OCT 19//ANOTHER PAPER GOLD/SILVER RAID: GOLD CLOSED DOWN $20.65 TO $1630.20//SILVER IS DOWN 27 CENTS TO $18.41//PLATINUM IS DOWN 24.10 TO $888.75//PALLADIUM IS DOWN 20.15 TO $1997.45//COVID UPDATES: DR PAUL ALEXANDER//VACCINE INJURY//VACCINE IMPACT//IMPORTANT ARTICLES TO READ: TOM LUONGO ON USA VS EUROPE (DAVOS CROWD)//MATHEW PIEPENBERG//UPDATES ON RUSSIA VS UKRAINE//SWAMP STORIES FOR YOU TONIGHT//FINALLY BILL HOLTER INTERVIEW WITH GREG HUNTER A MUST VIEW
323 C HSBC 15 435 H SCOTIA CAPITAL 16 657 C MORGAN STANLEY 1
TOTAL: 16 16 MONTH TO DATE: 22,275
JPMORGAN STOPPED 0/54
GOLD: NUMBER OF NOTICES FILED FOR OCT CONTRACT: 16 NOTICES FOR 1600 OZ or 0.0497 TONNES
total notices so far: 22,575 contracts for 2,257,500 oz (69.284 tonnes)
SILVER NOTICES: 0 NOTICE(S) FILED FOR NIL OZ/
total number of notices filed so far this month 439 : for 2,145,000 oz
END
Russia is a major supplier of silver to London while Mexico supplies the COMEX
With the sanctions, London has no way to obtain silver other than compete with NY.
GLD
WITH GOLD DOWN $20.65
WITH RESPECT TO GLD WITHDRAWALS: (OVER THE PAST FEW MONTHS):
GOLD IS “RETURNED” TO THE BANK OF ENGLAND WHEN CALLING IN THEIR LEASES: THE GOLD NEVER LEAVES THE BANK OF ENGLAND IN THE FIRST PLACE. THE BANK IS PROTECTING ITSELF IN CASE OF COMMERCIAL FAILURE
ALSO INVESTORS SWITCHING TO SPROTT PHYSICAL (PHYS) INSTEAD OF THE FRAUDULENT GLD//BIG CHANGES IN GOLD INVENTORY AT THE GLD: /////A WITHDRAWAL OF 0.29 TONNES INTO THE GLD//
INVENTORY RESTS AT 938.81 TONNES
Silver//SLV
WITH NO SILVER AROUND AND SILVER DOWN 27 CENTS
AT THE SLV// :/BIG CHANGES IN SILVER INVENTORY AT THE SLV//: A HUGE WITHDRAWAL OF 1.105 MILLION OZ INTO THE SLV
INVESTORS ARE SWITCHING SLV TO SPROTT’S PSLV
CLOSING INVENTORY: 486.624 MILLION OZ
Let us have a look at the data for today
SILVER//OUTLINE
SILVER COMEX OI ROSE BY A STRONG SIZED 751 CONTRACTS TO 136,055 AND CLOSER TO THE RECORD HIGH OI OF 244,710, SET FEB 25/2020 AND THE GIGANTIC GAIN IN COMEX OI WAS ACCOMPLISHED DESPITE OUR $0.05 LOSS IN SILVER PRICING AT THE COMEX ON MONDAY. OUR BANKERS/HFT WERE SUCCESSFUL IN KNOCKING THE PRICE OF SILVER DOWN (IT FELL BY $0.05)., BUT UNSUCCESSFUL IN KNOCKING OFF ANY SPEC LONGS. HUGE NUMBERS OF SPECS CONTINUE TO ADD TO THEIR SHORTFALLS FROM WHICH OUR BANKERS CONTINUE TO BE PURCHASERS OF NET COMEX LONGS.
WE MUST HAVE HAD: I) SOME SPECULATOR SHORT COVERINGS ////CONTINUED BANKER OI COMEX ADDITIONS /// CONSIDERABLE NEWBIE SPEC LONG ADDITIONS. II) WE ALSO HAD SOME REDDIT RAPTOR BUYING//. iii) A STRONG ISSUANCE OF EXCHANGE FOR PHYSICALS iiii) AN INITIAL SILVER STANDING FOR COMEX SILVER MEASURING AT 1.580 MILLION OZ FOLLOWING A 5,000 OZ E.F.P. JUMP TO LONDON / // V) STRONG SIZED COMEX OI GAIN/
I AM NOW RECORDING THE DIFFERENTIAL IN OI FROM PRELIMINARY TO FINAL: +2
HISTORICAL ACCUMULATION OF EXCHANGE FOR PHYSICALS OCT. ACCUMULATION FOR EFP’S SILVER/JPMORGAN’S HOUSE OF BRIBES/STARTING FROM FIRST DAY/MONTH OF OCT:
TOTAL CONTRACTS for 15 days, total 54,815 contracts: 27.408 million oz OR 1.8272MILLION OZ PER DAY. (365 CONTRACTS PER DAY)
TOTAL EFP’S FOR THE MONTH SO FAR: 27.408 MILLION OZ
.
LAST 17 MONTHS TOTAL EFP CONTRACTS ISSUED IN MILLIONS OF OZ:
MAY 137.83 MILLION
JUNE 149.91 MILLION OZ
JULY 129.445 MILLION OZ
AUGUST: MILLION OZ 140.120
SEPT. 28.230 MILLION OZ//
OCT: 94.595 MILLION OZ
NOV: 131.925 MILLION OZ
DEC: 100.615 MILLION OZ
JAN 2022// 90.460 MILLION OZ
FEB 2022: 72.39 MILLION OZ//
MARCH: 207.430 MILLION OZ//A NEW RECORD FOR EFP ISSUANCE
APRIL: 114.52 MILLION OZ FINAL//LOW ISSUANCE
MAY: 105.635 MILLION OZ//
JUNE: 94.470 MILLION OZ
JULY : 87.110 MILLION OZ
AUGUST: 65.025 MILLION OZ
SEPT. 74.025 MILLION OZ///FINAL
OCT. 27.408 MILLION OZ INITIAL
RESULT: WE HAD A STRONG SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 751 DESPITE OUR $0.05 LOSS IN SILVER PRICING AT THE COMEX// TUESDAY.,. THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE CONTRACTS: 618 CONTRACTS ISSUED FOR DEC AND 0 CONTRACTS ISSUED FOR ALL OTHER MONTHS) WHICH EXITED OUT OF THE SILVER COMEX TO LONDON AS FORWARDS THE DOMINANT FEATURE TODAY: /STRONG BANKER ADDITIONS // STRONG SHORT ADDITIONS//CONSIDERABLE NEWBIE SPEC LONG ADDITIONS// /// WE HAVE A GOOD INITIAL SILVER OZ STANDING FOR OCT. OF 1.580 MILLION OZ FOLLOWED BY TODAY’S 5,000 E.F.P. JUMP TO LONDON .. WE HAD A HUGE SIZED GAIN OF 1369 OI CONTRACTS ON THE TWO EXCHANGES FOR 6.845 MILLION OZ..
WE HAD 0 NOTICE(S) FILED TODAY FOR NIL OZ
THE SILVER COMEX IS NOW BEING ATTACKED FOR METAL BY LONDONERS ET AL.
GOLD//OUTLINE
IN GOLD, THE COMEX OPEN INTEREST ROSE BY A FAIR SIZED 1725 CONTRACTS TO 434,701 AND CLOSER TO THE RECORD (SET JAN 24/2020) AT 799,541 AND PREVIOUS TO THAT: (SET JAN 6/2020) AT 797,110. WE WILL PROBABLY SEE THE COMEX OI FALL TO AROUND 380,000 AS OUR SPECS GET ANNIHILATED.
THE DIFFERENTIAL FROM PRELIMINARY OI TO FINAL OI IN GOLD TODAY: ADDED +100 CONTRACTS.
.
THE GOOD SIZED INCREASE IN COMEX OI CAME DESPITE OUR LOSS IN PRICE OF $7.40//COMEX GOLD TRADING/TUESDAY // CONSIDERABLE SPECULATOR SHORT COVERINGS ACCOMPANYING OUR FAIR SIZED EXCHANGE FOR PHYSICAL ISSUANCE./. WE HAD ZERO LONG LIQUIDATION //AND CONTINUED ADDITIONS TO OUR BANKER LONGS!! THE COMEX WILL BLOW UP AS THE SPECS CANNOT DELIVER GOLD TO OUR BANKER LONGS.
WE ALSO HAD A HUGE INITIAL STANDING IN GOLD TONNAGE FOR OCT. AT 66.099 TONNES ON FIRST DAY NOTICE FOLLOWED BY TODAY’S QUEUE. JUMP OF 29,500 OZ//NEW STANDING 72.202TONNES (QUEUE JUMPING = EXERCISING LONDON BASED EFP’S WILL CONTINUE UNTIL MONTH’S END)
YET ALL OF..THIS HAPPENED WITH OUR LOSS IN PRICE OF $7.40 WITH RESPECT TO TUESDAY’S TRADING
WE HAD A FAIR SIZED GAIN OF 3298 OI CONTRACTS 10.258 PAPER TONNES) ON OUR TWO EXCHANGES..
E.F.P. ISSUANCE
THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A FAIR SIZED 1573 CONTRACTS:
The NEW COMEX OI FOR THE GOLD COMPLEX RESTS AT 434,601
IN ESSENCE WE HAVE A FAIR SIZED INCREASE IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 3198 CONTRACTS WITH 1625 CONTRACTS INCREASED AT THE COMEX AND 1573 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS TOTAL OI GAIN ON THE TWO EXCHANGES OF 3198 CONTRACTS OR 9.947 TONNES.
CALCULATIONS ON GAIN/LOSS ON OUR TWO EXCHANGES
WE HAD A FAIR SIZED ISSUANCE IN EXCHANGE FOR PHYSICALS (1573) ACCOMPANYING THE FAIR SIZED GAIN IN COMEX OI (1625): TOTAL GAIN IN THE TWO EXCHANGES 3298 CONTRACTS. WE NO DOUBT HAD 1) MINOR SPECULATOR SHORT COVERINGS// CONTINUED GOOD BANKER ADDITIONS/// STRONG NEWBIE SPEC ADDITIONS ,2.) STRONG INITIAL STANDING AT THE GOLD COMEX FOR OCT. AT 66.099 TONNES FOLLOWED BY TODAY’S 29,500 OZ QUEUE. JUMP ///NEW STANDING 72.202 TONNES//. 3) ZERO LONG LIQUIDATION //// //.,4) FAIR SIZED COMEX OPEN INTEREST GAIN 5) FAIR ISSUANCE OF EXCHANGE FOR PHYSICAL/
HISTORICAL ACCUMULATION OF EXCHANGE FOR PHYSICALS IN 2022 INCLUDING TODAY
OCT
ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF OCT. :
34,684 CONTRACTS OR 3,468,400 OZ OR 107,88 TONNES 15 TRADING DAY(S) AND THUS AVERAGING: 2312 EFP CONTRACTS PER TRADING DAY
TO GIVE YOU AN IDEA AS TO THE SIZE OF THESE EFP TRANSFERS : THIS MONTH IN 15 TRADING DAY(S) IN TONNES: 107.88 TONNES
TOTAL ANNUAL GOLD PRODUCTION, 2021, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 3555 TONNES
THUS EFP TRANSFERS REPRESENTS 107.88/3550 x 100% TONNES 3.04% OF GLOBAL ANNUAL PRODUCTION
SEPT 142.12 TONNES FINAL ISSUANCE ( LOW ISSUANCE)_
OCT: 141.13 TONNES FINAL ISSUANCE (LOW ISSUANCE)
NOV: 312.46 TONNES FINAL ISSUANCE//NEW RECORD!! (INCREASING DRAMATICALLY)//SIGN OF REAL STRESS//SURPASSING THE MARCH 2021 RECORD OF 276.50 TONNES OF EFP
DEC. 175.62 TONNES//FINAL ISSUANCE//
JAN:2022 247.25 TONNES //FINAL
FEB: 196.04 TONNES//FINAL
MARCH: 409.30 TONNES INITIAL( THIS IS NOW A RECORD EFP ISSUANCE FOR MARCH AND FOR ANY MONTH.
APRIL: 169.55 TONNES (FINAL VERY LOW ISSUANCE MONTH)
MAY: 247,44 TONNES FINAL//
JUNE: 238.13 TONNES FINAL
JULY: 378.43 TONNES FINAL
AUGUST: 180.81 TONNES FINAL
SEPT. 193.16 TONNES FINAL
OCT: 107.88 TONNES INITIAL ( MUCH SMALLER THAN LAST MONTH)
SPREADING OPERATIONS
(/NOW SWITCHING TO GOLD) FOR NEWCOMERS, HERE ARE THE DETAILS
SPREADING LIQUIDATION HAS NOW COMMENCED AS WE HEAD TOWARDS THE NEW NON ACTIVE FRONT MONTH OF NOV. WE ARE NOW INTO THE SPREADING OPERATION OF BOTH SILVER AND GOLD (WILL BE SMALL AS SPREADERS DO NOT PAY ATTENTION TO NOVEMBER)
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:HERE IS HOW THE CROOKS USED SPREADING AS WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF OCT HEADING TOWARDS THE NON ACTIVE DELIVERY MONTH OF NOV., FOR BOTH GOLD AND SILVER:
YOU WILL ALSO NOTICE THAT THE COMEX OPEN INTEREST STARTS TO RISE BUT SO IS THE OPEN INTEREST OF SPREADERS. THE OPEN INTEREST IN WILL CONTINUE TO RISE UNTIL ONE WEEK BEFORE FIRST DAY NOTICE OF AN UPCOMING ACTIVE DELIVERY MONTH (NOV), 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.”
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.
First, here is an outline of what will be discussed tonight:
1.Today, we had the open interest at the comex, in SILVER, ROSE BY A STRONG SIZED 751 CONTRACT OI TO 136,055 AND CLOSER TO OUR COMEX HIGH RECORD //244,710(SET FEB 25/2020). 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 5 YEARS AGO.
EFP ISSUANCE 618 CONTRACTS
OUR CUSTOMARY MIGRATION OF COMEX LONGS CONTINUE TO MORPH INTO LONDON FORWARDS AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:
DEC 618 ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 618 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. IF WE TAKE THE COMEX OI GAIN OF 751 CONTRACTS AND ADD TO THE 950 OI TRANSFERRED TO LONDON THROUGH EFP’S,
WE OBTAIN A HUGE SIZED GAIN OF 1369 OPEN INTEREST CONTRACTS FROM OUR TWO EXCHANGES.
THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES 6.845 MILLION OZ//
4. Chris Powell of GATA provides to us very important physical commentaries
end
5. Other gold commentaries
6. Commodity commentaries//
3. ASIAN AFFAIRS
i)WEDNESDAY MORNING// TUESDAY NIGHT
SHANGHAI CLOSED DOWN 36.58 PTS OR 1.19% //Hang Seng CLOSED DOWN 403.30 OR 2.38% /The Nikkei closed UP 101.24PTS OR 0.37% //Australia’s all ordinaires CLOSED UP 0.34% /Chinese yuan (ONSHORE) closed UP TO 7.2278 //OFFSHORE CHINESE YUAN UP 7.2642// /Oil DOWN TO 83.99 dollars per barrel for WTI and BRENT AT 90.71 / Stocks in Europe OPENED MOSTLY RED. ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST US DOLLAR/OFFSHORE WEAKER
a)NORTH KOREA/SOUTH KOREA
outline
b) REPORT ON JAPAN/
OUTLINE
3 C CHINA
OUTLINE
4/EUROPEAN AFFAIRS
OUTLINE
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
OUTLINE
6.Global Issues//COVID ISSUES/VACCINE ISSUES
OUTLINE
7. OIL ISSUES
OUTLINE
8 EMERGING MARKET ISSUES
COMEX DATA//AMOUNTS STANDING//VOLUME OF TRADING/INVENTORY MOVEMENTS
GOLD
LET US BEGIN:
THE TOTAL COMEX GOLD OPEN INTEREST ROSE BY A SMALL SIZED 1725 CONTRACTS TO 434,705 AND CLOSER TO THE RECORD THAT WAS SET IN JANUARY/2020: {799,541 OI(SET JAN 16/2020)} AND PREVIOUS TO THAT: 797,110 (SET JAN 7/2020). AND THIS SMALL COMEX INCREASE OCCURRED DESPITE OUR FALL IN PRICE OF $7.40 IN GOLD PRICING TUESDAY’S COMEX TRADING. WE ALSO HAD A FAIR SIZED EFP (1573 CONTRACTS). . THEY WERE PAID HANDSOMELY NOT TO TAKE DELIVERY AT THE COMEX AND SETTLE FOR CASH. IT NOW SEEMS THAT THE COMMERCIALS HAVE GOADED THE SPECS TO GO MASSIVELY SHORT AND NOW THEY ARE DESPERATELY TRYING TO COVER THEIR FOLLY.
WE NORMALLY HAVE WITNESSED EXCHANGE FOR PHYSICALS ISSUED BEING SMALL AS IT JUST TOO COSTLY FOR THEM TO CONTINUE SERVICING THE COSTS OF SERIAL FORWARDS CIRCULATING IN LONDON. HOWEVER, MUCH TO THE ANNOYANCE OF OUR BANKERS, THE COMEX IS THE SCENE OF AN ASSAULT ON GOLD AS LONDONERS, NOT BEING ABLE TO FIND ANY PHYSICAL ON THAT SIDE OF THE POND, EXERCISE THESE CIRCULATING EXCHANGE FOR PHYSICALS IN LONDON AND FORCING DELIVERY OF REAL METAL OVER HERE AS THE OBLIGATION STILL RESTS WITH NEW YORK BANKERS. IT SEEMS THAT ARE BANKERS FRIENDS ARE EXERCISING EFP’S FROM LONDON AND NOW THEY ARE LOATHE TO ISSUE NEW ONES.
EXCHANGE FOR PHYSICAL ISSUANCE
WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF OCT.. THE CME REPORTS THAT THE BANKERS ISSUED A FAIR SIZED TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS.,
THAT IS 1573EFP CONTRACTS WERE ISSUED: ;: , . 0 DEC : 1573 & ZERO FOR ALL OTHER MONTHS:
TOTAL EFP ISSUANCE: 1573 CONTRACTS
WHEN WE HAVE BACKWARDATION, EFP ISSUANCE IS VERY COSTLY BUT THE REAL PROBLEM IS THE SCARCITY OF METAL AND IT IS FAR BETTER FOR OUR BANKERS TO PAY OFF INDIVIDUALS THAN RISK INVESTORS ESPECIALLY FROM LONDON STANDING FOR DELIVERY. THE LOWER PRICES IN THE FUTURES MARKET IS A MAGNET FOR OUR LONDONERS SEEKING PHYSICAL METAL. BACKWARDATION ALWAYS EQUAL SCARCITY OF METAL!
ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: A FAIR SIZED TOTAL OF 3298 CONTRACTS IN THAT 1573LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE HAD A SMALL SIZED COMEX OI GAIN OF 1725 CONTRACTS..AND THIS FAIR SIZED GAIN ON OUR TWO EXCHANGES HAPPENED DESPITE OUR FALL IN PRICE OF GOLD $7.40//WE HAD SPEC SHORTS ADDITIONS, WITH BANKERS AS BUYERS OF COMEX GOLD CONTRACTS. WE ALSO HAD SOME ADDITIONAL NEWBIE SPECS GOING LONG
// WE HAVE A STRONG AMOUNT OF GOLD TONNAGE STANDING OCT (72.202),
HERE ARE THE AMOUNTS THAT STOOD FOR DELIVERY IN THE PRECEDING 12 MONTHS OF 2021-2022:
DEC 2021: 112.217 TONNES
NOV. 8.074 TONNES
OCT. 57.707 TONNES
SEPT: 11.9160 TONNES
AUGUST: 80.489 TONNES
JULY: 7.2814 TONNES
JUNE: 72.289 TONNES
MAY 5.77 TONNES
APRIL 95.331 TONNES
MARCH 30.205 TONNES
FEB ’21. 113.424 TONNES
JAN ’21: 6.500 TONNES.
TOTAL SO FAR THIS YEAR (JAN- DEC): 601.213 TONNES
YEAR 2022:
JANUARY 2022 17.79 TONNES
FEB 2022: 59.023 TONNES
MARCH: 36.678 TONNES
APRIL: 85.340 TONNES FINAL.
MAY: 20.11 TONNES FINAL
JUNE: 74.933 TONNES FINAL
JULY 29.987 TONNES FINAL
AUGUST:104.979 TONNES//FINAL
SEPT. 38.1158 TONNES
OCT: 72.202 TONNES
THE SPECS/HFT WERE SUCCESSFUL IN LOWERING GOLD’S PRICE //// (IT FELL $7.40) BUT WERE UNSUCCESSFUL IN KNOCKING OFF ANY SPECULATOR LONGS (THEY ADDED TO THEIR POSITIONS) AS WE HAD A FAIR SIZED TOTAL GAIN ON OUR TWO EXCHANGES OF 3198 CONTRACTS // WE HAVE REGISTERED A FAIR GAIN OF 10.258 PAPER TONNES ON TOTAL OI FROM OUR TWO EXCHANGES, ACCOMPANYING OUR GOLD TONNAGE STANDING FOR OCT. (72.202 TONNES)…THIS WAS ACCOMPLISHED WITH A FALL IN PRICE OF $7.40
WE HAD -100 CONTRACTS COMEX TRADES REMOVED. THESE WERE REMOVED AFTER TRADING ENDED LAST NIGHT
NET GAIN ON THE TWO EXCHANGES 3298 CONTRACTS OR 329,800 OZ OR 10.258 TONNES
Total monthly oz gold served (contracts) so far this month
22,275 notices 2,227,500 69.284 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month
NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month
xxx oz
total dealer deposit 0
total dealer deposit: nil oz
No dealer withdrawals
Customer deposits: 1
i) Into Brinks 28,935.900 oz (900kilobars)
total deposits 28,935.900 oz
customer withdrawals:3
i) Out of Manfra 28,935.900 oz (900 kilobars)
ii) Out of Brinks 1993.370 oz
iii) Out of HSBC 96,318.620 oz
total: 127,247.890 oz
total in tonnes: 3.95 tonnes
Adjustments: 1// dealer to customer
i)HSBC 11,042.900 oz
CALCULATIONS FOR THE AMOUNT OF GOLD STANDING FOR OCT.
For the front month of OCT we have an oi of 954 contracts having GAINED 241 contracts . We had 54 contracts
filed on TUESDAY, so we GAINED A STRONG 295 contracts or an additional 29,500 oz will stand in this active delivery month of Oct. From this point
we should gain in total gold standing through to the end of Oct.( This is queue jumping and in reality it is the exercising of London based EFP;s for gold at the comex)
November GAINED 157 contracts to stand at 3461
December GAINED 1685 contracts up to 359,038
We had 16 notice(s) filed today for 1600 oz FOR THE OCT. 2022 CONTRACT MONTH.
Today, 0 notice(s) were issued from J.P.Morgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equate to 16 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by J.P.Morgan//customer account and 0 notice(s) received (stopped) by the squid (Goldman Sachs)
To calculate the INITIAL total number of gold ounces standing for the OCT /2022. contract month,
we take the total number of notices filed so far for the month (22,275) x 100 oz , to which we add the difference between the open interest for the front month of (OCT 954 CONTRACTS) minus the number of notices served upon today 16 x 100 oz per contract equals 2,321,300 OZ OR 72.202 TONNES the number of TONNES standing in this active month of OCT.
thus the INITIAL standings for gold for the OCT contract month:
No of notices filed so far (22,275) x 100 oz+ (954) OI for the front month minus the number of notices served upon today (16} x 100 oz} which equals 2,321,300 oz standing OR 72.202 TONNES in this NON active delivery month of OCTOBER.
TOTAL COMEX GOLD STANDING: 72.202 TONNES (A HUMONGOUS STANDING FOR OCT (GENERALLY THE POOREST DELIVERY MONTHS FOR AN ACTIVE MONTH)
WE WILL INCREASE IN GOLD TONNAGE STANDING FROM THIS DAY FORTH UNTIL THE END OF THE MONTH.
SOMEBODY IS AFTER A HUGE AMOUNT OF GOLD. THE EFPS ARE NOW BEING USED TO TAKE GOLD FROM THE COMEX. THUS THE AMOUNT OF GOLD STANDING FOR SEPT. WILL RISE EXPONENTIALLY.
To calculate the number of silver ounces that will stand for delivery in OCT we take the total number of notices filed for the month so far at 429 x 5,000 oz = 2,145,000 oz
to which we add the difference between the open interest for the front month of OCT(234) and the number of notices served upon today 0 x (5000 oz) equals the number of ounces standing.
Thus the standings for silver for the OCT./2022 contract month: 429 (notices served so far) x 5000 oz + OI for front month of OCT (234) – number of notices served upon today (0) x 5000 oz of silver standing for the OCT contract month equates 3,315,000,000 oz. .
the record level of silver open interest is 234,787 contracts set on April 21./2017 with the price on that day at $18.42. The previous record was 224,540 contracts with the price at that time of $20.44
OCT 19/WITH GOLD DOWN $20.65:: SMALL CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF .29 TONNES FROM THE GLD////INVENTORY RESTS AT 938.81 TONNES
OCT 18/WITH GOLD DOWN $7.40: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.03 TONNES FROM THE GLD////INVENTORY RESTS AT 939.10 TONNES
OCT 17/WITH GOLD UP $14.55: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 3.28 TONNES FROM THE GLD///INVENTORY RESTS AT 941.13 TONNES
OCT 14/WITH GOLD DOWN $26.50 TODAY: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.16 TONNES FROM THE GLD///INVENTORY RESTS AT 944.31 TONNES
OCT 13/WITH GOLD DOWN $0.40 TODAY: A DEPOSIT OF 1.16 TONNES INTO THE GLD// CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 945.47 TONNES
OCT 12/WITH GOLD UP $4.00 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 944.31 TONNES
OCT 11/WITH GOLD UP $10.30 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 944.31 TONNES
OCT 10//WITH GOLD DOWN $33.50 TODAY: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.03 TONNES OF GOLD FROM THE GLD////INVENTORY RESTS AT 944.31 TONNES
OCT 7/WITH GOLD DOWN $10.70: NO CHANGES IN GOLD INVENTORY AT THE GLD///INVENTORY RESTS AT 946.34 TONNES
OCT 6/WITH GOLD UP $.70 TODAY: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 3.45 TONNES INTO THE GLD//INVENTORY RESTS AT 946.34 TONNES
OCT 4/WITH GOLD UP $28.65 TODAY: HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 3.19 TONNES INTO THE GLD//INVENTORY RESTS AT 942.89 TONNES
OCT 3.WITH GOLD UP $29.30 TODAY: BIG CHANGES IN GOLD INVENTORY AT THE GLD AND A BIG SURPRISE: A WITHDRAWAL OF 1.45 TONNES FROM THE GLD////INVENTORY RESTS AT 939.70 TONNES
SEPT 30 WITH GOLD UP $3.75 TODAY : BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.01 TONNES FROM THE GLD////INVENTORY RESTS AT 941.15 TONNES
SEPT 29/WITH GOLD DOWN $.85 TODAY: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 3.3 TONNES INTO THE GLD//INVENTORY RESTS AT 943.16 TONNES
SEPT 28/WITH GOLD UP $32.30: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.61 TONNES FORM THE GLD////INVENTORY RESTS AT 940.549 TONNES
SEPT 27/WITH GOLD UP $1.75: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 3.76 TONNES FROM THE GLD////INVENTORY RESTS AT 943.47 TONNES
SEPT 26/WITH GOLD DOWN $17.15: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.90 TONNES FROM THE GLD////INVENTORY RESTS AT 947.23 TONNES
SEPT 23/WITH GOLD DOWN $24.60: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWALOF 2.03 TONNES FORM THE GLD//INVENTORY RESTS AT 950.13 TONNES
SEPT 22/WITH GOLD UP $5.20; NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 952.16 TONNES
SEPT 21/WITH GOLD UP $4.70: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 5.79 TONNES FROM THE GLD///INVENTORY RESTS AT 952.16 TONNES
SEPT 20/WITH GOLD DOWN $6.65; HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.90 TONNES FROM THE GLD////INVENTORY RESTS AT 957.95 TONNES
SEPT 19/WITH GOLD DOWN $4.80: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.16 TONES FROM THE GLD//INVENTORY RESTS AT 960.85 TONNES
SEPT 16.WITH GOLD UP $5.70: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A DEPOSIT 1,45 TONNES INTO THE GLD//INVENTORY RESTS AT 962.01 TONNES
SEPT 15/WITH GOLD DOWN $30.20: HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.35 TONNES FROM THE GLD.//INVENTORY RESTS AT 960.56 TONNES
SEPT 14/WITH GOLD DOWN $7.70: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.03 TONNES FROM THE GLD////INVENTORY REST AT 962.88 TONNES
GLD INVENTORY: 938.81 TONNES
Now the SLV Inventory/( vehicle is a fraud as there is no physical metal behind them
OCT 19/WITH SILVER DOWN 27 CENTS: BIG CHANGES IN SILVER INVENTORY AT THE SLV: AWITHDRAWAL OF 1.105 MILLION OZ FROM THE SLV////INVENTORY RESTS AT 486.624 MILLION OZ///
OCT 18/WITH SILVER DOWN 5 CENTS:BIG CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.658 MILLION OZ INTO THE SLV////INVENTORY RESTS AT 487.729 MILLION OZ///
OCT 17/WITH SILVER UP 53 CENTS TODAY: BIG CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.151 MILLION OZ INTO THE SLV////INVENTORY REST AT 486.071 MILLION OZ//
OCT 14/WITH SILVER DOWN 77 CENTS TODAY: BIG CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 2.211 MILLION OZ INTO THE SLV//INVENTORY RESTS AT 484.920 MILLION OZ//
OCT 13/WITH SILVER DOWN 2 CENTS TODAY: BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 4.513 MILLION OZ INTO THE SLV//INVENTORY RESTS AT 482.709 MILLION OZ//
Oct 12/WITH SILVER DOWN 18 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 478.196 MILLION OZ
OCT 11/WITH SILVER DOWN 11 CENTS TODAY: HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 5.066 MILLION OZ INTO THE SLV///INVENTORY RESTS AT 478.196 MILLION OZ
OCT 10//WITH SILVER DOWN 65 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 473.130 MILLION OZ/
OCT 7/WITH SILVER DOWN 37 CENTS TODAY: BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.447 MILLION OZ FROM THE SLV///INVENTORY RESTS AT 473.130 MILLION OZ/
OCT 6/WITH SILVER UP 11 CENTS TODAY: BIG CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY: A WITHDRAWAL OF 5.3 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 475.617 MILLION OZ//
OCT 4WITH SILVER UP $.51 TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 480.917 MILLION OZ
OCT 3/WITH SILVER UP $1.46 : NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 480.917 MILLION OZ//
SEPT 30/WITH SILVER UP 31 CENTS TODAY: SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.013 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 480.917 MILLION OZ//
SEPT 29/WITH SILVER DOWN 15 CENTS: BIG CHANGES IN SILVER INVENTORY AT THE SLV//A WITHDRAWAL OF 645,000 OZ FROM THE SLV//INVENTORY RESTS AT 479.904 MILLION OZ//
SEPT 28/WITH SILVER UP $.52 TODAY: BIG CHANGES IN SILVER INVENTORY AT THE SLV A WITHDRAWAL OF 645,000 OZ FROM THE SLV.//INVENTORY RESTS AT 480.549 MILLION OZ//
SEPT 27/WITH SILVER DOWN 7 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 481.194 MILLION OZ
SEPT 26/WITH SILVER DOWN 43 CENTS : BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 737.000 OZ FROM THE SLV////INVENTORY RESTS AT 481.194 MILLION OZ//
SEPT 23/WITH SILVER DOWN 68 CENTS: BIG CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF .507 MILLION OZ INTO THE SLV////INVENTORY RESTS AT 481.931 MILLION
SEPT 22/WITH SILVER UP 10 CENTS TODAY; SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF .691 MILLION OZ FROM THE SLV////INVENTORY RESTS AT 481.424 MILLION OZ/
SEPT 21/WITH SILVER UP 33 CENTS TODAY; BIG CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 2.902 MILLION OZ INTO THE SLV////INVENTORY RESTS AT 482.115 MILLION OZ//
SEPT 20/WITH SILVER DOWN 18 CENTS/HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.475 MILLION OZ//INVENTORY RESTS AT 479.213 MILLION OZ//
SEPT 19/WITH SILVER DOWN 2 CENTS TODAY: GIGANTIC CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 8.108 MILLION OZ INTO THE SLV/INVENTORY RESTS AT 477.738 MILLION OZ
SEPT 16/WITH SILVER UP 8 CENTS TODAY:BIG CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 2.58 MILLION OZ INTO THE SLV////INVENTORY RESTS AT 469.63 MILLION OZ//
SEPT 15/WITH SILVER DOWN $.25 TODAY; BIG CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.151 MILLION OZ INTO THE SLV/////INVENTORY RESTS AT 467.050 MILLION OZ//
SEPT 14/WITH SILVER UP $0.06 TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 465.899 MILLION OZ/
CLOSING INVENTORY 486.624 MILLION OZ//
PHYSICAL GOLD/SILVER STORIES
1.PETER SCHIFF
As we have discussed previously gold is migrating from West to East
As Bloomberg described it, many western investors – particularly at the institutional level – are dumping bullion. Meanwhile, Asian buyers are taking advantage of lower prices to snap up less expensive jewelry, coins, and bars.
According to the Bloomberg report, “large volumes of metal are being drawn out of vaults in financial centers like New York and heading east to meet demand in Shanghai’s gold market or Istanbul’s Grand Bazaar.”
In fact, Asian suppliers are having a difficult time getting enough bullion into Asian markets. As a result, there has been a significant increase in premiums in many Asian countries. September’s average premium in China reached the highest monthly level for nearly six years.
“The incentive to hold gold is a lot lower. It’s going from west to east now,” MKS PAMP SA head of trading Joseph Stefans told Bloomberg.
“We are trying to keep up as best we can.”
New York and London vaults have reported an exodus of more than 527 tons of gold since the end of April, according to data from the CME Group and the London Bullion Market Association. At the same time, gold imports into China hit a four-year high in August.
India, Turkey, Thailand and Saudi Arabia have also reported increased imports of gold.
There is also growing demand for silver in Asian markets, particularly India. The premium on silver has tripled in recent months.
We also see the Asian appetite for gold in central bank purchases. Central banks globally have been net gold buyers for five straight months and all of the big purchases have been in the East.
Turkey has added more gold to its reserves in 2022 to date than any other country. With an 8.9-ton purchase in August, Turkey had increased its gold reserves by 84 tons through the first eight months of the year. Turkey now holds 478 tons of gold between its central bank and treasury holdings, the highest level since Q2 2020.
The Reserve Bank of India has also been a big buyer in 2022. Its total gold reserves now stand at 782.7 tons, ranking it as the ninth-largest gold-holding country in the world. Since resuming buying in late 2017, the Reserve Bank of India has purchased over 200 tons of gold. In August 2020, there were reports that the RBI was considering significantly raising its gold reserves.
Other big gold buyers in 2022 include Kazakhstan, Uzbekistan, Qatar and Iraq.
In the East, many people still use gold as their primary form of savings and wealth preservation. An article published by Seeking Alpha summarizes this dynamic.
For millions of people in Asia gold still is the ‘basic form of saving.’ In contrast to the West, where financialization started decades ago, and gold has slowly been removed from people their day-to-day lives. Until a financial crisis emerges, that is. In the West, people own little or no physical gold when they feel financially confident. People in the East have retained a long-term view concerning gold. Their ancestors saved in gold, and so have they been taught. With the knowledge that ultimately, gold doesn’t lose its purchasing power.”
For instance, Indian households own an estimated 25,000 tons of gold and that number may be higher given the large black market in the country. Gold is not just a luxury in India. Even poor people buy gold in the Asian nation. According to an ICE 360 survey in 2018, one in every two households in India purchased gold within the last five years. Overall, 87% of households in the country own some amount of the yellow metal.
So, while investors in the West are dumping gold as the price falls, investors in the East are taking advantage of the relatively low prices (even though gold is more expensive in many non-dollar fiat currencies) and gobbling up gold as inflation eats away at the value of their local currencies.
END
A good read: The Fed is going to have to choose to pivot or not
My guess: they will not pivot as they blow up Europe. Please see tom Luongo’s huge commentary in the European section of my commentary.
The Federal Reserve is between a rock and a hard place, and it’s going to have to make a hard choice – inflation or economic implosion. Peter Schiff talked about it on his podcast.
Peter said we are very close to another financial crisis and it could be worse than in 2008.
2008 was all about too much debt and the inability to pay. Well, we’ve got a lot more debt now, and we’re even less able to pay. The only thing that kept it going was the artificially low interest rates.”
About a year ago, Treasury Secretary Janet Yellen said there was no reason to worry about the national debt because interest rates were so low. But since the Fed started jacking up interest rates, the cost of financing the national debt has increased by a factor of 16.
So, if the debt wasn’t a problem because it was so cheap to finance it, well, it’s a huge problem now when the cost is 16-times higher.”
Peter reminded the audience that in 2018, the Fed was all about monetary tightening until the economy started to unravel and the stock market crashed. At that point, it pivoted back to rate cuts and QE (that they refused to call QE) – even before the pandemic. At that point, the Fed’s balance sheet was only at $4 trillion. Now it is closer to $9 trillion.
If the Fed really couldn’t get interest rates above 2.5% back then — it’s already got them above that now…”
Peter said he thinks the markets are starting to question the narrative, but they still haven’t figured out that the Fed is stuck between a giant rock and a hard place.
The Fed is going to have to pivot. But inflation is going to run out of control. They’ve got to make a choice. Do they want inflation? Or do they want economic implosion?”
Of course, if the central bank chooses inflation, we’re still going to have an implosion because we’ll ultimately end up with stagflation. It will just happen later.
That’s good enough for the politicians. All they care about is that it doesn’t happen now.”
There’s only one way to legitimately fight inflation. They have to raise interest rates above the rate of inflation so real interest rates are positive. Right now, real rates are at -5%, Meanwhile, the US government has to make massive spending cuts.
They’re not even considering that. Because right now, the way the government pays for spending is with inflation. Inflation is the stealth tax by which the government pays for everything. … How did we get all this government? We didn’t get it for free. We paid for it with inflation. They created money to pay for all this stuff. Now, if the government wants to get rid of inflation, they have to get rid of that money.”
That’s not happening. So, that brings us back to the choice.
Do we want to have a financial crisis, and cut government spending, and allow bankruptcies and defaults and all these losses, or, do we want to have inflation?”
Peter said they’ll pick inflation.
The reason the Fed is going to pick inflation is because that happens later. And, as we’ve seen, they can come up with a scapegoat — blame inflation on somebody else. They never accept responsibility for the inflation they create. So, if the Fed keeps hiking rates and everything implodes, well, hey, we did that to ourselves. If prices run out of control, we can blame OPEC. After all, they just cut production for oil. We could blame Putin. We could blame greedy corporations. We could blame capitalism, speculators. I mean, maybe they’ll even try to blame me. Who knows?!”
Social Security recipients will be getting a big raise in 2023. That’s good news if you’re receiving benefits from the program, but not so great if you’re hoping inflation will abate any time soon.
The Social Security Administration recently announced an 8.7% cost of living adjustment (COLA) for next year. That goes on top of a substantial 5.9% COLA for 2022. The 2023 increase is the largest in 40 years.
The COLA will translate to an additional $140 per month for the average Social Security recipient.
The last time Social Security recipients got a bigger raise was in 1981 when the COLA was 11.2%.
The increase will add about $100 billion of spending per year. The Social Security Board of Trustees said the trust fund can pay full benefits through 2035. After that, the board projects the program will be able to pay 80% of benefits.
A spokesperson for the Committee for a Responsible Federal Budget told CNBC the COLA could accelerate the depletion of the trust funds by at least one calendar year.
The Social Security Administration calculates the COLA based on a formula that uses the “Consumer Price Index for All Urban Wage Earners and Clerical Workers” (CPI-W). Like most government numbers, it doesn’t actually reflect the actual cost of living for most retirees. According to calculations done in 2020, Social Security benefits had lost 33% of their buying power since 2000. And that was in the era of “low” inflation.
This underscores a couple of key points.
1. You can’t count on Social Security to actually secure you a comfortable retirement.
2. You need to plan to protect your wealth from the persistent, insidious erosion of inflation.
More bad news – the COLA increase could actually add to the inflationary spiral.
Peter Schiff talked about it during a recent podcast, pointing out that the people who receive this additional $100 billion will go out and spend it. In other words, the government will be handing out more money so people can cope with higher prices. But that will inevitably push prices higher.
People are supposed to cut back when prices go up. But if the government gives everybody more money to pay the higher prices. You’re just fueling the inflation, and it’s like a dog chasing its tail. You’re never going to catch it, which is why the government is never going to bring inflation down.”
In effect, the extra money will prop up demand, and possibly even increase it. Higher demand without corresponding higher supply inevitably means higher prices. That will likely be reflected in future CPI data.
Social Security faces another problem. With the labor force participation rate falling, there are fewer people paying into the system. As Peter pointed out, the system depends on younger people working and paying into the system in order to keep the Ponzi scheme going.
The problem is those young people aren’t there working. And in fact, older people are retiring earlier, and so we have this smaller labor force participation rate. So, the gap between what the government collects in Social Security taxes and what it’s spending in benefits is rising.”
No matter how you slice it, it’s clear the Social Security system isn’t solvent over the long term.
end
2. Lawrie Williams//Pam and Russ Martens/Jim Rickards/Mathew Piepenburg/Von Greyerz
Atlanta Fed hid his trades as the Fed rescued Wall Street
(Pam and Russ Martens)
Pam and Russ Martens: Atlanta Fed president hid his trades as Fed rescued Wall Street
Submitted by admin on Mon, 2022-10-17 11:09Section: Daily Dispatches
By Pam and Russ Martens Wall Street on Parade Monday, October 17, 2022
It was one year ago that Wall Street On Parade raised a multitude of red flags about Raphael Bostic, the president of the Federal Reserve Bank of Atlanta. We have published the entirety of that article below so that our readers can see just how long it took both Bostic and the Atlanta Fed to come clean with the American people about his trading on Wall Street.
On Friday, Bostic released a seven-page statement in which he owned up to the following: failing to list a multitude of trades that were conducted on his behalf by trading firms on Wall Street over a period of five years; failing to properly report income on his assets on his financial disclosure forms; trading during blackout periods when trading was barred by the Federal Reserve; and providing inaccurate values on his financial disclosure forms. The upshot was that Bostic had to restate his financial disclosure forms for the entire five-year period he has filed them at the Atlanta Fed, 2017 through 2021.
If a publicly-traded company had to restate its earnings and admit that it had lied to the American people for five straight years, you can bet that the CEO and CFO would be fired in short order by the Board of Directors. But the Board of the Atlanta Fed is sticking with Bostic — at least for now. …
This illiquid Dollar, as argued since the first repo crisis of late 2019, combined with a now weaponized US Dollar on the backs of intentionally rising rates by a cornered and Volcker-wannabe Fed, all converge to spell short-term power for the Greenback and longer-term misery for just about every other asset class and economy in a now openly fractured global financial system.
As to the stark reality/risk of this illiquid Dollar, rather than just say “we told you so,” it would be better to “re-show-you so” by making specific reference to a prior report published in December of 2021.
Since penning that report just over 10 months ago, it’s worth revisiting the implications of an illiquid Dollar and the financial crisis of which we warned then and now find ourselves today.
Why Strong is Weak
It may intuitively feel good to see one’s currency beating all the others and hence puff American chests in a kind of proud admiration for the strongest currency on the block.
Nothing, however, could be further from the truth.
In fact, bragging about a strong US dollar in today’s global neighborhood would be akin to bragging about the healthiest (yet terminally ill) patient in an overcrowded hospice center.
In the end, of course, all fiat currencies revert to the value of their paper, which as Voltaire reminds, is zero.
Or as J.P. Morgan warned years ago, gold is the only money, the rest is debt.
But I digress…
In simplest terms, the strong US Dollar is only relatively strong because every other currency is tanking faster by the second, and this collective spiral is a direct result of the rising US Dollar exporting its inflation to its neighbors and using the bullying power of its world reserve status to weaken, well…the world.
Let’s explain/dig in.
How We Got Here
So, how did we, and the rest of the world’s tanking currencies, get to this embarrassing as well as fatal turning point?
Again, and despite trillions in printed/mouse-clicked US Dollars, much of those dollars are all tangled up in the morass (or “milkshake” aka Brent Johnson) of a highly illiquid derivatives market and increasingly illiquid Euro Dollar market.
As we indicated then:
“As Egon von Greyerz and I have said many times, the first overt signs of this danger in the cash-poor (i.e., illiquid) market reared its ‘repo head’ in September of 2019.
This [repo illiquidity] was a neon-flashing signal of long-term trouble ahead. And it had nothing to do with COVID…
Informed investors in the autumn of 2019 had sifted through all the confusing minutia and noise behind the September panic in the otherwise open-fraud scheme that is the U.S. repo market (i.e., private banks levering GSE deposits for guaranteed payouts from Uncle Sam which the U.S. taxpayer funds).
Despite all this noise, and despite being completely ignored (and deliberately downplayed) by an otherwise teenage-savvy mainstream financial media, the entire repo story simply boiled down to this: There weren’t enough available dollars to keep it (and the banks) going.
As a result, the 2019 Fed printed more dollars and immediately dumped a $1.5 trillion rollover facility into the repo pits.
Much, much more followed.”
And boy did it follow.
As recently reported, the Fed has already begun daily rollover liquidity boosts of over $2T in overnight money-market loans to the increasingly illiquid reverse repo swamp.
This is basically “backdoor QE” and serves as just another sign of a USD-addicted system with a never-ending survival thirst for less and less available (and hence more expensive) Dollars.
The Euro Dollar: All Tangled Up in Blues…
The other skunk in the illiquid Dollar woodpile was what we called the “ticking timebomb” of the misleadingly-named ‘Euro Dollar’ market, discussed as follows:
“In fact, Eurodollars have been floating around the world in greater force since the mid-1950s.
But banks (and bankers) always come up with clever ways to make simple [and liquid] Eurodollar transactions complex [and illiquid], as they can easily hide all kinds of greed-satisfying and wealth-generating schemes behind such deliberate Eurodollar complexity.
Specifically, rather than foreign banks using U.S. Dollars overseas (i.e., Eurodollars) to make simple, direct loans to corporate borrowers that can be easily tracked and regulated on the asset and liability columns of offshore bank balance sheets, these same bankers have spent the last few decades getting more and more creative with the Eurodollar – which is to say, more and more toxic and out of control.
Rather than using Eurodollars for direct loans from Bank “X” to Borrower “Y,” offshore financial groups have been busy using these Eurodollars for complex inter-bank borrowing, swap schemes, futures contracts, and levered derivative transactions.
Tangled Dollars = Unusable, Unavailable and Illiquid Dollars
All of this scheming, leverage and swapping boils down to not enough available (i.e., liquid) USDs in a global financial system in which nearly everything—from debt, to oil to derivatives—still has to be paid in increasingly scarce and hence increasingly expensive Dollars.
In addition to this twisted, illiquid and over-levered swamp, the USD rises even higher on Powell rate hikes, all of which combine to force the world’s other currencies to fall.
Why?
Because other countries and central banks have no choice but to swallow/import USD inflation, monetary policy and American political self-interest. Indeed, with financial allies like the U.S., who needs enemies?
Whenever the Fed, for example, prints more of the world reservecurrency or raises its interest rate, the rest of the world, which is tied to that currency, is forced to react—i.e., debase, hike and suffer.
We remind that nearly $14T in USD-denominated debt is owed by both emerging market and developed market economies.
As the USD rises in strength on the back of Powell’s impossible Volcker-revival and tangled derivatives, other Dollar-desperate nations from Argentina to Japan find themselves with not enough Greenbacks to pay their debts or settle trades, wires and oil purchases, which thus forces them to print (i.e., debase) more of their local currencies to make USD-denominated payments.
But Japan takes the cake for debasing its own currency all on its own, as no nation has ever loved a money printer and currency-debaser more.
This might explain why Japan is leading the charge in dumping its USTs into the FOREX markets, which only adds more pressure to rising yields and hence rising rates.
Thanks Kuroda—just one more central banker with a mouse-clicker gone mad… Perhaps he’ll be next in line for a Nobel Prize?
But Japan is not alone, as other nations dump the once sacred UST just to keep their currencies afloat…
In short: The strong USD is crippling the word, and that world, as we’ve written numerous times, will be de-dollarizing at a steady and irreversible pace.
No shocker there. At some point, Dollar-indebted nations crack and this twisted global game ends in a credit crisis for the history books.
Other Domino Effects of the Illiquid Dollar
It’s also worth noting that a current and temporarily strong USD effectively knee-caps US exports, as anything that is actually produced in the USA is now far more expensive and hence less competitive abroad, further adding to US trade deficits (not to mention budget deficits) in a world marching toward a financial cliff.
As importantly, as the USD rises in a new environment of rising rates and less liquid dollars, commercial banks in the US (10X levered) and in Europe (20X levered) are exploiting this higher rate policy to de-lever their derivatives exposure, which squeezes an already fatally toxic $2 quadrillion derivatives market, thereby making that ticking timebomb one tick closer to full implosion.
So, no, a strong and illiquid Dollar (world reserve currency) is hardly good for America, the markets or the world. It’s a poison rather than inflation-killer.
How to Fix the Poison?
For those waiting for the Fed to fix the morass we now find ourselves, there is no miracle cure ahead but merely a choice among poisons.
Pick Your Poison
As we’ve warned numerous times, the Fed is caught between a rock and hard-placeof its own profoundly inept design.
Should Powell continue his open ruse to allegedly “fight inflation” (which is 50% unreported anyway) using rising rates, then the USD and DXY will keep rising until the global (and debt-driven) economy completely buckles under the expensive weight of unpayable (and dollar-denominated) IOU’s.
Meanwhile, truth-allergic (as well as history-blind and math-inept) politicos will scramble from one government-complicit, PRAVDA-like propaganda platform to the next blaming the looming credit and currency implosion they engineered on a virus, a Vladimir, an oil well or a coal plant.
However, once the US policy makers admit we are in a recession, there will be no way to fight that recession (and the additional $300B in interest expenses owed for every 1% rate hike) without mouse-clicking more USDs and hence forcing the Dollar and rates down rather than up, as no recession in history has ever been defeated with high rates and a roaring currency.
Alas, what is high today will be low tomorrow, and the Fed (controlling a US economy driven by over 91T in combined public, household and corporate debt and a 125% public debt to GDP ratio) will have to choose between saving the bond and stock markets or killing its currency.
That is, the Fed will eventually (don’t ask me when) join the ranks of the UK, Japan and other nations forced to revert/pivot toward their smoking money printers.
Pivot Point?
For now, I still see Mr. Powell heading toward in inevitable (though not imminent) pivot from hawk to dove once credit markets and economies are in even more peril than their press secretaries can deny.
Again, lack of USDs in general (and GDP growth in particular) has already forced the Bank of England to confess its mouse-click/QE addiction, and just recently the Swiss National Bank took a $3.3 billion swap line from the Fed to give its central bank more of those otherwise scarce and expensive USDs.
In the interim, the deliberate efforts by the Fed to engineer a painful recession after they engineered the greatest/grossest asset bubble (and wealth transfer) in history can only be seen as either intentionally evil or unpardonably stupid.
Pick your own verdict. I’d vote for both…
At that pivot point, the Dollar will fall, inflation will rise and stagflation will become the new normal for many years to come, for it’s also worth noting that no modern nation has ever enjoyed a “softish-landing” (quoting Powell) in a recessionary backdrop in which inflation was greater than 5%–and we are already far ahead of that embarrassing and central-bank-created marker.
So, and again, pick your poison: Depression or Inflation? Dead market or dead currency?
A Prize for the Guilty?
As for this current and one-way trip toward global ruin, we can thank Mr. Powell (as well as Bernanke, Greenspan and Mrs. Yellen), none of whom deserve a Nobel Prize, and yet the fact that Bernanke (who gave Japan its QE and Yen-destroying playbook in the late 80’s) now has such a prize is just further proof that this rigged to fail system has completely lost any mooring to sanity, honesty, ethics or economic decency.
Bernanke’s “nobel/noble” policy is the equivalent of buying one’s son a home with an Amex card and then sending the invoice to the grandson.
In short, Bernanke holding a Nobel Prize makes as much sense as Bernie Madoff winning “trader of the year”—but then again, neither ethics nor truth ever stopped Madoff from becoming the NASDAQ’s chairman…
I can’t help but think of La Rochefoucauld’s maxim that “the highest offices are rarely, if ever, served by the highest minds…”
We’ve written too many articlesand books to make the Fed’s guilt any more clear today than it already was yesterday.
As for debt-soaked, Frankenstein markets now reeling under rising rates and ever scarcer Dollars, we are nowhere near a bottom and no way out of the woods of ever more volatility to come.
And as for Gold…
As for gold, it rises as fiat currencies tank. For now, the relative and short-lived power of the Fed’s rising rates has been a tailwind to the Greenback and thus a headwind to USD-priced gold.
For other countries like Japan or the UK, however, their central banks simply can’t afford the same rate hikes which the Fed’s suicidal reserve eminence allows, so the gold price in the Yen is rising as the purchasing power of the Yen is falling…
…and the same is true for the tanking British pound and rising gold price there:
But like Japan and the Bank of England, every other major central bank from the ECB onward will need to print more local currencies to keep their bonds from tanking and yields from spiking…
Despite its world reserve status, the US Treasury markets face a similar fate and the hard math points toward more inevitable mouse-click QE from the Fed to purchase its own debt.
This makes a tanking USD plain to see coming, and hence gold’s historical USD rise equally plain to predict.
In the interim, the LBMA and COMEX markets are using forward contracts to force gold down in pricing so they can take physical delivery for themselves before the metals skyrocket in USD.
Smart money is catching on, as flows out of paper gold and into physical gold mark a new direction.
For informed investors, now is the value window to do the same with physical gold.
Unfortunately, and as in every asset class and historically-confirmed bubble, the common psychology is to buy high and sell low rather than buy low and sell high.
Informed gold investors, however, are not making this human-all-too-human error as the world tilts each day toward dying paper and rising metals.
Unless, of course, you still think the Fed has your back?
Jeeeessshhhhh.
3.Chris Powell of GATA provides to us very important physical commentaries
China’s huge Zijin Mining to buy Iamgold’s Rosebel gold mine in Suriname. It is not a big deal
(Reuters)
China’s Zijin Mining buys Iamgold’s Rosebel gold mine in Suriname
Submitted by admin on Tue, 2022-10-18 21:14Section: Daily Dispatches
Iamgold Shares Surge on Sale of Suriname Mine to China’s Zijin Mining
By Ruhi Soni Reuters via Nasdaq.com Tuesday, October 18, 2022
Canadian gold miner Iamgold Corp. shares surged 16% today after it decided to sell 95% stake in Rosebel Gold Mines unit in northeastern Suriname to China’s Zijin Mining Group Co. Ltd. for about $401 million.
The Toronto-based company said the proceeds from the sale will be used to construct its flagship Cote Gold project in Canada so that it can stay on track to begin production in early 2024.
The Rosebel Gold Mine unit holds a mine in Suriname of the same name as well as a 70% interest in the Saramacca Mine, Iamgold said, adding that the country’s government will continue to hold the remaining 5% interest in the unit. …
Correction – no lead in the US, and only 202 tons of zinc in US, which is in New Orleans.
it gets worse
The only aluminum in US warehouses is 7,000 tons and change in Toledo, but not a single pound in the eligible category. This is all going to hit after the election. BB
end
COMMODITIES IN GENERAL/
END
END
6.CRYPTOCURRENCIES
7. GOLD/ TRADING
Your early currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:30 AM
ONSHORE YUAN: CLOSED DOWN 7.2278
OFFSHORE YUAN: 7.2642
SHANGHAI CLOSED DOWN 36.58 PTS OR 1.19%
HANG SENG CLOSED UP 403.30 OR 2.38%
2. Nikkei closed UP 101.24 PTS OR 0.37%
3. Europe stocks SO FAR: MOSTLY RED
USA dollar INDEX DOWN TO 112.72/Euro FALLS TO 0.9774
3b Japan 10 YR bond yield: RISES TO. +.249/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 149.65/JAPANESE YEN COLLAPSING AS WELL AS LONG TERM YIELDS RISING BREAKING THE JAPANESE CENTRAL BANK.
3c Nikkei now ABOVE 17,000
3d USA/Yen rate now well ABOVE the important 120 barrier this morning
3e Gold DOWN /JAPANESE Yen DOWN CHINESE YUAN: DOWN -// OFF- SHORE: DOWN
3f Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. EIGHTY percent of Japanese budget financed with debt.
3g Oil DOWN for WTI and DOWN FOR Brent this morning
3h European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund UP TO +2.352%***/Italian 10 Yr bond yield RISES to 4.752%*** /SPAIN 10 YR BOND YIELD RISES TO 3.51%…** DANGEROUS//
3i Greek 10 year bond yield RISES TO 5.05//
3j Gold at $1634.10//silver at: 18.44 7 am est) SILVER NEXT RESISTANCE LEVEL AT $30.00
3k USA vs Russian rouble;// Russian rouble UP 0 AND 21/100 roubles/dollar; ROUBLE AT 61.37//
3m oil into the 83 dollar handle for WTI and 90 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 149.65DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the FRANC. It is not working: USA/SF this 1.0034–as the Swiss Franc is still rising against most currencies. Euro vs SF 0.98044well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
USA 10 YR BOND YIELD: 4.079% UP 8 BASIS PTS…GETTING DANGEROUS
USA 30 YR BOND YIELD: 4.080% UP 6 BASIS PTS//
USA DOLLAR VS TURKISH LIRA: 18,59…GETTTING DANGEROUS
GREAT BRITAIN/10 YEAR YIELD: 4.05%
end
Overnight: Newsquawk and Zero hedge:
FIRST, ZEROHEDGE
Futures Fumble 1% Gain, Turn Sharply Lower As Yields, Dollar Soar
WEDNESDAY, OCT 19, 2022 – 08:08 AM
US stock futures erased overnight gains of over 1% as worries about the impact of scorching inflation and a looming recession took the shine off a strong start to the corporate earnings season. Contracts on the S&P 500 dropped 0.4% in an extremely illiquid session at 7:15 a.m. in New York after earlier rising as much as 1.1%. Nasdaq 100 futures were also down 0.4%, despite a boost from a better-than-expected report from Netflix which sent the stock soaring 13% in premarket trading.
Behind the sudden, violent slump is today’s renewed surge in interest rates which pushed the 10Y Yield to 4.10%, the highest level since October 2008, potentially driven by news that the BOE would launch gilt sales on Nov 1.
A surge in the dollar sparked by a plunge in sterling, which tumbled after soaring food prices drove UK inflation back into double digits in September, matching a 40-year high of 10.1% and intensifying pressure on the central bank and Liz Truss’s government to act. Gilts were broadly lower weighing on rates sensitive sectors like banks, property and construction and retail. The result is that UK equities dropped following four days of gains.
In premarket trading, Netflix soared as much as 14% in premarket trading, set for its biggest jump since January 2021, after the video streaming company handily beat estimates for paid subscribers, signaling the worst of the slowdown is likely over. Shares of other video-streaming companies are rising after Netflix’s quarterly results reassured investors that its business was back on track. Walt Disney +2.8%, Roku +3.7%, Warner Bros Discovery +1.7%, fuboTV +3.4%. Bank stocks are lower in thin premarket trading Wednesday, putting them on track to snap a two-day winning streak. In corporate news, Mitsubishi UFJ Financial Group is evaluating an acquisition of some loan portfolios from Credit Suisse to expand its business in the US. HSBC has been reprimanded by a UK watchdog for violating environmental advertising rules, after it sought to depict itself as a green bank in a set of posters. Here are other notable premarket movers:
United Airlines shares jump 7.1% in US premarket trading Wednesday following earnings that beat estimates, with analysts saying results and outlook are impressive on strong demand, better costs. Here’s what they are saying:
Lam Research leads fellow chip-tool makers higher in premarket trading after ASML said its fourth-quarter sales would likely be better than estimates, driven by strong demand for its advanced chip-making machines. Lam Research (LRCX US) +3.1%, Applied Materials (AMAT US) +1.7% and KLA (KLAC US) +2%
Olaplex shares plummet 42% in premarket trading after the hair-care products company slashed full-year forecasts due to slowing sales and announced the departure of its COO Tiffany Walden.
Evercore ISI cuts Best Buy, Lowe’s, Advance Auto and Petco Health & Wellness to in-line from outperform in note on Wednesday. All the stocks drop in premarket trading. Best Buy (BBY US) falls 1.6%, Lowe’s (LOW US) -1.1%, Advance Auto (AAP US) -1.1%, Petco (WOOF US) -3.2%
Keep an eye on Polaris as the stock was cut to neutral from buy at Citi as the broker flags retail environment being “substantially worse than previously anticipated” after it made checks with the company’s off-road vehicle dealers.
Intuitive Surgical shares jumped 7.4% in postmarket trading on Tuesday after the company posted revenues and adjusted earnings per share for the third quarter that were higher than consensus analyst estimates.
Upbeat company results, cheaper valuations and UK policy reversals have helped buoy risk appetite in recent sessions. At the same time, investors are having to keep track of weakness in the global economy and the impact of persistent inflation on decisions by policymakers at the Federal Reserve and other central banks.
Indeed, US stocks have had a roller-coaster October so far as investors swing between fears about a hawkish Federal Reserve and optimism over early third-quarter reports that have showed signs of resilience to higher prices. While a Bank of America survey showed full capitulation among stock investors, strategists have warned that the uncertain macroeconomic outlook could fuel further declines, according to Bloomberg.
“While it looks like capitulation, we probably have not seen a bottom yet,” said Randeep Somel, a portfolio manager at M&G Investments. “Companies’ earnings are not reflecting wider macro economic expectations yet, and that isn’t likely to dissipate until around early next year once we got through what is likely to be a rough winter,” he said on Bloomberg TV.
Quantitative strategists at Citigroup Inc. said US stocks were pricing in the highest odds of a recession than any other asset class, but still could be poised for more losses. “US equities have priced the most (but not enough) recession risk, and earnings estimates have further to adjust,” strategists including Alex Saunders wrote in a note dated Oct. 18 (he must be ignoring commodities, which are pricing in a global depression).
“US equities have priced the most (but not enough) recession risk, and earnings estimates have further to adjust,” strategists including Alex Saunders wrote in a note. “US bonds have priced the least risk, but it will take some time before bonds react to recession risks given the hawkish Fed.”
European stocks struggled to eke out a fifth day of gains as most sectors decline; real estate, retail and utilities drop, while tech and insurance outperform. Euro Stoxx 50 rises 0.2%, paring earlier gains; Stoxx 600 is down 0.2%. IBEX lags, dropping 1%. Utilities stocks fell, led by German names, after Handelsblatt reported that the German Economy Ministry is planning to cap electricity prices along the lines of the proposals made to cap gas prices. The sector is among the worst-performing groups on the broader gauge, down 1.1%, with Encavis, RWE and BKW all down at least 4.5%. In Germany’s plan, utilities will have to offer relief for consumers on a base contingent designed to encourage energy saving, according to the report
Earlier in the session, Asia stocks fell, with shares in Hong Kong dropping the most in the region as the maiden policy speech by the territory’s leader failed to ease concerns about China’s earnings outlook and rising mainland Covid cases. The MSCI Asia Pacific lost as much as 0.8%, erasing an earlier gain, as shares of technology companies such as Alibaba, Tencent and TSMC weighed. A selloff in consumer stocks dragged down Hong Kong and China gauges as a plan unveiled by Chief Executive John Lee to woo back foreign talent and ease housing woes failed to offset concerns about earnings and Covid. Benchmarks in Japan and Australia rose in tandem with gains in Wall Street. Read: HK Developers Drop as Stamp Duty Rule Disappoints: Street Wrap Most Asia fund managers in a survey by Bank of America expect weaker corporate profits in the region during the next 12 months, with net 72% of the view that consensus estimates for earnings per share growth are too high. It’s been almost a year since Bitcoin hit a record. Where do you see it going from here? Fill out our survey. “Global growth expectations are shrouded in pessimism but improving on the margin for China,” the survey report said. “However, investors are wary that the continued pursuit of a zero-Covid strategy could pour cold water on their fledgling hope for a China recovery.” China’s intermittent lockdowns continue to weigh on sentiment, with the ongoing party congress in China offering little hope to investors and traders assessing the impact on corporate profits in the latest results season. The MSCI Asia gauge is trading near April 2020 levels after dropping more than 28% this year
Japanese stocks extended their advance to second day, driven by gains in information companies and machinery makers. The Topix rose 0.2% to 1,905.06 as of 3 p.m. close in Tokyo, while the Nikkei 225 advanced 0.4% to 27,257.38. SoftBank Group contributed the most to the Topix’s gain, increasing 3.7%. Out of 2,166 stocks in the index, 1,376 rose and 674 fell, while 116 were unchanged.
Australian stocks edged higher, with the S&P/ASX 200 index rising 0.3% to close at 6,800.10 as investors digested quarterly output reports from commodity producers. All sectors gained except for energy and technology. Banks and industrials contributed the most to the gauge’s advance. In New Zealand, the S&P/NZX 50 index rose 0.6% to 10,916.65.
Indian stocks indexes rose for the fourth straight session before giving away the majority of gains, dragged by the rupee’s slide against the dollar. The S&P BSE Sensex rose 0.3% to 59,107.19 in Mumbai, while the NSE Nifty 50 Index advanced 0.1%. The gauges rose as much as 0.7% before paring the advance in the last hour of trading. For the week, they are up about 2% each. The Indian rupee tumbled to a record, declining to 82.98 against the greenback in late trading, as the central bank was seen moving away from supplying dollars. The looming expiry of weekly derivative contracts also weighed on local shares. Ten of the 19 sector sub-gauges compiled by BSE Ltd. advanced today, led by energy companies, while utilities and power firms were the worst performers. “Domestic institutions have been strong buyers in the market over the last week, as 2QFY23 results have come in line or stronger than expected,” S Hariharan, head of institutional equity at Emkay Global Financial, said.
In FX, the Bloomberg dollar spot index spiked 0.3% as the greenback rose against all of its Group-of-10 peers apart from the New Zealand dollar; the yen tumbled to a fresh 32 year low of 149.70 against the dollar while the pound slumped below $1.13. The euro slumped to almost $0.98. The shift in the euro’s volatility term structure shows that traders are following central banks into being more data dependent than before. Australian and New Zealand dollars trim intraday gains alongside similar moves in US futures.
In Japan, authorities continued their jawboning of the yen, with Finance Minister Shunichi Suzuki saying he is increasing the frequency of monitoring foreign-exchange markets. The currency hovered above 149 per dollar. The 10-year government bond yield rose above the 0.25% upper limit of the central bank’s target range, a breach that’s likely to prompt the Bank of Japan to step up bond purchases to limit the advance.
“The outlook for the UK is very, very difficult and certainly when focusing on our asset allocation it’s predominantly in the US where we have much higher conviction and certainty of outcome,” Grace Peters, JPMorgan Private Bank’s head of investment strategy, said on Bloomberg Television.
In rates, Treasuries were cheaper across the curve with losses led by belly, cheapening 2s5s30s spread by 3bp into early US session. US yields cheaper by nearly 7bp across belly of the curve, flattening 5s30s spread by almost 3bp following three successive steepening sessions; 10-year around 4.09%, cheaper by ~8bp on the day. US coupon issuance resumes with $12b 20-year bond reopening; WI yield near 4.34% is above all auction stops since the May 2020 reintroduction of the tenor and ~52bp cheaper than September auction, which stopped through by 1.3bp
Front-end bund yields rose by 12bps as the curve bear- flattened after Germany’s Finance Agency said it will increase the amount of securities it can lend to traders in the repo market by €54b, a move strategists say will help ease a collateral squeeze that has plagued the debt market in recent months. Bunds underperform gilts and USTs. German 10-year yield is up 7 bps to 2.35%, while gilts 10-year yield is up 3bps to below 4% and Treasuries 10-year yield climbs ~5bps to above 4%. Most UK bonds fell, while the pound dropped as much as 0.6% after data showed UK CPI rose 10.1% last month from 9.9% in August, exceeding economists expectations of 10% and adding to pressure on policy makers to lift the key rate significantly next month. The bank of England also confirmed that it will start selling down its portfolio of gilts.
In commodities, oil rose amid concerns that the European Union’s latest sanctions on Russian fuel could exacerbate the market tightness that the US is trying to alleviate with additional sales. The Biden administration will announce Wednesday a plan to release 15 million barrels from US emergency oil reserves in an effort to ease high gasoline prices. WTI and Brent Dec futures are firmer intraday after yesterday’s decline, which saw Brent dip under USD 90/bbl but settle at the figure. LME metals are mostly softer amid the firmer Dollar and risk aversion, with 3M copper extending its losses under USD 7,500/t. US President Biden will lay out plans on Wednesday to continue using the SPR to gain more stability in gas prices and will reiterate that gasoline company profits are too high and should be returned to consumers, according to a senior administration official. Furthermore, the Biden administration agreed to make future oil purchases to refill reserves at prices at or below USD 67.00-72.00/bbl, while President Biden will announce 15mln additional barrels for delivery from SPR in December, extending the initial timeline and completing the 180mln commitment. Spot gold trades lower intraday and back under the USD 1,650/oz mark as the Dollar picks up in pace.
Japan plans to further loosen crypto rules as soon as December “by making it easier to list virtual coins, potentially boosting the country’s allure for Binance and rival exchanges”, according to Bloomberg.
Looking to the day ahead now, data releases include the UK and Canadian CPI readings for September, along with US housing starts and building permits for September. From central banks, the Fed will release their Beige book, and we’ll also hear from the Fed’s Kashkari, Evans and Bullard, the ECB’s Centeno and Visco, and the BoE’s Cunliffe and Mann. Finally, earnings releases include Tesla, Procter & Gamble and Abbott Laboratories.
Market Snapshot
S&P 500 futures down 0.2% to 3,726.50
STOXX Europe 600 down 0.4% to 398.38
MXAP down 0.8% to 137.80
MXAPJ down 1.1% to 445.81
Nikkei up 0.4% to 27,257.38
Topix up 0.2% to 1,905.06
Hang Seng Index down 2.4% to 16,511.28
Shanghai Composite down 1.2% to 3,044.38
Sensex up 0.2% to 59,077.34
Australia S&P/ASX 200 up 0.3% to 6,800.06
Kospi down 0.6% to 2,237.44
German 10Y yield up 3% to 2.354
Euro down 0.3% to $0.9826
Brent Futures up 0.6% to 90.59
Gold spot down 0.7% to $1,640.03
U.S. Dollar Index up 0.25% to 112.42
Top Overnight News from Bloomberg
Embattled UK Prime Minister Liz Truss faces a brewing parliamentary rebellion if she is forced to abandon a key Conservative manifesto commitment on pensions as part of a frantic austerity drive
Record-low demand for German bonds at a government auction suggests investors are getting picky as countries ready a wall of sales and speculation mounts that the ECB will start reducing the bonds it’s amassed on its balance sheet over the years
Bank of Japan Board Member Seiji Adachi reinforced the central bank’s message that it won’t adjust policy in response to the rapid weakening of the yen, pushing back against persistent market speculation
The value of US Treasuries owned by Japanese investors slid by almost 3% in August to the lowest level in three years as a slump in global debt markets hammered down prices
A number of hedge funds are starting to come around to the idea that it may be time to buy the beaten-up pound and gilts. Others say investors should remain cautious. Great Hill Capital in New York sees opportunities to go long sterling after the currency’s recent wild ride. Blue Edge Advisors Pte sees positives in longer- maturity gilts as global growth slows
A more detailed look at global markets courtesy of Newsquawk
Asia-Pac stocks were mixed following the choppy performance stateside where the major indices wobbled on news that Apple cut iPhone 14 Plus production less than two weeks after its debut, but then recovered heading into the close and with futures underpinned after-hours after strong earnings and subscriber additions from Netflix. ASX 200 gained with outperformance in defensive sectors although the upside was contained by a lacklustre mood in miners after BHP’s quarterly output update which included higher iron output but also a severe drop in coal production. Nikkei 225 was led higher by notable strength in blue-chip names including SoftBank and Fast Retailing and with firm gains also in utilities and power stocks, while the latest commentary from BoJ board member Adachi echoed the central bank’s dovish message as he warned against a shift towards tightening and pushed back on responding to short-term FX moves with monetary policy. Hang Seng and Shanghai Comp. remained pressured amid COVID concerns and data uncertainty, while Hong Kong Chief Executive John Lee’s first annual Policy Address failed to inspire a turnaround despite the announcement of measures to support property, tech start-ups and attract foreign talent.
Top Asian News
Hong Kong Chief Executive John Lee said in his first annual Policy Address that national sovereignty and security are top priorities, while he also noted Hong Kong faces a “new chapter” of development and warned Hong Kong faces risks from global turmoil and Covid. Lee added that they will allow overseas talent to refund extra stamp duty on home purchases and will introduce a bill this year to exempt the stamp duty payable for transactions conducted by dual-counter market makers. Lee also stated the HKEX will revise main board listing rules next year to facilitate fundraising of advanced tech enterprises that have yet to meet the profit and trading record requirements, according to Reuters.
BoJ’s Adachi said monetary policy does not directly control FX and there are times FX moves rapidly short-term, while he added that responding to short-term FX moves with monetary policy would heighten uncertainty over BoJ’s guidance which is not good for the economy. Adachi also stated that inflation is starting to increase but he is not convinced yet that the BoJ’s target will be achieved in a stable and sustained manner. Furthermore, he said they must be cautious about shifting toward monetary tightening as downside risks to the economy are increasing and a shift to monetary tightening would weaken demand and heighten the risk Japan will revert to deflation, while the best approach now is to maintain easy monetary policy.
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Singapore’s COE Category B Bidding Rises to S$110,000
Equities in Europe trade mostly lower after initially opening modestly firmer across the board. Sectors overall are now mostly lower (vs a mixed open) with no overarching theme, with Tech, Banks, Media, and Insurance towards the top of the bunch whilst Real Estate, Utilities, Retail, and Basic Resources sit as the laggards. US equity futures are off best levels with the RTY lagging peers and the NQ slightly more cushioned following Netflix earnings. Click here and here for the Daily European Equity and Additional Opening News, which includes earnings from ASML & Nestle among others. Netflix Inc (NFLX) – Q3 2022 (USD): EPS 3.10 (exp. 2.13), Revenue 7.93bln (exp. 7.84bln). Q3 Net subscriber additions 2.41mln (exp. 1.07mln). Sees Q4 EPS USD 0.36 (exp. 1.20). Sees Q4 revenue USD 7.78bln (exp. 7.98bln). Sees Q4 streaming paid net change +4.5mln (exp. +3.9mln). Won’t provide paid membership forecasts from Q4. (PR Newswire) Shares rose 14.3% after-market, +13.8% in the pre-market
Top European News
Daily Mail’s Hodges understands UK PM Truss has been informed by Graham Brady the traditional threshold of letters for a leadership challenge has been breached. But he is insisting on a threshold of half the parliamentary party before acting.
UK Tory rebels were reported to have asked opposition Labour Party MPs to help them oust UK PM Truss as Tory backbenchers grow increasingly frustrated with the PMs leadership, according to The Telegraph.
Pensions could increase in line with earnings instead of inflation next year after UK PM Truss went back on her commitment to the pension triple lock, according to The Telegraph.
UK Chancellor Hunt met with Chairman of the 1922 Committee Brady on Tuesday afternoon which prompted further questions about the future of UK PM Truss, according to Sky News.
UK Chancellor is lining up taxes on energy companies and banks to fill a GBP 40bln UK fiscal hole, according to FT.
Germany is planning an electricity price cap along the lines of a gas cap, according to Handelsblatt; German Economy Ministry Draft: cabinet should discuss power and gas price breaks on November 18th, via Reuters.
FX
Franc flounders as Dollar rebounds alongside bear-steepening in US Treasuries, USD/CHF probes parity as DXY tops 112.500.
Sterling deflated irrespective of firmer than forecast UK inflation data on broader economic, fiscal and political concerns; Cable tests support around 1.1250 from a 1.1350+ peak.
Euro fades against Greenback and edges closer to 0.9800, Yen slips further through 149.00 in the ongoing absence of actual Japanese intervention and the Loonie treads cautiously between 1.3700-1.3800 parameters into Canadian CPI.
Antipodes fare better vs their US peer post-NZ inflation and pre-Aussie jobs as NZD/USD hovers near 0.5700 and AUD/USD just above 0.6300.
Japanese PM Kishida says no comment on FX; need to take appropriate action against excess FX volatility. Japan’s Finance Minister Suzuki says there is no change to the thinking on FX, in frequent communication with the MOF.
Fixed Income
Gilts dented post-CPI which topped 10%, though clawed back losses to mid-97.00; before further pressure on political updates and ahead of a later DMO outing.
Bunds and USTs under pressure in sympathy, with Bunds tacking the laggard mantel in wake the German FinMin increasing the size of outstanding bonds; yield above 2.30%
Stateside, USTs are moving in tandem with peers though magnitudes a touch more contained ahead of 20yr supply and Fed speak; curve mixed, overall.
German Finance Ministry says increased the size of 18 outstanding bonds by EUR 3bln each (total of EUR 54bln), via Reuters; increase will provide flexibility to cover financing needs during the energy crisis.
Commodities
WTI and Brent Dec futures are firmer intraday after yesterday’s decline, which saw Brent dip under USD 90/bbl but settle at the figure.
Spot gold trades lower intraday and back under the USD 1,650/oz mark as the Dollar picks up in pace.
LME metals are mostly softer amid the firmer Dollar and risk aversion, with 3M copper extending its losses under USD 7,500/t.
US Private Energy Inventory (bbls): Crude -1.3mln (exp. +1.4mln), Gasoline -2.2mln (exp. -1.1mln), Distillates -1.1mln (exp. -2.2mln), Cushing +0.9mln.
US President Biden will lay out plans on Wednesday to continue using the SPR to gain more stability in gas prices and will reiterate that gasoline company profits are too high and should be returned to consumers, according to a senior administration official. Furthermore, the Biden administration agreed to make future oil purchases to refill reserves at prices at or below USD 67.00-72.00/bbl, while President Biden will announce 15mln additional barrels for delivery from SPR in December, extending the initial timeline and completing the 180mln commitment.
Geopolitics
Russia says it is preparing to evacuate civilians from Kherson which comes as Ukrainian troops push closer to the city as part of a successful counter-offensive, according to AFP News Agency
Europe is planning to sanction a number of Iranian individuals and entities regarding arms sales to Russia, according to Politico citing diplomats/officials; adding, a list of sanctions has been prepared, aim is to be in agreement before Thursday/Friday
US, Britain and France plan to raise Iran’s arms transfers to Russia during closed-door UN security council meeting Wednesday, according to Reuters citing diplomats.
North Korea said it fired artillery shells on Tuesday to send a warning against South Korea’s military drills and it called on its ‘enemies’ to immediately stop causing military tensions, according to KCNA.
US Event Calendar
07:00: Oct. MBA Mortgage Applications -4.5%, prior -2.0%
08:30: Sept. Building Permits, est. 1.53m, prior 1.52m, revised 1.54m
Building Permits MoM, est. -0.8%, prior -10.0%, revised -8.5%
08:30: Sept. Housing Starts, est. 1.46m, prior 1.58m
Housing Starts MoM, est. -7.2%, prior 12.2%
14:00: U.S. Federal Reserve Releases Beige Book
DB’s Jim Reid concludes the overnight wrap
Our wayward but lovely dog Brontë doesn’t get so much of a mention these days but I have to say that she was taken to the Vet yesterday and although she got a clean bill of health the report back from my wife shocked me. She’s 8 in a couple of months and the Vet said we will soon have to move her to geriatric food portions. When my wife told me it actually made me quite upset. Firstly because it seems like only yesterday she was a puppy (maybe because she still acts like one), and secondly in dog years she’s not much older than me. If anyone tries to put me on geriatric food portions soon they’ll be trouble!
There’s been a bit of feast and famine in markets over the last 24 hours, with both equities and bond yields seeing sizeable intra-day swings without obvious catalysts. The S&P 500 fell from an intraday high of +2.31% just after the open to close “only” close +1.15% higher but was then buoyed after the bell by Netflix who reported that subscriber growth topped estimates, leading to $3.10 EPS versus $2.12 expectations. Their equity jumped in after-hours trading, ultimately settling around +14% higher, reversing the -1.73% decline in normal trading. This has helped S&P 500 and the Nasdaq 100 futures be +0.79% and +1.19% higher this morning as we go to print.
Prior to this, equities generally had a positive day yesterday in spite of the volatility, with the S&P 500 posting a broad-based advance that saw more than 89% of the index move higher on the day, whilst Europe’s STOXX 600 (+0.34%) advanced for a 4th day running. Megacap tech stocks had lagged behind ahead of the Netflix report, with the FANG+ index just (+0.24%) after dipping into the red late in the New York afternoon. Netflix itself was one of the biggest decliners in the S&P and the biggest decliner in the FANG+ at -1.73% before their earnings. The after-hours Netflix news followed a number of other releases, including Goldman Sachs (+2.33%) where trading revenue of $6.2bn beat estimates, alongside Johnson & Johnson (-0.35%) who cut their sales forecast for the year. Today’s highlights include Tesla who’ll be reporting after the close.
In fixed income the ranges were large even if closing levels weren’t much different. 10yr Treasury yields saw an intraday surge of more than +10bps around the time of the US open, before closing essentially unchanged. In Asia, US 10yr yields are +1.5bps higher, trading just above 4%. Meanwhile in Europe, yields on 10yr bunds (+1.4bps), OATs (+0.8bps) and BTPs (+3.2bps) moved slightly higher but bunds traded it a 13.5bps range.
One thing possibly helping risk was the fact that global energy prices moved decisively lower yesterday, which also saw inflation breakevens decline across the big economies. Brent crude (-1.74%) fell back beneath $90/bbl intraday for the first time in a couple of weeks before closing at $90.03, which followed a Bloomberg report that there’d be another 10-15m barrels of oil released from the Strategic Petroleum Reserve. Even more strikingly, European natural gas futures (-12.37%) fell to a 4-month low of €113 per megawatt-hour, which comes as the long-range forecasts have suggested that we won’t be seeing the worst-case scenario of a cold winter in Europe, which in turn will reduce demand for heating. That’s a big boost to Europe on multiple levels, as lower prices mean that any measures to subsidise gas prices wouldn’t be as expensive as feared, whilst lower demand would reduce the risk of energy rationing or blackouts.
In terms of data, this is a big week for US housing and we got another glimpse yesterday of the continuing impact of rate hikes as mortgage rates have hit their highest level in over two decades. The US National Association of Home Builders’ market index fell to 38 in October (vs. 43 expected). That’s its lowest level in a decade with the exception of the pandemic months of April and May 2020, and continues its run of having fallen in every single month this year.
Here in the UK, the political situation remained incredibly volatile following the mini-budget U-turn, with constant press briefings about when Prime Minister Truss might be removed from office. The opinion polling remains dire for the government, with a YouGov poll yesterday showing that Truss had a net favourability rating of -70, which for reference is well beneath the -53 score for Prime Minister Johnson at the time of his resignation in early July. Strikingly, even if you just looked at those who voted Conservative at the last election, her net favourability was still at -51, with ratings that are deeply negative among every category of voters. We should hear from Truss in the House of Commons later for Prime Minister’s Question Time, so one that plenty of observers will be watching.
When it came to markets, the biggest story was an explicit pushback from the Bank of England on the FT’s report that the BoE were set to postpone the start of QT on October 31. We’d mentioned the report in yesterday’s edition, which saw equity futures move higher when it came out, but a BoE spokesperson said in the European morning that it was “inaccurate”. Gilt yields moved higher immediately afterwards, but by the close they’d moved lower, with the 10yr gilt yield down -2.2bps on the day. After Europe went home the BoE announced that QT/Gilt sales will commence from November 1st. So the earlier FT story proved to be inaccurate.
In the meantime however, sterling returned to being the worst-performing G10 currency again, closing down -0.33% against the US Dollar. This morning, sterling (+0.11%) is rebounding a little, trading at $1.1331 as I type. Keep an eye out for the latest UK CPI print shortly after we go to press as well, which is the last one ahead of the BoE’s next meeting a fortnight tomorrow. Our UK economist sees that returning to double-digits with a +10.0% reading, and he doesn’t expect it to fall out of double-digits until March 2023.
Asian equity markets are a little more mixed overnight. As I type, the Nikkei (+0.73%) and the Kospi (+0.18%) are trading in positive territory while the Hang Seng (-1.08%) is trading lower in early trade. Mainland Chinese stocks are also down with the CSI (-0.86%) and the Shanghai Composite (-0.51%) both in the red amid a lack of positive surprises from the 20th party congress.
Early this morning, the Bank of Japan (BOJ) Governor Haruhiko Kuroda in his speech to the parliamentary committee stated that the recent depreciation in the Japanese yen was sharp and one-sided and doesn’t bode well for the nation’s economy as it makes difficult for businesses to plan ahead.
In terms of yesterday’s other data, US industrial production came in on the upside with a +0.4% advance in September (vs. +0.1% expected), whilst the previous month’s contraction was also revised to a shallower -0.1% (vs. -0.2% previously). Separately in Germany, the ZEW survey’s current situation reading fell more than expected to -72.2 in October (vs. -68.5 expected), which is its lowest level since August 2020. However, the expectations component unexpectedly rose to -59.2 (vs. -66.5 expected), ending a run of 3 consecutive monthly declines.
To the day ahead now, and data releases include the UK and Canadian CPI readings for September, along with US housing starts and building permits for September. From central banks, the Fed will release their Beige book, and we’ll also hear from the Fed’s Kashkari, Evans and Bullard, the ECB’s Centeno and Visco, and the BoE’s Cunliffe and Mann. Finally, earnings releases include Tesla, Procter & Gamble and Abbott Laboratories.
AND NOW NEWSQUAWK
US futures bid, but off best; DXY takes 112.50 & debt under modest pressure – Newsquawk US Market Open
WEDNESDAY, OCT 19, 2022 – 06:30 AM
Equities in Europe are mostly lower despite initial positive performance; US futures bid, but shy of best.
European earnings include ASML & Nestle; NFLX +13% in pre-market following their after-hours update
Franc flounders as Dollar rebounds alongside bear-steepening in US Treasuries, USD/CHF probes parity as DXY tops 112.500.
Gilts dented post-CPI which topped 10%, though clawed back losses to mid-97.00; broader complex pressured, though similarly off worst.
WTI and Brent Dec futures are firmer intraday after yesterday’s decline, which saw Brent dip under USD 90/bbl but settle at the figure.
Looking ahead, highlights include Canadian CPI. Speeches from Fed’s Bullard, Evans & Kashkari; BoE’s Cunliffe & Mann; ECB’s Centeno & Visco. Supply from the US. Earnings from Tesla, P&G, Abbott
Equities in Europe trade mostly lower after initially opening modestly firmer across the board.
Sectors overall are now mostly lower (vs a mixed open) with no overarching theme, with Tech, Banks, Media, and Insurance towards the top of the bunch whilst Real Estate, Utilities, Retail, and Basic Resources sit as the laggards.
US equity futures are off best levels with the RTY lagging peers and the NQ slightly more cushioned following Netflix earnings
Click here and here for the Daily European Equity and Additional Opening News, which includes earnings from ASML & Nestle among others.
Netflix Inc (NFLX) – Q3 2022 (USD): EPS 3.10 (exp. 2.13), Revenue 7.93bln (exp. 7.84bln). Q3 Net subscriber additions 2.41mln (exp. 1.07mln). Sees Q4 EPS USD 0.36 (exp. 1.20). Sees Q4 revenue USD 7.78bln (exp. 7.98bln). Sees Q4 streaming paid net change +4.5mln (exp. +3.9mln). Won’t provide paid membership forecasts from Q4. (PR Newswire) Shares rose 14.3% after-market, +13.8% in the pre-market
Franc flounders as Dollar rebounds alongside bear-steepening in US Treasuries, USD/CHF probes parity as DXY tops 112.500.
Sterling deflated irrespective of firmer than forecast UK inflation data on broader economic, fiscal and political concerns; Cable tests support around 1.1250 from a 1.1350+ peak.
Euro fades against Greenback and edges closer to 0.9800, Yen slips further through 149.00 in the ongoing absence of actual Japanese intervention and the Loonie treads cautiously between 1.3700-1.3800 parameters into Canadian CPI.
Antipodes fare better vs their US peer post-NZ inflation and pre-Aussie jobs as NZD/USD hovers near 0.5700 and AUD/USD just above 0.6300.
Japanese PM Kishida says no comment on FX; need to take appropriate action against excess FX volatility. Japan’s Finance Minister Suzuki says there is no change to the thinking on FX, in frequent communication with the MOF.
Gilts dented post-CPI which topped 10%, though clawed back losses to mid-97.00; before further pressure on political updates and ahead of a later DMO outing.
Bunds and USTs under pressure in sympathy, with Bunds tacking the laggard mantel in wake the German FinMin increasing the size of outstanding bonds; yield above 2.30%
Stateside, USTs are moving in tandem with peers though magnitudes a touch more contained ahead of 20yr supply and Fed speak; curve mixed, overall.
German Finance Ministry says increased the size of 18 outstanding bonds by EUR 3bln each (total of EUR 54bln), via Reuters; increase will provide flexibility to cover financing needs during the energy crisis.
WTI and Brent Dec futures are firmer intraday after yesterday’s decline, which saw Brent dip under USD 90/bbl but settle at the figure.
Spot gold trades lower intraday and back under the USD 1,650/oz mark as the Dollar picks up in pace.
LME metals are mostly softer amid the firmer Dollar and risk aversion, with 3M copper extending its losses under USD 7,500/t.
US Private Energy Inventory (bbls): Crude -1.3mln (exp. +1.4mln), Gasoline -2.2mln (exp. -1.1mln), Distillates -1.1mln (exp. -2.2mln), Cushing +0.9mln.
US President Biden will lay out plans on Wednesday to continue using the SPR to gain more stability in gas prices and will reiterate that gasoline company profits are too high and should be returned to consumers, according to a senior administration official. Furthermore, the Biden administration agreed to make future oil purchases to refill reserves at prices at or below USD 67.00-72.00/bbl, while President Biden will announce 15mln additional barrels for delivery from SPR in December, extending the initial timeline and completing the 180mln commitment.
Daily Mail’s Hodges understands UK PM Truss has been informed by Graham Brady the traditional threshold of letters for a leadership challenge has been breached. But he is insisting on a threshold of half the parliamentary party before acting.
UK Tory rebels were reported to have asked opposition Labour Party MPs to help them oust UK PM Truss as Tory backbenchers grow increasingly frustrated with the PMs leadership, according to The Telegraph.
Pensions could increase in line with earnings instead of inflation next year after UK PM Truss went back on her commitment to the pension triple lock, according to The Telegraph.
UK Chancellor Hunt met with Chairman of the 1922 Committee Brady on Tuesday afternoon which prompted further questions about the future of UK PM Truss, according to Sky News.
UK Chancellor is lining up taxes on energy companies and banks to fill a GBP 40bln UK fiscal hole, according to FT.
Germany is planning an electricity price cap along the lines of a gas cap, according to Handelsblatt; German Economy Ministry Draft: cabinet should discuss power and gas price breaks on November 18th, via Reuters.
NOTABLE EUROPEAN DATA
UK CPI YY (Sep) 10.1% vs. Exp. 10.0% (Prev. 9.9%); MM (Sep) 0.5% vs. Exp. 0.4% (Prev. 0.5%)
UK Core CPI YY (Sep) 6.5% vs. Exp. 6.4% (Prev. 6.3%); MM (Sep) 0.6% vs. Exp. 0.5% (Prev. 0.8%)
EU HICP Final YY (Sep) 9.9% vs. Exp. 10.0% (Prev. 10.0%); X-&E Final YY (Sep) 6.0% vs. Exp. 6.1% (Prev. 6.1%)
NOTABLE US HEADLINES
Fed’s Kashkari (2023 voter) said the Fed won’t need to do as much with interest rates if they can get help from the supply side but without help from the supply side, the Fed would need to do more. Kashkari added that core inflation has not shown evidence of a peak and he is not ready to declare a pause in rate hikes until he sees some compelling evidence that core inflation has at least peaked although would be comfortable pausing once he has confidence inflation has peaked. Furthermore, Kashkari said he could easily see rates getting to mid-4% next year and if he doesn’t see progress on inflation, he doesn’t see why rates should not go higher.
CRYPTO
Japan plans to further loosen crypto rules as soon as December “by making it easier to list virtual coins, potentially boosting the country’s allure for Binance and rival exchanges”, according to Bloomberg.
GEOPOLITICS
RUSSIA-UKRAINE
Russia says it is preparing to evacuate civilians from Kherson which comes as Ukrainian troops push closer to the city as part of a successful counter-offensive, according to AFP News Agency
Europe is planning to sanction a number of Iranian individuals and entities regarding arms sales to Russia, according to Politico citing diplomats/officials; adding, a list of sanctions has been prepared, aim is to be in agreement before Thursday/Friday
US, Britain and France plan to raise Iran’s arms transfers to Russia during closed-door UN security council meeting Wednesday, according to Reuters citing diplomats.
OTHER
North Korea said it fired artillery shells on Tuesday to send a warning against South Korea’s military drills and it called on its ‘enemies’ to immediately stop causing military tensions, according to KCNA.
APAC TRADE
EQUITIES
APAC stocks were mixed following the choppy performance stateside where the major indices wobbled on news that Apple cut iPhone 14 Plus production less than two weeks after its debut, but then recovered heading into the close and with futures underpinned after-hours after strong earnings and subscriber additions from Netflix.
ASX 200 gained with outperformance in defensive sectors although the upside was contained by a lacklustre mood in miners after BHP’s quarterly output update which included higher iron output but also a severe drop in coal production.
Nikkei 225 was led higher by notable strength in blue-chip names including SoftBank and Fast Retailing and with firm gains also in utilities and power stocks, while the latest commentary from BoJ board member Adachi echoed the central bank’s dovish message as he warned against a shift towards tightening and pushed back on responding to short-term FX moves with monetary policy.
Hang Seng and Shanghai Comp. remained pressured amid COVID concerns and data uncertainty, while Hong Kong Chief Executive John Lee’s first annual Policy Address failed to inspire a turnaround despite the announcement of measures to support property, tech start-ups and attract foreign talent.
NOTABLE APAC HEADLINES
Hong Kong Chief Executive John Lee said in his first annual Policy Address that national sovereignty and security are top priorities, while he also noted Hong Kong faces a “new chapter” of development and warned Hong Kong faces risks from global turmoil and Covid. Lee added that they will allow overseas talent to refund extra stamp duty on home purchases and will introduce a bill this year to exempt the stamp duty payable for transactions conducted by dual-counter market makers. Lee also stated the HKEX will revise main board listing rules next year to facilitate fundraising of advanced tech enterprises that have yet to meet the profit and trading record requirements, according to Reuters.
BoJ’s Adachi said monetary policy does not directly control FX and there are times FX moves rapidly short-term, while he added that responding to short-term FX moves with monetary policy would heighten uncertainty over BoJ’s guidance which is not good for the economy. Adachi also stated that inflation is starting to increase but he is not convinced yet that the BoJ’s target will be achieved in a stable and sustained manner. Furthermore, he said they must be cautious about shifting toward monetary tightening as downside risks to the economy are increasing and a shift to monetary tightening would weaken demand and heighten the risk Japan will revert to deflation, while the best approach now is to maintain easy monetary policy.
i)WEDNESDAY MORNING// TUESDAY NIGHT
SHANGHAI CLOSED DOWN 36.58 PTS OR 1.19% //Hang Seng CLOSED DOWN 403.30 OR 2.38% /The Nikkei closed UP 101.24PTS OR 0.37% //Australia’s all ordinaires CLOSED UP 0.34% /Chinese yuan (ONSHORE) closed UP TO 7.2278 //OFFSHORE CHINESE YUAN UP 7.2642// /Oil DOWN TO 83.99 dollars per barrel for WTI and BRENT AT 90.71 / Stocks in Europe OPENED MOSTLY RED. ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST US DOLLAR/OFFSHORE WEAKER
2 a./NORTH KOREA/ SOUTH KOREA/
///NORTH KOREA/SOUTH KOREA/
end
2B JAPAN
3c CHINA
CHINA/USA/EUROPE//TAIWAN
Blinken believes that China wants to seize Taiwan on a much faster timeline. They need their semi conductor chip manufacturing.
(zerohedge)
Blinken: China Wants To Seize Taiwan On A “Much Faster Timeline” Than Previously Thought
TUESDAY, OCT 18, 2022 – 11:40 PM
China has made a decision to seize Taiwan on a “much faster timeline” than previously thought, Secretary of State Antony Blinken said on Monday after China’s leader Xi Jinping reiterated his intent to take the island, by force if necessary.
“There has been a change in the approach from Beijing toward Taiwan in recent years,” Blinken said in an event at Stanford University in California, according to Bloomberg.
The remarks from Biden’s top diplomat on Monday come as China holds its twice-a-decade Communist party congress, and were in response to Xi Jinping’s widely-watched, nearly two-hour-long speech on Sunday to say the “wheels of history are rolling on towards China’s reunification” with Taiwan. While peaceful means were preferable, Xi added, “we reserve the option of taking all measures necessary.”
According to Blinken, China has made a “fundamental decision that the status quo was no longer acceptable, and that Beijing was determined to pursue reunification on a much faster timeline.” He didn’t elaborate on the timing or provide other details.
Responding to Blinken’s remarks on Tuesday, Chinese Foreign Ministry spokesman Wang Wenbin criticized the U.S. for selling billions in advanced weapons to Taiwan and accused the Biden administration of encouraging the island’s move toward formal independence.
“Resolving the Taiwan question is a matter for the Chinese, a matter that must be resolved by the Chinese,” Wang told reporters at a regular briefing. “We are ready to create vast space for peaceful reunification, but we will leave no room for separatist activities in any form.”
As Bloomberg notes, although Biden administration officials have regularly accused China of eroding the balance of power in the Taiwan Strait, comments about Beijing’s intentions with regard to an invasion are less common.
Observers are highly sensitive to any remarks that might provide insights into how senior officials in Beijing or Washington view the potential for war over Taiwan — an event that would have enormous geopolitical and economic consequences, particularly given President Joe Biden’s repeated pledges that the U.S. would help defend the island.
The State Department didn’t respond to questions on Monday whether Blinken’s comments reflected any formal assessment that China has moved up its agenda for taking Taiwan – they probably didn’t and the comment was merely an off the cuff comment by an administration that has lost all control and is alienating virtually every foreign power, from the Russia-China axis, to all of OPEC+. In March of last year, Admiral Philip Davidson, then commander of the US Indo-Pacific Command, told the Senate Armed Services Committee that China wanted to take Taiwan “during this decade, in fact, in the next six years.”
end
CHINA/EUROPE/OIL
China is ready to supply Europe with oil once that embargo begins in December.
(Slav/OilPrice.com )
China’s Oil Imports Soar As Beijing Prepares To Supply European Fuel Demand
Crude oil imports into Asia jumped in September. Normally such news would spark hope for demand and, consequently, prices, but this time it’s more complicated. And it has less to do with Asian demand than demand in Europe.Oil imports in Asia rose by more than 2 million barrels daily last month, Reuters’ Clyde Russell reported in his latest column, noting that the bulk went to China and Singapore.
He then went on to point out that both China and Singapore had gone through refinery maintenance in August and utilization rates were up in September. On the one hand, it’s the normal preparation for winter. On the other, the EU has an embargo on Russian crude coming into effect in less than two months and then an embargo on fuels two months after that.
Europe is already grappling with a diesel shortage as it shuns Russian fuels ahead of the embargo and as the global supply of the fuel remains limited. This has contributed to fears of demand destruction by excessive prices, but it has also reinforced fears of a recession due to the fuel crunch.
The U.S. could maybe increase its fuel shipments to Europe, according to executives from major commodity trading houses quoted in a recent report by Energy Intelligence, especially since Russian fuels will be rerouted to other destinations, including Asia and South America, satisfying some of the demand there. And some of these Russian fuels will go to Europe but come from China.
It is a somewhat ironic twist in the Europe-Russia story that Russian oil will not literally stop flowing into Europe, whatever Europe does to stop that flow, even if it is willing to pay a steep price for it. As already evidenced by fuel flows from India to Europe, the latter has no problem with Russian refined products as long as they don’t come from Russia itself.
This will likely continue happening because whatever geopolitical games are being played, physical demand for oil products is likely to remain robust until prices become prohibitive. Even then, demand destruction will not happen overnight. A case in point is France, where strikes have paralyzed more than half of the country’s refining capacity, and yet people are queuing to fill up their tanks.
It is a double irony that the European Union might need to rely on China for its winter fuel supplies. After all, following the example of the U.S., the EU has also spoken against China’s rising domination of various global markets. It is not seen as a friend in Europe. Yet it is a vital supplier of commodities without which the EU will collapse.
What’s more, European countries might need to tap that lifeline sooner rather than later. Because the refiners’ strikes in France are not the only challenge for supply. In fact, this month will see the diesel shortage in Europe worsen as refineries enter into seasonal maintenance. This will take 1.5 million bpd in refining capacity off the market. Added to the French strikes, with no immediate end in sight, the diesel supply situation in the EU becomes quite tense, with limited fuel availability elsewhere as well. Except, that is, in China, by the look of it.
Bloomberg noted in a recent report that Chinese refiners had just been granted the biggest fuel export quotas since the start of the year. One reason for this is the still-floundering local demand growth after all the lockdowns. The other possible reason is the prospect of greater fuel demand in Europe for the abovementioned reasons.
“As long as the Chinese economy remains weak and product stocks are high, there are incentives for refiners to de-stock and export,” one researcher from the Oxford Institute of Energy Studies told Bloomberg.
It’s time for Europe to start hoping China’s economy remains weak.
end
4.EUROPEAN AFFAIRS//UK AFFAIRS
UK
Bank of England does not pivot: it confirms its gilt sales will begin on time, November 1. That is when the financial crisis will begin in the UK
(zerohedge)
Bank Of England Confirms Bond Sales Will Begin November 1
WEDNESDAY, OCT 19, 2022 – 05:45 AM
So much for the overnight FT report that the Bank of England, facing another battalion of angry bond vigilantes, would delay its QT.
Seeking to squash any speculation about its intentions, on Tuesday the Bank of England announced it has decided to begin asset sales on November 1 as it prepares to unwind the quantitative easing programme in which it accumulated almost £850bn of government bonds.
There is, however, a twist… so to speak: in a delightfully circular reference, the FT reports that “The BoE statement, which came after the FT reported the bank was likely to delay the asset sales, signals a shift from its previous plans. While before the BoE had intended to sell assets across the range of maturities from short to long-dated, it now will only sell short and medium-dated bonds.”
“The Bank will continue to monitor market conditions closely, and where appropriate factor that into the design of its sales operations,” the BoE said in its Tuesday evening statement, but added that it expects to conduct gilt sales during the fourth quarter “at a similar size and frequency as had been previously announced”, with any shortfall made up in 2023 or later.
The bank specified that the sales during the fourth quarter would be short-term gilts, with a remaining maturity of between three and seven years, and medium-term gilts, with a remaining maturity of up to 20 years. The Bank has always maintained that the gilt sales — so-called “quantitative tightening” — are not designed as a primary monetary policy tool and that instead it will use interest rates as the principal mechanism for getting inflation down.
As is well-known by now, the 30-year gilt, the longest-dated UK government bond, was at the heart of recent fears about the pension industry which sent its yield soaring above 5% amid concerns that triggered an emergency BoE purchasing program. The BoE had previously planned to begin the bond sales on 31 October, itself a delay from the earlier scheduled date of October 6, but all those plans were blown up by Truss’ now defunct “mini-budget.” The sales will now begin on November 1, to avoid a clash with a fiscal plan to be announced on October 31 by new UK chancellor Jeremy Hunt, the FT notes.
Hunt’s plan will be at the heart of efforts to close a £40bn gap in the government’s accounts. Market reaction is particularly important because of the adverse impact of the previous unfunded tax-cutting plans on the gilt and sterling markets.
The UK’s September inflation figure will be published on Wednesday and is expected to show prices rising at an annual rate of 10%. The bank is expected to raise interest rates from the current level of 2.25% at its next meeting on November 3.
Market participants anticipate that the rate will rise at least 0.75 % although many now maintain the increase will be less than had been likely before Hunt swept away most of the tax cuts in his predecessor Kwasi Kwarteng’s “mini” Budget of last month.
end
UK
UK inflation rises to 10.18% with food and energy leading the way.
(zerohedge)
UK ‘Misery’ Surges As Inflation Unexpectedly Hits 40 Year High
WEDNESDAY, OCT 19, 2022 – 10:20 AM
With every development in the political and fiscal basket case that is the UK under the microscope, today’s news that inflation in the United Kingdom unexpectedly hit a fresh 40-year high of 10.10% was not taken too well by markets.
Core CPI inflation in the UK increased from 6.26%yoy in August to 6.54% Y/Y in September, above consensus expectations. But it was headline CPI inflation that stole the show, coming in far above consensus expectations, and increasing from 9.87%yoy in August to 10.10% Y/Y in September, driven by the highest food price increases in decades.
The Office for National Statistics said the overall consumer price index rose 0.5% in September compared with August, a larger increase over the month than in 2021 when the index rose only 0.3%.
The composition of the strength was broad-based, with the hotel and restaurant category contributing the most to the core inflation increase. Of the non-core components, petrol prices saw a sequential decline in September, while sequential food price inflation slowed slightly yet exploded on an annual basis.
The increase in the year-over-year headline inflation rate was driven primarily by an increase in core inflation. Across core components, the increase was broad-based, with the biggest contribution coming from hotel and restaurant prices. While the ONS notes that the change in this year’s seasonal pattern contributed to the increase, restaurants and hotels are also one of the more labour cost sensitive categories. Of the non-core components, sequential petrol prices fell in September, but this was broadly offset by continued sequential strength in food inflation.
Paul Dales, chief UK economist at Capital Economics, said the rate of inflation would rise to 10.5 per cent in October and to 11 per cent in April once the government’s energy price guarantee expired.
“Today’s release highlights the danger that underlying inflation remains strong even as the economy weakens,” he said.
At more than five times the Bank of England’s 2% target, the double-digit inflation rate will also add to pressure on the central bank for a large interest rate rise on November 3. That said, the BoE will need to weigh the additional price pressures against the government’s U-turns on unfunded tax cuts and less generous relief on household energy costs, which will reduce medium-term pressures on prices.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the “MPC still is a long way from being able to claim victory” over inflation, but urged the central bank to worry more about “weakening consumer demand and emerging slack in the labour market” than the current high level of inflation.
The resurgence of UK inflation sent the Misery Index back to its highest since 1992…
The news sparked a sharp drop in sterling, amid fears that the coming stagflationary recession will be especially painful as the BOE is now forced to keep hiking as it grinds the economy to a halt. It was also bad enough to spark an aggressive selloff in US TSYs, which had been flirting with the 4% level all session, only to break decisively above it after the UK data.
end
UK
UK treasury will bail out the Bank of England’s 11 billion pounds of QE losses. And they will lose over 20 billion pounds next year/
Where is treasury going to get the money?
(zerohedge)
UK Treasury To Bail-Out Bank Of England’s £11 Billion QE Losses
WEDNESDAY, OCT 19, 2022 – 12:48 PM
Just when you thought UK PM Liz Truss had her budget under control, it appears another big hole just appeared that needs to be plugged.
As we recently detailed, new UK chancellor Jeremy Hunt faces the daunting task of closing a £40bn gap in the government’s accounts…
But, as Bloomberg reports, there are more holes for the UK Treasury to find cash for as it is set to transfer more than £11 billion ($12.4 billion) to the Bank of England this fiscal year to cover projected losses in its bond-buying program.
The new £11.175 billion injection is listed under “assistance to financial institutions – payment to the Bank of England.”
Notably, this payment is also described as “assistance to financial institutions, businesses and individuals” under proposed new changes…
Much more palatable for UK taxpayers?
Bloomberg calculations suggest the BOE’s annual loss could top £20 billion as soon as next year.
Bloomberg reports that a spokesman for the Treasury said “the new Chancellor remains very committed to Bank independence and has full confidence in it.”
The situation in the UK is apparently different to that in the US as while The Fed typically remits its operating profits (on interest income from the bonds on its balance sheet and from fees for services provided) to the US Treasury (under Federal law). That money becomes part of the federal government’s operating budget. In other words, the central bank serves as a revenue source for Uncle Sam.
But it is possible for the Fed to lose money. In fact, it will likely do so in 2023. If so, it would be the first operating loss since 1915.
However, unlike in the UK, while the US government will see a reduction in revenue which will increase the federal budget deficit, we live in a world where the Fed gets to make its own accounting rules. And according to its own accounting rules, any net loss magically turns into a “deferred asset.”
Maybe the BoE and UK Treasury need to take some notes…
EUROPE VS USA/TOM LUONGO
A MUST READ.
How the Fed’s raising of interest rates will kill off Europe and the Davos crowd
Luongo: The Fed Is Exposing The Lies Of Two Generations Of People In Power
Fed Watch: When They Call For the Bailiff You Know You’re Winning
You may ask yourself, “What is that beautiful house?” You may ask yourself, “Where does that highway go to?” And you may ask yourself, “Am I right, am I wrong?” And you may say to yourself, “My God, what have I done?”
– Talking Heads, “Once in a Lifetime”
In the face of the Fed’s intransigent hawkishness we are now on the verge of exposing the worst lies of two generations of people in power. I’ve maintained for more than a year now that the global oligarchy known here as The Davos Crowd thought they’d run the table on the US and the UK with COVID-19.
The various bailout packages, Pelosi’s CARES Act and pending legislation — Build Back Better, etc. — were supposed to destroy the fiscal position of the US once and for all. These were political blackmail to force the Fed not to raise rates when it clearly needed to.
That Pelosi et.al. were only able to pass neutered versions of these bills is a sign that powerful forces behind the scenes are not down with this plan.
Now, in light of the near-complete coup attempt against UK Prime Minister Liz Truss (more on that later this week) we are looking at big power plays to decide whether Davos will retain control over Western policy. Truss’ difficulties point to Davos having a few markers to call in here.
But, I want to go back to a couple of weeks ago and also talk about Credit Suisse. At the same time there was a coordinated effort to stop Truss implementing a very non-Davos fiscal program. there was a coordinated whisper campaign to start a bank run on Credit Suisse.
Clearly this attack failed, but it’s equally clear Davos activated the next level of their assault on any institution snot aligned with them.
Is it any wonder that the two big European financial centers outside of the EU came under coordinated attack, Economic Hitman style, in the days following Queen Elizabeth II’s funeral and the coronation of Globalist Charles III as King?
After that, and subsequent statements by FOMC Chair “Baller” Jerome Powell,Davos had to bring in the UN begmanding (begging masquerading as demanding [H/T Joachin Flores for that one]) all central banks stop raising rates to avoid a global recession.
This was promoted all across the Davos-controlled media space. Even Rupert Murdoch’s War Street Journal got in on the action to sway GOPer’s a month out from the mid-terms. And I asked the big question last week, “Can the Fed Afford to Pivot,” with the US $31 trillion in debt?
The answer from the Fed has been a consistent, no.
And that means Davos is in serious trouble. As I’ve tirelessly pointed out, the Fed controls global dollar liquidity in a way they haven’t in decades. And that is why the screams of pain from all the usual suspects are so loud.
That said, Davos continues to execute a script they have no way to augment if they want to achieve their stated goals. Taking out the UK was the right move. But, is it a move that puts them on the path to winning or just an attack of opportunity in a series of rearguard actions?
The Bailiff Moment
Bullies always know when they are caught. Bullies are also generally the worst form of liars, ones who shout down opposition rather than engage in conversation.
In interrogations the goal is always to get the liar to trap himself and leave him calling for relief. This is why you should never talk to cops without a lawyer, FYI.
They are easy to trap because the lies are so transparent. All it takes is the slightest application of the Socratic Method — using one’s own argument to find flaws in it through counter-example — and you can get them “calling for the bailiff” in a matter of minutes.
The title of this post is my best remembrance of the title I first saw this video posted under at Lewrockwell.com back in 2009. I know this is 7+ minutes of having to watch Nancy Pelosi, but trust me, it’s worth it.
This is the only video of Nasty Nancy I can stomach to watch, because Jan Helfeld crushes her on minimum wage in less than 3 minutes. The squirm is almost like music. It’s a masterclass in evasion, deception and bullying. It lays bare the malignancy of her narcissism.
It is a real, tangible benefit to humanity revealing this horrific human being. Notice how when Pelosi really understands what’s happened she resorts to multiple threats, “You made a mistake!” she repeats glaring at him.
She became his enemy in that moment.
If you despise Pelosi as much as I do this is a treat for new readers, a thank you for joining us I’ve dredged up from my memory and the bowls of the YouTube algorithm.
I brought this out to show you how easy it is to expose the duplicity and fragility of the narratives surrounding our political and financial reality.
The Reflections of Vampires
It was this interview which helped crystallize my filter I use to view these false narratives. It’s why it was so easy for me to see the Fed’s raising the RRP rate by 0.05% above the Fed Funds Rate at last year’s June FOMC meeting as a watershed moment.
It was no different than Helfeld showing Pelosi that her intern argument was nonsense. That move exposed the weak US dollar which had been created during the Trump administration as a supremely false move in historical context.
Powell raises RRP by 0.05% and the whole world freaks out. The euro collapses, gold’s nascent rally is snuffed out and US bond yields begin rising, forcing euro-bond rates out of the negative-yielding basement.
“It puts the positive yield on its skin or else it gets the rate hike again!”
Since then it’s been nothing but a series of ever-escalating actions to force the Fed to pivot off Powell’s ‘Volcker-esque’ policies. I’ve chronicled all of the twists and turns of this story, beat for beat, since last June.
These last sixteen months have played out like this seven minute interview with Pelosi. Jerome Powell is Helfeld and Davos is Pelosi. They kept making the case their plan for the US to spend spend spend when inflation was here here here.
The most obvious corollary to this interview and Powell was when Obama et.al. launched that insider trading scandal of the Fed governors last fall and forced three hawks off the FOMC.
“You made a mistake!”
Note we have a sequel this week with Atlanta Fed Chair Raphael Bostic having to do a mea culpa over more insider trading at the Fed.
Don’t Look Up!
This week Truss finally caved. It will be the end of her and the any dreams Elizabeth II had of an independent Britain.
I told you Truss was a moron and clearly overmatched for the job. But it goes beyond that. After the BoE toys with markets for a couple of weeks, the message to the world was to avoid bad stuff (“RECESSION!”) is get the evil US Fed to pivot.
Will Powell pivot? I don’t think so. Why? He’s not a moron. Nor is he alone like Truss was. Truss was set up to fail.
For months, I’ve been alone in saying the Fed is going to be aggressive. For months I said the Fed is not raising rates to tame cost-push inflation which it doesn’t have the tools to fight.
Now, I’m not alone anymore. Neither John Hussman or Danielle Dimartino Booth thinks the Fed will pivot. Others are still trapped at denial in the Kubler-Ross model.
Hussman points out that the Fed has never pivoted on hiking rates with the PCE deflator, currently 4.9% (with modifiers, see the linked article), above the Fed Funds Rate, 3.25%. He makes a powerful argument.
This is what Powell et.al. mean when they say they can’t leave the job undone.
But in a recent interview with Hedgeye’s Keith McCullough, Ms. Booth kept saying what I’ve been saying, “The Fed isn’t trying to stop inflation.” She uses the Fed’s massive TIPS portfolio as part of the reason, but it’s also something, when pressed, she’s, “not able to say.”
So, against this dark background, we have one non-EU European financial center crushed. Let’s go back to the other, Switzerland. The Fed’s intransigence is why I think the whisper campaign against Credit Suisse was another of these operations.
I’m not saying that Credit Suisse isn’t vulnerable. Of course it’s vulnerable. The reason it almost worked is because they are vulnerable, just like the UK pension system was Truss’ Achilles’ heel.
All I’m saying is that I have a hard time believing that all of the EU’s continental competition coming under extreme pressure in quick succession has a strategic component to it.
Everyone acted like the Fed pivoted when they did a couple of $3+ billion tranches of swap line liquidity to the Swiss National Bank this month. Notice how there was no money for the Bank of England and almost no money for the ECB.
What if this is just more battle lines being drawn?
Because the UN coming out and decrying the central banks raising rates is a massive tell that the wrong people’s oxen are being gored. It isn’t just these two events.
We had the public meltdown of Jeremy Seigel on CNBC which was amplified beyond all recognition. Jeffrey Sachs stopped CNN cold with the pronouncement that the US was behind the bombing of the Nordstreams.
These people are all close allies of George Soros and the Democratic party machine. The fear over the mid-terms is real now. Even Nate Silver at five-thirty-eight.com is worried the Democrats are about to get Rick-rolled.
UN Cries Uncle
So, Davos using deep assets at the UN through UNCTAD to issue warnings against the Fed and Volcker-like policy is no different than Pelosi calling for the guard to remove Helfeld from her office.
They demanded easy money and price controls in typical Davosian communist fashion. We need to coordinate monetary policy worldwide to stop the collapse of the old system.
It was a classic appeal to the common good and for internationalism over nationalism.
This is also a moment of the purest weakness.
And if you think Europe isn’t weak here and that the Fed is still not in Helfeld’s seat asking uncomfortable questions of narcissist bullies with questionable taste in clothes I give you the EU’s latest trade data. (H/T Robin Brooks on Twitter)
Trade surpluses are gone. Inflation raging. Producer prices rising faster than inflation. Bond volatility at levels not seen since COVID.
Europe’s Energy price spikes are demons of their own summoning. They had a cozy deal with Russia and chose fake free markets for natural gas to create a volatility playground to bankrupt their middle classes.
So, they want this inflation, even if they say they don’t. They want the inflation to force the Fed to subsidize it, like it did when Globalist Ben and his Auntie Janet ran the place.
What they never planned on was having to do this and fight the Fed simultaneously. In broad strokes, they could freeze capital in Europe’s banks, grab back City of London and add Zurich, while putting the US on a path to true insolvency to neuter the power of New York.
Now all they have left is playing power politics with its junior EU members who were only interested in ensuring their people didn’t starve, e.g. Hungary. Lashing out at cripples is not a good look.
All arguments that the US dollar doesn’t deserve its strength or that the Fed has a responsibility to Europe when all they’ve done is engage in fiscal and monetary hara-kiri via negative rates for nearly a decade are pathetic as they are stupid.
You can see that this call was an extension of the anti-US psy-op that ran wild after the Nordstream bombings. There is a concerted effort now to at once push for open war between the US and Russia while also blaming the Fed for the crash in the global markets.
“You made a mistake, here!”
The BoE pivot was done to isolate the Fed. The Reserve Bank of Australia only raised by 25 basis points to support the BoE.
The ECB is silent during all of this, because they are the Elephant in the room that’s been pushed off the mountain and is about to go splat.
The UN’s response? Don’t Look Up!
Fake Rally, Fake Markets
The reward to the world is a massive rally in stocks, bonds and safe-havens. While this is clearly just a bout of short-covering in most of these markets which were stretched to the downside, it’s also timed with the global call for central bank dovishness and price controls from the UN.
The narrative now is the Fed is being petulant and rapacious, just like the US foreign policy establishment. The victim narrative is reaching a crescendo right in time for the mid-terms.
That’s why the whisper campaign against Credit Suisse didn’t materialize into a bank run. They were a warning and used as a weapon to pressure the Fed. As pointed out to me on Twitter the Fed opened a new repo facility for commercial banks.
Do you notice who ISN’T on this list? Three guesses and the first two don’t count. No major European banks. Nataxis doesn’t count when Deutsche Bank, Unicredit, or ING are not on the list.
Just US, Canadian, Hong Kong and Japanese banks.
Guess who got money and who didn’t? The Swiss.
A lot was made of that meeting, and it served as good fodder for the attack on Credit Suisse. Will the Fed come in with an emergency rate cut? Will they pivot?
And for the Fed to call a meeting for the same day that Credit Suisse was attacked and the UN to begmand them to pivot only to comment on debit card payment systems, is a massive tell.
The Fed updated the new rules for debit card transactions to have at least one backup processor in place. If anything, this means Davos can’t lean on VISA to deny your grocery purchase unilaterally because of mean tweets or because you’re Alex Jones.
This clearly says to me that they are fighting this crap at the foundational level. It also says that the FOMC’s silence on UK Gilts, Credit Suisse, etc. is deafening.
Since then there’s been nothing but more acquiescence to the coming 75 basis point hike on the eve of the mid-term elections. The Bank of England got their pound of flesh, all puns intended, and for now things are stable. It won’t be for long.
As Ms. Booth said and I agree, every rally in the stock market, every wiggle by someone to increase offshore liquidity and calm things down, is another opportunity for the Fed to keep repeating their position.
“Why can’t we raise rates?”
“Why can’t we charge what we want for the money we provide?”
“Why do we have to define the value of US labor by your rules?”
“Why does their have to enforce a minimum wage for offshore dollar speculators?”
“Bailiff!!”
But, the big unanswered question no one is allowed to answer is the one that Ms. Booth kept avoiding in that interview, “If the Fed isn’t fighting inflation with rate hikes, then what are they fighting?”
You know my answer. Davos does too.
What’s hilarious is watching Europe call for the bailiff and everyone finally realizing that the Fed told him to take an early lunch break.
As the Ukraine conflict continues, a basic question with ethical dimensions has risen and will need to be answered soon by European politicians: how moral it is to support Ukraine “as long as it takes” against the necessity of protecting your own citizens’ welfare and the constitutional duty to follow your people’s mandate which is the basic rule of democracy?
European unclenched and blind support for US policies in the Ukraine conflict, and the dire economic and political consequences it has unleashed, is bringing the continent’s political architecture to a defining moment which may only be resolved through the end of the European Union (EU) regime and the emergence of a new and still undefined political settlement.
Betting on Russia’s defeat and Vladimir Putin’s demise, the EU has followed the US-led economic war against Russia via sanctions which now far outnumber those directed against any other country on earth but nevertheless have failed. On the other hand, beyond the adverse impact on consumers and small/medium businesses caused by rising energy bills, general inflation, and the prospects of serious heating scarcity this winter, EU’s sanctions against Russia are causing irreparable damage to the continent’s economy. Energy intensive manufacturing companies are going bankrupt or moving overseas attracted by lower energy costs, prompting business closures, a deterioration of trade balances, a severe erosion of the Euro currency, job losses, the destruction of the continent’s manufacturing competitive advantage built over decades and an inevitable and severe recession in the coming months. The overall political and social impact of these events on the continent’s future is still unclear as there is no escaping to its lack of natural resources.
EU’s decisions in support of Ukraine have purportedly been taken in the name of democracy, the rule of law and western values and against a military action by Russia considered unprovoked and illegal. The EU appears to have been also concerned about the unsettling of post-World War II borders – or rather the national frontiers that followed the end of the Cold War – and has expressed unfounded fears that Russia’s actions in Ukraine are the prelude for further aggression in Europe.
Deep down, through its actions against Russia the European leadership psyche seems to have had a cathartic release, unleashing an old Russophobia manifested in Europe over decades if not centuries, melting together Czarist Russia, the Soviet Union and the Russian Federation in an effort to portray and convince the average European about an inherent Russian malignity that needs to be rooted out once and for all.
In its one-sided defence of Ukraine, the EU has been unwilling to recognize and accept the civil war character of the Ukraine conflict, Russia’s legitimate security concerns and its ongoing warnings about it over years, the historical background of a conflict rooted on the mistreatment of Ukraine’s Russian-speaking population that worsened since the US sponsored Ukraine coup in 2014 and its failure to support a diplomatic settlement in 2015 – i.e. the Minsk agreements -, in which they played a mayor facilitating role. The EU ignores the deep flaws of the current Ukraine government and the society it has tried to create, both defined now by blatant corruption, political persecution of opposition and an ultra-nationalist ideology, all this hardly reflecting so-called European values.
Sadly, the EU has been incapable to develop an autonomous and justly self-serving European alternative in the conflict and has become hostage of the US hegemonistic agenda. By refusing to take a balanced approach, the EU is disqualifying itself to be an honest broker on peace negotiations that sooner rather than latter will need to start in the conflict. Non-European countries like Turkey and Saudi Arabia are now taking the lead, reflected for instance in the recent Russo-Ukrainian prisoner exchange, a prominent role unthinkable only a few months ago which is embarrassing for Europe given its traditional place in diplomacy.
Europe’s capitulation to the US agenda is of course not new and had a glaring precedent in the support of NATO’s bombing of Serbia in 1999 and its dismemberment with the creation of the Kosovo enclave. Nowadays, the EU nomenklatura tramples on basic principles of democracy and sovereignty through its attempts to drop the unanimity principle in the EU’s decision-making process. Furthermore, the EU leadership is opportunistically using the Ukraine conflict to preserve its existence and even trying to morph itself into a de facto military alliance, an aberration from its original aims.
The EU behaviour reflects a political and military marasmus that had its roots in the outcome of World War II. The United Kingdom has had a similar trajectory in international relations, but at least it has been consistent with its old pro-Atlantic views and has had a bit more of care and concern for its own independence and sovereignty, at least insofar as continental Europe is concerned.
Only an existential shock in Europe, which may come this coming winter and result because of an energy blackout, will enable its society and their politicians to understand where their true interests lie and how to take proper action.
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5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
RUSSIA/UKRAINE
Kherson civilians evacuated amid Ukraine assault. Putin declares martial law
Kherson Civilians Evacuated Amid Ukraine Assault As Putin Declares Martial Law For 4 Territories
Putin now warns that the 4 annexed regions are under Russia’s nuclear protection
Annexed Ukrainian Regions Under Nuclear Protection, Kremlin Affirms
(ZEROHEDGE)
WEDNESDAY, OCT 19, 2022 – 03:53 PM
Update(1553ET): The Kremlin has continued its severe warnings which are aimed at NATO and Western backers of Ukraine, saying Wednesday that the four recently annexed territories in the east are under Russia’s nuclear protection.
“All those territories are an inseparable part of Russia, and therefore all of them are under [our] protection,” Putin spokesman Dmitry Peskov told reporters, specifically in response to a journalist’s question over whether these new regions absorbed into the Russian federation fall under its nuclear umbrella. “Their security is guaranteed precisely at the same level as the rest of the country.”
As CNBC reports, “The statement from the Kremlin came at a moment of acute tension, with both NATO and Russia expected to hold military exercises shortly to test the readiness of their nuclear weapons forces.”
Some US officials and pundits, as well as NATO-linked think tanks, have continued to urge the Western alliance not to bow to Putin’s “nuclear blackmail” – arguing that Ukrainian forces should continue receiving anything needed to stave off the Russian invasion. Kherson is now said to be in the Ukrainian counteroffensive’s sights, as described below.
* * *
WEDNESDAY, OCT 19, 2022 – 10:45 AM
Russian President Vladimir Putin has authorized martial law for the four recently annexed territories of Donetsk, Kherson, Luhansk and Zaporizhzhia. This in effect gives emergency and extraordinary powers to the heads of these regions, with the Associated Press noting that “additional emergency powers” have also been given to “the heads of all regions of Russia” – though it’s unclear precisely what this means.
The announcement comes the day after the Russian army said it is preparing to evacuate civilians from Kherson, which was the first Ukrainian city to fall to the invasion in February. “The entire administration is already moving today,” Moscow-installed regional head Vladimir Saldo confirmed on Tuesday.
This evacuation order is being widely seen as an admission that the Ukrainian counteroffensive threatening occupied Kherson is gaining rapid momentum, so the Russians could be preparing a massive “scorched earth” bombardment in response. Reports estimate that Russian front lines have been beaten back some 20 to 30 kilometers in the last few weeks alone, and Russian commanders are alarmed they could be backed up against the Dnieper River that bisects Ukraine.
The Ukrainian government has rejected the martial law declaration as a “pseudo-legalization of looting of Ukrainians’ property” and has long urged its citizens to not comply with Russian occupied administration directives.
Russian state media has explained of Putin’s new order that the four territories “already had martial law in place when they became parts of Russia,” based on the president’s Wednesday statements. “So, the decision provides the legal basis for it to remain in place under Russian sovereignty, he said during a meeting of the National Security Council.”
Further state sources detail, “The document signed by Putin introduces martial law starting midnight on Thursday. It also orders various parts of the Russian government to submit corresponding action plans within three days.”
The additional powers given to regional administrations within Russia appear to be in response to the fact that border regions, especially Belgorod and Kursk of the last several days, have been coming under increased cross-border missile and artillery fire from Ukraine. RT notes additionally of Putin’s legal decree:
These include the Crimean Republic, the city of Sevastopol, as well as Krasnodar, Belgorod, Bryansk, Voronezh, Kursk, and Rostov Regions. This is a special regime that gives officials additional authority to ensure security and rapid reaction to any emergencies.
All of this is another iterative step toward Moscow declaring full war on Ukraine, after last month’s ‘partial mobilization’ and calling up of hundreds of thousands of reservists.
One Moscow-based international war correspondent is predicting a “special” military operation is about to happen to “save face after recent defeats” in the east and south:
“[Martial law] will mean more restrictions on the movement of people. It will mean the military and local administrations will have the right to do what they want – in terms of [deciding] how people move around or restricting them from gathering.
“Political parties gathering and activities will be banned, and civilian or semi-civilian factories will be asked to reorient their production lines to help the military.”
In “annexed” areas, Vall said there is likely to be a “total mobilisation instead of partial mobilisation, which has taken place in the Russian Federation.”
He added: “Russians [had been] expecting something special to be done to save face after the recent defeats on the battlefront.”
Ukrainian officials have meanwhile accused Moscow of stoking “hysteria” with its mass evacuation of the about 60,000 to still remain in Kherson.
Power plants across Ukraine have continued coming under attack, with the latest strike Wednesday being against Ukraine’s Vinnytsya region. At the start of the week President Zelensky said one-third of the country’s power stations have been attacked…
CNN has cited a mass emergency text notification that locals received: “Dear residents,” the message began. “Evacuate immediately. There will be shelling of residential areas by the Armed Forces of Ukraine. There will be buses from 7:00, from Rechport [River port] to the Left Bank.”
The coming major fight for Kherson marks the first instance of the invasion that it’s Ukrainian forces besieging a large city, and that Russian forces are having to defend, setting up the possibility of pro-Russian civilians getting caught in the crossfire and under major Ukrainian shelling of its own (former) city.
On Tuesday new commander of Russian forces in Ukraine, Gen. Sergei Surovikin, spoke to the press about the “special operation” in Ukraine for the first time, admitting that the situation in Kherson has become “very difficult” and that tough decisions will have to be made. “The Russian army will above all ensure the safe evacuation of the population” of Kherson, Surovikin told Rossiya 24. “The enemy is not abandoning its attempts to attack Russian troop positions.”
END
Madness or common sense on the front lines causing enormous pressure
Robert Hryniak
12:43 PM (3 hours ago)
to
Last night I wrote about the insanity to blow up the Kahovskaya dam to cause 50,000 people to be swept away and blame it on the Russians as a false flag event. Fortunately the 6 HIMARS rockets that were fired last night to collapse the dam were all intercepted by and destroyed by Russian antimissile systems. No doubt the Ukies will try again. False flag events are a signature of a unipolar strategy to ignite broader conflicts seen over and over again. This is especially the case with a disintegrating financial state in many Western countries. Broader wars often are used to disguise financial and political failures. And today there are many to be found.
What I didn’t say is one of the primary reasons for this insanity is that the troops in Kherson be it the foreign troops or Ukrainian troops have been refusing for days now to conduct a full-blown assault against Russian forces. What are the reasons that these troops refuse to commit to an all out assault? It is whenever they have tried exploratory tactics to access Russian forces they’ve largely been eliminated. Of the 60,000+ troops that are assembled against what seems to be about 15,000 Russian forces clearly there is a superior number that should overwhelm; however what is known also is it at least 50% or more of the attacking troops will be killed in an assault. Perhaps common sense has penetrated into minds of those troops that refuse to die in vain, at least for a time. However, there is an current offensive attempt of size given the failure to burst the dam occurring today. So common sense is short lived, it seems.
And not to be omitted as further repeating insanity, another sizable attempt was made to capture the Zaparozhye Nuclear Power plant. And like in every other attempt the Ukrainians failed, suffering major losses.
Yesterday, in a meeting at the Kremlin martial law was introduced to the regions of Donetsk, Luhansk, Kherson, Zaparozhye. This order and decree of martial law takes affect as of midnight today. What this really means is it this is the exact type of readiness and condition one would expect, if Russia was going to a war time Footing and a war readiness is a giveaway of some larger conflict events coming soon. At the same time missile forces are on a high alert. With the Duma and Federation Councils have discussions in secret, one can only assume things will get much worse shortly.
The real big story however is that the Ukrainians are no longer able to get real time intelligence via space satellite communications with NATO. In the area of the Políevka settlement in the Odessa region the communication space station of the government communication center of Ukraine was destroyed the other day. This means that for the time being, all the secure flow of NATO intelligence to the Ukrainian government is at a standstill. Further in order to destroy Russian forces it’s required to pinpointing the location of those forces is necessary in order to use high precision weapons otherwise you are wasting such resources relying on ground contact as is occasioned on lesser sophisticated battlefields. NATO satellite intel must now use conventional means which will be picked by Russian listening posts quite easily as there is nothing secure about such communications. And StarLink is off line so the money wasted there by various parties is a another loss.
Whatever comes next, it will be heightened conflict that escalates with a danger that it goes horribly wrong. And a sign of resignation of dialogue with the West comes via Lavrov stating that the need to maintain current levels of diplomacy with the West is no longer necessary. Is this a polite and quiet way to evacuate personnel from embassies in the West or a reflection that Russia has indeed turned east for good?
We will soon find out.
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SAUDI ARABIA/BRICS/USA
This is bad news for the uSA: Saudi Arabia will join the BRICS alliance
(gateway pundit)
and special thanks to Robert H for sending this to us;
THE BIDEN LEGACY: South Africa Confirms Saudi Arabia Will Join BRICS Alliance with China and Russia and Move Away from US with Explosive Consequences
Robert Hryniak
5:44 PM (5 hours ago)
to
Will the Biden clan/ administration own the sunset on the USD? Never did a one group do as much damage in so short a time as this crowd. Pakistan is racing away from the US and there are many more. And you wonder why people are panicked? Is there any wonder why even in America Biden support is down to 19%? Yes, Americans have finally realized the going show on display and have said no. Do you really think they believe they will succeed at midterms? Not likely with a honest vote, if a vote actually takes place. And Blinken still shrills that he must be at the table to rule by order, orders that are followed by all others? Sadly, the reality is the world is moving on for better or for worse and there is no lid on the boiling pot of change. How the a multipolar world interacts with America and the West is not possible to be decided by the West as that day has past. What changes occur not only in currency but in settlement locations and methods will be decided by what form takes place in decision making centers far away from Western influence. And the West is left to decide how it will accommodate a multipolar its’ own errors created. And this will end the world we knew as change will abruptly come as a result. How we all react and interact and manage will test skill sets and stamina of all of us. Because the standard of living will change across the world as wealth shifts much like the trade winds choose to blow.
Biden Tells Iran Protesters “Keep Fighting” As Tehran Says Unrest Driven By US, Saudis
TUESDAY, OCT 18, 2022 – 07:20 PM
Iran protests have been persisting and growing fiercer since the September 16 death of 22-year old Mahsa Amini, who had been detained by police in Tehran for not adhering to the country’s strict Islamic dress code. The “anti-hijab” protests which are raging and lately taking over university campuses across various cities are now coming under increased international media coverage. Now in their fifth week, the protests and ongoing clashes with security forces have leftover 230 Iranians dead, including reportedly with casualties among police as well.
Multiple hundreds of demonstrators have also been arrested. Increasingly, Iranian authorities are blaming the Islamic Republic’s “enemies” – including the United States, Israel, and Saudi Arabia – for fomenting what have morphed into raging anti-government unrest. This theme of Tehran is likely to gain more traction among broader swathes of the Iranian population which have by and large remained on the sidelines after on Monday President Joe Biden issued a message of support for the protests…
Biden made the off-the-cuff statements to activists and reporters, describing of his July visit to Saudi Arabia, “Everyone thought I went to the Middle East because of oil, it was because of Iran.” Biden praised the “incredible courage” of the protesters, and when asked by an activist to issue a message to Iranians in the streets, he said: “Keeping fighting, we’re with you.”
This past week has seen the first instances of the US president personally issuing such specific support to the anti-regime protests, and it’s certainly going to be noticed in Tehran, given officials there have already said the “riots” are a US-backed plot.
“Iran has to end the violence against its own citizens simply exercising their fundamental rights,” Biden said.
“I want you to know that we stand with the citizens, the brave women of Iran, for real, for real,” Biden said, “who right now are demonstrating to secure their very basic, fundamental rights.”
Speaking about the death of Amini, he said, “it stunned me what it awakened in Iran. It’s awakened something that I don’t think will be quieted in a long, long time.”
It’s very likely the protesters themselves are increasingly wary of ways in which their movement faces the potential to be externally hijacked (whether real or perceived). Already the government is pointing to instances of protests being encouraged from the outside. This was a key talking point on Tuesday from Iranian government spokesman Ali Bahadori-Jahromi in an address given at Tehran’s Allameh Tabatabai University.
The official cited Western as well as Gulf Arab attempts to beam propaganda into Iran via state-funded satellite broadcasts. As AFP and Iran state media described of his words:
Bahadori-Jahromi said Persian-language media outlets and platforms based outside Iran were being used to “put pressure” on Tehran.
“Countries are willing to pay from their own pockets to start Persian-language media, while they do not know Persian at all and want to put pressure on us,” IRNA quoted him as saying.
Earlier Tuesday, Interior Minister Ahmad Vahidi accused Iran’s regional rival Saudi Arabia of backing such foreign media.
“Social media and television channels, especially the ones affiliated with regional movements including Saudi Arabia and some Western countries,” have created “false atmospheres”, he said, without identifying any of the outlets.
This has further been a theme of government officials and some Iran-based pundits appearing on US networks like CNN.
They liken what’s happening inside Iran to an externally driven regime change project, akin to the way events spiraled in Libya and Syria during the “Arab Spring” of the prior decade.
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6. GLOBAL ISSUES//COVID ISSUES//VACCINE ISSUES.
Vaccine//Covid issues:
Surprise! EcoHealth Landed $1 Million Grant To Work With ‘80% Mouse Death’ Boston University On ‘Future Pandemic Prevention’
TUESDAY, OCT 18, 2022 – 09:20 PM
Monday’s report in the Daily Mail that the University of Boston has engineered a chimeric COVID that has an 80% kill rate in humanized mice has caused quite the stir.
To review, in an effort to research what makes Omicron so transmissible – and funded in part by grants from the NIH and Anthony Fauci’s NIAID – a team of researchers cobbled the Omicron spike protein to the original strain of Covid-19. The resulting virus was five times more infectious than Omicron.
“The Omicron spike (S) protein, with an unusually large number of mutations, is considered the major driver of these phenotypes. We generated chimeric recombinant SARS-CoV-2 encoding the S gene of Omicron in the backbone of an ancestral SARS-CoV-2 isolate and compared this virus with the naturally circulating Omicron variant,” reads the pre-print.
The authors speculate that their chimeric strain is unlikely to be as deadly in humans as it was in the mice because the specific breed used in testing are more susceptible to severe Covid.
Gain of Function?
“The research is a clear example of gain of function research of concern and enhanced potential pandemic pathogen (ePPP) research,” said Dr Richard Ebright, a chemist at Rutgers University in New Brunswick, New Jersey, adding “‘It is especially concerning that this new US-government ePPP research – like the previous US-government ePPP research on chimeric SARS-related coronaviruses at Wuhan Institute of Virology that may have caused the pandemic – appears not to have undergone the prior risk-benefit review mandated under US-government policies.”
Gain of function research was largely restricted in the US until 2017, when the National Institutes of Health began to allow it to take place using government funds.
Previously it had been halted from 2014 to 2017 over concerns that it could lead to the inadvertent creation of a pandemic. -Daily Mail
The University of Boston refuted the notion that they were performing GoF research, adding that it was reviewed and approved by the Institutional Biosafety Committee (IBC) and the Boston Public Health Commission (don’t you feel safer already?).
“This research mirrors and reinforces the findings of other, similar research performed by other organizations,” said a spokesperson. “Ultimately, this research will provide a public benefit by leading to better, targeted therapeutic interventions to help fight against future pandemics.”
Peter Daszak again?
Which leads us to today’s report…
Just two months before the ‘80% mouse kill rate’ SARS paper was published, EcoHealth Alliance – the NYC-based nonprofit headed by Peter Daszak (and was also funded by the NIH and Fauci’s NIAID to genetically manipulate bat Covid in Wuhan, China) – bragged about a $1 million NSF grant to work with Boston University on a project to ‘work towards predicting and preventing future pandemics.”
NEW YORK – 30, AUGUST, 2022 – EcoHealth Alliance (EHA), in partnership with Boston University, was awarded a $1 million Predictive Intelligence for Pandemic Prevention Phase I (PIPP) grant by the National Science Foundation. The team of scientists will strategize methods of early infectious disease detection and intervention.
…
EHA researchers will focus on predictive models of location and likely pathogens. This will be accomplished by first compiling a list of mutagenic RNA viruses with a high risk of spillover based on their ability to spread, cause outbreak, and cause severe illness. Next, the team will identify locations at risk of spillover and localized spread by assembling a list of animals known to host one or more of the focal viruses. -EHA
And from Boston University’s press release announcing the partnership:
Of note, several researchers from the EcoHealth-allied National Emerging Infectious Diseases Laboratories (NEIDL) were involved in the creation of the 80% mouse death chimeric SARS-CoV-2.
Last year we reported that 18 months before the pandemic, scientists in Wuhan, China submitted a proposal to release enhanced airborne coronaviruses into the wild in an effort to inoculate them against diseases that could have otherwise jumped to humans, according to The Telegraph, citing leaked grant proposals from 2018.
The bid was submitted by Daszak, who was hoping to use genetic engineering to cobble “human-specific cleavage sites” onto bat Covid ‘which would make it easier for the virus to enter human cells’ – a method which would coincidentally answer a longstanding question among the scientific community as to howSARS-CoV-2 evolved to become so infectious to humans.
Perhaps Daszak is teaching BU scientists about sequencing spike proteins?
end
And this is why they forced the world to take these killer vaccines? Covid is exactly like a seasonal flu
(Watson/SummitNews)
Watch: Moderna CEO Admits COVID Is Like Seasonal Flu, Only Vulnerable Need Jabs
In a rare moment, Moderna CEO Stéphane Bancel admitted that COVID is akin to a seasonal flu and that only older people and those who have compromised immune systems need to get vaccinated.
Speaking at a finance conference Monday, Bancel noted “I think it’s going to be like the flu. If you’re a 25-year-old, do you need an annual booster every year if you’re healthy?”
“You might want to… but I think it’s going to be similar to flu where it’s going to be people at high-risk, people above 50 years of age, people with comorbidities, people with cancer and other conditions, people with transplants,” the Moderna head added.
Bancel urged that it is “very important to think about” whether or not to get Covid boosters, adding that there are “1.5billion people” on the planet who have vulnerabilities to such diseases, but emphasising that younger people “are going to have to decide for themselves what they want to do”.
I sure hope so, I will take Slick Willie again or Bush who got us into war & shed blood & treasure needlessly; hell I will take Obama again with his Iran & jihadi fetish, why? Biden is destroying US
‘Democrats have cause for concern that they’re fading at a bad time ahead of the midterm elections after a summer surge fostered optimism that the party could buck historical trends and retain control of Congress.
A New York Times-Siena College poll released Monday found Republicans held a 49-45 lead over Democrats in the generic ballot roughly one month before November’s elections. That represents a shift from September, when the same poll found Democrats leading Republicans by 1 percentage point.’
On October 20, 2022, the U.S. Centers for Disease Control and Prevention (CDC) Advisory Committee on Immunization Practices (ACIP) will be meeting. One of the agenda items appears to be a vote to recommend adding COVID-19 shots to the immunization schedule for children. This is a dangerous idea that will only benefit the vaccine manufacturers at the expense of the best interests of kids and their parents. Not only do the shots have essentially no meaningfully positive impact on children’s health, the fact that the risk of severe adverse events are greater than any potential small benefit is becoming increasingly evident. A decision by the CDC to make COVID-19 shots a routine childhood vaccination would not only ensure a steady revenue stream for manufacturers, but it would grant them continued liability protection once the public health emergency declaration ends. In addition, many entities look to the CDC recommendations when they impose mandates, increasing the likelihood that a COVID shot could be required to attend school.
Doctor Urges Canadian Medical Association to Investigate the Unusual Death of 80 Young Doctors Since Vaccine Rollout – 800% Above Baseline/Expected Number
Markets Are Failing To Grasp The Painful Fact That There Is No Quick Resolution To The Energy Crisis
WEDNESDAY, OCT 19, 2022 – 11:05 AM
By Michael Every of Rabobank
Post-liberal liberalism and post-Marx Marxism
Yesterday saw a three-way global ideological split on how to deal with our energy crisis: hair shirt; unwind markets; and eat-the-seed-corn. None will solve the short- to medium-term problem, much as financial markets are failing to grasp that painful fact.
The UK, after removing energy price support for households from April, may also remove the pensions lock to inflation (as CPI hit 10.1% again today); so old people will be doubly unable to afford their heating bills, bringing us ‘demand destruction’; and PM Truss or Tory Party destruction. The BOE said it would continue with QT. Markets hated the idea.
The European Commission dodged an immediate cap on gas prices due to EU splits, but will ask members’ approval for a temporary “maximum dynamic price” on benchmark TTF Dutch gas as a “last-resort” – with the caveat that this cannot boost demand. Which, by implication must also mean matching rationing. Goodbye free markets and economies. That’s as Qatar warns it sees global LNG shortages until 2025, which Bloomberg helpfully recounts come on top of similar heads ups from: the IEA; Germany; Uniper; Woodside; Morgan Stanley; Chevron; ICIS; Rystad; the International Group of LNG Importers; and our own Joe DeLaura.
US President Biden is going to release another 15m barrels of oil from the Strategic Petroleum Reserve, which has as much to do with the mid-term elections and bad Democrat polling as Hunter Biden did with a laptop. The administration also claims this action should be a signal for the domestic energy industry to ramp up output, despite it implying the opposite.
Meanwhile, the same diverse ideologies to try to solve structural problems, and markets head-in-sand approaches, are also evident on the global stage.
Yesterday, Branko Milanovic published ‘Let’s go back to mercantilism and trade blocs!’, which has been the underlying warning/prophecy here since 2016. He agrees: “There are two reasons why the West should abandon globalization. The first is that it was not good, economically, for its middle classes… Second, geopolitically, globalization helped the rise of China which is already now, but will be even more so in the future, the main military and political competitor of the US…. The idea was, to the great but undeclared chagrin, of the American liberals first raised by Donald Trump. Now the liberals, in this respect like in several others, are happy to follow in Trump’s footsteps.”
However, this raises a problem:
“How to explain this volte-face to the rest of the world. The Western narrative has, since 1945, been built precisely on the opposite view… Now, the West that was the principal ideological champion of free trade has soured on it because it no longer works in its favour… We are now told that we need to go back to the drawing board. But we are not allowed to call these reversals by their real names. Their real name is trade blocs.”
And these aren’t new, having previously been called:
“UK imperial preferences, Japan’s co-prosperity zone, Grosse Deutschland’s Central European area, Soviet Council for Mutual Economic Assistance. They also responded to geopolitical interests of the countries that introduced them. For some 80 years they were held to have been ideologically retrograde, part of “beggar-they-neighbour” quasi autarkic policies. Now, we are to believe that “friend-shoring” is somehow different. It is not. It just mercantilism under a new name and trade blocs in a different costume”.
Milanovic is not alone in these thoughts. Even the UK’s right-wing conservative Daily Telegraph’s @NJ_Timothy tweeted at length yesterday:
“The real problems with the British economy are about poor productivity, regional disparities and an unsustainable trade deficit. We need a new approach based on active government, long-term investment, economic rebalancing, skills and training, and domestic production.
We’re not as rich as we think we are. Inflation is a brutal correction. Pay stagnation tells its story. So do the trade deficit and the state of the public finances. We have become addicted to super low interest rates and QE. Personal debt stands at 133% of household income.
Our economic model is dependent on consumption, but too many are too poor to consume without credit. We have run down manufacturing and built a services economy that makes a small number of people rich while creating lots of low-productivity, low-skill, low-paid jobs.
So we have fewer productive and well-paid jobs, and fewer such jobs outside the south-east of England. Even more important, our unbalanced economy means fewer exports and a huge trade deficit, which creates a series of perverse outcomes.
To protect Sterling Britain needs foreign capital. Companies and assets like utilities and housing are sold off, risking a vicious cycle. Good young firms are sold before they can grow. Utilities profiteer without investing. R&D spend is kept low. Asset prices are propped up.
We need economic growth through a rebalanced economy. Everything – from education to immigration, fiscal and monetary policy to energy, industrial strategy, the regulation of labour markets and supply of housing – must be directed at achieving that objective.
We’ll need to smash shibboleths. Ever freer trade may not work as conventional wisdom assumes. Aggregate demand matters. Intervention works. The supply-side reforms we need most – like retraining programmes and infrastructure and R&D spend – cost money…
Without a radical change in our economic model, there can be no levelling up, no great improvements in productivity or pay, and no improvements in inequality and fairness. This is the only way to build a better society in which everyone can contribute.”
He’s not wrong either: and his solution smells like mercantilism rather than Thatcherism – though I presume the UK, and West, will try to retain as much liberalism as it can.
Of course, there are those who cheer the austerity the UK is about to introduce, despite it showing its fiscal pendulum swinging from extreme stupidity to opposite extreme stupidity without pausing anywhere sensible in the middle of the spectrum. Perhaps they should note that just as US Secretary of State Blinken warned this week –without evidence– that China has accelerated its timetable for action on Taiwan, China is reportedly trying to poach ex-RAF fighter-jet and helicopter pilots to teach the PLA how to evade UK defences for £240,000 a head – the inflation-adjusted cost of 30 pieces of silver, as some put it.
Less romantically, Mike Bird of The Economist notes this is the price of a drab 1-bedroom flat an hour’s commute from London. The West used to be able to coax Soviet experts to defect when the very best the USSR could ever give them was that kind of paltry reward: now we can’t even offer that to our own non-financial elite. Worse, the government is about to slash state spending, which could see a further slew of highly-trained soldiers willing to work for those who can pay their mortgage and gas-bills. If you take a mercenary approach to running the state, is it any surprise its citizens take the same mercenary approach back?
Oops, I am actually describing the bedrock view of neoliberal economics – that individual selfishness produces the best of all socio-economic outcomes, and free trade always rules: yet that ideology was hypocritically fleshed out on the fat back of British mercantilism(!)
For Wall Streeters who only know the name of Li Keqiang, Wang is a brilliant, and brilliantly ideological, intellectual. He sees Western liberalism as failed experiment leading to social, cultural, and economic collapse, and looks to Confucius, Plato, and Schmitt –the source of Nazi jurisprudence– as support for his views that society always comes before the individual. He is, as the SCMP puts it, the “brains behind the throne”, and the architect of the ‘Chinese dream’ concept. The NPC chairman is normally headed by the CCP’s number 2 or 3, and so holds enormous power; the NPC itself is the final interpretation authority of Hong Kong’s Basic Law.
“As one of China’s leading “neo-authoritarian” establishment intellectuals during the late 1980s, Wang constructed a China-specific version of modernization theory inspired by American political scientist Samuel P. Huntington… Wang is therefore one in a long line of thinkers who have identified modernization as a process in permanent tension with the shared belief systems that bind human communities together. Viewed from the perspective of political order, modernization is desirable only insofar it can be counterbalanced with the creation of new value systems whose functional role is to keep institutions strong and societies governable.Strong states are culturally unified states. For an establishment intellectual in the context of CCP-ruled China, this means preserving and centralizing Party authority; renovating and expanding faith in Party socialism; and recalibrating globalization to make the international system more conducive to Party survival.”
If you were waiting for some kind of Pavlovian “now buy all of the things!” signal from the 20th congress, this was not it. By contrast, even if markets are too ignorant to see it –something the deeply-insightful Wang would have predicted to be the case– his promotion would underline how ideological the world is becoming. Bloomberg tried to chip in timidly yesterday that ‘China’s Shock GDP Delay Shows Communist Party Trumps Economy.’ That was a very, very small step in the right (or rather Left) analytical direction.
Post-Marx Marxism, which is mercantilist, is here to stay as a bulwark against Western liberalism. That will accelerate Western liberals shifting to post-liberalism and mercantilism as a response.
At this stage I am supposed to tell you what goes up and what goes down, “because markets”. This should be obvious really. *All* markets will be mightily shaken up in that scenario. However, to spell it out in short, such a process:
Is both inflationary and deflationary. It’s inflationary in the West, and means rates are going to rise further and then not go down by much. It’s deflationary for China. Or it’s even more inflationary for both China and the West, depending on Beijing’s policy response.
Disrupts the real economy, with losers –and winners– by geography and sector. All that is solid melts into air.
Then again, could we see greater market volatility than we already have this year? Could we see more solidity melt than we already have? I’m not sure. That only underlines how far down this ideological path we have already come, even as most of our politicians, and much of the market, clings to denialism.
Biden To Unveil Cunning New Plan To Lower Gas Prices: Drain Even More From The SPR
esident Biden will address the nation tomorrow to explain his next cunning plan to lower gas prices for the average American (except those in California) since OPEC+ snubbed his delay-til-after-the-midterms begging-bowl and decided to cut production last week.
His cunning new plan, we hear you ask?
Well it’s simple – more of the same: blame big oil (gouging and profiteering), blame little oil (greedy local gas station owners), blame the Saudis (who are now Putin puppets)… and drain more of the Strategic Petroleum Reserve.
The Wall Street Journal reports, citing official sources, that central to the president’s address will be a decision for the Energy Department to go ahead and sell the last roughly 15 million of 180 million barrels from the U.S. Strategic Petroleum Reserve he had authorized for sale back in March.
Biden also plans to call on the Energy Department to be prepared for more sales from what’s left of about 400 million barrels in the reserve if Russia or others disrupt world markets, according to the White House.
The SPR is already at its lowest level since 1984…
…and as the chart shows only 130mm barrels above its lows at inception of around 270mm barrels.
However, as we have noted too many times to remember, the problem is not a lack of crude oil but a lack of refining capacity…
Brian Milne, product manager, editor, and analyst at DTN, told MarketWatch:
“U.S. policy pushing away from oil consumption has led to refinery transitions to renewables, or outright closures. This trend accelerated during the COVID-19 pandemic,” and then accelerated further upon Biden’s inauguration.
Gasoline prices at the pump are still up $1.66 from when the Biden administration moved into The White House (but are well off the highs from June)…
And as far as the belief that the previous SPR drainage lowered the gas price, Milne highlighted that the bigger drivers lowering US gasoline prices, however, were “sharply lower demand from China amid its zero-COVID policy that has stymied economic activity, and reduced transportation demand as millions of citizens were either locked down or had other restrictions reduce their mobility.”
Since President Biden has been in The White House, 230mm barrels of crude have been drained from the SPR and gasoline prices for the average American are up $1.66…
That said, imagine where oil prices (and gas prices) would be without the SPR drain! (and maybe, just maybe, that is the point: if market forces allowed to work – as painful in the short-term as they may be – as every energy/commodity trader knows, high prices beget low prices in the end).
Finally, we couldn’t help but consider the case for impeaching the president over such reckless acts.
Consider that first, we learned he was pressing Saudis to help him with elections (Trump was impeached for less ‘quid pro quo’), and now he is draining a critical national asset (enabling a clear national security threat) just to boost approval (for his party’s personal gains), instead of encouraging US production and enabling increased refining.
Bear in mind that the level of the SPR is now at a record low around just 22 days of supply (and will go even further down should the latest plan come into place)…
Cuts from OPEC and Russia, combined with a higher demand from China as its economy emerges from pandemic lockdowns, would lead to new shortfalls in oil supply, according to Neil Beveridge, senior energy analyst at Sanford C. Bernstein. That could push crude prices back to $120 a barrel by the end of 2023, his team forecast.
“That’s when you really need the SPR,” Mr. Beveridge said in an interview.
“And if the SPR has been partially exhausted, it can lead to a steeper escalation in prices.”
But it gets better (or worse), since Bloomberg reports that the administration plans to initiate purchases when West Texas Intermediate crude prices are at or below $67 to $72 per barrel, according to a senior administration official.
Just who do they think will sell them oil at that price?
And while we are doing thought experiments, what’s to stop OPEC+ from cutting output by another 1MM per day for a year and forcing Biden to drain the entire SPR? Inevitably leading to a massive new demand to refill the ’emergency’ reserve, sending prices soaring?
Perhaps that why oil is starting to catch a bid this evening?
We give DTN’s Brian Milne the last word on the actual policy:
“Transferring SPR crude oil from emergency reserves to commercial tanks now would likely not help in lowering retail gasoline prices, or do so only marginally,” adding that “such a policy does not make sense.”
The pileup of LNG tankers highlights Europe’s problem with capacity of terminals
(zerohedge)
Pileup Of LNG Tankers Stranded Off Spain Coast
WEDNESDAY, OCT 19, 2022 – 04:15 AM
Spain has declared an “exceptional operational situation” as several dozen LNG tankers are stuck in line for its regasification terminals, significantly exceeding available slots, according to OilPrice.com.
This week, Spain has made only six unloading slots available Reuters reported, citing unnamed sources, but there are more than 35 LNG carriers idling off its coast. The country has six LNG import and regasification terminals and is the biggest LNG importer in the EU.
The tanker pileup highlights Europe’s problem with LNG import capacity that prompted Germany to urgently strike a deal for the construction of two floating facilities so it can receive LNG directly.
The region has had to find alternative supplies, including LNG, but the arrival of multiple cargoes of the superchilled fuel has exposed Europe’s lack of “regasification” capacity, as plants that convert the seaborne fuel back to gas are operating at maximum limit.
If the backlog is not cleared soon those ships may start looking for alternative ports outside Europe to offload their cargo.
Meanwhile, there is more LNG floating off the European coast, Reuters reported, citing more sources, suggesting the 35-strong tanker crowd off Spain is only part of the actual pile-up.
“Floating storage levels in LNG shipping is at all time high levels with slightly more than 2.5 million tonnes tied up in floating storage,” Flex LNG Management chief executive Oystein Kalleklev told Reuters.
An LNG analyst from ICIS confirmed to Reuters there were a lot of LNG carriers idling off the Spanish and UK coast and circling the Mediterranean. And while they do that, the gas they carry cannot be used or put into storage.
According to ICIS’ Alex Froley, however, insufficient regasification capacity is not the only reason for the pile-up: prices for later deliveries of LNG in Europe are some $2 per mmBtu higher than current prices, which may have motivated some traders to keep their cargo on the water until late November or early December.
Meanwhile, U.S. LNG exports to Europe continue to be strong, despite the outage at Freeport LNG. In September, U.S. LNG producers shipped 87 cargoes of liquefied gas abroad, with the total at 6.25 million tons, Reuters reported earlier this month citing tanker tracking data. Of this, 70 percent went to Europe, the data showed.
8 EMERGING MARKET& AUSTRALIA ISSUES & OTHER EMERGING NATIONS
end
Your early currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:30 AM
Euro/USA 0.9774 DOWN 0.0088 /EUROPE BOURSES // MOSTLY RED (EXCEPT FRANCE CAC)
USA/ YEN 149.65 UP 0.444 /NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL…//YEN TOTALLY COLLAPSES
GBP/USA 1.12354 DOWN 0.01072
Last night Shanghai COMPOSITE CLOSED DOWN 26.58 PTS OR 1.19%
Hang Seng CLOSED DOWN 403.30 POINTS OR 2.38%
AUSTRALIA CLOSED UP 0.39% // EUROPEAN BOURSE: ALL RED EXCEPT FRANCE CAC)
Trading from Europe and ASIA
I) EUROPEAN BOURSES ALL RED EXCEPT FRANCE CAC)
2/ CHINESE BOURSES / :Hang SENG CLOSED UP 403.30 PTS OR 2.38%
/SHANGHAI CLOSED DOWN 26.58 PTS OR 1.19%
AUSTRALIA BOURSE CLOSED UP 0.34%
(Nikkei (Japan) CLOSED UP 101.24 PTS OR 0.37%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1634.55
silver:$18.44
USA dollar index early WEDNESDAY morning: 112.72 UP .72 CENT(S) from TUESDAY’s close.
The USA/Yuan, CNY: closed ON SHORE (CLOSED ..(DOWN) AT 7.2275
THE USA/YUAN OFFSHORE: (YUAN CLOSED (UP)…. 7.2644
TURKISH LIRA: 18.59 EXTREMELY DANGEROUS LEVEL/DEATH WISH/HYPERINFLATION TO BEGIN.
the 10 yr Japanese bond yield at +0.249
Your closing 10 yr US bond yield UP 9 IN basis points from TUESDAY at 4.092% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic
USA 30 yr bond yield 4.094UP 7 in basis points
Your closing USA dollar index, 112.64 UP 66 PTS ON THE DAY/1.00 PM/
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates WEDNESDAY: 12:00 PM
London: CLOSED DOWN 11.75 PTS OR 0.17%
German Dax : CLOSED DOWN 24.30POINTS OR 0.19%
Paris CAC CLOSED DOWN 26.28PTS OR 0.43%
Spain IBEX CLOSED DOWN 27.70 OR 0.31%
Italian MIB: CLOSED DOWN 46.67PTS OR 0.22%
WTI Oil price 83.48 12: EST
Brent Oil: 90.56 12:00 EST
USA /RUSSIAN /// RUBLE RISES TO: 61.59 UP 0 AND 5/100 RUBLES/DOLLAR
GERMAN 10 YR BOND YIELD; +2.3456
CLOSING NUMBERS: 4 PM
Euro vs USA: 0.97740 DOWN .0089 OR 89 BASIS POINTS
British Pound: 1.12188 DOWN .01232 or 123 basis pts
BRITISH 10 YR GILT BOND YIELD: 3.92%
USA dollar vs Japanese Yen: 149.89 UP 0.684//YEN DOWN 68 BASIS PTS
USA dollar vs Canadian dollar: 1.3764 UP 0.0036 (CDN dollar, DOWN 36 basis pts)
West Texas intermediate oil: 85.76
Brent OIL: 92.28
USA 10 yr bond yield UP 13 BASIS pts to 4.129%
USA 30 yr bond yield UP 11 BASIS PTS to 4.126%
USA dollar index:112.81 UP .81 CENTS
USA DOLLAR VS TURKISH LIRA: 18.57
USA DOLLAR VS RUSSIA//// ROUBLE: 61.74 DOWN 0 AND 16/100 ROUBLES
DOW JONES INDUSTRIAL AVERAGE: DOWN 99.99 PTS OR 0.33 %
NASDAQ 100 DOWN 44.36 PTS OR 0.40%
VOLATILITY INDEX: 30.76 DOWN 0.26 PTS (0.85)%
GLD: $151.69 DOWN 2.06 OR 1.34%
SLV/ $17.23 DOWN $221 OR 1.28%
end)
USA trading day in Graph Form
Stocks, Bonds, & Bitcoin Dump As Black Gold & The Buck Jump
WEDNESDAY, OCT 19, 2022 – 04:00 PM
Soaring UK inflation, escalating Ukraine tensions, ugly housing starts data, hawkish Kashkari comments, more UK govt chaos, Biden blame-scaping everyone but himself for high gas prices, a ‘meh’ Beige Book, and The Fed’s Jim Bullard re-iterating his previous hawkish stance and adding that “The Fed should not react to declines in the stock market” summed up the day.
The machines refused to rally despite all this bad news…
Despite UK inflation soaring back above 10% today, gilt yields continued to slide (pension crisis over?) with 30Y gilt yields puking back below 4.00% after the BOE said it would exclude long-maturity debt from QT which is set to start on Nov. 1…
Source: Bloomberg
US Treasury yields exploded higher today (and the 20Y auction was a bloodbath) with yields up 10-12bps across the entire curve. On the week, the 30Y is underperforming (+13bps) while the short-end (2Y) is up only 5bps or so…
Source: Bloomberg
10Y yields soared above 4.00% to their highest since June 2008…
Source: Bloomberg
As the much-watched 3m10y yield spread tumbled to just 7bps…
Source: Bloomberg
Fed rate-trajectory expectations shifted hawkishly today (with the terminal rate reaching new cycle highs around 4.977%)…
Source: Bloomberg
The market is now pricing in a full 75bps for Nov (and a 12% chance of 100bps hike) and pricing in 60% odds of 75bps more in December.
Credit markets were weaker today (while HYG has been rallying along with stocks the last few days, LQD has not and hit new cycle lows today)…
Source: Bloomberg
Consider this: LQD on 10/19/2022 is at $100. LQD on 9/15/2008 was $100…
Source: Bloomberg
High yield credit spreads are at their highest since the start of the pandemic. As Bloomberg reports, HYCDX, the gauge measuring risk of 100 non-investment grade entities, hit the three standard-deviation threshold on Sept. 27 for only the second time in the last decade.
Source: Bloomberg
A “tremendous amount” of leverage has been added over the past dozen years, especially since March 2020, and the process of unwinding “takes time,” according to Matt Maley, chief market strategist at Miller Tabak + Co.
While risk levels aren’t yet extreme, “it’s during the second leg of a bear market that something blows-up,” he wrote in a note.
US equity markets rallied briefly after the close last night thanks to NFLX earnings but as Asian and then European sessions rolled by, futures weakness accelerated. This was briefly interrupted at the US cash equity open, but then the selling resumed, erasing all of yesterday’s gains. Small Caps were the ugliest horse in the glue factory, down over 2% on the day…
The Energy Sector was the only one to close green today (as oil soared after Biden’s remarks) and Real Estate and Financials were the day’s biggest losers…
Source: Bloomberg
The USDollar soared back to unchanged on the week today as JPY and GBP both stumbled further…
Source: Bloomberg
The offshore yuan fell to a new record low against the dollar…
Source: Bloomberg
Bitcoin drifted lower once again but held above $19k for now…
Source: Bloomberg
Energy prices spiked today despite Biden’s cunning plan to lower gas prices.
WTI ramped back above $85…
Wholesale gasoline prices also spiked notably after Biden’s remarks…
Gold continued to roundtrip back towards 9/28 lows…
Finally, we note that FX volatility has exploded, credit spreads have exploded, bond uncertainty has exploded… but equity risk expectations remain muted…
Source: Bloomberg
…for now.
I) / LATE MORNING// TRADING//
.
AFTERNOON TRADING//
ii) USA DATA/
USA economy is floundering: uSA house starts plunge due to affordability. USA homebuilder confidence crashes
(zerohedge)
US Housing Starts Plunge As Homebuilder Confidence Crashes
WEDNESDAY, OCT 19, 2022 – 08:38 AM
With homebuilder confidence collapsing – especially expectations of future sales – housing starts and permits were expected to slide in September but the results were mixed…
US Housing starts plunged 8.1% MoM in September (worse than the -7.2% expected), but the forward-looking permits unexpectedly rose 1.4% MoM (-0.8% MoM exp) and August was revised to a slightly smaller drop.
Source: Bloomberg
On a SAAR basis, starts and permits continue their broad trend lower (with a tiny uptick in permits)…
Source: Bloomberg
The unexpected rise in permits is all due to multi-family units as renter-nation escalates: Single-family permits tumbled 3.1% MoM while multi-family permits soared 8.2% MoM…
On the other side, single family starts plunged 4.7% to 892K SAAR, the lowest since May 2020…
So, finally, as we started, what happens next for home starts? If homebuilders are that sanguine about future sales expectations why would they be building any more homes?
Source: Bloomberg
Is this what Powell wants? And what will this mean for home prices (less supply)?
III) USA ECONOMIC STORIES
New York City homeless shelter population hits record highs
(zerohedge)
“This Is Unsustainable”: NYC Homeless Shelter Population Hits Record High
TUESDAY, OCT 18, 2022 – 06:40 PM
It’s a ticking time bomb.
New York City Mayor Eric Adams declared a state of emergency earlier this month as the city’s homeless shelter population exploded to a record high due to an endless stream of migrants bussed up from the southern border.
NYC’s Department of Homeless Services reported 62,174 people are now living in the city’s shelters, exceeding the previous record of 61,415 set in January 2019, according to New York Daily News.
Adams’ administration has blamed the shelter chaos on an influx of migrants from border states. He has forecasted a billion-dollar cost to house and provide social services to the migrants.
“This is unsustainable. The city is going to run out of funding for other priorities,” Adams recently warned. “Local government cannot be the solution for national crisis – especially manufactured crisis.”
Construction is underway for a migrant humanitarian emergency center at Randall’s Island. It would be the first stop where migrants bussed from border states to NYC would be processed.
The city’s shelter system is cracking, and nearly every homeless shelter is at full capacity as the cold season begins.
In addition to setting a new population record, the average length of stay has also surged to all-time highs, with single adults now spending an average of 509 days in shelters, according to city data. Families with kids are, on average, in a shelter even longer — 534 days — and adult families spend an astonishing 855 days in shelters on average, the data shows. — New York Daily News
The official count as of last week is around 19,000 Central and South Americans have entered the city homeless shelter intake system. Adams said the influx of migrants could soon send the shelter population above 100,000.
But it’s not just migrants adding to the count, Kathryn Kliff of the Legal Aid Society told CBS News:
“The fact that we are at a record high number of people in shelters is not just a result of recent migrants – it’s a result of vast homelessness in New York City and the city failing to prioritize affordable housing for new Yorkers, and this has been going on for years.”
NYC’s homeless say migrants are being prioritized over them.
What’s even more astonishing is that mainstream corporate media blamed the migrant influx on Texas Republican Governor Greg Abbott, though as we pointed out, one Democrat-led Texas border city has been shipping thousands of illegals to sanctuary cities like New York City and Chicago.
end
III B USA COMMODITY PROBLEMS//INFLATION WATCH
SWAMP STORIES
Biden’s family got ‘interest-free,’ ‘forgivable’ loan from China, new evidence reveals | Just The News
Robert Hryniak
8:14 AM (17 minutes ago)
to
Some people may say after reading this is that Joe Biden is simply a Manchurian candidate for China. Whether that might be the case or not it really does not matter as it is quite clear the conflicts of interest are most evident and not becoming of the office he holds.
Biden’s family got ‘interest-free,’ ‘forgivable’ loan from China, new evidence reveals
2017 business email and new information released by Sen. Chuck Grassley expose Chinese effort to enrich first family.
President Joe Biden has made waves this fall with his plan to forgive hundreds of billions of dollars of student loans, shifting the burden to taxpayers. Five years earlier, his family cashed in on a zero-interest, forgivable loan of its own from an energy company in communist China, according to evidence in the possession of the FBI.
The loan arrangement, confirmed in documents obtained by Just the News and also new information released by Sen. Charles Grassley (R-Iowa), shows the Chinese energy firm CEFC Beijing International Energy Company Limited understood the transaction would benefit Joe Biden’s family (referred to as “BD family” in the emails), but it also was creating heartburn with its own compliance/risk management officers.
The Chinese company’s leaders “fully support the framework of establishing the JV (joint venture), based on their trust on BD family,” stated a July 26, 2017 email from a CEFC official to Tony Bobulinski, a Hunter Biden business partner at the time. The email was written in part to explain why there had been a delay in getting the money to a firm called SinoHawk associated with the future president’s son and brother, Hunter Biden and James Biden, respectively.
“The delay of wire is caused by the details on the JV building, as follows: 1) the positioning and strategy of the JV are not made fully clear to CEFC 2) 5 million is lent to BD family in the 10 million charter capital. How will this 5 million be used (or the 10 million as a whole)? This 5 million loan to BD family is interest-free,” the email stated.
“But if the 5 M is used up, should CEFC keep lending more to the family?” the email inquired. “If CEFC lends more, they need to know the interest rate for the subsequent loan(s).”
The CEFC official went on to explain the nebulous transaction was raising worries with the company’s compliance officers. “Because of the reasons above, the risk management department of CEFC is showing concerns on the operation of SinoHawk, hence the delay of the wire,” CEFC’s Raymond Zhao wrote.
At the time of the transaction, Joe Biden had already left the White House as vice president, was a private citizen and was planning for his eventual 2020 presidential run. Bobulinski has said in media interviews that Joe Biden was a silent partner in the Chinese transaction, identified in internal documents as “the big guy” who might get 10% of the deal.
Grassley on Monday released a letter he sent to the FBI that contained a summary of an October 2020 interview Bobulinski gave to the FBI concerning the Chinese loan transaction.
According to Grassley, the $5 million Chinese transaction was paid to a Hunter Biden-connected firm in August 2017, one month after the email obtained by Just the News. Bobulinski told the FBI that some of the Chinese money paid in 2017 was actually deferred compensation for work Hunter and James Biden had done while Joe Biden was still vice president, Grassley wrote. Grassley and Sen. Ron Johnson previously have said some $6 million paid in spring 2017 was appeared to be for pre-2017 work.
“In that interview, Mr. Bobulinski stated that the arrangement Hunter Biden and James Biden created with foreign nationals connected to the communist Chinese government included assisting them with potential business deals and investments while Joe Biden was Vice President; however, that work remained intentionally uncompensated while Joe Biden was Vice President,” Grassley wrote, culling information from the summary of Bobulinski’s FBI interview.
“After Joe Biden left the Vice Presidency, the summary makes clear that Hunter Biden and James Biden worked with CEFC and affiliated individuals to compensate them for that past work and the benefits they procured for CEFC,” the senator wrote.
Grassley said the scheme “to compensate the Bidens was supposed to consist of an unsecured $5 million loan, intended to be forgivable, from CEFC in 2017.” The senator said his office has information that a few months before the $5 million was paid “Hunter Biden yelled at CEFC officials at a meeting for failing to fund the joint venture” and that “James Biden considered calling CEFC officials and threatening to withdraw Biden family support from future deals.”
Grassley’s letter said that when the money was finally paid it did not go to the SinoHawk firm involving Bobulinski as originally conceived. Rather, it was sent to a Biden family-connected firm called Hudson West III before being transferred to entities tied to Hunter Biden and James Biden, the senator related.
Lawyers for Hunter Biden and James Biden have denied their clients have done anything wrong, but have declined to answer specific questions from Just the News.
President Biden has also defended his family. “I am proud of my son,” he said in a recent CNN interview.
Grassley said the evidence his team has assembled from whistleblowers and other sources suggests the FBI “possesses significant, impactful, voluminous evidence of potential criminality in Biden family business arrangements.”
“Based on allegations provided to my office,” Grassley wrote, “the information provided by Mr. Bobulinski formed a sufficient basis to open a full field investigation on pay-to-play grounds; however, it is unclear whether the FBI did so and whether the information is part of the ongoing criminal investigation” of Hunter Biden in Delaware led by U.S. Attorney David Weiss.
UK’s new finance minister scraps almost all planned tax cuts in bid to appease marketsThe major U-turn includes scrapping the cut for the lowest rate of income tax from 20% to 19%.Hunt said the reversed tax cuts totaled £32 billion ($36 billion) a year.https://www.cnbc.com/2022/10/17/uks-new-finance-minister-sets-out-.html
UK’s Hunt says he will raise 32 bln pounds more in tax, limit power subsidieshttp://reut.rs/3rZFq6k
@Steven_Swinford: Jeremy Hunt announces new economic advisory council including Rupert Harrison, former chief of staff to George Osborne who is now at investment manager BlackRock (The new GS?)
The Hunt news appeared at 6:09 ET, hours before ESZs soared for the NYSE open and thereafter.
From Monday’s King Report: This is expiry week; and important companies report Q3 results… The usual suspects are very bullish…
ESZs rallied moderately when Asia opened but then they traded sideways in a small range until a spike higher at the European open appeared. ESZs then traded sideways with a slight upward bias until he rally for the NYSE open materialized. ESZs and stocks soared on and after the NYSE open. ESZs hit a peak of 3702.50 at 10:21 ET. They then fell to 3668.25 at 11:16 ET.
The rally for the European close appeared on schedule and persisted until 12:09 ET. After a modest retreat, ESZs and stocks went inert until a modest rally appeared with 15 minutes remaining in NYSE trading. Alas, sellers appeared with 6 minutes remaining. ESZs and stocks sank into the close.
The equity rally was led by Fangs, which is a staple of expiry week. The usual suspects poured into Fangs and Fangs options for the expected upward manipulation, and because Fang earning reporting begins tomorrow with Netflix. The NY Fang+ Index was +5.16% near noon ET.
The pound rallied sharply after Hunt’s budget announcement; but the yen/$ hit 149.08. The usual suspects not only ignored the yen drop, but they also ignored the big reversal in bonds. USZs hit a peak of 124 28/32 at 9:00 ET; at 15:55 ET, USZs hit a daily low of 123 6/32, -20/32 for the day.
Fauci says school closures led to ‘deleterious collateral consequences,’ but he had ‘nothing to do’ with ithttps://trib.al/ZDcchHE
Today – Though ESZs surged before the NYSE open, they and stocks were flat for the remainder of the session. This is a bad omen for today. Secondly, SPY October put and call volumes were lackluster. The big players have not yet committed resources for the October expiration. Ergo, the expiry play has not yet materialized. Watch SPY October options for clues as to impact traders’ intentions for today.
The yen is 149.00/$ (150, here we come!) a d someone is juicing ESZs; they are +31.00 at 20:00 ET.
Expected economic data: Sept Industrial Production 0.1% m/m, Mfg Production 0.3%, Capacity Utilization 80%; Oct NAHB Housing Market Index 43; Alt Fed Pres Bostic 14:00 ET
S&P 500 Index – Trender trading model and MACD for key time frames Monthly: Trender and MACD are negative – a close above 4570.18 triggers a buy signal Weekly: Trender and MACD are negative – a close above 3954.41 triggers a buy signal Daily: Trender is negative; MACD is positive – a close above 3743.32 triggers a buy signal Hourly: Trender and MACD is positive – a close below 3578.87 triggers a sell signal
@mirandadevine: Interesting story which adds more light to Trump’s decision to appoint Chris Wray as FBI director. Probably his worst personnel decision.
President Trump’s nominee for FBI director, Christopher Wray, represented Gov. Chris Christie as his personal, publicly-funded Bridgegate attorney for 11 months before signing a mandatory retainer agreement… But it wasn’t until August 2015, 11 months later, that Wray and Christie formally agreed to the arrangement. Several lawyers who work with the government said the extended delay was extraordinarily unusual, possibly unethical, and could indicate that Christie… was keeping it hidden from the public that he had a taxpayer-funded criminal attorney…Shortly thereafter Christie recommended Wray to his friend, President Trump, for the job of FBI director… https://www.wnyc.org/story/ethics-question-christies-hiring-fbi-director-nominee-bridgegate-attorney/
Christie now loathes Trump and regularly inveighs against him. The Donald sure can pick ‘em!
FOX NEWS POLL: U.S moving away from Capitalism and more towards Socialism would be: Good Thing: 32%, Bad Thing: 60%; Socialism: Good/Bad: Democrats: 𝟱𝟯/35, Republicans: 14/83 Independents: 24/63https://twitter.com/IAPolls2022/status/1581654689426595842
Media blast DeSantis easing voter rules in areas hit hardest by Hurricane Ian because they are more Republican (Now do the 2020 mail voting in blue cities! Liberal hypocrisy is boundless!) DeSantis signed an emergency executive order that expanded mail-in ballot access and early voting availability to counties that were heavily damaged by the Category 4 hurricane… https://www.foxnews.com/media/media-blast-desantis-easing-voter-rules-areas-hit-hardest-hurricane-ian-republican
Bank of England set to further delay sales of government bonds until markets calm – FT The Financial Times has learnt that the Bank’s top officials have come to this view after judging the gilts market to be “very distressed” in recent weeks, a view backed by its Financial Policy Committee… https://www.ft.com/content/92a0de1a-a710-4460-8bb1-a98cb9932995
@jvisser_weiss: Bank deposits down another 117b dollars last week and 325b in the last 6 weeks. The only week in the last 40 years greater than last week was the week after 9/11. M2 is falling quickly. https://t.co/fBjDrNJSTj
White House to Tap Oil Reserve Again Amid High Fuel Prices Efforts come as gasoline prices set off alarms before election (Will OPEC+ plan more production cuts?) The Biden administration is moving toward a release of at least another 10 million to 15 million barrels of oil from the nation’s emergency stockpile in a bid to balance markets and keep gasoline prices from climbing further, according to people familiar with the matter. The move would effectively represent the tail end of a program announced in the spring to release a total of 180 million barrels of crude from the Strategic Petroleum Reserve. About 165 million barrels has been delivered or put under contract since the program was put into effect… https://www.yahoo.com/now/white-house-planning-oil-release-020843069.html
$200 Diesel Puts Biden in an Ugly Corner – American stockpiles of distillate fuel are exceptionally low, which could mean higher costs for everything from trucking to farming to construction. The US has just 106 million barrels of diesel and heating oil in commercial stocks; the last time inventories were that low in mid-October was in 1951…Typically, inventories should be 30% higher this time of the year… Such low levels are alarming because diesel is the workhorse of the global economy. It powers trucks and vans, excavators, freight trains and ships. A shortage would mean higher costs for everything from trucking to farming to construction. The diesel crisis leaves the Biden administration facing very difficult choices… https://t.co/MyfkfJxtWL
Momentum Builds for Creating a Treasury Bond Buyback Program The buybacks in 2000 to 2002 were done to allow the Treasury to continue to sell new bonds to maintain its market access at a time when the federal government was running a budget surplusand didn’t need the money. Funds raised by selling new bonds were used to repurchase old ones… The Bloomberg US Government Securities Liquidity Index — a gauge of deviations in yields from a fair value model — remains near the highest levels since March 2020, when a flight to cash prompted the Fed to begin buying securities to stabilize the market… https://finance.yahoo.com/news/momentum-builds-creation-treasury-bond-174307311.html
The elephant in the room question: How does removing US Treasuries from the market increase liquidity? Of course, it doesn’t! It’s another scheme to lower rates for the Midterms Elections. As we asked a few missives ago, if Biden is rigging the oil market and indicates that he wants to rig the Treasury market for political expediency, will Team Biden rig or has Team Biden rigged the stock market?
@nickgerli1: Homebuyer Traffic just collapsed to lowest level since start of 2008 Housing Crash. -61% YoY. Not good. https://t.co/8NGB0PAj58The collapse in Buyer Traffic is coming JUST AS Builders have a near record number of Homes Under Construction (Yellow Line). Which means… More Inventory. More Price Reductions. Coming Fall/Winter 2022. This suggests that Homebuilder Stocks could still be very overvalued. For instance – DR Horton’s current Stock Price of $72/Share is still well above pre-pandemic. Yet the last time Buyer Traffic was this low – DHI was trading at $18/Share.
As noted in yesterday’s missive, someone juiced ESZs during early Asian trading on Tuesday. ESZs then went vertical from 23:25 ET to 24:32 ET, soaring 47 handles. After a 41-handle decline, ESZs began another rally at 5:40 ET. ESZs then rallied to a daily high of 3777.25 at 9:31 ET. There was over-the-top bullishness for the NYSE open and expected option-related buying by gullible and retail traders.
Alas, the overnight ESZ rally was a grand pump & dump scheme! ESZs tumbled to a daily low of 3697.25, -80.00 from the high, at 11:37 ET. The post-European close relief rally was robust.
Will Team Biden propose buying/monetizing ESZs to lower stock market volatility?
USZs traded modestly higher during early Asian trading but soared during the final hour of Nikkei trading, hitting a daily high of 123 31/32 at 00:35 ET. USZs then sank to 122/32 at 5:33 ET. After a strong rally back toward the daily high, USZs formed a double top (123 30/32 & 123 28/32) at 8:38 ET and 10:02 ET. USZs then plunged to a daily low of 122 12/32 at 11:40 ET. USZs action was almost identical to ESZs. Was there a pump & dump scheme in USZs, too?
Both USZs and ESZs rallied sharply after Europe closed. USZs zoomed to 123 10/32 at 12:40 ET. ESZs jumped to 3736.25 at 12:42 ET. Were wise guys manipulating ESZs because Tuesday was the last day of TRADING for October VIX options? Today is October VIX expiration.
The rebound ESZ and USZ rallies ended near 13:00 ET due to this: Bank of England says first gilt sales to be held on Nov. 1http://reut.rs/3ERFKvM
But the desire to perform the expiry manipulation was strong, the ESZ and USZ rallies resumed.
The ESZ decline stalled at 14:48 ET on buying for the expected last-hour upward manipulation. ESZs and stocks went inert until the upward manipulation appeared at 15:30 ET. The upward thrust ended within 3 minutes. ESZs then vacillated in a small range until a 6-handle spike appeared at 15:50 ET. ESZs quickly reversed into a 13-handles decline in 5 minutes. ESZs jumped higher at the close.
4 minutes after the NYSE close, Netflix reported more (2.41m vs 1.09m exp.) Q3 subscribers than expected, EPS of 3.11 vs 2.13 consensus, and rev of $7.93B vs $7.84B expected. NFLX soared 15.6%.
The USZ afternoon rally persisted until 14:30 ET. They then went dead. The yen/$ hit 149.38. Will the BoJ intervene if the yen/$ hits or breaches 150?
Positive aspects of previous session Stocks soared on expiry-related manipulation and earnings season buying
Negative aspects of previous session ESZs and bonds declined sharply after peaking near 10:00 ET The ESZs and US stock highs occurred within a minute of the NYSE open Apple’s iPhone 14+ production cut weighed on stocks
Ambiguous aspects of previous session Has the expiry manipulation hit its zenith?
First Hour/Last Hour Action [S&P 500 Index]: 1st Hour from NYSE open:Down; Last Hour: Up
Pivot Point for S&P 500 Index [above/below indicates daily trend to traders]: 3723.27 Previous session High/Low: 3762.79; 3686.53
@EthicalSkeptic: And there we have it with today’s Wonder data drop folks. Undeniable smoking gun proof. CDC is now (post ‘system upgrade’) unilaterally shifting Cancer UCoD deaths to Covid UCoD deaths (even trivial nosocomial cases of Covid). Thereby hiding the stark cancer increase from you. https://twitter.com/EthicalSkeptic/status/1582396922278850560 TES adjusted this last Cancer Mortality Curve by best feel for the dynamics of the info – and reassigned 75% of those fraudulent records back to Cancer. The actual number was 78.7%. Thus, TES was correct about the Cancer trend all along. We are in a 9+ sigma Cancer event.
Is It Possible the Chinese Really Did Hack Our Elections? (Who would China want to win?) A number of weeks ago True the Vote broke the story that a company called Konnech in Michigan was storing data on American election workers on servers in China. True the Vote leaders Catherine Engelbrecht and Gregg Phillips were, of course, ridiculed by the so-called mainstream press. Then, Los Angeles arrested the head of Konnech and charged him with violations of U.S. laws on the handling of personally identifiable information – by storing it on servers in China. The ridicule stopped. Even the New York Times had to issue a retraction. It has gotten much worse since then. Konnech wasn’t just storing data in China. Konnech was using contractors inside China to do work in the United States on American election systems. This is the exact language in the criminal complaint filed by Los Angeles…Konnech gave Chinese contractors in mainland China “super-administration access” to the electoral systems on which Konnech worked… An individual with super administration access to a system can do effectively anything inside that system. He or she can delete data, steal data, alter data, change programming, etc. Perhaps most importantly, that individual can cover his or her tracks, because they can potentially also access and alter all security protocols and programs… https://andmagazine.substack.com/p/is-it-possible-the-chinese-really
FBI has ‘voluminous evidence’ against Hunter, James Biden: Sen. Grassley “These documents also indicate that Joe Biden was aware of Hunter Biden’s business arrangements and may have been involved in some of them.”… https://t.co/lVJnn0OhY8
Blinken Says China Wants to Seize Taiwan on ‘Much Faster Timeline’ China has made a decision to seize Taiwan on a “much faster timeline” than previously thought, Secretary of State Antony Blinken said on Monday, shortly after China’s leader reiterated his intent to take the island by force if necessary… https://www.yahoo.com/news/china-sees-much-faster-timeline-043427315.html
Today is Weird Wednesday and VIX expiration for October options. Given that ESZs peaked at one minute after the NYSE open and there was a late afternoon tumble for ESZs and stocks, it’s reasonable to assume: 1) there was a major pump & dump scheme on Tuesday; 2) another scheme for the final trading day of October VIX options occurred; and 3) the peak intensity of the October expiry manipulation might have occurred due to the noted schemes.
Watch SPY October options for clues as to impact traders’ intentions for today.
ESZs hit +40.50 at 19:20 ET on Netflix’s results. Barring new developments or news, ESZs augur for manic buying at the NYSE open. If stocks are strong into the 14:15 ET VIX Fix, be alert for a reverse afterward because the VIX Fix will be the settlement for October VIX options.
Expected economic data: Sept Housing Starts 1.464m, Permits 1.53m; Fed Beige Book 14:00 ET, Minn Fed Pres Kashkari 13:00 ET; Biden will present a plan to lower gasoline prices – Reports say The Big Guy will blame big oil for excessive profits and confirm a 15m bbl SPR release to lower gasoline prices. Will a real reporter ask Joe how that helps with US refineries near capacity? Reports also risibly state Biden will refill the SPR by purchasing WTI oil at $67-$72 a barrel. Oil is $83.43.
Biden approval stuck at 40%, a dark sign for Democrats in midterms, Reuters/Ipsos poll showshttp://reut.rs/3yPgO3S
With the US Midterms Elections only 20 days away and polls increasingly indicating a Red Wave, Team Biden and Dems will keep tossing Hail Marys at the public.
WSJ: Obama Warned Us About Joe – The White House offers Democrats nothing good to say on the big issues. On the eve of the 2020 Iowa caucuses, Politico lobbed a grenade in Joe Biden’s direction. It was a story noting that the former vice president was trying to play the Obama card—even though Barack Obama hadn’t endorsed the man who had served him faithfully for eight years. The money quote was cutting: “Don’t underestimate Joe’s ability to [expletive] things up.” It isn’t only that President Biden’s policies aren’t working. It’s that he continues to insist they are—against the everyday experience of ordinary Americans… https://www.wsj.com/articles/obama-warned-us-about-joe-midterms-election-candidate-crime-border-woke-agenda-democrats-inflation-prices-11666037193
S&P 500 Index – Trender trading model and MACD for key time frames Monthly: Trender and MACD are negative – a close above 4570.18 triggers a buy signal Weekly: Trender and MACD are negative – a close above 3954.41 triggers a buy signal Daily: Trender is negative; MACD is positive – a close above 3743.32 triggers a buy signal Hourly: Trender and MACD are positive – a close below 3619.58 triggers a sell signal
Biden admin pressured Dem El Paso mayor not to declare state of emergency over city’s migrant crisis https://trib.al/K773CrH
Biden ridiculed for spelling out ‘dot’ in website URL: ‘He will literally read any words’ Biden stumbled along promoting the FTC’s website, spelling out the word “dot” while giving the URL. “If you get any questionable calls, please tell us by going to report fraud…report fraud, D-O-T, F-T-C, dot gov,” Biden said, for the website reportfraud.ftc.gov… https://www.foxnews.com/media/biden-ridiculed-spelling-dot-website-url-literally-read-words
9th Amendment: “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”
The Ninth Amendment was part of the Bill of Rights that was added to the Constitution on December 15, 1791. It says that all the rights not listed in the Constitution belong to the people, not the government. In other words, the rights of the people are not limited to just the rights listed in the Constitution. https://www.ducksters.com/history/us_government/ninth_amendment.php
BIZARRE: Biden Ends Speech with ‘I’m Sorry…My Mother Would be Very Angry’ Biden ended his pro-abortion speech Tuesday in a very unexpected way, apologizing to supporters on the stage…“I was apologizing for my back. My mother would be very angry. I was talking with people, with my back to them.” National radio host Todd Starnes said, “clearly, Biden is off his meds.”… https://www.toddstarnes.com/politics/bizarre-biden-ends-speech-with-im-sorry-my-mother-would-be-very-angry/
A political pundit, whose name escapes us, commented last weekend that abortion is not a big issue, even for most Democratic voters; but it is a huge issue for Democrat donors.
Receipts: Kari Lake Calls Out ‘Election Denier’ Democrats and Their Media Lickspittles Republican Arizona gubernatorial candidate Kari Lake – whose opponent is too petrified to debate – spent two minutes slamming the press for demonizing Trump supporters as ‘election deniers’ when the left has an extensive history of doing just that…”Let’s talk about election deniers, here’s 150 examples of Democrats denying election results,” said Lake, showing the papers to the cameras. “Oh wow, look at this, this is from Joe Biden’s press secretary: ‘reminder, Brian Kemp stole the gubernatorial election from Georgians and Stacey Abrams,’ a Democrat saying that, an election denier!” “Oh look at this, ‘just heard Republican Ryan Costello said it would be difficult for Stacey Abrams to win because she lost her state bid, but she’s still claiming she never lost.” “Hillary Clinton: ‘Trump is an illegitimate President’,” Lake continued… https://www.zerohedge.com/political/receipts-kari-lake-calls-out-election-denier-democrats-and-journalist-lickspittles
Steele dossier source Igor Danchenko acquitted of lying to FBI in latest Durham trialhttps://trib.al/An9frcB
Numerous attorneys opined that Danchenko would be acquitted because the trial showed gross negligence and probable FBI corruption, which Special Counsel Durham noted in his closing remarks.
@seanmdav: Everyone at the FBI was in on the con. Everyone knew everyone else was lying. Heck, the FBI paid Danchenko tons of money to keep feeding them lies. And not a single corrupt FBI apparatchik has gone to jail for it. And we have Barr and Durham to thank for that. Durham could have and should have gone scorched earth on the corrupt FBI. Instead, he crafted a handful of cases about how the poor widdle FBI was “duped” by Sussmann and Danchenko, two left-wing con artists paid to peddle nonsense.
@TomFitton: Another Durham fail. Rather than putting corrupt Obama, DOJ/FBI & Clinton gang leaders on trial, he targets third tier operative, Clinton Russian spy and FBI asset. The acquittal is no surprise.
@themarketswork: I hate to say it, but forget about Danchenko. Yes. There were mistakes.But what WAS proven beyond doubt is that the FBI is corrupt. And should be completely dismantled. Same goes for the broader IC Community.The MUCH larger issue is how will this problem be addressed?
@DailyCaller: Tucker Carlson: “Elon Musk purchasing Twitter is more than a potential change to the media landscape. It is a true existential threat to the hegemony of the people currently in charge.” https://twitter.com/DailyCaller/status/1582524396702666752
Precious metals expert and financial writer Bill Holter said in June it was “game over, they’re pulling the plug.” The Fed went on an aggressive interest rate raising policy and is still raising rates. Now, the economy is staggering. Holter explains, “For sure, we are already in a recession. We are now in the third quarter of negative growth. I think it is laughable that people put odds on whether or not we are going to go into a recession because it is obvious–we are already in a recession. Rates rising have absolutely frozen the real estate market. If you own a property, who is going to buy it? Rates have gone from 3.25% to more than 7%. I am on the record that once we saw a 3% yield on the 10-Year Treasury, you would start to see a tightness in credit. Now, we are over 4%. What few people are talking about is what has this already done to the derivatives market? . . . Think about how big the derivatives market is. Total credit worldwide is $350 trillion, but you have derivatives pushing $2 quadrillion. I have said this all along, derivatives will blow up. Warren Buffett has called them financial weapons of mass destruction. They are far bigger than central banks can fix.”
Holter goes on to say, “The real economy runs on credit. Everything you look at, everything you touch and everything you do every day has many uses of credit to get to the final product or situation. So, once credit freezes up, it’s completely game over. In a past interview, I said they are pulling the plug. They have to pull the plug because, mathematically, the debt cannot be paid. The derivatives cannot perform. So, they have to pull the plug. They also have to do one other thing, and that is they have to kick the table over. What will the false flag event be? I have no idea. . . . They have to kick the table over so they can say our policies were working, but whatever this event will be stopped them.”
Holter thinks the odds of having the midterm election is “less than even.” The Democrats are so far behind because of their disastrous economy.
Holter says, “If you think the inflation over the last two years is bad, just wait. Along with that, you are going to have a huge wave that will last many years, but the initial destruction will probably happen in a three-day period of time. . . .You are going to see massive deflation, deflation of asset prices. . . . It will be inflation of the things you need and deflation of the things you have.”
Holter says, “From a math standpoint, the situation is so bad, liquidity is so tight . . . the whole shithouse is about to come down, and when it does, you will count your wealth in ounces and not dollars, yen or euros. . . . When all is said and done, it’s about how many ounces do you own.”
In closing, Holter warns, “The action you are seeing now is exactly what you saw in 1987, and this is what you saw in August and September of 1929. This is what happens prior to crashes. It’s massive volatility both ways . . . people are losing both ways. The longs get stopped out on the downside, and the shorts get stopped out on the upside. Then, the whole floor gives way, and that’s where we are. We are right on the doorstep of a crash that will make 1987 and 1929 blush. . . . Many people are going to lose everything overnight.”
There is a lot more in the 39-minute interview.
Join Greg Hunter as he goes One-on-One with financial writer and precious metals expert Bill Holter for 10.18.22.
We will let you know if or when Bill Holter starts his own website. If he does, it will probably be BillHolter.com as he already owns this URL. Let’s hope he does because we need him in the game
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