GOLD: $1201.15 UP 2.15 (COMEX TO COMEX CLOSINGS)
Silver: $14.53 DOWN 1 CENT (COMEX TO COMEX CLOSING)
Closing access prices:
Gold $1201.50
silver: $14.52
For comex gold:
AUGUST/
NUMBER OF NOTICES FILED TODAY FOR AUGUST CONTRACT: 3 NOTICE(S) FOR 300 oz
TOTAL NOTICES SO FAR 2417 FOR 241700 OZ (7.517 tonnes). this is the final no. of tonnes standing for August
And now Sept:
NUMBER OF NOTICES FILED TODAY FOR SEPT CONTRACT: 371 NOTICE(S) FOR 37100 oz
Total number of notices filed so far for Sept: 371 for 37100 oz or 1.1539 tonnes
For silver:
Sept
3759 NOTICE(S) FILED TODAY FOR
18,795,000 OZ/
Total number of notices filed so far this month: 3759 for 18,795,000 oz
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Bitcoin: BID $6932/OFFER $7017: UP $42(morning)
Bitcoin: BID/ $7002/offer $7087: UP $111(CLOSING/5 PM)
end
First Shanghai gold fix comes at 10 pm est
The second Shanghai gold fix: 2:15 pm
First Shanghai gold fix gold: 10 pm est: $1212.67
NY price at the same time:$1204.55
PREMIUM TO NY SPOT: $8.12
XX
Second gold fix early this morning: $ 1209.81
USA gold at the exact same time:$1201.60
PREMIUM TO NY SPOT: $8.21
XXXX
China is controlling the gold market
WE WILL NOT PROVIDE LONDON FIXES AS THEY ARE NOT ACCURATE AS TO WHAT IS GOING ON AT THE SAME TIME FRAME.
Let us have a look at the data for today
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In silver, the total OPEN INTEREST SURPRISINGLY FELL BY A SMALL 1156 CONTRACTS FROM 215,279 DOWN TO 215,123 WITH YESTERDAY’S 20 CENT FALL IN SILVER PRICING AT THE COMEX.
TODAY WE AGAIN MOVED CONSIDERABLY AWAY FROM LAST WEEK’S RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.
WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY(WELL OVER 30 MILLION OZ AT THE COMEX FOR JULY , 6 MILLION OZ FOR AUGUST AND NOW OVER 31 MILLION OZ STANDING IN SEPTEMBER. AS WELL WE ARE WITNESSING CONSIDERABLE LONGS PACKING THEIR BAGS AND MIGRATING OVER TO LONDON IN GREATER NUMBERS IN THE FORM OF EFP’S. WE WERE NOTIFIED THAT WE HAD A VERY STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:
18 EFP’S FOR SEPT. 4007 EFP’S FOR DECEMBER AND ZERO FOR ALL OTHER MONTHS AND THEREFORE TOTAL ISSUANCE: OF 4025 CONTRACTS. WITH THE TRANSFER OF 4025 CONTRACTS, WHAT THE CME IS STATING IS THAT THERE IS NO SILVER (OR GOLD) TO BE DELIVERED UPON AT THE COMEX AS THEY MUST EXPORT THEIR OBLIGATION TO LONDON. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24-48 HRS IN THE ISSUING OF EFP’S. THE 4025 EFP CONTRACTS TRANSLATES INTO 20.125MILLION OZ AND ACCOMPANYING:
1.THE 20 CENT FALL IN SILVER PRICE AT THE COMEX AND
2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR THE JUNE/2018 COMEX DELIVERY MONTH. (5.420 MILLION OZ) 30.370 MILLION OZ STANDING FOR DELIVERY IN JULY, FOR AUGUST: 6.065 MILLION OZ AND NOW 31.025 MILLION OZ STANDING SO FAR IN SEPT.
ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF AUGUST:
41,046 CONTRACTS (FOR 23 TRADING DAYS TOTAL 41,046 CONTRACTS) OR 205.23 MILLION OZ: (AVERAGE PER DAY: 1784 CONTRACTS OR 8.923 MILLION OZ/DAY)
TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER: SO FAR THIS MONTH OF JULY: 205.23 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 29.31% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)* JUNE’S 345.43 MILLION OZ IS THE SECOND HIGHEST RECORDED ISSUANCE OF EFP’S AND IT FOLLOWED THE RECORD SET IN APRIL 2018 OF 385.75 MILLION OZ.
ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S: 2,037.8 MILLION OZ.
ACCUMULATION FOR JAN 2018: 236.879 MILLION OZ
ACCUMULATION FOR FEB 2018: 244.95 MILLION OZ
ACCUMULATION FOR MARCH 2018: 236.67 MILLION OZ
ACCUMULATION FOR APRIL 2018: 385.75 MILLION OZ
ACCUMULATION FOR MAY 2018: 210.05 MILLION OZ
ACCUMULATION FOR JUNE 2018: 345.43 MILLION OZ
ACCUMULATION FOR JULY 2018: 172.84 MILLION OZ
ACCUMULATION FOR AUGUST 2018: 205.23 MILLION OZ.
RESULT: WE HAD A SMALL SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 1156 WITH THE 20 CENT FALL IN SILVER PRICING AT THE COMEX YESTERDAY. THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 4025 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER (SEE COMEX DATA) .
TODAY WE GAINED A GOOD SIZED: 2869 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:
i.e 4025 OPEN INTEREST CONTRACTS HEADED FOR LONDON (EFP’s) TOGETHER WITH A DECREASE OF 1156 OI COMEX CONTRACTS. AND ALL OF THIS GAIN IN DEMAND HAPPENED WITH A CONSIDERABLE 20 CENT LOSS IN PRICE OF SILVER AND A CLOSING PRICE OF $14.54 WITH RESPECT TO YESTERDAY’S TRADING. YET WE HAD A GIGANTIC AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY IN THE BIG JULY DELIVERY MONTH OF SLIGHTLY OVER 30 MILLION OZ, IN AUGUST ANOTHER BIG 6.065 MILLION OZ IN A NON ACTIVE MONTH AND NOW IN SEPTEMBER AN INITIAL MONSTROUS 31.025 MILLION OZ AMOUNT OF SILVER STANDING FOR DELIVERY IN SEPTEMBER.. NOBODY IS PAYING ATTENTION TO THE HUGE NUMBER OF PHYSICAL OUNCES STANDING FOR SILVER THESE PAST SEVERAL MONTHS.
In ounces AT THE COMEX, the OI is still represented by OVER 1 BILLION oz i.e. 1.071 MILLION OZ TO BE EXACT or 153% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT AUGUST MONTH/ THEY FILED AT THE COMEX: 3759 NOTICE(S) FOR 18,795,000 OZ OF SILVER
IN SILVER,PRIOR TO TODAY, WE SET THE NEW COMEX RECORD OF OPEN INTEREST AT 243,411 CONTRACTS ON APRIL 9.2018. AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $16.51.
AND NOW WE RECORD FOR POSTERITY ANOTHER ALL TIME RECORD OPEN INTEREST AT THE COMEX OF 244.,196 CONTRACTS ON AUGUST 22/2018 AND AGAIN WHEN THIS RECORD WAS SET, THE PRICE OF SILVER WAS $14.78 AND LOWER IN PRICE THAN PREVIOUS RECORDS.
ON THE DEMAND SIDE WE HAVE THE FOLLOWING:
- HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ MAY: 36.285 MILLION OZ ; JUNE/2018 (5.420 MILLION OZ) , JULY 2018 FINAL AMOUNT STANDING: 30.370 MILLION OZ ) FOR AUGUST 6.065 MILLION OZ. AND NOW SEPT: AN INITIAL HUGE 30.025 MILLION OZ.
- HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018) AND NOW AUGUST 22/2018: 244,196 CONTRACTS, WITH A SILVER PRICE OF $14.78
- HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
- RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/ AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ
AND YET, WITH THE EXTREMELY HIGH EFP ISSUANCE, WE HAVE A CONTINUAL LOW PRICE OF SILVER DESPITE THE ABOVE HUGE DEMAND. TO ME THE ONLY ANSWER IS THAT WE HAVE SOVEREIGN (CHINA) WHO IS ENDEAVOURING TO GOBBLE UP ALL AVAILABLE PHYSICAL SILVER NO MATTER WHERE, EXACTLY WHAT J.P.MORGAN IS DOING. AND IT IS MY BELIEF THAT J.P.MORGAN IS HOLDING ITS SILVER FOR ITS BENEFICIAL OWNER..THE USA GOVERNMENT WHO IN TURN IS HOLDING THAT SILVER FOR CHINA.(FOR A SILVER LOAN REPAYMENT).
IN GOLD, THE OPEN INTEREST ROSE BY A GOOD SIZED 1154 CONTRACTS UP TO 473,362 DESPITE THE LOSS IN THE COMEX GOLD PRICE/YESTERDAY’S TRADING (A FALL IN PRICE OF $6.90). THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A VERY STRONG SIZED 10,246 CONTRACTS:
OCTOBER HAD 0 EFP’S ISSUED AND, DECEMBER HAD AN ISSUANCE OF 10,246 CONTACTS AND ALL OTHER MONTHS ZERO. The NEW COMEX OI for the gold complex rests at 473.362. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S. THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY. THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.
IN ESSENCE WE HAVE AN A VERY STRONG SIZED OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 11,400 CONTRACTS: 1154 OI CONTRACTS INCREASED AT THE COMEX AND 10,246 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS TOTAL OI GAIN: 11,400 CONTRACTS OR 1,140,000 OZ = 35.45 TONNES. AND ALL OF THIS HUGE DEMAND OCCURRED DESPITE A CONSIDERABLE FALL IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF $6.90.
YESTERDAY, WE HAD 5458 EFP’S ISSUED.
ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF AUGUST : 157,066 CONTRACTS OR 15,706,600 OZ OR 488.54 TONNES (23 TRADING DAYS AND THUS AVERAGING: 6828 EFP CONTRACTS PER TRADING DAY OR 682,800 OZ/ TRADING DAY),,
TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS : THIS MONTH IN 23 TRADING DAYS IN TONNES: 488.54 TONNES
TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES
THUS EFP TRANSFERS REPRESENTS 488.54/2550 x 100% TONNES = 19.15% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***
ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE: 5,196.96* TONNES *SURPASSED ANNUAL PROD’N
ACCUMULATION OF GOLD EFP’S FOR JANUARY 2018: 653.22 TONNES (21 TRADING DAYS)
ACCUMULATION OF GOLD EFP’S FOR FEBRUARY 2018: 649.45 TONNES (20 TRADING DAYS)
ACCUMULATION OF GOLD EFP’S FOR MARCH 2018: 741.89 TONNES (22 TRADING DAYS)
ACCUMULATION OF GOLD EFP’S FOR APRIL 2018: 713.84 TONNES (21 TRADING DAYS)
ACCUMULATION OF GOLD EFP’S FOR MAY 2018: 693.80 TONNES ( 22 TRADING DAYS)
ACCUMULATION OF GOLD EFP FOR JUNE 2018 650.71 TONNES (21 TRADING DAYS)
ACCUMULATION OF GOLD EFP FOR JULY 2018 605.5 TONNES (21 TRADING DAYS)
ACCUMULATION OF GOLD EFP FOR AUG. 2018 488.54 TONNES (23 TRADING DAYS)
WHAT IS ALARMING TO ME, ACCORDING TO OUR LONDON EXPERT ANDREW MAGUIRE IS THAT THESE EFP’S ARE BEING TRANSFERRED TO WHAT ARE CALLED SERIAL FORWARD CONTRACT OBLIGATIONS AND THESE CONTRACTS ARE LESS THAN 14 DAYS. ANYTHING GREATER THAN 14 DAYS, THESE MUST BE RECORDED AND SENT TO THE COMPTROLLER, GREAT BRITAIN TO MONITOR RISK TO THE BANKING SYSTEM. IF THIS IS INDEED TRUE, THEN THIS IS A MASSIVE CONSPIRACY TO DEFRAUD AS WE NOW WITNESS A MONSTROUS TOTAL EFP’S ISSUANCE AS IT HEADS INTO THE STRATOSPHERE.
Result: A GOOD SIZED INCREASE IN OI AT THE COMEX OF 1154 DESPITE THE CONSIDERABLE LOSS IN PRICING ($6.90 THAT GOLD UNDERTOOK YESTERDAY) // . WE ALSO HAD A VERY STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 10,246 CONTRACTS AS THESE HAVE ALREADY BEEN NEGOTIATED AND CONFIRMED. THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX. I GUESS IT EXPLAINS THE HUGE ISSUANCE OF EFP’S…THERE IS HARDLY ANY GOLD PRESENT AT THE GOLD COMEX FOR DELIVERY PURPOSES. IF YOU TAKE INTO ACCOUNT THE 10,246 EFP CONTRACTS ISSUED, WE HAD A GAIN OF 11,400 CONTRACTS IN TOTAL OPEN INTEREST ON THE TWO EXCHANGES:
10,246 CONTRACTS MOVE TO LONDON AND 1154 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 35.45 TONNES). ..AND THIS GAIN IN DEMAND OCCURRED DESPITE THE FALL OF $6.90 IN YESTERDAY’S TRADING AT THE COMEX!!!.
we had: 371 notice(s) filed upon for 37100 oz of gold at the comex.
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With respect to our two criminal funds, the GLD and the SLV:
GLD...
WITH GOLD UP $2.15 TODAY: /
THE COMEX BLEEDS GOLD AGAIN AS WE HAVE ANOTHER BIG CHANGE IN GOLD INVENTORY AT THE GLD
A WITHDRAWAL OF 2.06 TONNES
/GLD INVENTORY 757.81 TONNES
Inventory rests tonight: 757.81 tonnes.
TO ALL INVESTORS THINKING OF BUYING GOLD THROUGH THE GLD ROUTE: YOU ARE MAKING A TERRIBLE MISTAKE AS THE CROOKS ARE USING WHATEVER GOLD COMES IN TO ATTACK BY SELLING THAT GOLD. IT SURE SEEMS TO ME THAT THE GOLD OBLIGATIONS AT THE GLD EXCEED THEIR INVENTORY
SLV/
WITH SILVER DOWN 1 CENT TODAY
NO CHANGES IN SILVER INVENTORY AT THE SLV;
/INVENTORY RESTS AT 329.856 MILLION OZ.
NOTE THE DIFFERENCE BETWEEN THE GLD AND SLV: THE CROOKS CAN RAID GOLD BECAUSE THEY DO HAVE SOME PHYSICAL. THEY DO NOT RAID SILVER PROBABLY BECAUSE THERE IS NO REAL SILVER INVENTORIES BEHIND THEM
end
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in SILVER FELL BY A SMALL SIZED 1156 CONTRACTS from 215,279 DOWN TO 214,123 AND MOVING CONSIDERABLY AWAY FROM THE NEW COMEX RECORD SET THIS MONTH AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..WE MUST HAVE HAD BOTH BANKER AND HEDGE FUND SHORT COVERING OCCURRING TO A HIGH DEGREE. THE PREVIOUS RECORD WAS SET ON APRIL 9/2018 AT 243,411 OPEN INTEREST CONTRACTS WITH THE SILVER PRICE AT THAT DAY: $16.53). AND PREVIOUS TO THAT, THE RECORD WAS ESTABLISHED AT: 234,787 CONTRACTS, SET ON APRIL 21.2017 OVER 1 1/3 YEARS AGO. THE PRICE OF SILVER ON THAT DAY: $17.89. AS YOU CAN SEE, WE HAVE RECORD HIGH OPEN INTERESTS IN SILVER ACCOMPANIED BY A CONTINUAL LOWER PRICE WHEN THAT RECORD WAS SET…..
.
OUR CUSTOMARY MIGRATION OF COMEX LONGS CONTINUE TO MORPH INTO LONDON FORWARDS AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:
18 EFP CONTRACTS FOR SEPTEMBER, 4007 CONTRACTS FOR DECEMBER AND AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 4025 CONTRACTS . EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. IF WE TAKE THE OI LOSS AT THE COMEX OF 1154 CONTRACTS TO THE 4025 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A NET GAIN OF 2869 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 14.35 MILLION OZ!!! AND YET WE ALSO HAVE A STRONG DEMAND FOR PHYSICAL AS WE WITNESSED A FINAL STANDING OF GREATER THAN 30 MILLION OZ FOR JULY, A STRONG 6.065 MILLION OZ FOR AUGUST.. AND NOW A HUGE 30.025 MILLION OZ INITIALLY STAND FOR SILVER IN SEPTEMBER….
RESULT: A SMALL SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE CONSIDERABLE 20 CENT PRICING LOSS THAT SILVER UNDERTOOK IN PRICING YESTERDAY. BUT WE ALSO HAD A GOOD SIZED 4025 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.
(report Harvey)
.
2.a) The Shanghai and London gold fix report
(Harvey)
2 b) Gold/silver trading overnight Europe, Goldcore
(Mark O’Byrne/zerohedge
and in NY: Bloomberg
3. ASIAN AFFAIRS
i) FRIDAY MORNING/ THURSDAY NIGHT: Shanghai closed DOWN 12.49 POINTS OR 0.46% /Hang Sang CLOSED DOWN 275.50 POINTS OR 0.90%/ / The Nikkei closed DOWN 12.49 POINTS OR 0.46%/Australia’s all ordinaires CLOSED DOWN 0.51% /Chinese yuan (ONSHORE) closed DOWN at 6.8375 AS POBC RESUMES SLIGHTLY ITS HUGE DEVALUATION /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER/Oil UP to 69.92 dollars per barrel for WTI and 77.55 for Brent. Stocks in Europe OPENED RED //. ONSHORE YUAN CLOSED DOWN AT 6.8375 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.8624: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOT DOING TOO GOOD : /ONSHORE YUAN TRADING MUCH MUCH STRONGER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED
3A/NORTH KOREA/SOUTH KOREA
i)North Korea/South Korea/USA/
b) REPORT ON JAPAN
The Bank of Japan is tweaking its bond buying and that is sending fears of an imminent taper. Yield rises to .11%
( zerohedge)
3 C/ CHINA
a)Even though it sure looks like China is trying to stabilize its yuan, the USA is accusing this nation of manipulating its currency as devaluing it offsets the negative effect of tariffs.
( zerohedge)
( zerohedge)
c)China is quite angry with Trump’s tweets on the stealing of emails from Hillary Clinton and the blaming of China of the slow denuclearization of North Korea
( zerohedge
4/EUROPEAN AFFAIRS
This will not go over well…after Trump initially proposed no auto tariffs for cars and industrial products a month ago, the EU surprisingly came back affirming that offer. However this time Trump said no because Europe does not buy USA cars
( zerohedge)
ii)ITALY
A terrific commentary from GEFIRA as they outline how eventually Italy will leave the EU
a must read…
( GEFIRA)
iii)This is very dangerous as the 10 yr Italian bond yield exceeds 3.26%. Already Italy has a huge 20% of its debt non performing and this will surely add to it. Italy must leave the EU as fast as possible. (see the GEFIRA article above)
(courtesy zerohedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
RUSSIA/SYRIA
the last holdout enclave in Syria which houses the terrorist organization of Al Qaeda, Idlib, will now see its final battle. Interesting enough the Americans are supporting this group
( zerohedge)
6. GLOBAL ISSUES
CANADA
i)The Canadian dollar slides as some doubt we will have a NAFTA deal. The USA has become quite obstinate as they refuse to give in on many points despite the Canadians giving in on diary and intellectual property rights.
2 commentaries
( zerohedge)
7. OIL ISSUES
8 EMERGING MARKET ISSUES
INDONESIA/INDIA
This morning: The Indonesia Rupiah falls to 14,750 a level not seen since 1998, the scene of the 1998 Asian crisis as contagion has now spread to this country from Argentina and Turkey. It seems that the entire world is now witnessing full blown contagion as basically they all borrowed huge amounts of cheap dollars and now they cannot pay back their loans.
(courtesy zerohedge)
This ought to throw the entire Brazilian economy into chaos. Lulu who is in prison is also leading in the polls by a huge 20 points ahead of the upcoming election. There is no speculation that he will be barred from running and also barred from TV appearances. The citizens will revolt!
(courtesy zerohedge)
9. PHYSICAL MARKETS
i)A Russian lawmaker suggest a gold linked cryptocurrency for weapons exports.
(CryptoCoins/GATA)
ii)It looks like the initial contract will have 1.2 million barrels of oil standing or approximately $84 million. That would translate into a 69,883.52 oz of gold if the seller of oil in yuan converts to gold. This works out to 2.17 tonnes of gold.
from Nicholas Biezanek to Harvey and Bill Murphy:
( Nicholas Biezanek)
10. USA stories which will influence the price of gold/silver)
i)Market trading /GOLD/MARKET MOVERS:
MARKET TRADING
a)The University of Michigan Economic condition report (sentiment index) improved modestly from 95.3 to 96.2 but still the weakest since jan 2018.
( zerohedge)
iv)SWAMP STORIES
a)Mueller may try to issue a report now so as to not influence the election. The Trump legal team is preparing a counter report which consists of two parts:
- the actual Mueller investigation is tainted because of bias
- the conflicts with Rosenstein
this is worth watching…
( zerohedge)
b)We have certainly highlighted this to you yesterday in our “genesis commentary”. We now have witnesses claiming that the FBI leaked stories and then used those stories in order to obtain a FISA warrant and spy on USA citizens. What is more alarming is the fact that Bruce Ohr told Congressional committee members behind closed doors that he met several times with Mueller’s pit bull Weissman and gave him details on the phony dossier explaining that almost all of the assertions were not verified. Mueller knew this and continued on with his witch hunt knowing 100% that the Russian election meddling was a hoax.
c)from the King report here is a list of important stories that outlines the fraud committed by the Democrats on the Republicans in the election of Donald Trump
( King report and a special thank you to Chris Powell for sending this to us)
Let us head over to the comex:
The next active delivery month after August for silver is September and here the OI FELL by 6,866 contracts DOWN to 6,205.
Thus by definition, the initial amount of physical silver ounces standing in this active delivery month of September is as follows:
6205 contracts x 5000 oz per contract = 31,025,000 oz. And this number will grow as we always witness queue jumping as the month progresses.
October GAINED 154 contracts to stand at 766
ON FIRST DAY NOTICE FOR THE SEPT/2017 SILVER CONTRACT MONTH: 20.515 MILLION OZ STOOD FOR DELIVERY AND BY MONTH’S END: A HUGE 32.875 MILLION OZ WAS THE FINAL STANDING AS WE WERE WELL INTO THE PHENOMENON OF QUEUE JUMPING IN SILVER. THUS WE ARE WAY AHEAD OF LAST YEAR AS ALREADY WE HAVE 30.025 MILLION OZ OF SILVER INITIALLY STAND.
the speculators are net short and the commercials are net long and the price of silver keeps going down?
Major gold/silver trading /commentaries for FRIDAY
GOLDCORE/BLOG/MARK O’BYRNE.
This Week’s Golden Nuggets
News, Market Updates, Charts and Videos You May Have Missed
Here is our weekly digest of the important news, market updates, charts and videos we covered this week.
As emerging market currencies around the world collapse in value and gold reaches new record highs in these fiat currencies, we felt it important to look at the terrible situation in Venezuela and consider whether this will be the fate of other massively indebted nations.
A “picture paints a thousand words” and the photos from Reuters Wider Image were very powerful in helping people understand the devastation that hyperinflation is reeking on the once wealthy South American nation.
Videos This Week
Market Updates This Week
Video: Will Indebted Nations Globally Follow Venezuela Into Hyperinflation?
End Of Dollar Hegemony May Happen Soon and Badly Impact Indebted America
10 Incredible Photos From Venezuela Show The Severe Risks Of Currency Devaluation
Charts This Week
News and Commentary
Gold headed for longest monthly losing streak since 2013 (Reuters.com)
Gold breaks consolidation range and drops back below $1,200 (FXStreet.com)
Trump to Back $200 Billion China Tariffs as Early as Next Week, Sources Say (Bloomberg.com)
Russian Lawmaker Suggests Gold-Linked Cryptocurrency for Arms Exports (CNN.com)
Special Report: In Venezuela, new cryptocurrency is nowhere to be found (Reuters.com)
Jim Rogers: Buy Gold (MoneyWeek.com)
How the 1930s banking crises prolonged the Great Depression (MoneyWeek.com)
Record bull run must end soon. So is it time for a return to gold? (Spectator.co.uk)
Australia’s “Mortgage Prisoners” Totally Screwed As Refi Rejections Soar (ZeroHedge.com)
Mapping The Countries Shutting Down The Internet The Most (ZeroHedge.com)
Let The Emerging Market Bailouts Begin: “We Don’t Have Much Choice” (Gold-Eagle.com)
The World Is Ganging up Against the Dollar (DailyReckoning.com)
Listen on SoundCloud , Blubrry & iTunes. Watch on YouTube below
Gold Prices (LBMA AM)
30 Aug: USD 1,202.35, GBP 924.25 & EUR 1,028.49 per ounce
29 Aug: USD 1,204.30, GBP 935.14 & EUR 1,032.33 per ounce
28 Aug: USD 1,212.75, GBP 939.88 & EUR 1,037.02 per ounce
24 Aug: USD 1,189.95, GBP 928.76 & EUR 1,029.43 per ounce
23 Aug: USD 1,187.30, GBP 923.24 & EUR 1,027.61 per ounce
22 Aug: USD 1,196.85, GBP 928.25 & EUR 1,032.88 per ounce
Silver Prices (LBMA)
30 Aug: USD 14.67, GBP 11.27 & EUR 12.54 per ounce
29 Aug: USD 14.69, GBP 11.40 & EUR 12.60 per ounce
28 Aug: USD 14.90, GBP 11.56 & EUR 12.74 per ounce
24 Aug: USD 14.62, GBP 11.37 & EUR 12.63 per ounce
23 Aug: USD 14.63, GBP 11.34 & EUR 12.62 per ounce
22 Aug: USD 14.81, GBP 11.49 & EUR 12.77 per ounce
Recent Market Updates
– Video: “Financial War” Deepens as Russia Buys Gold and Dollar Hegemony At Risk – Rickards on CNN
– Will Indebted Nations Globally Follow Venezuela Into Hyperinflation?
– End Of Dollar Hegemony May Happen Soon and Badly Impact Indebted America
– 10 Incredible Photos From Venezuela Show The Disastrous Risks Of Currency Devaluation
– This Week’s Golden Nuggets
– Video: Is Silver Set for a Massive Breakout?
– Banks Now Long Gold, Short Dollar. What Do They Know?
– Russia Buys 800,000 Ounces Of Gold In July
– Gold Season – Is This It?
– This Week’s Golden Nuggets
– Gold And Silver Prices Fall 1.6% and 4.3% To Near 2 Year Lows
– London House Prices Fall At Fastest Annual Rate Since Height Of Financial Crisis
– Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future”
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The following is self explanatory
(courtesy GATA/Chris Powell and Harvey Organ)
GATA asks bank regulator to check risks of gold
futures maneuver
Submitted by cpowell on Sun, 2018-06-10 16:17. Section: Daily Dispatches
12:21p ET Sunday, June 10, 2018
Dear Friend of GATA and Gold:
GATA has appealed to the U.S. comptroller of the currency, who has regulatory authority over banks, to review financial risks certain banks may have incurred through derivatives in the monetary metals markets, particularly through the recent heavy use of the “exchange for physicals” mechanism of settling gold and silver futures contracts on the New York Commodities Exchange.
The appeal was made in a letter sent May 5 to the comptroller, Joseph M. Otting, whose office is part of the U.S. Treasury Department, by your secretary/treasurer and GATA futures market consultant Harvey Organ.
“Exchange for physical” settlements of futures contracts long were considered emergency procedures when a seller was not able to deliver metal from an exchange-approved warehouse and wanted to settle with delivery elsewhere. But now such settlements appear to constitute most gold and silver futures settlements on the Comex. It is a strange development that appears to have been necessitated by the increasing difficulties of central banking’s gold and silver price suppression policy.
GATA has received no acknowledgment of the letter. Its text is below and a PDF copy of it is here:
http://www.gata.org/files/ComptrollerOfCurrencyLetter.pdf
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
* * *
May 5, 2018
Joseph M. Otting, Comptroller of the Currency
U.S. Treasury Department
400 7th Street, SW
Washington DC 20219
Dear Comptroller Otting:
Please let us bring to your attention financial risks to major banks involving their possibly unreported exposure to derivatives in the monetary metals markets.
In recent months gold and silver future contracts issued by U.S. banks on the New York Commodities Exchange have been moved off-exchange for delivery through a mechanism known as “exchange for physical” (EFP) contracts. Until recently use of this mechanism was considered an emergency procedure when a seller did not have access to metal for delivery through Comex warehouses. Now the mechanism seems to be in use for a large share of front-month contracts for which delivery is sought.
Here is an example that is happening at the Comex in the front active month of April for gold and the inactive delivery month of April for silver.
In gold, there were 229,436 EFP contracts for 713.64 tonnes, an average of 10,925 contracts and 1,092,500 ounces per trading day.
In silver, there were 77,150 EFP contracts for 385,750,000 ounces, an average of 3,673 contracts and 18,369,000 ounces per trading day.
London Bullion Market Association rules suggest that these contracts may not be reported to regulators. The LBMA’s bylaws say:
“Figures above exclude any contracts not subject to risk-based capital requirements, such as FX contracts with an original maturity of 14 days or less, futures contracts, written options, and basis swaps. Therefore, the total notional amount of derivatives by maturity will not add to the total derivatives figure in this table.”
We are told that these EFP contracts are transferred from the Comex to London as what are called “serial forwards” and their duration is always less than 14 days, which exempts them from being reported.
It is our understanding that in each quarter your office prepares a report detailing risk undertaken by the banks under the comptroller’s supervision.
These risks include derivatives undertaken by U.S. banks and other obligations that may cause a bank to fail. Our concern is that your office may not be aware of large unreported derivative exposure by banks.
Could you review this matter and let us know your conclusions?
Sincerely,
CHRIS POWELL
Secretary/Treasurer
HARVEY ORGAN
Consultant
Gold Anti-Trust Action Committee Inc.
7 Villa Louisa Road
Manchester, Connecticut 06043-7541
end
Finally, they replied and it was a complete brush off
(courtesy zerohedge)
Currency comptroller brushes off GATA’s inquiry on
gold, silver EFPs
Submitted by cpowell on Fri, 2018-08-10 15:37. Section: Daily Dispatches
11:35a ET Friday, August 10, 2018
Dear Friend of GATA and Gold:
The U.S. comptroller of the currency, a bank regulator, has declined GATA’s request to inquire into the strange explosion of the use of the emergency procedure of “exchange for physicals” in the settlement by banks of the gold and silver futures contracts they have sold on the New York Commodities Exchange.
Your secretary/treasurer and GATA’s consultant about the Comex, Harvey Organ, wrote to the comptroller, James M. Otting, on May 5, calling attention to the recent enormous use of EFPs, which implies derivatives risks being undertaken by U.S. banks that could cause the banks to fail:
http://www.gata.org/node/18303
“Our concern is that your office may not be aware of large unreported derivative exposure by banks,” GATA wrote.
As months passed without any acknowledgment from the comptroller’s office, your secretary/treasurer appealed to his U.S. representative, John B. Larson, D-Connecticut, to ask the comptroller’s office to reply. The congressman’s office made a second inquiry on Monday this week and today the comptroller’s office provided Larson with a copy of a reply written and mailed Wednesday.
The comptroller’s reply, signed by the deputy comptroller for public affairs, Bryan Hubbard, said only that the comptroller’s office has “dedicated examiners” at the largest banks who “continuously evaluate the credit, market, operational, reputation, and compliance risks of bank trading and derivative activities.”
The reply did not say anything about the use of the “exchange for physicals” procedure for settling futures contracts. That is, the reply was a begrudged brushoff and GATA’s letter would have been ignored completely if not for Representative Larson’s repeated intervention.
Of course GATA hardly expected a conscientious reply to its letter, the comptroller’s office being not an independent regulator but part of the Treasury Department, whose mandate includes administration of the Gold Reserve Act of 1934, which, as amended in the 1970s, authorizes the department’s Exchange Stabilization Fund to secretly intervene in and rig any market in the world, directly or through intermediaries:
https://www.treasury.gov/resource-center/international/ESF/Pages/esf-ind…
But there’s always value in demonstrating government’s lack of candor about what it is doing, especially in regard to the monetary metals.
A PDF copy of the reply from the comptroller’s office is posted at GATA’s internet site here:
http://www.gata.org/files/ComptrollerOfCurrencyReply-08-08-2018.pdf
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
END
A Russian lawmaker suggest a gold linked cryptocurrency for weapons exports.
(CryptoCoins/GATA)
Russian lawmaker suggests gold-linked
cryptocurrency for weapons exports
Submitted by cpowell on Thu, 2018-08-30 23:30. Section: Daily Dispatches
From Crypto Coins News, Asker, Norway
Thursday, August 30, 2018
A senior Russian lawmaker has suggested that Moscow should turn to cryptocurrency backed by gold for payments in Russian arms exports to evade financial sanctions from the West.
Prominent lawmaker Vladimir Gutenev, first deputy head of the Economic Policy Committee at the State Duma, the Russian Parliament’s lower chamber, has urged the Kremlin to suspend treaties with the United States amid an escalating policy war.
…
In April the Trump administration talked up new sanctions against Russia as punishment for the latter’s involvement in the Syrian conflict.
In a notice the following month, the United States sanctioned six Russian entities for allegedly violating its weapons of mass destruction non-proliferation treaty.
Speaking to Russia’s largest news agency, TASS, and talking up an “asymmetric response” to the United States, Gutenev called for the suspension of treaties with the U.S., including the non-proliferation of missile technologies.
Pointedly, the lawmaker called on the government to switch to a cryptocurrency as a means of avoiding U.S. dollar-based commerce and dependence on the global interbanking system operated by SWIFT, an organization that has been influenced by U.S. interests in the past. …
… For the remainder of the report:
https://www.ccn.com/russian-lawmaker-suggests-gold-linked-cryptocurrency…
* * *
END
It looks like the initial contract will have 1.2 million barrels of oil standing or approximately $84 million. That would translate into a 69,883.52 oz of gold if the seller of oil in yuan converts to gold. This works out to 2.17 tonnes of gold.
from Nicholas Biezanek to Harvey and Bill Murphy:
(courtesy Nicholas Biezanek)
Is The Petroyuan Behind The USA’s Insane, Catatonic Frenzy?
Nicholas Biezanek
The foundation of the global monetary system over the last 45 years is fracturing in plain sight and its demise is generating a series of interconnected and highly incendiary events that will result in a denouement that renders the resultant world order far different from the USD hegemony to which most of us are accustomed.
On Monday 3rd September 2018, the inaugural petroyuan contract enters its 5 day settlement period (all contracts have such a structured 5 day settlement period) and thereafter there is a contract maturity every month. Whilst the open interest on the inaugural SC1809 contract has diminished to just 1202 contracts (1,202,000 barrels) , it is the SC1812 contract which is now attracting most trading activity with a current open interest of 33,620 contracts (33,620,000 barrels. The maturity of this inaugural contract marks the end of the beginning for the petroyuan rollout and since it is virtually ignored by the Western media, in the table below, I reproduce the spectacular crescendo of trading volumes for just the two most prominent contracts (there are a galaxy of other open contracts). One or two commentators mocked the SC1809 performance up to mid-April, but thereafter they have morphed into the ranks of the vast majority that believe that a conspiracy of silence is the best response to this inconvenient upheaval until the industrial military complex manages to better mobilize a retaliatory response.
| Shanghai Energy Exchange |
YUAN |
|
| March (from 26th) | 2018 |
114,040,764,200 |
| April-SC1809 | 2018 |
533,735,069,200 |
| May -SC1809 | 2018 |
1,764,654,402,200 |
| June-SC1809 | 2018 |
1,904,712,268,000 |
| July-SC1809 | 2018 |
2,760,888,297,200 |
| August _SC1809 | 2018 |
1,318,716,862,000 |
| August -SC1812 | 2018 |
2,116,491,498,000 |
| August combined | 2018 |
3,435,208,360,000 |
|
10,513,239,160,800 |
||
In order to assist with contextualizing the above data, the monthly global oil consumption of (less than) 100 million barrels per day would be valued at about Yuan1.4 trillion. This August 2018 volume of Yuan 3.43 trillion clearly gives notice that the petroyuan has become a serious global oil industry player, with catastrophic future consequences for the petrodollar monopoly leading to the fracturing of the hegemony of the USD. In formal logic theory there is a common fallacy –post hoc ergo propter hoc, so one must be careful of putting too much emphasis on any chronological order of events. Nevertheless I believe there are compelling reasons to believe in the applicability of the above mentioned dictum in respect of interpreting what has transpired to date in 2018.
- The final contractual structure of the previously promulgated petroyuan platform was announced early in 2018, with 26th March 2018 set as the launch date. This event would be the ‘hoc’.
- Gold (and indeed silver) was then manipulated by the dumping of gargantuan volumes of naked short COMEX paper contracts, engineering the gold from $1,350 to a low of $1,160 per oz. EFP contracts became a daily farcical occurrence, recording, in just YTD 2018, an aggregate of over two billion ounces in silver contracts and 5,174 tonnes in gold contracts and no institution or regulator believes there is any obligation at all to explain the nature of these contracts so mysteriously novated into an obligation upon the LBMA; the LBMA’s own disclosures of its loco London vault gold (and silver) holdings evidence metronomic consistency, thus precluding the possibility that even a single ounce of physical delivery has transpired in respect of this new genre of ‘opaque’ contractual obligations. (‘opaque’ as in midnight black)
- The US frantically weaponized the USD by simultaneously mobilizing its deployment against China, Russia, Iran and Turkey but gave the Saudis a free pass to seek to control the Yemeni oil reserves, no matter at what human cost.
- The Yuan fell 9%, totally consistent with the impact of more than ten trillion Yuan diverting from established USD denominated oil markets and entering the Shanghai Energy Exchange?!!
-
China/Russia/Iran/Turkey/India continue to be huge accumulators of physical gold and moreover embrace the evolution of the expanding one belt one road project in which the fiat USD has zero participation or influence.( The rumour that Turkey disposed of any gold at all has been explained by the removal of private bank vault gold from the statistics of official Turkish gold reserves as reported by one commentator.)
It might seem that any replacement for the USD hegemony was developing at a glacial pace but the petroyuan platform and CIPS are now operational- note that CIPS offers the kind of independence from SWIFT’s abusive monopoly for which the Europeans (particularly the Germans) are now clamouring. There were two great podcasts promulgated recently-Dr. Dave Janda/Jim Willie and Greg Hunter/Jim Sinclair/Bill Holter; the ingredients for fundamental change are gathering momentum for all ‘with eyes to see’. America expects Iran to be completely (i.e.100%) ostracized from global oil markets by 4th November 2018 (on the eve of the mid-term elections). “Anyone who trades with Iran will not trade with USA’. If this happens then expect Iran to ‘close’ the Straits of Hormuz-it would have nowhere else to go. China, moreover, is firmly entrenched in Djibouti at the mouth of the Bab-el-Mandep and there is a power vacuum across the Strait in Yemen. The US navy will protect the West’s interests; nothing to see here! Well ask the captain of the USS Donald Cook if the US fleet is invincible (you really should do your own research into that incident and others).A few hours ago there was a ZeroHedge posting titled Modernized Chinese Navy Could Surpass US. Perhaps indeed the petroyuan platform should be a strong contender for the Nobel Peace Prize as it gives a portal for China, Iran Iraq, Venezuela, Russia, Syria amongst others to participate in a free, non weaponized global oil market and thus avoid catastrophic confrontations. Maybe the Saudis will follow suit and perhaps India will realize that there would still be life after continuing to import Iranian crude.
All over the world, financial institutions have been forced to devote scarce resources to develop policies, controls and procedures to comply with FATCA or face penalties and sanctions .How much value add is generated by this burden? Before you dismiss the prospects of a global reset, ask yourself which vassal state now freely and willingly embraces the imposition of USA hegemony and the grotesque abuse of the privilege of managing the world’s reserve currency. Smug, beaming analysts on CNBC/Bloomberg discuss the escalating debt/currency crisis in emerging markets ,now devastating the lives of billions of people and when asked if the same could ever happen in USA, the immediate response is “absolutely no because we can just print money’.
Can anyone refute the proposition that there is a strong linkage between the manifest desperation of America’s concurrent perpetual war on physical gold /silver coupled with its simultaneous unilateral aggression towards all of China, Turkey, Russia and Iran and the imminent deemphasizing of the petro dollar? Recently I heard a libertarian prospective American politician announce that America should be entering a ‘post scarcity’ era as fiat USDs can be created to address any problem. Absolutely-what could go wrong? Well quite a lot actually. As I write the situation in the Syrian Idlib province is gearing up for an end game and there are massive Russian troop maneuvers to its western border and China has been invited to participate. Russia has claimed that elements from western governments have already brought 8 tankers of Chlorine gas into the Idlib area to perpetrate a FALSE FLAG chemical weapons attack so as to justify the West attacking Syria once again. The USA is determined to assist these Idlib rebels, although it has no clue as to the precise composition of this eclectic force-probably AL Qaeda and ISIS are generously represented ,so obviously USA assistance is manifestly logical, but that is American foreign policy for you!
_____________________________________________________________________________________________________________________________________________________________________________________
Your early FRIDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST
i) Chinese yuan vs USA dollar/CLOSED DOWN TO 6.8375/HUGE DEVALUATION FOR THE PAST FOUR WEEKS RESUMES/CHINESE COMING TO USA FOR TRADE TALKS IN NOVEMBER //OFFSHORE YUAN: 6.8624 ?? /shanghai bourse CLOSED DOWN 12.49 POINTS OR 0.46% /HANG SANG CLOSED DOWN 275.50 POINTS OR 0.98%
2. Nikkei closed DOWN 4.35 POINTS OR 0.09%/USA: YEN FALLS TO 110.82/
3. Europe stocks OPENED DEEPLY IN THE RED
/USA dollar index RISES TO 94.80/Euro FALLS TO 1.1646
3b Japan 10 year bond yield: RISES TO . +.11/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.82/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD IS NOW TARGETED AT .11%/JAPAN LOSING CONTROL OF THEIR BOND MARKET
3c Nikkei now JUST BELOW 17,000
3d USA/Yen rate now well below the important 120 barrier this morning
3e WTI:: 69.72 and Brent: 77.55
3f Gold UP/JAPANESE Yen UP/ CHINESE YUAN DOWN SLIGHTLY (ON SHORE)/OFF SHORE DOWN BADLY
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil DOWN for WTI and DOWN FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.340%/Italian 10 yr bond yield DOWN to 3.21% /SPAIN 10 YR BOND YIELD UP TO 1.46%
3j Greek 10 year bond yield RISES TO : 4.40
3k Gold at $1204.65 silver at:14.61 7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 34 /100 in roubles/dollar) 67.93
3m oil into the 69 dollar handle for WTI and 77 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.82 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9679 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.12743 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 +0.34%
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 2.84% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 2.99%
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
TURKISH LIRA: DOWN BADLY TO 6.4513
US Futures, Global Markets Slide Amid Emerging
Market Bloodbath
It is a sea of red on trader screens this morning with U.S. equity futures modestly lower on the last trading day of the month, after European and Asian shares fell following Trump’s latest comments on trade. Emerging Markets were hit again while Treasury yields drifted lower and the dollar rebounded from an early dip.
The deepening rout in the Turkish lira and Argentinian peso spread to other emerging markets, with the Indonesian rupiah dropping to the weakest level since the 1998 Asian financial crisis…
… and the Indian rupee sliding to a record low.
Caution has returned to markets as global stocks end a month that saw a solid rally from mid-August. While the Fed remains on its tightening path and Chinese authorities stepped in to stem declines in the country’s currency, the threat of global growth taking a hit from souring U.S.-China relations remains front and center, and continues to slam emerging markets the hardest.
After emerging markets initially ignored the slide in the Argentine Peso (and Turkish Lira), the correlation between the currency and the broader EM FX index has jumped, as the Argentine contagion has spread to the rest of the world following the latest shock plunge sent the currency to a record low.
More trade uncertainty was in the air as President Donald Trump was said to move ahead with a plan to impose $200 billion in new tariffs on China, pushing the MSCI Asia Pacific down 0.3%. One bright spot, China’s official manufacturing PMI unexpectedly strengthened, signaling some resilience to escalating trade wars and that China’s stimulus may be trickling into the economy:
- Chinese Manufacturing PMI (Jul) 51.3 vs. Exp. 51.0 (Prev. 51.2)
- Chinese Non-Manufacturing PMI (Jul) 54.2 vs. Exp. 53.7 (Prev. 54.0)
- Chinese Composite PMI (Aug) 53.8 (Prev. 53.6)
It has been a busy session so far, with several product-specific moves: the Yuan rallied in Asian trading after stronger-than-expected PBOC fix coupled with domestic PMI beats, however that did not help the Shanghai Composite which closed lower for a 4th day.
The EUR was bid early in European session on hawkish Nowotny comments, however it reversed its gain and slid to session lows below 1.1660 as US traders starting coming in; At the same time, USDJPY made a firm break below 111.00, while the Turkish Lira for once lead EMFX higher after latest de facto tightening measures sought to incentivize local currency savings.
Turkey hiked a tax on up to 6-month FX deposit accounts to 20% from 18%, and raised the tax on FX accounts with maturities of up to 1 year to 16% from 15%, according to decree published in official gazette. At the same time, Turkey cut tax on lira deposit accounts to 5% from 15% for up to 6-month accounts. The result was another squeeze, but also confirmation that the central bank refuses to intervene conventionally by hiking rates. As a result while the lira initially jumped 3%, it has since seen the gain fade to 1.2%
U.S. equity futures trade close to bottom of yesterday’s range. JGB futures spike lower as BOJ purchase schedule for September shows a reduction on a net basis.
European shares fell for a second day on Friday on reports that U.S. President Donald Trump is planning more tariffs on China, while Whitbread surged after clinching a $5.1 billion deal with Coca-Cola. The STOXX 600 dropped 0.5%, on track for its biggest decline in two weeks, led by Germany’s DAX which was dragged lower by trade-sensitive industrial stocks, and fell 1%. Sparring over trade between Trump and the EU hit European car stocks, which were down 1% and the worst-performing sector after Trump told Bloomberg he rejected an EU offer to eliminate car tariffs, saying its trade policies are “almost as bad as China”. In response, European Commission President Jean-Claude Juncker said the EU would respond in kind. Daimler, Volkswagen, BMW, and Continental were the biggest weights on the DAX, falling 1 to 1.3 percent after rebounding in the previous session.
Earlier, Asian markets also traded lower across the board, with sentiment hit by reports Trump will back tariffs on an additional $200BN of Chinese goods as early as next week, although losses in the Asia-Pac region were stemmed as participants also digested a trifecta of encouraging China PMI data. Nonetheless, ASX 200 (-0.5%) was lower as weakness in miners and profit taking in telecoms led the downside in Australia, while the Nikkei 225 (-0.1%) was initially pressured by a firmer currency but then showed resilience and gradually rebounded throughout the session. Shanghai Comp. (-0.5%) was also weighed by the fresh tariff fears although data helped plug losses including Chinese Official Manufacturing and Non-Manufacturing PMI which topped estimates and with Composite PMI higher than previous. The
Hang Seng (-1.0%) was the worst performer as its largest weighted stock Tencent slumped over 5% at the open after China’s regulators said they plan to limit the number of new online games to restrict minors’ playing time. Other game developers join the slump, with Kingsoft falling 2.8% and Youzu Interactive dropping 7.5%.
“It’s very hard to see a decisive resuscitation of risk appetite until these tensions are resolved,” said Janus Henderson strategist Paul O’Connor. “We have learned to under-react to some of the individual headlines because if you try to extrapolate from any of them you could find yourself in big trouble.”
While trade disputes have caused uncertainty and volatility, investors drew comfort from strong earnings strong earnings.
“Concerns around trade are not significantly affecting macro and market fundamentals at this stage. There’s still a fairly strong global recovery, earnings forecasts remain resilient across the board,” said Janus Henderson’s O’Connor. “It limits the upside but isn’t something that is changing our perception of broader market fundamentals.”
For those who missed it, there was a barrage of Trump-related news overnight following an extensive Bloomberg interview, with the highlights below:
- Trump rejected the EU’s proposal to remove car tariffs, stating that the offer is not good enough, while he added
- the EU is almost as bad as China, just smaller.
- Trump said he has no regrets appointing Powell as Fed chair and stated he is not being accommodated by the Fed in trade disputes but he is not sure the currency should be controlled by a politician. In addition, Trump stated that AG Sessions job is safe until at least the November elections and declared there will be no pay rises for public sector workers in 2019, while Trump also threatened to withdraw from WTO if it does not “shape up”.
- Trump has once again threatened to withdraw from the WTO unless the organisation treats the US better.
- Trump stated that a trade agreement with Canada may come by Friday or within a period of time but it will occur, while Canada’s Foreign Minister Freeland was said to be optimistic about NAFTA talks and commented that the both sides are showing constructive attitudes and have a lot of work to do in a short time. However, reports later noted that US & Canada have not made progress yet on Chapter 9 issue in trade discussions and that Canadian Foreign Minister Freeland left talks with USTR after only minutes which will reconvene on Friday morning.
In overnight central bank news, the BoK kept the 7-day repo rate unchanged at 1.50% as expected, with the decision not unanimous as board member Lee dissented. BoK stated the economy is to maintain growth momentum and rebound in consumption will continue but also commented that pace of investment will slow. Elsewhere, the RBA said high debt levels could make future policy decisions difficult and could also make the economy less resilient to shocks.
In rates, USTs remain supported through Asia and Europe with curve unchanged; bunds traded in a tight range while BTPs rallied after reports of a more pragmatic deficit ratio within the new Italian budget.
Expected data include University of Michigan Consumer Sentiment. Big Lots and Rubius Therapeutics are among companies reporting earnings.
Market Snapshot
- S&P 500 futures little changed at 2,901.75
- STOXX Europe 600 down 0.5% to 383.51
- German 10Y yield rose 0.5 bps to 0.351%
- Euro up 0.06% to $1.1678
- Italian 10Y yield rose 8.8 bps to 2.941%
- Spanish 10Y yield fell 0.5 bps to 1.465%
- MXAP down 0.3% to 165.61
- MXAPJ down 0.6% to 534.51
- Nikkei down 0.02% to 22,865.15
- Topix down 0.2% to 1,735.35
- Hang Seng Index down 1% to 27,888.55
- Shanghai Composite down 0.5% to 2,725.25
- Sensex down 0.2% to 38,599.94
- Australia S&P/ASX 200 down 0.5% to 6,319.50
- Kospi up 0.7% to 2,322.88
- Brent futures down 0.5% to $77.39/bbl
- Gold spot up 0.6% to $1,207.04
- U.S. Dollar Index little changed at 94.68
Top Overnight News from Bloomberg
- President Donald Trump wants to move ahead with a plan to impose tariffs on $200 billion in Chinese imports as soon as a public- comment period concludes next week, according to six people familiar with the matter
- President Donald Trump said in a Bloomberg interview that he would pull the U.S. out of the WTO if it doesn’t “shape up.” He also rejected the EU’s offer to eliminate trans-Atlantic car tariffs, and said a report that he wants to move ahead with a plan to impose tariffs on $200 billion in Chinese imports as soon as next week was “not totally wrong”
- Trump declared Thursday that China won’t outlast the U.S. in their trade dispute, and said his administration is re-examining how to determine whether countries are manipulating their currencies
- President Donald Trump said he doesn’t regret appointing Jerome Powell as Federal Reserve chairman, even after criticizing interest rate increases by the central bank
- The U.S. president said his country is making progress with Canada to revamp Nafta as negotiators stepped up the pace of discussions to meet a Friday deadline to reach an agreement
- ECB policy maker Olli Rehn hit back against Trump’s accusation that Europe is manipulating its currency and is “almost as bad as China” on trade, saying it was “very regrettable that from the U.S. side there is a tendency to escalate the trade war”
- The Bank of Korea left its key interest rate unchanged on Friday as it weighed escalating trade battles and signs that Asia’s fourth-largest economy may be losing steam
- ECB policy maker Ewald Nowotny suggested that Italy’s laggard economy shouldn’t slow plans to end euro-area monetary stimulus and start raising interest rates
- Emerging-market assets are headed for a monthly loss as declines in Argentina and Turkey sparked fears of global contagion and amid a renewed intensification of U.S.-China trade tensions
- U.K. house prices fell by the most in six years in August as the Bank of England lifted interest rates, according to Nationwide Building Society
- Trump rejected a European Union offer to scrap tariffs on cars, likening the bloc’s trade policies to those of China. He also said he would pull out of the World Trade Organization if it doesn’t treat the U.S. better, targeting a cornerstone of the international trading system
Asian equity markets traded mostly lower with sentiment weighed as trade war fears were reignited by reports US President Trump is said to back tariffs on an additional USD 200bln of Chinese goods as early as next week. This subsequently saw all US majors close in the red and both the S&P 500 and Nasdaq Comp. snap their streak of record highs, although losses in most the Asia-Pac region have been stemmed as participants also digested a trifecta of encouraging China PMI data. Nonetheless, ASX 200 (-0.5%) was lower as weakness in miners and profit taking in telecoms led the downside in Australia, while the Nikkei 225 (-0.1%) was initially pressured by a firmer currency but then showed resilience and gradually rebounded throughout the session. Shanghai Comp. (-0.5%) was also weighed by the fresh tariff fears although data helped plug losses including Chinese Official Manufacturing and Non-Manufacturing PMI which topped estimates and with Composite PMI higher than previous, while Hang Seng (-1.0%) was the worst performer as its largest weighted stock Tencent slumped over 5% at the open on government plans to control the amount of new online game releases. Finally, 10yr JGBs were marginally higher with demand supported by early safe-haven flows and with the BoJ also present in the market for nearly JPY 1tln of JGBs ranging from 1yr-10yr maturities.
- Chinese Manufacturing PMI (Jul) 51.3 vs. Exp. 51.0 (Prev. 51.2). (Newswires)
- Chinese Non-Manufacturing PMI (Jul) 54.2 vs. Exp. 53.7 (Prev. 54.0)
- Chinese Composite PMI (Aug) 53.8 (Prev. 53.6)
PBoC skipped open market operations for a net weekly drain of CNY 170bln vs. last week’s CNY 40bln net injection.
Top Asian News
- BOJ Tweaks Bond-Purchase Ranges, Buying Frequency for September
- China’s Factories Show Resilience Amid Trump Tariff Danger
- Transurban Group Buys Sydney Tollroad Stake for $6.7 Billion
- Lira Gets a Helping Hand as Turkey Raises Tax on Dollar Deposits
European equities are largely on the backfoot (Eurostoxx 50 -1.1%) after extending opening losses. In terms of sectors, IT, materials and consumer discretionary names underperform. Material names are lower on base metal price action while consumer discretionary names are weighed on by autos following comments from EU’s Juncker stating the EU will increase auto tariffs if the US does, hence denting sentiment in the sector. In terms of individual movers, Whitbread (+15.1%) opened higher by over 18% on reports the company proposed the sale of Costa to Coca Cola for GBP 3.9bln, while Whitbread’s CEO added the deal offers a significant premium to anything that could be achieved from spinning off Costa alone.
Top European News
- ECB’s Nowotny Signals Italian Woes Shouldn’t Delay Rate Hikes
- Euro-Area Inflation Unexpectedly Slows as Trade Risks Escalate
- BP, Shell Upgraded by Santander While It Remains Cautious
- No One Loves Irrelevant, Tiring, Dull European Stocks These Days
In FX, JPY benefited from month end-related demand and risk aversion amidst heightened US-EU/China import tariff tensions, with Usd/Jpy reversing further from near 112.00 highs to circa 110.70 and Jpy crosses strong bar Chf/Jpy for the aforementioned reasons. EUR/GBP – Both slightly firmer vs the Greenback and on a par with each other as the single currency meanders between 1.1690- 60 and Cable circles 1.3000 ahead of more Brexit talks and less positive EU vibes about the 2 sides still being a long way from resolving the NI backstop. The cross has been volatile, albeit rangy around the 21 DMA at 0.8972, with stops and/or RHS orders for month end from 0.8975-80 pushing the pair up towards 0.8990 at one stage. Back to Eur/Usd, option expiries abound from 1.1675 (1.1 bn), through 1.1700-05 (1.7 bn) to 1.1720-25 (1.85 bn). AUD/NZD – No real sign of any lasting comfort from better than expected Chinese PMIs overnight, as the Aussie and Kiwi remain on track to end a torrid week with extended losses vs their US counterpart due to increased US-China and global trade threats. Aud/Usd has tumbled through 0.7250 and Nzd/Usd is struggling to hold 0.6650 as the cross rotates around 1.0900, but hefty option expiry interest may exert influence in Aud/Usd into the NY cut (almost 1.2 bn at 0.7250). EM – Interestingly, Turkey got a bit more purchase from latest measures to halt Lira losses via prolonging tax exemptions on wealth repatriation by 6 months, increasing withholding tax on up to 1 year foreign currency deposits and setting taxes on Try deposits of up to 1 year at 0% than Argentina with its eye-catching (watering) 1500 bp rate hike on Thursday. Indeed, Usd/Try reversed sharply from just over 6.7900 to sub-6.3800 before settling around 6.5000 amidst more verbal intervention.
In commodities, WTI and Brent futures are softer on the day while the former is still holding onto the USD 70/bbl handle heading into the end of the month. Next month will be interesting as the OPEC and non-OPEC technical committee meet on 11th to potentially discuss a production strategy, while the JMMC are to meet in Algeria on the 23rd. Elsewhere, gold is benefitting from the softer dollar while copper lags on reports the US may impose tariffs on USD 200bln worth of Chinese goods as soon as next week. Separately, the Shanghai Futures Exchange are to launch copper options on September 21st.
US Event Calendar
- 9:45am: Chicago Purchasing Manager, est. 63, prior 65.5
- 10am: U. of Mich. Sentiment, est. 95.5, prior 95.3; Current Conditi9ons, prior 107.8; Expectations, prior 87.3
3. ASIAN AFFAIRS
i) FRIDAY MORNING/ THURSDAY NIGHT: Shanghai closed DOWN 12.49 POINTS OR 0.46% /Hang Sang CLOSED DOWN 275.50 POINTS OR 0.90%/ / The Nikkei closed DOWN 12.49 POINTS OR 0.46%/Australia’s all ordinaires CLOSED DOWN 0.51% /Chinese yuan (ONSHORE) closed DOWN at 6.8375 AS POBC RESUMES SLIGHTLY ITS HUGE DEVALUATION /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER/Oil UP to 69.92 dollars per barrel for WTI and 77.55 for Brent. Stocks in Europe OPENED RED //. ONSHORE YUAN CLOSED DOWN AT 6.8375 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.8624: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOT DOING TOO GOOD : /ONSHORE YUAN TRADING MUCH MUCH STRONGER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED
3 a NORTH KOREA/USA
North Korea/South Korea/USA/China
3 b JAPAN AFFAIRS
The Bank of Japan is tweaking its bond buying and that is sending fears of an imminent taper. Yield rises to .11%
(courtesy zerohedge)
BOJ Bond Buying Tweak Sparks Fears Of Imminent
Tapering
On Friday, the Bank of Japan tweaked its monthly government bond buying plan, sparking bond market fears that it may further reduce its massive bond buying, with the news pushing down the price of 10-year Japanese government bond futures as much as 10 ticks.
The BOJ announced it would reduce the frequency of its buying in one to three, three to five, and five to 10-year bonds to five times in September from six times in August.
At the same time, it increased the maximum amount of its buying in each operation in these maturities: it raised the upper buying limit for one- to three-year bonds and three- to five-year bonds to 400 billion and 450 billion yen from 300 and 350 billion yen, respectively according to Reuters.
While the change seems technical on the surface – and may be calendar-driven as there are fewer business days in September when the BOJ can conduct its buying operations – traders have grown highly sensitive to any changes in the BOJ’s massive QE program amid growing uncertainty over how much longer it can sustain its current ultra-easy policy.
The BOJ said it would conduct its first buying in the five to ten year zone on Thursday.
As a reference, in August the BOJ bought 400 billion yen, the mid-point of its target buying amount, of 5 to 10-year maturities in each of its six scheduled operations, for a total of 2.4 trillion yen. Doing the math, assuming the BOJ sets its buying in September at 450 billion yen, also the midpoint of the new range, it would amount to monthly buying of 2.25 trillion yen, another indication the BOJ is engaged in not so stealth tapering.
By the same logic, the BOJ’s buying in 3-5 year bonds will be reduced to 1.75 trillion yen from 1.8 trillion yen if the BOJ sets its buying at the middle of the range at 350 billion yen.
Commenting on the shift, Mizuho’s Toru Suehiro told Bloomberg that the decrease in the frequency of the Bank of Japan’s bond-buying operations in September suggests the central bank is willing to reduce purchases.
He also said that “the higher upper limit of bond-buying ranges suggests BOJ would be wiling to buy more if necessary, given it’s unclear how the market will respond to the reduced frequency” but added that “some market participants may be thinking the reduced frequency is due to holidays in September.”
In other words, unless the BOJ increases purchases at the first operation next month, the lower frequency will be taken as a plan to cut overall purchases.
Which will hardly be a surprise: the BOJ has been gradually slowing the pace of its bond buying as its bond holdings reached more than 40 percent of the entire market, leading to shortage of bonds available for investors and fall in the market liquidity.
Last month the BOJ said it would allow the 10-year JGB yield to move in a wider range than before but the market’s volatility has quickly dwindled since then.
end
3C CHINA
Even though it sure looks like China is trying to stabilize its yuan, the USA is accusing this nation of manipulating its currency as devaluing it offsets the negative effect of tariffs.
(courtesy zerohedge)
Trump Looking At “Formula” For Currency
Manipulation, Accuses China Of Devaluing Yuan
As part of his wide-ranging Bloomberg interview which covered everything from cutting capital gains tax, Fed Chair jerome Powell, AG Jeff Sessions, Trump’s desire to withdraw from the WTO, Trump’s rejections of the EU offer to cut auto tariffs, the trade deal with China, social networks and much more, Trump also said that his administration is currently examining how to determine whether countries are manipulating their currencies, while once again accusing China of trying to devalue its currency, and studying whether to finally label China a currency manipulator.
“It is a formula,” Trump told Bloomberg News in the Oval Office. “And we are looking very strongly at the formula.”
Trump most recently accused China of manipulating its currency lower during a Reuters interview last week, although that accusation conflicts with the findings of his own administration: in the semi-annual report on foreign-exchange policy, the Treasury Department stopped short of naming China, the EU or any other country as a currency manipulator.
However, Trump disagreed and said that China has devalued its currency in response to a recent slowdown in its economic growth.
“They’re trying to make up for lack of business by cutting their currency,” he said. “It’s no good. They can’t do that. That’s not, like, playing on a level playing field.”
While many strategists agree that the recent Yuan devaluation has indeed offset much of the negative impact from US tariffs, where there is disagreement is whether this is due to market forces, or as a result of PBOC policy. To be sure, in recent weeks the Chinese central bank has been aggressively pursuing policies to stabilize the Yuan in the short term – Beijing burned through $1 trillion in reserves in 2015/2016 in trying to defend the Yuan following the surprising August 2015 devaluation which caught everyone by surprise – which however to some are a little too obvious, meanwhile the Yuan has tumbled, recently suffering its fastest monthly drop on record.
Under guidelines established in 2016, the finding is based on whether countries meet three criteria for the designation: a minimum $20 billion trade surplus with the United States, a current account surplus in excess of 3% of GDP, and repeated interventions in currency markets.
The U.S. hasn’t officially accused another country of currency manipulation since 1994, but listening to Trump that may soon change.
end
The USA is not too thrilled this the development of a modernized Chinese navy as for the first time in over 200 years somebody else will rule the Pacific
(courtesy zerohedge)
Modernized Chinese Navy Could Surpass US, Prompting Fears It’s “Game Over” For US In Pacific
Last year the Chinese navy surpassed the United States’ own in size, and now Western military analysts are taking note that a new modernization program of its ships and weapons systems have given China significant and distinctive deterrence capabilities in disputed areas of the South China Sea and around Taiwan.
A new, detailed New York Times assessment of China’s astronomical recent growth and advancement as a foremost naval power laments this is something that’s “shifted the balance of power in the Pacific in ways the United States and its allies are only beginning to digest”.
The NYT report sounds the alarm that while US naval firepower remains superior if not spread a bit thinner than China’s expanding fleet, American ships can no longer maintain global dominance of Pacific seas with ease: “That means a growing section of the Pacific Ocean — where the United States has operated unchallenged since the naval battles of World War II — is once again contested territory, with Chinese warships and aircraft regularly bumping up against those of the U.S. and its allies.”
This is a trend also recently acknowledged by the new commander of the U.S. Indo-Pacific Command; “China is now capable of controlling the South China Sea in all scenarios short of war with the United States,” Adm. Philip S. Davidson stated as part of his Senate confirmation process in March.
Adm. Davidson explained in written statements submitted to Congress at the time that China is developing “asymmetrical capabilities,” in areas of sophisticated anti-ship missiles and submarine warfare. “There is no guarantee that the United States would win a future conflict with China,” he concluded.
This comes as more detailed reports have surfaced over the past year confirming that China is fast militarizing its rapidly expanding set of man-made islands in the South China sea while using such a “land presence” to lay claim to both international waters and airspace.
Beijing’s so called “nine-dash line” encircles as much as 90 percent of the contested waters in the South China Sea and runs up to 2,000 kilometers from the Chinese mainland and within a few hundred kilometers of Malaysia, Vietnam, and the Philippines — all within this vaguely defined zone Beijing claims as within its “historical maritime rights”.
The UN estimates that one-third of global shipping passes through the expansive area claimed by China — and crucially there’s thought to exist significant untapped oil and natural gas reserves.
The Chinese Navy has had increased hostile incidents bumping up against Philippines’ forces, and has recently on multiple occasions attempted to warn off US surveillance aircraft under threat of possible attack.
The NYT describes a couple the most significant naval incidents involving US and allied ships in the area as follows:
When two American warships — the USS Higgins, a destroyer, and the USS Antietam, a cruiser — sailed within a few miles of disputed islands in the Paracels in May, Chinese vessels rushed to challenge what Beijing later denounced as “a provocative act.”China did the same to three Australian ships passing through the South China Sea in April.
Chinese war games in the area have also been on the rise, which allows the People’s Liberation Army (PLA) to show off a variety of its new and advancing hardware.
The NYT continues:
“The task of building a powerful navy has never been as urgent as it is today,”President Xi Jinping declared in April as he presided over a naval procession off the southern Chinese island of Hainan that opened exercises involving 48 ships and submarines. The Ministry of National Defense said they were the largest since the People’s Republic of China was founded in 1949. Even as the United States wages a trade war against China, Chinese warships and aircraft have picked up the pace of operations in the waters off Japan, Taiwan, and the islands, shoals and reefs it has claimed in the South China Sea over the objections of Vietnam and the Philippines.
In spite of repeat promises going back to the Obama administration that China would not militarize the South China Sea through its series of man-made islands, Beijing officials have recently brazenly admitted to deploying missiles there.
Last June, upon Defense Secretary Jim Mattis’ to Beijing, President Xi bluntly warned him that China would never yield “even one inch” of territory it now claims as its own.
China’s navy has been rapidly growing since 2000, and compliments an already huge over 2-million strong PLA troop fighting force.
While the sheer size of China’s military was never a pressing concern so long as technology and military hardware lagged behind, that appears to have changed drastically over the past few years.
The NYT report outlines these advances to include:
- “Carrier killers”: an arsenal of high-speed ballistic missiles designed to strike moving ships. The latest versions, the DF-21D and, since 2016, the DF-26, are popularly known as “carrier killers,” since they can threaten the most powerful vessels in the U.S. fleet long before they get close to China.
- A second aircraft carrier, with plans for a third:The aircraft carrier that put to sea in April for its first trials is China’s second, but the first built domestically. It is the most prominent manifestation of a modernization project meant to propel the country into the upper tier of military powers. Only the United States, with 11 nuclear-powered carriers, operates more than one.
- Increased power projection with the above new anti-ship warfare capabilities: The Chinese military, traditionally focused on repelling a land invasion, increasingly aims to project power into the “blue waters” of the world to protect China’s expanding economic and diplomatic interests, from the Pacific to the Atlantic.
- More warships in operation than the U.S. Navy: Last year, China counted 317 warships and submarines in active service, compared with 283 in the U.S. Navy, which has been essentially unrivaled in the open seas since the collapse of the Soviet Union in 1991.
No doubt, the world will soon hear about more Pacific seas incidents between the United States and China, as the US both tests China’s resolve, and as the latter continues to stake out its territory.
END
China is quite angry with Trump’s tweets on the stealing of emails from Hillary Clinton and the blaming of China of the slow denuclearization of North Korea
(courtesy zerohedge)
4.EUROPEAN AFFAIRS
This will not go over well…after Trump initially proposed no auto tariffs for cars and industrial products a month ago, the EU surprisingly came back affirming that offer. However this time Trump said no because Europe does not buy USA cars
(courtesy zerohedge)
Trump Rejects EU Offer For No Auto Tariffs
Earlier today, EU trade chief Cecilia Malmström surprised pundits and sent shares of European automakers higher when she said that Brussels was willing to scrap tariffs on autos, among all other industrial products, if the US would reciprocate.
“We said that we are ready from the EU side to go to zero tariffs on all industrial goods, of course if the U.S. does the same, so it would be on a reciprocal basis,” Malmström told the European Parliament’s trade committee. Sending the ball in the Trump’s court, she said that “we are willing to bring down even our car tariffs down to zero … if the U.S. does the same,” adding that “it would be good for us economically, and for them.”
As a reminder, while the EU’s car tariff of 10% is higher than the general U.S. auto tariff of 2.5%, America imposes a 25% duty on light trucks and pick-ups.
So with Europe offering a trade olive branch to Trump, what was the US president’s response?
Simple: “It’s not good enough,” Trump told Bloomberg News during his extended interview, in response to the EU proposal. The reason: “their consumer habits are to buy their cars, not to buy our cars.”
Trump then said that the “the European Union is almost as bad as China, just smaller.”
Trump had previously ordered his Commerce Department to investigate whether car imports imperil national security, under the same provision he invoked to impose global tariffs on steel and aluminum earlier this year. The president has indicated he could impose tariffs of as much as 25 percent on the foreign-made autos. The findings of the auto study are due by February, though the president could decide to act before then. This week, Trump threatened Canada with auto tariffs if the country failed to join his trade deal with Mexico to replace Nafta.
What is odd is that it was Trump who originally proposed a trade policy without tariffs, barriers or subsidies on either side.
Donald J. Trump
✔@realDonaldTrump
The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready – but they won’t!
On the other hand, as Politico reported earlier, Trump’s rejection is probably not a big surprise, as during a first meeting in Washington last week, an EU proposal for including cars in the discussions was rejected by the U.S.
With Trump’s rejection it is now unclear if there is any de-escalation path available to Europe; furthermore with Trump set to enact $200BN in additional Chinese tariffs, the president may feel especially empowered to press Europe harder, a gambit which has a high probability of failing. Then again, until something in the market “cracks”, there is no reason to expect Trump to change his negotiating tactic which so far – looking at the S&P at all time highs – has given him the impression that he is winning.
end
ITALY
A terrific commentary from GEFIRA as they outline how eventually Italy will leave the EU
a must read…
(COURTESY GEFIRA)
Italian Minister Savona Wants Italy To Withdraw From
The ‘Funk 1940′ Plan: The Euro
Italy’s economic growth is decelerating, which is even more inevitable in view of the country’s population decline. It looks as if the Italian business cycle had reached its peak in 2017, with a meagre 1.5% growth rate, and is now receding.
Within ten years, Italy will have business cycles with only negative highs and lows. Unemployment is at 10% and it cannot be tackled because Rome is prohibited by the European Union from following the Japanese monetary and fiscal policies to counter the financial fallout as a result of a declining population. Italian academia still believes that replacing the highly-efficient European workforce with Africans will stimulate future economic growth. Italy appears to have been deliberately flooded by Africans, while white workers from Italy are moving to Germany and the Netherlands.
Paolo Savona, the new Italian Minister of Economic Affairs, believes that Germany is executing the 1940 Walther Funk plan. Walther Funk was Director of the Bank of International Settlements and, in 1939, Hitler appointed him as the President of the Reichsbank. Savona laid down his views in a 2012 letter to his German and Italian friends.
“The Funk Plan, provided for national currencies to converge into the German mark’s area and this is what you would like and have partially achieved,” Paolo Savona wrote. “It also envisaged,” he continued, “that industrial development only pertained to yourselves and that you would only be accompanied by France, your historical ally, a solution now caused by the common European market and the single currency. The Plan wanted other countries to devote themselves to agriculture and tourist services, something that will happen out of necessity or because of a natural ‘calling’ and they will lend skilled labour to your leadership project.”
As it is, Paolo Savona, a representative of the Italian establishment, expressed the feeling of a big part of the Italian elite.
The establishment is divided over how to solve Italy’s demographic and economic problems. Matteo Renzi, previous Italian Prime Minister, believed that he could save the country by letting in hundreds of thousands of undocumented Africans. To show that they are committed to repopulate Italy with Africans, the Italian establishment appointed a Congo-born African woman as their Minister for Integration in 2013, a year before the great exodus from Africa kicked off. Italy was on the way to becoming Europe’s first black country.
In a democracy it is a ruling class (or to be more precise its factions) that makes political choices and these are later presented to the people to vote for. An alternative policy to Matteo Renzi migration policy was introduced by Lega Nord and the Five-Star Movement. The Italian Minister of the Interior, Mateo Salvini, has challenged the European elites by stopping the endless flood of people from Africa and became incredibly popular. It was easier to halt the influx of people than to pull Italy out of the euro. A break-up of the euro would cause a significant crisis, and nobody knows how it would end, or whether it is manageable. However, the break up of the Sovjet Union and Yugoslavia were also examples of a “currency-union” break up.
To understand how the Italians will solve their ongoing crisis, we have to look at the political and business establishment. The Greek rebellion, led by the maverick Finance Minister Yanous Varoufakis and supported by the majority of the Greek people, ended in Mr Varoufakis being removed from office and the Greek economy destroyed because the minister failed to understand how a democracy functions. He believed it has something to do with the will of the people. He lacked the support of the ruling establishment, so failure was inevitable. Support from some parts, not necessary all, of the economic, academic, financial, juridical, media and security establishment are indispensable. We rightly noticed that both Donald Trump presidency and Brexit were supported by big chunks of US and British ruling elite respectively, whatever the pundits may want you to believe.
The Machiavellian Italian politicians in Rome understand that they have to build a strong opposition in Italy against Europe and Germany. Every crisis has to be blamed on powers outside Rome. The engineered migration crisis, with the support of the Brussels establishment, has backfired, giving Mateo Salvini the opportunity to pitch the Italian people against the European Union, and making him even more popular. According to the latest polls, Salvini’s party is gaining in popularity rapidly, with 30% of the votes, while M5S is in decline from 40% to 30%).
A euro exit will not be announced in advance but will be executed overnight the moment nobody expects. If the Italians start to pay their domestic obligations in liras, it will take a while before these are accepted and their value will collapse immediately, so much so that people will then start to withdraw their money from banks. For that reason, the government will take precautions, such as capital control by means of which people will not be allowed to take their money out of the country for a limited period. Unlike Greeks, the Italians will prepare an Italian exit from the euro carefully and secretly.
However, there are not many Italian politicians who dare to take the risk of an outright withdrawal from the European Union and face the consequences except for the Minister of European Affairs Paolo Savono.Mr Savona is now 82 and he has little to lose. He could go down in history as the man who took Italy out of the euro. However, it seems that the financial establishment has ousted Mr Paola Savona after he criticised them for mishandling the ongoing banking crisis and it is not known how much support he still has.
For now, Rome’s strategy is to force the Germans to accept relaxed budget rules and allow Italy to introduce a parallel currency. The alternative, Italian withdrawing from the euro will not only result in chaos in Italy but also in Berlin as the consequences for the German financial system are unknown. The Italian budget rules violations will be ignored by the German political establishment who are not capable of preventing any crisis in advance. Angela Merkel will only move when things are already out of control.
If there the Italians leave the euro, there will be a discussion about the outstanding debt, denominated in euro’s. There will also be a dispute about the Target2 balance. Target 2 is the real-time gross settlement system for the Eurozone. According to these balance positions, Italy and Spain have to pay Germany more than 800 billion euros. There is a lot of discussion how to interpret these liabilities and who has to pay for the difference between the countries with a liability and Germany with an asset of nearly 1 trillion euro.
It is expected that the 2019 Italian budget will reveal whether the government is committed to lowering its debt to GDP levels as is required by the European Stability and Growth Pact or whether it will fulfil its promise to the Italian voters. After Mateo Salvini made good on his promise to stop Africans from flooding Italy, now it is Luigi Di Maio’s (the M5S coalition partner’s) turn to make good on his promise of a basic income. This basic income is a social security of about 780 euro for all Italians((Italy’s 5-Star Movement defends guaranteed income pledge Source Deutsche Welle)). By implementing this social security program, he will increase the Italian government spending and provoke the first step to a confrontation with his German counterparts. In August, Luigi Di Maio said that “EU rules can’t be excuse to block programs” and “respecting fiscal rules is not Italy’s priority” he also announced to an Italian paper that the country’s public deficit could exceed the European Union’s ceiling of 3 per cent of the gross domestic product next year to fund spending measures promised.
Breaching the budget rules is not a ‘big deal’ for now. The Italians already violated European banking rules when they rescued a couple of Italian banks in 2016 and 2017 with tax money without any consequence. It will slowly sink in that Italy will never recover.
By next summer, the German establishment will begin to understand that an ever-shrinking population is not the only problem for the sustainability of the public debt, but that it will also erode the Italian bank balance sheets further. The financial market will also ignore the problem for now because Italy has used the ECB bond buyback program to replace its short-term debt for long-term debt. The average maturity of outstanding debt has risen from less than four years in the 1990-1998 period, just before the introduction of the euro, to 6.9 years in 2017. Moreover, nearly 70 per cent of the debt is held by residents, which is amongst the highest in the European Union. For now, Italy does not need the financial market to refinance its old obligation. And for its increasing new debt, it already has an alternative plan: the mini-BOT, a coupon that can be used to pay taxes, state services, and for petrol at stations run by state-controlled oil company ENI. Those who understand money will realise the mini-BOT is a full-blown parallel currency.
The Italian establishment understands that it is the ruling class not the people that manages the country. Whether they leave the euro or not is not up to the populous. When they decide to pull the plug on the euro, they will take care that the people will applaud. After all Machiavelli was an Italian.
end
This is very dangerous as the 10 yr Italian bond yield exceeds 3.26%. Already Italy has a huge 20% of its debt non performing and this will surely add to it. Italy must leave the EU as fast as possible. (see the GEFIRA article above)
(courtesy zerohedge)
Italian Bond Yields Are Blowing Up Again
For the second day in a row, the “weakest link” among G-10 bond markets, Italy, is getting hit hard, with the 10Y Italy government bond sliding, sending its yield to session highs of 3.24%, which also is above the highest yield hit during the May mini crisis, is now the highest going back to 2014.
“Lo spread” is similarly getting blown up, with the 10Y Italy-German spread now the widest since 2013…
… meanwhile the short-end is also moving higher, flattening the curve sharply.
The move has erased earlier gains, after reports in the Italian media that Finance Minister Tria is seeking a deficit/GDP ratio of 1.5% in the new budget law, well below the 3% feared by investors.
However, this favorable take was quickly erased following the latest blow out in emerging market bonds, where Argentina bonds took the lead and are being dumped en masse, and contagion is once again starting to emerge. And while US equities remains in a range, the move higher in Italy is being noticed by US Treasurys, whose yields are now down to session lows, just above 2.83%.
end
5.RUSSIAN AND MIDDLE EASTERN AFFAIRS
RUSSIA/SYRIA
the last holdout enclave in Syria which houses the terrorist organization of Al Qaeda, Idlib, will now see its final battle. Interesting enough the Americans are supporting this group
(courtesy zerohedge)
Caught On Video: Syrian Convoy Heads For Idlib “Final Battle”
As speculation mounts that the Syrian army is preparing for a Russia-backed “anti-terror operation” in Idlib, dubbed by one army officer as “the final battle,” video has emerged of a convoy of Syrian Army troops heading towards the frontline.
As they passed through Maar Shahour village in Hama Governorate, soldiers rode on top of lorries carrying tanks, artillery and armored personnel carriers.
One army officer said his troops were ready for the “final battle” against militants in Idlib province.
This clip comes as Russian foreign minister Sergei Lavrov warned/asked the West not to intervene:
“I hope our Western partners will not give in to (rebel) provocations and will not obstruct an anti-terror operation” in Idlib, foreign minister Sergei Lavrov said at a press conference with his Saudi counterpart Adel al-Jubeir in Moscow.
Lavrov also said that there is “full political understanding” between Russia and Turkey, who support opposing sides of the Syrian civil war but are currently in intense negotiations to ensure Idlib does not become a breaking point in their alliance.
“It is necessary to disassociate the so-called moderate opposition from terrorists and at the same time prepare an operation against them while minimising risks for the civilian population,” Lavrov said.
“This abscess needs to be liquidated.”
Lavrov went on to accuse the West of “actively heating up” the idea of a “so-called planned chemical attack by the (Syrian) government.”
As we detailed previously, over the last week, Moscow has accused Syrian rebels of planning to stage a chemical attack in the northwestern province that would “provoke” Western strikes on its ally Damascus.
This month Syrian and Russian air attacks and shelling began targeting al-Qaeda held Idlib in what is likely a prelude to a full-scale ground offensive.
The “rebel” coalition in control of this major “final holdout” is but the latest incarnation of al-Qaeda, calling itself Hay’at Tahrir al-Sham (HTS) and has held the province, the capital city of which is Idlib city, since a successful Western and Gulf ally sponsored attack on the area in 2015.
The Russian MoD spokesman specifically identified HTS as the group planning to stage a chemical attack to blame in on Assad’s forces.
Time is running out for any ‘false flag’ as the “final battle” looms.
end
6. GLOBAL ISSUES
CANADA
The Canadian dollar slides as some doubt we will have a NAFTA deal. The USA has become quite obstinate as they refuse to give in on many points despite the Canadians giving in on diary and intellectual property rights.
two commentaries
(courtesy zerohedge)
Loonie Slides As Canadian Officials Reportedly Doubt NAFTA Deal Will Get Done
Despite outwardly optimistic appearances from Canada’s Freeland, talks between Canadian and U.S. trade negotiators reportedly turned sour last night and Trudeau government officials are now expressing concern that a final NAFTA deal will not be concluded on Friday.
“That was a long, intensive conversation with Ambassador Lighthizer and his team. The atmosphere remains constructive. …We are making progress,” Ms. Freeland said after a session that ended at 8:30 p.m.
She returned at 10:15 p.m. for another meeting that lasted just five minutes. Ms. Freeland told reporters that she had “a couple things to say” to Mr. Lighthizer and she would meet him again Friday.
According to The Globe reports, USTR Lighthizer has refused to budge on eliminating Chapter 19 – which allows Ottawa to challenge punitive American tariffs on imports before binational panels – andrefusing to keep current cultural protection provisions in a redrafted North America free-trade agreement.
Ms. Freeland, who said on Thursday a deal is possible, had offered the Americans concessions on increased U.S. dairy exports to Canada U.S. and on intellectual property, but Mr. Lighthizer was unwilling to offer any concessions of his own on the two key Canadian demands.
However, it’s not all ‘give’ from Canada, as they are reportedly holding the line on Buy American demands,telling the U.S. that it must have the same access to bid on U.S. govt contracts or will impose Buy Canadian provisions on U.S. firm.
As The Globe reports so ominously:
There is now deep concern within the Canadian negotiating team that the talks which continue this morning will end in failure.
However, on the back of The Globe’s ‘sources’, the loonie is slipping lower – erasing all the early week hope-filled gains…
1.3050 seems like a line in the sand for the Loonie for now, any further negative headlines and a break of that level will push the canadian dollar notably lower.
Finally, we note that Citi points out that sources have been saying all sorts of things, with some suggesting there’s been enough progress, and we note that officials also cautioned that U.S. President Trump hasn’t yet signed off on any of the measures agreed upon so far and could reject any trade-dispute mechanism if the U.S. suddenly changes its hardline stance.
No Deal? Loonie Slides After “Secret Insulting Remarks” By Trump, Downbeat Freeland NAFTA Comments
With just hours to go until the Trump-imposed deadline to reach a NAFTA deal between the US and Canada, moments ago Chrystia Freeland poured cold water on hopes of an imminent deal, saying “we are not there yet” on a NAFTA deal.
Below are her comments moments ago to the press after speaking to the USTR , courtesy of Bloomberg
- Freeland says she’ll return to talks at USTR later Friday
- Canadians are good at finding “win-win compromises,” says Freeland, adding “at the end of the day though we are only going to sign a deal that’s good for Canada”
- “In this negotiation we always stand up for the national interest and that’s what we’re going to continue to do”
- Canada is looking for a good deal, “not just any deal,” says Freeland
- Freeland says she agreed with U.S. Trade Representative Robert Lighthizer at start of the week to refrain from negotiating “specific issues in public”
- Freeland says she jokes with Lighthizer “that we could switch chairs” because they know each others’ positions on the Nafta issues so well
Freeland also said that she would be back later in the day at the USTR for more NAFTA talks, but said she wouldn’t discuss specific NAFTA issues in Public:
Trudeau also chimed in some skeptically at the same time:
- *TRUDEAU SAYS CANADA WILL ONLY SIGN `GOOD’ NAFTA DEAL
- *TRUDEAU SAYS A WIN-WIN-WIN NAFTA DEAL REMAINS POSSIBLE
- *TRUDEAU SAYS NO NAFTA AGREEMENT IS BETTER THAN A BAD ONE
Following the downbeat comments, the loonie slumped to session lows of 1.3080
But the punchline is what the Toronto Star reported earlier, namely that “High-stakes trade negotiations between Canada and the U.S. were dramatically upended on Friday morning by inflammatory secret remarks from President Donald Trump, after the remarks were obtained by the Toronto Star.”
In remarks Trump wanted to be “off the record,” Trump told Bloomberg News reporters on Thursday, according to a source, that he is not making any compromises at all in the talks with Canada — but that he cannot say this publicly because “it’s going to be so insulting they’re not going to be able to make a deal.”
“Here’s the problem. If I say no — the answer’s no. If I say no, then you’re going to put that, and it’s going to be so insulting they’re not going to be able to make a deal…I can’t kill these people,” he said of the Canadian government.
In another remark he did not want published, Trump said, according to the source, that the possible deal with Canada would be “totally on our terms.” He suggested he was scaring the Canadians into submission by repeatedly threatening to impose tariffs.
“Off the record, Canada’s working their ass off. And every time we have a problem with a point, I just put up a picture of a Chevrolet Impala,” Trump said, according to the source. The Impala is produced at the General Motors plant in Oshawa, Ontario.
The Star is Canada’s most widely read publication, so now that the US president has set up the strawman, any possibility of a deal going thru is suddenly looking very slim.
end
Probably no deal: Canada will alone face the microphone at 4:30 pm
(courtesy zerohedge)
Nafta Talks Conclude, Canada’s Freeland To Hold Press Conference At 4:30PM
After several days of negotiations, and just hours before the deadline, Reuters reports the the Nafta trade talks between the US and Canada have concluded.
- U.S.-CANADIAN TRADE TALKS HAVE CONCLUDED -CANADIAN OFFICIAL: RTRS
- CANADA’S FREELAND HAS LEFT USTR AFTER TALKS WITH LIGHTHIZER
Reuters adds that Canadian Foreign Minister Chrystia Freeland will hold a press conference at 4:30pm (after the close).
It was unclear if a deal has been reached, although some speculate that if there was a deal, the press conference would include the US, and not just Canada, which “usually means bad news.”
ForexLive@ForexLiveFreeland hosting a press conference alone (without the US) is probably a tell. That usually means bad news.
Others have suggested that a deal may not have been reached and the talks will continue into the weekend.
The CAD is generally unchanged on the news.
More at 4:30pm when Freeland speaks.
US, Canada Trade Talks Conclude With No Agreement, To Resume Next Week
Summary:
- In an anticlimatic conclusion to the week’s top trade event, talks between the U.S. and Canada ended Friday without a deal on a new North American Free Trade Agreement, but the two parties were said to have made “some progress” and discussions are expected to continue next week.
- The Trump administration had given Canada until Friday to join a preliminary deal it reached earlier in the week with Mexico or risk being left out.
- Canadian Foreign Affairs Minister Chrystia Freeland is expected to brief reporters at 4:30 p.m. local time on Friday at the Canadian Embassy in Washington. She has been in Washington since Tuesday in an accelerated push to reach an agreement with the U.S. over revamping Nafta, after the US reached a bilateral deal with Mexico on Monday.
- According to the Wall Street Journal, the Trump administration will notify Congress on Friday that it’ll proceed with changes to Nafta with Mexico, and that it remains open to continuing negotiations with Canada.
* * *
Update 2: As we noted earlier, Trump’s “hard” Friday deadline was really rather soft, and as Bloomberg reports, the trade talks will resume next Wednesday.
- *U.S.-CANADA NAFTA TALKS SAID TO RESUME NEXT WEDNESDAY
But there was good news according to Reuters:
- NAFTA TALKS SAID TO HAVE MADE SOME PROGRESS ON CORE ISSUES
And USTR Lighhizer confirms that talks “were constructive” and will continue, and the intention is to sign a trade agreement in 90 days.
- USTR LIGHTHIZER SAYS TRADE TALKS WILL CONTINUE WITH CANADA
- LIGHTHIZER SAYS CANADA TRADE TALKS CONSTRUCTIVE, MADE PROGRESS
- U.S. TRADE REPRESENTATIVE SAYS INTENTION WOULD BE TO SIGN TRADE AGREEMENT IN 90 DAYS: RTRS
Meanwhile as the WSJ notes, the failure of the two countries to bridge their differences this week means that President Trump is expected to send a formal notice to Congress later Friday stating that he is still intends to sign a revised version of the North American Free Trade Agreement by late November. That statement is likely to say he is willing to proceed only with Mexico, but that he is also open to continuing negotiations with Canada.
* * *
Update: No deal.
If it was Trump’s intention to scuttle the US-Canada trade talks with the Bloomberg “leak” he succeeded: the WSJ reports that Nafta talks between the US and Canada ended with no agreement
- U.S.-Canada Talks Break Up With No Friday Agreement — Sources
- Trump Is Expected to Notify Congress of Plans to Proceed with Mexico-Only Deal to Replace Nafta — Sources
- Trump Announcement Is Expected to Suggest Canada Can Still Join Revised Nafta — Sources
* * *
Earlier
After several days of negotiations, and just hours before the deadline, Reuters reports the the Nafta trade talks between the US and Canada have concluded.
- U.S.-CANADIAN TRADE TALKS HAVE CONCLUDED -CANADIAN OFFICIAL: RTRS
- CANADA’S FREELAND HAS LEFT USTR AFTER TALKS WITH LIGHTHIZER
Reuters adds that Canadian Foreign Minister Chrystia Freeland will hold a press conference at 4:30pm (after the close).
It was unclear if a deal has been reached, although some speculate that if there was a deal, the press conference would include the US, and not just Canada, which “usually means bad news.”
ForexLive@ForexLiveFreeland hosting a press conference alone (without the US) is probably a tell. That usually means bad news.
Others have suggested that a deal may not have been reached and the talks will continue into the weekend.
The CAD is generally unchanged on the news.
More at 4:30pm when Freeland speaks.
end
Trump Erupts At Bloomberg For “Blatantly Violating” Off The Record Agreement Over Canada Comments
An angry president Trump erupted at Bloomberg News on Twitter for “blatantly violating” an off the record agreement involving his comments about Canada during an extensive Oval Office interview conducted on Thursday afternoon, in the process admitting he had indeed made the “insulting” remarks, published earlier by the Toronto Star, and which have allegedly jeopardized the Nafta negotiations.
“Wow, I made OFF THE RECORD COMMENTS to Bloomberg concerning Canada, and this powerful understanding was BLATANTLY VIOLATED. Oh well, just more dishonest reporting. I am used to it,” Trump tweeted.
Trump ended by noting that “at least Canada knows where I stand!”
Donald J. Trump
✔@realDonaldTrump
Wow, I made OFF THE RECORD COMMENTS to Bloomberg concerning Canada, and this powerful understanding was BLATANTLY VIOLATED. Oh well, just more dishonest reporting. I am used to it. At least Canada knows where I stand!
It does indeed. As a reminder, earlier we noted that according to the Toronto Star, which first published Trump’s “off the record” commentary, that the negotiations between Canada and the U.S. “were dramatically upended on Friday morning by inflammatory secret remarks from President Donald Trump, after the remarks were obtained by the Toronto Star.”
In remarks Trump wanted to be “off the record,” Trump told Bloomberg News reporters on Thursday, according to a source, that he is not making any compromises at all in the talks with Canada — but that he cannot say this publicly because “it’s going to be so insulting they’re not going to be able to make a deal.”
“Here’s the problem. If I say no — the answer’s no. If I say no, then you’re going to put that, and it’s going to be so insulting they’re not going to be able to make a deal…I can’t kill these people,” he said of the Canadian government.
In another remark he did not want published, Trump said, according to the source, that the possible deal with Canada would be “totally on our terms.” He suggested he was scaring the Canadians into submission by repeatedly threatening to impose tariffs.
“Off the record, Canada’s working their ass off. And every time we have a problem with a point, I just put up a picture of a Chevrolet Impala,” Trump said, according to the source. The Impala is produced at the General Motors plant in Oshawa, Ontario.
It was not clear why Bloomberg would disclose the off the record comment, or if indeed it was indeed Bloomberg; some have suggested that it was the White House itself that leaked the inflammatory commentary with hopes of scuttling the last minute Nafta negotiations. That said, it is not clear if Trump’s comment will indeed be a dealbreaker, although with just a few hours left until today’s deadline to get a deal done, every passing hour makes an agreement increasingly unlikely.
7 OIL ISSUES
8 EMERGING MARKET ISSUES.
INDONESIA/INDIA
This morning: The Indonesia Rupiah falls to 14,750 a level not seen since 1998, the scene of the 1998 Asian crisis as contagion has now spread to this country from Argentina and Turkey. It seems that the entire world is now witnessing full blown contagion as basically they all borrowed huge amounts of cheap dollars and now they cannot pay back their loans.
(courtesy zerohedge)
Rupiah Plunges To Asian Financial Crisis Low Amid
Emerging Market Liquidation
Despite four rate hikes by the Bank of Indonesia since May, the Indonesia’s rupiah slid to a two-decade low, falling to 14,750 per dollar, a level last hit during the Asian Financial Crisis of 1998, and just shy of an all time low, spurring yet another intervention from the central bank as the contagion from the collapse in Argentina and Turkey has turned the market’s attention on emerging markets with current account deficits.
Indonesia’s benchmark bond yields rose 10 basis points to the highest level since 2016, while the Jakarta Composite Index slipped as much as 1.3%.
The plunge took place despite a notice from the central bank that it was intervening in the foreign exchange and bond markets, according to Nanang Hendarsah, executive director for monetary management.
As a reminder, after Argentina and Turkey, Indonesia is next to be hit on this chart from JPM we first showed at the start of June, which plotted countries with a current account deficit and rising external debt.
The rupiah is down 7.8% this year, and first came under pressure from a resurgent greenback and climbing U.S. Treasury yields. The escalating trade war between the U.S. and China, followed by the Turkey turmoil then added to its woes. It’s the second-worst performing major Asian currency this year, after the Indian rupee.
Meanwhile, over in India, the rupee also fell to a new record low, trading 71.035 against the dollar, set for the biggest monthly decline in three years, although so far India’s capital markets excluding FX have barely been affected, with the Nifty trading just shy of all time highs.
As Bloomberg notes, as investors liquidated Turkish and Argentinian assets, countries with large current-account deficits such as Indonesia and India have also seen their currencies and bonds come under selling pressure. The rout in the Argentinian peso and Turkish lira end the recent stability bought by Bank Indonesia’s four rate hikes since mid-May, which has led to a return of foreign funds into its debt market.
The collapse in the currency prompted various comments from FX strategists:
- “The rupiah’s underperformance relative to the rest of emerging markets stems from Indonesia’s weak external payments position, especially the current account deficit,” said ING economist Prakash Sakpal. Still, “things now are far different than 20 years ago when the crisis originated in Asia and rupiah’s external creditworthiness was much weaker.”
- “The spillover from the resurfacing emerging-market turmoil in the Argentina peso and Turkish lira is weighing on EM Asia currencies,” said Ken Cheung, senior FX strategist at Mizuho Bank Ltd. in Singapore. “There was no solid relief sign for the China-U.S. trade tensions, and the upcoming U.S. tariff plan on $200 billion of Chinese goods, after the public-comment period due next week, could jeopardize sentiment.”
- The recent sell-off will put more pressure on the central bank to raise rates again, according to Bank of America: “Just goes to show the external environment remains tough for Indonesia as we had anticipated,” said Mohamed Faiz Nagutha, an economist at Bank of America Merrill Lynch in Singapore. “We continue to expect more hikes for sure, with the exact magnitude to be determined by external rather than domestic fundamentals.”
Meanwhile, the pressure on the rupiah continued to rise as Indonesia’s current-account deficit rose. The shortfall increased to $8 billion in the second quarter, or 3% of GDP, from $5.7 billion in the previous three months, according to the latest central bank data.
“For Indonesia, it’s the current-account deficit that we need to manage,” said Suahasil Nazara, head of fiscal policy office at the Finance Ministry. “The ultimate fix is through our structural reforms, allowing better and more conducive business environment especially for manufacturing and upstream industries.”
Of course, it is those structural reforms that are so unpopular, which is why every EM chooses to use monetary policy first – or in the case of Turkey, nothing at all.
Still, it was not all bad news: despite the rupiah’s selloff, investors can take heart in “some underlying improvement in the Indonesian economy” since the 1998 Asian crisis, said Michael Every, head of financial markets research for Rabobank Group in Hong Kong. “I don’t think there’s as much downside risk to the rupiah until we see China devalues its currency significantly.” That in turn depends entirely on Trump.
END
BRAZIL
This ought to throw the entire Brazilian economy into chaos. Lulu who is in prison is also leading in the polls by a huge 20 points ahead of the upcoming election. There is no speculation that he will be barred from running and also barred from TV appearances. The citizens will revolt!
(courtesy zerohedge)
Brazilian Real Soars On Speculation Lula Will Be Barred From Running For President
After tumbling just shy of all time lows on Thursday, dropping as low as 4.21 against the dollar, the Brazilian real and local assets have surged on hopes jailed leftist presidential candidate Lula, who is the undisputed leader in the polls ahead of Brazil’s presidential election, will be barred by Brazil’s highest electoral court from attempting a comeback to the nation’s top job despite a lengthy prison sentence.
The court, known as the TSE, is set to rule on the legality of Lula’s presidential candidacy at a special session in Brasilia. They may also rule on whether or not he can partake in free television and radio campaigns. According to Bloomberg, deliberations started at 2.30 pm Brasilia time, and an announcement is imminent.
Lula, who had a 20 point lead ahead of his closest challenger far-right candidate Jair Bolsonaro, and is the most influential political figure in Brazil’s recent history, has been in jail since April after an appeals court confirmed a sentence for corruption and money laundering. The TSE will consider the country’s “clean slate” law, which determines that people with criminal convictions upheld on appeal cannot run for elected office.
So far, the court has received 17 legal challenges to Lula’s bid, as well as at least two requests for an injunction demanding that he be banned from campaigning. In the event of a negative ruling on Friday, Lula’s lawyers can appeal both at the TSE and at the Supreme Court.
The real jumped as traders speculated Friday’s ruling would keep Lula out of the TV and radio ads, lowering his ability to give a boost to whomever he endorses to replace him in the ticket, although as a Bloomberg commentator suggested, “even if Lula gets blocked from running, former Sao Paulo mayor Fernando Haddad of Lula’s Workers’ Party will likely run in his stead and polls show he could make it into a second round run-off.”
The BRL strengthened 2.1% as of 3:15 p.m. EDT erasing losses for the week. The Ibovespa stock index rose 0.4 percent, trimming a monthly slide.
While the former head of state remains hugely popular among the millions of Brazilians who saw their quality of life improve during his administration, Lula is also loathed by many for a sweeping corruption scandal and a devastating recession they say was triggered by the populist economic measures pursued by his Workers’ Party.
Beyond election concerns, the fiscal picture remains very weak, and won’t reach a surplus before 2022, Alberto Ramos at Goldman Sachs wrote. Public debt dynamics remain a source of concern with gross general government debt at 77% of GDP.
Meanwhile, as FX traders were delighted to frontrun today’s “favorable” decision, Bloomberg notes that ETF traders remain skeptical as the iShares’s EWZ fund was on track for the biggest monthly outflow ever.
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings FRIDAY morning 7:00 am
Euro/USA 1.1646 DOWN .0019/ REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES RED
USA/JAPAN YEN 110.82 DOWN 0.191 (Abe’s new negative interest rate (NIRP), a total DISASTER/NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL
GBP/USA 1.2971 DOWN 0.0039 (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED
USA/CAN 1.3006 UP .0020(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)
Early THIS FRIDAY morning in Europe, the Euro FELL by 19 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1646; / Last night Shanghai composite CLOSED DOWN 12.49 POINTS OR 0.46% /Hang Sang CLOSED DOWN 275.50 POINTS OR 0.98% /AUSTRALIA CLOSED DOWN .51% / EUROPEAN BOURSES ALL RED
The NIKKEI: this FRIDAY morning CLOSED DOWN 4.35 POINTS OR 0.02%
Trading from Europe and Asia
1/EUROPE OPENED ALL RED
2/ CHINESE BOURSES / :Hang Sang DOWN 275.50 POINTS OR 0.98% /SHANGHAI CLOSED DOWN 12.49 POINTS OR 0.46%
Australia BOURSE CLOSED DOWN .51%
Nikkei (Japan) CLOSED DOWN 4.35 POINTS OR 0.02%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1203.35
silver:$14.60
Early THURSDAY morning USA 10 year bond yield: 2.84% !!! DOWN 2 IN POINTS from THURSDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/
The 30 yr bond yield 2.99 DOWN 3 IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)/
USA dollar index early FRIDAY morning: 94.80 UP 8 CENT(S) from THURSDAY’s close.
This ends early morning numbers FRIDAY MORNING
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And now your closing FRIDAY NUMBERS \1: 00 PM
Portuguese 10 year bond yield: 1.93% UP 1 in basis point(s) yield from THURSDAY/
JAPANESE BOND YIELD: +.11% UP 0 BASIS POINTS from THURSDAY/JAPAN losing control of its yield curve/EXTREMELY VOLATILE YESTERDAY
SPANISH 10 YR BOND YIELD: 1.47% UP 0 IN basis point yield from THURSDAY/
ITALIAN 10 YR BOND YIELD: 3.24 UP 3 POINTS in basis point yield from THURSDAY/DANGEROUS!!
the Italian 10 yr bond yield is trading 177 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: FALLS UP TO +.33% IN BASIS POINTS ON THE DAY
END
IMPORTANT CURRENCY CLOSES FOR FRIDAY
Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1602 DOWN .0064(Euro DOWN 64 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 110.97 DOWN 0.037 Yen UP 4 basis points/
Great Britain/USA 1.2971 DOWN .0041( POUND DOWN 41 BASIS POINTS)
USA/Canada 1.3075 Canadian dollar DOWN 88 Basis points AS OIL ROSE TO $69.99
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This afternoon, the Euro was FELL BY 64 BASIS POINTS to trade at 1.1602
The Yen ROSE to 110.97 for a GAIN of 4 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 LOST 41 basis points, trading at 1.2971/
The Canadian dollar LOST 88 basis points to 1.3075/ WITH WTI OIL RISING TO 69.99
The USA/Yuan,CNY closed UP AT 6.8315 ON SHORE (YUAN UP)
THE USA/YUAN OFFSHORE: 6.8493 ( YUAN UP)
TURKISH LIRA: 6.6087
the 10 yr Japanese bond yield closed at +.11% UP 0 BASIS POINTS FROM YESTERDAY
Your closing 10 yr USA bond yield DOWN 3 IN basis points from THURSDAY at 2.84 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.99 DOWN 2 in basis points on the day /
THE RISE IN BOTH THE 10 YR AND THE 30 YR ARE VERY PROBLEMATIC FOR VALUATIONS
Your closing USA dollar index, 95.12 UP 40 CENT(S) ON THE DAY/1.00 PM/
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 1:00 PM
London: CLOSED DOWN 83.61 POINTS OR 1.11%
German Dax : CLOSED DOWN 130.18 POINTS OR 1.04%
Paris Cac CLOSED DOWN 71,21 POINTS OR 1.30%
Spain IBEX CLOSED DOWN 68.50 POINTS OR 0.72%
Italian MIB: CLOSED DOWN: 225.63 POINTS OR 1.10%/
The Dow closed DOWN 122.10 POINTS OR 0.09%
NASDAQ closed UP 21.18 points or 0.26% 4.00 PM EST
WTI Oil price; 69.99 1:00 pm;
Brent Oil: 77.84 1:00 EST
USA /RUSSIAN / ROUBLE CROSS: 67.59/ THE CROSS LOW BY 69/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 28 BASIS PTS)
USA DOLLAR VS TURKISH LIRA: 6.7346 PER ONE USA DOLLAR.
TODAY THE GERMAN YIELD FALLS +.33 FOR THE 10 YR BOND 1.00 PM EST EST
END
This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM
Closing Price for Oil, 4:00 pm/and 10 year USA interest rate:
WTI CRUDE OIL PRICE 4:30 PM:$69.90
BRENT: $77.67
USA 10 YR BOND YIELD: 2.86%
USA 30 YR BOND YIELD: 3.02%/
EURO/USA DOLLAR CROSS: 1.1608 DOWN .0058 ( DOWN 58 BASIS POINTS)
USA/JAPANESE YEN:111.09 UP 0.078 (YEN DOWN 8 BASIS POINT/ .
USA DOLLAR INDEX: 95.08 UP 36 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.2956 UP 54 POINTS FROM YESTERDAY
the Turkish lira close: 6.5448
the Russian rouble: 67.46 UP .80 roubles against the uSA dollar.
Canadian dollar: 1.3048 DOWN 65 BASIS pts
USA/CHINESE YUAN (CNY) : 6.315 (ONSHORE)
USA/CHINESE YUAN(CNH): 6.8436 (OFFSHORE)
German 10 yr bond yield at 5 pm: ,0.33%
VOLATILITY INDEX: 13.73 CLOSED UP 0.20
LIBOR 3 MONTH DURATION: 2.321% .LIBOR RATES ARE RISING
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Nasdaq Surges To Best August Since 2000, Bonds Bid As
EM Collapses
The US stock market seems distracted from bonds, FX, the yield curve, macro data, and geopolitics… so here is a distraction for the distraction watchers…
m
.
It seems August was “buy all the things” month as bonds and stocks both rallied notably… and once again it was all about China…
Especially buy US stocks – because US data has been so awesome!! (US Macro Surprize index is down 6 of the 8 months of this year)
Chinese Stocks did not have a great August…
European Stocks were lower but only Italy was really ugly…
US Stocks just went upper-er and upper-er…
This was the Nasdaq’s best August since the peak of the DotCom bubble… (Dow/S&P best August since 2014)
Tech stocks led the way, massively outperforming financials…
FANG Stocks soared in August – second best month since January’s meltup…
Some context here from CLSA – FANG stocks have doubled on average in 23 months and tripled in 43 months
It’s even more concentrated than that. AAPL (the biggest market cap company in the world) is up a shocking 20% in August, and AMZN is up 13% – Combined they account for 25% of the entire Nasdaq gain in August.
Treasury yields tumbled across the entire curve in August, with the long-end outperforming…
Biggest drop in 10Y yields this month since March 2018 (and dropped to the lowest monthly close since March 2018)…
The yield curve tumbled in August – flattening for the 6th month in a row (with a small rebound today)…
The Dollar managed modest gains on the month – but was only bid early and late in August (highest monthly close since June 2017) with a big roundtrip in the middle triggered by China…
Despite China’s intervention, the Yuan ended lower on the month… the 5th month of Yuan devaluation in a row
The biggest headlines were from the emerging market space where currencies collapsed…
While The Rand, Real, and Ruble were rough; Argentina and Turkey Collapsed…
Emerging Market FX is now at its weakest on record…
In fact, EM FX volatility is now at a record high relative to G7 volatility…
Cryptos had another ugly month with Ethereum down almost 35%. Bitcoin was best… only down 8.5%!
WTI Crude managed modest gains on the month but across the board commodities were weaker – from PMs to Softs…
Gold managed to stay above $1200 but completed August with its fifth straight month of declines as the record run in U.S. stocks and rising rates boost demand for the dollar.
As Bloomberg note, throw in trade-war fears and the greenback’s quasi-haven status, and it just doesn’t look good for the yellow metal. In fact, it’s looking like a fool’s errand to try to call a bottom in gold. It basically boils down to the Fed and rates. Advocates of rate hikes cite preventing asset bubbles and controlling the money flow into the financial. For the doves, wages may be stagnant, but that does nothing to overshadow the more important number, the unemployment rate, which says keep hiking. The Fed is going to keep chasing its vision of what the economy should be, and gold’s going to keep getting crushed under the wheels.
In a month where stocks were panic bid, we note that VIX was unchanged on the month…
Spot The Odd One Out!!
Comments
end
market trading/this morning
Market data
The University of Michigan Economic condition report (sentiment index) improved modestly from 95.3 to 96.2 but still the weakest since jan 2018.
(courtesy zerohedge)
UMich Economic Conditions Worst Since Election As Spending Plans Plunge
Following the preliminary data’s weakness (11-mo lows), the final August University of Michigan Sentiment Index improved modestly (from 95.3 to 96.2) but still the weakest since Jan 2018.
- Sentiment index decreased to a seven-month low of 96.2 (est. 95.5) from 97.9 in July; preliminary reading was 95.3
- Current conditions gauge fell to 110.3, the lowest since November 2016, from 114.4 in prior month (prelim. 107.8)
- Expectations measure decreased to 87.1 from 87.3 (prelim. 87.3)
As UMich’s Richard Curtin notes, most of the August decline was in the Current Economic Conditions Index, which fell to its lowest level since November 2016. These results stand in sharp contrast to the recent very favorable report on growth in the national economy.
Consumers’ views of buying conditions have fallen to multi-year lows.
- Home buying conditions were viewed less favorably than anytime since December 2008
- Vehicle buying conditions were viewed less favorably than since late 2013;
- Buying conditions for household durables were viewed less favorably than since late 2015.
The dominating weakness was related to less favorable assessments of buying conditions, mainly due to less favorable perceptions of market prices and to a lesser extent, rising interest rates. Future income and job certainty have become the main reasons cited by consumers for their positive spending views.
This shift from attractive prices and interest rates to income is typical of the later stages of expansions, with references to income and job certainty peaking just before downturns.
The anticipated inflation rate has also increased to its highest level in four years.
Chicago PMI Beats Expectations As ‘Soft’ Surveys Shrug Off Dismal ‘Hard’ Data
With ‘hard’ real economic data slumping to its weakest since Nov 2017, ‘soft’ survey-based views of the economy have once again surged, ever-hopeful that the real recovery is right around the corner and stagnation in real wages (as inflation lowers the quality of American-dreamers’ lives) is about to end…
And building on that rising ‘soft’ survey data is today’s Chicago Purchasing Managers Index which, despite dropping from July’s 65.5 level, beat expectations of 63.0 and printed 63.6 (only lowest since April)…
Chicago PMI printed near the middle of the forecast range of 61 – 66.2 from 25 economists surveyed.
The number of components rising vs last month was only 3.
- Business barometer rose at a slower pace, signaling expansion
- Prices paid rose at a slower pace, signaling expansion
- New orders rose at a faster pace, signaling expansion
- Employment rose at a slower pace, signaling expansion
- Inventories rose and the direction reversed, signaling expansion
- Supplier deliveries rose at a slower pace, signaling expansion
- Production rose at a faster pace, signaling expansion
- Order backlogs rose at a slower pace, signaling expansion
So production and new orders accelerated BUT employment and prices paid slowed? ok…
SWAMP STORIES
Mueller may try to issue a report now so as to not influence the election. The Trump legal team is preparing a counter report which consists of two parts:
- the actual Mueller investigation is tainted because of bias
- the conflicts with Rosenstein
this is worth watching…
(courtesy zerohedge)
Trump Legal Team Preparing Counter-Report Which
Will “Delegitimize” Mueller “Illegal Investigation”
President Trump’s lawyers are preparing a rebuttal to any negative report issued by special counsel Robert Mueller following the DOJ’s probe into Russian collusion with the Trump campaign, reports the Daily Beast following an interview with Trump attorney Rudy Giuliani.
Part of the rebuttal, says Giuliani, would focus on whether the “initiation of the investigation was…legitimate or not.”
According to Giuliani, the bulk of the report will be divided into two sections. One section will seek to question the legitimacy of the Mueller probe generally by alleging “possible conflicts” of interest by federal law enforcement authorities. The other section will respond to more substantive allegations of Trump campaign collusion with Russian government agents to sway the 2016 election, and obstruction of justice allegations stemming from, among other things, the president’s firing of former FBI director James Comey. –Daily Beast
The latter section of the rebuttal will focus on Deputy Director Rod Rosenstein’s mandate when he ordered the Mueller’s investigation – though Giuliani admits he has no idea what the final report will consist of.
“Since we have to guess what it is, [our report so far] is quite voluminous,” Giuliani said, claiming that he would spend much of this weekend “paring it down” and that he was editing the document created by the “whole team.”
“The first half of it is 58 pages, and second half isn’t done yet…It needs an executive summary if it goes over a hundred” –Daily Beast
In other words, Mueller has fair warning that the Trump administration intends to fight this tooth and nail.
The Weekly Standard‘s Eric Felton offered this last month:
Appellate and constitutional lawyers David B. Rivkin, Jr. and Elizabeth Price Foley recently made a compelling case that the political bias among the FBI agents working on “Crossfire Hurricane” renders illegitimate everything flowing from that investigation. If “Crossfire was politically motivated then its culmination, the appointment of a special counsel, inherited the taint,” Rivkin and Foley wrote in the Wall Street Journal. “All special-counsel activities—investigations, plea deals, subpoenas, reports, indictments and convictions—are fruit of a poisonous tree, byproducts of a violation of due process.” Rivkin and Foley add: “That Mr. Mueller and his staff had nothing to do with Crossfire’s origin offers no cure.” –Weekly Standard
In June, David Rivkin opined on the “Fruit of the poisonous tree” argument against Mueller in the Wall Street Journal:
Given the paucity of evidence, it’s staggering that the FBI would initiate a counterintelligence investigation, led by politically biased staff, amid a presidential campaign. The aggressive methods and subsequent leaking only strengthen that conclusion. If the FBI sincerely believed Trump associates were Russian targets or agents, the proper response would have been to inform Mr. Trump so that he could protect his campaign and the country.
Suffice to say, if Mueller tries to take Trump out, Trump will go down swinging.
Meanwhile, Trump is now referring to the special counsel probe as an “illegal investigation.”
Jennifer Jacobs
✔@JenniferJJacobs
“I view it as an illegal investigation.
“I’m not saying anything—I’m just telling you this: You read the great scholars, the great legal—there should have never been a special counsel,” Trump told @margarettalev and me, referring to Special Counsel Robert Mueller’s probe.
“Hard To Refute” FBI Leaked Stories To Media And
Used Them To Obtain FISA Warrants
Authored by Mac Slavo via SHTFplan.com,
Special Agent Jonathan Moffa testified last Friday behind closed doors and before the House Judiciary Committee and House Oversight Committee. Moffa said that FBI personnel would use media reports based on information they leaked to justify applications for Foreign Intelligence Surveillance Act warrants.
Moffa, who worked with controversial former FBI officials Peter Strzok and Lisa Page, did not come forward to the media, but according to a report by Fox News, a source familiar with his testimony has spoken about it.
When pressed by the committees on whether this was common practice at the FBI, Moffa acknowledged the FBI had at least engaged in this activity in other cases. However, the source also told Fox News that Moffa did not specifically confirm that the practice of using leaked information to bolster warrant applications was employed with regard to the dossier.
The source told Fox News that Moffa acknowledged this “had been a practice in the past.”
Republicans have long questioned to what extent leaked information, related to the unverified anti-Trump dossier, was used as a basis for surveillance warrants against former Trump adviser Carter Page in 2016 — when the bureau was led by James Comey and deputy Andrew McCabe. –Fox News
House Freedom Caucus Chairman Mark Meadows, told Fox News on Tuesday that the committee had evidence of the FBI’s practice that would be “hard to refute,”and the FBI did not immediately respond to Fox News‘ request for comment.
“We know that some people at the Department of Justice and the FBI actually gave information to the media, then the stories were reported. Then they used those reports to justify further investigations,” Meadows said on “America’s Newsroom” Tuesday.
“You know, that’s like saying, we’re going to incriminate on one hand, and be the jury on the other. It just doesn’t work that way.”
Meadows also took to Twitter to announce this new information
Mark Meadows
✔@RepMarkMeadows
We’ve learned NEW information suggesting our suspicions are true: FBI/DOJ have previously leaked info to the press, and then used those same press stories as a separate source to justify FISA’s
Unreal. Tomorrow’s Bruce Ohr interview is even more critical. Did he ever do this?
The Daily Caller was the first to report on the specifics of Moffa’s claims.
end
Bruce Ohr not only meets Steele several times but also the Russian oligarch Deripaska. It seems that the real Russian collusion was on the Democratic side of things and not Trump
(courtesy zerohedge)
Steele To Ohr In Secret 2016 Meeting: Russia Has Trump
“Over A Barrel” With “Explosive Information”
Former UK spy Christopher Steele told then-DOJ #4 Bruce Ohr at a 2016 breakfast that the Kremlin had Donald Trump “over a barrel” thanks to “potentially explosive information” in the possession of Russian intelligence, reports AP, citing “multiple people” familiar with the encounter.
Ohr also learned that Trump campaign aide Carter Page had met with “higher-level” Russian officials than the aide had previously acknowledged, said the sources.
The previously unreported details of the July 30, 2016, breakfast with Christopher Steele, which Ohr described to lawmakers this week in a private interview, reveal an exchange of potentially explosive information about Trump between two men the president has relentlessly sought to discredit.
…
Among the things Ohr said he learned from Steele during the breakfast was that an unnamed former Russian intelligence official had said that Russian intelligence believed “they had Trump over a barrel,” according to people familiar with the meeting. It was not clear from Ohr’s interview whether Steele had been directly told that or had picked that up through his contacts, but the broader sentiment is echoed in Steele’s research dossier. –AP
Page responded to the AP report, tweeting: “BREAKING NEWS (a.k.a. what most sane reporters and other observers realized long ago): The Corrupt DOJ, co-conspirators in the DNC and their high-priced consultants correctly believed they had American democracy and the FISA Court over a barrel in 2016.”
Carter Page, Ph.D.@carterwpageBREAKING NEWS (a.k.a. what most sane reporters and other observers realized long ago): The Corrupt DOJ, co-conspirators in the DNC and their high-priced consultants correctly believed they had American democracy and the FISA Court over a barrel in 2016.
http://www.dailymail.co.uk/news/article-6119093/Justice-lawyer-told-Russia-Trump-barrel.html …Justice Dept official: Spy said Russian intel had Trump over a barrel
Bruce Ohr, a senior Justice Dept official, told lawmakers in an interview behind closed doors that Christopher Steele told him at a breakfast meeting how Kremlin spies viewed Trump in 2016.
dailymail.co.uk
According to AP, Ohr told lawmakers that could not verify the accuracy of Steele’s information, however he considered the ex-UK spy to be a “reliable FBI informant who delivered credible and actionable intelligence.”
That said, Ohr reportedly said he did not notify his superiors of the Steele breakfast – including Deputy Attorney General Sally Yates.
Ohr also shed light on the DOJ’s decision to demote him;
Ohr said he met in late December 2017 with two senior Justice Department officials, Scott Schools and James Crowell, who told him they were unhappy he had not proactively disclosed his meetings with Steele. They said he was being stripped of his associate deputy attorney post as part of a planned internal reorganization, people familiar with Ohr’s account say. –AP
According to Ohr, Attorney General Jeff Sessions and his boss Deputy, Rod Rosenstein, did not believe he could continue in his role as director of a drug grant-distribution program – the Organized Crime and Drug Enforcement Task Force, as it entailed White House meetings and interactions.
The Steele-Ohr breakfast was just one of many interactions between the two – as they also communicated extensively about Russian Oligarch and Putin pal Oleg Deripaska as recently as February 2016, which included efforts to obtain a Visa for Deripaska to attend an Asia-Pacific Economic Cooperation meeting int he US.
Steele’s firm, Orbis Business Intelligence, was hired by a law firm working for Deripaska in 2012, marking the beginning of a relationship which extended at least throughout 2016 according to Solomon. Steele was tasked with researching a business rival of Deripaska, however Steele’s work for the Russian billionaire evolved to the point where the former British spy was interfacing with the Obama administration on his behalf.
Deripaska is now banned from the United States as one of several Russians sanctioned in April in response to alleged 2016 election meddling.
Ohr, meanwhile, was demoted twice after the DOJ’s Inspector General discovered that he lied about his involvement with opposition research firm Fusion GPS co-founder Glenn Simpson – who employed Steele. Ohr’s CIA-linked wife, Nellie, was also employed by Fusion as part of the firm’s anti-Trump efforts, and had ongoing communications with the ex-UK spy, Christopher Steele as well.
What’s more, Ohr met with Deripaska according to Solomon.
By 2015, Steele’s work had left him friendly with one of Deripaska’s lawyers, according to my sources. And when Ohr, then the associate deputy attorney general and a longtime acquaintance of Steele, sought help getting to meet Deripaska, Steele obliged.
Deripaska, who frequently has appeared alongside Russian President Vladimir Putin at high-profile meetings, never really dealt with Steele, but he followed his lawyer’s recommendations and met with Ohr, my sources say. –The Hill
The September 2015 meeting between Ohr, Deripaska and several FBI agents in New York sought the Russian billionaire’s assistance regarding organized crime investigations. That meeting was facilitated by Steele.
To recap: Bruce Ohr = the #4 official at the DOJ, met with a billionaire friend of Vladimir Putin, in a sit-down arranged by Christopher Steele. Steele and the DOJ, meanwhile, were accusing Donald Trump of collusion with Putin – while the Obama administration used Steele’s dodgy dossier to obtain a FISA warrant to spy on Carter Page.
Fascinating…
Sean Davis
✔@seanmdav
Dossier author Christopher Steele was likely working for Putin-linked Russian oligarch Oleg Deripaska at the exact same time he was telling Hillary and the press that Trump’s alleged ties to Russia were treason. https://twitter.com/ByronYork/status/1027319008197050369 …
Byron York
✔@ByronYork
New: Emails show 2016 links between Steele, Ohr, Simpson–with Russian oligarch in background. http://ow.ly/n2m130lkoRQ
from the King report here is a list of important stories that outlines the fraud committed by the Democrats on the Republicans in the election of Donald Trump
(courtesy King report and a special thank you to Chris Powell for sending this to us)
Bruce Ohr Reveals Phony Trump Dossier, Middle East Troubles, Emerging Market Crisis
By Greg Hunter On August 31, 2018 In Weekly News Wrap-Ups
By Greg Hunter’s USAWatchdog.com (WNW 350 8.31.18)
Bruce Ohr, the one time high ranking Department of Justice (DOJ) official, testified behind closed doors this week on Capitol Hill. In hours of sworn testimony Ohr, said that the Trump Dossier was basically a fraud that should not have been used in a court of law. That didn’t stop the FBI and DOJ from using it to fraudulently get warrants to spy on Trump and his campaign and his Administration. Bruce Ohr is naming names and says at least a half dozen top members of the FBI and DOJ knew the dossier was untrue and made up just to stop Trump from winning and later to try and use the false accusations in the dossier to remove him from office. This also means the Mueller investigation was conceived in fraud and is illegitimate. The indictments are coming, that is for sure.
Lots of trouble brewing in the Middle East. Russia is sending more than two dozen warships to the Eastern Mediterranean Sea because it says it fears another false flag gas attack in Syria. Meanwhile, Hezbollah is reportedly preparing for another war against Israel, while Iran continues to threaten closing down the Strait of Hormuz.
The so-called emerging market economies, such as Brazil, Argentina and Turkey, are just a few of the countries having big time trouble with their currencies losing value at an alarming rate. The Turkish lira has lost about half its value in one year. This means high inflation is ripping through these countries causing everything to skyrocket in price. Can this problem spread to the deeply indebted banks around the world causing another financial crisis? You bet it can.
Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.
(This report deals with the illegitimate Mueller investigation into Trump, new trouble brewing in the Middle East and an emerging market debt crisis.)
(Correction: I meant to say 22 lbs. in $100 bills make one million dollars, not “22 lbs. per $100.”)
After the Interview:
Macroeconomic analyst and global precious metals expert Rob Kirby will be the guest for the Early Sunday Release. How close are we to a gigantic debt reset? He will fill us in.
Video Link
-END-
I WISH YOU ALL TO HAVE A HAPPY AND SAFE LABOUR DAY HOLIDAY WEEKEND
AND……
WE WILL SEE YOU ON TUESDAY NIGHT.
HARVEY
harveyorganblog.com 
http://didthesystemcollapse.com
Some wonder about the silver difference, $1.43 or so, recently.
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