GOLD:$1508.20 UP $2.70 (COMEX TO COMEX CLOSING)
Silver:$17.90 DOWN 12 CENTS (COMEX TO COMEX CLOSING)
Closing access prices:
Gold : $1505.50
Definition of Rico
RICO is typically used to indict mobsters – which makes its use against employees of the largest bank in America a very disquieting event. But even more disquieting is that two trial lawyers compared JPMorgan Chase to the Gambino crime family five long years ago and recommended in their 2016 book that the bank’s officers be prosecuted under the RICO statute.” … Pam Martens and Russ Martens
we are coming very close to a commercial failure!!
JPMorgan has been receiving gold with reckless abandon and sometimes supplying (stopping)
today RECEIVING 2/19
CONTRACT: SEPTEMBER 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,504.600000000 USD
INTENT DATE: 09/25/2019 DELIVERY DATE: 09/27/2019
FIRM ORG FIRM NAME ISSUED STOPPED
657 C MORGAN STANLEY 9
661 C JP MORGAN 2
685 C RJ OBRIEN 1
686 C INTL FCSTONE 1
690 C ABN AMRO 7 1
737 C ADVANTAGE 2 6
905 C ADM 9
TOTAL: 19 19
MONTH TO DATE: 1,770
NUMBER OF NOTICES FILED TODAY FOR SEPT CONTRACT: 19 NOTICE(S) FOR 1900 OZ (0.0590 tonnes)
TOTAL NUMBER OF NOTICES FILED SO FAR: 1770 NOTICES FOR 177000 OZ (5.5054 TONNES)
18 NOTICE(S) FILED TODAY FOR 90,000 OZ/
total number of notices filed so far this month: 8680 for 43,400,000 oz
Bitcoin: OPENING MORNING TRADE : $ 8391 DOWN 41
Bitcoin: FINAL EVENING TRADE: $ 8104 DOWN 311
Let us have a look at the data for today
IN SILVER THE COMEX OI ROSE BY A SHOCKING 1186 CONTRACTS FROM 215217 UP TO 216,403 DESPITE THE HUGE 56 CENT LOSS IN SILVER PRICING AT THE COMEX.
TODAY WE ARRIVED CLOSER TO AUGUST’S 2018 RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.
WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY AS WELL WE ARE WITNESSING CONSIDERABLE LONGS PACKING THEIR BAGS AND MIGRATING OVER TO LONDON IN GREATER NUMBERS IN THE FORM OF EFP’S. WE WERE NOTIFIED THAT WE HAD A HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:,
FOR SEPT 0,; DEC 1601 AND ZERO FOR ALL OTHER MONTHS AND THEREFORE TOTAL ISSUANCE 1601 CONTRACTS. WITH THE TRANSFER OF 1601 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 1601 EFP CONTRACTS TRANSLATES INTO 8.005 MILLION OZ ACCOMPANYING:
1.THE 56 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.
43.400 MILLION OZ INITIALLY STANDING IN SEPT. (HUGE)
YESTERDAY, THERE WAS A MAJOR ATTEMPT BY THE BANKERS TO COVER THEIR MASSIVE SHORTFALL AT THE SILVER COMEX. OUR OFFICIAL SECTOR//BANKERS AGAIN USED COPIOUS NON BACKED PAPER IN THEIR SUCCESSFUL ENDEAVOUR TO LOWER SILVER’S PRICE IN ORDER TO MAKE UNDERWRITTEN COMEX CONTRACTS NULL AND VOID. HOWEVER TO THEIR SHOCKING SURPRISE, NOBODY LEFT THE SILVER COMEX ARENA AS NOT ONLY DID THE COMEX OI RISE (1067 CONTRACTS) BUT ALSO A HUGE GAIN IN EFP ISSUANCE (1601 EFP’S). TOTAL GAIN A HUGE 2668 CONTRACTS WITH THAT MASSIVE PRICE HIT OF 56 CENTS. OUR OFFICIAL SECTOR/BANKER FRIENDS WERE NOT AMUSED WITH THIS.
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:
30,957 CONTRACTS (FOR 18 TRADING DAYS TOTAL 30,957 CONTRACTS) OR 154.78 MILLION OZ: (AVERAGE PER DAY: 1719 CONTRACTS OR 8.599 MILLION OZ/DAY)
TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER: SO FAR THIS MONTH OF AUGUST: 154.78 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 22.11% 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: 1704.39 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 SURPRISINGLY STRONG SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 1186, DESPITE THE 56 CENT LOSS IN SILVER PRICING AT THE COMEX /YESTERDAY... THE CME NOTIFIED US THAT WE HAD A HUGE SIZED EFP ISSUANCE OF 1601 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 AN ATMOSPHERIC SIZED: 2787 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:
i.e 1601 OPEN INTEREST CONTRACTS HEADED FOR LONDON (EFP’s) TOGETHER WITH INCREASE OF 1186 OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH A 56 CENT LOSS IN PRICE OF SILVER AND A CLOSING PRICE OF $18.02 WITH RESPECT TO YESTERDAY’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. 1.082 BILLION OZ TO BE EXACT or 154% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MARCH MONTH/ THEY FILED AT THE COMEX: 18 NOTICE(S) FOR 90,000 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:
- 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 43.400 MILLION OZ//
- THE RECORD WAS SET IN AUGUST 22/2018: 244,196 CONTRACTS, WITH A SILVER PRICE OF $14.78//.
- 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 . TODAY THE CROOKS STARTED THEIR LIQUIDATION OF SPREADING ACTIVITY
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 HUGE 24997 CONTRACTS, TO 633,947 WITH THE HUGE $26.90 PRICING LOSS WITH RESPECT TO COMEX GOLD PRICING (RAID)// YESTERDAY// / HOWEVER THE MAJORITY OF THE LOSS IN COMEX OI CAME FROM THE LIQUIDATION OF SPREADERS. I WOULD ALSO LIKE TO POINT OUT THE HUGE DIFFERENCE BETWEEN THE PRELIMINARY NUMBERS AND FINAL NUMBERS SOMETHING THAT THE cftc REFUSES TO ADDRESS!!
THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A HUMONGOUS SIZED 16,161 CONTRACTS:
OCT 2019: 0 CONTRACTS, DEC> 16,161 CONTRACTS AND ALL OTHER MONTHS ZERO. The NEW COMEX OI for the gold complex rests at 633,947,,. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S. THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY. THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.
IN ESSENCE WE HAVE AN ATMOSPHERIC AND CRIMINALLY SIZED LOSS IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 8836 CONTRACTS: 24947 CONTRACTS DECREASED AT THE COMEX (MOSTLY SPREADERS) AND 16161 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS TOTAL OI LOSS OF 8836 CONTRACTS OR 8836 OZ OR 27.48 TONNES. YESTERDAY WE HAD A LOSS OF $26.90 IN GOLD TRADING….
AND WITH THAT HUGE LOSS IN PRICE, WE HAD A HUMONGOUS LOSS IN GOLD TONNAGE OF 27.48 TONNES!!!!!! THE BANKERS/OFFICIAL SECTOR WERE SUPPLYING INFINITE SUPPLIES OF SHORT GOLD COMEX PAPER WITH RECKLESS ABANDON AS THE COMEX GOLD VOLUME AND OPEN INTEREST ARE HUGE. THEY WERE SUCCESSFUL IN THEIR ATTEMPT TO FLEECE SOME LONGS AS ONE OF THEIR FUNCTIONS WAS TO MAKE UNDERWRITTEN COMEX CONTRACTS NULL AND VOID. THE CME PRELIMINARY NUMBERS WERE A TINY LOSS AND THE FINAL NUMBER A HUGE 24,997 LOSS. THE DIFFERENTIAL WAS A GIGANTIC 20,662. THE MAJORITY OF THE LOSS WAS DUE TO THE SPREADERS ILLEGALLY LIQUIDATING THEIR CONTRACTS AT DIFFERENT TIMES OF THE DAY YESTERDAY MAGNIFYING THE ATTACK SOMETHING THAT THESE CROOKS DO AT EVERY UPCOMING ACTIVE DELIVERY MONTH WHETHER IT IS GOLD OR SILVER. THE CFTC REFUSE TO ANSWER ANY QUESTIONS ADDRESSED TO THEM ON THIS OBVIOUS CRIMINAL ACTIVITY (THIS ACTIVITY HAS BEEN ALSO HIGHLIGHTED IN BRIEFS SUBMITTED TO THE FCA IN LONDON.
ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF SEPT : 143,552 CONTRACTS OR 1,4355,200 oz OR 446.50 TONNES (18 TRADING DAY AND THUS AVERAGING: 7975 EFP CONTRACTS PER TRADING DAY
TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS : THIS MONTH IN 18 TRADING DAYS IN TONNES: 446.50 TONNES
TOTAL ANNUAL GOLD PRODUCTION, 2018, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 3555 TONNES
THUS EFP TRANSFERS REPRESENTS 446.50/3550 x 100% TONNES =12.57% OF GLOBAL ANNUAL PRODUCTION
ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE: 4598.59 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 LARGER THAN EXPECTED DECREASE IN OI AT THE COMEX OF 24,997 WITH THE HUGE PRICING LOSS THAT GOLD UNDERTOOK YESTERDAY($26.90)) //.WE ALSO HAD A HUGE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 16,161 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 16,161 EFP CONTRACTS ISSUED, WE HAD AN ATMOSPHERIC AND CRIMINALLY SIZED LOSS OF 8836 CONTRACTS IN TOTAL OPEN INTEREST ON THE TWO EXCHANGES:
16,161 CONTRACTS MOVE TO LONDON AND 24,997 CONTRACTS DECREASED AT THE COMEX. (IN TONNES, THE LOSS IN TOTAL OI EQUATES TO 27.48 TONNES). ..AND THIS HUGE DECREASE OF DEMAND OCCURRED DESPITE THE HUGE LOSS IN PRICE OF $26.90 WITH RESPECT TO YESTERDAY’S TRADING AT THE COMEX.
THE COMEX IS NOW UNDER FULL ASSAULT WITH RESPECT TO GOLD AND SILVER.
we had: 19 notice(s) filed upon for 1900 oz of gold at the comex.
With respect to our two criminal funds, the GLD and the SLV:
WITH GOLD UP $2.70 TODAY//(COMEX-TO COMEX)
NO CHANGE IN GOLD INVENTORY AT THE GLD.
INVENTORY RESTS AT 924.94 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
WITH SILVER DOWN 12 CENTS TODAY: WOW!!!
SOMETHING MUST BE BREWING: WE HAD A HUGE PAPER DEPOSIT OF 3.975 MILLION OZ DESPITE TWO DAYS OF LOSSES IN PRICE
NO CHANGES IN SILVER INVENTORY AT THE SLV//
/INVENTORY RESTS AT 381.786 MILLION OZ.
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
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
OUTLINE OF TOPICS TONIGHT
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in SILVER ROSE BY A SURPRISINGLY STRONG SIZED 1186 CONTRACTS from 215,217 UP TO 216,403 AND CLOSER TO 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.
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 1601: AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1601 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. IF WE TAKE THE OI GAIN AT THE COMEX OF 1067 CONTRACTS TO THE 1601 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN AN ATMOSPHERIC AND CRIMINALLY SIZED GAIN OF 2787 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 13.34 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// AND FINALLY SEPT: 43.400 MILLION OZ//
RESULT: A SURPRISINGLY STRONG SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE HUGE 56 CENT LOSS IN PRICING THAT SILVER UNDERTOOK IN PRICING// YESTERDAY. WE ALSO HAD A STRONG SIZED 1601 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
2 ) Gold/silver trading overnight Europe, Goldcore
and in NY: Bloomberg
3. ASIAN AFFAIRS
I)THURSDAY MORNING/ WEDNESDAY NIGHT:
SHANGHAI CLOSED DOWN 26.35 POINTS OR 0.89% //Hang Sang CLOSED UP 96.58 POINTS OR 0.37% /The Nikkei closed UP 28.09 POINTS OR 0.13%//Australia’s all ordinaires CLOSED DOWN .43%
/Chinese yuan (ONSHORE) closed DOWN at 7.1300 /Oil UP TO 57.21 dollars per barrel for WTI and 64.13 for Brent. Stocks in Europe OPENED MIXED// ONSHORE YUAN CLOSED DOWN // LAST AT 7.1300AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1238 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
a(This is interesting: China launches a new attack ship which is capable of invading Taiwan
Another Bank being investigated in Holland for money laundering and terrorism financing
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
The global shipping industry has been rattled by uSA sanctions on Chinese tanker firms
7. OIL ISSUES
The oil and gas shale industry in deep anxiety due to a low price and losses on their balance sheet. A survey indicates a capex collapse is imminent.
8 EMERGING MARKET ISSUES
9. PHYSICAL MARKETS
Yao and Sin, writing for Reuters believes that China has allowed its yuan to weaken and this is causing much anger with Trump
10. important USA stories which will influence the price of gold/silver
a)Market trading/LAST NIGHT/USA
i)Final Q2 GDP revision is unchanged at 2% despite profit growth shrinking
ii)Final Q2 GDP revision is unchanged at 2% despite profit growth shrinking
iii)Trump still not getting anywhere with his tariffs. The trade deficit actually widened
iii) Important USA Economic Stories
a)We now have results of the 2nd Term Rep and it was terribly oversubscribed as the funding shortage keeps getting worse. knows why..Pam and Russ Martens are pounding the table that Deutsche bank plus two other banks have a severe funding shortage. We know that Deutsche bank is massively short silver and that may be the reason for the continual repo money thrown at the bank.
b)Yesterday after the close, the Fed doubles the allotment of Rep money. If fully subscribed it will pump in a huge 1/4 trillion dollars into the system. It sure looks like Deutsche bank is causing massive headaches for the global finances
c)Brandon Smith offers his view that the Fed is deliberately pricking the bubble and wants a crash.
iv) Swamp commentaries)
a)Acting DNI denies that he stated he would resign over the Trump phone call
b)This morning: an absolute joke… the whistleblower complainant only heard about the stuff through others
c)Michael Snyder delves into the phony Ukrainian hoax
d)Seems that this whistleblower had help and everything was contrived
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 MUCH LARGER THAN EXPECTED 24997 CONTRACTS TO A LEVEL OF 633,947 WITH THE HUGE LOSS OF $26.90 IN GOLD PRICING WITH RESPECT TO YESTERDAY’S // COMEX TRADING). THE MAJORITY OF THE LOSS AT THE COMEX WAS DUE TO THE INITIAL LIQUIDATION PHASE IN OUR BANKER/OFFICIAL SECTOR’S ARSENAL OF TRICKS.
WE ARE NOW IN THE NON ACTIVE DELIVERY MONTH OF SEPT.. THE CME REPORTS THAT THE BANKERS ISSUED HUMONGOUS SIZED TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 16,181 EFP CONTRACTS WERE ISSUED:
FOR SEPT; 0 CONTRACTS: DEC: 16,161 AND ZERO FOR ALL OTHER MONTHS:
TOTAL EFP ISSUANCE: 16,181 CONTRACTS.
THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS. ALSO REMEMBER THAT THERE IS NO DOUBT A HUGE DELAY IN THE ISSUANCE OF EFP’S AND IT PROBABLY TAKES AT LEAST 48 HRS AFTER OUR LONGS GIVE UP THEIR COMEX CONTRACTS FOR THEM TO RECEIVE THEIR EFP’S AS THEY ARE NEGOTIATING THIS CONTRACT WITH THE BANKS FOR A FIAT BONUS PLUS THEIR TRANSFER TO A LONDON BASED FORWARD.
ON A NET BASIS IN OPEN INTEREST WE LOST THE FOLLOWING TODAY ON OUR TWO EXCHANGES: 8836 TOTAL CONTRACTS IN THAT 16,161 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A HUGE SIZED 24997 COMEX CONTRACTS ALBEIT MOSTLY LIQUIDATION OF SPREADING CONTRACTS.
THE BANKERS SUPPLIED THE NECESSARY AND INFINITE AMOUNT OF SHORT PAPER IN GOLD. THE BANKERS SUCCEEDED IN LOWERING GOLD’S PRICE BY A HUGE LOSS OF $26.90. THE ILLEGAL ACTIVITY OF THE SPREADING LIQUIDATION MAGNIFIED THE LOSSES AT THE COMEX. I CAN ASSURE YOU THAT THE LONGS THAT PICKED UP CHEAP CONTRACTS WILL TURN THAT PAPER INTO REAL METAL.
NET LOSS ON THE TWO EXCHANGES :: 8836 CONTRACTS OR 883600 OZ OR 27.48 TONNES.
We are now in the NON active contract month of SEPT and here the open interest stands at 19 CONTRACTS and we LOST 2 contracts. We had 5 notices filed on yesterday so we gained 3 contracts or an additional 300 oz of gold will stand for delivery at the comex (and those standing for metal.. nobody morphed into London forwards),… the siege continues as the story for physical gold is the name of the game despite the criminal antics of the bankers/official sector.
The next active delivery month is October and here the OI FELL by 13699 contracts DOWN to 17,382. The month of November saw a gain of 101 contracts and thus the OI is ADVANCED to 533. The very big December contract month saw its oi FALL by 11,203 contracts DOWN to 485,518. First day notice is this coming Monday, Sept 30 and thus we have 2 more reading days with the front October contract month exceedingly high in open interest. October, even though it is an active delivery month, it is generally the poorest in deliveries as most longs would prefer to go straight to December, the strongest delivery month for the entire year.
TODAY’S NOTICES FILED:
WE HAD 19 NOTICES FILED TODAY AT THE COMEX FOR 1900 OZ. (0.0590 TONNES)
And now for the wild silver comex results.
Total COMEX silver OI ROSE BY A STRONG SIZED 1186 CONTRACTS FROM 215,217 UP TO 216,403 (AND CLOSER TO THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018. THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S CONSIDERABLE OI COMEX GAIN OCCURRED DESPITE A HUGE 56 CENT LOSS IN PRICING.//YESTERDAY.
WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF SEPT. HERE WE HAVE 18 OPEN INTEREST STAND FOR DELIVERY WITH A LOSS OF 2 CONTRACTS. WE HAD 0 NOTICES FILED YESTERDAY SO WE LOST 2 CONTRACTS OR AN ADDITIONAL 10,000 OZ OF SILVER WILL NOT STAND AT THE COMEX…. AS THESE GUYS MORPHED INTO A LONDON BASED FORWARD AS WELL AS ACCEPTING A FIAT BONUS. THEY NO DOUBT COULD NOT FIND ANY SILVER METAL ON THIS SIDE OF THE POND SO THEY WILL TRY THEIR LUCK IN LONDON.
THE NEXT NON ACTIVE CONTRACT MONTH IS OCTOBER AND IT ROSE BY 28 CONTRACTS TO STAND AT 1459. NOVEMBER SAW A SMALL GAIN OF 3 CONTRACTS TO STAND AT 251. THE NEXT ACTIVE DELIVERY MONTH AFTER SEPT IS DECEMBER AND HERE THE OI RISES BY 1290 CONTRACTS UP TO 167,309.
TODAY’S NUMBER OF NOTICES FILED:
We, today, had 18 notice(s) filed for 90,000, OZ for the SEPT, 2019 COMEX contract for silver
Trading Volumes on the COMEX TODAY: 363,216 CONTRACTS
CONFIRMED COMEX VOL. FOR YESTERDAY: 517,597 contracts (raid//spreader
FINAL standings for SEPT/GOLD
|Withdrawals from Dealers Inventory in oz||nil oz|
|Withdrawals from Customer Inventory in oz||
|Deposits to the Dealer Inventory in oz||nil oz
|Deposits to the Customer Inventory, in oz||
|No of oz served (contracts) today||
|No of oz to be served (notices)||
|Total monthly oz gold served (contracts) so far this month||
|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 0 deposit into the customer account
i) Into JPMorgan: nil oz
ii) Into everybody else: 0
total gold deposits: 0 oz
very little gold arrives from outside/ zero amount arrived today
we had 1 gold withdrawal from the customer account:
i) Out of Scotia: 160.75 oz was withdrawn from Scotia
total gold withdrawals; 160.75 oz
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 (1770) x 100 oz , to which we add the difference between the open interest for the front month of SEPT. (19 contract) minus the number of notices served upon today (19 x 100 oz per contract) equals 177,000 OZ OR 5.5054 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 (1770 x 100 oz) + (19)OI for the front month minus the number of notices served upon today (19 x 100 oz )which equals 177,000 oz standing OR 5.5054 TONNES in this active delivery month of SEPT.
We GAINED 3 contracts or an additional 300 oz will seek metal on this side of the pond instead of morphing over to London. The gold comex is still 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 22.854 TONNES OF REGISTERED ( GOLD OFFERED FOR SALE) VS 27.153 TONNES OF GOLD STANDING //AUGUST AND 5.5054 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 1 TRANSACTION ON THIS FRONT IN SEPT SO FAR, AND THUS I WILL ADD THE 27.153 TONNES TO THE 5.5054 TONNES (EQUALS 32.6584 TONNES) AGAINST THE 22.854 TONNES OF REGISTERED GOLD.
IN THE LAST 35 MONTHS 107 NET TONNES HAS LEFT THE COMEX.
And now for silver
AND NOW THE DELIVERY MONTH OF SEPT.
|Withdrawals from Dealers Inventory||NIL oz|
|Withdrawals from Customer Inventory||
|Deposits to the Dealer Inventory||
|Deposits to the Customer Inventory||
|No of oz served today (contracts)||
|No of oz to be served (notices)||
|Total monthly oz silver served (contracts)|| 8680 contracts
|Total accumulative withdrawal of silver from the Dealers inventory this month||NIL oz|
|Total accumulative withdrawal of silver from the Customer inventory this month|
we had 0 inventory movement at the dealer side of things
total dealer deposits: nil oz
total dealer withdrawals: nil oz
we had 0 deposits into the customer account
into JPMorgan: nil oz
*** JPMorgan for most of 2017 and in 2018 has adding to its inventory almost every single day.
JPMorgan now has 153.4 million oz of total silver inventory or 50.36% of all official comex silver. (153.4 million/304.6 million
total customer deposits today: nil oz
i) Out of Brinks: 600,003.900 oz
ii) Out of Scotia: 482,903.720 oz
iii) Out of HSBC: 603,975.300 oz
we had 0 adjustment :
total dealer silver: 83.480 million
total dealer + customer silver: 314.848 million oz
The total number of notices filed today for the SEPTEMBER 2019. contract month is represented by 18 contract(s) FOR 90,000 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 8680 x 5,000 oz = 43,400,000 oz to which we add the difference between the open interest for the front month of SEPT. (18) and the number of notices served upon today 18 x (5000 oz) equals the number of ounces standing.
Thus the INITIAL standings for silver for the SEPT/2019 contract month: 8680 (notices served so far) x 5000 oz + OI for front month of SEPT (18)- number of notices served upon today (18)x 5000 oz equals 43,400,000 oz of silver standing for the SEPT contract month.
We LOST 2 contracts or 10,000 additional oz of silver will NOT stand at the comex as these guys DECIDED to morph into London based forwards as well as ACCEPT a fiat bonus as physical supplies seemed scarce on this side of pond..
LADIES AND GENTLEMEN: THE COMEX IS UNDER ASSAULT FOR BOTH PHYSICAL GOLD AND SILVER WITH SILVER IN THE LEAD BY FAR. DESPITE MASSIVE RAIDS, LONGS CONTINUE WITH THEIR HUNT AT THE COMEX FOR PHYSICAL METAL.. IT WILL NOT BE LONG BEFORE WE WITNESS A COMMERCIAL FAILURE..STAY TUNED..WE WITNESSED CONSIDERABLE BANKER SHORT COVERING IN SILVER TODAY AND AN ATTEMPTED BANKER SHORT COVERING IN GOLD WITH ZERO SUCCESS.
TODAY’S NUMBER OF NOTICES FILED:
We, today, had 18 notice(s) filed for 90,000 OZ for the SEPT, 2019 COMEX contract for silver
TODAY’S ESTIMATED SILVER VOLUME: 106,838 CONTRACTS (we had considerable spreading activity..accumulation
CONFIRMED VOLUME FOR YESTERDAY: 136,964 CONTRACTS..
YESTERDAY’S CONFIRMED VOLUME OF 136,964 CONTRACTS EQUATES to 684 million OZ 97.7% OF ANNUAL GLOBAL PRODUCTION OF SILVER..makes sense!!
COMMODITY LAW SUGGESTS THAT OPEN INTEREST SHOULD NOT BE MORE THAN 3% OF ANNUAL GLOBAL PRODUCTION. THE CROOKS ARE SUPPLYING MASSIVE PAPER TRYING TO KEEP SILVER IN CHECK.
The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
NPV for Sprott
1. Sprott silver fund (PSLV): NAV RISES TO -1.25% ((SEPT 25/2019)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -1.15% to NAV (SEPT 25/2019 )
Note: Sprott silver trust back into NEGATIVE territory at +%-/Sprott physical gold trust is back into NEGATIVE/ -1.25%
3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA):
NAV 15.12 TRADING 14.64///DISCOUNT 3.16
And now the Gold inventory at the GLD/
SEPT 26//WITH GOLD UP $2.70 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 924.94 TONNES
SEPT 25/WITH GOLD DOWN $26.90 A HUGE PAPER DEPOSIT OF: 16.42 TONNES//INVENTORY RESTS AT 924.94 TONNES
SEPT 24/WITH GOLD UP $8.65 TODAY: A MONSTROUS CHANGE IN GOLD INVENTORY AT THE GLD: AN OUT OF THIS WORLD DEPOSIT OF 14.37 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 894.15 TONNES
SEPT 23/WITH GOLD UP $16.25 ON THE DAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER ADDITION OF 10.65 TONNES//INVENTORY RESTS AT 894.15 TONNES
SEPT 20/WITH GOLD UP $8.60 ON THE DAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 883.06 TONNES
SEPT 19/WITH GOLD DOWN $8.90 TODAY: A BIG CHANGES IN GOLD INVENTORY AT THE GLD: A PAPER DEPOSIT OF 3.23 TONNES OF GOLD INTO THE GLD///INVENTORY RESTS AT 883.60 TONNES
SEPT 18/WITH GOLD UP $2.40 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER DEPOSIT OF 5.86 TONNES/INVENTORY RESTS AT 880.37 TONNES
SEPT 17/WITH GOLD UP $1.50: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 874.51 TONNES
SEPT 16/WITH GOLD UP $11.75 TODAY: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER WITHDRAWAL OF 5.86 TONNES FROM THE GLD///INVENTORY RESTS AT 874.51 TONNES
SEPT 13/WITH GOLD DOWN $7.75 TODAY: A BIG PAPER WITHDRAWAL OF 2.05 TONNES FROM THE GLD/INVENTORY RESTS AT 880.37 TONNES
SEPT 12//WITH GOLD UP $4.70 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 882.42 TONNES
SEPT 11/WITH GOLD UP $5.30 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 882.42 TONNES
SEPT 10/WITH GOLD DOWN $11.75 TODAY: A HUGE 7.33 PAPER TONNES OF GOLD WAS WITHDRAWN FROM THE GLD/INVENTORY RESTS AT 882.42 TONNES
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
SEPT 26/2019/ Inventory rests tonight at 924.94 tonnes
*IN LAST 669 TRADING DAYS: 24.22 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 569- TRADING DAYS: A NET 142.43 TONNES HAVE NOW BEEN ADDED INTO THE GLD INVENTORY.
Now the SLV Inventory/
SEPT 26/WITH SILVER DOWN 12 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER DEPOSIT OF 3.975 MILLION OZ INTO THE SLV//INVENTORY RESTS AT 381.786 MILLION OZ/
SEPT 25.//WITH SILVER DOWN 58 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 377.811 MILLION OZ//
SEPT 24/WITH SILVER DOWN 5 CENTS TODAY: A BIG CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 2.338 MILLION OZ INTO THE SLV///INVENTORY RESTS AT 377.811 MILLION OZ//
SEPT 23.2019/WITH SILVER UP 80 CENTS TODAY; NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 375.473 MILLION OZ.
SEPT 20/ WITH SILVER UP 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 375.473 MILLION OZ.
SEPT 19/WITH SILVER DOWN 4 CENTS TODAY; A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER WITHDRAWAL OF 1.029 MILLION OZ FROM THE SLV///INVENTORY RESTS AT 375.473 MILLION OZ/
SEPT 18/WITH SILVER DOWN 24 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 376.502 MILLION OZ//
SEPT 17/WITH SILVER UP 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 376.502 MILLION OZ//
SEPT 16/WITH SILVER UP 41 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV; A PAPER WITHDRAWAL OF 2.899 MILLION OZ OF SILVER LEAVES THE SLV///INVENTORY RESTS AT 376.502 MILLION OZ/
SEPT 13/ NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 379.401 MILLION OZ//
SEPT 12/ NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 379.401 MILLION OZ//
SEPT 11/WITH SILVER DOWN ONE CENT TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 379.401 MILLION OZ//
SEPT 10/WITH SILVER UP 2 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV” A WITHDRAWAL OF 1.778 MILLION PAPER OZ OF SILVER///INVENTORY RESTS AT 379.401 MILLION OZ//
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/
Inventory 381.786 MILLION OZ
LIBOR SCHEDULE AND GOFO RATES:
6 Month MM GOFO 2.15/ and libor 6 month duration 2.04
Indicative gold forward offer rate for a 6 month duration/calculation:
G0LD LENDING RATE: – .11
12 Month MM GOFO
LIBOR FOR 12 MONTH DURATION: 1.99
GOFO = LIBOR – GOLD LENDING RATE
GOLD LENDING RATE = -.01
PHYSICAL GOLD/SILVER STORIES
i) GOLDCORE BLOG/Mark O’Byrne
◆ Gold prices have inched 0.3% higher today as a sharp drop of nearly 2% yesterday has attracted bargain hunters
◆ Gold tested support at $1,500/oz after another peculiar sell off in the futures market saw prices fall $30 in two hours on the COMEX yesterday with most of the selling coming after European and London markets had closed
◆ The sell off came despite robust demand for gold globally as seen in the world’s largest gold ETF seeing yesterday, in just one day, its holdings rise 1.81% to 924.94 tonnes
◆ The smart money continues to diversify into gold due to the concerns about the outlook for risk assets
◆ Prudent money is moving to the safety of fully segregated gold coin and bar ownership outside of large debtor nations and the vulnerable global banking system (see Jim Rogers interview below)
NEWS and COMMENTARY
Gold Prices (LBMA – USD, GBP & EUR – AM/ PM Fix)
25-Sep-19 1530.85 1528.75, 1231.11 1234.62 & 1391.24 1391.77
24-Sep-19 1520.25 1520.65, 1220.76 1216.67 & 1382.36 1381.36
23-Sep-19 1519.50 1522.10, 1222.13 1225.90 & 1385.48 1385.11
20-Sep-19 1504.10 1501.90, 1199.07 1203.62 & 1361.06 1362.52
19-Sep-19 1498.40 1500.70, 1200.67 1201.76 & 1354.85 1357.08
18-Sep-19 1502.20 1503.50, 1206.27 1204.90 & 1360.39 1359.92
17-Sep-19 1499.30 1502.10, 1208.89 1207.24 & 1361.51 1360.45
16-Sep-19 1502.05 1497.20, 1207.35 1203.30 & 1357.25 1359.46
13-Sep-19 1506.30 1503.10, 1209.41 1208.19 & 1356.88 1358.35
12-Sep-19 1502.95 1515.20, 1219.94 1227.46 & 1362.88 1373.53
11-Sep-19 1493.65 1490.65, 1208.21 1209.07 & 1354.74 1355.90
ii) Important gold commentaries courtesy of GATA/Chris Powell
Yao and Sin, writing for Reuters believes that China has allowed its yuan to weaken and this is causing much anger with Trump
Its leash lengthened, China’s yuan flirts with trade war role
Submitted by cpowell on Thu, 2019-09-26 13:22. Section: Daily Dispatches
By Kevin Yao and Noah Sin
Thursday, November 26, 2019
China, having let the yuan cross the once-sacred red line of 7 per dollar, will allow its currency to fall further and may even risk U.S. anger by using it as a bargaining chip in already thorny trade talks, market participants believe.
Beijing had kept the yuan on the strong side of 7 since 2008, so effectively abandoning that trading floor on Aug. 5 triggered intense investor activity.
The currency’s 3.8% decline in August as a whole was its sharpest monthly fall in 25 years, prompting U.S. President Donald Trump to launch a fresh salvo in the more than 15-month tariff war by labeling China a currency manipulator.
While the central bank denies that charge, its attempts this month to smooth the yuan’s weakening suggest the currency’s fluctuations are not entirely unsupervised. …
… For the remainder of the report:
Join GATA here:
New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
Friday-Monday, November 1-4, 2019
iii) Other physical stories:
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.
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.
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.
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.
Futures Reverse Drop, Rise On Renewed “Trade Optimism”
Yesterday we predicted that looking to today’s overnight market wrap headline, it would be one of two choices:
A few hours later, that’s exactly what happened because after an initial modest dip in S&P futures during a mixed Asian session where Trump’s impeachment process sparked some concerns, risk swiftly rebounded once Europe opened for trading, with Reuters chiming in this morning right on cue:
“U.S.-China trade optimism lifts stocks”…
… after China’s MOFCOM sounded constructive, saying the two sides are “closely communicating and preparing for making trade talk progress in October.” Commenting on this, Reuters said that “positive noises from China on U.S. trade talks lifted European stocks on Thursday and snuffed out a modest rally in safe-haven assets that had dominated in Asia.” Because almost a year and a half after the trade war started with no possibility of ending soon, all it takes to still fool the algos is hope, which in turn has pushed global market into a sea of green.
As a result, after some initial weakness, S&P 500 futures turned higher, pointing to more gains on Wall Street after Wednesday’s solid gains which trampled over any concerns over a Trump impeachment. The dollar was unchanged after soaring the most since March the previous day, while gold rebounded back over $1,500 after Wednesday plunge. The pound weakened amid rising acrimony among politicians as the U.K. limps toward Brexit.
Trading started off on the back foot, with Asian markets struggling for direction. MSCI’s broadest index of Asia-Pacific shares outside Japan and Japan’s Nikkei both ended fractionally higher after Japanese Prime Minister Shinzo Abe and Trump signed a limited trade deal on Wednesday, one which excluded autos. But major China tech stocks slumped more than 3% for the second day running after the PBOC drained a net 100bn in liquidity, and Australian shares fell 0.5% while gold tiptoed higher in a sign that some investors were still searching out safety.
This cautious mood reversed however once Europe opened: Europe’s main bourses initially stuttered but muscled 0.5% higher when China said it was in close communication with Washington and preparing to make progress in upcoming trade talks. President Trump had also stoked hopes when he told reporters the two sides were having “good conversations” and that an agreement “could happen sooner than you think”.
Europe’s Stoxx 600 jumped 0.7%, reversing much of yesterday’s sharp drop, with all but two industry groups in the green. Tech stocks, among the biggest losers on Wednesday, lead gains on Thursday. Industrial goods and auto shares also outperform, while banks are worst performers
As they bought stocks, investors dumped European government bond holdings, as the third German resignation from the European Central Bank’s board in recent years overnight also amplified doubts around the sustainability its stimulus measures; that said the move was not too dramatic and 10-year yields rose no more that 2 basis point across the region,, and the major currencies barely budged too, “having now got used to the constant tooing and froing of the year-long trade war” as Reuters put it.
Ironically just a day earlier, trade war odds seemed to spike after Trump sharply criticized China in a speech at the United Nations General Assembly, where he said he would not accept a “bad deal”.
“I think the trade talks will take years if it ever has a solution,” Makor Capital Markets strategist, Stéphane Barbier de la Serre, correctly concluded. “To me, what we see (today) is just market expectations, it is purely micro management of the market, nothing else. We have nearing a point where nobody cares about the discussions.”
Meanwhile, transcripts of a call showed Trump had nudged Ukraine’s president for possible information on presidential rival Joe Biden, but it was hardly the quid-pro-quo picture painted previously by Democrats who are frothing at the mouth to impeach Trump no matter the cost. Traders however remained skeptical about the likelihood of Trump being officially impeached.
In a late Wednesday report, an adviser to Ukraine’s President said President Trump’s insistence for the two leaders to discuss a possible investigation into Joe Biden was a precondition for their July 25 phone call, while it was also reported the Whistleblower’s complaint against US President Trump has been declassified and could be releases as early as Thursday morning according to sources.
In FX, the sidewinding dollar was still well within reach of a 2-year high having also shrugged off the latest controversy surrounding Trump. The Bloomberg Dollar spot index stabilized as the greenback was supported by month- and quarter-end flows, while Treasuries advanced. The yen rose amid persisting political turmoil in U.S. and the U.K. and as trade sentiment remained mixed. Sterling extended Wednesday’s drop, reversing an early gain, while the kiwi led gains among Group-of-10 currencies after RBNZ central bank Governor Adrian Orr said authorities are unlikely to need ‘unconventional’ monetary-policy tools.
Elsewhere in the region the Philippines joined the army of global central banks which have cut interest rates this month, with a 25 basis point trim to 4% Mexico could slice its 8% rates but a similar amount later too.
In other central bank news, Fed’s Kaplan (non-voter, dove) said he feels current policy setting is on the margin of being a little accommodative, while he is agnostic on whether or not more cuts are required and is keeping an open mind. Furthermore, Kaplan said the odds of a recession within next 12 months are relatively low and that repo problems last week show a need for more liquidity but are not sign of broader stress.
In commodities, oil prices swung in and out of the red meanwhile with Brent fetching $62.52 per barrel and U.S. crude at $56.50 a barrel.
Expected data include GDP and wholesale inventories. Carnival and Micron are among companies reporting earnings.
- S&P 500 futures up 0.2% to 2,991.75
- STOXX Europe 600 up 0.6% to 389.78
- MXAP up 0.1% to 158.34
- MXAPJ up 0.07% to 504.30
- Nikkei up 0.1% to 22,048.24
- Topix up 0.2% to 1,623.27
- Hang Seng Index up 0.4% to 26,041.93
- Shanghai Composite down 0.9% to 2,929.09
- Sensex up 0.8% to 38,911.86
- Australia S&P/ASX 200 down 0.5% to 6,677.58
- Kospi up 0.05% to 2,074.52
- Brent futures up 0.2% to $62.51/bbl
- German 10Y yield fell 0.6 bps to -0.581%
- Euro down 0.05% to $1.0937
- Italian 10Y yield rose 1.0 bps to 0.504%
- Spanish 10Y yield fell 1.5 bps to 0.118%
- Gold spot up 0.3% to $1,507.92
- U.S. Dollar Index up 0.1% to 99.10
Top Overnight News from Bloomberg
- Boris Johnson sparked uproar during angry exchanges in the House of Commons after he was dragged back to Parliament to explain why he broke the law and tried to suspend the legislature in the run-up to Brexit
- ABN Amro Bank NV fell the most in more than three years in Amsterdam trading after Dutch authorities opened a criminal investigation into the bank under anti-money laundering laws
- Trump tried to squelch the latest threat to his presidency with the release of a transcript of his call with Ukraine’s president. Democrats say transcript bolsters move for impeachment inquiry
- The Federal Reserve should consider increasing its balance sheet by $250 billion over the next two quarters through outright purchases of Treasury securities to help diminish the risk of future money market turmoil, two former U.S. central bank officials said
- A record pace of defaults hit China’s domestic bonds this year. In 2020, it could be the offshore market’s turn. That’s because of a looming wall of dollar debt, issued by now-stressed borrowers, that comes to maturity. There’s $8.6 billion of offshore bonds coming due next year that currently have at least 15% yields — classifying them as stressed, according to data compiled by Bloomberg
- London’s dominance of the derivatives market is under threat, with European firms at risk of being blocked from using clearinghouses in the British capital within six months
Asian equity markets traded somewhat mixed as the region struggled to maintain the momentum from the US where President Trump ignited trade hopes after he suggested a deal with China could happen ‘sooner than you think’, while the US and Japan also reached a first stage trade agreement. ASX 200 (-0.5%) and Nikkei 225 (+0.1%) were higher at the open although the optimism in Australia later faded amid losses in commodity related sectors especially gold miners after the precious metal slumped to test the USD 1500/oz level, while the Japanese benchmark was positive but with gains capped as participants reflected on the limited US-Japan trade pact which didn’t involve autos although the US was said to have agreed to not impose Section 232 tariffs on Japan while talks are underway. Hang Seng (+0.4%) and Shanghai Comp. (-0.9%) were both underpinned at the open following the encouraging trade rhetoric from US President Trump who also stated that China is making large agricultural purchases and that there is a good chance we’ll make a trade deal with China which is getting closer and closer. However, the advances in the region later waned considering Trump’s tendency to flip flop on trade discussions and as US impeachment concerns lingered, while the PBoC’s open market operations also resulted to a considerable CNY 100bln net drain in liquidity. Finally, 10yr JGBs were lower following the bear steepening in the US and after the BoJ reduced its purchase amounts of 5yr-10yr JGBs for today’s Rinban operations.
Top Asian News
- Chinese Economy Weakens Across the Board, Early Indicators Show
- ‘Massive Snowball’ Effect to Spur China Bond Defaults Overseas
- India’s Combined Fiscal Deficit Seen Rising to 7.5% by Fitch
- Hong Kong Protests Threaten Billionaires’ Ties With Beijing
Major European Indices (Euro Stoxx 50 +0.5%) are higher, following a more mixed AsiaPac lead, as the market digests the latest trade developments; China’s MOFCOM sounded constructive, saying the two sides are “closely communicating and preparing for making trade talk progress in October” (reminder; US President Trump yesterday hinted that a deal could come sooner than we think). Moreover, a stumbling block for the potential US/Japan trade deal seems to have been averted; USTR Lighthizer said it is not the intention of the US to put tariffs on Japanese auto exports. However, on the EU/US front, the WTO look set to rule that the US can sanction up to USD 8bln worth of EU goods over Airbus (AIR FP) aid, sources said. It is also worth noting that Eurozone broad money supply increased more than forecast. ING note that it considered one of the best leading indicators for the eurozone economy, and as such, could be lending some support to sentiment (though EURUSD is just off YTD lows). Sectors are mostly higher, lead by Tech (+1.3%), and Energy (+1.3%), with Telecoms and Financials (+0.2) the laggards for now. In terms of stock specific movers; ABN Amro (-10.0%) shares took a tumble, as the company joined the ranks of other notable European banks in that it is now being investigated by public prosecutors over potential money laundering violations. Imperial Brands (-10.6%) issued negative outlook, expressing concerns over its next generation of products. British American Tobacco (-1.3%) moved lower in sympathy, and US tobacco names may not escape the session unscathed, not least given Imperial Brands specifically names US action on vaping products as resulting in a notable slowdown of vapour product growth. Pearson (-18.1%) sunk after the co. provided disappointing guidance. Wirecard (+2.3%) was bid premarket, after SocGen initiated the company at a Buy premarket. Ericsson (-0.7%) managed to reverse the majority of what was initially substantial losses as the broader market advanced, on the co. provided guidance for Q3 provisions in relation to investigations State-side, and sees costs at SEK 12bln. Finally, airlines were under pressure after IAG (-3.5%) issued a profit warning.
Top European News
- IMF to Leave Ukraine Without Accord Amid Privatbank Uncertainty
- Ericsson Expects to Pay $1 Billion in U.S. Corruption Probes
- British Airways Owner Warns Industry Woes Spill Over Into 2020
- Barclays Names El-Erian and Fitzpatrick as New Board Members
In FX, the DXY is marginally firmer on the day thus far with the index topping yesterday’s high (99.06) in a continuation of recent strength, whilst an optimistic tone from China’s MOFCOM regarding October trade talks in Washington did little to stem the Buck’s rise. DXY has breached its 12 Sept high at 99.10 with its YTD high at 99.37. Next up on the docket State-side, the final metrics US GDP and PCE prices, weekly initial jobless claims and a slew of Fed speaks including Kaplan (non-voter), Bullard (voter, dissenter), Calrida (voter), Daly (non-voter), Kashkari (non-voter) and Barkin (non-voter). In terms of US politics, participants will also be eyeing the potential release of the whistleblower’s complaint against US President Trump in regard to the controversial phone call between Trump and his Ukrainian counterpart, which some members of congress described as “troubling”.
- NZD, AUD – All firmer, with outperformance in the Kiwi following comments from RBNZ Governor Orr who struck an optimistic tone on the domestic economy whilst highlighting that unconventional policy tools are not currently necessary. NZD/USD reached a 0.63+ status overnight, albeit remains off highs (0.6310) at around 0.6290 after kicking the session off at 0.6270. Meanwhile, its Aussie counterpart remains buoyed by the optimistic US/China trade tone after the US President said a deal with China could happen “sooner than you think”, whilst rhetoric from China was remained constructive ahead of trade talks in Washington next month. AUD/USD trades north of 0.6750 with little by way of immediate technical levels in play.
- GBP, EUR – Both softer on the day with Cable the underperformer amid a firmer Buck coupled with Brexit angst as the UK PM remains resilient to a Brexit extension, whilst rhetoric from the EU is also less optimistic as most diplomats believe another delay will only increase the chances of No Deal down the line, according to Sun’s Nick Gutteridge. GBP/USD has tested 1.2300 to the downside after breaching a barrage of support levels between 1.2346-50 with the next level to the downside touted at 1.2233 (9th Sept low). The Euro is marginally softer, down from highs of 1.0965 due to a firmer Dollar as the pair moves closer to its YTD low of 1.0924. In terms of levels to the downside, below the psychological 1.0900 mark, the pair sees a strong Fib level at 1.0864 ahead of support at 1.0850. Note: EUR/USD sees large option expiries at today’s NY cut with 2bln between 1.0925-50 and 6bln at 1.1000. On the docket, ECB’s de Guindos, and Villeroy are set to speak later in the session.
- JPY, CHF – Discrepancies seen in the safe-haven currencies, albeit marginal with USD/JPY within a narrow intraday parameter of 107.60-80 ahead of a slew of Fed speakers. CHF meanwhile remains modestly softer with USD/CHF at session highs of around 0.9940 ahead of its 50 WMA and 200 DMA both at 0.9948.
In commodities, crude is trading flat, albeit seeing some upside in recent trade alongside European equities, amid a lack of notable fresh supply side/geopolitical developments. OPEC Secretary General Barkindo said that Saudi Arabia has almost restored the bulk of its oil supply, in line with recent commentary from the Saudis. Barkindo added that OPEC will continue to do whatever it takes to insulate oil market from politics but took an extraordinary OPEC+ meeting off the table. Elsewhere, the Kazaks said that had no plans to up crude production in wake of the recent Saudi attacks. ING note the fall in crude prices that occurred yesterday, on reports that Saudi Aramco is ahead of schedule by about a week in bringing capacity back. However, “it still seems that the market is being complacent,” the bank says, “with less than a US$3/bbl risk premium priced into the market, despite the heightened geopolitical risk in the region”. WTI Nov’ 19 and Brent Nov’ 19 futures currently sit near the USD 56.50/bbl and USD 62.50/bbl levels respectively. Elsewhere, Gold prices are slightly higher, but have been coming off somewhat during the European session, as the precious metal consolidates following yesterday’s declines in which it lost the USD 1520/oz handle again. Elsewhere in the metal complex, Copper prices are similarly lacklustre.
US Event Calendar
- 8:30am: GDP Annualized QoQ, est. 2.0%, prior 2.0%; GDP Price Index, est. 2.4%, prior 2.4%
- 8:30am: Core PCE QoQ, est. 1.7%, prior 1.7%
- 8:30am: Advance Goods Trade Balance, est. $73.4b deficit, prior $72.3b deficit
- 8:30am: Personal Consumption, est. 4.7%, prior 4.7%
- 8:30am: Wholesale Inventories MoM, est. 0.1%, prior 0.2%
- 8:30am: Retail Inventories MoM, est. 0.1%, prior 0.8%, revised 0.8%
- 8:30am: Initial Jobless Claims, est. 211,500, prior 208,000; Continuing Claims, est. 1.67m, prior 1.66m
- 9:45am: Bloomberg Consumer Comfort, prior 62.7
- 10am: Pending Home Sales MoM, est. 1.0%, prior -2.5%; Pending Home Sales NSA YoY, est. 1.3%, prior 1.7%
- 11am: Kansas City Fed Manf. Activity, est. -4, prior -6
DB’s Jim Reid concludes the overnight wrap
The political drama surrounding President Trump and a possible impeachment inquiry was the main talking point again even if positive trade momentum won out in the end. Other than a slight dip, markets appeared fairly non-fussed over the impeachment risks which probably goes to show how complicated, long-winded, and uncertain this investigation is in reality, especially since the Republicans control the Senate. Yesterday’s late afternoon headlines (European time) instead from the President suggesting that a trade deal with China “could happen sooner than you think” in the end saw markets recover after the post impeachment inquiry losses from the previous day and the morning session.
Indeed the S&P 500 (+0.62%) finished on a firmer footing despite trading down nearly half a percent at the lows after a rough transcript was released of the call between Trump and Ukraine President Zelenskiy yesterday. It showed that Trump asked Zelenkskiy to look into political rival Joe Biden, with the specific reference in the statement saying that “there’s a lot of talk about Biden’s son, that Biden stopped the prosecution and a lot of people want to find out about that…so whatever you can do with the attorney general would be great” but fell short of an explicit link to his days-earlier decision to freeze more than $391 million in military aid to Ukraine. As mentioned above, equities took a leg up on the positive trade comment, and then rallied further in the afternoon when USTR Lighthizer said that it’s “not our intention” to impose tariffs on Japanese cars. Ultimately, the more trade-sensitive tech sector outperformed, with the NASDAQ and Philly semiconductors indices up +1.05% and +1.78% respectively.
As for treasuries, 10y yields rose +8.5bps while the 2s10s curve finished +3.7bps steeper at 5.3bps. That marked the third consecutive session with the 10y trading in an intra-day range of around 10bps, which hasn’t happened in six weeks. Yields kicked higher after the Fed’s Evans said that his rate forecast does not include another cut which was somewhat surprising, as our economists had previously believed he leaned somewhat dovishly on the committee. Since he is a voting member of the FOMC this year, his rate expectation is particularly important. On the other hand, there was some attention paid to new research from the Fed staff which introduced a new measure of the labour market, which shows the recent job growth trend to be at its weakest level since 2010, which would argue for more accommodative rate policy. Finally, St. Louis Fed President Bullard reiterated his stated view that he would’ve preferred to cut rates by 50bps last week. Overnight we also heard from Kaplan (non-voter) and he said that the message from debt markets around the world is that monetary policy isn’t going to be sufficient on its own to lift growth. He added, “The marginal return in lowering the fed funds here has got diminishing returns. QE in the future may well have diminishing returns.” These comments from him signals that there is need for the fiscal spending alongside monetary policy support.
On a similar vein the resignation of Sabine Lautenschläger, the German Executive Board member was a bit of a surprise last night and she becomes the third German ECB resignation in the QE era. Lautenschläger is a hawk and was clearly opposed to the restarting of QE. Given this and the relatively high dissent rate at the last meeting, it hints at very difficult meetings to come in order to rally around a consensus. Policy tensions are building across countries in the Euro-area.
Back to markets and the VIX ‘spiked’ to as high as 18.45 after the Trump transcript was released but settled down to close at 15.88, back lower than where it ended Tuesday and now just 2 points above the September lows, and well below the closing high of 25.45 back in August. Meanwhile in commodities the main mover yesterday was oil where WTI fell -1.40% after inventories data showed a 2.4 million barrel increase in stockpiles, compared to expectations for a slight drawdown. We are now only +2.99% above the levels before the Saudi attack and an impressive -10.78% below the intra-day highs immediately after.
Meanwhile, Mr Trump and Japanese PM Abe signed the “first stage” of an initial pact after meeting at the UNGA yesterday, with Trump saying that he expects “in the fairly near future” that the US will have “final comprehensive deals signed with Japan.” In terms of specifics, the trade deal will help US farmers by opening up Japan’s agricultural market as it will eliminate or reduce tariffs on $7.2bn of US food and agricultural products, helping US beef, corn, pork and other farmers. Trump also said that the deal, which also covers a $ 40bn digital trade agreement, would help reduce a “chronic” US trade deficit and both the countries’ goal is for the accord to go into force on January 1, 2020. The limited deal will also not require a vote from Congress according to Trump while Japanese PM Abe said that he received direct confirmation from President Trump that the US won’t slap tariffs on Japan’s auto exports. Markets will hope this eventually extends to European autos.
This morning in Asia markets are trading mixed with the Nikkei (+0.24%), Hang Seng (+0.16%) and Kospi (+0.12%) all up while the Shanghai Comp (-0.73%) is down. Meanwhile, the BoJ reduced purchases in the key 5-10yr segment by JPY 30bn at today’s regular operation thereby bringing the purchases to JPY 350bn (vs. JPY 380bn at previous operation). This marks the fourth reduction in this segment in six weeks and the move come after the yield on 5yr JGBs reached record lows yesterday. They are up +1.9bps to -0.379% with 10yrs +1.6bps at -0.252%. Elsewhere, futures on the S&P 500 are down -0.15% while yields on 10yr USTs are down -3.8bps this morning.
Back to yesterday, where the political drama playing out in the House of Commons saw MPs back in their seats following the return of parliament. PM Johnson spoke late in the day after a fraught session with the highlight being his fresh challenge to the opposition to join him in supporting an election. The Labour party declined to take the bait, and looks set to maintain their position that they will not support a fresh vote until after Article 50 is extended successfully or until the Benn bill can be made watertight.
In other news, the data didn’t add much to proceedings yesterday. In the US, August new home sales rose a better than expected +7.1% mom reading (vs. +3.8% expected) which continues the trend of some outperformance in the housing sector, even if this data tends be volatile and prone to revisions. Meanwhile in the UK CBI retail sales volume survey for September wasn’t quite as bad as feared, printing at -16 (vs. -25 expected).
To the day ahead now, which for data this morning includes August M3 money supply data for the Euro Area and October consumer confidence in Germany. In the US the focus will likely be on the third revision to Q2 GDP where no change from the +2.0% qoq estimate is expected. Along with that, we’ll also get the August advance goods trade balance, August wholesale inventories, latest weekly jobless claims print, August pending home sales and September Kansas Fed manufacturing survey. Away from that data it’s a busy day for central bank speak. Indeed over at the Fed we’re due to hear from Kaplan at 2.30pm BST, Bullard at 3pm BST, Clarida and Daly at 4.45pm BST, Kashkari at 7pm BST and Barkin at 9.30pm BST. Along with that, ECB President Draghi speaks at 2.30pm BST at a conference in Frankfurt. Finally the BoE’s Cunliffe is also due to speak. The Mexico policy meeting is also due today.
I)THURSDAY MORNING/ WEDNESDAY NIGHT:
SHANGHAI CLOSED DOWN 26.35 POINTS OR 0.89% //Hang Sang CLOSED UP 96.58 POINTS OR 0.37% /The Nikkei closed UP 28.09 POINTS OR 0.13%//Australia’s all ordinaires CLOSED DOWN .43%
/Chinese yuan (ONSHORE) closed DOWN at 7.1300 /Oil UP TO 57.21 dollars per barrel for WTI and 64.13 for Brent. Stocks in Europe OPENED MIXED// ONSHORE YUAN CLOSED DOWN // LAST AT 7.1300 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1238 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
b) REPORT ON JAPAN
3 C CHINA
This is interesting: China launches a new attack ship which is capable of invading Taiwan
China Launches New Attack Ship With Capabilities Of Invading Taiwan
We have outlined that China represents one of the greatest long-term strategic threats to the Indo-Pacific region and the US military that operates with-in. President Trump made it extremely clear last week that the People’s Liberation Army Navy (PLAN) is a “threat to the world.”
New reports surfaced on Twitter indicating the PLAN has started the launch process of a new amphibious assault ship that could soon be capable of launching an attack on Taiwan.
A statement from the PLAN Wednesday said the Type 075, a helicopter carrier displacing more than 30,000 tons, is undergoing launch preparations at China State Shipbuilding Corporation’s Hudong-Zhonghua shipyard, reported Naval News.
Latest news from the first Type 075 LHD at Hudong–Zhonghua shipyard: The big red “lantern” – usually containing colour strips – has been attached to the bow, balloons are ready … seems as if launch is indeed scheduled for tomorrow.
(Image via cycy03666 via @horobeyo)
Probably the best set of images of the first Type 075 LHD so far from today … unfortunately the second ship as well as certain details like the hangar as still psed, but anyway an impressive ship.
(Images via @10969YUKIKAZE )
The statement said water is being pumped into the dry dock in which the ship’s hull was built.
PLAN officials said Type 075 is a new class of warship, entirely produced in China, will be able to carry out amphibious combat missions.
Development work on Type 075 started in 2011, and it will be a “vertical” amphibious assault vessel capable of launching attacks on the mountainous East Coast of Taiwan.
For comparison, the Type 075 is slightly smaller than the US Navy’s landing helicopter assault vessel and more comparable to ones that are currently deployed in the Australian Navy.
The expected launch of Type 075 could be during a massive military parade in Beijing next week (Oct. 01). The PLAN will show the world its advanced vessels, fifth-generation fighters, advanced combat drones, robots, main battle tanks, and a show of force that could result in a few angry tweets from President Trump.
China has declared Taiwan as its territory although it has never controlled it, and threatens to invade by military force if Taipei resists unification.
Chinese and foreign analysts don’t see China launching an amphibious attack on Taiwan in the near term, rather a conflict with the US could spiral out of control in the South/East China Sea.
“Looking at various flashpoints in Asia including the Korean peninsula and the South China Sea, I have come to the conclusion that Taiwan is the most dangerous one,” Brendan Taylor, a strategic studies professor at Australian National University, told the Financial Times.
China has a long term plan, and it’s by the year 2049, Taiwan will be under Beijing control, which means sometime in the coming decades, a war could break out between both countries.
The world is positioning for conflict, and the reports we bring you — detail how countries are actively preparing for that inevitable day.
Beijing Accuses Washington Of Spreading “Anti-China Sentiment” In Hong Kong As Protests Drag On
Beijing is less-than-thrilled about American and British politicians offering words of encouragement and sympathy to Hong Kong’s protesters. It has made no secret of this.
But as the Hong Kong Human Rights and Democracy Act of 2019 finds growing support in Washington, Beijing is doubling down on its criticism of the US.
Hedge Funder Kyle Bass, who has been closely monitoring the situation in China and HK and frequently comments on twitter, recently bet against the Hong Kong dollar, which has been pegged to the dollar for 36 years. Bass claimed in a letter to investors earlier this year that the loss of Hong Kong’s special economic privileges via a change in US law or an executive order from the president would be economically devastating for Hong Kong. The subsequent economic shock would likely be enough to force the HKMA to abandon its currency peg, he said.
Beijing likely understands this, and knows that without these special privileges, Hong Kong will be rendered useless as a pathway for capital flowing to and from the West.
With this animosity weighing on the US-China relationship, it’s difficult to imagine how a trade breakthrough might be reached next month. But setting the issue of trade aside, the deputy commissioner of China’s Ministry of Foreign Affairs has some more scathing comments about western interference in Hong Kong as Beijing doubles down on a narrative that’s at the center of state propaganda about the protests. (of course, that narrative is aided by protesters waving American flags and appealing to President Trump to save them from China).
This time, they went a step further, accusing ‘senior’ US officials of personally meeting with the “anti-China” forces (apparently a reference to protest leader Joshua Wong’s recent trip to Washington to testify at a Congressional hearing).
Song Ruan, deputy commissioner of China’s Ministry of Foreign Affairs in Hong Kong, told foreign media that the U.S. and other Western countries were playing a “negative and disgraceful role” in the demonstrations that have gripped Hong Kong for more than three months. He said some foreign politicians “have sided with anti-China forces” in order to “sow trouble in China as a whole, and hold back China’s development in every possible way.”
“American senior officials had high-profile meetings with and spared no effort to cheer the anti-China forces who intend to mess up Hong Kong,” Song said at the briefing, during which he also extolled China’s decades of economic accomplishments less than a week before the 70th anniversary of the People’s Republic of China on Oct. 1.
“They have distorted the truth, condoned the rioters and claimed support for the right to peaceful protests, but turned a blind eye to the crime of the rioters, who undermined law and order and assaulted the police and citizens,” he said.
Echoing President Trump’s own tactics, the deputy commission blamed the foreign press for writing stories that are “unfair to China.”
“The top priority is to stop violence, end the chaos and restore order,” Song said.
He also scolded journalists working for foreign media for what he described as unfair coverage of the political turmoil.
“Some foreign media have confounded right with wrong, applied double standards and acted selectively in reporting the Hong Kong situation,” he said. “Instead of telling the truth, they have fanned the flames and cheered the opposition and violent extremists by offering them a platform to spread rumor.”
Like Bass, China’s Song warned that if Washington passes the Human Rights and Democracy Act of 2019, it could hurt Chinese and American businesses alike.
But Song warned that such a bill would have a negative impact on Hong Kong and the “one country, two systems” legal framework. “If the act is passed, it will undermine the confidence of international investors in Hong Kong, and stakeholders – including American businesses – will suffer,” he said.
But the protests have already caused tremendous damage to the HK economy. The Asian Development Bank on Wednesday slashed its Hong Kong growth forecast for 2019 to just 0.3% from 2.5% in the prior forecast. Meanwhile, the protests have shown no signs of slowing down, as violent clashes between demonstrators and police continue, prompting many Hong Kongers to explore the possibility of emigrating.
Another Bank being investigated in Holland for money laundering and terrorism financing
Dutch Prosecutors Investigating ‘Money Laundering & Terrorism Financing’ Violations At ABN Amro
As avid Zero Hedge readers are probably aware, a wave of money laundering scandals has swept across the European banking sector over the past two years, exposing gaping holes in both individual banks’ compliance schemes and the EU-wide regulatory framework which, according to critics, is routinely exploited by criminals from the former Soviet Union and…possibly even certain heads of state.
And the latest bank to be swept up in the controversy is perennially troubled Dutch lender ABN Amro, which is still majority-owned by the Dutch state after being bailed out during the financial crisis. Bloomberg reports that the Dutch lender has disclosed a criminal probe into alleged AML and KYC failures. Specifically, the bank is being investigated for possible violations of a Dutch anti-money laundering and terrorist-financing law.
The disclosure prompted the largest slump (as much as 10.3%) in ABN shares in three years when the Amsterdam market opened on Thursday. The bank’s bonds also fell.
And the selloff could easily intensify in the coming weeks and months. KBW banking analyst Jean-Pierre Lambert said the uncertainty surrounding the investigation could continue to weigh on ABN Amro’s shares. Like Danske Bank, seen as the epicenter of the European money-laundering shockwave, investigators has unearthed unreported suspicious transactions – but it’s unclear whether evidence of actual money laundering or tax evasion has been uncovered.
“There’s so much uncertainty for the shareholders now,” said KBW analyst Jean-Pierre Lambert by phone. “The big question is whether there’s actual money laundering involved in this case. That’s what the prosecutor’s investigation probably is trying to find out.”
Indeed, details about the probe remain sketchy:
The Dutch probe adds to a series of money laundering cases that have engulfed lenders particularly in northern Europe, and highlighted weaknesses in the region’s efforts to fight the flow of illicit funds. Only this week, the former head of Danske Bank in Estonia, the unit at the center of a $220 billion money-laundering scandal, was found dead after disappearing from his home on Monday. On Tuesday, Germany’s Deutsche Bank AG received a visit from law enforcement officials over its role in the scandal.
ABN Amro is under investigation for failing to report suspicious transactions and not conducting sufficient checks on its clients, the Dutch prosecutor’s office said on Thursday. The bank said separately that it faces an investigation under the Dutch anti-money laundering and terrorist-financing law, without providing further detail.
And all of this is happening during the waning days of CEO Kees van Dijhuizen’s rule: He said in June that he would step down when his contract term ends in April 2020. The bank is still looking for a successor.
Another issue: According to Bloomberg Intelligence banking analyst Philip Richards, it’s impossible to anticipate the extent of the ABN Amro’s wrongdoing and – more pertinently – the size of any potential fine. The only clue we have is that the bank took a €114 million ($124.62 million) proviso during the second quarter. That came after the Dutch Central Bank asked ABN Amro to to review all domestic retail clients (which would suggest that the international money laundering rings and shadowy Moldovan criminal syndicates aren’t the focus here).
At the time, ABN Amro warned that it could face sanctions by Dutch authorities, but claimed that it would be impossible to estimate the size of any potential fine.
But there’s one critical factor working in ABN Amro’s favor here: A very interesting conflict of interest. If ABN Amro’s share price plummets, that could make it harder for the state to unload its 56% stake – something the government pledged, four years ago during the bank’s 2015 IPO, to do as quickly as possible.
ABN Amro isn’t the first Dutch bank to have AML issues: ING Groep, a larger rival of ABN Amro, agreed to pay €775 million euros ($900 million) to settle the case last year. Since then, Dutch banks have pledged to spend more on compliance, and ABN Amro said it would spend another €220 million ($240 million) to “tighten its procedures in its consumer banking, credit card and small business lending operations,” according to the FT.
As the scandal unfolds, ABN senior bankers should probably watch their backs. ABN Amro bankers suffered a string of suspicious suicides a few years back in the wake of the bailout. Earlier this week, a Danske Bank executive embroiled in the bank’s money laundering scandal was found dead.
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
The global shipping industry has been rattled by uSA sanctions on Chinese tanker firms
“Chaotic Mess:” Global Shipping Industry Rattled By US Sanctions On China Tanker Firms
The global shipping industry was thrown a curveball on Wednesday when the U.S. imposed fresh sanctions on Chinese entities and people who it accuses of deliberately purchasing oil from Iran in violation of Washington’s sanctions against Tehran, Bloomberg reported.
The U.S. Treasury Department announced new sanctions on five Chinese nationals and six entities, including a unit of COSCO Shipping Corp., who were knowingly violating restrictions on purchasing Iranian petroleum.
“And we are telling China, and all nations: know that we will sanction every violation,” Pompeo said at a conference on the sidelines of the U.N. General Assembly in NYC.
Bloomberg spoke with oil traders who canceled bookings with sanctioned entities and let provisional charters lapse as they wanted to avoid being caught up in the fight between Washington and Tehran.
Oil traders are concerned about the cargoes that have already been loaded on vessels and don’t know if they have to transfer loads to unsanctioned tankers. It’s a chaotic mess, traders said.
“The sanctions this time are more direct and will have an immediate effect on anyone chartering sanctioned tonnage,” said John Driscoll, chief strategist at JTD Energy Service Pte. “These latest moves are likely to add more inconvenience and result in higher costs. Anyone time-chartering tonnage from a sanctioned owner better have a Plan B.”
Recent missile and drone attacks on Saudi Aramco oil facilities in Saudi Arabia, mostly blamed on Iran, have boosted oil prices, and driven up concerns about a regional war. Iran has since denied responsibility.
“The more Iran lashes out, the greater our pressure will and should be,” Pompeo said. “That path forward begins now with two new actions.”
In a speech at the U.N. General Assembly in New York on Tuesday, President Trump said he would continue pressuring Iran’s economy with sanctions until Tehran collapses.
Trump called Iran “one of the greatest security threats facing peace-loving nations today” at the UN General Assembly this morning. https://cnb.cx/2llnBzX
Ahead of trade talks with China, slated for early October, the new round U.S. sanctions on Chinese companies could complicate negotiations. China has clearly stated that it would like all economic duties and sanctions removed before it would consent to a deal, something that the Trump administration isn’t likely to do. The trade war is more about crushing China, and it’s about defending the American empire against a rising power, that is China, so the idea of removing all sanctions and making a deal with the communists isn’t likely in the next few weeks.
“The U.S. disregards the legitimate rights and interests of all parties and arbitrarily wields the stick of sanctions,” said Chinese Foreign Ministry spokesman Geng Shuang at a daily news briefing in Beijing earlier this week. “It is a gross violation of the basic norms of international relations.”
The sanctioned Chinese firms include China Concord Petroleum Co., Kunlun Shipping Co., Pegasus 88 Ltd., and COSCO Shipping Tanker (Dalian) Seaman & Ship Management Co. All have been charged with violating restrictions on transporting Iranian crude and petroleum products. Additional restrictions were also imposed on executives at some of the companies sanctioned.
Several shipbrokers and charterers spoke with Bloomberg, who asked not to be named, said several tankers operated by COSCO had their bookings dropped, while others saw provisional charters canceled.
Sanctions against Iran and anyone who purchases crude and petroleum products from the Middle Eastern country are aimed at economically destroying Tehran.
China imported 788,000 tons of crude from Iran in August, that compares with a monthly average of 2.4 million tons last year.
And the probabilities of a trade deal between the U.S. and China this year continue to move lower as China has explicitly said it wouldn’t tolerate increasing duties and or sanctions, indicating that the only way to make a deal is the complete removal of all duties and or sanctions.
7. OIL ISSUES
The oil and gas shale industry in deep anxiety due to a low price and losses on their balance sheet. A survey indicates a capex collapse is imminent.
US Shale In A State Of “Deep Anxiety”, Survey Signals Capex Collapse Imminent
The financial stress sweeping over the U.S. shale sector has led to a sharp contraction in activity.
Oil and gas activity in Texas and parts of New Mexico declined in the third quarter, with the Dallas Fed’s business activity index reporting a reading of -7.4, down from -0.6 in the second quarter.
A negative reading signals contraction while a positive reading indicates expansion. Falling deeper into negative territory indicates that shale drillers in the Permian further cut drilling activity over the last three months.
A slowdown in drilling is an even larger problem for oilfield services companies, who provide the equipment, manpower and drilling services that oil companies need. A producer may be able to do more with less, but that “less” falls on the service providers, who have been hit hard. The Dallas Fed said that the business activity in the oilfield services sector fell to -21.8 in the third quarter, down from 6.6 in the second.
Another reading demonstrated the pain for oilfield services. The Dallas Fed’s “equipment utilization index” plunged to -24 from 3, and the figure for the third quarter was the lowest since the oil market’s nadir in 2016.
Problematic for shale drillers is that costs still grew, although at a much slower rate. The “input cost” index stood at 5.6 in the third quarter, an indication of slowing cost increases compared to the 27.1 reading in the second quarter. But the bad news for the industry is that the reading was still in positive territory.
Employment is also weakening. The employment index fell to -8.0 from -2.5, meaning that the Permian likely saw job losses for the second quarter in a row.
When surveyed by the Dallas Fed, 42 percent of the executives from 142 oil and gas firms said that low prices was their most significant constraint on growth. Another 20 percent said the lack of access to capital, followed by 13 percent of which said investor pressure to generate free cash flow. Only a small percentage of respondents said that infrastructure bottlenecks and labor shortages were the top constraint on their growth.
The more intriguing part of the Dallas Fed survey comes in the comments section, which includes statements submitted anonymously by oil and gas executives. Since they are anonymous, the executives are very candid, offering an unvarnished window into sentiment in the sector.
And the mood is decidedly grim.
The downbeat comments cover a range of topics, including market volatility, reduced access to capital, trade war concerns, operational problems, and complaints about environmentalists. Below is a sampling.
First on lack of capital:
- “The capital market has dried up for small E&P companies.”
- “Unless there is a material pullback, the environment is static around $55 per barrel and, even if your business is rock solid at this price, the capital markets aren’t functioning well, so it’s hard to move off of the ”stuck” or “static” outlook.”
- “It seems no one has any money for oil and gas projects. Lack of Wall Street participation in oil is very apparent.”
On operational and cost problems:
- “[M]any oil shale projects are failing to meet production projections… Further cost declines will not be forthcoming.
- “The industry is admitting what independents who drilled with industry partners early on figured out: You cannot make money drilling at this price structure. An ongoing drilling program consumes all your returns and continues to require new money.”
- “We are seeing increased costs in supplies, and vendors are attributing the increases to tariffs.”
- “Over $130 billion of junk status bonds are coming due after 2020 over a two-year period for those that got in the treadmill drilling business, with wells that decline 70 percent in the first year.”
On the slowdown in drilling and production:
- “U.S. oil production is about to fall significantly. The rig count has declined dramatically from one year ago (down 170 rigs), and our customers are not completing wells in order to save cash flow. This all equals a big shift down.”
- “E&P companies have pulled back on spending and continue to pressure service company prices. I expect there will be a number of insolvent companies looking for help in the next six months.”
And on pressure from environmentalists:
- Relating to proposed carbon taxes: “That would kill the independent arena of the U.S. domestic oil industry that just vaulted America to the world’s #1 oil producer spot. And people would be willing to sacrifice that contribution to the U.S. trade balance [and] domestic employment, as well as tax payments to states? It’s a sad testimonial to the decline of the American educational system!”
- “Protestors are so rude and ugly toward oil and gas but, yet, they want our money. Protestors do not have a solution to replace oil and gas in New Mexico.”
There are few, if any, upbeat comments about the state of play in the shale sector in the survey. To be sure, none of this means that the collapse of the industry is just around the corner. In fact, Rystad Energy put out a commentary downplaying the financial predicament for the industry. “In a nutshell, we do not believe the recent bankruptcies that have beset a number of shale players are indicative of an industry-wide epidemic,” Alisa Lukash, a senior analyst on Rystad Energy’s North American Shale team, said.
However, it’s hard to ignore the deep sense of despair from more than a few shale executives. And as Rystad noted, the top 40 shale companies have $100 billion in debt coming due over the next seven years, which will likely force a reckoning in the sector.
8 EMERGING MARKET ISSUES
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings THURSDAY morning 7:00 AM….
Euro/USA 1.0933 DOWN .0019 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems ///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES /GREEN
USA/JAPAN YEN 107.66 DOWN 0.041 (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 1.2347 DOWN 0.0012 (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO OCT 31/2019//
USA/CAN 1.3248 DOWN .0011 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)
Early THIS THURSDAY morning in Europe, the Euro FELL BY 8 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1219 Last night Shanghai COMPOSITE CLOSED DOWN 26.35 POINTS OR 0.89%
//Hang Sang CLOSED UP 96.58 POINTS OR 0.37%
/AUSTRALIA CLOSED DOWN 0,43%// EUROPEAN BOURSES ALL GREEN
Trading from Europe and Asia
EUROPEAN BOURSES ALL GREEN
2/ CHINESE BOURSES / :Hang Sang CLOSED UP 96.58 POINTS OR 0.37%
/SHANGHAI CLOSED DOWN 96.58 POINTS OR 0.37%
Australia BOURSE CLOSED DOWN. 43%
Nikkei (Japan) CLOSED UP 28.09 POINTS OR 0.13%
INDIA’S SENSEX IN THE GREEN
Gold very early morning trading: 1505.40
Early THURSDAY morning USA 10 year bond yield: 1.72% !!! DOWN 2 IN POINTS from WEDNESDAY’S night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.
The 30 yr bond yield 2.17 DOWN 2 IN BASIS POINTS from WEDNESDAY night.
USA dollar index early THURSDAY morning: 99.09 UP 5 CENT(S) from WEDNESDAY’s close.
This ends early morning numbers THURSDAY MORNING
And now your closing THURSDAY NUMBERS \1: 00 PM
Portuguese 10 year bond yield: 0.17% UP 2 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: 0.15%//DOWN 2 in basis point yield from yesterday.
ITALIAN 10 YR BOND YIELD:0.82 DOWN 2 points in basis points yield from yesterday./
the Italian 10 yr bond yield is trading 67 points higher than Spain.
GERMAN 10 YR BOND YIELD: FALLS TO –.58% IN BASIS POINTS ON THE DAY//
THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 1.40% 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…
IMPORTANT CURRENCY CLOSES FOR THURSDAY
Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.0935 DOWN .0016 or 16 basis points
USA/Japan: 107.67 DOWN .027 OR YEN UP 3 basis points/
Great Britain/USA 1.2352 DOWN .0007 POUND DOWN 7 BASIS POINTS)
Canadian dollar DOWN 10 basis points to 1.3269
The USA/Yuan,CNY: AT 7.1325 ON SHORE (DOWN)..GETTING DANGEROUS
THE USA/YUAN OFFSHORE: 7.1273 (YUAN DOWN)..GETTING REALLY DANGEROUS
TURKISH LIRA: 5.6576 EXTREMELY DANGEROUS LEVEL/DEATH WISH.
the 10 yr Japanese bond yield closed at -.25%
Your closing 10 yr US bond yield DOWN 5 IN basis points from WEDNESDAY at 1.69 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.13 DOWN 5 in basis points on the day
Your closing USA dollar index, 99.04 UP 1 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 THURSDAY: 12:00 PM
London: CLOSED UP 27.95 0.70%
German Dax : CLOSED UP 36.58 POINTS OR .30%
Paris Cac CLOSED UP 30.62 POINTS 0.55%
Spain IBEX CLOSED UP 37.40 POINTS or 0.49%
Italian MIB: CLOSED UP 168.51 POINTS OR 0.77%
WTI Oil price; 55.55 12:00 PM EST
Brent Oil: 62.05 12:00 EST
USA /RUSSIAN / RUBLE FALLS: 64.24 THE CROSS HIGHER BY 0.05 RUBLES/DOLLAR (RUBLE LOWER BY 5 BASIS PTS)
TODAY THE GERMAN YIELD FALLS TO –.58 FOR THE 10 YR BOND 1.00 PM EST EST
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 : 56.52//
BRENT : 62.67
USA 10 YR BOND YIELD: … 1.70 down 4 basis pts…
USA 30 YR BOND YIELD: 2.14..down 4 basis pts…
EURO/USA 1.0921 ( DOWN 31 BASIS POINTS)
USA/JAPANESE YEN:107.89 UP .180 (YEN DOWN 18 BASIS POINTS/..
USA DOLLAR INDEX: 99.21 UP cent(s)/ AND DEADLY TO THE EMERGING MARKETS
The British pound at 4 pm Britain Pound/USA:1.2319 DOWN 39 POINTS
the Turkish lira close: 5.6672
the Russian rouble 64.23 DOWN 0.03 Roubles against the uSA dollar.( DOWN 3 BASIS POINTS)
Canadian dollar: 1.274 DOWN 15 BASIS pts
USA/CHINESE YUAN (CNY) : 7.1325 (ONSHORE)/
/USA/CHINESE YUAN(CNH): 7.1239 (OFFSHORE)
German 10 yr bond yield at 5 pm: ,-0.58%
The Dow closed DOWN 76.26 POINTS OR 0.28%
NASDAQ closed DOWN 46.72 POINTS OR 0.58%
VOLATILITY INDEX: 16.06 CLOSED UP .10
LIBOR 3 MONTH DURATION: 2.099%//
USA trading today in Graph Form
Peloton Pounded, Crypto Crushed, Bonds Bid, Stocks Skid
A day lacking Bullard dovish headlines (Kashkari just didn’t go full Bullard), Trump’s tweet focus away from “trade deal is close”, and little movement on the impeachment front meant algos struggled to find news-driven reasons to ignite momentum… but just as traders were giving up, China’s Wang dropped some well-timed quotes through Reuters suggesting optimism for the trade deal, lifting the markets.
1530ET *CHINA’S WANG: CHINA WILLING TO BUY MORE U.S. PRODUCTS:RTRS
Futures show the swings best (biggest trend changes at EU open, US open, and EU close)…
Cash markets briefly tested green on the day after the China headlines, but that was it…
The Dow managed to get green on the week in that late ramp but lost it as stocks sank into the close…
But once those stops were run, the market turned round and said:
China was ugly as Golden Week looms
Europe extended yesterday’s late-day gains but remains in the red for the week…
Peloton IPO’d at $29, opened at $27, and collapsed to a $24 handle…
Momo flip-flopped back again today higher…
Defensives dominated US equity performance…
Treasury yields were lower on the day
10Y Yields went back below 1.70%…
The Dollar extended yesterday’s surge…
…rising to its highest close since May 2017…
Cryptos are having a terrible week led by Bitcoin Cash’s 32% drop!
Bitcoin was battered again today…
As the dollar extended gains, Commodities all slipped lower today…
WTI erased more of the Saudi spike today…
Additionally, NatGas was pummeled lower, headed for the longest streak of declines in more than seven years as U.S. shale production outruns demand and inflates stockpiles.
And now your more important USA stories which will influence the price of gold/silver
a)Market trading: this morning/USA
Stocks Stumble As Admin Comments On Renewed Huawei Crackdown
US equity markets have taken another leg lower this morning, erasing all of yesterday’s gains, after US officials confirm that the Trump admin is unlikely to extend temporary waivers to supply Huawei.
Clearly, following Trump’s UN speech, the relationship with China is not getting closer to a deal – no matter how many times Trump drops an algo-trigering headline on a deal being close…
Yuan also dropped on the news…
Stocks Burst Into The Green On Chinese Foreign Minister Trade Talk Optimism
Here we go again.
Overnight, we said that the market open headline will be driven entirely by the now daily read on trade [optimism|pessimism]…
… and sure enough:
Fast forward a few hours when we it’s deja vu all over again, and with stocks trading perilously red for much of the session, Reuters blasted the now traditional last hour algo “pick me up”, hinting that trade negotiations with China are that much more likely to bear fruit, even though in reality absolutely nothing will be decided until the 2020 election… or Trump’s impeachment, whichever comes first:
- CHINA’S WANG YI SAYS HOPES BOTH SIDES CAN TAKE ‘MORE ENTHUSIASTIC MEASURES,’ REDUCE PESSIMISTIC LANGUAGE AND ACTIONS IN TRADE DISPUTE – RTRS
- CHINA’S WANG YI SAYS ‘IF EVERYONE DOES THIS, TALKS WILL NOT ONLY RESUME, BUT WILL PROCEED AND YIELD RESULTS’
This headline blast was sufficient to send both the dow and the S&P in the green…
… in a carbon copy of both the overnight session and countless previous days when the “trade optimism” headline hit with minutes left in trading, in what has now become a daily farce.
Final Q2 GDP revision is unchanged at 2% despite profit growth shrinking
Final Q2 GDP Revision Unchanged At 2.0% Even As Profit Growth Shrinks
There were no surprises in today’s second revision of Q2 GDP, which the BEA reported moments ago printed at 2.0%, just as expected, and unchanged from the 2.0% first revision estimate; the number, of course, was down from the 3.1% annualized GDP growth in Q1 which was not revised.
The revised Q2 increase in real GDP reflected increases in consumer spending and government spending, while inventory investment, exports, business investment, and housing investment decreased. Imports, which are a subtraction in the calculation of GDP, decreased.
The increase in government spending reflected increases in both federal and state and local government spending.
Similar to last month, the increase in consumer spending reflected increases in both goods and services that were widespread across major categories. After jumping an upward revised 4.7% in the first revision, personal consumption was modestly trimmed, rising to 4.6% currently, which was still tied for the highest PCE in almost five years, since Q4 2014, and up sharply from just 1.1% in Q1.
Looking at the inflationary components of the report, the GDP price index rose 2.4% in 2Q after rising 1.1% prior quarter; largest increase in a year.
Yet one number came in hotter than expected, with Core PCE rising 1.9% in 2Q after rising 1.1% prior quarter, and above the 1.7% expected and also as reported in the first revision.
Nonresidential fixed investment, or spending on equipment, structures and intellectual property fell 1%.
Finally, the BEA also reported corporate profits rose 3.7% in prior quarter, down from 5.1% previously, and noted the following:
- Corp. profits up 1.3% Y/Y in 2Q after falling 2.2% prior quarter
- Financial industry profits increased 0.6% Q/q in 2Q after rising 5.8% prior quarter
- Federal Reserve bank profits up 9.9% in 2Q after falling 10.9% prior quarter
iii) Important USA Economic Stories
We now have results of the 2nd Term Rep and it was terribly oversubscribed as the funding shortage keeps getting worse. knows why..Pam and Russ Martens are pounding the table that Deutsche bank plus two other banks have a severe funding shortage. We know that Deutsche bank is massively short silver and that may be the reason for the continual repo money thrown at the bank.
Second Term Repo Oversubscribed As Funding Shortage Keeps Getting Worse And Nobody Knows Why
Overnight, we cited two icons in rates/repo business, both of whom confirmed that contrary to what so-called self-professed twitter “experts” claimed, what is going on in the repo market is bad and getting worse, and more problematic is that nobody knows what is causing it.
The first one was BMO’s rates guru, Ian Lyngen who had this to say:
As we approach quarter-end, it’s intuitive that funding markets are attracting heightened attention after last week’s repo fiasco. One thing has become clear, however, and that is that the Fed is willing to provide significant amounts of liquidity to primary dealers to alleviate as much stress as possible. By upsizing injections to $250 bn or more (assuming overnight remains at $100 bn through October 1 and the terms are $30 bn/$60 bn/$60 bn, respectively) the fact that we’re discussing a quarter trillion dollars is telling as to the depth of the constraint in repo.
The second one was from Curvature securities repo wizard, Scott Skyrm, who was even more laconic:
It’s great that the Fed is pumping liquidity into the system, however, why were the existing operations insufficient?
As of today, the Fed had injected $105 billion in liquidity into the Repo market, but rates were still stubbornly high. Whatever changed last week to cause the funding spikes is clearly still an problem.
Which in turn brought us to this morning’s commentary from ICAP’s Lou Crandall.As a reminder, ICAP is the world’s biggest interdealer broker, and as such the plumbing in the bond market is its bread and butter. This is what Crandall had to say ahead of the conclusion of today’s second, expanded (from $30BN to $60BN term repo), quoted by Bloomberg:
Increases in the Fed’s overnight and term-repo operations Thursday may be “sufficient to ensure that the remainder of the Fed’s operations through quarter-end are undersubscribed.”
As a result, Wrightson ICAP’s “tentative guess” is that dealers take $50b of the term operation and $60b of the overnight action,though risks are on the high side of the term estimate and on the low side for the overnight. However, as Crandall added, “risk remains that dealers might take the full $60 billion of term operations.”
And… Bingo, because moments ago, the NY Fed confirmed that one day after the most oversubscribed overnight repo operation yet, which saw $92BN in securities tendered for the latest overnight repo op before it was expanded from $75BN to $100BN…
… moments ago the Fed announced results from the second Term Repo meant to address the quarter-end liquidity shortfall is what ICAP would have dubbed the worst case scenario: not only was it oversubscribed, but it was so by a whopping $13BN, as some $72.5BN in securities ($43BN in TSYs, $29.25BN in MBS, $0.5BN in Agencies), were submitted for today’s $60BN repo.
In other words, not only is the liquidity shortage getting worse, but the more liquidity the Fed provides via repos, the more liquidity primary dealers indicate they need.
And with it now appearing guaranteed that the full allotment of $250BN across term and overnight repo will be used up, we look to today’s overnight repo result in a few minutes, where if the term repo is any indication, the full $100BN allotment will be blown through with ease as banks confirm that their dollar shortage is far, far worse than anyone expected… and certainly is not going away after last week’s “one-time” tax payment and bill settlements.
Yesterday after the close, the Fed doubles the allotment of Rep money. If fully subscribed it will pump in a huge 1/4 trillion dollars into the system. It sure looks like Deutsche bank is causing massive headaches for the global finances
Repo Market Guru: “Whatever Changed Last Week Is Clearly Still A Problem”
Last week around this time, most of the self-described repo experts on twitter and elsewhere were pounding the table, screaming to anyone who would listen that the unprecedented spike in overnight general collateral repo from 2.25% to 10% was a non-event, and reflects one-time items such as the mid-September tax remittance, the rapid build up of cash in the Treasury’s general account and a flurry of Treasury settlements.
Alas, as we warned, and as the NY Fed today confirmed, the sudden heart attack in the critical, overnight funding market has turned out to be anything but a one-time event. First, as we saw first thing this morning, the latest repo overnight repo operation was the most oversubscribed yet, with $91.95BN in securities tendered for $75BN in reserves, the most yet since the Fed resumed these “unclogging” operations after a decade plus hiatus.
However, the big surprise came later on Wednesday morning, when in an “unexpected” move, the Federal Reserve expanded the size of its two dollar funding operations, the overnight and term repo, from $75BN to $100Bn, and from $30Bn to $60BN heading into quarter-end, effectively injecting up to $250 billion in funding ($30BN in already concluded term repo as well as two $60BN term repos yet to come, together with the $100BN overnight repo, assuming full allottment on all operations, for a grand total of $250BN).
Commenting on this dramatic expansion in Fed liquidity injections, BMO’s rates expert ian Lyngen, had a simple, if very powerful observation: “the fact that we’re discussing a quarter trillion dollars is telling as to the depth of the constraint in repo.“ Indeed a far cry from the “all clear” the twitter repo “experts” were screaming from the top of their lungs last week.
As we approach quarter-end, it’s intuitive that funding markets are attracting heightened attention after last week’s repo fiasco. One thing has become clear, however, and that is that the Fed is willing to provide significant amounts of liquidity to primary dealers to alleviate as much stress as possible. By upsizing injections to $250 bn or more (assuming overnight remains at $100 bn through October 1 and the terms are $30 bn/$60 bn/$60 bn, respectively) the fact that we’re discussing a quarter trillion dollars is telling as to the depth of the constraint in repo as well as the New York Fed’s desire to make September 30 boring. At the end of the day, only primary dealers are counterparties of this facility. This presents a possibility of some upward pressure on rates were cash not to have permeated throughout the system by the reporting date.
Confirming Lyngen’s fears, and in a troubling indication that despite the Fed is now clearly throwing the kitchen sink at the repo problem and failing, was today’s increase in the overnight G/C repo rate which has once again started to rise ominously.
Unfortunately, in its attempt to window-dress the issue, and pretend there is no problem at all, the Fed continues to pretend as if the problem isn’t there, and following on this morning’s comments from Lael Brainard that the repocalpyse was the result of a “simple imbalance” of supply and demand – and not a sign of deeper distress in credit markets – Dallas Fed president Kaplan said late on Wednesday that whereas the repo strain is important, it does not signal broader stress, and merely shows that the system needs more liquidity.
To be sure, as we explained over the weekend, he is right about the latter, but wrong about the former, and to make it crystal clear to everyone that something is clearly broken with the systemic plumbing, here is repo market guru, Scott Skyrm, who works for Curvature Securities, and whose sole business is Repo financing in U.S. government securities, so yes, he knows better what he is talking about than any so-called fintwit expert.
Let’s just say that the Repo market is not so simple. Just a week ago I was singing praises to the Fed’s overnight and term RP operations. Then, when rates backed-up the past two days, I was worried there was not enough cash in the system and the existing operations had failed. Now, it looks like smooth funding again! The Fed announced they are doubling the term and overnight RP operations tomorrow to $60 billion and $100 billion, respectively. When in doubt, throw more money at the problem!
To be sure, if there is anything the Fed has demonstrated amply over the past decade, is that when in doubt, it will throw “enough money at the problem” that it will inflate the biggest asset bubble in history in the process.
But it was Skyrm’s punchline that was especially troubling as it confirms our worst fears:
Now, here’s the rub. It’s great that the Fed is pumping liquidity into the system, however, why were the existing operations insufficient?
As of today, the Fed had injected $105 billion in liquidity into the Repo market, but rates were still stubbornly high. Whatever changed last week to cause the funding spikes is clearly still an problem.
Indeed it is, and unfortunately neither the Fed nor apparently anyone else, still has a clue what is going on.
Which brings us to something else that Kaplan said late on Wednesday, namely that the Fed will now study what size the balance sheet should be in the future. Sound familiar? It should: that’s precisely the exercise we conducted over the weekend, when we analyzed how much bigger the Fed’s balance sheet will be in the coming year, and how the Fed will get there. For those who missed it: the Fed needs to boost its reserves by roughly $400 billion to get the total to $1.8 trillion.
The only question is what how it will do it. And here we get to the bottom line, because whereas the Fed and its sycophantic media enablers are desperate to avoid calling the upcoming bond purchases by their real name, instead settling for the far more technical POMO, or permanent open markets operations, which as Goldman estimates will have to by roughly $15BN per month for a total of about $150BN per year…
… it was Bank of America that let it slip, and in a chart from BofAs’ Michael Hartnett, the Chief Investment Strategist called what is coming by its real name: QE4.
The problem, as Hartnett also identified, is that this will take the central banks’ balance sheet to new all time highs, resulting in the biggest asset bubble in history getting even bigger… and setting up the world for an even greater crash when the fed’s pushing on a string fails. And while nobody knows when that will happen, the fact that the financial system nearly collapsed last week even with $1.4 trillion in “excess” liquidity for reasons still unknown, means that like a great white shark, the market now needs constant liquidity injections, or else it will collapse.
Finally, considering that it has now filtered down to even the average American that – courtesy of Bernie Sanders and Elizabeth Warren – that it is the Fed’s market distorting operations that have resulted in a record wealth and income gap, we wonder: is it Trump’s impeachment, or is it the Fed’s upcoming QE4, that sets the stage for the now upcoming US civil war?
The Fed Created The Everything Bubble And A Liquidity Crisis – What Happens Next?
It’s an interesting dynamic that the Federal Reserve has conjured in the decade after the 2008 credit crash. They spent several years using artificial stimulus measures to inflate perhaps the largest financial bubble in the history of the US, and then a couple years ago something changed. They addicted markets and investors to easy cash only to then cut off the flow of monetary heroin. The system was so dependent on the Fed’s “China White” that all it took to give everyone the shakes was interest rate hikes to the neutral rate of inflation and a moderate balance sheet selloff. Now, the system is dying from shock and it’s too late for intravenous stimulus to save it.
For many this might seem unprecedented, but it’s really rather common. The Fed has a long history of inflating bubbles using easy liquidity and then imploding those bubbles with the tightening of credit. It also has a long history of pretending like it is trying to save the economy from crisis when it is actually the source of the crisis. As Congressman Charles Lindbergh Sr. warned after the panic of 1920:
“Under the Federal Reserve Act, panics are scientifically created; the present panic is the first scientifically created one, worked out as we figure a mathematical problem…”
In the latest theatrics of the Fed, a new trend has emerged – The “disappointing Fed”. In order to understand this disappointment, we have to define exactly what markets want from the central bank. Obviously, they want QE4; a massive liquidity program. For the past year at least they have been clamoring for it, and they still have yet to get it. But what does QE4 entail? In order to institute a new QE marathon the Fed would have to:
1) Lower the Fed funds rate to zero.
2) Lower the overnight repo lending rate to zero.
3) Stop balance sheet cuts.
4) Launch permanent asset purchases, NOT just overnight lending backed by collateral.
If the Fed was planning to kick the can on the collapse of the Everything Bubble, they would have initiated all of these steps and they would have done it at least 6-8 months ago. So far, only one of these things has been done (the end of balance sheet cuts). Here we see why the mainstream economic world is continually on the verge of a conniption fit. The implosion of the financial bubble is becoming obvious, most major corporate institutions and banks are stretched thin by historic levels of debt and dollar liquidity has become so tight globally that interbank lending rates are skyrocketing well above the Fed’s set interest rates. Yet, after every Fed meeting, the central bank gives the investment world a bare bones response.
Here is the question people should be asking but almost no one is: Why? Why didn’t the Fed just open the floodgates on QE4 back in November/December when it was obvious that a liquidity crunch was forming? Why did the Fed hike interest rates and cut their balance sheet at all? The only thing it achieved was to spark crash conditions.
Ah, but there is the key to answering our conundrum…
Since around November of last year the Fed has entered into a rather consistent pattern in which it does the bare minimum to make it appear as though it plans to support markets and defuse any crisis event while actually not doing much of anything. There comes a point where “kicking the can” on economic collapse becomes impossible, and I believe we have now reached that point according to the evidence. As I’ve noted in past articles, the Fed would not loosen the noose on liquidity until the crash starts to hit the consciousness of the general public. In other words, the Fed will not unleash QE4 until we are on the verge of another “Lehman Moment”. That time has nearly come.
Today, almost half of all Americans are worried about a recession striking in the next year, and 38% of fund managers expect a recession in the next year. The public is growing increasingly aware of the threat, but many still believe the Fed and government will act to mitigate the damage.
The liquidity crisis forming in overnight loans and the accelerating “repo panic” is a sign that crash conditions are about to hit mainstreet. Repo lending is a Fed mechanism for increasing the flow of credit within the banking system (hypothetically). Repo interest rates are the interest rates banks and other institutions charge each other for borrowing cash. Usually, repo interest rates follow the overnight lending rates set by the Fed, as well as the Fed Funds rate. But, recently, interbank rates have spiked far beyond the level the Fed has set.
Why is this important? Because it means that there is a supply/demand shortfall. Multiple banks and corporations need to borrow money on a short term basis to keep their operations functioning. This makes sense; US companies are currently weighed down by more debt than they were before the crash of 2008. The problem is, no one wants to lend that cash to them right now. There is, essentially, a dollar and credit shortage, and the demand is causing rates to skyrocket. The higher the rates, the more expensive it is for EVERYONE to borrow, including small businesses.
Confusion has erupted as to why banks and companies with large cash reserves won’t lend that money out, even at the high interest rates of the panic spike. Warren Buffet’s company, Berkshire Hathaway, for example, is holding a record $122 billion in cash. What do Berkshire and other cash heavy companies know that we do not? Generally, companies hoard cash when they are expecting an economic crisis, and, in a way, this cash hoarding can actually contribute to an exponential credit collapse. This is what happens when the lifeblood of your economy is based on debt on-demand.
Without anyone willing to lend at current interbank rates, the lender of last resort is the Fed, but the Fed’s response has been decidedly underwhelming for most investors.
Some see the Fed purchases for repo overnight lending as a sign that the Fed will soon step in with QE. Some people even believe that the repo spending is QE. Unfortunately, as with much of what the Fed does, not everything is what it seems and the repo situation is complex enough that I don’t think many people understand it. As one of my readers recently asked:
“The New York Fed said on Friday it would continue to offer to add at least $75 billion daily to the financial system through Oct. 10, prolonging its efforts to relieve pressure in money markets….Counting from today that’s 20 X 75B = 1.5 Trillion. Is this a form of QE? And would it avert the impending crash…?”
This is a common misconception about Fed overnight loans and repos. To put it in the simplest terms I am able – Repos are not generally cumulative long term purchases like QE is. Repos are usually OVERNIGHT LOANS that institutions like banks borrow from the Fed while offering collateral in return (secure financial assets).
Repos create TEMPORARY reserve balances, which are paid back and erased. Meaning, the Fed may offer Repos until October 10th, but this will not add $1.5 trillion to the Fed’s balance sheet. On the contrary, the Fed’s balance sheet will move relatively little as the Fed sells back the collateral it purchased, often with a haircut attached that feeds extra capital into the central bank.
Answer: No, repos are not QE. QE is not temporary, nor is it based on collateral purchases that are sold back daily. Also, as almost every economist, even in the mainstream, has been pointing out, the Fed would have to institute REAL QE and FAR MORE liquidity to relieve tight financial conditions, yet, they are not doing this. They are calling the Fed repo action a “bandaid”, and I tend to agree. The Fed is keeping conditions tight for as long as possible. Again, what people need to start asking is “why”?
“What’s more, an IOER cut is simply a temporary bandaid for the solution and the Fed will need to come up with a more permanent solution going forward. Expanding the Fed balance sheet features in the menu of possible solutions, and Powell made a strong effort to communicate clearly that it should not be interpreted as quantitative easing, aka policy stimulus, rather than a technical tool to increase currency in circulation.”
As another of my readers argued this week:
“I’m so tired of seeing people in the alt-media community call the repo lending “QE” when it absolutely is not QE. All they have to do is a little research to understand that the fed has been dodging QE and they’ve been keeping conditions tight. Like you’ve been saying for a while now, the bankers created the bubble, now they’re bursting the bubble by restricting liquidity. Maybe they’ll have QE4 in the future, but only when it’s too late to do anything about the liquidity crisis…”
That just about sums up the problem and the misconceptions bouncing around lately. The Fed has been well aware of the brewing liquidity crisis for quite some time. The US dollar LIBOR rate witnessed the biggest jump in a decade in early 2018, and the global dollar shortage has been consistent since then. With a dollar shortage comes greater demand by banks around the world for high cost short term debt – hence, repo rates skyrocket.
For several years the Fed was not shy at all about pumping vast amounts of fiat into the banking system; why are they shy about it now? And why aren’t we in the middle of QE4 yet?
A startling factor in short term interbank lending is that as repo rates inflate they can actually cancel out the effects of Fed stimulus measures. The Fed would have to dramatically increase its level of purchases to outpace the explosion in rates. They have not done this, and this is why their repo response has done little to stop interbank lending volatility.
To put the Fed repo response in perspective for those that want to treat overnight loans as cumulative, the audit of the TARP program alone shows the Fed injected around $16 trillion into the global economy, and much of that was in overnight loans. This is not even counting Fed QE programs post-TARP. The current Fed repo activity is a drop in the ocean by comparison.
I assert that the Fed is deliberately maintaining the liquidity crisis while trying to make it look like they are “taking action”. The Fed creates bubbles and then pops those bubbles by tightening liquidity into economic weakness. When they do ease credit conditions, it is almost always well after the avalanche has already started.
They did the same thing at the onset of the Great Depression, causing the crash to expand rather than retreat, as Ben Bernanke publicly admitted in 2002. They also kept crash conditions in credit markets hidden when Alan Greenspan shut down all conversation with the public on the housing bubble. And, today the Fed continues to fraudulently claim the US economy is strong and in recovery, and has even fired Simon Potter, the official most equipped to handle a repo lending crisis – the same official that warned the Fed response is basically too little too late.
The Fed can’t even claim that it “had no idea” what was about to happen. Jerome Powell, now Fed chairman, warned of these EXACT consequences if the Fed tightened liquidity back in 2012. But, of course, very few people in the public are aware of this, and whoever the Fed and the media blame for the crash will be who the majority of the public blames for the crash.
I don’t think it’s a coincidence that the crash of the Everything Bubble is accelerating around the same time that geopolitical chaos is erupting.
We have a trade war that is unlikely to end, with a US/China meeting in October that will probably produce little to no results.
We have a Brexit circus which is supposed to play out in October.
We have a crisis with Iran as the US is set to move troops into Saudi Arabia and the UAE in the next month.
And now we have an “impeachment inquiry” circus erupting over Trump, Biden and the Ukraine.
That sure is a lot of distractions for the general public as their economy crumbles around them…
To understand why the Fed would deliberately engineer an economic crisis, I suggest reading my article on the economic end game HERE. It is important to realize that the Fed has not “lost control” of the situation, nor is the Fed the bumbling and witless institution some alternative analysts make it out to be. Rather, the Fed is perfectly aware of the damage it is causing, and it is perfectly aware of how much this chaos will benefit certain globalist organizations.
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“This Is A Disaster!” Peter Schiff Blasts Government Interference In Student Debt Market
During a recent podcast, Peter Schiff talked about the student loan debacle.
In a nutshell, it’s the government’s fault.
Democratic presidential candidates have been talking about the student loan crisis. And it is indeed a crisis. The total of the outstanding student loans in the US has more than doubled since 2009 when it was $675 million. The rate of delinquency on student loan debt pushed up to 9.5% in the first quarter of 2019, even as total student loan debt climbed to $1.49 trillion. Currently Americans owe more than $1.5 trillion in student loan debt. That’s more than their outstanding credit card balances.
Democrats running for president have proposed government solutions, most involving forgiveness of most or all outstanding debt and making college “free.”
The problem with this solution is it will actually make the problem they want to solve worse. Or actually, it will create a bigger problem than the problem that they’re trying to solve. But the most ironic aspect of the whole thing is that the problem was created by government.”
Before the government got involved, college wasn’t all that expensive. It was government policy that made it unaffordable. And not only did it manage to dramatically drive up the cost of a college education, but it also succeeded in destroying the value of that degree.
Before the government tried to solve this ‘problem,’ it really didn’t exist.”
Peter isn’t just spouting rhetoric. Actual studies have shown the influx of government-backed student loan money into the university system is directly linked to the surging cost of a college education.
Peter traces the federal government getting involved in education back to the GI Bill passed in 1944. In the 1960s, the federal government began guaranteeing student loans. Before that, there wasn’t a big market for them.
The only reason that student loans exist is because of the government. Without the government, there were no student loans. I mean, who would loan money to a student? … They have no money; they have no collateral; they have no job. They’re a lousy credit risk. The free market is not going to loan money to students.”
But when the government effectively cosigned student loans, they became one of the least risky loans to make. It’s like loaning money to the federal government.
Obviously, all the banks wanted to make student loans because you couldn’t lose. All you could do was make money because there was an interest rate attached to the student loan. So, the government made a thriving industry of student loans. Without the government, it wouldn’t exist.”
Once colleges realized all of this money was coming their way, they recognized it was a money machine and they started raising tuition.
Because there was now no longer any kind of objection in the market because whatever the price was, the students just borrowed the money because the government was making all the loans available.”
Universities became bloated. They built new facilities. They began competing for students and their student loan money. Today we have dorms with granite countertops and Tempurpedic mattresses.
Meanwhile, well-meaning officials pushed the narrative that everybody needs to go to college. This increased the demand for a degree higher. And as economics 101 would predict, the cost continued to skyrocket.
The only thing we succeeded in doing by keeping kids in school to get a college degree is we simply delayed by maybe four, five, or six years, when they enter the workforce. So, those five or six years when they could have been earning money and developing skills on the job, instead they’re developing no skills and they’re racking up a huge debt.”
Peter cites a string of fascinating statistics to drive home his point.
This is a disaster. This entire problem never would have existed. Students wouldn’t have all this debt. College wouldn’t be so expensive but for government interference in the market.”
And now you have the very same people who caused the problem clamoring to solve it. That should go well…
There’s No End In Sight For The “Retail Apocalypse”
The massive wave of store closures and layoffs in the retail sector has gotten so bad this year, it’s been dubbed the “retail apocalypse.”
But not only is it causing problems in the economy, Goldman Sachs thinks it is still likely to get much worse.
“Our REITs team does not expect a near-term reversal of store closures from retail tenants, which should continue to result in eCommerce share gains, in our view,” says Goldman Sachs analyst Heath Terry in a new research note to clients on Tuesday, according to a report by Yahoo Finance.
This information for investors was buried on page 10 of Terry’s report, however, several analysts feel that it should be a top concern because store closures are no longer doing the trick to shore up the retail space’s profitability as in years’ past. Instead, the argument could be made store closures are only pushing more people to shopping on desktop computers, tablets and mobile phones —which is usually a less profitable transaction for retailers due to free shipping costs and investments in building out digital capabilities.
But the retail apocalypse cannot be blamed solely on the rise of digital shopping. Companies are going bankrupt at breakneck speeds because they are unable to pay back the massive amount of debt they’ve taken on.
There are already 11,000 store closures this year, exceeding the annual number of the past several years, according to Terry. CoreSight Research, which is cited by Terry, projects the retail store closure number to reach 12,000 by year-end.
“We believe eCommerce growth will likely accelerate over the course of the second half as a record number of retail store closures, initiatives around fulfillment such as Amazon’s $800 million investment in same-day delivery and Etsy’s move to free shipping, and easing comps, drive more consumers to shift purchases online,” Terry writes.
The other problem retail is facing is the lack of disposable income in most households in the United States. With 25% of Americans putting necessities, such as food, on credit cards, there’s little left over for the luxury of “retail therapy.” Another glaring statistic is that 78% of Americans are living paycheck to paycheck as well and as the costs of goods and services continue to rise, the incomes of most households do not.
get use to a new term coined by the Clowns at the Fed: “Effective” Lower Bound instead of zero bound. Mish and I are in full agreement that we can never get to zero interest rate in the USA as that would put gold and silver and all commodities in backwardation and that would sent the entire financial scene on end. That is why it will be slightly above zero or that “effective” lower bound
Got Gold? In Search Of The ‘Effective’ Lower Bound
The Fed is no longer talking about zero-bound but effective lower bound. What’s the difference? Where is it?
The self-described “BondFreak” noticed a shift in Fed vocabulary from “zero bound” to “effective lower bound”.
Powell Ready to Cut Rates to “Effective Lower Bound” via “Conventional” Policy
A Google search for “effective lower bound” just happened to turn up my own post Powell Ready to Cut Rates to “Effective Lower Bound” via “Conventional” Policy.
Here are the pertinent statements from a speech Powell made on June 4 at a “Conference on Monetary Policy Strategy, Tools, and Communications Practices”.
Emphasis is mine.
While central banks face a challenging environment today, those challenges are not entirely new. In fact, in 1999 the Federal Reserve System hosted a conference titled “Monetary Policy in a Low Inflation Environment.” Conference participants discussed new challenges that were emerging after the then-recent victory over the Great Inflation. They focused on many questions posed by low inflation and, in particular, on what unconventional tools a central bank might use to support the economy if interest rates fell to what we now call the effective lower bound (ELB). Even though the Bank of Japan was grappling with the ELB as the conference met, the issue seemed remote for the United States.
The next time policy rates hit the ELB—and there will be a next time—it will not be a surprise. We are now well aware of the challenges the ELB presents, and we have the painful experience of the Global Financial Crisis and its aftermath to guide us. Our obligation to the public we serve is to take those measures now that will put us in the best position deal with our next encounter with the ELB.
The big difference between then and now is that the federal funds rate was 5.2 percent—which, to underscore the point, put the rate 20 quarter-point rate cuts away from the ELB. Since then, standard estimates of the longer-run normal or neutral rate of interest have declined between 2 and 3 percentage points, and some argue that the effective decline is even larger. The combination of lower real interest rates and low inflation translates into lower nominal rates and a much higher likelihood that rates will fall to the ELB in a downturn.
Why the shift?
I believe the answer is the Fed no longer believes zero is the ELB. So this leads to a different question.
Where the Heck is the ELB?
First, we need a definition.
What’s the Definition of ELB?
Effective Lower Bound is the point beyond which further monetary policy in the same direction is counterproductive.
I propose the Bank of Japan and the ECB are already below ELB. I further propose the ELB can never be negative but it can be well above zero.
Reversal Interest Rate
I happened across an article just the other day on the ELB moving target.
Please consider The Reversal Interest Rate
The “reversal interest rate” is the rate at which accommodative monetary policy “reverses” its intended effect and becomes contractionary for the economy. It occurs when recapitalization gains from duration mismatch are more than offset by decreases in net interest margins, lowering banks’ net worth and tightening its capital constraint. The determinants of the reversal interest rates are (i) banks asset holdings with fixed (non-floating) interest payments, (ii) the strength of the constraints that they face, (iii) the degree of interest rate pass-through to deposit rates, and (iv) the initial capitalization of banks. Furthermore, quantitative easing increases the reversal interest rate and hence should only be employed after interest rate cut is exhausted. Over time the reversal interest rate creeps up, since the capital gains effect fades out as longterm bonds holdings mature while the net interest margin effect does not.
The authors propose the rate can be above or below zero but it gets higher over time especially if QE is involved.
Bank Lending Constraints
In our model, as in reality, the risk-taking ability of the banking sector is constrained by its net worth. If the latter is high enough so that the constraint does not bind, or if capital gains are strong enough to actually increase net worth, then an interest cut generates the boom in lending that the central bank seeks to induce. However, if capital gains are too low to compensate the loss in net interest income, net worth decreases to the point where the constraint binds, limiting banks’ ability to take on risk. At that point, i.e. at the reversal interest rate, any further interest cuts generate a decline in lending though the net-worth feedback. Moreover, an interesting amplification mechanism emerges. As the negative wealth effect further tightens banks’ equity constraint, banks cut back on their credit extension and are forced to increase their safe asset holdings. As safe assets yield lower returns, banks’ profits decline even more, forcing banks to substitute out of risky loans into safe assets, which in turn lowers their profit, and so on.
Huge Failure Already
I discussed lending constraints the other day (and many time priors) in ECB’s New Interest Rate Policy “As Long As It Takes” Huge Failure Already
Banks Lend Under Two Conditions
- They are not capital impaired
- They believe they have good credit risks
If either condition is false, then banks don’t lend.
Negative interest rates did not induce either Japanese or European banks to lend.
What’s Going On?
Either European banks are more capital impaired than the ECB wants everyone to believe, or banks believe there are few good credit risks worth taking.
Take your pick. I expect both are true.
We then uncover the determinants of the reversal interest rate in our baseline model. The reversal interest rate depends on bank assets interest rate exposure, the tightness of financial regulation, as well as the market structure of the banking sector. If banks hold more longterm bonds and mortgages with fixed interest, the “stealth recapitalization” effect due to an interest rate cut is more pronounced, and the reversal interest rate is lower. Stricter capital requirements rise the reversal interest rate. Lower market power, which decreases profits, also generates a higher reversal interest rate. For example, in a negative interest rate environment, innovations that allow depositors to substitute bank accounts for cash more easily hurt the banks’ margins and raise the reversal interest rate; if such innovation occurs below the reversal interest rate, it directly feeds back into lower lending.
The article mentions “stealth recapitalization” of banks. I have discussed that many times recently but in a different context.
The Fed pays interest on excess reserves but the ECB charges them. Whereas the Fed gave free money to banks, the ECB charged the banks for excess reserves it forced into the system.
Negative Interest Rates Are Social Political Poison
In contrast to the authors, I do not believe negative interest rate policy can ever work as it violates basis economic principles on time preference and the time value of money.
Moreover, a dive below the ELB supports the position I presented on September 23: Negative Interest Rates Are Social Political Poison
- I like the notion of ELB, or Reversal rate if you prefer.
- I do not believe it can ever be below zero but accept the notion it can be higher.
- It is not fixed
- It varies bank-by-bank and changes over time
Chasing Tail Madness
Searching for the ELB is like chasing tails.
It’s only by accident can a central bank catch the tail. But even if it does catch the tail, the tail can still move. Further efforts to re-catch the tail are as likely as not to be in the wrong direction.
With that, let’s return to the BondFreak’s question. Why the word change?
Perhaps the Fed is aware the ECB is on the wrong course, negative rates are counterproductive, or the ELB just might be above zero.
Perhaps it’s meaningless happenstance.
Deeper Down the Rabbit Hold
Yesterday, I noted Draghi Open to MMT and a People’s QE
Every attempt to fix the perceived problem of “too low inflation” goes deeper and deeper down the rabbit hole.
It’s economic madness, yet, here we are.
The solution is to let the free market set interest rates rather than a tail-chasing consortium of economic wizards who have never spotted a bubble or a recession in real time.
Of, course, we also need to get rid of central banks and fractional reserve lending.
Unfortunately, central banks will not vote to abolish themselves. It’s also certain that government efforts to take direct control of money will be even worse than the actions of central banks.
A position is gold is the best counter to monetary policy madness.
S&P Downgrades WeWork To ‘B-‘ Due To “Liquidity Strains”
WeWork bonds were already plunging, due to the massive cash burn and dwindling cash pile, and tonight S&P downgraded the company’s issuer credit rating to ‘B-‘.
WeWork has raised more than $12 billion to rent office space that it renovates and then leases to companies. But that strategy has left it in a precarious position. It has some $47 billion of future rent payments due. On average it leases its buildings for 15 years. Yet its tenants are committed to paying only $4 billion, and on average have leases for 15 months.
Those long-term leases “may become an albatross in an economic downturn,” Bloomberg Intelligence analyst Jeffrey Langbaum wrote in a report Wednesday, adding that WeWork needs to find a “clear path to profitability.”
And, as a reminder, for every dollar WeWork earned in revenue last year, it lost roughly two.
As S&P details:
The downgrade reflects heightened uncertainty around The We Company’s ability to raise capital to support aggressive growth and the pressure this places on liquidity.
These uncertainties stem from the weak reception of The We Company’s IPO, partly related to what we view as subpar governance practices. Governance-linked questions and a series of changes in the week following the S-1 filing have weakened the prospects for a successful IPO by year-end, creating uncertainty about access to alternative capital resources.
Despite some improvements in governance practices subsequent to the initial filing, it is unclear whether the changes will lift investor sentiment. We also believe the company may struggle to meet its capital investment funding needs and liquidity covenant over the next 12 months.
At this point, we have not factored in any potential additional capital inflows from SoftBank other than the $1.7 billion due in 2020 ($1.5 billion due in April and $200 million due in the second half of 2020). Underpinning these uncertainties are challenging market conditions including a heightened risk of recession in the U.S., Brexit worries, and a slowdown of the Chinese economy (both London and China are major markets for The We Company).
The negative outlook is indicative of the uncertainty tied to The We Company’s weakening liquidity position and access to capital, following poor reception to its IPO related to scrutiny of corporate leadership and governance practices. It also reflects the risk the company will struggle to fund its capital spending needs absent additional financing, the pivot in corporate leadership, and increased uncertainty about its future direction.
And the bonds are signaling trouble ahead…
iv) Swamp commentaries)
Acting DNI denies that he stated he would resign over the Trump phone call
Acting DNI Denies WaPo’s Fake News About Resigning Over Trump Testimony
Breaking Wednesday afternoon via The Washington Post (WaPo), the acting Director of National Intelligence (DNI) threatened to resign if President Trump blocked his testimony before Congress Thursday regarding the Ukraine scandal that has led to a formal impeachment inquiry in the House.
“The acting Director of National Intelligence threatened to resign over concerns that the White House might attempt to force him to stonewall Congress when he testifies Thursday about an explosive whistleblower complaint about the president, according to current and former U.S. officials familiar with the matter,” WaPo wrote.
Sources told WaPo that Joseph Maguire, who is the nation’s highest-ranking intelligence official, was unwilling to withhold information from Congress, where he is expected to testify in open and closed hearings on Thursday. This is forcing the Trump administration to make an important decision on whether or not it would exercise executive privilege over the whistleblower complaint.
Congress has not examined the whistleblower complaint, and there are no indications on what it might say about a call between President Trump and Ukranian President Volodymyr Zelensky. It’s alleged that President Trump urged Ukrainian officials to investigate Joe Biden, who is running for president in 2020.
Maguire was given the whistleblower complaint last month, which has catapulted him to center stage, stuck in the middle of a fierce battle between Democrats and the Trump administration. Democrats want the whistleblower complaint released while the Trump administration doesn’t.
In a public statement, Maguire said on Tuesday that, “In light of recent reporting on the whistleblower complaint, I want to make clear that I have upheld my responsibility to follow the law every step of the way.”
“I am committed to protecting whistleblowers and ensuring every complaint is handled appropriately,” Maguire added. “I look forward to continuing to work with the Administration and Congress to find a resolution regarding this important matter.”
About 35 minutes ago, White House press secretary Stephanie Grisham dismissed WaPo’s reporting via Twitter:
— Stephanie Grisham (@PressSec) September 25, 2019
And moments ago, the White House tweeted, “.@WashingtonPost got it wrong again. From the statement by Acting DNI Joseph Maguire: “At no time have I considered resigning my position since assuming this role on Aug. 16, 2019. I have never quit anything in my life, and I am not going to start now.”
.@WashingtonPost got it wrong again.
From the statement by Acting DNI Joseph Maguire:
“At no time have I considered resigning my position since assuming this role on Aug. 16, 2019. I have never quit anything in my life, and I am not going to start now.” https://t.co/hq8Irsv1Dr
— The White House (@WhiteHouse) September 25, 2019
And breaking in the last minutes of the US cash session, a statement from Maguire in response to the WaPo report said:
“At no time have I considered resigning my position since assuming this role on Aug. 16, 2019. I have never quit anything in my life, and I am not going to start now.”
We can’t wait for the correction…
This morning: an absolute joke… the whistleblower complainant only heard about the stuff through others
“I Was Not A Witness To Any Of It” – ‘Whistleblower’ Complaint Released To Public
Update (0910ET): President Trump has quickly responded:
* * *
The House Intel Committee has released the full (modestly redacted) complaint letter from the so-called ‘Whistleblower’ regarding Trump’s “urgently concerning” conversations with Ukraine.
“In the course of my official duties, I have received information from multiple U.S.
Government officials that the President of the United States is using the power of his office to
solicit interference from a foreign country in the 2020 U.S. election.”
“Over the past four months, more than half a dozen U.S. officials have informed me of various facts related to this effort.”
“I am deeply concerned that the actions described below constitute “a serious or flagrant
problem, abuse, or violation of law or Executive Order” that “does not include differences of
opinions concerning public policy matters,”
So to the crimes and misdemeanours…
The Ukrainian side was the first to publicly acknowledge the phone call. On the evening of 25 July, a readout was posted on the website of the Ukrainian President that contained the following line (translation from original Russian-language readout):
“Donald Trump expressed his conviction that the new Ukrainian government will be able to quickly improve Ukraine’s image and complete the investigation of corruption cases that have held back cooperation between Ukraine and the United States.”
Well that doesn’t exactly sound “deeply concerning”? But there’s more…
“Aside from the above-mentioned “cases” purportedly dealing with the Biden family and the 2016 U.S. election, I was told by White House officials that no other “cases” were discussed.”
Oh so other people confirmed that Trump did not seek more, but the ‘whistleblower’ claims calls and documents were “locked down” – in some nefarious manner?
“In the days following the phone call, I learned from multiple U.S. officials that senior WhiteHouse officials had intervened to “lock down” all records of the phone call, especially the House officials had intervened to “lock down” all records of the phone call, especially the official word-for-word transcript of the call that was produced—as is customary—by the White House Situation Room. This set of actions underscored to me that White House officials understood the gravity of what had transpired in the call.”
“White House officials told me that they were ’directed’ by White House lawyers to remove the electronic transcript from the computer system in which the transcripts are typically stored”
And here’s the “smoking gun”…
“During this same timeframe, multiple U.S. officials told me that the Ukrainian leadership was led to believe that a meeting or phone call between the President and President Zelenskyy would depend on whether Zelenskyy showed willingness to “play ball” on the issues that had been publicly aired by Mr. Lutsenko and Mr. Giuliani. (Note: This was the general understanding of the state of affairs as conveyed to me by U.S. officials from late May into early July. I do not know who delivered this message to the Ukrainian leadership, or when.)
Shortly after President Zelenskyy’s inauguration, it was publicly reported that Mr. Giuliani met with two other Ukrainian officials: Ukraine’s Special Anticorruption Prosecutor, Mr. Nazar Kholodnytskyy, and a former Ukrainian diplomat named Andriy Telizhenko. Both Mr. Kholodnytskyy and Mr. Telizhenko are allies of Mr. Lutsenko and made similar allegations in the above-mentioned series of articles in The Hill.”
The entire note reads like a journalist or lawyer wrote it, and citing NYTimes numerous times lends it even less credibility.
Simply put, some folks told some other folks about administration folks that might be talking to some Ukrainian folks?
Perhaps the most interesting part is the following…
“I was not a witness to most of the events described... However, I found my
colleagues’ accounts of these events to be credible…“
Perhaps he would better named a “gossip-blower”
v) King report/Courtesy of Chris Powell of GATA which includes the major swamp stories.
The King Report September 26, 2019 Issue 6100 Independent View of the News
ESZs rallied during Asian trading on Wednesday due to the following three reports:
Fox’s @SeanLangille: Senior admin official tells @edhenry that tomorrow in addition to the transcript of call, the admin will release a document showing the Inspector General of the Intel community found the whistleblower involved had “political bias” in favor of “a rival candidate” of Trump… As for the phone transcript, this official says there are a “few words” in transcript that will raise eyebrows but it is nowhere near as inflammatory as Democrats have suggested
Democrats’ double standard on Ukraine
It got almost no attention, but in May, CNN reported that Sens. Robert Menendez (D-N.J.), Richard J. Durbin (D-Ill.) and Patrick J. Leahy (D-Vt.) wrote a letter to Ukraine’s prosecutor general, Yuriy Lutsenko, expressing concern at the closing of four investigations they said were critical to the Mueller probe. In the letter, they implied that their support for U.S. assistance to Ukraine was at stake. Describing themselves as “strong advocates for a robust and close relationship with Ukraine,” the Democratic senators declared, “We have supported [the] capacity-building process and are disappointed that some in Kyiv appear to have cast aside these [democratic] principles to avoid the ire of President Trump,” before demanding Lutsenko “reverse course and halt any efforts to impede cooperation with this important investigation.”
So, it’s okay for Democratic senators to encourage Ukraine to investigate Trump, but it’s not okay for the president to allegedly encourage Ukraine to investigate Hunter Biden?… The irony is the Democrats’ investigation might do more to deny Biden the presidency than Trump… https://www.washingtonpost.com/opinions/2019/09/24/democrats-investigation-might-do-more-hurt-biden-than-trump/
China Preparing to Buy More U.S. Pork as Trade Talks Revive
Futures on the S&P 500 immediately advanced following the news before trading little changed at 2:55 p.m. Beijing time… The imports may be part of China’s efforts to ease tensions with the U.S. as they strive to reach a trade deal. They also come at a time when the Asian nation, the world’s biggest pork consumer, desperately needs more of the meat… Prices of pork have surged more than 70% this year in China due to the spread of a deadly pig disease… [China cannot afford to play politics with food!]
China’s Economy Struggling across All Sectors, Beige Book Say – The current weakness in the economy is primarily due to manufacturing…The services sector continued to underperform, with both revenue and profits dropping from the same period last year. Hiring also slowed…
ESZs declined during the final hour of Chinese trading. The ESZ decline accelerated when Europe opened. At 5:22, ESZs bottomed at 2956.50. The rally to game the NYSE open then commenced and continued until 9:00 ET. The ESZ rollover, 30 minutes before the NYSE open, might have been due to continued funding pressure in the repo market. The decline accelerated after the Fed’s repo operation.
The Fed doubled the size of its 14-day term repo to $60B and its daily repo scheme was oversubscribed for the 2nd consecutive session. $91.950B of securities was submitted for the $75B daily repo. The NY Fed said it would increase its daily repo scheme to $100B.
@Convert bond: NY Fed, now in the biz of funding hedge fund carry trades 😉
Ex-Minnie Fed President Kocherlakota: Why I’m Worried about the Repo Market
It does signal that something’s very wrong with the financial system…
There are two groups of banks, “tight” ones that hold few excess reserves, and “flush” ones that hold a lot… The deeper issue is that, since the 2008 crisis, regulatory reforms — such as requirements that banks hold a certain amount of liquid assets, and maintain a minimum leverage ratio (equity capital as a percent of total assets) have constrained the ability of flush banks to lend, and of tight banks to borrow…
What’s harder to understand is how money markets will respond to future shocks. As the experience of the past couple weeks has shown, the simple single-bank model no longer works. Reserves are soloed in the flush banks, so the financial system is acting more like it has $1.3 billion in excess reserves than the actual $1.3 trillion. The design of regulation has disrupted some of the system’s most basic functions…
Kocherlakota’ s argument falls apart when you consider that the funding problem has not occurred for years. If the funding market is busted due to regulations, why has it been operating well until now?
ESZs and stocks tumbled on this:
WaPo: Transcript of Trump’s call with Ukrainian president shows him offering U.S. assistance for Biden investigation – In his July 25 phone call with Volodymyr Zelensky, President Trump told his Ukrainian counterpart to work with the U.S. attorney general to investigate the conduct of former vice president Joe Biden, a political rival, and offered to meet with Zelensky at the White House after he promised to conduct such an inquiry.The intelligence community inspector general found the call to be a possible campaign finance violation, and he and the director of national intelligence referred it to the Justice Department for a possible investigation. Officials, though, closed the matter after a limited inquiry…https://www.washingtonpost.com/national-security/transcript-of-trumps-call-with-ukrainian-president-shows-him-offering-us-assistance-for-biden-investigation/2019/09/25/16aa36ca-df0f-11e9-8dc8-498eabc129a0_story.html
The reason for the initial tumble was the transcript was far different than what several headlines inferred.
Ukraine president Zelensky asked Trump to dispatch Rudy Giuliani to Ukraine to help ‘drain the swamp’ and get to the bottom of Ukraine corruption. “We are hoping very much that Mr. Giuliani will be able to travel to Ukraine and we will meet once he comes to Ukraine…”
Trump asked Zelensky about Ukraine interference in the 2016 election and the Russian collusion hoax, saying rumor has it that Ukraine has ‘the server’ and mentions ‘Crowdstrike’ – the firm that ‘managed’ Hillary private server and has ties to Ukraine and Robert Mueller.
@MZHemingway: The actual investigation the media and other Democrats are trying to thwart:
Trump Asked Ukraine President to Help With DOJ Probe of 2016 Election Interference
Trump: “The other thing, there’s a lot of talk about Biden’s son, that Biden stopped the prosecution and a lot of people want to find out about that. So, whatever you can do with the Attorney General would be great. Biden went around bragging that he stopped the prosecution so if you can look into it.”
Transcript of Trump’s July 25 phone call with Ukraine’s Volodymyr Zelensky
DOJ Spokesperson Kerri Kupec: “The Attorney General has not communicated with Ukraine – on this or any other subject. Nor has the Attorney General discussed this matter, or anything related to Ukraine, with Rudy Giuliani.”
@RepMarkMeadows: Seeing some political conflation about two sections of the report: The “favor” section of the call is referencing “crowdstrike,” or an investigation into election interference. This is NOT the same thing as the Biden section. Conflating the two is misleading and irresponsible
@realDonaldTrump 10:58 ET: “Democrats wrote to the Ukrainian government in May 2018 urging it to continue investigations into President Donald Trump’s alleged collusion with Russia in the 2016 presidential campaign — collusion later found NOT TO EXIST.” [Above article that we cited]
@realDonaldTrump: I have informed @GOPLeader Kevin McCarthy and all Republicans in the House that I fully support transparency on so-called whistleblower information but also insist on transparency from Joe Biden and his son Hunter, on the millions of dollars that have been quickly and easily taken out of Ukraine and China. Additionally, I demand transparency from Democrats that went to Ukraine and attempted to force the new President to do things that they wanted under the form of political threat. Wow! “Ukraine Whistleblower’s lead attorney donated to Biden.”
Fox’s @kevincorke: A source familiar with the #WhiteHouse Situation Room staff confirms that the two Situation Room transcribers who listened in on President Trump’s call with Zelensky are #CIA employees. They are/were detailed to the WH from the CIA
Fox’s Catherine Herridge: “It was White House officials who told the whistleblower about this phone call…The whistleblower had no first-hand knowledge… the whistleblower had political bias…” https://twitter.com/RoscoeBDavis1/status/1176913184801865728
Why would White House officials tell someone with political bias about the phone call? Was it a trap?
Dems and the MSM reported that Trump threatened to withhold military aid. Didn’t the WSJ report that Trump mentioned Biden 8 times in the phone call? Trump mentioned Joe Biden twice. Other reports said Trump pressured Zelensky 8 times. What’s the deal with the ‘8 times’ fake news?
DoJ’s Kerri Kupec: “A Department of Justice team led by US Attorney John Durham is separately exploring the extent to which a number of countries–including Ukraine–played a role in the counterintelligence investigation directed at the Trump campaign during the 2016 election.”
Apparently, the Deep State, MSM and Dems profoundly fear the investigation into the 2016 campaign. Biden is a strawman.
ESZs quickly rallied from their 2953.75 low to a NYSE high because a majority of traders realized that the Dems and MSM pantsed themselves.
Schumer said the impeachment inquiry is not partisan undertaking.
Nadler called for Barr to recuse himself from Ukraine investigation. Naddie, Barr isn’t a Jeff Sessions!
Schiff on transcript of Ukraine phone call: “The notes of the call reflect a conversation far more damning than I or many others had imagined… What those notes reflect is a classic mafia-like shakedown of a foreign leader.” https://twitter.com/ChloeSalsameda/status/1176899466638446592
Adam Schiff: “There is no quid quo pro necessary to betray your country or your oath of office.” “I’m not concerned whether it is quid quo pro or not. Ukraine understood what this president wanted.” http://abcn.ws/2mBFRp8
Bloomberg TicToc: House Speaker Nancy Pelosi said Trump, in asking Ukraine’s president to look into Biden, “is in breach of his constitutional responsibilities”
The Republican leadership excoriated Pelosi for launching an impeachment inquiry without facts and evidence – and doing it solely to harm Trump, without regard to the consequences for the country. They also hammered Dem leadership for the same offenses and called for Pelosi to resign.
House GOP leader says Pelosi should step down as Speaker http://hill.cm/6oWehFg
Though Dem leadership quadruped down on their impeach fantasies, rank and file Dems were upset at what leadership did to them.
@paulsperry_: The Hill: Dems now expressing regrets, grousing that Speaker Pelosi got w-a-a-a-a-y out over her skis
Stocks hit session highs after Trump says China deal could happen sooner than some think https://cnb.cx/2mBDYc3
Stocks were at session highs BEFORE Trump made the China deal comment. ESZs and stocks increase modestly to new highs AFTER the comment.
At midday: Trump says US and Japan have reached an initial trade agreement
After and early afternoon pause, ESZs and stocks marched higher into the close. Wednesday was a reversal of Tuesday’s impeachment scare.
@WalterDeemer: Elizabeth Warren on #PredictIt. Now trading at 53, +8 from yesterday… Biden, on the other hand, is down 5 to 20 this morning
Trump, who had been trailing Biden in polling, flipped to a lead over Biden.
2020 race flip: Trump 47%, Biden 43% @Rasmussen_Poll https://washex.am/2lKJ45o
Senate Judiciary Com Chair @LindseyGrahamSC: Those who believe that the transcript is a “Smoking Gun” for impeachment, do something about it – have the courage of your convictions. The House of Reps should take a vote to formally open an impeachment inquiry. Let the American people see where Members of Congress stand!
If the House impeaches Trump, the Senate will hold a trial. Trump and GOP attorneys can question witnesses under oath. Probable witnesses include: Joe Biden, Hunter Biden, John Kerry’s stepson, Barack Obama (He’s a private citizen now), Hillary, Comey, Brennan, Loretta Lynch, Clapper etal.
WaPo: Trump’s intelligence chief threatened to quit if White House forced him to stonewall Congress on whistleblower, officials say – Joseph Maguire, the acting director of national intelligence, threatened to resign over concerns he would be told to evade lawmakers’ questions during his testimony scheduled for Thursday with House and Senate Intelligence committees, current and former U.S. officials said… https://www.washingtonpost.com/national-security/acting-director-of-national-intelligence-threatened-to-resign-if-he-couldnt-speak-freely-before-congress/2019/09/25/b1deb71e-dfbf-11e9-be96-6adb81821e90_story.html
DNI Chief Maguire statement: “At no time have I considered resigning my position since assuming this role on Aug. 16, 2019. I have never quit anything in my life, and I am not going to start now.”
The MSM just won’t stop publishing fake news from deceptive Deep State sources. What ever happened to “If your mother tells you she loves you, CHECK IT OUT”?
@paulsperry_: In prosecutor Durham’s crosshairs is Alexandra Chalupa, a Ukrainian-American and DNC operative who worked w Biden’s hand-picked Ukrainian prosecutorSytnyk to leak the fake “black ledger” on Manafort to help Hillary. Soon after, the FBI subjected Manafort to FISA spying
On Twitter: Anonymous source posts picture of whistleblower. It was DJT with a cheesy moustache.
Last night, DJT held a presser. He excoriated Dems and the MSM for their Ukraine gambit.
Bloomberg TicToc @tictoc on DJT’s presser: Trump says the Democrats, not him, threatened Ukraine’s president for political gain… Trump says Democrats planned the latest stage of their “witch hunt” to coincide with the UN General Assembly to discredit him… “She’s lost her way. She’s been taken over by the radical Left.” Trump said “as far as I’m concerned” House Speaker Nancy Pelosi is “no longer the Speaker of the House”… Trump says Schiff and Nadler “must laugh their asses off” after they lie publicly about Trump… Trump’s campaign manager says the president has raised $5 million since democrats announced their impeachment inquiry
@LisaMei62: LOL…1st question from a reporter…asked if it was proper for him to ask a foreign leader for information about Biden and the reporter asked how he (POTUS) would feel if Obama had asked a foreign leader for information about him. POTUS said, “That’s what he did!”
Trump also said the media aren’t just fake, they’re corrupt.
@GOPLeader: Can’t make this up.→ Democrats are holding a show vote to request access to the classified whistleblower documents. There’s just one thing…they ALREADY have access. They were literally able to view the documents in the Capitol today. This Dem Majority has become pointless
Did You Know There’s a Treaty Between the USA & Ukraine Regarding Cooperation For Prosecuting Crimes? – It was passed when Joe Biden was a member of the U.S. Senate and then signed by then-President Bill Clinton. A comprehensive treaty agreement that allows cooperation between both the United States and Ukraine in the investigation and prosecution of crimes. It appears President Trump was following the law to the letter when it comes to unearthing the long-standing corruption that has swirled in Ukraine and allegedly involves powerful Democrats like Joe Biden and others…
66-29 huge majority believes the Democrats should work with @realDonaldTrump to solve the nation’s problems rather than impeachment; 58-32 voters believe the Democrats and the Wash DC establishment are blocking changes President is trying to make.
Today – Uber doves Bullard (St. Louis Fed) and Kashkari (Minny Fed) are among the several Fed officials scheduled to speak. J-Bull and Kashkari will likely perform their dovish shtick.
Barring unexpected news, traders want to commence September performance gaming. The usual suspects should get serious about juicing stuff during the final two hours of trading.
ESZs are -3.00 a t 21:00 ET on this: Attorney General Barr Seeks DoJ Facebook Antitrust Probe
NBC report: Majority of House members now back some type of impeachment action against Trump… But that doesn’t mean they will all vote to impeach the president… Some House Democrats, as well as Rep. Justin Amash, I-Mich., have asked for an impeachment inquiry to examine any evidence of wrongdoing… Still others have called for drafting articles of impeachment against Trump…
ESZs aren’t down more because the NBC story is a rehash of polling that has shown similar results: about 160 House Dems want to impeach; the remainder, to CYA, want an impeachment inquiry.
The S&P 500 Index 50-day MA: 2950; 100-day MA: 2922; 150-day MA: 2899; 200-day MA: 2830
The DJIA 50-day MA: 26,593; 100-day MA: 26,370; 150-day MA: 26,273; 200-day MA: 25,784
S&P 500 Index support: 2972, 2955-60, 2940-45, 2930, 2922, 2914, 2900, 2880, 2870
Resistance: 2991-93, 3000, 3008, 3017-22, 3027, 3040, 3050
Expected economic data: Q2 GDP 2.0%, Sending 4.7%, GDP Price Index 2.4%, Core PCE 1.7% q/q;
Initial Jobless Claims 212k, Continuing Claims 1.666m; Aug Pending Home Sales 1.0% m/m; KC Fed Mfg Activity -4; Aug Wholesale Inventories 0.1% m/m; Bullard speaks 10:00 ET; Fed VCEO and SF Fed Prez Daly 11:45 ET, Minny Fed Prez Kashkari 14:00 ET
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 positive;MACD is negative -a close below 2951.31 triggers a sell signal
Hourly: Trender is negative; MACD is positive – a close above 2993.18 triggers a buy signal
Well that is all for today
I will see you Friday night.