GOLD: $1280.15 UP $11.25
Silver: $17.22 UP 37 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: $1291.77 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1269.00
PREMIUM FIRST FIX: $22.77(premiums getting larger)
SECOND SHANGHAI GOLD FIX: $1291.58
NY GOLD PRICE AT THE EXACT SAME TIME: $1268.50
Premium of Shanghai 2nd fix/NY:$23.08 PREMIUMS GETTING HUGE)
CHINA REJECTS NEW YORK PRICING OF GOLD!!!!
LONDON FIRST GOLD FIX: 5:30 am est $1271.60
NY PRICING AT THE EXACT SAME TIME: $1271.60
LONDON SECOND GOLD FIX 10 AM: $1270.90
NY PRICING AT THE EXACT SAME TIME. 1271.80 ??
For comex gold:
NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 27 NOTICE(S) FOR 2700 OZ.
TOTAL NOTICES SO FAR: 856 FOR 85,600 OZ (2.662TONNES)
10 NOTICE(S) FILED TODAY FOR
Total number of notices filed so far this month: 856 for 4,280,000 oz
Bitcoin: $7361 bid /$7368 offer up $138.00 (MORNING)
BITCOIN CLOSING;$7099 BID:7124. OFFER down $124.00
Let us have a look at the data for today
In silver, the total open interest SURPRISINGLY FELL BY A SMALL SIZED 1130 contracts from 206 ,068 DOWN TO 204,938 DESPITE FRIDAY’S TRADING IN WHICH SILVER FELL BY A CONSIDERABLE 27 CENTS. THE CROOKS NO DOUBT ARE PULLING THEIR HAIR AS THEY ARE STILL HAVING AN AWFUL TIME TRYING TO COVER THEIR MASSIVE SILVER SHORTS. THEY TRY TO CONTINUE WITH THEIR TORMENT LIKE THE RAID ON FRIDAY. A FEW NEWBIE SPEC LONGS LEFT THE SILVER ARENA AND THUS WE HAVE A VERY TINY BANKER SHORT COVERING.
RESULT: A SMALL SIZED FALL IN OI COMEX DESPITE THE CONSIDERABLE 27 CENT PRICE LOSS. OUR BANKERS COULD HARDLY COVER ANY OF THEIR HUGE SHORTFALL DESPITE THE MANIPULATED CRIMINAL BANKER RAID WHICH HAD THEIR OBJECT OF THE EXERCISE TO CAUSE AS MANY SILVER LEAVES TO FALL FROM THE SILVER TREE. AS WE HAVE WITNESSED ON COUNTLESS OCCASIONS WITH RESPECT TO SILVER, IT FAILED MISERABLY.
In ounces, the OI is still represented by just OVER 1 BILLION oz i.e. 1.025 BILLION TO BE EXACT or 146% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT OCT MONTH/ THEY FILED: 10 NOTICE(S) FOR 50,000 OZ OF SILVER
In gold, the open interest FELL BY A LESS THAN EXPECTED 4,347 CONTRACTS WITH THE GOOD SIZED FALL IN PRICE OF GOLD ($8.65) WITH FRIDAY’S TRADING . The new OI for the gold complex rests at 529,124. NEWBIE LONGS EXITED THE ARENA TO WHICH THE BANKERS COVERED.
NO EFP’S WERE ISSUED FOR THE NOVEMBER CONTRACT MONTH.
Result: A GOOD SIZED DECREASE IN OI WITH THE FALL IN PRICE IN GOLD ($8.65). WE HAD SOME BANK SHORT COVERING AS SOME OF OUR NEWBIE LONGS GOT STOP LOSSED OUT OF THEIR CONTRACTS.
we had: 27 notice(s) filed upon for 2700 oz of gold.
With respect to our two criminal funds, the GLD and the SLV:
A tiny change in gold inventory at the GLD/ a withdrawal of .29 tonnes to pay for fees and insurance
Inventory rests tonight: 845.75 tonnes.
TODAY WE HAD NO CHANGE IN SILVER INVENTORY AT THE SLV
INVENTORY RESTS AT 319.018 MILLION OZ
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver FELL BY A TINY 1130 contracts from 206,068 UP TO 204,938 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE CONSIDERABLE FALL IN SILVER PRICE (FALL OF 27 CENTS). OUR BANKERS WERE AGAIN UNSUCCESSFUL IN THEIR ATTEMPT TO COVER MUCH OF THEIR SILVER SHORTS. NEWBIE LONGS IN SILVER EXITED THE ARENA TO WHICH THE BANKERS WERE DUTIFULLY COVERED.
RESULT: A TINY SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 27 CENT FALL IN PRICE (WITH RESPECT TO FRIDAY’S RAID). OUR BANKER FRIENDS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO COVER MUCH OF THEIR HUGE BURGEONING SILVER SHORTS . .NO EFP’S WERE ISSUED FOR THE UPCOMING NOVEMBER CONTRACT. HOWEVER THE CRIMINAL BANKERS COVERED A TINY AMOUNT OF THE SHORTS AS NEWBIE LONGS GOT STOP-LOSSED OUT OF THEIR LONGS.
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 UP 16.43 points or .49% /Hang Sang CLOSED DOWN 6.81 pts or 0.02% / The Nikkei closed UP 9.23 POINTS OR .04%/Australia’s all ordinaires CLOSED DOWN 0.05%/Chinese yuan (ONSHORE) closed DOWN at 6.633/Oil UP to 55.94 dollars per barrel for WTI and 62.54 for Brent. Stocks in Europe OPENED RED . ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.633. OFFSHORE YUAN CLOSED WEAKER TO THE ONSHORE YUAN AT 6.635 //ONSHORE YUAN WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO THE DOLLAR/. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT VERY HAPPY TODAY
3a)THAILAND/SOUTH KOREA/NORTH KOREA
i)North Korea//South Korea
b) REPORT ON JAPAN
Japanese yen initially fell for two reasons:
1.Trump being angry with trade as Japan always has a surplus trade with the USA
2. Kuroda wishes to continue with a weakened yen to help his exports
c) REPORT ON CHINA
i)Trouble in the shadow banking sector in China, China bond yields are rising due to deleveraging. However the shadow banking sector still has investors keeping their high yielding instruments. The key problem here is that their entire shadow banking sector is seeing less funds coming in which is needed to sustain the Ponzi scheme. The big question is how many trillions of yuan must be printed to make the entire sector whole
( zero hedge)
ii)First it was Kyle Bass that sounded the alarm bell on China’s huge 40 trillion debt. Now it is non other than PBOC;s Zhou who warns of a sudden, complex, hidden, contagious and hazardous risk in the debt market in China which will have a profound effect on global finances
4. EUROPEAN AFFAIRS
Ousted Catalan leader Puigdemont turns himself in to the Belgian police who will have their hands full on a extradition hearing.
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
Lebanon is thrown into a huge crisis after its premier resigns fearing an assassination plot. In his speech from Saudi Arabia he blamed Iran and their ally Hezbollah. Harari’s father was assassinated in 2005
The Saudi Plunge protection team rescues their stock market but the riyal is heading for devaluation
vii)And now he hear that a second Saudi Prince has been killed but this time in a fire fight as he tried to resist arrest. He is the youngest son of King Fahad. Saudi Arabia is now in turmoil
Will this largest ever aerial international military drill lead to something?
6 .GLOBAL ISSUES
7. OIL ISSUES
8. EMERGING MARKET
9. PHYSICAL MARKETS
i)We now have the site for the Texas bullion depository in Bill Holter’s hometown of Austin
( Associated Press/GATA)
ii)For the first time we have Hong Kong gold (physical trading) linked to the Mainland: Shenzen.
now more citizens will get their hands on physical gold
( Yiu/SCMP/Hong Kong)
iii)Craig Hemke on the phony jobs report on Friday..a must read
( Craig Hemke/TFMetals Report)
iv)It is obvious that non allocated gold and silver reference pricing will not work in London especially when you compare it to Shanghai
( Ronan Manly/Bullionstar/GATA)
v)With the Saudi problems in the weekend, bitcoin rises to $7590.00
( zerohedge/Sunday night)
vi)So far this year, as we have noted to you, Turkey has bought a huge amount of gold even for them: total 118 tonnes
10. USA Stories
i)Another senseless massacre in the uSA
ii)One member of the USA Judiciary Council calls for Mueller’s resignation over the Uranium one scandal as he claims that the special prosecutor is hopelessly compromised:
iii)the FBI turns over hundreds of pages of new Clinton probe documents
iv)This is something!! Donna Brazile states in her books that she feared for her life after DNC employee Seth Rich was murdered:
iv b)This is big: an early Comey memo surfaces which accuses Hillary Clinton of “gross negligence” in her handling of emails. Now we need to find out who authorized the change? and for what reason?
v)Trump is ready to kill the individual mandate and in so doing will recover over 400 billion in 10 years due to the fact that subsidies will not have to be paid out. Needless to say but the Democrats will not be happy
vi)As promised to you, the tax bill is dead on arrival at the Senate as McCain says no
Let us head over to the comex:
The total gold comex open interest FELL BY A LESS THAN EXPECTED 4,347 CONTRACTS DOWN to an OI level of 529,124 WITH THE GOOD SIZED FALL IN THE PRICE OF GOLD ($8.65 LOSS IN FRIDAY’S CRIMINAL RAID). IT SEEMS THAT WE GOT SOME NEWBIE LONGS WHO WERE STOP- LOSSED OUT OF THE GOLD ARENA WITH THE BANKERS VERY SO EAGER TO COVER THEIR SHORTFALL. THE OBJECT OF FRIDAY’S RAID WAS SILVER, AND NOT GOLD, AND AS YOU WILL SEE THEY FAILED MISERABLY.
NO EFP’S WERE ISSUED FOR NOVEMBER YESTERDAY.
HERE IS A SUMMARY OF EFP’S ISSUED TO LONGS IN EACH OF THE PAST 3 MONTHS:
The amount of EFP’s issued for each of the past 3 months at month’s end;
Result: a SMALLER THAN EXPECTED open interest DECREASE WITH THE CONSIDERABLE FALL IN THE PRICE OF GOLD ($8.65.) WE HAD SOME BANKER SHORT COVERING. NEWBIE LONGS EXITED THE ARENA AS THEY WERE STOP LOSSED OUT OF THEIR CONTRACTS ON FRIDAY’S CRIMINAL RAID.
We have now entered the NON active contract month of NOVEMBER.HERE WE HAD A LOSS OF ONLY 1 CONTRACT(S) DOWN TO 140. We had 63 notices filed on FRIDAY so surprisingly we again gained 62 contracts or 6200 additional oz will stand for delivery in this non active month of November. TO SEE BOTH GOLD AND SILVER RISE IN AMOUNT STANDING (QUEUE JUMPING) IS A GOOD INDICATOR OF PHYSICAL SHORTNESS FOR BOTH OF OUR PRECIOUS METALS.
The very big active December contract month saw it’s OI LOSE 10,197 contracts DOWN to 358,880. January saw its open interest rise by 195 contracts up to 313. FEBRUARY saw a gain of 5223 contacts up to 107,147.
We had 27 notice(s) filed upon today for 2700 oz
VOLUME FOR TODAY (PRELIMINARY) 349,010
CONFIRMED VOLUME YESTERDAY: 390,889
We had 10 notice(s) filed for 50,000 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 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 27 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)||856 contracts
|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
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
NOV 6/ a tiny withdrawal of .29 tonnes to pay for fees etc/inventory rests at 845.75 tonnes
Nov 3/no change in gold inventory at the GLD/Inventory rests at 846.04 tonnes
NOV 2/STRANGE!!! WE HAD ANOTHER WITHDRAWAL OF 3.55 TONNES FROM THE GLD DESPITE GOLD’S RISE OF $6.60 YESTERDAY AND $1.55 TODAY/INVENTORY RESTS AT 846.04 TONNES
Nov 1/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 849.59 tonnes
OCT 31/no change in gold inventory at the GLD/Inventory rests at 850.77 tonnes
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
Now the SLV Inventory
NOV 6/no change in silver inventory at the SLV/Inventory rests at 319.018 million oz/
Nov 3/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS TONIGHT AT 319.018 MILLION OZ.
NOV 2/A TINY LOSS OF 137,000 OZ BUT THAT WAS TO PAY FOR FEES LIKE INSURANCE AND STORAGE/INVENTORY RESTS AT 319.018 MILLION OZ/
Nov 1/STRANGE! WITH SILVER’S HUGE 48 CENT GAIN WE HAD NO GAIN IN INVENTORY AT THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/
Oct 31/no change in silver inventory at the SLV/Inventory rests at 319.155 million oz
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
Indicative gold forward offer rate for a 6 month duration+ 1.44%
Major gold/silver trading/commentaries for MONDAY
German Investors Now World’s Largest Gold Buyers
– German gold demand surges from 17 ton-a-year to a 100 ton-plus per year
– €6.8 Bln spent on German gold investment products in 2016, more per person than India and China
– Germans turned to gold during financial crises and ongoing euro debasement
– Evidence of latent retail demand on increased economic concerns
– “Gold fulfils an important long-term, wealth preservation role in German investors’ portfolios”
Editor: Mark O’Byrne
India and China often grab the headlines as the world’s largest buyers of gold. In 2016 this was not the case.
When measured on a per capita basis it is Germany that takes the impressive crown of largest gold buyer in 2016, all thanks to their investment market. Last year the country set a new personal best, ploughing as much as £6.8bn ($8 bn) into gold coins, bars and exchange-traded commodities (ETCs).
This is impressive considering that back in 2008 the amount of gold purchased by Germans barely registered outside of the country. A new World Gold Council report records that ‘average demand between 1995 and 2007 was a modest 17 tonnes’. In some of those years they weren’t even net-buyers.
In 2008 this began to change as ‘the global financial crisis brought gold to the attention of German investors at large.’ By 2009, the German gold investment market became one of the world’s largest, with annual coin and bar demand growing four-fold from 36t in 2007 to 134t in 2009.
Since then it has continued to climb, as explained in the latest World Gold Council report:
Germany has established itself as a 100t-plus per year market for bars and coins, and a vibrant domestic ETC market has developed: during Q3 2017, German-listed ETC AUM hit an all-time high of 252.1t, equivalent to €9.8bn.
So what changed and can the country keep up this record-breaking?
It is assumed that the Germans have an innate understanding of the value of gold thanks to their tumultuous economic history.
As the WGC summarises:
German investors have an acute awareness of the wealth- eroding effects of financial instability. Hyper-inflation in the 1920s lingers on in the collective memory but, perhaps more importantly, German investors have seen fiat currencies come and go: in the past 100 years, Germany has had eight different currencies.
The past seemed to be catching up with the future following the financial crisis when savers once again began to see their savings disappear. Following the ECB’s decision to slash interest rates German banks began charging customers to hold their cash, and yields on German bunds dropped into negative territory.
It isn’t surprising that that this triggered Germany’s gold shopping spree. This was supported by the country’s growing gold bullion network that has made it easier for customers to buy and store gold bullion and coins.
Their concerns about the banking system drove up demand for the physical, allocated gold products of the 100-150 non-bank bullion dealers across the country. Investor behaviour shows that gold buyers are clearly seeking out physical gold that they can take delivery of should they so wish.
Where does it go from here?
‘…it is clear why the market boomed. Financial and economic crises brought gold to the attention of investors, and the resulting interest triggered a wave of product innovation and market development.’
Given the upshot in German demand following the financial crisis of 2008, it is understandable to look out for further economic downturns as an indication of future gold demand in Germany.
Bank of America Merrill Lynch Fund Manager Surveys, for example, highlight that European investors see FED/ECB policy mistakes as the most likely tail-risk event in the coming months, and around 30% of those surveyed believe Fed balance sheet reduction will be a risk-off event, causing a fall in both global bond and stock prices.
So does this mean demand for gold in Europe’s wealthiest country is set to increase? Perhaps, but it isn’t reliant on more financial upset. The WGC notes that ‘it is important to highlight that Germany’s gold market is not dependent on financial and economic crises.’
In the last decade the economy has performed relatively well in contrast to its fellow EU members. Unemployment is very low and wage growth at 4.4% this year is impressive when compared to the likes of the UK. Germans also remain positive about their own personal financial situations.
This suggests that Germans are not buying gold simply because they believe a financial crisis will happen but because they see it as an important portfolio diversifier which acts as a store of value.
In 2016, the WGC commissioned Kantar TNS to survey more than 2,000 German investors. Results showed:
– 59% of respondents agreed with the statement that gold will never lose its value in the long-term
– 48% agreed with the statement that owning gold makes me feel secure for the long-term
– 42% agreed with the statement I trust gold more than the currencies of countries
– 57% of bar and coin investors did so ‘to protect their wealth’
– 28% invest in bas and coins to make good returns in the long-term
When asked why they invest in gold, the answers were extremely insightful:
Today, gold is increasingly viewed by German investors as a regular form of saving: 25% of those surveyed in 2016 said their gold purchase had been part of a regular review of their investments, while 23% said it was part of their retirement planning.
We should all learn some German
If we are to believe Western media then this year’s decision by various central banks to start unwinding easy monetary policy is a signal that the gold price is set to fall. However Germans gold demand suggests otherwise.
It is clear that German investors are not swayed by the ‘newspeak’ the rest of the West seems so taken by. Whilst it is undoubtedly the 2008 financial crisis that set off the boom in gold demand, it is the value placed on gold as a diversifying asset that has sustained the market.
The ratio of investors buying gold bars and coins compared to those selling is around 10:1. This is despite the economy looking healthy and unemployment at its lowest since the 1990 reunification.
Clearly, German confidence in the economy is not expressed through their gold investments any longer. Instead it is their confidence in gold that keeps the market strong.
Investors and savers would be wise to pay attention to such investment logic. In countries such as the UK unemployment and wage growth are nowhere near as desirable as we see in Germany. Additionally, there are increased further uncertainties.
When the Germans sensed uncertainty following the financial crisis they did not panic about the global situation. They instead took a long hard look at their own banking system and began to diversify their savings. As a result they rediscovered their trust in gold which continues to grow year by year.
News and Commentary
Gold Prices (LBMA AM)
06 Nov: USD 1,271.60, GBP 969.72 & EUR 1,095.61 per ounce
03 Nov: USD 1,275.30, GBP 976.24 & EUR 1,094.59 per ounce
02 Nov: USD 1,276.40, GBP 965.09 & EUR 1,095.92 per ounce
01 Nov: USD 1,279.25, GBP 961.48 & EUR 1,099.52 per ounce
31 Oct: USD 1,274.40, GBP 964.21 & EUR 1,095.60 per ounce
30 Oct: USD 1,272.75, GBP 966.91 & EUR 1,093.80 per ounce
27 Oct: USD 1,267.80, GBP 968.35 & EUR 1,090.18 per ounce
Silver Prices (LBMA)
06 Nov: USD 16.92, GBP 12.90 & EUR 14.59 per ounce
03 Nov: USD 17.09, GBP 13.05 & EUR 14.67 per ounce
02 Nov: USD 17.08, GBP 12.98 & EUR 14.66 per ounce
01 Nov: USD 16.94, GBP 12.74 & EUR 14.55 per ounce
31 Oct: USD 16.82, GBP 12.72 & EUR 14.45 per ounce
30 Oct: USD 16.74, GBP 12.69 & EUR 14.39 per ounce
27 Oct: USD 16.72, GBP 12.76 & EUR 14.38 per ounce
Recent Market Updates
– Gold Price Reacts as Central Banks Start Major Change
– Why Switzerland Could Save the World and Protect Your Gold
– Invest In Gold To Defend Against Bail-ins
– Stumbling UK Economy Shows Importance of Gold
– Wozniak and Thiel Fuel Bitcoin-Gold Debate: Gold Comes Out On Top
– Russia Buys 34 Tonnes Of Gold In September
– Gold Will Be Safe Haven Again In Looming EU Crisis
– Gold Is Valuable Due to “Extreme Rarity” – Must See CNN Video
– Gold Is Better Store of Value Than Bitcoin – Goldman Sachs
– Next Wall Street Crash Looms? Lessons On Anniversary Of 1987 Crash
– Key Charts: Gold is Cheap and US Recession May Be Closer Than Think
– Gold Up 74% Since Last Market Peak 10 Years Ago
– How Gold Bullion Protects From Conflict And War
So far this year, as we have noted to you, Turkey has bought a huge amount of gold even for them: total 118 tonnes
Turkish central bank’s gold-buying spree has market asking how much and why
Turkey’s central bank is hoarding gold again. The question is, how much and why?
Official data show that Turkey added 3.8 million ounces of gold worth almost US$5 billion to reserves this year.
While actual purchases could be much less — the figure is skewed by metal deposited by commercial banks — even if Turkey bought just one-third of the reported amount, it would still rank among the top two or three buyers this year.
While the central bank cited a good old-fashioned diversification policy, some analysts speculated that the country could be shoring up reserves amid rising tensions between Turkey and its traditional Western allies.
“There could be any number of reasons why they’re doing this, we just don’t know,” Robin Bhar, a London-based analyst at Societe Generale SA, said by telephone. “One of the popular views is that they are fearful that their neighbors will antagonize them further, and that this will help them weather that storm.”
Gold futures on Friday fell 0.6 percent to US$1,270.50 an ounce, down 0.1 percent from last week’s US$1,271.80.
While Turkey has boosted reserves before, the recent increase comes amid deteriorating relations between the country and nations such as Germany and the US.
The central bank also started its latest buying spree as Turkish President Recep Tayyip Erdogan called for Turks to use gold instead of US dollars to help stem a drop in the Turkish lira.
Changes in official reserves are part of a strategy of diversification, the central bank said by text message, without elaborating.
“They like to have gold as a portion of their foreign reserves,” Cagdas Kucukemiroglu, a consultant for London-based Metals Focus Ltd, said by telephone from Istanbul. “The [Turkish] president has always been pro-gold and is against the dollar, and that’s informing the central bank’s decision as well.”
The Turkish government this year launched a campaign to get more so-called “under-the-pillow gold” holdings into the formal banking system.
The Turkish Undersecretariat of Treasury said it collected 2.47 tonnes of gold last month through sales of 728-day gold-based bonds.
Turkey’s gold holding is the 11th-biggest by country, according to the IMF.
Because that includes metal accepted in reserve requirements from commercial lenders, a more realistic estimate of the central bank’s purchases this year would be nearer to 1 million ounces, Macquarie Group Ltd analyst Matthew Turner said.
The only other major buyers this year are Russia, which boosted reserves by 5.3 million ounces, and Kazakhstan, which added 1 million ounces, IMF data show.
We now have the site for the Texas bullion depository in Bill Holter’s hometown of Austin
(courtesy Associated Press/GATA)
Site chosen for Texas bullion depository
Submitted by cpowell on Fri, 2017-11-03 14:48. Section: Daily Dispatches
From The Associated Press
via U.S. News & World Report, Washington
Friday, November 3, 2017
AUSTIN, Texas — An Austin-area city will be home to the Texas Bullion Depository, with construction expected to begin early next year.
Texas Comptroller Glenn Hegar today announced that the site will be in Leander, about 20 miles north of Austin. The exact location hasn’t been revealed for security reasons.
Hegar in June announced that Lone Star Tangible Assets of Austin was selected to build and operate the depository.
The 2015 Legislature approved a plan to start keeping the state’s gold holdings within its own borders, instead of in an underground vault at a New York City bank.
Officials haven’t said how much Texas gold will be stored at the new facility.
For the first time we have Hong Kong gold (physical trading) linked to the Mainland: Shenzen.
now more citizens will get their hands on physical gold
(courtesy Yiu/SCMP/Hong Kong)
Hong Kong gold trade linked to Shenzhen; Dubai, Singapore, Myanmar next?
Submitted by cpowell on Fri, 2017-11-03 15:12. Section: Daily Dispatches
900 Kilos of Gold Traded After Launch of New ‘Connect’ System Linking Hong Kong and Shenzhen
By Enoch Yiu
South China Morning Post, Hong Kong
Friday, November 3, 2017
Nine hundred kilos of gold, worth 300 billion yuan (US$38.45 billion) swapped hands on Friday evening in the first cross-border trading under the newly launched “Gold Connect,” which links the gold markets of Hong Kong and Shenzhen.
The first trades were made after a ceremony hosted by Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor and Haywood Cheung Tak-hay, president of the Chinese Gold and Silver Exchange Society
Under the scheme, mainland investors can trade yuan-denominated 1-kilogram gold bars in Hong Kong through one of the city’s 70 exchange members in Qianhai, the special economic zone in Shenzhen designed to facilitate the development of financial services that complement Hong Kong.
Investors can opt for settlement in cash or physical gold delivery.
The Shenzhen-Hong Kong Gold Connect is the city’s second such trading scheme after a linkup between Hong Kong and the Shanghai market in 2015. The new link has 70 Hong Kong companies taking part, compared with 30 in the Shanghai-Hong Kong Gold Connect.
“The Chinese Gold & Silver Exchange Society has a 108-year history and has been promoting offshore yuan gold trading in recent years,” said Carrie Lam Cheng Yuet-ngor. “The new Gold Connect to start tonight, as well as the gold vault in Qianhai, will help gold traders save time and money settling gold trades. This will benefit both Hong Kong and mainland gold traders and investors.”
Lam added that the new scheme would create closer ties between Hong Kong and Qianhai and credited the local gold bourse’s efforts to tie up with gold exchanges in Dubai, Singapore, and Myanmar as well.
The proposed gold vault will operate from April and be able to store 1,500 tonnes of gold, allowing mainlanders who trade the metal in Hong Kong via Qianhai to gain physical delivery.
Haywood Cheung said: “The new connect will boost the internationalisation of the yuan. The Shanghai Connect has already benefited international investors to trade gold in the mainland. The new Shenzhen leg will make it easier for 2,000 jewellery makers to trade gold in Hong Kong.”
While the Shanghai link allows Hong Kong investors only to trade on the mainland city’s gold exchanges, the Shenzhen link now allows mainlanders to trade in Hong Kong.
This is different from the two Stock Connect schemes that linked up share markets in Hong Kong and Shanghai in 2014 and Shenzhen last year. Both allow northbound and southbound trading.
Craig Hemke on the phony jobs report on Friday..a must read
(courtesy Craig Hemke/TFMetals Report)
Nothing Really Matters, Anyone Can See
The US labor force is rapidly shrinking. Wage growth is non-existent. The vast majority of the American people have no savings and little hope for economic improvement. But none of that matters with the G-3 central banks in charge!
So today saw the latest installment of the BLSBS. If you check your “mainstream” sources, you;ll be led to believe that everything is great and getting even better!
But look under the hood and you see that this is all bullshit. The unemployment rate that Drudge blares on behalf of Trump is only at its “lowest since 2000” because October saw an astonishing 968,000 people leave the labor force. This leaves the total number of people NOT in the labor force at a record 95,385,000. Then, as ZH notes, “this took place as the number of employed Americans declined by 484,000, however since the unemployment rate denominator dropped more, it translated into an actual decline in the unemployment rate!” Read all about it here: http://www.zerohedge.com/news/2017-11-03/people-not-labor-force-soar-record-954-million-968000-drop-out-one-month
Secondly, about this notion of “hiring bouncing back” and the “economy rebounds”. Do you recall this very prescient chart from Morgan Stanley? Well, the two hurricanes messed up the math BUT, since this BLSBS is all about “catch up”, let’s take another look:
If this chart had continued to be accurate (no hurricanes), the combined total of “new jobs” for September and October would have been 345,000. And what was the actual total? September was revised today to +18,000 and this latest report had October at 261,000. That’s a total of 279,000. Hmmmm. How about that for your “rebounding” economy and job market?!?
And the wage growth component was terrible, too, with wages FLAT month-over-month and coming in at a growth of just 2.4% year-over-year. This includes all of the high-end, top-salary types so can you imagine what the actual wage growth is for the vast majority of Americans who actually do all the living, working and dying? Try close to ZERO!
But, of course, here’s the thing. When the G-3 central banks attempt to control everything, none of this matters at all. In typical G-3 fashion, the all-important USDJPY sank on the news, it immediately double-bottomed and then moved higher at 45 degrees until it was right back to where it was at 8:29 EDT.
And as I type, nothing has changed in the time since. The USDJPY has continued to creep higher and I have a last of 114.10. CDG had nearly hit $1280 but it’s back to $1276 and CDS is now down 4¢ at $17.10.
So, in the end what happens? As per usual, average and everyday Americans continue to get squeezed as they work multiple jobs attempting to feed their families and pay their taxes. The filthy rich and Wall Street bankers line their pockets with ill gotten profits derived from the endless creation of fiat cash by the central bankers.
Oh, and don’t forget that you’re now repeatedly told about how “the Fed is tightening” and how this “makes the dollar stronger”. Yes, the dollar appears stronger but that only because other fiat is weakening even faster. Don’t believe me? Well check The Fed’s own charts! M1 and M2 money supply are both at all-time highs!!
And here’s a fun, little “anomaly” for you. Below is the same M2 money supply chart but I’ve added the price of Comex gold. The scales are off and this makes the chart a bit difficult to read. However, you can plainly see that, beginning in the fall of 2011, something changed. After tracking money supply growth pretty closely since 2002, there seems to be a bit of a disconnect. Gee, I wonder why and how?
But, whatever. It is what it is and as long as The Criminal Bankers remain in charge, not much is going to change.
To that end, look at what has happened to CDG and CDS while I’ve been typing! Though the USDJPY is still 114.10, suddenly prices are getting smashed lower. And why not? Again, when The Bankers control everything, they can pretty much do whatever they want.
So we’ll have to see where we finish the day. It certainly appears that this onslaught has been designed to take out the 200-day MA on a closing basis. For today, that level is $1268.40 so watch it closely.
It is obvious that non allocated gold and silver reference pricing will not work in London especially when you compare it to Shanghai
(courtesy Ronan Manly/Bullionstar)
Ronan Manly: Will anyone notice LME’s new gold and silver reference prices?
Submitted by cpowell on Sat, 2017-11-04 14:04. Section: Daily Dispatches
10:10a ET Saturday, November 4, 2017
Dear Friend of GATA and Gold:
Gold researcher Ronan Manly today analyzes the London Metals Exchange’s 2-month-old system of posting daily reference prices for gold and silver and finds it not yet very useful or competitive with the prices reported by the Intercontinental Exchange and London Bullion Market Association.
Manly concludes: “Ideally the London gold and silver markets do not need an additional benchmark reflecting fractionally-backed unallocated gold and silver trading, but a benchmark and reference price reflecting the trading of real physical gold and silver. However, as the LME has chosen not to upset the status quo of the London unallocated trading system, a system that remains one of the key determinants of the international gold price, then real physical gold and silver reference prices in the London market will unfortunately remain a pipe dream.”
Manly’s analysis is headlined “LME Gold and Silver Reference Prices: Will Anyone Notice?” and it’s posted at Bullion Star here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
With the Saudi problems in the weekend, bitcoin rises to $7590.00
(courtesy zerohedge/Sunday night)
a must read..
(courtesy Bill Holter/Sinclair-Holter collaboration)
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 9.23 POINTS OR .04% /USA: YEN RISES TO 114.07
3. Europe stocks OPENED RED /USA dollar index RISES TO 94.94/Euro DOWN TO 1.1596
3b Japan 10 year bond yield: LOWERS TO . +.024/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 114.07/ 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:: 55.94 and Brent: 62.54
3f Gold UP/Yen DOWN
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil UP for WTI and UP FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.338%/Italian 10 yr bond yield DOWN to 1.781% /SPAIN 10 YR BOND YIELD DOWN TO 1.478%
3j Greek 10 year bond yield FALLS TO : 5.131???
3k Gold at $1271.05 silver at:16.87: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 8/100 in roubles/dollar) 58.97
3m oil into the 55 dollar handle for WTI and 62 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED DEVALUATION SOUTHBOUND
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 114.07 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 1.0006 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1603 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 +0.338%
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 2.323% early this morning. Thirty year rate at 2.803% /
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Global Stocks Drift Lower As US Futures Rebound From Overnight Scare, Oil At 2 Year Highs
Following an early shaky start, which saw the Hang Seng tumble as much as 1.6% driven by weakness in financials and real estate names following the latest warning by PBOC governor Zhou about “sudden, complex, hidden, contagious, hazardous” risks In markets and a decline in local real estate prices, and pressure global risk, US equity futures have recouped all losses and are back to unchanged on monday morning, as President Trump continues on his first official trip to Asia. An “anti-corruption” purge in Saudi Arabia, including the arrest of Prince Alwaleed bin Talal will put stocks including Citigroup, Twitter and Apple – some of his major holdings – in focus according to Bloomberg. it also helped sent oil prices to the highest level since July 2015. In company news, talks between Sprint’s majority owner, SoftBank, to combine the carrier with T-Mobile US collapsed over the weekend.
Following a torrid weekend for newsflow, when among other things we learned that NY Fed president Bill Dudley is retiring, Monday morning has been a far more subdued affair, and European markets have enjoyed a quiet start to the week, apart from ongoing speculation over Dudley’s departure; USD unwinds small overnight rally, with USD/JPY retracing gains seen after Trump’s comments on trade initially weakens JPY; GBP/USD approaches high set on Friday in reaction to non-farm payrolls. European stocks hold small losses across the board, banks underperforms. Telecom sector also weakens after Deutsche Telekom falls 3.7%, spurred by collapse of the Sprint/T-Mobile deal. Overnight gains in iron ore futures helped support mining stocks and other base metals. As Bloomberg’s rates commentators note, reduced supply this week drives up core EGBs, led by bund futures; USTs rise in tandem. Large BTP/bund block trade pushes peripheral spreads marginally wider.
European stocks were mixed before edging slightly lower after their seventh weekly advance in eight, even as the latest European PMI prints indicated strong survey momentum has continued at the start of the fourth quarter. Basic resource shares outperformed as the Bloomberg Commodity Index rose to the highest since March, but they were offset by retreating banks and telecom companies.
The Stoxx Europe 600 Index fell less than 0.1%, with miners headed for their highest level since January 2013, and leading gains as they track metal prices higher. SBM Offshore slides after making a provision of $238m in relation to a reopened investigation into legacy issues and Unaoil, based on discussions with the U.S. Department of Justice.
News out of Asia was a dominant theme for many assets, with inflation comments from Bank of Japan Governor Haruhiko Kuroda, remarks on excessive leverage from his Chinese counterpart Zhou Xiaochuan and the grievances on trade from Trump. The yen declined before erasing the loss, and stocks in the region were mixed. Asian stocks edged lower for a second consecutive session after China’s central bank Governor Zhou Xiaochuan warned that the mainland’s financial system is becoming significantly more vulnerable due to high leverage. The MSCI Asia Pacific Index was down 0.1% to 169.72. Financial stocks led the decline, with AIA Group Ltd. being one of the biggest drags. Westpac Banking Corp. also fell after its full-year profit missed estimates. The Topix index retreated from the highest level in more than a decade as technical indicators suggest the gauge is overheating.
“Zhou highlighting concerns of excess leverage and thus more regulation is weighing down on stocks,” said James Soutter, a Melbourne-based fund manager at K2 Asset Management Ltd. “If they do that, it might slow down China’s growth, which may impact the region.” Gains by technology stocks such as Tencent Holdings Ltd. and Sony Corp. helped pare the earlier decline of as much as 0.6 percent in MSCI’s broadest gauge of Asian stocks. MISC Bhd rose as much as 8 percent, the most in four years, after reporting a surge in profit for the third quarter. Analysts upgraded the stock after highlighting improvement in all business
Oh, and speaking of that Hang Seng early drop, don’t worry: the BTFDers emerged, and Hong Kong’s benchmark gauge erased a drop of as much as 1.6% to close little changed. AAC Technologies Holdings and Tencent Holdings climbed while the city’s developers slumped; AAC Technologies surges 10% to a record price, while Tencent adds 2.5%. As a result, the Hang Seng Index closes little changed at 28,596.80 even as Hang Seng China Enterprises Index dropped 0.7%, paring an earlier loss of 2%. Additionally, the Shanghai Composite Index adds 0.5%, erasing a retreat of 0.5% while the ChiNext Index added 1%.
Among the key weekend events, a helicopter transporting eight Saudi officials including Prince Mansour bin Muqrin (Deputy Governor of the Asir Province) reportedly crashed near Abha. Additionally, Prince Alaweed bin Talal who is the largest shareholder of Citi and the second largest shareholder of 21st Century Fox was among 10 other princes and 4 ministers were arrested on Saturday night. This has been billed as a corruption crackdown, although what it really is, is a power grab from Crown Prince Mohammed bin Salman.
In the UK, Chancellor Hammond is said to scrap plans to raise business rate tax by 3.9% in April. Bank of England Governor Carney said that if Brexit turned out to be worse than policymakers currently expect, it was possible that
the BoE would not be able to cut interest rates in the future due to inflationary pressure.
Meanwhile in Japan, President Trump said that TPP agreement is not the right idea, adding that the US has suffered massive trade deficits at hands of Japan for many years.
U.S. 10-year Treasuries find support from rally in core and peripheral bonds in Europe; bund futures extend gains on higher volumes after stop losses are triggered on short positions; currency traders fail to find inspiration as majors are trapped in narrow ranges; euro dips briefly after interbank investors add to long dollar positions, though better-than-forecast euro-area PMI for October staves off a bigger drop for the common currency
In commodities, WTI gained 0.6 percent to $55.97 a barrel, the highest in about nine months. Gold increased 0.1 percent to $1,271.66 an ounce. Copper rose 1 percent to $3.15 a pound, the highest in more than a week.
All eyes today will be on retiring NY Fed President William Dudley who is scheduled to give a speech on “Lessons from the Financial Crisis” just after noon at an Economic Club of New York luncheon. Central Bank of Mexico Governor Agustin Carstens speaks at an event hosted by Comexi, the Mexican Council for International Affairs.
Ahead of a light week for economic data releases investor focus has turned to Asia and the U.S. president’s visit to the region. Trump has already brought up trade grievances about both China and Japan and has warned nations against challenging the U.S. He goes on to South Korea and China this week. News on central bankers also will be closely watched, writes Bloomberg. Federal Reserve Bank of New York President William Dudley is close to announcing his retirement, CNBC reported late on Saturday. His early departure would mean the top three positions at the Fed changing over within a relatively short period. Trump announced last week that Fed Governor Jerome Powell will be nominated to replace Janet Yellen when her term expires in February. Vice Chairman Stanley Fischer retired in mid-October.
Bulletin Headline Summary From RanSquawk
- European bourses lead from Asia and trade on the backfoot, while oil prices rise on Saudi Royal Purge
- USD/JPY rises to highest level since March as Trump criticises Japan’s trade practises with the US, alongside BoJ jawboning
- Looking ahead, highlights include a possible retirement speech from Fed’s Dudley
- S&P 500 futures little changed at 2,581.75
- STOXX Europe 600 down 0.01% to 396.02
- MSCI Asia unchanged at 169.84
- MSCI Asia ex Japan unchanged at 556.69
- Nikkei up 0.04% to 22,548.35
- Topix down 0.08% to 1,792.66
- Hang Seng Index down 0.02% to 28,596.80
- Shanghai Composite up 0.5% to 3,388.17
- Sensex up 0.3% to 33,798.88
- Australia S&P/ASX 200 down 0.1% to 5,953.78
- Kospi down 0.3% to 2,549.41
- German 10Y yield fell 2.6 bps to 0.338%
- Euro down 0.1% to $1.1596
- Italian 10Y yield fell 0.4 bps to 1.527%
- Spanish 10Y yield fell 0.6 bps to 1.468%
- Brent futures up 0.5% to $62.38/bbl
- Gold spot up 0.04% to $1,270.41
- U.S. Dollar Index up 0.03% to 94.97
Top Overnight News
- Trump told a gathering of business leaders in Tokyo that Japan has an unfair advantage on trade and that he intends to fix that imbalance by making it easier to do business in the U.S.
- Ousted Catalan president Carles Puigdemont and four former members of
his government were released in Brussels pending a court ruling on an
international arrest warrant issued by Spain
- Mnuchin reiterates goal to get tax reform bill to Trump in 2017
- Carney says BOE might not be able to cut interest rates if Brexit deal worse than expected
- PBOC’s Zhou warns China’s financial system is getting more vulnerable
- Kuroda: BOJ will continue powerful easing; 2% inflation still a long way
- Saudi corruption crackdown sees senior princes, top billionaire arrested
- U.K. Prime Minister Theresa May meets other party leaders to discuss steps to tackle sexual harassment in U.K. politics
Asian markets began the week on the backfoot. ASX 200 (-0.10%) slightly lower following a soft earnings report from Westpac (- 2.5%), subsequently failing to reach the 6000 mark. Chinese markets, in particular the Hang Seng (-0.02%) underperformed as PBoC Governor Zhou warned of risks over debt and the need to eliminate zombie companies. President Trump kicked off his tour of Asia in Japan, whereby the President stepped up his rhetoric of a tough stance being needed over North Korea. Additionally, the President also criticised the TPP agreement, noting that the US has suffered massive trade deficits with Japan for many years. PBoC sets CNY mid-point at 6.6247 (Prev. 6.6072). Bank of Japan meeting minutes from Sep 20-21 states that momentum towards price goal is being maintained. One member said current yield curve is not sufficient to achieve 2% inflation target, adding that a further increase in demand needed to raise prices. Bank of Japan Governor Kuroda expects Japans economy to steadily move toward achieving 2% inflation target, adding that the BoJ will persistently continue powerful easing.
Top Asian News
- Turkey Central Bank Boosts Lenders’ FX Buffers on Weak Lira
- Billionaire Olayan Family Is Said to Put Saudi IPO Plans on Hold
- San Miguel to Sell Unit’s Shares After Merging Liquor Assets
- PBOC Chief’s Latest Warnings Seen Signaling Tougher Debt Stance
- DBS Profit Sinks as Bank Tries to Put Bad Energy Loans Behind It
- Evergrande’s Unit Hengda Raises 60b Yuan in Third Round Funding
- China is Finally Going After Click Farms and Fake Online Sales
European equities traded heavy across the board with a risk off tone seemingly creeping into the market. The crackdown on corruption in Saudi Arabia has been a likely catalyst to this, one iconic target of the purge is billionaire tycoon, Prince Alwaleed bin Talal, a significant investor in the likes of Twitter, Citigroup, Accor and Twenty-First Century Fox. Accor trades as one of the laggards in the Cac following the aforementioned probe, with Deutsche Telekom the notable European underperformer following news that merger talks between Sprint and T-Mobile US have ended. Elsewhere, material names trade in the marginal green, buoyed by the a buoyant iron ore market. JGBs set the tone in fixed income markets, rallying strongly through Monday’s trade, a bullish bond market flooded into European bonds, with a 10k Bund order seeing the future contract trade firmly through 163.00 with the next touted resistance to be at 163.43. The Saudi international bond spreads have now widened by about 5bps following the anti-corruption crackdown.
Top European News
- SocGen Drags Banks Down as Analysts Cut EPS Ests., Price Targets
- Deutsche Telekom Falls On Sprint Deal Collapse; Watch Towers
- U.K. October Car Sales Plunge 12% in Seventh Consecutive Drop
- Euro-Area Economic Boom Spurs Fastest Job Creation in a Decade
In currencies, USD
Non-farm Monday trade has set the tone this European morning, with the Greenback trading in a rangebound fashion throughout the Asian and early EU sessions. EUR/USD longs have struggled following Friday’s NFP release, with the pair trading back below 1.60, however, the consolidation does continue, trading around the 1.60 area, with bears looking for a clean break below. GBP: weekend commentary from BoE Governor Carney, stating that if Brexit turned out to be worse than policy makers expectations, it could be possible that the BoE would be unable to cut interest rates in the future due to inflationary pressures. Sterling was relatively unfazed, following the subdued tone. JPY: The US President, on his tour of Asia, is currently in Japan. He has commented on trade, stating that TPP agreement is not the right idea, adding that the US has suffered massive trade deficits at hands of Japan for many years. The Japanese currency has been very marginally weaker overnight, following a fail of a test of 115.00.
In commodities, oil markets have been dictated to by the Saudi Arabian news, with the uncertainty resulting in oil prices seeing a 2 year high, as WTI crude futures briefly retook USD 56.00/bbl. Precious metals have come off post NFP lows with bids supported by the growing risk tone, Gold’s 1265.00 area continues to behave as key support, with silver seeing a simultaneous bounce around 16.75.
Looking ahead, there is no data due in the US however the NY Fed’s Potter and Fed’s Dudley are both due to speak. Euro area finance ministers will also discuss completing the banking union and fiscal rules for the EMU.
US Event Calendar
- No major econ releases scheduled
- 12:10pm: Fed’s Dudley Speaks on Lessons from the Financial Crisis
DB’s Jim Reid concludes the overnight wrap
It’ll be a quieter week to be in the US as the post payrolls period is always on the lighter side data wise but this week we’ll have plenty of newsflow on the US tax plan and we’ll likely wake up to new Mr Trump headlines most mornings as his Asian tour is now in full flow.
Today will kick start the process for markups of the tax bill and the House is expected to vote on a final draft towards the end of the week. At the same time, the Senate will release its own version of the bill, which could differ significantly from the House’s. In our economist’s view, the sticking points remain the same: the capping of the mortgage interest deduction and proposed repeal of the state and local tax deduction. Already, the National Association of Homebuilders and the National Federation of Independent Business have voiced opposition to the House bill, which is noteworthy given their relatively conservative leanings. So work still to be done. DB are hosting a conference call today (Kelly, Hooper & Slok) at 8am EST on what to expect from this and from new Fed Chair Powell. Details at the very end. For the full week ahead and easy to read cut-out and keep of all events click on “Next week… this week”. The day by day week ahead is copied at the end today.
On Saturday night, Saudi Arabia’s King Salman announced a sweeping anticorruption drive and ordered the arrest of Prince Alwaleed bin Talal, ten other senior members of the royal family, four cabinet ministers and former top officials. Bloomberg noted initial public reaction within the country may be positive with many sharing a video clip showing the Crown Prince Mohammed bin Salman noting no one is above the law. It is too early to know the follow on implications, but note that Prince Alwaleed is the world’s 50th richest person with worth of $19bln and has stakes in Citigroup, Twitter and JD.com. His investment firm Kingdom Holding Co’s share price dropped 7.6% on Sunday.
Over in Japan, President Trump told a group of business leaders that “for the last many decades, Japan has been winning (on trade). You do know that…right now our trade with Japan is not fair and it isn’t open”, and that Japanese car makers should “try building your cars in the US instead of shipping them over”. Elsewhere, he reiterated that his decision to withdrawal from the Tran-pacific partnership free trade agreement will be “ultimately proven right”, and that he sees easing trade restrictions in other ways, although did not elaborate.
Turning to Catalonia which had a new twist over the weekend. Back on Friday, a Spanish judge issued an arrest warrant for ousted Catalan President Puigdemont and four others currently living in Belgium, noting they promoted “violent force” and incited “insurrection”. Then on Sunday, Puigdemont voluntarily turned himself in to Belgium police, saying “I won’t flee justice….but to real justice”, noting that Spanish courts “can’t guarantee a fair and independent sentence that will be free of the enormous weight and influence of politics”. Later on Monday morning, a Belgium judge has released Puigdemont, but he is required to reappear before a court in Brussels within 15 days, which will potentially decide to carry out an extradition process or not. Interestingly, Puidgemont’s PdeCAT party has put his name forward as a candidate for the upcoming regional election to be held on 21 December, while the Spanish Government spokesman Mendez de Vigo said “any politician can run in the election unless he / she has been convicted of a crime”. Elsewhere, according to a new poll by La Vanguardia, it shows the Catalan secessionist coalition could win the new election with 66-69 seats, but this may not be enough to secure a clear majority in the regional assembly as 68 seats are required. The Spanish IBEX fell 0.96% and 10y yields fell 0.4bp last Friday.
Now onto China, after issuing a verbal warning of a “Minsky moment” two weeks ago, China’s central bank Governor Zhou published an article on the bank’s website over the weekend, noting that while the overall health of the financial system is good, risks are accumulating with some that are “hidden, complex, sudden, contagious and hazardous” and that “high leverage is the ultimate origin of macro financial vulnerability”. His comments could add to the concerns that regulators may intensify the deleveraging drive in China. Elsewhere, as per Bloomberg he also noted: i) China’s financial regulation lags international standards…ii) China should increase direct financing and expand the bond market, reduce intervention in the equity market and reform the IPO system, iii) China should let the market play a decisive role in the allocation of financial resources and iv) China should improve the coordination among financial regulators. Interesting stuff!
This morning in Asia, markets are trading slightly lower. The Hang Seng has pared back losses to be down 0.59%, partly impacted by Governor Zhou’s comments on leverage and softness in property developer stocks. Elsewhere,the Nikkei is marginally higher (+0.08%) while the Kospi (-0.34%) and ASX 200 (-0.10%) are down slightly as we type.
Away from the markets and onto central banker’s commentaries. BOE Governor Carney noted that the BOE is working on the assumption that Brexit transition will be eventually smooth, but when asked if Brexit was much worse than expected, could it prevent the BOE from cutting rates even when growth is slowing, he noted “that’s an extreme possibility but it’s a possibility”, although “we’ll supply as much support as we can during this course of adjustment”. Elsewhere on Brexit, the Confederation of British Industry President Drechsler noted “I’m reminded of a prime-time soap opera (re Brexit), with a different episode each week…” and appeal for a “single, clear strategy” for transition as Brexit is “only 508 days away, but for many businesses, their alarm clock are set even earlier than that”.
With Fed Governor Powell’s nomination as the next Fed Chair now official, our US economists take a closer look at the key implications of what this could mean for the markets, including: i) continuity of monetary policy, ii) reasonably high degree of continuity in terms of leadership style, and iii) changes to the Fed’s communication policy, potentially to be more brief and to the point. For more details, refer to link.
Staying in the US, a new poll by ABC News & Washington Post showed President Trump’s approval rating is now 37%, the lowest since 1946 for any president at this point in their first term based on polling data. Approximately 55% +14ppt since April) say the President is not delivering on major campaign promises. Perhaps this will add impetus to deliver the tax reforms by Christmas as per President Trump’s plans.
Over the weekend, there were also more rhetoric on the tax plan via Sunday talk shows. Republican senator Lankford noted that he can’t support the party’s tax bill “if the measures balloons the debt (too much)”. Elsewhere, VP Mike Pence said the “right type of tax cuts” such as immediate cut to corporate tax rates could lead to GDP growth of 3.5%-4%, which is a claim also backed up by House Majority Whip Steve Scalise. Finally, House speaker Ryan said the Republicans have learned from past experience, so the House and Senate will better coordinate and move together, so the difference from the two version of the tax bills should be small.
Now quickly recapping markets performance on Friday. US equities strengthened further (S&P +0.31%; Dow +0.10%; Nasdaq +0.74%) to fresh record highs, supported by Apple which guided to higher than expected salesfor the upcoming December quarter (shares +2.6%). Within the S&P, modest gains in IT and health care sectors were partly offset by losses from financials and materials names. European markets were broadly higher with both the Stoxx 600 & DAX up 0.28%, while the FTSE rose marginally (+0.07%) and Spain’s IBEX underperformed (-0.96%). The risk on bias contributed to the VIX falling 8.0% to a new all-time low of 9.14.
Over in government bonds, yields were little changed with UST 10y down 1.3bp following the miss on headline non-farm payrolls. Core European bond yields were marginally lower, with Bunds and OATs down 0.9bp and 0.7bp respectively, while Gilts were broadly flat. Turning to currency, the US dollar index and Sterling gained 0.27% and 0.14% respectively, while the Euro fell 0.43%. In commodities, WTI oil rose 2.02% to $55.64/bbl and back towards its YTD high.
Before we take a look at today’s calendar, we wrap up with other data releases from Friday. In the US, the macro data was a bit mixed. The headline change in October nonfarm payrolls was lower than expected at 261k (vs. 313k), but is more in line if factoring in the upward revision of 51k to the prior month’s reading. The labour market remains solid with the October unemployment rate down to 4.1% (vs. 4.2% expected) – the lowest since December 2000. However, labour force participation rate has declined to a six-month low of 62.7% and the average hourly earnings growth was weak, flat for the month (vs. 0.2% expected) and 2.4% yoy (vs. 2.7% expected). Last month’s spike could have been more storm related than previously thought.
The October ISM non-manufacturing composite was above expectations at 60.1 (vs. 58.5 expected) – the highest since August 2005 and the September factory orders also beat at 1.4% mom (vs. 1.2% expected). Moving along, the final reading for September durable goods orders was unrevised at 2% mom but core capital goods orders was revised 0.4ppt higher to 1.7% mom. Elsewhere, the trade deficit for September was broadly in line at -$43.5bln (vs. -$43.2bln expected). The October Markit PMI composite was slightly lower than last month at 55.2 (vs. 55.7 previous) while the services PMI was softer than expected at 55.3 (vs. 55.9 expected). Finally, following the recent data updates, the Atlanta Fed’s GDPNow estimate of 4Q GDP growth has fallen back to 3.3% saar, broadly similar to the NY Fed’s Nowcast estimate of 3.2% saar.
The UK’s October Markit PMI for composite was above consensus at 55.8 (vs. 53.8 expected) and the services PMI was also higher at 55.6 (vs. 53.3 expected) – the highest since April 2017.
3. ASIAN AFFAIRS
i)Late SUNDAY night/MONDAY morning: Shanghai closed UP 16.43 points or .49% /Hang Sang CLOSED DOWN 6.81 pts or 0.02% / The Nikkei closed UP 9.23 POINTS OR .04%/Australia’s all ordinaires CLOSED DOWN 0.05%/Chinese yuan (ONSHORE) closed DOWN at 6.633/Oil UP to 55.94 dollars per barrel for WTI and 62.54 for Brent. Stocks in Europe OPENED RED . ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.633. OFFSHORE YUAN CLOSED WEAKER TO THE ONSHORE YUAN AT 6.635 //ONSHORE YUAN WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO THE DOLLAR/. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS NOT VERY HAPPY TODAY.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
NORTH KOREA//SOUTH KOREA
3b) REPORT ON JAPAN
Japanese yen initially fell for two reasons:
1.Trump being angry with trade as Japan always has a surplus trade with the USA
2. Kuroda wishes to continue with a weakened yen to help his exports
Yen Tumbles On Trump, Kuroda Comments As Japan Comes Back From Long Weekend
Amid President Trump’s visit, Abe’s calls for more sanction and general militarization, the Japanese came back from their long weekend and decided it was time to panic-sell JPY in favor of the dollar the open. The yen slumped as much as 0.6% moments ago to an 8-month low against the dollar…
… for two parallel reasons: first, Trump complained about the US-Japan trade relationship while in Tokyo for the first stop of his tour of the region. Trump was speaking to business leaders in Tokyo and said that US trade with Japan is “not fair” and isn’t open. He said it’s “not free and not reciprocal” and that the Trans-Pacific Partnership “was not the right idea”. Trump also complained that the US had experienced “massive trade deficits” with Japan.
Following the comments, the USDJPY jumped as much as ¥114.73 per dollar, the weakest level for the Yen since March 15, before exporters started selling dollars, according to an Asia-based FX trader.
An additional driver of the weakness in JPY was a speech by BOJ Governor Kuroda meant to further weaken the Yen – and which ironically came as Trump was indirectly bashing the weak Japanese currency – who confirmed the BoJ will continue with powerful easing, saying that “there’s still a long way to getting to the 2% inflation target” and added that it is “crucial for people to actually experience inflation above 2%.”
Stock futures initially kneejerked higher with them but quickly reversed it all…
TSY yields – with which USDJPY has a high correlation – are also ticking higher, and as Citi concludes, the “JPY seems to be under attack from all sides – BoJ, Trump, Treasuries.”
3C CHINA REPORT.
Trouble in the shadow banking sector in China, China bond yields are rising due to deleveraging. However the shadow banking sector still has investors keeping their high yielding instruments. The key problem here is that their entire shadow banking sector is seeing less funds coming in which is needed to sustain the Ponzi scheme. The big question is how many trillions of yuan must be printed to make the entire sector whole
(courtesy zero hedge)
China: Shadow Bank Inflows Are Critical To Sustain The Ponzi… But They’re Falling
During the Party Congress, even China’s somewhat watered down versus of the free markets was suspended so as not to disturb the glorification of Xi Jinping as the nation’s greatest leader since Mao. Returning to “business as usual”, some commentators have been disturbed by the continued rise in government bond yields with the 10-year hitting 3.93% earlier this week.
Bloomberg described it this morning as a “tumultuous few days”.
We also noted Huachuang Securities Co. comment that bond holders may be about to get hit by “daggers falling from the sky,” if the Party adopts more aggressive deleveraging policies. In a far less sensationalist way, the Wall Street Journal has attempted a post-mortem on the recent sell-off in the Chinese government bond market.
Catching sight of a chain reaction in China’s markets is rare.
Carrying out a postmortem of a recent selloff in China’s $9 trillion bond market shows how it is becoming harder for Beijing to untangle its increasingly intertwined financial system. In the aftermath of China’s twice-a-decade party congress last week, yields on benchmark 10-year Chinese government bonds spiked to 3.9%, their highest in three years. Government bond futures fell.
Reasons proffered for the sudden rout ranged from expectations of higher U.S. interest rates to general fearmongering.
Having acknowledged the growing complexity of China’s financial system, WSJ provides a valuable insight, noting the relative stability of corporate bond yields during the recent sell-off in the government sector…
An important anomaly to note about the bond rout: as government bonds sold off, yields on less-liquid, unsecured Chinese corporate bonds barely moved.
That is atypical in an environment of rising rates – usually, bond investors shed their less-liquid holdings and hold on to assets that are more easily tradable, like government debt.
Using this handy (kind of) diagram of flows in China’s financial system…
…WSJ tries to explain “how the selloff in China really worked”.
In essence what happened is that, as funding costs for Chinese banks have risen, they have been forced to compensate by placing more money in the shadow banking sector, with all the risks that entails (i.e. leverage and risky assets). Here’s the Journal’s version.
Let’s start with the travails of China’s small and midsize lenders that—like most banks—fund themselves by taking in customer deposits and by borrowing in wholesale markets.
In China, the latter has increasingly meant issuing short-term bonds known as NCDs, or negotiable certificates of deposit. The trouble for Chinese banks of late is that both these funding sources have become expensive: Borrowing costs have risen as Beijing pursues its deleveraging campaign, while bank-deposit growth has also been slowing.
To balance out these rising costs, banks have been placing more of their money with so-called nonbank financial institutions—the likes of trust companies, funds and securities companies—that offer high returns from investing in various markets, from bonds to stocks and commodities.
Deposits placed by banks with these nonbanks – the bulwarks of China’s infamous shadow banking system – had grown to more than $4 trillion as of September this year.
Okay, this is where things get more interesting.
Please bear in mind that (as we’ll explain later) a key pillar supporting the stability of China’s financial system is the maintenance of rising flows into the Chinese shadow banks.
This Bloomberg chart shows the rapid growth in China’s shadow banking system in recent years.
The WSJ explains that the reduction in flows into the shadow banks has led to redemptions and something had to be sold quickly...
But with less funds coming into banks now, less can go out. That has led to trouble for the nonbanks, which, after years of only ever-higher inflows, have started facing redemptions.
Banks’ claims on nonbanks have dropped 2% since peaking in June, according to Wind Info, equivalent to a $90 billion withdrawal of funds.
In addition to these redemptions, the cost for nonbanks of juicing returns on their investments by leveraging up has also risen because of the higher interest rates mentioned above.
That brings us to the bond market. Faced with redemptions, nonbanks have needed to sell something, and quickly. Offloading highly liquid government bonds has proven the easiest option.
Meanwhile, the nonbanks have held on to their higher-yielding corporate bonds, which at least have the benefit of helping them to maintain high returns.
We think that the Journal’s analysis is correct…but it doesn’t fully appreciate the bigger picture regarding shadow banks’ need to “maintain high returns”.
China’s shadow banks are, in part, engaged in Ponzi schemes, for example in the $4 trillion Wealth Management Products (WMP) sector. In May 2017, Forsea Insurance, one of China’s largest insurers, warned that there would be “mass defaults and social unrest” if it was prevented from selling new WMPs to meet payouts. See “Chinese Insurer Warns Of ‘Mass Defaults, Social Unrest’ Due To ‘Mass Redemption’ Run”.
A month earlier, Minsheng Bank, China’s largest private bank, was found to have committed a RMB 3.0bn fraud by selling non-existent WMPs. See “Investors Rage After 3 Billion Yuan Vanish From China’s Largest Private Bank”.
The sell-off in Chinese government bonds implies that the deleverage in shadow banking we identified in September in beginning to bite.
We are in the last lap of the Chinese Ponzi as, piece by piece, the whole decrepit system is being exposed. In the end, it will boil down to how many trillions of RMB the PBoC needs to print to make the banks and their shadow banking relatives whole.
First it was Kyle Bass that sounded the alarm bell on China’s huge 40 trillion debt. Now it is non other than PBOC;s Zhou who warns of a sudden, complex, hidden, contagious and hazardous risk in the debt market in China which will have a profound effect on global finances
PBOC’s Zhou Warns Of “Sudden, Complex, Hidden, Contagious, Hazardous” Risks In Global Markets
Just two weeks after warning of the potential for an imminent ‘Minsky Moment’, Chinese central bank governor Zhou Xiaochuan has penned a lengthy article on The PBOC’s website that warns ominously of latent risks accumulating, including some that are “hidden, complex, sudden, contagious and hazardous,” even as the overall health of the financial system appears good.
The imminence of China’s Minksy Moment is something we havediscussed numerous times this year.
The three credit bubbles shown in the chart above are connected. Canada and Australia export raw materials to China and have been part of China’s excessive housing and infrastructure expansion over the last two decades. In turn, these countries have been significant recipients of capital inflows from Chinese real estate speculators that have contributed to Canadian and Australian housing bubbles. In all three countries, domestic credit-to-GDP expansion financed by banks has created asset bubbles in self-reinforcing but unsustainable fashion.
And then at the latest Communist Party Congress meeting in Beijing, the governor of the PBoC (People’s Bank of China) said the following;
“If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a ‘Minsky moment’. That’s what we should particularly defend against.”
Yet, stock markets shrugged off his warning… while the Chinese yield curve has now been inverted for 10 straight days – the longest period of inversion ever…
The nation should toughen regulation and let markets serve the real economy better, according to Zhou.
The government should also open up financial markets by relaxing capital controls and reducing restrictions on non-Chinese financial institutions that want to operate on the mainland, he wrote.
“High leverage is the ultimate origin of macro financial vulnerability,” wrote Zhou, 69, who is widely expected to retire soon after a record 15-year tenure.
“In sectors of the real economy, this is reflected as excessive debt, and in the financial system, this is reflected as credit that has been expanding too quickly.”
Zhou’s comments signal that policy makers remain committed to a campaign to reduce borrowing levels across the economy.
Concern that regulators may intensify the deleveraging drive after the twice-a-decade Communist Party Congress has helped push yields on 10-year government bonds to a three-year high.
Still, measures of credit continue to show expansion, with aggregate financing surging to a six-month high of 1.82 trillion yuan ($274 billion) in September. China’s corporate debt surged to 159 percent of the economy in 2016, compared with 104 percent 10 years ago, while overall borrowing climbed to 260 percent.
- China’s financial system faces domestic and overseas pressures; structural imbalance is a serious problem and regulations are frequently violated
- Some state-owned enterprises face severe debt risks, the problem of “zombie companies” is being solved slowly, and some local governments are adding leverage
- Financial institutions are not competitive and pricing of risk is weak; the financial system cannot soothe herd behaviors, asset bubbles and risks by itself
- Some high-risk activities are creating market bubbles under the cover of “financial innovation”
- More companies have been defaulting on bonds, and issuance has been slowing; credit risks are impacting the public’s and even foreigners’ confidence in China’s financial health
- Some Internet companies that claim to help people access finance are actually Ponzi schemes; and some regulators are too close to the firms and people they are supposed to oversee
- China’s financial regulation lags behind international standards and focuses too much on fostering certain industries; there’s a lack of clarity in what central and regional government should be responsible for, so some activities are not well regulated
- China should increase direct financing as well as expand the bond market; reduce intervention in the equity market and reform the initial public offering system; pursue yuan internationalization and capital account convertibility
- China should let the market play a decisive role in the allocation of financial resources, and reduce the distortion effect of any intervention
- China should improve coordination among financial regulators
Which all sounds very ominous and very positive in ending this facade..but just like the promises/threats ofprevious deleveragings – at the first sign of market jitters, the bankers will fold. As Kyle Bass recently concluded…
“…it’s the biggest bubble we have ever seen in the history of financial markets. $40 trillion of assets in a system with $2 trillion in equity.”
Aside from China’s credit bubble, the simmering conflict in North Korea and tensions between the US and China related to the latter’s insistence on building in the Spratly Islands also threaten China’s economy, as well as global risk assets.
“We’re now in a bubble of epic proportions for Chinese credit…everything seems to be bubbling to the top and reaching a boiling point almost concurrently.”
To be sure, there are a lot of powerful interests around the world that would suffer if China’s economy collapsed. But despite this, because he believes in the position, Bass is going to stay on his side of the trade – even as other longtime China bears like Mark Hart announced this week that he was abandoning a seven-year long bet on a massive yuan devaluation.
“People so want for everything to be okay. Nobody in their right mind wants us to be right because if I’m right were going to see a global growth slowdown you think about the concentric circles of how it affects each participant.
The economy may really slow down and we might have additional problems…so I’m going to keep investing the way I am and hope it all works out.”
Ousted Catalan leader Puigdemont turns himself in to the Belgian police who will have their hands full on a extradition hearing.
Ousted Catalan Leader Turns Himself In To Belgian Police
Ousted Catalan president Carles Puigdemont and four ex-ministers on Sunday turned themselves in to Belgian authorities to start the process of their possible extradition to Spain. Puigdemont was accompanied by four other former Catalan officials who are also wanted by Spanish authorities after they fled to Belgium last week after their removed from power by Spanish authorities as part of an extraordinary crackdown to impede the region’s illegal declaration of independence.
According to AP, a spokesman for the Brussels prosecutor’s office, Gilles Dejemeppe, said the five presented themselves to federal police and have been in custody since 9 a.m. (0800 GMT; 3 a.m. EST). He said that they have not been arrested and that Puigdemont and the four ex-ministers will be heard by an investigative judge Sunday afternoon.
The judge will have to decide what the next steps are within 24 hours. They could vary from arrest and imprisonment to conditional release. On Saturday, Belgian federal prosecutors said that they were studying the warrants and that they had shared them with city counterparts in Brussels.
The ousted officials and Puigdemont are wanted in Spain on charges of rebellion, sedition and misappropriation of public funds as part of their two-year bid to see Catalonia secede from Spain. On Friday, Spain issued a formal request to Belgium for extradition.
Also on Friday Puigdemont suggested he will fight extradition as he doesn’t believe he will get a fair trial in Spain; he also said that he was willing to campaign out of Belgium for the Catalan elections set to take place on Dec. 21. According to Belgian law, his legal battle against extradition can last up to two months.
Addressing Puigdemont’s concern, a Belgian government official said on Sunday that the international community has to keep a close eye on Spain to make sure that ousted Catalan leader Carles Puigdemont gets fair legal treatment in Madrid.
Belgian Vice Premier and Interior Minister Jan Jambon told the VTM network that “I am just questioning how an EU member state can go this far — and I am asking myself where Europe is to have an opinion on this.”
And speaking of what now appears to be certain snap elections in Catalonia, an opinion poll published by Barcelona’s La Vanguardia newspaper forecasts a tight electoral race between parties for and against the independence of Catalonia from the rest of Spain. Pro-secession parties held a majority of 72 of 135 seats in the Catalan Parliament before it was dissolved by Spanish authorities as part of a crackdown after it had voted for a declaration of independence. Spanish authorities then called for a snap election for Catalonia on Dec. 21.
The new poll predicts that the three pro-secession parties would win between 66 and 69 seats in December. Sixty-eight seats are needed for a majority, which means that while narrow, a pro-secession vote would mean that the ongoing drama is set to continue indefinitely.
5. RUSSIA AND MIDDLE EASTERN AFFAIRS
Lebanon is thrown into a huge crisis after its premier resigns fearing an assassination plot. In his speech from Saudi Arabia he blamed Iran and their ally Hezbollah. Harari’s father was assassinated in 2005
Lebanon Plunges Into Crisis After Premier Resigns, Fearing Assassination Plot
The Lebanese Prime Minister, Saad al-Hariri, unexpectedly resigned on Saturday, saying in a fiery televised broadcast from Saudi Arabia that he feared for his life while also fiercely criticizing Iran. According to regional analysts, the move has “plunged Lebanon into crisis” amid heightened regional tensions.
In his resignation speech, Hariri – whose father, former prime minister Rafik al-Hariri, was assassinated in 2005 – fired a vicious tirade against Iran and its Lebanese proxy Hezbollah group for what he said was their meddling in Arab affairs and said that “Iran’s arms in the region will be cut off.” Accusing Iran of sowing “fear, chaos, strife and destruction” throughout the region, including Lebanon, Hariri said that “the evil that Iran spreads in the region will backfire on it.”
Hariri’s resignation was unprecedented in the way it was announced, in a televised address from an undisclosed location in Riyadh. In his speech, Hariri suggested he feared for his life and said the climate in the country is similar to the one that existed before his father, the late prime minister Rafik Hariri, was assassinated in 2005.
That said, Hariri may have had an ulterior motive for his fire and brimstone speech: Hariri – whose family is very close to Saudi Arabia, Iran’s regional competitor – was appointed prime minister in late 2016 and headed a 30-member coalition government that included members of the Shiite militant Hezbollah. But it’s been an uneasy partnership between Hariri, who heads a Sunni-led camp loyal to Saudi Arabia, and Hezbollah, which represents a camp loyal to Shiite Iran. President Michel Aoun, who was elected in October 2016 after more than a two-year presidential vacuum, is a close ally of Hezbollah.
Hariri’s resignation comes at a time when Iran’s regional power is surging, having recently played a critical role in the quashing of the Iraqi Kurdistan referendum, as well as collaborating with Russia in Syria to preserve the regime of al Assad and defeat local Islamic State forces. As U.S. and Saudi Arabia have sought ways to curb Iran’s growing influence in the region, Hariri has come under pressure to distance himself from the militant group which has sent thousands of troops to neighboring Syria to shore up President Bashar Assad’s forces.
Speaking from Saudi Arabia, Hariri may have decided to simply remain with his Saudi friends for the foreseeable future, and was not immediately clear if the now former premier intended to return to Lebanon. In a statement, the presidential office said Aoun was informed by Hariri in a phone call of his resignation, adding that the president now awaits Hariri’s return to clarify the circumstances of his resignation and proceed accordingly.
The resignation comes at an unstable time for the middle-eastern nation. Quote AP:
“Hariri’s bombshell resignation — even close aides seemed unaware of the announcement — ushers in a stage of deep uncertainty and potential instability. It also throws into doubt parliamentary elections slated for early next year which have been repeatedly delayed. It comes amid a sharp escalation in Saudi rhetoric against its regional archrival Iran and puts Lebanon at the center of that rivalry.”
Echoing AP’s dismary was Martin Patience, a BBC reporter in Beirut, who wrote that the prime minister’s resignation “has opened up a chasm of uncertainty in Lebanon.”
It’s still not clear why he announced his decision in Saudi Arabia – an extraordinary move that left even his own MPs bewildered. But the move will be seen through the lens of the great Shia-Sunni divide that’s fueling much of the violence across the Middle East. It’s pitted the Sunni power, Saudi Arabia, against the Shia power, Iran – with both sides backing different players to wield influence.
Hazem al-Amin, a Lebanese writer who follows regional affairs, said Hariri’s resignation is “completely a Saudi step” that comes in the context of an international and regional atmosphere against Hezbollah and against Iranian influence in the region.
“Lebanon is a fragile country. This confrontation (between Saudi Arabia and Iran) is more violent than Lebanon can stand up to,” he said, warning of economic and security ramifications.
The push to contain Iran has been a key priority for US foreign policy in recent weeks: two weeks ago, Rex Tillerson conducted a visit to Gulf states, whose sole purpose was to make it clear to regional US allies to come together and halt the Iranian ascent even as Arab nations bicker amongst themselves.
Tillerson’s Gulf visit came as part of concerted efforts to curb Iran’s rapidly expanding influence in the region, including boosting the clout of Sunni-ruled Saudi Arabia in Shiite-majority Iraq, where Iran backs Shia militias fighting in the north – part of a wider regional battle for influence that extends from Syria to Yemen – even as there was scant hope of a breakthrough in attempts to reconcile Saudi Arabia and Qatar.
Then earlier this week, the CIA released thousands of formerly confidential files on bin Laden which according to at least one former intel official were meant to deceive the public on Iran and specifically alleged ties between al-Aqeda and Iran.
To the cursory reader with even a basic understanding of Middle East geopolitics and religion, the first thing that will stand out is the extreme unlikelihood that the hardline Shiite Islamic Republic of Iran would sponsor Sunni fundamentalists which have historically been at war with Iran. Furthermore, it has already been well-known that al-Qaeda has long had a presence in Iran’s restive Arabic speaking Sunni heartland in the country’s west (about 10% of Iran’s population is Sunni) – a sizable minority community which has suffered a tenuous existence of perpetual tension with the Tehran government over the decades.
But then to go even further with the claim that Iran hatched a plan to train al-Qaeda operatives at Hezbollah camps in Lebanon is even more extraordinary. It is as likely as George Bush’s now debunked claim that Saddam Hussein sponsored al-Qaeda. Hussein was a Baathist and secular nationalist dictator who actively persecuted extremists opposed to Baathist rule.
Commenting on Hariri’s resignation, Iran’s foreign ministry spokesman Bahram Ghasemi said the resignation is a plot by the U.S., Israel and the Saudis to foment tensions in Lebanon and the region, the semi-official Iranian Tasnim news agency reported. Ghasemi dismissed Hariri’s “baseless accusations,” which he said indicate that “a new scenario” for the region was being drawn. Israeli Prime Minister Benjamin Netanyahu said Hariri’s resignation and comments “are a wake-up call to the international community to take action against the Iranian aggression that is trying to turn Syria into Lebanon 2.”
“This aggression endangers not only Israel but the entire Middle East. The international community needs to come together and stand against this aggression,” he said.
In his speech, Hariri speech directly lashed out at the Iran-backed Hezbollah organization,which wields considerable power in Lebanon.
Hariri said Hezbollah’s policies have put Lebanon “in the eye of the storm.”
His attacks on Hezbollah come on the heels of new U.S. sanctions on the group that many fear will impact negatively on the Lebanese economy. Hariri has frequently called on the group to withdraw its fighters from Syria. “I declare my resignation from the premiership of the Lebanese government, with the certainty that the will of the Lebanese is strong,” Hariri said.
“When I took office, I promised you that I would seek to unite the Lebanese and end political division… But unfortunately, this pushed Iran and its allies to more interference in our internal affairs,” he said.
Earlier this week, Saudi State Minister for Gulf Affairs Thamer al-Sabhan sharply criticized Hezbollah, calling for its “toppling” and promising “astonishing developments” in the coming days during an interview with the Lebanese TV station MTV.
Al-Sabhan met with Hariri in Saudi Arabia when the now resigned prime minister was visiting earlier this week. Hariri abruptly returned to the kingdom again on Friday after a meeting in Beirut with Ali-Akbar Velayati, foreign adviser to Ayatollah Ali Khamenei, Iran’s supreme leader. In tweets after meeting Hariri, al-Sabhan criticized the Lebanese government for tolerating Hezbollah’s criticism of the kingdom.
In Shocking Purge, Saudi King Arrests Billionaire Prince Bin Talal, Dozens Of Others In Cabinet Crackdown
In a shocking development, Saudi press Al Mayadeen reported late on Saturday that prominent billionaire, member of the royal Saudi family, and one of the biggest shareholders of Citi, News Corp. and Twitter – not to mention frequent CNBC guest – Al-Waleed bin Talal, along with ten senior princes, and some 38 ministers, has been arrested for corruption and money laundering charges on orders from the new anti-corruption committee headed by Crown Prince Mohammed bin Salman, while Royal princes’ private planes have been grounded.
Among those fired and/or arrested are the head of National Royal Guards, Miteb Bin Abdullah, the Minister of Economy and Planning, Adel Fakeih, and Admiral Abdullah bin Sultan bin Mohammed Al-Sultan, the Commander of the Saudi Naval Forces.
As the local press further adds, the supreme committee chaired by Crown Prince and billionaire stops “on charges of money laundering.”
al-Waleed bin Talal is perhaps best known not only for his periodic CNBC appearances, but for his recurring on and off spats with president Trump:
According to al Arabiya, among those sacked and/or arrested are Moteib Bin Abdullah, Minister of the National Guard, and Prince Khalid bin Ayyaf has been appointed as his replacement. A second Royal Order was issued to relieve Minister of Economy and Planning, Adel al-Faqieh, from his duties, and the appointment of Mohammed Al Tuwaijri as Minister of Economy and Planning.
According to a Royal Decree issued by King Salman on Saturday the anti-corruption committee is chaired by the Crown Prince with the membership of: Chairman of the Monitoring and Investigation Commission, Chairman of the National Anti-Corruption Authority, Chief of the General Audit Bureau, Attorney General and Head of State Security.
As Saudi analysts were quick to point out, the purge by the Saudi King means that King Abdallah’s last remnants (Riyad firmer gov. & head of Nat. Guard); media moguls; SAGIA & financial policy officials have been purged.
As Bloomberg notes, changing the head of the National Guard, an institution that’s been controlled by the clan of the late King Abdullah, “is not like changing the minister of oil,” said Kamran Bokhari, a senior analyst with Geopolitical Futures and a senior fellow with the Center for Global Policy. “I wouldn’t be surprised if this leads to greater fissures within the royal family.”
Arabiya adds that King Salman also issued sacking and replacement orders for Admiral Abdullah bin Sultan bin Mohammed Al-Sultan, the Commander of the Naval Forces, is to be terminated and be retired; his replacement is Vice Admiral Fahd bin Abdullah Al-Ghifaili, to be promoted to the rank of admiral and be appointed as Commander of the Naval Forces.
Additionally, Minister of Economy and Planning Adel al-Faqieh was replaced by Mohammed al-Tuwaijri, SPA said, quoting a royal decree. Commander of the Saudi Navy, Abdullah al-Sultan, was replaced with Fahad al-Ghafli. The king also replaced Minister of Economy and Planning Adel Fakeih withMohammad Al Tuwaijri, his deputy.
Al Tuwaijri, formerly vice minister for economy and planning, had already played a key role in shaping Saudi economic and fiscal policy over the past year. Before joining the government in May 2016 he was Middle East chief executive for HSBC. He’s served as a frequent spokesman for the government’s economic reform plan on TV and with Western journalists.
King Salman also issued an decree forming an anti-corruption committee headed by the crown prince. Its powers include the ability to trace funds and assets, and prevent their transfer or liquidation on behalf of individuals or entities, along with the right to take any precautionary actions until cases are referred to relevant investigatory or judiciary authorities, according to a government statement.
The committee’s formation was deemed necessary “due to the propensity of some people for abuse, putting their personal interest above public interest, and stealing public funds,” the Royal Order said.
Some more cynical observers noted how MBS is quickly learning from XIi Jinping “how to get rid of enemies under justification of “corruption commission” & place “friendlies” in high places.”
Others arrested include Walid bin Talal; Khaled Tuweijri; AlWalid Ibrahim; Turki Bin Naser; and others.
V. BIG Names of Arrests in #Saudi
•Meteib Bin Abdullah
•Walid bin Talal
•Turki Bin Naser
•Adel Fakih https://twitter.com/ksa24/status/926912032464625664 …
Putting the arrests in context, the heads of the main three Saudi owned TV networks were arrested, Alwalid Bin Talal (Rotana), Walid Al Brahim (MBC), Saleh Kamel (ART)
As Bloomberg adds, Saudi King Salman appointed a former HSBC banker to head the country’s economy ministry and removed one of the royal family’s most prominent princes from as head of the National Guard. Separately, a number of Saudi princes and former ministers were arrested by authorities hours after the announcement of a new anti-corruption committee, with sweeping powers and headed by Crown Prince Mohammed bin Salman, the Saudi-owned Al Arabiya news service reported.
Prince Miteb, son of the late King Abdullah, was replaced as minister of the National Guard by Prince Khaled Ayyaf, according to a royal decree carried by state-run media late Saturday. Before his ouster, Prince Miteb was one of the few remaining senior princes to have survived a series of cabinet reshuffles that promoted allies of the crown prince, who is the king’s son and heir to the throne.
King Salman has sidelined other senior members of the royal family to prevent any opposition to the crown prince. Prince Mohammed, 32, replaced his elder cousin, Muhammed bin Nayef, as crown prince in June, a maneuver that removed any doubt of how succession plans will unfold following the reign of King Salman, now 81.
While details remain scarce about this “Saturday of the long Saudi knives” – which some have suggested may be a countercoup attempt – DPA confirms the Al Arabiya report that three senior state officials were sacked.
Salman relieved Prince Moteib bin Abdullah of his post as minister of the National Guard, replacing him with Khaled bin Ayaf, the official Saudi news agency SPA reported. Additionally, Minister of Economy and Planning Adel al-Faqieh was replaced by Mohammed al-Tuwaijri, SPA said, quoting a royal decree. Commander of the Saudi Navy, Abdullah al-Sultan, was replaced with Fahad al-Ghafli.
No official explanation was given for the sackings.
In recent months, the Saudi monarch has carried out a string of reshuffles appointing young people in senior state posts. In June, Salman ousted his nephew as the crown prince and appointed his son Mohammed to become the first in line to succeed him. The monarch on Saturday ordered the creation of an anti-corruption committee led by the crown prince amid a rumoured crackdown on suspected tainted officials and royals. Mohammed, 31, is seen as the driving force behind opening up the ultra-conservative country to the outside world and weaning its economy off oil.
Furthermore, there is speculation that all private flights and VIP departures out of Saudi Arabia have been suspended temporarily, similar to what happened following the last “gentle coup” in June when Prince Mohammed (MBS), 32, replaced his elder cousin, Muhammed bin Nayef, as crown prince in June, a maneuver that removed any doubt of how succession plans will unfold following the reign of King Salman, now 81.
#BREAKING : unconfirmed news:
all private flights and VIP departures in #KSA are suspended temporarily https://twitter.com/aviationwg/status/926917893710901248 …
According to the AngryArab blog, the removal of Prince Miteb bin Abdullah as head of the National Guard, means that “this is the first time that the National Guard is not in the hand of Abdullah or his son.“
That put all apparatus of the military-intelligence network in the hands of Muhammad bin Salman. News that Al-Walid bin Talal has been arrested and accused of money laundering. This could be a service to Trump, who hates Al-Walid: the two fought it out on twitter during the campaign although Al-Walid tried to reconcile with Trump after his election but to no avail.
Bin Talal’s arrest and the government reshuffle caps off a bizarre day for Saudi newsflow, which started with the resignation of Palestinian prime minister Saad al-Hariri, who announced he was quitting due to fears of an assassination plot, allegedly organized by Iran, followed shortly after by the Saudi defense forces intercepting a ballistic missile as it was about to strike the capital Riyadh.
To summarise today’s even more bizarre Saudi news day:
- Trump urges Aramco IPO
- Lebanon PM resigns
- Saudis intercept missile
- Major cabinet reshuffle; 3 Saudi princes – who run the anti-graft committee – arrested for money-laundering
- A total of 11 princes, >30 ministers arrested on corruption
This is a developing story.
Saudis Intercept Ballistic Missile Over Capital Riyadh
Just hours after the previously reported unexpected, and shocking resignation of Lebanon’s pro-Saudi prime minister Saad al-Hariri, Saudi defense forces said they had intercepted a ballistic missile over the capital Riyadh, which was fired from Yemen. According to Yemen’s Houthi-controlled Defense Ministry, the Yemeni Air Force targeted King Khalid International Airport in the Saudi capital of Riyadh on Saturday with a ballistic missile.
Al-Arabiya reported that the missile was intercepted over north-east Riyadh, Saudi Arabia’s Ministry of Defense said in a statement, even as Yemen’s Defense Ministry said the missile attack “shook the Saudi capital” and the operation was successful.
The Riyadh-based newspaper Al Riyadh released a video on its Twitter account showing the interception of a missile.
Some analysts have speculated that the ballistic missile could be Iran’s response to Hariri’s resignation.
Al Jazeera reported that Yemen’s Houthi rebels claimed responsibility for the attack, saying they launched the Yemeni-made, long-range ballistic missile Burqan 2-H (with a range of 500 kilometers) from the Saudi-Yemeni border before being intercepted.
Earlier on Saturday, there were reports of a blast at the King Khalid International Airport in Riyadh, with some twitter users noting that pieces of a missile crashed onto the tarmac.
Photos, allegedly pieces of the intercepted missile, have also emerged on the web.
Houthis are Shi’ite militants that have been involved in the Yemeni civil war that started when the Saudi-led coalition launched its air campaign in the country in 2015. They have been fighting against the government headed by President Abd Rabbuh Mansur Hadi.
Then this happened on Sunday as a Saudi helicopter carrying 8 high ranking officials including Prince Mansour Muqrin crashed in the southern part of Saudi Arabia near the border of Yeme
Saudi Helicopter Carrying 8 High-Ranking Officials & Prince Bin-Muqrin Crashed Near Yemen Border – All Dead
The shocking latest twist in what has been a chaotic weekend in Saudi Arabia is news that a helicopter transporting 8 high-ranking Saudi officials (including prince Mansour bin-Muqrin) has crashed in the south of the Kingdom, near the border with Yemen.
Sky News Arabia confirms an earlier report from Al-Watan news…“Newsletter: loss of a helicopter carrying a number of officials in the southern Asir, Saudi Arabia”
Details are few for now but some headlines report that the high-ranking officials aboard included Crown Prince Mansour bin-Muqrin, deputy Emir of Asir province.
#Saudi state tv just announced the death of Prince Mansour bin Muqrin bin Abdulaziz, Deputy Governor of Asir Region, in a helicopter crash https://twitter.com/alekhbariyatv/status/927267252906414080 …
The following video shows the crown prince and the group of officials just a few short hours before the crash…
The crash site is reported near Abha, in the south of The Kingdom, near the border with Yemen.
There are sources saying all aboard have died…
KSA :A helicopter with Saudi officials on board(among them : vice-governor of Asir Mansour bin Muqrin) crashed today:all passengers died https://twitter.com/okaz_online/status/927264934748131330 …
Just what is going on in Saudi Arabia?
Early this morning: Saudi Arabia
The Sauid Plunge protection team rescues their stock market but the riyal is heading for devaluation
Saudi ‘Plunge Protection Team’ Rescues Stocks As Riyal Devaluation Bets Surge
As the FX markets came to life last night after a tense weekend in the middle east, it is clear that anxiety about the Saudi Riyal is at the forefront.
Forward bets on devaluation/depegging surged most in 7 months as shares in bin-Talal’s Kingdom Holdings continued their slide to the lowest since Dec 2011.
The round-up risks overwhelming local and foreign investors struggling to get their heads around the rapid changes shaking the kingdom, but for the second day in a row, any selling was met by instant panic-buying as we suggest Saudi’s very own Plunge Protection Team stepped in…
Saudi Banks Begin Freezing Accounts Of Arrested Royals, Private Jets Grounded
Two days after the most stunning purge in recent Saudi history, the so-called “anti-corruption probe” – which was really a countercoup – that led to the arrest of dozens of Saudi Arabian royals, ministers and businessmen allowing Mohammed to further cement control over the Kingdom, appeared to be widening on Monday when, as Reuters reports, Saudi banks begun freezing the accounts of those arrested. The Saudi central bank ordered commercial banks to freeze the accounts of people under investigation in the probe, the Reuters sources said, adding that the number of accounts affected could run into the hundreds, although the names of those affected have yet to emerge.
“The freezing of accounts has already happened,” said another source. “The freezing is a precautionary measure that will end as soon as the suspects are either charged or pronounced innocent.” Considering that prince Alwaleed alone has over $19 billion in assets, including nearly a billion dollars in jewelry, plans, yachts, furniture and cash…
… the local central banks may have “accidentally” found an unexpectedly efficient way of refilling Saudi’s dwindling foreign reserve account.
At the same time, fears of a broader crackdowns were spreading, and as Bloomberg reported this morning, the Olayan family, which runs one of Saudi Arabia’s biggest conglomerates, is putting plans to sell shares in some of its local assets on hold “amid slow economic growth in the kingdom.” What it means is that right now it is a good idea to keep a very low profile.
Olayan Financing Co., which controls the billionaire family’s investments in the Middle East, decided not to proceed with an initial public offering of a holding company of about 20 local units, the people said, asking not to be identified because the discussions are private. Plans for the sale of the holding company, which may worth as much as $5 billion, could be revived in the future, they said.
Olayan had been working with Saudi Fransi Capital on the planned sale that could have happened as early as next year, people familiar with the matter said in March. It’s also working with HSBC Holdings Plc’s local unit on the 30 percent sale of its Health Water Bottling Co., people said in May. The IPOs would be the first time Olayan Financing sold shares in one of its Saudi businesses since at least 2000. The family still plans to proceed with the IPO of its water business, the people said.
Such fears appear justified, because as Reuters writes, the crackdown continued on Monday when the founder of one of the kingdom’s biggest travel companies was reportedly detained. Al Tayyar Travel plunged 10% in the opening minutes after the company quoted media reports as saying board member Nasser bin Aqeel al-Tayyar had been held by authorities. The company gave no details but online economic news service SABQ, which is close to the government, reported Tayyar had been detained as part of the anti-corruption probe.
Many more are coming: the front page of leading Saudi newspaper Okaz challenged businessmen on Monday to reveal the sources of their assets, asking: “Where did you get this?” in bright red text. Another headline from Saudi-owned al-Hayat warned: “After the launch (of the anti-corruption drive), the noose tightens, whomever you are!”
Meanwhile, to prevent royals from quietly fleeing the country, a no-fly list has been drawn up and security forces in some Saudi airports were barring owners of private jets from taking off without a permit, pan-Arab daily Al-Asharq Al-Awsat reported.
And as the crackdown extended, so did the confusion, and many analysts were puzzled by the targeting of technocrats like ousted Economy Minister Adel Faqieh and prominent businessmen on whom the kingdom is counting to boost the private sector and wean the economy off oil.
“It seems to run so counter to the long-term goal of foreign investment and more domestic investment and a strengthened private sector,” said Greg Gause, a Gulf expert at Texas A&M University. “If your goal really is anti-corruption, then you bring some cases. You don’t just arrest a bunch of really high-ranking people and emphasize that the rule of law is not really what guides your actions. It just runs so counter to what he seems to have staked quite a lot of his whole plan to.”
Robert Jordan, former U.S. Ambassador to Saudi Arabia, says on Bloomberg TV, said that the Saudi Crown Prince’s anti-corruption drive, which included detaining Prince Alwaleed bin Talal, was “almost the equivalent of arresting Bill Gates.”
“The Saudis have come to a fork in the road and they have taken it,” he said adding that “this is about the most breathtaking revelation I think we could possibly have imagined.”
The reforms have been well-received by much of Saudi’s overwhelmingly young population, but caused resentment among some of the more conservative old guard, including parts of the Al Saud dynasty frustrated by Prince Mohammed’s meteoric rise. “It’s overkill – and overkill in a way that makes it harder to achieve his long-term objectives,” said Gause.
Meanwhile, in a more troubling escalation, overnight The Saudi-led military coalition said on Monday it would temporarily close all air, land and sea ports to Yemen to stem the flow of arms from Iran to Houthi rebels after a missile fired toward Riyadh was intercepted over the weekend. Saudi Arabia has been involved in a two-year-old war in Yemen, where the government says it is fighting Iran-aligned militants, and into a dispute with Qatar, which it accuses of backing terrorists, a charge Doha denies. Detractors of the crown prince say both moves are dangerous adventurism. Saudi’s focus now appears to have turned to Iran, and with the war drums beating louder, some wonder how long before the increasingly chaotic events in Saudi Arabia lead to another Middle-east war.
And now he hear that a second Saudi Prince has been killed but this time in a fire fight as he tried to resist arrest. He is the youngest son of King Fahad. Saudi Arabia is now in turmoil
Second Saudi Prince Confirmed Killed During Crackdown
Following the death of Prince Mansour bin-Muqrin in a helicopter crash near the Yemen border yesterday, the Saudi Royal Court has confirmed the death of Prince Abdul Aziz bin Fahd – killed during a firefight as authorities attempted to arrest him.
Prince Aziz (44) who was the youngest son of King Fahad.
The Duran’s Adam Garrie points out that Prince Abdul Aziz was deeply involved in Saudi Oger Ltd, a company which until it ceased operations in the summer of this year, was owned by the Hariri family. Former Lebanese Prime Minister Saad Hariri was punitively in charge of the company until it ceased operations.
Prince Abdul Aziz’s strange and sudden death which is said to have occurred during an attempted arrest, sheds light on the theory that the clearly forced resignation of former Lebanese Prime Minister Saad Hariri had more to do with internal Saudi affairs than the Saudi attempt to bring instability to Lebanon.
The Saudi Royal family has now lost two princes in 24 hours.
As Al Jazeera notes, in this Saudi version of ‘Game of Thrones’, the 32-year-old Bin Salman shows that he is willing to throw the entire region into jeopardy to wear the royal gown.
His actions have already all but destroyed the Gulf Cooperation Council (GCC); Yemen can no longer be referred to as a functioning state; Egypt is a ticking time bomb; and now Lebanon may erupt.
There’s a lot to worry about.
Will this largest ever aerial international military drill lead to something?
Israel Begins “Largest-Ever Aerial Military Drill”, As Saudis Consider Missile Strike “Act Of War”
Today, Israel kicked off its largest international aerial training exercise ever – coined: Blue Flag 2017.
Air-forces from nine countries with about 50 planes are now starting to drill in the most southern region of the country utilizing Uvda Air Base in Israel. Teams from India, the United States, Greece, Poland, France, Italy and Germany with be flying over 300 sorties simulating ‘real war’.
According to Israel Defense,
Throughout the first week of the two-week-long exercise, the international aircrews will acclimate themselves to the base and get to know each other. Throughout the second week, the participants will rehearse complex scenarios and coalition flights.
During some of the sorties, the participants will fly against the “Flying Dragon” Squadron, the IAF’s aggressor squadron, which will simulate enemy forces via “enemy” aircraft, SAM (Surface-to-air missile) batteries and MANPADS (Man-portable air-defense systems).
Lt. Col. Nadav, Commander of the 133rd Squadron (“Knights of the Twin Tail”), which operates “Baz” (F-15) fighter jets and is heading up the drill says,
“…the Blue Flag exercise is a significant quantum leap in our ability to hold an exercise and provide our multi-national participants with a quality training experience as performed in Israel. This is a significant milestone in our relationship with the international air forces, some of which are arriving in Israel to train for the first time. This exercise will allow us to continue cooperating with these forces in the future as well.”
The Indian Air Force sent a C-130J transport plane, other countries sent fighter jets, transport planes and refueling aircraft. Israel Defense notes some other various types of aircraft participating in the war games,
Participating on behalf of Israel are a “Baz” (F-15) squadron, a “Sufa” (F-16I) squadron and two “Barak” (F-16C/D) squadrons, alongside tactical transport aircraft, helicopters, UAVs (Unmanned Aerial Vehicles) and EL (Electronic Warfare).
The US, Hellenic, and Polish air forces arrived with F-16 fighters; the French with “Mirage” 2000D fighters; the Germans with “Eurofighter Typhoon” jets; the Italians with variants of the “Panavia Tornado” multirole fighter and the Indians with a C-130J “Super Hercules.”
According to Maj. (res.) Tal, Head of the Blue Flag Management Team:
“One of the more significant ways to improve international relationships and connect countries is to create military cooperation. The IAF is Israel’s ‘display window,’ and the direct encounter between the air forces is an inseparable part of forming strong, continuous relationships with other countries, near or far.”
Israel: The BLUE FLAG exercise will take place at the Uvda Air Force base in Southern Israel from five November until sixteen November. 05-11-2017
* * *
Meanwhile, across the sand dunes this evening, a far more interesting story is developing, and could shed light on the end game for Blue Flag 2017. Yesterday we reported that the Saudis intercepted a ballistic missile over the nation’s capital of Riyadh. Now the Saudis call the missile attack “blatant act of aggression” by Iran and “could be considered act of war”.
The smell of war is in the air and simultaneously Israel and other countries are drilling for ‘real war’. As, what we’ve seen before – drills sometime go live.
Lira Spikes After US Resumes Turkish Visa Processing
Having plunged several weeks ago following the latest diplomatic spat between Turkey and the US, in which the two countries’ consulates announced they had halted bilateral visa processing services, the Turkish Lira spiked moments ago on a Reuters report whiuch suggests diplomacy may be slowly returning to US-Turkish relations:
- U.S. SAID PLANNING LIMITED REINSTATEMENT OF TURKEY VISAS
- U.S. MISSION IN TURKEY SAYS RESUMES PROCESSING VISAS ON “LIMITED BASIS” -MISSION EMAIL SEEN BY REUTERS”.
As Bloomberg adds, “the U.S. mission in Turkey will issue statement later on Monday about updates to its visa ban, according to two U.S. officials who asked not to be named because the policy hasn’t yet been made public. Officials confirm earlier report by Reuters that U.S. is partially lifting its ban on issuing visas in Turkey, without elaborating.”
“Given that the diplomatic spat between Turkey and the U.S. contributed to the lira’s selloff, any signals that would indicate that relationship may gradually normalise will provide the lira with respite,” Piotr Matys, a currency strategist at Rabobank in London, told Bloomberg, and sure enough, the TRY jumped sharply in kneejerk response to the headline.
Still, as some FX desks point out, “TRY will need something a lot more substantial than this headline to recover fully. Relations remain extremely strained and there is still scope for this situation to worsen again.”
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 1.1596 DOWN .0008/ REACTING TO SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES RED
USA/JAPAN YEN 114.07 UP 0.098(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 1.3113 UP .0051 (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 1.2749 DOWN .0001(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 FELL by 8 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1596; / Last night the Shanghai composite CLOSED UP 16.43 POINTS OR .49% / Hang Sang CLOSED DOWN 6.81 PTS OR 0.02% /AUSTRALIA CLOSED DOWN 0.05% / EUROPEAN BOURSES OPENED RED
The NIKKEI: this MONDAY morning CLOSED UP 9.23 POINTS OR .04%
Trading from Europe and Asia:
1. Europe stocks OPENED MIXED RED
2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 6.81 POINTS OR 0.02% / SHANGHAI CLOSED UP 16.43 POINTS OR .49% /Australia BOURSE CLOSED DOWN 0.05% /Nikkei (Japan)CLOSED UP 9.23 POINTS OR .04%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1272.15
Early MONDAY morning USA 10 year bond yield: 2.323% !!! DOWN 4 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 2.803 DOWN 5 IN BASIS POINTS from FRIDAY night. (POLICY FED ERROR)
USA dollar index early MONDAY morning: 94.94 DOWN 1 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: 2.037% DOWN 4 in basis point(s) yield from FRIDAY
JAPANESE BOND YIELD: +.024% DOWN 3 in basis point yield from FRIDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.468% DOWN 1 IN basis point yield from FRIDAY
ITALIAN 10 YR BOND YIELD: 1.785 DOWN 1 POINTS in basis point yield from FRIDAY
the Italian 10 yr bond yield is trading 32 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.336% DOWN 3 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 1.1606 UP ,0001 (Euro UP 1 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 113.81 UP 0.159(Yen UP 16 basis points/
Great Britain/USA 1.3150 UP 0.0089( POUND UP 89 BASIS POINTS)
USA/Canada 1.2735 DOWN.0015 Canadian dollar UP 15 Basis points AS OIL ROSE TO $57.05
This afternoon, the Euro was UP 1 to trade at 1.1606
The Yen ROSE to 113.81 for a GAIN of 16 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 89 basis points, trading at 1.3150/
The Canadian dollar ROSE by 15 basis points to 1.2735 WITH WTI OIL RISING TO : $57.05
Your closing 10 yr USA bond yield DOWN 3 IN basis points from FRIDAY at 2.319% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.802 DOWN 3 in basis points on the day /
Your closing USA dollar index, 94.78 DOWN 16 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 1.93 POINTS OR 0.03%
German Dax :CLOSED DOWN 10.07 POINTS OR 0.07%
Paris Cac CLOSED DOWN 10.72 POINTS OR 0.19%
Spain IBEX CLOSED DOWN 41.30 POINTS OR 0.40%
Italian MIB: CLOSED DOWN 11.38 POINTS OR 0.05%
The Dow closed up 9,23 POINTS OR .04%
NASDAQ WAS closed up 22.00 PTS OR 0.33% 4.00 PM EST
WTI Oil price; 57.05 1:00 pm;
Brent Oil: 63.78 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 58.47 DOWN 58/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 58 BASIS PTS)
TODAY THE GERMAN YIELD FALLS TO +.336% 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:$57.05
USA 10 YR BOND YIELD: 2.361% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.852%
EURO/USA DOLLAR CROSS: 1.1627 DOWN .0026
USA/JAPANESE YEN:114.02 up 0.369
USA DOLLAR INDEX: 94.81 up 25 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.3251 : down 37 POINTS FROM LAST NIGHT
Canadian dollar: 1.2859 down 33 BASIS pts
German 10 yr bond yield at 5 pm: +0.336%
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Mid-East Crisis? Tax-Deal DOA? – Buy The F**king Record Highs
2 dead Saudi princes, dozens arrested, billionaires’ assets frozen, and John McCain calling the tax deal “DOA” – B-T-F-Record-Highs!!
On the day, only one thing made some rational sense – gold outperformed (seemingly suppressed until Europe closed), as perhaps just perhaps some sane individuals reached for a little safe haven asset instead of selling vol (did uncertainty about the future increase of decrease after what happened in Saudi?) and buying stocks…
All the major US equity indices bounced hard off overnight weakness then extended gains trhough the US day… Nasdaq (green) outperformed and Dow (blue) lagged S&_ (red)
With only Trannies red on the day…
The S&P 500 is now within 7 points of Goldman Sachs’ 2019 year-end target (yes 2019!).
VIX drifted lower all day in a very small range from a spike open higher but some serious illiquidity was evident in the pre-open…
Vol collapsed in everything last week (but note a small bounce in Oil Vol today). This is a new record low for Rates volatility…
Some chaos today in the media markets as Fox and Disney were reportedly in talks once upon a time and that took the edge of Netflix…
One look at the Saudi stock market tells you what you need to know about ‘rigged’ markets…
No bounce at all in high yield bonds today…
Treasuries opened higher in yield overnight but were bid from then on, ending down 1-2bps with the long-end outperforming…
The yield curve contonues to flatten…
The Dollar index tumbled today – erasing the post-payrolls gain…
Cable strength was the biggest driver of USD weakness with EUR Unch…
Bitcoin slid today also as USDJPY began to slide, droping from a new record high at $7590 over the weekend to $6932 before bouncing back above $7100 into the US equity market close…
Gold jumped back above its 100-day moving average…
WTI Crude reacted as expected – surging beyond $57 on Saudi uncertainty – the highest since July 2015…
Finally it appears the draw of Copper/Gold reflation signals has lost its mojo once again as 10Y yields turn lower…
So – VIX Up, Stocks Up, Bonds Up, Gold Up, Oil Up… Dollar Down (and Riyal Forwards and Kingdom Holdings crushed)
Another senseless massacre in the uSA
Texas Church Shooting Leaves 26 Dead; Suspect Was Dishonorably Discharged From Air Force
Update (8:50 pm ET): Trump offered his condolences for victims and their families after today’s “horrific” shooting during a press conference in Japan.
“Victims and their families were in their sacred place of worship. We cannot put into words the pain and grief we all feel,” Mr. Trump said in televised remarks.
“In dark times such as these, Americans do we what do best and we pull together. We lock hands and we joins arms. Through the tears and through the sadness we stand strong.”
Meanwhile, a new photo of the shooter has been released…
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Update (8:00 pm ET): A candlelit vigil is being held to remember the victims of today’s shooting…
A candlelit vigil is now underway to remember the 26 killed and pray for dozens injured in today’s shooting.
Meanwhile, the citizen who intervened to stop the shooter has been described as a neighbor who lived near the church…
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Update (7:20 pm ET): The New York Times has published a list of notable mass shootings that have taken place at churches in the US in recent years. They include:
Sept. 24, 2017, Antioch Tenn.: A gunman carrying two pistols opened fire as Sunday services were ending at the Burnette Chapel Church of Christ, killing one person and wounding seven others; he also pistol-whipped a church usher who confronted him. The gunman, identified as Emanuel K. Samson, shot and wounded himself, the police said; he was taken into custody.
June 17, 2015, Charleston, S.C.: Nine people who had gathered for Bible study at the Emanuel African Methodist Episcopal Church, a landmark black church in Charleston, were shot and killed at the landmark black church in Charleston by a white gunman, identified by the police as Dylann Storm Roof, who was arrested the next day. A 10th person was wounded. The dead included the Rev. Clementa C. Pinckney, the church’s pastor and a prominent state senator.
May 31, 2009, Wichita, Kan.: A gunman shot and killed an usher in the foyer of the Reformation Lutheran Church as he handed out church bulletins after services. The usher was Dr. George Tiller, one of the few doctors in the country who performed late-term abortions. The assailant, Scott Philip Roeder, an anti-abortion activist, fled the scene and was arrested three hours later; he was convicted of murder in 2010 and sentenced to life in prison.
Dec. 9, 2007, Colorado.: A gunman shot two people at the Youth With a Mission Center at Arvada, near Denver, and then killed five people 12 hours later at the New Life Church in Colorado Springs, before he was shot by a volunteer security guard, the police said. The gunman, identified as Matthew Murray, died at the scene of the second shooting. The police said he was carrying two assault rifles, three handguns and 1,000 rounds of ammunition.
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Update (6:50 pm ET): The press conference in Stockdale, Texas has begun. Before it started, Gov. Greg Abbott reportedly confirmed that 26 people were killed in the shooting. Police say they don’t have names of any of the victims.
The local district attorney said the state’s “number one priority and goal is to the victims and their families right now.”
“We have to make sure that that crime scene is handled appropriately, it takes time. Unfortunately that means victims’ families are looking for more information than we have right now.
Another official said police have not yet determined a motive.
At approximately 11:20 the suspect was scene at a Valero gas station wearing all black. Shortly after, he entered the church and started firing. As he exited the church, a local resident grabbed his rifle and wrestled it away from him, causing him to flee on foot. The individual then gave chase. Police don’t know if the resident shot him, or if he shot himself. His car crashed, and when police found it he had died after sustaining a gunshot wound.
Total dead is 26 and another 20 people have sustained injuries ranging from minor to severe. Ages of victims range from 5 years old to 72 years of age.
The investigation will take “a significant length of time.” Multiple crime scenes are being processed still. There were people in the church who escaped, police said. Some of the victims were outside the church when they were shot.
Authorities won’t release the shooter’s name or confirm whether he was known in the community, though he has already been identified in the media as Devin Patrick Kelley. The first calls police received about the incident occurred after the suspect began firing.
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Update (6:24 pm ET): One of the first responders speaking to CBS said he knew many of the victims in the church after growing up in Sutherland Springs, a small one-horse town in an extremely rural part of southeastern Texas.
“Why this church? Why people that I grew up with. Why them? I know everyone who goes to church here. I have tons of friends who had children in that church who I have no idea about. I have no idea if they’re okay. It’s very upsetting – very much.”
Meanwhile, more details about the shooter are beginning to leak out.
Kelly was a former Air Force member who received a dishonorable discharge. He was court-martialed in May 2014. He previously held the rank of E1. Officials who’ve spoken anonymously to the media said there were no signs Kelly had links to terrorist groups.
CBS is reporting that four kids from one family have been shot…
The shooting has also been confirmed as the largest in Texas state history.
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Update (5:45 pm ET): The shooter who killed at least 25 people at a church in Sutherland Springs, Texas today has been identified by the Daily Beast as 26-year-old Devin Patrick Kelley. Kelly was a resident of New Braunfels, a suburb of San Antonio, according to public records, and was married. San Antonio police reportedly raided Kelley’s home on Sunday evening.
The gunman was killed after a chase with police, but it’s unclear if he was shot by law enforcement, or if he shot himself.
Trump has reportedly been briefed on the shooting, according to Sarah Huckabee Sanders. Trump has also spoken with Texas Gov. Greg Abbott by phone.
Reporter are waiting to be briefed by law enforcement. Here’s a live feed for the press conference:
ABC News reported the shooter recently showed off an AR-15-style rifle on social media.
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Update (5:30 pm ET): According to the latest count, Police said “approximately 25 people” were killed and another 10 wounded in today’s attack. Unconfirmed media reports are saying police are searching the home of the deceased gunman for explosives. The gunman’s name has not been released. Police initially scheduled a press conference for 4 pm, but reporters are still waiting to learn more details.
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Update (5:00 pm ET): Rep. Vicente Gonzalez told MSNBC that today’s shooting in Sutherland Springs, Texas wasn’t terrorism related. He added that 25 people have been confirmed dead. He said he heard reports that 24 people have been confirmed dead, while 20 people are injured. We won’t have final numbers until probably a few more hours.” Media reports are now saying 25 people have been confirmed dead.
Gonzalez added that “apparently the shooter was not from the area, he was from outside of that area.”
He added that, based on what he knew, he did not believe the incident was related to terrorism, but “was some kind of other incident that has to do with the church or the community.”
“It’s a rural community and a conservative, mostly farmers and ranchers and people who work out in the oil and gas patches,” he said, adding that the community was “very tranquil and very safe.”
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Update (4:30 pm ET): Democratic leaders are already pushing for Congress to reconsider gun control legislation after today’s shooting…
Speaker Ryan on Texas church shooting: “Reports out of Texas are devastating. The people of Sutherland Springs need our prayers right now.”
Speaker Paul Ryan has offered his condolences…
Meanwhile, CBS is reproting that a six-year-old boy named Rylan was shot four times and is now in surgery…
Annabel Pomeroy, the 14-yer-old daughter of Church pastor Frank Pomeroy is also reportedly among the dead. Both of her parents were reportedly out of town.
JUST IN: Pastor’s 14-year-old daughter among 27 dead in Sutherland Springs church shooting – KTRK http://breaking911.com/breaking-active-shooter-reported-texas-church-multiple-casualties/ …
Sen. Ted Cruz has also offered his condolences…
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Update (3:15 pm ET): While the official casualty count has not been released, preliminary estimates that there were between 20 and 30 fatalities would make today’s shooting the deadliest at a US house of worship in modern American history. In addition, some two dozen people were injured.
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Update (3:30 pm ET): More details about the shooting are trickling in. A law enforcement source told CNN that a man walked into the church and began shooting about 11:30 a.m. local time. Agents from the San Antonio field office of the Bureau of Alcohol, Tobacco, Firearms and Explosives are en route to the scene, the source said. The FBI’s crisis management team is already there assisting investigators.
The Connally Memorial Medical Center in nearby Floresville, Texas, is “accepting and assessing victims” from the Sutherland Springs church shooting, according to hospital spokeswoman Megan Posey. The number of victims is unknown at this time. Several small children are reportedly among the dead.
The shooter was killed after a brief chase north into neighboring Guadalupe County, according Guadalupe County Sheriff’s Office spokesman Robert Murphy. It is unclear if the shooter was killed by police or took his own life, Murphy said. Witnesses say they heard about 20 shots being fired in quick succession while the church service was underway.
Sutherland Springs is in Wilson County, about 30 miles east of San Antonio.
Local media are now reporting that more than 27 people may have been killed.
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Update (3:20 pm ET): President Donald Trump, who arrived in Japan earlier today for the first leg of an 11-day Asia tour, tweeted “May God be w/ the people of Sutherland Springs, Texas. The FBI & law enforcement are on the scene. I am monitoring the situation from Japan.”
New details about the police response to the shooting are starting to emerge: Police officials told the local NBC affiliate that the shooter was killed following a vehicle pursuit. US Marshalls and the ATF are also reportedly part of the response, which one source said suggests the shooter might have had warrants out for his arrest.
Texas Gov. Greg Abbot tweeted that his prayers were with the victims and that an update from the Texas Department of Public Safety would be available soon.
Our prayers are with all who were harmed by this evil act. Our thanks to law enforcement for their response. More details from DPS soon. https://twitter.com/jaketapper/status/927248847910375424 …
One member of the USA Judiciary Council calls for Mueller’s resignation over the Uranium one scandal as he claims that the special prosecutor is hopelessly compromised:
“Hopelessly Compromised”: Judiciary Member Calls For Mueller’s Resignation Over Uranium One Scandal
Earlier this morning House Judiciary Committee representative Matt Gaetz (R-FL) submitted a resolution calling for Robert Mueller to resign as special counsel overseeing the FBI investigation of possible collusion between the Trump campaign and the Russian government saying, among other things, that the former FBI director is “hopelessly compromised” as a result of his failed oversight of the controversial Uranium One transaction. Here is an excerpt from a press release posted to Gaetz’s website earlier today:
“Evidence has emerged that the FBI withheld information from Congress and from the American people about Russian corruption of American uranium companies. A confidential U.S. witness, working in the Russian nuclear industry, revealed that Russia had deeply compromised an American uranium trucking firm through bribery and financial kickbacks.
Although federal agents possessed this information in 2010, the Department of Justice continued investigating this “matter” for over four years. The FBI, led at the time by Robert Mueller, required the confidential witness to sign a non-disclosure agreement. When the witness attempted to contact Congress and federal courts about the bribery and corruption he saw, he was threatened with legal action. By silencing him, Obama’s Justice Department and Mueller’s FBI knowingly kept Congress in the dark about Russia’s significant and illegal involvement with American uranium companies.
These deeply troubling events took place when Mr. Mueller was the Director of the FBI. As such, his impartiality is hopelessly compromised. He must step down immediately,” Rep. Gaetz said in a statement.
Gaetz’s resolution currently has two cosponsors, both of whom are members of the House Freedom Caucus: Representatives Andy Biggs (R-AZ) and Louie Gohmert (R-TX).
Of course, pressure has been growing on Mueller for the past couple of weeks and reached a fevered pitch when the The Hill recently reported the sordid tale of “Confidential Source 1,” a man that the FBI used as an informant back in 2009 and who says he was silenced by the FBI and Obama administration when he attempted to come forward with information that linked the Clinton Foundation directly to the Uranium One scandal.
Toensing added her client has had contact from multiple congressional committees seeking information about what he witnessed inside the Russian nuclear industry and has been unable to provide that information because of the NDA.
“He can’t disclose anything that he came upon in the course of his work,” she said.
The information the client possesses includes specific allegations that Russian executives made to him about how they facilitated the Obama administration’s 2010 approval of the Uranium One deal and sent millions of dollars in Russian nuclear funds to the U.S. to an entity assisting Bill Clinton’s foundation. At the time, Hillary Clinton was serving as secretary of State on the government panel that approved the deal, the lawyer said.
It has been previously reported that Bill Clinton accepted $500,000 in Russian speaking fees in 2010 and collected millions more in donations for his foundation from parties with a stake in the Uranium One deal,
transactions that both the Clintons and the Obama administration denied had any influence on the approval.
“All of the information about this corruption has not come out,” she said in an interview Tuesday. “And so my client, the same part of my client that made him go into the FBI in the first place, says, ‘This is wrong. What should I do about it?’”
When he tried to bring some of the allegations to light in the lawsuit last year, “the Obama Justice Department threatened him with loss of freedom. They said they would bring a criminal case against him for violating an NDA,” she added.
“The government was taking a very harsh position that threatened both your reputation and liberty,” the civil lawyer wrote in one email. In another, she added, “As you will recall the gov’t made serious threats sufficient to cause you to withdraw your civil complaint.”
As we pointed out last week, “Confidential Source 1” has since been cleared by the DOJ to meet with Congress to tell his tale.
Meanwhile, the scandal took another turn for the worse earlier this week when, despite numerous assurances to the contrary from the Obama administration, new memos obtained by The Hill confirmed that, in fact, Uranium One yellowcake was exported from U.S. shores repeatedly between 2012 – 2014.
Yet NRC memos reviewed by The Hill shows that it did approve the shipment of yellowcake uranium — the raw material used to make nuclear fuel and weapons — from the Russian-owned mines in the United States to Canada in 2012 through a third party. Later, the Obama administration approved some of that uranium going all the way to Europe, government documents show.
NRC officials said they could not disclose the total amount of uranium that Uranium One exported because the information is proprietary. They did, however, say that the shipments only lasted from 2012 to 2014 and that they are unaware of any exports since then.
NRC officials told The Hill that Uranium One exports flowed from Wyoming to Canada and on to Europe between 2012 through 2014, and the approval involved a process with multiple agencies.
Of course, we’re certain that Mueller will promptly admit his conflicts and do the right thing…right?
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Below is the full text of the Gaetz’ resolution:
Expressing the sense of the House of Representatives that Robert Mueller should resign from his special counsel position.
Whereas from 2001–2013, Robert Mueller served as Director of the Federal Bureau of Investigation;
Whereas as early as 2009, the FBI discovered that Russian officials were engaging in bribery and extortion, tainting the American uranium industry in violation of the Foreign Corrupt Practices Act to strengthen their own nuclear program;
Whereas investigations into Russia’s corruption of American uranium-related businesses were supervised by then-United States Attorney Rod Rosenstein, currently serving as Deputy Attorney General, and then-Assistant FBI Director Andrew McCabe, currently serving as Deputy Director of the FBI;
Whereas despite knowledge of this corruption, backed by documents and an eyewitness account, neither the Department of Justice nor the Federal Bureau of Investigation under the leadership of Mr. Mueller brought charges;
Whereas the Department of Justice actively threatened the liberty of a confidential informant embedded within Russia’s nuclear program who wished to inform Congress about Russian corruption of American uranium-related companies, and the FBI required this informant to sign a non-disclosure agreement, intentionally depriving Congress of information vital to national security and Congressional oversight authority;
Whereas Members of Congress have raised objections to, and concerns with, the sale of American uranium assets to Russian companies, and raised these concerns in official correspondence to then-President Obama as early as 2010;
Whereas in 2010, when the Russian Federation needed American approval of uranium sales, former President William Jefferson Clinton received hundreds of thousands of dollars in speaking fees from Kremlin-linked institutions, and requested approval from the State Department to meet with central figures in Russia’s nuclear industry, and eventually met with Russian leader Vladimir V. Putin at Mr. Putin’s private residence;
Whereas the Clinton Foundation has either directly or indirectly received undisclosed donations totaling millions of dollars from Russian-linked sources, including from officials in Russia’s nuclear program;
Whereas in 2010, Hillary Clinton, founder of the Clinton Foundation, wife of former President Clinton, and then Secretary of State, approved the sale of Uranium One to a Russian state-owned nuclear technology corporation;
Whereas any thorough and honest investigation into the corruption of American-uranium related business must include investigating the willful blindness of the FBI and its leaders;
Whereas under 28 CFR 45.2, no individual can participate in a criminal investigation if he has a personal or political relationship with any organization substantially involved in the conduct that is subject of the investigation;
Whereas under 28 CFR 45.2, no individual may participate in a criminal investigation if the individual’s participation would create an appearance of conflict of interest likely to affect public perception of the integrity of the investigation;
Whereas the Code of Federal Regulations, applied to Mr. Mueller, demonstrates that he cannot be allowed to investigate his former colleagues, supervisors, and subordinates;
Whereas these obvious conflicts of interest are unacceptable to the United States justice system and the American people:
Now, therefore, be it Resolved,
That House of Representatives expresses its sense that Robert Mueller is compromised and should resign from his special counsel position immediately.
the FBI turns over hundreds of pages of new Clinton probe documents
FBI Turns Over Hundreds Of Pages Of New Clinton Probe Documents
Now that obstructionist lawmakers have finally relented, Congressional efforts to investigate nefarious activities involving Democrats are finally moving forward following several bombshell revelations that the FBI may have turned a blind eye to controversial, potentially criminal actions involving powerful Democrats when FBI Director James Comey drafted a letter absolving Hillary Clinton and closing the bureau’s investigation into her alleged mishandling of classified information before she had even been interviewed.
The Senate Judiciary Committee opened an investigation into the bureau’s handling of the Clinton emails probe in September after these bombshell reports emerged, and today the Hill reports that the Feds have begun turning over to Senate investigators “hundreds of pages of memos” regarding the bureau’s probe into Hillary Clinton’s private email server.
The sources said the Justice Department notified the Senate Judiciary Committee late Friday and the FBI began transmitting memos soon after to assist Congress in its review of former Director James Comey’s handling of the Clinton email case.
The memos detail how and when the bureau’s leadership declined to pursue criminal charges against Clinton for transmitting classified information on her private email server as secretary of State, an investigation that has remained controversial since the 2016 presidential campaigns.
FBI officials declined to comment. “We don’t have any information for you,” spokeswoman Carol Cratty told The Hill.
This isn’t the first time in recent weeks that the bureau has decided to bow to pressure from lawmakers after damning details surfaced in the media. In September, Comey, – much like Hillary’s former IT consultant Paul Combetta who admitted to deleting Hillary’s emails despite the existence of a Congressional subpoena – had his very own “oh shit” moment when a witness confirmed during Congressional testimony that Comey started drafting his letter excusing Clinton months before the investigation was finished. Since then, the bureau has decided to begin turning over all documents requested by Congress, including memos pertaining to the infamous ‘Trump dossier’ after initially resisting a subpoena from the House Intel committee.
The pressure this time emanated from a federal lawsuit that brought the documents to light. Specifically, the lawsuit was filed by Judicial Watch to determine exactly when FBI Deputy Director Andrew McCabe recused himself from the Clinton email investigation, which was codenamed “Mid Year.” McCabe was forced to step aside due to questions about a possible conflict of interest involving hundreds of thousands of dollars of money that flowed to his wife’s political campaign from a Clinton ally.
On Friday, Bloomberg reported that in their quest to discover the the FBI Deputy Director may know, Republicans on the House Intelligence Committee threatened to subpoena McCabe next week unless he agrees to appear before their panel.
They intend on pressing McCabe on topics including his role in the FBI’s investigation into former White House National Security Advisor Michael Flynn, said the official, who asked not to be identified discussing the members’ plans. Interest in McCabe goes beyond Flynn, however, the official said.
McCabe’s role in the Clinton probe is especially conflicted: last October, the WSJ reported that the political organization of Virginia Gov. Terry McAuliffe, an influential Democrat with longstanding ties to Bill and Hillary Clinton, gave nearly $500,000 to the election campaign of McCabe’s wife, shortly before he helped oversee the FBI “investigation” into Clinton’s email use.
Campaign finance records show Mr. McAuliffe’s political-action committee donated $467,500 to the 2015 state Senate campaign of Dr. Jill McCabe, who is married to Andrew McCabe, now the deputy director of the FBI.
The Virginia Democratic Party, over which Mr. McAuliffe exerts considerable control, donated an additional $207,788 worth of support to Dr. McCabe’s campaign in the form of mailers, according to the records. That adds up to slightly more than $675,000 to her candidacy from entities either directly under Mr. McAuliffe’s control or strongly influenced by him. The figure represents more than a third of all the campaign funds Dr. McCabe raised in the effort.
The newly disclosed documents, presented in their entirety below, reveal that McCabe did not recuse himself from the long-running investigation until Nov. 1, 2016, just six days before the probe was officially ended and eight days before Trump defeated Clinton in one of the greatest upset victories in modern presidential politics.
After months of inexplicable delays, the chairman of the House Judiciary and Oversight committees, Bob Goodlatte (R-Va.) and Trey Gowdy (R-S.C.), announced a joint investigation into how the Justice Department handled last year’s investigation into Hillary Clinton’s private email server. The Senate Judiciary Committee had announced its own investigation weeks earlier.
The bureau’s decision to release the documents is a sign that new FBI Director Chris Wray, is attempting to build his own relationship with Congress amid multiple oversight investigations.
This is something!! Donna Brazile states in her books that she feared for her life after DNC employee Seth Rich was murdered:
Donna Brazile Says She “Feared For Her Life” After Seth Rich Was Killed
Perhaps the most shocking revelation contained in the excerpts from former DNC Chairwoman Donna Brazile’s book was, unsurprisingly, buried in a Washington Post overview of the various allegations (and frankly, we’re surprised the Post, given its status as a protector of the Washington establishment, deigned to publish it).
In the aftermath of Wikileaks’ decision to publish a cache of emails stolen from the DNC’s servers, Donna Brazile says she became increasingly paranoid about both possible Russian efforts to sway the election. Surprisingly, she says top Democrats initially instructed her not to discuss her concerns with others.
But even more than the Russians, Brazile says she feared possible retribution from shadowy elements within the campaign and the Democratic Party who might blame her for the leak. Her fears only intensified, she says, after the mysterious shooting of former campaign staffer Seth Rich, who the authorities said was killed during a robbery, though many so-called conspiracy theorists have speculated about a possible Democratic plot to kill Rich for his role in leaking the stash of DNC emails to Wikileaks. Brazile’s anxiety eventually spiraled out of control, to the point where she feared for her own life while serving as interim chairwoman of the DNC.
Brazile describes her mounting anxiety about Russia’s theft of emails and other data from DNC servers, the slow process of discovering the full extent of the cyberattacks and the personal fallout. She likens the feeling to having rats in your basement: “You take measures to get rid of them, but knowing they are there, or have been there, means you never feel truly at peace.”
Brazile writes that she was haunted by the still-unsolved murder of DNC data staffer Seth Rich and feared for her own life, shutting the blinds to her office window so snipers could not see her and installing surveillance cameras at her home. She wonders whether Russians had placed a listening device in plants in the DNC executive suite.
At first, Brazile writes of the hacking, top Democratic officials were “encouraging us not to talk about it.” But she says a wake-up moment came when she visited the White House in August 2016, for President Obama’s 55th birthday party. National security adviser Susan E. Rice and former attorney general Eric Holder separately pulled her aside quietly to urge her to take the Russian hacking seriously, which she did, she writes.
While she doesn’t elaborate on her reasons for suspecting that Rich’s death may have been a homicide, just the fact that Brazile says she, too, suspected that something nefarious might’ve been afoot is reason enough to take a second look at Rich’s death. Of course, if it’s true that Rich was killed as punishment for leaking the emails, then that would of course invalidata most of the evidence supporting the Russia interference narrative that has been propagated by the Democrats and their partners in the intelligence community.
This is big: an early Comey memo surfaces which accuses Hillary Clinton of “gross negligence” in her handling of emails. Now we need to find out who authorized the change? and for what reason?
Early Comey Memo Accused Hillary Of “Gross Negligence,” Punishable By Jail
According to a new report from The Hill, early drafts of former FBI Director James Comey’s statement on Hillary Clinton’s email case accused the former Secretary of State of “gross negligence” in her handling of classified information as opposed to the “extremely careless” phrase that made its way into the final statement.
As The Hill further points out, the change in language is significant since federal law states that “gross negligence” in handling the nation’s intelligence can be punished criminally with prison time or fines whereas “extreme carelessness” has no such legal definition and/or ramifications.
An early draft of former FBI Director James Comey’s statement closing out the Hillary Clinton email case accused the former Secretary of State of having been ‘grossly negligent” in handling classified information, new memos to Congress show.
The tough language was changed to the much softer accusation that Clinton had been “extremely careless” in her handling of classified information when Comey announced in July 2016 there would be no charges against her.
The draft, written weeks before the announcement of no charges, was described by multiple sources who saw the document both before and after it was sent to the Senate Judiciary Committee this past weekend.
“There is evidence to support a conclusion that Secretary Clinton, and others, used the email server in a manner that was grossly negligent with respect to the handling of classified information,” reads the statement, one of Comey’s earliest drafts.
Those sources said the draft statement was subsequently changed in red-line edits to conclude that the handling of 110 emails containing classified information that were transmitted by Clinton and her aides over her insecure personal email server was “extremely careless.”
Of course, Comey’s final statement, while critical of Hillary’s email usage, alleged that no prosecutor would pursue charges against actions which he described only as “extremely careless.”
“Although we did not find clear evidence that Secretary Clinton or her colleagues intended to violate laws governing the handling of the classified information, there is evidence that they were extremely careless in their handling of very sensitive, highly classified information.”
“There is evidence to support a conclusion that any reasonable person in Secretary Clinton’s position or in the position of those with whom she was corresponding about the matters should have known that an unclassified system was no place for that conversation.”
Meanwhile, Section 793 of federal law states that “gross negligence” with respect to the handling of national defense documents is punishable by a fine and up to 10 years in prison…so you can see why that might present a problem for Hillary.
“Whoever, being entrusted with or having lawful possession or control of any document, writing, code book, signal book, sketch, photograph, photographic negative, blueprint, plan, map, model, instrument, appliance, note, or information, relating to the national defense, (1) through gross negligence permits the same to be removed from its proper place of custody or delivered to anyone in violation of his trust, or to be lost, stolen, abstracted, or destroyed, or (2) having knowledge that the same has been illegally removed from its proper place of custody or delivered to anyone in violation of its trust, or lost, or stolen, abstracted, or destroyed, and fails to make prompt report of such loss, theft, abstraction, or destruction to his superior officer— shall be fined under this title or imprisoned not more than ten years, or both.”
Unfortunately, The Hill’s sources couldn’t confirm the most important detail behind this bombshell new revelation, namely who made the call to the change the language…
The sources, who spoke only on condition of anonymity because they were not authorized to speak to the media, said the memos show that at least three top FBI officials were involved in helping Comey fashion and edit the statement, including Deputy Director Andrew McCabe, General Counsel James Baker and Chief of Staff Jim Rybicki.
The documents turned over to Congress do not indicate who recommended the key wording changes, the sources said. The Senate Judiciary Committee is likely to demand the FBI identify who made the changes and why, the sources said.
…that said, we’re going to go out on a limb and question whether it just might have had something to do with that infamous meeting between Bill Clinton and then Attorney General Loretta Lynch, Comey’s boss, that happened just 6 days before Comey made his statement?
Nah, they probably really did just discuss their grandkids…
Intel Committee Demands Fusion GPS Bank Records; Suspects Journalists Paid To Spread “Russian Collusion” Claims
For nearly a year now we’ve all been inundated with 24×7 media coverage of the “Russian Collusion” narrative which suggests, among other things, that various members of the Trump campaign colluded with Russian operatives to obtain damaging information on Hillary Clinton and then used social media to spread that damaging information far and wide, thus causing Hillary’s inevitable second failed bid for the White House.
That said, what if it wasn’t the Trump administration, but rather the Hillary campaign and Democrats who were guilty of all the “Russian Collusion” crimes they’ve been screaming about for the better part of year now?
Of course, we already know that it was Hillary’s campaign and the DNC that paid for the Trump dossier (see: Hillary Clinton Lied, Paid For “Trump Dossier”). We also know that most of the sources listed in the dossier were based in Russia and include a “senior Kremlin official” as well as other “close associates of Vladimir Putin.”
Moreover, as CIA Deputy Director Michael Morell noted recently, it’s highly likely that some portion of the funds paid to Perkins Coie by the DNC and Hillary campaign made it’s way into the pockets of those “senior Kremlin officials” as compensation for their services.
In the dossier, Steele cites numerous anonymous sources, many of which work in the upper echelons of the Russian government.
The first two sources cited in the dossier’s first memo, dated June 20, 2016, are “a senior Russian Foreign Ministry figure” and “a former top level Russian intelligence officer still active inside the Kremlin.”
A third source is referred to as “a senior Russian financial official.” Other sources in the dossier are described as “a senior Kremlin official” and sources close to Igor Sechin, the head of Russian oil giant Rosneft and a close associate of Vladimir Putin’s.
Now, according to a report from The Washington Times, Representative Devin Nunes, a California Republican and chairman of the House Permanent Select Committee on Intelligence, seems to have reason to believe that Fusion GPS, and therefore Hillary and the DNC, may have paid journalists to spread the Russian collusion narrative which looks increasingly like nothing more than a cleverly crafted myth.
The role of reporters is taking on added importance in federal court battles over the infamous Russia dossier that leveled unverified charges of collusion against the Donald Trump campaign.
In U.S. District Court for the District of Columbia, Fusion GPS, the dossier’s financier via the Democratic Party and the Hillary Clinton campaign money, is fighting a House committee chairman’s bid to find out if the opposition research firm paid journalists.
Rep. Devin Nunes, California Republican and chairman of the House Permanent Select Committee on Intelligence, signed a subpoena to force a bank to turn over Fusion’s financial records. He wants to know who paid for the dossier, which was written in a series of 18 memos by former British spy Christopher Steele. He relied almost exclusively on unidentified Kremlin sources.
Fusion went to federal court to block the move, but the law firm Perkins Coie LLP, whose partner Marc E. Elias is the Clinton’s campaign’s general counsel, intervened. It filed a letter acknowledging it had paid Fusion for the dossier on behalf of Democrats. Fusion and Mr. Nunes then worked out an agreement on access to some of the firm’s financial records.
But the dispute heightened again Friday as Fusion renewed its request for a judge to block the subpoena because Mr. Nunes wants more information. The widened net includes the names of journalists and law firms that Fusion might have paid.
To our great ‘shock’, in court arguments Fusion did not deny making payments to journalists but simply cited First Amendment protection and confidentiality.
“It is contrived to substitute for the ridiculous notion that Intervenor [the House committee] can demand documents in an overbroad subpoena from a third party and not explain what it is looking for or why,” said a memorandum filed by Fusion’s law firm, Zuckerman Spaeder LLP, for U.S. District Judge Tanya Chutkan.
“And they are not pertinent, as they are not related to Russia or Donald Trump,” Fusion argues. “In attempting to justify the overbroad subpoena earlier, Intervenor could have, but of course did not, argue the relevance to its inquiry of any such payments.”
In the court battle with Mr. Nunes, Fusion has likened itself to a group of journalists with all associated rights. Its founders include former Wall Street Journal reporters Glenn Simpson and Peter Fritsch.
All of which again raises the very obvious question of why a Special Prosecutor was required to investigate the Trump campaign on nothing more than a series of rumors while no such Special Prosecutor seems to be necessary to investigate the Hillary campaign even after her own general counsel admitted to the same “crimes” of which Trump was accused?
Trump is ready to kill the individual mandate and in so doing will recover over 400 billion in 10 years due to the fact that subsidies will not have to be paid out. Needless to say but the Democrats will not be happy
Trump Drafting Executive Order To Kill Obamacare’s Individual Mandate, Report
After having previously cut so-called “cost reduction subsidies” (see: Trump To Scrap Crucial Obamacare Insurer Subsidy) and the marketing budget for Obamacare, Trump is now reportedly ready to also repeal the legislation’s controversial “individual mandate” which taxes people who choose to forego health insurance.
According to the Washington Examiner an executive order has already been drafted to scrap the mandate but has not yet been executed only due to ongoing GOP debates over whether or not to include the repeal in the pending tax bill.
The Trump administration has prepared an executive order that would unravel Obamacare’s individual mandate, but has put it on hold to see whether it might be included in the Republican tax bill instead, a GOP senator told the Washington Examiner.
According to the senator, an executive order is sitting with the Office of Management and Budget waiting for approval. President Trump decided to delay the executive order after Sen. Tom Cotton, R-Ark., pushed for the inclusion of the individual mandate repeal in the tax bill, and has been supportive of its inclusion in statements he has made on Twitter.
Of course, including the individual mandate repeal in the tax legislation is intended create billions in budget savings and offset lower tax receipts but it could come with the unfortunate side effect of alienating potential mainstream GOP votes in the Senate who refused to support the Obamacare repeal efforts earlier this year.
Including repeal of the individual mandate in the tax bill instead of through executive order would create billions in budget savings that Republicans need to pay for tax cuts. According to a Congressional Budget Office report published in December 2016, repeal of the individual mandate would save $416 billion over a decade, since it would mean fewer subsidy payments to people who sign up. A new CBO report is expected Monday.
The repeal is not currently in the tax bill, known as the Tax Cuts and Jobs Act, but House Speaker Paul Ryan said this weekend that it was on the negotiation table among House Republicans.
“We have an active conversation with our members on a whole host of ideas on things to add to this bill and that’s one of the things being discussed,” he said.
The senator who spoke to the Washington Examiner, who asked to remain anonymous, thinks colleagues could embrace repeal in the tax bill, because the revenue generated “pays for so many tax cuts.”
According to the Washington Examiner, Trump cannot repeal the individual mandate through executive order, but he can broaden “hardship exemptions,” which under Obamacare are left to the discretion of the administration. The exemptions allow customers to have ways to get out of paying the fine for not having coverage, which is $695 per adult or 2.5 percent of income, whichever is higher.
The Obama administration created hardship exemptions for a range of situations, including if someone filed for bankruptcy, experienced a flood, death of a family member, domestic violence or a shut-off notice from a utility company.
Of course, it’s only a matter of time until Nancy Pelosi and/or Chuck Schumer take a stage somewhere to tell us precisely how many people will die as a result of Republicans even talking about an “individual mandate” repeal.
As promised to you, the tax bill is dead on arrival at the Senate as McCain says no
John McCain Confirms: Tax Reform Is “DOA In The Senate”
It’s official: The Republican tax reform bill is dead on arrival in the Senate now that John McCain has become the third Republican senator to confirm that he plans to vote against it.
What’s worse for the Trump administration, McCain reportedly wants the bill to receive input from both parties – a criticism that he cited as his reason for voting against the Trump administration’s plan to repeal and replace Obamacare. This is particularly problematic because there’s approximately zero chance that any Democratic lawmakers will break ranks to vote with Republicans, despite President Donald Trump repeatedly saying that he expects to win over Democrats.
McCain reportedly confirmed his opposition – and also that the bill in its current form is DOA – during an interview with Fox Business’s Charlie Gasparino.
In recent weeks, John McCain has reiterated his demand that Republicans pass their tax plan through a bipartisan process that honors the norms of regular order. McCain voted down his party’s Obamacare repeal bill precisely because it failed to meet this standard. And it will be impossible to pass the House plan – or anything close to it – through any but a rushed, secretive, partisan process.
On Monday, Susan Collins declared her opposition to repealing the tax on multimillion-dollar estates. The current bill includes such a repeal, and many House conservatives seem deeply attached to the provision for some mysterious reason. And for months now, Bob Corker has also insisted that he wouldn’t vote for any tax plan that adds even a penny to the debt, even during the first ten years, where Congress would legally be allowed to do so. As it stands, the House plan would increase the deficit by a total of $1.5 trillion over ten years.
And at this rate, it’s unclear if the plan in its current form will even pass the House. Republican lawmakers from blue states hammered Ways and Means Chairman Kevin Brady about measures in the bill to repeal deductions for state and local taxes, while lowering the cap on the mortgage interest-rate deduction to $500,000. It would also eliminate deductions for student-loan interest. Controversially, it will also add an excise tax for corporations involved in cross-border payments that has drawn the ire of the US business community and its army of lobbyists.
So far, many powerful lobbying groups, including the National Association of Realtors, the National Federation of Independent Business, the National Association of Home Builders, the Independent Sector (a lobby for charities) and the National Farmers Union; and the American Institute of Architects
The ink wasn’t even dry yet on the just published Republican Tax Cut And Jobs Act last week when, within an hour of its unveiling, UBS’s analysts were already predicting that it has virtually no chance of passing: As UBS chief economist Seth Carpenter wrote shortly after the publication, “to our read, the release confirms our view that tax reform is far from being a done deal. The bill contains several specifics that we believe will prove sticking points, which increase the difficulty of finding the votes to support the plan in both the House and the Senate.” Fast forwarding to Carpenter’s conclusion: “We maintain our view that tax reform is unlikely this year or next.”
And as we pointed out yesterday, the TCJA resembles the plan outlined by Goldman weeks ago…
…So it shouldn’t come as a surprise that Goldman believes the bill has a 65% chance of passing by Q1. Of course, that prediction was made before McCain came out against the bill. Last month, he had reluctantly voted to pass the $4 trillion Senate budget plan. And adding another twist to the already complicated outlook for the bill, Goldman CEO Lloyd Blankfein said last week that “now’s not the best time for tax cuts”, a view diametrically opposite that of his former “right hand man”, Gary Cohn, currently Trump’s chief economic advisor, who has been charged with overseeing the reform effort, alongside Treasury Secretary Steven Mnuchin.
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Notably, reports that McCain will oppose the TCJA followed news that the senator had been hospitalized with an injury to his Achilles tendon…
I can’t tell you how much I hate wearing this boot! https://www.mccain.senate.gov/public/index.cfm?p=press-releases&id=4883021B-00C8-4807-9FCD-73E4CCD49391 …
Because of the Republicans’ razor-thin majority in the senate, they can only afford to lose two Republican votes on any piece of legislation, assuming united Democratic opposition.
Well that about does it for tonight
I WILL SEE YOU ON TUESDAY NIGHT