GOLD: $1282.25 down $3.75
Silver: $16.68 down 14 CENT(S)
Closing access prices:
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: $1293.04 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1284.30
PREMIUM FIRST FIX: $8.24 (premiums getting larger)
SECOND SHANGHAI GOLD FIX: $1297.75
NY GOLD PRICE AT THE EXACT SAME TIME: $1284.75
Premium of Shanghai 2nd fix/NY:$13.00 (PREMIUMS GETTING LARGER)
LONDON FIRST GOLD FIX: 5:30 am est $1286.95
NY PRICING AT THE EXACT SAME TIME: $1288.20 ???
LONDON SECOND GOLD FIX 10 AM: $1283.10
NY PRICING AT THE EXACT SAME TIME. 1283.10
For comex gold:
NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 411 NOTICE(S) FOR 41100 OZ.
TOTAL NOTICES SO FAR: 411 FOR 41100 OZ (1.2783 TONNES)
285 NOTICES FILED TODAY FOR
Total number of notices filed so far this month: 285 for 1,425,000 oz
Let us have a look at the data for today
In silver, the total open interest FELL SLIGHTLY BY 573 contracts from 184,997 DOWN TO 184,424 DESPITE THE SMALL SIZED RISE IN PRICE THAT SILVER UNDERTOOK IN YESTERDAY’S TRADING (UP 3 CENTS ). IT SURE LOOKS LIKE WE HAD CONSIDERABLE BANKER SHORT COVERING YESTERDAY AND TODAY. BOTH GOLD AND SILVER JUMPED EVEN THOUGH 99% OF THE TIME, THEY RAID ON THE DAY PRIOR TO FIRST DAY NOTICE. THIS IS A GREAT SIGN THAT THE PHYSICAL MARKET IS OVERWHELMING THE PAPER MARKET AND THEIR NAKED SHORTING.
RESULT: A SMALL FALL IN OI COMEX WITH THE 3 CENT PRICE RISE. IT LOOKS LIKE WE HAD A SMALL AMOUNT OF BANKER SHORTS COVERING. THE BANKERS YESTERDAY TRIED TO ORCHESTRATE ANOTHER RAID AND FAILED MISERABLY IN THEIR ATTEMPT.
In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.922 BILLION TO BE EXACT or 132% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT OCT MONTH/ THEY FILED: 285 NOTICE(S) FOR 1,425,000 OZ OF SILVER
In gold, the open interest FELL BY A CONSIDERABLE 7,202 CONTRACTS DESPITE THE RISE in price of gold ($1.55 ) WITH YESTERDAY’S COMEX TRADING. The new OI for the gold complex rests at 532,683. GENERALLY WHEN WE ENTER FIRST DAY NOTICE WEEK FOR AN ACTIVE GOLD MONTH, WE SEE THE OPEN INTEREST FALL APPRECIABLY. THIS IS BECAUSE LONGS CAN ACCEPT PRIVATE EFP CONTRACTS WHICH ENTITLES THEM TO A FIAT BONUS AND A FUTURES CONTRACT ON ANOTHER BOURSE AND MOST LIKELY THAT WOULD BE A LONDON BASED FORWARD. WE HAVE NO DOUBT HAD AN EXCESS OF 5400 EFP’S ISSUED. IN OTHER WORDS THE DEMAND IS STILL PRESENT BUT MOVED TO ANOTHER EXCHANGE AND THE OBLIGATION TO DELIVER STILL RESTS WITH OUR CRIMINAL BANKERS.
Result: A LARGE SIZED DECREASE IN OI WITH THE RISE IN PRICE IN GOLD ($1.55) AND CONSIDERABLE EFP’S ISSUED (IN EXCESS OF 7200 )
we had: 411 notice(s) filed upon for 41,100 oz of gold.
With respect to our two criminal funds, the GLD and the SLV:
Tonight , NO CHANGES in gold inventory at the GLD:
Inventory rests tonight: 864.65 tonnes.
Today: a no changes in inventory:
INVENTORY RESTS AT 326.757 MILLION OZ
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver FELL BY ONLY 573 contracts from 184,997 DOWN TO 184,424 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . AGAIN TODAY, IT SEEMS THAT A TINY FRACTION OF OUR BANKER SHORTS COVERED. THEY NEED TO COVER A MUCH HIGHER NUMBER OF OPEN INTEREST CONTRACTS WHEN RAIDS ARE INITIATED. SO THEY TRIED AGAIN YESTERDAY AND AGAIN TODAY.
RESULT: A SMALL SIZED DROP IN SILVER OI AT THE COMEX WITH THE SMALL RISE IN PRICE OF 3 CENTS IN YESTERDAY’S TRADING. ANOTHER ATTEMPTED RAID ORCHESTRATED BY THE CROOKS . IT FAILED YESTERDAY JUDGING BY THE SMALL DROP IN OI. THE CROOKS SEEM BENT ON DRIVING GOLD BELOW $1285.00 AND SILVER AT $16.75 AS NO DOUBT WE HAD CONSIDERABLE UNDERWRITTEN OPTIONS AT THESE LEVELS.
2.a) The Shanghai and London gold fix report
2 b) Gold/silver trading overnight Europe, Goldcore
and in NY: Bloomberg
3. ASIAN AFFAIRS
i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 9.30 POINTS OR 0.28% / /Hang Sang CLOSED UP 132.70 POINTS OR 0.48%/ The Nikkei closed DOWN 6.83 POINTS OR 0.03%/Australia’s all ordinaires CLOSED UP 0.23%/Chinese yuan (ONSHORE) closed WELL UP at 6.6535/Oil DOWN to 51.62 dollars per barrel for WTI and 57.01 for Brent. Stocks in Europe OPENED GREEN/EXCEPT SPAIN. Offshore yuan trades 6.6467 yuan to the dollar vs 6.6535 for onshore yuan. NOW THE OFFSHORE MOVED A LITTLE STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR) AND THE OFFSHORE YUAN IS STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS VERY HAPPY TODAY
3a)THAILAND/SOUTH KOREA/NORTH KOREA
b) REPORT ON JAPAN
c) REPORT ON CHINA
4. EUROPEAN AFFAIRS
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
iii)Now Madrid is ordering Google to delete the app used for the Catalan Independence. So much for democracy…
6 .GLOBAL ISSUES
7. OIL ISSUES
The number of rigs increased by six this week as production still is soaring
( zero hedge)
8. EMERGING MARKET
9. PHYSICAL MARKETS
i)This commentary from Jan Skoyles of Goldcore was in yesterday’s commentary. It is extremely important in that they have discovered fewer “accidents” in the financial scene if the country was on a gold standard
( Chris Powell/Jan Skoyles)
ii)The next country to ban Bitcoin and other cryptos: South Korea
iii)This may be good for us: Warsh is against the manipulation of markets and now he may be set to lead the Fed. Will he change the gold/silver rigging?
10. USA Stories
i)TRADING THIS MORNING IN NY
Janet is confused again: her key core PCE inflation indicator slumped to 1.29% year over year, the lowest level since Oct 2015. Regular PCE: 1.4%. below expectations of 1.5%..this caused the dollar to drop.
ii)Not good: real personal spending drops the most in almost 2 years. This is a very important number as it is the largest component of the GDP
( zero hedge)
iii)Soft data home buying “hope’ crashes to a 5 yr low which in turn drags the consumer confidence index lower
iv)Chicago PMI, which is a soft data entry point explodes higher by 5 standard deviations.
v) a.Puerto Rico continues to struggle as ATM machines run out of physical cash
( zero hedge)
v b)Now large cities which have a huge Puerto Rican population is asking for help as many expect a huge influx of hurricane ravaged citizens as they shelter with friends in the USA while their cities are rebuilt.
vi)The orange growers in Florida are in a dire situation. First, over 50% of the plants have been destroyed by Irma and secondly they are extremely worried about ‘greening” which is a disease which first affects the leaves and then enters the tree itself. This may decimate the entire Florida orange industry. They are already facing huge competition from Brazil and maybe Brazil will be 100% of the orange juice industry.
( zero hedge)
vii)We have discussed the following at length: the petrodollar scheme is coming apart and that is the reason that gold/silver are behaving better despite constant torment from our bankers.
a must read…
( Jim Rickards/Daily Reckoning)
viii)Here are your six important Republicans and their stance on tax reform;
ix)It sure looks like Kevin Warsh will be the new Fed chairman
x)The uSA orders 60% of Havana embassy to leave Cuba after continual wave of mysterious sonic attacks
xi)WHAT A JOKE!! NOW THE FBI AND THE DEPT OF JUSTICE ARE REFUSING TO COMPLY WITH THE CONGRESSIONAL SUBPOENA FOR THE “TRUMP DOSSIER”
xi1)THE DEFINITIVE WORD OF TAX REFORM
xiii)Now with premiums rising, even the cheapest Obamacare plan is totally unaffordable in 94% of American citie( zerohedge)
Let us head over to the comex:
The total gold comex open interest FELL BY MORE THAN EXPECTED 7,202 CONTRACTS DOWN to an OI level of 532,683 DESPITE THE RISE IN THE PRICE OF GOLD ($1.55 GAIN IN YESTERDAY’S TRADING). OCTOBER IS AN ACTIVE DELIVERY MONTH ALTHOUGH IT IS THE WEAKEST IN TERMS OF ACTUAL DELIVERIES AND OPEN INTEREST. WE CAN VISUALIZE THAT THROUGHOUT THE MONTH OF SEPTEMBER, THE CROOKS UTILIZED THE EMERGENCY EFP SCHEME TO TRANSFER OBLIGATIONS OVER TO LONDON. IT THEN STANDS TO REASON THAT IF THE EMERGENCY WAS IN FORCE THROUGHOUT THE MONTH OF SEPTEMBER IT WOULD CONTINUE ON FIRST DAY NOTICE. IT LOOKS LIKE ANOTHER 7200 LONG COMEX CONTRACTS WERE GIVEN 7200 EFP’S
Result: a LARGER SIZED open interest DECREASE WITH THE GOOD SIZED RISE IN THE PRICE OF GOLD ($1.55.) A LARGE TRANSFER OF COMEX LONGS OVER TO ANOTHER BOURSE LIKE LONDON (TO WHICH THEY RECEIVE A LONDON BASED FORWARD PLUS THEY ALSO ENJOY RECEIVING A FIAT BONUS FOR THEIR EFFORTS.
We have no entered the active contract month is Oct and here we saw a LOSS of 3125 contracts DOWN to 3006 contracts. And thus my definition the amount of gold initially standing for the October contract month is 3006 contracts x 100 oz or 300,600 oz or 9.3499 tonnes. This is unusually high for October and most players go straight to December.
The November contract saw A GAIN OF 210 contracts UP to 1387.
The very big active December contract month saw it’s OI LOSS OF 4,345 contracts DOWN to 424,083.
We had 411 notice(s) filed upon today for 41100 oz
We had 285 notice(s) filed for 1,425,000 oz for the OCT. 2017 contract
|Withdrawals from Dealers Inventory in oz||nil|
|Withdrawals from Customer Inventory in oz||
|Deposits to the Dealer Inventory in oz||nil oz|
|Deposits to the Customer Inventory, in oz||
|No of oz served (contracts) today||
|No of oz to be served (notices)||
|Total monthly oz gold served (contracts) so far this month||
|Total accumulative withdrawals of gold from the Dealers inventory this month||NIL oz|
|Total accumulative withdrawal of gold from the Customer inventory this month||23,630.25 oz|
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 411 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 163 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
|Withdrawals from Dealers Inventory||nil|
|Withdrawals from Customer Inventory||
|Deposits to the Dealer Inventory||
|Deposits to the Customer Inventory||
|No of oz served today (contracts)||
|No of oz to be served (notices)||
|Total monthly oz silver served (contracts)||285 contracts (1,425,000 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||2912.95 oz|
NPV for Sprott and Central Fund of Canada
Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada
Sprott makes hostile $3.1 billion bid for Central Fund of Canada
Submitted by cpowell on Thu, 2017-03-09 01:19. Section: Daily Dispatches
From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017
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.
And now the Gold inventory at the GLD
SEPTEMBER 29/no changes in gold inventory at the GLD/Inventor rests at 864.65 tonnes
Sept 28/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.65 TONNES
Sept 27/WOW!! WITH GOLD DOWN $13.25, WE HAD A HUGE 8.57 TONNES OF GOLD ADDED TO 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.
Now the SLV Inventory
SEPTEMBER 29/no changes in silver inventory at the SLV/inventory rests at 326.757 million oz/
Sept 28/NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ/
Sept 27/STRANGE!! SILVER IS HIT FOR 24 CENTS YESTERDAY AND. 9 CENTS TODAY AND YET NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 326.757 MILLION OZ
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
Indicative gold forward offer rate for a 6 month duration+ 1.33%
At 3:30 pm est we receive the COT report
you will recall last week that we were in the middle of our continual banker raids. Last week the bankers covered a small fraction of their shortfall: this report is as of Tuesday the 26th and you will recall that a massive amount of EFT’s were issued on the 25th
|Gold COT Report – Futures|
|Change from Prior Reporting Period|
|non reportable positions||Change from the previous reporting period|
|COT Gold Report – Positions as of||Tuesday, September 26, 201|
Our large speculators
those large specs that have been long in gold pitched a huge 27,391 contracts and most of these I guess were ETF’s
those large specs that have been short in gold covered 3896 contracts from their short side.
large specs go net short by 22,000 contracts.
those commercials that have been long in gold added 5279 contracts to their long side
those commercials that have been short in gold covered 14,291 contracts at the comex but they still have obligations in London
commercials go net long by 19,500 contracts..
our small speculators
those small specs that have been long in gold added 2334 contracts to their long side
those small specs that have been short in gold covered 1591 contracts from their short side.
conclusions: with EFF’s it is impossible to give any proper analysis.
and now for our silver COT:
|Silver COT Report: Futures|
|Small Speculators||Open Interest||Total|
|non reportable positions||Positions as of:||148||110|
|Tuesday, September 26, 2017|
As I have pointed out to you, silver players do not use the ETF’s as much as gold players.
Our large speculators
those large specs that have been long in silver pitched 7875 contracts from their long side
those large specs that have been short in silver covered a tiny 332 contracts
large specs go net short by 8000 contracts.
those commercials that are long in silver added 1440 contracts to their long side
those large specs that have been short in silver covered only 4762 contracts from their short side.
commercials go net long by only 6100 contracts.
it seems that our commercials are having a much tougher time trying to cover their huge shortfall.
our small speculators
those small specs that have been long in silver pitched a tiny 635 contracts from their long side
those small specs that have been short covered 1363 contracts from their short side.
Major gold/silver trading/commentaries for FRIDAY
Gold Matches SPX 500 Performance In First 3 Quarters; Up 12% 2017 YTD
Editor Mark O’Byrne
– Gold climbs over 12% in YTD, matching S&P500 performance
– Palladium best performing market, surges 36% 2017 YTD
– Gold outperforms Nikkei 225, Euro Stoxx 50, FTSE and ISEQ
– Geo-political concerns including Trump and North Korea supporting gold
– Safe haven demand should push gold higher in Q4
– Owning physical gold not dependent on third party websites and technology remains essential
Click to enlarge. Source Finviz.com
In the year-to-date the gold price performance has matched the S&P 500, climbing over 12%.
Gold’s matching of the S&P 500 is particularly impressive when you consider the record-breaking performance of the benchmark stock market index in the last year. Yesterday it advanced 0.1% to 2510.06, a new all time record high price.
It is also impressive considering sentiment towards stocks is shall we say “irrationally exuberant”, while sentiment towards gold remains muted despite gold eking out gains in 2016 and now again in 2017.
The precious metal has performed well predominantly due to rising uncertainties regarding North Korea, Trump and the political mess in the U.S. and other geopolitical tensions.
Its strong performance is despite noise from the US Federal Reserve regarding its alleged plans to tighten money supply and increase rates. Other major central banks have also provided similar indications.
Elsewhere, gold has outperformed both the Euro Stoxx 50 and Nikkei 225 which are 8.5% and 6.5% higher respectively. The UK’s FTSE and Ireland’s ISEQ are underperforming and have the hallmarks of markets that are topping out.
The FTSE and the ISEQ are 2.5% and 4.25% higher year to date.
Silver, platinum and palladium up 5.5%, 2% and 37% YTD respectively
Gold wasn’t the only precious metal that performed well in the last three quarters. All four precious metals have climbed in price.
Palladium has been the headline grabbing asset in the last year. In the year-to-date the industrial precious metal is up by nearly 37%. Holdings in exchange-traded funds backed are close to the highest since the beginning of the year.
This week for the first time since 2001, palladium topped the platinum price. Palladium is predominantly used in pollution- control devices for gasoline-powered cars and trucks. In contrast platinum is used in diesel-powered engines.
Governments have been slowly clamping down on diesel due to concerns over its role in pollution and emissions scandals. Platinum is up by only 2% this year. Some believe the metal has been oversold in recent days and there is too much heat in the palladium market.
Meanwhile silver is refusing to go below $16/oz. Some investors may feel disappointed that it has failed to break above $19/oz this year, despite strength in gold.
Investors in silver must continue to take heart that silver does still stand to gain whenever the U.S. dollar loses strength or concerns about the stock market creates demands for assets to hedge risk with.
Geo-political concerns with North Korea and elsewhere fuel demand
In a recent Bank of America Merrill Lynch survey the biggest ‘tail risk’ seen by investors was North Korea’s missile risk.
This was ahead of policy missteps in central banks of the US and China, and credit tightening in China.
However, worries over nuclear war are not the only concern fuelling the price of gold. Uncertainty regarding political haggling and stalemate in Washington are also providing key support.
Critics of President Trump are concerned that he and his team have achieved very little since his inauguration. Any plans that have been proposed are seemingly poorly devised and quickly shot- down.
This week the Republicans failed once again to defeat Obamacare, a key component of Trump’s election promises. Also the White House announced a plan for a lower corporate tax rate and to cut the highest individual income tax rate.
Critics argued however that the plan was awash with cronyism and helped the wealthy. There was also little indication given as to how the tax cuts would be funded amid risks that deepening U.S. deficits may further weaken the dollar.
Expect more safe haven demand next quarter
As we all know, gold is a barometer for uncertainty. With a 12% climb in the last year and no sign of risks abating, there is little reason to not expect the price to continue to climb.
Should gold reach $1,400, then this will be a four-year high and a sure sign of a bullish breakout for the precious metal.
We shouldn’t invest in gold because of some ambulance-chasing punt on geopolitical disaster. Gold should play a key role in your investment portfolio as a tool for protecting against risk and hedging declines in stock and other markets and currency devaluations.
In truth, there is still a huge amount of uncertainty regarding the outlook for the global economy and global markets.
No one knows how central banks’ attempts to unwind the last decade of monetary policy will play out, nor does anyone know how President Trump’s government will survive in an America that will continue to feel more pressure from the likes of Russia and China.
Investors need to stay focused on the medium and especially the long-term and the bigger picture.
Sentiment in the gold market remains quite poor. Most of the public remains on the sidelines and there is very little positive coverage of gold.
Nor is there an appreciation of the scale of economic, geo-political and monetary risks facing investors and savers today.
There remains a fundamental lack of knowledge of the still very strong supply and demand factors driving the physical gold market and a lack of understanding as to why gold remains a vitally important asset to own in a portfolio.
Many stock markets are at record highs. Many bond markets are at record highs. Many property markets are at record highs. This makes gold which is remains nearly 33% below its record high very attractive from a hedging and diversification perspective.
Real diversification through owning allocated and segregated gold not dependent on third party websites and technology remains essential.
The old Wall Street adage to always keep 10% of your wealth in gold and hope that it does not work remains prudent.
Lets hope for the best but be prepared for less benign financial scenarios…
This may be good for us: Warsh is against the manipulation of markets and now he may be set to lead the Fed. Will he change the gold/silver rigging?
President’s top candidate to lead Fed knows all about gold market rigging
Submitted by cpowell on Fri, 2017-09-29 15:31. Section: Daily Dispatches
11:36a ET Friday, September 29, 2017
Dear Friend of GATA and Gold:
President Trump’s top candidate for the next chairman of the Federal Reserve Board appears to be former board member Kevin M. Warsh, who has complained repeatedly about the Fed’s manipulation of markets and in 2009 revealed to GATA that the Fed has secret gold swap arrangements with foreign banks.
According to news reports like this one from Bloomberg today —
— Warsh met Thursday with the president and Treasury Secretary Steven Mnuchin to discuss the Fed chairman’s job.
In September 2009, adjudicating GATA’s Freedom of Information Act request to the Fed for access to documents involving gold swaps, Warsh wrote:
“In connection with your appeal, I have confirmed that the information withheld under Exemption 4 consists of confidential commercial or financial information relating to the operations of the Federal Reserve banks that was obtained within the meaning of Exemption 4. This includes information relating to swap arrangements with foreign banks on behalf of the Federal Reserve System and is not the type of information that is customarily disclosed to the public. This information was properly withheld from you.”
Warsh’s letter is posted at GATA’s internet site here:
In an essay published in The Wall Street Journal in December 2011, Warsh complained that “policy makers are finding it tempting to pursue ‘financial repression’ — suppressing market prices that they don’t like,” adding, “Efforts to manage and manipulate asset prices are not new.”
That essay is posted at GATA’s internet site here:
Last month in another essay in The Wall Street Journal, headlined “The Federal Reserve Needs New Thinking” —
— Warsh wrote: “The Fed seeks to fix interest rates and control foreign-exchange rates simultaneously — an impossible task with the free flow of capital. …
“The Fed often treats financial markets as a beast to be tamed, a cub to be coddled, or a market to be manipulated. …
“Real reform should reverse the trend that makes the Fed a general-purpose agency of government. Many guild members believe that central bankers — nonpartisan, high-minded experts — are particularly well-suited to expand their policy remit. They fail to recognize that central bank power is permissible in a democracy only when its scope is limited, its track record strong, and its accountability assured.
“The Fed is suffering from a marked downturn in public support. Citizens are rightly concerned about the concentration of economic power at the central bank. Long after the financial crisis, the Fed holds trillions of dollars of assets that would otherwise be in private hands. And it appears to make monetary policy with the purpose of managing financial asset prices, including bolstering the share prices of public companies.”
Soon after his “financial repression” essay in December 2011, your secretary/treasurer reached Warsh by e-mail at the Hoover Institution at Stanford University in California, where he has been a distinguished visiting fellow in economics. I asked him if he had learned about “financial repression” during his service at the Fed and if he would identify the assets whose prices he wrote were being manipulated by policy makers.
Warsh cordially wished me a nice day.
But if Warsh is nominated and really objects to market manipulation by the Fed and believes that the central bank’s scope should be “limited” and its accountability “assured,” he will remain obliged to answer such questions, especially since his own writings indicate that he knows the answers and how incriminating they are to the central bank.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
This commentary from Jan Skoyles of Goldcore was in yesterday’s commentary. It is extremely important in that they have discovered fewer “accidents” in the financial scene if the country was on a gold standard
(courtesy Chris Powell/Jan Skoyles)
Jan Skoyles: Report in FT is favorable to gold standard
Submitted by cpowell on Thu, 2017-09-28 15:18. Section: Daily Dispatches
11:15a ET Thursday, September 28, 2017
Dear Friend of GATA and Gold:
GoldCore’s Jan Skoyles today takes note of a report in — of all places — the Financial Times suggesting that the gold standard system produced fewer economic disasters than the fiat money system. Skoyles’ commentary is headlined “Gold Standard Resulted in ‘Fewer Catastrophes’ — FT” and it’s posted at GoldCore here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
The next country to ban Bitcoin and other cryptos: South Korea
Ethereum Tumbles After South Korea Bans ICOs, Margin Trading
Ethereum and bitcoin tumbled overnight, after South Korea banned local initial coin offerings and margin trading in cryptocurrencies. According to Joongang and Bloomberg, the Financial Services Commission in Seoul said all forms of ICOs are prohibited in the country, including “projects that share profits, rights, dividends, and other “coin-style” offerings, according to a statement.”
The commission also banned margin trading, i.e., the practice of loaning funds to trade currencies including bitcoin and ethereum, according to an official who clarified the statement. The government plans to investigate any violations and deal with them strictly even before its measures are legislated, it said in the statement.
The announcement triggered a sell-off in crypto markets with Ethereum, which has become a platform for most ICOs, dropping 5.7% while bitcoin fell as much as 3.5%.
“They saw that the best practice was just to ban it before allowing any major crisis to occur, which would have impacted a lot of retail investors there,” Thomas Glucksmann, head of marketing at Hong Kong-based bitcoin exchange Gatecoin told Bloomberg. “Similar to China, they probably didn’t want to ban it, but they didn’t want to take any risk about it getting out of hand.”
“The majority of ICO tokens are being issued through the ethereum platform,” said Glucksmann. “At any sign of vulnerability, the first reaction would be a mass selloff in ether. That’s why the price of ether is susceptible.”
While not nearly as draconian as the Chinese crackdown launched last month which banned all cryptocoin exchange trading, the announcement was the second major blow to cyrptos this month, following Beijing’s ban of ICOs and subsequently, all cryptocurrency trading. Public interest in cryptocurrencies has surged this year – especially in Japan and South Korea which have emerged as the dominant trading centers – prompting officials to issue warnings about an overheated market and fraudulent activity.
While ICOs have been used to raise more than $2 billion this year, the lack of oversight has attracted criminals, with some estimates showing about 10 percent of all ICO funds being stolen by thieves.
According to Bloomberg, South Korea have prosecutors recently caught four cryptocurrency traders who illegally raised 25 billion won ($22 million) from 1,000 investors in a pyramid scheme growing in scale, the South Korea commission said. This month authorities also indicted four people on charges of illegally trading cannabis using bitcoin, the commission said.
South Korea also sees bitcoin as potentially vulnerable to North Korean hacking. Its national police agency said this week it confirmed North Korean hackers tried unsuccessfully to hack four bitcoin exchanges using emails containing malicious codes between July and August.
While the move has predictable has an adverse initial impact on cryptos, many have contended that a crackdown on ICOs, many of which are glarindly illegal and outright ponzi schemes, will extend the long-term viability of bitcoin and ethereum. Countries including the U.S., Canada, Singapore and Hong Kong have also issued warnings about ICOs this year, although none has gone so far as to ban the practice. “It would shock me if you don’t see pump-and-dump schemes in the initial coin offering space,” U.S. Securities and Exchange Commission Chairman Jay Clayton said Thursday in Washington.
Separately, in the Ethereum investment section on Reddit, user “theoneandonlyeric” provided some additional color on the South Korean crackdown:
I’ll give more clarification. Yes, the Korean government is currently only banning credit-granting activities, AKA margin trading within the exchanges. There is no proof or evidence saying that it will ban it entirely, yet.
According to Joongang (one Korea’s largest news outlets) they state that, “there is no regulation on individual investors’ investment behavior within the ICO ban.” It is possible for domestic investors to participate in ICOs conducted by FOREIGN companies.”
Participation is a different story. Banning it entirely, which is China’s case would be devastating. This is not confirmed, but in the long run, Korea might come down to heavy regulation only. The complete ban of ICOs will hinder technological development within Korea. There would be no way it would be completely banned.
Despite the ongoing ICO crackdowns and relentless rhetoric against cryptos, Bitcoin has regined the $4,000 level having dropped as low as $3000 two weeks ago following harsh commentary from Jamie Dimon who called cryptos a “fraud” and comparing it to the 17th century tulip craze. The statement prompted a spirited defense from Macquarie’s Viktor Shvets who noted that the modern financial system is just as much of a “fraud” as bitcoin.
Gold Demand Surges As Price Suffers Worst Month Since November
Amid a resurgent dollar, gold prices have tumbled in September (worst month since Nov 2016). However, as geopolitical tensions soar, with the standoff between the U.S. and North Korea probably topping the list, demand for precious metals surged with Gold ETF holdings rising most since Feb 2017.
Bullion has sunk 2.8 percent in September while holdings in gold-backed ETFs expanded 2.4 percent as of Thursday.
Plenty of investors are still seeking havens, says Barnabas Gan, an economist at Oversea-Chinese Banking Corp. in Singapore.
Your early FRIDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight
2. Nikkei closed DOWN 6.83 POINTS OR 0.03% /USA: YEN FALLS TO 112.44
3. Europe stocks OPENED GREEN EXCEPT SPAIN ( /USA dollar index FALLS TO 93.05 /Euro UP to 1.1814
3b Japan 10 year bond yield: FALLS TO -+.068%/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.44/ 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:: 51.62 and Brent: 57.01
3f Gold UP/Yen UP
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil 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 +.455%/Italian 10 yr bond yield DOWN to 2.099%
3j Greek 10 year bond yield FALLS TO : 5.694???
3k Gold at $1287.90 silver at:16.84 (8:15 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 14/100 in roubles/dollar) 57.77-
3m oil into the 51 dollar handle for WTI and 57 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 GOOD SIZED REVALUATION NORTHBOUND
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.44 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 0.9689 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1448 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 +0.455%
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 2.307% early this morning. Thirty year rate at 2.870% /
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Dollar Ends Best Week Of The Year With A Whimper As Global Stocks Push All Time Highs
The dollar rally paused on Friday and looked poised to finish its best weekly gain of the year with a whimper, when in a repeat of the Thursday session the, Bloomberg dollar index first rose more than 0.1% during Asia hours before slumping around the European open as month and quarter-end flows came into play again.
U.S. stock-index futures were little changed as investors awaited data on personal spending, which however is likely to be distorted by Hurricanes Harvey and Irma, while both European and Asian shares were in the green. European equities drifted higher, headed for the best month this year, while stocks in Asia also followed the S&P 500 higher earlier. Treasuries were steady after a selloff that saw yields jump 18 basis points this week, the most since Donald Trump’s U.S. election victory in November. Emerging-market assets rallied, with stocks rising and most currencies strengthening against the greenback.
After an initial bout of euphoria over Trump’s tax plan – which still needs approval from Congress although it currently lacks detail, leaving investors guessing which parts of the package will be prioritized by the administration – the renewed “Trump trade” paused as profits were taken on some of the recent reflation trades. Though with the chances of higher U.S. interest rates by the end of the year now at about 65%, they have driven equities higher and taken money out of gold, which was on track for its worst month this year, suggesting that the Fed has once again failed to send a tightening message to markets.
“Trump’s fiscal package continues to drive markets,” said Societe Generale analyst Guy Stear. “U.S. bond yields have climbed both as a direct response to tax cut fears and as the market’s wider risk appetite returned.” He said the sharp rise in 10-year Treasury yields, which hit a two-month high of 2.36% on Thursday, was driving the dollar higher.
The euro swung between gains and losses around a pivotal level as supportive month- and quarter-end flows were countered by choppy trading. European data underscored the region’s economic recovery with German unemployment fallling to a record low in September, bolstering the ECB case to tighten and reduce asset purchases in coming months. The EUR traded within 0.2 percent of the psychologically significant $1.1800 level in London trading. Though the euro is headed for its first monthly drop since February, it is still up for a third quarter, a performance not seen in more than three years. As such, the EUR/USD reversed its drop and rose 0.1% to 1.1801. European exporters were helped in the early session by the dip in the Euro, and nudged the pan-European STOXX 600 index up to a two-month high, while Europe’s miners were green across the board in reflex to Chinese action.
This morning in Asia, markets are trading broadly higher. Note the Chinese markets will be closed for a week from next Monday given their Golden week holidays. Asian shares regained some poise after several days of declines, with the MSCI index of Asia-Pacific shares ex Japan bounding 0.4%, but still down 1.7% for the week so far. For the quarter, it looked set to gain 4.7%. Chinese H shares capped their biggest monthly loss this year, despite edging higher Friday ahead of national holidays. The Hang Seng China Enterprises Index closes up 0.3% for monthly loss of 3.4%, the worst since December. The Hang Seng Index rose 0.5%; posts first monthly decline this year, down 1.5%; for 3Q, the gauge climbs 7% and it remains Asia’s best performing major index this year. The MSCI China Index rallied 0.5% oon Friday, posting its ninth monthly gain and +0.3% in September. The ASX 200 (+0.2%) and Nikkei 225 (-0.03%) were both initially subdued as energy weighed on Australia after crude prices fell over 1%, while Japanese sentiment was dampened from the prior day’s currency strength and as participants digested a deluge of mixed data releases. However, markets recovered alongside a jubilant China where Hang Seng (+0.5%) and Shanghai Comp. (+0.3%) were underpinned on retailer optimism ahead of the National Day holiday and as financials benefitted after the banking regulator confirmed it is studying plans to further open up the industry
As a result, Euro zone stocks hit their highest in three months, on track for a quarterly gain after falling back in the second quarter. That helped push world stocks up 0.14% , with MSCI’s all-country world index, which tracks shares in 46 countries, gaining for 11 consecutive months – its longest winning run since 2004.
Meanwhile, GBP saw some added volatility amid the aforementioned month-end flow, alongside comments from BoE’s Carney with the Governor noting that the committee has seen a downtick in productivity due to Brexit uncertainty. GBP/USD slumped as low as -0.5% to 1.3353 first after BOE’s Carney said he is thinking about “taking foot off the accelerator”, it then jumped back above 1.3400 as he reiterated that rates may rise in coming months, in a limited and gradual pace, only to drop once again following weak eco data showing the current account deficit ballooning to GBP 23bln, while GDP for the second quarter was revised down to 1.5 percent from a previous estimate of 1.7 percent as service sector output fell -0.2%. Swedish krona slid as Stefan Ingves appointed to a third term as Riksbank governor.
Over the weekend, investors will be keeping a close eye on the Spanish region of Catalonia, where separatist groups urged supporters to defy efforts to block an independence referendum on Sunday.
“At the moment, there is no significant market impact from the tensions, but if the Catalan police and the Spanish police are standing there in front of the polling stations and discussing whether to block the station or not, this will be an issue,” said DZ Bank strategist Sebastian Fellechner.
In euro zone bond markets, lower-than-expected German inflation data released on Thursday led many to speculate that the corresponding figure for the bloc as a whole, due on Friday, would also disappoint. Germany’s 10-year yield declined two basis points to 0.46 percent. Britain’s 10-year yield declined two basis points to 1.33 percent, the largest drop in almost three weeks. The yield on 10-year Treasuries climbed less than one basis point to 2.31 percent.
In commodities, it’s been a quiet morning in commodities with WTI and Brent crude showing a slight pullback from some of the losses seen late yesterday. WTI looking to make a retest back to USD 52, after rejecting the break above the 1 week high. Precious metals have been led by risk flow, as month end unwinds are evident, with a bid seen through the European morning following the bearish September. Gold consolidates back in summer levels, back within pre- August 25th highs. Gold, under pressure due to the stronger dollar, was set for its biggest monthly fall of the year. The metal was last all but flat at $1,287 an ounce.
- Dow, E-Mini S&P 500 and E- Mini Nasdaq 100 futures little changed
- S&P 500 +0.1% to a fresh record-high at 2,510.06 on Thursday
- VIX Index increases 0.7%, ending 3-day decline… for now
- Gold spot up 0.1% to $1,288.70
- U.S. Dollar Index up 0.02% to 93.11
- WTI crude down 0.1% to $51.53, Brent unchanged at $57.41
- STOXX Europe 600 up 0.02% to 386.42
- MSCI Asia up 0.4% to 161.21
- MSCI Asia ex Japan up 0.6% to 529.56
- Nikkei down 0.03% to 20,356.28
- Topix down 0.08% to 1,674.75
- Hang Seng Index up 0.5% to 27,554.30
- Shanghai Composite up 0.3% to 3,348.94
- Sensex up 0.7% to 31,508.30
- Australia S&P/ASX 200 up 0.2% to 5,681.61
- Kospi up 0.9% to 2,394.47
- German 10Y yield fell 2.5 bps to 0.454%
- Euro up 0.1% to $1.1799
- Brent Futures up 0.4% to $57.61/bbl
- Italian 10Y yield fell 2.9 bps to 1.829%
- Spanish 10Y yield fell 1.6 bps to 1.61%
Bulletin Headline Summary from RanSquawk
- GBP sees some pressure as UK GDP misses
- European Equities marginally higher on the final trading session of the quarter
- Looking ahead, highlights include US PCE, Personal Spending, Chicago PMI and a slew of Central Bank Speakers
Top Overnight News
- U.S. regulators are planning to release American International Group Inc. from the special government oversight ordered for the insurer after its central role in the 2008 financial crisis
- Deutsche Bank had its long-term credit grade cut one level by Fitch Ratings late Thursday, which said the lender will take longer to revive growth under a turnaround plan unveiled in March
- Ken Griffin’s Citadel LLC is returning capital to some of the clients in one of its multi-strategy hedge funds as it seeks to tighten up its investor base
- Iron ore is down 20 percent in September, putting it on course for the first back-to-back quarterly loss since 2015, and there’s rising concern that the final three months of the year may bring further declines
- London house prices posted their first annual decline since the financial crisis
- U.K. 2Q GDP rises 0.3% q/q in line with previous estimate
- Euro-zone September inflation comes in at 1.5%, below consensus of 1.6%. Core CPI also below consensus at 1.1%
- Uber CEO Will Meet With London Regulators Over License Ban
- U.S. equity funds see outflows of $7.6b in week to Sept. 27, largest in
14 weeks, BofAML strategists write in note, citing EPFR Global data
- “If the economy continues on this track it’s been on — and all indications are that it is — then in the relatively near term, you could expect interest rates to increase,” BOE Governor Mark Carney says in an interview on BBC Radio 4
- Chinese Premier Li Keqiang is set to keep his seat on the Politburo Standing Committee at an upcoming meeting of the party congress next month, South China Morning Post reports
- German unemployment slid to record low in September in a sign that Europe’s largest economy will continue to expand on the back of domestic spending while August unadjusted retail sales expanded 2.8% y/y vs est. +3.2%
Asia equity markets were positive on what was a range-bound day heading into quarter-end and after a similar close on Wall St, where the S&P 500 eked another fresh record. ASX 200 (+0.2%) and Nikkei 225 (-0.03%) were both initially subdued as energy weighed on Australia after crude prices fell over 1%, while Japanese sentiment was dampened from the prior day’s currency strength and as participants digested a deluge of mixed data releases. However, markets then recovered alongside a jubilant China where Hang Seng (+0.5%) and Shanghai Comp. (+0.3%) were underpinned on retailer optimism ahead of the National Day holiday and as financials benefitted after the banking regulator confirmed it is studying plans to further open up the industry. 10yr JGBs were modestly higher on mild short covering and with the BoJ present in the market for JPY 710bln of JGBs ranging from the belly to the super-long end. BoJ Summary of Opinions for September 20th-21st meeting stated Japan’s economy is expanding moderately and the best way to achieve the price goal is to patiently maintain current easy policy. There was also an opinion that the BoJ needs to ease policy further to support demand due to expected impact from scheduled sales tax hike.
- Japanese National CPI (Aug) Y/Y 0.7% vs. Exp. 0.6% (Prev. 0.4%); Core CPI Y/Y 0.7% vs. Exp. 0.7% (Prev. 0.5%).
- Japanese Industrial Production (Aug P) M/M 2.1% vs. Exp. 1.8% (Prev. -0.8%); Y/Y 5.4% vs. Exp. 5.2% (Prev. 4.7%)
- Japanese Retail Sales (Aug) M/M -1.7% vs. Exp. -0.5% (Prev. 1.1%); Y/Y 1.7% vs. Exp. 2.5% (Prev. 1.8%)
PBoC refrained from open markets operations today. PBoC set CNY mid-point at 6.6369 (Prev. 6.6285) Chinese Premier Li is said to remain in position for another term, according to Hong Kong press reports.
Top Asia News
- China Uber-Rich Prompt Haitong to Build Hong Kong Private Bank
- BOJ Keeps October Bond Purchase Ranges Unchanged From September
- S&P Estimates China’s Debt Will Expand 77% by 2021
- Cryptocurrency Exchanges Get Nod to Operate in First for Japan
- After Panda Bond, Philippines to Explore Dim Sum in Funding Push
European equities are looking for a strong finish this week with EU bourses modestly higher following the outperformance in material names. In terms of stock specific movers, Volkswagen shares fell amid reports that the company will suffer negative special items of around EUR 2.5bln. Alongside equities, EGBs have been bid this morning which is most likely down to technical factors such as month and quarter end adjustments, as well as some short covering ahead of the weekend. Germany curve showing a flattening bias this morning with outperformance in the long-end.
Top European News
- Euro-Area Inflation Fails to Improve as ECB Prepares for QE Talk
- Deutsche Bank Rating Cut by Fitch as Cryan Turnaround Stalls
- London House Prices Decline for First Time in Eight Years
- U.K. Consumers Display Resilience as Saving Ratio Climbs
- May Pledges Britain Will Defend EU From Russian Aggression
- Germany Sept. SA Unemployment Change -23K M/m; Est. -5K M/m
In currencies, the EUR is slightly firmer this morning, above 1.18 (1.2bln worth of expires at 1.18-1.1815) with cross related buying in EUR/GBP supporting the currency. This comes amid usual month-end demand, consequently taking EUR/GBP back to 0.8800. However, the undertone for EUR remains weak, following Merkel’s wobble in the German Elections, while yesterday’s inflation readings from Germany had also been relatively subdued. The USDJPY nursed some of the prior day’s declines, which was slightly aided by the release of the BoJ’s Summary of Opinions from the September meeting which suggested to patiently maintain current easy policy and that further policy easing may be needed to support demand on the impact from the scheduled sales tax hike. However, price action was contained as participants also digested a slew of mixed Japanese data in which Core CPI printed its firmest YTD of 0.7% but was in-line with estimates and still a distance from the 2% target, while Industrial Production surged and Retail Sales disappointed. Cable saw some volatility amid the aforementioned month-end flow, alongside comments from BoE’s Carney with the Governor noting that the committee has seen a downtick in productivity due to Brexit uncertainty. Carney also reiterated that the majority of members may see a need to raise rates if the economy stays on track. A slew of data this morning further pressured GBP with the current account deficit ballooning to GBP 23bln, while service sector output fell -0.2%
In commodities, a quiet morning in commodities with WTI and Brent crude showing a slight pullback from some of the losses seen late yesterday. WTI looking to make a retest back to USD 52, after rejecting the break above the 1 week high. Precious metals have been led by risk flow, as month end unwinds are evident, with a bid seen through the European morning following the bearish September. Gold consolidates back in summer levels, back within pre- August 25th highs.
Looking at the day ahead, there is PCE core for August, personal income and spending, the Chicago PMI as well as the University of Michigan consumer sentiment index. Onto other events, there is the BOJ’s summary of opinions for its September meeting. In the UK, IMF’s Lagarde and BOE’s Broadbent will speak at the BOE conference (Mr Draghi has cancelled his talk due to a relative’s sickness). Over in the US, the Fed’s Harker will speak at a Fintech event.
US Event Calendar
- 8:30am: Personal Income, est. 0.2%, prior 0.4%; Personal Spending, est. 0.1%, prior 0.3%
- 8:30am: Real Personal Spending, est. -0.1%, prior 0.2%
- 8:30am: PCE Deflator MoM, est. 0.3%, prior 0.1%; PCE Deflator YoY, est. 1.5%, prior 1.4%
- 8:30am: PCE Core MoM, est. 0.2%, prior 0.1%; PCE Core YoY, est. 1.4%, prior 1.4%
- 9:45am: Chicago Purchasing Manager, est. 58.7, prior 58.9
- 10am: U. of Mich. Sentiment, est. 95.3, prior 95.3; Current Conditions, prior 113.9; Expectations, prior 83.4; 1 Yr Inflation, prior 2.7%; 5-10 Yr Inflation, prior 2.6%
- 11am: Fed’s Harker Speaks at Fintech Event on Consumers and Banking
DB’s Jim Reid concludes the overnight wrap
Welcome to the last day of September and the quarter. There’s always a slight randomness to month and quarter end trading as investors adjust portfolios! The penultimate day of the month initially saw the sudden global bond rout continue after the more optimistic take on tax reform continued before a slight miss on German inflation seems to reverse the decline. 10 year Bund and Treasuries yields saw an intra-day peak of 0.516% and 2.357% respectively, before closing +1.1bp and -0.2bp at 0.475% and 2.309% (+0.7bp this morning in Asia). The yield lows this month were 0.302% and 2.04%.
Yesterday, both the German and Spanish CPI readings missed slightly. In Germany, the September CPI was a touch below market expectations at 0% mom (vs. 0.1%), leaving annual growth at 1.8% yoy (vs. 1.9%). Similarly, Spain’s CPI also missed at 0.6% mom (vs. 0.8% expected) and 1.9% yoy (vs. 2.0%). Looking ahead, we have CPI for the Eurozone, France, Italy and Poland today, along with the US August PCE Core, all of which could help dictate how bonds will end for the month. This morning, the August core Japanese national CPI (ex-fresh food) was in line at 0.7% yoy while IP beat expectations at 2.1% mom (vs. 1.8%). The DB house view on 10 years bonds is for YE yields of 2.75% (USTs) and 0.65% (Bunds) but as DB’s Francis Yared suggested yesterday the scale of the move over the last 36 hours has been a surprise as he believes the tax plan is just an opening bid and likely to be pared down. So a long way to go although at least we’ve moved away from pricing no probability of a tax plan passing.
One event that has slipped a bit under the radar is the independence referendum in Catalonia on Sunday. It’s been deemed illegal and therefore it’s all a bit confusing as to what will happen on Sunday, whether it will indeed go ahead and what happens next. Remember 3 years ago a non-binding ballot saw 80% support independence albeit on a 30% turnout.
Continuing on the theme of breaking away, the EU’s Brexit negotiator Barnier noted yesterday that “we are not yet there in terms of achieving sufficient progress” and signalled that it could take weeks or months before the talks can move onto a trade deal, as one of the sticking points remains that UK has not outlined what it thinks the country owes to the EU. Conversely, he did show some optimism, noting the UK PM’s Florence speech “has created a new dynamic in our negotiations, and we have felt this”. The next round of talks will begin from October 9th, two weeks before the EU Summit.
This morning in Asia, markets are trading broadly higher.The Kospi (+0.56%), Hang Seng (+0.21%) and Chinese bourses are up c0.5% as we type, while the Nikkei is down -0.29%. Note the Chinese markets will be closed for a week from next Monday given their Golden week holidays.
Back onto Mr Trump’s tax plans which still lacks many details especially on where it’s funding will come from. Treasury Secretary Mnuchin said the plans will actually “cut” the US deficit by US$1trn, as the plans “will not only pay for itself, but it will pay down debt” by generating additional revenue. Conversely, the Committee for a Responsible Federal Budget said the plans could add US $2trn to the deficit over the next 10 years. Notably, a Bloomberg survey suggests 21 out of 26 economists expect the tax plans to increase the budget deficit. Elsewhere, White House’s economic advisor Gary Cohn said the tax plans was aimed at helping the middle class, but he could not guarantee that everyone in that tax bracket would get a cut.
Staying in the US, the Fed’s Esther George reiterated the US economy is in a “reasonably good shape” and that recent storms will hit 3Q growth, but is likely to be offset as rebuilding efforts gets underway. On rates, she said a gradual monetary tightening “will benefit the long run sustainable growth and financial stability in the US”.
Quickly recapping yesterday’s market performance now. US equities strengthened further, with the S&P up 0.12% to a fresh all-time high, while the Dow rose 0.18% and Nasdaq was flat following larger gains the day before. Within the S&P, most sectors advanced slightly, with only the industrials (-0.09%) and consumer discretionary sector marginally down. Elsewhere, the small caps index (Russell 2000) rose a further 0.27%, likely building on the optimism from Trump’s tax plans. Over in Europe, the Stoxx 600 gained (+0.19%) for the six consecutive day, while the DAX (+0.37%) and FTSE (+0.13%) also increased slightly. Turning to currencies, the US dollar index dipped 0.30%, but Sterling gained 0.41%, partly helped by BoE Chief Economist Andy Haldane’s comment that policy tightening should be considered good news for UK. In commodities, WTI oil fell 1.11% as investors consider whether rising output from US shale assets will offset OPEC’s efforts for production cuts. Elsewhere, precious metals were slightly higher yesterday (Gold +0.35%; Silver +0.67%), while other base metals are also trading (Copper +1.90%; Zinc +1.07%) higher this morning.
Away from the markets and onto Japan. A former ally of PM Abe has just formed a new party on Wednesday with reasonable traction as per the polls. Tokyo’s first female governor Yuriko Koike has formally launched her Party of Hope, seeking a “tolerant, conservative reform party”. According to a survey by Mainichi newspaper, it found 18% of respondents would vote for Hope vs. 29% for Abe’s party. We will watch and see whether PM Abe’s opportunistic choice for a snap election on the 22 October will eventually pay off.
Finally, our European equity strategist Sebastian Raedler has published “European equity strategy – Market overview” and in it expects European equities to end the year close to current levels, with his models pointing to temporary upside to around 400 for the Stoxx 600 (around 4% above current levels). Yet, with Euro area PMIs at 56.3, consistent with 3%+ Euro area GDP growth, significantly above our economists’ growth forecast of 2.0% for 2018, he sees scope for PMI momentum (the six-month change in PMIs and a key driver of equity market momentum) to turn meaningfully negative in Q1 next year, leading to renewed downside for the market.
Before we take a look at today’s calendar, we wrap up the other data releases from yesterday. In the US, the final reading of 2Q GDP was slightly higher at 3.1% qoq (vs. 3.0% expected), mainly due to a positive revision in inventories. The 2Q core PCE (0.9% qoq) and personal consumption (3.3%) were both unchanged. More up to date economic readings showed the August wholesale inventories was ahead of expectations at 1% (vs. 0.4% expected) and the advance goods trade balance deficit was not as wide as anticipated (-$62.9bn vs. -$65.1bn). Elsewhere, the Kansas City Fed manufacturing activity index was above expectations at 17 (vs. 15 expected) – the second highest reading over the past six years. Finally, the continuing claims (1,934k vs. 1,993k expected) and initial jobless claims (272k vs. 270k expected) were broadly in line.
For the Eurozone, numerous September confidence indicators beat expectations. The economic sentiment index rose 1pt to a fresh 10-year high (113 vs. 112 expected), while both the business climate (1.34 vs. 1.12 expected) and industrial confidence (6.6 vs. 5.2 expected) also beat. The consumer confidence was in line at -1.2. Elsewhere, Germany’s GfK consumer confidence was slightly lower than expected at 10.8 (vs. 11) while Spain’s retail sales rose 1.6% yoy in August (vs. 1.2% yoy previous).
Looking at the day ahead, we have the Eurozone CPI (1.2% yoy expected for core) along with CPI & PPI for France and Italy. In Germany, there is unemployment change for September. In the UK, there is the final reading of 2Q GDP along with mortgage approvals and money supply M4 stats. Over in the US, there is PCE core for August, personal income and spending, the Chicago PMI as well as the University of Michigan consumer sentiment index. Onto other events, there is the BOJ’s summary of opinions for its September meeting. In the UK, IMF’s Lagarde and BOE’s Broadbent will speak at the BOE conference (Mr Draghi has cancelled his talk due to a relative’s sickness). Over in the US, the Fed’s Harker will speak at a Fintech event.
3. ASIAN AFFAIRS
i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 9.30 POINTS OR 0.28% / /Hang Sang CLOSED UP 132.70 POINTS OR 0.48%/ The Nikkei closed DOWN 6.83 POINTS OR 0.03%/Australia’s all ordinaires CLOSED UP 0.23%/Chinese yuan (ONSHORE) closed WELL UP at 6.6535/Oil DOWN to 51.62 dollars per barrel for WTI and 57.01 for Brent. Stocks in Europe OPENED GREEN/EXCEPT SPAIN. Offshore yuan trades 6.6467 yuan to the dollar vs 6.6535 for onshore yuan. NOW THE OFFSHORE MOVED A LITTLE STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR) AND THE OFFSHORE YUAN IS STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS VERY HAPPY TODAY
3a)THAILAND/SOUTH KOREA/NORTH KOREA
b) REPORT ON JAPAN
Catalonia Bonds Collapse As Police Warn Of Chaos If Referendum Canceled
While the Catalan people prepare to decide whether to break with Spain, the bond market appears to have already made its mind up as Catalonia bonds decouple from Spanish sovereign yields.
Catalonia Bonds expiring next year have seen yields spike over 2% – the highest in over a year – and more than 230bps higher than the equivalent Spanish sovereign bond yields...
As The FT reports, in a special report released earlier this week, Rabobank’s Maartje Wijffelaars warned that “the relationship between Madrid and Barcelona has exponentially worsened in the past months, and it’s unclear how to put the genie back in the bottle”.
And judging by the Catalan police concerns, this will get a lot worse before it gets any better…
As France24 reports, Catalan police warned Wednesday that public disorder may erupt as Spain orders the authorities to seal polling stations and stop the region holding a referendum on independence.
Late on Tuesday, Catalonia’s chief prosecutor ordered the force to seal off buildings that will house polling stations before Sunday’s referendum which Madrid has declared illegal.
But such a step “could lead to undesirable consequences,” the Mossos d’Esquadra warned in a posting on Twitter on Wednesday.
“These consequences refer to public security and to the more than foreseeable risk of a disruption of public order that this may generate.”
The prosecutor also ordered police to deploy officers on the day of the ballot to prevent people from voting.
The order puts intense pressure on the regional police who are caught between their loyalty to local Catalan leaders who are pushing ahead with the referendum and their pledge to uphold the law.
Ignacio Gonzalez, a spokesman for Judges for Democracy, said it was “feasible” for police to seal polling stations.
“The problem is the unrest that this could cause,” he told AFP.
Deputy Prime Minister Soraya Saenz de Santamaria accused Catalan separatists of seeking to end “the years of democratic stability for which our parents fought”.
“We are perhaps living in an unprecedented historical moment because of the determination of certain separatists to deny centuries of shared history between Spaniards,” she told parliament.
Madrid’s opposition to the Catalan independence referendum drew a sharp rebuke from the Basque separatist group ETA, which released a statement accusing the state of being “a prison for the people”.
As The FT concludes, few observers are expecting Catalonia to actually become independent even if, as expected, the “yes” side wins on Sunday, with a more likely outcome seen to be an increase in autonomy for the region.
Still, Ms Wijffelaars suggested “the negotiation period is set to take a long time and with the ultimate risk of unilaterally declared independence, uncertainty will linger in markets”.
Analysts at Citi agreed that uncertainty is unlikely to go away, noting that “the risk of even larger confrontations between the two sides post-referendum is rising”:
In the long-run …solving the Catalan challenge may require more fiscal autonomy for the region and possibly allowing a formal self-determination referendum. With both overwhelmingly opposed by the rest of the country, we fear a solution remains years away.
Spain Says “Referendum Won’t Happen”, To Shut Barcelona Airspace After Catalan Separatists Unveil Ballot Boxes
The Spanish government reiterated its angry rhetoric this morning that the “Catalan referendum won’t happen” with Íñigo Méndez de Vigo saying “organizers will be held responsible,” after they unveiled the ballot boxes and discussed the 2,315 polling stations to be used.
Madrid, which claims the authority of a constitution that declares the country to be indivisible, remained implacably opposed to the vote. As Reuters reports,
“I insist that there will be no referendum on Oct. 1,” central government spokesman Mendez de Vigo told a news conference following the weekly cabinet meeting, reiterating that the vote was illegal.
It appears the Catalans are ignoring him…
In a sign that large crowds are again expected on the streets on Sunday, department store chain El Corte Ingles said it would shut three stores in central Barcelona. The central government said airspace above the city would be partly restricted.
Lines of tractors draped in the red-and-yellow striped Catalan flag left provincial towns on Friday, planning to converge on Barcelona in a sign of support for the referendum.
Catalonia’s vice president says more than six out of ten voters are expected to cast ballots during the region’s independence referendum despite the Spanish government’s aggressive efforts to stop the vote. As AP reports,
Oriol Junqueras said Friday that Catalan citizens will be able to vote on Sunday “even if somebody takes voting stations by assault and tries to avoid something as natural as placing a voting slip in a ballot.”
Spain’s Constitution says that only the nation’s government can call a referendum on sovereignty. Police forces acting on judges’ orders have seized ballots and arrested regional officials in an unprecedented crackdown.
Junqueras says an internal poll showed that more than 60 percent of the 5.3 million eligible voters plan to cast ballots.
As TheSpainReport reports, after weeks of speculation, Catalan regional government ministers unveiled the ballot boxes they mean to use for the suspended referendum vote this Sunday.
The ballot boxes are made of grey and black opaque plastic.
During a press conference before the unveiling of the ballot boxes, Deputy First Minister Oriol Junqueras said there would be 2,315 polling stations on Sunday, with 6,239 voting tables, and that there were 7,235 people involved in organising the referendum.
“Neither the Catalan government nor Catalan citizens are doing anything wrong”, he said.
Fascinatingly, Bloomberg reports that Spain’s aviation authority will restrict airspace over Barcelona during the weekendof illegal referendum on Catalan independence.
Step is in line with policy during events that attract large crowds such as major soccer matches or demonstrations, spokesman for Public Works Ministry says by phone.
Of course, enforcing the government’s wishes falls to the local police, and as The Wall Street Journal notes, they continue to see their loyalties tested…
Since it was established in the 1980s, Mossos has been one of the most visible symbols of Catalonia’s autonomy, answering directly to the Catalan Interior Ministry rather than to Madrid. Among the other 16 Spanish autonomous regions, the Basque Country is the only other to have a fully independent police force.
Some Mossos officials and other people familiar with the matter say Mossos won’t stop people from voting Sunday as long as there’s a sizable number of voters inside polling stations, which those officials believe would give officers public-order grounds not to intervene.
“Some of the measures asked by prosecutors can’t be followed without creating a bigger conflict than the one they say they want to prevent,” Joaquim Forn, Catalonia’s regional interior minister, said in an interview.
Catalan leader Puigdemont called on the police not to act in a “political” way when carrying out their duties on Sunday.
“I would like them to use the same standards that the Catalan regional police use. Not political standards, not on political orders, but policing and professional standards,” he said.
The Wall Street Journal explains how they believe the Catalan Independence vote is likely to play out…
What can be expected from the referendum?
The government of Catalonia, a wealthy region in northeastern Spain with a distinct history and language, is forging ahead with an independence referendum, even though Spain’s constitutional court has suspended the vote and the central government has declared it illegal. Spanish officials, prosecutors and judges have launched an all-out effort to block it by sending thousands of police to the region to confiscate ballots and ballot boxes, shutting down pro-referendum websites and arresting Catalan officials. Even though police have orders to stop the vote, the Catalan government has said it will still go ahead.
Will police try to stop the vote from taking place?
Madrid has sent about 4,000 national police officers to the region, with orders to seal polling stations. But that may not be enough to stop the ballot in many sites, especially if the Catalan police corps claim public-order grounds to avoid intervening when a sizable number of voters are present. Pro-independence supporters plan to occupy polling stations starting Friday, but police might still succeed in sealing off a few of them. This could force some attendees to hold a makeshift vote instead.
What is the result likely to be?
The latest official poll showed the independence camp has lost some support over the past three years: 35% of Catalans want independence, compared with 49% in 2013. But a survey earlier this month by Catalan pro-independence newspaper ARA found that almost 70% of those who are planning to vote are in favor of secession. However, because Madrid and pro-union parties have declared the referendum illegal, those supporting Catalonia remaining part of Spain are likely to boycott the vote, suggesting a result in favor of secession is more likely.
If the vote is in favor of independence, then what?
That is unclear. Catalonia’s regional president, Carles Puigdemont, has promised to declare independence. But a unilateral move is unlikely to have international recognition, and members of Mr. Puigdemont’s own party have denied a declaration of independence will happen. Such an attempt would likely drive Madrid to seize control of the regional government, although some still hope Barcelona—the Catalan capital—and Madrid could sit down to negotiate a resolution to the region’s grievances. Regardless, pro-independence activists are planning large demonstrations and possibly a general strike aimed at pressuring Madrid to offer a negotiated path toward separation or compelling the European Union to mediate.
Will the economy and financial markets be disrupted?
So far, investors have shown only moderate concern, with Catalan bank stocks struggling a bit. Spain’s borrowing costs have widened slightly relative to Germany’s, with investment banks like J.P. Morgan Chase & Co. recommending investors sell some Spanish bonds. Economic data are strong for both Spain and Catalonia, but a prolonged general strike in the region could hamper the recovery. Were Catalonia to separate, ratings companies warn that Spain could have trouble to repay its debts, since Catalonia makes up 19% of Spanish gross domestic product, but Catalans could face significant financial disruption during their transition toward independence.
For now, as Citi notes, while Catalan bonds have weakened,the referendum has not been a focus of markets; but it appears the Spanish authorities are getting anxious.
As Bloomberg reports, lenders who may be holding their breath over Spain’s secessionist upheaval can sleep calmly.
The central government will guarantee payment to all creditors of the Catalan regional administration, according to a Budget Ministry official.
Regardless of Catalan separatists’ attempts to hold an illegal referendum for independence on Sunday and possibly declare independence from Spain, the ministry will make sure banks, suppliers and civil servants keep getting paid on time, the official said.
Finally, and entirely unexpectedly, Brussels has very much come down on the side of Madrid with AP reporting that European Union officials have ruled out helping to mediate the clash between Spain’s government and Catalan officials over Catalonia’s upcoming independence referendum.
European Parliament President Antonio Tajani said at an EU summit in Estonia on Friday that the dispute is “a Spanish problem in which we can do little. It’s a problem of respecting Spanish laws that Spaniards have to resolve.”
Catalan officials, including the mayor of Barcelona, have asked the EU to mediate the tense standoff ahead of Sunday’s planned vote that Spanish authorities say is illegal.
Tajani says the EU is maintaining its support of Spain’s government because “on a legal level, Madrid is right.”
He says: “I think it’s important to talk on a political level after Monday.”
Of note is the fact that The EU has said Catalonia will be ejected from the bloc, if it declares independence.
Now Madrid is ordering Google to delete the app used for the Catalan Independence. So much for democracy…
Spanish Government Orders Google To Delete App Used For Catalan Independence Vote
Catalonia’s High Court on Friday ordered Google to delete an application that it said Catalan separatists were using to spread information about a disputed independence vote this Sunday, Reuters reported. The court also ordered Google to block any future applications developed by the gmail address “Onvotar1oct@gmail.com”, according to a written ruling.
The app, which was available on Google Play until just before 7 p.m. on Friday, helps people to find their polling station via their address and shows the closest polling stations on Google Maps via GPS, the name of the town or keywords. It also allows users to share links to polling station locations, according to The Spain Report.
Google told The Spain Report that: “we remove content from our platforms when we receive a court order or when it violates our terms and conditions”. The app no longer appears to be available from Spain.
The court order told Google Inc—at 1600 Amphitheatre Parkway Mountain View CA 94043 (USA)—to take down the app located at that URL and also to block or eliminate any future apps submitted by the user with e-mail address “email@example.com” or identifying as “Catalonia Voting Software”. The judge said in her ruling that the tweet with the app link is “only a continuation of the actions of the [Catalan government] to block” Constitutional Court and High Court orders “repeatedly”.
The High Court in Catalonia issued an order on September 23 allowing police to take down any referendum websites linked to by members of the Catalan government on their social media accounts. Friday’s new court order was issued because this is a referendum mobile app, for download, not a link to a referendum website or domain directly.
The “reluctant attitude” of the Catalan government to obey the previous orders about referendum websites is “clear, once again”, says the judge. “…they mean to dodge said blockades with computer applications for mobile devices, which, like the web pages, only promote and facilitate the holding of the referendum on October 1.”
The Civil Guard notified had notified the judge earlier today that a link had appeared on the Twitter profile of Carles Puigdemont, the Catalan First Minister, at 8:30 p.m. on September 27, “announcing the availability of a mobile app with information about the referendum in Catalonia, along with a link to download it”. The judge has ordered the Civil Guard to take the actions needed to enforce the order. Some 140 referendum websites and mirrors have now been taken down on court orders since the beginning of September.
As reported earlier, Madrid, which claims the authority of a constitution that declares the country to be indivisible, remained implacably opposed to Sunday’s vote. “I insist that there will be no referendum on Oct. 1,” central government spokesman Mendez de Vigo told a news conference following the weekly cabinet meeting, reiterating that the vote was illegal.
However, as also noted previously, it appears that the local population has no intetion of complying with the crackdown. In a sign that large crowds are again expected on the streets on Sunday, department store chain El Corte Ingles said it would shut three stores in central Barcelona. The central government said airspace above the city would be partly restricted, according to Reuters.
Meanwhile, lines of tractors draped in the red-and-yellow striped Catalan flag left provincial towns on Friday, planning to converge on Barcelona in a sign of support for the referendum.
5. RUSSIA AND MIDDLE EASTERN AFFAIRS
6 .GLOBAL ISSUES
7. OIL ISSUES
The number of rigs increased by six this week as production still is soaring
(courtesy zero hedge)
US Oil Rig Count Rises Most In 3 Months
With US crude production having rebounded back to near cycle highs in its lagged response to the oil rig count, this week’s rebound in the oil rig count (+6 to 750) is notably the largest addition in almost 3 months.
As Bloomberg details, explorers renewed their search for U.S. crude as oil entered a bull market and overseas demand for American supplies flourished.
Working rigs targeting crude increased by six this week, bringing the total to 750, according to Baker Hughes data reported Friday. Drillers resumed adding rigs for the first time in more than a month, a period that included Hurricane Harvey’s sweep across the Eagle Ford Shale region and coastal shipping terminals. Meanwhile, exports of domestic crude jumped 61 percent last week to an all-time high.
The rig count is seen as an indicator of near-term production growth.
Production may have a little further to go…
WTI has been volatile this week but remainshigher on the week… having dropped below $52 yesterday
8. EMERGING MARKET
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings FRIDAY morning 7:00 am
Euro/USA 1.1814 UP .0033/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 GREEN EXCEPT SPAIN
USA/JAPAN YEN 112.44 DOWN 0.028(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 1.3386 DOWN .0043 (Brexit March 29/ 2017/ARTICLE 50 SIGNED
THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS
USA/CAN 1.2419 DOWN .0019 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS FRIDAY morning in Europe, the Euro ROSE by 33 basis points, trading now ABOVE the important 1.08 level RISING to 1.1814; / Last night the Shanghai composite CLOSED UP 9.30 POINTS OR 0.28% / Hang Sang CLOSED UP 132.70 POINTS OR 0.48% /AUSTRALIA CLOSED UP 0.23% / EUROPEAN BOURSES OPENED ALL GREEN EXCEPT SPAIN.
The NIKKEI: this FRIDAY morning CLOSED DOWN 6.83 POINTS OR 0.03%
Trading from Europe and Asia:
1. Europe stocks OPENED MOSTLY IN THE GREEN
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 132.70 POINTS OR 0.48% / SHANGHAI CLOSED UP 9.30 POINTS OR 0.28% /Australia BOURSE CLOSED UP 0.23% /Nikkei (Japan)CLOSED DOWN 6.83 POINTS OR 0.03% / INDIA’S SENSEX IN THE GREEN
Gold very early morning trading: 1289.15
Early FRIDAY morning USA 10 year bond yield: 2.307% !!! UP 0 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)
The 30 yr bond yield 2.870, UP 0 IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)
USA dollar index early FRIDAY morning: 93.05 DOWN 3 CENT(S) from THURSDAY’s close.
This ends early morning numbers FRIDAY MORNING
And now your closing FRIDAY NUMBERS
Portuguese 10 year bond yield: 2.388% DOWN 3 in basis point(s) yield from THURSDAY
JAPANESE BOND YIELD: +.068% DOWN 1/ 2 in basis point yield from THURSDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.604% down 2 IN basis point yield from THURSDAY
ITALIAN 10 YR BOND YIELD: 2.111 DOWN 1 POINTS in basis point yield from THURSDAY
the Italian 10 yr bond yield is trading 51 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.464% DOWN 2 IN BASIS POINTS ON THE DAY
IMPORTANT CURRENCY CLOSES FOR FRIDAY
Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1803 UP .0356 (Euro UP 21 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 112.66 DOWN 0.185(Yen DOWN 19 basis points/
Great Britain/USA 1.3389 DOWN 0.0038( POUND DOWN 38 BASIS POINTS)
USA/Canada 1.2509 UP .0073(Canadian dollar DOWN 73 basis points AS OIL FELL TO $51.47
This afternoon, the Euro was ROSE 21 basis points to trade at 1.1803
The Yen FELL to 112.66 for a LOSS of 19 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 38 basis points, trading at 1.3389/
The Canadian dollar FELL by 73 basis points to 1.2509, WITH WTI OIL FALLING TO : $51.47
Your closing 10 yr USA bond yield UP 0 IN basis points from THURSDAY at 2.317% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.860 DOWN 1 in basis points on the day /
Your closing USA dollar index, 93.15 UP 7 CENT(S) ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 1:00 PM EST
London: CLOSED UP 49.94 POINTS OR 0.68%
German Dax :CLOSED UP 124.21 POINTS OR 0.98%
Paris Cac CLOSED UP 36.04 POINTS OR 0.68%
Spain IBEX CLOSED UP 53.00 POINTS OR 0.51%
Italian MIB: CLOSED UP 108.65 POINTS OR 0.48%
The Dow closed UP 40.19 OR 0.18%
NASDAQ WAS closed UP 00.19 POINTS OR 0.00% 4.00 PM EST
WTI Oil price; 51.47 1:00 pm;
Brent Oil: 56.68 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 57.56 DOWN 36/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 36 BASIS PTS)
TODAY THE GERMAN YIELD FALLS TO +0.464% FOR THE 10 YR BOND 4.PM EST EST
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:$51.58
USA 10 YR BOND YIELD: 2.335% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.863%
EURO/USA DOLLAR CROSS: 1.1818 UP .0038
USA/JAPANESE YEN:112.53 up 0.055
USA DOLLAR INDEX: 93.07 DOWN 1 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.3403 : down 26 POINTS FROM LAST NIGHT
Canadian dollar: 1.2476 UP 39 BASIS pts
German 10 yr bond yield at 5 pm: +0.464%
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Dollar & Stocks Jump; Bonds & Bullion Dump In Lowest Volatility September Ever
It has now been 318 trading days since the S&P 500 suffered a 5% drawdown – the 4th-longest streak since 1928… So everything is awesome…
BUT…US ‘hard’ economic data has not been this weak (and seen the biggest drop) since Feb 2009…
* * *
Q3 Was a Roller-Coaster…
Q3 was the 8th straight quarterly gain in a row for The Dow – the longest streak since Q3 1997.
The Long bond was unch, gold up 3.2%,. but stocks outperformed in Q3…
Nasdaq just outperformed Small Caps on the quarter as stocks reversed their down-trend seemingly around Yellen’s J-Hole speech…
Treasury Yields are mixed for Q3 with 2Y notably higher but the rest of the curve barely budged…reversing early gains on Draghi’s hawkish comments…
Interestingly the yield curve – 5s30s – ended unchanged on the quarter (after 5 quarterly declines in a row)…
The Dollar declined for the 3rd quarter in a row as Gold managed to eke out some gains as oil soared…
* * *
On the month…
- 3 Giant Storms – Harvey, Irma, and Maria crush Texas, Florida, and Puerto Rico
- Trump threatens “fire and fury”
- Kim tests H-Bomb
- NoKo fires missiles over Japan
- NoKo says Trump ‘Declared war’
- Healthcare bill fails again
- 6th monthly decline in a row for US ‘hard’ economic data
September is now in the books and it’s official – it was the least volatile September for stocks in history…
Some high- and low-lights for September include:
- Small Caps best month since Nov 2016
- Financials jump most in 3 months to record high
- 2Y Yield’s biggest spike since Nov (to its highest since Nov 2008)
- Yield Curve (5s30s) flattened most since June (to flattest since Nov 2007)
- USD Index had best month since Dec 2016 (ending 6 month losing streak)
- Gold’s worst month since Nov 2016
- Industrial Metals worst month since Dec 2016
- Oil’s best month since Apr 2016
Bonds & Bullion were the month’s laggard as stocks and the dollar surged…
Trannies & Small Caps ripped…
As Energy, Retailers, and Financials were best (year’s laggards)…
AAPL was a notable laggard in September as FANGs managed small gains…
Equity market gains were also driven by hopes about taxes…
September was an ugly month for Treasuries…(worst month since Nov 2016 for bonds)
The Dollar Index reversed its medium-term downtrend in early September after Draghi’s comments…
It appeared to also coincide with the lagged upturn in President Trump’s approval rating…
Notably EURUSD suffered its first monthly loss since Februarybreaking the longest run of monthly gains versus the dollar since January 2013… as 1.20 seemed like the line in the sand for Draghi…
Oil had a big month as PMs and Copper dropped…
* * *
Finally we focus down on this week…
The Dow was the laggard on the week, barely scratching out a gain as Small Caps surged – Russell 2000’s best week since Dec 2016
Dow was rammed above 22,400 into the close…
But while Small Caps have ripped, high-tax names appear unimpressed by Trump’s plan…
FANG Stocks manage to recoup all of Monday’s losses…
Banks continue to decouple from the yield curve…
Notably XIV – the inverse VIX ETF – hit a new record high today…
As VIX closed at a weekly closing record low, monthly closing record low, and quarterly closing record low…
Treasury yields all rose together this week by 6-8bps…
The Dollar Index rose 1% on the week – its biggest weekly gains since Dec 2016, led by Aussie and Euro weakness…(NOTE last two days have seen some give back)
Bitcoin +15% on the week, -12% in September (worst month since Aug 2016), +66% in Q3 (4th quarterly gain in a row)
And then there’s real bubble… Swiss National Bank -2% on the week (worst week since May), +26% in September (6th monthly rise in a row), +98% in Q3 (most since 1997)
Crude rallied on the week as PMs slipped lower…
And finally, a quick reminder – stocks have never… ever… been more expensive than this…
TRADING THIS MORNING IN NY
Janet is confused again: her key core PCE inflation indicator slumped to 1.29% year over year, the lowest level since Oct 2015. Regular PCE: 1.4%. below expectations of 1.5%..this caused the dollar to drop.
Dollar Drops As Fed’s Key Inflation Indicator Slumps To 2-Year Lows
The dollar is extending its losses after Core PCE – among the Fed’s most critical inflation indicators – slumped to just 1.29% YoY, the lowest since Oct 2015.
Headline PCE disappointed (+1.4% vs +1.5% exp) and was unchanged from July’s print but Core PCE was considerably worse.
Despite Yellen’s constant talk of ‘transitory’ shifts, this is the 6th monthly decline in this key measure and is the biggest miss against expectations in 2 years.
And the reaction is evident in FX markets as rate-hike odds fade modestly…
Not good: real personal spending drops the most in almost 2 years. This is a very important number as it is the largest component of the GDP
(courtesy zero hedge)
Real Personal Spending Drops Most Since Jan 2016
Growth in income and spending has been trending slower for the last six months and August showed continued weakness in spending (slowest annual growth since Aug 2016) but a slight uptick in incomes.
The savings rate was unchanged at 3.6% – the lowest since December…
But perhaps most noteworthy is the 0.1% MoM drop in real personal spending, the weakest since Jan 2016.
This is not the 3.1% GDP exuberance you were looking for!
Of course all of this comes with a big fat saveat from the government data-mashers:
The August estimates of personal income and outlays reflect the effects of Hurricane Harvey that made landfall in southeastern Texas on August 25th. BEA cannot separately quantify the total impact of the storm on personal income and outlays because most of the source data used to estimate the components of personal income and outlays do not separately identify storm impacts.
Soft data home buying “hope’ crashes to a 5 yr low which in turn drags the consumer confidence index lower
Home-Buying Hope Crashes To 5-Year Low, Drags Consumer Confidence Lower
Americans’ confidence in the economy has waned slightly following Hurricanes Harvey and Irma, which caused more than $100 billion in damage, pushed up gas prices and spurred a jump in unemployment filings.
Overall, Bloomberg reports that the share of consumers expecting good times financially in the economy fell to 47 percent from 54 percent in August.
Share of consumers judging home-buying conditions as favorable was at five-year low…
Richard Curtin, director of the University of Michigan consumer survey, said in a statement.
“In the past year, there has been a long list of issues that could have derailed the overall level of consumer confidence, including the unprecedented partisan divide, North Korea, Charlottesville, and the hurricanes,”
“Confidence has nonetheless remained very favorable, moving sideward in a very narrow positive range.”
Chicago PMI, which is a soft data entry point explodes higher by 5 standard deviations.
Chicago PMI Explodes Higher, Beats By 5 Standard Deviations
Everything is awesome again in Chicago apparently…
Against expectations of a modest drop from 58.9 to 58.7, MNI’s Chicago Business Barometer exploded higher to 65.2 in September…
This is well above the highest analyst expectation and 5 standard deviations above expectations…
Under the hood, it’s also awesome…
- Prices paid rose at a faster pace, signaling expansion
- New orders rose at a faster pace, signaling expansion
- Employment rose and the direction reversed, signaling expansion
- Inventories rose and the direction reversed, signaling expansion
- Supplier deliveries rose at a faster pace, signaling expansion
- Production rose at a faster pace, signaling expansion
- Order backlogs rose at a faster pace, signaling expansion
- Business activity has been positive for 12 months over the past year.
- Number of components rising vs last month: 7
Puerto Rico continues to struggle as ATM machines run out of physical cash
(courtesy zero hedge)
“What Are We Going To Do?” Puerto Rico In Chaos As Cash Runs Out
Most Puerto Ricans haven’t had access to electricity, cell service or financial services for nearly two weeks now. And as we reported yesterday, residents who didn’t stockpile enough cash have been struggling after Hurricane Maria essentially knocked the island’s economy into the 1950s, forcing some to forgo essential supplies – or worse – resort to looting. For those who do have access to working ATMs and banks, long lines have sapped cash reserves as the country has effectively reverted to a “cash only” economy.
Those whose access to cash has been limited – or cut off entirely – are becoming desperate as they start to wonder how they will begin the process of rebuilding their trashed homes – or even where their next meal will come from. As Reuters reports, cash has become just one of many scarce resources on the island (food, medical supplies and gas are also in incredibly short supply).
With electricity and internet down in Yauco, southwestern Puerto Rico, Nancy and Caesar Nieve said they could not access paychecks directly deposited into their bank accounts.
“What are we going to do when we don’t have any cash? The little cash we have, we have to save for gas,” said Nancy.
Cash demand spiked in the first few days after the hurricane as merchants were unable to accept other modes of payment. First BanCorp, one of the island’s largest banks, said that nearly two-thirds of its 48 branches remained closed, and that electronic transactions had resumed at only 25% of its ATMs.
Apparently, word of these privations made its way back to the New York Fed, which has assured the world via the Wall Street Journal that the central bank has plenty of physical cash to keep banks on the island stocked for the forseeable future – lowering the likelihood that anybody will suffer for lack of access to cash. Notably, the WSJ didn’t explain where that money was being held, how long supplies are expected to last or how it got there in the first place. Indeed, the central bank said only that it’s “prepared to meet elevated currency demand following the natural disaster.” Reuters noted that the central bank ships cash to a depot on the island, and that before the storm it increased the size of its shipments.
As WSJ explains, Puerto Rico is in the New York Fed’s district despite its location in the Caribbean. In times of economic stress or a natural disaster, Fed regional banks plan ahead to make sure area banks have enough cash.
Of course, none of this matters if you can’t get to a bank or an ATM. But at least, if they somehow manage to find an open bank branch or working ATM, Puerto Ricans can rest assured that it will be freshly stocked with cash.
But Puerto Ricans might want to hold off before thanking Bill Dudley for his foresight. It’s worth asking exactly how long the island’s cash inventories will last. After all, the storm tore up roads and leveled buildings, potentially complicating deliveries of cash. And with authorities still focusing on search-and-rescue missions and other aspects of the preliminary response, it could take for some areas of the island to return to some semblance of normalcy.
Furthermore, looting has become increasingly common across the island, increasing the danger that deliveries of cash could be intercepted by bands of robbers.
In a statement, the New York Fed said armored-car services are able to reach banks with cash, and automated teller machines are “once again active.”
With any luck, the recovery effort will soon kick into high gear after President Donald Trump on Thursday suspended the Jones Act, which will allow more ships to assist in the international relief effort. It’s unclear why the administration hesitated to waive the law.
But is the Fed really doing all it can to alleviate the crisis in Puerto Rico? With the bankrupt island nation facing a $30 billion cleanup effort – and potentially more if it’s entire power grid needs to be upgraded – maybe the central bank could help monetize some of these expenditures.
Now large cities which have a huge Puerto Rican population is asking for help as many expect a huge influx of hurricane ravaged citizens as they shelter with friends in the USA while their cities are rebuilt.
US Cities Demand Federal Help As They Brace For Influx Of 100,000s Of Puerto Ricans
As the disaster-relief effort enters its second week, air traffic is slowly resuming, which means hundreds of thousands of Puerto Ricans will likely flee the devastated island to stay with friends and relatives in the continental US as they wait for FEMA to rebuild roads, repair power grids and and revive the island’s communications infrastructure – a process that could take months, if not longer.
While the urgency of the situation leaves many of Puerto Rico’s 3.4 million population little choice, the Financial Times is reporting that the scramble to flee could worsen the population decline as some of those leaving may opt to permanently resettle. Meanwhile, cities with large Puerto Rican populations are asking for federal assistance as they prepare to absorb as many as 100,000 people fleeing the hurricane.
Mainland US cities with large Puerto Rican populations are warning that they will need federal help to cope with an anticipated influx of island residents fleeing the devastation visited on the US commonwealth by Hurricane Maria.
“If it’s as large-scale as we anticipated, it’s got to be a federal and state-co-ordinated response,” said Buddy Dyer, Orlando’s mayor. “It can’t be city by city.”
Some have said they expect to host the disaster victims for up to six months.
“We are expecting a large influx of evacuees to the state,” said Teresa Jacobs, mayor of Orange County in Florida, which includes Orlando. “We will have a major evacuation population for an extended period of time — three months, six months.”
Some city officials claimed that they’re working with state and federal officials to formulate a coordinated response.
Officials from the Orlando area said on Wednesday that co-ordination with the federal government was in the early stages.
“We are reaching out to federal authorities,” said Ms Jacobs. “We are planning to have a forum next Tuesday with federal authorities as well as state authorities just to get the conversation started about the co-ordination and the logistics of this effort.”
As the FT noted, the severity of the crisis was underscored on Thursday when President Donald Trump waived the Jones Act, allowing more ships to make their way to Puerto Rico. In a series of tweets, Trump lauded the disaster response, saying that navy vessels have delivered millions of dollars of supplies to the island.
Congress, meanwhile, has pledged to deposit another $7 billion in Puerto Rico’s emergency relief account by the end of next week.
However, as WSJ reported, thousands of shipping containers holding potentially life-saving supplies have been marooned at ports in San Juan as FEMA scrambles to rebuild roads and set up a makeshift distribution system to deliver supplies to needy disaster victims across the island.
Crowley Maritime Corp., based in Jacksonville, Fla., but a major operator of cargo ships to Puerto Rico, had 4,100 containers with both relief supplies and commercial cargo waiting at San Juan’s port on Thursday. Another carrier, TOTE Maritime, said earlier this week it had more than 3,000 shipping containers stacked up at the port awaiting transport.
While Democrats have criticized the disaster response, Puerto Rico Gov. Ricardo Rossello said Friday that the Trump administration has been very attentive in its response to the situation in Puerto Rico, as the Washington Examiner reported.
“I have to say that the administration has responded to our petitions. FEMA, Brock Long, has been on the phone virtually all the time with me, checking out how things are going,” said Rossello, leader of the New Progressive Party.
Puerto Rico is US territory, which grants its residents citizenship but not the right to vote in US elections. Over the past decade, many have left the island as its economy has deteriorated, resulting in Congress appointing a federal oversight board to oversee to manage the island’s finances while it negotiates an accord with its creditors.
Meanwhile, the mayor of Puerto Rican capital San Juan issued an angry response to acting DHS Secretary Elaine Duke, who, in defending the Trump administration’s response to the disaster, described the situation in Puerto Rico as a “good news story in terms of our ability to reach people.”
“Well, maybe from where she’s standing it’s a good news story. When you’re drinking from a creek, it’s not a good news story.”
“Where is the good news here?”
As much as 40% of Puerto Rico doesn’t have access to potable water.
Meanwhile, in the rush to get off the island, crowds jammed the cruise ship dock in San Juan desperately hoping to board a Royal Caribbean cruise ship the Adventure of the Seas, which was sent to help evacuate people struggling to find a way off Puerto Rico following the destruction of Hurricane Maria.
According to the New York Post, more than 2,000 people sweltered in the hot sun, forming a line stretching down the shore and a pier.
Expect the exodus to the mainland to intensify as shell-shocked Puerto Ricans scramble to get off the island by any means necessary.
The orange growers in Florida are in a dire situation. First, over 50% of the plants have been destroyed by Irma and secondly they are extremely worried about ‘greening” which is a disease which first affects the leaves and then enters the tree itself. This may decimate the entire Florida orange industry. They are already facing huge competition from Brazil and maybe Brazil will be 100% of the orange juice industry.
(courtesy zero hedge)
Florida’s Orange Growers May Never Recover From Hurricane Irma
Hurricane Irma destroyed half of Florida’s citrus crop when it tore through the state earlier this month, as we reported earlier this month. The state’s orange growers at the time described the damage from the storm as the worst they’d seen in their lifetimes, as we reported at the time.
Many of the affected groves of oranges and grapefruits were approaching harvest, too – and their destruction helped send the price of orange concentrate futures rocketing higher.
Unfortunately for Florida’s citrus growers, the damage caused by Irma exacerbated declining output caused by an epidemic of “citrus greening” that’s in its twelfth year. The state’s increasingly exasperated farmers are now facing an unprecedented squeeze, the Wall Street Journal reports, as damage caused by the storm disrupted research into a genetically modified, greening-resistant orange tree.
Farmers believe that modifying orange trees to make them resistant to greening is vital for the long-term survival of one of Florida’s most iconic industries (as WSJ points out, oranges appear on Florida license plates). Greening first emerged in the state back in 2015, and is believed to be caused by tiny disease carrying insects that were first introduced when farmers purchased orange trees from Asia back in 2004.
Against this backdrop is intensifying competition from orange growers in Brazil, who are trying to horn in on the US orange-juice market (most of Florida’s oranges are processed into orange juice, while Oranges grown in California are eaten.
“…Hurricane Irma this month hit a direct blow on Florida’s citrus groves, knocking 50% of developing oranges off trees across the state, according to the University of Florida Institute of Food and Agricultural Sciences. Trees with roots already weakened by greening were sitting in 4 feet of water in some of Florida’s southern areas earlier this month. During the storm, nurseries quarantined to keep out the disease lost roofs, and scientific laboratories working on anti-greening projects lost power, potentially compromising research years in the making.
A disease called “citrus greening” is pushing Florida’s orange juice industry toward the brink of collapse. Greening starts at the leaves and works its way through the tree like a hardening of the arteries, blocking nutrients and water. Oranges drop off branches unripe and unusable. This year’s crop will likely be the smallest since the 1940s.
So miserable is the condition of Florida’s orange industry that farmers are banking on inventing a genetically engineered orange that will be ready for sale—at the earliest—in 2022.”
The secret grove—1.5 acres of knee-high trees created with a spinach gene scientists hope can defend against the disease—is down an unmarked road and behind locked gates. Visitors are logged; the company requested photographs taken by a reporter offer no clues to the grove’s location.
“We’re a bunch of scientists sitting on 12,000 acres and a giant orange juice plant we need to use,” said Tim Eyrich, vice president of research and commercialization at Southern Gardens Citrus, the company developing the engineered fruit. “If this collapses, all your orange juice comes from Brazil.”
Greening, which affects all citrus fruits, has caused Florida’s orange output to decline by roughly half over the past decade, according to the US Department of Agriculture. Revenue and jobs in the citrus sector are each down by about a third in the past three years. The state’s industry recorded revenue of $9 billion in 2016. Falling production has helped drive a roughly 50% increase in the price of orange juice sold on grocery store shelves. Meanwhile. Brazil has stepped up orange production, threatening to crush the industry in Florida. Brazil’s larger groves and different practices have helped control the spread of greening. The USDA estimates that Brazil’s total output of orange juice will rise 55% this year from last year, with exports rising 28%. Brazil’s production lead over the US has doubled since around 2003.
The situation is growing so dire that Brant Schirard, a citrus grower along Florida’s eastern belt told WSJ that growers are already starting to give up on orange farming, choosing instead to diversify into blueberries, peaches, hops and pineapples, among other crops. Across the state, about 130,000 acres of citrus have been abandoned because of greening. Back in 1977, the state boasted 53 orange juice processing plants. Today there are only seven.
As if the intensifying foreign competition and rampant disease weren’t enough, sales of orange juice have weakened dramatically as Americans seek to avoid sugar, and increasingly don’t sit down for breakfast. Orange-juice sales have declined 48% since 2005.
Even as consumers have become increasingly wary of genetically modified foods, researchers in the state are experimenting with a few different methods to cultivate trees that are immune to greening.
“Since 2009, the USDA has invested more than $400 million to study resistant plants, pesticides and other chemicals to attack the disease.
The technology Southern Gardens is using, developed by Texas A&M University, inserts a gene that is a part of the immune system of spinach into the genetic structure of an orange. The modified cells grown in a lab eventually shoot out roots and are planted in soil and develop into trees. The project is among Florida’s most promising efforts for a cure, even though the trees are still five years away from producing fruit.
The company is also experimenting with adding a spinach gene to a harmless virus naturally living inside the “phloem”—the vascular system of the tree—without affecting the genes of the tree itself.
It’s a yearslong process. Scientists wait for psyllids to come to the grove naturally to infect the trees, and then see if they are resistant to greening. “All it takes is one hurricane and you’re back to square one,” said Michael Rogers, director of the Citrus Research and Education Center at the University of Florida Institute of Food and Agricultural Sciences.”
To summarize, farmers may one day look back on Irma as the storm that killed Florida’s citrus industry. But regardless of whether Brazil threatens to undermine domestic producers, it’s nothing that a 35% tariff approved by President Donald Trump – who, we imagine, would be eager to burnish his reputation as a friend to American industry, especially in a crucial swing state like Florida.
We have discussed the following at length: the petrodollar scheme is coming apart and that is the reason that gold/silver are behaving better despite constant torment from our bankers.
a must read…
(courtesy Jim Rickards/Daily Reckoning)
Rickards Warns “Cracks In The Dollar Are Getting Larger”
Many readers are familiar with the original petrodollar deal the U.S made with Saudi Arabia.
It was set up by Henry Kissinger and Saudi princes in 1974 to prop up the U.S. dollar. At the time, confidence in the dollar was on shaky ground because President Nixon had ended gold convertibility of dollars in 1971.
Saudi Arabia was receiving dollars for their oil shipments, but they could no longer convert the dollars to gold at a guaranteed price directly with the U.S. Treasury. The Saudis were secretly dumping dollars and buying gold on the London market. This was putting pressure on the bullion banks receiving the dollar.
Confidence in the dollar began to crack. Henry Kissinger and Treasury Secretary William Simon worked out a plan. If the Saudis would price oil in dollars, U.S. banks would hold the dollar deposits for the Saudis.
These dollars would be “recycled” to developing economy borrowers, who in turn would buy manufactured goods from the U.S. and Europe. This would help the global economy and help the U.S. maintain price stability. The Saudis would get more customers and a stable dollar, and the U.S. would force the world to accept dollars because everyone would need the dollars to buy oil.
Behind this “deal” was a not so subtle threat to invade Saudi Arabia and take the oil by force.
I personally discussed these invasion plans in the White House with Kissinger’s deputy, Helmut Sonnenfeldt, at the time. The petrodollar plan worked brilliantly and the invasion never happened.
Now, 43 years later, the wheels are coming off. The world is losing confidence in the dollar again. China just announced that any oil-exporter that accepts yuan for oil can convert the oil to gold on the Shanghai Gold Exchange and hedge the hard currency value of the gold on the Shanghai Futures Exchange.
The deal has several parts, which together spell dollar doom.
The first part is that China will buy oil from Russia and Iran in exchange for yuan.
The yuan is not a major reserve currency, so it’s not an especially attractive asset for Russia or Iran to hold. China solves that problem by offering to convert yuan into gold on a spot basis on the Shanghai Gold Exchange.
This straight-through processing of oil-to-yuan-to-gold eliminates the role of the dollar.
Russia was the first country to agree to accept yuan. The rest of the BRICS nations (Brazil, India and South Africa) endorsed China’s plan at the BRICS summit in China earlier this month.
Now Venezuela has also now signed on to the plan. Russia is #2 and Venezuela is #7 on the list of the ten largest oil exporters in the world. Others will follow quickly. What can we take away from this?
This marks the beginning of the end of the petrodollar system that Henry Kissinger worked out with Saudi Arabia in 1974, after Nixon abandoned gold.
Of course, leading reserve currencies do die — but not necessarily overnight. The process can persist over many years.
For example, the U.S. dollar replaced the UK pound sterling as the leading reserve currency in the 20th century. That process was completed at the Bretton Woods conference in 1944, but it began thirty years earlier in 1914 at the outbreak of World War I.
That’s when gold began to flow from the UK to New York to pay for badly needed war materials and agricultural exports.
The UK also took massive loans from New York bankers organized by Jack Morgan, head of the Morgan bank at the time. The 1920s and 1930s witnessed a long, slow decline in sterling as it devalued against gold in 1931, and devalued again against the dollar in 1936.
The dollar is losing its leading reserve currency status now, but there’s no single announcement or crucial event, just a long, slow process of marginalization. I mentioned that Russia and Venezuela are now pricing oil in yuan instead of dollars. But Russia has taken its “de-dollarization” plans one step further.
Russia has now banned dollar payments at its seaports. Although these seaport facilities are mostly state-owned, many payments, like those for fuel and tariffs, were still conducted in dollars. Not anymore.
This is just one of many stories from around the world showing how the dollar is being pushed out of international trade and payments to be replaced by yuan, rubles, euros or gold in this case.
I believe gold is ultimately heading to $10,000 an ounce, or higher.
Now, people often ask me, “How can you say gold prices will rise to $10,000 without knowing developments in the world economy, or even what actions will be taken by the Federal Reserve?”
It’s not made up. I don’t throw it out there to get headlines, et cetera.
It’s the implied non-deflationary price of gold. Everyone says you can’t have a gold standard, because there’s not enough gold. There’s always enough gold, you just have to get the price right.
I’m not saying that we will have a gold standard. I’m saying if you have anything like a gold standard, it will be critical to get the price right.
The analytical question is, you can have a gold standard if you get the price right; what is the non-deflationary price? What price would gold have to be in order to support global trade and commerce, and bank balance sheets, without reducing the money supply?
The answer is, $10,000 an ounce.
I use a 40% backing of the M1 money supply. Some people argue for 100% backing. Historically, it’s been as low as 20%, so 40% is my number. If you take the global M1 of the major economies, times 40%, and divide that by the amount of official gold in the world, the answer is approximately $10,000 an ounce.
There’s no mystery here. It’s not a made-up number. The math is eighth grade math, it’s not calculus.
That’s where I get the $10,000 figure. It is also worth noting that you don’t have to have a gold standard, but if you do, this will be the price.
The now impending question is, are we going to have a gold standard?
That’s a function of collapse of confidence in central bank money, which is already being seen. It’s happened three times before, in 1914, 1939 and 1971. Let us not forget that in 1977, the United States issued treasury bonds denominated in Swiss francs, because no other country wanted dollars.
The United States treasury then borrowed in Swiss francs, because people didn’t want dollars, at least at an interest rate that the treasury was willing to pay.
That’s how bad things were, and this type of crisis happens every 30 or 40 years. Again, we can look to history and see what happened in 1998. Wall Street bailed out a hedge fund to save the world. What happened in 2008? The central banks bailed out Wall Street to save the world.
What’s going to happen in 2018?
We don’t know for sure.
But eventually a tipping point will be reached where the dollar collapse suddenly accelerates as happened to sterling in 1931. Investors should acquire gold and other hard assets before that happens.
Here are your six important Republicans and their stance on tax reform;
Meet The Six Republican Senators Who Could Kill Trump’s Tax-Reform Bill
The nine-page dax document unveiled by the Trump administration this week included may of the proposals we expected to hear: streamlining the tax code for individuals into three (or possibly four) brackets, eliminating state and local deductions, repealing of the estate tax, major reductions on corporate rates and incentives for American companies to repatriate billions of dollars in overseas profits.
And while the details of the bill have yet to be worked out (Treasury Secretary Steven Mnuchin has said they will be negotiated in committee), after a handful of holdout senators killed the Republican effort to repeal and replace Obamacare (resulting in an embarrassing defeat on repealing an unpopular law that President Donald Trump has said “should’ve been a slam dunk”), the administration is likely already trying to figure out where senators stand. And, more importantly, where various senators stand in terms of their reservations.
To help give readers a sense of where the legislation stands, Bloomberg has identified six senators who may (and in many cases will) cause problems for the Trump administration by opposing the bill. The list includes moderates, hard-core conservatives, and several senators who already have – or may soon announce – that they will not be seeking reelection, presumably allowing them more freedom to consider the legislation on its actual merits.
The full list is presented below:
“The Deficit Hawk” (Bob Corker)
Earlier this week, the Tennessee senator announced that he will not seek a third term in the senate – effectively freeing him from political considerations (presumably unless they would jeopardize his chances of winning a seven-figure lobbying payday after leaving office) and free to vote based on his convictions.
Unfortunately for the Trump administration, those considerations could lead him into conflict. Corker, a well-known “deficit hawk”, has said the bill “cannot produce a deficit”. The official administration line is that any initial deficits will be closed by future revenues produced as a byproduct as economic growth.
Corker recently struck a deal with Toomey paving the way for budget legislation that would allow for huge tax cuts in theory, but Corker has said he wouldn’t allow them to balloon the deficit. “With realistic growth projections, it cannot produce a deficit,” Corker said Wednesday. “There is no way in hell I’m voting for it.” He estimated that some $4 trillion in revenue-raisers must be achieved in order to ease his concerns.
Corker also said he wants to “get down to lower corporate rates and get rid of all these crazy issues that exist in our tax code,” describing his opposition to raising the deficit as a “hard stand” in order to “make sure we stay fiscally sane.”
“The Hard No” (John McCain)
John McCain has twice now led Republicans to believe he would provide a crucial vote in support of their Obamacare repeal-and-replace bills, only to dash everybody’s hopes at the last minute (the first time around, he cast a surprise “no” vote on the Senate floor that elicited audible gasps from his colleagues). McCain, whose distaste for President Donald Trump dates back at least to when then-candidate Trump mocked him for being taken prisoner during the Vietnam War, is already sending subtle hints that he will likely oppose the administration’s agenda, no matter what form the legislation ultimately takes.
His comment that he would like to see the tax bill receive “bipartisan support” echoed his reasoning for opposing Graham-Cassidy. As Bloomberg admits, winning Democratic support “may be difficult.” This suggests that McCain will probably start off in the “no” column.
The irony, of course, is that if a handful of Democrats do break ranks, McCain’s vote would be of little consequence.
“That may be difficult to reconcile with Senate Republican leaders’ plans to use the fast-track procedure on taxes that they tried to use on health care. Will the so-called maverick be satisfied? Initial reaction among Democrats to the tax framework indicates firm opposition, but McCain was more positive, praising the multiple tax hearings that the Finance Committee has held and saying he looks forward to reviewing the proposal.
McCain, 81 and battling brain cancer, has a history of bucking his party on the issue of taxes. He was among the few Senate Republicans to vote against President George W. Bush’s two separate tax cuts in 2001 and 2003, although he later came to support making them permanent.”
“The Ideologue” (Rand Paul)
After Paul opposed the Republicans’ Obamacare repeal-and-replace agenda at every turn, each time claiming that the bill under consideration wouldn’t repeal enough of the law, his early remarks suggest that he and the Trump administration might find more common ground when it comes to cutting taxes.
True to his libertarian ethos, Paul is seeking massive cuts of “at least 15%” for every tax payer. He has also rejected the notion that cuts should be “revenue neutral” – presumably a priority for deficit hawks like Corker. The Trump administration has repeatedly tried to justify expanding the deficit, saying the cuts will bolster growth, which will in turn compensate for some of the shortfall. Paul appears to be on board with this.
The Kentucky libertarian is never an easy vote to win over – he proved it during the health-care debate by staunchly opposing the Senate’s last opportunity to undo Obamacare before the Sept. 30 deadline, complaining that it didn’t go far enough. And now he’s staking out a far-reaching position on taxes, too, calling for a “large cut of at least 15 percent for every taxpayer” in an Aug. 30 op-ed.
Paul is also opposed to paying for a tax cut, describing the push for revenue neutrality as “a terrible idea” that simply shifts around the tax burden and fails to achieve “real tax cuts.” He called on his party to reject the principle of revenue neutrality, warning it will “result in those with the best lobbyists, lawyers and accountants being the winners, while most everyone else either gets nothing or largely loses out.” Senator Ted Cruz of Texas has also said a tax plan should include big cuts, pushing back on the idea of revenue neutral changes.
“The Kentucky libertarian is never an easy vote to win over – he proved it during the health-care debate by staunchly opposing the Senate’s last opportunity to undo Obamacare before the Sept. 30 deadline, complaining that it didn’t go far enough. And now he’s staking out a far-reaching position on taxes, too, calling for a “large cut of at least 15 percent for every taxpayer” in an Aug. 30 op-ed.”
“The Tax Wonk” (Pat Toomey)
Toomey is widely recognized as one of the Republican “thought leaders” on tax policy. Toomey has been “an outspoken cheerleader” for cuts, and, like Paul, believes revenue-neutrality would be counterproductive. However, he has staked out two goals that could bring him in conflict with either the administration, or possibly more moderate Republicans. One is capital expensing (allowing businesses to write off the cost of capital projects). The other is the repatriation of corporate profits.
The second-term Pennsylvania senator is an outspoken cheerleader for tax cuts and has argued against the need to pay for such a plan, saying the overarching focus must be on economic growth and that a revenue-neutral plan would be “anemic.” He successfully pushed for an agreement on a budget vehicle that allows the tax cuts to add to the deficit. He’s also argued for changing the rules to extend the budget window for a temporary tax cut from 10 years to as many as 30 years. “I’d like to stretch that out as much as possible,” he said.
Toomey, along with fellow tax wonk Senator Rob Portman of Ohio, are seen as the Senate Finance Committee’s thought leaders on tax policy. One of Toomey’s big priorities: “Expensing capital might be the most pro-growth element of this exercise,” he told reporters Wednesday. “That’s really really important to me.” Another is to create an incentive to bring home the estimated $2.6 trillion in corporate profits sitting overseas and set up a territorial system where U.S. companies aren’t subject to “an extra layer of tax from overseas income.”
“The Chairman” (Orrin Hatch)
Hatch is one of the few remaining senators who was around during the Reagan-era tax-code overhaul. So far, he’s been tight-lipped about the administration’s initial nine-page proposal.
However, Hatch’s support is vital to moving the bill out of committee (a committee that he controls). Hatch, who, as the oldest senator, has said he may not run again, may also be free from political considerations.
“Hatch, who was a second-term senator during the last big tax-code rewrite in 1986, is keenly aware of the issue’s complexity. He declined to say if he believes the Senate will secure a majority to eliminate the state and local tax deduction, a major revenue-raiser targeted in the Trump-GOP framework. “I’m not going to talk about specifics,” he said. “It’s a very complex bill to begin with. And we’re going to have to make some very tough decisions about what we keep and what we don’t.”
Hatch’s panel has a 14-12 split between Republicans and Democrats, which means he can afford to lose no more than one Republican if Democrats decline to play ball. He said he hopes to win Democratic support, but conceded that it “would be unique” in this political environment. “If they want to play politics with it, it’s another matter.”
“The Moderate” (Susan Collins)
Finally, we get to Susan Collins. Collins, who opposed repeal-and-replace, is known for her “heterodox” voting record. She has already voted against measures for repealing the estate tax (one of the objectives outlined in the Trump administration’s nine-page document), and she’s also voted for measures raising the top tax rate for people earning more than $1 million (suggesting that she might insist on a fourth, higher tax bracket, a possibility that Trump and his representatives have said they would be open to.
The Maine senator has voted for numerous tax cuts in the past, including the Bush tax cuts of 2001 and 2003. But she has also taken some heterodox positions that could be a factor: In 2015, she was the only GOP senator of 55 who broke ranks and voted against a budget measure calling for repeal of the estate tax, which the Trump-GOP framework seeks to do. In 2008, she voted for a measure to raise the top tax rate for people earning more than $1 million.
For now, Collins isn’t revealing any of her thoughts on the framework.
“I’m going to take the weekend to study it,” she said.
Of course, the final bill hasn’t taken shape yet. But the broad strokes suggest that the administration will be fighting to balance two sets of competing interests: On one side will be Republicans who want to see responsible deficits and more progressive taxes on the wealthy, and the other will be more conservative senators who are less concerned about deficits, and are more focused on across-the-board cuts.
The administration’s tiny margin of error (Republicans can’t afford to lose more than two votes, assuming every Democrat opposes the bill) gives holdouts considerable leverage; it could also be an opportunity for Trump to show off his much hyped “deal-making” prowess (not to mention the political attack machine that is Breitbart) to coax reluctant senators into voting for the final package. One thing is clear: wither neither Obamacare repeal, nor tax reform heading into the midterms, 2018 would be a difficult year for the republicans.
It sure looks like Kevin Warsh will be the new Fed chairman
Kevin Warsh Fed Chair Odds Soar After WSJ Report Of Trump Meeting
Kevin Warsh’s PredictIt odds to be the next Fed chair soared moments ago after the WSJ reported that President Trump and Treasury Secretary Steven Mnuchin met with the former Fed governor on Thursday to discuss his potential nomination as the next Federal Reserve chairman, “a White House official said, signaling that the West Wing is moving ahead with a process that the president has said he would like to have completed by the end of the year.”
In immediate reaction, Warsh’s odds jumped by 10% to 45% while Janet Yellen’s tumbled by 8 to 24%.
That said, “Chairman Warsh” is not assured just yet, and as the WSJ adds, other names in contention include current Fed Chairwoman Janet Yellen, Stanford University economist John Taylor and John Allison, the former BB&T Bank chief executive, according to people familiar with the process. Mr. Allison was offered a position on the central bank’s board of governors earlier in Mr. Trump’s tenure, but turned it down, said people familiar with the offer.
Mr. Warsh is a former Fed governor and was a member of the president’s Strategic and Policy Forum, a group of business leaders that disbanded in August in protest over what they said was Mr. Trump’s failure to sufficiently condemn racism. He was also an economic adviser to 2016 Republican presidential candidate Jeb Bush, who was considered the front-runner for the nomination before Mr. Trump’s political rise surprised the political establishment.
Mr. Warsh, a veteran Republican economic policy maker, is married to Jane Lauder, granddaughter of cosmetic icon Estée Lauder . His father-in-law, businessman Ron Lauder, has been lobbying the White House to have the president name his son-in-law to the central bank’s highest post, said people familiar with those conversations.
Most notably, Warsh has historically been one of the most prominent inflation hawks and outspoken critics of existing Fed policies, which may explain the sharp move higher in the dollar and the corresponding slide in TSY prices.
The uSA orders 60% of Havana embassy to leave Cuba after continual wave of mysterious sonic attacks
US Orders 60% Of Havana Embassy Staff To Leave After Wave Of Mysterious ‘Sonic Attacks’
Senior U.S. officials have told the Associated Press that the U.S. is pulling roughly 60% of its staff out of Cuba and warning American travelers not to visit due to “specific attacks” that have harmed U.S. diplomats – namely the unspecified sonic attacks that have caused injuries ranging from mild to severe in more than 20 diplomats who formerly worked at the embassy. The officials say the US is ordering all nonessential staff in the embassy in Havana to leave, along with all family members. Only “emergency personnel” will remain.
Meanwhile, the US is also halting issuing visas to Cubans over the attacks, though it has stopped short of implicating the Cuban government.
The State Department warning on travel warning noted that many of the strange sonic attacks occurred in hotels, not the embassy itself, and that travelers could be at risk.
Following the news, Senator Marco Rubio criticized the State Department for not also kicking out some Cuban diplomats, given the egregious nature of the attacks.
The mysterious attacks started late last year, and at least one incident was recorded as recently as this month. The US has released little information on the nature of the attacks, or who the suspects might be.
Coverup? FBI, DOJ Refuse To Comply With Congressional “Trump Dossier” Subpoena
In what looks like a naked coverup meant to obscure the fact that the Department of Justice’s decision to launch a criminal investigation into possible Russia-Trump collusion was based on a lie, Reuters reports that the DOJ and FBI are resisting a Congressional subpoena from to turn over documents that would reveal details about how the infamous “Trump dossier” factored into their decision to launch said investigation.
Despite receiving the subpoena from US Intel Committee Chairman Devin Nunes, the FBI is steadfastly refusing to turn over the documents because the agency says they would purportedly compromise an ongoing criminal investigation (the FBI’s investigation into Mueller). More likely, the agency’s intransigence stems from fears that the one Russia collusion narrative that Democrats have actively worked to suppress could come back to haunt them.
The U.S. House of Representatives Intelligence Committee issued subpoenas in August seeking “any and all documents” about both agencies’ dealings with former MI6 officer Christopher Steele, according to a letter seen by Reuters from committee chairman Devin Nunes, a Trump supporter.
Steele compiled the so-called Trump dossier, which Trump was told by FBI director James Comey contained salacious material about the businessman-turned president. Trump and his associates have said the dossier’s contents were false.
As we noted earlier this month when the subpoenas were first filed, the now-infamous Trump dossier was provided to the FBI even though it contained knowingly inaccurate allegations. Russia-born financier and Putin opponent Bill Browder revealed as much during an explosive piece of testimony to the Senate Judiciary Committee over the summer that was multilaterally ignored by the media, when he claimed that the document was indirectly financed by a “senior Russian government official.”
Unsurprisingly, Nunes and his fellow Republicans are spearheading the subpoena effort, while Democrats on the committee, including leading anti-Trumper Adam Schiff, have resisted their efforts at every turn, claiming the subpoenas are part of a plan to try and “discredit” the dossier’s author, former British intelligence officer Christopher Steele.
To be sure, many of the claims Steele made in the dossier have already been discredited. For example, the FBI has found no evidence, for example, supporting the dossier’s its claim that an attorney for Mr. Trump went to the Czech Republic to meet Kremlin officials, U.S. officials said. The attorney has also denied the claim.
For their part, Republicans on the committee contend that understanding the genesis of the dossier, and whether it was created with the explicit intention of sabotaging Trump, is important.
Meanwhile, the Senate Judiciary Committee has also been battling with the Justice Department for months over its request to interview two FBI officials about Trump’s dismissal in May of Comey as FBI chief, according to letters from the committee and the department. On Sept. 22, it agreed that it would be “appropriate” for the officials to testify provided that it would be in a classified setting and did not interfere with Mueller’s inquiry.
Not unlike the Ring of Sauron from “The Lord of the Rings”, the Trump dossier has created problems for everyone who has touched it. Buzzfeed is being sued for defamation by an individual who was named in the dossier in a case that bears several eerie similarities to the Hulk Hogan lawsuit that killed Gawker. CNN published a series of embarrassing clarifications and retractions. Fusion GPS, the firm that hired Steele, has been widely criticized for its role in creating the document, and one of its founders was finally compelled to privately testify before a Senate committee after months of dragging his feet.
It has embarrassed the DOJ, which reportedly cited some of its unproven allegations as justification for launching a criminal probe into the Trump campaign – a probe that has dragged on for nearly nine months now, without producing anything that looks like actionable evidence against the president.
It’s long past time for the intelligence agencies to come clean about how the document factored into their thinking. Considering the volume of leaks meant to convey the implication of shadiness without providing anything in the way of actual evidence of collusion, it’s understandable why Trump’s loyalists in Congress want to expose the lies underpinning the collusion narrative.
Even The Cheapest Obamacare Plans Are “Unaffordable” In 94% Of American Cities, New Study Finds
We’ve frequently warned that Obamacare is locked in an inescapable death spiral that will result in its inevitable failure. The problem is that the folks who make too much to qualify for subsidies (currently defined as roughly $80,000 for a family of 3) are increasingly being priced out of the market for individual insurance by Obamacare’s 30%+ price hikes that consistently come year after year. Meanwhile, those “rich” families making $80,000 a year are the ones expected to overpay for their health insurance so that a portion of their premiums can be “spread around a little bit” (as Obama likes to say) to subsidize the premiums of others. Of course, it’s easy to see the circularity here as higher premiums equals less “full-paying” customers and less subsidies equals higher premiums…until the whole system collapses.
Luckily you no longer have to take our word for it as eHealth.com has just published a new study that finds that, even by Obamacare’s own definition of “affordability”, residents in 47 out of 50 cities surveyed can’t afford the cheapest Obamacare plan.
According to a study released today by eHealth, Inc., which operates eHealth.com, the average family of three earning slightly too much to qualify for subsidies in 2018 would need to increase its household income by nearly $29,000 before health insurance became “affordable” based on Obamacare criteria.
The Affordable Care Act (ACA or Obamacare) considers health insurance to be “unaffordable” when annual premiums for the lowest-priced plan in a market cost more than 8.16% of a household’s modified adjusted gross income (or MAGI). When health insurance is unaffordable by this standard, individuals and families may qualify for an exemption from Obamacare’s individual mandate to buy health insurance.
“Coverage under the Affordable Care Act is becoming seriously unaffordable for many families, even by Obamacare’s own rules,” said eHealth CEO Scott Flanders. “I find it hard to believe that the framers of the law ever intended the cost of family health insurance to rival that of a second mortgage. Without the introduction of lower-cost options into the market or expanded government subsidies, many middle-income Americans are in danger of being priced out of the health insurance market entirely.”
Meanwhile, if anything, the study conducted by eHealth was somewhat conservative as it only assumed a 10% premium increase in 2018.
In preparing its analysis, eHealth reviewed the lowest-price 2017 plan available for families of three comprised of two adults age 35 and one child. The same family model was analyzed using data from Healthcare.gov in 40 cities, data from eHealth.com in 9 cities not utilizing Healthcare.gov, and data from the New York state exchange for New York City.
After applying a relatively modest annual rate increase of 10% to 2017 rates to project 2018 rates, eHealth discovered the following:
- In 47 of 50 cities surveyed, the lowest-priced plan would be officially unaffordable under Obamacare affordability standards for families earning 401% of the federal poverty level (about $82,000 per year in the contiguous US, making them ineligible for Obamacare subsidies).
- Among these, the average three-person household would need to earn an additional $28,939 per year before the lowest-cost plan becomes affordableaccording to Obamacare rules.
To put eHealth’s findings in perspective, a family of 3 in Charlotte, NC, with an annual income of $81,884, would have to spend 18% of their gross income in 2018 just to purchase the cheapest Obamacare plan for their family. On a post-tax basis, that expenditure would be well over 20%. Moreover, as eHealth points out, that family of 3 would have to find a way to make an extra $102,245 per year to meet the “affordability” test included in the Obamacare legislation.
Here’s how other cities compared on Obamacare “affordability”:
Sure, Obamacare is working just fine and should be left alone…
Tom Price Resigns As HHS Secretary Amid Private Jet Scandal
As part of the growing private jet (ab)use scandal that has recently rocked the Trump administration, on Friday afternoon the White House announced that Secretary of Health and Human Services Tom Price offered his resignation and President Trump has accepted, according to the Press Sec. office.
Full White House statment below:
Statement from the Press Secretary
Secretary of Health and Human Services Thomas Price offered his resignation earlier today and the President accepted. The President intends to designate Don J. Wright of Virginia to serve as Acting Secretary, effective at 11:59 p.m. on September 29, 2017. Mr. Wright currently serves as the Deputy Assistant Secretary for Health and Director of the Office of Disease Prevention and Health Promotion.
The resignation follows a Politico report according to which Tim Price took military jets to Europe, Asia for over $500K. In addition to all of the more than two dozen private and chartered jets Price has taken since May, the pricetag had risen north of $1 million taxpayer dollars, according to calculations made by Politico.
Trump had previously left open the question of Price’s future employment. “I was looking into it and I will look into it,” he told reporters earlier this week. “I will tell you personally, I’m not happy about it. I am not happy about it I’m going to look at it. I let him know it.” Asked whether he will fire Price over the private jet use, Trump responded cryptically: “We’ll see.”
Price, sensing he is in deep trouble, tried to stanch the bleeding on Thursday by pledging to write a check covering the cost of his seat on all of these private plane trips – including one from Washington to Philadelphia that cost $25,000.
In the end it wasn’t enough.
Price if just the first of as many as Trump admin officials who are in trouble over private jet use. As Axios summarizes, there are at least four others who are in hot water over the exact same thing:
Scott Pruitt, Environmental Protection Agency administrator
The flights: A June 7 military flight to Ohio then New York ($36,068); a July 27 charter flight from Tulsa, Oklahoma, to Guymon, Oklahoma ($14,434); an August 4 charter flight from Denver, Colorado, to Durango, ColoradoA ($5,719); an August 9 flight on the North Dakota governor’s plane ($2,144). Pruitt took “non-commercial” flights costing taxpayers more than $58,000, according to CBS News.
The defense: “When the administrator travels, he takes commercial flights,” EPA spokeswoman Liz Bowman told the Washington Post Wednesday, adding that the one charter flight and three government flights were due to particular circumstances.
Last month, the EPA’s inspector general announced it was launching a preliminary probe into Pruitt’s travels to Oklahoma.
Steve Mnuchin, Treasury Secretary
The flights: Mnuchin requested a government jet earlier this year for his honeymoon, according to ABC News. He and his wife also used a government jet when traveling to Louisville and Fort Knox, Kentucky, which coincided with the eclipse. An Air Force spokesman told ABC News that a government jet typically costs roughly $25,000 per hour to operate.
The defense: Mnuchin told Politico’s Ben White that the honeymoon story was “misreported” and the use of such a plane would only be for “national security” purposes. He also denied that his Kentucky trip had anything to do with watching the eclipse.
Mnuchin later withdrew the plane request for his honeymoon. Meanwhile, the Treasury Department’s Inspector General is reviewing his Kentucky trip.
Ryan Zinke, Secretary of the Interior
The flights: Zinke and his aides have reportedly taken several flights on private or military aircraft, including a $12,000 charter flight — which belongs to Nielson & Associates, a Wyoming-based oil-and-gas exploration firm — from Las Vegas to his hometown in Montana, and private flights between St. Croix and St. Thomas in U.S. Virgin Islands, per the Washington Post. Total cost: Unclear, as the total number of charter or military flights is unknown.
The defense: Interior Department spokeswoman Heather Swift said those trips were booked only after officials failed to find commercial flights that would accommodate Zinke’s schedule. She added that they all were “pre-cleared by career officials in the ethics office,” per Politico.
The defense: “All this travel was done only after it was determined by multiple career officials at the department that no commercial options existed to meet the promulgated scheduled,” Zinke said. “The flights were only booked after extensive due diligence by the career professionals in the department’s general law and ethics division.”
The Interior Department said in a statement to the Huffington Post Friday that Zinke’s travel “was completely compliant with all applicable laws, rules, and regulations.”
David Shulkin, Secretary of Veterans Affairs
The flights/luxury purchases: Although Shulkin flew commercial to Europe for meetings with Danish and British officials about veterans’ health issues in July, he did use government funds to fly his wife out, stating that she was traveling on “approved invitational orders,” per the Washington Post. The government also provided a stipend for her meals. They also attended a Wimbledon championship tennis match, toured Westminster Abbey, and took a cruise on the Thames.
The defense: All of Shulkin’s activities on the trip, including Wimbledon visit, “were reviewed and approved by ethics counsel,” VA press secretary Curt Cashour said in a statement.
In response to questions from The Post, the VA announced Friday that they’ll start posting details of the Shulkin’s travel online, and disclose any use of government or private aircraft. This information was never previously public.
(courtesy Greg Hunter/USAWatchdog)
China Squeezes North Korea, NFL Kneel Will Cost Money, Fed Was Wrong
By Greg Hunter On September 29, 2017
By Greg Hunter’s USAWatchdog.com (WNW 303 9.29.17)
Good news on North Korea and the tensions with the U.S. over its nuclear ambitions. China is ordering North Korean businesses to close because of the latest U.N. sanctions pushed by the U.S. This is way above and beyond what was required and is a positive sign that China is ramping up the pressure to get North Korea to back down. This will hurt the flow of currency going into North Korea from China.
The NFL is supporting its players in taking a knee during the national anthem before the games to protest police brutality. The majority of fans are outraged and are burning jerseys and season tickets because they think it’s a political stunt. If this keeps up, it will trickle down to the NFL sponsors, and it could turn into a flood of negative sales. Catherine Austin Fitts says this is a distraction to keep the public from waking up to the massive fraud going on with the federal government’s budget. She contends that $21 trillion, yes, $21 trillion is missing, and “We the People” are basically being robbed. She is the guest for the Early Sunday Release.
Fed Head Janet Yellen says it is no “mystery” at all why inflation is so low. Now, she says the Fed got it wrong on inflation and employment. The economy is weaker than they thought.
This means the Fed will continue its easy money policies and not raise interest rates anytime soon. Inflation and weak U.S. dollar here we come.
Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.
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After the Wrap-Up:
Catherine Austin Fitts, President of Solari.com, will be the guest for the Early Sunday Release. Fitts will explain how the federal budget cannot account for $21 trillion dollars and that is just HUD and DOD. You will not want to miss this. “We the People” are being robbed.
Well that about does it for tonight
I will see you MONDAY night.
FOR THE FOLLOWING WEEK, I WILL BE OUT OF LOOP
HOWEVER, I WILL PROVIDE THE COMEX DATA AND SOME MAJOR EVENTS.