OCT 10/STOCK MARKET CRASHES WITH THE DOW DOWN 831 POINTS AND A FURTHER 200 POINTS IN THE AFTERMARKET/NASDAQ DOWN OVER 4% IN REGULAR TIME AND 5% IN THE ACCESS MARKET/GOLD UP $265 TO $1187.60/THE CROOKS ARE KEEPING PAPER SILVER IN THE LOW 14.30’S: SILVER CLOSED AT $14.32/PLEASE READ DAVID GOLDMAN (UNDER THE GLOBAL ISSUES) AS HE EXPLAINS THE CRISIS WE ARE NOW IN/MORE SWAMP STORIES FOR YOU TONIGHT/

GOLD: $1187.60 UP  $2.65 (COMEX TO COMEX CLOSINGS)

Silver:   $14.32 DOWN 7 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1194.50

 

silver: $14.32

 

FOR THE NEXT TWO WEEKS, MY COMMENTARIES WILL BE DELIVERED BUT NOT AT MY USUAL TIME. I WILL GET IT DONE BUT IT IS INCREASINGLY MORE DIFFICULT TO WRITE

 

SO TRY AND CLICK ON AFTER 6:30 PM

 

THANKS

 

H

 

 

 

 

 

For comex gold and silver:

OCT

 

 

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  OCT CONTRACT: `1 NOTICE(S) FOR 100 OZ 

Total number of notices filed so far for OCT:  851 for 85100 OZ  (2.649 TONNES)

 

 

 

 

 

FOR OCTOBER

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

1 NOTICE(S) FILED TODAY FOR

5,000 OZ/

Total number of notices filed so far this month: 296 for 1,480,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $6597: DOWN  $53

 

Bitcoin: FINAL EVENING TRADE: $6631  DOWN 15 

 

end

 

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 FELL BY A TINY SIZED 795 CONTRACTS FROM 200,648 DOWN TO  199,853 DESPITE YESTERDAY’S HUGE  33 CENT FALL IN SILVER PRICING AT THE COMEXTODAY WE  MOVED A FURTHER FROM AUGUST’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 JUST LESS THAN 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 STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

EFP’S FOR OCT.  1733 EFP’S FOR DECEMBER AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 1733 CONTRACTS. WITH THE TRANSFER OF 1733 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 1733 EFP CONTRACTS TRANSLATES INTO 8.665 MILLION OZ  ACCOMPANYING:

1.THE 9 CENT RISE 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  39.505 MILLION  OZ STANDING  IN SEPT. AND 1,590,000 OZ STANDING IN OCTOBER.

 

 

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF SEPT: 

18,652 CONTRACTS (FOR 8 TRADING DAYS TOTAL 18,652 CONTRACTS) OR 93.26 MILLION OZ: (AVERAGE PER DAY: 2331 CONTRACTS OR 11.657 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF SEPT:  93.26 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 13.31% 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:           2,312.78    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.

ACCUMULATION FOR SEPTEMBER 2018:                                 167,05          MILLION OZ

RESULT: WE HAD A SMALL SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 795 DESPITE THE  9 CENT GAIN IN SILVER PRICING AT THE COMEX //YESTERDAY. THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 2166 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 FAIR SIZED:938 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 1733 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 795  OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH A 9 CENT RISE IN PRICE OF SILVER  AND A CLOSING PRICE OF $14.39 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 IN SEPTEMBER AN FINAL MONSTROUS 39.505 MILLION OZ OF SILVER STANDING FOR DELIVERY… 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 JUST UNDER 1 BILLION oz i.e. 0.999 BILLION OZ TO BE EXACT or 143% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT AUGUST MONTH/ THEY FILED AT THE COMEX: 1 NOTICE(S) FOR 5,000 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:

  1. 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. , SEPT:  AN INITIAL HUGE 39.505 MILLION OZ./AND NOW OCTOBER:1,590,000 oz
  2. 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.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. 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 FELL BY A CONSIDERABLE SIZED 5281 CONTRACTS DOWN TO 465.253 DESPITE THE RISE IN THE COMEX GOLD PRICE/YESTERDAY’S TRADING (A GAIN IN PRICE OF $2.00.THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A VERY GOOD SIZED 5416 CONTRACTS: ALWAYS, ON THE WEEK PRIOR TO FIRST DAY NOTICE IN ANY ACTIVE MONTH WHETHER GOLD OR SILVER THE OI COLLAPSES.  IT IS HERE THAT THE MIGRANTS RECEIVE THEIR FIAT BONUS FOR ENGAGING IN THIS EXERCISE. WE HAD THE FOLLOWING EFP ISSUANCE FOR TODAY:

 

OCTOBER HAD EFP’S ISSUED AND, DECEMBER HAD AN ISSUANCE OF 5416 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 465,253. 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 A VERY TINY SIZED OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 135 CONTRACTS:  5281 OI CONTRACTS DECREASED AT THE COMEX AND 5416 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 135 CONTRACTS OR  135000 OZ = 0.419 TONNES. AND ALL OF THIS LACK OF  DEMAND  OCCURRED WITH A RISE IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF $2.00??? GO FIGURE!!

 

 

 

YESTERDAY, WE HAD 12092 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF SEPT : 63,316 CONTRACTS OR 6,331,600 OZ OR 198.90 TONNES (8 TRADING DAYS AND THUS AVERAGING: 7915 EFP CONTRACTS PER TRADING DAY OR 827,100 OZ/ TRADING DAY),,

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 8 TRADING DAYS IN  TONNES: 198.90 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES

THUS EFP TRANSFERS REPRESENTS 198.09/2550 x 100% TONNES =  7.76% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:     5,864.46*  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)

ACCUMULATION OF GOLD EFP FOR SEPT 2018                       470.64 TONNES   (19 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 CONSIDERABLE SIZED DECREASE IN OI AT THE COMEX OF 5281 DESPITE THE GAIN IN PRICING ($2.00 THAT GOLD UNDERTOOK YESTERDAY) //. WE ALSO HAD AN STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 5416 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 5416 EFP CONTRACTS ISSUED, WE HAD A TINY  GAIN OF 135 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

5416 CONTRACTS MOVE TO LONDON AND 35281 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 0.419 TONNES). ..AND ALL OF LACK OF DEMAND OCCURRED WITH A GAIN OF $2.00 IN YESTERDAY’S TRADING AT THE COMEX.???

 

 

we had: notice(s) filed upon for 100 oz of gold at the comex.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

With respect to our two criminal funds, the GLD and the SLV:

GLD...

 

WITH GOLD UP $2.65 TODAY: / 

 

NO CHANGE IN INVENTORY

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   730.17 TONNES

Inventory rests tonight: 730.17 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 7 CENTS TODAY

NO CHANGES IN SILVER INVENTORY AT THE SLV

 

 

 

 

 

 

 

 

 

 

 

 

/INVENTORY RESTS AT 332.912 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 TINY SIZED 795 CONTRACTS from 200,648 DOWN TO  199,853  AND MOVING A LITTLE FURTHER FROM THE NEW COMEX RECORD SET LAST IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..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:

 

 

1733 CONTRACTS FOR DECEMBER AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1733 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 795 CONTRACTS TO THE 1733 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A GOOD NET GAIN OF 938 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 4.69 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..  A HUGE 39.505  MILLION OZ  STANDING FOR SILVER IN SEPTEMBER…AND NOW 1.590 million  OZ STANDING FOR THE NON ACTIVE MONTH OF OCTOBER.

 

 

RESULT: A SMALL SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 9 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING YESTERDAY.BUT WE ALSO HAD A GOOD SIZED 1733 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

) WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 4.82 POINTS OR 0.14% //Hang Sang CLOSED UP 20.16 POINTS OR 0.05% //The Nikkei closed UP 36.65 OR .16%/ Australia’s all ordinaires CLOSED up 0.14%  /Chinese yuan (ONSHORE) closed WELL DOWN  at 6.9253 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil UP to 74.79 dollars per barrel for WTI and 84.62 for Brent. Stocks in Europe OPENED RED//.  ONSHORE YUAN CLOSED SLIGHTLY DOWN AT 6.9253 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED SLIGHTLY DOWN ON THE DOLLAR AT 6.9321: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS STOPPED   : /ONSHORE YUAN TRADING STRONGER  AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER 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

3 C/  CHINA

( zerohedge)

4/EUROPEAN AFFAIRS

This is interesting: Luxury goods owner LVMH (owns Louis Vitton, Christian Fior and Dom Perignon)
is announcing good earnings despite a huge China slow down.  It seems that these luxury goods are cheaper overseas that in China so enterprising travelers are buying the goods overseas and selling them in China. China still have a huge business in the knock offs.
(courtesy zerohedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Saudi Arabia/Turkey

The Washington Post now publishes images of the Saudi journalist (dissident) walking into the Istanbul consulate but he never leaves as we was killed and dismembered

( zerohedge)

ii)Unbelievable!! The USA knew of the Saudi plan and went along with it. Turkey releases footage of the “hit team”

( zerohedge)

iii)The gas conflict between Turkey and all over countries involved in the Israeli big Leviathan gas discovery. Israel discovered this massive find several years ago and now major players are bidding to develop the find.  Israel told Cyprus that the discovery was also into their waters. The problem is that Turkey does not recognize Cyprus at all and they are becoming quite bellicose trying to obtain badly needed gas reserves
(courtesy GEFIRA)

 

6. GLOBAL ISSUES

 

Your most important paper. Goldman delves into the latest BIS report and they have sounded the alarm bell on a derivate volcano blowing up;  the big reason:  Europeans plus Japanese can no longer get swaps in order to buy USA bonds.  The cost of acquiring the swaps exceeds the yields.

Now the big question: who will buy the huge 1.8 trillion of USA bonds that need to be funded this year

(David Goldman/Asia Times)

 

 

 

 

 

7. OIL ISSUES

Oil slumps sto 2 week lows after a huge crude build

( zerohedge)

 

8 EMERGING MARKET ISSUES

 

i)ARGENTINA

 

 

9. PHYSICAL MARKETS

i)Craig Hemke is stating the obvious;  the banks are not on our side

( Craig Hemke)

ii)USA gold’s October letter fears a stock market crash and talks about Italy’s threat to Eurozone unity.

( USA Gold/GATA)

iii)gold demand from Chinese citizens faltered a bit last month; nothing to worry about

(courtesy Lawrie Williams)

 

10. USA stories which will influence the price of gold/silver)

 

 

MARKET TRADING

 
ii)Market data

Both wholesale inventories and wholesale sales were very strong in the 4th quarter and that will help Trump dramatically in the 4th quarter GDP numbers which may except 45

( zerohedge)

 

iii)USA ECONOMIC/GENERAL STORIES

a)Hurricane Michael will be the strongest Hurricane to hit the USA in 14 years.  It is now a category 4
two commentaries
( zerohedge)
.

b)Trump will finally get his wall as a 23 billion funding will be introduced this week

( zerohedge

c)Another bricks and mortar operation finally kicked the bucket as Sear is preparing to file for bankruptcy protection this week.
( zerohedge)
d)Trump does not like what the Fed is doing with respect to interest rates..is he ready to blame the Fed when markets crashes? Dina Powell will be the likely UN ambassador
( zerohedge)

e)Trump after being informed that the Dow was down 1000 points and the Nasdaq down over 5% states that the Fed has gone crazy.  He just threw Powell under the bus…

( zerohedge)
f)The key question is this:  who will buy the 1.8 trillion dollars of debt of the uSA this year?  Please re-read the BIS report on derivatives and they state that there is nobody out there to buy any quantity of bonds
( zerohedge)

 

iv)SWAMP STORIES

a)Wray states that the Kavanaugh background probe was consistent with the Kavanaugh probes

( zerohedge)

b) the King report/

 

Let us head over to the comex:

 

The total gold comex open interest FELL BY A CONSIDERABLE SIZED 5281 CONTRACTS UP to an OI level 465,253 DESPITE THE GAIN IN THE PRICE OF GOLD ($2.00 RISE IN YESTERDAY’S COMEX TRADING). FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE AS WELL AS WE WITNESS THE COMEX OPEN INTEREST COLLAPSE. ONCE WE GET TO FIRST DAY NOTICE, THEN THE OPEN INTEREST RISES AND AGAIN THEY DID NOT DISAPPOINT US.

 

 

WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF OCT..  THE CME REPORTS THAT THE BANKERS ISSUED AN GOOD SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 5416 EFP CONTRACTS WERE ISSUED:

OCTOBER: 0 EFP’S AND DECEMBER:  5416 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  5416 CONTRACTS.

THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS. ALSO REMEMBER THAT THERE IS NO DOUBT A HUGE DELAY IN THE ISSUANCE OF EFP’S AND IT PROBABLY TAKES AT LEAST  48 HRS AFTER LONGS GIVE UP THEIR COMEX CONTRACTS FOR THEM TO RECEIVE THEIR EFP’S AS THEY ARE NEGOTIATING THIS CONTRACT WITH THE BANKS FOR A FIAT BONUS PLUS THEIR TRANSFER TO A LONDON BASED FORWARD.

ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: A 135 TOTAL CONTRACTS IN THAT 5416 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED 3037 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES:  135 contracts OR 13500 OZ OR 0.419 TONNES.

Result: A CONSIDERABLE SIZED DECREASE IN COMEX OPEN INTEREST DESPITE THE GAIN IN PRICE/ YESTERDAY (ENDING UP WITH THE RISE IN PRICE OF $2.00). THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES:  135 OI CONTRACTS..

We are now in the active contract month of OCTOBER. For the October contract month, we lost 4 contracts to fall to 2118 contracts.  We had 0 notices yesterday, so we lost 4 contracts or 400 oz will not stand for delivery at the comex and these guys marched over to London as they received London based forwards on top of a fiat bonus for their hard work.

The next delivery month is the non active NOVEMBER contract month and here the OI ROSE by 51 contracts up to 601.  The next delivery month after November is the very big December contract month and here the OI FELL by 7291 contracts up to 369,035 contracts.

 

 

 

 

WE HAD 1 NOTICE FILED AT THE COMEX FOR 100 OZ.

 

FOR COMPARISON BETWEEN LAST YR AND TODAY:

 

FOR THE OCTOBER CONTRACT MONTH: OCTOBER IS THE WEAKEST OF ALL DELIVERY MONTHS IN GOLD.

FOR THE COMEX OCT 2017 GOLD CONTRACT MONTH: WE INITIALLY HAD 300,600 OZ STAND FOR DELIVERY OR 9.349 TONNES. (VS 13.695 TONNES OCT 2018)

AT THE CONCLUSION OF THE OCTOBER/2017 TRADING MONTH: 333,300 OZ OR 10.367 TONNES FINALLY STOOD FOR DELIVERY

 

 

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And now for the wild silver comex results.

Total silver OI FELL BY A TINY SIZED 795 CONTRACTS FROM 200,648 DOWN TO 199,853 (AND FURTHER FROM  THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018.  (THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S TINY OI COMEX LOSS OCCURRED WITH A 9 CENT RISE IN PRICING.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF OCTOBER AND, WE WERE  INFORMED THAT WE HAD A GOOD SIZED 1733 EFP CONTRACTS:

 

FOR DECEMBER: 1733 CONTRACTS AND ZERO FOR ALL OTHER MONTHS.  THESE EFPS WERE ISSUED TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  THE TOTAL EFP’S ISSUED: 1733.  ON A NET BASIS WE GAINED 938 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 795 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 1733 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:   938 CONTRACTS…AND ALL OF THIS DEMAND OCCURRED WITH A 9 CENT RISE IN PRICING YESTERDAY.

 

 

 

 

We are now in the non active delivery month of October and here we had a gain of 0 contracts to stand at 5 contracts.  We had 0 notices filed YESTERDAY so we gained 0 contracts or NIL oz will stand for delivery at the comex as these guys refused to accept a London based forward plus as well as a fiat bonus 

 

After October, is the non active delivery month of November and here we lost 9 contracts up to 466 contracts.  After November, we have a December contract and here we lost 1764 contracts down to 163,663

 

 

 

 

 

 

 

 

We had 1 notice(s) filed for 5000 OZ for the SEPTEMBER 2018 COMEX contract for silver

 

Trading Volumes on the COMEX

 

PRELIMINARY COMEX VOLUME FOR TODAY: 110,835 contracts,

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  252,679  contracts..volume low

 

 

 

 

 

 

AND NOW COMPARISON FOR OCTOBER:

 

FOR THE OCTOBER 2017 CONTRACT MONTH WE HAD 4.205,000 OZ OF SILVER INITIALLY STAND FOR DELIVERY.

BY MONTH’S END WE HAD 5,475,000 OZ FINALLY STAND AS QUEUE JUMPING IN SILVER WAS ALREADY IN THE NORM.

OCTOBER IS A NON ACTIVE DELIVERY MONTH FOR SILVER BUT AS YOU CAN SEE OCT 2017 DELIVERIES WERE PRETTY

GOOD.

 

 

 

 

 

INITIAL standings for  OCT/GOLD

OCT 10-/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
 25,196.60 oz
jpmorgan
Deposits to the Dealer Inventory in oz NIL oz

 

Deposits to the Customer Inventory, in oz  

NIL

 

oz

 

 

 

 

 

No of oz served (contracts) today
1 notice(s)
 100 OZ
No of oz to be served (notices)
2122 contracts
(212200 oz)
Total monthly oz gold served (contracts) so far this month
851 notices
85100 OZ
2.649 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz

 

we had 0 dealer entry:

 

total gold entering dealer:  NIL oz

total gold withdrawing from the dealer;  NIL oz

 

we had 0 kilobar transaction/
we had 1 withdrawal out of the customer account:
i) Out of JPMorgan: 25,196.6000 oz
total customer withdrawals:  25,196.600 oz
we had NIL customer deposit
total customer deposits: NIL oz
we had NIL adjustments
i

FOR THE OCTOBER 2018 CONTRACT MONTH)

Today, 0 notice(s) were issued from JPMorgan dealer account and 1 notices were issued from their client or customer account. The total of all issuance by all participants equates to 1 contract(s) of which 1 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the OCT/2018. contract month, we take the total number of notices filed so far for the month (851) x 100 oz or 100 oz, to which we add the difference between the open interest for the front month of OCT. (2118 contracts) minus the number of notices served upon today (0 x 100 oz per contract) equals 296,800 OZ OR 9.2317 TONNES) the number of ounces standing in this non active month of OCT

 

Thus the INITIAL standings for gold for the OCT/2018 contract month:

No of notices served (851 x 100 oz)  + {2118)OI for the front month minus the number of notices served upon today (0x 100 oz )which equals 296,800 oz standing OR 9.2317 TONNES in this active delivery month of OCTOBER.

 

We lost 4 contracts or 400 oz of gold will not stand as these guys morphed into London based forwards and received a fiat bonus for their effort.

 

 

 

THERE ARE ONLY 4.411 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 9.2317 TONNES STANDING FOR OCTOBER  

 

 

 

total registered or dealer gold:  141,829.805 oz or   4.441 tonnes
total registered and eligible (customer) gold;   8,160,889.574 oz 253.83 tonnes

IN THE LAST 25 MONTHS 102 NET TONNES HAS LEFT THE COMEX.

LADIES AND GENTLEMEN: THERE IS NO GOLD AT THE COMEX..AS THE CROOKS SEEMS TO BE FORCING LONGS TO TAKE DELIVERY OF LONDON FORWARDS AND NOT TAKE POSSESSION OF ANY GOLD AT THE COMEX/

end

And now for silver

AND NOW THE AUGUST DELIVERY MONTH

OCTOBER INITIAL standings/SILVER

OCT 10 2018
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 1,854,132.838 oz
Delaware
CNT
HSBC
Scotia

 

 

Deposits to the Dealer Inventory
604,216.780
B rinks
oz
Deposits to the Customer Inventory
200,187.380
oz
scotia
No of oz served today (contracts)
1
CONTRACT(S)
5,000 OZ)
No of oz to be served (notices)
5 contract
(25,000 oz)
Total monthly oz silver served (contracts) 315 contracts

(1,575,000 oz)

Total accumulative withdrawal of silver from the Dealers inventory this month NIL oz
Total accumulative withdrawal of silver from the Customer inventory this month

we had 1 inventory movement at the dealer side of things

i) Into Brinks:  604,216.780 oz

total dealer deposits: 604,216.780 oz

total dealer withdrawals: nil oz

we had 1 deposit into the customer account

i) Into JPMorgan: nil oz

*** JPMorgan for most of 2017 and in 2018 has adding to its inventory almost every single day.

JPMorgan now has 142.435 million oz of  total silver inventory or 48.9% of all official comex silver. (142 million/291 million)

ii) Into  Scotia:  200,187.380 oz

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 200,187.380  oz

we had  4 withdrawals from the customer account;

i) Out of CNT 1,267,554,886 OZ

ii) Out of Delaware:  237,862.342 oz

iii) Out of HSBC: 200,187.300

iv) Out of Scotia: 146,528.230 oz

 

total withdrawals: 1,854,132.838

oz

 

we had 0 adjustments

 

 

 

 

 

 

 

 

 

total dealer silver:  74.112 million

total dealer + customer silver:  287.9216  million oz

The total number of notices filed today for the OCTOBER 2018. contract month is represented by 1 contract(s) FOR 5,000 oz. To calculate the number of silver ounces that will stand for delivery in OCT., we take the total number of notices filed for the month so far at 315 x 5,000 oz = 1,575,000 oz to which we add the difference between the open interest for the front month of OCT. (5) and the number of notices served upon today (0 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the OCT/2018 contract month: 315(notices served so far)x 5000 oz + OI for front month of OCT (5) -number of notices served upon today (0)x 5000 oz equals 1,595,000 oz of silver standing for the OCT contract month.  This is a huge number of oz standing for an off delivery month.

We gained 0 contracts or an additional nil oz will be standing at the Comex as these guys refused to morph into London based forwards on top of not receiving a fiat bonus .

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 27,263 CONTRACTS  …volume very low 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 67.658 CONTRACTS..

 

 

YESTERDAY’S CONFIRMED VOLUME OF 67,658 CONTRACTS EQUATES TO 338 million OZ  OR 48.3% OF ANNUAL GLOBAL PRODUCTION OF SILVER

COMMODITY LAW SUGGESTS THAT OPEN INTEREST SHOULD NOT BE MORE THAN 3% OF ANNUAL GLOBAL PRODUCTION. THE CROOKS ARE SUPPLYING MASSIVE PAPER TRYING TO KEEP SILVER IN CHECK.

The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV RISES TO -3.83% (OCT 10/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -2.16% to NAV (OCT 10/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -3.83%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA):

NAV 12.12/TRADING 11.58/DISCOUNT 4.34.

END

And now the Gold inventory at the GLD/

OCT 10/WITH GOLD UP $2.65 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 730.17 TONNES

OCT 9/WITH GOLD UP $2.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 730.17

OCT 8/WITH GOLD DOWN $18.60 NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 730.17TONNES

OCT 5/WITH GOLD UP $3.75, WE HAD A BIG WITHDRAWAL OF 1.47 TONNES FROM THE GLD INVENTORY/INVENTORY RESTS AT 730.17 TONNES

OCT 4/WITH GOLD DOWN $1.90/WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/731.64 TONNES

OCT 3/WITH GOLD DOWN $4.05, ANOTHER HUGE REMOVAL OF 6.18 TONNES

OCT 2WITH GOLD UP $15.80 TODAY A HUGE WITHDRAWAL OF 8.35 TONNES

OCT 1…GOLD ADDS 3.94 TONNES TO THE GLDINVENTORY RESTS AT 746.17 TONNES

SEPT 28/WITH GOLD UP $8.90/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 742.23 TONNES

SEPT 27/WITH GOLD DOWN $10.90: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 742.23 TONNES

SEPT 26/WITH GOLD DOWN $6.05: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 742.23 TONNES

SEPT 25/WITH GOLD UP 0.75: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 742.23 TONNES

SEPT 24/WITH GOLD UP $3.20: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 742.23 TONNES

SEPT 21/WITH GOLD DOWN $9.90/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 742.23 TONNES

SEPT 20/WITH GOLD DOWN $2.80/A SMALL WITHDRAWAL OF .3 TONNES AND THIS IS TO PAY FOR FEES/742.23 TONNES

SEPT 18/WITH GOLD DOWN $3.00: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 742.53 TONNES

SEPT 17/WITH GOLD UP $5.20: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 742.53 TONNES

SEPT 14/WITH GOLD DOWN $6.95 TODAY, ANOTHER HUGE 2.65 TONNES OF GOLD WAS REMOVED FROM INVENTORY AT THE GLD..PRETTY SOON WE WILL HAVE ZERO INVENTORY/INVENTORY RESTS AT 742.53 TONNES

SEPT 13/WITH GOLD DOWN $2.65:NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 745.18 TONNES

SEPT 12/WITH GOLD UP $8.00 TODAY:NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 745.18 TONNES

SEPT 11/WITH GOLD UP $3.00 TODAY: A SMALL CHANGE IN GOLD INVENTORY AT THE GLD; A WITHDRAWAL OF .26 TONNES/INVENTORY RESTS AT 745.18 TONNES

SEPT 10/WITH GOLD DOWN 80 CENTS/ANOTHER HUGE 1.44 TONNES OF WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 745.44 TONNES

SEPT 7/WITH GOLD DOWN $3.75: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 746.92 TONNES

SEPT 6/WITH GOLD UP $3.05 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 746.92

SEPT 5/WITH GOLD UP $2.30 TODAY, WE HAD ANOTHER WHOPPER OF A WITHDRAWAL:  6.24 TONNES/INVENTORY RESTS AT 746.92 TONNES

SEPT 4/WITH GOLD DOWN $2.65: ANOTHER 2.65 TONNES OF GOLD LEAVE THE GLD/INVENTORY RESTS AT 755.16 TONNES/

AUGUST 31/WITH GOLD UP $2.15:ANOTHER WITHDRAWAL OF 2.06 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 757.81 TONNES

AUGUST 30/WITH GOLD DOWN $6.90: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 759.87 TONNES

AUGUST 29/WITH GOLD DOWN $2.90 (COMEX TO COMEX BUT UP 6.00 DOLLARS FROM ACCESS CLOSING) THE CROOKS RAIDED THE COOKIE JAR ONCE AGAIN TO THE TUNE OF 4.71 TONNES/INVENTORY RESTS AT 759.87 TONNES AFTER THE WITHDRAWAL.

AUGUST 28/WITH GOLD DOWN $1.60: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 764.58 TONNES

AUGUST 27/WITH GOLD UP ANOTHER $3.00: ANOTHER SURPRISE WITHDRAWAL OF 2.65 TONNES FROM THE GLD/SHAREHOLDERS OF GLD ARE DUMB OWING THIS CRAP/INVENTORY RESTS AT 764.58 TONNES

AUGUST 24/WITH GOLD UP $18.65 TODAY/A SURPRISE WITHDRAWAL OF 1.53 TONNES FROM THE GLD/INVENTORY RESTS AT 767.23 TONNES

AUGUST 23/WITH GOLD DOWN $9.20: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 768.70 TONNES

AUGUST 22/WITH GOLD UP $3.45: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 768.70 TONNES

AUGUST 21: WITH GOLD UP $5.75/A  BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 3.54 TONNES/INVENTORY RESTS AT 768.70 TONNES

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

OCT 10.2018/ Inventory rests tonight at 730.17 tonnes

*IN LAST 474 TRADING DAYS: 203.01 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 374 TRADING DAYS: A NET 46.48 TONNES HAVE NOW BEEN REMOVED FROM GLD INVENTORY.

 

end

 

Now the SLV Inventory/

OCT 10/WITH SILVER DOWN 7 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 9/WITH SILVER UP 9 CENTS TODAY: NO CHANGE IN SILVER INVENTORY: SLV INVENTORY RESTS AT 332.912 MILLION OZ

OCT 8/WITH SILVER DOWN 33 CENTS, A GOOD SIZE WITHDRAWAL OF 563,000 OZ/INVENTORY RESTS AT 332.912 MILLION OZ.

OCT 5/WITH SILVER UP 5 CENTS, NO CHANGE IN SILVER INVENTORY AT THE SLV

OCT 4/WITH SILVER DOWN 9 CENTS/A WITHDRAWAL OF 1.316 MILLION OZ

OCT 3WITH SILVER FLAT, A GOOD INCREASE OF 1.879 MILLION OZ INTO INVENTORY

OCT 2 A HUGE CHANGE IN SILVER INVENTORY AT THE SLV/INVENTOR RESTS AT 332.912

OCT 1.NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 333.046 MILLION  OZ.

SEPT 28/WITH SILVER UP 41 CENTS, STRANGELY WE HAD A WITHDRAWAL OF .517 MILLION OZ AT THE SLV.INVENTORY RESTS AT 333.046 MILLION OZ/

SEPT 27/WITH SILVER DOWN 10 CENTS: A HUGE WITHDRAWAL OF 1.457 MILLION OZ AT THE SLV/INVENTORY RESTS AT 333.563 MILLION OZ/

SEPT 26/WITH SILVER DOWN 9 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 335.020 MILLION OZ/

SEPT 25/WITH SILVER UP 16 CENTS: STRANGE!! A BIG CHANGE IN SILVER INVENTORY AT THE SVL: A WITHDRAWAL OF 1.645 MILLION OZ/.INVENTORY RESTS AT 335.020 MILLION OZ/

WITH SILVER DOWN ONE CENT TODAY: A HUGE DEPOSIT OF 1.692 MILLION OZ INTO THE INVENTORY OF THE SLV

INVENTORY RESTS AT 336.665 MILLION OZ/

SEPT 21/WITH SILVER UP 2 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 334.973 MILLION OZ/

SEPT 20/WITH SILVER UP 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 334.973 MILLION OZ/

SEPT 18/WITH SILVER DOWN 4 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 334.973 MILLION OZ/

SEPT 17/WITH SILVER UP 8 CENTS TODAY:NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 334.973 MILLION OZ/

SEPT 14/WITH SILVER DOWN 11 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 334.973 MILLION OZ/

SEPT 13/WITH SILVER DOWN 2 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.316 MILLION OZ OF SILVER ENTERS SLV INVENTORY/INVENTORY RESTS AT 334.973 MILLION OZ/

SEPT 12/WITH SILVER UP 9 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 333.657 MILLION OZ/

SEPT 11./WITH SILVER DOWN ONE CENT TODAY/WE HAD NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 333.657 MILLION OZ/

SEPT 10.WITH SILVER DOWN 2 CENTS TODAY, WE HAD ANOTHER DEPOSIT OF 940,000 OZ/INVENTORY RESTS AT 333.657 MILLION OZ/

SEPT 7/WITH SILVER DOWN 2 CENTS (AND DOWN 48 CENTS FOR THE WEEK): WE HAD A HUGE DEPOSIT OF 3.008 MILLION OZ INTO THE SLV/

SEPT 6/WITH SILVER DOWN 4 CENTS TO: A SLIGHT CHANGE, A WITHDRAWAL OF 147,000 OZ AND THIS IS TO PAY FOR FEES/INVENTORY RESTS AT 329.709 MILLION OZ/

 

SEPT 5./WITH SILVER UP 4 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.856 MILLION OZ/

SEPT 4/WITH SILVER DOWN 37 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.856 MILLION OZ/

AUGUST 31/WITH SILVER DOWN ONE CENT TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.856 MILLION OZ/

AUGUST 30/WITH SILVER DOWN 20 CENTS TODAY, A BIG CHANGE IN SILVER INVENTORY: A DEPOSIT OF 742,000 AT THE SLV/  .INVENTORY RESTS AT 329.856 MILLION OZ/

AUGUST 29/WITH SILVER DOWN 10 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 28/WITH SILVER DOWN 5 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 27/WITH SILVER UP 6 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 24./WITH SILVER UP 26 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 23/WITH SILVER DOWN 20 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

AUGUST 22/WITH SILVER DOWN 1 CENT/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 329.104 MILLION OZ/

 

 

 

OCT 10/2018:

 

Inventory 332.912 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

HUGE JUMP IN LIBOR AND GOFO RATES

YOUR DATA…..

6 Month MM GOFO 2.63/ and libor 6 month duration 2.27

Indicative gold forward offer rate for a 6 month duration/calculation:

G0FO+ .36

 

libor 2.63 FOR 6 MONTHS/

GOLD LENDING RATE: 2.27%

XXXXXXXX

12 Month MM GOFO
+ 2.65%

LIBOR FOR 12 MONTH DURATION: 2.96

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.31

end

 

Major gold/silver trading /commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

“Gold Is On The Cusp” Of An “Explosion Higher” As Stock and Tech “Crash Is Coming”

“The Crash Is Coming” As “Money-Printing Never Works” Warns Hickey

by Christoph Gisiger via FUW.ch

Few investors have a deeper understanding of the tech sector than Fred Hickey. 

The renowned editor of the popular investment newsletter «The High-Tech Strategist» draws alarming parallels to the bursting of the dotcom bubble in the year 2000 and spots high risks in stock market darlings like Amazon and Apple.

For the industry veteran, one important reason to be concerned are rich valuations. He also sees troubles ahead with respect to the rise in interest rates and the growing mountain of debt around the world. 

Against this background, the outspoken contrarian sees bright opportunities in gold and in attractively priced mining stocks.

About Fred Hickey

For many investors around the world, Fred Hickey’s monthly newsletter is a must read. It’s a unique treasure of deep knowledge that goes way beyond the tech sector. Having grown up in Lowell, Massachusetts, in the heartland of the computing cluster around Route 128, Mr. Hickey has been fascinated by technology since his youth. After graduating from the University of Notre Dame, he started working for the former telecom giant General Telephone & Electronics. In 1987, he began writing his newsletter for his friends and family. After just five years it went so well that he could make a living out of his investing tips. Today, Mr. Hickey who likes to take long walks in his rare spare time, lives far away from Wall Street in Nashua, New Hampshire, and in sunny Costa Rica.

Mr. Hickey, despite raising interest rates, global trade tensions and turmoil in the emerging markets the stock market in the United States is chasing one record after record. How long will this go well?

Today’s situation reminds me of the fall 2000 which was a very difficult time for me as a contrarian investor. The internet bubble had broken in March when the Nasdaq peaked at 5132 and all those crazy valued dotcom stocks had crashed. In the three weeks after the Nasdaq had peaked it looked like the whole stock market had broken. But it hadn’t because investors rotated into what they perceived to be safer big cap tech names. So, they piled into stocks like Intel, Cisco, Microsoft, Nortel, EMC and Sun Microsystems. And that’s what we’re seeing today in a similar way with stocks like Amazon, Apple and, again, Microsoft.

What happened next?

Once we got into September and October, the market started to roll over. Back then, I was short via puts a number of tech stocks. My biggest short position was Intel and the stock first went higher and higher. In August 2000, Intel rose 20% in just one month and pushed into a new high of almost 76 $ a share. For me, these were some of my toughest days trying to fight the mania. The maniacs were piling into the stock and had no clue. They were only chasing momentum – just as they’re doing it today.

But as soon as Labor Day rolled around, Intel’s shares started to fall because fundamentally the business was deteriorating. Intel had to lower its outlook and the stock crashed 45% in one month. Think about it: At that time, Intel was the second largest company in the world. It’s the equivalent of Amazon today which means that Amazon’s market cap would go from around $1 trillion to $550 billion in just one month. That’s a shocking thing. But the difference is that Intel’s P/E ratio was 55 back then. Amazon’s is 155 today.

Then again, there are also important differences. In 2000, the Fed Funds Rate was 6,5%. Today it’s hardly more than 2%. Shouldn’t that provide some kind of safety net for stocks?

The bulls argue that interest rates are very low. Therefore, they think the coast is clear. But here’s the problem: By dropping rates to zero percent or even lower central banks have encouraged the whole world to take on an enormous amount of debt. Global world debt amounts to $245 trillion and it’s up 40% since the credit crisis. They have tried to correct a debt crisis with much more debt. Just consider the US, for instance: We have more than doubled our debt up to $21.2 trillion and we added $1.4 trillion of debt in the last twelve months. So even though interest rates for US treasuries are historically still very low at this point, we are heading into severe troubles. Even with rates staying where they are today the interest expense for the US government is going to be skyrocketing in the next years just like the price of bitcoin before it broke at the end of 2017.

Why is this a problem for stocks?

This huge amount of debt is causing all kinds of other problems. With rates around the world now rising we’re probably looking at another emerging market crisis. There are some twenty countries now whose currencies have fallen by double digits against the dollar. And in the US, it’s not just the government that borrowed heavily. Consumers have borrowed a record amount of debt as well as corporations. This means that higher interest expenses will more than offsets or at least equalize the positive effects from Trump’s tax cuts – and these tax cuts are going to increase the deficit even more. Yet, the people who funded the US deficits are dropping their treasury holdings. Japan, China, Russia and Mexico have all sold a lot of treasuries. The only ones remaining who are now funding the US in a big way are the Europeans because they still have negative rates. But as rates in Europe eventually are going to rise this support could go away, too. Investors who are piling into these big-name tech stocks are not thinking about that.

You have been bearish for some time. When will judgement day come?

No one knows exactly when. In March 2000, I didn’t know that the Nasdaq would break, nor did I know that S&P 500  would break a number of months later. But today, I know that the most elusive objects of speculation, the cryptocurrencies, have broken. Also , the situation in the emerging markets is getting worse, interest rates are rising, the Federal Reserve is scaling down its balance sheet and consumers are in trouble. We’re already seeing indications of weakness in the housing market as well as in auto sales. So, it’s just a matter of time and each time the Fed raises rates further it’s a adding a straw to the camel’s back. The Fed knows that this is an extremely difficult situation even though they never admit it. Almost every time we had interest rate hike campaigns by the Fed it led to a recession and a bear market. I don’t know if history will repeat exactly. But I know it does rhyme and we’re kind of in the same situation today as we were in the fall of 2000.

But weren’t equity valuations significantly higher at that time?

True, the P/E ratios don’t look as high as they were in 2000. But other indicators do. For instance, the median price to sales ratio for the S&P 5000 is two times higher than it was in 2000. What’s more, the median price to book value is just as high as it was back then. This shows that this bubble is much broader than it was in 2000. And think about all the methods that corporations have taken in order to pump up their earnings which includes the record number of corporate buybacks and non-GAAP- earnings numbers. They do everything they can to make earnings look better than they are. If you were to take all those gimmicks out, you probably have P/E ratios just as crazy as you did in 2000.  That’s how dangerous this bubble is. But there is no recognition in the market just as there was no recognition in 2000 of the danger that was ahead.

So, which of today’s mega-cap tech stock is the most vulnerable?

Some of them have already started to break. Facebook  has broken. The stock is down quite a bit and, the company is under great pressure. There are regulatory issues and they are losing customers. Netflix  has broken, too. But if you look at the biggest names, the ones that are still holding up, Apple looks like the most vulnerable.

Why?

Apple is a smartphone maker. But even though it has the largest market valuation in the world, it’s not the number one smartphone maker. Until recently, Apple was number two after Samsung but now it dropped to number three because Huawei, a Chinese smartphone maker, surpassed it. Also, Xiaomi which is right behind Apple is growing dramatically faster and will soon take out the number three spot.

Agreed, but Apple has successfully positioned itself as a premium brand in the smartphone market. Also, their service business shows robust growth.

But keep in mind that a lot of these services are games for smartphones. If you are losing market share and you are not selling much more smartphones you are not going to be able to sell services. A year ago, Apple announced their tenth anniversary iPhone X. It was supposed to kick off a new super-cycle like the iPhone 6 Plus did in 2014. But sales aren’t that great, and inventories rose significantly. Now, they’ve launched a series of new products like the iPhone XS Max. But these new products don’t have many new features. And right now, the Chinese makers have really good products at one third less of the price. This is what happened in the PC market, this is how people lose market share. So how the heck can you be valuing Apple at $1.1 trillion? They’re losing market share and they’re trying to raise prices in a saturated mature market. Nevertheless, the share price keeps rising which makes the stock highly vulnerable.

Which is the strongest big-cap tech stock?

I’d say Google has a better longer-term position. But let me tell you what happened in 2000 to all those big cap names: Intel’s stock, even though it was the second largest company globally, fell 80% until it bottomed. Cisco’s stock fell 90% and that was the third largest company. Nortel fell 99%, and EMC and Sun Microsystems fell 96%. So, if you’re asking which one of today’s big cap tech stocks is going to do better I would refer to Intel after the dotcom crash: It did better than the other stocks with “only” 80% decline. That’s what the future looks like today and there will be no place to hide.

So how are positioned as an investor?

Since this is a bubble I’m doing exactly what I was doing in 2000: I’m not long any tech stocks because I’m expecting a crash. When I’m bullish I like to be in stocks which generate lots of cash flow, have high margins and these are oftentimes software companies. But when I’m bearish, I want to be short – through put-options – stocks where the cash just flies out the door and where the cycles are so extreme that we get the biggest booms to busts. That’s in the semiconductor world and that’s where my focus is. The semiconductor market has topped, and some memory makers are getting hit hard already. Western Digital has gone from over $100 late last year to around $50. Micron Technology is getting hammered as well. I also have put options on Intel and Nvidia . The semiconductor equipment manufacturers are starting to get hit, too. Lam Research went from around $220 to $150 and Applied Materials is getting hit, too.

How bad will it really get? In the past decades, investors could always count on the Fed to step in when things get dicey.

There is going to be a lot of pain unless the Fed comes in and prints a heck of a lot more money. With interest rates still at these low levels, they are not going to be able to lower rates much more. In fact, when they tried to lower rates in 2007/08 it didn’t have any impact. The markets kept plunging so they had to launch quantitative easing. So, this time it’s going to be another round of quantitative easing which will hopefully indicate to the people that the central banks are never going to be able to get us out of this. Money printing never works. If it worked, everybody would have been doing it for 5000 years. A lot of governments have tried it and every time it has failed. All you get is malinvestments, overcapacities, asset bubbles and all these evil things.

So, what should investors do?

Up to the 2000 bubble I was a 100% in tech names. That worked out great because I benefited from the great bull market in the 80s and 90s. But I sold my last tech stock in late 1998 when I realized that this was a bubble. I also realized that the Fed and the other central banks were out of control. I didn’t know how out of control they would get. I don’t think anyone could have imagined that there would be trillions of dollars around the world with negative rates because this never happened before in human history. Also, I would never have imagined of $15 trillion printed around the world. All I knew for sure was that monetary policy was out of control. So, I looked around and asked myself what will do well when the central banks are going crazy? How can I protect my wealth if they are debasing the currencies in order to continue with these bubbles? And of course, historically the best way to protect your money is precious metal.

Gold and especially gold mining stocks had an amazing run in that last decade. But since 2011 gold’s glimmer seems to have faded.

Two factors were responsible for this: growing production and shrinking demand from financial investors. But now, I think the gold market bottomed in December of 2015.

Gold production is going down because many mining companies have slashed their exploration and development. There are no new major mines that have been found and there aren’t many which are being developed. That means supply has started to shrink and it will continue to shrink. On the other side, we had a great disinvestment in gold by US investors who have poured all their money into stocks. But when the stock market declines, as I expect, they are going to do what they usually do: They are going back into gold and demand will increase at the same time as supply is decreasing.

How will this impact the stocks of gold miners?

In the last gold bull market which started in 2001, gold was up 650% but the gold miners were up 17 times. Also, in the first phase of what I consider the new gold bull market which began in 2016, gold went up 30% but mining stocks went up 160%. So, you can see the leverage, especially when these stocks are depressed like today. For me as a contrarian, this is an amazing moment. On one hand, it’s a demoralizing moment like it was in 2000. But at the same time, it’s the most exciting moment since gold is on the cusp of an explosion higher.

All you have to do is to be willing to wait and to be patient for it to happen, but most people are not.

 

7_Key_Storage_Must_Haves_-_Copy.jpg

 

 

Avoid Digital & ETF Gold – Key Gold Storage Must Haves

 

 

 

 

 

News and Commentary

Gold inches up as retreat of bond yields weigh on dollar (Reuters.com)

Rising yields suggests ‘conflicting factors’ over U.S. growth: Fed’s Kaplan (Reuters.com)

Small-business sentiment retreats from 45-year high, NFIB says (MarketWatch.com)

Tech rebound props up Wall Street, but global growth concerns weigh (Reuters.com)

IMF cuts world economic growth forecasts on tariff war, emerging market strains (Reuters.com)


Source: Bloomberg

Investors Yank Record Cash Out of Stock, Real Estate, and Muni ETFs (BloombergQuint.com)

Italy’s bond yields fall after Tria makes Draghi-style pledge (Reuters.com)

Rising Interest Rates Start Popping Bubbles — The End Of This Expansion Is Now In Sight (DollarCollapse.com)

Think You’re Prepared For The Next Crisis? Think Again. (PeakProsperity.com)

Blockchain Tech Coming to Commodity Markets, Blythe Masters Says (Bloomberg.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below


Gold Prices (LBMA AM)

09 Oct: USD 1,187.40, GBP 910.26 & EUR 1,036.01 per ounce
08 Oct: USD 1,194.80, GBP 914.86 & EUR 1,040.67 per ounce
05 Oct: USD 1,201.10, GBP 921.48 & EUR 1,045.08 per ounce
04 Oct: USD 1,199.45, GBP 925.02 & EUR 1,043.28 per ounce
03 Oct: USD 1,203.50, GBP 925.73 & EUR 1,040.55 per ounce
02 Oct: USD 1,192.65, GBP 919.77 & EUR 1,035.46 per ounce

Silver Prices (LBMA)

09 Oct: USD 14.33, GBP 10.98 & EUR 12.51 per ounce
08 Oct: USD 14.47, GBP 11.10 & EUR 12.61 per ounce
05 Oct: USD 14.64, GBP 11.23 & EUR 12.73 per ounce
04 Oct: USD 14.63, GBP 11.27 & EUR 12.72 per ounce
03 Oct: USD 14.74, GBP 11.36 & EUR 12.75 per ounce
02 Oct: USD 14.51, GBP 11.20 & EUR 12.59 per ounce


Recent Market Updates

– Gold Bottoms As Gold Industry Consolidates and Weak Hands Capitulate
– 60 Charts For The (Last Few Remaining) Gold Bulls
– Poland and Australia Buy Gold As Global Property Bubble Bursts – This Week’s Golden Nuggets
– Brexit To Burst Dublin and London Property Bubbles? GoldCore Video
– Perth Mint’s Gold and Silver Bullion Coin Sales Soar In September
– “I’m Favouring Equities and Gold Over Bonds” – Stepek
– Poland Buys Gold For First Time In 20 years
– This Week’s Golden Nuggets – Central Banks, Goldman, Bank of America Positive On Undervalued Gold
– Central Banks Positivity Towards Gold Will Provide Long Term “Support To Gold Prices”
– Europe Unveils “Special Purpose Vehicle” With Russia and China To Bypass SWIFT, Jeopardizing Dollar’s Reserve Status
– Gold Set to Soar Above $1,300 – Goldman and Bank of America
– Goldnomics Podcast: Silver Guru – David Morgan – Silver and Gold Will Protect in the Coming Currency Collapse

Mark O’Byrne
Executive Director

 

 
ANDREW MAGUIRE’S KINESIS WHICH IS A”BITCOIN’ BACKED 100% BY ALLOCATED GOLD AND SILVER

Andrew Maguire’s Kinesis money which is a “bitcoin” but backed 100% by allocated gold and silver is set to go.

it think it would be a great idea to look at this!

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(Andrew Maguire)

 Dear Harvey Organ,

Thank you for your participation in our webinar on June 7th with our host and CEO of Kinesis, Thomas Coughlin.

The response we received has been incredible, we appreciate you taking the time to join us and hope you found it to be beneficial.

Due to such a high influx of questions we received we were unable to have them all answered. Nevertheless, if there was anything which requires more clarification, or you have a query which needs to be rectified, we invite you to join our telegram group:

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We apologize for the technical issues we incurred during the webinar which resulted in it running a little over schedule, we hope that the next one we host will run seamlessly.

A video has been put together and uploaded onto our YouTube channel which can be found here:

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Please share and subscribe to our YouTube channel to be notified of all the latest videos as they become available.

The rapid growth that we are currently experiencing has been incredible and with your support, is only going to get better.

We are working behind the scenes very hard to create a better experience for everyone involved! Stay tuned in as we have many more announcements to be released in the upcoming days.

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END

 

The following is self explanatory

(courtesy GATA/Chris Powell and Harvey Organ)

GATA asks bank regulator to check risks of gold futures maneuver

 

 Section: 

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

 Section: 

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

Craig Hemke is stating the obvious;  the banks are not on our side

(courtesy Craig Hemke)

Craig Hemke at Sprott Money: The banks are not on your side

 Section: 

8:48p ET Tuesday, October 9, 2018

Dear Friend of GATA and Gold:

The TF Metals Report’s Craig Hemke, writing at Sprott Money, argues tonight that futures trader positioning data does not suggest that the bullion banks are planning to profit from a short squeeze. Rather, Hemke says, the banks are letting off easy the traders who are now short, so as to maintain the old charade of a market in the monetary metals.

Hemke’s analysis is headlined “The Banks Are Not on Your Side” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/the-banks-are-not-on-your-side.html

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

end

USA gold’s October letter fears a stock market crash and talks about Italy’s threat to Eurozone unity.

(courtesy USA Gold/GATA)


USAGold’s October letter with market and metal commentary

 Section: 

9p ET Tuesday, October 9, 2018

Dear Friend of GATA and Gold:

USAGold’s October newsletter has been posted, with commentary about fears of a stock market crash, the spurt in sales of U.S. silver eagles, concerns about inflation, Italy’s threat to Eurozone unity, China’s acquisition of a big mine in Argentina, and more. It’s available in the clear at USAGold here:

http://www.usagold.com/publications/NewsViewsOCTober2018.html

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

end

gold demand from Chinese citizens faltered a bit last month; nothing to worry about

(courtesy Lawrie Williams)

LAWRIE WILLIAMS: China gold demand may be faltering

Chinese gold demand, as represented by gold withdrawal figures from the Shanghai Gold Exchange (SGE), slipped in September from the same month a year earlier, but remained above the corresponding 2016 figure. The cumulative figure for the year to date remains higher than that of a year ago after nine months, but only by just over 3%. (See table below:)

Table: SGE Monthly Gold Withdrawals (Tonnes)

Month   2018 2017 2016 % change 2017-2018 % change     2016- 2018
January   223.58 184.41 225.08 +21.2%  -0.7%
February*   118.42 148.24 107.60 -20.1% +10.7%
March  192.61  192.25 183.24  +0.2%  +5.1%
April  212.64  165.78 171.40  +28.3% +24.1%
May  150.58  138.08 147.28  +9.1%  +2.2%
June  140.59  155.51 138.51  -9.6%  +1.5%
July 137.41  144.71 117.58  -5.0%  +16.9%
August  190.59  161.41 144.44 +18.1%  +32.0%
September  188.12  214.24 170.90  -12.2%  +10.1%
October*  151.54  153.25
November  189.10  214.72
December  185.21  196.37
Year to date 1,554.55 1504.70 1406.03 +  3.3% +10.6% 
Full Year  2,030.48  1,970.37

Source: Shanghai Gold Exchange. Lawrieongold.com

* Months include week long New Year and Golden Week holiday periods

Perhaps this is not too surprising as latest reports out of China, as reported by Bloomberg, in an independently produced PMI type survey, suggest that Chinese business confidence has dropped to the lowest level in its seven-year history in September. This is presumably a factor as the U.S. and Chinese governments imposed new rounds of tariffs on each other’s exports, escalating the Trump Administration initiated trade war.

The report highlights the latest results of an ongoing indicator from Beijing-based Cheung Kong Graduate School of Business which has dropped to its lowest level in the seven years since the graduate school started compiling these figures.

Bloomberg notes that the index is based on a survey of CKGSB students and graduates who are executives at companies operating in China. The respondents represent around 300 privately-owned small and mid-sized enterprises across several sectors of the economy. Over the last seven years, Bloomberg comments, the CKGSB index has shown bigger swings than the official PMI gauges produced by China’s National Bureau of Statistics.

What is perhaps most alarming in the report is the final commentary by the economics professor who oversees the survey. “Most surveyed companies are now experiencing unprecedented difficulties and have become increasingly pessimistic about business prospects for the next six months. For most, business has never been worse.” he says.

All this is an indicator that the ‘trade war’ is indeed beginning to bite. One suspects though that this Chinese experience may also be repeated elsewhere – even in the U.S. where the tariff impositions on Chinese imports are likely to filter through to the domestic economy in terms of price rises. The U.S high tech industry, for example, is hugely dependent on imports of Chinese-manufactured components which can not be replaced in the short’ or even the medium, term by U.S product and if the U.S. industry does gear up to raise supplies these are likely to be at a higher cost to the consumer. The Fed may be looking to a rise in inflation to help mitigate the country’s enormous debt position but this may well happen due to factors outside its control. We don’t necessarily think there will be U.S. hyper-inflation, as some commentators have been suggesting, but there certainly could be price rises across the board ahead.

But what of the latest SGE figure for September gold withdrawals? It’s probably too early to tell if this suggests the start of an ongoing downturn in gold demand – we will need to see another few months’ figures yet to be sure. The September figure was still around 10% up on the 2016 amount and the nine months cumulative total is still up on a year ago, but the lower September withdrawals could be a sign that Chinese gold demand is beginning to turn down with the economy. Only time will tell.

https://www.sharpspixley.com/articles/lawrie-williams- china-gold-demand-may-be-faltering_284910.html

-END-

______________________________________________________________________________________________________________________________________________

Your early WEDNESDAY 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 UP TO 6.9253/HUGE DEVALUATION FOR THE PAST FOUR WEEKS RESUMES/CHINESE COMING TO USA FOR TRADE TALKS IN NOVEMBER CANCELLED //OFFSHORE YUAN:  6.9321   /shanghai bourse CLOSED UP 4.82 POINTS OR 0.14%

. HANG SANG CLOSED UP 20.16 POINTS OR 0.05%

 

2. Nikkei closed UP 36.65 POINTS OR 0.16%

 

3. Europe stocks OPENED  IN THE RED 

 

 

/USA dollar index FALLS TO 95.74/Euro RISES TO 1.1493

3b Japan 10 year bond yield: RISES AT. +.16/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.38/ 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:: 74.79 and Brent: 84.62

3f Gold DOWN/JAPANESE Yen DOWN/ CHINESE YUAN:   ON SHORE DOWN/OFF- SHORE:  DOWN

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

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

3h Oil 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 RISES TO +.57%/Italian 10 yr bond yield UP to 3.50% /SPAIN 10 YR BOND YIELD UP TO 1.62%

3j Greek 10 year bond yield RISES TO : 4.46

3k Gold at $1187.10 silver at:14.37   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 7/100 in roubles/dollar) 66.31

3m oil into the 74 dollar handle for WTI and 82 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 113.25DESTROYING 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 0.9930 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1415 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.57%

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 3.23% early this morning. Thirty year rate at 3.40%

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

6.  TURKISH LIRA:  UP  TO 6.0648

Global Stocks Spooked As US Treasury Yields Resume

Their Ascent

Global markets entered Wednesday in tentative fashion as US Treasury yields resumed their upward march after dropping the day before ahead of a closely watched US CPI report and as the US Treasury prepared to sell more debt to fund the soaring US deficit.

The mood in stocks soured, and European equities turned lower with American futures as Asian peers erased an advance while world stocks inched off eight-week lows; market gains were checked by fears for global economic growth, greater US decoupling, escalating trade war and the possibility of an Italy-EU clash over budget spending. The result was generally a sea of red among global capital markets in early trading.

The equity rout that resulted from the global bond selloff that took bond yields to seven-year highs this week were exacerbated by continued growth concerns arising from trade conflicts and $80-per-barrel oil, with the IMF cutting its world GDP forecasts for the first time in two years.

The yield on 10-year Treasurys resumed its ascent to 3.23% from 3.20%, after falling for the first time in a week on Tuesday, putting a lid on early trader optimism.

“We are at some sort of critical moment, a crossroads, for bond and equity markets,” Marie Owens Thomsen, global head of economic research at Indosuez Wealth Management, said noting that while U.S. 10-year yields at 2% unequivocally favored equity investment, this was not so above 3%. “This January we took out the 2 percent (yield) handle and now we are wondering if we are permanently taking out the 3 percent handle as well. That makes the climate for equities much more challenging.”

The MSCI world equity index rose 0.14% after four days in the red. However, while Japan’s Nikkei and MSCI’s Asia-Pacific index outside Japan rose 0.2-0.3 percent, European shares slipped 0.2 percent, undermined by more bellicose rhetoric from Italian politicians.

The Stoxx Europe 600 Index dropped as most sectors turned lower. The European basic resources index (SXPP) – which was one of the best-performing sectors since the end of August – fell as much as 2.2%, one of Wednesday’s main sector laggards, as investors rotated toward defensive sub-groups including telecoms and health care. Milan-listed stocks traded between gains and losses, rising off 18-month lows hit earlier in the week.

Europe’s weakness followed a modest recovery of bullish sentiment in Asia, as shares in Japan rose after four days of losses, South Korean equities slumped as trading resumed after a holiday while those in China closed 0.2% higher after fluctuating between gains and losses before edging barely up after early gains slipped with lithium-related stocks tumbling, while Tencent suffered a record ninth day of declines in Hong Kong.

The retreat in emerging markets took a pause on Wednesday after Donald Trump said the Fed is moving too fast on rate hikes and as traders awaited U.S. inflation data before taking a stance on riskier assets. Equities slowed their drop and currencies eked out their first gain this week, led by India’s rupee

The yuan slipped against the dollar for the fifth session out of the past six to approach four-year lows hit in August, unresponsive to Mnuchin’s warning on devaluation. The focus is on next week’s semi-annual U.S. report on currencies amid Treasury officials’ comments that recent yuan depreciation has raised concerns in Washington.

The backdrop to global markets is still dominated by deepening U.S.-China tensions and a surge in volatility for stock and bond markets. While the Treasury rout has eased, a glut of new U.S. debt is coming to the market this week. American producer and consumer price data is also due in the next two days, and may determine where yields go from here.

“After President Trump once again criticized the Fed for raising rates too fast and he reiterated his preference for low borrowing costs, U.S. bond yields fell from their recent highs,” Rabobank strategist Piotr Matys wrote in a note. “This in turn provided the emerging-market currencies with respite. However, looking from the perspective of technical analysis the price action implies that U.S. 10-year Treasuries have entered a period of consolidation.”

Italian bonds initially dropped and bear flattened beyond the belly after Deputy PMs Salvini and Di Maio said the budget plan won’t change and there’s no going back, suggesting an unwillingness to compromise. Italy’s 10y spread to Germany blew out to 305bps, after Di Maio said that “our objective is not the spread, but the citizen… We expect that the economic growth rate will be higher” with measures included in the next year’s budget plan.

However the initial weakness reversed in a repeat of Tuesday’s action after Finance Minister Giovanni Tria, speaking before the parliament’s joint budget committee, pledged action to restore calm should market turbulence escalate into financial crisis. Yields slipped further after Tria said he expected “collaboration” with the EU on the budget issue, and added that “the rise in government bond yields recorded in the last few days is certainly a reason for concern, but I want to reiterate that it was an excessive reaction which is not justified by the fundamentals of Italy’s economy and public finances.”

That said, markets’ pressure has not dissuaded the government from a bigger-than-expected budget deficit as ministers’ comments indicated they are prepared to defy European Union critics. The developments have raised risks of a credit ratings downgrade for the country, with a knock-on effect for Italian banks which are big holders of government bonds. However the banks’ shares received a boost after an EU official told Reuters regulators were “intensely” monitoring Italian banks’ liquidity levels but there was no cause for alarm.

“I am not saying Italy is managing the situation in an ideal fashion but at the current junction I don’t think they are anywhere near a position where they can provoke another crisis in Europe,” Owens Thomsen said.

In currencies, the dollar reversed an early decline, rising to session highs, tracking Treasury yields, while another drop in Italian bonds kept the euro under pressure. The Bloomberg Dollar Spot Index heads for its third straight weekly advance as Treasury 10-year yields hold close to cycle highs and the euro meets selling interest on rallies above 1.15.

Politics were also in focus in Britain where reports of progress between the UK and the EU in negotiating a Brexit deal pushed the pound to 3-1/2-month highs against the dollar. Analysts at Eurizon SLJ Capital said parliamentary approval looked likely for Prime Minister Theresa May’s Brexit deal. The Times newspaper reported 30-40 opposition Labour MPs would back the agreement. “Already significantly undervalued, sterling has upside risks, especially against the euro,” Eurizon SLJ told clients, arguing that $1.55 was “fair value” for the currency.

The krone led gains in G-10 on stronger Norwegian inflation. Sterling hits its strongest level in two weeks on hopes officials will reach a compromise Brexit deal that could see the U.K. remain temporarily in the EU’s customs regime; wider than forecast trade deficit data helps push the pound back toward its opening level. The South African rand dropped following Tuesday’s rally.

In geopolitics, US President Trump said a summit with North Korean leader Kim Jung Un will be after US midterm elections on November 6th. In related news, US Secretary of State Pompeo noted real progress on his trip to North Korea and sees a full path to denuclearization.

In the latest Brexit news, ITV reported that UK PM May’s negotiator Robbins has made meaningful progress in talks with EU’s Chief Negotiator Barnier on the Irish border backstop. The article stated, “The most important development would be that the EU seems close to agreeing that the backstop would apply to the whole UK and not just to Northern Ireland, as it originally demanded – or at least it would apply to the whole UK for customs.” (ITV) In related news, UK Brexit Minister Raab said the UK will not sign up to an indefinite customs union with the backstop and negotiations with the EU have intensified, some differences on the withdrawal agreement.

In commodities, WTI slipped but was still near $75 a barrel as Hurricane Michael curtailed offshore oil production and the IEA issued a warning to the global market.

Expected data include mortgage applications, PPIs, and wholesale inventories. Fastenal is among companies reporting earnings.

Market Snapshot

  • S&P 500 futures down 0.1% to 2,885.25
  • STOXX Europe 600 down 0.3% to 371.92
  • MXAP up 0.02% to 157.41
  • MXAPJ down 0.05% to 492.53
  • Nikkei up 0.2% to 23,506.04
  • Topix up 0.2% to 1,763.86
  • Hang Seng Index up 0.08% to 26,193.07
  • Shanghai Composite up 0.2% to 2,725.84
  • Sensex up 1.3% to 34,758.76
  • Australia S&P/ASX 200 up 0.1% to 6,049.81
  • Kospi down 1.1% to 2,228.61
  • German 10Y yield rose 0.2 bps to 0.551%
  • Euro down 0.01% to $1.1490
  • Italian 10Y yield fell 9.0 bps to 3.104%
  • Spanish 10Y yield rose 1.1 bps to 1.611%
  • Brent futures down 0.2% to $84.82/bbl
  • Gold spot down 0.2% to $1,187.48
  • U.S. Dollar Index up 0.1% to 95.76

Top Overnight News from Bloomberg

  • Republican groups have been pulling back in more than a half dozen tough House races to focus their resources in districts where they see a better chance to defend against a building midterm surge by Democrats
  • China plans to increase the number of companies it deems systemically important financial institutions, people familiar with the matter said, a sign that policy makers are stepping up crisis-prevention efforts as the nation’s debt burden swells to unprecedented levels
  • Mnuchin warns China on competitive currency devaluations; Treasury has monitored currency issues “very carefully”; notes yuan has “depreciated significantly” during the year: FT
  • Italy: Finance Minister Tria says budget watchdog approved govt economic forecast, however had different view on growth targets; rise in BTP yields are an excessive reaction
  • BOE’s Haldane: risks to domestic prices are now broadly balanced; U.K. wage growth is likely to be limited and gradual
  • Brexit: a group of 30-40 Labour MPs are prepared to back Chequers deal, according to people familiar: Times
  • ECB’s Mersch: tightening labor market should support core inflation; reiterates ECB will be data dependent
  • British and European Union officials are locked in talks in Brussels over a compromise Brexit deal that could see the U.K. remain temporarily in the EU’s customs regime, people familiar with the negotiations said
  • There are growing signs China’s yuan may weaken past 7 per dollar, a key psychological level it hasn’t breached in a decade. The latest came in a China Securities Journal commentary
  • The U.S. is threatening to block the U.K. from a 46- nation public procurement agreement, a move that would deny British companies from accessing a near $2 trillion-dollar marketplace after leaving the European Union, according to two officials with knowledge of the situation
  • Federal Reserve Chairman Jerome Powell is pinning his hopes of stopping the U.S. economy from overheating on a variable that a former colleague called “the most significant unobservable of all:” inflation expectations
  • Hurricane Michael’s winds rose to Category 4 strength of 130 miles an hour as it careened toward Florida

Asia-Pacific equities traded mixed as the region mimicked the lead from Wall St. where the S&P notched its fourth day of losses while the Nasdaq snapped its three-day losing streak. The Dow closed in the red as the major indices swung between positive and negative territory throughout the day. ASX 200 (+0.3%) was supported by strength in the healthcare and consumer discretionary sectors, while Nikkei 225 (Unch) was pressured by machinery names along with Softbank after reports emerged that the company discussed investing between USD 15bln-20bln for a majority stake in WeWork, while a firmer currency only subdued the index further. Elsewhere, mixed trade in China with Hang Seng (+0.5%) supported by oil names, while Shanghai Comp. (-0.3%) gave up initial gains to trade with no firm direction for most of the session before stabilising in the red.

Top Asian News

  • China’s Banking Showdown Pits WeChat vs. 3 Million Bank Tellers
  • Rocket Scientist’s Veggie Startup Is Said Valued at $7 Billion
  • Hong Kong Bans E-Cigarettes in Latest Blow for Big Tobacco
  • SoftBank Is Said to Consider Taking a Majority Stake in WeWork
  • Luxury Shoppers in China Still Buy Bags, But Not BMWs
  • Singapore Central Banker Strikes Upbeat Tone Amid Trade Risk

Major European indices (ex-SMI) trade lower (Eurostoxx 50 -0.4%) as Italian budgetary concerns remain a key focus; SMI. The CAC 40 (-0.7%) lags its peers after being weighed on by the Luxury names after the sector was downgraded to underweight by Morgan Stanley with the US bank citing concerns about a slowdown in Chinese activity. The move by MS took the shine of LVMH’s latest sales update with other Luxury names such as Kering and Burberry trading lower in sympathy. Sectors are mixed with telecom stocks leading their peers amid broad support for the sector today. Energy names are firmer by 0.7% following oil supply concerns from Hurricane Michael. Consumer discretionary is down by over 1.5% due to the aforementioned poor performance of luxury brands. Dixons is up by 3.5% after being upgraded to buy at HSBC; whilst Sage are up by 2.4% following being upgraded to Hold at Deutsche Bank.

Top European News

  • U.K. Economy Set for Best Quarter Since 2016 Despite Flat August
  • Patisserie Valerie Owner Suspends CFO Amid Accounting Probe

In FX, the Greenback has regained some composure overall after Tuesday’s rather sharp and abrupt sell-off on a degree of US Treasury yield retracement, and to a lesser extent another expression of dissent about the rate of Fed tightening from President Trump. To recap, the broad Dollar and DXY recoiled from best levels in relatively quick order, with the index down to 95.500 vs 96.000+ and circa 95.750 now, as rival currencies also derived bullish momentum on independent factors. The JPY is back below 113.00 vs the Usd and still unable to really test a key Fib level at 112.73, but perhaps drawn towards decent option interest from the big figure to 113.05 (1.2 bn) if the headline pair fails to break above 113.25. Some retracement from peaks for the Zar after a broadly positive reaction to the new SA Finance Minister appointment, while in contrast the Try has pared losses following initial disappointment over the Turkish Government’s inflation-fighting measures.

In commodities, both WTI and Brent are down just under 0.5%, trading just under USD 75/bbl and USD 85/bbl following further supply shortages from Hurricane Michael with 40% of Gulf of Mexico production now suspended in preparation. Note, APIs will be released otnight at 2130BST due to the Columbus Day holiday on Monday. Iron ore futures are up by over 0.6% following comments from Australia’s Port Hedland that Iron ore shipments to China to rise to 37.4mln tonnes. Gold is uneventful once again trading within a thin USD 5/oz range. Zinc hit a 4-month high in Shanghai overnight amid tightening supplies.

Looking ahead, in the US, focus will be on the September PPI report ahead of Thursday’s CPI, as well as August wholesale inventories data. Brexit negotiations will remain in focus, the BoE’s Chief Economist Haldane will speak in London, and regional Fed Presidents Bostic and Evans will speak on the economic outlook later in the evening.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 0.0%
  • 8:30am: PPI Final Demand MoM, est. 0.2%, prior -0.1%;
    • PPI Ex Food and Energy MoM, est. 0.2%, prior -0.1%
    • PPI Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.1%
    • PPI Final Demand YoY, est. 2.7%, prior 2.8%
    • PPI Ex Food and Energy YoY, est. 2.5%, prior 2.3%
    • PPI Ex Food, Energy, Trade YoY, prior 2.9%
  • 10am: Wholesale Inventories MoM, est. 0.8%, prior 0.8%; Wholesale Trade Sales MoM, est. 0.5%, prior 0.0%

DB’s Jim Reid concludes the overnight wrap

It was another day to wear your seatbelts if you were trading BTPs yesterday. By late morning London time 10yr yields had climbed another 14bps to 3.711%. However by the close we were almost 10bps tighter on the day at 3.476%. An impressive turnaround. Yields seemed to start to fall at the same time as the following headlines came through from Tria’s parliamentary hearing. He said that the “Government would act in case of an unexpected rise in bond spreads,” and that Italy’s current government bond yield spread is “unacceptable” and hopes to bring it down by explaining the budget measures. To be fair, this was all very vague and it’s not clear what the government could do other than reduce the budget deficit – which he hasn’t had much power over in the first place. Nevertheless the rally had started and seemed to get a further leg when headlines came through that “Conte, Tria, Salvini and Di Maio to meet at 8pm over budget.” We haven’t seen any follow through on this but Tria will address parliament at 10AM local time today.

If BTP trading required a seatbelt yesterday, Treasury and Bund markets required a small dose of motion sickness pills as 10yrs traded to both sides of a 6bp and 4bps range respectively. Given the risk off of the last few days and the weak global day for risk across the US bond market holiday on Monday, it was a bit of a surprise to see US Treasuries sell off 3bps in the morning to nearly 3.26%. However, we closed 3.0bps lower at 3.203% (3.208% in Asia). Bunds closed largely unchanged.

US equities were mixed again, though the recent underperformers bounced, with the NYFANG index up +0.63% and the NASDAQ eking out a +0.03% gain after 3 sessions of losses over which time it had shed -3.60%. The S&P 500 and DOW fell -0.14% and -0.21% respectively, while the VIX index rose as much as 1.8pts, but fell throughout the evening to close only 0.26pts higher at 15.95. That’s still a 3-month high.

This morning in Asia markets are continuing to trade mixed with the Hang Seng (+0.43%) up while the Shanghai Comp (-0.18%), Nikkei (-0.09%) and Kospi (-1.10%) are all down. Elsewhere, futures on S&P 500 (-0.15%) are pointing to a slightly softer start while EM FX is generally stronger against the greenback. On oil, IEA Executive Director Fatih Birol made a direct appeal to OPEC and other major oil producers to boost output, warning that high prices are inflicting damage on the global economy at a time when global economy is already losing growth momentum.

The pound rallied 0.41% versus the dollar yesterday on positive-sounding headlines, with Dow Jones reporting that the EU and UK will agree to a solution on the Northern Ireland issue at next week’s EU Council meeting. Separately, Brexit Secretary Raab told Parliament that the backstop for Northern Ireland will be temporary and limited. It’s hard to see how this will satisfy the EU but the headlines over the last 24 hours suggest we getting closer to a deal. The DUP’s Arlene Foster reiterated that on the Northern Ireland border issue they are trying to find a deal that works for everyone which sounded a little more dovish while the Government’s spokesman James Slack said that the UK’s new proposal for how to prevent a hard border with Ireland is coming “in due course,” signaling that the government expects the EU to flesh out how it sees UK’s future ties with the EU. In the meantime, The Times reported that the UK PM Theresa May is planning to have an extended discussion on Brexit at next Tuesday’s cabinet meeting in hopes of outlining a compromise deal on the Irish border. Overall, our strategists remain cautious, since the actual agreement of the deal will not be the key stumbling block; the real issue is if a deal can pass through Parliament. Positive movement from Labour MPs or from “hard” Brexiteers would be a more bullish catalyst for the pound. Interestingly the FT reports this morning that up to 30 Labour MPs are assessing whether they would vote against the government if it meant a no-deal.

In terms of central bank speak, the Fed’s Kaplan said on inflation that the cyclical inflation pressures are building and didn’t think that inflation is going to “run away from us” On rates he reiterated his previous view that he is comfortable hiking rates three more times till June while adding that higher productivity could lift neutral interest rates. He also added that I “don’t know the answer yet” on whether the U.S. central bank should lift interest rates past the neutral level that neither spurs nor slows growth, or “sit tight for a while.” Philadelphia Fed President Harker continued his recent hawkish shift by describing the labour market as having “very little slack left.” Overnight the Fed’s John Williams said that he expects the US economy to grow by c.3% in 2018 and 2.5% in 2019 while adding that the above trend growth should lead to decline in unemployment levels to slightly below 3.5% in 2019. On inflation he said he expects it to move a bit above 2% but doesn’t see any signs of greater inflationary pressures on the horizon.

Emerging market currencies gained 0.32% yesterday, amid positive news in Turkey and South Africa. Turkey’s treasury and finance minister Berat Albayrak announced a new plan to cut inflation, including price controls/cuts and lower bank loan rates. The Turkish lira erased morning declines to close 0.26% stronger. In South Africa, Finance Minister Nene resigned after a corruption scandal and was replaced by Tito Mboweni, a former central bank governor. Mboweni has a strong reputation as an orthodox inflation hawk, and the markets greeted the new appointment with the Rand rallying 1.88% versus the dollar. The  Brazilian Real also outperformed, gaining 1.74% for its 7th consecutive day of gains. It has now appreciated every day in October, as investors anticipate a victory by rightwing candidate Bolsonaro in the October 28 runoff Presidential election.

In Europe, Germany’s August trade balance came in at €17.2bn (vs. €16.2bn expected) while the current account balance stood at €15.3bn (vs. €16.2bn expected). German exports declined -0.1% mom (vs. +0.4% mom expected) for the second month in a row, however the decline in imports was more accentuated at -2.7% mom (vs. -0.1% mom expected). In the US, the NFIB small business confidence fell modestly from its all-time high of 108.8 in August, printing at 107.9 versus expectations for 108.3.

Looking ahead to today, August industrial production will print in the UK and France. After a soft reading in Germany, the stakes are marginally higher than normal. The UK will also have its monthly GDP reading and trade balance report. In the US, focus will be on the September PPI report ahead of Thursday’s CPI, as well as August wholesale inventories data. Brexit negotiations will remain in focus, the BoE’s Chief Economist Haldane will speak in London, and regional Fed Presidents Bostic and Evans will speak on the economic outlook later in the evening.

 

3. ASIAN AFFAIRS

i) WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 4.82 POINTS OR 0.14% //Hang Sang CLOSED UP 20.16 POINTS OR 0.05% //The Nikkei closed UP 36.65 OR .16%/ Australia’s all ordinaires CLOSED up 0.14%  /Chinese yuan (ONSHORE) closed WELL DOWN  at 6.9253 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil UP to 74.79 dollars per barrel for WTI and 84.62 for Brent. Stocks in Europe OPENED RED//.  ONSHORE YUAN CLOSED SLIGHTLY DOWN AT 6.9253 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED SLIGHTLY DOWN ON THE DOLLAR AT 6.9321: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS STOPPED   : /ONSHORE YUAN TRADING STRONGER  AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER 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

 
END

3C CHINA

(courtesy zerohedge)

“Never Been Worse” – China’s (Non-Government)

Business Survey Collapses As Trade War Strikes

As China returns from its Golden Week vacation, it is not just its currency and stock market that is collapsing…

As Bloomberg reports, an indicator produced by a Beijing-based business school in the style of the closely-watched purchasing managers index plunged last month, adding to concerns about the slowing economy and raising the question of whether business conditions may be worse than official statistics show.

The index is based on a survey of CKGSB students and graduates who are executives at companies operating in China. The respondents represent around 300 privately-owned small and mid-sized enterprises across several sectors of the economy.

“Most surveyed companies are now experiencing unprecedented difficulties and have become increasingly pessimistic about business prospects for the next six months,” Li Wei, the economics professor at CKGSB who oversees the survey, said in a commentary accompanying the September survey results.

“For most, business has never been worse.”

In fact, one look at the ‘real’ economic data in China and it is evident that it has been disappointing for the longest period since 2015…

And while it is simple to build a narrative that this collapse in China’s economic data is due to Trump’s trade war (or anticipation of it), as Alhambra Investment Partners’ Jeffrey Snider notesChina’s recent RRR cut is all about eurodollar, not Trump’s trade war.

In other words, “stepped up support” for currency means reducing the reserve assets on the PBOC’s balance sheet (or, if you like, selling UST’s). Simple accounting requires either the PBOC to offset those losses with RMB program lending (which tends to be CNY negative), or to further shrink its liability side to match. Guess which one the central bank has chosen the past two years.

The RRR cut signals that the reserve problem therefore dollar problem is anticipated to grow worse. The PBOC is actually telling us that they expect in the months ahead the same or perhaps bigger commitment to “stepped up support.” CNY doesn’t need support if there is no worsening “capital outflow” situation of retreating eurodollar funding.

This will require more monetary contraction in bank reserves than we’ve already seen. The central bank is forecasting more problems ahead.

Chinese officials are trying to get ahead of that public channel monetary deficiency by offsetting it with unlocked private (meaning state-owned) bank reserves. Bank reserve growth will shrink and even contract outright, placing enormous importance on the domestic RMB system’s ability to effective use previously stored reserves in place of what the PBOC won’t be providing.

Because the dollars just aren’t flowing to China. They didn’t last year, either, at least not directly (HK) even though CNY rose as if everything was normalizing to globally synchronized growth. Take away the Hong Kong option, what’s left for the Chinese? Or for globally synchronized growth?

Like 2015, these RRR cuts are showing us the eurodollar condition. China’s money problems aren’t really Chinese. They are money problems.

 

4.EUROPEAN AFFAIRS

 

This is interesting: Luxury goods owner LVMH (owns Louis Vitton, Christian Fior and Dom Perignon)
is announcing good earnings despite a huge China slow down.  It seems that these luxury goods are cheaper overseas that in China so enterprising travelers are buying the goods overseas and selling them in China. China still have a huge business in the knock offs.
(courtesy zerohedge)

Luxury Stocks Crash After LVMH Confirms China Slowdown, Customs Crackdown

The stock of luxury consumer giant LVMH, owner of Louis Vuitton, Christian Dior and Dom Perignon, crashed as much as 8.4% in Paris – its biggest drop since January 2009 – and dragged down its luxury goods peers such as Ralph Lauren, Tapestry and Michael Kors lower, after the company warned of slowing demand for luxury goods in China and confirmed social-media speculation that Chinese customs authorities are cracking down on high-end goods purchased by returning travelers.

 

“The Chinese authorities have some laws that are being enforced with some more strength at times, which is what we’re seeing now,” LVMH CFO Jean-Jacques Guiony said on a call with analysts Wednesday, quoted by Bloomberg.

According to Bloomberg, social media reports last week that China is stepping up checks alarmed investors in companies ranging from LVMH to Japanese cosmetics giant Shiseido. Since then, the fashion companies’ stocks have suffered sharp declines on concerns about access to the Chinese market.

The selloff accelerated on Wednesday even after LVMH reported strong results, with sales growing 10%, in line with analyst forecasts and previous periods. Growth in the Louis Vuitton brand’s sales to Chinese customers slowed slightly, to a percentage in the middle teens, in the third quarter, Guiony said.

The CFO said that the stepped-up customs enforcement may be aimed at curbing China’s booming business in gray-market imports, where enterprising Chinese residents purchase Louis Vuitton bags and other luxury items on trips overseas for cheaper than they can be purchased domestically; then sell them at a profit when they return home, undercutting fashion companies’ own stores in China.

This parallel market, known as daigou, “is not something that we welcome or that we try to promote,” Guiony said, adding that the company limits the number of items that customers can buy at stores in Paris and other locations. “The Chinese moving in the same direction is good for us.”

Despite the risk of unauthorized arbitrage in LVMH’s goods, the company said it has no plans to equalize prices in China and abroad he said, adding that that gap narrowed over the summer because of a reduction in import duties.

The pain quickly spread to other luxury names after Morgan Stanley downgraded the luxury goods sector to “underweight” on Wednesday, adding to pressure on industry stocks.

The luxury sector “looks stretched on a number of our indicators even after the recent correction,” the bank’s analysts wrote adding that “a material slowdown in China presents the biggest risk to the sector,” highlighting “stretched” valuations in the luxury industry. The bank expects Chinese consumption trends to slow further in the second half of 2018.

LVMH – also home to couture label Givenchy and the recently revamped Celine brand, which it wants to big up under a new designer – has been among the biggest beneficiaries of the benign industry backdrop until now.

According to Pierre Willot, fund manager at Paris-based Montaigne Capital, “LVMH and Kering have had fantastic numbers in the past years – even if today’s numbers are still good, the market was hoping that the past outstanding growth trend would extend a few years longer.”

Alas, without Chinese consumers, the number one clientele for luxury goods manufacturers, that trends now appears to be over.

end

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

Saudi Arabia/Turkey

The Washington Post now publishes images of the Saudi journalist (dissident) walking into the Istanbul consulate but he never leaves as we was killed and dismembered

(courtesy zerohedge)

WaPo Publishes CCTV Image Of Saudi Journalist

Walking Into Istanbul Consulate

The Washington Post had previously sketched out all the ways that the scandal of its own allegedly murdered columnist Jamal Khashoggi could damage US-Saudi relations at a crucial time for crown prince Mohammed bin Salman, but late Monday we caught of a glimpse of just how much damage will be done given the White House and State Department’s first official statements: likely none at all.

On Monday President Trump for the first time addressed the Khashoggi disappearance and widely reported news about this murder by the Saudis at their consulate in Istanbul: I am concerned about that. I don’t like hearing about it and hopefully that will sort itself out.”

The president said further of rampant speculation over his disappearance: “Right now nobody knows anything about it. There’s some pretty bad stories about it. I do not like it.” And Vice President Mike Pence said he was “deeply troubled” over the reports.

Meanwhile, according to CBS News“The Washington Post published a surveillance image Tuesday showing its missing Saudi contributor walking into the Saudi Consulate in Istanbul a week ago, just before he disappeared. Turkish officials have said they fear the columnist was killed there, and announced on Tuesday that they would be searching the consulate as part of their ongoing investigation into Khashoggi’s disappearance.”

Last known photo of Khashoggi, who appears to be entering the Saudi consulate in Istanbul, obtained by the Washington Post.Adding to Trump’s it “will sort itself out” statement, the State Department addressed the Khashoggi issue with only few more words as it essentially called on Saudi Arabia — the presumed murders — to investigate themselves, as WikiLeaks aptly noted. The statements reads: “We call on the government of Saudi Arabia to support a thorough investiagtion of Mr. Khashoggi’s disappearance and to be transparent about the results of that investigation.”

WikiLeaks

@wikileaks

US State Department calls on the alleged murderers of Washington Post columnist and US resident #JamalKhashoggi, to investigate themselves, and to announce the result.

This was precisely the reaction of the State Department when Saudi Arabia bombed a packed school bus in Yemen in the early part of August, killing 25 children. At that time the US also asked for the Saudis to investigate themselves, and naturally nothing came of it.

In related news Thomas Friedman has written a strange column entitled Praying for Jamal Khashoggi — likely spurned by embarrassment over his prior fawning endorsement of MbS — wherein he pretends to have always been a wise longtime critic of Saudi Arabia.

While Friedman doesn’t at all rescind his earlier endorsement of MbS, he did manage to out Khashoggi as a prior source. Khashoggi, who is well-known to have had “insider” status in Riyadh, had been an “anonymous” source for Friedman’s prior commentary on MbS.

Sulome Anderson

@SulomeAnderson

No one knows for sure if Khashoggi is dead and Friedman revealed him as an anonymous source who provided quotes critical of the Saudi government with no concern for Khashoggi’s friends and family who could be targeted in retaliation. Unbelievably careless. https://www.nytimes.com/2018/10/08/opinion/jamal-khashoggi-missing-saudi-journalist.html 

Yet Friedman has decided to out his source even as Khashoggi’s fate is anything but settled.

Despite Turkish investigators believing that the Saudi journalist was brutally murdered inside the consulate, and his body cut into pieces after which it was taken in bags out of the embassy and flown back to Saudi Arabia, there’s much speculation that Khashoggi could have been kidnapped and is being detained much like last year’s Ritz-Carlton imprisoned princes ordeal.

Should it turn out that Khashoggi is still alive, Friedman’s outing Khashoggi as a prior anonymous source will be used against him and could serve to seal his fate.

Other journalists slammed Friedman for both his self-serving narrative and outing Khashoggi at this crucial time.

Nicole Gaouette

@NicoleCNN

So deeply irresponsible, not to mention unethical, to name Jamal Kashoggi as his anonymous source. Shame. Opinion | Praying for Jamal Khashoggi – The New York Times https://www.nytimes.com/2018/10/08/opinion/jamal-khashoggi-missing-saudi-journalist.html 

Members of a Turkish-Arab journalists association holding posters of Jamal Khashoggi at a protest on Monday near the Saudi consulate in Istanbul.

Opinion | Praying for Jamal Khashoggi

Saudi Arabia stands accused of killing him. If it did, it will be a disaster for the regime of Mohammed bin Salman.

nytimes.com

end

Unbelievable!! The USA knew of the Saudi plan and went along with it. Turkey releases footage of the “hit team”

(courtesy zerohedge)

US Intel Knew Of Saudi Plan To Abduct Missing

Journalist; Turkey Releases Footage Of “Hit Team”

Washington knew… and apparently did nothing, reports Bloomberg based on a bombshell Washington Post report:

U.S. intelligence services intercepted communications of Saudi officials discussing a plan to capture Saudi journalist and government critic Jamal Khashoggi, whose disappearance in Turkey last week threatens to damage the warm ties between the kingdom and Washington.

The Saudis were discussing a plan to lure Khashoggi back to the kingdom, The Washington Post reported, citing a person familiar with the communications, which were intercepted before he vanished. Khashoggi, a columnist for the newspaper, was last seen entering the Saudi consulate in Istanbul on Oct. 2 and is feared to be detained or dead.

For whatever reason, the Post report buried the lede as the story is headlined simply, Saudis are said to have lain in wait for Jamal Khashoggi.

But the story confirms US intelligence had clear evidence that the Saudi journalist and Washington Post columnist was about to be kidnapped and possibly worse. The WaPo story includes the following: “Before Khashoggi’s disappearance, U.S. intelligence intercepted communications of Saudi officials discussing a plan to capture him…”.

Authorities are not hunting for this black van seen in newly released CCTV footage airing on Turkish state television.And it now appears the long awaited evidence in the possession of Turkish authorities showing the Saudis to be behind journalist Jamal Khashoggi’s disappearance and alleged murder has been released.

Turkish media is now buzzing with multiple new developments which continue to piece together the allegations of Turkish investigators  that a 15-member team entered the country from Saudi Arabia for his “preplanned murder” as Khashoggi was visiting the Saudi consulate in Istanbul last week.

First, the Turkish newspaper Sabah has released what are purported to be names and photographs of the 15 Saudis who are suspected to be involved in the disappearance of the Saudi journalist.

Subsequent to Sabah’s publication of the names and photos, researchers were able to identify most of their occupations and recent locations.

The alleged group that entered the country on the day of Khashoggi’s disappearance included a Saudi special forces soldier, a lieutenant colonel in the Saudi Civil Defense, a forensic specialist, an air force officer, and at least one recent member of Saudi embassy staff stationed in the UK.

And further significant is that Turkish state media has published video footage and still frames of Saudi planes and agents landing just prior to the alleged crime, with several suspects passing through passport control  now being sought by authorities.

Turkey’s TRT World reports:

Turkey’s public broadcaster TRT World has obtained video footage which shows the Saudi government critic Jamal Khashoggi entering the Saudi consulate on October 2nd. The video also shows alleged Saudi planes and agents, whom Turkish officials want to investigate in relation to the dissident journalist’s disappearance.

Turkish police are reported to be searching for the black van shown in the CCTV camera footage exiting the consulate grounds after Khashoggi disappeared inside. TRT World reports: “Turkish officials want to know what’s in that van and where it is now.”

Sources close to the investigation believe the Saudi journalist and Washington Post columnist was “brutally tortured, killed and cut into pieces” and his body removed from the consulate.

The Washington Post has confirmed that two private planes from Riyadh touched down in Istanbul the day of Khashoggi’s disappearance, which corroborates the airport CCTV footage released by Turkey:

According to flight records, two privately owned planes flying from Riyadh arrived in Istanbul on Oct. 2, one before sunrise and the other in the late afternoon. A Turkish official linked the call signals of the two twin-engine Gulfstream IV planes to those that investigators believe carried the 15 Saudis. The planes are owned by Riyadh-based Sky Prime Aviation Services, according to public records.

And further:

The initial plane left Istanbul at 10:45 p.m. and made a stop about 280 miles to the east in Nallihan, Turkey. Then it skirted the border between Iraq and Iran, favoring the Iraqi side, and crossed over the Persian Gulf. It landed in Dubai at 2:30 a.m. The following morning, Oct. 3, it took off for Riyadh.

The Times (UK) now reports that this plane evaded search by Turkish police, who reportedly scrambled to locate the suspected hit team as they whisked out of the county. The Times report finds:

The Turkish authorities alerted to the disappearance of the journalist Jamal Khashoggi rushed to Istanbul airport to search a private jet but were too late to prevent it taking off for Riyadh. It had spent barely an hour on the ground before flying out again.

Another Saudi plane that had landed earlier that day, believed to be carrying members of a hit squad, was still on the tarmac and the authorities were able to board that craft — but found nothing of note, according to Turkish media.

With this amount of evidence piling on, Saudi officials — who have consistently denied any involvement in the journalist’s disappearance — will find it harder to stonewall further.

On Monday President Trump had for the first time addressed the Khashoggi disappearance, saying: “I am concerned about that. I don’t like hearing about it and hopefully that will sort itself out.”

Adding to Trump’s softball it “will sort itself out” statement, the State Department addressed the Khashoggi issue with only few more words as it essentially called on Saudi Arabia — the presumed murders — to investigate themselves, as WikiLeaks aptly noted. The statements reads: “We call on the government of Saudi Arabia to support a thorough investiagtion of Mr. Khashoggi’s disappearance and to be transparent about the results of that investigation.”

However, with Tuesday’s developments Trump will also feel the pressure to actually address the issue beyond mere “hopeful” words that it “will sort itself out”.

end
The gas conflict between Turkey and all over countries involved in the Israeli big Leviathan gas discovery. Israel discovered this massive find several years ago and now major players are bidding to develop the find.  Israel told Cyprus that the discovery was also into their waters. The problem is that Turkey does not recognize Cyprus at all and they are becoming quite bellicose trying to obtain badly needed gas reserves
(courtesy GEFIRA)

Deja Vu: The Gas Conflict Around Cyprus Is Getting

Worse

Via GEFIRA,

In early October, the Cypriot government invited tenders for gas extraction in Block 7. Ankara believes that this step impairs the interests of both Turkey and the Turkish Cypriots and announced that remedial measures will be taken, which might entail an escalation of tensions in this region of the Mediterranean.

Turkey neither recognizes Cyprus’s maritime borders nor the agreements its exclusive economic zones. Nicosia manages the gas exploration in the waters it considers its own. This leads to a conflict about which the Gefira Team is reporting on a regular basis. In February we described the complex situation in connection with the gas blocks around Cyprus.

Then the Turkish navy stopped the exploration ship of Italian Eni from entering Cyprus’ territorial waters by threatening to sink it. In response, Rome sent its own ships to the region.

So far, the dispute concerned the southern and eastern basin around Cyprus. Last week Nicosia invited tenders for gas exploration in Block 7, which could be another casus belli, because Blocks 1, 4, 5, 6 and 7 are crossed by the Turkish-Egyptian border, recognized by Turkey. Cyprus, however, in 2003 concluded an agreement with Egypt regarding the Exclusive Economic Zone (EEZ), which Ankara does not honour.

The Turkish government is of the opinion that both the Turkish authorities and North Nicosia (the capital of Northern Cyprus) have the right to decide on the exploitation of these sectors.

Turkey’s Ministry of Foreign Affairs issued a statement, in which it says that:

  1. mining in Block 7 cannot take place without Turkey’s consent due to the sea border passing there;
  2. Cypriot Turks are co-owners of the island and hence of its natural resources at the bottom of territorial waters;
  3. unilateral invitation of tenders by Nicosia violates the interests of Northern Cyprus and Turkey;
  4. Ankara will take steps to protect its rights and those of Turkish Cypriots, including the blocking of the third party’s exploration

We expect that if the Turkish Navy again blocks the exploration vessel of the Italian Eni, or the French TOTAL, or the American Exxon-Mobil (these companies were invited to take part in the tender), the reaction of the governments of the respective countries will be stronger than it was in February.

 

6. GLOBAL ISSUES

Your most important paper. Goldman delves into the latest BIS report and they have sounded the alarm bell on a derivate volcano blowing up;  the big reason:  Europeans plus Japanese can no longer get swaps in order to buy USA bonds.  The cost of acquiring the swaps exceeds the yields.

Now the big question: who will buy the huge 1.8 trillion of USA bonds that need to be funded this year

(David Goldman/Asia Times

 

Has The Derivatives Volcano Already Begun To Erupt?

Authored by David Goldman via The Asia Times,

The cure for the last crisis always turns into the cause of the next one…

The economies of southern Europe – Greece, Italy, Spain and Portugal – nearly collapsed in 2011, and Europe’s monetary authorities responded with negative interest rates. So did Japan.

Europeans and Japanese pay to hold cash or own 10-year German government bonds, which means that every pension fund and insurer will fold in a finite time horizon. They responded by exporting more, saving more, and buying American assets that still pay a positive, if low, real yield.

Hedging the foreign exchange risk in this half-trillion-dollar per year business has exhausted the balance sheet of the global banking system. That explains a large part of the jump in the US 10-year note yield to 3.2% last Friday from 2.85% in early September. Hedging the foreign exchange risk in these massive flows created a derivatives mountain, and it has started to spew smoke and lava.

Banks are rationing foreign-exchange swap lines, making hedges so expensive that German and Japanese investors can no longer afford to buy US bonds. If the foreign bid for US debt dries up, the cost of financing America’s $1 trillion annual budget deficit will rise, and so will interest costs around the world.

The mechanics of hedging trillions of dollars of capital flows are complex, but the economics are simple.Germany and Japan together export half a trillion dollars a year of goods and services more than they import. America imports more than half a trillion dollars of goods and services more than it exports.

Germany and Japan have negative real interest rates, so their investors buy American bonds at positive real interest rates. But Germans and Japanese have to pay out Euros and yen, not dollars. They go to their banks to swap dollar income into local-currency income. The banks borrow dollars in the United States, sell them in the forward market and receive Euros and yen.

European banks are running out of borrowing capacity. After five years of negative short-term rates, their profitability is low, their stock prices are falling and their credit is deteriorating. They can no longer borrow the dollars required to construct the hedges that local investors need.

Foreign exchange derivatives form the biggest mountain of obligations in the world financial system – a notional amount of about $90 trillion, up from $60 trillion in 2010. Breaking down the numbers, Bank for International Settlements (BIS) economists showed that the foreign exchange derivatives taken on by non-financial corporations tracked the growth of world trade, and the derivative obligations of nonbank financial institutions – money managers and insurance companies – tracked international securities investments (see chart below).

The BIS economists led by Robert McCauley note that non-US banks now owe $10.7 trillion in US dollars, most of which reflects the hedging requirements of these global flows. The banks don’t report foreign exchange swaps with their customers on their balance sheets, but the BIS estimates that these obligations amount to $13 or $14 trillion.

The US

For more than one year, international bank regulators and the International Monetary Fund have warned that the banking system no longer can support these enormous flows. The Federal Reserve is tightening liquidity in the US, and in a volatile market, European banks might not be able to roll over nearly $11 trillion of short-term obligations – and might default.

As the BIS warned in September 2017:

The combination of balance sheet vulnerabilities and market tightening could trigger funding problems in the event of market strains. Market turbulence may make it more difficult for banks to manage currency gaps in volatile swap markets, possibly rendering some banks unable to roll over short-term dollar funding. Banks could then act as an amplifier of market strains if funding pressures were to compel banks to sell assets in a turbulent market to pay their liabilities that are due.

Funding pressure could also induce banks to shrink dollar lending to non-US borrowers, thus reducing credit availability. Ultimately, there is a risk that banks could default on their dollar obligations.

The market turbulence of which the BIS warned in its September 2017 quarterly report is now upon us:Italy’s populist government threatens to increase the country’s sovereign debt, already at an unsustainable 130% of GDP. Yields on Italy’s debt have soared, and bank stocks have collapsed.

The creditworthiness of some of Europe’s largest banks has deteriorated. In the case of Deutsche Bank, the cost of hedging against bond defaults over the next five years has doubled since the Italian crisis erupted in May.

As the credit of European banks deteriorates, US regulators require American banks who lend to them to put up more reserves against their exposure. That raises the cost of refinancing the $12 trillion or so of European bank borrowings from American banks, and it probably has led to a reduction in credit lines. European banks, in return, have to charge exorbitant rates to customers for hedging.

The crunch hit at the end of the third quarter, when European banks’ short-term credit line in US dollars had to be renewed. Data for the volume of interbank lending aren’t available yet, but the cross-currency “basis swap” between Euros and US dollars – the spread that banks charge their customers for expanding their balance sheets to provide foreign exchange hedges – suddenly widened.

The 0.3%, or 30 basis points, shift in the so-called basis swap was big enough to wipe out any advantage that European investors might obtain from buying US dollar securities and swapping the cash flows back into euro.

Meanwhile, Deutsche Bank researchers noted in an October 3 report: “On 27 September, the cost of dollar-denominated forex-hedged investments from Japan jumped to 315bp, the highest level since the 2008 financial crisis .”

Effectively, that wiped out the incentive for Japanese investors to buy US bonds. Japanese 10-year notes yield about 0.14% and US Treasuries yield 3.23%, so the 3.15% cost of hedging wipes out the yield advantage for Japanese investors. The reason for the shift was a 0.46% jump in the yen-dollar basis swap in a single business day. Dollar loans are getting scarce for Japanese banks as well.

If overseas investors can’t recycle the half-trillion-dollar US current account deficit into dollar-based securities because the banking system can’t provide the foreign exchange hedges, US yields will rise, perhaps sharply. It will be harder for the US Treasury to borrow the $1 trillion it requires each year, and the cost of debt service will add to the US budget deficit – every 1% increase in borrowing costs adds $200 billion in debt service to the budget.

I doubt that European governments would allow their banks to default on dollar obligations; long before that could happen, European regulators would arrange shotgun mergers and emergency recapitalizations. But the risk remains that dollar credit will seize up globally, with disastrous consequences for countries that have to borrow dollars to cover deficits.

end

7  OIL ISSUES

Oil slumps sto 2 week lows after a huge crude build

(courtesy zerohedge)

 

WTI Slumps To 2-Week Lows After Biggest Crude Build In

20 Months

After holding around $75 yesterday amid storm news as Hurricane Michael shut more offshore oil platforms and the International Energy Agency warned that the global market is entering a “red zone,” today saw risk-off sentiment slam it lower, back below $73 ahead of tonight’s API data.

Globally, supplies from Iran and Venezuela have been shrinking, creating a “risky situation” for the world economy, said IEA Executive Director Fatih Birol.

Gulf operators shut 718.9k b/d of oil production (around 42%), 89 platforms evacuated amid Hurricane Michael, BSEE says in notice.

“Yesterday there was some concern about more extensive losses of production due to Hurricane Michael,” said John Kilduff, partner at Again Capital LLC. “Now that the oil infrastructure is in the clear, this weeks EIA report will help ease concerns once we see a build printed.

API

  • Crude +9.75mm (+2.5mm exp) – biggest build since Feb 2017
  • Cushing +2.3mm (+800k exp) – biggest build since March 2018
  • Gasoline +3.4mm – biggest build since June 2018
  • Distillates -3.5mm – biggest draw since May 2018

Storm-related impact should not be present in this data but after last week’s huge crude build we saw another massive crude build…

 

Bloomberg notes that sanctions on Iranian oil exports are hitting much harder than most people predictedas the Trump administration takes a tough line on enforcement, said executives from the world’s largest energy traders. However, Saudi Aramco will supply about 4 million barrels of additional crude to Indian customers for November, according to a person familiar with the matter. That’s on top of their monthly contractual supplies from Aramco.

“The market is just struggling with the expectation of the reduction in Iranian exports combined with physical evidence in the U.S. that inventories are rising,” said Kyle Cooper, a consultant at Ion Energy Group LLC.

WTI hovered below $73 ahead of tonight’s API data and kneejerked lower as the data hit…

Western Canada Select’s discount to West Texas Intermediate crude widened to $50 a barrel on Tuesday, the widest on record…

The plunge in Canadian crude prices may dent exploration budgets and shrink the nation’s rig fleet, according to the chief executive officer of a major drilling contractor. The discount on Canadian crude will hammer cash flow, Precision Drilling Corp. CEO Kevin Neveu said at an event in Calgary.

With Canada’s debt and equity markets “almost closed” to energy producers, cash is the sole source of funding for drilling, he said.

“If cash flows get crimped back on a quarterly basis or a daily basis by the widening differential, they would adjust their rig counts sometimes even weekly,” Neveu said.

8. EMERGING MARKETS

BRAZIL

end

 

 

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

Euro/USA 1.1493 DOWN .0012 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  IN THE  RED 

 

 

 

USA/JAPAN YEN 113.25  UP 0.235  (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 1.3191 DOWN   0.0005  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.29971  UP .0033 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 WEDNESDAY morning in Europe, the Euro FELL; by 12 basis point, trading now ABOVE the important 1.08 level FALLING to 1.1526; / Last night Shanghai composite CLOSED UP 4.82 POINTS OR 0.14%

 

//Hang Sang CLOSED UP 20.16 POINTS OR 0.05%

 

/AUSTRALIA CLOSED UP  0.14% / EUROPEAN BOURSES ALL RED

 

The NIKKEI: this WEDNESDAY morning CLOSED UP 36.65 POINTS OR 0.16%

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED ALL RED

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 20.16 POINTS OR 0.05%

 

/SHANGHAI CLOSED UP 4.82 POINTS OR 0.14%

 

 

 

Australia BOURSE CLOSED UP 0.14%

Nikkei (Japan) CLOSED UP 36.65 POINTS OR 0.16%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1186.60

silver:$14.33

Early WEDNESDAY morning USA 10 year bond yield: 3.23% !!! UP 0 IN POINTS from TUESDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

The 30 yr bond yield 3.40 DOWN 1  IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)/

USA dollar index early WEDNESDAY morning: 95.74 UP 8  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

disregard data from here down!!

I was unable to retrieve it….

And now your closing WEDNESDAY NUMBERS \1: 00 PM

 

Portuguese 10 year bond yield: 1.94% UP 2    in basis point(s) yield from TUESDAY/

JAPANESE BOND YIELD: +.16%  UP 1  BASIS POINTS from TUESDAY/JAPAN losing control of its yield curve/EXTREMELY VOLATILE YESTERDAY…DANGEROUS!!

SPANISH 10 YR BOND YIELD: 1.61% UP 3 IN basis point yield from TUESDAY/

ITALIAN 10 YR BOND YIELD: 3.51 UP 9   POINTS in basis point yield from TUESDAY/

 

 

the Italian 10 yr bond yield is trading 190 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES UP TO +.55%   IN BASIS POINTS ON THE DAY//

 

END

IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.1542 UP .0037 or 37 basis points

 

 

USA/Japan: 112.76 down 262 OR 26 basis points/

Great Britain/USA 1.3208 UP .0051( POUND UP 51 BASIS POINTS)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was ROSE BY 37 BASIS POINTS  to trade at 1.1542

The Yen rose to 112.76 for a gain of 26 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 GAINED 51 basis points, trading at 1.3208/

The Canadian dollar lost 51 basis points to 1.2989

 

 

The USA/Yuan,CNY closed UP AT 6.9242-  ON SHORE  (YUAN UP)

THE USA/YUAN OFFSHORE:  6.9275 (  YUAN DOWN)

TURKISH LIRA:  6.0421

the 10 yr Japanese bond yield closed at +.16%

 

 

 

Your closing 10 yr USA bond yield DOWN 1 IN basis points from TUESDAY at 3.22 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.39 DOWN 1 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, 95.38 DOWN 29 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 WEDNESDAY: 1:00 PM 

London: CLOSED DOWN 91.85 POINTS OR 1.27%

German Dax : CLOSED DOWN 264.72 POINTS  OR 2.21%
Paris Cac CLOSED DOWN 112.33 POINTS OR 2.10%
Spain IBEX CLOSED DOWN 97.60 POINTS OR 1.05%

Italian MIB: CLOSED DOWN:  343.21 POINTS OR 1.71%/

 

 

WTI Oil price; 72.95 1:00 pm;

Brent Oil: 83.46 1:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    66.63  THE CROSS HIGH BY .39 ROUBLES/DOLLAR (ROUBLE LOWER by 39 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  6.0421 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD RISES +.55 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:72.83

 

BRENT:82.70

USA 10 YR BOND YIELD: 3.18%

USA 30 YR BOND YIELD: 3.36%/

EURO/USA DOLLAR CROSS: 1.1523 ( UP 19 BASIS POINTS)

USA/JAPANESE YEN:112.34 DOWN .683(YEN UP 68 BASIS POINTS/ .(LACK OF FOR.EXCHANGE SWAPS)

USA DOLLAR INDEX: 95.51 DOWN 16 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3190 UP 34 POINTS FROM YESTERDAY

the Turkish lira close: 6.0773

the Russian rouble:  66.89 DOWN 0.65 Roubles against the uSA dollar.( DOWN 65 BASIS POINTS)

 

Canadian dollar: 1.3049 DOWN 100.2 BASIS pts

USA/CHINESE YUAN (CNY) : 6.9242  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.9255 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.55%

 

The Dow closed  DOWN  831.83 POINTS OR 3.15%

NASDAQ closed DOWN 315.96  points or 4.08% 4.00 PM EST


VOLATILITY INDEX:  122.96  CLOSED UP  7.01

LIBOR 3 MONTH DURATION: 2.420%  .LIBOR  RATES ARE RISING/big jump today

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

TRADING IN GRAPH FORM FOR THE DAY

 

“Markets In Turmoil”: FANG Freefall Sparks Longest

Losing Streak Of Trump Era

Update: After the ugliest day in years, things got uglier after-hours…

Dow futures are now down 1000 points…

And Nasdaq futures down 5%!!

This is the worst day for Nasdaq Futures since 2011…

*  *  *

Well that escalated quickly…

China was “stable” overnight (but won’t be when it opens tonight)...

European stocks were pummeled lower today…

In Italy, Ferrari and Pirelli plunged and were halted Limit-down... with China cracking down on luxury goods and broader auto fears…

EU and US Autos have plunged…

 

 

With Ford trading with an $8 handle at its lowest since Nov 2009

 

S&P longest losing streak since Nov 2016… Nasdaq down 4% worst day since Brexit…

Today is the fifth straight day of losses in the S&P 500. That’s the longest streak of declines since President Trump was elected. Even the correction in the February and the retest in March didn’t go in a straight line like this.

October…

 

Dow drops over 800 points at its lows and appears to confirm the double top…

Trannies are now red YTD…

 

Technical Levels are falling like flies…

  • Dow < 50DMA
  • S&P < 100DMA
  • Nasdaq < 200DMA
  • Small Caps < 200DMA
  • Transports < 200DMA

 

Tech stocks took in on the chin…

FANG was proper f++ked…

 

NFLX and FB now in bear markets (down over 20% from highs), FB down over 10% from highs…

 

Equity market breadth is a disaster…

 

VIX spiked above 22…

 

The VIX term structure is the most inverted since April

Quite a shift in the last week…

 

Before we leave stocks – here are a few charts to help put the move in the S&P in context…

Hedge Funds…

Financials…

Semis…

Homebuilders…

Autos…

Materials…

Dr.Copper…

And the real economics PhD – Dr. Lumber…

And finally, Credit markets are starting to get monkey-hammered…

And in case you’re wondering what’s holding up the S&P…

 

Despite credit and equity carnage, bonds were not ‘safe haven’ bid as the long-end reversed yesterday’s gains…but as stocks accelerated lower, bonds did catch some buying, leaving the entire curve lower in yield on the week…

 

However, we do note that today’s selling pressure failed to make a new 30Y high (yield)…for the first time in 8 days

 

The yield curve reversed steeper today, erasing yesterday’s flattening…

 

NOTE – 10Y Yields dropped notably in the last hour as selling accelerated in stocks…

 

The market is still not buying what The Fed is selling…

 

The Dollar Index managed a small gain on the day but had another roundtrip session…

 

Offshore Yuan tumbled…

 

Cryptos are generally unch on the week aside from Ripple’s Collapse…

 

Crude and Copper were clobbered as PMs caught a safe haven bid…

 

Finally, we note that the Fear-and-Greed index has swung from the latter to the former in near record time…

Source

1987? Or The Titanic?

 

We give the last word to an old friend who seemed to nail things perfectly…

 

end

market trading/after hours:

As I promised my good friend Jeff M, that the market would continue to collapse:

(zerohedge)

 

Carnage Continues After-Hours – Dow Down 1000 Pts,

Nasdaq Collapses 5%

After the ugliest day in years, things got uglier after-hours…

Dow futures are now down 1000 points…

 

 

And Nasdaq futures down 5%!!

This is the worst day for Nasdaq Futures since 2011…

end

market data/trading

Both wholesale inventories and wholesale sales were very strong in the 4th quarter and that will help Trump dramatically in the 4th quarter GDP numbers which may except 45

(courtesy zerohedge)

 

Wholesale Inventories Surge The Most In 5 Years

After two consecutive months of disappointing wholesale business data, with both inventories and sales reporting disappointing prints in June and July, the August wholesale data surprised strongly to the upside, confirming that the trade war-impacted summer lull may have been a one-time event.

With expectations for an unchanged 0.8% print in wholesale inventories, the latest number came in stronger than expected, printing at 1.0%, and the biggest monthly jump since October 2013.

Meanwhile, alongside the rebound in inventory accumulation ahead of what businesses believe will be a strong Q4, wholesale sales also ticked up, rising from an upward revised 0.2% (originally 0.0%) to 0.8%, also beating the consensus print of 0.5%, and indicating that US businesses are once again humming.

And so while much of the rest of the economy continues to hum along, gliding on Trump’s fiscal stimulus, after two disappointing months of wholesale data, the recent weakness appears to have faded into the rearview mirror as business ended summer with a bang, and numbers which will provide an upward revision to Q3 GDP, while pouring even more gasoline on the Fed’s tightening narrative.

USA economic/general stories
Hurricane Michael will be the strongest Hurricane to hit the USA in 14 years.  It is now a category 4
two commentaries
(courtesy zerohedge)

“Life-Threatening” Michael Strengthens To Category 3 Hurricane Ahead

Of Wednesday Landfall

Just hours after President Trump approved Florida’s Emergency Declaration, Hurricane Michael grew into a major Category 3 storm just one day before its expected arrival on Florida’s Gulf Shore.

Tyler Sebree@TylerABC57

My goodness. This is extreme. #Michael is in literal beast mode, with additional strengthening looming as the center pressure continues falling. #FLwx #GAwx #ALwx

“If you don’t follow warnings from officials this storm could kill you,” said Scott, a Republican running for the U.S. Senate in November’s congressional elections.

Jack Sillin | weather.us@JackSillin

Sunset on #Michael is simply stunning this evening as intense thunderstorms wrap around the core https://weather.us/satellite/869-w-261-n/satellite-superhd-1min/20181009-230300z.html#play2 . Aircraft recon data continues to show a strengthening storm. Preparations on the #FLwx coastline near Panama City need to be rushed to completion now! #wetter

Ed Vallee notes that Michael is “still expected to make landfall close to Panama City, FL midday Wednesday as a major hurricane. Final preparations need to be rushed to completion TODAY.”

Ed Vallee 🌽 Vallee Wx Consulting 🌾

@EdValleeWx

#Michael is still expected to make landfall close to Panama City, FL midday Wednesday as a major hurricane. Final preparations need to be rushed to completion TODAY.

Reuters reports that tens of thousands of coastal residents are in the process of fleeing to higher groundto avoid the towering waves and roof-shredding winds.

But that might not enough, as Ed Vallee points out that gusts will be strong for the interior… unleashing potentially devastating waves of seawater as high as 12 feet

Ed Vallee 🌽 Vallee Wx Consulting 🌾

@EdValleeWx

NWS MAX WIND GUSTS as #Michael moves inland:
~Coastal FL, far SW GA: gusts 80-100mph
~S GA, coastal Carolinas: Gusts 40-60mph.
~Interior GA-NC: 20-40mph.

By tonight, Michael was already causing major disruptions to U.S. oil and gas production (shutting in around 40% of production) as it churned north over the Gulf of Mexico, and coastal flooding had begun along the Northern gulf coast from wave run up, high tides and a steady E to ESE wind.

At latest report, the NHC said the storm was packing sustained winds of up to 120 miles per hour (195 km per hour), jumping from a Category 2 to Category 3 hurricane on the five-step Saffir-Simpson wind scale.

As Reuters explains, winds of that magnitude can inflict substantial damage to roofs and walls of even well-constructed homes, according to the National Weather Service.

The storm also is likely dump prodigious amounts of rain over Florida, Alabama, Georgia and the Carolinas – still recovering from severe flooding last month in the aftermath of Hurricane Florence. Up to a foot of rainfall (30 cm) is forecast for some areas.

“This is a storm that is going to be life-threatening in several ways,” said Bo Patterson, the mayor of Port St. Joe, Florida, whose small beachfront town lies directly in the storm’s projected path.

Florida Governor Rick Scott said Michael was expected to be “the most deadly, destructive storm to the panhandle in decades.”

END

“A Once In A Lifetime Event”: Michael Will Be The Strongest Hurricane

To Hit US In 14 Years

Update (9 am ET): Hurricane Michael continued to strengthen Wednesday morning, as the Category 4 storm’s wind speed increased to 145 mph. The storm is now poised to be the strongest to hit the US in 14 years, boasting a life threatening storm surge and the potential to cause $16 billion in damages.

The storm is now roughly 90 miles southwest of Panama City and is heading north at 13 miles per hour, according to the NHC’s latest update. The storm’s outer bands are already battering the coastal town of Apalachicola with winds of nearly 50 mph.

As it stands, the storm is also poised to be the strongest to hit the Florida panhandle and big bend since meteorologists first started gathering data. Regional ports have closed in anticipation, and more than 230 flights have been canceled. Duke Energy Corp., a utility that supplies electricity to the region, expects more than 200,000 customers in the state will be without power. In preparation for the widespread outages, local utilities have about 19,000 workers on stand by ready to work to quickly restore power, with more workers pouring in from out of state. Still, some areas are expected to be without power for more than a week, per the Daily Commercial.

“A storm like this could be a once-in-a-lifetime event,” said Brett Rathbun, a meteorologist with AccuWeather Inc. in State College, Pennsylvania. “Winds of this intensity can really knock down any tree or structure in its path.”

There are also 3,500 National Guard members, 1,000 rescue workers and 3,000 FEMA employees in the area ready to aid in the response. Michael is whipping up waves as high as 30 feet in the Gulf and could bring a 14-foot surge and 4 to 8 inches of rain, with some isolated areas getting as much as 12 inches.

BBG

* * *

As residents of the Florida panhandle and big bend scrambled to flee their homes, Hurricane Michael strengthened to a Category 4 Hurricane overnight, putting it on track to rival the strongest storms to ever make landfall in that part of the country.

As one meteorologist pointed out, if Michael doesn’t weaken before making landfall late Wednesday, it would surpass Hurricane Eloise, which wrecked the panhandle in 1975, and the Pensacola Hurricane of 1882 for strongest winds ever recorded for a landfall in the panhandle. If the storm’s 140 mph+ wind speeds are maintained, Michael could be the strongest storm to hit the area since the dawn of record-keeping in 1851. 

While Florida residents are somewhat accustomed to record-breaking storms, according to the Weather Channel, “no long-time residents of this area will have seen a hurricane this strong before.” Stores in the region have started rationing supplies like water and generators as residents have scrambled to stock up while state of emergencies have been issued in Florida and Alabama. The National Weather Service described the storm as “extremely dangerous.”

Hurricane warnings are in effect for the Florida Gulf Coast from the Alabama-Florida border to Suwanee River, Fla. This includes Pensacola, Panama City, Destin and Tallahassee. Warnings also extend inland to southwestern Georgia, including Albany. Hurricane Warnings are issued a day-and-a-half before the anticipated arrival of tropical storm force winds. Nearly 4 million people live in these areas, while another 8.5 million live in areas facing tropical storm warnings.

Michael

Emergency officials in Bay County, Florida – where Michael is expected to make landfall – said they are already witnessing deteriorating conditions due to the storm.

Mike

Amid warnings for residents to “get out” while they still could, Florida Gov. Rick Scott described Michael as a “monstrous storm”…

…and issued mandatory or voluntary evacuation orders in at least 22 counties on the Florida Gulf Coast.

Empty

Scott also extended a state of emergency to 35 counties and activated 2,500 National Guardsmen. Georgia and Alabama have also declared states of emergency.

“Hurricane Michael is forecast to be the most destructive storm to hit the Florida Panhandle in decades,” Scott said. “You cannot hide from storm surge, so get out if an evacuation is ordered,” per CNN.

Along the North Florida coastline, the extreme danger will be storm surge. Gulf water will be pushed over the land at extreme depths – perhaps 10 feet or more – to the right of where the center comes ashore. “It will not be survivable in the affected coastal locations”, according to ABC’s Local 10 news.

A storm surge warning is in effect for much of the panhandle and big bend, where waves could measure between 9 to 13 feet above ground level, causing land along the coast to sink into the ocean as water climbs “over the roofs of houses,” Scott said.

Storms

President Trump has approved a pre-landfall emergency declaration to offer federal money to affected areas.

Warning

Here’s a roundup of storm-related warnings, courtesy of the Weather Channel:

Tropical storm warnings are in effect from the Alabama/Florida border westward to the Mississippi/Alabama border, from Suwannee River, Florida, southward to Chassahowitzka, Florida, and along the Southeast coast from Fernandina Beach, Florida, to Surf City, North Carolina. The tropical storm warning also extends inland to portions of southern Alabama and southwestern Georgia, including Mobile, Alabama, and Valdosta, Georgia. This means tropical-storm-force winds are expected somewhere within the warning area within 36 hours.

Tropical storm watches have been posted from Chassahowitzka, Florida, to Anna Maria Island, Florida, including Tampa Bay, from the Mississippi/Alabama border westward to the mouth of the Pearl River and also along the Southeast coast from South Santee River, South Carolina, to Duck, North Carolina, including Pamlico and Albemarle sounds. This means tropical-storm-force winds are possible within 48 hours.

Already, hurricane strength winds have started whipping the panhandle, forcing the National Weather Service has issued a tornado watch.

Closer to the center of the storm, which is now within 120 miles of Panama City, Fla., meteorologists have measured winds of more than 140 mph.

Between Tyndall Air Force Base and Keaton Beach, heavy rainfall is expected across a large portion of the southeastern US along Michael’s track, with the rains expected to stretch well inland. Meanwhile, storm surge watches, which means life-threatening surges remain a possibility, are in effect from Anclote River to Anna Maria Island, as well as Tampa Bay.

Michael is expected to inundate a large portion of the southeastern US with rain, with up to 12 inches falling in the panhandle and big bend, as well as southeastern Alabama and southern Georgia. Some parts of the Carolinas, which are still recovering from Hurricane Florence, and southern Virginia could endure up to six inches of rain.

Rain

…As the storm moves inland this week.

Michael

Residents and business that are within the areas under mandatory evacuation order have only “a few precious hours” left to prepare before the storm’s landfall. Most customers in the hurricane’s path will likely lose power during the storm, and utilities aren’t certain how long it will take for power to be restored. Outages may extend into east Georgia, southeastern Alabama, the Lowcountry of South Carolina and southeast North Carolina given Michael’s faster movement.

Outages

The storm’s outer bands have already soaked parts of the Florida Keys. To put Michael in context, only three Category 3 or higher storms have struck the Panhandle since 1950: Eloise in 1975, Opal in 1995 and Dennis in 2005. Six airports in the Florida panhandle have closed ahead of the storm, while 40% of oil production in the Gulf has been shuttered ahead of the storm, helping to keep WTI crude prices elevated around $75 a barrel, as Michael has become “the top concern for the oil market this week,” per one analyst. 

end

Trump will finally get his wall as a 23 billion funding will be introduced this week

(courtesy zerohedge

$23 Billion Bill To “Fully Fund” Border Wall To Be Introduced This Week

House Majority Leader Kevin McCarthy plans to introduce a bill this week that will fully fund President Trump’s much-promised border wall, according to an exclusive report by Breitbart.

Border wall prototypes (Getty)The “Build the Wall, Enforce the Law Act” would allocate $23.4 billion on top of the $1.6 billion already spent in order to build the wall the rest of the way, as well as provide for a “variety of enforcement measures.”

McCarthy said in a statement to Breitbart News that: “President Trump’s election was a wakeup call to Washington. The American people want us to build the wall and enforce the law. Maintaining strong borders is one of the basic responsibilities of any nation. For too long, America has failed in this responsibility.”

On Monday, outgoing House Speaker Paul Ryan hinted that there would be a post-midterms border wall funding fight, saying: “We intend on having a full-fledged discussion on how to complete our mission to secure the border, and yes, we will have a fight about this.

“Given that this new bill comes from the Majority Leader, McCarthy, and this bill contains several other measures already passed by the House with high margins of success, its prospects for passage are promising,” writes Breitbart‘s Matt Boyle.

The enforcement measures expected to be in this wall funding legislation include, among other legislation, Kate’s Law, an enforcement bill named for Kate Steinle, who was killed in sanctuary city San Francisco in the lead-up to the 2016 presidential election. Kate’s Law passed the House 257-167 last year. Also included will be a bill the House has already passed targeting sanctuary cities, the No Sanctuary for Criminals Act, which passed the House last year 228-195. The Criminal Alien Gang Member Removal Act, which passed the House last year 233-175, will be in the bill, as will two House resolutions on immigration that passed the House this year: one upholding and honoring Immigration and Customs Enforcement (ICE) officers, the other admonishing illegal alien voting in a number of American cities. -Breitbart

The forthcoming bill will not address Deferred Action for Childhood Arrivals (DACA) cases – which will give Democrats significantly less ammunition to derail the effort.

McCarthy will travel on Wednesday to the US border with Mexico to meet with Border Patrol agents, where he will also receive a briefing from Border Patrol officials on operations and threat assessments.

While the bill will probably pass through the House with little trouble, the Senate should prove to be a bit more daunting – as Republicans only have a 51-49 majority, and would need 60 votes to clear a filibuster hurdle on a cloture vote – unless Senate Majority Leader Mitch McConnell changed the Senate rules – which he has been thus far hesitant to do amid enormous pressure.

But that’s where things get interesting, as Republicans could pick up as many as five or more extra Senate seats in the midterm elections depending on how a variety of races shake out–meaning they would be much closer to that 60-vote threshold making it easier to roll the necessary Democrats and get the votes required to clear the cloture hurdle of 60 votes and get a bill like this to the president’s desk so he can sign it. -Breitbart

That said, Republicans wouldn’t have those key votes until January, 2019 – and that’s assuming the Democrats’ “blue wave” crashes on the rocks. “that means whatever the House passes in late 2018 for it to become law unless the Senate goes for it this year would need to be passed again in early 2019,” writes Boyle.

Red wave? 

With a variety of post-midterm threats levied by Democrats – including launching investigations and impeachment proceedings against both President Trump and Justice Brett Kavanaugh, Republicans who want to see the wall go up will have an additional incentive to head to the polls.

A vote for a Republican is a vote for the wall, in other words, as the House GOP will need to hold its majority going into the next Congress to ensure that this border wall funding makes it to the president’s desk. If Democrats take the House on November 6, a newly reminted Speaker Nancy Pelosi most certainly would not support funding the wall along the border–which, in turn, makes the midterms a referendum on the wall because if Republicans hold the House and add seats in the Senate, they can get the votes necessary to get full wall funding to Trump’s desk in early 2019. -Breitbart

In short – if you want the wall, go out and vote on November 6.

END
Another bricks and mortar operation finally kicked the bucket as Sear is preparing to file for bankruptcy protection this week.
(courtesy zerohedge

Sears Preparing To File Bankruptcy As Soon As This Week

The neverending saga of the world’s longest melting ice cube, that of Sears Holdings which has flirted with bankruptcy for years only to get bailed out in the 11th hour by its biggest investor and CEO Eddie Lampert each and every time, is finally coming to its logical end.

With its stock crashing to a new all time low, and with a $134 million in debt due on Monday on a bond issue that is currently yielding over 1,000% in the 3 or so business days left to maturity…

… the iconic if cash-strapped Sears Holdings, whose predecessor was the de facto originator of “online” retail with its innovative mail order catalogues, and which has been losing money for years, has hired M-III Partners to prepare a bankruptcy filing that could come as soon as this week, the WSJ reported citing people familiar with the situation, as the cash-strapped company that once dominated American retailing faces a debt payment deadline.

The WSJ reports that employees at M-III Partners, a boutique advisory firm, have spent the past few weeks working on the potential filing, with M-III staff seen at the retailer’s headquarters in Hoffman Estates, Illinois. That said, a Chapter 11 may still be avoided as Sears “continues to discuss other options and could still avert an in-court restructuring.”

Furthermore, Eddie Lampert, the hedge-fund manager who is Sears’s chairman, chief executive, largest shareholder and biggest creditor, may once again simply rescue the company, as he has done on many occasions in the past by making the payment. What’s different this time, is that Lampert is pushing for a broader restructuring that would include shaving more than $1 billion from Sears’s $5.5 billion debt load, selling another $1.5 billion of real estate and divesting $1.75 billion of assets, including the Kenmore appliance brand, which he has offered $400 million to buy himself. Said otherwise, Lampert hopes to shrink Sears back to profitability with the company already closing hundreds of stores in recent years.

Unfortunately for the billionaire, a key stakeholder group is resisting efforts to continue business as usual: as a result of the company’s poor financial performance, its creditors have refused to support his out of court restructuring plan, which would leave bankruptcy as the only option.

One can’t exactly blame the company’s lenders for being skeptical: Sears has lost more than $11 billion since 2011, and its annual sales have dropped nearly 60% in that period to $16.7 billion. Analysts say it needs to raise more than $1 billion a year to stay afloat.

Desperate to avoid losing control of the company which he bought out of bankruptcy in 2005, Lampert – who in 2003 was kidnapped from the parking lot of his Greenwich office, but was able to persuade his captors to let him go after two days of captivity – has also sought advice, or perhaps magic, from distressed consulting firm AlixPartners, lawyers at Weil, Gotshal and Lazard, as he has tried to keep the company afloat and restructure out of bankruptcy court.

Another hint that a bankruptcy now appears inevitable is that on Tuesday, Sears added restructuring expert Alan Carr as a director, expanding the six-person board to seven.

Carr runs a restructuring advisory firm and previously worked as a restructuring lawyer at Skadden, Arps, Slate, Meagher & Flom LLP. He has also served on the board of companies—including wireless-networking business LightSquared Inc. and guitar maker Gibson Brands Inc.—that have recently navigated the bankruptcy process.

As the WSJ puts it, Lampert, who was “once hailed as a genius investor for smart bets he made on AutoZone and AutoNation,” met his match in Sears, Roebuck. The retailer was struggling before he combined it with Kmart, which he rescued from bankruptcy, to create Sears Holdings Corp. in 2005.

While Lampert rushed to cut expenses and close unprofitable stores, the business continued to deteriorate during the recession following the financial crisis, as more purchases were made online and rivals such as Walmart and Amazon grew stronger. Not helping was Lampert’s unconventional approach to retailing: he resisted investing in store upgrades and after becoming CEO in 2013, managed the company from Florida.

According to the WSJ, Lampert wants to restructure Sears without filing for bankruptcy protection, because he views bankruptcy as risky for retailers who often enter Chapter 11 bankruptcy with the hope of restructuring but wind up in Chapter 7 liquidation instead, as was the case this year with Toys “R” Us Inc. More realistically, Lampert does not want cede equity control to the company’s creditors, which would be the most likely outcome in court.

Lampert, whose hedge fund ESL Investments Inc. owns a majority of Sears shares, also believes the company can get more value for its assets by selling them while it is a going concern, this person added.

And while critics have accused Lampert of stripping assets from the insolvent company, Lampert claims he has been selling assets to give Sears the cash it needs to stay in business, i.e., avoiding handing over equity control.

As for those who have never heard of M-III Partners, it was founded by turnaround expert Mohsin Meghji, who in 2011 quit Loughlin Meghji to start his own company after working on restructurings for nearly 30 years. Sears, which still has nearly 900 stores if not for long, would be M-III’s biggest assignment. It recently served as chief restructuring officer of Real Alloy, an aluminum recycling company that sought bankruptcy protection in 2017.

To be sure, none of the above will come as a surprise to anyone as Sears shares, which traded as high as $144 over a decade ago, closed Tuesday at 59 cents, confirming that investors were aware that a potential bankruptcy filing or restructuring is imminent. If there is one shared feeling among the various stakeholders, it is probably relief that the world’s most drawn out insolvency – on par with that of Greece – is finally coming to an end.

end
Trump does not like what the Fed is doing with respect to interest rates..is he ready to blame the Fed when markets crashes? Dina Powell will be the likely UN ambassador
(courtesy zerohedge)

Trump Says He “Doesn’t Like What The Fed Is Doing”, Is Considering

Goldman’s Powell For UN Ambassador

With the dollar spiking and rates surging to 7 years highs, President Trump doubled down on his criticism of the Fed and on his way to a rally in Iowa, said the Federal Reserve is moving too fast with interest rates increases, dismissing concerns about inflation.

“I don’t like what the Fed is doing”, Trump told reporters at the White House. “I think we don’t have to go as fast” on rate hikes. “I like low interest rates,” Trump said.

Trump also said that rates are too high because there’s no inflation, but said that he has not talked to Chair Powell about it because he doesn’t want to get involved.

Eamon Javers

@EamonJavers

I asked President Trump about interest rates a few minutes ago. He said he thinks they’re too high, particularly because there’s no inflation, but also said that he has not talked to Fed Chair Jay Powell about it because he doesn’t want to get involved.

Trump’s comments echoed prior criticisms of the Fed. When the Fed announced its third increase of the year in September, Trump said he was “not happy” about it. Trump has publicly criticized the Fed’s interest-rate increases on several occasions, breaking with more than two decades of White House tradition of avoiding comments on “independent” monetary policy.

Some commented that this is another sly move by the president to preemptively shift blame on the Fed chair ahead of what may be a turbulent 2019 when rates are expected to keep rising, potentially resulting in a sharp slowdown in the economy and/or a stock market crash.

Michael Krieger@LibertyBlitz

This is exactly why Trump can still win in 2020 even if the economy tanks.
He will blame the Fed and his base will eat it up.

zerohedge@zerohedge

TRUMP SAYS HE DOESN’T LIKE WHAT THE FED IS DOING

Separately, hours after Nikki Haley announced her departure as US ambassador to the UN, Trump said he would consider Goldman’s Dina Powell for the post.

“Dina is certainly a person I would consider,” Trump told reporters at the White House on the way to board the presidential helicopter as he embarked on a trip to Iowa. But he added there are others he would also consider.

Earlier CNBC reported that Dina Powell, a Goldman Sachs exec and Trump’s former deputy national security advisor, has had discussions with senior members of the administration about possibly replacing Nikki Haley as U.S. ambassador to the United Nations.

In the days leading up to Haley’s sudden and surprising resignation Tuesday, senior White House officials reached out to Powell about possibly taking the role, according to three people with direct knowledge of the matter.

Because of these conversations and her experience, Powell has become one of the leading candidates for the role in the eyes of some people close to the president, according to one of the people, who spoke on condition of anonymity.

That said, it was unclear how much interest Powell has in leaving Goldman again to rejoin the Trump team; CNBC quoted a person familiar with her thinking who said “she is happy at the investment bank” and has yet to make a decision about making another career-defining move.

Powell, who worked for a decade at Goldman before joining the Trump administration last year, would have to be confirmed by the Senate if Trump were to nominate her. Haley sailed through her confirmation hearing with lawmakers approving her nomination by a vote of 96-4.

While in Washington, Powell was criticized at times by the nationalist faction in Trump’s base of support, including then-chief strategist Steve Bannon.

Powell departed the White House last December, after less than a year on the job; at the time several Trump advisors praised her and appeared to keep open the possibility that she could make a return.

“Dina Powell has been a key, trusted advisor in this administration. She has always planned to serve one year before returning home to New York, where she will continue to support the president’s agenda and work on Middle East policy,” Sanders said at the time.

Prior to her return to Goldman, Powell was a “power player” within Trump’s inner circle. Powell, who was born in Egypt and immigrated with her family to the United States, was deeply involved with working to improve the administration’s relationships with allies in the Middle East and elsewhere.

She attended the president’s first meeting with the Crown Prince of Saudi Arabia, Mohammed bin Salman. She also reportedly was involved with overseeing a $200 billion arms deal between the U.S. and Saudi Arabia.

Powell became particularly close with the president’s elder daughter, Ivanka Trump, as they formed an alliance during the early stages of the Trump administration. Kushner said when Powell’s departure was announced that she would “continue to play a key role in our peace efforts.”

Haley, a close colleague of Powell’s, was also known to be friendly with Ivanka Trump and Kushner.

* * *

And speaking of Ivanka, who had also been cited as a potential replacement to Haley, Trump said his daughter would be “dynamite” as an ambassador to the United Nations, but conceded that he would be accused of nepotism if he appointed her to replace outgoing Ambassador Nikki Haley.

POLITICO

@politico

“It has nothing to do with nepotism. But I want to tell you, the people know… Ivanka would be dynamite,” Trump replied when asked who could replace outgoing U.S. ambassador to the United Nations, Nikki Haley.

The president added that his daughter would be an “incredible” choice

“I think Ivanka would be incredible,” Trump said, adding that “you’d be accused of nepotism even though I’m not sure there’s anybody more competent in the world,” Trump added.

END
Trump after being informed that the Dow was down 1000 points and the Nasdaq down over 5% states that the Fed has gone crazy.  He just threw Powell under the bus…
(courtesy zerohedge)

President Trump Throws Powell Under The Bus: “I Think The Fed Has Gone Crazy”

Update: After a 1000 point plunge in The Dow, President Trump has found a scapegoat.

CNBC Now

@CNBCnow

WATCH— President Trump: “I think the Fed is making a mistake. They’re so tight. I think the Fed has gone crazy…” http://cnbc.com/id/105499654

After The White House put out the calming statement (below), President Trump told reporters that “it’s the correction that we’ve been waiting for a long time.”

He was not shy about scapegoating Fed Chair Jay Powell:

“I think the Fed is making a mistake. They’re so tight... I think the Fed has gone crazy.” He said he “really disagrees” with the Fed raising interest rates.

Again we’re reminded of an old friend’s tweet this evening…

Not Jim Cramer@Not_Jim_Cramer

Another 2% down in spoos and Powell can start putting his coffee cups and pencils in a cardboard box

As we noted earlier, what better justification could Trump have to “push” Powell than to accuse him of the second worst selloff of 2018?  

*  *  *

What a difference a week makes.

It was just on October 3 that Trump, gloating in the warm glow of a new all time high in the S&P tweeted that “The Stock Market just reached an All-Time High during my Administration for the 102nd Time, a presidential record, by far, for less than two years. So much potential as Trade and Military Deals are completed.”

CNBC Now

@CNBCnow

JUST IN: Sr. White House official tells @EamonJavers that Trump has been briefed on today’s market sell-off, adds that “it’s probably healthy…the U.S. economy remains strong.”

Fast forward just 1 week when things are decidedly less glowing, and on a day in which the VIX exploded, the Nasdaq tumbled 4%, the S&P slumped below all key support levels, and the Dow plunged more than 800 points, its worst day since February in a Black Wednesday for tech stocks, there is far less cause for celebration.

In fact, according to CNBC’s Eamon Javers, Trump was briefed on the market sell off this afternoon. And while Trump will most likely not tweet any celebratory message today, a senior White House official give Javers the following comment: “This is a bull market correction. It’s probably healthy. This will pass and the US economy remains strong.”

Eamon Javers

@EamonJavers

President Trump has been briefed on the market sell off this afternoon. A senior White House official gives me this comment now: “This is a bull market correction. It’s probably healthy. This will pass and the US economy remains strong.”

So who was behind the selloff: deleveraging risk parity funds? Selling CTAs? A wholesale derisking into a higher interest rate environment. Or… could it be China, with its $1.5 trillion in reserves sending Trump a clear message what could happen if Trump continues to unleash hell in Beijing’s general direction?

While it is unlikely that the culprit will be revealed, there is nothing that would prevent Trump from pushing the former narrative and blaming Beijing for today’s rout.

That said, there is one more person who should be rather nervous after the plunge: recall that exactly 24 hours ago Trump said that he doesn’t “like what the Fed is doing.” What better justification could Trump have to “push” Powell than to accuse him of the second worst selloff of 2018?

Indeed, as one notable fintwit member said, a little more downside in the S&P, “and Powell can start putting his coffee cups and pencils in a cardboard box.”

Not Jim Cramer@Not_Jim_Cramer

Another 2% down in spoos and Powell can start putting his coffee cups and pencils in a cardboard box

The key question is this:  who will buy the 1.8 trillion dollars of debt of the uSA this year?  Please re-read the BIS report on derivatives and they state that there is nobody out there to buy any quantity of bonds
(courtesy zerohedge)

The Cracks In The Market’s Floor Grow Wider

October 10, 2018Financial MarketsHousing MarketMarket ManipulationU.S. Economyshort sell stocksstock bubblestock crashTesla“The only time we’ve ever seen a confluence of risk factors anywhere close to those of today was the week of March 24, 2000, which marked the peak of the technology bubble.” – John Hussman, Hussman Funds, in his October Market Commentary

The yield on the 10-yr Treasury has broken out, hitting its highest level since July 2011:

By the end of June 2011, the Fed had only reached its half-way mark in money printing. It was shortly thereafter that the Fed had implemented its “operation twist.” Operation twist consisted of selling the Fed’s short term holdings and using the proceeds plus extra printed money to buy Treasuries at the long-end of the curve – primarily 10-yr bonds. That program is what drove the 10-yr bond yield from 3.40% in July 2011 to as low as 1.33% by mid-2016. At one point the Fed owned more than 50% of all outstanding 10-yr Treasuries. The Fed’s massive money hyper-stimulated the housing and auto markets.

What should frighten market participants and policy-makers – and really, everyone – is that the 10- yr yield has soared the last Thursday and Friday despite the big sell-off in the Dow/SPX. I say “despite” because typically when stocks tank like that, the money flows into Treasuries as a “flight-to-safety” thereby driving yields lower. When stocks drop like last Thursday and Friday in conjunction with the sharp rise in the 10-yr yield (also the 30-yr yield), it reflects the development of financial market problems that are not superficially apparent.

The media narrative attributed Friday’s jump in Treasury yields to the “strong” jobs report. But this is nonsense. The number reported missed expectations. Moreover, the number of working age people “not in the labor force” rose to an all-time high,which is indicative of substantial slack in the labor market.

More likely, yields are soaring on the long end of the curve (10yrs to 30yrs) because it was quietly reported that the amount of outstanding Treasuries jumped by $1.25 trillion in the Government’s 2018 Fiscal Year (October thru September). This means that the Government’s spending deficit soared by that same amount during FY 2018. To make matters worse, the Trump tax cut will likely cause the spending deficit – and therefore the amount of Treasury issuance required to cover that deficit – to well to north of $1.5 trillion in FY 2019.

Who is going to buy all that new Treasury issuance? Based on the Treasury’s TIC report, which shows major foreign holders of Treasury securities, over the last 12 months through July (the report lags by 2 months), foreign holdings of Treasuries increased by only $2.1 billion. The point here is that, in all likelihood, the biggest factor causing Treasuries to spike up in yield is the market’s anticipation of a massive amount of new issuance. Secondarily, the rising yields likely reflect the market’s expectation of accelerating inflation attributable to the deleterious consequences of the trade war and the lascivious monetary policies of the Fed. The market is assuming control of interest rate policy.

On Tuesday last week (October 3rd), the Dow closed at a record high (26,828). Yet, on that day three times as many stocks in NYSE closed at 52- week lows as those that closed at 52-week highs. Since 1965, this happened on just one other day: December 28, 1999. The Dow peaked shortly thereafter (11,722 on January 10, 2000) and began a 21 month sell-off that took the Dow down 32%.

I don’t necessarily expect to see the stock market tank in the next few weeks though, based on watching the intra-day trading action the past couple of weeks leads me to believe that the market is vulnerable at any time to a huge sell-off. The abrupt spike in Treasury yields plus market technicals – like the statistic cited above – lead me to believe that the cracks in the stock market’s “floor” are widening.

The above commentary is an excerpt from the latest Short Seller’s Journal. In that issue I presented LULU as short at $153. It’s already dropped $8 and several subscribers and I have more than doubled our money on put ideas.  You can learn more about this newsletter here:  Short Seller’s Journal information.

***

SWAMP STORIES

Wray states that the Kavanaugh background probe was consistent with the Kavanaugh probes

(courtesy zerohedge)

FBI Chief Insists Kavanaugh Background Probe Was “Consistent” With Other Investigations

Despite the fact that Supreme Court Justice Brett Kavanaugh sailed through his confirmation hearing with bipartisan support (he did receive one Democratic vote from West Virginia Senator Joe Manchin III), Democrats plan to continue hounding him as some speculate that an effort to impeach Kavanaugh could begin shortly after the midterms. Given their hostility, it’s hardly surprising that one of the senators who led the opposition to Kavanaugh’s nomination seized the opportunity to grill FBI Director Chris Wray during what was supposed to be routine testimony about national security.

Wray

But when pressed by California Democrat Kamala Harris about how much direction the FBI received from the White House about the scope of its probe, Wray affirmed that the Kavanaugh expanded background check probe had been “consistent” with other similar investigations overseen by the bureau, per the Washington Post.  Wray insisted that his “supplemental update” to the previous background check investigation was “limited in scope” and that this was “consistent with other investigations going back a long ways.”

The Kavanaugh probe, Wray insisted, was “consistent with the standard process for such investigations going back quite a long ways.”

Asked if he could turn over any written communications between the White House and the FBI relating to the investigation, Wray said he would need to check to see if that would be appropriate. He also refused to comment on what role, if any, was played by White House counsel Don McGahn in shaping the scope of the investigation, saying only that the probe was coordinated between the FBI’s background investigations specialists and the White House’s security division. He also refused to comment on who, specifically, communicated with the FBI regarding the probe.

“I have spoken with our background investigations specialist and they have assured me that this investigation was consistent in scope with our usual process.”

When Harris pressed him who determined the FBI’s decision not to interview some 40 witnesses, including Kavanaugh himself and Dr. Christine Blasey Ford, he said only that the investigation was “very specific in scope and limited in scope” (the FBI ultimately interviewed nine witnesses during the extended investigation). Harris closed by asking whether the FBI looked into allegations that Kavanaugh lied under oath during his confirmation hearing.

“That’s not something I could discuss here,” Wray said.

Clips of the exchange soon circulated on social media:

 

As a member of the Senate Judiciary Committee, Harris was one of the most vocal opponents of Kavanaugh’s nomination, and praised Ford’s bravery for speaking out publicly against him at great personal risk. During a Senate floor speech last week that the probe was “not a search for the truth, this was not an investigation, this was an abdication of responsibility and duty.”

 

SWAMP STORIES COURTESY OF THE KING REPORT

and special thanks to Chris Powell of GATA for sending this down to us:

 

Hillary Clinton: Democrats ‘cannot be civil’ with Republicans anymore
You cannot be civil with a political party that wants to destroy what you stand for, what you care about,” Clinton said…   https://www.foxnews.com/politics/hillary-clinton-democrats-cannot-be-civil-with-republicans-anymore
 
U.S. Senator Bill Cassidy, M.D. @SenBillCassidy: At a time when Republicans are being shot, stabbed, doxxed, beaten, mailed powder, run out of restaurants, and sent death threats, Hillary Clinton urges Democrats to be even more uncivil. What an irresponsible statement. Every Democrat should denounce.
 
Yesterday, Trump accepted Nikki Haley’s resignation as UN Ambassador.
 
John Solomon: Former FBI lawyer: Plot to record, remove Trump not a joke
FBI general counsel James Baker… told Congress last week that his boss — then-Acting FBI Director Andrew McCabe — was dead serious about the idea of surreptitiously recording the 45th president and using the evidence to make the case that Trump should be removed from office…
    And my sources also confirm Baker admitted he received a version of Steele’s dossier from left-leaning reporter David Corn of Mother Jones magazine, and then forwarded it to Strzok’s team.Corn says that occurred in November 2016, right after the election.
    That transaction is significant for two reasons. First, at the time Steele had just been fired from the FBI probe for leaking to the media and he wasn’t supposed to be further assisting the probe. So Corn essentially acted as a back door to allow information to continue to flow.
    Secondly, the FBI was using the news media as an investigative source outside the normal chain of evidence…     https://thehill.com/hilltv/what-americas-thinking/410447-former-fbi-lawyer-plot-to-record-remove-trump-not-a-joke
 
@GeorgePapa19: Frankly, it’s not surprising that the leaders of the UK and Australia have been recently begging the president to not declassify any FISA documents in which they are implicated, in writing, of spying on Americans and the president himself. Sometimes you hedge wrong and lose.
I WILL  see you THURSDAY night
Harvey
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