Oct 27 A/Gold rises by $2.15 on news that Trump is leaning to Powell for next Fed Chair/Catalonia votes to secede from Spain/

GOLD: $1271.15 UP $2.15

Silver: $16.75 DOWN 5  cents

Closing access prices:

Gold $1273.60

silver: $16.85

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: $1287.45 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1266.65

PREMIUM FIRST FIX:  $20.80(premiums getting larger)

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SECOND SHANGHAI GOLD FIX: $1287.45

NY GOLD PRICE AT THE EXACT SAME TIME: $1266.75

Premium of Shanghai 2nd fix/NY:$10.03 PREMIUMS GETTING LARGER)

 

CHINA REJECTS NEW YORK PRICING OF GOLD!!!!  

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LONDON FIRST GOLD FIX:  5:30 am est  $1267.20

NY PRICING AT THE EXACT SAME TIME: $1267.80

LONDON SECOND GOLD FIX  10 AM: $1266.45

NY PRICING AT THE EXACT SAME TIME. 1271.45 ??

For comex gold:

OCTOBER/

NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 77 NOTICE(S) FOR  7700  OZ.

TOTAL NOTICES SO FAR: 3250  FOR 325,000 OZ  (10.108TONNES)

For silver:

OCTOBER

 37 NOTICES FILED TODAY FOR

185,000  OZ/

Total number of notices filed so far this month: 1094 for 5,470,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin:  $5833 bid /$5853 offer down $40.00  (MORNING)

BITCOIN CLOSING;$5742 BID:5762. OFFER  down $138.00

end

Let us have a look at the data for today

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In silver, the total open interest SURPRISINGLY ROSE BY A TINY  191 contracts from  193 ,862 UP TO 194,053 DESPITE  YESTERDAY’S TRADING IN WHICH SILVER FELL BY 15 CENTS.  THE CROOKS ARE STILL HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS SO THEY CONTINUE TO TORMENT. THIS IS OPTIONS EXPIRY WEEK FOR BOTH GOLD AND SILVER SO WE MUST EXPECT SOFTNESS IN OUR METAL PRICES UNTIL THE 31ST OF OCTOBER. THEY ARE ALSO TARGETING THE 200 DAY AVERAGE FOR GOLD AT $1266.00

RESULT: A SURPRISING TINY SIZED RISE IN OI COMEX  WITH THE  15 CENT PRICE LOSS.  OUR BANKERS COULD NOT COVER ANY OF THEIR HUGE SHORTFALL.

 In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.970 BILLION TO BE EXACT or 139% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT OCT MONTH/ THEY FILED: 64 NOTICE(S) FOR 320,000  OZ OF SILVER.

In gold, the open interest SURPRISINGLY ROSE BY 2843 CONTRACTS DESPITE THE FALL IN PRICE OF GOLD ($8.80) .  The new OI for the gold complex rests at 529,064. OUR BANKER FRIENDS COULD NOT COVER ANY OF THEIR SHORTFALL DESPITE THE CONSTANT WHACKING .  THIS IS OPTIONS EXPIRY WEEK SO IT IS FITTING THAT THE BANKERS WILL TRY TO SHAKE AS MANY GOLD/SILVER LEAVES AS POSSIBLE. THE TORMENT WILL NO DOUBT END ON OCT 31.2017

 

Result: A SMALL SIZED  INCREASE IN OI DESPITE FALL IN PRICE IN GOLD ($8.80). WE HAD ZERO BANKER GOLD SHORT COVERING AS THE BANKERS FAILED MISERABLY TO LOOSEN ANY GOLD LEAVES FROM THE GOLD TREE YESTERDAY. THIS IS OPTIONS EXPIRY WEEK SO EXCEPT SOFTNESS IN OUR PRECIOUS METALS UNTIL OCT 31.

we had: 77 notice(s) filed upon for 7700  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: 851.95 tonnes.

SLV

Today: NO CHANGE IN SILVER INVENTORY AT THE SLV

INVENTORY RESTS AT 320.288 MILLION OZ

end

.

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

1. Today, we had the open interest in silver SURPRISINGLY FELL   BY ONLY  89 contracts from 193,862  UP TO 193,773(AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) .  OUR BANKERS WERE AGAIN UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF THEIR SILVER SHORTS.

RESULT:  A SURPRISING TINY SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 15 CENT LOSS IN PRICE  (WITH RESPECT TO YESTERDAY’S TRADING). OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF OUR SILVER SHORTS . EXPECT SOFTNESS FOR THE REST OF THE WEEK AS WE ARE NOW IN OPTIONS EXPIRY WEEK.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 9.26 points or .27% /Hang Sang CLOSED UP 236.47 pts or 0.84% / The Nikkei closed UP 268.67 POINTS OR 1.24/Australia’s all ordinaires CLOSED DOWN 0.22%/Chinese yuan (ONSHORE) closed DOWN  at 6.653/Oil UP to 52.50 dollars per barrel for WTI and 59.16 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT SPAIN  .  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6530. OFFSHORE YUAN CLOSED AT VALUE OF THE ONSHORE YUAN AT 6.6530 AND //ONSHORE YUAN  WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO 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/

 

Mattis threatens North Korea who is furious with the naval drills

( zerohedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

Kyle Bass warns that XI has built the Chinese economy on a foundation of sand with its $40 trillion of debt. The huge buildup of debt just cannot continue

 

( Kyle Bass/zerohedge)

4. EUROPEAN AFFAIRS

 

i)CATALONIA/SPAIN

Today should be interesting as chaos continues as secessionists prepare for an independence motion
( zerohedge)

ii)The chaos in Spain is spreading to Europe as the Spanish banks are taking a bloodbath with Catalonia ready for independence declaration

( zerohedge)

iii)Then the unexpected:  Catalonia votes for independence( zerohedge)

iv)Madrid reacts:  Nuclear option activated as the Spanish Senate gives Rajoy the power to oust the Catalan government.
( zerohedge)

v)Then late tonight (Spain time) and later afternoon our time: Spain fires the entire Catalan Government and then calls for snap elections( zerohedge)

vi)the UK is not doing too good as retail employment plunges but most importantly retail sales crash

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

 

7. OIL ISSUES

8. EMERGING MARKET

One down but many to go as Venezuela finds money to pay a critical PDVSA principal payment

(courtesy zerohedge)

9.   PHYSICAL MARKETS

10. USA Stories

i)Soft data U. of Michigan Consumer Sentiment rises to its highest point since 2004 despite tumbling inflation expectations.  In other words, the consumer is happy but not the Fed who wants inflation.

( zerohedge)

ii)Surprisingly despite the hurricanes, the first estimate of Q#3 growth is 3%

( zerohedge)

 

iii)trial balloon:  Trump leaning toward Powell

( zerohedge)

iv)The middle class seems to be disappearing in the USA: one in 5 American renters have missed a payment in the last 3 months

( zerohedge)

v)Another front running case and this involves Wells Fargo.  What is fascinating is that these crooks do it all the time with respect to gold/silver
(courtesy zerohedge)

vi)THE FOLLOWING IS A GOOD READ AS THE AUTHOR OUTLINES WHAT MORE BOMBSHELLS WILL COME OUT OF THE INVESTIGATION ON THE TRUMP DOSSIER(COURTESY KIMBERLEY STRASSEL/WALL STREET JOURNA

Let us head over to the comex:

The total gold comex open interest SURPRISINGLY ROSE BY  1740 CONTRACTS UP to an OI level of 527,961 DESPITE THE FALL IN THE PRICE OF GOLD ($8.80 FALL IN YESTERDAY’S TRADING).   OUR BANKER FRIENDS HAD ZERO SUCCESS IN THEIR ATTEMPT  TO COVER  THEIR HUGE GOLD SHORTFALL. WE HAVE NOW ENTERED OPTIONS EXPIRY WEEK SO THE CROOKS WILL TORMENT SUCH THAT MORE GOLD/SILVER LEAVES WILL FALL.  THEY ALSO SEEM TO BE TARGETING THE 200 DAY MOVING AVERAGE PRICE ($1266).

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  GOOD SIZED open interest INCREASE  WITH THE  FALL IN THE PRICE OF GOLD ($8.80.)  .THERE WAS ZERO SHORT COVERING YESTERDAY .

 

We have now entered the active contract month of Oct and here we saw a LOSS of 84 contracts DOWN TO 86 contracts.  We had 85 notices filed yesterday so we GAINED 1 contract or an additional 100 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 have just witnessed yet another queue jumping in the gold comex which is another indicator of physical shortage. TO SEE THIS IN BOTH GOLD AND SILVER MUST BE HEARTENING TO US!!

The November contract saw A loss OF 110 contracts down to 723.

The very big active December contract month saw it’s OI loss OF 1332 contracts DOWN to 387,969

.

We had 77 notice(s) filed upon today for  7700 oz

 VOLUME FOR TODAY (PRELIMINARY) N/A

CONFIRMED VOLUME YESTERDAY: 400,292

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And now for the wild silver comex results.  Total silver OI SURPRISINGLY ROSE BY A TINY 191 CONTRACTS FROM 193,862 UP TO 194,053 DESPITE YESTERDAY’S 15 CENT LOSS IN PRICE. WE  HAD ZERO BANKER SHORT COVERING AS THE CROOKS TRIED AND FAILED IN THEIR ATTEMPT TO  LOOSEN ANY SILVER LONGS FROM THE SILVER TREE  YESTERDAY. THE BANKERS WERE NOT HAPPY WITH THEIR POOR RESULT YESTERDAY SO THE CROOKS  CONTINUED WITH THEIR TORMENT TODAY AND THUS EXPECT WHACKING THROUGHOUT THE REMAINDER OF THIS WEEK AND ONTO THE BEGINNING OF NEXT WEEK UNTIL OPTIONS EXPIRY IS FINISHED..
We have now entered the non active contract month of October and here the OI LOST 36 contacts DOWN TO 38.  We had 28 notices filed on yesterday so we GAINED 8 contracts or AN ADDITIONAL 40,000 oz will stand for delivery and 0 EFP’s were issued.   November saw a GAIN of 22 contract(s) and thus RISING TO  542. After November, the NEXT big active contract month is December and here the OI LOST 1015 contracts DOWN to 140,716 contracts.

We had 37 notice(s) filed for  185,000 oz for the OCT. 2017 contract

INITIAL standings for OCTOBER

 Oct.27/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil oz
Withdrawals from Customer Inventory in oz  
nil  oz
Deposits to the Dealer Inventory in oz    nil oz
Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
 
77 notice(s)
7700 OZ
No of oz to be served (notices)
9 contracts
(900 oz)
Total monthly oz gold served (contracts) so far this month
3250 notices
325,000 oz
10.108 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  0 kilobar transaction(s)/ 
 WE HAD nil DEALER DEPOSIT:
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had nil customer deposit(s):
total customer deposits   nil oz
We had 0 customer withdrawal(s)
total customer withdrawals; nil  oz
 we had 3 adjustment(s)
 i) Out of Brinks: 6637.906 oz leaves the dealer and enters the customer account of Brinks
ii) Out of International Delaware:  9066.320 oz leaves the dealer and enters the customer account of I -D
iii) Out of JPMorgan; 30,340.515 oz leaves the dealer and enters the customer account of jPMorgan.
For OCT:

Today, 0 notice(s) were issued from JPMorgan dealer account and 69 notices were issued from their client or customer account. The total of all issuance by all participants equates to 77 contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 1 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 (3250) x 100 oz or 325,000 oz, to which we add the difference between the open interest for the front month of OCT. (86 contracts) minus the number of notices served upon today (77 x 100 oz per contract equals 325,900  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  (3250) x 100 oz  or ounces + {(86)OI for the front month  minus the number of  notices served upon today (77) x 100 oz which equals 325,900 oz standing in this  active delivery month of OCTOBER  (10.136tonnes)
.
FOR OCTOBER THIS IS A GREAT SHOWING FOR PHYSICAL DELIVERY . OCTOBER IS A VERY  POOR DELIVERY MONTH DESPITE IT BEING AN ACTIVE MONTH
WE GAINED 1 CONTRACT OR AN ADDITIONAL 100 OZ WILL  STAND FOR DELIVERY
 IT WAS OBVIOUS THAT  THERE WAS HARDLY ANY  PHYSICAL 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. QUEUE JUMPING IS ANOTHER INDICATOR OF PHYSICAL SCARCITY AND THIS EVENT HAPPENED AGAIN THIS MORNING.
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Total dealer inventory 555,286.731 or 17.271 tonnes  (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,447,588.889 or 262.75 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 14 MONTHS  90 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE OCTOBER DELIVERY MONTH
OCTOBER INITIAL standings
 Oct 27/ 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 2,176,764.08 oz
CNT
Delaware
Scotia
Deposits to the Dealer Inventory
 nil oz
Deposits to the Customer Inventory 
 nil
oz
No of oz served today (contracts)
37 CONTRACT(S)
(185,000,OZ)
No of oz to be served (notices)
1 contract
(5,000 oz)
Total monthly oz silver served (contracts) 1094contracts

(5,470,000 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  0 deposit(s) into the dealer account:
total dealer deposit: nil    oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had  3 customer withdrawal(s):
i) Out of Delaware: 19,744.950 oz
ii) Out of CNT: 612,039.100 oz
iii) Out of Scotia: 1,544,890.03 oz
TOTAL CUSTOMER WITHDRAWAL 2,176,674.08  oz
We had 0 Customer deposit(s):
***deposits into JPMorgan have stopped  again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: nil   oz
 
 we had 0 adjustment(s)
 i
The total number of notices filed today for the OCTOBER. contract month is represented by 37 contracts FOR 185,000 oz. To calculate the number of silver ounces that will stand for delivery in OCTOBER., we take the total number of notices filed for the month so far at 1094 x 5,000 oz  = 5,470,0000 oz to which we add the difference between the open interest for the front month of OCT. (38) and the number of notices served upon today (37 x 5000 oz) equals the number of ounces standing.
 

 

.
 
Thus the INITIAL standings for silver for the OCTOBER contract month:  1094 (notices served so far)x 5000 oz  + OI for front month of OCTOBER(38) -number of notices served upon today (37)x 5000 oz  equals  5,475,000 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 AND THE TOTAL NUMBER OF OZ STANDING IN THIS NON ACTIVE MONTH IS SIMPLY OUTSTANDING FOR SILVER.
 
WE GAINED 8  CONTRACTS OR AN ADDITIONAL 40,000 OZ WILL  STAND FOR DELIVERY.
 ESTIMATED VOLUME FOR TODAY:   N/A
CONFIRMED VOLUME FOR YESTERDAY:  96,401 CONTRACTS
YESTERDAY’S CONFIRMED VOLUME OF 95.386 CONTRACTS EQUATES TO 482 MILLION OZ OR 68.9% OF ANNUAL GLOBAL PRODUCTION OF SILVER
 
 
Total dealer silver:  44.132 million (close to record low inventory  
Total number of dealer and customer silver:   224.618 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

will update later tonight

1. Central Fund of Canada: traded at Negative 1.6 percent to NAV usa funds and Negative 1.9% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.4%
Percentage of fund in silver:37.2%
cash .+.4%( Oct27/2017) 
2. Sprott silver fund (PSLV): STOCK   FALLS TO -1.01% (Oct 27/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS TO -1.01% to NAV  (Oct 27/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at -0.70%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.69%/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 27/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 851.95 TONNES

Oct 26./A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 851.95 TONNES

Oct 25/NO CHANGE (SO FAR) IN GOLD INVENTORY/INVENTORY RESTS AT 853.13 TONNES

Oct 24./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes

OCT 23./NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 853.13 TONNES

OCT 20/NO CHANGE IN GOLD INVENTORY AT THE GLD/ INVENTORY REMAINS AT 853.13 TONNES

oCT 19/NO CHANGE/853.13 TONNES

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

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Oct 27/2017/ Inventory rests tonight at 851.95 tonnes
*IN LAST 260 TRADING DAYS: 89.00 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 195 TRADING DAYS: A NET  68.28 TONNES HAVE NOW BEEN ADDED INTO  GLD INVENTORY.
*FROM FEB 1/2017: A NET  37.17 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

Oct 27/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ

Oct 26/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ/

Oct 25/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ

Oct 24/no change in inventory at the SLV/inventory rests at 320.288 million oz/

oCT 23./STRANGE!!WITH SILVER RISING TODAY WE HAD A HUGE WITHDRAWAL OF 1.039 MILLION OZ/inventory rests at 320.288 million oz/

OCT 20NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.327 MILLION OZ

oCT 19/INVENTORY LOWERS TO 321.327 MILLION OZ

Oct 18 no change in silver inventory at the SLV/inventory rest 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

Oct 27/2017:

Inventory 320.288 million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.40%
  • 12 Month MM GOFO
    + 1.62%
  • 30 day trend

end

At 3:30 pm we receive the COT report which outlines position levels of our major players

Let us first head over to the gold cot

 

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
275,521 84,136 80,570 125,468 336,121 481,559 500,827
Change from Prior Reporting Period
-9,096 243 10,293 -1,210 -12,181 -13 -1,645
Traders
174 102 88 49 52 272 201
 
Small Speculators  
Long Short Open Interest  
45,115 25,847 526,674  
-2,113 -481 -2,126  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, October 24, 2017

Large Speculators

  

those large specs that have been long in gold pitched a huge 9096 contracts from their long side.

those large specs that have been short in gold covered a tiny 243 contracts.

large specs go net short by 8900 contracts.

Commercials

those commercials that have been long in gold pitched 1210 contracts from their long side

those commercials that have been short in gold covered  12,181 contracts from their short side.

commercials go net long by 10,900 contracts.

Small Speculators

those small specs that have been long in gold pitched 2113 contracts from their long side

those small specs that have been short in gold covered 481 contracts from their short side.

and now for our silver COT/a huge difference!!

Large Speculators

those large specs that have been long in silver added 588 contracts to their long side

 

those large specs that have been short in silver covered 617 contracts from their short side

large specs go net long by 1200 contracts.

 

 

Commercials

 

those commercials who have been long in silver ADDED 2349 contracts to their long side

those commercials that have been short in silver added 3941 contracts to their short side

 

commercials go net short by 1500 contracts.

 

Small Speculators

those small specs that have been long in silver added only 29 contracts to their long side

those small specs that have been short in silver covered a tiny 358 contracts from their short side.

 

from the data it seems that our commercials friends are having trouble covering their huge silver shortfall.

 

 

Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Russia Buys 34 Tonnes Of Gold In September

– Russia adds 1.1 million ounces to reserves in ongoing diversification from USD
– 34 ton addition brings Russia’s Central Bank holdings to 1,779t; 6th highest
– Russia’s gold reserves are at highest point in Putin’s 17-year reign
– Russia’s central bank will buy gold for its reserves on the Moscow Exchange
– Russia recognises gold’s role as independent currency and safe haven

Editor: Mark O’Byrne

Russian gold reserves
Prior to World War I Russia held the world’s third largest gold reserves, behind America and France. In the subsequent Russian Revolution, civil war and the rise of communism, they dropped down the table of nations with large gold reserves and the U.S. became the largest holder of national gold reserves.

In recent years, since 2007, an increasingly powerful and assertive Russia has worked hard to reprise its place in the world’s top gold reserve rankings, quadrupling its purchases in the period to June this year.

A 34 ton purchase of gold (1.1 million ounce) in September has put Russia firmly back in the golden spotlight. The country now holds 1,779 tons of gold, placing it sixth in the world and just behind China.

In the first two quarters of the year the CBR purchased 129 tons, making the late-summer purchase the best since October 2016. Taking into account the September purchase, Russia needs to buy just another 37t  in order to purchase 200t by the end of the year – the amount it has done each year, for the last two years running.

In order to support gold purchases, the CBR announced this week that it would start purchasing gold on the Moscow Exchange.

Why the obsession with buying up gold and increasing their gold reserves? It is primarily about protecting the ruble and combating US petrodollar hegemony.

Not just about gold purchases

Today, Russia is a prominent player in the global gold market, both on the supply and demand side. It is the world’s third-largest producer, with a 200-year history of gold mining, and the most significant official purchaser of gold.”
World Gold Council

Russia isn’t just making headlines for the amount of gold it is buying, but also for the amount it is producing.

The country is the world’s third largest gold producer, snapping at the heels of Australia in second. The most recently available figures from Metals Focus show Russia produced 274 tonnes of gold in 2016. The majority of which appears to have been bought by the Russian Central Bank.

Polyus, Polymetall, Kinross, Petropavlovsk, and Nordgold are the country’s top gold producers. Between them they produce more than 120 tons of gold a year, just under 50 percent of Russia’s total production, last year.

In the last decade the country has mined over 2,000t. According to Sergey Kashuba, Chairman of Russian Gold Producers Union this year’s production is expected to exceed 300t, and increase very significantly to 400t by the end of 2018.

Why the gold diversification?

Whilst the Russian Central Bank has been stocking up on gold reserves it has noticeably not been increasing its foreign exchange reserves, especially the US dollar.

This is a similar approach to fellow-gold buyers China who have also been reducing their holdings of and dependence on the dollar. Both Russia and China have created mechanisms for trading nations to use gold rather than the US dollar in bilateral trade arrangements.

Putin Xi deal

US dollar hegemony has given the United States unparalleled strategic advantage, notably preventing Russia and China from creating an economic area of integration. For years this has worked in the United States’ favour, however when Putin came on the scene Russia almost immediately began to gradual move away from US dollar dependency.

Today the country has one of the lowest levels of dollar-denominated private and public debt, in the world. The country has also decreased the share of euro in its foreign reserves from 40% to 26%.

The danger with holding lots of dollars is if  the US wanted to damage Russia’s finances, this would be possible through currency manipulations and sanctions. Iran is an example of country holding gold is insurance against such an event. There is also the very real risk that the U.S. with sharply devalue the dollar in the coming months and years. This would result in Russia’s dollar reserves becoming worth a lot less and in a worst case scenario become worthless.

China and Russia’s frustration at the over reaching of the United States and the power it yields with the US dollar has seen both countries accelerate both gold mining and purchases in recent years. Note the contrast with the United States which is not topping up (or even auditing) its own gold reserves.

Often the argument for holding foreign currency in reserve is to provide liquidity in time of need. Most analysts forget that in this day and age one of the most liquid currencies remains gold. Therefore, it cannot be argued that Russia and China are not stocking up their reserves adequately.

Independent of any government and arguably more liquid than any other sovereign currency, gold is the ultimate currency for countries such as Russia, especially in the face of sanctions.

Dmitry Tulin, the First Deputy Governor, has also stated that the Bank of Russia increased gold purchases because only this reserve asset provides total protection against legal and political risks – “100% guarantee from legal and political risks.”

Learn to invest like the Russians

When asked about the central bank’s gold purchases Elvira Nabiullina, Governor of the Bank of Russia said

“We are adhering to the principle of reserve diversification. This principle remains unchanged. From this perspective, our reserves do include gold.”

Savers should take note, diversification should be the number one priority when it comes to protecting and growing your wealth in these uncertain times. This is for precisely the same reasons the Russian Central Bank is doing so – in order to protect against legal and political risks (Brexit, Trump etc) , but also economic and financial risks.

The risks to a saver may seem vastly different to those of a central bank but really they are quite similar. Both are exposed to the decisions made by politicians around the world. Like Russia, we too are awaiting with baited breath what President Trump will do next or what the EU will soon decide is the best way to ‘protect’ the Super state bloc. We are exposed, as are our savings and investments.

Gold cannot be devalued as fiat currencies can, allocated and segregated gold cannot be confiscated thanks to the irresponsible actions of a counterparty. It is a borderless, free currency that acts as the ultimate reserve in a diversified portfolio.

Russia and China have a plan to take charge of their financial future and gold is at the heart of that plan.

Related Content

Gold Buying Russia To Intensify Diversification On Trump ‘Unpredictability’?

Gold Bullion Is A “100% Guarantee from Legal and Political Risks” – Russia

Russia Buys Gold Bullion For “Principles Of Diversification” – Central Bank Governor

 

News and Commentary

Gold edges higher in euro after dovish ECB (Reuters.com)

Gold steady as dollar gains versus euro on ECB policy (Reuters.com)

ECB warily starts pulling back from loose money (Reuters.com)

Dow Flirts With New High on Earnings, Euro Sinks (Bloomberg.com)

“Irrational exuberance on a scale not seen since the last financial crisis is pushing stocks to new record highs” said #GoldCore (MarketWatch.com)


Gold in Euros (1 Week)

Gold Edges Higher in Euro as ECB Announces Dovish €30 Billion QE Taper Through September 2018 “Or Beyond” (ZeroHedge.com)

Car Industry Is In For Tougher Times Due To Chronic Over Supply (MoneyWeek.com)

What Sweden’s wobbly housing market can tell us about bubbles (MoneyWeek.com)

A Cynic’s Guide to Crypto Investing (BonnerAndPartners.com)

This why time running out for the U.S. bull market (StansBerryChurcHouse.com

end

 

 

(courtesy SchiffGold/GATA)

Russia Buys 34 Tonnes Of Gold In September

Alabama Bill Would Exempt Gold and Silver Bullion from Sales Tax; Help Encourage Its Use as Money

OCTOBER 26, 2017 BY SCHIFFGOLD

A bill prefiled in the Alabama House for the 2018 session would exempt the purchase of gold and silver bullion from state sales and use tax, encouraging its use and taking the first step toward breaking the Federal Reserve’s monopoly on money.

Rep. Ronald Johnson (R-Sylacauga) prefiled House Bill 19 (HB19). The legislation would exempt the gross proceeds from the sale of gold, silver, platinum, and palladium bullion and coins from sales and use tax in the state.

Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35 cent tax. Silly, right? After all, you were only exchanging one form of money for another. But that’s essentially what Alabama’s sales tax on gold and silver bullion does. By removing the sales tax on the exchange of gold and silver, Alabama would treat specie as money instead of a commodity. This represents a small step toward reestablishing gold and silver as legal tender and breaking down the Fed’s monopoly on money.

Practically speaking, eliminating taxes on the sale of gold and silver would crack open the door for people to begin using specie in regular business transactions.This would mark an important small step toward currency competition. If sound money gains a foothold in the marketplace against Federal Reserve notes, the people would be able to choose the time-tested stability of gold and silver over the central bank’s rapidly-depreciating paper currency.

Earlier this year, governors in Louisiana and North Carolina signed similar bills into law. A new Arizona law that went into effect in August eliminated state capital gains taxes on gold and silver specie, removing another barrier.

Of course, this is all good news for gold and silver dealers and investors. But it has much broader implications. These bills effectively remove taxes from the exchange of one kind of legal tender for another kind of legal tender – after all, gold and silver are money. In other words, individuals buying gold or silver bullion, or utilizing gold and silver in a transaction, would no longer be subject to state taxes on the exchange. This should encourage and facilitate the use of gold and silver in everyday transactions.

As Ron Paul said during testimony in favor of the Arizona bill, “We ought not to tax money – and that’s a good idea. It makes no sense to tax money.”

This legislation is part of a broader movement at the state level to break the Fed’s monopoly over the US financial system.

BACKGROUND INFORMATION

The United States Constitution states in Article I, Section 10, “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts.” States have simply ignored this constitutional provision for years. It’s impossible for a state to return to a constitutional sound money system when it taxes gold and silver as a commodity.

This Alabama bill takes a step towards that constitutional requirement, ignored for decades in every state. Such a tactic would set the stage to undermine the monopoly of the Federal Reserve by introducing competition into the monetary system.

Constitutional tender expert Professor William Greene said when people in multiple states actually start using gold and silver instead of Federal Reserve Notes, it would effectively nullify the Federal Reserve and end the federal government’s monopoly on money.

“Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a “reverse Gresham’s Law” effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes). As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state – as people in other states carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve notes for any transactions.”

Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for ordinary people. Nullifying the Fed on a state by state level is what will get us there.

-END-


Your early FRIDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST

 
 i) Chinese yuan vs USA dollar/CLOSED DOWN AT 6.6530/shanghai bourse CLOSED UP AT 9.26 POINTS .27%   / HANG SANG CLOSED UP 236.47 POINTS OR 0.84% 

2. Nikkei closed UP 268.67 POINTS OR 1.24%     /USA: YEN FALLS TO 114.07

3. Europe stocks OPENED IN THE GREEN EXCEPT SPAIN /USA dollar index RISES TO  94.89/Euro DOWN to 1.1627

3b Japan 10 year bond yield: RISES  TO  +.073/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.72/ 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::  52.50 and Brent: 59.16

3f Gold DOWN/Yen UP

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

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

3h Oil UP for WTI and UP FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.407%/Italian 10 yr bond yield UP to 1.93%  /SPAIN 10 YR BOND YIELD DOWN TO 1.553%  

3j Greek 10 year bond yield FALLS TO  : 5.55???  

3k Gold at $1266.85 silver at:16.70:  6 am est)   SILVER NEXT RESISTANCE LEVEL AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 28/100 in  roubles/dollar) 58.26

3m oil into the 52 dollar handle for WTI and 59 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 SMALL SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 114.07 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  1.001 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1632 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to  +0.407%

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 2.450% early this morning. Thirty year rate  at 2.954% /

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

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

Global Stocks Jump Among Earnings Bonanza; Nikkei Closes Above 22,000 For First Time In 21 Years

 

US equity futures are higher, boosted by a bevy of better than expected earnings out of tech giants Amazon, Intel and Microsoft as Asian stocks and European shares climb amid the dovish sentiment unleashed from Thursday’s ECB update.

Asian equities rose as investors bid stocks following strong corporate results from India to Japan. The MSCI Asia Pacific Index climbed 0.3% to 167.12, on track for its fourth-straight weekly gain. India’s United Spirits Ltd. led gains, surging 22% after reporting higher margins, while Fuji Electric Co. jumped 15 percent to the highest in 26 years after raising its profit forecast.  The broad-based advance – almost two stocks in the MSCI gauge rose for every one that fell – followed gains in U.S. markets spurred by corporate profits and congressional action that could lead to tax reform.

“The earnings picture that came out overnight is definitely positive,” said Clive McDonnell, Singapore-based head of emerging market equity strategy at Standard Chartered Bank. That’s translated into more positive sentiment in Asia, he said. Japan’s Nikkei 225 Stock Average Index closed above the 22,000 level for the first time since July 1996. Shares in Hong Kong rose after China Construction Bank Corp. reported another expansion in margins, while China Life Insurance Co. said third-quarter profit more than quadrupled. Australia’s stock benchmark and currency declined after a court ruling on parliamentary eligibility threatened Prime Minister Malcolm Turnbull’s majority.

One story that has gotten little focus is China’s 10-year sovereign yield extending its weekly advance to 10 bps,  rising another 4 basis points to 3.83%, and set for its biggest increase since the first week of January. This tightening in financial conditions took place even as China’s central bank injected 63-day money into the financial system for the first time, which as Bloomberg reported reassured lenders about year-end funding availability while also intensifying a deleveraging drive by increasing costs. The PBOC offered 50 billion yuan ($7.5 billion) of 2.9% 63-day contracts, according to a statement posted on the PBOC website, as well as 90 billion yuan through one-week and 14-day contracts. This did not prevent the long-end of the Chinese bond curve from getting routed as inflation fears again rise.

European stocks climbed for a second day, poised for their biggest weekly gain in a month, amid positive corporate results and lingering bullish sentiment from Thursday’s dovish ECB update. The Stoxx Europe 600 Index rose 0.5% to 393.06, with most industry groups in the green. Miners bucked the trend, sliding 1.3% after a slump in iron-ore prices. RBS rose after posting stronger-than-expected 3Q capital ratios. Volkswagen and Linde advance on earnings that beat estimates. Meanwhile, Spanish stocks continued to underperform as Europe’s worst constitutional crisis for decades comes to head. Catalan separatists are making a last-ditch effort to win concessions from Madrid that would help persuade their increasingly agitated supporters to accept another regional election as lawmakers prepare to vote on a declaration of independence.

In overnight macro, the dollar extended its rally after the U.S. House passed a resolution that brings tax cuts a step closer and speculation mounted a hawkish candidate may become the next Federal Reserve chair. After tumbling through the start of September, the US dollar has been on a tear ever since that Friday when the PBOC announced it was inviting shorts back into the (warm) water. As a result, the 200 DMA in the Bloomberg Dollar Index is now in play again as the BBDXY hovers near a three-month high.

In the U.S., Republicans unlocked a process to cut taxes by the end of the year, while Jerome Powell and John Taylor are reportedly the only candidates left in the race to succeed Janet Yellen at the Fed. The prospect of growth-enhancing U.S. tax cuts and the probability of a hawkish turn at the Fed is attracting investment to U.S. assets, with investors pouring $6.1 billion into funds tracking U.S. stocks in the week to October 25, while pulling money from emerging-market funds.

As the dollar rose, the common currency slumped, with the euro heading for its biggest weekly loss since March after the ECB announced a “dovish taper”, extending the bond-buying program even as it plans to halve monthly purchases. Judging by the dramatic reaction in the EUR, the “open-ended” taper was clearly a surprise to many, especially with Boersen-Zeitung reporting that Bundesbank President Jens Weidmann, Executive Board member Sabine Lautenschlaeger and Dutch central bank Governor Klaas Knot opposed the decision to make quantitative easing open-ended. Other policy makers were critical, if not opposed, including Benoit Coeure.

Also overnight, the USD/JPY climbs to highest since July 11 after the U.S. House passed a budget resolution on tax reforms and as speculation rose that a hawkish candidate may lead the Federal Reserve.

In commodities, WTI dropped 0.2% to $52.56 a barrel.  Gold rose 0.1 percent to $1,267.76 an ounce.  Copper decreased 1.5 percent to $3.13 a pound, the lowest in more than two weeks.

In rates, 10Y Treasuries dipped 1bp to the critical level of 2.45%, while Germany’s 10Y yield also decreased 1 bp to 0.41% while Britain 10-year gilts rose 2 bps points to 1.384%.

Today’s economic data include the first read of US QE GDP and PCE, and University of Michigan consumer sentiment. Scheduled earnings include reported by oil companies Exxon Mobil and Chevron along with health care firms Merck & Co. and AbbVie.

Bulletin Headline Summary From RanSquawk

  • European bourses remain elevated following impressive after-market US tech earnings and yesterday’s ECB announcement
  • In FX, EUR remains softer post-ECB while AUD was pressured by domestic political uncertainty
  • Looking ahead, highlights include US GDP and PCE

Market Snapshot

  • S&P 500 futures up 0.2% to 2,567.25
  • STOXX Europe 600 up 0.4% to 392.94
  • Brent Futures down 0.1% to $59.26/bbl
  • Gold spot up 0.1% to $1,268.28
  • U.S. Dollar Index up 0.2% to 94.82
  • MSCI Asia up 0.4% to 167.24
  • MSCI Asia ex Japan up 0.08% to 546.58
  • Nikkei up 1.2% to 22,008.45
  • Topix up 1% to 1,771.05
  • Hang Seng Index up 0.8% to 28,438.85
  • Shanghai Composite up 0.3% to 3,416.81
  • Sensex up 0.3% to 33,240.73
  • Australia S&P/ASX 200 down 0.2% to 5,903.16
  • Kospi up 0.6% to 2,496.63
  • German 10Y yield fell 0.8 bps to 0.407%
  • Euro down 0.1% to $1.1635
  • Italian 10Y yield fell 8.7 bps to 1.683%
  • Spanish 10Y yield fell 0.9 bps to 1.528%

Top Headline News

  • Italian Prime Minister Paolo Gentiloni may make his recommendation for the post of governor of the Bank of Italy. The process was thrown into disarray after former PM Matteo Renzi attacked the incumbent, Ignazio Visco.
  • Fed candidate Taylor calls for reforms that echo Trump agenda
  • Catalonia’s rebel leader runs out of road as Spain closes ranks
  • Tax Plan Has Lobbyists Swarming, Lawmakers Asking What’s in It
  • It’s Going to Stay a Yellen Fed No Matter Who Gets the Job
  • Catalans Are Said to Send Emissary to Madrid to Plead for a Deal
  • On Visit to DMZ, Mattis Says Kim Threatening ‘Catastrophe’
  • China’s CCCC Buys Aecon for $930 Million in Canada Push
  • Komatsu Boosts FY Oper. Profit Forecast in Line With Estimates
  • Apple iPhone X “Currently Unavailable” From Hong Kong Store
  • Clariant, Huntsman Drop Plan to Merge Due to Activist Pressure
  • Clariant Still Number One M&A Target in EU Chemicals: Baader
  • Huntsman 3Q Adjusted EPS Beats Highest Estimate
  • HNA Said in Talks to Buy Controlling Stake in Dangdang: Reuters
  • Komatsu Boosts FY Oper. Profit Forecast in Line With Estimates

In Asia, a deluge of corporate results dominated focus in regional trade, with the region’s indices mainly in the green after a
similar close in US and where Nasdaq 100 futures rallied after-market as tech giants Alphabet, Amazon, Intel, Microsoft and
Western Digital all surpassed Q3 estimates. ASX 200 (-0.2%) and Nikkei 225 (+1.2%) both opened positive in which the energy
sector lead Australia after Brent crude rose above USD 59/bbl and printed its highest in more than 2 years, while the Japanese
benchmark outperformed on JPY weakness and with the biggest gaining stocks underpinned by earnings releases. However,
Australian stocks were later spooked after the High Court ruled now-former-Deputy PM Joyce was ineligible for his parliamentary
seat and would have to contest it again at a by-election, which meant the government loses its 1-seat majority. Elsewhere,
Shanghai Comp. (+0.3%) was higher following another firm liquidity operation by the PBoC which utilized a 63-day reverse repo
for the 1st time ever, and the Hang Seng (+0.8%) was led by gains among the Big 4 after China’s 2nd largest lender China
Construction Bank posted a 4% increase in Q3 net. Finally, 10yr JGBs were flat as a positive risk tone in Japan sapped demand for
safety, with downside also stemmed amid the BoJ’s presence in the market for long to super-long JGBs.
PBoC injected CNY 60bln via 7-day reverse repos, CNY 30bln via 14-day reverse repos and CNY 50bln via 63-day reverse repos,
for a net weekly injection of CNY 390bln vs. Prev. CNY 560bln net injection last week. PBoC set CNY mid-point at 6.6473 (Prev. 6.6288.

Top Asian News

  • China’s PBOC Said to Sell 63-Day Reverse Repo for First Time
  • Young Muslims Have Caught a $100 Billion Travel Bug, Report Says
  • Paper Giants Rack Up Gains Amid China’s Anti-Pollution Drive
  • Top China Macro Fund Shorts Commodities, Debt on Inflation
  • iPhone X Wait Times Rise as Apple Device Sells Out in Hong Kong
  • Najib Unveils Voter-Friendly Budget Ahead of Election Fight
  • RCBC Says Not Pressured to Change Owners After $81m Cyber Heist

European equities (Eurostoxx 50 +0.6%) trade higher across the board amid the fall-out of yesterday’s dovishly perceived ECB announcement with stellar tech earnings on Wall Street also bolstering sentiment. More specifically, tech giants Alphabet, Amazon, Intel, Microsoft and Western Digital all surpassed Q3 estimates subsequently supporting the Nasdaq 100 future and Asia-Pac equities with this sentiment filtering into their EU counterparts. As such, a sector breakdown, IT names lead the charge for Europe with materials the only sector in the red. Notable post-earnings movers include RBS (+1.9%), Volkswagen (+1.8%), Total (+1.3%), Linde (+2.7%) and Electrolux (+4.7%). No hangover for Bunds and Eurozone debt overall as the ECB rally and bond yield compression continues. Further analysis of the QE recalibration and policy guidance compounded initial market perceptions that President Draghi and co handled the scale down in bond buying (or at least the announcement) extremely well. The 10 year German benchmark extended gains to 162.00+, and equivalent yield down to almost 0.4%, in stark contrast to its US Treasury counterpart that is now approaching 2.5% (on hawkish Fed and Trump tax reform/reflation impulses). UK Gilts indecisive initially, but ultimately tracking Germany higher despite the consensus still favouring a BoE rate hike on November 2.

Top European News

  • ECB Is Said to See Option to End QE With Short Taper in 2018
  • Ermotti Reboots UBS Buyback Expectations as Capital Level Rise
  • WeWork Said in Talks to Buy $785 Million Blackstone U.K. Project
  • Mediterranean Gas Bonanza Pushes Spain to Resume Exports
  • UBS Will Trigger Its Brexit Contingency Plans ‘Early’ Next Year
  • U.K. Government Investments Hires Ex-Deutsche Bank’s Tom Cooper
  • ECB Says Forecasters Lift Longer-Term Inflation Outlook to 1.9%
  • Orban Marshals Spy Agencies in Renewed Attack on Soros ‘Empire’

In FX, the euro remains on the back foot, post the dovish ECB monetary policy decision. In the Asian session EUR moved to lows of 1.1617, subsequently hovering within close proximity to option expiries situated at 1.16 (EUR 518mln). On the topside, vanilla option expiries of EUR 1bln are at 1.17, which may cap any potential rebounds. However, EUR has been granted some reprieve amid short covering in EUR/GBP lifting the cross towards 0.8900. AUD remains softer amid political concerns after a high court ruled that Ex-Deputy PM is ineligible for parliament, meaning that the coalition losses their majority.

In commodities, price action has been particularly rangebound for WTI and Brent crude futures with the only notable newsflow being reports that Libya’s Sharara oil field output has fallen to 235k bpd (Prev. around 250k bpd), according to sources.  Gold prices languish near 2½-month lows due to a firmer greenback, copper was subdued alongside broad weakness in the metals complex and 4% declines in Dalian iron ore futures. Iraqi-Kurdistan oil  flows to Ceyhan port have risen to 246k bpd, according to a port agent. Libya’s Sharara oil field output has fallen to 235k bpd (Prev. around 250k bpd), according to sources.

Looking at the day ahead, in the US the highlight will be the first estimate of Q3 GDP in the US. The final University of Michigan consumer sentiment survey for October is also due. Onto other events, the ECB’s Praet and Nowotny are also both scheduled to speak. UBS, Exxon Mobil, Chevron and Total all report results.

US Event Calendar

  • 8:30am: GDP Annualized QoQ, est. 2.6%, prior 3.1%; Personal Consumption, est. 2.1%, prior 3.3%; Core PCE QoQ, est. 1.3%, prior 0.9%
  • 10am: U. of Mich. Sentiment, est. 100.7, prior 101.1; Current Conditions, prior 116.4; Expectations, prior 91.3; 1 Yr Inflation, prior 2.3%; 5-10 Yr Inflation, prior 2.4%

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 9.26 points or .27% /Hang Sang CLOSED UP 236.47 pts or 0.84% / The Nikkei closed UP 268.67 POINTS OR 1.24/Australia’s all ordinaires CLOSED DOWN 0.22%/Chinese yuan (ONSHORE) closed DOWN  at 6.653/Oil UP to 52.50 dollars per barrel for WTI and 59.16 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT SPAIN  .  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6530. OFFSHORE YUAN CLOSED AT VALUE OF THE ONSHORE YUAN AT 6.6530 AND //ONSHORE YUAN  WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO THE DOLLAR/. THE DOLLAR (INDEX) IS STRONGER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT  HAPPY TODAY.

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/BRITAIN/USA

Mattis threatens North Korea who is furious with the naval drills

(courtesy zerohedge)

Mattis: North Korea “Threatens With Catastrophe”

With two feet planted firmly at the 38th parallel, US Defense Secretary James Mattis on Friday accused North Korea of building a nuclear arsenal to “threaten others with catastrophe, according to local media reports.

Mattis, who is visiting South Korea and a handful of regional allies before President Donald Trump decamps for his first Asia tour next week, visited the DMZ in a demonstration of solidarity with South Korea. At the border, he reaffirmed that the Trump administration wants to avoid war if possible and remains committed to forcing North Korea to disarm. The reason for Mattis’s visit? Meetings with South Korean counterpart Song Young-moo for talks about the deteriorating situation in North Korea. Bloomberg reported.

However, while he warned of North Korea’s destructive capabilities, he also stressed that the US remains committed to finding a peaceful solution.

“Our goal is not war, but rather the complete, verifiable, and irreversible denuclearization of the Korean peninsula,” Mattis said, as North Korean soldiers kept watch nearby.

His visit follows exercises last week involving the US and South Korean navies that featured the USS Ronald Reagan, an aircraft carrier, as well as three nuclear submarines. The unprecedented show of force elicited an outraged response from the North, which described the military drills as preparation for a pre-emptive strike and nuclear war against his country and badgered the UN Security Council to address them.

Trump is scheduled to depart a week from today on a trip that includes visits to Japan, South Korea, China, Vietnam and the Philippines. It will likely focus on the nuclear threat posed by the restive North and its leader, Kim Jong Un.

So far, Trump has refused to say if he will visit the DMZ during his trip to Korea. Even as it has stepped up its threats of a nuclear offensive, North Korea’s last missile launch was on Sept. 15., when it fired an intermediate-range missile over northern Japan. An expected test of a long-range ICBM to coincide with an Oct. 10 holiday and the Oct. 18 beginning of China’s National Party Congress failed to materialize.

However, Kim In Ryong, North Korea’s deputy ambassador to the United Nations, said Oct. 16 that a nuclear war “may break out any moment” and that “the entire U.S. mainland is within our firing range.” Another senior official told CNN this week that the world should take literally his country’s threat to test a nuclear weapon

South Korea’s military said this week that no particular signs beyond ordinary activities have been spotted, though North Korea continues to seek the capability to strike the U.S. with a nuclear weapon.

Reuters reported, above the faint sound of North Korean propaganda music being blasted from across the border, South Korean Defense Minister Song Young-moo warned about the North’s nuclear program and the array of conventional artillery positioned just across the border, and said South Korea’s defenses would not be able to stop a North Korean onslaught should war break out.

“Defending against this many LRAs (long-range artillery) is infeasible in my opinion,” Song told Mattis, citing a need for strategies to “offensively neutralize” the artillery in the event of a conflict.

Mattis replied: “Understood”.

Surprisingly, the North has made at least one major gesture of peace ahead of Mattis’s visit that could be a harbinger of talks between the US and the North – a possibility that Trump is once again encouraging after initially telling Secretary of State Rex Tillerson not to waste his time.

Case in point, North Korea returned on Friday a South Korean fishing boat and crew captured last week in a gesture that local media reports described as a ‘humanitarian transfer.’ Pyongyang notified Seoul via a report from its official Korean Central News Agency as all inter-Korean communication lines have been cut off, South Korea’s Unification Ministry spokesman Baik Tae-hyun said at a briefing.

Still, the US remains on high alert: Last week, CIA chief Mike Pompeo said North Korea could be only months away from developing the ability to hit the United States with nuclear weapons, a scenario Trump has vowed to prevent.

END

3b) REPORT ON JAPAN

3C. CHINA REPORT.

 

Kyle Bass warns that XI has built the Chinese economy on a foundation of sand with its $40 trillion of debt. The huge buildup of debt just cannot continue

 

(courtesy Kyle Bass/zerohedge0

Kyle Bass Warns: Xi Has “Built The Chinese Economy On A Foundation Of Sand”

Earlier this week, Chinese leader Xi Jinping became the third ruler in the communist country’s history to have his named enshrined in its constitution – and the first to receive this honor while still alive. But as China celebrates its most popular, and most powerful leader since at least Deng Xiaoping, Kyle Bass, hedge fund manager and noted China bear, told Bloomberg the Communist Party will one day regret standing idly by as Xi consolidated his power.

“Today Xi is celebrated in media reports, but when future historians look back, he will be blamed for recklessly building the Chinese economy on a foundation of sand,” Bass, founder of Hayman Capital Management, said in an email Wednesday.

“Xi desperately seeks credibility, but true developed economies do not impose severe capital controls or move short-term rates hundreds of basis points overnight in attempts to manipulate their own currency.”

Xi, who launched the twice-a-decade National Party Congress last week with a three-hour speech where he laid out his vision for “communism with Chinese characteristics in a new era,” the philosophy that was enshrined in the country’s constitution by a unanimous vote. In a move that seemingly confirms suspicions that Xi plans to break with precedent and seek a third term after his second ends in 22, Xi appointed five new members to the Politburo,

China’s most powerful body, all of whom are too old to be viewed as credible heirs. Typically, Chinese leaders have pointed to a successor or possible successors by the time they begin their second term, ensuring that there’s a clear path of leadership transition.

Of course, Bass and others have been highly critical of the Communist Party’s heavy handed tactics. For example, the PBOC and the Chinese ‘National Team’, which exert powerful influence over the company’s financial market, have successfully tamped down equity market trading volume and volatility in the runup to the Congress, while guiding the yuan higher against the dollar.

However, China’s closed financial system and manipulated markets aren’t the only target of Bass’s criticism. He also pointed to China’s ever-growing pile of debt. Borrowing has swelled to 260 percent of gross domestic product at the end of 2016, Bloomberg Intelligence data show. Earlier this year, the country’s soaring debt burden inspired Moody’s Investors Service and S&P Global Ratings to downgrade the country’s sovereign credit rating.

In an interview earlier this month, Bass, who has called for a 30% drop in the Chinese yuan, said he expects the government to relax its grasp on the exchange rate after the National Party Congress. He said he believed once Xi consolidates power, he’ll allow natural economic forces to reassert themselves in the country’s banking system.

Since the yuan joined the IMF’s Special Drawing Rights basket a year ago, China has made little progress in making its currency more convertible and accessible. To wit, the yuan remains a secondary currency for settling global payments.

“China remains an emerging backwater when it comes to global currency settlements,” he said Wednesday.

As Bloomberg pointed out, Bass, who made a fortune betting against U.S. subprime mortgages, said in early 2016 that losses in Chinese banks could be four times bigger than those suffered by American lenders during the global financial crisis. He has said that crucial figures, like the share of non-performing loans, have been understated.

“Recklessly growing a banking system in pursuit of global economic growth and respect will cause severe financial instability in the years to come,” he said on Wednesday.

 

“The dangerous $40 trillion credit experiment with Chinese characteristics will run its course.”

As reported earlier this month, Bass has stuck to his pessimistic views on China (though he has moderated his view a bit, pushing back his expected timeline for signs of instability in the country’s debt market to emerge) while other noted bears reversed their positions as the next big yuan devaluation failed to materialize.

While China bears have underestimated the nation’s unique ability to control its market, the sheer pace and volume of credit creation can’t possibly be sustained forever, Bass said.

end

Today should be interesting as chaos continues as secessionists prepare for an independence motion
(courtesy zerohedge)
end
The chaos in Spain is spreading to Europe as the Spanish banks are taking a bloodbath with Catalonia ready for independence declaration
(courtesy zerohedge)

Contagion Spreads To Europe Amid Spanish Bank Bloodbath As Catalonia Readies Independence Declaration

Spanish stocks have given back all of their gains from yesterday‘s chaotic on-again-off-again headline-hockey surrounding Catalan independence as it appears all but inevitable that the separatists will pull the trigger any minute now.

The contagion has spread to European bank stocks which have tumbled to unchanged on the week…

And Sabadell and Caixa stocks are both slumping…

However, we note that both Spanish and Catalan bond yields are dropping…

And Sabadell and Caixa bonds are rallying…

We can only assume on the back of Draghi’s promises yesterday.

 end
the UK is not doing too good as retail employment plunges but most importantly retail sales crash
(courtesy zerohedge)

UK Retail Employment Plunges Most Since 2008 As Retail Sales Crash

Yesterday we noted the surge in cable following the stronger-than-expected Q3 GDP print of 0.4% Q/Q, above the 0.3% estimate.Afterwards, the market was calculating an 87% chance that the BoE would hike next week. Brown Brothers commented that:

The case against a hike is that inflation appears poised to peak shortly, the economy is softening, and real wages are falling. This may already be squeezing households, where an increase in the base rate is quickly passed through to households.

However, two reports from the UK retail sector might encourage some nervous MPC members to stand pat.

Bloomberg reportsU.K. retail sales are falling at the fastest pace since the depths of the recession in 2009 and worries about the housing market could exacerbate the weakness in consumer spending seen this year. The Confederation of British Industry said its measure of sales plunged to minus 36 in October – the lowest since March 2009 — from a positive 42 in September. Sales for the time of the year were slightly below the usual seasonal rates, it said.

Rain Newton-Smith, CBI Chief Economist, blamed the weakness on higher inflation.

“It’s clear retailers are beginning to really feel the pinch from higher inflation. While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.”

According to Bloomberg, faster inflation has put the squeeze on shoppers this year, and a separate report on Thursday suggests a cooling housing market could further dampen consumers’ enthusiasm for spending.

YouGov and the Centre for Economics and Business Research said while their headline sentiment measure rose this month, confidence in the housing marketweakened. For Bank of England policy makers, all this may play into their thinking as they prepare for a crucial meeting next week.

 

While they’ve signalled that an interest-rate increase may be needed soon, a rate hike – even a small one – could also have an impact on spending habits, particularly for those concerned about the cost of their mortgage. Most U.K. property reports point to a property slowdown, with Halifax saying annual price growth has fallen to 4 percent from 10 percent in early 2016. According to Acadata and LSL, London house prices may be falling at their fastest pace since the financial crisis.

 

“The downtick in the house value measures is a concern,” said Nina Skero, head of macroeconomics at the CEBR.

 

“One’s perception of own home value has direct implications on their future willingness to spend.”

 

The CBI survey points to continued pressure on households from the mix of stronger price increase and sluggish wage growth. Official data this month showed stores had their worst quarter in four years in the three months through September. The John Lewis Partnership, owner of a grocery and department store chain, has seen sales growth slow by more than half this year.

The second report on the UK retail sector was from the British Retail Consortium which stated that retail employment dropped at the fastest rate since 2008.

From The Independent, UK retailers cut jobs over the past three months at the fastest rate since comparable records began in 2008, due to technological change and rising employment costs, the British Retail Consortium said on Thursday.

The BRC, which represents major retailers, said its members employed 3.0 per cent fewer staff in the third quarter of this year than during the same time in 2016, and total hours worked fell by 4.2 per cent year-on-year.

Both were the steepest falls since the BRC started collecting records in 2008, when Britain was in the middle of its sharpest recession in decades. This contrasts with the picture in the broader economy, where the unemployment rate is its lowest since 1975 and job creation has been strong, albeit partly at the expense of wages. Still, the BRC report chimed with a European Commission survey last month that showed British retailers’ expectations for employment sank to their lowest since late 2011.

“The pace of job reductions in the retail industry is gathering steam,” BRC chief executive Helen Dickinson said.

 

“Behind this shrinking of the workforce is both a technological revolution in retail, which is reducing demand for labour, and government policy, which is driving up the cost of employment,” she added.

Retail, which accounts for just under 10 per cent of jobs in Britain, has a lot of low-paid jobs that have been affected by rapid rises in the minimum wage in recent years, as well as a new government training levies and pension requirements.

So while Corbyn and May continue to battle, and the central bank is threatening rate-hikes, the nation’s core is collapsing. One wonders whether hard, soft, or no Brexit would make any difference now…

end

Then the unexpected:  Catalonia votes for independence

(courtesy zerohedge)

 

Chaos Unleashed: Catalan Parliament Votes For Independence, Rajoy Responds

It’s Official! The Catalan Parliament has just voted for independence – 70 ‘Yes’ (needed 68), 10 ‘No’, 2 blank.

As AP reports, Catalan separatist lawmakers pass motion to establish a new republic independent of Spain, as the opposition boycotts the vote…

“We constitute the Catalan Republic, as an independent and sovereign country, under the rule of law,” said the preamble to the resolution, read out by speaker Carme Forcadell before the ballot.

Catalan vice-president Oriol Junqueras tweeted…

Sí. Hem guanyat la llibertat per construir un nou país.

What happens next is anyone’s guess, but we suspect it will involve heavy police state intervention and the Franco-ian regime that separatists fear will rear its ugly head.

The Washington Post reports:

“The next move could be a formal declaration of statehood, less than a month after a referendum that backed the push for independence […]

 

If the Senate invokes the never-before-used Article 155 of Spain’s 1978 constitution, the central government could move swiftly to remove the Catalan president, suspend his ministers and assume authority over the region’s public media, police and finances.”

The Spanish government will undoubtedly now move swiftly to implement Article 155.

Spanish PM Rajoy immediately tweeted “I call tranquility to all Spaniards. The rule of law will restore the legality in Catalonia. MR”…

Pido tranquilidad a todos los españoles. El Estado de Derecho restaurará la legalidad en Cataluña. MR

And Spanish bond yields are snapping higher…

And blowing out relative to bunds…

And Spanish stocks dumped – erasing all oif yesterday’s hype-fueled hope-buying…

*  *  *

Live Feed: Catalan Speaker reads the independence declaration before the vote…

“We constitute the Catalan Republic, as an independent and sovereign country, under the rule of law,” said the proposed resolution, read out by the speaker before the vote.

*  *  *

Update (0900ET): The Catalan Parliament confirms the secession proposal will be voted in a secret ballot. This immediately led to the PP MPs leaving the parliament chamber.

*  *  *

Update (0850ET): Catalan’s opposition party members have just abandoned parliamnet as voting begins on minor resolutions (ahead of the big ‘independence’ decision) but Rajoy’s PP remains in session. Additionally, the separatists have called for the ballot to be private.

*  *  *

Update (0820ET): CUP Deputy Carles Riera rages that the time has come to “build the republic in a context of fight and resistance.”

“We propose that Catalonia becomes an independent state in the form of republic.”

 

“Today we start the removal of the 1978 regime.”

As Spain’s prime minister urged the Senate on Friday to grant his government special constitutional measures that would allow it to take control of Catalonia’s autonomous powers and halt the region’s independence bid.

*  *  *

As we detailed earlier, after yesterday’s chaotic Spanish event rollercoaster, when the Catalan leader Carles Puidgement was going to press ahead with independence only to change his mind, and propose elections, before reversing again and punting the independence decision to parliament, we hoped to get some further clarity on how he’s planning to proceed. Today, the chaos continues.

First, Bloomberg reported that Catalonia would seek approval for elections from Madrid:

The rebel government of Catalonia is making a last ditch effort to win concessions from Madrid. According to a person familiar with the matter, Catalan President, Carles Puigdemont, wants to convince supporters to accept regional elections instead of a declaration of independence. A senior Catalan official will ask the Spanish government to suspend the process of seizing direct control of the region if there is a snap election.

However, shortly afterwards, The Spain Report carried breaking news that the secessionists would debate a motion to declare independence in today’s session of the Catalonian Parliament.

MAJOR BREAKING: Separatist Parties Register Motion To Declare Independence Of Catalonia In Regional Parliament https://www.thespainreport.com/articles/1244-171027111459-separatist-parties-register-motion-to-declare-independence-of-catalonia-in-regional-parliament 

Separatist Parties Register Motion To Declare Independence Of Catalonia In Regional Parliament

(Breaking story…more to follow)

thespainreport.com

More from the report:

Catalan separatist parties—Junts Pel Sí (“Together For Yes”) and the CUP (Popular Unity Candidacy)—have registered a motion to declare the independence of Catalonia in the regional parliament.

 

A copy of the document published by Spanish media included the phrase: “We constitute the Catalan Republic as an independent sovereign democratic, social state of law”.

 

The text would also approve the activation of the secession bill approved by the regional chamber at the beginning of September and voided by the Constitutional Court and “begin the constituent process”.

* * *

The Speaker’s Committee is currently deciding on which motions to accept for the second part of the session in the Catalan Parliament on Article 155, which is due to begin at 12 p.m.

At the same time, there are unconfirmed reports that police are closing off roads around the regional parliament.  Meanwhile, the Spanish senate has been debating the implementation of Article 155 in Madrid. Rajoy told lawmakers that Spain faced an exceptional situation and asked them to support his proposal on Article 155. The Spain Report shows video of Rajoy receiving a standing ovation.

Another video of the standing ovation for Rajoy in the Senate, from the visitors’ gallery.
Via @pilarportero

Here are flash reports from Bloomberg on the parliamentary debate in Madrid:

  • Spanish Prime Minister Mariano Rajoy speaks in Senate.
  • Spain’s Rajoy Asks Senate to Support Proposal on Art. 155
  • Rajoy: Nothing Substantial Happened Since Govt Approved ART.155.
  • “The only talks I was invited to was to discuss terms and conditions of Catalan independence,”
  • Spain confronts exceptional situation, Rajoy tells Senate
  • “Exceptional measures should only be adopted when there is no other possible remedy’’:

As Bloomberg reported this morning, Puigdemont has been running out of options.

Backed into a corner by his own hardliners and Rajoy’s refusal to give him a dignified way out, Catalan President Carles Puigdemont will address the regional parliament in Barcelona as demonstrators clamor for a declaration of independence. After a day of high drama that saw Puigdemont caught between the might of the Spanish state and the anger of the street, western Europe’s worst constitutional crisis for decades may be coming to a head with the separatist leader running out of options…

 

The day of confusion saw the president make a televised address after two postponements, lawmakers quit his party and a senior Catalan official jump ship, all while Spanish ministers were repeating their mantra that the Catalans must be brought to heel. The Spanish stock market posted its biggest gain since Oct. 5 only to pare the advance as events unfolded. Puigdemont said he had considered calling the regional vote, but he didn’t get the concessions he sought from officials in Madrid. “I tried to get the guarantees to carry out these elections, but didn’t get a responsible answer,” he said.

Last night, reports from the secessionist camp implied that independence would be declared.

“We are winning,” Lluis Corominas, the head of Puigdemont’s PDeCat group, told lawmakers on Thursday night. “We should materialize the effects of the Oct. 1 referendum and implement them.” That’s code for declaring independence.

Maybe they are correct, but until then this remains a dangerously fluid and volatile situation.

Madrid reacts:  Nuclear option activated as the Spanish Senate gives Rajoy the power to oust the Catalan government.
(courtesy zerohedge)

“Nuclear Option” Activated: Spanish Senate Gives Rajoy Power To Oust Catalan Government

Just minutes after the Catalan government voted for Independence from Spain, with a former Decision of Independence likely to follow momentarily, over in Madrid wasted no time in responding, and moments ago, with 214 for and 47 against, voted to approve Article 155 of Spain’s 1978 Constitution, aka the Nuclear Option which has never been used before, suspending home rule in Catalonia, and giving Prime Minister Rajoy the power to oust the Catalan government.

What happens next?

Spain will promptly move to remove the Catalan president, suspend his ministers and assume authority over the region’s public media, police and finances, the only question is how, and what this process will look like.

Indeed, as Bloomberg reported earlier, Spanish politician Garcia Albiol tweeted that Spanish Prime-Minister Mariano Rajoy will restore democracy in Catalonia, adding that courts will reprimand the “plotters.” Furthermore, Spain’s El Pais reported that rebellion charges will likely be leveled soon at Catalans for Secession.

An angry Rajoy spoke to reporters in Madrid after the Catalan parliament declared independence and said that “the Catalan parliament has approved something that in the opinion of the great majority of people doesn’t just go against the law but is a criminal act because it supposes declaring something that is not possible which is the independence of Catalonia.”

He also said that he will address Spain at the end of the evening.

In terms of immediate next steps, there will be a Spanish Cabinet Meeting, which has been moved ahead to 5pm local time. Meanwhile, EU Council leader Donald Tusk has said that the Catalan vote “changes nothing for EU”, which means that as expected, Brussels will firmly support the Madrid government in whatever it decides to do.

After that, things may get delicate, especially if Spain sends in the proverbial cavalry.

end

Then late tonight (Spain time) and later afternoon our time: Spain fires the entire Catalan Government and then calls for snap elections

(courtesy zerohedge)

Spain PM Fires Catalan Government, Calls Snap Elections In Retaliation For Independence Vote

Update 4: In a live TV address to the nation, Spain’s PM Rajoy just announced that it is a “sad day” in which Catalans showed “contempt” for democracy, and ignored the general interest; that the Catalan declaration is unacceptable to majority of Catalans, and that, as a result and as expected, he is firing Catalan president Carles Puigdment, the Catalan police chief, and the entire Catalan government as “prudence” and “serenity” are now needed: “we never wanted to reach this situation”.

Ministries in the central government will assume powers of the Catalan administration.

The Prime Minister also announced he has dissolved the Catalan Parliament and called for snap elections to be held on December 21 which will be “free, legal and clean“.

As The Spain Report adds, the central government also ordered all of Catalonia’s “embassies” abroad closed, along with the region’s publicly funded Diplocat diplomacy service, and sacked the director general of the Catalan Police (Mossos), Pere Soler.

Rajoy also said Spain has enough resources to “recover normality” in Catalonia within the law and thanked the Spanish Socialist Party (PSOE) and Ciudadanos for their support.

* * *

Update 3: Spain’s top prosecutor will seek rebellion charges for those responsible for a vote in favor of declaring an independent Catalan republic, an official Spanish spokesman said according to The Independent. The spokesman said the prosecutor is looking to determine if the charges should be limited to the Catalan cabinet, including President Carles Puigdemont and Vice President Oriol Junqueras, or if they should also include members of the parliament’s governing board and lawmakers.

The official, who spoke under condition of anonymity in line with internal rules, said the charges could be brought as early as Monday. As Mr. Maza warned,“The rebellion crime is punishable by 30 years in prison if it is a crime of considerable gravity, of course…if the Catalan police did not comply with the order, Spain would take over control of the force.”

As a reminder, and as The Spain Report tweeted what happened the last time the Catalan republic was declared, in 1934:, there was i) State of war; ii) Lasted 10 hours and iii) led to 46 dead in Barcelona.

Puigdemont has called on fellow separatists to remain peaceful ahead of the expected crackdown by Spanish authorities. Facing a crowd of hundreds of supporters packing Catalonia’s parliament building, he said: “In the days ahead we must keep to our values of pacificism and dignity. It’s in our, in your hands to build the republic.” Good luck.

* * *

Update 2: Article 155 is now official, after Spain’s Constitutional Court lists the series of measures allowing central government to force Catalonia regional administration to obey national law. The two-page document was published Friday in Spain’s Official Gazette, in step necessary to becoming law. The measures approved by the Senate follow government proposal, under Article 155 of Constitution. By way of explanation, the actions were taken due to “extraordinary seriousness of the breach of constitutional obligations and the carrying out actions gravely against the general interest” by Catalonia institutions.

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

7.OIL ISSUES

8. EMERGING MARKET

One down but many to go as Venezuela finds money to pay a critical PDVSA principal payment

(courtesy zerohedge)

Venezuela Avoids Default With Critical PDVSA Debt Payment

On Wednesday, when looking at the imminent principal payment on $842 million in debt issued by Venezuela’s state-run oil company PDVSA , we warned that the state – which had previously activated a 30-day grace period on over $586 million in interest payment due over the past month – may be bankrupt shortly for one specific reason: unlike the rest of the country’s debt, the PDVSA bonds have no grace period in the bond indenture for an event of default. It is also why some suggested that Venezuela was shoring up dollars by not repaying other debt, to have funds available for this particular issue.

In retrospect, that appears to be the case because on Friday, PDVSA said that unlike the various other “technical glitches” that had accompanied Venezuela’s previous interest payment, it has transferred funds to make a principal payment on debt due Friday amid jitters among investors that the energy producer could default as soon as today.”

According to Bloomberg, the Caracas-based firm said it paid $842 million on bonds that fully mature in 2020. The statement didn’t mention the $108 million interest payment that was also due Friday, but has a 30-day grace period. Petroleos de Venezuela SA owes an additional $1.2 billion by Nov. 2 for notes that mature that day.

That said, we still have to get confirmation from the transfer agent that payment was indeed made, and didn’t get lost in yet another “technical glitch.”

Some generic big picture observations from Bloomberg:

A default for PDVSA would have been disastrous at a time when access to credit has already been severely curtailed, refineries are running at less than half of their capacity and oil output has tanked to less than 2 million barrels a day. Venezuelan President Nicolas Maduro has insisted that his government will continue to honor its international obligations even as imports shrivel to save cash for debt payments causing shortages of goods to worsen in a nation already suffering a deep recession and hyperinflation.

Well, that’s one down… and many more to go. As the tables below show, Venezuela is entering a phase where it has a lot of interest payments and a lot of principal maturities.

Grace Period expirations:

 

Maturity Schedule

Debt summary breakdown

 

 

As such, it is not a question of if, but when the financially sanctioned state – which is finding that obtaining dollars is becoming more and more difficult – will default.

END

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

Euro/USA   1.1627 DOWN .0011/ 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  ALL GREEN EXCEPT SPAIN 

USA/JAPAN YEN 114.07 DOWN 0.043(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 1.3100 DOWN .0029 (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 1.2881 UP .0032(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS FRIDAY morning in Europe, the Euro FELL by 11 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1627; / Last night the Shanghai composite CLOSED UP 9.26 POINTS OR .27%      / Hang Sang  CLOSED UP 236.47 PTS OR 0.84%   /AUSTRALIA  CLOSED DOWN 0.22% / EUROPEAN BOURSES OPENED GREEN EXCEPT SPAIN 

The NIKKEI: this FRIDAY morning CLOSED UP 268.67 POINTS OR 1.24% 

Trading from Europe and Asia:
1. Europe stocks  OPENED GREEN EXCEPT SPAIN 

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 236.47 POINTS OR 0.84%  / SHANGHAI CLOSED UP 9.26 POINTS OR .24%    /Australia BOURSE CLOSED DOWN 0.22% /Nikkei (Japan)CLOSED UP 268.67 POINTS OR 1.24%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1267.20

silver:$16.70

Early FRIDAY morning USA 10 year bond yield:  2.450% !!! UP 2 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)

The 30 yr bond yield  2.954 UP 1 IN BASIS POINTS  from THURSDAY night. (POLICY FED ERROR)

USA dollar index early FRIDAY morning: 94.89 UP 28 CENT(S) from YESTERDAY’s close. 

This ends early morning numbers  FRIDAY MORNING

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And now your closing FRIDAY NUMBERS  \1 PM

Portuguese 10 year bond yield: 2.194% DOWN 4 in basis point(s) yield from THURSDAY 

JAPANESE BOND YIELD: +.073%  UP 3/10  in   basis point yield from THURSDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.586% UP 5 IN basis point yield from THURSDAY 

ITALIAN 10 YR BOND YIELD: 1.95 DOWN 0 POINTS  in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 36 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.415% down 7 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY 

Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM

Euro/USA 1.1579 DOWN ,0059 (Euro DOWN 59 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 113.88 DOWN 0.236(Yen UP 24  basis points/ 

Great Britain/USA 1.3110 DOWN  0.0019( POUND DOWN 19 BASIS POINTS)

USA/Canada 1.2871 UP.0020 Canadian dollar DOWN 20 basis points AS OIL ROSE TO $53.77

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This afternoon, the Euro was DOWN 59 to trade at 1.1579

The Yen ROSE to 113.88 for a GAIN of 24  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 19 basis points, trading at 1.3110/ 

The Canadian dollar FELL by 20 basis points to 1.2871  WITH WTI OIL RISING TO :  $53.77

The USA/Yuan closed AT 6.6510
the 10 yr Japanese bond yield closed at +.073% UP 3/10  IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 1  IN basis points from WEDNESDAY at 2.424% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.939 DOWN 2 in basis points on the day /

Your closing USA dollar index, 95.03  UP 42 CENT(S)  ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 1:00 PM EST

London:  CLOSED UP  18.53 POINTS OR 0.25%
German Dax :CLOSED UP 84.26 POINTS OR 0.64%
Paris Cac  CLOSED UP 38.73 POINTS OR 0.71% 
Spain IBEX CLOSED DOWN 150.30 POINTS OR 1.45%

Italian MIB: CLOSED DOWN 142.39 POINTS OR 0.62% 

The Dow closed up 33.33 POINTS OR .14%

NASDAQ WAS closed up 144.49 PTS OR 2.20%  4.00 PM EST

WTI Oil price;   53.77   1:00 pm; 

Brent Oil: 60.26  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  58.29 UP  44/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 44 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO  +.417%  FOR THE 10 YR BOND  1.00 PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM

Closing Price for Oil, 4:30 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 4:30 PM:$53.97

BRENT: $60.39

USA 10 YR BOND YIELD: 2.415%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.928% 

EURO/USA DOLLAR CROSS:  1.1604 DOWN .0034

USA/JAPANESE YEN:113.67   down  0.455

USA DOLLAR INDEX: 94.85 UP 23 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3133 : up 4 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2825 DOWN 26 BASIS pts 

German 10 yr bond yield at 5 pm: +0.417%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Bezos Beat Batters Bears But Bonds & Bullion Bounce

Overheard on CNBC today… “today we get proof this is not a bubble…”

Nope..

h/t @Stalingrad_Poor

 

So Catalan secedes and Spain loses 22% of its GDP and still the Spanish stock market is outperforming the S&P in USD terms…

 

Before we start – let’s take a quick look at today’s cross-asset-class moves Stocks Up (well durr!), VIX crashed (back below 10), Bonds Up (wait… that doesn’t make sense), Gold Up (woah, why)… and the Dollar Down… (certainly doesn’t sound like the epic stock market environment that the media proclaims it to be)…

 

This is the 5th weekly rise in a row for Nasdaq (best day since the election),7th in a row for S&P and Dow… but Small Caps and Trannies ended the week red…

 

The Dow barely managed gains on the day…

 

Of course today was all about AMZN (best week since April 2015) and the big tech stocks… and as AMZN squeezed over 13% higher on the day, so Nasdaq followed…

 

VIX tumbled on the day, back below 10 – after topping 13 in the middle of the week...

 

And while Nasdaq VIX had decoupled from the index, today saw them reconnect somewhat as vol collapsed…

 

But can you spot the week’s odd ‘tech’ out…

 

FANG Stocks best week in 3 months…

 

Given the decoupling between AMZN and its EPS expectations…

 

Perhaps you are wondering why it just hit $1100…(correlation between the level of G3 balance sheets and AMZN for the last year is well above 95%)

 

5 Tech stocks alone added a stunning $200 billion market cap today…

 

Tax hopes – “sell the news” again…

 

Financials outperformed the broad market on the week as the yield curve modestly steepened…

 

Treasury yields ended the week higher but amid today’s exuberant equity market gains, bonds were bid

 

The Dollar Index rallied on the week (on yesterday’s EUR tumble) but rolled back over today…

 

CAD (BoC), AUD (CPI), and EUR (ECB) weakness sent the dollar higher on the week…

 

EURUSD’s worst week of 2017…

 

Bitcoin ended the week lower (yes lower) – first losing week in the last 5…

 

Despite the dollar strength, WTI Crude soared over 4% this week (Brent above $60 – highest since July 2015). Copper, Gold, and Silver slipped  (though the PMs rallied today)…

 

WTI’s best week in 3 months…tagging $54 – the highest since March…

 

Finally, courtesy of Mr. ‘Not’ Jim Cramer…

Investors Intelligence Survey: Bulls-Bears Spread Hits 30 Year High. Which of course was 1987.

 

END

 

‘Collusion’

What a difference one word can make…

 

Source: Branco

end

 

Surprisingly despite the hurricanes, the first estimate of Q#3 growth is 3%

 

(courtesy zerohedge)

US Economy Unexpectedly Grew At 3.0% In Q3 As BEA Ignores Impact Of Hurricanes Harvey, Irma

In the immediate aftermath of Hurricanes Harvey and Irma, Wall Street quickly trimmed its Q3 GDP forecasts from 3.0% to the low/mid 1% range, expecting a substantial, if brief, adverse impact on US growth from the storm devastation. However, moments ago the BEA surprised everyone when it reported that in its first estimate of third quarter growth the US economy grew an unexpectedly hot 3.0%, putting all fears of a hurricane-induced slowdown in the rearview mirror, and suggesting that the economy may indeed be starting to overheat with a second consecutive 3.0% or higher GDP print, as if the hurricanes did not have any adverse impact on the economy at all (they did, but as we explain below, the BEA simply decided to ignore the impact of the hurricanes).

The Q3 GDP was above the consensus estimate of 2.6% and just below the 3.1% in the second quarter. The back to back 3.0% or higher prints are the fastest pace of growth since the  4.6% and 5.2% revised GDP growth reported for Q2 and Q3 2014.

Looking at the components, Personal Consumption rose 2.4%, above the 2.2% expected, and contributed 1.62% to the bottom line Q3 GDP, which while down from the 2.24% in Q2, was still stronger than expected.

The increase in consumer spending reflected increases in spending on both goods and services. The increase in goods was mostly attributable to motor vehicles, and the increase in services primarily reflected increases in health care, in financial services and insurance, and in food services and accommodations.

The big driver of GDP growth was the jump in private inventories, which contributed 0.73%, or nearly a quarter, of the net GDP number. The increase in inventory investment primarily reflected increases in wholesale and in manufacturing inventories. The increase in business investment reflected increases in equipment and in intellectual property products; these increases were partly offset by a decrease in structures investment.

Additionally, for inflation watchers, the Fed’s preferred inflation metric, Core PCE rose 1.3% q/q in 3Q, in line with expectations, after rising 0.9% prior quarter; while PCE Prices advanced 1.5%, above the 1.2% expected. Final sales to private domestic purchasers q/q rose 2.2% in 3Q after rising 3.3% prior quarter.

Food prices increased in the third quarter following a larger increase in the second quarter of 2017. Energy prices increased in the third quarter of 2017 following a decrease in the second quarter of 2017. Excluding food and energy, prices increased 1.7 percent in the third quarter of 2017, compared with an increase of 1.3 percent in the second quarter of 2017.

Speaking of the hurricanes, the BEA said it’s “not possible” to estimate overall impact of Hurricanes Harvey and Irma on Q3 GDP.

During the third quarter, two major hurricanes caused severe damage and flooding in several states along the Gulf Coast. Hurricane Harvey made its initial landfall on August 25 in Texas, and made a second landfall in Louisiana on August 30 as a tropical storm. On September 10, Hurricane Irma hit the lower Florida Keys and the southern mainland of Florida. These disasters disrupted production at facilities such as factories, offices, and transportation centers. For example, oil and gas extraction and petroleum and petrochemical production in Texas and agricultural production in Florida were impacted. Other types of production, such as emergency services and rebuilding activities, increased. These impacts on production are included, but not separately identified, in the source data that BEA uses to prepare the estimates of GDPconsequently, it is not possible to estimate the overall impact of Hurricanes Harvey and Irma on 2017 third quarter GDP.

The BEA also said that the impact of Hurricane Maria not reflected in GDP because Puerto Rico and Virgin Islands not included in BEA’s estimates.

The bottom line: the stronger than expected GDP is raising concerns that the Fed may indeed be behind the ball, and that the hotter economic growth may soon translate into inflation and a resurrection of the Phillips curve, as a result risk assets have dipped on the news.

end

Soft data U. of Michigan Consumer Sentiment rises to its highest point since 2004 despite tumbling inflation expectations.  In other words, the consumer is happy but not the Fed who wants inflation.

 

(courtesy zerohedge)

UMich Consumer Sentiment Highest Since 2004 Despite Tumbling Inflation Expectations

Tyler Durden's picture

Dear Janet (and whoever follows her) – look at the chart below and explain why pushing up inflation expectations is good again?

The final October prints for UMich confidence are in and confirm expectations with the headline sentiment topping 100 for the first time since 2004. However, inflation expectations slumped once again… anti-correlating with the hopeful exuberance.

 

As UMich explains, personal finances were judged near all-time record favorable levels due to gains in household incomes as well as decade highs in home and stock values. Lingering doubts about the near term strength of the national economy were dispelled as more than half of all respondents expected good times during the year ahead and anticipated the expansion to continue uninterrupted over the next five years.

The year-ahead inflation rate was expected to be 2.4% in October, down from 2.7% last month (due to hurricane induced gas prices), and equal to last year’s reading. The expected year-ahead inflation rate was significantly higher among households with incomes in the bottom third (2.8%) than either the middle (2.1%) or top third (2.2%).

Households with incomes in the top third voiced less positive views toward durables and vehicle purchases, and remained unchanged for home purchases. The October results advise some caution since households with income in the top third account for half of all consumption expenditures, but even though slightly diminished, they are still quite favorable.

Overall, the data indicate a 2.6% growth rate in real consumption in 2017 and in the first half of 2018.

end

trial balloon:  Trump leaning toward Powell

 

(courtesy zerohedge)

Dollar, Bond Yields Tumble On Report Trump Leaning Toward Powell As Next Fed Chart

So much for Trump’s Senatorial “straw poll” who should be the next Fed chair (which as a reminder, was reportedly won by John Taylor as Janet Yellen’s replacement). Moments ago, Bloomberg reported, citing two people familiar with the matter, that of the two finalists, whom we already knew were John Taylor and Jerome “Jay” Powell, Trump is reportedly leaning to Powell as next Fed chair.

Perhaps Trumps was trying to find who the Senate wants in, just to decide the opposite. Or more likely Trump was just tapped on the shoulder by Mnuchin who as we know is a big fan of “establishment” Fed chairs, and who made it clear that only Powell can be the next head of the US money printer.

Of course, this is just another trial balloon, just like the bevy of Politico reports on the matter, because as Bloomberg’s sources cautioned, the “decision isn’t yet final” and added the usual disclaimer that Trump could change his mind at any time.

For now, however, with the threat of the uber-hawkish – at least according to consensus – John Taylor removed, both the dollar…

… and yields are sliding.

Rental Insecurity: Survey Finds 1 In 5 American Renters Missed A Payment In Past 3 Months

A new survey conducted by ApartmentList.com recently found that Americans, despite historically low unemployment levels and surging stock indices which would both seem to suggest that ‘everything is awesome’, are having a very difficult time making ends meet.  Per the survey, some 20% of renters admit they were unable to make their monthly payments on time at least once over the preceding three months with the results being even worse among minorities and those lacking a college degree.

  • Analyzing data from Apartment List users, we find that nearly one in five renters were unable to pay their rent in full for at least one of the past three months. We estimate that 3.7 million American renters have experienced an eviction.
  • Evictions disproportionately impact the most vulnerable members of our society. Renters without a college education are more than twice as likely to face eviction as those with a four-year degree.
  • Additionally, we find that black households face the highest rates of eviction, even when controlling for education and income. Perhaps most troublingly, households with children are twice as likely to face an eviction threat, regardless of marital status.
  • The impacts of eviction are severe and long-lasting. Evictions are a leading cause of homelessness, and research has tied eviction to poor health outcomes in both adults and children. These effects are persistent, and experiencing an eviction makes it difficult to get back on one’s feet.
  • Performing a metro-level analysis, we find that evictions are most common in metros hit hard by the foreclosure crisis and in those experiencing high rates of poverty. Perhaps counterintuitively, expensive coastal metros have comparatively low rates of eviction, in part because strong job markets with high median wages offset expensive rents in those areas.

As ApartmentList notes, some 3.7 million Americans, of roughly 118 million total renters, have experienced an eviction at some point in their life.  Meanwhile, “rent insecurity” is even more prevalent with nearly 30% of folks making less than $30,000 per year saying they have difficultly making monthly rent payments.

3.7 million Americans have experienced eviction, with rental insecurity affecting nearly one in five.

 

Our Apartment List estimates show that 3.3 percent of renters have experienced an eviction at some point in the past, and 2.4 percent were evicted from their most recent residence. With an estimated 118 million renters in the U.S. today, we estimate that 3.7 million Americans have been affected by eviction at some point. If we assume that some share respondents fail to report informal evictions, this estimate is most likely understated.

 

While experiencing eviction is a worst-case scenario with dire effects, a much larger share of renters still struggle with some form of rental insecurity. Our analysis shows that 18 percent of respondents had difficulty paying all or part of their rent within the past three months. The issue is particularly acute for low-income renters, 27.5 percent of whom were recently unable to pay their full rent.

Renters with just a high school diploma are more than three times as likely to have faced an eviction threat in the past year than those with a Bachelor’s degree.

Of those who did not attend college, 4.1 percent cited an eviction as the reason for their last move, compared to just 1.9 percent of those with at least some college education. This trend points to a broader issue of the housing market leaving behind less educated Americans. A recent Apartment List study showed that the gap in homeownership rates between high school and college graduates widened from 1.6 percent in 1980 to 14.9 percent in 2015.

 

A similar trend holds when broken down by income. Of those earning less than $30,000 per year, 11 percent faced an eviction threat in the past year, and 3.4 percent were evicted from their previous residence. In contrast, for those earning more than $60,000 per year, these figures are 3.1 percent and 1.5 percent, respectively.

Meanwhile, households with children were found to be twice as likely to face an eviction threat, regardless of marital status.

Single parent households are at the highest risk, with 30.1 percent reporting difficulty paying rent within the past three months. However, married couples with children do not fare much better, with 27.2 percent struggling to pay rent. For those without children, the rates are 14.7 percent for single respondents and 13.3 percent of married respondents. Our findings are consistent with previous research showing that, among tenants who appear in eviction court, those with children are significantly more likely to be evicted.

 

This result points to the fact the child care represents an essential but often overwhelming expense for many families, even those with both parents in the house. Analysis from Care.com shows that average daycare costs for toddlers range from $8,043 to $18,815 per year. Furthermore, one-third of families surveyed reported that childcare costs take up 20 percent or more of their household income.

Not surprisingly, evictions were found to be most prevalent in metro areas where poverty rates are the highest.

Of the 50 largest metros in the nation, evictions are most prevalent in Memphis, with 6.1 percent of users reporting a prior eviction. Most of the metros with the highest eviction rates are located in the South and Midwest and include Atlanta, Indianapolis and Dallas. We find that the factors most strongly correlated with eviction rates include (1) the rate of foreclosures from 2007 to 2008, during the height of the foreclosure crisis, and (2) current poverty rates.

 

Memphis, for example, has the highest share of its population living in poverty at 19.4 percent, and it also has the highest eviction rate. In metros with high poverty rates, many households may qualify for assistance through programs such as Section 8, but, unfortunately, only a small share of those eligible for such benefits actually receive them, leaving the majority of low-income households struggling to pay rent.

 

Las Vegas had the second highest foreclosure rate from 2007 to 2008 at 9.2 percent and now has the sixth-highest eviction rate at 5.5 percent. This correlation suggests that many of the areas hit hardest by the foreclosure crisis have had a difficult time recovering. Despite lower housing costs, renters in these areas — some of whom are likely former owners who had their homes foreclosed upon — face a lack of opportunity that makes it difficult for them to pay their rent.

Of course, with rental rates steadily climbing since the great recession, in spite of stagnant wages, it’s hardly surprising that Yellen’s “recovery” hasn’t helped all Americans equally.

Another front running case and this involves Wells Fargo.  What is fascinating is that these crooks do it all the time with respect to gold/silver
(courtesy zerohedge)

Federal Prosecutors Are Investigating Wells Fargo’s FX Business

Last week, WSJ stoked fears that the Feds might be ramping up another probe into abuse and manipulation in the foreign exchange market when it reported that Wells Fargo had abruptly terminated four bankers from its FX business and transferred another. Now, Wall Street’s paper of record is reporting that Federal prosecutors are investigating Wells for abuses in its FX shop – but the scope of the investigated is limited to one disputed trade.

According to WSJ,prosecutors have subpoenaed information from Wells and from the recently fired bankers as they investigate a trade and ensuing dispute between Wells and one of its clients, Restaurant Brands International Inc.

RBI owns several fast-food franchises, including Burger King, Tim Hortons and Popeyes Louisiana Kitchen. In an amusing twist, both companies count Warren Buffett’s Berkshire Hathaway as one of their largest shareholders.

In a statement, Wells Fargo said it “learned of an issue associated with a foreign exchange transaction for a single client. The matter was reviewed, the client was promptly notified regarding the issue, and Wells Fargo leadership took steps to hold accountable the individuals who were involved. Wells Fargo remains committed to our foreign exchange business, meeting our clients’ financial needs in an ethical way, and ensuring ongoing review of this and all business operations.”

The foreign-exchange issue revolves around a trade made within the past three years that included positions running into the billions of dollars, the people said. The trade resulted in a loss to Restaurant Brands, the people added, which led to a dispute between it and the bank.WSJ pointed out that the investigation into Wells Fargo’s foreign-exchange business, which is housed within its investment bank, are separate from sales-practices issues that rocked the bank more than a year ago. Wells Fargo is planning to refund Restaurant Brands hundreds of thousands of dollars related to the trading loss, WSJ‘s sources said.  The Federal Reserve is also looking into the issue. Specifically, Federal prosecutors are looking into the sequencing of the trade in question and whether it could have involved so-called front-running, some of the people familiar with the matter said. That should send a chill down the spine of the fired bankers, as earlier this week a US jury found a former HSBC currency trader guilty of fraud related to front-running a large trade that netted the bank some $8 million in profits. The US is also in the process of extraditing another UK-based FX trader to face front-running related charges in the US.

Last year, a wide-ranging investigation into abuse and front-running in the global foreign-exchange market led to a rash of settlements worth billions of dollars involving Barclays and a handful of other global banks.

While probes like this are never convenient, the investigation comes at a particularly trying time for the bank and its management. Earlier this month, WFC CEO Tim Sloan received a widely publicized tounge lashing from Massachusetts Senator Elizabeth Warren during Congressional testimony (Sloan became the second straight Wells CEO whom Warren said should resign during a public hearing). He has also participated in a handful of media interviews lately as he tries to burnish the bank’s once-wholesome reputation and bolster its lagging share price, which has never quite recovered from last year’s cross-selling scandal.

However, as WSJ explains, front-running is often difficult to gauge given the ambiguity around pre-hedging strategies in currency trading. Typically a bank must purchase currency as part of a trade and price it differently than it would price a stock. Wells Fargo’s investment-banking, securities and markets division, known as Wells Fargo Securities, is a fraction of the size of its U.S. big-bank peers, as is its foreign-exchange business. The bank doesn’t break out financial results or metrics for that group or its foreign-exchange business.

And while the investigation is the latest embarassment for the bank, which over the summer disclosed that it had overcharged mortgage and auto-loan borrowers, there is, at least, one mitigating factor: Unlike the retail banking scandal, which stoked widespread public outrage, few Americans understand how the foreign-exchange market works – indeed, many don’t even realize that such a market exists. This means that even in the worst-case scenario, Wells’s brand should remain untarnished from this latest scandal.

The US Attorney’s Office for the Northern District of California is leading the investigation.

END

THE FOLLOWING IS A GOOD READ AS THE AUTHOR OUTLINES WHAT MORE BOMBSHELLS WILL COME OUT OF THE INVESTIGATION ON THE TRUMP DOSSIER

(COURTESY KIMBERLEY STRASSEL/WALL STREET JOURNAL

The Coming Russia Bombshells

Authored op-ed by Kimberley Strassel via The Wall Street Journal,

The confirmation this week that Hillary Clinton’s campaign and the Democratic National Committee paid an opposition-research firm for a “dossier” on Donald Trump is bombshell news. More bombshells are to come.

The Fusion GPS saga isn’t over. The Clinton-DNC funding is but a first glimpse into the shady election doings concealed within that oppo-research firm’s walls. We now know where Fusion got some of its cash, but the next question is how the firm used it. With whom did it work beyond former British spy Christopher Steele ? Whom did it pay? Who else was paying it?

The answers are in Fusion’s bank records. Fusion has doggedly refused to divulge the names of its clients for months now, despite extraordinary pressure. So why did the firm suddenly insist that middleman law firm Perkins Coie release Fusion from confidentiality agreements, and spill the beans on who hired it?

Because there’s something Fusion cares about keeping secret even more than the Clinton-DNC news – and that something is in those bank records. The release of the client names was a last-ditch effort to appease the House Intelligence Committee, which issued subpoenas to Fusion’s bank and was close to obtaining records until Fusion filed suit last week. The release was also likely aimed at currying favor with the court, given Fusion’s otherwise weak legal case. The judge could rule as early as Friday morning.

If the House wins, don’t be surprised if those records include money connected to Russians. In the past Fusion has worked with Russians, including lawyer Natalia Veselnitskaya, who happened to show up last year in Donald Trump Jr.’s office.

FBI bombshells are also yet to come. The bureau has stonewalled congressional subpoenas for documents related to the dossier, but that became harder with the DNC-Clinton news. On Thursday Speaker Paul Ryan announced the FBI had finally pledged to turn over its dossier file next week.

Assuming the FBI is comprehensive in its disclosure, expect to learn that the dossier was indeed a major basis of investigating the Trump team – despite reading like “the National Enquirer,” as Rep. Trey Gowdy aptly put it. We may learn the FBI knew the dossier was a bought-and-paid-for product of Candidate Clinton, but used it anyway. Or that it didn’t know, which would be equally disturbing.

It might show the bureau was simply had. Don’t forget that it wasn’t until January the dossier became public, and the media started unearthing details. And the more ugly info that came out (Fusion, Democratic clients, intelligence-for-hire) the more former Obama officials seemed skeptical of it. In May, former Director of National Intelligence Jim Clapper said his people could never “corroborate” its “sourcing.” In June, Mr. Comey derided it as “salacious and unverified.”

Yet none of this jibes with reports that the FBI debated paying Mr. Steele to continue his work. Or that Mr. Comey was so convinced by the dossier that he pushed to have it included in the intelligence community’s January report on Russian meddling. Imagine if it turns out the FBI was duped by a politically contracted document that might have been filled up by the Kremlin.

There’s plenty yet to come with regard to the DNC and the Clinton campaign. Every senior Democrat is disclaiming knowledge of the dossier deal, leaving Perkins Coie holding the bag. But while it is not unusual for law firms to hire opposition-research outfits for political clients, it is highly unusual for a law firm to pay bills without a client’s approval. Somewhere, Perkins Coie has documents showing who signed off on those bills, and they aren’t protected by attorney-client privilege.

Those names will matter, since someone at the DNC and at the Clinton campaign will need to explain how they somehow both forgot to list Fusion as a vendor in their campaign-finance filings.Some Justice Department lawyer is presumably already looking into whether this was a willful evasion, which can carry criminal penalties. It’s one thing to forget to list that local hot-dog supplier for the campaign picnic. It’s a little fishier when two entities both fail to list the firm that supplied them the most explosive hit job in a generation.

And there are still bombshells with regard to unmasking of Americans in surveilled communications. If the Steele dossier reports (which appear to date back to June 2016) were making their way into the hands of senior DNC and Clinton political operatives, you can bet they were making their way to the Obama White House. This may explain why Obama political appointees began monitoring the Trump campaign and abusing unmasking. They were looking for a “gotcha,” something to disqualify a Trump presidency. Of course, they were doing so on the basis of “salacious and unverified” accusations made by anonymous Russians, but never mind.

No, this probe of the Democratic Party’s Russian dalliance has a long, long way to go. And, let us hope, with revelations too big for even the media to ignore.

END

Let’s close out the week with this week’s wrap up courtesy of Greg Hunter

 

Uranium One Crime Spree, JFK Document Release Postponed, Economic Update

By Greg Hunter On October 27, 2017 In Weekly News Wrap-Ups

By Greg Hunter’s USAWatchdog.com (WNW 307 10.27.17)

I have said it dozens of times, and that is I thought the Clinton unprotected email servers were used to hide Hillary Clinton was taking treasonous bribes in the form of donations to a global charity fraud. It is looking like it is now being proven true with the landslide revelations about the shady Uranium One deal that transferred 20% of U.S. uranium production to the Russians. This is, in fact, the real Russian collusion story, and former Secretary of State Clinton, not President Trump, is at the center of it all. It is confirmed that FBI agents have proof there was widespread money laundering, bribery and kickbacks before the deal was approved by Clinton and President Obama. This story will, no doubt, cause many to go to jail. This makes Watergate look like a squirt gun fight.

The CIA and FBI have pressured the Trump Administration to hold back some of the nearly 3,000 unreleased pages from the JFK assassination for redaction. Just think, we have been told since 1963 that this murder of a sitting President was just one guy with a gun, and yet the secrecy continues.

Renowned hedge fund manager Ray Dalio is warning of a bond market meltdown. Dalio runs the world’s largest hedge fund with $160 billion under management. Earlier this year, Alan Greenspan also was warning of severe bond market troubles because of the distinct possibility of rapidly rising interest rates.

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

Video Link

https://usawatchdog.com/uranium-one-crime- spree-jfk-document-release-postponed-economic-update/

 

end

Well that about does it for tonight

Have a safe and enjoyable weekend   and….

 

I will see you MONDAY night

HARVEY

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