OCTOBER 15/GOLD CONTINUES TO MARCH HIGHER: TODAY UP $8.45 TO $1226.90/SILVER ADVANCES ANOTHER 10 CENTS TO $14.70/TRUMP DISCLOSES THAT HE MAY INITIATE A 3RD ROUND OF TARIFFS AGAINST CHINA/DEMAND FOR APPLE PHONES INSIDE CHINA SEEMS TO BE SLUMPING BADLY/MERKEL SUFFERS A BIG DEFEAT IN BAVARIAN ELECTIONS/SAUDI ARABIA WILL ADMIT THAT THE KILLING OF KHASHOGGI WAS INADVERTENT: A BOTCHED UP INTERROGATION/MORE SWAMP STORIES FOR YOU TONIGHT/

GOLD: $1226.90 UP  $8.45 (COMEX TO COMEX CLOSINGS)

Silver:   $14.70 UP 10 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1227.00

 

silver: $14.69

 

 

 

 

 

 

 

 

 

 

 

 

For comex gold and silver:

OCT

 

 

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  OCT CONTRACT: 60 NOTICE(S) FOR 6000 OZ 

Total number of notices filed so far for OCT:  854 for 85400 OZ  (2.6562 TONNES)

 

 

 

 

 

FOR OCTOBER

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

20 NOTICE(S) FILED TODAY FOR

100,000 OZ/

Total number of notices filed so far this month: 339 for 1,695,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $7011: UP  $715

 

Bitcoin: FINAL EVENING TRADE: $6371  UP  75 

 

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  2321 CONTRACTS FROM 201,873 DOWN TO  199,552 DESPITE FRIDAY’S 3 CENT RISE IN SILVER PRICING AT THE COMEX. TODAY WE  MOVED 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.  1968 EFP’S FOR DECEMBER AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 1968 CONTRACTS. WITH THE TRANSFER OF 1968 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 1968 EFP CONTRACTS TRANSLATES INTO 9.8MILLION OZ  ACCOMPANYING:

1.THE 3 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 1,805,000 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: 

23,917 CONTRACTS (FOR 11 TRADING DAYS TOTAL 23,917 CONTRACTS) OR 119.60 MILLION OZ: (AVERAGE PER DAY: 2174 CONTRACTS OR 10.870 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF SEPT:  119.60 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 17.08% 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:           2,339.11    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 DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 2321 DESPITE THE 3 CENT GAIN IN SILVER PRICING AT THE COMEX //YESTERDAY. THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 1968 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 LOST A TINY SIZED: 353 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 1968 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 2254  OI COMEX CONTRACTS. AND ALL OF THIS LACK OF DEMAND HAPPENED WITH A 3 CENT RISE IN PRICE OF SILVER  AND A CLOSING PRICE OF $14.60 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. 0.9980 BILLION OZ TO BE EXACT or 144% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT AUGUST MONTH/ THEY FILED AT THE COMEX: 20 NOTICE(S) FOR 100,000 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:1,805,000 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 6977 CONTRACTS DOWN TO 476,107 WITH THE FALL IN THE COMEX GOLD PRICE/YESTERDAY’S TRADING (A LOSS IN PRICE OF $4.35).THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A VERY GOOD SIZED 8309 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 8309 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 476,107. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE AN OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 1332 CONTRACTS:  6977 OI CONTRACTS DECREASED AT THE COMEX AND 8309 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 1332 CONTRACTS OR  133,200 OZ = 4.14 TONNES. AND ALL OF THIS DEMAND OCCURRED WITH A FALL IN THE PRICE OF GOLD/ FRIDAY TO THE TUNE OF $4.35.

 

 

 

 

YESTERDAY, WE HAD 23348 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF SEPT : 99,419 CONTRACTS OR 9,941,900 OZ OR 309.23 TONNES (11 TRADING DAYS AND THUS AVERAGING: 9,038 EFP CONTRACTS PER TRADING DAY OR 903,800 OZ/ TRADING DAY),,

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 11 TRADING DAYS IN  TONNES: 309.23 TONNES

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

THUS EFP TRANSFERS REPRESENTS 309.23/2550 x 100% TONNES =  12.12% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:     5,985.05*  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 6977 WITH THE LOSS IN PRICING ($4.35) THAT GOLD UNDERTOOK FRIDAY) //. WE ALSO HAD A GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 8309 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 8309 EFP CONTRACTS ISSUED, WE HAD A FAIR GAIN OF 1332 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

8309 CONTRACTS MOVE TO LONDON AND 6977 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 4.14 TONNES). ..AND ALL OF THIS DEMAND OCCURRED WITH A LOSS OF $4.35 IN FRIDAY’S TRADING AT THE COMEX.

 

 

we had: 60 notice(s) filed upon for 6000 oz of gold at the comex.

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

GLD...

 

WITH GOLD UP $8.45 TODAY: / 

 

BIG  CHANGES IN INVENTORY

 

ANOTHER BIG DEPOSIT OF: 5.65 TONNES  (NO DOUBT THAT THIS IS A PAPER GOLD ENTRY)

(THIS IS A GREAT SIGN THAT THE CROOKS ARE HAVING DIFFICULTY CONTAINING GOLD)

 

 

 

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   744.64 TONNES

Inventory rests tonight: 744.64 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 UP 10 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 2321 CONTRACTS from 201,873 DOWN TO 199,552  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:

 

 

1968 CONTRACTS FOR DECEMBER AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1968 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 2321 CONTRACTS TO THE 1968 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A  NET LOSS OF 353 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE LOSS ON THE TWO EXCHANGES: 1.765 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 1.805 million  OZ STANDING FOR THE NON ACTIVE MONTH OF OCTOBER.

 

 

RESULT: A DECREASE IN SILVER OI AT THE COMEX DESPITE THE 3 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING// FRIDAY.BUT WE ALSO HAD A GOOD SIZED 1968 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

 

 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i) MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 38,91 POINTS OR 1.49% //Hang Sang CLOSED DOWN 356.43 POINTS OR 1.38% //The Nikkei closed DOWN 423.36 OR 1.87%/ Australia’s all ordinaires CLOSED DOWN 0.87%  /Chinese yuan (ONSHORE) closed DOWN  at 6.9195 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil UP to 71.89 dollars per barrel for WTI and 81.25 for Brent. Stocks in Europe OPENED RED EXCEPT GERMAN DAX//.  ONSHORE YUAN CLOSED SLIGHTLY DOWN AT 6.9195 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED SLIGHTLY DOWN ON THE DOLLAR AT 6.9181: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS STOPPED   : /ONSHORE YUAN TRADING WEAKER  AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

 

 

 

 

 

 

 

 

 

3A/NORTH KOREA/SOUTH KOREA

i)North Korea/South Korea/USA/

 

 

 

b) REPORT ON JAPAN

3 C/  CHINA

i)After Trump disclosed that China was meddling in the USA election as well as stealing proprietary knowledge, he threatens again with a 3rd round of tariffs

( zerohedge)

ii)This should be bothersome to many: Goldman sees “unheard” of collapse in Chinese smartphone demand

( zerohedge)

4/EUROPEAN AFFAIRS

i)ITALY

Italy declares war on Merkel:  the strategy behind the next moves of our two coalition partners

( Tom Luongo/two commentaries)

 

ii)SUNDAY/GERMANY (BAVARIA)

The CSU suffers a stunning defeat as it loses its majority and that will spell trouble for Merkel
( zerohedge)

iv) LATE MONDAY NIGHT: ITALY/BRUSSELS

this ought to be fun:  The Italian cabinet approves the budget which encompasses a deficit of 2.4%, much higher than what they demand  (2.0%!!).  Check to Brussels…
(courtesy zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)SAUDI ARABIA
It seems that Khashoggi’s i watch was recording his murder and it was in sync with his iphone.  It looks like the Saudis realized that he was recording and tried to remove all the files.  They almost it but some remained.  Trump punished severe punishment if the Saudis would be proven to be caused the murder
( zerohedge)

ii)Meijer is very angry at the murder of Khashoggi and he says that the best remedy is by banning the purchase of Saudi Oil

( Meijer)

iii)SUNDAY/SAUDI ARABIA

Saudi stock’s crash as the nation becomes un investable..
( zerohedge)

iv)Monday

After speaking to the King of Saudi Arabia, Trump dispatches Pompeo to the Kingdom.
( zerohedge)

v)the Saudi’s are now to admit that the killing of Khashoggi occurred as a result of a botched interrogation.  It sure looks that this is probably what happened.  You do not send 15 agents and a plane if the mark is to assistinated.( zerohedge)

 

6. GLOBAL ISSUES

 

 

 

 

 

 

7. OIL ISSUES

 

Oil jumps on news that the Saudis are going on the offensive with respect to the Khashoggi affair

(courtesy zerohedge)

 

8 EMERGING MARKET ISSUES

ZIMBABWE

 

 

 

 

9. PHYSICAL MARKETS

 

 

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

 

 

MARKET TRADING

The market seems to be suggesting that the world finances are in trouble.  Please remember the important paper written by Goldman re the world can no longer finance the USA’s 1.8 trillion dollar deficit and Fed debt roll off.

( zerohedge)

 

ii)Market data

a)Core retail sales missed badly rising just .1% month over month after the pundits were expecting a .6% rise.  If you take out autos then retail sales dropped.  This is a good indicator that the economy is faltering

( zerohedge)

b)We now have the official numbers of the deficit for fiscal 2018 and it came in at an expected 779 billion dollars. For Fiscal 2019, with Trump’s mega spending in full force, it is estimated that it will come in at around 1.0 trillion dollars. We must now add 200 billion for auto/student loan s which is not included in the budget deficit but does need financing. Then we must now include the Fed roll off that needs to be financed, the uSA will need 1.8 trillion dollars in new funding requirements of which there is nobody to buy the stuff..

( zerohedge)

 

iii)USA ECONOMIC/GENERAL STORIES

a)This is going to hurt:  the damage in Hurricane Michael may skyrocket into the billions as stealth fighter jets are unaccounted for.  The huge Tyndall AFB is a complete loss
( zerohedge)

b)Sears files for bankruptcy protection( zerohedge)

 

iv)SWAMP STORIES

a)We should not have expected less than the FBI;it seems that they concealed evidence that directly refutes the premise of the Trump Russia probe and also exonerates Papadopoulos

(courtesy zerohedge)

b)Let us label this the “Pocahontas affair” and it is now getting out of control:
( zerohedge)

 

c) the King report/SWAMP STORIES

 

Let us head over to the comex:

 

The total gold comex open interest FELL BY A CONSIDERABLE SIZED 6977 CONTRACTS DOWN to an OI level 476,107 WITH THE FALL IN THE PRICE OF GOLD ($4.35 LOSS 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 8309 EFP CONTRACTS WERE ISSUED:

OCTOBER: 0 EFP’S AND DECEMBER:  8309 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  8309 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 1332 TOTAL CONTRACTS IN THAT 8309 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST 6977 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES:  1332 contracts OR 133,200 OZ OR 4.14 TONNES.

Result: A CONSIDERABLE SIZED INCREASE IN COMEX OPEN INTEREST WITH THE LOSS IN PRICE/ YESTERDAY (ENDING UP WITH THE FALL IN PRICE OF $4.35)THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES:  1332 OI CONTRACTS..

We are now in the active contract month of OCTOBER. For the October contract month, we lost 63 contracts to fall to 1258 contracts.  We had 1 notice yesterday, so we lost 62 contracts or 6200 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 11 contracts up to 488.  The next delivery month after November is the very big December contract month and here the OI FELL by 8429 contracts down to 373,345 contracts.

 

 

 

 

WE HAD 60 NOTICE FILED AT THE COMEX FOR 6000 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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.

Total silver OI FELL BY 2321 CONTRACTS FROM 201,873 DOWN TO 199,552 (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  OI COMEX LOSS OCCURRED DESPITE A 3 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 1968 EFP CONTRACTS:

 

FOR DECEMBER: 1968 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: 1968.  ON A NET BASIS WE LOST 353 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 2254 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 1968 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET LOSS ON THE TWO EXCHANGES:   353 CONTRACTS…AND ALL OF THIS LACK OF  DEMAND OCCURRED WITH A 3 CENT RISE IN PRICING FRIDAY.

 

 

 

 

We are now in the non active delivery month of October and here we had a GAIN of 37 contracts to stand at 42 contracts.  We had 3 notices filed  ON FRIDAY so we gained 40 contracts or 200,000 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 GAINED 240 contracts up to 711 contracts.  After November, we have a December contract and here we LOST 2732 contracts down to 160,387

 

 

 

 

 

 

 

 

We had 20 notice(s) filed for 100,000 OZ for the SEPTEMBER 2018 COMEX contract for silver

 

Trading Volumes on the COMEX

 

PRELIMINARY COMEX VOLUME FOR TODAY: 276,209 contracts,

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  330,484  contracts..

 

 

 

 

 

 

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 15-/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
 32.151 oz
Brinks
1 kilobar
Deposits to the Dealer Inventory in oz NIL oz

 

Deposits to the Customer Inventory, in oz  

 

nil

 

oz

 

 

 

 

 

No of oz served (contracts) today
60 notice(s)
 6000 OZ
No of oz to be served (notices)
1198 contracts
(119800 oz)
Total monthly oz gold served (contracts) so far this month
914 notices
91400 OZ
2.8429 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 1 kilobar transaction/
we had 1 withdrawal out of the customer account:
i  Out of Brinks: 32.151 oz
total customer withdrawals:  32.151 oz
we had 0 customer deposit
total customer deposits: nil  oz
we had NIL adjustments

FOR THE OCTOBER 2018 CONTRACT MONTH)

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 60 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 42 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 (914) x 100 oz or 100 oz, to which we add the difference between the open interest for the front month of OCT. (1258 contracts) minus the number of notices served upon today (60 x 100 oz per contract) equals 211,200 OZ OR 6.569 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 (914 x 100 oz)  + {1258)OI for the front month minus the number of notices served upon today (60x 100 oz )which equals 211,200 oz standing OR 6.569 TONNES in this active delivery month of OCTOBER.

 

We lost 62 contracts or 6200 oz of gold will not stand as these guys morphed into London based forwards and received a fiat bonus for their effort.  THE REASON THEY MORPHED TO LONDON IS BECAUSE THERE IS NO GOLD AT THE COMEX.

 

 

 

THERE ARE ONLY 4.411 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 6.569 TONNES STANDING FOR OCTOBER  

 

 

 

total registered or dealer gold:  141,829.805 oz or   4.441 tonnes
total registered and eligible (customer) gold;   8,101,521.184 oz 251.99 tonnes

IN THE LAST 25 MONTHS 104 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 15 2018
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 618,737,191 oz
CNT
Delaware

 

 

Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
1111,073.360
oz
Scotia
JPM
No of oz served today (contracts)
20
CONTRACT(S)
100,000 OZ)
No of oz to be served (notices)
22 contracts
(110,000 oz)
Total monthly oz silver served (contracts) 339 contracts

(1,695,000 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 0 inventory movement at the dealer side of things

 

total dealer deposits: nil oz

total dealer withdrawals: nil oz

we had 2 deposit into the customer account

i) Into JPMorgan: 511,575.900 oz

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

JPMorgan now has 143.721 million oz of  total silver inventory or 49.8% of all official comex silver. (142.7 million/288 million)

ii) Into  Scotia:  599,498.460 oz

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 1111.073.360  oz

we had  2 withdrawals from the customer account;

i) Out of CNT 610,237.825 OZ

 

iii) Out of Delaware: 8,499.366 oz

 

 

total withdrawals: 618,737.191

oz

 

we had 0 adjustments

 

 

 

 

 

 

 

 

 

total dealer silver:  74.112 million

total dealer + customer silver:  288.177  million oz

The total number of notices filed today for the OCTOBER 2018. contract month is represented by 20 contract(s) FOR 100,000 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 339 x 5,000 oz = 1,695,000 oz to which we add the difference between the open interest for the front month of OCT. (42) and the number of notices served upon today (20 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the OCT/2018 contract month: 339(notices served so far)x 5000 oz + OI for front month of OCT (42) -number of notices served upon today (20)x 5000 oz equals 1,805,000 oz of silver standing for the OCT contract month.  This is a huge number of oz standing for an off delivery month.

We gained 40 contracts or an additional 200,000 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: 62,511 CONTRACTS  …

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 72,446 CONTRACTS..

 

 

YESTERDAY’S CONFIRMED VOLUME OF 72446 CONTRACTS EQUATES TO 362 million OZ  OR 51.7% 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 FALLS TO -3.93% (OCT 15/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -2.00% to NAV (OCT 15/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -3.93%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 12.36/TRADING 11.87/DISCOUNT 4.08.

END

And now the Gold inventory at the GLD/

OCT 15/WITH GOLD UP $8.45/ANOTHER 5.65 TONNES OF GOLD WAS ADDED TO THE GLD INVENTORY/INVENTORY RESTS AT 744.64 TONNES

OCT 12/WITH GOLD DOWN $4.35/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 738.99 TONNES

OCT 11/WITH GOLD UP $35.20 TODAY: A HUGE PAPER GOLD INVENTORY GAIN OF 8.82 TONNES/INVENTORY RESTS AT 738.99 TONNES

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 2 WITH 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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

OCT 12.2018/ Inventory rests tonight at 744.64 tonnes

*IN LAST 477 TRADING DAYS: 188.54 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 377 TRADING DAYS: A NET 32.01 TONNES HAVE NOW BEEN REMOVED FROM GLD INVENTORY.

 

end

 

Now the SLV Inventory/

OCT 15/WITH SILVER UP 10 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 12/WITH SILVER UP 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

OCT 11/WITH SILVER UP 25 CENTS TODAY; NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

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/

 

 

 

OCT 15/2018:

 

Inventory 332.912 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

HUGE JUMP IN LIBOR AND GOFO RATES

YOUR DATA…..

6Month MM GOFO 2.31/ and libor 6 month duration 2.65

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

G0FO+ .34

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.61%

LIBOR FOR 12 MONTH DURATION: 2.96

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.35

end

 

Major gold/silver trading /commentaries for  MONDAY

GOLDCORE/BLOG/MARK O’BYRNE.

Why It’s Worth Holding Gold in Your Portfolio

“It Always Pays To Hold Some Gold”

by John Stepek of Money Week

“We have interest rates going up at a clip that’s much faster than certainly a lot of people, including myself, would have anticipated. I think the Fed is out of control.”

Central banks are independent, in theory. But that won’t stop the president of the US from giving his full and frank opinion on their performance.


Gold Britannias 2019 (1 oz)

Donald Trump reckons the Federal Reserve is to blame for the recent spasm of panic in markets.

“I’d like our Fed not to be so aggressive because I think they’re making a big mistake.”

Will Trump get his wish?

Will the Fed respond to Trump’s threats? Or to those of the market?

As I write this, markets appear to be recovering a bit of poise. BTFD (the excitable version of “buy the dip”) dies hard (although let’s get to the end of the US session before we make too many judgements about when or if this wobble might end).

But while the S&P 500 is not yet down 10% (the magic number that represents a “correction”), both the tech-heavy Nasdaq and the wider Russell 2000 are already in correction territory.

Those are quite chunky falls by recent standards. And that’s just talking about the US. As Michael Mackenzie points out in the FT, world markets have really had it bad – the FTSE All-World index, excluding the US, is now down around 17% from its January peak. That’s almost a bear market (which is deemed as 20% for essentially arbitrary reasons.)

Meanwhile, gold – that much-detested haven for those still superstitious enough to fear that economists and central bankers haven’t quite got all of this figured out yet – had a big bounce, all the way up to $1,220 an ounce.

We don’t know what the Fed will do. It’s a difficult position for Jerome Powell to be placed in. If he looks as though he’s caved to Trump, then his credibility is shot. Yet at the same time, the Fed has a history of responding to market falls with soothing words.

Powell might have started out talking tough, but is he really going to feel comfortable standing there with the S&P 500 down 10%-15%, with everyone shouting at him “do something”? Be interesting to find out.

Say Powell buckles. Markets cheer up. But then inflation gets a clearer run. And it’s amazing how quickly the narrative can go from fearing an imminent recession to fretting about an inflationary boom.

Or Powell stays strong. Markets continue to slide. How long does that go on for before they either wake up and realise everything’s OK – or before Powell realises that in fact, he is being over-optimistic about the economy’s capacity to accept higher rates?

Days like these are why you hold a bit of gold in your portfolio

I don’t know what’s going to happen. But to me, this is the point of owning a bit of gold in your portfolio. It’s insurance. It’s the asset that goes up when most things are going down. It benefits from two main things: currency debasement and panic.

So say Powell backs down and, rather than heading for recession, inflation in fact takes off. Gold would benefit in that scenario, even if most other things struggled.

Or say Powell stands firm, and it turns out markets are right to panic and we end up with an economy suddenly crushed under its debt burden. Again, gold would benefit from the sheer panic and the rush for any liquid asset with no counterparties.

And if, instead, everything is OK – well, who cares what’s happening to your gold if the rest of your portfolio is melting up?

However, beyond that, I’d also point out that I fully believe that the eventual resolution to the fallout from the 2008 financial crisis will be that we shift to a new monetary regime. That’ll be quite a kerfuffle. During said kerfuffle, I think owning some gold will also be psychologically helpful.

Let’s unpack that a bit in the little space we have left this morning, though I’ll be returning to it here and in MoneyWeek again and again.

Until early last century, currencies were tied to gold. That made it hard to expand the money supply. It also made it hard for governments to overspend. So it often got abandoned temporarily – usually during wartime – but countries did make the effort to get back onto it, as something of a badge of honour.

But then, in the run-up to World War II and during the Depression, various countries which had rejoined the gold standard at too high a rate (Britain being the main one) ditched it altogether. Then the chaos of World War II came along, and left the US the only developed country with any money left, basically.

So in the wake of that cataclysm, we got the Bretton Woods system – one that linked global currencies to the dollar, with the dollar itself pegged to gold. This ended in 1971, when Richard Nixon (another somewhat controversial president) took the US off the gold standard.

From then on, we entered the era of purely fiat currencies. Within countries, money is backed by faith in the government and the economy. And the global system is backed up by the US dollar.

So in effect, we’ve gone from a strict gold standard, to a very loose gold standard conducted via the US dollar, to a purely fiat standard, with the US dollar the global “reserve” currency.

The coming global financial order will involve China as a big player

As you might have gathered, changes in the monetary system tend to be accompanied by trauma. World War II; the inflation and political upheaval of the 1970s.

And of course, we’re now seeing the fallout from the 2008 near-collapse of the financial system. Funnily enough, right after that happened, there were explicit calls from Europe for “a new global financial order”. Then the eurozone crisis hit, and Europe became rather more preoccupied with its own woes.

But these transitions are not things that are decided at the negotiating table. They may be formalised there, but only after events have forced everyone’s hands.

The move away from the global dollar standard is a while off, and it may be decades before we formally recognise the transition in the same way that we recognise the shift from Bretton Woods.

But it starts with China turning the yuan into a proper reserve currency. That would ultimately involve a free float, and the process of getting there would be highly disruptive and uncomfortable for all involved.

So keep an eye on what China does with its currency.

And also, hang on to your gold.

Courtesy of Money Week

 

 

7_Key_Storage_Must_Haves_-_Copy.jpg

 

 

Avoid Digital & ETF Gold – Key Gold Storage Must Haves

 

 

 

 

 

News and Commentary

Asian markets resume their fall, with tech stocks leading the way (MarketWatch.com)

Gold rises as Asian shares dip amid China concerns (Reuters.com)

China’s gold reserves fall in value as overall forex holdings fall too (SharpsPixley.com)

Rally Erupted in Gold Market Days After Funds Made Big Bear Bet (Bloomberg.com)

Gold Revitalized as Equity Sell-Off Spurs Second Weekly Advance (Bloomberg.com)

Shelves Empty as Specter of Hyperinflation Stalks Zimbabwe (Bloomberg.com)


Source: ZeroHedge

Why It’s Worth Holding Gold in Your Portfolio (MoneyWeek.com)

How Brexit will hit sterling (MoneyWeek.com)

Stock market’s nightmare may be far from over (MarketWatch.com)

A Sears liquidation could create some winners and over 100,000 losers (MarketWatch.com)

Italy Declares War On Merkel And The EU (Strategic-Culture.org)

Relative Scarcity Of Physical Gold Prompts Large Drawdowns From Funds, ETFs (ZeroHedge.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below


Gold Prices (LBMA AM)

12 Oct: USD 1,218.75, GBP 922.11 & EUR 1,052.15 per ounce
11 Oct: USD 1,201.10, GBP 910.31 & EUR 1,040.27 per ounce
10 Oct: USD 1,186.40, GBP 902.02 & EUR 1,033.00 per ounce
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

Silver Prices (LBMA)

12 Oct: USD 14.60, GBP 11.04 & EUR 12.60 per ounce
11 Oct: USD 14.40, GBP 10.90 & EUR 12.45 per ounce
10 Oct: USD 14.38, GBP 10.92 & EUR 12.50 per ounce
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


Recent Market Updates

– Gold’s Best Day In 2 Years Sees 2.5 Percent Gain As Global Stocks Sell Off – This Week’s Golden Nuggets
– Gold Up 2.5 Percent As Global Stock Rout Spreads To Europe
– “Gold Is On The Cusp” Of An “Explosion Higher” As Stock and Tech “Crash Is Coming”
– 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”

Mark O’Byrne
Executive Director

 

 
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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

China wishes a “broadly stable” yuan as it seems to be signalling that it will not engage in further devaluation.

This would be very helpful for gold

(Reuters/GATA)

China suggests that it’s done devaluing yuan

 Section: 

China Echoes IMF Pledges to Avoid Using Currency as Trade War Tool

By David Lawder and Leika Kihara
Reuters
Saturday, October 13, 2018

NUSA DUA, Indonesia — China’s top central banker today pledged to keep the yuan currency’s value “broadly stable,” a sign that Beijing may be trying to prevent a bruising trade dispute with the United States from spilling over into a currency war.

People’s Bank of China Governor Yi Gang’s statement at the International Monetary Fund and World Bank annual meetings in Bali came as U.S. Treasury Secretary Steven Mnuchin said Chinese officials had told him that further yuan depreciation was not in China’s interest.

Mnuchin has reiterated his concerns that a major drop in the yuan’s value this year against the dollar could be part of an effort to gain a trade advantage for Chinese exports or to offset the impact of U.S. tariffs. …

… For the remainder of the report:

https://www.reuters.com/article/us-imf-worldbank/china-echoes-imf-pledge…

* * *

END

Life in Zimbabwe today:

(courtesy Bloomberg/GATA)

Desperate Zimbabwe needs only to mine its gold and make its currency convertible

 Section: 

Shelves Empty as Specter of Hyperinflation Stalks Zimbabwe

By Paul Wallace, Godfrey Marawanyika, and Desmond Kumbuka
Bloomberg News
Friday, October 12, 2018

Austin Mushanguri shakes his head in dejection and walks away from the fridges in an affluent supermarket in Zimbabwe’s capital of Harare after reading a sign saying he can buy only one bottle of beer instead of the dozen he hoped for.

Similar scenes are playing out across the southern African nation, where foreign-exchange shortages and austerity measures have left consumers facing long lines for everything from fuel to bread and sugar and sent prices soaring

It’s the latest challenge to President Emmerson Mnangagwa’s newly-elected government, which is trying to rebuild an economy wrecked by the misrule of former leader Robert Mugabe.

“How do they expect me to queue in the shops over 12 times to buy a single bottle of this beer?” Mushanguri, 41, asked. “This not what we voted for. This is not what we expected after elections.” …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2018-10-12/shelves-empty-as-spec…

* * *

END

We now have a battle for the big Canadian Detour Gold Mine

(courtesy Friedman/National Post)

Battle for big Canadian gold mine flares up anew

 Section: 

By Gabriel Friedman
National Post, Toronto
Friday, October 12, 2018

Fresh blows landed Friday in the battle for control of Detour Gold Inc. — which operates one of the largest gold mines in Canada — with the company’s current board and hedge fund Paulson & Co. each accusing the other of rejecting settlement offers.

The first salvo came from Detour, which issued a press release with details of a settlement offer that it said Paulson & Co., the New York hedge fund run by U.S. billionaire John Paulson, rejected.

By midday Paulson & Co.’s partner Marcelo Kim offered a different version of events: His firm had countered the settlement offer with its own offer on Friday morning, and Detour’s chairman Alex Morrison had said he would present it to the board for consideration over the weekend.

Instead, Kim said, Detour released a press release on Friday morning accusing him of rejecting all settlement negotiations. …

… For the remainder of the report:

https://business.financialpost.com/commodities/mining/the-battle-for-one…

END

 

_________________________________________________________________________________________________

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

i) Chinese yuan vs USA dollar/CLOSED DOWN TO 6.9195/HUGE DEVALUATION FOR THE PAST FOUR WEEKS RESUMES/CHINESE COMING TO USA FOR TRADE TALKS IN NOVEMBER CANCELLED //OFFSHORE YUAN:  6.9181   /shanghai bourse CLOSED DOWN 38.81 POINTS OR 1.49%

. HANG SANG CLOSED UP 356.43 POINTS OR 1.38%

 

2. Nikkei closed DOWN 356.43 POINTS OR 1.38%

 

3. Europe stocks OPENED  IN THE RED EXCEPT GERMANY 

 

 

/USA dollar index RISES TO 95.02/Euro RISES TO 1.1594

3b Japan 10 year bond yield: FALLS TO. +.14/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 111.82/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD IS NOW TARGETED AT .11%/JAPAN LOSING CONTROL OF THEIR BOND MARKET

 

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI:: 71.49 and Brent: 80.47

3f Gold UP/JAPANESE Yen UP/ 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 UP for WTI and UP FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.50%/Italian 10 yr bond yield UP to 3.56% /SPAIN 10 YR BOND YIELD UP TO 1.70%

3j Greek 10 year bond yield FALLS TO : 4.40

3k Gold at $1229.15 silver at:14.71   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 41/100 in roubles/dollar) 65.65

3m oil into the 71 dollar handle for WTI and 81 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 111.82DESTROYING 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 0.9855 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1426 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to +0.50%

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 3.15% early this morning. Thirty year rate at 3.33%

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

6.  TURKISH LIRA:  UP  TO 5.7869

Global Market Rout Returns As Futures Slide, China

Tumbles To 4 Year Low

Last week’s global stock rout returned despite Friday’s tentative bounce, as the selloff resumed in Asia with China tumbling 1.5%, closing at a fresh 4 year low, dragging European shares lower with S&P futures sliding 0.5% and Nasdaq futs down -0.8% on Monday, as a new diplomatic crisis between the US and Saudi Arabia added to a list of investor concerns and drove up oil prices. Safe havens bounced, led by Gold with Treasuries and the yen also rising.

“The breakdown in Brexit talks, the disappearance of dissident Saudi journalist Jamal Khashoggi, the demise of the CSU in Bavarian elections, the impasse over Italy’s budget and the worried tone coming from the IMF/World Bank meeting in Bali all combine to give financial markets an uncomfortable feel this morning,” according to SocGen FX strategist Kit Juckes.

A renewed threat by Trump to impose more sanctions on Beijing overpowered encouraging words from China’s securities regulator, accelerating the $3 trillion rout in China’s stock market, while evidence of weakening domestic demand added to concern about the trade war with the U.S. The Shanghai Composite Index fell 1.5%, closing at session lows and the lowest level in the index since November 2014 following a weekend of warnings on global economic fragility from finance chiefs meeting at an annual IMF gathering.

Over the weekend, President Trump threatened to impose another round of tariffs on China in an interview with CBS’s “60 Minutes” that aired Sunday. When asked whether he wants to push China’s economy into a depression, Trump said “no.” Also over the weekend, at the IMF annual meetings in Bali, finance officials weighed tremors rattling the global economy, from stock sell-offs to trade concerns and rising U.S. rates.

The Shanghai Composite has slumped 19% in the past six months and is in a bear market since its January highs as trade tensions increased and data signaled a slowdown in the economy, while the yuan has fallen more than 9%. A gauge of consumer-related shares dropped the most after data showed purchases of passenger vehicles and online appliance sales slumped in September. Liu Shiyu, chairman of the China Securities Regulatory Commission, said the country will deepen capital market reforms and press ahead with opening up after he met with investors.

The subindex of consumer discretionary stocks fell 2.1%, the most among the CSI 300 Index’s 10 industry groups. Great Wall Motor Co. slumped 9.4 percent to its lowest since 2012, while Qingdao Haier Co. tumbled 9.2 percent.

“The fundamental issues that haunt investors — lower global risk appetite and a slowing Chinese economy — remain,” said Ken Chen, Shanghai-based analyst with KGI Securities Co. “The market will only recover if those concerns are resolved, and it’s going to take more than just verbal promises.”

The Hang Seng Index fell 1.4% after three weeks of losses, while the Hang Seng China Enterprises Index dropped 1.5%. Tencent Holdings Ltd. slumped 1.9%. As we reported last week, purchases of passenger vehicles by Chinese dealerships plunged for a third straight month in September, dropping the most on record.

Over the weekend, Steven Mnuchin expressed concerns about the yuan’s weakness and called for a currency clause that would prevent competitive devaluations to be included in any trade talks with Japan. Separately, China’s ambassador to the U.S. said Beijing has no choice but to respond to what he described as a trade war started by the U.S.

Asian weakness spread to Europe, where industrial goods makers and technology firms were the biggest losers in the Stoxx Europe 600 index. In Frankfurt, stock trading has resumed after the opening was delayed by a technical glitch. Main European Indices are mixed amid current market uncertainty; the Dax is up (+0.3%) despite being weighed on by Lufthansa which is down by over 3% following agreements on new employment conditions, featuring moderate salary increases. Sectors are mixed with IT lagging at -1% as a follow on from poor IT performance in Asia due to continued U.S-China tension; this is despite Friday’s Wall Street rebound for IT which saw it as the leading sector finishing up by 3%. Convatec shares tumbled over 25% following a cut in revenue guidance.

The Bloomberg Dollar Spot Index slipped while Treasuries climbed amid the risk-averse mood. Most Asian currencies fell against the dollar, led by the Indian rupee and South Korean won as the rebound in global equities Friday failed to follow through after the weekend IMF gathering.  The British pound was volatile, paring a drop of as much as 0.5% after the U.K. and the European Union remained on course to miss this week’s key milestone on the road to a Brexit deal after talks broke up in stalemate on Sunday. The yen pushed higher while gold headed toward its fourth advance in five days.

Italian bonds erased earlier gains as the nation prepares to meet Monday’s midnight deadline for euro-area governments to turn in fiscal budgets.

Meanwhile, Crude and Brent are up 0.6% and 0.9% respectively amidst supply concerns following possible U.S sanctions against Saudi Arabia over missing journalist Khashoggi, which Saudi say they will respond in kind to if implemented. Prices are currently just over USD 71.5/bbl and USD 81/bbl respectively. Additionally, IEA’s Birol stated that high oil prices are hurting consumers and that extra barrels will need to come to the market soon to avoid further tightening.

Gold is once again up with mass uncertainty in the market from unproductive Brexit talks, US-China trade war and Italian’s budget deadline day causing investors to move into the safe haven. Global trade tensions have also caused selling pressure in London metals causing prices to slip. Shanghai rebar steel futures climbed to their highest levels in over 3 weeks, boosted by  expectations that China’s sustained anti-pollution campaign could further disrupt production.

Expected data include retail sales and Empire State manufacturing. Bank of America, Schwab, and JB Hunt are among companies reporting earnings

Market Snapshot

  • S&P 500 futures down 0.7% to 2,749.00
  • STOXX Europe 600 down 0.6% to 356.81
  • MXAP down 1.1% to 152.56
  • MXAPJ down 1% to 479.89
  • Nikkei down 1.9% to 22,271.30
  • Topix down 1.6% to 1,675.44
  • Hang Seng Index down 1.4% to 25,445.06
  • Shanghai Composite down 1.5% to 2,568.10
  • Sensex up 0.1% to 34,775.90
  • Australia S&P/ASX 200 down 1% to 5,837.10
  • Kospi down 0.8% to 2,145.12
  • German 10Y yield fell 0.8 bps to 0.49%
  • Euro up 0.01% to $1.1561
  • Italian 10Y yield rose 1.3 bps to 3.203%
  • Spanish 10Y yield fell 0.4 bps to 1.672%
  • Brent futures up 0.7% to $80.98/bbl
  • Gold spot up 1% to $1,229.01
  • U.S. Dollar Index down 0.1% to 95.11

Top Headlines

  • The U.K. and the European Union are on course to miss this week’s key milestone on the road to a Brexit deal after talks broke up in stalemate on Sunday. Talks are now paused after weekend negotiations failed to break deadlock; EU now considering a crisis summit in November for no-deal contingency planning according to people familiar
  • Sears Holdings Corp., the 125-year-old retailer that became an icon for generations of American shoppers, filed for bankruptcy, saddled with billions of dollars of debt racked up as it struggled to adjust to the rapid shift toward online consumption
  • After weeks of conflicting messages from Rome, market turmoil, and an early warning that the spending plans would breach EU rules, the European Commission will start reviewing Italy’s plan to start delivering on costly election promises
  • Chancellor Angela Merkel faces a new round of coalition turbulence after her Bavarian sister party dropped to a historic low in a regional election that exposed the scope of voter disaffection with Germany’s political establishment
  • Mnuchin: wants a currency clause that would prevent competitive devaluations to be included in any trade talks with Japan; Kudlow says Trump is concerned that the Fed might choke off the U.S. recovery
  • ECB’s Rehn: latest core inflation numbers were somewhat disappointing; ECB should gradually move to data- dependent rate guidance
  • PBOC Governor Yi: sees no reason to hike rates; China won’t use its currency as a tool to deal with trade conflicts
  • Saudi Arabia: Trump says Saudi would face “severe punishment” if linked to disappearance of Khashoggi; State news says kingdom will retaliate against any measures with even stronger response.

Asian equity markets resumed last week’s stock rout as the region failed to take impetus from Friday’s rebound on Wall Street where tech outperformed and all majors finished a tumultuous session in the green, albeit with losses of around 4% on the week. ASX 200 (-1.0%) slumped from the open as financials and tech led the broad losses which dragged the index briefly below the 5800 level, while Nikkei 225 (-1.9%) suffered from continued flows into the JPY. Elsewhere, Shanghai Comp. (-1.5%) and Hang Seng (-1.4%) conformed to the negative tone with sentiment not helped by President Trump’s reiteration that the US may have to impose another round of tariffs on China, with indecision seen in the mainland after the PBoC skipped open market operations and refrained from rolling over maturing MLF loans as its previously announced 100bps RRR cut took effect. Finally, 10yr JGBs were pressured at the open and tracked the recent weakness in T-notes, but then recovered as the widespread risk averse tone spurred safe-haven demand.

Top Asian News

  • SoftBank Dive Hits $22 Billion Amid Saudi Outcry, Tech Rout
  • China’s Stocks Extend $3 Trillion Rout as Consumer Firms Crumble
  • Asian Stock Markets Fall. And There’s a Slew of Reasons Why
  • Singapore Home Sales Rebound as Buyers Move Past Curbs

Main European Indices are mixed amid current market uncertainty; the Dax is up (+0.3%) despite being weighed on by Lufthansa
which is down by over 3% following agreements on new employment conditions, featuring moderate salary increases. Sectors are mixed with IT lagging at -1% as a follow on from poor IT performance in Asia due to continued U.S-China tension; this is despite Friday’s Wall Street rebound for IT which saw it as the leading sector finishing up by 3%. Convatec are down by over 25% following a cut in their revenue guidance. Chr Hansen are up by over 2% following a positive earnings update and reports that their chairman will not seek re-election, with Dominique Reiniche to be nominated as the next chairman.

Top European News

  • Speed Trader Hudson River Chooses Dublin as Post-Brexit Home
  • Greencore to Sell Troubled U.S. Food Unit for $1.1 Billion
  • Frankfurt Trading Resumes After Open Delayed by Technical Glitch
  • S&P Upgrade Boosts Zloty and Bonds as EM Woes Threaten Rally

In FX, JPY – The clear G10 outperformer and beneficiary of a downturn in Asia-Pacific stocks as jitters over global trade, protectionism and sanctions undermined sentiment. Usd/Jpy has retreated from 112.25 highs and through 112.00 to a 111.70 low, breaching the 55 DMA at 111.83, while Eur/Jpy is back below 129.50 alongside broadly softer Jpy crosses. From a technical perspective, 111.50 will be eyed next on the downside as a psychological marker and 50% Fib, roughly aligning with daily support around 111.47 plus decent option expiry interest between 111.55-40 (1 bn). GBP – At the opposite end of the spectrum, the Pound has been undermined by a breakdown in talks between the UK and EU just days ahead of the latest scheduled Brexit summit that may now take the form of a no deal meeting given the ongoing Irish border impasse. Cable has managed to regain some composure and recoup losses under 1.3100, but Eur/Gbp is holding above 0.8800 where a hefty expiry lies (1 bn). In EM – The Try remains bid just off 5.8160 peaks vs the Usd on follow-through buying/relief in wake of the release of US Pasto Brunson, while the Rub and Zar are also up vs the Buck (circa 65.6500 and 14.4500) on firm Brent and Gold.

In commodities, Crude and Brent are up 0.6% and 0.9% respectively amidst supply concerns following possible U.S sanctions against Saudi Arabia over missing journalist Khashoggi, which Saudi say they will respond in kind to if implemented. Prices are currently just over USD 71.5/bbl and USD 81/bbl respectively. Additionally, IEA’s Birol stated that high oil prices are hurting consumers and that extra barrels will need to come to the market soon to avoid further tightening. Gold is once again up with mass uncertainty in the market from unproductive Brexit talks, US-China trade war and Italian’s budget deadline day causing investors to move into the safe haven. Global trade tensions have also caused selling pressure in London metals causing prices to slip. Shanghai rebar steel futures climbed to their highest levels in over 3 weeks, boosted by expectations that China’s sustained anti-pollution campaign could further disrupt production.

It’s a quiet start to the week. In the European morning, the only release of note in Europe is Italy’s August general government debt numbers. In the US, we’ll see the October Empire manufacturing release along with September retail sales and August business inventories. Away from the data, ECB vice president Luis de Guindos will speak at an event in Madrid while, Euro-area countries including Italy send final budgets to the EC for approval. Bank of America will report earnings.

US Event Calendar

  • Oct. 15-Oct. 18: Monthly Budget Statement, est. $75.0b, prior $7.9b
  • 8:30am: Empire Manufacturing, est. 20, prior 19
  • 8:30am: Retail Sales Advance MoM, est. 0.6%, prior 0.1%
  • 8:30am: Retail Sales Ex Auto MoM, est. 0.4%, prior 0.3%
  • 8:30am: Retail Sales Ex Auto and Gas, est. 0.4%, prior 0.2%
  • 8:30am: Retail Sales Control Group, est. 0.4%, prior 0.1%
  • 10am: Business Inventories, est. 0.5%, prior 0.6%

 

DB’s Jim Reid concludes the overnight wrap

Most of the blame for last week’s market turbulence was the move in yields from the previous week. The support actors have been Italy, the ongoing trade dispute and perhaps a little bit of Brexit uncertainly (of which the news flow hasn’t got much better over the weekend. US bond markets should take most of the responsibility though even if they did rally back a little in the latter part of the week. Given this, its worth highlighting that over the weekend here at DB we have reiterated our 2018 YE 10-year Treasury forecast at 3.50% but edged up the forecast to 3.70% for Q1 2019 and at 3.80% by the end of Q3 2019. By YE 2019 the forecast is back to 3.60% due to the possibility of the house view of potential US rate cuts in H2 2020 being priced in after five more hikes before the end of next year. In addition, 10-year Bunds are expected to be 1.25% by the end of 2019. See the report here for more details.

The key events for this week are the Italian budget being submitted to the EC today, China’s inflation data tomorrow, the latest FOMC minutes on Wednesday, the EU leaders Summit to discuss Brexit on Wednesday and Thursday, China’s monthly data dump on Friday and US earnings season kicking slowly into gear. Brexit headlines here in the UK will likely to be intense all week with negativity being the overriding theme last night as Brexit Secretary Raab travelled to Brussels yesterday to communicate to Michel Barnier that Mrs May couldn’t sign up to what is currently being offered and discussed. Elsewhere, EU’s chief Brexit negotiator Michel Barnier tweeted yesterday that “despite intense efforts, some key issues are still open, including the backstop for IE/NI to avoid a hard border.” The pound has fallen -0.35% in Asian trading as a result. This news followed intense weekend negotiations with many hoping today would see the outline of a deal announced. This seems highly unlikely now and some attention will turn to whether this week’s EU leaders summit will conclude that the November summit should be about preparing for a no-deal Brexit instead of ratifying a successful one. Tomorrow the UK has a cabinet meeting devoted to Brexit so plenty to watch out for. At this point in time I’ve absolutely no idea how this is all going to work out. There are so many immovable obstructions on all sides. However, with all things EU related over the years one learns that until 23.59:59 ticks over to midnight then there’s always a chance of a deal.

Staying with weekend politics, the Bavarian election saw the CSU – German Chancellor Angela Merkel’s coalition partners – see their vote share decline to 37.2% down from 47.7%, marking the worst performance for the CSU since 1950 while the center-left Social Democrats share declined to 9.7% down from 20.6%, marking the worst performance since World War 2. The Greens and AfD’s vote share rose to 17.5% and 10.2%, respectively. Our economists have previously stated that a poor showing for the CSU might trigger a reshuffle of Merkel’s cabinet, i.e., the ousting of Seehofer as Minister of the Interior, fostering better co-operation among the Groko, enhancing the federal government’s efficiency, and shifting the government’s stances, especially on asylum policy and European policy. The exact impact will depend on the CSU’s future coalition partner in Bavaria. Their baseline scenario is for a coalition among the CSU, the Free Voters, and the FDP.

The week has started off with a risk-off tone in Asia, despite last Friday’s rebound in global equities. The Nikkei (-1.30%), Hang Seng (-1.01%), Shanghai Comp (-0.79%) and Kospi (-0.52%) all lower. Elsewhere, futures on S&P 500 (-0.18%) are pointing to a slightly weaker start. Overnight, BoJ Governor Kuroda said that “the amount of JGB purchases is no more the monetary operating target” adding, “It’s only yield curve control.” This further reinforces that the BoJ’s commitment to buy JPY 80tn of JGBs each year is only symbolic now.

Last week was a tough one for risk assets, with most major equity indexes posting their worst week since the February-March sell-off even if Friday ended on a high as we’ll show below. The S&P 500, DOW, and NASDAQ closed -4.10%, -4.19%, and -3.27% lower on the week. Cyclical sectors – industrials, materials, financials, and energy – were the worst-performing sectors, while the safe havens of utilities and consumer staples were the best performers. Small-caps continued their recent trend by lagging behind the broader market, with the Russell 2000 down -5.23%, their worst week since January 2016 and their 7th consecutive week of underperformance versus the S&P 500 – the longest such streak in over a year. The VIX index rose to as high as 28.8 and closed at 21.3, its highest level since April and biggest move since March.

The Euro Stoxx 600 shed -4.64%, roughly in line with the DAX (-4.86%) and CAC (-4.91%), while the FTSEMIB lagged behind (-5.36%). In Asia, the Nikkei and KOSPI shed -4.58% and -4.95%. Chinese bourses were hit hard after being closed for the first week of October, with the CSI 300, Shanghai Composite, and Shenzhen Composite losing -7.60%, -7.80%, and -10.07%, respectively. Broader emerging markets actually held up well over the course of the week, with the MSCI EM index down only -1.35% and EM currencies gaining +0.76%. They were boosted by a soft US CPI print on Wednesday and a generally softer dollar (-0.38%).

On Friday markets found their footing and pared their losses, with the S&P 500, DOW, and NASDAQ gaining +1.42%, +1.15%, and +2.77%, respectively, on the day. Treasury yields resumed their rise, rising +1.5bps on Friday but were still -6.8bps lower on the week. Given the equity sell-off this was a relatively mild rally showing that there does seem to be a structural element to the recent rise in yields. Elsewhere, Bunds outperformed and yields dipped another 2.0bps to take their weekly rally to 7.5bps, while peripheral spreads were mostly wider.

Noise continued to emanate from Italy regarding the budget, but we didn’t get any substantive new information and the sell-off in BTPs (+15.3bps) wasn’t notably more painful than in Spain (+9.7bps) or Portugal (+9.9bps). After the close on Friday, Moody’s upgraded Portugal’s debt to investment grade, though it feels more like the agency catching up to the market than the other way around.

US banks effectively kicked off the third quarter earnings season on Friday, though the results were understandably  overshadowed by the broader market moves. Still, they were mostly positive. Citi posted lower expense than expected while maintaining revenue in line, JP Morgan saw revenues grow a healthy 7% yoy, and Wells Fargo exceeded DB’s expectations on costs despite a headline earnings miss. Bank stocks nevertheless led losses on Friday, with the S&P 500 bank index shedding -0.40% despite the broader rally to end the week -5.43% lower.

 

3. ASIAN AFFAIRS

i) MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 38,91 POINTS OR 1.49% //Hang Sang CLOSED DOWN 356.43 POINTS OR 1.38% //The Nikkei closed DOWN 423.36 OR 1.87%/ Australia’s all ordinaires CLOSED DOWN 0.87%  /Chinese yuan (ONSHORE) closed DOWN  at 6.9195 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil UP to 71.89 dollars per barrel for WTI and 81.25 for Brent. Stocks in Europe OPENED RED EXCEPT GERMAN DAX//.  ONSHORE YUAN CLOSED SLIGHTLY DOWN AT 6.9195 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED SLIGHTLY DOWN ON THE DOLLAR AT 6.9181: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS STOPPED   : /ONSHORE YUAN TRADING WEAKER  AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

3 a NORTH KOREA/USA

 

North Korea/South Korea/USA/China

3 b JAPAN AFFAIRS

 
END

3C CHINA

After Trump disclosed that China was meddling in the USA election as well as stealing proprietary knowledge, he threatens again with a 3rd round of tariffs

(courtesy zerohedge)

Trump Threatens China With More Tariffs, Does Not Seek Economic “Depression”

US equity futures dipped in the red after President Trump threatened to impose a third round of tariffs on China and warned that Chinese meddling in U.S. politics was a “bigger problem” than Russian involvement in the 2016 election.

During the same interview with CBS’s “60 Minutes”, in which Trump threatened to impose sanctions against Saudi Arabia if the Saudis are found to have killed WaPo reported Khashoggi, and which sent Saudi stock plunging, Trump said he “might,” impose a new round of tariffs on China, adding that while he has “great chemistry” with Chinese President Xi Jinping, and noting that Xi “wants to negotiate”, he doesn’t “know that that’s necessarily going to continue.” Asked if American products have become more expensive due to tariffs on China, Trump said that “so far, that hasn’t turned out to be the case.”

“They can retaliate, but they can’t, they don’t have enough ammunition to retaliate,” Trump says, “We do $100 billion with them. They do $531 billion with us.”

Trump was also asked if he wants to push China’s economy into a depression to which the US president said “no” before comparing the country’s stock-market losses since the tariffs first launched to those in 1929, the start of the Great Depression in the U.S.

“I want them to negotiate a fair deal with us. I want them to open their markets like our markets are open,” Trump said in the interview that aired Sunday. So far, the U.S. has imposed three rounds of tariffs on Chinese imports totaling $250 billion, prompting China to retaliate against U.S. products. The president previously has threatened to hit virtually all Chinese imports with duties.

Asked about his relationship with Vladimir Putin and the Kremlin’s alleged efforts to influence the 2016 presidential election, Trump quickly turned back to China. “They meddled,” he said of Russia, “but I think China meddled too.”

Sarah Reese Jones

@PoliticusSarah

Trump tried to blame Obama and then claimed that China meddled in the election when he was asked about Russia during the 60 Minutes interview. #60Minutes

“I think China meddled also. And I think, frankly, China … is a bigger problem,” Trump said, as interviewer Lesley Stahl interrupted him for “diverting” from a discussion of Russia.

JM Rieger

@RiegerReport

TRUMP on KIM JONG UN: I get along with him, okay?

STAHL: But you love him.

TRUMP: Okay. That’s just a figure of speech. pic.twitter.com/IyAOLQlpaV

JM Rieger

@RiegerReport

TRUMP on whether Russia interfered in the 2016 election:

“They meddled. But I think China meddled too.” pic.twitter.com/4AEjYwoovq

View image on TwitterView image on TwitterView image on Twitter

Shortly before an audacious speech by Mike Pence last weekend, in which the US vice president effectively declared a new cold war on Beijing (see “Russell Napier: Mike Pence Announces Cold War II“), Trump made similar accusations during a speech at the United Nations last month, which his aides substantiated by pointing to long-term Chinese influence campaigns and an advertising section in the Des Moines Register warning farmers about the potential effects of Trump’s tariffs.

Meanwhile, in a rare U.S. television appearance, China’s ambassador to the U.S. said Beijing has no choice but to respond to what he described as a trade war started by the U.S.

“We never wanted a trade war, but if somebody started a trade war against us, we have to respond and defend our own interests,” said China’s Ambassador Cui Tiankai.

Cui also dismissed as “groundless” the abovementioned suggestion by Vice President Mike Pence that China has orchestrated an effort to meddle in U.S. domestic affairs. Pence escalated the rhetoric in a speech Oct. 4, saying Beijing has created a “a whole-of-government approach” to sway American public opinion, including spies, tariffs, coercive measures and a propaganda campaign.

Pence’s comments were some of the most critical about China by a high-ranking U.S. official in recent memory. Secretary of State Michael Pompeo got a lecture when he visited Beijing days later, about U.S. actions that were termed “completely out of line.” The tough words followed months of increases tit-for-tat tariffs imposed by Washington and Beijing that have ballooned to cover hundreds of billions of dollars in bilateral trade.

During a recent interview with National Public Radio, Cui said the U.S. has “not sufficiently” dealt in good faith with the Chinese on trade matters, saying “the U.S. position keeps changing all the time so we don’t know exactly what the U.S. would want as priorities.”

Meanwhile, White House economic director Larry Kudlow said on “Fox News Sunday” that President Donald Trump and Chinese President Xi Jinping will “probably meet” at the G-20 summit in Buenos Aires in late November. “There’s plans and discussions and agendas” being discussed, he said. So far, talks with China on trade have been “unsatisfactory,” Kudlow said. “We’ve made our asks” on allegations of intellectual property theft and forced technology transfers, he added. “We have to have reciprocity.”

Addressing the upcoming meeting, Cui said he was present at two previous meetings of Xi and Trump, and that top-level communication “played a key role, an irreplaceable role, in guiding the relationship forward.” Despite current tensions the two have a “good working relationship,” he said.

* * *

Separately, CBS interviewer Stahl tried to get Trump to commit to not firing special counsel Robert Mueller, who’s leading the investigation into Russian interference in the 2016 presidential campaign. Trump refused to do so, telling her: “I don’t pledge anything. But I will tell you, I have no intention of doing that. I think it’s a very unfair investigation because there was no collusion of any kind.”

Switching to other topics, during his discussion of Brett Kavanaugh’s confirmation to the Supreme Court, Trump took credit for getting his nomination through the Senate around Christine Blasey Ford’s allegations that the judge tried to sexually assault her when they were in high school.

Finally, as Bloomberg notes, the president left the door open to reviving the practice of separating migrant parents and their children at the Mexican border, something the Washington Post reported last week was under consideration within the administration: “There have to be consequences … for coming into our country illegally,” he said, arguing that “part of the reason, I have to blame myself, the economy is so strong that everybody wants to come into the United States.”

Pressed again, he added: “You can’t say yes or no. What I can say is this: There are consequences from coming into a country, namely our country, illegally.”

END

This should be bothersome to many: Goldman sees “unheard” of collapse in Chinese smartphone demand

(courtesy zerohedge)

Apple Earnings In Jeopardy: Goldman Sees “Unheard” Of Collapse In Chinese Smartphone Demand

It’s not just auto sales that are tumbling in China: according to Goldman there are “multiple signs” of rapidly slowing consumer demand in China across all products.

While this would have a dramatic impact on China’s economy, which as we noted recently has been manipulating official data to represent solid industrial profit growth even as individual companies have indicted that profits have been shrinking sharply in recent months…

… Goldman is especially concerned how this could adversely affect Apple demand in China this Fall.

Specifically, Goldman references the substantial weakness in Chinese macro indicators, with the PMI dropping to 50.8 in September from 51.3 in August and 51.5 in June, auto sales deteriorated to -12% Y/Y in September vs. -4% Y/Y in August and July, “and early Golden week indications are lackluster.”

But the punchline is that according to Goldman calculations, smartphone unit volume deteriorated by ~15% Y/Y in Q3 which is “unheard of in a typically seasonally strong Q3.” And, as Goldman analyst Rod Hall notes, though most of the smartphone weakness was in the mid and lower range “we find it hard to believe that this general environment is going to be helpful to Apple unless things improve late in the year.

How would this plunge in smartphone demand impact Apple’s bottom line?

According to Goldman, China currently contributes ~13 million of Apple’s ~80m total iPhone unit forecast in the Dec ’18 QTR. That 13 million unit forecast implies that Apple will continue to lose share in the high end smartphone category (to 30% in Q4’18 from 32% in Q4’17) though it also assumes demand in that category is unaffected by macro.

Goldman then shows a sensitivity of Apple’s China iPhone revenue, total revenue and EPS to various market growth and share conditions. Here are the details:

In our central case, we are assuming ~$11bn of revenue from China in Dec ’18 quarter. In an even worse scenario, in which the China SP market declines 15% Y/Y in CQ4’18, our estimates for China could be 4.5% lower. We note, however, that this would have just a ~1% impact on our overall revenue growth estimate for Apple in CQ4. What we believe China really puts at risk is Apple’s ability to beat market expectations on the FQ1 to Dec. guidance. A prudent forecast here (by Apple) would likely be very conservative given market conditions while consensus expectations for Apple are generally perceived to be conservative in our view.

China iPhone revenue is 18% of total iPhone revenue in our current estimate for Dec ’18 and 12% of total revenue. In the tables below we show sensitivity of total revenue and EPS to market conditions in China discussed above.

The key takeaway from Goldman’s analysis is that Apple’s Dec ’18 EPS could end up dropping 4% in a worst case scenario if China’s weakness is indeed as bad as indicated.

4.EUROPEAN AFFAIRS

ITALY

Italy declares war on Merkel:  the strategy behind the next moves of our two coalition partners

(courtesy Tom Luong/two commentaries)

Italy Declares War On Merkel And The EU

Authored by Tom Luongo via The Strategic Culture Foundation,

If there were ever any doubts that the leaders of the Euroskeptic coalition that now runs Italy has a plan to defy the European Union its proposed budget should quell them. Both Deputy Prime Ministers, Luigi Di Maio of Five Star Movement and Matteo Salvini of The League, were adamant about locking horns with European Union leadership over all issues of sovereignty between now and May’s European Parliamentary elections.

Their budget proposal which included both tax cuts and universal income blew past the EU budget limit of 2.0% of GDP, coming in at 2.4%. It has put their Finance Minister, Giovanni Tria, in a difficult position because Tria doesn’t want to negotiate this budget with Brussels, preferring a less confrontational, read more pro-EU, approach.

Salvini and Di Maio, however, have other plans. And since I began covering this story last year on my blog, I’ve said that it was imperative that Salvini force the issue of the Troika’s demands – the EU, European Central Bank and the International Monetary Fund – back down their throats on debt restructuring/forgiveness.

What I meant then, and I was focused on Salvini’s emergence as the leader of this fight, was that Salvini and Italy, because they are more than technically insolvent, have all the leverage in the negotiations. The size of their outstanding debt and the liabilities existent on the balance sheets of banks across Europe, most notably the nearly $1 trillion in TARGET 2 liabilities, are something Juncker, Draghi, Merkel and Christine LaGarde at the IMF simply cannot ignore.

But, to do this Salvini and now Di Maio have to make a good faith effort to negotiate a good deal for Italy with Brussels, Berlin and the IMF. This is why the budget squeaked past the 2.0% limit and then they walked it back to 2.0% but with provisions they knew would anger the EU finance ministers.

The point of this is to push Brussels and paint them as the bad guys to shift public sentiment back towards an Italeave position. Italy’s problems are not solvable with Germany holding the purse strings for all the EU countries.

So, the first prong of their assault on the power structure of the EU is this, challenge them on their budget while making strong statements to the rest of Europe that they are not looking to exit the euro. If they do, it will be Germany forcing that situation.

The other prong of the assault is to remake the EU from within, which Salvini has openly stated is one of his goals.

It started more than a month ago when he met with Hungarian President Viktor Orban who agreed on a strategy of creating a ‘League of Leagues’ to unite the opposition to the current technocratic rule on the European Commission.

They were clear then that the goal was to wrest control of the European Commission Presidency from the coalition backing current President Jean-Claude Juncker.

With the rise in the polls of Euroskeptic parties across Europe, Salvini and Orban can drive real change in the structure of the parties within the European Parliament. The European People’s Party, which Orban’s Fidesz party is a member of, is vulnerable to losing its senior position in any coalition because of the huge change in Italy’s electoral make-up along with that in Austria with the less radical Sebastian Kurz.

But, the big swing is on the table in Germany. Alternate for Germany (AfD) is now pushing up towards 20% nationally and the next hurdle for its growth is this weekend’s Bavarian state elections. If AfD out polls the Greens and denies the CSU a path to a coalition government without them then that could have spillover effects for Angela Merkel.

The latest polls have AfD averaging around 11% versus a strong push up to 18% by the Greens. The CSU has collapsed to just 35%. How accurate these polls are are anyone’s guess at this point, but given recent history I would not be surprised to see AfD outperform their polling numbers on Sunday.

Figure 1: Source Wahlrecht.de

Because if they do and the CSU/Green total is less than 50%, the CSU may be forced to form a three-headed coalition to freeze out AfD. And this is assuming that the CSU and the Greens could form any workable coalition in the first place.

That would truly upset CSU leaders and the cries to break the Union with Merkel’s CDU would grow louder.

And with Merkel dealing with internal CDU disloyalty the possibility rises quickly that her national coalition could collapse amid external pressure from Salvini and Di Maio over budget and debt issues.

The markets are beginning to wake up to the fact that this political battle is not going to go as smoothly for Germany and the Troika as it did for Greece. Salvini and Di Maio are not Varoufakis and Tsipras and Italy is simply way more important than Greece.

The euro is weakening by the day while Italian bond yields are spiking. Traders do not know what to do as each statement by an official associated with this fight moves Italian debt markets by 20 basis points.

And, I shouldn’t have to say this too many times but 20 basis point moves in sovereign debt markets is the definition of ‘not normal.’

Populist forces within the EU are angry and their power is growing. The technocrats in Brussels still seem to think that the old rules apply but they do not. Scare tactics will not work on these men because they know that the ultimate move is to simply make preparations for a new currency, be it the mini-BOT that has been floated previously by Salvini or a new lira.

My read on the current state of affairs is as follows. Since the ECB is the only marginal buyer of Italian debt, which has been the case for more than a year now, any sharp rise in bond yields is a result of the ECB simply backing off that buying and market forces taking over.

This is the ECB’s biggest weapon. It will try to scare everyone by allowing Italy’s fiscal position to erode quickly making it impossible for them to issue debt at sustainable yields. But, it does so at the expense of the value of the bonds it and other European banks already hold. Because they are dropping in value, undercutting the solvency of those banks.

If the Italian leadership holds the line and refuse to back down, then they call the ECB’s bluff on allowing rates to rise. The ECB has to come back in, begin buying to support the price, and the regroup for the next battle.

That’s what we’ve been seeing for a few months now in the Italian bond market. That’s where this war is being waged as well as the headlines. And Salvini and Di Maio understand it. Because if they didn’t they would have already folded.

Instead they have doubled down on their opposition to Brussels and Berlin and added new vectors to their attacks.

This will not end well.

 

END

ITALY/GERMANY/PRIOR TO BAVARIAN ELECTIONS/SATURDAY NIGH

 

Salvini Stoking Italian Risk On Eve Of Critical Bavarian Elections

Authored by Tom Luongo,

So, let’s talk Germany v. Italy in a no-holds barred, tag-team grudge match for control over the future of the European Union.

Because, make no mistake, that is exactly what is on the table when we analyze what is happening in the EU.  Man of Many Hats, Matteo Salvini, is in the driver’s seat pushing the EU hard on Italy’s budget proposal to defy Troika — IMF, ECB and EU — rules on remaining in their debt assistance programs.

The problem, as I’ve pointed out many many times, is that Italy’s debt problem is so big that it cannot be absorbed or contained the same way Greece’s was in 2015 and 2011.  Moreover, Salvini’s position is far stronger politically than Silvio Berlusconi’s was in 2012 when he floated the idea of Italy leaving the euro to solve their debt problem.

Salvini’s League is polling well over 30% and its coalition partner Five Star Movement is polling near 30%, so together they have a committed majority of Italians on their side.

As Mike “Mish” Shedlock pointed out earlier in the week, every time Salvini goes up the hill to confront the EU Dragon his popularity rises.  And if the EU continues to try and reject the proposed Italian budget it will be thrown back to the Italian people to decide what to do.

Lega Leverage

And this puts Salvini in the position I said he needed to be in last year when The League started to rise in the polls.  He and his partner M5S’s Luigi Di Maio have put together a populist budget proposal which satisfies both of their divergent political bases while still skirting the edge of EU budget rules.

As a piece of political kit it is simply brilliant.  Because they are both casting Brussels as the bad guy at every turn while sticking to their campaign promises of tax, regulatory cuts (The League) and Universal Basic Income (M5S) and no compromises on Merkel’s immigration program.

And at no point is anyone talking about anything drastic like leaving the euro, even though all of this positioning by Salvini and Di Maio is a stalking horse for exactly that.

The polls are making it clear that Italians love what they are seeing.  Italeave is an idea that has to come to the Italian voters of their own accord.  Salvini and Di Maio have to cry crocodile tears about being good EU members and trying to reform it from within.

That’s what Salvini’s League of Leagues is all about and his burgeoning alliance with euroskeptics across the continent like Viktor Orban of Hungary, Marine Le Pen in France, Sebastian Kurz in Austria, etc.

In my latest article for Strategic Culture Foundation I discuss this fight in more detail with a look ahead to this weekend’s important Bavarian elections.

With the rise in the polls of Euroskeptic parties across Europe, Salvini and Orban can drive real change in the structure of the parties within the European Parliament. The European People’s Party, which Orban’s Fidesz party is a member of, is vulnerable to losing its senior position in any coalition because of the huge change in Italy’s electoral make-up along with that in Austria with the less radical Sebastian Kurz.

But, the big swing is on the table in Germany. Alternate for Germany (AfD) is now pushing up towards 20% nationally and the next hurdle for its growth is this weekend’s Bavarian state elections. If AfD out polls the Greens and denies the CSU a path to a coalition government without them then that could have spillover effects for Angela Merkel.

AfD has to upside surprise in Bavaria this weekend to ‘shake the pillars of heaven’ as it were and shift the global macro story away from the U.S. mid-terms and back towards the unfolding political crisis in Europe.

Anything over 15%  in Bavaria for AfD would be a big deal.

It’s the Debt, Stupid

But let’s not forget that there’s a brewing meltdown occurring in Italian debt markets at this point.  The 5-Year note closed this week above the May high on the formation of this EU-hostile government above 3%.

At the same time 5 year CDS spreads for Italian Sovereign Debt is back above 270 basis points.  The market is clearly handicapping for this showdown between Brussels and Rome to continue.

That said, I believe part of this is an attempt by the ECB and the banks to scare the Italians into backing down.  But, I don’t think it will work.  Salvini has seen this show before. He campaigned with Berlusconi after all, the man who was deposed during 2012’s last confrontation with Brussels.

So, don’t think he doesn’t know where all the leverage lies.  What he has to worry about is how strong his popular mandate is to got to the mat here and truly put Italy First.  And make the successful argument that the only way out of the current mess is to stay in the EU but leave the Euro or force Germany out of it.

And a rising AfD marks a hardening of the German position that they don’t want to bail out profligate Italian dead-beats.  The ones caught in the middle of this are the Eurocentric technocrats like Angela Merkel and Jean-Claude Juncker whose job it is to deliver further EU centralization of power to their Davos Crowd masters.

Which is likely why Italian currency redenomination risk is soaring again…

The American Question

Going back across the pond, this week’s market upheaval in the U.S. was a mix of institutional investors hedging against the Democrats regaining the House in November and retail investors getting nervous about tech stock valuations as as we enter earnings season.

I’m sure there’s a bit of anti-Trump help on the part of those same Davos Crowdcronies to push these markets around by the big players to scare ‘the muppets’ and make Trump look bad as we come into the mid-terms as well.

This is the downside to Trump taking so much credit for a stock market rise that he didn’t really have much control over, thanks to the ineptitude of EU leadership.

So, when I look at the landscape of whose political trajectory is rising and whose is falling I note with just a hint of irony that the Real Clear Politics Race for the House is tightening quickly the closer we get to election day.

That Kavanaugh Thing Really Worked Out Well Didn’t It?

Buried in the data is that 30 of the 32 “Toss-Ups” are seats currently held by Republicans.  And that base in the wake of the Kavanaugh insanity and the Democrats now openly calling for violence against wrong-think is fully woke.

Strategically, it almost looks to me that they know the polls are garbage, the Republicans will hold serve and so have already shifted their messaging to a post-election opposition strategy.

Why else would CNN allow Don “No Soul” Lemon call Kanye West a “Token Negro” if they thought they could win?

Because that’s not a #winning strategy there.

END
SUNDAY/GERMANY (BAVARIA)
The CSU suffers a stunning defeat as it loses its majority and that will spell trouble for Merkel
(courtesy zerohedge)

“This Is An Earthquake For Bavaria”: CSU Suffers Stunning Defeat, Loses Absolute Majority In Worst Result Since 1950

Voters in Germany’s economically dominant southern state of Bavaria delivered a stunning rebuke to the ruling Christian Social Union, in an election that delivered another crushing blow for the parties in Angela Merkel’s grand coalition in Berlin.

With all eyes on Sunday’s Bavaria election, moments ago the first exit polls showed a historic collapse for the ruling CSU party, which has ruled Bavaria continuously since 1957, and which saw its share of the vote collapse from 47.7% in the 2013 election to just 35.5%, losing its absolute majority and suffering its worst result since 1950, as voters defected in their droves to the Greens and the far-right Alternative for Germany.

German newspaper Welt called the election “the most painful election defeat of the past 50 years for the CSU”. As predicted in the polls, the CSU experienced a “historic debacle” in the Bavarian state elections, according to Welt. The CSU was followed by the Greens which soared in the election, more than doubling to 18.5% from 8.6% in 2013, the Free Voters also rose to 11% from 9.0%, in 2013.

Meanwhile, the nationalist AfD are expecting to enter Bavaria’s parliament for the first time ever with 11% of the vote, and as such are setting up for their post-election party. Party leader Alice Weidel already is having the first beer in the small community of Mamming in Lower Bavaria.

 

Meanwhile, the other establishment party, the left-of-center SPD also saw its support collapse from 20.6% in 2013 to just 10% today.

The full initial results from an ARD exit poll are as follows:

  • CSU: 35.5 %
  • Grüne: 18.5 %
  • FW: 11.5 %
  • AfD: 11.0 %
  • SPD: 10.0 %
  • FDP: 5.0 %
  • Linke: 3.5 %
  • Sonstige: 5.0 %

Visually:

The breakdown by gender did not show any marked variations when it comes to CSU support, although more women voted for the Greens, while far more men supported the AfD:

 

There was a greater variation by educational level, with highly educated voters tending more towards the green GRÜNE (G/EFA) and liberal FDP (ALDE) then the average, while low/middle educated voters tended more towards CSU (EPP) and AfD (EFDD)

 

This was the worst result for the CSU since 1950.

As the FT notes, the campaign was dominated by the divisive issue of immigration, in a sign of how the shockwaves from Merkel’s disastrous decision to let in more than a million refugees in 2015-16 are continuing to reverberate through German politics and to reshape the party landscape.

Alarmed by the rise of the anti-immigration, populist AfD, the CSU tried to outflank them by talking tough on immigration and picking fights with Ms Merkel over asylum policy.

But the strategy appeared to have backfired spectacularly by alienating tens of thousands of moderate CSU voters and driving them into the arms of the Greens.

Meanwhile, as support the CSU and SPD collapsed, the result confirmed the Greens’ status as the rising force in German politics. Running on a platform of open borders, liberal social values and the fight against climate change the party saw its support surge to 18.5%, from 8.4% in 2013. Meanwhile the AfD won 11%, and for the first time entered the Bavarian regional assembly.

“This is an earthquake for Bavaria,” said Jürgen Falter, a political scientist at the University of Mainz.

The CSU had governed the state with an absolute majority for most of the last 60 years. “It was Bavaria and Bavaria was the CSU. That is now no longer the case.”

The latest collapse of Germany’s establishment parties highlights the shaky ground the grand coalition in Berlin is now resting on as all three parties in the alliance, Merkel’s Christian Democratic Union, the CSU and the SPD, are haemorrhaging support. Some are now questioning whether the coalition, already frayed by personal rivalries and near constant bickering over policy, can survive a full term in office.

“This outcome throws ever more doubt on the future of the grand coalition,” said Heinrich Oberreuter, head of the Passau Journalism Institute and an expert on the CSU. “Based on current polls, if an election were held now, the CDU, CSU and SPD would not even command a majority in the Bundestag.”

The CSU will now be be forced to form a coalition government — a humiliating outcome for a party that has run Bavaria single-handedly for 49 of the last 54 years. Its preference is probably for a three-party coalition with the Free Voters, a small party that is mainly focused on local politics. It could also team up with the Greens, though it would be highly reluctant to do so: the two parties are deeply divided over immigration, transport and environmental policy.

* * *

What happens next?

Now that we know that the “unexpected comeback” scenario previewed earlier is off, here is what the “historic defeat” would mean for Germany in the coming days, as noted earlier by ING:

Historic defeat: The CSU would probably still lead the next Bavarian government with one or two coalition partners. There would be no significant shift in the federal upper house. Instead, Chancellor Merkel would emerge as the real winner of the election. The CSU would need some time to digest such an election defeat, focusing on inner-party issues and wasting less energy on conflicts with Merkel. As a result, the coalition in Berlin could again focus on implementing the substance of its coalition agreement. At the same time, however, a historic CSU defeat could be a worrying sign for Merkel, marking a new chapter in the deterioration of the conservative bloc. A significant loss would simultaneously fuel the AfD’s position as a strong opposition party, illustrating the increasing frustration of some voters with established parties, a trend which would definitely complicate coalition-building at the next federal election.

It could be worse: as Deutsche Welle noted earlier, the CSU collapse could lead to Seehofer’s resignation from Merkel’s government, and conceivably the exit of Markus Söder, Bavaria’s prime minister from the Bavarian state premiership, which would remove two of the chancellor’s most outspoken critics from power, and give her room to govern in the calmer, crisis-free manner she is accustomed to.

Furthermore, the heavy loss and potentially big resignations in the CSU might push a desperate party in a more volatile, abrasive direction at the national level. That would further antagonize the SPD, the center-left junior partners in Merkel’s coalition, themselves desperate for a new direction and already impatient with Seehofer’s destabilizing antics, and precipitate a break-up of the age-old CDU/CSU alliance, and therefore a break-up of Merkel’s grand coalition. In short: Anything could happen after Sunday, up to and including Merkel’s fall.

end
LATE MONDAY NIGHT: ITALY/BRUSSELS
this ought to be fun:  The Italian cabinet approves the budget which encompasses a deficit of 2.4%, much higher than what they demand  (2.0%!!).  Check to Brussels…
(courtesy zerohedge)

Italian Cabinet Approves 2019 Budget, Sends Plan To Brussels

Profile picture for user Tyler Durden

Italy’s cabinet on approved the country’s expansionary 2019 budget bill late on Monday, Prime Minister Prime Minister Giuseppe Conte said. Conte told reporters the budget “keeps our promises while keeping public accounts in order”, adding that the government had sent the budget framework to the European Commission in Brussels for its review.

Commenting on the budget, Italy’s Economy Minister Tria said the budget measures are all fully covered and budget allows “early retirement and basic income tools.”

Tria also said that a 2.4% budget is “normal” for a Western country (indicatively, today the US reported a 3.9% budget deficit), adding that the expansionary budget is necessary to counter the slowdown of the economy in the next year and said that concerns that the budget would spark a crisis in Europe are “totally unfounded.”

Tria said that he “thinks” he will be able to explain the budget to Brussels, which is expected to oppose the Italian proposal vocally, and also denied denies plans to resign after the budget is approved in Parliament.

Meanwhile, Italy’s deputy PM and interior minister Savlini said the budget does not include tax increases. He also said that he is “satisfied” with the 2019 budget and added that the early retirement bill will create some 400,000 jobs, while €500MM would be saved from lower migrant spending. Italy’s other deputy PM Di Maio said the budget “cuts privileges” to fund income for the poor, adding that citizens income would start in Q1 2019.

And now we await Brussels’ response response: the question is whether the EU will reject the budget outright which could unleash another bout of Italian bond volatility, or if it will be a long, drawn out process of back and forth negotiations which eventually culminates in the departure of Italy’s populist government as yields and “lo spread” blows out, as Brussels seeks to make another example of the upstart populist government.

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

SAUDI ARABIA
It seems that Khashoggi’s i watch was recording his murder and it was in sync with his iphone.  It looks like the Saudis realized that he was recording and tried to remove all the files.  They almost it but some remained.  Trump punished severe punishment if the Saudis would be proven to be caused the murder
(courtesy zerohedge)

Trump Vows “Severe Punishment” If Saudis Killed

Khashoggi

Facing pressure from Congress to act, President Donald Trump vowed “severe punishment” on Saudi Arabia if it turns out that missing WaPo reporter Jamal Khashoggi was killed in the Saudi consulate in Istanbul, as Trump turned up the pressure on the kingdom in an interview to be broadcast Sunday night.

“Nobody knows” whether Saudi officials are involved although they “deny it vehemently,” Trump said in an excerpt of a CBS News “60 Minutes” interview.”It’s being looked at very, very strongly. We would be very upset and angry if that was the case.”

“We’re going to get to the bottom of it, and there will be severe punishment,” the president said, noting that the Saudis denied “in every way you can imagine” having anything to do with Khashoggi’s disappearance when his son-in-law Jared Kushner spoke with Saudi Arabia’s crown prince. But Trump said the country may still be responsible and an investigation is ongoing. “Could it be them? Yes,” the president said.

Khashoggi, a Saudi critic of the regime who wrote for the Washington Post, disappeared since he entered the Saudi consulate in Istanbul on Oct. 2 to pick up a document for his upcoming wedding. Turkish officials have said they believe he was killed and dismembered there.

On Saturday, the Turkish pro-government newspaper Sabah daily reported that Turkey’s investigation into Khashoggi’s disappearance revealed recordings made on his Apple Watch purportedly indicating he was tortured and killed. The report was published  after a delegation from Saudi Arabia arrived in Turkey for a joint investigation into his disappearance.

“The moments when Khashoggi was interrogated, tortured and murdered were recorded in the Apple Watch’s memory,” the paper said, adding that the watch had synched with his iPhone, which his fiancée was carrying outside the consulate. The Turkish newspaper said Saudi intelligence agents had realized after he died that the watch was recording and they used his finger print to unlock it, deleting some files, but not all of them. The recordings were subsequently found on his phone, it said.

That said, considering that Turkey has all too often stretched reality to suit its various political goals and ambitions – the “failed” 2016 coup coming to mind – any official Turkish version of events, especially one based on “sources” and without factual backing should be taken with a grain of salt.

Perhaps that explains why despite the escalation in rhetoric, Trump was still hesitant. In Trump’s interview, the president said new actions should not jeopardize the Saudi military equipment contracts held by companies such as Boeing, Lockheed Martin and Raytheon which he said would put jobs at risk.

Using the economy as a straw man to avoid cracking down on Riyadh, Trump siad that “I don’t want to hurt jobs. I don’t want to lose an order like that,” he said. “There are other ways of punishing, to use a word that’s a pretty harsh word, but it’s true.”

“There’s a lot at stake,” Mr. Trump continued, “And, maybe especially so because this man was a reporter. There’s something, you’ll be surprised to hear me say that, there’s something really terrible and disgusting about that if that was the case.”

As Bloomberg notes, Trump’s hesitation to strike back at the kingdom reflects close ties the White House has nurtured with the nation’s de facto ruler, Crown Prince Mohammed bin Salman, and his administration’s acquiescence to other Saudi actions that have drawn international condemnation.

What is perhaps more bizarre is that the true Saudi transgression, its ongoing war against political and religious opponents in Yemen has failed to lead to any condemnation, by either the president or the suddenly all too vocal Congress. Under Trump, the U.S. has continued to back – and equip – a Saudi bombing campaign against Houthi rebels in neighboring Yemen that’s killed thousands of civilians, providing American logistical support and weapons.

Meanwhile, as senators push for sanctions against the Saudis if the murder allegations prove true, Trump has said only that he’d take unspecified action. “He went in and it doesn’t look like he came out,” the president observed in a Fox News interview.

Saudi Arabia insists Khashoggi left its consulate alive shortly, while Turkey claims it has proof, so far undisclosed, that the reporter was tortured and killed inside the consulate. What really happened has yet to be determined.

END
Meijer is very angry at the murder of Khashoggi and he says that the best remedy is by banning the purchase of Saudi Oil
(courtesy Meijer)

Ilargi Meijer Fumes “Ban Saudi Oil”

Authored by Raul Ilargi Meijer via The Automatic Earth,

According to Middle East Eye, Richard Branson, Andrew Ross Sorkin, Economist editor-In-chief Zanny Minton Beddoes, World Bank president Jim Yong Kim, New York Times, Financial Times, Uber CEO Dara Khosrowshah, Viacom CEO Bob Bakish and AOL founder Steve Case have all withdrawn from Saudi Arabia’s Future Investment Initiative conference, to be held this month in Riyadh. Branson also put a $1 billion investment plan on hold.

Also, on Wednesday, former US energy secretary Ernest Moniz said that he had suspended his role on the board of Saudi Arabia’s planned mega business zone NEOM, to which he was named on Tuesday. The Harbour Group, a Washington firm that has been advising Saudi Arabia since April 2017, ended its $80,000 a month contract on Thursday. JPMorgan CEO Jamie Dimon is still scheduled to speak at the conference, as is Mastercard CEO Ajay Banga, but they won’t risk the damage to their reputations.

All this is due, obviously, to the disappearance of Jamal Khashoggi, a former close aquaintance of the Saud family, who moved to the US and wrote for the Washington Post (how’s Amazon’s Saudi business, Jeff Bezos?) after falling out with the House of Saud.

As the what someone actually labeled “unfolding diplomatic crisis” takes shape, there is really only one thing to say about these people and organizations: they are the worst group of hypocrites ever. And their reasons to boycott the conference must be questioned.

Because before Khashoggi vanished they all apparently though it was quite okay to go feed at the Saud trough, despite the still ongoing slaughter of millions of people in the ‘war’ in Yemen. Which makes one suspect it’s not so much about their principles but about their public image.

Donald Trump said he won’t stop weapons sales to the Saudi’s because they would just buy their arms from someone else, like Russia (it would be interesting to get Putin’s view on Khashoggi). And while Trump is completely wrong here, at least he’s not hypocritical about it.

Not selling guns and tanks is by no means the most forceful action vs MBS and his dad, and not just because they can buy them elsewhere. What’s much stronger as a protest against what apparently happened to Khashoggi is to hit the Sauds where it hurts: in their wallet. That wallet is being filled by the sale of oil.

Simply stop buying their oil. Tell Shell and Exxon and BP and Total to get the hell out of the country. It’s just that to top off the hypocrisy, the best -only?- replacement for Saudi oil is Russian oil, and the US and Europe are engaged in a long drawn out smear campaign to isolate Russia from their world order.

But as long as Richard Branson flies his planes on Saudi oil, what’s the use of him boycotting a conference? Well, other than he hopes it makes him look good in the eyes of the world and feel good about himself? The carnage in Yemen has been going on for years, and all that time Branson has been silent. And was planning to get into a $1 billion investment as emaciated Yemeni babies are fed leaves.

And the idea is not to single him out, those major media organizations and the World Bank are just as bad.They all just hope that no-one will notice or speak out when they grab the Saudi money, and that when they are caught in the middle they will collect applause for making their ‘heroic’ decision not to attend a conference.

That said, it’s interesting to see the story move through the media. Is it the power of Jeff Bezos that gets it so much -and sustained- attention? Did the Saudi’s know that Turkey had their consulate bugged? Isn’t that against international law? How much Saudi oil does Turkey use? Did US intelligence know what was going to happen? Did Turkey?

Why so much more interest in this case than all the other disappearing journalists? Khashoggi is/was no Christ; he was close to the royal family for years while women and gay people and dissidents were under severe threat.

Just more hypocrisy. And if we want to end that, let’s boycott Saudi oil. Let’s use different oil, or none. And until then let’s not fall for the stage performances of all those who all of a sudden want to be seen as principled actors. That’s just about as bad as sawing a guy into pieces.

END
SUNDAY/SAUDI ARABIA
Saudi stockis crash as the nation becomes un investable..
(courtesy zerohedge)

Saudi Stocks Crash Most Since 2016 As Riyadh Threatens

Retaliation Against US

Saudi Arabia warned on Sunday it would respond to any “threats” against it as its stock market crashed the most since 2016 after President Trump’s warning of “severe punishment” over the disappearance of Washington Post contributor Jamal Khashoggi.

On Saturday, Trump said the U.S. could take “very, very powerful, very strong, strong measures” against the country if its leaders are found responsible for the Saudi citizen’s fate. The kingdom, which denies its involvement in Khashoggi’s disappearance, announced it would retaliate against any punitive measures with an even “stronger” response, the Saudi Press Agency reported, citing an official it didn’t identify.

“The kingdom affirms its total rejection of any threats and attempts to undermine it, whether through economic sanctions, political pressure or repeating false accusations,” the kingdom’s statement said. “The kingdom also affirms that if it is (targeted by) any action, it will respond with greater action.”

Saudi Arabia has traditionally been one of Trump’s closest foreign allies, the US president made a point of visiting the kingdom on his first overseas trip as president and has touted arms sales to Saudi Arabia. But both the White House and the kingdom are under mounting pressure as concern grows over the fate of the veteran journalist, who hasn’t been seen since he entered the Saudi Consulate in Istanbul on Oct. 2.

The Saudi response came after Saudi Arabian stocks slumped the most since 2016 amid a broad selloff over collapsing relations with the US, with the Tadawul All Share Index, or TASI, plunging by 7% at one point during the week’s first day of trading, the most since December 2014, with all but seven of the gauge’s 186 members fell, led by Saudi Telecom, which declined 6.2%, Jabal Omar lost 6% and Saudi Basic Industries Corp. retreated 1.9%. Selling volume soared, with the number of shares traded more than double the 30-day average.

At one point, the index fell more than 10% in four days and was virtually unchanged on the year at the close of trading.

The market clawed back some of the losses, closing down just over 4% later on. The Saudi benchmark fell 3.9% on Oct. 11, when the MSCI Emerging Markets Index plunged 3.2% following last week’s S&P rout. While the MSCI EM index recovered part of that loss on Friday, when it gained 2.7%, the Saudi selloff has re-accelerated as a result of the latest threat from Trump.

The escalation in tension between the two allies, and growing calls for Saudi Arabia to explain what happened to the missing writer, have raised concerns whether the kingdom can attract foreign investors needed to overhaul its economy according to Bloomberg. The diplomatic spat comes as the nation has been reforming its financial markets and has won inclusion in FTSE Russell and MSCI Inc. indexes for emerging markets.

You are talking about a geopolitical situation becoming even worse and Saudi Arabia is going to show its stubborn attitude again,” said Naeem Aslam, chief market analyst at Think Markets UK. This is not going to sit well with foreign investors. From where we sit, we don’t see any demand for Saudi equities at all.”

Neighboring markets were not spared either, with stock markets in Kuwait and Dubai dropping 1.9% and 1.5%, respectively; the Abu Dhabi’s ADX General Index dropped 0.7%. In Kuwait, all but one of the 16 members of the Boursa Kuwait Premier Market Price Return Index fall, dragging the measure down the most in almost a year. In Dubai, Emaar Properties and Dubai Islamic Bank are the biggest drag on the index, which closes at the lowest level since January 2016.

* * *

Foreign capital is key to Saudi Arabia’s plans to diversify its economy beyond oil and cut a 12.9% jobless rate among its citizens.

But in response to Khashoggi’s disappearance, media firms and some technology executives have pulled out of a major Riyadh investment conference scheduled for next week. As we reported yesterday, numerous company leaders backed away from the “Davos in the Desert”event later this month intended to showcase Prince Mohammed bin Salman’s modernization plan for his nation. Still, Trump said the U.S. would be “foolish” to cancel large arms deals with the Gulf state.

“This is happening at a time when Saudi Arabia is preparing for a big investment event and they don’t need people suspending or pulling out investments,” said Nadi Barghouti, head of asset management at Emirates Investment Bank in Dubai.

“Saudi is one of the world’s top oil producers, so one can’t sanction Saudi in the same way that one could sanction Iran,” Richard Sneller, the head of emerging-market equities at Baillie Gifford & Co. in Edinburgh, said last week. “Having said that, there are aspects of the Saudi regime that some people find less palatable and there are competing interests within Saudi as well. This is a very complicated country.”

* * *

While Trump has not described what punishment Saudi Arabia might face, he did indicate that Washington does not want to harm close defence ties, saying the United States would be punishing itself if it halted sales of military equipment to Riyadh. But U.S. senators have triggered a provision of the Global Magnitsky Human Rights Accountability Act requiring the president to determine whether a foreign person is responsible for a gross human rights violation. The act has in the past imposed visa bans and asset freezes on Russian officials.

Also, anti-Saudi sentiment in the U.S. Congress could conceivably raise pressure to pass the so-called No Oil Producing and Exporting Cartels Act, which would end sovereign immunity shielding OPEC members from U.S. legal action. Past U.S. presidents have opposed the bill but the chances of it being passed may have increased because of Trump’s frequent criticism of OPEC, which he accuses of driving up oil prices.

Meanwhile, as Reuters notes, there is concern Khashoggi’s disappearance could add to a sense that Saudi policy has become more unpredictable and uninvestible under Crown Prince Mohammed bin Salman, who is pushing social reforms to modernize the kingdom but has also presided over a rise in tensions between Riyadh and several other countries.

A Gulf banker told Reuters that the Khashoggi case, combined with other events, had become a significant factor for some potential investors in Saudi Arabia and that her bank was receiving many queries from foreign clients on how to interpret it.

“It’s cumulative – the Yemen war, the dispute with Qatar, the tensions with Canada and Germany, the arrests of women activists. They add up to an impression of impulsive policy-making, and that worries investors,” the banker said.

end
After speaking to the King of Saudi Arabia, Trump dispatches Pompeo to the Kingdom.
(courtesy zerohedge)

Trump Sending Pompeo To Saudi Arabia After Speaking

To Saudi King

As the mystery, and blowback, over the fate of missing Washington Post columnist Jamal Khashoggi grows, moments ago president Trump tweeted that he has spoken to the King of Saudi Arabia “who denies any knowledge of whatever may have happened to our Saudi Arabian citizen.” According to Trump, the King also said that “they are working closely with Turkey to find answer” and added that he is “immediately sending” Secretary of State Mike Pompeo “to meet with King.”

Trump’s tweet follows an escalation in rhetoric in which the president threatened Saudi Arabia with severe punishment if it is found that the Saudis were involved in Khashoggi disappearance and/or death, sending Saudi stocks plunging the most since 2016.

In response, Riyadh made a not so veiled threat to use the kingdom’s oil wealth as a political weapon – something which Bloomberg said was “unheard of since the 1973 Arab embargo that triggered the first oil crisis.”

On Sunday, Saudi Arabia said on Sunday it would retaliate against any punitive measures linked to the disappearance of Washington Post columnist Jamal Khashoggi with even “stronger ones.” In an implicit reference to the kingdom’s petroleum wealth, the statement noted the Saudi economy “has an influential and vital role in the global economy.”

Additionally, the fact that the Arabiya article was published only minutes after Saudi Arabia’s press release was issued led many to conclude it was either a message conveyed outside diplomatic channels or a trial balloon that quickly went flat.

Roger Diwan, a longstanding OPEC watcher at consultant IHS Markit Ltd., said the Saudi comments broke “an essential oil market taboo.”

While few think that Saudi Arabia is prepared to follow through, even the suggestion of using oil as a weapon undermines Riyadh’s long-standing effort to project itself as a force for economic stability. Jeffrey Currie, the head of commodities research at Goldman Sachs Inc., said Middle East tensions impacting the oil market have now “broadened to include Saudi Arabia.”

The tensions were exacerbated by an article written by Turki Al Dakhil, who heads the state-owned Arabiya news network and is close to the Royal Court, in which he openly talked about using oil as a weapon.

“If President Trump was angered by $80 oil, nobody should rule out the price jumping to $100 and $200 a barrel or maybe double that figure.”

As we noted overnight, the Saudi embassy in Washington later said Al Dakhil didn’t represent the official position of the kingdom and Saudi officials, speaking privately, said there wasn’t a change in the long-held policy that oil and politics don’t mix.

In an attempt to further defuse the tense situation, on Monday, Khalid Al-Falih, the Saudi energy minister pledging his country will continue to be a responsible actor and keep oil markets stable, during a speech in India.

“I want to assure markets and petroleum consumers around the world that we want to continue support the growth of the global economy, the prosperity of consumers around the world,” Al Falih said.

On Sunda, Saudi Arabia said it’s begun an internal investigation into the disappearance Khashoggi at its Istanbul consulate and could hold people accountable if the evidence warrants it.

Still, concerns about a potential retaliation by Riyadh using its oil output have spooked markets, with oil jumping in overnight trading.

To be sure, Riyadh could easily bring the global economy to its knees in the short-term by cutting output and sending prices sharply up, something we noted on Sunday afternoon as the kingdom pumps one-in-ten oil barrels produced worldwide, and holds nearly all the spare capacity available to respond to any supply outage.

Even just hinting that it won’t replace the barrels lost from Iran due to U.S. sanctions could be enough to push prices toward $100 a barrel.

But if the Saudis retaliate using oil, it would lead to “calamity,” said Stephen Innes, Singapore-based head of Asia Pacific trading at Oanda Corp. “This would be so destabilizing for global markets that it would make the current trade tensions between the U.S. and China look like a game of Axis & Allies.”

As a reminder, the last direction confrontation between Saudi Arabia and the US, namely the 1973-74 embargo, and the second oil crisis in 1979, destroyed oil demand for ever as industrialized countries taxed gasoline and diesel and embarked on conservation policies. Oil consumption is lower today than in 1974 in Germany, Japan, France, Italy and the United Kingdom.

end

the Saudi’s are now to admit that the killing of Khashoggi occurred as a result of a botched interrogation.  It sure looks that this is probably what happened.  You do not send 15 agents and a plane if the mark is to assistinated.

(courtesy zerohedge)

Saudi Arabia To Admit Khashoggi Killed During “Botched

Interrogation”

If you anticipated that Saudi Crown Prince Mohammad bin Salman – having been backed into a corner by Turkish spooks who had bugged the kingdom’s Istanbul consulate – would swiftly seek to blame the death of regime insider-turned-critic Jamal Khashoggi on some unfortunate underling, then congratulations. You were right.

Khash

Just hours after a spokesman for the regime revealed that the ailing King Salman had ordered an independent investigation into Khashoggi’s disappearance – a revelation that was effectively the first hint that the Saudis might soon be forced to admit that they played a role in it after repeatedly insisting on their story that he had left the consulate shortly after he arrived on Oct. 2 – CNN is reporting that the kingdom is planning to announce that Khashoggi’s death was “an accident” and that he died during an interrogation at the consulate as Saudi officials had been attempting to rendition him back to Saudi Arabia.

Jake Tapper

@jaketapper

BREAKING — 2 sources tell @clarissaward and @TimListerCNN that the Saudis are preparing a report that will acknowledge Jamal Khashoggi’s death was the result of an interrogation that went wrong, one that was intended to lead to his abduction from Turkey.

Jake Tapper

@jaketapper

BREAKING — 2 sources tell @clarissaward and @TimListerCNN that the Saudis are preparing a report that will acknowledge Jamal Khashoggi’s death was the result of an interrogation that went wrong, one that was intended to lead to his abduction from Turkey.

Of course, Trump had warned that there would be “severe consequences” if the Saudi government was found to have ordered Khashoggi’s killing – a claim that immediately elicited a threatening response from the kingdom, which hinted that it could “weaponize” oil prices if the US dares to pursue sanctions against it. Pinning the killing on a negligent underling (despite numerous reports that the order had been handed down by MbS himself) is probably the easiest way to defuse what has metastasized over the past week into a full-blown diplomatic crisis. We imagine MbS is also hoping to nip speculation that the Khashoggi incident could lead to him being removed as Crown Prince – though it’s never been clear who is even in a position to remove MbS, as the Crown Prince has spent the last two years consolidating power and marginalizing (or eliminating) rivals. And if the leaked details of the killing, details that have reportedly been culled from a clandestine recording made by Turkish intelligence, are, in fact, accurate, then it’s difficult to imagine how Khashoggi being dragged out of an interrogation room, murdered and then chopped into pieces could have happened by accident.

Saudi stocks slumped on the report:

Saudi

Earlier on Monday, President Trump had dispatched Secretary of State Mike Pompeo to Riyadh to get to the bottom of the situation. He probably hasn’t arrived yet. We imagine we’ll hear more about the Saudis’ position shortly after he arrives, if not before.

6. GLOBAL ISSUES

7  OIL ISSUES

Oil jumps on news that the Saudis are going on the offensive with respect to the Khashoggi affair

(courtesy zerohedge)

Oil Jumps After Saudi Official Floats “Trial Balloon” Op-Ed Envisioning “Oil Weapon” Devastation

WTI Crude prices are up around 2% in the early Sunday trading  after Saudi Arabia appears to be now attempting to go on the offensive and is lashing out as it does damage control in the aftermath of journalist Jamal Khashoggi’s alleged murder inside the Saudi consulate in Istanbul nearly two weeks ago.

What likely sparked the risk premium was the fact that Turki Al Dakhil, who heads the Saudi state-owned Arabiya news network, wrote in an article that U.S. sanctions against Saudi Arabia could wreak havoc on the global economy by taking oil prices to $200 a barrel and more. Faisal bin Farhan, a senior adviser to the Saudi embassy in Washington, said on Twitter that these comments didn’t represent the Saudi leadership.

“The most powerful weapon Saudi has is oil and its investments,” said Fawaz Gerges, a professor of international relations at the London School of Economics. “ I doubt Saudi will decrease the production of oil to the world economy because it will hurt itself and I doubt that Saudi will withdraw its investments.”

And the reaction to the threat – though modest for now – will not please President Trump

 

So kick back and grab your popcorn: this could be the beginning of a spat and public relations meltdown with the U.S. as the Saudi Embassy in Washington on Sunday tweeted the following passive aggressive statement directed at the White House:

To help clarify recently issued Saudi statement, the Kingdom of Saudi Arabia extends it appreciation to all, including the US administration, for refraining from jumping to conclusions on the ongoing investigation.

Saudi Embassy

@SaudiEmbassyUSA

To help clarify recently issued Saudi statement, the Kingdom of Saudi Arabia extends it appreciation to all, including the US administration, for refraining from jumping to conclusions on the ongoing investigation.

SPAENG

@Spa_Eng

Official Source: KSA confirms its total rejection of any threats and attempts to undermine it.http://www.spa.gov.sa/1827989#SPAGOV

The kingdom now appears to be breaking under reacting to the pressure amidst countless international reports and Western leaders all pointing the finger at Riyadh for the pre-meditated murder of the Washington Post columnist and US resident.

This comes after President Trump told “60 Minutes” during a recent interview that the U.S. would be “very upset and angry” if the Saudi government was behind Khashoggi’s death, and added further that there would be “severe punishment” to follow.

But just as interesting are the strong signals being put out via Saudi official media. For the first time since 1973 Saudi Arabia appears to be threatening the oil weapon… or at least is doing so through trusted state journalists.

On Sunday almost simultaneous to publication the official KSA statement confirming “its total rejection of any threats and attempts to undermine it,” the head of state-funded Al-Arabiya News, Turki Aldakhil, published an article entitled, US sanctions on Riyadh would mean Washington is stabbing itself.

Notably, the article was published in English and didn’t hold back in terms of threats to both the West and global economy, warning Saudi Arabia possesses the ability cause “an economic disaster that would rock the entire world.”

The op-ed envisioned, or rather threatened, the following should the White House unleash Trump’s “severe punishment” on Saudi Arabia:

  • $200 a barrel oil
  • a Russian base in Saudi Arabia
  • Weapons contracts going to Russia and China
  • Iran taking over the Middle East
  • major hit to US defense contractors
  • collapsing global economy

The Al-Arabiya general manager and head editor wrote:

If US sanctions are imposed on Saudi Arabia, we will be facing an economic disaster that would rock the entire world. Riyadh is the capital of its oil, and touching this would affect oil production before any other vital commodity. It would lead to Saudi Arabia’s failure to commit to producing 7.5 million barrels. If the price of oil reaching $80 angered President Trump, no one should rule out the price jumping to $100, or $200, or even double that figure.

But Aldakhil quickly followed with a statement on Twitter, saying the views reflected in his editorial are his “personal opinions” and not the position of the official Saudi government.

Javier Blas

@JavierBlas

Head of Al Arabiya says his op-ed about the use of #oil weapon reflected his own views and not the #SaudiArabia government (as I warned, a trial balloon, allowing full deniability) #OOTT

#تركي_الدخيل

@TurkiAldakhil

لاحظت ان البعض ربط مقالتي هذه https://twitter.com/turkialdakhil/status/1051439871309561856?s=12 … بموقف الحكومة #السعودية الرسمي، وهذا غير صحيح، بل هو رأي شخصي فقط.

Yet it’s prominently featured by the kingdom’s foremost English publication… The op-ed continued by saying, “There are simple procedures, that are part of over 30 others, that Riyadh will implement directly, without flinching an eye if sanctions are imposed.”

60 Minutes

@60Minutes

“There will be severe punishment.” In his first 60 Minutes interview since taking office, President Trump tells Lesley Stahl that if Saudi Arabia is found to be responsible for journalist Jamal Khashoggi’s death, there will be consequences. https://cbsn.ws/2ISz6Gh

And responding to the broadly recognized fact that both the US and UK supply nearly the entirety of the Saudi military with hardware and training, the Al Arabiya chief editor went so far as to say US sanctions would drive Riyadh into the arms of Russia and China to fulfill its military needs. 

Imposing any type of sanctions on Saudi Arabia by the West will cause the kingdom to resort to other options, US President Donald Trump had said a few days ago, and that Russia and China are ready to fulfill Riyadh’s military needs among others. No one can deny that repercussions of these sanctions will include a Russian military base in Tabuk, northwest of Saudi Arabia, in the heated four corners of Syria, Israel, Lebanon and Iraq.

He claimed further that a break down in cooperation between Riyadh and Washington “will throw the Middle East, the entire Muslim world, into the arms of Iran…”

Yaroslav Trofimov

@yarotrof

Saudi Arabia threatening to ally itself with Iran/Hezbollah and open a Russian military base in Tabuk if US sanctions over Khashoggi’s death are imposed is a textbook definition of “cutting off its nose to spite its face.” http://english.alarabiya.net/en/features/2018/10/14/US-sanctions-on-Riyadh-would-mean-Washington-is-stabbing-itself.html 

OPINION: US sanctions on Riyadh would mean Washington is stabbing itself

I read the Saudi statement in response to the American proposals regarding sanctions on Saudi Arabia

english.alarabiya.ne

Underscoring the theme of Washington “stabbing itself in the back” by retaliating for Khashoggi’s death, the op-ed continued:

It will not be strange that Riyadh would stop buying weapons from the US. Riyadh is the most important customer of US companies, as Saudi Arabia buys 10 percent of the total weapons that these US companies produce, and buys 85 percent from the US army which means what’s left for the rest of the world is only five percent; in addition to the end of Riyadh’s investments in the US government which reaches $800 billion.

The US will also be deprived of the Saudi market which is considered one of the top 20 economies in the world.

It appears that the Saudi state is now openly “floating” such threats under cover of their official state journalists.

No doubt officials will deny that this is at all representative of their stance, but we fully expect more such “private opinion” op-eds to be circulated in the coming week. Should the Saudis and powers that be not find a way to vindicate Riyadh and crown prince MbS, things are about to get messy.

 

end

8. EMERGING MARKETS

ZIMBABWE

end

 

 

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

Euro/USA 1.1594 UP .0038 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 DEEPLY  IN THE RED EXCEPT GERMAN DAX 

 

 

 

USA/JAPAN YEN 111.82  DOWN 0.339  (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 1.3170 UP   0.0029  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3018  UP .0006 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 MONDAY morning in Europe, the Euro ROSE by 38 basis point, trading now ABOVE the important 1.08 level RISING to 1.1574; / Last night Shanghai composite CLOSED DOWN 38.81 POINTS OR 1.49%

 

//Hang Sang CLOSED DOWN 356/43 POINTS OR 1.38%

 

/AUSTRALIA CLOSED DOWN  0.97% / EUROPEAN BOURSES ALL RED EXCEPT GERMAN DAX

 

The NIKKEI: this MONDAY morning CLOSED DOWN 423/36 POINTS OR 1/87%

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED ALL RED EXCEPT GERMANY

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 356.43 POINTS OR 1.38%

 

/SHANGHAI CLOSED DOWN 38,81 POINTS OR 1.49%

 

 

 

Australia BOURSE CLOSED DOWN .97%

Nikkei (Japan) CLOSED DOWN 423.36 POINTS OR 1.87%

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1230.85

silver:$14.74

Early FRIDAY morning USA 10 year bond yield: 3.15% !!! DOWN 1 IN POINTS from FRIDAY’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 3.33 DOWN 1  IN BASIS POINTS from FRIDAY night. (POLICY FED ERROR)/

USA dollar index early MONDAY morning: 95.02 DOWN 20  CENT(S) from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

And now your closing MONDAY NUMBERS \1: 00 PM

 

Portuguese 10 year bond yield: 2.00% DOWN 4    in basis point(s) yield from FRIDAY/

JAPANESE BOND YIELD: +.14%  DOWN 1  BASIS POINTS from FRIDAY/JAPAN losing control of its yield curve/EXTREMELY VOLATILE YESTERDAY…DANGEROUS!!

SPANISH 10 YR BOND YIELD: 1.68% UP 0 IN basis point yield from FRIDAY/

ITALIAN 10 YR BOND YIELD: 3.55 DOWN 3   POINTS in basis point yield from FRIDAY/

 

 

the Italian 10 yr bond yield is trading 187 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS UP TO +.50%   IN BASIS POINTS ON THE DAY//

 

END

IMPORTANT CURRENCY CLOSES FOR MONDAY

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

Euro/USA 1.1591 UP .0035 or 35 basis points

 

 

USA/Japan: 111.92 DOWN .245 OR 25 basis points/

Great Britain/USA 1.3161 UP .0019( POUND UP 19 BASIS POINTS)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was ROSE BY 35 BASIS POINTS  to trade at 1.1591

The Yen ROSE to 111.92 for a GAIN of 25 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 19 basis points, trading at 1.3161/

The Canadian dollar gained 45 basis points to 1.2967

 

 

The USA/Yuan,CNY closed UP AT 6.9168-  ON SHORE  (YUAN down)

THE USA/YUAN OFFSHORE:  6.9178 (  YUAN down)

TURKISH LIRA:  5.7875

the 10 yr Japanese bond yield closed at +.14%

 

 

 

Your closing 10 yr USA bond yield UP 1 IN basis points from FRIDAY at 3.16 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.34 UP 2 in basis points on the day /

THE RISE IN BOTH THE 10 YR AND THE 30 YR ARE VERY PROBLEMATIC FOR VALUATIONS

Your closing USA dollar index, 95.03 DOWN 19 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 MONDAY: 1:00 PM 

London: CLOSED UP 33.31 POINTS OR 0.48%

German Dax : CLOSED UP 90.35 POINTS  OR 0.78%
Paris Cac CLOSED DOWN 0.91 POINTS OR 0.020%
Spain IBEX CLOSED UP 21,20 POINTS OR 0.24%

Italian MIB: CLOSED UP:  31.66 POINTS OR 0.16%/

 

 

WTI Oil price; 71.33 1:00 pm;

Brent Oil: 80.14 1:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    66.34  THE CROSS LOWER BY .04 ROUBLES/DOLLAR (ROUBLE H8ER by 4 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.9683 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD FALLS +.50 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:71.66

 

BRENT:80.73

USA 10 YR BOND YIELD: 3.15%

USA 30 YR BOND YIELD: 3.33%/

EURO/USA DOLLAR CROSS: 1.1581 ( UP 25 BASIS POINTS)

USA/JAPANESE YEN:111.78 DOWN .382 (YEN UP 38 BASIS POINTS/ .(LACK OF FOR.EXCHANGE SWAPS)

USA DOLLAR INDEX: 95.06 DOWN 17 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3154 UP 13 POINTS FROM YESTERDAY

the Turkish lira close: 5.7869

the Russian rouble:  65.69 UP 0.38 Roubles against the uSA dollar.( UP 38 BASIS POINTS)

 

Canadian dollar: 1.2986 UP 27 BASIS pts

USA/CHINESE YUAN (CNY) : 6.9168  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.9241 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.50%

 

The Dow closed  DOWN  89.14 POINTS OR 0.25%

NASDAQ closed DOWN 66.15  points or 0.88% 4.00 PM EST


VOLATILITY INDEX:  21.17  CLOSED DOWN  0.14

LIBOR 3 MONTH DURATION: 2.436%  .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

 

Gold Extends Gains As Bonds, Stocks, Dollar Slide

Sorry…

 

 

 

 

China started off hopefully and ended ugly overnight…

But Europe managed gains, riding the coat-tails of US pre-market algos…

Saudi stocks plummeted to 6-month lows…

And while US equities were down overnight, they ramped into the US open and then chopped up and down – generally higher for Dow and S&P and lower for Nasdaq – all day… until the Saudi headlines hit and sparked selling and an ugly close…

 

Trannies and Small Caps outperformed as Nasdaq notably lagged…ugly close…

 

The S&P was glued at its 200DMA all day, The Dow could not hold above its 100DMA, Nasdaq was unable to break above it 200DMA and Small Caps continue to be ugly…

 

VIX dipped a little today at front-end (remains above 20) but the term structure remains inverted…

 

The spike in volatility has been mostly in equity while other assets displayed a smaller increase…

 

Stocks continued to catch down to global central bank balance sheets, EM risk, and global systemically important banks…

 

Treasury yields were incredibly quiet today ending the day practically unchanged across the curve…

 

10Y Yields traded in an exceptionally tight 2bp range all day…

 

Among the lowest range days of the year…

 

But there was on bond that moved…

 

While the dollar drifted to 2-week lows… (the dollar has now flip-flopped higher and lower for 8 straight days)

 

Offshore Yuan trod water, finding upside resistance at the Yuan Fix…

 

The Turkish Lira rose for the 7th straight day…as Pastor Brunson arrived back on American soil.

 

Cryptos had a sudden spike overnight amid selling in Tether and remain marginally higher from Friday’s close…

 

Despite dollar weakness (and Saudi threats), crude and copper slipped lower on the day and PMs higher…

 

WTI Crude spiked at the open after the Saudi threat op-eds but faded all day and dipped when the CNN headlines hit late on…

 

Gold and Silver were bid during the Asia session and started to fade as Europe opened…

 

Gold tested its 100DMA (briefly)…

And Silver closed above its 50DMA for the first time since June…

And as a reminder, specs are about as short gold and silver as they have ever been (as of last Wednesday)…

 

Fear and Greed “off the lows” but still at “extreme fear”…

Finally we note that today’s disappointing retail sales data sent US “hard” economic data reeling back near one-year lows…

And as Gluskin Sheff’s David Rosenberg notes, don’t fall for the “storm” excuse…

 

 

 

market trading

The market seems to be suggesting that the world finances are in trouble.  Please remember the important paper written by Goldman re the world can no longer finance the USA’s 1.8 trillion dollar deficit and Fed debt roll off.

(courtesy zerohedge)

 

Yellen Speaks, Market Shrieks

US equity markets are tumbling from their pre-open algo buying-spree and while no obvious catalyst stands out, somewhat hawkish comments from former Fed head Yellen may have sparked some selling…

Yellen is speaking at a Mortgage Bankers Association conference in Washington:

  • *YELLEN SAYS 3% GROWTH IS TERRIFIC BUT DOESN’T THINK IT CAN LAST
  • *YELLEN: INVERTED YIELD CURVE A GOOD RECESSION SIGNAL IN PAST
  • *YELLEN: THIS TIME MIGHT BE DIFFERENT ON YIELD CURVE SIGNAL
  • *YELLEN: FED NEEDS TO MOVE RATES TO NEUTRAL, STABILIZE LABOR MKT
  • *YELLEN: NOT DESIRABLE FOR A PRESIDENT TO COMMENT ON FED POLICY
  • *YELLEN: POLITICIZING FED POLICY RISKS UNDERMINING INSTITUTION

So “keep hiking rates”…  “ignore the yield curve coz it’s different this time”, and “ignore President Trump…”

And the reaction – coincident – was notable…

 

 

market data/

Core retail sales missed badly rising just .1% month over month after the pundits were expecting a .6% rise.  If you take out autos then retail sales dropped.  This is a good indicator that the economy is faltering

(courtesy zerohedge)

Core Retail Sales Drops By Most In 16 Months As

Restaurant Spending Tumbles

After a disappointing slowdown in August, retail sales were expected to rebound in September but rather dramatically missed with headline data rising just 0.1% MoM (against expectations of a 0.6% rise).

 

However, while the “control group” beat expectations – rising 0.5% MoM (vs +0.4% exp), retail sales ex-Autos retail sales actually dropped in September by 0.1%, the biggest drop since May 2017…

Under the hood, 10 segments saw higher sales, 3 were lower…

Gas station spending dropped (likely price related), health and personal care stores also weakened, but the biggest drop was for restaurants spending, down 1.8% – the most since 2016 (which is being blamed on the Hurricanes)… shopping and consumer activities such as restaurant visits may have been affected in North Carolina and South Carolina in the aftermath of Florence, which made landfall on Sept. 14. At the same time,past experience indicates any negative fallout tends to be temporary and reverses in subsequent months.

So much for the exuberant consumer?

end

We now have the official numbers of the deficit for fiscal 2018 and it came in at an expected 779 billion dollars. For Fiscal 2019, with Trump’s mega spending in full force, it is estimated that it will come in at around 1.0 trillion dollars. We must now add 200 billion for auto/student loan s which is not included in the budget deficit but does need financing. Then we must now include the Fed roll off that needs to be financed, the uSA will need 1.8 trillion dollars in new funding requirements of which there is nobody to buy the stuff..

(courtesy zerohedge)

 

US Spending On Interest Hits All Time High As Budget

Deficit In Trump’s First Year Soars To $779 Billion

One month ago we already knew that the U.S. budget deficit for the 2018 fiscal year – Trump’s first full year in office – would be jarring after the August deficit soared to $211 billion, nearly double the deficit gap from one year ago(largely due to calendar quirks) which on a cumulative basis for the first 11 months of the fiscal year was a staggering $895 billion, $222 billion or 39% more than the previous year. This was largely due to outlays which climbed 7% while revenue rose a mere 1%.

Today at 2pm we got official confirmation of the rapid expansion in the US budget deficit when the Treasury announced that in Trumps first full fiscal year as president, the U.S. budget deficit grew 17% to $779 billion from $666 billion…

… the highest full year total since 2012 amid tax cuts and spending increases, if below the trailing 12 month total as of August which, as noted above, was a whopping $895 billion.

The budget gap for the 12 month period ended September was 17% greater than the same 12-month period a year earlier, as spending rose 3.2% and revenue gained just 0.4%.

The deficit as a share of GDP was 3.9% in fiscal 2018, up 0.4% point from the prior year.

To fund this deficit, the U.S. government borrowed $1.08 trillion from the public in Fiscal 2018more than double the amount borrowed in 2017 ($498.3 billion) and the most borrowed from the public in a fiscal year since FY’12.

There was some good news: contrary to more pessimistic expectations, the surplus for the fiscal year’s final month of September jumped to $119 billion, the largest windfall for the last month of any fiscal year on record. However, like in August, there were calendar effects in play – and if not for timing shifts, last month’s surplus would have been just $44BN, $7BN (13%) less than Sep ’17 surplus.

In actual terms, the surplus was the result of a sharp drop in Federal Outlays from $433.3BN in August to $224.4BN in September, down from $340.8BN a year prior. This was the lowest one month spending total since June 2013.

At the same time receipts jumped from $219.1BN in August to $343.6BN in September, fractionally lower than the $348.7BN collected a year prior.

But the most troubling observation in the latest data was that the government paid $523 billion in total interest in fiscal 2018, the highest on record.

But wait, there’s more, because as we warned last month, these numbers are set to deteriorate rapidly: according to the Congressional Budget Office, the government deficit will hit $973 billion in fiscal 2019 and rise above $1 trillion the next year. That would be the first time the deficit exceeds $1 trillion since 2012, when the American economy was still recovering from the Great Recession.

A key culprit for receipts not keeping up with spending are Republican tax cuts, while increased federal spending and an aging population have also contributed to the fiscal strains, though the GOP says tax reform enacted this year will spur economic growth and lift government revenue. Meanwhile, corporate income-tax receipts fell 31% in fiscal 2018 while individual income taxes gained 6.1%.

“America’s booming economy will create increased government revenues – an important step toward long-term fiscal sustainability,” Trump’s budget director, Mick Mulvaney, said in a statement accompanying the Treasury report. “But this fiscal picture is a blunt warning to Congress of the dire consequences of irresponsible and unnecessary spending.”

And more bad news: in order to finance the soaring budget gap, the US Treasury will aggressively increase the pace of debt issuance, borrowing $769 billion in the second half of the current calendar year. That would be the most since 2008. The full year number for 2019 is expected to be well over $1 trillion, and has been cited by some as the reason behind the recent blow out in interest rates.

Cited by Bloomberg, Trump’s top economist, Kevin Hassett, said this month the president will unveil measures soon to address the shortfall, although he did not provide specifics.

“The deficit is absolutely higher than anyone would like,” Hassett said. And, looking ahead, it’s set to keep rising indefinitely until finally something breaks.

end
USA economic/general stories
This is going to hurt:  the damage in Hurricane Michael may skyrocket into the billions as stealth fighter jets are unaccounted for.  The huge Tyndall AFB is a complete loss
(courtesy zerohedge)

Hurricane Cost May Skyrocket As Billions In Stealth Fighter Jets Unaccounted For; Tyndall AFB “Complete Loss”

After Hurricane Michael rendered Tyndall Air Force Base a “complete loss” from “widespread, catastrophic damage” – questions remain over nearly two-dozen F-22 Stealth Fighters which are unaccounted for.

Static F-15 display flipped overAccording to the New York Times, Tyndall is home to 55 stealth fighters, “which cost a dizzying $339 million each.” Before Michael hit, the Air Force evacuated at least 33 of the planes to Wright-Patterson Air Force Base in Ohio, however they would not comment on the status of the remaining 22 fighters. 

F-22 Raptor

Air Force officials have not disclosed the whereabouts of the remaining 22 planes, other than to say that a number of aircraft were left at the base because of maintenance or safety reasons.

An Air Force spokeswoman, Maj. Malinda Singleton, would not confirm that any of the aircraft left behind were F-22s.

But photos and video from the wreckage of the base showed the distinctive contours of the F-22’s squared tail fins and angled vertical stabilizers amid a jumble of rubble in the base’s largest building, Hangar 5. Another photo shows the distinctive jet in a smaller hangar that had its doors and a wall ripped off by wind.

All of the hangars at the base were damaged, Major Singleton said Friday. “We anticipate the aircraft parked inside may be damaged as well,” she said, “but we won’t know the extent until our crews can safely enter those hangars and make an assessment.” –NYT

F-22s are notoriously finicky and, as the Times puts it “not always flight-worthy.” The Air Force reported earlier this year that just 49% of F-22s were mission ready at any given time – the lowest rate of any fighter in the Air Force. The total value of the unaccounted-for fighters is arouind $7.5 billion.

The eye of Hurricane Michael traveled directly over Tyndall, peeling back stormproof roofs like tin cans and flipping over an F-15 fighter jet display at the base entrance.

When it was over, the base lay in ruins, amid what the Air Force called “widespread catastrophic damage.” There were no reported injuries, in part because nearly all personnel had been ordered to leave in advance of the Category 4 hurricane’s landfall. Commanders still sifting through mounds of wreckage Thursday could not say when evacuation orders would be lifted. –NYT

The last Air Force Base to suffer catastrophic damage was in 1992, when Category 5 Hurricane Andrew slammed into Homestead Air Force Base just south of Miami with winds estimated at 150 m.p.h. Two years later it was reopened as a smaller, Air Force Reserve base.

Tyndall, where about 3,600 airmen are stationed, sits on 29,000 acres that include undeveloped woods and beaches, as well as stores, restaurants, schools, a bowling alley and quiet, tree-lined streets with hundreds of homes for both active-duty and retired military. Video footage captured the ruin there, too: The high-powered storm skinned roofs, shattered windows, and tossed cars and trailers like toys, transforming the normally pristine base into a trash heap. Multistory barracks buildings stood open to the sky. –NYT

“Tyndall residents and evacuated personnel should remain at their safe location,” said Col. Brian Laidlaw on Thursday. “We are actively developing plans to reunite families and plan to provide safe passage back to base housing.”

end

Sears files for bankruptcy protection

(courtesy zerohedge)

Sears Files For Bankruptcy Protection, Lampert Steps Down As CEO

The melting ice cube that is Sears – once a shining beacon of American consumerism – has finally dissolved.

After missing a $134 million Monday debt payment, as was widely expected, CNBC reported early Monday that Sears filed for Chapter 11 Bankruptcy protection in bankruptcy court in White Plains, New York. To be sure, filing for Chapter 11 protection is a victory of sorts for Lampert, who has managed to convince a coterie of Sears’ largest secured creditors, including Bank of America, Citigroup and Wells Fargo, into extending a $300 million debtor-in-possession loan that will allow Sears to continue operating (albeit in an even more limited form) through the end of the year (though, if we had to guess, we’d speculate that Lampert secured the loan by convincing these banks that it was in their best interest to allow Sears management to continue slowly stripping assets from the company instead of resorting to a bankruptcy firesale).

Lampert has also secured another $300 million from outside investment banks (a loan that, we imagine, is backed by Lampert’s assurances that he is shopping for a buyer for Sears’ popular Kenmore appliances brand, though that buyer could end up being ESL, which has the power to forgive Sears debt in exchange for assets).

By staving off Chapter 7 liquidation, Lampert has set up his fund, ESL Investments, as a stalking horse during the bankruptcy auction process. ESL and Lampert own a combined 50% of Sears shares, and ESL is one of its largest creditors. Lampert said Monday that he will step down as Sears CEO but remain on as chairman, while Mohsin Meghji, managing partner of M-III Partners, will step up as the company’s chief restructuring officer.

As part of the bankruptcy, some 142 stores are expected to close by the end of the year, along with 42 that were already in the process of closing, while the company’s remaining 500+ stores will continue operating.

Sears

In a statement to the media, Lampert insisted that was doing everything he could “to help the company” succeed, though analysts have disputed this claim, as most believe Lampert is merely staving off the inevitable to allow his firm enough time to continue stripping assets at the best possible price, allowing ESL (and by extension, Lampert himself) to preserve as much capital as possible.

“Everything I’ve done as an investor has been to help the company succeed,” Lampert said. Though, as CNBC pointed out, many analysts dispute that. Lampert first merged the two struggling discount stores more than a decade ago, hoping to strengthen their market position and, ultimately, save their brands.

As CNBC reminds us, Sears has been in survival mode for more than a decade.

Unable to rely on the Sears’ business to pay the bills, Lampert instead sold or spun off many of its most valuable stores and brands.

Since its merger with Kmart, Sears has spun off its Lands’ End clothing brand, sold the Craftsman tool brand to Stanley Black & Decker and closed hundreds of stores. It spun out 250 of its best properties into real estate investment trust offshoot known as Seritage.

In a jarring reminder of just how far the company had fallen, some vendors, wary of Sears’ future, have demanded tighter payment terms. Others, like Whirlpool, stopped shipping all-together. Until it emerges from protection (or is liquidated), Sears will be run by an Office of the CEO, and independent directors will oversee the restructuring.

According to Bloomberg, the retailer has listed more than $10 billion in debts and more than $1 billion in assets in its filing, and has said it hopes to reorganize around a smaller base of profitable stores. Sears and Kmart stores will remain open with help from $600 million in new loans, but the company will shut 142 unprofitable outlets near the end of the year, on top of 46 unprofitable stores already slated for closure by November.

While liquidation is not currently imminent, like Toys R Us, before it, the retailer’s chances of surviving bankruptcy as a going concern remain slim.

As CNBC points out, it’s difficult for a retailer to make investments that would help secure its survival (like building an e-commerce platform) while making its creditors whole. The company’s last profitable year was in 2010, and last year, it rang up less than $17 billion in sales, half of the roughly $40 billion in revenue it brought in five years earlier. The company has had little free cash to reinvest in strategies that could save the struggling business, and since Lampert took over in 2006 after impressing Wall Street with his successful turnaround of discount retailer K-Mart, an entire generation of Americans have never visited the company’s stores.

Sears

And with that, Sears 125-year history is nearing its inglorious end, as the merciless engine of capitalistic creative destruction chugs on and as iguana-eating, online-retailing monopolists have a hearty chuckle at the company that was once upon a time America’s first Amazon.

 

SWAMP STORIES

We should not have expected less than the FBI;it seems that they concealed evidence that directly refutes the premise of the Trump Russia probe and also exonerates Papadopoulos

(courtesy zerohedge)

FBI Concealed Evidence That “Directly Refutes” Premise Of Trump-Russia Probe: GOP Lawmaker

After hinting for months that the FBI was not forthcoming with federal surveillance court judges when they made their case to spy on the Trump campaign, Texas Rep. John Ratcliffe (R) said on Sunday that the agency is holding evidence which “directly refutes” its premise for launching the probe, reports the Daily Caller‘s Chuck Ross.

Texas Rep. John Ratcliffe provided Sunday the clearest picture to date of what the FBI allegedly withheld from the surveillance court.

Ratcliffe suggested that the FBI failed to include evidence regarding former Trump campaign adviser George Papadopoulos, in an interview with Fox News.

Ratcliffe noted that the FBI opened its investigation on July 31, 2016, after receiving information from the Australian government about a conversation that Papadopoulos had on May 10, 2016, with Alexander Downer, the top Australian diplomat to the U.K. –Daily Caller

While Australia’s Alexander Downer claimed that Papadopoulos revealed Russia had “dirt” on Hillary Clinton, Ratcliffe – who sits on the House Judiciary Committee – suggested on Sunday that the FBI and DOJ possess information which directly contradicts that account.

“Hypothetically, if the Department of Justice and the FBI have another piece of evidence that directly refutes that, that directly contradicts that, what you would expect is for the Department of Justice to present both sides of the coin to the Foreign Intelligence Surveillance Court to evaluate the weight and sufficiency of that evidence,” Ratcliffe said, adding: “Instead, what happened here was Department of Justice and FBI officials in the Obama administration in October of 2016 only presented to the court the evidence that made the government’s case to get a warrant to spy on a Trump campaign associate.”

The FBI referred to Papadopoulos in a Foreign Intelligence Surveillance Act (FISA) warrant application – however what has been released to the public is so heavily redacted that it’s unclear why he is mentioned.

As The Hill‘s John Solomon notes, based on Congressional testimony by former FBI General Counsel James Baker – the DOJ / FBI redactions aren’t hiding national security issues – only embarrassment.

Other GOP lawmakers have suggested that evidence exists which would exonerate Papadopoulos – who pleaded guilty to lying to the FBI about his contacts with Maltese professor (and self-professed member of the Clinton Foundation), Joseph Mifsud.

Ratcliffe suggested that declassifying DOJ / FBI documents related to the matter “would corroborate” his claims about Papadopoulos.

Republicans have pressed President Trump to declassify the documents, which include 21 pages from a June 2016 FISA application against Page. House Intelligence Committee Chairman Devin Nunes has said that the FBI failed to provide “exculpatory evidence” in the FISA applications. He has also said that Americans will be “shocked” by the information behind the FISA redactions. –Daily Caller

President Trump issued an order to declassify the documents on September 17, but then walked it back – announcing that the DOJ would be allowed to review the documents first after two foreign allies asked him to keep them classified.

“My opinion is that declassifying them would not expose any national security information, would not expose any sources and methods,” said Ratcliffe. “It would expose certain folks at the Obama Justice Department and FBI and their actions taken to conceal material faces from the Foreign Intelligence Surveillance Court.”

Attachments area

Preview YouTube video Rep. Ratcliffe on seeking answers from Fusion GPS

Rep. Ratcliffe on seeking answers from Fusion GPS
end
Let us label this the “Pocahontas affair” and it is now getting out of control:
(courtesy zerohedge)

Elizabeth Warren Savaged On Social Media As DNA Gambit Backfires

Elizabeth Warren just owned herself after releasing a DNA test confirming that she’s as little as 1/1024th Native American – about half the percentage of the average white person.

Michael Ahrens@michael_ahrens

So Elizabeth Warren is *possibly* 1/1024 (0.09%) Native American.

Scientists say the average European-American is 0.18% Native American. (https://www.nytimes.com/2014/12/25/science/23andme-genetic-ethnicity-study.html )

That’d make Warren even less Native American than the average European-American.

What’s more, the DNA expert she used, Stanford University professor Carlos Bustamente, “used samples from Mexico, Peru, and Colombia to stand in for Native American” as opposed to, say, DNA from a Cherokee Indian which Warren has claimed to be throughout her career.

Adding to the absurdity are two major corrections by the Boston Globe (which has become the media mouthpiece of Warren’s 2020 damage control efforts of late), letting readers know that “Due to a math error, a story about Elizabeth Warren misstated the ancestry percentage of a potential 10th generation relative. It should be 1/1,024,” and later updating it to “between 1/64th and 1/1,024th Native American.”

The reactions to Warren’s botched “reveal” have ranged from tenderfoot to savage

Matt Walsh

@MattWalshBlog

Elizabeth Warren has to go back 10 generations to find a non-white person in her family lineage. Warren is extremely, extraordinarily, almost completely white. Way whiter than the average whitey. That’s the real headline here.

Mañ-Made Material™@ManMadeMaterial

Who self-identifies with a group making up 1/64th or less of their genetic ancestry?@elizabethforma, that’s who.

That’s weird.#ElizabethWarrensSoWhite #ElizabethWarren

Makes as much sense as me identifying as Viking or Latino (I’ve got more of those than she has Nat Am).

Rita Panahi

@RitaPanahi

Elizabeth Warren edition of South Park.

Yellow Red Sparks

@yellowredsparks

You will now forever be 1/1024 Pocahontas

Ryan Saavedra

@RealSaavedra

MSNBC’s Craig Melvin on Elizabeth Warren being 1/1,024 Native American: “I think I might be as Native American as she is.”

Patrick Howley@howleyreports

The funny thing is, Warren thought this was a good play for her.

White people can be so out of touch.

Ben Shapiro

@benshapiro

Hilariously, Warren’s only Native American ancestor may have actually lived at the time of Pocahontas.

John Cardillo

@johncardillo

1/1024@elizabethforma’s percentage of Native American heritage is about the same as her chances of ever being POTUS.

Ned Ryun

@nedryun

To give perspective on what 1/1024th Native American means, the Eastern Band of Cherokee Indians have a minimum of 1/16th degree of Cherokee blood for tribal enrollment, while the Bureau of Indian Affairs’ Higher Education Grant expects you to have a minimum of 1/4th . . . #MAGA

Ned Ryun

@nedryun

So for all you who are clearly idiots, 1/1,024th means you’re super dooper white. It means anyone with that % claiming to be Native American is a fraud. . . Reminds me of Da Nang Dick aka Senator Vietnevermind aka @SenBlumenthal. Cute stories that have nothing to do with facts.

And a Benny Johnson superthread…

The Daily Caller‘s Benny Johnson laid out the Elizabeth Warren fraud in a 10-part tweetstorm which, in a rational world, would end the debate.

Benny

@bennyjohnson

Every Time Elizabeth Warren Has Lied About Her Native American Heritage:

(Thread)

1. Elizabeth Warren self-identified as a “Native American” in the The Association of American Law Schools Directory of law professors in every edition printed between 1986 -1995.

SWAMP STORIES COURTESY OF THE KING REPORT

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

Ex-Asst. Sec of Def @LongDefense: I met with Lebanon Minister of Defense Aoun.  There are over 1M registered Syrian refugees there with a population of 4M. That doesn’t count non-registered or Palestinian refugees. He fears political, resource and security tipping points will be reached soon.
    If Iran gets a foothold in Syria and continues to work though Hezbollah, and assuming Shia militia in Iraq will be backed by Iran, how do we best protect Israel and the increasingly fragile Jordan?  
Our Middle East strategy needs to protect our interests and be robust.
 
@GeorgePapa19: Australian media is reporting on air that “the professor”, Joseph Mifsud, the man who told me about “Clinton’s emails”, was not a Russian agent, but a British agent. If this is confirmed, this is the biggest scandal in modern political history.
 
Mitch McConnell @senatemajldr: The Senate has confirmed President Trump’s judicial nominees at a historic pace – 84 total, including Brett Kavanaugh and Neil Gorsuch to the Supreme Court, 29 circuit judges, and 53 district court judges. [Mitch & DJT are quietly changing the federal judiciary.]
 
Trump snubs Feinstein, Harris to nominate conservative judges to liberal 9th Circuit

 

-END-

I WILL  see you TUESDAY night
I DO NOT THINK I WILL BE ABLE TO BRING YOU A COMMENTARY ON WEDNESDAY
Harvey
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