Oct 2.2017/CHINA IS ON GOLDEN WEEK HOLIDAY AND THUS THE CROOKS WILL RAID ALL WEEK/SURPRISINGLY NO GOLD OR SILVER LEFT THE GLD OR SLV: I WONDER WHY?/BILL HOLTER’S IMPORTANT PAPER..A MUST READ…

GOLD: $1274.25 down   $8.25

Silver: $16.60  down 8 CENT(S)

Closing access prices:

Gold $1271.10

silver: $16.60

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: $n/a DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $n/a

PREMIUM FIRST FIX:  $8.24 (premiums getting larger)

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SECOND SHANGHAI GOLD FIX: $n/a

NY GOLD PRICE AT THE EXACT SAME TIME: $/na

Premium of Shanghai 2nd fix/NY:$13.00 (PREMIUMS GETTING LARGER)  

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LONDON FIRST GOLD FIX:  5:30 am est  $not important

NY PRICING AT THE EXACT SAME TIME: $not important

LONDON SECOND GOLD FIX  10 AM: $1283.10

NY PRICING AT THE EXACT SAME TIME. 1283.10

For comex gold:

OCTOBER/

NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 28 NOTICE(S) FOR  2800  OZ.

TOTAL NOTICES SO FAR: 439 FOR 43900 OZ  (1.3654 TONNES)

For silver:

OCTOBER

 19 NOTICES FILED TODAY FOR

95,000  OZ/

Total number of notices filed so far this month: 304 for 1,520,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

Let us have a look at the data for today

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In silver, the total open interest FELL CONSIDERABLY BY  1464 contracts from  184,424  DOWN TO 182,960  CORRESPONDING TO ANOTHER RAID THAT SILVER UNDERTOOK IN FRIDAY’S TRADING (DOWN 14 CENTS ). WITH GOLDEN WEEK IN CHINA STARTING FRIDAY SEPT 29, OUR CROOKS BECOME EMBOLDENED TO CONTINUE THEIR WHACKING KNOWING FULL WELL THAT THEY DO NOT HAVE TO WORRY ABOUT PHYSICAL DELIVERIES FOR AT LEAST A WEEK.

RESULT: A FAIR SIZED FALL IN OI COMEX  WITH THE  14 CENT PRICE RISE. IT LOOKS LIKE WE HAD A SMALL AMOUNT OF BANKER SHORTS COVERING AND THUS THEY HAD MILD SUCCESS.  

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.152 BILLION TO BE EXACT or 131% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 19 NOTICE(S) FOR 95,000  OZ OF SILVER

In gold, the open interest FELL BY A SMALLER THAN EXPECTED 1800 CONTRACTS WITH THE FALL  in price of gold ($3.75 ) WITH YESTERDAY’S COMEX TRADING.  The new OI for the gold complex rests at 530,883. WE  HAVE NOW ENTERED GOLDEN WEEK (ONE WEEK OF CHINESE HOLIDAY)..SO EXPECT TORMENT FOR THE REST OF THE WEEK AS THE CROOKS DO NOT HAVE TO WORRY ABOUT PHYSICAL DELIVERIES FOR A WEEK.

 

Result: A SMALL SIZED DECREASE IN OI WITH THE  FALL IN PRICE IN GOLD ($3.75) 

we had: 28 notice(s) filed upon for 2800 oz of gold.

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

GLD:   WOW

Tonight , NO CHANGES  in gold inventory at the GLD AGAIN DESPITE THE CONTINUAL DRUBBING GOLD HAS TAKEN THESE PAST FEW WEEKS

Inventory rests tonight: 864.65 tonnes.

SLV

Today: a no changes in inventory:

INVENTORY RESTS AT 326.757 MILLION OZ

end

.

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

1. Today, we had the open interest in silver FELL BY  1464 contracts from 184,424  DOWN TO 182,960 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . IT  SEEMS THAT A TINY FRACTION OF OUR BANKERS WERE SUCCESSFUL IN COVERING THEIR SHORTS.  WITH GOLDEN WEEK IN CHINA, EXPECT THE BANKERS TO HAVE CONSTANT TORMENT THROUGH THIS COMING WEEK AS THEY TRY AND COVER AS MANY AS POSSIBLE OF THEIR SILVER/GOLD SHORTS.

RESULT:  A GOOD SIZED DROP IN SILVER OI  AT THE COMEX WITH THE FALL IN PRICE OF 19 CENTS IN FRIDAY’S TRADING. EXPECT CONSTANT TORMENT FOR THE REST OF THE WEEK.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed /Hang Sang CLOSED / The Nikkei closed UP 44.50 POINTS OR 0.22%/Australia’s all ordinaires CLOSED UP 0.81%/Chinese yuan (ONSHORE) closed/Oil DOWN to 50.30 dollars per barrel for WTI and 55.60 for Brent. Stocks in Europe OPENED GREEN .  ALL YUAN FIXINGS CLOSED

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

 

7. OIL ISSUES

8. EMERGING MARKET

9.   PHYSICAL MARKETS

10. USA Stories

Let us head over to the comex:

The total gold comex open interest FELL BY SMALLER THAN EXPECTED 1800 CONTRACTS DOWN to an OI level of 530,883 DESPITE THE FALL IN THE PRICE OF GOLD  ($3.75 LOSS IN FRIDAY’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. WE ALSO NOTICE THAT THE DELIVERY NOTICES ARE SMALL WHICH MEANS THAT NO GOLD IS PRESENT TO DELIVER UPON OUR REMAINING LONGS. WE HAVE NO ENTERED GOLDEN WEEK WHERE ALL OF CHINA IS OFF AND AS SUCH EXPECT CONSTANT TORMENT FOR THE REST OF THE WEEK.

Result: a  SMALLER SIZED open interest DECREASE WITH THE GOOD SIZED FALL IN THE PRICE OF GOLD ($3.75.) 

 GOLD NOTICES FILED FOR MONDAY IS SMALL AT ONLY 28 CONTRACTS. LATELY THE NUMBER OF NOTICES FILED HAVE BEEN EXTREMELY SMALL AT THE COMEX SO YOU CAN ASSUME THAT THE COMEX IS OUT OF GOLD TO DELIVER UPON AND MUST RELY ON THE EFP’S TO TRANSFER THE OBLIGATION OVER TO LONDON.

 

CHINA THREW OUT A TRIAL BALLOON LAST MONTH THAT THEY WERE CONSIDERING A YUAN BASED OIL CONTRACT ON THE SHANGHAI EXCHANGE AND THEN THE RECIPIENT OF YUAN WILL ALSO HAVE THE OPTION OF CONVERTING TO GOLD. I NOW STRONGLY BELIEVE THAT THAT IS THE REASON FOR THE CONSTANT TORMENT. THE BANKERS KNOW THAT THEIR GAME WILL BE UP ONCE WE GET A YUAN-PETRO SCHEME WITH A CONVERSION OF YUAN INTO GOLD.

I BELIEVE THE CHINESE WILL INTRODUCE THIS SCHEME AT THEIR BIG 5 YR FORUM BEGINNING ON OCT 18.

I WOULD IMAGINE THAT THE CHINESE WOULD TAKE IN ALL GOLD INITIALLY AT SAY $2,000…AND THE NEW GOLD RECEIVED WOULD BE USED TO SETTLE ON YUAN CASHED. IF 2,000 DOLLARS IS INSUFFICIENT TO RAISE ENOUGH GOLD, THEN FURTHER INCREASES WILL BE THE ORDER OF THE DAY UNTIL EQUILIBRIUM.

THE BANKERS FEARING THIS, HAS ORCHESTRATED HUGE RAIDS THESE PAST 2 WEEKS HOPING TO COVER AS MANY GOLD/SILVER SHORTS AS POSSIBLE.

 

We have now entered the active contract month of Oct and here we saw a LOSS of 707 contracts DOWN to 2,299 contracts.  We had only 411 notices filed yesterday so we lost 296 contracts or 29,600 oz will not stand for delivery at the comex. However 296 EFP notices were given to those longs which gives them a fiat bonus plus a future delivery product on another bourse and most likely that would be London. These departing longs would thus receive a London based forward contract for delivery at another date.  These EFP’s are supposed to be for emergency purposes only but the crooks are continually using this escape hatch.

The November contract saw A GAIN OF 9 contracts UP to 1396.

The very big active December contract month saw it’s OI LOSS OF 2,342 contracts DOWN to 421,741.

We had 28 notice(s) filed upon today for  2800 oz

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And now for the wild silver comex results.  Total silver OI FELL BY  1464 CONTRACTS FROM 184,424 DOWN TO 182,960 WITH YESTERDAY’S 19 CENT FALL IN PRICE. WE  HAVE  HAD SOME BANKER SHORT COVERING. WE HAVE NOW ENTERED GOLDEN WEEK IN WHICH THE ENTIRE COUNTRY OF CHINA SHUTS DOWN.  SINCE CHINA IS THE DOMINANT PURCHASER OF BOTH SILVER AND GOLD, NO WONDER THE CROOKS STARTED THEIR RAID SEQUENCE ON FRIDAY ONCE CHINA WAS PUT TO BED. EXPECT CONSTANT TORMENT FOR THE NEXT WEEK.
We have now entered the non active contract month of  October and here the OI LOST 271 contacts DOWN TO 570.  We had 285 notices filed on first day notice so we again for the 6th straight month gained in oz standing for silver.  We gained an additional  14 contracts or an additional 70,000 oz will stand. November saw a GAIN of 19 contract(s) and thus RISING TO  252. After November, the NEXT big active contract month is December and here the OI LOST 1322  contracts DOWN to 144,351 contracts.

We had 19 notice(s) filed for  95,000 oz for the OCT. 2017 contract

INITIAL standings for OCTOBER

 Oct.2/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
n/a oz
\
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
 nil
No of oz served (contracts) today
 
28 notice(s)
2,800 OZ
No of oz to be served (notices)
2277 contracts
(227,700 oz)
Total monthly oz gold served (contracts) so far this month
439 notices
43,900 oz
1.366 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month     23,630.25 oz
Today we HAD  n/a kilobar transaction(s)/ 
 WE HAD 0 DEALER DEPOSIT:
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  0 oz
we had 0 customer deposit(s):
total customer deposits; nil oz
We had n/acustomer withdrawal(s)
total customer withdrawals; n/a  oz
 we had 0 adjustment(s)
For OCT:

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 28  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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To calculate the INITIAL total number of gold ounces standing for the OCTOBER. contract month, we take the total number of notices filed so far for the month (439) x 100 oz or 43,900 oz, to which we add the difference between the open interest for the front month of OCT. (2299 contracts) minus the number of notices served upon today (28) x 100 oz per contract equals 271,600  oz, the number of ounces standing in this active month of OCT.
 
Thus the INITIAL standings for gold for the OCTOBER contract month:
No of notices served  (439) x 100 oz  or ounces + {(2299)OI for the front month  minus the number of  notices served upon today (28) x 100 oz which equals 271,600 oz standing in this  active delivery month of OCTOBER  (8,447  tonnes).
WE LOST 296 CONTRACTS OR AN ADDITIONAL 29600 OZ WILL NOT STAND.  HOWEVER THESE LONGS WERE GIVEN 296 EFP CONTRACTS WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURE DELIVERABLE PRODUCT ON ANOTHER EXCHANGE AND THAT IS MOST LIKELY A LONDON FORWARD.
 IT WAS OBVIOUS THAT  THERE WAS HARDLY ANY GOLD TO DELIVER UPON LONGS IN SEPTEMBER.  THUS THE CROOKS USE THE EFP’S TO TRANSFER THEIR OBLIGATION TO ANOTHER EXCHANGE. THIS IS WHY ANOTHER 5400 EFP’S WERE ISSUED FOR OCTOBER GOLD ON FRIDAY.
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Total dealer inventory 692,948.570 or 21.49 tonnes  (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,737,775.667 or 271.7812 tonnes 
 
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 13 MONTHS  81 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE OCTOBER DELIVERY MONTH
OCTOBER INITIAL standings
 Oct 2  2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 n/a oz
Deposits to the Dealer Inventory
 nil oz
Deposits to the Customer Inventory 
 n/a oz
No of oz served today (contracts)
19 CONTRACT(S)
(95,000 OZ)
No of oz to be served (notices)
551 contracts
(2,755,000 oz)
Total monthly oz silver served (contracts) 304 contracts (1,520,000 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
today, we had  n/a deposit(s) into the dealer account:
total dealer deposit: n/a   oz
we had n.a dealer withdrawals:
total dealer withdrawals: nil oz
we had n/a customer withdrawal(s):
TOTAL CUSTOMER WITHDRAWALS: n/a  oz
We had 0 Customer deposit(s):
***deposits into JPMorgan have stopped  again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: nil  oz
 
 we had n/a adjustment(s)
i
The total number of notices filed today for the OCTOBER. contract month is represented by 19 contract(s) for 95,000 oz. To calculate the number of silver ounces that will stand for delivery in OCTOBER., we take the total number of notices filed for the month so far at 304 x 5,000 oz  = 1,520,000 oz to which we add the difference between the open interest for the front month of OCT. (570) and the number of notices served upon today (19) x 5000 oz equals the number of ounces standing.
 

 

.
 
Thus the INITIAL standings for silver for the OCTOBER contract month:  304 (notices served so far)x 5000 oz  + OI for front month of OCTOBER(570 ) -number of notices served upon today (24)x 5000 oz  equals  4,275,000 oz  of silver standing for the OCTOBER contract month. This is HUGE for this NON active delivery month.
THIS IS NOW THE 6TH STRAIGHT MONTH THAT WE HAVE HAD AN INCREASE IN SILVER OUNCES STANDINGS IMMEDIATELY AFTER FIRST DAY NOTICE. TODAY WE HAD A GAIN OF 70,000 OZ THERE IS AN OBVIOUS SHORTAGE OF SILVER AND THAT IS THE REASON FOR THE QUEUE JUMPING. I AM INFORMED THAT BOTH GOLD AND SILVER ARE BACKWARD IN LONDON FROM SPOT TO DECEMBER. 
 
 
Total dealer silver:  38.824 million (close to record low inventory  
Total number of dealer and customer silver:   219.795 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 2.5 percent to NAV usa funds and Negative 2.6% to NAV for Cdn funds!!!! 
Percentage of fund in gold 63.0%
Percentage of fund in silver:37.0%
cash .+0.0%( Oct 2/2017) 
2. Sprott silver fund (PSLV): STOCK   NAV FALLS TO -0.49% (Oct 2/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.49% to NAV  (Oct 2/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -0.49%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.49%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

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

(courtesy Sprott/GATA)

Sprott Inc. to take control of rival gold holder Central Fund of Canada

by THE CANADIAN PRESS

Posted Oct 2, 2017 8:43 am PDT

Last Updated Oct 2, 2017 at 9:20 am PDT

TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.

Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.

The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.

Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.

In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.

Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.

END

And now the Gold inventory at the GLD

Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES

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.

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Oct 2 /2017/ Inventory rests tonight at 864.65 tonnes
*IN LAST 241 TRADING DAYS: 76.45 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 176TRADING DAYS: A NET  80.98 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY.
*FROM FEB 1/2017: A NET  49.59 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ

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

Oct 2.2017:

Inventory 326.757  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.33%
  • 12 Month MM GOFO
    + 1.57%
  • 30 day trend

end

Major gold/silver trading/commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

end

Strange, the  IMF is concerned that they are seeing the end of banking as bitcoin arises greater tahn 4400.00 which is were gold should be trading.

(courtesy  Tucker/Foundation for Economic Education)

IMF Head Foresees The End Of Banking As Bitcoin Surges Above $4400

Authored by Jeffrey Tucker via The Foundation for Economic Education,

In a remarkably frank talk at a Bank of England conference, the Managing Director of the International Monetary Fund has speculated that Bitcoin and cryptocurrency have as much of a future as the Internet itself.

It could displace central banks, conventional banking, and challenge the monopoly of national monies.  

Christine Lagarde–a Paris native who has held her position at the IMF since 2011–says the only substantial problems with existing cryptocurrency are fixable over time.

In the long run, the technology itself can replace national monies, conventional financial intermediation, and even “puts a question mark on the fractional banking model we know today.”

In a lecture that chastised her colleagues for failing to embrace the future, she warned that “Not so long ago, some experts argued that personal computers would never be adopted, and that tablets would only be used as expensive coffee trays. So I think it may not be wise to dismiss virtual currencies.”

Here are the relevant parts of her paper:

Let us start with virtual currencies. To be clear, this is not about digital payments in existing currencies—through Paypal and other “e-money” providers such as Alipay in China, or M-Pesa in Kenya.

Virtual currencies are in a different category, because they provide their own unit of account and payment systems. These systems allow for peer-to-peer transactions without central clearinghouses, without central banks.

For now, virtual currencies such as Bitcoin pose little or no challenge to the existing order of fiat currencies and central banks. Why? Because they are too volatile, too risky, too energy intensive, and because the underlying technologies are not yet scalable. Many are too opaque for regulators; and some have been hacked.

But many of these are technological challenges that could be addressed over time. Not so long ago, some experts argued that personal computers would never be adopted, and that tablets would only be used as expensive coffee trays. So I think it may not be wise to dismiss virtual currencies.

Better value for money?

For instance, think of countries with weak institutions and unstable national currencies. Instead of adopting the currency of another country—such as the U.S. dollar—some of these economies might see a growing use of virtual currencies. Call it dollarization 2.0.

IMF experience shows that there is a tipping point beyond which coordination around a new currency is exponential. In the Seychelles, for example, dollarization jumped from 20 percent in 2006 to 60 percent in 2008.

And yet, why might citizens hold virtual currencies rather than physical dollars, euros, or sterling? Because it may one day be easier and safer than obtaining paper bills, especially in remote regions. And because virtual currencies could actually become more stable.

For instance, they could be issued one-for-one for dollars, or a stable basket of currencies. Issuance could be fully transparent, governed by a credible, pre-defined rule, an algorithm that can be monitored…or even a “smart rule” that might reflect changing macroeconomic circumstances.

So in many ways, virtual currencies might just give existing currencies and monetary policy a run for their money. The best response by central bankers is to continue running effective monetary policy, while being open to fresh ideas and new demands, as economies evolve.

Better payment services?

For example, consider the growing demand for new payment services in countries where the shared, decentralized service economy is taking off.

This is an economy rooted in peer-to-peer transactions, in frequent, small-value payments, often across borders.

Four dollars for gardening tips from a lady in New Zealand, three euros for an expert translation of a Japanese poem, and 80 pence for a virtual rendering of historic Fleet Street: these payments can be made with credit cards and other forms of e-money. But the charges are relatively high for small-value transactions, especially across borders.

Instead, citizens may one day prefer virtual currencies, since they potentially offer the same cost and convenience as cash—no settlement risks, no clearing delays, no central registration, no intermediary to check accounts and identities. If privately issued virtual currencies remain risky and unstable, citizens may even call on central banks to provide digital forms of legal tender.

So, when the new service economy comes knocking on the Bank of England’s door, will you welcome it inside? Offer it tea—and financial liquidity?

New models of financial intermediation

This brings us to the second leg of our pod journey—new models of financial intermediation.

One possibility is the break-up, or unbundling, of banking services. In the future, we might keep minimal balances for payment services on electronic wallets.

The remaining balances may be kept in mutual funds, or invested in peer-to-peer lending platforms with an edge in big data and artificial intelligence for automatic credit scoring.

This is a world of six-month product development cycles and constant updates, primarily of software, with a huge premium on simple user-interfaces and trusted security. A world where data is king. A world of many new players without imposing branch offices.

Some would argue that this puts a question mark on the fractional banking model we know today, if there are fewer bank deposits and money flows into the economy through new channels.

How would monetary policy be set in this context?

Today’s central banks typically affect asset prices through primary dealers, or big banks, to which they provide liquidity at fixed prices—so-called open-market operations. But if these banks were to become less relevant in the new financial world, and demand for central bank balances were to diminish, could monetary policy transmission remain as effective?END

END

 

THIS IS HOW CHINA MOVES TO A GOLD STANDARD

 

 

We have watched for years as China grew in strength economically, financially and militarily. They have pre positioned themselves by making trade deals, setting up credit facilities and even an alternative clearing system to the West’s “SWIFT”. We also know China has been gobbling up global mine supply of gold for going on 10 years now. As I’ve written in the past, just using the back of a napkin, it can be surmised they now have hoarded 20,000 tons or more compared to the “supposed” 8,133 tons held by the U.S..

It is clear China has meticulously readied themselves to take the role of world leadership from the U.S. but do they really want the responsibility AND burden of issuing the reserve currency? This has always been the question and the answer from logical thinkers is “no”. No, because we (and of course China) have seen the result of the “burdens” that comes along with the privilege of issuing the reserve currency. I must confess, I too did not believe China would desire or even accept the responsibility of reserve currency status. I now believe this thought is mistaken! I will explain shortly.

The announcement of “yuan for oil, convertible into gold” is a game changer http://www.zerohedge.com . China imports about 8 million barrels of oil per day, this works out to 3 billion barrels per year. At $50 per barrel, the oil trade by China is about $150 billion per year. If we compare that to total global production of gold, we find the 80 million ounces produced and priced at $1,300 currently amounts to just over $100 billion. In other words, China consumes more oil (in dollar terms) than ALL the gold produced in the world. Think about this for a moment, at current pricing, just one country uses more oil than the entire world produces money? Does the word “reset” at all come to mind?

Taking just one step back, China has over the last few years imported roughly 2,000 tons of gold per year. If we add India’s imports of roughly 1,000 tons per year, we see combined they are importing more than the 2,500 that are produced. These numbers by themselves illustrate that the gold supply had to come from somewhere …and that “somewhere” can only be from Western vaults. In order to extend and pretend their financial systems and currencies were sound, the West (led by the U.S.) has been bleeding their gold reserves.

Now, getting back to China, here is why I believe they are leading the world BACK to a gold standard! If China imports oil and pays with yuan and offers their yuan “convertible” into gold, how many oil producers will take them up on the conversion? Certainly not 100% and maybe not 50%. Maybe the number is only 25% or even less but that’s not important as “time” will take over. You must ask yourself, how long can China and India import 3,000 tons while the world only produces 2,500 tons? Where will another 1,000 tons (or maybe much more?) of demand be satisfied if oil producer’s newly acquired yuan are converted to gold? The easy answer is “they cannot” …AT CURRENT PRICES!

Here is the interesting part and where I believe I was mistaken in previous thought. China watched as the U.S. was bled of gold leading up to 1971. They also know we have been bleeding gold ever since as a way to camouflage the credit bubble and gross over issuance of dollars. They understand the game and do not want to be placed in the same quandary if the yuan becomes the reserve currency. Instead, I believe China is leading the world toward a de facto gold standard by diverting what was previously “oil for dollars” into “oil for gold”. I believed China might mark gold higher by making a bid and ask price at much higher numbers, instead, facilitating and using natural demand makes so much more sense.

By making yuan convertible into gold, China in essences is creating a demand they know cannot be met by supply … (again) AT CURRENT PRICES! Why would they do this? It is actually so simple I feel dumb for not seeing this previously. China actually kills an entire flock of birds at one time!

First, they are THE largest owner of gold on the planet so they are in fact marking the value of their treasury up by multiples. The higher future price of gold will also make it very difficult if not impossible for other nations to catch up in gold accumulation. By freeing the gold price, China is assuring their place as a world financial leader for many years if not many centuries as that is their mindset. They know quite well, gold is lasting wealth and also the phrase “he who has the gold makes the rules”!

Second, they will in essence be devaluing the yuan versus gold. This will have many benefits and too broad of a subject to breach here but think back to 1934 when the U.S. devalued the dollar versus gold, it creates “inflation” and makes debt easier to pay and service as well as giving a bump to the real economy.

Next and of great importance, moving the world “naturally” to a gold standard means moving away from the dollar standard and all the unfairness that goes with it. A world moving toward gold (China) is a world moving away from the dollar. Surely the dollar will devalue versus the yuan via lower demand from the oil trade and also the lessening of “power” afforded as issuer of the reserve currency. The U.S has enforced the dollar standard by military use for years. Is this action by China “neutral” enough and free market enough to avoid military conflict? We can only hope and pray the U.S. does not kick the table over in reaction.

Lastly and possibly most important, this scheme avoids the main pitfall Bretton Woods fell into, bleeding out treasury gold. If China refuses to convert yuan into treasury gold but instead buys the bullion on open markets they will never have their “De Gaulle moment”. I know what you are thinking, there just isn’t enough gold? And again I will remark “at the current price”. You see, under this scenario China does not care how high the price of gold moves because they are along for the ride. The only thing they care about is not leaking ANY of the gold they have so carefully and methodically have accumulated over these years! Make no mistake, China will not convert yuan into THEIR gold, they will purchase gold on the open market to make the conversion.

Wrapping this up, China can effectively use Mother Nature and free markets to create a gold standard where they are the wealthiest ones at the table. You can be sure China did not dream this up recently, Chairman Mao purportedly said back in 1971 “this is the beginning of the end for the dollar”. He was of course correct and as usual had a view far further into the future than any Westerners at the time. This course of action is logical and can certainly be considered “financial war”. The only question in my mind is whether or not it leads to an actual hot war?

This has been a public article. If you would like to read all of our work and the weekly recorded call for subscribers, please follow this link https://www.jsmineset.com to subscribe.

Standing watch,
Bill Holter
Holter-Sinclair collaboration



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

 
 i) Chinese yuan vs USA dollar/CLOSED/shanghai bourse CLOSED   / HANG SANG CLOSED U

2. Nikkei closed UP 44.40 POINTS OR 0.22%    /USA: YEN FALLS TO 112.44

3. Europe stocks OPENED  GREEN EXCEPT SPAIN   ( /USA dollar index RISES TO  93.49 /Euro DOWN to 1.1749

3b Japan 10 year bond yield: RISES  TO  -+.074%/ 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::  50.30 and Brent: 55.60

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.455%/Italian 10 yr bond yield UP  to 2.155%    

3j Greek 10 year bond yield FALLS TO  : 5.594???  

3k Gold at $1276.00  silver at:16.865(8:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 41/100 in  roubles/dollar) 57.96-

3m oil into the 50 dollar handle for WTI and 575handle 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 112.62 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  0.9702 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1398 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 2.324% early this morning. Thirty year rate  at 2.852% /

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

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

Spanish Stocks, Bonds, Euro Sink After Catalan Referendum Fiasco; S&P Futures Rise

While S&P futures were modestly higher, rising 0.1% in a quiet session in which China, South Korea, India and Hong Kong were closed for holidays, the Euro, Spanish stocks and bonds were broadly lower as Spain faces its worst constitutional crisis in years following a dramatic, violent crackdown on Sunday’s Catalan independence referendum in which 89% of the voters wanted to secede from Spain.

Spain’s IBEX benchmark index IBEX fell as much as 1.3% (down -1.0% latest), vs a 0.3% gain for Stoxx 600, after Catalan separatist leaders signaled they may be moving toward a unilateral declaration of independence as early as this week. Spanish banks were among the biggest fallers, especially the regionally focused Banco de Sabadell, CaixaBank, and Bankinter.

The Euro was one of the worst performers among major currency peers after a the violence-marred vote in Catalonia spurred the regional government to press toward a unilateral declaration of independence.

The tensions also had a clear impact in the bond market, with Spanish premiums climbing over comparable German debt. In addition to hitting Spain’s IBEX index, Catalonia’s independence vote over the weekend amid scenes of unrest and violence has pressured the bonds of Spain and its restive province. Catalonia’s 4.95% of 11/2020 dropped 0.35% Monday morning to 104.747 bid according to Bloomberg, its lowest since Aug. 2016. Spanish government bonds also selling off; 10Y yield has spiked 7bps to 1.68%, off initial high of 1.697%, the highest since July 14. The Bund/bono spread was wider by as much as 8bps.

The tension in Spain “is not a game-changer for the euro, but it is likely to weigh – shifting the narrative away from the political optimism that followed Macron’s victory,” wrote RBC Capital Markets strategists led by Sue Trinh in Hong Kong, referring to President Emmanuel Macron’s victory in the French election earlier this year.

Elsewhere, European equities opened modestly higher after a mixed session for holiday-hit Asian markets, supported by mining sector following a stronger than expected official Chinese PMI and healthcare stocks; the DAX outperforms. Core fixed-income markets rally from lows with large block trade noted in 10y USTs.  The pound dropped against the dollar for the sixth time in seven days amid concerns about the stability of U.K. Prime Minister Theresa May’s government.

Asian stocks were mixed as China, Hong Kong, India and South Korean markets closed for public holidays. The MSCI Asia Pacific Index rose less than 0.1% to 161.20. BHP Billiton Ltd. and miners gained after China reported better-than-expected manufacturing activity. Nissan Motor Co. slumped after suspending car registrations in Japan. Australia’s equity benchmark headed for its biggest daily gain since July after China, its top trading partner, reported an unexpectedly strong mfg PMI print, which rose to a 5 year high, and announced plans to cut the amount of required reserves banks must hold as reserves for certain loans. Nissan dropped as much as 5.4 percent, leading the decline in Japanese carmakers.

“A stronger dollar may spur some fund outflows from the region, dampening any further rally in their equities,” Komsorn Prakobphol, an investment strategist at Tisco Financial Group Pcl, said by phone. “Market activities in the region will be very slow this week with the closure of some major markets, especially in China.”

Elsewhere, the Eurodollar curve steepened and the dollar held an overnight bid as market continues to react to possibility of hawkish Fed appointment of Kevin Warsh. As Bloomberg notes, the Bloomberg Dollar Spot Index started off the last quarter of the year on a strong footing as the market focused on tax reforms in the U.S. and the possibility that the next Federal Reserve Chair comes from the hawkish camp.  As bets rise on Kevin Warsh becoming the next Chair, traders discussed a July article in which he praised President Donald Trump’s policies in being able to “significantly improve the economy’s growth prospects”. In January, Warsh, a former Federal Reserve governor, argued that policy makers were too short-term focused and missed opportunities to raise rates by pursuing what he called a “ride-the-wind” policy.” Even if a hawkish Fed would come as a burden to Trump’s efforts to significantly boost economic growth, optimism among dollar bulls that his administration will finally deliver upon electoral pledges on tax reforms supported the greenback. The dollar gained versus all of its Group-of-10 peers while the index headed for a move above September highs (see chart). The euro was among the main underperformers, though traders discounted unrest in Catalonia as the key factor.

Gold fell and West Texas oil halted gains above $51 a barrel after Baker Hughes data showed the U.S. rig count climbing to 750 last week. The pound dropped against the dollar for the sixth time in seven days amid concerns about the stability of U.K. Prime Minister Theresa May’s government.

In rates, the yield on 10-year Treasuries climbed two basis points to 2.36 percent, the highest in almost 12 weeks. Germany’s 10-year yield advanced one basis point to 0.47 percent. Britain’s 10-year yield gained one basis point to 1.371 percent.

Investors await U.S. manufacturing data for clues on the speed of economic recovery. “September manufacturing PMI data will draw the market’s attention today,” Rabobank strategist Jane Foley said in a note. “scheduled remarks from the Fed’s Kaplan could provide further clues as to the central bank’s thinking. At the end of the week attention will be drawn to the release of the September U.S. labor report.”

Bulletin Headline Summary from RanSquawk

  • European equities trade relatively flat. IBEX the notable underperformer following the fallout of this weekend’s Catalonian referendum
  • The USD continues to broadly out-muscle its major counterparts amid speculation of potential successors to current chair Yellen
  • Looking ahead, highlights include US ISM Manufacturing, ECB’s Praet and Fed’s Kaplan

Market Snapshot

  • S&P 500 futures up 0.14% to 2,519.50
  • VIX Index increases 1% after four days of declines
  • STOXX Europe 600 up 0.3% to 389.06
  • MSCI Asia down 0.05% to 161.09
  • MSCI Asia ex Japan up 0.2% to 530.57
  • Nikkei up 0.2% to 20,400.78
  • Topix down 0.07% to 1,673.62
  • Hang Seng Index up 0.5% to 27,554.30
  • Shanghai Composite up 0.3% to 3,348.94
  • Sensex unchanged at 31,283.72
  • Australia S&P/ASX 200 up 0.8% to 5,729.33
  • Kospi up 0.9% to 2,394.47
  • German 10Y yield rose 1.6 bps to 0.48%
  • Euro down 0.6% to $1.1741
  • Brent Futures down 0.3% to $56.63/bbl
  • Italian 10Y yield fell 1.1 bps to 1.818%
  • Spanish 10Y yield rose 6.6 bps to 1.67%
  • WTI crude down 0.5% to $51.42, Brent retreats 1.7% to $56.58
  • Gold spot down 0.5% to $1,273.35
  • U.S. Dollar Index up 0.6% to 93.59

Top Headline News:

  • Las Vegas Gunman Kills at Least 50, Wounds 200; Trump Tax Plans Punishes Multinationals; Brexit Said to Cost Banks $500m Each
  • Banks poised to channel hundreds—if not thousands—of employees out of the U.K. expect their Brexit bills to reach $500 million or more, according to people with knowledge of firms’ contingency planning
  • National Economic Council Director Gary Cohn said Sunday that the Trump administration’s proposed tax on offshore profits would be in the “10 percent range”
  • On the last page of a nine-page tax plan that calls for slashing business rates, President
    Trump and congressional Republicans proposed a little-noticed,
    brand-new tax that may hit companies like Apple Inc.and Pfizer Inc
  • Nordstrom has struggled to put together the financing for a buyout deal and may not be able to close the deal, the New York Post reports
  • U.K. leisure carrier Monarch filed for insolvency in Britain’s biggest-ever airline collapse, leaving the government to arrange the return of 110,000 tourists and marking the third failure of a major European operator in five months
  • Spain’s benchmark bonds fell to the lowest in almost three months after Catalan separatist leaders signaled they may be moving toward a unilateral declaration of independence
  • Catalans Signal They May Declare Independence Within a Week; Rajoy Says Catalan Ballot Is Void, Defending Police Crackdown
  • President Donald Trump’s admonishment of Secretary of State Rex Tillerson for “wasting his time’’ in seeking negotiations with North Korea further highlighted differences within the administration on how best to get Kim Jong Un to halt his nuclear weapons program
  • On the verge of his scheduled visit to the hurricane-devastated U.S. territory of Puerto Rico, Trump suggested islanders struggling without basic services were lazy, and that the mayor of its largest city was a poor leader and a politically-motivated “ingrate”
  • U.S. manufacturing probably expanded solidly in September after the fastest growth in six years, as steady consumer spending and business investment fuel the nation’s factories. The Institute for Supply Management will issue the data today as well
  • Other American data this week include trade, durable goods and Friday’s September non-farm payrolls report, which may have less predictive power than usual for the economic outlook due to likely distortions from hurricanes that hit from late August
  • After a two-day pause the dollar is adding to gains from last week, when it benefited from speculation President Donald Trump could opt for a Fed boss who might pursue more aggressive policy tightening, not to mention details of the administration’s tax plans

Asia-Pac equity markets were mostly higher on what was a holiday quietened day with China, Hong Kong South Korea and India all shut for holiday. Nonetheless, the positive momentum from last Friday’s US session where the S&P 500 and Nasdaq Composite ended Q3 at fresh record levels rolled over to the region with ASX 200 (+0.8%) outperforming on broad based gains, while a PBoC announcement of targeted RRR cuts from 2018 and Chinese Official Manufacturing PMI at its highest since 2012 added to the optimism due to Australia’s heavy exposure. Nikkei 225 (+0.2%) was also positive, albeit to a  lesser extent as participants digested the latest Tankan survey in which most components beat estimates including a decade-high headline Large Manufacturing Index, although Large All Industry Capex disappointed. 10yr JGBs were lower as they tracked the declines in USTs, while prices were also pressured alongside a positive risk tone and the absence of the BoJ in the market today. Chinese Official Manufacturing PMI (Sep) 52.4 vs. Exp. 51.5 (Prev. 51.7) Highest since 2012. Chinese Non-Manufacturing PMI (Sep) 55.4 (Prev. 53.4) Chinese Caixin Manufacturing PMI (Sep) 51.0 vs. Exp. 51.5 (Prev. 51.6)

PBoC announced it would cut RRR for some banks that meet certain requirements for lending to small business and the agricultural sector beginning in 2018. The PBoC said that a wide majority of China’s banks would be eligible for at least a 50bps cut but reiterated that it will implement a prudent and neutral monetary policy while keeping liquidity basically stable and that the announcement was a structural adjustment and not a shift in monetary policy. The Japanese Tankan Large Manufacturing Index (Q3) printed at 22 vs. Exp. 18 (Prev. 17). Highest since 2007.

Top Asia News

  • Trump Tells Tillerson North Korea Outreach a Waste of Time
  • GLP to Buy Gazeley for Approximately 2.4B Euros
  • Greenko Makes $2.1b Bid for Reliance’s Mumbai Power Business: ET
  • Capital to Buy $200m Stake in India’s InterGlobe Technology: ET
  • Indonesia Open to Extending Freeport’s IUPK Beyond October
  • TSMC Chairman Chang to Retire and Hand Reins to Co-CEOs in June
  • Noble Group Is Said to Get $400 Million Financing From Mercuria
  • Singapore REITs Heat Up as OCBC Taps Stock-Alternative Demand

European equities initially traded marginally higher across the boar . The main outlier has been the Spanish IBEX (-1.0%) amid the growing concerns across Spain and the Catalonia region.
Housing names outperform in the FTSE, as PM May has stated that the government will find an extra GBP 10bln for the help to buy
scheme. Barratt Homes trades up around 4% and leads the UK index, closely followed by easyJet and Ryanair, both benefiting
amid the pending administration from competitor, Monarch Airlines. Spanish bonds underperform amid the aforementioned political unrest across Spain. The Spanish 10y yield gapped up to trade through September’s highs, with 1.75% the next touted resistance, previously rejected in April and June. Bonds trade lower across the board, with the German 10y witnessing a similar upside gap, but finding continued resistance at 0.50%.

Top European News

  • Banks’ Brexit Moving Costs Are Seen Topping $500 Million Each
  • Portuguese Premier Costa Boosted by Gains in Municipal Elections
  • ECB’s Georghadji Says It’s Too Soon to Declare Stimulus Success
  • JPMorgan’s Pinto to Hand Over Leadership of EMEA Operation: FT
  • CaixaBank, Sabadell Most Exposed on Catalan Instability: MS
  • Sampo Agrees to Buy 19.9% of Saxo Bank for EU265 Mln
  • Luxury Sector Expected to See Further M&A Deals, HSBC Says
  • Why Austria May Elect the World’s Youngest Leader: QuickTake Q&A
  • Euro Factories Add Jobs in Struggle to Keep Up With Order Boom

In currencies, the EUR saw selling pressure amid the political unrest seen in Catalonia over the weekend. Further weight has been put on EUR, with US rates now gaining significantly vs. Germany. Despite the bearish concerns for EUR/USD, last week’s lows have not been tested, with Asian trade limited amid various holidays. EUR/USD longs continue to get squeezed, with the pair trading through the long-term trendline support. A break of the August 1.1660 low could further trigger stops, aiding the bearish pressure. The DXY has seen a bid through the session, reacting to the shortlist for the pending Fed Chair position being all but declared. Yellen, Powell, Cohn and Warsh have all been interviewed, with markets indicating that President Trump could sway toward a more hawkish head. A slowdown ahead of September’s highs has seen the current bullish momentum run out of steam, with a break through 93.66 set to be the next target for greenback bulls. Elsewhere, GBP has seen some selling pressure this morning amid an uncertain political backdrop and disappointing data. More specifically, UK manufacturing PMI printed at 55.9 below the expected 56.4 which added to the downbeat sentiment amid weekend reports suggesting a lack of unity in PM May’s Cabinet. This has subsequently lead to some supporters of May calling for her to dismiss Foreign Secretary Johnson. Furthermore, this also comes ahead of this week’s Conservative Party conference which could also help to highlight the divisions in the party.

In commodities, price action has been subdued, finding a slow start to the week as a result of the lack of Asian trade. Forecasts for US shale oil growth and uncertainty around China’s crude imports could possibly add to the recent bullish pressure that has been witnessed across oil markets. Precious Metals continue to be led by the unwind in Gold, as markets are seemingly unwinding geopolitical concerns. Gold trades back inside the March – August range, as silver looks to break through 16.50. Iraq says oil exports average for September was 3.24mln bpd. Libya’s Sharara Oil Field has been closed since late yesterday, according to engineers. Libya’s NOC say that they are making efforts to restore production at their Sharara Oil Field and that there are currently no plans to declare a force majeure at the site.

Looking at the day ahead, we’ve got the September ISM manufacturing print as well as the final September manufacturing PMI and August construction spending readings.

US Event Calendar

  • 9:45am: Markit US Manufacturing PMI, est. 53, prior 53
  • 10am: ISM Manufacturing, est. 58, prior 58.8; Prices Paid, est. 63.5, prior 62; New Orders, prior 60.3; Employment, prior 59.9
  • 10am: Construction Spending MoM, est. 0.4%, prior -0.6%
  • 2pm: Fed’s Kaplan Speaks in El Paso

DB’s Jim Reid concludes the overnight wrap

Welcome to October and Q4. It’s another busy week ahead with Payrolls to look forward to on Friday, although the report is likely to be blown apart by the recent two hurricanes. Continuing to work backwards on the main highlights of the week, Thursday sees the latest ECB minutes and Wednesday the services PMIs/ISM. We also have the UK Conservative Party conference over the next few days which will likely have lots of conflicting headlines on Brexit. Don’t forget that the US budget discussion headlines will never be too far away from your screens. Today sees the crucial manufacturing PMIs/ISMs across the globe. Given how correlated they’ve been to equity performance they are a vital report for the immediate direction of markets. Over the weekend China has already seen a stronger than expected official manufacturing PMI (52.4 vs 51.6 expected and 51.7 last month). This is one of the lower readings in the world at the moment but is still at 5 and a half year highs. The private Caixin equivalent was lower though (51 vs 51.5 expected) with this report having a bias towards smaller companies and exporters. The official non-manufacturing PMI was higher though (55.4 vs 53.4 last month). Staying with China, the PBoC have also announced a targeted RRR cut for some banks in 2018. DB’s Zhiwei Zhang thinks this is as much to offset tightening from macro prudential regulation. China is on holidays this week alongside a few other Asian markets so there is no immediate local reaction, although the Aussie ASX is +0.91% higher seemingly on the China news. Elsewhere the Nikkei is +0.14%, the Euro is -0.34% (see below on Catalonia) and 10 year JGBs and USTs are up 1.5bp and 2bps respectively following on from the sell-off in the latter half of Friday on the Warsh news.

The big news over the weekend was probably the strange and disturbing images in Spain as the “illegal” independence referendum took place to chaotic and sometimes violent scenes. The wires are reporting yesterday’s events as a PR disaster for Spanish PM Rajoy so how he responds will be important. The Catalan government spokesman Jordon Turull has said that around 2 million out of 2.3 million voted for independence (around 5 million eligible to vote). It seems there is a good chance they will declare independence over the next few days which in turn could force Mr Rajoy to use constitutional laws and revoke Catalonia’s autonomy. As a minimum Mr Rajoy’s minority government is going to be severely tested by this constitutional nightmare. The realistic end game is talks, compromise and perhaps more money transferred between Madrid and the Catalonians. However such talks are bound to be more fraught now.

While its hard to see what the immediate macro spill overs could be, its another example that politics is getting more extreme across the world. Even in a year where the edge has been taken off populism by strong growth, we’ve still seen the establishment defeated in France, the AfD do better than expected in Germany, the meteoric rise of the hard left Jeremy Corbyn from the political ashes in the UK, the S5M still neck and neck in the Italian polls and now all the passions behind this vote in Spain. Extreme politics continues to bubble under the surface. Weaker economic times ahead might tip it back into the mainstream at some point.

Talking of politics, before this the big story on Friday was news that Mr Trump and Treasury Secretary Mnuchin had met with former Fed Governor Kevin Warsh (amongst others – see below) to discuss nominating him as the next Fed Chair. The President himself then suggesting late on Friday that a decision could be made in the next 2-3 weeks which is accelerated relative to previous expectations. Warsh is now seemingly one of four front-running candidates (including Yellen, Powell and Cohn) and he would likely be the most market moving as he has been subtly critical of the Fed in recent times. As DB’s Peter Hooper pointed out on Friday, one thread of his criticism has been over the size of the Fed’s balance sheet, suggesting that it poses risk of “fiscal dominance” – potential for fiscal policy to drive monetary policy decisions. Peter also reminds us that one of his clearest comments on monetary policy came in a January article in the WSJ , where he said: “..the Fed should establish an inflation objective of around 1% to 2%, with a band of acceptable outcomes. The current 2.0% inflation target offers false precision.” So with inflation currently in the middle of this range, there is more reason to continue raising rates on this line of thinking. Whether he would be more mainstream if brought into this role is open to conjecture but by him being in the race the prospect of more hawkish policy increases. He would also be expected to be more dovish on financial regulation and it was therefore understandable that higher yields and looser regulation led to Banks being one of the better performers in the US on Friday. Our take is that he is the favourite if Mr Trump sees deregulation as the most important criteria and maybe him being hawkish on rates might take the pressure of the credibility issue of Mr Trump appointing someone who will be seen as someone who would keep rates too low for too long on a political whim.

Before Warsh turned the session round, bonds were enjoying some respite from the recent sell-off after the US PCE miss (0.1% vs 0.2% MoM expected). 10 year Treasuries were trading at around 2.30% after PCE, a bps or so lower on the day and 6bps off the post-tax reform euphoria highs. However we closed at 2.334% after the Warsh news and this morning in Asia we’re trading at 2.353% as we type. This followed a risk-on end to the quarter with the S&P 500 climbing +0.37% on Friday, the Dax +0.98%, and the FTSE and CAC both +0.68%. The peripherals mildly underperformed. 10 years Bunds were down -1.5bps mostly following the inflation miss rather than the Warsh news. All other European 10yrs Govvies were around 1-3bps lower.

Over the course of the week it did feel like some of the momentum was back for the bond bears with the Warsh news coming in the week of more information than perhaps expected on the Republican’s tax plans. The view of our rates strategists are that the chance of unfunded tax cuts has risen after last week and as such their should be some justifiable move to higher yields. On the tax plan, DB’s Luzzetti, Ryan & Weidner published a detailed piece late on Friday (Link) explaining their current thoughts and going into detail on the plans as we know them so far and the legislative challenges ahead. Despite the high level of uncertainly, they use the Fed’s model of the US economy to assess the macroeconomic implications of the Republican tax plan. Assuming tax cuts are enacted in Q1 2018, the full tax plan would lift growth by about 0.4pp by end-2018 and cause the Fed to undertake nearly two additional rate hikes by end-2019. A more modest tax plan in line with our expectations would lift 2018 growth by 0.2pp and cause the Fed to undertake almost one additional rate hike by end-2019. Note that the overall profile of hikes on this model are way above current market expectations.

Before the performance review we move on to this week’s full calendar now. In terms of data, the focus this morning in Europe will be on the final revisions to the September manufacturing PMIs which will also include a first look at the data for the periphery and UK. Also due out is the August unemployment rate for the Euro area. Over in the US this afternoon we’ve got the September ISM manufacturing print as well as the final September manufacturing PMI and August construction spending readings. Tuesday looks to be a fairly quiet day for data with Japan consumer confidence, Euro area PPI and US vehicle sales data the only releases of note. Wednesday kicks off in Japan with the September Nikkei services and composite PMIs. In Europe we’ll receive the remaining September PMIs (services and composite) along with the latest retail sales data for the Euro area. The focus in the US on Wednesday will likely be on the September ADP employment print and ISM non-manufacturing. The final services and composite PMIs are also due. Turning to Thursday, with no data of note in Europe the focus across the pond in the US will be on the latest weekly initial jobless claims print, August trade balance, August factory orders and the final durable and capital goods order revisions for August. We finish the week in Europe on Friday with factory orders data in Germany, trade data in France and house prices data in the UK. The big focus on Friday however will be in the US with the September employment report due out including nonfarm payrolls, average hourly earnings and the unemployment rate. Wholesale inventories and consumer credit data for August round out the releases.

Onto other events, Today sees the UK’s Chancellor of the Exchequer Hammond will address the Conservative Party Conference. In Japan, the BOJ’s quarterly Tankan survey of large manufacturers will be out. In the US, the Fed’s Kaplan will speak. Then onto Tuesday, there will be numerous speakers at the Conservative Party conference, including: UK home secretary Rudd, Trade secretary Fox, Brexit secretary Davis and Foreign secretary Johnson. Then the BOE will publish its record of the Financial policy committee. Over in the US, the Fed’s Powell will speak on regulatory reform. Turning to Wednesday, the EU parliament will vote on a non-binding Brexit resolution, while Mrs Yellen will give opening remarks at a Community banking conference in the US. Then onto Thursday, the ECB’s Praet and Coeure chairs a panel in Frankfurt and the ECB’s governing council members Liikanen and Jazbec will speak. Following on, the ECB will also publish accounts of its September meeting. In the UK, BOE’s Chief economist Haldane will speak on “Central banks engagement with society”. Over in the US, there are four Fed speakers, including: Williams, Harker, Powell and George. Finally, on Friday, BOE’s Chief economist Haldane speaks on “Trust in institutions”. In the US, we round out the week with three more Fed speakers, including: Bostic, Dudley and Kaplan.

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed /Hang Sang CLOSED / The Nikkei closed UP 44.50 POINTS OR 0.22%/Australia’s all ordinaires CLOSED UP 0.81%/Chinese yuan (ONSHORE) closed/Oil DOWN to 50.30 dollars per barrel for WTI and 55.60 for Brent. Stocks in Europe OPENED GREEN .  ALL YUAN FIXINGS CLOSED

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

b) REPORT ON JAPAN

Not good: TEPCO announces that contaminated water has leaked into the Fukushima groundwater due to erroneous gauges..sure!!

(courtesy zerohedge)

TEPCO Admits Contaminated Water Leaked Into Fukushima Groundwater “Due To Erroneous Gauges”

In a revelation that, for some, will dredge up memories of TEPCO’s stunning admission back in 2013 that nearly 300 tonnes of radioactive material had leaked from the ruins of the Fukushima Daiichi nuclear-power plant into the water outside, contaminating virtually the entire Pacific Ocean, officials at the Japanese power company told the Associated Press that contaminated water may have leaked into the soil surrounding the plant after human error caused safety mechanisms to fail.

TEPCO officials said the settings on six of the dozens of wells surrounding the plant’s ruined reactors were accidentally set 70 centimeters below the required levels, briefly causing groundwater at one well to sink below the contaminated water inside in May, possibly allowing radioactive water to leak into the soil.

Fortunately, groundwater samples have shown no abnormal increase in radioactivity and leaks to the outside are unlikely, according to TEPCO spokesman Shinichi Nakakuki.

The problem with the wells – most of which were drilled in April to help pump groundwater, reducing the possibility that it would be exposed to contamination –  was discovered earlier this week while the company was preparing to drill another well. While Tepco maintained several wells around the plant before the disaster, many more have been drilled since to try and stanch the flow of radioactive materials from the plant.

It has been six-and-a-half years since a massive earthquake and tsunami critically damaged the Fukushima-Daiichi nuclear-power plant, located about 200 miles away from Tokyo, triggering the worst nuclear accident since Chernobyl – and the Japanese people are still uncovering new evidence of TEPCO’s dishonesty and incompetence demonstrated during the aftermath of the disaster.

Of course, while the coverup was happening, few in the media dared to entertain suspicions that the company might be acting in bad faith – after all, what serious organization would so brazenly defy the public’s trust, not to mention local laws?

But five years later, those conspiracy theories were transformed into conspiracy facts when TEPCO’s then-President Naomi Hirose admitted last year on NHK that his company intentionally concealed the reactor meltdowns at the Fukushima plant immediately after the storm. The power company didn’t officially admit the meltdowns until more than 2 months after the accident.

“I would say it was a cover-up,” Hirose said during a news conference. “It’s extremely regrettable.”

Earlier this year, TEPCO ignited a public controversy after sharing its plans to start pumping radioactive water contaminated with tritium into the Pacific Ocean – a tactic that has met with vociferous opposition from Japan’s fishing industry.

Tepco has claimed that the radioactive water, pumped from inside the three reactors that melted down following the tsunami, would quickly disperse and not pose a threat to marine life. With the cleanup effort expected to take decades (although we imagine that President Shino Abe would like to accomplish as much as possible before the 2020 Olympics, which will be held in Tokyo), TEPCO has this year dispatched robots into the reactors to try and find the damaged nuclear core material, to mixed results.

Back in February, TEPCO revealed that it had discovered a hole at least one square meter in size beneath the pressure vessel in the plant’s damaged No. 2 reactor, potentially exposing the surrounding area to record-high radiation. Back in 2011, radiation levels of 530 Sieverts per hour had been detected inside the reactor (8 Sieverts is enough to kill a human).

These reports should be particularly dismaying for the thousands of Japanese who’ve begun returning to their homes inside the exclusion zone after the Japanese government ended its subsidy payments to disaster victims earlier this year, effectively forcing many of them to choose between financial hardship or living in a home they believe to be unsafe.

Meanwhile, photos taken earlier this year by journalists who traveled inside the Fukushima exclusion zone – a 20 kilometer perimeter around the plant – depicted a “nuclear nightmare” consisting of eerie ghost villages populated by radioactive wild boars…

 

…not exactly the kind of place we’d want to raise our kids.

end

China announces a cut in their RRR due to begin in 2018. Obviously their economy is not performing like it should

(courtesy zerohedge)

Saturday

Catalans occupy schools and blockade roads as Madrid tries to block the vote on Sunday

(courtesy zerohedge)

Catalans Occupy Schools, Blockade Roads Amid Police/Government Threats, “History’s About To Be Written”

The Spanish ambassador to UK, Carlos Bastarreche, has warned Catalan government’s move will have ‘serious implications’ for European stability…

Europe is watching “a slow-motion, low-cost coup d’etat” by the Catalan government.

 

“If the Catalan government succeed it will be a drama for Europe, starting with the UK, because it will mean that a region can disobey the rule of law.

 

“This is not a dispute between Madrid and Catalonia. On the one side is a democratic Spain and its independent judicial system, and on the other side not Catalonia, but a group of radical nationalists and leftwing extremists in the regional power that are not complying with the law,”

Which perhaps explains how aggressive Spanish authorities are in their efforts to stop any voting taking place.

The Civil Guard, acting on orders from the High Court in Catalonia, entered and shut down 29 database and census applications at the Catalan government’s telecommunications centre on Saturday.

Additionally, as DPA reports, the central authorities in Madrid have shut down the electronic vote-counting system in Catalonia in a further effort to prevent Sunday’s planned vote on independence for the region.

 

By blocking the counting system, Madrid had effectively “cancelled” the referendum which it had already declared illegal, government spokesman Inigo Mendez de Vigo told journalists on Saturday.

 

This “further strike against the illegal proclamation” of the referendum “was carried out within the scope of the law,” the spokesman said.

But as tensions come to a boiling point across Catalonia, separatists are occupying more than 160 schools designated as polling stationson Saturday in an attempt to keep them open ahead of Sunday’s referendum on independence from Spain.

“The history of my country is going to be decided in the next few hours, so there’s no way I’m going to be staying at home in bed and watch it on TV,” said Eduard Elías, 50, a computer science engineer at a school in the Raval neighborhood of Barcelona, adding that he would leave only if the confrontation became violent.

 

“Imagine you would have been offered the chance to fight alongside George Washington,” Mr. Elías said.

 

“At that time, revolution meant weapons and war, but we’re now in the 21st century and we will have our paper ballots instead to bring about real change.”

But, as The FT reports, a top Spanish official in Catalonia said that police had sealed off more than half of the 2,315 designated polling stations.

Spanish national police and their Catalan counterparts have orders to close all polling stations in the region by 6am on Sunday.

Spanish courts have ruled the referendum illegal and the central government in Madrid has voted to stop it.

Pro-independence supporters are hoping the police will be unable or unwilling to physically stop them voting them if they gather in sufficient numbers.

Catalan’s regional government, elected in 2015, has said that it will declare independence within 48 hours of a Yes vote.

This could force the Spanish state to step in and temporarily suspend Catalan autonomy, taking Madrid into uncharted constitutional territory.

During a demonstration in Barcelona on Friday night, regional president Carles Puigdemont said that the Catalan nation had “already won” ahead of Sunday’s vote.

“We have already won, we have won over the fears and the threats of an authoritarian state that didn’t want to let us get this far and tried to make us surrender at the first sign of difficulty,” he said.

 

“On Sunday we have a date with the future, and on Monday we will begin to take that path,” he said, although he gave no indication of how exactly they would go about trying to take independence in the event of a Yes vote.

Sunday’s vote is illegal and a declaration of independence would have little international support. However, a strong turnout and a majority Yes vote could embolden the long-term separatist cause.

Analysts also warn of the danger of increased anti-Madrid sentiment in the region if Spanish authorities crack down hard.

But not everyone supports this ‘illegal’ vote…

*  *  *

Last week, Mises Institute President Jeff Deist took a pro-secessionist, decentralist position in regards to the current secession movement in Catalonia. See “Let Catalonia Decide” from September 19.

In response, many have claimed that the current secession movement should be blocked. Below we present a column by one reader, without modification. We have not edited it for content, and, like all articles, the article should not be interpreted as an official position of the Mises Institute.

A Spanish Libertarian’s View of Catalonian Independence

Authored by Marta Hidalgo via The Mises Institute,

Unfortunately, the nationalists approach history in another temper. For them the past is not a source of information and instruction but an arsenal of weapons for the conduct of war. They search for facts which can be used as pretexts and excuses for their drives for aggression and oppression. If the documents available do not provide such facts, they do not shrink from distorting truth and from falsifying documents.

 

~ Mises, 1944. Omnipotent Government

The Catalan nationalist movement in favour of independence is not driven by an urgent need of freedom to establish a libertarian paradise of free market and low taxes. It does not look for the creation of a smaller and more decentralized government. It is the creation of powerful special interests in the region for the purposes of getting even more power, concessions, grants and money from the rest of Spain, while they control Catalonians even more though indoctrination and the creation of an evil foreign oppressor.Independence is not an end for them, it is a political tool. Independence is not an end for them, it is a political tool.

Spain is divided into Autonomous Communities and today each one has an Estatuto, similar to a constitution, which has given Catalonia, among others, regional autonomy. Catalonia controls its education and healthcare systems and it can impose taxes over events that are not already taxed by the central government or the councils, with some exceptions. Through this, Catalonia currently imposes 17 different taxes, and has one of the communities with the highest income taxes in the country.

Recent attempts at independence have been sought via changes to Catalonia’s estatuto — it’s constitution. The region’s first estatuto was voted on in 1979 by 59.7% of the population with 88.15% voting for approval. After years of claiming separate nationhood, and poor treatment at the hands of Madrid, Cataloinian leaders presented a new estatuto to increase regional independence in 2006. 49.42% of the voters turned out, with 73.9% voting for approval. In 2014, the first illegal referendum on independence took place, paid with taxpayers’ money from all of Spain. 37% of voters turned out, with 80% voting to approve. This means only 30% if potential voters voted for independence.

The Origins of the Separatist Movement 

During the time of the ever-growing Spanish Empire, Spain was made up of kingdoms, but Catalonia was not one of them. It was made up of counties and there was a figure called the Count of Barcelona. The first time there is a mention of the term Cataluña is in the 12th century, when the King Alfonso II acknowledges it in a donation document to his wifeIn 1714, the Bourbons and the House of Austria fought for the throne of Spain. Catalonians sided with the Austrians. There was no such thing as an invasion from Castilla; it was a Succession war, not a Secession War. In fact, one of the nationalist heroes, Rafael Casanova, famously called Barcelona to fight against the Bourbons for their honour, their nation and the freedom of all of Spain.

The Catalonian nationalist movement that rules today in the region started in the 19th century, at the time of the Romantic Era, and received the name of Reinaxença. It was a movement that focused on land and tradition, and its main goal was reviving the Catalan language. One of the founders of this movement, Francisco Cambó, became the leader of the Lliga Regionalista, a political party that existed from 1901 to 1936. After the death of Prat de la Riba in 1917. Cambó was part of the government of Spain in 1918 as Minister. In Cambó’s memoirs, he explained that the nationalist movement was of ridiculously small size when he started, almost like a cult. He explained that, as with all big collective movements, the quick expansion of Catalonian nationalism was due to propaganda based on some exaggerations and some injustices.

The Current Movement 

In 2012, something called Liquidity Fund for Autonomies was created to give communities access to grants and debt at almost 0% interest. Around 33% of this money has gone to Catalonia, even when they claim to be one of the richest, most innovative, civilised, and cosmopolitan regions of Spain. 

One of the biggest cases of political corruption is that of the Pujol family. Jordi Pujol was the president of the Catalan government for 23 years and considered one of the fathers of the Catalan nation. It has been discovered that his family and he have a fortune of about 3.3 billion euros in tax havens. This money was hidden from the taxing authorities, and its origin is being investigated. The court exposed it came from political activities, mainly from illegal payments from business owners in search of a public contracts. Sadly, it is not the only case of this kind.

The idea that the Catalan language is being endangered, continues to be spread by the nationalist movement. The reality is only half of Catalonians have Spanish (i.e., Castilian) as a mother tongue, a fact that has been fought through the immersion system. The law says parents can choose the language they want their children to study in, but it is not being applied, even after favourable rulings from the Supreme Court. Moreover, it is required by law in Catalonia that the name of your business must be in Catalan, or you risk a fine, and that you must speak it if you want a public job as policeman or doctor, even when 98% of the population speaks Spanish.

I want freedom for Catalonia, and if it means they are out of Spain, so be it. But it must be done legally. The Spanish constitution established the country is a democratic and constitutional monarchy, and sovereignty resides in the Spanish people.

More than 90% of Catalonians voted yes to the Spanish constitution. To change the current political system, a referendum should start in the national Congress, with a law approved by the absolute majority in Parliament. Via this system, it would be possible to call a referendum in Catalonia to check the reality of the secessionist claims among the people, but this possibility is not entertained by the nationalists. The Constitution, and the opinion of those who are not in favour of secession, who feel both Spanish and Catalonian, who don’t get involved in the political agenda of Catalonian nationalists as we saw in 2014, must be respected too. But if nationalists carry out that referendum, they might lose; propaganda only gets you so far.

*  *  *

Still, as ABC reports, Barcelona is bracing for what could be the worst civil confrontation since democracy was restored in the 1980s.

“Neither side is listening to the other side anymore,” Carles Castellanos, a 75-year-old retired teacher and prominent political activist, said.

 

“If the Spanish government had properly addressed the requests of Catalonia in the past and not rejected negotiations, it wouldn’t have come this far. Now both sides have become more extreme in their positions.”

end
Catalan leaders have declared that they do have the right to form an independent state. Madrid states no
(courtesy zerohedge)

Catalan Leader: “We Have Earned The Right To Form An Independent State”

Though the results of today’s referendum have yet to be announced, separatists in Catalonia are urging the government to declare independence from Spain, citing today’s violent crackdown as the reason. In a rousing speech following the close of voting, Carles Puigdemont, the leader of the Catalan government, said his citizens have earned the right to form an independent state and that the results of the referendum, to be announced shortly, will be sent to the local parliament for ratification.

Though the central government in Spain declared the refendum illegal, and sent federal Civil Guard and National Police forces to try and suppress the vote in a dramatic crackdown that sent shockwaves around the globe, police only managed to shut down a small sliver of polling stations, allowing many in the region of more than 7 million people which has a larger economy than Portugal, to cast ballots.

In his public remarks, delivered shortly after a speech from Spanish Prime Minister Mariano Rajoy, Puigdemont also said that “with this day of hope and suffering, the citizens of Catalonia have won the right to an independent state in the form a republic.” He also said that the EU could no longer “continue to look the other way” from human rights violations around the referendum, according to a translation in the Guardian.

“The Spanish government has today written a shameful page in its relationship with Catalonia,” adding that there had been abuses of human rights committed by Spanish police.

Puigdemont added that he will keep his pledge to declare independence unilaterally if the “Yes” side wins. A law passed by the Catalan parliament says a win of more than 50% for the “Yes” side will trigger a declaration of independence within 48 hours of the vote regardless of the turnout. He appealed to European leaders, saying the Catalan crisis was “no longer an internal Spanish matter”.

“The Catalan government will transmit to the Catalan Parliament, the seat and expression of the sovereignty of our people, the results of the referendum, so that it can act according to that laid out in the referendum law”, he said.

Spain’s Constitutional Court suspended the regional law governing the independence referendum, but Puigdemont’s government pushed ahead with the vote anyway, as the Associated Press noted. So far, 844 people and 33 police have been injured in the day’s demonstrations.

Meanwhile, Barcelona Mayor Ada Colaucalled for Spanish Prime Minister Mariano Rajoy to resign after the shocking brutality that federal police sent by the government in Madrid demonstrated. Police attacked peaceful demonstrators, punched and kicked voters and dragged some from polling places.

Mayor Ada Colau told a local television station that “Rajoy has been a coward, hiding behind the prosecutors and courts. Today he crossed all the red lines with the police actions against normal people, old people, families who were defending their fundamental rights.”

“It seems obvious to me that Mariano Rajoy should resign.”

Mirroring Puigdemont’s comments, Colau said that Catalans had “earned the right to demand” a proper vote on independence from Spain, adding that “the European Union must take a stand on what has happened in Catalonia.

Rajoy in a speech earlier in the evening declared that the referendum was illegitimate, and that no vote had even taken place, eliciting calls for his resignation from local officials. Government officials from across Europe criticized Rajoy for the violent crackdown.

But perhaps the most amusing criticism came from Venezuelan President Nicolas Maduro who on Sunday slammed Rajoy for trying to halt the referendum, saying the conservative leader was a hypocrite for supporting Venezuela’s opposition while cracking down on dissent at home.

“Who is the dictator?” said Maduro at the start of his hours-long Sunday television show. “Mariano Rajoy has chosen blood, sticks, blows, and repression against a noble people. Our hand goes out to the people of Catalonia. Resist, Catalonia! Latin America admires you,” added Maduro.

Spain has been a vocal critic of Maduro’s regime, accusing him of undermining Venezuela’s democracy and plunging the country’s 30 million people into the direst poverty because of his government’s economic mismanagement. Maduro seized on the images of Spanish riot police bursting into polling stations across Catalonia on Sunday, confiscating ballot boxes and voting papers, as evidence that it is Rajoy who lacks democratic credentials. Venezuela’s opposition responded by accusing Maduro of hypocrisy, saying the Venezuelan leader violently clamped down on four months of protests demanding humanitarian aid, early elections, and respect for the opposition-led Congress.

Wow!! 89% if Catalans vote for independence
(courtesy zerohedge)

The Results Are In: 89% Of Catalans Vote For Independence

Update (6:30 pm ET): In further proof that Spain’s brutal crackdown on today’s Catalan independence referendum only helped bolster the secessionist cause, the regional government announced that voters had overwhelmingly voted in favor of independence, with 89% voting to separate from Spain.

The regional government has promised to officially declare independence within 48 hours.

Even though Spanish authorities ruled that the vote was illegal, Dimitrij Rupel, head of the International Parliamentary delegation on Catalonia’s referendum, said at a news conference in Barcelona on Sunday that the referendum on independence was prepared in agreement with Spanish existing legislation, potentially setting up the regional government for a legal battle.

In a speech earlier this evening, Spanish Prime Minister Mariano Rajoy, who tried to suppress the vote by jailing public officials, shutting down electronic voting systems, ordering police to manually destroy ballots and seal off polling places, declared that no referendum had taken place.

All eyes now turn to Catalan leader Carles Puigdemont as tensions between Spain and its restive state are expected to come to a head, as the prospect of intensifying street violence looms.

Update (5:30 pm ET): Though the results of today’s referendum have yet to be announced, separatists in Catalonia are urging the government to declare independence from Spain, citing today’s violent crackdown as the reason. In a rousing speech following the close of voting, Carles Puigdemont, the leader of the Catalan government, said its citizens had earned the right to form an independent state and said the results of the referendum, which are not yet known, will be sent to the local parliament to be ratified.

Though the central government in Spain declared the refendum illegal, and send federal Civil Guard and National Police forces to try and suppress the vote, police only managed to shut down a small sliver of polling stations, allowing many in the region of more than 7 million people which has a larger economy than Portugal, to cast ballots.

In public remarks delivered following a speech from Spanish Prime Minister Mariano Rajoy, Puigdemont said that “with this day of hope and suffering, the citizens of Catalonia have won the right to an independent state in the form a republic.” He also said that the EU could no longer “continue to look the other way” from human rights violations around the referendum, according to a translation in the Guardian.

“The Spanish government has today written a shameful page in its relationship with Catalonia,” adding that there had been abuses of human rights committed by Spanish police.

Puigdemont added that he will keep his pledge to declare independence unilaterally if the “Yes” side wins. A law passed by the Catalan parliament says a win of more than 50% for the “Yes” side will trigger a declaration of independence within 48 hours of the vote regardless of the turnout. He appealed to European leaders, saying the Catalan crisis was “no longer an internal Spanish matter”.

“The Catalan government will transmit to the Catalan Parliament, the seat and expression of the sovereignty of our people, the results of the referendum, so that it can act according to that laid out in the referendum law”, he said.

Spain’s Constitutional Court suspended the regional law governing the independence referendum, but Puigdemont’s government pushed ahead with the vote anyway, as the Associated Press noted.

So far, 844 people have been injured, including 33 police, in the day’s demonstrations.

Meanwhile, Barcelona Mayor Ada Colaucalled for Spanish Prime Minister Mariano Rajoy to resign after the shocking brutality that federal police sent by the government in Madrid demonstrated. Police attacked peaceful demonstrators, punched and kicked voters and dragged some from polling places.

Mayor Ada Colau told a local television station that “Rajoy has been a coward, hiding behind the prosecutors and courts. Today he crossed all the red lines with the police actions against normal people, old people, families who were defending their fundamental rights.”

“It seems obvious to me that Mariano Rajoy should resign.”

Mirroring Puigdemont’s comments, Colau said that Catalans had “earned the right to demand” a proper vote on independence from Spain, adding that “the European Union must take a stand on what has happened in Catalonia.

Rajoy in a speech earlier in the evening declared that the referendum was illegitimate, and that no vote had even taken place, eliciting calls for his resignation from local officials.

Government officials from across Europe criticized Rajoy for the violent crackdown. But perhaps the most amusing criticism came from Venezuelan President Nicolas Maduro who on Sunday slammed Rajoy for trying to halt the referendum, saying the conservative leader was a hypocrite for supporting Venezuela’s opposition while cracking down on dissent at home.

Spain has been a vocal critic of leftist Maduro, accusing him of undermining Venezuela’s democracy and plunging the country’s 30 million people into the direst poverty because of his government’s economic mismanagement. Maduro seized on the images of Spanish riot police bursting into polling stations across Catalonia on Sunday, confiscating ballot boxes and voting papers, as evidence that it is Rajoy who lacks democratic credentials. Venezuela’s opposition responded by accusing Maduro of hypocrisy, saying the Venezuelan leader violently clamped down on four months of protests demanding humanitarian aid, early elections, and respect for the opposition-led Congress.

* * *

Update (4:15 pm ET): As promised, Barcelona FC played its season opening against Las Palmas to an empty stadium to protest the brutal actions of the Spanish government. In a statement released earlier, the team said it had asked the Professional Football League to postpone the game because of today’s referendum, but it had refused.

Polls across the region have now closed, but because many of the region’s centralized voting systems have been cut off by Spanish authorities, the regional government hasn’t been able to provide estimates for turnout. Counting the votes could take time. However, the Catalan government has said it would declare independence within 48 hours should the vote be in favor of leaving.

…Meanwhile, the number injured in today’s unrest has climbed above 750.

* * *

Update (12:30 pm ET): Clashes between riot police and voters in Barcelona and other towns and cities across Catalonia have left hundreds injured as police beat peaceful demonstrators with sticks and fired rubber bullets into crowds. The clashes, which have been well-documented by journalists and members of the public, are resulting in a massive public embarassment for the government in Madrid, as photos of elderly Catalonian pensioners with blood streaming down their faces have flooded the internet.

According to the Catalonian health ministry, 465 people have been injured during today’s demonstrations, including at least nine local police officers and three Civil Guard officers. Here’s a breakdown via the Guardian: 216 were hurt in Barcelona, 80 in Girona, 64 in Lleida, 53 in Terres de l’Ebre, 27 in Catalunya central and 25 in Tarragona.

Despite the crackdown, the Guardian reports that the majority of polling stations in the province have remained open. Spanish national police have closed down 46 in total (27 in Barcelona, six in Tarragona, six in Girona and seven in Lleida). The Guardia Civil have closed another 46 (14 in Barcelona, 12 in Tarragona, eight in Girona and 12 in Lleida). Catalan police, the Mossos, say they have closed 244 polling stations across Catalonia. In total, 336 polling stations have been shuttered. To put this in context, the Catalan government said more than 2,000 polling stations were set up across the province for the referendum. Meanwhile, the Spanish government said that three people, including one girl, have been arrested for civil disobedience and attacking officers.

The shocking photos have provoked widespread condemnation. In the UK, Labour Party Leader Jeremy Corbyn urged Prime Minister Theresa May to urge Spanish PM Mariano Rajoy to end the crackdown.

A solidarity march with Catalonia is taking place outside the European Union offices in Edinburgh.

All elements of Catalonian society have pitched in to try and protect voters from brutal police tactics. This video emerged showing Catalonian firemen being beaten with sticks by the police.

The Mayor of Barcelona, Ada Colau, has demanded that the government in Madrid put an end to the violence.

According to the FT, police confiscated voting papers and ballot boxes in Barcelona and elsewhere and fired rubber bullets to disperse crowds at the Ramon Llull school in Barcelona, a polling station in the city.. However, elsewhere in Catalonia, voting was carried out peacefully with the 17,000-strong local police force apparently being less interventionist in stopping the polling at certain stations. Since there is no electoral commission overseeing the referendum, little authoritative information was immediately available on the turnout for the vote and how it complied with normal standards. Police were ordered to shut down the region’s electronic vote-counting system earlier in the week, meaning it could be a while before the results start coming in.

* * *

Update (10:30 am ET): The number of people injured in clashes between pro-independence voters and riot police dispatched to the restive region by the government in Madrid has climbed to 337, including at least 11 police officers, the Daily Star reports.

* * *

Update (10 am ET): In a statement condeming the Spanish government’s efforts to stamp out the “free expression” of the Catalan people, FC Barcelona announced that it will be playing today’s match against Las Palmas, its first of the season, behind closed doors after the Professional Football League refused to postpone it.

* * *

Update (9:15 am ET): So far, Catalonian emergency services says that 91 people have been injured in violent clashes between Catalonians trying to vote in today’s “illegal” independence, according to AFP.

Among the injured, 11 are police officers.

* * *

In scenes one would expect to see in Turkey, or some token third-world dictatorship, on Sunday morning Spanish riot police violently cracked down on the scheduled Catalan independence referendum, smashing their way into polling stations in Catalonia in a dramatic quest to shut down the banned Catalan independence referendum, as they fired rubber bullets and brutally beat peaceful people trying to vote for or against independence from a Spanish government, which many commentators this morning have called “fascist.”

According to Reuters, Catalan emergency services said at least 38 people were hurt as a result of police action, although as the footage below shows the final number will likely be orders of magnitude greater.

As Conflicts creator Gissur Simonarson said, “Looking at the footage from Spain. It’s clear the policy got an order to break this up by any means. They are tossing ppl like rag dolls” adding that “The Spanish government has managed to turn me from indifferent/against #CatalanReferendum to a supporter.”

Police burst into the polling station in a town in Girona province minutes before Catalan leader Carles Puigdemont was due to vote there. They smashed glass panels to force open the door as voters, fists in the air, sang the Catalan anthem.

Officers with riot shields jostled with hundreds of voters outside one station at a school in Barcelona as the crowd chanted “We are people of peace!” Armored vans and an ambulance were parked nearby.

The referendum has been declared illegal by Spain’s central government in Madrid, which says the constitution states the country is indivisible and has drafted in thousands of police from around Spain into Catalonia to prevent the vote.

The Catalan regional government had scheduled voting to open at 9 a.m. (0700 GMT) at around 2,300 stations, but Madrid said on Saturday it had shut more than half of them.  Voting started at some sites in the region of 7.5 million people, which has its own language and culture and is an industrial hub with an economy larger than that of Portugal. Leader Puigdemont changed plans and voted at a different station after the police action, the regional government said.

As Reuters adds, people had occupied some stations with the aim of preventing police from locking them down. Organizers smuggled in ballot boxes before dawn and urged voters to use passive resistance against police. In a school used as a polling station in Barcelona, police in riot gear carried out ballot boxes while would-be voters chanted “out with the occupying forces!” and “we will vote!”.

The Catalan government said voters could print out ballot papers at home and lodge them at any polling station not closed down by police.

“I have got up early because my country needs me,” said Eulalia Espinal, 65, a pensioner who started queuing with around 100 others outside one polling station, a Barcelona school, in rain at about 5 a.m. “We don’t know what’s going to happen but we have to be here,” she said.

A minority of around 40 percent of Catalans support independence, polls show, although a majority want to hold a referendum on the issue. A “yes” result is likely in the referendum, given most of those who support independence are expected to cast ballots while most of those against it are not.

Furthermore, the ballot will have no legal status as it has been blocked by Spain’s Constitutional Court and Madrid has the ultimate power under its 1978 charter to suspend the regional government’s authority to rule if it declares independence. In other words, Madrid could have led the referendum pass, declared it illegal, and soon most would forget. Instead, as Simonarson adds, “I’m shocked and disgusted by how Spain has dealt with #CatalanReferendum. If there isn’t a violent response to this, I’ll be shocked.”

Organizers had asked voters to turn out before dawn, hoping for large crowds to be the world’s first image of voting day.

“This is a great opportunity. I’ve waited 80 years for this,” said 92-year-old Ramon Jordana, a former taxi driver waiting to vote in Sant Pere de Torello, a town in the foothills of the Pyrenees and a pro-independence bastion. He had wrapped his wrists in Catalan flags, among 100-150 people who gathered at a local school that had been listed as a polling station, ready to block any police from entering. A tractor also stood guard, though no police had yet arrived.

As reported before, leading up to the referendum Spanish police arrested Catalan officials, seized campaigning leaflets and occupied the Catalan government’s communications hub. But Catalan leaders urged voters to turn out in a peaceful expression of democracy. Families have occupied scores of schools earmarked as voting centers, sleeping overnight in an attempt to prevent police from sealing them off.

“If I can’t vote, I want to turn out in the streets and say sincerely that we want to vote,” said independence supporter Jose Miro, a 60-year-old schools inspector. Only the Catalan police, or Mossos d‘Esquadra, had so far been monitoring polling stations. They are held in affection by Catalans, especially after they hunted down Islamists accused of staging deadly attacks in the region in August.

 

But national police, who have been drafted into Catalonia in their thousands, stepped in to grab ballot boxes and close stations on Sunday once it became clear the regional police was not clearing sites.

Pro-independence Puigdemont originally said that if the “yes” vote won, the Catalan government would declare independence within 48 hours, but regional leaders have since acknowledged Madrid’s crackdown has undermined the vote.

Perhaps now it is time for the liberal press to explain how sometimes democracy also dies in broad daylight. And while we await to see how this dramatic crackdown against democracy ends, here are some more shocking videos of Spain’s brutal crackdown on democracy.

if Catalonia leaves, Spain’s debt to GDP might rise from 99% up to 124%.  And that does not include the debt of the other provinces that Madrid has guaranteed. Without a doubt, Spain would have to declare bankruptcy if Catalonia does not take its share of the debt
(courtesy zerohedge)

Spanish Bond Yields Spike As EU Washes Its Hands Of Catalonia, Puigdemont Demands Spanish Police Withdraw

After an unprecedented 2 million Catalans voted for independence during Sunday’s referendum, larger than the number who voted for independence during a prior independence referendum in November 2014, the will of Catalan people has been made abundantly clear: The regional government of Carles Puigdemont has an overwhelming popular mandate for independence. And in spite of the Madrid government’s brutality, the government in Barcelona hasn’t backed down.

After delivering a rousing speech last night where he called on the EU to intercede with the Spanish government to try and stop the violence being committed by the Civil Guard and the National Police, Puigdemont on Monday demanded that the national police withdraw from the region as his government prepares to declare independence. Puigdemont asserted that the result of the vote is legally binding – despite a Madrid court’s declaration that the referendum was illegal. The regional government is still verifying the final results of the ballot, but according to a preliminary count released early Monday local time, 89% of the 2.3 million Catalans who voted chose independence.

While the government in Barcelona initially said it would declare independence within 48 hours of the ‘yes’ vote being certified by the regional Parliament, Bloomberg is reporting that Puigdemont’s time frame could see him announce the formation of a Catalan republic on Oct. 6, exactly 83 years since his predecessor as regional president, Lluis Companys, declared independence. Companys was eventually executed by the dictatorship of Francisco Franco.

Puigdemont has said the vote will be sent to the Parliament for final ratification shortly.

However, in a sign that the international community is backing away from the secessionist region even as a potentially bloody conflict looms, the European Commission officially washed its hands of the constitutional crisis, saying in a statement released Monday that the issue “is an internal matter for Spain that has to be dealt with in line with the constitutional order of Spain.” In doing so, it ignored the Catalan government’s pleas for recognition.

In the latest suggestion that it unequivocally backs Rajoy, the Commission clarified that, should Catalonia leave Spain, it would also “find itself outside of the European Union.”

Read the EC’s full statement below:

Under the Spanish Constitution, yesterday’s vote in Catalonia was not legal.

For the European Commission, as President Juncker has reiterated repeatedly, this is an internal matter for Spain that has to be dealt with in line with the constitutional order of Spain.

 

We also reiterate the legal position held by this Commission as well as by its predecessors. If a referendum were to be organised in line with the Spanish Constitution it would mean that the territory leaving would find itself outside of the European Union.

 

Beyond the purely legal aspects of this matter, the Commission believes that these are times for unity and stability, not divisiveness and fragmentation.

 

We call on all relevant players to now move very swiftly from confrontation to dialogue. Violence can never be an instrument in politics. We trust the leadership of Prime Minister Mariano Rajoy to manage this difficult process in full respect of the Spanish Constitution and of the fundamental rights of citizens enshrined therein.

Indeed, while opposition figures like Jeremy Corbyn and Nicola Sturgeon (who may look to the Catalans to inspire another Scottish independence referendum) have called on Spain to end the violence, most of the European establishment unsurprisingly has sided with Rajoy.

Add to that list US President Donald Trump, who said he felt Catalonia should remain part of Spain during a press conference with Rajoy last week.

Meanwhile, a Spanish opposition party has called on Rajoy to implement article 155 of the country’s constitution in Catalonia, which allows Madrid to impose direct rule over the formerly autonomous region, according to the Independent.

Albert Rivera, head of the business-friendly Ciudadanos party, which considered Sunday’s referendum to be illegal, told various Spanish media channels on Monday that he believes suspending home rule for Catalonia was necessary to block a possible unilateral declaration of independence and to enable fresh regional elections to be called in Catalonia.

Article 155 of the Spanish constitution describes itself in the legislation as being “for exceptional cases only” such as when a region’s failure to obey laws “gravely damage Spain’s general interest.” It has never been invoked before.

Rivera said the article should be invoked to call for another referendum allowing all Catalans to vote. Given the police crackdown on a small percentage of polling stations – as well as efforts by the Madrid government to suppress the vote that included arresting local politicians, shuttering electronic voting infrastructure, and destroying ballots – only about half of Catalans 5 million eligible voters cast ballots.

“Applying article 155, even if it is only for a few hours, to call elections is the most straightforward and most democratic solution,” Rivera – who was born in Barcelona – said. “That way all the Catalans would get to vote, not just a part.”

The Independent reports that until now, Rajoy and the ruling Partido Popular PP have not discussed article 155 publicly. But that could change this week as Spain attempts to assert its dominance over the prosperous autonomous region, which has its own language and culture – not to mention a larger economy than neighboring Portugal.

Spain’s justice minister has said it will use all means at its disposal to uphold the law in Catalonia, before praising the police for their “exemplary” action in defense of the constitution.

“We have always said that we would use all the force of the law and all the mechanisms that the constitution and laws grant to the government,” Rafael Catala told broadcaster TVE in an interview. While images of police violence provoked alarmed reactions from some European government officials, Catala praised the security force for their “measured” response.

The market reaction is downbeat – in Europe – with Spanish bond yields blowing out to 3-month highs…

 

Spanish stocks are drastically underperforming…

 

And Spanish sovereign default risk has spiked…

 

Which brings to mind the biggest question, what would happen to Spain in case of Catalonia’s secession?

As GEFIRA explainsin terms of the debt sustainability parameters laid down by the Treaty of Maastricht, it’d be the Eurozone debt crisis 2.0.

As Spain now maintains the second year of 3% GDP growth, an even bigger, immediate fiscal threat is looming. After multiple ineffective referendums in the previous years, this time the Catalan government is likely to finally assert independence. What will it look like against the background of the Maastricht financial requirements?

Debt to GDP ratio

The Treaty of Maastricht says it should be 60%. Spain’s debt to GDP ratio was 39% in 2007, but after the financial crisis it gradually rose to 99.4% today. Should Catalonia leave, there are two possible scenarios:

1. Catalonia agrees to take a share of the Spanish total debt, as a “divorce bill”, because after all it benefited from the government spending in Catalonia itself;

 

or

 

2. Catalonia leaves without taking any share of the total Spanish debt.

In the first case, nothing would change, assuming Catalonia would agree to take the share of Spanish debt equal to its share in Spain’s total GDP. In that case, Catalonia accounts roughly for 20% of the Spanish GDP, which means it would take 20% of the Spanish debt. Given that the Spanish debt is right now almost the same size as the Spanish GDP, calculations are rather simple.

Source: Statista.

The second option is rather dramatic. Without Catalonia, Spanish GDP would automatically shrink by 20%, while having to service the entirety of the debt. The debt to GDP percentage ratio would go from 99.4% to 124% overnight.

Deficit to GDP percentage ratio

The Treaty of Maastricht says it should be 3%. Spain has been way outside it since the financial crisis, with a peak at 11% in 2011. For 2016 it was 4.5%.

Here the problem is understanding how much more tax revenue Spain gets from Catalonia than it gives. Catalonia says 11.1€ billion, Spain says 8.5€.

Either way, as the deficit is calculated as expenditure minus revenue, it would be a hole in the revenue of the Spanish government of 8.5 to 11.1€ billion. Last year the deficit/GDP ratio was 4.5%, corresponding to approximately 50€ billion. With the Catalan secession, assuming a 10€ billion hole for simplicity between the estimates of the Spanish and Catalan governments, Spain’s deficit would go up to 60€ billion, while its GDP would shrink by 20%. Result? The deficit to GDP percentage ratio would be 6.7%, back to 2013.

Conclusion

The doomsday scenario would be Spain waking up with a debt equal to 124% of its GDP and growing, due to the 6.7% deficit, which would take another 4-5 years to be contained. The EU’s response to the possibility of Spanish bankruptcy would be predictable: more austerity. It is important to note that while Spain has been growing for the past two years and unemployment is also decreasing, the recipe chosen by the Spanish government, flexibility of the labour market in the form of temporary jobs, has exacerbated income inequality: as the OECD points out that temporary jobs are low-productivity and thus earn low wages; the precariousness of the job prevents improvements in productivity, thus improvement in wages. The poor remains poor, while the rich gets richer and the gap widens.4)

Boosting GDP and employment statistics with mini-jobs is thus masquerading an issue common to other Western countries: the collapse of the middle class.

Catalan independence could prove to be the last nail in the coffin: either Spain goes bankrupt or is forced to implement even more austerity at the risk of facing a revolution from the economically displaced.

*  *  *

And that’s why Madrid doesn’t want to lose Catalonia…

Once before, in October 1934, shortly before the Spanish Civil War (1936 to 1939) broke out, Catalonia had announced its independence from the rest of Spain. This prompted Madrid to sent the army to Barcelona.

*  *  *

We suspect The EU may get more involved if this risk premia blowout starts to spread.

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

 Great reason for gold to be hammered today:  Iran deploys tanks on the border of Iraqi Kurdistan
(courtesy zero hedge)

Iran Deploys Tanks To Border With Iraqi Kurdistan

Days before last week’s Kurdistan referendum, Iran took steps to isolate and punish the Iraqi Kurdistan region and the government in Erbil (KRG). This included closing Iranian airspace to northern Iraq’s two international airports and sending Iran’s elite Revolutionary Guard forces to conduct drills along the northwest border with Kurdistan, but in the early hours of Monday Iran dramatically escalated its military build-up along the border by deploying dozens of tanks supported by artillery – this according to a Kurdish government official and Iranian state television.

The Kurdish official confirmed the tank build-up, saying “The tanks can be seen from the Kurdish side.”And Iranian state TV on Saturday indicated that Iran and Iraq would cooperate in joint drills and the establishment of heightened border security, to the point that Iran would “receive Iraqi forces that are to be stationed at border posts”.

Iranian government officials had warned just prior to last week’s referendum that, “The republic of Iran has opened its legitimate border gates on the premise of the consent of the federal government of the Iraqi state. If such an event [referendum] happens, these border gates from the perspective of the Islamic Republic of Iran would lose its legitimacy.” It appears Iran is now making good on its threats as it worries that an independent Kurdistan at its border would be a destabilizing force concerning Iran’s own sizable Kurdish minority.

Last week multiple videos and images surfaced in Iranian social media purporting to show Iranian state police and security forces deploying to the Kurdish towns in Iran’s north. Multiple reports indicate pro-Kurdistan demonstrations took place in various Kurdish Iranian towns in response to the Erbil government’s referendum, something strictly banned and thus a rarity in the Islamic Republic. Iran’s Kurdish population numbers over 6 million out of a total population of about 80 million people – most of which are concentrated in a northwest strip of land which runs along the border with Iraqi Kurdistan as well as in a small northeast pocket.

According to Iraqi Kurdish network Rudaw English, Iran launched a major crackdown with dozens of arrests reported in Iran’s northwest region in the days following the referendum:

Two Iranian Kurdish political parties and a human rights watchdog all reported “scores” of arrests after thousands took to the streets in Kurdish cities of Iran chanting Biji Kurdistan, long live Kurdistan, and waving Kurdistan flags to celebrate the success of the independence referendum next door. Flying the Kurdistan flag and singing the national anthem are forbidden in Iran.

Iranian intelligence and security forces have set up a joint command center “for the purpose of identifying and arresting the organizers of the demonstrations,” the Democratic Party of Iranian Kurdistan (PDKI) stated. They are reportedly analyzing video footage of the gatherings.

Furthermore it appears that Iranian TV sent a message to its broader Kurdish population indicating that all activities were being monitored by authorities:

The Kurdistan Human Rights Network (KHRN) reported that Iranian police were closely monitoring the demonstrations that attracted rare attention in the country. “Iranian state television on Tuesday acknowledged the rallies, a rarity in the Islamic Republic broadcast,” the group stated.

As we previously explained, the Kurdish referendum pushed Iraq into the arms of Iran when the relationship between the Iraqi Prime Minister Haidar Abadi and Iranian officials was at its lowest level. But after the KRG’s insistence on pushing forward with moves toward independence, Abadi sees in Iran the only sincere partner to count on, and can rely on the Iranian Army and Revolutionary Guards Corps (IRGC) in the case of any military escalation against Kurdistan, particularly in the disputed Iraqi cities, with Kirkuk at the top of the list.


Map source: Iran Times

Baghdad is confident that Iraqi Kurdistan President Masoud Barzani didn’t take this step without a blessing from the Americans, despite official US opposition to the referendum. It seems Washington decided to swap its relationship with Baghdad with that of Erbil because it won’t be able to support both at the same time.

Supporting Erbil is more attractive to the US and its regional allies (particularly Saudi Arabia), in the hope that the Kurdish Iraqi move would trigger the appetite of the Kurdish Iranians (and the Syrian Kurds who are already on this same path). If this happens and we observe an uprising in Iran, which the Saudis would certainly support, the Iranian economy and that of the government of Baghdad will both be under severe pressure.

Iran supported Barzani in 2014 and provided him with weapons (at a time when the US was denying any support to Iraq, during the 6 months after the fall of Mosul in 2014), but it is today in an undeclared war against Erbil, fully behind Baghdad’s measures and supporting future escalation and punitive steps.

6 .GLOBAL ISSUES

Canada/Edmonton

Edmonton has been a hub for new Muslim migrants for a year:

(courtesy zerohedge)

 

“Act Of Terrorism”: ISIS Attacker Stabs Cop, Rams Into Pedestrian Crowd In Edmonton

In an incident that’s being investigated as a possible “act of terrorism”, an unnamed suspect stabbed an Edmonton police constable late Saturday night before trying to ram a truck into a crowd of pedestrians while being chased by police through downtown Edmonton Saturday night, according to the Globe and Mail.

Ultimately, four pedestrians and the officer were injured when the U-Haul truck being driven by the suspect struck them before speeding away down Jasper Avenue, Edmonton police chief Rod Knetch told reporters. The officer is not in critical condition. Knetch could not provide more details about the condition of the pedestrians. The suspect is in custody and appears to have acted alone, the police chief said.

Knetch said an Islamic State flag was found inside the suspect’s vehicle, had been seized and was part of the investigation, which now involves the the RCMP-led counterterrorism unit the Integrated National Security Enforcement Team. Knecht said the incidents are being investigated “as an act of terror” and that the attacker acted alone.

The incident happened at 8:15 pm local time near Commonwealth Stadium, when the suspect slammed his Chevy Malibu into a police barricade outside an Edmonton Eskimos-Blue Bombers game, throwing an officer 15 feet into the air. The game was designated military appreciation night.

The driver got out of the Malibu holding a knife and stabbed the officer several times, Knetch said.

The suspect then fled on foot, and, after searching the Malibu, police found identification papers for the suspect – a man in his 30s. Later Saturday night, a police officer stopped a white U-Haul truck at a police checkpoint while the manhunt was still happening, and recognized that the driver’s ID bore the same name as the suspect.

The U-Haul driver sped off, leading police on a high-speed chase through downtown Edmonton, which was packed with crowds enjoying a Saturday night on the town. During the chase, the suspect tried to hit pedestrians as he passed by crosswalks and alleyways, before swerving into Jasper Avenue in downtown Edmonton where the truck overturned, and skidded into four people.

According to the Globe and Mail, Austin Elgie, manager of The Pint bar just west of the downtown core, witnessed the truck hitting the crowd.

“We were just standing out front here and basically a U-Haul was heading north down 109th Street and peeled into this smoking alley here where people were having a smoke,” he said.

 

“There was like 10 cop cars following him.

Witness Kim Anderson told the Edmonton Sun: “There were people flying and everything. I’m shocked – I just see people flying.”


Elgie said after the vehicle passed by the steps of the bar, the view was obscured by the corner of the building. But he said it hit a man who was a bar patron.

“I have a registered nurse on my bar team and I grabbed her and had her look after the guy until the ambulance came.”

 

“He was breathing and we got him in the ambulance and he was still breathing.”

Witnesses told local media they saw a suspect being pulled from the vehicle through the broken windshield and then placed in handcuffs.

Alberta Premier Rachel Notley tweeted her well-wishes to the injured officer.

In a statement issued Sunday morning, Prime Minister Justin Trudeau also condemned the violence in Edmonton as a “terrorist attack”.

“The Government of Canada and Canadians stand with the people of Edmonton after the terrorist attack on Saturday that sent an Edmonton Police Service officer to hospital and injured a number of innocent people who were out to cheer on their football team and to enjoy an evening in their city. I am deeply concerned and outraged by this tragedy,” he said.

“”We cannot – and will not – let violent extremism take root in our communities. We know that Canada’s strength comes from our diversity, and we will not be cowed by those who seek to divide us or promote fear. Edmonton is a strong and resilient city, and I am confident that its citizens will support one another to overcome this tragic event.”

end

7. OIL ISSUES

8. EMERGING MARKET

VENEZUELA

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

Euro/USA   1.1749 DOWN .0056/ SPAIN VS CATALONIA/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 112.62 UP 0.445(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 1.3285 DOWN .0097 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.2503 UP .0041 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS MONDAY morning in Europe, the Euro FELL by 56 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1749; / Last night the Shanghai composite CLOSED      / Hang Sang  CLOSED   /AUSTRALIA  CLOSED UP 0.81% / EUROPEAN BOURSES OPENED ALL GREEN EXCEPT SPAIN 

The NIKKEI: this MONDAY morning CLOSED UP 44.50 POINTS OR 0.22%  

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

2/ CHINESE BOURSES / : Hang Sang CLOSED U  / SHANGHAI CLOSED    /Australia BOURSE CLOSED UP 0.81% /Nikkei (Japan)CLOSED UP 44.40 POINTS OR 0.22%   / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1274.80

silver:$16.65

Early MONDAY morning USA 10 year bond yield:  2.324% !!! DOWN 1   IN POINTS from FRIDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield  2.852, DOWN 0 IN BASIS POINTS  from FRIDAY night. (POLICY FED ERROR)

USA dollar index early MONDAY morning: 93.49 UP  41 CENT(S) from FRIDAY’s close. 

This ends early morning numbers  MONDAY MORNING

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And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield: 2.428% UP 4  in basis point(s) yield from FRIDAY 

JAPANESE BOND YIELD: +.075%  UP  1/ 2  in   basis point yield from THURSDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.694% UP 9  IN basis point yield from FRIDAY 

ITALIAN 10 YR BOND YIELD: 2.156 UP 4 POINTS  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 46 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.451% DOWN 1  IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR MONDAY

Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/400 PM 

Euro/USA 1.17353 DOWN .0070 (Euro DOWN 70 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.75 DOWN 0.586(Yen DOWN 57  basis points/ 

Great Britain/USA 1.3277 DOWN  0.001112( POUND DOWN111 BASIS POINTS)

USA/Canada 1.2513 UP .0056(Canadian dollar DOWN 56 basis points AS OIL FELL TO $50.54

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This afternoon, the Euro was FELL 70 basis points to trade at 1.1753

The Yen FELL to 112.75 for a LOSS of 57  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 111  basis points, trading at 1.3277/ 

The Canadian dollar FELL by 56 basis points to 1.2513,  WITH WTI OIL FALLING TO :  $50.54

The USA/Yuan closed 
the 10 yr Japanese bond yield closed at +.075 UP 1/2%   IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 3  IN basis points from FRIDAY at 2.340% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.872 UP 1  in basis points on the day /

Your closing USA dollar index, 93.63  UP 56 CENT(S)  ON THE DAY/400 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 MONDAY: 1:00 PM EST

London:  CLOSED UP  66.08 POINTS OR 0.96%
German Dax :CLOSED UP 73,79 POINTS OR 0.58%
Paris Cac  CLOSED UP 20.63 POINTS OR 0.39% 
Spain IBEX CLOSED DOWN 125.80 POINTS OR 1.27%

Italian MIB: CLOSED UP 114.87 POINTS OR 0.51% 

The Dow closed UP 40.19 OR 0.68%

NASDAQ WAS closed UP 20.76  POINTS OR 0.32%  4.00 PM EST

WTI Oil price;  $50,54  1:00 pm; 

Brent Oil: 56.04 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.90 UP 35/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 35 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO  +0.451%  FOR THE 10 YR BOND  4.PM EST EST

END

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

Closing Price for Oil, 4 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$50.54

BRENT: $56.04

USA 10 YR BOND YIELD: 2.34%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.873% 

EURO/USA DOLLAR CROSS:  1.17353 DOWN .0070

USA/JAPANESE YEN:112.75    UP  0.568

USA DOLLAR INDEX: 93.63  UP 56  cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3277 : down 111 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2513 UP 56 BASIS pts 

German 10 yr bond yield at 5 pm: +0.451%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Small Cap Stocks Surge To ‘Most Overbought’ In 20 Years, Bonds Shrug

The largest secession movement since Brexit and the biggest mass shooting in American history… buy stocks!!

Spain felt the pain…

 

The US market breaking helped to get things going early on…

 

Futures show the buying binge at Sunday’s open – amid Catalonia’s chaos – and then the debacle around the US open (as the market broke after VIX snapped to 10)…

Record Highs for everyone… you get a record high, you get a record high, you get a record high, we all get a record high

Small Caps continue to surge (Trannies underperformed but was also panic bid into the close), Dow surged 150 points to top 22,500 (and the S&P 500 is just 70 points below Goldman Sachs’ 2019 year-end target!!)

 

Small Caps are the most overbought since October 1997… (up 23 of the last 28 days and up 7 in a row)

 

Which saw Small Caps drop’n’pop before crashing 38% in 1998…

 

And do not worry because it’s all based on fundamentals…

 

But it is noteworthy that ‘high-tax’ companies dramatically underperformed the market…

 

Value stocks dominated growth (especially after Europe closed)…

 

Gunmaker stocks surged on the day…

 

GM spiked to post-bankruptcy record highs (as Tesla tumbled) on news that GM will launch at least 23 vehicles by 2023…

 

FANG Stocks followed the same path as last Monday, selling off notably (as value dominated growth)

 

Netflix was a big loser among the FANG Stocks…

 

But banks underperformed the market, catching down modestly to the flatter yield curve…

 

From the European open, it seems a bid for bonds and stocks appeared….

 

Treasuries ended the day unchanged after some early weakness (in Asia) and strength (in Europe)…

 

The dollar index rebounded to Thursday’s highs on EUR weakness after Catalonia…

 

Gold limped lower once again to its lowest since Aug 16th as Bitcoin surged back above $4400 (its highest since Sept 8th)…

 

WTI had a tough day on a surge in production from various OPEC members coming back online…

 

Finally remember the ‘curse of 7’ for Q4…

As Bloomberg reports, some of the biggest fourth-quarter declines in the Dow Jones Industrial Average have occurred in years ending in seven, the worst being in a Black-Monday plagued 1987.

*  *  *
The venerable Art Cashin summed up today’s market perfectly… “I’ve been doing this for 50 years, and I’ve never seen anything quite like it”

 

END

Our beloved MichaelSnyder is running for Congress as a Republican We wish him well…

Michael stalks about Trump’s tax plan.  He is in favour of 0 income tax and starving the beast.

 

(courtesy Michael Snyder)

Welcome To The Hunger Games: Trump’s Tax Plan To Unleash Battle Royal Among D.C. Lobbyists

Authored by Michael Snyder via The Economic Collapse blog,

Are you ready for mass chaos in Washington?

There are lobbyists for just about every cause that you can possibly imagine, and they are always working hard to influence members of Congress on their particular issues.  But when you are talking about a major tax reform bill, that is something that virtually every single lobbyist in the entire city will want to be involved in.  Our tax code is over two million words long, and the regulations are over seven million words long, and any changes to our immensely complex system could have absolutely enormous implications.  There will be winners and there will be losers with any piece of legislation, and lobbyists will zealously fight to defend the turf belonging to their particular clients.  Often lobbyists from different sides will literally be pitted directly against one another, and it won’t be pretty.

In fact, one analyst that works for Cowen Washington Research Group says that we could soon be watching “the corporate hunger games”

Almost every industry, special interest, and consumer group has an interest in the tax code, especially if the package ends up being as ambitious as Trump and Republican leaders want it to be. Chris Krueger, an analyst at Cowen Washington Research Group, told Business Insider that the battle over which loopholes to keep and which to throw out could get nasty.

 

“Welcome tribunes to the corporate hunger games!” Kruger said in an email.

 

“Only one-sixth of lobbyists were involved with health care (give or take — assuming it is one-sixth of economy). Six-sixths of lobbyists are involved in taxes.”

There is so much at stake, and if the Republicans are able to get something passed it probably won’t look much like the plan that Trump originally proposed.  But it is so important to do something, because today Americans spend more on taxes than they will on food, clothing, and housing combined.  That is morally wrong, and we desperately need tax relief.

Trump’s tax plan would nearly double the standard deduction, and that would be a wonderful thing.  It would provide instant tax relief to working class Americans, and that is something that I would greatly applaud.

Trump’s tax plan would also greatly reduce the tax rate for corporations.  Our big corporations certainly don’t need the help, but we do want to get our rate more in line with the rest of the planet.  Because our corporate tax rate is one of the highest in the world, it actually encourages companies to set up shop some place else.  Being more competitive with the rest of the world would likely mean more jobs for the American people.

Trump’s tax plan would also reduce the number of tax brackets for individuals.  Instead of seven, now there would just be three tax brackets of 12 percent, 25 percent and 35 percent.To me, those rates are way too high, but of course I would like to eliminate the individual income tax entirely.

Many are criticizing Trump’s plan for proposing to raise at least a trillion dollars over the next decade by getting rid of the deduction for state and local income taxes. For those that live in very high tax states such as California, that deduction is a really big deal

High-income Californians, for instance, pay as much as 13.3 per cent of their income to the state in addition to their federal taxes. New Yorkers can pay up to 8.82 per cent.

 

Just seven U.S. states have no personal income taxes, including Texas, Florida and Nevada.

Hopefully the Republicans can pass some sort of tax reform in the short-term, because the status quo is definitely not acceptable.

When the income tax was first introduced in 1913, the vast majority of taxpayers were being taxed at a rate of just one percent.  The following comes from Politifact

The 1913 law imposed a tax of 1 percent on income up to $20,000, for both individual and joint filers. However, exemptions from the tax — the first $3,000 of income for individuals and the first $4,000 for joint filers — meant “virtually all middle-class Americans” were excused from paying, according to W. Elliot Brownlee’s book, Federal Taxation in America.

 

The law also put in place a graduated surtax on incomes above $20,000; the highest rate paid, 7 percent, applied to Americans making more than $500,000 (about $11.4 million in 2011 dollars).

Today, Americans are being taxed into oblivion.  It has been reported that we spend more than 6 billion hours a year on our taxes, and I once wrote an article detailing 97 different ways that various levels of government extract revenue from all of us.

Every year government just gets bigger and bigger on the federal, state and local levels.  And the bigger government gets, the more oppressive it tends to become.

Personally, I would love to start starving the beast that the left has created, and a great way to do that would be to completely eliminate the federal income tax.

A lot of people could not even imagine a world without a federal income tax.  But the truth is that our country once thrived under such a system.  In fact, the greatest period of economic growth in U.S. history was between 1872 and 1913 when there was no income tax at all.

And we could do it again.  Today, the individual income tax only accounts for about 46 percent of all federal revenue, and if we reduced the federal government to a size that our founders would have wanted, we would be more than okay.

But even if we can’t greatly reduce the size of the federal government in the short-term, we can at least go to a very basic flat tax or a fair tax, and both of those systems would be far superior to what we have today.

If we can’t get a flat tax or a fair tax right now, we should at least try to dramatically reduce tax rates and simplify the tax code as much as humanly possible.

But if we do get a short-term victory, the battle is definitely not over.  In the long-term, we need to be very clear that our goal should be to abolish the income tax, the IRS and the Federal Reserve entirely.  Anything short of that is not good enough.

*  *  *

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

end

Great reason for the  Dow to rise and gold hammered  again.

as we promised you…

(courtesy zerohedge

Gov. Rick Scott Declares State Of Emergency As 100,000s Of Puerto Ricans Flee To Florida

As mayors of cities with large Puerto Rican populations continue to advocate for federal assistance to help with the resettlement of hundreds of thousands of Puerto Ricans who are expected to temporarily seek shelter with friends and families in the US, Florida Gov. Rick Scott has declared a state of emergency in Florida, allowing state agencies to take extraordinary measures to assist families that will soon be arriving in droves to cities like Orlando and Miami, both of which feature large Puerto Rican populations.

The Orlando Sentinel reports that Scott announced that disaster relief centers will be set up at Orlando International Airport and in Miami to help those seeking refuge in Florida.

“Puerto Rico is absolutely devastated and so many families have lost everything,” Scott said in a released statement. “Our goal is to make sure that while [Puerto Rican] Governor [Ricardo] Rosselló is working to rebuild Puerto Rico, any families displaced by Maria that come to Florida are welcomed and offered every available resource from the state.”

The relief center at OIA, and two others at Miami International Airport and the Port of Miami, open Tuesday, according to a release from Scott’s office, just days after Puerto Rican airports reopened following the devastation caused by Hurricane Maria.

“These Disaster Relief Centers will help Puerto Ricans coming into Florida get matched with all the available state resources they may need and ensure that as families come into Florida, they are given the tools they need to work and provide their children with a great education,” Scott stated.

Scott’s emergency order will allow state agencies braod autonomy to waive regulations and do whatever is necessary to help Puerto Ricans. Importantly, it could also help bring more federal funding to help the state cope with aid efforts.

Hurricane Maria hit Puerto Rico on Sept. 20 as a Category 4 storm, wreaking destruction across the island and knocking out power and water. Most of the island remains without electricity and potable water 12 days after the storm hit.

State lawmakers have said they expect at least 100,000 Puerto Ricans to flee to Florida because of Maria, forcing the state to step up its education, housing and job-placement offerings. It’s expected that some of those displaced by the storm could resettle permanently, as the reconstruction effort in Puerto Rico is expected to take months, if not years.

State Rep. Carlos Guillermo Smith, D-Orlando, said the Legislature should hold a special session, as he estimates hundreds of thousands of Puerto Ricans are coming to Florida. The 2018 regular session starts in January.

“FL needs 2 deal w/humanitarian crisis + over 100K Boricuas who’ll seek refuge here right now, not in Jan.,” he tweeted.

We now wait to hear from New York Gov. Andrew Cuomo and New York City Mayor Bill De Blasio. NYC officials have said more than 100,000 Puerto Ricans could arrive in NYC alone.

Well that about does it for tonight

I will see you TUESDAY night. MY COMMENTARY WILL BE SHORTER THAN NORMAL ON TUESDAY THROUGH TO FRIDAY.  HOWEVER I WILL PROVIDE THE ESSENTIALS. YOU MAY RECEIVE THE COMMENTARY VERY LATE IN THE EVENING

HARVEY

Harvey.

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