SEPT 3//GOLD AND SILVER ADVANCE SMARTLY TODAY: GOLD UP$25.60 TO $1546.//SILVER UP A STRONG 83 CENTS TO $19.15//MAINLAND CHINA ISSUES AN ULTIMATUM TO HONG KONG//MORE RIOTS AGAIN THIS HOLIDAY WEEKEND IN H.K.//TRUMP INITIATES THE TARIFFS ON SEPT 1 AS PROMISED TO WHICH CHINA RETALIATED///NO NEW SIGN OF TALKS BETWEEN THE TWO NATIONS//TROUBLE IN THE UK AS BORIS JOHNSON LOSES MAJORITY WITH ONE MEMBER SWITCHING TO THE OTHER SIDE//LOOKS LIKE WE HAVE A MUTINY ON THE BOUNTY AT THE ECB AS HALF THE MEMBERS WHAT DRAGHI TO STOP BUYING BONDS// MORE ON OUR IRANIAN OIL SHIP TRYING TO UNLOAD ITS OIL//USA MANUFACTURING PMI COLLAPSES LAST MONTH//THE DEVASTATION OF DORION//MORE SWAMP STORIES FOR YOU TONIGHT//

GOLD:$1546.60 UP $25.60 (COMEX TO COMEX CLOSING

 

 

 

 

 

 

 

 

 

Silver:$19.15 UP 83 CENTS  (COMEX TO COMEX CLOSING)

 

 

 

 

Closing access prices:

Gold : $1547.60

 

silver:  $19.27

Gold and silver had stellar performances today with gold advancing by $25.60 and silver by 83 cents.  I have been pointing out to you lately that the bankers are in serious trouble as they have a massive derivative shortage in both metals but a truly mammoth one in silver. Bankers get killed in derivatives with the speed to which our precious metal rises.  Silver, in late June was trading around $14.75 so a gain of over 4.40 in 2 months fries our bankers.  Deutsche bank with huge silver exposure will no doubt need the support of the Bundesbank to continue.

 

Many have asked how will gold perform in a negative yield environment especially if the USA undergoes the same route. The Alasdair Macleod paper answers that in detail and is your must read commentary for the day.  I will refer to it in future commentaries as all nations go zero bound in interest rates.

we are getting very close to a commercial failure!!

 

 

 

 

 

 

COMEX DATA

 

 

 

 

 

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

today RECEIVING 82/242

 

EXCHANGE: COMEX
CONTRACT: SEPTEMBER 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,519.100000000 USD
INTENT DATE: 08/30/2019 DELIVERY DATE: 09/04/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
118 H MACQUARIE FUT 54
152 C DORMAN TRADING 13
657 C MORGAN STANLEY 17
661 C JP MORGAN 26
661 H JP MORGAN 56
686 C INTL FCSTONE 5
690 C ABN AMRO 38 6
737 C ADVANTAGE 70 37
800 C MAREX SPEC 121 38
905 C ADM 3
____________________________________________________________________________________________

TOTAL: 242 242
MONTH TO DATE: 1,521

 

NUMBER OF NOTICES FILED TODAY FOR  SEPT CONTRACT: 242 NOTICE(S) FOR 24,200 OZ (0.7527 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  1521 NOTICES FOR 152100 OZ  (4.7309 TONNES)

 

 

 

SILVER

 

FOR SEPT

 

 

619 NOTICE(S) FILED TODAY FOR 3,095,000  OZ/

 

total number of notices filed so far this month: 5481 for   27,405,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE :  $ 10,402 UP 70 

 

 

 

Bitcoin: FINAL EVENING TRADE: $ 10659 UP 319

 

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IN SILVER THE COMEX OI FELL BY A GIGANTIC  SIZED 5390 CONTRACTS FROM 224,177 DOWN TO 218,787 DESPITE THE TINY 2 CENT LOSS IN SILVER PRICING AT THE COMEX.

TODAY WE ARE FURTHER FROM  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 HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:,

0 FOR SEPT,FOR DEC: 1270 AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  1270 CONTRACTS. WITH THE TRANSFER OF 1270 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 1270 EFP CONTRACTS TRANSLATES INTO 6.35 MILLION OZ  ACCOMPANYING:

1.THE TINY 2 CENT LOSS 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  STANDING FOR JULY

10.025   MILLION OZ INITIAL STANDING IN AUGUST.

35.405   MILLION OZ INITIALLY STANDING IN SEPT. (HUGE)

WE HAD MASSIVE COVERING OF BANKER SHORTS AT THE SILVER COMEX ON FRIDAY AS THE BANKERS HAVE NOW COME TO REALIZE THAT THEY ARE IN SERIOUS TROUBLE.  THE LIQUIDATION OF COMEX OI OF SPREADERS HAVE STOPPED AND WE WILL NOW COMMENCE WITH THE ACCUMULATION PHASE OF SPREADERS GOLD OPEN INTEREST.

 

 

 

 

 

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

1270 CONTRACTS (FOR 1 TRADING DAYS TOTAL 1270 CONTRACTS) OR 6.35 MILLION OZ: (AVERAGE PER DAY: 1270 CONTRACTS OR X MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF SEPT:  6.35 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 0.907% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)*  JUNE’S 345.43 MILLION OZ IS THE SECOND HIGHEST RECORDED ISSUANCE OF EFP’S AND IT FOLLOWED THE RECORD SET IN APRIL 2018 OF 385.75 MILLION OZ.

ACCUMULATION IN YEAR 2019 TO DATE SILVER EFP’S:          1556.06   MILLION OZ.

JANUARY 2019 EFP TOTALS:                                                      217.455. MILLION OZ

FEB 2019 TOTALS:                                                                       147.4     MILLION OZ/

MARCH 2019 TOTAL EFP ISSUANCE:                                          207.835 MILLION OZ

APRIL 2019 TOTAL EFP ISSUANCE:                                              182.87  MILLION OZ.

MAY 2019: TOTAL EFP ISSUANCE:                                                136.55 MILLION OZ

JUNE 2019 , TOTAL EFP ISSUANCE:                                               265.38 MILLION OZ

JULY 2019   TOTAL EFP ISSUANCE:                                                175.74 MILLION OZ

AUG. 2019  TOTAL EFP ISSUANCE;                                                 216.47 MILLION OZ

RESULT: WE HAD A HUGE SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 5390, DESPITE THE TINY 2 CENT LOSS IN SILVER PRICING AT THE COMEX /FRIDAY... THE CME NOTIFIED US THAT WE HAD A  GOOD SIZED EFP ISSUANCE OF 1270 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER (SEE COMEX DATA) .

 

TODAY WE LOST AN ATMOSPHERIC  SIZED: 4120 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: 

i.e 1270 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 5305  OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 2 CENT LOSS IN PRICE OF SILVER AND A CLOSING PRICE OF $18.22 WITH RESPECT TO FRIDAY’S TRADING. YET WE STILL HAVE A VERY 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. 1.094 BILLION OZ TO BE EXACT or 156% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH/ THEY FILED AT THE COMEX: 619 NOTICE(S) FOR 3,095,000 OZ OF SILVER

IN SILVER,PRIOR TO TODAY, WE  SET THE NEW COMEX RECORD OF OPEN INTEREST AT 244,196 CONTRACTS ON AUG 22.2018 AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $14.78.  

 

.

 

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 10.025 MILLION OZ/SEPT 35.404 MILLION OZ//
  2.  THE  RECORD WAS SET IN 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 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 FELL BY A STRONG SIZED 9474 CONTRACTS, TO 609,472 ACCOMPANYING THE  $7,00 PRICING LOSS WITH RESPECT TO COMEX GOLD PRICING// FRIDAY// /

 

THE SPREADING LIQUIDATION OPERATION IS NOW OVER FOR SILVER..AND WE WILL NOW MORPH INTO AN ACCUMULATION PHASE OF SPREADING CONTRACTS FOR GOLD.  THEY WILL ACCUMULATE CONSIDERABLE AMOUNT OF THE CONTRACTS AND THEN LIQUIDATE ONE WEEK PRIOR TO FIRST DAY NOTICE

FOR THOSE OF YOU WHO ARE NEWCOMERS HERE IS A BRIEF SYNOPSIS OF HOW THE CROOKS FLEECE UNSUSPECTING LONGS IN THE SPREADING ENDEAVOUR;

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

 

 

AS I HAVE MENTIONED IN PREVIOUS COMMENTARIES:

 

 

“AS YOU WILL SEE, THE CROOKS WILL NOW SWITCH TO GOLD 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 SEPT HEADING TOWARDS THE  ACTIVE DELIVERY MONTH OF OCTOBER FOR GOLD.

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

YOU WILL ALSO NOTICE THAT THE COMEX OPEN INTEREST  STARTS TO RISE IN THIS NON ACTIVE MONTH OF SEPT BUT SO IS THE OPEN INTEREST OF SPREADERS. THE OPEN INTEREST IN GOLD WILL CONTINUE TO RISE UNTIL ONE WEEK BEFORE FIRST DAY NOTICE OF AN UPCOMING ACTIVE DELIVERY MONTH (OCT), 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.” 

 

 

 

 

 

 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A GOOD SIZED 6946 CONTRACTS:

OCT 2019: 0 CONTRACTS, DEC>  6946 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 610,294,,.  ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A CONSIDERABLE LOSS IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 1706 CONTRACTS: 8652 CONTRACTS DECREASED AT THE COMEX  AND 6946 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI LOSS OF 1706 CONTRACTS OR 170,600 OZ OR 5.306 TONNES.  FRIDAY WE HAD A  LOSS OF $7.00 IN GOLD TRADING….AND WITH THAT LOSS IN  PRICE, WE  HAD A SMALL LOSS IN GOLD TONNAGE OF 5.306  TONNES!!!!!! THE BANKERS WERE SUPPLYING INFINITE SUPPLIES OF SHORT GOLD COMEX PAPER TRYING TO FLEECE GOLD LONGS ON OPTIONS EXPIRY WITH LIMITED SUCCESS…AND WITH THAT LOSS IN  PRICE, WE  HAD A SMALL LOSS IN GOLD TONNAGE OF 5.306  TONNES!!!!!!. IT ALSO LOOKS LIKE WE HAD SOME BANKER SHORT COVERING IN GOLD ACCOMPANYING THE HUGE SHORT COVERING IN SILVER.

 

 

 

 

 

 

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF SEPT : 6946 CONTRACTS OR 694,600 oz OR 21.60 TONNES (1 TRADING DAY AND THUS AVERAGING: 6946 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 1 TRADING DAY IN  TONNES: 21.60 TONNES

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

THUS EFP TRANSFERS REPRESENTS 21.60/3550 x 100% TONNES =0.606% OF GLOBAL ANNUAL PRODUCTION

 

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     4172.92  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

AUG. 2019 TOTAL ISSUANCE:                    639.62 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 STRONG SIZED DECREASE IN OI AT THE COMEX OF 9474 DESPITE THE RATHER TIMID  PRICING LOSS THAT GOLD UNDERTOOK FRIDAY($7.00)) //.WE ALSO HAD  A HUGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 6946 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 6946 EFP CONTRACTS ISSUED, WE HAD A GOOD SIZED LOSS OF 2528 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

6946 CONTRACTS MOVE TO LONDON AND 89474 CONTRACTS DECREASED AT THE COMEX. (IN TONNES, THE LOSS IN TOTAL OI EQUATES TO 7.863 TONNES). ..AND ALL OF THIS LACK OF DEMAND OCCURRED DESPITE THE SMALLISH LOSS IN PRICE OF $7.00 WITH RESPECT TO FRIDAY’S TRADING AT THE COMEX.

THE COMEX IS NOW UNDER FULL ASSAULT WITH RESPECT TO GOLD AND SILVER.

 

 

 

 

 

 

 

 

we had:  242 notice(s) filed upon for 24,200 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

WITH GOLD UP $25.60 TODAY//(COMEX-TO COMEX)

VERY STRANGE INDEED!!

A BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.05 PAPER TONNES FROM THE GLD..

 

 

INVENTORY RESTS AT 878.31 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 83 CENTS TODAY:

 

NO CHANGE IN SILVER INVENTORY AT THE SLV:

 

 

/INVENTORY RESTS AT 388.154 MILLION OZ.

 

 

 

 

 

 

 

 

 

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 FELL BY A GIGANTIC SIZED 5390 CONTRACTS from 227,327 DOWN TO 218,787 AND FURTHER FROM A  NEW COMEX RECORD.  THE LAST RECORDS WERE SET  IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD TO THAT 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  2 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.

 

 

 

 

EFP ISSUANCE: 

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

 FOR SEPT. 0; FOR DEC  1270 OI CONTRACTS  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1270 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE OI LOSS AT THE COMEX OF 5305 CONTRACTS TO THE 1270 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN AN ATMOSPHERIC AND CRIMINALLY SIZED LOSS OF 4120 OPEN INTEREST CONTRACTS.THUS IN OUNCES, THE LOSS ON THE TWO EXCHANGES: 20.600 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 AUGUST AT 10.025 MILLION OZ//SEPT 2019: 35.405 MILLION OZ/

 

 

 

RESULT: A GIGANTIC SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE TINY 2 CENT LOSS IN PRICING THAT SILVER UNDERTOOK IN PRICING// FRIDAY. WE ALSO HAD A GOOD SIZED 1270 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE VERY 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. IN SILVER WE ARE WITNESSING MASSIVE BANK SHORT COVERING AS THEY NOW REALIZE THAT THEY ARE IN DEEP TROUBLE.

 

 

(report Harvey)

.

 

2 ) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

I)TUESDAY MORNING/ MONDAY NIGHT: 

SHANGHAI CLOSED UP 6.05 POINTS OR 0.21%  //Hang Sang CLOSED DOWN 98.70 POINTS OR 0.39%   /The Nikkei closed UP 4.97 POINTS OR 0-.02%//Australia’s all ordinaires CLOSED DOWN .06%

/Chinese yuan (ONSHORE) closed DOWN  at 7.1771 /Oil UP TO 54.06 dollars per barrel for WTI and 57.68 for Brent. Stocks in Europe OPENED RED//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.1771 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1815 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY PAST 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /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%

 

 

3A//NORTH KOREA/ SOUTH KOREA

 

3b) REPORT ON JAPAN

3C  CHINA

i)Gatestone’s Lawrence Franklin discusses the options facing Mainland China in their dealings with the Hong Kong protests. It is a very important commentary and a must read.  The real reason for the protests:  What will happen in 2047 when Hong Kong must give up their 2 systems..two governments formula set up in the handover of the city in 1997.

ii)Hong Kong

Saturday morning:  Live rounds fired as police try to contain the chaos
(zerohedge)

iii)Sunday/Hong Kong

Protests continue on Sunday with the protesters occupying the Hong Kong Airport.  There was a surge of violeance reported.

(zerohedge)

iv)CHINA/USA/SUNDAY

the gloves just came off: instead of the supposed “optimism” that the escalating trade war between USA and China may be mellowing, that was quickly dispelled when on 12:01 Sept 1 the tariffs came into effect and one minute later China retaliated
(zerohedge)

v)HONG KONG/CHINA/MONDAY

Hong Kong issued its ultimatum to not only protesters but also the West (not to infringe on Chinese sovereignty)

(zerohedge)

vi)MONDAY/CHINA/USA

Stocks plunge on Monday due to failure to trade talks. The yuan tumbles to 7.18
(zerohedge)

vii)Tuesday

Chance for a trade deal  diminishes by the day.  Now Huawei accuses the Trump  administration of harassing its workers as well as attacking its network
(zerohedge)

4/EUROPEAN AFFAIRS

i)Mish Shedlock is terrific on his understanding of Brexit.  He is now under the opinion that there is no way that the remainers can stop Brexit.

(Mish Shedlock/Mishtalk)

ii)According to Mish Shedlock this has no chance of stopping a hard Brexit

(zerohedge)

iii)In a stunning turn of events a Conservative crosses the floor and joins the Liberal Democrats. He was going to lose in the next election anyway as his riding is furious at him. However this lessens the chance of the hard Brexit

(zerohedge)

iiib)OH oh!! this does not look good as stupid rebel MP’s successfully seize control of the uK parliament.  However on a general election they will be thrown out.chances for a Hard Brexit has been diminished and the UK is still handcuffed to the crooked EU

(zerohedge)

iv)ECB

Seem that we have a Mutiny of the Bounty with respect to the ECB  as many hawks do not want any more bond purchases which of course would bankrupt Italy in a heartbeat.  The hawks are still in favour of lowering the negative interest rates even more and consensus is that on the Sept 12 meeting they will lower the rates by 16 basis points.

(zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Syria/USA

This is an escalation of the USA into Syria.  There are reports of major airstrikes on Idlib where a huge number of foreign Al Qaeda jihadists were having a meeting. This is the first major escalation by the USA in quite some time in Syria.

(zerohedge)

ii)Israel/Iraq

Netanyahu confirms the Israeli attacks on Iraq two weeks ago
(zerohedge)
iii)Sunday/Lebanon/Hezbollah
Hezbollah finally responds to the Israeli shelling two weeks ago. Israel responds in force with missile attacks into Lebanon.No confirmation from the Israeli side on any deaths.(zerohedge)

iv)Iran/USA

It sure looks our famous Iranian tanker is still bound for Syria.  The USA is doing everything possible to disrupt the oil transfer.

(zerohedge)

iv  b Iran/Tuesday

It appears that the Iranian tanker went dark off the Syrian coast.  In all probability it will unload its oil onto a Syrian ship who will then transport the oil to Tartus.

(zerohedge)

v)IRAN/MONDAY

Iran offers the EU two options to keep the phony nuclear deal in place. They both do not have a chance:

(Irina Slav/OilPrice.com)

vi)France presses Washington o a proposal for a 15 billion dollar line of credit,  Iran is bankrupt and badly needs the money as well as sell its oil.  The USA if it agrees must have guarantees that (ran stops financing its satellites like Hezbollah and Hamas

(zerohedge)

vi b)Rouhani throws cold water on the French proposal saying that there is not going to be a bilateral talks with the uSA

He threatens to further breath nuclear limits  which will annoy France.  Then after a failed launch of a rocket on Saturday, Trump initiats further sanctions against Iran’s space agency

(zerohedge)

6.Global Issues

 

7. OIL ISSUES

As promised to you on several occasions, the shale industry is in big trouble not so much because of low oil prices but because of huge debt.  Companies are having trouble rolling over their debt and we have already major bankruptcies filed last month

 

(zerohedge)

8 EMERGING MARKET ISSUES

i)Saturday/Argentina

Argentina has been losing foreign exchange dollars by the bucketful.  The government is now imposing currency controls trying to stem the losses of dollars which are badly need in the country. No matter which way you look at it, the Peso is doomed

(courtesy zerohedge)

ii)Monday Argentina

Strange  The Argentina Peso temporarily rises amid zero liquidity.  We have real problems in Argentina as they are finding it difficult to find dollars

(zerohedge)

9. PHYSICAL MARKETS

i)I pointed this commentary to you on Friday and I have gone over it myself several times and I finally understand it fully.

The commentary is basically what happens to gold when you go to USA zero bound interest rates.

Each day, I report to you the following:

Libor rates

GOFO rates (time preference not to have gold in your possession)

and Gold Lease rates which is the Libor rate (generally the rate to which banks give you money on loan/money cost) – GOFO rate(gold cost time preference)

For the past few months, one can see that the lease rate is zero (or approaching zero) with the  12 month GOFO rates (today 1.96%) and the 12 month Libor rate (1.90%) being almost identical and a tiny positive lease rate of .06%. The 6 month rate which is the only that is most widely used in determining lease rates is negative .04%

here is the numbers from Friday

LIBOR SCHEDULE AND GOFO RATES:

 

 

YOUR DATA…..

6 Month MM GOFO 2.07/ and libor 6 month duration 2.03

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

G0LD LENDING RATE: – .04

 

XXXXXXXX

12 Month MM GOFO
+ 1.90%

LIBOR FOR 12 MONTH DURATION: 1.96

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.06

For years central banks were leasing out gold as it had a positive cost and the USA dollar reward was quite high. That is the time preference for gold averaged around 2% and the 6 month yield was around 6% and thus a tidy profit. Thus central banks dishoarded a huge 10,000 to 15,000 tonnes of gold and thus the huge mushrooming of derivatives on the previous metals was born.  When gold costs are positive we are in contango.

However now we see Europe, Switzerland, Sweden and Japan has negative money rates and it is inevitable that the USA will go down this path as economies falter badly. As Alasdair Macleod states that once USA interest rates go negative (also Time Preference negative) then we will witness the reverse of the huge mushrooming of derivatives as banks try and cover their huge shortfall mess.

At  this point in time,  the dollar become time preference negative or goes into backwardation and this will lead to all commodities including gold and silver going into backwardation as well as a huge rise in the spot rise for our precious metals.

This is an important read..

ii)A good commentary today from Manly:  he notes that the considerable decline in Chinese imports may be to mask the rise in official reserves as our sovereign is the one who is buying the precious metals.

(Ronan Manly/Bullionstar)

iii)We have been highlighting this to you on a daily basis through the biggest of all EFT’s:  the GLD/SLV(Pakiam/Bloomberg/GATA)

iv)At least somebody is paying attention to these chat room discussion where 5 banks collude.  We have the evidence that they have also fixed the price of gold/silver.  Judge Rakoff is one smart individual and he states that these discussions are a “rare smoking gun” of price fixing.

(zerohedge)

v)Platinum is coming to the party although late

(courtesy Lawrie Williams)

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

MARKET TRADING//USA

a)Market trading/LAST NIGHT/USA

 

b)MARKET TRADING/USA/AFTERNOON

ii)Market data/USA

This is huge!  After China and Europe reported huge contractions in their mfg PMI, the USA reported its weakest Mfg PMI in 10 years..new exports orders collapse

(zerohedge)

iii) Important USA Economic Stories

a)Dorian will cause havoc to our insurers as the storm may face losses to top 40 billion dollars

(zerohedge)

b)Floridians brace for Dorian as it weakens to a category 3.  It was devastating to the Bahamas

(zerohedge)

iv) Swamp commentaries)

a)Seems that Jean Luc Brunel has now disappeared after being accused of scouting girls for Epstein.

(zerohedge)

b)For those of you who think that Comey is out of the woods, think again.  A great commentary from Larry Johnson

(courtesy Larry Johnson Sic Sempter Tyrannis blog)

c)McCarthy is one smart cookie. He gives a thorough analysis of the Trump and Clinton mess outlining how Clinton and her entourage gets a free pass and some of Trump’s people get charged.  At the end he gives his reasoning for going after McCabe

(Andrew McCarthy)

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 FELL BY A STRONG SIZED 9474 CONTRACTS TO A LEVEL OF 610,294 ACCOMPANYING THE LOSS OF $7.00 IN GOLD PRICING WITH RESPECT TO FRIDAY’S // COMEX TRADING)

WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF AUGUST..  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 6946 EFP CONTRACTS WERE ISSUED: DEC: 6946   AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  6946 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 LOST THE FOLLOWING TODAY ON OUR TWO EXCHANGES: 2528 TOTAL CONTRACTS IN THAT 6946 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A STRONG SIZED 9474 COMEX CONTRACTS

THE BANKERS SUPPLIED THE NECESSARY AND INFINITE AMOUNT OF SHORT PAPER IN GOLD INITIATING A RAID TO CAUSE SOME GOLD CONTRACTS TO FALL OUT OF THE MONEY. AS FRIDAY WAS THE FINAL DAY FOR OPTIONS EXPIRY FOR THE OTC/LBMA LONDON CONTRACTS, THEY WERE ONLY MILDLY SUCCESSFUL. HOWEVER WE DID HAVE SOME BANKER SHORT COVERING IN GOLD. IN SILVER THEY MASSIVELY COVERED AS THE DEMAND FOR PHYSICAL SILVER WAS JUST TOO GREAT FOR THEM TO HANDLE THEIR BURGEONING LEVEL OF SILVER SHORTS.

 

 

 

NET LOSS ON THE TWO EXCHANGES IN GOLD:  2528 CONTRACTS OR 252,800OZ OR 7.863 TONNES.

 

We are now in the NON  active contract month of SEPTEMBER and here the open interest stands at 286 CONTRACTS as we LOST JUST 1098 contracts. We had a strong 1279 contracts filed on Friday so we surprisingly gained another whopping 181 contracts or an additional 18100 oz will stand at the comex as the guys refused to morph into London with their phony EFP contracts. By refusing to morph they also refused to accept a fiat bonus. Ladies and Gentlemen:  the comex is under attack for physical metal.

The next active delivery month is October and here the OI FELL by 70 contracts DOWN to 44,985. After October, we have the active delivery month of December and here we have a LOSS of 8550 contracts and the total OI stands at  452,889

 

 

TODAY’S NOTICES FILED:

WE HAD 242 NOTICES FILED TODAY AT THE COMEX FOR  24,200 OZ. (0.7527 TONNES)

 

 

 

 

 

 

 

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And now for the wild silver comex results.

Total COMEX silver OI FELL BY A GIGANTIC SIZED 5390CONTRACTS FROM 224,177 DOWN TO 218,787 (AND FURTHER FROM THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018.  THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S HUGE  OI COMEX LOSS OCCURRED DESPITE A 2 CENT LOSS IN PRICING.//FRIDAY. WE HAD A MASSIVE BANKER SHORT COVERING OPERATION COMMENCE ON FRIDAY WITH THEIR FAILURE ON OTC /LBMA LONDON OPTION EXPIRY DAY.

 

WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF SEPTEMBER.  HERE WE HAVE A STRONG 2219 OPEN INTEREST STAND FOR DELIVERY WITH A LOSS OF 4505 CONTRACTS. WE HAD A HUGE 4862NOTICES FILED ON FRIDAY SO AGAIN WE HAD A MASSIVE GAIN OF 357 CONTRACTS OR AN ADDITIONAL 1,785,000 OZ WILL STANDAT THE COMEX.  LIKE GOLD, THESE GUYS REFUSED TO MORPH INTO LONDON WITH THOSE  PHONY EFP CONTRACTS.  BY DOING SO THEY REFUSED TO ACCEPT A FIAT BONUS AND THEY NOW STAND WITH THEIR BIG BROTHER GOLD ATTACKING THE COMEX FOR WHATEVER PRECIOUS METAL THEY CAN FIND OVER ON THIS SIDE OF THE POND.

AFTER SEPT COMES THE NON ACTIVE MONTH OF OCTOBER AND HERE THEY RECEIVED ANOTHER 98 CONTRACTS TO STAND AT 1277.  NOVEMBER RECEIVED ITS INITIAL 36 CONTRACTS TO STAND AT 36. NEXT BIG ACTIVE DELIVERY MONTH IS DECEMBER AND HERE THE OI FALLS BY 1442 CONTRACTS DOWN TO 172,925

 

 

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 619 notice(s) filed for 3,095,000 OZ for the SEPT, 2019 COMEX contract for silver

 

 

 

Trading Volumes on the COMEX TODAY: 536,112  CONTRACTS 

 

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  357,337  contracts

 

 

 

 

 

INITIAL standings for  SEPT/GOLD

SEPT 3/2019

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
nil oz
Deposits to the Dealer Inventory in oz 42,947.590 oz

 

Bank of Nova Scotia

 

 

Deposits to the Customer Inventory, in oz  

nil

 

No of oz served (contracts) today
242 notice(s)
 24,200 OZ
(0.7527 TONNES)
No of oz to be served (notices)
44 contracts
(4400 oz)
.1368 TONNES
Total monthly oz gold served (contracts) so far this month
1521 notices
152,100 OZ
4.7309 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 1 deposit into the customer account

i) Into JPMorgan:  nil oz

 

ii) Into Scotia: 42,947.590  oz

 

 

 

total gold deposits: 42,947.590  oz

 

 

we had 0 gold withdrawal from the customer account:

 

 

 

total gold withdrawals; nil  oz

 

 

i) we had 0 adjustment today
FOR THE SEPT 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 242 contract(s) of which 56 notices were stopped (received) by j.P. Morgan dealer and 26 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 SEPT /2019. contract month, we take the total number of notices filed so far for the month (1521) x 100 oz , to which we add the difference between the open interest for the front month of  SEPT. (286 contract) minus the number of notices served upon today (242 x 100 oz per contract) equals 156,500 OZ OR 4.8678 TONNES) the number of ounces standing in this active month of SEPT

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

No of notices served (1521 x 100 oz)  + (286)OI for the front month minus the number of notices served upon today (242 x 100 oz )which equals 156,500 oz standing OR 4.8678 TONNES in this  active delivery month of SEPT.

We surprisingly again gained a monstrous 181 contracts or an additional 18,100 oz will seek metal on this side of the pond instead of morphing over to London.  The gold comex is now under siege for any remaining physical metal.

 

SURPRISINGLY WE HAVE BEEN WITNESSING NO GOLD ENTERING THE COMEX VAULTS FOR THE PAST YEAR!!  WE HAVE ONLY 22.91 TONNES OF REGISTERED (  GOLD OFFERED FOR SALE) VS 27.153  TONNES OF GOLD STANDING //AUGUST AND 4.8678 TONNES IN SEPT.// 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.

ACCORDING TO COMEX RULES:

FOR A SETTLEMENT YOU NEED A TRANSFER FROM THE DEALER (REGISTERED) ACCOUNT OVER TO AN ELIGIBLE ACCOUNT. FOR THE  ENTIRE MONTH OF AUGUST WE HAD O TRANSACTIONS ON THIS FRONT AND THUS I WILL ADD THE 27.153 TONNES TO THE 4.8678 TONNES (EQUALS 32.0208 TONNES) AGAINST THE 22.91 TONNES OF REGISTERED GOLD.

 

total registered or dealer gold:  736,702.381 oz or  22.91 tonnes 
total registered and eligible (customer) gold;   8,100,057.386 oz 251.94 tonnes

 

IN THE LAST 35 MONTHS 107 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 SEPT.

INITIAL  standings/SILVER

IN TOTAL CONTRAST TO GOLD, HUGE ACTIVITY IN SILVER TODAY.
SEPT 3 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 682,158.932 oz
CNT
Delaware
Scotia

 

 

Deposits to the Dealer Inventory
nil oz

 

Deposits to the Customer Inventory
nil oz
No of oz served today (contracts)
619
CONTRACT(S)
(3,095,000 OZ)
No of oz to be served (notices)
1600 contracts
 8,000,000 oz)
Total monthly oz silver served (contracts)  5481 contracts

27,405,000 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  0 deposits into the customer account

into JPMorgan:  nil  oz

ii)into everybody else: 0

 

 

 

*** 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:  nil  oz

 

we had 3 withdrawals out of the customer account:

 

 

i) Out of CNT:  24,693.892 oz

ii) Out of Scotia: 656,417.040 oz

iii) Delaware;  1048.000 oz??

 

 

 

 

 

 

total 682,158.932  oz

 

we had 1 adjustment :

i) Out of Delaware: 100,121.011 oz was adjusted out of the customer account of CNT and this landed into the dealer account of Delaware

 

total dealer silver:  81.345 million

total dealer + customer silver:  311.217 million oz

The total number of notices filed today for the SEPTEMBER 2019. contract month is represented by 619 contract(s) FOR 3,095,000 oz

To calculate the number of silver ounces that will stand for delivery in SEPTEMBER, we take the total number of notices filed for the month so far at 5481 x 5,000 oz = 27,405,000 oz to which we add the difference between the open interest for the front month of SEPT. (2219) and the number of notices served upon today 619 x (5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the SEPT/2019 contract month: 5481 (notices served so far) x 5000 oz + OI for front month of SEPT (2219)- number of notices served upon today (619)x 5000 oz equals 35,405,000 oz of silver standing for the SEPT contract month. 

LADIES AND GENTLEMEN:  THE COMEX IS UNDER ASSAULT FOR BOTH GOLD AND SILVER. 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 619 notice(s) filed for 3,095,000 OZ for the SEPT, 2019 COMEX contract for silver

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

 

TODAY’S ESTIMATED SILVER VOLUME:  193,659 CONTRACTS

 

CONFIRMED VOLUME FOR YESTERDAY: 134,145 CONTRACTS.

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 134,145 CONTRACTS EQUATES to 673 million  OZ 96.07% 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 -1.57% ((SEPT 3/2019)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -2.62% to NAV (AUGUST 30/2019 )
Note: Sprott silver trust back into NEGATIVE territory at +%-/Sprott physical gold trust is back into NEGATIVE/ -1.57%

(courtesy Sprott/GATA)

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

NAV 15.83 TRADING 15.39/DISCOUNT 2.77

 

 

 

END

And now the Gold inventory at the GLD/

SEPT 3/WITH GOLD UP $25.60 TODAY: STRANGE: A WITHDRAWAL OF 2.05 PAPER TONNES FROM THE GLD// /INVENTORY RESTS AT 878.31 TONNES

AUGUST 30 WITH GOLD DOWN $7.00: A BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.05 TONNES/INVENTORY RESTS AT 880.36 TONNES

AUGUST 29/WITH GOLD DOWN $11.65: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 9.09 PAPER TONNES OF GOLD INTO THE GLD INVENTORY/INVENTORY RESTS AT 882.41 TONNES

AUGUST 28/WITH GOLD DOWN $2.15 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 873.32 TONNES

AUGUST 27//WITH GOLD UP $14.50 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER DEPOSIT OF 13.49 TONNES INTO THE GLD///INVENTORY RESTS AT 873.32 TONNES

AUGUST 26/WITH GOLD UP 0.25 TODAY: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 4.99 TONNES/INVENTORY RESTS AT 859.83 TONNES

AUGUST 23/WITH GOLD UP $28.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 854.84 TONNES

AUGUST 22.WITH GOLD DOWN $6.80 TODAY: TWO HUGE CHANGES IN GOLD INVENTORY AT THE GLD: I)A PAPER DEPOSIT OF 6.74 TONNES INTO THE GLD (LATE YESTERDAY EVENING) AND 2) A PAPER DEPOSIT OF 2.93 TONNES LATE THIS AFTERNOON./INVENTORY RESTS AT 854.84 TONNES

AUGUST 21/WITH GOLD DOWN $.30 TODAY:A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 1.76 TONNES INTO THE GLD INVENTORY/GOLD INVENTORY RESTS AT 845.17 TONNES

AUGUST 20//WITH GOLD UP $2.90 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/GOLD INVENTORY RESTS AT 843.41 TONNES

AUGUST 19/WITH GOLD DOWN $11.20//A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF .88 TONNES//INVENTORY RESTS AT 843.41 TONNES

AUGUST 16/WITH GOLD DOWN $7.35: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 844.29 TONNES

AUGUST 15/WITH GOLD UP $3.55 TODAY//WE HAVE A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: WE GOT BACK 7.63 TONNES OUT OF 11.11 TONNES LOST ON WEDNESDAY( A DEPOSIT OF 7.63 TONNES)/INVENTORY RESTS AT 844.29 TONNES

AUGUST 14/WITH GOLD UP $7.60 TODAY (AND DOWN $2.90 YESTERDAY) WE HAD A MONSTROUS WITHDRAWAL OF 11.11 TONNES OF GOLD FROM THE GLD/AND THIS WAS USED IN AN ABORTED RAID YESTERDAY:  INVENTORY RESTS AT 836.66 TONNES

AUGUST 13.2019: WITH GOLD DOWN $2.60 TO DAY: A HUGE 7.92 PAPER GOLD TONNES WERE ADDED TO THE GLD/INVENTORY RESTS AT 747.77 TONNES

AUGUST 12.2019: WITH GOLD UP $7.30: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 839.85 TONNES

 

AUGUST 9/WITH GOLD DOWN $2.00//NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY REMAINS AT 839.85 TONNES OZ/

AUGUST 8: WITH GOLD DOWN $4.20: TWO TRANSACTIONS:  A)A MONSTROUS PAPER DEPOSIT OF 8.50 TONNES WAS ADDED TO THE GLD/INVENTORY RESTS AT 845.42 TONNES  b)  A HUGE WITHDRAWAL OF 5.59 TONNES FROM THE GLD//INVENTORY RESTS AT 839.85 TONNES…ABSOLUTE FRAUD!

August 7/ WITH GOLD UP $31.00//A GOOD PAPER DEPOSIT OF 1.86 TONNES OF GOLD INTO THE GLD INVENTORY//INVENTORY RESTS AT 836.92 TONNES

AUGUST 6.2019: WITH GOLD UP $7.85 A STRONG DEPOSIT OF 4.50 TONNES OF PAPER GOLD INTO THE GLD LATE LAST NIGHT/INVENTORY RESTS AT 835.16 TONNES

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

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SEPT 30/2019/ Inventory rests tonight at 878.31 tonnes

 

 

*IN LAST 655 TRADING DAYS: 57.07 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 555- TRADING DAYS: A NET 109.58 TONNES HAVE NOW BEEN ADDED INTO  THE GLD INVENTORY.

 

 

 

 

 

 

 

end

 

Now the SLV Inventory/

SEPT 3/WITH SILVER UP 83 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT  388.154 MILLION OZ/

AUGUST 30/WITH SILVER DOWN 2 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 388.154 MILLION OZ

AUGUST 29/WITH SILVER DOWN 13 CENTS TODAY: A HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 2.714 MILLION OZ INTO THE SLV INVENTORY//INVENTORY RESTS AT 388.154 MILLION OZ/

AUGUST 28/WITH SILVER UP 19 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 385.440 MILLION OZ/

AUGUST 27/WITH SILVER UP 52 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 385.440 MILLION OZ//

AUGUST 26/WITH SILVER UP 23 CENTS TODAY: A BIG  CHANGE IN SILVER INVENTORY AT THE SLV; A DEPOSIT OF 1.59 MILLION OZ INTO SLV INVENTORY///INVENTORY RESTS AT 385.440 MILLION OZ//

AUGUST 23/WITH SILVER UP 37 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 383.850 MILLION OZ//

AUGUST 22/WITH SILVER DOWN 11 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 3.696 MILLION OZ INTO THE SLV///INVENTORY RESTS AT 383.850 MILLION OZ//

AUGUST 21/WITH SILVER UP 1 CENT TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 380.154 MILLION OZ/

AUGUST 20.WITH SILVER UP 20 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 380.154 MILLION OZ//

AUGUST 19/WITH SILVER DOWN 21 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 380.154 MILLION OZ/

AUGUST 16/: WITH SILVER DOWN 9 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 380.154  MILLION OZ//

AUGUST 15/2019 WITH SILVER DOWN 2 CENTS: ANOTHER BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WHOPPING 3.977 MILLION OZ PAPER DEPOSIT/INVENTORY RESTS AT 380.154 MILLION OZ/

AUGUST 14/2019 WITH SILVER UP 27 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 4.538 MILLION OZ INTO THE SLV///INVENTORY RESTS AT 376.177 MILLION OZ//

AUGUST 13/2019: WITH SILVER DOWN 9 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 6.082 MILLION OZ///INVENTORY NOW RESTS AT 371.637 MILLION OZ

AUGUST 12/2019: WITH SILVER  UP 11 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 365.557 MILLION OZ.

AUGUST 9/2019//WITH SILVER UP 2 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV; A DEPOSIT OF 2.245 MILLION OZ INTO THE SLV INVENTORY/INVENTORY ADVANCES 365.557 MILLION OZ

AUGUST 8/WITH SILVER DOWN 23 CENTS: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT: 1.409 MILLION OZ INTO INVENTORY///INVENTORY RESTS AT 363.311 MILLION OZ//

AUGUST 7/WITH SILVER UP 74 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 361.907 MILLION OZ/

AUGUST 6/ WITH SILVER UP 5 CENTS: TWO TRANSACTIONS: A HUGE PAPER DEPOSIT OF 2.34 MILLION OZ WAS DEPOSITED INTO THE SLV LATE LAST NIGHT: THEN A HUGE 2.994 MILLION OZ OF A PAPER DEPOSIT THIS AFTERNOON: INVENTORY RESTS AT 361.907 MILLION OZ

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//

 

SEPT 3/2019:

 

 

Inventory 388.154 MILLION OZ

 

 

 

LIBOR SCHEDULE AND GOFO RATES/GOLD LENDING RATES:

 

 

YOUR DATA…..

6 Month MM GOFO 2.07/ and libor 6 month duration 2.02

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

G0LD LENDING RATE: – .05

 

XXXXXXXX

12 Month MM GOFO
+ 1.94%

LIBOR FOR 12 MONTH DURATION: 1.95

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.01

end

 

 

end

 

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

Gold At New Record Highs In Pounds and Euros – £1,280/oz and €1,400/oz – On Brexit and Economic Concerns

* Gold in sterling and euros have reached new record nominal highs of £1,279.46/oz and €1,401.60/oz respectively this morning (see charts below)

* Gold priced in sterling and euros soared to record highs due to political turmoil in the UK, increasing concerns about a disorderly UK exit from the EU and the slowing UK and European economies 

* Sterling has lost a third of its value in the last 12 months with gold priced in sterling having gained 35% in 12 months

* Silver continues to eke out gains in all currencies as it plays catch up to gold

 

Price of Gold

 

 

News and Commentary

Gold rises as U.S., China begin new round of tariffs

Pound tumbles as British factory output hits seven-year low ahead of Brexit showdown

British Prime Minister Boris Johnson says Brexit deal chances are rising

India’s seizures of smuggled gold jumps in June quarter

Investors Rush Into Gold ETF’s, 101.9 tons in August (most monthly inflows since 2013)

Cazenove Capital Favors Gold Over Bonds as Uncertainty Hedge

Gold Rally May Cool Briefly – Greg Bender

What caused Britain’s blackouts?

 

Gold Prices (LBMA – USD, GBP & EUR – AM/ PM Fix)

02-Sep-19  1523.35 1525.95, 1260.42 1265.01 & 1388.69 1391.51
30-Aug-19 1526.55 1528.40, 1253.14 1251.15 & 1382.75 1383.51
29-Aug-19 1536.65 1540.20, 1260.51 1262.96 & 1387.29 1392.03
28-Aug-19 1541.75 1537.15, 1263.31 1258.77 & 1389.89 1387.43
27-Aug-19 1531.85 1532.95, 1250.91 1247.51 & 1378.97 1380.88
26-Aug-19 UK Bank Holiday
23-Aug-19 1495.50 1503.80, 1224.37 1228.91 & 1351.48 1357.63
22-Aug-19 1498.70 1502.05, 1234.63 1225.97 & 1351.98 1354.10

 

Click here to listen to the latest GoldCore Podcast

Receive our free Daily or Weekly Updates by signing up here and click here to subscribe to GoldCore’s You Tube Channel

Mark O’Byrne
Executive Director

 

ii) Important gold commentaries courtesy of GATA/Chris Powell

I pointed this commentary to you on Friday and I have gone over it myself several times and I finally understand it fully.

The commentary is basically what happens to gold when you go to USA zero bound interest rates.

Each day, I report to you the following:

Libor rates

GOFO rates (time preference not to have gold in your possession)

and Gold Lease rates which is the Libor rate (generally the rate to which banks give you money on loan/money cost) – GOFO rate(gold cost time preference)

For the past few months, one can see that the lease rate is zero (or approaching zero) with the  12 month GOFO rates (today 1.96%) and the 12 month Libor rate (1.90%) being almost identical and a tiny positive lease rate of .06%. The 6 month rate which is the only that is most widely used in determining lease rates is negative .04%

here is the numbers from Friday

LIBOR SCHEDULE AND GOFO RATES:

 

 

YOUR DATA…..

6 Month MM GOFO 2.07/ and libor 6 month duration 2.03

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

G0LD LENDING RATE: – .04

 

XXXXXXXX

12 Month MM GOFO
+ 1.90%

LIBOR FOR 12 MONTH DURATION: 1.96

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.06

For years central banks were leasing out gold as it had a positive cost and the USA dollar reward was quite high. That is the time preference for gold averaged around 2% and the 6 month yield was around 6% and thus a tidy profit. Thus central banks dishoarded a huge 10,000 to 15,000 tonnes of gold and thus the huge mushrooming of derivatives on the previous metals was born.  When gold costs are positive we are in contango.

However now we see Europe, Switzerland, Sweden and Japan has negative money rates and it is inevitable that the USA will go down this path as economies falter badly. As Alasdair Macleod states that once USA interest rates go negative (also Time Preference negative) then we will witness the reverse of the huge mushrooming of derivatives as banks try and cover their huge shortfall mess.

At  this point in time,  the dollar become time preference negative or goes into backwardation and this will lead to all commodities including gold and silver going into backwardation as well as a huge rise in the spot rise for our precious metals.

This is an important read..

take your time

h

 

Check-Mate For Central Banks: Negative Rates & Gold

Courtesy of ZeroHedge/GATA View original post here.

Authored by Alasdair Macleod via GoldMoney.com,

The reason for persistent strength in the price of gold can be found in the changing relationship between time preference for monetary gold, and a new round of interest rate suppression for the dollar. Evidence mounts that the forthcoming recession is likely to be significant, even turning into a deep slump. Bullion bank traders are waking up to the possibility that dollar interest rates are going to zero and that pressure is likely to be put on the Fed to introduce negative rates. The laws of time preference tell us bullion banks must urgently cover their short bullion positions in anticipation of a dollar rate-induced permanent backwardation for gold, silver and across all commodities.

This article dissects the moving parts in this fascinating story.

Introduction

For some time now, I have maintained the wheels are likely to fall off the global economic wagon by the year-end. Furthermore, for many of my interlocutors, the recent rise in the gold price is just evidence of an impending cyclical crisis, anticipating and discounting the certain inflationary response by central banks. But in this, we are describing only surface evidence, not the underlying market reality.

In the combination of trade protectionism and an emerging credit crisis we face a problem upon which almost no formal research has been done, so it is not something that even far-thinking analysts have considered. To my knowledge, no mainstream economist has pointed out the lethal mix these two dynamics together present. Very few even recognise the existence of a credit cycle, traditionally called a trade or business cycle. Not even the great von Mises called it a cycle of credit, having identified and described it with great accuracy in his The Theory of Money and Credit, first published in 1912. But a spade must be called a spade: it is in its fundament a credit cycle.

There are many Austrian economists who fully understand the credit cycle. But to it we must add the destructive synergy of American trade policy aimed at China. Much economic research has been conducted on the causes of a credit cycle, trade cycle, business cycle, whatever it may be called. Much research has also been conducted on the economic consequences of trade tariffs. But nowhere is there to be found any research or commentary on the destructive power of combining the two.

Yet, these were precisely the conditions in October 1929, when Wall Street awoke to the certainty that Congress would vote in favour of the Smoot-Hawley Tariff Act at the end of that month. The shock of a 35% top to bottom fall in the Dow in October 1929 was only a prelude to an extended collapse following President Hoover signing it into law the following year. The economic research that followed the subsequent depression was conducted almost entirely by inflationists promoting reflation, so the destructive synergy between a credit crisis and trade protectionism has been ignored.

We cannot know the future with certainty, but we can point to the empirical evidence following Smoot-Hawley and draw an alarming parallel with today’s events. Thus alerted, we can then develop a convincing theoretical case for its repeat. Every week, reports of the global economy stalling now hit the headlines, drawing the parallel even closer. Yet, with equity markets close to all-time highs, little more than a mild recession, easily batted away with a little more monetary inflation, is the general expectation.

But our knowledge tells us there is almost certainly a large unanticipated shock ahead of us, and we should proceed in any analysis with that expectation. This article postulates how early evidence from the rising price of gold suggests the shock is closer than even perennially bearish analysts expect. We shall now take the inflationary consequences of an unexpected slump as a given in order to predict the changes in the relationship between physical gold and fiat dollars; a relationship that has for the last four decades led to a massive expansion of gold derivatives. To understand that relationship, and why it now appears to be reversing requires a working knowledge of time preference, the basis of interest; and more specifically the changing relationship of gold’s time preference to that of dollars.

Interest and time preference

One’s own bookcase provides the perfect illustration of time preference, which is the greater value of possession over non possession. There will be books bought on a whim which just clutter a bookshelf and have no value. Next time there’s a clear-out, they are destined for the charity shop: there’s no difference in time value, being worthless to the owner today and in the future.

Then there are the first editions, which have a commercial value. Books in this category will have a high current value to you compared with their non-possession. But perhaps the books with the highest personal value are the ones that have little value to anyone else: that battered copy of Wren’s Beau Geste, or the translation of Hoffmann’s Struwwelpeter read to you when you were a child. You may have even visited the museum in Frankfurt dedicated to Hoffmann and his famous book of moral tales for children. The value of these books in possession is far greater than their absence, even though you rarely open their pages.

This is the basis of time preference: the greater value placed on possession than non-possession. The books with sentimental value will have very little value to anyone else, other booklovers having their own favourites. Everyone’s time preferences are different. In economic terms, we express these varying values in terms of the difference between a current value in possession and the value of non-possession, but the certainty of repossession at a future time. The discounted value of the future possession is normally expressed as an interest rate on the monetary value today.

Assuming free market prices, in theory nearly everything of value has a time preference, an interest rate. That is, anything people value more in their immediate possession than the promise of ownership at some stage in the future. A future value, with very few exceptions, is always less than that of current ownership, and it is the difference between the two that is given to a current owner in one form or another to part with possession for a defined period of time.

The only examples that go against time preference are special cases. For example, an individual might forgo a decent salary today, in order to study so that he or she can earn more after passing a professional exam. In this case, the value of a current earnings stream is rejected in favour of potentially better prospects later. Or the philanthropist, who lends artworks for free to a public gallery so that a wider audience can appreciate them (but perhaps he does have a reward – to be thought of as a generous philanthropist and pillar of society).

The proxy for valuing time preference on goods is money, and the way it is normally expressed is as a money-rate of interest, often termed the originary rate. The originary rate of interest can be specific, assessed and applied in a single transaction such as obtaining the temporary use of a machine for a defined time. It can be a consolidated rate through the application of savings, reflecting the time preferences of the many goods and services whose possession is temporarily deferred by the saver.

Time preference is just the core consideration behind an interest rate. There will be other interest elements in addition, such as the trustworthiness and financial record of the borrower. But for the individual who has sacrificed the immediate satisfaction of spending the money put aside as savings, the time preference element will reflect the discounted future values of the goods and services that otherwise would have been purchased.

As well as time preferences reflecting baskets of specific goods and services, individuals will personally have different time preferences as well, as illustrated with the example of a personal library. But as is the case with any value, it is the marginal rate which is usually accepted as the market rate of interest, and therefore indicates the overall value of time preference within it. In addition, an interest rate must be greater than the sum of the originary rate and the compensation for all perceived lending risks, in order to create savings flows to feed investment.

This being the case, why is it that in financial markets, the forward price of something at a future date is usually higher than the present? The answer is simple: forward prices are not for possession, but for extending non-possession. Instead of being obliged to pay for possession today, a futures or forward price allows an individual to hang on to money for longer, rather than part with it now. And, assuming free markets set interest rates, with money’s time preference being greater than that of the average consumer item (in order to create savings flows referred to above), plus the addition for financial risk compensation, it should always be higher than the pure time preference applied to the underlying commodity, item or even just a title to ownership.

Therefore, higher prices for future deliveries of commodities and titles to ownership in financial markets are principally a reflection of money’s time preference, plus the risks associated with change of its ownership.To this should be offset the specific time-preference for individual commodities, but so long as they are in adequate supply, they will not be relatively significant compared with that of money.

This means the financial representation of time in a futures or forward contract in a properly functioning market is normally a positive cost. This condition is termed contango.We must also allow for the relative demand and supply characteristics of the underlying security between Date 1 and Date 2, which may temporarily lift a commodity’s time preference above that of money. If demand characteristics are such that the value of an immediate delivery overrides money’s time preference, then we have a backwardation. For example, there may be an acute shortage currently but supplies of the commodity in question are expected to be more plentiful at a future date. Backwardation is a temporary condition, and not the normal situation in financial markets.

To summarise so far, time preference tells us, except in a few specific cases, that the underlying or originary interest rate on money, which represents the time preference in all goods and services, must always be positive and include an extra margin to ensure savings flows occur. Furthermore, this is the basis for all pricing in financial markets for deferring delivery or settlement, which is called contango. In normal markets, backwardations are always unnatural and temporary, reflecting an excess of demand over supply for an earlier date over a later, but is never a general condition.

Negative interest rates create permanent backwardations

The reason it is vital to grasp the meaning and implications of time preference is to show that negative interest rates are unnatural, and do not accord with human action. It might not be obviously disruptive to financial markets when a central bank, whose currency is not the reserve currency, imposes a relatively minor negative rate on its commercial banks’ reserves. After all, a commercial bank will still charge its borrowers a positive rate, even though it may have to be imaginative when it comes to keeping depositors happy. But this is beginning to change, with both governments and large corporates now being able to issue bonds at negative rates. As we have seen from our discourse on time preference, this is a significant distortion from normality, indicating bond markets expect yet deeper negative rates in the currencies concerned.

In managing interest rates, the assumption central bankers make is that interest is the price of money. This is wrong for the reasons argued above. But instead of realising that deeper negative rates will not promote economic recovery in accordance with a cost of money approach to economic management, central banks’ economic models predict deeper negative rates are necessary in the event that a significant recession materialises.

However, this is new territory for policy makers, and they are naturally cautious about the prospect of deeper negative rates. Deeper negative interest rate policies will almost certainly be preceded or accompanied by quantitative easing, which allows a central bank to anchor term rates and government bond yields at the zero bound or even in negative territory. If the world faces a global recession, monetary expansion is likely to be the only course of action open to central banks, and deeper negative rates will become central to monetary policy if a recession persists.

With the expansionary phase of the credit cycle demonstrably running out of steam, history tells us that not only are we overdue a crisis in bank credit, but the tariff war between China and America will probably synergise with the cyclical downturn in the credit cycle to trigger a slump on a scale not seen since the early 1930s.

That being the case, under our assumptions for economic prospects, deeper negative rates will become unavoidable.The first to explore this dangerous territory are likely to be the ECB, the Swiss National Bank and the Bank of Japan. So far, lending rates at the Fed and the Bank of England are still in positive territory, but faced with an economic slump, that may not persist. The Fed’s interest rate is particularly important, because international financial markets price everything in dollars. And unless the Fed is prepared to see a dollar being strengthened by deepening negative rates elsewhere, the Fed may have little option but to follow.

If the Fed introduces negative dollar rates, then distortions of time preference will take a catastrophic turn. All financial markets will move into backwardation, reflecting negative rates imposed on dollars. Remember, the only conditions where backwardation can theoretically exist in free markets are when there is a shortage of a commodity for earlier settlement than for a later one. Yet here are backwardation conditions being imposed from the money side. It leads us to one conclusion: if negative rates for the dollar are imposed on financial markets, they will almost certainly lead to a flight out of the dollar where deposits become taxed with negative rates, not into other currencies, but into all commodities and future claims upon them. The current situation, where since the 1980s derivatives have inflated commodity supply, thereby suppressing prices, will be reversed. The purchasing power of dollars will be undermined by an attempted flight out of money. And it is unlikely to be long before the difference between negative time preferences between dollars and mildly positive ones for everyday items promotes a similar flight out of retail bank deposits.

That is the black and white of it. But there is a grey area of close to zero rates, when they are less than the implied rate of interest on gold, because of its time preference. Here it should be noted that gold’s interest rate when sterling was on the gold standard generally varied between two and four per cent, using the yield on British Consols as proxy. The Fed fund rate is already testing the lower boundary for monetary gold’s historic time preference, and markets are now expecting the FFR to go lower still.

Negative dollar interest rates and gold

This leads us to consider how a negative dollar interest rate will affect the price of gold. Gold is different from other commodities, because it is also a medium of exchange. And while it may not be commonly used as such in capital markets, it is widely retained by central banks and diverse parties as a monetary store of value.

Gold has a monetary time preference of its own, in accordance with time preference theory. And when gold was money, expressed as such through money substitutes, we know from the British experience in the nineteenth century, gold’s time preference usually held above two per cent, and that was still roughly the case reflected in gold’s lease rate since the 1980s.

In the 1980s gold was increasingly used as the collateral for a carry trade, leading to an explosion in business for the London bullion market. The underlying position was that central banks had accumulated bullion as part of their monetary reserves, and the gold price was generally falling. As bullish conditions died, gold’s time preference fell. Central banks and government treasury departments added to this trend, being prepared to lease their gold in large quantities to specialist banks in the bullion market.

At that time, a bullion bank could lease gold from a central bank and use it as collateral to invest in US Treasury bills. Gold’s time preference was reflected in a lease rate of typically 1.5-2% (though there were some spikes to 3-5%). Lease rates rhymed with evidence of gold’s originary rate established in the nineteenth century.

Meanwhile, 6-month UST bills yielded about 6% or more, giving bullion banks a fat profit over the lease rate. While figures were never published, Frank Veneroso, at that time a leading independent gold analyst, gave a speech in Lima in 2002 estimating central bank gold leases and swaps were between 10,000 and 15,000 tonnes. In other words, up to half of all central bank gold was out on lease or swapped.

Since those days, the London forward market has continued to grow. Bullion banks extended their operations to offer bullion accounts for wealthier individuals around the world, almost entirely on an unallocated basis. Unallocated accounts allow a bullion bank to own the gold deposited with it and to leverage its use as collateral for carry trades and other opportunities of interest rate arbitrage. This market became so developed that insiders have postulated that for every ounce of physical bullion in the possession of bullion banks there could be a hundred of paper liabilities.

We have no way of knowing the true level of paper gold leverage today. A working assumption that actual gearing is closer to between ten or twenty times seems more realistic, given Bank for International Settlements statistics of OTC swaps and forwards and LBMA vaulting statistics, allowing for ETF and other custody holdings, segregated from bullion bank ownership. To this must be added the banks’ unallocated customer account liabilities which go unrecorded. In any event, we can be certain that in recent decades a positive gold lease rate led to a substantial systemic uncovered position, likely to be still institutionalised, given the evidence from the LBMA’s daily clearing statistics.

The dollar interest rate that matters today is the wholesale market rate, USD LIBOR of a term that matches a gold lease. At the time of writing, 12-month USD LIBOR shows at 1.949%. The gold 12-month forward rate is roughly the same, implying the lease rate is zero. Clearly, with gold lease rates reflecting no time preference for gold, its supply into wholesale markets is being severely restricted. Look at it from a central bank’s point of view: if a lease is coming due, there is no incentive to renew it, particularly given the unquantifiable counterparty and systemic risks that may arise in the current global economic climate.

We can conclude that the basis for highly geared interest rate arbitrage by borrowing gold is running into a brick wall. Not only is there no incentive for lessors but also there is also a diminishing appetite for lessees, because the opportunities are vanishing. Synthetic gold liabilities are being gradually reduced, not only by ceasing the creation of new obligations, but by buying bullion to cover existing ones. This will have been particularly the case when the USD yield curve began to invert in recent months (itself a backwardation of time preference), and was the surface reason, therefore, that the gold price moved rapidly from under $1200 to over $1500.

Bullion banks are now faced with the prospect that the Fed will reduce interest rates to zero again, even without a systemic crisis such as Lehman. Traders, who are not often deeply analytical, will almost certainly link gold’s move in the wake of the Lehman crisis, once dollar liquidity concerns subsided, from under $750 to over $1900, with dollar rates being suppressed at the zero bound. If rates return there and LIBOR remains positive, that will be a reflection of systemic risk, not time preference. Meanwhile, gold’s time preference will almost certainly be increasing as markets attempt to discount a new wave of base money expansion when the Fed attempts to stabilise the US economy and manage government finances.

Bullion bank traders can see therefore, the day has arrived when gold’s time preference exceeds that of the dollar by an increasing margin. Furthermore, there is the growing threat of negative dollar rates, as economic conditions deteriorate. Putting other considerations aside, the switch in time preferences suggests a bullion bank’s future trading strategy should be the polar opposite of their current position. Instead of holding a small stock of gold to finance a large dollar position, logically they should maintain a small reserve of dollars to finance a larger position in physical gold.

It is for this reason that not only is the gold price rising, but is likely to continue to rise, appearing to defy all expectations. It is impossible to quantify the extent to which the gold price will rise as the bullion banks scramble to unwind or even reverse their habitual short positions, but if there is a surprise it is likely to be on the upside.

The consequences

As well as being modified by its specific supply and demand conditions, Gold’s time preference is essentially for its moneyness, represented by its use as a medium of exchange and store of value. The moneyness aspect links it to its exchange value for all commodities, and it is this aspect of gold’s qualities that should warn us that a backwardation in gold, emanating from negative dollar interest rates, will herald a general backwardation in commodities as well.

We must not forget that markets anticipate events where they can, so with a recession threatening to turn into a slump and with a looming credit crisis in the wings the prospect of negative rates will be increasingly priced into the relationship between commodities and fiat dollars. Assuming economic prospects darken because of the coincidence of American tariffs and the emerging crisis stage of the credit cycle, it will be check-mate for central banks. They were never appointed nor are they technically equipped to save the currency at the expense of widespread bankruptcies, not just in the private sector, but of their governments as well. And that is what markets will be faced with.

The current situation has striking similarities with the 1930s, and the prospects for the global economy are driven by the same broad factors. With the gold standard then and not now the price effects are already showing differences. Nor was there a bubble of hundreds of trillions of outstanding derivatives then as there are today. This time, the monetary sins since the ending of the Bretton Woods agreement seem set to come home to roost all of a sudden, even if dollar rates are lowered towards zero and only stay there. But if they go negative and the more below zero that they go, the greater the backwardation on the whole commodity complex. The more rapidly commodities will be bought so the dollar, taxed with negative rates can be sold, and the quicker market actors will devalue the currency.

With all other fiat currencies referenced to the dollar, it will mark the start of a process that is likely to collapse the entire fiat currency system. Bullion banks which are too slow to recognise the change and have not shut down their gold obligations will be forced to steal their customers allocated gold, or go to the wall, adding to the disruption. All commodity derivatives will face a period of rapid contraction of open interest, in lockstep or one pace behind those of gold.

Instead of central banks stabilising the system by monetary easing, the easing itself will guarantee the crisis. The development of a problem in gold markets, driving the gold price rapidly higher while some banks are caught napping, is likely to anticipate a wider financial and systemic crisis. Therefore, with gold’s sudden move higher coupled with its persistent strength we can reasonably certain that we are seeing the start of the dismantling of the dollar-based monetary system, and that gold has much further to go.

A good commentary today from Manly:  he notes that the considerable decline in Chinese imports may be to mask the rise in official reserves as our sovereign is the one who is buying the precious metals.
(Ronan Manly/Bullionstar)

Ronan Manly: Supposed decline in China gold imports may mask rise in official reserves

 Section: 

9:52a ET Monday, September 2, 2019

Dear Friend of GATA and Gold:

Bullion Star gold researcher Ronan Manly today verifies the Chinese gold import data recently reported by Reuters, showing a substantial decline this year, but notes that monetary gold — the gold held in central bank reserves — is exempt from import reporting.

Manly writes: “By adjusting the gold import quotas lower, gold imports could be channeled to the the vault of the central bank, while providing the necessary cover to create the illusion that lower quotas are the culprit for the decline. Given that nobody much believes the official low-ball figures for China’s official gold reserves, stranger things have happened than the Chinese state temporarily diverting some of the country’s gold imports for the coffers of its gold vaults in Beijing.”

… 

Indeed, Manly’s speculation is supported by the shallowness and exceedingly brief duration of the usual gold price smashes by government-connected bullion banks in recent months, which suggest that demand for physical has only risen, not declined, and the recent advocacy by a leading Chinese government newspaper of return to some sort of gold standard for currencies:

http://www.gata.org/node/19398

Besides, no financial market is bombarded by more disinformation from manipulators than the gold market, and this disinformation often comes from official sources, their lackeys, and mainstream financial news organizations that never put a critical question to an official source.

Manly’s analysis is headlined “Chinese Gold Imports — Better Data, Lower Inflows, Unanswered Questions” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/ronan-manly/chinese-gold-imports-bette…

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

* * *

Join GATA here:

New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
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:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

end

The rising price of gold is causing sellers to hold out for higher prices:  it is squelching Merger and Acquisition activity

(McGee/Globe and Mail/GATA)

Rapidly rising gold price squelching M&A activity

 Section: 

By Niall McGee
The Globe and Mail, Toronto
Sunday, September 1, 2019

https://www.theglobeandmail.com/business/article-rapidly-rising-gold-pri…

The big run in gold bullion means potentially higher profits for miners, but investors say the same dynamic is stifling mergers and acquisitions activity, as both buyers and sellers struggle to come to grips with where the commodity price will eventually land.

“When the gold price is rising, it’s going to be hard to get deals done. But if you saw it settle at US$1,500 [an ounce] for five or six months, I think you’d start seeing deals again,” said Jonathan Goodman, chief executive of investment manager Dundee Corp., and chairman of gold-mining company Dundee Precious Metals Inc.

… 

After trading sideways for the best part of three years, gold has risen by about 20% in 2019, as investors buy the precious metal as a hedge against macroeconomic troubles, including a global economic slowdown, and geopolitical tremors, such as the continuing trade war between the United States and China. On Friday gold futures traded at around US$1,520 an ounce.

Gold M&A started with a bang this year, with Barrick Gold Corp. closing its zero-premium, US$6-billion acquisition of Randgold Resources Ltd. in January, and Newmont Mining Corp. (now Newmont Goldcorp Corp.) announcing the same month it was scooping up Vancouver’s Goldcorp Inc. for US$10 billion.

However, since then, just a handful of deals have been announced, including Australia’s St. Barbara Ltd. buying Vancouver-based Atlantic Gold Corp. for $722 million in May, and Toronto-based Kinross Gold Corp. purchasing a Russian gold development project for US$283 million in July.

There is no shortage of large-scale gold deals waiting to happen. The world’s two largest gold companies, Barrick and Newmont, have indicated they are willing to sell around US$3 billion collectively in non-core mines over the next few years as they concentrate on whittling down their vast portfolios to the most profitable and longest-life mines.

Last month Barrick said it was starting a process to sell its 50% stake in its Kalgoorlie mine in Australia. Barrick CEO Mark Bristow also told The Globe and Mail he was prepared to sell its Massawa gold development project in Senegal.

Newmont’s management hasn’t been as explicit about naming assets, but analysts have pointed to the company’s Red Lake and Porcupine mines, both formerly Goldcorp assets, and both in Ontario, as likely to be sold.

The rising gold price means that sellers can likely demand more than they would have a few months ago.

“Everybody gets stars in their eyes,” Mr. Goodman said.

“The deals we saw earlier in the year were these low-premium deals. Now that we’ve got a [strong] gold market again, people are going to be looking for a premium.”

For the most part the Newmont and Barrick mines for sale are high cost with low reserves, but that doesn’t mean there won’t be willing buyers.

Benoit Gervais, precious-metals portfolio manager with MacKenzie Investments, says Australian miners Evolution Mining Ltd. and Northern Star Resources Ltd. have proven themselves to be deft turnaround artists in such scenarios, acquiring underperforming mines and eventually making them profitable again. As examples he points to Evolution’s 2015 acquisition of the Cowal mine from Barrick for US$550 milllion and Northern Star’s 2018 acquisition of the Pogo mine from Japan’s Sumitomo for US$260 million.

While Mr. Gervais sees the potential for many individual asset deals, he doesn’t foresee a lot of transactions involving gold companies buying their competitors outright. Those deals tend to be costlier, riskier, and much harder to nail down, with discussions often dragging on over who the management and board of the new company should be.

“Whether you are Australian or Canadian, before you go out and try to buy another company, it’s much simpler to buy an asset,” he said. “You can buy exactly what you want rather than the whole package.”

end

Grant Williams is one smart cookie and a good reason to go to New Orleans and here him talk

(GATA)

Another big reason to join GATA in New Orleans: Real Vision’s Grant Williams

 Section: 

10:40a ET Monday, September 2, 2019

Dear Friend of GATA and Gold:

Here’s another big reason to join GATA at the New Orleans Investment Conference during the first four days in November.

Market analyst, financial letter writer, fund manager, and Real Vision co-founder Grant Williams has just been added to the speaker lineup.

Williams’ work is often sensational, as it was with his presentation to the Stansberry Alliance Conference in Las Vegas last year, a presentation he titled “Cry Wolf,” which likened the ecology of nature to the ecology of the world economy. Meddling with one part of it, Williams showed, can have terrible effects throughout the whole of it.

In “Cry Wolf” Williams argued that the removal of the golden anchor of the world financial system in 1971 de-industrialized and financialized the economy of the United States and gave supreme power to bankers.

That presentation is still as compelling as ever and remains posted in the clear at Real Vision here:

https://www.realvision.com/grant-william-keynote-speech

GATA Chairman Bill Murphy and your secretary/treasurer again will be speaking at the conference as well, and in the letter below the conference’s organizer, Gold Newsletter Editor Brien Lundin, explains why you should join us there.

The New Orleans Investment Conference is probably the most serious financial conference in the United States, even as it is held in what may be the country’s most fun and interesting city. Because of the conference, your secretary/treasurer has been there many times and always looks forward to returning for the beauty, history, food, and atmosphere of the place.

… 

Indeed, the city itself competes heavily with the conference for your attention, so if you’re able, it’s good to give yourself an extra couple of days there.

The New Orleans conference has a long history of concentration on the monetary metals, and now that infinite money and devaluation have broken out among central banks and the monetary metals are on the verge of regaining their rightful places in the world financial system, this year more than ever New Orleans will be where gold and silver investors will want to be.

Registration for the conference entails a substantial expense, but as Brien explains below, if you register quickly you’ll enjoy a serious discount along with extra services at no extra cost and a money-back guarantee in case you don’t profit from attending.

Additionally, if you register using the internet link at the bottom of Brien’s letter, the conference will kindly pay a commission to GATA, which will diminish our fundraising appeals in the future.

So please consider joining us in New Orleans.

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

end

We have been highlighting this to you on a daily basis through the biggest of all EFT’s:  the GLD/SLV

(Pakiam/Bloomberg/GATA)

Growth in gold ETFs in August was biggest since 2013

 Section: 

All those investors shooting themselves in the foot, facilitating the shorting of what they want to rise in price.

* * *

Investors Rush Into Gold

By Ranjeetha Pakiam
Bloomberg News
Monday, September 2, 2019

Investors are going for gold in a big way. Inflows into bullion-backed exchange-traded funds topped 100 tons in August to hit the highest since February 2013 as the trade war worsened, risk assets took a knock, and central banks signaled looser monetary policy.

Holdings rose 101.9 tons, bringing total known assets to 2,453.4 tons as of Friday, according to data compiled by Bloomberg. It was the third straight monthly increase after the addition of a combined 154.1 tons in June and July.

.Bullion has been on a tear, gaining 19% this year, as the global outlook worsened on the standoff between the U.S. and China. Central bank buying has provided another layer of support, and Goldman Sachs Group Inc. says prices are likely to advance further as official purchases continue and demand for ETFs rises. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-09-02/gold-etfs-surge-more-…

* * *

end

Two extra reasons to help GATA by subscribing to The Calandra Report

 Section: 

11:05a ET Monday, September 2, 2019

Dear Friend of GATA and Gold:

Two bonuses now await GATA supporters who help us by subscribing to Thom Calandra’s financial letter, The Calandra Report.

Those who subscribe by this Thursday will receive not only Thom’s basic report but also:

— His frequent TCR Collateral missives, which include material from his notebook about financial people, companies, and commodities.

— A special recent issue of The Calandra Report that identifies what Thom believes are substantially undervalued gold, silver, and copper mining companies and a rising biomedical company with a promising new drug.

… 

Thom’s generous offer to GATA supporters is to split with GATA their one-year subscription fee of $169. That is, for each GATA supporter who subscribes, Thom will contribute $85 to GATA.

Now that the monetary metals seem to be breaking out of their central bank chains, companies that produce gold, silver, and other strategic resources are starting to draw investment again, making The Calandra Report of interest even to the most demoralized followers of the monetary metals.

A note from Thom explains below.

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

* * *

Hello Alpha-GATAs. I have supported GATA since the early 2000s. Over the years GATA Chairman Bill Murphy, GATA Secretary/Treasurer Chris Powell, and I have shared ideas, panel appearances, and even a drink or three.

I’d like you to join The Calandra Report community. It’s been going since 2011, and since 1998 for MarketWatch.com, which I co-founded.

Here’s a small biography:

https://thomcalandra.com/about-thom-calandra/

Here’s a subscription offer exclusively for GATA supporters, like the offer we made last year.

You get the twice-weekly private reports for one year for $169 — along with our TCR Collateral letters — and GATA will receive fully half of that amount: $85.

For your review Chris has posted here —

http://gata.org/files/CalandraReport-08-04-2019.pdf

— a recent edition of TCR, which covers the weeklong resources symposium just concluded in Vancouver.

To accept this offer and help GATA, please go here:

https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=588…

And please feel free to e-mail me with testimonials, ideas, and names: thom@thomcalandra.com

Thank you from northern California!

— Thom Calandra

iii) Other physical stories:

At least somebody is paying attention to these chat room discussion where 5 banks collude.  We have the evidence that they have also fixed the price of gold/silver.  Judge Rakoff is one smart individual and he states that these discussions are a “rare smoking gun” of price fixing.

(zerohedge)

“A Rare Smoking Gun”: Judge Says Goldman And Four Other Firms “Blatantly Price Fixed” GSE-Backed Bonds

Goldman Sachs and four other financial firms are facing claims that they rigged the $550 billion market for bonds backed by Fannie Mae and Freddie Mac, according to Bloomberg.

In the Southern District of New York, a proposed class action suit accuses the institutions of driving down the offer that they bought unsecured bonds at and “pumping” up the bid at which they sold them over the counter.

U. S. Southern District of New York Judge Jed S. Rakoff allowed the case to proceed against Goldman Sachs, Deutsche Bank Securities Inc., BNP Paribas Securities Corp., Morgan Stanley & Co., and Merrill Lynch.

The judge concluded that traders from these banks engaged in price fixing by using industry chatrooms, which exist primarily so that banks, dealers and co-underwriters can work together on a limited basis to find opening prices for bond issuances. However, in this case, four chat logs instead offered evidence that the traders discussed how to avoid a “race to the bottom” on the secondary market. 

 

 

Judge Jed Rakoff

The judge called it a “rare smoking gun”.

“This, on its face, is blatant price fixing,” he continued, dismissing the bank’s argument that those “authorized to coordinate on an opening price are allowed to have unrestricted pricing discussions during the syndication phase.”

The judge continued: 

“If it is illegal to fix the secondary prices for bonds once they are on the market, it cannot be legal to fix such prices through conversations that occur right before.”

The judge also rejected the idea that four isolated chats weren’t sufficient enough to make up a conspiracy. Instead, the judge said that the tone of these four chats indicated that there were “many others”.

The judge threw out claims against 12 other banks, including Barclays Capital Inc., Citigroup Global Markets Inc., Credit Suisse Securities, UBS Securities LLC, and HSBC Securities (USA) Inc., because the suit couldn’t link them to the scheme, despite “plausibly pleading that the conspiracy extended beyond” the chatroom.

end

Platinum is coming to the party although late

(courtesy Lawrie Williams)

LAWRIE WILLIAMS: Platinum coming late to the precious metals party

Among the main grouping of precious metals, platinum had been by far the poorest performer with its supply/demand fundamentals looking somewhat inferior to its platinum group metal (pgm) sister metal, palladium which has consequently surged past it in price. For most of the past few decades platinum was the highest priced of the major precious metals, but in the past few years both gold and palladium have advanced and platinum fallen back, hit hard by a major supply surplus and a fall-off in demand for diesel-driven automobiles where platinum had been the primary exhaust emissions control catalytic metal and had provided its major market – and still does. Meanwhile palladium has almost entirely replaced platinum as the exhaust cleaning catalytic metal for the far bigger petrol (gasoline)-driven small vehicle market.

The substitution of palladium for platinum as an exhaust emissions control catalyst had initially been largely due to the previous price differential between the two metals with platinum, up until relatively recently, having been priced far higher than palladium. Now the reverse is true and there has been speculation that emission control manufacturers for petrol-driven vehicles might revert to platinum-based catalysts, but we have seen little sign of that to date. Continuing research has seen palladium, mostly in conjunction with small amounts of another even rarer pgm, rhodium (which has also seen a huge price spurt) is proving to be a very powerful exhaust emissions control catalyst, so platinum would have to play catch-up again if it is going to retake its dominant position in this market. No doubt research is under way to see if an even more efficient platinum-based catalytic converter for petrol engines can be developed, but it is early days yet and the market remains to be convinced anyway that palladium will maintain its substantial price premium over any possible alternative – but the big hike in rhodium prices (now closing on $5,000 an ounce and around double its price of a year ago) could give another stimulus to platinum as a more cost efficient catalytic converter replacement catalyst for petrol engines too.

The platinum price has however caught fire over the past week or so – perhaps belatedly – although still remains at a price level substantially below that of gold and palladium. As I write, the closing prices for these three precious metals at the end of the most recent week’s trading in U.S. dollars were gold – $1,520, the much more volatile palladium – $1,517 (having spurted $70 at one time on Friday and moved back almost level with gold) and platinum – $931. So the latter has a good way to go before it could match or exceed the price of the other two, but with a 9% rise in the past week has certainly rewarded its most recent investors, if not its long term ones! A similar rise this week would put it back at over $1,000.

The latest boost in pgm prices, which are in effect industrial metals, was probably due to a sensed, but perhaps illusory, easing in the U.S./China trade war as Chinese officials appear to have indicated a slightly more conciliatory position in that China would not seek to escalate the tit-for-tat tariff impositions. But this may require a similar conciliatory statement from President Trump, and this may not be forthcoming as he could see the apparent Chinese move as a sign that U.S. pressures are having his desired effect. China is currently the world’s biggest market for the automobile and truck sector, and is beefing up its environmental controls, so any apparent easing in the ‘trade war’, and a consequent boost to Chinese car sales, could be seen by the markets as beneficial to the future prospects for the pgm catalyst sector.

However, increased tariffs on Chinese exports to the U.S. kicked in on Sunday and if there is no easing of this indicated by the U.S., China could well revert to a more aggressive approach again. Although the trade balance between the two nations is heavily skewed in the U.S.’s favour in terms of magnitude of imports, the Chinese will be well aware that the U.S. consumer will be paying the price of the increase in tariffs, despite President Trump’s downplaying of this consequence by claiming that the Chinese will be bearing the tariff costs. The U.S. consumer is probably more inclined to question any adverse effects of the trade war than is the Chinese public in what is still effectively a totalitarian state.

The trade war is undoubtedly having an adverse effect on current Chinese GDP growth, but overall Chinese policy has to be to wean its industrial base off a reliance on exports (although these will remain important) in favour of domestic consumption growth and with its 1.4 billion people population, long term will likely succeed in this aim. Meanwhile the U.S. only accounts for just over 20% of global GDP so there will be other potential markets for Chinese goods to be tapped but even so, the U.S. manufacturer and consumer will probably still need Chinese imports, even if they become more expensive because of the tariffs. Undoubtedly the manufacturing sector in particular will be looking to source some of what is currently imported from China from elsewhere, but that is easier said than done. Whether the higher costs of Chinese goods due to the tariff impositions will stimulate U.S. domestic manufacturing as President Trump hopes, is rather less certain though.

But even so, platinum appears to be on a bit of a roll, as the surplus of supply over demand appears to be diminishing, possibly exacerbated by the ever-continuing labour problems at the mines in the world’s largest producer, South Africa. We do expect it to reach four figure price levels in the near future though, but as very much an industrial metal, but with additional precious metal overtones given its use in jewellery, the price could suffer in a general economic downturn – as could the palladium price too.

Longer term the move to electric driven vehicles (EVs) could affect both pgms as pure electric battery driven vehicles do not use either. But if fuel cell powered EVs start to dominate this market, which is a possibility, then platinum could benefit as it is used in this technology, but that would be ultra long term – perhaps not until the second half of the century, if at all.

 

01 Sep 2019

end

Interview; Dave Kranzler with Silver Doctors

 

What’s Driving The Price Of Gold and Silver?

Financial MarketsGoldMarket ManipulationPrecious MetalsU.S. Economy

Fear, Greed and Reality. Also Bill Murphy’s “Commercial Signal Failure,” which occurs when physical demand for deliverable gold and silver overwhelms the paper derivative short positions used by the western Central Banks to manage the price of gold and silver.

The naked short position in paper gold and silver is so big that any government or central bank with a substantial FX surplus could pull the plug on it by trading enough Treasuries, or even euros or yen, for real metal. Russia and China, among several other eastern hemisphere Central Banks are doing just that.

Silver Doctor’s James Anderson invited me to discuss the factors behind what appears to be a major move higher in the precious metals, possibly leading to the eventual geopolitical and financial systemic reset (Silver Doctors/SD Bullion):

***************

You can learn more about  Investment Research Dynamics newsletters by following these links (note: a miniumum subscription period beyond the 1st month is not required):  Short Seller’s Journal subscription information–   Mining Stock Journal subscription information

***

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

i) Chinese yuan vs USA dollar/CLOSED / LAST AT: 67.1771/ GETTING VERY DANGEROUSLY PAST TO 7:1

//OFFSHORE YUAN:  7.1815   /shanghai bourse CLOSED UP 6.05 POINTS OR 0.21%

HANG SANG CLOSED DOWN 98.70 POINTS OR 0.39%

 

2. Nikkei closed UP 4.97 POINTS OR 0.02%

 

 

 

 

3. Europe stocks OPENED ALL RED/

 

 

 

USA dollar index UP TO 99.25/Euro FALLS TO 1.0936

3b Japan 10 year bond yield: FALLS TO. –.28/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.13/ 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:: 54/06 and Brent:57.68

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 -.72%/Italian 10 yr bond yield DOWN to 0.90% /SPAIN 10 YR BOND YIELD DOWN TO 0.11%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 1.62: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 1.62

3k Gold at $1530.05 silver at: 18.48   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 29/100 in roubles/dollar) 67.07

3m oil into the 54 dollar handle for WTI and 57 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 106.13 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 .9905 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0831 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 0.72%

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 1.49% early this morning. Thirty year rate at 1.95%

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

6.  TURKISH LIRA:  UP  TO 5.7624……

Futures Slide After Trade Deal Hope Turns To Dread

The September rollercoaster has started early.

One day after stocks first tumbled, when the US and China launched a new round of sanctions over the weekend, then rebounded for no comprehensible reason, then tumbled again following a Bloomberg report of difficulties in setting a schedule as both sides had failed to agree on a date for Chinese officials to meet their U.S. counterparts in Washington, S&P futures once again magically recovered all losses but not for long and have since sunk again, sliding 0.8% to just above 2,900 as investors awaited the next batch of news on trade talks.

 

US futures dragged the world lower and global stocks slipped toward a recent two-month low on Tuesday, as U.S.-China trade tensions drove investors to the relative shelter of gold, the Japanese yen and government debt; as a result treasuries advanced, while the pound first sank below 1.20 against the dollar for the first time in three years as Brexit brinkmanship raised the possibility of an early election in the U.K, only to surge shortly after for reasons not exactly clear.

 

To be sure, September has been off to a rocky start for risk assets as traders remained sensitive to the twists and turns of the Sino-U.S. trade war. With mistrust on both sides, officials from the world’s two largest economies are struggling to agree on basic terms of re-engagement and even when to hold meetings planned for this month, Bloomberg reported while violent confrontations in Hong Kong and the risk of an imminent Chinese incursion continue to weigh on sentiment.

With U.S. markets closed on Monday, global markets took their cue from weak PMI survey data in Europe and China which raised concerns the global economy was struggling on many fronts. An index of global stocks slipped 0.2% on Tuesday, heading toward a two-month low hit in early August. An index of Asian stocks was down 0.7%. In the trade war between Washington and Beijing, tensions have shown little sign of abating even though U.S. President Donald Trump has said they would meet for talks this month.

 

“Since the trade dispute has become the driving force behind equity markets, we advise against adding significantly to equity exposure, particularly for those with an adequate strategic allocation,” Mark Haefele, chief investment officer at UBS Global Wealth Management said.

European stocks were on the back foot as investors locked in profits from a three-day streak that saw indices scale near one-month highs, with the Stoxx Europe 600 Basic Resources Index falling for a second day, down as much as 1.4%, on news Chinese and American officials were struggling to schedule trade talks; metals retreated with copper hitting a 2-year low as diversified miners fall, with Rio Tinto -0.7%, BHP Group -0.5%, Anglo American -1.4%, Glencore -1.3%. Steelmakers also dropped: ArcelorMittal -1.2%, Evraz -1.7%, Voestalpine -1.3%, hit after Fitch analysts cut their 2019 global steel price forecast to $600/t from $650/t, as global prices continue to be hammered by poor sentiment from the ongoing U.S.-China trade tensions, increasing downside risks to the global economy. Base metals also fell in London, with copper -0.6%, zinc -1.5%, nickel little changed; aluminum -0.5%; iron ore -1.6% in Singapore.

Earlier in the session, Asian stocks dropped for a second day, led by energy producers, as Beijing and Washington struggled to set a meeting schedule for trade negotiations. Markets in the region were mixed, with Japan advancing and India retreating. The Topix climbed 0.4% in thin trading, supported by automakers and chemical producers. The Shanghai Composite Index closed 0.2% higher, with Foxconn Industrial Internet and China Yangtze Power among the biggest boosts. Sports-related shares jumped after China announced a plan to boost athletic development. India’s Sensex fell 1.4%, dragged down by financial shares, amid concerns that the biggest bank overhaul in decades may hurt the nation’s bad loan cleanup and slow lending approvals.

The move away from equities boosted demand for government debt with yields on benchmark U.S. Treasury debt tumbling to toward a three-year low hit last week as investors also ramped up their bets the global economy is headed toward a recession. Market watchers are hoping that U.S. data would undermine some of those bearish bets on the global economy with surveys from the Institute for Supply Management due later in the day while U.S. payrolls data is due on Friday.

“The ISM … is going to be (a) particular important market mover as those who have been buying bonds strongly, suggesting that the U.S. is on course for recession, need to see some sort of justification,” said Andrew Milligan, head of global strategy at Aberdeen Standard Investments.

The yield on 10-year U.S. Treasuries fell 2 basis points to 1.4876%, off a three-year low of 1.443% touched last week. The yield dropped more than 50 basis points last month, the biggest monthly drop since August 2011.  U.K. gilts and Italian debt led the rally in European sovereign bonds.

In FX, Sterling was the big mover in currency markets, nearing a three-year low with British Prime Minister Boris Johnson set for a showdown with Parliament over a no-deal Brexit. On the opposite performance end, the Bloomberg Dollar Spot Index touched the highest since May 2017 as uncertainty over the planning of U.S.-China trade talks supported the greenback; its seven-day winning streak is the longest since March. The dollar strengthened against all G-10 peers barring havens – the yen and the Swiss franc – as risk sentiment deteriorated; the biggest declines were seen in the NZ dollar and Norwegian krone.

After dropping to a record low on Monday, the offshore yuan failed to stage a rebound overnight as China and the U.S. struggled to set a date for planned trade talks this month. The onshore currency extended its decline Tuesday to the lowest level since February 2008, after news emerged that both sides had failed to agree on a date for Chinese officials to meet their U.S. counterparts in Washington. The offshore yuan fell as much as 0.47% overnight on the news, inching closer to 7.2 per dollar, before rising 0.2% as of 5:20 p.m. in Hong Kong. “The yuan will remain bearish, but the People’s Bank of China has been tightening its grip in the onshore yuan fixing and may attempt to anchor trading at the 7.1-7.2/USD range,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank. The central bank set its daily yuan fix at a level stronger than market watchers expected for a 10th straight day, the longest stretch since June. When the onshore currency breaches the 7.2 level, the PBOC may step up measures such as issuing verbal comments to reinforce its intention to smooth the pace of the depreciating yuan, Cheung said.

 

In commodities, oil prices were also dented by trade war concerns. U.S. West Texas Intermediate crude lost 0.47% to $54.84 per barrel. Brent futures dipped 0.05% to $58.63 per barrel amid concerns an economic slowdown from the trade war may dent demand. Forecasters are looking for signs a weakening Hurricane Dorian will turn north from the Bahamas rather than slamming head on into Florida.

 

Market Snapshot

  • S&P 500 futures down 0.8% to 2,901.50
  • STOXX Europe 600 down 0.5% to 378.78
  • German 10Y yield fell 3.4 bps to -0.736%
  • Euro down 0.2% to $1.0945
  • Brent Futures down 1% to $58.07/bbl
  • Italian 10Y yield fell 3.1 bps to 0.626%
  • Spanish 10Y yield fell 4.0 bps to 0.088%
  • Brent Futures down 1% to $58.07/bbl
  • MXAP down 0.3% to 152.31
  • MXAPJ down 0.7% to 490.16
  • Nikkei up 0.02% to 20,625.16
  • Topix up 0.4% to 1,510.79
  • Hang Seng Index down 0.4% to 25,527.85
  • Shanghai Composite up 0.2% to 2,930.15
  • Sensex down 1.6% to 36,743.43
  • Australia S&P/ASX 200 down 0.09% to 6,573.40
  • Kospi down 0.2% to 1,965.69
  • Gold spot up 0.2% to $1,532.04
  • U.S. Dollar Index up 0.3% to 99.25

Top Overnight News from Bloomberg

  • Britain faces its third election in just over four years after Johnson said he would rather risk losing office than have his negotiations with the EU undermined. In a dramatic ultimatum, Johnson will try to trigger a snap vote on Oct. 14 if he loses a crunch vote in Parliament on Tuesday evening
  • BOE Governor Mark Carney is running out of opportunities to warn lawmakers just how much a no-deal Brexit will harm the economy. With Parliament set to be suspended next week, Carney’s appearance before the Treasury Committee Wednesday could be one of his last chances to publicly address MPs before Oct. 31
  • Chinese and U.S. officials are struggling to agree on the schedule for a planned meeting this month to continue trade talks after Washington rejected Beijing’s request to delay tariffs that took effect over the weekend, according to people familiar with the discussions
  • Italy’s new government would push through an expansionary 2020 budget and demand a review of European Union fiscal rules, according to a draft program seen by Bloomberg
  • France is taking advantage of record-low borrowing costs to plan its biggest-ever debt sale this week, just as signs emerge that investor sentiment may be faltering after a global rally
  • The U.S. East Coast from Florida to the Carolinas was bracing for devastating winds and a life-threatening storm surge from Hurricane Dorianas the Category 3 storm wreaks havoc on the Bahamas

Asian equity markets traded indecisively following a non-existent lead from Wall St due to the Labor Day holiday and as upcoming key risk events, as well as reports US and China are struggling to set a meeting for trade talks this month, added to the non-committal tone. ASX 200 (U/C) and Nikkei 225 (+0.1%) were choppy with upside in Australia limited by mixed data and amid the RBA rate decision where the central bank kept rates unchanged as expected, while advances in Tokyo were restricted by a mixed currency. Hang Seng (-0.4%) and Shanghai Comp. (+0.2%) conformed to the indecisive tone after reports noted difficulty in setting up planned US-China trade talks and after MOFCOM lodged a case against the US at the WTO, with PBoC inaction and a net daily liquidity drain of CNY 80bln also contributing to the lacklustre sentiment in China. Finally, 10yr JGBs were subdued after the pullback in T-notes but then gradually recovered after mixed 10yr JGB auction results.

Top Asian News

  • Japan Companies Are Sitting on Record $4.8 Trillion in Cash
  • Hong Kong’s Lam Says She Never Asked China’s Permission to Quit
  • China Sees Some Positive Signs in Hong Kong Despite Violence

European indices are marginally lower on the day [Eurostoxx 50 -0.4%] following on from a mostly subdued Asia-Pac lead and ahead of US markets’ first chance to react to the implementation of further US/China tariffs. UK’s FTSE 100 (-0.2%) derives some modest support, but remains in negative territory, from the weaker Pound as UK Parliament returns from their summer recess to challenge PM Johnson’s attempt to prorogue Parliament until 14th October. Sectors are mostly in the red, albeit defensive sectors are less dented than cyclicals. Turning to individual movers, easyJet (-3.9%) rests at the foot of the Stoxx 600 index due to a broker downgrade at Kepler Cheuvreux, whilst Iliad (-4.3%) is not far behind on the back of earnings. On the flip side, Renault (+1.2%) and Fiat Chrysler (+2.5%) shares spiked higher amid source reports that Renault and Nissan are seeking ways to end their alliances discord, a resolution may potentially lead to a Fiat Chrysler deal.

Top European News

  • U.K. Construction Shrinks Again as Brexit Sees New Work Dry Up
  • Moscow Police Detain Opposition Activists After Orderly Protests
  • Italy’s Draft Government Plan Pledges Expansionary 2020 Budget
  • Lego Reports 12% Drop in Profit Dragged Down by Asian Investment

In FX, the Pound has racked up more losses in advance of UK Parliament reconvening after the Summer break and in anticipation of a showdown between anti-no deal politicians across party divides and PM Johnson’s pro-Brexiteers. Like yesterday, stops were triggered in Cable once the previous 1.2015 ytd low was breached and again through the psychological 1.2000 before another round was tripped on a break of 1.1980 that sat just below 1.1986-83 ‘support’ from mid-May 2017. The selling has subsequently abated even though construction PMI missed expectations in line with Monday’s manufacturing headline print, but Sterling remains weak and extending relative declines vs G10 pears with Eur/Gbp firmly above 0.9100 and Gbp/Jpy hovering around 127.00 after an order driven lurch to circa 126.70 at one stage.

  • AUD/JPY/CHF – In contrast to the underperforming Pound, and despite ongoing strength in the Greenback (ie DXY up to 99.356 at best), the Aussie and Yen are at the top of the major ranks, as Aud/Usd reclaims 0.6700+ status and Usd/Jpy slips back to test underlying bids/support around 106.00. No change in rates or wait-and-see guidance from the RBA overnight has helped the Aussie stabilise amidst the ongoing US-China trade stalemate and further Yuan weakness, while a broader downturn in risk sentiment is keeping the Yen underpinned alongside Gold, but not the Franc uniformly. Indeed, Usd/Chf is still holding above 0.9900, while Eur/Chf creeps deeper below 1.0850, albeit largely due to Euro depreciation on top of no verbal intervention from the SNB, so far.
  • CAD/NZD/EUR – The Loonie and Kiwi have both lost more ground relative to their US peer (and latter against the aforementioned recovering Aussie as Aud/Nzd eyes 1.0700), with Usd/Cad climbing above 1.3350 ahead of NA Markit manufacturing PMIs, and ISM in the US, while Nzd/Usd has pulled back under 0.6300 into the latest GDT auction and not really gleaning support from NZ Finance Minister Robertson noting some robust domestic data and firm economic fundamentals, as he also stated that the Government is ready to react in the case of a shock. Elsewhere, the single currency continues to decline as noted above, and closer to 1.0923 support ahead of 1.0900, but may find some traction from hefty option expiries close by (2 bn between 1.0945-50).
  • EM – The Rand and Lira look technically and fundamentally ripe to claw back ground vs the Buck, with Usd/Zar reversing from almost 15.2900 towards 15.1250 and Usd/Try touching 5.7650 compared to 5.8220 at the other extreme in wake of SA GDP and Turkish CPI that confounded forecasts on the upside and downside respectively.
  • RBA kept the Cash Rate unchanged at 1.00% as expected. RBA stated the outlook for global economy is reasonable and that it is to ease policy if needed to support sustainable growth, while it added rates are to remain low for an extended period. RBA reiterated that it will monitor developments in labour market closely and that signs of a turnaround in housing market but sees inflation likely to be subdued for some time and noted the outlook for consumption remains the main domestic uncertainty.

In commodities, WTI and Brent futures are on the backfoot in early EU trade, with prices around 54/bbl and under 58/bbl respectively. Prices may also see divergence as WTI had no settlement yesterday due to the US Labor Day Holiday, which will also see the weekly API and DoE inventory data pushed back by a day. Price action has largely been dictated by sentiment thus far, with ongoing US/China, Brexit and Hong Kong woes weighing on risk appetite. State-side, NHC said a tropical cyclone is expected to form later today over SW Gulf of Mexico, tropical storm warnings have been issued for portions of NE Mexico. The potential tropical cyclone Seven is located about 220 miles East of La Pesca, Mexico, with maximum sustained winds of 35mph. Meanwhile, Hurricane Dorian is reportedly stationary and is expected to drift North/Northwest later, away from the Gulf of Mexico. Elsewhere, gold is relatively flat but off of intra-day lows and in positive territory despite the DXY printing fresh YTD highs as investors increase positions in safe-haven assets. Conversely, the risk aversion has taken a toll on copper prices which currently reside below the 2.50/lb level. Finally, Dalian iron ore futures rose in excess of 4% amid a rosier demand outlook for the base metal as steel mills restock their supplies.

US Event Calendar

  • 9:45am: Markit US Manufacturing PMI, est. 50, prior 49.9
  • 10am: ISM Manufacturing, est. 51.2, prior 51.2;
  • 10am: Construction Spending MoM, est. 0.3%, prior -1.3%

DB’s Jim Reid concludes the overnight wrap

For a brief moment yesterday the main headline out of No.10 Downing Street yesterday was the arrival of a very cute new adopted Jack Russell puppy named Dilyn. However fast moving political events soon overshadowed this. Although before moving on I can’t help wonder what Larry the Downing Street cat made of the new arrival.

The news quickly moved from puppies to polling as speculation intensified as the day progressed that a government commitment to a general election was imminent. PM Boris Johnson spoke outside No.10 just after 6pm UK time and suggested that if Parliament blocks no deal this week and votes for a delay, they are making his negotiations with the EU impossible. This move comes in the wake of news that lawmakers plan to raise a motion today to take over the order paper tomorrow and raise a bill to force the government to extend A50. It specifies the government must seek an extension to 31st January 2020 or agree to any extension EU27 provides. It also says this must be complied with by 19th October. The vote will likely take place tomorrow evening. Mr Johnson didn’t actually say that an election will follow a loss in tomorrow’s vote as was expected beforehand but it’s hard to see what the alternative is and there are plenty of well respected and connected journalists suggesting that an election on October 14th is being lined up. Interestingly this is a Monday as the crucial EU summit takes place on the 17-18th and takes the usual Thursday UK election slot. The last non-Thursday general election was in 1931. Apparently historically Fridays were always ruled out as politicians were worried that burgeoning end of the week pay packets were likely to lead to drunken voting. Insert your own jokes here but people from both sides of the Brexit debate might need a stiff drink at the end of this week! We should also add that with fixed term parliaments the PM can’t automatically call an election as 2/3rds of the House requires to vote for it. However this is surely a formality if the PM supports it as the opposition party has been calling for one. The most interesting scenario though is that the PM loses the vote tomorrow and the opposition refuse to vote for an election or insist on it being held after October 31st thus leaving the PM trapped. One to watch.

Sterling had a tough day on continuous speculation about the day’s likely news and weakened about -0.80% by the afternoon and was then relatively unmoved by the PM’s statement, partly helped by no US trading. It is trading down a further -0.27% this morning though.

In light of yesterday’s developments, it’s worth noting where the latest polls are. YouGov has run two separate polls in the last week with the 28-29 Aug poll showing a 33% versus 22% Conservatives-Labour split. The poll from 27-28 August in conjunction with the Times had a 34% versus 22% split. The Brexit Party picked up 12% and 13% respectively and Lib Dems 21% and 17% respectively. Since then the Survation/Daily Mail poll conducted over 29-30 August had a slimmer lead for the Conservatives over Labour at 31% versus 24% (albeit with a much smaller sample size). Most recently, the Deltapoll/Mail on Sunday poll had a 35% versus 24% split. It feels to me that the country is still very close to being 50/50 split on Brexit and the key to any election is which side unites more around one party than the other side. With Boris Johnson doing everything he can to win back a high proportion of the those who flocked to the Brexit Party, the Labour and Liberals are probably going to need a plan as how they can avoid splitting the remain vote.

So expect there to be a lot more focus on the polls in light of yesterday’s news, especially if the government lose tomorrow’s vote as expected. Over in markets 10y Gilts (-6.7bps) tracked the move in Sterling however most other European bond markets were a shade weaker to unchanged after the manufacturing PMIs broadly printed in line with expectations (more on those below). Indeed 10y Bund (-0.1bps) and OAT (+0.6bps) yields were flat to slightly higher along with 10y yields in Spain (+2.3bps) and Portugal (+0.9bps) although BTPs (-3.0bps) extended their strong recent run with the spread over Bunds now down to 167bps. To think that spread was closer to 240bps in early August.

In equity markets, with the US off on holiday, volumes were down some 50% or so however markets did finish slightly on the positive side with small gains for the STOXX 600 (+0.32%) and DAX (+0.12%). The FTSE 100 (+1.13%) was a standout thanks to the currency move while Italy’s FTSE MIB also closed up +0.50%. In EM the Argentinian Peso strengthened +6.21% after the nation imposed capital controls while in commodities Gold (+0.59%) closed up but is trading down -0.30% this morning while Brent oil futures were down -2.90% yesterday.

In other news, yesterday late afternoon Bloomberg reported that the US and China were struggling to agree on a date to meet this month. S&P futures after being flattish at around Europe’s lunchtime traded as low as -1% down after headlines. They are down -0.54% as we type.

Bourses in Asia are trading flat to down amidst low volumes this morning. The Nikkei (+0.04%) and Shanghai Comp (-0.05%) are trading broadly unchanged while the Hang Seng (-0.10%) and Kospi (-0.17%) are slightly lower. In Fx, all G10 currencies are trading weak (range c. -0.1% – -0.5%) with the US dollar index trading up +0.37% at 99.281, the highest level since May 2017. Asian EM Fx is also trading weak with the onshore Chinese yuan down -0.15% to 7.1824 with the Indian rupee leading the declines (-0.88%). Meanwhile the 10y UST yield is up +2.9 bps this morning and the 2y yield up +1.5bps bringing the 2s10s curve back in marginally positive territory (+0.4bps). The yields on the 30y UST is up +3.9bps. As for overnight data releases, South Korea’s August inflation printed at 0% yoy (vs. +0.2% yoy expected and +0.6% yoy last month) – a record low – and core inflation printed in line with expectations at +0.9% yoy (vs. +1.0% yoy last month) while the final Q2 GDP was revised down one tenth from the initial read at +2.0% yoy. Separately, the BoK said that the recent low inflation is mainly due to supply-side factors and government’s policies on welfare and it’s hard to say it’s the precursor of deflation while adding that inflation will quickly rebound around the end of this year.

Back to yesterday, where with the ECB meeting now just a stone’s throw away, the PMIs were always going to be a bit more peripheral than normal and the fact that they were broadly close to consensus only furthered that argument. Indeed the manufacturing reading for the Euro Area was confirmed at 47.0 and unrevised from the flash with a slight upward revision for France (51.1 from 51.0) offset by a slight downward revision for Germany (43.5 from 43.6). There were however slight positive surprises for Italy (48.7 vs. 48.5 expected) and Spain (48.8 vs. 48.5 expected) although this needs to be taken in context of both still being in contractionary territory.

Meanwhile, the UK’s manufacturing PMI (47.4 vs. 48.4 expected) hardly made for pretty reading. The market is obviously more focused on Brexit developments however this was still the lowest reading in 85 months with new orders also at the lowest level in over 7 years. Most of the forward-looking indicators were fairly weak too with the data still very much consistent with the manufacturing sector in recession.

So the baton passes to the US today where we’ll get the August ISM manufacturing and final manufacturing PMI revisions. The market expects the ISM to have held steady at 51.2 which as a reminder was the lowest since August 2016. The reading has also dropped for 4 consecutive months and 8 of the last 11 months. We should flag that our US economists expect a temporary bounce in today’s ISM to 52.5 in light of the regional survey data however they do expect further downside risks in the near term owing to trade uncertainty.

To the day ahead now, where the only data of note this morning is the July PPI print for the Euro Area. In the US this afternoon the highlight is likely to be the August ISM manufacturing report, while the final August manufacturing PMI revisions will also be made. The July construction spending print is the only other data of note. Away from that the Fed’s Rosengren is due to speak late this evening.

 

3A/ASIAN AFFAIRS

I)TUESDAY MORNING/ MONDAY NIGHT: 

SHANGHAI CLOSED UP 6.05 POINTS OR 0.21%  //Hang Sang CLOSED DOWN 98.70 POINTS OR 0.39%   /The Nikkei closed UP 4.97 POINTS OR 0-.02%//Australia’s all ordinaires CLOSED DOWN .06%

/Chinese yuan (ONSHORE) closed DOWN  at 7.1771 /Oil UP TO 54.06 dollars per barrel for WTI and 57.68 for Brent. Stocks in Europe OPENED RED//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.1771 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1815 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY PAST 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /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%

 

 

3 a./NORTH KOREA/ SOUTH KOREA

South Korea

 

b) REPORT ON JAPAN

 

3 C CHINA

Gatestone’s Lawrence Franklin discusses the options facing Mainland China in their dealings with the Hong Kong protests. It is a very important commentary and a must read.  The real reason for the protests:  What will happen in 2047 when Hong Kong must give up their 2 systems..two governments formula set up in the handover of the city in 1997?

What Will China Do With The Hong Kong Protests?

Authored by Lawrence Franklin via The Gatestone Institute,

Protests in the Hong Kong Special Administrative Region of the People’s Republic of China (SAR) — which began in early June with demonstrators denouncing a proposed law to permit the extradition of SAR residents to the mainland to be tried in Chinese Communist courts — have entered their 12th week and show no signs of abating. If anything, they are becoming increasingly strident, with calls for the resignation of Hong Kong Chief Executive Carrie Lam’s administration, among other broadening demands . The unfolding events present the Communist Party leadership in Beijing with a serious dilemma: to quell the protests with military force or wait until they die down.

According to a recent analysis in Bloomberg:

“In theory, [Chinese President] Xi [Jinping] could quickly do away with Hong Kong’s autonomy and activate the city’s garrison overnight. But the likelihood of mobilizing troops remains low and the fallout from doing so — for both China and Xi personally — is potentially much higher than dealing with the political and economic repercussions of the protests, not least because he’s already engaged in a damaging trade war with U.S. President Donald Trump.”

 

The Hong Kong protests reportedly were a topic of debate at this year’s annual meeting of current and former Communist Chinese leaders, which was held in Beidaihe in early August. The discussions likely included possible courses of action that the Xi government could take, such as encouraging Hong Kong’s business community to call for an end to the demonstrations, for the purpose of restoring economic stability by reversing recent negative trends in retail sales, tourist-generated income and nervousness among foreign investors.

Pictured: Riot police detain a pro-democracy protester on August 24, 2019 in Hong Kong. (Photo by Anthony Kwan/Getty Images)

Beijing is currently exercising some version of this option, but by depicting protesters in a poor light — accusing them of being “terrorists” manipulated by “foreign forces” bent on harming China — and warning them to stop “playing with fire.”

China’s state media accused the demonstrators of conducting a “color revolution.” The name reflects Beijing’s sensitivity to how many of the former satellites of the USSR successfully seceded from the Soviet Empire, employing different colors of the rainbow as a symbol of their revolutionary intent.

Beijing also attempted to discredit the protesters through hundreds of fake accounts on social media. To their credit, Facebook and Twitter discontinued the Chinese government’s access to those accounts.

A more forceful option that the Xi government may decide to pursue involves the infiltration of Hong Kong’s local police force with the People’s Liberation Army Garrison. Beijing cannot count on the loyalty of the Hong Kong police force, many of whose members are close relatives of the protesters.

Moreover, the Hong Kong police have proven unable to control, much less terminate, the protests. Acknowledging this reality, Carrie Lam could request the intervention of the People’s Armed Police (PAP), a paramilitary force stationed in the nearby town of Shenzen in mainland China’s Guangdong Province.

It may be, however, that Lam, a Catholic, would be loath to make such a request — formally — as a heavy-handed Chinese intervention could endanger the independence of Hong Kong’s economic, political and religious institutions.

Alternatively, the People’s Republic of China Liaison Office might bypass Lam’s local administration and order the deployment of the PAP, China’s most effective arm against domestic strife. If this option is exercised, Hong Kong would be completely bypassed by the Chinese Defense Ministry.

Any move by Beijing aggressively to suppress the people of Hong Kong’s demand for the full implementation of their democratic rights would further hobble foreign investment, thereby seriously eroding the economic blueprint of China’s Belt and Road Initiative. A military solution would render meaningless Xi’s flowery rhetoric of a “win-win” international system, and reveal it as part of its scheme to fulfill its global hegemonic ambitions. Mainland and archipelago Southeast Asian nations would likely seek alternatives to Chinese regional leadership. One such alternative might be a U.S. Indo-Pacific community of nations.

In addition, any crackdown on the protesters in Hong Kong would likely dissuade Taiwan, and likely everyone else, from considering support for Beijing’s “one country, two systems” policy to solve the island’s standoff with the mainland’s People’s Republic.

China’s ruling Communist Party might decide , therefore, that an armed suppression of the Hong Kong demonstrations would be too costly, economically, politically and in terms of public relations. If so, the Xi administration may decide, instead, to tamp down the spiraling crisis, by ordering Lam to meet with protest leaders and agree to shelve extradition legislation and to establish a commission to investigate local police brutality — both original demands of the protestors.

Although such a maneuver could benefit Xi’s reputation internationally, his rivals within the Communist Party might criticize him for what they would consider to be acts of weakness and capitulation to the protesters, possibly encouraging what Xi might consider the greatest threat: opposition from his own 1.5 billion people on the mainland, who might also secretly be wishing for more freedom in their lives. China is a totalitarian power that cannot brook any source of independent thinking. Fearing that the Hong Kong protests could prove contagious, Beijing is more likely to crush, rather than cede, to the protesters.

Xi may assess that any opprobrium endured by Beijing if it used force against the protesters would dissipate, just as it did 30 years ago when former Chinese leader Deng Xiaoping ordered the 1989 massacre of student protesters in Tiananmen Square.

As China continues ostensibly to weigh its options, then, any optimism on the part of the protesters and the West appears to be premature.

The real “elephant in the room” not being addressed, however, is what the Hong Kong protests are really about: 2047, when Hong Kong is supposed to be handed over to China without any “one country, two systems” protection. What then?

end
Hong Kong
Saturday morning:  Live rounds fired as police try to contain the chaos
(zerohedge)

Hong Kong Police Fire Live Rounds To Quell Protesters As Chaos Rules Streets

Update (10:32AM ET): Authorities fired a live round near Victoria Park as a warning to protesters.

SCMP Hong Kong@SCMPHongKong

Dramatic scenes near Victoria Park as a live round was fired by police skywards as a warning shot to protesters.

Video: SCMP/Kao Shan Shan

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A video on Facebook, meanwhile, appears to show the moment protesters discover an undercover officer firing what appears to be pepper rounds.

Authorties, of course, are calling for calm: “The president calls on protesters to express their calls through peaceful means and hopes all parties can resolve the social conflicts altogether,” said a spokesman for Legislative Council president Andrew Leung Kwan-yuen.

Meanwhile, as Bloomberg’s Fion Li reports, the riot police is now sweeping across the subway, in an attempt to make mass arrests.

Fion Li

@fion_li

unprecedented scene – riot police entered multiple stations, apparently trying to make arrests. police didn’t allow press to report. Masses Defy Police, Show China They’re Ready to Fight https://www.bloomberg.com/news/articles/2019-08-31/hong-kong-clashes-escalate-as-water-cannons-firebombs-are-used  @bpolitics

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***

Protesters in Hong Kong returned to the streets in what Bloomberg has called “one of the city’s most violent days in its 13th weekend of social unrest,” after several top organizers were arrested and then released, including Joshua Wong, Agnes Chow and Andy Chan.

Hong Kong police fired tear gas and sprayed protesters with blue dye from pepper-spray filled water cannons, while charging other protesters with shields and batons.

Tiffany May

@nytmay

Tear gas and water cannons have been fired near the Hong Kong government headquarters

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Tiffany May

@nytmay

Water cannons fired blue dye

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Eric Cheung

@EricCheungwc

“Liberate , the revolution of our time,” some chanted amidst the fire.

We heard several loud “bang” sounds as the fire grew bigger.

This is beyond anything I have seen in the protests so far.

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Tens of thousands participated in an unauthorized demonstration – many of whom threw objects and gasoline bombs over barriers at the government’s headquarters. After initially retreating in response to the crowd control measures, protesters returned to a nearby suburb and set fire to a wall on Hennessy Road in the city’s Wan Chai district.

Fion Li

@fion_li

this fire has gotten much bigger after 20 minutes. the street is full of dark smoke. Clashes Escalate as Water Cannons, Firebombs Are Used https://www.bloomberg.com/news/articles/2019-08-31/hong-kong-clashes-escalate-as-water-cannons-firebombs-are-used  @bpolitics

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While others marched back and forth elsewhere in the city, a large crowd wearing helmets and gas masks gathered outside the city government building. Some approached barriers that had been set up to keep protesters away and appeared to throw objects at the police on the other side. Others shone laser lights at the officers.

Police fired tear gas from the other side of the barriers, then brought out a water cannon truck that fired regular water and then colored water at the protesters, staining them and nearby journalists and leaving blue puddles in the street. –AP

Global Times

@globaltimesnews

police used water cannons to disperse rioters near Causeway Bay. The water contains pepper.

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The protesters were undeterred.

Fion Li

@fion_li

protesters aren’t deterred by rounds of tear gas outside Sogo department store at all. what a scene in causeway bay. Clashes Escalate as Water Cannons, Firebombs Are Used https://www.bloomberg.com/news/articles/2019-08-31/hong-kong-clashes-escalate-as-water-cannons-firebombs-are-used  @bpolitics

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Several people were arrested and tossed into police vans.

“Violent protesters continue to throw corrosives and petrol bombs on Central Government Complex, Legislative Council Complex and Police Headquarters,” said the police in a statement. “Such acts pose a serious threat to everyone at the scene and breach public peace.”

Bloomberg TicToc

@tictoc

GRAFFITI: protesters start writing “liberate Hong Kong” on the walls of a tunnel in the center of the city

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Bloomberg TicToc

@tictoc

TEAR GAS: Police fire tear gas at protesters outside Hong Kong’s Legislative Council offices

More @business: https://bloom.bg/2zBmMX9

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Protesters in Hong Kong returned to the streets in what Bloomberg has called “one of the city’s most violent days in its 13th weekend of social unrest,” after several top organizers were arrested, including Joshua Wong, Agnes Chow and Andy Chan.  Hong Kong police fired tear gas and sprayed protesters with blue dye from pepper-spray filled water cannons, while charging other protesters with shields and batons.  Water cannons fired blue dye pic.twitter.com/U8YAR1PsrQ — Tiffany May (@nytmay) August 31, 2019 Tens of thousands participated in an unauthorized demonstration – many of whom threw objects and gasoline bombs over barriers at the government’s headquarters. After initially retreating in response to the crowd control measures, protesters returned to a nearby suburb and set fire to a wall on Hennessy Road in the city’s Wan Chai district.  this fire has gotten much bigger after 20 minutes. the street is full of dark smoke. #hongkongprotests#HongKong Clashes Escalate as Water Cannons, Firebombs Are Used https://t.co/JtIZo9EhGJ @bpolitics pic.twitter.com/pxdhcV0iRc — Fion Li (@fion_li) August 31, 2019 While others marched back and forth elsewhere in the city, a large crowd wearing helmets and gas masks gathered outside the city government building. Some approached barriers that had been set up to keep protesters away and appeared to throw objects at the police on the other side. Others shone laser lights at the officers. Police fired tear gas from the other side of the barriers, then brought out a water cannon truck that fired regular water and then colored water at the protesters, staining them and nearby journalists and leaving blue puddles in the street. -AP #HongKong police used water cannons to disperse rioters near Causeway Bay. The water contains pepper. pic.twitter.com/A0aSgzTTea — Global Times (@globaltimesnews) August 31, 2019 The protesters were undeterred. protesters aren’t deterred by rounds of tear gas outside Sogo department store at all. what a scene in causeway bay. #hongkongprotests#HongKong Clashes Escalate as Water Cannons, Firebombs Are Used https://t.co/JtIZo9EhGJ @bpolitics pic.twitter.com/SOPyI4ZIzu — Fion Li (@fion_li) August 31, 2019 Several people were arrested and tossed into police vans.  “Violent protesters continue to throw corrosives and petrol bombs on Central Government Complex, Legislative Council Complex and Police Headquarters,” said the police in a statement. “Such acts pose a serious threat to everyone at the scene and breach public peace.” TEAR GAS: Police fire tear gas at #antiELAB protesters outside Hong Kong’s Legislative Council offices#HongKongProtests #香港 More @business: https://t.co/MmE4GkqhtD pic.twitter.com/9ZnKPDCTUA — Bloomberg TicToc (@tictoc) August 31, 2019 Protesters asked US President Donald Trump to take action and help the activists, who originally took to the streets to protest a controversial extradition bill which would have allowed China to bring suspects to the mainland to face trial in PRC courts.  This #antiELAB protester tells us why he’s urging Trump to take action on #HongKongProtests #香港 More @business: https://t.co/6KN3YO371w pic.twitter.com/55ZzVNpdqW — Bloomberg TicToc (@tictoc) August 31, 2019 Acting on orders from Beijing, Hong Kong rejected an application by the Civil Human Rights Front for a march to the Chinese government office. While previous marches have begun peacefully, police say that they have increasingly devolved into chaos and violence towards the end.

Protesters asked US President Donald Trump to take action and help the activists, who originally took to the streets to protest a controversial extradition bill which would have allowed China to bring suspects to the mainland to face trial in PRC courts.

Bloomberg TicToc

@tictoc

This protester tells us why he’s urging Trump to take action on

More @business: https://bloom.bg/2zAGbaS

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Acting on orders from Beijing, Hong Kong rejected an application by the Civil Human Rights Front for a march to the Chinese government office. While previous marches have begun peacefully, police say that they have increasingly devolved into chaos and violence towards the end. 

Sunday/Hong Kong

Protest continue on Sunday with the protesters occupying the Hong Kong Airport.  There was a surge of violeance reported.

(zerohedge)

“Burn With Us” – Protesters Clash With Riot Police At Hong Kong Airport Amid Surge Of Violence

Following one of the most violent days of unrest since the anti-extradition bill protests began three months ago, Hong Kongers again ignored police orders to stay home on Sunday and gathered at Hong Kong International Airport. Though Sunday’s demonstration was smaller than Saturday’s, police once again escalated their violent tactics, at one point seeming to indiscriminately beat down young people traveling on the city’s public transit on suspicion that they might be traveling to join the protest.

Protest leaders called on supporters to overwhelm roads and rail links to the airport on Sunday and Monday to try and cause mass cancellations of flights like they did two weeks ago, according to the SCMP.

They were met by an army of riot police, who forced them to retreat to Tung Chung, where many demonstrators took refuge in the local MTR station.

Jeremy Song@tezuma75

Riot police arrived at the airport

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Some protesters tried to set up barricades to stop the advancing riot police, leading to scuffles that have become all too familiar at this point in the protest movement.

After a brief, but violent, showdown with police Sunday afternoon, calm had returned to the airport by Sunday night, but travelers were left to improvise alternative routes to the airport as police shut down the express train service, forcing flyers to take taxis and buses on highways clogged with pedestrians.

After leaving the airport, protesters gathered in Tung Chung, where the MTR station was trashed during scuffles with police, and barricades were set on fire. Protesters also gathered at Citygate mall. Many ended up stranded on Lantau Island as police also shut down the Tung Chung MTR line after claiming it was “vandalized” by protesters.

With no access to public transportation, thousands of people resorted to walking on the expressway. Throughout the day, friendly motorists gave protesters rides from the airport and Tung Chung back to more urban areas of Hong Kong.

Erin Hale

@erinhale

Quick recap of today: protests started at Hong Kong International Airport, where barricades did go up but everyone ended up retreating to Tung Chung. With the MTR line down and stuck on a mountainous island with traffic, protesters are now walking to the next area on the highway

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Once again, Hu Xijin, editor of the Communist Party-backed paper the Global Times was out reporting on the “illegal protesters”.

Hu Xijin 胡锡进

@HuXijin_GT

I am at the Hong Kong international airport, one of the busiest airports in the world. It has been disrupted again by illegal protesters today. Passengers have to walk on the usually busy expressway.

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Speaking to the Hong Kong Free Press, a 25-year-old protester named James said his group had decided to leave the airport because they felt vulnerable.

“In the evening it’s dangerous, especially at the airport – it’s just a small island…Police can come from the airport and Tung Chung, so it’s two-sided, they can attack from two sides. So it’s hard to defend yourself,” he said.

At the Tung Chung MTR station, protesters smashed turnstiles and other equipment, while spray painting slogans like “Communist Party Railway” on the walls. A wave of anger has been directed at MTR over its decision to allow Hong Kong police to board trains and harass protesters.

In what appears to be a new slogan for the movement, demonstrators spraypainted “Burn With Us” and “8.31”, “7.21” on the station’s walls. The latter dates are references to the attacks on demonstrators on Saturday, and back in Yuen Long on July 21 (Of course, if they start using “down with Pooh,” Beijing will have no choice but to crush the movement).

Alvin L@alvinllum

Protesters also spray painted “burn with us” and “8.31, 7.21” on walls of Tung Chung MTR. The latter refers to indiscriminate attack in Yuen Long on July 21, and police alleged attacks over protesters and civilians in railway stations.

View image on Twitter

In a truly bizarre incident that appeared to confirm reports of local thugs working with Beijing to scare off protesters, a man in a white shirt was reportedly seen chasing protesters with a long knife, though nobody was reported injured and police said they hadn’t received any reports, according to a local English-language blog.

Videos shared on social media Sunday only added to the outrage, as they showed police in helmets and gas masks beating pedestrians and riders inside a train in Prince Edward station.

Hong Kong Free Press

@HongKongFP

Graphic footage from Sat night shows how police stormed Prince Edward MTR station, beating people and making arrests on the platform and train. Video: Pakkin Leung, Rice Post.
Full story: http://bit.ly/2NIqR41 @hkpoliceforce

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A spokeswoman for Hong Kong police told Voice of America that police had used “appropriate force” during the clashes with suspected protesters. She admitted that it was difficult to distinguish between protesters and the public as police moved against the crowd at the Prince Edward station.

“Police will continue to take resolute enforcement actions so as to safeguard the city’s public safety and bring all lawbreakers to justice” police said in a news release.

Representatives for Hong Kong’s government said police were justified.

“The behaviors of the radical protesters gravely breach the public peace and pose a serious threat to the safety of police officers on duty and members of the public at the scene,” according to a news release issued Sunday.

Once again, demonstrators turned out in smaller numbers on Sunday after police banned a planned rally and march organized by a group that had spearheaded gatherings held earlier in the protest movement that involved some 2 million people. A few thousand protesters occupied Harcourt Road, a major east-west highway near Admiralty.

As they did on Saturday, protesters chucked bricks and Molotov cocktails at police, while police hammered the crowd with blue-dyed water shot from water cannons. According to VOA, the sound of military helicopters flying overhead and the firing of tear gas rifles gave the day an “ominous” soundtrack.

The increasingly violent nature of the protests has led to a spike in hospitalizations. According to Hong Kong’s Hospital Authority, 41 people were hospitalized on Saturday, with 5 men still in critical condition as of Sunday evening.

end
CHINA/USA/SUNDAY
the gloves just came off: instead of the supposed “optimism” that the escalating trade war between USA and China may be mellowing, that was quickly dispelled when on 12:01 Sept 1 the tariffs came into effect and one minute later China retaliated
(zerohedge)

US Slaps New Tariffs On China; One Minute Later China Retaliates

The biggest reason for last week’s torrid stock market rally was rekindled “optimism” that the escalating trade war between the US and China may be on the verge of another ceasefire following phone conversations, fake as they may have been, between the US and Chinese side. This translated into speculation that a new round of tariffs increases slated for this weekend may not take place or be delayed.

However, that did not happen, and with no trade deal in sight, at 12:00am on Sunday, the Trump administration slapped tariffs on $112 billion in Chinese imports, the latest escalation in a trade war that’s ground the global economy to a halt, sent Germany into a recession, and given the market an alibi to keep rising because, wait for it, “a trade deal is imminent.”

Only, it isn’t, and 1 minute later, at 12:01am EDT, China retaliated with higher tariffs being rolled out in stages on a total of about $75 billion of U.S. goods. The target list strikes at the heart of Trump’s political support – factories and farms across the Midwest and South at a time when the U.S. economy is showing signs of slowing down.

The 15% U.S. duty hit consumer goods ranging from footwear and apparel to home textiles and certain technology products like the Apple Watch. A separate batch of about $160 billion in Chinese goods – including laptops and cellphones – will be hit with 15% tariffs on Dec. 15.  China, meanwhile, began applying tariffs of 5 to 10% on U.S. goods ranging from frozen sweet corn and pork liver to bicycle tires on Sunday.

The slated 15% U.S. tariffs on approximately $112 billion in Chinese goods may affect consumer prices for products ranging from shoes to sporting goods, the AP noted, and may mark a turning point in how the ongoing trade war directly affects consumers. Nearly 90% of clothing and textiles the U.S. buys from China will also be subjected to tariffs.

Until today, the Trump administration has avoided tariffs on consumer goods – even as the president claimed that only China was paying for tariffs – and consumer spending has remained high amid slowdowns in other economic areas such as investment spending and exports. President Trump’s economic advisors, Larry Kudlow and Peter Navarro, have consistently argued the trade conflict will not or will minimally affect consumers, although the stated reason for the delay in another $160bn in tariffs on consumer goods until Dec. 15 is precisely due to the administration’s fear of a price shock ahead of the holidays.

Beijing has vowed retaliatory tariffs that, combined with the Sunday increases, would cover $75 billion in American products once the Dec. 15 tariffs take effect.

As expected, Chinese state media on Sunday knocked the U.S. for the continuing tariffs, arguing they would hurt American interests as well, according to Reuters.

“The United States should learn how to behave like a responsible global power and stop acting as a ‘school bully,’” the official Xinhua news agency said, Reuters noted.

China has repeatedly slammed US pressure tactics, with signs that its officials are girding for a prolonged confrontation.

“China’s determination to fight against the U.S. economic warmongering has only grown stronger, and its countermeasures more resolute, measured and targeted,” according to a commentary by the official Xinhua News Agency after the tariffs kicked in. One thing that “White House tariff men should learn is that the Chinese economy is strong and resilient enough to resist the pressure brought about in the ongoing trade war.”

And speaking of economic impact, the Congressional Budget Office has projected that by 2020, Trump’s tariffs and trade war will reduce the level of real U.S. GDP by about 0.3% and reduce average real household income by $580. Separately, JPMorgan has estimated that the latest round of tariffs will increase the average cost per U.S. household to $1,000 a year – up from $600 for duties enacted last year. That estimate is in the low range because it was based on a duty rate of 10%, before Trump increased it to 15%.

As Bloomberg reports, about 90% of California-based JLab Audio’s headphones and other wireless products targeted for duties got hit Sunday, possibly hurting holiday sales and forcing a delay in hiring, CEO Win Cramer said. About 40% of the company’s sales come in the fourth quarter, he said.

“If I had hair, I’d be pulling it out,” Cramer said. “I’m really concerned about the financial performance of the business, knowing that if we continue to eat this cost, how much it hurts.”

Well, Cramer, just pass the costs along to the consumer. Supposedly the economy is super strong, and higher inflation is precisely what the Fed wants, so win-win-win, right?

Others were just as vocal in their criticism of Trump’s trade war: Gary Shapiro, president of the Consumer Technology Association, said the Trump administration’s approach of using tariffs to pressure China into a deal has backfired.

“U.S. companies have to spend more resources on constantly changing trade rules and less on innovation, new products and our economic health,” Shapiro said. “This is not how you reach a meaningful trade agreement.”

Among the higher Chinese duties that took effect Sept. 1 include an extra 10% on American pork, beef, and chicken, and various other agricultural goods, while soybeans will get hit with an extra 5% tariff on top of the existing 25%. Starting in mid-December, American wheat, sorghum, and cotton will also get a further 10% tariff. While China imposed a new 5% levy on U.S. crude oil starting from September, there was no new tariff on liquefied natural gas.

The resumption of a suspended extra 25% duty on U.S. cars will resume Dec. 15, with another 10% on top for some vehicles. With existing general duties on autos taken into account, the total tariff charged on U.S.-made cars would be as high as 50%.

* * *

While the Trump administration has dismissed concern about a protracted trade war, business groups are calling for a tariff truce and the resumption of negotiations between the world’s two-largest economies. On Friday, Trump told reporters that face-to-face talks between Chinese and American trade negotiators scheduled for Washington in September are still happening “as of now,” before going to Camp David, the U.S. presidential retreat.

“We’re going to win the fight,” he said.

END

HONG KONG/CHINA/MONDAY

Hong Kong issued its ultimatum to not only protesters but also the West (not to infringe on Chinese sovereignty)

(zerohedge)

China’s Xinhua Issues Ultimatum: “End Is Coming” For Hong Kong Protesters

Following what many have described as the most violent weekend yet after 86 days, or 13 weeks of pro-Democracy protests in Hong Kong, which have led to the arrest of at least 1,117 residents, where the local police is now deploying water cannon in response to “rioters” using petrol bombs, China appears to have finally had enough and on Sunday,Beijing issued a stern ultimatum to not only Hong Kong protesters, but also the West on Sunday, reiterating that it will not tolerate any attempt to undermine Chinese sovereignty over the city.

“The end is coming for those attempting to disrupt Hong Kong and antagonize China,” stated a commentary piece published by the state’s Xinhua News Agency.

According to the Nikkei, the ultimatum was directed at “the rioters and their behind-the-scene supporters” – which should be interpreted as China’s latest accusation of Western meddling, with the article warning that “their attempt to ‘kidnap Hong Kong’ and press the central authorities is just a delusion,” adding, “No concession should be expected concerning such principle issues.”

The commentary said three red lines must not be crossed:

 

  • no one should harm Chinese sovereignty,
  • challenge the power of the central authorities
  • use Hong Kong to infiltrate and undermine the mainland.

“Anyone who dares to infringe upon these bottom lines and interfere in or damage the ‘one country, two systems’ principle will face nothing but failure,” the piece declared. “They should never misjudge the determination and ability of the central government… to safeguard the nation’s sovereignty, security and core interests.”

With the protests attracting global attention, the demonstrators and the authorities are also fighting a PR battle. On Saturday, the Chinese Foreign Ministry took an unusual step of distributing images of alleged protester vandalism to the international press, in an apparent attempt to discredit the movement.

The warning came just hours after tens of thousands of people blocked roads and public transport links to Hong Kong’s airport. The demonstrations, which started in response to a proposed bill that would have allowed extradition to the mainland, have mutated into a broader rejection of Beijing’s growing control over the semi-autonomous city, with China – and even Russia – accusing the CIA of being behind the ongoing protests.

Despite recently linking his view of the trade war with Beijing to the ongoing Hong Kong protests, Trump has refused to sternly condemn the growing possibility of a Chinese crackdown, leading some to suggest that China has cobbled a behind the scenes deal with Trump, whereby it lets the US president give the impression of a modest win in the trade war in exchange for being given a carte blanche to deal with the HK protesters as it sees fit when the time comes, and with the Chinese National Day holiday coming on Oct. 1, it is almost certain that Beijing will have to regain control over Hong Kong in the coming weeks if not days.

END
MONDAY/CHINA/USA
Stocks plunge on Monday due to failure to trade talks. The yuan tumbles to 7.18
(zerohedge)

Yuan, Stocks Plunge On US-China Trade Talks Headlines

Having managed to scramble back up to almost unchanged, headlines confirming that US officials rejected China’s request to delay Sept 1st tariffs and, more importantly, that US and China are now struggling to set a September meeting for trade talks, have sparked a plunge in US equity futures and offshore yuan.

Bloomberg reports that Chinese and U.S. officials are struggling to agree on the schedule for a planned meeting this month to continue trade talks after Washington rejected Beijing’s request to delay tariffs that took effect over the weekend, according to people familiar with the discussions.

The immediate reaction is a kneejerk back to last night’s opening lows…

And yuan is tumbling…

Source: Bloomberg

“China is moving along, we’re doing very well,” Trump told reporters over the weekend.

“We are talking to China, the meeting is still on as you know, in September. That hasn’t changed — they haven’t changed it, we haven’t. We’ll see what happens. But we can’t allow China to rip us off anymore as a country.”

It appears he may have been exaggerating a little.

end
Tuesday
Chance for a trade deal  diminishes by the day.  Now Huawei accuses the Trump  administration of harassing its workers as well as attacking its network
zerohedge)

Huawei Accuses Trump Administration Of Harassing Workers, Attacking Network

Huawei accused the US government on Tuesday of harassing its employees and orchestrating a campaign of cyberattacks to try and infiltrate its internal network, Bloomberg reports. The company made these claims in an official statement, but didn’t say how it got this information.

The accusations are the latest in a back-and-forth conflict between Huawei and the US government, which has been accused of trying to use its influence to stop the Chinese telecoms giant from gaining supremacy in the market for fifth generation wireless gear.

The Trump Administration has notoriously blacklisted the Chinese company, banning American companies from doing business with it (potentially depriving it of critical components like microchips manufactured by Qualcomm). Trump has accused the company of aiding Beijing by carrying out espionage against its clients, making Huawei a “threat to national security.”

In its letter, Huawei accused Washington of using “every tool at its disposal”to try and undermine the company, including ordering law enforcement to harass current and former employees.

“It has been using every tool at its disposal – including both judicial and administrative powers, as well as a host of other unscrupulous means – to disrupt the normal business operations of Huawei and its partners,” the company said. Other measures included “instructing law enforcement to threaten, menace, coerce, entice, and incite both current and former Huawei employees to turn against the company and work for them.”

It added that “no company becomes a global leader in its field through theft.”

“We strongly condemn the malign, concerted effort by the U.S. government to discredit Huawei and curb its leadership position in the industry,” the company said. “No company becomes a global leader in their field through theft.”

Regarded by some as a “bargaining chip” in the US-China trade talks (indeed, President Trump has often treated it like one, most recently promising President Xi the US would back down from its harassment of Huawei as an overture to Beijing, though the next round of talks didn’t pan out so well).

The American military has launched an international campaign to convince its allies to reject Huawei technology in their next generation of wireless networks, warning allies that using Huawei equipment could put the data of citizens and the military at risk.

Though Huawei remains the world leader in 5G, Washington’s efforts have been a hindrance to the company. Huawei’s Billionaire founder, Ren Zhengfei, warned in an internal memo in August his company faced a “live or die moment.”

Huawei’s accusations follow a report by the Wall Street Journal published last week claiming that the DoJ was expanding its investigation into Huawei’s efforts to steal technology from American firms.

4/EUROPEAN AFFAIRS

Mish Shedlock is terrific on his understanding of Brexit.  He is now under the opinion that there is no way that the remainers can stop Brexit.

(Mish Shedlock/Mishtalk)

Brexit Gloves Come Off, “Let The Massacre Begin” Says Eurointelligence

Authored by Mike Shedlock via MishTalk,

Tory rebels are preparing emergency legislation to stop a No Deal Brexit. Such threats increase the odds of No Deal.

“Let the Massacre Begin” saysEurointelligence.

The gloves have come off on both sides. MPs are now plotting a strategy to take total control of the House of Commons, and anti-Brexit Lords have devised a strategy to frustrate a filibuster. The important question is not whether a legislative route is theoretically possible within the time limits – we think it probably is – but whether the rebels have the votes, and if they do, whether such legislation is effective. On the first, we don’t think they do. On the second, we are sure that it is not.

Time Limits

​Regarding time limits, Eurointelligence seems to have come around to my point of view that the real physical limit may be September 9.

Alternatively, both of us noted a chance of everything getting done precisely on September 3. That mathematical chance always existed.

Possibly we are discussing two different things depending on what Eurointelligence means by “legislation”.

The point is moot because even if there is time and there is a sufficient number of votes, Eurointelligence has the view I have stated many times recently “we are sure” that it won’t work.

Arm Twisting

There is a lot of arm-twisting going on in the background – coupled with the implicit threat that a vote in favour of anti-Brexit legislation would most likely trigger elections and the certain deselection of Tory rebels. Tories and Labour MPs are both aware that extension is not a popular option in the country. The April extension brought victory to Nigel Farage’s party in the European elections in May. If parliament votes in favour of a law to extend, it is possible that Johnson would then risk a pre-Brexit election, with the support of Corbyn. We think he will probably do at least as well as Theresa May did two years ago, but with MPs that are committed to his Brexit strategy.

Not Understanding the Law

The default legal position is that Brexit happens on October 31.

The UK cannot unilaterally change that even if Parliament passes a law declaring it illegal.

I have been amused from the beginning about such tactics, have frequently stated such laws are not binding. Eurointelligence comments similarly.

The Remainers’ biggest weakness is a lack of an overall strategy that extends beyond the narrow confines of the House of Commons and its ancient rules. The single biggest misunderstanding in the Brexit process relates to the nature of Art. 50, which is EU law, not UK law. We were reminded of this once again yesterday when we saw an article in Prospect magazine, which compared the five-week prorogation to Hitler’s Reichstag fire. Apart from the fact that it is never a good idea to make casual Hitler comparisons, the comparison reveals a lot about the author’s exaggerated views on the role of the parliament. Art. 50 gives parliaments two specific rights: ratify a withdrawal deal or revoke. Prorogation will not restrict the parliament’s ability to do either of those things.

Johnson could frustrate even a watertight extension bill by threatening to become a rogue member of the European Council, vetoing every decision that is put in front of him. If push comes to shove, the European Council is more likely to side with Johnson against the parliament, than vice versa, unless they have the confidence that the parliament can produce an alternative PM. This is why the rebels really need a new prime minister in place by end-October. Legislation to extend only works if there is at least some collusion from Number 10, as was the case with May.

Three Part Scenario

Once again we return to the one and only scenario that has a chance:

  1. A motion of no confidence that succeeds
  2. Parliament agrees on an alternate caretaker PM
  3. Johnson goes along with it and resigns or loses a legal challenge if he doesn’t.

Even then, there is a high likelihood that Johnson wins the ensuing election.

Polls

YouGov

@YouGov

Latest Westminster voting intention (28-29 Aug)
Con – 33%
Lab – 22%
Lib Dem – 21%
Brexit Party – 12%
Green – 7%
Other – 6%https://yougov.co.uk/topics/politics/articles-reports/2019/08/30/voting-intention-con-33-lab-22-lib-dem-21-brex-12-?utm_source=twitter&utm_medium=website_article&utm_campaign=VI_29_Aug_2019 

View image on Twitter

That margin would likely give Johnson a workable majority.

And I suspect that Johnson would cooperate with the Brexit Party for a huge majority unless Labour and the Liberal Democrats united.

The Brexiteers are united, but Labour wants a referendum for which there is little public support while the Liberal Democrats want to remain.

It’s even a bit more complicated for Labour because Corbyn personally supports a customs union.

This is the huge problem for Labour at the moment.

We Have a Way

Boris Johnson made this claim today: “We Have a Way to Get Brexit Done“.

  1. Boris Johnson has warned MPs that trying to block a no-deal Brexit makes that outcome more likely. Defending his decision to prorogue parliament he said: “The weird thing is, that the more the parliamentarians try to block the no-deal Brexit, the more likely it is that we’ll end up in that situation.”
  2. Johnson also claimed the government had found a way to get Brexit done. He said: “We are in the last stages now of negotiating with our friends about a way to get it done. If we can’t succeed in that negotiation we must come out anyway.”
  3. Ken Clarke has said he “probably would” back Jeremy Corbyn to be caretaker prime minister in order to block a no-deal Brexit. But he added: “I don’t think it’s going to happen, because I must be one of a tiny number of Tories prepared to contemplate that.
  4. Ireland’s deputy premier Simon Coveney insisted that any Brexit deal with the UK must be based on the withdrawal agreement negotiated by Theresa May.

Willing to Fall on Their Own Sword

Read point three carefully. It’s a point I have made repeatedly.

Any Tory who votes against the government will be immediately outed from the party and lose their seat in the next election.

Point four ensures No Deal. I expect Ireland to cave, but I would rather they not.

If Ireland insists on keeping the backstop, there cannot be a deal and that is the best outcome for the UK other than a straight-forward Canada-style tariff deal.

Let’s see how many Tories are willing to fall on their sword. Even a handful might be insufficient because a similar number of Labour MPs are hard Brexiteers.

end

According to Mish Shedlock this has no chance of stopping a hard Brexit

(zerohedge)

 

Rebel MPs Reportedly Attempting To Force Another Brexit Delay

A cross-party group of MPs who are opposed to leaving the EU without a deal on Oct. 31 have settled on their plan to stop PM Boris Johnson from running down the clock: They’re reportedly planning to pass legislation that would force Johnson to seek a three-month delay of Brexit Day, according to Bloomberg.

If the legislation passes, Johnson would either need to secure a new withdrawal agreement with the EU by mid-October, or press the EU27 to grant the UK another extension, something that the bloc would likely support.

Here’s more from BBG:

 

Details of the rebel plans to stop a no-deal Brexit on Oct. 31 by pushing legislation through Parliament are beginning to emerge.

Two people familiar with the draft law told Bloombergit would compel Johnson to seek a three-month delay if he’s been unable to get a new Brexit deal through the House of Commons by Oct. 19 or to persuade lawmakers to back a no-deal departure.

That would set Jan. 31 as the new deadline for Brexit.

This legislative approach to stop Johnson from ‘proroguing is one of the alternatives set forth in a recent Deutsche Bank note outlining the alternative paths for Brexit.

DB assigned this ‘legislative’ route for stopping a ‘no deal’ Brexit combined odds of just 10%. Johnson has repeatedly threatened to call for snap elections if Tory MPs don’t fall into line and support leaving the EU with or without a deal on Oct. 31 (the threat is a cudgel intended to make MPs worried about losing their seats fall into line…it’s tantamount to a game of chicken since snap elections would risk throwing control of Parliament to Labour). Johnson would effectively treat a vote to block no deal as a vote of no confidence in his government.

Goldman Sachs believes there’s still a high likelihood that Johnson calls for a snap election on or around Oct. 17 if the PM “decides this week that a pre-Brexit general election is his best response to a legislative lock on “no deal.” DB sees this as one possible outcome, though they believe the overall odds of Johnson choosing this route are just 5%.

And with good reason. Calling for a snap vote would require 100 opposition MPs to vote with the PM to win the necessary two-thirds majority. Goldman believes they could be swayed if Johnson shows them “concrete evidence” that he’s already sought permission from the EU27 to call for another Article 50 extension.

“Traditionally, the date of a general election is in the gift of the prime minister,” the note said. “In our view, it would be suboptimal for Labour MPs to allow the Conservative government to call an October election that characterizes the Labour front-bench as a Brexit saboteur. That said, the Labour leadership would certainly find itself in a difficult position.”

Meanwhile, a ‘draft legal text’ that would function as Johnson’s latest ‘alternative’ to the Irish Backstop was reportedly discussed by his cabinet on Monday. Irish PM Leo Varadkar, meanwhile, said Monday that he’d be willing to consider some alternatives to the backstop proposed by the Ulster Unionists, which he described as “interesting.”

This begs the question: Is this Europe’s first tentative step toward caving on the widely hated (in the UK, at least) backstop? Johnson has called Europe’s bluff on the backstop. Will Brussels finally stop pretending that it has the legal authority to impose arbitrary physical borders between two sovereign nations?

For now, judging by cable’s demise today…

Source: Bloomberg

…the  market is not buying the new plan as anything but high hopes for the remainers.

end
In a stunning turn of events a Conservative crosses the floor and joins the Liberal Democrats. He was going to lose in the next election anyway ashis riding is furious at him. However this lessens the chance of the hard Brexit
(zerohedge)

In Stunning Twist, UK PM BoJo Loses Parliamentary Majority

In a stunning turn of events, PM Boris Johnson has lost the Tory’s majority in the House of Commons after Bracknell MP Dr. Philip Lee, an anti-Brexit conservative, decided to defect to the Liberal Democrats, according to Bloomberg.

 

Philip Lee

In an act of high drama, Lee said he would quit over the way Boris Johnson was pursuing a “damaging Brexit” that could “put lives at risk. After months of rumors that he was planning on joining another political party, Lee on Tuesday walked across the floor of the Commons during debate and sat with the Lib Dems as Johnson addressed MPs.

Alex Partridge 🚡@alexpartridge87

Here you go: Tory MP Philip Lee literally crosses the floor, follows Lib Dem chief whip Alistair Carmichael and new MP Jane Dodds onto the LD benches, takes a seat next to party leader Jo Swinson

Embedded video

Back in June, Lee suffered a local no-confidence vote, and risked de-selection by his local conservatives at the next general election.

Circling back to Johnson, who has  struggling to hold on to power, even with the support of the Democratic Unionist Party, Johnson no longer has a Parliamentary majority.

Read Philip Lee’s statement full statement:

Sebastian Payne

@SebastianEPayne

🚨 Philip Lee has just crossed the floor of the Commons to join the Liberal Democrats *while* Boris Johnson is speaking 🚨

Statement on his departure from the Tories:

“Over 27 years ago I joined the Conservative & Unionist Party led by Sr John Major. Since 2010 I have had the privilege of representing the Bracknell Constituency. The Party I joined in 1992 is not the Party I am leaving today.

“This Conservative Government is aggressively pursuing a damaging Brexit in unprincipled ways. It is putting lives and livelihoods at risk unnecessarily and it is wantonly endangering the integrity of the United Kingdom. More widely, It is undermining our country’s economy, democracy and role in the world. It is using political manipulation, bullying and lies. And It is doing these things in a deliberate and considered way.

“That is why today I am joining Jo Swinson and the liberal Democrats. I believe the Liberal Democrats are best placed to build the unifying and inspiring political force needed to heal our divisions, unleash our talents, equip us to take the opportunities and overcome the challenges that we face as a society – and leave our country and our world in a better place for the next generations.”

* * *

The pound climbed on the news, presumably because Lee’s defection makes a no-deal Brexit less likely.

end

OH oh!! this does not look good as stupid rebel MP’s successfully seize control of the uK parliament.  However on a general election they will be thrown out.

chances for a Hard Brexit has been diminished and the UK is still handcuffed to the crooked EU

(zerohedge)

Rebel MPs Successfully Seize Control Of UK Parliament, General Election Likely

Having suddenly lost his parliamentary majority earlier today, and having accused opposition leader Jeremy Corbyn of intentionally weakening the UK’s hand in Brexit negotiations, Boris Johnson (BoJo) just suffered – as expected – another setback as the UK parliament voted to seize control of parliamentary business (and negate BoJo’s prorogue).

The ayes win by 328 votes to 301.

Johnson raged:

“Parliament is on the brink of wrecking any deal that we might get.”

Rebel UK lawmakers now aim to pass legislation that would force Johnson to delay Brexit if he hasn’t reached a deal with EU leaders in Brussels (implicitly blocking a no-deal Brexit).

However, BoJo has confirmed he will try to trigger a snap election (the country’s third in just over four years) for Oct. 14 if he lost control of the agenda, and now that he has, we will have to see how the process evolves. Notably, Johnson’s office doubled-down on a threat to expel any Tory who votes against the government tonight – saying even those who abstain will be ejected. However, as one rebel (Dominic Grieve) noted, it’s not going to work:

“If he thinks that the device of withdrawing the whip this evening is going to change my mind or that of my honorable and right honorable friends he has got another thing coming, because it will be treated with the contempt it deserves.”

And as we have seen, it didn’t. The question now is – will BoJo eject all the rebels.

As Bloomberg details, BoJo needs the votes of two-thirds of MPs to trigger an election — 434 of them. His government includes only 311 — even fewer if he starts throwing out rebels, as he’s threatened to do. Making up the difference should be straightforward: The opposition Labour leader Jeremy Corbyn, whose socialist agenda roils financial markets, has been asking for an election since he narrowly lost the last one in June 2017.

Bloomberg’s Ian Wishart notes, however, that the EU fears the unpredictability of an election, and many in European governments fear a Corbyn premiership. But there’s also a school of thought here that an election will strengthen a prime minister’s hand and ultimately that will help conclude a deal in the end.

The pound is stable for now…

Source: Bloomberg

Nigel Farage warns “we are in for the fight of our lives…”

Nigel Farage

@Nigel_Farage

I fear that we are rapidly headed towards a very dark place.

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683 people are talking about this

ECB

Seem that we have a Mutiny of the Bounty with respect to the ECB  as many hawks do not want any more bond purchases which of course would bankrupt Italy in a heartbeat.  The hawks are still in favour of lowering the negative interest rates even more and consensus is that on the Sept 12 meeting they will lower the rates by 16 basis points.

(zerohedge)

Mutiny On The ECBounty: Draghi In Showdown With QE Hawks Ahead Of Critical Meeting

Just like at the Federal Reserve, where voting vocal doves and hawks are split roughly across the middle, with half advocating no rate cuts, and the other half pushing for 2 or more cuts, so the ECB’s uber-dovish Mario Draghi is now facing a potential mutiny on his hands ahead of next Thursday’s critical monetary policy meeting when the ECB is expected to not only cut rates but potentially reactivate its bond purchasing program.

This was first revealed last week when fissures emerged within the ECB’s Governing Council over the way forward as the heads of the German and Dutch central banks, as well as an ECB Executive Board member, said they see no compelling need to resume bond purchases, and the Austrian governor said he’ll probably be critical of more easing. At the same time, the Spanish and Finnish governors said restarting QE must remain an option.

Today, another hawk emerged when Estonian central bank head Madis Muller joined the swelling ranks of officials skeptical over the need for a large stimulus package by saying a resumption of bond purchases now would be disproportionate to economic conditions.

The Estonian signaled he is comfortable with cutting interest rates when the Governing Council meets on Sept. 12, but said “the ECB can’t be hostage to market expectations” which of course is ironic because over the past decade, both the Fed and the ECB have been held hostage to nothing but market expectations. And as a result, banks among which Goldman, Nomura, and ABN Amro expect a new round of quantitative easing to be unveiled next week, while investors are pricing in at least a 10 basis-point cut in the deposit rate.

In an interview with Bloomberg, Muller, 42, said the economic outlook has worsened but there is no recession and the euro area isn’t facing the deflation risk that would normally be a trigger for asset purchases. His resistance to major monetary easing puts him in the same camp as his German colleague Jens Weidmann, Dutchman Klaas Knot, Austria’s Robert Holzmann and Executive Board member Sabine Lautenschlaeger, who have argued the central bank should turn to bond-buying only as a last resort.

“I don’t think we have a strong case for reactivating QE now,” Muller, who joined the Governing Council in June, said in an interview in Tallinn on Tuesday. “In addition to being disproportionate in a situation where there is no deflation risk, in my opinion there is also a concern over ineffectiveness. It just might not be very productive.”

Muller said there is still room to cut rates further below zero, at the same time warning that the ECB should be wary of easing the pain for banks.

As Bloomberg notes, the surprisingly vocal opposition to QE could spell trouble for President Draghi, who has already “forward guided” investors for some form of support for the economy as it’s battered by trade tensions and Brexit, however while a rate cut is certainly expected, the lack of QE will certainly disappoint stock markets.

Then there are the logistical problems: bond purchases were capped at 2.6 trillion euros ($2.9 trillion) at the end of last year, and resuming them could require the ECB to raise self-imposed limits on how much it can buy. The rules are designed to prevent the central bank from breaching laws against financing governments (then again, the ECB has long ago breached all red lines meant to prevent the central bank from engaging in MMT, i.e., printing money to fund governments).

That said, the doves are certainly not mute, with Finnish central banker and legacy uber dove, Olli Rehn arguing recently that officials should deliver a significant stimulus package that overshoots market expectations. Vice President Luis de Guindos said investor bets should be treated with a “pinch of salt,” and Spain’s Pablo Hernandez de Cos said all options should be kept on the table.

That split between doves and hawks makes the position of Bank of France Governor Francois Villeroy de Galhau, monetary chief for the euro zone’s second-largest economy, potentially critical for market expectations over what officials will deliver when they meet on Sept. 12. His silence, Bloomberg notes, has become conspicuous after a week which exposed divisions on the Governing Council over the way forward.

“Villeroy de Galhau might be able to influence the magnitude of the move.” said Anatoli Annenkov, senior economist at Societe Generale in London. “If we have the known hawks, they can be outvoted. If there’s more opposition, that might be a different thing.”

The French governor has until Wednesday evening to make his view public, after which the Governing Council goes into its quiet period. Because of a rota system to smooth decision-making, he doesn’t have a vote at the meeting itself. In practice though, his views will still carry weight and policy makers rarely resort to voting, aiming instead for consensus or unanimity.

Meanwhile, traders are pricing in 16 basis points of easing at next week’s meeting. Some, such as RBC are looking for an immediate 20 basis-point cut in the -0.40% deposit rate with more later in the year. To others this is not enough, and banks including Goldman, Nomura, and ABN Amro expect the announcement of a new round of QE.

However, with such vocal opposition to even more QE – easing which will be self-defeating as it cripples European banks and sends their stock prices to new all time lows, likely triggering the failure of such giants as Deutsche Bank and Commerzbank – it is unclear just how Draghi will negotiate with the mutineers. Then again, he won’t have to worry too long: starting October 31, how the Eurozone will be destroyed – whether with hyperinflation fire and deflationary ice – will no longer be Draghi’s decision, but instead the final destruction of the Eurozone will be delegated to arguably the most clueless person (see Argentina) in the room.

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Syria/USA

This is an escalation of the USA into Syria.  There are reports of major airstrikes on Idlib where a huge number of foreign Al Qaeda jihadists were having a meeting. This is the first major escalation by the USA in quite some time in Syria.

(zerohedge)

Reported US Airstrikes On Idlib Target Meeting Of Top Al-Qaeda Commanders

According to breaking reports the United States has conducted major airstrikes on Idlib in northwest Syria, which came just after a fierce bombardment over the past days by Russian jets on the province.

The unconfirmed local reports say a large series of explosions on Saturday rocked the countryside just outside Idlib city in what is believed to have been US coalition missile strikes on the insurgent group Horas al-Din’s headquarters (Al-Qaeda affiliate in Syria).

The reported strikes may have also targeted top commanders of Hayat Tahrir al-Sham, the powerful al-Qaeda affiliate operating in Syria, formerly the Nusra Front terror group, including most significantly America’smost wanted” terrorist Abu Mohammed al-Jolani.

Guy Elster

@guyelster

US attacks the Jihadist group Horas Al-Din in : reports

View image on Twitter

If confirmed the surprising coalition airstrikes would be hugely significant and an almost unprecedented development, given the White House has for years threatened to attack Syrian government and Russian forces over this very thing — aerial bombardment of Idlib.

According to local sources, eyewitnesses observed up to seven explosions before seeing a massive black plume of smoke rise high on the horizon.

Rojava Network@RojavaNetwork

At least 40+ militants of the Al-Qaida faction “Guardians of Religion Organization” also called “Hurras al-din” including high-ranked leaders/commanders were eliminated in the airstrikes carried out by International Coalition forces.

Embedded video

It’s believed that Horas al-Din and Hayat Tahrir al-Sham may have been holding a high level meeting at a headquarters base.

زمان الوصل

@zamanalwsl

مصادر متقاطعة: طيران التحالف بقيادة أمريكا ينفذ هجوما بالصواريخ غرب الفوعة في ادلب، لم تتأكد أهدافه بعد وحديث عن قصف اجتماع لحراس الدين…

View image on Twitter

According to Beirut-based Al Masdar News, dozens of jihadists have been reported killed in the attack:

The U.S. military reportedly bombed a group of jihadist rebels near the city of Idlib in northern Syria, local activists reported this afternoon [local time].

According to the reports, the U.S. fired cruise missiles at a base belonging to the Hurras Al-Deen group near the northeastern outskirts of Idlib city.

The reports said that dozens of jihadists, most of them foreigners, were killed during the U.S. military’s attack on the Hurras Al-Deen base near Idlib city.

Rojava Network@RojavaNetwork

: At least seven seven explosions, targeting the headquarters of al-qaida “Guardians of Religion Organization” were reported a while ago. Report of International Coalition bombings.

View image on TwitterView image on TwitterView image on Twitter

The US coalition had actually targeted a jihadist base in Idlib province earlier this year, however, Saturday’s airstrikes if confirmed would mark a major escalation in US coalition counter-terror operations in Idlib.

developing…

end
Israel/Iraq
Netanyahu confirms the Israeli attacks on Iraq two weeks ago
(zerohedge)

Netanyahu Confirms Israeli Attacks In Iraq

Recent unprecedented airstrikes on Iraq widely believed to have been carried out by either Israeli drones or stealth jets have been acknowledged by Prime Minister Benjamin Netanyahu, who on Friday gave belated confirmation that the Israeli military has been active there.

He said during a Facebook live stream event to political supports that “I am doing everything to defend our nation’s security from all directions: in the north facing Lebanon and Hezbollah, in Syria facing Iran and Hezbollah, unfortunately in Iraq as well facing Iran. We are surrounded by radical Islam led by Iran.”

 

Image source: The Times of Israel

Over the past six weeks there’s been three significant airstrikes on Iraqi paramilitary forces bases  at least one of which US officials have confirmed Israeli responsibility for. All of them targeted Iran-backed Shia paramilitary units.

The ‘mystery’ attacks, two of which came in August and one in July, have renewed calls from Iraqi parliament for a complete US troops withdrawal from the country, especially given the demise of the Islamic State and now with no official justification for American forces to be there.

he political and diplomatic firestorm resulting from the Israeli strikes and violations of sovereign Iraqi airspace have resulted in an awkward Pentagon statement saying the US had no role or foreknowledge of the attacks; however the statement stopped short of naming Israel or alleging who was behind them.

 

AP image of one of the recent airstrikes on an Iraqi munitions depot and paramilitary base. 

Last week while on a state visit to Kiev, Netanyahu told reporters“Iran has no immunity, anywhere”. He was responding to a specific question about the mystery attacks on Iraq.

“We will act — and currently are acting — against them, wherever it is necessary,” he declared.

end

Sunday/Lebanon/Hezbollah

Hezbollah finally responds to the Israeli shelling two weeks ago. Israel responds in force with missile attacks into Lebanon.No confirmation from the Israeli side on any deaths.

(zerohedge)

Hezbollah’s Response Begins: Israeli Soldiers “Killed And Wounded” In Missile Attack

It begins  Hezbollah issued the following statement amid Israeli confirmation that its forces came under attack Sunday:

At 4:15 PM, Martyrs Hassan Zbeeb and Yasser Daher Group destroyed an IDF military vehicle near the road of the Avivim military base, killing and wounding vehicle’s occupants.

Israeli Defense Forces (IDF) confirm in a statement that several anti-tank missiles were fired from the Lebanese side of the border toward an IDF base and military vehicles. Reports sayIsrael has returned fire, shelling several sites in southern Lebanon.  

Hananya Naftali@HananyaNaftali

: Anti-tank missile fired from Lebanon at Israel in Galilee.

So far no reports of injuries. IDF is reportedly shelling Lebanese sites in retaliation.

View image on TwitterView image on TwitterView image on Twitter

Hezbollah Secretary General Hassan Nasrallah had previously promised a calculated and decisive military response to last week’s Israeli drone attacks on Hezbollah offices in south Beirut, and the separate drone assassination of a PFLP commander in Bekaa valley.

“A number of anti-aircraft missiles were fired from Lebanon at an IDF base and military vehicles in the area,” the IDF said. “There are a number of hits.”

Israel Defense Forces

@IDF

Anti-tank missiles fired from Lebanon hit IDF military positions in northern Israel. We returned fire toward the source of the attack in southern Lebanon.

We will continue to update as the situation develops.

“A short while ago, fires broke out in the Lebanese border area. The fires originate with operations by our forces in the area,” the IDF said in a follow-up statement.

Junaid Abbasi@AbbasiJunaid03

defence forces started artillery shelling towards in retaliation of missile attack
IDF targeted the village of Maroun al-Ras

Embedded video

Civilians on both sides of the border are reportedly taking shelter as more exchange of fire is expected.

Over the past week Hezbollah has reportedly put all of its fighters on “full alert” while Israel has promised swift and severe retaliation for any attack on its forces, further saying it would hold the entire Lebanese state responsible for any “Iran-backed” aggression.

Joyce Karam

@Joyce_Karam

Video footage circulating in of aftermath of operation vs Israel army through Southern border.

You can see smoke. Happened an hour ago:

Embedded video

Hezbollah and Lebanese media sources are claiming Sunday’s strike on an Israeli military vehicle, possibly a tank, “killed and wounded those inside” — something which Israeli officials have yet to confirm or deny.

developing…

end

Iran/USA

It sure looks our famous Iranian tanker is still bound for Syria.  The USA is doing everything possible to disrupt the oil transfer.

(zerohedge)

Iranian Tanker Still Bound For Syria; US Working To “Disrupt” Oil Transfer: Report

As the Iranian oil tanker Adrian Darya 1 still appears to be circling in Mediterranean waters off western Cyprus after it turned away from approaching Turkey’s coast this week, a new Wall Street Journal report says it will ultimately attempt to offload its 2.1 million barrels of oil to Syria after all, in contravention of EU sanctions. 

The WSJ report issued late Friday cites US officials who describe a plan already in place to disrupt any ship-to-ship transfer that would get the oil into Syrian hands — precisely what UK/Gibraltar authorities detained the ship for in the first place, at the request of the United States:

The U.S. State Department is working to disrupt what it sees as the vessel’s Syrian plan, according to a U.S. official. The State Department has been monitoring two other Iranian tankers in the Mediterranean that could pick up the cargo

As we observed before, all the erratic maneuvering and circling by the Adrian Darya 1 in the past two days between Turkey and Cyprus has actually put the vessel in the vicinity of its original suspected destination for which it was accused of busting EU sanctions in the first place  the Syrian port of Baniyas.

As Reuters described based on tracking data, the vessel “made a U-turn on Friday and headed for Turkey’s Iskenderun port – 200 km (124 miles) north of Syria’s Baniyas refinery, the tanker’s suspected original destination.”

TankerTrackers.com, Inc.⚓️🛢@TankerTrackers

Just killing time. They might as well just stop moving and save some fuel.

View image on Twitter

“The vessel’s plan, the people said, is to deliver its crude to smaller tankers near Syria. The new itinerary, with the stated destination of Iskenderun, comes after a failed attempt to offload the cargo near Greece, the people said,” according to the WSJ.

It would likely exit the Mediterranean via the Suez Canal back to Iran, per the report:

The vessel’s current plan could still change if it finds other buyers or if the smaller tankers are unable to link up with the Adrian Darya 1, one person said. After its oil is transferred, the ship plans to return empty to Iran after crossing the Suez Canal, they said.

On Monday an Iranian government spokesman announcedthe oil had been sold to an unnamed buyer while en route across the Mediterranean after it was released from custody in Gibraltar, an overseas possession of the UK. In statements made to reporters in Tehran, spokesman Ali Rabiei, said of the oil’s as yet unmentioned unloading point, “The buyer of the oil decides where its destination is.”

Earlier in the day Friday Turkish Foreign Minister Mevlut Cavusoglu suggested the tanker was headed to “the main port in Lebanon,” as reported by Reuters. If it does end up off Lebanon, there’s a likelihood the oil would still be transferred straight into Syrian government custody.

end

Iran/Tuesday

It appears that the Iranian tanker went dark off the Syrian coast.  In all probability it will unload its oil onto a Syrian ship who will then transport the oil to Tartus.

(zerohedge)

Iranian Tanker Adrian Darya Goes “Dark” Off Syria’s Coast

The Adrian Darya 1 and its 2.1 million barrels of Iranian oil have gone dark, disappearing from satellite tracking off Syria’s coast somewhere between it and Cyprus. According to its last signaling data the vessel is still full.

It’s transponder signal switching off was somewhat to be expected given analysts early this week said it would likely “go dark” within days in order to attempt a ship-to-ship transfer of the oil to ultimately offload it to its buyer, still believed to be Syria.

TankerTrackers.com, Inc.⚓️🛢@TankerTrackers

The has now gone presumably dark off the AIS grid as signals aren’t arriving via terrestrial VHF listening stations or via Satellite-AIS. She’s been offline for over 100 minutes. We’ll wait and see because this sort of thing happens at times. No rumors, thanks.

View image on Twitter

Crucially, there’s still a US seizure warrant out for the Iran-flagged vessel after its release last month from UK/Gibraltar custody over Washington’s objections. The US has since pressured Greece, Lebanon, and Egypt and its vital Suez Canal to not give the tanker any assistance or passage. 

According to Bloomberg its lost signal placed the ship to the west of the Lebanon-Syria border as it was heading north.

Tuesday afternoon the Adrian Darya was identified via satellite about 70km west of the Syrian port of Tartus, still in international waters. Tankers believed owned by Syria or Syria-connected entities were also observed in the vicinity, possibly preparing to receive the Iranian oil.

 

The Iranian tanker’s erratic path through the Mediterranean over the past days, via Bloomberg

The Unites States says the tanker is controlled by the Iranian Revolutionary Guards and thus deems any state’s interaction with it support of a formally designated terrorist group.

Days ago US officials cited “reliable information” the vessel still intended to transport its oil to Syria in defiance of EU and US sanctions.

“We have reliable information that the tanker is underway and headed to Tartus, Syria,” US Secretary of State Mike Pompeo said in a tweet on Friday.

By all current appearances this appears accurate, however, the question remains over whether the US or its allies are actually going to do anything about it.

IRAN/MONDAY

Iran offers the EU two options to keep the phony nuclear deal in place. They both do not have a chance:

(Irina Slav/OilPrice.com)

Iran Offers EU Two Options To Keep Nuclear Deal In Place

Authored by Irina Slav via OilPrice.com,

Iran has offered the European Union two options to keep the nuclear deal alive as the EU keeps failing to find a way to support the Iranian economy amid U.S. sanctions.

Bloomberg reports the options include either asking the United States to reinstate sanction waivers for the countries that import Iranian crude or providing a credit line to Tehran. The offer was made public by Iran’s Deputy Foreign Minister, Abbas Araghchi.

Araghchi said Iran’s President Hassan Rouhani had shared the options with his French counterpart Emmanuel Macron during a recent series of phone conversations.

“What Mr. Rouhani has told Macron is that if Europe wants to preserve the nuclear deal then they must establish our ability to sell oil,” the Deputy Foreign Minister said.

“There are two options or solutions — one is for them to go to the Americans and get waivers again for oil buyers so they can buy oil from Iran, or if they cannot do that, they themselves should buy that level of oil, using a credit line.”

The first option may be the less likely to succeed but the second one has a chance after President Trump said he was not against the idea of Europe providing Iran with “a letter of credit”, backed by oil, that would allow the country to meet pending payment obligations.

France’s President has spearheaded efforts to keep the Iran nuclear deal alive and last weekend met with Iran’s Foreign Minister Mohammad Javad Zarif, during the G7 summit. Zarif’s arrival at the summit surprised the United States.

Three unnamed sources told Reuters at the time that Tehran would demand increased oil exports if it was to discuss the nuclear deal.

“As a goodwill gesture and a step toward creating space for negotiations, we have responded to France’s proposal. We want to export 700,000 bpd of oil and get paid in cash … and that is just for a start. It should reach to 1.5 million bpd,” one of the sources said.

END

end

France presses Washington o a proposal for a 15 billion dollar line of credit,  Iran is bankrupt and badly needs the money as well as sell its oil.  The USA if it agrees must have guarantees that (ran stops financing its satellites like Hezbollah and Hamas

(zerohedge)

France Presses Washington On $15BN Iran Credit Line To Save Nuclear Deal

As first unveiled on the sidelines of the recent G7 summit in France, President Macron is making a last ditch effort to create conditions to bring Tehran and Washington back to the nuclear negotiating table by offering Iran a $15 billion credit line as an incentive to come back into compliance with the nuclear deal.

Iran’s top diplomat, FM Zarif, was said to be open to it when it was first raised in Biarritz, France over a week ago — but the plan’s progress is now conditioned on whether the White House rejects it.

Though this past week Iranian leaders again threatened to further breach uranium enrichment caps set by the 2015 JCPOA, Iran responded positively to the new trade mechanism involving the $15 billion credit line issued to the end of the year to help it conduct business.

 

Image source: AP/Irish Examiner

The proposal comes after Trump at the G7 publicly expressed rare openness to sitting down with Iran, saying of Macron’s efforts to cool tensions toward dialogue“If the circumstances were correct or right, I would certainly agree with that.” Trump cited “good feelings” about Iran and its desire to escape currently escalating tensions.

Reuters reports an Iranian delegation is in Paris negotiating with French officials over the details which would provide immediate sanctions relief. A source privy to the negotiations told Reuters, “The question is to know whether we can reach this $15 billion) level, secondly who will finance it, and thirdly we need to get at the very least the tacit approval of the United States. We still don’t know what the U.S. position is.”

The Iranians appear to have fully endorsed the deal, with an Iranian official saying, “France has offered the credit line of $15 billion but we are still discussing it. It should be guaranteed that we will have access to this amount freely and also Iran should be able to sell its oil and have access to its money.”

“President Macron is trying hard to resolve the issue and help to save the deal … and we have overcome some issues and gaps narrowed but still there are remaining issues,” the Iranian official said further.

Trump has reportedly softened toward the idea of a special credit line or alternative mechanisms which bring Iran back in conformity with enrichment limits; however, he’s said to be firm on not walking back sanctions.

It’s likely Washington’s decision will be known by the end of this week, given French Finance Minister Bruno Le Maire is expected in Washington Tuesday to discuss the new mechanisms.

end

Rouhani throws cold water on the French proposal saying that there is not going to be a bilateral talks with the uSA

He threatens to further breath nuclear limits  which will annoy France.  Then after a failed launch of a rocket on Saturday, Trump initiats further sanctions against Iran’s space agency

(zerohedge)

Rouhani Vows To Further Breach Nuclear Limits As US Sanctions Iran’s Space Agency

Iran’s President Hassan Rouhani said on Tuesday he’s ruled out any bilateral talks with the US. In an address to Iranian parliament he said the country is opposed to such negotiations in principle, given it was the Trump White House that pulled out of the 2015 JCPOA and tore up its prior commitments.

Crucially he also affirmed that Iran is moving forward with reducing its own commitments to the terms of the nuclear deal for the third time “in the coming days”. Iran this summer blew past uranium enrichment levels previously agreed to under the terms of the JCPOA, citing crippling and aggressive US-led sanctions. Semi-official Tasnim News Agency said Iran was giving the world until Thursday for the three major European parties to the JCPOA – the UK, France, and Germany – to honor its commitments.

Rouhani responded to widespread media reports in the wake of the G7 summit in France that Iran and the Trump administration could soon hold direct talks, and after Trump himself last week signaled openness to resumption of negotiations:

“Maybe there has been a misunderstanding. We’ve said it several times and we repeat it – there has been no decision to hold bilateral talks with the US,” said Rouhani.

 

Iranian President Hassan Rouhani addresses Parliament in Tehran, Iran, Tuesday, via EFE/EPA.

In principle, we don’t want bilateral talks with the United States,” he added. “If the United States lifts all sanctions, it would be possible to talk (with them) during 5+1 meetings as in the past,” he said.

This doesn’t appear at all likely, given the US onTuesday afternoon issued fresh sanctions targeting Iran’s space agency, space research center and astronautics research institute, according a statement on the US Treasury website. As the Associated Press summarized of the newly unveiled sanctions:

The sanctions announced by the State and Treasury departments targeting the agency and two of its affiliates follow the explosion Thursday of a rocket at Iran’s Imam Khomeini Space Center in what an Iranian official said was a technical malfunction during a test. The explosion prompted President Donald Trump to tweet a surveillance image depicting the apparent aftermath of the incident and declare that the U.S. had nothing to do with what transpired at the launch site.

Dan Williams

@DanWilliams

U.S. imposes sanctions on the Iran space agency, Iran space research center and astronautics research institute (@Reuters) https://twitter.com/DanWilliams/status/1168947918700797956 

Dan Williams

@DanWilliams

U.S. issues fresh Iran-related sanctions – Treasury website (@Reuters)

18 people are talking about this

But Rouhani also seemed to give a positive nod to French efforts at establishing a $15 billion line of credit in return for Tehran reversing its current uranium enrichment levels: “If Europeans can purchase our oil or pre-purchase it and we can have access to our money, that will ease the situation and we can fully implement the deal … otherwise, we will take our third step,” he warned.

President Macron is making a last ditch effort to create conditions to bring Tehran and Washington back to the nuclear negotiating table by offering Iran a $15 billion credit line and alternative trade mechanism as an incentive to come back into compliance with the nuclear deal.

Iran’s top diplomat, FM Zarif, was said to be open to it when it was first raised in Biarritz, France over a week ago — but the plan’s progress is now conditioned on whether the White House rejects it.

A US decision is expected in the coming days. Rouhani’s address seemed set up as a warning related to Macron’s initiative that puts the ball firmly in Washington’s court.

6.Global Issues

 

7. OIL ISSUES

As promised to you on several occasions, the shale industry is in big trouble not so much because of low oil prices but because of huge debt.  Companies are having trouble rolling over their debt and we have already major bankruptcies filed last month

 

(zerohedge)

“A Murderer’s Row”: Oil And Gas Bankruptcies To Accelerate As $137 Billion Debt Matures Over Next Two Years

Oil and gas companies are facing an onslaught of bankruptcies as the “shale revolution” appears to be coming to an unceremonious end, at least on Wall Street, according to the Wall Street Journal.

Companies like Sanchez Energy Corp., Halcon Resources Corp. and 26 other oil and gas producers have all filed for bankruptcy this year, already matching the 28 industry bankruptcies from all of 2018.The number is expected to rise as debt maturities for those looking to cash in on the shale revolution and make bets on higher oil prices years ago are now looming.

5.7% of all energy companies with junk rated bonds are defaulting as of August, the highest level since 2017. The metric is “considered a key indicator of the industry’s financial stress.”

The defaults are on the rise as companies struggle to service debt, bring in new money and refinance existing debt. The once-darling shale business model has been under significant scrutiny from Wall Street over the last 18 months, adding to the headwinds for many companies.

Investor interest has faded after years of meager returns while, at the same time, companies struggle to meet their cost of capital with oil prices below $60/barrel.

Private companies and smaller drillers have felt the most pain thus far. These companies “collectively generate a large portion of U.S. oil,” and their distress is indicative of wider distress throughout U.S. shale.

Patrick Hughes, a partner at Haynes & Boone said: “They were able to hang in there for a while, but now their debt levels are just too high and they’re going to have to take their medicine.” 

Halcon filed for bankruptcy in August, just three years after it last filed for bankruptcy, due to a production slowdown in West Texas and higher than expected processing costs. The company’s chief restructuring officer (which we guess is probably becoming somewhat of a permanent position after filing bankruptcy twice in 3 years) said the bankruptcy was partly a result of lenders cutting the company’s credit line by $50 million earlier this year after it violated its debt covenants due to too much leverage.

Sanchez Energy also filed for bankruptcy in August, citing falling energy prices and a dispute with Blackstone over assets that were jointly acquired from Anadarko Petroleum in 2017. Blackstone said Sanchez defaulted on a joint deal to develop the assets and, as a result, Blackstone was entitled to take them over.

Other shale drillers, like EP Energy Corp., have also missed debt payments. EP missed a $40 million interest payment due August 15 as it continued to struggle from the debt piled atop of it as a result of an Apollo-led buyout in 2012.

As of Q2 2019, the company had debt to the tune of 6x its EBITDA. The company has said it has to mid-September to make the payment and is considering a “range of options”, including bankruptcy, to deal with the issue.

Lately, the slew of bankruptcies isn’t so much a result of low crude prices, either. In 2016, when crude prices were below $30/barrel, 70 U.S. and Canadian oil and gas companies filed for bankruptcy. Crude prices have nearly doubled since then. Instead, it’s more a result of debt – and the many companies who took on debt after the 2016 slump all face upcoming maturities over the next four years. While just $9 billion is set to mature throughout the remainder of 2019, about $137 billion will be due between 2020 and 2022, according to S&P.

And debt of companies like Alta Mesa Resources remains as risky as it gets. After being handed a $1 billion “blank check” to invest in shale, the tide has turned on the company in a big way.

Paul Harvey, credit analyst at S&P, said: A lot of companies are highly levered and facing maturities on their debt that I like to call a murderer’s row, maturities are coming year after year.” 

According to S&P, the lowest possible yield an investor can earn on a bond without the issuer defaulting stands at 7%, as of July, in oil and gas. That metric is about 4% for the overall market. For junk bonds, such yields are almost 13%. Energy companies have predictably backed away from the high yield market as the cost of capital has increased, with high yield issuances falling 40% from the same period a year earlier. Overall high yield issuances were up 32%.

Tim Polvado, the head of U.S. energy for the Paris-based bank Natixis SA concluded: “Any available capital structure is going to be more expensive than it was a year ago.”

As is the case in many bankruptcies, equity holders could be “all but wiped” in many of these shale companies, while bondholders jockey for seniority and priority as the likely new owners.

END

8 EMERGING MARKET ISSUES

Saturday/Argentina

Argentina has been losing foreign exchange dollars by the bucketful.  The government is now imposing currency controls trying to stem the losses of dollars which are badly need in the country. No matter which way you look at it, the Peso is doomed

(courtesy zerohedge)

 

Argentina Imposes Currency Controls

Late on Friday, when we noted that according to Argentina’s next president, Alberto Fernandez, the country’s upcoming bond default, its 9th since declaring Independence, was the IMF’s fault as much as that of outgoing president Mauricio Macri, we pointed out that Buenos Aires has a more pressing problem: running out of money.

Specifically, we noted that “the central bank has spent close to $1.5 billion to meet rising demand for dollars since mid-August, or about 10% of its net foreign-currency reserves. Worse, according to calculations by First Geneva Capital Partners, Argentina will drain its net foreign currency reserves within the month if it continues spending dollars at the current rate.” So, we concluded, “Buenos Aires has a choice: watch as its currency becomes the next Bolivar, or run out of dollars in days.”

Two days later Buenos Aires, still not quite sure which path to pursue, did the only thing it could do to avoid a full-blown financial collapse: capital controls, which “oddly enough” appears to be a now standard development almost every time the IMF comes in to “rescue” an insolvent nation. Incidentally, without IMF loans, Argentina would have run out of reserve cash by now.

As Reuters reports, citing a decree published in an official bulletin on Sunday, the Argentine government authorized the central bank to restrict currency purchases. The decree includes major exporters, which will need permission from the central bank to access the FX market to purchase foreign currency and make transfers abroad. The central bank will also set a deadline for exporters to repatriate foreign currency.

Things went from terrible to even worse last week, when Argentina defaulted on creditors to local short-term debt on Wednesday, at which point Argentina also said it will ask holders of $50 billion of longer-term debt to accept a “voluntary reprofiling.” It also plans to renegotiate payments on nearly $50 billion it has borrowed from the International Monetary Fund.

Argentina’s peso disintegrated last month after primary election results showed the market-friendly government has little chance of retaining power in October’s polls, sending interest rates soaring as the central bank failed to roll over debt, resulting in a decision to delay payments on $7 billion of bills coming due this year.

As the central bank tried to shore up the currency, foreign currency reserves tumbled, losing $3 billion on Thursday and Friday alone.

The opposition – which has called for currency controls, saying the government was in “virtual default” – got its wish.

Which brings us to the two outstanding questions now that Argentina is not only in default but has locked itself out of global capital markets: i) whether Emerging Market investors, such as Franklin’s Michael Hasenstab, who are getting margined out of billions in underwater positions, will be forced to liquidate other EM exposure, leading to a domino effect, and a deluge of emerging market selling; and ii) whether the IMF will cut its billions in losses, and at last check it was just under $50 billion in Argentina loan handouts…

… or will it, as the IIF’s Robin Brooks’ contends, agreed to double down and inject even more in hopes that this time, its bailout of Argentina will work.

Robin Brooks@RobinBrooksIIF

Our long-standing view is that the IMF program was too small to begin with, given Argentina’s external borrowing spree in 2016-18 (red). Question now is how much of an effective up-sizing of the program re-profiling represents. Follow @SergiLanauIIF @mcastellano44 for our views.

View image on Twitter

Considering that the biggest source of IMF funding are US taxpayers…

… perhaps it is they who should finally have a say if the IMF should be allowed to continue its disastrous track record with Argentina.

end

Monday Argentina

Strange  The Argentina Peso temporarily rises amid zero liquidity.  We have real problems in Argentina as they are finding it difficult to find dollars

(zerohedge)

Argentine Peso Soars Amid Zero Liquidity Despite “Very Concerning” Capital Controls Plan

Thanks to zero liquidity (US holiday) and some repo’d reserves, the Argentine Peso has exploded higher this morning (biggest jump in over 17 years) after unveiling a new capital control plan over the weekend to stall its collapsing…everything.

As Bloomberg’s Jorgelina do Rosario and Philip Sanders note, Sunday’s move shows how the crisis has moved beyond international bond investors to affect ordinary Argentines, who may choose to save in dollar bank accounts.

In the aftermath of the Aug. 11 primary elections that showed Fernandez on course for victory in October, Argentine depositors withdrew hundreds of millions of dollars from their accounts – cash the central bank counts as part of its gross foreign reserves. These withdrawals, coupled with policy makers’ sale of dollars to shore up the peso, has led to a dramatic fall in the country’s stock of reserves.

Around $3 billion drained out of the foreign-currency reserves on Thursday and Friday alone after the government changed the terms for its short-term debt. The country risks exhausting its net reserves, which stand at under $15 billion, within weeks if it keeps losing money at this pace.

 

Source: Bloomberg

Having lost so much last week trying to stabilize the currency, we wonder how much today’s move took…

Source: Bloomberg

But while the currency is panic-bid, bonds are getting dumped… The 2022 bonds are down another 5 points in early trading!

Source: Bloomberg

The return of populism in Argentina is scaring the “dickens out of emerging-market investors,” said Stephen Innes, an Asia-Pacific market strategist at AxiTrader in Bangkok.

If the resurgent currency surprises you, you’re not alone as insiders tell us that black-market USDARS is trading around 64/USD – a new collapse to a new record low.

end

 

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

Euro/USA 1.10936 DOWN .0028 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems ///ITALIAN CHAOS/HONG KONG CHAOS/ /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES /RED

 

 

USA/JAPAN YEN 106.13 DOWN 0.070 (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 1.2039   DOWN   0.0025  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO OCT 31/2019/ MOST LIKELY A HARD BREXIT//

USA/CAN 1.3361 UP .0027 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 FELL BY 28 basis points, trading now ABOVE the important 1.08 level FALLING to 1.0936 Last night Shanghai COMPOSITE CLOSED UP 6.05 POINTS OR 0.21% 

 

//Hang Sang CLOSED DOWN 98.70 POINTS OR 0.39%

/AUSTRALIA CLOSED DOWN 0,06%// EUROPEAN BOURSES ALL RED

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL RED 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 98.70 POINTS OR 0.39%

 

 

/SHANGHAI CLOSED UP 6.05 POINTS OR 0.21%

 

Australia BOURSE CLOSED DOWN. 06% 

 

 

Nikkei (Japan) CLOSED UP 4.97  POINTS OR 0.02%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1530.95

silver:$18.49-

Early TUESDAY morning USA 10 year bond yield: 1.49% !!! DOWN 1 IN POINTS from FRIDAY’S night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

 

The 30 yr bond yield 1.95 DOWN 1  IN BASIS POINTS from FRIDAY night.

USA dollar index early TUESDAY morning: 99.25 UP 33 CENT(S) from  FRIDAY’s close.

This ends early morning numbers TUESDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx6

And now your closing TUESDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 0.13% DOWN 1 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: -.28%  DOWN 1   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.11%//DOWN 1 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD:0,88 DOWN 2 points in basis points yield from yesterday./

 

 

the Italian 10 yr bond yield is trading 77 points higher than Spain.

 

GERMAN 10 YR BOND YIELD: FALLS TO –.71% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 1.59% 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 TUESDAY

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

Euro/USA 1.0965  UP     .0004 or 4 basis points

USA/Japan: 105.89 DOWN .300 OR YEN UP 30  basis points/

Great Britain/USA 1.2085 UP .0020 POUND UP 20  BASIS POINTS)

Canadian dollar DOWN 2 basis points to 1.3334

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY: AT 7.1789    ON SHORE  (DOWN)..GETTING DANGEROUS

THE USA/YUAN OFFSHORE:  7.1805  (YUAN DOWN)..GETTING REALLY DANGEROUS

TURKISH LIRA:  5.7313 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield closed at -.28%

 

Your closing 10 yr US bond yield DOWN  5 IN basis points from FRIDAY at 1.45 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 1.94 DOWN 3 in basis points on the day

Your closing USA dollar index, 99.00 UP 9  CENT(S) ON THE DAY/1.00 PM/

 

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

London: CLOSED DOWN 7.18  0.18%

German Dax :  CLOSED DOWN 42.92 POINTS OR .36%

 

Paris Cac CLOSED DOWN 26.97 POINTS 0.49%

Spain IBEX CLOSED DOWN 6.30 POINTS or 0.07%

Italian MIB: CLOSED DOWN 52.75 POINTS OR (0.25)

 

 

 

 

WTI Oil price; 53.61 12:00  PM  EST

Brent Oil: 57.72 12:00 EST

USA /RUSSIAN /   RUBLE RISES:    67.05 THE CROSS HIGHER BY 0.26 RUBLES/DOLLAR (RUBLE LOWER BY 26 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS  TO –.71 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 :  53.94//

 

 

BRENT :  58.26

USA 10 YR BOND YIELD: … 1.48… DOWN 2 BASIS PTS

 

 

 

USA 30 YR BOND YIELD: 1.97.. FLAT

 

 

 

 

 

EURO/USA 1.0969 ( UP 5   BASIS POINTS)

USA/JAPANESE YEN:106.05 DOWN .158 (YEN UP 16 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 98.97 UP 6 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.2081 UP 17  POINTS

 

the Turkish lira close: 5.7268

 

 

the Russian rouble 66.78   DOWN 0.02 Roubles against the uSA dollar.( DOWN 2 BASIS POINTS)

Canadian dollar:  1.3340 DOWN 6 BASIS pts

USA/CHINESE YUAN (CNY) :  7.1789  (ONSHORE)/

 

 

USA/CHINESE YUAN(CNH): 7.1772 (OFFSHORE)

German 10 yr bund yield: –.72%

 

 

The Dow closed DOWN 285.26 POINTS OR 1.08%

 

NASDAQ closed DOWN 88.72 POINTS OR 1.11%

 


VOLATILITY INDEX:  19.68 CLOSED UP .70

LIBOR 3 MONTH DURATION: 2.132%//libor dropping like a stone

 

USA trading today in Graph Form

Bonds, Bitcoin, & Bullion Bid As Manufacturing Slump Sparks Stocks, Commodities Dump

Global Manufacturing massacre catches up to ‘Murica and stocks and bond yields tumble (after markets were seemingly surprised that Trump and Xi shot tariffs at each other – as they said they would – over the weekend)…

China was largely flat overnight, after a strong Monday…

Source: Bloomberg

Europe slipped into the red overnight with only Italy holding Monday’s gains…

Source: Bloomberg

 

On the day, all US major indices were red (with Small Caps and Trannies underperforming)…

 

NOTE – the initial down opening was weakness from trade headlines and the second leg down was the ISM manufacturing contraction.

 

Stocks have erased all of last week’s “fake” phone call with China spike and are back in the red from Trump’s tariff tantrum

 

All the major US equity indices are back below their 100DMAs (Small Caps < 200DMA)..

 

A Quintuple Top?

Cyclicals dominated the market moves today…

 

Source: Bloomberg

The market implied odds of a US-China trade deal have tumbled back towards zero…

Source: Bloomberg

Are bonds and stocks starting to recouple?

Source: Bloomberg

Treasury yields tumbled on the day (with the short-end outperforming)…

Source: Bloomberg

30Y Yields briefly topped 2.00% overnight but rejected that quickly to end the day notably lower…

Source: Bloomberg

The yield curve (2s10s) steepened back out of inversion (but of course 3m10Y – the more accurate indicator – remains dramatically inverted)…

Source: Bloomberg

After 6 straight days higher, the dollar index slipped lower today…

Source: Bloomberg

Yuan rallied inatrday, erasing last night’s tumble…

Source: Bloomberg

EUR rallied after ECB’s Mueller said there was no strong case to resume bond-buying…

Source: Bloomberg

Cable tumbled overnight (below $1.20 for first time since 2017) then rallied back into the green as BoJo lost his govt majority on Lee’s defection…

Source: Bloomberg

Cryptos rallied today, extending yesterday’s gains, helped by news that a Bitcoin ETF is finally coming…

Source: Bloomberg

With Bitcoin spiking back up to almost $10,800…

Source: Bloomberg

Very mixed picture in commodity-land as crude and copper dropped and PMs popped (led by Silver)…

Source: Bloomberg

Spot gold prices spiked up to $1550…

Source: Bloomberg

But it was silver that really exploded (2nd biggest spike since July 2016, Brexit vote)…

Source: Bloomberg

Crashing the gold/silver ration back to its lowest since Aug 2018…

Source: Bloomberg

WTI Crude plunged 3% intraday, back below $54, will it pull back into the recent range?

 

Finally, we note that it’s not like the ISM Manufacturing signal should have been unexpected as Trucking indicators and Treasury yields have been signaling this was imminent for weeks…

Source: Bloomberg

And as Bloomberg’s Eddie van der Walt notes, the copper/gold ratio is extending the year’s declines, turning its back on the Trump-trade era and now focusing lingering economic risks, with 2016 lows coming into play.

Source: Bloomberg

It now takes only 3.6 ounces of gold to buy a ton of copper, that’s down from more than 5 ounces earlier this year. Changes in the ratio between the two metals are a useful barometer of investor risk appetite, as the one acts as a haven and the other is an input into industrial applications.

end

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

MARKET TRADING//USA

a)Market trading/SUNDAY NIGHT/USA

Gold Spikes, Yuan & Futures Plunge As Asia Opens After Trade War Tit-For-Tat

Somehow, FX and equity futures traders are shocked that the tariffs that Trump had said would hit today, have actually gone into effect – and China has retaliated (just as it said it would)...

Offshore Yuan has erased all of Thursday’s panic-buying relief idiocy…

Source: Bloomberg

 

Gold is spiking..

Source: Bloomberg

And Futures are getting hammered (Dow futs were down over 300 points before bouncing)…

So, all that short-squeezing, low-volume exuberance has gone (for now).

END

 

b)MARKET TRADING/futures Monday

US Futures Storm Higher, Erasing All Post-Tariff Losses As Dollar Soars

After futures tumbled sharply lower when they re-opened for trading on Sunday night, following a weekend in which the US and China did in fact activate a fresh round of reciprocal tariffs contrary to the market’s whisper expectations for a delay, stocks have staged another remarkable comeback with futures now virtually unchanged from their Friday close…

… as Europe’s Stoxx 600 Index rose 0.7% to session highs as of noon London time, climbing to the highest level in a month and extending its winning streak to a third session, as health care and utility stocks are the best sector performers, each rising 1.2%, closely followed by telecoms and financial services.

Earlier in the session, Asian stocks were mixed, with Singapore and the Philippines leading declines. The Topix slipped 0.4%, dragged down by Daiichi Sankyo and SoftBank Group. The Bank of Japan cut bond purchases for a second time in two days in a bid to stop benchmark yields from falling to record lows. Meanwhile, despite the escalation in trade war, the Shanghai Composite Index advanced 1.3%, with Ping An Insurance Group and China Shenhua Energy among the biggest boosts. The catalyst for the Chinese rebound: the Chinese government said it will maintain “reasonably ample” liquidity and “reasonable growth” in aggregate financing, while the latest monthly Caixin PMI gave investors hope that China’s manufacturing sector may finally be bottoming after it printed at 50.4, its first expansion in two months, and beating expectations of a 49.8 print, even as the official NBS Mfg PMI dropped again, earlier in the weekend, sliding to 49.5, and just barely missing expectations. Needless to say, the algos focused on the good news, and ignored the bad.

 

As Goldman wrote, “in contrast to the fall in NBS manufacturing PMI in August, the Caixin manufacturing PMI implied stronger growth momentum in the manufacturing sector” even though according to its analysis, the “NBS manufacturing PMI in general has a higher correlation with industrial production growth, compared with the Caixin manufacturing PMI (although both PMIs’ correlation with industrial production appeared to have weakened in recent months). The Caixin manufacturing PMI appeared to be more closely correlated with concurrent export growth.” As a result, “the better August reading could also reflect support from trade front-loading ahead of higher tariffs on exports to the US”, according to Goldman. Not only that, but the production shutdown ahead of October 1st National day might have also front-loaded production activities to August. If so, don’t tell that to the algos, who used the Caixin print as the basis for what has now turned into a worldwide rally, even though for yet another day the yuan refused to rebound and the jaws between the Chinese currency and equity futures have continued to grow.

Naturally, with US markets closed for labor day holiday, volumes are dismal, and US equity markets and cash Treasuries won’t trade even though treasury futures edged lower while the Bloomberg dollar rose for the sixth consecutive day, hitting a fresh two year high (as a reminder, the broad trade-weighted dollar remains at all time highs).

“Broad market activity and trading volume are likely to be somewhat muted today,” Simon Ballard, a macro strategist at First Abu Dhabi Bank, wrote in a note. While it should mean a quiet start to the week, “the net cautious tone seems set to dominate investor sentiment,” he said.

In the U.K., the pound fell and gilts rose a day before Parliament re-convenes in a potential showdown over a possible no-deal Brexit, while a barometer of the country’s manufacturing dipped to its lowest level in seven years.

As we enter the historically most volatile month of the year, investors are still reeling from the August rollercoaster that saw a collapse in Treasury yields and declines for equities globally which however were largely recovered on hope that a trade deal will emerge (narrator: it won’t).

Meanwhile, in commodities, crude oil struggled for traction after its first monthly drop since May amid fears that the fading global economic growth will hurt fuel demand. Also keeping a lid on sentiment are demonstrations in Hong Kong, where a senior official said he won’t rule out imposing an emergency law in a bid to wrestle back control after protesters caused major disruptions to the city’s international airport over the weekend.

Elsewhere, America’s southeastern coast braced for Hurricane Dorian, tied as the most powerful storm to hit land anywhere in the Atlantic, after it inflicted colossal damage to the Bahamas. Also notably over the weekend, Argentina’s troubled government imposed currency controls to halt the flight of dollars out of the country as it teeters on the brink of default. Turkey’s lira rose after data showed the economy shrank less than expected in the second quarter.

Top Overnight Headlines from Bloomberg

  • Trump administration slapped tariffs on $110 billion of Chinese imports Sunday, marking the latest escalation in a trade war. China’s retaliated with higher tariffs being rolled out in stages on a total of about $75 billion of U.S. goods
  • Argentina’s government imposed capital controls to halt a slump in FX reserves and the peso that has pushed the country to the brink of default
  • Boris Johnson’s summer is over. The week that could determine how long he remains prime minister — and how or whether Britain leaves the European Union — is about to begin
  • Bank of Japan cut bond purchases for a second time in two days as the benchmark yield hovers near record lows. The central bank offered to buy 140 billion yen of 10-to-25y securities, down from 160 billion yen at its prior operation
  • Italy’s premier-designate Giuseppe Conte said he plans to present a list of key ministers and a new government program to President Sergio Mattarella between Tuesday and Wednesday as he seeks to hold together a ruling coalition
  • Angela Merkel’s ruling coalition stemmed a surge by Germany’s far-right populists in two elections in the former communist east. The anti-immigration Alternative for Germany trailed the incumbent Social Democrats by 2 to 3 percentage points in the state of Brandenburg, according to TV projections
  • Riot police patrolled key subway stations on Monday morning ahead of a planned strike that threatens to disrupt transportation in Hong Kong after another weekend of chaos left travelers stranded at the airport

Major European indices are firmer [Euro Stoxx 50 +0.4%], as markets initially struggled for clear direction, after the downbeat Asia-Pac session as the additional US levy on Chinese goods and China’s retaliatory tariffs came into effect alongside today’s US market holiday; before taking a positive line. Notably, the FTSE 100 (+1.5%) is outperforming its peers, as exporters benefit from the subdued Sterling due to the ongoing Brexit narrative over PM Johnson’s prorogation and the increasing likelihood of a no-deal outcome, whilst downbeat UK manufacturing PMI further weighed on the currency. Sectors opened the session all in the green but have since deteriorated somewhat to a mixed performance. In terms of individual movers, AstraZeneca (+3.3%) are topping the FTSE 100 after positive Phase III trial results; just below the Co. on the Stoxx 600 this morning is Adecco (+2.2%) after being upgraded to outperform from neutral at Credit Suisse. At the other end of the spectrum, Thyssenkrupp (-0.8%) shares are lower ahead of Wednesday’s DAX 30 reshuffle, during which the Co. are expected to be demoted from the index and German listed MTU Aero Engines (+2.1%) is seen as a strong contender for the empty spot.

In FX, sterling was already looking shaky in the run up to the UK manufacturing PMI amidst reports of RHS demand in Eur/Gbp for the 9.00 am fix (perhaps residual or belated month end orders), with Cable slipping towards and just through 1.2100 amidst heightened jitters ahead of tomorrow’s new and potentially truncated Parliament term. However, the Pound briefly regrouped even though the headline print was worse than forecast and sub-components were bleak before succumbing to more selling pressure as Tory rebels continued their condemnation of PM Johnson’s move to suspend the upcoming session in an attempt to head off a no deal Brexit motion. On that note, latest reports suggest that a cross-party group will launch a bill aimed at blocking no deal within hours, and Cable is hovering just above 1.2075 awaiting further developments/news, while Eur/Gbp is holding near the top of a circa 0.9025-85 range. From a chart perspective, 1.2065 is next on the downside for Cable (August 20 low) ahead of 1.2015 (2019 base) and hefty option/barrier interest at the 1.2000 strike

  • USD – The Dollar is firmer almost across the board, as the DXY inches a bit further above the 99.000 handle to a marginal new ytd peak (99.109) and closer to the next line of chart resistance (99.262) in wake of additional/higher US tariffs on around 1/3 of the remaining Usd300 bn Chinese goods and Usd75 bn US exports to China in return. However, the Greenback is also gaining at the expense of rival currencies that continue to weaken of their own accord, as noted above.
  • EUR/CHF/CAD/AUD/NZD/JPY – The single currency derived some indirect support via the aforementioned Sterling cross activity through the run of Eurozone manufacturing PMIs, but Eur/Usd has subsequently retreated from a circa 1.1000 recovery high to print a fresh, albeit slender, yearly low at 1.0958, not far from supposed expiries at 1.0950, but away from a hefty 1.8 bn rolling off at the big figure. Meanwhile, the Franc is closer to the base of a 0.9918-0.9890 band, but outperforming vs the Euro within 1.0866-99 parameters and the Loonie has lost impetus between 1.3310-1.3340 vs its US counterpart. Elsewhere, the Aussie is meandering from 0.6715 to 0.6735 on the back of mixed Chinese PMIs overnight and a shock drop in Q2 Australian business inventories vs the Kiwi that is just keeping its head above 0.6300 following improved NZ Q2 terms of trade that has nudged Anz/Nzd down towards 1.0650 from 1.0685. The Yen has drifted towards 106.40 from just over 106.00 at one stage with Japanese PM Abe due to announce a cabinet reshuffle next week and Q2 Capex a bit better than expected.
  • SEK/NOK – The Scandi Crowns have both been boosted by encouraging manufacturing PMIs, and especially from Norway where the headline rebounded above 50.0 again, with Eur/Sek eyeing 10.7500 and Eur/Nok sub-10.0000.
  • EM – The Turkish Lira has also rebounded from worst levels with the aid of a better manufacturing PMI, but also as Q2 GDP data revealed less contraction. Usd/Try has tested 5.8000 bids/support vs a high just a few pips shy of 5.8400, but Usd/Ars may see more upside if capital controls fail to stop the rot.

In commodities, WTI and Brent futures are slightly softer, with prices just above the 55/bbl and 59/bbl levels with little by way of specific catalysts thus far, although gains in the complex are somewhat capped by the latest imposition of US and China tariffs in which China slapped a 5% levy on US crude oil exports. Despite demand woes outweighing supply concerns, it is worth keeping an eye on Hurricane Dorian which, according to the NHC’s latest update, is drifting westward with life-threatening storm surges and dangerous hurricane-force winds expected along the Florida east coast through mid-week. As it stands, production in the Gulf of Mexico has not been affected. On the geopolitical front, UK is said to be considering sending drones to near the Gulf of Oman amid its crisis with Iran, which follows comments from the UK’s Royal Navy Captain who stated that its warship has faced 115 confrontations with the IRGC since the start of July. Elsewhere, gold prices are marginally firmer, in-spite of the weaker Buck, albeit the yellow metal remains above the USD 1500/oz handle. Copper prices are lacklustre today as trade woes weighed on the red metal with little impetus derived from mixed China PMIs. Meanwhile, China’s iron ore futures rose around 6% at a point to a two-week high with desks citing robust short-term demand with Beijing rolling out more support measures to the Chinese economy. Finally, nickel prices gained in excess of 8% after the Indonesian Finance Ministry said nickel ore export ban will take effect as of January 1st 2020 (as touted), and new mineral ore export ban is only to be implemented for all Nickel Ore grades.

end

c) Trading Tuesday

Stocks Pump’n’Dump On Trump’s “Ripoff USA” China Tweet

US equity markets ripped higher as President Trump tweeted that “we are doing very well in our negotiations with China.”

However, they quickly puked it all back after reading his follow-up:

“While I am sure they would love to be dealing with a new administration so they could continue their practice of “ripoff USA”($600 B/year),16 months PLUS is a long time to be hemorrhaging jobs and companies on a long-shot…

…And then, think what happens to China when I win. Deal would get MUCH TOUGHER! In the meantime, China’s Supply Chain will crumble and businesses, jobs and money will be gone!”

The algos reacted instantly but gave it all back as humans realized there’s nothing new here…

But hey, Powell speaks Friday so that’s enough hope to keep on buying stocks right?

Afternoon:

Stocks, Bond Yields Plunge After Manufacturing Recession Signal

Following President Trump’s tweets towards China and ISM confirming US Manufacturing is in recession, US equity markets and bond yields are tumbling….

Dow was down over 400 points, erasing all the gains from so-called “phone calls” last week with China…

And Treasury yields tumbled (after 30Y briefly topped 2.00% overnight)…

Source: Bloomberg

We’re gonna need another fake phone call!!

ii)Market data/USA

This is huge!  After China and Europe reported huge contractions in their mfg PMI, the USA reported its weakest Mfg PMI in 10 years..new exports orders collapse

(zerohedge)

US Manufacturing Weakest In 10 Years As New Export Orders Collapse

With Flash PMI in contraction and ISM sliding fast, expectations were for a very modest rise in both measures of manufacturing in August as ‘hard’ US macro data picked up relative to expectations.

The headline Markit Manufacturing PMI inched back into expansion with a final 50.3 print for August (after a 49.9 flash print), however, that is still the lowest since September 2009, with new export orders plunging at the fastest pace in 10 years.

The headline ISM Manufacturing plunged into contraction, printing 49.1 (well below the 51.3 expectations) to the lowest since Jan 2016 as employment and new orders (seven year low) collapsed.

Source: Bloomberg

The word “Contracting” dominates the sub-components of the ISM report… but look at the comments – this is very odd!

ISM respondents expressed slightly more concern about U.S.-China trade turbulence, but trade remains the most significant issue, indicated by the strong contraction in new export orders. Respondents continued to note supply chain adjustments as a result of moving manufacturing from China. Overall, sentiment this month declined and reached its lowest level in 2019.

“Business is starting to show signs of a broad slowdown.” (Machinery)

“While business is strong, there is an undercurrent of fear and alarm regarding the trade wars and a potential recession.” (Chemical Products)

As Bloomberg notes, the latest downturn underscores how slowing global growth and an escalating U.S. trade war with China are taking an even bigger toll on domestic producers. Although manufacturing only makes up about 11% of the economy,there are concerns that entrenched weakness – and any layoffs that may result – could filter through to the rest of the economy and endanger the record-long expansion.

Chris Williamson, Chief Business Economist at IHS Markit said:

The August PMI indicates that US manufacturers are enduring a torrid summer, with the main survey gauge down to its lowest since the depths of the financial crisis in 2009. Output and order book indices are both among the lowest seen for a decade, indicating that manufacturing is likely to have again acted as a significant drag on the economy in the third quarter, dampening GDP growth.

“At current levels, the survey indicates that manufacturing production is falling at an annualised rate of approximately 3%.

“Deteriorating exports are the key to the downturn, with new orders from foreign markets dropping at the fastest rate since 2009. Many companies blame slower global economic growth for weakened order books, but also point the finger at rising trade war tensions and tariffs.

Hiring has stalled as companies worry about the outlook: optimism about the year ahead is at its lowest since comparable data were first available in 2012. Similarly, price pressures are close to a three-year low, as crumbling demand has removed firms’ pricing power.”

As Rabobank comments, what is clear from both surveys is that the US manufacturing sector has come to a standstill,most likely because of the global economic slowdown and the uncertainty about international trade policy.

This was also reflected in the Q2 decline in business investment. Sufficient reason for the Fed to start cutting rates in July. And this will not be the last. As we explained previously, by taking a risk management approach to trade policy uncertainty, the Fed is amplifying the effect of trade policy on monetary policy.

All President Trump needs to do is raise tariffs or take another protectionist measure to get the Fed to cut rates further. In fact, the Fed is enabling the US administration to be tough on trade as the central bank has promised to offset any expected negative impact on the US economy by cutting rates in advance. This means that the Fed is bolstering Trump’s bargaining position in the ‘game of chicken’ between the US and China. This also makes it more likely that President Trump will continue to escalate the trade war.

And that makes it more likely that the Fed will have to make additional insurance cuts before the end of the year. Consequently, there is now a strong feedback loop between trade policy and monetary policy that will force the FOMC to make more insurance cuts in the near future, most likely in September and October.

The vicious circle this sets up does not bode well for any rational investor.

iii) Important USA Economic Stories

Dorian will cause havoc to our insurers as the storm may face losses to top 40 billion dollars

(zerohedge)

Reinsurers Face Insolvency Risk As Analysts Fear Dorian’s Insured Losses Could Top $40 Billion

Insurances companies could be in serious trouble now that Hurricane Dorian has spent a full day dragging across the Bahamas, according to a team of analysts at UBS. After battering the Caribbean island nation with gusts of up to 220 mph, the unprecedented Category 5 storm looks to be one of the most damaging storms in recent memory.

Now that Dorian has officially cemented its position as the second-strongest storm to form in the Atlantic in modern history, UBS analysts have updated their models to reflect a broader swath of losses.It’s now believed the storm could cause total insured losses in the range of $5 billion to $40 billion, with a ‘base case’ of $25 billion, up from $15 billion a few days ago.

This could put solvency capital at risk for some firms, the team of analysts said, according to Sputnik.

The analysts estimate the 2019 hurricane season could cause about $70 billion of natural catastrophe losses, which could erode excess capital and lead to higher premiums.

Though they got some relief last year, insurers faced record bills from hurricanes, earthquakes and wildfires in 2017, as Hurricanes Maria, Harvey and Irma hammered Puerto Rico and the Continental US…

…and wildfires in California led to the most destructive season on record.

Of the big reinsurance names, UBS named Swiss Re as its least preferred stock to hold during the 2019 hurricane season, adding that a second buyback was unlikely. Meanwhile, Lancashire, Beazley and SCOR were set to see the biggest gains from an increase in premiums across the industry.

Mandatory evacuation orders are expected to be issued in several counties in Florida, as well as the Carolinas, later Monday evening. Dorian’s eye had finally reached Great Bahama, though officials warned residents who had opted to remain in the area to remain wary. Even under the eye, meteorologists still expect wind speeds of around 165 mph.

Fortunately, as of Monday morning, a ‘direct’ hit in Florida was seen as less likely, thought it’s impossible to say with any degree of certainty how the storm will make landfall in the US.

end

Floridians brace for Dorian as it weakens to a category 3.  It was devastating to the Bahamas

(zerohedge)

iv) Swamp commentaries)

Seems that Jean Luc Brunel has now disappeared after being accused of scouting girls for Epstein.

(zerohedge)

“He’s A Ghost”: Modeling Agency Boss Accused Of Scouting Girls For Epstein Mysteriously Vanishes

Jean Luc Brunel, the modeling agency boss who was accused of scouting young girls for Jeffrey Epstein, has mysteriously vanished like a “ghost” as investigators search the world looking for him, according to the NY Post.

French authorities are trying to find the 72 year old Brunel and question him over his ties to Epstein as part of an ongoing probe into the now-dead pedophile, who had a house in Paris.

A legal source in Paris said: “He is a ghost who has disappeared without a trace.”)

French authorities have made inquiries in places like the U.S. and Europe, as well as Brazil, where Brunel was seen “looking for girls” just three months before Epstein was arrested.

The legal source continued: “There is no address for him, all his internet accounts, including social media, have been wiped out. He is uncontactable.”

Brunel’s connection to the Epstein scandal had come to light in numerous court filings. Epstein had invested $1 million to help launch Brunel’s modeling firm, MC2, in return for a “supply of girls on tap” according to one lawsuit.

According to the Post, Brunel may have even sent Epstein three 12 year old girls as a birthday present one year.

One of the most well known Epstein accusers, Virginia Roberts Giuffre, alleged that Brunel “farmed out” his modeling hopefuls to Epstein that she was not only forced to have sex with Epstein, but with Brunel, too.

In 2015, Brunel told the media: “I strongly deny having committed any illicit act or any wrongdoing in the course of my work as a scouter or model agencies manager.”

Brunel is known for discovering some very well known names in the modeling world, including Christy Turlington and Angie Everhardt, and has denied being “directly or indirectly” involved with Epstein.

end

For those of you who think that Comey is out of the woods, think again.  A great commentary from Larry Johnson

(courtesy Larry Johnson Sic Sempter Tyrannis blog)

Keep Your Powder Dry, Comey Is Not Out Of The Woods

Authored by Larry Johnson via Sic Semper Tyrannis blog,

There is no doubt that Jim Comey was part of a conspiracy to destroy Donald Trump and his Presidency. But all the evidence is not yet on the record.

There is some understandable frustration reverberating around the web that Comey is not being indicted in the wake of the latest Inspector General report detailing Jim Comey’s inappropriate and unethical handling of Government material. But that is not the role of the Inspector General. It is up to DOJ to prosecute and a careful reading of the current report makes clear that there was not adequate foundation to get an indictment and prosecute.

However, if you believe that Jim Comey is getting a pass and will get away with corrupt activity, let me suggest you are overreacting and that patience is warranted. Comey is not out of the woods.

My only previous experience with Bill Barr was the role he played in making sure that the two guys who planted the bomb on Pan Am 103 were prosecuted. Barr was a straight shooter and would not cut corners. I also am friends with a person who worked directly for him during that period. That person insists that Barr is not going to let Comey and Brennan and Clapper off the hook. But that person also has reminded me that Barr will do it by the book and do it fairly.

With that predicate, I want you to focus on the core of yesterd=day’s Inspector General report. It is very simple and concise:

The focus of the OIG’s investigation was to determine whether Comey violated Department or FBI policies, or the terms of his FBI Employment Agreement, in his handling of the Memos during and after his tenure as FBI Director.

Memos 2 and 7 contained small amounts of information classified at the “CONFIDENTIAL” level. The FBI designated Memos 4, 5, and 6 as unclassified, “For Official Use Only.”

Comey was removed as FBI Director on May 9, 2017, Comey still had copies of Memos 2, 4, 6, and 7 in his personal safe at home.

[t]he Inspector General Act of 1978, the OIG provided a copy of [these] factual findings to the Department for a prosecutorial decision regarding Comey’s conduct. . . After reviewing the matter, the Department declined prosecution.

As described in this report, we conclude that Comey’s retention, handling, and dissemination of certain Memos violated Department and FBI policies, and his FBI Employment Agreement.

I repeat, Comey violated Department of Justice and FBI policies and violated his FBI Employment Agreement. If he had taken classified memos home and stored them then he would have been indicted. But he did not engage in criminal activity with respect to classified information. He consciously and deliberately took steps to not keep classified information at his house. This is quite different from the conduct of Hillary Clinton, who knowingly and intentionally kept classified information on her unclassified, private server.

Jim Comey is stupidly taking a victory lap over this report and insisting that he is vindicated. I once considered Comey to be a smart person. Clearly he is not. He just pretends to be. His behavior today reveals an immaturity and hubris that confirms why he was fired in the first place as FBI Director.

This is the second Inspector General report that blasts Comey for unprofessional and unethical conduct. Being unprofessional and unethical is not illegal and does not guarantee a prison term.

The Inspector General is building a clear body of evidence that Jim Comey routinely and frequently violated Department of Justice and FBI policies and procedures. I want you to recall what the Inspector General said about Jim Comey and his July 2016 press conference on the Hillary Clinton investigation:

We determined that Comey’s decision to make this statement was the result of his belief that only he had the ability to credibly and authoritatively convey the rationale for the decision to not seek charges against Clinton, and that he needed to hold the press conference to protect the FBI and the Department from the extraordinary harm that he believed would have resulted had he failed to do so.

While we found no evidence that Comey’s statement was the result of bias or an effort to influence the election, we did not find his justifications for issuing the statement to be reasonable or persuasive. We concluded that Comey’s unilateral announcement was inconsistent with Department policy and violated long-standing Department practice and protocol by, among other things, criticizing Clinton’s uncharged conduct. We also found that Comey usurped the authority of the Attorney General, and inadequately and incompletely described the legal position of Department prosecutors.

The same conclusion with respect to Comey’s handling of the Weiner laptop:

We found no evidence that Comey’s decision to send the October 28 letter was influenced by political preferences…

Much like with his July 5 announcement, we found that in making this decision, Comey engaged in ad hoc decisionmaking based on his personal views even if it meant rejecting longstanding Department policy or practice. We found unpersuasive Comey’s explanation as to why transparency was more important than Department policy and practice with regard to the reactivated Midyear investigation while, by contrast, Department policy and practice were more important to follow with regard to the Clinton Foundation and Russia investigations.

Comey’s description of his choice as being between “two doors,” one labeled “speak” and one labeled “conceal,” was a false dichotomy. The two doors were actually labeled “follow policy/practice” and “depart from policy/practice.

…we found it extraordinary that Comey assessed that it was best that the FBI Director not speak directly with the Attorney General and Deputy Attorney General about how best to navigate this most important decision and mitigate the resulting harms, and that Comey’s decision resulted in the Attorney General and Deputy Attorney General concluding that it would be counterproductive to speak directly with the FBI Director.

Why in the world does Jim Comey celebrate being known as the FBI Director who routinely departed from DOJ and FBI policy and practice. He did not follow the rules. He made up rules to suit his personal fancy. The fact that Comey thinks this is a worthy trait tells us everything we know about his lack of character and integrity.

Another critical Inspector General report on Russiagate is still pending and Comey faces great danger on this front. This one will cover the FBI’s conduct with respect to the FISA warrant process. There is no doubt that Jim Comey lied to the FISA court in asserting that the information derived from the Steele Dossier was true and verified. But he will not be alone in this finding. Lying to a Federal court is a charge with weight and teeth. That is still hanging over Comey’s head.

I think DOJ did the right thing in not trying to prosecute Comey over the memo’s he drafted. It is a nuanced process crime and would be tough to present to a jury. Lying about the FISA warrant is completely different and more profound.

Barr’s Department of Justice should prosecute Comey and others on that issue. If they do not, then the cause of justice in our Republic will be dead. It is that simple. Justice is supposed to be blind in terms of not having a preconceived conclusion about guilt or innocence. This also means that your status and wealth should not provide you protection against being held accountable for illegal acts. The jury remains out with respect to what Attorney General Barr will do. I still give him the benefit of the doubt.

end

McCarthy is one smart cookie. He gives a thorough analysis of the Trump and Clinton mess outlining how Clinton and her entourage gets a free pass and some of Trump’s people get charged.  At the end he gives his reasoning for going after McCabe

(Andrew McCarthy)

 

What Is Justice For McCabe?

Authored by Andrew McCarthy via NationalReview.com,

The former deputy director’s FBI coddled Clinton and addled Trump. Now he seeks clemency… even as he sues the Justice Department…

Hillary Clinton checked every box for a violation of the Espionage Act. So much so that, in giving her a pass, the FBI figured it better couch her conduct as “extremely careless,” rather than “grossly negligent.” The latter description was stricken from an earlier draft of then-director James Comey’s remarks because it is, verbatim, the mental state the statute requires for a felony conviction. It wouldn’t do to have an “exoneration” statement read like a felony indictment.

 

In point of fact, the careless/negligent semantic game was a sideshow. Mrs. Clinton’s unlawful storage and transmission of classified information had been patently willful. In contemptuous violation of government standards, which she was bound not only to honor but to enforce as secretary of state, she systematically conducted her government business by private email, via a laughably unsecure homebrew server set-up. Her Obama administration allies stress that it was not her purpose to harm national security, but that was beside the point. The crime was mishandling classified information, and she committed it. And even if motive had mattered (it didn’t), her purpose was to conceal the interplay between her State Department and the Clinton Foundation, and to avoid generating a paper trail as she prepared to run for president. No, that’s not as bad as trying to do national-security harm, but it’s condemnable all the same.

While Clinton’s mishandling of classified information got all the attention, it was just the tip of the felony iceberg. Thousands of the 33,000 emails she withheld and undertook to “bleach bit” into oblivion related to State Department business. It is a felony to misappropriate even a single government record. The destruction of the emails, moreover, occurred after a House Committee investigating the Benghazi massacre issued subpoenas and preservation directives to Clinton’s State Department and Clinton herself. If Andrew Weissmann and the rest of the Mueller probe pit-bulls had half as solid an obstruction case against Donald Trump, the president would by now have been impeached, removed, and indicted.

And that dichotomy is the point, isn’t it?

In the Obama Justice Department — as extended by the Mueller investigation, staffed by Obama Justice Department officials and other Clinton-friendly Democrats — justice was dispensed with a partisan eye. If you were Hillary Clinton, you skated. If you were Donald Trump, they were determined to dig until they found something — and, even when they failed to make a case, the digging never stopped . . . it just shifted to Capitol Hill.

No one knows the skewed lay of the land better than Andrew McCabe.

The FBI’s former deputy director is in the Justice Department’s crosshairs. His lawyers are reportedly pleading with top officials not to indict him for lying to FBI agents who were probing a leak of investigative information, orchestrated by none other than McCabe.

McCabe is feeling the heat because the evidence that he made false statements is daunting. So daunting, in fact, that even he concedes he did not tell the truth to investigators. Listen carefully to what he says about the case — there being no shortage of public commentary on it from the newly minted CNN analyst. He never “deliberately misled anyone,” he insists. Sure, he grudgingly admits, some of his statements “were not fully accurate,” or perhaps were “misunderstood” by his interrogators. But “at worst,” you see, “I was not clear in my responses, and because of what was going on around me may well have been confused and distracted.”

Uh-huh.

Seems to me that General Michael Flynn “may well have been confused and distracted,” too. After all, it was on Flynn’s insanely busy first full day on the job as the new president’s national-security adviser that McCabe and Comey dispatched two agents — Peter Strzok and Joe Pientka — to brace him for an interview.

As our Rich Lowry recounts, Comey later bragged to an audience of like-minded anti-Trumpers at the 92nd Street Y that he knew this was a breach of protocol. Because seeking to interview a member of the president’s staff in a criminal investigation is a big deal, the Bureau is supposed to go through the attorney general, who alerts the White House counsel. That ensures that the administration is aware of the situation, and that the suspected staffer is advised of the reason for the interview and given an opportunity to consult with a lawyer.

Of course, if protocol had been followed, McCabe would not have been able to have Flynn grilled without preparation and without counsel. That put Flynn in a very different posture from Hillary Clinton.

She got every courtesy. The FBI not only scheduled her interview well in advance; before she showed up, before they asked her a single question, they had already finished drafting Comey’s statement exonerating her. Not just that. Clinton was permitted to bring along — among her phalanx of lawyers — her State Department aides Cheryl Mills and Heather Samuelson, key witnesses who had gotten immunity from prosecution. (In a real investigation, they’d have been considered subjects, not witnesses.) Allowing witnesses to sit in as lawyers was not just a violation of Justice Department practice (to say nothing of common sense). Federal criminal law prohibits former officials from lobbying the government on behalf of another person in a matter in which the former official was heavily involved while working for the government.

Recall that when he decided against an indictment of Clinton, Comey famously pronounced that “no reasonable prosecutor” would charge her. Even though Clinton’s conduct technically transgressed the law, the then-director rationalized that he could find no prior Espionage Act prosecution for gross negligence on facts analogous to Clinton’s case.

Where exactly would we expect find analogous facts? Not much precedent about secretaries of state sedulously setting up non-government communications systems for years of correspondence involving thousands of classified communications. But let’s put this historical anomaly aside. Let’s even ignore that military officials have been prosecuted for less-egregious classified-information violations. Here’s the point: In giving Clinton a pass, Comey explained that “responsible” prosecutorial decisions “consider the context of a person’s actions, and how similar situations have been handled in the past.”

Okay . . . then how is it that General Flynn gets investigated and charged?

Flynn, as a member of Trump’s transition team and incoming national-security adviser, had been consulting with the Russian ambassador, among other foreign counterparts. Context? There was nothing illegal or illegitimate about such communications. And even if it had been appropriate for the FBI and the Justice Department to inquire into the foreign policy of the incoming president elected by the American people, the Bureau did not need to interview Flynn. They had recordings of the conversations. What reason could there have been to question Flynn about them — without playing the recordings for him — except to lay the groundwork for a false-statements prosecution?

Moreover, how have similar situations been handled in the past? In investigating Flynn, the Obama Justice Department and the FBI theorized that he might have violated the Logan Act, a dubious law that purports to criminalize foreign policy freelancing by private citizens. Despite being on the books for over two centuries, the Logan Act has never resulted in a successful prosecution. Not once. In fact, it has not even been used to indict anyone in the last 170 years. Indeed, but for its desuetude, the Logan Act would certainly have been held unconstitutional; because the Justice Department never invokes it, no one has had the opportunity to challenge it. Yet, the Logan Act was used to justify investigating Flynn — a transition official whose very job entailed consultation with foreign officials.

As we noted a few days ago, the FBI and Mueller’s investigators prosecuted George Papadopoulos for lying about the date of a meeting. Though the lie was inconsequential to the probe, they made the then-28-year-old eat a felony charge. And while they could easily have had his lawyer surrender him for processing on the charge and quick release on bail, they instead choreographed an utterly unnecessary nighttime arrest that forced him to spend a night in jail.

Suffice it to say that Paul Combetta did not get the Papadopoulos brass-knuckles treatment.

Combetta was not prosecuted even though he brazenly lied to the FBI about the circumstances of his destruction of Clinton’s private emails. He was the key witness who had been in communication with Clinton confederates before and after his bleach-bit blitz through Clinton’s emails. In a normal case, prosecutors would charge him with obstruction and false statements to pressure him into cooperating. In the Clinton caper, though, he was given immunity . . . and duly clammed up.

No false-statements charges against Combetta. No false-statements charges against Cheryl Mills and Huma Abedin, intimate Clinton aides who claimed not to know about Clinton’s private server while they worked for her at the State Department — even though emails show them involved in discussions about the server.

In the Clinton investigation, if you were a lawyer, such as Mills and Samuelson, the Obama Justice Department said “pretty please” and gave you immunity — rather than a subpoena — to induce you to surrender private laptop computers containing classified Clinton emails. And then the Justice Department, in consultation with the Clinton camp’s lawyers, imposed restrictions on what the FBI could look at and what its agents could ask. After all, we wouldn’t want to imperil the attorney-client privilege, right?

Well, at least as long as you were not a lawyer in the Trump-Russia investigation. If you were, as was Melissa Laurenza, an attorney who worked for Paul Manafort and Rick Gates, prosecutors and the FBI compelled you to testify about client communications. If you were Trump lawyer Michael Cohen, the FBI executed search warrants at your home and office, and you were prosecuted. So was Alex van der Zwaan, an attorney who worked with Manafort and Gates in representing Ukrainian interests. He was induced to plead guilty to a false-statements charge in the Mueller probe.

And needless to say, if you were Manafort, there was no act-of-production immunity for you. And no one asked “pretty please” for you to turn over evidence. Under the Mueller team’s direction, the FBI got search warrants allowing them to break into Manafort’s home before dawn and at gunpoint to seize documents. Of course, this seems like kid-gloves treatment compared to what was done to Manafort’s friend and fellow Trump adviser, Roger Stone. The S.W.A.T.-style raid on Stone’s home included helicopter surveillance, an amphibious team (apparently to guard against escape by sea), and so many FBI vehicles that the CNN crew that just happened to be on scene almost couldn’t find a parking space! Was that show of force really necessary for a 66-year-old man charged with nonviolent process crimes whom the court released on bail a few hours later?

Mueller spent nearly two years trying to make an obstruction case against Trump for endeavoring to influence the Russia investigation. Congressional Democrats are still trying to breathe impeachment life into this effort. By contrast, the media-Democrat complex was unperturbed when Obama publicly announced in April 2016 that he did not think Clinton should be indicted. Far from accusing the 44th president of endeavoring to influence an investigation, the prosecutors and the press amplified Obama’s narrative that Clinton had not intended to harm the country — and dutifully looked the other way when the FBI airbrushed Obama’s name out of Comey’s Clinton exoneration speech (the president having knowingly communicated with Clinton through her unsecure server when she emailed him from a hostile foreign country).

The goal was to make Clinton’s crimes disappear, while suspicions about Trump were  blazoned on the public consciousness. Even though the Trump-Russia probe was a counterintelligence investigation, then-director Comey went public about it in March 2017 congressionaltestimony.

That was stunning. It is not enough to say that the Justice Department and the FBI customarily neither confirm nor deny the existence of any investigation, no matter how comparatively trivial. Counterintelligence investigations are classified. They are never spoken of. Yet, Comey both revealed the investigation and identified the Trump campaign as a subject, suspected of “coordinating” in Russia’s cyberespionage. For good measure, he gratuitously added that an assessment would be made about whether crimes had been committed. As any sensible person would have foreseen, the FBI director’s proclamation was taken by the media and the public as a signal that President Trump was the prime suspect in one of the most heinous crimes in American history.

To say the least, a different tune was sung in the Clinton emails probe. There, Comey acceded to the instructions of Obama’s attorney general, Loretta Lynch, that he not publicly speak of it as an investigation. Just call it “a matter,” he was told. Funny thing about that: it sounded exactly like what the Clinton campaign was saying at the time.

I don’t pretend to be a McCabe fan. Nevertheless, I have sympathy for him. The 2016 election will define his career, but it does not fairly reflect his long years of service defending the rule of law and American national security. If we could consider his case in a vacuum, and I had my druthers, I would not want to charge him. He was fired for cause in disgrace and is slated to lose at least some of his pension. These are significant penalties. I’d like to be able to say, “Enough is enough, no need to pile on with an indictment.”

But there’s more to it than that. A lot more.

For one thing, McCabe is suing the government for wrongful termination, arguing that he was fired due to a political vendetta carried on by President Trump. I certainly agree that the president should not have commented on McCabe’s case or status. As I’ve repeatedly argued, the president’s often-unhinged commentary makes investigations and prosecutions much more difficult to execute. It has already resulted in slap-on-the-wrist treatment for deserter Bowe Bergdahl, who should have received a stiff sentence.

That said, though, it is an audacious strategy on McCabe’s part to (a) ask the Justice Department to exercise clemency by declining to charge an eminently prosecutable false-statements case against him, while (b) simultaneously hauling the Justice Department into court on an accusation of bad faith in a case in which McCabe leaked and then provided explanations that weren’t true. If I were the attorney general, my inclination would be to say, “If he’s going to make us go to war, let’s go to war on offense — indict him.”

More significantly, we are now living in a law-enforcement world of McCabe’s making.

Again, in a better world, I’d prefer to take account of the considerable positive side of McCabe’s ledger and what he’s already suffered, especially if he exhibited some contrition. That is, I’d ordinarily be open to declining prosecution. But then, how about the positive side of General Flynn’s ledger? And why, if it would be overkill to charge McCabe was it not overkill to charge Papadopoulos? Why do Clinton, Mills, Abedin, and Combetta get a pass in a criminal investigation triggered by actual crimes, but Flynn, Papadopoulos, van der Zwaan, and Stone get hammered in an investigation predicated by no crime — just a fever dream of Trump-Russia cyberespionage conspiracy?

FBI and Justice Department officials keep telling us they grasp that there must be one standard of justice applicable to everyone, not a two-tiered system. So, here’s the question: If Andrew McCabe’s name were Michael Flynn, how much mercy could he expect from, say, Andrew Weissmann?

end

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

The King Report September 3, 2019 Issue 6083                                                                                Independent View of the News

Over the weekend, the state crackdown on Hong Protestors became bloodier.  On Sunday, the US imposed a 15% tariff on $112B of Chinese goods; China imposed 5% & 10% tariffs on $75B of US goods.  Argentina, facing default and financial crisis, imposed currency controls to halt capital flight.

ESUs opened -31.00 on Sunday.  Traders bought the dip because they want to play for start of the week and start of September rallies.  Gold rallied $14 to 1544.50.  ESUs then rallied sharply because someone juiced Chinese stocks from the Asian opening to the close.  The CSI 300 rallied 1.28%; the Shanghai Comp jumped 1.31%.  Despite the probable manipulation of Chinese stocks, the Nikkei declined 0.41%.

With the US and China trying to show that tariffs harm the other combatant more than itself, stock markets have become matters of national security – and political expedience.

Lawrence McDonald @Convertbond: @larry_kudlow knows the Barclays Credit Aggregate Index is expected to “include” up to $2T of China’s corporate and sovereign debt over the next 2-3 years, the index is $54T in size.  NOW that’s leverage. Mr. Mnuchin.  China is a levered hedge fund, the ultimate source of negotiating power is to CUT-OFF the funding. I believe there are now more players inside the White House receptive to this view…

Weakening yuan piles pressure on highly indebted Chinese property developers

  • The yuan, which has depreciated by 3.84 per cent in August, is bound to hurt mainland developers that have US$19.3 billion of offshore debt maturing in the 12 months to July 2020
  • Foreign currency debt now accounts for 25 per cent of Chinese developers’ total debt, up from 20 per cent at the end of June 2018, according to Moody’s

https://www.scmp.com/business/article/3025256/weakening-yuan-piles-pressure-highly-indebted-chinese-property-developers

ESUs hit a high of 2926.50 at 6:39 ET on Monday.  The low was the Sunday night open at 2893.75.  They closed at 2917.50 on Monday.  European stocks, except for Sweden, rallied.  The FTSE jumped 1.38% on reports that Parliament will force a Brexit delay until January 31.

Parliament Poised to Force Delay until Jan. 31: Brexit Update

  • Cross-party alliance of MPs draws up plan to seize the agenda in Parliament on Tuesday to force through legislation blocking a no-deal divorce
  • Labour leader Jeremy Corbyn says Labour could back Leave in a repeat referendum

https://www.bloomberg.com/news/articles/2019-09-02/rebels-draw-up-plans-as-johnson-threatens-revenge-brexit-update

ESUs tanked Monday morn on: China, US struggle to set September meeting for trade talks –BBG

U.S., China Locked in Stare-Down as Weekend of Tariffs Looms [Effective Sept. 1]

https://finance.yahoo.com/news/u-china-locked-stare-down-120829182.html

The traders and money managers that had manipulated ESUs and stocks to embellish August performance realized that the odds that the tariffs would occur were very high, so they had to ‘lighten up’ ahead of the weekend.  When Europe closed, ESUs rallied ten handles in less than 10 minutes.  With European traders liquidated for the weekend, US traders got busy gaming August performance.  The rally ended at 13:00 ET; an ‘A-B-C’ decline appeared.  The ‘C’ leg decline lasted until the final 30 minutes of the session.  Then, manipulators pushed ESUs and stocks higher into the close to embellish August performance.  BUT, on the close, ESUs tumbled 10 handles as traders ran for the exit before the tariffs hit on Sunday.

Consumer Sentiment Falls Most Since 2012 on Tariff Concern

The University of Michigan’s final sentiment index fell to 89.8 in August from previously reported 921 and 98.4 in July…The Conference Board’s confidence measure eased in August but posted the best assessment of current conditions since 2000.  Bloomberg’s weekly comfort gauge rose for a second week, while the monthly expectations saw more Americans reporting the economy’s getting worse…

https://www.bloomberg.com/news/articles/2019-08-30/u-s-consumer-sentiment-falls-most-since-2012-on-tariff-concern

The fin media, like the MSM, is trying to blame DJT’s tariffs on the big drop in August consumer confidence.  Why now, why this month, do consumers all of a sudden fear tariffs?  Why did the Conference Board’s August Consumer Present Situation hit its highest reading since November 1999?  Why aren’t tariffs reflected in other consumer surveys?  Consumers didn’t just get worried about tariffs.

UM Sentiment vs. US Retail Sales y/y – Huge divergence from late 2009 through 2014

Here are the questions that should be asked of the UM:  Why is your Consumer Sentiment gauge flat for the past 4.5 years?  Why did your survey miss the surge in retail sales from 2010 through 2014?  Did the Crisis of 2008-2009 distort your survey methodology?  Did you ask about tariffs and if so, when did you start asking this question?  What percentage of respondents voiced concern about tariffs if you didn’t ask the question?

A tariff question is a prejudicial question/push polling.  It’s like asking: Are you concerned that Harbaugh gets some of the best football recruits in the nation but still posts crappy results?  And then you follow that question with: Should Meecheegan retain him as coach?

Here’s another question that should be asked of UM: What’s the political breakdown of your survey.  Since Trump was elected, Dems’ sentiment about the economy has been overwhelming negative while Repubs’ sentiment has been overwhelmingly positive.  Now, the MSM and Dems are trying to foment a recession by inducing fear about the state of the US economy – to get rid of Trump.  See Bill Dudley.

Conference Board Confidencevs. UM Consumer Confidence – Which gauge is faulty?

Given the surge in the US stocks market, the great improvement in employment and rising wages under Trump, why isn’t this reflected in the UM survey?  Why is the UM survey flat under Trump?  Shouldn’t someone be asking UM surveyors some pointed questions about the survey and its methodology?

Conference Board Technical Notes: The CCS mailing is scheduled so that the questionnaires reach sample households on or about the first of each month…The targeted responding sample size—approximately 3,000 completed questionnaires—has remained essentially unchanged throughout the history of the CCI…  https://www.conference-board.org/pdf_free/press/TechnicalPDF_4134_1298367128.pdf

Sample Conference Board Survey: The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen… [Questions]Appraisal of Present Situation: Percent; Expectations for Six Months Hence: Percent; Plans to Buy Within Six Months: Percent; Vacation Intended Within Six Months: Percent; Expectations for Twelve Months Hence: Percent    https://www.conference-board.org/pdf_free/ccsurveySample.pdf

U Michigan: Each monthly survey contains approximately 50 core questions, each of which tracks a different aspect of consumer attitudes and expectations… [How many people do you know that would take the time to CAREFULLY and DILLIGENTLY answer 50 economic/financial questions?]…

Each month, a minimum of 500 interviews are conducted by telephone from the Ann Arbor facility.

    Consumers are not only asked to give their overall opinions, but are also asked to describe in their own words their reasons for holding these views… https://data.sca.isr.umich.edu/fetchdoc.php?docid=24774

U Michigan Survey questions: https://data.sca.isr.umich.edu/fetchdoc.php?docid=24776

We can see that the two consumer sentiment surveys have different methodologies, random sample mailing to 3,000 consumers versus a telephone survey of about 500 consumers.  This leads to another question for UM: What percentage of your telephone surveys are landline calls?  Everyone with a modicum of polling expertise knows that landline surveys lost validity years ago.

The Landline Survey: An Antiquated Methodology

Only 48% of research participants indicated they have a landline service in the household.  Most respondents indicated that they never use a landline.   Thirty percent (30%) of respondents who have a landline stated that they use it only about once every other month… landline surveys skew heavily to the older population.  Finding people under 50 years of age with landlines is virtually impossible…

https://www.questionpro.com/blog/landline-survey-antiquated-methodology/

Lastly, telephone surveys response rates are abysmal, only a scant 7% in 2018.

https://www.marketingcharts.com/industries/market-research-81996

@realDonaldTrump: If the Fed would cut, we would have one of the biggest Stock Market increases in a long time. Badly run and weak companies are smartly blaming these small Tariffs instead of themselves for bad management…and who can really blame them for doing that? Excuses!

State Dept. Spokeswoman Morgan Ortagus @statedeptspox: We are monitoring reports of military buildup near the administrative boundary line (ABL) of the Russian-occupied Georgian region of South Ossetia. We call on the Russian Federation to utilize all available channels to prevent further escalation of the situation along the ABL.

Pork Prices Chopped in China Due to African Swine Fever

Costs of the diet mainstay have risen 18% in the last two weeks [up >50% for the year]

https://www.wsj.com/articles/import-limits-effects-of-swine-fever-hit-pork-prices-in-china-11566990454

“I’ve Never Seen Anything like This”: China Reels as Pork Prices Explode to Record Levels

Pork prices have been a concern for Beijing because of its importance in the local diet…

     Roughly one year ago, there was a “modest proposal” floated in the darker corners of the internet, that if Trump wanted to win the trade war with Beijing and spark a social revolt, all he had to do was spark a deadly epidemic affecting China’s preferred food source

https://www.zerohedge.com/news/2019-08-29/ive-never-seen-anything-china-reels-pork-prices-explode-record-levels

Iran goes further in breaching nuclear deal, IAEA report shows   https://uk.reuters.com/article/uk-ira

 

Despite the rally last week to embellish August performance, the only S&P 500 groups up for the month are Real Estate (+5.22%) and Utilities (+4.11%).  All groups rallied last week.

 

@HayekAndKeynes: One reason data looks so lousy this year is because it was RED HOT in 2018 after the tax cuts.  As a reminder, things are going to look “much less bad” starting in the next month or two (barring any financial distress in China).

 

A couple weeks ago, we highlighted the fact that credit card rates are at an all-time high while banks pay minuscule Fed Fund rates.  The spread is usurious, which might account for the all-time high in virtue signaling by big-bank CEOs.  Pundits are staring to jump on this financial exploitation.

 

@NorthmanTrader: Something is really broken here. 10 year yield vs credit card interest rates. Consumers are getting totally hosed.  Chart: https://twitter.com/NorthmanTrader/status/1168125104993308672

@EuropeElects: Germany: Infratest dimap exit poll shows right-wing AfD (ID) [32%], GRÜNE (Greens/EFA) [9%]with best election results in the history of Saxony regional elections. Centre-left SPD (S&D) with a record low [8%] https://twitter.com/EuropeElects/status/1168194391212736514

Far-right surge in east German votes could jolt Merkel’s coalition   https://uk.reuters.com/article/uk-ger

Today – Traders will play for the start of the month and first day of the week rallies in the US.  Given what occurred with Chinese stocks on Monday, prudent investors and traders will carefully watch to see if manipulators are in the markets for political reasons.  We know that firms and traders manipulate stuff almost daily.  State manipulators are a different animal.

 

2940-43 on the S&P 500 Index has been firm resistance during August.  On Friday, the index made a quadruple top at this area.  After the large decline during the first three days of August, the index spent the remainder of the month trading in a rectangle consolidation between 2922-25 and 2940-43.

 

Obviously, a breakout of this box should induce traders to react feverishly.

 

The big day this week is Friday: August jobs report and Powell speaks in Zurich at 12:30 p.m. ET on “Economic Outlook and Monetary Policy.”  And you can be sure that Donald “Have Tweet will Gravel” Trump will comment on both the jobs report and Powell.

 

@zerohedge on Monday: JPMorgan Says It’s Finally Time to Buy Stocks Despite Trade Woes: BBG

err, JPMorgan has been saying to buy stocks every week for the past 2 years

 

ESUs opened at 2898.50 on Monday night; they immediately rallied to 2906.50.  Obviously, someone wants ESUs higher.  This is not serious buying.  This is ‘impact trading’, AKA manipulation.  At 21:43 ET, ESUs are 2912.75, -12.00 from Friday and +13.50 from Monday’s close of 2898.75.

 

The S&P 500 Index 50-day MA: 2945; 100-day MA: 2911; 150-day MA: 2870; 200-day MA: 2806

The DJIA 50-day MA: 26,578; 100-day MA: 26,293; 150-day MA: 26,097; 200-day MA: 25,625

 

S&P 500 Index support: 2910-13, 2900, 2880, 2870, 2860, 2853, 2840, 2835, 2830-32, 2822-25

Resistance: 2930, 2939, 2945, 2955, 2970, 2980, 2990, 3000

 

Expected economic data: Markit Aug US Mfg PMI 50.0; Aug ISM Mfg 51.2 (Whisper # 50.6), Prices Paid 46.8, New Orders 50.5; July Construction Spending 0.3% m/m; Markit Eurozone Services PMI 53.4

 

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 is positive;MACD is negative – a close below 2816.78 triggers a sell signal

Daily: Trender is negative; MACD is positive -a close above 2980.42 triggers a buy signal

Hourly: Trender andMACD are positive – a close below 2896.78 triggers a sell signal

 

John Brennan warns Trump that his ‘protective cocoon’ is ‘temporary’ (in a tweet defending Comey)

[The arrogance and treachery of the Deep State has no bounds.]

https://www.msn.com/en-us/news/politics/john-brennan-warns-trump-that-his-protective-cocoon-is-temporary/ar-AAGwvm9?ocid=st

 

@realDonaldTrump:The fact that James Comey was not prosecuted for the absolutely horrible things he did just shows how fair and reasonable Attorney General Bill Barr is. So many people and experts that I have watched and read would have taken an entirely different course. Comey got Lucky[Thinly-veiled shot at Barr]  Bryan Dean Wright, former CIA Officer (Dem): “In 2016 we had a Coup. We have to take Comey and others to task. Makes no sense not to prosecute him. Comey got a book deal.  I fear for my Country. He tried to kneecap our duly elected president, and there are no consequences.”

Ex-FBI Asst Dir of Intel Kevin Brock: The worst is still to come for Jim Comey

Next up will be the IG’s findings regarding Comey’s truthfulness before the Foreign Intelligence Surveillance Act (FISA) court and whether he attested to false or misleading statements in order to electronically monitor a presidential campaign… His exposure here is potentially much more devastating than breaking FBI record retention and handling rules…

      Close behind the IG’s second report will be findings by U.S. Attorney John Durham whether Comey and his rogue team of investigators violated FBI and departmental guidelines to initiate a counterintelligence investigation into a presidential campaign… 

https://thehill.com/opinion/international/459331-chinas-happy-future-one-system-six-countries

The biggest risks for Comey and his buds are conspiracy and RICO charges.

@ArthurSchwartz: Biden: Illegal immigrants [kids] “become Americans before a lot of Americans become Americans.  [Crowd laughs]  I’m serious.  https://twitter.com/ArthurSchwartz/status/1167530293680640000

 

Former Canadian prime minister roots for Dorian to hit Trump’s Mar-a-Lago [TDS is an international epidemic.]https://nypost.com/2019/08/30/former-canadian-prime-minister-roots-for-dorian-to-hit-trumps-mar-a-lago/

[Obscure] Actor Michael Shannon: Time for Trump voters to die

https://www.nycpost.pro/actor-michael-shannon-time-for-trump-voters-to-die

New York Times drawing heat for revising stories again

In the latest snafu, the Gray Lady amended a story on the Tea Party after insiders and readers blasted it for being too easy on the political group, including its history of racism…

    “Repeatedly letting itself get bullied into changing its coverage for the left is not a good look for the NYT,” tweeted Mark Hemingway, a senior writer at RealClearInvestigations…

https://nypost.com/2019/08/29/new-york-times-drawing-heat-for-revising-stories-again/

 

Gen. Flynn’s attorney, ex-DoJ attorney Sidney Powell, filed a bombshell motion for Flynn on Friday.  Powell asked Judge Sullivan to find prosecutors in contempt of court and asked for their removal for Brady violations – not providing exculpatory evidence. Powell claims prosecutors Brandon Van Grack and Zainab Ahmad, under the supervision of Andrew Weissmann, “affirmatively suppressed evidence that destroyed the credibility of their primary witness [and] impugned their entire case against Gen. Flynn…”

 

Powell cited the following book because Judge Sullivan was featured in the book.  Sullivan threw out Sen. Stevens’ conviction over prosecutorial abuses.

 

Why Innocent People Plead Guilty by Judge Jed S. Rakoff

The criminal justice system in the United States today bears little relationship to what the Founding Fathers contemplated, what the movies and television portray, or what the average American believes…

   It is a rare state where plea bargains do not similarly account for the resolution of at least 95 percent of the felony cases that are not dismissed

    While the 1950s were a period of relatively low crime rates in the US, rates began to rise substantially in the 1960s, and by 1980 or so, serious crime in the US, much of it drug-related, was occurring at a frequency not seen for many decades. As a result, state and federal legislatures hugely increased the penalties for criminal violations…At the federal level, Congress imposed mandatory minimum sentences for narcotics offenses, gun offenses, child pornography offenses, and much else…

   Thus, whereas in 1980, 19 percent of all federal defendants went to trial, by 2000 the number had decreased to less than 6 percent and by 2010 to less than 3 percent, where it has remained ever since…

    The reason for this is that the guidelines, like the mandatory minimums, provide prosecutors with weapons to bludgeon defendants into effectively coerced plea bargains… it is the prosecutor, not the judge, who effectively exercises the sentencing power, albeit cloaked as a charging decision…

   An estimated 20,000 persons, or more… are in prison for crimes to which they pleaded guilty but did not in fact commit…  https://www.armstrongeconomics.com/why-innocent-people-plead-guilty/

 

Tyranny is defined as that which is legal for the government but illegal for the citizenry.” – T. Jefferson

 

NYC bicyclists are killing pedestrians and the city won’t stop it [Cuz ‘green’ pols love bikes]

Mayor Bill de Blasio has aggressively pushed a bike-friendly agenda, adding about 100 miles of dedicated lanes for cyclists amid a spike in rider collisions, but he’s done little to address the danger that bikers themselves pose.  Since 2011, bicyclists have injured more than 2,250 pedestrians — including at least seven who died…    https://nypost.com/2019/08/31/nyc-bicyclists-are-killing-pedestrians-and-the-city-wont-stop-it/

 

This is not a parody!  Emotional support miniature HORSE is seen sitting on a passenger’s lap on flight from Chicago to Omaha – before it’s filmed trotting along through the airport

https://www.dailymail.co.uk/news/article-7412441/Miniature-HORSE-seen-sitting-passengers-lap-flight-Nebraska.html

 

If pols and captains of industry had to fly commercial flights, airlines, airplanes and airline service would be far different from the crap that the masses have to endure.

Well that is all for today

I will see you WEDNESDAY night.

 

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