OCT 19/GOLD CLOSED DOWN $1.70 TO $1225.70/SILVER IS UP 6 CENTS/CHINA TRIES TO SAVE THE DAY BUT PROBLEMS CONTINUE FOR ITALY..ALSO CONTAGION SPREADING TO SPAIN//AFTER THE MARKETS CLOSED MOODY’S LOWERED THE CREDIT RATING ON ITALIAN BONDS TO ONE NOTCH ABOVE JUNK AND THAT IS DANGEROUS!!/

GOLD: $1225.70 DOWN  $1.70 (COMEX TO COMEX CLOSINGS)

Silver:   $14.64 UP 6 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1226.40

 

silver: $14.65

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For comex gold and silver:

OCT

 

 

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  OCT CONTRACT: 649 NOTICE(S) FOR 64900 OZ

Total number of notices filed so far for OCT:  1681 for 168,100 OZ  (5.2286 TONNES)

 

 

 

 

 

FOR OCTOBER

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

0 NOTICE(S) FILED TODAY FOR

NIL OZ/

Total number of notices filed so far this month: 340 for 1,700,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $6600: DOWN  $22

 

Bitcoin: FINAL EVENING TRADE: $6531  DOWN  97 

 

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 ROSE BY 1040 CONTRACTS FROM 199,011 UP TO  199,051 DESPITE YESTERDAY’S 6 CENT FALL 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:

130 EFP’S FOR NOV.  1134 EFP’S FOR DECEMBER AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 1264 CONTRACTS. WITH THE TRANSFER OF 1264 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 1264 EFP CONTRACTS TRANSLATES INTO 8.600 MILLION OZ  ACCOMPANYING:

1.THE 6 CENT FALL IN SILVER PRICAT 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 2,050,000 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: 

30,050 CONTRACTS (FOR 15 TRADING DAYS TOTAL 30,050 CONTRACTS) OR 150.25 MILLION OZ: (AVERAGE PER DAY: 2003 CONTRACTS OR 10.016 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF SEPT:  150.25 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 21.42% 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:           2,369.76    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 INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 1040 DESPITE THE  6 CENT LOSS IN SILVER PRICING AT THE COMEX //YESTERDAY. THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 1264 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER (SEE COMEX DATA) .

TODAY WE GAINED A GOOD SIZED: 2304 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 1241 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 1040  OI COMEX CONTRACTS. AND ALL OF  DEMAND HAPPENED WITH A 6 CENT FALL IN PRICE OF SILVER  AND A CLOSING PRICE OF $14.58 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. 0.997 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: 0 NOTICE(S) FOR NIL 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: 2,050,000 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 ROSE BY A CONSIDERABLE SIZED 3606 CONTRACTS UP TO 472,903 WITH THE GAIN IN THE COMEX GOLD PRICE/YESTERDAY’S TRADING (A RISE IN PRICE OF $2.80).THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A VERY FAIR SIZED 2767 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:

 

NOVEMBER HAD 130 EFP’S ISSUED AND, DECEMBER HAD AN ISSUANCE OF 1134 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 472,903. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A STRONG OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 6373 CONTRACTS:  3606 OI CONTRACTS INCREASED AT THE COMEX AND 2767 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 6373 CONTRACTS OR  637300 OZ = 19.82 TONNES. AND ALL OF THIS DEMAND OCCURRED WITH A RISE IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF $2.80.

 

 

 

 

YESTERDAY, WE HAD 5623 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF SEPT : 122,792 CONTRACTS OR 12,279,000 OZ OR 381.92 TONNES (15 TRADING DAYS AND THUS AVERAGING: 8.186 EFP CONTRACTS PER TRADING DAY OR 818,600 OZ/ TRADING DAY),,

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 15 TRADING DAYS IN  TONNES: 381.92 TONNES

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

THUS EFP TRANSFERS REPRESENTS 381.92/2550 x 100% TONNES =  14.97% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:     6,057.74*  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 INCREASE IN OI AT THE COMEX OF 4686 WITH THE GAIN IN PRICING ($2.80) THAT GOLD UNDERTOOK YESTERDAY) //. WE ALSO HAD A GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 2767 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 2767 EFP CONTRACTS ISSUED, WE HAD A GOOD GAIN OF 7453 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

2767 CONTRACTS MOVE TO LONDON AND 3606 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 19.82 TONNES). ..AND ALL OF THIS GOOD DEMAND OCCURRED WITH A SMALL GAIN OF $2.80 IN YESTERDAY’S TRADING AT THE COMEX.

 

 

we had: 649 notice(s) filed upon for 64,900 oz of gold at the comex.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD DOWN $1.70 TODAY: / 

 

NO CHANGES IN GOLD INVENTORY

 

 

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   748.76 TONNES

Inventory rests tonight: 748.76 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 6 CENTS TODAY

NO CHANGES IN SILVER INVENTORY AT THE SLV

 

 

 

 

 

 

 

 

 

 

/INVENTORY RESTS AT 334.039 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 ROSE BY 1040 CONTRACTS from 198,011 UP TO 199,051  AND MOVING A LITTLE CLOSER TO 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:

i) 130 EFP’s for November… and

 

1134 CONTRACTS FOR DECEMBER AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1264 CONTRACTS . EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI GAIN AT THE COMEX OF 1040 CONTRACTS TO THE 1264 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A  NET GAIN OF 2304 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 11.52 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 OVER 2 million  OZ STANDING FOR THE NON ACTIVE MONTH OF OCTOBER.

 

 

RESULT: A INCREASE IN SILVER OI AT THE COMEX DESPITE THE 6 CENT PRICING LOSS THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD A GOOD SIZED 1264 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

 

 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i) FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED UP 64.05 POINTS OR 2.58% //Hang Sang CLOSED UP 106.85 POINTS OR .56% //The Nikkei closed DOWN 126/08 OR 0.56%/ Australia’s all ordinaires CLOSED DOWN 0.12%  /Chinese yuan (ONSHORE) closed DOWN  at 6.9315 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil DOWN to 69.02 dollars per barrel for WTI and 80.05 for Brent. Stocks in Europe OPENED RED MIXED///.  ONSHORE YUAN CLOSED SLIGHTLY DOWN AT 6.9315 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED SLIGHTLY DOWN ON THE DOLLAR AT 6.9284: 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)Chinese verbal suasion fails as their stock market rout continues.  Late in the session it recovered

(courtesy zerohedge)

ii)The reports out of China suggests a lacklustre economy with considerable inflation due to the weakening yuan.

( zerohedge)

iii)The South China Morning Post reports that Trump and Xi will meet at the 620 summit in November. Maybe the poor results from the latest Chinese financial data had something to do with this change of heart from China

( zerohedge)

 

4/EUROPEAN AFFAIRS

 

i)ITALY/SPAIN

An extremely important commentary:  we are now witnessing contagion as not only Italy’s 10 yr yield is rising to almost 3.80% but also Spain is beginning to see huge rises. It is important to remember the huge Goldman paper last week where the world is running out of currency swap room as the liquidity of dollars vacate, Japan, Europe and China.  Thus there is nobody out there that will fund the USA’s burgeoning deficit as they will need 1.8 trillion dollars this year:  1.2 trillion in a deficit (including student loans) and .6 trillion in Fed bond roll off..

a must read…

(zerohedge)

 

i b)Italy blinks? Italy thinks it may consider cutting the deficit to 2.1%

( zerohedge)

ic)oh oh!! this is bad.   Moody’s after the market closed cut Italy’s debt to just one notch above junk.  When it finally gets to junk rated then all of the bonds held by the Italian bans must be liquidated as well as all the bonds held by the ECB.  Now that will be fun

(courtesy zerohedge)

 

ii)EUROPE/DAIMLER CHRYSLER 

This is not a pretty picture for world growth as there is a massacre in the Mercedes sector of Daimler.  Two weeks ago we reported on the huge fall in German auto giant BMW and now we have the Chrysler sector plummeting.
(zerohedge)

iii)UK/EU

theresa May drops a key Irish border demand but that will bring her wrath from the conservative members of her party
(courtesy zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)SAUDI ARABIA
Vice President Mike Pence vows that there will be consequences if the Saudis orders the Khashoggi killing
( zerohedge)

ii)We are not sure if Pompeo heard the audio of the murder of Khashoggi. He may have the transcripts of the recording. It looks like Khashoggi was murdered after he refused to sign some documents

(courtesy zerohedge)

iii)TURKEY/SAUDI ARABIA

Turkish investigators think they know where Khashoggi is buried
(courtesy zerohedge)

 

6. GLOBAL ISSUES

CANADA

Canada is not doing too good after a good bout with inflation and a retail sales slump

( zerohedge)

 

 

 

7. OIL ISSUES

 

 

8 EMERGING MARKET ISSUES

BRAZIL
The Brazilian real tumbles to 3.72 after their central bank head is set to quit by year end
(courtesy zerohedge)

 

 

 

9. PHYSICAL MARKETS

i)With the BIS diminishing its intervention into the gold business, the gold price is rising a bit

( Robert Labourne) GATA)

ii)Two more crooks plead guilty to USA libor rigging. It should also include gold in that it is impossible to Libor rig without rigging gold

( Bloomberg/GATA)

iii)A must read…the key passage is that overseas USA dollars is vacating: Europe, Japan, China and this shortage of dollars will play havoc to the upcoming USA budgetary deficit

( Tom Luongo)

 

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

 

 

MARKET TRADING

 

ii)Market data

The USA housing sector continues to crap out: today existing home sales drop for the 7th straight month as USA home builder stocks collapse

( zerohedge)

 

iii)USA ECONOMIC/GENERAL STORIES

A canary in the coalmine:  Small Bank OZK plummets after shock real estate write downs!!
we will watch for further banks for writedowns
( zerohedge)

iv)SWAMP STORIES

a)You would think that this can only occur in the world of make believe:  a busted Senator McCaskill demands a special prosecutor over the Veritas undercover exposure of her.

( zerohedge)

b) A close associate of the Democrat leaning FBI has been arrested and sentenced to 4 years over illegal leaks

( zerohedge)

c)I think you will enjoy this one:  A dead Nevada brothel owner is expected to beat his Democrat opponent in the Nov election.

Have fun with this…

( zerohedge)

E)SWAMP STORIES/THE KING REPORT

Let us head over to the comex:

 

The total gold comex open interest ROSE BY A CONSIDERABLE SIZED 3606 CONTRACTS UP to an OI level 472,903 WITH THE RISE IN THE PRICE OF GOLD ($2.80 GAIN 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 A GOOD SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 2767 EFP CONTRACTS WERE ISSUED:

OCTOBER: 0 EFP’S AND DECEMBER:  2767 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  2767 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 6373 TOTAL CONTRACTS IN THAT 2767 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED 3603 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES:  6373 contracts OR 637,300 OZ OR 19.82 TONNES.

Result: A CONSIDERABLE SIZED INCREASE IN COMEX OPEN INTEREST WITH THE GAIN IN PRICE/ YESTERDAY (ENDING UP WITH THE RISE IN PRICE OF $2.80)THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES:  5373 OI CONTRACTS..

We are now in the active contract month of OCTOBER. For the October contract month, we lost 1 contract to fall to 765 contracts.  We had 1 notice yesterday, so we lost 0 contracts or NIL 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 21 contracts up to 375.  The next delivery month after November is the very big December contract month and here the OI rose by 2611 contracts up to 369,674 contracts.

 

 

 

 

WE HAD 649 NOTICES FILED AT THE COMEX FOR 64,900 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 ROSE BY 1040 CONTRACTS FROM 199,011 UP TO 199,051 (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 GAIN OCCURRED DESPITE A 6 CENT FALL IN PRICING.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF OCTOBER AND, WE WERE  INFORMED THAT WE HAD A GOOD SIZED 1264 EFP CONTRACTS:  FOR NOVEMBER:  130 CONTRACTS AND FOR …

 

FOR DECEMBER: 1134 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: 1264.  ON A NET BASIS WE GAINED 2304 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 1040 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 1264 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:   2304 CONTRACTS…AND ALL OF THIS DEMAND OCCURRED WITH A 6 CENT FALL IN PRICING YESTERDAY.

 

 

 

 

We are now in the non active delivery month of October and here we had a LOSS of 0 contracts to stand at 1 contracts.  We had 0 notices filed  YESTERDAY so we gained 0 contracts or AN ADDITIONAL nil oz will stand for delivery at the comex as these guys refused to accept a London based forward plus as well as a fiat bonus 

 

After October, is the non active delivery month of November and here we gained 124 contracts up to 1270 contracts.  After November, we have a December contract and here we GAINED 96 contracts UP to 157,761

 

 

 

 

 

 

 

 

We had 0 notice(s) filed for nil OZ for the SEPTEMBER 2018 COMEX contract for silver

 

Trading Volumes on the COMEX

 

PRELIMINARY COMEX VOLUME FOR TODAY: 184,353 contracts,

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  249,969  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 19-/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
 nil  oz
Deposits to the Dealer Inventory in oz NIL oz

 

Deposits to the Customer Inventory, in oz  

 

nil

 

oz

 

 

 

 

 

No of oz served (contracts) today
649 notice(s)
 6490000 OZ
No of oz to be served (notices)
116 contracts
(11600 oz)
Total monthly oz gold served (contracts) so far this month
1681 notices
168100 OZ
5.2286 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:  0 oz

total gold withdrawing from the dealer;  0 oz

 

we had 0 kilobar transaction/
we had 0 withdrawal out of the customer account:
total customer withdrawals:  0 oz
we had 0 customer deposit
total customer deposits: nil  oz
we had 2 adjustments..and I have been waiting patiently for this
i) Out of JPMorgan:  13,848.962 oz was adjusted out of the dealer and into the customer account and this would be deemed a settlement
but..
ii) Out of HSBC, the reverse:  64,237.698 was adjusted out of the customer and into the dealer account and this would be used to satisfy a dealer’s urgent need for gold.

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 649 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 469 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 (1681) x 100 oz or 100 oz, to which we add the difference between the open interest for the front month of OCT. (765 contracts) minus the number of notices served upon today (689 x 100 oz per contract) equals 179,700 OZ OR 5.5894 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 (1681 x 100 oz)  + {765)OI for the front month minus the number of notices served upon today (649x 100 oz )which equals 179,700 oz standing OR 5.5894 TONNES in this active delivery month of OCTOBER.

 

We lost 0 contracts or nil oz of gold will stand as these guys refused to morph into London based forwards and received a fiat bonus for their effort.

 

 

THERE ARE ONLY 5.987 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 5.5894 TONNES STANDING FOR OCTOBER  

 

 

 

total registered or dealer gold:  192,218.541 oz or   5.987 tonnes
total registered and eligible (customer) gold;   8,101,421.184 oz 251.98 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 19 2018
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 1,811149.532 oz
CNT

 

 

Deposits to the Dealer Inventory
1,232,968.170
oz
brinks
Deposits to the Customer Inventory
1,452,960.458
oz
jpm
cnt
No of oz served today (contracts)
0
CONTRACT(S)
nil OZ)
No of oz to be served (notices)
1 contracts
(5,000 oz)
Total monthly oz silver served (contracts) 409 contracts

(2,045,000 oz)

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

we had 1 inventory movement at the dealer side of things

i) Into Brinks:  1,232,968.170 oz

total dealer deposits: 1,232,968.170 oz

total dealer withdrawals: 0 oz

we had 2 deposit into the customer account

i) Into JPMorgan: 603,730.220 oz

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

JPMorgan now has 144.95 million oz of  total silver inventory or 50.3% of all official comex silver. (1443 million/287 million)

ii) Into  CNT:  879,030.238  oz

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today:  1,452,960.458  oz

we had 1 withdrawals from the customer account;

 

ii) Out of CNT: 1,811,149.532 oz

 

 

 

total withdrawals: 1,811,149.532 oz

 

 

we had 0 adjustments

 

 

 

 

 

 

 

 

 

total dealer silver:  77,197 million

total dealer + customer silver:  288.744  million oz

The total number of notices filed today for the OCTOBER 2018. contract month is represented by 0 contract(s) FOR nil 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 409 x 5,000 oz = 2,045,000 oz to which we add the difference between the open interest for the front month of OCT. (1) and the number of notices served upon today (0 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the OCT/2018 contract month: 409(notices served so far)x 5000 oz + OI for front month of OCT (1) -number of notices served upon today (0)x 5000 oz equals 2,050,000 oz of silver standing for the OCT contract month.  This is a huge number of oz standing for an off delivery month.

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

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 56.098 CONTRACTS  …

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 79,483 CONTRACTS..

 

 

YESTERDAY’S CONFIRMED VOLUME OF 62184 CONTRACTS EQUATES TO 399 million OZ  OR 57.0% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV RISES TO -3.53% (OCT 19/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -1.65% to NAV (OCT 19/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -3.53%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 12.41/TRADING 11.86/DISCOUNT 4.41.

END

And now the Gold inventory at the GLD/

OCT 19/WITH GOLD DOWN $1.70 : NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 748.76 TONNES

OCT 18/WITH GOLD UP $2.80/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RSTS AT 748.76 TONNES

OCT 16/WITH GOLD UP BY ONLY $1.00/WE HAD ANOTHER 4.12 TONNES OF GOLD ADDED TO THE GLD/INVENTORY RESTS AT 748.76 TONNES

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 19.2018/ Inventory rests tonight at 748.76 tonnes

*IN LAST 481 TRADING DAYS: 184.42 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 381 TRADING DAYS: A NET 27.89 TONNES HAVE NOW BEEN REMOVED FROM GLD INVENTORY.

 

end

 

Now the SLV Inventory/

OCT 19/WITH SILVER UP 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INV. RESTS AT 334.039 MILLION OZ

OCT 18/WITH SILVER DOWN 6 CENTS: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.127  MILLION /RESTS AT 334.039 MILLION OZ/

OCT 16/WITH SILVER DOWN 2 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.912 MILLION OZ/

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 3 WITH 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 19/2018:

 

Inventory 334.039 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

HUGE JUMP IN LIBOR AND GOFO RATES

YOUR DATA…..

6Month MM GOFO 2.29/ and libor 6 month duration 2.69

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

G0FO+ .40

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.60%

LIBOR FOR 12 MONTH DURATION: 3.00

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.40

end

I am no longer going to provide the COT report due to it being worthless as it does include the issuance of EFP’s

If somebody could give a valid reason for inclusion, then I will do so.

 

PHYSICAL GOLD/SILVER STORIES

Gold Reserves Surge 1,000% In Hungary As It Joins Poland, Russia, China and Other Central Banks Buying Gold

Gold Reserves Surge 1,000% In Hungary As It Joins Poland, Russia, China and Other Central Banks Buying Gold

News, Commentary, Charts and Special Podcast on Direct Access Gold

Here is our Friday digest of the important news, commentary, charts and videos we were informed by this week including our special podcast on Direct Access Gold.

From our perspective, the most important developments were the IMF’s financial warnings and the escalation in central bank gold buying with Hungary increasing its gold reserves by a whopping 1,000% due to increasing “safety concerns.”

For the first time since 1986, Hungary’s central bank is buying gold bullion – a lot of gold bullion.

The Eastern-European country announced that it had boosted its gold reserves ten-fold, up to 31.5 tons. It not only dramatically increased its reserves but also repatriated the gold from the Bank of England to Budapest due to concerns about “financial stability”.

Central banks in Europe are diversifying into gold or moving to repatriate and take “possession in country.”

Hungary and Poland are the most recent central banks to do this but they follow in the footsteps of Austria, Netherlands and the powerful German Bundesbank all of which have been repatriating their gold from the Bank of England and the Federal Reserve in recent months and years.


Source: Bloomberg

“Gold is still considered to be one of the world’s safest assets,” in the words of the Hungarian central bank.

This view is shared by the President of the ECB Mario Draghi who in February 2013 spoke about how “gold is a reserve of safety” which “gives you a value-protection against fluctuations against the dollar.”

Central bank gold reserves remain very small versus the scale of their massive foreign exchange holdings and their significant exposure to the vulnerable dollar in particular but also the euro and other fiat reserve currencies.

The trend of more and more central banks increasing their gold reserves is set to continue. We have long said this will happen and it is now coming to pass. It will likely intensify given the degree of geopolitical and financial uncertainty and tensions in the world – between both adversaries and increasingly between hitherto allies.

There is also the very real risk that the dollar is sharply devalued in the coming years as U.S. budget deficits surge again and Trump’s ballooning of the U.S. national debt becomes problematic.

Market Updates this Week

Do You Own Gold in the Safest Way Possible? Direct Access Gold Podcast

IMF Issues Dire Warning – ‘Great Depression’ Ahead?

Poland Raises Gold Holdings to Record High in September – IMF

Why It’s Worth Holding Gold Bullion in Your Portfolio

 

 


Charts via Bloomberg

 

Listen on iTunes,Blubrry  & SoundCloud  or watch on YouTube above

 

News and Commentary

Gold edges higher as Asian shares slip (Reuters.com)

EU Says Italy’s Planned Budget Deviation is ‘Unprecedented’ (Bloomberg.com)

Dow drops more than 350 points in another bad day for struggling stock market (CNBC.com)

U.S. economy still on a strong growth path, leading indicator find, though dangers lurk (MarketWatch.com)

Pound recovers after PM says open to longer Brexit transition (Reuters.com)

China Stock Market Rocked by Forced Sellers; Yuan Hits Fresh Low (Bloomberg.com)


Source: Bloomberg

Central Banks In Hungary, Poland and Russia Are Buying Gold (QZ.com)

What’s next for US stock markets? (MoneyWeek.com)

Fractional reserve bullion banking and gold bank runs (GoldChat)

Trump Vs. The Fed: When Markets Crash, Who Is To Blame? (ZeroHedge.com)

Gold Breaks Out As Nasdaq Breaks Down – Raymond James (KingWorldNews.com)

The Student Loan Debt Crisis Is About to Get Worse (Bloomberg.com)

Gold Prices (LBMA AM)

18 Oct: USD 1,224.60, GBP 933.76 & EUR 1,062.83 per ounce
17 Oct: USD 1,226.75, GBP 933.68 & EUR 1,061.38 per ounce
16 Oct: USD 1,228.85, GBP 931.35 & EUR 1,061.73 per ounce
15 Oct: USD 1,233.00, GBP 937.70 & EUR 1,064.45 per ounce
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

Silver Prices (LBMA)

18 Oct: USD 14.52, GBP 11.06 & EUR 12.60 per ounce
17 Oct: USD 14.65, GBP 11.16 & EUR 12.69 per ounce
16 Oct: USD 14.76, GBP 11.16 & EUR 12.74 per ounce
15 Oct: USD 14.74, GBP 11.19 & EUR 12.71 per ounce
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

Learn More and Watch Direct Access Gold Video Here

DAG Video Still Play V2


Recent Market Updates

– How Do You Sell Your Digital Gold When the Internet Goes Down?
– IMF Issues Dire Warning – ‘Great Depression’ Ahead?
– Poland Raises Gold Holdings to Record High in September – IMF
– Why It’s Worth Holding Gold Bullion in Your Portfolio
– 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

Mark O’Byrne
Executive Director
end
Two more crooks plead guilty to USA libor rigging. It should also include gold in that it is impossible to Libor rig without rigging gold
(courtesy Bloomberg/GATA)

 

Ex-Deutsche Bank traders guilty in U.S. Libor-rigging trial

 Section: 

By Chris Dolmetsch
Bloomberg News
Wednesday, October 17, 2018

Two former traders at Deutsche Bank AG were convicted today by a New York jury of conspiring to rig Libor, a key interest-rate benchmark, handing a victory to U.S. prosecutors targeting behavior by individuals at financial institutions that have paid billions of dollars to settle government claims.

Matthew Connolly and Gavin Black were found guilty of trying to manipulate the London interbank offered rate, which is used to value trillions of dollars of financial products, from 2004 to 2011.

Since regulators began a global crackdown on how the Libor benchmark is set, banks including Deutsche Bank and Barclays Bank have agreed to pay more than $9 billion in fines. Dozens of traders have been fined, barred from the financial industry, or criminally charged in different countries. But only four, including Connolly and Black, have been found guilty at a U.S. trial, and the other two convictions were reversed. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2018-10-17/ex-deutsche-bank-trad.

END

With the BIS diminishing its intervention into the gold business, the gold price is rising a bit

(courtesy Robert Labourne) GATA)

Gold price steadies and rises as BIS intervention

diminishes

 Section: 

By Robert Lambourne
Wednesday, October 17, 2018

The Bank for International Settlements has just published its September statement of account, giving summary information on its use of gold swaps and other gold-related derivatives in that month:

https://www.bis.org/banking/balsheet/statofacc180930.pdf

The information provided in BIS monthly statements is not sufficient to calculate a precise amount of gold-related derivatives, including swaps, but the bank’s total estimated exposure as of September 30, 2018, was about 238 tonnes of gold, compared with about 370 tonnes at August 31, 2018, and about 485 tonnes as of July 31, 2018.

Thus there have been two straight months of substantial declines in the BIS’ largely surreptitious intervention in the gold market — a reduction of about 115 tonnes in August and another 132 tonnes in September

As the BIS’ intervention in the gold market has diminished steadily since July 31, the gold price has ended a multi-year decline, leveled out at $1,200, and has begun to rise:

https://www.kitco.com/charts/popup/au0182nyb.html

The BIS refuses to answer questions about what it is doing, why, and for whom in the gold market:

http://www.gata.org/node/17793

But it is evident that the bank, acting as broker for its member central banks, continues to trade actively in gold swaps.

The BIS’ declining involvement in gold swaps contrasts sharply not only with the steadying and rising gold price but also with the approximately 193-tonne increase in central bank gold holdings reported in the first half of 2018 and with the recent increase of 28.4 tonnes in gold reserves reported by the Hungarian central bank:

http://www.gata.org/node/18557

—–

Robert Lambourne is a retired business executive in the United Kingdom who consults with GATA about the involvement of the Bank for International Settlements in the gold market.

* * *

 END
A must read…the key passage is that overseas USA dollars is vacating: Europe, Japan, China and this shortage of dollars will play havoc to the upcoming USA budgetary deficit
(courtesy Tom Luongo)

Has China Finally Lifted Its Thumb Off Of Gold?

Authored by Tom Luongo,

There’s a lot of talk about the Yuan price of gold falling out of a price suppression channel.  Both Zerohedge and Nomura have weighed in on this.

The Yuan price of gold surged overnight to above CNY 8500 per ounce which is a major breakdown But it’s also indicative of something that has long been suspected during this gold bear market.

China doesn’t want the price of gold to rise.  Those accumulating gold — China and Russia — have zero incentive to accumulate at higher prices.   And the gold chart of the last three years bears out that they have had to come in at higher prices on pullbacks because market bottoms keep coming in higher and higher.

The 2015 low was around $1050.  2016 at $1146.  2017 the low after a pullback in July couldn’t breach $1208 during a strong post-U.S. election rally.  This year the price was briefly pushed below $1200 in the longest downtrend of the seven year bear market but has since popped back over $1230 with its sights now set on  $1250.

China may have no choice here but to let the price of gold rise.  Because conditions in other markets are changing rapidly.  So, ultimately, what China wants really may not matter anymore.

Remember, the eurodollar markets broke in late May this year as Jeffrey Snider at Alhambra Partners reminds us daily.

The PBoC cut the reserve ratio again recently to free up liquidity in Chinese banks but it doesn’t seem to have stemmed the tide.  And that’s why it has continually loosened the Yuan fix rate, now approaching 7 vs. the U.S. dollar.

Offshore dollar markets are the pool of real savings in the global economy and it determines where we are headed.  And the offshore dollar hoarders are pulling out of China… and Europe… and Japan…. and South America.

You get my point.

Looking at gold today then, the dollar is rising versus not only the Yuan thanks to the PBoC’s lower fix but also versus the euro, which has now decidedly brushed up against resistance at $1.16, saw its own shadow of Italian political crisis and ran screaming.

Major support at $1.155 is now Resistance

So here we have another example of the euro puking and gold rising.  This is the third time in just over a week.

Gold is not supposed to be up while the euro and yuan are down.  What this is telling us is that the short-term dollar liquidity selling pressure gold always goes through during the early stages of an emerging crisis is coming to an end.

And what comes now is the fear part of the crisis.  Retail investors are falling out of love with hedge-fund hotels like Facebook (NYSE:FB), Tesla Motors (NASDAQ:TSLA) and, today’s whipping boy, Netflix (NASDAQ:NFLX).

They are looking around at the craziness and buying some gold down here because it looks cheap (which it is) but not in the gutter either.  The recent failure of gold to break down below the 2016 low is giving bulls moxie.

Add to that institutional money is scared to death of the Democrats winning something on November 6th and we have some very choppy equity markets.

I expect a rally in the Dow and the S&P 500 after the Republicans hold the House and the Senate as that pressure fades.  But, the bigger concern for Dow bears at this point should be the ratcheting up of rhetoric between Italy’s leadership and the EU’s over Italy’s budget.

That is putting downward pressure on the euro while the ECB tries to scare the Italians into knuckling under with rising interest rates by not stepping in to buy Italian debt.  The middle of the Italian yield curve has gotten awfully bumpy this week.

That hump showed up last week and has persisted into this week.  For now the market doesn’t want to believe that Italy will lose its fight with the Troika — The ECB, the IMF and the EU — but with Deputy Prime Minister Matteo Salvini entertaining a run for Jean-Claude Juncker’s position as President of the European Parliament, that illusion may well shatter soon.

For now, the markets are caught between the rock of the Democrats’ Resistance to Trump and the hard place of Italian budget talks and the hope that Theresa May will cave to EU demands in Brexit talks.

But, once that worry lifts, like the U.S. equity markets, the European debt markets will let loose as clarity over the U.S.’s political future between now and the 2020 election will make the choice for smart money a whole lot easier.

And as I’ve pointed out in the past, German Chancellor Angela Merkel is on her last legs in Germany, despite the non-committal results of the Bavarian election.  For now, her troubles will be kept out of the headlines while the German political establishment tries to figure out how to maintain control.

But, this is yet another catalyst for gold in the short to medium term along with the worries over China’s shadow banking system melting down.

end

 

_________________________________________________________________________________________________

European Markets Sink On Italian Fears, China Surges

After GDP Miss; S&P Futs Flat

After another turbulent week for markets, which saw violent reversals in US stocks which soared on Tuesday on the back of the biggest short squeeze since the Trump election only to tumble on Thursday on a combination of fears about the hawkish Fed, Chinese margin calls, the Italian standoff with the EU, and concerns about slowing profits, Friday has so far been a relatively quiet session with US equity futures fading the initial move higher and trading close to unchanged.

Markets in Europe were far more downbeat, with the Stoxx 600 falling as much as 0.6% around 6am ET, retreating for a third session in a row…

… with the auto sector down 2.8%, while renewed concerns about Rome’s showdown with Brussels over the 2019 budget sent Italy’s FTSE MIB to a 19-month low, down 1.6%, and Italian bond yields to new multi year highs as EU nations warned Italy’s populist government its budget won’t fly, with signs of contagion apparent as yields on Spain’s 10-year bonds climb to the highest level since October 2017.

The European auto sector was the biggest loser as the stoxx autos & parts index tumbled after Michelin issued a warning of declining 2H sales in Europe and China,

The latest weekly flow data showed that European equity funds suffered outflows of $4.8b in week ending Oct. 17, the biggest redemption in 27 weeks, and bringing the year-to-date outflows now at $50.4bn.

Another sector that was hit was European banks, which were headed for their worst month since May, with a total decline of 8.1% in October; the sector was down 1.1% on Friday with Italian banks the largest decliners in the Stoxx 600 Banks Index after Fitch said their rating is under pressure from sovereign-related risks. The rating agency cited risks including capital erosion due to falling sovereign bond prices, higher funding costs, and macroeconomic uncertainty.

Several Italian banks were halted limit down, with all major banks sharply lower, including UBI Banca -6.2%, Banco BPM -5.5%, UniCredit -4.5%. Meanwhile, in Spain banks were also weak and remained in focus for a second day, with Bankia, Sabadell and CaixaBank among the worst performing stocks as Kepler analyst estimates €24b in potential losses following yesterday’s tax ruling.

“We remain cautious with banking stocks. There are risks associated with – especially European – bank balance sheets that are very hard to asses in the long term,” Philipp Vorndran, capital markets strategist at asset manager Flossbach von Storch told Bloomberg.

Earlier in the session, Asian shares traded mixed, with Japan, India, Taiwan and Australia lower, Korea and Hong Kong higher, while Chinese stocks soared after financial regulators vowed to keep risks under control. The intervention calmed markets and Chinese stocks closed up 2.6%, bucking the US trend set in the previous session.

In yet another verbal intervention overnight, Chinese Vice Permier Liu He said in an interview with Xinhua News Agency that the Chinese government pays high attention to healthy, stable development of the stock market, and financial regulators have recently announced new reform measures. He said that the stock market dropped due to external factors including falling global markets, interest rates hike in major countries. He also claimed that trade frictions with U.S. have also impacted the market but psychological effect is larger than actual result.

China’s efforts to halt this week’s furious selloff which pushed the Shanghai Composite below the key 2,500 level and to the lowest in 4 years, came as GDP data for the world’s second biggest economy missed expectations as the trade showdown with the U.S. starts to bite, printing at the lowest level since 2009.

Meanwhile, investors have a variety of other risks to pick and choose from as they wade through company earnings and grapple with Brexit, Italy’s confrontation with the EU over its budget and worsening American-Saudi relations over the disappearance of journalist Jamal Khashoggi.

In FX, the dollar swung between gains and losses as the scepter of contagion from Rome loomed large, with yields in Spain and Portugal climbing to new highs; Brexit-related fatigue meant traders were focusing on a speech by BOE Governor Carney later Friday amid a thin data calendar, while the loonie pared its weekly drop before Canadian inflation.

The euro also swung between gains and losses amid pressure on Italian bonds and signs that contagion was spreading to the region’s periphery. The common currency briefly flirted with a two-month low after Italy’s 10-year yield spread over Germany touched the highest in more than five years following a letter from the European Commission to Rome that said its spending plans were excessive.

The Bloomberg Dollar Spot Index was little changed after a two- day advance and was set for a weekly climb. The pound inched higher but was set for its first weekly decline in two. The yen weakened on news of China’s growth slowdown. U.S. Treasuries held steady, as did Britain’s gilts ahead of Carney’s speech.

Elsewhere, oil recovered from near the lowest level in almost a month. Both WTI and Brent are up over 0.5% on the day, at around USD 69/bbl and USD 80/bbl respectively. This slight increase is likely due to ongoing tension surrounding the disappearance of journalist Khashoggi, and what the US response will be when the investigation finishes. Although, OPEC have stated that prices are likely to decline in the coming weeks as they expect US output to increase.

Expected data include existing home sales. Honeywell, P&G, and Schlumberger are among companies reporting earnings.

 

Market Snapshot

 

  • S&P 500 futures up 0.2 to 2,776.75
  • STOXX Europe 600 down 0.6% to 359.63
  • MXAP down 0.2% to 153.01
  • MXAPJ up 0.01% to 480.60
  • Nikkei down 0.6% to 22,532.08
  • Topix down 0.7% to 1,692.85
  • Hang Seng Index up 0.4% to 25,561.40
  • Shanghai Composite up 2.6% to 2,550.47
  • Sensex down 1.7% to 34,178.75
  • Australia S&P/ASX 200 down 0.05% to 5,939.49
  • Kospi up 0.4% to 2,156.26
  • German 10Y yield fell 1.5 bps to 0.401%
  • Euro down 0.1% to $1.1442
  • Italian 10Y yield rose 13.5 bps to 3.309%
  • Spanish 10Y yield rose 9.1 bps to 1.819%
  • Brent futures up 0.8% to $79.93/bbl
  • Gold spot up 0.2% to $1,228.23
  • U.S. Dollar Index up 0.1% to 96.03

Top Overnight News from Bloomberg

  • China’s economic growth slowed more than expected in the third quarter, as weak industrial output data and what the government called the “severe international situation” challenged efforts to stabilize the economy and reach its growth targets. Gross domestic product increased 6.5 percent in the three months through September from a year earlier – that’s the slowest since the aftermath of the global financial crisis in 2009.
  • The U.K. and the European Union are inching toward a plan that could help unblock Brexit negotiations, raising hopes of progress after months of stalemate. It involves taking more time to do the deal, but it’s a risky one for May. Members of her Conservative Party have angrily criticized her and Foreign Secretary Jeremy Hunt said cabinet ministers have “lots of concerns.”
  • President Donald Trump Twitter feuds and controversies have overpowered the GOP economic message, and his persistently low approval ratings may dash any Republican hopes of avoiding the loss of House seats in the midterm elections less than three weeks away.
  • Saudi Price Prince Mohammed bin Salman is being shunned by investors since the disappearance Washington-based journalist Jamal Khashoggi. U.S. Treasury Secretary Steven Mnuchin withdrew from an investment conference in Riyadh, while Trump warned of ‘severe’ consequences.

Asian equity markets were mostly lower following a resumption of the tech-led losses on Wall St where the dampened risk-tone was attributed to various ongoing concerns including higher US interest rates, Italy’s budget deficit, Saudi foul play and the US-China trade dispute. ASX 200 (Unch) and Nikkei 225 (-0.6%) both declined although losses in Australia were stemmed by resilience in gold miners and in the largest weighted financials sector, while Japanese exporters took the brunt of the recent safe-haven flows into JPY. Elsewhere, Hang Seng (+0.4%) and Shanghai Comp. (+2.6%) were both initially negative as the mainland index extended on the prior day’s near-3% drop and as participants digested a slew of tier-1 data in which GDP Y/Y and Industrial Production missed estimates, although losses in the mainland were gradually pared as there were also various announcements from Chinese officials on supporting domestic companies. Finally, 10yr JGBs were uneventful with only minimal support seen from the risk averse tone and paltry BoJ Rinban announcement for JPY 255bln in JGBs.

Top Asian News

  • Longest Lira Rally Since 2014 Has Traders Betting Worst Is Over
  • It’s a Long Way Down for China Stocks Channeling Past Traumas
  • Singapore’s Hyflux Gets Fund Lifeline From Indonesian Tycoons
  • China Electric Scooter Maker Raises $63 Million in Downsized IPO

Major European indices are mostly lower, with the exception of the SMI (0.25%) bolstered by Nestle (+1.8%), following an upgrade to buy at DZ bank, and the FTSE MIB (-1%) lagging, with Italian banks adversely affected by the EU Commission’s response to the Italian budget; UBI Banca are halted after falling 5.5%. In terms of sectors, consumer discretionary is the worst performer, down by over 1.5%, due to poor performance by Michelin (-7%), with Continental (-5.5%) and Pirelli (-4.9%) down in sympathy. The utilities sector is leading, supported by names such as National Grid +1%. In terms of individual equities Intu Properties (+11%), following a revised offer from the Peel Group. Bouygues (-9%) are lagging after the company lowered their profit guidance; closely followed by Intercontinental Hotels (-5.1%) as USD 500mln is to be returned to shareholders by means of a special dividend.

Top European News

  • ECB Negative Rates Seen Ending in 2020, First Hike Next Year
  • Brookfield Venture Offers $3.8 Billion for U.K. Mall Owner Intu
  • Hammond Gets Pre-Budget Boost as U.K. Fiscal Deficit Narrows
  • How One Serb Politician Might Und999999o Years of Balkan Peace
  • There May Be Bond Trouble Ahead for European Utilities: SocGen

In FX, the Dollar remains relatively well bid overall, albeit off best levels as the index straddles 96.000 and mtd highs ahead of a key Fib, at (96.155 and 96.236 respectively. However, some G10 counterparts have clawed back losses vs the Greenback on a mixture of pre-weekend short covering, consolidation and hedging against event risk. NZD – The major outperformer, and firmly back above 0.6550 vs the Usd, but mainly on cross flows vs the AUD and the potential for political fall-out from Sydney by-elections. Aud/Nzd has retreated sharply from recent highs towards 1.0800 and Aud/Usd is also recoiling to straddle 0.7100 from 0.7150+ levels earlier in the week (partly on encouraging labour market metrics). Note also, the Aud remains more prone to Chinese impulses and GDP data overnight disappointed. JPY – Mainly weaker within a 112.15-55 range vs the Usd in wake of soft Japanese inflation data overnight and more dovish BoJ policy guidance from Governor Kuroda. EM – The Rand is bucking a broad weaker trend in regional currencies vs the Buck with the aid of hawkish rhetoric from the SARB that indicated rate hikes if CPI rises in line with forecasts. Usd/Zar down to around 14.3375 at one stage.

In commodities, gold is marginally up, approaching USD 1230/oz once again staying in a USD 5/oz range; as the market environment is affected by market concerns such as Brexit, Italian Budget and lower than expected Chinese GDP data. London copper is flat at USD 6162/tonne, following it dropping by 1% yesterday; putting copper on track for its biggest weekly drop since mid-August. Both WTI and Brent are up over 0.5% on the day, at around USD 69/bbl and USD 80/bbl respectively. This slight increase is likely due to ongoing tension surrounding the disappearance of journalist Khashoggi, and what the US response will be when the investigation finishes. Although, OPEC have stated that prices are likely to decline in the coming weeks as they expect US output to increase.

Looking ahead, the only release of note is September existing home sales. Away from the data the Fed’s Kaplan and Bostic, as well as BoE Governor Carney, will be speaking in the afternoon. P&G, State Street, and Schlumberger will report their earnings.

US Event Calendar

  • 10am: Existing Home Sales, est. 5.29m, prior 5.34m
  • 10am: Existing Home Sales MoM, est. -0.94%, prior 0.0%
  • 12pm: Fed’s Bostic Speaks on Economic Outlook
  • 12:45pm: Fed’s Kaplan Speaks in New York

DB’s Jim Reid concludes the overnight wrap

Markets were decidedly queasy yesterday as there was a mini perfect storm of bad news to contend with. We had the  Italian/EC budget confrontation escalating, Mnuchin pulling out of the Saudi conference, and Spanish banks surprisingly losing a mortgage tax hearing and suffering heavy losses.

Italian 10-year bond yields rose +13.8bps to 3.68% – their highest level since February 2014 – as it looks increasingly likely that the European Commission will reject the country’s fiscal plan. Brussels sent a letter to Italy, asking for clarification on several points. While this isn’t unusual, it is the first step on the process which can result in rejection of the budget and eventually sanctions, and the letter was more sharply worded than usual. The letter described the budget as “an obvious deviation” from prior commitments, on an “unprecedented” scale. It noted that the Italian Parliament’s own budget watchdog declined to endorse the plan’s growth projections, which our economists also think are overly optimistic. On the Italian side, Deputy Prime Minister   Salvini said that the budget would not be changed by even “one comma,” setting up a potential confrontation.

The next week will likely see things escalate further given these tensions, an ECB meeting next week where little sympathy is likely to be given, and also the upcoming rating agency actions. S&P and Moody’s will likely act next Friday which could be a big focal point.

In a potentially worrisome signal, the problems in Italy spread beyond the BTP market yesterday. The euro weakened -0.37% versus the dollar and the Swiss franc rallied +0.34% versus the euro on safe-haven flows. 10yr Treasuries and Bunds rallied -2.6bps and -4.5bps respectively. Importantly non-Italian peripheral countries’ bonds sold off in unison, with 10-year yields in Spain, Portugal, and Greece rising +7.8, +8.3, and +11.9bps, respectively. Spain was also pressured by a surprise court ruling which shifted a mortgage tax away from consumers, who used to pay it, onto banks, who will now have to pay it. Spanish bank stocks fell -3.47%, while the Europe-wide banks index closed down -2.20%. Both indexes are at fresh two-year lows.

Sentiment deteriorated further early in the US session after news broke that US Treasury Secretary Mnuchin will not attend an investment conference in Riyadh amid the ongoing fracas associated with multiple press reports on Saudi Arabia’s alleged abduction and murder of a dissident journalist in Turkey. Oil fell just over -1%, more in line with the broader risk off.

With all this news the S&P 500 fell -1.42% yesterday, the 41st day of the year with a move of +/-1%, after only eight such days in 2017. The VIX again closed back just above 20. The DOW and NASDAQ fell -1.27% and -2.06%, respectively, leaving the three major US indexes each within 0.2pp of flat on the week. Most sectors fell, with consumer discretionary and tech again lagging as earnings failed to boost sentiment as they did earlier in the week. In Europe, the STOXX 600 pared gains of as much as +0.58% to close -0.51%, as sentiment deteriorated during the US session and as the selloff in Italy accelerated. The FTSEMIB lagged further, dropping -1.89%.

Corporate earnings were a bit more mixed yesterday, with the tech firm SAP and the cement maker HeidelbergCement both trading lower in Europe after negative reports. In the US, Keybank posted lower-than-expected loan growth, net interest margins, and fees, with the only bright spot a low tax rate. Commentary from BB&T met expectations, but the banks index still fell -1.88% to retrace half of its gains earlier this week.

This morning in Asia markets are largely heading lower with the Nikkei (-1.21%), Hang Seng (-0.34%), Shanghai Comp (-0.02%) and Kospi (-0.15%) all down. Markets have bounced off their lows though, especially in China (-1.38% in early trading) as the heads of the PBOC, the banking and insurance regulator and the securities regulator all issued statements overnight voicing their support for the market and promising measures to help ease financial pressures on companies, especially those with a high proportion of pledged shares. The PBOC Governor said in a statement on the central bank’s website that the recent stock market turmoil was caused by investor sentiment. The PBOC is studying measures to ease company’s financing difficulties and will also use monetary policy tool to support banks’ credit expansion. So heavy verbal rather than physical intervention.

This comes as China’s Q3 GDP surprised on the downside overnight at +6.5% yoy (vs. +6.6% yoy expected and +6.7% previously). China’s statistics bureau said in the accompanying statement that the downward pressure on growth is increasing with the “extremely complex and severe international situation” and heavy domestic development tasks while, adding the government will work to stabilize employment, finances, exports and foreign investment. In the meantime, China’s September industrial output stood at +5.8% yoy (vs. +6.0% yoy expected), retail sales came in at +9.2% yoy (vs. +9.0% yoy expected) and YtD September Fixed asset investment printed at +5.4% yoy (vs. +5.3% yoy expected). Japan’s September CPI came in at +1.2% yoy (vs. +1.3% yoy expected), core CPI came in line with expectations at +1.0% and core-core CPI stood at +0.4%, in line with consensus.

Elsewhere the Brexit situation continues to simmer, as Prime Minister May talked about “an option to extend the implementation period,” which would delay the politically difficult decisions regarding the Irish border. Deputy DUP Leader Nigel Dodds said that such a plan would do “nothing significant on the key issue,” while the eurosceptic Tory MP Jacob Rees-Mogg said that such a plan is “a poorly thought-through idea.” May has to navigate between these two flanks of her Government, and the next major test could be the budget vote in 10 days time as the DUP have previously threatened to withhold support. There’s lots of additional talk in the press about domestic political dissatisfaction with May’s approach so things remain on a knife-edge here. The pound fell -0.69% versus the dollar yesterday, and DB continue to think the market is underpricing the risk of a political crisis in the UK even if the base case is a deal by year-end.

In other European political developments, our EU Policy Research Team put out this preview of next year’s European Parliament elections which is topical given the political upheavals around Europe. Based on the latest polls, the centreright EPP and centre-left S&D would both lose seats, with gains split between the liberals (depending on if French President Macron’s En Marche party joins the alliance) and far-right populists. Net net, EU-sceptics could control more than 25% of seats in the European Parliament, but are unlikely to reach a veto-level majority. However this group could slow down and frustrate pro-European policy if they act in a coordinated manner. To read complete note click here .

Elsewhere liquidity in US money markets tightened yesterday, with the 3-month Libor fix rising +2.4bps to 2.469%, its sharpest move since March. There were some idiosyncratic aspects driving the move, such as a large Treasury bill auction settlement, but we think that spreads in money markets (e.g. Libor-OIS and fed funds-IOER) will continue to widen as the fed withdraws reserves and the Treasury expands its cash balance. The odds that the Fed makes another technical adjustment to its rates, i.e. by hiking IOER only 20bps, at the December meeting are rising.

On the data front, UK retail sales came in a bit soft, at -0.8% mom versus consensus expectations for -0.4%, the steepest drop of the year. In the US, the Philadelphia Fed business outlook survey printed at 22.2 versus expectations for 20.0, so a shade stronger-than-expected. The survey indicated that capex is running at a strong pace, as Pennsylvania expands its shale oil industry. Price pressures softened, remaining in positive territory but below their readings of most of the year. Initial jobless claims came in line with expectations and the Conference Board’s leading index rose 0.5% mom, consistent with our GDP growth expectations.

Looking ahead to today, we get the euro area’s August current account balance, Italy’s August current account balance, and the UK’s September public finances data. In the US, the only release of note is September existing home sales. Away from the data the Fed’s Kaplan and Bostic, as well as BoE Governor Carney, will be speaking in the afternoon. P&G, State Street, and Schlumberger will report their earnings.

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

i) Chinese yuan vs USA dollar/CLOSED DOWN TO 6.9315/HUGE DEVALUATION FOR THE PAST FOUR WEEKS RESUMES/CHINESE COMING TO USA FOR TRADE TALKS IN NOVEMBER CANCELLED //OFFSHORE YUAN:  6.9284   /shanghai bourse CLOSED UP 64.05 POINTS OR 2.58%

. HANG SANG CLOSED UP 106.85 POINTS OR .42%

 

 

2. Nikkei closed DOWN 126/08 POINTS OR 0.56%

 

3. Europe stocks OPENED RED/MIXED 

 

 

 

/USA dollar index FALLS TO 95.88/Euro RISES TO 1.1474

3b Japan 10 year bond yield: RISES TO. +.15/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.41/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD IS NOW TARGETED AT .11%/JAPAN LOSING CONTROL OF THEIR BOND MARKET

 

3c Nikkei now JUST BELOW 17,000

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

3e WTI:: 69.02 and Brent: 80.05

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

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

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

3h Oil DOWN for WTI and DOWN FOR Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.42%/Italian 10 yr bond yield UP to 3.70% /SPAIN 10 YR BOND YIELD DOWN TO 1.78%

3j Greek 10 year bond yield RISES TO : 4.49

3k Gold at $1228.15 silver at:14.65   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 24/100 in roubles/dollar) 65.84

3m oil into the 69 dollar handle for WTI and 80 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 112.41DESTROYING 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 0.9958 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1425 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 +0.42%

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 3.18% early this morning. Thirty year rate at 3.37%

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

6.  TURKISH LIRA:  UP  TO 5.6252

Futures Dr

 

3. ASIAN AFFAIRS

i) FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED UP 64.05 POINTS OR 2.58% //Hang Sang CLOSED UP 106.85 POINTS OR .56% //The Nikkei closed DOWN 126/08 OR 0.56%/ Australia’s all ordinaires CLOSED DOWN 0.12%  /Chinese yuan (ONSHORE) closed DOWN  at 6.9315 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil DOWN to 69.02 dollars per barrel for WTI and 80.05 for Brent. Stocks in Europe OPENED RED MIXED///.  ONSHORE YUAN CLOSED SLIGHTLY DOWN AT 6.9315 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED SLIGHTLY DOWN ON THE DOLLAR AT 6.9284: 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

Chinese verbal suasion fails as their stock market rout continues.  Late in the session it recovered

(courtesy zerohedge)

Chinese Verbal Intervention In The Market Fails As Stock Rout Accelerates

This morning, when we reported that the latest flood of margin calls, resulting from $600 billion in shares pledged as collateral for loans and representing a whopping 11% of China’s market cap, sent the Shanghai Composite tumbling 3% to the lowest level since November 2014, we noted that local government efforts to shore up confidence in smaller companies had, quite obviously, failed to boost sentiment… or stem the selling.

So, as many expected, just before Beijing announced the latest batch of stagflationary economic data including retail sales, industrial production and fixed asset investment, of which the most important was Q3 GDP which printed at 6.5%, the lowest level since Q1 2009, and missing consensus expectations even as inflation has continued to creep higher…

… the central bank delivered another round of massive verbal intervention, telling investors stocks are undervalued, the economy is sound, the central bank will use prudent, neutral monetary policy and keep reasonable, stable liquidity. Additionally, according to a Q&A statement with Governor Yi Gang posted on the PBOC website:

  • the PBOC will use monetary policy tools including MLF lending to support banks’ credit expansion
  • the PBOC to push forward bond financing by private cos.
  • the PBOC says recent stock market turmoil was caused by investors’ sentiment
  • the PBOC is studying measures to ease cos.’s financing difficulties
  • the PBOC to push forward bond financing by non-state firms; calls for private equity funds to support cos. with financing difficulties

In other words, the central bank’s “got this.”

And just to make sure the “all clear” message is heard loud and clear, also this morning the China Securities Regulatory Commission (CSRC) encouraged various funds backed by local government to help ease pressure on listed companies from share-pledge risks, in other words, the regulator itself told funds to stop the margin calls which – as discussed earlier – are now spiraling out of control as lower prices force more liquidations, resulting in even lower prices, and so on.

Additionally, CSRC Chairman Liu Shiyu said that moral hazard in China is alive and well, and urged local governments to help listed companies that have development potential, but face operational difficulties because of share pledge

The CSRC will also explore measures to help private firms, especially non-state-owned listed companies, to issue bonds; provide support to small- and mid-sized companies to issue high yield bonds and the regulator will also enhance a mechanism for share buybacks. Finally, the regulator would continue support for reforms and opening up, as well as encourage foreign asset management companies to set up offices in China (although if the market keeps crashing, who will bother?).

Still, despite the pep talk by both the regulator and the central bank, just minutes later the hard data came in and with GDP missing again, investors were disappointed; The economic slowdown also means that despite the “nudging” by the regulator, funds will be even more aggressive in demanding collateral, leading to even more margin calls after the Shanghai Composite and other key indexes broke decisively below the September lows. Meanwhile, instead of just talking the talk, China’s authorities will need to walk the walk by announcing further concrete stimulus measures, otherwise as Bloomberg notes, “all they have done is talk the market up to provide investors with more attractive exit levels.”

So what happened next? Well, as shown in the chart below, the Shanghai Composite attempted to stage a modest breakout after opening sharply lower, but that bounce fizzled quickly and after bouncing in the aftermath of the PBOC and CSRC jawboning, stocks resumed their slide when the GDP print hit, and were trading down 0.8% at last check, well below the key 2,500 support level, wiping out 4 years of gains.

What’s next?

Unless Beijing’s “National Team” steps in next with some truly aggressive buying in the open market, most likely in the last hour of trading – which however will only provide even more selling opportunities to big holders – today’s global rout may accelerate tomorrow now that China is on the verge of losing control of both its economy and its stock market

END
The reports out of China suggests a lacklustre economy with considerable inflation due to the weakening yuan.
(courtesy zerohedge)

Stagflation Looms As China’s Economy Suffers Weakest Growth Since Q1 2009

Chinese macro data has been serially disappointing for almost five straight months, and tonight – as Yuan tests down to cycle lows – all eyes are on the heavily ‘managed’ macro data to reasssure the masses that despite a 25-35% collapse in its stock market this year, all is well in the land of hidden debt.

China’s regulator already offered up some reassurance tonight that “China’s financial market volatility is not in line with the healthy status of the economy…” adding that “financial risks are controllable.”

Before tonight’s main meal of government-sponsored data is served up, we remind you, as we reported two weeks ago, an indicator produced by a Beijing-based business school in the style of the closely-watched purchasing managers index plunged last month, adding to concerns about the slowing economy and raising the question of whether business conditions may be worse than official statistics show.

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

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

“For most, business has never been worse.”

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

And heading into tonight’s print, yuan was weakening

So given all that, we are sure tonight’s data dump will be goldilocks – not too warm (because everyone would know it was fake) and not too cold (because we can’t signal that Trump is winning).

Before the data hits, bear in mind what Bloomberg noted, Chinese growth data has become both extremely predictable and frankly boring these last five years.

Reported figures have haven’t deviated by more than 0.2 percentage points from median forecasts since 2013. Another observation is if you look further back, it almost never comes in below expectations.

So here’s tonight’s data:

  • China Q3 GDPMissed at +6.5% YoY vs +6.6% YoY expectations (and +6.7% YoY prior)
  • China Sept Retail Sales Beat at +9.2% YoY vs +9.0% YoY expectations (and +9.0% YoY prior)
  • China Sept Industrial ProductionMissed at +5.8% YoY vs +6.0% YoY expectations (and +6.1% YoY prior)
  • China Sept Fixed Asset Investment Beat at +5.4% YoY vs +5.3% YoY expectations (and +5.3% YoY prior)

China’s economy faced increasing headwinds in the third quarter, with worsening trade tensions and the government’s deleveraging campaign undercutting growth. Those problems prompted officials to step up stimulus, but the impact of those measures has yet to kick in and more may be needed.

“We expect further escalation of US-China trade tensions going into 2019, which will likely be partially offset by CNY adjustment and more growth-supportive fiscal and monetary policies,” wrote JPMorgan economists led by Zhu Haibin, who expect growth to slow to 6.1 percent next year. “We expect fiscal and monetary policies to become more growth-supportive, providing a lift to headline GDP growth,” they wrote.

Chinese officials will have to step it up as the stimulus is not working

China GDP is the weakest on record aside from the peak of the financial crisis; Industrial Production grew at nearly its weakest on record; FAI was the weakest on record; but retail sales bounced…

China’s growth moderation has come as inflation quickens, with headline CPI climbing to 2.5% YoY in September, raising the prospect that the nation experiences at least some measure of mild stagflation.

China says downward pressure on growth is growing, according to the National Bureau of Statistic’s press release.

As Alhambra’s Jeffrey Snider recently noted, like 2015, these RRR cuts are showing us the eurodollar condition. China’s money problems aren’t really Chinese. They are money problems.

Finally, away from the shenanigans of opaque government-sponsored economic data propaganda, something just broke in the Yuan…

END
The South China Morning Post reports that Trump and Xi will meet at the 620 summit in November. Maybe the poor results from the latest Chinese financial data had something to do with this change of heart from China
(courtesy zerohedge)

Trump, Xi “Tentatively Agree” To Talks At G-20 Summit In Nov.

After a week that has been dominated by the diplomatic crisis over the presumed murder of Saudi journalist and US resident Jamal  Khashoggi, investors were wondering when the next headline about the ongoing US-China trade war would hit to redirect focus.

The answer was “today”, because after a series of conflicting reports last week, the South China Morning Postreported Friday that President Trump and Chinese President Xi Jinping have “tentatively” agreed to talks in November at the G-20 summit in Buenos Aires. Notably, this apparent confirmation that the Chinese have dropped their resistance to engaging with the US over its protectionist agenda comes just hours after China reported its weakest quarterly GDP print since 2009.

If confirmed, it would be the first face-to-face meeting between the two leaders in nearly a year and suggest both Washington and Beijing were ready to de-escalate the trade tensions. According to the report, a date has been set for Nov. 29, the day before the summit formally begins.

Quoted by SCMP, Chinese Vice-Premier Liu He, one of Xi’s top economic aides, told state media on Friday that Beijing and Washington “are contacting each other at present.” His comments came as Beijing is trying to shore up investor confidence in its stock market and economy. But the impact of the trade war on Chinese stocks was “more psychological than real,” he said.

The (repeat) news of the upcoming meeting sent US stock futures to their highs of the day, while the US dollar weakened as a risk-on mood made a prompt return.

Dollar

Of course, this is not the first time the meeting has been leaked, only to be denied after. So far, neither the White House nor China’s foreign ministry have released details of the leaders’ schedules for the G20 summit.

Derek Scissors, a resident scholar at the American Enterprise Institute, a Washington-based conservative think tank with close links to the Trump administration, said Trump and Xi “are going to have a meeting unless something happens.” The US and China “are trying to have a framework coming out of the meeting,” he said, without saying where he got his information.

He said he did not know how comprehensive the framework would be, but a short-term deal could be finalised in months.

“I don’t think the US could credibly promise we will not take any action against China before the election,” he said, referring to possible changes before the midterm election. “I don’t think anyone would believe that.”

News of a potential meeting between Xi and Trump comes amid growing hostilities between US and China on a range of issues other than the trade war, including the South China Sea, Taiwan, Xinjiang and allegations of espionage.

END

The real economic situation inside China

(courtesy Meijer)

Bubbles, Balloons, Needles, And Pins

 

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

It’s no surprise that China has its own plunge protection team – but why were they so late? – now that Beijing blames its problems on Trump’s tariffs. GDP growth was disappointing at 6.5%, but whoever believed those almost always dead on numbers? It would be way more interesting to know what part of that growth has been based on debt and leverage. But that we don’t get to see.

So we turn elsewhere. How about the Shanghai Composite Index? It may not be a perfect reflection of the Chinese economy, no more than the S&P 500 is for the US, but it does raise some valid and curious questions.

Borrowing from Wolf Richter, here are some stats and a graph::

  • Lowest since November 27, 2014, nearly four years ago
  • Down 30% from its recent peak on January 24, 2018, (3,559.47)
  • Down 52% from its last bubble peak on June 12, 2015 (5,166)
  • Down 59% from its all-time bubble peak on October 16, 2007 (6,092)
  • And back where it had first been on December 27, 2006, nearly 12 years ago.

The first thing I thought when I saw that was: how on earth is it possible that in an economy that’s supposedly been growing 6%+ for a decade, stocks have gone nowhere at all? And obviously the role of the Shanghai index is different from that of the S&P, the DAX or the FTSE, but at the alleged Chinese growth rate, the economy would have almost doubled in size in 10 years. And none of that is reflected in stocks?

And if you think Shenzhen is a better barometer of ‘real’ China, Tyler Durden had this graph yesterday. Not the same as Shanghai, but similar for sure.

But other aspects of the Chinese economy are perhaps more interesting, I think. China’s mom and pop are not typically in stocks. In the Zero Hedge article I took that graph from, there is also this:

“There’s a liquidity crisis in the stock market, and pledged shares are again starting to sound the alarm,” said Yang Hai, analyst at Kaiyuan Securities. [..] The fear is that if Beijing does nothing, the self-reinforcing liquidation is only set to get worse: with $603 billion of shares pledged as collateral for loans – or 11% of China’s market capitalization, – traders are increasingly concerned that forced sellers will tip the market into a downward spiral.

[..] China in June told brokerages to seek approval before selling large chunks of stock that have been pledged as collateral for loans, while the top financial regulator in August warned the industry that it’s closely watching corporate stock pledges. Neither of those warnings appears to have generated the desired outcome, and the result is that two-thirds of Shenzhen Composite stocks are now at 52-week lows or worse.

[..] what are investors to do in this time of panicked selling? Why demand more bailouts of course, like begging the National Team to step in and rescue them (just like in the housing market): “If there are no real policies to cure the array of problems and ailments in our market, no one will be willing to take the risk,” said Hai. “Authorities keep saying that there is room for more polices, but where are they?”

“It’s high time the state stepped in,” said Dong Baozhen, a fund manager at Beijing Tonglingshengtai Asset Management. “The national funds cannot just sit on the sidelines and watch this atmosphere of extreme pessimism.”

It’s this clamoring for the state to come to the rescue people who are losing money that would appear to define China today, where there is a stock market and housing market, and many ‘investors’ making lots of money, but where the mentality still seems to lurk back to days of old when things don’t only go up in a straight line.

There was another report recently of people demonstrating outside a property developer’s office because the firm had lowered purchase prices by 30%. Those that had paid full price now stood to lose that 30%. This happens frequently, and it can get violent. Mom and pop are not in stocks, they are in real estate:

Property accounts for roughly 70 per cent of urban Chinese families’ total assets – a home is both wealth and status. People don’t want prices to increase too fast, but they don’t want them to fall too quickly either,” said Shao Yu, chief economist at Oriental Securities.

The Chinese are thinking about leaders from Deng Xiao Ping to Xi Jinping that it’s great if they steer the country in a direction where everyone can get rich, but when things go awry, it’s still Beijing’s task to solve the problems if and when they occur. I would expect the same kind of thing in many western countries where people have borrowed heavily into housing bubbles, I don’t see mass foreclosures in Sweden, Denmark, Holland, but bailouts of people who grossly overpaid.

But the Chinese go a step further in their demands from central government. And that is an enormous problem for Xi going forward. One crucial facet of all this is psychologicalwhen people count on being bailed out by their government, they will take much more risk, borrow more, with higher leverage etc. If you allow people things like pledging shares to but more shares, or homes, and shares fall, you have an issue.

China’s well-known for companies buying each other’s shares to appear viable. It’s also known for local governments borrowing heavily from shadow banks in order for party officials to look as if they’re performing real well.

Now of course, if Beijing keeps on presenting all those growth numbers that look so solid, it’s asking for it. Moreover, the Party has lost control over the shadow banks, and it couldn’t act to regain that control if it wanted. It could initiate a program to forgive debt owed to national banks, but what’s owed to the shadows will have to be paid. We’re talking many trillions.

The Party has let the shadows in, because it made its own debt numbers look so much better. But when this whole debt balloon, on which so much of the GDP growth has rested, and the roads to nowhere and empty apartment blocks and cities, starts to pop, who are the Chinese going to turn to? For that matter, who is Xi going to turn to?

Yes, much of the western wealth has turned into a mirage, but in that respect, too, China has done what we did in a fraction of the time. Trump’s tariffs may play a role in a slowdown, but wait until the western economies deflate their debt bubbles and stop buying much of China’s products.

Bubbles vs balloons, that seems a proper way to phrase this. And for better or for worse, Jerome Powell is hiking interest rates. There’s your Needles and Pins.

4.EUROPEAN AFFAIRS

ITALY/SPAIN

An extremely important commentary:  we are now witnessing contagion as not only Italy’s 10 yr yield is rising to almost 3.80% but also Spain is beginning to see huge rises. It is important to remember the huge Goldman paper last week where the world is running out of currency swap room as the liquidity of dollars vacate, Japan, Europe and China.  Thus there is nobody out there that will fund the USA’s burgeoning deficit as they will need 1.8 trillion dollars this year:  1.2 trillion in a deficit (including student loans) and .6 trillion in Fed bond roll off..

a must read…

(zerohedge)

Spanish Yields Blow Out Amid Italy Contagion As Italian Banks Scramble For Dollar Funding

Contagion from the recent surge in Italian yields has spread, and is hitting Spanish 10Y yields which over the past 3 days have blown out from 1.65% to as high as 1.82% this morning, before paring some of the move, printing at 1.77% last which is still the highest level since October 2017.

There are also Spain-specific news that have pushed yields wider, to wit yesterday’s ruling by the nation’s Supreme Court they must pay a one-time tax of about 1% on mortgage loans that traditionally was passed to their clients. The report sent Spanish banks tumbling as much as 6.3% at Banco de Sabadell while banking giant BBVA dropped 1.8%, thanks to its larger international business that cushions the impact of the ruling.

The Supreme Court revised an earlier ruling, deciding now that the levy on documenting mortgage loans must be paid by the lenders, and since mortgages are one of the biggest businesses for domestic banks, analysts have been grappling with how big the hit to income would be. As Bloomberg notes, the sentence is one of a string from Spanish and European Union courts in recent years in favor of home buyers and at the expense of banks.

“The decision implies a severe setback for the Spanish financial system and joy for every mortgage-payer, who might get back a significant amount” of money, said Fernando Encinar, head of research at property website Idealista. In the short term, banks will likely raise their mortgage arrangement fees to compensate for their new cost, he said.

The levy is applied to the mortgage guarantee – the loan amount plus possible foreclosure costs – and could be roughly 1,500 euros ($1,728) on a 180,000-euro loan in Madrid, according to Angel Mejias, an attorney at M de Santiago Abogados in the capital.

“This is one more negative piece of news for banks, but the market is over-reacting as it is very difficult to calculate the real impact the ruling will have,” Renta 4 banking analyst Nuria Alvarez said by phone. “Margins are already under pressure from low interest rates and this adds to all the negative sentiment toward banks.”

That said, on Friday Spanish banks rebounded, erasing earlier losses after the Supreme Court announced it would call a plenary session to decide whether Thursday’s mortgage-documentation taxes ruling should be confirmed, adding that the new ruling is a U-tern from previous legislation, with “huge economic and social impact.”

Whatever the outcome, attention will remain focused on Italy where earlier today yields continued to drift wider, hitting a new of 3.808% before paring the move to 3.73%, still 5bps higher on the day.

And while the Italian deficit showdown with the EU as well as the “Doom loop” have both been extensively discussed, and are widely seen as the reason behind the recent weakness in Italian assets, in a concerning development, on Thursday there was anecdotal reports that a reason behind yesterday’s sharp spike in 3-month USD Libor, which jumped 2.4bps to 2.469% – the sharpest move since March – was a scramble by Italian banks to secure dollar funding.

As Bloomberg’s Vincent Cignarella wrote on Thursday, citing a fixed-income trader, Italian banks “banged the basis swap vs euros to fund dollar-denominated debt. Not so much paying up, but reducing BTP holdings to create liquidity.” He explains below:

The banks are flipping high-quality liquid assets (HQLA BTPs), which they are required to hold to satisfy capital ratios under Basel rules. They pledge the BTPs into the repo market then swap euros for dollars to avoid paying up in the straight depo markets. The BTPs remain HQLA and will continue to be high quality even if both S&P and Moody’s downgrade Italian sovereign debt later this month (S&P rates on the 26th). That is because DBRS currently rates Italy as investment grade BBB.

As a reminder, there is some risk that either S&P or Moody’s or both rating agencies can further downgrade Italy’s credit rating later today, although if DBRS retains its BBB anchor investment grade until 2019, at least Italian collateral will remain eligible for ECB purposes. So while BTP/Bund spreads will likely widen in the event of a downgrade, Cignarella notes not to expect any haircut from the ECB. That said, watch Italian bank CDS: “holding falling securities will likely weigh on the banks’ credit quality, raising their borrowing costs.”

Ultimately, it all boils down to the cabinet’s standoff with Brussels: should the war of words escalate between the EU commission and the populist government, Italian assets will get (much) worse before they get better.

end
Italy blinks? Italy thinks it may consider cutting the deficit to 2.1%
(courtesy zerohedge)

Italy Blinks? Rome Said To Consider Cutting Deficit Target To 2.1%

In what may be confirmation that the recent turmoil in Italian bonds has finally spooked Italy’s coalition government into “blinking” in its standoff with the EU Commission, newspaper Il Foglio reports that “some economic advisers” are pushing coalition partners to reduce Italy’s deficit target for 2019 as a result of pressure from Brussels (and bond vigilantes).

Specifically, the newspaper cites anonymous sources that some League and Five Star advisers would favor a reduction in the deficit target from the current 2.4% with 2.1% seen as possible compromise.

As a reminder, yesterday the commission rejected Italy’s proposed budget, saying it was excessive, and the deviation from EU guidelines was “unprecedented.”

Meanwhile, tensions within the ruling coalition are building up, Italian Deputy PM Salvini broke off from speaking events in northern Italy, where his party will fight a regional election Sunday, to return to Rome amid the standoff with Europe.

Bloomberg reported that while Italian markets tumbled Friday with the European Union shaping up to reject Italy’s 2019 budget, Salvini was embroiled in a spat with his coalition partner, Luigi Di Maio of the Five Star Movement, over tax policy. Specifically, Di Maio accused Salvini’s pro-business party, the League, of secretly sweetening a tax amnesty proposal that he’d only grudgingly agreed to in the first place. Salvini has denied any such thing ever happened and is flying back from Trentino near the border with Austria to thrash out the issue at a cabinet meeting in Rome at 1 p.m. on Saturday.

“Our enemies are outside, not inside the government — let’s talk about this as a family,” Salvini said in a Facebook Live video. Some Five Star lawmakers are acting as if they were in opposition to the government, he added.

The administration has been under fire from investors and the EU. With bond yields climbing, the 2019 spending program was attacked by several European leaders at a summit in Brussels this week as the European Commission warned that its budget draft won’t fly.

“If one breaks these rules and Italy diverges from Maastricht, then that means Italy is endangering itself and of course endangering others,” Austrian Chancellor Sebastian Kurz told reporters Friday, referring to the Maastricht Treaty which governs the single currency. “We as the European Union are not prepared to take on this risk.”

The market was quick to punish Italy on Friday morning when the spread between Italian and German 10-year bonds reached a five-year high of 341 basis points on Friday after Premier Giuseppe Conte failed to convince his European partners that Italy should be allowed to flout the EU’s fiscal rulebook.

Even as Di Maio and Salvini have both ruled out making any changes to the budget as they seek to deliver on election promises including a “citizen’s income” for the poor, tax cuts and a lower retirement age, they are fighting over the planned tax amnesty.

Di Maio on Wednesday said that someone had changed the language in the government’s draft decree to allow Italians to get around the 100,000-euro ($115,000) limit that his party had insisted on. The League had pushed for a ceiling of 1 million euros, according to local press reports, and Di Maio was clearly pointing the finger at Salvini’s team.

Meanwhile, prime minister Conte said in a Facebook post that debate between the different coalition groups was at times “vibrant” but the government has “proved it is able to work as a team.” However, growing acrimony within the coalition has cast doubt whether Italy’s biggest foes are indeed “outside”, and whether the lack of a compromise won’t lead to a collapse in the relatively new populist government.

end

oh oh!! this is bad.   Moody’s after the market closed cut Italy’s debt to just one notch above junk.  When it finally gets to junk rated then all of the bonds held by the Italian bans must be liquidated as well as all the bonds held by the ECB.  Now that will be fun

 

(courtesy zerohedge)

Moody’s Cuts Italy’s Debt Rating To One Notch Above Junk

Five months after putting Italy on downgrade watch, Moody’s has seen enough and cut Italy’s debt rating to Baa3 – one notch above junk status.

 

Moody’s Investors Service has today downgraded the Government of Italy’s local and foreign-currency issuer ratings to Baa3 from Baa2. The outlook on the rating has been changed to stable, meaning that any downgrade to junk – the worst case scenario – has been taken off the table for the time being.

Moody’s also downgraded to Baa3 from Baa2 the local and foreign-currency senior unsecured bond ratings. The foreign-currency senior unsecured shelf and MTN ratings were downgraded to (P)Baa3 from (P)Baa2. Italy’s local-currency commercial paper rating and foreign-currency other short-term rating were downgraded to P-3/(P)P-3 from P-2/(P)P-2. The rating outlook is stable.
The key drivers for today’s downgrade of Italy’s ratings to Baa3 are as follows:

1. A material weakening in Italy’s fiscal strength, with the government targeting higher budget deficits for the coming years than Moody’s previously assumed.Italy’s public debt ratio will likely stabilize close to the current 130% of GDP in the coming years, rather than start trending down as previously expected by Moody’s. Moreover, the public debt trend is vulnerable to weaker economic growth prospects, which would see the public debt ratio rise further from its already elevated level.

2. The negative implications for medium-term growth of the stalling of plans for structural economic and fiscal reforms. In Moody’s view, the government’s fiscal and economic policy plans do not comprise a coherent agenda of reforms that will address Italy’s sub-par growth performance on a sustained basis. Following a temporary lift to growth due to the expansionary fiscal policy, the rating agency expects growth to fall back to its trend rate of around 1%. Even in the near term, Moody’s believes that the fiscal stimulus will provide a more limited boost to growth than the government assumes.

The stable outlook reflects the broadly balanced risk at the Baa3 rating level. In Moody’s view, Italy still exhibits important credit strengths that balance the weakening fiscal prospects. These strengths include a very large and diversified economy, a solid external position with substantial current account surpluses and a near balanced international investment position. Italian households have high wealth levels, an important buffer against future shocks and also a potentially substantial source of funding for the government.

The foreign and local currency bond and deposit ceilings were lowered to Aa3 from the previous Aa2. The short-term foreign-currency bond and deposit ceilings were unchanged at Prime-1.

*  *  *

For now Italian yield spreads are in the “EU support is fading” range…

We warned earlier this was possible and the implications:

As a reminder, there is some risk that either S&P or Moody’s or both rating agencies can further downgrade Italy’s credit rating later today, although if DBRS retains its BBB anchor investment grade until 2019, at least Italian collateral will remain eligible for ECB purposes. So while BTP/Bund spreads will likely widen in the event of a downgrade, Cignarella notes not to expect any haircut from the ECB.

That said, watch Italian bank CDS: “holding falling securities will likely weigh on the banks’ credit quality, raising their borrowing costs.”

EUROPE/DAIMLER CHRYSLER 
This is not a pretty picture for world growth as there is a massacre in the Mercedes sector of Daimler.  Two weeks ago we reported on the huge fall in German auto giant BMW and now we have the Chrysler sector plummeting.
(zerohedge)

Mercedes Massacre: Daimler Plummets After Slashing

Outlook; European Auto Sector Crashes

Three weeks ago, BMW stock tumbled after the German auto giant slashed revenue, profit and EBIT margin guidance blaming “trade conflicts” which are “aggravating the market situation and feeding uncertainty” as well as “distorting demand more than anticipated and leading to pricing pressure in several automotive markets.”

Today, it was Daimler’s turn.

Echoing BMW, the Stuttgart-based maker of Mercedes warned 2018 EBIT would be “significantly” below prior-year levels, as a result of higher expected expenses in connection with “ongoing governmental proceedings and measures in various regions with regard to Mercedes-Benz diesel vehicles.” The company also lowered Mercedes-Benz Vans unit sales due to delays in vehicle delivery, while also citing decreasing demand for Daimler Buses in some markets.

Unlike BMW, Mercedes did not explicitly mention trade tensions in the guidance cut, however, in light of recent abysmal auto sales in Europe, today’s warning is not going to help boost sentiment. As we reported two days ago, Europe passenger car sales plunged 23% in September after new emissions test rules took hold, reversing August gains when automakers were hurrying vehicles out the door to beat the deadline.

Additionally, as Bloomberg notes, the warning may foreshadow a tough earnings season for German stocks, and certainly for Mercedes whose stock plunged the most in 2 years on the announcement.

Daimler’s falling and European autos are now trading near session lows. Another reason to explain why European stocks are unloved.

The weakness quickly spread to the European Stoxx 600 Automobiles & Parts index, which extended its previous declines, and tumbled as much as 4.8%, the steepest intraday drop since June 2016.

Finally, the weakness has spread to the US as well, with GM and Ford stocks also sliding in sympathy.

end
UK/EU
theresa May drops a key Irish border demand but that will bring her wrath from the conservative members of her party
(courtesy zerohedge)

Pound Spikes On Report May Willing To Drop Key Irish

Border Demand

The British Pound is spiking on the latest Bloomberg headline-cum-trial balloon from the neverending Brexit process according to which PM Theresa May is ready to compromise with the EU and ditch one of her key demands in order to resolve the “vexed” issue of the Irish border and clear the path to a deal.

Specifically the UK would no longer demand that the backstop would be time-limited; Until now, May has insisted that a legal guarantee to ensure no new border emerges on the island of Ireland should be strictly limited in time.

May and pro-Brexit politicians in her Conservative party want an end date for the policy to avoid delaying the U.K.’s departure and to ensure the country is free from EU customs rules to strike its own trade deals around the world.

According to Bloomberg, the fix opens the possibility that “Britain would end up bound indefinitely to the European Union’s customs rules. While that’s something that the EU and many businesses want, it risks detonating a crisis in May’s government that could even bring her down.”

The proposed backstop would in effect act as an insurance policy in case any future trade deal between the UK and EU fails to avert a need for customs checks at the Irish border.

In response to the headline, cable spiked as high as 1.3100…

… but several analyst caution about reading too much into the move, or the report, with the main concern being that May would have a very difficult time of getting her party to agree to the proposal considering how much acrimony the issue of the backstop has caused. Furthermore, considering the relentless back and forth in the newsflow, with denials following trial balloons all week, it is quite possible that a headline emerges in the coming hours denying the whole Bloomberg article, and slamming cable back down.

 

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

SAUDI ARABIA
Vice President Mike Pence vows that there will be consequences if the Saudis orders the Khashoggi killing
(courtesy zerohedge)

Mike Pence Vows “There Will Be Consequences” If

Saudis Ordered Khashoggi’s Killing

In what was the strongest repudiation yet of the Saudi government’s suspected involvement in the killing of journalist Jamal Khashoggi, Vice President Mike Pence warned on Thursday during a brief huddle with reporters on a tarmac in Colorado that “there will be consequences” if Khashoggi was murdered, and that the US will not “solely rely” on the results of investigations organized by the Saudi and Turkish governments.

Pence

Pence’s claim that the US won’t solely rely on the results of these investigations echoed remarks made earlier by Secretary of State Mike Pence, who spoke at the White House Thursday after briefing President Trump on his trip to Riyadh and Ankara. Pence also said the allegations about Khashoggi’s killing, if true, would be an affront to press freedoms around the world.

“If what has been alleged occurred, if an innocent person lost their life at the hands of violence, that’s to be condemned,” Pence said.

“If a journalist in particular lost their life at the hands of violence, that’s an affront to the free and independent press around the world,” he added. “And there will be consequences.”

Pence’s comments are notable for the utter lack of credulity regarding the Saudi’s official denials that Khashoggi was killed at their embassy. While Turkish investigators say they have found evidence that Khashoggi was likely killed at the consulate during their investigation (and also purportedly possess an audio recording of what was allegedly a brutal murder), the Saudis have stuck to their official denials and said Khashoggi left the consulate shortly after arriving.

Not to be outdone, President Trump adopted a slightly more severe tone Thursday afternoon when he said consequences for Khashoggi’s death “will need to be very severe” if the Saudis are found to have orchestrated the murder. Trump acknowledged for the first time that Khashoggi is “probably dead.” He hasn’t been seen or heard from since Oct. 2, when he visited the Saudi consulate in Istanbul to obtain a marriage license. All of this is bad news for Saudi Gen. Ahmed al-Assiri, an intelligence official whom the Saudis are reportedly planning to scapegoat for the killing.

 

end
We are not sure if Pompeo heard the audio of the murder of Khashoggi. He may have the transcripts of the recording. It looks like Khashoggi was murdered after he refused to sign some documents
(courtesy zerohedge)

Turkish Officials Played Audio Recording Of Khashoggi

Murder To Pompeo: Report

In the latest conflicting report over WaPo columnist Jamal Khashoggi’s demise, ABC reports that according to a Turkish official, Secretary of State Mike Pompeo heard an alleged audio recording of Khashoggi’s murder inside the Saudi consulate in Istanbul. Contradicting the official White House narrative, the anonymous official said that the recording was played in meetings in Turkey on Wednesday, and that Pompeo was given a transcript of the recordings.

However in refutation of the ABC report, the State Department denied Pompeo had heard the recording, although it did not address whether he had been given a transcript. “The secretary addressed this yesterday. He has not heard a tape,” spokeswoman Heather Nauert told ABC News in an email. During his flight back from Istanbul, Pompeo was asked if he had heard the audio, to which he had a non-committal response: “I don’t have anything to say about that,” he said.

Separately, ABC News has also learned that Turkish officials believe that Khashoggi was killed inside the Saudi consulate following a struggle that lasted eight minutes and that they believe he died of strangulation.

On Thursday morning, Pompeo met with president Trump to brief him on his visits to Turkey and Saudi Arabia, where he met with Saudi King Salman and Crown Prince Mohamed bin Salman. While Trump had previously asked to hear the recording, it was unknown if Pompeo shared the transcript with the president, but soon after the meeting the president “changed his tune”, and while earlier in the week Trump questioned whether the audio recording existed and cautioned against blaming Saudi Arabia for Khashoggi’s disappearance, on Thursday afternoon his administration abruptly canceled a visit to Saudi Arabia by Treasury Secretary Steve Mnuchin to attend a large investment conference hosted by the Crown Prince, whom Turkish officials have reportedly claimed was behind Khashoggi’s killing. Later on Thursday, Trump told reporters that “it certainly looks like” Khashoggi was dead.

“It certainly looks that way to me, it’s very sad,” Trump told reporters before boarding Air Force One to attend a political rally in Montana.

The president also repeated what he said over the weekend, threatening that the consequences for Saudi Arabia, if they are found responsible “will have to be very severe. It’s bad, bad stuff.”

For now, Trump said the United States is waiting for the results of several investigations but will then make a “very strong statement.” After his meeting with Trump, Pompeo told a press conference that the Saudis should have “a few more days” to finish their investigation into Khashoggi’s disappearance. Careful not to push too far, Pompeo also stressed the “long strategic relationship” that the U.S. has with Saudi Arabia, and described the country as an “important counter-terrorism supporter.”

For much of the past week, Turkish officials claimed that Khashoggi was killed in the consulate, and that a group of 15 Saudi men flew to Istanbul around the time of Khashoggi’s disappearance.

A close friend of Khashoggi, Turan Kislakci, told ABC News in an interview on Wednesday that Turkish government and security officials had told him that Khashoggi was dead.

“They said, ‘We have audio on this. We know all the details about what transpired,'” said Kislakci. “They said, ‘We were able to access this the first day, and we have various other evidence on this.'”

Kislakci claimed that the tapes reveal that after Khashoggi went into the Saudi embassy, he was given documents to sign. Khashoggi refused, and was killed.

 
end
TURKEY/SAUDI ARABIA
Turkish investigators think they know where Khashoggi is buried
(courtesy zerohedge)

Turkish Investigators Think They Know Where

Khashoggi Is Buried

As the US government ups the pressure on Saudi Arabia over the suspected killing of insider-turned-critic Jamal Khashoggi with Treasury Secretary Steven Mnuchin surprising investors on Thursday by withdrawing from Crown Prince Mohammad bin Salman’s “Davos in the Desert,” and both President Trump and Vice President Pence stridently declaring that the Saudis would face consequences if they’re found to have been behind the man’s murder – Turkish investigators are testing DNA samples taken from inside the Saudi consulate in Istanbul, where the killing is believed to have taken place. And according to the BBC, investigators have started searching a nearby forest, as well as some farmland, where they believe Khashoggi’s remains may be found.

Body

Anonymous sources – presumably senior Turkish prosecutors or government officials helping to oversee the investigation – said they believe Khashoggi’s body could be buried on farmland in the nearby Belgrad forest. Samples taken from the Saudi consulate and the consul’s residence during searches this week are being tested for a match with Mr Khashoggi’s DNA.

Saudi Arabia has said reports about their involvement in Khashoggi’s death are “completely false and baseless” and has launched an investigation that’s working with a separate Turkish probe to get to the bottom of what happened. On Thursday, Secretary of State Mike Pompeo said he had asked Trump to give the Saudis “a few more days” to finish their investigation. Pompeo also promised that the US would draw its own conclusions in the investigation, and not rely solely on Saudi Arabia. The Secretary of State has also denied reports that Turkish officials played him an audio recording of Khashoggi’s agonizing final minutes, where the sounds of him being tortured, beaten and dismembered can reportedly be heard, alongside the voice of the Saudi consul.

Turkish officials have now searched the Saudi consulate twice, and have also examined the home of the Saudi Ambassador alongside investigators from Saudi Arabia. However, the Saudi consul has been recalled to Riyadh and placed under investigation. Meanwhile, amid reports that men with close ties to Crown Prince Mohammad bin Salman were involved in the killing, the kingdom appears to be setting up a senior intelligence official to take the fall for the killing. Though, to be sure, the Saudi’s official story hasn’t changed since they were first questioned about the disappearance of Khashoggi on Oct 3.

* * *

In its report about the search for Khashoggi’s body, the BBC has published a helpful timeline of key developments in the case:

  • 2 October
  • 03:28: A private jet carrying suspected Saudi agents arrives at Istanbul airport. A second joins it late afternoon
  • 12:13: Several diplomatic vehicles are filmed arriving at the consulate, allegedly carrying some of the Saudi agents
  • 13:14: Mr Khashoggi enters the building, where he is due to pick up paperwork ahead of his marriage
  • 15:08: Vehicles leave the consulate and are filmed arriving at the nearby Saudi consul’s residence
  • 21:00: Both jets leave Turkey by 21:00
  • 3 October
  • Turkish government announces Mr Khashoggi is missing, thought to be in the consulate
  • 4 October
  • Saudi Arabia says he left the embassy
  • 7 October
  • Turkish officials tell the BBC they believed Mr Khashoggi was killed at the consulate. This is later strongly denied by Saudi Arabia
  • 13 October
  • Turkish officials tell BBC Arabic they have audio and video evidence of the killing . The existence of such tapes had previously been reported by local media
  • 15 and 17-18 October
  • Forensic teams carry out searches of consulate

It goes without saying that, should Turkish investigators uncover Khashoggi’s butchered remains, it would only serve to ratchet up diplomatic pressure on the kingdom.

end

6. GLOBAL ISSUES

CANADA

Canada is not doing too good after a good bout with inflation and a retail sales slump

(courtesy zerohedge)

Loonie Tumbles To 6-Week Lows After Inflation, Retail Sales Slump

The loonie has tumbled to six-week lows (above 1.31/USD) following dismal prints for retail sales and inflation this morning.

Against expectations of a 0.1% rise MoM, Canadian core retail sales slumped 0.4% MoM in August. This is the first drop in retail sales since 2017…

Worse still was consumer price inflation plunged in September, dropping 0.4% MoM, deflating for the second month in a row…

We suspect this is not helped by the collapse in Western Canada Select prices…

And the biggest reaction so far is in the Loonie…

But, on the bright side, weed is legal now, eh?!

7  OIL ISSUES

 

 

end

8. EMERGING MARKETS

BRAZIL
The Brazilian real tumbles to 3.72 after their central bank head is set to quit by year end
(courtesy zerohedge)

Real Tumbles After Brazil’s Central Bank Head Said To

Quit By Year End

What was already an ugly day for emerging markets, turned even uglier for Brazil when Bloomberg reported that the head of Brazil’s central bank, Ilan Goldfajn, was preparing to leave the central bank by year-end.

There was no reason cited for the departure of the relatively new central bank head, who was appointed to his current position in May 2016, however news of his departure shook the BRL, which tumbled to session lows against the dollar.

Bloomberg adds that the campaign of presidential front-runner Jair Bolsonaro – who had initially considered keeping Goldfajn as central bank chief – was mulling several names as central bank chief.

In addition to slamming the BRL, news of the departure also hit the iShares Brazil ETF, the EWZ, which slumped to session lows on the news as yet another legacy central banker quietly prepares to exit stage left.

Even before the news, EMs suffered another bloodbath session, with almost every developing-nation currency falling, while MSCI’s EM stock gauge extended a two-day slump. Mexico’s peso dropped after Donald Trump threatened to summon the U.S. military to close the country’s southern border, while the Shanghai Composite Index slid to the lowest in almost four years and China’s onshore yuan fell for a fifth day after the PBOC surprised traders with an unexpectedly weak fixing.

end

 

 

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

Euro/USA 1.1474 UP .0020 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 MIXED/TILTING TO RED

 

 

 

 

USA/JAPAN YEN 112.41  UP 0.215  (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 1.3036 UP   0.0018  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3033  DOWN .0036 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS FRIDAY morning in Europe, the Euro ROSE by 20 basis point, trading now ABOVE the important 1.08 level FALLING to 1.1474; / Last night Shanghai composite CLOSED UP 64.05 POINTS OR 2.58%

 

//Hang Sang CLOSED UP 106.08 POINTS OR .56% 

 

 

/AUSTRALIA CLOSED DOWN  0.12%EUROPEAN BOURSES MIXED TILTING TO RED 

 

 

The NIKKEI: this FRIDAY morning CLOSED DOWN 126.08 POINTS OR 0.56%

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED MIXED TILTING TO RED 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 106.85 POINTS OR .42% 

 

 

/SHANGHAI CLOSED UP 64.05 POINTS OR 2.58%

 

 

 

Australia BOURSE CLOSED DOWN 0.12%

Nikkei (Japan) CLOSED DOWN 126.08 POINTS OR 0.56%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1228.15

silver:$14.64

Early FRIDAY morning USA 10 year bond yield: 3.18% !!! UP 0 IN POINTS from THURSDAY’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 3.37 UP 1  IN BASIS POINTS from THURSDAY night. (POLICY FED ERROR)/

USA dollar index early FRIDAY morning: 95.88 DOWN 2  CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS \4: 00 PM

 

Portuguese 10 year bond yield: 2.03% up 7    in basis point(s) yield from THURSDAY/

JAPANESE BOND YIELD: +.15%  UP 0  BASIS POINTS from THURSDAY/JAPAN losing control of its yield curve/EXTREMELY VOLATILE YESTERDAY…DANGEROUS!!

SPANISH 10 YR BOND YIELD: 1.73% UP 8 IN basis point yield from THURSDAY/

ITALIAN 10 YR BOND YIELD: 3.69 UP 24   POINTS in basis point yield from THURSDAY/

 

 

the Italian 10 yr bond yield is trading 196 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS UP TO +.42%   IN BASIS POINTS ON THE DAY//

 

END

IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.1457 DOWN .0044 or 44 basis points

 

 

USA/Japan: 112.20 DOWN .423 OR 43 basis points/

Great Britain/USA 1.3023 DOWN .0078( POUND DOWN 78 BASIS POINTS)

 

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This afternoon, the Euro was FELL BY 44 BASIS POINTS  to trade at 1.1457

The Yen ROSE to 112.20 for a GAIN of 43 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE

The POUND LOST 78 basis points, trading at 1.3023/

The Canadian dollar LOST 47 basis points to 1.3072

 

 

The USA/Yuan,CNY closed UP AT 6.9326-  ON SHORE  (YUAN down)

THE USA/YUAN OFFSHORE:  6.9424(  YUAN down)

TURKISH LIRA:  5.64

the 10 yr Japanese bond yield closed at +.15%

 

 

 

Your closing 10 yr USA bond yield UP 2 IN basis points from THURSDAY at 3.18 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.36 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, 95.97 UP 36 CENT(S) ON THE DAY/1.00 PM/

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 4:00 PM 

London: CLOSED DOWN 27.61 POINTS OR 0.39%

German Dax : CLOSED DOWN 125.82 POINTS  OR 1.09%
Paris Cac CLOSED DOWN 28.16 POINTS OR 0.550%
Spain IBEX CLOSED DOWN 105.600 POINTS OR 1.20%

Italian MIB: CLOSED DOWN:  367.46 POINTS OR 1.89%/

 

 

WTI Oil price; 68.65 1:00 pm;

Brent Oil: 79.33 1:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    65.83  THE CROSS LOWER BY .30 ROUBLES/DOLLAR (ROUBLE HIGHER by 30 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.64 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD FALLS +.42 FOR THE 10 YR BOND 1.00 PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM

Closing Price for Oil, 4:00 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 4:30 PM:69.28

 

BRENT:79.89

USA 10 YR BOND YIELD: 3.19%..deadly

USA 30 YR BOND YIELD: 3.38%/…deadly

EURO/USA DOLLAR CROSS: 1.1515 ( UP 61 BASIS POINTS)

USA/JAPANESE YEN:112.53 UP 335 (YEN UP 34 BASIS POINTS/ .(LACK OF FOR.EXCHANGE SWAPS)

USA DOLLAR INDEX: 95.61 DOWN 28 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3066 UP 47 POINTS FROM YESTERDAY

the Turkish lira close: 5.6387

the Russian rouble:  65.46 UP 0.33 Roubles against the uSA dollar.( UP 33 BASIS POINTS)

 

Canadian dollar: 1.3103 DOWN 24 BASIS pts

USA/CHINESE YUAN (CNY) : 6.9290  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.9334 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.42%

 

The Dow closed  UP  64.89 POINTS OR 0.26%

NASDAQ closed DOWN 36.11  points or 0.17% 4.00 PM EST


VOLATILITY INDEX:  19.89  CLOSED DOWN  0.17

LIBOR 3 MONTH DURATION: 2.469%  .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

 

China’s National Team Rescues Global Stocks As Yuan

Tumbles, Gold Gains

Quite a week where Chinese, European, and US Stocks take huge rollercoaster rides to end unchanged… (with th every visible hand of China’s National Team and the magically coincident sudden short-squeeze in the US)…

 

China was looking seriously ugly on the week but the worst GDP (bar

China was looking seriously ugly on the week but the worst GDP (bar

China was looking seriously ugly on the week but the worst GDP (bar Q1 2009) print in the country’s history was just what The National Team needed to start a buying-panic in Chinese stocks…

 

And thanks to that momentum ignition from China, European stocks scrambled back to even on the week… (Italy ended down 1%)

 

But EU Autos were hit after Daimler…

 

But while US equities were aided by the exuberant Chinese momo, selling pressure returned..

 

As Tuesday’s panic-bid (biggest short-squeeze since the election) just couldn’t sustain gains. In the end, stocks went nowhere…

 

A Big Sell Order hit around 2pmET…

 

All the major US indices are sat right at key technical levels…

 

The midweek short-squeeze was hit hard…

 

VIX ended the week lower but still relatively elevated at 19 – note each time we shifted to positive on the week, vol-sellers appeared…

 

US Autos were just as ugly after Daimler’s downgrade…holding just above 2016’s lows.

 

US Homebuilders continued their collapse…down 20 of the last 23 days

 

October remains a mess for US markets…

 

Trannies remain red for 2018, and Small Caps have almost erased all their year gains…

 

Bonds also had a rollercoaster week – ending higher in yield led by the short-end (belly outperformed)…

 

But commodity divergences suggest bond yield should be notably lower…

 

The Dollar Index rallied on the week (for the 3rd week in 4) – highest weekly close since June 2017

 

China’s offshore yuan tumbled for the 7th week of the last 8 and the lowest weekly close since Dec 2016…

 

Cryptocurrencies were mixed on the week with Ripple best, Bitcoin and Ether with modest gains and Litecoin and Bicoin Cash lower…

 

Despite a strong dollar, Gold and Silver managed to hold on to gains as copper and crude dropped…

 

Crude kept sliding all week (back below $70) but gold outperformed…

 

Finally, we note the regime shift in China’s hold on Gold – something snapped…

 

 

market trading

Stocks Hit With Massive Sell Order Just After 2PM

Last Thursday, October 11, the market selloff accelerated shortly after 2pm when as we reported at the time, the market was unexpectedly hit with the biggest sell order since the May 2010 flash crash, when the NYSE uptick minus downtick index, hit  a print of -1,793. The result was a 600 point plunge in the Dow in minutes.

Why do we bring this up? Because recall that earlier today, when discussing Marko Kolanovic’s latest bullish forecast on the market, according to which the systematic selling was over and index options hedging was “pointing in an upward direction”, we said that “all eyes now turn to … the last hour of US cash trading, when risk weakness has emerged in recent weeks.”

Well, at exactly 2:02pm ET – when the market in recent weeks has started to get wobbly during the afternoon session – the NYSE TICK Index Uptick minus Downtick suddenly tumbled to -1,303 when what until now was quiet day in terms of coordinated stock market selling was hit by a spasm of sell orders as Bloomberg’s Andrew Cinko noted.

The massive sell order almost instantly sent the Dow, which had been gradually fading all day, into negative territory.

The reason the low print was noticed is because readings of more than 1,000 in either direction get attention as a sentiment indicator. “Specifically, multiple selling or buying spasms accompany meltdowns and meltups, and that’s certainly true of last week’s tough drops.”

So with Friday’s first major sell order having passed, and the Dow rebounding back into the green, the question is whether this was it for today’s selling, or are even more aggressive sell orders on deck as we enter the last hour of trading.

market data/

The USA housing sector continues to crap out: today existing home sales drop for the 7th straight month as USA home builder stocks collapse

(courtesy zerohedge)

Existing Home Sales Drop For 7th Straight Month As

Homebuilders Stocks Collapse

With US homebuilder stocks having their worst year since 2007, hope is high that September will show the long-awaited rebound in home sales (despite a soaring mortgage rate).

After ‘stabilizing’ unchanged in August, existing home sales were expected to drop 0.9% MoM in September, but instead August’s data was revised notably lower and September plunged… down 3.4% MoM – the biggest drop since Feb 2016

With SAAR at its lowest since Nov 2015…

This is the seventh month in a row of annual declines in existing home sales…

Sales fell across all price ranges (not just the low-end as we have seen recently).

Median home price rose 4.2% from last year to $258,100

And you can’t blame supply as it rose notably – 4.4 months supply in Sept. vs. 4.3 in Aug.

As NAR notes:

“This is the lowest existing home sales level since November 2015,” he said.

A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”

“There is a clear shift in the market with another month of rising inventory on a year over year basis, though seasonal factors are leading to a third straight month of declining inventory,” said Yun.

“Homes will take a bit longer to sell compared to the super-heated fast pace seen earlier this year.”

Homebuilder stocks are collapsing…

This is the worst year for homebuilder stocks since 2007…

Probably nothing. Just keep hiking rates.

end

USA economic/general stories
A canary in the coalmine:  Small Bank OZK plummets after shock real estate write downs!!
we will watch for further banks for writedowns
(courtesy zerohedge)

The Canary In Coalmine: Bank OZK Plummets After Shock Commercial Real

Estate Write Downs

In what may be the deadest canary in the commercial real estate coal mine yet, Bank OZK shares have plunged 26% today after the bank reported abysmal third-quarter earnings that trailed expectations, with net income tumbling but what caught traders’ attention was two commercial real estate charge-offs of $45.5 million on the bank’s Real Estate Specialties Group (RESG) credits for unrelated projects in South and North Carolina.

The Little Rock-based regional bank, with just over $22 billion in assets, also reported that net income declined 23% to $74.2 million in its third quarter from the same period in 2017 due to these write-offs. Bank OZK’s earnings have been closely monitored by analysts since it is such an active real estate lender. The bank reported that the two write-offs during the third quarter were in its Real Estate Specialties Group (“RESG”) portfolio and were related to properties in South Carolina and North Carolina from loans originated in 2007 and 2008, the Real Deal reported.

The bank said in its management comments that its South Carolina charge-off was secured by a regional mall, which has suffered from both “declining property performance and increasing interest rates.” The project was further impacted by uncertainty related to anchor tenants Sears and JC Penney. The North Carolina charge-off was secured by a multi-phase land, residential lot and residential home project, with the bank noting that the homes have not sold well in part due to “cheaper pricing on existing homes.”

What shocked analysts, however, is that these properties had allowance allocations totaling only $19.1 million as of June 30. But after new appraisals, which were much lower than it initially presumed, the bank said it would have to write down each credit to about 80% of its recent appraised value. The combined charge-offs on the two loans in the third quarter came to $45.5 million. Since the bank already had the $19.1 million allowance, it had to make an additional provision expense of $26.4 million. Had it not, its earnings would have slightly surpassed its third quarter 2017 earnings of $96 million.

The bank then tried to placate shareholders noting that “other than these two substandard and one watch credit, the credit quality of the RESG portfolio is excellent” however judging by the share price, it failed at this task.

Meanwhile, the bad news continued with the bank also reporting that its net interest margin was down 37 basis points from the third quarter of 2017 to 4.47%. The bank said this was due to a lower than expected yield on non-purchased loans.

The regional bank has been a very active real estate lender, providing the biggest condo construction loan in the Miami area, $558 million for The Estates at Acqualina in Sunny Isles Beach. It also provided more than $1.2 billion in construction loans in the Miami metropolitan area from 2013 through 2017, according to its 2017 annual report.

Bank OZK was formerly known as Bank of the Ozarks until July, before rebranding itself in a campaign that cost it over $10 million, in an effort to free itself from “the limitations of a name tied to a specific geographic region,” according to a statement from the bank at that time.

Commenting on the results, Wall Street was relentless, with Raymond James analyst Michael Rose wiring “No Mas!” in a note downgrading OZK to market perform, adding that credit issues from OZK’s “seemingly-infallible RESG portfolio were a non-starter,” and had been key tenet of formerly-positive thesis; “with defenses penetrated, no matter how small a breach, confidence in OZK mystic has evaporated.”

Rose also said that his downgrade may be at/near bottom, given “expected fallout” in OZK shares; also flags slower loan growth, NIM outlook

Meanwhile, Morgan Stanley’s Ken Zerbe said that the two RESG loans had been on OZK books for 10, 11 years, and don’t represent more recent quality of loans; he sees one other loan, currently on watch list and also originated in 2008, as potentially posing credit problem. He also flagged the NIM drop of 19bps q/q to 4.47%, missing Morgan Stanley est. 4.65%; end-of-period loan balances gain of $257m q/q vs est. $525m; mgmt noting that 4Q non-purchased loan balances could be “near-zero or even negative,” which would put further pressure on future net interest income. Finally, he expects to “materially reduce” EPS estimates putting his rating and price target under review.

Finally, KBW’s Catherine Mealor wrote that when there are two “losses as large as this, no matter how different they are from the rest of the portfolio, the market is going to shoot first, ask questions later”, adding that OZK shares will stay at a significant discount vs peers “for the foreseeable future.”

One look at the stock price of OZK today confirms the bearish thesis.

 

 

 

SWAMP STORIES

You would think that this can only occur in the world of make believe:  a busted Senator McCaskill demands a special prosecutor over the Veritas undercover exposure of her.

(courtesy zerohedge)

 

‘Busted’ Dem Senator McCaskill Demands Special Prosecutor Over

Veritas Undercover “Fraud”

Two days after Missouri Senator McCaskill was exposed by Project Verita s as being considerably more liberal – “essentially the same as [Obama’s]” – that she would like her moderate voters to know, issued a demand for an investigation into the fraud she says Project Veritas committed in the making of a series of “sting” videos of her re-election campaign.

After an initial outright denial, McCaskill has claimed since the videos were released that she now remembers someone taking video and trying to get her to make statements on camera that were at odds with her actual positions.

But they have now gone on the offensive…

“We have reason to believe that fraud has been committed against our campaign,” McCaskill campaign manager David Kirby said.

But then, a self-described “startled” McCaskill (who is essentially tied with her opponent)…

…attempted to distract from the truth of the undercover videos, The Daily Caller’s Virginia Kruta reports that McCaskill suggested during an interview that Missouri’s Republican Attorney General Josh Hawley – who also happens to be her challenger in the current race for the seat she has held since 2006 – was somehow involved in the creation of those videos.

PVeritas Action@PVeritas_Action

McCaskill RESPONDS… hours before the next undercover video from her campaign will be published. Check back soon to see what your staff says in the next one, @clairecmc!

Hawley was quick to react to McCaskill’s accusations…

Josh Hawley

@HawleyMO

US Senate candidate, MO

Let’s review last 24 hrs. 1) @clairecmc & staff caught on tape telling the truth 2) McCaskill accuses ME of fraud 3) McCaskill demands Missouri give her special prosecutor to investigate her truth telling #MOsen

Adding that…“… accusing people of crimes is a serious thing. If you have evidence of a crime, please come forward with it immediately. Otherwise, please stop politicizing the legal process for your reelection.”

Josh Hawley

@HawleyMO

US Senate candidate, MO

Let’s review last 24 hrs. 1) @clairecmc & staff caught on tape telling the truth 2) McCaskill accuses ME of fraud 3) McCaskill demands Missouri give her special prosecutor to investigate her truth telling #MOsen

Josh Hawley

@HawleyMO

US Senate candidate, MO

Senator, accusing people of crimes is a serious thing. If you have evidence of a crime, please come forward with it immediately. Otherwise, please stop politicizing the legal process for your reelection. #MOsen

However, as The Daily Caller notesMcCaskill’s campaign hedged slightly, with Kirby then saying that Hawley was “perpetrating this fraud by promoting it and encouraging it.”

 

* * *

end

A close associate of the Democrat leaning FBI has been arrested and sentenced to 4 years over illegal leaks

(courtesy zerohedge)

 

Former FBI Agent Sentenced To Four Years Over Illegal

Leaks

A former Minnesota FBI agent who admitted to leaking classified documents to The Intercept has been sentenced to four years in prison, making him the second Intercept whistleblower to be placed behind bars in eight weeks following the August 23 sentencing of former NSA intelligence specialist Reality Winner.

Terry James Albury was sentenced Thursday after pleading guilty in April to the unauthorized disclosure of national defense information as well as unauthorized retention of national defense information.

Prosecutors say he betrayed public trust when he stole more than 70 documents, including 50 that were classified. They asked for him to be sentenced to more than four years.

Albury’s defense attorneys requested probation, saying he’s a patriot who was morally conflicted by the FBI’s counterterrorism policies. –WaPo

On August 29, 2017 federal authorities raided Albury’s residence in Shakopee, Minnesota, where agents found “approximately 58 sensitive and classified US government documents involving multiple government agencies. These documents were recovered on a thumb drive that was wrapped up in an envelope with a reporter’s telephone number affixed to it.”

The date and content of one of the leaked documents corresponded with a story featured on The Intercept.

Ryan Raiche

@ryanraiche

Before the judge handed down four year prison sentence, former FBI agent Terry Albury made a final statement: “I sincerely wanted to make a difference and never meant to put anyone in danger.” He accepted full responsibility. @KSTP

Read Albury’s plea agreement below:

Former intelligence analyst Reality Winner was arrested June 3, 2017 after The Intercept published a report containing classified information she gave them regarding a May 5, 2017 NSA document alleging Russian hacking of US voting software.

Winner was busted after The Intercept contacted the NSA and sent copies of the documents to the agency to confirm their veracity, which they were able to use to trace the documents back to Winner though an internal audit.  The agency learned that Winner was one of six workers who had accessed the particular documents on its classified system, and that her computer had been in contact with The Intercept via a personal email account.

In response to Winner’s arrest, security experts and journalists alike have criticized The Intercept’s handling of the classified materials, which included publishing unredacted portions which included the printer tracking dotsalso used to identify Winner as the leaker.

end

I think you will enjoy this one:  A dead Nevada brothel owner is expected to beat his Democrat opponent in the Nov election.

Have fun with this…

(courtesy zerohedge)

Dead Nevada Brothel Owner Expected To Crush

Democrat In Nov. Election

Despite the slightly unorthodox fact that he is dead, infamous brothel owner Dennis Hof will remain on the ballot (since officials in the Silver State say it’s too late to change the printed ballots since they’ve already been mailed out for early voting) and is expected to win by a landslide in the forthcoming Nevada state legislature elections.

 

The so-called “Trump from Pahrump,” who appeared in the HBO documentary series Cathouse, owned a strip club and five legal brothels in Nevada including the Bunny Ranch, was found dead on Tuesday, hours after his 72nd birthday party (attended by such varied guests as porn star Ron Jeremy, the controversial sheriff and Trump ally Joe Arpaio, and the anti-tax activist Grover Norquist).

Chuck Muth@ChuckMuth

Just arrived on-scene at Love Ranch Vegas. Dennis died quietly in his sleep. Ron Jeremy found him this morning when he went to wake him to go to a meeting in Pahrump. Investigation still going on.

 

As The Guardian reports, Hof was running for a seat in a heavily Republican district and had been favored to win…

“I feel very comfortable predicting that he is still going to win the election on 6 November,” his campaign manager, Chuck Muth, said in an interview, adding that Republicans had a 2-to-1 advantage over Democrats in the state assembly district in terms of voter registration.

In a June interview from one of his brothels, Hof said his political fortunes had parallels with those of the US president.

“This really is the Trump movement,” Hof said in the interview at Moonlite Bunny Ranch, his brothel near his home in Pahrump. “People will set aside for a moment their moral beliefs, their religious beliefs, to get somebody that is honest in office.”

 

If he is elected, the Reno Gazette-Journal reported, the vacancy that spans constituencies in multiple counties will be filled via a joint meeting process headed by county commissioners.

“There are a lot of Republicans who were uncomfortable voting for Dennis because of the nature of his business and they now know that he is not the one who will be serving,” Muth said.

“They will feel much more comfortable casting the ballot for him knowing there will be another Republican to replace him,” he added.

The Guardian reports that the Democratic candidate for the seat, Lesia Romanov, was not immediately available for comment.

end

Judge dismisses all remaining charges against Paul Manafort

(courtesy zerohedge)

Judge Dismisses Remaining Charges Against Paul Manafort

Amid reports that former Trump campaign executive Paul Manafort has been spending an awful lot of time in the special counsel’s office (visiting at least nine times in the last four weeks, according to CNN), the Virginia judge who presided over the summer trial where Manafort was convicted of 8 counts of tax fraud and failing to disclose foreign bank accounts has dismissed the 10 remaining deadlocked counts against against the political operative, the first indication of how Manafort’s efforts to cooperate with prosecutors (turning over information that some believe could lead to one more bombshell indictment from the special counsel) has benefited him.

Manafort

Manafort appeared in an Alexandria Federal Court Friday in a wheelchair, and his lawyer complained of his client’s ill health, and asked that he be sentenced as soon as possible. Judge T.S. Ellis then set a date for Manafort’s sentencing was set for Feb. 8.

Rachel Weiner

@rachelweinerwp

Manafort will be sentenced February 8th

Rachel Weiner

@rachelweinerwp

Paul Manafort appears in court in a wheelchair. Attorney Kevin Downing says “there are significant issues with Mr. Manafort’s health right now that have to do with his confinement.” Wants him sentenced as soon as possible so he can be moved.

Manafort’s lawyer, Kevin Downing, said this expedited sentencing was for Manafort’s safety. Moving up the pre-sentence investigation would allow Manafort to move as soon as possible out of a local jail and presumably to a federal prison, per the Washington Post.

Mueller’s team of prosecutors approved the dismissal after Ellis criticized an arrangement between prosecutors in Manafort that would delay dismissal of his remaining charges as “highly unusual” after Manafort pleaded guilty to charges in a separate case in Washington and agreed to cooperate.

Under the deal, the special counsel did not have to decide whether to prosecute Manafort on the remaining 10 Virginia charges until after he was done cooperating. But Ellis called that agreement “highly unusual” and told the special counsel to make a decision now.

Lawyers with the special-counsel probe agreed, saying they would accept a dismissal of the counts and prepare for sentencing as long as it remains possible to refile the charges in the future. (It is also possible for charges to be dismissed “with prejudice,” meaning they can never be filed again).

We still don’t know what Manafort told Mueller, but reports have speculated that he could have provided information on a range of issues, from the Trump campaign’s relationship with Russia to the Republican Party’s decision to soften language in its convention platform pertaining to Russia and Ukraine.

end

SWAMP STORIES COURTESY OF THE KING REPORT

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

Accused Treasury leaker had ‘co-conspirator’ in plot to spill dirt on Trump officials: court files
 
Mueller Ordered to Clarify Claims against Putin Ally’s Company
 
Leaker of Cohen Banking Docs Faces Possible Criminal Charges
Michael Avenatti’s bombshell disclosure of banking records associated with President Donald Trump’s former attorney and his references to Suspicious Activity Reports (SARs) has put him in a precarious situation and put the source of the leak in jeopardy of prosecution, according to numerous sources who spoke to his reporter…
 
State Department provided ‘clearly false’ statements to derail requests for Clinton docs, ‘shocked’ federal judge says
    “I had myself found that Cheryl Mills had committed perjury and lied under oath in a published opinion I had issued in a Judicial Watch case where I found her unworthy of belief, and I was quite shocked to find out she had been given immunity…” Lamberth said during Friday’s hearing…
    “It was clear to me that at the time that I ruled initially, that false statements were made to me by career State Department officials, and it became more clear through discovery that the information that I was provided was clearly false regarding the adequacy of the search and this – what we now know turned out to be the Secretary’s email system,” Lamberth said Friday
 
Another ‘peer-reviewed’ scientific absolute [speed of light threshold] has fallen.
 

 

 

END-

I HOPE TO SEE YOU ON MONDAY

Harvey

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