GOLD: $1272.10 DOWN $1.60
Silver: $16.60 DOWN 10 CENT(S)
Closing access prices:
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $n/a DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $n/a
PREMIUM FIRST FIX: $8.24 (premiums getting larger)
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)
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:
NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 199 NOTICE(S) FOR 19,900 OZ.
TOTAL NOTICES SO FAR: 2314 FOR 231,400 OZ (7.197 TONNES)
31 NOTICES FILED TODAY FOR
Total number of notices filed so far this month: 370 for 1,850,000 oz
Let us have a look at the data for today
In silver, the total open interest SURPRISINGLY ROSE BY A STRONG 2049 contracts from 183,494 UP TO 185,543 WITH RESPECT TO YESTERDAY’S TRADING (DOWN 1 CENT ). THE CROOKS TRIED TO COVER AS MUCH OF THEIR SILVER SHORTS AS POSSIBLE YESTERDAY BUT IT LOOKS LIKE THEY FAILED AGAIN..SO THEY TRIED ANOTHER RAID TODAY
RESULT: A GOOD SIZED RISE IN OI COMEX DESPITE THE 1 CENT PRICE FALL AND CONSTANT TORMENT. IT SURE LOOKS LIKE OUR BANKERS FAILED AGAIN IN THEIR ATTEMPT TO COVER THEIR MASSIVE SILVER SHORTFALL SO ANOTHER RAID WAS ORCHESTRATED
In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.9127BILLION TO BE EXACT or 132% 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 MUCH LARGER THAN EXPECTED 4026 CONTRACTS DESPITE THE TINY RISE in price of gold ($0.10 ) . The new OI for the gold complex rests at 521,101. 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. OUR BANKER FRIENDS WERE QUITE SUCCESSFUL IN COVERING MORE OF THEIR GOLD SHORTS.
Result: A GOOD SIZED DECREASE IN OI WITH THE SLIGHT RISE IN PRICE IN GOLD ($0.10)
we had: 199 notice(s) filed upon for 19,900 oz of gold.
With respect to our two criminal funds, the GLD and the SLV:
Tonight , ANOTHER BIG CHANGE in gold inventory at the GLD/A WITHDRAWAL OF 3.24 TONNES AND THIS GOLD IS HEADING STRAIGHT FOR SHANGHAI
Inventory rests tonight: 851.06 tonnes.
Today: ANOTHER BIG change in inventory: ANOTHER WITHDRAWAL OF 944,000
INVENTORY RESTS AT 325.671 MILLION OZ
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver SURPRISINGLY ROSE BY A STRONG 2049 contracts from 183,494 UP TO 185,543(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . IT SEEMS THAT OUR BANKERS WERE AGAIN UNSUCCESSFUL IN COVERING THEIR SILVER 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 INCREASE IN SILVER OI AT THE COMEX DESPITE THE FALL IN PRICE OF 1 CENT IN YESTERDAY’S TRADING. EXPECT CONSTANT TORMENT FOR THE REST OF THE WEEK. OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS
2.a) The Shanghai and London gold fix report
2 b) Gold/silver trading overnight Europe, Goldcore
and in NY: Bloomberg
3. ASIAN AFFAIRS
)Late WEDNESDAY night/THURSDAY morning: Shanghai closed /Hang Sang CLOSED / The Nikkei closed UP 1.90 POINTS OR 0.01%/Australia’s all ordinaires CLOSED UP 0.01%/Chinese yuan (ONSHORE) closed/Oil UP to 50.51 dollars per barrel for WTI and 56.54 for Brent. Stocks in Europe OPENED GREEN EXCEPT GERMANY . ALL YUAN FIXINGS CLOSED
3a)THAILAND/SOUTH KOREA/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 MUCH LARGER THAN EXPECTED 4026 CONTRACTS DOWN to an OI level of 521,101 DESPITE THE TINY RISE IN THE PRICE OF GOLD ($0.10 RISE IN YESTERDAY’S TRADING). OUR BANKER FRIENDS WERE QUITE SUCCESSFUL IN THEIR ATTEMPT TO COVER SOME OF THEIR HUGE GOLD SHORTFALL. 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 HAVE NOW ENTERED GOLDEN WEEK WHERE ALL OF CHINA IS OFF AND AS SUCH EXPECT CONSTANT TORMENT FOR THE REST OF THE WEEK.
Result: a LARGER SIZED open interest DECREASE WITH THE SMALL SIZED RISE IN THE PRICE OF GOLD ($0.10) . BANKERS SUCCESSFUL IN THEIR ATTEMPT TO COVER THEIR GOLD SHORTFALL
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 55 contracts DOWN to 434 contracts. We had 75 notices filed yesterday so we SURPRISINGLY GAINED 20 contracts or 2,000 oz will stand for delivery at the comex and 0 EFP notices were given.
The November contract saw A loss OF 108 contracts down to 1831.
The very big active December contract month saw it’s OI LOSS OF 4518 contracts DOWN to 411,557.
We had 199 notice(s) filed upon today for 19,900 oz
VOLUME FOR TODAY (PRELIMINARY) 221,538
CONFIRMED VOLUME YESTERDAY: 277,717
We had 31 notice(s) filed for 155,000 oz for the OCT. 2017 contract
|Withdrawals from Dealers Inventory in oz||nil|
|Withdrawals from Customer Inventory in oz||
|Deposits to the Dealer Inventory in oz||nil oz|
|Deposits to the Customer Inventory, in oz||
|No of oz served (contracts) today||
|No of oz to be served (notices)||
|Total monthly oz gold served (contracts) so far this month||
|Total accumulative withdrawals of gold from the Dealers inventory this month||NIL oz|
|Total accumulative withdrawal of gold from the Customer inventory this month||23,630.25 oz|
Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 199 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 148 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
|Withdrawals from Dealers Inventory||nil|
|Withdrawals from Customer Inventory||
|Deposits to the Dealer Inventory||
|Deposits to the Customer Inventory||
|No of oz served today (contracts)||
|No of oz to be served (notices)||
|Total monthly oz silver served (contracts)||370 contracts (1,850,000 oz)|
|Total accumulative withdrawal of silver from the Dealers inventory this month||NIL oz|
|Total accumulative withdrawal of silver from the Customer inventory this month||2912.95 oz|
NPV for Sprott and Central Fund of Canada
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada
Sprott Inc. to take control of rival gold holder Central Fund of Canada
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.
And now the Gold inventory at the GLD
Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES
Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES
oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT 854.30 TONNES
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.
Now the SLV Inventory
Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ
OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z
Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615 MILLION OZ
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
Indicative gold forward offer rate for a 6 month duration+ 1.39%
Major gold/silver trading/commentaries for THURSDAY
Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold
– Yahoo admits every single one of 3 billion accounts hacked in 2013 data theft
– Equifax hacking and security breach exposes half of the U.S. population
– Some 143 million people vulnerable to identity theft
– Deloitte hack compromised sensitive emails and client data
– JP Morgan hacked and New York Fed hacked and robbed
– International hacking group steals $300 million
– Global digital banking and financial system not secure
Editor Mark O’Byrne
Imagine there was a chemical disaster at a factory. The surrounding water and air supply are affected over hundreds of miles. Thousands of people, if not more, are affected.
There would be a national response. Governments would step in to ask why this had happened, how it was going to be dealt with and how it would be prevented.
More importantly, those affected would be notified with immediate effect. The responsible company would not set up a website inviting potential victims to log on with personal details in order to find out if and how badly they have been affected.
And if the company did do this then people and the government wouldn’t stand for it.
Imagine that another disaster happens a few months later, at another company. But it turns out the dangerous chemicals have been leaking into the environment for possibly the previous three months.
No-one knows the extent of the damage.
There would be uproar.
Yet there seems to be little reaction when the equivalent happens in the cyber world. Just this week, less than a month after the Equifax announcement, Yahoo have admitted all 3 billion accounts were compromised four years ago … four years ago …
This is just another example of repeated data breaches that have compromised the personal data and lives of billions of people.
The list of respected and powerful institutions that have been hacked grows by the day and includes
– Equifax hacking and security breach exposes half of the U.S. population
– Some 143 million people vulnerable to identity theft after Equifax hack
– Deloitte hack, uncovered in recent days, compromised sensitive Deloitte emails and client data
– JP Morgan hacked affecting 76 million American households
– New York Fed hacked and central bank robbed of $81 million
– International hacking group steals $300 million
There are now numerous examples of slow responses from hacked companies, cover-up missions and a lack of responsibility and accountability. We are sleep walking into a cyber financial collapse.
No-one knows to what extent the information that has been stolen will be used in the future. But we may soon be looking at the cyber-equivalent of Chernobyl or Bhopal’s Union Carbide disaster.
This could go on for years. Each time someone tries to open a bank account, get a mortgage, even travel abroad they could face problems. Yet these companies leave it to us to manage and governments seem to be behind the curve and not on top of these real challenge.
The difference between the cyber-attacks and those that happen in manufacturing plants is that there are consumer protection laws and we are offered some level of compensation and some companies are rightly crippled for serious mistakes.
When it comes to Yahoo, Equifax or a large bank, it seems all that happens is that regulators slap them with a minimal fine. They even get some praise if they offer us protection in future, as happened with Equifax.
Long-term, there seem to be little awareness about how we and our data including our financial data and digital deposits and wealth will be protected in the future.
Even more worrying is that there is a lack of awareness of how real the cyber risks are to our modern digital banking, financial and monetary systems.
Terror-threat level raised
Less than a decade ago we used to worry about cyber-attacks purely in relation to money being taken from our accounts. This was as bad as we imagined things could get.
We thought we could wake up one day and find our savings had disappeared. That was scary enough. It happened to many people.
But we didn’t appreciate how the threat could escalate further.
Fast-forward over the last decade and we have been confronted with central banks being hacked via the SWIFT system and billions of identities taken like candy from a baby, from the apparent secure systems of financial services companies and banks.
We now have to face the reality that this threat extends beyond an inconvenience for individuals and instead is a real threat to governments and our international banking systems.
To many in the public this might not seem like such a bad thing. Perhaps its better that governments and big banks are targeted, with their endless pots of money and resources.
But where does it end?
There’s an unseen world war that is being quietly fought in recent months and years. There are no clear battle lines, few rules of engagement, and no end in sight.
It not a typical war involving armies rather it is a cyber war, with nations fighting each other for dominance in cyberspace.
The United States, Russia, China and many others are employing professional hackers as “cyber soldiers.” Call it cyber terrorism or cyber war.
US military leaders warn of the growing progress of Russia, China, and North Korea in cyberspace. The Pentagon has ramped up its own efforts in what it calls the “cyber domain” and released a new cyber strategy in April 2015.
It is not a secret that the likes of Russia and Iran support cyber terrorism or cyber war (depending on your perspective) that give them leverage over the U.S. and other western nations. Russia was relatively open about their attack on Estonia and there are rumours of support in attacks on other nations.
It is not beyond the realms of imagination that anti-Western governments could soon have western nations banks and institutions by the proverbial cojones either by holding billions of personal details to ransom or (arguably worse) disable and collapse our vulnerable financial and monetary systems.
We already see Russia and China preparing systems that allow them to operate beyond dollar hegemony. They are preparing for this … as should we.
The threat posed by cyber attacks, cyber terrorism and cyber war to our increasingly complicated, technologically dependent financial system is something we have covered numerous times and it becomes more clear by the day.
We live in a time where the majority of our interactions, whether financial transactions such as withdrawing cash or selling gold, depend on single interface websites and the internet. Few can really appreciate on what scale we are at risk.
The cyber attacks of the last five years should help us realise the scale of the risks.
Not only must we consider how our banks and utility providers are protecting our information but also reevaluate how we are securing those assets designed to protect us from such disasters.
Consider digital gold providers. These are the companies that do not have a direct interaction with clients either through the phone or face-to-face. It is all done through online websites.
Investors should look to hold their gold with bullion dealers who do offer such interactions. Those providers who allow clients to have outright legal ownership of physical gold and silver coins and bars outside the banking system.
This is vital because those who hold gold and silver in this way are far better protected from any cyberattacks on the horizon. Physical coins and bars cannot be made to disappear and if owned in the right way mean that you can sell at any time and are not dependent on pricing and liquidity from one company’s website as is the case with gold vault platforms and increasingly the case with online banking.
It goes without saying that we hope these cyber risks do not cripple the financial and monetary system. But in the same way we are the midsts of a debt-crisis no-one saw coming, we believe it is prudent to take the necessary measures to protect your wealth.
News and Commentary
Gold Prices (LBMA AM)
05 Oct: USD 1,278.40, GBP 969.28 & EUR 1,086.51 per ounce
04 Oct: USD 1,275.55, GBP 960.87 & EUR 1,085.11 per ounce
03 Oct: USD 1,270.70, GBP 959.00 & EUR 1,081.87 per ounce
02 Oct: USD 1,273.10, GBP 956.48 & EUR 1,084.55 per ounce
29 Sep: USD 1,286.95, GBP 963.15 & EUR 1,090.82 per ounce
28 Sep: USD 1,284.30, GBP 961.04 & EUR 1,091.40 per ounce
27 Sep: USD 1,291.30, GBP 963.83 & EUR 1,099.54 per ounce
Silver Prices (LBMA)
05 Oct: USD 16.66, GBP 12.64 & EUR 14.19 per ounce
04 Oct: USD 16.83, GBP 12.67 & EUR 14.29 per ounce
03 Oct: USD 16.61, GBP 12.53 & EUR 14.13 per ounce
02 Oct: USD 16.58, GBP 12.46 & EUR 14.12 per ounce
29 Sep: USD 16.86, GBP 12.60 & EUR 14.27 per ounce
28 Sep: USD 16.82, GBP 12.53 & EUR 14.28 per ounce
27 Sep: USD 16.89, GBP 12.58 & EUR 14.38 per ounce
Eric Sprott recognizes the rigging in the precious metals and he is keen join other gold investor groups
and to expose the fraud perpetrated by the banker crooks
Paulson says Sprott, others keen to join gold-investors group
Submitted by cpowell on Wed, 2017-10-04 18:19. Section: Daily Dispatches
The worst gold mining company management is the management that fails to acknowledge gold market rigging by governments and central banks.
* * *
By Dnaielle Bochove and Anders Melin
Tuesday, October 4, 2017
Paulson & Co.’s plan for a coalition of gold-mining company investors has gotten a better-than-expected response, with one major investor already on board and another likely to join, according to the hedge fund.
Last week billionaire John Paulson said his firm will spearhead the creation of the Shareholder’s Gold Council to give a greater voice to institutional investors on matters including board appointments, pay plans, and mergers. The group is meant to rein in what Paulson called years of bad management at many gold-mining companies.
Tocqueville Asset Management LP has said it will join the Council, said Marcelo Kim, a partner at Paulson & Co. who oversees investments in natural resources at the hedge fund. Meanwhile, Rick Rule, chief executive officer of Sprott U.S. Holdings Inc. has said he will recommend that Toronto-based Sprott Inc. join the group as well, Kim said. Rule didn’t immediately respond to a request for comment.
Tocqueville is “constructive about the idea” but the effort still has “many details to be worked out,” John Hathaway, who co-manages the firm’s gold fund, said in an email today. Tocqueville owns stakes in miners including Detour Gold Corp. and Royal Gold Inc.
Response to the initial proposal has been strong, Kim said, speaking from the sidelines of the Mines and Money Conference in Toronto. “I thought it would be good, but it’s done a little better than I thought.”
A dozen other gold-investment firms, mostly based in North America, have said they’re on board with joining the group in principle, pending internal approvals and compliance, Kim said. Navigating internal compliance is one of the key hurdles to establishing the group, he said, adding that he’s hoping to get 10 to 20 firms on board to start.
Paulson & Co. is leading the charge in response to what it sees as poor management by gold miners that resulted in $85 billion in write-offs since 2010. At the same time CEOs took home hefty pay packages, even as companies wracked up massive amounts of debt, according to Paulson & Co.’s presentation at a conference last week.
The net debt of big mining companies tracked by Bloomberg Intelligence surged almost sevenfold over four years to a record $33.2 billion in 2014, fueled by capital spending.
Paulson, 61, started a fund that invested in mining companies and bullion-related derivatives in January 2010 with about $250 million of his own money, betting that prices would rise amid unprecedented monetary stimulus. The fund jumped 35 percent in its first year, but then posted losses in some subsequent years after gold peaked in 2011.
Mike Kosares: Gold is rising in all major currencies, including the dollar
Submitted by cpowell on Wed, 2017-10-04 21:20. Section: Daily Dispatches
5:20p ET Wednesday, October 4, 2017
Dear Friend of GATA and Gold:
USAGold’s Mike Kosares writes today that gold is rising not just in lesser currencies around the world but in terms of the U.S. dollar as well, for the first time since the Gold Currency Index was created in 1997.
Kosares writes: “Though it is difficult to trace the source of this divergence directly to international funds and institutions, we can see their footprints in the sand — the circumstantial evidence as reflected in the strong growth of bellwether exchange-traded fund inventories. ‘Investment demand,’ says ETF Trends in a recent report titled ‘An In-Depth Look into Gold ETF’s Resurgence and Sustainability,’ ‘remains robust as an increasing number of institutional investors, sovereign wealth funds, and central banks seek gold as a potential source of return and diversification to traditional stock and bond portfolios.”
Kosares’ analysis is headlined “Gold Is Up This Year Not Just in Dollars But in Every Major Currency” and it’s posted at USAGold here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Venezuela suggests global oil trade in Russian ruble, Chinese yuan
Submitted by cpowell on Thu, 2017-10-05 03:14. Section: Daily Dispatches
From Russia Today, Moscow
Wednesday, August 4, 2017
The president of Venezuela, Nicolas Maduro, has proposed that oil-producing countries should discuss creating a currency basket for trading crude and refined products.
“Developing a new mechanism of controlling the oil market is necessary,” he said today at the Russian Energy Forum, being held in Moscow this week.
According to Maduro, trading paper futures has an adverse impact on the oil market, undermining attempts by the Organization of the Petroleum Exporting Countries to stabilize prices.
Introducing alternative currency baskets, including the yuan, ruble, and other currencies, will eliminate the impact of futures trading, according to the Venezuelan president. …
… For the remainder of the report:
China says its in-ground gold reserves stand at 12,100 tonnes
Submitted by cpowell on Mon, 2017-10-02 15:09. Section: Daily Dispatches
Monday, October 2, 2017
SHANGHAI — China’s proven gold reserves reached 12,100 tonnes at the end of 2016, the state news agency Xinhua reported today, quoting an official with the national gold association.
China has been the world’s biggest gold producer for 10 years and the largest consumer of the metal for four years, it said. China aims to increase its annual gold output to 500 tonnes by 2020 from around 450 tonnes currently, it said.
Last year 70,000 tonnes of gold were traded in China on spot exchanges, futures exchanges, and over-the-counter at banks, and that amount was expected to exceed 100,000 tonnes by 2020, Xinhua quoted Zhang Yongtao, vice chairman of the China Gold Association, as saying. …
… For the remainder of the report:
Your early THURSDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight
2. Nikkei closed UP 1.90 POINTS OR 0.01% /USA: YEN FALLS TO 112.59
3. Europe stocks OPENED GREEN EXCEPT GERMANY ( /USA dollar index RISES TO 93.78/Euro UP to 1.1723
3b Japan 10 year bond yield: FALLS TO -+.046%/ 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:: 50.51 and Brent: 56.54
3f Gold UP/Yen UP
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil UP for WTI and UP or Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.447%/Italian 10 yr bond yield UP to 2.129% /SPAIN 10 YR BOND YIELD DOWN TO 1.689%
3j Greek 10 year bond yield RISES TO : 5.609???
3k Gold at $1275.00 silver at:16.61(8:15 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 16/100 in roubles/dollar) 57.51-
3m oil into the 50 dollar handle for WTI and 56 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED REVALUATION NORTHBOUND
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.59 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 0.9778 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1456 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017
3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.447%
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 2.341% early this morning. Thirty year rate at 2.884% /
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Spain Rebounds, Pound Tumbles In Quiet Session Ahead Of ECB Minutes, Fed Speakers
Global markets came off record highs, trading subdued, with US index futures unchanged as traders are unwilling to make major moves ahead of today’s ECB minutes and tomorrow’s NFP release, and before speeches by central bankers including SF Fed President John Williams and the potential next Fed chair Jerome Powell, as well as ECB executive board members Peter Praet and Benoit Coeure.
There was a modest relief rally in Spain, where the main IBEX 30 stock index traded up close to 1%, with banks across the region seeing some bullish performance as participants continue to guess whether or not Catalonia will declare independence next week as Economy Minister Luis de Guindos poured cold water on Catalonia’s bid for independence. A well-received Spanish bond auction, the first since the referendum and which saw the highest 10-year bid-to-cover ratio since February, added to the optimism. Other auctions out of France and the UK were well digested across markets. The Spanish-German spread posted its first tightening this month.
Asian stocks were mixed after a four-day rally, with markets in Hong Kong, China and South Korea all closed for holidays. The Topix dropped -0.1% with the Nikkei 225 little changed. The MSCI Asia Pacific Index was little changed at 162.93. On Wednesday, the S&P 500 Index posted a slight gain, still ending at a fresh record, after data showed American services industries climbed at the fastest pace in 12 years, while private jobs numbers met expectations. Japan’s Topix index dropped for the first time in three days, led by insurers and transportation companies. Qantas Airways Ltd. closed at the highest level in almost 10 years in Sydney after Goldman upgraded the stock. Other markets: Australia’s S&P/ASX 200 Index was little changed, and New Zealand’s NZX 50 up +0.3%. Straits Times Index +0.8%, Philippines PSEi Index -0.6%, Malaysia’s FTSE KLCI Index -0.1%, Jakarta Composite Index -0.8%, Thailand’s SET Index +0.3%. India’s S&P Sensex Index +0.1%, Nifty 50 little changed
European bourses traded subdued, with outperformance in the IBEX 30, recovering from the losses seen yesterday. The Spanish stock index trades up close to 1%, with banks across the region seeing some bullish performance as participants continue to guess whether or not Catalonia will declare independence next week. A rangebound tone is the theme across the remainder of European indices, as utilities outperform, evident of the lack of risk trade. In Spain, the prospect of secession has increased pressure on Prime Minister Mariano Rajoy while rattling markets. His next move could involve suspending the regional government and implementing direct rule from Madrid. Emerging-market stocks are showing signs of shrugging off declines from last month that were triggered by concern a stronger dollar would hurt developing nations’ currencies.
“The focus is of course upon the situation in Spain and Catalonia,” Dennis Gartman, editor of the Gartman Letter, wrote in his daily emailed report. “Although Catalonia’s Parliamentary President, Mr. Puigdemont, has not yet officially called for an independent Catalan nation, he may do so early next week, at which time 1.17 shall almost certainly be given” for the euro.
The Bloomberg Dollar Spot Index was little changed while Treasuries and stock futures were stuck in tight ranges as traders stayed on the sidelines before a series of U.S. data and speeches by four Fed members including Chair candidate Jerome Powell. The pound and Aussie led G-10 losses while the euro struggled to rise a third day before ECB publishes the account of its September meeting. Currency-market volumes remain muted, with liquidity being described as below average.
GBP has seen the majority of early price action, where sterling saw a 0.6% drop vs. the dollar. Concerns about PM May’s tenure crept into markets overnight and through the morning, following the UK press reports from The Telegraph and The Times. However, Downing Street later came out and said this was not an issue for discussion. Cable could look towards pre hawkish Carney levels around 1.3150.
AUD saw the majority of volatility overnight, as Australian retailers were hit by the worst sales decline in over four years. August’s retail sales came in at -0.6% (M/M) leading to sharp selling pressure in the Australian dollar. AUD lost ground against both its major counterparts yet still consolidates inside current trading ranges, AUD/USD’s 2016 high continues to behave as support for the pair, with AUD/NZD not wanting to look toward 1.09.
Looking ahead, highlights include ECB Minutes, US Trade Balance, Weekly Jobs, Factory orders and a slew of central bank speakers.
- S&P 500 futures up 0.02% to 2,536.75
- VIX Index down 1.7%, ending 2-day advance
- STOXX Europe 600 down 0.1% to 389.84
- MXAP up 0.05% to 162.93
- MXAPJ up 0.1% to 537.54
- Nikkei up 0.01% to 20,628.56
- Topix down 0.1% to 1,682.49
- Hang Seng Index up 0.7% to 28,379.18
- Shanghai Composite up 0.3% to 3,348.94
- Sensex up 0.1% to 31,702.87
- Australia S&P/ASX 200 down 0.01% to 5,651.77
- Kospi up 0.9% to 2,394.47
- German 10Y yield rose 0.6 bps to 0.459%
- Euro up 0.09% to $1.1770
- Brent Futures up 0.6% to $56.13/bbl
- Gold spot up 0.1% to $1,276.57
- U.S. Dollar Index up 0.01% to 93.47
- Italian 10Y yield rose 2.9 bps to 1.901%
- Spanish 10Y yield unchanged at 1.785%
Top Overnight News
- Crisis in Spain: Spanish Economy Minister Luis de Guindos ruled out any sort of mediated talks with separatist leaders and said Catalan banks have signaled they may move out of the region if the push for independence continues
- Saudi King Salman bin Abdulaziz is beginning an historic first visit to Russia by a monarch of the Gulf kingdom as he seeks an understanding with President Vladimir Putin to extend an agreement curbing oil supplies
- Saudi Aramco isn’t talking with any Russian companies about possible participation in its initial public offering, the head of the state oil producer said
- Brevan Howard Asset Management LLP’s flagship hedge fund lost 0.9% in September, the sixth monthly decline this year, according to an investor letter seen by Bloomberg News. The Master Fund, which managed $6.8 billion at the end of August, was down 4.6 percent through September
- Foreign buying of South African bonds rose to a six-month high in September, suggesting that the highest yields among emerging markets are proving irresistible despite political and economic risks
- Ex-HSBC trader says boss ordered him to ‘ramp’ up the price of the pound, according to a recorded phone call that prosecutors say is real-time talk from a front-running scheme run by then HSBC’s head of foreign exchange cash trading in Europe
- House and Senate Republicans will take their first concrete steps toward enacting planned tax cuts by advancing budget resolutions for fiscal 2018, lawmakers see more fights ahead on tax details
- Saudi King Salman bin Abdulaziz is due to meet Russian President Vladimir Putin in Moscow to discuss the extension of an oil pact, to talk oil pact on ‘epochal’ Russia visit
- Trump’s Short List for Fed Chair Features These Hawks and Doves
- GOP Budget Kicks Off Effort on Tax Cuts. Now Comes the Hard Part
- Spain’s de Guindos Says Catalonia’s Independence Push Is Doomed
- Amazon Is Said to Test Own Delivery Service to Rival FedEx, UPS
- Sempra Revises $9.45 Billion Oncor Deal to Win Over Texas
- John Catsimatidis Mulls Buying Fairway Market: New York Post
- Deckers Could Double With Asset Sales, Recapitalization: Marcato
- Oil Trades Near $50 as U.S. Export Surge Revives Glut Concerns
Asia equity markets traded range-bound amid relatively light news flow and market closures in the region. Furthermore, the mundane tone precedes Friday’s key risk US jobs data and followed a similarly quiet US session where the major indices just about eked fresh record levels. ASX 200 (-0.1%) was kept afloat by strength in mining names and Nikkei 225 (+0.01%) traded indecisive alongside a slightly choppy currency, while the absence of markets in China, Hong Kong and South Korea ensured price moves in the region were contained. 10yr JGBs were quiet overnight, but still edged minimal gains amid an indecisive tone in Japan, while 10yr inflation-indexed auction also failed to drive prices with the b/c and lowest accepted prices slightly below the prior results.
Top Asian News
- Bond Bulls Relish India as Best Story Post September Selloff
- Mastercard to Invest $750m-$800m in India in Next 4 Years: Banga
- McDonald’s Japan Posts 22nd Cons. Monthly Same-Store Sales Rise
- Japan’s Topix Dips as Technicals Signal Stocks May Be Overbought
- Pimco Sees Chance Singapore’s MAS Surprises by Tightening
- Amazon Opening Pop-Up Liquor Bar in Tokyo’s Ginza District
European bourses trade subdued, with outperformance in the IBEX 30, recovering from the losses seen yesterday. The Spanish stock index trades up close to 1%, with banks across the region seeing some bullish performance as participants continue to guess whether or not Catalonia will declare independence next week. A rangebound tone is the theme across the remainder of European indices, as utilities outperform, evident of the lack of risk trade. Much anticipation across asset classes today will be on the ECB meeting minutes, alongside a slew of upcoming Central Bank speech. Auctions come out of Spain, France and the UK, with Spain’s auction being relatively well digested across markets. The Spanish 10y trades at 1.76% following the auction, helping a marginal lift across Europe, with both Bund and Gilt seeing a recent bid. Elsewhere, the French supply was comfortably digested, providing little in the way of fireworks while UK drew an impressive b/c of 2.36.
Top European News
- Guindos Says Catalan Independence Would Be Illegal
- First Spain Bond Auction After Vote to Test Investor Appetite
- Siemens Exits Lighting With $1.4 Billion Sale of Osram Stake
- WPP Escalates Takeover Battle Over Japanese Ad Agency ADK
- Ex-HSBC Trader Says Boss Ordered Him to ‘Ramp’ Up Price of Pound
- Airbus Defence & Space Is Said to Freeze Capex: Reuters
- Deripaska’s En+ Group Plans Biggest Russian IPO Since 2013
- Milan IPOs Booming as Investors Hunt for Made-in-Italy Assets
In currencies, morning trade has been slow, with many investors awaiting tomorrows NFP and today’s ECB minutes. GBP has seen the majority of early price action, where sterling saw a 0.6% drop vs. the dollar. Concerns about PM May’s tenure crept into markets overnight and through the morning, following the UK press reports from The Telegraph and The Times. However, Downing Street later came out and said this was not an issue for discussion. Cable could look towards pre hawkish Carney levels around 1.3150. EUR/USD was range-bound through Asian trade, consolidating between 1.1750 – 1.1760. Subdued trade is likely to continue through the early European hours, as anticipation is likely to lie on the upcoming ECB meeting minutes later in the session. With EUR 4bln worth of option expiries due tomorrow, volatility could be due in EUR/USD, with the 1.1750 – 1.1780 range to behave as immediate resistance. Monday’s EUR/USD low continues to behave as support, with a break of these levels set to see a push toward the 50% Fibonacci ahead of 1.16. AUD saw the majority of volatility overnight, as Australian retailers were hit by the worst sales decline in over four years. August’s retail sales came in at -0.6% (M/M) leading to sharp selling pressure in the Australian dollar. AUD lost ground against both its major counterparts yet still consolidates inside current trading ranges, AUD/USD’s 2016 high continues to behave as support for the pair, with AUD/NZD not wanting to look toward 1.09.
In commodities, an early bid has been seen in oil markets, as oil traders focus on today’s dialog between Saudi and Russia which remains optimistic regarding oil market stability. This also comes in the context of yesterday’s comments from Russian President Putin, stating that a deal between OPEC and rival oil producers to reduce production could be extended to the end of 2018. Precious metals have followed Asian trade, seeing largely sideward price action throughout European trade. Risk fears have dampened across markets, with October’s trade struggling to find any real direction, with many likely awaiting the aforementioned ECB minutes and Central Bank speech.
Looking at the day ahead, it’s quite a busy day for central bank speakers, including the potential next Fed governor (Powell). There will be a range of data including: August factory orders (1% expected), the trade balance, final reading of durable and capital goods along with the weekly initial jobless claims and continuing claims. Onto other events, the ECB will publish the September meeting minutes. Following on, the ECB’s Praet and Coeure chair a panel in Frankfurt and the ECB’s governing council members Liikanen and Jazbec will speak. In the UK, BOE’s MaCafferty speaks in London and Chief economist Haldane will speak on “Central banks engagement with society”. Over in the US, there will be four Fed speakers, including: Jerome Powell, John Williams, Patrick Harker, and Esther George, although none are scheduled to speak directly on monetary policy.
US Event Calendar
- 7:30am: Challenger Job Cuts YoY, prior 5.1%
- 8:30am: Initial Jobless Claims, est. 265,000, prior 272,000; Continuing Claims, est. 1.95m, prior 1.93m
- 8:30am: Trade Balance, est. $42.7b deficit, prior $43.7b deficit
- 9:10am: Fed’s Powell Speaks on Treasury Markets and the TMPG
- 9:15am: Fed’s Williams Speaks at Community Banking Conference
- 9:45am: Bloomberg Consumer Comfort, prior 51.6
- 10am: Factory Orders, est. 1.0%, prior -3.3%; Factory Orders Ex Trans, prior 0.5%
- 10am: Durable Goods Orders, est. 1.7%, prior 1.7%; Durables Ex Transportation, prior 0.2%
- 10am: Cap Goods Orders Nondef Ex Air, prior 0.9%; Cap Goods Ship Nondef Ex Air, prior 0.7%
- 10am: Fed’s Harker Speaks at Workforce Conference
- 4:30pm: Fed’s George Speaks at Workforce Conference
DB’s Jim Reid concludes the overnight wrap
Hello from a sweltering Phoenix. Back in wet autumnal London in time for tomorrow’s EMR. I had a FaceTime conversation with my exhausted wife yesterday and I don’t think she appreciated seeing blue skies and evidence of a golf course in the distance on the screen. On escaping the madness at home I actually had time to read the paper yesterday and it’s a fascinating snap shot of modern life that there was a story suggesting that songwriters are now packing everything into the first 30 seconds of modern songs to ensure that the listeners aren’t bored enough to press skip. Apparently the first 30 seconds of the most globally downloaded song of the year “Despacito” is basically an executive summary of the whole song. As well as the short attention span it’s also because Spotify only pays artists if songs are streamed for longer than around 30 seconds.
So in order to keep your attention (if it’s not been lost already) here is what you need to know today in as few words as possible. “S&P new record, Spanish assets slump, core bond yields down then up (US ISM 12yr high), UK PM May has bad cold, spluttered, faced a stage invasion and suffered bits falling off the stage for her big speech, Tillerson staying, hurricanes weakened ADP, Puerto Rico debt plunges with ECB minutes and US durables due today”.
If like me you’re rather partial to slow long intros hopefully you’ll read on. Indeed one wonders whether in the current era of instant gratification epic slow intro songs like “Where the streets have no name”, “Hotel California”, “Billie Jean”, “Money for nothing”, “Bat out of hell”, “One” (Metallica), “Shine on you crazy diamond”, “The year of the cat”, “Layla”, “Superstition” or “Paradise City” would get made!! If anyone has a candidate for a global smash with a long intro in recent years I’d love to hear it as I can’t think of one. So after donning my ‘Slash’ wig we’ll start the long version of the EMR.
Despite global politics doing its best to shake things up, it still feels like there is not much stopping risk appetite at the moment as the S&P 500 notched up yet another record high last night having edged up +0.12% to close up for the 7th successive session. That is the longest run since May 17 and it’s worth highlighting that going back to September 11th, the index has now risen 15 times in 18 sessions. The index has already jumped to a +0.73% head start in October and as we noted in our Macro Bites on Tuesday, should October be a positive return month then we will have entered new ground with 10 consecutive positive total return months to start a year – the first time in at least 90 years. Markets appeared to get a bit of a boost from the news that Secretary of State Rex Tillerson is to continue in his role, while also quashing any concerns about him ever considering leaving. Prior to this, in Europe the Stoxx 600 finally snapped its long run of gains (9 days) after falling -0.08%, although in fairness that closing move hid a larger drop midway through the day. Meanwhile it was another roundabout day of moves for bonds, but Treasuries last night ending flat even with decent data, while in Europe as you’ll see shortly it was another day of underperformance for Spanish assets.
This morning in Asia, markets are mixed but little changed (ASX 200 +0.16%; Nikkei -0.07%) as we type, but most other markets (Chinese bourses, Hang Seng and Kospi) are closed today. Elsewhere, the US and South Korea have agreed to amend their free-trade deal, but have provided no details on what has changed.
As noted above, it was another day of big moves for Spanish assets. The IBEX closed -2.85% last night, led by real estate (-4.60%) and financials. Taking a step back, the index is now down -4.01% in the last 3 sessions and now at the lowest level since March 17. The 10y Spanish bond yields also jumped 5.6bp yesterday and is now 16bp higher this week and to the highest since March 21st. The Spain-Bund spread is also out to 132bp (widest in 5 months). The moves appeared to reflect the King’s comments on Tuesday night, while last night Catalan President Carlos Puigdemont delivered a live TV address in which he gave a somewhat mixed message, albeit marginally conciliatory. He did not directly mention the declaration of independence, but said “we’ll show our best face in coming days when our institutions apply the results of the referendum”. Further, he is open to a remediation process with the Spanish government. That said, the government responded later on, noting if Puigdemont wants to negotiate “he knows perfectly what he has to do beforehand”.
The political turmoil and subsequent sell-off for Spanish assets is in stark contrast to the latest data in the country though. Following a bumper September manufacturing PMI print on Monday, the Spanish services PMI yesterday came in at a much better than expected 56.7 (vs. 55.5) which marked an increase of 0.7pts from August. That left the composite at 56.4 and up 1.1pts from the month prior. Meanwhile the Euro area services PMI was revised up 0.2pts to 55.8, which is the highest since May. At the country level, there was no change for Germany (55.6) and a small 0.1pt decline for France (57.0). However, the biggest disappointment was Italy which printed at a well below consensus 53.2 (vs. 55.0 expected). The UK (53.6 vs. 53.2) was ever so slightly above market. It’s worth highlighting that our European economists noted yesterday following the data, the PMIs present upside risk relative to their +0.6 qoq GDP forecast for the Euro area, most of all in Spain. However its worth also caveating that the survey data was a bit too optimistic for GDP in H1 and also that the hard retail sales data were particularly soft yesterday (-0.5% mom vs. +0.3% expected).
Spain isn’t the only Government suffering at the moment although its woes pale into insignificance with that of Puerto Rico. After returning from his trip to the US territory, President Trump went onto “The Sean Hannity show” and suggested that the government’s debt should be wiped clean to help the island to recover from Hurricane Maria. He said “we are going to work something out….you know they owe a lot of money to your friends on Wall Street. We’re gonna have to wipe that out”. Notably, the Puerto Rico government had filed for bankruptcy protection back in May and has c$74bln of municipal debt. Following his comments, the benchmark 2035 bond fell from 44c/$ to as low as 30c/ $ intraday, before recovering to 38c/$ after Trump’s Budget director Mick Mulvaney said we should not take Mr Trump’s comments too literally. Further, Governor Ricardo Rossello also prefers to resolve its debt via bankruptcy, noting “as far as the comments made about wiping the debt clean, that is the opinion of the president. Puerto Rico is already involved on a judicial front”.
Staying in the Americas, the main focus data-wise in the US was the September ADP employment change reading which came in bang on the money at 135k. It is the lowest reading since October 2016, however obviously reflects the impact from the two hurricanes last month. It’s worth noting that the details revealed that small business hiring was -7k which compares to a 3-month trailing average of 49k in August. As a read through, the 3-month rolling average for non-farm payrolls is 185k so the current 80k consensus for NFP on Friday might appear a little conservative based on these numbers. With regards to the other US data yesterday, the ISM non-manufacturing print also turned a few heads yesterday after surging to 59.8 (vs. 55.5 expected) from 55.3 in August. That is the highest since August 2005. The employment component also nudged higher (56.8 from 56.2) which also perhaps lowers expectations of a big downward miss for NFP on Friday.
Back to the latest political developments. In Manchester yesterday the Conservative Party Conference concluded with PM Theresa May’s speech. It might be better remembered though for a number of disruptions – some of which were funnier than others – including a prankster handing May a P45 form (given to those who lose their jobs in the UK), the PM battling coughing bouts,and also falling slogan letters on the sign behind her. As someone that gives a lot of speeches I couldn’t help feel for her yesterday. The crux of the speech focused on May’s strong defence of free market capitalism and also her pledge to put a cap on energy prices (a little contradictory) – with a bill due to be published next week – and a pledge to build more social housing. With regards to Brexit, PM May didn’t add much new at all, instead reassuring the audience that a deal will be met that works for the UK and Europe.
Quickly recapping other market performance yesterday. Core bond yields were little changed (UST 10y flat; Bunds -0.8bp), but Gilts (+2.6bp) and Italy (+3bp) underperformed. Currencies were broadly flat, with the US dollar index softening 0.12%, while the Euro (+0.13%) and Sterling (+0.08%) marginally strengthened versus the Greenback. Elsewhere, precious metals were little changed (Gold+0.25%; Silver -0.31%), but LME base metals (Zinc +1.16%; Aluminium +1.64%; Copper +0.02%) were modestly higher.
Moving along, Russia’s Putin spoke at the Russian energy conference and praised Mr Trump as a strong character but noted he has “zero personal relationship” with him. On North Korea, Putin noted both sides should “lower the rhetoric”, otherwise it could lead to a “very dangerous dead end”. Elsewhere he said Russia is open to extending the oil production agreement with OPEC through 2018, although it seems to have had little impact as WTI oil dipped 0.87% yesterday to $49.98/bbl (first time below $50 in two weeks). This compares to the acceptable pricing level ($55-$60) as noted by OPEC Secretary-General Barkindo yesterday.
Away from the markets, the Fed’s Fischer who leaves office this month noted “I still believe we’ll have higher inflation”, while conceding that we may have to wait “longer than you expected to wait”, but “if it’s a very basic force, namely increasing employment, increasing wages, (then inflation) will show up”. Over in Japan, with two weeks to go before the election on 22 October, polls are suggesting Tokyo Governor Koike’s new party of Hope is unlikely to win, but there are mixed messages as to the potential hit she could inflict on PM Abe. According to the Kyodo news poll on late Sunday, c15% of respondents were planning to vote for her party, but another poll by NHK on Monday found only 5% would vote for her, although c40% of respondents remained on the sidelines and said they didn’t support any party.
Looking at the day ahead, it’s quite a busy day for central bank speakers, including the potential next Fed governor (Powell). Firstly, on the data front, the Markit retail PMIs across Europe and Germany’s construction PMI will be due. Over in the US, there will be a range of data including: August factory orders (1% expected), the trade balance, final reading of durable and capital goods along with the weekly initial jobless claims and continuing claims. Onto other events, the ECB will publish the September meeting minutes. Following on, the ECB’s Praet and Coeure chair a panel in Frankfurt and the ECB’s governing council members Liikanen and Jazbec will speak. In the UK, BOE’s MaCafferty speaks in London and Chief economist Haldane will speak on “Central banks engagement with society”. Over in the US, there will be four Fed speakers, including: Jerome Powell, John Williams, Patrick Harker, and Esther George, although none are scheduled to speak directly on monetary policy.
3. ASIAN AFFAIRS
i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed /Hang Sang CLOSED / The Nikkei closed UP 1.90 POINTS OR 0.01%/Australia’s all ordinaires CLOSED UP 0.01%/Chinese yuan (ONSHORE) closed/Oil UP to 50.51 dollars per barrel for WTI and 56.54 for Brent. Stocks in Europe OPENED GREEN EXCEPT GERMANY . ALL YUAN FIXINGS CLOSED
3a)THAILAND/SOUTH KOREA/NORTH KOREA
Putin increases aid to North Korea as China backs away. Now the next move is Trump’s
Russia Increases Economic Support For North Korea As China Backs Away
Over the past two months, China, North Korea’s economic benefactor and formally the source of 90% of its foreign trade, has been withdrawing financial support, ostensibly under the auspices of US sanctions, as Communist Party leaders try to rein in the North’s nuclear program to appease the US and prevent a potentially destabilizing conflict on its border – a development that would be particularly unwelcome during the Communist Party’s upcoming national congress.
As we reported earlier this week, North Korea’s thriving black-market economy (the county earns hundreds of millions of dollars a year from illegal weapons sales, along with other illicit activities rumored to include counterfeiting of US dollars and the manufacture of methamphetamine) has helped blunt the economic impact of UN sanctions meant to reduce the country’s legitimate exports by 90%.
Last month, China ordered North Korean businesses operating in the country to close, and asked its banks to stop doing business with North Korean businesses and individuals in accordance with the latest round of UN Security Council sanctions.
But as China withdraws, Reuters reports that Russia, which shares a small border with North Korea along the country’s eastern flank, is quietly stepping in to offer economic support for its restive neighbor, even after declining to use its veto power to kill UN sanctions against the rogue state.
Russia’s reasoning is simple: If the North Korean regime falls, more US troops could deploy near Russia’s eastern border – an eventuality that Moscow would like to avoid, given the NATO buildup in Europe.
Though Moscow wants to try to improve battered U.S.-Russia relations in the increasingly slim hope of relief from Western sanctions over Ukraine, it remains strongly opposed to what it sees as Washington’s meddling in other countries’ affairs, according to Russian diplomats and analysts familiar with the Kremlin’s thinking.
Russia is already angry about a build-up of U.S.-led NATO forces on its western borders in Europe and does not want any replication on its Asian flank, the sources added.
Yet while Russia has an interest in protecting North Korea, which started life as a Soviet satellite state, it is not giving Pyongyang a free pass: it backed tougher United Nations sanctions against North Korea over its nuclear tests last month.
A Russian company began routing North Korean internet traffic this month, giving Pyongyang a second connection with the outside world besides China, according to Reuters. Trade between Russia and North Korea doubled to $31.4 million in the first quarter of 2017 thanks to what Moscow said were higher oil product exports, according to Russia’s ministry for the development of the Far East.
The US suspects that Russia is undermining UN sanctions by allowing North Korean ships to sail home with large loads of fuel, despite officially declaring another destination. Russia has also resisted pressure to repatriate tens of thousands of North Korean laborers whose remittances help support the Kim regime.
“The Kremlin really believes the North Korean leadership should get additional assurances and confidence that the United States is not in the regime change business,” Andrey Kortunov, head of the Russian International Affairs Council, a think-tank close to the Russian Foreign Ministry, told Reuters.
“The prospect of regime change is a serious concern. The Kremlin understands that (U.S. President Donald) Trump is unpredictable. They felt more secure with Barack Obama that he would not take any action that would explode the situation, but with Trump they don’t know.”
Presumably, Russia has chafed at President Donald Trump’s aggressive rhetoric, taking umbrage at his reckless threats to “totally destroy” North Korea, and that the regime “won’t be around much longer.”
As Reuters noted, any talk of unseating any leader of a former Soviet satellite state for whatever reason is politically toxic in Moscow.
To be sure, Beijing’s economic ties to Pyongyang still dwarf Moscow’s and China remains a more powerful player in the unfolding nuclear crisis. But while Beijing is cutting back trade as it toughens its line on its neighbor’s ballistic missile and nuclear program, Russia is increasing its support.
Last month, Russia stoked the US’s ire by hosting the “Zapad-2017” military drills, the latest iteration of military drills that began during the Soviet Union in the 1970s. While Russia placed the number of soldiers participating in the exercise, which also involved neighboring Belarus, at around 10,000, NATO estimates that the real number could’ve been closer to 100,000. Land, sea and air units took part in the games across a huge area encompassing western Russia, Belarus, the Baltic Sea and the Russian exclave of Kaliningrad. Now, the US is accusing Russia and Belarus of breaking up the war games into smaller segments to avoid being observed by international monitors.
Russian President Vladimir Putin told a forum last month in Vladivostok – an eastern port city 60 miles from Russia’ border with North Korea – that he understood the country’s security concerns about the US and South Korea.
To be sure, Russia and China continue to advocate for a peaceful dialogue between the US and the North. The two countries have proposed a peace plan that would ask the US and South Korea to end their military exercises in exchange for the North ending its nuclear tests. However, after President Donald Trump poisoned the well by saying Secretary of State Rex Tillerson was “wasting his time” trying to talk to the North, this eventuality appears increasingly remote. But as the drumbeat of war intensifies in the US, the two countries are taking steps to ensure that their mutually-agreeable buffer against US “missile defense” systems in South Korea remains intact.
b) REPORT ON JAPAN
the release of the previous September member is a dud as it does not reveal how the ECB will stop its QE
(courtesy zero hedge)
ECB Minutes Are A Dud, Fail To Excite Markets
For all the excitement surrounding today’s ECB minutes release, they turned out to be a dud, with the EURUSD failing to move even 10 pips, and Bund yields largely unchanged. Contrary to expectations, the minutes did not disclose anything new, instead echoing what Peter Praet said on Monday.
Of note, the minutes revealed that ECB officials discussed various options to recalibrate QE at the September policy meeting, a recalibration which should proceed in very gradual, cautious manner. And, as Reuters had noted previously, ECB officials “disagreed” on reasons for recent Euro appreciation.
Digging through, the minutes also noted that the Governing Council members had a “preliminary exchange of views about the future monetary policy stance and the considerations that might guide a recalibration of instruments and the transmission channels through which they shape financial conditions and the outlook for price stability,”
Hinting at the upcoming taper, “A view was put forward that conditions were increasingly falling into place that would allow the intensity of monetary policy accommodation to be adapted and would provide an opportunity to scale back the Eurosystem’s net asset purchases.” At the same time, officials were in “broad agreement” that substantial policy support was still needed.
Confirming the confusion over how to tighten, officials discussed “some general trade-offs inherent in various scenarios for the future recalibration of the APP and, in particular, the choice between the pace and the intended duration.” Furthermore, “benefits from a longer intended purchase horizon, combined with a greater reduction in the pace, were compared with those from a shorter period of purchases and larger monthly volume.”
Policymakers also expressed concern about speed of recent euro appreciation and exchange-rate volatility, even if, as noted above, they could not agree on what had caused it.
Separately, the Minutes noted that the third priority for the ECB’s forward guidance was the Euro, emphasizing that: “the recent volatility in the exchange rate represented a source of uncertainty, requiring close monitoring with regard to possible implications for the medium-term outlook for price stability”
“More generally, the point was again made that the overall degree of accommodation was determined by the combination of all the monetary policy measures deployed by the ECB and that the Governing Council’s assessment of progress regarding a sustained adjustment in the path of inflation should apply to the overall design and direction of the ECB’s monetary policy stance as a whole, and not with reference to any particular instrument in isolation, such as the duration and pace of APP purchases.”
In other words, if and when the EURUSD spikes or tumbles, the ECB vows that it will rush right in to mitigate any volatility, in hopes of avoiding said volatility in the first place. No surprise then, that the EURUSD is unchanged on today’s minutes.
Separately, ECB board member Benoit Coeure discussed volatility in asset purchases for individual countries in the Sept. 6-7 policy meeting, focusing on the recent debate whether the ECB was actively deviating from its capital key. Coeure recalled that ECB has some flexibility in implementing QE. As the minutes clarify, the ECB decided to spread reinvestment of proceeds from French bonds maturing in July 2017 over several months, which temporarily caused a decline in share of French bonds in net purchases and a perceived over-allocation for other countries. “This outcome had been misinterpreted by some market participants as an active policy choice by the ECB, which was not the case.”
The discussion is meant to address debate over the ECB’s deviation from its capital key limits, although should the ECB continue QE at its current pace, diplomatic explanations will not work very soon as – without any notable changes to the QE program – the ECB will soon run out of eligible Bunds to monetize.
Catalan bonds fall in price (rise in yield) as they hit the panic button on independence odds. Rumours of a stall helps the markets but if they declare their independence on Monday, chaos will reign supreme
Spanish Banks Hit Panic Button As Independence Odds Soar But ‘Stall’ Rumor Sparks Buying-Panic
Catalonia’s bid to separate from Spain had prompted investors to dump bonds issued by the region’s two biggest lenders, CaixaBank SA and Banco de Sabadell SA. Today, in a signal that the banks are taking the likelihood of Catalonia independence very seriously, Sabadell has called a board meeting to approve a change of headquarters outside of the region.
The last few days’ drop in Catalonia’s biggest bank bonds has prompted an even more serious reaction by the banks themselves.
Sabadell notified the Spanish stock regulator CNMV that it will hold a board meeting today at 5pm local time on the possible change of location of its corporate HQ.
Bloomberg reports that the move was prompted by “uncertainty” from the challenge presented by independence movement, citing unidentified people in the market.
Sabadell officials offered no denial, saying HQ change would be to guarantee the legal safety that’s currently provided by the European Central Bank.
And as is clear, this is having a positive impact on the bonds (albeit modest).
Furthermore, Spanish Economy Minister Luis de Guindos told Bloomberg this morning that Catalan banks have indicated that if this process goes on, they are totally open to relocate their headquarters to other places in Spain.
Speaking on Thursday in a Bloomberg Television interview, de Guindos slammed the Catalan administration for its illegal actions and said independence is out of the question. Spain has nothing to discuss with the secessionists until rule of law is restored, he said. The instability may persuade Catalan banks to shift out of the region, he added.
“They have indicated that if this process goes on, they are totally open to relocating their headquarters to other places in Spain,” de Guindos said.
“This is a clear indication of how insane is the regional government of Catalonia.”
The bottom line indication from these moves is simple – the banks (and the government) are increasingly convinced that Catalan independence is going to happen.
And judging by Spain’s decoupling from Germany…
And Catalonia’s decoupling from Spain…
The market is not waiting for the final decision, even as Bloomberg reports that, according to two people familiar with their plans, Catalan separatists are trying to find a way to put off a definitive declaration of independence to create space for a negotiated settlement with Spain.
The movement’s leaders are divided over their next step, with hardliners from the party CUP demanding the regional government make good on its plans for a unilateral declaration of independence following Sunday’s illegal referendum, according to the people, who asked not to be named because the conversations are private.
Regional President Carles Puigdemont’s mainstream separatist group is concerned that such a move would have immediate negative consequences for the economy, the people said.
We find this a little doubtful and very interesting timing ahead of Monday’s planned separation, that could well be designed to sow some more chaos as the establishment continues to paint the Catalonia-independence-voters as extremists…
Markets are ready to bounce on any headline…
Spanish Economy Minister Luis de Guindos said in a Bloomberg Television:
“The group within the Catalan government that is calling the shots is the CUP, an extremely radical group with a lot of anarchist links and they are the ones setting the agenda… Everybody has started to realize.”
“This is not a question of arbitration or mediation, it is a question of a government that has to enforce the law.”
“There is nothing to negotiate without the full respect of the rule of law.”
Additionally, Bloomberg admits that a spokesman for the Catalan government didn’t respond to three calls and other messages seeking comment.
the pound crashes as it looks like England will experience another Mutiny on the Bounty with respect to Prime Minister May:
Cable Crashes To 1-Month Lows As May Mutiny Mounts
On the heels of our earlier note regarding the disastrous speech Theresa May gave yesterday and the backlash from her own party, it appears the mutiny is mounting as The Telegraph reports that Tory rebels have said that there is a “50/50” chance they will confront Theresa May in the next three days and demand that she steps down before the end of the year.
Ed Vaizey, a former minister, today became the first Tory MP to break ranks and said that “quite a few people are firmly of the view that she should resign” after her disastrous conference speech.
The Telegraph understands that the rebels, who have the support of around 30 Tory MPs, believe there is a “small window of opportunity” to force the Prime Minister out.
They say that if they can attract sufficient support they will confront the Prime Minister directly and tell her to go.
“It has to be all or nothing,” one of the Tory MPs said.
“We can’t have a situation where a few go public with their criticism and the rest fade away. There is a small window of opportunity here, more people are coming forward.
“This is not about any personal animosity towards Theresa May. She just no longer seen as credible or competent.”
The reaction in cable is clear – as the pound drops to one-month lows…
Once again, we are reminded of Kit Juckes’ comments overnight:
If collapsing props, coughing fits and a comic interruption are all that matter than politics truly is all about style rather than substance, but the pound is a little weaker on the back of this news but it’s still ‘bumping along the bottom’ rather than heading into uncharted waters.
If EUR/USD has limited downside, so too does GBP/USD. Olivier pointed out yesterday that the lower spot provides the opportunity to Buy distant OTM calls, as the GBP risk is now getting very asymmetric.
The stall rumour is false: The Catalan Parliament is to hold its necessary debate on separation on Monday
Defying Spanish Defense Ministry’s Civil War Threat, Catalans To Hold Debate Monday
Spanish (and European) stocks surged this afternoon as headlines crossed that Catalan separatists were hoping to ‘stall’ proceedings in hope of negotiating with Madrid. That hopeful headline appears to have been crushed now as Bloomberg reports the Catalan regional parliament intends to meet as planned Monday, defying a suspension by Spain’s Constitutional Court.
As Bloomberg reports, Jordi Sanchez, who heads the Catalan National Assembly, said that lawmakers may need to gather in an alternative venue, but that the debate on an illegal referendum on independence from Spain will take place. Sanchez collaborates closely with Regional President Carles Puigdemont and the speaker in the Catalan legislature, Carme Forcadell. He helped organize the vote on Oct. 1.
“There will be some formula for the Catalan Parliament to convene and hold its meeting as planned,” Sanchez said in an interview in Barcelona.
“There will be a plenary session.”
While separatists are split on whether to declare independence next week, they are agreed that they need to hold the session on Monday to sustain the momentum in their campaign – clearly signalling that the ‘stall’ rumor was false.
Additionally, confirming the earlier concerns, Banco Sabadell has decided to move its corporate registered address outside of Catalonia, Europa Press reported, and Reuters reports that Spanish authorities will on Friday approve a decree that makes it easier for companies to transfer their legal base out of Catalonia.
The decree is tailor-made for Spanish lender Caixabank and would allow the bank to change its legal and tax base without having to hold a shareholder’s meeting.
Bank bonds bounced but were unconvinced that this solves the Catalan region’s largest lenders’ problems…
However, perhaps most ominously, TheSpainReport.com reports that the Spanish Defense Minister has warned “everything outside of democracy is a threat to our nation.”
Spain’s Defence Minister, María Dolores de Cospedal (PP) said on Thursday morning during a conference about women in the Spanish armed forces…
“The state of law has a duty to defend its citizens and therefore the duty to defend liberty and the law, because in a democracy the law is made by all of us.”
“Either you are with the law or you are against it.”
“With the law in hand, from a position of unity and addition, of institutional respect and with rules we have all given ourselves, we can continue to build a project that has been the most successful one in recent world history.”
“The Constitution and our entire body of laws are our ensign but at the same time give us the instruments and means to protect our nation.”
“It is in our legislation where all of us, absolutely all of us, are equal. It is precisely the law that makes us equal and avoids the tyranny of a few on the rest.”
“That is precisely why no one can ignore it because they are placing themselves not only outside of the law but mean to place themselves above others.”
Why is this so ominous?
Simple, Article 8 of the Spanish Constitution states that Spain’s Armed Forces have the “mission of guaranteeing the sovereignty and independence of Spain, of defending her territorial integrity and constitutional order”.
In other words – if the Catalans push for secession, thus breaking the ‘territorial integrity’ of the sovereign state, then Spain can send in the military to ‘fix’ the problem.
5. RUSSIA AND MIDDLE EASTERN AFFAIRS
(Trump Expected To “Decertify” Iran Nuclear Deal Next Thursday
Update: Confirming our note from earlier this morning, the Washington Post has just confirmed that President Trump will deliver a speech next Thursday to officially announce plans to “decertify” the international nuclear deal with Iran. According to WaPo, Trump is expected to lay out a broader strategy with respect to Iran but will stop short of reimposing sanctions that would nullify the agreement.
President Trump plans to announce next week that he will “decertify” the international nuclear deal with Iran, saying it is not in the national interest of the United States and kicking the issue to a reluctant Congress, people briefed on an emerging White House strategy for Iran said Thursday.
The move would mark the first step in a process that could eventually result in the resumption of U.S. sanctions against Iran, which would blow up a deal limiting Iran’s nuclear activities that the country reached in 2015 with the U.S. and five other nations.
Trump is expected to deliver a speech, tentatively scheduled for Oct. 12, laying out a larger strategy for confronting the nation it blames for terrorism and instability throughout the Middle East.
Under what is described as a tougher and more comprehensive approach, Trump would open the door to modifying the landmark 2015 agreement he has repeatedly bashed as a raw deal for the United States. But for now he would hold off on recommending that Congress reimpose sanctions on Iran that would abrogate the agreement, said four people familiar with aspects of the president’s thinking.
All cautioned that plans are not fully set and could change. The White House would not confirm plans for a speech or its contents. Trump faces an Oct. 15 deadline to report to Congress on whether Iran is complying with the agreement and whether he judges the deal to be in the U.S. national interest.
* * *
In the months leading up to the November 2016 election, Trump repeatedly referred to Obama’s secretive Iran Nuclear deal as “the worst deal I’ve ever seen negotiated” (here’s just one example). Of course, for a man who only speaks in absolutes, it’s difficult to know what that meant for the fate of the deal but it didn’t sound positive, nonetheless.
Now, according to the Washington Free Beacon, Trump, over the objections of Secretary of State Rex Tillerson and Secretary of Defense James Mattis, could declare Iran in breach of Obama’s deal as early as next week and set the stage for Congress to once again impose stiff sanctions on the Islamic Republic.
The Trump administration is expected to announce next week that it will not formally certify Iran as in compliance with the landmark nuclear agreement, a move that could kill the agreement and set the stage for Congress to reimpose harsh economic sanctions on the Islamic Republic, according to multiple U.S. officials and sources familiar with the situation.
While some senior Trump administration officials—including Secretary of State Rex Tillerson and Secretary of Defense James Mattis—are pushing for President Donald Trump to preserve the deal, it has become increasingly clear the president is frustrated with Iran’s continued tests of ballistic missile technology and rogue operations targeting U.S. forces in the region, according to these sources.
Designating Iran as in non-compliance with the deal would loosen restrictions on how the United States can target Tehran and the Iranian Revolutionary Guard Corps, or IRGC, which has been the main entity behind Iran’s military operations in Syria and elsewhere in the region. It also would allow the administration to save face in the short-term by not technically walking away from the agreement.
The final nail in the coffin, these sources said, was the recent admission by the International Atomic Energy Agency, or IAEA, that it cannot fully assess whether Iran is working on sensitive nuclear explosive technology due to restrictions on inspections and specific sites in the Islamic Republic.
Still, according to the Financial Times, the increasing rhetoric from the White House could be nothing more than an effort to “minimize political embarrassment” while ultimately “maintaining the deal.”
Western officials say Mr Trump is frustrated by rules that require him to certify an agreement he framed as the “worst deal ever” every 90 days, in keeping with a 2015 law giving Congress oversight of the agreement.
“He is looking for options that minimise the domestic political embarrassment of ultimately maintaining the deal,” said a western official.
Of course, Tillerson and Mattis are not alone in their opposition to withdrawing from the controversial deal as several other military and intelligence experts argue that some oversight is preferable to none at all.
Retired four-star Gen. Michael Hayden, former head of the National Security Agency, told the Free Beacon that there are always challenges to ensuring Iranian compliance. However, some level of inspections is better than none at all.
“Confirming compliance is always challenging,” Hayden said, echoing the thinking of many current and former U.S. officials. “That’s why the intelligence folks always insist on an invasive monitoring regime. That combined with national capabilities should give you reasonable confidence.”
“The chairman of the Joint Chiefs said yesterday that Iran was not in material breach of the deal,” Hayden noted. “That looks to be true and I would expect the intelligence community to be able to detect significant breaches.”
The chief challenge is ensuring Iran is not cheating on the deal by engaging in illicit research activities or other types of nuclear work that are less easy to detect, according to Hayden.
“Cheating around the edges would be a different matter,” he said. “Of course, all this would be harder to do if the deal collapsed and the international inspectors were no longer able to perform even their current tasks.”
Meanwhile, Senator Ted Cruz, a long-time, vocal opponent of the deal, maintains that Trump has no option but to decertify Iran and allow Congress to enact harsh penalties because of the IAEA’s admission that Iran continues to refuse them access to various military facilities – a clear requirement of the terms of the deal.”
“The IAEA’s admission that they are unable to verify a fundamental provision under the nuclear deal—that the Iranians are not engaging in activities or using equipment to develop a nuclear explosive device—is highly alarming. In these circumstances, issuing a compliance certification would be serious mistake,” Cruz said.
“If the Iranians are serious about a peaceful program, they need to prove it. Iran’s continued refusal to allow IAEA access to military sites—a clear requirement of the terms of the deal—renders the JCPOA utterly ineffective, and, even worse, a sham that only facilitates Iran’s acquiring nuclear weapons,” Cruz said. “This absence of any meaningful verification is yet another reason to vitiate this foolhardy agreement.”
Other administration insiders who spoke to the Free Beacon said the president no longer wants to pretend the deal is working.
“The president already knew that continued sanctions relief to Iran was inappropriate and not in our interest given their behavior, which was more than enough to decertify. He said so repeatedly,” said one veteran Iran analyst close to the White House and privy to discussions about the matter. “Now there’s this new issue where the IAEA just admitted publicly they’ve been unable to verify entire sections of the deal, which makes the whole thing a no-brainer.”
“Decertifying clears a lot of clutter off the table because our guys no longer have to pretend the deal is a good deal,” the source said. “They can let it stay in place for a while or try to fix it, all while focusing on the rest of Iran’s aggression.”
So what say you…is some oversight better than none at all or is Trump right that the United States is just getting outwitted by a cunning adversary.
If Saudi Arabia announces big deals with Russia. If the Saudis price their oil in yuan just like Russia that would be the nail in the coffin of the uSA Petro scheme.
Russia, Saudi Arabia Announce Billions In Energy, Military Deals, During Historic King Salman Visit
Two days ago, when we previewed the first ever visit by a Saudi King to the Russian capital – a move which prompted Bloomberg to call Russian president Putin the “new master of the Middle East” – we pointed out that according to Russian Energy Minister Alexander Novak, a joint Russian-Saudi fund to invest in the energy sector will be announced during the forthcoming visit of the Saudi King to Moscow, and that the preliminary agreement to establish the $1 billion fund has already been reached.
Fast forward to today when diplomatic history was made on Thursday, when Putin met with the King of Saudi Arabia Salman bin Abdulaziz Al Saud – the first state visit to Russia by a reigning Saudi monarch – and the launch of a new level of relations between the countries, as well as billions in new energy-focused deals (for more on the strategic implications from the summit, please read this).
Saudi Arabia’s King Salman and Russian president Vladimir Putin, Oct.5, 2017
The Saudi monarch’s visit comes after decades of strained relations. More recently, tensions were high over the war in Syria. Russia and Iran have staunchly backed Syrian President Assad while Saudi Arabia has supported the Sunni rebels fighting to oust him. However, relations began to improve in recent years and Salman’s heir, Crown Prince Mohammed bin Salman, has held several meetings with Putin.
There are also common points: the Saudi kingdom, much like Russia, has been hit by the fall in oil prices since mid-2014. Despite regional disagreements, the world’s two largest oil-producers found common ground on energy policy in November, when they led a deal between OPEC and non-OPEC states to cut production in a bid to shore up crude prices. So far that deal is holding and prices have recovered slightly to above $50 a barrel. In an apparent reference to the output deal, Salman told Putin on Thursday that Saudi Arabia is “eager to continue the positive cooperation between our nations in the world oil market, which fosters global economic growth.”
After the meeting, as noted before, the two countries launched a joint energy investment fund worth $1 billion, which could include investments in natural gas projects and petrochemical plants. Among the deal signed, Saudi state oil firm Aramco, the world’s biggest energycompany, signed a deal with Russian Direct Investment Fund (RDIF) and gas processing and petrochemicals company Sibur on joint projects in the area of oil refining. Amin Al-Nasser, Aramco chief executive said: “This marks a new milestone in business relations and partnerships with our counterparts in Russia. The visit by The Custodian of The Two Holy Mosques King Salman bin Abdulaziz Al-Saud to Russia will further enhance ties and will foster collaboration among Saudi and Russian companies on various fronts.”
Aramco also signed a memorandum of cooperation with Russian state-owned oil company Gazprom Neft, to collaborate on drilling technologies and research and development areas, as well as employee exchange programs. According to the FT, Alexander Dyukov, chief executive of Gazprom Neft, said:
Given the ongoing macroeconomic uncertainties, it is of paramount importance that major oil producers coordinate their activities to improve the stability of the global oil and gas market. An important component of such engagement concerns sharing cutting-edge technological solutions and working together to improve efficiency in oil production and refining.
Putting the deals in context, trade volume between the two countries reached $2.8 billion last year, according to official Saudi press. Saudi Arabia’s Public Investment Fund, the kingdom’s sovereign wealth fund, announced in 2015 plans to invest $10 billion in Russia over the next five years, though only a fraction of that has so far been put up.
In an unexpected twist, the two countries also agreed to cooperate in nuclear energy, agriculture, information technology; trade, investments and social development.
“We have a vast potential for developing cooperation in nuclear power. Saudi Arabia plans to launch a major nuclear power program,” said Russian Energy Minister and Co-Chairman of the Russian-Saudi Intergovernmental Commission Aleksandr Novak.
“Nuclear power may become one of the basic sources and an extra catalyst for the development of various industries and innovation technologies in Saudi Arabia,” he added. That Saudi Arabia , the world’s largest oil exporter, is planning on using Russian help to build NPPs will certainly raise a few eyebrows.
In addition to importing Russian nuclear technology, the Saudis also appear ready to expand food imports from Russia, which is set to remain the world’s biggest wheat exporter this year. Food security is a major concern for Saudi Arabia, which stopped local production of livestock feed and wheat due to water scarcity.
Novak said that for the first time a substantial delegation from Saudi Arabia, including about 200 representatives and 85 CEOs of large companies has come to Russia. “Eighty-five heads of the largest companies flew to Russia to establish links with Russian businesses and expand ties in all areas,” the minister said.
Just as notably, Novak said that relations between the two countries have reached a “fundamentally new level recently,” Novak said. “Parliamentary contacts show good dynamics and the two countries business circles maintain intensive dialogue,” he said, adding that that significant progress has been made. Novak added that work is underway on a roadmap for the mid-term development of trade, economic, scientific and technical cooperation between Moscow and Riyadh.
Putin and Salman are also expected to focus on extending the OPEC oil output cut agreement which has helped prop up oil prices. On Wednesday, Putin said he believes the oil cut agreement between OPEC and non-OPEC countries could be extended beyond March 2018. The next OPEC meeting is due to take place in Vienna at the end of November.
Relations between the two countries had traditionally been strained, especially during the Cold War when Saudis helped arm Afghan rebels fighting against the Soviet invasion. In recent years, however, strong relations between Saudi Arabia and the US have frayed, forcing Saudi Arabia to look for regional alliances elsewhere. Earlier on Thursday, Russian Foreign Minister Sergey Lavrov said Russia thinks highly of Saudi Arabia’s role in arranging talks between the Syrian government and the oppositions in Geneva.
* * *
In a dramatic announcement as part of today’s meeting, Saudi Arabia also announcedf it has agreed to buy Russian S-400 surface-to-air missile systems, according to Saudi-owned al-Arabiya television reported on Thursday. The countries also signed a memorandum of understanding to help the kingdom in its efforts to develop its own military industries, a statement from state-owned Saudi Arabian Military Industries said.
According to Reuters, SAMI said the MoU with Russian state-owned arms exporter Rosoboronexport came in the context of contracts signed to procure the S-400, the Kornet-EM system, the TOS-1A, the AGS-30 and the Kalashnikov AK-103.
While SAMI did not specify the number of each system or the value of the procurement deal, it said the procurement was “based on the assurance of the Russian party to transfer the technology and localize the manufacturing and sustainment of these armament systems in the Kingdom”, but provided no timeframe.
This means that after Iran and Turkey, the Russian war machine has expanded to Riyadh, which as a reminder bought hundreds of billions in weapons from the US this spring.
Is Israel next in line to buy Russian weapons?
* * *
While Salman’s visit signals closer Russian ties with Sunni Arab Gulf states, Russia’s support for its close regional ally, Iran is not expected to change. The U.S., meanwhile, remains Saudi Arabia’s top weapons supplier and its most critical Western ally.
Some, such as Anna Borshchevskaya, a fellow at The Washington Institute for Near East Policy, says Russia has no capacity to replace the United States as Saudi Arabia’s key ally.
Others are not so sure. Cited by ABC, analysts said Salman’s trip to Moscow is the clearest sign yet that Russia’s strategy in the Middle East, including its high-risk show of military power in Syria, has paid off.
“A number of Gulf leaders have been going with greater regularity to Moscow and I think for a simple reason: Russia has made itself much more of a factor in key parts of the Middle East as the U.S. has taken a step back in some ways, particularly in Syria,” said Brian Katulis, a senior fellow at the Center for American Progress.
Or, as Bloomberg put it, “the Israelis and Turks, the Egyptians and Jordanians — they’re all beating a path to the Kremlin in the hope that Vladimir Putin, the new master of the Middle East, can secure their interests and fix their problems. The latest in line is Saudi King Salman.”
6 .GLOBAL ISSUES
The attack in Edmonton this week has been arrested and charged in Canada. He is a Somali terrorist and was previously deported from the USA in 2011. Canada must have done a thorough job when he entered Canada
Somali Terrorist Charged In Canada Attack Was Previously Deported From The U.S.
Over the past year, amid Donald Trump’s crackdown on refugees and illegal immigrants, Canada has emerged as a willing safe harbor for those whose welcomes (and visas) in the US had expired. This past January, in response to Trump’s executive order on immigration, Canada’s Prime Minister Justin Trudeau tweeted “To those fleeing persecution, terror & war, Canadians will welcome you, regardless of your faith,” adding that “Diversity is our strength.”
To those fleeing persecution, terror & war, Canadians will welcome you, regardless of your faith. Diversity is our strength #WelcomeToCanada
— Justin Trudeau (@JustinTrudeau) January 28, 2017
Unfortunately, it has also emerged to be Canada’s deadly weakness. Recall that on Sunday, in a rare – for Canada – terrorist incident, a Somali man 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. Ultimately, four pedestrians and the officer were injured when the U-Haul truck being driven by the suspect struck them.
A few days later, we now know that if only Canada had a slightly less porous border with the US, the attempted murder could have been avoided because as Reuters reports, the Somali refugee accused of stabbing an Edmonton police constable on the weekend and running down four pedestrians was ordered to be deported from the United States in 2011 by a U.S. immigration judge.
In July 2011, U.S. Customs and Border Protection transferred the suspected terrorist, Abdulahi Hasan Sharif, into the custody of U.S. Immigration and Customs Enforcement at Otay Mesa Detention Center in San Diego, Calif., according to Jennifer D. Elzea, acting press secretary for the ICE office of public affairs. Two months later, on Sept. 22, 2011, an immigration judge ordered Sharif removed to Somalia. Sharif waived his right to appeal that decision.
However, under the previous administration’s lax regime, Sharif was released on Nov. 23, 2011, on an ICE “order of supervision” due to a “lack of likelihood of his removal in the reasonably foreseeable future,” Elzea said in a statement. Sharif failed to report to the ICE enforcement and removal operations centre on his scheduled date, Jan. 24, 2012.
“Efforts by ERO San Diego to locate him were not successful,” Elzea said, and since Sharif had no known criminal history at the time of his dealings with ICE, he was a low profile target.
Then, some time in 2012, Sharif crossed the border into Canada Public Safety Minister Ralph Goodale said Monday in Ottawa. Goodale said Sharif arrived through a “regular port of entry” and obtained refugee status at the time, adding that – just like in the US – in 2012 immigration officials had no reason to red flag Sharif.
Then, in 2015, a complaint led police to probe Sharif’s alleged extremist ideology, but officers found no grounds for criminal charges after what the Royal Canadian Mounted Police described as an “exhaustive investigation.”
* * *
It’s not known at present whether Sharif made an asylum claim while in the United States. If he did, and that claim was rejected, normally Sharif wouldn’t be able to make a claim in Canada under the Safe Third Country Rule, said Calgary immigration lawyer Michael Greene quoted by CBC. But Canada has made exceptions for minors or people with family in Canada, Greene said. “An asylum seeker or potential refugee claimant, even if they’ve been in the U.S., can still in some cases make a refugee claim here,” he said.
A spokesperson for the Office of the Minister for Immigration, Refugees and Citizenship Canada confirmed in an email statement Tuesday that Sharif “entered Canada from the United States through a regular Port of Entry in 2012 and was found to be a refugee later that year. “According to U.S. authorities, he was not detained for criminal activity,” the spokesperson added.
“In general it is to be noted that only individuals who are inadmissible, including for serious criminality, would be ineligible to make an asylum claim. Being detained for immigration purposes in another country would not prevent someone from being able to make an asylum claim in Canada.”
* * *
Fast forward to this week, when Sharif, who faces 11 charges including five counts of attempted murder, made a brief first appearance Tuesday in an Edmonton courtroom wearing an orange jail uniform. At his court appearance, Sharif had bruises on his forehead and cheek that Edmonton police said resulted during two vehicle crashes on Saturday night. A Somali interpreter helped him during the proceedings.
He had a Somali interpreter, although he did not speak. He occasionally looked down or clasped his hands in front of him and still bore facial bruises that police say he sustained while evading capture. A community leader, Mahamad Accord, who did not speak to Sharif but learned about him from the local Somali community, said Sharif was from a Somali ethnic minority and little known in the community.
Sharif’s lawyer, Chady Moustarah, said he had stepped in on short notice to help someone without representation but that the accused would have to find another lawyer going forward. Sharif remains in custody until his next court appearance, scheduled for Nov. 14.
* * *
Will the terrorist incident be a wake up call to Canada? It appears not: Canada’s Public Safety Minister Goodale said that events in Edmonton over the weekend in no way indicate that Canada’s screening process needs to be enhanced, or that the system failed.
7. OIL ISSUES
8. EMERGING MARKET
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings THURSDAY morning 7:00 am
Euro/USA 1.1723 DOWN .0034/ 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 GERMAN DAX
USA/JAPAN YEN 112.59 DOWN 0.217(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 1.3131 DOWN .0103 (Brexit March 29/ 2017/ARTICLE 50 SIGNED
THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS
USA/CAN 1.25421 UP .0023 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS THURSDAY morning in Europe, the Euro FELL by 34 basis points, trading now ABOVE the important 1.08 level RISING to 1.1723; / Last night the Shanghai composite CLOSED / Hang Sang CLOSED /AUSTRALIA CLOSED UP 0.01% / EUROPEAN BOURSES OPENED ALL GREEN EXCEPT GERMAN DAX
The NIKKEI: this THURSDAY morning CLOSED UP 1.90 POINTS OR 0.01%
Trading from Europe and Asia:
1. Europe stocks OPENED IN THE GREEN EXCEPT GERMAN DAX
2/ CHINESE BOURSES / : Hang Sang CLOSED / SHANGHAI CLOSED /Australia BOURSE CLOSED UP 0.01% /Nikkei (Japan)CLOSED UP 1.90 POINTS OR 0.01% / INDIA’S SENSEX IN THE GREEN
Gold very early morning trading: 1275.00
Early THURSDAY morning USA 10 year bond yield: 2.341% !!! UP 2 IN POINTS from WEDNESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)
The 30 yr bond yield 2.884, UP 2 IN BASIS POINTS from WEDNESDAY night. (POLICY FED ERROR)
USA dollar index early THURSDAY morning: 93.78 UP 32 CENT(S) from WEDNESDAY’s close.
This ends early morning numbers THURSDAY MORNING
And now your closing THURSDAY NUMBERS
Portuguese 10 year bond yield: 2.404% DOWN 1 in basis point(s) yield from WEDNESDAY
JAPANESE BOND YIELD: +.046% DOWN 3 in basis point yield from WEDNESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.699% DOWN 10 IN basis point yield from WEDNESDAY
ITALIAN 10 YR BOND YIELD: 2.150 DOWN 2 POINTS in basis point yield from WEDNESDAY
the Italian 10 yr bond yield is trading 45 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.460% DOWN 1/3 IN BASIS POINTS ON THE DAY
IMPORTANT CURRENCY CLOSES FOR THURSDAY
Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/400 PM
Euro/USA 1.1712 DOWN .0044 (Euro DOWN 44 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 112.79 DOWN 0.024(Yen UP 2 basis points/
Great Britain/USA 1.3182 DOWN 0.01140( POUND DOWN 114 BASIS POINTS)
USA/Canada 1.2561 UP .0081 Canadian dollar DOWN 81 basis points AS OIL ROSE TO $50.79
This afternoon, the Euro was FELL 44 basis points to trade at 1.1712
The Yen ROSE to 112.79 for a GAIN of 2 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 114 basis points, trading at 1.3181/
The Canadian dollar FELL by 81 basis points to 1.2561, WITH WTI OIL RISING TO : $50,79
Your closing 10 yr USA bond yield UP 2 IN basis points from WEDNESDAY at 2.3480% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.8904 UP 3 in basis points on the day /
Your closing USA dollar index, 93.90 UP 44 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 THURSDAY: 1:00 PM EST
London: CLOSED UP 40.41 POINTS OR 0.54%
German Dax :CLOSED DOWN 2.47 POINTS OR .02%
Paris Cac CLOSED UP 15.98 POINTS OR 0.30%
Spain IBEX CLOSED UP 249.80 POINTS OR 2.51%
Italian MIB: CLOSED UP 109.65 POINTS OR 0.49%
The Dow closed UP 113.73 OR 0.50%
NASDAQ WAS closed UP 50.73 POINTS OR 0.78% 4.00 PM EST
WTI Oil price; $50.791:00 pm;
Brent Oil: 56.96 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 57.72 DOWN 3/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 3 BASIS PTS)
TODAY THE GERMAN YIELD RISES TO +0.460% FOR THE 10 YR BOND 4.PM EST EST
This ends the stock indices, oil price, currency crosses and interest rate closes for today
Closing Price for Oil, 4 pm/and 10 year USA interest rate:
WTI CRUDE OIL PRICE 5:00 PM:$50.79
USA 10 YR BOND YIELD: 2.348% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.890%
EURO/USA DOLLAR CROSS: 1.1712 DOWN .0044
USA/JAPANESE YEN:112.79 DOWN 0.024
USA DOLLAR INDEX: 93.90 UP 44 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.3182 : DOWN 114 POINTS FROM LAST NIGHT
Canadian dollar: 1.2561 DOWN 81 BASIS pts
German 10 yr bond yield at 5 pm: +0.460%
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
S&P Surges To Longest Record-High Streak In 20 Years As Dollar Spikes
Despite a slump in consumer confidence, stocks just keep on chugging higher…
Another Day, Another Record High – S&P up 8 days in a row (longest win streak in 4 years) and 6 record highs in a row (longest streak since 1997) and today was the best day in a month…
VIX traded as low as 9.13 today…
The S&P 500 is now within 50 points of Goldman Sachs’ year-end-target… for 2019!
Nasdaq led today (thanks to NFLX) with Trannies lagging… but from 1230ET markets were deadstick ahead of tomorrow’s NFP…
Netflix raises prices and the stock soars to record highs…
Dragging FANGs back near July’s record highs…
UPS and FDX woke up to AMZN headlines but that was just what the BTFDers wanted…
Exactly as we said it would: “Not surprisingly, FedEx and UPS investors were not thrilled with the encroachment on their business…though we’re sure they’ll ditch their ephemeral bout of depression and push the stocks to brand new highs by the afternoon. Just another opportunity to BTFD.“
Notably “high-tax” companies are now significantly underperforming the market since Trump’s Tax Plan was unveiled…
While Small Caps continue to be bid… someone is loading up on protection…
Treasury yields closed higher on the day but remains in a very narrow range this week…
The Dollar Index soared today (up most since January to its highest since July), starting early thanks to cable weakness (Theresa May mutiny) and extending on strong US data…
Seems pretty clear who is really running the show with the dollar?
Or maybe it’s this?
Gold was lower on the day as copper and crude bounced at 8amET…
Gold broke below its 100DMA as WTI manage to be rescued off the crucial $50 level…
Finally, sine Janet Yellen’s first warning in July 2014: “Equity market valuations appear stretched”
- S&P +29%
- Nasdaq +53%
- DOW +33%
Late tonight: OMINOUS!!!
President Trump Warns Ominously: “It’s The Calm Before The Storm”
During a dinner with military leaders tonight, President Trump gave an ominous warning seemingly out of the blue…
“You guys know what this represents? Maybe it’s the calm before the storm,” he said.
“It could be the calm… before… the storm.”
A reporter quickly asked what the storm might be –“Is it Iran, ISIS, what’s the storm?” to which he replied…
“…you’ll find out.”
As the following clip shows, it is hard to know if this bluster from the President to impress his audience, or a concerning sign of things to come…
TRUMP: “Maybe it’s the calm before the storm.”
REPORTER: “What storm Mr. President?”
TRUMP: “You’ll find out.” (via Satellite News) pic.twitter.com/bWMzGrDPNa
— Kyle Griffin (@kylegriffin1) October 5, 2017
USA trade balance shrinks more than expected as deficits with both China and the EU decline
US Trade Balance Shrinks More Than Expected As Deficits With China, EU Decline
The U.S. trade deficit shrank 2.7% in August 2017, declining from a downward revised $43.6 billion in July to to $42.4 billion in August, better than the $42.7 billion expected, as exports increased by 0.4% to $195.3 billion and imports decreased by 0.1% to $238.1 billion. This was the smallest trade deficit since last September, and was the result of a decline in the goods deficit by $0.9 billion to $64.4 billion, offset by an increase in the service surplus $0.3 billion to $22.0 billion. The US trade deficit excluding petroleum products was $37.55 billion.
Breaking down the details, Exports of goods and services increased $0.8 billion, or 0.4 percent, in August to $195.3 billion. Exports of goods increased $0.6 billion and exports of services increased $0.2 billion.
- The increase in exports of goods mostly reflected increases in consumer goods ($1.0 billion) and in capital goods ($0.4 billion). Decreases in industrial supplies and materials ($1.0 billion) and in food, feeds, and beverages ($0.4 billion) partly offset the increases.
- The increase in exports of services mostly reflected increases in travel (for all purposes including education) ($0.1 billion), in other business services ($0.1 billion), which includes research and development services; professional and management services; and technical, trade-related, and other services, and in financial services ($0.1 billion). A decrease in transport ($0.2 billion), which includes freight and port services and passenger fares, partly offset the increases.
Imports of goods and services decreased $0.4 billion, or 0.1 percent, in August to $237.7 billion. Imports of goods decreased $0.3 billion and imports of services decreased $0.1 billion.
- The decrease in imports of goods mostly reflected decreases in industrial supplies and materials ($0.5 billion) and in capital goods ($0.5 billion). An increase in automotive vehicles, parts, and
engines ($0.7 billion) partly offset the decreases.
- The decrease in imports of services mostly reflected a decrease in transport ($0.2 billion). An increase in travel (for all purposes including education) ($0.1 billion) partly offset the decrease.
Finally, broken down by geography, the August figures show surpluses with South and Central America ($2.7), Hong Kong ($2.5), Singapore ($0.8), United Kingdom ($0.6), and Brazil ($0.4). Meanwhile, deficits were recorded with China ($29.7), European Union ($10.9), Japan ($6.3), Mexico ($5.8), Germany ($4.8), Italy ($2.5), South Korea ($2.1), India ($1.6), Taiwan ($1.5), France ($0.8), OPEC ($0.8), Canada ($0.4), and Saudi Arabia ($0.1).
However, what may be more interesting to Trump will be that in the last report, the US deficit with China actually decreased by $2.1 billion to $29.7 billion, as exports increased $0.8 billion to $11.6 billion while imports decreased $1.2 billion to $41.3 billion. In more good news for US manufacturers, the deficit with the European Union decreased $1.2 billion to $10.9 billion in August. Exports increased $1.4 billion to $24.2 billion and imports increased $0.2 billion to $35.1 billion.
Trump Reverses On Puerto Rico Debt Forgiveness: “We Will Follow The Bankruptcy Process”
One day after Donald Trump unleashed turmoil in the municipal market, launching a selling avalanche in Puerto Rico GO bonds which crashed to all time lows, shortly after the president signaled an openness to wipe out Puerto Rico’s debts during an interview with Fox News on Tuesday, the White House has thrown cold water on the prospect of Trump forgiving Puerto Rico debt.
Recall that on Tuesday night, Trump told Sean Hannity that Puerto Rico “owes a lot of money to your friends on Wall Street and we’re going to have to wipe that out,” adding that “You can say goodbye to that.” The next morning Puerto Rico bonds plunged, with the 8s of 2035 tumbling 10 points from 44 to as low as 32, an all time low, before rebounding modestly.
To be sure, the reason for the market freak out is that bondholders were on edge that just like Obama in the GM restructuring fiasco, Trump would overturn the traditional bankruptcy process, and favor one group of stakeholders over another. In this case Trump was convinced that Wall Street is the primary holder of PR bonds, although he may have changed his mind upon learning that well over half of Puerto Rico GO bonds is in retail investor and pension fund hands.
And, as a result, when asked about Puerto Rico’s more than $70 billion in debt, White House press secretary Sarah Huckabee Sanders said that the best thing for the island will be for it to use the normal process set up to deal with its debt. In other words, no debt “wipe out”, and instead the bankruptcy process would be observed.
“There’s a process for how to deal with Puerto Rico’s debt, and it will have to go through that process to have a lasting recovery and growth,” Sanders said Thursday, adding that “that is a process that was put in place and set up under Obama, and has a board of advisers that deals with that debt. It’ll go through that process as we move forward.”
“The president wants that to go through that process and that’s the stage we’re at on that” she concluded. In 2016, Congress established a debt oversight board tasked with controlling the island’s budget and debts as a way to deal with spiraling debt in the country.
Sanders’ comments were the latest attempt by the administration to walk back Trump’s debt forgiveness suggestion: on Wednesday OMB head Mick Mulvaney told CNN that Trump should not be taken “word for word” and later told Bloomberg News “we are not going to pay off those debts.”
Still, despite the administration’s reversal, Puerto Rico bonds have failed to rebound from recent lows, and were just shy of all time lows following Sanders’ statement.
House Passes Budget, Jumps First (Smallest) Hurdle Towards Tax Reform
The House passed its 2018 budget resolution Thursday (with 18 Reps voting against) crossing the first threshold toward its goal of sending tax reform legislation to President Trump.
As WaPo reports, the House budget resolution includes major spending cuts demanded by the party’s conservative wing, but the party’s focus is now on passing a tax bill that could add as much as $1.5 trillion to the budget deficit. Special procedures set out in the legislation would ultimately allow Republicans to pass the bill over a potential Democratic filibuster in the Senate.
“Our budget specifically paves the way for pro-growth tax reform that will reduce taxes for middle class Americans and free up American businesses to grow and hire,” House Budget Committee Chairman Diane Black (R-Tenn.) said during floor debate.
In a 219-206 vote, The Hill reports lawmakers approved a budget resolution for 2018 that sets up a process for shielding the GOP tax bill from a filibuster in the Senate.
A total of 18 Republicans voted against the resolution, along with all the Democrats, but GOP lawmakers hailed the vote as meaningful because of the tax measure.
“We haven’t reformed this tax system since 1986. We need to pass this budget so we can help bring more jobs, fairer taxes, and bigger paychecks for people across this country,” Speaker Paul Ryan (R-Wis.) said during House floor debate.
Ironically, Democrats lambasted it for the same reason.
“This budget isn’t about conservative policy or reducing the size of our debt and deficits. It’s not even about American families. This budget is about one thing – using budget reconciliation to ram through giant tax giveaways to the wealthy and big corporations – and to do it without bipartisan support,” said Rep. John Yarmuth (D-Ky.), the ranking member of the House Budget Committee.
The Senate is proceeding on a separate track toward passing its own budget, which will have to be reconciled with the House version in the coming weeks.
Yet, as The Hill notes, there are already signs of trouble, with some Republicans questioning whether the tax proposal would add too much to the deficit, and others balking at plans to eliminate a deduction for state and local taxes. The tax plan is now estimated to add $1.5 trillion to the deficit over a decade, but that figure would grow if the state and local tax deduction is not eliminated.
US Consumer Comfort Plunges Most In 13 Months As ‘Personal Finance’ Fears Mount
Americans’ confidence suffered its biggest weekly setback in more than a year as optimism about personal finances slumped according to Bloomberg’s Consumer Comfort Index figures.
- Consumer comfort measure dropped to 49.9 from 51.6, the sharpest decline since September 2016
- Index of personal finances fell to 57.1 from 60.1, the biggest decrease since August 2016
- Gauge of current views on the economy slipped to 50.9 from 51.8
- Index of buying climate deteriorated to 41.5 from 42.8
The headline index is down 4 of the last 5 weeks… the biggest drop since Sept 2016.
As ‘Personal Finances’ plunge (despite soaring record highs in stocks…
However, one interesting data point is that sentiment among black respondents rose to its highest level since November and fell among whites to the lowest since mid-July…
Bloomberg highlights the key takeaways as:
The data marked the fourth decline in the last five weeks following a 16-year high at the end of August. The index, now the lowest since July, is down 3.4 points from that peak.
The weakness was driven by a sudden drop in optimism about personal finances, which had reached a three-month high a week earlier. The result may partly reflect what Americans are paying at the gas pump, as prices remain elevated after climbing sharply in response to Hurricane Harvey.
Sentiment was particularly weak among women, with the gauge falling to the lowest level since January on more concern about personal finances and the economy. In contrast, male respondents were more upbeat, leading to the widest gender gap since December 2006.
A little rise in durable goods and factory orders as August levels rebound from July but still down on a two month basis
Durable Goods, Factory Orders Rebound From July Tumble, But…
US manufacturers saw factory orders rebound from their 3.3% plunge in July with a 1.2% rise in August (better than the 1% expectation), but still remains down 2.2% across the two months – the biggest consecutive drop since June 2016.
Additionally, final Durable Goods data for August also saw a modest increase from preliminary and July data but as the chart shows we have gone nowhere for 5 years and still remain below the 2007 peak…
And all of this was before the storms struck!
Another hurricane has formed in the Caribbean and is ready to take on the Gulf Coast by the weekend
Tropical Storm Nate Forms In Caribbean, Threatens Gulf Coast Landfall As Hurricane By Weekend
With just weeks having passed since Hurricane Harvey demolished southern Texas, Hurricane Irma devastated the Florida Keys and Hurricane Maria wiped out Puerto Rico, a new storm, Tropical Storm Nate, has just formed in the Southern Caribbean and looks set to strengthen to a hurricane just before making landfall in the Gulf this weekend.
As AccuWeather points out this morning, Nate is currently expected to make landfall somewhere between Louisiana and the Florida panhandle as a Cat-1 storm on Sunday even though they warn that it could strengthen rapidly once it hits the warm waters of the Gulf of Mexico.
Tropical Depression 16 has strengthened to Tropical Storm Nate near the Atlantic coast of Nicaragua and will threaten part of the southern United States as a hurricane this weekend.
Since Nate will be moving inland over the U.S. this weekend, people may have little time to react and prepare for a tropical storm or hurricane.
“Nate will make landfall along the U.S. upper Gulf coast on Sunday,” according to AccuWeather Meteorologist Brett Rossio.
The U.S. Gulf coast areas from Florida to Alabama, Mississippi and southeastern Louisiana may be at risk for damaging winds, coastal flooding, rough surf and beach erosion this weekend and into early next week.
“In all likelihood, this storm will impact areas not severely impacted by Harvey or Irma. The extent of the damage will depend, of course, on the precise path and whether the storm intensifies beyond a Category 1 storm,” AccuWeather Founder, President and Chairman Dr. Joel N. Myers said. “The most likely place for it to hit is the Florida Panhandle.”
Meanwhile, unlike Hurricane Irma, most of the models for Hurricane Nate are fairly consistent and see the storm moving directly north through the Gulf then turning to northeast to follow the eastern U.S. shorline. Here are more details from the National Hurricane Center:
At 800 AM EDT (1200 UTC), the center of Tropical Storm Nate was located near latitude 13.9 North, longitude 83.4 West. Nate is moving toward the northwest near 8 mph (13 km/h), and this motion is expected to continue this morning. A north-northwestward motion at a faster forward speed is forecast to begin later today and continue through Friday night. On the forecast track, the center of Nate should move across northeastern Nicaragua and eastern Honduras today and then over the northwestern Caribbean Sea tonight and Friday. The center is expected to approach the coast of the Yucatan peninsula late Friday.
Maximum sustained winds are near 40 mph (65 km/h) with higher gusts. Little change in strength is expected today as the center of Nate moves across northeastern Nicaragua and eastern Honduras. Strengthening is likely over the northwestern Caribbean Sea tonight and Friday.
Tropical-storm-force winds extend outward up to 60 miles (95 km) mainly over water to the east of the center.
And while Nate’s wind speeds are tame compared to Hurricane Irma (at least for now)….
WIND: Tropical storm conditions are expected within portions of the warning area in Nicaragua and Honduras today and tonight. Tropical storm and hurricane conditions are possible within the watch area in Mexico beginning late Friday.
…it is expected to dump a massive 15-30 inches of rain in Nicaragua.
RAINFALL: Nate is expected to produce the following rain accumulations through Friday night:
- Nicaragua…15 to 20 inches, isolated 30 inches
- Costa Rica and Panama…5 to 10 inches, isolated 20 inches
- Honduras and Belize…2 to 5 inches, isolated 8 inches
- Eastern portions of the Yucatan peninsula…4 to 8 inches, isolated 12 inches
Heavy rainfall will occur over a wide area, including locations well away from the center along the Pacific coast of Central America. This rainfall could cause life-threatening flash floods and mudslides.
Of course, just like with Hurricane Harvey, energy traders will be hyper focused this weekend on how/if the massive network of Gulf drilling platforms will be impacted by yet another storm.
Now Amazon is ready to take on Fed Ex and UPS
Amazon Experimenting With Its Own Delivery Service To Rival FedEx And UPS
Taking another bite out of the fortune they’ve built for FedEx and UPS shareholders, Bloomberg is reporting today that Amazon is “experimenting” with a new program, called “Seller Flex,” which would have them takeover the process of picking up packages directly from third-party warehouses and delivering them to customers.
Amazon.com Inc. is experimenting with a new delivery service intended to make more products available for free two-day delivery and relieve overcrowding in its warehouses, according to two people familiar with the plan, which will push the online retailer deeper into functions handled by longtime partners United Parcel Service Inc. and FedEx Corp.
The service began two years ago in India, and Amazon has been slowly marketing it to U.S. merchants in preparation for a national expansion, said the people, who asked not to be identified because the U.S. pilot project is confidential. Amazon is calling the project Seller Flex, one person said. The service began on a trial basis this year in West Coast states with a broader rollout planned in 2018, the people said. Amazon declined to comment.
Amazon will oversee pickup of packages from warehouses of third-party merchants selling goods on Amazon.com and their delivery to customers’ homes, the people said — work that is now often handled by UPS and FedEx. Amazon could still use these couriers for delivery, but the company will decide how a package is sent instead of leaving it up to the seller.
Not surprisingly, FedEx and UPS investors were not thrilled with the encroachment on their business…though we’re sure they’ll ditch their ephemeral bout of depression and push the stocks to brand new highs by the afternoon. Just another opportunity to BTFD.
Of course, with the company spending nearly $20 billion per year on fulfillment expenses, it’s hardly a surprise that they’re relentlessly looking at everything from their own drones to a fleet of cargo jets to deliver packages faster and at lower costs to their end consumers.
Amazon increasingly wants a direct hand in the path from one-click purchase to Main Street. There is the company’s homegrown drone project, which for now is more marketing stunt than reality. Amazon hires its own employees or contractors for expedited deliveries to Prime members in select cities. Amazon has tested using its own delivery trucks in some places, either to drive among the company’s warehouses or for the routes to shoppers’ homes. The company has opened a couple dozen package sorting centers to organize deliveries and expanded by 13 percent this year the number of warehouses to get goods closer to population centers. The sorting centers let the company “control a lot more of our shipments for longer,” Amazon’s CFO has said.
Control of the delivery process is Amazon’s obsession. Now the company is negotiating to lease 20 cargo jets, according to the Seattle Times, again with the ambition of having more autonomy over a part of the delivery path typically handled by shippers such as UPS and FedEx.
Seller Flex would also give Seattle-based Amazon more visibility into the warehousing and delivery operations of its merchant partners, potentially helping it make full use of their product inventory, storage space and proximity to customers while still guaranteeing quick delivery.
The project underscores Amazon’s ambitions to expand its logistics operations and wean itself off the delivery networks of UPS and FedEx. A rush of last-minute holiday orders in 2013 forced Amazon to issue refunds to shoppers who didn’t get gifts in time, highlighting the perils of being overly dependent on partners for a main part of its business pledge — quick, reliable delivery.
Will a new internal logistics company be just enough to once again thrust Jeff Bezos to the top of the world’s wealthiest leader board?
Larry Fink joins Warren Buffett and David Stockman suggesting that the Trump tax reform plan will not pass
“It Won’t Pass” – Larry Fink, Warren Buffett Blast Trump’s Tax Reform Plan
In the week that’s passed since the White House unveiled its tax-reform plan, Republicans and Democrats have expressed their reservations about the proposal, particularly after an analysis from the non-partisan Tax Policy Center suggested that taxes would rise over the coming ten years for most members of the middle class if the proposal were passed into law.
Wall Street, for the most part, has ignored these criticisms and US stocks have continued to climb to ever-higher record highs – even after two industry luminaries joined a growing chorus of skeptics warning that tax reform may not pass by year end.
Both Warren Buffett and Blackrock chief Larry Fink have spoken out against the administration’s proposal, echoing the most trenchant criticism of the bill. Namely, that it’s overly generous toward corporations without doing enough to help the middle class, according to Reuters.
With the White House and top Republicans in Congress already on the defensive over claims the plan would not cut taxes for many middle-class Americans, Buffett and BlackRock Inc Chief Executive Larry Fink suggested in separate interviews that the corporate rate may not have to be cut as deeply as proposed.
“We have a lot of businesses… I don’t think any of them are non-competitive in the world because of the corporate tax rate,” Buffett, the chairman and CEO of Berkshire Hathaway Inc told CNBC.
Meanwhile, Fink, who was rumored to be on Hillary Clinton’s short list of Treasury Secretary candidates, echoed Republican Sen. Bob Corker’s criticisms by admitting that he’s nervous about how the bill would impact the deficit, while adding that if the administration insists on incorporating the elimination of deductions for state and local taxes into the final bill, that the measure would almost certainly fail.
Fink predicted tax legislation would not pass if it includes a proposal to eliminate a popular deduction for state and local tax payments.
“I don’t believe we’re going to get tax reform if there is the elimination of deductibility of state and local taxes,” he said.
Eliminating the state and local tax deduction would raise about one-quarter of the $4 trillion in revenues that some Republicans say they need to prevent tax cuts from creating a massive increase in the federal budget deficit.
Buffett, who’s a well-known advocate for progressive taxes on the wealthy, said that eliminating the estate tax would be a “terrible mistake” that unnecessarily benefits rich people.
Fortunately for the market, Republican leaders are reportedly backing away from the proposed elimination of the SALT deductions – a measure that would impact some 40 million tax-paying Americans.
But even if Republicans ultimately decide against eliminating the SALT deduction, they will still need to find some other way to pass tax reform without massively blowing out the deficit. To be sure, the administration has maintained that revenue lost from corporate-tax cuts will be partly offset by closing loopholes for special interests.
But no matter what form, or forms, the bill ultimately takes, it’s chances of passing are far from assured. And while stocks have so far (mostly) ignored these nagging doubts, challenges to the market’s sanguine outlook are growing increasingly frequent.
Earlier this week, David Stockman, the Reagan administration’s director of the Office of Management and Budget, told CNBC earlier this week that Wall Street is “delusional” for believing it will even be passed.
And earlier today, Bill Blain posited that deficit hawks like Corker would ultimately kill the reform effort.
In its analysis, the TPC found that by 2027, taxes would rise for roughly one-quarter of taxpayers, including nearly 30 percent of those with incomes between about $50,000 and $150,000 and 60 percent of those making between about $150,000 and $300,000. Meanwhile, 80% of the benefits would accrue to the top 1% of taxpayers.
The market greeted Republicans’ failure to repeal and replace Obamacare as investors quickly retreated back inside their bubble of complacency.
At the time, market strategists reasoned that it’d be easier for the administration and the Republicans’ Congressional leadership to rally support for tax reform. This no longer appears to be true.
And with the Fed preparing to begin the arduous process of reducing its balance sheet next month, the market is quickly running out of excuses to keep stocks bid.
“It Will Be A Disaster”: Puerto Rico To Run Out Of Cash On October 31
While Puerto Rico is way beyond a simple solvency crisis, having already filed for bankruptcy earlier this summer – and courtesy of Donald Trump there is now debate whether or not the island’s $74 billion in debt will be forgiven outright – it is now also on the verge of a full-blown liquidity collapse. According to Treasury Secretary Raul Maldonado, Puerto Rico faces a government shutdown on Oct. 31, at which point it will run out of cash, resulting in a halt to its hurricane recovery, unless of course the US doesn’t provide billions in emergency funds.
Indeed, while the muni bond market freaked out today after Trump said on Tuesday night that Puerto Rico’s debt may need to be “wiped out”, focusing attention on the commonwealth’s staggering $74 billion debt, Puerto Rico faces a more immediate crisis in the wake of the storm: it is about to run short of money for fuel, salaries of recovery workers and food aid.
Meanwhile, only 8.6% of customers have electricity, mobile-phone service is sharply curtailed and many mountainous rural areas remain inaccessible.
According to Bloomberg, the U.S. commonwealth’s bankrupt government is burning through the $1.6 billion it had on hand before Hurricane Maria devastated the island. Furthermore, with widespread damage to telecommunications systems and the electricity grid, the Treasurer said he be unable to begin collecting sales tax for at least another month.
“I don’t have any collections, and we are spending a lot of money providing direct assistance for the emergency,” he said in an interview in San Juan. “Without the assistance from Congress, Puerto Rico’s government will not be able to operate next month.”
“You have conservatively over 100,000 homes that are destroyed here,” Governor Ricardo Rossello said an interview Wednesday.
“Essentially you’re looking at zero revenue for the next couple of months,” he said. “While you have zero revenue, you still have expenditures, plus emergency expenditures. That means the money is going to run out very quickly.”
Hence the need for Uncle Sam to step in: Maldonado said he has requested between $6 billion and $8 billion in aid from Congress to keep the government running for “a few months.”
And unless Congress does step in, Puerto Rico will go dark in just under a month. Literally.
The treasurer said he has set aside funds to make payroll and pension payments in October. But if Congress fails to act, he said the island is facing a “total shutdown” on Nov. 1 that would curtail essential services and the distribution of aid.
The good news for Puerto Rico is that, at least at first glance, Congress is willing to cooperate:
Senate Majority Leader Mitch McConnell said in a press statement that the Senate stands ready to help. House Speaker Paul Ryan’s office didn’t respond to a request to discuss the Oct. 31 run-dry date. Nancy Pelosi, the Democratic House minority leader, said earlier Wednesday that the Treasury Department should extend a loan to help Puerto Rico in the short term.
That said, Congressional enthusiasm may be dampened once the broke island comes asking for tens of billions more for its long-term recovery efforts.
Destroyed PR homes sit surrounded by debris from Hurricane Maria
Also on Wednesday, the Trump administration was finalizing a $29 billion disaster-aid request covering a series of major storms in the U.S. But Puerto Rico’s control board, created by the law that allowed the commonwealth to enter bankruptcy, has said Maria may have caused as much as $95 billion in damages, more than the island’s annual gross domestic product.
Meanwhile, perhaps sensing that Congressional, and Trumpian generosity, may soon reach its limits, Puerto Rico control board, which has broad oversight over the island’s finances, requested for immediate aid Tuesday. “In a letter the panel sent congressional leaders, the officials asked the federal government to make low-interest loans available to ease the impending liquidity crisis.”
And, in a deja vu moments from Hank Paulson’s request for a blank check from Congress ahead of the TARP bailout of US banks, Puerto Rico did its best imitation of requesting the “greatest amount of federal aid”, or else:
“Failure to provide the greatest amount of federal aid and the emergency liquidity program will be potentially ruinous,” chairman Jose Carrion wrote. “We must do all that we can to help Puerto Rico avert a tragedy of historic proportions.”
The panel also asked that the federal government waive cost-sharing limits, disaster spending caps and grants for long-term relief. Then, for his final Hank Paulson rendition, Maldonado said that If Congress doesn’t act, “it will be a disaster.”
ISIS Triples Down On Vegas Shooter Claims: Claims Paddock “Converted Six Months Ago”
ISIS has tripled-down on its claim that Las Vegas shooter Stephen Paddock was both a convert to Islam and operating on its behalf in its just published edition of its weekly Naba newsletter. The Islamic State propaganda newsletter features infographs and new specific claims concerning Paddock, who the terror group identifies according to the Muslim name, Abu Abdul Barr al-Amriki (or Abu Abdul Barr “The American”).
Whereas ISIS media statements initially said Paddock converted “months ago” the new publication now claims he converted six months ago. Minutes after the newsletter was issued, counter-terror analysts focused on the specificity of that particular new information. Thus far investigators have failed to uncover or make public a motive for the mass attack which left 59 dead and over 500 wounded in the deadliest shooting in American history.
— SITE Intel Group (@siteintelgroup) October 5, 2017
Assuming that FBI and police investigators are truly coming up short on motive or ties to terrorism, a main perplexing oddity that stands out is the clearly immense amount of prepping and planning that went into the attack combined with the seemingly non-existent public messaging left behind by the shooter.According to Max Abrams, counter-terror expert and professor of international relations at Northeastern University, little about the attack currently makes sense, as inexplicably “the killer went to very elaborate efforts to kill the maximum number of strangers for no apparent reason.”
Although ISIS has repeatedly claimed credit for the shooting in the days after the attack, both his brother and authorities have dismissed the possibility. He had “no religious affiliation, no political affiliation,” Eric Paddock said in an interview, adding: “He just hung out.”
Yet ISIS’ latest claims in its Naba newsletter are giving pause to some analysts who have been monitoring the group’s multiple publications since their foundations.
Below is the newest ISIS infograph released as part of the publication with translation underneath:
SITE Intel Group’s translation of the above ISIS infograph is as follows:
Las Vegas Invasion
Monday, 12 Muharram 1439H
A soldier from the soldiers of the Caliphate targeted a large gathering of 22,000 Americans at a concert in the city of Las Vegas, including nearly 600 killed and wounded
The executor of the operation, Abu Abdul Barr al-Amriki [al-Amriki = “The American”], 64-years old, converted to Islam 6 months ago
Method of Execution
The brother Abu Abdul Barr stationed himself for the invasion on the 32nd floor of a hotel overlooking a concert, and opened fire continuously on the crowds using 23 guns and more than 2000 rounds, and died, may Allah accept him, after exhausting his ammunition
Results of the Operation
Panic and confusion of security in America and a number of European countries
Some analysts are pointing to the surprising fact that ISIS has throughout the past years been fairly consistent and disciplined with its claims. They argue that the terror group’s tripling down on prominently publicizing and claiming Paddock should give investigators serious pause to consider.
One of the more convincing arguments is from Rukmini Callimachi, the New York Times special correspondent covering ISIS, who seems to have changed her mind on the issue based on ISIS’ latest publication. In a interview with NPR on Tuesday, she agreed with the interviewer who dismissed that ISIS could have actually been behind the attack, but now seems to have changed her mind, saying that it’s wrong to reject the ISIS claims out of hand, but that there are significant reasons for believing it.
Callimachi issued her commentary in a lengthy tweet thread captured below, and her argument for not preemptively rejecting the theory is convincing:
“After ISIS claimed Vegas, I was waiting for them to release Naba, their weekly newsletter, to see if anything new emerged. Naba is out: Under a picture of the Mandalay Bay drenched in blood they rehash the attack, new info: They are now claiming shooter converted 6 months ago while ISIS earlier said shooter converted “months ago.” Now they’re saying it was 6 months specifically. No proof is provided, but ISIS has rarely claimed attacks that were not by either their members or sympathizers. ISIS members meanwhile are pointing out that after ISIS downed Metrojet over Sinai, no one believed them: In their chat rooms, they are claiming that the West and the media is leading a cover-up in order to hide the “martyrdom” of their brother.
I don’t take ISIS’ claim at face value, and so far, there’s zero evidence tying this attack to ISIS which has emerged. But here’s why I disagree with those rejecting it out of hand: I’ve been covering ISIS since 2014 and since then I have kept a timeline. Every time ISIS claimed an attack in West, I jotted it down, and I’ve gone back over the list & annotated what subsequent investigations found. My list is not complete but of the more than 50 cases I have annotated, I could only find 3 false claims. Yes, the group frequently exaggerates death tolls & yes, they inflate & distort details, but the crux of the claim is typically correct. The thing to understand is ISIS considers an attack to be their handiwork if the attacker is sent by them or if he is inspired by them.
The reason I don’t buy the argument that they are now opportunistically claiming attacks to deflect from battlefield losses is as follows: Beyond the attacks they’ve claimed, there are many more they could have claimed but didn’t. These are attacks where we know it was them: remember the Thalys train shooting? They never claimed it though the attacker shared a hotel room with Abdlehamid Abaaoud, leader of Paris attack. Remember the attack on the Jewish Museum in Brussels? Attacker was one of ISIS’ jailers who held European hostages, yet they never claimed. Do you remember the devastating attack on the Istanbul airport last year? Investigation determined it was ISIS, but again they did not claim. And one day before Vegas on Saturday, a guy who’d placed ISIS flag on his car’s dashboard used it to ram police. Did ISIS claim it? Nope.
Does this mean ISIS had a role in Vegas? There is as yet zero evidence of that. My point: This group has been more right than its been wrong.”
I have brought this to your attention on previous occasions. It now looks like the Yellowstone Supervolcano earthquake swarm is now one of the longest ever recorded and it is something that we must be cognizant of
Ominous Earthquake Swarm At Yellowstone Supervolcano Now One Of Longest Ever Recorded
The rumblings beneath the formerly dormant supervolcano known as the Yellowstone caldera just won’t quit. And The ongoing earthquake swarm at the Yellowstone National Park supervolcano is now one of the longest ever recorded, having started on June 12. The ongoing earthquake swarm at the Yellowstone National Park supervolcano is now one of the longest ever recorded, having started on June 12.
Over the past three and a half months, almost 2,500 earthquakes have been recorded in the western part of the national park. This is on par with the biggest swarm ever recorded, where more than 3,000 earthquakes took place over three months, Newsweek reports.
In its latest monthly update about activity at Yellowstone, the US Geological Survey said 115 earthquakes had been reported in the park during September. Of these, 78 were part of the ongoing swarm 6 miles north of West Yellowstone. The biggest event in the swarm last month was magnitude 2.3.
“This is the sort of work that will happen in the months to come, as we gather up all of the available data and start crunching numbers,” Poland says. “What we can say now is that through the of September, the University of Utah has located 2,475 earthquakes in the swarm. This puts the 2017 swarm on par with that of 1985, which lasted three months and had over 3,000 located events. end
“[This is] certainly a fascinating event and one that we hope to learn more about through some post-swarm analysis,” he adds. “There’s a lot to work on this winter, for sure.”
While scientists at the USGS have brushed off the threat of a supervolcano eruption, scientists at NASA have said it represents a potentially devastating threat to the US population. These same scientists have suggested several risky strategies to prevent an eruption if one appears imminent.
Brian Wilcox, a former member of the NASA Advisory Council on Planetary Defense, and several other NASA researchers over the summer shared a report previously unseen outside the space agency about the threat Yellowstone poses, and what can be done to prevent an eruption.
According to NASA, an eruption at Yellowstone could plunge the earth into a volcanic winter and destroy crops and livestock, precipitating widespread famines. Food reserves would only last about 74 days, according to the UN, after an eruption of a super volcano, like that under Yellowstone.
With an eruption long overdue, NASA has devised a plan to drill into the caldera and try to artificially cool it – a strategy that researchers say comes with its own risks.
Scientists at the USGS say the monthslong earthquake storm at the caldera has ended; however, they played down the risks posed by the swarm shortly after it started over the summer, only for the rumbling to continue. Others maintain that an eruption is long overdue.
Well that about does it for tonight, WE HAVE ONLY ONE MORE DAY LEFT BEFORE THE END OF CHINA’S GOLDEN WEEK. WHEN CHINA COMES BACK GOLD/SILVER SHOULD BE FIRMER
I will see you FRIDAY night. YOU MAY RECEIVE THE COMMENTARY VERY LATE IN THE EVENING