OCTOBER 24/

i

 

 

 

GOLD: $1228.75 DOWN  $4.90 (COMEX TO COMEX CLOSINGS)

Silver:   $14.69 DOWN 9 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1234.80

 

silver: $14.69

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For comex gold and silver:

OCT

 

 

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  OCT CONTRACT: 32 NOTICE(S) FOR 3200 OZ

Total number of notices filed so far for OCT:  1784 for 178,400 OZ  (5.5489 TONNES)

 

 

 

 

 

FOR OCTOBER

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2 NOTICE(S) FILED TODAY FOR

10,000 OZ/

Total number of notices filed so far this month: 470 for 2,350,000 oz

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Bitcoin: OPENING MORNING TRADE  $6613: UP  $65

 

Bitcoin: FINAL EVENING TRADE: $6550  UP  29 

 

end

 

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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 202 CONTRACTS FROM 199,544 UP TO  199,746 WITH YESTERDAY’S 22 CENT RISE IN SILVER PRICING AT THE COMEX. TODAY WE  MOVED CLOSER TO  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 HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

50 EFP’S FOR NOV.  2623 EFP’S FOR DECEMBER AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 2673 CONTRACTS. WITH THE TRANSFER OF 2673 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 2673 EFP CONTRACTS TRANSLATES INTO 13.37 MILLION OZ  ACCOMPANYING:

1.THE 22 CENT RISE IN SILVER PRICE AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR THE JUNE/2018 COMEX DELIVERY MONTH. (5.420 MILLION OZ);  30.370 MILLION OZ  STANDING FOR DELIVERY IN JULY, FOR AUGUST: 6.065 MILLION OZ AND  39.505 MILLION  OZ STANDING  IN SEPT. AND 2,355,000 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: 

36,876 CONTRACTS (FOR 18 TRADING DAYS TOTAL 36.876 CONTRACTS) OR 184.38 MILLION OZ: (AVERAGE PER DAY: 2046 CONTRACTS OR 10.243 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF SEPT:  184.38 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 26.70% 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:           2,403.7    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 202 WITH THE  22 CENT RISE IN SILVER PRICING AT THE COMEX //YESTERDAY. THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 2673 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 STRONG SIZED: 2875 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 2673 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 202  OI COMEX CONTRACTS. AND ALL OF  DEMAND HAPPENED WITH A 22 CENT RISE IN PRICE OF SILVER  AND A CLOSING PRICE OF $14.78 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: 2 NOTICE(S) FOR 10,000 OZ OF SILVER

IN SILVER,PRIOR TO TODAY, WE  SET THE NEW COMEX RECORD OF OPEN INTEREST AT 243,411 CONTRACTS ON APRIL 9.2018 AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $16.51.  

AND NOW WE RECORD FOR POSTERITY ANOTHER ALL TIME RECORD OPEN INTEREST AT THE COMEX OF 244,196 CONTRACTS ON AUGUST 22/2018 AND AGAIN WHEN THIS RECORD WAS SET, THE PRICE OF SILVER WAS $14.78 AND LOWER IN PRICE THAN PREVIOUS RECORDS.

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ  MAY: 36.285 MILLION OZ ; JUNE/2018  (5.420 MILLION OZ) , JULY 2018 FINAL AMOUNT STANDING: 30.370 MILLION OZ   )  FOR AUGUST 6.065 MILLION OZ. , SEPT:  AN INITIAL HUGE 39.505 MILLION OZ./AND NOW OCTOBER: 2,355,000 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 5,000 CONTRACTS UP TO 477,832 DESPITE THE LOSS IN THE COMEX GOLD PRICE/YESTERDAY’S TRADING (A RISE IN PRICE OF $11.85).THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG SIZED 9054 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 EFP’S ISSUED AND, DECEMBER HAD AN ISSUANCE OF 9054 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 477,832. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A VERY STRONG OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 14,054 CONTRACTS:  5000 OI CONTRACTS INCREASED AT THE COMEX AND 9054 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 14,054 CONTRACTS OR  1,405,400 OZ = 43.71 TONNES. AND ALL OF THIS DEMAND OCCURRED WITH A RISE IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF $11.85.

 

 

 

 

YESTERDAY, WE HAD 5793 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF SEPT : 140,187 CONTRACTS OR 14,018,700 OZ OR 436.04 TONNES (18 TRADING DAYS AND THUS AVERAGING: 7788 EFP CONTRACTS PER TRADING DAY OR 778,800 OZ/ TRADING DAY),,

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 18 TRADING DAYS IN  TONNES: 436.04 TONNES

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

THUS EFP TRANSFERS REPRESENTS 436.04/2550 x 100% TONNES =  17.09% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:     6,103.63*  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 5000 WITH THE GAIN IN PRICING ($11.85) THAT GOLD UNDERTOOK YESTERDAY) //. WE ALSO HAD A STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 9054 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 9054 EFP CONTRACTS ISSUED, WE HAD A STRONG GAIN OF 14.054 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

9054 CONTRACTS MOVE TO LONDON AND 5000 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 43.71 TONNES). ..AND ALL OF THIS GOOD DEMAND OCCURRED WITH A GOOD GAIN OF $11.85 IN YESTERDAY’S TRADING AT THE COMEX.

 

 

we had: 32 notice(s) filed upon for 3200 oz of gold at the comex.

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

GLD...

 

WITH GOLD UP $11.85 TODAY: / 

NO CHANGES IN GOLD INVENTORY TODAY

 

 

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   747.88 TONNES

Inventory rests tonight: 747.88 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 22  CENTS TODAY

SURPRISINGLY A HUGE WITHDRAWAL OF 2.819 MILLION OZ OF SILVER FROM  SLV INVENTORY

 

 

 

 

 

 

 

 

 

 

/INVENTORY RESTS AT 331.690 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 202 CONTRACTS from 199,544 UP TO 199,746  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) 50 EFP’s for November… and

 

2623 CONTRACTS FOR DECEMBER AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 2673 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 388 CONTRACTS TO THE 2673 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A  NET GAIN OF 2875 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE STRONG GAIN ON THE TWO EXCHANGES: 14.38 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 22 CENT PRICING GAIN THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD A HUGE SIZED 2673 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

 

 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 8.47 POINTS OR 0.33% //Hang Sang CLOSED DOWN 96.77 POINTS OR 0.38% //The Nikkei closed UP 80.49 OR 0.37%/ Australia’s all ordinaires CLOSED DOWN 0.31%  /Chinese yuan (ONSHORE) closed DOWN  at 6.9427 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil DOWN to 66/82 dollars per barrel for WTI and 76.60 for Brent. Stocks in Europe OPENED RED //.  ONSHORE YUAN CLOSED SLIGHTLY DOWN AT 6.9427 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED SLIGHTLY DOWN ON THE DOLLAR AT 6.9482: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS STOPPED   : /ONSHORE YUAN TRADING STRONGER  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)USA ships travel through the Taiwan Strait as they provoke China.
( zerohedge)

ii)I still feel that Kyle Bass is one smart cookie as he tries to dissect what is going on with respect to the shady finances inside China.   After suffering two years of losses due to the rise in the yuan, he has now gained 10% this year and he believes that the Chinese yuan is going to falter badly and their debt to implode

a must read..

( Kyle Bass/zero hedge)

 

4/EUROPEAN AFFAIRS

i)Deutsche bank again in trouble as their net income plunges by 65%.  They are the largest derivative player on earth and their losses in this arena are killing them

(courtesy zerohedge)

ii)ITALY/EU

We now know the red line in the sand: it is the spread between German rates and Italian rates. In other words if the spread hits 400 basis points, then the banks need recapitalization or in other words a bail in.  Watch for Italians to continue moving money into Switzerland.

( zerohedge

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)SAUDI ARABIA
Trump states that the cover up with respect to the Khashoggi murder is the worst ever.  The uSA revokes the visas for those already charged
( zerohedge)
ii)Israel

Israel has no choice but to invade Gaza as rockets fired by Hamas has come very close to TelAviv

(courtesy zerohedge)

 

6. GLOBAL ISSUES

 

 

 

7. OIL ISSUES

 

 

8 EMERGING MARKET ISSUES

 

 

9. PHYSICAL MARKETS

 

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

 

 

MARKET TRADING

mid morning trading
ii)Market data

We continue to point out the crashing of the housing sector in the USA.  Today  it is new home sales as supply soars

( zerohedge)

 

iii)USA ECONOMIC/GENERAL STORIES

a)Trump surely knows what is going on as he again attacks Powell on his raising interest rates.  He is probably ready to throw the Fed under the bus

( zerohedge)

b)

As we have been pointing out:  the USA economy has turned on a dime: this time it is October auto sales are down 12% so far.
( zerohedge)

iv)SWAMP STORIES

The following is the genesis of how the Russian collusion story was fabribated

( 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 5,000 CONTRACTS UP to an OI level 477,832 WITH THE RISE IN THE PRICE OF GOLD ($11.85 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 STRONG SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 9054 EFP CONTRACTS WERE ISSUED:

OCTOBER: 0 EFP’S AND DECEMBER:  9054 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  9054 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 15,567 TOTAL CONTRACTS IN THAT 9054 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED 6513 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES:  14,054 contracts OR 1,405,400 OZ OR 43.71 TONNES.

Result: A CONSIDERABLE SIZED INCREASE IN COMEX OPEN INTEREST WITH THE GAIN IN PRICE/ YESTERDAY (ENDING UP WITH THE RISE IN PRICE OF ($11.85)THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES:  14,054 OI CONTRACTS..

We are now in the active contract month of OCTOBER. For the October contract month, we gained 15 contracts to 80 contracts.  We had 16 notices yesterday, so we GAINED 31 contracts or 3100 oz will  stand for delivery at the comex and these guys refused to march over to London as they shunned receiving London based forwards on top of a fiat bonus.

 

The next delivery month is the non active NOVEMBER contract month and here the OI ROSE by 8 contracts UP to 334.  The next delivery month after November is the very big December contract month and here the OI ROSE by 4836 contracts up to 375,687 contracts.

 

 

 

 

WE HAD 32 NOTICES FILED AT THE COMEX FOR 3200 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 202 CONTRACTS FROM 199,544UP TO 199,746 (AND CLOSER TO 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 SMALL  OI COMEX GAIN OCCURRED DESPITE A STRONG 22 CENT RISE IN PRICING.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF OCTOBER AND, WE WERE  INFORMED THAT WE HAD A STRONG SIZED 2673 EFP CONTRACTS:  FOR NOVEMBER:  50 CONTRACTS AND FOR …

 

FOR DECEMBER: 2623 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: 2673.  ON A NET BASIS WE GAINED 2875 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED  3202 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 2673 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:   2875 CONTRACTS...AND ALL OF THIS DEMAND OCCURRED WITH A 22 CENT RISE IN PRICING// YESTERDAY.

 

 

 

 

We are now in the non active delivery month of October and here we had a LOSS of 57 contracts to stand at 3 contracts.  We had 59 notices filed  YESTERDAY so we gained 2 contracts or AN ADDITIONAL 10,000 oz will stand for delivery at the comex as these guys refused to accept a London based forward plus as well as a fiat bonus . Somebody was after badly needed physical silver.

 

After October, is the non active delivery month of November and here we gained 40 contracts up to 1300 contracts.  After November, we have a December contract and here we LOST 71 contracts up to 158,215

 

 

 

 

 

 

 

 

We had 2 notice(s) filed for 10,000 OZ for the SEPTEMBER 2018 COMEX contract for silver

 

Trading Volumes on the COMEX

 

PRELIMINARY COMEX VOLUME FOR TODAY: 271,061 contracts,

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  202,019  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 24-/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  

 

100.0000

 

oz

 

?? jpm

 

 

 

 

 

No of oz served (contracts) today
32 notice(s)
 3200 OZ
No of oz to be served (notices)
48 contracts
(4800 oz)
Total monthly oz gold served (contracts) so far this month
1784 notices
178400 OZ
5.5489 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 1 customer deposit
i) Into JPMorgan: 100.000 oz
total customer deposits: 100.00  oz
we had 1 major adjustment..and I was waiting for this:
out of HSBC:  49,828.126 oz was adjusted out of the dealer and this landed into the customer account of HSBC and this should be deemed a settlement

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 32 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 1 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 (1784) x 100 oz or 100 oz, to which we add the difference between the open interest for the front month of OCT. (80 contracts) minus the number of notices served upon today (32 x 100 oz per contract) equals 183,200 OZ OR 5.698 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 (1784 x 100 oz)  + {80)OI for the front month minus the number of notices served upon today (32x 100 oz )which equals 183,200 oz standing OR 5.6980 TONNES in this active delivery month of OCTOBER.

 

We gained 31  contracts or 3100 oz of gold will stand as these guys refused to morph into London based forwards as well as shunning a fiat bonus

 

 

 

THERE ARE ONLY 4.428 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 5.698 TONNES STANDING FOR OCTOBER  

 

 

 

total registered or dealer gold:  142,390.415 oz or   4.428 tonnes
total registered and eligible (customer) gold;   8,101,521.184 oz 251.99 tonnes

IN THE LAST 25 MONTHS 104 NET TONNES HAS LEFT THE COMEX.

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

end

And now for silver

AND NOW THE OCTOBER DELIVERY MONTH

OCTOBER INITIAL standings/SILVER

OCT 24 2018
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 1,202,087.009 oz
CNT
Scotia

 

 

Deposits to the Dealer Inventory
NIL
oz
Deposits to the Customer Inventory
1,747,384.638 oz
oz
jpm
cnt
No of oz served today (contracts)
2
CONTRACT(S)
210,000 OZ)
No of oz to be served (notices)
1 contracts
(5,000 oz)
Total monthly oz silver served (contracts) 470 contracts

(2,350,000 oz)

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

we had 0 inventory movement at the dealer side of things

 

 

total dealer deposits: NIL oz

total dealer withdrawals: 0 oz

we had 2 deposit into the customer account

i) Into JPMorgan: 1,146,794.700 oz

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

JPMorgan now has 146.144 million oz of  total silver inventory or 50.9% of all official comex silver. (147.26 million/289 million)

ii)Into CNT:  600,589.938 oz

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today:  1,747,384.638  oz

we had 2 withdrawals from the customer account;

 

i) Out of CNT: 602,084.369 oz

II) Out of Scotia:  600,003.290 oz

 

 

 

 

total withdrawals: 1,202,087.009 oz

 

 

we had 0 adjustments

 

 

 

 

 

 

 

 

 

total dealer silver:  77,197 million

total dealer + customer silver:  289.267  million oz

The total number of notices filed today for the OCTOBER 2018. contract month is represented by 2 contract(s) FOR 10,000 oz. To calculate the number of silver ounces that will stand for delivery in OCT., we take the total number of notices filed for the month so far at 470 x 5,000 oz = 2,350,000 oz to which we add the difference between the open interest for the front month of OCT. (3) and the number of notices served upon today (2 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the OCT/2018 contract month: 470(notices served so far)x 5000 oz + OI for front month of OCT( 3) -number of notices served upon today (2)x 5000 oz equals 2,355,000 oz of silver standing for the OCT contract month.  This is a huge number of oz standing for an off delivery month.

We gained 2 contracts or an additional 10,000 oz will be standing at the Comex as these guys refused to morph into London based forwards on top of not receiving a fiat bonus .

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 83,351 CONTRACTS  …

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 58,862 CONTRACTS..

 

 

YESTERDAY’S CONFIRMED VOLUME OF 59862 CONTRACTS EQUATES TO 294 million OZ  OR 42.04% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV FALLS TO -4.01% (OCT 23/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -1.42% to NAV (OCT 23/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -4.01%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 12.48/TRADING 11.92/DISCOUNT 4.45

END

And now the Gold inventory at the GLD/

OCT 24

OCT 23/WITH GOLD UP $11.85 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 747.88 TONNES

Oct 22/WITH GOLD DOWN $3.90 TODAY: A WITHDRAWAL OF 2.97 TONNES OF GOLD FROM THE GLD INVENTORY/INVENTORY RESTS AT 745.82

AND THEN: A DEPOSIT OF 2.06 TONNES SUCH THAT THE FINAL RESTING INVENTORY IS 747.88 TONNES

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 24.2018/ Inventory rests tonight at 747.88 tonnes

*IN LAST 483 TRADING DAYS: 185.33 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 383 TRADING DAYS: A NET 28.80 TONNES HAVE NOW BEEN REMOVED FROM GLD INVENTORY.

 

end

 

Now the SLV Inventory/

OCT 24

OCT 23/WITH SILVER UP 22 CENTS/A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.819 MILLION OZ /INVENTORY RESTS AT 331.690 MILLION OZ.

OCT 22/WITH SILVER DOWN 8 CENTS: A SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 470,000/INVENTORY RESTS AT 334.509 MILLION OZ/

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 24/2018:

 

Inventory 331.690 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

HUGE JUMP IN LIBOR AND GOFO RATES

YOUR DATA…..

6Month MM GOFO 2.41/ and libor 6 month duration 2.75

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

G0FO+ .36

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.66%

LIBOR FOR 12 MONTH DURATION: 3.03

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.40

end

 

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG

Palladium Surges To All Time Record High On Russian Supply Concerns

– Palladium prices surge to an all-time nominal high over $1,150/oz
– Russia is one of the top producers and growing tensions with the U.S. may result in a “supply crunch”

– Palladium is widely used in the automotive industry and is experiencing significant demand and a “supply crunch”
– Deep supply deficits in palladium are predicted by Citigroup and other analysts (see Bloomberg table)
– Gold and silver to follow due to similar strong supply and demand fundamentals

via Bloomberg

Palladium, a precious metal widely used in the automotive industry, has hit an all-time high.

The rally has been fueled by concern over shortages and speculators piling in to bet on even higher prices. The majority of palladium is used to make catalytic converters in gasoline automobiles, and there’s increased demand for the metal as consumers increasingly choose gasoline vehicles over diesel.

In a year that’s seen losses for most other commodities, the rally in palladium has been exceptional. It’s the one major metal that’s at an all-time high and prices have almost doubled in the past two years. On Tuesday, the metal advanced 1.8 percent to settle at $1,144.20 an ounce at 5 p.m. in New York. It earlier climbed as much as 2.5 percent to $1,152.54.

The rally has accelerated in recent days due to growing political tensions between the U.S. and Russia, one of the top producers, and stimulus measures in China, a key consumer.

“Supplies were already predicted to be in deficit this year,” and any future supply issues with Russia may exacerbate the problem, said David Govett, head of precious metals at Marex Spectron Group Ltd. “Forward rates are tightening and there is good physical offtake from the market.”

Here’s what you need to know about the rally:

Supply Crunch

The plunge in palladium holdings of exchange-traded funds is the biggest indicator that there’s a scramble for supply.

Holdings have dwindled in recent years, but it’s not a bearish signal. Rather, it’s an indication that there’s a lucrative business of lending palladium, where borrowers pay ETF holders a premium to use the metal.

Market Deficit

The market has remained in deficit as consumers turn toward gasoline cars, which tend to use more palladium in autocatalysts, instead of diesel. Shortages will probably persist though 2020, leading to the “tightest” market in two decades, according to Citigroup Inc.

Running Short

Citigroup sees `tightest’ palladium market in decades on deficits

Citigroup and Bloomberg

 

Substituting Metal?

The rally raises the risk that the auto industry, the biggest user of palladium, will look to reduce consumption and instead use more platinum in catalytic converters. It’s been 17 years since palladium was last this expensive relative to platinum.

Both metals are used in varying amounts in different engine types, depending on efficiency and price. While it can take years to design autocatalysts, sizable switching has happened before. The car industry cut palladium usage by almost 50 percent in two years through 2002 after prices spiked, and increased platinum purchases by 37 percent.

Too Fast?

Prices appear to have moved ahead of fundamentals in the short term, according to Georgette Boele, an analyst at ABN Amro Bank NV. The metal’s 14-day relative-strength index is at about 77, above the level of 70 that suggests to some chart watchers that palladium may have become overbought.

 

DAG Video Still Play V2

 

News and Commentary

Gold edges higher as political, economic concerns lend support (Reuters.com)

Trump calls Khashoggi murder ‘worst cover-up in history’ (BBC.com)

Miner Fresnillo trims silver output guidance (Reuters.com)

Euro zone businesses hit the brakes as trade war stalls growth (Reuters.com)

U.S. Stock Futures Decline as Europe Bucks Selloff (Bloomberg.com)

U.K. Cabinet at War Over Theresa May’s Brexit Plan (Bloomberg.com)

China will ‘compel’ Saudi Arabia to trade oil in yuan (CNBC.com)


Source: Bloomberg

Brexit Bulletin: May Faces Open Conflict (Bloomberg.com)

Financial Extremes, The Everything Bubble and Gold (Gata.org)

Stock market faces ‘unlimited downside risk,’ warns veteran trader (Marketwatch.com)

We Have Far More Control Than They Want Us To Believe
(Sovereignman.com)

Trump says Fed Chairman Powell ‘almost looks like he’s happy raising interest rates’ (Zerohedge.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA AM)

23 Oct: USD 1,235.60, GBP 950.67 & EUR 1,076.45 per ounce
22 Oct: USD 1,222.90, GBP 938.09 & EUR 1,062.21 per ounce
19 Oct: USD 1,228.25, GBP 942.44 & EUR 1,073.12 per ounce
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

Silver Prices (LBMA)

23 Oct: USD 14.71, GBP 11.33 & EUR 12.83 per ounce
22 Oct: USD 14.63, GBP 11.23 & EUR 12.72 per ounce
19 Oct: USD 14.61, GBP 11.21 & EUR 12.75 per ounce
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


Recent Market Updates

– “IMF Warning Highlights Gold’s Importance As A Diversification and Happy Birthday GoldCore”
– End Of The Financial World?
– Gold Reserves Surge 1,000% In Hungary As It Joins Poland, Russia, China and Other Central Banks Buying Gold
– 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

DAG Video Still Play V2

davidrussell

 

ii) GATA stories

Looks like China will yield to U.S. sanctions on Iran

 Section: 

Exclusive: As U.S. Sanctions Loom, China’s Bank of Kunlun to Stop Receiving Iran Payments, Sources Say

By Chen Aizhu and Shu Zhang
Reuters
Tuesday, October 23, 2018

BEIJING — Bank of Kunlun Co., the key Chinese conduit for transactions with Iran, is set to halt handling payments from the Islamic Republic under pressure of imminent U.S. sanctions against the country, four sources familiar with the matter told Reuters.

Kunlun, the main official channel for money flows between China and Iran, has informed clients that it will stop accepting yuan-denominated Iranian payments to China from Nov. 1, said the sources, who include external loan agents and business officials who trade with Iran.

The bank, controlled by the financial arm of Chinese state energy group CNPC, had already quietly suspended euro-denominated payments from Iran in late August, the four sources said, declining to be named due to the sensitivity of the matter. …

… For the remainder of the report:

https://www.reuters.com/article/us-china-iran-banking-kunlun-exclusive/e…

END

Craig Hemke at Sprott Money: Russia may not save price suppression in palladium this time

 Section: 

9p ET Tuesday, October 23, 2018

Dear Friend of GATA and Gold:

Craig Hemke of the TF Metals Report, writing at Sprott Money, today raises the possibility that Western governments and their bullion bank agents are in danger of losing control of the palladium market, since the last time palladium broke out, Russia came to the rescue with large physical supplies. Russia, Hemke writes, does not seem likely to help the West again with palladium.

Hemke’s analysis is headlined “Watching Palladium Make New All-Time Highs” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/watching-palladium-make-new-all-time-hi…

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

END

Central banks to increase gold buying for first time since 2013

 Section: 

By Rupert Rowling
Bloomberg News
Wednesday, October 24, 2018

Central banks are set to increase their purchases of gold in 2018 for the first time in five years as eastern European and Asian countries seek to diversify their reserves.

Net purchases of gold by central banks are forecast to rise to 450 metric tons this year, up from 375 tons in 2017, according to consultancy Metals Focus Ltd. That will be the first increase since 2013, when banks boosted their holdings by 646 tons, the most for several decades.

With just over two months of the year left, it’s more likely that the projection will be raised than lowered because central banks generally seem interested in purchases, according to Junlu Liang, a senior analyst at London-based Metals Focus. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2018-10-24/central-banks-to-incr..

END

Sri Lanka calls for global coalition to tackle rising dollar

 Section: 

From Agence France-Presse
via Arab News, Riyadh, Saudi Arabia
Tuesday, October 23, 2018

COLOMBO, Sri Lanka — Sri Lanka on Tuesday called for a “coalition of the willing” to help stabilize free-falling emerging market currencies around the globe, as the beleaguered rupee slumped to fresh lows.

The island’s currency bottomed out at a record-low 174.12 rupees to the dollar, resisting a slew of measures by policymakers to arrest its steady decline.

The rupee has shed more than 12 percent of its value this year and Sri Lanka fears it could slide further as U.S. sanctions squeeze Iran, the island’s chief source of oil.

A stronger dollar has made it difficult for emerging markets to repay debts and battered global currencies from Turkey to India and Argentina.

Finance Minister Mangala Samaraweera invited those nations experiencing currency crises to visit Colombo and hash out a strategy. …

… For the remainder of the report:

http://www.arabnews.com/node/1392591/business-economy

* * *

END


iii) Other Physical stories:

 

_________________________________________________________________________________________________

 

 

 

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

i) Chinese yuan vs USA dollar/CLOSED DOWN TO 6.9427/HUGE DEVALUATION FOR THE PAST FOUR WEEKS RESUMES/CHINESE COMING TO USA FOR TRADE TALKS IN NOVEMBER CANCELLED //OFFSHORE YUAN:  6.9482   /shanghai bourse CLOSED UP 8.47 POINTS OR 0.33%

. HANG SANG CLOSED DOWN 96.77 POINTS OR 0.38%

 

 

2. Nikkei closed UP 80.49 POINTS OR 0.37%

 

3. Europe stocks OPENED GREEN 

 

 

 

/USA dollar index RISES TO 96/77/Euro FALLS TO 1.1404

3b Japan 10 year bond yield: FALLS TO. +.14/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.54/ 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:: 66.82 and Brent: 76.60

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.39%/Italian 10 yr bond yield UP to 3.59% /SPAIN 10 YR BOND YIELD DOWN TO 1.62%

3j Greek 10 year bond yield FALLS TO : 4.30

3k Gold at $1230.50 silver at:14.72   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 9/100 in roubles/dollar) 65.60

3m oil into the 66 dollar handle for WTI and 76 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 112.54DESTROYING 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 0.9957 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1412 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 +0.43%

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 3.12% early this morning. Thirty year rate at 3.34%

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

6.  TURKISH LIRA:  UP  TO 5.7053

“Tremendous Wall Of Worry” Sends US Futures

Lower As China, Europe Rebound

One day after US equity futures plunged in early morning trading on a combination of fears about China slowing, Italy’s standoff with the EU, corporate profits, Fed tightening, escalating trade war and Saudi tensions, sentiment this morning appears somewhat more stable, even if S&P futures are near session lows and set for their 6th of losses, having faded an earlier bounce after Chinese stocks posted modest gains.

The global picture was mixed, with Asian shares extending their decline on Wednesday, as the MSCI Asia Pac index (MXAP) dropped another 0.3%, and is now down 19.6% from its January high, just shy of a bear market despite a modest rebound in the Shanghai Composite as nervous investors were unwilling to buy the dip after the latest bout of market volatility.

Meanwhile, European stocks bucked the Asian decline and brushed off weaker flash PMIs which underscored the growing impact of trade wars and tariffs, with most bourses in the green.

Confirming that Europe’s economy is slowing down, IHS Markit reported that the Eurozone’s manufacturing PMI dropped further in October, sliding from 53.2 to 52.1, sharply lower from the 58.0 reported a year ago and missing estimates of 53.0. Meanwhile, the New Orders subindex posted a contraction, sliding to 49.8 vs 51.5 in September, its lowest reading since Nov. 2014

IHS Markit PMI™@IHSMarkitPMI

Flash Eurozone Composite Output Index drops to 52.7 (54.1 – Sep), lowest in just over 2 yrs. Both services and manufacturing sector growth slows notably (2-yr and 46-month low respectively). More here: http://ihsmark.it/3YUT30mlTW7 

View image on TwitterView image on Twitter

IHS Markit PMI™@IHSMarkitPMI

German business activity growth slows to near 3-and-a-half yr low (Flash Composite Output PMI at 52.7 vs. 55.0 in Sep). Evidence that manufacturing slowdown seen YTD is starting to spill over into the services economy. More here: http://ihsmark.it/MKNl30mlUbY  pic.twitter.com/BsyXQLuGGx

View image on TwitterView image on Twitter

European basic resources and tech names underperformed, with auto names idle despite more negative China-related news for the sector after Volkswagen slashed its outlook on Chinese sales. Italy’s FTSE MIB lagged peers as the Italian banking sector sheds 1%, however with BTPs steady and the Bund/BTP spread holding around 315bp, fears over Italy remains contained.

The European tech index SX8P also declined, extending Tuesday’s sell-off and trailing a broader market rebound; chip stocks tumbled further as AMS slid for a second day with downgrades rolling in while STMicro results fail to boost sentiment. Software stocks limit losses with Dassault Systemes +0.6% after raising EPS forecast.

Retailers were the biggest winners in the Stoxx Europe 600, while Barclays climbed on earnings and Deutsche Bank fell after cutting its revenue outlook. The pound weakened on Brexit worries, and European bonds followed Treasuries higher. While stocks generally ignored the disappointing manufacturing data, the Euro dropped, dipping under 1.14 to the lowest level since mid-August.

Trader sentiment remained fragile as global shares set for the worst month in more than three years. The cautious mood was further damped by renewed worries over the impact of tariffs after industrial bellwether Caterpillar warned about rising costs due to higher steel prices. European politics is also in focus, with Italian Prime Minister Giuseppe Conte doubling down on his government’s budget and U.K. Prime Minister Theresa May’s cabinet descending into conflict.

In rates, German and U.S. curves are bull steeper, after the German 10Y breached 0.40% before the move is faded. Meanwhile, gilt yields dropped as GBPUSD breaches yesterday’s lows ahead of Prime Minister’s Questions and PM May’s appearance before the 1922 committee. US 10Y yields dropped modestly to 3.145% as the Bloomberg Dollar Spot Index stood just 0.2% short of its year-to-date high. The Canadian loonie was steady ahead of Bank of Canada’s rate decision, when it is forecast to raise rates. The Swedish krona swung between losses and gains as the Riksbank maintained expectations for a December hike.

Emerging-market assets halted their declines as currencies clawed back gains after Tuesday’s slump and stocks traded little changed. The Turkish lira, South African rand and Indian rupee led the advance, while the currencies of eastern Europe traded weaker as the dollar climbed against the euro. Lower U.S. Treasury yields and a relatively stable yuan eased concern over potential outflows from the Asian region. Investors are hurting as developing-nation stocks head for their worst year since 2011, fanned by concerns the U.S.-China trade war will hurt economic expansion. Still, there’s a possibility that weaker U.S. data in the fourth quarter could trigger a tactical rally for emerging markets as the pressure from higher U.S. rates eases, according to UBS Group AG.

“We’ve come up upon a tremendous wall of worry for U.S. stocks and stocks around the world,” said David Kudla, CEO of Mainstay Capital Management. “Concern among investors is the deceleration in earnings growth.”

In commodities, WTI resumed its sell-off touching the lowest in almost two-months on a pledge by Saudi Arabia to meet any shortfall that materializes from Iranian sanctions, with Brent dropping below its 50-DMA, flipping the Dec-Jan spread into contango for the first time since August.

Expected data include mortgage applications, PMIs, and new home sales. AT&T, Boeing, UPS, Ford, Microsoft, Tesla, and Visa are among companies reporting earnings. Texas Instruments drops in pre-market trading after slashing guidance.

Market Snapshot

  • S&P 500 futures down 0.8% to 2,725.00
  • STOXX Europe 600 up 0.4% to 355.48
  • MXAP down 0.3% to 150.05
  • MXAPJ down 0.2% to 473.38
  • Nikkei up 0.4% to 22,091.18
  • Topix up 0.08% to 1,652.07
  • Hang Seng Index down 0.4% to 25,249.78
  • Shanghai Composite up 0.3% to 2,603.30
  • Sensex down 0.2% to 33,780.07
  • Australia S&P/ASX 200 down 0.2% to 5,829.03
  • Kospi down 0.4% to 2,097.58
  • German 10Y yield fell 0.8 bps to 0.401%
  • Euro down 0.5% to $1.1417
  • Italian 10Y yield rose 9.9 bps to 3.217%
  • Spanish 10Y yield fell 2.7 bps to 1.636%
  • Brent futures down 0.9% to $75.75/bbl
  • Gold spot little changed at $1,230.89
  • U.S. Dollar Index up 0.3% to 96.28

Top Overnight News

  • U.S. President Donald Trump stepped up his attacks on Federal Reserve Chairman Jerome Powell, saying he “maybe” regrets appointing him to the post and demurring when asked under what circumstances he would fire the central bank chief. Trump told the Wall Street Journal that he was intentionally sending a direct message to Powell that he wanted lower interest rates
  • President Donald Trump said he is passing responsibility to Congress for responding to the killing of Jamal Khashoggi at a Saudi consulate in Istanbul
  • Almost three weeks after the death of Jamal Khashoggi in Istanbul, Saudi Arabia and Turkey have finally laid out competing versions of the journalist’s fate. For the U.S., now comes the hard part; deciding which of the conflicting story lines to endorse, or whether to just wait for more evidence and accusations to emerge
  • Crown Prince Mohammed bin Salman has “blood on his hands” in the killing of Khashoggi, a top aide to Turkey’s president said, in the country’s first direct accusation against the power behind the Saudi throne
  • Italian Deputy Premier Matteo Salvini said government budget program will not change. Separately, EU economics chief Pierre Moscovici said Italy’s 2019 economic growth target of 1.5% is “optimistic” in an interview with the newspaper la Repubblica
  • Italy won’t change its budget plans, according to Prime Minister Giuseppe Conte, who said he’s keeping a close eye on the 10-year spread between Italian and German bond yields
  • U.K. Prime Minister Theresa May is facing another bruising showdown with her own Conservative Party over her Brexit plans Wednesday, after a cabinet meeting descended into open conflict. Seven senior pro-Brexit ministers spoke out against a proposal to allow the U.K. to stay inside the European Union’s tariff regime indefinitely, according to people familiar with the matter
  • U.K. employers’ economic confidence is weakening as the nation prepares to leave the European Union. The net balance of employers with a positive outlook for the economy fell to the lowest level since February, the Recruitment and Employment Confederation said Wednesday
  • Expectations for a one-on-one meeting between President Donald Trump and China’s Xi Jinping are already being lowered with officials from both sides increasingly pessimistic about prospects for a resolution to the deepening trade war
  • The chairman of the House tax-writing committee said if Republicans retain the House and the Senate they’ll advance a 10 percent tax cut aimed at middle-income earners
  • Oil in New York slid more than 5 percent in Tuesday’s session as Saudi Arabia pledged to meet any supply shortfalls, and as a risk-off sentiment spread throughout global markets

Asian equity markets eventually traded mostly higher on what was a turbulent session, following the dramatic rebound on Wall St where all majors finished negative albeit well off worst levels. ASX 200 (-0.2%) and Nikkei 225 (+0.4%) opened higher on early bargain hunting following their recent declines and as the aggressive recovery stateside reverberated in the region. However, both indices failed to sustain their gains as commodity-related sectors dragged on Australia with energy the underperforner after a near-5% slip in oil prices, while the Japanese benchmark was temperamental and made several attempts on the 22000 level to the downside. Elsewhere, Shanghai Comp. (+0.3%) and Hang Seng (-0.4%) conformed to the volatile tone and swung between gains and losses amid indecisiveness due to on-going trade concerns and further efforts by Chinese authorities including a respectable liquidity injection by the PBoC. Finally, 10yr JGBs were marginally higher as prices benefitted from the overnight volatility and with today’s BoJ Rinban operation heavily focused on the belly.

Top Asian News

  • China Said to Halt Special Approval Process for New Games
  • Even a Gain in China Can’t Get Asia’s Stock-Market Bulls Going
  • Chinese Stocks Continue Wild Ways as Earlier Gains Evaporate
  • State Street Says Put Money in Cash as Volatility Increases

Major European indices are mostly higher, albeit off highs seen at the cash open as positive sentiment slowly fades away and US equity futures extended losses. The SMI (+0.5%) outperforms with Nestle (+1.0%) and Swiss Re (+0.8) lifting the index. The IT sector is under further pressure after yesterday’s slump, amid uninspiring earnings from STMicroelectronics (-8.8%), which in turn is weighing on chip makers across the continent. On the flip side, luxury names are lifted the on back of Kering (+7.5%) after reporting a beat on earnings aided significantly by Gucci sales, with other names such as LVMH (+1.3%) and Hermes (+2.0%) move in sympathy. Furthermore, Vinci (+3.5%) are higher following a 7% beat on their revenue growth, while Deutsche Bank (-3.7%) are in the red after cutting revenue guidance.

Top European News

  • Trade Woes Set Up Euro-Area Economy for Disappointing Year- End
  • Handelsbanken Plans 1,600 Job Cuts as CEO Announces His Exit
  • Heineken’s Asian Shipments Weaken as Growth Engine Stutters
  • ECB Grappling Italy, Inflation to Give Traders Food for Thought

In FX, DXY – The broad Dollar and index are benefiting from the demise of most major rivals, as overall risk sentiment wobbles again after signs of a revival on Tuesday and overnight. The DXY is just off 96.341 highs, and finally breached a key level around 96.150 that has been capping rallies, with bulls now eyeing 96.402. EUR/GBP – Propping up the G10 pile, but for different reasons as the single currency breached technical support around 1.1430 vs the Usd and tripped stops below 1.1425 in wake of prelim Eurozone PMIs that fell short of expectations, and with the pan manufacturing survey particularly weak given sub-50 new orders. Meanwhile, Cable retreated further from 1.3000+ highs to trigger some chart-related offers around 1.2937 ahead of UK PM May’s 1922 showdown and ongoing Brexit uncertainty, which is keeping the Eur/Gbp cross above 0.8800. SEK – Clawing back lost ground, largely due to the aforementioned Eur weakness, having weakened to circa 10.3900 and not far from heavy supply/resistance at 10.4000 following the latest Riksbank policy meeting, as guidance was maintained for a hike either in December or February next year. This, despite recent Swedish inflation data surprising to the upside and 2 hawkish dissenters calling for a 25 bp rise in the repo. However, the consensus remains for gradual normalisation and an expansionary stance to continue for an extended period even after the 1st tightening for years is delivered. Hence, Eur/Sek back down to 10.3300, or just under, and Eur/Nok following suit (sub-9.5000). AUD/NZD – The antipodean Dollars have both slipped back from overnight peaks, as the Yuans weaken and the aforementioned Chinese-led global stock market recovery wanes. Aud/Usd is back under 0.7100 and Nzd/Usd pivoting 0.6550, with the Kiwi now looking towards NZ trade data for some independent impetus.

In commodities, gold is moving sideways, off yesterday’s highs as the yellow metal detaches itself from USD action to moves in lockstep with risk sentiment, as markets are focused on the Italian budget, trade tensions and concerns over US earnings. Copper prices fell slightly (-0.2%), which could be related to doubts from investors regarding China’s plans to invigorate their economy.
The oil market is mixed with WTI (Unch) little changed and Brent (-0.8%) in the red, as the upcoming Iranian sanctions move back into focus after Saudi Arabia reassured markets that oil supply will meet demand yesterday. Furthermore, the weekly API’s printed
a larger-than-expected build of 9.88mln barrels against an expected 3.70mln barrels, which provided further pressure to the complex. Traders will be keeping an eye on the weekly DoE crude inventory numbers released later today with focus on US oil production.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -7.1%
  • 9am: FHFA House Price Index MoM, est. 0.3%, prior 0.2%
  • 9:45am: Markit US Manufacturing PMI, est. 55.3, prior 55.6; Services PMI, est. 54, prior 53.5; Composite PMI, prior 53.9
  • 10am: New Home Sales, est. 625,000, prior 629,000; New Home Sales MoM, est. -0.64%, prior 3.5%
  • 2pm: U.S. Federal Reserve Releases Beige Book

DB’s Jim Reid concludes the overnight wrap

Hopefully someone reading this is $1.6bn richer after last night’s mega US lottery draw. My builder and the global equity markets both need you. To put this mind boggling sum in some context though the Bloomberg global equity index lost $637 billion in market cap yesterday. So we’ll need a few lottery winners to fill the gap at the moment.

Even with a near 2% rally from the lows of the session US equities fell last night to cap another troubled day for risk across the globe. The S&P 500 did pare losses of as much as -2.34% to close only -0.55% lower (nearly got back to flat at one stage late in the session).

The moves were similar for the DOW and NASDAQ, which retraced from down -2.17% and -2.79% respectively to close down -0.50% and -0.32%. The FANGs opened down -2.92% in New York, but ultimately closed +0.45% higher. Investors were initially spooked by some cautious commentary from earnings reports (more below), but the concerns faded through the US session. Still, the S&P 500 is on track for its worst month since August 2015, and most global equities are down for the year. North America is still the best performing region with 67% of the six countries having benchmark equities trading higher on the year in US dollar terms. In EMEA, only 23% of countries are up, and only 6% of countries in the European Union (in USD). In South American (6 countries) and Asia (18), not a single country has a positive return in USD terms this year. The recent selloff has taken a steep toll. The UK’s FTSE (-1.24%) briefly touched levels yesterday that it first breached in 1999, while across the continent, indexes hit multi-year lows. The STOXX 600 fell -1.58% to its lowest level since Dec 2016. The DAX (-2.17%) and IBEX (-0.91%) also closed at their lowest levels since 2016. European banks (-1.27%) are at their lowest levels since October 2016 just ahead of an important Q3 reporting season. Its almost as if the calm and positive 2017 never happened now for many indices. Indeed the VIX and V2X both closed above 20 again – levels the former didn’t cross in 2017 and the latter only crossed around the French elections.

Away from equities, other risk assets also traded lower yesterday, with the index of US HY CDS rising +8bps to hit fresh highs since 2016. The cash US HY market has held in much better but is finally starting to respond to the external environment widening 13bps yesterday and over 50bps from the recent tights. We’ve long seen it as the most expensive RV part of the credit spectrum. Safe havens rallied yesterday, with 10-year Treasury and Bund yields falling -3.0bps and -3.9bps respectively. Gold advanced  +0.70% to a 3-month high, and the yen rallied +0.35% versus the dollar.

This morning in Asia, markets are trading mixed with the Nikkei (-0.12%) down while the Hang Seng (+1.08%), Shanghai Comp (+1.29%) and Kospi (+0.34%) are up. However, at one point the Shanghai Comp and Hang Seng were down as much as -0.65% and -0.60%, respectively before paring back the losses. In the meantime, China continues its drip feed of stimulus for the stumbling markets with the PBOC announcing yesterday that it plans to give CNY 10bn to China Bond Insurance Co. to provide credit support for debt sales by private enterprises.

Elsewhere, MSCI Asia Pacific index was down -19.97% from its January high after yesterday’s close and is flirting with bear market territory. So one to keep an eye on over the next few sessions.

In other news, US President Trump ramped up his criticism of Fed Chair Powell. In an interview with the WSJ he said that Powell “almost looks like he’s happy raising interest rates” and that it is “too early to tell, but maybe” he regrets appointing him. Trump also said that he was intentionally sending a direct message to Powell that he wanted lower interest rates, even as he acknowledged that the central bank is an independent entity.

Back to yesterday and earnings reports dominated market attention with a series of negative releases weighing on the market in early afternoon trading. Caterpillar, the machinery manufacturer seen as a global macro bellwether, reported strong earnings but expressed caution about the outlook. The company reported that manufacturing costs were higher due to increased material and freight costs, and cited tariffs as a headwind. 3M, another diversified industrial firm, revised down its earnings guidance, citing the strong dollar as a headwind. Those two firms traded -7.56% and -4.38% lower, respectively. In Europe, automaker Renault reported a drop in revenues, saying “the situation in emerging markets is hurting pretty bad” and the “underlying market in the UK is not good.” Chipmaker “ams” lowered its profit guidance, and IT services firm Atos cited a “more uncertain and challenging” global environment.” There were some bright spots from Lockheed Martin, McDonalds, United Technologies, and Verizon, but they didn’t fully outweigh the cautious tone.

With the renewed focus on tariffs and the stronger dollar from some corporate earnings reports, markets were especially sensitive to the relevant rhetoric from US policymakers. Comments yesterday from White House economic adviser Larry Kudlow did not ease concerns, as he said that Presidents Trump and Xi will meet at next month’s G-20 summit but downplayed the likelihood of a deal  that would defuse tensions. Kudlow said that “I’d love to see them [China] respond” to the administration’s requests, but “thus far, they haven’t.” The yuan briefly eclipsed its weakest closing level of the year (6.947) during yesterday’s trading, before closing within 0.06% of that level. Our economists continue to expect China to ease policy to combat trade tensions, weakening the yuan to 7.40 next year.

Italian BTPs rallied as much as -7.3bps in the morning before reversing gear, and ultimately closing +10.2bps higher. Initially,  sentiment improved on optimistic rhetoric from Eurogroup Chair Mario Centeno, who said that talks with Italy have been “very positive” and that he was optimistic that the European Commission would reach a compromise with the country authorities. Press reports in Il Messaggero said that the Italian government was readying a “plan B” to address the Commission’s concerns by moderating the pace of planned expenditures. Later in the session, however, Prime Minister Conte directly refuted the reports, saying there is no “plan B.” The Commission formally rejected Italy’s budget and their rhetoric was not especially constructive. Commission Vice President Dombrovskis said that “the Italian government is openly and consciously going against commitments made.” So tensions continue to escalate on this front and we expect the trend to continue.

Sterling also saw steep intraday moves, gaining as much as +0.62% versus the dollar before trading lower to close only +0.17% higher. Initially, investors were encouraged by reports that the EU will offer Prime Minister May a UK-wide customs union arrangement in an effort to resolve their outstanding issues. Our economists do not think that such an arrangement will be easy to get through parliament. If it covers the entire UK and is open-ended, the hard Brexiteer flank of the Conservative party will not be satisfied; if it is temporary and separates the UK and Northern Ireland in some way, the DUP will not be satisfied; and the EU is unlikely to support a deal that resolves these differences. Later in the evening, a cabinet meeting at Downing Street reportedly (per Bloomberg) erupted in intra-party conflict as PM May tried to navigate all these differences. Separately, The Times political editor tweeted late yesterday that the Brexit transition will last for years under PM May’s latest plan where Plan A is to involve Northern Ireland in a separate VAT area. The Times further reported that the Brexit transition period will be on a “rolling” basis with an annual “decision point” where any transition extension is reviewed.

The geopolitical dispute between Turkey and Saudi Arabia continued to escalate yesterday, with Turkish President Erdogan describing the disappearance of journalist Jamal Khashoggi as “a political murder.” He endorsed the “sincerity of King Salman” but pointedly stopped short of mentioning Crown Prince Mohammed bin Salman. The tensions did not drive market action, but will continue to receive outsized attention as Turkey continues to makes its influence count (Bloomberg).

Separately, Brent crude oil dropped -4.32% for its worst day in over three months. Saudi Energy Minister said that OPEC is in “’produce as much as you can’ mode” and that he is confident that the cartel “will meet any demand that materializes.” Increased supply could balance out disruptions in Iran and Venezuela, which have underpinned the rally in oil prices this year. Additionally, investors anticipate the Department of Energy will tomorrow announce a fifth consecutive weekly build in US crude oil inventories, the longest such stretch since the first quarter of 2017.

The data front was relatively quiet yesterday. German PPI printed at +0.5% mom and +3.2% yoy, beating expectations for +0.3% and +3.0%, though the upside was driven by higher energy costs rather than underlying pressures. In the UK, the Confederation of British Industry reported the October manufacturing new orders index at -6, missing expectations for a reading of +2 and the lowest print since 2016. Finally, in the US, the Richmond Fed manufacturing index came in at 15 versus expectations for 24, a miss but the 25th consecutive month of expansion, the longest stretch since 1995.

Data releases will be in focus today, with preliminary October PMIs across the globe. France, Germany, and the euro area will report their manufacturing services, and composite PMIs in the morning followed by the US in the afternoon. We will also get France’s October business confidence, manufacturing confidence, production outlook indicator, and business survey overall demand. The ECB will release September’s M3 money supply, and the British Bankers’ Association will publish its September finance loans for housing in the UK. In the US, we get latest weekly MBA mortgage applications, August’s FHFA house price index, September’s new home sales, and the Fed’s latest Beige Book. Away from data, the Fed’s Bostic, Bullard, and Mester will be speaking at different times. European Council President Donald Tusk and the European Commission President Jean-Claude Juncker will present conclusions from the October 18-19 summit to the EU Parliament. Besides this, Barclays, Microsoft, AT&T, Boeing, and Ford will report their earnings.

 

.

 

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 8.47 POINTS OR 0.33% //Hang Sang CLOSED DOWN 96.77 POINTS OR 0.38% //The Nikkei closed UP 80.49 OR 0.37%/ Australia’s all ordinaires CLOSED DOWN 0.31%  /Chinese yuan (ONSHORE) closed DOWN  at 6.9427 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil DOWN to 66/82 dollars per barrel for WTI and 76.60 for Brent. Stocks in Europe OPENED RED //.  ONSHORE YUAN CLOSED SLIGHTLY DOWN AT 6.9427 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED SLIGHTLY DOWN ON THE DOLLAR AT 6.9482: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS STOPPED   : /ONSHORE YUAN TRADING STRONGER  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

 USA ships travel through the Taiwan Strait as they provoke China.
(courtesy zerohedge)

“Prospect Of U.S.-China War Rising” After US Warships Sail Through Taiwan Strait

Just after U.S. warships again made a provocative passage through the Taiwan Strait on Monday, further making already strained tensions between the Washington and Beijing — currently in the midst of a trade war — even hotter, Steve LeVine at Axios poses the question long on the Western public’s mind: what are the chances of a US-China war?

LeVine recently crossed paths with Graham Allison, who published his explosive “Destined For War: Can America And China Escape Thucydides Trap?” a year ago which detailed the reasons for a coming major war being all but inevitable, sparking a global debate about the Harvard professor’s controversial thesis. LeVine followed up with Allison in relation to the recent uptick in tensions in the region of the South China Sea:

He said, if history holds, the U.S. and China appeared headed toward war.

Over the weekend, I asked him for an update — specifically whether the danger of the two going to war seems to have risen.

“Yes,” he responded. The chance of war is still less than 50%, but “is real — and much more likely than is generally recognized.”

LeVine comments of Graham Allison’s central thesis“Glued to a 2,400-year-old script, the U.S. and China seem to be on the same war-bound path that great powers have taken since Sparta fought upstart Athens.”

LA Times: On Monday the ships sailed from the south to the north through the Taiwan Strait and were shadowed by multiple Chinese navy vessels. (U.S. Navy)The reference is to the History of the Peloponnesian War, in which ancient Greek historian Thucydides told us the tale of a dominant regional power (Sparta) that felt threatened by the rise of a competing power (Athens). Sparta felt so threatened, in fact, that all the moves they made to keep the Athenian rise in check eventually escalated the power struggle into an all out war.

The idea is that when, out of fear, a dominant power takes certain steps to keep its competitor at bay, these actions ultimately lead to war between the two, or what modern political scientists call the Thucydides Trap.

“If Thucydides were watching, he’d likely say all parties almost seem to be competing to show who can best exemplify the role as rising power, ruling power, and provocateur.

— Graham Allison

LeVine summarizes, based on Allison’s latest comments, that now more than ever the two great powers are inching toward that trap in their brinkmanship based on an “inexorable, invisible force prodding them to almost inevitable war”. Per the Axios report:

The U.S. has slapped increasing tariffs on Beijing, cordoned off U.S. tech, and jailed a Chinese spy, while Beijing has continued to build its military footprint in the disputed South China Sea, demanded tech secrets from Western companies, and more.

But would the current trade war alone or even wide scale tech theft and a few encounters on the open seas be enough to trigger escalation and actual war?

Likely not, says Allison, but instead a WWI type scenario of an unintended domino effect of one-upmanship in which, for example, the simple assassination of Archduke Franz Ferdinand triggered massive escalation leading to world war. By a similar scenario, writes LeVine of Allison’s comments, “the two countries will be pulled into conflict by miscalculation involving a third party, such as Taiwan.”

Says Professor Graham Allison:

“What happens is that a third-party provocation, an accident, becomes a trigger to which one of the two feels obliged to respond. and they find themselves in a war that neither wanted.”

We saw precisely this almost happen between the US and Russia over Syria on multiple occasions over the past two years — especially with the September accidental downing of the Russian IL-20 surveillance plane with 15 crew members on board after US ally Israel launched a wide scale missile assault on Syrian government facilities.

Currently, what the Pentagon called a “routine” operation as two US Navy vessels sailed through the Taiwan Strait has sparked fury with Beijing, with the Chinese Foreign Ministry on Tuesday saying it’s expressed “deep concern” to the United States over the action, which was the second such operation this year.

Foreign ministry spokeswoman Hua Chunying said in reaction to the incident at a press briefing on Tuesday“The Taiwan issue concerns China’s sovereignty and territory, and is the most important, most sensitive issue in China-U.S. relations.”

The Pentagon, for its part, repeated its position of a “U.S. commitment to a free and open Indo-Pacific,” per Commander Nate Christensen, deputy spokesman for U.S. Pacific Fleet, via Reuters. “The U.S. Navy will continue to fly, sail and operate anywhere international law allows,” he added.

Meanwhile, a crucial piece in the South Morning China Post entitled, Taiwan’s cosying up to Trump could spark a China-US war, takes us down memory lane, and outlines precisely – based on recent history – how easily the world could be on the brink of an all-out US-China war per Graham Allison’s thesis:

This is not the first time Taiwan has become a central issue in US-China relations. In the 1960 US presidential debate, John Kennedy and Richard Nixon traded barbs over whether America should launch a nuclear war against China to protect the tiny islands of Matsu and Quemoy, or Kinmen, in the event of a communist invasion.

Trump might now see Taiwan as an increasingly valuable point of leverage over China, but Beijing will make no compromise on this politically most sensitive issue as it considers Taiwan a “core interest”.

As the US and China drift dangerously towards direct conflict, Taiwan should be cautious. The narrow Taiwan Strait could be the flashpoint that sparks war between the world’s most powerful nations.

Indeed the “Thucydides trap” might be right there in this seemingly remote strait that could very well be the flashpoint that takes us past the brink.

 

 

end

I still feel that Kyle Bass is one smart cookie as he tries to dissect what is going on with respect to the shady finances inside China.   After suffering two years of losses due to the rise in the yuan, he has now gained 10% this year and he believes that the Chinese yuan is going to falter badly and their debt to implode

a must read..

(courtesy Kyle Bass/zero hedge)

 

Kyle Bass: Trump Has “Strongest Negotiating Position We’ve Ever Had” Against China

After spending two years in the dog house, Hayman Capital Management and its founder, Kyle Bass, are finally seeing some positive returns on the fund’s signature short-Chinese-yuan play, which has returned more than 10% since the beginning of 2018 after the fund recorded a 20% loss last year. Since he first went public with the short in 2016, Bass has stood by his view that a looming capital outflow crisis would eventually cause the Chinese yuan to shed 30% of its value vs. the dollar. And luckily for him, Trump showed up and decided to expedite this process by waging his economically disruptive trade war.

So during an interview with CNBC, Bass said that China is facing its “worst financial situation” since the financial crisis after that 6.5% yoy GDP print, which has only given Trump more leverage to press his trade advantage. In making his case, Bass pointed to first-quarter data that showed for the first time in 17 years China ran a current account deficit, meaning it imported more goods and services than it exported, even as it continued to run a massive trade surplus with the US, even as it ran a massive trade surplus with the US. While this is consistent with China’s goal of transitioning into a service-reliant economy, the shortage of foreign capital will create serious economic headwinds in the short term.

“And so, the US is in a very particularly interesting negotiating position today. We are in the strongest negotiating position we’ve ever had against China. They’ve kind of leveled the playing field a little bit more with their, let’s say, subversion of WTO rules, their intellectual property theft and basically everything they’ve done to take advantage of the US over the past 15, 17 years.”

The Trump administration needs to level the playing field on trade, Bass said, and “it looks like they are doing so.” And it certainly helps that Trump’s trade push, while initially reviled by globalists in both parties, has since won the reluctant support of both Democrats and Republicans as the US economy has largely escaped any serious repercussions so far. But ultimately, the arbiter of government money and influence over the domestic economy is the yuan-dollar exchange rate. And as the yuan sinks, foreign ownership of Chinese assets is falling as the PBOC runs “a structural and more permanent” current-account deficit with the rest of the world as the US continues to institute trade barriers.

“So they can change a lot of things domestically, but their – the arbiter of the Chinese plan is their cross rate or their exchange rate with the rest of the world. China Inc.’s working capital account is now going South because they’re running what we believe to be a structural and more permanent deficit on the current account. And so, ie, their working capital, their dollar balance whether it’s dollars, euros, yen or pounds, it’s mostly dollars.”

All of this instability risks toppling the mountain of bad debt upon which China’s economic growth in recent years has depended. Already, corporate defaults have surged in 2018 to the highest level on record. 

Bass

With all of these factors at play, China is running what Bass described as “the largest financial experiment the world has ever seen.”

“And they’ve got, you know, $40 trillion worth of credit, somewhere between 40 and 50, no one knows, in a system with only a couple trillion dollars’ worth of equity.And so China is running the largest financial experiment the world has ever seen. And the economic tides have turned negative for them. If you notice the narrative amongst the United States, it’s actually a bipartisan narrative whereby you’re seeing both sides of the aisle pushing back on China taking advantage of the US.”

And with the yuan poised to break below the key technical level of 7 to the dollar, Bass and Hayman might finally be able to make up for the losses on their yuan short, as a break below 7 would likely invite a speculative attack.

Watch the full video below:

Watch CNBC’s full interview with Hayman Capital’s Kyle Bass from CNBC.

end

4.EUROPEAN AFFAIRS

Deutsche bank again in trouble as their net income plunges by 65%.  They are the largest derivative player on earth and their losses in this arena are killing them

(courtesy zerohedge)

Deutsche Bank Shares Tumble After Net Income

Plunges 65% On Lowest Revenue In 8 Years

There was some good, but mostly bad news in Deutsche Bank’s Q3 earnings report.

The good news is that after years of turmoil, the biggest German bank is showing signs of stabilization under new CEO Christian Sewing after a bitter boardroom battle. The bad news is that the bank missed across all key revenue metrics as Sewing scrambles with a looming problem: how to boost revenue after firing thousands of banks in a multi-year long cost-cutting campaign.

The German bank reported net income of €229 million on Wednesday, above the €160 million expected but 65% below the €649 million reported a year ago. Profit before tax also tumbled by nearly half, dropping from €933 million to €506 million.

Investors were closely watching the bank’s costs: the new management team, which was appointed last April, promised to deliver further cost-cutting to revamp the balance sheet. In the third quarter of 2018, the bank said that adjusted costs dropped 1% from a year ago to 5.5 billion euros, with the aim for the full year to bring adjusted costs down to €23 billion and €22 billion in 2019. A core part of the new “restructuring” effort have been mass layoffs as the number of workers is set to come down to 93,000 by the end of 2018, and 90,000 one year later.

But while costs and the bottom line beat were a modest positive surprise, the same could not be said for the bank’s revenue which disappointed across the board: total revenue of €6.17BN missed expectations of €6.34BN and guided lower, now predicting a slight decline for full year revenue after earlier guiding for a flat result; trading income in the key FICC division tumbled 15% from a year earlier, while equities trading, a sector where Wall Street banks generally posted gains, also dropped at the same pace as these two key businesses have been hardest-hit by executives departures recently.

More Q3 revenue details:

  • FICC revenue: €1.32BN vs €1.545BN in Q3 2017, and missing expectations of €1.365BN
  • Equities trading revenue: €466BN vs €548BN in Q3 2017, and missing expectations of  Exp. €473BN
  • Total sales and trading revenue: €1.79BN, missing expectations of €1.84BN
  • Total revenue: €6.17BN, missing expectations of €6.34BN

In total, Deutsche reported its lowest third-quarter revenue since 2010 and now expects a slight decline for the full year, after earlier guiding for a flat result according to Bloomberg.

The silver lining is that while revenue was a disappointment, costs also shrank which should allow the bank to post its first annual profit in four years according to Sewing who added that the focus now has to be on growing the top line without compromising controls: “With profit before tax of 506 million euros, this result is another milestone on our way to becoming a sustainably profitable bank. We have our costs under control and sufficient capital to grow. We are on track to be profitable in 2018, for the first time since 2014.”

Of course, being profitable by butting into the muscle is hardly what shareholders expected, and the CEO admitted as much writing in a memo to employees that while “we made headway on our cost reductions,” he admitted that “we have not yet achieved a turnaround in terms of revenues.

As Bloomberg notes, for investors who have been through the bank’s previous turnaround plans, “it’s a familiar pattern.” John Cryan, Sewing’s predecessor, had vowed to restore “controlled growth” last year after raising fresh funding, but failed to deliver. Sure enough, the stock was promptly punished for this latest disappointment, with Deutsche Bank shares falling 3.5%, having lost 44% of its value this year and trades near its record low.

Sellside reactions were mixed, with JPM analyst Kian Abouhossein writing that Deutsche Bank “has done an excellent job under Sewing” on cost reductions and improving the bank’s capital strength, however “we remain concerned about DB’s inability to turn around” the investment bank division.”

On the other hand, Goldman analyst Jernej Omahen was more critical, writing that the third quarter results were “weak” from an operational perspective, noting underperformance relative to U.S. peers in investment bank revenue progression, as well as the underlying pretax profit miss. The silver lining: capital was better-then-expected, as was bottom line, due to lower burden of non-operating items.

But the one recurring theme was the lack of top-line growth: “Costs are in line with targets,” said Daniel Regli, an analyst with MainFirst who has a hold recommendation on the stock. “But there is continued weakness in investment bank revenue. That needs to be fixed.”

* * *

Sewing had staked his restructuring effort, and Deutsche’s fourth in three years, on boosting profitability by trimming costs and refocusing on fewer, core activities. Yet the continued contraction in the top line risks undermining investor confidence in the strategy and may fuel speculation that the lender needs to combine with a rival in the long run, BBG adds.

The new CEO has vowed the investment banks will remain a core business for Deutsche Bank, with at least half of the revenue coming from the unit. And yet, he’s cutting at least 7,000 jobs and retrenching in areas such as prime finance, U.S. rates and corporate finance in the U.S. and Asia. The bank cut another 700 positions in the third quarter after eliminating about 1,700 jobs in the three months through June; it said it remains on track to hit its job target of well below 90,000 by end of 2019.

The bank’s steady exodus of employees has left the business stuck in what CFO James von Moltke called a “vicious circle” of declining revenue, “sticky” expenses, a lowered credit rating and rising funding costs. Additionally, the bank on Wednesday highlighted higher funding costs and geopolitical events among the headwinds for the securities unit.

Meanwhile, as the one-time financial titan continues to shrink, all management can do is try to boost morale: Garth Ritchie, head of the bank’s securities unit urged employees in a memo to “focus resolutely on rebuilding revenue momentum” in the final quarter; surely a preferable alternative to being fired. Von Moltke said on a conference call that the bank wants to redeploy excess cash to return to growth, as restructuring expenses are likely to be lower than previously expected. He said rating companies would be comfortable with such use of capital.

“We need to end the year on a strong note,” Sewing wrote in his memo. “We’ll stay disciplined on costs, and we’ll turn around revenues.”

Indeed…

END

We now know the red line in the sand: it is the spread between German rates and Italian rates. In other words if the spread hits 400 basis points, then the banks need recapitalization or in other words a bail in.  Watch for Italians to continue moving money into Switzerland.

(courtesy zerohedge

“400 bps”: Italy Inadvertently Sets The Red Line

For Coming Bank Runs

In what may prove to be a painful admission in retrospect and an inadvertent green light for future bank runs, on Wednesday morning Italy’s Cabinet Undersecretary Giancarlo Giorgetti said in an interview on Italy’s RAI that Italian banks would need a “recapitalization” if the spread with German bonds continues to rise toward 400 basis points, from the current level of 314bps which is just shy of the widest level it has been going back to early 2013.

The last time “lo spread” hit 400 bps was in late 2012, around the time of Mario Draghi’s legendary “whatever it takes” speech.

According to the Italian official, who is Deputy Prime Minister Matteo Salvini’s closest aide, bank assets would “automatically” suffer if the spread neared the 400-level and so as a consequence recapitalization would be needed. And since a recap for Italy’s capital starved banks would likely entail balance sheet restructurings, accompanied by bail-ins of creditors and/or depositors, the closer “lo spread” got to the critical red line, the more likely Italian bank runs will become.

Said otherwise, the Italian population will now be even more focused on the spread of Italian bonds, and the higher it grows, the less comfort Italians will have with keeping their savings in local banks, and the more likely bank jogs (and then runs) will become.

Having thus set the bogey, Giorgetti then tried to assure the population that such a move would not be needed, as the government would be ready to intervene “immediately” if needed and “won’t wait months as Matteo Renzi’s government did with Monte dei Paschi” although as Berlusconi so fondly remembers, any attempts at intervention will ultimately end up futile if not backstopped by the ECB and/or Brussels.

Meanwhile, delivering a somewhat contrary message, Corriere della Sera reported that Italy’s technocrat Finance Minister Giovanni Tria said that “we don’t want to wreck everything, we will follow attentively the market trend in the next few weeks.” Tria also said that Italy must be ready to respond to financial markets, which in turn means that if the EU Commission wants to pressure Italy’s populist government to fold on its demands for a 2.4% budget deficit – as it does – all it has to do is create some additional selling pressure on Italian bonds, especially now that Italy has admitted that a 400 bps spread in Italy-German bond yields is the potential “red line” for a bank run.

Confirming this, Tria also said that if the financial tension gets worse in the three weeks that the EU has given Italy to review its budget plan, “Tria is convinced that Italy will have to trim its deficit goals.”

And while deputy PM Salvini reiterated that Italy will not change its budget, and Italy will not leave the euro or the EU, now that the bogey is set, expect Italian yields to surge in the coming weeks as the market makes it clear just how easy it will be to remove a cabinet that continues to defy Europe.

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

SAUDI ARABIA
Trump states that the cover up with respect to the Khashoggi murder is the worst ever.  The uSA revokes the visas for those already charged
(courtesy zerohedge)

“Worst Coverup Ever”: Trump Blasts Saudis

Over Khashoggi Murder; US To Revoke Visas

President Trump on Tuesday called Saudi Arabia’s public relations efforts following the alleged murder and dismemberment of journalist Jamal Khashoggi the “worst cover-up ever.

Speaking with reporters at the White House, Trump said “The coverup was the worst in the history of cover-ups.” 

Evan McMurry

@evanmcmurry

Asked about Jamal Khashoggi’s killing, Pres. Trump says, “They had a very bad original concept, it was carried out poorly, and the cover-up was one of the worst in the history of cover-ups.” https://abcn.ws/2CZJyM3

Trump also expressed concern over a controversial speech by Turkish President Recep Tayyip Erdogan, who rejects the Saudi account that the killing was accidental – saying that the dissident journalist was instead murdered in an operation orchestrated at the highest levels.

Secretary of State Mike Pompeo, meanwhile, says that the US will revoke visas for the Saudi agents accused of killing Khashoggi.

John Hudson

@John_Hudson

At the State Department, Pompeo just said the U.S. is “historically” a generous nation when it comes to immigration, emphasizing the word historically.

View image on Twitter

John Hudson

@John_Hudson

BREAKING: Pompeo just announced the US is revoking visas for the Saudi agents accused of killing journalist Jamal Khashoggi at the Saudi Consulate in Istanbul.

This is the Trump admin’s first concrete step to punish Saudi Arabia for Khashoggi’s death

Of course, we have a feeling this is all lip service:

Via Martin Armstrong, Statista

END

Israel

Israel has no choice but to invade Gaza as rockets fired by Hamas has come very close to TelAviv

(courtesy zerohedge)

Israel’s Defense Chief Says “No Choice But War”

As Forces Build Along Gaza Border

We reported over the weekend that Israel has mustered its largest build-up of tanks and armored personnel carriers since 2014 at a deployment area along the border with Gaza and that “all-out war” looks inevitableafter weeks of heightened tensions with Hamas. This after special UN envoy for the Middle East, Nickolay Mladenov late last week warned the UN Security Council that “we remain on the brink of another potentially devastating conflict.”

It now appears Israel is ready to act, as on Monday Defense Minister Avigdor Lieberman told Israeli parliament that he’s been left with “no choice” but to launch military action against Hamas militants. Last week rockets were launched from the Gaza Strip, with one landing dangerously near the densely populated city of Tel Aviv, and unrest along the border fence has continued largely unabated for months.

Palestinians protesting along the Gaza border fence. Via Reuters.During his bellicose speech before lawmakers, Lieberman threatened invasion of Gaza: “Wars are only conducted when there is no choice, and now there is no choice,” the defense minister said. He indicated that anything less than the “toughest response” to Hamas is not being considered as Tel Aviv has “exhausted the other options.”

He said of protests which Israeli forces have somewhat routinely fired upon as Palestinians approach the fence and a security “no-go” zone: “There is no popular uprising,” and added, “There is violence organized by Hamas. Fifteen thousand people don’t come by foot to the border at their own will. They come by bus and are paid.”

Lieberman’s accusation that Hamas pays large sums to protesters comes as international human rights groups have frequently decried Israel’s lose of live ammo to stop protesters from approaching the fence, which have over the past six months resulted in dozens of Palestinian casualties.

The defense minister said further that Hamas “controls the levels of the flames,” but Israel can take deterrent and defensive measures, according to the Jerusalem Post. “I don’t believe in reaching an arrangement with Hamas,” he argued. “It hasn’t worked, doesn’t work and won’t work in the future.”

Israeli tanks staging at Gaza border, via ReutersLast week tensions escalated further after Israel retaliated against Hamas rocket attacks on Wednesday by unleashing limited airstrikes on Gaza, which reportedly killed at least one Palestinian while injuring several more. Israeli Prime Minister Benjamin Netanyahu convened his security cabinet on the same day of the Gaza rocket launches and promised to take “very strong action” if such attacks continued.

It does indeed look like broader military action is coming as a Reuters photographer had by the close of last week documented some 60 Israeli tanks and armored personnel carriers stationed along the Gaza-Israel border – with that number likely growing since – which Reuters noted is the largest reported mustering of forces since the 2014 war between Israel and Hamas.

6. GLOBAL ISSUES

 

end

7  OIL ISSUES

 

 

end

8. EMERGING MARKETS

BRAZIL

 

 

 

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 10:00 am

Euro/USA 1.1404 DOWN .0068 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES IN THE GREEN

 

 

 

 

 

USA/JAPAN YEN 112.54  UP 0.085  (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 1.2924 DOWN   0.0051  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.29903  DOWN .0092 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS WEDNESDAY morning in Europe, the Euro ROSE by 13 basis point, trading now ABOVE the important 1.08 level FALLING to 1.1474; / Last night Shanghai composite CLOSED UP 8.47 POINTS OR 0.33%

 

//Hang Sang CLOSED DOWN 96.77 POINTS OR 0.38% 

 

 

/AUSTRALIA CLOSED DOWN  0.31% / EUROPEAN BOURSES ALL GREEN 

 

 

 

The NIKKEI: this WEDNESDAY morning CLOSED UP 80.49 POINTS OR 0.37%

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED  GREEN 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 96.77 POINTS OR 0.38% 

 

 

/SHANGHAI CLOSED UP 8.47 POINTS OR 0.37%

 

 

 

Australia BOURSE CLOSED DOWN 0.31%

Nikkei (Japan) CLOSED UP 80.49 POINTS OR 0.37%

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1231.30

silver:$14.74

Early WEDNESDAY morning USA 10 year bond yield: 3.12% !!! DOWN 5 IN POINTS from TUESDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

The 30 yr bond yield 3.34 DOWN 3  IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)/

USA dollar index early WEDNESDAY morning: 96.29 UP 33  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS \4: 00 PM

 

Portuguese 10 year bond yield: 1.98% DOWN 3    in basis point(s) yield from TUESDAY/

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

SPANISH 10 YR BOND YIELD: 1.63% DOWN 3 IN basis point yield from TUESDAY/

ITALIAN 10 YR BOND YIELD: 3.60 UP 1   POINTS in basis point yield from TUESDAY/

 

 

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

GERMAN 10 YR BOND YIELD: RISES UP TO +.40%   IN BASIS POINTS ON THE DAY//

 

END

IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.1389 DOWN .0082 or 82 basis points

 

 

USA/Japan: 112.57 UP .152 OR 15 basis points/

Great Britain/USA 1.2895 DOWN .0085( POUND DOWN 85 BASIS POINTS)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was FELL BY 82 BASIS POINTS  to trade at 1.1389

The Yen ROSE to 112.57 for a LOSS of 13 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 85 basis points, trading at 1.2895/

The Canadian dollar GAINED 92 basis points to 1.29913

 

 

The USA/Yuan,CNY closed UP AT 6.9440-  ON SHORE  (YUAN down)

THE USA/YUAN OFFSHORE:  6.9546(  YUAN down)

TURKISH LIRA:  5.6705

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

 

 

 

Your closing 10 yr USA bond yield UP 1 IN basis points from TUESDAY at 3.13 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.34 UP 2 in basis points on the day /

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

Your closing USA dollar index, 96.41 UP 45 CENT(S) ON THE DAY/1.00 PM/

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

London: CLOSED UP 7.77 POINTS OR 0.11%

German Dax : CLOSED DOWN 82.65 POINTS  OR 0.73%
Paris Cac CLOSED DOWN 14.60 POINTS OR 0.29%
Spain IBEX CLOSED DOWN 48.70 POINTS OR 0.56%

Italian MIB: CLOSED DOWN:  317.01 POINTS OR 1.69%/

 

 

WTI Oil price; 67.06 1:00 pm;

Brent Oil: 76.86 1:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    65.44  THE CROSS LOWER BY .8 ROUBLES/DOLLAR (ROUBLE HIGHER by 8 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.6705 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD RISES +.41 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:66/31

 

BRENT:76.33

USA 10 YR BOND YIELD: 3.17%..

 

USA 30 YR BOND YIELD: 3.37%/..

 

EURO/USA DOLLAR CROSS: 1.1472 ( UP 8 BASIS POINTS)

USA/JAPANESE YEN:112.43 DOWN ,330 (YEN UP 33 BASIS POINTS/ .

 

USA DOLLAR INDEX: 95.95 DOWN 7 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.2986 UP 21 POINTS FROM YESTERDAY

the Turkish lira close: 5.7443

the Russian rouble:  65.50 DOWN 0.29 Roubles against the uSA dollar.( DOWN 29 BASIS POINTS)

 

Canadian dollar: 1.3078 UP 21 BASIS pts

USA/CHINESE YUAN (CNY) : 6.9380  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.9419 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.41%

 

The Dow closed  DOWN  125.98 POINTS OR 0.50%

NASDAQ closed DOWN 31.09  points or 0.42% 4.00 PM EST


VOLATILITY INDEX:  19.58  CLOSED DOWN  0.31

LIBOR 3 MONTH DURATION: 2.490%  .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

 

US Plunge

 

 

market trading

Mid morning:

US Equity Open Sparks Selling Scramble – Dow Dumps Below Crucial Technical Support

But, but, but… Boeing…

And futures are back down to overnight lows…

 

It was all so exciting ahead of the cash open…

But now it’s getting ugly again…

Driving The Dow back below its 200DMA

 

 

market data/

We continue to point out the crashing of the housing sector in the USA.  Today  it is new home sales as supply soars

(courtesy zerohedge)

New Home Sales Crash In September As Supply

Soars

New Home Sales (SAAR) in September plunged to their lowest since Dec 2016, crashing 5.5% MoM (and revised dramatically lower in August)… Maybe Trump has a point on Fed rate hikes?

Remember this is the first month that takes the impact of the latest big spike in rates – not good!

This is a disastrous print:

August’s 629k SAAR was revised drastically lower to 585k and September printed 553k (SAAR) massively missing expectations of 625k (SAAR) – plunging to the weakest since Dec 2016…

 

That is a 13.2% collapse YoY – the biggest drop since May 2011

 

The median sales price decreased 3.5% YoY to $320,000…

As the supply of homes at current sales rate rose to 7.1 months, the highest since March 2011, from 6.5 months.

The decline in purchases was led by a 40.6 percent plunge in the Northeast to the lowest level since April 2015 and 12 percent drop in the West.

USA economic/general stories
As we have been pointing out:  the USA economy has turned on a dime: this time it is October auto sales are down 12% so far.
(courtesy zerohedge)

October Auto Sales Tumble: “Our Car Sales Are Down 12 Percent”

The downward spiral in the US auto industry is accelerating, and there may be no improvement anytime soon.

According to a new report by CNBC, October is shaping up to be another terrible month for the industry, after an already abysmal September, as auto dealers around the country have been plagued by marked drops in retail sales and customer traffic in their showrooms.

Scott Adams, the owner of a Toyota dealership in Lee’s Summit, Missouri, told CNBC: “We are definitely seeing business pull back. September was off some,but this month our car sales are down 12 percent and our truck sales are down 23 percent.” The report notes that the drop in sales was most pronounced last weekend.

Another dealer in Tampa Bay, Florida said that sales this month were down 13%. Mark Scarpelli, president of Raymond Chevrolet and Kia in Antioch, Illinois stated that “Customer traffic has moderated. There is a little bit more of a pause because of the higher interest rates.” He said that although sales are keeping pace with the prior year, people are taking longer to buy.

Recall that in September, the average new car loan jumped $724 year-over-year to $30,958 in Q2 2018, while used vehicle loan amounts increased $520 to reach $19,708, both records.

Gary Barbera, a dealer from Philadelphia, PA, said his team needed to “dig a little deeper” to close sales this month. But he’s the exception: sales are up 6% this month.

Meanwhile, Edmunds is still holding on to its rosy outlook, predicting that 17 million vehicles (annualized) will be sold in October. These numbers may not be noticeably worse than last year because of improving fleet sales, the report states. As a reminder, we recently wrote that the uptick in interest rates was one factor having a profoundly negative impact on the automobile sales industry. The sudden end of dealer incentives is also crippling sales.

And it looks as though the negative trends are going to continue. For instance, Renault just posted a larger drop in third-quarter sales than analysts expected. Echoing what we discussed two weeks ago when we observed the record drop in Chinese auto sales, Renault blamed the poor numbers on a global slowdown in sales in places like China and Europe, as well as on new emissions standards.

Arndt Ellinghorst, a London-based analyst with Evercore ISI, told Bloomberg that Renault’s earnings “…are unlikely to result in any positive sentiment shift” and that they were “an inconclusive start to earnings season”.

end

Trump surely knows what is going on as he again attacks Powell on his raising interest rates.  He is probably ready to throw the Fed under the bus

(courtesy zerohedge)

Trump Escalates Attack On Powell: “Every Time We Do Something Great, He Raises Interest Rates”

Though the NYFRB’s Plunge Protection Team swooped in to rescue US markets later in the afternoon, the sea of red in markets was just one more unwelcome distraction on a day when Trump and his administration already had its hands full with the rolling diplomatic crisis in Saudi Arabia.

Trump

And never one to pull punches when he’s in a sour mood, Trump onceagainunleashed on the Federal Reserve and its chairman, Jerome Powell, during a 30-minute Oval Office interview with the Wall Street Journal, once again blaming the central bank for the market chaos that’s erupted over the past few weeks. Ignoring the pleas of his closest advisors and practically every financial professional in the US, the president stepped up his attacks on Powell, telling the chronicle of American capitalism that it’s “too early to tell” if he regrets nominating the Fed chairman.

That, of course, cuts against comments made by the president earlier this month when he insisted that he has no intention of firing Powell (though it’s unclear whether he would have the authority to remove a sitting Fed chair).

And for those who have until now brushed aside Trump’s angry attacks as an example of the president “just venting” over the recent pullback in markets, Trump told WSJ in no uncertain terms that he was “intentionally sending a direct message to Mr. Powell that he wanted lower interest rates.”

While the Fed is supposed to be independent “in theory”, Trump suggested that he wouldn’t keep quiet and let the central bank wreck the economy.

He said the Fed was supposed to be independent “in theory,” but

“To me the Fed is the biggest risk, because I think interest rates are being raised too quickly,”

Asked what would push him to try and remove Powell, Trump refused to answer with specifics.

Mr. Trump demurred when asked under what circumstances he’d remove Mr. Powell. “I don’t know,” he said.

“I’m just saying this: I’m very unhappy with the Fed because Obama had zero interest rates.

Mr. Trump said it was “too early to tell, but maybe” if he regrets nominating Mr. Powell.

Pressed about what he believes is the biggest threat to the US economy, Trump replied: “The Fed” adding that every time he tries to do something great, they spoil the party.

“Every time we do something great, he raises the interest rates,” Mr. Trump said, adding that Mr. Powell “almost looks like he’s happy raising interest rates.” The president declined to elaborate, and a spokeswoman for the Fed declined to comment.

Notably, Trump also referred to the economy as “my economy” and complained that he couldn’t be expected to compete with Obama, who benefited from near-zero rates during his entire tenure in office.

The president’s caustic comments about Mr. Powell came as Mr. Trump repeatedly described the economy in personal terms. He referred to economic gains during his time in office as “my numbers,” saying, “I have a hot economy going.”

He described his push for growth as a competition with former President Obama’s record, saying that increases under his Democratic predecessor were skewed because of low-interest rates.

[…]

Citing the rate increases, Mr. Trump said, “How the hell do you compete with that? And Obama — remember this, it’s very important — Obama had zero interest,” the president said.

Though some have dismissed them as angry venting, it’s clear that Trump’s comments have already had an impact on interest-rate expectations.

Chart

Since President Trump has begun talking against The Fed, the rates market has shifted towards a more dovish stance, as the chart below shows.

While we’re sure Trump’s comments will send members of the liberal intelligentsia (and certain employees of the Eurasia Group) into apoplectic fits as they screech about how Trump is degrading essential American institutions, none other than Paul Volcker, the legendary Fed chairman who famously tamed America’s runaway inflation during the early 1980s, recently recalled a 1984 meeting with former President Ronald Reagan when then-chief of staff James Baker flatly told Volcker:

“The president is ordering you not to raise interest rates before the election.”

“I was stunned,” Volcker said.

“I later surmised that the library location had been chosen because, unlike the Oval Office, it probably lacked a taping system.”

But amid the crush of comparisons to Turkey, a few twitter commentators came through with some more lighthearted takes…

Mike Zaccardi, CFA, CMT@MikeZaccardi

Powell is going to wake up with a horse’s head.

end

 

SWAMP STORIES

The following is the genesis of how the Russian collusion story was fabribated

(courtesy zerohedge)

“Treason”: FBI Failed To Mention Trump Aide’s Denial Of Russian Collusion To Undercover Spy

While applying for a FISA warrant on Trump Campaign aide Carter Page, the FBI failed to include the fact that George Papadopoulos – another adviser, vehemently denied that the Trump Campaign was involved in the hacking and release of Hillary Clinton’s emails, reports The Hills John Solomon.

While being pumped for information by FBI spy and Cambridge Professor Stefan Halper, Papadopoulos said that colluding with Russia would be “treason,” and that he had nothing to do with it.

“He was there to probe me on the behest of somebody else,” Papadopoulos told me in an interview this week, recalling the Halper meeting. “He said something along the lines of, ‘Oh, it’s great that Russia is helping you and your campaign, right George?’”

Papadopoulos said Halper also suggested the Trump campaign was involved in the hacking and release of Hillary Clinton’s emails that summer. “I think I told him something along the lines of, ‘I have no idea what the hell you are talking about. What you are talking about is treason. And I have nothing to do with that, so stop bothering me about it,’” Papadopoulos recalled. –The Hill

Papadopoulos will testify this week behind closed doors in front of two House panels.

According to Solomon’s sources who have seen the FISA warrant and its three renewals, the FBI failed to mention Papadopoulos’s denial, which Solomon describes as “an omission of exculpatory evidence that GOP critics in Congress are likely to cite as having misled the court.”

Another source, meanwhile, tells Solomon that the FBI has at least one transcript which calls the Trump campaign’s collusion with Russia into question – specifically citing information pertaining to Papadopoulos.

False pretenses

The FBI officially launched its counterintelligence operation against the Trump campaign on July 31, 2016, after Australian diplomat Alexander Downer said Papadopoulos revealed knowledge of Russia hacking Hillary Clinton’s emails. Papadopoulos has vehemently denied any knowledge of the conversation and suggested in a series of September tweets that he was set up.

George Papadopoulos@GeorgePapa19

So basically, for those paying attention, we have a Clinton friend, connected to the MI6, and private intelligence organizations in London, probing me about my ties to the energy business offshore Israel. Nothing about the US-Australia relationship.

George Papadopoulos@GeorgePapa19

Yet I supposedly told THAT individual about emails. Something I have no recollection ever discussing.

George Papadopoulos@GeorgePapa19

The notion that Downer randomly reached out to me just to have a gin and tonic is laughable. Some organization or entity sent him to meet me. For the sake of our republic and the integrity of this investigation, I think it’s time Downer is as exposed as Christoper Steele.

George Papadopoulos@GeorgePapa19

Would be a very very big problem if British intelligence was weopanized against an American citizen.

What’s more, Papadopoulos was fed the information about Clinton’s emails by (missing) Maltese professor and self-professed Clinton Foundation member, Joseph Mifsud.

In other words: Mifsud seed the information, Downer says Papadopoulos admitted it in a drunken state, and then undercover spy Stefan Halper pumped him for information about it – all in an attempt by the Obama administration and others to dig up (or fabricate) dirt on the Trump campaign.

Halper also tried conducted espionage on Carter Page – while former UK spy Christopher Steele assembled the Trump-Russia dossier, paid for in part by Hillary Clinton and the DNC – which the FBI later used to apply for the FISA warrant on Page (omitting Papadopoulos’s “treason” remarks).

The FISA warrant was drafted to target surveillance at Page but also cited Papadopoulos in a section that suggested Russia was coordinating election collusion through Page and “perhaps other individuals associated” with Trump’s campaign.

“The truth is, the Papadopoulos predicate went into reversal, but rather than shut down the probe at that point, the bureau turned to other leads like Steele and Page without giving the court a full picture,” one source said.

Some in Congress are bracing for the possibility that Deputy Attorney General Rod Rosenstein might argue in his interview with lawmakers that the FBI did not have an obligation to disclose all exculpatory evidence to the FISA judges. Such an argument is contrary to how the court works, according to officials who prepare FISA warrants. The FBI is required to submit only verified information and to alert the court to any omissions of material fact that cast doubt on the supporting evidence, including any denials, these officials told me. –The Hill

Papadopoulos’s communications with Halper was just one of over a half-dozen such interactions that Western intelligence figures established with Papadopoulos during the campaign.

Read more at The Hill

SWAMP STORIES COURTESY OF THE KING REPORT

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

Putin and Trump set to meet in Paris on November 11https://reut.rs/2O1oeqF
WSJ: A Mariel replay [of the 1980 boatlift from Cuba to our Florida shores] now seems to be coming from Honduras. Though the details are murky, we do know that former Honduran congressmanBartolo Fuentes of the left-wing Libre Party has admitted to organizing this caravan…
Long-time Democrat operative Doug Schoen: Democrats, we have a problem
Democrats have moved so far to the left that Republican attacks on them for being extremist and too far in the clutches of their tired, out-of-touch leadership have been working. And working well…
    If the Democrats are unable to win one house of Congress, at a time when they traditionally should pick up seats, it would underscore the emptiness and indeed potential bankruptcy of the Democratic Party…    https://www.foxnews.com/opinion/doug-schoen-democrats-we-have-a-problem
A convenient omission? Trump campaign adviser denied collusion to FBI source early on
George Papadopoulos says his spontaneous admission to London-based professor Stefan Halper occurred in mid-September 2016 — well before FBI agents and the Obama Justice Department sought a Foreign Intelligence Surveillance Court (FISA) warrant to collect Trump campaign communications in the final days before the election.  “He was there to probe me on the behest of somebody else,” Papadopoulos told me in an interview this week, recalling the Halper meeting. “He said something along the lines of, ‘Oh, it’s great that Russia is helping you and your campaign, right George?’”
      Once Mifsud conveyed the information to him, Papadopoulos began getting overtures from Western and U.S. intelligence… some Republicans are convinced that Papadopoulos was targeted by a Western intelligence operation designed to discredit or infiltrate the Trump campaign, and that the Obama CIA may have played a role
@JordanSchachtel: So… China probably killed the head of Interpol and nobody cares? Story totally vanished over the weekend. What does this say about Beijing’s influence over the American press? Why are no major editorial boards demanding answers?
An astute executive alerted us to this insightful story by The Times of London’s Melanie Phillips:
The Story behind the Story of Jamal Khashoggi – Why would MBS have Khashoggi killed in this complicated, macabre and politically exposed way? Why did it need 15 men to do so?…
   “He was a Saudi intelligence service asset for more than 20 years… Jamal worked very closely with the former directors of the Saudi Intelligence Agency Prince Turki al Faisal and Prince Bandar bin Sultan [Extremely close to the Bushes and Clintons]…
His fiancé, a Turkish diplomat, is the daughter of a former adviser to Turkey’s Islamist President Recep Tayyip Erdoğan…
     “Khashoggi was offered U.S. $9 million to return to Saudi Arabia, with a public guarantee that he would never be harmed. He refused.”… The intention was to extract him back to Riyadh, interrogate him and lock him up, probably for many years.  “If they’d wanted to kill him,” my informant said, “they could easily have paid $200,000 to the Chechen mafia in Istanbul…
     “The sedative gun malfunctioned and he suffocated from a massive overdose. He was 60 years old, he was overweight, his body couldn’t cope with it.”…
end

 

END-

I HOPE TO SEE YOU ON THURSDAY

Harvey

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