NOV 6/ELECTION DAY IN THE USA AND WE WILL KNOW THE RESULTS LATE THIS EVENING/GOLD DOWN $5.80 TO $1224.90/SILVER DOWN 14 CENTS TO $14.51/FITCH WARNS THE ITALIAN GOVERNMENT THAT IF MAY NOT SURVIVE/IRAN PLANNING FOR A LONG SIEGE/

 

I WILL UPDATE SPROTT DATA AND THE GLD/SLV DATA LATER TONIGHT.

 

 

GOLD: $1224.90 DOWN  $5.80 (COMEX TO COMEX CLOSINGS)

Silver:   $14.51 DOWN 14 CENTS (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  1226.50

 

silver: $14.53

 

 

 

 

 

 

 

 

 

 

 

For comex gold and silver:

NOV

 

 

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  NOV CONTRACT: 5 NOTICE(S) FOR 500

Total number of notices filed so far for NOV:  190  for 19000 OZ  (0.5909 TONNES)

 

 

 

 

 

FOR NOVEMBER

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

150 NOTICE(S) FILED TODAY FOR

750,000 OZ/

Total number of notices filed so far this month: 1085 for 5,425,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE  $6418: up  $44

 

Bitcoin: FINAL EVENING TRADE: $6460  down 24 

 

end

 

XXXX

 

China is controlling the gold market

WE WILL NOT PROVIDE LONDON FIXES AS THEY ARE NOT ACCURATE AS TO WHAT IS GOING ON AT THE SAME TIME FRAME.

Let us have a look at the data for today

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In silver, the total OPEN INTEREST  ROSE BY  1927 CONTRACTS FROM 211,291 UP TO  213,218  DESPITE YESTERDAY’S 9 CENT LOSS IN SILVER PRICING AT THE COMEX. TODAY WE  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 FAIR SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

EFP’S FOR NOV.  903 EFP’S FOR DECEMBER AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 903 CONTRACTS. WITH THE TRANSFER OF 903 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 2903 EFP CONTRACTS TRANSLATES INTO 4.515 MILLION OZ  ACCOMPANYING:

1.THE 9 CENT LOSS 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.  2,520,000 OZ STANDING IN OCTOBER. AND NOW SO FAR A HUGE 6,865,000 OZ STANDING FOR NOVEMBER

 

 

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

9589 CONTRACTS (FOR 4 TRADING DAYS TOTAL 9589 CONTRACTS) OR 47.945 MILLION OZ: (AVERAGE PER DAY: 2397 CONTRACTS OR 11.986 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF NOV:  47.945MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 6.84% 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:           2,477.67    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

ACCUMULATION FOR OCTOBER 2018:                                     224.875        MILLION OZ

RESULT: WE HAD A GOOD SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 1927 DESPITE THE 9 CENT LOSS IN SILVER PRICING AT THE COMEX //YESTERDAY. THE CME NOTIFIED US THAT WE HAD A GOOD SIZED EFP ISSUANCE OF 903 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: 2830 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 903 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 1927  OI COMEX CONTRACTS. AND ALL OF THUS GOOD  DEMAND HAPPENED WITH A 9 CENT FALL IN PRICE OF SILVER  AND A CLOSING PRICE OF $14.65 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  IN SEPTEMBER A FINAL MONSTROUS 39.505 MILLION OZ OF SILVER STANDING FOR DELIVERY, WITH HUGE DELIVERIES OF OVER 2 MILLION OZ IN OCTOBER (A NON DELIVERY MONTH) AND NOW WELL OVER 6.8 MILLION OZ IN NOVEMBER….... 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 OVER 1 BILLION oz i.e. 1.059 BILLION OZ TO BE EXACT or 151% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT AUGUST MONTH/ THEY FILED AT THE COMEX: 150 NOTICE(S) FOR 750,000 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./ OCTOBER: 2,520,000 oz AND NOW NOV AT OVER 6 MILLION 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 TINY  SIZE OF 476 CONTRACTS UP TO 490,694 DESPITE THE LOSS IN THE COMEX GOLD PRICE/YESTERDAY’S TRADING (A DROP IN PRICE OF $1.05).THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A FAIR SIZED 1322 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 1322 CONTACTS  AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 490,694. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE AN FAIR SIZED RISE IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 1798 CONTRACTS:  476 OI CONTRACTS INCREASED AT THE COMEX AND 1322 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN: 1798 CONTRACTS OR 179,800 OZ = 5.59 TONNES. AND ALL OF THIS GOOD DEMAND OCCURRED WITH A FALL IN THE PRICE OF GOLD/ YESTERDAY TO THE TUNE OF $1.05.

 

 

 

 

YESTERDAY, WE HAD 4638 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF NOV : 27,641 CONTRACTS OR 2,764,100 OZ OR 85,97 TONNES (4 TRADING DAYS AND THUS AVERAGING: 6910 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 4 TRADING DAY IN  TONNES: 85.97 TONNES

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

THUS EFP TRANSFERS REPRESENTS 85.97/2550 x 100% TONNES =  3.37% OF GLOBAL ANNUAL PRODUCTION SO FAR IN JULY ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:     6,295.94*  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)

ACCUMULATION OF GOLD EFP FOR OCT. 2018                        543.92 TONNES  (23 TRADING DAYS)

 

WHAT IS ALARMING TO ME, ACCORDING TO OUR LONDON EXPERT ANDREW MAGUIRE IS THAT THESE EFP’S ARE BEING TRANSFERRED TO WHAT ARE CALLED SERIAL FORWARD CONTRACT OBLIGATIONS AND THESE CONTRACTS ARE LESS THAN 14 DAYS.  ANYTHING GREATER THAN 14 DAYS, THESE MUST BE RECORDED AND SENT TO THE COMPTROLLER, GREAT BRITAIN TO MONITOR RISK TO THE BANKING SYSTEM.  IF THIS IS INDEED TRUE, THEN THIS IS A MASSIVE CONSPIRACY TO DEFRAUD AS WE NOW WITNESS A MONSTROUS TOTAL EFP’S ISSUANCE AS IT HEADS INTO THE STRATOSPHERE

Result: A TINY SIZED INCREASE IN OI AT THE COMEX OF 476 DESPITE THE LOSS IN PRICING ($5.05) THAT GOLD UNDERTOOK FRIDAY) //.WE ALSO HAD A GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 1322 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 1322 EFP CONTRACTS ISSUED, WE HAD A FAIR RISE OF 1798 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

1322 CONTRACTS MOVE TO LONDON AND 476 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 5.59 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH A LOSS OF $1.05 IN YESTERDAY’S TRADING AT THE COMEX.

 

 

we had: 5 notice(s) filed upon for 500 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 DOWN $5.80 TODAY: / 

 

 

A SMALL CHANGES IN GOLD INVENTORY AT THE GLD

 

A WITHDRAWAL OF .59 TONNESS

 

 

 

 

 

 

 

 

 

 

/GLD INVENTORY   756.70 TONNES

Inventory rests tonight: 756.70 tonnes.

TO ALL INVESTORS THINKING OF BUYING GOLD THROUGH THE GLD ROUTE: YOU ARE MAKING A TERRIBLE MISTAKE AS THE CROOKS ARE USING WHATEVER GOLD COMES IN TO ATTACK BY SELLING THAT GOLD.  IT SURE SEEMS TO ME THAT THE GOLD OBLIGATIONS AT THE GLD EXCEED THEIR INVENTORY

SLV/

WITH SILVER DOWN 14  CENTS TODAY

 

NO CHANGES  AT THE SLV:

 

 

 

 

 

 

 

 

/INVENTORY RESTS AT 326.005 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 1656 CONTRACTS from 211,291 UP TO 212,947  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) 0 EFP’s for November… and

 

903 CONTRACTS FOR DECEMBER AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 903 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 1927 CONTRACTS TO THE 903 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A STRONG  NET GAIN OF 2830 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE  GAIN ON THE TWO EXCHANGES: 12.795 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… OVER 2 million  OZ STANDING FOR THE NON ACTIVE MONTH OF OCTOBER., AND NOW 

 6.8 MILLION OZ STANDING IN NOVEMBER.

 

 

RESULT: A GOOD INCREASE IN SILVER OI AT THE COMEX DESPITE THE 9 CENT PRICING LOSS THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD ANOTHER STRONG SIZED 903 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

 

 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)TUESDAY MORNING/ MONDAY NIGHT: 

SHANGHAI CLOSED DOWN 6.08 POINTS OR 0.23% //Hang Sang CLOSED UP 186.57 POINTS OR 0.72% //The Nikkei closed UP 248.76 OR 1.44%/ Australia’s all ordinaires CLOSED UP 0.91%  /Chinese yuan (ONSHORE) closed UP  at 6.9146 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil DOWN to 62.73 dollars per barrel for WTI and 72.54 for Brent. Stocks in Europe OPENED RED//.  ONSHORE YUAN CLOSED WELL DOWN AT 6.9146 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED WELL UP ON THE DOLLAR AT 6.9146: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON   : /ONSHORE YUAN TRADING SLIGHTLY WEAKER  AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

 

 

 

 

 

 

 

3A/NORTH KOREA/SOUTH KOREA

i)North Korea/South Korea/USA/

 

 

 

b) REPORT ON JAPAN

3 C/  CHINA

 

 

4/EUROPEAN AFFAIRS

i)ITALY

The following is a very important commentary from our European experts GEFIRA.  Here they state that the Italian people must understand that their country is at war

witn Brussels.  The EU wants a surplus budget which is impossible with a declining population. The authors outline what will be Italy’s next step

( GEFIRA)

ii)Salvini cuts Migrant allowance from 35 euros to 19 euros per day which will save them 400 million euros.  Italy has a declining population and they are in need of workers to take the place of Italians who do not want children.  Salvini wants to entice Italians to have more children

( zerohedge)

iii)Fitch warns the Italian government that it may not survive as the coalition member views are quite diverse( zerohedge)

iv)We must pay attention to what Chris Whalen states and today he details the problems with respect to Deutsche bank
( Chris Whalen)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)IRAN

Iran shuts off oil tanker tracking system so the uSA will not know where they oil is going

( zerohedge)

ii)Iran is preparing for along siege

( Magnier)
iii)Turkey is again making noise in the Med. Sea as they are vowing to make the “sea bandits” drilling for gas off Cyprus pay like the terrorists did in Syria
( zerohedge)

6. GLOBAL ISSUES

 

 

 

7. OIL ISSUES

 

8 EMERGING MARKET ISSUES

 

 

9. PHYSICAL MARKETS

i)Maduro is a complete moron.  After Chavez repatriates all of Venezuela’s gold, Maduro basically lost everything.  He has no chance of getting this gold back from London
(courtesy Reuters)

ii)Perennial loser Barrick now in talks trying to merge their Nevada operations together( Reuters)

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

 

 

MARKET TRADING

 

 

ii)Market data
David Stockman sees the S and P fair value way below 2000 and thus sees a 40% correction
( David Stockman)

 

iii)USA ECONOMIC/GENERAL STORIES

a)Two problems here:
1. Millennials just do not want to get married
2 Competition from Amazon
killed off Davids..the uSA’s largest bridal chain as they prepare for bankruptcy after skipping a debt payment
( zerohedge)

b)Housing is such an important component in GDP calculations for the USA.  Mish Shedlock gives a detailed look at the housing market where housing is now the least affordable in a decade

( Mishtalk/Mish Shedlock)

iv)SWAMP STORIES

 

E)SWAMP STORIES/THE KING REPORT

Let us head over to the comex:

 

The total gold comex open interest FELL BY A FAIRSIZED 1560CONTRACTS DOWN to an OI level 488,658WITH THE FALL IN THE PRICE OF GOLD ($1.05 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 NON ACTIVE DELIVERY MONTH OF NOV..  THE CME REPORTS THAT THE BANKERS ISSUED A FAIR SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 1322 EFP CONTRACTS WERE ISSUED:

NOV: 0 EFP’S AND DECEMBER:  1322 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  1322 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 1798 TOTAL CONTRACTS IN THAT 1322 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A TINY 238COMEX CONTRACTS.

NET LOSS ON THE TWO EXCHANGES: 238contracts OR 23,800 OZ OR 0.74 TONNES.

 

We are now in the non active contract month of November. For the November contract month, we have 13 notices standing so we lost 11 contracts. WOW!!! we had 17 notices served upon yesterday so for the 4TH straight trading day, we gained 6 contracts or an additional 600 oz of gold queue jumped.  Gold has now joined silver in the queue jumping game as physical gold and silver are scarce at the comex.  The dealers need this physical to put out fires elsewhere. Also longs have refused to morph into London forwards and this they refuse to accept a fiat bonus to do that transfer.

 

 

 

 

 

 

The next delivery month after November is the very big December contract month and here the OI FELL by 5250 contracts  to 345.777 contracts.  January saw a  RISE TO 1204 FOR A GAIN OF 526 CONTRACTS.  February gained 2527 contracts to stand at 89,880 contracts.

 

 

 

 

WE HAD 5 NOTICES FILED AT THE COMEX FOR 500 OZ.

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.

Total silver OI ROSE BY 1656 CONTRACTS FROM 211291 UP TO 212,947 (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 TINY  OI COMEX LOSS  OCCURRED WITH A 9 CENT LOSS IN PRICING.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF NOVEMBER AND, WE WERE  INFORMED THAT WE HAD A FAIR SIZED 903 EFP CONTRACTS:  FOR NOVEMBER:  0 CONTRACTS AND FOR …

 

FOR DECEMBER: 903 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: 903.  ON A NET BASIS WE GAINED 1656 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A  2559CONTRACT GAINAT THE COMEX COMBINING WITH THE ADDITION OF 903 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:   1658 CONTRACTS...AND ALL OF THIS GOOD DEMAND OCCURRED WITH A 9 CENT LOSS IN PRICING// YESTERDAY

 

 

 

 

We are now in the non active delivery month of NOVEMBER and here we now have 425 notices  standing for a gain of 26 contacts.  We had 3 notices served upon yesterday so we gained a good 29 contracts or an additional 145,000 oz will  stand for delivery as these longs refused to  morph into London based forwards as well as not accepting a fiat bonus for their efforts. QUEUE JUMPING DID RETURN TO THE COMEX ARENA AS THIS PHENOMENON  (IN SILVER) HAS BEEN THE NAME OF THE GAME FOR OVER 19 MONTHS.

 

 

 

After November, we have a December contract and here we lost 2077 contracts down to 150,679.  January saw a LOSS of 44 contracts DOWN to 978 contracts.   March, the next big delivery month after December saw a gain of 3191 contracts  up to 49,401.

 

 

 

 

 

 

 

 

We had 150 notice(s) filed for 750,000 OZ for the NOV, 2018 COMEX contract for silver

 

Trading Volumes on the COMEX

 

PRELIMINARY COMEX VOLUME FOR TODAY: 197,746 contracts,

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  175,495  contracts..

 

 

 

 

 

 

 

 

 

 

 

INITIAL standings for  NOV/GOLD

NOV 6-/2018.

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

 

Deposits to the Customer Inventory, in oz  

 

 

nil

 

oz

 

 

 

 

 

 

 

 

No of oz served (contracts) today
5 notice(s)
 500 OZ
No of oz to be served (notices)
8 contracts
(800 oz)
Total monthly oz gold served (contracts) so far this month
190 notices
19000 OZ
0.5909 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:  nil oz
we had 0 customer deposit
total customer deposits nil oz
we had 0  adjustment..
i

FOR THE NOV 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 5 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the NOV/2018. contract month, we take the total number of notices filed so far for the month (190) x 100 oz , to which we add the difference between the open interest for the front month of NOV. (13 contracts) minus the number of notices served upon today (5 x 100 oz per contract) equals 19,800 OZ OR 0.6158 TONNES) the number of ounces standing in this non active month of NOV

 

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

No of notices served (190 x 100 oz)  + {13)OI for the front month minus the number of notices served upon today (5x 100 oz )which equals 19800 oz standing OR 0.6158 TONNES in this NON active delivery month of NOVEMBER.

WE GAINED 6 CONTRACTS OR AN ADDITIONAL 600 OZ WILL STAND AT THE COMEX AS THESE LONGS REFUSED TO MORPH INTO LONDON BASED FORWARDS. WE ARE NOW WITNESSING GOLD JOIN SILVER IN QUEUE JUMPING AS PHYSICAL SEEMS TO BE SCARCE.

 

 

 

 

 

THERE ARE ONLY 4.2969 TONNES OF REGISTERED COMEX GOLD AVAILABLE FOR DELIVERY AGAINST 0.6158 TONNES STANDING FOR NOVEMBER  

 

 

 

total registered or dealer gold:  138,146.468 oz or   4.2969 tonnes
total registered and eligible (customer) gold;   8,013,936.429 oz 259.26 tonnes
 I BELIEVE THAT THIS IS THE LOWEST REGISTERED GOLD READING IN THE COMEX HISTORY..AS WELL AS THE LONGEST WE HAVE SEEN THE REGISTERED COLUMN AT 5 TONNES OR LESS.

IN THE LAST 27 MONTHS 107 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 NOV DELIVERY MONTH

NOV INITIAL standings/SILVER

NOV 6 2018
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 1,691,576.647 oz
CNT
Scotia

 

 

Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
1,199,216.746
oz
CNT
JPM
No of oz served today (contracts)
150
CONTRACT(S)
750,000 OZ)
No of oz to be served (notices)
275 contracts
(1375,000 oz)
Total monthly oz silver served (contracts) 1085 contracts

(5,425,000 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

lots of activity in the silver vaults today.

 

we had 0 inventory movement at the dealer side of things

 

 

 

total dealer deposits: nil oz

total dealer withdrawals: 0 oz

we had 2 deposits into the customer account

i) Into JPMorgan: 598,961.370 oz

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

JPMorgan now has 150.9 million oz of  total silver inventory or 51.94% of all official comex silver. (150.9 million/290.5 million)

ii)Into  CNT:  600,255,376. oz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today:  1,199,216.746  oz

we had 2 withdrawals from the customer account;

 

i) Out of CNT:  1,089,719.687  oz

 

ii) Out of Scotia:  600,862.760 oz

 

 

 

 

 

total withdrawals: 1,691,576.647  oz

 

we had 1- adjustments

 

i) Out of CNT:  617,163.750 oz was adjusted out of the customer and this landed into the dealer account of CNT

 

 

 

 

 

 

 

total dealer silver:  85.369 million

total dealer + customer silver:  290.413  million oz

The total number of notices filed today for the NOV 2018. contract month is represented by 150 contract(s) FOR 750,000 oz. To calculate the number of silver ounces that will stand for delivery in NOV., we take the total number of notices filed for the month so far at 1085 x 5,000 oz = 5,425,000 oz to which we add the difference between the open interest for the front month of NOV. (425) and the number of notices served upon today (150 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the NOV/2018 contract month: 1085(notices served so far)x 5000 oz + OI for front month of NOV( 425) -number of notices served upon today (150)x 5000 oz equals 6,800,000 oz of silver standing for the NOV contract month.  This is a gigantic number of oz standing for an off delivery month. Somebody is after a large supply of physical silver. We GAINED 29 contracts or an additional 145,000 will  stand at the comex as these longs accepted a London based forwards as well as receiving the right for a fiat bonus. QUEUE JUMPING IN SILVER TOOK A SHORT HIATUS AND WILL NO DOUBT RETURN IN EARNEST THIS COMING WEEK.

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 72,862 CONTRACTS  … 

 

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 75,147 CONTRACTS….

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 75147 CONTRACTS EQUATES to 375 million OZ  OR 53.5% 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 -5.37% (NOV 6/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -2.00% to NAV (NOV 6/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -5.37%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 12.46/TRADING 11.86/DISCOUNT 4.83

END

And now the Gold inventory at the GLD/

NOV 6/WITH GOLD DOWN  $5.80 : A SMALL WITHDRAWAL OF .58 TONNES OF GOLD FROM THE GLD.INVENTORY RESTS AT 756.70 TONNES

NOV 5/WITH GOLD DOWN $1.05 TODAY: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.77 TONNES OF GOLD FROM THE GLD INVENTORY/INVENTORY RESTS AT 757.29 TONNES

NOV 2/WITH GOLD DOWN $5.05: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.76 TONNES FROM THE GLD INVENTORY//INVENTORY RESTS AT 759.06 TONNES

NOV 1/: 2 TRANSACTIONS:WITH GOLD UP $23.85,A SMALL WITHDRAWAL OF .80 TONNES OF GOLD TO PAY FOR FEES, INSURANCE AND STORAGE: INVENTORY AT THE GLD RESTS AT 754.06 TONNES THEN A DEPOSIT OF 6.76 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 760.82

OCT 31: WITH GOLD DOWN $11.35: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RE3STS AT 754.94 TONNES

OCT 30/WITH GOLD DOWN $2.00: A HUGE DEPOSIT OF 5.30 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 754.94 TONNES

OCTOBER 29/WITH GOLD DOWN $7.75 TODAY/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 749.64 TONNES

OCTOBER 26/WITH GOLD UP $3.65 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 749.64 TONNES

OCT 25/WITH GOLD UP $1.15: A DEPOSIT OF 1.76 TONNES OF GOLD INTO THE GLD INVENTORY/INVENTORY RESTS AT 749.64 TONNES. FROM ITS LOW POINT AT THE BEGINNING OF OCTOBER THE GLD HAS ADDED.19.47 TONNES OF GOLD

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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

NOV 6.2018/ Inventory rests tonight at 756/70tonnes

*IN LAST 491 TRADING DAYS: 178.45 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 391 TRADING DAYS: A NET 18.15 TONNES HAVE NOW BEEN REMOVED FROM GLD INVENTORY.

 

end

 

Now the SLV Inventory/

NOV 6/WITH SILVER DOWN 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 326.005 MILLION OZ.

NOV 5/WITH SILVER DOWN 9 CENTS TODAY: ANOTHER BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.315 MILLION OZ FROM THE SLV INVENTORY/INVENTORY RESTS AT 326.005 MILLION OZ/

NOV 2/WITH SILVER DOWN 6 CENTS TODAY: A SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 143,000 OZ/INVENTORY RESTS AT 327.320 MILLION OZ/

NOV 1/WITH SILVER UP 54 CENTS TODAY: A BIG CHANGE IN SLV” A WITHDRAWAL OF 1.033 MILLION OZ FROM THE SLV. /INVENTORY RESTS AT 327.463 MILLION OZ.

OCT 31/WITH SILVER DOWN  18 CENTS: NO CHANGES IN SLV INVENTORY/INVENTORY RESTS AT 328.496 MILLION OZ/

OCT 30/WITH SILVER UP 4 CENTS TODAY: NO CHANGES IN SLV INVENTORY/INVENTORY RESTS AT 328.496 MILLION OZ

OCTOBER 29/WITH SILVER DOWN 27 CENTS NO  A HUGE CHANGE IN SILVER INVENTORY AT THE SLV” A WITHDRAWAL OF 1.879 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 328.496 MILLION OZ.

OCTOBER 26/WITH SILVER UP 7 CENTS NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 330.375 MILLION OZ

OCT 25/WITH SILVER DOWN 7 CENTS: ANOTHER HUGE WITHDRAWAL OF 1.315 MILLION OZ FROM THE SLV INVENTORY/INVENTORY RESTS AT 330.375 MILLION OZ/

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.

 

 

NOV 6/2018:

 

Inventory 326.005 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

HUGE JUMP IN LIBOR RATES TODAY./

 

 

THE RISE IN LIBOR IS CREATING A SCARCITY OF DOLLARS BECAUSE FOREIGN EXCHANGE SWAPS (COSTS) ARE SIMPLY PROHIBITIVE

YOUR DATA…..

6 Month MM GOFO 2.39/ and libor 6 month duration 2.84

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

G0LD LENDING RATE: + .55

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.66%

LIBOR FOR 12 MONTH DURATION: 3.12

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.46

end

 

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG

Venezuela Seeks To Repatriate $550 Million Of Gold From London

Venezuela Seeks Return Of Gold Worth $550 Million From Bank of England

CARACAS (Reuters) – Venezuela is seeking to repatriate about $550 million in gold bars from the Bank of England because of fears it could be caught up in international sanctions on the country, two sources with direct knowledge of the effort told Reuters.

Source: ZeroHedge

Venezuela’s hard currency holdings have dwindled as existing U.S. financial sanctions have effectively blocked President Nicolas Maduro’s government from borrowing on international markets.

The Trump administration on Thursday issued a new round of sanctions banning U.S. citizens from having dealings with anyone involved in “corrupt or deceptive” gold sales from Venezuela, as part of efforts to boost pressure on Maduro.

Maduro’s government is seeking to bring 14 tonnes of gold held in the Bank of England back to Venezuela, according to two public officials with direct knowledge of the operation, who asked not to be identified.

The Bank of England has sought to clarify what Venezuela wants to do with the gold, one of the officials said.

Venezuela’s central bank did not respond to a request for comment. The Bank of England declined to comment.

The plan has been held up for nearly two months due to difficulty in obtaining insurance for the shipment, needed to move a large gold cargo, one of the officials said.

“They are still trying to find insurance coverage, because the costs are high,” the official said.

Venezuela is in its fifth year of recession with annual inflation at more than 400,000 percent, leading to increased incidence of hunger and disease and spurring an exodus of some 2 million citizens.

Maduro says his government is victim of an “economic war” led by the opposition and fueled by Washington’s sanctions. His critics blame the country’s state-led economic model, stringent exchange controls and nationalizations of private companies.

Losing the gold would be a significant blow to the country’s finances. Lack of hard currency can create shortages of basic goods ranging from staple foods to drugs and automobile parts.

The amount is equivalent to five times the total hard currency that Venezuela has sold in 2018 via hard currency auctions that are carried out under the country’s 15-year-old exchange control system, according figures compiled by local consultancy Sintesis Financiera.

The government has promised to auction 2 billion euros in foreign exchange over an unspecified time frame, without saying where it plans to obtain those funds.

But even if Venezuela manages to repatriate the gold, the new U.S. sanctions could make selling it to raise hard currency difficult.

“If the government wants to carry out operations with the gold that it plans to bring, it would have to be done with allied countries because of the sanctions,” said Tamara Herrera, an economist with Sintesis Financiera.

Venezuela has been exporting gold to Turkey in the last year, a business that has grown as Maduro has built up ties with Turkish President Tayyip Erdogan.

Selling the gold directly from the Bank of England to a foreign buyer would be logistically easier than shipping it, but could also risk running foul of sanctions.

Venezuela for decades stored gold that makes up its central bank reserves in foreign bank vaults, which is common among developing countries.

The country’s late socialist leader Hugo Chavez, citing the need for Venezuela to have physical control of central bank assets, in 2011 repatriated around 160 tonnes of gold from banks in the United States and Europe to the central bank in Caracas.

But some of Venezuela’s gold remained in the Bank of England. Starting in 2014, Venezuela used this gold for “swap” operations in which global banks lent Venezuela several billion dollars with the gold as collateral.

Venezuelan central bank statistics show the central bank’s gold holdings by June this year had dropped to 160 tonnes from 364 tonnes in 2014, as some of the swap agreements expired without Venezuela returning the funds – leaving the gold in the hands of the banks (Goldman Sachs being one of the banks).

In 2017, such swap agreements became difficult due to U.S. sanctions, which blocked U.S. financial institutions from bankrolling any new financing operations.

Full article via Reuters here

 

News and Commentary

 

Exclusive: Venezuela seeks to repatriate $550 million of gold from Britain (Reuters.com)

Gold prices steady, eyes on U.S. midterm elections (Reuters.com )

Gold prices post a modest decline as dollar weakens ahead of midterm vote (MarketWatch.com)

Energy stocks lift S&P, Dow; Apple drags (Reuters.com)

Mining bitcoin uses more energy than mining gold (PRI.org)


Source: ZeroHedge

Maduro Scrambles To Repatriate Venezuela’s Gold After Trump Crackdown (ZeroHedge.com)

Rate Reversal Ahead, Bullish For Gold (Youtube.com)

Economic Brake Lights – Mauldin (GoldSeek.com)

SWOT Analysis: Election Spotting – Holmes (GoldSeek.com)

Is The Long Anticipated Crash Among Us – Moran (Youtube.com)

 

Gold Prices (LBMA AM)

05 Nov: USD 1,231.60, GBP 946.61 & EUR 1,081.96 per ounce
02 Nov: USD 1,235.50, GBP 948.00 & EUR 1,079.83 per ounce
01 Nov: USD 1,223.25, GBP 950.47 & EUR 1,075.85 per ounce
31 Oct: USD 1,217.70, GBP 955.77 & EUR 1,074.25 per ounce
30 Oct: USD 1,220.00, GBP 956.36 & EUR 1,074.33 per ounce
29 Oct: USD 1,230.75, GBP 958.88 & EUR 1,078.38 per ounce

Silver Prices (LBMA)

05 Nov: USD 14.74, GBP 11.33 & EUR 12.96 per ounce
02 Nov: USD 14.82, GBP 11.38 & EUR 12.95 per ounce
01 Nov: USD 14.45, GBP 11.19 & EUR 12.68 per ounce
31 Oct: USD 14.34, GBP 11.23 & EUR 12.64 per ounce
30 Oct: USD 14.43, GBP 11.32 & EUR 12.71 per ounce
29 Oct: USD 14.65, GBP 11.42 & EUR 12.86 per ounce


Recent Market Updates

– Big Short’s Eisman Is Shorting Two U.K. Banks on Brexit
– “Red October” Highlights Importance of Rebalancing Portfolios and Gold’s “Very Positive” Outlook
– Alarm Bells Ring and Gold Rises In October As Stocks and Property Fall Globally
– Gold Analysts At LBMA See 25% Return To $1,532/oz In 12 months
– Gold Improves Investment, Pension and Central Bank Portfolio’s Risk-Adjusted Returns
– Gold Gains Nearly 1% On Week As Global Stock Markets Fall Sharply
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– Palladium Surges To All Time Record High On Russian Supply Concerns
– Happy Birthday GoldCore
– “IMF Warning Highlights Gold’s Importance As A Diversification and Happy Birthday GoldCore”

DAG Video Still Play V2

Mark O’Byrne
Executive Director

 

Venezuela Seeks Return Of Gold Worth $550 Million From Bank of England

CARACAS (Reuters) – Venezuela is seeking to repatriate about $550 million in gold bars from the Bank of England because of fears it could be caught up in international sanctions on the country, two sources with direct knowledge of the effort told Reuters.

Source: ZeroHedge

Venezuela’s hard currency holdings have dwindled as existing U.S. financial sanctions have effectively blocked President Nicolas Maduro’s government from borrowing on international markets.

The Trump administration on Thursday issued a new round of sanctions banning U.S. citizens from having dealings with anyone involved in “corrupt or deceptive” gold sales from Venezuela, as part of efforts to boost pressure on Maduro.

Maduro’s government is seeking to bring 14 tonnes of gold held in the Bank of England back to Venezuela, according to two public officials with direct knowledge of the operation, who asked not to be identified.

The Bank of England has sought to clarify what Venezuela wants to do with the gold, one of the officials said.

Venezuela’s central bank did not respond to a request for comment. The Bank of England declined to comment.

The plan has been held up for nearly two months due to difficulty in obtaining insurance for the shipment, needed to move a large gold cargo, one of the officials said.

“They are still trying to find insurance coverage, because the costs are high,” the official said.

Venezuela is in its fifth year of recession with annual inflation at more than 400,000 percent, leading to increased incidence of hunger and disease and spurring an exodus of some 2 million citizens.

Maduro says his government is victim of an “economic war” led by the opposition and fueled by Washington’s sanctions. His critics blame the country’s state-led economic model, stringent exchange controls and nationalizations of private companies.

Losing the gold would be a significant blow to the country’s finances. Lack of hard currency can create shortages of basic goods ranging from staple foods to drugs and automobile parts.

The amount is equivalent to five times the total hard currency that Venezuela has sold in 2018 via hard currency auctions that are carried out under the country’s 15-year-old exchange control system, according figures compiled by local consultancy Sintesis Financiera.

The government has promised to auction 2 billion euros in foreign exchange over an unspecified time frame, without saying where it plans to obtain those funds.

But even if Venezuela manages to repatriate the gold, the new U.S. sanctions could make selling it to raise hard currency difficult.

“If the government wants to carry out operations with the gold that it plans to bring, it would have to be done with allied countries because of the sanctions,” said Tamara Herrera, an economist with Sintesis Financiera.

Venezuela has been exporting gold to Turkey in the last year, a business that has grown as Maduro has built up ties with Turkish President Tayyip Erdogan.

Selling the gold directly from the Bank of England to a foreign buyer would be logistically easier than shipping it, but could also risk running foul of sanctions.

Venezuela for decades stored gold that makes up its central bank reserves in foreign bank vaults, which is common among developing countries.

The country’s late socialist leader Hugo Chavez, citing the need for Venezuela to have physical control of central bank assets, in 2011 repatriated around 160 tonnes of gold from banks in the United States and Europe to the central bank in Caracas.

But some of Venezuela’s gold remained in the Bank of England. Starting in 2014, Venezuela used this gold for “swap” operations in which global banks lent Venezuela several billion dollars with the gold as collateral.

Venezuelan central bank statistics show the central bank’s gold holdings by June this year had dropped to 160 tonnes from 364 tonnes in 2014, as some of the swap agreements expired without Venezuela returning the funds – leaving the gold in the hands of the banks (Goldman Sachs being one of the banks).

In 2017, such swap agreements became difficult due to U.S. sanctions, which blocked U.S. financial institutions from bankrolling any new financing operations.

Full article via Reuters here

 

News and Commentary

 

Exclusive: Venezuela seeks to repatriate $550 million of gold from Britain (Reuters.com)

Gold prices steady, eyes on U.S. midterm elections (Reuters.com )

Gold prices post a modest decline as dollar weakens ahead of midterm vote (MarketWatch.com)

Energy stocks lift S&P, Dow; Apple drags (Reuters.com)

Mining bitcoin uses more energy than mining gold (PRI.org)


Source: ZeroHedge

Maduro Scrambles To Repatriate Venezuela’s Gold After Trump Crackdown (ZeroHedge.com)

Rate Reversal Ahead, Bullish For Gold (Youtube.com)

Economic Brake Lights – Mauldin (GoldSeek.com)

SWOT Analysis: Election Spotting – Holmes (GoldSeek.com)

Is The Long Anticipated Crash Among Us – Moran (Youtube.com)

 

Gold Prices (LBMA AM)

05 Nov: USD 1,231.60, GBP 946.61 & EUR 1,081.96 per ounce
02 Nov: USD 1,235.50, GBP 948.00 & EUR 1,079.83 per ounce
01 Nov: USD 1,223.25, GBP 950.47 & EUR 1,075.85 per ounce
31 Oct: USD 1,217.70, GBP 955.77 & EUR 1,074.25 per ounce
30 Oct: USD 1,220.00, GBP 956.36 & EUR 1,074.33 per ounce
29 Oct: USD 1,230.75, GBP 958.88 & EUR 1,078.38 per ounce

Silver Prices (LBMA)

05 Nov: USD 14.74, GBP 11.33 & EUR 12.96 per ounce
02 Nov: USD 14.82, GBP 11.38 & EUR 12.95 per ounce
01 Nov: USD 14.45, GBP 11.19 & EUR 12.68 per ounce
31 Oct: USD 14.34, GBP 11.23 & EUR 12.64 per ounce
30 Oct: USD 14.43, GBP 11.32 & EUR 12.71 per ounce
29 Oct: USD 14.65, GBP 11.42 & EUR 12.86 per ounce


Recent Market Updates

– Big Short’s Eisman Is Shorting Two U.K. Banks on Brexit
– “Red October” Highlights Importance of Rebalancing Portfolios and Gold’s “Very Positive” Outlook
– Alarm Bells Ring and Gold Rises In October As Stocks and Property Fall Globally
– Gold Analysts At LBMA See 25% Return To $1,532/oz In 12 months
– Gold Improves Investment, Pension and Central Bank Portfolio’s Risk-Adjusted Returns
– Gold Gains Nearly 1% On Week As Global Stock Markets Fall Sharply
– Dublin Housing Boom Set To Bust?
– Palladium Surges To All Time Record High On Russian Supply Concerns
– Happy Birthday GoldCore
– “IMF Warning Highlights Gold’s Importance As A Diversification and Happy Birthday GoldCore”

DAG Video Still Play V2

Mark O’Byrne
Executive Director

 

ii) GATA stories
Maduro is a complete moron.  After Chavez repatriates all of Venezuela’s gold, Maduro basically lost everything.  He has no chance of getting this gold back from London
(courtesy Reuters)

Venezuela seeks to repatriate $550 million of gold from Britain, sources tell Reuters

 Section: 

By Mayela Armas
Reuters
Monday, November 5, 2018

CARACAS — Venezuela is seeking to repatriate about $550 million in gold bars from the Bank of England because of fears it could be caught up in international sanctions on the country, two sources with direct knowledge of the effort told Reuters.

Venezuela’s hard currency holdings have dwindled as existing U.S. financial sanctions have effectively blocked President Nicolas Maduro’s government from borrowing on international markets.

The Trump administration on Thursday issued a new round of sanctions banning U.S. citizens from having dealings with anyone involved in ‘corrupt or deceptive’ gold sales from Venezuela, as part of efforts to boost pressure on Maduro.

Maduro’s government is seeking to bring 14 tonnes of gold held in the Bank of England back to Venezuela, according to two public officials with direct knowledge of the operation, who asked not to be identified. …

… For the remainder of the report:

https://www.reuters.com/article/us-venezuela-gold-exclusive/exclusive-ve…


* * *

end

Perennial loser Barrick now in talks trying to merge their Nevada operations together

(courtesy Reuters)_

Barrick in talks with Newmont to combine Nevada gold operations, sources tell Reuters

 Section: 

By Zandi Shabalalaand Clara Denina
Reuters
Monday, November 5, 2018

LONDON — Barrick Gold Corp, which is being reorganized by Barrick’s $6.1 billion takeover of Randgold Resources, is in talks with Newmont Mining to combine their Nevada gold mining operations, sources told Reuters.

Last month’s tie-up between Barrick and Africa-focused Randgold Resources revived speculation about a joint venture between Newmont and Barrick in Nevada, something the two mining firms explored in 2014 without reaching a deal.

“They have been trying to negotiate for years but Newmont couldn’t agree with Barrick, one source said. “Now that you have a new management team, it’s certain they revived those talks.” …

… For the remainder of the report:

https://www.reuters.com/article/us-barrick-gold-newmont-mining/barrick-i…

END


iii) Other Physical stories
This is going to hurt quite a few firms
Republic Metals files for bankruptcy due to inventory missing
(courtesy Michele Graff/NationalJeweler.com)

Refiner Republic Metals Files for Bankruptcy

By Michelle Graff

michelle.graff@nationaljeweler.com

NOVEMBER 6, 2018

New York—One of the country’s largest precious metal refiners filed for bankruptcy Friday following the discovery of “inventory discrepancies” in its books and records this past summer.

Republic Metals Corp., which has its main office in New York and processes metals at a facility in Miami, filed Chapter 11 in U.S. Bankruptcy Court for the Southern District of New York.

The company is looking for a buyer, and on Oct. 29, Swiss refiner Valcambi issued a press release stating that it had “reached an understanding” to acquire Republic Metals Corp. and the companies were “working through the logistics of the planned integration.”

Jennifer Mercer, a spokeswoman for Republic Metals, clarified Monday that no deal had been finalized but that talks with Valcambi are ongoing. A Valcambi spokeswoman did not respond to request for comment.

Founded in 1980 by Richard Rubin, Republic owns Republic Metals Refining Corp. and Republic Carbon Company LLC, which processes spent carbon from metals mines.

In a declaration filed alongside the company’s Chapter 11 petition, Chief Restructuring Officer Scott Avila outlined the events that led up to the decision, starting in April when the company “discovered a significant discrepancy in its inventory accounting” while preparing its full year 2018 and first quarter 2018 financials.

Republic Metals retained accounting firm EisnerAmper LLP, which confirmed that there were discrepancies in both the company’s books and records, though Mercer said she could not elaborate on the scope or nature of the discrepancies.

In late June, the company got together with its senior lenders to ask the banks to give it “breathing room” while it worked to sort out the inventory issues and develop a plan to either rectify them or restructure, the declaration states.

But the banks began to press the company a few weeks later, serving it with termination, default and demand notices July 10.

Around the same time, Republic Metals began looking for a buyer, contacting a “major, strategic metals refiner about [a] possible acquisition”—meaning Valcambi—and bringing Avila on board as CRO.

According to the declaration, the banks agreed to hold off to give Republic Metals a chance to work out a deal with the potential buyer. But as the months passed and no deal was forthcoming, the banks cut off negotiations and one lender, ICBC Standard Bank, suspended the refiner’s ability to pay customers via credit on the London metals exchange, its most common form of payment.

Avila, the company’s board and its creditors opted to file Chapter 11 on Nov. 2, as the refiner has “limited cash” and “the inability to trade metals or deliver refined goods,” the declaration states.

If a deal with Valcambi isn’t reached and the refiner cannot find another buyer, then it will be forced to liquidate its assets and inventory.

Republic Metals Refining Corp. has between 1,000 and 5,000 creditors, with assets totaling $174.8 million but liabilities topping $265 million, according to court papers.

Its largest secured lenders include Mitsubishi International Corp., the New York branch of Coöperatieve Rabobank U.A. and Bank Leumi USA, which is among the lenders that have pulled out of the diamond and jewelry trade in recent years.

The company’s No. 1 unsecured creditor is Parsippany, New Jersey-based Laurelton Sourcing LLC, a subsidiary of Tiffany & Co. According to the Chapter 11 petition, Republic owes Laurelton more than $17 million.

Other trade debts include nearly $10 million owed to Chihuahua, Mexico-headquartered mining company Coeur Mexicana SA de CV; more than $5 million owed to Premier Gold Mines Ltd. in Thunder Bay, Ontario, Canada; and Geib Refining Corp. in Warwick, Rhode Island, which is owed more than $3 million, court records show.

-END-

_________________________________________________________________________________________________

 

 

 

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

i) Chinese yuan vs USA dollar/CLOSED UP TO 6.146/HUGE DEVALUATION FOR THE PAST FOUR WEEKS RESUMES/CHINESE COMING TO USA FOR TRADE TALKS IN NOVEMBER NOW ON //OFFSHORE YUAN:  6.9146   /shanghai bourse CLOSED DOWN 6.08 POINTS OR 0,23%

. HANG SANG CLOSED UP 186.57 POINTS OR 0.72%

 

 

2. Nikkei closed UP 248.76 POINTS OR 1.44%

 

3. Europe stocks OPENED ALL RED 

 

 

 

/USA dollar index FALLS TO 96.27/Euro RISES TO 1.1417

3b Japan 10 year bond yield: RISES TO. +.13/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.16/ 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:: 62.73 and Brent: 72.54

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.43%/Italian 10 yr bond yield UP to 3.35% /SPAIN 10 YR BOND YIELD UP TO 1.58%

3j Greek 10 year bond yield RISES TO : 4.33

3k Gold at $1234.85 silver at:14.68   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 4/100 in roubles/dollar) 66.22

3m oil into the 62 dollar handle for WTI and 72 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.16DESTROYING 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 1.0033 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1457 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to +0.42%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”. Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 3.19% early this morning. Thirty year rate at 3.42%

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

6.  TURKISH LIRA:  UP  TO 5.3389

Here Come The Political Fireworks: Traders Hunker Down Ahead Of “Shock” Outcome

Ahead of the most important day for US politics in years, global markets have hunkered down, coiling in anticipation or dipping cautiously into the red, as traders braced for midterm elections in the United States while anticipating a “shock outcome” with 2016 still fresh in everyone’s head.

European markets turned lower alongside American futures while Asian shares were fractionally in the green. The pound fluctuated amid Brexit hopes and despair, while Treasury yields dipped and the dollar rose.

Asian trading started off well thanks to the momentum from Monday’s strong US session (excluding Apple) with MSCI’s index of Asia-Pacific shares ex-Japan rising 0.4%. Japan and Hong Kong helped Asia overcome another Chinese wobble, where the Shanghai initially slumped but managed to recover most losses, although Europe slipped into the red early on as investors punished several corporate earnings misses and pre-U.S. midterms nerves took hold.

Apple suppliers such as Taiwan’s Hon Hai Precision Industry were hit by a report that Apple had told its smartphone assemblers to halt plans for additional production lines dedicated to the iPhone XR. The report had also driven Apple shares 2.8% lower in U.S. trade.

Europe’s Stoxx Europe 600 lost traction after a positive start and technology, retail and automakers were among the sectors dragging the index lower. That said, nobody was making any big statements and volumes were more than a third below the 30-day average. “European stock markets are a little in the red as political uncertainty hangs over investor sentiment,” CMC Market analyst David Madden wrote pointing to tensions between Italy and the EU over the country’s budget, China-U.S. trade spat.

S&P futures were rangebound, drifting in a 15 point range from session highs shortly before the European open to session lows as US traders walked in.

For once traders will forget interest rates, earnings and trade war, and will focus entirely on the looming US midterm elections which are seen as the first major referendum on the policies of President Donald Trump, including his sweeping tax cuts and hostile trade policies. Polls point to his Republican party losing control of the House of Representatives which could curb some of his policymaking power. The GOP is expected to retain control of the Senate.  Meanwhile, investors have one eye on the U.K., where Theresa May is redoubling efforts to reach a Brexit deal.

For today’s session, it will be all about polling and the results to come over the next 24 hours, so be on the look out for headline risks as exit poll results start to trickle in later in the day. Polls over in the East Coast are now open and that will be followed by the rest of the states in the coming hours.

Having been burned by the outcome of the 2016 presidential election, traders are especially wary: “It is definitely not the time to buy the dip,” said London & Capital’s CIO Pau Morilla-Giner. “Everything that could go well for U.S. consumers in the last couple of years has gone well, but now the tide is turning… At the moment you are running out of drivers of growth in the U.S.”

But while volumes were muted, nerves were distinctly absent from market indicators: the Cboe Skew index – also known as the “black swan” index – hovered near its 2.5 year low hit on Friday, indicating demand for OTM options remains tepid.

“Unlike the U.S. Presidential election or the U.K.’s Brexit referendum, the upcoming U.S. (midterm) elections are not a binary event,” said Yasuo Sakuma, chief investment officer at Libra Investments. “So it’s unlikely to send stocks significantly in one direction, apart from initial quick reactions.”

Back to markets, Italian and Spanish stocks weakened as updated PMI figures confirmed euro zone business growth fell to a two-year low last month due to rising trade tensions. The future output index caused even more concern as it fell to a near four-year low of 60.5 from 62.1.

“Euro zone companies reported a disappointing start to the fourth quarter,” said Chris Williamson, chief business economist at IHS Markit which compiles the data.

Most European government bonds were mixed and range-bound, with Bunds grinding higher, eventually breaching yesterday’s best levels to test 160. In Italy, BTPs reversed early gains after eurozone finance ministers called on Rome to change its budget at a meeting on Monday. The Bund/BTP sprad widened 8bp as Italian officials hold their ground but signal an willingness for “constructive dialogue.”

Political risks also dominated the currency market, with the Bloomberg dollar index confined to 1 point of 1,200 while the pound erased gains before another key Brexit meeting for Theresa May’s administration. The euro hovered around the $1.14 handle as German macro data lent support. Treasuries were little changed in rather thin trading volumes before a 10-year note auction.

The Aussie led gains among G-10 peers in delayed response to RBA’s painting of a slightly more upbeat picture of the economy in the statement accompanying its decision to leave rates unchanged Tuesday. The yen was little changed after earlier falling to its weakest level in a month as advancing Japanese stocks damped demand for haven assets. Emerging-market currencies consolidated.

Gold was little changed but in oil markets crude prices were near multi-month lows after the United States allowed eight countries to continue buying oil from Iran temporarily, easing the likelihood of a sharp supply drop. U.S. West Texas Intermediate crude futures slipped 0.3% to $62.89 a barrel, after hitting a seven-month low of $62.52 on Monday.

Elsewhere, a flurry of earnings are expected, including from Lilly and Ralph Lauren.

US Event Calendar

  • S&P 500 futures down 0.2% to 2,735.50
  • STOXX Europe 600 down 0.1% to 363.10
  • MXAP up 0.8% to 152.88
  • MXAPJ up 0.5% to 487.96
  • Nikkei up 1.1% to 22,147.75
  • Topix up 1.2% to 1,659.35
  • Hang Seng Index up 0.7% to 26,120.96
  • Shanghai Composite down 0.2% to 2,659.36
  • Sensex up 0.2% to 35,025.03
  • Australia S&P/ASX 200 up 1% to 5,875.18
  • Kospi up 0.6% to 2,089.62
  • German 10Y yield fell 0.2 bps to 0.424%
  • Euro up 0.07% to $1.1415
  • Brent Futures down 0.3% to $72.93/bbl
  • Italian 10Y yield rose 0.5 bps to 2.956%
  • Spanish 10Y yield rose 1.2 bps to 1.578%
  • Gold spot up 0.3% to $1,234.90
  • U.S. Dollar Index up 0.01% to 96.29

Top Overnight News from Bloomberg

  • U.K. Cabinet ministers expect to be locked in a room to study the latest options for a Brexit deal in strict secrecy on Tuesday as Theresa May redoubles efforts to get a deal this month, according to people familiar with the matter
  • German Chancellor Angela Merkel took aim at populist rhetoric that portrays the media as enemies, saying it’s unacceptable to attack critical journalism in a democracy
  • China’s vice president said Beijing remained ready to discuss a trade solution with the U.S., and urged changes in global governance to address a surge in populism and rapid technological advances
  • President Donald Trump said he is “probably not” meeting Vladimir Putin in Paris this weekend but does expect to meet the Russian president at a summit in Argentina at the end of November
  • U.S. gave a stark warning to companies around the world: Evading sanctions on Iran will hurt
  • German factory orders unexpectedly rose for a second month in September in a sign that Europe’s largest economy is poised to regain growth momentum toward the end of the year; orders gained 0.3% from the previous month, compared with economists’ predictions for a 0.5% decline
  • Italy signaled it’s not ready to budge on its controversial budget even as euro-area finance ministers called on it to prepare revised spending plans that comply with the bloc’s rules, in a sign that the standoff between Brussels and Rome is set to escalate in the coming weeks
  • Mitsubishi UFJ Kokusai Asset Management Co. has been piling into Treasuries on expectations that the U.S. yield curve will flatten as the economy gradually slows. It has done so by selling bonds in euro-zone nations, with the exception of Spain

Asian equity markets were mixed as weakness in China clouded over the mostly positive lead from US where the DJIA and S&P 500 closed higher with the latter led by strength in energy names, although the Nasdaq declined amid continued Apple woes after reports the tech giant cancelled a production boost for the budget iPhone XR due to slowing demand. ASX 200 (+1.0%) and Nikkei 225 (+1.1%) traded higher with Australia led also by the energy sector leading as it mirrored the outperformance seen stateside, while the Japanese benchmark benefitted from recent currency weakness and rose back above the 22000 level. Elsewhere, Hang Seng (+0.7%) and Shanghai Comp. (-0.2%) were subdued amid ongoing trade uncertainty and after the PBoC skipped open market operations again, while notable weakness was seen in casino stocks which pulled back from recent gains. Finally, 10yr JGBs were lacklustre after weakness seen in T-notes and with demand subdued by the strength in Japanese stocks.

Top Asian News

  • PBOC Adviser: Capital Outflow Pressure Smaller Than 2 Years Ago
  • Goldman Names Binnion, Wang as Asia ex-Japan ECM Co-heads: Memo
  • Camera Maker Mulls Taking a Note From Taylor Swift on Trade War
  • Malaysia Probes More Deals by Ex-Goldman Partner Leissner

Major European indices are mostly in the red (Eurostoxx 50 -0.5%) with underperformance in Spain’s IBEX as the index is dragged lower by heavyweight financial and telecom names. Meanwhile the SMI (Unch) outperforms with the index lifted by Adecco (+3.7%) post-earnings. In terms of sectors, industrials are benefitting from the lower base metal prices, while telecom names lag.  Moving onto individual equities, Zalando (-6.0%) is the worst performing stock following their earnings, with Morrisons (-5.0%) also lower on the back of their number. IWG (+7.0%) are out in front following optimistic earnings and conformation of their guidance, while FTSE heavyweight Associated British Food (+2.5%) in the green after the company said they expect an increase in retail profit after reporting their earnings.

Top European News

  • German Factory Orders Unexpectedly Rise as Domestic Demand Gains
  • Rosneft Uses Record Cash Flow to Pay Off Debt in Volatile Market
  • Tria Says Italy Still Has Disagreements With the Commission
  • Brexit Endgame Lifts Pound’s Volatility as Euro Stays Subdued
  • France Flexible on Date of Digital Tax Implementation: Le Maire

In FX, it is a different day, but familiar feel or trend in G10 land, as Sterling rivals the Antipodean Dollars for major honours. Cable continues ride high on a wave of Brexit deal optimism amidst more reports of an EU offer on the Irish border, and the latest proposal under the guise of an ‘Independent Mechanism’ that would allow the UK options to terminate the temporary customs arrangement. Cable has extended gains to test and briefly eclipse resistance around 1.3080, while Eur/Gbp has slipped further below 0.8750 to just a handful of pips from reported stops at 0.8720 and Gbp/Jpy breached its 200 DMA and 148.00 before losing some momentum. Meanwhile, the Aud has been boosted by relatively upbeat RBA commentary overnight following its monetary policy meeting with 2018 and 2019 growth seen stronger than previously and a tighter labour market expected to lift wages. Hence, Aud/Usd appears firmer above the 0.7200 handle that has been tough to overcome, and eyeing 0.7250 next, while Aud/Nzd has bounced from near 1.0800 to touch 1.0850, as Nzd/Usd remains capped ahead of 0.6700. EUR/CHF/JPY/CAD – All narrowly mixed vs the Greenback, which is trading cautiously ahead of today’s US mid-term elections, with the DXY hovering just above 96.200, as the single currency runs into offers around 1.1425 and ongoing Italian-EU budget issues that are preventing a more concerted attempt on technical resistance around 1.1456-60. Meanwhile, the traditional currency safe-havens, Chf and Jpy remain rangebound between 1.0055-35 and 113.20-45 with the latter looking at a key Fib (circa 113.34) on a closing basis for technical direction. Elsewhere, the Loonie has lost some of its BoC impetus as oil prices sag again, but could derive more independent pointers from Canadian building permits later. Usd/Cad now back above 1.3100 and climbing. EM – Some loss of momentum after Monday’s broad outperformance vs the Usd, but the Try did derive more support earlier to trade within a whisker of 5.3000 on hawkish rhetoric from the CBRT that sounded confident about hitting its inflation target via tight monetary policy, even though Turkish CPI accelerated further above in October.

In commodities, WTI (-0.4%) and Brent (-0.5%) are both lower as details of the US waivers on Iranian oil emerge. So far, China is allowed to buy around 360K BPD of Iranian oil for 180 days, with source reports noting that conditions require the disclosures of counter-parties and settlement methods. Elsewhere, India is allowed to purchase of up 300k BPD of oil, while South Korea was granted a 200k BPD oil waiver. Additionally, comments from US President Trump that he wants to impose the sanctions gradually to prevent shocks to the market, may have contributed to the price decrease. Traders will be eyeing the weekly API crude inventories released later today as a fresh catalyst for prices. Gold (+0.2%) has been gradually rising throughout the session as the yellow metal detaches itself from USD influence to act as a safe haven, meanwhile copper is lower and moving in tandem to the risk tone. Separately, aluminium associations from the US, Canada and Mexico have urged their governments to agree a deal which eliminates US aluminium tariffs from Canada and Mexico without the imposition of import quotas.

US Event Calendar

  • 10am: JOLTS Job Openings, est. 7,085, prior 7,136

DB’s Jim Reid concludes the overnight wrap

The main focus today will of course centre on the US midterm elections. According to the betting website predictit.org, the base case of the Democrats taking the House but the Republicans retaining the Senate is around 60% likely. The odds that the Republicans hold both chambers is around 30%, and the odds that the Democrats take both chambers is around 10%. We should  know tonight, with the first polls closing at 6pm EST/11pm GMT, though the first major bellwether states to close will be Virginia and Florida at 7pm EST/midnight GMT. The former has some marginal House races in the outskirts of Washington, DC, while the latter has a close Senate race. As the night progresses, we could know the final results by 10pm EST/3am GMT when the last marginal Senate races finish and enough House races are in the books that we should have a firm idea.

If things are still close, it could come down to California and its seven competitive House races, which could, in a worst-case scenario, take days or weeks to finalize as mail-in ballots are counted.

Ahead of the US going to the polls, the most impressive part of the last 24 hours was how well the S&P 500 held up given the renewed weakness in tech. Whilst the S&P closed +0.56%, the NYSE FANG index was down -1.35 % (but off intraday lows of -2.77%). The NASDAQ also fell -0.38% with Apple at that forefront following a drop of -2.84% (-9.28% over 2 days and -13.13% from peak on October 3) after Japan’s Nikkei media outlet reported that the tech behemoth had told assemblers to halt new production capacity of the new iPhone XR until there is more assurance on demand. That move for the NASDAQ was the first move of less than +/-1% since October 23rd (eight business days) and breaks the longest such stretch since December 2008. That came after the STOXX 600 had closed -0.16% in Europe following an intraday range of just 0.53% which was the smallest since the end of September.

This morning in Asia, markets are largely flat to down with the exception of Japan. The Shanghai Comp (-1.05%) and Hang Seng (-0.23%) are lower while the Kospi (+0.02%) is flat and the Nikkei (+1.14%) is up. Elsewhere, futures on the S&P 500 (-0.05%) are flat. In overnight news, the US and China are set to hold diplomatic and security talks in Washington this coming Friday, ahead of the upcoming meeting between their respective presidents on the side lines of the G20 meeting. Elsewhere, the PBoC’s adviser Jun Ma has said that the Chinese yuan hitting the key psychological level of 7 or not “isn’t that crucial” while adding that the capital outflow pressure in China is smaller compared to two years ago. As a reminder DB expect 7.40 next year.

Bond markets were similarly unexciting yesterday. 10y Treasuries ended the session -1.3bps lower at 3.199% and Bunds -0.1bps lower at 0.426%. BTPs ended more or less flat but did pare an early move higher in yield of around +7bps with the rally supported by a downplaying of a Politico report by the EU Commission about the Commission proposing financial sanctions on Italy as soon as November 21st. Finance Minister Tria was quoted as saying in yesterday’s Eurogroup meeting of the Euro-area Finance Ministers that Italy remains committed to reducing its debt ratio and hopes to reach a compromise with the EC while adding that Italy is currently not in the process of changing its budget, but that it was still committed to pursuing a dialogue with the EC.

Meanwhile the data in the US was actually a marginal positive with the ISM non-manufacturing coming in ahead of expectations at 60.3 (vs. 59.0 expected) – albeit down -1.3pts from September’s record reading but still the second-highest since 2005. New orders held relatively steady at 61.5 although employment did nudge down to 59.7 from 62.4 the month prior. That is however  more or less in line with the three-month average. The prices subcomponent actually fell nearly 10pts to 61.7 but still remains at elevated levels. The associated text did however, highlight that “tariffs are beginning to impact business” and that construction firms in particular had asked suppliers to hold pricing for six months. Shortly before this the final services PMI in the US was revised up +0.2pts to 54.8.

Staying with the US, it was interesting to see the chart in our US economists’ “Fed Watcher” note yesterday which suggested that wages (in this case total private average hourly earnings) started accelerating as unemployment approached and breached 4% earlier this year. A tipping point of sorts and this fits in with the trend observed in the 1960s when wages also accelerated when the unemployment rate dropped below 4%. This 1960s comparison was something DB research has highlighted in numerous publications over the last year or so.

In other news, where there were no shortage of headlines yesterday was here in the UK with Brexit newsflow once again peaking in the morning after the weekend noise. Reuters broke with the news quoting ITV political editor Robert Peston as saying that the UK government had settled on a no deal Brexit outcome as the most probable in the event of no deal within the next week. As DB’s Oliver Harvey noted, a December agreement is still possible as is an option of extending the Article 50 timeframe (granted by a short duration) so it’s worth taking this headline with a pinch of salt. Further headlines on Brexit included the Sun as saying that no deal is likely this week and that dates for a possible EU summit had been pushed to the 27th and 28th of November – making a parliamentary vote in the first week of December more likely. There were also reports that Brexit Secretary Dominic Raab might resign but this was later downplayed. Meanwhile, late yesterday night, The Times reported that the EU is preparing to offer the UK PM May an independent mechanism by which Britain could end a temporary customs arrangement with the EU. If true, this could help overcome the key sticking point in Brexit talks. However The Times has been a source of numerous headlines of late and it’s not clear that they all have substance. Sterling closed up +0.56 at $1.304 last night and traded at $1.305 this morning. There is a UK cabinet meeting today to discuss Brexit but it doesn’t feel we’re quite ready yet for a breakthrough. Nevertheless it looks like we are inching towards a deal and then the UK parliamentary fun and games will begin.

On the data front, the UK’s services and composite PMIs both softened, following last week’s drop in the manufacturing PMI. The services metric printed at 52.2 versus expectations for 53.3 and down from 53.9 in September, while the composite index came in at 52.1 versus expected 53.4 and down from 54.1. The composite index is now at its lowest level since the Brexit referendum. Separately, Turkish CPI printed at 25.2% yoy, its highest level since 2003, though the monthon- month figure softened to 2.67% from 6.30% in September. The Turkish lira rallied +2.22% to 5.314, its strongest level since early August.

The US’s sanctions on Iran took effect today, though they issued waivers to eight countries (China, India, Italy, South Korea, Turkey, Taiwan, Greece, and Japan) which will allow them to continue importing Iranian crude oil. The waivers will cover around 1.3 million barrels per day, which would equate to small additional cuts from current export levels and would be consistent with the 2012-2015 experience. There was no indication of how long the waivers would remain in effect, and Brent crude oil traded somewhat listlessly to close -0.11%.

As far as the day ahead is concerned, needless to say the US midterms will dominate. Before that, this morning in Europe the early data release is September factory orders numbers out of Germany. Shortly after that the focus turns to the remaining October services and composite PMIs. No change in the composite reading of 52.7 for the Euro Area is expected. Later this morning we’ll get September PPI for the Euro Area before we get the September JOLTS job openings data in the US. Away from that we’re due to hear from the ECB’s Praet, Coeure and Lautenschlaeger at various stages this morning.

 

 

3. ASIAN AFFAIRS

i)TUESDAY MORNING/ MONDAY NIGHT: 

SHANGHAI CLOSED DOWN 6.08 POINTS OR 0.23% //Hang Sang CLOSED UP 186.57 POINTS OR 0.72% //The Nikkei closed UP 248.76 OR 1.44%/ Australia’s all ordinaires CLOSED UP 0.91%  /Chinese yuan (ONSHORE) closed UP  at 6.9146 AS POBC RESUMES  ITS HUGE DEVALUATION  /DELEGATION COMING TO THE USA TO SEE TRUMP IN NOVEMBER CANCELLED/Oil DOWN to 62.73 dollars per barrel for WTI and 72.54 for Brent. Stocks in Europe OPENED RED //.  ONSHORE YUAN CLOSED WELL DOWN AT 6.9146 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED WELL UP ON THE DOLLAR AT 6.9146: HUGE DEVALUATION/PAST SEVERAL DAYS RESUMES// TRADE TALKS NOW ON   : /ONSHORE YUAN TRADING SLIGHTLY WEAKER  AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

3 a NORTH KOREA/USA

 

North Korea/South Korea/USA/China

3 b JAPAN AFFAIRS

 
END

3 C CHINA

4.EUROPEAN AFFAIRS

ITALY

The following is a very important commentary from our European experts GEFIRA.  Here they state that the Italian people must understand that their country is at war

witn Brussels.  The EU wants a surplus budget which is impossible with a declining population. The authors outline what will be Italy’s next step

(courtesy GEFIRA)

GEFIRA: The Italian People Must Understand That Their Country Is At War

 

The conflict between the European Union and Italy is a full-blown financial war. Euro countries cannot print their own money and for that reason they cannot have an endless deficit. Countries within the eurozone have to live within their means or else, without the intervention of the ECB, they will go bankrupt. Nobody knows the consequences of an Italian default and debt restructuring, but it can lead to the end of the euro.

To make the euro sustainable, the European financial elites want the Italians to reduce their spending and turn a budget deficit into a budget surplus. However, due to the country’s shrinking population the Italian budget deficit — as we have argued many times – can only increase. The European commission rejects the Italian budget because Rome wants to increase its debt far beyond the limit allowed by the ECB.

“This is the first Italian budget that the EU doesn’t like,” wrote Deputy Prime Minister Luigi Di Maio on Facebook.

“No surprise: This is the first Italian budget written in Rome and not in Brussels!”

Matteo Salvini added:

“This (the rejection of the Italian budget plan by the EU) doesn’t change anything.”.

 “They’re not attacking a government but a people. These are things that will anger Italians even more,” he said.

The country has entered a demographic winter and sustainable economic growth is simply impossible, at least for the foreseeable future. As is the case with the whole of Europe, the continent needs a plan to support an ageing and declining population. As if not aware of it, the Brussels-Frankfurt establishment only wants Italy to stick to their austerity program, i.e. decrease public spending and do away with the current Italian administration, which refuses to comply.

To force Prime Minister Luigi Di Maio and Matteo Salvini out of office, the European Union will go to any lengths to destroy the Italian banking sector the way they did it in Greece and Cyprus. In 2015 Greece shut down its banks, ordering them to stay closed for six days, and its central bank imposed restrictions to prevent money from fleeing out of the country.

Jeroen Dijsselbloem, former head of the euro group, suggests that the financial markets should try to lower the value of the Italian bonds. A lower bond value will erode the capital of the Italian banks and make them insolvent. Mario Draghi, head of the ECB, warned last week that a recent sell-off of Italian government bonds was set to dent the capital of Italy’s banks which own about 375 billion euros ($426.30 billion) worth of that paper. The remarks of the Central European Bank’s chairman were carefully prepared as another deliberate attack on the Italian financial system. It is highly unusual for central bankers to warn the bank under their supervision against insolvency, at the same time trying to provoke a preemptive bank run.

“I find it improper for the person in charge of the financial stability in Europe to sound the alarm, even if softened later on, over the health of the Italian lenders since Italy is one of the countries under his banking supervision,” an Italian lawmaker rightly said.

The Italian rulers know that they are under assault and are contemplating how to shield the banks from the European banking authorities. Rome has to come up with a national strategy to preserve its banking system even if this is against the European rules. Matteo Salvini, leader of the Northern League, met with his counterpart from the Five Star Movement, Luigi Di Maio, to discuss the condition of the Italian economy, budget and banks, a spokesman for Salvini said.

“No banks will be in difficulty,” Salvini said.

The two parties, which are running the country in a coalition government, are working in sync, he said. Premier Giuseppe Conte asked government agencies to prepare options to help the lenders if the decline in the value of their holdings of government debt requires them to recapitalize the banks, Corriere della Sera reported.

The leadership in Rome will not leave it to Brussels or Frankfurt bureaucrats to decide whether Italian banks are insolvent or not. In theory, every sovereign government can declare a bank solvent by the stroke of a pen. The Italian authorities can refuse to close their banks and force them to stay in business. Unlike Greece, Italy has a trade balance surplus and the country does not depend on a foreign supply of money to pay for its imports. Keeping insolvent banks open will further undermine the reliability of the euro as a common currency. To put even more pressure on the Italian government, Karsten Wendorff, Member of the Advisory Board of the German federal banks, suggested confiscating private Italian properties to make good for the Italian public debt obligations.

“Instead of a European fund that buys Italian government bonds and that is ultimately backed by European taxpayers, a national fund should be created,” Wendorff wrote in the Frankfurter Allgemeine Zeitung Saturday.

Such a fund would be financed by “national solidarity bonds” that Italian households would be obliged to purchase, for example, to the tune of 20 per cent of their net wealth. At such a rate “almost half of the Italian government debt could be converted into solidarity bonds.” If the plan were to be implemented, it would mean that Italian house owners would be forced to pay 20% of their asset value to foreign banks. The plan is first and foremost a warning to the leadership in Rome against violating their budget rules. Germany is willing to confiscate whatever it is entitled to.

The general public is unaware of the seriousness of the situation. Both Salvini and Matteo – as well as the Italian people – should realize that they are at war with the European establishment which ultimately intends to remove them from power. To win this battle they need unconditional support from the state security apparatus and the Italian people. The confrontation between Rome on the other hand and Brussels and Frankfurt on the other, however, will not break out before the European Parliament elections.

 END
Salvini cuts Migrant allowance from 35 euros to 19 euros per day which will save them 400 million euros.  Italy has a declining population and they are in need of workers to take the place of Italians who do not want children.  Salvini wants to entice Italians to have more children
(courtesy zerohedge)

Salvini To Cut Migrant Allowance In Half, Saving €400 Million

Italy’s populist interior minister, and de facto most important politician, Matteo Salvini has continued his assault on what he views as Italy’s biggest problem, and is expected to drastically cut the daily allowance for migrants in Italy, claiming the country could see save up to €400 million by 2019.

According to Il Giornale, the proposal would slash by almost half the current daily allowance of €35 per day to only €19 per day, which would be one of the lowest rates in western Europe. And, according to the Interior Ministry, the cuts would lead to a saving of €400 million in 2019, rising to €500 million in 2020 and €600 million in the years thereafter, unlocking much needed budgetary savings for a country that remains l

The move would also be part of the broader migration and security decree released by Salvini in late September, which also banned residency permits for so-called humanitarian reasons. Migrants will now be classified into two groups: those with recognized asylum claims and those without according to the Italian press. Those with refugee status and recognized underage migrants will have broader access to funding and government programs.

Salvini, who came into power riding on a platform vowing to crackdown on the number of inbound refugees, has managed to greatly reduce the number of migrants coming into Italy by closing Italian ports to migrant rescue NGO vessels who have been accused in the past of co-operating with people smugglers.

Having dealt with the issue of migrants entering Italy illegally, Salvini has recently set his sights on deportations of existing illegals according to Breitbart. Earlier this week he announced a new plan to invest €12 million to fund the deportation of at least 2,700 illegals starting in February and ending in 2021.

As reported back in 2015, one of the arguments proposed by advocates of mass migration and open borders has been using mass migration to counter the falling birthrates in western European nations, helping to boost Europe’s flagging GDP.

Salvini has made his opposition to this so-called “replacement migration” argument clear, saying: “I believe that I’m in government in order to see that our young people have the number of children that they used to a few years ago, and not to transplant the best of Africa’s youth to Europe.”

Instead, and pulling a page out of China’s playbook, Salvini has trying to motivate Italians to have more children, with the government offering free farmland to couples having three or more children. It is unclear if this strategy has any hope of working in a nation in which two-thirds of young adults still live with their parents.

END

Fitch warns the Italian government that it may not survive as the coalition member views are quite diverse

(courtesy zerohedge)

Fitch Warns Italy’s Government May Not Survive Amid Calls For A Vote Of Confidence

Update: Picking a perfect moment to prove Fitch’s point, Bloomberg reports that the Italian government may call a vote of confidence in the Senate on the migration measures. This would aim to strong-arm Five Star dissenters who face expulsion from the party if they vote against the government.

Additionally, Five Star and the League are also at loggerheads in the lower house of parliament over Five Star’s demand in an anti-corruption bill to scrap time limits on how long people can be prosecuted after an initial trial. Salvini has said the government must “avoid trials that last forever, also for the innocent, which would be a defeat for everyone.”

It appears that if the internal bickering within Italy’s “coalition” government continues, the EU may just opt to wait to discuss the Italian deficit with whatever government comes as a replacement.

* * *

While European bond traders have been focused on the escalating standoff between Italy and Brussels over Italy’s budget-busting deficit proposal, which culminated this morning with EU’s Dombrovskis warning that the European Commission is considering a sanction procedure against Italy if the budget does not change – even as Italy has sternly refused to change the budget – this morning the head of Fitch’s sovereign ratings, James McCormack, warned that uncertainty involving Italy’s coalition government is as great a risk for BTP investors as the budget for the simple reason that the government may not survive as its members are “too  different.”

Speaking on Bloomberg TV, the Fitch strategist said that there are not many things that the coalition partners agree on, and that raises questions about the government’s survival.

We are not convinced that this coalition government is actually going to survive. It has very different coalition partners” and there are “not many things that they agree on”, McCormack said.

“Then the question becomes: what happens then? Political uncertainty is not finished in Italy,” he added, expecting Italian political fireworks to continue well into 2019. As a reminder, there is a November 30 deadline for the Italian budget to be approved by European Commission, which then has to pass Italy’s parliament by December 31, with an April 30 “Plan B” extended deadline for Italian approval.

The Fitch analyst also said that if yields on Italian bonds go higher – whether with the active involvement of the ECB, which can be quite convincing as Berlusconi recalls all too well, or without – “this could force the Italian government to think of a different strategy.”

The silver lining to McCormack is that there hasn’t been a blowout in debt-to-GDP, yet: “the debt dynamics are not great, because we are not seeing declining debt. But the debt is not increasing. The debt is pretty stable. It’s high, but it’s stable.”

That will change if the Italian budget passes, as proposed. Which is also why the European Commission will not allow it to happen.

As Bloomberg notes, this means the Italian bond drama could drag on well beyond the budget standoff deadline and volatility may rise as the market deals with two-way risks. Furthermore, if this government collapses in the near future, it would not mean the end of fiscal challenges for Italy. On the other hand, the coalition cabinet has little choice: with Italian growth so weak, it’s not clear if any government can stick to the EU’s budget rules given potential economic and social costs.

Which is why Salvini, Di Mateo and company are trapped, are damned if they cut the deficit, damned if they don’t.

The market is starting to realize this, and the BTP yield spread is edging back toward 300 bps, which is already 1.35% above the five-year average.

The one thing Italy has going for it, is that its debt-to-GDP ratio, while high, has been steady around 133% over the past five years (if still the highest in Europe after Greece).

But that can change with this or another government. As Bloomberg concludes, “with the EU’s Moscovici raising pressure on the budget, the situation might get much worse before it gets better.”

 

 end
We must pay attention to what Chris Whalen states and today he details the problems with respect to Deutsche bank
(courtesy Chris Whalen)

The Challenge For Deutsche Bank – Cost-Cutting & Capital-Deployment Conundra

Authored by Chris Whalen via TheInstitutionalRiskAnalyst.com,

When we first heard news reports about a new investor in Deutsche Bank (DB), we of course assumed that this meant the purchase of new shares and thus an increase in capital.  But no, it was merely an “activist investor” taking a stake in existing shares.  Is this really news or merely a sign of a top in large bank stocks?  The DB common is trading a hair over $10 or just 0.3x book value and has a beta of 1.5.

Douglas Braunstein, founder and managing partner of Hudson Executive Capital and J.P. Morgan’s (JPM) former CFO, said in an interview with CNBC that the firm has taken on the stake over the last few months after studying the stock for a year.  We’ve been following DB for a lot longer than that and have great difficulty constructing a bull case for the name.  But let’s take a look anyway.

First on the list of concerns is profitability.  DB has been struggling for years to find a business strategy to deliver consistent profitability, the key measure of stability for any bank. Through the first nine months of the year, DB delivered net income of less than a €1 billion compared with €1.6 billion a year ago.  For the full year 2017 the bank lost €750 million.  As yet, no one on the management team – if we may so dignify DB’s executives – have been able to articulate a coherent plan to move forward.

Second is capital.  DB has just €61 billion or 4% capital to total assets of €1.5 trillion, one of the lowest simple leverage ratios of any major bank worldwide.  The bank tries to hide this capital deficiency behind calculations that exclusively use “risk weighted “assets” of just €354 billion. In the bank’s non-GAPP disclosure, there is just €54 billion in tangible capital disclosed for a leverage ratio closer to 3%.

In the Q3 ’18 earnings call, when CEO Christian Sewing said that “we committed to conservative balance sheet management and maintaining a CET1 ratio above 13%,” he was referring to risk weighted assets, not total assets.  If one assumes that the entire Basel III/IV framework is a confused mess when it comes to describing risk, then the leverage ratio is what matters.  Risk weighted assets is a way to pretend that the rest of the banks in Europe and Asia are solvent.

To be fair to DB, most European banks play the game of only referring to “risk weighted assets” in their financial disclosure to investors.  The EU bank regulators are entirely complicit in this charade. Indeed, since the end of 2017 DB’s total capital has actually fallen 4%.

The last major infusion of capital for DB came from the generous folks at HNA, who are in the process of liquidating their debt financed empire at the behest of Uncle Xi.  Regulators in the EU and US never asked about the source of the funds provided by HNA nor the beneficial ownership of the Chinese firm.  Since the initial investment was raised to almost a 10% stake in 2017, HNA has been a distressed seller, partly because so much of the investment seems to have been funded with debt.

The third key concern among a far longer list of questions is the franchise. The DB supervisory board has shown no vision when it comes to focusing the bank’s business on more profitable areas.  DB is more a securities firm than a bank.  It does not have a strong banking franchise in Europe and has a mediocre investment banking and capital markets business in London and New York.  Ranking eighth in the league tables after Barclays (BCS) and above Wells Fargo & Co. (WFC) in total deals YTD, there is no sector where DB has a commanding presence in either capital markets or investment banking.

Like JPMorgan (JPM) and Citigroup (C), less than a third of DB’s book is allocated to loans, reflecting the bank’s focus on trading and derivatives.  The bank does have a strong position in commercial real estate in the US, but the greatly stretched valuations in that sector do not inspire confidence about future loan and securitization volumes.  Notice, for example, that the bid for agency RMBS had largely disappeared in the US. Spreads are set to widen as the year-end approaches.

Sewing says that “Our principal near-term target is to reach a return on tangible equity of more than 4% next year.”  Such a goal is relatively bold given the parlous state of the banking industry in Europe, but DB’s US peers have equity returns well in excess of twice this level.

Perhaps more frightening is Sewing’s intention to “deploy part of our capital into our business,“ something that DB has never done well.  The ill-fated investment in the Postbank, for example, is currently being restructured at a cost of tens of millions of euros as the bank seeks savings by merging the two entities.

So will DB have a negative surprise for investors in Q4’18?  As Sewing said during the conference call: “I’m well aware of Deutsche Bank’s history of negative surprises in the fourth quarter, and we are absolutely determined to not repeat this.” But even without any drama, the fact remains that cost cutting of various types is the predominant activity at DB this year and in 2019.

Investors can expect another couple hundred million in restructuring charges in the fourth quarter, although DB management is telling investors that overall charges could be well below original estimates for 2018.  But the big challenge will be increasing revenue through the enterprise, for example by moving several hundred billion euros earning negative 40bp at the Bundesbank into other, more remunerative activities.

DB executives point to such accomplishments as taking share in the market for leveraged loans, a sector we can be pretty sure will figure prominently in the next downturn in the credit cycle.  Despite the happy talk coming from senior management about deploying capital prudently, the fact is that DB does not have a lot of options when it comes to new business outside of a low-quality capital markets business.

Putting scarce capital into growing market share in leveraged loans and collateralized loan obligations (CLOs), for example, strikes us a distinctly unattractive right now.  But the fact is that for the past decade or more, DB has made a living of sorts by structuring crappy assets that other banks will not touch.  The legal and reputational risk from these activities have been enormous.  As CEO Sewing told investors: “[w]e are seen as one of the better banks in this business and, therefore, we see increasing volume.”  Wunderbar!

 

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

IRAN

Iran shuts off oil tanker tracking system so the uSA will not know where they oil is going

(courtesy zerohedge)

Iran Shuts Off Oil Tanker Tracking System As US Sanctions Start 

Iran is preparing for along siege
(courtesy Magnier)

Iran Is Preparing For A Long Siege As The Global Squeeze Begins

Authored by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media

On Monday the harshest and highest level economic and energy sanctions that can be imposed on any country have been imposed unilaterally on Iran. The US establishment will try its best to bring the Islamic Republic to its knees and Tehran will do its best to cross the US minefield. Whatever the outcome, Iran will never submit to Washington’s twelve conditions.

Iran is not a fledgling country ready to collapse at the imposition of the first tight sanctions, nor will Iran allow its oil exports to be frozen without reacting. In fact, US and UN sanctions against Iran date to the beginning of the Islamic Revolution and the fall of the Shah in 1979.

No doubt the Iranian economy will be affected. Nevertheless, Iranian unity today has reached new heights. President Trump has managed to bring reformists and radicals together under the same umbrella!

Iranian General Qassem Soleimani has said to President Hassan Rouhani: “You walk and we stand ahead of you. Don’t respond to Trump’s provocations because he is insolent and not at your level. I shall face him myself”. Rouhani believes “US policy and its new conspiracy will fail”. All responsible figures in the Iranian regime are now united under the leadership of Imam Ali Khamenei against the US policy whose aim is to curb the regime.

Under the previous worldwide sanctions regime, Iran began developing missile technology and precision weapons. Iran has never yielded in support of its allies because these alliances are an integral part of its ideology.

Today, Tehran is not standing alone against the US and is waiting to see what course global sanctions will take before reacting. Officials in Tehran, convinced that Trump will win a second term, are preparing for a long siege.

Sayyed Ali Khamenei said his country will never strike any deal with the US and won’t be a party to any future agreement because the US is fundamentally untrustworthy. Iran relies on the unity of its own citizens and on the support of its partners in the Middle East, Europe (a crucial strategic ally), and Asia.

Europe, notably, is trying to disengage itself from the US sanctions, but so far with little success. Its leaders are begging in vain for an exemption for trade in food and medicine to reduce the population’s suffering.

Trump is determined – even if these measures are harmful to the European economy – to prevent any transactions between Iran and Europe. This is one of the main reasons why the European continent is looking at implementing a long-term strategy specifically to disengage itself from the Swift messaging service used by banks and financial institutions for all trade transactions worldwide.

The UK, Germany and France have stood firm against the US establishment’s decisions and sanctions for the first time since World War II. Trump shows no concern for principles, laws or international agreements (like the Nuclear Deal) and is instead engaged in a naked quest for profits. The US is trying to maintain its global hegemonic power and its long-standing efforts for world domination, at the expense of its European partners and its Middle Eastern allies who are constantly bled by the US’s extortion racket.

Several European companies have an interest in ignoring Trump’s warnings: they could decide to trade with Iran solely on the basis of local currency exchange, provided there are no US-based assets involved.

One of the main problems that remains is Iraq. The US aims to create internal struggle within Baghdad’s political circles, notably between pro-Iran and pro-USA factions. Nevertheless, Mesopotamia will never close its doors on Iran’s trade and will maintain the flow of goods between the two countries, regardless of consequences.

If Trump decides to deal more harshly with Iraq, he will push the country further into the arms of Iran. Trump has already shown signs of weakness: he granted a temporary sanctions waiver to eight countries, including Russia, China, Turkey, Japan, India and South Korea.

And Russia, China and Turkey have announced that they will not abide by any sanctions, with or without US blessing. This means that Iran will not be completely surrounded; these countries will trade extensively with the Islamic Republic. Iranian exports of 2.5 million barrels per day will be reduced but will never be shut down completely. Thus US plans–to hit Iran’s economy, change the regime, stop innovative military production and curtail Iranian support to its allies in Lebanon, Syria, Iraq, Yemen and Afghanistan—are not feasible.

For a case in point: the “Islamic State” (ISIS) terrorist group managed to sell its oil for several years. Stolen oil from Iraq and Syria reached the Mediterranean and was even exported outside the Middle East. By the same token, a long-established country like Iran will not find it very difficult to export its oil.

Trump’s sanctions have terrorized his allies more than his enemies. These allies are seriously looking today for other alternatives. What was inconceivable has become a reality; US actions respect no limits or boundaries. The new sanctions will help Iran to become even more independent and self-sufficient in many fields.

Furthermore, the number of countries concerned by and determined to escape US hegemony is increasing. The US is showing a few diplomatic skills: in reality, it has become a giant, indeed, very strong, entity with a lot of muscle but few brains.

At the same time, there are strong indications that the US is extremely concerned about its worldwide position. Europe is not hiding signs of rebellion against the US; China and Russia are emerging as potential world leaders, while Turkey may reassert a leadership role in the divided Arab world. These countries will certainly remain outside the US orbit, and many other countries, realizing that their interests are no longer served by an alliance with the United States, will slowly but surely join them

 END
Turkey is again making noise in the Med. Sea as they are vowing to make the “sea bandits” drilling for gas off Cyprus pay like the terrorists did in Syria
(courtesy zerohedge)

Turkey Vows To Make “Sea Bandits” Drilling Gas Off Cyprus Pay “Like Terrorists In Syria Did”

Via RT,

Ankara will not allow any “sea bandits” to roam free and tap the disputed natural gas reserves off Cyprus, Turkey’s president has vowed, while commissioning a new warship to challenge competitors militarily, should the need arise.

“We will not accept attempts to seize natural resources in the Eastern Mediterranean through the exclusion of Turkey and the Turkish Republic of Northern Cyprus (TRNC),”

Erdogan said Sunday, according to Daily Sabah. While claiming that Turkey has no ambitions to annex any “territories,” Ankara promised to protect “the rights of our country and of our brothers.”

“Those who thought that they could take steps in the Eastern Mediterranean or the Aegean despite [this] have begun to understand the magnitude of their mistake. We will not allow bandits in the seas to roam free just like we made the terrorists in Syria pay,”Erdogan said at a ceremony transferring the TCG Burgazada corvette to the Turkish Navy.

The exploration of hydrocarbon resources off the coast of the Republic of Cyprus has become a sensitive issue for the international community, ever since the first gas deposit discoveries were made off the coast in 2011. While the Republic of Cyprus belongs to the EU community and is recognized by the UN, TRNC, the northern third of the island, has been occupied by Turkey since 1974. As a result, Ankara continues to claim jurisdiction for offshore research in the East Mediterranean, an area thought to be rich with natural resources.

The region has recently witnessed an escalation in tensions, after the Turkish Navy intercepted a Greek frigate which tried to interfere with a Turkish research vessel’s seabed exploration on October 18. The incident prompted a diplomatic row with Greece, which traditionally supports the ethnically Greek government of the Republic of Cyprus. While Greece denied interfering with the Turkish research vessel, Ankara has cautioned its neighbor and longtime opponent not to stir trouble in the region.

RT

@RT_com

Will tensions with Greece & Cyprus follow? https://on.rt.com/9hoj

Turkey to start oil & gas drilling in the Mediterranean — RT Business News

Turkey sent a ship to begin drilling for oil and gas in the eastern Mediterranean on Wednesday, two weeks after the latest tension between Turkey and Greece over jurisdictions and over hydrocarbon…

rt.com

To ease tensions, Cyprus’ President Nicos Anastasiades has offered Turkey on Friday to cooperate on exploiting the East Mediterranean’s potential oil and gas wealth, stressing that the ethnically split island nation should be reunified. All previous international efforts to unite the island have failed. To avoid any further intercommunal tensions and hostilities the United Nations continues to maintain a buffer zone there.

“We will continue with our goal of exercising the sovereign rights of the Republic of Cyprus, as an independent state – member of the European Union, proceeding seamlessly with our energy planning for the benefit of all the legitimate inhabitants of the country, Greek Cypriots and Turkish Cypriots,” the president noted.

US-based ExxonMobil and Qatar Petroleum have already been licensed by the Cypriot government to undertake seabed exploration of Block 10. Last month, Nicosia also invited France’s Total, Italy’s ENI and ExxonMobil to explore Block 7. ExxonMobil’s Stena IceMax drillship is scheduled to arrive in Cyprus on November 12. Turkey, meanwhile, started conducting its first deep-sea drilling off Antalya’s shores on its Mediterranean coast this week.

end

6. GLOBAL ISSUES

 

7  OIL ISSUES

8. EMERGING MARKETS

INDIA

 

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

Euro/USA 1.1417 UP .0009 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 ALL RED

 

 

 

 

 

USA/JAPAN YEN 113.16  DOWN 0.101  (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 1.3078 UP   0.0020  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3122  DOWN .0011 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 TUESDAY morning in Europe, the Euro ROSE by 9 basis point, trading now ABOVE the important 1.08 level RISING to 1.1417; / Last night Shanghai composite CLOSED DOWN 6.08 POINTS OR 0.23%

 

//Hang Sang CLOSED UP 186.57 POINTS OR 0.72% 

 

 

/AUSTRALIA CLOSED UP  0.91% /EUROPEAN BOURSES ALL RED

 

 

 

The NIKKEI: this TUESDAY morning CLOSED UP 248.76 POINTS OR 1.44%

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED  RED 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 186.57 POINTS OR 0.72% 

 

 

/SHANGHAI CLOSED DOWN 6.08POINTS OR 0.23%

 

 

 

Australia BOURSE CLOSED UP 0.91%

Nikkei (Japan) CLOSED UP 248.76 POINTS OR 1.44%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1235.50.

silver:$14.69

Early TUESDAY morning USA 10 year bond yield: 3.19% !!! DOWN 1 IN POINTS from MONDAY’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 3.42 DOWN 3  IN BASIS POINTS from MONDAY night. (POLICY FED ERROR)/

USA dollar index early TUESDAY morning: 96.27 DOWN 1  CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

And now your closing TUESDAY NUMBERS \1: 00 PM

 

Portuguese 10 year bond yield: 1.90%UP 2    in basis point(s) yield from MONDAY/

JAPANESE BOND YIELD: +.13%  UP 0  BASIS POINTS from MONDAY/JAPAN losing control of its yield curve/EXTREMELY VOLATILE YESTERDAY…

 

SPANISH 10 YR BOND YIELD: 1.58% UP 1 IN basis point yield from MONDAY

ITALIAN 10 YR BOND YIELD: 3.40 UP 7   POINTS in basis point yield from MONDAY/

 

 

the Italian 10 yr bond yield is trading 182 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS UP TO +.43%   IN BASIS POINTS ON THE DAY//

 

END

IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.1412 UP .0004 or 04 basis points

 

 

USA/Japan: 113.36 UP .101 OR 10 basis points/

Great Britain/USA 1.3081 UP .0024( POUND UP 24 BASIS POINTS)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was ROSE BY 4 BASIS POINTS  to trade at 1.1412

The Yen FELL to 113.36 for a LOSS of 10 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE

The POUND GAINED 24 basis points, trading at 1.3081/

The Canadian dollar LOST 21 basis points to 1.3131

 

 

The USA/Yuan,CNY closed DOWN AT 6.9194-  ON SHORE  (YUAN DOWN)

THE USA/YUAN OFFSHORE:  6.9225(  YUAN DOWN)

TURKISH LIRA:  5.4021

the 10 yr Japanese bond yield closed at +.13%

 

 

 

Your closing 10 yr USA bond yield DOWN 0 IN basis points from MONDAY at 3.20 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.43 DOWN 10 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, 96.32 UP 4 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 TUESDAY: 4:00 PM 

London: CLOSED DOWN 59.25 POINTS OR 0.43%

German Dax : CLOSED UP 5.68 POINTS  OR 0.05%
Paris Cac CLOSED DOWN 18.62POINTS OR 0.36%
Spain IBEX CLOSED DOWN 13.20 POINTS OR 0.14%

Italian MIB: CLOSED UP:  9.60 POINTS OR 0.05%/

 

 

WTI Oil price; 61.77 1:00 pm;

Brent Oil: 71.34 1:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    66.11  THE CROSS HIGHER BY .05 ROUBLES/DOLLAR (ROUBLE LOWER by 5 BASIS PTS)

USA DOLLAR VS TURKISH LIRA:  5.4021 PER ONE USA DOLLAR.

TODAY THE GERMAN YIELD RISES +.43 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:62.78

 

BRENT:72..76

USA 10 YR BOND YIELD: 3.20%..deadly….

 

USA 30 YR BOND YIELD: 3.43%/..deadly…

 

EURO/USA DOLLAR CROSS: 1.14078 ( up 24 BASIS POINTS)

USA/JAPANESE YEN:113.20 UP .040 (YEN DOWN 4 BASIS POINTS/ .

 

USA DOLLAR INDEX: 96.54 DOWN 20 cent(s)/

The British pound at 5 pm: Great Britain Pound/USA: 1.3042 UP 87 POINTS FROM YESTERDAY

the Turkish lira close: 5.3138

the Russian rouble:  66.06 UP 0.12 Roubles against the uSA dollar.( UP 12 BASIS POINTS)

 

Canadian dollar: 1.3108 UP 0 BASIS pts

USA/CHINESE YUAN (CNY) : 6.9257  (ONSHORE)

USA/CHINESE YUAN(CNH):  6.9129 (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.44%

 

The Dow closed  UP 190.87 POINTS OR 0.28%

NASDAQ closed DOWN 28,14  points or 0% 4.00 PM EST


VOLATILITY INDEX:  19.86  CLOSED UP  0.35

LIBOR 3 MONTH DURATION: 2.589%  .LIBOR  RATES ARE RISING/

 

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

TRADING IN GRAPH FORM FOR THE DAY

 

Breakevens & Black Gold Battered As Stocks Rally On Ultra-Low Volumes

Ahead of tonight’s results, this seemed appropriate…

 ..

 

 

 

Another afternoon-session buying spree saved China stocks overnight…

 

After going nowhere yesterday, European stocks dropped and popped today to end modestly negative on the week…

 

US Futures show that while yesterday’s cash open was panic-selling in Nasdaq, today was panic-buying… weakness towards the end of the day was quickly assailed with a manic-bid into the uncertainty of tonight’s results…

 

On the day, early gains evaporated into the last hour.., then the ubiquitous FOMO buying panic hit (despite a huge MOC sell order)…

Look at those charts – what a farce!!

Volume was abysmal – 60% below average!

But that didn’t stop the machines swinging from a massive negative TICK to a huge positive one…

The Dow managed to limp back above its 100DMA…

 

FANG stocks rolled over after a strong open…

 

Financials continued to outperform the market into the midterms…

Despite…

zerohedge@zerohedge

just a few hours until she is in charge of the banks

 

Treasury yields were higher across the curve (but the long-end outperformed – trading in an extremely narrow range all day)…

 

Crushing the yield curve…

 

Of significant note in bond-land is the collapse in short-dated breakevens…

It’s another signal from the weakening breakeven market, as well as other markets, that investors are concerned the Federal Reserve is too tight. This week’s meeting is a chance for the central bank to mention breakevens and changing inflation expectations. Will they note that this year’s gains have now disappeared for five-year breakevens? After all, in their last statement, they had noted five-year breakevens had “ticked up” between their August and September meetings.

Bloomberg’s Sebastian Boyd notes that this deflationary impulse seems to be all about oil…

Seems he is right (a linear regression of the 5y5y breakeven rate against the generic 6th WTI contract, gives an r-squared of 0.826 over the past five years).

The Dollar leaked lower on the day…

 

Offshore Yuan went nowhere today…

 

Cryptos continue to rise on the week with Ripple surging along with Bitcoin Cash (Bitcoin vol is now at a record low)…

 

Copper continued its slide and despite dollar weakness, the entire commodity space fell on the day…

 

WTI Crude crashed to a $61 handle and 7-month lows, down 20% from its October highs and officially in a bear market…

The Yuan peg to gold continues at around 8500…

We give the last word to Gluskin-Sheff’s David Rosenberg who has an ominous historical reminder…

David Rosenberg@EconguyRosie

Word to the wise. We have endured two 10% corrections in the same year for all three major averages. This has only happened in 1973, 1974, 1987, 2000, 2001, 2002 and 2008. All but 1987 signalled recession, but that wasn’t a pretty picture either.

 

 

 

 

market trading

David Stockman sees the S and P fair value way below 2000 and thus sees a 40% correction
(courtesy David Stockman)

“No One Has Outlawed Recessions” Stockman Sees S&P Fair Value “Way Below 2000”

“If you’re a rational investor, you need only two words in your vocabulary: Trump and sell,” says David Stockman, former President Reagan’s Office of Management and Budget director, warning that a 40% stock market plunge is closing in on Wall Street.

While not the first time Stockman has warned of a catastrophe waiting to happen in markets, he told CNBC’s Futures Now that, after the worst monthly loss for global stocks since the financial crisis, that the early rumblings of that epic downturn are finally here.

“No one has outlawed recessions. We’re within a year or two of one,”  adding that:

“fair value of the S&P going into the next recession is well below 2000, 1500 – way below where we are today.”

According to Stockman, Trump’s efforts to get the Fed to stop hiking rates from historical lows is misdirected…

“He’s attacking the Fed for going too quick when it’s been dithering for eight years. The funds rate at 2.13 percent is still below inflation,”

Specifically, Stockman notes the trade war is a major reason why investors should brace for a prolonged sell-off.

“The trade war is not remotely rational,” he said.

If the dispute worsens, it “is going to hit the whole goods economy with inflation like you’ve never seen before because China supplies about 30 percent of the goods in the categories we import.”

Stockman ends on an even more ominous note:

“We’re going to be in a recession, and we’re going to have another market correction which will be pretty brutal,” Stockman said.

“[Trump]’s playing with fire at the very top of an aging expansion.”

For now, all traders can think about is tomorrow – but we suspect Stockman will be right in the end.

END

 

market data/

 

USA economic/general stories
Two problems here:
1. Millennials just do not want to get married
2 Competition from Amazon
killed off Davids..the uSA’s largest bridal chain as they prepare for bankruptcy after skipping a debt payment
(courtesy zerohedge)

America’s Largest Bridal-Chain Prepares For Bankruptcy After Skipped Debt Payment

After missing an October interest payment on $270 million in unsecured notes, America’s largest bridal-chain is making preparations to file bankruptcy if they can’t reach an out-of-court deal with creditors, according to Bloombergciting people with knowledge of the matter.

At issue is an overall debt load of around $760 million which carries a pre-negotiated restructuring plan. The wedding-gown merchant has less than two weeks before their next interest payment is due on Nov. 14.

As we reported last month, the missed payment following failed negotiations with three creditors set into motion a 30-day grace period with debtholders before the company is in default. Active discussions are said to still be underway and the situation “remains fluid,” according to Bloomberg‘s sources.

David’s and three creditor groups have gone back and forth with out-of-court restructuring proposals for weeks. Early discussions contemplated a rights offering backed by existing noteholders including Solace Capital Partners and Oaktree Capital Group, a majority bond and loan holder, the people said. Those talks broke down after the financing from the funds did not materialize and creditors failed to agree on the pricing and terms of the proposed new debt structure, the people said. –Bloomberg

“We are engaged in discussions with our lenders in order to reach a mutually agreed-upon resolution designed to strengthen our balance sheet so we can increase our financial flexibility and further invest in our business,” a David’s rep told Bloomberg over email.

David’s has no plans for major store closures or liquidations, “and the business would keep operating regardless of a court filing.”

The bridal-chain missed an October 15 payment on its 7.75% unsecured notes which are due in 2020 at the request of creditors in order to allow negotiations over restructuring the company’s debt could continue. The talks reportedly include the company and advisers for both loan and bondholders.

Based in Conshohcken, Pennsylvania and owned by private equity firm Clayton Dubilier & Rice since 2012, David’s has been working with Evercore investment bank and legal counsel Debovoise & Plimpton LLP. Oaktree, which holds the lion’s share of the company’s $491 million unsecured and term notes, is working with financial adviser Moelis & Co. on the deal, and is represented by law firm Paul Weiss Rifkind Wharton & Garrison LLP.

The company suffered from issues during a 2016 website redesign that dropped the search rankings of some products – while competition with Amazon and other online retailers has also added to the company’s woes – resulting in a 30% drop in earnings since 2012.

David’s – which introduced new CEO Scott Key earlier this year, has struggled for a long time with declining sales and a troubled balance sheet. Analysts see a specialty retailer beset by problems in its sector, capital structure and of the company’s own making. Increasing competition and “casualization” are challenging the wedding sector, according to Moody’s.

One proposed scenario that could keep things out of bankruptcy court would include a paydown of David’s existing bank debt with the use of cash from a rights offering backed by existing noteholders, in conjunction with an extension of the company’s bank debt. Existing bondholders are probably looking at taking equity as part of the deal.

An in-court restructuring, on the other hand, would probably leave bond holders with a little more than the currently very depressed market value of their holdings. Senior lenders might be offered equity in lieu of being made fully whole on their investments.

However, we wonder what the long-term viability of this entire business is given the ongoing collapse in interest (among Millennials now) in getting married at all…

END

Housing is such an important component in GDP calculations for the USA.  Mish Shedlock gives a detailed look at the housing market where housing is now the least affordable in a decade

(courtesy Mishtalk/Mish Shedlock)

American Dream Re-Collapses: US Housing Least Affordable In A Decade

Authored by Mike Shedlock via MishTalk,

It takes 23.6% of median income to make the monthly payment on the average-priced home.

In it’s latest report, the Black Knight Mortgage Monitor confuses affordability with payment stress and fails to make an apples-to-apples comparison when determining homes are “more affordable” today than in the period 1995-2003.

Nonetheless, the report is interesting for what it does show. I am passing on a number of suggestions to them as to how to make the report better.

Mortgage Monitor Bullet Points

  • It now takes 23.6% of median income to make the monthly payment on the average-priced home, making housing the least affordable it’s been in nearly a decade.
  • The monthly principal and interest payment needed to purchase the average-priced home has seen a $190 per month increase since the beginning of 2018, an 18% jump.
  • Despite the recent tightening, housing on average across the U.S. remains more affordable than the long term benchmark (1995–2003) of 25.1%.
  • Even if home prices were to stay flat, another 0.50% increase in interest rates would make homes less affordable than long term norms.

California Least Affordable

  • California is the least affordable state in which to live, requiring 39% of the median income in the state to purchase the average-priced home.
  • Even more noteworthy is the increasing delta between affordability today and California’s own long-term averages.
  • It currently requires 7.5% more of the median income to purchase the average-priced California home today (39.3% vs. 31.8%) that it did from 1995-2003.
  • While that payment-to-income ratio is still far more affordable than the 59% peak in 2006, symptoms of California’s tight affordability environment appear to be emerging.

Affordability Today vs Historical Average

  • 7 of the 10 states that are now less affordable than long-term averages have seen their rate of home price growth slow over the past six months.
  • At the start of 2018, just two states – California and Hawaii – were less affordable than their long-term norms.
  • As of today, 10 states have passed those benchmarks and another six are within 1.0% of long-term affordability levels.
  • Hawaii is the least affordable state compared to long-term norms, requiring nearly 8% more of median income to make the payment on the average home than long-term averages.

Interesting but Flawed

The stats are interesting but there are a number of fundamental flaws in the reporting.

Median income and payments should be compared to median home prices, preferably by metro-area, but minimally by state.

A few charts will highlight the issues.

Real Median Income vs Sales Price Nationally

Real Median Income in California vs Sales Price in Western Region

I do not have payment data but the decline in interest rates will not offset the rise in home prices.

My charts are flawed as well. I used new home prices even though existing home prices would be a better fit because Fred history on existing sales only dates to September of 2017.

Let’s try one more thing.

Real Median Income vs Case-Shiller 20-City Index

Understanding Affordability

To understand where affordability really is, Black Knight needs to look at real median household income vs home prices of repeat sales of the same house.

Real median household income has been flat. Home prices sure haven’t been.

It’s the net of rising real incomes vs price (not payment) on the same housethat determines whether or not homes are more affordable.

Using nominal wages to calculate “affordability” is a mistake. The CPI is hugely understated because it does not include home prices.

Those in school or paying for their own medical insurance would also dispute the CPI.

And what about rising property taxes?

Affordability vs Payment Stress

Consider a person who bought a house 20 years ago with a 30-year mortgage and refinanced lower three times without pulling any cash out.

Such a house is not more affordable today in any realistic sense even though payments by the original homeowner are less.

That person has more money to spend (and less mortgage payment stress), not because incomes are up, but because their payment fell (assuming property taxes did not rise too rapidly).

Similarly, a person in a variable rate mortgage in a rising rate environment has more payment stress while there is less payment stress in a falling rate environment.

In this sense, Black Knight also confuses affordability with decreasing mortgage stress on existing homeowners.

Addendum

Real Estate Decoded provided an Inflation-Adjusted – Case-Shiller Home Price Index

Compare the following charts to the Black Knight statement: “Despite the recent tightening, housing on average across the U.S. remains more affordable than the long term benchmark (1995–2003) of 25.1%.

Inflation Adjusted Case Shiller USA

Inflation Adjusted Case Shiller 20 Cities + USA

Click on either chart to expand.

Real median household incomes have been stagnant. Real home prices haven’t.

Lower mortgage payments of existing homeowners do not make homes more affordable.

The Fed blew another housing bubble. Once again, the size of the bubble varies city to city.

I would be very interested in another take on this by Black Knight along the lines suggested above.

 

 

SWAMP STORIES

SWAMP STORIES COURTESY OF THE KING REPORT

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

Dems’ lead on generic ballot [Politico poll of registered voters] shrinks to 3 points: poll
Rasmussen, the ex-Democratic pollster, has been one of the most accurate pollsters over the past several years.  His latest poll oflikely voters shows the GOP with a 1% advantage in the Generic Ballot.  This, of course, is a huge discrepancy with MSM polls.  The Rasmussen Poll is at the following link:
Early Voter Turnout Surges as Republicans Hold Lead in Battleground States
House Democrats in position to gain but still face hurdles — CBS News poll
[Registered voters poll, not ‘likely voters’, biased toward Dems, yet Dems are only +3 in Gen Ballot]
Registered Voter Polls Will (Usually) Overrate Democrats
@nytimes: Lost in the talk about a Democratic “blue wave” against President Trump and Republicans is the fact that, for many Americans, daily life is good and the economy is working
WaPo: A question for Washington pollsters: How wrong must you be to never work again?
“The level of accountability in our industry is lower than it should be,” said Mark Mellman, a leading Democratic pollster… [Many poll sponsors don’t want accuracy; they want to form opinions.]   https://www.washingtonpost.com/lifestyle/style/how-wrong-do-you-have-to-be-in-washington-to-never-work-again/2014/08/20/8f2adc18-2717-11e4-86ca-6f03cbd15c1a_story.html
After the early decline, which bottomed near the end of the first hour of trading, the S&P 500 Index jumped 18 handles in 45 minutes.  But, that was it.  Traders and stocks then went inert for three hours. 
Stocks surged to session highs into the VIX Fix.  The afternoon rally continued until an 11-handle S&P 500 decline appeared during the first half of the final hour of trading.  The index recovered six handles of the loss on a rally into the close.  Some pundits attributed the rally to the probability that the GOP would keep the House and extend its share of Senate seats.
In 1980, polls showed that Carter would easily defeat Reagan.  This is similar to polls showing that Democrats should easily capture the house today.  Just like in 1980, US stocks declined sharply during the second half of October.  However, stocks rallied robustly in the days before the election in 1980.  Sound familiar?  When Reagan won in 1980, stocks peaked on November 5, 1980, the day after the election.  If the GOP retains the House, stocks could peak soon thereafter.
The rally in the days before and into the 1980 was attributed to large investors’ private polling.
From yesterday’s King Report: Rumors of private polling could impact trading.
@realDonaldTrump: So funny to see the CNN Fake Suppression Polls and false rhetoric. Watch for real results Tuesday. We are lucky CNN’s ratings are so low. Don’t fall for the Suppression Game. Go out & VOTE. Remember, we now have perhaps the greatest Economy (JOBS) in the history of our Country!
    Law Enforcement has been strongly notified to watch closely for any ILLEGAL VOTING which may take place in Tuesday’s Election (or Early Voting). Anyone caught will be subject to the Maximum Criminal Penalties allowed by law. Thank you!
 
Justice Department Sends Observers to Polls across 19 States
 
[Dem pollster] The Zogby Poll®: A majority of Hispanic respondents support the deployment of troops to the border to stop migrant caravan; A majority of all Americans support troops at the border; Half of women agree with the deployment of troops…
 
@seanmdav: In the last 34 elections, the winner of the House “popular vote” (which isn’t really a thing, but that’s another issue for another day) has lost seats in 15 of those elections. It’s an entirely common occurrence which is a feature, not a bug of our system.
 
NBC [CNN and Fox, too] pulls Trump ad linking immigration and crime ahead of elections
 
The liberal Politico: Even if Democrats win, Trump has them beat on the courts
Democrats could win the House on Tuesday. They may recapture the Senate and White House in 2020. But they’re losing the federal courts for the long term, as President Donald Trump is rapidly ensconcing a conservative judiciary that will have the power to knock down liberal policies for decades to come…
 
@gatewaypundit: Desperate John Brennan [Ex CIA Chief] Begs People to Defeat Trump-Supporting Candidates… So He Doesn’t Go to Jail    
 
Kavanaugh report’s biggest bombshells: Grassley probe reveals details behind mistaken identity claims, more – Committee investigators are in the process of trying to determine if Ford friend Monica McLean, a former FBI employee, tampered with a witness…Keyser reported that McLean and others contacted her to suggest she “clarify” her account…
I HOPE TO SEE YOU ON WEDNESDAY IF ALL GOES WELL

Harvey

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