SEPT 9//BANKERS AND OFFICIAL SECTOR CONTROLLING OUR GOLD AND SILVER PRICES: GOLD DOWN $4.75 TO $1503.25//SILVER DOWN 6 CENTS TO $18.09//HONG KONG ENDURES ITS 14TH STRAIGHT PROTEST WEEKEND//JEFFREY SNIDER A MUST READ; THE REAL REASON FOR THE BANKERS CUT IN RRR//3 GOOD ANALYSIS AS TO WHAT TO EXPECT WITH RESPECT TO BREXIT..GO WITH MISH SHEDLOCK//DAVID STOCKMAN EXPLAINS HOW THIS GLOBAL IMPLOSION WILL BEGIN//SWAMP STORIES AND THE KING REPORT FOR YOU TONIGHT//

GOLD:$1503.25 DOWN $4.75 (COMEX TO COMEX CLOSING)

 

 

 

 

 

 

 

 

 

 

 

Silver:$18.09 DOWN 6 CENTS  (COMEX TO COMEX CLOSING)

 

 

 

 

 

Closing access prices:

Gold : $1498.50

 

silver:  $17.99

 

we are coming very close to a commercial failure!!

 

 

 

 

 

 

COMEX DATA

 

 

 

 

 

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

today RECEIVING 9/14

EXCHANGE: COMEX
CONTRACT: SEPTEMBER 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,506.200000000 USD
INTENT DATE: 09/06/2019 DELIVERY DATE: 09/10/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
118 H MACQUARIE FUT 2
661 H JP MORGAN 9
737 C ADVANTAGE 3 3
905 C ADM 11
____________________________________________________________________________________________

TOTAL: 14 14
MONTH TO DATE: 1,640

NUMBER OF NOTICES FILED TODAY FOR  SEPT CONTRACT: 14 NOTICE(S) FOR 1400 OZ (.0435 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  1640 NOTICES FOR 164,000 OZ  (5.1010 TONNES)

 

 

 

SILVER

 

FOR SEPT

 

 

203 NOTICE(S) FILED TODAY FOR 1,015,000  OZ/

 

total number of notices filed so far this month: 6989 for   34,945,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE :  $ 10,348 UP 67 

 

 

 

Bitcoin: FINAL EVENING TRADE: $ 10288 DOWN 294

 

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IN SILVER THE COMEX OI FELL BY A TINY  SIZED 483 CONTRACTS FROM 216,682 DOWN TO 216,199 DESPITE THE MONSTROUS 60 CENT LOSS IN SILVER PRICING AT THE COMEX.

TODAY WE ARRIVED 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:,

SEPT, 0 FOR DEC : 2442, AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  2442 CONTRACTS. WITH THE TRANSFER OF 2442 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 2442 EFP CONTRACTS TRANSLATES INTO 12.21 MILLION OZ  ACCOMPANYING:

1.THE 60 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.

38.350   MILLION OZ INITIALLY STANDING IN SEPT. (HUGE)

WE HAD NO DOUBT  SOME COVERING OF BANKER SHORTS AGAIN AT THE SILVER COMEX ON FRIDAY WITH THE HUGE RAID ORCHESTRATED BY THE CROOKED BANKERS AT 12:30 PM EST.  HOWEVER IN CONTRAST TO THURSDAY,  TOTAL OI INCREASED DRAMATICALLY DESPITE THE FURTHER DRUBBING IN PRICE OF OUR SILVER  METAL WITH THE ABOVE AFOREMENTIONED RAID.

 

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:

14,035 CONTRACTS (FOR 5 TRADING DAYS TOTAL 14,035 CONTRACTS) OR 70.175 MILLION OZ: (AVERAGE PER DAY: 2809 CONTRACTS OR 14.045 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF AUGUST:  70.175 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 10.03% 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:          1619.89   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 SMALL SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 483, DESPITE THE HUMDINGER 60 CENT LOSS IN SILVER PRICING AT THE COMEX /FRIDAY... THE CME NOTIFIED US THAT WE HAD A  HUGE SIZED EFP ISSUANCE OF 2442 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER (SEE COMEX DATA) .

 

TODAY WE GAINED A STRONG  SIZED: 2284 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: 

i.e 2442 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 483  OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A HUGE 60 CENT LOSS IN PRICE OF SILVER AND A CLOSING PRICE OF $18.15 WITH RESPECT TO FRIDAY’S TRADING. YET WE STILL HAVE A STRONG AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY!! 

 

 

In ounces AT THE COMEX, the OI is still represented by JUST OVER 1 BILLION oz i.e. 1.083 BILLION OZ TO BE EXACT or 160% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH/ THEY FILED AT THE COMEX: 203 NOTICE(S) FOR 1,015,000 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 38.350 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)

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.”

 

 

IN GOLD, THE COMEX OPEN INTEREST FELL BY A SMALL  1186 CONTRACTS, TO 617,054 DESPITE THE CONSIDERABLE SIZED  $9.80 PRICING LOSS WITH RESPECT TO COMEX GOLD PRICING// FRIDAY// /

 

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

OCT 2019: 0 CONTRACTS, DEC>  5296 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 617,054,,.  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, STRANGELY, DESPITE THE SECOND RAID IN A ROW, WE HAD A STRONG GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF  4110 CONTRACTS OF WHICH 1186 CONTRACTS DECREASED AT THE COMEX  AND 5,296 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 4110 CONTRACTS OR 411,000 OZ OR 12.18 TONNES.  FRIDAY, WE HAD A LOSS OF $9.80 IN GOLD TRADING....AND WITH THAT LOSS IN  PRICE, WE  HAD A STRONG GAIN IN GOLD TONNAGE OF 12.18  TONNES!!!!!! THE BANKERS/OFFICIAL SECTOR WERE SUPPLYING INFINITE SUPPLIES OF SHORT GOLD COMEX PAPER WITH RECKLESS ABANDON AS THE COMEX GOLD VOLUME WAS HUGE. 

 

 

 

 

 

 

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF SEPT : 45,668 CONTRACTS OR 4,566,800 oz OR 142.04 TONNES (5 TRADING DAY AND THUS AVERAGING: 9,134 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 5 TRADING DAY IN  TONNES: 142.04 TONNES

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

THUS EFP TRANSFERS REPRESENTS 142.04/3550 x 100% TONNES =4.00% OF GLOBAL ANNUAL PRODUCTION

 

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     4293.16  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 SMALL SIZED DECREASE IN OI AT THE COMEX OF 1186 DESPITE THE CONSIDERABLE  PRICING LOSS THAT GOLD UNDERTOOK FRIDAY($9.80)) //.WE ALSO HAD  A GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 5296 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 5,296 EFP CONTRACTS ISSUED, WE  HAD A STRONG GAIN OF 4110 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

5,296 CONTRACTS MOVE TO LONDON AND 1186 CONTRACTS DECREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 12.18 TONNES). ..AND THIS STRONG INCREASE OF  DEMAND OCCURRED DESPITE THE  LOSS IN PRICE OF $9.80 WITH RESPECT TO FRIDAY’S TRADING AT THE COMEX.

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

 

 

 

 

 

 

 

 

we had:  14 notice(s) filed upon for 1,400 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

WITH GOLD DOWN $4.75 TODAY//(COMEX-TO COMEX)

NO CHANGES IN GOLD INVENTORY AT THE GLD

 

INVENTORY RESTS AT 889.75 TONNES

 

 

 

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

SLV/

 

WITH SILVER DOWN 6 CENTS TODAY:

WHAT FRAUDSTERS!!

 

A HUGE CHANGE IN SILVER INVENTORY AT THE SLV;

A MAMMOTH WITHDRAWAL OF 5.425 MILLION PAPER OZ OF SILVER LEFT THE SLV
THIS NO DOUBT WAS USED IN THE RAID ON SILVER THESE PAST THREE DAYS.

 

/INVENTORY RESTS AT 381.179 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 TINY SIZED 483 CONTRACTS from 216,682 DOWN TO 216,199 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  2442  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 2442 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 483  CONTRACTS TO THE 2442 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A STRONG GAIN OF 1959 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 9.795 MILLION OZ!!! AND YET WE ALSO HAVE A STRONG DEMAND FOR PHYSICAL AS WE WITNESSED A FINAL STANDING OF GREATER THAN 30 MILLION OZ FOR JULY, A STRONG 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: 38.350 MILLION OZ/

 

 

 

RESULT: A TINY SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 60 CENT LOSS IN PRICING THAT SILVER UNDERTOOK IN PRICING// FRIDAY. WE ALSO HAD A STRONG SIZED 2442 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR THIS MONTH, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

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

 

 

(report Harvey)

.

 

2 ) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

I)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED UP 25.14 POINTS OR 9.84%  //Hang Sang CLOSED DOWN 9.36 POINTS OR 0.04%   /The Nikkei closed UP 118.85 POINTS OR 0.56%//Australia’s all ordinaires CLOSED UP .11%

/Chinese yuan (ONSHORE) closed DOWN  at 7.1259 /Oil UP TO 56/72 dollars per barrel for WTI and 61.81 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.1259AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1211 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 BELOW 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)Is China using Fentanyl as a “Chemical warfare: against the USA.?Tons of this deadly drug continues to enter into the uSA. China is refusing to stop it in the same manner as the opiods wars started at the end of the 18th Century.China lost and that is how HOng Kong became a British colony.

(zerohedge)

ii)Jeffrey Snider gives a detailed explanation for the RRR cuts by China.  It is not for stimulus but because the banks are lacking dollars and the cuts are to free up some yuan to obtain badly needed dollars

(Jeffrey Snider.Alhambra)

iii)Protest continue for the 14th straight week despite Lam’s removal of the much hated extradition proposal.(zerohedge)

4/EUROPEAN AFFAIRS

i)Our three resident experts on Brexit give their thoughts on how the Brexit will proceed.  Put your money on No2 Mish

(Tom Luongo.Mish Shedlock/Michael Every)

II)Eric Reguly of the Globe and Mail  Toronto gives his opinion of why the European banks are trembling over fears of more negative rates

(Globe and Mail.Reguly)
and special thanks from Don J for sending this to us

iii)The Euro and bund yields rise with hints that Germany is going to undergo fiscal stimulus to get its  moribund economy on track(zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Saturday: Iran/Syria/USA

Bolton lashes out as our \Iranian tanker is photographed off the Syrian port of Tartus

(zerohedge)

ii)Iran

Why not:  Iran seizes another foreign vessel in the Persian Gulf and detains the crew
(zerohedge)

iii)Hezbollah shoots down Israel surveillance drone over South lebanon.  Israel set to react(zerohedge)

6.Global Issues

A must read.  David Stockman comments on 3 aspects which will lead to an unprecedented collapse of the global financial system:

i. Donald Trump’s trade war with China.  Donald is upset with the huge trade imbalance but that is mainly caused by the wage disparity. By causing trade to shift to other nations like Viet Nam etc it will cause big problems in the trade scheme

2. the huge bond bubble and it will burst

3. the stock market will burst as all of the gains in the stock market has been through buy backs.

plus the Fed and European bond problems..

a must read..

(courtesy David Stockman)

7. OIL ISSUES

European gas prices plunge to a 10 yr low

Paraskova/OilPrice.com)

8 EMERGING MARKET ISSUES

 

9. PHYSICAL MARKETS

I) Fed Clown (Chairman), Powell, says that even though they lost time in inflation, they will try and overshoot as time  goes on

(London’s Financial times)

ii)A first:  The UK’s Royal Mint plans its first stock exchange product using a gold ETF:  the reason the huge demand for gold.  Let’s have more paper gold

(Flood/London’s Financial Times)

iii)China officially reports an addition of 1000 tonnes of gold to its official reserves

(Bloomberg/GATA)

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

a)It sure looks like the consumer is not healthy at all

(zerohedge)

b)Will this be the spark that causes a rout in the bond market?:  We have our first crashing angel and it is a biggy:  Ford. with its 84 billion in debt.  The total of debt which is just one step above junk totals 1 trillion, so you can imagine the trouble here.

(zero hedge)

iii) Important USA Economic Stories

i)For the 10th straight month, class 8 heavy duty truck orders fall.  This itme the plunge is 79% in August

(zerohedge)

ii)This is going to be messy!!  Purdue Pharma is now expected to file for bankruptcy amid no settlement negotiations

iv) Swamp commentaries)

Here is a good account of our good friend Robert Mueller helped the Saudis cover up their involvement in the 9/11 attacks.  This has been brought out form a civil lawsuit

(zerohedge)

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

 

LET US BEGIN:

 

 

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN INTEREST FELL BY A GOOD SIZED 1186 CONTRACTS TO A LEVEL OF 617,054 DESPITE THE STRONG LOSS OF $9.80 IN GOLD PRICING WITH RESPECT TO FRIDAY’S RAID // 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 5296 EFP CONTRACTS WERE ISSUED:

 FOR AUGUST; 0 CONTRACTS: DEC: 5296   AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  5296 CONTRACTS.

THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS. ALSO REMEMBER THAT THERE IS NO DOUBT A HUGE DELAY IN THE ISSUANCE OF EFP’S AND IT PROBABLY TAKES AT LEAST  48 HRS AFTER OUR LONGS GIVE UP THEIR COMEX CONTRACTS FOR THEM TO RECEIVE THEIR EFP’S AS THEY ARE NEGOTIATING THIS CONTRACT WITH THE BANKS FOR A FIAT BONUS PLUS THEIR TRANSFER TO A LONDON BASED FORWARD.

ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: 4110 TOTAL CONTRACTS IN THAT 5296 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A GOOD SIZED 1186 COMEX CONTRACTS. 

THE BANKERS SUPPLIED THE NECESSARY AND INFINITE AMOUNT OF SHORT PAPER IN GOLD IN OUR 2ND RAID FRIDAY.  THE BANKERS SUCCEEDED IN LOWERING GOLD’S PRICE BY A CONSIDERABLE $9.80. HOWEVER, JUDGING BY THE STRENGTH IN GAIN OF OUR TOTAL OI CONTRACTS, THEY WERE UNSUCCESSFUL IN THE ENDEAVOUR TO FLEECE UNSUSPECTING LONGS. 

 

 

 

 

NET GAIN ON THE TWO EXCHANGES ::  4110 CONTRACTS OR 411,000 OZ OR 12.18 TONNES.

 

 

 

We are now in the NON  active contract month of SEPT and here the open interest stands at 65 CONTRACTS and surprisingly we gained 1 contracts.  We had 13 notices filed yesterday so despite the raid and liquidation of contracts we gained 14 contracts or an additional 1400 oz of gold that will  stand for delivery at the comex and the siege continues as the story for physical gold is the name of the game despite the criminal antics of the bankers.

The next active delivery month is October and here the OI FELL by 1177 contracts DOWN to 41,879. The month of November saw a loss of  1 contract and thus the OI is reduced to 18.  The very big December contract month saw its oi reverse the clobbering it took on FRIDAY rising by 249 contracts up to 457,721

 

 

TODAY’S NOTICES FILED:

WE HAD 14 NOTICES FILED TODAY AT THE COMEX FOR  1400 OZ. (0405 TONNES)

 

 

 

 

 

 

 

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And now for the wild silver comex results.

Total COMEX silver OI FELL BY A TINY SIZED 483 CONTRACTS FROM 216,682 DOWN TO 216,199 (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 TINY  OI COMEX LOSS OCCURRED WITH A HUGE 60 CENT LOSS IN PRICING.//FRIDAY.

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF SEPT.  HERE WE HAVE 884 OPEN INTEREST STAND FOR DELIVERY WITH A LOSS OF 210 CONTRACTS.  WE HAD 276 NOTICES FILED YESTERDAY SO WE AGAIN SURPRISINGLY GAINED A FULL 66 CONTRACTS OR AN ADDITIONAL 330,000 OZ OF SILVER WILL STAND AT THE COMEX…. AND THESE GUYS REFUSED TO MORPH INTO A LONDON BASED FORWARD AS WELL AS NEGATING A FIAT BONUS. LET US WAIT AND SEE IF THEY ARE SUCCESSFUL IN OBTAINING PHYSICAL METAL ON THIS SIDE OF THE POND..  THE NEXT NON ACTIVE CONTRACT MONTH IS OCTOBER AND IT RECEIVED ANOTHER 48 CONTRACTS TO STAND AT 1547. NOVEMBER SAW A SMALL GAIN OF 9 CONTRACTS TO STAND AT 102. THE NEXT ACTIVE DELIVERY MONTH AFTER SEPT IS DECEMBER AND HERE THE OI FALLS BY 662 CONTRACTS DOWN TO 170,357.

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 203 notice(s) filed for 1,015,000, OZ for the SEPT, 2019 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY: 151,341  CONTRACTS 

 

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  576,728  contracts//raid

 

 

 

 

 

INITIAL standings for  SEPT/GOLD

SEPT 9/2019

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 NIL oz

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

8037.50 oz

Loomis

 

250 kilobars

 

No of oz served (contracts) today
14 notice(s)
 1400 OZ
(0.0435 TONNES)
No of oz to be served (notices)
51 contracts
(5100 oz)
.1586 TONNES
Total monthly oz gold served (contracts) so far this month
1640 notices
164000 OZ
5.1010 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 1 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 Loomis:  8037.500   oz

250 kilobars

and the entry is a phony!!//no gold is entering the comex

 

 

 

total gold deposits: 8037.500  oz

 

very little gold arrives from outside/ a tiny amount  arrived   today and it was a phony (kilobars)

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 14 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 9 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 (1640) x 100 oz , to which we add the difference between the open interest for the front month of  SEPT. (65 contract) minus the number of notices served upon today (14 x 100 oz per contract) equals 169,100 OZ OR 5.259 TONNES) the number of ounces standing in this NON active month of SEPT

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

No of notices served (1640 x 100 oz)  + (67)OI for the front month minus the number of notices served upon today (14 x 100 oz )which equals 169,100 oz standing OR 5.259 TONNES in this  active delivery month of AUGUST.

 

We surprisingly again gained a GOOD 14 contracts or an additional 1400 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 5.259 TONNES IN SEPT.//

 

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 5.259 TONNES (EQUALS 32.412 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;   8,098,996.169 oz 251.912 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 9 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 3897.05 oz
Delaware
Brinks

 

 

Deposits to the Dealer Inventory
601,318.900 oz
CNT

 

Deposits to the Customer Inventory
76,341.000 oz
Brinks
Delaware
No of oz served today (contracts)
203
CONTRACT(S)
(1,015,000 OZ)
No of oz to be served (notices)
681 contracts
 3,405,000 oz)
Total monthly oz silver served (contracts)  6989 contracts

34,945,000 oz)

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

**

 

we had 1 inventory movement at the dealer side of things

i) Into CNT: 601,318.900 oz

 

total dealer deposits: 601,318.900  oz

total dealer withdrawals: nil oz

we had  2 deposits into the customer account

into JPMorgan:  nil  oz

ii)into Brinks: 75,350.900 oz

iii) Into Delaware: 900.100 oz

 

 

 

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

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

 

 

 

 

total customer deposits today:  76,341.000  oz

 

we had 2 withdrawals out of the customer account:

 

 

i) Out of Delaware:  993.500

ii) Out of Brinks; 2904.05 oz

 

 

 

 

 

 

 

total 3897.505  oz

 

we had 1 adjustment :

i) Out of Brinks: 644,251.160 oz was adjusted out of the dealer account of Brinks and this landed into the customer account of Brinks

(this is a proper settlement and this is what I want to see in gold)

 

total dealer silver:  93.110 million

total dealer + customer silver:  307.104 million oz

The total number of notices filed today for the SEPTEMBER 2019. contract month is represented by 203 contract(s) FOR 1,015,000 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 6989 x 5,000 oz = 34,945,000 oz to which we add the difference between the open interest for the front month of SEPT. (884) and the number of notices served upon today 203 x (5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the SEPT/2019 contract month: 6989 (notices served so far) x 5000 oz + OI for front month of SEPT (884)- number of notices served upon today (203)x 5000 oz equals 38,350,000 oz of silver standing for the SEPT contract month. 

We gained another strong 66 contracts or a huge 355,000 additional oz of silver will stand at the comex as these guys refused to morph into London based forwards.

LADIES AND GENTLEMEN:  THE COMEX IS UNDER ASSAULT FOR BOTH PHYSICAL GOLD AND SILVER AND DESPITE THE MASSIVE RAID LONGS CONTINUE WITH THEIR HUNT AT THE COMEX. 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 203 notice(s) filed for 1,015,000 OZ for the SEPT, 2019 COMEX contract for silver

 

 

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 203 notice(s) filed for 1,015,000 OZ for the AUGUST, 2019 COMEX contract for silver

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

 

TODAY’S ESTIMATED SILVER VOLUME:  66,135 CONTRACTS (we had considerable spreading activity..accumulation

 

CONFIRMED VOLUME FOR YESTERDAY: 228,892 CONTRACTS..

 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 228,892 CONTRACTS EQUATES to 1,145 million  OZ 163.5% 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

 

 

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NPV for Sprott 

 

1. Sprott silver fund (PSLV): NAV RISES TO -2.02% ((SEPT 9/2019)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -1.46% to NAV (SEPT 6/2019 )
Note: Sprott silver trust back into NEGATIVE territory at +%-/Sprott physical gold trust is back into NEGATIVE/ -2.02%

(courtesy Sprott/GATA)

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

NAV 15.14 TRADING 14.65/DISCOUNT 3.25

 

 

 

END

And now the Gold inventory at the GLD/

 

SEPT 9/WITH GOLD DOWN $4.75 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 889.75 TONNES

SEPT 6//WITH GOLD DOWN $9.80: A BIG CHANGE IN GOLD INVENTORY AT THE SLV: A PAPER WITHDRAWAL OF 6.15 TONNES//INVENTORY RESTS AT 889.75 TONNES

SEPT 5/WITH GOLD DOWN $33.80 TODAY: A BIG ADDITION (DEPOSIT) OF 5.86 OF PAPER GOLD TONNES PROBABLY ADDED BEFORE THE RAID/EXPECT A HUGE PAPER WITHDRAWAL TOMORROW:  INVENTORY RESTS AT 895.90 TONNES

SEPT 4/WITH GOLD UP $5.00 TODAY: A BIG CHANGE: A HUGE PAPER DEPOSIT OF:  11.73 TONNES/INVENTORY RESTS AT ….890.04 TONNES

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

 

 

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SEPT 9/2019/ Inventory rests tonight at 889.75 tonnes

 

 

*IN LAST 659 TRADING DAYS: 45.63 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 559- TRADING DAYS: A NET 121,02 TONNES HAVE NOW BEEN ADDED INTO  THE GLD INVENTORY.

 

 

 

 

 

 

 

end

 

Now the SLV Inventory/

SEPT 9/WITH SILVER DOWN 6 CENTS TODAY: A MAMMOTH CHANGE IN SILVER INVENTORY: A WITHDRAWAL OF 5.425 MILLION PAPER OZ/INVENTORY RESTS AT 381.179 MILLION OZ../

SEPT 6/WITH SILVER DOWN ANOTHER 60 CENTS TODAY: A RATHER TIMID CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 842,000 PAPER OZ FROM THE SLV///INVENTORY RESTS AT 386.604 MILLION OZ//

SEPT 5/WITH SILVER WHACKED 68 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 387.446 MILLION OZ//

SEPT 4/WITH SILVER UP 28 CENTS TODAY:STRANGE!! A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 708,000 OZ FROM SLV’S INVENTORY:/INVENTORY RESTS AT 387.446 MILLION OZ//

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 TONNES

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 9/2019:

 

 

Inventory 381.179 MILLION OZ

 

 

 

LIBOR SCHEDULE AND GOFO RATES:

 

 

YOUR DATA…..

6 Month MM GOFO 2.03/ and libor 6 month duration 2.04

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

G0LD LENDING RATE: + .01

 

XXXXXXXX

12 Month MM GOFO
+ 1.94%

LIBOR FOR 12 MONTH DURATION: 1.95

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.01

gold lease ra

end

 

 

end

 

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

Gold Marginally Higher; China Buys 100 Tons of Gold For Its Reserves In 2019

◆ Gold eked out small gains of 0.4% to $1,512/oz after falling nearly 1% last week; Improved risk appetite are capping gains for now

◆ Gold may go lower in the short term and support is at $1,500 and $1,450 per ounce but strong global safe haven demand from investors, family offices and central banks including China and Russia (see News below) should lead to further gains

◆ China has raised it gold holdings for ninth straight month, with the PBOC buying another 5.9 tons in August and adding nearly 100 tons of gold to its reserves since it resumed declaring purchases in December

◆ Russia’s massive gold stash is now worth more than $100 billion and the value of Russia’s gold reserves climbed 42% in the past year

 

News and Commentary

Gold inches higher, but improved risk appetite caps gains

Gold fell 0.7% on Friday and fell 0.9% last week

Gold Investments Hit Record High As Family Offices Seek Safe Haven

China Has Added Nearly 100 Tons of Gold to Its Reserves

Russia’s Massive Gold Stash Is Now Worth More Than $100 Billion

Global stocks gain on hopes of central bank stimulus

China will not tolerate attempts to separate Hong Kong from China

China’s exports to US fell 16% in August as Trump escalates trade war

More Americans will die after U.S. abruptly ends Afghan talks, Taliban say

UK’s Royal Mint plans first stock exchange product with gold ETF

‘Gold is the way to go’ as interest rates fall, says Mark Mobius

Gold At $10,000 Isn’t Crazy – Frank Holmes

 

 

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

06-Sep-19 1504.95 1523.70, 1223.52 1237.09 & 1363.94 1378.49
05-Sep-19 1542.60 1529.10, 1257.06 1238.72 & 1397.44 1380.78
04-Sep-19 1538.80 1546.10, 1265.05 1269.97 & 1397.69 1403.86
03-Sep-19 1532.45 1537.85, 1278.06 1277.80 & 1400.35 1403.44
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

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

 

ii) Important gold commentaries courtesy of GATA/Chris Powell

Fed Clown (Chairman), Powell, says that even though they lost time in inflation, they will try and overshoot as time  goes on

(London’s Financial times)

Fed chairman says making up for lost inflation is ‘great idea’

 Section: 

By Brendan Greeley
Financial Times, London
Saturday, September 7, 2019

In Zurich on Friday, Jay Powell, chairman of the Federal Reserve, repeated his mantra from this summer that the Fed will continue to “act as appropriate to sustain the expansion.” Markets were unsurprised and unmoved.

But after that, he got technical.

Talking about the challenges of easing in a potential downturn when policy rates are already close to zero — something he has called the “pre-eminent monetary policy challenge of our time” — he offered one specific strategy: make-up inflation.

… 

When a central bank undershoots its inflation target, Mr. Powell explained, it can promise to the public that it will overshoot in the future. As it makes up for lost inflation, the bank would also be making up for lost growth.

“If the public understands and acts up on that, we limit the damage from the recession,” he said. “It’s a great idea.”

It was not the first time Mr Powell has talked about make-up strategies. At a conference in Chicago in June, part of the Fed’s sweeping review of how it both functions and talks to the public, he lingered on the idea.

Policymakers had talked about make-up inflation after the financial crisis, but had decided against it. For make-up strategies to work, Mr. Powell said in Chicago, “households and businesses must go out on a limb, so to speak, raising spending in the midst of a downturn.” …

… For the remainder of the report:

https://www.ft.com/content/7224c41e-d0cf-11e9-99a4-b5ded7a7fe3f

* * *

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

A first:  The UK’s Royal Mint plans its first stock exchange product using a gold ETF:  the reason the huge demand for gold.  Let’s have more paper gold

(Flood/London’s Financial Times)

UK’s Royal Mint plans first stock exchange product with gold ETF

 Section: 

It’s not yet clear whether the fund will enable investors to withdraw gold from the Royal Mint vault or whether the fund will be just another paper hallucination to divert demand away from real metal.

* * *

By Chris Flood
Financial Times, London
Sunday, September 8, 2019

The Royal Mint plans to launch its first gold exchange traded fund in response to rising demand from investors that has pushed holdings in bullion-backed exchange-traded funds close to a record.

The Royal Mint already sells a range of precious metal coins and bars, but the launch marks the first time in its more than 1,100-year history that it has offered a financial product that will trade on a stock exchange. It will be structured as an exchange-traded commodity, a debt security backed by gold stored in the Royal Mint’s vault.

… 

“Gold has been recognised as the ultimate means of trading and storing wealth for thousands of years,” said Anne Jessopp, the Royal Mint’s chief executive.

HANetf, a specialist London-based boutique that helps build ETFs, has worked with the Royal Mint to develop the new ETC, which is expected to list in the UK, Italy, and Germany early next year. Details of fees and charges will be announced at a later date. …

… For the remainder of the report:

https://www.ft.com/content/f0a15508-08b4-3abf-a708-5e653f198934

* * *

end

China officially reports an addition of 1000 tonnes of gold to its official reserves

(Bloomberg/GATA)

China reports acquiring nearly 100 tonnes of gold since December

 Section: 

By Ranjeetha Pakiam
Bloomberg News
Sunday, September 8, 2019

China has added almost 100 tons of gold to its reserves since it resumed buying in December, with the consistent run of accumulation coming amid a rally in prices and the drag of the trade war with Washington.

The People’s Bank of China raised bullion holdings to 62.45 million ounces in August from 62.26 million a month earlier, according to data on its website at the weekend. In tonnage terms, August’s inflow was 5.91 tons, following the addition of about 94 tons in the previous eight months. …

Trade war restrictions, in the case of China, or sanctions, as with Russia, give “an incentive for these central banks to diversify,” John Sharma, an economist at National Australia Bank Ltd., said in an email. “Also, with increasing political and economic uncertainty prevailing, gold provides an ideal hedge, and will therefore be sought after by central banks globally.”

China has previously gone long periods without revealing increases in gold holdings. When the central bank announced a 57% jump in reserves to 53.3 million ounces in mid-2015, it was the first update in six years. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-09-09/china-s-gold-buying-s…

iii) Other physical stories:

Russia and China understand fully what is going on and they ave massively accumulating gold instead of dollar assets.

(zerohedge)

Russia, China Continue “Massive Substitution” Of Dollar Assets By Gold

“I think it’s clear to everyone now” exclaimed Russian President Vladimir Putin, (and French President Macron recently said so publicly), “that the leading role of the West is ending. I cannot imagine an effective international organization without [Russia], India and China.”

And while most politicians are all talk, in the case of both Russia and China, their actions speak louder than their words.

China‘s foreign exchange reserves jumped to $3.1072 trillion despite the falling yuan and escalating trade war with the US, while raising its gold holdings by nearly 2.89 million troy ounces (99 tons) in nine months. That’s nearly five percent more since the end of last year.

Source: Bloomberg

As Bloomberg reportsthat buying spree likely to persist in the coming years, according to Australia & New Zealand Banking Group Ltd.

Trade war restrictions, in the case of China, or sanctions, as with Russia, give “an incentive for these central banks to diversify,” John Sharma, an economist at National Australia Bank Ltd., said in an email.

“Also, with increasing political and economic uncertainty prevailing, gold provides an ideal hedge, and will therefore be sought after by central banks globally.”

But China is not alone. Figures released by the Central Bank of Russia (CBR) on Friday show Russia’s gold bullion holdings have reached $109.5 billion as the nation continues to shift its growing international reserves away from the US dollar.

As Bloomberg reports, Russia’s central bank has been the largest buyer of gold in the past few years…

Source: Bloomberg

“Russia prefers to cushion its macroeconomic stability through politically neutral tools,” said Vladimir Miklashevsky, a strategist at Danske Bank A/S in Helsinki.

There is a massive substitution of U.S. dollar assets by gold – a strategy which has earned billions of dollars for the Bank of Russia just within several months.”

In fact, globally, the trend is clear…

Source: Bloomberg

Remember, nothing lasts forever

 

END
Bill Holter discusses Exchange for Physicals with Greg Hunter
(courtesy Greg Hunter/Bill Holter)
Biggest Inflation in the History of History Coming – Bill HolterBy Greg Hunter On September 8, 2019Recently, one big name money manager after another is on record telling people to buy hard assets. Why? Financial writer and precious metals expert Bill Holter says they all know what is coming. Holter contends, “They understand that this is going to be the biggest monetary debasement in the history of history. They understand it’s hyperinflation that is on its way. They are late to the game, and they do manage billions and billions of dollars, and I don’t see how people talking about buying gold and buying silver are going to be able to get actual physical silver and physical gold in their hands or in their vaults.”Holter is warning of a failure to deliver metal because demand is out-running supply. Holter says, “So far, this year . . . for gold, they have already EFP (Exchange for Physical) 4,200 tons just for the first eight months. . . . They don’t have the inventories to deliver. . . . The point being that is 4,200 tons in eight months. The world only produces 3,300 tons (of gold a year) and if you take out Russia and China, which do not export (gold), the whole total for the year is 2,800 tons. So, it looks like we are going to end up with 6,000 tons of gold EFP demand for delivery in a world that is only producing 2,800 tons. In silver, it’s worse. In silver in the first eight months, there has been 1.6 billion ounces EFP. That number is going to end up to about 2.4 billion of silver ounces (EFP) and the world produces less than 800 million ounces a year. The bottom line to what all this means is there is going to be a failure to deliver. Once there is a failure to deliver, only the Lord knows what kind of prices we are going to be looking at for gold and silver.”

Holter says a failure to deliver is not a maybe but a sure thing. Holter says, “Whether it is this year or the first few months of next year, it doesn’t matter. It is going to happen. . . . I can basically guarantee there is going to be a failure to deliver, and that failure to deliver is going to unmask and scare the crap out of the entire fractional reserve banking system and the fractional reserve commodity system. The whole thing is going to come down in a panic because somebody gets a failure to deliver. . . . If you listen to what Trump is saying, he wants a lower dollar. How much of a lower dollar does he want? He’s talking about debasing the currency to make the debt payable. . . . That is the most palatable way for any government to pay debt and that is to debase the currency and pay it off in monkey money.”

Join Greg Hunter as he goes One-on-One with precious metals expert Bill Holter of JSMineset.com.

-END-

(courtesy //zerohedge/Chris Powell)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

71671201

Spencer Platt | Getty Images

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

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

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

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

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

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

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

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

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

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

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

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

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

end

March 4.2019

Parker City News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Kovel declined to comment.

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

-END-

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

 Section: 

9:47a ET Tuesday, March 5, 2019

Dear Friend of GATA and Gold:

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

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

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

… 

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

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

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

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

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

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

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

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

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

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

* * *

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

i) Chinese yuan vs USA dollar/CLOSED / LAST AT: 7.1259/ GETTING VERY DANGEROUSLY PAST 7:1

//OFFSHORE YUAN:  7.1211   /shanghai bourse CLOSED UP 25.14 POINTS OR 0.84%

HANG SANG CLOSED DOWN 9.36 POINTS OR 0.04%

 

2. Nikkei closed UP 118.85 POINTS OR 0.56%

 

 

 

 

3. Europe stocks OPENED ALL MIXED/

 

 

 

USA dollar index UP TO 98.38/Euro RISES TO 1.1029

3b Japan 10 year bond yield: FALLS TO. –.25/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 107.01/ 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:: 56.72 and Brent: 61.81

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO -.60%/Italian 10 yr bond yield UP to 0.92% /SPAIN 10 YR BOND YIELD UP TO 0.20%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 1.52: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 1.59

3k Gold at $1512.75 silver at: 18.25   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 10/100 in roubles/dollar) 62.99

3m oil into the 56 dollar handle for WTI and 65 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 107.01 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 .9909 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0929 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 0.60%

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 1.60% early this morning. Thirty year rate at 2.07%

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

6.  TURKISH LIRA:  UP  TO 5.7325..

Global Stocks Rise On Central Bank Stimulus Hopes

When it comes to overnight stock market levitation, there are two catalysts: hopes of an “imminent” trade deal (this has been the case for the past year) and hopes for central bank easing (this has been the case for the past decade). Overnight, it was the latter that pushed US equity futures by another 7 points, sending the Emini just shy of 3,000, trading at 2,987 last, and Global stock markets broadly higher.

 

 

European markets opened higher after data showed a surprise rise in German exports and on expectations of stimulus by the ECB later this week, including even lower rates and a restart of asset purchases. The pan-European STOXX 600 index was fractionally higher just after 7:00 EDT, while the MSCI All Country World Index was up 0.05%.

Germany’s trade-sensitive DAX index rose 0.2% after data showed seasonally adjusted exports rose 0.7% in July. A Reuters poll of economists had pointed to a drop of 0.5%. The report was a much needed green shoot for an economy that is currently in a technical recession and amid gloomy data from major economies since Friday, which heightened expectations of stimulus from central banks

 

The strong German trade data came after the US reported that August jobs slowed more than expected, while data over the weekend from China showed the country’s exports unexpectedly shrank as shipments to the U.S. slowed.

“If all the currently proposed tariffs are implemented, we foresee that growth in the first half of next year will slow toward the brink of a recession,” said UBS chief investment officer, Mark Haefele, emphasizing a report we discussed last week.

Of course the worse the data, the better for stocks, and the prospect of central-bank support kept risk sentiment alive and well. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2% and E-mini futures for the S&P 500 index rose 0.3%.

Asian stocks advanced, heading for a fourth day of gains, as China cut reserve ratios for banks and the country’s weak trade data fueled speculation for further easing. Most markets in the region were up, with Japan and China leading gains. Technology and industrial firms were among top performers. The Topix climbed 0.9% to a five-week high, led by electronics makers and pharmaceutical companies. Despite a downward revision to second-quarter growth, Japan’s economy is estimated to remain strong enough for an upcoming sales-tax hike. The Shanghai Composite Index closed 0.8% higher for a sixth day, with PetroChina and 360 Security Technology among the biggest boosts. India’s Sensex added 0.4%, driven by Housing Development Finance and Larsen & Toubro, as investors awaited more government stimulus

As a reminder, on Friday, China’s central bank cut reserve requirements for a seventh time since early 2018 to free funds for lending, while Fed Chairman Jerome Powell said the Fed would continue to “act as appropriate” to sustain U.S. economic expansion.

And while the European Central Bank is expected to cut rates this week, Euro-area bonds fell as investors showed less conviction that the Central Bank’s policy meeting Thursday will result in bold steps for more monetary stimulus. Longer-dated euro zone government bond yields ticked higher, with most yields up 3 to 4 basis points in early trade, while US 10Y yields rebounded from Friday’s plunge, trading around 1.60% last.

“There has been a tremendous rally in bonds and the central banks are the key determinant of what’s going to happen with the rates market,” Frances Hudson, global thematic strategist for multi-asset investing at Aberdeen Standard Investments, told Bloomberg TV. “With equities there is still an element of self-determination.”

Chinese sovereign bonds fell after the central bank disappointed investors by not rolling over maturing medium-term loans. The People’s Bank of China drained a net 56.5 billion yuan via monetary policy tools on Monday, selling 120 billion yuan of seven-day reverse repos, while 176.5 billion yuan of medium-term lending facility matured, Bloomberg reported. Paradoxically, that move came just one business day after the PBOC eased financial conditions, when it announced on Friday it was cutting the amount of cash banks must hold in reserve to the lowest since 2007, injecting liquidity into a domestic economy facing a slowdown and headwinds from the trade war with the U.S. “It seems like the PBOC is continuing its balancing act,” said Tommy Xie, economist at OCBC Banking Corp. in Singapore. “The inaction in MLF today to some extent offsets the impact of the RRR cut.”

Separately, data released on Sunday showed that exports decreased 1% in dollar terms from a year earlier in August as the trade war with the US is grinding China’s mercantilist apparatus to a crawl.

 

In currencies, the euro fell to a five-day low but recovered ground by 0820 GMT to trade 0.1% higher at $1.1036 as the dollar traded near a two-week low as the focus turned to whether the Federal Reserve will cut interest rates again this month. Aussie and kiwi both edged higher as Asian risk assets were boosted by some follow-through buying from China’s decision Friday to cut banks’ reserve ratios. The pound shrugged off earlier losses to rise to the highest level since July after the U.K. economy grew surprisingly fast in July, and after the latest defection from Prime Minister Boris Johnson’s Conservative party which will soothe fears Britain was facing a pre-Brexit recession.

In commodities, oil rose on expectations that Saudi Arabia, the world’s largest oil exporter, will continue to support output cuts by OPEC and other producers to prop up prices under new Energy Minister Prince Abdulaziz bin Salman.

Market Snapshot

  • S&P 500 futures up 0.2% to 2,986.00
  • STOXX Europe 600 down 0.06% to 386.91
  • MXAP up 0.4% to 156.83
  • MXAPJ up 0.3% to 507.72
  • Nikkei up 0.6% to 21,318.42
  • Topix up 0.9% to 1,551.11
  • Hang Seng Index down 0.04% to 26,681.40
  • Shanghai Composite up 0.8% to 3,024.74
  • Sensex up 0.4% to 37,122.70
  • Australia S&P/ASX 200 up 0.01% to 6,647.96
  • Kospi up 0.5% to 2,019.55
  • German 10Y yield rose 3.8 bps to -0.6%
  • Euro up 0.06% to $1.1036
  • Brent Futures up 0.4% to $61.78/bbl
  • Italian 10Y yield fell 6.8 bps to 0.537%
  • Spanish 10Y yield rose 3.0 bps to 0.203%
  • Brent futures up 0.7% to $61.96/bbl
  • Gold spot up 0.2% to $1,509.12
  • U.S. Dollar Index little changed to 98.39

Top Overnight Headlines from Bloomberg

  • Boris Johnson is refusing to back down and pushing on with his hardline Brexit strategy despite the risk of being taken to court. Johnson is in Dublin on Monday for talks with his Irish counterpart Leo Varadkar, who demanded “realistic, legally binding and workable” arrangements for the Irish border if an agreement is to be reached
  • European Central Bank President Mario Draghi will test the composure of global policy makers this week as he unleashes a barrage of stimulus to shore up economic growth
  • Apple Inc. and manufacturing partner Foxconn violated a Chinese labor rule by using too many temporary staff in the world’s largest iPhone factory, the companies confirmed following a report that also alleged harsh working conditions
  • The contraction in China’s trade in August underscored what economists were already saying about the government’s stimulus efforts: they’re not yet enough to put a floor under the slowing economy
  • Oil extended gains after Saudi Arabia ousted its long-time energy minister before an OPEC+ committee that monitors compliance with output cuts meets this week in Abu Dhabi

Asian equity markets traded mostly positively but with gains relatively mild as the region digested the latest developments from the world’s 2 largest economies including the PBoC RRR cut announcement, mostly weaker than expected Chinese trade data and US NFP. ASX 200 (U/C) was choppy as upside in tech was counterbalanced by continued weakness in gold miners and after soft Chinese trade data which showed a surprise drop in Exports, while Nikkei 225 (+0.5%) remained afloat after Final GDP figures for Q2 printed inline with estimates. Hang Seng (Unch.) and Shanghai Comp. (+0.8%) were mixed as the mainland reacted to the PBoC’s 50bps RRR cut and further targeted 100bps reduction for qualified banks which is expected to release CNY 900bln of liquidity, although advances were limited by the weak trade figures and with Hong Kong dampened after further violent protests over the weekend. Finally, 10yr JGBs were higher despite the mostly positive risk tone and reclaimed the 155.00 level, although prices later stalled amid mixed results in the enhanced liquidity auction for 2yr-20yr JGBs.

Top Asian News

  • Chinese Food Producers Have World’s Richest Valuations
  • Chinese Automobile Sales Decline for 14th Time in 15 Months
  • Nissan CEO Saikawa Says Ready to Resign Once Successor Is Found
  • Towngas China Surges Most in a Decade as Citi Predicts Takeover

Major European indices are mixed this morning but overall little changed [Euro Stoxx 50 +0.1%], as markets struggle for clear direction amidst a relatively quiet schedule and no further updates to the US-China trade situation. Unsurprisingly, sectors are painting a similar picture this morning though the energy sector outperforms amidst strength in the broader complex. In terms of individual movers, ProSiebensat (+5.5%) lead the Stoxx 600 after being upgraded to buy at UBS and the Co. stating they are to remain focused on their free-to-air business. At the other end of the spectrum are ThyssenKrupp (-2.3%) after the Co’s CEO states he would prefer a minority stake sale in their elevator division which has the potential to be valued at over EUR 15bln. Elsewhere, Lloyds (-0.4%) are slightly subdued after suspending their GBP 1.75bln share buyback scheme due to a substantial inflow of PPI claims, as such the Co. need to make an incremental charge of GBP 1.2-1.8bln on top of their prior Q3 provisions.

Top European News

  • Italy Prepares to Tap Debt Market Just as Europe Demand Stutters
  • Ireland’s Bonds Seen Increasingly Risky as Brexit Nears Endgame
  • Thyssenkrupp CEO Said to Prefer Minority Sale for Elevators

In FX, Pound Sterling survived and bout of selling pressure that pushed Cable down through 1.2250 and Eur/Gbp up above 0.9000, but was already recouping and reversing gains before a raft of UK releases that beat expectations across the board. This raised eyebrows and speculation about some being privy to the numbers or nature of the data beforehand, but others also pointed to the fact that the bill ensuring another Brexit extension rather than now deal is due to receive Royal Assent later today and reports that PM Johnson may have conceded that he may have to accept another 3 months if he fails to strike an accord with the EU before October 31. Meanwhile, opening remarks from his meeting with Irish PM Varadkar were largely upbeat and confident on the subject of resolving the Irish border backstop, including alternatives to the current WA proposal as he claimed there are many prospective options, but not for public consumption. In response and/or follow-through from the aforementioned encouraging data, Cable cleared 1.2300 more convincingly on its way over the 55 DMA (1.2328) and above last Friday’s post-NFP high (1.2338) to circa 1.2360, while Eur/Gbp reversed through the big figure and 0.8950, eyeing 0.8900 next.

  • AUD/NZD/NOK/CAD – The Antipodean Dollars have extended recovery gains vs their US counterpart in wake of the latest PBoC RRR cuts, a sub-forecast rise in US payrolls and despite Chinese trade data revealing an unexpected decline in exports. Aud/Usd has now advanced towards 0.6870 and Nzd/Usd is approaching 0.6450 as the Aud/Nzd cross pivots 1.0650. Elsewhere, strong Norwegian GDP for the month of July and firm oil prices are underpinning the Nok as it rebounds through 9.9000 vs a steady Eur overall, while the Cad is inching closer to resistance ahead of 1.3150 against its US rival on the back of Canada’s labour report and a bumper jump in the jobs tally.
  • EUR/JPY – Both narrowly mixed vs the Greenback around 1.1025 and 107.00 respectively, and well flanked by heavy option expiry interest as 1.8 bn rolls off at 1.1000 and 1 bn at 1.1050 in Eur/Usd, while 1.5 bn, 1.3 bn and 1.3 bn are layered in Usd/Jpy from 106.50-60, through 106.85-95 to 107.25-30. Note also, the Euro and Yen are not deriving much from the Buck indirectly as the DXY trades within a tight 98.512-309 band.
  • CHF – The G10 laggard as the Franc retreats from its post-NFP peaks towards 0.9900 again and Eur/Chf climbs towards the top of a 1.0930-1.0890 range amidst firmer risk sentiment overall and expectations that the SNB will respond to likely stimulus from the ECB this week and Fed next week at its September Quarterly Policy review.
  • EM – The Lira continues to underperform or hand back recovery gains following more dovish prompting from Turkish President Erdogan ahead of this month’s CBRT policy convene where forecasts range from 225-275 bp worth of easing after the significantly bigger than anticipated -425 bp in July. Usd/Try is back above 5.7300 in contrast to Usd/Zar that is now under 14.7500 irrespective of more warnings from the ratings agencies about aid for SA’s power company Eskom and S&P advising caution when restructuring the firm’s bonds.

In Commodities, Brent and WTI prices are firmer this morning, with both WTI and Brent having successfully surpassed the USD 57.00/bbl and USD 62.00/bbl marks at best thus far. Nothing too fresh in the way of fundamental news flow this morning, but weekend reports showed that Saudi Energy Minister Al Falih has been replaced by Prince Abdulaziz; PVM indicate that no changed is to be expected in the current strategy of OPEC and if anything this may strengthen their resolve to balance markets. Other energy minister comments from Secretary General Barkindo that the JMMC could debate potential new production targets, meeting is scheduled for September 12th. The complex may have derived some support this morning from renewed geopolitical tensions via Iran, who have told the IAEA that they intend to produce enriched uranium with advanced centrifuges and as such would breach the nuclear deals imposed ban. Although, gold has failed to generate too much in the way of support from these comments with the yellow metal little changed on the day and still holding above the USD 1500/oz mark going into a critical week for markets courtesy of the ECB on Thursday. Separately, China’s Iron imports increased 6% YY to their highest since January 2018, which ING note is due to increasing shipments from Australia and amidst a recovery in Brazilian exports.

US Event Calendar

  • 3pm: Consumer Credit, est. $16.0b, prior $14.6b

DB’s Jim Reid concludes the overnight wrap

I hope you had a good weekend. We had a joint 4th birthday and house warming party and after having 50 plus toddlers creating havoc I think it might be easier to just get the builders back in and start again with the refurb rather than tidy up. This weekend might go down as the one where Maisie lost all sense of reality though as every parent brought her a present. She now has a room full of gifts ahead of her actual birthday next week. Also given we invited 50 kids I’m worried that we’ll get invited back to around 50 4th birthday parties over the next year. There goes my weekly game of golf… and my savings!!

If last week was back to school with a bang with Brexit and a bond market sell-off the highlights, this coming week has plenty more potential ‘boom’ moments. The ECB on Thursday will be hard to top but today’s trip to Dublin from UK PM Johnson and the subsequent election vote later in Parliament (highly likely to be defeated) will be fascinating and in data terms the highlights are US CPI (Thursday) and Friday’s US retail sales and UoM consumer confidence which last month fell to the lowest since October 2016.

With regards to the ECB, this will be President Draghi’s penultimate press conference before his term comes to an end. Our economists expect the ECB to cut interest rates by 10bps at Thursday’s policy meeting. They also anticipate a new system of reserve tiering, where some subset of reserves are exempted from the cost of negative interest rates, plus an enhanced version of forward guidance.While a shift to a symmetric inflation target or to a price level target would almost certainly be too radical for them to consider without a deeper policy review, they are likely to commit to some form of “lower for longer” rate guidance. There are also risks that they cut by more than 10bps, given the apparent lack of pushback by hawkish members of the Governing Council against a rate cut. There was more public pushback over the last few weeks against asset purchases, so that may be harder to agree on. Our economists nevertheless think a €30 billion per month purchase program is possible, though they could also see a more generous form of TLTROs if the ECB wants to focus on credit easing instead of measures that may flatten the curve. Their full preview is available here .

Staying with our economists views, on Friday, Matt Luzzetti and the US econ team updated their economic forecasts to reflect the latest trade news (full note here ). Though they had included a trade war escalation in their forecasts, the current conflict has exceeded their expectations and they now expect growth to slow more sharply. They forecast Q4/Q4 GDP growth of 1.9% and 1.8% for this year and next, down from 2.0% and 2.2%. As a result, they expect unemployment to rise a bit to 4.3% next year which will translate to below-target inflation for the next several quarters. To combat this, they add another 50bps of Fed rate cuts to their expectations; they now see 100bps of cuts over the next several months, including cuts at the September, October, December, and January meetings. The most interesting comment in the piece is that they believe trade developments have neared a tipping point. Their baseline expects that data and risk assets will weaken enough over the coming months to pull the US administration back from further escalations. If not though they think a mild recession is possible and taking the Fed Funds rate to zero.

Turning to Brexit, events are expected to continue to journey into the unknown this week. A vote in the House of Commons to hold an election will likely get defeated today with the opposition parties trying to force Mr Johnson into asking the EU for an extension. The weekend papers were full of talk about the government working out whether they could sidestep the law with the Sunday Times reporting that the PM wants to even use the Supreme Court as an option. There was also talk of a PM resignation as one option being considered and even talk of the PM actively disobeying the law and perhaps facing a potential prison sentence if he does. As for the polls, after a torrid time in Westminster for the PM last week and over the weekend with another cabinet and party resignation, the Conservation Party have generally maintained their lead (between 3 and 14pts lead over 6 polls) but one poll suggested that if Brexit didn’t happen by October 31st then the lead would reverse and Labour would take a 2 point lead. This highlights why the opposition are gambling on denying an election this side of that date. The polls also show that hard tactics in Westminster are not necessarily damaging the governments support. However, the collateral damage to the party is significant so it’s high stakes for everyone.

Turning to Asia, over the weekend we got China’s August trade data with the trade balance reportedly standing at $34.8bn (vs. $44.3bn expected) primarily due to exports declining unexpectedly(-1.0% yoy vs. +2.2% yoy expected) while imports fell -5.6% yoy (vs. -6.4% yoy expected). In terms of trade with the US, exports stood at $37.3bn (-16.0% yoy) while imports stood at $10.4bn (-22.2% yoy) bringing the trade balance to $26.7bn (-13.2% yoy). Meanwhile, in Japan, this morning the final Q2 annualized GDP growth rate came in line with expectations and 0.5pp lower than the initial read at +1.3% qoq.

Although China’s trade data was soft, Friday’s RRR cut by the PBoC has helped equity markets to post modest gains this morning with the Shanghai Comp (+0.36%) and CSI 300 (+0.27%) both up. The Kospi (+0.45%) and Nikkei (+0.67%) have also risen while the Hang Seng (-0.08%) is struggling for traction a little. Meanwhile, futures on the S&P 500 are up +0.20% and WTI oil prices are up +1.11% following the news that Saudi Arabia has replaced its long-time energy minister before an OPEC+ committee meeting this week in Abu Dhabi.

As for markets on Friday, the two big risk events passed without really rocking the boat. The August jobs report showed a slightly weaker-than-expected headline number at 130,000, plus downward revisions of 20,000 to the previous two months. However, wage growth was stronger than expected at +0.4% mom and +3.2% yoy. So a bit of a wash, though yields did fall several basis points from their earlier highs. Separately, Fed Chair Powell spoke in Switzerland, the last official communication before the Fed’s media blackout period before their September 18 meeting. He said the latest payrolls report is consistent with a good economic outlook, but highlighted “significant risks.” That basically confirmed expectations for a 25bps cut later this month.

The S&P 500 ended the week +1.79% higher (+0.09% Friday), while the DOW posted a similar gain of +1.49% (+0.25% Friday). The NASDAQ gained +1.76% on the week, but lagged on Friday (-0.17%) as large-cap tech firms were hit by new reports of antitrust investigations. The NYFANG index ended +2.19% on the week (-0.72% Friday). European equities outperformed, with STOXX 600 and DAX up +2.02% and +2.11% (+0.32% and +0.54% Friday) respectively. Bank stocks were helped by higher rates, with indexes of European and US bank shares up +3.93% and +1.74% (+0.01% and -0.42% Friday).

The move in yields wasn’t eye-watering outside of a big move on Thursday, but it was still the biggest weekly selloff in eight weeks for the major benchmarks. Bunds, treasuries, and gilts ended +6.2bps, +6.4bps, and +2.7bps (-4.4bps, +0.02bps, and -9.4bps Friday) respectively. Front-end US rates increased less, with the 2-year yield up +3.6bps (+1.4bps Friday), taking the 2y10y yield curve back into positive territory after last month’s brief inversion. It ended +2.8bps steeper at 1.4bps (-1.5bps Friday). The dollar weakened -0.91% (-0.41% Friday), while EMs outperformed, with an index of EM currencies gaining +1.36% (+0.21% Friday). Credit yields were tighter in the US, with HY cash spreads -12bps narrower (-5bps Friday), though they widened in Europe by +9bps (+6bps Friday). US IG spreads traded flat, despite the largest week of issuance on record. Staying with credit on Friday Craig published a piece on US HY where he highlights the quite amazing statistic that is 2019 YTD is the only year where by HY has returned at least 10% but BBs have outperformed CCCs, both in total and excess return terms. The note touches on some of the reasons why and looks at whether the CCC/BB is a reliable leading indicator.

 

3A/ASIAN AFFAIRS

I)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED UP 25.14 POINTS OR 9.84%  //Hang Sang CLOSED DOWN 9.36 POINTS OR 0.04%   /The Nikkei closed UP 118.85 POINTS OR 0.56%//Australia’s all ordinaires CLOSED UP .11%

/Chinese yuan (ONSHORE) closed DOWN  at 7.1259 /Oil UP TO 56/72 dollars per barrel for WTI and 61.81 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.1259AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1211 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 BELOW 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

Is China using Fentanyl as a “Chemical warfare: against the USA.?Tons of this deadly drug continues to enter into the uSA. China is refusing to stop it in the same manner as the opiods wars started at the end of the 18th Century.China lost and that is how HOng Kong became a British colony.

(zerohedge)

China Is Using Fentanyl As “Chemical Warfare” Against US, Experts Say

After President Trump’s recent disappointment at China’s lack of progress in stalling fentanyl exports to the US, increasingly outspoken anti-China activist Kyle Bass is highlighting the potential return of ‘Opium Wars’ as an intentional attack on Americans.

“The Opium Wars, beginning in the late 18th century, took China from the world’s largest economy to less than half afterwards. China is using [the same] asymmetric chemical warfare against the United States.

We lost 2,977 lives (net of the 19 hijackers who don’t matter) in the Sept 11th attacks. We now lose 50,000 people per year to opioid overdoses. That’s almost 7 deaths per hour every day every year. China is responsible for 90% of fentanyl coming into our country.

Chinese killing of US citizens through fentanyl exports is the functional equivalent of more than 10 Sept 11th attacks each year. When will our entire government realize that china’s communist party is our mortal enemy? When will we disengage with the murderous regime?

And, as The Epoch Times’ Bowen Xiao details, behind the deadly opioid epidemic ravaging communities across the United States lies a carefully planned strategy by a hostile foreign power that experts describe as a “form of chemical warfare.”

It involves the production and trafficking of fentanyl, a synthetic opioid that caused the deaths of more than 32,000 Americans in 2018 alone, and fentanyl-related substances.

China is the “largest source” of illicit fentanyl in the United States, a November 2018 report by the U.S.-China Economic and Security Review Commission stated. That same commission said that since its 2017 report, they found no “substantive curtailment” of fentanyl flows from China to the United States. They also noted that in “large part, these flows persist due to weak regulations governing pharmaceutical and chemical production in China.”

President Donald Trump has continued to increase his crackdown on fentanyl—he recently ordered all U.S. carriers to “search for and refuse” international mail deliveries of the synthetic opioid pain reliever. Trump specifically named FedEx, Amazon, UPS, and the U.S. Postal Service (USPS).

Jeff Nyquist, an author and researcher of Chinese and Russian strategy, said China is using fentanyl as a “very effective tool.”

“You could call it a form of chemical warfare,” Nyquist told The Epoch Times.

“It opens up a number of opportunities for the penetration of the country, both in terms of laundering money and in terms of blackmail against those who participate in the trade and become corrupt like law enforcement, intelligence, and government officials.” 

China also uses the money generated by the importing of fentanyl to effectively “influence political parties,” according to Nyquist.

“It opens doors for Chinese influence operations, Chinese People’s Liberation Army, and intelligence services, so that they can get control of certain parts of the U.S.,” he said.

In August, Trump called out Chinese leader Xi Jinping, accusing him of not doing enough to stop the flow of fentanyl, which enters the United States mostly via international mail.

Liu Yuejin, vice commissioner of the China National Narcotics Control Commission, disputed Trump’s criticism, telling reporters on Sept. 3 that they had started going after illicit fentanyl production, according to state-controlled media. China also denies that most of the illicit fentanyl entering the United States originates in China.

“President Xi said this would stop—it didn’t,” Trump said on Twitter on Aug. 23.

Overdose deaths from synthetic opioids such as fentanyl surged from around 29,000 in 2017 to more than 32,000 in 2018, according to data from the Centers for Disease Control and Prevention (CDC).

Not all opioid-related deaths in the United States can be blamed on China’s fentanyl export policies, as some come from prescription overdoses, according to Dr. Robert J. Bunker, an adjunct research professor at the U.S. Army War College Strategic Studies Institute.

But Bunker told The Epoch Times that China is still “greatly contributing” to America’s opioid epidemic. Bunker described how Beijing is using the trafficking of dangerous drugs to achieve its greater Communist Party goals.

“Contributing to a major health crisis in the U.S., while simultaneously profiting from it would in my mind give long-term CCP plans to establish an authoritarian Chinese global system as a challenge to Western liberal democracy,” he said via email.

“[It’s] a win-win situation for the regime,” he continued. “In fact producing and sending fentanyl to the U.S., which could be considered a low-risk policy of ‘drug warfare,’ is very much in line with the means and methods advocated in the 1999 work ‘Unrestricted Warfare.’”

The book mentioned by Bunker is authored by two of China’s air force colonels, Qiao Liang, and Wang Xiangsui, and published by the People’s Liberation Army.

Local police, fire department, and deputy sheriffs help a man who is overdosing in the Drexel neighborhood of Dayton, Ohio, on Aug. 3, 2017. It’s unclear what he overdosed on. (Benjamin Chasteen/The Epoch Times)

Recent cases of fentanyl-related overdose and deaths are linked to “illegally made fentanyl,” the CDC has said. Fentanyl has been approved for treating severe pain for conditions such as late-stage cancer. Fentanyl is 50 times more potent than heroin and 100 times more potent than morphine. It is prescribed by doctors through transdermal patches or lozenges.

A USPS spokesman told The Epoch Times they are “aggressively working” to add in provisions from the STOP Act. The Synthetics Trafficking and Overdose Prevention legislation, signed in 2018 by Trump, aims to curb the flow of opioids sent through the mail while increasing coordination between USPS and the U.S. Customs and Border Protection (CBP).

USPS has notified China’s postal operations that if any of their shipments don’t contain Advance Electronic Data (AED), they “may be returned at any time,” the spokesman said via email. CBP is also notifying air and ocean carriers to confirm that 100 percent of their postal shipment containers have AED before loading them onto their conveyance.

Recent Seizures

In August, law enforcement seized 30 kilograms (around 66 pounds) of fentanyl,among other narcotics as part of a major arrest operation over the course of three days.As a result, officers arrested 35 suspects for “conspiracy to distribute and possess with intent to distribute large amounts of heroin, fentanyl, cocaine, and cocaine base.”

G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, said in a statement that the amount of fentanyl seized was enough to “kill over 14 million people.” One of the suspects in Virginia had ordered the fentanyl from a vendor in Shanghai and was receiving it at his residence through USPS, according to the indictment.

“The last thing we want is for the U.S. Postal Service to become the nation’s largest drug dealer, and there are people way above my pay grade working on that, but absolutely, it’s about putting pressure on the Chinese,”Terwilliger said.

CBP Enforcement Statistics reveal that fiscal year seizures of illicit fentanyl spiked from about one kilogram (2.2 pounds) in 2013 to nearly 1,000 kilograms (2,200 pounds) in 2018. The number of law enforcement fentanyl seizures in the United States also vaulted from about 1,000 in 2013 to more than 59,000 in 2017.

Also, in August, the Mexican navy found 52,000 pounds of fentanyl powder in a container from a Danish ship that was coming from Shanghai. The navy intercepted the unloaded 40-foot container on Aug. 24, at the Port of Cardenas.

“There is clear evidence that fentanyl or fentanyl precursors, chemicals used to make fentanyl is coming from China,” Dr. Andrew Kolodny, co-director of Opioid Policy Research at the Heller School for Social Policy and Management, told The Epoch Times.

A fatal dose of fentanyl displayed next to a penny. (DEA)

Two commonly used fentanyl precursors are chemicals called NPP and 4-ANPP. In early 2017, journalist Ben Westhoff started researching the chemicals, finding many advertisements for them all over the internet from different companies. He later determined a majority of those companies were under a Chinese chemical company called Yuancheng, according to an excerpt from his upcoming book “Fentanyl, Inc.: How Rogue Chemists Are Creating the Deadliest Wave of the Opioid Epidemic,” an excerpt of which was published in The Atlantic.

Fentanyl Analogs

One of the concerns related to the production of illicit opioids is the creation of fentanyl analogs, products that are similar to fentanyl and also simple to make.

“You can very easily manipulate the molecule and create a new fentanyl-like product that hasn’t been banned, that’s not technically illegal,” Kolodny told The Epoch Times.

“Some of the manufacturers, the folks creating the drugs, are aware of that.”

“We saw this with other synthetic drugs that are abused in the U.S., when law enforcement make the drug illegal or when they ban the molecule,” he said. “In some cases, fentanyl analogs are even stronger than fentanyl. There’s an analog called carfentanil, which is even more potent than fentanyl.”

Carfentanil has a quantitative potency “approximately 10,000 times that of morphine and 100 times that of fentanyl,” according to the National Center for Biotechnology Information.

Just one microgram is needed for carfentanil to affect a human. The drug is “one of the most potent opioids known” and is marketed under the trade name Wildnil “as a general anesthetic agent for large animals.”

“Sometimes, it’s hard for law enforcement to keep up with the chemist,” Kolodny added.

A bill dubbed the SOFA Act or the “Stopping Overdoses of Fentanyl Analogues Act,” has yet to pass Congress. The act was introduced in May by Republican senators and would give law enforcement “enhanced tools to combat the opioid epidemic and close a loophole in current law that makes it difficult to prosecute crimes involving some synthetic opioids.”

Kolodny said pharmaceutical industries have been lobbying to stop any legislation meant to restrict fentanyl analogs “because these are products they are trying to bring to market.”

In August, an Oklahoma judge ordered Johnson & Johnson to pay $572.1 million to the state for deceitfully marketing addictive opioids. The sum was less than what investors had expected, according to Reuters, which resulted in shares of the multinational corporation rising in value.

“We should be doing everything we can to keep fentanyl out of the country,” Kolodny said. “We should be doing everything we can to ban fentanyl analogs.”

Billion-Dollar Grants

As part of the Trump administration’s latest efforts to combat the opioid crisis, the U.S. Department of Health and Human Services (HHS) on Sept. 4 announced nearly $2 billion in funding to states.

The funding would expand access to treatment and also support near-real-time data on the drug overdose crisis, according to a release.

In announcing the move, White House counsel Kellyanne Conway told reporters in a conference call that their administration is trying to interject the word “fentanyl” into the “everyday lexicon” as part of their efforts to increase awareness.

Data suggests that of the approximately 2 million Americans suffering from opioid use disorder, approximately 1.27 million of them are now receiving medication-assisted treatment, according to the HHS.

“Central to our effort to stop the flood of fentanyl and other illicit drugs is our unprecedented support for law enforcement and their interdiction efforts,” she said.

Conway then brought up the DHS seizures of fentanyl in 2018, which totaled an equivalent of 1.2 billion lethal doses.

“Ladies and gentlemen, that is enough to have killed every American four times,” she told reporters.

Just weeks ago, the White House released a series of private-sector advisoriesaimed to help businesses protect themselves and their supply chains from inadvertently trafficking fentanyl and synthetic opioids.

The four advisories aim to stem the production and sale of illicit fentanyl, fentanyl analogs, and other synthetic opioids. The advisories focus on the manufacturing, marketing, movement, and monetary aspects of illicit fentanyl.

In March 2018, the Interior Department created a task force aimed to specifically combat the crisis on tribal lands. Since then, the department has arrested more than 422 individuals and seized 4,000 pounds of illegal drugs worth $12 million on the street, including more than 35,000 fentanyl pills.

Conway, on the conference call, described the epidemic of pain relievers as an “opioid and fentanyl crisis.”

END
Jeffrey Snider gives a detailed explanation for the RRR cuts by China.  It is not for stimulus but because the banks are lacking dollars and the cuts are to free up some yuan to obtain badly needed dollars
(Jeffrey Snider.Alhambra)

China RRR Cuts Are Not Stimulus, They Are A Warning

Authored by Jeffrey Snider via Alhambra Investment Partners,

Chinese monetary authorities announced yesterday what will be for some of its banks a seventh round of “stimulus.” For the largest institutions, it will “only” be their sixth and the first one since January 2019. The PBOC has decided it is time for more RRR cuts. Effective September 16, the ratio all banks are required to hold of reserves will be reduced by 50 bps; applying to certain city banks, the decrease will be 100 bps.

It sounds like a flood of stimulus, enabling China’s beleaguered financial system to utilize more of its own stored up monetary resources. A lower RRR means they can put more of these reserves, more of their money to work in the Chinese economy. That’s how these measures are universally characterized. As you’ll see in every news report, the claim 50 bps RRR is equal to unlocking about RMB 900 billion “liquidity.”

While that may be technically true, it is still a lie of omission. What’s left out of the story is vastly more important. You are left with the misimpression that this is an effective surplus of funds which will be thrown on top of an otherwise static and stable condition. A net increase.

What’s really happening, and why RRR’s are a warning rather than stimulus, is that the 900 billion is meant to hopefully partially fill in a much bigger and more dynamic funding/liquidity gap that already exists.

This is both how and why come September 16 there will have been six rounds of such “stimulus” (7 for small and medium banks) and still there is a clear need for it. If it is stimulus it isn’t very effective. And the reason isn’t China’s trade spat with the US, it is the massive dollar hole which the Chinese just announced to the world they expect to get even bigger over the coming months.

We knew this was coming. How? Nothing more than overnight SHIBOR.As I wrote just a few weeks ago, China’s central bank was losing its grip on the all-important overdraft market. The RRR announcement is effective confirmation of the clear but unconfirmed SHIBOR peg (which may ultimately function more like a ceiling).

Again, there is no confirmation nor will there ever be. In my own opinion and analysis, I see China’s central bank getting backed further into a corner and having been left few appealing options it is just rerunning the playbook it used last time – even though it didn’t work out so well four years ago. For that reason alone you have to wonder just how few choices the PBOC has available.

To me, a pegged overnight SHIBOR rate represents another serious escalation in the eurodollar/RMB nexus, the great monetary squeeze beyond the influence of any central bank. Not much good followed August 2015. China seems to be replaying a lot of August 2015 right down to its distracting trivia.

What that shows is how RMB liquidity was drying up all over again.

The sideways track to SHIBOR meant an escalation in this liquidity fight. Something had changed toward the end of July which had meant the central bank had to actively supply (via OMO’s) what the market no longer would – despite those previous RRR’s and trillions of previously unlocked RMB reserves. If the PBOC didn’t add this supply, the overnight rate in all likelihood would’ve skyrocketed.

We can only conclude something changed. A much bigger hole.

What the RRR’s are intended to accomplish this time is to make up for what the PBOC is now reluctantly supplying. They don’t want to peg (or put a ceiling on) SHIBOR. But it’s also gone on long enough that officials know without some other means they’re otherwise stuck doing this.

And that’s before factoring what will surely be an even larger dollar gap over the coming months.As I wrote last October, just before the global eurodollar landmine:

The RRR cut signals that the reserve problem therefore dollar problem is anticipated to grow worse. The PBOC is actually telling us that they expect in the months ahead the same or perhaps bigger commitment to “stepped up support.” CNY doesn’t need support if there is no worsening “capital outflow” situation of retreating eurodollar funding.

Within a month of writing that, the ticking clocks began. What that means as far as RMB is concerned is further constraint, constraint, constraint.

There is no mystery in any of this, merely layers of misconceptions piled one on top of another for no other reason than unexamined myths and short-hands. Starting with effective global dollar liquidity. We know right where China’s problem originates because you can trace it back to the source using nothing other than the PBOC’s very own balance sheet:

I’ve written many, many times over the years since 2014 how it is China’s central bank which may be, probably is, the most accurate indication of eurodollar supply and condition there is. You want to know about dollars, look to the PBOC; actions, not press releases. 

A big and persistent dollar shortage is in actual practice what the mainstream today writes about the Fed’s QT in theory. Bigger dollar shortage means less dollar assets on the central bank balance sheet which has to be balanced by lower liabilities; in China’s case both currency issued and far more so bank reserves.

The RRR’s are supposed to offset that massive hole in bank reserves which only gets bigger the longer this goes. What SHIBOR shows us is despite mainstream claims to the contrary this isn’tan exact science. Far from it, it is a haphazard, ad hoc desperation toss because that’s all they have left in their toolkit. Fingers crossed, not mechanical precision.

This is exactly what you see in overnight SHIBOR: bigger dollar funding gap, less bank reserves, more RRR’s and an overnight rate that is all over the place. Or it was, before “someone” stepped in before August. Not only does it explain a lot about China’s economy, it fits the trend in dollar market indications (curve distortions), as well.

The real danger has always been bank hoarding; the PBOC counting on its domestic banking system to make up in RMB what the central bank can no longer supply and the banking system saying back to them, thanks but no thanks.

Like 2015, when the PBOC last intervened in SHIBOR, there’s the growing chance that China’s financial system even if given the privilege of using more of their reserves via RRR cuts they’ll choose instead notto – because of their own perceptions about risk and liquidity (and liquidity risk). Perceptions of things getting worse.

That much has already been implied by the sideways SHIBOR.

RRR’s are not stimulus. They are a warning. Escalation.

end

Protest continue for the 14th straight week despite Lam’s removal of the much hated extradition proposal.

(zerohedge)

Hong Kong Protesters Urge Trump To “Liberate” City In March On US Consulate

This certainly won’t help perceptions from the mainland after a summer that’s witnessed Beijing authorities repeatedly blame a US “hidden hand” for fueling the Hong Kong crisis: thousands of protesters Sunday were heard calling for President Trump to “liberate” the Chinese-controlled territory. Reuters reports the appeal for US intervention was made during a march in front of the US Consulate:

Thousands of protesters earlier sang the Star Spangled Banner and called on U.S. President Donald Trump to “liberate” the city. They waved the Stars and Stripes and placards demanding democracy.

 

Sunday protests in Hong Kong near the US consulate. Image source: Getty/CNN

The demonstrators directly handed petitions to US consular officials reportedly while chanting“Fight for freedom, stand with Hong Kong,”and further others which said “Resist Beijing, liberate Hong Kong.”

The Young Reporter@hkbutyr

3:06pm: Protesters calling for @realDonaldTrump to “liberate Hong Kong”, while waving US flags

Embedded video

The call for US “intervention” comes interestingly even after HK leader Carrie Lam publicly announced Wednesday she was formally withdrawing the controversial extradition bill, which sparked the protests earlier this summer in the first place.

Reuters Top News

@Reuters

Thousands of Hong Kong protesters chant the U.S. national anthem and call on President Donald Trump to ‘liberate’ the Chinese-ruled city. More here: https://reut.rs/2UDOEDV

Embedded video

Sunday’s protesters called for the passing of the proposed “Hong Kong Human Rights and Democracy Act 2019” by US Congress and handed out flyers and petitions.

Reuters reported further that, “Protesters, in a petition handed to the U.S. Consulate, urged that it be passed in full.”

The proposed Act would require Washington each year to made a formal assessment of Hong Kong’s level of autonomy from Beijing and allow the US to take punitive trade measures if autonomy is compromised.

 

Sunday protest outside the US consulate, via AP.

Also interesting is that China a month ago formally complained to US diplomatic officials over viral photos showing a US official from HK consulate meeting with well-known anti-Beijing protest leaders and activists.

Mainland state media had featured the meeting and it was widely held up as ‘proof’ of the ‘black hand’ of US government involvement in the increasingly violent anti-Beijing demonstrations.

A common theme of mainland coverage of the protests have been to blame US covert action for “fomenting unrest”.

CCTV Asia Pacific@CCTVAsiaPacific

🇭🇰A photo taken by a passerby shows the meeting between HK separatists and Julie Eadeh, the political unit chief of USCG, at JW Marriott Hotel at 5 pm Thursday. It’s wildly used by local media, as an evidence of how close the US politicians are related to the anti-gov’t movements

View image on Twitter

Bloomberg reported at the time China sent a clear and firm message to US diplomats that “China firmly opposes any contacts with them and urges U.S. to stop sending wrong signals to violent law breakers in Hong Kong.”

Sunday’s PR move to gain the greater attention of both Trump and the US Congress certainly won’t help in dissuading Beijing that there isn’t a US-HK conspiracy afoot.

end

 

4/EUROPEAN AFFAIRS

Our three resident experts on Brexit give their thoughts on how the Brexit will proceed.  Put your money on No2 Mish

(Tom Luongo.Mish Shedlock/Michael Every)

Boris Johnson – Brexit Hero-In-The-Making Or Goat?

Authored by Tom Luongo,

This week’s Brexit drama was vitally important for Boris Johnson. And intentional or not he has maneuvered events to a very interesting inflection point.

The random acts of vandalism performed by Remainers on all sides of the political aisle in the House of Commons were, I think, invoked by Johnson himself strategically.

And I come to that conclusion for a number of reasons. The most compelling of which is that it saves the Conservative party and also potentially shores up the British ruling class which are in danger of losing their popular mandate. Achieving a meaningful Brexit is of secondary importance.

Brexit is the defining issue of the age. It has split the people and their government. This was the strategic plan of the European Union from the moment the referendum was announced.

If the vote succeeded the price for Brexit would be the validity of the British system of government. We have nearly reached that point.

The same choice has been laid in front of Americans over voting for Donald Trump. The tactics for getting there are slightly different but the strategic goal remains the same.

But, back to this week’s events and what led up to them.

  • Boris Johnson comes into power without a political mandate, thanks to the British people’s hardening around getting on with Brexit.
  • Jeremy Corbyn didn’t call for a Vote of No Confidence in Theresa May’s government because Labour would lose.
  • To stave off the surge from Nigel Farage and the Brexit Party Johnson forms a Euroskeptic cabinet sure to panic Remainers.
  • He then steps up the rhetoric of a No-Deal Brexit on Halloween come what may.
  • Farage smartly sees what Boris is doing and steps up plans for the Brexit Party to challenge a General Election fully to scare Johnson into delivering on his promises.
  • Johnson then prorogues Parliament but not past the 31st of October because that would tip his hand about a No-Deal which could risk alienating too many voters.
  • This forces the Remain camp to harden in its rhetoric and actions to stop the dreaded No-Deal Brexit, because they see the opportunity to do so.
  • They take it and introduce the Benn-Burt Bill to force Johnson to accept an extension to Article 50. [Key point]
  • He offers Parliament a General Election before the Brexit date, after the bill passes the House of Commons and sacks 21 members of his party for voting against him.
  • They refuse because they would lose their majority that want to Remain in the EU.
  • Then the Tories end the filibuster in the House of Lords paving the way for Johnson to swallow the bill and go to the Queen for Royal Assent.

This is the timeline. Now, this puts Johnson in charge of the situation completely. Remain has played their hand. Their cards are on the table.

Here’s the rub. The following is why Johnson can still raise the pot.

Parliament is a law-advising body. The Government proposes legislation: The Houses discuss and amend it and send it back to the Government, which then presents it to the Sovereign — the Queen — to put into law.

… when Parliament seizes control of the floor, any legislation it forces onto the government still has to be taken by the government to the Queen. If the government refuses, it opens itself up to a vote of no confidence and the government could fall in a general election.

… Parliament doesn’t represent the current polling. The opposition is the one without the mandate and they know it. Otherwise they would have agreed with the government’s bill to call an election before the Article 50 deadline of Halloween to seize power and stop Brexit.

So, Parliament putting forth a bill that the government doesn’t agree with but who still has the confidence of the House of Commons is under no obligation to present the bill to the Queen. Johnson can simply sit on it and dare Corbyn, et al., to remove him from office.

That’s the key.

The question today is,”Does Boris Johnson do this?” I think he does because of the benefits it accrues to the Conservatives and British Elite who are losing the faith of the people.

Brexit has to be delivered, even if it is a terrible version of it. But, Johnson and crew see the opportunity to remake the British political class in their image and they will use Brexit to make that happen.

To achieve Brexit it has to happen without the current Parliament. For the Tories to command a strong showing against Farage and the Brexit Party he has to purge them of their remaining Remain members. This especially includes prominent figures who have openly conspired with Brussels to stop Brexit — Philip Hammond, Dominic Grieve, Ken Clarke.

These are cataclysmic political events. The message is clear, “No one is safe.”

Strategy requires that Johnson win these battles first before tackling Brexit. The best way to defeat your enemy is to bring him out into the open on a battlefield of your choosing.

The Government makes laws in the U.K., not the House of Commons. This is the Government’s turf. Johnson called the Remainers bluff on this bill by offering them the one thing they are supposed to want but are desperate to avoid, an election.

Johnson looks like the magnanimous one, respecting the people’s will while Parliament looks like the tyrannical and disconnected overmasters pathetic in their desperation to retain power and sell out the country to the European Union.

Moreover, Johnson’s ploy here is putting Labour in a bind. Leader Jeremy Corbyn would do the right thing, go for an election, if Brexit is delayed and Johnson honors the Benn/Burt bill. Brexit would be delayed until the end of January but Parliament would no longer be capable of blocking Brexit, which is, ultimately, what Corbyn wants.

It is the rest of his Shadow Cabinet do not want that. Nor do they want Corbyn in power anymore. You can see the strings on the hands of Keir Starmer, Yvette Cooper and the rest as Tony Blair and George Soros tug on them.

So, there is the possibility here of splitting Labour down the middle as well.

For a Tory loyalist like Boris Johnson this is the Trifecta. Secure Brexit, even if it’s just in name only via a tweak to May’s Horrific Treaty(tm), ensure a Tory victory at the next election whenever it happens and split Labour if not kill it outright.

And that is the worry for those that believe in sovereignty and human dignity. Because Johnson could win this fight completely in the next few days and then betray Brexit at the 11th hour.

He simply refuses to offer the bill to the Queen, which is within his Prerogative as he is in charge of treaty negotiations not Parliament, prorogues Parliament with the bill pending. It expires along with all the others outstanding.

The clock restarts when they come back on October 14th. At that point there isn’t time for a General Election so reintroducing the bill would be pointless because Johnson can then run out the clock.

Parliament would then have to take whatever Johnson offers when he comes back from Brussels.

And that’s where this whole drama comes to its conclusion.

Will Boris Johnson keep his word to the British people and take them out without a deal which is what he has campaigned on or will he blackmail Parliament and the British people with Mrs. May’s Treaty of Surrender tweaked slightly on the Irish backstop?

  • If he does the former he’ll be a hero and will change the face of the world.
  • If he does the latter he’ll be a the Goat that Betrayed Britain.

Choose wisely Boris. Nigel is watching.

*  *  *

Join my Patreon if you want to know how to play Brexit. Install Brave if you want to continue talking honestly about it.

END

A Brexit Trap? BoJo’s Nine Options

Authored by Mike Shedlock via MishTalk,

Nearly every Brexit headline in recent tout the mistakes of Boris Johnson and how he now trapped into stopping no deal.

I strongly disagree with that synopsis.

Johnson has a number of options at his disposal, some of them truly bizarre. It’s the bizarre ones that have gathered the most attention.

Let’s discuss all of Johnson’s options along with Remainer options to circumvent them.

First let’s discuss the Benn Bill and how it allegedly ties Boris Johnson’s hands. That link shows the actual bill in Tweet form.

Benn’s Own Synopsis

What Benn Says his bill does, is easier to understand.

The politician said:“The purpose of the Bill is to ensure that the UK does not leave the European Union on the 31 October without an agreement, unless Parliament consents.

“The Bill gives the Government time either to reach a new agreement with the European Union at the European Council meeting next month or to seek Parliament’s specific consent to leave the EU without a deal.“If neither of these two conditions have been met, however, by 19th October – ie the day after the European Council meeting concludes – then the Prime Minister must send a letter to the president of the European Council requesting an Article 50 extension until 31 January 2020.”

Mr Benn added: “If the European Council agrees to an extension to the 31 January 2020, then the Prime Minister must immediately accept that extension.

“If the European Council proposes an extension to a different date then the Prime Minister must accept that extension within two days, unless the House of Commons rejects it.”

Date Discussion

The October 19 is a Saturday. Perhaps Commons agrees to meet Sunday the 20th.

If not, October 21.

Either way, the date is well within the 14-day window in which Parliament’s hands may be tied.

14 days pertains to the time frame and options given to a prime minister losing a motion of no confidence.

Benn Bill is Illegal – Challenge on Monday?

The Benn Bill passed the House of Lords on Thursday and a Legal Challenge May Come Monday.

The bill is clearly illegal. I discussed the legal reasons above, in detail

In short, the Bill is illegal because it strips the government of its legal rights to conduct international negotiations.

The Bill passed the House of Commons because Speaker John Bercow ruled the Bill did not require “Queen’s Consent”.

Undoubtedly, the Bill does require Queen’s consent.

Thus, Johnson may pursue a legal challenge. But when?

Weird Turn of Events

On Thursday, September 5, I reported Another Weird Brexit Turn.

Out of the blue, after filibustering for hours, the government Whips not only halted their own filibuster but also instructed Tories to vote for the Benn Bill.

Johnson may have set a date trap.

“Never Request an Extension”

  • Boris Johnson has stated he will “never request an extension”.
  • He also stated “I’d rather be dead than ask for a delay”.

I suspect both statements are a lie especially the second.

Boris Johnson’s Nine Options

  1. Resign.
  2. Commit Suicide.
  3. Submit Legislation Requesting an Immediate Election.
  4. Hold a Motion of No Confidence Against Himself.
  5. Mount a Legal Challenge Against the Benn Bill. (Queen’s Consent) 
  6. Allow Royal Assent but Refuse to Comply With the Law.
  7. Allow Royal Assent, Request an Extension but Somehow Block It
  8. Ask the Queen for a Delay to Study the Legality of Benn.
  9. Allow Royal Assent, Request an Extension

I believe that covers all the bases.

1-Resign: This is possible but only inside a 14-day window before the Brexit legal default day of October 31. However, it is extremely unlikely as it gives up all control.

2-Commit Suicide: No Realistic Chance.

3-Submit Legislation: No Chance. This would only require 50% of Parliament to agree. But any legislation Johnson submits would be amendable with likely dire consequences.

4-Hold a Motion of No Confidence Against Himself: This is possible but only inside a 14-day window before the Brexit legal default day of October 31.

5-Mount a Legal Challenge : A “Queen’s Consent” legal challenge is possible. But when? Note that “Queen’s Consent” and “Royal Assent” are not the same thing. For details and discussion, please see Legal Challenge May Come Monday.

6-Allow Royal Assent but Refuse to Comply: Under this scenario Johnson simply refuses to honor the Bill.

7-Allow Royal Assent, Request an Extension but Somehow Block It: Under this scenario Johnson provides “Royal Assent” and the bill become law. This is possible, and perhaps the most likely scenario as further discussed below.

8-Ask the Queen for a Delay to Study the Legality of Benn. The purpose of this move would be to kill time and add uncertainty. Johnson would have the leisure of going along on October 14 or perhaps then asking the Queen to let the courts decide.

9-Allow Royal Assent and Honor the Extension Request: No Chance

Five Primary Options

The primary options are 4-8. Option 4 would likely occur as a result of number 6. Option 8 would morph into something else, adding uncertainty.

Let’s discuss the five most likely options.

Discussion: 6-Allow Royal Assent but Refuse to Comply

Under this scenario Johnson allows the Benn Bill to become law. He could then perhaps make a legal after-the-fact claim that Commons violated procedure to get the law passed and thus passage of the law was illegal.

Option 5 (a legal challenge) within option 6 strikes me as odd because the law will already have passed. But perhaps Johnson could mount a claim he was illegally obliged to vote against the government and thus passage itself was illegal. Curiously, Johnson might select this path even knowing it is doomed, simply to buy needed time.

Alternatively, Johnson could refuse to comply then use that as the basis to file a motion of No Confidence against himself or resign. A motion of no confidence under these any refuse-to-comply scenario would surely pass. But it takes a day of debate and then a vote.

Resignation in a refuse-to-comply scenario would allow the opposition to immediately come up with an alternate candidate caretaker government. The caretaker would in turn immediately request an extension and perhaps do other damaging things. This is why I rule out resignation.

Assume the Commons outs Johnson. They vote for a caretaker government. The law is unclear as to what happens if Johnson refuses to resign.

Johnson’s options may be limited and circumvented but so might Parliamentary options once we get inside the 14-day window.

We do not know what other tricks or traps may be in place by either side.

Discussion: 4-Hold a Motion of No Confidence Against Himself

If Johnson selects this option, it would most likely be in conjunction with option 6 discussed above.

It’s possible, perhaps as a final act of desperation.

Discussion: 5-Mount a Legal Challenge Against the Benn Bill

This may happen Monday or after option 6 discussed above.

I strongly believe a legal challenge would win, but that could give Parliament a huge incentive to to oust Johnson sooner rather than later.

If Johnson does not mount a legal challenge on Monday, it will be on purpose, not because a challenge would lose.

Thus, Johnson may allow the bill to become law without challenge, knowing full well that it is illegal. I am unsure if that completely rules out a legal challenge later. Who really knows how the courts might decide?

Perhaps Johnson understands he could not realistically mount a legal challenge after the bill received Royal Assent, but goes ahead anyway. That tactic would kill some perhaps crucial days as the case proceeded through the courts, no doubt fast-tracked.

Issuing a legal challenge even at a late state is more likely than refusing to comply with the law without offering a reason.

Discussion: 7-Allow Royal Assent, Request an Extension but Somehow Block It

Sorting through the options, this could easily be Johnson’s best bet.

What might he do?

Get a commitment from France or Hungary to block the extension request. Yet, it’s risky because France and Hungary might lie.

Even if Johnson put in place a poison pill, the EU might all go along knowing full well that Parliament would then elect a caretaker government and pass emergency legislation.

Neither side one can be trusted here.

A trap may have been set for Johnson. But we do not know what other tricks may be up Johnson’s sleeve. There are potential traps both ways.

I have an idea but will not write it up here as I do not want it to be public. Instead, I will pass it on to Nigel Farage hoping he will listen.

Discussion: 8-Ask the Queen for a Delay to Study the Legality of Benn

A delay chews chews up time and adds uncertainty. Instead of asking the Queen to rule, Johnson asks for time.

Then on October 14, Johnson could grant assent, advise the Queen the bill is illegal, or ask the queen to allow the courts to decide.

Eventually, option 8 would morph into 4, 5, 6, or 7. It also kills a lot of time.

Who is the Trapee?

Parliament is suspended by order of the Queen from the end of the session on Monday, September 9 until October 14.

That suspension is iron-clad having already survived multiple court challenges.

Given the options discussed above, I caution against premature conclusions no matter what “apparently” happens on September 9.

Do not despair if Johnson fails to file a “Queen’s Consent” legal challenge. It will be for a reason.

This is a very complicated mess right now.

end

Rudd-y Hell, It’s The Boris/Toff-Fibbentrop Pact

Submitted by Michael Every of Rabobank

Today’s Daily title may or may not be my own ‘Super-Caley-go-ballistic-Celtic-are-atrocious’ but it hopefully sums up part of the latest Brexit developments in what is a swirling eddy of unprecedented precedents. Cabinet member Amber Rudd has followed PM Johnson’s brother in resigning over the prospect of a looming Hard Brexit, dealing the government a further blow to its authority and majority. However, as UK political commentators make clear, for all the headlines this latest walk-out has generated it actually changes little in an underlying UK dynamic that seems to be heading to a point of praxis… and which GBP is pricing as if it were panacea.

Indeed, Rudd is just one of many threads unravelling. We also have talk of the Tories running a candidate against the current House Speaker John “Ordaaaa” Bercow, which is totally against precedent – though Bercow’s actions in favour of thwarting Brexit are widely accepted to be totally against parliamentary precedent too. Moreover, we have suggestions that while the ‘rebel alliance’ legislation forcing PM BoJo to “seek” and “agree” an extension to Article 50 will become law today (after having been rushed through the Lords in, yes, an unprecedented fashion), the government is prepared to question the legality of the law itself.

There are mutterings about “Queen’s assent v. consent”, for those who dig into constitutional law; there is a suggestion the PM might send documents to the EU alongside the mandated request for an Article 50 extension stating he has no good reason at all for wanting one, to try to shoot it down; and that the British are pledging to blockade normal working of the EU if forced to remain; and, as previously noted, it has even been floated that Johnson might opt to go to prison rather than implement the law as stated.

 

In short, the Tories are going to use every trick in the book to try to ensure that the 31 October deadline still holds, law or no law. Scare tactic bluff or not, the message from them is that today is the last chance for parliament to vote for a general election on the Brexit issue on an In vs. Out basis before that Halloween date with destiny – because from today parliament can be prorogued and sent home (which is legal according to two sets of judges, and has precedent, including under former Tory PM Major – who has been so active in trying to prevent the same action being repeated).

Put this all together and, from an EU perspective, what you do not have is a member state that is in any fit state to retain membership even if this is about to be requested. Indeed, in yet another Brexit irony, the Remainers who bemoan Leavers’ solipsism are themselves not noticing it is not in the UK’s power to gain an Article 50 extension, and the EU is perhaps not going to prove enthusiastic about retaining such a problematic partner. Exhibit A: the French foreign minister saying the EU can’t keep going through this every three months, and right now he doesn’t see a reason to grant an extension at all.

And so to our title’s ‘pact’. Surely–and perhaps though perhaps not today–a parliamentary dissolution and generation-defining general election looms. In which case, the Tories of Boris Johnson and his aristocratic lounge-lizard Jacob Rees-Mogg (Boris/Toff) have been publicly approached by the allegedly-highly-mendacious Brexit party of Nigel Farage (Fibbentrop) for an electoral pact to ensure a Hard Brexit victory. Of course, this potential link-up comes as little surprise to anyone looking which way the Tories are running under BoJo…and is arguably exactly why he is doing it. The polls certainly make that look a done deal from a traditional perspective. To counter that there is already talk of a tactical Remain alliance: however, what exactly do Labour, the Lib-Dems, the SNP, etc., have in common in a government apart from wanting to Remain? (And does Labour want to Remain or have another referendum and then Remain?) In short, another big and crazy and deeply political day looms in the UK.

Meanwhile, believe it or not, things of note are happening elsewhere. In particular, China has underlined just how spectacularly well it is doing on the economic front with another 50bp cut in its banks’ reserve requirement ratio (RRR) to 13.50%, which as the press report, will “free up CNY900bn” in new liquidity. First, that is less than an average month of total aggregate financing, so it’s hardly a game-changer. Second, how do you force the banks to lend to those who need it most? The answer so far as the RRR has declined 850bps is….you don’t. As such, China is also talking about bringing forward special bond issuance for local government spending from 2020 to 2019, which luckily isn’t included as part of the fiscal deficit! (“because China”). So more pump-priming. China is also widely-tipped to be cutting the RRR again going forwards, and to lower key lending rates further.

One might be excited for a moment about all that Chinese stimulus – and then one looks at the latest trade data and one sobers up. In USD terms imports slumped -5.6% y/y, which makes clear that either China is in recession OR it has decided to onshore supply chains as much as possible in exactly the way Donald Trump would like to and isn’t (and to none of the vitriol he is receiving for trying to do so). Either way–and the balance of evidence says it is the supply chains more than the demand chain–this means any Chinese stimulus is going to stay in China…that’s if it finally works this time – sorry world, you are on your own. At the same time, China’s exports were -1.0% y/y, worse than expected, and showing that there will continue to be downward pressure on CNY too, especially as even bullish White House Larry Kudlow implies there is no major trade deal likely near term, and as China suggests it might only buy “modest” amounts of US agri in exchange for action on US tariffs. Sorry world, you are going to have lots more Chinese competition ahead too.

I haven’t dived into the US payrolls data from Friday, which were somewhat weaker than expected at 130K, including 25K hiring from the census, largely because the difference between the actual and consensus outcome (-34K) is basically statistical noise regardless of the narratives one might then see spun from just one month’s numbers. Those are truly ‘Super-Caley-go-ballistic-Celtic-are-atrocious’.

end
UK Parliament speaker Bercow announces his resignation
(zerohedge)

UK Parliament Speaker Bercow Announces Resignation

In the latest resignation announcement from a key figure in the UK government, Commons Speaker John Bercow, who has faced scrutiny and even an attempt by some of his fellow Tories to oust him , said Monday afternoon (London Time) said he would stand down as Speaker by the end of October.

Bercow’s announcement prompted the pound to soften against the dollar.

Source: Bloomberg

The pound started to weaken earlier after the Queen assented to a law prohibiting a no deal Brexit.

Source: Bloomberg

Bercow said that if the Commons votes for an early general election, his tenure as Speaker and as an MP will end when this Parliament ends. And if MPs do not vote for an election, Bercow has concluded that the least disruptive option for him would be to stand down at the close of business on Oct. 31, according to the Guardian.

The votes on the Queen’s Speech are taking place early this week, and Bercow said it would make sense to have an experienced Speaker in the chair for those votes.

end
Eric Reguly of the Globe and Mail  Toronto gives his opinion of why the European banks are trembling over fears of more negative rates
(zeorhedge)

Abolishing interest rates sounds like the greatest idea since spray cheese. Money for nothing, mortgages for free! In Denmark, Jyske Bank AS is offering 10-year mortgages where the bank actually pays the borrower interest of 0.5 per cent a year. Imagine that. But that’s what happens when the banking world turns upside down.

Interest rates are tumbling everywhere and turning negative in some spots. The central banks in Switzerland, Denmark, Sweden and the euro zone (the European Central Bank) have all slapped minus signs ahead of their key rates. Some US$15-trillion of bond debt around the world comes with a negative yield, that is, their investors will get back less than they paid out if they hold the bonds to maturity.

In Europe, the yields on the 10-year sovereign bonds of Austria, Belgium, Denmark, Finland, France, Germany, Ireland, the Netherlands, Sweden and Switzerland are all negative. And the ones that are still positive are barely so. Today, in Europe, the default best bet is Italian bonds, which on Friday traded at a yield of 0.9 per cent. At the peak of the financial crisis, in 2012, Italian yields hit 7 per cent.

Going negative
Latest yields on 10-year sovereign bonds, selected European countries*
×
Country Latest yield
Switzerland -0.89
Germany -0.60
Denmark -0.58
Netherlands -0.46
Austria -0.34
Finland -0.32
France -0.30
Belgium -0.25
Sweden -0.21
Ireland -0.05

GOING NEGATIVE

 

 

There’s a lot to like about negative interest rates, especially if you are borrower. There is a lot not to like too – especially if you are a saver. And the banking industry, especially in Europe, is worried sick about negative rates, which could soon turn even more negative if, as expected, the ECB rolls out another cut later this year (in July, the U.S. Federal Reserve cut rates by a quarter point, the first reduction in a decade).

For Deutsche Bank AG and many other banks, the negative rate world comes at an especially bad time. Deutsche Bank, a perennial restructuring story, needs all the help it can get as it fires thousands of employees and tries to find a strategy that produces sustainable profits. The German banks alone, dominated by Deutsche Bank and Commerzbank AG, estimate that negative rates cost them €2.4-billion ($3.49-billion) a year, about a third of the total cost to the euro zone banks.

At a conference this week sponsored by the Handelsblatt newspaper, Deutsche Bank’s CEO, Christian Sewing, said that “In the long run, negative rates ruin the financial system,” adding that another ECB cut “may make refinancing cheaper for states, but has grave side effects.”

The European banks tremble at the prospect of ever-deeper rate cuts because they have never fully recovered from the financial 2008-09 financial crisis, in good part because they were never propped up during the crisis like the American banks were. The U.S. financial system was treated to the mother of all bailouts. Remember former U.S. Treasury Secretary Timothy Geithner, and his “foam the runway” campaign to prevent Wall Street from collapsing through the Troubled Asset Relief Program (TARP) and the Home Affordable Modification Program (HAMP)? The two initiatives saw hundreds of billions of dollars devoted to buying bank shares and mortgage-backed securities, and propping up house owners who were on the verge of default.

The U.S. banks were saved and bank bosses like Lloyd Blankfein, of Goldman Sachs Group Inc., and Jamie Dimon, of JPMorgan Chase & Co., got obscenely rich. Their banks, and others, became stock market stars. Today, JPMorgan has a market value of more than US$350-billion. Deutsche Bank’s value is €14-billion.

To be sure, the European banks were supported, but to nowhere the same degree as their American counterparts. At the same time, the European recession lasted far longer than the American one, and just as the economy began to recover, negative rates began to appear (Denmark’s central bank was first off the mark, in 2012).

The result? The U.S. banks trade at about 1.2 times book value (assets less liabilities, in simple terms). The European banks trade at half their book value. There are two ways of looking at the European banks’ sorry book-value status. The first is that they are massively undervalued and represent great potential bargains. The second is that the ratio is deserved because the banks are in trouble and see no turnaround prospects any time soon. The latter view has been winning among investors.

 

No wonder the European banks are dumping employees and that the ECB is encouraging bank mergers, all the easier to prop them up, and reduce overhead costs, while bank shareholders and regulators pray for an economic revival. Trouble is, the European economy seems to be going in reverse. Germany, Italy and Britain – three of the four biggest economies in the European Union – seems to be heading for recession as their economic numbers deteriorate, trade tensions build and Brexit approaches.

As negative rates persist, some banks won’t make it. Even the future of once-mighty Deutsche Bank is an open question. A fresh European banking crisis is not out of the question.

end

The Euro and bund yields rise with hints that Germany is going to undergo fiscal stimulus to get its  moribund economy on track

(zerohedge)

Euro Jumps As Germany Hints At Fiscal Stimulus

The euro and bund yields are rising this morning following Reuters headlines suggesting Germany is considering a “shadow budget” with the aim to increase public investments beyond restrictions of national debt rules.

However, as Bloomberg reports, deputy finance minister, Bettina Hagedorn, confirmed that the German government’s 2020 budget and financial planning through 2023 foresees balanced budgets with no new debt:

“Should there be a need for adjustment because of overall economic developments or external factors, it will be decided in the context of the budget planning and taking the coalition agreement into account.”

Perhaps it is this official statement (that merely echoes the same rhetoric Germany has used for years) that explains the market’s lack of enthusiasm…

Bund yields briefly rose…

Source: Bloomberg

But Euro is up 20-30 pips and fading back…

Source: Bloomberg

Notably, these headlines come ahead of the German lower house of parliament debating the 2020 budget and finance plan through 2023 on Tuesday.

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Saturday: Iran/Syria/USA

Bolton lashes out as our \Iranian tanker is photographed off the Syrian port of Tartus

(zerohedge)

Bolton Lashes Out As Iranian Tanker Photographed Off Syrian Port Of Tartus

The Iranian oil tanker Adrian Darya 1 is now located just of off the Syrian port of Tartus after it spent days with its signal transponder shut off in order to evade tracking, Reuters reports, citing new satellite imagery provided by a US space technology company.

Washington has done everything short of military action to thwart and detain the vessel, including issuing a seizure warrant and bribing the ship’s captain with millions of dollars to steer it into a US-allied port.

The tanker’s last signal had been issued on Monday when it was sailing between Cyprus and Syria before it went “dark”.

US officials have also reaffirmed their belief the Iran-flagged tanker which they say is controlled the Islamic Revolutionary Guard Corps (IRGC) is bound to offload its oil to Syria (or conduct a ship-to-ship transfer) in violation of EU sanctions.

On Friday US national security adviser John Bolton tweeted a satellite image of the vessel saying in apparent frustration, “Anyone who said the Adrian Darya-1 wasn’t headed to Syria is in denial.”

John Bolton

@AmbJohnBolton

Anyone who said the Adrian Darya-1 wasn’t headed to is in denial. Tehran thinks it’s more important to fund the murderous Assad regime than provide for its own people. We can talk, but ’s not getting any sanctions relief until it stops lying and spreading terror!

View image on Twitter

Part of the US case for pressing UK/Gibraltar authorities to not release the vessel from detention last month was that it would ultimately attempt a ‘illegal’ delivery.

Gibraltar’s Aug. 15th release of the vessel after Iran issued a written assurance it would not deliver its 2.1 million barrels of Iranian oil to Syria.

* * *

Meanwhile, Syrians are celebrating the likely impending crude discharge as a welcome relief amid a summer of severe fuel shortages…

Kevork Almassian@KevorkAlmassian

For several weeks, has challenged the ‘civilized world’ to export oil to . Tanker Adryan Darya-1 is emptying its cargo of 2.1 million barrels in Tartus, which will provide Syrians including my parents heating resource in the upcoming cold winter.
Thank you, Iran 🇮🇷

END
Sunday:Iran/Syria
Iran confirms the oil tankers off loads its oil most likely to Syria\
(zerohedge)

Iran Confirms Adrian Darya Has Offloaded All Its Oil, Likely To Syria

It’s official: Iran says its Adrian Darya tanker has finally offloaded its 2.1 million barrels of Iranian oil Sunday after it was days ago spotted off the Syrian port of Tartus, bringing a lengthy standoff with the US and UK which sought to capture the vessel’s valuable cargo to an end.

“The Adrian Darya oil tanker finally docked on the Mediterranean coast… and unloaded its cargo,” Foreign Ministry spokesman Abbas Mousavi said according to state-run IRNA. He didn’t name the country which purchased the oil, but satellite images reveal the IRGC-controlled vessel hasn’t left Syria’s coast.

 

Image source: Maxar Technologies via Reuters

Part of the US case for pressing UK/Gibraltar authorities to not release the vessel from detention last month was that it would ultimately attempt an ‘illegal’ delivery of its Iranian crude worth about $130 million to Syria.

 

Gibraltar’s Aug. 15th release of the vessel came only after Iran issued a written assurance it would not deliver the Iranian oil to Syria, in violation of EU sanctions.

At the start of this weekend after the Iranian tanker was observed within a few nautical miles of Syria’s coast, John Bolton issued an ‘I told ya so’ type tweet, saying“Anyone who said the Adrian Darya-1 wasn’t headed to Syria is in denial.”

But it doesn’t appear Washington is going to do anything about it.

Washington has done everything short of military action to thwart and detain the vessel, including issuing a seizure warrant and bribing the ship’s captain with millions of dollars to steer it into a US-allied port.

Joshua Landis

@joshua_landis

Thankfully Syrians will receive much needed fuel supplies. Sanctions hurt the weakest and poorest. They are a form of collective punishment that the US should abjure. This is a misguided policy that will not dislodge Assad, but will add to the suffering of powerless Syrians. https://twitter.com/AmbJohnBolton/status/1170122034577321984 

John Bolton

@AmbJohnBolton

Anyone who said the Adrian Darya-1 wasn’t headed to #Syria is in denial. Tehran thinks it’s more important to fund the murderous Assad regime than provide for its own people. We can talk, but #Iran’s not getting any sanctions relief until it stops lying and spreading terror!

View image on Twitter

Despite Iran’s now confirming the delivery of the oil, evidently to Syria, a US Treasury official on Sunday disputed whether the actual offloading had taken place at the time of Iran’s announcement.

“Right now it’s parked right outside of Syria,” Sigal P Mandelker, a US Treasury official, was quoted in Al Jazeeraas saying. “So it’s yet another game of deception that we see them engaged in that we think the world needs to open its eyes to.”

end
Iran
Why not:  Iran seizes another foreign vessel in the Persian Gulf and detains the crew
(zerohedge)

Iran’s Military Seizes Another Foreign Vessel In Persian Gulf, Detains Crew

In yet more confirmation that the White House’s “maximum pressure” campaign has given way to Iran’s own more intense and aggressive summer of ‘counter-pressure’ in the gulf, Iran’s military Saturday hasseized a small foreign vessel and its crew, the semi-official ISNA news agency confirms. 

The vessel is being described in international reports as a tugboat Iran has accused of smuggling nearly 284,000 liters of diesel. Iranian forces have arrested and detained its 12 Filipino crew members, but it’s as yet unknown what flag the boat was flying. 

The petrol confiscated is said to be worth 233.71 billion rials ($20.2 million), according to the ISNA report.

 

Illustrative file image.

Iran has now detained three commercial vessels in the vital Strait of Hormuz over the past three months, among them the still captured British-flagged oil tanker Stena Impero.

According to Fox the US Navy’s 5th Fleet said it was aware of the incident but didn’t comment further, while the Philippines’ Department of Foreign Affairs said it’s also investigating the report.

Iran has been waging an ongoing crackdown on rampant fuel smuggling in the gulf amid its energy woes due to crippling US-led sanctions.Large scale smuggling to outside countries has arisen due to state subsidies making Iranian fuel among the world’s cheapest.

“Gasoline sales hit a record high of $72 million last week on the Iran Energy Exchange (IRENEX) for exports to neighboring countries,” Reuters reported.

end

Hezbollah shoots down Israel surveillance drone over South lebanon.  Israel set to react

(zerohedge)

Hezbollah Shoots Down Israeli Surveillance Drone Over South Lebanon

Two weeks after the first significant Israel-Hezbollah exchange of fire since the 2006 war, Hezbollah announced Monday it has downed another Israeli drone in southern LebanonThe Washington Postreports.

A Hezbollah media statement said the group had “confronted” the Israel drone with “appropriate weapons” near the southern town of Ramiyeh, indicating the small drone was shot down. The paramilitary group now has the drone in its possession.

However, the Israeli Defense Forces (IDF) denied its surveillance drone was shot down, only saying it had crashed in the pre-dawn hours of Monday morning. The IDF affirmed it had been conducting a reconnaissance mission in the area.

 

File image: Hezbollah flag and fighters in south Lebanon.

Simultaneously a separate IDF statement claimed Iran’s elite Quds Force had fired multiple rockets from Syria toward Israel, but noted all failed to hit their targets. While no proof or video was immediately offered to back it, the statement added, “We hold the Syrian regime responsible for events taking place in Syria” — which strongly suggests Israeli could be preparing to retaliate on sites in or near Damascus, or on positions in southern Syria.

Hezbollah has recently vowed to shoot down any Israeli aircraft violating Lebanese airspace after late last month twin Israeli drones mounted an attack on Hezbollah offices in south Beirut, and after another drone assassinated the commander of a Palestinian militant group (PFLP-GC) in the Bekaa Valley.

I tell the Israeli army on the border — be prepared and wait for us,” Hezbollah Secretary-General Hassan Nasrallah said in a subsequent address. Indeed a week ago on Sunday Hezbollah’s retaliation began with an anti-tank missile attack on an Israeli military vehicle near the border, which video of the operation shows suffered a direct hit.

Many analysts have read the mounting tensions and new exchanges of fire as holding the potential to escalate into a renewed all-out Israeli-Lebanese war, similar to the month-long 2006 war.

Meanwhile, also on Monday there are as yet unconfirmed reports of possible Israeli airstrikes targeting Iranian forces in eastern Syria, specifically in the city of Albukamal on the Iraq border. A number of explosions were heard inside Albukamal city overnight; however, it’s unclear if foreign aircraft or drones were behind it.

Syrian opposition media outlets are reporting casualties from the alleged attack. As Haaretz summarizes of the unconfirmed reports:

Eighteen Iran-back militia members were killed in the strike, the British-based watchdog said on Monday. The Assad regime and Syrian state media didn’t report the incident.

If true we could be preparing to witness yet more build-up to major war between Israel and Iranian allies in the Middle East.

6.Global Issues

A must read.  David Stockman comments on 3 aspects which will lead to an unprecedented collapse of the global financial system:

i. Donald Trump’s trade war with China.  Donald is upset with the huge trade imbalance but that is mainly caused by the wage disparity. By causing trade to shift to other nations like Viet Nam etc it will cause big problems in the trade scheme

2. the huge bond bubble and it will burst

3. the stock market will burst as all of the gains in the stock market has been through buy backs.

plus the Fed and European bond problems..

a must read..

(courtesy David Stockman)

David Stockman On An Unprecedented Collapse Of The Global Financial System

Via InternationalMan.com,

Doug Casey’s Note: David Stockman is a former congressman and director of the Office of Management and Budget under Ronald Reagan.

Now, anyone with connections to the government should elevate your suspicion level. But as you’ll see, David is a genuine opponent of government stupidity. Although his heroic fight against the Deep State during the Reagan Administration was doomed, he remains a strong advocate for free markets and a vastly smaller government.

We get together occasionally in the summer, when we’re both in Aspen. He’s great company and one of the few people in this little People’s Republic that I agree with on just about everything. Absolutely including where the US economy is heading.

I read his letter the Contra Corner every day and suggest you do likewise.

International Man: What do you make of the ballyhooed potential trade deal with China?

David Stockman: First of all, the deal is all ballyhoo. You know what they say in Texas, “All hat and no cattle.” That’s what we got here.

There’s not going to be a deal, because the problem that Trump is focused on and obsessed with is that we bought $543 billion worth of stuff from China last year, and we sold $120 billion.

It’s not because of bad trade deals The Donald thinks that his predecessor made. Or because the Chinese are the worst kind of trade cheats in world history.

The reason is the economic differential—the economic cost and wage gap between the two countries is so great, that we have this huge imbalance. The Fed is the partial cause of that economic and cost differential.

If you look at manufacturing, our average wage is over $30, which includes the cash wage plus the health benefits, retirement, and Social Security taxes, and all the rest of it.

And in China, it’s about $5. When you have $30 versus $5, it tells you all you need to know.

So, we have this huge gap overall, which is $423 billion, in other words, exports minus imports. But almost 55% of that is accounted for by two trade code categories that really focus on smartphones, laptops, desktops, other computer equipment, electronics, and so forth.

Apple iPhones and the whole rest of it—the supply chain has been entirely transplanted to China. That’s because of a wage arbitrage. Last year, in those categories, we imported $275 billion worth of stuff, including about $90 billion worth of cell phones—and we exported to them only $27 billion worth of stuff.

So, there’s a massive 10-to-1 ratio of imports to exports, and it’s due to wage and cost differences, not because the Chinese cheat. The point is you’re not going to negotiate that away.

Trump has identified the problem of $423 billion merchandise trade deficit of one country. He’s only going to blow up the global trading system and supply chains with these idiotic tariffs. They’re really getting pretty serious.

There’s no doubt that this isn’t going to stop anytime soon.

I think it’s important to recognize that by the end of this year we’ll be looking at $550 billion Chinese imports in the US economy. At all stages of the supply chain—some finished goods, some intermediate goods, some parts—that will be subject to tax of $120 billion by a unilateral action of the president of the United States, who thinks he’s the trade czar of the world.

If we tax one country as opposed to all imports, you cause massive repercussions and ricochet effects in the supply chain.

It’s the greatest foreign aid program the United States ever conceived. We’re driving business, jobs, and work to Vietnam, India, Indonesia, Mexico, and a lot of other places, as we rip up these supply chains in China.

China is a red Ponzi. It’s a house of cards. It’ll collapse of its own weight sooner or later.

But we are going to hasten the collapse of the red Ponzi because they’re selling at prices in order to maintain business and not lose it to Vietnam and others.

That means that the already meager profits of Chinese companies will disappear entirely.

No one’s ever tried to tax the flow of trade with one country at a 21% rate in today’s world, where things can change so rapidly due to technology and the massive infrastructure of global transportation and shipping.

Trump is the biggest, baddest bull in the china shop that has ever entered world commerce. This is a disaster in the making.

International Man: Speaking of the next crisis…

After the 2008 crisis, the Fed kept interest rates artificially low, as a “temporary” measure. All this did was create easy money and pump up the stock market.

The Fed’s attempt to normalize interest rates caused the stock market to tank. They’ve since capitulated and ended the tightening cycle.

What do you think about the Fed’s ability to paper over the next crisis by turning on the money spigots again?

David Stockman: I think it’s very limited. I think they shot their wad, so to speak. They have very little dry powder left.

Remember, before the dot-com crisis, the federal funds rate was over 6%, and so they had 600 basis points to cut. At the time of the housing subprime crisis in 2008, the funds rate was 5.5%. So again, 500 basis points to cut.

Here we are in month 121 of the longest business expansion in history—albeit the weakest one. The unemployment rate is at 3.7%, and they’ve already thrown in the towel and have cut the rates. This morning the federal funds rate is 2.12%.

They’ve got no room left to go. Now, people say they could go negative. They will not go negative in the United States. If they actually tried to drive interest rates in the short end of the market into negative territory—and finally crush whatever life is left in the savers and retirees of America—people would be descending on Washington with pitchforks and torches. So that won’t happen.

You could say they’ll go to quantitative easing (QE). I doubt that. The QE experiment has failed entirely. We’ve had massive increases in the Fed’s balance sheet, which went from about $850 billion on the eve of the subprime crisis to a peak of $4.5 trillion. Ben Bernanke promised at the time and said it over and over: This is an emergency. It’s the 100-year flood. It’s a one-time thing. We will normalize as soon as the economy has stabilized.

Well, 10 years later, I would say it has stabilized. They began to shrink the balance sheet in a very tepid way. They got to $3.8 trillion, which is nothing in terms of rolling back this massive monetization of the public debt that they undertook. And then they threw in the towel because Donald Trump barked at them in a very menacing and snarly voice.

So, they basically have this huge balance sheet in conjunction with the other central banks of the world. Collectively, they have driven bond yields to rock bottom. I would say we’re now in the mother of all bond bubbles in history.

They’ve practically destroyed the bond market in terms of any meaningful price discovery and any meaningful economic content of the yields. You have $16 trillion of investment-grade sovereign debt trading at negative yields. You have even the entire US yield curve as the only bond market left with a positive number in front of the yield, and now we’re under 2%. They’re close to destroying the bond market completely.

So, if they try to go big time with a new round of QE, that will blow up the bond market. There’s no doubt about it.

I think that will be a calamity and will generate an unprecedented collapse of the entire global financial system.

So, they’ve painted themselves into an unbelievably tight corner. Of course, they’re sitting there in the Eccles Building thinking they’re the masters of the universe, and they’re doing a great job—patting themselves on the back. They’re completely delusional.

These are very foolish people who have been wearing their Keynesian beer goggles for so long that they can’t even recognize or anticipate the massive looming crisis right in front of their face.

International Man: It’s not just in the US. The central banks of Europe, Japan, and most other countries around the world are doing the same thing. How do you think this will play out?

David Stockman: I think it’s clear that we’re at a race to the bottom and not just in terms of the traditional notion of exchange rates, beggar thy neighbor and having my rates below yours.

Although Donald Trump seems to think that’s the name of the game and that the Fed ought to do the very stupid things that the ECB and the Bank of Japan are doing. His philosophy, I guess, is if my neighbor burns down his house, I ought to follow his wise example and do the same to mine.

This is really crazy. But in any event, let’s understand what this race to the bottom is. This is a race to the bottom on yields. This is a race to the bottom of the $60- or $90-trillion global bond market, depending whether you’re counting investment grade or everything. If you count everything, it’s something like $90 trillion.

There isn’t much room left to go. The entire German yield is negative. The 10-year German bond is at negative 66 basis points. This is absurd.

The Austrians issued a 100-year bond two years ago, with a coupon of 2%. That bond was recently trading at 210% of par and at a yield that is less than 1 now. The point is, if Austria survives until 2117 when the bond matures, investors are going to be paid back 100 cents on the dollar, not 210 cents. Somebody is buying the damn thing with a guaranteed 55% loss if they hang onto it over time.

So, the point here is that the central banks have stimulated a massive frenzy of speculation in the bond market, where investors—and I would really say “speculators”—are chasing prices up.

Why would anybody buy that Austrian bond at 210% of par? Well, the answer is that a couple months ago, it was at 160, and a few months before that, it was at 130.

So, the idea that stocks are supposed to be where you speculate on price and bonds are supposed to be the safe instrument where you lock in a modest but safe yield has been turned upside down.

The speculators are now moving into the global bond market, chasing price. And of course, as the prices rise, the yields collapse. That’s how we’re getting nominal negative yields. No one has really issued that much debt with a negative coupon. They’ve issued debt with low coupons that then trade up way above par, driving the current yield into negative territory.

This is the biggest disaster to hit the financial system since the 1930s or maybe even before. It’s all the doing of the central banks. And it isn’t too long, in my judgment, before the chickens come home to roost.

International Man: In 2008, the subprime mortgage crisis played a key role. What do you think could the catalysts for the next crisis?

David Stockman: It’s the mother of all bond market bubbles. And it’s not just that speculators have driven the price of almost all sovereign debt way above par. It’s going to come back to par, either when the market corrects or when the bonds are redeemed—and somebody’s got a capital loss of large magnitude sitting right on their balance sheet at the moment.

That’s the crisis because it’s being done on leverage. Of course, there are some cash buyers, but all the smart money and the speculators are buying this low-yielding or negative-yielding debt on repo and collecting the capital gain. Let’s say the price moves 110 to 120 on 95% leverage, and they’re laughing all the way to the bank. This is big-time speculation.

When it reverses, they’re going to unwind these trades and all these elevated, insane prices in the bond market.

That’s what $16 trillion of negative yield means. It equals insanity.

So, the point is it’s going to correct, and when it does, it will correct hard. It will ricochet through the entire financial system.

The main thing keeping up stocks for the last four or five years has been buybacks. Households were net sellers, actually, of US stocks.

Between 2014 and 2018, companies were the only net buyers of stocks: $2.4 trillion or something like that. But they were able to do that only because they can borrow money at practically zero.

They didn’t want to generate cash reserves for the rainy days that always come in business life—because they couldn’t earn a red cent on it. So, they bought back their stock.

When the big bond market bubble collapses, the stock buyback machine is going to grind to a halt, and the big stock bubble is going to disappear.

In other words, the correction is going to cascade and ricochet through the entire global financial system. It consists of $250 trillion of debt—of bonds, bank, junk, commercial real estate securitization, and all the rest of it. And the global stock market is about $80 trillion.

That’s to say nothing of the derivatives, which are orders of magnitude larger than those two markets.

So, we’re talking about a threat to the entire financial superstructure of the world. I don’t think it’s going to be a happy ending.

The 2000 dot-come excess or the 2004 to 2008 subprime housing credit excess is minor league compared to $16 trillion of bonds trading in negative yields.

7. OIL ISSUES

European gas prices plunge to a 10 yr low

Paraskova/OilPrice.com)

European Gas Prices Plunge To 10-Year Low

Authored by Tsvetana Paraskova via OilPrice.com,

Natural gas prices in Europe are set to drop even lower than the current ten-year lows this fall.


Storage facilities across the continent are fuller than usual for this time of the year. Natural gas suppliers are not expected to curb deliveries despite the low prices, abundant supply, and tepid demand. The winter heating season in October is set to begin with temperatures around or above seasonal norms, early forecasts suggest.

All these factors combine to create a perfect storm for natural gas prices in Europe, which are set for a further fall this fall, at least until winter comes, analysts and industry professionals tell Bloomberg.

 

Low liquefied natural gas (LNG) spot prices amid abundant supply and weaker Asian spot demand have helped Europe to fill its storage tanks to more than average levels this summer.

Natural gas prices in Europe dropped to a ten-year low in early July as Russia and the United States continue to fight for market share.

Source: Bloomberg

Thanks to the lowest natural gas prices in a decade, storage tanks in many European countries are higher than the five-year average well ahead of the coming heating season. Traders continue to ship LNG cargos to Europe, potentially waiting for trading opportunities when the winter season approaches and prices rise.

As of September 2, storage facilities in Europe were 92.95 percent full, according to data from Gas Infrastructure Europe. The levels of natural gas in storage now are much higher than what is typical for early September.

Source: Bloomberg

At the same time, apart from maintenance at Norwegian gas export facilities, the biggest pipeline suppliers to Europe—Norway and Russia—aren’t restricting deliveries even in the face of prices at a ten-year low and the prospect of further price declines.

Russia’s Gazprom admitted last week that its natural gas exports to Europe plus Turkey would drop this year from the record levels seen in 2018.

Yet, the Russian gas giant—which holds around 33 percent of Europe’s natural gas market—is still fighting for market share, Niek van Kouteren, a senior trader with Dutch energy company PZEM, told Bloomberg.

“When we have an opportunity, we make extra sales,” Gazprom Export’s deputy department head Mikhail Malgin told analysts at a conference call last week.

Analysts believe that low gas prices won’t discourage suppliers from trying to deliver more volumes into the European market.

This means that in the short term, supply is likely to outstrip demand in the so-called ‘shoulder season’ when the summer heat waves with high demand for cooling have ended while the winter heating season hasn’t begun yet. Add high storage levels across Europe, and prices are set to dip further, although they are now sitting at their lowest in ten years.

According to Norbert Ruecker, head of economics at Julius Baer Group, Dutch benchmark natural gas prices could be set for another 20-percent decline in the fall, and “If things turn out really bad, maybe the bear case is even lower,” he told Bloomberg.

In addition to supply exceeding demand, the start of this year’s heating season in October could see above normal temperatures in many parts of mainland Europe, IBM’s The Weather Company said last month.

Higher than usual volumes in Europe’s storage is not all that bad, especially if the talks between Ukraine and Gazprom on the gas transit to Europe stall and Russia were to cut off supply to European markets via Ukraine.

But in case there are no extreme events on the European gas market in the coming months, natural gas prices are poised to drop even lower than they are now.

END

AbS, a half brother to MbS  replaces al Falih as the new Energy minister and his job is to raise the price of oil

(zerohedge)

8 EMERGING MARKET ISSUES

 

 

 

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

Euro/USA 1.1029 UP .0005 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 /MIXED

 

 

USA/JAPAN YEN 107.01 UP 0.104 (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 1.2365   UP   0.0092  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO OCT 31/2019//

USA/CAN 1.3156 DOWN .0008 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS  MONDAY morning in Europe, the Euro ROSE BY 5 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1219 Last night Shanghai COMPOSITE CLOSED UP 25.14 POINTS OR 84% 

 

//Hang Sang CLOSED DOWN 9.36 POINTS OR 0.04%

/AUSTRALIA CLOSED UP 0,11%// EUROPEAN BOURSES ALL MIXED

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL MIXED 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 9.36 POINTS OR 0.04%

 

 

/SHANGHAI CLOSED UP 25.14 POINTS OR 84%

 

Australia BOURSE CLOSED UP. 11% 

 

 

Nikkei (Japan) CLOSED UP 118.65  POINTS OR 0.56%

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1510.40

silver:$18.20-

Early MONDAY morning USA 10 year bond yield: 1.60% !!! UP 4 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 2.07 UP 5  IN BASIS POINTS from FRIDAY night.

USA dollar index early MONDAY morning: 98.38 UP 1 CENT(S) from  FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx6

And now your closing MONDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 0.24% UP 5 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: -.25%  DOWN 1   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.22%//UP 2 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD :.94 UP 2 points in basis points yield from yesterday./

 

 

the Italian 10 yr bond yield is trading 72 points higher than Spain.

 

GERMAN 10 YR BOND YIELD: RISES TO –.59% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 1.49% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A HUGE BANK RUN…

 

END

IMPORTANT CURRENCY CLOSES FOR MONDAY

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

Euro/USA 1.1059  UP     .0035 or 35 basis points

USA/Japan: 107.13 UP .223 OR YEN DOWN 22  basis points/

Great Britain/USA 1.2372 UP .0098 POUND UP 98  BASIS POINTS)

Canadian dollar UP 22 basis points to 1.3142

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY: AT 7.1220    ON SHORE  (DOWN)..GETTING DANGEROUS

THE USA/YUAN OFFSHORE:  7.1182  (YUAN DOWN)..GETTING REALLY DANGEROUS

TURKISH LIRA:  5.7372 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield closed at -.25%

 

Your closing 10 yr US bond yield UP 5 IN basis points from FRIDAY at 1.61 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.09 UP 7 in basis points on the day

Your closing USA dollar index, 98.17 down 22  CENT(S) ON THE DAY/1.00 PM/

 

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

London: CLOSED DOWN 46.53  0.56%

German Dax :  CLOSED UP 34.37 POINTS OR .28%

 

Paris Cac CLOSED DOWN 15.04 POINTS 0.21%

Spain IBEX CLOSED UP 20.50 POINTS or 0.23%

Italian MIB: CLOSED UP 42.40 POINTS OR 0.05%

 

 

 

 

 

WTI Oil price; 58.05 12:00  PM  EST

Brent Oil: 62.75 12:00 EST

USA /RUSSIAN /   RUBLE RISES:    65.53  THE CROSS LOWER BY 0.25 RUBLES/DOLLAR (RUBLE HIGHER BY 25 BASIS PTS)

 

TODAY THE GERMAN YIELD RISES  TO .59 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 :  58.06//

 

 

BRENT :  62.67

USA 10 YR BOND YIELD: … 1.63  up 7 basis pts…

 

 

 

USA 30 YR BOND YIELD: 2.11.. up 11 basis pts.

 

 

 

 

 

EURO/USA 1.1051 ( UP 26   BASIS POINTS)

USA/JAPANESE YEN:107.20 UP .284 (YEN DOWN 28 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 98.28 UP 11 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.2346 UP 73  POINTS

 

the Turkish lira close: 5.7534

 

 

the Russian rouble 65.54   UP 0.24 Roubles against the uSA dollar.( UP 24 BASIS POINTS)

Canadian dollar:  1.3161 UP 3 BASIS pts

USA/CHINESE YUAN (CNY) :  7.1219  (ONSHORE)/

 

USA/CHINESE YUAN(CNH): 7.1167 (OFFSHORE)

 

German 10 yr bond yield at 5 pm: ,-0.60%

 

The Dow closed UP 38.05 POINTS OR 0.14%

 

NASDAQ closed DOWN 15.64 POINTS OR 0.19%

 


VOLATILITY INDEX:  15.64 CLOSED UP .24

LIBOR 3 MONTH DURATION: 2.134%//libor dropping like a stone

 

USA trading today in Graph Form

Quant Carnage Wrecks Tech As Small Caps Soar On Financial Frenzy

Market to momo-tilted quant funds today…

Chinese mega caps were unchanged overnight but small cap tech was panic-bid…

European banks outperformed as the broad European equity markets slumped…

Source: Bloomberg

 

US equities were mixed with Trannies and Small Caps (squeezing higher) but the big caps notably underperforming…

 

This is the biggest daily divergence between Trannies and Nasdaq since Nov 2018.

A major short-squeeze lifted stocks out of the open and beyond the EU close…

Source: Bloomberg

Financials notably outperformed on the day (helping to lift Small Caps too)…

Source: Bloomberg

Notably diverging from the yield curve…

Source: Bloomberg

But, quietly under the surface, there was utter carnage in the quant space as the massive divergence between value (lower) and momentum (higher) factors in August has been unwound dramatically fast…

Source: Bloomberg

It seems August’s great month for momo was so good, it’s bad, as CTAs are forced to derisk huge relative exposures…

Source: Bloomberg

NOTE – today’s crash was the largest since the quant carnage in 2009

And Value-tilts were panic-bid…

Source: Bloomberg

A massive mean-reversion today…

Source: Bloomberg

And before we move on to bonds, Nomura’s Charlie McElligott noted this would make for the worst single-day of performance in my model Equities HF L/S portfolio since February 5th / February 8th 2018’s Leveraged VIX ETN “Extinction Event”

Treasury yields were broadly higher on the day (thanks to three major selling legs – EU open, US open, US close) with the long-end underperforming…

 

Source: Bloomberg

30Y Yields topped 2.10% intraday, erasing a lot of the gains since Trump’s tariff tantrum…

Source: Bloomberg

The yield curve steepened notably on the day but 3m10Y remains significantly inverted…

 

Source: Bloomberg

Finally, before we leave bond-land, we note that last week saw the market value of negative-yielding bonds shrunk by $1.2 trillion, the biggest weekly drop on record (and it got worse today)…

Source: Bloomberg

The dollar extended recent losses today, falling to post Trump-tariff-tantrum lows…

Source: Bloomberg

Cable managed solid gains as no-deal brexit odds fell further… (but chaos remains)

 

Source: Bloomberg

Euro rallied on the day, nudged higher by headlines on Germany potentially easing its budget…

 

Source: Bloomberg

Yuan weakened back from its fix…

 

Source: Bloomberg

Cryptos are mixed with Altcoins rallying modestly as Bitcoin slips lower…

 

Source: Bloomberg

But Bitcoin is holding above $10,000 for now…

 

Source: Bloomberg

As Bloomberg’s Todd White details, Bitcoin is increasingly moving in an opposite direction to China’s currency – suggesting it may have become a refuge for people hedging the yuan’s depreciation.

 

Source: Bloomberg

The digital currency reached a record inverse relationship at the end of August, according to 30-day correlation data compiled by Bloomberg.

“There’s corroborating evidence for this, in that people in Asia were paying more for Bitcoin than elsewhere when the yuan fell,” said Dr. Garrick Hileman, a researcher at the London School of Economics and Blockchain.com’s research director. The inverse correlation “became more evident also in April and May, and as the tensions ratcheted up with the deterioration on U.S.-China trade relations,” he added.

Despite the drop in the dollar, PMs and copper slipped lower as crude surged…

 

Source: Bloomberg

WTI Crude topped $58, breaking-out of its recent range…

 

 

As is clear above, crude’s surge coincided with silver’s slamming – this has lifted oil prices to 3.2Oz of Silver/barrel in recent days…

 

Source: Bloomberg

Finally, we note, one of these things is not like the other…Stocks +19% YTD, EPS expectations -4% YTD

Source: Bloomberg

end

And now your more 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

Stocks Are Suddenly Plunging As Momentum Crashes

Having squeezed higher overnight and accelerated after the US open, it appears the catalyst for the sudden dump in US equity markets is the European market close

Nasdaq futures illustrate the technical nature of the move best as the drop erases the sudden spike at the US open on Friday (after payrolls missed)…

As it appears momentum-tilted quants and CTAs are suddenly collapsing after a stellar start to the year as we discussed last week in “The Best And Worst Hedge Funds Of 2019: Momos On Rampage

Source: Bloomberg

This is the biggest collapse in momo since the extremes in 2009…

Source: Bloomberg

… as Michael Krause noted:

Michael Krause@michaelbkrause

Very bad day for momentum-tilted quants. Long-short basket returns follow. Global effect. US below. Haven’t seen this type of extreme mvmt in value since March, 2009, and May 2009 for momentum.

View image on Twitter

Chatter is that this is forced derisking from momo-tilted funds that have suffered the equity equivalent of a “VaR shock” as momentum has outperformed so dramatically that they need to be rescaled to risk exposure limits.

Indeed, none other than Charlie McElligott commented on this possibility earlier today when he noted that a potential selloff in duration/rates would also be felt in the US Equities complex, “because as we’ve outlined here for months, the current consensus / “Momentum” positioning construct is a pure reflection of the “Duration Trade”: “long” Secular Growth and Min-Vol Defensives against “short” / underweight Cyclicals”

Thus, the late last week Rates / UST selloff drove such an outside performance bleed for many in the US Equities space—because their portfolios are built for lower UST yields (“long” Duration-sensitives like Defensives and Secular Growth, vs underweight / “short” High Beta, Cyclicals / Value, Commodities-sensitives)

This, as the Nomura quant explains, is why the US Equities “1Y Price Momentum” factor has seen suck a powerful burst of “shock-down,” -6.6% over the last week and a half (after having “glided” to what is still a +15.9% return YTD on account of consensual investor “buy-in” to the “Slow-flation – Dovish Fed” trade)

Stated another way, “the same inputs which have dictated the “Duration / Rates selloff” have then fueled a +16.3% return in my “Pain Trade” index over the past week and a half as well (and +9.4% past 3d alone), which is the simple ratio of a “Value” factor proxy (e.g. EBITDA / EV) versus “Momentum”—as “Value” is positively correlated with UST Yield Curve “bear-steepening,” while “Momentum” is inversely correlated to the steepening / US Rates selloff.”

Putting the violent momentum reversal in a chart, this represents the largest 6-Day cumulative move higher in McElligott’s equity “pain indicator” since December 2017, as funds were “wrong-footed” by being heavy “momentum” and short “value”…

… with the market action today showing what happens when countless momentum chasers suddenly hit reverse.

end

ii)Market data/USA

It sure looks like the consumer is not healthy at all

(zerohedge)

Consumer Credit Card Debt Explodes In July Despite Rates At 18-Year Highs

Something is not quite right here.

Despite The Fed signaling rate-cuts as far as the eye can see, US credit-card interest rates have soared to the highest since 2001.

And despite credit card rates being at 18-year highs, US revolving debt (largely made up of credit card debt) has exploded in July to its highest on record.

Source: Bloomberg

This was the biggest MoM jump in revolving debt since Nov 2017

 

Source: Bloomberg

Is the American consumer really that healthy? The recent exuberance over retail sales gains seems to be largely predicated on the back of an average joe who is forced to use his high-cost credit card to cover everyday expenses.

 end
Will this be the spark that causes a rout in the bond market:  We have our first crashing angel and it is a biggy:  Ford. with its 84 billion in debt.  The total of debt which is just one step above junk totals 1 trillion, so you can imagine the trouble here.
(zero hedge)

Crashing Angel: Moody’s Downgrades Ford, And Its $84 Billion In Debt, To Junk

With pundits warning for years about the threat of “fallen angels”, low-rated investment grade names downgraded to junk, the market first paid attention to, then learned to ignore the warnings as credit continued to tighten,  helped in no small part by trillions in negative yielding sovereign debt – despite the ongoing threat of deteriorating fundamentals.

That however may now change as the universe of (split) junk bond names is about to become bigger by almost $100 billion after moments ago Moody’s downgraded Ford’s senior debt rating from investment grade Baa3 to junk Ba1 (stable outlook), in the biggest shot across the fallen angel bow in years.

According to Bloomberg, no less than $84 billion in debt is affected, making Ford the single biggest fallen angel in the US bond market.

To be sure the threat of a Ford downgrade to junk is hardly new, and last August we wrote “Is Ford’s Downgrade The “Spark” That Crashes The Bond Market“, shortly after Moody’s downgraded Ford Motor’s credit rating was to just one notch above junk, making it the biggest single “fallen angel” candidate in the US bond market.The ratings company cited erosion in Ford’s “global business position and the challenges it will face implementing” its restructuring effort that could rack up $11 billion in the next three to five years.

* * *

Needless to say, the collapse into junk would is a blow to Ford after seven years of investment-grade status. Ford avoided joining its U.S. peers in bankruptcy during the financial crisis, largely thanks to more than $23 billion in loans taken out in 2006. Now, this massive debt pile is coming to haunt the company.

According to Moody’s, the Ba1 ratings reflect “the considerable operating and market challenges facing Ford, and the weak earnings and cash generation likely as the company pursues a lengthy and costly restructuring plan. The restructuring is expected to extend for several years with $11 billion in charges, and a cash cost of approximately $7 billion. Ford is undertaking this restructuring from a weak position as measures of cash flow and profit margins are below our expectations, and below the performance of investment-grade rated auto peers. Moreover, these measures are likely to remain weak through the 2020/2021 period including a lengthy period of negative cash flow from the restructuring programs.”

“The company does have a sound balance sheet and liquidity position from which to operate.” said Bruce Clark, Senior Vice President with Moody’s, although that will hardly be enough for any fund that has a mandate of only holding pure investment grade companies.

The silver lining: so far S&P has Ford at a BBB investment grade rating, although the rating agencies do tend to issue downgrades in pair so we expect a full junking to be completed in weeks. Last summer, S&P cut Ford’s outlook to negative from stable and said prolonged weakness in profit and cash flow made a downgrade within two years increasingly likely. S&P rates Ford at BBB, two levels above speculative grade. But that will likely change soon, after the automaker lowered its profit forecast for the year, and is facing a number of headwinds beyond exiting the slowing sedan business in North America. The cost of complying with tougher emission rules in Europe and updating a stale product line in Asia contributed to second-quarter losses in those regions.

Here is the bigger problem: Ford – which is now a historic “fallen angel” – has more than $80 billion in debt, and becomes one of the biggest issuers in the U.S. high-yield bond market.

Of course, in response to our question from last summer, it may not be Ford that catalyzes the crash: as Oaktree warned last year there is now “a flood of troubled credits topping $1 trillion as rising interest rates overwhelm low-quality loans and bonds.”

However, it would be poetic justice if the auto company that avoided bankruptcy during the Global Financial Crisis is the “spark” that – with its downgrade to junk – is the catalyst that unleashes the next bond market crash, as investors finally flee from the $1+ trillion US junk bond market, precipitating a cascade of selling that spreads into investment grade and, eventually, equities.

Which brings us back to the words from Moelis’ co-head of restructuring Bill Derrough who last May said that “I do think we’re all feeling like where we were back in 2007; there was sort of a smell in the air; there were some crazy deals getting done. You just knew it was a matter of time.”

That time may be almost here.

* * *

Some more details from the Moody’s report:

The erosion in Ford’s performance has occurred during a period in which global automotive conditions have been fairly healthy. Ford now faces the challenge of addressing these operational problems as demand in major markets is softening, and as the auto industry is contending with an unprecedented pace of change relating to vehicle electrification, autonomous driving, ride sharing, and increasingly burdensome emission regulations.

The weak performance was driven by two principal factors, which Ford is addressing, but implementation of the initiatives will take some time. First, varying degrees of operating inefficiencies developed in almost all of Ford’s key regional markets including North America, China, Europe and South America. Second, earnings in China slid from an annual profit exceeding $1 billion in 2016 to a major loss as a result of an aged product lineup, poor dealer relations, and inattention to local market conditions.

A critical element of Ford’s plan for addressing operational inefficiencies and improving returns is the Global Redesign initiative. A major component will be the restructuring of South American and European operations. Ford has considerable expertise and a successful track record of undertaking such restructurings. Nevertheless, the scope of this restructuring plan is unprecedently large and challenging. It will extend at least into 2023.

In addition to the restructuring initiatives, the Global Redesign plan will also include efforts to revitalize the China operations where Ford has already made notable progress in lowering costs. However, efforts to regain lost share, rebuild market presence, and restore meaningful profitability will be much more difficult to achieve because the Chinese auto market is becoming increasingly competitive, and near-term growth rates are likely to be much less robust than in the past.

In North America, which remains one of the healthiest auto markets globally, Ford’s EBIT margins have fallen from over 10% in 2016 to just under 8% in 2019, largely because of the product age of large portions of its domestic portfolio. However, Ford has begun an aggressive new product launch cycle. We expect that this product renewal program, which will include the highly profitable F-Series of full-size trucks, will help Ford, over the next three years, strengthen North American margins to a level that should approach 10%.

Ford has been active in addressing environmental risks, which will remain a top agenda item in its forward planning. Nevertheless, we believe that the company’s current product portfolio leaves it vulnerable to potentially large emission penalties in 2020 and 2021. Reflecting these vulnerabilities, the new product launch will include a number of battery electric and full hybrid vehicles as important contributors in Ford’s ability to comply with increasingly challenging emission regulations in the US and Europe. However, customer acceptance of these vehicles and Ford’s ability to earn an economic return on them remains uncertain.

Additionally, the alliance with Volkswagen AG will provide important long-term benefits to Ford’s position in electric vehicles, autonomous vehicles and commercial vehicles. Nonetheless, Moody’s anticipates only minimal impact on Ford’s earnings and cash generation before 2022.

The stable rating outlook reflects Moody’s expectation that the initiatives being undertaken, particularly the Global Redesign effort and the new product rollout, will contribute to gradual improvement in the company’s earnings, margins and cash generation, albeit over a number of years. Ford’s$23.2 billion of cash, which exceeds its debt, and its conservative balance sheet afford the company the ability to fund its product development and restructuring intiatives. Moody’s notes that this level of financial flexibility is common across the auto industry because of the need to contend with severe downturns and sustain product investment. The stable outlook also anticipates that Ford will maintain a sound liquidity position as it funds the restructuring actions.

Ford’s ratings could be downgraded if the major initiatives (Global Redesign, new product rollout, and revitalization efforts in China) do not contribute to a steady improvement in key performance metrics. Metrics that would point toward downward pressure include: company-reported North American EBIT margin below 7%; the China operations unable to maintain a trajectory toward breakeven performance by 2021; automotive cash position falling below $20 billion; and free cash flow burn that exceeds $1 billion after restructuring expenditures but excluding dividends from Ford Credit.

An upgrade of Ford during the near term is unlikely. However, factors that could contribute to an upgrade include a robust progress in the initiatives that it is undertaking as evidenced by: a North American automotive EBIT margin sustained above 9%; full compliance with US and European emission requirements based on the profitability and market acceptance of its electrified vehicles; and total automotive EBIT margin exceeding 7% (excluding special items). Another element important for a ratings upgrade is an operating structure that is robust enough to sustain the total automotive margin above 4% during an approximately 20% cyclical downturn in unit shipments, while controlling the cash burn to preserve automotive cash above $10 billion.

Will this unexpected fallen angel lead to repricing in the junk bond market which has seen massive issuance in recent months as a result of unprecedented demand for yield? As long as interest rates remain near all time lows, probably not, however even a mere hint of a tantrum across the bond market may result in a violent snapback wider in junk as investors refocus on fundamentals, a ripple which could quickly turn into a tsunami, spreading to investment grade and the broader bond universe.

iii) Important USA Economic Stories

For the 10th straight month, class 8 heavy duty truck orders fall.  This itme the plunge is 79% in August

(zerohedge)

Class 8 Heavy Duty Truck Orders Plunge 79% In August Marking 10th Straight Month Of Declines

Every month, analysts are hopeful that Class 8 orders are on the verge of rebounding and every month so far in 2019, orders have continued to crash. Such was the case again in August, according to data supplied by Bloomberg and ACT Research.

According to Buckingham analyst Neil Frohnapple, preliminary Class 8 truck orders were down 79% in August to 10,900 units. 

Total Class 5-7 orders were 18,800 units for the period, marking a fall of 22% Y/Y, he also noted.

Frohnapple wrote in a note to clients: “Overall, Class 8 net orders were slightly below our expectations as we were anticipating net orders in the low- to mid-teen unit range for the month of August.”

He also noted that August marked the tenth consecutive month of Y/Y declines after orders exceeded expectations in the seasonally weak third quarter last year. The robust demand last year was a result of fleets and dealers placing orders earlier than normal to secure build slots for 2019, he said.

Continuing declines for Class 8 orders in 2019 are a result of weaker freight indicators – traditionally seen as a good gauge of the overall U.S. economy – and declining used Class 8 truck prices.

Frohnapple’s outlook for September is also grim. He continued: “We anticipate that Class 8 net orders will remain depressed and in the low- to mid-teen range for the month of September as the market continues to correct.”

Last month, the industry booked 10,200 units, an astonishing 81% year over year fall, according to ACT Research.

July’s number was also down 21% from June and marked the lowest monthly order tally since February 2010. Net trailer orders also continued to plunge, according to data released last month. Updated net trailer order data for August will be available within days, at which point we will update these figures.

In addition to Frohnapple, other industry experts are not exactly optimistic about the short term future of the industry, either. Kenny Vieth, ACT’s President and Senior Analyst said in late July that heavy truck and trailer industries would be heading for a market correction in 2020. He stated:

“Data that support our forecast of an impending market correction continue to mount, with the biggest driver of the change for both Class 8 and trailers being the continued building of new equipment inventories in 2019 that will require right-sizing in 2020. Since March 2018, ACT’s forecasts have targeted 2019’s third quarter as the point at which the supply of Class 8 tractors and demand for freight services would likely tip so far as to break the current period of peak vehicle production, as demand reverts to the mean. Current data and anecdotes make a strong case that the call for a Q3 inflection remains intact.”

In early July we reported that Class 8 orders fell a stunning 70% in June to 13,000 units, according to FTR data. This followed a 71% decimation in May.

iv) Swamp commentaries

Here is a good account of our good friend Robert Mueller helped the Saudis cover up their involvement in the 9/11 attacks.  This has been brought out form a civil lawsuit

(zerohedge)

Mueller Helped Saudis Cover Up Involvement In 9/11 Attacks: Lawsuit

Robert Mueller – pitched as an incorruptible beacon of justice when he was tasked with (unsuccessfully) hunting down ties between Donald Trump and Russia – was nothing more than a hatchet man for the deep state, who participated in a coverup of Saudi Arabia’s role in 9/11 according to a new report by the New York Post‘s Paul Sperry – citing former FBI investigators and a new lawsuit by 9/11 victims. 

According to Sperry, Mueller stonewalled after FBI agents discovered evidence of “multiple, systemic efforts by the Saudi government to assist the hijackers in the lead-up to the 9/11 attacks, while the former FBI director allegedly “covered up evidence pointing back to the Saudi Embassy and Riyadh — and may have even misled Congress about what he knew.

He was the master when it came to covering up the kingdom’s role in 9/11,” said Sharon Premoli, a September 11th survivor who was pulled out of the rubble of the World Trade Center, and is now suing Saudi Arabia as a plaintiff in a new lawsuit.

“In October of 2001, Mueller shut down the government’s investigation after only three weeks, and then took part in the Bush [administration’s] campaign to block, obfuscate and generally stop anything about Saudi Arabia from being released,” she added.

Any letting the Saudis off the hook came from the White House,” said former Agent Mark Rossini, adding “I can still see that photo of Bandar and Bush enjoying cigars on the balcony of the White House two days after 9/11.”

Speaking with multiple FBI case agents, Sperry lists a series of incidents describing Mueller ‘throwing up roadblocks’ in front of his own investigators – “making it easier for Saudi suspects to escape questioning.” And according to the lawsuit, Mueller “deep-sixed what evidence his agents did manage to uncover.” 

Via the NY Post:

  • Time and again, agents were called off from pursuing leads back to the kingdom’s embassy in Washington, as well as its consulate in Los Angeles, where former FBI Agent Stephen Moore headed a 9/11 task force looking into local contacts made by two of the 15 Saudi hijackers, Moore testified in an affidavit for the 9/11 lawsuit. He concluded that “diplomatic and intelligence personnel of Saudi Arabia knowingly provided material support to the two hijackers and facilitated the 9/11 plot.” Yet he and his team were not allowed to interview them, according to the suit.
  • In Washington, former FBI Agent John Guandolo, who worked terror cases out of the bureau’s DC office, said then-Saudi Ambassador Prince Bandar “should have been treated as a terrorist suspect” for giving money to a woman who funded two of the 9/11 hijackers. But he was never questioned either, Guandolo said.
  • Instead, Mueller obliged what Guandolo called an “outrageous request” from Bandar within days of the attacks to help evacuate from the country dozens of Saudi officials, including at least one Osama bin Laden relative on the terror watch list. Mueller assured their safe passage to planes, using agents as personal escorts, according to FBI documents obtained by Judicial Watch. Agents who should have been interrogating the Saudis instead acted as their bodyguards.
  • In 2002, Mueller prevented agents from arresting the Saudi-sponsored al Qaeda cleric who privately counseled the Saudi hijackers, said Raymond Fournier, an agent with the Joint Terrorism Task Force in San Diego at the time. “He was responsible for vacating the arrest warrant for Anwar al-Awlaki for passport fraud,” Fournier said. He even ordered agents who detained the fiend at JFK to release him into the custody of a “Saudi representative,” Fournier said. The FBI closed their investigation of Awlaki, who was allowed to leave the US on a Saudi plane. “Shortly thereafter, the Fort Hood shooting occurred and Awlaki’s fingerprints were all over that incident,” said former FBI Agent Michael Biasello, who helped work the Texas terror case.
  • At the same time, Mueller removed a veteran agent from investigating a tip that an adviser to the Saudi royal family had met with some of the Saudi hijackers at his home in Sarasota, Fla., effectively killing the case, according to the lawsuit. The home was suddenly abandoned two weeks before 9/11.
  • Mueller even tried to shut down a congressional investigation into the Saudi hijackers and their contacts in LA and San Diego, said Bob Graham, who led the joint inquiry as Senate Intelligence Committee chair. “The strongest objections” to his staff investigators visiting FBI offices there came from the FBI director himself, said Graham, in a 2017 interview with Harper’s magazine. Among other things, Mueller refused their demands to question a paid FBI informant who roomed with the hijackers and even moved him to a safe house where they couldn’t find him, Graham said. Mueller, with the White House, redacted 28 pages detailing Saudi-9/11 ties from the congressional report.
  • He also gave testimony to Congress that was, at the very least, misleading. In an October 2002 closed-door hearing, Mueller claimed he found out about Saudi-9/11 connections only as a result of the joint inquiry’s investigative work: “[S]ome facts came to light here and to me, frankly, that had not come to light before.” Only, Moore said he gave Mueller “daily” briefings on such connections in 2001. Mueller also testified the hijackers “contacted no known terrorist sympathizers in the United States,” even though the FBI’s own case files showed they had contact with at least 14 terrorist suspects and sympathizers in the US prior to 9/11, including some working for the Saudi government. (In later testimony, he tried to walk this back, insisting he “had no intent to mislead.”)

***

“He’s a villain, and an arrogant one to boot,” said former FBI agent Mark Wauck, who called Mueller a “servant of the deep state.”

end
Michael Flynn is giving the House Intel. Democrats the royal finger as he refuses to give testimony to these idiots
(zerohedge)

Michael Flynn Tells House Intel Democrats To Pound Sand Over Testimony And Documents

Former National Security adviser Michael Flynn is refusing to cooperate with the Democrat-controlled House Intelligence Committee’s demand for testimony and documents, according to Politico, citing a Monday letter by Chairman Adam Schiff (D-CA).

Moreover, Flynn’s new legal counsel, Sidney Powell, has been giving House Democrats the business.

“Notwithstanding repeated efforts by committee staff to engage with your counsel and accommodate your adjournment requests, you have, to date, failed to comply with the committee’s subpoena or cooperate with the committee’s efforts to secure your compliance,” Schiff wrote to Flynn – demanding an appearance for testimony on September 25

 

Of Powell, Schiff wrote that she “exhibit[ed] a troubling degree of unprofessionalism” during communications with committee staffers, which were outlined in the letter.

According to Schiff, Powell “refused to accept service” of the subpoena issued by the panel in June. Schiff indicated that Powell repeatedly sought deadline extensions for Flynn’s cooperation before ultimately ignoring phone calls attempting to arrange Flynn’s testimony for late July, just ahead of Congress’ six-week summer recess.

Schiff also saidPowell told the committee that Flynn would invoke his Fifth Amendment rights and would not answer any questions other than confirming his name. –Politico

“The Fifth Amendment privilege must be invoked in response to specific questions or topics that might tend to incriminate you if answered truthfully,” wrote Schiff. “Your counsel’s blanket invocation of the Fifth Amendment … is, therefore, inadequate.”

Flynn pleaded guilty in December 2017 to laying about his interactions with Russia’s ambassador prior to Trump taking office – denying a discussion of sanctions imposed by the Obama administration in retaliation for alleged election meddling in 2016.

Interestingly, Powell urged Flynn to withdraw his guilty plea – writing in a Daily Caller Op-Ed; “Extraordinary manipulation by powerful people led to the creation of Robert Mueller’s continuing investigation and prosecution of General Michael Flynn,” adding “Notably, the recent postponement of General Flynn’s sentencing provides an opportunity for more evidence to be revealed that will provide massive ammunition for a motion to withdraw Flynn’s guilty plea and dismiss the charges against him.”

Powell also claimed that Flynn’s Constitutional rights were violated by his former legal team, arguing in March 2018: “[General] Flynn should be fully exonerated,” adding “All charges against him should be dismissed for [egregious government misconduct] that infected the setup and prosecution of him from the beginning.”

“There are also serious 4th Amendment violations,” said Powell. “Did his legal team pursue a vigorous defense?”

As Politico notes, Powell has also been “intensely critical of Schiff and Mueller,” while filing a brief last week with the court that spelled out a “litany of allegations of prosecutorial misconduct — much of which aligned with Trump’s unsupported allegations against Mueller and his team — and suggested that the government had withheld evidence from Flynn.”

Prosecutors are aiming to sentence Flynn this fall. 

end

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

German July Industrial Production fell 0.6% m/m and 4.2% y/y; -0.4% m/m and -3.9% were expected.

German GDP y/y vs. ECB Assets – QE is NOT helping German GDP.  Why should more QE work?

The ECB meets on Wednesday and Thursday.  The market expects Draghi to go out in a blaze of glory by announcing a new round of QE.  As the German GDP chart shows, more QE is unlikely to work.  AND, deeper negative rates could induce further personal capital hoarding and less consumer spending.

Draghi Seen Overriding Opposition with QE as Gloom Deepens

Economists expect officials to cut rates, restart bond buying

    Draghi, who leaves his post in October and is set to be replaced by outgoing IMF chief Christine Lagarde, argued in July before the ECB’s summer break that the “outlook is getting worse and worse.”

https://www.bloomberg.com/news/articles/2019-09-06/draghi-seen-overriding-opposition-with-qe-push-as-gloom-deepens

ESUs peaked after the August Employment Report was released.  The eMini S&P 500 September futures hit 2988.25 at 8:42 ET.  They fell to 2972.25 by 9:42 ET.  Traders, of course, bought the opening dip because they expected Powell to be dovish when he spoke at midday.

The August Employment Report shows 130k NFP; 146k was expected.  However, wages increased 0.4% m/m and 3.2% y/y.  0.3% m/m and 3% y/y were expected.  Manufacturing increased 3k; 5k was expected.  The surprise/anomaly is that government jobs jumped 34k.

The Household Survey showed far greater employment growth: 590k.  Unemployed fell 19k.

The Unemployment Rate remained at the expected 3.7% because the civilian labor force increased 571k. Not in the Labor Force declined 364k.  The Labor Force Participation Rate increased 0.2 to 63.2%.  The Underemployment Rate (U6) increased 0.2 to 7.2%.  Black unemployment fell to an all-time low of 5.5%.

https://www.bls.gov/news.release/pdf/empsit.pdf

The BLS’s Birth/Death Model created only 93k jobs.  This is 12k fewer jobs than it fabricated in August 2018 (105k).  https://www.bls.gov/web/empsit/cesbd.htm

The BLS tabulated 348k NFP Not Seasonally Adjusted for August 2019.  This was adjusted to 130k.  Ergo, the seasonal adjustment is -218k.  The seasonal adjust for August 2018 was -223k.  Ergo, BLS accounting changes deleted 7k jobs from August 2019 NFP vs. August 2018 methodology.

The surge in Household Survey employment is a problem for recession seers and Fed doves.  As the following chart shows, Household Employment flattens before recession.  Now, it is still rising.

Household Survey Employed

Trump tried to divert attention from the soft August NFP by slamming Powell, again.

@realDonaldTrump: I agree with @jimcramer, the Fed should lower rates. They were WAY too early to raise, and Way too late to cut – and big dose quantitative tightening didn’t exactly help either. Where did I find this guy Jerome? Oh well, you can’t win them all! [Your Goldman buddy recommended Jerry.]

ESUs had another session of wicked volatility.  From the final hour of Chinese trading through the first hour of NYSE trading, ESUs had 9 significant trend changes.  The S&P 500 Index peaked at 10:48 ET.  Then, stocks declined until a modest rally appeared before Powell’s scheduled speech at 12:30 ET.

Stocks declined during Powell’s speech because he was not as dovish as expected.

Powell Speech Highlights

  • Friday job report consistent with solid labor market, good outlook
  • Lower interest rates have supported economy, kept outlook favorable
  • Global growth should continue; we’re NOT forecasting a recession
  • Inflation is moving back to 2%
  • Trade uncertainty a risk
  • Fed Will Act Appropriately, continue to use tools to support economy
  • Payrolls show Labor Market Still Tightening at the Margin [Stocks fell on this]
  • US Consumer in Good Shape
  • Sees GDP at 2% to 2.5% for 2019

ESUs rallied when Powell said the Fed should not allow inflation below 2%; the Fed is committed to defending its 2% inflation target and central banks have less ability to fight downturns by cutting rates.  This induced traders to conclude that Powell suggested that QE may appear in coming months.

Powell’s hint of coming QE pushed US stocks to a session high.  The S&P 500 Index hit 2985.03.  ESUs peaked at that time two handles below their 8:42 ET top.  The usual last-hour ESU manipulation occurred; but sellers appeared during the final 30 minutes of trading.  A final-hour decline occurred.

The S&P 500 Index made its all-time high of 3027.98 on July 28, 2019.  The known universe back in July knew the Fed would cut rates.  The only suspension was the size of the cut.  The usual suspects poured into stocks and ESUs on the expectation that the Fed would cut funds by 50bps.  They were wrong; and Powell was not as bullish as expected on July 31.  Stocks plunged on the July 31 disappointment.  The S&P 500 Index bottomed at 2822.12 three sessions after the Powell and rate cut disappointments.

The moral of the story: Most of the known universe will replicate the behavior and activity of late July.  Traders and operators will play for a big rally into the expected rate cut at the September 18 FOMC Meeting.  A few major indices are likely to jump to all-time highs.  But, lookout thereafter!

Attorneys general of 8 states and D.C. investigating Facebook for possible antitrust violations

https://www.washingtonpost.com/business/2019/09/06/new-york-announces-antitrust-investigation-into-facebook-kicking-off-bipartisan-effort/

Congressman suing Twitter: ‘I’ve run out of patience’ for biased tech giants

Last summer, Rep. Devin Nunes (R-Calif.) was one of several prominent Republicans whose Twitter accounts had disappeared from the drop-down menu that normally populates when typing in a name…

https://www.lifesitenews.com/news/congressman-suing-twitter-ive-run-out-of-patience-for-biased-tech-giants

Department of Justice launches antitrust probe into Ford, Honda, BMW and VW after they agree to follow emissions standards BEYOND those proposed by Donald Trump

https://www.dailymail.co.uk/news/article-7435905/Department-Justice-launches-antitrust-probe-Ford-Honda-BMW-VW-emissions-standards.html

American Airlines mechanic charged with sabotaging an aircraft

The mechanic, Abdul-Majeed Marouf Ahmed Alani… said “his intention was not to cause harm to the aircraft or its passengers” but to “cause a delay or have the flight cancelled in anticipation of obtaining overtime work,”…  https://www.cnbc.com/2019/09/05/american-airlines-mechanic-charged-with-sabotaging-an-aircraft.html

 

Farm loan delinquencies surge in U.S. election battleground Wisconsin

The share of farm loans that are long past-due rose to 2.9% at community banks in Wisconsin as of June 30, the highest rate in comparable records that go back to 2001, according to a Reuters analysis of loan delinquency data published by the Federal Deposit Insurance Corporation…

https://www.reuters.com/article/us-usa-election-wisconsin-farmers/farm-loan-delinquencies-surge-in-u-s-election-battleground-wisconsin-idUSKCN1VQ

 

Today – The S&P 500 Index had an Inside Day on Friday.  Traders will be sensitive to the high (2985.03) and low (2972.51).  Traders want to use the Monday upward bias and the hope that Draghi will announce QE and a rate cut on Thursday to push the S&P 500 Index above 3000.

 

ESUs were +7.50 at 21:40 ET on Sunday night because traders know that stocks rally on Monday and into ECB meetings.  There is little fear of the downside now.  It will remain so until the FOMC Communique is released on September 18.  There is no reason to overthink what it occurring now.

 

ESUs are +2.75 at 22:00 ET on Sunday night due to this: Apple, Foxconn Broke China Labor Law iPhone Productions – using too many temporary staff… The claims came from China Labor Watch…

https://www.bloomberg.com/news/articles/2019-09-09/apple-foxconn-broke-a-chinese-labor-law-for-iphone-production

 

The ESU dip on the China labor law news is due to traders wondering if the charge is an act of Chinese trade retaliation.

 

The S&P 500 Index 50-day MA: 2945; 100-day MA: 2912; 150-day MA: 2875; 200-day MA: 2809

The DJIA 50-day MA: 26,562; 100-day MA: 26,298; 150-day MA: 26,118; 200-day MA: 25,640

 

S&P 500 Index support: 2972, 2955-60, 2940-45, 2930, 2922, 2914, 2900, 2880, 2870, 2860, 2853

Resistance: 2985 (double top), 2990, 3000, 3013-17, 3027

 

Expected economic data: July Consumer Credit $16.0B; Fed officials in blackout period

 

S&P 500 Index – Trender trading model and MACD for key time frames

Monthly: Trender and MACD are positive – 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 and MACD are positive – a close below 2945.85 triggers a sell signal

 

Robert Mueller helped Saudi Arabia cover up its role in 9/11 attacks: suit [by 9/11 victims]

“In October of 2001, Mueller shut down the government’s investigation after only three weeks, and then took part in the Bush [administration’s] campaign to block, obfuscate and generally stop anything about Saudi Arabia from being released,” added Premoli, now a plaintiff in the 9/11 lawsuit against Saudi Arabia… Mueller threw up roadblocks in the path of his own investigators working the 9/11 case, while making it easier for Saudi suspects to escape questioning, multiple case agents told me. Then he deep-sixed what evidence his agents did manage to uncover, according to the 9/11 lawsuit against the Saudis.

    “He’s a villain, and an arrogant one to boot,” former FBI Agent Mark Wauck said, adding that his former boss has a long history of acting as a “servant of the deep state,” or the permanent DC ruling class…   https://nypost.com/2019/09/07/robert-mueller-helped-saudi-arabia-cover-up-its-role-in-9-11-attacks-suit/

 

Lawsuit Alleges Brennan Received Info from ‘FBI Spy’ to Target Flynn and Trump

Lokhova, who is a British citizen, is also suing Halper for spreading malicious rumors that she is a Russian spy…   https://saraacarter.com/defamation-lawsuit-alleges-brennan-received-info-from-fbi-spy-to-target-flynn-and-trump/

 

Elizabeth Warren @ewarren Sep 6: On my first day as president, I will sign an executive order that puts a total moratorium on all new fossil fuel leases for drilling offshore and on public lands. And I will ban fracking—everywhere.

   We need universal free public college and technical school so students can graduate without crushing debt. And I’ve got a plan to cancel student loan debt for more than 95% of Americans who hold it.

 

[Swedish] Professor Says Eating Human Flesh Will Save Planet from ‘Climate Change’

Söderlund refers to the taboos against it as “conservative.”… “Are we humans too selfish to live sustainably?” Capitalist selfishness?  Just another reason to hate Socialism… https://www.climatedepot.com/2019/09/05/cannibalism-professor-says-eating-human-flesh-will-save-planet-from-climate-change/

 

The urge to save humanity is almost always only a false-face for the urge to rule it.”—H.L. Mencken

 

Ex-NFL running back @ReggieBush: If the @Patriots sign @AB84 the whole league is rigged  [The Pats signed Antonio Brown/AB84.  If the NFL becomes the NBA (Players form teams); we’re out!]

 

Suspicions grow that Antonio Brown to the Patriots didn’t happen out of the blue on Saturday

Remember when everyone believed running back LeGarrette Blount misbehaved his way out of Pittsburgh, knowing that the Patriots would welcome him back? Remember when Blount was pressed on that subject and didn’t deny it? Those same suspicions are wafting now…

https://profootballtalk.nbcsports.com/2019/09/08/suspicions-grow-that-antonio-brown-to-the-patriots-didnt-happen-out-of-the-blue-on-saturday/?sf218996614=1

 

Chris Mortensen @mortreport:Brown also sought out advice from social media consultants for ideas on how to accelerate his release with Raiders. The first blow was posting the letter from Mike Mayock informing him of fines that included “conduct detriment,” which led to the next day confrontation

Well that is all for today

I will see you Tuesday night.

 

 

 

 

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