Oct 12/comex final data/plus a few major stories

GOLD: $129200 up $6,20

Silver: $1717 up 9 cents

Closing access prices:

Gold $

silver: $

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: $xxx DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $xxx

PREMIUM FIRST FIX:  $11.31 (premiums getting larger)

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SECOND SHANGHAI GOLD FIX: $xxx

NY GOLD PRICE AT THE EXACT SAME TIME: $xxx

Premium of Shanghai 2nd fix/NY:$9.00 (PREMIUMS GETTING LARGER)  

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

NY PRICING AT THE EXACT SAME TIME: $xx

LONDON SECOND GOLD FIX  10 AM: $xx

NY PRICING AT THE EXACT SAME TIME. xxx

For comex gold:

OCTOBER/

NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 5 NOTICE(S) FOR  500  OZ.

TOTAL NOTICES SO FAR: 2334 FOR 233,400 OZ  (7.259TONNES)

For silver:

OCTOBER

 124 NOTICES FILED TODAY FOR

620,000  OZ/

Total number of notices filed so far this month: 516 for 2,580,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

end

Let us have a look at the data for today

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In silver, the total open interest  FELL BY  838 contracts from  188,258  DOWN TO 187,422   WITH RESPECT TO YESTERDAY’S TRADING (UP  9 CENTS).  THE CROOKS ARE HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS.  IT IS OBVIOUS THAT WE MUST HAVE HAD A TINY BANKER SHORT COVERING.

RESULT: A SMALL SIZED FALL IN OI COMEX  WITH THE  9 CENT PRICE RISE.  OUR BANKERS WERE FORCED TO COVER SOME OF THEIR HUGE SHORTFAL . 

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.937BILLION TO BE EXACT or 133% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 124 NOTICE(S) FOR 620,000  OZ OF SILVER.

In gold, the open interest SURPRISINGLY  FELL BY 1616 CONTRACTS DESPITE THE GOOD SIZE  RISE in price of gold ($6.20 ) .  The new OI for the gold complex rests at 518,389. OUR BANKER FRIENDS WERE CERTAINLY CAUGHT OFF GUARD WITH THE FOMC ANNOUNCEMENT YESTERDAY AFTERNOON AND THEY ALSO DECIDED TO COVER SOME OF THEIR HUGE GOLD SHORTS.

 

Result: A GOOD SIZED DECREASE IN OI DESPITE THE RISE IN PRICE IN GOLD ($6.20). WE PROBABLY HAD SOME BANKER GOLD SHORT COVERING BY THE BANKERS. 

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

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

GLD:   

Tonight , NO CHANGES  in gold inventory at the GLD/

Inventory rests tonight: 858.45 tonnes.

SLV

Today:  NO changes in inventory:

INVENTORY RESTS AT 326.898 MILLION OZ

end

.

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

1. Today, we had the open interest in silver FELL BY 838contracts from 188,252  DOWN TO 187,422(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. THE DATA SEEMS TO SUGGEST SOME GOLD SHORT COVERING BUT IN SILVER IT IS BECOMING IMPOSSIBLE FOR THE CROOKS TO COVER. AS SUCH THEY RETREATED TO HIGHER GROUND AND THEN THEY WILL TRY AGAIN.

RESULT:  A SMALL SIZED DECREASE IN SILVER OI  AT THE COMEX DESPITE THE  RISE IN PRICE OF 9 CENTS WITH RESPECT TO YESTERDAY’S TRADING. OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 2,18 points or .06% /Hang Sang CLOSED UP 69.48 pts or .24% / The Nikkei closed UP 73.45 POINTS OR .35/Australia’s all ordinaires CLOSED UP 0.40%/Chinese yuan (ONSHORE) closed UP  at 6.5886/Oil DOWN to 50.63 dollars per barrel for WTI and 56.39 for Brent. Stocks in Europe OPENED RED EXCEPT ENGLAND FTSE  .  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5885. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5828 AND BOTH YUANS ARE STRONGER AGAINST THE DOLLAR. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY.

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)North Korea/USA

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

i

Let us head over to the comex:

The total gold comex open interest SURPRISINGLY FELL BY A STRONG 1616 CONTRACTS DOWN to an OI level of 518,389 WITH THE RISE IN THE PRICE OF GOLD ($6.20 RISE IN YESTERDAY’S TRADING).  IT SEEMS THAT OUR BANKER FRIENDS TRIED  TO COVER SOME OF THEIR HUGE GOLD SHORTFALL IN THE MORNING WITH LIMITED SUCCESS THE BANKERS RETREATED TO HIGHER GROUND AS WELL AS COVERING SOME OF THEIR SHORTFALL. OCTOBER IS AN ACTIVE DELIVERY MONTH ALTHOUGH IT IS THE WEAKEST IN TERMS OF ACTUAL DELIVERIES AND OPEN INTEREST.  WE  VISUALIZED 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 WHEREBY ANOTHER 7200 LONG COMEX CONTRACTS WERE GIVEN 7200 EFP’S. WE HAVE NOW ENDED GOLDEN WEEK WHERE ALL OF CHINA WAS OFF AND AS SUCH WE SHOULD EXPECT  GOLD TO BE STRONG THIS WEEK  WITH CHINA RETURNING TO ACTIVE DUTY PURCHASING OUR PRECIOUS METALS.

Result: a  GOODSIZED open interest DECREASE WITH THE GOOD SIZED RISE IN THE PRICE OF GOLD ($6.20). BANKERS RETREATED TO HIGHER GROUND AND COVERED A TINY PORTION OF THE GOLD SHORTFALL

 

IN SEPTEMBER,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 3 WEEKS HOPING TO COVER AS MANY GOLD/SILVER SHORTS AS POSSIBLE.

NOW THAT WE ARE CLOSE TO THE 29TH CHINESE CONGRESS, THE BANKERS ARE TAKING NO CHANCES AS THEY START TO COVER THEIR GOLD/SILVER SHORTFALL.

We have now entered the active contract month of Oct and here we saw a LOSS of 0 contracts DOWN to 220 contracts.  We had 0 notices filed yesterday so we LOST 0 contracts or NIL oz will NOT stand for delivery at the comex in this active delivery month of October and 0 EFP notices were given. The low number of notices early in the delivery cycle is evidence of a lack of physical gold.

The November contract saw A loss OF 42 contracts down to 1387.

The very big active December contract month saw it’s OI LOSS OF 1856 contracts DOWN to 399,573

.

We had 5 notice(s) filed upon today for  500 oz

 VOLUME FOR TODAY (PRELIMINARY) NOT  AVAILABLE

CONFIRMED VOLUME YESTERDAY: XXX

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And now for the wild silver comex results.  Total silver OI FELL BY 838 CONTRACTS FROM 188,422 DOWN TO 187,2422WITH YESTERDAY’S 9 CENT RISE IN PRICE. WE HAVE HAD SOME BANKER SHORT COVERING AS THE CROOKS TRY AND  LOOSEN SOME SILVER LONGS FROM THE SILVER TREE WITH LIMITED SUCCESS AS THE BANKERS RETREATED TO HIGHER GROUND.  THE GOOD SIZED RISE IN SILVER PRICE MEANS THAT THEY HAVE ABANDONED ALL HOPE OF COVERING AT LOWER PRICES, SO THEY REGROUP AT MUCH HIGHER PRICES WHERE THEY WILL ATTEMPT AGAIN AT COVERING.
We have now entered the non active contract month of  October and here the OI LOST 16 contacts DOWN TO 512.  We had 1 notice filed on yesterday so we LOST 15  contracts or AN ADDITIONAL 75,000 oz will NOT stand for delivery and z15 EFP’s were issued IN WHICH DEPARTING LONGS RECEIVED A FIAT BONUS PLUS A FUTURE DELIVERABLE PRODUCT AND NO DOUBT THAT WOULD BE A LONDON BASED FORWARD.  November saw a GAIN of 8 contract(s) and thus RISIING TO  290. After November, the NEXT big active contract month is December and here the OI LOST 997  contracts DOWN to 141M644 contracts.

We had 124 notice(s) filed for  620,000 oz for the OCT. 2017 contract

INITIAL standings for OCTOBER

 Oct.12/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   n/a
Withdrawals from Customer Inventory in oz  
n/a oz
Deposits to the Dealer Inventory in oz    n/a oz
Deposits to the Customer Inventory, in oz 
 n/a
No of oz served (contracts) today
 
5notice(s)
500 OZ
No of oz to be served (notices)
220contracts
(22,000 oz)
Total monthly oz gold served (contracts) so far this month
2334 notices
233,400 oz
7.2441 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month     xxx oz
Today we HAD  xx kilobar transaction(s)/ 
 WE HAD xx DEALER DEPOSIT:
total dealer deposits: xx oz
We had xxx dealer withdrawals:
total dealer withdrawals:  xx oz
we had xxx customer deposit(s):
total customer deposits; xx oz
We had n/a customer withdrawal(s)
total customer withdrawals; nil  oz
 we had xxx adjustment(s)
For OCT:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 5  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 4 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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To calculate the INITIAL total number of gold ounces standing for the OCTOBER. contract month, we take the total number of notices filed so far for the month (2334) x 100 oz or 232,900 oz, to which we add the difference between the open interest for the front month of OCT. (220 contracts) minus the number of notices served upon today (5) x 100 oz per contract equals 254,900  oz, the number of ounces standing in this active month of OCT.
 
Thus the INITIAL standings for gold for the OCTOBER contract month:
No of notices served  (2334) x 100 oz  or ounces + {(220)OI for the front month  minus the number of  notices served upon today (5) x 100 oz which equals 254,900 oz standing in this  active delivery month of OCTOBER  (7.928tonnes).
WE LOST 0 CONTRACTS OR AN ADDITIONAL NIL OZ WILL   STAND
 IT WAS OBVIOUS THAT  THERE WAS HARDLY ANY GOLD TO DELIVER UPON LONGS IN SEPTEMBER AND THIS CONTINUES ON IN OCTOBER.   THE CROOKS USE THE EFP’S TO TRANSFER THEIR OBLIGATION TO ANOTHER EXCHANGE. THIS IS WHY ANOTHER 5400 EFP’S WERE ISSUED FOR OCTOBER GOLD ON FIRST DAY NOTICE AND IT ALSO EXPLAINS THE LACK OF DELIVERY NOTICES IN THE EARLY PART OF THIS DELIVERY ACTIVE MONTH.
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Total dealer inventory 598,132.542 or 18.604 tonnes  (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,771,375.170 or 272.82 tonnes 
 
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 13 MONTHS  80 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE OCTOBER DELIVERY MONTH
OCTOBER INITIAL standings
 Oct 12.2017
Silver Ounces
Withdrawals from Dealers Inventory  n/a
Withdrawals from Customer Inventory
 n/a oz
Deposits to the Dealer Inventory
 n/a oz
Deposits to the Customer Inventory 
 n/a
No of oz served today (contracts)
124 CONTRACT(S)
(620,000 OZ)
No of oz to be served (notices)
388contracts
(1,940,000 oz)
Total monthly oz silver served (contracts) 516contracts

(2,580,000 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    xx oz
today, we had  xxx deposit(s) into the dealer account:
total dealer deposit: xxx   oz
we had xxx dealer withdrawals:
total dealer withdrawals: xxx oz
we had  xx customer withdrawal(s):
TOTAL CUSTOMER WITHDRAWALS: xx  oz
We had xx Customer deposit(s):
***deposits into JPMorgan have stopped  again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: 600,627.490  oz
 
 we had 0 adjustment(s)
The total number of notices filed today for the OCTOBER. contract month is represented by 124 contract(s) for 620000 oz. To calculate the number of silver ounces that will stand for delivery in OCTOBER., we take the total number of notices filed for the month so far at 514 x 5,000 oz  = 2,580,000 oz to which we add the difference between the open interest for the front month of OCT. (528) and the number of notices served upon today (124x 5000 oz) equals the number of ounces standing.
 

 

.
 
Thus the INITIAL standings for silver for the OCTOBER contract month:  516 (notices served so far)x 5000 oz  + OI for front month of OCTOBER(5212) -number of notices served upon today (124)x 5000 oz  equals  4,535,000 oz  of silver standing for the OCTOBER contract month. This is HUGE for this NON active delivery month. THE INCREASE IN TOTAL OZ STANDING FOR SILVER CONTINUES TO ADVANCE
 
WE LOST 12 CONTRACTS OR  AN ADDITIONAL 60,000 OZ WILL NOT STAND FOR DELIVERY.
 ESTIMATED VOLUME FOR TODAY:   NOT AVAILABLE
CONFIRMED VOLUME FOR YESTERDAY: XXXCONTRACTS
 
 
Total dealer silver:  39.345 million (close to record low inventory  
Total number of dealer and customer silver:   220.100 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 1.9 percent to NAV usa funds and Negative 2.2% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.5%
Percentage of fund in silver:37.5%
cash .+0.0%( Oct12/2017) 
2. Sprott silver fund (PSLV): STOCK   NAV RISES TO -0.02% (Oct 11/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.37% to NAV  (Oct 11/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -0.18%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.38%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

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

(courtesy Sprott/GATA)

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

by THE CANADIAN PRESS

Posted Oct 2, 2017 8:43 am PDT

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

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

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

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

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

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

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

END

And now the Gold inventory at the GLD

Oct 12/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES

Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES

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

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Oct 12/2017/ Inventory rests tonight at 858.45 tonnes
*IN LAST 249 TRADING DAYS: 82.50 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 1824TRADING DAYS: A NET  74.78 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY.
*FROM FEB 1/2017: A NET  43.67 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Oct 12/THE LAST TWO DAYS WE LOST 1.113 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ

Oct 10/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ/

Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ

Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ

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/

Oct 11/2017:

Inventory 325.765  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.44%
  • 12 Month MM GOFO
    + 1.64%
  • 30 day trend

end

Bitcoin prices for THIS MORNING:  Bid $4755.00 offer: $4775.00

Major gold/silver trading/commentaries for THURSDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

NONE TODAY

END

 

Bitcoin Explodes To New Record High Over $5200

Having bounced back from China’s exchange closures and Dimon’s damning, Bitcoin just broke above its pre-China ICO ban highs and traded above $5000 for the first time in history (even as Russia decided to block local access). There was no looking back as the cryptocurrency is now trading $5240 – a new record high.
As Coindesk notes, prices had dropped to a low of $2,980 in mid September after China banned token sales and local cryptocurrency exchanges. However, in the subsequent days, BTC quickly regained poised, reportedly due to a pick-up in trading volumes in Japan, South Korea and other markets. The rotation of money out of the ether and ethereum-based coins and into bitcoin also helped the cryptocurrency scale new heights.
Increased institutional interest seems to have played a role in boosting bitcoin prices. For example, a ‘bitcoin desk’ at Goldman Sachs would certainly be a game changer. News had hit the wires earlier this month that Goldman Sachs is considering a brand new operation which would be dedicated to bitcoin trading.
Still, while skeptics continue to call bitcoin rally a bubble, the price action analysis indicates no serious trouble ahead for the cryptocurrency.
Resistance is seen at $5,378.56 – 161.8 percent Fibonacci extension of the move from the Sep 15 low – Sep 18 high – Sep 23 low.

As Iqbal V. Gandham, Managing Director at eToro UK, commented:

 

“Recent criticism from industry and regulation crackdowns in China and Russia spooked markets in recent weeks and caused the Bitcoin price to plummet. So we expect some investors to be surprised by Bitcoin bouncing back to this record high so soon afterwards.

“Yet Bitcoin was designed to operate outside of the influence of governments and central banks, and is doing exactly that. So to us, this bounce back in price is no surprise.

“In reality, whilst we’re excited to see Bitcoin hit this record high, this is just the beginning for Bitcoin. Bitcoin has a lot further to go than this price point to become a real world currency, as it was designed to one day be. Most are unaware that in future people will not spend a single Bitcoin. Instead people would spend the underlying tokens, called Satoshis, in the same way we spend coins and not a bar of gold. A single Satoshi is only worth $0.00005 currently. Clearly, for this to gain spending power, the price of a Bitcoin will need to be significantly higher than $5,000.

“This price peak may boost more support for the bubble argument we’ve seen from investors in recent months. But we continue to argue these calls on bubble territory are coming far too early in the story for Bitcoin.

“This record is an exciting milestone and sign of market confidence in the outlook for Bitcoin and the underlying technology behind the cryptocurrency, Blockchain. But we expect many more milestones like this to come.”
Furthermore,  appears Mike Novogratz may be right after all… while bitcoin is a bubble, the mania is justified, because it is a technological advancement that promises to fundamentally alter our lives.

 

“I can hear the herd coming” Novogratz said.
And bubble or not, Novogratz concluded eloquently on the extreme nature of cryptocurrencies’ potential…

 

“Remember, bubbles happen around things that fundamentally change the way we live,” he said.

“The railroad bubble. Railroads really fundamentally changed the way we lived. The internet bubble changed the way we live. When I look forward five, 10 years, the possibilities really get your animal spirits going.”
Bitcoin is set to become “the biggest bubble of our time,” he added, and could reach $10,000 very soon due to fast-building interest.

 

(courtesy GATA/Reuters)

Russian central bank may boost gold trading on Moscow exchange

Submitted by cpowell on Wed, 2017-10-11 13:58. Section: Daily Dispatches

Elena Fabrichnaya
Reuters
Tuesday, October 10, 2017

 

MOSCOW — Russia’s central bank may start buying gold for its official reserves on the Moscow Exchange, two people familiar with the matter told Reuters.
The Russian central bank is one of the world’s largest holders of bullion and the switch would boost currently low turnover in gold trading on the Moscow Exchange, which launched a precious metals market only in 2013.
The bank has been regularly buying gold as it wrestles with weaker oil prices and Western sanctions imposed over Moscow’s role in the Ukraine crisis. It has access to gold trading on the Moscow Exchange but has not been active so far, trading gold on the over-the-counter market instead.
The two sources said a final decision had yet to be taken but senior central bank officials were looking at what volumes could be bought via the exchange — which serves as an equity, bond, foreign exchange, and derivatives market — and from what date. …
… For the remainder of the report:
https://www.reuters.com/article/russia-cenbank-gold-moex/russian-central

 

 

END

LME to expand trading around gold and silver reference prices

Submitted by cpowell on Wed, 2017-10-11 14:21. Section: Daily Dispatches

By Jan Harvey and Peter Hobson
Reuters
Tuesday, October 10, 2017

LONDON — The London Metal Exchange expects three more clearing members to join its precious metals contracts by year-end and is looking to expand trading around its gold and silver reference prices, Chief Executive Matthew Chamberlain told Reuters on Tuesday.
Adding further clearing members is a top priority for the exchange as it looks to expand volumes on LME precious, the suite of gold and silver spot and futures it launched in July, Chamberlain said.
“We have three clearing members who are in the testing environment now,” he said. “They have done all their documentation and are now configuring their systems to be ready to go. I’ll be very disappointed if those three weren’t publicly announced and publicly trading in the next couple of months.” …
… For the remainder of the report:
https://www.reuters.com/article/us-commodities-summit-lme/lme-to-expand-…

END

China will ‘compel’ Saudis to trade oil in yuan, economist tells CNBC

Submitted by cpowell on Wed, 2017-10-11 15:57. Section: Daily Dispatches

China Will ‘Compel’ Saudi Arabia to Trade Oil in Yuan — and That’s Going to Affect the US Dollar
By Sam Meredith
CNBC, New York
Wednesday, October 11, 2017

 

China will “compel” Saudi Arabia to trade oil in yuan and, when this happens, the rest of the oil market will follow suit and abandon the U.S. dollar as the world’s reserve currency, a leading economist told CNBC on Monday.
Carl Weinberg, chief economist and managing director at High Frequency Economics, said Beijing stands to become the most dominant global player in oil demand since China usurped the U.S. as the “biggest oil importer on the planet.”

Saudi Arabia has “to pay attention to this because even as much as one or two years from now, Chinese demand will dwarf U.S. demand,” Weinberg said.

“I believe that yuan pricing of oil is coming and as soon as the Saudis move to accept it — as the Chinese will compel them to do — then the rest of the oil market will move along with them.” …
When asked what it could mean for the dollar should the oil market move oil trade out of the U.S. currency and into the yuan, Weinberg said the world’s transaction currency would suffer “lesser demand for U.S. securities across the board.”
“Moving oil trade out of dollars into yuan will take right now between $600 billion and $800 billion worth of transactions out of the dollar. … (That) means a stronger demand for things in China, whether it’s securities or whether it’s goods and services. It is a growth plus for China and that’s why they want this to happen.”
… For the remainder of the report:
https://www.cnbc.com/2017/10/11/china-will-compel-saudi-arabia-to-trade-…

 

END

World is turning its back on the dollar, Saxo Bank FX strategist writes

Submitted by cpowell on Wed, 2017-10-11 16:06. Section: Daily Dispatches

Three Reasons the World Could Turn Its Back on the U.S. Dollar
By David Reid
CNBC, New York
Wednesday, October 11, 2017

 

A combination of geopolitical pressures could spark the end of the U.S. dollar as the world’s reserve currency, according to the head of foreign exchange strategy at Saxo Bank.
In a quarterly outlook note titled “The World Is Turning Its Back on the Almighty Dollar,” John Hardy claimed the U.S. currency was “increasingly dysfunctional” and there was an urgent need to replace it.
The currencies analyst highlighted these three geopolitical issues currently putting pressure on the dollar’s status

“– The ongoing rise of China as it assumes a more prominent role in global trade and financial markets and in particular how it will manage policy and unwinding the excesses of its credit bubble in the wake of the 19th Party Congress scheduled for October 2017 without upsetting its domestic economy and the global economy.

“– The North Korean regime’s striving to maintain credibility and untouchability as a nuclear power and how this impacts China-U.S. relations, but also how Japan deals with this threat in terms of domestic as well as foreign policy,
“– The loosening of the U.S.-Europe transatlantic alliance and how Europe and the European Union find their feet as a more independent superpower — or not — in their own right after the German elections.”
Hardy extracts “de-dollarization” as a direct theme that can be pulled from China’s situation as the country looks to encourage demand for its yuan.
“China is eyeing the benefits of having its own currency play a larger role and to supplant the U.S. dollar’s role in global trade,” he said. “The initial focus is on the global oil trade, where it has announced the intention of buying oil in yuan and allowing trade partners to settle that yuan in gold.”
Hardy said settling in gold is a clever move by Beijing as it provides oil-exporting countries with a greater degree of comfort. …
… For the remainder of the report:
https://www.cnbc.com/2017/10/11/the-us-dollar-may-be-at-risk-as-the-glob…

 

 


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

 
 i) Chinese yuan vs USA dollar/CLOSED UP AT 6.5885/shanghai bourse CLOSED DOWN AT 2.318POINTS .06%   / HANG SANG CLOSED UP 69,48 POINTS OR .24% 

2. Nikkei closed UP 73,45 POINTS OR .35%     /USA: YEN RISES TO 112,44

3. Europe stocks OPENED  RED EXCEPT LONDON ( /USA dollar index RISES TO  93.16/Euro UDOWNto 1.1842

3b Japan 10 year bond yield: RISES  TO  -+.067%/ 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::  50.59 and Brent: 56.39

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.458%/Italian 10 yr bond yield UP  to 2.130%  /SPAIN 10 YR BOND YIELD DOWN TO 1.671%  

3j Greek 10 year bond yield RISES TO  : 5.581???  

3k Gold at $1293.30 silver at:17.1278:15 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 7/100 in  roubles/dollar) 57.74-

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 112.44 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9749 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1553 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  +0.458%

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 2.344% early this morning. Thirty year rate  at 2.881% /

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

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

 

Global Stocks Hit New Record High, Dollar Mixed After Dovish Fed

 

 

In a trend observed every day this week, S&P futures are slightly in the red ahead of a post-open ramp with the VIX rising to 9.91, as Asian shares climb, European stocks are little changed. WTI crude pares recent gains, slipping below $51 after API showed an unexpected crude build. Earnings season launches with bank earnings reports from JPMorgan and Citigroup, while Economic data include PPI figures, jobless claims.
As Reuters notes, broader investor risk sentiment has improved this week after Catalonia dialed back plans to break away from Spain, with MSCI’s 47-country world stocks index reaching a record high. Global equities now appear to be taking geopolitical developments such as the secessionist push in Spain and tensions on the Korean peninsula in their stride, to reach those record tops.
Analysts will be keeping a close eye on banks Q3 reports: Trading probably dropped from the same period a year earlier. Executives from JPMorgan, Citigroup and Bank of America Corp. told investors last month to expect declines ranging from 15 percent to 20 percent. Goldman Sachs Group Inc., coming off its worst first half for the trading business in more than a decade, said the third quarter remained challenging. Subdued volatility, especially compared with the turmoil from Brexit and the U.S. election a year earlier — made the period particularly tough.

The Bloomberg Dollar Spot Index held a four-day decline as buying interest remained low after some Federal Reserve policy makers expressed concern in the account of the latest FOMC meeting that weak inflationary pressures are more than just transitory.  The minutes of the FOMC’s Sept. 19-20 meeting were interpreted as dovish, posing risks to the path of interest rate rises investors price in for 2018 onward should inflation be weaker than targeted. The importance of U.S. CPI growth data due Friday is highlighted by overnight volatility in euro-dollar, which hit a more than two-week high, surpassing the levels seen ahead of U.S. payrolls last week, although it was unable to hold on to gains and fizzled to session lows after the European open.
Asian stocks advanced for a 5th day, sending the regional benchmark to a fresh 10-year high on Thursday, after minutes of the latest U.S. Federal Reserve meeting boosted optimism that rate increases in the world’s biggest economy will remain gradual, while the dollar sagged after the Federal Reserve showed a more guarded view towards inflation.  The MSCI Asia Pacific Index rose 0.5 percent to 165.80 as of 4:40 p.m. in Hong Kong, heading for the highest close since November 2007. As Bloomberg reports, SoftBank was the second-biggest contributor to the regional gauge’s advance as Japan’s Topix also added to decade-long highs.
The Fed minutes released Wednesday showed officials debated hard last month over whether forces holding inflation down were persistent or temporary, with several policy makers looking for stronger evidence of price gains before supporting a third interest-rate increase this year.
“We expect that only a further unanticipated decline in inflationary pressures would prevent the Fed from moving in December,” said David Sloan, senior economist at Roubini Global Economics. “Looking further ahead, however, inflation is likely to need to show some improvement if three more rate hikes are to be delivered in 2018.”
“The Fed minutes signify the U.S. economy is on a recovery path and that succeeding rate increases will not be sharp,” easing concerns of market shocks, said Lexter Azurin, analyst at Manila-based AB Capital Securities. “An improving U.S. economy is taken positively by market for its big role in the global economy.”
European equities kicked off the session on a relatively tame footing with very little seen in the way of direction. In terms of sector specific performance, things are also relatively contained with some very modest underperformance seen in financial names in the wake of yesterday’s slightly more dovish than anticipated FOMC minutes release. Individual movers include Deutsche Lufthansa (+2.6%) amid expectations the Co. will purchase 81 planes from Air Berlin and retain 3k of their staff, with easyJet (+2.2%) supported by a pre-market broker move. ECB’s Praet said deflation risks have disappeared, but that Euro area inflation remains subdued and that sustained inflation adjustment will guide QE exit. Praet added that a substantial amount of stimulus is still required and that ECB should communicate more on reinvestment policy
In the U.K., sterling rose for a fourth day even as the fifth round of Brexit negotiations draws to a close with seemingly little progress. The U.K.’s chief negotiator David Davis and his EU counterpart Michel Barnier are due to brief reporters before noon in Brussels. Brexit negotiations are at a virtual political standstill, with no notable advances made in the fifth round of negotiations, according to several diplomats briefed on the discussions, the FT reported.
Overnight, President Trump stated we cannot allow North Korea situation go on. The President also commented on his tax plan, saying that he is looking at around 10% repatriation tax rate and vowing to lower corporate taxes to a maximum 20% from 35% and above, also pledges to cut small business tax marginal rate by 40%.
Treasury yields dropped as the market looks to inflation data out of the U.S. due Friday.

 

Gold continued its rally to climb above its 21-DMA, rising 0.2% to $1,294.66 an ounce, the highest in more than two weeks. West Texas Intermediate crude declined 0.7 percent to $50.93 a barrel.
Bulletin Headline summary from RanSquawk
Greenback sees a marginal recovery as DXY finds support at 92.80
European equities trade subdued, failing to follow Asia and the US, likely hampered by the bullish EUR and lack of newsflow
Looking ahead, highlights include weekly jobs data, US PPI, DoEs and a slew of central bank speakers
Market Snapshot
S&P 500 futures down 0.2% to 2,548.80
VIX Index up 0.6%, at 9.91
STOXX Europe 600 up 0.06% to 390.40
MSCI Asia up 0.5% to 165.79
MSCI Asia ex Japan up 0.6% to 548.24
Nikkei up 0.4% to 20,954.72
Topix up 0.2% to 1,700.13
Hang Seng Index up 0.2% to 28,459.03
Shanghai Composite down 0.06% to 3,386.10
Sensex up 0.5% to 31,991.46
Australia S&P/ASX 200 up 0.4% to 5,794.47
Kospi up 0.7% to 2,474.76
German 10Y yield fell 1.4 bps to 0.449%
Euro up 0.03% to $1.1862
Italian 10Y yield rose 5.9 bps to 1.892%
Spanish 10Y yield rose 0.7 bps to 1.645%
Brent Futures down 0.5% to $56.65/bbl
Gold spot up 0.4% to $1,296.56
U.S. Dollar Index down 0.09% to 92.93
Top Overnight News from Bloomberg
Republican lawmakers from high-tax states are set to meet with House Majority Leader Kevin McCarthy and Ways and Means Chairman Kevin Brady Thursday to discuss GOP proposals to end the state and local tax deduction
U.S. and Turkish officials will meet in the coming days to try to defuse a diplomatic crisis over Turkey’s arrest of some U.S. citizens and local consular workers, Turkey’s Deputy Prime Minister Bekir Bozdag said
Fed’s Bostic said that with a relatively strong and improving labor market and stable inflation expectations, “I am looking for inflation to drift up to 2 percent over the next year or so”
Kevin Warsh has emerged as the leading candidate to run the Federal Reserve next year, jumping ahead of current Chair Janet Yellen, according to a Bloomberg survey of economists Oct. 6–11; Jerome Powell, until now seen as a long-shot, vaulted into a tie for second with Yellen in the poll
Germany wants the European Union to be prepared to grant U.K. financial companies transitional access to the EU if the Brexit process drags on, according to a government strategy document
Global oil supply and demand estimates for 2018 indicate that inventories may not fall further, potentially capping prices, following a projected drop in stocks this year, the International Energy Agency said in its monthly report
Trading Revenue in Focus at JPMorgan, Citi; Warsh Favored as Next Fed Chair; Trump on Iran, Tax and Health Care
President Donald Trump said his tax plan would simplify the tax code and save money for millions of U.S. businesses and families as he campaigns against criticism the proposal is a giveaway to the rich
U.S. central bankers are looking for clues that underlying strength in the economy will underwrite their plans to raise interest rates for a third time this year, a record of their meeting last month showed, as officials wrestled with why inflation remains so low
Comcast Corp., 3M Co. and Wal- Mart Stores Inc. are among the companies buying back bonds now in transactions that could save them millions of dollars if the latest proposed tax changes from the Trump administration and Congress end up becoming law
Prime Minister Mariano Rajoy gave his Catalan antagonist Carles Puigdemont five days to clarify whether he has declared independence from Spain or not as the country prepared for its national holiday on Thursday
Passive investments, already eating away at active managers’ assets, are getting another boost from MiFID and two other new rules
Trump Is Said to Demand Tax-Break Change to Protect Middle Class
Brexit Talks Edge Backward as U.K. Prepares for the Worst
Proxy War Over Iran Nuclear Agreement Divides U.S., Europe at UN
BMW Said to Make Mini Brand Outside Europe in New China Tie-Up
China Sept. Auto Sales Rise 3.3% Y/y: CAAM
Bitcoin Strengthens Above $5,000 for the First Time
Asian equity markets traded mostly positive after another set of fresh record levels for all major indices in US, where focus was on the FOMC minutes which suggested concerns over weak inflation. The positive momentum helped Nikkei 225 (+0.35%) extend on its highest levels in over 2 decades and test the 21,000 level, while ASX 200 (+0.40%) was somewhat muted as weakness in miners capped upside. Elsewhere, Hang Seng (+0.24%) and Shanghai Comp. (-0.06%) were mixed with underperformance in the mainland after another lacklustre PBoC liquidity operation which led to a net daily drain of  CNY 40bln. 10yr JGBs were relatively flat as demand lacked amid a mostly positive risk tone and reserved BoJ Rinban announcement for JPY 710bln of JGBs in the belly to the super-long end. PBoC injected CNY 20bln via 7-day reverse repos for a net daily drain of CNY 40bln.
Top Asian News
Hong Kong Slaps Banker With Ban for Mobile Phone, WeChat Use
Sri Lanka Makes Arrests in $60 Million Taiwanese Bank Cyberheist
Japan Stocks Set Fresh Highs Amid Optimism of Abe Election Win
European equities have kicked off the session on a relatively tame footing with very little seen in the way of direction. In terms of sector specific performance, things are also relatively contained with some very modest underperformance seen in financial names in the wake of yesterday’s slightly more dovish than anticipated FOMC minutes release. Individual movers include Deutsche Lufthansa (+2.6%) amid expectations the Co. will purchase 81 planes from Air Berlin and retain 3k of their staff, with easyJet (+2.2%) supported by a pre-market broker move. A firmer tone overall, with Bunds leading the way after an initial blip to set a fresh high for the week so far, but then running into selling above 161.50 (albeit with relatively tight stops). Some caution evident ahead of 30 year US long bond issuance, while  BTPs also pared best gains ahead of Italy’s multi-tranche offering. However, EZ peripheral debt still marginally outperforming on dovish ECB comments (Praet) and a brief period of calm on the Catalonia-Spain front. Contrasting fortunes for Italy’s BTP issuance, with the top end of the range raised, but yields mixed and covers not that liberal overall – hence, the 10 year benchmark yield showing little net change since the results, but still a tad softer on the day around 2.144%. If anything, the cost of borrowing reflects modest curve flattening, and note that this is the first tap of the long dated 30 year maturity that was launched via syndication.
Top European News
Italy Bank Bulls Say Bad Loan Panic Overdone as Stocks Slide
European Refiners Hardest Hit If Kurdish Oil Disrupted, IEA Says
Serco Is Said to Be Among Bidders for Carillion Health Unit
Event-Driven Hedge Fund Melqart Plans to Stop Taking New Money
Tallinna Sadam Eyes Passenger Growth, Nordic Cargo Ahead of IPO
In FX markets, the USD has regained some ground against its major counterparts that was seen in the wake of the aforementioned FOMC minutes with ranges overall relatively tight. This is likely as a by-product of a quiet European calendar and macro newsflow with a bulk of today’s releases and speakers not due until the latter half of the session. SEK has seen some weakness early doors with Swedish inflation metrics all falling short of expectations and subsequently providing the Riksbank with further ammo to stand pat on existing policy despite recent calls from the market to reconsider their  approach. In option activity, 2bln worth of expiries loom in EUR/USD between 1.1790 – 1.1805 with another 7.5bln worth of expiries between 112.00 and 113.05 in USD/JPY. AUD benefited from stronger than expected Home Loans data, printing 1.0% vs. Exp. 0.5%. EUR/AUD ran into key levels ahead of  the data, rejecting June’s high around the 1.5224 area.
In commodities, WTI and Brent crude futures continue to remain in close proximity to their post-API lows with the latest report revealing a surprise 3.1mln bbl build and subsequently pushing WTI back below USD 51/bbl. This morning’s IEA release has done little to instigate price action with key findings including expectations that OPEC will maintain output steady around current levels and their measure of compliance standing at 88%. Gold prices have remained supported by the broadly softer USD while copper was flat overnight and held onto recent advances amid a mostly positive global risk tone during Asia-Pac trade.
US Event Calendar
8:30am: PPI Final Demand MoM, est. 0.4%, prior 0.2%; Ex Food and Energy MoM, est. 0.2%, prior 0.1%; Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.2%
8:30am: PPI Final Demand YoY, est. 2.6%, prior 2.4%; Ex Food and Energy YoY, est. 2.0%, prior 2.0%; Ex Food, Energy, Trade YoY, prior 1.9%
8:30am: Initial Jobless Claims, est. 250,000, prior 260,000; Continuing Claims, est. 1.93m, prior 1.94m
9:45am: Bloomberg Consumer Comfort, prior 49.9
DB’s Jim Reid concludes the overnight wrap
Markets should be wide awake over the next 30 hours or so as we have US bank earnings kicking off Q3 reporting (JPM and Citi today), PPI today, US retail sales tomorrow and then possibly the data  highlight of the month at the moment,  namely US CPI. Before all that, the Fed kickstarted the second half of the week with their minutes last night where there was a clear debate on inflation but the tone – coupled with the two Fed speakers – was perhaps a bit more dovish than market expectations with UST 10y down 1.3bp. The odds of a December rate hike is c77% (per Bloomberg) though and not much changed.
In the details, the minutes noted “many participants expressed concerns that the low inflation this year might reflect not only transitory factors…” and that several policy makers said their decision on whether to raise rates this year “would depend on whether the economic data in the coming months increased their confidence” that inflation is on track to reach the Fed’s target. Further, “it was noted that some patience in removing policy accommodation while assessing trends in inflation was warranted”. Elsewhere, some participants were more worried about upside risks to inflation arising from “a labour market that had already reached full employment and was projected to tighten further”. Notably, many participants continued to believe that labour market pressure would show through to higher inflation eventually.
Onto the Fedspeak. The more dovish Fed Evans said “it’s too early” to make a call on a December rate hike and that “I really don’t see any harm in waiting longer just to take more stock of the inflation situation”. Further, he added that while price pressure should emerge from a stronger labour market, “it might take something like 3.5% unemployment rate before you really see inflation pick up”. Elsewhere, the Fed’s Williams said that with the unemployment rate now down to 4.2% in September, the Fed had “not only reached the full employment mark, we’ve exceeded it”. He expects the unemployment rate to fall below 4% and remains optimistic that core PCE inflation should rise to 2% “over the next couple of years”.
Staying on the inflation debate, DB’s US economics yesterday published a note looking at demographics and inflation and find that aging has in fact been positive for US inflation in recent decades and that population aging should continue to act as a tailwind for inflation in the years ahead. Most people assume ageing is deflationary. I disagreed with that in last year’s long-term study and this report looks at the theme in much more detail. For more details, refer to Link. Also worth noting that Sweden’s September inflation reading (0.4% mom; 2.4% yoy expected) is due today and as George Saravelos reminded  us yesterday it’s interesting as they the only G10 economy to see core inflation hit its target over the last few months. Although the Riksbank has previously said they are not fully convinced with the recent upside surprises and don’t see the price pressures as sufficiently broad based enough to be too concerned.
Over to Catalonia, Spain’s PM Rajoy has given the Catalan President Puigdemont until next Monday (10am local time) to formally clarify whether he has declared independence or not. The formal request for clarity is a necessary step if PM Rajoy decides to trigger legal procedures (Article 155 of  the constitution) which could lead to the suspension of the Catalan Government. PM Rajoy noted “if Mr Puigdemont makes clear his wish to respect the law and return institutions to normality, he would end a period of uncertainty and rupture” and that he “just needs to say he didn’t declare independence”. Spanish markets responded positively, with IBEX up 1.34% and 10y yields down 5.8bp. The spread between Bunds and Spain has now narrowed to 116bp (-15bp than 7 days ago).
Staying with politics, the Italian government has won two of three confidence votes to pass a new electoral law, which could potentially penalise the 5-Star Movement party (5SM). A final confidence vote will be held today before the bill goes to the upper house senate later on where the government apparently has no clear majority. As a reminder, the new voting system allows 36% of lawmakers elected on a first-past-the-post basis and 64% via proportional representation. This development coupled with the latest over in Spain may have assisted the Italian markets too, with the FTSE MIB up 0.97% and 10y bond yields down 2.7bp yesterday.
Turning to the US 3Q reporting season which has kicked off this week. DB’s Chief asset allocation strategist Binky Chadha noted that the bottom up consensus expects 2.9% EPS growth yoy in 3Q, but adjusting for a typical beat (+3.4%) this suggests growth more like 6.3%, although still down from the 12.2% in 2Q, partly driven by the hurricanes. Across sectors, median growth is expected to be stronger for the cyclical sectors, led by Energy (67%), Tech (12%) and the Industrials (11%), with Financials (+8%) in the middle and then lowest for several defensives sectors like Telecoms (-1%), Utilities (+1%) and  Staples (+4%). Link Elsewhere, JP Morgan (3Q adj. EPS $1.65ps consensus; +19% yoy, +4% qoq) and Citi’s (3Q adj. EP $1.32ps consensus; +14% yoy, +9% qoq) 3Q results will be out later today, with expected themes likely to be slowing loan growth, sound credit quality and weaker trading income. Notably, the latter has been well flagged by management, with Citigroup and JP Morgan previously suggesting trading income could decline c15% and c20% yoy respectively.
This morning in Asia, markets are building on the positive US lead and are trading higher as we type. The Nikkei is up 0.42% back around 21-year highs. The Kospi (+0.46%), Hang Seng (+0.26%) and ASX 200 (+0.29%) are all slightly up. Quickly recapping other markets performance from yesterday. US equities nudged higher to another fresh record high, with the S&P and Dow both up 0.18% while the Nasdaq rose 0.25%. Within the S&P, modest gains in the real estate (+0.54%) and utilities sectors were partly offset by losses by telco and financial names. In Europe, excluding the Spanish (+1.34%) and Italian (+0.97%) markets, other indices were little changed (Stoxx 600 flat; DAX +0.17%; FTSE -0.06%).
Over in government bonds, core European bond yields rose modestly while peripherals outperformed. Bunds (10y +2bp), Gilts (+1.7bp) and OATs (+1.4bp) rose modestly while peripherals such as Spain (-5.8bp), Portugal (-5.2bp) and Italy (-2.7bp) all outperformed. At the 2y part of the curve, core bond yields were little changed, with Bunds broadly flat but Gilts rose 2bp.
Turning to currencies, the US dollar index weakened 0.29%, while Sterling and the Euro gained 0.15% and 0.43% respectively, with the latter partly assisted by the Spanish developments. In commodities, WTI oil rose 0.75% following OPEC raising its demand forecasts for next year, but some of those gains are being reversed this morning following a surprise increase in US crude inventories. Elsewhere, precious metals were marginally higher (Gold +0.29%; Silver +0.31%) while other base metals were mixed, but little changed (Copper +1.82%; Zinc -0.96%; Aluminium -0.37%).
Away from the markets, the ECB board member Peter Praet reiterated “a very substantial degree of monetary accommodation is still needed” and “in the next few weeks, the governing council will again  assess….its package of measures…and will recalibrate its instruments accordingly”. On the calibration of QE, the ECB’s Smet sounded a bit dovish, noting “given that we still need more confidence on inflation….” and “when there is more uncertainty, you would probably see more merits from a higher (pace of purchases)”. Earlier in the day, Bloomberg noted that according to Euro-area central bank  officials, policy makers are expected to preserve their pledge to not raise interest rates until “well past” the end of bond buying. We shall find out more in the next ECB meeting on 26th October.
Over in the US, President Trump spoke in Pennsylvania to rally support for his tax reform. He provided more details on how the plans could benefit middle class families, claiming it will eventually translate   into a “$4,000 pay raise for an ordinary worker”, albeit over an eight year timeframe (as per Trump’s economic advisers). For Congress, Trump noted “all I can say is, you better get it (tax plans) passed”. Elsewhere, Trump will reportedly meet with one of the Fed Chair candidates (John Taylor – Stanford Uni. Economist) this week, while Politico reported that Treasury Secretary Mnuchin has privately recommended Fed Governor Powell to Trump. Either way, it sounds like we may have a winner pretty soon.
Turning to Japan, a series of larger opinion polls suggest PM Abe could secure a two third majority in the election on the 22nd October. Kyodo news polled 90k people on 10-11 October and estimated Abe’s LDP party and his coalition partner could win a total 319 seats (out of 465). Elsewhere, the Asahi and Nikkei newspaper predicted the coalition could win c300 seats (c65%). The Kyodo polls estimates Governor Koike’s new Party of Hope could win 60 seats (c13%).
Finally, turning back to Brexit. While the EU and UK are reportedly closer on issues such as citizens’ rights, the actual Brexit talks are still  likely in stalemate with a key issue being the potential financial obligations UK owes to the EU bloc. Chancellor Hammond said “we have to be prepared for a no deal scenario unless or until we have clear evidence that is not where we will end up”. When pressed further, he indicated that he would start investing money (for plan B contingency plans) as soon as January if progress hasn’t been made in the  talks.
Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the August JOLTS job openings was lower than consensus at 6.08m (vs. 6.13m expected) as well as last month’s record level of 6.14m. The quits rate edged down 0.1pts to 2.1%. Elsewhere, the weekly MBA mortgage applications fell 2.1% (vs. -0.4% previous), but the 4-week average still rose 4.4% yoy. Over in Spain, the final reading for September inflation was broadly unchanged at 0.6% mom and 1.8% yoy (vs. 1.9% expected).
Looking at the day ahead, in France we’ll receive the final September CPI revisions, while Eurozone’s August IP will be out (0.6% mom; 2.6% yoy expected). The BoE will also release the latest credit conditions and bank liabilities surveys mid-morning. In the US, the big focus will be on the September PPI report (0.2% mom; 2% yoy expected for core), while the latest weekly initial jobless claims will also be released. Onto other events, today is a busy day for speakers with the ECB’s Draghi and Fed’s Brainard due to take part in a monetary policy panel in the afternoon, while the Fed’s Powell will speak shortly after at a conference in Washington. President Trump is also tentatively scheduled to give a speech on US policy towards Iran. Earnings season also gains some early momentum with JP Morgan and Citi scheduled to report.

3. ASIAN AFFAIRS

i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 2,18 points or .06% /Hang Sang CLOSED UP 69.48 pts or .24% / The Nikkei closed UP 73.45 POINTS OR .35/Australia’s all ordinaires CLOSED UP 0.40%/Chinese yuan (ONSHORE) closed UP  at 6.5886/Oil DOWN to 50.63 dollars per barrel for WTI and 56.39 for Brent. Stocks in Europe OPENED RED EXCEPT ENGLAND FTSE  .  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.5885. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.5828 AND BOTH YUANS ARE STRONGER AGAINST THE DOLLAR. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

b) REPORT ON JAPAN

 

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

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   1.1842 DOWN.0022/ REACTING TO 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  RED EXCEPT LONDON  

USA/JAPAN YEN 112.44 DOWN 0.014(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 1.3135 DOWN .0102 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/

USA/CAN 1.2485 UP .0035 (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 22 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1842; / Last night the Shanghai composite CLOSED DOWN 2 PO.18INTS OR .06%      / Hang Sang  CLOSED UP 69.48 OR .24%   /AUSTRALIA  CLOSED UP 0.40% / EUROPEAN BOURSES OPENED ALL RED EXCEPT LONDON

The NIKKEI: this THURSDAY morning CLOSED UP 73,45 POINTS OR .35% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 69.48 POINTS OR .24%  / SHANGHAI CLOSED DOWN 2,18 POINTS OR .06%    /Australia BOURSE CLOSED UP 0.40% /Nikkei (Japan)CLOSED UP 73.45 POINTS OR .35%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1291.85

silver:$17.17

Early THURSDAY morning USA 10 year bond yield:  2.3446% !!! UP 1  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  2.881, UP 1 IN BASIS POINTS  from WEDNESDAY night. (POLICY FED ERROR)

USA dollar index early THURSDAY morning: 93.16 UP 14 CENT(S) from YESTERDAY’s close. 

This ends early morning numbers  THURSDAY MORNING

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And now your closing THURSDAY NUMBERS  (NOTPROVIDED TONIGHT)

Portuguese 10 year bond yield: 2.332% DOWN 7 in basis point(s) yield from WEDNESDAY 

JAPANESE BOND YIELD: +.066%  UP 1  in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.635% DOWN 6 IN basis point yield from WEDNESDAY 

ITALIAN 10 YR BOND YIELD: 2.165 UP 4 POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 54 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.464% UP 2  IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR THURSDAY  (NOT PROVIDED TONIGHT)

Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/12:00 PM

Euro/USA 1.1842 UP .0030 (Euro UP 30 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.45 UP 0.102(Yen DOWN 10  basis points/ 

Great Britain/USA 1.3204 DOWN  0.0004( POUND DOWN 4 BASIS POINTS)

USA/Canada 1.2515 UP .0004 Canadian dollar DOWN 4 basis points AS OIL ROSE TO $50.74

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This afternoon, the Euro was ROSE 30 basis points to trade at 1.1842

The Yen FELL to 112.45 for a LOSS of 10  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 4 basis points, trading at 1.3204/ 

The Canadian dollar FELL by 4 basis points to 1.2515,  WITH WTI OIL RISING TO :  $50.74

The USA/Yuan closed AT 6.5910 
the 10 yr Japanese bond yield closed at +.066% UP 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 0  IN basis points from WEDNESDAY at 2.337% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.8713 DOWN 0 in basis points on the day /

Your closing USA dollar index, 93.08  DOWN 21 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  22,43 POINTS OR 0.30%
German Dax :CLOSED UP 12.21 POINTS OR .09%
Paris Cac  CLOSED DOWN 1.60 POINTS OR 0.03% 
Spain IBEX CLOSED DOWN 2.50 POINTS OR 0.02%

Italian MIB: CLOSED DOWN 153.70 POINTS OR 0.68% 

The Dow closed DOWN  31.88 POINTS OR .14%

NASDAQ WAS closed DOWN  12.05 PTS OR .18%  4.00 PM EST

WTI Oil price;   XXXX  1:00 pm; 

Brent Oil: XXX 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  XXX DOWN 7/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 7 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO  +0XXX%  FOR THE 10 YR BOND  4.PM EST EST

END

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

NOT PROVIDED TONIGHT

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$50.99

BRENT: $56.51

USA 10 YR BOND YIELD: 2.363%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.8952% 

EURO/USA DOLLAR CROSS:  1.1807 UP .0065

USA/JAPANESE YEN:112.43   DOWN  0.241

USA DOLLAR INDEX: 93.26 DOWN 41  cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3202 : UP 60 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2515 UP 40 BASIS pts 

German 10 yr bond yield at 5 pm: +0.462%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Bitcoin Rips, Banks Dip As Fed Crushes Yield Curve To 10-Year Flats

 

 

The yield curve collapse means nothing…

Don’t sweat it…

While Trannies ripped higher, the rest of the equity market hummed along the unchanged line in a narrow range… (NOTE the weakness toward the end of the day which seems to have been catalkyzed by reports that Trump met with John Taylor re: fed head)

The S&P dipped to unchanged on the week…

 

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FOR THE REST SEE ZERO HEDGE)

end

This is a good one:  Trump angry that the repeal of  state and local taxes means higher taxes for the middle class.  He was sold a bill of goods that he did not understand

(courtesy zerohedge)

Trump “Angry” After Learning What State And Local Tax Repeal Really Means

 

 

In what may be the final nail in President Trump’s tax reform proposal, months after the White House proposed ending a tax break for people in high-tax states – which would suggest Trump had more than enough time familiarize himself with how it all works –  Trump reportedly “grew angry” when he learned that the change would hurt some middle-income taxpayers, Bloomberg reports citing people familiar with his thinking.
As Bloomberg amusingly adds, “It’s not clear why the president didn’t know the implications of the SALT deduction for middle-class taxpayers when the plan was released.”
Trump’s confusion appears to have led to even more confusion everywhere else: according to Bloomberg, Trump’s concerns led him to say this week that “we’ll be adjusting” the tax-overhaul framework, but it’s not clear how he and congressional leaders would make up for the $1+ trillion in revenue that would be lost without ballooning the deficit or torpedoing support for the plan among hard-line conservative Republicans. Meanwhile, Trump’s top economic adviser Gary Cohn said Thursday morning that the president “is not rethinking his position on repealing the state and local tax deduction” contradicting what Trump himself said previously.
In any case, while the plan to eliminate State and Local tax deductions may have been prompted by an initial assumption that such a move would mostly hit blue states as shown below…

… the realization that it would have a dire impact on republican politicians in NY, NJ and CT may have given Trump reason to reevaluate.
The White House press office on Wednesday night declined to comment on internal deliberations, but released a general statement that said in part: “The president has made it unequivocally clear that a key priority for tax reform is to cut taxes for America’s hardworking middle class families.”
But Trump’s chief economic advisor, Gary Cohn, said Thursday that the president is not rethinking his position on the state and local tax deduction, which allows households to deduct state and local taxes on their federal returns. Cohn declined to take other questions. Cohn had previously suggested that the White House was open to negotiation on the issue.
With many – among them Goldman – speculating that Trump’s tax plan may be phased in (if it even passes) amid revenue offset concerns, the so-called SALT deduction has emerged as a key flash point in the tax debate, “one that could determine whether Trump has enough votes or will fail again on one of his top legislative priorities.”

As Bloomberg put it, the numbers are daunting for Trump: Roughly two dozen House Republicans are concerned about eliminating the deduction – and he can’t afford to lose too many more votes than that in the House.
Predicably, republican lawmakers from the states that would be most impacted from the SALT deduction are worried, and are scheduled to meet Thursday with the House’s chief tax writer, Ways and Means Chairman Kevin Brady, to discuss the issue. Many come from the high-tax states that would be hardest hit, including New York and New Jersey.

 

King on Wednesday floated the idea of limiting the use of the deduction to people with incomes less than $400,000 — a cap that that has drawn some support, including from New Jersey’s Tom MacArthur. MacArthur was one of the key Republicans who forged a compromise in the House over a bill to repeal Obamacare. That effort ended last month when the Senate failed to vote on its own repeal-and-replace legislation.

MacArthur said he’s taken his concerns to House leaders and the White House “because I think it’s important that everyone involved understands — you can’t gloss over this, this is a big issue, and we can’t do tax reform on the backs of six or seven states. It’s just not fair.”

House Speaker Paul Ryan defended the repeal of state and local tax deductions at an event in Washington on Thursday, criticizing the break for “propping up profligate big government states.”
“People are going to be better off no matter what state you come from,” Ryan said, citing the tax plan’s call to double the standard deduction and increase the child tax credit.

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Trump’s White House first proposed ending the SALT deduction in April, in a one-page outline of the president’s tax goals. Its repeal is estimated to generate about $1.3 trillion over 10 years, making it an important way to help pay for the business and individual tax-rate cuts Trump and congressional leaders propose.
Representative Chris Collins, a New York Republican who’s close to Trump said he thought the president has been more focused on cutting taxes for corporations and pass-through businesses to stimulate the economy. “And he’s left it to others for the details of how we get there” and “how we pay for it,” a confused Collins said.
At the same time, many conservatives argue that the tax break should be abolished because it subsidizes state and local governments that tax their citizens heavily – a view Trump echoed during an interview that Fox News aired Wednesday night. “It is finally time to say, ‘Make sure your politicians do a good job of running your state,”’ he told interviewer Sean Hannity.
* * *
Of course, should the SALT provision be amended, absent any additional government revenues, it would greatly increase the federal deficit that would result from Trump’s tax bill – endangering the legislation’s support among some lawmakers or limiting the size and duration of its cuts.
In the White House, Trump’s point-person on tax policy, Shahira Knight, met Wednesday with representatives of groups that want to preserve the tax break, including the National Association of Realtors. But earlier in the day, Kevin Hassett, one of the president’s top economic advisers, said the administration still expects to see a tax bill with permanent rate cuts and no deduction for state and local taxes. The state and local tax deduction primarily benefits high-income people in high-tax states, including New York, New Jersey and California – i.e. largely blue states as shown in the chart above. But about 10 percent of tax filers with incomes less than $50,000 claimed the deduction in 2014, according to the Tax Policy Center, a Washington policy group. People who make more than $100,000 a year accounted for about two-thirds of the SALT deductions claimed that year.
Meanwhile, in its latest assessment of the Trump tax plan, Goldman said that “it seems likely that Congress will phase in the tax cut over time. Congressional Republicans are likely to try to provide some near-term tax benefit to individuals ahead of the midterm election, but the greater emphasis in our view will be to reduce statutory tax rates while keeping the overall cost within the parameters laid out in the pending budget resolution. This would argue for a somewhat backloaded tax cut.”
In any case, judging by the market, and specifically the ratio of “High tax” corporates to the overall market, as of this moment, the market is once again convinced that Trump’s tax reform is effectively dead.

White House

 

JPMorgan FICC Revenues Plunge 27%, “Low Volatility” Blamed

 

 

Launching Q3 earnings season, moments ago JPM reported third quarter Net Income of $6.7 billion and EPS of $1.76, beating expectations $1.67 and 18 cents, or 7% higher than a year ago, on “managed” revenue of $26.2 BN, beating consensus expectations of $25.7 BN, up 3% from the $25.5BN in Q3 2016 revenue .

JPM reported average core loans up 7% Y/Y and 2% Q/Q, with net interest income up $1.2Bn Y/Y to $12.5bn, “primarily driven by the net impact of rising rates and loan growth” even as average NIM missed.
Commenting on the results, if not on this morning’s new all time high in bitcoin, Dimon said “JPMorgan Chase delivered solid results in a competitive environment this quarter with steady core growth across the platform. And for the first time, the Firm led the nation in total U.S. deposits, as consumers and businesses continue to view us as their partner of choice.

 

The global economy continues to do well and the U.S. consumer remains healthy with solid wage growth. Unfortunately, natural disasters in the U.S. and abroad have impacted many of our customers and we have responded with enormous financial support as well as the expertise and generosity of our employees to help these customers, clients and communities. Building on our success to-date in Detroit, we have announced new initiatives in Chicago and Washington, D.C. to drive inclusive economic growth in those communities. We will be there to do our part. And this is in addition to the $1.7 trillion of credit and capital supplied this year to consumers and small and mid-sized businesses and corporate clients.”
Breaking down the data, Dimon said that “in Consumer & Community Banking, card sales and merchant processing volumes were once again up double digits, while loans and deposits continued to grow strongly. In the Corporate & Investment Bank, we continued to lead our peers in Investment Banking fees, and Treasury Services and Securities Services each generated over $1 billion in revenue. Commercial Banking again delivered outstanding performance with record revenue as our long-term investments in the business are paying off. Our Asset & Wealth Management business delivered strong results with record net income and AUM this quarter.”
JPM reported that its provision for credit losses in Q3 was $1.45BN, above the $1.34BN and above the $1.27BN one year ago, suggesting the bank is starting to prepare for stormier weather ahead.

END

House Passes $37 Billion Disaster-Aid Package

 

 

Disaster victims in Puerto Rico, Texas and Florida can breath a sigh of relief. A piece of legislation authorizing $36.5 billion in aid for communities affected by recent hurricanes and wildfires easily passed the House on Thursday, despite some conservatives’ concerns about the growing cost of disaster relief as wildfires raging in California – expected to be the costliest in modern California history – place yet another strain on FEMA’s budget. All of those who voted against the legislation were from Republicans, but the bill managed to passeasily in the 353-69 vote. The legislation will provide direct disaster relief and replenish FEMA’s depleted coffers as well as the federal government’s flood insurance program.
The package includes $18.7 billion for the Federal Emergency Management Agency’s (FEMA) disaster relief fund – including $4.9 billion for a disaster relief loan account – $16 billion to address national flood insurance program debt and $576.5 for wildfire recovery efforts. It also provided $1.27 billion for disaster food assistance for Puerto Rico.

As the Hill points out, more than 80% of Puerto Rico remains without power in the aftermath of Hurricanes Maria and Irma, and major cities in Texas, Florida, and other Gulf states are slowly rebuilding following Hurricanes Harvey and Irma. Congress is likely to approve still more billions of dollars for disaster aid in the months to come.
Many of the Republicans who opposed the bill bristled at the revitalization of the federal flood insurance program and expressed concern about the growing costs of natural disasters.

 

Congress is likely to approve still more billions of dollars for disaster aid in the months to come. Yet, many of the Republicans who voted against the relief bill said they were protesting the increasing monetary toll that natural disasters are having on the federal budget.

Rep. Mark Walker (R-N.C.), the head of the Republican Study Committee, said that supplemental disaster relief should be offset with spending cuts.

“It is only a matter of time before the U.S. faces the next catastrophe. But for some reason, the government does not budget with this in mind. Instead, Congress waits for a crisis to happen and then hurries to pass an aid package afterward,” he wrote in a Wall Street Journal op-ed.

Rep. Mark Sanford (R-S.C) said the debts would add up regardless of how good the cause of disaster relief was.

“If we don’t do something to begin to offset some of this, I think that in a matter of months or a matter of years people are going to look back at this Congress and say, ‘what were they thinking?’” he said.

His fellow House Freedom Caucus member Rep. David Schweikert (R-Az.) said that bailing out the Flood Insurance program without reforms amounted to throwing good money after bad.
“Emergency is emergency, but there are programs we’re going to have to deal [with], bite the bullet, and I think flood insurance is one of them, where you also have a moral hazard in its current design,” he said.
The disaster relief bill is now awaiting consideration in the Senate. The bill was the second installment of funds for areas that have been ravaged by fires and hurricanes that have hammered the US this year, following a $15.3 billion relief package that was signed into law in September by President Donald Trump, as the New York Times points out. However, with total cleanup costs across a broad swath of the Southern US, along with Puerto Rico and the Virgin Islands, already eclipsing the $50 billion mark, much more funding will be needed.
The bill’s passage comes after President Donald Trump tweeted earlier today that the federal government couldn’t stay in Puerto Rico forever.

Given Puerto Rico’s bankruptcy, th federal money is the island’s only real hope to rebuild its devastated power grid and repair roads, dams and hundreds of thousands of homes that were wrecked by Irma and Maria. Even before this year’s storms, the National Flood Insurance Program owed the Treasury more than $30 billion.
The Senate is currently away on a week-long recess, but is expected to pass the bill when lawmakers return next week.

 

 

END

 

 

 

I will see you with a partial commentary THURSDAY OR FRIDAY night.

HARVEY

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