightcove.net/3281700261001/default_default/index.html?videoId=5582439878001

Indonesian authorities raised the volcano’s alert status to the highest level on Friday following a dramatic increase in seismic activity. It last erupted in 1963, killing about 1,100 people.

View image on TwitterView image on TwitterView image on Twitter

Evacuation post  is in 9 distric; Karangasem, Buleleng, Klungkung, Bangli, Tabanan, Denpasar, Gianyar, Badung &Jembrana

Villagers are staying in temporary camps, sports centers, village halls, or with friends and relatives. Some do return to the exclusion zone during the day to tend to their livestock or shift the animals to areas further from the volcano for their safety. Others say they are selling their cows because they don’t know when they’ll be able to return.

“It’s obviously an awful thing. We want to be out of here just to be safe,” said an Australian woman at Bali’s airport who identified herself as Miriam. National Disaster Mitigation Agency spokesman Sutopo Purwo Nugroho said hundreds of thousands of face masks will be distributed in Bali as part of government humanitarian assistance that includes thousands of mattresses and blankets. Indonesia is prone to seismic upheaval due to its location on the Pacific “Ring of Fire,” an arc of volcanoes and fault lines encircling the Pacific Basin.

Government volcanologist Surono, who uses one name, said the feared eruption could be huge and potentially also close airports in East Java and Lombok, according to local media reports. Agung is in the north of the island about 43 miles from the tourist hotspot of Kuta. People have been told to stay at least 6 miles from the crater, but to stay 7.5 miles away when to the north, northeast, southeast, and south-southwest.

Over the past 5,000 years, Agung has erupted once a century on average and about a quarter of its eruptions have been a similar or stronger strength than 1963. Macquarie University volcanologist Heather Handley said the eruptions in 1843 and 1963 had a Volcanic Explosivity Index of about 5 on a scale where 8 would be the strength of an ancient supervolcano eruption such as Yellowstone in the U.S. or Toba in Indonesia.

Although officials have said there is no immediate threat to tourists, a significant eruption would force the closure of Bali’s international airport, stranding thousands. The island is famous for its surfing, beaches and its elegant Hindu culture is still safe to visit. Bali’s Ngurah rai International Airport has been operating normally since the alert status for Mount Agung was raised to the highest level on Friday.

Nearly 5 million tourists visited Bali last year.

end

Quebec, Canada

First the UK and now Quebec, Canada: Uber must cease all operation in Quebec province.

(courtesy zero hedge)

Uber To Cease Operations In Quebec

Just days after Uber lost its license to operate in London, the online ride-hailing service that has been at the centre of various controversies and scandals for the past year, announced it would cease operations in Quebec as of Oct. 14. According to the Montreal Gazette, the final straw for Uber, which has been negotiating with the Quebec government for months in an effort to co-exist with the taxi industry, reportedly was a government demand that its drivers submit to a 35-hour training program already imposed on taxi drivers.

Montreal  GM Jean-Nicolas Guillemette says the company can’t operate under the new rules the province wants. Last day Oct 14.

Uber reportedly felt such a program was incompatible with its business model, which relies on part-time drivers who would presumably not be ready to undertake the course. Other government demands included mandatory vehicle inspections every 12 months and background checks on drivers performed by police rather than a private firm.

In short, all hurdles that the company decided were a dealbreaker for its future operations.

As the Gazette adds, the stage seemed to be set for some kind of push back from Uber last Friday, after Quebec Transport minister Laurent Lessard announced the new conditions, describing them as merely an extension of a year-old pilot project permitted under the current rules.

That led Uber Quebec spokesperson Jean-Christophe de le Rue to accuse the government of adhering to “new and challenging regulations that favour old policies instead of incorporating the benefits of new technology … based on our current understanding, these changes significantly threaten Uber‘s ability to continue operating in Quebec.”

Statement from Uber following today’s announcement from the Ministry of Transportation 

The measures came after a year of discussions with the taxi industry, which resulted in 19 recommendations to Lessard. But those discussions followed a series of public splits and policy reversals within the Quebec Liberal government over whether Über could co-exist with the province’s taxi industry.

In May of 2016, the youth wing of the Quebec Liberal Party and some business groups criticized the government’s lukewarm or sometimes hostile attitude toward the ride-hailing service, and while the Couillard government and then Transport minister Jacques Daoust took a tough line with the service, insisting drivers obtain Class 4C driver’s licences and taxi permits, those conditions were eventually dropped and a pilot project developed to try and marry Uber’s business model within the existing taxi industry.

According to the Gazette, Uber has been making waves for the taxi industry and the Couillard government since it became a part of Montreal’s transportation landscape in 2015. The taxi industry complained Uber was engaging in unfair competition, since its drivers didn’t hold expensive permits required of taxi drivers, some of which sold on the second-hand market for nearly $200,000.

Reacting to the news, a coalition of taxi owners said the government must not bend to Uber’s threats to pull out if it doesn’t get its way. “Uber is not obliged to cease operations it is only doing so to frustrate users so they can put pressure on the government,” said Georges Malouf, a spokesperson fort he group. “Once again, instead of negotiating in good faith, Uber prefers to use bullying tactics.”

While the Quebec blowback against Uber may have been many months in the making, with two major markets lost in under one week, one wonders which city will be next, and where the biggest transportation disruptor to emerge in recent years will itself be disrupted as legacy service providers and local politicians continue to push back against the deflation-creating and money-losing company.

7. OIL ISSUES

WTI climbs back over 52 dollars on an unexpected crude draw

(courtesy zerohedge)

8. EMERGING MARKET

VENEZUELA

end

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

Euro/USA   1.1795 DOWN .0061/REACTING TO  +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ 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 MOSTLY IN THE RED TO MIXED 

USA/JAPAN YEN 111.83 UP 0.084(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 1.3441 DOWN .0034 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.2388 DOWN .0013 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS TUESDAY morning in Europe, the Euro FELL by 61 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1795; / Last night the Shanghai composite CLOSED  UP 2.03 POINTS OR 0.06%     / Hang Sang  CLOSED  UP 12.67 POINTS OR 0.05% /AUSTRALIA  CLOSED DOWN 0.21% / EUROPEAN BOURSES OPENED MOSTLY IN THE RED/SOME GREEN 

The NIKKEI: this TUESDAY morning CLOSED UP 67.39 POINTS OR 0.33%  

Trading from Europe and Asia:
1. Europe stocks  OPENED MIXED TO RED  

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 12.67 POINTS OR 0.05%  / SHANGHAI CLOSED UP 2.03 POINTS OR 0.06%   /Australia BOURSE CLOSED DOWN 0.21% /Nikkei (Japan)CLOSED UP 67.39 POINTS OR 0.33%   / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1301.65

silver:$17.02

Early TUESDAY morning USA 10 year bond yield:  2.218% !!! DOWN 0   IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield  2.758, DOWN 1 IN BASIS POINTS  from MONDAY night. (POLICY FED ERROR)

USA dollar index early TUESDAY morning: 92.95 UP 30  CENT(S) from MONDAY’s close. 

This ends early morning numbers  TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 2.488% DOWN 3  in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.003%  UP 1/2  in   basis point yield from MONDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.612% DOWN 1  IN basis point yield from MONDAY 

ITALIAN 10 YR BOND YIELD: 2.123 UP 1 POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 51 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.408% UP 1/2  IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.1779 DOWN .0076 (Euro DOWN 76 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.19 UP 0.463(Yen DOWN 46  basis points/ 

Great Britain/USA 1.3434 DOWN  0.0042( POUND DOWN 42 BASIS POINTS)

USA/Canada 1.2387 UP .0019(Canadian dollar DOWN 19 basis points AS OIL ROSE TO $51.92

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This afternoon, the Euro was DOWN 76 basis points to trade at 1.1779

The Yen FELL to 112.19 for a LOSS of 46  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  

The POUND FELL BY 42  basis points, trading at 1.3434/ 

The Canadian dollar FELL by 19 basis points to 1.2387,  WITH WTI OIL RISING TO :  $51.92

The USA/Yuan closed at 6.6398/
the 10 yr Japanese bond yield closed at +.034%  UP 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 2  IN basis points from MONDAY at 2.238% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.782 UP2  in basis points on the day /

Your closing USA dollar index, 93.14  UP 49 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 TUESDAY: 1:00 PM EST

London:  CLOSED DOWN  15.55 POINTS OR 0.21%
German Dax :CLOSED UP 10.39 POINTS OR 0.08%
Paris Cac  CLOSED UP 1.63 POINTS OR 0.03% 
Spain IBEX CLOSED DOWN 26.90 POINTS OR 0.20%

Italian MIB: CLOSED UP 41.08 POINTS OR 0.18% 

The Dow closed down 11.77 OR 0.05%

NASDAQ WAS closed up 9.57  POINTS OR 0.15%  4.00 PM EST

WTI Oil price;  51.92  1:00 pm; 

Brent Oil: 58.19 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  58.04 UP 49/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 49 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO  +0.408%  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:$52.12

BRENT: $58.59

USA 10 YR BOND YIELD: 2.234%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.773% (yield curve flattens)

EURO/USA DOLLAR CROSS:  1.1789 DOWN .0067

USA/JAPANESE YEN:112.25  UP  0.515

USA DOLLAR INDEX: 93.02  UP 38  cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3455 : down 21 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2348 UP 22 BASIS pts 

German 10 yr bond yield at 5 pm: +0.408%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Dow Drops Again Despite Lack Of Global Armageddon Threats

No healthcare reform, a hawkish Yellen, and dismal housing and confidence data… equity markets jump…presumably because the world did not end… but did dump into the close

 

“and… it’s gone”

 

All major equity indices gained on the day (with Trannies and Small Caps extending their exuberance) and Nasdaq the laggard on the week still… (NOTE – rebound on EU close, rebound on Yellen remarks, but weak close)

 

S&P was ‘managed’ around the key 2500 level, thanks to another VIX crush to a 9 handle…BUT that failed…

 

FANGs ended the day positive but not by much…

 

It looks like the AAPL buyback machine was turned back on today…

 

Will Fang catch down to AAPL?

 

Banks continue to outperform the market even as the yield curve continues to flatten drastically…

 

Treasury yields ended the day modestly higher – not quite erasing yesterday’s gains…

 

The Dollar Index rose once again, tagging the Aug 16th FOMC Minutes lows…

 

WTI/RBOB sank on the day (ahead of tonight’s API inventory data)…

 

Gold dropped back to $1300 – erasing any North Korea concerns – with some noise from a hawkish Yellen…

 

And finally, Swiss National Bank stocks crashed 35% in the last few days (back below Bitcoin)…

end

Chief Clown of the Federal Reserve Speaks:

she is still mystified to explain inflation to us!
(courtesy zerohedge)

 

Watch Live: Hawkish Yellen Says Fed May Have Misjudged Inflation, Labor Market

Update: In her prepared remarks, Yellen crucially said,

A more important issue from a policy standpoint is that some key assumptions underlying the baseline outlook could be wrong in ways that imply that inflation will remain low for longer than currently projected.”

As Bloomberg explains, she is stating a bit more clearly than before that the FOMC doesn’t have a handle on why inflation is low and acknowledging that it may last longer than they predict.

*  *  *

As we detailed earlier, on the heels of Bostic (“we didn’t blow any bubbles”) Brainard (“some barriers to growth are structural”) this morning and Kashkari (“no inflation”), Evans (“need more data”), and Dudley (“inflation’s coming soon”) yesterday; it is Fed Chair Janet Yellen’s turn to speak this afternoon on “Inflation, Uncertainty and Monetary Policy” as the dollar extends its post-FOMC gains (to 1-month highs).

Since The FOMC, Fed Speakers have been active…

Raphael Bostic, Atlanta Fed president: “I actually don’t think that our policies are too easy in the sense of really facilitating some sort of asset bubble.”

 

Lael Brainard, Fed governor: Benefits of a lengthy U.S. recovery “can only go so far” and some barriers appear to be structural, sees “widening gulf” between large, small cities.

 

Neel Kashkari, president Minneapolis, FOMC voter in 2017: “I don’t see inflation taking off so I see no need to tap the brakes.”

 

Charles Evans, president Chicago Fed, voting member: “I think we need to see clear signs of building wage and price pressures before taking the next step in removing accommodation.”

 

William Dudley, president New York Fed, permanent voter (and most notably considered to be closely aligned with Yellen’s way of thinking): “With a firmer import price trend and the fading of effects from a number of temporary, idiosyncratic factors, I expect inflation will rise and stabilize around the FOMC’s 2 percent objective over the medium term.

As a reminder, the Fed Chair said that “we don’t fully understand inflation” and added that the “shortfall of inflation this year is more of a mystery,” but, while Yellen speaking would normally be must-watch, with only a few days having passed since her post-statement press conference, we wonder just how much flip-flopping is possible. At that appearance, the Fed chief also downplayed the significance of the weak core inflation data as the central bank set the start date for the reduction of its balance sheet and signaled that an additional rate hike this year remained appropriate.

Additionally, though we doubt she will comment on it, Republican Senator Richard Shelby said he doesn’t think President Donald Trump will nominate Yellen for a second term at the helm of the U.S. central bank. Shelby said Tuesday in an interview with Bloomberg Television’s Vonnie Quinnthat he had spoken with the president about the Fed.

“I believe he will appoint somebody else to take her place,” the No. 2 Republican on the Senate Banking Committee said. “But ultimately, that is up to the president.”

Live Feed (from The National Association of Business Economics)

click image for link to Bloomberg’s Live Coverage

Headlines include (via Reuters)

  • YELLEN SEES ‘CONSIDERABLE’ ODDS THAT INFLATION WON’T STABILIZE AT 2-PCT OVER NEXT FEW YEARS
  • FED’S YELLEN SAYS UNCERTAINTIES STRENGTHEN CASE FOR GRADUAL RATE HIKES
  • YELLEN SAYS GRADUAL APPROACH TO RATE HIKES PARTICULARLY APPROPRIATE IN LIGHT OF SUBDUED INFLATION, LOW NEUTRAL RATE
  • YELLEN SAYS THERE IS A RISK INFLATION EXPECTATIONS ARE NOT AS WELL-ANCHORED AS THEY APPEAR
  • YELLEN SAYS DATA SUGGESTS LABOR MARKET IS HEALTHY, WITHOUT SUBSTANTIAL SLACK AND NOT OVERHEATED
  • YELLEN SAYS EVIDENCE ON LABOR MARKET NOT DEFINITIVE, MUST BE ‘OPEN-MINDED’
  • YELLEN SAYS WOULD BE IMPRUDENT TO LEAVE RATES ON HOLD UNTIL INFLATION REACHES 2 PCT
  • YELLEN SAYS FED CAN STILL ACHIEVE 2-PCT INFLATION GOAL EVEN IF IT IS UNDERESTIMATING SLACK OR OVERESTIMATING INFLATION EXPECTATIONS
  • FED’S YELLEN SAYS LOW INFLATION LIKELY DUE TO TRANSITORY FACTORS, SEES MANY UNCERTAINTIES
  • YELLEN SAYS DOWNWARD PRESSURE ON INFLATION COULD PROVE UNEXPECTEDLY PERSISTENT
  • YELLEN SAYS FED SHOULD BE `WARY OF MOVING TOO GRADUALLY’
  • YELLEN SAYS WOULD BE IMPRUDENT TO LEAVE RATES ON HOLD UNTIL INFLATION REACHES 2 PCT

 

Via Bloomberg:

Fed Chair Janet Yellen said FOMC may have misjudged fundamental forces driving inflation and strength of labor market, and policy makers “stand ready to modify our views based on what we learn.”

  • “We will need to stay alert” and adjust monetary policy as information comes in, Yellen said in text of speech Tuesday in Cleveland during annual meeting of National Association for Business Economics
  • “My colleagues and I must be ready to adjust our assessments of economic conditions and the outlook when new data warrant it”

Downward pressures on inflation “could prove to be unexpectedly persistent”

  • Economic outlook is subject to “considerable uncertainty”

FOMC’s understanding of the forces driving inflation is “imperfect,”policy makers recognize “something more persistent” may be responsible for current undershooting of long-run objective

  • While inflation will most likely stabilize around 2% over the next few years, “odds that it could turn out to be noticeably different are considerable”
  • There’s also risk that inflation expectations “may not be as well anchored as they appear and perhaps are not consistent with our 2 percent goal”

Stabilizing inflation at around 2% “could prove to be more difficult than expected”

Key assumptions underlying baseline outlook “could be wrong” in ways that imply inflation will remain low for longer than currently projected; for example, labor market conditions may not be as tight as they appear

Under certain conditions, “continuing to revise our assessments in response to incoming data would naturally result in a policy path that is somewhat easier than that now anticipated”

Significant uncertainties strengthen the case for gradual pace of tightening; however, Fed must also be wary of moving too gradually; “it would be imprudent to keep monetary policy on hold until inflation is back to 2 percent”

Actual value of long-run sustainable unemployment rate “could well be noticeably lower” than FOMC currently projects; can’t rule out possibility that some slack still remains in labor market

  • Unemployment rate is probably “correct” in signaling that labor-market conditions have returned to pre-crisis levels; however, that doesn’t necessarily mean that economy is now at full employment
  • Data suggest a generally healthy labor market, although can’t make “any definitive assessment”; policy makers “must remain open minded on this question” and its implications for reaching inflation goal

 

The last ditch effort to repeal Obamacare ends after Collins says no to the Cassidy-Graham bill

(courtesy zerohedge)

Last Ditch Obamacare Repeal Bill Officially Dead After Collins Says No

Not only was the Republicans’ third attempt to repeal Obamacare not lucky, but as of moments ago, said attempt has died a total of three times, the first when John McCain said he would vote no last Friday, then yesterday when Ted Cruz also said he would not support the Graham-Cassidy Obamacare repeal bill, and then the third and final time came late on Monday when Maine Senator Susan Collins confirmed she would oppose the latest GOP effort to repeal and replace ObamaCare, dooming the measure.

“Health care is a deeply personal, complex issue that affects every single one of us and one-sixth of the American economy. Sweeping reforms to our health care system and to Medicaid can’t be done well in a compressed time frame, especially when the actual bill is a moving target,” she said in a statement.

Senator Collins opposes Graham-Cassidy health care bills http://bit.ly/2wPKVKP 

Her announcement is hardly a surprise: as we said last week, Collins was widely viewed as a “no” vote but talked with Pence over the weekend and said Sunday she wanted to see the preliminary analysis from the Congressional Budget Office. “It’s very difficult for me to envision a scenario where I would end up voting for this bill,” she told CNN’s “State of the Union.” Well, just prior to Collins’ statement, the CBO projected that the last-ditch GOP ObamaCare repeal bill would result in “millions” of people losing coverage. The agency did not give a specific number given a lack of time to do the analysis before a vote, but said the “direction of the effect is clear.” That was enough to seal Collins’ “no” answer.

According to Bloomberg, Collins joins Republican Sens. Rand Paul and John McCain, who have already come out against bill, although technically on Sunday Ted Cruz said that “Right now, they don’t have my vote and I don’t think they have Mike Lee’s vote either,” which means that the third and final attempt to repeal Obamacare was not even down to the wire.

Collins’s announcement came as Graham, Cassidy and the White House engaged in a dash of last minute negotiations to try to keep their ObamaCare repeal push alive and win over holdouts, including Collins. “If there’s a billion more going to Maine … that’s a heck of a lot,” Cassidy told The Washington Post. “It’s not for Susan, it’s for the Mainers. But she cares so passionately about those Mainers, I’m hoping those extra dollars going to her state … would make a difference to her.”

According to The Hill, it isn’t immediately clear whether leadership will force a vote even though they are short of necessary support to pass a bill. “I’m in a fact-gathering mode,” Sen. John Cornyn (R-Texas), the No. 2 Senate Republican, told reporters earlier Monday.

A spokesman for Majority Leader Mitch McConnell (R-Ky.) said last week that it was his “intention” to bring up Graham-Cassidy but he didn’t mention a potential vote in his opening remarks on Monday. Rank-and-file members have also expressed skepticism that they would ultimately have a vote.

And now onto Trump’s tax reform, which despite Wall Street’s recent spike in enthusiasm will likely suffer the same fate as Obamacare repeal.

end

 

Leaks on Trump’s tax proposal is down to 3 levels and the lowest rate has been raised from 10 to 12% but double the standard deduction to 12,000.  Many lower income citizens will thus end up paying no tax.  As David Stockman suggests, a huge number of filers in the uSA pay no tax and this number will increase.  USA needs a consumption tax for additional revenue.

(courtesy zerohedge)

Trump Tax Plan Latest Leak: Lowest Tax Rate Rises To 12%, But Standard Deduction Doubles

Tyler Durden's picture

Continuing the recent flurry of leaks of the Trump tax plan set to be unveiled tomorrow, Axios reports that “GOP leaders have agreed to raise the lowest individual tax rate from 10 to 12 percent, paired with doubling the standard deduction.”

As previously leaked, the plan will also collapse the number of brackets from seven to three, while the standard deduction is set to almost double to $12,000 for a single filer and $24,000 for married couples, which means that Trump can correctly argue that many more low income earners would pay no tax under his plan. Also, as previously noted, the top tax bracket would fall from 39.6% to 35%.

According to Axios, Trump plans to sell the proposal tomorrow as a populist “tax cut” but notes that “as recently as yesterday top Republicans on Capitol Hill were nervous as they got word that Trump wasn’t entirely thrilled with the product that had been hashed out in immense secrecy for weeks with two members of his administration, Gary Cohn and Steven Mnuchin, working with GOP leaders.” However, that changed last night when Trump reportedly has come around to supporting the framework, “despite his misgivings about the corporate rate not being low enough and about the political risks of raising the lowest rate.”

The bottom line is that many more people will now pay no tax because of the increased deduction, which will allow Trump to pitch the proposal as a tax cut for the middle class as well as for the wealthy.

It was not immediately clear what the projected impact on the budget deficit will be as a result of said tax cut for both the middle class, for the highest earners, and for corporations and “pass thru” entities.

In previewing the rollout, Axios writes that Trump “won’t go into great detail when he talks about the tax plan tomorrow in Indiana, leaving plenty of negotiating room for the tax-writing committees in the House and Senate.”

As of yesterday morning Trump hadn’t signed off on the final product, and as with all policy announcements involving Trump, Republican Hill leaders will be holding their breaths to some extent until the president actually utters the words. Speaking with conservative groups at the White House yesterday Trump, reassured them of his commitment when he gushed about the “tax cut” he was planning to unveil.

Confirming his enthusiasm for the plan, moments ago President Trump said that “we will cut taxes tremendously for the middle class”, even as he added that he would discuss the framework for tax reform with lawmakers before it is released tomorrow.

end

USA Consumer Confidence drops as Americans are now beginning to lose faith even in the stock market

 

(courtesy zerohedge)

Consumer Confidence Drops As Americans Lose Faith In The Stock Market

The Conference Board’s Consumer Confidence measure for September disappointed expectations with both current and future indices dropping (the former more than the latter).

Differences across regions are very notable as storms impacted confidence…

 

However, what is most concerning (for the powers-that-be), is the plunge in faith that the stock market will go higher…

 

This is the lowest confidence in continued stock market gains since the election.

end

New home sales,  (hard data) continues to show a pattern of now growth.  Sales tumbles to the lowest level in one year.

 

(courtesy zerohedge)

end

 

Steve Bannon on the warpath against Republican establishment such as Mitch McConnell as he predicts a day of reckoning for them.  He blasts the NFL for their behaviour on Sunday and Monday night

(courtesy zerohedge)

end

 

Famed real estate expert Sam Zell warns that this is not a time to buy any real estate: it is a falling knife…the amazon effect on bricks and mortar operations

 

(courtesy zerohedge)

 

 

“This Is Not A Time To Buy Anything” – Sam Zell Warns Retail Real Estate Market Is A “Falling Knife”

CNBC’s cheerleading staff had a very difficult time finding the silver lining in retail investing this morning as they relentlessly pressed Sam Zell on the value of commercial real estate.  Asked to offer up his thoughts on where retail real estate is headed over the next five years, Zell highlighted the significant excess inventory in the U.S., 4-5x more per capita than Europe, and said investing in the space right now is like catching a “falling knife.”

“Like a falling knife.  You start with the fact that the U.S. has 4 or 5 times the amount of square footage per person of retail as anywhere else in the world.  So we start with an enourmously large inventory of retail.”

 

“3 years ago your could buy an 8% mall…you could buy a B-mall and it was probably an 8% cap rate.  The same mall, 3 years later, is now selling at 13% and 14%.  So you’ve seen enourmous erosion of value.”

 

“When the knife falls there’s going to be plenty of opportunities for people to step up and say ‘what are alternate uses?'”

Pressed on whether now just might be the time to take a contrarian view on the collapsing retail space, Zell again was unable to satiate the desires for positive news from his eager hosts.

“An area that’s in this much disarray, with so many weak players, is not an area where I would want to deploy capital at this time.  And I’m generally a contrarian but I think what we’re dealing with here is very significant.”

https://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&byGuid=3000657666&size=600_337

 

Of course, things only went from bad to worse for the CNBC hosts when Zell offered up some positive commentary on Trump’s presidency. Per CNBC:

Corporate America is willing to invest money on a longer-term basis under President Donald Trump than the previous “anti-business administration” of Barack Obama, real estate mogul Sam Zell told CNBC on Tuesday.

 

“Bluntly, the only way I can square anything is I focus on what gets done, not what’s said,” the billionaire said on “Squawk Box.” “On a measure of what’s gotten done, I believe there’s been very significant change since Trump was elected in November, and change that is positive.”

 

Zell points to deregulation and promises of tax cuts and massive infrastructure spending as major positives for business.

 

“Just think that all of a sudden there are no industries that are pinata[s] of the president,” Zell said, referring as an example to what he called Obama’s campaign against fossil fuels.

 

“I’m more optimistic than I was six months ago. But I’m not ready to party,” Zell told CNBC on Tuesday, adding the current business environment is not one of buy anything and win. Investors need to pick carefully, he added.

https://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&byGuid=3000657658&size=600_337

 

Meanwhile, the most shocking part of the interview segments above is that CNBC didn’t encounter any “technical difficulties” as Zell offered up his positive comments on the Trump presidency while taking a shot a Obama.

 

 

end

Connecticut’s capital Hartford has just been downgraded to deep junk, CC ,and S and P now states that their default is a virtual certainty

 

(courtesy zerohedge)

 

Connecticut Capital Hartford Downgraded To Deep Junk, S&P Says “Default Virtual Certainty”

Two months after S&P downgraded the state capital of Connecticut, Hartford, to junk, when it cuts its bond rating from BB+ to BB- citing growing liquidity pressures and weaker market access, the city which has been rumored to be preparing to file for bankruptcy protection and which has seen an exodus of corporations and businesses in recent months, just got more bad news when S&P downgraded it by a whopping 4 notches deeper into junk territory, from BB- to CC, stating that “a default, a distressed exchange, or redemption appears to be a virtual certainty.”

“The downgrade to ‘CC’ reflects our opinion that a default, a distressed exchange, or redemption appears to be a virtual certainty,” said S&P Global Ratings credit analyst Victor Medeiros.

The rating agency also warned that it could take additional action to lower the rating to ‘Default’ if the city executes a bond restructuring or distressed exchange, or files for bankruptcy.

In our view, the potential for a bond restructuring or distressed exchange offering has solidified with the news that both bond insurers are open to supporting such a measure in an effort to head off a bankruptcy filing. Under our criteria, we would consider any distressed offer where the investor receives less value than the promise of the original securities to be tantamount to a default.

In short: while Chicago has so far dodged the bullet, the capital of America’s richest state (on a per capita basis), will – according to S&P – be also the first to default in the coming months.

Full S&P note below:

Hartford, CT GO Debt Rating Lowered Four Notches To ‘CC’ On Likely Default

 

S&P Global Ratings has lowered its rating four notches to ‘CC’ from ‘B-‘ on Hartford, Conn.’s general obligation (GO) bonds and Hartford Stadium Authority’s lease revenue bonds. The ratings remain on CreditWatch with negative implications, where they were placed on May 15, 2017. At this rating level and due to the characteristics of the city’s appropriation-supported debt, we believe its appropriation and GO debt share similar risk and have therefore made no notching distinction. We could differentiate the GO and appropriation ratings again in the future based on our view of their relative vulnerability to nonpayment.

 

“The downgrade to ‘CC’ reflects our opinion that a default, a distressed exchange, or redemption appears to be a virtual certainty,” said S&P Global Ratings credit analyst Victor Medeiros.

S&P Global Ratings could take additional action to lower the rating to ‘D’ if the city executes a bond restructuring or distressed exchange, or files for bankruptcy. In our view, the potential for a bond restructuring or distressed exchange offering has solidified with the news that both bond insurers are open to supporting such a measure in an effort to head off a bankruptcy filing. Under our criteria, we would consider any distressed offer where the investor receives less value than the promise of the original securities to be tantamount to a default. The mayor’s public statement citing the need to restructure even if the state budget provides necessary short-term funds further supports our view that a restructuring is a virtual certainty. In our view, the city is vulnerable to payment interruptions due to its near-term liquidity crisis. The downgrade also considers the ongoing state impasse in adopting a budget and providing the necessary liquidity support for the city in a timely manner to avoid a payment disruption. The downgrade reflects the likelihood that there will not be any agreement on a bipartisan budget before Oct. 1, when planned municipal cuts are scheduled to take effect.

 

The state of Connecticut is facing its own fiscal challenges, entering the fiscal year without an enacted budget. With no budget resolution in place, the governor recently revised an executive order designed to keep the government operating in balance for the fiscal year. To eliminate the state’s 2018 projected deficit, the governor reduced total aid to municipalities by a significant amount; Hartford would stand to lose about $49 million in payments in lieu of taxes and municipal revenue sharing grant payments it otherwise would receive in October. The city’s is scheduled to repay short-term tax anticipation notes (TANs) on Oct. 31, and has the next debt service payment scheduled for Nov. 15.

 

Although we do not see a bankruptcy filing by the city as likely, should a debt exchange proceed, given the state budgetary impasse, and the uncertainty surrounding any exchange offer, the risk of a bankruptcy filing remains as city officials have publicly indicated they are actively considering bankruptcy. The fact that the city hired a bankruptcy attorney in July 2017 lends credence to the idea that bankruptcy is potentially on the table. On Sept. 25, the city met with bondholders to discuss future repayment options. Such a meeting, regardless of the outcome, indicates a public desire to adjust debts and to have met with creditors; both of which are elements of eligibility to file for Chapter 9 bankruptcy. Although state law still requires approval from the governor, and consent from the treasurer and general assembly, this action heightens the likelihood that Hartford will formally begin that process.

 

Hartford’s budgetary performance has been weak for several years, and the management environment remains constrained due to a structurally imbalanced budget with no credible corrective plan. The city’s fiscal 2017 general fund balance is projected to close with a negative balance of $9.9 million on a generally accepted accounting principles basis, or about 1.8% of general fund expenditures. Hartford’s adopted fiscal 2018 (fiscal year-end June 30) budget totals $612 million, an increase of roughly 10.8% from the previous year. Despite a 3% increase in general fund revenues, the budget gap remains sizable at $49.6 million, or about 8% of budgeted expenditures. Beyond the current fiscal year, Hartford faces significant fiscal challenges with rising fixed costs and limited revenue-raising ability. Based on its projected budget, the gap expected for fiscal 2019 is in excess of $49 million (more than 8% of estimated expenditures) and increases to more than $69 million by 2021.

 

Along with the operational challenges mentioned, the city’s weak budgetary performance has severely eroded liquidity. The decline in cash resulted in Hartford having to issue TANs in fiscal 2017 to cover operating expenditures through October in anticipation of property taxes and state revenues (a period which crosses fiscal years).

 

S&P Global Ratings expects to resolve its CreditWatch action on the long-term rating within 90 days. We believe there is a one-in-two likelihood of another downgrade if the city were to file for bankruptcy or pursue a restructuring that offers bondholders less than the original promise of the bonds. Although unlikely, if timely budget adoption translates into stabilized liquidity, no exchange occurs, and a credible plan toward long-term structural support is identified, we could remove the ratings from CreditWatch. Over time, upward rating movement will depend on the city’s ability to achieve and sustain structural balance

END

This is getting stranger by the minute.  We now learn that the IRS has already been investigating Manafort and yet they did not participate in the raid at his house in which the subject was tax evasion. There is a very limited amount of information that can be shared between the IRS and Mueller.  It can go one way from Mueller to the IRS but not the other way. The object of the exercise is eventually to get dirt on Trump

 

(courtesy zerohedge)

 

IRS Sharing Tax Information Of Trump Campaign Officials With Robert Mueller

Tyler Durden's picture

In its latest exclusive ‘bombshell’ report, CNN has just announced that Special Counsel Mueller’s team is now working directly with the IRS to collect financial information on Paul Manafort and Michael Flynn.  Of course, given that the FBI and Mueller raided Manafort’s home over two months ago and speculation of an imminent indictment has been circulating for days/weeks, it would seem like this wouldn’t be much of a surprise…but anything to keep the ‘Russian collusion’ headlines coming…

The IRS is now sharing information with special counsel Robert Mueller about key Trump campaign officials,after the two entities clashed this summer over both the scope of the investigation into Russia’s meddling in the 2016 election and a raid on former Trump campaign chairman Paul Manafort’s home, people briefed on the matter tell CNN.

 

After several months of being at odds, one source said, the IRS Criminal Investigation division is now sharing information about campaign associates, including Manafort and former White House national security adviser Michael Flynn. The sharing happened after the two camps reached an agreement following consultation with officials at the Treasury Department.

 

A former high-level Justice Department official says the information shared would include anything tax return-related such as real estate and banking records. The former official added the IRS is very restricted in what information it can share under Title 26 US Code and would normally need a specific grand jury subpoena in order to share tax returns with another agency.

Mueller

CNN also notes that the IRS elected not to participate in Mueller’s July Raid due to concerns that “the search would interfere with the separate IRS investigation of Manafort.”

CNN has learned that the IRS did not participate in the July raid by FBI agents in part because of IRS objections that the search would interfere with the separate IRS investigation of Manafort, according to people briefed on the investigations.

 

The special counsel’s office decided to proceed with the search on Manafort’s home with only FBI agents carrying it out, the sources said.

 

The absence of IRS criminal investigations agents for the raid is unusual for a probe that centers on tax and financial matters. As CNN has previously reported, during the raid the FBI collected tax and other financial documents from Manafort’s home, according to search warrant documents in the Manafort raid. The search warrant documents said the scope of the investigation includes possible crimes beginning January 1, 2006, a source told CNN.

Of course, the real question is whether Mueller has requested Trump’s tax returns from the IRS and what hurdles would be required to receive such information should he become convinced it were necessary.

The new information about the depth of IRS involvement renews questions surrounding the controversial issue of President Donald Trump’s tax returns, which he refused to release during the campaign despite decades of precedent by presidential candidates.

 

It is not clear whether the special counsel has asked for or obtained Trump’s tax returns. Sources say if Mueller’s office does have Trump’s returns, then Rosenstein, who oversees the probe, likely would have needed to sign off, given the sensitivity surrounding the matter.

After that, the only other outstanding question is where to set the over-under on Manafort’s perp walk and whether or not it will result in what Mueller truly covets: dirt on Trump.

 

 

Well that about does it for tonight

I will see you Wednesday night.

 

Harvey.

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