GOLD: $1281.20 DOWN $3.75
Silver: $17.00 DOWN 2 cents
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: $1296.60 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1288.20
PREMIUM FIRST FIX: $8.42 (premiums getting larger)
SECOND SHANGHAI GOLD FIX: $1296;60
NY GOLD PRICE AT THE EXACT SAME TIME: $1288.20
Premium of Shanghai 2nd fix/NY:$8.42(PREMIUMS GETTING LARGER)
LONDON FIRST GOLD FIX: 5:30 am est $1280.65
NY PRICING AT THE EXACT SAME TIME: $1281.00
LONDON SECOND GOLD FIX 10 AM: $1280.20
NY PRICING AT THE EXACT SAME TIME. 1280.80
For comex gold:
NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 82 NOTICE(S) FOR 8,200 OZ.
TOTAL NOTICES SO FAR: 2436 FOR 243,600 OZ (7.576TONNES)
48 NOTICES FILED TODAY FOR
Total number of notices filed so far this month: 776 for 3,880,000 oz
Bitcoin: $5558 bid /$5546 offer DOWN $29.40 (MORNING)
BITCOIN CLOSING;$5409.00 BID/$5428.00 DOWN $148.00
Let us have a look at the data for today
In silver, the total open interest SURPRISINGLY FELL BY ONLY 334 contracts from 192,262 UP TO 191,928 WITH RESPECT TO YESTERDAY’S TRADING (DOWN 33 CENTS). THE CROOKS ARE STILL HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS. IT IS OBVIOUS THAT WE MUST HAVE HAD MINIMAL BANKER SHORT COVERING AND THUS THE REASON FOR ANOTHER RAID TODAY.
RESULT: A TINY SIZED FALL IN OI COMEX WITH THE 33 CENT PRICE FALL. OUR BANKERS COULD NOT COVER ANY OF THEIR HUGE SHORTFALL AND THUS ANOTHER CONTINUAL RAID WAS CALLED UPON .
In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.961 BILLION TO BE EXACT or 138% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT OCT MONTH/ THEY FILED: 48 NOTICE(S) FOR 240,000 OZ OF SILVER.
In gold, the open interest FELL BY A FAIR 4334 CONTRACTS DESPITE THE HUGE FALL IN PRICE OF GOLD ($17.40) . The new OI for the gold complex rests at 528,800 .OUR BANKER FRIENDS COVERED ONLY A SMALL AMOUNT OF THEIR GOLD SHORTS SO THEY COMMENCED ANOTHER RAID THIS MORNING..
Result: A FAIR SIZED DECREASE IN OI WITH THE FALL IN PRICE IN GOLD ($17.40). WE HAD SOME BANKER GOLD SHORT COVERING BY THE BANKERS WHICH WAS NOT ENOUGH FOR OUR CROOKS SO ANOTHER RAID WAS INITIATED TODAY .
we had: 82 notice(s) filed upon for 8200 oz of gold.
With respect to our two criminal funds, the GLD and the SLV:
Tonight , NO CHANGES in gold inventory at the GLD/
Inventory rests tonight: 853.13 tonnes.
Today: no changes in inventory:
INVENTORY RESTS AT 322.271 MILLION OZ
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver FELL BY A TINY 334 contracts from 192,262 DOWN TO 191,928(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . OUR BANKERS WERE AGAIN UNSUCCESSFUL IN COVERING THEIR SILVER SHORTS. THE DATA ALSO SUGGESTS THAT THE BANKERS COULD ONLY COVER A SMALL THEIR GOLD SHORTS . HOWEVER IT IS CLEAR THAT SILVER IS BECOMING IMPOSSIBLE FOR THE CROOKS TO COVER.
RESULT: A TINY SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE HUGE FALL IN PRICE OF 33CENTS WITH RESPECT TO YESTERDAY’S TRADING. 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 UP 9.73 points or .29% /Hang Sang CLOSED UP 14.27 pts or .05% / The Nikkei closed UP 26.93 POINTS OR .13/Australia’s all ordinaires CLOSED DOWN 0.05%/Chinese yuan (ONSHORE) closed DOWN at 6.6240/Oil UP to 52.09 dollars per barrel for WTI and 58.83 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT SPAIN . ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6240. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.6231AND //ONSHORE YUAN WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO THE DOLLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT PARTICULARLY HAPPY TODAY.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
b) REPORT ON JAPAN
c) REPORT ON CHINA
4. EUROPEAN AFFAIRS
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
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 A SMALL SIZED 4334 CONTRACTS DOWN to an OI level of 528,800WITH THE HUGE FALL IN THE PRICE OF GOLD ($17.40 DROP IN YESTERDAY’S TRADING). OUR BANKER FRIENDS HAD MINIMAL SUCCESS IN THEIR ATTEMPT TO COVER MUCH OF THEIR HUGE GOLD SHORTFALL .THEY WERE NOT HAPPY WITH THEIR ATTEMPT YESTERDAY SO THEY CONTINUED TO TORMENT TODAY. 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.
Result: a TINY SIZED open interest DECREASE DESPITE THE HUGE SIZED FALL IN THE PRICE OF GOLD ($17.40.) AFTER BANKERS RETREATED TO HIGHER GROUND THEY INITIATED ANOTHER RAID YESTERDAY AFTERNOON CONTINUING ON THIS MORNING.
We have now entered the active contract month of Oct and here we saw a GAIN of 184 contracts UP TO 502 contracts. We had 1 notice filed yesterday so we GAINED 185 contracts or an additional 18,500 oz will 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. We are also witnessing another queue jumping in the gold comex which is another indicator of physical shortage.
The November contract saw A gain OF 59 contracts up to 1137.
The very big active December contract month saw it’s OI loss OF 4436 contracts UP to 405,082
We had 82 notice(s) filed upon today for 8,200 oz
VOLUME FOR TODAY (PRELIMINARY) 320,951
CONFIRMED VOLUME YESTERDAY: 278,324
We had 48 notice(s) filed for 240,000 oz for the OCT. 2017 contract
|Withdrawals from Dealers Inventory in oz||n/a|
|Withdrawals from Customer Inventory in oz||
|Deposits to the Dealer Inventory in oz||n/a 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||xxx oz|
Today, 0 notice(s) were issued from JPMorgan dealer account and 49 notices were issued from their client or customer account. The total of all issuance by all participants equates to 82 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 42 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
|Withdrawals from Dealers Inventory||n/a|
|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)||776contracts
|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|
NPV for Sprott and Central Fund of Canada
will update later tonight
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 18 no change in gold inventory at the gLD/inventory rests at 853.13 tonnes
Oct 17./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes
Oct 16/A HUGE WITHDRAWAL OF 5.32 TONNES FROM THE GLD/INVENTORY RESTS AT 853.13 TONNES
0CT 13/ NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
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
Now the SLV Inventory
Oct 18 /no changes in silver inventory at the SLV/inventory rests at 322.271 million oz
Oct 17/ A MONSTROUS WITHDRAWAL OF 3.494 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 322.271 MILLION OZ
Oct 16/ NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 325.765 MILLION OZ
oCT 13/ NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ
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/
Indicative gold forward offer rate for a 6 month duration+ 1.52%
Major gold/silver trading/commentaries for TUESDAY
Silver Bullion Prices Set to Soar
By Mark O’Byrne October 18, 2017 1 Comment
Silver bullion prices are expected to jump as solar and smartphone demand rises and the Fed tries to stave off economic weakness
by Myra Saefong via Barrons
Gold prices have far outpaced gains in silver so far this year, but silver will emerge as the winner for the second year in a row.
With a per-ounce price of $17.41 for silver futures as of Friday, analysts say the white metal is poised for a big climb, particularly as the gold-to-silver ratio stands well above historical averages. “Silver is definitely undervalued compared to gold and as a stand-alone investment. I consider it likely to be the most undervalued asset in the general investment markets,” says Paul Mladjenovic, author of Precious Metals Investing For Dummies.
The best barometer of its potential gains comes from its value relative to gold. The long-term average gold-to-silver ratio runs around 15 to 1, while the modern average going back a century is roughly 40 to 1, says Mark O’Byrne, research director at precious-metals storage provider GoldCore. The ratio, which reflects how many ounces of silver bullion it takes to equal the value of one ounce of gold, stood at a whopping 75 to 1 on Friday.
That steep ratio suggests “it’s a good time to buy silver bullion,” says O’Byrne. He explains that the “huge amount of silver used up in industrial applications” suggests the ratio should fall over the long term: “It’s likely that the gold/silver ratio will gradually return to below the 100-year average of 40 to 1.” At the current gold price, that would put silver at nearly $32 an ounce, O’Byrne says.
So far this year, however, prices of gold futures have risen nearly 12%, while silver has gained roughly 6%. Last year, silver’s climb of about 16% outpaced gold’s rise of almost 9%.
“Silver isn’t keeping pace with gold because the market perception is that gold is a safer play, while the market perceives silver’s role as exposed to economic weakness. But as inflation heats up, more of the public will realize silver’s second role as a store of value and inflation hedge,” says Mladjenovic.
Gold is viewed as more of a “pure monetary play, so as more difficulties emerge with paper assets,” such as currencies and debt, “gold will hold up well,” he adds. At the same time, silver, which is a smaller market, has “greater ties to industry,” notably in tech products like smartphones and solar power, and “will do well as markets see greater demand in those sectors.”
The main reason gold has outperformed silver this year, however, is the U.S. dollar, says Brien Lundin, editor of Gold Newsletter, noting, “Gold and the greenback have been trading in a very close inverse correlation for about the last two years, and the relationship has only grown closer this year.”
THE DOLLAR, AS REPRESENTED by the Intercontinental Exchange’s U.S. Dollar Index (ticker: DXY), has fallen 8.8% this year because of “underlying skepticism” about the Federal Reserve’s ability to keep raising rates, says Lundin. “Even the Fed admits a new-normal rate environment would mean a federal-funds rate of around 2.5%. Balance that against its goal of 2% inflation, and you see they [the Fed] want an ultralow real-rate environment that would be bullish for gold and bearish for the dollar,” he adds. Traders in the fed-futures market still overwhelmingly expect a quarter-percentage-point interest-rate hike at the central bank’s December meeting.
If or when that happens, silver will post the bigger gain. GoldCore’s O’Byrne expects gold to finish the year above $1,300 an ounce, for a gain of roughly 13% in 2017. Silver, meanwhile, is set to test $20 an ounce by the end of this year, and close above $19—representing a “healthy” 20% gain for the year.
MYRA P. SAEFONG is a commodities writer for MarketWatch
News and Commentary
Goldman Sachs Says Gold Is Better Than Bitcoin (Bloomberg.com)
Gold prices inch up from one-week low (Reuters.com)
Dollar Rallies on Fed Outlook as Dow Tops 23,000 (Bloomberg.com)
U.S. import prices surge 0.7% in September (MarketWatch.com)
Gold options trading begins in India (IndiaTimes.com)
Source: Bloomberg via UK.investing.com
Buy Platinum – It Is a Good Time To Buy (MoneyWeek.com)
Gold’s Pariah Status Is Music To Our Contrarian Ears (Gold-Eagle.com)
Everything Is Crazy and the Markets Aren’t Freaking Out (Bloomberg.com)
We Don’t Know How to Replace the Great Big Gold Deposits From the Past (FUW.ch)
Give the gift of Smithsonian magazine for only $12! (Smithsonianmag.com)
Gold Prices (LBMA AM)
17 Oct: USD 1,289.70, GBP 973.47 & EUR 1,097.02 per ounce
16 Oct: USD 1,305.15, GBP 981.08 & EUR 1,107.03 per ounce
13 Oct: USD 1,293.90, GBP 972.88 & EUR 1,093.73 per ounce
12 Oct: USD 1,294.45, GBP 977.96 & EUR 1,092.26 per ounce
11 Oct: USD 1,290.20, GBP 978.62 & EUR 1,091.90 per ounce
10 Oct: USD 1,289.60, GBP 977.77 & EUR 1,094.61 per ounce
09 Oct: USD 1,282.15, GBP 976.23 & EUR 1,092.01 per ounce
Silver Prices (LBMA)
17 Oct: USD 17.11, GBP 12.96 & EUR 14.55 per ounce
16 Oct: USD 17.41, GBP 13.09 & EUR 14.75 per ounce
13 Oct: USD 17.20, GBP 12.94 & EUR 14.55 per ounce
12 Oct: USD 17.20, GBP 13.06 & EUR 14.50 per ounce
11 Oct: USD 17.15, GBP 13.00 & EUR 14.51 per ounce
10 Oct: USD 17.12, GBP 12.98 & EUR 14.53 per ounce
09 Oct: USD 16.92, GBP 12.86 & EUR 14.41 per ounce
Recent Market Updates
– Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures
– Puerto Rico Without Electricity, Wifi, ATMs Shows Importance of Cash, Gold and Silver
– U.S. Mint Gold Coin Sales and VIX Point To Increased Market Volatility and Higher Gold
– Global Outlook – Mad, Mad, Mad, MAD World: News in Charts
– Young Guns of Gold Podcast – ‘The Everything Bubble’
– London House Prices Are Falling – Time to Buckle Up
– Perth Mint Gold Coins Sales Double In September
– Survey shows UK and US Pensions Crisis is Imminent
– Gold Investment In Germany Surges – Now World’s Largest Gold Buyers
– Yahoo Hacking Highlights Cyber Risk and Increasing Importance of Physical Gold
– Safe Haven Silver To Outperform Gold In Q4 And In 2018
– Plan For Run On The Pound
– Russia Gold Rush Sees Record Reserves For Putin Era
interesting: Goldman Sachs has now stated that precious metals are a relevant asset class and will rise in price despite zero yield
(courtesy Goldman Sachs/zerohedge)
What Goldbugs Have Been Waiting For: Goldman’s New Primer On Gold
The good news is that Goldman believes “precious metals remain a relevant asset class in modern portfolios, despite their lack of yield” and disagrees with Ben Bernanke and the naysayers “They are neither a historic accident or a relic. Indeed, by looking at each of the physical properties of an ideal long-term store of value…we can clearly see why precious metals were initially adopted and why they remain relevant today.”
It was sounding really good – and there was 91 pages to go – although when it came to the drivers of precious metal prices, Goldman did not exactly re-invent the wheel “We see two key drivers of the precious metals markets: Fear and Wealth”
That said, there was a new take on what, in Goldman’s eyes constitutes fear as “in our new framework we see a closer link to growth expectations. However, we ?nd that many risk factors are relevant, depending on the sub-component of gold demand: real interest rates, debasement risks, sovereign balance sheet risks, geopolitical risks and other market tail-risks. Stated more simply, we are talking about the drivers of “risk-on”/”risk-off” behavior in markets.”
On the wealth angle, the good news for gold was that “as economies grow, they tend to go through a rapid gold accumulation phase at around per capita GDP of $20,000-$30,000, following a ‘hump-shaped’ relationship between per capita income and gold demand. As more EM economies (including China) are set to grow to these income levels over the next few decades.”
As in-depth students of gold market research, our mood was lifted by some genuinely original research. Goldman found that the ratio between gold purchases and household savings (global we assume) has been broadly stable at around 1.7% for almost 40 years. Who knew that.
Goldman approximates the gold supply available for households to purchase as new mine supply plus net central bank sales. It goes on to use some simple maths “we can view the equilibrium 1 .7% share of savings allocated to gold (?*) through the following relationship, where the equilibrium real gold price is p*, the amount of household savings is Y , and the supply of gold available to households (de?ned as mine supply plus central bank net sales) is S.”
Solving the equation for the real price of gold suggests that gold is positively correlated with savings and negatively correlated with the value of mine supply and net central bank selling. Yet again, it’s not a surprise, but we were surprised by the closeness of the fit with the real price of gold since 1980 (left hand chart).
Goldman’s analysts tweak the model to improve the fit from fear variables, principally “risk-off” periods when there are portfolio reallocations from equities to gold “We see large and persistent deviations from the long-run equilibrium allocation to gold, driven by ‘risk-on’/’risk-off’ episodes. While the forces driving risk sentiment can shift over time, they are nearly always highly cyclical in nature. Growth expectations and the business cycle are therefore key variables, being negatively correlated to gold demand.”
We are pleased – in the current environment of central bank bubbles – that the establishment’s favourite investment bank emphasised gold’s role as a hedge to systemic tail risk, which is precisely what got most of us interested in gold more than a decade ago. To wit “Gold tends to preserve its real purchasing power over the very long run (albeit with substantial short-term deviations). Since Roman times, the real value of gold has remained more or less unchanged in the face of wars and political, social and technological shocks. Many investors therefore see gold as a way to hedge against structural tail risks, which could potentially erase the real value of all other ?nancial assets…Throughout history, governments have run de?cits and built large levels of debt. Having accumulated a large stock of debt, governments must either pursue austerity, ?nd a way to boost growth, or engineer in?ation (‘print money’) to erode the real value of their debt. Historically, governments often chose money expansion over austerity. Gold has traditionally been in competition with government paper currencies. When there is loss of credibility in the central bank/government’s ability to meet their liability of maintaining the real purchasing power of their currency, gold demand tends to go up. Normally, this happens when the government does a large monetary expansion, which the public fears could lead to currency debasement.”
The report goes on to compare gold and cryptos, asking if cryptocurrencies are the “new gold” and concluding “We think not, gold wins out over cryptocurrencies in a majority of the key characteristics of money.” Briefly, Goldman argues that gold is not subject to competition from alternatives (ignoring silver and cryptos, of course),holding its purchasing power (although cryptos are untested) and much lower daily volatility. It finds that cryptos (on the basis of Bitcoin) are vulnerable to hacking, regulatory risk, network and infrastructure risk, while being superior in terms of portability and divisibility.
The Goldman report touches on one critical feature of the gold market, but only barely, noting that “Investors have become more conscious of the physical vs. futures market distinction in the post-2008 crisis period. As such, the fear drivers have likely tilted demand more in favor of physical gold (or physically-backed ETFs) as a hedge against black-swan events vs. using futures.”
We apologise if we are getting a bit “picky” (not for “serious Goldbugs” perhaps), but Goldman doesn’t address the fact that the global gold market, including the LBMA (over 95% of the trading in unallocated “paper gold”), is a fractional reserve system, in which the ratio of paper to physical was estimated by the Reserve Bank of India at 92:1.
We would also have liked to see the discussion of issues such as
Repeating daily trading patterns which seem to be driven by computer algorithms.
The near-lock step movement of the gold price and the Yen since the Fed and the BoJ expanded QE in late-2012.
Frequent intra-day waterfall declines in the gold price where large volumes of futures contracts are “dumped”, without any attempt to maximise the selling price.
The role of the Bank for International Settlements in the gold market and opaque central bank lending policies of physical metal.
The volume of LGD bars in London vaults (excluding official holdings and known physically-backed ETFs) which is the “float” backing the massive LBMA trade.
These omissions tainted a generally positive view of a report in which Goldman turned surprisingly bullish on gold.
Your early TUESDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST
2. Nikkei closed UP 26.93 POINTS OR .13% /USA: YEN RISES TO 112.65
3. Europe stocks OPENED IN THE GREEN EXCEPT SPAIN ( /USA dollar index RISES TO 93.68/Euro DOWNto 1.1739
3b Japan 10 year bond yield: RISES TO -+.073/ 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:: 52.09and Brent: 58.33
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 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 +.378%/Italian 10 yr bond yield DOWN to 2.017% /SPAIN 10 YR BOND YIELD UP TO 1.578%
3j Greek 10 year bond yield FALLS TO : 5.480???
3k Gold at $1280.60silver at:16.96: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 2/100 in roubles/dollar) 57.33
3m oil into the 52 dollar handle for WTI and 58handle 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 SMALL SIZED DEVALUATION SOUTHBOUND
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.65 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 0.9708as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1508 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 +0.378%
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 2.3231% early this morning. Thirty year rate at 2.8231% /
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Dow Futures Over 23,000: Dollar, Global Stocks Jump As China Congress Begins
World stocks stayed near peaks and currencies moved in tight ranges on Wednesday as China’s 19th Communist Party Congress opened while focus in Europe turned to speeches from top euro zone central bankers before next week’s key policy meeting, as well as Catalonia’s ultimatum due on Thursday. S&P futures are solidly in the green as usual, with Dow futures jumping above 23,000, driven higher by IBM as investors looked for new reasons to extend gains after hitting new all-time highs Tuesday. The dollar continues to strengthen, buoyed by speculation that the next Federal Reserve chair will be more hawkish, as volatility in major currencies fell to a three-month low, while Treasury yields rose.
Among the factors contributing to today’s burst of risk on buying is the continued bid in USD, which has forced markets into hybrid risk-on mode according to Bloomberg. EUR/USD and GBP/USD push through yesterday’s session lows, which consequently supports domestic equity markets via exporters and multinationals. Rally in USD/JPY pressures USTs, dragging down core fixed-income markets; UST/bund spread wider by 1.6bps. U.S. equity futures also supported, Dow futures test 23,000; crude futures hold small gains after bullish API data.
European stocks are on fire, with the Stoxx 600 heading for its biggest rise in 2 weeks as the euro weakened for a fifth day on speculation the ECB will remain accommodative even as it tapers asset purchases, while volatility slid; the Stoxx 600 gained 0.4% while euro falls back to $1.1750 and VStoxx hits intraday record low. Technology, food and beverage best performers among industry groups, all 19 sectors in green; DAX hit another record high. The European vol index, the VStoxx dropped as much as 8% to 10.7, the lowest level on record. bond yields fell ahead of a series of speeches from top European Central Bank officials before next key policy meeting on Oct. 26.
Looking at European stocks, BNP Paribas Wealth Management CIO Florent Brones said that “there are many positive elements supporting the euro-area stock market at this point, and while the market has been rallying, we’re not yet seeing double-digit gains.”
European Central Bank chief Mario Draghi, Chief Economist Peter Praet and Executive Board Member Benoit Coeure are among those officials scheduled to speak. First remarks from Draghi at a conference in Frankfurt had limited initial market impact. “Today, bond market investors will probably concentrate exclusively on the various ECB speakers, who could influence market expectations for the last time ahead of next week’s meeting,” said BayernLB rate strategist Alexander Aldinger.
The MSCI’s Asia-Pacific index ex Japan was flat, near its late 2007 peak after China President Xi Jinping kicked off the twice-a-decade party congress with a wide-ranging speech, in which he warned of “severe” challenges while laying out a road map to turn the country into a leading global power by 2050. Investors are watching to see whether Xi will push through tough reforms as the world’s second-largest economy faces structural challenges over the next five years. Jinping said the market would be allowed to play a decisive role in allocating resources but also said the role of the state in the economy had to be strengthened.
“His speech offered nothing to move the markets in Asia,” Bayern LB’s Aldinger also said. Investors are looking for clear direction on economic and financial market reform over the next five years, but as has been the case in history, the actual speech was light on detail.
China’s CSI300 index added 0.8 percent in reaction, while Shanghai stocks rose 0.3 percent. “Market participants are paying much more attention to the party congress this time, as they are watching if any surprise reforms will emerge amid concerns over economic growth,” said Yan Kaiwen, analyst with China Fortune Securities.
Still in Asia, Japan’s Nikkei rose for a 12th consecutive day, getting a lift from hopes that this weekend’s election will produce political stability and continuation of loose monetary policy even as technical indicators suggest the gauge is overheating. An opinion poll by Kyodo showed Japanese Prime Minister Shinzo Abe’s coalition was on track for a roughly two-thirds majority in Sunday’s general election there. The 14-day relative strength index stood above 70 – a level frequently seen as overbought – for an eighth day, while the Toraku Index, a barometer of momentum, climbed to 128, far higher than the 120 level that signals the Topix is poised to fall.
“The Japanese stock market may be on alert for high prices and stay in a narrow range,” said Mitsushige Akino, an executive officer with Ichiyoshi Asset Management Co. in Tokyo. “Yet business sentiment is on a firm footing not only in the U.S. but also globally.” Pharmaceutical stocks and automakers were among the biggest boosts to the benchmark gauge, while banks and services companies weighed the most. About two stocks fell for every one that rose. The Nikkei 225 Stock Average extended its winning streak, the longest since June 2015, boosted by Fast Retailing Co. and Astellas Pharma Inc. The Topix has gained 2.5 percent in an 8-day rally, boosting its advance this year to almost 14 percent. It trades at 15.3 times estimated profits for the next year, well below the high of 20.5 reached in March 2013 and compared with the S&P 500 Index’s 19.4 times. “Valuations are low, both compared to other global markets and particularly so when taking account of the 0% yield on 10yr government bonds,”
said Nicholas Smith, a strategist at CLSA Ltd. in Tokyo. “Sure, over the short-term it might have a pullback, but I think the fundamentals are excellent and the market is pricing in the decreased uncertainties that go with Abe stronger for longer.”
In currencies, the dollar edged up amid speculation President Trump could chose a more hawkish leader to replace Federal Reserve Chair Janet Yellen, while investors awaited for any news on progress on U.S. tax reforms.The dollar index rose 0.07 percent to 93.54, extending a rebound from Friday’s 2 1/2-week low of 92.749. It rose as high as 93.729 on Tuesday. The onshore yuan predictably strengthened against the dollar as the 19th Party Congress began in Beijing while the U.S. Treasury’s twice-yearly report softens China FX criticism. The PBOC injected a net 270 billion yuan of liquidity helping the Shanghai Composite 0.3% higher. Australian 10-year yield drops to a one-month low of 2.72% as the curve extends bull-flattening; Treasuries steady. Canadian dollar outperforms G-10 peers after Nafta negotiators agree to extend talks into next year; kiwi slips following weaker Fonterra milk price auction. WTI crude holds above $52; Dalian iron ore futures gain 2.2 percent
In Europe, the euro was holding at $1.17, still some way above the recent low and major chart support at $1.1667, as dealers awaited speeches by several policymakers from the European Central Bank due later on Wednesday, which includes President Mario Draghi. Some risks linger: Catalonia has until Thursday to back down from its secession push. Investors were reminded of the economic cost of the crisis when Spain, the euro-region’s fourth-biggest economy, cut its growth forecasts for next year. The Catalan standoff is one of several political risks facing investors in Europe, including high-stakes coalition talks that began Wednesday in Germany between Angela Merkel’s Christian Democrats and potential partners to lead Europe’s biggest economy.
Overnight, the biggest mover was the Mexican peso which boasted its biggest rise in over four months after trade ministers from the United States, Canada and Mexico extended the deadline on a contentious round of talks.
In commodity markets, talk the next U.S. Federal Reserve chief may be a policy hawk kept gold pinned down $1,283.01 an ounce. Oil prices were lifted by a fall in U.S. crude inventories and concerns that tensions in the Middle East could disrupt supplies. Brent crude futures were at $58.31, up 0.4 percent from their last close – and almost a third above mid-year levels.
Rates markets remain paralyzed with barely any moves across the bond complex: the yield on 10-year TSYs rose 3 bps to 2.33% , the highest in a week; Germany’s 10-year yield gained two basis points to 0.39 percent, while Britain’s 10-year yield advanced two basis points to 1.276 percent.
The Fed’s Beige Book and earnings from American Express, EBay and Alcoa will be in focus today.
Bulletin headline summary from RanSquawk
European equities higher, with IT outperforming
CAD and MXN notably firmer after NAFTA ministers agreed to extend negotiations into 2018.
Looking ahead, highlights include US Housing Starts and comments from Praet and Coeure.
S&P 500 futures up 0.1% to 2,559.50
VIX Index trading 0.3% lower at 10.28
STOXX Europe 600 up 0.4% to 391.35
MSCI Asia down 0.01% to 167.44
MSCI Asia ex Japan up 0.01% to 552.36
Nikkei up 0.1% to 21,363.05
Topix up 0.07% to 1,724.64
Hang Seng Index up 0.05% to 28,711.76
Shanghai Composite up 0.3% to 3,381.79
Sensex up 0.1% to 32,656.28
Australia S&P/ASX 200 up 0.01% to 5,890.48
Kospi down 0.06% to 2,482.91
WTI Crude up 0.3% to $52.05
Brent futures up 0.68 to $58.35/bbl
Gold spot down 0.2% to $1,282.88
U.S. Dollar Index up 0.1% to 93.60
German 10Y yield rose 0.6 bps to 0.371%
Euro down 0.06% to $1.1759
Italian 10Y yield fell 3.4 bps to 1.732%
Top Overnight News
Xi Jinping warned of “severe” challenges while laying out a road map to turn China into a leading global power by 2050. The nation will continue opening its doors to foreign businesses and strengthen financial sector regulation
The U.S. softened FX criticism for China, lauded it for acting to avoid a “disorderly” depreciation and then allowing the yuan to rise against the dollar this year. The Treasury Department said no major trading partner is manipulating its currency to gain an advantage in trade
Senators from both political parties said a bipartisan deal was reached to stabilize Obamacare, just two weeks before Americans start signing up for 2018 coverage
Nikki Haley, the U.S. ambassador to the United Nations, will use a Wednesday Security Council meeting to seek world attention on Iran’s actions in the Middle East in an early test of whether President Donald Trump’s toughening position on the Islamic Republic is alienating allies and leaving the U.S. isolated internationally
The SEC is preparing to provide formal assurances to Wall Street by telling financial firms they won’t have to overhaul their operations to comply with sweeping new European rules on investment research, three people familiar with the matter said
With monetary policy being accommodative, there is a window of opportunity for economic reforms, European Central Bank President Mario Draghi said as he spoke on Wednesday
Dollar continued to strengthen helped by speculation that the next Federal Reserve chair will be more hawkish; Trump’s choice will be unveiled before he leaves Nov. 3 for an 11-day trip to Asia and Hawaii, a person familiar with the process said Tuesday
Spanish Deputy PM: Spanish government will take control of Catalonia unless the regional leader withdraws his claim to independence by 10 a.m. on Thursday
Housing starts and building permits for Sept. will be announced and the U.S. Federal Reserve releases its Beige Book
Asia equity markets traded marginally positive following a similar picture in the US where all indices extended on record levels, in which the DJIA briefly surmounted the 23,000 milestone for the 1st time ever. The mild momentum from the historical feat in US carried over to Asia which saw ASX 200 (+0.1%) briefly above 5,900 and at its highest in almost 6 months, while Nikkei 225 (+0.1%) also eked minor gains. Hang Seng (Unch) and Shanghai Comp. (+0.3%) were kept afloat after a continued substantial liquidity operation by the PBoC, although upside was capped as focus remained on the 19th CPC National Congress which opened today. Finally, 10yr JGBs were flat amid a lack of drivers and with demand restricted by a mildly positive tone in Japan and a tepid BoJ Rinban announcement for JPY 400bln of JGBs. Chinese President Xi delivered address at the opening of the 19th CPC National Congress in which he said China will continue to reduce overcapacity and that China will deepen interest rate and FX reform. President Xi also commented that China will lower barriers of entry for foreign businesses and that GDP is to increase to CNY 80tln from CNY 54tln over the next half-decade.
Top Asian News
Topix Holds Near 10-Year High as Indicators Signal Overheating
Japan Equity Movers: Ichiyoshi Securities, Matsuya, Toho Zinc
Espenilla Vows Philippines Won’t Overheat, Peso Is Under Control
Xi Imagines China in 2050: Highlights From His Three-Hour Speech
Europe Aviation Agency Warns on Kobe Steel as Scandal Deepens
China Sells Bonds at Cost Lower Than Forecast as PBOC Adds Cash
European bourses were relatively directionless early in the session, although they have since picked up some upward momentum, with the Stoxx 600 up 0.4%. Focus this morning has been on the latest batch of earnings releases, particularly from the some of the Dutch large caps, with Akzo Nobel announcing a second profit warning this year, while ASML Holding also announced a weak earnings update. EGBs softer across the board, the belly of the German curve noticeably underperforming with the yield up 2bps. Focus will be on the German auction in the long-end.
Top European News
U.K. Jobless Rate Stays at 42-Year Low Amid Strong Labor Demand
ECB Bond Program Survives Another Challenge at German Court
ECB’s Draghi Sees ‘Window of Opportunity’ for Economic Reforms
ECB Set-Up in Euro Bonds Underway as Market Sees QE for Longer
Bond Calls Clash at JPMorgan, Morgan Stanley Before ECB Tapering
Saenz Says Spain Will Apply Art. 155 if Catalans Don’t Comply
In FX, the dollar index caught a bid overnight and throughout the morning session, trading back above 93.50. This comes off the back of yesterday’s reports that the US President could be swaying towards, noticeable hawk, John Taylor as Janet Yellen’s successor, with the announcement expected before Trump’s department for Asia on November 3rd. NAFTA reports were a theme of yesterday’s US session, as early source reports indicated that Canada and Mexico were said to reject US NAFTA proposals. However, as the story developed, later comments took focus, stating that ministers had agreed to extend negotiations into 2018. Following the initial reports, USD/CAD hit 1.2590, however, over the following hours, the move was reversed, as the pair broke through 1.25, hitting lows through 1.2490. USD/MXN saw similar price action, after firstly moving to highs of 19.1500, the pair came back to trade at lows of 18.7300. Sterling trades subdued, following the bearish BoE commentary seen yesterday. GBP/USD took a slight move higher following the release of the UK jobs reports, however this was quickly pared given that wages had slowed from the prior month. GBP/USD has consolidated through 1.32, with EUR/GBP running into a slowdown at 0.8930, now behaving as the weekly high.
In commodities, West Texas Intermediate crude increased 0.3 percent to $52.04 a barrel, the highest in three weeks. Gold dipped 0.4 percent to $1,280.13 an ounce.
Looking at the day ahead, data will likely play second fiddle with the most notable releases being August/September employment data in the UK and September housing starts and building permits data in the US. The Fed’s Beige Book is also due out in the evening. Corporate earnings results on Wednesday include eBay and American Express
US Event Calendar:
7am: MBA Mortgage Applications, prior -2.1%
8am: Fed’s Dudley and Kaplan Discuss Economic Development
8:30am: Housing Starts, est. 1.18m, prior 1.18m; Building Permits, est. 1.25m, prior 1.3m
2pm: U.S. Federal Reserve Releases Beige Book
3. ASIAN AFFAIRS
i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 9.73 points or .29% /Hang Sang CLOSED UP 14.27 pts or .05% / The Nikkei closed UP 26.93 POINTS OR .13/Australia’s all ordinaires CLOSED DOWN 0.05%/Chinese yuan (ONSHORE) closed DOWN at 6.6240/Oil UP to 52.09 dollars per barrel for WTI and 58.83 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT SPAIN . ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6240. OFFSHORE YUAN CLOSED STRONGER TO THE ONSHORE YUAN AT 6.6231AND //ONSHORE YUAN WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO THE DOLLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT PARTICULARLY HAPPY TODAY.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
b) REPORT ON JAPAN
3. CHINA REPORT
Carney tells it like it is: the potential Achilles heel in Brexit talks is the huge derivates underwritten by the bankers: they will be null and void and huge losses will be bestowed upon the European bankers
Carney Reveals Europe’s Potential Achilles Heel in Brexit Talks
This morning, BoE Governor Mark Carney discussed the risks of a hard Brexit during his testimony to the UK Parliamentary Treasury Committee. There was renewed weakness in Sterling during his testimony. Ironically, given the fall in Sterling, Carney explained why Europe’s financial sector is more at risk than the UK from a “hard” or “no-deal” Brexit. We wonder whether Juncker and Barnier appreciate the threat that a “no-deal” Brexit poses for the EU’s already fragile financial system?
When asked does the European Council “get it” in terms of potential shocks to financial stability, Carney diplomatically commented that “a learning process is underway.” Having sounded alarm bells about clearing in his last Mansion House speech, he noted “These costs of fragmenting clearing, particularly clearing of interest rate swaps, would be born principally by the European real economy and they are considerable.”
Calling into question the continuity of tens of thousands of derivative contracts, he stated that it was “pretty clear they will no longer be valid”, that this “could only be solved by both sides” and has been “underappreciated” by Europe. Moving on to the possibility that there might not be a transition period, Carney had a snipe at Europe for its lack of preparation “We are prepared as we should be for the possibility of a hard exit without any transition…there has been much less of that done in the European Union
Maybe it’s Europe, not the UK, that needs the transition period most.
In Carneys view “It’s in the interest of the EU 27 to have a transition agreement. Also, in my judgement given the scale of the issues as they affect the EU 27, that there will ultimately be a transition agreement. There is a very limited amount of time between now and the end of March 2019 to transition large, complex institutions and activities…If one thinks about the implementation of Basel III, we are alone in the current members of the EU in having extensive experience of managing the transition for individual firms of various derivative and risk activities If one thinks about the implementation of Basel III, we are alone in the current members of the EU in having extensive experience of managing the transition for individual firms of various derivative and risk activities from one jurisdiction back into the UK. That tends to take 2-4 years. Depending on the agreement, we are talking about a substantial amount of activity.”
Returning to the theme of financial stability, he stated “As a general thing, in an uncooperative outcome, at least initially, the UK will be long financial services. We will have more capacity, capital, individuals, collateral in the UK. The EU will be short of financial services because not all of that capacity will be able to go across. The entire economic impacts are greater for the UK but, from a financial stability perspective, they are greater for the EU.”
On further questioning, Carney outlined the other two major issues, along with derivatives and wholesale banking, which would be affected, i.e. cross-border provision of insurance (UK domiciled entities would be unable to pay out) and data protection and transfer (there is more data in the UK which is relevant to the EU than vice versa).
Summing up, Carney stated “These issues are bigger for Europe than they are for us, but they’re material for us.” That comment prompted in which case we have much more leverage in order to get a deal?” The diplomatic reply was “I wouldn’t want to use financial stability issues as leverage. I wouldn’t want them to be addressed in a bloodless technocratic way in the interests of all the citizens.” Didn’t he just describe Juncker’s modus operandi.
A terrific commentary from Mike Krieger on the Catalonia crisis. If article 155 is called upon then this could lead to serious problems in Europe as citizens do not have the right to self determination
(courtesy Mike Krieger/Liberty Blitzkrieg blog)
“If Catalonia Fails, We All Fail…”
Authored by Mike Krieger via Liberty Blitzkrieg blog,
While I’ve touched on the Catalan independence movement in several recent posts, I want to make one thing clear from the start. I don’t have a strong opinion on whether or not independence is the right move for the region and its people. It would be completely inappropriate for me, a U.S. citizen living in Colorado, to lecture people 5,000 miles away on how they should organize their political lives.
While I don’t have an opinion on how Catalans should vote, I unwaveringly support their right to decide the issue for themselves. When it comes to the issue of voting and referendums, we’ve entered a topic far bigger than Catalonia, Spain, or even Europe itself. When it comes to the issue of political self-determination, we’re talking about an essential human right which should be seen as inherent to all of us, everywhere.
The Catalan push for a right for vote on independence should be seen as part of a much larger push toward greater self-determination that humans will demand in increasingly large numbers in the years ahead. The time is ripe for us as a species to insist on a transition toward a more voluntary, sane, peaceful and decentralized process of political organization. This is an idea whose time has come, and I thank the Catalan people from the bottom of my heart for brining it to the fore, and also for conducting themselves in such a noble, courageous and thoughtful manner. You are leading the way for the rest of us.
The key reason Madrid is wrong on this issue relates to its insistence that Spain must sustain itself in its current form forever. Since Spain is a manmade political creation, this is the modern equivalent of claiming a “divine right of kings,” but rather than bestowing this archaic conception on individual rulers, it’s bestowed upon a nation-state. This is not just an absurd position, it’s patently anti-human. As I discussed in the post, It’s Time to Question the Modern Nation-State Model of Governance:
As things stand today, humans essentially have two choices when it comes to political life. We either accept the nation-state we’re born into and play the game to the best of our advantage, or we try to become citizens of another country with values that more align with our own. The only way to really shatter existing political power structures and form new ones is through violent revolution or war, which is an insane way of reorganizing matters of human governance. One of Spanish Prime Minister Mariano Rajoy’s key arguments in casting the Catalan referendum as illegal is that Spain is an indivisible nation under the 1978 constitution. Let’s think about what this means in practice.
Anyone who’s spent any time in Spain understands how culturally and linguistically distinct many of the regions are when compared to Madrid. These are differences that go back centuries and can’t be brushed off by a constitution created a few decades ago. The idea that these various regions must be part of a centralized Spain even if the people within the regions want political autonomy is ethically preposterous, as well as authoritarian and evil in every sense of the word. If done properly, human governance should always be a voluntary arrangement. If an overwhelming majority of culturally distinct people within any nation-state decide the super state is no longer working for them, they should have every right to leave. Anything else is bondage.
If humans are going to evolve into better forms of political organization rooted in voluntary associations, we must first reject the clear authoritarian nature of our current political environments. All of us are randomly born into nation-states which we never chose in the first place and told to accept them as eternal structures. The people of Catalonia have realized the absurdity of this and are taking a brave stand on the issue. Anyone who genuinely believes in human rights must stand with the people of Catalonia and support their right to a referendum should they choose to have one.
With political philosophy out of the way, I want to move on to a discussion of strategy and why I think those leading the push for Catalan independence have played their hand brilliantly thus far.
First, leadership’s emphasis on a peaceful movement in the face of thuggish violence and aggression by the Spanish state is of the utmost importance. For an independence movement to succeed and create a better, more free society afterwards, things must be done in a conscious way. As I’ve said many times before, ends never justify the means. The means are everything. Moreover, by exposing the opposition as goons, you foster increased solidarity amongst your neighbors who may have been on the fence when it comes to independence. You also create passionate allies across the world. The Catalan people have succeeded remarkably on all these fronts.
Immediately following the October 1st referendum, I was concerned that Catalan President Carles Puigdemont would make a mistake by prematurely declaring independence. This would’ve been a huge error since while 90% voted for independence, only 40% or so voted. While such a lopsided result certainly makes the case that Catalans deserve a vote for self-determination, it’s not a clear mandate given the low turnout. If the people of Catalonia want to succeed in their push, Madrid must be seen as the unreasonable — and very public — aggressor in virtually every move on the chessboard. By not prematurely declaring independence Catalonia pushed the move back into Madrid’s court, which is wise since the government there has a habit of making really stupid decisions.
Unsurprisingly, it didn’t take long for Spain to make yet another blunder with yesterday’s imprisonment without bail of two of Catalonia’s independence leaders.
Spain’s biggest political crisis in decades worsened on Monday night when Madrid’s High Court jailed the heads of Catalonia’s two main separatist groups pending an investigation for alleged sedition.
The Catalan government accused Madrid of taking “political prisoners” and one of the groups has called for peaceful demonstrations around Catalonia on Tuesday, with the biggest expected to begin in Barcelona in the evening.
Catalan leader Carles Puigdemont, in a tweet following the detentions, said: “Sadly, we have political prisoners again.”
The phrase was an allusion to the military dictatorship under Francisco Franco, when Catalan culture and language were systematically suppressed. It carries an emotional resonance given fascism is still a living memory for many Spaniards.
Knowing that jail was a possibility, Omnium chief Jordi Cuixart had prerecorded a video message. It’s short, powerful and inspiring.
If you think you’ve seen enough, brace yourselves because it may get far more chaotic in the days ahead. If Spain’s Prime Minister Mariano Rajoy goes through with his threat to invoke Article 155 on Thursday should Catalonia refuse to clarify its position on independence (it won’t), it’ll be the equivalent of a political nuclear bomb going off in Europe.
From the AP:
Spain’s deputy prime minister says that Catalonia’s leader didn’t give an adequate response in his letter about the region’s independence and has until Thursday to comply with the country’s laws.
Carles Puigdemont’s letter, issued two hours before a Monday deadline, didn’t clarify whether he in fact declared Catalonia’s independence from Spain. He called for talks with Spain’s government.
Spain’s central government wanted a simple “yes” or “no” answer from Puigdemont, something that Spanish Deputy Prime Minister Soraya Saenz de Santamaria said that he didn’t provide.
Saenz de Santamaria said in an address to reporters that “it wasn’t very difficult to say yes or no. That was the question that was asked and the response shouldn’t be complicated.”
She said he has until Thursday morning to fall in line, or faces the possibility of Spain activating Article 155 of the Constitution which would allow the central government to take over parts of Catalonia’s self-governance.
Should the Spanish government activate Article 155, it’ll mark the culmination of a perfectly played independence movement by the Catalans. This isn’t to say that the road to independence, or more autonomy, will be smooth or easy from that point forward, but it will create a sense of increased solidarity amongst the Catalan people that wasn’t as widespread before October 1st. Many of those who opposed independence before, or were on the fence, will come around to standing with their friends and neighbors in the face of unacceptable aggression from Madrid. The road may be a long one, but invoking Article 155 will mark the beginning of the end for Madrid.
As I mentioned at the beginning of this post, the issue of political self-determination is much bigger than Catalonia and Madrid.
The Catalan struggle represents just one battle in an overall human push for freedom and voluntary associations. It’s a fight in a much larger war that absolutely must be won for liberty and progress to blossom on this planet. A battle between decentralization, freedom and voluntary action, against centralization, authoritarianism and coercion.
You know where I stand.
* * *
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5. RUSSIA AND MIDDLE EASTERN AFFAIRS
6 .GLOBAL ISSUES
8. EMERGING MARKET
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:00 am
Euro/USA 1.1739 DOWN.0032/ 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 GREEN except spain /
USA/JAPAN YEN 112.65 UP 0.448(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 1.3156 DOWN .0036 (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 1.2528 UP .0013(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS WEDNESDAY morning in Europe, the Euro FELL by 32 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1739; / Last night the Shanghai composite CLOSED UP 9.75 POINTS OR .29% / Hang Sang CLOSED UP 14.27OR .05% /AUSTRALIA CLOSED DOWN 0.05% / EUROPEAN BOURSES OPENED GREEN EXCEPT SPAIN
The NIKKEI: this WEDNESDAY morning CLOSED UP 26.93POINTS OR .13%
Trading from Europe and Asia:
1. Europe stocks OPENED GREEN \EXCEPT SPAIN
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 14.27 POINTS OR .05% / SHANGHAI CLOSED UP 9.75 POINTS OR .29% /Australia BOURSE CLOSED DOWN 0.05% /Nikkei (Japan)CLOSED UP 26.93POINTS OR .13% / INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1280.75
Early WEDNESDAY morning USA 10 year bond yield: 2.323% !!! UP 2 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)
The 30 yr bond yield 2.823 UP 2 IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)
USA dollar index early WEDNESDAY morning: 93.68 UP 20 CENT(S) from YESTERDAY’s close.
This ends early morning numbers WEDNEDAY MORNING
And now your closing WEDNESDAY NUMBERS \4 PM
Portuguese 10 year bond yield: 2.346% UP 12in basis point(s) yield from TUESDAY
JAPANESE BOND YIELD: +.073% up 3/10 in basis point yield from TUESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.617% UP 7 IN basis point yield from TUESDAY
ITALIAN 10 YR BOND YIELD: 2.041 UP 3 POINTS in basis point yield from TUESDAY
the Italian 10 yr bond yield is trading 42points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.396% UP 3 IN BASIS POINTS ON THE DAY
IMPORTANT CURRENCY CLOSES FOR WEDNESDAY
Closing currency crosses for TUESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM
Euro/USA 1.1800 UP 29 (Euro UP 29 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 112.88 UP 0.671(Yen DOWN 67 basis points/
Great Britain/USA 1.3195 UP 0.0005( POUND UP 5 BASIS POINTS)
USA/Canada 1.2468 DOWN.0030 Canadian dollar UP 30 basis points AS OIL ROSE TO $51.99
This afternoon, the Euro was UP 29 to trade at 1.1800
The Yen FELL to 112.88 for a LOSS of 67 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 ROSE BY 5 basis points, trading at 1.3195/
The Canadian dollar ROSE by 30 basis points to 1.2468 WITH WTI OIL RISING TO : $51.99
Your closing 10 yr USA bond yield UP 4 IN basis points from TUESDAY at 2.339% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.851 UP 5 in basis points on the day /
Your closing USA dollar index, 93.38 DOWN 11 CENT(S) ON THE DAY/330 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 WEDNESDAY: 1:00 PM EST
London: CLOSED UP 26.70 POINTS OR 0.36%
German Dax :CLOSED UP 47.97 POINTS OR .37%
Paris Cac CLOSED UP 22.44 POINTS OR 0.42%
Spain IBEX CLOSED UP 56.60POINTS OR 0.55%
Italian MIB: CLOSED UP 16.91 POINTS OR 0.08%
The Dow closed UP 160.16 POINTS OR .70%
NASDAQ WAS closed UP 0.56 PTS OR .01% 4.00 PM EST
WTI Oil price; 51.99 3:00 pm;
Brent Oil: 58.12 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 57.39 DOWN 4/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 4 BASIS PTS)
TODAY THE GERMAN YIELD FALLS TO +.365% 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 4:00 PM:$51.99
USA 10 YR BOND YIELD: 2.331% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.851%
EURO/USA DOLLAR CROSS: 1.1800 UP .0029
USA/JAPANESE YEN:112.88 UP 0.671
USA DOLLAR INDEX: 93.138UDOWN 11 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.3195 : UP 5 POINTS FROM LAST NIGHT
Canadian dollar: 1.2468 UP 30 BASIS pts
German 10 yr bond yield at 5 pm: +0.365%
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
The following will explain why the next Fed Governor cannot raise rates without destroying the housing sector
(courtesy Finance dude 85)
Could the Next Fed Appointment Crush the Housing Market?
As the end of Federal Reserve Chairwoman Janet Yellen’s first term approaches, financial markets are beginning to digest the increased likelihood that US President Donald Trump will opt to appoint a more hawkish individual to the position. Even though the Federal Reserve is largely expected to continue tightening monetary policy over the coming months as it pares down the balance sheet and contemplates a dovish hike, Trump’s appointment could send shockwaves through the housing market.
One of the nastier side effects of operating at or near the zero-bound for interest rates has been through the housing market.
One of the nastier side effects of operating at or near the zero-bound for interest rates has been returns. However, this rapid valuation expansion has not been limited strictly to financialized assets, but also physical assets like real estate. When seen in the context of the more hawkish leanings of Trump’s recent Fed Chair interviewees, the Administration’s next Fed appointment could pose the risk of a serious correction across asset classes.
Fed Frontrunners Exhibit More Hawkish Bent
Financial news outlets have been rife with reports covering the potential picks for Fed Chairman, with two of the leading candidates including Economist John Taylor and former Federal Reserve Governor Kevin Warsh. Taylor, who currently serves as an economics professor at Stanford University, received high marks from Trump according to a Bloomberg report on the matter. Trump was purportedly very impressed with his credentials, though unlike other candidates Taylor is among the fiercest advocates of having policy measures closely reflect economic conditions.
The “Taylor Rule”, titled after the economist, stipulates rates should rise when inflation is running at an elevated pace or unemployment is below the “full employment” threshold and should fall in the opposite scenario. Applying this set of rules to current economic conditions indicates that the key Fed Funds rate should be 3.74% to reflect high levels of employment and rising prices. At nearly 3 times the present rate, a selection of John Taylor to chair the Fed could rapidly dampen overextended valuations in equities and the housing market. Already his interview with Donald Trump caused a palpable dip in gold prices considering his overtly hawkish stance.
By comparison, Kevin Warsh has also advocated for a tighter monetary policy regime, greater deregulation, and a general makeover of the Central Bank. His attitude towards reform has won him positive mentions as well. However, his overall degree of hawkishness and stated desire to overhaul the inflation target could put him at the epicenter of a dramatic policy shift that departs from the more cautious approach of current Chair Janet Yellen.
Factors Outside the Fed’s Control
While easy to label the rebuilding efforts in Texas and Florida as positive for the overall housing market, this deals more with the supply angle than demand. On the buy side, a Fed determined to raise interest rates will assuredly presage rising mortgage costs which could in turn subject buyer interest to some downside as financing costs climb. Though it is tempting to cite the foreclosure rate at an 11-year low as a sign of strength, it does not necessarily imply that the housing market is on stable footing, especially as prices reach past the realm of affordability.
Considering income growth has kept nowhere near the same pace as price growth for homes according to the monthly Case-Shiller home price index, the lack of affordable solutions may be another factor that hurts demand and concurrently weighs on pricing. For the year through July, average hourly earnings climbed by 2.50% while housing prices of 20 major US metropolitan areas increased by 5.80% over the same period. With price growth outpacing wages by such a significant margin, the surge in values should be a worrying sign for prospective buyers thinking about diving in while mortgage rates remain not far from record lows.
However, a more concerning indication apart from unaffordability is the degree to which flipping has reemerged. The move is eerily reminiscent of the years leading up to the last financial crisis as lending standards are relaxed. House flipping reached the highest point since 2007 during the second quarter of 2017 and nearly 35% of the transactions were accompanied by mortgages. Even Goldman Sachs is getting into the flipping game with its recent acquisition of Genesis Capital LLC, a move designed to help the institution build a bigger presence in the lending sphere. Should mortgage rates rise in tandem with interest rates, it could spell doom for this substantial portion of residential real estate activity.
The Fed as the Deciding Factor
With the shortlist for the next Federal Reserve Chair realistically narrowed down to 5 candidates, those under consideration for the job have significantly more hawkish leanings than current Chair Janet Yellen and her predecessor Ben Bernanke. While ultimately housing prices are a function of the interaction of supply and demand, demand largely behaves inverse to interest rates. As rates climb, mortgage costs will echo the gains, potentially reducing interest. Should demand fall, housing prices are likely to experience a correction as well after a near 8-year unabated rise in values. Considering the unaffordability aspect and the degree of house flipping, the approaching Fed appointment has a higher propensity to cause a downturn compared to another leg of the ongoing housing market rally.
Finally, what took them so long: The senate is probing the Russian Nuclear bribery case which netted the Clintons millions
Senate Launches Probe Into Russian Nuclear Bribery Case That Netted Clintons Millions
As the media continues to lose their collective minds over $100,000 worth of Facebook ads allegedly purchased by Russians during the 2016 election, the Senate Judiciary Committee has finally decided they’re going to take a look into a shady Russian deal that handed Putin 20% of America’s uranium reserves, was approved by the Obama administration during an ongoing FBI investigation into charges of bribery, extortion and money laundering by the Russian buyer and netted the Clintons millions of dollars in donations and ‘speaking fees.” Here’s more from The Hill:
The Senate Judiciary Committee has launched a full-scale probe into a Russian nuclear bribery case, demanding several federal agencies disclose whether they knew the FBI had uncovered the corruption before the Obama administration in 2010 approved a controversial uranium deal with Moscow.
Sen. Chuck Grassley (R-Iowa), the committee chairman, gets his first chance to raise the issue in public on Wednesday when he questions Attorney General Jeff Sessions during an oversight hearing.
Though the hearing was scheduled for other purposes, aides said they expected Grassley to ask Sessions questions about a story published in The Hill on Tuesday that disclosed the FBI had uncovered evidence showing Russian nuclear officials were engaged in a racketeering scheme involving bribes, kickbacks and money laundering designed to expand Russian President Vladimir Putin’s atomic energy business on U.S. soil.
“It has recently come to the Committee’s attention that employees of Rosatom were involved in a criminal enterprise involving a conspiracy to commit extortion and money laundering during the time of the CFIUS transaction,” Grassley wrote in one such letter addressed to Sessions.
“The fact that Rosatom subsidiaries in the United States were under criminal investigation as a result of a U.S. intelligence operation apparently around the time CFIUS approved the Uranium One/Rosatom transaction raises questions about whether that information factored into CFIUS’ decision to approve the transaction,” the chairman added.
As we pointed out last summer when Peter Schweizer first released his feature documentary Clinton Cash, the Uranium One deal, as approved by the Obama Administration, netted the Clintons and their Clinton Foundation nearly $150 million in donations and ‘speaking fees’ from Uranium One shareholders and other Russian entities.
Russian Purchase of US Uranium Assets in Return for $145mm in Contributions to the Clinton Foundation – Bill and Hillary Clinton assisted a Canadian financier, Frank Giustra, and his company, Uranium One, in the acquisition of uranium mining concessions in Kazakhstan and the United States. Subsequently, the Russian government sought to purchase Uranium One but required approval from the Obama administration given the strategic importance of the uranium assets. In the run-up to the approval of the deal by the State Department, nine shareholders of Uranium One just happened to make $145mm in donations to the Clinton Foundation. Moreover, the New Yorker confirmed that Bill Clinton received $500,000 in speaking fees from a Russian investment bank, with ties to the Kremlin, around the same time. Needless to say, the State Department approved the deal giving Russia ownership of 20% of U.S. uranium assets
Now, thanks to newly released affidavits from a case that landed one of the Russian co-conspirators, Vadim Mikerin, in jail, we learned just yesterday that not only was the Obama administration aware the Russians’ illegal acts in the U.S. but it may have also been fully aware that “Russian nuclear officials had routed millions of dollars to the U.S. designed to benefit former President Bill Clinton’s charitable foundation during the time Secretary of State Hillary Clinton served on a government body that provided a favorable decision to Moscow.” Per The Hill:
Before the Obama administration approved a controversial deal in 2010 giving Moscow control of a large swath of American uranium, the FBI had gathered substantial evidence that Russian nuclear industry officials were engaged in bribery, kickbacks, extortion and money laundering designed to grow Vladimir Putin’s atomic energy business inside the United States, according to government documents and interviews.
Federal agents used a confidential U.S. witness working inside the Russian nuclear industry to gather extensive financial records, make secret recordings and intercept emails as early as 2009 that showed Moscow had compromised an American uranium trucking firm with bribes and kickbacks in violation of the Foreign Corrupt Practices Act, FBI and court documents show.
They also obtained an eyewitness account — backed by documents — indicating Russian nuclear officials had routed millions of dollars to the U.S. designed to benefit former President Bill Clinton’s charitable foundation during the time Secretary of State Hillary Clinton served on a government body that provided a favorable decision to Moscow, sources told The Hill.
And guess who ran the FBI’s investigation into this particular Russian plot? As The Hill noted, the Mikerin probe began in 2009 under Robert Mueller, now the special counsel in charge of the Trump case, and ended in late 2015 under the controversial, former FBI Director James Comey who was relieved of his duties by President Trump.
Ironically, when the DOJ finally arrested Mikerin in 2014, following 5 years of investigations in a massive international bribery and money-laundering scheme, rather than publicly celebrate, they seemingly swept it under the rug. In fact, there was no public release concerning the case at all until a full year later when the DOJ announced a plea deal with Mikerin right before labor day.
Bringing down a major Russian nuclear corruption scheme that had both compromised a sensitive uranium transportation asset inside the U.S. and facilitated international money laundering would seem a major feather in any law enforcement agency’s cap.
But the Justice Department and FBI took little credit in 2014 when Mikerin, the Russian financier and the trucking firm executives were arrested and charged.
The only public statement occurred an entire year later when the Justice Department put out a little-noticed press release in August 2015, just days before Labor Day. The release noted that the various defendants had reached plea deals.
By that time, the criminal cases against Mikerin had been narrowed to a single charge of money laundering for a scheme that officials admitted stretched from 2004 to 2014. And though agents had evidence of criminal wrongdoing they collected since at least 2009, federal prosecutors only cited in the plea agreement a handful of transactions that occurred in 2011 and 2012, well after the Committee on Foreign Investment in the United States’s approval.
The final court case also made no mention of any connection to the influence peddling conversations the FBI undercover informant witnessed about the Russian nuclear officials trying to ingratiate themselves with the Clintons even though agents had gathered documents showing the transmission of millions of dollars from Russia’s nuclear industry to an American entity that had provided assistance to Bill Clinton’s foundation, sources confirmed to The Hill.
So, what if James Comey really was looking out for Hillary all along?
Housing starts and permits collapse in September and the downfall was in all regions and not just the south-east
Housing Starts, Permits Collapse In September (Spoiler Alert: It Wasn’t Just The Storms)
Following last month’s bounce in permits (later revised lower), September expectations were for a decline of 2.1% (presumably analysts knew of the storms’ potential impact when they guessed) but it utterly collapsed – down 4.5%. Worse still Housing Starts were supposed to drop just 0.4% in September but crashed 4.7%.
These are 2 to 3 standard deviation misses of expectations… so don’t simply blame the storms as analysts were well aware that they occurred when they made their forecasts…
Notably, muiltifamily starts tumbled to 286K, lowest since Sept 2016…
And it was clearly not just the hurricanes – starts dropped in every region except The West:
The senate deal to stabilize Obamacare is now “dead on arrival” in the House.
Senate Deal To Stabilize Obamacare “Dead On Arrival” In The House
Not even a full day after Senators reached a “bipartisan” deal to keep subsidies to health insurers for the next two years, this latest attempt to keep Obamacare alive appears to be dying, because moments after Fox News reported that the Alexander-Murray Bill “will be dead in the House” as many in the GOP “want full repeal and replace”, Bloomberg reported that the bipartisan deal has “stalled out” according to Senator Thune, while Senator Hatch said that he opposes the Alexander-Murray fix altogether.
ALEXANDER/MURRAY HEALTHCARE BILL WILL BE DEAD ON ARRIVAL IN THE HOUSE. HOUSE GOP INSISTS ON REPEAL/REPLACE – SOURCES: FOX NEWS
ALEXANDER-MURRAY PLAN `HAS STALLED OUT,’ GOP SEN. THUNE SAYS
SEN. ORRIN HATCH SAYS HE OPPOSES ALEXANDER-MURRAY OBAMACARE FIX
Meanwhile, after keeping pundits in the dark on whether Trump does or does not support the proposed deal, the President on Wednesday officially backed away from the proposed deal one day after signaling his support for the plan.
On Tuesday, Trump had indicated support of the agreement during a news conference, saying the White House had been involved in the negotiations and that the agreement would be a “short-term solution” that would “get us over this intermediate hump.” During Tuesday’s news conference, he also made clear that he wanted broader legislation to repeal and replace Obamacare and that he still considered the subsidies a government handout that had enriched insurance companies.
However, Trump’s support fizzled on Wednesday, when he wrote on Twitter that “I am supportive of Lamar as a person & also of the process, but I can never support bailing out ins co’s who have made a fortune w/ O‘Care.”
According to Reuters, Republican Senator Lamar Alexander, who reached the agreement with Democratic Senator Patty Murray, said Trump had “completely engineered” the proposal.
In another setback, Republican House of Representatives Speaker Paul Ryan indicated no interest in the Alexander-Murray agreement. “The speaker does not see anything that changes his view that the Senate should keep its focus on repeal and replace of Obamacare,” Ryan spokesman Doug Andres said.
While the proposal drew broad Democratic support, it remained unclear whether the agreement will even come to a vote in the Senate and House, both controlled by Trump’s fellow Republicans. Republicans have a 52-48 Senate majority but other than Alexander, and the never Trumpers, Susan Collins and John McCain, no other Republican senators have publicly embraced the plan.
Meanwhile, as always happens, after healthcare stocks surged yesterday on the news of the “deal”, they are blissfully ignoring today’s inevitable unwind of this arrangement, happy to keep all the gains, for now.
Well that about does it for tonight
I will see you Thursday night