GOLD: $1276.15 UP $5.30
Silver: $16.83 UP 8 cents
Closing access prices:
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1287.00 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1271.87
PREMIUM FIRST FIX: $15.13(premiums getting larger)
SECOND SHANGHAI GOLD FIX: $1288.17
NY GOLD PRICE AT THE EXACT SAME TIME: $1270.30
Premium of Shanghai 2nd fix/NY:$17.87 PREMIUMS GETTING LARGER)
CHINA REJECTS NEW YORK PRICING OF GOLD!!!!
LONDON FIRST GOLD FIX: 5:30 am est $1272.75
NY PRICING AT THE EXACT SAME TIME: $1271.15
LONDON SECOND GOLD FIX 10 AM: $1272.00
NY PRICING AT THE EXACT SAME TIME. 1273.70 ??
For comex gold:
NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 82 NOTICE(S) FOR 8200 OZ.
TOTAL NOTICES SO FAR: 3332 FOR 333,200 OZ (10.326TONNES)
1 NOTICE(S) FILED TODAY FOR
Total number of notices filed so far this month: 1095 for 5,475,000 oz
Bitcoin: $6192 bid /$6212 offer up $458.00 (MORNING)
BITCOIN CLOSING;$6097 BID:6117. OFFER UP $362.00
Tomorrow is options expiry for the LBMA/London contracts and they generally expire at around 9 am to 11 am. Tomorrow is also first day notice for gold and silver comex and November is a non active month for both.
Let us have a look at the data for today
In silver, the total open interest SURPRISINGLY ROSE BY A good sized 2210 contracts from 194 ,053 UP TO 195,983 DESPITE FRIDAY’S TRADING IN WHICH SILVER FELL BY 5 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 GOOD SIZED RISE IN OI COMEX WITH THE 5 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. 0.980 BILLION TO BE EXACT or 140% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT OCT MONTH/ THEY FILED: 1 NOTICE(S) FOR 5,000 OZ OF SILVER
In gold, the open interest SURPRISINGLY FELL BY A HUGE 8,635 CONTRACTS DESPITE THE RISE IN PRICE OF GOLD ($2.15) . The new OI for the gold complex rests at 519,426. THE LOSS OF OI CONTRACTS WAS DUE TO THE ISSUING OF “EMERGENCY” EFP CONTRACTS WHERE A LONG RECEIVES A FIAT BONUS PLUS A DELIVERABLE PRODUCT ON A DIFFERENT EXCHANGE SUCH AS A LONDON FORWARD. WE SEEMS THAT IN EXCESS OF 8700 EFP CONTRACTS WERE ISSUED AT THIS MONTH END FOR NOVEMBER.
Result: A HUGE SIZED DECREASE IN OI DESPITE RISE IN PRICE IN GOLD ($2.15).WE HAD CONSIDERABLE EFP’S ISSUED AT MONTH END AS THE CME USES THIS “EMERGENCY” VEHICLE IF NOT GOLD IS AVAILABLE TO BE DELIVERED UPON LONGS AT THE COMEX.
we had: 82 notice(s) filed upon for 8200 oz of gold.
With respect to our two criminal funds, the GLD and the SLV:
STRANGE!! WITH GOLD UP FOR TWO DAYS: , A HUGE CHANGE in gold inventory at the GLD/ A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD
Inventory rests tonight: 850.77 tonnes.
STRANGE: WITH SILVER UP THESE PAST TWO TRADING DAYS WE HAD A BIG WITHDRAWAL IN SILVER INVENTORY AT THE SLV: 1.133 MILLION OZ
INVENTORY RESTS AT 319.155 MILLION OZ
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver SURPRISINGLY ROSE BY A CONSIDERABLE 2210 contracts from 193,773 UP TO 195,983(AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) . OUR BANKERS WERE AGAIN UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY OF THEIR SILVER SHORTS.
RESULT: A SURPRISING GOOD SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 5 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. NO EFP’S WERE ISSUED FOR THE UPCOMING NOVEMBER CONTRACT
2.a) The Shanghai and London gold fix report
2 b) Gold/silver trading overnight Europe, Goldcore
and in NY: Bloomberg
3. ASIAN AFFAIRS
i)Late SUNDAY night/MONDAY morning: Shanghai closed DOWN 26.47 points or .77% /Hang Sang CLOSED DOWN 102.66 pts or 0.36% / The Nikkei closed UP 3.22 POINTS OR 0.01/Australia’s all ordinaires CLOSED UP 0.14%/Chinese yuan (ONSHORE) closed UP at 6.645/Oil UP to 53.97 dollars per barrel for WTI and 60.52 for Brent. Stocks in Europe OPENED MIXED . ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.6450. OFFSHORE YUAN CLOSED AT VALUE OF THE ONSHORE YUAN AT 6.644 AND //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS HAPPY TODAY.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
i)North Korea are conducting mass evacuation drills and blackout exercises.
b) REPORT ON JAPAN
c) REPORT ON CHINA
China stocks and bonds tumble as soon as the National Congress ends. The Chinese yield curve is now inverted signifying that China’s economy has slowed down considerably.
4. EUROPEAN AFFAIRS
Spain fires the entire Catalan government and then calls for snap elections in total retaliation for the independence vote
ii)The Catalan leader urges a “peaceful” rebellion as Spain takes over the government of Catalonia
iii)Interesting: Puigdemont seeks asylum in Belgium after Spain files charges against the Catalan government for rebellion. How will Belgium officials handle this?
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
The following is a must read as it verifies what we have been telling you for the past few years that Qatar, Saudi Arabia, Egypt and Turkey under the leadership of the USA were behind the initial attacks that started the civil war in Syria.
ii)The Kurdish President announces his resignation. However supporters of independence storm the Parliament with knives and guns
Iran over the weekend stated that they rejected Trump’s push for a secret face to face meeting at the U.N. The USA rejected the story but if true this would seem to week the USA in the eyes of the world
6 .GLOBAL ISSUES
7. OIL ISSUES
8. EMERGING MARKET
9. PHYSICAL MARKETS
i)This is interesting: Federal prosecutors are investigation Wells Fargo’s FX business (which includes gold/silver) as 4 bankers depart the company;
ii)Bill Murphy’s remarks to the New Orleans Conference
( Chris Powell/Bill Murphy/)
iii)Dave Kranzler comments that the oil for yuan for gold is real but China will take its time to implement this Yuan-Petro- scheme
( Dave Kranzler/IRD)
iv)The one oz gold bar sold by the Royal Bank of Canada is fake and they do not know how this happened:
10. USA Stories
i)A good summary of Friday’s bombshell that the DNC paid for the “Trump Dossier”. Basically it was the Democrats that colluded with Russians in order to thwart the Trump election
( Alex Thomas SHFTPlan.com)
ii)Sean Hannity of Fox News is furious that Mueller has not charged Clinton in the Uranium scandal
iii)The fun begins: Manafort is told to surrender to the FBI on several charges including tax fraud and money laundering. Now we await for the Republicans to force a special prosecutor to go after the Clintons, Mueller, Rosenstein et others
( zero hedge)
iv)the situation is now getting red hot as Mueller seems to be also going after Democratic lobbyist Podesta Group who chairman Tony is the brother of DNC head John Podesta.
v)The soap opera continues with Manafort pleading not guilty along with his side kick Gates. He claims that he has not received one cent from doing business with the Ukraine or Russia. As we noted above, Tony Podesta has resigned from his company as they did do business with the Ukraine. Interesting enough, the number one donor to the Clinton Foundation was the Ukraine at 10 million dollars. The bail was astronomical so both have been placed under house arrest. The real problem here is that this will be a huge distraction to Trump as they try and get tax reform done which will be impossible
vi) Just what Hillary needed: Benghazi is back in the news with the capture of a militant who was instrumental in that 2012 attack.
Let us head over to the comex:
The total gold comex open interest SURPRISINGLY FELL BY 8535 CONTRACTS DOWN to an OI level of 519,426 DESPITE THE RISE IN THE PRICE OF GOLD ($2.15 RISE IN FRIDAY’S TRADING). WE AGAIN WITNESS THE CME INTO AN “EMERGENCY” ACTION WHEREBY THEY DO NOT HAVE ANY GOLD TO DELIVER UPON LONGS IN THE UPCOMING NON ACTIVE DELIVERY MONTH OF NOVEMBER. THEY RESORTED TO THE ISSUANCE OF AN EXCESS OF 8500 EFP CONTRACTS WHICH ENTITLE THE HOLDER TO A FIAT BONUS PLUS A DELIVERABLE PRODUCT ON AN ANOTHER EXCHANGE AND THAT NO DOUBT IS A LONDON FORWARD.
AS I HAVE STATED ALL MONTH LONG IN DESCRIBING WHAT HAPPENED WHEN WE APPROACHED FIRST DAY NOTICE LAST MONTH:
“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.”
The amount of EFP’s issued for each of the past 3 months at month’s end;
Result: a GOOD SIZED open interest DECREASE WITH THE RISE IN THE PRICE OF GOLD ($2.15.)
We have now entered the active contract month of Oct and here we saw a LOSS of 3 contracts DOWN TO 83 contracts. We had 77 notices filed yesterday so we GAINED 74 contracts or an additional 7400 oz will stand for delivery at the comex in this active delivery month of October and 0 EFP notices were given FOR OCTOBER. 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 71 contracts down to 652.
The very big active December contract month saw it’s OI loss OF 9,666 contracts DOWN to 378,303 BUT OVER 8500 CONTRACTS LANDED IN LONDON LONG FORWARDS.
We had 82 notice(s) filed upon today for 8200 oz
VOLUME FOR TODAY (PRELIMINARY) 113,010
CONFIRMED VOLUME YESTERDAY: 374,307
We had 1 notice(s) filed for 5,000 oz for the OCT. 2017 contract
|Withdrawals from Dealers Inventory in oz||nil oz|
|Withdrawals from Customer Inventory in oz||
|Deposits to the Dealer Inventory in oz||nil oz|
|Deposits to the Customer Inventory, in oz||
|No of oz served (contracts) today||
|No of oz to be served (notices)||
|Total monthly oz gold served (contracts) so far this month||
|Total accumulative withdrawals of gold from the Dealers inventory this month||NIL oz|
|Total accumulative withdrawal of gold from the Customer inventory this month||xxx oz|
Today, 0 notice(s) were issued from JPMorgan dealer account and 51 notices were issued from their client or customer account. The total of all issuance by all participants equates to 82 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
|Withdrawals from Dealers Inventory||nil|
|Withdrawals from Customer Inventory||
|Deposits to the Dealer Inventory||
|Deposits to the Customer Inventory||
|No of oz served today (contracts)||
|No of oz to be served (notices)||
|Total monthly oz silver served (contracts)||1095contracts
|Total accumulative withdrawal of silver from the Dealers inventory this month||NIL oz|
|Total accumulative withdrawal of silver from the Customer inventory this month||xx oz|
NPV for Sprott and Central Fund of Canada
will update later tonight
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada
Sprott Inc. to take control of rival gold holder Central Fund of Canada
Posted Oct 2, 2017 8:43 am PDT
Last Updated Oct 2, 2017 at 9:20 am PDT
TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.
Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.
The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.
Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.
In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.
Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.
And now the Gold inventory at the GLD
Oct 30/STRANGE WITH GOLD UP THESE PAST TWO TRADING DAYS, THE GLD HAS A WITHDRAWAL OF 1.18 TONNES FROM ITS INVENTORY/INVENTORY RESTS AT 850.77 TONES
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
Now the SLV Inventory
Oct 30/STRANGE!WITH SILVER UP THESE PAST TWO TRADING DAYS, WE HAD A HUGE WITHDRAWAL OF 1.133 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/
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
Indicative gold forward offer rate for a 6 month duration+ 1.35%
Major gold/silver trading/commentaries for MONDAY
Wozniak and Thiel Fuel Bitcoin-Gold Debate: Gold Comes Out On Top
– Gold versus bitcoin debate makes further headlines as tech experts weigh in
– Peter Thiel tells Saudi conference he believes bitcoin is underestimated and compares to gold
– Steve Wozniak tells Money 20/20 that bitcoin is a better standard of value than gold and U.S. dollar
–Both men recognise that the US dollar has little value and there are worthy competitors to its crown as reserve currency
– Gold continues to hold its value and has multiple uses, bitcoin remains volatile and difficult to use
– Experts are pushing an unnecessary debate as gold and bitcoin state more about fiat than each other
Lords of the tech world Peter Thiel and Steve Wozniak are the latest to add fuel to the bitcoin versus gold debate.
At separate conferences both told audiences that they had great hopes for bitcoin, comparing it to gold. The co-founder of Paypal and the Apple co-founder both expressed views that suggest they believe the world’s biggest cryptocurrency is superior to the world’s oldest form of money.
Each of their comments demonstrated some ignorance when it came to how gold operates and also in how they believe the two assets need to be considered competitors.
Their comments were really about the badly managed US dollar and how its time is limited. Yet as we have seen throughout the year, thoughts by experts return to bitcoin replacing gold rather than being a statement on the pushback against fiat money tyranny.
Misinformed with misdirection
At first Thiel’s comments were relatively positive towards gold and he showed that he understood why investors choose to invest in both assets:
[Bitcoin is] like a reserve form of money, it’s like gold and it’s just a store of value. If Bitcoin ends up being the cyber equivalent of gold, it has a great potential left.
But Thiel also believes it has more potential than gold due to a misinformed belief about mining differences:
So bitcoin is also, it’s mineable, like gold it’s hard to mine, it’s actually harder to mine than gold and so in that sense it’s more constrained,”
Wozniak also had some interesting comments on how bitcoin and gold mining compared to one another:
“There is a certain finite amount of bitcoin that can ever exist. Gold gets mined and mined and mined. Maybe there’s a finite amount of gold in the world, but Bitcoin is even more mathematical and regulated and nobody can change mathematics.”
— Finom (@finom_company) 22 October 2017
Wozniak then described the US dollar as “kind of phony,” while describing Bitcoin as more “genuine and real.”
All about the dollar
To cut to the chase what Wozniak and Thiel are really saying is not that bitcoin and gold are competing with one another but instead that they are better than the US dollar.
This should be the main takeaway – the US dollar does have major problems. It has lost over 90% of its value, is controlled by one central bank and holds a huge amount of power over the rest of the world.
Things are so bad with the US dollar that the likes of Russia and China no longer want to hold it in reserve and are rapidly increasing their exposure to physical gold bullion.
This is where the crux of any debate should be, why is bitcoin so successful and can it follow in gold’s footsteps when it comes to holding its value and outperforming fiat currencies. The two assets are so dramatically different that there should be little airtime given to an either/or debate.
Instead finance and tech commentators should recognise that if managed successfully bitcoin could join gold in its role as an alternative and powerful currency that operates outside of centralised markets and the clutches of central banks.
Bitcoin versus gold is an unnecessary debate that distracts from the main issue: both history and new technology are now offering investors and savers great opportunities to save and spend outside of the fiat system.
Forced to choose for no reason
What is fascinating about comments made by the likes of Thiel and Wozniak is that they force investors to believe an unnecessary choice is necessary.
Why do investors have to choose between gold and bitcoin? It’s like saying you must choose between gold and silver or Apple and Amazon stock, there’s no need. You can invest in both.
Thiel and Wozniak’s comments do not add anything interesting to the discussion about the opportunities and risks of investing in bitcoin. Instead they merely add fuel to the headlines that ask if cryptos are ‘killing gold’ or if bitcoin is gold 2.0.
This line of thinking has been particularly popular this year as bitcoin has surged over $6000 whilst gold has climbed by 10%. There is no doubt that bitcoin has energised investors, especially those in the tech space and younger generations.
But because one asset is outperforming the other, does this make them substitute assets or should we consider them complementary?
Gold and bitcoin: Substitutes or complementary?
– Both are clearly seen as safe havens: Take gold’s reaction when events such as North Korean sabre-rattling happen, or bitcoin’s reaction to the Catalonia crisis.
– Both are decentralised: Neither asset relies on a central bank to manage supply, demand or price.
– Both have limited supply: Gold and bitcoin are mined. Gold relies on physical mining, bitcoin is mined mathematically.
The above three reasons show there are clear similarities between the two assets. They are also the main reasons why people choose to invest in gold and/or bitcoin. But differences do remain, making bitcoin and gold ideal complementary assets whilst showing the precious metal to be the ultimate safe haven against fiat tyranny.
– Gold is held by central banks, bitcoin is not. Currently the majority of central banks hold gold as part of their reserves.
The most recent example is Russia who added 1.1 million ounces to reserves last month in an ongoing diversification from USD. So far there is no evidence of central bank investment into bitcoin, suggesting that they do not have an interest in supporting its role in the economy.
– Gold is a highly liquid market. According to the LBMA some £13.8 billion worth of physical gold are traded just in London alone.
Despite the huge influx of investment into both the bitcoin and blockchain arena there is still some way for the cryptocurrency market to go before it reaches the level of liquidity we see in the precious metals’ space.
– Bitcoin does have enormous potential as a medium of exchange. Currently it is mainly bought by traders looking to bet on price movements. Very little of the daily support behind the price is thanks to it being used in transactions.
The beauty of gold is that it has multiple uses. No longer is it used in minor hand-to-hand transactions to the extent we would have seen last century but it used in international trade agreements as well as in other areas such as medicine, technology and jewellery.
– This leads on to the final and very, very important point: gold does not rely on electricity in order to be traded. It is a physical asset, unlike bitcoin. In Puerto Rico 95% of citizens are without electricity. If the entire monetary system were based on an electronic form of cash, such as bitcoin, this would cause multiple problems for those in disaster struck areas, or even places where electricity just isn’t as reliable. Gold bars or coins do not rely on electricity in order to be used in exchange for cash or goods.
Much of this debate fails to look at gold’s USP that has allowed it to survive as an asset and form of money for millennia: its ability to hold its value.
Bitcoin may well retain its value, but for something that has climbed 6,000% in less than a decade, without much evidence of its key selling points the jury should perhaps step outside for a bit longer.
This does not mean that bitcoin does not have potential. There are clearly some returns to be made. If the likes of tech billionaires such as Thiel, Wozniak and Musk are getting involved then there could be some interesting developments on the horizon.
However, discovery of an asset that is posting incredible returns does not mean sensible investing needs to go out the window. Consider the approach of Frank Holmes, CEO of San Antonio-based US Global Investors, which has $2.6 billion in assets under management and is one of the definitive top precious metals funds.
Holmes has recently backed and become chairman for HIVE, a gold-miner-turned-bitcoin-miner. Holmes is still a big investor in gold but sees the complementary potential for bitcoin. As anyone should approach investing, Holmes is diversifying his portfolio.
This brings us back to our main point, the debate is not about bitcoin versus gold but instead about investors and savers protecting themselves from the rapid devaluation of fiat currencies.
Bitcoin is new and volatile, with much to prove. Gold has been in existence as money and a store of value for millennia, not to mention all of it’s other roles.
Investors should continue to pay attention to the bitcoin chatter due to the narrative it offers around changing attitudes to money and the economy. However, they must remember that the debate is about security of savings and value. This is where gold is currently the only real contender for protecting your diversified portfolio.
News and Commentary
Gold Prices (LBMA AM)
27 Oct: USD 1,267.80, GBP 968.35 & EUR 1,090.18 per ounce
26 Oct: USD 1,278.00, GBP 968.34 & EUR 1,082.34 per ounce
25 Oct: USD 1,273.00, GBP 964.81 & EUR 1,081.67 per ounce
24 Oct: USD 1,278.30, GBP 970.36 & EUR 1,087.32 per ounce
23 Oct: USD 1,275.25, GBP 967.79 & EUR 1,085.62 per ounce
20 Oct: USD 1,280.25, GBP 974.27 & EUR 1,084.76 per ounce
20 Oct: USD 1,280.25, GBP 974.27 & EUR 1,084.76 per ounce
Silver Prices (LBMA)
27 Oct: USD 16.72, GBP 12.76 & EUR 14.38 per ounce
26 Oct: USD 16.97, GBP 12.84 & EUR 14.37 per ounce
25 Oct: USD 16.89, GBP 12.75 & EUR 14.34 per ounce
24 Oct: USD 17.04, GBP 12.92 & EUR 14.49 per ounce
23 Oct: USD 17.00, GBP 12.90 & EUR 14.47 per ounce
20 Oct: USD 17.08, GBP 12.96 & EUR 14.46 per ounce
20 Oct: USD 17.08, GBP 12.96 & EUR 14.46 per ounce
This is interesting: Federal prosecutors are investigation Wells Fargo’s FX business (which includes gold/silver) as 4 bankers depart the company;
Federal prosecutors are investigating Wells Fargo FX business, report says
Submitted by cpowell on Fri, 2017-10-27 19:55. Section: Daily Dispatches
By Rick Rothacker
Charlotte (North Carolina) Observers
Friday, October 27, 2017
Federal prosecutors in San Francisco are investigating foreign-exchange trading at Wells Fargo following the departure of four bankers in the unit this month, the Wall Street Journal reported today.
Wells Fargo confirmed today that the departure of the bankers was related to a single customer transaction but did not identify the corporate client involved in the matter. The Observer reported Tuesday that the matter involved a single customer who was aware of the matter, citing a source familiar with the situation.
The Journal, citing sources, said the issues in the foreign-exchange unit involved Ontario-based Restaurant Brands International Inc., the parent company of Burger King, Tim Horton’s, and Popeye’s Louisiana Kitchen. Warren Buffett’s Berkshire Hathaway is a shareholder of RBI and Wells Fargo. …
… For the remainder of the report:
New York Sun: Is America on a gold standard?
Submitted by cpowell on Sat, 2017-10-28 19:44. Section: Daily Dispatches
From the New York Sun
Saturday, October 28, 2017
Has America been secretly on the gold standard?
We ask because as Janet Yellen nears the end of her term as chairman of the Federal Reserve, the value of a one-dollar Federal Reserve note is at 1,269th of an ounce of gold — essentially identical to the 1,262nd of an ounce of gold at which it was valued on the day she acceded to the Fed chairmanship. Is that just a coincidence?
That is the question as President Trump wrestles with whether to nominate Mrs. Yellen to a second term or bring in someone else to chair our central bank. Federal Reserve scrip has roller-coastered somewhat during Mrs. Yellen’s term. It has plunged below a 1,300th of an ounce of gold and clacked up to close to a thousandth of an ounce of gold. Generally, though, it has stayed within that band. …
… For the remainder of the commentary:
Bill Murphy’s remarks to the New Orleans Conference
(courtesy Chris Powell/Bill Murphy/)
Bill Murphy: Nearly two decades of fighting the Gold Cartel
Submitted by cpowell on Sat, 2017-10-28 22:47. Section: Daily Dispatches
Remarks by Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
Wednesday, October 25, 2017
Next year will be the 20th year, or two decades, that Chris Powell, the GATA army, and I have been out there doing what we could to expose the gold price suppression scheme by what we call the Gold Cartel.
What we have learned over all this time is how all encompassing the market manipulation schemes really are. Initially, we realized that various bullion banks (such as Goldman Sachs and JP Morgan) were collectively suppressing the gold price to keep it below $300 an ounce. Eventually we realized the manipulation extended to silver too AND included the Fed, The Treasury, Exchange Stabilization Fund, BIS and other central banks
Over the many years it became apparent the market rigging extended to other financial markets … including acknowledged intervention in our bond market and clandestine operations in our stock market, marshaled by the infamous Plunge Protection Team. One of the first people to acknowledge the magnitude of it all was Chris here, who at GATA’s 2008 conference outside of Washington, D.C. came up with his great line, “There are no markets anymore, just interventions.”
That was quite the notable comment back then, way ahead of its time. These days, it is hard not to notice the interventions, if you have an open mind.
I’d like to take us back to this conference one year ago, which took place ahead of the Presidential election. Back then, most everyone predicted a win for Hillary Clinton. However, if there was any hint that Donald Trump might win, our stock market was nailed to the downside and the price of gold spiked higher. And then, immediately after the stunning Trump upset, the Dow tanked and the price of gold soared. That’s when market intervention went on steroids.
Our stock market soon began to soar, while the price of gold began to collapse. Since the election, the Dow has been on a one way street to the upside with corrections not allowed. Meanwhile, the gold/silver prices have been prevented from doing anything on the upside, with all rallies sold. On election eve, the Dow was 18,200, while gold was $1274 and silver: $18.33. The dollar was 97.83.
So since then the Dow has rallied more than 5,000 points; gold is flat, but silver is off $1.30 … and all this with the dollar dropping 4/5 points. Whatever happened to the dollar being a major influence on the gold price and whatever happened to the economically oriented Dow having some influence on silver? Since the election, the price of copper has risen nearly $1 per pound, over 40 percent.
Now this is my own opinion and not one articulated by GATA, but it has everything to do with market manipulation on steroids.
The money and power behind the scenes in the U.S. were petrified of a Donald Trump Presidency. He would be an outsider and based on his manner of saying things there was no telling how he might upset the markets. It is essential to appreciate that very few in the establishment predicted before the election that he would be good for our stock market. That is fact. SO, to make sure that no matter what Donald Trump did or said, perceptions had to be changed immediately so that his Presidency would not cause a market debacle. That meant an increased propping up of our stock market by our government, in conjunction with the Counterparty Risk Management Group, etc. This included other central banks joining the party, such as Switzerland, etc.
This is not an anti-Trump diatribe. When living in New York, we both attended Dr. Norman Vincent Peale’s church. Dr. Peale you may recall wrote the “Power of Positive Thinking.” I even met his second wife, Marla Maples. But when have you ever heard a comment such as the one Senator Corker made that the three key people around the President are preventing the country from going into chaos? Corker is a Republican who supported Trump. There is much else we could get into. The point is, no matter what happens, regarding how the President outrages people, our stock market goes higher.
Meanwhile, gold (which is so often viewed as the barometer of U.S. financial market health … with down being good, and up being bad, as reflected on by former Fed Chairman Paul Volcker) is never allowed to reflect the true state of fiscal/economic affairs in our country. The fact that Congress could not even come up with a budget and our debt has soared past 20 trillion dollars is cast aside, just like everything else.
Oh yes, we may now have a budget which will have a deficit of 1.2 trillion dollars, around double the one this year of 666 billion. Let’s hear it for the fiscal conservatives! None of the bullish fundamentals which would normally seriously affect the gold price mean anything. All that matters these days is what The Gold Cartel can get away with.
As a result of what they have done, the situation is now a dire one for much of industry. The reasons are straight forward and simple…
— Gold and silver are now in their 7th year of being in a bear market.
— Meanwhile, investors in our general stock market watch our major indices make one all-time high after another.
— Investors in art and real estate are dealing with new highs too.
— But perhaps the most debilitating of all for our sector at the moment is what the crypto currencies have done this year. Early this year I presented at a Jeff Berwick conference in Acapulco. The conference focused on precious metals and crypto currencies. The crypto folks were ecstatic back then as bitcoin had risen to the same price of gold at $1240. Even then, the crypto crowd was bubbly as could be. So upbeat compared to the gold/silver crowd. Can you imagine what that convention will be like this year with bitcoin around 6,000? Good for them.
Come to think of it. Us gold/silver guys might not even be invited this year. Just too embarrassing.
— As a result of what the crypto currencies have done, investors have seen what an investment, which is out of the system and not manipulated, can do. Unfortunately, what a bitcoin has done has revealed just how right GATA has been about The Gold Cartel and their price suppression scheme. Investors are fleeing our sector like never before, at least in the U.S. The beat downs of gold and silver year after year, compared to other assets soaring, has led to “I can’t take it anymore.” And bye bye they are going. Where this is very noticeable is in the subdued action of the gold/silver shares, which remain limp most of the time these days. No excitement whatsoever.
This is not to leave you with a bah humbug feeling when you leave this workshop. Gold and silver are the cheapest assets on the planet, held down now at artificially low prices. Now is the time to be accumulating them, not running away from them. The reality check problem is the same thing could have been said last year or the year before that.
The difference today, and it is a very valid one, is that an enormous amount of pressure in both the gold and silver is building in each market as a result of what The Gold Cartel has done. Each time they knock the precious metals down, as other assets soar, the pressure increases to a new level. As a result, we have pressure cooker or volcano type of set ups which can blow at any time.
Silver, which some of us call the cartel’s kryptonite, is particularly vulnerable to blow sky high. Silver has that nickname because it is only a matter of time before JP Morgan and gang runs out of enough physical supply to meet growing demand at these lowly price levels. The feeling among a number of us is that once silver is able to blow through $21 an ounce, The Gold Cartel will begin to lose control of systematic operations.
Getting back to that “pressure” notion, the odds are that upon breaking that key resistance level, the price will go bonkers, as complacent silver buyers scramble to secure physical supply. The upward price action ought to be much more volatile than when silver last went to $50 an ounce in 2011. Don’t be surprised if silver’s price action isn’t often compared to what a bitcoin has done. IMO the bitcoin price action is a road map for what is coming for the silver price.
As for GATA and what we are doing to expose an end to the reign of The Gold Cartel forces. It has been some 20 years…
— We have held 4 international conferences — in South Africa, Alaska, Washington, D.C., and London.
— Been to Washington numerous times to meet the likes of the speaker of the House, Ron Paul, monetary committees, etc.
— Organized letter campaigns to Congress.
— Appeared on various cable television financial shows.
— Collected and published evidence of The Gold Cartel’s wrongdoings. Chris here and Indiana’s James McShirley, a lumber company CEO who has extensive futures experience, have done yeoman work in this area.
— Presented at conferences, such as this one.
It has been some journey.
Most gratifying of all have been the great people we have met over the years, such as yourselves — many of whom have financially supported our efforts.
Unfortunately, we learned that the gold and silver industry as a whole will never do anything about dealing with the most important factor in the gold and silver world. Yes, to do so would mean dealing with some permitting issues by governments and financings by bullion banks. Yet, any other industry would form an organization to deal with, or correct, the problem, so they could not be individually blamed. Not this one, who has The World Gold Council refusing to anything about the devastating issue.
Then we have the issue of a financial market press which is not free or fair. During that trip to London we were told by the veteran Bloomberg gold reporter that she was not allowed to mention GATA. No matter what Chris sends to the press, they refuse to run with it. And even when they do, GATA is routinely cut out.
Just a few months ago, thanks to Chris, I spent hours dealing with a Wall Street Journal reporter who was doing a story on the Fed and gold. Introduced her to various individuals in the GATA camp and must have sent her 70 emails. This led to a front page story on the subject. But, guess what! Katy Burne, the reporter, got back to me with an, “Oh no, GATA was cut out!”
Dealing with the mainstream financial market press for nearly two decades reveals a no-hoper in that regard. And the reason is simple. GATA is taking on the richest most powerful people in the world and exposing wrongdoings. The press does not want to take the risk of confronting them in any way. Heck, as Chris will tell you, these reporters are too scared to even ask them questions. And then when individuals do, as GATA supporter Ware Smith did with New York Fed President Bill Dudley in Virginia last year, they refuse to answer the question.
So why carry on? Because one day what The Gold Cartel is doing will lead to the biggest financial market scandal in U.S. history and the story needs to be documented and told. And that day will come after the gold/silver prices go berserk following tremendous financial market/economic stress in this country… partly as a result of making gold, that barometer of U.S. financial market health, being dysfunctional. Think of it as a doctor taking away a thermometer to judge the health of a patient.
Other scandals come to mind such as Enron and Bernie Madoff. And then we have something quite comparable with the latest one on Hollywood Mogul, Harvey Weinstein. For many decades he sexually abused women and has even been accused of rape. The fact he was doing so was well known, even joked about at an Oscar Ceremony. The point is everyone was afraid to take him on because of his connections and role with the rich and powerful. Those connections included the Clintons and other well known Democrats.
Heck, my own sister, Kris, was a model in New York decades ago and she had to deal with him in a New York hotel room. Nothing happened in the end, but she was terribly frightened.
The point is, now that this “monster” has been exposed, the evidence of his wrongdoings is coming out of the woodwork as is this epic scandal. Weinstein did his thing for decades and got away with it just as The Gold Cartel is doing their thing.
The general commentary is that Weinstein must face the music and be dealt with so this sort of horror doesn’t occur again. And this is a major reason GATA carries on.
We want The Gold Cartel to face the music too, which they will some day. Unfortunately, it most likely only will occur after enormous damage is done — just like Weinstein is being exposed after so much of his damage.
So GATA carries on until that day comes. In the meantime, in my opinion, the most important fact to know about the gold/silver prices is to understand how artificially cheap they are because of The Gold Cartel’s constant operations. And that one of these days something will occur that sends the gold/silver prices to the moon. When that happens, fortunes will be made.
Dave Kranzler comments that the oil for yuan for gold is real but China will take its time to implement this Yuan-Petro- scheme
(courtesy Dave Kranzler/IRD)
Dave Kranzler: Oil for gold — real or imagined?
Submitted by cpowell on Sun, 2017-10-29 19:06. Section: Daily Dispatches
4:51p ET Sunday, October 29, 2017
Dear Friend of GATA and Gold:
Dave Kranzler of Investment Research Dynamics writes today that “a gold-backed yuan-denominated oil futures contract is inevitable, just maybe not on the timeline preferred by the Western gold investing community.” Kranzler’s commentary is headlined “Oil for Gold — Real or Imagined?” and it’s posted at IRD here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
The one oz gold bar sold by the Royal Bank of Canada is fake and they do not know how this happened:
“This Could Be Huge”: Gold Bar Certified By Royal Canadian Mint Exposed As Fake
The last time there was a widespread physical gold counterfeiting scare was in the summer of 2012 when as we reported the discovery of a single 10 oz Tungsten-filled gold bar in Manhattan’s jewelry district led to a panic among the dealer community, which then resulted in local jewelry outlets discovering at least ten more fake 10-ounce “gold bars” filled with Tungsten. Fast forward to today when a similar instance of gold counterfeiting has been discovered, this time in Canada, and where the fake bar in question had been “certified” by the highest possible authority.
According to CBC, the Royal Canadian Mint is investigating how a sealed, “pure gold” wafer with proper mint stampings has emerged as a fake. According to the Canadian press, the one-ounce gold piece, which was supposed to be 99.99% pure, was purchased by an Ottawa jeweller on Oct. 18 at a Royal Bank of Canada branch. The problem emerged when tests of the bar showed it may contain no gold at all. And, when neither the mint nor RBC would take the bar back, jeweler Samuel Tang contacted CBC news.
“Who is going to make sure those [gold wafers] are real?” asked Tang. “I am worried there are more of those [gold wafers] out there, and no one knows.”
Following the news, RBC felt an obligation to pick up the bar and they returned it to the mint for testing, refunding Tang the $1,680 purchase price.
The Royal Canadian Mint said in a statement to CBC it is in process of testing the bar, “although the appearance of the wafer and its packaging already suggests that it is not a genuine Royal Canadian Mint product.”
Questions about the fake bar’s origins aside, a more immediate concerns is that, just like in 2012, if there is one fake bar, there are likely many more. William Rentz, a professor at the University of Ottawa’s Telfer School of Management and an expert on investments and equity, says the discovery is “troubling.”
“A currency counterfeiter doesn’t make just one fake $50 bill,” he said. “They make a whole lot of them. So I would suspect this might just be the tip of the iceberg.”
While the RCMP said they are aware of the incident, no formal complaint has yet been made.
* * *
As CBC details, the mystery of the fake gold began on Oct. 18, when Tang purchased what he thought was a 99.99% pure gold wafer from an RBC branch just across the road from his Glebe-area boutique, Joy Creations.
He carried the business-card-sized bar, still sealed in its Royal Canadian Mint blister-pack, back to his shop.
His goldsmith, Dennis Barnard, said he cut open the plastic mint packing and placed the one-ounce wafer in a hand-cranked jeweller’s tableting mill.
“I thought my age was catching up with me — because it was so hard to roll,” said Barnard
Once doubts emerged about the integrity of the gold bar, Barnard tried bending the wafer, as pure gold is usually pliable and can be bent easily. Instead, the goldsmith said the wafer snapped, leaving a jagged line.
“That’s when I started realizing something is amiss,” said Barnard, who then proceeded to test the gold himself, using an acid testing kit. In an acid test, the jeweller rubs a streak of the metal across an abrasive test stone. Then, a drop of pre-mixed acid is added to the center of the streak.
If the metal streak changes colour or disappears, then the metal is less than the karat of the test acid. Gold of 99% purity is considered to be equal to 24-karat gold. But the bar from RBC failed a test that gold of 18-karat or higher purity would pass.
A metal streak from a counterfeit gold bar, right, dissolved in acid, failing a test of purity
That’s when Tang contacted RBC.
“This could be huge. There could be quite a few people out there who’ve been rolled over,” said Barnard.
The news turned from bad to worse when CBC took the same bar to Ernest Marbar, owner of the Gold Lobby, an Ottawa buyer of precious metals. Marbar also found the bar failed an acid test for 14-karat gold. His conclusion: “The bar that came from that package is a piece of junk” the gold expert said, adding that the “million-dollar question” is “how it ended up in that plastic case.”
Ernest Marbar, owner of the Gold Lobby, an Ottawa buyer of precious metals,
dismissed the wafer as ‘a piece of junk
Back at Joy Creations, goldsmith Barnard said his concern wasn’t with goldsmiths being duped, it’s with end buyers of the product who assume the purity and quality of the mint-endorsed purchases are sacrosanct: he and Tang are worried the bogus gold could be widely distributed and difficult to find, since most buyers are investors and leave the metal in the mint’s blister-packed cases.
“Who’s going to run around and open their packages, which are sealed by the mint?” asked Barnard. It’s a concern echoed by professor Rentz: “It’s a serious problem. If the trust disappears, it could be seize up the market, at least temporarily.”
Ultimately, the onus is on the those who endorsed the fake product – the mint. Rentz said the mint would be motivated to get to the bottom of this case, since the discovery of a counterfeit undermines confidence in their product.
Meanwhile, Tang said last Monday he spoke with the manager of the RBC branch where he purchased the bar. He said the manager was told by a mint dispatcher they were checking security footage, and trying to trace everyone involved in the handling of the bars.
Amusingly, if the swap turns out to be an inside job, it wouldn’t be the first time. As we reported at the time, last September, 35-year-old Leston Lawrence was found guilty of smuggling C$180,000 worth of gold pucks, each the size of a small muffin, in his rectum over several months. Lawrence worked at the mint from July 2008 until March 2015. The punchline: his job included purifying gold…
Your early MONDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST
2. Nikkei closed UP 3.22 POINTS OR 0.01% /USA: YEN FALLS TO 113.61
3. Europe stocks OPENED MIXED /USA dollar index FALLS TO 94.62/Euro UP TO 1.1637
3b Japan 10 year bond yield: FALLS TO +.070/ 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:: 53.97 and Brent: 60.52
3f Gold UP/Yen UP
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil UP for WTI and UP FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.388%/Italian 10 yr bond yield DOWN to 1.88% /SPAIN 10 YR BOND YIELD DOWN TO 1.512%
3j Greek 10 year bond yield FALLS TO : 5.55???
3k Gold at $1271.25 silver at:16.76: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 41/100 in roubles/dollar) 57.69
3m oil into the 53 dollar handle for WTI and 60 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 113.61 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9974 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1606 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 +0.388%
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 2.399% early this morning. Thirty year rate at 2.914% /
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
S&P Futures Slide After Chinese Stock And Bond Rout; Spain Rebounds, Dollar Drops
U.S. futures slid 0.2% as investors await a barrage of announcements including Wednesday’s Fed decision, Friday’s jobs report and, most importantly Trump’s imminent announcement of who the next Fed chairman will be, although after the latest trial balloons, Jay Powell is now largely priced in. Asian equities edged modestly higher despite a tumble in Chinese stocks and bonds with Japan’s Nikkei closing 3 points in the green, while European shares hold steady after concerns eased about the Catalan crisis with no notable developments over the weekend, pushing Spanish stocks and bonds higher.
As reported last night, the big overnight event was the tumble in Chinese stocks, which fell the most since early August, dropping as much as 1.7% before closing below 3,400, down 0.8%, and breaking the calm that persisted through the recent Party Congress, as government bonds extended a monthly rout amid concern the government will step up efforts to reduce leverage in the financial sector. Small-cap shares bore the brunt of the selling, with the ChiNext gauge tumbling as much as 2.5%.
This was the biggest drop in the Shanghai Composite since August 11:
The rout was matched by China’s bonds, where 10-year TSY bond futures dropped 0.88%, the biggest tumble in over 10 months…
… with volumes surged to the highest since Mar this year. The 10Y yield rose for the 6th consecutive day…
… increasing by the most since December, climbing 8 basis points to 3.93% as of late Monday in Shanghai, a three year high; the yield on five-year notes surged 9 basis points to 3.97% as the Chinese yield curve remains inverted.
While China’s equity market was subdued for most of this month amid state efforts to limit volatility during the 19th Party Congress, sovereign yields have been climbing. This happened despite a tsunami of liquidity: the PBOC provided more than 1 trillion yuan ($150 billion) in funding this week, the most since February. On Monday, the PBOC added a net 40 billion yuan ($6 billion) via open-market operations, and used the 63-day reverse repos – meant to cover the liquidity period through year end – for a second day.
Formerly euphoric comments about China turned on a dime, and from exuberant enthusiasm in recent week, turned to fearful pessimism what happens next:
- “Pessimism in the bond market is spilling over to the stocks,” said Hao Hong, chief China strategist at Bocom International Holdings Co. in Hong Kong. “Surging yields of the government bonds are resulting in worsened sentiment and higher funding costs for companies, of which smaller ones will suffer most as they rely more heavily on the market rather than bank loans for financing.”
- “Previously the market was stable because the National Team was there during the Party congress,” said Ken Chen, an analyst at KGI Securities Co. “Now the meeting is over, and October’s economic data are expected to be worse than September’s, which worries investors.”
- “Sentiment is still fragile – as the government bond yield keeps hitting new highs, market sentiment is only getting worse and worse,” SWS Research analysts led by Meng Xiangjuan wrote in a note according to Bloomberg who added that “irrationality will accelerate the declines of bonds.”
- “China is facing the toughest financial regulations ever,” according to Huachuang Securities analysts, who said that “the adjustment in bonds will continue and yields will climb this year. Investors should be cautious, and shouldn’t bottom fish before a clear floor appears.”
- “The surge in China’s government bond yield last week and expectation for tighter financial regulation have triggered concern of tighter liquidity,” said Qiu Zhicheng, a strategist at ICBC International Research Ltd. in Hong Kong. “This prompted the slide in small caps as their valuations are still expensive, and thus they are more sensitive to changes in liquidity conditions”
Short-term funding markets were also impacted, with the overnight repo rate rising 2 basis points to 2.78%, while the 7-day repo jumped 10 bps to 2.96%. One-year interest-rate swaps rose 3 basis points to 3.64% while the
onshore yuan climbs for the first time in four days, up 0.14% at 6.6425 per dollar.
China’s weakness spilled to Hong Kong, where equity indexes reversing gains and closed down 0.4%, although other Asian markets were mostly immune, with Australia’s 200 (+0.4%) benefiting from the latest record highs in the US and the Nikkei 225 rising +0.1% with the energy sector leading in Australia after Brent crude rose back above USD 60/bbl for the first time since July 2015, while gains in Japan were later pared due to a firmer JPY. Taiwanese Apple suppliers coat-tailed on the tech giant’s recent strength due to overnight reports of strong iPhone X demand. 10yr JGBs were mildly higher amid an indecisive risk tone in Japan and with the BoJ also active in the belly to short-end of the curve.
Japan’s equity benchmarks were little changed after a rally that saw the Nikkei 225 Stock Average close above 22,000 for the first time since 1996 as declines by defensive stocks cancelled out gains by technology companies. The Topix index earlier declined as much as 0.5%, with banks, pharmaceuticals and retailers the biggest drags. More than 800 Japanese companies are expected to report results this week. “Profit-taking after stellar gains is possible,” said Nader Naeimi, who helps manage about $110 billion at AMP Capital Investors Ltd. “The U.S. dollar has had a strong run recently and a short-term pull-back is likely. With that, any short-term strength in the yen is triggering profit-taking in Japanese exporters.” The Topix remains near a 10-year high and above its 20-day and 50-day moving averages. A technology-related gauge was the biggest boost to the benchmark after the Nasdaq 100 rose to a record Friday on strong earnings from Amazon.com Inc. and Alphabet Inc. Komatsu Ltd. gained 3.5 percent after boosting its full-year operating profit forecast 39 percent.
European equities were subdued, with the Stoxx Europe 600 Index nudging lower, though markets showed little sign of distress as the Spanish government began the process of reasserting control after Catalonia’s declaration of independence. The country’s stocks outperformed and bonds gained, along with debt of other peripheral European nations after S&P Global ratings upgraded Italy on Friday. Spain’s IBEX 35 led its peers, higher by 1.5%. Spanish sentiment was bolstered by the recent announcement of fresh Catalan elections on December 21st with the latest polling data suggesting that support for the independence push is beginning to wane.
Italian BTPs rallied after Friday’s upgrade of Italian sovereign rating by S&P. USD grinds lower against G-10 with focus on month end and positioning before potential announcement on Fed Chair this week. Bunds push higher after German regional CPIs suggest national reading could be below consensus, USTs dragged higher in tandem with 10Y yield back below 240bps, short end of UST curve flattens
On a sector breakdown, energy names outperform after Brent reclaimed USD 60.00/bbl to the upside, while UK housing names notably underperform amid a slew of downgrades at Barclays. Choppy, fickle and apprehensive trade in Bunds, which were marked up initially on the back of firmer US Treasuries, but swiftly hit offers as Eurozone peripheral bonds extended their post-ECB rally (Spanish Bono yield down 6bp and closer to 1.5% vs 1.80%+ at the recent peak) and intraday chart traders instigated shorts looking for a pull-back. However, the 10 year German debt future found bids at 162.25 and has managed to climb back above parity – softer state CPIs perhaps lending a hand.
In FX, EM currencies advanced as the dollar weakened on speculation U.S. President Donald Trump may name Jerome Powell, seen as a decidedly dovish candidate, as the next Fed chairman. “Asian currencies opened higher as the dollar pared back its recent rally after a report that the more dovish Powell is the top pick for the next Fed’s chair,” said Singapore-based Ken Cheung, senior FX strategist at Mizuho Bank. “Meanwhile U.S. equities at record high with a strong performance in the technology sector boosted regional sentiment.” The New Zealand dollar slid after Finance Minister Grant Robertson indicated an employment objective may need to be included in the central bank’s mandate which could potentially result in lower interest rates. The Bloomberg Dollar Spot Index declined for the first day in three. Key events this week include a possible announcement by U.S. President Donald Trump on the next Fed chair, policy decisions by the FOMC and Bank of Japan, and the start of Trump’s visit to Asia.
The dollar was also lower versus most of its G-10 peers and down by 0.2% as of 10:00am London according to the Bloomberg Dollar Spot Index; investors are now focusing on the expected announcement by Trump on the Fed’s next chair, a House committee’s release of a tax bill on which few details are known, and the FOMC meeting on Nov. 1. Before the release of German price-pressures data and the Fed’s preferred gauge of inflation – the core PCE – due later Monday, hedge funds took profit in euro-dollar shorts opened after the ECB decision on Thursday. Trailing stops extend all the way to 1.1660, traders in Europe and London say.
Investors will watch some of the world’s most influential policy makers this week for more clues about quantitative easing and the path of monetary tightening, with the Bank of Japan first up on Tuesday, followed by the Fed on Wednesday and the Bank of England on Thursday. Of those, only the Bank of England is expected to hike this time round. Meanwhile, speculation continues over who Trump will choose as the next Fed chair, with Governor Jerome Powell said to be the front-runner.
Below, courtesy of Bloomberg, are some of this week’s key events: Trump has said he’ll reveal his choice to lead the Fed by Friday; The U.S. central bank’s next rate decision is on Wednesday, with economists expecting policy makers to hold rates for now and to increase them at the December meeting; The U.S. October payroll report comes out Friday. On Monday, personal income and spending data comes out, which features the Fed’s preferred inflation gauge; Trump starts an 11-day trip to Asia, his first as president, on Friday. Trade and security issues — particularly North Korea — will probably be in focus; A probable BOE rate hike on Thursday will be the first in a decade; Euro-area GDP growth is seen slowing, while GDP reports from France and Spain and national CPI prints from the big four euro-zone economies are also among data piling up this week; The slew of earnings releases will culminate with Apple Inc. results.
Bulletin headline summary from Ransquawk
- IBEX leads EU bourses higher following the announcement of Catalonian snap-election
- USD gives back some of Friday’s gains ahead of key risk events in the form of NFP, FOMC, tax reform and next Fed Chair
- Looking ahead, highlights include German National CPI, US PCE and personal consumption
- S&P 500 futures down 0.2% to 2,574.00
- VIX Index trading 5% higher at 10.29
- STOXX Europe 600 down 0.09% to 393.08
- MSCI Asia up 0.3% to 167.78
- MSCI Asia Ex Japan up 0.4% to 548.65
- Nikkei up 0.01% to 22,011.67
- Topix down 0.01% to 1,770.84
- Hang Seng Index down 0.4% to 28,336.19
- Shanghai Composite down 0.8% to 3,390.34
- Sensex up 0.4% to 33,304.02
- Australia S&P/ASX 200 up 0.3% to 5,919.08
- Kospi up 0.2% to 2,501.93
- German 10Y yield rose 0.5 bps to 0.388%
- Euro up 0.2% to $1.1630
- Brent Futures up 0.5% to $60.72/bbl
- Italian 10Y yield unchanged at 1.682%
- Spanish 10Y yield fell 5.9 bps to 1.527%
- Gold spot down 0.3% to $1,270.04
- U.S. Dollar Index down 0.2% to 94.69
Top Overnight News from Bloomberg
- Charges possible on Monday against one or more people will be the first public glimpse into Special Counsel Robert Mueller’s six-month probe of Russian meddling in the 2016 presidential election and possible collusion by Donald Trump’s campaign
- Bowing to concerns from Republican House members in high-tax states, the chamber’s chief tax writer said he’ll preserve a federal income-tax break for property taxes
- Akzo Nobel NV is considering a merger with U.S. rival Axalta Coating Systems Ltd. in a bid to keep the embattled Dutch paintmaker independent and create a transatlantic specialty coatings giant
- The 6,000 job cuts announced last week at Nordea Bank ABare just a down payment for an industry facing radical overhaul, says Chief Executive Officer Casper von Koskull
- HSBC Holdings Plc’s $100 billion bet on Asia is bearing fruit, driving its third consecutive increase in quarterly revenue just months before Chief Executive Officer Stuart Gulliver hands the reins to John Flint.
- Mnuchin: Fed decision is focused on choosing just Fed Chair, not the Vice Chair also
- German Regional CPIs y/y (National consensus 1.7%): Saxony 1.8%; Hesse 1.6%; Bavaria 1.5%; NRW 1.6%; Baden Wurt. 1.5%
- Spain: El Mundo poll shows pro-independence bloc would lose majority in new Catalan elections, reaching 65 seats compared to 68 needed for majority; separate poll shows support for independence falling to 33.5%
- ECB’s Coeure: hopes this QE extension “will be the last”; short-term rates set by the ECB to remain very low for “quite some time”; long-term rates are set by the markets, these can be “expected to rise”
- Spiegel: Merkel Bloc considering splitting Finance Ministry, responsibility for the Euro and international finance will move to the economy ministry controlled by the Merkel bloc
- The Senate Foreign Relations Committee has scheduled a hearing with Defense Secretary Jim Mattis and Secretary of State Rex Tillerson to explore whether expanding U.S. operations to fight terrorism requires new Congressional authorization for the use of military force
- Novartis Agrees to Buy Advanced Accelerator for $3.9 Billion
- German Chancellor Angela Merkel meets leaders of the Free Democrats and
Greens in the latest round of exploratory talks on forming a government
with her Christian Democratic-led bloc.
- GOP Leader Offers Little Clarity on House Bill’s 401(k) Plan
- GE, Saudi Electricity Co. in Power Sector Research Pacts
- Colombian President Juan Manuel Santos, Ukrainian Prime Minister Volodymyr Hroisman, and Canadian Minister of Foreign Affairs Chrystia Freeland are among speakers at the International Economic Forum of the Americas. In Toronto through Nov. 1.
Asian equity markets were slightly mixed amid a deluge of earnings and with the region tentative at the start of a risk-packed week. An initial positive tone was observed after Friday’s fresh records on Wall St where sentiment was inspired by a surge in the tech giants, stronger than expected GDP and reports that President Trump was leaning towards Powell for the Fed chair role. This benefitted the ASX 200 (+0.4%) and Nikkei 225 (+0.1%) at the open in which the energy sector led in Australia after Brent crude rose back above USD 60/bbl for the first time since July 2015, while gains in Japan were later pared due to a firmer JPY. Taiwanese Apple suppliers coat-tailed on the tech giant’s recent strength due to strong iPhone X demand, while Hang Seng (-0.2%) traded indecisive and Shanghai Comp. (-0.8%) underperformed on a retreat below the 3,400 level amid broad mainland weakness. Finally, 10yr JGBs were mildly higher amid an indecisive risk tone in Japan and with the BoJ also active in the belly to short-end of the curve. PBoC injected CNY 70bln via 7-day reverse repos, CNY 30bln via 14-day reverse repos and CNY 50bln via 63-day reverse repos. PBoC set CNY mid-point at 6.6487 (Prev. 6.6473). BoJ Governor Kuroda is likely to stay on for another 5-year term, according to reports.
Top Asian News
- Ex-Man Group Trader Raises $70 Million for Japan Equity Fund
- China Arrests N.Koreans Over Plot to Kill Kim’s Nephew: JoongAng
- Posco Seeks Up to $197m Selling Nippon Steel Shares: Terms
- Nintendo Lifts Outlook After Accelerating Switch Production
- Kobe Abandons Net Income Forecast as Scandal Blurs Outlook
European equities have kicked the week off with little in the way of firm direction with the exception of the IBEX 35 (+1.5%) which leads its peers. Sentiment for Spanish assets has been bolstered by the recent announcement of fresh Catalan elections on December 21st with the latest polling data suggesting that support for the independence push is beginning to wane. On a sector breakdown, energy names outperform after Brent reclaimed USD 60.00/bbl to the upside whilst UK housing names notably underperform amid a slew of downgrades at Barclays. Choppy, fickle and apprehensive trade in Bunds, which were marked up initially on the back of firmer US Treasuries, but swiftly hit offers as Eurozone peripheral bonds extended their post-ECB rally (Spanish Bono yield down 6bp and closer to 1.5% vs 1.80%+ at the recent peak) and intraday chart traders instigated shorts looking for a pull-back. However, the 10 year German debt future found bids at 162.25 and has managed to climb back above parity – softer state CPIs perhaps lending a hand. A new session high has subsequently been posted at 162.56, and threatening reported buy-stops on a break. UK Gilts have plotted a similar course between 124.03-124.35, with attention on BoE super Thursday and an anticipated 25 bp hike. Back to USTs, upside interest noted via options with 126-00 call said to have been bought (vs 124-29 in the underlying Dec contract at best).
Top European News
- Poll Shows Catalan Independence Falls to 33.5%: El Mundo
- Spain’s Economy Maintained Momentum Before Crisis in Catalonia
- Continental in Talks to Buy Argus Cyber for $400M: TheMarker
- Novartis’ Planned AAA Deal Is Good Fit, Expensive, Vontobel Says
In currencies, the USD has given some of its ground back against its major counterparts with the USD index marginally lower (-0.5%) in what is set to be a big week for the greenback with highlights including NFP, FOMC, potential tax reform and Trump is set to unveil his selection for the Fed Chair. GBP traders are looking ahead to ‘Super Thursday’ with markets pricing in a 85-90% chance of a hike later this week with little in the way of tier 1 data between now and then. NZD underperforms with the currency pressured amid cross related selling, where AUD/NZD briefly reclaimed the 1.12 level, while NZD/JPY took a slight dip below 78.00.
In the commodities complex, prices have been relatively rangebound with crude prices taking a breather from last week’s ascent in which WTI briefly broke above USD 54/bbl and Brent reclaimed the USD 60/bbl for the first time since 2015. Gold prices also lack firm direction ahead of this week’s FOMC meeting and NFP jobs data, while copper has also consolidated amid a somewhat indecisive risk tone in the region.
US Event Calendar
- 8:30am: Personal Income, est. 0.4%, prior 0.2%; Personal Spending, est. 0.9%, prior 0.1%
- Real Personal Spending, est. 0.5%, prior -0.1%
- PCE Deflator MoM, est. 0.4%, prior 0.2%; PCE Deflator YoY, est. 1.6%, prior 1.4%
- PCE Core MoM, est. 0.1%, prior 0.1%; PCE Core YoY, est. 1.3%, prior 1.3%
- 10:30am: Dallas Fed Manf. Activity, est. 21, prior 21.3
DB’s Jim Reid concludes the overnight wrap
Relative to what occurred in the dull summer, it does feel like bond markets have been having a mini baby like tantrum over the last three or four weeks. Indeed the US bond volatility MOVE index hit 5 month highs on Thursday even if that only puts us back to the bottom of its historical range pre the exceptionally becalmed summer. Last week saw a 11.5, 11.7, 14.1, 15.3, and 13.8bp range (including intra-day) for 10yr Treasuries, Bunds, Gilts, Italian and Spanish Government bond yields. However, with the ECB effectively dampening near-term domestic bond volatility after their decision on Thursday and helping Bunds out-perform USTs by 9.1bp on the week (10yr), it’ll be left to the US to provide most of the vol if there is going to continue to be some. For now there is still some potential for this to happen.
Before the week is out we should know 1) who the next Fed Chair will be (Powell increasingly favourite), 2) whether the US tax reform bill moves to the next step with the House Ways and Means committee set to publish legislation on Wednesday, 3) whether Payrolls will see a large post storms bounce-back on Friday (+310k expected) and if average hourly earnings stays elevated, 4) if PCE (the Fed’s preferred inflation gauge) today shows any sign of life, 5) if there are any signs of firming up a December hike probability after the FOMC meeting on Wednesday (no press conference) and 6) whether there is any political fallout from the first charges from special counsel Mueller’s probe into Russia’s involvement in last year’s Presidential election. Reports suggest we may see some charges today.
Elsewhere this week we are likely to see the first BoE rate hike for a decade on Thursday, a BoJ meeting tomorrow, German flash CPI today with the same for the Euro area tomorrow, final PMIs (and US ISM) in the second half of the week and 136 S&P 500 (Apple Thursday) and 58 Stoxx 600 company earnings due.
Back on Friday, President Trump was reported as leaning towards Fed Governor Powell as the next Fed Chair as per sources familiar to the matter (Bloomberg). The potential appointment of the less hawkish Powell likely contributed to the mini bond rally, with core bond yields down 3-5bp (UST 10y -5.5bp; Bunds -3.2bp; Gilts -3.5bp). Over the weekend the WSJ also followed up with a similar article on Saturday afternoon suggesting Powell was leading the race. Elsewhere, Treasury Secretary Mnuchin noted that Trump is unlikely to nominate two fed officials at the same time as “we’re focused on the Fed Chair decision. That’s really the focus at the moment”. Either way, we should find out Trump’s final decision sometime before this Friday.
For those who missed it, DB’s Peter Hooper noted that a Powell-led Fed makes more sense, in part as i) he would provide the highest degree of continuity to current policy, ii) he has had c5 years of experience working inside the Fed with a reputation as a consensus builder, and iii) while not a PHD trained economist, he has learned the trade well, as evidenced by his speeches and Q&A performance.
T urning to Spain where tensions have escalated as both sides stepped up their initiatives. On Friday, the Catalonia’s regional parliament voted in favour of independence, with Catalan President Puigdemont calling for “democratic opposition” and peaceful resistance. On the other side, Spain’s senate has approved the implementation of Article 155 measures, allowing Spanish PM Rajoy to retake control of the region, where he has named a new police chief, dissolved the Catalan Parliament and called new regional elections for 21 December. In response, Spain’s equities market (IBEX -1.45%) and bonds (10y +5.2bp) both underperformed peers. Then over the weekend, ousted Catalan VP Junqueras noted “the Catalan Republic has been born” and they will work on their independence roadmap in the coming days. On the other side, 300k to 1m demonstrators (depending on the source) marched through streets of Barcelona calling for unity, shouting “Viva Espana” and “Puidgemont in prison”.
Elsewhere, reactions from offshore were similar to before, with EU President Tusk noting that nothing has changed in the policy towards Catalonia and that Spain “remains our interlocutor”, while NATO secretary Stoltenberg noted that the “Catalonia issue must be resolved within Spain’s constitutional order”. Finally, the El Mundo reported that opinion polls suggest Catalan secessionists could win 65 seats in a new election, but fall short of the 68 seats needed for new majority.
DB’s Marc de-Muizon noted that Spain deserves some attention as it has one of the largest negative net international investment positions (NIIP). The composition of the NIIP is worse than the smaller peripherals because relatively less is financed by the official sector, making it more vulnerable to capital flight. For more detail, refer to link.
This morning in Asia, markets are trading slightly weaker. The Kospi (+0.08%) is up marginally, but the Hang Seng (-0.03%), Nikkei (-0.02%) is down and Chinese bourse are down 0.6% to 1.6% as we type, partly impacted by increased concerns that the government may intensify its deleveraging campaign. Domestic bond yields are around 4bps higher and around 3 year highs. Elsewhere, UST 10y bond yields are trading slightly firmer (-1bp) this morning.
Quickly recapping other markets performance on Friday. US equities strengthened further to record highs, led by a rally in the Nasdaq (+2.20%; up the most since March 2016) following sound results from Amazon (shares up +13.2%), Microsoft (+6.4%) and Alphabet (+4.3%). The S&P 500 (+0.81%) and Dow (+0.14%) also closed higher, with gains led by the tech and consumer discretionary sectors, with partial offset from consumer staple names. Across Europe, core markets were broadly higher with the Stoxx (+0.55%), DAX (+0.64%) and FTSE (+0.25%) up slightly, while peripherals such as Spain’s IBEX (-1.45%) and Italy’s MIB (-0.62%) underperformed. The VIX index dropped 13.3% to below 10 (9.80), the first time in a week.
Key currencies were little changed, with the US dollar index up 0.32% following a solid 3Q GDP beat (3% qoq vs 2.6% expected), while the Euro and Sterling softened 0.37% and 0.25% respectively. In commodities, WTI oil rose 2.39% to $53.90/bbl, partly supported by expectations that OPEC may extend its supply cuts beyond March 2018. Precious metals were slightly higher (Gold +0.50%; Silver +0.44%) while other base metals weakened (Copper -1.23%; Zinc -0.62%; Aluminium -0.43%).
Away from the markets, ECB’s executive board member Coeure noted that “I’m hopeful that this (QE extension) will be the last extension”. On rates, he reiterated that the ECB’s policy “will remain very accommodative” and that short term rates will “remain low for quite some time, well past September 2018”, but long term rates “can be expected to rise” along with the global recovery. On broader risks, he noted that “there’s no financial bubble at Euro area level, but there are price tensions on real estate markets in some countries”.
Over in the US, President Trump’s job approval rating has declined to the lowest point of his presidency. As per a poll by NBC news & WSJ, 38% of Americans approve of Trump’s job performance, down 5ppt since September, while 58% disapprove. His approval rating also lags other former Presidents at similar stage of their presidency, with George W. Bush at 88%, Obama at 51% and Clinton at 47% in the autumn of their first year as president. Perhaps this will bring a greater urgency and focus on President Trump to deliver some sort of tax reforms by end of the year as planned.
Staying in the US and turning to the earnings season, which we are now half way through. DB’s asset allocation strategists note that 75% of companies have beat on EPS (vs. historical average of 73%). They further highlight two notable aspect of this reporting season: 1) the number of companies providing positive guidance climbed to a 6-year high, 2) analyst estimates for 4Q have remained steady over the last two weeks, despite a fairly high bar of 12% yoy EPS growth.
We briefly wrap up with other data releases from Friday. In the US, 3Q GDP beat expectations at 3.0% qoq (vs. 2.6% expected; 3.1% previous) – marking the strongest consecutive quarters of growth in GDP since December 2014. The 3Q personal consumption also beat at 2.4% (vs. 2.1% expected). Elsewhere, both 3Q core PCE (1.3% qoq) and the university of Michigan consumer confidence were in line (100.7), but the latter still represent the highest confidence level since January 2004.
In France, October consumer confidence was a tad softer at 100 (vs. 101 expected) and back to pre-election levels, while Germany’s import price index beat expectations at 0.9% mom (vs. 0.5% expected) and 3.0% yoy (vs. 2.6% expected). In Spain, retail sales was stronger than expected (2.1% yoy vs. 1.9% expected) in September and mortgage approvals also increased 29.1% yoy (vs. 32.9% previous) in August.
3. ASIAN AFFAIRS
i)Late SUNDAY night/MONDAY morning: Shanghai closed DOWN 26.47 points or .77% /Hang Sang CLOSED DOWN 102.66 pts or 0.36% / The Nikkei closed UP 3.22 POINTS OR 0.01/Australia’s all ordinaires CLOSED UP 0.14%/Chinese yuan (ONSHORE) closed UP at 6.645/Oil UP to 53.97 dollars per barrel for WTI and 60.52 for Brent. Stocks in Europe OPENED MIXED . ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.6450. OFFSHORE YUAN CLOSED AT VALUE OF THE ONSHORE YUAN AT 6.644 AND //ONSHORE YUAN STRONGER AGAINST THE DOLLAR/OFF SHORE STRONGER TO THE DOLLAR/. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS HAPPY TODAY.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
North Korea are conducting mass evacuation drills and blackout exercises.
North Korea Conducts Mass Evacuation Drills, Blackout Exercises
A rare blackout exercise and mass evacuation drill took place in North Korea last week according to NK News, citing “multiple sources.” The wartime preparations were not visible in Pyongyang, but were seen in “secondary, tertiary cities and towns” on the eastern coast of the country. NK News and “multiple sources” stressed these drills are “extremely rare.” Such “blackout and evacuation” drills are extremely rare in North Korea, multiple other sources with long experience working inside or on the country told NK News, making it difficult to gauge their purpose amid the current atmosphere.
Chun In-bum, a retired three star lieutenant general from the South Korean army, said “I have never heard of this type of training exercises before in North Korea, but am not surprised. They must realize how serious the situation is.” An NK News confidential “source” with-in North Korea added to the gravity of the situation: “I have never heard of evacuation exercises happening before.”
“There used to be air raid drills in 2003, but not since then,” the source said, who didn’t want to be identified due to the sensitivities of talking about military issues to the media. “A mass evacuation would be impossible not to notice.”
The North Korean war preparation exercise drill takes place as the U.S. Navy plans to stage an extremely rare, three-carrier exercise in the next few weeks off the Korean Peninsula, which could coincide with President Trump’s visit to South Korea, Japan, and China next month. The joint drills, the first in 10 years, are possible because of a rare confluence of carrier deployment schedules, according to the Pentagon.
The USS Ronald Reagan is based in Japan. On Tuesday, the Navy announced that the USS Theodore Roosevelt Carrier Strike Group had entered 7th Fleet, followed by the USS Nimitz Carrier Strike Group on Wednesday. Nimitz is on its way back to Washington state from a deployment to the Middle East, during which time it’ll operate in 7th Fleet, which covers the eastern half of the Indian Ocean and the Western Pacific.
The Pentagon has said the massing of three carriers in the waters off the peninsula is not a response to the rising tension with the North over its nuclear and missile programs. But the Navy said the ships would be available to take part in any real-world contingencies.
On Friday, Kim Jong-Un restarted the war of words when he said the U.S. is making “criminal moves for igniting a war of aggression,” according to the North’s state-run media.
In the meantime, many analyst believe Pyongyang has ambitions to launch at least one more intercontinental ballistic missile (ICBM) test in the near term, while a senior diplomat from Pyongyang warnedThursday that a possible atmospheric nuclear test over the Pacific Ocean should be taken “literally”; such a move would be viewed by parts of the U.S. government as an “attack on the homeland.”
NK News author and ‘multiple sources’ had no further details on the drills or exercises, except for the understand of geographical locations.
But while such evacuation drills – precise details of which were not provided by sources – may be prudent as far as helping save lives in the event of bombing campaigns in affected areas, blackout exercises have much more limited utility in the contemporary military environment.
The North Korean activities suggests the country is preparing for a kinetic US-response if a nuclear test and or an ICBM missile is launched.
Separately, as as reported previously next week, the Pentagon will conduct a nationwide blackout drill in the United States on November 04-06. Explained by Army MARS Program Manager Paul English, “This exercise will begin with a national massive coronal mass ejection event which will impact the national power grid as well as all forms of traditional communication, including landline telephone, cellphone, satellite, and Internet connectivity.”
Curiously, a drill for a coronal mass ejection (CME) is, according to experts, very similar to an electromagnetic pulse (EMP). Just yesterday, Business Insider titled an article: Here’s what would happen if North Korea hit the US with an EMP. Excerpts form article:
- Experts recently told Congress that a North Korean electromagnetic-pulse attack on the US could wipe out 90% of the population.
- EMP attacks are unproven, and the academic community finds this claim ridiculous.
- Even if North Korea did pull off the attack, it wouldn’t hurt the US’s nuclear systems that are hardened against EMPs.
Earthsky.org provides an easy understanding of what is a cornoal mass ejection (CME): “A CME can launch a billion tons of plasma from the sun’s surface into space, at speeds of over a million miles per hour. Every so often, the sun burps. But, unlike myself, when the sun burps, it does so with the power of 20 million nuclear bombs. These hiccups are known as coronal mass ejections (CMEs)—powerful eruptions near the surface of the sun driven by kinks in the solar magnetic field. The resulting shocks ripple through the solar system and can interrupt satellites and power grids on Earth.”
The similarities between the CME and EMP are strikingly similar and could provide clarity of how the US is actively preparing for an EMP via a North Korean delivery with the “cover” of CME.
“This Is A Big Problem” – North Korea Nuclear Test Site Headed For A Devastating Collapse
A group of Chinese scientists have joined their North American peers in warning that North Korea’s Punggye-ri nuclear site could be on the verge of a dangerous collapse that could send a dangerous bloom of radiation floating over the border into Northern China.
As we’ve previously reported, China has stepped up its radiation monitoring on the border after detecting unsettling seismic activity surrounding the test site. Two weeks ago, a team of American scientists warned that the mountain above Pyungge-ri appeared to be suffering from “tired mountain syndrome” – a phenomenon commonly observed around Soviet Nuclear test sites.
And now in an effort to dissuade the North from carrying out another potentially destabilizing test, the South China Morning Post is reporting that a team of Chinese geologists warned their North Korean counterparts of a potentially catastrophic collapse of an underground nuclear test site on China’s doorstep during a briefing in Beijing last month.
A day after North Korea said it detonated a hydrogen bomb at the Punggye-ri facility on Sept. 3, a senior Chinese nuclear scientist warned North Korea that future tests could blow the top off the mountain, causing a massive collapse with radiation bleeding from cracks or holes in the mountainside.
Meanwhile, a researcher studying the radioactive risk from the North Korean nuclear programme at Peking University said China could no longer tolerate another land-based explosion.
“China cannot sit and wait until the site implodes. Our instruments can detect nuclear fallout when it arrives, but it will be too late by then. There will be public panic and anger at the government for not taking action,” the researcher said.
“Maybe the North Koreans themselves have realised that the site cannot take another blow. If they still want to do it, they have to do it somewhere else.”
This could be one reason why the North hasn’t moved forward with another test, like it has repeatedly threatened to do, since then, even as North Korean Foreign Minister Ri Yong-ho announced at the United Nations that Pyongyang might consider detonating a “most powerful” hydrogen bomb over the Pacific Ocean.
The Sept. 20 briefing covered a range of issues but North Korea’s nuclear tests topped the concerns for the Chinese government, according to Zhai Mingguo, a senior Chinese geologist who helped organise the meeting.
“This is a big, sophisticated problem requiring multiple, systematic approaches. Our [meeting] is only a part of [the efforts],” he said.
The North Korea delegation was headed by Lee Doh-sik, director of the Geological Research Institute at the State Academy of Sciences.
“He is a top government geologist in North Korea, but he is not involved in the nuclear weapons programme,” said Professor Peng Peng, one of the Chinese geologists who met the delegation.
The atmosphere was reserved but friendly, according to several scientists who attended the meeting.
North Korea has conducted five of the six nuclear tests it has carried out since 2006 at Punggye-ri. The most recent blast set off low level tremors and dangerous landslides that alarmed scientists observing the site.
Should the mountain collapse, the radiation released could threaten the entire hemisphere. It could even become a global threat.
“The fallout can spread to an entire hemisphere,” said Lan Xiaoqing, an associate researcher at the Centre for Monsoon System Research at the Institute of Atmospheric Physics in Beijing.
3b) REPORT ON JAPAN
3C. CHINA REPORT.
China stocks and bonds tumble as soon as the National Congress ends. The Chinese yield curve is now inverted signifying that China’s economy has slowed down considerably.
“Daggers Are Falling From The Sky” – China Stocks, Bonds Tumble After National Congress Ends
Who could have seen this coming?
After weeks of ‘calm’ – demanded by The People’s Party – and well-managed ‘National Team’ ramps top ‘prove’ how much Xi’s plan for the nesxt five years is being received, the end of China’s National Congress has been met with… a plunge in stock and bond markets.
This is the biggest drop in the Chinese market in 11 weeks…
But it’s not just stocks. The Chinese bond market is getting slammed…
China 10Y yield is up 6 days in a row (the biggest surge in rates since May) to their highest since Oct 2014…
With the Chinese yield curve now inverted for 10 straight days – the longest period of inversion ever...
As Bloomberg reports, the situation that’s existed for most of 2017 – sovereign yields rising, and corporate debt remaining relatively resilient – is at risk of cracking. As appetite for bonds of any kind dwindles and authorities roll out measures that target higher-risk investments, company securities are in the line of fire.
Now that the Communist Party Congress is over, China’s bond holders may be about to get hit by “daggers falling from the sky,” said Huachuang Securities Co., referring to aggressive deleveraging policies.
“It’s very likely we will see a significant increase in corporate yields in the coming year,” said David Qu, a market economist at Australia & New Zealand Banking Group Ltd. in Shanghai.
“The trigger could be tougher regulations or a default. A majority of non-bank financial institutions’ debt holdings are corporate bonds, so their selloff can lead to severe consequences. Banks are underestimating authorities’ intentions to tighten regulations.”
“The deleveraging campaign hasn’t even gone half way, and the risk of banks redeeming entrusted funds could surface at the end of this year,” said Qin Han, chief bond analyst at Guotai Junan Securities Co. in Shanghai.
“The chance of a selloff in corporate bonds is increasing, which will result in a widening of their yield premium over sovereign notes.”
But this is far from over, as we noted earlier, the end of China’s National Congres is also ushering in the end of ‘coordinated global growth’…
As Citi writes, “China’s Party Congress has concluded and Xi Jinping’s position as President has been consolidated. Given there are no standing committee members in their 50s, it suggests there are no apparent heirs for Mr. Xi, opening the door for him to stay on beyond 2022. One of the key questions in the run up to the congress was that once power was consolidated, would China accelerate its economic reforms. We think this is unlikely but do expect a moderation of growth, with data momentum perhaps set to continue to slow at its current pace. Note how China’s MCI tends to lead Citi’s macro data index for China and our MCI is still tightening.”
It gets worse.
As Capital Economics writes in its China Activity Monitor note this week, the firm’s China Activity Proxy (CAP) suggests that growth in China slowed last month to the weakest pace in a year and with property sales cooling and officials continuing their efforts to rein in financial risks, Cap Econ thinks that looking ahead “the economy will slow further over the coming quarters.”
CapEco’s ominous conclusion:
Looking ahead, we think growth will continue to slow over the coming quarters. The current props to growth appear shaky. With investment contracting in real terms, industrial output will probably soften over the months ahead. Property sales also look set to weaken further as the government’s purchase curbs continue to expand. This will weigh on construction before long. More generally, with tighter monetary conditions weighing on credit growth, activity looks set to weaken further.
That the past 18 months of coordinated global growth will end in China, is quite symmetric: back in January 2016, as global markets were tumbling, aborting the Fed’s plans to hike rates 4 times in 2016 and resulting in sharp economic slowdowns around the globe, it was the (still mysterious) Shanghai Accord that “saved” the world, and unleashed a burst of unprecedented, and coordinated, growth… which only cost China some $8 trillion in debt.
It will only make sense that another major Chinese event will mark the top of this economic mini cycle, and lead to the next global downturn, not to mention spike in market volatility.
Spain fires the entire Catalan government and then calls for snap elections in total retaliation for the independence vote
The Catalan leader urges a “peaceful” rebellion as Spain takes over the government of Catalonia
Catalan Leader Urges “Peaceful” Rebellion As Spain Takes Over Government
Update (0920ET): A Spanish government spokesman has responded to Puigdemont’s address, saying that “Spain will not comment on comments by Puigdemont who is out of a job.”
* * *
As we detailed earlier, in a pre-record message this morning, Catalan separtist leader Carles Puigdemont urged Catalans to peacefully oppose Spain’s formal takeover of the region’s affairs.
Puigdemont said the activation of article 155 of the Spanish Constitution was illegitimate and called on Catalans to show “patience, perseverance” and faith in the future, and urged “democratic opposition” against Spanish government orders to sack his administration and dismiss the regional parliament.
As The Spain Report notes, he announced he Catalans must “continue defending” their new republic “with a sense of civic responsibility,” adding “our will is to continue working to guarantee our democratic mandate”.
The use of Article 155 to suspend home rule in Catalonia was a “premeditated attack on the majority will of Catalans” and “contrary” to democracy.
Puigdemont also called on pro-independence Catalans to be respectful of fellow Catalans who are in favor of Catalonia remaining within Spain. Puigdemont didn’t mention central government orders to remove him.
Presumably, Puigdemont’s calls suggest a strategy designed to compare Madrid’s forcefulness to Catalan’s peaceful protest, perhaps in an effort to garner more international favor – as most of the ‘developed’ nations issued statements overnight declining to reecognize Catalonia and fully backing the establishment’s Spanish government.
Live broadcasts showed Puigdemont in a bar in the town of Girona at the time of the televised speech.
Puigdemont declined to speak to reporters when he left the bar shortly after the speech.
Meanwhile, Spain begins implementation of Article 155:
Spanish Deputy Prime Minister Soraya Saenz de Santamaria takes over the management of the Catalonia area after Madrid took its autonomous status yesterday and Prime Minister Mariano Rajoy fired the regional government, the agencies said, reports sega.
Spain’s Interior Minister Juan Ignacio Zoido is leading the Catalonian police after the chief of police, Jose Luis Trapero, was removed. Both decisions enter into force immediately.
However, La Vanguardia reports, members of the Catalan government don’t plan to accept being removed, citing sources it doesn’t name, though oit is unclear exactly what they will do. The Catalan government is reportedly preparing next steps in line with proclamation approved yesterday by the regional Parliament. Among the possibilities being weighed is calling constituent elections before the end of the year.
So what happens next?
1. Madrid ignores the implementation of the declaration of independence
In many ways, it seems counter-intuitive to list this as the ‘most peaceful short term option’, not least because there is ostensibly no bigger insult to a peoples than to simply ignore their declaration of independence. This is ironically, not necessarily the case with Catalonia.
The very reason that Catalan independence was not declared on the 2nd of October is because the Catalan leadership are very moderate in their approach to the issue. Forgetting whether one finds the Catalan leaders inspiring or incipient, the fact of the matter is that they did not so much say “give me liberty or give me death” as they said “give me European values and give me those values on my terms at the soonest possible date after a period of polite discussions”.
Because Catalonia has shown the propensity to wait for a good faith negotiation partner during a very trying month and because furthermore, many Catalan politicians have insisted that they seek peace and cooperation whenever possible, the onus therefore is now very much on Madrid to de-escalate the situation.
Madrid could still go through with the technical firing of the Catalan government in order to administer the humdrum business of daily life in Catalonia for an interim period on their terms, but if Madrid were to officially adopt a position of ignoring the formal independence vote, it could still negotiate with independence leaders in another capacity.
The west, including Spain, continually speaks of ‘moderate rebels’ in places throughout the world, notably Syria, in spite of the fact that they are acting violently, using terrorism as their de-facto means of ‘political expression’, are mostly foreign proxies and are violating not only national but international law. With the exception of Catalonia violating Spanish law, included the much hated 1978 Spanish constitution, which many see as overtly Francoist in nature, none of this applies to Catalonia.
No one can reasonably say that Catalan independence supporters or their leaders are terrorists or post a direct threat to world peace as al-Qaeda, the FSA, Kurdish ethno-nationalists and ISIS do in places like Syria or Iraq. Furthermore, unlike Middle Eastern Kurds who are something of Israel’s de-facto regional puppets, Catalan independence movements have been part of Iberian history going back centuries. The Catalan struggle, in other-words, predates the creation of the dastardly Israeli colonial state, the birth of George Soros, the idea of the New World Order and the advent of neo-liberal economics. To therefore say that Catalan independence is about any of these things, as many have, fails to realise the long historical basis which underlies recent events in Catalonia.
Because of this, Madrid has nothing to lose, yet much to gain from engaging in negotiations with the leaders of the independence movement. Had Madrid negotiated directly with the leaders in Barcelona, the entire independence movement may have fizzled-out over time, in the same way that Brexit appears to be doing in another EU state, or otherwise, Madrid could have agreed to a situation whereby Catalonia settles on an Andorra like solution whereby Catalonia becomes a state formally protected by Spain (as Andorra is technically protected by France), while technically enjoying the desired benefits of EU membership which logically derive from the ‘protector’ state. Because of Catalonia’s size vis-a-vis Andorra, some sort of financial agreement could be agreed upon on a per annum basis.
Such a solution would require creativity, but crucially it requires no blood and could be arranged to create face-saving and money saving measures that cover both sides in terms of economic, political and even ego driven requirements and desires. It is still not too late to achieve this as the “slowly-slowly” attitude in Barcelona has not dramatically changed, in spite of recent dramatic events. In this sense, yesterday’s vote was more of a sign that Barcelona is not bluffing, that it is a sign that Madrid is now an automatic enemy of the largely unrecognised new Catalan Republic.
2. Barcelona initiates a dialogue process….and it works
It must be re-stated that one of the reasons Catalonia implemented a declaration of independence yesterday was because it felt it had no option to do anything else. If Catalonia’s leaders did nothing while Madrid moved to abolish their autonomy, they would have looked weak before the eyes of their constituents and ineffective in the eyes of the world from which they will need to garner support, in one way or another.
Thus, we now know that Catalonia’s leaders have the collective strength to do what they said they would do. But can they now do something more difficult? Can they offer the wider world an option that cannot be refused?
Catalonia has gone out of its way to do that which, for example, the Kurds in the Middle East have not done. While Kurds have resorted to armed conflict and terrorism in their disregard for both national and international law, Catalans have practised entirely peaceful civil disobedience in arguable violation of national law, but in full compliance with EU law which is theoretically superior to national law in many cases, among member states.
The fact that Catalans are being totally disregarded by most EU states and the EU itself, is symptomatic of double-standards in the west, whereby an armed terrorist in Asia or Africa is a ‘freedom fighter’, but peaceful individuals initiating a controversial but totally non-violent political process in the west, are somehow bandits. Furthermore, Catalonia is a regional crisis and for the EU, an existential crisis. Such a reality is miles away from the very real security crisis that Turkey, Syria and Iran felt when Iraqi Kurds, machine guns in hand, voted in a secession referendum which went beyond their legally defined autonomous borders within Iraq. Again, none of this applies to Catalonia.
If followed to its logical conclusion, Catalonia can now call on international mediators to instigate a process for dialogue that Madrid simply could not ignore. If such a process fails, it will represent a total failure of the so-called international community. If not a single nation, not the UN, not a former UN Secretary General, not a single peace activist can step forward and heed Catalonia’s calls for a truly international dialogue process to be organised, then there truly is no international community to speak of. It certainly behoves Catalonia to attempt and find out.
3. Duelling governments in Barcelona
Madrid is set to appoint a new interim leadership in Barcelona who will answer directly to the Spanish government, while calling for new elections to form a Catalan parliament in December. The effectiveness of such a move depends on the de-facto current leaders in Barcelona (Puigdemont et al.) and their supporters simply going away quietly.
If anyone thinks it is likely that after a long standoff which was capped by the declaration of a Catalan Republic will end the moment Spanish PM Mariano Rajoy sends ‘his man’ to Barcelona, then they are not living in the real world.
With two competing governments in Barcelona, the short term confusion and deadlock could lead to disaster, as shall be explored in the following two, very un-peaceful possibilities.
4. Mass arrests of Catalan independence leaders
Spain has already set a worrying precedent by arresting Catalan independence organisers on sedition charges. There are now open fears that such a precedent could now lead to the arrest of the entire de-facto leadership in Barcelona, as well as many members of the Catalan parliament (even though the vote for independence was conducted via secret ballot).
This would not only set-off an uncontrollable chain reaction of fear and almost certainly violence in Catalonia and beyond, but would set off a chain of lawsuits which would test the primacy of national law versus EU and international law. If Madrid were to invoke the most neo-Francoist elements of its constitution and subsequently conduct mass arrests reminiscent of the 1930s, it would not only embolden more Catalans than ever in their desire to breakaway from Spain permanently, but it will be guaranteed to keep both the European Court of Human Rights and the European Court of Justice busy for years if not decades to come.
The legal issues which currently exist, could and should be solved through mediation followed by an accord. However, if mass arrests of prominent Catalan leaders are conducted by Spain, a larger legal Pandora’s Box would be flung open and more importantly, any claim of a peaceful regional dispute would be forever lost. Instead, it would be a repeat of the 1930s in more ways than one, combined with the legal labyrinth of 21st century judicial mechanisms.
5. Civil War
Depending of various push-pull factors at play, a repeat, however microcosmic, of the 1930s Spanish Civil War could take place. If Madrid cracks down hard on political leaders, demonstrators and other civil bodies in Catalonia, it is possible that Catalans could find the means to arm themselves and fight back.
If an armed struggle took place in the heart of the EU, not only would it quite possibly be the end of Spain and western Europe as we know it, but it could be the end of the EU…full stop.
Whatever would be leftover, would by definition be unrecognisable and only a great deal of effort to put the region back together could restore peace.
For mercenary thinkers who see questions of war and peace simply in economic terms, it is worth saying this: for the moment, the Catalan crisis has not drastically impacted global markets. If things escalate into an armed civil conflict, it will impact markets, but primarily in Europe with some ricochets in North America. The rest of the world will remain financially stable.
This will be the ultimate sign that an Iberian peninsula which once ruled large quarters of the world, is now reduced to a corner of a European Union that far from leading the world, can now, barely lead itself.
In many ways, this will be the ultimate wake-up call.
Puigdemont Seeks Asylum In Belgium After Spain Files Charges Against Catalan Government For Rebellion
Update: As we warned earlier, La Sexta has just reported that (former) Catalan leader Carles Puigdemont will seek asylum in Belgium.
According to eldiario.es, Puigdemont has made the decision to travel to Brussels advised by a legal team that recommends him to remain in that country.
The movement of the former Catalan president intends to internationalize the judicial decisions and to force the Belgian justice to position itself on the possible emission of a euro order of detention by Spain. In addition, the expresident and the exconsellers that accompany him raise the possibility of requesting political asylum in that country.
* * *
As we detailed earlier, Spain’s Director of Public Prosecutions, Jose Manuel Maza, made a short statement this morning as he filed a suit against former Catalonian leader, Carles Puigdemont and his colleagues, accusing them of “rebellion, sedition and misuse of public funds”. In total, charges have been made against 20 people, 14 of them former members of the Catalan and six of them members of the Speaker’s Committee in the Catalan Parliament (which facilitated the declaration of independence).
Below is the front page of the document which details the charges, courtesy of the twitter account of The Spain Report.
First page of public prosecutor’s accusation against entire former Catalan government at National High Court in Madrid. pic.twitter.com/Lg2f95zjZz
- Accusations to be rebellion, sedition and misuse of public funds. All very serious crimes under Spanish Criminal Code 1995.
- Charges to be against all members of former Catalan government and members of Catalan Parliament Speaker’s Committee.
- So Puigdemont, Junqueras, Romeva, Turull, etc. (regional got) and Forcadell (Speaker, parliament).
- Accusations against Puigdemont, Junqueras, etc. going to National High Court. Having been sacked, they no longer enjoy special privilege.
- Accusations against Forcadell and Speaker’s Committee going to Supreme Court. They still enjoy special privilege until new elections.
- No word on remand petition yet. Prosecutor will wait until first court appearances to decide.
If found guilty, the charges of rebellion, sedition and misuse of public funds carry prison terms of up to 30, 15 and 6 years, respectively, under Spanish law.
Prior to the Public Prosecutor’s move, events in Catalonia had got off to a subdued start on the first day of the new working week. Only one Catalonian government official, Josep Rull, turned up for work, posting a photo of himself online via his Twitter account.
Rull, who is responsible for territory and sustainability, tweeted that he was in his office… “exercising responsibilities entrusted by Catalan people”.
According to La Vanguardia, two members of the Catalan police force visited Rull and informed him that he could be arrested. Spain’s Interior Minister, Juan Ignacio Zoido, urged Rull not to lead Catalonian officials “to the cliff edge.”
He subsequently departed. The newspaper also reported that accused Catalan Parliament Speaker, Carme Forcadell, cancelled a meeting of the group which organizes the Catalan Parliament’s daily agenda. The meeting had been scheduled for 10a.m. tomorrow.
Meanwhile, AP reports that one of the Catalan separatist parties is already drawing up plans for the upcoming regional elections.
A spokesman for a Catalan separatist party ousted from the regional government for pushing ahead with an independence bid has confirmed plans for the party to run in an upcoming regional election. Lawmakers of the Catalan Republic Left, or ERC, party, and their ruling coalition partners, passed a unilateral declaration of independence from Spain on Friday with the support of other separatist legislators. Making use of extraordinary powers, the Spanish government has fired the Catalan government, dissolved the regional parliament and called an election for Dec. 21. ERC party spokesman Sergi Sabria told reporters after a meeting of the party leadership that “we will find the way to participate on Dec. 21. Dec. 21 can be one more opportunity to consolidate the republic.”
As the news of the prosecutions was breaking, The Spain Report noted on its Twitter account that El Periodico de Catalunya, a Barcelona daily newspaper, reports that Carles Puigdemont is in Brussels.
MAJOR BREAKING: Puigdemont Has Gone To Brussels https://www.thespainreport.com/articles/1253-171030134602-puigdemont-has-gone-to-brussels …
MAJOR BREAKING: La Vanguardia reports Pugidemont in Brussels with “members of the dismissed Catalan government”.https://www.thespainreport.com/articles/1253-171030134602-puigdemont-has-gone-to-brussels …
Puigdemont Has Gone To Brussels
La Vanguardia reports several members of former Catalan government in Belgium.
Yesterday, The Brussels Times reported that Puigdemont could seek asylum in Belgium.
Carles Puigdemont, the former Catalonian President, could seek asylum in Belgium, the State Secretary for Asylum and Immigration Theo Francken has told VTM Nieuws. “No request has been submitted yet, but things change quickly. We’ll see what happens in the next few hours or days”, the State Secretary told VRT. The Spanish government has threatened to charge Mr Puigdemont because the regional Parliament voted for a unilateral independence resolution on Friday. A few days ago, Carles Puigdemont implied that it was possible he would seek asylum in a European country via an embassy. Belgium would be his preference.
Draghi’s mouth does it again: European bond yields are crashing as he continues with QE until Sept 2018
(courtesy zero hedge)
5. RUSSIA AND MIDDLE EASTERN AFFAIRS
The following is a must read as it verifies what we have been telling you for the past few years that Qatar, Saudi Arabia, Egypt and Turkey under the leadership of the USA were behind the initial attacks that started the civil war in Syria.
In Shocking, Viral Interview, Qatar Confesses Secrets Behind Syrian War
A television interview of a top Qatari official confessing the truth behind the origins of the war in Syria is going viral across Arabic social media during the same week a leaked top secret NSA document was published which confirms that the armed opposition in Syria was under the direct command of foreign governments from the early years of the conflict.
And according to a well-known Syria analyst and economic adviser with close contacts in the Syrian government, the explosive interview constitutes a high level “public admission to collusion and coordination between four countries to destabilize an independent state, [including] possible support for Nusra/al-Qaeda.” Importantly, “this admission will help build case for what Damascus sees as an attack on its security & sovereignty. It will form basis for compensation claims.”
A 2013 London press conference: Qatari Prime Minister Sheikh Hamad bin Jassim bin Jabr Al Thani with U.S. Secretary of State John Kerry. A 2014 Hillary Clinton email confirmed Qatar as a state-sponsor of ISIS during that same time period.
As the war in Syria continues slowly winding down, it seems new source material comes out on an almost a weekly basis in the form of testimonials of top officials involved in destabilizing Syria, and even occasional leaked emails and documents which further detail covert regime change operations against the Assad government. Though much of this content serves to confirm what has already long been known by those who have never accepted the simplistic propaganda which has dominated mainstream media, details continue to fall in place, providing future historians with a clearer picture of the true nature of the war.
This process of clarity has been aided – as predicted – by the continued infighting among Gulf Cooperation Council (GCC) former allies Saudi Arabia and Qatar, with each side accusing the other of funding Islamic State and al-Qaeda terrorists (ironically, both true). Increasingly, the world watches as more dirty laundry is aired and the GCC implodes after years of nearly all the gulf monarchies funding jihadist movements in places like Syria, Iraq, and Libya.
Since 2013 The Intercept (+WaPo?) hid NSA docs showing Saudi ordering ‘rebel’ attacks on Damascus. Now released. https://theintercept.com/2017/10/24/syria-rebels-nsa-saudi-prince-assad/ …
NSA Document Says Saudi Prince Directly Ordered Coordinated Attack By Syrian Rebels On Damascus
“Light up Damascus,” the Saudi prince told Syrian rebels, as they grew increasingly reliant on foreign support.
The top Qatari official is no less than former Prime Minister Hamad bin Jassim bin Jaber al-Thani, who oversaw Syria operations on behalf of Qatar until 2013 (also as foreign minister), and is seen below with then-Secretary of State Hillary Clinton in this Jan. 2010 photo (as a reminder, Qatar’s 2022 World Cup Committee donated $500,000 to the Clinton Foundation in 2014).
In an interview with Qatari TV Wednesday, bin Jaber al-Thani revealed that his country, alongside Saudi Arabia, Turkey, and the United States, began shipping weapons to jihadists from the very moment events “first started” (in 2011).
Al-Thani even likened the covert operation to “hunting prey” – the prey being President Assad and his supporters – “prey” which he admits got away (as Assad is still in power; he used a Gulf Arabic dialect word, “al-sayda”, which implies hunting animals or prey for sport). Though Thani denied credible allegations of support for ISIS, the former prime minister’s words implied direct Gulf and US support for al-Qaeda in Syria (al-Nusra Front) from the earliest years of the war, and even said Qatar has “full documents” and recordsproving that the war was planned to effect regime change.
“We argued over the prey and that prey run away”.Ladies and Gentleman: To these people #Syria#Assad was nothing but a f….ing hunting game https://twitter.com/walid970721/status/923825448324345858 …
According to Zero Hedge’s translation, al-Thani said while acknowledging Gulf nations were arming jihadists in Syria with the approval and support of US and Turkey: “I don’t want to go into details but we have full documents about us taking charge [in Syria].” He claimed that both Saudi Arabia’s King Abdullah (who reigned until his death in 2015) and the United States placed Qatar in a lead role concerning covert operations to execute the proxy war.
The former prime minister’s comments, while very revealing, were intended as a defense and excuse of Qatar’s support for terrorism, and as a critique of the US and Saudi Arabia for essentially leaving Qatar “holding the bag” in terms of the war against Assad. Al-Thani explained that Qatar continued its financing of armed insurgents in Syria while other countries eventually wound down large-scale support, which is why he lashed out at the US and the Saudis, who initially “were with us in the same trench.”
In a previous US television interview which was vastly underreported, al-Thani told Charlie Rose when asked about allegations of Qatar’s support for terrorism that, “in Syria, everybody did mistakes, including your country.” And said that when the war began in Syria, “all of use worked through two operation rooms: one in Jordan and one in Turkey.”
Below is the key section of Wednesday’s interview, translated and subtitled by @Walid970721. Zero Hedge has reviewed and confirmed the translation, however, as the original rush translator has acknowledged, al-Thani doesn’t say “lady” but “prey” [“al-sayda”]- as in both Assad and Syrians were being hunted by the outside countries.
The partial English transcript is as follows:
“When the events first started in Syria I went to Saudi Arabia and met with King Abdullah. I did that on the instructions of his highness the prince, my father. He [Abdullah] said we are behind you. You go ahead with this plan and we will coordinate but you should be in charge. I won’t get into details but we have full documents and anything that was sent [to Syria] would go to Turkey and was in coordination with the US forces and everything was distributed via the Turks and the US forces. And us and everyone else was involved, the military people. There may have been mistakes and support was given to the wrong faction… Maybe there was a relationship with Nusra, its possible but I myself don’t know about this… we were fighting over the prey [“al-sayda”] and now the prey is gone and we are still fighting… and now Bashar is still there. You [US and Saudi Arabia] were with us in the same trench… I have no objection to one changing if he finds that he was wrong, but at least inform your partner… for example leave Bashar [al-Assad] or do this or that, but the situation that has been created now will never allow any progress in the GCC [Gulf Cooperation Council], or any progress on anything if we continue to openly fight.”
As is now well-known, the CIA was directly involved in leading regime change efforts in Syria with allied gulf partners, as leaked and declassified US intelligence memos confirm. The US government understood in real time that Gulf and West-supplied advanced weaponry was going to al-Qaeda and ISIS, despite official claims of arming so-called “moderate” rebels. For example, a leaked 2014 intelligence memo sent to Hillary Clinton acknowledged Qatari and Saudi support for ISIS.
The email stated in direct and unambiguous language that:
“the governments of Qatar and Saudi Arabia, which are providing clandestine financial and logistic support to ISIL and other radical Sunni groups in the region.”
Furthermore, one day before Prime Minister Thani’s interview, The Intercept released a new top-secret NSA document unearthed from leaked intelligence files provided by Edward Snowden which show in stunning clarity that the armed opposition in Syria was under the direct command of foreign governments from the early years of the war which has now claimed half a million lives.
The newly released NSA document confirms that a 2013 insurgent attack with advanced surface-to-surface rockets upon civilian areas of Damascus, including Damascus International Airport, was directly supplied and commanded by Saudi Arabia with full prior awareness of US intelligence. As the former Qatari prime minister now also confirms, both the Saudis and US government staffed “operations rooms” overseeing such heinous attacks during the time period of the 2013 Damascus airport attack.
No doubt there remains a massive trove of damning documentary evidence which will continue to trickle out in the coming months and years. At the very least, the continuing Qatari-Saudi diplomatic war will bear more fruit as each side builds a case against the other with charges of supporting terrorism. And as we can see from this latest Qatari TV interview, the United States itself will not be spared in this new open season of airing dirty laundry as old allies turn on each other.
The Kurdish President announces his resignation. However supporters of independence storm the Parliament with knives and guns
As Kurdish President Announces Resignation, Supporters Storm Parliament With Knives And Guns
Iraqi Kurdish leader Masoud Barzani announced his resignation Sunday after the biggest gamble of his 12 years as president of the Kurdistan Regional Government (KRG) not only failed, but utterly backfired as territorial reversals reduced KRG power to its weakest position in decades. Though his push for an independence referendum had overwhelming support among Iraq’s Kurds, and with even the encouragement of some external allies, the decisive military response by the Iraqi national government resulted in rapid forced handover of Kurdish-held oil rich areas and a return to pre-2014 borders, prior to the blitz by ISIS which aided Kurdish political expansion. Barzani will step down effective November 1.
And now the future of the KRG is itself under threat as reports of inter-Kurdish fighting emerged Sunday night. Multiple international reports characterized Barzani’s speech as “bitter” and it further appears that violence erupted during or after his televised speech before parliament. During the speech Barzani proclaimed that, “three million votes for Kurdistan independence created history and cannot be erased” while also denouncing rivals who abandoned the fight for Kirkuk as committing “high treason.”
His supporters, angry at what is essentially a forced resignation after rival Kurdish factions failed to oppose Iraqi national forces as they advanced in Kirkuk and other areas earlier this month, reportedly stormed parliament brandishing knives sticks, and guns. There are also unverified reports emerging that opposition party members were attacked during the chaos, as well as arson attacks on opposition offices in various parts of Erbil.
According to a statement described as an “urgent message” to the international community from the Speaker of Kurdistan Parliament, Yousif Mohammed Sadiq, we could be witnessing the start of a broader breakdown in security in Erbil: “We are gravely concerned about the attack on Kurdistan Parliament Building today by a number of rioters with utter disregard for all human values and at the encouragement of a political party without any attempt by the security forces to prevent them.”
Barzani supporters storm Iraqi Kurdish parliament as he announces his resignation. There were reports of wounded among Erbil opposition politicians and some media staff on Sunday.
Barzani supporters blame the recent disastrous KRG territorial losses on the Kurdish opposition party PUK, whose fighters generally allowed the previous advance of Iraqi forces after Baghdad ordered the pacification of Kirkuk city. The PUK has admitted that it reached agreement with the Iraqi military even as fighters representing Barzani’s Kuristan Democratic Party (KDP) continued to battle. For this reason the KDP Peshmerga accused PUK factions which refused to fight of “plotting” against the Kurds and committing “a great and historic treason.”
For the Kurds, the non-existent to lukewarm support for the referendum among international powers was the latest (and perhaps greatest) in a long list of historic betrayals. According to Kamal Alam, a Middle East analyst for the Royal United Services Institute the Kurds “overstretched and one cannot help but feel sorry for them” as they were effective fighters against ISIS after the Iraqi army all but disappeared from some parts of the country.
Alam told BBC World Service radio in an interview late last week, “But they were warned not to do this referendum by both Baghdad and Turkey and they were hoping to capitalize on the disagreements between Ankara and Baghdad, but it seems the referendum brought both the two capitals together to work against Kurdish dominance.” And he added “they thought that a hundred year wrong which had been done to them would be corrected and they were perhaps given some assurances in some Western capitals that this time we won’t let you down – you saw loads of Western officials say it and write about it… they have been let down again and now they’ll have to just stay with what they have.”
As the Iraqi Kurdish independence project has now resulted in failure, it will be interesting to see how this impacts developments in Syrian Kurdish areas across the Iraqi and Turkish borders – no doubt the example of Iraq has now provided further incentive for the Syrian Democratic Forces (SDF, whose core component is the Kurdish YPG) to go to the negotiating table with Syria and Russia, in the hope of retaining some kind of autonomous or federalized union with Damascus, as opposed to all-out war, which would result in being squeezed by Turkey from the north and Damascus from the south.
Iran over the weekend stated that they rejected Trump’s push for a secret face to face meeting at the U.N. The USA rejected the story but if true this would seem to week the USA in the eyes of the world
Iran: We Rejected Trump’s Push For A Secret Face To Face Meeting
The White House has denied reports that President Trump requested an unprecedented face-to-face meeting with Iranian President Hassan Rouhani on the sidelines of the United Nations General Assembly in September.
On Sunday the Associated Press reported the claim of Iran’s foreign ministry, initially issued through Iranian state television, that the White House approached the Iranian delegation with a request for the meeting. The meeting request was said to have been made a day after Trump gave a fiery speech before the UN assembly which included denouncing Iran as a state-sponsor of terror and a “corrupt dictatorship” which spreads violence across the Middle East – a speech which many saw as a closer step toward the unraveling of the Iranian nuclear deal brokered under Obama.
Though the two heads of state haven’t communicated directly since 2013, when then President Obama spoke to Rouhani by telephone, which provoked a reaction by Iranian hardliners, Iranian foreign ministry spokesman Bahram Ghasemi said over the weekend that, “a request indeed was made by the U.S. side but it wasn’t accepted by President Rouhani.”
Soon after reports of the rebuffed meeting were circulated, the White House told The Hill that the Iranian official’s account “is false” while not elaborating further. If Iran’s account of the events are true, it would put the Trump White House in a highly embarrassing position of weakness regarding it’s tough stance on the nuclear deal – Trump has been aggressively critical of the deal, yet has stopped short of taking concrete steps to pull the plug altogether.
However, last week Congress passed a series of bills which took aim at Iran’s ballistic missile program, which critics point out was never part of the deal to begin with, apparently in a move to undermine the deal. On Wednesday and Thursday of last week Congress also took aim at both Iran’s elite Revolutionary Guard Corps and Lebanese Hezbollah – long seen as a proxy arm of Shiite Iran – through the The Iran Ballistic Missiles and Sanctions Enforcement Act and the Hezbollah International Financing Prevention Amendments Act.
But while the US has made moves to undermine the 2015 nuclear deal, Europe has largely stuck by Iran while to some degree isolating Trump over what European partners perceive as attempts to weaken and back out of the agreement – the international powers backing the deal include the United Kingdom, France, Russia, China, and Germany. Rumors that France’s Emmanuel Macron had been attempting to mediate between the US and Iran were denied by Iran’s foreign ministry on Sunday, according to Bloomberg.
Meanwhile, Tehran has repeatedly affirmed its position that the existing terms of the JCPOA (Joint Comprehensive Plan of Action, or the nuclear deal) are non-negotiable, and reiterated to the UN’s International Atomic Energy Agency over the weekend that it would continue to comply with the terms of the deal and wouldn’t be the first to abandon it, perhaps in a subtle passing reference to the United States.
Iran’s Rouhani previously warned, prior to Trump’s UN speech, that US abandonment of the deal would come at a “high cost” to Washington. And Rouhani’s own September speech before the UN assembly included a fierce reaction to Trump’s address, calling Trump a “rogue newcomer” bringing “ugly, ignorant words”.
But the fact that Iran chose to make public it’s version of events over the weekend – that it rejected a secret face-to-face dialogue with Trump – at the very least shows that Iran feels increasingly confident it has the backing of other world powers that are part of the deal. The information is most certainly designed to make the US administration look bad as Rouhani may be calling Trump’s bluff.
Trump’s September speech condemning Iran was likely part of a broader “carrot and stick” approach: a strategy which would perhaps involve publicly signalling escalation of hostilities designed to induce the Iranian president to agree to the “reward” of secretive direct talks. But Rouhani knows that as soon as he’s in the room with the American president it’s a diplomatic win for the US as the bar can be moved apart from other signatory countries of the JCPOA (or Rouhani’s own words at that point could be later used against Iran).
It appears Rouhani didn’t fall into the trap, however, and the weekend revelations coming out of Iranian state media are perhaps a way of rubbing it in while asserting a new Iranian confidence on the world stage.
6 .GLOBAL ISSUES
8. EMERGING MARKET
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings MONDAY morning 7:00 am
Euro/USA 1.1637 UP .0036/ 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 MIXED
USA/JAPAN YEN 113.61 DOWN 0.020(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 1.3178 UP .0059 (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 1.2828 UP .0034(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS MONDAY morning in Europe, the Euro ROSE by 36 basis points, trading now ABOVE the important 1.08 level RISING to 1.1627; / Last night the Shanghai composite CLOSED DOWN 26.47 POINTS OR .77% / Hang Sang CLOSED DOWN 102.66 PTS OR 0.36% /AUSTRALIA CLOSED UP 0.14% / EUROPEAN BOURSES OPENED MIXED
The NIKKEI: this MONDAY morning CLOSED UP 3.22 POINTS OR 0.01%
Trading from Europe and Asia:
1. Europe stocks OPENED MIXED
2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 102.66 POINTS OR 0.36% / SHANGHAI CLOSED DOWN 26.47 POINTS OR .77% /Australia BOURSE CLOSED UP 0.14% /Nikkei (Japan)CLOSED UP 3.22 POINTS OR 0.01% / INDIA’S SENSEX IN THE GREEN
Gold very early morning trading: 1271.80
Early MONDAY morning USA 10 year bond yield: 2.399% !!! DOWN 2 IN POINTS from FRIDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)
The 30 yr bond yield 2.914 DOWN 1 IN BASIS POINTS from FRIDAY night. (POLICY FED ERROR)
USA dollar index early MONDAY morning: 94.62 DOWN 29 CENT(S) from YESTERDAY’s close.
This ends early morning numbers MONDAY MORNING
And now your closing MONDAY NUMBERS \1 PM
Portuguese 10 year bond yield: 2.092% DOWN 10 in basis point(s) yield from FRIDAY
JAPANESE BOND YIELD: +.070% DOWN 3/10 in basis point yield from FRIDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.495% DOWN 9 IN basis point yield from FRIDAY
ITALIAN 10 YR BOND YIELD: 1.85 DOWN 10 POINTS in basis point yield from FRIDAY
the Italian 10 yr bond yield is trading 36 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.364% down 5 IN BASIS POINTS ON THE DAY
IMPORTANT CURRENCY CLOSES FOR MONDAY
Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1629 UP ,0028 (Euro UP 28 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 113.08 DOWN 0.514(Yen UP 51 basis points/
Great Britain/USA 1.3199 UP 0.0080( POUND UP 80 BASIS POINTS)
USA/Canada 1.2829 UP.0037 Canadian dollar DOWN 23 Basis points AS OIL ROSE TO $53.96
This afternoon, the Euro was UP 28 to trade at 1.1629
The Yen ROSE to 113.08 for a GAIN of 52 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE
The POUND ROSE BY 80 basis points, trading at 1.3199/
The Canadian dollar FELL by 37 basis points to 1.2829 WITH WTI OIL RISING TO : $53.96
Your closing 10 yr USA bond yield DOWN 5 IN basis points from FRIDAY at 2.374% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.894 DOWN 4 in basis points on the day /
Your closing USA dollar index, 94.61 DOWN 31 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 MONDAY: 1:00 PM EST
London: CLOSED DOWN 16.96 POINTS OR 0.23%
German Dax :CLOSED UP 7.80 POINTS OR 0.06%
Paris Cac CLOSED DOWN 3.50 POINTS OR 0.07%
Spain IBEX CLOSED UP 266.50 POINTS OR 2.61%
Italian MIB: CLOSED UP 159.91 POINTS OR 0.26%
The Dow closed DOWN 85.45 POINTS OR .36%
NASDAQ WAS closed DOWN 2.30 PTS OR 0.03% 4.00 PM EST
WTI Oil price; 53.96 1:00 pm;
Brent Oil: 60.46 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 57.91 UP 18/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 44 BASIS PTS)
TODAY THE GERMAN YIELD FALLS TO +.364% FOR THE 10 YR BOND 1.00 PM EST EST
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:$54.11
USA 10 YR BOND YIELD: 2.375% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.882%
EURO/USA DOLLAR CROSS: 1.1604 DOWN .0034
USA/JAPANESE YEN:113.15 down 0.455
USA DOLLAR INDEX: 94.46 down 45 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.3206 : up 87 POINTS FROM LAST NIGHT
Canadian dollar: 1.2824 up 30 BASIS pts
German 10 yr bond yield at 5 pm: +0.364%
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Tax Turmoil & China Contagion Slam US Stocks, Treasury Yields Tumble
Is it the bears turn now?
Chinese bonds and stocks were ugly overnight as the calm of the congress came to an end…
Small Caps were slammed today – worst day since August. Nasdaq managed to scramble back to green in the last few mins, but failed to hold it…
Small Caps (and the rest of the market) are catching down to their decoupled volatility markets…
As hope for meaningful tax-reform disappeared (“gradual” was the key word that disappointed markets...
Total chaos reigned in telecoms with rumors about Softbank sending Sprint/T-Mobile tumbling then rebounding…
Financials extended their losses from Friday and continued to catch down to the flattening yield curve…
Treasury yields extended Friday’s declines – this is now the biggest 2-day drop in 10Y yields since June…
The long-bond was rallying all day but yields extended their drop when Treasury Sec Mnuchin commented that ultra-long issuance lacked demand…
The Dollar Index extended Friday’s losses…
Dollar weakness prompted gold strength…
WTI clung to gain today (as RBOB leaked lower) amid more jawboning from OPEC/Saudis…
Bitcoin hit a new record high at $6300…
And finally, the most extreme positioning ever…
A good summary of Friday’s bombshell that the DNC paid for the “Trump Dossier”. Basically it was the Democrats that colluded with Russians in order to thwart the Trump election
(courtesy Alex Thomas SHFTPlan.com)
Bombshell: Hillary Clinton, DNC Colluded With Russia In An Attempt To Steal The Election From Donald Trump
(courtesy Alex Thomas/SHFTPlan.com)
Fresh off the heels of a shocking report, published by the Washington Post, that confirmed that the infamous “Russia dossier” was actually funded by both the Clinton campaign and Democratic National Committee, an even more startling revelation has emerged – The Clinton-DNC machine colluded with the Russians to fabricate and spread serious disinformation about Donald Trump in a failed attempt at swaying the election in the favor of Hillary Clinton.
That’s right, in a literal reverse of what the entire mainstream media has fed the American people for over a year, we now have evidence that, either wittingly or unwittingly, the Clinton campaign and the DNC paid for what amounted to disinformation that came directly from “Russian sources”.
Obviously this may seem truly unbelievable to some, but the facts speak for themselves and there is no denying that Democrats paid a shady opposition research company to try and dig up dirt on Donald Trump who then subsequently hired former British spy Christopher Steele. Steele then openly used Russian sources for most of the serious allegations in the “Russia dossier”.
Clinton Lawyer Hires Fusion GPS For Disinformation
According to The Washington Post report, which was later confirmed by Politico, Clinton and DNC lawyer Marc Elias hired the “opposition research” (see disinformation) company Fusion GPS who then outsourced the work to former British spy Christopher Steele who eventually went on to release the “Russian dossier” which was chalked full of disinformation, including lurid sexual allegations against Donald Trump.
The fact that the Clinton campaign would hire Fusion GPS in the first place paints a clear picture of a campaign willing to pay for any dirt on then candidate Donald Trump whether it was true or not. This becomes even more clear when you consider the history of Fusion GPS itself.
As Breitbart reported, “Fusion GPS is not some usual-usual oppo-research firm. Among other things, the company has been accused of being a “Democrat-aligned misinformation firm” aligned with Russia. While refusing to cooperate with congressional investigations, including taking the fifth, Fusion GPS has also been accused of advocating for “the interests of corrupt Russian and Venezuelan officials while hiding its foreign work from federal authorities.”
The Federalist’s Mollie Hemingway also noted the serious allegations against the company:
At a July hearing, Senate Judiciary members were told Fusion GPS helped advocate the interests of corrupt Russian and Venezuelan officials while hiding its foreign work from federal authorities.
Fusion GPS has been accused of illegally working as an undisclosed foreign agent and is currently refusing to comply with federal subpoenas for information on its foreign clients.
Fusion GPS also has deep connections to the mainstream media, including the fact that it was literally founded by a team of former mainstream media reporters who have deep connections to those currently in the profession.
Again Hemingway notes:
The principals at Fusion GPS are well-connected to mainstream media reporters. They are former journalists themselves, and know how to package stories and provide information to push narratives. They are, in fact, close friends with some of the top reporters who have covered the Russia-Trump collusion story.
Fusion GPS has placed stories with friendly reporters while fighting congressional investigators’ attempts to find out the group’s sources of funding. Fusion GPS leaders have taken the Fifth and fought subpoenas for information about the group’s involvement with Russia.
Their close friendships with key reporters on these stories have paid huge dividends for the firm, although these friendships and cooperative relationships have not served the public well.
Former Spy Used “Russian Sources” For Infamous Trump Dossier
This is where the story turns from shocking to downright unbelievable, especially when you consider the year long mainstream media disinformation narrative that claims that the Russians helped Donald Trump win the election.
The spook working for Fusion GPS, (which was hired by the Clinton campaign) Christopher Steele, openly bragged about his sources being within the Russian government itself.
Buried deep in a report by Vanity Fair that spends thousands of words trying to pretend that the dossier could be legitimate, is this nugget that paints a picture of direct or indirect collusion between the Clinton team and Russia.
How good were these sources? Consider what Steele would write in the memos he filed with Simpson: Source A—to use the careful nomenclature of his dossier—was “a senior Russian Foreign Ministry figure.” Source B was “a former top level intelligence officer still active in the Kremlin.” And both of these insiders, after “speaking to a trusted compatriot,” would claim that the Kremlin had spent years getting its hooks into Donald Trump.
Source E was “an ethnic Russian” and “close associate of Republican US presidential candidate Donald Trump.”
After “gathering” the information, Steele was then directed by Fusion GPS to “brief” the media about the Russian government fueled allegations against Trump.
In one, dated May 18, Steele says that he was instructed by Fusion GPS to meet with reporters at various outlets in order to publicize some of the allegations made in the dossier.
It has been widely known that Fusion GPS and Steele were in contact with reporters to discuss the dossier. It has been reported that rumors of the dossier were floating around in Washington, D.C. political and journalist circles for months prior to BuzzFeed’s decision to publish it on Jan. 10.
In the response, Steele’s lawyers state that the former spook briefed several reporters at the end of September at the instruction of Fusion GPS, which was working on behalf of a Democratic ally of Hillary Clinton’s.
The outlets were The New York Times, The Washington Post, Yahoo! News, The New Yorker and CNN.
Steele met once more — and again at Fusion GPS’s instruction — with The Times, The Post, and Yahoo! News. Fusion GPS took part in all of those meetings, Steele’s lawyers say.
“In each of those cases the briefing was conducted verbally in person,” the document reads.
In October, Fusion GPS instructed Steele to brief a journalist from Mother Jones. The interview, which was conducted through Skype, was likely with reporter David Corn.
It doesn’t get any clearer than this. Fusion GPS was paid by Democrats to dig up dirt, that dirt was then supplied by the Russians, and subsequently became a major part of the narrative surrounding Donald Trump and Russia.
“What you clearly have here is the Clinton campaign openly COLLUDING with a foreign country, with the Russians, to fabricate scurrilous lies about Trump, which were then fed to a willing media as a means to affect their news coverage, and by extension, sway the election,” Breitbart’s John Nolte wrote.
Fusion GPS “Was Acting On Behalf Of Russia”
Amazingly, testimony and evidence already exists that Fusion GPS has in the past worked directly for Russia and may have been doing so with the Trump disinformation dossier.
At a Senate Judiciary Hearing in late July, Hermitage Capital Management chief William Browder testified that the company was acting on behalf of Russia after co-founder Glenn Simpson was hired by a person connected to lawyer Natalia Veselnitskaya to lobby for the repeal of the Magnitsky Act.
The following exchange between Browder and Senator Lindsey Graham is shocking to say the least.
SEN. LINDSEY GRAHAM: This whole story reads like some kind of novel that nobody would buy, it’s got to be fiction, but unfortunately maybe it’s true. Let’s just break down sort of why you’re here. You believe that Fusion GPS should of registered under FARA, because they were acting on the behalf of the Russians?
WILLIAM BROWDER: That’s correct.
SEN. GRAHAM: So, I just want to absorb that for a moment. The group that did the dossier on President Trump hired this British spy, wound up getting it to the FBI. You believe they were working for the Russians?
BROWDER: And in the Spring and Summer of 2016 they were receiving money indirectly from a senior Russian government official.
SEN. GRAHAM: Okay. So, these are the people that were trying to undermine Donald Trump by showing the nefarious ties to Russia. Is that what you’re saying?
BROWDER: Well, what I’m saying with 100% certainty is that they were working to undermine the Magnitsky act and the timing of that.
SEN. GRAHAM: But, the Fusion GPS products apparently as they hired a guy to look into Trump?
SEN. GRAHAM: Right
When you put all the evidence together, keeping in mind that this is only what has been released so far, you can see a clear picture of, at the very least, indirect collusion between the highest levels of the Democratic Party and unknown figures within the Russian government. The scheme was then directly propped up and spread by the mainstream media.
As Nolte so aptly notes, “If purchasing misinformation from Kremlin official as a means to manipulate media coverage and sway public opinion is not colluding with the Russians to rig an election, nothing is.”
Sean Hannity of Fox News is furious that Mueller has not charged Clinton in the Uranium scandal
Hannity Reacts To Mueller Probe Charges: “When Will Hillary Clinton Be Indicted?”
Last night, shortly after reports leaked to CNN that Special Counsel Mueller had filed his first charges in the Russia investigation, Fox News host Sean Hannity responded via Twitter asking simply: “When will Hillary Clinton be indicted?”
Of course, as we noted last night (see: Mueller Reportedly Ready To File First Charges In Russia Probe), CNN was the first to report that charges had been filed by Mueller and that arrests could be made in the coming days, a report that was subsequently ‘confirmed’ by Reuters. That said, the subject of the charges was not revealed and details of the court documents were sealed under orders from a federal judge.
A federal grand jury in Washington, DC, on Friday approved the first charges in the investigation led by special counsel Robert Mueller, according to sources briefed on the matter.
The charges are still sealed under orders from a federal judge. Plans were prepared Friday for anyone charged to be taken into custody as soon as Monday, the sources said. It is unclear what the charges are.
A spokesman for the special counsel’s office declined to comment.
Hannity, a vocal supporter of President Trump, went on to accuse Mueller of working in conjunction with the mainstream media to “change the narrative” after new details emerged last week regarding the “Uranium One” scandal, which is now being investigated by the House Intelligence Committee and House Oversight and Government Reform Committee, and the revelation that Hillary’s campaign and the DNC funded the infamous “Trump Dossier”.
Carefully orchestrated attempt to shift the media narrative or just a logical progression in an ongoing investigation, the answer should be unveiled on Monday.
(courtesy Judge Jeanine Pirro/FoxNews)
The fun begins: Manafort is told to surrender to the FBI on several charges including tax fraud and money laundering. Now we await for the Republicans to force a special prosecutor to go after the Clintons, Mueller, Rosenstein et others
(courtesy zero hedge)
Paul Manafort Told To Surrender To FBI On Charges Including Tax Fraud
Update: The Washington Post reports that Manafort was seen entering the FBI’s Washington field office Monday.
* * *
Update: Manafort has been hit with several charges, including tax fraud, WSJ reported. He’s expected in federal court in Washington later Monday, a person familiar with the matter said. Meanwhile, Rick Gates is also reportedly turning himself in.
* * *
Update: CBS News confirms a photojournalist has captured images of Manafort leaving his home this morning with his lawyer.
* * *
Surprise, surprise. The New York Times is reporting that the first indictment in Special Counsel Robert Mueller’s probe into possible collusion between the Trump campaign and Russia has been unsealed.
And the target is none other than Paul Manafort, who briefly served as chief executive of the Trump campaign last summer before reports about his work for Ukraine’s former leader Viktor Yanukovich forced him out. Manafort has reportedly been asked to surrender by the FBI, sparing him an embarassing perp walk.
Manafort’s former deputy Rick Gates has also been asked to surrender.
The charges against the pair weren’t immediately clear. But they do represent an escalation in the probe that has loomed over President Trump’s first year in office.
Gates is a longtime protege and junior partner at Manafort’s firm. His involvment in the probe was revealed in the spring. His name appeared in documents linked to a Cypriot firm Manafort set up to receive payments from Eastern European politicians like Yanukovich, who purportedly paid Manafort with money looted from the Ukraine state.
Manafort had been udner investigaiton for violations of federal tax law, money laundering and whether he failed to properly disclose his foreign lobbying.
As we’ve noted, since these charges mostly stem from Manafort’s work before he became involved with the campaign, they leave ample room for Trump to declare victory.
As far as impact to the market – so far nothing – and as KBW’s Brian Gardner explains, none is expected, despite expectations for much sound and fury and told-you-so’s from the left.
Special Counsel Robert Mueller’s indicting former Trump campaign manager Paul Manafort or former National Security Adviser Michael Flynn over activities separate from Trump campaign/administration would be “mostly political noise,” and would not significantly affect markets.
However, Gardner notes that any unsealing of indictments may dominate the week’s entire news cycle, drowning out coverage of tax legislation and monetary policy.
Now, we watch for the administration’s response.
The soap opera continues with Manafort pleading not guilty along with his side kick Gates. He claims that he has not received one cent from doing business with the Ukraine or Russia. As we noted above, Tony Podesta has resigned from his company as they did do business with the Ukraine. Interesting enough, the number one donor to the Clinton Foundation was the Ukraine at 10 million dollars. The bail was astronomical so both have been placed under house arrest.
The real problem here is that this will be a huge distraction to Trump as they try and get tax reform done which will be impossible
Manafort Pleads Not Guilty; $10 Million Bail Requested
Several hours after they surrendered to the FBI, Paul Manafort and his business partner Rick Gates, pleaded not guilty to a 12-count indictment charging them with making tens of millions of dollars while secretly working for the Ukrainian government and then hiding the money from the U.S. government. Prosecutors asked that bond be set at $10 million for Manafort and $5 million for Gates but said both may be detained at home until they can post bail, according to Politico.
The special counsel’s office considers him a flight risk, lawyers in Mueller’s office argued before Judge Deborah Robinson on Monday afternoon, citing the seriousness of the charges and the extent of Manafort’s ties abroad. The bureau took possession of Manafort’s passport yesterday, his lawyer said quoted by The Hill.
According to AP, Trump’s former campaign manager and his “right-hand man” Gates did not speak other than to state their names at the hearing in federal court in Washington, DC. The two former Trump aides are charged with funneling $75 million through offshore shell companies while secretly working with a pro-Russian political party in the Ukraine as well as the country’s ousted President Viktor Yanukovych. They face up to 20 years in prison on conspiracy to launder money charges, which are the result of Special Counsel Robert Mueller’s investigation into Russian interference in the 2016 election.
Manafort, who joined Trump’s campaign in March 2016 resigned last August amid mounting questions into his shady ties to the Ukraine; he was replaced by Steve Bannon.
Days before departing the Trump campaign, the New York Times reported Manafort’s name appeared on a list of “black ledger” accounts kept by Yanukovych.
“The simplest answer is the truth: I am a campaign professional,” Manafort said at the time. “It is well known that I do work in the United States and have done work on overseas campaigns as well. I have never received a single ‘off-the-books cash payment’ as falsely ‘reported’ by The New York Times, nor have I ever done work for the governments of Ukraine or Russia.”
White House press secretary Sarah Huckabee Sanders also sought to downplay the news during the press briefing, dismissing Papadopoulos as a minor “campaign volunteer” and echoing the president’s line that Manafort and Gates were indicted for activity that occurred before the campaign. “Today’s announcement has nothing to do with the president, nothing to do with the president’s campaign or campaign activity,” Sanders said.
Even before the charges were unsealed on Monday morning, White House officials moved to put distance between Trump and his former campaign chairman.
“Whatever happens today with the Mueller investigation, we don’t even know that it has anything to do with the campaign, what happens today,” counselor to the president Kellyanne Conway told Fox News earlier on Monday morning.
Meanwhile, in a more surprising development, also on Monday the head of the famous, Democrat-leaning lobby organization, the Podesta Group, Tony Podesta – who is brother of Clinton campaign chair John Podesta – announced unexpectedly he would be departing the Podesta Group.
While it is unclear what prompted the departure, now that Ukraine is in everyone’s cross-sights, and considering that both Manafort and Gates worked for Podesta at the time when the bulk of their alleged crimes took place, it is perhaps not entirely surprising that next to fall under the microscope would be the Podesta Group, and perhaps – eventually – the Clinton Foundation whose number 1 donor, as the WSJ disclosed last year, was… Ukraine.
We now know that formerer Trump foreign advisor, Papadopoulos has pleaded guilty to lying to the FBI
“Did He Wear A Wire?”: Former Trump Campaign Advisor Pleaded Guilty To Lying To FBI
It’s only 10:30 am on the East Coast and already today is shaping up to be one of the most consequential days of the Trump presidency.
In addition to the news that former Trump campaign executive Paul Manafort and his longtime deputy, Rick Gates, have been indicted on 12 counts including tax fraud, money laundering, failing to register as a lobbyist for a foreign country, and conspiring against the US, unsealed court documents have revealed that former Trump campaign adviser George Papadopoulos pleaded guilty on Oct. 5 to making false statements to the FBI.
Noting that the Russian government often uses foreign intermediaries to accomplish its foreign policy goals, the FBI said it investigated Papadopoulos, who served as a foreign adviser for the Trump campaign starting on March 2016 and continuing through most of the campaign, for any such contacts. This investigation included an interview in January 2017. According to the indictment, there is probable cause to believe that on Jan. 27, Papadopoulos made material false statements and omitted material facts to the FBI regarding his interactions during the campaign with foreign contacts, including Russian nationals.
Specifically, he falsely described his interactions with a certain foreign contact, identified as a professor, who discussed “dirt” related to emails concering then-presiential candidate Hillary Clinton, when in fact, he had repeated communications with that contact while serving as an adviser on the campaign.
Papadopoulos also shut down a Facebook account following a second interview in February. The account included communications with foreigners including Russian nationals – thereby obstructing the FBI’s investigation.
A self-described energy consultant, Papadopoulos was the youngest and least experienced member of the small foreign policy team Trump abruptly formed last March after coming under criticism for his lack of foreign policy expertise. Furthermore, the Washington Post reported that in at least half a dozen email requests sent between March and September 2016, adviser George Papadopoulos urged Trump or senior members of his campaign to meet with Russian officials. Some of those emails were read to the newspaper by a person with access to them.
These newly surfaced emails mark the latest in a long string of examples of the Trump team’s efforts to establish direct communication with Russia during the 2016 race.
In one, Papadopoulos offered to arrange “a meeting between us and the Russian leadership to discuss US-Russia ties under President Trump,” as quoted by the Post.
The question now is what has Papadopoulos “given” the government as part of the plea agreement, and whather he has “flipped” on Trump:
Former US Attorney Preet Bharara says the FBI appears to have found a cooperating witnes in Pap – which is significant.
In his plea agreement, the government says it will offer leniency to Pap in exchange for his cooperation, and that sentencing will be delayed before cooperation is completed.
Finally, as The Smoking Gun asks, “did George Papadopoulos agree to wear a wire or make any FBI-monitored calls?”
the situation is now getting red hot as Mueller seems to be also going after Democratic lobbyist Podesta Group who chairman Tony is the brother of DNC head John Podesta.
Tony Podesta Resigns As Head Of Podesta Group Amid Mueller Probe
As the left and the media ramp up their Manafort-ian mania against Trump, it appears the trail of destruction from special counsel Mueller’s probe has spread to Democratic power-lobbyist Tony Podesta.
As we explained in Aug 2016, Paul Manafort – now under indictment on 12 charges – and his deputy Rick gates previously worked with the Podesta Group, run by Tony Podesta, the brother of Hillary Clinton campaign chairman John Podesta.
…emails obtained by the Associated Press showed that Gates personally directed two Washington lobbying firms, Mercury LLC and the Podesta Group, between 2012 and 2014 to set up meetings between a top Ukrainian official and senators and congressmen on influential committees involving Ukrainian interests. Gates noted in the emails that the official, Ukraine’s foreign minister, did not want to use his own embassy in the United States to help coordinate the visits.
And this is where the plot thickens, because while the bulk of the press has so far spun the entire Ukraine lobbying scandal, which led to Manafort’s resignation, as the latest “proof” that pro-Moscow powers were influencing not only Manafort but the Trump campaign in general (who some democrats have even painted of being a Putin agent), the reality is that a firm closely tied with the Democratic party, the Podesta Group, is just as implicated.
As AP further adds, the European Center for a Modern Ukraine, a Brussels-linked nonprofit entity which allegely ran the lobbying project, paid Mercury and the Podesta Group a combined $2.2 million over roughly two years. In papers filed in the U.S. Senate, Mercury and the Podesta Group listed the European nonprofit as an independent, nonpolitical client. The firms said the center stated in writing that it was not aligned with any foreign political entity.
And now, just hours after Manafort and Gates handed themselves over to the feds, Politico reports, the founder of the Podesta Group, is stepping down from the lobbying shop that bears his name after coming under investigation by Special Prosecutor Robert Mueller.
Perhaps Podesta knows what is likely to happen next. Podesta announced his decision during a firm-wide meeting Monday morning and is alerting clients of his impending departure.
“[Tony] was very magnanimous and said, “This is an amazing group of people,” a source said of Podesta’s remarks.
Podesta also told staff he “doesn’t intend to go quietly, or learn how to play golf.” He said he “needs to fight this as an individual, but doesn’t want the firm to fight it.”
Fritts also addressed the gathering, telling staff that she is “thrilled at this opportunity” and that, “This is not about me, this is about y’all.”
Several other senior staff spoke about their excitement about the future of the firm. The meeting ended with a standing ovation for Podesta.
One thing is clear, both sides of the swamp should probably control themselves in any premature celebrations as this appears to be far from over.
Here’s one reason why we suspect more than a few on the left are now concerned…
USA savings rate has just crashed to a 10 year low as spending surges
US Savings Rate Crashes To 10 Year Lows As Spending Surges Most Since ‘Cash For Clunkers’
While incomes grew at an expected 0.4% MoM, US consumers spent at an exuberant 1.0% MoM clip – the biggest monthly rise since Aug 2009 (cash for clunkers). To cover this spending surge, the savings rate tumbled.
The last time – Aug 09 – that spending surged like this was when the government unleashed ‘cash for clunkers’, it plummeted the following month…
Spending on durable goods rose 3.5 percent after adjusting for inflation after a 1.4 percent decline in August.
Outlays on services rose 0.3 percent, while spending on non- durable goods also advanced 0.3 percent.
Under the hood, the PCE Deflator printed as expected +1.6% YoY.
Private workers wage growth continues to outstrip government workers’ wage growth YoY and upticked in September…
And while outgoings surged with relatively flat incomes, the savings rate plunged to its lowest since Dec 2007 to enable the spending…which just happens to be when the last recession started.
As Bloomberg warns, the jump in September outlays was driven by purchases of durable goods including the replacement of motor vehicles lost in recent flooding from hurricanes. That means the latest surge probably overstates the strength of consumer spending.
Just what Hillary needed: Benghazi is back in the news with the capture of a militant who was instrumental in that 2012 attack.
US Special Forces Capture Militant Who Was Instrumental In 2012 Benghazi Attack
For all the talk about Paul Manafort’s indictment, one can’t help but feel that there is a distinct undercurrent amid today’s newsflow focusing on Hillary Clinton: from the resignation of one of the most powerful Democrats, Tony Podesta, who earlier today parted ways with the lobbying firm he founded after it became ensnared in the Mueller probe (and who is also brother of Clinton campaign chair John Podesta) to the sudden reemergence of the Benghazi attack narrative, one wonders if Trump is not preparing to launch a broadside attack on his former presidential challenger.
Lost in the general newsflow, on Monday the AP reported that US special ops forces captured a militant Sunday who was the US says was instrumental in the 2012 attack on the US diplomatic compound in Benghazi, Libya. The September 2012 assault killed Ambassador Chris Stevens and three other Americans, and led to allegations that then Secretary of State Hillary Clinton failed to provide an adequate response to the attack, and subsequently blamed the attack on a Youtube video clip.
US officials say the mission was approved by President Donald Trump and done in coordination with Libya’s internationally recognized government. US official have since identified the suspect as Mustafa al-Imam, and added that American special ops forces captured al-Imam in Misrata, on the north coast of Libya. The official says al-Imam was then taken to a U.S. Navy ship at the Misrata port for transport. He is being taken now to the United States.
The White House is expected to release more details shortly.
As Fox News adds, earlier this month, the trial of Ahmed Abu Khattala began, the alleged mastermind of the 2012 attacks. It’s not clear if the suspect detailed by US special operations forces is one of Khattala’s lieutenants. Khatallah had been awaiting trail since 2014, when US Army commandos and FBI agents captured him in Benghazi and put him on a Navy ship for detention in an American prison inside the United States.
Late on Monday, Secretary of State Rex Tillerson says the U.S. will “spare no effort to ensure that justice is served” to the militants who committed the 2012 attack on a U.S. diplomatic compound in Benghazi, Libya.
Tillerson thanked military, law enforcement and intelligence officials for the capture of a man they’re describing as a key suspect in the deadly assault on the U.S. outpost. Chris Stevens, the U.S. ambassador to Libya, and three other Americans were killed. Tillerson also said he spoke with some family members of the four fallen Americans to “underscore the U.S. government’s unwavering support.”
His full statement below:
And now that the Benghazi narrative is back in the news, how long before Trump decides to casually tweet about it, while casually invoking Hillary’s name in the process?
The US Government Quietly Added $200 Billion To The National Debt This Month Alone
There’s been something happening this month that very few people have noticed.
It’s been lost beneath all the other headline-dominating news, from the Las Vegas shooting to Harvey Weinstein to the Mueller investigation.
But very quietly behind the scenes there’s been an extremely rapid uptick in the US national debt.
In the month of October alone, the US national debt has soared by nearly a quarter of a trillion dollars.
This is pretty astonishing given that October is supposed to be a ‘good’ month for the US Treasury Department. The tax extension deadline means that October is usually quite strong for federal tax receipts.
And it has been– taxpayers have written checks totaling $190 billion to Uncle Sam so far this month.
Yet despite being flush with tax revenue, the US government still managed to pile almost a quarter of a trillion dollars more on top of its already enormous mountain of debt.
It’s always surprising to me how a story this monumental never receives any coverage.
The government of the largest, most important economy in the world is completely, woefully bankrupt. And its rate of decline is accelerating.
You’d think this would be on the front page of every major newspaper in the world.
But it’s not. It’s shrugged off as par for the course, as if accumulating historic levels of debt is somehow consequence-free.
And this complacency is what I find the MOST bizarre.
Consider the following: the US government spends nearly the ENTIRETY of its tax revenue on Social Security, Medicare, and Interest on the Debt.
Throw in national defense spending and the budget deficit is already hundreds of billions of dollars.
And that’s before they pay for anything else within the federal government: The Internal Revenue Service. National Parks. Highways. The guys who graze your genitals with the backs of their hands at the airport.
Congress could literally cut almost everything we think of as ‘government’ and they’d still lose hundreds of billions of dollars each year.
Oh, and raising taxes doesn’t solve this problem.
Over the past eight decades since the end of World War II, tax rates in the United States have been all over the board.
The highest marginal tax rate on individual income has been as high as 92% (in 1952-1953) and as low as 28% (1988-1990).
The corporate tax rate has gyrated between 53% and 34%. Capital gains rates have been as high as 35% and as low as 15%.
Yet throughout it all, overall tax revenue as a percentage of GDP has barely budged.
This is how governments measure tax revenue– as a percentage of the overall economy. It’s like measuring how big a slice of the economic pie ends up in the government’s pocket.
And that figure has barely budged for decades.
The US government’s tax revenue as a percentage of GDP is almost invariably around 17%, i.e. roughly 17% of all US economic value is paid to the federal government as tax revenue.
It doesn’t matter how high (or low) tax rates are set. Tax REVENUE stays the same.
So even if they jack up tax rates back to 90%, IT STILL DOESN’T SOLVE THE PROBLEM.
This is a cost problem; the government simply spends too much money on programs it cannot afford.
The only realistic way out is for the US government to eventually capitulate… and default.
This could mean selectively defaulting on holders of US debt (for example– the Chinese, Japanese, Federal Reserve, Social Security Trust Funds, etc.); one day Uncle Sam simply stops paying.
Or it could mean defaulting on promises made to citizens, like providing a strong national defense, maintaining a stable currency, or paying out Social Security benefits as advertised.
Each of these scenarios has its own particular consequences, ranging from steep inflation to a full-blown global financial crisis.
Bottom line, there is no rosy scenario here.
That’s not to say that any of this is going to happen tomorrow. Far from it. These consequences are years in the making.
But it’s imperative to start doing something about it now.
Social Security is a great example.
As we’ve discussed before, the program is already running out of money.
The Social Security Board of Trustees (which includes the US Treasury Secretary), estimates that its key trust funds will be depleted in 2034, at which point the program will be fully dependent on government tax revenue to pay monthly benefits.
Now, 2034 isn’t exactly around the corner.
But if this debt trajectory continues on its current path, by 2034 the US government will have to spend the bulk of its tax revenue paying interest.
With the Social Security Trust Fund depleted and government tax revenue consumed by interest payments, it’s hard to imagine anyone receiving their full benefits.
This isn’t a problem you want to wait 17 years to acknowledge.
If Social Security ever does dry up, you won’t be able to conjure a monthly pension out of thin air.
That’s why the time to start creating your Plan B is now: it takes time to build up retirement savings.
And even if some miracle were to occur– the national debt declines, Social Security is recapitalized, etc.– you won’t be worse off having an independent source of wealth that doesn’t depend on the government.
Well that about does it for tonight
Have a safe and enjoyable weekend and….
I will see you TUESDAY night