AUGUST 5/CHINA DEVALUES WHICH SENDS THE DOLLAR YUAN EXCHANGE PAST 7:1 AND THAT WILL SEND A TSUNAMI OF DEFLATION THROUGHOUT THE GLOBE//GOLD RISES $18.85 TO $1465.55//SILVER ADVANCES 12 CENTS AS THE BANKERS ARE VERY NERVOUS OF A BANKING DEFAULT IN SILVER// AND FOR MATTER IN GOLD AS WELL//A MASSIVE 20,436 EFP CONTRACTS WERE ISSUED BY THE BANKERS IN GOLD IN A DESPERATE ATTEMPT TO CONTAIN THE PRICE//MASSIVE PROTESTS IN HONG ON SAT, SUN AND TODAY//IRAN INTERCEPTS ANOTHER OIL VESSEL//THE USA LOOKS LIKE THEY ARE GOING TO HAVE A NAVAL BLOCKADE ON VENEZUELA//INDIA NO LONGER ACCEPTS THE 72 YEAR AGREEMENT OF KASHMIR AND IT LOOKS LIKE THEY ARE GOING TO INVADE//THIS COULD BE A FULL SCALE WAR WITH PAKISTAN//TWO MAJOR SHOOTINGS IN THE USA OVER THE WEEKEND//MORE SWAMP STORIES FOR YOU TONIGHT//

I AM PUBLISHING NOW

IF ANY CHANGES IN GLD/SLV I WILL ADJUST MY COMMENTARY WITH THE CORRECT NUMBERS.

 

GOLD:$1464.55  UP $18.85(COMEX TO COMEX CLOSING

 

 

 

 

 

 

 

Silver: $16.39 UP 12 CENTS  (COMEX TO COMEX CLOSING)/

 

 

 

 

 

 

 

 

 

 

Closing access prices:

 

 

Gold : $1462.20

 

silver:  $16.40

it sure looks like we have strong entities ( or a sovereign) willing to take on the bankers as they are taking their paper gold/silver contracts are turning them into real metal.
I can only imagine the huge gain in open interest on our dual oi’s
i) the comex
ii) EFP
Also remember that gold and silver will be strong in the physical time zones and fall off in paper time zones
physical time zones:  in eastern time
9:00 pm through to 3 am
8:00 am through til 12 pm
paper time zones:
2: pm through til 9:00 pm

we are coming very close to a commercial failure!!

 

 

 

 

 

 

COMEX DATA

 

 

 

 

 

JPMorgan has been receiving gold with reckless abandon and sometimes supplying (stopping)

today RECEIVING 137/495

CONTRACT: AUGUST 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,445.600000000 USD
INTENT DATE: 08/02/2019 DELIVERY DATE: 08/06/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
072 C GOLDMAN 5
118 H MACQUARIE FUT 80
657 C MORGAN STANLEY 2
661 C JP MORGAN 137
686 C INTL FCSTONE 1 20
690 C ABN AMRO 476 16
737 C ADVANTAGE 11 27
800 C MAREX SPEC 2 7
880 H CITIGROUP 204
905 C ADM 2
____________________________________________________________________________________________

TOTAL: 495 495
MONTH TO DATE: 4,289

 

NUMBER OF NOTICES FILED TODAY FOR  JULY CONTRACT: 495 NOTICE(S) FOR 249500 OZ (1.539 tonne

TOTAL NUMBER OF NOTICES FILED SO FAR:  4289 NOTICES FOR 428,900 OZ  (13.34 TONNES)

 

 

 

SILVER

 

FOR JULY

 

 

66 NOTICE(S) FILED TODAY FOR 330,000  OZ/

 

total number of notices filed so far this month: 1017 for   5,085,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE :  $ 11,714 UP 802 

 

 

 

Bitcoin: FINAL EVENING TRADE: $ 11785 UP 856

 

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IN SILVER THE COMEX OI ROSE BY A SMALL  SIZED 322 CONTRACTS FROM 237,568 UP TO 237,890 WITH THE 10 CENT GAIN IN SILVER PRICING AT THE COMEX.

TODAY WE ARRIVED CLOSER TO  AUGUST’S 2018  RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.

WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY 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 GOOD SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:,

0 FOR AUGUST, 1181 FOR SEPT, AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  1181 CONTRACTS. WITH THE TRANSFER OF 31181 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 1181 EFP CONTRACTS TRANSLATES INTO 5.905 MILLION OZ  ACCOMPANYING:

1.THE 10 CENT GAIN IN SILVER PRICE AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR DELIVERY IN THE LAST 12 MONTHS:

JUNE/2018. (5.420 MILLION OZ);

FOR JULY: 30.370 MILLION OZ

FOR AUG., 6.065 MILLION OZ

FOR SEPT. 39.505 MILLION  OZ S

FOR OCT.2.525 MILLION OZ.

FOR NOV:  A HUGE 7.440 MILLION OZ STANDING  AND

21.925 MILLION OZ FINALLY STAND FOR DECEMBER.

5.845 MILLION OZ STAND IN JANUARY.

2.955 MILLION OZ STANDING FOR FEBRUARY.:

27.120 MILLION OZ STANDING IN MARCH.

3.875 MILLION OZ STANDING FOR SILVER IN APRIL.

18.845 MILLION OZ STANDING FOR SILVER IN MAY.

2.660 MILLION OZ STANDING FOR SILVER IN JUNE//

22.605 MILLION OZ INITIAL STANDING FOR JULY

6.880 MILLION OZ INITIALLY STANDING IN AUGUST.

 

WE HAD CONSIDERABLE COVERING OF SHORTS AT THE SILVER COMEX ON FRIDAY ..AND VERY LITTLE SPREADING ACCUMULATION.

 

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

4606 CONTRACTS (FOR 3 TRADING DAYS TOTAL 4606 CONTRACTS) OR 23.03 MILLION OZ: (AVERAGE PER DAY: 1535 CONTRACTS OR 7.676 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF JULY:  17.13 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 3.28% 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.

 

RESULT: WE HAD A SMALL SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 326, WITH THE 10 CENT GAIN IN SILVER PRICING AT THE COMEX /FRIDAY... THE CME NOTIFIED US THAT WE HAD A  GOOD SIZED EFP ISSUANCE OF 1181 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER (SEE COMEX DATA) .

 

TODAY WE GAINED A GOOD  SIZED: 1507 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: 

i.e 1181 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 326  OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 10 CENT GAIN IN PRICE OF SILVER AND A CLOSING PRICE OF $16.27 WITH RESPECT TO FRIDAY’S TRADING. YET WE STILL HAVE A STRONG AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY!! 

 

 

In ounces AT THE COMEX, the OI is still represented by JUST OVER 1 BILLION oz i.e. 1.189 BILLION OZ TO BE EXACT or 170% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH/ THEY FILED AT THE COMEX: 66 NOTICE(S) FOR 330,000 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:  A HUGE 39.505 MILLION OZ./ OCTOBER: 2,520,000 oz  NOV AT 7.440 MILLION OZ./ DEC. AT 21.925 MILLION OZ   JANUARY AT  5.825 MILLION OZ.AND FEB 2019:  2.955 MILLION OZ/ MARCH: 27.120 MILLION OZ/  APRIL AT 3.875 MILLION OZ/ A MAY:  18.845 MILLION OZ ..JUNE 2.660 MILLION OZ//JULY 22.605 MILLION OZ/ & AUGUST 6.880 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 COMEX OPEN INTEREST ROSE BY AN ATMOSPHERIC AND CRIMINALLY SIZED 13,927 CONTRACTS, TO 586,247 ACCOMPANYING THE  $25.20 PRICING GAIN WITH RESPECT TO COMEX GOLD PRICING FRIDAY// /THE SPREADING ACCUMULATION HAS NOW COMMENCED FOR SILVER..AS THE LIQUIDATION PHASE FOR COMEX OI GOLD HAS NOW STOPPED

 

 

 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG SIZED 7602 CONTRACTS:

 

AUGUST 2019: 0 CONTRACTS, DEC>  20,436 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 586,247,,.  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 ATMOSPHERIC AND CRIMINALLY SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 34,363 CONTRACTS (AND I BELIEVE A NEW RECORD..OR CLOSE TO IT… FOR TOTAL OI GAIN): 13,927 CONTRACTS INCREASED AT THE COMEX  AND 20,436 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 34,363 CONTRACTS OR 3,436,300 OZ OR 106.88 TONNES.  YESTERDAY WE HAD A STRONG GAIN OF $25.40 IN GOLD TRADING….AND WITH THAT GOOD GAIN IN  PRICE, WE  HAD A GIGANTIC GAIN IN GOLD TONNAGE OF 106.88  TONNES!!!!!! THE BANKERS WERE SUPPLYING INFINITE SUPPLIES OF SHORT GOLD COMEX PAPER.

I WROTE THE FOLLOWING ON FRIDAY:

“WE ARE NOW OUT OF THE LIQUIDATION PHASE IN GOLD AS WE MORPH INTO THE ACCUMULATION PHASE FOR SILVER. ALSO REMEMBER THAT WE DID NOT GET OUR BIG GAIN IN PRICE UNTIL AFTER THE COMEX CLOSED…SO EXPECT A HUGE GAIN IN TOTAL OI WITH MONDAY’S READING.”

I GUESS I WAS RIGHT ON THAT ONE!!~

 

MODUS OPERANDI OF THE CORRUPT BANKERS AS TO HOW THEY HANDLE THEIR SPREAD OPEN INTERESTS:

 

FOR NEWCOMERS, HERE IS THE MODUS OPERANDI OF THE CORRUPT BANKERS WITH RESPECT TO THEIR SPREAD/TRADING.

 

 

AS I HAVE MENTIONED IN PREVIOUS COMMENTARIES:

 

 

“AS YOU WILL SEE, THE CROOKS WILL NOW SWITCH TO SILVER AS THEY INCREASE THE OPEN INTEREST FOR THE SPREADERS. THE TOTAL COMEX GOLD OPEN INTEREST WILL RISE FROM NOW ON UNTIL ONE WEEK PRIOR TO FIRST DAY NOTICE AND THAT IS WHEN THEY START THEIR CRIMINAL LIQUIDATION.

HERE IS HOW THE CROOKS USED SPREADING AS WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF AUGUST HEADING TOWARDS THE VERY ACTIVE DELIVERY MONTH OF SEPTEMBER FOR SILVER.

AS I HAVE MENTIONED IN PREVIOUS COMMENTARIES, HERE IS THE BANKERS MODUS OPERANDI:

YOU WILL ALSO NOTICE THAT THE COMEX OPEN INTEREST IS STARTING TO RISE IN THIS NON ACTIVE MONTH OF AUGUST BUT SO IS THE OPEN INTEREST OF SPREADERS. THE OPEN INTEREST IN SILVER WILL CONTINUE TO RISE UNTIL ONE WEEK BEFORE FIRST DAY NOTICE OF AN UPCOMING ACTIVE DELIVERY MONTH (SEPT), AND THAT IS WHEN THE CROOKS SELL THEIR SPREAD POSITIONS BUT NOT AT THE SAME TIME OF THE DAY.  THEY WILL USE THE SELL SIDE OF THE EQUATION TO CREATE THE CASCADE (ALONG WITH THEIR COLLUSIVE FRIENDS) AND THEN COVER ON THE BUY SIDE OF THE SPREAD SITUATION AT THE END  OF THE DAY. THEY DO THIS TO AVOID POSITION LIMIT DETECTION. THE LIQUIDATION OF THE SPREADING FORMATION CONTINUES FOR EXACTLY ONE WEEK AND ENDS ON FIRST DAY NOTICE.” 

 

 

 

 

 

 

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF AUGUST : 48,969 CONTRACTS OR 4,896,900 oz OR 152.31 TONNES (3 TRADING DAY AND THUS AVERAGING: 16,323 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 3 TRADING DAY IN  TONNES: 152.31 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2018, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 3555 TONNES

THUS EFP TRANSFERS REPRESENTS 152.31/3550 x 100% TONNES =4.29% OF GLOBAL ANNUAL PRODUCTION

 

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     3663.57  TONNES

JANUARY 2019 TOTAL EFP ISSUANCE;   531.20 TONNES

FEB 2019 TOTAL EFP ISSUANCE:             344.36 TONNES

MARCH 2019 TOTAL EFP ISSUANCE:       497.16 TONNES

APRIL 2019 TOTAL ISSUANCE:                 456.10 TONNES

MAY 2019 TOTAL ISSUANCE:                    449.10 TONNES

JUNE 2019 TOTAL ISSUANCE:                   642.22 TONNES

JULY 2019: TOTAL ISSUANCE:                    591.56 TONNES

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 HUMONGOUS SIZED INCREASE IN OI AT THE COMEX OF 13,927 WITH THE  PRICING GAIN THAT GOLD UNDERTOOK ON FRIDAY($25.40)) //.WE ALSO HAD  A HUGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 20,436 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 20,436 EFP CONTRACTS ISSUED, WE  HAD AN ATMOSPHERIC  AND CRIMINALLY SIZED GAIN OF 34,363 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

20,436 CONTRACTS MOVE TO LONDON AND 13,927 CONTRACTS INCREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 106.88 TONNES). ..AND THIS HUGE INCREASE OF  DEMAND OCCURRED WITH THE STRONG GAIN IN PRICE OF $25.40 WITH RESPECT TO YESTERDAY’S TRADING AT THE COMEX. WE HAVE NOW COMMENCED WITH SPREADING ACCUMULATION OF SILVER OI CONTRACTS AS WE HAVE ENTERED THE NON ACTIVE MONTH OF AUGUST. SPREADING LIQUIDATION IN GOLD HAS STOPPED.

 

 

 

 

we had:  495 notice(s) filed upon for 49,500 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

WITH GOLD UP $18.85 TODAY//(COMEX-TO COMEX)

HUGE CHANGES IN GOLD INVENTORY AT THE GLD

a) late this morning: an addition of 2.94

 

INVENTORY RESTS AT 830.76 TONNES

 

 

 

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

SLV/

 

WITH SILVER UP 12 CENTS TODAY:

 

A SMALL  CHANGES IN SILVER INVENTORY AT THE SLV:

 

/INVENTORY RESTS AT 356.573 MILLION OZ.

AND THIS WAS TO PAY FOR FEES.

 

 

 

end

 

OUTLINE OF TOPICS TONIGHT

 

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in SILVER ROSE BY A SMALL SIZED 322 CONTRACTS from 237,568 UP TO 237,890 AND 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…..THE SPREADERS HAVE COMMENCED THEIR ACCUMULATION OF OPEN INTEREST CONTRACTS IN SILVER AND STOPPED THE LIQUIDATION OF THE SPREADERS IN GOLD

 

 

 

 

EFP ISSUANCE: 

OUR CUSTOMARY MIGRATION OF COMEX LONGS CONTINUE TO MORPH INTO LONDON FORWARDS  AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:

 

FOR JULY: 0 CONTRACTS FOR AUGUST: 0, FOR SEPT. 1181  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1181 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 322  CONTRACTS TO THE 1181 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A STRONG SIZED GAIN OF 1503 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 7.535 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 7.475 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.,  7.440 MILLION OZ FINALLY STANDING IN NOVEMBER.  21.925 MILLION OZ STANDING IN DECEMBER , 5.845 MILLION OZ STANDING IN JANUARY. 2.955 MILLION OZ STANDING IN FEBRUARY,  27.120 MILLION OZ FOR MARCH., 3.875 MILLION OZ FOR APRIL  18.765 MILLION OZ FOR MAY  NOW 2.660 MILLION OZ FOR JUNE WITH JULY AT 22.605 MILLION OZ; AND AUGUST:  6.880 MILLION OZ  STANDING SO FAR.

 

 

RESULT: A SMALL SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE 10 CENT GAIN IN PRICING THAT SILVER UNDERTOOK IN PRICING// FRIDAY. WE ALSO HAD A STRONG SIZED 1181 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR THIS MONTH, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

BOTH THE SILVER COMEX AND THE GOLD COMEX ARE IN STRESS AS THE BANKERS SCOUR THE BOWELS OF THE EXCHANGE FOR METAL

 

 

(report Harvey)

.

 

2 ) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

I)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 46.36 POINTS OR 1.61%  //Hang Sang CLOSED DOWN 767.26 POINTS OR 2.85%   /The Nikkei closed DOWN 767.26 POINTS OR 2.85%//Australia’s all ordinaires CLOSED DOWN 1.98%

/Chinese yuan (ONSHORE) closed DOWN  at 7.0339 /Oil DOWN TO 55.02 dollars per barrel for WTI and 61.15 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.0339 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.0840 TRADE TALKS STALL//YUAN LEVELS NOW PAST  7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED// AND NOW CHINA RETALIATES!!  : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25% AND NOW ANOTHER 10% RISE IN SEPTEMBER

 

 

3A//NORTH KOREA/ SOUTH KOREA

 

3b) REPORT ON JAPAN

3C  CHINA/HONG KONG

I)SATURDAY/HONG KONG

40,00 civil servants rally in Hong Kong ahead of a city wide strike

(COURTESY EPOCH TIMES/EVA FU)

ii)Hong Kong/Saturday

Hong Kong police fire tear gas as the peaceful protest turns chaotic
(zerohedge)

iii)Sunday/Hong KongDespite a crippling mass strike, Lam states that she will not resign.

(zerohedge)

iv)Monday Hong Kong

Violent chaos in Hon Kong on Monday: police stations set on fire and massive citywide strikes paralyzed the city.  The Hong Kong dollar vs USA collapses as dollars flee both Hong Kong and Mainland China as they all now a massacre will commence upon them from the Mainland authorities..

(zerohedge)

v)MONDAY/Mainland China

Deadly!! China undergoes a currency war by causing ii’ts yuan to crash past 7 :1. Beijing suspends all USA agriculture imports.  Global markets tumble as this will force other nations to lower their currency as this is a race to the bottom
(zerohedge)
vi)Trump responds angrily to China’s manipulation of their currency.  China denies it is a competitive devaluation. There is now no question that China has started a tsunami  deflationary wave which will create chaos throughout the world as competitive devaluations will be the name of the game.(zerohedge)vii)Michael Snyder is exactly correct on his interpretation of events in Hong Kong and China this morning.  China is very angry at the USA and things will only deteriorate.(courtesy Michael Snyder

4/EUROPEAN AFFAIRS

i)FRANCE

A superb commentary from Milliere (Gatestone) on the Islamization of France. France is becoming another Sweden with many no go zones. He also explains why the Jews are leaving France on a one way ticket to Tel Aviv. France is disintegrating before our eyes

(Gatestone/Milliere)

ii)GERMANY

The far right Afd party is set to defeat Merkel’s CDU in regional elections next month

(zerohedge)

iii)UK/HSBC

Massively short in the precious metals, strangely John Flint, CEO of HSBC is abruptly ousted..profit outlook plunges
(zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Iran

Iran seizes another foreign vessel in the Strait of Hormuz.  Iran is crippled as it cannot sell its oil

(zerohedge)

6.Global Issues

 

7. OIL ISSUES

We have been pointing out to you the continual lousy returns on shale in the USA.  The lower price has caused a shale meltdown
(courtesy Nick Cunningham/OilPrice.com)

8 EMERGING MARKET ISSUES

i)Venezuela

It sure looks like Trump will engage in a full naval blockade of Venezuela despite the presence of China and Russia in the country,’

Looks very ominous

(zerohedge)

ii)INDIA/PAKISTAN

Kashmir has been a disputed territory since 1947. The 3 area is under control by:

i) Indian administered Kashmir  ( J and K)

2. Pakistani administered Kashmir

3. Chinese controlled area

now India has stripped the Muslim majority region of its autonomy as troops move in. This puts Pakistan on the defensive and they will no doubt take action.

(zerohedge)

9. PHYSICAL MARKETS

i)Putin’s pledge to ditch the dollar is slowly being fulfilled.  The slowness is due to some of their use of the dollar in foreign transactions

(Bloomberg/GATA)

ii)The new head honcho of the Federal Reserve Bank of NY relieved two key players at the bank in May, Simon Potter, the head trader(all market operations) and Dzina, head of financial services group. Morale sank at the bank.  Seems that these two got out of line with Williams

(Bloomberg/GATA)

iii)THE FOLLOWING COMMENTARY FROM CHRIS POWELL IS A MUST MUST READ. HE EXPLAINS WHY THE TRADING OF GOLD AND SILVER IS DIFFERENT THESE PAST FEW MONTHS

( Chris Powell/GATA

iv)Currency wars begin as the yuan falls past 7 to one: the war is escalating!

(Bloomberg News/GATA)

v)Now we have risk that Trump will engage in dollar intervention trying to counter the yuan’s slide

(Bloomberg/GATA

vi)A must read.. Currency wars begin as China is intent on devaluing its currency to offset the effects of Trump’s new 10% tariff. This will send a deflationary tsunami across the globe as other nations will lower their currency in order to compete with China. China’s problem will be the mass exodus of dollars out of its country something that has already commenced due to the protests in Hon Kong.

(Ambrose Evans Pritchard/London Telegraph/GATA)

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

MARKET TRADING//USA

a)Market trading/THIS MORNING/USA

Gold spikes and the Dow crashes below 26,000// the 10 yr bond yield crashes to 1.77%

(zerohedge)

b)MARKET TRADING/USA/AFTERNOON

ii)Market data/USA

THE SERVICE SECTOR is much stronger to USA GDP than Mfg. Now the latest ISM service and Markit print is the lowest in 3 years. The key factor in this report is that business expectations plunged to a record low.  The Markit survey was bad but the ISM was horrible. Again Markit and ISM diverge.

(zerohedge/ISM Service/markit)

iii) Important USA Economic Stories

a)The homeless crisis now spreads in California to Orange county. It has doubled in two years.

(ZEROHEDGE)

b)Two major mass shootings over the weekend: On Saturday morning 20 dead and 26 injured in El Paso.  Then Saturday night in Dayton Ohio, 9 dead and 26 injured.

(zerohedge)

c)This is no surprise:  Trump overruled all of his advisers except Navarro before launching new China tarifs

(zerohedge)

iv) Swamp commentaries)

We should see the release of Bruce Ohr’s 302’s which will no doubt put light on the nefarious activities of the Dept of Justice and the FBI in the surveillance of Trump;’s team during the election

(zerohedge)

v) King report/Courtesy of Chris Powell of GATA which includes the major swamp stories.

 

LET US BEGIN:

 

 

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN INTEREST ROSE BY AN ATMOSPHERIC AND CRIMINALLY SIZED 13,927 CONTRACTS TO A LEVEL OF 586,247 ACCOMPANYING THE HUGE GAIN OF $25.20 IN GOLD PRICING WITH RESPECT TO FRIDAY’S // COMEX TRADING)

WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF JULY..  THE CME REPORTS THAT THE BANKERS ISSUED STRONG SIZED  TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 20,436 EFP CONTRACTS WERE ISSUED:

 FOR AUGUST; 0 CONTRACTS: DEC: 20,436   AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  20,436 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 OUR 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: 34,363 TOTAL CONTRACTS IN THAT 20,436 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A HUMONGOUS SIZED 13,927 COMEX CONTRACTS.  THE BANKERS SUPPLIED THE NECESSARY AND INFINITE AMOUNT OF SHORT PAPER IN GOLD TRYING TO CONTAIN THE PRICE RISE. 

 

NET GAIN ON THE TWO EXCHANGES ::  34,363 CONTRACTS OR 3,436,300 OZ OR 106.88 TONNES.

 

We are now in the  active contract month of AUGUST and here the open interest stands at 3373 CONTRACTS as we LOST 186 contract.  We had 221 notices filed yesterday so we SURPRISINGLY GAINED 35 contracts or AN ADDITIONAL 3500 oz of gold that will stand for delivery as these guys are going to try their luck and obtain metal on this side of the pond. Queue jumping returns to the gold comex.

 

The next non active month is September and here the OI FELL by 201 contracts DOWN TO 4039.  The next active delivery month is October and here the OI FELL by 213 contracts UP to 43,627.

 

 

TODAY’S NOTICES FILED:

WE HAD 495 NOTICES FILED TODAY AT THE COMEX FOR  49,500 OZ. (1.539 TONNES)

 

 

 

 

 

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And now for the wild silver comex results.

Total COMEX silver OI ROSE BY A SMALL SIZED 322 CONTRACTS FROM 237,568 UP TO 237,890 (AND CLOSER TO THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018.  THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S SMALL  OI COMEX GAIN OCCURRED WITH A 10 CENT GAIN IN PRICING.//FRIDAY.

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF AUGUST.  HERE WE HAVE 425 OPEN INTEREST STAND FOR DELIVERY WITH A LOSS OF 0 CONTRACTS.  WE HAD 66 NOTICES FILED YESTERDAY SO WE GAINED A FULL 66 CONTRACTS OR AN ADDITIONAL 330,000 OZ OF SILVER WILL STAND AT THE COMEX…. AND THESE GUYS REFUSED TO MORPH INTO A LONDON BASED FORWARD AS WELL AS NEGATING A FIAT BONUS. LET US WAIT AND SEE IF THEY ARE SUCCESSFUL IN OBTAINING PHYSICAL METAL ON THIS SIDE OF THE POND..  THE NEXT BIG ACTIVE DELIVERY MONTH AFTER AUGUST IS SEPT AND HERE THE OI FELL BY 1000 CONTRACTS DOWN TO 154,743 CONTRACTS. OCTOBER RECEIVED ANOTHER 33 CONTRACTS TO STAND AT 49.  NEXT ACTIVE DELIVERY MONTH IS DECEMBER AND HERE THE OI RISES BY 980 CONTRACTS UP TO 51,383

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 66 notice(s) filed for 330,000 OZ for the AUGUST, 2019 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY: 513,321  CONTRACTS//volumes heavy 

 

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  517,098  contracts//volumes heavy

 

 

 

 

 

INITIAL standings for  AUGUST/GOLD

AUGUST 5/2019

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
1999.99  OZ
hsbc
Deposits to the Dealer Inventory in oz NIL oz

 

 

 

Deposits to the Customer Inventory, in oz  

nil

 

No of oz served (contracts) today
495 notice(s)
 49,500 OZ
(1.539 TONNES)
No of oz to be served (notices)
2878 contracts
(287800 oz)
8.9518 TONNES
Total monthly oz gold served (contracts) so far this month
4289 notices
428900 OZ
13.34 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:

We had 0 kilobar entries

 

 

 

 

total dealer deposits: nil oz

total dealer withdrawals: nil oz

 

we had 0 deposit into the customer account

i) Into JPMorgan:  nil oz

 

ii) Into everybody else: 0  oz

 

 

 

 

total gold deposits: nil  oz

 

very little gold arrives from outside/

 Today:  zero amount  arrived   today

we had 1 gold withdrawal from the customer account:

i) Out of HSBC;  1999.99 oz

 

 

total gold withdrawals; 1999.99  oz

 

 

i) we had 0 adjustment today
FOR THE AUGUST 2019 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 495 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 137 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 0 notices by the squid  (Goldman Sachs)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the AUGUST /2019. contract month, we take the total number of notices filed so far for the month (4289) x 100 oz , to which we add the difference between the open interest for the front month of  AUGUST. (3373 contract) minus the number of notices served upon today (495 x 100 oz per contract) equals 716,900 OZ OR 22.29 TONNES) the number of ounces standing in this active month of AUGUST

Thus the INITIAL standings for gold for the AUGUST/2019 contract month:

No of notices served (4289 x 100 oz)  + (3373)OI for the front month minus the number of notices served upon today (495 x 100 oz )which equals 716,900 oz standing OR 22.29 TONNES in this  active delivery month of AUGUST.

We GAINED 35  contracts or an additional 3500 oz will NOT stand as these guys refused to  morph into London based forwards as well as negating a fiat bonus.

SURPRISINGLY LITTLE TO NO  GOLD HAS BEEN ENTERING THE COMEX VAULTS AND WE HAVE WITNESSED THIS FOR THE PAST YEAR!!  WE HAVE ONLY 16.013 TONNES OF REGISTERED (  GOLD OFFERED FOR SALE) VS 22.29  TONNES OF GOLD STANDING// JUDGING BY THE HUGE SIZE OF THE COMEX NOTICES FILED TODAY, IT LOOKS LIKE SOMEBODY IS WILLING TO TAKE ON THE CROOKS AT THE COMEX.

 

 

 

total registered or dealer gold:  514,823.353 oz or  16.013 tonnes 
total registered and eligible (customer) gold;   7,782,437.492 oz 242.06 tonnes

 

IN THE LAST 33 MONTHS 115 NET TONNES HAS LEFT THE COMEX.

 

THE GOLD COMEX IS NOW IN STRESS AS
1. GOLD IS LEAVING THE COMEX 
2. GOLD IS LEAVING THE REGISTERED CATEGORY OF THE COMEX.

 

end

And now for silver

AND NOW THE  DELIVERY MONTH OF AUGUST

INITIAL  standings/SILVER

IN TOTAL CONTRAST TO GOLD, HUGE ACTIVITY IN SILVER TODAY.
AUGUST 5 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 49,086.03 oz
Scotia

 

 

Deposits to the Dealer Inventory
nil oz

 

Deposits to the Customer Inventory
1,200,680.710 oz
CNT
HSBC
No of oz served today (contracts)
66
CONTRACT(S)
(330,000 OZ)
No of oz to be served (notices)
359 contracts
 1,795,000 oz)
Total monthly oz silver served (contracts)  1017 contracts

5,085,000 oz)

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

**

 

we had 0 inventory movement at the dealer side of things

 

 

total dealer deposits: nil  oz

total dealer withdrawals: nil oz

we had  2 deposits into the customer account

into JPMorgan:  nil  oz

ii)into CNT:  600,025.750 oz

iii) Into HSBC 600,654.960 oz

 

 

 

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

JPMorgan now has 153.4 million oz of  total silver inventory or 50.36% of all official comex silver. (153.4 million/304.6 million

 

 

 

 

total customer deposits today:  1200,680.710  oz

 

we had 1 withdrawals out of the customer account:

 

 

 

 

i) Out of Scotia: 49,086.03 oz

 

 

 

 

 

 

total 49,086.03  oz

 

we had 1 adjustment :

i) Out of CNT: 284,387.100 oz was adjusted out of the customer account of CNT and this landed into the dealer account of CNT

 

total dealer silver:  93.239 million

total dealer + customer silver:  311,516.047 million oz

 

 

 

The total number of notices filed today for the AUGUST 2019. contract month is represented by 66 contract(s) FOR 330,000 oz

To calculate the number of silver ounces that will stand for delivery in AUGUST, we take the total number of notices filed for the month so far at 1017 x 5,000 oz = 5,085,000 oz to which we add the difference between the open interest for the front month of AUGUST. (425) and the number of notices served upon today 66 x (5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the AUGUST/2019 contract month: 1017 (notices served so far) x 5000 oz + OI for front month of AUGUST (425)- number of notices served upon today (66)x 5000 oz equals 6,880,000 oz of silver standing for the AUGUST contract month.

WE GAINED A STRONG 66 CONTRACTS  AS THE DEALERS BYPASSED THOSE STANDING TRYING TO GRAB WHATEVER SILVER THEY CAN. WE THUS HAVE AN ADDITIONAL 66 CONTRACTS OR 330,000 OZ STAND FOR DELIVERY ON THIS SIDE OF THE POND. THESE GUYS REFUSED AN OFFER FROM THE BANKERS TO ROLL TO A LONDON BASED FORWARD AND THEY ALSO NEGATED A FIAT BONUS FOR NOT ACCEPTING THIS CROOKED CONTRACT.

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 66 notice(s) filed for 330,000 OZ for the AUGUST, 2019 COMEX contract for silver

 

 

 

 

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

 

TODAY’S ESTIMATED SILVER VOLUME:  114,162 CONTRACTS (volumes very heavy

 

 

CONFIRMED VOLUME FOR YESTERDAY: 110,346 CONTRACTS..volumes very heavy

 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 110,346 CONTRACTS EQUATES to 551 million  OZ 78.7% OF ANNUAL GLOBAL PRODUCTION OF SILVER..makes sense!!

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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

 

 

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV FALLS TO +.40% ((AUGUST 5/2019)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -1.57% to NAV (AUGUST 5/2019 )
Note: Sprott silver trust back into NEGATIVE territory at +%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 14.08 TRADING 13.55/DISCOUNT 3.75

END

And now the Gold inventory at the GLD/

AUGUST 5/2019//WITH GOLD UP $18.80/A STRONG DEPOSIT OF 2.94 TONNES OF PAPER GOLD INTO THE GLD/INVENTORY RESTS AT 830.76 TONNES.

AUGUST 2/2019: WITH GOLD UP $25.20: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 827.82 TONNES

AUGUST 1/2019: WITH GOLD DOWN $4.90 TODAY: TWO TRANSACTIONS: i) A PAPER WITHDRAWAL OF 1.47 TONNES (USED IN THE RAID THIS MORNING)/ and ii) A PAPER DEPOSIT OF 4.40 TONNES THIS AFTERNOON!/INVENTORY RISE TO 827.82 TONNES

JULY 31/WITH GOLD DOWN 3.90 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 824.89 TONNES

JULY 30//WITH GOLD UP $9.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 824.89 TONNES

JULY 29/WITH GOLD UP $1.00: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER DEPOSIT OF 6.75 TONNES INTO THE GLD INVENTORY///INVENTORY RISES TO 824.89 TONNES

JULY 26/WITH GOLD UP $4.50: A HUGE INVENTORY WITHDRAWAL OF 4.09 TONNES OF PAPER GOLD LEAVES THE GLD/INVENTORY RESTS AT 818.14 TONNES

JULY 25.2019: WITH SILVER DOWN 19 CENTS: ANOTHER PAPER WITHDRAWAL OF 1.17 MILLION OZ/INVENTORY REST AT 358.213 MILLION OZ

JULY 24…A BIG CHANGE  IN SILVER INVENTORY AT THE SLV: A GAIN OF 1.685 MILLION OZ/INVENTORY RESTS AT 359.383 MILLION OZ

JULY 23/2019: WITH SILVER UP 5 CENTS TODAY: ANOTHER BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 2.221 MILLION PAPER OZ ADDED INTO THE GLD INVENTORY//INVENTORY RESTS AT 357.698 MILLION OZ////

JULY 22.2019/WITH SILVER UP 21 CENTS TODAY: A MASSIVE  CHANGES IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 8.939 MILLION OZ ADDED TO THE SLV INVENTORY/INVENTORY RESTS AT 355.919 MILLION OZ//

JULY 19/WITH GOLD DOWN $1.00: A MASSIVE  DEPOSIT OF 11.44 TONNES OF PAPER GOLD INTO THE GLD/INVENTORY RESTS AT 814.62

JULY 18/WITH GOLD UP $5.55 TODAY: A BIG PAPER DEPOSIT OF 3.81 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 803.18 TONNES

JULY 17/WITH GOLD UP $11.35 TODAY: A BIG WITHDRAWAL OF 1.17 TONNES FROM THE GLD//INVENTORY RESTS AT 799.37 TONNES

JULY 16: WITH GOLD DOWN $2.15 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 800.54 TONNES

JULY 15: WITH GOLD UP $1.85 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 800.54 TONNES

JULY 12/WITH GOLD UP $5.20 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 800.54 TONNES

JULY 11.WITH GOLD DOWN $5.25: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 800.54 TONNES

JULY 10//WITH GOLD UP $11.65 A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER GOLD DEPOSIT OF 6.46 TONNES/INVENTORY RESTS AT 800.54 TONNES

JULY 9/WITH GOLD UP 70 CENTS, A HUGE PAPER WITHDRAWAL OF 2.89 TONNES WHICH WAS USED IN THE FUTILE RAID ON GOLD AND SILVER THIS MORNING//INVENTORY RESTS AT 794.08 TONNES

JULY 8/ WITH GOLD DOWN 35 CENTS A HUGE WITHDRAWAL OF 1.47 TONNES FROM THE GLD/INVENTORY FALLS TO 796.97 TONNES

JULY 5TH/WITH GOLD DOWN $19.50/NO CHANGES IN GOLD INVENTORY AT THE GLD//INV RESTS AT 798.44 TONNES

JULY 3// WITH GOLD UP $12.60 TODAY A SURPRISE WITHDRAWAL OF 1.76 TONNES FROM THE GLD//INVENTORY RESTS AT  798.44

 

JULY 2. WITH GOLD UP $18.90 A HUGE “PAPER” DEPOSIT OF 6.16 TONNES INTO THE GLD/INVENTORY RESTS AT 800.20 TONNES

JULY 1: WITH GOLD DOWN $24.70 A HUGE “PAPER GOLD” WITHDRAWAL OF 1.76 TONNES FROM THE GLD/INVENTORY RESTS TONIGHT AT 794.04 TONNES

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

AUGUST 5/2019/ Inventory rests tonight at 830.76 tonnes

 

 

*IN LAST 635 TRADING DAYS: 104.84 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 535 TRADING DAYS: A NET 61.70 TONNES HAVE NOW BEEN ADDED INTO  THE GLD INVENTORY.

 

 

 

end

 

Now the SLV Inventory/

AUGUST 5.2019: WITH SILVER UP 12 CENTS A TINY 142,000 OZ WITHDRAWAL AND THAW AS TO PAY FOR FEES//INVENTORY RESTS AT 356.573 MILLION OZ..

AUGUST 2/2019: WITH SILVER UP 10 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 356.715 MILLION OZ/

AUGUST 1//WITH SILVER DOWN 23 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 356.715 MILLION OZ//

 

JULY 31/WITH SILVER DOWN 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 356.715 MILLION OZ//

JULY 30/2019: WITH SILVER UP 8 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 356.715 MILLION OZ//

JULY 29/2019: WITH SILVER UP 4 CENTS TODAY: A SMALL WITHDRAWAL OF 468000 OZ FROM THE SLV/INVENTORY LOWERS TO 356.715 MILLION OZ//

JULY 26.2019: WITH SILVER DOWN 2 CENTS TODAY:  A HUGE 1.03 MILLION OZ OF PAPER SILVER LEAVES THE SLV/INVENTORY LOWERS TO 357.183 MILLION OZ//

JULY 25.2019: WITH SILVER DOWN 19 CENTS: ANOTHER PAPER WITHDRAWAL OF 1.17 MILLION OZ/INVENTORY REST AT 358.213 MILLION OZ

JULY 24…A BIG CHANGE  IN SILVER INVENTORY AT THE SLV: A GAIN OF 1.685 MILLION OZ/INVENTORY RESTS AT 359.383 MILLION OZ

JULY 23/2019: WITH SILVER UP 5 CENTS TODAY: ANOTHER BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 2.221 MILLION PAPER OZ ADDED INTO THE GLD INVENTORY//INVENTORY RESTS AT 357.698 MILLION OZ////

JULY 22.2019/WITH SILVER UP 21 CENTS TODAY: A MASSIVE  CHANGES IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 8.939 MILLION OZ ADDED TO THE SLV INVENTORY/INVENTORY RESTS AT 355.919 MILLION OZ//

JULY 19/WITH SILVER FLAT TODAY: ANOTHER MONSTROUS PAPER DEPOSIT OF 3.276 MILLION OZ ENTERS THE SLV//WHAT A MASSIVE FRAUD//INVENTORY RESTS AT 346.980 MILLION OZ

JULY 18/WITH SILVER UP 24 CENTS TODAY: A BIG CHANGES IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 2.668 MILLION OZ INTO THE SLV///INVENTORY RESTS AT 343.704 MILLION OZ//

JULY 17: WITH SILVER UP ANOTHER 29 CENTS: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 8.518 MILLION OZ/INTO THE SLV INVENTORY///INVENTORY RESTS AT 341.036 MILLION OZ//

JULY 16: WITH SILVER UP 31 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.518 MILLION OZ

JULY: 15  WITH SILVER UP 11 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.518 MILLION OZ

JULY 12/WITH SILVER UP 10 CENTS: NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 332.518 MILLION OZ//

JULY 11/NO CHANGE IN SILVER INVENTORY

JULY 10/WITH SILVER UP 9 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 332.518 MILLION OZ//

JULY 9/WITH SILVER UP A SMALL 7 CENTS A GIGANTIC INVENTORY GAIN OF 4.026 MILLION OZ/ INVENTORY RESTS AT 332.518 MILLION OZ AND NOW IT SHOULD BE QUITE CLEAR THAT THE SLV ( AND GLD ARE FRAUDS)

JULY 8/WITH SILVER UP 7 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 328,492 MILLION OZ

JULY 5/WITH SILVER DOWN 32 CENTS WE STRANGELY HAD A HUGE INVENTORY GAIN OF 2,234 MILLION OZ//INVENTORY RESTS AT 328.492 MILLION OZ

JULY 3 WITH SILVER UP 10 CENTS A HUGE INCREASE IN INVENTORY..INVENTORY RESTS AT 326.151 MILLION OZ

JULY 2/WITH SILVER UP 4 CENTS TODAY: NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 323.330 MILLION OZ//

JULY 1/ WITH SILVER DOWN 16 CENTS: A SURPRISING DEPOSIT OF 936,000 OZ INTO THE SLV/INVENTORY RESTS TONIGHT AT 323.330 MILLION OZ/

 

AUGUST 5/2019:

 

Inventory 356.573 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

 

 

YOUR DATA…..

6 Month MM GOFO 2.19/ and libor 6 month duration 2.13

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

G0LD LENDING RATE: – .06

 

XXXXXXXX

12 Month MM GOFO
+ 2.11%

LIBOR FOR 12 MONTH DURATION: 2.12

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.01

end

 

 

end

 

PHYSICAL GOLD/SILVER STORIES
i) GOLDCORE BLOG/Mark O’Byrne

 

 

ii) Important gold commentaries courtesy of GATA/Chris Powell

Putin’s pledge to ditch the dollar is slowly being fulfilled.  The slowness is due to some of their use of the dollar in foreign transactions

(Bloomberg/GATA)

Putin’s pledge to ditch the dollar is slowly being fulfilled

 Section: 

By Andrey Biryukov
Bloomberg News
Saturday, August 3, 2019

Russia is acting on a pledge by President Vladimir Putin to shrink the role of dollar in international trade as tensions sour between Washington and Moscow.

The shift is part of a strategy to “de-dollarize” the Russian economy and lower its vulnerability to U.S. sanctions. But while the central bank was able to quickly dump half of its dollar holdings last year, progress in trade has been slow due to ingrained use of the greenback for many transactions.

… 

The share of euros in Russian exports increased for a fourth straight quarter at the expense of the U.S. currency, according to central bank data. The common currency has almost overtaken the dollar in trade with the European Union and China and trade in rubles with India surged. The dollar’s share in import transactions remained unchanged at about a third.

“There’s been a strong incentive to change, not just for Russia but for its trading partners too,” said Dmitry Dolgin, an economist at ING Bank in Moscow. “The European Union is also now facing trade pressure from the U.S.” pushing them to try to reduce dependence on the dollar, he said. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-08-04/putin-s-pledge-to-dit…

* * *

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Friday-Monday, November 1-4, 2019

https://neworleansconference.com/noic-promo/powellgata/

* * *

Help keep GATA going:

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

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END

The new head honcho of the Federal Reserve Bank of NY relieved two key players at the bank in May, Simon Potter, the head trader(all market operations) and Dzina, head of financial services group. Morale sank at the bank.  Seems that these two got out of line with Williams

(Bloomberg/GATA)

Abrupt ousters, public missteps sink morale inside New York Fed

 Section: 

Poor things.

* * *

By Matthew Boesler, Alex Harris, and Liz McCormick
Bloomberg News
Sunday, August 4, 2019

As the financial world watches the White House turn up the heat on the Federal Reserve in Washington, another Fed drama has been playing out right on Wall Street’s doorstep.

An unusual level of internal tension broke out in recent weeks at the fortress-like Federal Reserve Bank of New York in lower Manhattan.

… 

The sudden departure of two longtime officials shook staff, sank morale, and drew attention to the leadership of the New York Fed under John Williams as he enters his second year at the helm. On Wall Street questions arose again a couple of weeks ago when a speech he gave inadvertently whipsawed markets.

The story involves Simon Potter, who ran the all-important markets desk, and Richard Dzina, head of the financial services group. Both were abruptly relieved of their roles in late May by Williams. Little explanation was given, but according to current and former New York Fed employees, as well as those close to the bank, the nature of the exits, by fault or design, seemed to be a warning: fall in line. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-08-04/abrupt-ousters-shake-…

END

same subject as above:

(zerohedge)

Meanwhile, Inside The Plunge Protection Team: Chaos

It was almost ten years ago that we first profiled the most important trading desk in the world: not one situated in any of the (increasingly empty) massive trading floors of the world’s commercial banks located in either the financial district, midtown or Connecticut, but the one inside the 9th floor of 33 Liberty Street, the home New York Fed, the one which is also known in trader folklore as the “Plunge Protection Team.”

This is what we said back then:

Mr. Sack, 39 years old, is an economist who runs the markets group at the Federal Reserve Bank of New York. The group runs the Fed’s trading, making it the bridge between the marble corridors of the Federal Reserve in Washington and the bustling trading floors of Wall Street.

The center of life in the markets group is a glass-enclosed conference room situated next to a small cluster of trading desks on the ninth floor of the New York Fed. It overflows with people for a daily 9:20 a.m. meeting run by Mr. Sack. A few stray pictures of Alan Greenspan, the former Fed chairman, still hang on pillars nearby.

The markets group grew enormously during the crisis, from about 225 employees to 400 people who monitor the markets for the Fed, manage its portfolio and run the many new trading programs it has started. The Fed holds more than 20,000 individual securities.

Of course, back then said “most important trading desk” was controlled by one Brian Sack, then only 39-year-old, who has since moved on to the far more lucrative pastures of DE Shaw. Sack was replaced in the summer of 2012, by the levitating market wizard, Simon Potter, who promptly realized that to crush the bears one simply had to crush the VIX specs, and the rest would promptly follow.

Then, in the end of May 2019, something unexpected happened: Simon Potter, arguably the most important trader in the world, manning the world’s most important trading desk, unexpectedly announced his “resignation.” Not only that, but Potter took with him the second most important person at the NY Fed’s “Plunge Protection Team”, the head of the Financial Services Group, Richard Dzina.

 

Simon Potter

What was odd, as we briefly noted two months ago, was the sudden and unexpected nature of this departure: it came from nowhere, and prompted some very delicate and substantial questions about continuity at the desk that has so far managed to keep the US stock market from entering a bear market since the global financial crisis over a decade ago.

Now, thanks to Bloomberg, we have a much more detailed look into what transpired at the trading desk of the “Plunge Protection Team”, and what we learn is that the past year said institution which forms the bedrock of support for the US capital market has been gripped by what at times is sheer chaos.

Why? Perhaps it will not come as a surprise to anyone, that the reason for said chaos is another career economist, in this case the “new” president of the New York Fed, John Williams (no relation to the Star Wars guy).

As Bloomberg details in a “must read” report, “an unusual level of internal tension broke out in recent weeks at the fortress-like Federal Reserve Bank of New York in lower Manhattan.” This was prompted by the sudden departure of the two longtime officials mentioned above, which “shook staff, sank morale and drew attention to the leadership of the New York Fed under John Williams as he enters his second year at the helm.” And yes, this is the same John Williams who two weeks ago prompted a mini market tantrum following one of the most epic communication fuck ups by a central banker.

As Bloomberg writes “the story involves Simon Potter, who ran the all-important markets desk, and Richard Dzina, head of the financial services group. Both were abruptly relieved of their roles in late May by Williams. Little explanation was given, but according to current and former New York Fed employees, as well as those close to the bank, the nature of the exits, by fault or design, seemed to be a warning: fall in line.”

It is not clear exactly what the two titans of US capital markets had to “fall in line” for, but two things are certain – i) Potter did not “resign”, he was fired by Williams, and ii) now that an economist with zero capital markets experience is in charge, and following his termination of Potter and Dzina, the world is one step closer to collapse as a clueless PhD hack is in charge of the most important market in the world.

The economist in question is John Williams, whom Bloomberg laughably described as “a widely respected and oft-cited monetary economist who ran the San Francisco Fed for seven years” which is amusing for a regional Fed that was at the epicenter of the housing crisis (granted under Yellen, not Williams, but still), and which is best known for incinerating taxpayer funds for such profoundly insightful research reports as “why is water wet” (we jest, but a real example of their cutting edge research was whether it was still worth going to college). In any case, when Williams was appointed for the top job in New York – a Fed which has a far closer link to capital markets than any other – this “raised eyebrows from the outset. A finance-industry background has traditionally been seen as a key qualification, something he lacked.

Bingo. And what’s worse, Williams – in what was likely an ego tantrum – inexplicably fired the two most important people in his inner circle who have had their pulse on the capital markets for the past decade.

The consequences were immediate, and visible to all:

Williams, who during his San Francisco Fed days often mentioned his reluctance to pay too much attention to short-term swings in the markets, came under fire on July 18 after saying in a speech that central banks should act quickly “at the first sign of economic distress.”

With the remarks coming just a day before Fed officials entered a quiet period prior to their July 30-31 policy meeting, traders immediately took his comments to mean a more-aggressive rate cut was in store. The New York Fed issued a rare clarification walking back his comments later that day, causing another sharp move in the opposite direction.

As Bloomberg adds, the “kerfuffle prompted Ward McCarthy, chief financial economist at Jefferies, to say in a July 22 note to clients that “until proven otherwise, President Williams will remain a communication liability and a probable source of market volatility.”This, again, is the guy who is in charge of the world’s most important trading desk!

The Williams fiasco It also caught the attention of President Donald Trump, who has been openly critical of Fed policy. He tweeted, “I like New York Fed President John Williams first statement much better than his second.”

Williams inability to communicate with markets aside, Bloomberg correctly points out that “as Williams reorganizes the leadership ranks and puts his stamp on the New York Fed, the ousters of Potter and Dzina leave the reserve bank without two of its most experienced hands.

For those readers who are unfamiliar with our historical obsession with Potter, Bloomberg gives a broad overview of his background:

Potter, who holds a Ph.D. in economics from University of Wisconsin-Madison, started at the New York Fed in 1998. As head of the markets desk, he oversaw the end of the Fed’s massive bond-buying program known as quantitative easing, as well as the unwind that began in October 2017.

Potter was also responsible for briefing policy makers on the state of financial markets at the Fed’s rate-setting meetings. He met with Powell about three weeks after he was relieved of his duties, according to the chairman’s calendar. A Fed spokesman declined to comment on the reason for the meeting or what was discussed.

Dzina, a former Army officer, began his career at the Fed as a bank examiner in 1991 before working his way up the ranks. In addition to leading the financial services group, he also managed a key network central to the U.S. payments system called Fedwire. He’s been described in conversations with those who know him as a steady hand who projected confidence and a team-first attitude. His oft-repeated credo was, “Mission First, People Always.”

So what caused the rift that led to the termination of Potter and his associate? Curiously, that’s one thing that remains unknown. As Bloomberg writes, “it’s still unclear whether any specific disagreements prompted the removals. But those close to the New York Fed say Potter and Dzina, who were known for being strong-minded, did not align with Williams on issues related to managerial strategy.”

In any event, there’s little doubt many were surprised by how it all went down, Bloomberg notes. What is curious is that until now at least, the market was not aware that the two stalwart guardians of the S&P500, and the heads of the PPT departed after what appears to have been a clash of egos – and styles – with the current, and supremely clueless, head of the NY Fed. The market may be in for a very rude awakening.

Ironically, Potter’s termination is something right out of Trump’s pinkslipping of Comey:

Williams told Potter of the decision over the phone while the latter was out of town and was scheduled to travel to Hong Kong for a speech on regulatory reform, according to people with direct knowledge of the situation, who aren’t authorized to speak publicly.

And just like at the FBI, the NY Fed appears to be turning on Williams:

Employees put questions to Williams at a town hall-style meeting in June, two weeks after the departures, expressing their frustration over the message Williams seemed to be sending, according to people familiar with the matter. Williams responded by talking about the need for a cohesive vision among the bank’s top executives, without elaborating on the specifics of the decision.

Typical econobabble – lots of SAT words, little substance, and absolutely no clue what to do when the market crashes, which at this rate may come very soon.

* * *

Fast forward to today when the NY Fed has yet to announce who will succeed Potter and Dzina on a permanent basis. In the meantime, Michael Strine, the institution’s first vice president and Williams’ second-in-command, is managing Fedwire. Traditionally, the network is overseen by the first vice president, but was instead delegated to Dzina by Williams’ predecessor, William Dudley, when Strine was promoted to the role in 2015, according to Bloomberg.

To be sure, whoever replaces Potter and Dzina will have plenty to contend with.

On Wednesday, the Fed reduced its benchmark interest rate for the first time in over a decade and signaled more cuts may be in store later this year. New York Fed staffers have also been charged with looking into a new repurchase-agreement facility to provide liquidity to the banking system as cash becomes increasingly scarce. No less important are efforts to modernize Fedwire, which suffered a rare outage this year.

And then there is the risk of a sharp market drop lingering behind every corner, as the only thing that keeps the market propped up is the traders’ explicit faith (and hope) in the Fed’s ability to support it. The problem is that with Williams at the helm of the PPT, such an ability does not exist. And the moment the market realizes this is precisely when Potter will be so very desperately needed. Alas, at that very moment, Potter will be half a world away, sitting on a beach somewhere, collecting twenty zero percent…

THE FOLLOWING COMMENTARY FROM CHRIS POWELL IS A MUST MUST READ. HE EXPLAINS WHY THE TRADING OF GOLD AND SILVER IS DIFFERENT THESE PAST FEW MONTHS

(courtesy Chris Powell/GATA)

As gold and silver catch fire, what’s happening?

 Section: 

11:53p ET Monday, August 4, 2109

Dear Friend of GATA and Gold:

A friend who has not been paying close attention to the gold market for a while asked your secretary/treasurer this afternoon for a summary of his outlook. With the monetary metals on fire tonight as they have not been for a long, long time, maybe the reply is worth sharing:

1) The gold market has felt very different for months — felt much stronger.

2) The usual central bank-instigated smashdowns, which used to depress the price for weeks or months, now are failing to keep the price down for more than a day or two.

… 

3) The New York Commodities Exchange’s gold market has been operating very differently, with most contracts seeking delivery converted into a formerly rarely used mechanism called “exchange for physicals” whereby they are settled somewhere off the exchange, apparently in London. Until recently this mechanism was said to be used only in emergencies. Now it seems to be settling most Comex gold contracts. The implication is that there is little or no gold available immediately in Comex vaults. Whatever it means, there is a huge change here.

4) The “exchanges for physicals” seem to be rolled over in London every two weeks to escape ordinary reporting requirements. This implies that the sellers are trying to hide something. Of course that the major powers in the gold market are trying to hide things is not new, but that they are using new mechanisms of concealment is new.

5) Of course central banks, if you believe their announcements, have turned into big net buyers of gold in the last couple of years and have let the European Central Bank’s longstanding gold sale agreements lapse. That is, central banks are not selling much if any gold anymore, and sales and leases of central bank gold long have provided a big part of supply.

6) The Bank for International Settlements is the major broker for central bank gold trades and long has been heavily involved with trading, leasing, and swapping gold and trading its derivatives. But the bank’s recent monthly reports show a sharp decline in its gold trading. The implication is that the BIS, like the European central banks, is reducing its gold trading.

7) Many central bankers and President Trump himself are screaming for devaluing their currencies. Of course many European government and private-sector bonds are carrying negative interest rates, which is insane. Essentially it proclaims that government-issued money is hardly worth anything anymore, except for paying taxes.

8) But at least one sovereign, probably the United States, still has been trying to contain the gold price, while the strength in the market suggests that at least one sovereign has been acquiring whatever physical gold and silver are available. This is to be expected as the United States has been weaponizing the dollar and throwing sanctions at anyone who disagrees with U.S. policy. Lately there have been serious defections from the dollar system, and the defectors may have nowhere to go except to gold. But as much as central banks and President Trump want to devalue, they may want to devalue only against each other, not against gold, since — if it is done gradually rather than suddenly, as in an international currency reset — devaluing against gold risks prompting a flight out of all currencies, bonds, and equities. That is, a comprehensive market crash.

9) Ordinarily it would seem that circumstances are hugely favorable to gold and silver. But if governments lose on the market-rigging front, they can always become more openly totalitarian — confiscating gold or outlawing private possession of monetary gold, imposing windfall profits taxes on capital gains in gold, raising royalty requirements on gold-mining companies to prohibitive levels, and so forth. So even as we all may hope for the best — free and transparent markets, and limited and accountable government — your secretary/treasurer’s only prediction is borrowed from Orwell’s “1984”: “If you want a vision of the future, imagine a boot stamping on a human face, forever.”

To prevent that is another reason to press on in the morning.

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

END

Currency wars begin as the yuan falls past 7 to one: the war is escalating!

(Bloomberg News/GATA)

China lets yuan fall below 7 per dollar as trade war escalates

 Section: 

By Tian Chen
Bloomberg News
Sunday, August 4, 2019

The yuan plunged beyond 7 per dollar for the first time since 2008 amid speculation Beijing was allowing currency depreciation to counter President Donald Trump’s latest tariff threat.

The exchange rate tumbled 1.2% to 7.0256 a dollar at 10:19 a.m. after the People’s Bank of China set its daily reference rate at a weaker level than 6.9 for the first time since December. The offshore yuan sank as much as 1.9% to a record low, while the Shanghai Composite Index slid 0.3%.

… 

The yuan declined 0.9% in mainland trading last week, its biggest loss since mid-May, after President Donald Trump abruptly escalated the trade war with new tariffs on Chinese goods. Beijing pledged to respond if the U.S. goes ahead with a plan to impose a 10% tariff on a further $300 billion in Chinese imports.

“It appears that the tariffs hike suggests the return of tit-for-tat moves and a suspension of trade talks, and the PBoC sees no need to keep the yuan stable in the near term,” said Ken Cheung, a senior currency strategist at Mizuho Bank Ltd. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-08-05/china-s-offshore-yuan…

END

Now we have risk that Trump will engage in dollar intervention trying to counter the yuan’s slide

(Bloomberg/GATA)

Dollar intervention risk rises as yuan’s slide stokes currency war bets

 Section: 

By Ruth Carson and Masaki Kondo
Bloomberg News
Monday, August 5, 2019

The risk of U.S. intervention to rein in the dollar is rising as a tumbling Chinese yuan stokes speculation that a global currency war is getting underway.

Speculation is building that U.S. President Donald Trump may seek to weaken the dollar after China allowed the yuan to drop below the key level of 7 per greenback, strategists said. If the U.S. authorities do take action, this could sound the death knell of the strong-dollar policy that has been in place for more than two decades.

… 

“If Trump feels that the U.S. economy is going to get on the back foot on the back of this, then absolutely intervention is something that could creep up,” said Chris Weston, head of research at Pepperstone Group Ltd. in Melbourne. “If people genuinely believe that he’s going to do it, they’ll start selling the dollar.” …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-08-05/dollar-intervention-r…

* * *

END

A must read.. Currency wars begin as China is intent on devaluing its currency to offset the effects of Trump’s new 10% tariff. This will send a deflationary tsunami across the globe as other nations will lower their currency in order to compete with China. China’s problem will be the mass exodus of dollars out of its country something that has already commenced due to the protests in Hon Kong.

(Ambrose Evans Pritchard/London Telegraph/GATA)

Ambrose Evans-Pritchard: Currency war begins as China hurls devaluation back in Trump’s face

 Section:  | 

By Ambrose Evans-Pritchard
The Telegraph, London
Monday, August 5, 2109

China has hit back against the Trump administration with a drastic exchange rate devaluation, almost guaranteeing a superpower showdown and a lurch towards full trade war.

The yuan blew through the symbolic line of seven to the dollar for the first time since the global financial crisis, with the offshore rate in Hong Kong spiking to 7.07 in moves that stunned seasoned traders.

… 

The calculated action by the People’s Bank (PBoC) threatens to unleash a wave of deflation across the world and risks pushing East Asia and much of Europe into recession. It is certain to provoke a ferocious response from the White House.

Capital Economics said Beijing has taken the fateful step of “weaponising” its exchange rate and is digging in for a long struggle: “The fact that they have now stopped defending 7.00 against the dollar suggests that they have all but abandoned hopes for a trade deal with the U.S.”

Commerzbank said China’s decision to engineer such a sudden move in its tightly managed currency has far-reaching implications for the whole international system. “It looks like a tsunami is coming.”

The shock waves were felt instantly through the nexus of global bond, equity, and commodity prices. It triggered a flight to safe-haven currencies such as the Japanese yen and the Swiss franc, an effect compounded by the thin liquidity conditions of August trading.

Yields on 10-year German Bunds plummeted to minus 0.53 percent, taking much of the eurozone sovereign bond market further into uncharted terrain. The euro Stoxx 50 index of equities has fallen 5 percent since late last week.

While the Chinese government says 7 is an arbitrary level of no macro-economic significance, it has intervened repeatedly in the past to prevent this psychological threshold being threatened.

In case there was any doubt over the motive of today’s action, the PBoC issued a statement linking the new rate to “unilateralism and trade protectionism measures and the imposition of tariff increases on China.” Despite not naming the U.S., it clearly meant Mr. Trump’s latest threat to impose 10 percent tariffs on all remaining Chinese goods in early September.

The PBoC vowed to keep the currency “fundamentally stable” but it is walking a fine line. Capital controls are tighter than they were during the currency scare of 2015-2016 — when China was losing $100 billion of foreign exchange reserves a month — but money is still leaking out. Confidence is increasingly fragile.

“The worry is that a break beyond 7 could send the Chinese currency into a vicious circle in which selling leads to more selling,” said Ke Baili from Caixin.

Kyle Bass, a long-time China bear at Hayman Capital, said a “mass exodus” of capital is already underway as political protest in Hong Kong reaches crisis point and China’s debt-driven growth model reaches the limits. “The collapse has just begun,” he tweeted.

Most analysts say the move by the PBoC is a deliberate choice, but that is hardly more reassuring for investors. It means that the Chinese Communist Party is willing to risk a full-blown conflict with Washington on every economic front. Beijing has simultaneously ordered state bodies to halt purchases of all farm products from the U.S.

This escalation comes at a highly sensitive moment. A meeting at the White House in late July actively discussed using the U.S. Treasury’s Exchange Stabilization Fund to buy foreign currencies and drive down the dollar as a matter of policy — an extraordinary moment in the history of the world’s paramount reserve currency. It is no surprise that gold has surged to a five-year high of $1,470.

The White House discussion was kicked into touch but the issue did not go away. It is now back as a red-hot theme. Mr. Trump’s trade guru, Peter Navarro, said over the weekend that currency manipulation by China is one of its “seven deadly sins.”

Capital Economics said the Chinese appear intent on neutralising Mr. Trump’s tariffs by letting the currency slide pari passu, implying a devaluation of up to 10 percent. This means a parallel yuan devaluation against the rest of the world. It effectively exports trade stress to third countries and risks pushing much of East Asia into a deeper downturn.

The eurozone is also in the front line. Hans Redeker from Morgan Stanley said the euro is developing a new characteristic: it tends to strengthen during bouts of global stress. This reflects its role as surplus “funding currency” for worldwide capital flows.

In other words, the euro is starting to behave like the Japanese yen. Currency strength causes pro-cyclical tightening and deflationary pressures whenever there is trouble. This will cause deep alarm in Frankfurt.

… For the remainder of the commentary:

https://www.telegraph.co.uk/business/2019/08/05/currency-war-begins-chin…

END

iii) Other physical stories:

EFFX/(courtesy Paul Ebeling)

Gold’s Price Rallies to Record Highs in 73 Currencies

By Paul Ebeling on August 4, 2019

Gold marked 6-year highs Friday as investors barged into the safe-haven metal on an escalating US-China trade dispute, and the prospects of a return to ultra-loose monetary policy by the Fed.

Gold for delivery in December, the most active futures contract trading in New York, touched a high of $1,461.90 oz before settling $25.10, or 1.8%, higher at $1,457.50 on the COMEX.

According to FactSet data that is the highest finish for the most-active contract since 9 May 2013.

Sharps Pixley, the Top bullion broker in London, points out that the gold price in GBPs hit an all time high Friday of £1,187.28, beating the previous record set on 11 September 2011.

GBP joins 72 other currencies, including the Canadian Dollar, The Australian Dollar and perhaps most significantly, the Indian Rupee on the Top gold price.

There has been a stealth Bull run in gold and by simply watching the USD gold price, some investors are missing out.

-END-

Due to the criminal conviction of trader Edmonds, the USA prosecution is seeking to halt the civil lawsuit. I was misinformed: all discoveries in a civil suit are public and because of that, the prosecution gives the defendants the right to plead the 5th if their testimony incriminates them
(courtesy zerohedge/Chris Powell)

US seeks halt in civil lawsuit accusing JP Morgan of manipulating metals market, citing criminal case

  • The U.S. wants a federal judge to halt a civil lawsuit accusing J. P. Morgan of manipulating precious metals markets. The Justice Department cited an ongoing criminal case as its reason for the request.
  • A former J. P. Morgan trader pleaded guilty in Connecticut last month to manipulation charges.
  • In the guilty plea, the trader said he had learned to make bogus trade orders from senior traders at the bank and that he used the strategy hundreds of times with the knowledge and consent of his immediate supervisors.

A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York.

Amr Alfiky | Reuters
A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York.

The Justice Department is asking a judge to put the brakes on a civil lawsuit against J. P. Morgan Chase, citing an ongoing probe into a “related criminal case” that involves alleged manipulation of precious metals markets.

The department wants a six-month postponement in the proceedings of the civil lawsuit, which was filed in 2015 by hedge fund manager Daniel Shak and two commodity traders. The government also says it could ask for a longer delay in the case, according to a court filing on Monday.

The move comes days after Shak’s lawyer, David Kovel, sought permission to reopen questioning of two former J. P. Morgan traders and the bank’s current global head of base and precious metals trading.

Kovel, in making the request with the Manhattan federal judge in the civil case, cited last month’s guilty plea by one of those former traders, John Edmonds, in federal court in Connecticut.

Edmonds admitted making bogus bids on precious metals contracts while working at the bank from 2009 to 2015.

Neither J. P. Morgan Chase nor Kovel’s clients have opposed the Justice Department’s request.

In arguing for a delay, the Justice Department said Shak’s lawsuit is “related” to Edmonds’ criminal case and that Edmonds has “pleaded guilty and acknowledged his own participation in such conduct, as well as that of other traders.”

“Edmonds awaits sentencing, but the broader investigation is ongoing,” the Justice Department said. The U.S. wants to delay the civil case “to protect the integrity of its ongoing criminal investigation,” it said.

J. P. Morgan did not respond to a request for comment by CNBC. Kovel declined to comment.

Tuesday night, after this story first was published, Judge Paul Engelmayer ordered the federal prosecutors to explain in detail by Monday why postponing proceedings in the civil lawsuit would not harm those involved, and why reopening questioning “would be detrimental to the Government’s ongoing criminal investigation.”

Englemayer also wrote that he regards Edmonds’ guilty plea “as potentially highly consequential” to the civil case.

In his guilty plea, the 36-year-old Edmonds said he had learned to make bogus trade orders from senior traders at the bank and that he used the strategy hundreds of times with the knowledge and consent of his immediate supervisors. He admitted to working with “unnamed co-conspirators” at J. P. Morgan, according to the Justice Department.

Kovel wants to question Edmonds again as well as Michael Nowak, the bank’s global head of base and precious metal trading, and former J. P. Morgan Chase Managing Director Robert Gottlieb. The three had previously answered questions under oath in the civil case.

Kovel said in court filings that Nowak was the immediate supervisor of Edmonds, while Gottlieb was Edmonds’ mentor.

In his prior deposition, Edmonds said that Gottlieb sat only a “couple feet” away from him for about five years, and that he was “somebody [he] looked up to in the business,” who helped guide and train him.

Nowak is described by Edmonds as his direct supervisor, with whom he would sometimes discuss trading strategies. Nowak was also the person responsible for overseeing the performance and risk of Edmonds’ portfolio, according to the deposition.

Edmonds also stated in his prior deposition that he would enter precious metals trades for both Nowak and Gottlieb, among others.

The civil lawsuit claims Shak and his fellow plaintiffs lost tens of millions of dollars as a result of actions by J. P. Morgan’s traders.

A federal judge tells traders that they can combine cases (with the other 6 banks) as they accused JPMorgan of rigging the precious metals market
(courtesy CNBC)

Federal judge tells traders they can combine cases accusing JP Morgan of rigging metals market

  • Litigation in a separate civil case has been put on hold until at least May at the behest of the Justice Department, which is investigating a “related criminal case” that involves alleged market manipulation by precious metals traders at J. P. Morgan.
  • Judge John Koeltl of the Southern District of New York appointed the White Plains, N.Y., law firm Lowey Dannenberg as interim lead counsel for the proposed class action.

71671201

Spencer Platt | Getty Images

A group of traders from across the U.S. who allege that J. P. Morgan Chase manipulated precious metals markets for years are one step closer to bringing a class action suit against the nation’s largest bank.

Earlier this month, a federal judge said five separate lawsuits making similar allegations against the bank could be combined, potentially including thousands of people who traded in the precious metals market from Jan. 2009 through Dec. 2015.

Litigation in a separate civil case has been put on hold until at least May at the behest of the Justice Department, which is investigating a “related criminal case” that involves alleged market manipulation by precious metals traders at J. P. Morgan.

J. P. Morgan declined to comment on this story.

Judge John Koeltl of the Southern District of New York appointed the White Plains, N.Y., law firm Lowey Dannenberg as interim lead counsel for the proposed class action.

Vincent Briganti, a partner at the firm, filed the first suit seeking class action status in November on behalf of Dominick Cognata, a trader who alleges he suffered losses due to J.P. Morgan’s illegal trading conduct in the silver and gold futures and options markets.

That was after the federal court in Connecticut unsealed a criminal plea agreement by John Edmonds, a former J.P. Morgan metals trader. In his guilty plea, Edmonds, who is 36-years old, admitted that he and other “unnamed co-conspirators” fraudulently manipulated the precious metals markets while they were employed at J. P. Morgan from 2009 to 2015.

Edmonds said he had learned the illegal trading tactics from senior traders, and then used them hundreds of times with the knowledge of and consent of his immediate supervisors.

Briganti’s lawsuit also names John Edmonds and a group of yet-to-be-identified precious metals traders and the bank as defendants.

On Wednesday, the lawyers sent a letter to Judge Koeltl saying they were having difficulty locating Edmonds to serve him legal papers and requested a 30-day extension to do so, which the judge granted on Thursday. Briganti noted that they have been in contact with Edmonds’ attorney in the criminal case. Edmonds’ attorney and Briganti could not be reached for comment.

“We are hopeful that this extension will result in completing service on Mr. Edmonds without formal motion practice and a request for alternative means of service,” Briganti said in the letter.

The next step in the civil case is for the plaintiffs to file an amended class action complaint and set a schedule for defendants to respond.

In addition to the proposed class action, J. P. Morgan also faces a separate civil suit which also accuses the bank of rigging precious metals markets.

end

March 4.2019

Parker City News

JP Morgan faces potential class action lawsuit after guilty pleas by a former metals trader

Traders from across the U.S. are banding together to accuse J. P. Morgan Chase of manipulating precious metals markets for years.

At least six lawsuits, all making similar allegations against the nation‘s largest bank, have been filed in New York federal court in the past month, since federal prosecutors in Connecticut with a former J. P. Morgan Chase metals trader.

The cases could potentially include thousands of people who traded in the precious metals market. The White Plains, N.Y., law firm Lowey Dannenberg is asking the court to combine the cases and name it as the lead.

The law firm‘s commodities group is led by Vincent Briganti, the attorney who filed the first lawsuit on behalf of Dominick Cognata, a New York resident who alleges he suffered losses due to J. P. Morgan‘s trading conduct in the silver and gold futures and options markets.

A combined case, seeking class action status, would include anyone who purchased or sold futures contracts or an option on NYMEX platinum or palladium or COMEX silver or gold between at least Jan. 1, 2009, and Dec. 31, 2015. The lawyers believe that “at least hundreds, if not thousands” of traders would be eligible to join the case.

Named as defendants in all of the lawsuits are John Edmonds, a 36-year old former metals trader at J. P. Morgan, a group of yet-to-be-identified precious metals traders and the bank.

Edmonds, a New York resident, pleaded guilty in October to one count of conspiracy to defraud the market and manipulate prices of precious metals futures contracts and one count of commodities fraud. In the criminal plea, Edmonds admitted that he and other “unnamed co- conspirators” at J. P. Morgan, fraudulently manipulated precious metals markets from 2009 to 2015, the same time frame covered in the class action suits.

Briganti filed the initial class action on Nov. 7, just one day after the Justice Department unsealed Edmonds‘ plea in the U.S. District Court of Connecticut.

Edmonds admitted in his guilty plea that he deployed the illegal trading scheme hundreds of times with the direct knowledge and consent of his immediate supervisors. Plaintiffs say they have suffered economic injury, including monetary losses, as a direct result of actions by Edmonds and the other unnamed J. P. Morgan metals traders in the futures and options contracts.

One of the suits alleges that “the number of unlawful trades that JP Morgan traders executed in precious metals futures markets is at least in the thousands.”

J. P. Morgan declined to comment. Lowey Dannenberg did not respond to a request for comment by CNBC.

The Justice Department‘s criminal investigation is still ongoing and recently caused a separate related civil case to be put on hold for at least six months while the government continues its investigation. That civil lawsuit, which also accuses J. P. Morgan of rigging the precious metals market, was filed in 2015 by hedge fund manager Daniel Shak and two commodity traders.

After reviewing the details of the plea agreement, David Kovel, the attorney for Shak‘s suit, sought to re- interview Edmonds, along with two other current and former senior traders at the bank. However, the government argued that reopening questioning would be detrimental to the ongoing criminal investigation. The federal judge overseeing the proceedings ordered a six-month stay in the civil case.

Kovel declined to comment.

Edmonds was originally scheduled to be sentenced in Hartford, Conn., on Wednesday, Dec. 19, but a court filing on Nov. 27 shows the sentencing has been postponed until June. A spokesman for the U.S. Attorney for Connecticut could not elaborate on why the sentencing was postponed since the court filing is under seal.

-END-

Justice Department stalls another class action in gold market rigging, this one against JPM

 Section: 

9:47a ET Tuesday, March 5, 2019

Dear Friend of GATA and Gold:

Proceedings in the federal class-action anti-trust lawsuit against JPMorganChase charging the investment bank with manipulating the gold and silver futures markets —

http://www.gata.org/node/18844

— have been suspended for three months at the request of the U.S. Justice Department, just as the department has arranged suspension of proceedings in the class-action anti-trust lawsuit against Deutsche Bank charging similar market manipulation.

… 

In both cases the Justice Department has told U.S. District Court for the Southern District of New York that proceedings would jeopardize its criminal investigation into market rigging, which has been admitted by a former JPMorganChase trader, John Edmonds, who awaits sentencing.

According to court filings, the White Plains, New York, law firm representing the plaintiffs against JPMorganChase, Lowey Dannenberg, concurred in the government’s request to suspend proceedings. The stay is to continue for three months and may be extended.

The Justice Department’s motion, granted by the court on February 26 —

http://www.gata.org/files/JPMorganChaseClassActionStay.pdf

— said “the government is not seeking an open-ended stay that could indefinitely postpone this matter and thus jeopardize the parties’ interests in a timely resolution.” The motion added, “Any developments in the criminal case during the period the consolidated action is stayed may reduce or completely resolve the need to litigate certain issues in the consolidated action.”

Much of the Justice Department’s motion is redacted to conceal from the public evidence still under investigation. Edmonds has said he and other traders manipulated the gold and silver markets for years with the knowledge of their supervisors at JPMorganChase. In its motion to conceal that evidence, also granted by the court on February 26, the Justice Department said disclosure “could lead to destruction of evidence, flight from prosecution, and otherwise interfere with the government’s ability to conduct its investigation”:

http://www.gata.org/files/JPMorganChaseClassActionStaySeal.pdf

Monetary metals investors may be skeptical of the Justice Department’s stalling the Deutsche Bank and JPMorganChase cases, since the department and the U.S. Commodity Futures Trading Commission do not seem ever to have responded conscientiously to complaints of gold and silver market rigging until the class actions commenced.

How much time will the court give the Justice Department to delay getting to the bottom of the issue? The court might hasten matters if enough monetary metals mining companies protested the harm done to them and their shareholders by market rigging, but of course most monetary metals mining companies don’t mind at all.

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

* * *

Your early MONDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/7 AM EST

i) Chinese yuan vs USA dollar/CLOSED / LAST AT: 7.0339/ NOW PAST TO 7:1

//OFFSHORE YUAN:  7.0840   /shanghai bourse CLOSED DOWN 46.36 POINTS OR 1.61%

HANG SANG CLOSED DOWN 767.26 POINTS OR 2.85%

 

2. Nikkei closed DOWN 767.26 POINTS OR 2.85%

 

 

 

 

3. Europe stocks OPENED ALL RED/

 

 

 

USA dollar index DOWN TO 97.65/Euro RISES TO 1.1176

3b Japan 10 year bond yield: FALLS TO. –.19/ !!!! DEADLY!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 107.85/ 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//CARRY TRADERS GETTING KILLED

 

3c Nikkei now JUST BELOW 17,000

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

3e WTI:: 55.02 and Brent: 61.15

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO -.51%/Italian 10 yr bond yield DOWN to 1.53% /SPAIN 10 YR BOND YIELD DOWN TO 0.22%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.04: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 2.04

3k Gold at $1462.00 silver at: 16.43   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 26/100 in roubles/dollar) 64.98

3m oil into the 55 dollar handle for WTI and 61 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/IT STARTED TODAY WITH THE CURRENCY EXCHANGE PAST 7;1

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 106.10 DESTROYING 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 .9745 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0890 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 NEGATIVE territory with the 10 year FALLING to 0.51%

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 1.77% early this morning. Thirty year rate at 2.30%

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

6.  TURKISH LIRA:  UP  TO 5.5436..

Global Stocks Crash, VIX Surges, Europe Tumbles As Currency War Begins

U.S. equity futures slumped, European stocks tumbled and Asian markets were in freefall on Monday, after China finally struck back in its trade dispute with America, letting its currency plunge below the key psychological level of 7 vs the USD.

This unexpected escalation by Beijing, which sent the Yuan to a level last seen in 2008, spooked a selling panic across global risk assets, sending the S&P below 2,900, and world markets in a sea of red…

… as Treasuries, gold – and yes, cryptos – led a global bond rally as investors dashed to safer assets.

 

“Markets had not been expecting the latest US-China trade talks to conclude with any significant breakthrough last week, but very few expected President Trump to slap 10% tariffs on $300 billion worth of Chinese goods,” said Hussein Sayed, chief market strategist at FXTM.

In addition to the yuan devaluation, Bloomberg reported that China asked state buyers to halt their US agriculture imports. China’s US Ambassador said on Friday that if the US wants to talk about trade, then so will China, and if the US want to fight, so will China, while he added that new tariffs are an irrational and irresponsible act which Beijing will take new adequate countermeasures against. The Ambassador also commented on Hong Kong protests which he said are turning out to be violent as well as chaotic and should no longer be allowed to continue.

MSCI’s All Country World Index was down 0.7% on the day. That put it down almost 2% including Friday’s loss.

European stocks tumbled to a two-month low, suffering the biggest two-day sell-off in more than three years. The Stoxx Europe 600 Index fell as much as 2.1%, bringing the combined loss with Friday to the worst since June 2016 according to Bloomberg. An index tracking European basic resources stocks slumped as much as 3.8%, erasing its gains for the year, as iron ore and copper prices take a hit amid increasing U.S.-China trade tensions. The STOXX Europe 600 Basic Resources declines as much as 3.8%, before trimming loss to 2.9% at 8:30am in London, the region’s worst-performing sector on Monday.

Ahead of Monday’s plunge, European equities had already fallen 2.5% on Friday, the most since December, after the White House dangled the prospect of new tariffs over Chinese goods. Tensions escalated further today after China responded by letting the yuan tumble and asking state-owned companies to suspend imports of U.S. agricultural products.

 

Earlier in the session, Asian shares suffered their steepest daily drop in 10 months, with MSCI’s broadest index of Asia-Pacific shares outside Japan sinking 2.5% to depths not seen since late January. Japan’s Topix tumbled 1.8% to lowest close since Jan. 4 as the yen surged. Hong Kong’s Hang Seng Index lost 2.9% after protesters moved to shut down the city with a general strike. The Philippines’ benchmark was the region’s worst performer, dropping 3%. Investors moved to risk-off mode as the U.S.-China trade war escalated after U.S. president Donald Trump ratcheted up rhetoric by saying that he could boost levies on China to a “much higher number.” To counter the threat, China asked state-owned enterprises to suspend imports of U.S. agricultural products. South Korea’s Kospi Index declined 2.6% as the won weakened below 1,200 to the greenback for the first time since Jan. 2017.

And with S&P futures were down 1.4%, sliding below 2,900, the VIX index rose to 21.2%, its highest since May 9, while Europe’s equivalent hit its highest since early January.

 

“We reiterate our view to scale back equity positions to strategic allocations after strong gains year to date, amid the ongoing trade-related uncertainties,” Credit Suisse analysts wrote in a note to clients.

Meanwhile, China’s headaches persisted elsewhere, as protests continued in Hong Kong in which police fired tear gas into protesters, while Hong Kong authorities expect flight cancellations and other transport disruptions as 500k protesters plan a city-wide strike. Hong Kong Chief Executive Lam said protests have brought Hong Kong to the edge and protesters are pushing it to an extremely dangerous situation, while she added she will remain in her job to try and restore order.

The good news: Hong Kong Police said there is no chance of deploying People’s Liberation Army (PLA) officers in protests… at least for now. Most recently, reports that Beijing are to announce ‘something new’ regarding Hong Kong on Tuesday, an official has stated that Beijing’s position is largely unchanged., SCMP citing a source

Looking at the carnage in currencies, the biggest mover was of course the yuan, which fell past the key level of 7 to the dollar as Chinese authorities – expected to defend the currency at that level – allowed it to break through to its lowest in the onshore market since the 2008 global financial crisis. The offshore yuan fell to its weakest since international trading of the Chinese currency began. Headed for its biggest one-day drop in four years, it was last down 1.4% at 7.0744 in offshore markets.

“Over the past couple of years, China has kept the renminbi stable against the basket, but with the renminbi TWI (trade-weighted index) now testing the lower end of the range in play since 2017, investors may turn nervous, introducing another dose of volatility,” Morgan Stanley strategists wrote in a note to clients.

The currencies of other Asian economies closely linked with China’s growth prospects also dropped: a gauge of emerging-market currencies headed for its biggest drop in about a year. South Korea’s won tumbled 1.4$, its biggest one-day loss since August 2016, while India’s rupee and Mexico’s peso felt the brunt of the pain.

Developing-nation stocks fell for a ninth day, the longest streak of losses since December 2015. “There is probably more pain to come for EM currencies” given the unwinding of carry trades, reduction in growth exposure through equities and build-up in speculative wagers, Jason Daw, the Singapore-based head of emerging-markets strategy at Societe Generale SA, wrote in a report. “The strong policy signal by China has put the renminbi back in the driver’s seat; it will be a leader in the global currency cycle for the foreseeable future.”  Sterling hovered near 2017 lows at $1.2117, pressured by concerns about Britain exiting the EU without a trade deal in place.

On the other side, the Japaness yen saw its traditional safe haven bid, rising 0.7% to its highest since a January flash crash. The Swiss franc was also boosted by safe-haven demand, despite intervention by the SNB seeking to keep appreciation minimal. Trump is also eyeing tariffs on the European Union, but has yet to make a formal announcement. The euro was 0.3% higher to the dollar at $1.1137.

Meanwhile, the stock of negative yielding debt hit new record highs as Dutch 30-year government bond yields turned negative for the first time as euro zone yields sank further amid concerns about U.S.-China trade and a no-deal Brexit. U.S. 10-year Treasury yields dived 7 basis points to 1.77%, while Germany’s 10-year bund yields fell to -0.53%. The three-month to 10-year U.S. yield curve was at its most inverted in 11 years.

In geopolitical news, Iran seized an Iraq oil tanker that was allegedly smuggling fuel in the Gulf, although the Iraq Oil Minister denied any links to the tanker. Turkey plans to carry out an operation east of the Euphrates in Syria, while US and Russia have been notified.

Finally, oil extended losses with U.S crude down 1.55% at $54.8 and Brent down 1.55% at $60.92. Gold prices jumped more than 1% to their highest in more than six years, with spot gold prices up 1.1% to $1,456.51 per ounce.

US President Trump is to address the nation on Monday (10:00 ET) and suggested that more gun control may be needed following a mass shooting incident in El Paso, Texas in which 20 were killed, while there was also a mass shooting in Dayton, Ohio. Other expected data include PMIs. Linde and Marriott International are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures down 1.3% to 2,894.00
  • STOXX Europe 600 down 2% to 370.54
  • MXAP down 2% to 152.42
  • MXAPJ down 2.5% to 491.47
  • Nikkei down 1.7% to 20,720.29
  • Topix down 1.8% to 1,505.88
  • Hang Seng Index down 2.9% to 26,151.32
  • Shanghai Composite down 1.6% to 2,821.50
  • Sensex down 1.4% to 36,616.90
  • Australia S&P/ASX 200 down 1.9% to 6,640.30
  • Kospi down 2.6% to 1,946.98
  • German 10Y yield fell 2.2 bps to -0.517%
  • Euro up 0.3% to $1.1140
  • Italian 10Y yield fell 3.9 bps to 1.19%
  • Spanish 10Y yield fell 2.2 bps to 0.224%
  • Brent futures down 1.3% to $61.11/bbl
  • Gold spot up 1.2% to $1,457.46
  • U.S. Dollar Index down 0.2% to 97.87

Top Headline News from Bloomberg

  • China responded to Trump’s tariff threat with another escalation of the trade war on Monday, letting the yuan tumble to the weakest level in more than a decade and asking state-owned companies to suspend imports of U.S. agricultural products. Trump criticized Beijing for managing its currency unfairly and failing to keep promises to buy more U.S. crops
  • The yuan plunged beyond 7 per dollar for the first time since 2008 amid speculation Beijing was allowing currency depreciation to counter Trump’s latest tariff threat. PBOC says it’s able to keep yuan stable at a reasonable and balanced level
  • Hong Kong leader Carrie Lam warned of a “very dangerous situation” as protesters moved to shut down the Asian financial hub with a general strike on Monday after a ninth straight weekend of unrest in opposition to China’s tightening grip
  • HSBC Holdings Plc confirmed its plans to eliminate jobs, axing more than 4,000 posts and warning that senior executives will be a focus of the cutbacks. “We expect this year to have $650 million to $700 million of severance costs; that involves less than 2% of our workforce,” CFO Ewen Stevenson said in a call with analysts
  • Boris Johnson has dramatically boosted public spending since taking office, fueling speculation the U.K. prime minister is preparing not only for Brexit by Oct. 31, but a general election as well. The two are likely to be linked
  • India has revoked the special constitutional status of Kashmir in a move that’s drawn protests in parliament and risks deepening the deteriorating security relationship with rival Pakistan in the disputed region
  • Turkish banks approached the Treasury about swapping some of its local-currency bonds maturing early next year with longer-dated debt as the two sides discuss ways to soften the blow of a looming financing hump, according to four people with knowledge of the matter
  • Spanish King Felipe VI said it’s best for the nation to resolve the current political deadlock before holding new elections, newspaper El Pais reported Sunday
  • Iron ore has gone from high-flier to sinking star in a matter of weeks. Copper drops to two-year low as the latest U.S. tariffs on China fueled a global market sell-off

Asian equity markets were lower across the board as the stock rout resumed from last week’s tariff announcement by US President Trump and with retaliation from China in which it asked state-run purchasers to halt US agriculture imports, while a collapse in the CNH through the 7.00 handle also exacerbated the risk averse tone. ASX 200 (-1.7%) weakened with the trade sensitive sectors such as tech and materials front-running the declines, although gold names bucked the trend on the precious metal’s safe-haven status, while Nikkei 225 (-1.7%) was pressured by a firmer currency and several disappointing earnings including Kobe Steel and Yahoo Japan. Hang Seng (-2.8%) and Shanghai Comp. (-1.6%) also slipped amid the escalation of trade tensions with underperformance in Hong Kong as protests continued and with a 500k-strong city-wide strike said to be planned which disrupted public transport and saw more than 130 flights cancelled, while the latest Hong Kong PMI data printed at a decade low due to the impact from the ongoing disorder and trade dispute. Furthermore, a miss in Chinese Caixin Services PMI added to the glum, with the selling exacerbated after the PBoC weakened the reference rate which pressured CNH to a record low against the greenback past the 7.0000 level seen by some to be a sticking-point for China and in turn, raised concerns of China weaponizing its currency. Finally, 10yr JGBs were underpinned as the widespread risk averse tone spurred safe-haven buying which saw 10yr JGB futures post a record high and the 10yr yield drop to its lowest in 3 years at around -0.2%, while T-notes also found support overnight and the BoJ were present in the market today under its massive bond buying program.

Top Asian News

  • India Seeks to Revoke Special Autonomy to State of Kashmir
  • China’s Bond Market Leverage Ratio Falls on Lower Liquidity
  • Macau’s Gaming Regulator Clamps Down on Use of AI in Casinos
  • Philippines Central Bank Chief Sees 50bps Rate Cuts Rest of Year

Major European bourses have begun the week firmly in negative territory [Euro Stoxx 50 -1.4%] following on from a downbeat Asia-Pac handover after market sentiment took a hit from dwindling trade hopes as China asked state-run purchasers to halt US farm goods imports. Additionally, the collapse of the CNH to 7.0+ status vs. the USD also added further jitters to the trade-sensitive sentiment. Indices are firmly in the red but have crawled off lows in recent trade after China State Planner dismissed President Trump’s accusation that China has not bought US farm goods, adding that US and China agreed to China will purchase 14mln tonnes of soybeans from the US, with 2mln to be loaded in August. Sectors are in the red across the board with some mild resilience in defensive sectors. To the downside, miners fare the worst amid the freefall in base metal prices due to a bleaker demand outlook in the sector as protectionism ramps up. Thus, ArcelorMittal (-4.5%), Antofagasta (-3.3%), Rio Tinto (-2.4%), and Anglo American (-3.5%) have all fallen to the foot of their respective bourses. However, Fresnillo (+4.0%) bucks the miners’ trend as the Co. benefits from the safe-haven surge in gold prices. European luxury names and the auto sectors are also bearing the brunt of the US-China trade spat with LVMH (-2.9%), Kering (-2.1%), Volkswagen (-2.7%), Daimler (-2.5%), BMW (-2.4%) and Peugeot (-3.1%) all lower as a result. In terms of individual movers HSBC (-1.0%) shares opened lower due to the surprise stepping-down of CEO Flint, despite improvements in its metrics and the announcement of a share buyback program.

Top European News

  • U.S. Imposes More Sanctions on Russia for Chemical Agent Use; Russia’s Ruble Bucks EM Rout With Sanctions More Bark Than Bite
  • U.K. 10-Year Bond Yield Slides to Record Low on Haven Buying
  • Ascom Slumps to Six-Year Low as CEO Quits, 1H Hit by Poor Demand
  • Euro-Area Growth Momentum Slides as Industry Pain Overwhelms

In FX, the Aussie has been hit particularly hard by the Yuan’s slide through 7.0000 vs the Greenback on and offshore after the PBoC raised its official mid-point fix to 6.9225 overnight from 6.8996 last Friday. However, the sharp Cny and Cnh depreciation was sparked by reports that China has halted US agricultural produce purchases in retaliation to President Trump’s fresh tariff threat, with a softer than expected Caixin services PMI not helping as the composite PMI hit a 5 month low and Hong Kong’s headline print plunged to 42.8. All this undermining broad risk sentiment and base metals like iron or, with Aud/Usd dipping under 0.6750 at worst in the run up to the RBA policy meeting overnight with options pricing in a 50 pip break even that could expose the early January 0.6715 flash crash low if the Bank firmly flags more easing after a widely anticipated pause this time round – see the headline feed and/or Research Suite for a full preview.

  • NZD/CAD/GBP – Also victims of heightened risk aversion amidst rising US-China trade tensions, with the Kiwi down though 0.6500 at one stage vs its US peer, but holding up a bit better than the Aussie ahead of Wednesday’s RBNZ rate decision that is unanimously forecast to result in the OCR being cut by a further 25 bp to 1.25%, mainly due to supportive cross-winds as Aud/Nzd reverses through 1.0400 again. Meanwhile, the Loonie is back below 1.3200 against the backdrop of retreating crude prices and with trading volumes impaired by Canada’s Civic holiday, but the Pound has gleaned some support from another UK PMI beat and by a greater margin in services compared to manufacturing and construction. Indeed, Cable has bounced from close to 1.2100 and Eur/Gbp stopped just shy of 0.9200, though remains elevated on persistent no deal Brexit concerns.
  • CHF/JPY/EUR – In stark contrast to the above, and to the overall detriment of the US Dollar (DXY losing more post-NFP momentum and sub-98.000) the Franc, Yen and Euro are all outperforming on safe-haven grounds, with Usd/Jpy probing through 106.00 and beneath a key Fib (106.06) that could be crucial on a closing basis. Usd/Chf is under 0.9750 and Eur/Usd has rebounded firmly to 1.1150 from 1.1105 even though Eur/Chf has fallen further below 1.0900 towards 1.0850 amidst mixed Eurozone services PMIs and a bleak Sentix survey.
  • EM – Regional currencies are generally weaker vs the Buck on the aforementioned risk-off environment, but once again the Try is holding up better than rivals within a 5.5490-6175 range as the Lira responds favourably to Turkish inflation data that was not as strong as expected, plus the CBRT’s RRR moves that will culminate in a net Usd2.1 bn liquidity drain.
  • CBRT says RRR for FX deposits/participation fund have been increased by 100bps for all maturity brackets, remuneration rate for USD-denominated RR,Reserve options and Free Reserves held at the CBRT had been decreased by 100bps. (Newswires)

In commodities,WTI and Brent futures are on the backfoot due to the prospect of lower global demand amid the seemingly widening gap between US and China in trade, in turn souring sentiment. WTI now straddles north of the USD 55/bbl mark while its Brent counterpart has just reclaimed USD 61/bbl after finding a base below the round figure. Looking ahead, tomorrow sees the release of the EIA Short-Term Energy Outlook, followed by the IEA Monthly Oil Report on Friday. Elsewhere, metals markets were rattled by the latest developments in the US-China saga with spot gold jumping over 1% to a peak of 1459/oz, the highest level in six years. Meanwhile, copper prices slumped to a 2-year low, but have since crawled off lows, with the red metal increasingly threatening USD 2.5/lb to the downside. Finally, Dalian Iron ore futures hit limit down after crumbling over 6% after declining below USD 100/tonne amid demand woes from the aforementioned US-China fallout, which was exacerbated by rising stockpiles of the raw material.

US Event Calendar

  • 9:45am: Markit US Services PMI, est. 52.2, prior 52.2;  Markit US Composite PMI, prior 51.6
  • 10am: ISM Non-Manufacturing Index, est. 55.5, prior 55.1
  • 1:30pm: Fed’s Brainard Speaks on the Payment System

DB’s Jim Reid concludes the overnight wrap

Friday was very nearly the last Early Morning Reid ever. I finished up writing it early as usual, got on my bike to the station and on route got hit by a car and was flung in the air and off my bike. The guy didn’t stop at a roundabout and took me out while I was nearly exiting it. What saved me was that I was so far round the roundabout that he bashed me at an angle and into the curb and didn’t run over me. I’ve got a lot of scrapes, a sprained ankle and a heavily bruised coccyx (I hope only) from my landing. Oh and a ripped pair of GAP chinos. A van behind had a dashcam so the footage is available so you can all see for yourselves how lucky I was and judge the quality of the car driving!! I’ve put the link to the clip on my Bloomberg header or let me know and I’ll send it to you.

So I feel fortunate to see this coming week in markets. Hopefully the zen feeling of just being glad to be here carries on for a while yet! After last week’s high-octane news flow, you would naturally think things will calm down from here but markets will struggle to relax given all that’s going on. Indeed the breaking news this morning that the onshore and offshore Chinese Yuan have broken through the key level of 7.0 has caused a mini shockwave through markets already in Asia and goes to show that last week’s fallout will very much continue to dictate markets in the near term. August can be quite a difficult month as negative news flow can also be exaggerated by a lack of liquidity. So be warned. Our asset allocation team led by Binky Chadha have been raising red flags of late suggesting that the S&P 500 is still well above the 2700 or so level implied by current growth indicators. The US 10y yield is pretty much in line ( link ). However as they point out, leading indicators of growth continue to point to further slowing to come, even before taking the impact of the latest escalation into account. In their view, a resolution of the trade war, and not Fed easing, is the key for a turn-up in growth. See their latest from Friday night here ( link ). There’s also an interesting piece on how systematic strategies have been the key marginal drivers of the US market, and how their equity allocations are currently very elevated.

Back to Asia where as mentioned all the focus this morning is on the moves in the FX market. Both the onshore CNY and offshore CNH have weakened to 7.0274 and 7.0772 respectively as we go to print, moves of -1.25% and -1.45%. The PBoC have said that the moves are due to tariff expectations and protectionism and that the central bank will fight against short-term speculation on the Chinese currency and stabilize market expectations. There’s been plenty of debate as to whether China would let the currency weaken past 7.0 so this is a very significant move especially as authorities had explicitly capped a move past 7.0 following the May 5th breakdown in talks. The question for the market now is what will be the response of the US administration and will they argue for currency manipulation in offsetting the impact of the tariffs.

The significance of the moves are certainly not to be underestimated and we’re already seeing a fallout at a broader asset level in markets. The biggest falls in equity markets have been for the Hang Seng (-2.89%) and Nikkei (-2.28%) while the CSI 300 and Shanghai Comp are down -1.03% and -0.81% respectively. The Kospi is also down -2.10% and ASX -1.64% while futures on the S&P 500 and NASDAQ have dropped -1.23% and -1.58% respectively. In rates, 10y JGBs immediately dropped -2.0bps to -0.197% while Treasuries have rallied a fairly incredible -7.2bps to 1.773%. Rarely have we seen such a big move in Treasuries on a Monday morning. The short end hasn’t quite rallied as much meaning the 2s10s curve is 2.7bps flatter at 13.4bps. The market is also now pricing in 59bps of cuts by the Fed by the end of this year. Meanwhile Gold is up +0.82% while the likes of WTI oil is down -1.22%. In the rest of FX the Yen (+0.55%) and Swiss Franc (+0.38%) are the notable perceived safe-haven outperformers while the likes of the South Korea Won (-1.33%) and Mexican Peso (-0.87%) have dropped. Indeed South Korea have called the move in the Won “excessive” and “abnormal” while Japan have stated that they are watching moves in the FX market “with urgency”.

It’s worth noting that this morning China also asked state-owned companies to suspend imports of US agricultural products which is clearly adding to the negative circle of newsflow while China’s Caixin services PMI was reported as dropping 0.4pts in July to 51.6 and below expectations for 52.0.

So, no time to recover from last week and already plenty to consider and in terms of events outside of the trade war this week we’ve also got US/European earnings season continuing, albeit at a reduced pace, while data highlights include the important global services PMIs (today), German factory orders (tomorrow – after the steepest fall since Sept ‘09 last month), Q2 GDP from Japan and the UK (both Friday), Chinese trade balance for July (Thursday), and China CPI/PPI (Friday). We’ll also get monetary policy decisions from the Reserve Bank of India (Wednesday) and the Reserve Bank of Australia (Tuesday) which will be important given the ratcheting up of the trade war.

In terms of other central bankers, we’ll see the return of Fed speakers after their blackout period and last week’s FOMC. St Louis Fed President Bullard will be speaking tomorrow, followed by Chicago Fed President Evans on Wednesday. Meanwhile on Thursday, the ECB will release their latest Economic Bulletin.

Earnings season continues, although at a slower pace than last week, with 62 S&P 500 companies reporting, along with a further 78 in the STOXX 600. The highlights this week include HSBC and Linde today; Walt Disney on Tuesday; Unicredit, AIG, Commerzbank, Glencore and Booking Holdings on Wednesday; Deutsche Telekom, Zurich Insurance Group and Aviva on Thursday; and Novo Nordisk on Friday. The day by day week ahead is at the end as usual.

To recap last week, equity markets sold off following a perceived disappointing Powell FOMC press conference and the escalation of the trade war, with President Trump announcing that 10% tariffs would be placed on a further $300bn of Chinese imports from September 1st.The S&P 500 declined every day last week to finish down -3.10% for the week (-0.73% Friday), while the NASDAQ fell -3.92% (-1.32% Friday) as both indices experienced their worst week of the year so far. The Dow Jones had a slightly smaller fall however, down -2.60% (-0.37% Friday). European markets were also reeling on Friday as they reacted to Thursday evening’s tariff news, with the STOXX 600 having its worst day of the year so far, losing -2.46% on Friday, bringing its losses for the week to -3.22%.

Fixed income rallied however, as investors flocked to safety and hoped for further monetary stimulus. 10yr Treasury yields fell for a 6th consecutive session on Friday, ending the week down -22.5bps (-4.8bps Friday) to their lowest level since President Trump’s election, while ten-year bund yields fell -11.9bps (-4.6bps Friday) to a fresh all-time low. German 30-year yields fell -20.4bps last week to close at +0.5bps, and at one point intra-day on Friday actually yielded negative for the first time ever. Pretty crazy really. Other safe havens also rallied last week, with gold ending the week up +1.55% while the Japanese Yen strengthened by +1.95% against the dollar, its biggest weekly appreciation since February 2018. Credit spreads widened considerably however, with indexes of cash HY spreads in the US and Europe up +26bps and +27bps respectively (+7bps and +23bps Friday). Meanwhile, in a sign that central bank easing doesn’t seem to be persuading markets on inflation expectations, or that trade wars/growth fears outweigh them, five-year forward five-year inflation swaps fell in the US and Europe last week, down by -10.6bps (-1.7bps Friday) and -13.3bps (-8.2bps Friday) respectively to reach 2.01% in the US and 1.22% in Europe.

The other main event on Friday was the US jobs report, which came almost exactly in line with expectations at +164k (vs. +165k expected), though the prior two months were revised down by -41k. The three-month average also fell to 140k, the lowest since September 2017. Earnings rose slightly above expectations at +3.2% (vs. 3.1% expected) while the unemployment rate remained at 3.7% (vs. 3.6 expected). In more positive news, the broader U6 measure that includes those underemployed fell to 7.0%, the lowest since December 2000. From Europe, the main data release was Eurozone retail sales for June, which rose by +1.1% mom in June (vs. 0.3% expected), the strongest mom gain since November 2017. The move brings the yoy change to +2.6% (vs. +1.3% expected).

 

3A/ASIAN AFFAIRS

I)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 46.36 POINTS OR 1.61%  //Hang Sang CLOSED DOWN 767.26 POINTS OR 2.85%   /The Nikkei closed DOWN 767.26 POINTS OR 2.85%//Australia’s all ordinaires CLOSED DOWN 1.98%

/Chinese yuan (ONSHORE) closed DOWN  at 7.0339 /Oil DOWN TO 55.02 dollars per barrel for WTI and 61.15 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED//ONSHORE YUAN CLOSED DOWN // LAST AT 7.0339 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.0840 TRADE TALKS STALL//YUAN LEVELS NOW PAST  7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED// AND NOW CHINA RETALIATES!!  : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25% AND NOW ANOTHER 10% RISE IN SEPTEMBER

 

 

3 a./NORTH KOREA/ SOUTH KOREA

South Korea

 

b) REPORT ON JAPAN

 

3 C CHINA

SATURDAY/HONG KONG

40,00 civil servants rally in Hong Kong ahead of a city wide strike

(COURTESY EPOCH TIMES/EVA FU)

40,000 Civil Servants Rally in Hong Kong Ahead of Citywide Strike

BY EVA FU

August 2, 2019 Updated: August 2, 2019

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Chater Garden in the heart of Hong Kong’s bustling financial district of Central was again packed with protesters on Aug. 2 evening. According to organizers, an estimated 40,000 civil servants showed up in rare defiance against the Hong Kong government.

 

civil servants hong kong
Demonstrators gather and hold placards during a rally organized by civil servants at Chater Garden in the Central district in Hong Kong, on Aug. 02, 2019. (Billy H.C. Kwok/Getty Images)

The crowd had gotten so large that they spilled over to surrounding streets and a nearby skybridge, and forced several roads to close.

hong kong chater garden
Demonstrators gather during a rally organized by civil servants at Chater Garden in the Central district in Hong Kong, on Aug, 02, 2019. (Billy H.C. Kwok/Getty Images)

The rally reiterated the five demands that protesters have repeated in the past few months as they opposed a controversial extradition bill: drop all charges against arrested protesters; withdraw the bill; establish an independent commission to investigate police use of force; call for current Hong Kong leader Carrie Lam to resign; and institute universal suffrage.

The bill, which has been indefinitely suspended amid public outrage, would have allowed the Chinese regime to seek extradition of criminal suspects. It has drawn widespread opposition as Hongkongers fear that dissidents could be punished at will, and the city’s rule of law eroded.

HONG KONG-CHINA-Protest
People attend a protest held by civil servants in the Central District of Hong Kong in the latest opposition to a planned extradition law, on Aug. 2, 2019. (Anthony Wallace/AFP/Getty Images)

Meanwhile in nearby Edinburgh Place, medical workers also staged a mass rally demanding the release of a nurse who was arrested on July 28 as she was tending to injured protesters. Organizers said that around 10,000 attended the demonstration.

The Friday events follow a flash mob hosted by the city’s banking professionals on Thursday, in solidarity with protesters’ demands.

HONG KONG-CHINA-Protest
Members of the territory’s medical sector attend a protest in the latest opposition to a planned extradition law in Edinburgh Place, Hong Kong, on Aug. 2, 2019. (Anthony Wallace/AFP/Getty Images)

Citizens First

Themed “Civil Servants Stand Together With the Public,” the civil servant rally took off at 7 p.m. local time, despite a stern government warning issued the previous day reminding the city’s roughly 180,000 civil servants to be loyal to the administration.

“The Hong Kong government will absolutely not accept any conduct that challenges the principle of civil servants’ political neutrality,” the statement read. “Regardless of their political ideology, civil servants must show unreserved loyalty to the current chief executive and the government.” It also warned of serious consequences should civil servants violate rules regarding political neutrality.

HONG KONG-CHINA-Protest
Members of the territory’s medical sector attend a protest in Edinburgh Place in Hong Kong on Aug. 2, 2019. (Anthony Wallace/AFP/Getty Images)

Many at the rally said that they felt compelled to come out despite the pressure. A customs official surnamed Zhang told the Hong Kong bureau of The Epoch Times that although he would be impartial in fulfilling his duties as a civil servant, he was “first a Hongkonger and therefore also needs to be loyal to the Hong Kong citizens.”

Zhang added that recent events, such as the police denying applications to hold marches and firing rubber bullets and tear gas at protesters, showed that even Hongkongers’ right to peaceful assembly were being stripped away. Thus, he felt the need to give support to the protesters.

hong kong protest
Demonstrators gather and hold placards that reads “Safeguard Future” during a rally organized by civil servants at Chater Garden in the Central district in Hong Kong, on Aug 02, 2019. (Billy H.C. Kwok/Getty Images)

Several other retired officials echoed the sentiment during rally speeches.

Joseph Wong, former Secretary for the Civil Service, said that civil servants are duty-bound to point out anything in the leadership’s conduct that deviates from the rule of law. He as well as former Legislative Council member Margaret Ng both agreed that that the rule of law is superior to any government official.

“Having been a lawmaker for 18 years, I want to share a thought from the bottom of my heart,” Ng said. “The biggest asset that Hong Kong has for the democratic system and democratic elections is that we have a group of professional, outstanding civil servants who understand and protect the fair system, and who can bring their professional input to the administrative branches dutifully and with impartiality.”

She added: “Cheers to them at this tough moment in time.”

HONG KONG-CHINA-Protest
People attend a protest held by civil servants in the Central District of Hong Kong on Aug. 2, 2019. (Anthony Wallace/AFP/Getty Images)

Marches and protests have been planned for the weekend, in Hong Kong’s Mong Kok, Tseung Kwan O and Sai Ying Pun districts.

For Aug. 5, protesters are calling for a general strike. Organizers are planning several rallies in various neighborhoods around the city, though police have yet to grant approval for any of the locations, according to Hong Kong public broadcaster RTHK. Initially suggested on the popular online forum Lihkg.com, the strike has since acquired endorsements from pro-democracy lawmakers, trade unions, the city’s teachers’ association, 34 banks, airlines, as well as several associations in the local entertainment industry.

A dozen of RTHK presenters will also join the strike, along with at least 2,000 social workers.

END
Hong Kong
Hong Kong police fire tear gas as the peaceful protest turns chaotic
(zerohedge)

Hong Kong Police Fire Tear Gas As Peaceful Protest Turns Chaotic

As a peaceful Saturday demonstration spiraled into chaos, Hong Kong police have fired tear gas at anti-government activists who have been protesting for nine weeks against a controversial bill which would have allowed people to be extradited to mainland China to stand trial.

 

Photos via SCMP

Protesters donning hard-hats, masks and other gear could be seen hurling bricks at the Tsim Sha Tsui Police Station in Mong Kok province, while others set fire to garbage cans and other debris in the streets, according to SCMP.

Victor Ting@VictorTing7

WATCH: Protesters enveloped by tear gas as they retreat down Nathan road

Embedded video

Rachel Cheung@rachel_cheung1

First round of tear gas fired onto Shan Tung Street. A team of rushed into work and one tossed the tear gas canister back towards the police.

Embedded video

Protesters could be seen hurling bricks at the Mong Kok province police station, while others vandalized walls, vehicles and lamp posts.

A day after thousands of civil servants took to the streets in Central to urge authorities to give in to protesters’ demands, people gathered on Saturday for an approved rally in the shopping hub of Mong Kok, but which soon splintered off into different directions, ending in clashes in Mong Kok and Tsim Sha Tsui as police used tear gas.

Outside Tsim Sha Tsui Police Station, some had hurled bricks into its car park, while others vandalised vehicles and lamp posts. The force said it had issued a warning for the crowd to leave before firing rounds of tear gas. 

Earlier, protesters marched all the way to the Cross-Harbour Tunnel, briefly blocking it and bringing traffic to a halt, before circling back to Mong Kok and Tsim Sha Tsui. Along sections of the main thoroughfare Nathan Road, some set up barricades and geared up with helmets and masks as night fell. –SCMP

Rachel Cheung@rachel_cheung1

Riot police charged towards the crowd on Nathan Road and arrested a number of protesters.

Embedded video

According to reports, thousands of civil servants have defied government orders not to join the protests – and were met with applause from Hong Kong residents as they took to major roads in the heart of the city’s business district.

“I think the government should respond to the demands, instead of pushing the police to the frontline as a shield,” 26-year-old government worker Kathy Yip told Reuters.

Protesters are also demanding that the government look into allegations of police abusing their power, as well as a full withdrawal of the extradition bill, which has only been suspended for now. They are also demanding that all arrested protesters be exonerated, along with the implementation of universal sufferage and that the government stop referring to their demonstrations as riots.

Will China intervene?

As we reported on FridayBloomberg thinks that the Chiense military could soon intervene after reports emerged last week that Chinese security forces had amassed just outside the semi-autonomous city. TThis was followed by the chief of the Chinese military garrison in Hong Kong warning this week that the army stands ready to “protect” Chinese sovereignty.

Chinese military officials, and especially state media have begun floating the argument for “military options” and intervention. Officials also recently described the US as a “black hand” behind the anti-Beijing protests – which began over a proposed extradition bill – something which the US state department dismissed as “ridiculous”.

Bloomberg TicToc

@tictoc

⚠️ Armed soldiers and water cannons

China’s People’s Liberation Army in Hong Kong posted this video on social media as the protests stretch on

Embedded video

According to the Bloomberg report, “A senior Trump administration official told reporters Tuesday that the White House was monitoring a congregation of Chinese troops or armed police gathering across the mainland border from Hong Kong. The nature of the build-up was unclear, and the report coincided with a swearing-in ceremony for 19,000 officers in the neighboring province of Guangdong.

If Chinese security forces do intervene in the Hong Kong protests, the “worst-case scenario” would likely include a declaration of martial law or a state of emergency, while intervention from Beijing could also prompt the US to rescind Hong Kong’s preferential trading designation.

“There may be a possibility that they need to call for the PLA,” according to Kevin Lai, an economist at Daiwa Capital Markets Hong Kong Ltd., who added that the odds are still low. “If they do that, it would be very negative for Hong Kong.”

China’s new UN reprsentative, Zhang Jun, meanwhile, appeared to suggest that action from Beijing was imminent – saying that the protests in Hong Kong are “really turning out to be chaotic and violent and we should no longer allow them to continue this reprehensible behavior.”

end

Sunday/Hong Kong

Despite a crippling mass strike, Lam states that she will not resign.

(zerohedge)

With Hong Kong Crippled By Mass Strike, Lam Says She Won’t Resign, Condemns Protesters For Creating “Very Dangerous Situation”

While the world is transfixed by the fireworks unleashed by the plunge in China’s yen to a record low, the real geopolitical hotspot for China remains Hong Kong, and there things are getting progressively uglier following Monday morning’s press conference by Karrie Lam who once again said she will not resign, and warned that “some people” have put Hong Kong in a very dangerous situation as protesters’ actions challenge the “one country, two systems” model and threaten prosperity by seeking to ruin the city by calling for “revolution” or the “liberation of Hong Kong.”

Bloomberg Next China

@next_china

Hong Kong leader Carrie Lam on why she will not resign: “I don’t think at this point in time resignation of myself or some of my colleagues will provide a better solution.” http://bloom.bg/2KqkGhV pic.twitter.com/C3KHxf2Aen

In a press conference in which Lam was flanked by eight top officials, including chief secretary, chiefs of finance, commerce, transport, security, health and civil service as well as home affairs undersecretary, she said she is taking responsibility by staying on to serve, arguing that resignations by her or others won’t help (several million protesters would beg to differ). Her solution: “Upholding the rule of law is the way out”, by which she means the people conceding to Beijing’s demands.

 

“Such extensive disruptions in the name of certain demands or uncooperative movement have seriously undermined Hong Kong’s law and order, pushing our city, the city we all love and many of us helped to build, to the verge of a very dangerous situation,” Carrie Lam says.

“The government will be resolute in maintaining law and order of Hong Kong and restoring confidence” she said, adding that “we all love Hong Kong and have made various contributions to its stability and prosperity … it’s time to say no to chaos and violence.”

The only problem is that the only ones who are eager to say “no to chaos and violence” are various Triad-linked thugs, and of course, the Chinese People’s Liberation Army, which according to report is massing on the Hong Kong border, just waiting for the green light to, well, “liberate.”

Additionally, Lam said that protests have already deviated from the original demand, Lam said. She didn’t say much on calls for an independent inquiry into police action and recent events. The General Chamber of Commerce has joined protesters in calling for an inquiry.

In a surprising reversal from prior periods when China would sternly ignore the events in Hong Kong, today even the People’s Daily tweeted account has been following every twist in the much anticipated Lam presser, quoting her verbatim as mainland China’s attention is now squarely focused on how Beijing will quell the Hong Kong rebellion.

People’s Daily, China

@PDChina

is on the verge of a very dangerous situation; HK govt respects protestors’ rights to express opinions but they should also respect others’ rights, HK Chief Executive Carrie Lam said Mon, adding that an emergency mechanism has been put in place to deal with Mon strikes.

View image on Twitter

Meanwhile, financial Secretary Paul Chan warned Hong Kong risks a recession on protests and outside factors like trade.

He may be on to something: on Monday, a paralysing citywide strike as part of the escalating anti-government protests forced Hong Kong airport authorities to cancel some 230 flights on Monday morning. Air traffic controllers have called in sick en masse, echoing the actions of an estimated 500,000 Hongkongers from more than 20 business sectors.

The number of flights that can take off, or land, has been affected as a result, and authorities said only one of the two runways would be in operation from midday on Monday until 6am on Tuesday. Only 34 flights would be permitted per hour during that, instead of up to the 68 per hour that normally take off from the city’s international airport, according to SCMP, with flights across Asia bearing the brunt of the cancellations.

Trains and planes are also being disrupted, with multiple subway lines suspended or delayed and hundreds of flights canceled.

Finally, as Bloomberg notes, Hong Kong Police will start holding daily press briefings from today and there will be a cross-departmental briefing by the government.

Of course, after weeks of protests and with today’s crippling strike, the last thing Hong Kong stock investors needed was for the yuan to break 7 per dollar on Monday, however that’s what they got, and between the trade and now currency war, and the ongoing tensions in Hong Kong, as well as the paralyzing strike, the pace of equity losses accelerated ahead of the midday break, with the MSCI Hong Kong Index tumbling 3.3% and the bottom is not yet in sight.

But all that pales in comparison to the USD-pegged HG dollar, which in sympathy with the offshore yuan has tumbled, sliding as much as 0.11% to 7.8354 Monday, its lowest since June 12. Will it plunge further and validate Kyle Bass’s thesis of massive capital outflows and a banking sector crisis, it remains to be seen.

end

Monday Hong Kong

Violent chaos in Hon Kong on Monday: police stations set on fire and massive citywide strikes paralyzed the city.  The Hong Kong dollar vs USA collapses as dollars flee both Hong Kong and Mainland China as they all now a massacre will commence upon them from the Mainland authorities..

(zerohedge)

Violent Chaos Breaks Out In Hong Kong: Police Stations Set On Fire, Triads Beat Protesters, City Paralyzed

The situation in Hong Kong is rapidly deteriorating, with violence breaking out in seven locations Monday afternoon as the citywide strike continues.

 

White shirted ‘triad’ members beat protesters (via SCMP)

What were supposed to be peaceful sit-ins in different districts turned into riots, “with Wong Tai Sin and Harcourt Road seeing the most intense confrontations as protesters kneel instead of flee, to shield themselves while tear gas rounds and sponge grenades rain on them,” according to SCMP.

AFP news agency

@AFP

VIDEO: 🇭🇰 Hong Kong riot police clash with pro-democracy protesters in the working-class district of

Embedded video

AFP news agency

@AFP

VIDEO: 🇭🇰 Hong Kong police launch rounds of tear gas and try to clear pro-democracy protesters who had gathered near a police dormitory in the working-class district of

Embedded video

Protesters threw a suspected gasoline bomb at police after first being attacked by bricks.

Karen Zhang@karenised

20:00 A suspected gasoline bomb was thrown by protesters to the police who were resting on Tai Po Tai Wo road near the crossroad with Nam Wan Rd. The police were attacked suddenly first by bricks from the protesters and then the bomb.

Embedded video

Riot police used crowd control measures in at least five locations – targeting those filing the streets. 82 people were arrested for offences including rioting, unlawful assembly, assaulting a police officer, obstructing police and possession of offensive weapons.

Neil Taylor@mrneiltaylor

Tear gas in Admiralty

Embedded video

Fighting broke out between protesters and local residents, while reports of ‘white shirted’ men believed to be triad gang members began beating protesters as the evening devolved.

SCMP News

@SCMPNews

: A group of white-shirted men brandishing rods are attacking protesters in North Point http://sc.mp/tiw1

Embedded video

Michael Zhang 張雨軒@YuxuanMichael

BREAKING – Fighting has broken out at North Point between Protesters and local residents.

Embedded video

Michael Zhang 張雨軒@YuxuanMichael

Here’s the aftermath. Protesters chased the men with sticks up the hill and broke the windows of a residential building. To clarify, unclear if men with sticks are residents. Overheard some speaking in Cantonese and some speaking Mandarin.

Embedded video

 

Via CNN

Protesters also started a fire at the Tuen Mun police station after spray painting its wall with profanities:

SCMP News

@SCMPNews

: Protesters set fires at and besiege police stations, throw national flag into water as chaos reigns across Hong Kong http://sc.mp/tiw1

View image on TwitterView image on TwitterView image on TwitterView image on Twitter

In response to the unrest, Cathay Pacific airlines canceled over 150 flights and urged passengers to postpone non-essential travel according to CNN.

Cathay Pacific urged customers not to flyMonday and Tuesday, and said it would waive fees for rebooking. Shares in Cathay plunged more than 4% during trading Monday.

The airline is the city’s flagship carrier. It flies about34 million passengers every year and serves nearly 200 cities around the world from its hub at Hong Kong’s international airport.

Hong Kong Airlines, a smaller carrier, said it has canceled 32 flightsUnited Airlines said its flights were unaffected.

More than 2,300 aviation workers took part in the strike, including 1,200 Cathay cabin crew and pilots, according to the Hong Kong Confederation of Trade Unions.

Service was suspended for more than an hour Monday morning on the Airport Express, which is a line that zips people between the airport and the city center in under 25 minutes. –CNN

Meanwhile:

Kyle Bass

@Jkylebass

HKD running for the exits before beijing’s planned massacre. Investors have lost trust…and history tells us what happens next

View image on Twitter

end

MONDAY/Mainland China
Deadly!! China undergoes a currency war by causing ii’ts yuan to crash past 7 :1. Beijing suspends all USA agriculture imports.  Global markets tumble as this will force other nations to lower their currency as this is a race to the bottom
(zerohedge)

Currency War Begins: Chinese Yuan Crashes Past 7 To New Record Low; Global Markets Tumble After Beijing Suspends US Agri Imports

Update 2: – China’s central bank has confirmed that it is, indeed, on, saying that it is able to keep the yuan exchange rate at a reasonable and balanced level – whatever that means – while acknowledging that the Yuan plunging beyond 7 per dollar is due to market supply and demand, trade protectionism and expectations on additional tariffs on Chinese goods.

Meanwhile, resorting to its old, tired and worn out tricks, Dow Jones reports that the PBOC will crack down on short-term Yuan speculation, and anchor market expectations.

Which is great… if only the PBOC didn’t say exactly the same back in May, when it warned currenct traders that  those “shorting the yuan will inevitably suffer from a huge loss.

Three months later, it’s currency traders 1 – Beijing 0.

* * *

Update 1 China is firing all the big guns tonight, because just an hour after Beijing effectively devalued the yuan, when it launched the latest currency war with the US, Bloomberg reported that the Chinese government has asked its state-owned enterprises “to suspend imports of U.S. agricultural products after President Donald Trump ratcheted up trade tensions with the Asian nation last week.”

China’s state-run agricultural firms have now stopped buying American farm goods, and are waiting to see how trade talks progress.

Translation: trade talks, even the fake kind, is now over, dead and buried, and the only question is how Trump will react.

* * *

Earlier today we had a feeling it was coming…

If CNH breaks 7, all hell will break loose as China declares start of currency war

— zerohedge (@zerohedge) August 4, 2019

… and sure enough, just a few hours alter in a dramatically unsettling move for global stability, China’s offshore yuan just collapsed below 7/USD — after the PBOC fixed the onshore yuan below 6.90 for the first time in 2019 — the currency plunging a stunning 12 handles to its weakest on record against the dollar as countless stop losses were triggered and thousands of traders were margined out.

“A break of 7 is quite shocking to the market, and close attention will be paid to how China would deal with this move,” says Tsutomu Soma, general manager of the investment trust and fixed-income securities at SBI Securities Co. in Tokyo in a phone interview

This is the weakest offshore yuan has ever been against the dollar…

Onshore Yuan also broke below 7.00…

The last time China’s yuan moved with this velocity, the tremors rippled dramatically and rapidly through the rest of global financial markets.

So now what? Well, this is just the start:

“This week’s fixings will send very important signals on the PBOC’s stance,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp. ”

A rate that’s stronger than 6.9 shows China’s preference for stability, but one that’s weaker will be seen as a strong hint that more drops will be allowed.”

Kyle Bass suggests the capital exodus has only just begun…

GAMETIME – CNH collapsing…HKD won’t be far behind. Mass Exodus of capital out of CNH and HKD. This collapse has just begun. #china #hk #bankingandcurrencycollapse pic.twitter.com/MQ8jpnSeQb

— Kyle Bass (@Jkylebass) August 5, 2019

Gold in yuan is accelerating higher…

Additionally, Bitcoin is well bid…

We suspect an angry tweet from President Trump is imminent as China ‘weaponizes’ its currency.

Meanwhile, expect even more actions by China, such as this one which confirms that any pretense of politeness is now gone.

  • CHINA SAID TO ASK STATE BUYERS TO HALT U.S. AGRICULTURE IMPORTS

As Mick Jagger sang, a U.S.-China war is “just a shot away.”

END

Trump responds angrily to China’s manipulation of their currency.  China denies it is a competitive devaluation. There is now no question that China has started a tsunami  deflationary wave which will create chaos throughout the world as competitive devaluations will be the name of the game.

(zerohedge)

Trump Slams China’s “Currency Manipulation” After PBOC Denies Competitive Devaluation

Following the collapse of the yuan overnight…

President Trump has escalated his rhetoric against China’s interventions it lack-of-intervention, blasting “China dropped the price of their currency to an almost a historic low. It’s called ‘currency manipulation’…”

Then Trump added – clearly pushing Powell to do more: “Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”

Donald J. Trump

@realDonaldTrump

China dropped the price of their currency to an almost a historic low. It’s called “currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!

Trump’s response comes shortly after PBOC’s Yi Gang wrote:

Recently, some new situations have emerged in the international economic situation and trade frictions, and market expectations have also undergone some changes. Affected by this, many currencies have depreciated against the US dollar since August, and the RMB exchange rate has also been affected to some extent. This fluctuation is driven and determined by the market.

As a responsible big country, China will abide by the spirit of the G20 leaders’ summit on the exchange rate issue, adhere to the market-determined exchange rate system, not engage in competitive devaluation, and not use the exchange rate for competitive purposes. Use the exchange rate as a tool to deal with external disturbances such as trade disputes. All along, the People’s Bank of China is committed to maintaining a stable and balanced RMB exchange rate at a reasonable and balanced level. This effort is believed to be obvious to all.

At present, China’s economy is stable and progressing, and its economic growth ranks among the top in the major economies, showing great resilience, potential and room for maneuver. The balance of international payments is balanced, foreign exchange reserves are sufficient, and there are more and more hedge enterprises in the foreign exchange market. The spread between China and major developed economies is in a suitable range and can support the basic stability of the RMB exchange rate.

The People’s Bank of China and the State Administration of Foreign Exchange will maintain the stability and continuity of foreign exchange management policies and guarantee the legitimate and legitimate use of foreign exchange by market players such as enterprises and individuals. We will deepen reform and opening up in the foreign exchange sector, further enhance the level of liberalization and facilitation of cross-border trade and investment, and serve the development of the real economy and the new pattern of comprehensive national opening up.

Whether it is from the fundamentals of the Chinese economy or from the balance of market supply and demand, the current RMB exchange rate is at an appropriate level. Although the RMB exchange rate has fluctuated due to recent external uncertainties, I am confident that the RMB will continue to be a strong currency. The People’s Bank of China has full experience and ability to maintain the smooth operation of the foreign exchange market and keep the RMB exchange rate basically stable at a reasonable and balanced level.

When China devalues the yuan (or allows the market to devalue the yuan), it exports deflation to the rest of the world which is the ominous threat that central banks have been so vigorously attempting to fight.

Pretty clear to everyone – currency wars begun they have – as this feedback loop pressures Powell and The Fed to cut rates further to weaken the dollar.

end

Michael Snyder is exactly correct on his interpretation of events in Hong Kong and China this morning.  China is very angry at the USA and things will only deteriorate.

(courtesy Michael Snyder)

Snyder: China Is Extremely Angry, And Now Considers The United States To Be Enemy #1

Authored by Michael Snyder via The Economic Collapse blog,

Have relations between the United States and China finally reached the point of no return?  At this moment, it would be difficult to overstate how angry the Chinese are with the United States.

Chinese officials are firmly blaming the United States for the enormous political protests that we have witnessed in Hong Kong in recent weeks, and on Thursday President Trump slapped another round of tariffs on Chinese imports.  Sadly, most Americans aren’t even paying much attention to these developments, but over in China everyone is talking about these things.  And of course the truth is that they aren’t just talking – the Chinese are absolutely seething with anger toward the U.S., and they aren’t afraid to express it.

Let me give you a perfect example of what I am talking about.  One of the most highly respected news anchors in China, Kang Hui, actually used an expletive when referring to the United States during a news broadcast earlier this week.  Normally I would never have such language in one of my articles, but this comment made headlines all over the globe, and I think that it is very important for all of us to understand what the Chinese are saying about us.  So since this is a news item of critical importance, I have decided not to censor this quote at all.  The following comes from the New York Times

“They stir up more troubles and crave the whole world to be in chaos, acting like a shit-stirring stick,” Mr. Kang said on the usually stolid 7 p.m. national news program on CCTV, China’s state broadcaster. The expletive quickly became one of the most-searched-for phrases on Chinese social media.

In a follow-up video on a CCTV social media account, Mr. Kang boasted about how he had taunted the United States.

“If a handful of Americans always stir up troubles, then we are sorry,” he intoned. “No more do we talk about certain issues. We will also target you. We will bash you till your faces are covered with mud. We will bash you till you are left speechless.”

Could you imagine Anderson Cooper saying something similar about China on CNN?

And actually Mr. Kang likely has far more viewers than Anderson Cooper does.

Most Americans spend very little time thinking about relations with China, but over in China they are absolutely furious with us right now, and the developing situation in Hong Kong is one of the biggest reasons for that anger.  Millions of people have flooded the streets of Hong Kong in recent weeks, and it appears that the Chinese have decided that enough is enough.  According to Bloomberg, U.S. officials are closely watching “a congregation of Chinese forces on Hong Kong’s border”…

The White House is monitoring what a senior administration official called a congregation of Chinese forces on Hong Kong’s border.

Weeks of unrest in the Chinese territory have begun to overwhelm Hong Kong’s police, who have found themselves in violent clashes with protesters. China warned Monday that the civil disorder had gone “far beyond” peaceful protest after police deployed tear gas over the weekend.

Could it be possible that Chinese forces could soon storm across the border?

And there have also been other signs that China is about to do something drastic

And also on Wednesday, Chen Daoxiang, the commander of China’s military garrison in Hong Kong — which holds around 6,000 troops — said his forces were “determined to protect national sovereignty, security, stability and the prosperity of Hong Kong.” His remarks came as China released a new propaganda video which include armed forces practicing shooting at protestors, after which he underscored his support for the city’s chief executive for “rigorously enforcing the law.”

Yes, Hong Kong is now technically part of China.  But according to the agreement that was signed when the British handed over Hong Kong, the city is supposed to be allowed to govern itself to a large degree until 2047

After taking over Hong Kong in a war in the 1800s, Britain returned it to China in 1997 with an important stipulation: The city would partly govern itself for 50 years before fully falling under Beijing’s control. So until 2047, the expectation was that the city and the mainland would operate under the principle known as “one country, two systems.”

So if China ends up sending troops into Hong Kong to end the political protests, the Trump administration will be extremely upset, and tensions between our two nations will go up several more notches.

A new development in the trade war is the other reason why the Chinese are so angry with us right now.

After President Trump hit China with new tariffs on Thursday, China’s ambassador to the United Nations warned that the Chinese are prepared to implement “necessary countermeasures”

China’s new ambassador to the United Nations, Zhang Jun, said Beijing would take “necessary countermeasures” to protect its rights and bluntly described Trump’s move as “an irrational, irresponsible act.”

“China’s position is very clear that if U.S. wishes to talk, then we will talk, if they want to fight, then we will fight,” Zhang told reporters in New York, also signalling that trade tensions could hurt cooperation between the countries on dealing with North Korea.

In other words, the Chinese are not going to back down one bit, and they are going to hit us back hard.

[ZH: And if there was any further evidence required, the lack of intervention to stall a collapse in the yuan overnight shows China’s willingness to escalate tensions via a currency war]

And Chinese Foreign Ministry spokesperson Hua Chunying said similar things when she addressed reporters on Friday

“China will not accept any form of pressure, intimidation or deception,” Chinese Foreign Ministry spokesperson Hua Chunying said at a press conference Friday.

China‘s Ministry of Commerce released a statement that said Beijing would impose countermeasures.

“The U.S. has to bear all the consequences,” the statement said. “China believes there will be no winners of this trade war and does not want to fight. But we are not afraid to fight and will fight if necessary.”

In the end, it is very true that there “will be no winners” in this trade war.  The Chinese know where our pain points are, and they will not be afraid to fight dirty.

A rapidly deteriorating relationship with China is a big part of the scenario that we have been anticipating.  As I discussed yesterday, it is exceedingly unlikely that there will be a trade deal between the United States and China before the 2020 presidential election.  And to be honest, it is far more likely that our conflict with China will escalate well beyond just a “trade war” in the months ahead.

The two largest economic superpowers on the entire planet are now locked in a monumental struggle for dominance, and it is going to result in a tremendous amount of economic pain for the entire planet.

Unfortunately, most Americans are completely and utterly clueless about what is going on, and so most of them are still convinced that everything is going to be just fine.

4/EUROPEAN AFFAIRS

FRANCE

A superb commentary from Milliere (Gatestone) on the Islamization of France. France is becoming another Sweden with many no go zones. He also explains why the Jews are leaving France on a one way ticket to Tel Aviv. France is disintegrating before our eyes

(Gatestone/Milliere)

France Is Slowly Sinking Into Chaos

Authored by Guy Milliere via The Gatestone Institute,

Paris, Champs-Élysées. July 14. Bastille Day. Just before the military parade begins, President Emmanuel Macron comes down the avenue in an official car to greet the crowd. Thousands of people gathered along the avenue shout “Macron resign”, boo and hurl insults.

At the end of the parade, a few dozen people release yellow balloons into the sky and distribute leaflets saying “The yellow vests are not dead.” The police disperse them, quickly and firmly. Moments later, hundreds of “Antifa” anarchists arrive, throw security barriers on the roadway to erect barricades, start fires and smash the storefronts of several shops. The police have a rough time mastering the situation, but early in the evening, after a few hours, they restore the calm.

A few hours later, thousands of young Arabs from the suburbs gather near the Arc de Triomphe. They have apparently come to “celebrate” in their own way the victory of an Algerian soccer team. More storefronts are smashed, more shops looted. Algerian flags are everywhere. Slogans are belted out: “Long live Algeria”, “France is ours”, “Death to France”. Signs bearing street names are replaced by signs bearing the name of Abd El Kader, the religious and military leader who fought against the French army at the time of the colonization of Algeria. The police limit themselves to stemming the violence in the hope that it will not spread.

 

Around midnight, three leaders of the “yellow vest” movement come out of a police station and tell a TV reporter that they were arrested early that morning and imprisoned for the rest of the day. Their lawyer states that they did nothing wrong and were just “preventively” arrested. He emphasizes that a law passed in February 2019 allows the French police to arrest any person suspected of going to a demonstration; no authorization from a judge is necessary and no appeal possible.

On Friday, July 19, the Algerian soccer team wins again. More young Arabs gathernear Arc de Triomphe to “celebrate” again. The damage is even greater than eight days before. More police show up; they do almost nothing.

On July 12, two days before Bastille Day, several hundred self-declared African illegal migrants enter the Pantheon, the monument that houses the graves of heroes who played major roles in the history of France. There, the migrants announce the birth of the “Black Vest movement”. They demand the “regularization” of all illegal immigrants on French territory and free housing for each of them. The police show up but decline to intervene. Most of the demonstrators leave peacefully. A few who insult the police are arrested.

France today is a country adrift. Unrest and lawlessness continue to gain ground. Disorder has become part of daily life. Polls show that a large majority rejectPresident Macron. They seem to hate his arrogance and be inclined not to forgive him. They seem to resent his contempt for the poor; the way he crushed the “yellow vest” movement, and for his not having paid even the slightest attention to the protesters’ smallest demands, such as the right to hold a citizens’ referendumlike those in Switzerland. Macron can no longer go anywhere in public without risking displays of anger.

The “yellow vests” seem finally to have stopped demonstrating and given up: too many were maimed or hurt. Their discontent, however, is still there. It seems waiting to explode again.

The French police appear ferocious when dealing with peaceful protesters, but barely able to prevent groups such as “Antifa” from causing violence. Therefore, now at the end of each demonstration, “Antifa” show up. The French police seem particularly cautious when having to deal with young Arabs and illegal migrants. The police have been given orders. They know that young Arabs and illegal migrants could create large-scale riots. Three months ago, in Grenoble, the police were pursuing some young Arabs on a stolen motorcycle, who were accused of theft. While fleeing, they had an accident. Five days of mayhem began.

President Macron looks like an authoritarian leader when he faces the disgruntled poor. He never says he is sorry for those who have lost an eye or a hand or suffered irreversible brain damage from extreme police brutality. Instead, he asked the French parliament to pass a law that almost completely abolishes the right to protest, the presumption of innocence and that allows the arrest of anyone, anywhere, even without cause. The law was passed.

In June, the French parliament passed another law, severely punishing anyone who says or writes something that might contain “hate speech”. The law is so vague that an American legal scholar, Jonathan Turley, felt compelled to react. “France has now become one of the biggest international threats to freedom of speech”, he wrote.

Macron does not appear authoritarian, however, with violent anarchists. When facing young Arabs and illegal migrants, he looks positively weak.

He knows what the former interior minister, Gérard Collomb, said in November 2018, while resigning from government:

“Communities in France are engaging in conflict with one another more and more and it is becoming very violent… today we live side by side, I fear that tomorrow it will be face to face”.

Macron also knows what former President François Hollande said after serving his term as president: “France is on the verge of partition”.

Macron knows that the partition of France already existsMost Arabs and Africans live in no-go zonesapart from the rest of the population, where they accept the presence of non-Arabs and non-Africans less and less. They do not definethemselves as French, except when they say that France will belong to them. Reports show that most seem filled with a deep rejection of France and Western civilization. An increasing number seem to place their religion above their citizenship; many seem radicalized and ready to fight.

Macron seems not to want to fight. Instead, he has chosen to appease them. He is single-mindedly pursuing his plans to institutionalize Islam in France. Three months ago, the Muslim Association for Islam of France (AMIF) was created. One branch will handle the cultural expansion of Islam and take charge of “the fight against anti-Muslim racism”. Another branch will be responsible for programs that train imams and build mosques. This autumn, a “Council of Imams of France” will be established. The main leaders of the AMIF are (or were until recently) membersof the Muslim Brotherhood, a movement designated as a terrorist organization in Egypt, Bahrain, Syria, Russia, Saudi Arabia and the United Arab Emirates — but not in France.

Macron is aware of the demographic data. They show that the Muslim population in France will grow significantly in the coming years. (The economist Charles Gave wrote recently that by 2057, France will have a Muslim majority). Macron can see that it will soon be impossible for anyone to be elected President without relying on the Muslim vote, so he acts accordingly.

Macron apparently sees that the discontent that gave birth to the “yellow vest” movement still is there. He appears to think that repression will be enough to prevent any further uprising, and so does nothing to remedy the causes of the discontent.

The “yellow vest” movement was born of a revolt against exorbitantly high taxes on fuel, and harsh government measures against cars and motorists. These measures included reduced speed limits — 50 mph on most highways — and more speed-detection cameras; a sharp rise in the penalties on tickets, as well as complex and expensive annual motor vehicle controls. French taxes on fuels recently rose again and are now the highest in Europe (70% of the price paid at the pump). Other measures against the use of automobiles and motorists still in force are especially painful for the poor. They were already chased from the suburbs by intolerant newcomers, and now have to live — and drive — even farther from where they work.

Macron has made no decision to remedy the disastrous economic situation in France. When he was elected, taxes, duties and social charges represented almost 50% of GDP. Government spending represented 57% of GDP (the highest among developed countries). The ratio of national debt to GDP was almost 100%.

Taxes, duties, social charges and government spending remain at the same level now as when Macron came in. The debt-to-GDP ratio is 100% and growing. The French economy is not creating jobs. Poverty remains extremely high: 14% of the population earn less than 855 euros ($950) a month.

Macron pays no attention to the growing cultural disaster also seizing the country. The educational system is crumbling. An increasing percentage of students graduate from high school without knowing how to write a sentence free of errors that make incomprehensible anything they write. Christianity is disappearing. Most non-Muslim French no longer define themselves as Christians. The fire that ravaged the Cathedral of Notre Dame de Paris was officially an “accident,” but it was only one of the many Christian religious buildings in the country that were recently destroyed. Every week, churches are vandalized — to the general indifference of the public. In just the first half of 2019, 22 churches burned down.

The main concern of Macron and the French government seems not to be the risk of riots, the public’s discontent, the disappearance of Christianity, the disastrous economic situation, or Islamization and its consequences. Instead, it is climate change. Although the amount of France’s carbon dioxide emissions is infinitesimal(less than 1% of the global total), combatting “human-induced climate change” appears Macron’s absolute priority.

A Swedish girl, Greta Thunberg, age 16, — nevertheless the guru of the “fight for the climate” in Europe — was recently invited to the French National Assembly by members of parliament who support Macron. She delivered a speech, promising that the “irreversible destruction” of the planet will begin very soon. She addedthat political leaders “are not mature enough” and need lessons from children. MPs who support Macron applauded warmly. She received a Prize of Freedom, just created, which will be given each year to people “fighting for the values ​​of those who landed in Normandy in 1944 to liberate Europe”. It is probably reasonable to assume that not one of those who landed in Normandy in 1944 thought he was fighting to save the climate. Such minor details, however, seem beyond Macron and the parliamentarians who support him.

Macron and the French government also seem unconcerned that Jews — driven by the rise of anti-Semitism, and understandably worried about court decisions infused with the spirit of submission to violent Islam — continue to flee from France.

Kobili Traore, the man who murdered Sarah Halimi in 2017 while chanting surasfrom the Qur’an and shouting that the Jews are Sheitan (Arabic for “Satan”) was found not guilty. Traore had apparently smoked cannabis before the murder, so the judges decided that he was not responsible for his acts. Traore will soon be released from prison; what happens if he smokes cannabis again?

A few weeks after the murder of Halimi, three members of a Jewish family were assaulted, tortured and held hostage in their home by a group of five men who said that “Jews have money” and “Jews must pay”. The men were arrested; all were Muslim. The judge who indicted them announced that their actions were “not anti-Semitic”.

On July 25, 2019 when the Israeli soccer team Maccabi Haifa was competing in Strasbourg, the French government limited the number of Israeli supporters in the stadium to 600, not one more. A thousand had bought plane tickets to come to France to attend the match. The French government also banned the waving of Israeli flags at the game or anywhere in the city. Nonetheless, in the name of “free speech”, the French Department of the Interior permitted anti-Israeli demonstrations in front of the stadium, and Palestinian flags and banners saying “Death to Israel” were there. The day before the match, at a restaurant near the stadium, some Israelis were violently attacked. “The demonstrations against Israel are approved in the name of freedom of expression, but the authorities forbid supporters of Maccabi Haifa to raise the Israeli flag, it is unacceptable,” said Aliza Ben Nun, Israel’s ambassador to France.

The other day, a plane full of French Jews leaving France arrived in Israel. More French Jews will soon go. The departure of Jews to Israel entails sacrifices: some French real estate agents take advantage of the wish of many Jewish families to leave, so they buy and sell properties owned by Jews at a price far lower than their market value.

Macron will remain as president until May 2022. Several leaders of the parties of the center-left (such as the Socialist Party) and center-right (The Republicans) joined The Republic on the Move, the party he created two years ago. After that, the Socialist Party and The Republicans electorally collapsed. Macron’s main opponent in 2022 is likely to be the same as in 2017: Marine Le Pen, the leader of the populist National Rally.

Although Macron is widely unpopular and widely hated, he will probably use the same slogans as in 2017: that he is the last bastion of hope against “chaos” and “fascism.” He has a strong chance of being elected again. Anyone who reads the political program of the National Rally can see that Le Pen is not a fascist. Also, anyone who looks at the situation in France may wonder if France has not already begun to sink into chaos.

The sad situation that reigns in France is not all that different from that in many other European countries. A few weeks ago, an African cardinal, Robert Sarah, published a bookLe soir approche et déjà le jour baisse (“The evening comes, and already the light darkens”). “At the root of the collapse of the West”, he writes, “there is a cultural and identity crisis. The West no longer knows what it is, because it does not know and does not want to know what shaped it, what constituted it, what it was and what it is. (…) This self-asphyxiation leads naturally to a decadence that opens the way to new barbaric civilizations.”

That is exactly what is happening in France — and Europe

end

GERMANY

The far right Afd party is set to defeat Merkel’s CDU in regional elections next month

(zerohedge)

In Stunning Upset, Germany’s Far-Right AfD Set To Defeat Merkel’s CDU In The Country’s East

In a stunning development for German politics, Germany’s anti-immigrant, nationalist party Alternative for Germany, or AfD, has taken the lead in the east of the country ahead of Chancellor Angela Merkel’s Christian Democrats (CDU), just a month before regional elections in the eastern states of Saxony and Brandenburg, an opinion poll showed on Sunday.

The AfD is currently polling at 23%, ahead of Angela Merkel’s Christian Democratic Union, or CDU, which is at 22%, according to a poll carried out by Bild. The far-left Die Linke is in third place at 14% while the Greens are at 13% and the center-left Social Democrats (SPD) on 11%.

The eastern states of Brandenburg and Saxony hold regional elections on Sept. 1, followed by Thuringia a month later.

As shown in the map below, the AfD has taken a leadership position in Germany’s formerly communist, and more economically backward eastern states. The good news for Europe’s establishment is that in the west of the country, the AfD remains further back, and last polled in fourth position at 12%, with the CDU at 27%, the Greens 25% and SPD 13% in the Kantar Emnid poll of 1,419 conducted from July 25-31.

 

The AfD barged on the scene in 2017, when it entered Germany’s national parliament for the first time as the third largest party, helped by voter anger at Merkel’s decision to welcome asylum seekers from the Middle East and Africa.

As Reuters notes, an inevitable defeat for the SPD in Brandenburg, where it has won all of the last six elections there since German reunification in 1990, and the CDU in Saxony would put more pressure on the coalition partners to rethink their alliance in national government, while further derailing the German political establishment.

As Bloomberg adds, the former communist east that saw massive right-wing protests last year is now back in focus as voters in three states go to the polls this fall. In Saxony and Brandenburg, Merkel’s Christian Democrats and their junior partner, the Social Democrats, are set to lose for the first time since reunification in 1990 to the upstart AfD.

That could not only implode her fragile coalition but upend a political landscape dominated by two parties since World War II.

While the AfD looks set to sweep in the East, it still has a ways to go at the national level, with the poll showing the AfD up one percentage point at 14%, the SPD down a point at just 13%, the CDU steady at 26%, the Greens on 23%, the Free Democrats on 9% and the Linke on 8%.

END

UK/HSBC
Massively short in the precious metals, strangely John Flint, CEO of HSBC is abruptly ousted..profit outlook plunges
(zerohedge)

HSBC CEO Abruptly Ousted, Bank Slashes 4,000 Jobs As Profit Outlook Plunges

Despite a quarter that was marked by unrest in the streets of Hong Kong, HSBC reported relatively robust results on Monday (local time) that beat the Street’s expectations. And in addition to announcing a share buyback of $1 billion (which is half the size of last year’s), the bank followed several of its peers in announcing mass layoffs (HSBC will cut roughly 2% – approximately 4,000 jobs – from its global workforce) while also revealing that its CEO John Flint, who has been in the job only 18 months, will leave the bank as its board looks for “a different approach” on growth, resource allocation and execution.

Like many of its fellow global banks, HSBC shares have underperformed during Flint’s tenure, which could be one reason for his sudden departure. Noel Quinn, who has led global commercial banking at HSBC since December 2015, will take over for Flint on an interim basis, SCMP reports. The news sent HSBC shares down roughly 2% to their lowest intraday level in 9 months.

John Flint

 

“In the increasingly complex and challenging global environment in which the bank operates, the board agrees that a change is needed – and John agrees – to make the most of the significant opportunities ahead of us,” HSBC’s Chairman Mark Tucker said on a conference call. “This is a decision about the future.”

Flint, 51, joined the bank in 1989 spent his entire career there. He led the lender’s retail banking and wealth management businesses before taking over for retiring CEO Stuart Gulliver in February 2018.

The bank’s board insisted that there hadn’t been a clash of personalities and no disagreement over strategy, but that the bank’s directors had decided it was time for Flint to go.

“There has been no personality clash. There has been no disagreement over strategy,” Tucker said. “This is a unanimous decision of the HSBC non-executives [on the board]. Personalities have not been a factor in this at all.”

Q2 net profit rose 6.8% to $4.37 billion, up from last year’s $4.09 billion. Pre-tax profit increased to $6.19 billion, beating analysts’ consensus estimate provided by the bank of $5.63 billion.

Operating income rose 8.2% to $14.4 billion during the quarter, while net interest income increase increased 1.7% to $7.77 million in the quarter.

Here’s a roundup of analyst comments, courtesy of Bloomberg

KBW, Ed Firth (market perform)

Flint’s departure is the key news and Firth says he’s often been “uninspired” by the “business as usual” strategy under the outgoing CEO

His replacement is more likely to be internal but will have to take a more “dynamic approach” to improving underperforming areas of the bank

While second-quarter numbers are a “comfortable beat,” the outlook is “reasonably downbeat” and pressures are growing for the bank, notably in Hong Kong.

JPMorgan, Raul Sinha (underweight)

Overall the results look solid, with adjusted pretax profit about 8% ahead of company-compiled consensus, but the sheen is taken off this by the announcement Flint will leave after only 18 months in the role

Sinha says Flint’s departure looks to have been driven by the HSBC board seeking to “accelerate change alongside a potentially rapid deterioration in outlook.”

Jefferies, Joseph Dickerson (hold)

The bank benefited from higher HIBOR rates in Hong Kong and tight cost controls but the $1 billion buyback announced looks “token,” given it is at only half the prior year’s level

Outlook statement “points to the challenges the bank faces in terms of interest rates, not to mention the geopolitical risks.”

Hard to see” consensus estimates for 2020 and beyond being revised higher after the results.

RBC, Benjamin Toms (underperform)

Profit was well ahead of expectations thanks to beat on revenue, costs and impairments, but the second-quarter results look “softer around the edges”

The $1 billion buyback was below the $1.5 billion to $2 billion expected in consensus
And “we find the timing a little odd” in terms of the departure of Flint.

Bank of America Merrill Lynch, Alastair Ryan (neutral)

Flint’s departure was unexpected but the results demonstrate it wasn’t due to near-term financials given that second-quarter revenue outpaced expectations.

New buyback is a “positive surprise” as BofAML had removed buybacks from its estimates.

BBG Intelligence.

Net interest margin increase and positive operating jaws demonstrate that HSBC is continuing to deliver, but with Flint’s exit and a downgraded outlook, those conditions are set to change.

Global Markets and Global Banking units both likely to need more refocusing and in order to meet its 2020 targets, would expect the bank’s costs and investment levels to be “aggressively managed.”

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Iran

Iran seizes another foreign vessel in the Strait of Hormuz.  Iran is crippled as it cannot sell its oil

(zerohedge)

Iran Seizes Foreign Oil Tanker Accused Of Smuggling Fuel

In what will be seen as another escalation of tensions in the Persian Gulf, Iran’s Revolutionary Guards seized a foreign oil tanker in the Persian Gulf on July 31, adding to rising concerns about the safety of shipping in a region crucial to oil exports.

The vessel – the third foreign ship seized by Iran in the Gulf since July 14 in response to a UK seizure of Iran’s own ship – is suspected of smuggling a large volume of fuel, the Guards said on their Sepah News portal according to Bloomberg. They did not, however, give any details about the flag or nationality of the ship or its operator.

The ship’s seizure took place last Wednesday, Sepah News, the Revolutionary Guard’s official news service, reported, a day after United Arab Emirates officials traveled to Iran to discuss maritime border cooperation and the flow of shipping traffic, including illegal movements.

Edward Wong

@ewong

BREAKING: Iran says it has seized a third foreign oil tanker. This NYT investigation shows how 12 Iranian tankers have brought oil to China & other nations since May, despite US sanctions. Countries defy Trump, who has failed to get allies on Iran. https://www.nytimes.com/interactive/2019/08/03/world/middleeast/us-iran-sanctions-ships.html 

Embedded video

 

The ship was carrying 700,000 liters (4,403 barrels) of smuggled fuel when it was seized near Farsi Island in the western part of the Gulf, off Iran’s southwestern coast, Sepah News reported. The island is located about 400 miles (640 kilometers) from the Strait of Hormuz, the volatile center of Iran’s standoff with the West in recent weeks. Iran’s state-run Press TV reported that the seized ship is an Iraqi tanker that was delivering the fuel to some Arab countries in the Persian Gulf.

Iranian state news agency IRNA reported that a video of the moment the vessel was seized showed it was Iraqi, although as the WSJ notes, maritime confrontations between Iran and Iraq are considered rare. The Iraqi ship’s seizure would follow July’s visit to Tehran by Prime Minister Adel Abdul-Mahdi, who has sought to ease tensions between the U.S. and Iran, both close allies of Iraq.

Gen. Ramezan Zirahi, a navy forces commander in the Guard, was quoted by Iran’s Fars News Agency as saying the fuel had been transferred to the vessel from another ship, and was bound for Arab countries in the region when it was impounded. The seven detained crew members – who were arrested – were foreign, he said, without naming their nationality or that of the vessel. The ship was taken to Bushehr port on Iran’s southwest coast, and its cargo was confiscated and handed over to the National Oil Distribution Company of Iran.

The announcement of the ship’s capture coincides with a joint meeting between the Iranian and Qatari coast guards in Tehran aimed at improving and developing maritime cooperation between the Gulf neighbors, state-run Islamic Republic News Agency reported earlier Sunday. That gathering follows a rare meeting between the coast guards of Iran and the U.A.E. last week.

* * *

The impounding of the ship will escalate the tensions that have flared in the region’s waters as Iran resists U.S. sanctions that are crippling its all-important oil exports and retaliates after one of its ships was seized July 4 near Gibraltar. Iran grabbed a British tanker, the Stena Impero, in Hormuz two weeks later and continues to hold it. Iran also detained a small Emirati-based vessel, the Riah, earlier in July and accused it of smuggling fuel. Nine of the 12 Indian crew members have since been released, but the vessel remains impounded. Ship-tracking experts noted the size of the cargo on the vessel seized on Wednesday was even smaller. Petroleum products sold domestically in Iran are heavily subsidized, so it is potentially lucrative to divert them to foreign markets, where they can be sold for a higher price.

The passage at the mouth of the Persian Gulf accounts for about a third of the world’s seaborne oil flows. To reduce the risks of navigating the waterway, the Royal Navy has started to escort British ships, and a plan for a European naval mission is taking shape.

Meanwhile, the U.S. has blamed Iran for attacks on oil tankers in the region in recent months, a charge Tehran has denied.

The crisis in the Gulf has caused oil prices and shipping premiums to rise and prompted some vessel owners to avoid the region. Last week, Bloomberg reported that British oil giant BP, which had to shelter one of its tankers in the Persian Gulf this month in fear it could be targeted by Iranian forces, was avoiding sending ships to the region after tensions flared between Tehran and London.

BP is “certainly not sending British ships and crews” through the Strait of Hormuz, the only way for tankers to reach the world’s biggest oil-exporting region, Chief Executive Officer Robert Dudley said in a Bloomberg TV interview.

Earlier this month, a BP tanker had to abandon a plan to load Iraqi crude and instead took shelter near Saudi Arabia because the company feared the ship could be targeted in a tit-for-tat response for British Royal Marines seizing a vessel transporting Iranian crude in the Mediterranean, a person familiar with the matter said at the time.

At the same time, the U.S. has boosted military deployments in the Persian Gulf and Strait of Hormuz and is trying to pull together an international maritime force to patrol the region. The British also plan to create a separate European maritime security force.

Ironically, it remains unclear if allies in the North Atlantic Treaty Organization will cooperate: as the WSJ notes, the U.K., Germany and France are at odds with the Trump administration over its decision to pull out of the 2015 Iranian nuclear deal to which they are co-signatories, and are working to keep the deal alive and to ease tensions with Tehran.

For its part, Iran says it is trying to maintain maritime security in the region. But its officials also have repeatedly warned they would block the Strait of Hormuz—through which a third of the world’s seaborne oil is transported—in response to crippling U.S. sanctions. Iran has accused the Europeans of not providing adequate relief from American pressure.

 

end

 

 

6.Global Issues

 

7. OIL ISSUES

Oil Price Correction Triggers Shale Meltdown

We have been pointing out to you the continual lousy returns on shale in the USA.  The lower price has caused a shale meltdown
(courtesy Nick Cunningham/OilPrice.com)

Authored by Nick Cunningham via OilPrice.com,

It was a rough week for the U.S. shale industry.

A series of earnings reports came out in recent days, and while some drillers beat expectations, there were some huge misses as well.

Concho Resources, for instance, saw its share price tumble 22 percent when it disclosedseveral problems at once. Profits fell by 25 percent despite production increases. Concho conceded that it would slash spending and slow the pace of drilling in the second half of the year.

It also said that one of its projects where it tried to densely pack wells together, which it called “Dominator,” the results were not as good as they had hoped. The project had 23 wells, but production disappointed. The “30 and 60 day production rates were consistent with our other projects in that area, but the performance has declined,” Leach said. So, the company will abandon the densely packed well strategy and move forward with wider spacing.

In the second quarter the company had 26 rigs in operation, but that has since fallen to 18. At the start of the year, the company had 33 active rigs.

“We made the decision to adjust our drilling and completion schedule in the second half of the year to slow down and not chase incremental production at the expense of capital discipline,” Concho’s CEO Tim Leach told analysts on an earnings call. He said the company’s aiming for “a free cash flow inflection in 2020.”

The company reported a net loss of $792 million for the first six months of 2019. As Liam Denning put it in Bloomberg Opinion: “It’s sobering to think that Concho, valued at more than $23 billion in the spring of 2018 and having since absorbed the $7.6 billion purchase of RSP Permian Inc., now sports a market cap of less than $16 billion.”

The reason these results are important is because they may not be one-off problems for individual companies, but are more likely indicative of the problems plaguing the whole sector.

“There is little doubt this is a big event for the sector and a brake of this nature will create lasting impact,” Evercore analyst Stephen Richardson wrote in a note, referring to Concho’s poor results.

“How companies still, after all these years we have wailed and gnashed our teeth, manage to over-promise and under-deliver, remains an infuriating mystery,” Paul Sankey wrote in a note for Mizuho Securities USA LLC.

Whiting Petroleum had an even worse week. Its stock melted down on Thursday, falling by 38 percent after reporting a surprise quarterly loss that badly missed estimates. The company announced that it would cut its workforce by a third.

According to the Wall Street Journal and Wood Mackenzie, a basket of 7 shale drillers posted a combined $1.58 billion in negative cash flow in the first quarter, four times worse than the same period a year earlier.

While the results, in many cases, were bad, the declines in share prices were hugely amplified by the announcement of new tariffs on China, which caused a broad selloff not just in the energy sector, but for equities of all types. Here is a sampling of how the share prices of some oil companies fared on Thursday:

  • Whiting Petroleum -38 percent
  • Concho Resources -22 percent
  • Pioneer Natural Resources -7.5 percent
  • EOG Resources -5.5 percent
  • Devon Energy -6.8 percent
  • Continental Resources -7.8 percent
  • Royal Dutch Shell -6.1 percent
  • Chevron -2 percent
  • SM Energy -9.0 percent

But the poor quarterly performances were true before President Trump took to twitter. Even with oil down and stocks perhaps looking cheap, “it’s hard to call it a contrarian opportunity right now,” Matt Maley, chief market strategist at Miller Tabak, told CNBC“This group has really been dead money most of this year.”

Investors are clearly souring on the sector. As Bloomberg notes, speculative positioning from traders fell to the lowest level since March 2013, a sign of “investor apathy” towards crude oil and energy stocks.

While shale E&Ps languish, the oil majors are not slowing down. Exxon said that its oil production rose by 7 percent, driven by the Permian. In fact, its production from the Permian rose 90 percent in the second quarter from a year earlier. Earnings dropped by 21 percent, however, and the company cited lower prices and poor downstream margins.

But the majors aggressive bet on U.S. shale is a sign of the times. Small and medium drillers are getting hammered and seeing their access to capital close off, which is forcing budget cutbacks and otherwise leading to steep selloffs in their share prices. The majors, on the other hand, are only in the early stages of a multi-year bet on shale. They can stomach losses on individual shale projects for years, scaling up while they earn profits elsewhere.

So, despite the widespread financial losses for the shale sector, it’s not clear that production is set to grind to a halt.

8 EMERGING MARKET ISSUES

Venezuela

It sure looks like Trump will engage in a full naval blockade of Venezuela despite the presence of China and Russia in the country,’

Looks very ominous

(zerohedge)

 

Officials Say US Headed Toward Full Naval Blockade Of Venezuela

Following initial reports this week that the White House is preparing to escalate sanctions on Venezuela, an unnamed senior administration official has given new confirmation that the Trump Administration is seriously considering imposing a naval blockade on Venezuela, as part of a continuing pressure campaign to oust socialist President Nicolas Maduro.

The senior official further indicated Maduro has “a short window” to voluntarily leave power before Trump could approve a full “quarantine” or  “blockade” of the Latin American country.

On Thursday while taking reporters’ questions, Trump was asked about some of Maduro’s powerful external backers:

Asked by a reporter whether he was considering such a measure, given the amount of involvement by China and Iran in Venezuela, Trump said: “Yes, I am.” He gave no details.

The president didn’t define the extent of such a “quarantine,” but a follow-up report in Bloomberg indicated it would start with a complete blockade by sea, enforced by US Navy ships.

President Maduro pounced on the comments, and directed his ambassador to lodge a formal complaint with the UN Security Council, saying any attempt to block the Venezuelan coastline is “clearly illegal” according to international law and norms. He said in a televised broadcast on Friday:

 Venezuela’s seas would remain “free and independent.”

“All of Venezuela, in a civic-military union, repudiates and rejects the statements of Donald Trump about a supposed quarantine, of a supposed blockade,” Maduro said in the speech. “A blockade, why would he announce that? It is clearly illegal.”

Trump over this summer has expressed an unwillingness for “military options” in Venezuela, even recently saying he was “bored” with meddling in such a complex geopolitical climate, according to reports; however, this could be the start of escalation ramping back up again after a failed military coup attempt early this year.

end

INDIA/PAKISTAN

Kashmir has been a disputed territory since 1947. The 3 area is under control by:

i) Indian administered Kashmir  ( J and K)

2. Pakistani administered Kashmir

3. Chinese controlled area

now India has stripped the Muslim majority region of its autonomy as troops move in. This puts Pakistan on the defensive and they will no doubt take action.

(zerohedge)

Kashmir On Lockdown: India Strips Muslim-Majority Region Of Autonomy, Troops Move In

In a dramatic escalation following a worsening crisis, which over the weekend saw intensive shelling along the Line of Control (LoC) that separates Indian-controlled and Pakistani-controlled parts of Kashmir, New Delhi has revoked the key constitutional article which gives Indian-administered Kashmir special status

The unprecedented move signals India is willing to take greater military action in the disputed border region, which is virtually guaranteed to not only spark severe local unrest, but put India and Pakistan on a direct collision course for war. Specifically, Article 370 is legally and historically what assured a high degree autonomy for Indian administered Muslim-majority state, enshrined in the constitution, which the majority of inhabitants there see as justifying remaining part of India.

 

Image via CNN

The Indian administered side of Kashmir, called Jammu and Kashmir (J&K), was granted its status in the 1950s, which included maintaining its own state constitution, as well as law making bodies, making it the most independent of all Indian states. But starting Monday this will all be revoked, following a resolution introduced on Monday by Home Minister Amit Shah and quickly put into law by President Ram Nath Kovind.

 

Ultimately, as the BBC reports, “the BJP [the Hindu nationalist Bharatiya Janata, India’s largest political party] has irrevocably changed Delhi’s relationship with the region.” Currently, there’s reported to be a lockdown across J&K, with some phone and internet services reported cut. According to CNN:

Indian-controlled Kashmir was in lockdown Monday, with tens of thousands of new troops deployed into what is already one of the most militarized places in the world, as a number of prominent politicians were placed under house arrest and New Delhi announced contentious changes to the way the territory is administered.

 

Indian paramilitary troopers stand guard at a roadblock at Maisuma locality in Srinagar, Kashmir, on Aug.4. AFP/Getty via Axios

CNN continued to described a military imposed “blackout” on the restive region, with some outraged local politicians immediately placed under house arrest:

A broad communications blackout left many people without access to the internet and phone services across the territory, with measures also in place to prevent public meetings.

The politicians under house arrest include at least two former chief ministers of the Indian state of Jammu and Kashmir, according to CNN affiliate CNN-News18.

Pakistan was swift to condemn the drastic alteration to the status quo, saying it will “exercise all possible options” to counter it. “India is playing a dangerous game which will have serious consequences for regional peace and stability,” said Foreign Minister Shah Mehmood Qureshi.

Reports say Indian government sources have countered by claiming neither the Line of Control nor Kashmiri boundaries had been altered.

Going back to WWII, the nuclear armed rivals have fought two wars related to the hotly disputed region. An Indian insurgency has also been active and intensifying of late as well, which New Delhi claims is focused against Pakistan-backed Islamic militants.

END

 

 

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

Euro/USA 1.1176 UP .0072 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems ///ITALIAN CHAOS/CHINA DEVALUATION PAST 7:1 /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES /ALL RED

 

 

USA/JAPAN YEN 106.10 DOWN 0.439 (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 1.2157   UP   0.0008  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO OCT 31/2019//

USA/CAN 1.3217 UP .0023 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS  MONDAY morning in Europe, the Euro ROSE BY 72 basis points, trading now ABOVE the important 1.08 level RISING to 1.1176 Last night Shanghai COMPOSITE CLOSED DOWN 46.36 POINTS OR 1.61% 

 

//Hang Sang CLOSED DOWN 767.26 POINTS OR 2.85%

/AUSTRALIA CLOSED DOWN 1.98%// EUROPEAN BOURSES DEEPLY IN THE RED

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL DEEPLY IN THE RED 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 767.26 POINTS OR 2.85%

 

 

/SHANGHAI CLOSED DOWN 46.36 POINTS OR 1.61%

 

Australia BOURSE CLOSED DOWN 1.98% 

 

 

Nikkei (Japan) CLOSED DOWN 366.87  POINTS OR 1.74%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1459.60

silver:$16.46-

Early MONDAY morning USA 10 year bond yield: 1.77% !!! DOWN 8 IN POINTS from FRIDAY’S night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. DEADLY

 

The 30 yr bond yield 2.30 DOWN 8  IN BASIS POINTS from FRIDAY night.

USA dollar index early TUESDAY morning: 97.65 DOWN 43 CENT(S) from  FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 0.28% DOWN 2 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: -.19%  DOWN 3   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.25%//DOWN 0 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD:1,56 UP 2 points in basis points yield from yesterday./

 

 

the Italian 10 yr bond yield is trading 131 points higher than Spain.

 

GERMAN 10 YR BOND YIELD: FALLS TO –.51% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.07% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A HUGE BANK RUN…

 

END

IMPORTANT CURRENCY CLOSES FOR MONDAY

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

Euro/USA 1.1191  UP     .0087 or 87 basis points

USA/Japan: 106.11 DOWN .431 OR YEN UP 43  basis points/

Great Britain/USA 1.2156 UP .0006 POUND UP 56  BASIS POINTS)

Canadian dollar DOWN 4 basis points to 1.3197

 

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The USA/Yuan,CNY: AT 7.0507    ON SHORE  (DOWN)..NOW VERY DANGEROUS

THE USA/YUAN OFFSHORE:  7.0927  (YUAN DOWN)..NOW VERY DANGEROUS

TURKISH LIRA:  5.5540 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield closed at -.19%//DANGEROUS

 

Your closing 10 yr US bond yield DOWN 8 IN basis points from FRIDAY at 1.76 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.32 DOWN 6 in basis points on the day

Your closing USA dollar index, 97.61 DOWN 47  CENT(S) ON THE DAY/1.00 PM/

 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY: 12:00 PM

London: CLOSED DOWN 165.24  2.50%

German Dax :  CLOSED DOWN 195.87 POINTS OR 1.65%

 

Paris Cac CLOSED DOWN 109.63 POINTS 2.05%

Spain IBEX CLOSED DOWN 116.80 POINTS or 1.41%

Italian MIB: CLOSED DOWN 272.92 POINTS OR 1.30%

 

 

 

 

 

WTI Oil price; 55.27 12:00  PM  EST

Brent Oil: 60.53 12:00 EST

USA /RUSSIAN /   RUBLE RISES:    65.07  THE CROSS LOWER BY 0.16 RUBLES/DOLLAR (RUBLE HIGHER BY 16 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS  TO –.51 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 :  54.81//

 

 

BRENT :  59.74

USA 10 YR BOND YIELD: … 1.74//down 10 full basis pts…

 

 

 

USA 30 YR BOND YIELD: 2.29/down 9 full basis pts…

 

 

 

 

 

EURO/USA 1.1196 ( UP 91   BASIS POINTS)

USA/JAPANESE YEN:106.17 DOWN .368 (YEN UP 37 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 97.56 DOWN 51 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.2142 down 8  POINTS

 

the Turkish lira close: 5.5777

 

 

the Russian rouble 65.49   down 0.025 Roubles against the uSA dollar.( down 25 BASIS POINTS)

Canadian dollar:  1.3216 down 22 BASIS pts

USA/CHINESE YUAN (CNY) :  7.0507  (ONSHORE)/we need to watch these levels/anything greater than 6.95 will be deadly./

 

USA/CHINESE YUAN(CNH): 7.0946 (OFFSHORE) we need to watch these levels/anything greater than 6.95 will be deadly/

German 10 yr bond yield at 5 pm: ,-0.51%

 

The Dow closed DOWN 767.27 POINTS OR 2.96%

 

NASDAQ closed DOWN 335.30 POINTS OR 02.61%

 


VOLATILITY INDEX:  23.12 CLOSED UP 5.51

LIBOR 3 MONTH DURATION: 2.239%//libor dropping like a stone again

 

USA trading today in Graph Form

Carnage: Stocks Plunge Most In 2019 As China Sparks Global Turmoil

Remember a week ago – smooth sailing, record highs, goldilocks, Fed, not a care in the world. And then…

… China unexpectedly allowed the yuan to devalue dramatically in retaliation to Trump’s latest tariff hike…

And all hell broke loose…

 

… as Chinese stocks closed at their lows…

Elsewhere in Asia, Hong Kong Dollar forwards plunged to a level that suggests a peg breach within 12 months

This wasn’t lost on Hong Kong stocks which amid violent protests, tear gas, a crippling strike  and the threat of an imminent Chinese invasion, tumbled 3%, erasing the year’s gains, and suffering the longest losing streak since 1997.

European stocks were also hammered – their biggest two-day drop in thee years – playing catch down to US markets from Friday and extending Friday’s biggest losses of 2019…

German DAX broke to its 200DMA…

German Bund yields crashed to new record lows -53.6bps!!!

But Germany is not alone…

Charlie Bilello

@charliebilello

Negative Bond Yields through…
50 yrs: Switzerland
30 yrs: Germany, Netherlands
20 yrs: Denmark
15 yrs: Japan, Austria, Finland, Sweden, France, Belgium
10 yrs: Slovakia, Ireland, Slovenia
8 yrs: Spain
7 yrs: Portugal
5 Yrs: Malta
3 yrs: Cyprus
2 yrs: Italy
1 yr: Bulgaria

View image on Twitter

 

Since Powell started speaking (and Trump’s tariffs), bonds and bullion are well bid, the USD is marginally weaker and stocks are a bloodbath…

 

US equities collapsed today – worst day of the year – with the S&P dropping over 3%, its worst drop since December 2018 before recouping some losses.

… while the Dow briefly dropped almost 1000 points, the third biggest point drop in history.

… and all sectors tumbling although homebuilders were the best of the worst:

Nasdaq is down six days in a row – its longest losing streak since before Trump was elected (Oct 2016)

Technical Support was blasted – Small Caps, Trannies <200DMA and S&P, Dow, Nasdaq <100DMA

FANG Stocks were slammed (not helped by the 8th straight down day for AMZN)…

AAPL plunged on the day, now down 13% from earnings night highs…

Hipster@Hipster_Trader

“Bitcoin is too volatile.” – guy invested in Apple, with its $1 trillion market cap, which is -12% in 4 days

VIX hit 23 (doubled off its 11 handle from just over a week ago)…

And credit spreads blew wider…

Treasury yields collapsed to fresh cycle lows…

10Y Yields are back below Trump election lows, sliding as low as 1.72%, less than 30bps from all time lows…

The 3 Month-10 Year yield curve collapsed to its most inverted this cycle (most inverted since 2008)

Despite the crash in the yuan, the dollar also slipped lower, holding at pre-Powell levels…

The carnage also swept across developing markets, with the EM FX plunging to 11 month lows…

The safe haven today – in addition to Treasurys – bitcoin and other cryptos which were aggressively bid over the weekend amid the chaos in China and Hong Kong…

Pushing Bitcoin up near $12,000…

Copper and Crude lagged as PMs rallied on the day…

WTI extended losses from last week…

And gold soared on the day, despite “their” best efforts to crack into the London Fix…

Indeed, as some pointed out, in addition to soaring cryptos, silver and especially gold did just fine…

Adonis VanCampen@AdonisVanCampen

Gold and Silver doing just FINE! pic.twitter.com/2xrS5tIm8F

… and gold has now overtaken the S&P 500 year-to-date…

Gold in Yuan has exploded higher…

And gold in pounds remains at a new record high…

Bitcoin and Bullion are bouncing back up to the “policy-maker-idiocy indicator” as negative-yielding debt keeps soaring…

Finally, stocks have a long way to fall yet to catch down to bonds’ reality…

If and when that happens…

The_Real_Fly@The_Real_Fly

Today’s markets action

Embedded video

END

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

MARKET TRADING//USA

a)Market trading/THIS MORNING/USA

Gold spikes and the Dow crashes below 26,000// the 10 yr bond yield crashes to 1.77%

(zerohedge)

Gold Spikes As Dow Crashes Below 26k, Down 1500 Points From Pre-Powell Highs

Well that escalated quickly…

The Dow is down almost 1500 points from its pre-Powell highs, breaking back below 26k erasing all the “trade truce” gains…

This pushed the cash Dow to the high right before December’s collapse…

 

 

 

Gold is soaring…

END

b)MARKET TRADING/USA/ LATE MORNING//EARLY AFTERNOON

“On A Scale Of 1-10, It’s An 11” – Wall Street Reacts To China’s Retaliation

One day after China finally snapped, and demonstratively refused to intervene and keep the CNH above 7.00 vs the dollar, escalating the trade war into a currency war, stocks are tumbling and Wall Street analysts – all of whom had been bullish until now – are scrambling to adjust their narrative.

With the S&P dropping more than 2%, bringing its slide from the all time highs just two weeks ago to more than 5%, semiconductors which are most directly exposed to Chinese trade, and banks stocks, which are sensitive to interest rates, are among the hardest hit sectors.

As widely expected, President Trump himself joined the fray and on Monday morning tweeted about China and the Fed saying: “China dropped the price of their currency to an almost a historic low. It’s called ‘currency manipulation.’ Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!” In doing so, he once again confirmed that he is using trade war as leverage to get Powell to cut rates further, as BofA showed in the following simple schematic:

 

But while Trump’s reaction was expected, what was more interesting is how sellside analysts – until recently predicting that the S&P will enjoy smooth sailing well into the 3,000, are adjusting their trading recos now that the worst case scenario in the trade war with China has materialized. So, courtesy of Bloomberg, here are some samples of the latest sellside commentary:

Cowen, Chris Krueger

Krueger called China’s retaliation “massive,” adding that “on a scale of 1-10, it’s an 11.”He cited the Chinese government calling on state buyers to halt U.S. agricultural purchases, while there’s “increased anecdotal evidence that the Chinese government is tightening its overview of foreign firms.”

“While there were measures that could have been chosen with larger direct effects on supply chains, the announcements from Beijing represent a direct shot at the White House and seem designed for maximum political impact,” Krueger said. “ We expect a quick (and possibly intemperate) response from the White House, and consequently expect a more rapid escalation of trade tensions.”

There now will be increased expectations that the Fed will cut again in September to offset the drag caused by this escalation in the trade war,” he added. “Such moves will only be a partial, lagged offset to the recessionary headwinds a cycle of retaliation would cause.”

BMO, Ian Lyngen

The wait is over for those wondering how Beijing would respond to Trump’s recent tariff announcement. The result: the yuan was allowed to depreciate well beyond 7.0.

Instructing state-owned Chinese firms to halt U.S. crop purchases triggered “the obligatory flight-to-quality,” which pushed 10-year yields to 1.74%, with two-year yields keeping pace. That was “an impressive move that suggests August will not experience the traditional summer doldrums. Who needs vacation anyway?”

“The most significant unknown at this moment,” Lyngen added, “is how much further the yuan will be allowed to fall given that it’s already the weakest since 2008.”

Morgan Stanley, Betsy Graseck

Bank investors’ eyes were “glued to the yield curve last week,” with Trump’s tariff tweet on Thursday, Graseck wrote in a note. They’re now asking about Morgan Stanley’s net interest margin (NIM), outlook.

Graseck didn’t change her NIM assumptions yet. “We bake one additional cut of 25 basis points in 2019 in-line with our economist, and bake in the 10-year at 1.75% by mid 2020,” she wrote. She’ll update NIM and earnings per share estimates “if it looks like these trade tariffs are going through as September approaches.”

Morgan Stanley, Michael Zezas

“The dynamics of U.S.-China negotiation and macro conditions mean the next round of tariffs will likely be enacted, and investors are likely to behave as if further escalation will follow in 2019 until markets price in impacts,” Zezas wrote. “This supports our core view of weaker growth and skews the Fed dovish.”

Zezas sees incentives for the U.S. to escalate quickly. If the administration “understands the Fed’s trade policy reaction function, then it may also perceive that a more rapid escalation could deliver one or more of three beneficial points ahead of the 2020 election: 1) A quicker, potentially more aggressive Fed stimulus response that could help the economy heading into the election; 2) More time to re-frame the potential economic downside; and 3) A major concession by China (not our base case, but it is, of course, a possibility).”

Source: Bloomberg

END

Trading: early afternoon

Gold Overtakes S&P Year-To-Date As Dow Dumps 700 Points

The bloodbath is accelerating…

Stocks are puking…

Dow is down over 700 points…

Bonds, Bullion, and Bitcoin are bid…

And gold is beating the S&P year-to-date…

How many points before Mnuchin calls?

end

ii)Market data/USA

THE SERVICE SECTOR is much stronger to USA GDP than Mfg. Now the latest ISM service and Markit print is the lowest in 3 years. The key factor in this report is that business expectations plunged to a record low.  The Markit survey was bad but the ISM was horrible. Again Markit and ISM diverge.

(zerohedge/ISM Service/markit)

ISM Services Weakest Since 2016, Business Expectations Hit Record Low

On the heels of disappointing US Manufacturing ISM/PMI prints last week – and global surveys – US Services surveys were expected to show a modest rebound in July.

Markit’s Services PMI did surprise to the upside, printing 53 (from 51.5 in June and above the 52.2 flash print), but business expectations plunged to a record low.

Although client demand strengthened further from May’s recent low, service sector firms reported another fall in business confidence during July. The degree of optimism slipped for the sixth month running to a fresh series record low, reflecting heightened economic uncertainty.

ISM’s Services survey collapsed to its weakest since August 2016 (printing 53.7 vs 55.5 expected)

  • Business activity fell to 53.1 vs 58.2 prior month
  • New orders fell to 54.1 vs 55.8
  • Prices paid fell to 56.5 vs 58.9
  • Backlog of orders fell to 53.5 vs 56
  • New export orders fell to 53.5 vs 55.5

So, Markit’s Services respondents seem to be in a world of their own…

 

 

Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“An improvement in the overall rate of business growth signalled by the services PMI for July is welcome news, but the overall weak pace of expansion remains a concern. The PMIs for manufacturing and services collectively point to GDP expanding at an annualized rate of under 2% in July, below that seen in the second quarter and among the weakest seen over the past three years.

However, Williamson was quick to steal the jam out of that donut…

A sharp drop in future expectations meanwhile suggests downside risks have increased in the near-term at least, hinting that the upturn in growth seen in July could prove short-lived and that GDP growth could remain disappointingly modest in the third quarter.

Optimism is at its lowest ebb since comparable data were first available in 2012 as companies have grown increasingly concerned about the year ahead, fueled by trade war worries and wider geopolitical jitters, as well as growing worries that the economic cycle has peaked.”

So take your pick – headline improvement (buy stocks because here comes the rebound), or under the cover collapse in confidence (buy stocks because Fed will save us all)… or sell.

end

iii) Important USA Economic Stories

The homeless crisis now spreads in California to Orange county. It has doubled in two years.

(ZEROHEDGE)

California’s Homeless Crisis Spreads To Orange County, Doubles In Two Years 

Orange County, California, like much of the state, has seen tremendous house price gains since the great recession. Over time, residents who had access to cheap credit could afford to live in the county, resulting in a significant gap between the rich and poor.

A new 149-page report from Orange County’s 2019 homeless Point In Time Count published on July 30 to the Board of Supervisors, sheds more light into the expanding wealth gap that has left the county with a homelessness crisisreported Orange County Register.

According to the report, 6,860 people were counted as homeless in Orange County in January, up 43% from two years earlier.

 

The findings reveal black, African American or multi-racial, as well as Hispanic or Latino families, make up an increasing percentage of homeless people in the county.

White people represented the largest single group of homeless people: more than two-thirds of individuals with and without shelter.

About 8.41% of homeless people in the county without shelter were black or American. A little over 12% of the unsheltered are described as “Multiple Races” (no definition provided) or “Other,” compared to 3.5% overall.

The survey found more men were homeless (4,310 or 62%) than women (2,546).

County supervisors discussed Tuesday at a meeting about ideas to defeating homelessness. Their plan: build more affordable housing with support services.

“Not just in Orange County, but across the state, we have a shortage of both affordable and available housing to meet the needs of our populations,” said Susan Price, the county’s coordinator of homeless services.

Price said 600 shelter beds were created in Orange County over the last several years, in anticipation of a surge in homelessness.

“We’re working on the system in all components…to the endgame, which is housing for everyone.”

Other findings:

  • About one in four homeless people in Orange County – totaling 1,654 people – reported having mental health issues.

A total of 311 homeless veterans were counted in the survey. Price said the county’s plan is to house 20 veterans per month.

Advocates criticized the county for allowing home prices to soar in the last decade while doing very little for affordable housing. They said many of these homeless people could not afford to rent or own because of prices outpacing their wages.

Several months ago, we cited ATTOM Data Solutions’ 2Q19 US Home Affordability Report, that said Orange County was one of the most unaffordable housing markets for the average American.

And it certainly seems California’s housing affordability crisis is getting worse, has resulted in an explosion in the homeless population not just in Orange County, but also in San Francisco and Los Angeles County. With no end in sight, California’s homelessness crisis is expected to deepen in the early 2020s.

end

 

Two major mass shootings over the weekend: On Saturday morning 20 dead and 26 injured in El Paso.  Then Saturday night in Dayton Ohio, 9 dead and 26 injured.

(zerohedge)

Another Mass Shooting Leaves 9 Dead, 26 Injured In Dayton, Ohio Bar District

Just hours after the mass shooting in an El Paso, Texas mall, nine people are dead after a shooting in Dayton, Ohio, according to police. At least 26 were hospitalized with injuries.

The gunman was taken out by officers responding to the incident.

CNN reports that the Dayton shooting took place around 1 a.m. outside on East 5th Street in the city’s Oregon district, a popular downtown area, Dayton Deputy Director and Assistant Chief of the Police Lt. Col. Matt Carper told reporters early Sunday morning.

 

“As bad as this is, it could have been much, much worse, as I think everyone will become aware of here as more information unfolds,” Carper said.

Though many people were killed or injured, Carper said that the incident was over quickly, because officers were already patrolling in the vicinity when the gunshots started.

Dayton police said the shooter used some kind of a long gun in the attack and most likely acted alone. They said they were working on identifying the gunman and establishing the motives behind his rampage.

“I’m heartbroken,” Dayton Mayor Nan Whaley tweeted Sunday morning.

“Thank you to our first responders for all that you’ve done. We will share updates as we have more information.”

Footage from the scene showed a heavy police presence in the Oregon District. According to the police, the FBI is assisting in the investigation.

Mayor Whaley said the shooter used a “.223 high-capacity” gun and had additional magazines with him. The .223 caliber is used in rifles like the AR-15 assault rifle used in previous mass shootings.

“In less than one minute, Dayton first responders neutralized the shooter,” Whaley said.

I really want to — think about that minute. The shooter was able to kill nine people and injure 26 in less than a minute. And if we did not have police in the Oregon District and the thousands of people in the Oregon District enjoying their Saturday evening, what we could have had in this city,” Whaley said.

Elizabeth Long, spokeswoman at Kettering Health Network, which operates several Dayton area hospitals including Kettering Medical Center and Grandview Medical Center told CNN that 13 people were taken to three of the network’s hospitals, many with gunshot wounds to the “lower extremities.” At least one person was shot in the abdomen and at least two people were taken into surgery. She did not give an age range for the injured.

end

This is no surprise:  Trump overruled all of his advisers except Navarro before launching new China tarifs

(zerohedge)

Trump Overruled All Advisers Except Navarro “In Heated Exchange” Before Launching New China Tariffs

On Friday, when we learned courtesy of the WSJ that Trump imposed the latest, and very unexpected, round of Chinese tariffs less than 24 hours after Powell’s “insufficient” rate cut, he did so by overruling Treasury Secretary Steven Mnuchin in at least giving Beijing the courtesy of an advance notice, and instead China – like the rest of the world – learned what was coming by reading Trump’s twitter feed, resulting in a violent market selloff. Commenting on this development, we said on Friday that Trump’s refusal “suggested that the trade hawks are now fully in charge of the situation in the White House.”

It turns out we were more right than even we expected, because on Sunday, because as the WSJ reported today in its extensive post-mortem, not only did Trump overrule Mnuchin’s tacit suggestion, but he also overruled all of his advisors – with the exception of trade hawk Navarro – when deciding to ramp up tariffs on China “after a heated exchange in which he insisted levies were the best way to make Beijing comply with U.S. demands.”

We already know the backstory: the trade talks which took place in Shanghai early last week, were brief and unproductive, with U.S. Trade Rep Robert Lighthizer and Treasury Secretary Steven Mnuchin both in China for just over 24 hours, and their itinerary consisted of a dinner the night they arrived and a meeting that lasted about three hours Wednesday. The outcome was a disaster for anyone who was hoping for trade talk progress.

Then, upon their return, the trade negotiators and other top advisers congregated early Thursday afternoon in the Oval Office to brief Mr. Trump on the talks. Lighthizer and Mnuchin conveyed that they didn’t yield the kind of results that Mr. Trump had intended, the people said.

 

While we already knew of this meeting, it is what happened during, that was first reported by the WSJ today. According to the report, Trump, who had a re-election rally scheduled in Ohio later that day, “wanted to be able to assure farmers—who have been hardest hit by the trade fight as China scaled back purchases of U.S. corn, soybeans and pork—that he had at least secured concrete commitments from the Chinese that they would boost their purchases of U.S. agricultural exports.”

However, that was not meant to be, and “to his frustration, Messrs. Lighthizer and Mnuchin couldn’t give him any guarantees.”

That’s when an angry Trump exploded: “Tariffs,” the president boomed to those present, including national-security adviser John Bolton, top economic adviser Lawrence Kudlow, China adviser Peter Navarro and acting chief of staff Mick Mulvaney.

And the punchline: all of them, except for China hawk Navarro, adamantly objected to the tariffs, the WSJ sources said. That spurred a debate lasting nearly two hours, although at the end “the president said his patience had worn thin and stood by his argument that tariffs were the best form of leverage.” Also, as a reminder, Beijing insists that tariffs must be dropped in return for concessions demanded by the U.S., virtually assuring that any change for a deal breakthrough is now even less.

In the end, Trump’s advisers conceded and helped the president draft the tweet announcing an extension of tariffs to essentially all Chinese imports.

What is even more striking, is that Trump’s decision followed weeks of advice from some of his top advisers, including his son-in-law Jared Kushner, to put China talks on the back burner, according to the people and a former administration official. Instead, the advisers urged Trump to focus on other trade pacts, including the pending deal with Canada and Mexico, which still needs congressional approval, as well as talks with Japan, which in recent weeks have gained momentum, these people said.

The proponents for not escalating the trade feud with China argued that any deal with Beijing is likely to be attacked as too soft by Democrats in Congress, and that an escalation in tariffs will eventually start to become a drag on the economy.

There is of course the “other” reason for the tariffs: the Trump-Fed feedback loop discussed extensively earlier today…

… and as the WSJ notes, “Trump’s resolve to impose the tariffs may have been further strengthened by the Federal Reserve’s decision just one day earlier to cut its benchmark interest rate by a quarter percentage point, which could give an already strong U.S. economy extra fizz.”

Then there is the fact that contrary to export warnings, the US economy has not suffered as a result of the ongoing trade war – unlike that of China, whose GDP is plumbing record lows – while inflation has remained dormant, failing to rise due to tariffs.

“The economic effects (of the trade dispute), at least in President Trump’s eyes, haven’t been massive on the U.S. economy and he’s got what he thinks the Fed is lowering rates to accommodate his trade policy,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics. “Perhaps that emboldened him to do more tariffs.”

Of course, this too will soon change if Trump follows through with the 3rd round of largely “consumer-focused” tariffs (as described here)…

… which will have a far more immediate and profound impact on inflation, resulting in not only surging prices…

… but also an economic slowdown, which will likely translate into a stagflation in the coming months, with the Fed trapped to make any material monetary policy changes.

Meanwhile, China – which surely did not expect this adverse escalation in relations – has even bigger fish to fry with the situation over the ongoing instability in Hong Kong and ever more aggressive protests, likely forcing Beijing to intervene directly, as it warned over the past 48 hours it would unless protests fizzled out, which they are unlikely to do. And just so it has a pretext to do so, last week, just before the trade talks got under way, China’s Foreign Ministry accused Washington of being behind mass antigovernment protests in Hong Kong, with a spokeswoman calling them “the work of the U.S.”

What this means is that the chance of any trade deal resolution is now at best a mirage:

“Within Chinese government circles, there are strong voices against any deal with the Trump administration,“ said Myron Brilliant, head of International Affairs at the U.S. Chamber of Commerce. “With each escalation by either government, the two sides grow further apart and prospects of a comprehensive high-standard agreement more remote.”

Still, despite the deterioration in talks, Mr. Trump signaled confidence in the U.S. position from his New Jersey golf resort on Saturday. “Things are going along very well with China,” he said on Twitter, although it is fair to say that not even the algos believed that.

“They are paying us Tens of Billions of Dollars, made possible by their monetary devaluations and pumping in massive amounts of cash to keep their system going. So far our consumer is paying nothing—and no inflation. No help from Fed!”

Perversely, the Fed ishelping – it is doing so by underwriting Trump’s trade war, and the more said trade conflict escalates, the more aggressively the Fed will be bound to ease, helping Trump achieve his goal of at least boosting stocks temporarily higher…. before they crash.

Why?  Because as BofA explained earlier today, the game theoretical equilibrium that has emerged for the trade war is one of “no pain, no deal”, and while a substantial equity market correction could delay the threatened tariffs, so far the market refuses to even consider a “substantial correction” – while the S&P 500 did sell off by almost 2% on Thursday after the tariffs were announced, this is a negligible drop from an all time high in the S&P above 3,000.

As a result, and given that markets were at all-time highs just a few days earlier, BofA believes that it will probably take at least a textbook definition market correction (i.e., a 10% decline) to move the needle on trade policy.

In short: the fate of the US-China trade war it in the hands of the market now, just as it was in November and December, when Trump capitulated faced with the prospect of an S&P500 bear market. This time won’t be different.

end

iv) Swamp commentaries)

We should see the release of Bruce Ohr’s 302’s which will no doubt put light on the nefarious activities of the Dept of Justice and the FBI in the surveillance of Trump;’s team during the election

(zerohedge)

DOJ Expected To Release Bruce Ohr 302 Reports, Other Documents This Week

The DOJ will release a cache of FBI documents early next week related to Justice Department official Bruce Ohr, who – along with his CIA-linked wife Nellie, had extensive interactions with Christopher Steele during the period in which the FBI was using the former British spy’s fabricated dossier against the Trump campaign.

In a court filing submitted last Thursday, Justice Department lawyers said the agency will provide FBI notes of interviews conducted with Ohr to Judicial Watch, a conservative watchdog group that sued for the records last year.

Justice Department lawyers said the agency had initially determined that the Ohr transcripts, known as 302s, should be withheld in full. But “after further review in conjunction with DOJ’s preparation of its motion for summary judgment, DOJ has decided to release the requested records in part to Plaintiff,” the lawyers said.

“DOJ will make this release to Plaintiff by August 5, 2019.” –Daily Caller

According to the Daily Caller‘s Chuck Ross, Judicial Watch filed suit on September 10 for a dozen 302 reports – which are summaries of FBI interviews with suspects or witnesses. The lawsuit sought reports compiled between November 22, 2016 and May 15, 2017.

Last August, emails turned over to Congressional investigators revealed that Bruce Ohr was Steele’s conduit to the Obama administration – as Ohr was the #4 DOJ official at the time and reported to former Deputy Attorney General Sally Yates.

Steele and the Ohrs would have breakfast together on July 30, 2016 at the Mayflower Hotel in downtown Washington D.C., while Steele turned in installments of his infamous “dossier” on July 19 and 26. The breakfast also occurred one day before the FBI formally launched operation “Crossfire Hurricane,” the agency’s counterintelligence operation into the Trump campaign.

Steele was under contract by opposition research firm Fusion GPS, which the Clinton campaign hired to dig up dirt on Donald Trump. Notably, Bruce Ohr was demoted twice after the DOJ’s Inspector General discovered that he lied about his involvement with Fusion GPS boss Glenn Simpson.

FBI investigators had tasked Ohr to serve as an unofficial backchannel to Steele as part of the bureau’s investigation of the Trump campaign’s possible ties to Russia. The FBI cut ties with Steele on Nov. 1, 2016, after learning that he had unauthorized contacts with the media about his work as an FBI informant. –Daily Caller

Also interesting is that Bruce Ohr told Congressional investigators that his wife Nellie – a Russia expert who speaks fluent Russian, passed Bruce research conducted during her employment with Fusion GPS.

Republican lawmakers have suggested that the 302 reports could undercut Steele’s credibility – along with that of his largely unproven or discredited dossier.

end

v) King report/Courtesy of Chris Powell of GATA which includes the major swamp stories.

The King Report August 5, 2019 Issue 6063                                                                                   

 

The July Employment Report was largely in line with expectations at 164k; however the BLS reduced its seasonal adjustment by 69k jobs from July 2018.  Thus, the report was stronger than expected.

 

ESUs, which were negative during Asian and morning European trading, surged 28 handles after the July Employment Report appeared.  The misguided, algo-induced rally marked the peak (2961).  By 11:00 ET, ESUs had cascaded to 2913.50, a 48-handle tumble.

 

Algos and lemmings bought ESUs on the headline NFP number.  Possibly, wiser guys read the details of the report and figured out that the BLS deleted 69k jobs from its dubious seasonal adjusting.

 

The BLS reports that July NFP declined 1,059k NSA.  This was adjusted to +164k.  Ergo, the seasonal adjustment is +1.223m.  PS – The BLS has been working against DJT (retail sales reports < industry #s).

 

Jan Feb Mar Apr May Jun Jul
Total nonfarm over-the-month change -2,908 853 716 1,074 672 632 (p) -1,059 (p)

https://www.bls.gov/web/empsit/cesbd.htm

 

2018 Total nonfarm over-the-month change, not seasonally adjusted (in thousands)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Total nonfarm over-the-month change 1,015 977 702 -1,114 505 340 1,060 522 -172

https://www.bls.gov/web/empsit/cesbd.htm

 

For July 2018, the BLS reported 178k NFP seasonally adjusted [Originally 157k].  Ergo, the seasonal adjustment was +178k + 1,114k or +1.292 million jobs.

 

The net revision for the prior two months is -41k NFP.  Education & Health Services provide 66k jobs.  The Unemployment Rate increased 0.1 to 3.7%; but the Labor Force Participation Rate increased 0.1 to 63% and the Under-employment Rate (U6) fell 0.2 to 7%, the lowest level since 2000.

 

Wages grew 3.2% y/y; 3.1% was expected.  But, the workweek fell 0.1 to 34.3 hours.  Manufacturing increased 16k; 5k was expected.  As we warned, this is probably due to delayed retooling.

 

Manufacturing added the most jobs since January, coming in above all economist estimates

The jobless rate held at 3.7%, near a half-century low, while average hourly earnings climbed 3.2% from a year earlier, better than forecast… There was no indication that hiring of temporary census workers had a significant effect on payrolls…   https://bloom.bg/2SXOPc8

 

The July Household Survey shows an increase of 283k jobs and a labor force increase of 370k.  Unemployed increased 88k.  Part-time for economic reasons dropped 383k (slack conditions -322k).  Part-time for non econ declined 87k.  Full Report athttps://www.bls.gov/news.release/pdf/empsit.pdf

 

The Fed is killing retirees and preventing people from retiring via its financial repression.

 

Multiple Jobholders Soar to Record High as Old Americans Can’t Afford to Retire

The number of multiple-jobholders soared from 7.855 million in May, to 8.156 million in June, to a new all-time of 8,389 million in July, a monthly increase of 233K and 591,000 higher in the past three months, which was a clear indication that the jobs number was far weaker than the headline represents if one excludes all those workers who represented two jobs to the BLS’ various surveys.… The labor force participation rate for workers 55 and old surged to the highest level in 7 years…

https://www.zerohedge.com/news/2019-08-02/multiple-jobholders-soar-record-high-old-americans-cant-afford-retire

 

China rebutted Trump’s new tariff threat and threatened to institute retaliatory measures.

 

@ChinaDaily: China will not accept any kind of extreme exertion of pressure, intimidation or blackmail.Neither will China give in an inch on major issues of principle,” Chinese Foreign Ministry spokeswoman Hua Chunying said on Friday… “Now it’s time for Washington to show sincerity and demonstrate to the world that the US is still a reliable partner that can carry out negotiations,” she said…

http://www.chinadaily.com.cn/a/201908/02/WS5d440128a310cf3e355639f4.html

 

China says to take countermeasures if U.S. bent on putting tariffs on Chinese goods

China doesn’t want a trade war, but it isn’t afraid of fighting one, Hua Chunying, spokeswoman at the foreign ministry, said at a daily press briefing… [There’s been a 1-way war for over 2 decades.]

https://www.reuters.com/article/us-usa-trade-china-response/china-says-to-take-countermeasures-if-u-s-bent-on-putting-tariffs-on-chinese-goods-idUSKCN1US0QN

 

Near the NYSE open on Friday, Kudlow said Trump’s scheduled afternoon announcement is about a beef deal between the US and EU.  Thursday night rumors said DJT would install tariffs on EU autos.

 

UMich Confidence Dips [unchanged @84.4, 84.5 exp.] As Middle-Income Americans’ Hope Plunges

While the highest income Americans became more confident in July, middle-income Americans’ confidence tumbled to 5-month lows… [The problem with DJT’s stock-centric economic policy]

https://www.zerohedge.com/news/2019-08-02/umich-confidence-dips-middle-income-americans-hope-plunges

 

UM Current Conditions declined to 110.7 from 111.1; Expectations increased to 90.5 from 90.1.

 

After the early stock market plunge in the US, a classic ‘A-B-C’ (up, down, up) rally appeared.  The initial up leg was the obligatory rally attempt into the European close.  The down leg occurred when selling appeared ten minutes before the European close.  The ‘C’ wave was the Noon Balloon attempt.  It ended at 12:25 ET.  ESUs and stocks then retreated.

 

When the midday retreat stayed above the session low, ESUs and stocks went inert until a modest VIX Fix rally appeared.  After the VIX Fix, stocks traded wildly within an 8-handle range until the people trying to juice ESUs won the battle with 45 minutes remaining in the session.  ESUs spiked 24 handles higher from 15:16 to 15:37.  This is blatant manipulation!  But, sellers reappeared.  The late decline was abetted when Trump said tariffs on EU cars are NEVER off the table.  The afternoon was the typical lackluster activity that occurs in summertime on Friday.

 

Lowe’s Lays off Thousands of Store Workers

Home-improvement chain will outsource maintenance, assembly jobs as retailers scrutinize labor costs

     Retailers from Walmart Inc. to the smallest shops are under pressure as they increase starting hourly wages to attract workers in a tight U.S. job market… [The Fed & its pawns think inflation is too low?!]

https://www.wsj.com/articles/lowes-lays-off-thousands-of-store-workers-11564680676

Gillette CEO: $8 Billion Loss over Woke Ads ‘Worth Paying’ [Ideology uber alles!]

Gillette debuted a commercial in January that not only spotlighted the #MeToo movement but attacked traditional masculinity. In a series of scenes, the commercial depicted men and boys engaging in sexual harassment, bullying and workplace condescension towards women… The commercials received widespread pushback on social media. Coombe told Marketing Week that the backlash was more intense than he expected, but that he doesn’t regret running them…

     The company blamed the loss on currency fluctuations as well as “market contraction” due to the continued fad of men growing out facial hair.

https://www.breitbart.com/tech/2019/08/02/gillette-ceo-8-billion-loss-over-woke-ads-worth-paying/

Buffett Steers Clear of Buying Stocks; Berkshire’s Cash Pile Hits a Record  

  • Berkshire was a net seller of equities and slowed repurchases
  • Operating earnings drop 11% while stock gains boost net income

https://www.bloomberg.com/news/articles/2019-08-03/buffett-s-cash-pile-hits-record-as-berkshire-holds-122-billion

Abrupt Ousters, Public Missteps Sink Morale inside New York Fed – On Wall Street, concerns about John Williams’ leadership of the Fed’s most important regional reserve bank keep growing.

The story involves Simon Potter, who ran the all-important markets desk, and Richard Dzina, head of the financial services group. Both were abruptly relieved of their roles in late May by Williams

https://www.bloomberg.com/news/articles/2019-08-04/abrupt-ousters-shake-staff-inside-new-york-fed

We wonder if Plunge Protection, VIX selling and leaks are factors in the turmoil at the NY Fed.

NY Fed Slams Study Showing Alleged Collusion between Fed, Banks around FOMC Meetings

As The Wall Street Journal reports, Finer found a jump in New York City taxi cab activity between the Federal Reserve Bank of New York and major Wall Street banks around the time of central bank policy meetings, and the study’s author says the findings suggest an increase in informal communications between Fed employees and individuals in the private sector could be occurring…

https://www.zerohedge.com/news/2018-03-10/rigged-nyfed-slams-study-showing-increased-comms-between-banks-fed-around-fomc

@JanGold_: Germany to lower “anonymous gold buying” from €10,000 to €2,000.

Even for 50 grams of gold cash must be identified

https://www.welt.de/finanzen/article197721851/Gold-Schon-wer-50-Gramm-bar-kauft-muss-sich-ausweisen.html

For the past several years, each time stocks declined significantly, someone with a vesting interest in stocks surfaced with a scheme for central banks or governments to boost stocks.

Eric Lonergan of M&G Prudential: Central banks should consider giving people money

https://www.ft.com/content/1d1610bc-b500-11e9-b2c2-1e116952691a

After El Paso shooting, Mexico to take legal actions to protect Mexicans in U.S [Despite record murders of Mexican citizens at the hands of drugs cartels in Mexico, enabled by corrupt politicians]

https://uk.reuters.com/article/uk-texas-shooting-mexico-idUKKCN1UU0JZ

Today – The daily trend for stocks is down; but there will be vicious rallies on short covering and FOMO buying.  However, barring unexpected good news, stocks need to do some work before a meaningful rally can materialize.  This is a big vacation week.  Kids start back to school in the following two weeks.  Trading should be muted; but in a thin market, a determined few can generate violent moves.

ESUs opened 7 handles lower on Sunday night.  Traders bought the dip because they are conditioned to buy on Sunday night for the expected Monday rally.  Just as ESUs turned positive, the offshore yuan violated what had been perceived as the Maginot Line, 7 yuan to the dollar.  ESUs tanked 28 handles on the fear that the yuan devaluation was retaliation for DJT’s new tariffs – and DJT would go berserk over theostensible currency war.  Remember, traders are conditioned to buy early US declines.

The S&P 500 Index 50-day MA: 2928; 100-day MA: 2900; 150-day MA: 2829; 200-day MA: 2790

The DJIA 50-day MA: 26,475; 100-day MA: 26,278; 150-day MA: 25,823; 200-day MA: 25,557

S&P 500 Index support: 2918-20, 2913, 2900, 2890, 2880, 2870, 2860

Resistance: 2945, 2955, 2963, 2970, 2980, 2990, 3000, 3013-17, 3025-3030, 3040, 3050, 3057

Expected economic data: Markit July US Services PMI 52.3; July ISM Non-Mfg PMI 55.5

Expected impact earnings: L .75, TSN 1.44, MAR 1.56, O .81

S&P 500 Index – Trender trading model and MACD for key time frames

Monthly: Trender is positive;MACD is negative – a close below 2502.93 triggers a sell signal

Weekly: Trender and MACD are positive – a close below 2818.78 triggers a sell signal

Daily: Trender andMACD are negative -a close above 3048.94 triggers a buy signal

Hourly: Trender andMACD are negative -a close above 3009.25 triggers a buy signal

Ex-Nat’l Security operative @Charles_S_Viar: Former West Point Professor of Psychology Col. David Grossman helped develop the Army’s techniques for overcoming soldiers’ inhibitions against killing – which were promptly embedded in video games.  We have raised a generation of unstable youths who will latch on to any ideology that permits them to act out their deadly fantasies.

Ex-Ranger Grossman: We found out in World War II, most of our troops wouldn’t pull the trigger,” he said… What Grossman calls killing simulators were developed.  Rather than shooting at bullseyes, targets were human silhouettes, shot at using an M-16-like game controller. The simulators brought the desired results, and computer games became very interesting to the military. Similar videogames have reached the public, and have been unregulated in their availability to children, Grossman said…

https://www.mininggazette.com/news/local-news/2018/12/grossman-games-linked-to-violence/

Meet the hero soldier who saved children’s lives during the El Paso Walmart shooting

Army Pfc. Glendon Oakley saves children lives after mass shooting at the El Paso Walmart

https://taskandpurpose.com/el-paso-shooting-glendon-oakley

@JackPosobiec: In Chicago, 1,517 people have been shot this year so far [~40 this weekend!]

Jeffrey Gundlach @TruthGundlach: >300 Chicago gun deaths past 12 months & about the same number of mass shooting deaths nationally. Both so awful. Yet no outrage re: Chicago.

The politicizing of the El Paso massacre began after the first wave of reports of the tragedy.  The MSM and leftists blamed DJT for the shooting.

Beto O’Rourke, the faux ethnic presidential candidate: “President @realDonaldTrump bears responsibility for these shootings along with Fox News.”  https://twitter.com/BetoORourke

Prez candidate Buttigieg on Sunday: “We know we’ve failed America in convincing them Donald Trump is evil & we need to impeach, but now because of these tragedies, it should be obvious to all.

The alleged shooter is a registered Dem whose manifesto slammed the Dem’s open-borders policies and said “the Republican Party is also terrible… pro-corporation and pro-corporation = pro-immigration.

El Paso Terrorist Is a Hardcore Progressive and White Nationalist: Wants Universal Income and Universal Healthcare     https://www.thegatewaypundit.com/2019/08/el-paso-terrorist-is-a-hard-core-progressive-and-white-nationalist-wants-universal-income-and-universal-healthcare/

@guypbenson: Local news report: Dayton killer “was expelled from school after officials found a notebook where he reportedly wrote a list of people who he wanted to rape, kill and skin their bodies.”

@RealSaavedra: Heavy(.)com found the Twitter account of the alleged Dayton attacker. His account promoted: Bernie Sanders, Elizabeth Warren, Antifa, leftism, socialism, Satan, Strong anti-ICE rhetoric

He called the terrorist who attacked the ICE facility in Tacoma a “martyr”

Dayton Police shot the killer within 60 seconds of his attack, saving scores of lives.

Saikat Chakrabarti, The Brain Behind Ocasio-Cortez To Leave Office

Saikat Chakrabarti, was the chief of staff and also managed Rep. Alexandria Ocasio-Cortez’s upstart 2018 campaign… Chakrabarti has also been at the center of legal controversy. In April, he and Ocasio-Cortez were named in a Federal Election Commission complaint accusing them of overseeing a “shadowy web” of political action committees (PACs) that allowed them to raise more cash than they could have legally. The complaint also alleged that a limited liability company was created to avoid federal expenditure requirements by offering Ocasio-Cortez and other Democratic candidates political consulting services at a price so low that the company apparently shut down before the election was even over…  https://saraacarter.com/saikat-chakrabarti-the-brain-behind-ocasio-cortez-to-leave-office/

FBI document warns conspiracy theories [pro DJT/anti Dems] are a new domestic terrorism threat

The document specifically mentions QAnon, a shadowy network that believes in a deep state conspiracy against President Trump, and Pizzagate, the theory that a pedophile ring including Clinton associates was being run out of the basement of a Washington, D.C., pizza restaurant

https://news.yahoo.com/fbi-documents-conspiracy-theories-terrorism-160000507.html

FBI Caught Using Far Left Websites Wikipedia and Snopes as Sources for Junk Report on Deep State “Conspiracy Theories”    https://www.thegatewaypundit.com/2019/08/wow-fbi-caught-using-far-left-websites-wikipedia-and-snopes-as-sources-for-junk-report-on-deep-state-conspiracy-theories/

WaPo: Thousands of U.S. troops could leave Afghanistan under Taliban deal – in exchange for concessions from the Taliban, including a cease-fire and a renunciation of al-Qaeda, as part of an initial deal to end the nearly 18-year-old war, U.S. officials say…

https://www.washingtonpost.com/world/national-security/us-preparing-to-withdraw-thousands-of-troops-from-afghanistan-in-initial-deal-with-taliban/2019/08/01/01e97126-b3ac-11e9-8f6c-7828e68cb15f_story.html

Ratcliffe Out as DNI: The Establishment Didn’t Want Him, So It Does What It Does Best

https://saraacarter.com/ratcliffe-out-as-dni-the-establishment-didnt-want-him-so-it-does-what-it-does-best/

@VeraMBergen: In naming Ratcliffe to be DNI, Trump ignored a warning from Burr, the chairman of the intelligence committee, who told the White House last week that the move would inject more partisan politics into the work of the intelligence agencies [The Deep State]

@ChuckRossDC: Republican Hill source I talked to yesterday said there was some frustration that there was almost no help from the White House in pushing back on media coverage of RatcliffeRatcliffe and his team handled it mostly alone, and were overwhelmed.

@julie_kelly2: Trump makes announcement on Twitter—White House has no strategy in place to defend Ratcliffe and push back against what they KNEW would be a full-on media assault against the guy. He’s left to defend himself as media goes into overdrivewith one unfounded charge after another. A lawmaker who eviscerated Mueller last week now is hung out to dry by White House… [and Senate GOP leaders]

Trump should nominate Adm. Rodgers for DNI.  He’s the guy that blew the whistle on Team Obama and Team Clinton’s illegal accessing of raw NSA data and Team Obama’s spying at Trump Tower.

Former Navy SEAL’s Open Letter to Navy Command: ‘SEALs Aren’t the Problem, it’s the Leadership’ – what is wrong with the leadership that has taken the word of terrorists, politicians and over zealous Navy attorneys or investigators that are selling our brave soldiers out?

    I speak from personal experience. In 2009 my platoon captured the infamous ‘butcher of Fallujah’, so well featured in Chris Kyle’s America Sniper movie. We were subsequently Courts martialed by fellow commanding SEALs; Wilske and Richards. 3 of the 8 of us initially charged stood a full courts martials. Everyone was acquitted as we knew we would be, however the damage was done…

   Every troop should go into battle knowing that no matter what, their commander is behind them if they have to pull that trigger. That is not the case now and it is destroying the military

    You want recommendations on how to address the problem? Stop giving medals to a Navy JAG officers that prosecute your own men. The embarrassment of the President of the United States rescinding a medal should contrast YOUR culture problem. Get the lawyers off the battlefield and if you unleash the dogs of war do not be surprised if we bite. [Too many PC, MSM-fearing top-level officers]

https://www.carlhigbie.com/2019/08/former-navy-seals-open-letter-to-navy-command-seals-arent-the-problem/

California Removes Arrest Reports from Kamala Years [Doesn’t matter; she’s finished.]

Routine website redesign obscures Democrat’s record on criminal justice

https://freebeacon.com/politics/california-removes-arrest-reports-from-kamala-years/

end

Well that is all for today

I will see you Tuesday night.

 

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