OCT 20//ANOTHER GOLD AND SILVER MANIPULATIVE DAY: GOLD CLOSED UP $2.40 TO $1632.40//SILVER WAS UP 33 CENTS TO $18.74//PLATINUM CLOSED UP $27.45 TO $916.20//PALLADIUM CLOSED UP $66.50//JAMES TURK; A MUST READ!//COVID UPDATES//DR PAUL ALEXANDER//VACCINE MANDATE//RUSSIA VS UKRAINE UPDATES//IN THE UK: PRIME MINISTER TRUSS RESIGNS//UPDATES ON THE EUROPEAN/UK FINANCIAL/ENERGY MESS//SWAMP STORIES FOR YOU TONIGHT//
323 C HSBC 153 435 H SCOTIA CAPITAL 22 657 C MORGAN STANLEY 5 661 C JP MORGAN 153 1 880 H CITIGROUP 9 905 C ADM 7
TOTAL: 175 175 MONTH TO DATE: 22,450
JPMORGAN STOPPED 1/175
GOLD: NUMBER OF NOTICES FILED FOR OCT CONTRACT: 175 NOTICES FOR 17500 OZ or 0.5493 TONNES
total notices so far: 22,57 contracts for 2,245,000 oz (69.2828 tonnes)
SILVER NOTICES: 3 NOTICE(S) FILED FOR 15,000 OZ/
total number of notices filed so far this month 432 : for 2,160,000 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 UP $2.40
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 6.08 TONNES INTO THE GLD//
INVENTORY RESTS AT 932.73 TONNES
Silver//SLV
WITH NO SILVER AROUND AND SILVER UP 33 CENTS
AT THE SLV// :/BIG CHANGES IN SILVER INVENTORY AT THE SLV//: A HUGE WITHDRAWAL OF 0.921 MILLION OZ INTO THE SLV
INVESTORS ARE SWITCHING SLV TO SPROTT’S PSLV
CLOSING INVENTORY: 485.703 MILLION OZ
Let us have a look at the data for today
SILVER//OUTLINE
SILVER COMEX OI ROSE BY A STRONG SIZED 714 CONTRACTS TO 136,769 AND CLOSER TO THE RECORD HIGH OI OF 244,710, SET FEB 25/2020 AND THE STRONG GAIN IN COMEX OI WAS ACCOMPLISHED DESPITE OUR $0.27 LOSS IN SILVER PRICING AT THE COMEX ON WEDNESDAY. OUR BANKERS/HFT WERE SUCCESSFUL IN KNOCKING THE PRICE OF SILVER DOWN (IT FELL BY $0.27)., 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. SOME SPEC LONGS ADDED TO THEIR POSITIONS WITH THE VERY ATTRACTIVE PRICE.
WE MUST HAVE HAD: I) SOME SPECULATOR SHORT COVERINGS ////CONTINUED BANKER OI COMEX ADDITIONS /// SOME NEWBIE SPEC LONG ADDITIONS. II) WE ALSO HAD SOME REDDIT RAPTOR BUYING//. iii) A GOOD ISSUANCE OF EXCHANGE FOR PHYSICALS iiii) AN INITIAL SILVER STANDING FOR COMEX SILVER MEASURING AT 1.580 MILLION OZ FOLLOWING A 10,000 OZ QUEUE. JUMP / // V) STRONG SIZED COMEX OI GAIN/
I AM NOW RECORDING THE DIFFERENTIAL IN OI FROM PRELIMINARY TO FINAL: –70
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 16 days, total 55.215 contracts: 27.608 million oz OR 1.7255MILLION OZ PER DAY. (345 CONTRACTS PER DAY)
TOTAL EFP’S FOR THE MONTH SO FAR: 27.608 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. 27.608 MILLION OZ INITIAL
RESULT: WE HAD A STRONG SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 714 DESPITE OUR $0.27 LOSS IN SILVER PRICING AT THE COMEX// WEDNESDAY.,. THE CME NOTIFIED US THAT WE HAD A GOOD SIZED EFP ISSUANCE CONTRACTS: 400 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//SOME NEWBIE SPEC LONG ADDITIONS// /// WE HAVE A GOOD INITIAL SILVER OZ STANDING FOR OCT. OF 1.580 MILLION OZ FOLLOWED BY TODAY’S 10,000 QUEUE JUMP .. WE HAD A HUGE SIZED GAIN OF 1114 OI CONTRACTS ON THE TWO EXCHANGES FOR 5.570 MILLION OZ..
WE HAD 3 NOTICE(S) FILED TODAY FOR 15,000 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 STRONG SIZED 8741 CONTRACTS TO 443,442 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 225 CONTRACTS.
.
THE STRONG SIZED INCREASE IN COMEX OI CAME DESPITE OUR LOSS IN PRICE OF $20.65
//COMEX GOLD TRADING/WEDNESDAY // CONSIDERABLE SPECULATOR SHORT COVERINGS ACCOMPANYING OUR GOOD SIZED EXCHANGE FOR PHYSICAL ISSUANCE./. WE HAD ZERO LONG LIQUIDATION AND STRONG SPEC SHORT ADDITIONS // 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 4200 OZ//NEW STANDING 72.333TONNES (QUEUE JUMPING = EXERCISING LONDON BASED EFP’S WILL CONTINUE UNTIL MONTH’S END)
YET ALL OF..THIS HAPPENED WITH OUR LOSS IN PRICE OF $20.65 WITH RESPECT TO TUESDAY’S TRADING
WE HAD A HUGE SIZED GAIN OF 13,014 OI CONTRACTS 40.479 PAPER TONNES) ON OUR TWO EXCHANGES..
E.F.P. ISSUANCE
THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A GOOD SIZED 4273 CONTRACTS:
The NEW COMEX OI FOR THE GOLD COMPLEX RESTS AT 443,442
IN ESSENCE WE HAVE A HUGE SIZED INCREASE IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 13,014 CONTRACTS WITH 8741 CONTRACTS INCREASED AT THE COMEX AND 4273 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS TOTAL OI GAIN ON THE TWO EXCHANGES OF 12,789 CONTRACTS OR 939.780 TONNES.
CALCULATIONS ON GAIN/LOSS ON OUR TWO EXCHANGES
WE HAD A GOOD SIZED ISSUANCE IN EXCHANGE FOR PHYSICALS (4273) ACCOMPANYING THE STRONG SIZED GAIN IN COMEX OI (8741): TOTAL GAIN IN THE TWO EXCHANGES 13,014 CONTRACTS. WE NO DOUBT HAD 1) STRONG SPECULATOR SHORT ADDITIONS// 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 4200 OZ QUEUE. JUMP ///NEW STANDING 72.303 TONNES//. 3) ZERO LONG LIQUIDATION //// //.,4) STRONG SIZED COMEX OPEN INTEREST GAIN 5) GOOD 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. :
38,957 CONTRACTS OR 3,895,700 OZ OR 121.17 TONNES 16 TRADING DAY(S) AND THUS AVERAGING: 2434 EFP CONTRACTS PER TRADING DAY
TO GIVE YOU AN IDEA AS TO THE SIZE OF THESE EFP TRANSFERS : THIS MONTH IN 16 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 121.17/3550 x 100% TONNES 3.40% 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: 121/17 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 714 CONTRACT OI TO 136,769 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 400 CONTRACTS
OUR CUSTOMARY MIGRATION OF COMEX LONGS CONTINUE TO MORPH INTO LONDON FORWARDS AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:
DEC 400 ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 400 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 714 CONTRACTS AND ADD TO THE 400 OI TRANSFERRED TO LONDON THROUGH EFP’S,
WE OBTAIN A HUGE SIZED GAIN OF 1114 OPEN INTEREST CONTRACTS FROM OUR TWO EXCHANGES.
THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES 5.570 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)THURSDAY MORNING// WEDNESDAY NIGHT
SHANGHAI CLOSED DOWN 9.33 PTS OR 0.31% //Hang Seng CLOSED DOWN 231.06 OR 1.40% /The Nikkei closed DOWN 250.42PTS OR 0.92% //Australia’s all ordinaires CLOSED DOWN 1.16% /Chinese yuan (ONSHORE) closed UP TO 7.2260 //OFFSHORE CHINESE YUAN UP 7.2448// /Oil UP TO 87.46 dollars per barrel for WTI and BRENT AT 93.65 / Stocks in Europe OPENED MOSTLY GREEN. ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST US DOLLAR/OFFSHORE STRONGER
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 STRONG SIZED 8741 CONTRACTS TO 443,442 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 STRONG COMEX INCREASE OCCURRED DESPITE OUR FALL IN PRICE OF $20.65 IN GOLD PRICING WEDNESDAY’S COMEX TRADING. WE ALSO HAD A STRONG SIZED EFP (4273 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 STRONG SIZED TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS.,
THAT IS 4273EFP CONTRACTS WERE ISSUED: ;: , . 0 DEC : 4273 & ZERO FOR ALL OTHER MONTHS:
TOTAL EFP ISSUANCE: 4273 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 HUGE SIZED TOTAL OF 13,014 CONTRACTS IN THAT 4273LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE HAD A STRONG SIZED COMEX OI GAIN OF 8516 CONTRACTS..AND THIS HUGE SIZED GAIN ON OUR TWO EXCHANGES HAPPENED DESPITE OUR FALL IN PRICE OF GOLD $20.65//WE HAD HUGE SPEC SHORTS ADDITIONS, WITH BANKERS AS BUYERS OF COMEX GOLD CONTRACTS. WE ALSO HAD SOME ADDITIONAL NEWBIE SPECS GOING LONG WITH OUR NEW ATTRACTIVE LOW PRICE.
// WE HAVE A STRONG AMOUNT OF GOLD TONNAGE STANDING OCT (72.333),
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: 72.333 TONNES
THE SPECS/HFT WERE SUCCESSFUL IN LOWERING GOLD’S PRICE //// (IT FELL $20.65) BUT WERE UNSUCCESSFUL IN KNOCKING OFF ANY SPECULATOR LONGS (THEY ADDED TO THEIR POSITIONS) AS WE HAD A HUGE SIZED TOTAL GAIN ON OUR TWO EXCHANGES OF 13,014 CONTRACTS // WE HAVE REGISTERED A HUGE GAIN OF 39.780 PAPER TONNES ON TOTAL OI FROM OUR TWO EXCHANGES, ACCOMPANYING OUR GOLD TONNAGE STANDING FOR OCT. (72.333 TONNES)…THIS WAS ACCOMPLISHED DESPITE OUR FALL IN PRICE OF $20.65
WE HAD +225 CONTRACTS COMEX TRADES ADDED. THESE WERE ADDED AFTER TRADING ENDED LAST NIGHT
NET GAIN ON THE TWO EXCHANGES 13,014 CONTRACTS OR 1301,400 OZ OR 40.473 TONNES
Total monthly oz gold served (contracts) so far this month
22,450 notices 2,245,000 69.828 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: 0
total deposits nil oz
customer withdrawals:2
i) Out of HSBC: 56,894.928 oz
ii) Out of Brinks 739.470 oz (23 kilobars)
iii) Out of HSBC 96,318.620 oz
total: 57,634.398 oz
total in tonnes: 1.79 tonnes
Adjustments: 1// dealer to customer
i)Manfra: 2290.173 oz
CALCULATIONS FOR THE AMOUNT OF GOLD STANDING FOR OCT.
For the front month of OCT we have an oi of 980 contracts having GAINED 26 contracts . We had 16 contracts
filed on WEDNESDAY, so we GAINED A STRONG 42 contracts or an additional 4,200 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 40 contracts to stand at 3501
December GAINED 6316 contracts up to 365,354
We had 175 notice(s) filed today for 17,500 oz FOR THE OCT. 2022 CONTRACT MONTH.
Today, 0 notice(s) were issued from J.P.Morgan dealer account and 153 notices were issued from their client or customer account. The total of all issuance by all participants equate to 175 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 1 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 (22,450) x 100 oz , to which we add the difference between the open interest for the front month of (OCT 980 CONTRACTS) minus the number of notices served upon today 175 x 100 oz per contract equals 2,325,500 OZ OR 72.333 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 (22,450) x 100 oz+ (980) OI for the front month minus the number of notices served upon today (175} x 100 oz} which equals 2,325,500 oz standing OR 72.333 TONNES in this NON active delivery month of OCTOBER.
TOTAL COMEX GOLD STANDING: 72.333 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 432 x 5,000 oz = 2,160,000 oz
to which we add the difference between the open interest for the front month of OCT(236) and the number of notices served upon today 3 x (5000 oz) equals the number of ounces standing.
Thus the standings for silver for the OCT./2022 contract month: 432 (notices served so far) x 5000 oz + OI for front month of OCT (236) – number of notices served upon today (3) x 5000 oz of silver standing for the OCT contract month equates 3,325,000,000 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 20/WITH GOLD UP $2.40: BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 6.08 TONNES FROM THE GLD///INVENTORY RESTS AT 932.73 TONNES
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 20/WITH SILVER UP 33 CENTS: BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF .921 MILLION OZ FROM THE SLV///INVENTORY RESTS AT 485.703 MILLION OZ//
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 485.703 MILLION OZ//
PHYSICAL GOLD/SILVER STORIES
1.PETER SCHIFF
Federal Tax Receipts Near Record-High Share Of GDP
US tax receipts have surged this year. Through August, the US Treasury had collected over $4.4 trillion in revenue for fiscal 2022 with one month left to go. That was already 10% higher than receipts in 2021. The US government took in $303.73 billion in August alone. That was up 23% from August 2021.
According to a Tax Foundation analysis of Congressional Budget Office data, federal tax collections were up 21% in the 2022 fiscal year that ended on Sept. 30.
The US government isn’t just making a windfall in absolute terms. Tax collection is at a multi-decade high of 19.6% as a share of GDP. That is up from 17.9% in fiscal 2021 and is approaching the last peak of 20% set during the dot-com bubble in FY 2000.
Besides the dot-com bubble, federal tax receipts have only represented a higher share of GDP in two other years, both during World War II. In 1943, federal tax collections reached 20.5% of GDP before falling to 19.9% in 1944.
Compared to average federal tax collections in the post-war era of 17.2% of GDP, 2022 collections are set to exceed that level by 2.4 percentage points.
Individual income tax collections surged the most, up 29% from $2.0 trillion last year to $2.6 trillion this year.
The Question
This raises a question: if the government is taking in near-record levels of taxes, how is it running massive deficits month after month?
The answer is simple: Uncle Sam has a spending problem.
History shows that over a long period of time government will spend whatever the tax system raises plus as much more as it can get away with. That’s why we’ve had universal deficits.”
The US government has spent money at roughly a half-trillion per month clip all year. In August, Uncle Sam blew through another $523.3 billion. This brought total spending for fiscal 2022 to just over $5.35 trillion.
According to the Committee for a Responsible Federal Budget, policies enacted by the Biden administration will add more than $4.8 trillion to deficits between 2021 and 2031.
On top of increased spending, rising interest rates will balloon the debt even more.
Every increase in interest rate raises the federal government’s interest expense. So far in fiscal 2022, the US Treasury has forked out $471 billion just to fund the government’s interest payments.
Individual income tax receipts are projected to decline as a share of GDP over the next few years because of the expected dissipation of some of the factors that caused their recent surge. For example, realizations of capital gains (profits from selling assets that have appreciated) are projected to decline from the high levels of the past two years to a more typical level relative to GDP. Subsequently, from 2025 to 2027, individual income tax receipts are projected to rise sharply because of changes to tax rules set to occur at the end of calendar year 2025. After 2027, those receipts remain at or slightly below the 2027 level relative to GDP.”
As the economy spins deeper into a recession as the Fed tightens monetary policy to fight raging inflation, you can expect revenue to tank further, meaning even bigger budget shortfalls.
END
2. Lawrie Williams//Pam and Russ Martens/Jim Rickards/Mathew Piepenburg/Von Greyerz
LAWRIE WILLIAMS: No let up for gold and silver
Contrary to our expectations, gold and silver prices continued to weaken Wednesday as the dollar strengthened again and U.S. Treasury yields picked up again after dropping back a little on Tuesday. This choppy nature for the principal precious metals seems more or less set to continue for as long as the U.S. Fed appears to be committed to its current aggressive approach to raising interest rates to try and counteract the current high levels of inflation that are currently afflicting U.S. retail markets. The 0.4% rise in the core inflation level demonstrated by the October 13th Consumer Price Index (CPI) data from the Bureau of Labor Statistics made at least a 75 basis point Federal Funds rate rise at the early November FOMC meeting a virtual certainty, and a year-end interest rate level of between 4.5 and 4.75% is now the predicted outcome. This will almost certainly lead to an even stronger U.S. dollar and potentially even weaker gold and silver prices as U.S. Treasury and 10-year TIPS yields rise accordingly making non-interest-generating assets like gold ever increasingly less favourable investment assets.
The only real hope now it seems for the precious metals investor is that the FOMC participants will become aware of the damage that the high interest rates are likely to do to the U.S. economy – they will certainly drive it into recession, if it is not there already, which some reckon it is. At some stage they may thus ease off the pressure and start to reduce the levels of the rate rises as inflation begins to come down, but perhaps not as quickly as the Fed would like, towards the 2% target rate. Again, looking at the Fedwatch Tool, some market observers see this happening by mid 2023, but others still see the Fed maintaining its aggressive approach for longer.
Either way, gold has something of a chequered history as an inflation hedge. Over the long term it tends to come out fairly well as a wealth protector but short term, as now, the performance tends to be rather more mixed. It does tend to perform better – or perhaps that should be less poorly – than most other asset classes though which is some consolation for the gold holder. Silver, on the other hand, tends to be altogether more speculative and, as at present, can seriously underperform its yellow sibling. At one point last week the Gold:Silver ratio (GSR) slipped back to 90 (a high GSR is bad for silver- out and out silver bulls reckon it should be around 16-20) and it is currently sitting above 88 as I write).
Equities performed rather better over the past week than we might have expected from the overall global recessionary trend. U.S. earnings performance was, perhaps, a little stronger than might have been anticipated but the equity indexes were all beginning to turn downwards again towards the week’s end, although had not given back all the gains made earlier – but give them time! Recessions are negative for stock prices and we could well see some severe falls as economies continue to suffer from the inflationary trends and the consequent economic downturns worldwide. U.S. markets tend to be ever optimistic though so they could buck the likely pattern as we see it developing.
20 Oct 2022
-END-
END
3.Chris Powell of GATA provides to us very important physical commentaries
This is interesting: Russian central bank sees no need to raise gold holdings despite sanctions. It looks like China and Turkey will be the only guys that will buy this sanctioned gold
(zerohedge)
Russian central bank sees no need to raise gold holdings
Submitted by admin on Wed, 2022-10-19 09:06Section: Daily Dispatches
By Anastasia Lyrchikova and Elena Fabrichnaya Reuters via Nasdaq.com Tuesday, October 18, 2022
MOSCOW — Russia’s central bank sees no need to raise gold holdings in its gold and foreign exchange reserves, its deputy governor, Alexei Zabotkin, said Tuesday, shrugging off a plea from gold miners to increase state purchases amid Western sanctions.
The association of the Russian gold producers told a meeting of officials at Russia’s upper house of the parliament on Tuesday that the government should support the industry with purchases amid sanctions on the Russian banks and disrupted exports.
“In terms of accumulating gold in gold and foreign exchange reserves, this is something that is not advisable at the moment, because it would create additional impetus to the growth of the money supply,” Zabotkin told the same meeting.
He said that Russia’s central bank made gold purchases on the domestic market in March and April, but those “were small volumes.”
Sergei Kashuba, the head of Russia’s Gold Industrialists’ Union, told the meeting that the central bank’s purchases in the spring were carried out with a 12-15% price discount to London gold prices. …
With huge dollar shortages occurring across the globe, we find Swiss banks ever so eager to pick up these dollars and use them to lend to needy nations in desperate need of them.
(Bloomberg)
Swiss banks seek most dollars since 2008 in bid for easy profit
Submitted by admin on Wed, 2022-10-19 20:06Section: Daily Dispatches
Why is the Federal Reserve running a scheme to enrich Swiss banks?
* * *
By Bastian Benrath Bloomberg News Wednesday, October 19, 2022
Banks in Switzerland sought the most dollars since 2008 using an emergency dollar swap facility provided by the Federal Reserve in what is likely to be a bid for easy profits.
In today’s auction conducted by the Swiss National Bank, 17 institutions took up $11.09 billion. That’s the most since October 2008, when the Global Financial Crisis was raging in the wake of Lehman Brothers’ collapse.
This is the fourth week in a row when banks have accessed the facility. Last Wednesday 15 banks took up $6.27 billion in funds.
According to economists at Credit Suisse, Swiss banks swap the dollars into francs in order to generate a profit. The lenders can even sell the cash back to the Swiss National Bank using its reverse repo auctions, or deposit it at the institution to benefit from a positive interest rate.
“We do not believe that the increased demand for U.S. dollar liquidity by domestic banks reflects any liquidity issues in the Swiss banking system,” Credit Suisse economist Maxime Botteron wrote in a report last week. …
“The Earth speaks to us through the elements of nature. In every natural thing, we can find a hidden, powerful message.”
– Ralph Waldo Emerson
Every natural element with which the earth has been endowed has a usefulness—a purpose. If we listen to gold, its message is loud and clear—gold is money. To serve as natural money is gold’s highest purpose.
The advance of civilization demonstrates that nature throughout the ages, to our good fortune, has provided everything humanity needs to progress, including money. Few today, however, understand money as it has existed from prehistory and as it was perceived up until the dawn of the twentieth century. Since the commencement of the First World War in 1914, time-honored principles have been abandoned. Humanity has become enthralled with money substitutes like national currencies and, more recently, cryptocurrencies circulating in place of money, and people have subsequently lost sight of natural money itself.
Gold Is Natural Money
Although gold these days rarely circulates as currency because of government imposed restrictions and impediments, gold still retains all the features that explain why humanity in prehistory chose it to be money. Gold is natural money, or stated another way, nature’s money is gold, which is well illustrated by the following chart that presents the price of crude oil measured in four different currencies from a base of 100.
A gram or an ounce of gold buys essentially the same amount of crude oil today as it has at any time over the past seven decades. I have purposefully chosen oil because the energy it provides is essential to our standard of living.
Using gold to measure the price of other commodities has a similar result, but not the price of manufactured products. They tend to fall over time because advances in technology lead to increasing production efficiencies. An obvious example is computer chips, whose price has fallen dramatically in recent decades, yet which are still profitable to the companies that make and sell them.
Gold preserves purchasing power, which is one of the key requisites of money. As illustrated by the above chart, it is an outcome that no national currency can match.
Another requisite of money is the enablement of sound economic calculation, which is only possible when using a consistent, unchanging unit of account to measure prices over time. Gold serves this role perfectly because it is the only element in the known universe that is eternal and not subject to decay or degradation. A gram of gold today is identical to a gram of gold mined by the Romans.
Gold’s natural features that fulfil the two requisites of money stated above explain why gold is accumulated. Commodities are consumed and disappear, but because it is money, all the gold mined throughout history still exists in its aboveground stock, except for the inconsequential weight lost in shipwrecks and from coin abrasion.
The Gold Stock
A gold stock of 297 tons is estimated to have existed in 1492, when generally reliable record keeping of production and stocks began. That weight of gold when visualized comprises a cube of 4.3 feet (131cm) per side for a total of 79.5 cubic feet, which equals the volume of space encompassed by a small kitchen table. Today’s cube would just about slide under the arches of the Eiffel Tower.
Gold is not valuable because it is rare. Plenty of gold exists that has yet to be mined on land, under the oceans, and even extracted from ocean water when the technologies become available to make that mining possible. Gold is valuable because it is useful but mined—produced—only when it is profitable to do so, which depends on how gold has been dispersed in the earth’s crust when combined with humanity’s ability, financial capacity, and available technology needed to discover, mine, and refine it.
Growth of the Gold Stock Compared to the Stock of Dollars
Over the centuries gold becomes harder to find and mine, yet its aboveground stock has grown about the same annual rate. The average annual rate over the last 529 years is 1.2 percent. Since 1960 it is 1.8 percent, ranging from 1.4 percent to 2.2 percent.
The annual growth rates of the stock—the total quantity—of dollars since 1960 varies from a low of 1 percent in 1993 to a high of 19.1 percent in 2020. This inconsistency results in swings in the dollar stock that in turn causes volatility in prices expressed in dollars because there are not enough or too many dollars circulating relative to the prevailing level of economic activity.
Gold comes closer than any central bank managed currency in achieving Milton Friedman’s k-percent rule that the quantity of currency should increase by a constant percentage rate every year, irrespective of bank credit cycles. The gold stock grows at approximately the same rate as world population and new wealth creation. Consequently, the purchasing power arising from the interaction of gold’s supply—its aboveground stock—and the unfailing inelastic demand for gold that exists because it is money, make gold uniquely useful to accurately calculate the price of goods and services throughout time. It is a feature that the dollar and other national currencies fail to match because their annual growth rates are not consistent, causing fluctuations in their “aboveground” stock. Since 1950 the weight of the gold stock has grown 3.5 times, but a gram of gold still purchases the same amount of crude oil.
What is more, the growth rate of the dollar stock since 1960 has averaged 7.1 percent, which is four times greater than the average growth rate of the gold stock over this period. This more rapid increase in the dollar stock is debasing the dollar relative to gold, a reality clearly illustrated in the above chart of crude oil prices, which raises an important point.
The stock of dollars is controlled by the managers of the banking system. Recurring bank and currency crises throughout history result from human error and other human frailties that inevitably destroy fiat currency, like the unwillingness to “take away the punchbowl” after a period of prolonged credit expansion. Gold is different.
Gold does not need management by a central bank or government. Gold is money that manages itself because growth in the gold stock is controlled by two immutable forces—nature and profitable mining. Together they impose discipline on the production of gold that prevents the money punchbowl from overflowing, which is a key factor explaining why gold preserves purchasing power over time.
The Essential Nature of Honest Money
The timeless reliability in the interconnection of gold’s supply and demand sets gold apart from national currencies as does its essential nature. Gold is tangible; national currencies are an intangible financial promise with counterparty risk. This risk arises because promises do get broken, as was demonstrated in the 2008 financial crisis and countless other banking and fiat currency crises.
Gold is natural money that has served humanity well throughout history by enabling people to achieve an ever-higher standard of living. We can ponder whether this outcome results from fortuitous chance or from the intelligent design of a creator endowing the earth’s resources providentially to equip humanity with natural money. Regardless of gold’s origin, which is unknowable, it cannot be denied that gold is money and is as useful today as any time in history.
end
From Nicholas B
a must read…
After a period of some twenty years of being a very keen student of all matters relating to precious metals and in recent times engaging in deep immersion in a proliferation of podcasts etc., I think I am in a position to proffer some meaningful comments.
Many commentators stress that physical gold and silver have been a store of value for several millennia and the absence of any counterparty risk has been a major factor in differentiating physical precious metals from fiat currencies, which rarely have a life span (or supremacy) of more than four decades. Absolutely. On the other hand ,paper gold and silver contracts, with a potential backing of underlying physical metal at 100 to one (or is it 500) have only been in existence since the first COMEX gold futures contract was traded in 1974.In that time, the advances perfected in the techniques of trading algorithms and high frequency trading capacity have become normative market manipulation practices.
Remember this 2009 story? Sergey Aleynikov, a naturalized US citizen who emigrated from Russia, was arrested on Friday night as he arrived at Newark Liberty International Airport and charged with trade-secret theft. On four occasions since June 1, the 39-year-old programmer downloaded a total of 32 megabytes of data from Goldman Sachs servers in New Jersey, according documents filed in federal court in Manhattan. The allegedly pilfered software used “sophisticated mathematical formulas to place automated trades in the market,” the documents alleged. Such trades typically generate “many millions of dollars.” The documents didn’t identify Aleynikov’s former employer, but during a court hearing on Saturday, prosecutors revealed it was Goldman Sachs.
Therefore it is probably a reasonable postulation that manipulative gold and silver paper trading has been magnificently perfected in the last decade to the point where seeking to extrapolate projected future price movements based on historical chart patterns is meaningless and futile. I listen carefully to the Live from the Vault podcasts, since Andrew Maguire is the supreme commentator on the physical wholesale precious metal market (matched only by Andy Schectman’s commentaries on the retail markets). Sometimes I have to listen repeatedly to Andrew’s wonderfully crafted words in order to fully comprehend (as far as possible) the full significance of what he is saying. So many times in the last few years I have felt a warm glow after listening to Andrew and come to the conclusion that ‘it won’t be long now’-before the precious metal markets explode as the manipulation and fractional reserving become completely unsustainable. But the headline price of the precious metals continues to spiral downwards.
This is my interpretation of what is currently transpiring. The COMEX disclosed inventories are now (comparatively) so gossamer that they are almost of no consequence (and there is also the relatively final option of exercising force majeure clauses.) There is much informed commentary as to the relatively favourable positioning of the trading desks of the large investment banks in the event that the headline paper price of the precious metals was ever to be released from the stranglehold and consequence of serial and perpetual creation of infinite numbers of naked short paper contracts. For many years, MIDAS has serially invoked the principle of Occam’s Razor by blaming the cabal for the daily grotesque and blatantly manifest manipulation of the paper price of the precious metals. I believe that the orders that the cabal execute come from a higher authority than the trading desks of certain large investment banks, who may not even be briefed as to the bigger picture.
The problem with a ‘blow-up’ in the paper precious markets and the invocation of fiat settlement options (as hidden in the contractual small print) would be that the whole western world would then realize that possession and ownership of physical precious metals is all that matters. (How much physical do you have?) Remember that:
* After adjustment for BOE vault holdings and ETF physical inventors stored in loco London, there is ,again ,a gossamer amount of physical bullion available to satisfy the claims of not only ‘unallocated investors’ but also ‘allocated investors’ and no one knows whether criminal fractional reserving policies and blatant theft (termed re hypothecation) has resulted in more or less than 500 claims to every ounce of residual loco London vault precious metal.
* The thousands of tonnes of precious metal obligations that have been miraculously ‘settled’ by Exchange for Physical (EFPs) sourced from the LBMA may in fact have been serially rolled forward and thus remain as future delivery obligations on the counter parties (the cabal)
* If circumstances demand, the reported physical vault precious metal holdings of some ETFs can increase overnight by tonnage that logistically would take several weeks to deliver in the real world.
* The reported gold reserves of the IMF at 2,814 tonnes are merely quota allocations of gold from the IMF’s founding members back in 1944, and these allocations have always been double counted as both IMF gold and vault gold held by the quota allocating central bank
* The BOE and Federal Reserve have almost certainly rehypothecated many times over the physical gold that should constitute the gold reserves of so many nations who disclose bullion reserves that are not held physically within their own domain. There is a camp of informed commentators who postulate that the Federal Reserve has virtually no physical gold in its custody. The quantum of tonnage of physical gold transferred from West to East in the last few decades makes no sense if such rehypothecation is denied.
The grotesque manipulation of the paper gold price cannot end without the unravelling of a story that is far too big to ever see the light of day. For how long will the principal protagonists in the East v West confrontation be prepared to delay unveiling the ‘nuclear’ option of moving to a physical gold standard, which will devastate the West almost to the same extent as a nuclear option without the inverted commas?
Regards
Nicholas
END
5.OTHER COMMODITIES:
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 THURSDAY morning 7:30 AM
ONSHORE YUAN: CLOSED UP 7.2260
OFFSHORE YUAN: 7.2448
SHANGHAI CLOSED DOWN 9.33 PTS OR 0.31%
HANG SENG CLOSED DOWN 231.06 OR 1.40%
2. Nikkei closed DOWN 250.42 PTS OR 0.92%
3. Europe stocks SO FAR: MOSTLY GREEN
USA dollar INDEX DOWN TO 112.41/Euro RISES TO 0.98131
3b Japan 10 YR bond yield: FALLS TO. +.247/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 149.79/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 UP /JAPANESE Yen UP CHINESE YUAN: UP -// OFF- SHORE: UP
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 UP for WTI and UP FOR Brent this morning
3h European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund UP TO +2.392%***/Italian 10 Yr bond yield RISES to 4.754%*** /SPAIN 10 YR BOND YIELD RISES TO 3.53%…** DANGEROUS//
3i Greek 10 year bond yield FALLS TO 5.024//
3j Gold at $1637.70//silver at: 18.71 7 am est) SILVER NEXT RESISTANCE LEVEL AT $30.00
3k USA vs Russian rouble;// Russian rouble UP 0 AND 52/100 roubles/dollar; ROUBLE AT 61.22//
3m oil into the 87 dollar handle for WTI and 93 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 149.79DESTROYING 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 1.0023–as the Swiss Franc is still rising against most currencies. Euro vs SF 0.98365well 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: 4.138% UP 1 BASIS PTS…GETTING DANGEROUS
USA 30 YR BOND YIELD: 4.148% UP 2 BASIS PTS//
USA DOLLAR VS TURKISH LIRA: 18,57…GETTTING DANGEROUS
GREAT BRITAIN/10 YEAR YIELD: 3.875%
end
Overnight: Newsquawk and Zero hedge:
FIRST, ZEROHEDGE
Futures Green After Bouncing From Session Lows As Overnight Swings Turn Violent
THURSDAY, OCT 20, 2022 – 07:49 AM
US equity-index futures have swung wildly in the illiquid, overnight session, and after earlier dropping as much as 0.5% following the rapid move higher in US Treasurys and UK gilts, they have since erased all losses to trade near session highs, up 0.3% with Nasdaq futures also up 0.2%, as investors the surge in yields fizzled and as investors assessed disappointing earnings from Tesla against resilient reports from AT&T and IBM. Oil jumped, Chinese stocks spiked (but then fizzled) and both the offshore and onshore yuan rose after a Bloomberg report sparked market optimism that Chinese officials are mulling shortening the amount of time people coming into the country must spend in mandatory quarantine, an implicit tempering of the country’s much maligned coved zero policies. The US dollar slumped as sterling spiked as UK Prime Minister Liz Truss began meetings with a key Conservative party official, stoking speculation that a change in leadership may be afoot. US 10-year yield holds steady at about 4.12%.
In other notable overnight developments, Hong Kong’s Hang Seng index tumbled to the lowest level since 2009 amid continued liquidations and outflows from China…
… while the yen finally weakened past the closely watched 150 per dollar level, marking a 32-year low and keeping investors on high alert for further intervention to support it. And sure enough, the BOJ promptly jumped in sparking a big move lower in the pair. The move followed a surge in US Treasury yields to multi-year highs that widened the gap with Japanese equivalents.
In premarket trading, bank stocks were mostly higher following their worst day in more than a month. In corporate news, the world’s biggest banks have already had to use about $30 billion of their own cash this year to fund loans for acquisitions and buyouts that they weren’t able to offload to investors. US-listed Chinese stocks bounced in premarket trading, a day after Wednesday’s selloff sent the Nasdaq Golden Dragon China Index down to its lowest closing level since July 2013. The KraneShares CSI China Internet Fund ETF rises 2.1% as of 7:20 a.m. in New York. Here are the other notable premarket movers:
Tesla (TSLA US) falls 5.5% in premarket trading after the world’s most valuable automaker missed third-quarter revenue estimates as it struggled to get its cars to customers. Fellow EV firms lower in premarket trading include: Nikola (NKLA US) -2%, Faraday Future (FFIE US) -2%, Rivian (RIVN US) -1.8%, Canoo (GOEV US) -0.7%
Alcoa (AA US) drops 9.3% in premarket trading after the aluminum giant reported worse-than-expected results for the third quarter, putting pressure on its global peers.
International Business Machines (IBM US) shares rise 3.1% in premarket trading after the IT services company reported third-quarter revenue that beat expectations.
Ally Financial (ALLY US) shares drop 2.5% in premarket trading as Morgan Stanley downgraded the car-finance company to equal-weight from overweight following Wednesday’s third-quarter results.
Sunrun (RUN US) shares slump 4.1% in premarket trading after Wolfe downgrades the stock in a note to peer perform, citing headwinds from a rising interest-rate environment.
Las Vegas Sands (LVS US) shares rise 1% in US premarket trading after posting better- than-expected 3Q adjusted property Ebitda. That was driven by a solid performance in Singapore while uncertainty remains around Macau.
US stocks slipped on Wednesday after a two-day rally saw the S&P 500 reclaim $1.2 trillion in market capitalization amid support from technical levels and optimism about earnings. Higher bond yields and Tesla’s sobering report provided reminders of the tough macroeconomic backdrop as costs for companies remain high and the Federal Reserve pushes forward with interest rate hikes.
“We continue to see plenty of macroeconomic headwinds,” said Marija Veitmane, a senior strategist at State Street Global Markets. “As central banks tighten financial conditions, earnings will crack. So we are very much in the sell-the-rally camp.”
Investors continue to closely monitor events in the UK where Liz Truss’s chaotic premiership looked close to imploding as backbench Conservative lawmakers openly said she should resign and even Cabinet ministers discussed her future. The pound weakened and 10-year UK bond yields climbed, but were off their highs.
A generally strong start to the third-quarter earnings season has bolstered sentiment toward equities. But investors are having to balance signs of corporate resilience against fears about the impact of persistent inflation, hawkish moves by the Federal Reserve and other central banks and threats to the economy. “I think the market now is looking at 2023 and baking some kind of mild downturn into the price,” Hugh Gimber, global market strategist at JPMorgan Asset Management, said on Bloomberg Television. “The key is that inflation number coming down, because if it does, 5% for the Fed looks to me roughly as the right figure and then the market can have a clearer picture.”
In Europe, the Stoxx 50 fell 0.5% with Spain’s IBEX flat but outperforming peers; the DAX lags, retreating 0.8%. Telecoms, financial services and retailers are the worst-performing sectors. Oil and gas shares are the only rising sector in Stoxx Europe 600 index on Thursday as crude extended gains amid a report that China debates easing some Covid restrictions, while European gas advanced after a five-day losing run. The Stoxx Energy sub-index advanced 1.3% as of 10:45 a.m. in London, while the broader equity benchmark declined 0.5%. Here are some of the biggest European movers today:
Oil and gas shares are the only rising sector in Stoxx Europe 600 index on Thursday as crude extended gains amid a report that China is debating easing some Covid restrictions, while European gas advanced after a five-day losing run. BP gained 1.5%, Shell +1.4% and TotalEnergies +1.5%
Saipem soars as much as 13% in Milan, the most intraday since July 14, after winning a $4.5 billion engineering and construction contract from Qatargas. Jefferies upgraded the stock to buy after the “material” award
Yara shares gain as much as 7.2% after fertilizer maker’s 3Q adjusted Ebitda beat analyst estimates and was seen as very strong in an uncertain quarter. Declining gas prices are also pointing toward restarting fertilizer capacity in Europe as demand is rising
Brunello Cucinelli shares soar as much as 11.5%, the most since March, after it delivered a significant beat in its 3Q results as well as a major uptick in FY guidance
Nokia shares fall as much as 6.8% after a mixed set of results, with sales beating consensus estimates while profit and margin lagged. The bottom-line was dragged down by the network equipment maker’s Technologies segment, which continued to be hobbled by a delay in patent contract renewals
Ericsson shares slide as much as 16%, the most since Oct. 2016, after reporting third-quarter operating profit and margin that missed analyst estimates. While the Swedish telecom equipment maker pledges to change pricing and cut costs, analysts still see margin pressure persisting into the next year
Volvo shares fall as much as 5.9% in Stockholm trading, the most intraday since May 2, as analysts highlight that focus for 3Q results is on the weaker Truck division margin, which is driving a miss at Ebit level
GB Group shares plummet as much as 20%, hitting the lowest since September 2017, after identity verification company published a first-half trading update. Davy said the revenue was below consensus expectations
Earlier in the session, Asian equities headed for a second day of declines, as the recent selloff in Hong Kong shares deepened amid investor concerns on China’s zero-Covid approach. The MSCI Asia Pacific Index dropped as much as 1.6%, as tech shares faced fresh losses after bond yields spiked overnight. The gauge pared some of its earlier losses after a report that Chinese authorities were considering a shorter quarantine for inbound travelers. Hong Kong led declines in the region, with its benchmark falling to the lowest since 2009 as Chief Executive John Lee’s maiden policy speech left investors disappointed. Traders remained concerned about consumer demand in China amid lockdowns and rising Covid cases, as well as the spillover into earnings for the region.
“History suggests it is hard for stocks to rally in the face of EPS cuts,” said Stephen Innes, managing partner at SPI Asset Management in a note. “While stock prices should trough before EPS estimates bottom, there is still a lot of wood to chop.” Benchmarks in Taiwan, South Korea and Australia also fell, with the latter extending declines after government data showed that Australian hiring almost stalled in September. Japan’s gauges slid even as the yen weakened past the closely-watched 150 per dollar. Indexes in Indonesia and Malaysia defied the broader gloom to gain more than 1%.
The Hang Seng Tech index has now tumbled more than 70% from its Jan 2021 high.
China’s possible cut in quarantine period for inbound travelers is a small step in the right direction but a lot more is needed to lift investor sentiment dented by the country’s Covid Zero policy. US futures pared losses after the Bloomberg report on the news. The offshore yuan briefly gained as much as 0.5% to 7.2353 against the dollar. According to Amir Anvarzadeh, a strategist at Asymmetric Advisors: “A cut to quarantine rules for inbound travelers will not be enough for the Chinese market to rebound”
Japanese stocks slid as investors refocused on the impact of higher US interest rates and a looming global recession after a two-day rally. The Topix fell 0.5% to close at 1,895.41, while the Nikkei declined 0.9% to 27,006.96. Hoya Corp. contributed the most to the Topix decline, decreasing 3.5%. Out of 2,166 stocks in the index, 596 rose and 1,454 fell, while 116 were unchanged.
Australian stocks declined with global growth fears in focus; the S&P/ASX 200 index fell 1% to 6,730.70, in step with most markets in Asia and on Wall Street amid worries of a global slowdown. Miners contributed the most to the gauge’s retreat as investors weighed quarterly production reports. They also assessed jobs data that suggest the RBA will continue to slow the pace of interest rate increases. In New Zealand, the S&P/NZX 50 index fell 0.8% to 10,832.03.
Key Indian stock gauges gained for a fifth straight day, their longest run of advances in two months, before a key festival next week and as robust corporate earnings boost investor sentiment. The S&P BSE Sensex gained 0.2% to 59,202.90 in Mumbai, while the NSE Nifty 50 Index advanced 0.3%. The indexes overcame decline of as much as 0.5% as weekly derivative contracts expired Thursday. The key benchmarks have risen more than 2% this week and were trading near their highest level since Sept. 21. Twelve of 19 sector sub-gauges compiled by BSE Ltd. advanced, led by oil & gas companies while consumer durables were the worst performers. For the week, information technology stocks are the best performers, helped by stronger-than-expected earnings. Out of 11 Nifty 50 companies, which have so far reported earnings, eight have either met or exceeded average estimates, while three have trailed. Asian Paints’ quarterly results trailed estimates, dragged by weaker revenue growth and rising costs, while Bajaj Finance’s numbers matched consensus
In rates, 10-year TSY yields trade near session lows at around 4.12%, richer by 1bp on the day after earlier rising 5bps to 4.17% while German 10-year yield rises 5.5bps to 2.43%. Treasuries pared losses in the early US session, rising with gilts which stretch to fresh session highs and outperform on the day as Bank of England Deputy Governor Ben Broadbent says UK rates may not rise as much as markets foresee. Gilts outperformed by 4bp while bunds lag Treasuries by 2bp; belly outperformance tightens 2s5s30s fly by 4bp on the day. Dollar issuance slate empty so far and expected to be light; Wednesday saw three borrowers price $6.5b. Three-month dollar Libor +4.70bp at 4.32457%
In FX, the Bloomberg Dollar Spot Index hovered as the greenback traded mixed against its Group-of-10 peers, though most pairs consolidated recent moves. Treasury yields rose by as much as 2bps, led by the short end.
The euro erased a modest loss to near $0.98. Bunds fell for a third session as traders continued to digest Wednesday’s unexpected German Finance Agency decision to increase its own securities holdings for repo purposes, with schatz swap spreads narrowing for a sixth day, the longest streak since December
UK bonds pared an earlier loss and traders cut bets on BOE tightening after Deputy Governor Ben Broadbent said it’s not clear that UK interest rates need to rise as much as the market expects. The pound fell below $1.12 as Liz Truss’s premiership looks close to imploding after she fired one minister over a security breach and two others were heard resigning amid the fallout from a chaotic parliamentary vote before agreeing to stay in their posts
The yen fluctuated in a tight range, and briefly rose above 150 per dollar. Japanese Finance Minister Shunichi Suzuki said excessive and sudden moves in the foreign exchange market triggered by speculation can’t be tolerated. Japan’s benchmark yield climbed above the central bank’s policy ceiling and monetary authorities announced unscheduled bond purchases to rein it back in. Demand for long gamma in dollar-yen gains traction as spot breaches the psychologically-key 150 level
Australia’s dollar slid as much as 0.7% amid a weak jobs print, before reversing following a report that Chinese officials were debating whether to shorten quarantine for inbound travelers. Bonds fell. Australia’s employment rose by just 923 people in September, below the forecast of 25,000, government data showed
In commodities, WTI and Brent December contracts are firmer intraday with the former around USD 86/bbl (84.49-86.27 range) whilst the latter resides around USD 93.50/bbl (91.95-93.92 range). The crude complex is buoyed by the pullback in the Dollar after receiving a boost from source reports that China is considering easing its COVID rules for travellers. Spot gold sees some support from the DXY remaining under 113.00, although remains well off recent highs, with the yellow metal still around the USD 1,630/oz mark (vs yesterday’s 1,654.50/oz high). LME metals are mixed but 3M copper receives a boost from the Buck alongside the aforementioned China source reports, but the red metal remains under USD 7,500/t.
Overall, Bitcoin is contained and essentially unchanged on the session around USD 19.1k with specific updates relatively limited and participants focused on broader market action.
To the day ahead now, and data releases from the US include the weekly initial jobless claims and existing home sales for September, whilst in Germany there’s the PPI reading for September. Central bank speakers include the Fed’s Harker, Jefferson, Cook and Bowman, the ECB’s de Cos and BoE Deputy Governor Broadbent. Earnings releases include Danaher, Philip Morris International, Union Pacific, AT&T and Blackstone. Finally, EU leaders will gather for a summit in Brussels.
Market Snapshot
S&P 500 futures down 0.5% to 3,690.25
MXAP down 0.8% to 136.26
MXAPJ down 0.9% to 440.36
Nikkei down 0.9% to 27,006.96
Topix down 0.5% to 1,895.41
Hang Seng Index down 1.4% to 16,280.22
Shanghai Composite down 0.3% to 3,035.05
Sensex down 0.3% to 58,948.91
Australia S&P/ASX 200 down 1.0% to 6,730.73
Kospi down 0.9% to 2,218.09
STOXX Europe 600 down 0.5% to 395.57
German 10Y yield up 3% to 2.45%
Euro little changed at $0.9777
Brent Futures up 0.9% to $93.26/bbl
Gold spot little changed at $1,630.01
U.S. Dollar Index down -0.1% at 112.86
Top Overnight News from Bloomberg
Giorgia Meloni, the right-wing leader poised to form a new Italian government, said she’d give up on the fledgling coalition if her allies can’t commit to supporting Ukraine along with Italy’s European Union and NATO partners
France’s Economy & Finance minister Bruno Le Maire targets inflation of 4% by the end of 2023, AFP reports, stressing these are “objectives, not forecasts”
Turkey’s central bank is poised to take another step toward cutting interest rates into single digits this year, a gamble masterminded by President Recep Tayyip Erdogan to power economic growth ahead of elections next June
German Chancellor Olaf Scholz warned that a proposal to introduce a European Union-wide cap on gas prices could backfire as the region seeks to offset a drastic supply cut from Russia.
A more detailed look at global markets courtesy of Newquawk
Asia-Pacific stocks were pressured following the weak handover from Wall Street owing to the higher yield environment and as global inflationary headwinds offset the recent earnings momentum. ASX 200 was led lower by the underperformance in tech and following disappointing jobs data, although the energy sector bucked the trend after gains in oil prices and strong quarterly output updates from Woodside Energy and Santos. Nikkei 225 briefly fell beneath 27,000 with participants on intervention watch, while stronger-than-expected Exports and Imports failed to spur risk appetite as the data also contributed to a record trade deficit for the fiscal first half. Hang Seng and Shanghai Comp. declined from the open with the former on course for its lowest close since 2009 amid heavy losses in tech and with the mainland also downbeat after the lack of surprises from the PBoC which maintained its benchmark lending rates unchanged as widely expected, although news of China mulling shortening its quarantine eventually lifted the Shanghai Comp into the green.
Top Asian News
PBoC 1-Year Loan Prime Rate (Oct) 3.65% vs. Exp. 3.65% (Prev. 3.65%); 5-Year Loan Prime Rate (Oct) 4.30% vs. Exp. 4.30% (Prev. 4.30%)
China reportedly held emergency talks with chip firms after US curbs, according to Bloomberg.
China is reportedly mulling cutting inbound quarantine to 7 days from 10 days which will be presented to the top leaders, according to Bloomberg.
Indonesian 7-Day Reverse Repo (Oct) 4.75% vs. Exp. 4.75% (Prev. 3.75%); will intervene in FX to prevent imported inflation.
Japanese Finance Minister Suzuki provides no comment on FX levels; cannot tolerate speculative moves; will take action against any speculative, excessive and sudden moves, via Reuters. Japanese currency diplomat Kanda says excessive and disorderly FX moves have a negative impact on the economy, will not comment on whether Japan is intervening now or has intervened today
European cash bourses trade mixed with the breadth of the market narrow (Euro Stoxx 50 -0.2%; Stoxx 600 -0.4%). Sectors in Europe are mostly negative with no overarching theme – Energy and Banks outperform amid price action in underlying crude and yields respectively. Meanwhile, Telecom names sit at the bottom of the pile as Ericsson (-14%) and Nokia (-5.3%) slide following red flags on margins. US equity futures are softer across the board but to varying degrees, with the NQ (-0.9%) lagging the ES (-0.5%) and RTY (-0.4%), with Tesla carrying a larger weight in the NDX (circa. 4.0%) than the SPX (circa. 1.8%). Tesla Inc (TSLA) – Q3 2022 (USD): Adj. EPS 1.05 (exp. 1.00), Revenue 21.45bln (exp. 21.96bln). Q3 FCF USD 3.30bln (exp. 2.89bln). Q3 Automotive gross margin +27.9% (exp. +28.4%). Tesla sees initial phase of semi deliveries begin in December 2022. Tesla still sees 50% avg. annual growth in vehicle deliveries. Raw material cost inflation impacted quarterly profitability along with ramp inefficiencies from Gigafactory Berlin-Brandenburg, Gigafactory Texas, 4680 cell production. Battery supply constraints will be main limiting factor. CEO Musk said looking forward to a record-breaking Q4 and the Co. is gaining rapid traction in 4680 cell production. -5.0% in the pre-market
Top European News
BoE’s Broadbent says the MPC is likely to respond relatively promptly to news about fiscal policy. Remains to be seen if rates need to rise as much as currently priced in by markets, via BoE. The justification for tighter policy is clear. If government support mitigates the effect of import costs, there is more at the margin for monetary policy to do. If Bank Rate really were to reach 5.25%, the cumulative impact on GDP of the entire hiking cycle would be just under 5% – of which only around one quarter has already come through
UK Tory 1922 Committee officers are expected to meet on Thursday to discuss the leadership crisis in the Tory party, according to The Telegraph’s Editor. However, recent reporting indicates the Committee will not be meeting today.
UK PM Truss’s office noted that the Tory party’s chief whip and deputy chief whip remain in their posts.
ITV’s Peston, citing a member of UK Cabinet, that it is clear there is a will among ministers to attempt to keep PM Truss in office until October 31st (when the budget will be announced). A view that contrasts the recent update from ITV’s Brand, citing a 1922 member, that the “odds are against” PM Truss surviving the day as PM
FX
Pound precarious as pressure continues to build against UK PM Truss and BoE’s Broadbent infers that market expectations on rates may be too hawkish, Cable pivots 1.1200
Yen slips under 150.00 mark vs Dollar as yields continue to rally, but rebounds amidst further Japanese verbal, if not actual intervention
Franc remains on the backfoot due to as a funding currency, but Euro gleans traction from data and EGB/UST spread convergence, USD/CHF straddles 1.0050 and EUR/USD bounces ahead of 0.9750 to reclaim 10 and 21 DMAs
Aussie labours after payrolls miss consensus by some distance and before recovery in tandem with Yuan on reports that China may relax some Covid rules for inbound travellers, AUD/USD eyes 0.6300 from sub-0.6250 and USD/CNH off peaks near 7.2800
Riksbank’s Ingves, to Swedish parliament, says easing mortgage repayment rules would be inappropriate.
RBI is continuing spot USD sales and receiving December forwards, according to traders cited by Reuters.
Fixed Income
Debt remains depressed though notably off worst levels after dovish remarks from BoE’s Broadbent lifted Gilts to the mid-98.00 region.
In turn, both USTs and Bunds have climbed off lows of 109.19+ and 134.86 respectively, though still post downside of circa. 3 and 50 ticks respectively.
The complex looks to US data and Fed speak while BTPs await updates out of Italy as potential PM Meloni is set to begin constructing her cabinet, with particular focus on the Berlusconi’s Foreign Minister nominee.
Commodities
WTI and Brent December contracts are firmer intraday with the former around USD 86/bbl (84.49-86.27 range) whilst the latter resides around USD 93.50/bbl (91.95-93.92 range).
The crude complex is buoyed by the pullback in the Dollar after receiving a boost from source reports that China is considering easing its COVID rules for travellers.
Spot gold sees some support from the DXY remaining under 113.00, although remains well off recent highs, with the yellow metal still around the USD 1,630/oz mark (vs yesterday’s 1,654.50/oz high).
LME metals are mixed but 3M copper receives a boost from the Buck alongside the aforementioned China source reports, but the red metal remains under USD 7,500/t.
MMG’s (1208 HK) Las Bambas copper mine in Peru reportedly halted copper transportation due to protests.
German Energy Regulator says potential gas emergency is now end of February at the earliest, rather than end of November which was part of the scenario analysis in the August forecast, via Reuters.
Geopolitical
Russia’s Deputy UN envoy said Russia would reassess cooperation with the UN Secretariat if the UN chief sends experts to Ukraine to inspect downed drones and is not optimistic about the renewal of the Ukraine grain Black Sea export deal, according to Reuters.
US State Department said the US, UK and France raised the issue of Iran’s transfer of drones to Russia at a meeting of the UN Security Council on Wednesday, according to Reuters.
US Treasury senior official travelled to Turkey this week and discussed sanctions and export controls imposed on Russia, according to Reuters.
US and South Korea are conducting military drills at their fastest pace in years to show their readiness as tensions rise on the divided Korean Peninsula, according to Nikkei Asia Review.
EU states have agreed on new sanctions against Iran regarding the supply of drones to Russia, according to the Czech EU presidency; to freeze assets of three individuals and one entity responsible for the drone sale.
US Event Calendar
08:30: Oct. Initial Jobless Claims, est. 232,000, prior 228,000
08:30: Oct. Continuing Claims, est. 1.38m, prior 1.37m
08:30: Oct. Philadelphia Fed Business Outl, est. -5.0, prior -9.9
10:00: Sept. Existing Home Sales MoM, est. -2.1%, prior -0.4%
10:00: Sept. Home Resales with Condos, est. 4.7m, prior 4.8m
10:00: Sept. Leading Index, est. -0.3%, prior -0.3%
Central Bank Speakers
12:00: Fed’s Harker Discusses the Economic Outlook
13:30: Fed’s Jefferson Makes Opening Remarks at Careers Event
13:45: Fed’s Cook Speaks on Panel at Careers Event
14:05: Fed’s Bowman Has Opening Remarks at Community Development…
DB’s Jim Reid concludes the overnight wrap
It’s half-term and unfortunately I can’t completely escape my responsibilities. Tomorrow I’m off to Center Parcs for the first time for a few days. It’s fair to say I’m the least excited of the five of us going. All tips on how to survive the experience welcome. I’ll be broadcasting the EMR live from there on Monday morning whilst on holiday as my co-authors are both off with Tim getting married. So many congratulations to him. Since I started the EMR nearly 16 years ago I think 9 of my co-authors have got married while working on it, 10 including me. It’s a publication that breeds stability and wholesome values. All are still going strong as far as I’m aware!
The honeymoon rally of the last few days petered out yesterday, with Treasury yields hitting multi-year highs as investors turned their focus back to central banks and how fast they’ll hike rates. All the big central banks are deciding policy over the next couple of weeks, so it’s not surprising that’s happening, but sentiment wasn’t helped either by further inflation surprises from the UK and Canada for September, which echoed what we’d already seen from the US last week. and added to the sense that the hiking cycle will be extended. After the close, we then heard from Tesla who missed revenue estimates, sending their shares -7% lower in after hours trading. Supply chain issues continued to beleaguer the company, particularly around batteries. Nevertheless, they still forecast strong growth and Elon Musk said a meaningful share buyback was likely. For whatever it’s worth on the macro side, Musk also believes commodity prices will continue to fall. Meanwhile, in overnight trading, futures tied to the S&P 500 (-0.3%) and NASDAQ 100 (-0.6%) are pointing to further losses. However these losses have halved as I type, possibly on breaking news on Bloomberg that China is considering cutting quarantine for arrivals from abroad from 10 to 7 days. I’d imagine there are hopes the zero covid policy is loosening a bit.
Back to bonds and treasury yields rose to new highs for this cycle across the yield curve, with the 10yr yield up +12.7bps at 4.13%. This morning in Asia, they are another +1.25bps higher trading at a fresh 14-yr high of just under 4.15% as I type. This comes as investors move to expect an increasingly aggressive tightening cycle from the Fed over the months ahead, with the rate priced in for the December meeting up a further +3.2bps to 4.51%. It’s gone just above the previous high for this cycle of 4.52% overnight. Furthermore, the peak rate for this hiking cycle priced in for May went up by +8.6bps to 4.97%. This morning in Asia it’s gone above 5% for the first time in this cycle.
We heard from a few Fed officials yesterday, including Presidents Bullard, Evans, and Kashkari. President Bullard noted the Fed could yet still bring forward tightening into 2022. If policy got tight enough, he noted that 2023’s inflation profile could look better. A point often cited by those expecting a rapid improvement in inflation is the composition of certain rent measures the Fed follows presents a lagged reading, and therefore inflation is not currently as bad as they expect. Bullard directly addressed that point in his remarks and that unsurprisingly, the Fed is aware of such methodological shortcomings and takes them into account when evaluating the stance of policy. President Kashkari spoke along similar lines, noting the Fed still needed tighter policy but could wind up pausing tightening come next year. Evans struck the same tone, expressing hope that the September dot plot would prove the optimal amount of tightening, so a much slower pace of tightening next year. Regardless of the above, we still have more than 75bps priced for November at 78.1bps.
As we await their next decision in just under a couple of weeks from now, there was further evidence yesterday that the Fed’s hikes were filtering their way through to the real economy, with data from the mortgage Bankers Association showing the contract rate on a 30yr fixed mortgage hit 6.94% in the week ending October 14. That’s the highest it’s been since 2002, and came as their gauge of applications to purchase or refinance a home fell a further -4.5% to its lowest level since 1997, which echoes the decline in other housing indicators we’ve seen recently. US housing starts for September were also down more than expected, hitting an annualised rate of 1.439m (vs. 1.461m expected), with the previous month’s number also revised down by -9k. On the other hand, building permits rose to an annualised rate of 1.564m (vs. 1.530m expected).
For equities it was also a rough session, with the S&P 500 coming down -0.67% after having gained +3.82% over the two days at the start of the week. Netflix (+13.09%) was the top performer in the index following its earnings release the previous day, but otherwise it was a broad-based decline that saw over 76% of the index move lower. The Nasdaq underperformed, falling -0.85%, and that was before Tesla’s earnings miss after the close. The major indices lost ground in Europe too, with the Stoxx 600 (-0.53%) bringing an end to its run of 4 consecutive gains.
Back in Europe, sovereign bonds also lost ground across much of the continent as we approach the ECB’s decision next week. Yields on 10yr bunds were up +9.0bps to a post-2011 high of 2.37%, which followed comments by Slovenian central bank governor Vasle that the ECB should hike by 75bps at the next two meetings in October and December.
Here in the UK, gilts outperformed other European sovereign bonds for a third day running, with markets remaining calm as they looked forward to the government’s fiscal announcement on October 31. That outperformance was particularly noticeable among long-dated gilts, with yields on 30yr gilts down -31.9bps after the BoE’s announcement the previous evening that their Q4 gilt sales as part of quantitative tightening would only involve short- and medium-maturity gilts, rather than long-dated ones. To be fair though, gilts rallied right across the curve, and that came in spite of the latest UK inflation data for September, which showed CPI rising to +10.1% (vs. +10.0% expected), so back up to its level in July. In addition, core inflation continued to accelerate, hitting a 30-year high of +6.5% in September (vs. +6.4% expected).
Whilst UK markets were more subdued yesterday, there was fresh turmoil on the political front as Home Secretary Suella Braverman left the government after what was reported as a security breach. In Braverman’s resignation letter, the strong implication was that Truss herself should go, saying that “The business of government relies upon people accepting responsibility for their mistakes. Pretending we haven’t made mistakes, carrying on as if everyone can’t see that we have made them, and hoping that things will magically come right is not serious politics.” A chaotic parliamentary vote late in the session won’t make life any easier for PM Truss in the short-term.
Back on inflation, there wasn’t much respite elsewhere, as Canadian inflation similarly surprised on the upside with a +6.9% reading in September (vs. +6.7% expected). That prompted investors to ratchet up their expectations of future rate hikes from the Bank of Canada, with another 75bp move at their meeting next week now fully priced in. That said, there was some marginally better news from the Euro Area on inflation, as the final CPI release for September was revised down a tenth to +9.9%, having come in at +10.0% on the earlier flash reading. But although that revision takes it out of double-digit territory, it’s worth noting that’s still the fastest inflation since the single currency’s formation.
Asian equity markets are tumbling this morning with the Hang Seng (-2.36%) leading losses, after briefly sliding -3.0% in early trade, its lowest intraday level since 2009 due to a selloff in Chinese listed tech shares. Elsewhere the KOSPI (-1.47%) and the Nikkei (-1.11%) are also deep in the red. Mainland China’s Shanghai Composite (-0.39%) and the CSI (-0.80%) are also falling.
Early morning data showed that exports in Japan advanced +28.9% y/y (v/s +26.6% expected), increasing for the 19th consecutive month in September and compared to the prior month’s +22.0% rise. This was on the back of strong demand for autos and mineral fuels. At the same time, imports surged +45.9% y/y (v/s +44.9% expected) and against a +49.9% gain in the previous month.
Staying on Japan, yields on 10yr JGBs again briefly moved beyond the BoJ’s upper limit of 0.25%, prompting the central bank to announce unscheduled bond buying for the first time this month to bring it back within its target range.
Adding to the challenge for policy makers, the Japanese yen continues to press towards the 150 level, as it reached yet another fresh 32-yr low of 149.96 against the US dollar, thus increasing the possibility for further government intervention to support the battered currency.
Separately, the People’s Bank of China (PBOC) left its benchmark lending rates unchanged for a second month, keeping the 1-yr loan prime rate at 3.65% and the 5-yr rate at 4.3%.
To the day ahead now, and data releases from the US include the weekly initial jobless claims and existing home sales for September, whilst in Germany there’s the PPI reading for September. Central bank speakers include the Fed’s Harker, Jefferson, Cook and Bowman, the ECB’s de Cos and BoE Deputy Governor Broadbent. Earnings releases include Danaher, Philip Morris International, Union Pacific, AT&T and Blackstone. Finally, EU leaders will gather for a summit in Brussels.
AND NOW NEWSQUAWK
US futures softer, TSLA -5.0%; GBP pressured awaiting Truss’ fate & after Broadbent – Newsquawk US Market Open
THURSDAY, OCT 20, 2022 – 06:36 AM
European cash bourses trade mixed with the breadth of the market narrow, US futures softer though off lows and varied
TSLA -5.0% in the pre-market post-earnings; in Europe, Ericsson and Nokia hit on margins
Pound pressured alongside PM Truss and after BoE’s Broadbent, USD/JPY through 150.00 while DXY slips from 113.00
Debt remains depressed though notably off worst levels after dovish remarks from BoE’s Broadbent, yields bid but have similarly slipped
Crude complex is buoyed by the USD’s pause and after China COVID source reports
Looking ahead, highlights include US Philly Fed. Speeches from Fed’s Bowman, Cook, Harker & Jefferson, ECB’s de Cos. Earnings from American Airlines, Phillip Morris.
Or why not try Newsquawk’s squawk box free for 7 days?
EUROPEAN TRADE
EQUITIES
European cash bourses trade mixed with the breadth of the market narrow (Euro Stoxx 50 -0.2%; Stoxx 600 -0.4%).
Sectors in Europe are mostly negative with no overarching theme – Energy and Banks outperform amid price action in underlying crude and yields respectively. Meanwhile, Telecom names sit at the bottom of the pile as Ericsson (-14%) and Nokia (-5.3%) slide following red flags on margins.
US equity futures are softer across the board but to varying degrees, with the NQ (-0.9%) lagging the ES (-0.5%) and RTY (-0.4%), with Tesla carrying a larger weight in the NDX (circa. 4.0%) than the SPX (circa. 1.8%).
Tesla Inc (TSLA) – Q3 2022 (USD): Adj. EPS 1.05 (exp. 1.00), Revenue 21.45bln (exp. 21.96bln). Q3 FCF USD 3.30bln (exp. 2.89bln). Q3 Automotive gross margin +27.9% (exp. +28.4%). Tesla sees initial phase of semi deliveries begin in December 2022. Tesla still sees 50% avg. annual growth in vehicle deliveries. Raw material cost inflation impacted quarterly profitability along with ramp inefficiencies from Gigafactory Berlin-Brandenburg, Gigafactory Texas, 4680 cell production. Battery supply constraints will be main limiting factor. CEO Musk said looking forward to a record-breaking Q4 and the Co. is gaining rapid traction in 4680 cell production. -5.0% in the pre-market
Pound precarious as pressure continues to build against UK PM Truss and BoE’s Broadbent infers that market expectations on rates may be too hawkish, Cable pivots 1.1200
Yen slips under 150.00 mark vs Dollar as yields continue to rally, but rebounds amidst further Japanese verbal, if not actual intervention
Franc remains on the backfoot due to as a funding currency, but Euro gleans traction from data and EGB/UST spread convergence, USD/CHF straddles 1.0050 and EUR/USD bounces ahead of 0.9750 to reclaim 10 and 21 DMAs
Aussie labours after payrolls miss consensus by some distance and before recovery in tandem with Yuan on reports that China may relax some Covid rules for inbound travellers, AUD/USD eyes 0.6300 from sub-0.6250 and USD/CNH off peaks near 7.2800
Riksbank’s Ingves, to Swedish parliament, says easing mortgage repayment rules would be inappropriate.
RBI is continuing spot USD sales and receiving December forwards, according to traders cited by Reuters.
Click here for more detail. Notable FX Expiries, NY Cut:
Debt remains depressed though notably off worst levels after dovish remarks from BoE’s Broadbent lifted Gilts to the mid-98.00 region.
In turn, both USTs and Bunds have climbed off lows of 109.19+ and 134.86 respectively, though still post downside of circa. 3 and 50 ticks respectively.
The complex looks to US data and Fed speak while BTPs await updates out of Italy as potential PM Meloni is set to begin constructing her cabinet, with particular focus on the Berlusconi’s Foreign Minister nominee.
WTI and Brent December contracts are firmer intraday with the former around USD 86/bbl (84.49-86.27 range) whilst the latter resides around USD 93.50/bbl (91.95-93.92 range).
The crude complex is buoyed by the pullback in the Dollar after receiving a boost from source reports that China is considering easing its COVID rules for travellers.
Spot gold sees some support from the DXY remaining under 113.00, although remains well off recent highs, with the yellow metal still around the USD 1,630/oz mark (vs yesterday’s 1,654.50/oz high).
LME metals are mixed but 3M copper receives a boost from the Buck alongside the aforementioned China source reports, but the red metal remains under USD 7,500/t.
MMG’s (1208 HK) Las Bambas copper mine in Peru reportedly halted copper transportation due to protests.
German Energy Regulator says potential gas emergency is now end of February at the earliest, rather than end of November which was part of the scenario analysis in the August forecast, via Reuters.
BoE’s Broadbent says the MPC is likely to respond relatively promptly to news about fiscal policy. Remains to be seen if rates need to rise as much as currently priced in by markets, via BoE. The justification for tighter policy is clear. If government support mitigates the effect of import costs, there is more at the margin for monetary policy to do. If Bank Rate really were to reach 5.25%, the cumulative impact on GDP of the entire hiking cycle would be just under 5% – of which only around one quarter has already come through
UK Tory 1922 Committee officers are expected to meet on Thursday to discuss the leadership crisis in the Tory party, according to The Telegraph’s Editor. However, recent reporting indicates the Committee will not be meeting today.
UK PM Truss’s office noted that the Tory party’s chief whip and deputy chief whip remain in their posts.
ITV’s Peston, citing a member of UK Cabinet, that it is clear there is a will among ministers to attempt to keep PM Truss in office until October 31st (when the budget will be announced). A view that contrasts the recent update from ITV’s Brand, citing a 1922 member, that the “odds are against” PM Truss surviving the day as PM
NOTABLE EUROPEAN DATA
German Producer Prices YY (Sep) 45.8% vs. Exp. 44.7% (Prev. 45.8%); MM (Sep) 2.3% vs. Exp. 1.3% (Prev. 7.9%)
NOTABLE US HEADLINES
Fed’s Evans (departing) said starting rate hikes six months earlier would have made sense, while he added they need to make sure inflation pressures don’t broaden further and that Fed policy must be suitably restrictive. Evans also stated if the Fed pushes the policy rate much further than planned, it could start to weigh on the economy and he is worried that at some point rate increases could have a non-linear impact with businesses becoming more pessimistic.
CRYPTO
Overall, Bitcoin is contained and essentially unchanged on the session around USD 19.1k with specific updates relatively limited and participants focused on broader market action.
GEOPOLITICS
RUSSIA-UKRAINE
Russia’s Deputy UN envoy said Russia would reassess cooperation with the UN Secretariat if the UN chief sends experts to Ukraine to inspect downed drones and is not optimistic about the renewal of the Ukraine grain Black Sea export deal, according to Reuters.
US State Department said the US, UK and France raised the issue of Iran’s transfer of drones to Russia at a meeting of the UN Security Council on Wednesday, according to Reuters.
US Treasury senior official travelled to Turkey this week and discussed sanctions and export controls imposed on Russia, according to Reuters.
OTHER
US and South Korea are conducting military drills at their fastest pace in years to show their readiness as tensions rise on the divided Korean Peninsula, according to Nikkei Asia Review.
EU states have agreed on new sanctions against Iran regarding the supply of drones to Russia, according to the Czech EU presidency; to freeze assets of three individuals and one entity responsible for the drone sale.
APAC TRADE
EQUITIES
APAC stocks were pressured following the weak handover from Wall Street owing to the higher yield environment and as global inflationary headwinds offset the recent earnings momentum.
ASX 200 was led lower by the underperformance in tech and following disappointing jobs data, although the energy sector bucked the trend after gains in oil prices and strong quarterly output updates from Woodside Energy and Santos.
Nikkei 225 briefly fell beneath 27,000 with participants on intervention watch, while stronger-than-expected Exports and Imports failed to spur risk appetite as the data also contributed to a record trade deficit for the fiscal first half.
Hang Seng and Shanghai Comp. declined from the open with the former on course for its lowest close since 2009 amid heavy losses in tech and with the mainland also downbeat after the lack of surprises from the PBoC which maintained its benchmark lending rates unchanged as widely expected, although news of China mulling shortening its quarantine eventually lifted the Shanghai Comp into the green.
NOTABLE APAC HEADLINES
PBoC 1-Year Loan Prime Rate (Oct) 3.65% vs. Exp. 3.65% (Prev. 3.65%); 5-Year Loan Prime Rate (Oct) 4.30% vs. Exp. 4.30% (Prev. 4.30%)
China reportedly held emergency talks with chip firms after US curbs, according to Bloomberg.
China is reportedly mulling cutting inbound quarantine to 7 days from 10 days which will be presented to the top leaders, according to Bloomberg.
Indonesian 7-Day Reverse Repo (Oct) 4.75% vs. Exp. 4.75% (Prev. 3.75%); will intervene in FX to prevent imported inflation.
Japanese Finance Minister Suzuki provides no comment on FX levels; cannot tolerate speculative moves; will take action against any speculative, excessive and sudden moves, via Reuters. Japanese currency diplomat Kanda says excessive and disorderly FX moves have a negative impact on the economy, will not comment on whether Japan is intervening now or has intervened today.
DATA RECAP
Australian Employment (Sep) 0.9k vs. Exp. 25.0k (Prev. 33.5k); Unemployment Rate (Sep) 3.5% vs. Exp. 3.5% (Prev. 3.5%)
Japanese Trade Balance Total Yen (Sep) -2094B vs. Exp. -2167.4B (Prev. -2817.3B, Rev. -2820.0B)
Japanese Exports YY (Sep) 28.9% vs. Exp. 27.1% (Prev. 22.1%, Rev. 22.0%); Imports YY (Sep) 45.9% vs. Exp. 45.0% (Prev. 49.9%)
i)THURSDAY MORNING// WEDNESDAY NIGHT
SHANGHAI CLOSED DOWN 9.33 PTS OR 0.31% //Hang Seng CLOSED DOWN 231.06 OR 1.40% /The Nikkei closed DOWN 250.42PTS OR 0.92% //Australia’s all ordinaires CLOSED DOWN 1.16% /Chinese yuan (ONSHORE) closed UP TO 7.2260 //OFFSHORE CHINESE YUAN UP 7.2448// /Oil UP TO 87.46 dollars per barrel for WTI and BRENT AT 93.65 / Stocks in Europe OPENED MOSTLY GREEN. ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST US DOLLAR/OFFSHORE STRONGER
2 a./NORTH KOREA/ SOUTH KOREA/
///NORTH KOREA/SOUTH KOREA/
end
2B JAPAN
3c CHINA
CHINA/USA/EUROPE//TAIWAN
China calls its top chip executives for emergency talks after Biden unleashes economic war against them
(zerohedge)
China Calls Top Chip Execs For Emergency Talks After Biden Unleashes Economic War
THURSDAY, OCT 20, 2022 – 06:55 AM
Last week, President Biden announced new restrictions on US firms selling semiconductors to China, including restrictions on US citizens working at Chinese chip plants. Nobody might have noticed, but this is a full-blown economic war on China, a means to prohibit the country’s rise as a high-tech superpower.
Since the new restrictions, China’s Ministry of Industry and Information Technology (MIIT) has summoned executives from the country’s top chip firms for emergency meetings over the past week to evaluate the damage, according to Bloomberg. Execs from Yangtze Memory Technologies Co. and supercomputer firm Dawning Information Industry Co. met with MIIT.
Biden’s strategy to paralyze its most dangerous opponent since the end of the Cold War could be promising. People familiar with the closed-door discussions between MIIT and top Chinese execs say there’s a lot of uncertainty on how to move forward. For now, there was no mention of counter-measures. MIIT said there would be enough domestic demand for the affected chip companies with US expertise pulled out of factories and chip shipments from the US and elsewhere stopped.
The discussions revealed that some participants feared the US strategy could doom China’s ambitions to accelerate the development and production of advanced chips. Someone familiar with the meetings said at least one person explained to MIIT that the country’s cutting-edge chipmaking could be in trouble.
An example of how the new restrictions have already wreaked havoc in the industry is AI chipmaker Biren’s release of a new general-purpose graphics processing unit, “setting a new record in global computing power.” However, the firm contracted with Taiwan Semiconductor Manufacturing Co. to produce its chips using advanced 7-nanometer technology. There’s a risk that TSMC may terminate any dealings with the company because of Biden’s new restrictions. Biren has no options to manufacture advanced GPUs domestically due to the lack of high-tech chip equipment and the lack of personnel.
We noted mid-last week that US personnel pulled out of state-owned Yangtze Memory Technologies Co., while Netherlands-based ASML Holding NV halted shipments for Chinese chip companies. There are even reports that Dawning Information, China’s top builder of supercomputers, is scrambling as its access to premium US chips has vanished.
Over the weekend, we cited Rhodium Group China expert Jordan Schneider — whose blog, China Talk, can be found here, outlined Biden’s new chip export controls and other restrictions are a massive blow to “CCP’s science and technology ambitions.” He continued:
Long story short, every advanced node semiconductor company is currently facing comprehensive supply cut-off, resignations from all American staff, and immediate operations paralysis.
This is what annihilation looks like: China’s semiconductor manufacturing industry was reduced to zero overnight. Complete collapse. No chance of survival.
The Biden administration’s technological decoupling appears to be hitting China’s bottom line. This escalation could hinder the country’s rise as a great power. Why? Because it could have far more significant economic impacts than just the word “semiconductor.”
These advanced chips are used in fifth-generation fighter jets, hypersonic missile development, stealth drones, nuclear weapons, and all other sorts of intelligent war machines and may undercut China’s goal of dominating global artificial intelligence by the end of the decade. Meanwhile, this gives the US some time with the $52 billion CHIPS Act Congress recently passed to rebuild the domestic semiconductor industry and spur innovation.
China still has to deliver a response to the new US measures. What that may be is a big question. The second question is if Biden’s gamble will work. Or, like anything the Biden administration touches, it entirely backfires…
end
CHINA/GLOBAL SOUTH
‘Peaceful modernization’: China’s offering to the Global South
State of affairs inside the UK today. Truss resigns today with no support anywhere!!
Liz Truss’ legacy is actually quite impressive. She buried the Queen, the Pound, and the Tory party…ALL IN 44 DAYS
(zerohedge)
UK’s Liz Truss Resigns, Becomes Shortest-Tenured Post-War PM; Will BoJo Make A Comeback?
THURSDAY, OCT 20, 2022 – 08:29 AM
Update: U.K. Prime Minister Liz Truss has announced her resignation just 44 days after taking office, after a risky plan to cut taxes and boost spending caused turmoil on financial markets, forcing her to backtrack and her political authority to disintegrate.
She said the Conservative Party aims to choose her successor within a week, and that she will stay on as premier until then.
She is now the shortest tenured post-war PM…
As one fellow Brit commented: “4 Chancellors, 3 Home Secretaries, 2 Monarchs, and now 3 PMs in four fucking months”
This didn’t age well…
Gilt yields are dropping…
Cable is rallying….
Candidates to replace her are likely to include former Chancellor of the Exchequer Rishi Sunak — runner-up to Truss in this summer’s leadership contest. Other contenders then are also likely to be in the fray, including Penny Mordaunt, Grant Shapps and Kemi Badenoch. Former Home Secretary Suella Braverman, who was sacked on Oct. 19, may also be in the running. Defence Secretary Ben Wallace is also often touted, though he has downplayed his interest. But new Chancellor Jeremy Hunt, promoted from the back benches after Truss sacked Kwasi Kwarteng in a bid to restore calm in the markets, ruled himself out, according to his spokeswoman.
However, the leading candidate to replace Truss – according to a recent YouGov poll is (drum roll please) – Boris Johnson…
Whoever it is will face a formidable task in repairing the Tory party’s reputation and the economy in time for a general election which must take place in January 2025.
“It’s a shambles and a disgrace,” veteran Tory MP Charles Walker told the BBC on Oct. 19.
“The damage they have done to our party is extraordinary.”
Truss’s tenure has all but guaranteed post-Brexit Britain’s immediate future is one of higher borrowing costs, weak growth, tax hikes and spending cuts.
end
State of affairs inside the UK today. Truss is set to resign today with no support anywhere!!
(zerohedge)
All Truss’d Up & Nowhere To Go: Cable Rallies As UK PM Faces ‘Red Wedding’
THURSDAY, OCT 20, 2022 – 08:29 AM
Update: UK PM Truss is due to make a statement at 0830ET and Cable is rallying ahead of it…
* * *
As Rabobank’s Michael Every noted this morning – It’s not dull, is it? An average Wednesday nowadays is a little like The Game of Thrones’ infamous Red Wedding.
“Any man who must say ‘I am the King’ is no true King.”
“We’ve had vicious kings and we’ve had idiot kings, but I don’t know if we’ve ever been cursed with a vicious idiot for a king.”
“Power resides where men believe it resides. It’s a trick; a shadow on the wall.”
In markets, all the initial attention was on inflation: in the UK a surge to 10.1% y-o-y; a slight rounding down in final Eurozone inflation to 9.9% y-o-y; and another jump in Canadian inflation to 6.9% y-o-y. The Fed also made clear that they see potential US GDP growth as much lower than where it sits now, which implies it is still overheating now, so rates need to be higher for longer. Bullard then reiterated our house view that rates will peak much higher than they are now in Q1 2023, and will only be readjusted slightly rather than being slashed back to ridiculously low levels again. As a result, bond yields soared, with the UK the rare exception. US 10s are now at 4.15%, the highest since 2008; Japanese 10s briefly breached their 0.25% target level (as JPY moves towards 150); German 10s are at 2.37%; and Aussie 10s at 4.07%. That’s what power looks like. Or rather a lack of power to prevent inflation.
Back to thrones though, as PM Truss’s government implodes further. Yesterday saw reports of MPs being physically manhandled to vote against their manifesto pledge to their constituents; suggestions the Chief and Deputy Chief Whip manhandling them had both resigned; and Home Secretary Braverman forced to go for sending a personal email(!), replaced by Schapps, who is loyal to the new eminence grise, Chancellor Hunt, and former PM candidate Sunak. It was also reported Defence Secretary Wallace, again floated as a possible new PM, stated he would resign too if Hunt slashed the defence budget, forcing a retreat there. Both as a Brit and a global strategist this a farce; a tragicomedy; embarrassing; and a coup by any other name.
Obviously it’s a political coup: resigning over an email in this day and age?! Braverman’s angry out-the-door letter made that clear, but at least contained rare dignity: “Pretending we haven’t made mistakes, carrying on as if everyone can’t see that we have made them, and hoping that things will magically come right is not serious politics. I have made a mistake; I accept responsibility; I resign.” How much those words need to be said by *many* others – especially the ones now grinning as they assume power again.
Any future portrayal of this drama on Netflix will surely show King Charles muttering “Oh, dear” as the Bank of England plots. After all, The Old Lady precipitated this political crisis by triggering the market crisis by saying now was the time to step back from QE, not all the previous times it had bought Gilts when the money was effectively thrown down the drain in terms of boosting the productive potential of the UK economy. For those who protest that hypothetical, consider that despite all that past QE, the UK is exactly where we find it now: deep in an emerging-market rut. The only logical defence to be made is either ‘Brexit’, in which case look at the mess in Europe, or that the UK would have been even worse off if the BOE had not done the QE it already did.
Worse, the cash-strapped UK Treasury is going to give the Bank of England £11bn to cover the operating losses made via QE! An institution that can literally print money is taking a sum of cash that could cover the cost of four aircraft carriers just when the UK needs to be building them. What will the BOE do with it? Nothing. It just needs it to maintain a balanced balance sheet. Which brings us back to the arguments about stable FX and what central banks’ true roles are within political economy.
Let’s be clear, ill-founded as Thatcherism on steroids was a proposed solution to the UK structural problems, at least Truss was trying something. What we get now is a return to guaranteed technocratic institutional failure – because that was what we all agreed we had in place before Covid. Someone thinking that way too is Bloomberg commentator @izakaminska, who tweets:
“This may suit you now because Liz wasn’t your cup of tea. Fine I get it. She wasn’t mine either. But all you have created is a precedent wherein no politician be they left, right, centre or populist will ever be able to wrestle power back from the markets. When the bond vigilantes + a shouty Twitter mob control political decision making (not politicians) we are basically in the hands of mob rule. The result will be the actual destruction of Britain.
Obviously bond markets matter. But the same bull-headed commitment to pleasing the markets regardless of how they hurt the people of Russia is what brought us Putin. Yeltsin’s commitment to shock therapy regardless of the domestic consequences is what killed democracy there.
Instead of a politician who has the actual guts to be political again (regardless of whether you like her politics, the point is you can vote her out right. That’s how democracy works) we have ended up with custodian PM who is basically there as the front man for the “markets”
We have disdain for Putin being under the thumb of the siloviki or Yeltsin the oligarchs, but that is precisely what we have in Jeremy Hunt. A man who will sell out Britain to please “the markets”. Great.”
The irony is that this is happening in the UK just as the global Game of Thrones is shifting elsewhere. As the Financial Times notes today, ‘Containing China is Biden’s explicit goal’. The article makes the point already underlined here, that despite the odd lack of market interest in the White House order to ban China from accessing US tech, the real economy and real world implications are staggering, and really geopolitical – of the aircraft carrier variety.
Likewise, US Republicans, even more hawkish on China, are making clear if they win next month’s mid-term elections –and they are strong favourites to do so– they will stop funding Ukraine’s fight against Russia. That’s as Putin declared martial law and economic mobilization in provinces neighbouring the newly-conquered territory to boost his war effort.
The implications for Ukraine are worrying, but they are not much better for Europe, which would either have a vast amount of military spending to do, both to support Ukraine and re-arm itself, or a lot of kow-towing and eating of very cold, bloody humble pie. (To be clear, it’s going to eat humble pie either way: the only issue is whose. Indeed, will the US keep supporting Europe is the next question to ask.) Such outcomes would shatter what remains of the technocratic view of how Europe operates, as we already see nationalisations, Covid-era subsidies for years to come, rationing, and talk of emergency measures on supply chains. Regardless, there are probably technocratic EU/ECB officials out there already planning how to rein in state spending so we can get interest rates back down again and please markets.
Let me conclude with a link and a quote from a rant from a furious UK Tory MP from last night: “I’ve had enough of talentless people putting their tick in the right box not because it’s in the national interest, but because it’s in their own personal interest.”
END
EUROPE/UK
Can Europe avoid a worst case energy scenario this winter
(Paraskova/OilPrice.com)
Can Europe Avoid A Worst-Case Energy Scenario This Winter?
European countries have done most things they feasibly could to fill gas storage units.
Overall in the EU, gas storage was 92.37% full as of October 17.
Weather will be the determining factor in how fast gas in storage would be depleted, so Europe hopes for the best and prays for a milder winter.
Europe’s gas prices fell at the start of this week to the lowest level in three months as storage is fuller than initially expected, LNG cargoes are coming in, and the weather is mild. But European governments have been preparing for the worst-case scenario in which a colder-than-usual winter could quickly sap gas in storage, send gas prices soaring again, intensify competition for costly LNG with Asia, break consumers’ resolve to conserve energy in freezing temperatures, and force more businesses and industrial processes to halt operations.
Europe has done all it can to ensure the heating and lights will be on this winter, analysts say. Yet this may not be enough—a long cold, windless spell this winter would threaten to unravel all the efforts and lead to mandatory energy-saving targets, rationing, or rolling outages.
The Good News
All that can be feasibly done to ensure alternative gas supply after the Russian invasion of Ukraine and the Russian halt of gas flows to nearly all EU member states has been done. Floating storage regasification units (FSRUs) are being set up in Germany, the Netherlands, and Finland. Eemshaven in the Netherlands and Wilhelmshaven and Brunsbüttel in Germany are expected to begin operations as early as the end of this year. Europe is paying a lot for LNG supply, outbidding Asia, which was the top buyer of spot cargoes before the war.
Germany, Europe’s biggest economy and until recently Russia’s top gas customer, saw its storage hit 95% full two weeks ahead of schedule amid higher-than-typical filling of gas storage sites across Europe.
Overall in the EU, gas storage was 92.37% full as of October 17, with Germany’s storage at over 96% full, a target Berlin expected to reach by November 1. Italy’s gas storage is 94% full and France’s is at over 98%, according to data from Gas Infrastructure Europe.
Moreover, France started sending natural gas directly to Germany last week in an attempt to alleviate the energy crisis in Europe’s biggest economy as the EU encourages solidarity among member states in natural gas supply.
Additional easing of the gas emergency concerns in Europe came from the Copernicus Climate Change Service, whose latest weather model suggested last week that most of Europe was more likely to face mild temperatures than a deep freeze this winter. Despite forecasts of a warmer than usual winter, there’s a greater chance of a cold windless snap as soon as in November and December, the service says. Low wind speeds would mean that most of northwest Europe, which relies on wind for power generation, may have to resort to other sources of power generation, exhausting the precious gas supply.
The Bad News
Weather will be the determining factor in how fast gas in storage would be depleted, so Europe hopes for the best and prays for a milder winter.
“Barring catastrophes, such as extremely cold weather, if we keep consumption in check, we’ll get through the winter fine. We just have to hope nothing goes wrong,” Italy’s Energy Transition Minister Roberto Cingolani told The Wall Street Journal.
Unfortunately for Europe, many things can go wrong. A very cold winter is just one of them.
Russia could suspend gas exports if the EU implements a price cap on Russian gas, Gazprom’s CEO Alexey Miller said this week. Russia still exports gas to Europe via one link through Ukraine and through TurkStream.
The Uncertainties
Another uncertainty in supply could come from China, whose LNG importers are reportedly told to stop reselling LNG cargoes to gas-starved Europe, in what could be a blow to the European hopes of continuous high inflows of LNG as the winter approaches.
On the demand side, it’s uncertain how European consumers will react to the incessant calls for energy savings when temperatures plunge and governments hand out aid to households to help them pay their soaring bills. Government-backed bill support schemes could actually discourage consumers from saving on gas and electricity, some analysts argue.
The first colder-than-normal week this autumn saw Germany failing the energy-saving test at the end of September. In the last week of September, when the first colder wave hit, German households and small businesses used nearly 10% more gas than the four-year average for that week, the regulator said.
“Without significant savings, also in the private sector, it will be difficult to avoid a gas shortage in the winter,” the agency’s president Klaus Müller said.
Germany’s gas storage may be nearly full, but it will not see Europe’s largest economy through the winter, the regulator says.
Demand destruction due to the very high gas prices is somewhat helping with savings, but it comes at the cost of deindustrialization as many factories and energy-intensive industries have been forced to curtail, halt, or relocate production. Energy-intensive industries in Europe, including aluminum, copper, and zinc smelters and steel makers, have already warned EU officials that they face an existential threat from surging power and gas prices.
Due to sky-high prices and a very tight gas market, natural gas usage in the power-generating sector in Europe is forecast to drop by nearly 3% this year. Industrial gas demand is expected to plunge by as much as 20%, the International Energy Agency (IEA) said in its quarterly Gas Market Report early this month.
The winter of 2023/2024 could be even more difficult for Europe’s gas procurement as the energy crisis will not be “a one winter story,” the IEA and analysts have warned.
end
UK/IRELAND
UK and Irish families spend 1/3 of their income on childcare
(zerohedge)
Irish & UK Families Spend A Third Of Their Income On Childcare
THURSDAY, OCT 20, 2022 – 04:15 AM
The UK and Ireland have some of the highest childcare costs in the developed world.
As Statista’s Anna Fleck details below, according to data from the OECD, the average working couple in Ireland and the UK spends about a third of their income on childminders and nurseries.
That’s around three times as much as parents in Luxembourg, Spain and Norway.
Childcare costs in Cyprus and the Czech Republic are also steep, with families forced to spend on average at least 31 and 29 percent of their income respectively on full-time care for their children.
In the United States, costs are slightly lower (around a fifth of a couple’s wages).
It’s worth noting however, that in countries where benefit rules are not decided on a national level but rather by region or municipality, analysts have sourced data that refers to a “typical” case, for example in the capital.
This chart is based on the data of 40 year old couples that are earning an average, full-time wage, with two children aged 2 and 3.
It takes into consideration wages after childcare benefits have been deducted – whether those are childcare allowances, tax concessions, fee rebates and increases in other benefit entitlements.
As wages stagnate and the cost of living increases, the high prices of childcare are putting families under increased financial pressure.
end
END
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
RUSSIA/UKRAINE
Ukrainians Asked To Reduce Power Usage As Rolling Blackouts Begin
THURSDAY, OCT 20, 2022 – 12:05 PM
Ukraine is warning its citizens of rolling blackouts at a moment the war-ravaged country is poised to enter frigid winter months. Earlier in the week Ukrainian President Volodymyr Zelensky estimated that up to one-third of all of Ukraine’s power stations have been attacked amid Russia’s ongoing stepped up airstrikes and suicide drone deployments.
Zelensky on Thursday asked residents to urgently reduce their daily power usage as regional blackouts have been reported. Stating that at least three out of ten key power stations have been destroyed this week, Zelensky vowed, “Of course, we will do everything possible to restore the normal energy capabilities of our country, but it takes time.”
The Ukrainian leader further requested that people be “as conscious as possible” about utilizing high-power appliances and items in order to limit the potential for blackouts. Local reports said Thursday that seven regions, including the capital, have seen limits imposed on electrical supply.
Regional governors, particularly in cities near the front lines with Russia, have described a deliberate campaign on the part of the Kremlin to “intimidate us and leave us without light and heat,” per the words of the acting mayor of Zaporizhzhia, Anatoly Kurtev.
National energy grid operator Ukrenergo has issued emergency alerts headed into Winter:
In preparation for the blackouts, Ukrenergo has appealed to Ukrainians to stock up with water and ensure they have “warm socks and blankets and hugs for family and friends”.
Phones, power banks, torches and batteries need to be charged, it urged.
As much as 40% of Ukraine’s energy infrastructure has been seriously damaged, according to Oleksandr Kharchenko, an adviser to the energy minister.
Planned rolling blackouts have begun in order to preserve critical infrastructure and public services:
And the mayor of Kyiv said that individual households agreeing to voluntary power reductions will help at a moment the capital’s buildings begin to be heated as temperatures drop.
“Even a small saving and reduction of electricity consumption in each residence will help to stabilize the operation of the national energy system,” Mayor Vitali Klitschko said on Telegram. “I also ask entrepreneurs, owners of advertising spaces, shops, cafes and restaurants to save as much as possible on the lighting of signs and screens.”
END
end
END
6. GLOBAL ISSUES//COVID ISSUES//VACCINE ISSUES.
Vaccine//Covid issues:
Totally nuts!!
(zerohedge)
CDC Set To Add COVID-19 Vaccines To Childhood Immunization Schedule
THURSDAY, OCT 20, 2022 – 09:45 AM
A Centers for Disease Control and Prevention (CDC) advisory committee is set to vote on Thursday over whether to add the Covid-19 vaccine to the recommended schedule of vaccines for children.
And while left-wing fact checkers were quick to point out that this doesn’t automatically mean schools will require students to take the jab – a decision made at the local level – even ABC News admits; “If the CDC does update its list of suggested vaccinations to include the COVID vaccine, which is available to anyone 6 months or older, that will open the door for states to begin making those calls, too.“
The CDC also pushed back, stating that it’s Thursday meting is an annual gathering to simply update which vaccines doctors should recommend to their patients – with no acknowledgement that most doctors are going to follow it.
“Thursday, CDC’s independent advisory committee (ACIP) will vote on an updated childhood immunization schedule. States establish vaccine requirements for school children, not [the Advisory Committee on Immunization Practices] or CDC,” the agency wrote in response to a segment by Fox News‘ Tucker Carlson, who reported that the updated childhood vaccine schedule would soon mean that kids “will not be able to attend school without taking the COVID shot.”
“State laws establish vaccination requirements for school children. These laws often apply not only to children attending public schools but also to those attending private schools and day care facilities,” the CDC writes on its website, adding “All states provide medical exemptions, and some state laws also offer exemptions for religious and/or philosophical reasons.”
On Wednesday, a CDC advisory committee separately decided to add the COVID vaccine to the Vaccines for Children program, which provides government-funded jabs to children who aren’t insured or can’t afford to pay.
“Equitable access to COVID-19 vaccines for all ages and populations remains critically important,” said the CDCs Dr. Sara Oliver at the meeting, ABC News reports. “This includes now, while the vaccines are being supplied by the federal government, and in the future, when we one day move to a commercial program.”
Sen Rand Paul (R-KY) slammed the decision, calling it “Appalling!”
And as Summit News notes, Paul responded recent revelations from Boston University, which recently made headlines for genetically engineering a strain of Covid with an 80% mortality rate in mice.
Others noted that there’s little to no data on how the Omicron strain of Covid-19 affects children.
So – while adding the Covid-19 vaccine to the list of recommended childhood immunizations does not automatically mean kids will be forced to get it if they want to attend school – it’s nothing more than a game of semantics when it’s clear that most schools will follow the guidance.
If I were a Republican candidate in a blue state, I would have ads about school Covid vaccine mandates ready to go today, assuming the the CDC vaccine committee is foolish enough to throw this chum in the water. At a time when countries all over the world are now rejecting mRNA shots for kids, can our public health “experts” really be this stupid? Or this beholden to the mRNA companies?
Experience suggests the answer is yes.
END
GLOBAL ISSUES
Food crisis of 2023 is going to be far worse according to Michael Snyder
(Michael Snyder)
The Food Crisis Of 2023 Is Going To Be Far Worse Than Most People Would Dare To Imagine
I am trying to sound the alarm about this as loudly as I can. The global food crisis just continues to intensify, and things are going to get really bad in 2023. As you will see below, two-thirds of European fertilizer production has already been shut down, currency problems are causing massive headaches for poor nations that need to import food, global weather patterns continue to be completely crazy, and the bird flu is killing millions upon millions of chickens and turkeys all over the planet. On top of everything else, the war in Ukraine is going to restrict the flow of agricultural and fertilizer exports from that part of the world for a long time to come, because there is no end to the war in sight. In essence, we are facing a “perfect storm” for global food production, and that “perfect storm” is only going to get worse in the months ahead.
Global hunger has been on the rise for years, and the UN World Food Program is warning that we are heading for “yet another year of record hunger”…
The world is at risk of yet another year of record hunger as the global food crisis continues to drive yet more people into worsening levels of severe hunger, warns the United Nations World Food Programme (WFP) in a call for urgent action to address the root causes of today’s crisis ahead of World Food Day on October 16.
The global food crisis is a confluence of competing crises – caused by climate shocks, conflict and economic pressures – that has pushed the number of severely hungry people around the world from 282 million to 345 million in just the first months of 2022. The U.N. World Food Programme scaled up food assistance targets to reach a record 153 million people in 2022, and by mid-year had already delivered assistance to 111.2 million people.
Eventually, there will be billions of people that don’t have enough to eat on a regular basis.
In all my years, I have never seen hunger spread so rapidly. In fact, there are large numbers of people that are now facing starvation in the backyard of the United States…
The United Nations is warning that hunger in one of Haiti’s biggest slums is at catastrophic levels, as gang violence and economic crises push the country to “breaking point”.
Nearly 20,000 people in the capital’s impoverished Cité Soleil area have dangerously little access to food and could face starvation, the UN says,
Across Haiti, almost five million are struggling with malnutrition.
“Haiti is facing a humanitarian catastrophe,” a top UN official said.
But most people in the western world won’t care until they are going hungry themselves.
Unfortunately, that day may be a lot closer than a lot of people ever imagined.
Right now, a whopping two-thirds of all fertilizer production capacity in Europe has already been shut down because of the skyrocketing price of natural gas…
Europe’s fertilizer crunch is deepening with more than two-thirds of production capacity halted by soaring gas costs, threatening farmers and consumers far beyond the region’s borders.
Russia’s squeeze on gas shipments in the wake of Moscow’s invasion of Ukraine is hurting industries across Europe. But fertilizer companies are being especially affected because gas is both a key feedstock and a source of power for the sector.
There simply will not be enough fertilizer for European farmers in 2023.
And there won’t be enough for everyone else that depends on fertilizer production from Europe.
This is a really big deal, because without fertilizer we would only be able to feed approximately half the planet.
Do you want to volunteer to be among those that don’t get enough food?
Meanwhile, the surging U.S. dollar is causing immense headaches for food importers all over the world…
In Ghana, importers are warning about shortages in the run up to Christmas. Thousands of containers loaded with food recently piled up at ports in Pakistan, while private bakers in Egypt raised bread prices after some flour mills ran out of wheat because it was stranded at customs.
Around the world, countries that rely on food imports are grappling with a destructive combination of high interest rates, a soaring dollar and elevated commodity prices, eroding their power to pay for goods that are typically priced in the greenback. Dwindling foreign-currency reserves in many cases has reduced access to dollars, and banks are slow in releasing payments.
The value of the U.S. dollar has been spiking because the Federal Reserve has been raising interest rates.
When the value of the dollar goes up, poor countries have to pay a lot more for food in their own local currencies.
So the Federal Reserve is actually making the global food crisis worse by hiking rates.
But they are going to keep doing it anyway.
At the same time, global weather patterns continue to go completely haywire.
This summer we witnessed the worst drought in Chinese history, Europe endured the worst drought in 500 years, and the western U.S. continued to suffer through the worst multi-year megadrought in at least 1,200 years.
Needless to say, all of this drought is absolutely devastating agricultural production.
According to the Washington Post, “more than 80 percent of the U.S. is facing troubling dry conditions” right now. In the middle of the country, this has caused a horrific crisis for barge traffic along the Mississippi River…
The barge industry is quite important. It’s crucial for moving aluminum, petroleum, fertilizer and coal, particularly on the Mississippi River and its tributaries. About 60% of the grain and 54% of the soybeans for U.S. export are moved via the noble barge. Barges touch more than a third of our exported coal as well.
Right now the barge industry — and all of us who depend on its wares — is mired in a crisis. Water levels on the Mississippi River Basin are at its lowest point in more than a decade.
Last week, approximately 2,000 barges were struck at one point.
Sadly, very dry conditions are expected “over the next several weeks”, and so things are not likely to get better any time soon…
Low water levels and dredging shuttered barge traffic heading north and south on the Mississippi last week. At one point, more than 100 towboats and 2,000 barges were stuck waiting. The blocked-off section of the river, between Louisiana and Mississippi, reopened Monday. Traffic is limited to one way, according to Petty Officer Jose Hernandez of the U.S. Coast Guard.
That’s certainly better than zero-way traffic, but the Mississippi is still expected to become even more parched. Lisa Parker, a representative of the U.S. Army Corps of Engineers, told FreightWaves that drier conditions are expected over the next several weeks. The river is slurping up water reserves right now, Parker added, but those reserves will eventually run out.
As a result of this crisis, rates to move goods by barge have gone through the roof, and we could ultimately see massive amounts of agricultural produce rot before it can get to consumers…
Since many barges are stuck and cannot move at all, barge prices are reportedly hyperinflating. As of this writing, the highest USD per ton price shown is $90.44. Prior to the massive spike, it was under $10 to move a ton of goods.
The vast majority of the now-stranded bean piles and other farm goods were intended for major export terminals in the Gulf of Mexico. While at least some of them appear to be covered and ventilated, how long will they really last before spoiling?
On another note, we continue to see crabs die off at a staggering rate.
In fact, it is now being reported that the winter harvest of snow crab in Alaska has been suspended because the crab population has experienced a catastrophic decline…
Alaska officials have canceled several crab harvests in a conservation effort that sent shock waves through the crabbing industry in the region.
Officials canceled the fall Bristol Bay red king crab harvest and, for the first time on record, are also holding off on the winter harvest of snow crab, according to multiple reports.
The decision comes after stark recent population declines of the animals. Data from an NOAA eastern Bering Sea survey shows a 92% decline in overall snow crab abundance from 2018 to 2021, the Alaska Department of Fish and Game confirmed to USA TODAY. An 83% decline occurred from 2018 to 2022, as some small crab entered the population in 2022, according to the department’s Division of Commercial Fisheries.
And thanks to the global bird flu pandemic, birds continue to die in staggering numbers as well.
If you can believe it, nearly 100 million chickens and turkeys have already been wiped out during this pandemic in the United States and Europe alone, and experts are warning that this pandemic will only intensify now that cold weather is arriving.
Those of you that have been to the grocery store lately already know that egg prices, chicken prices and turkey prices have surged to absolutely crazy levels. At this point, prices are so high that one recent survey found that one out of every four Americans plans to skip Thanksgiving this year in order to save money…
One in five Americans are unsure if they will be able to cover the costs of Thanksgiving this year, and one in four plan to skip it to save money, a recent Personal Capital survey found.
The state of economic affairs in President Joe Biden’s America is affecting Americans’ holiday plans. According to the survey, one quarter of Americans are planning to skip Thanksgiving this year to save money, and one in five “doubted they would have enough money to cover the costs of Thanksgiving this year.”
More specifically, one-third expect their 2022 Thanksgiving dinner to be “smaller,” and 45 percent, overall, said they are “finically stressed” by Thanksgiving.
The comment came during a conversation with a reporter at a Baskin Robbins in Portland, Oregon, who asked the president if he had any worry about the strength of the U.S. dollar amid rising inflation.
With a chocolate chip ice cream cone in his hand, Biden answered: “I’m not concerned about the strength of the dollar. I’m concerned about the rest of the world. Our economy is strong as hell.”
You believe him, don’t you?
Our leaders would have us believe that all of the problems that we are facing right now are just temporary and that a golden new age of peace and prosperity is just around the corner.
But if that is true, why are they so eager to have us eat bugs?
A tremendous amount of time, energy and resources is being put behind a campaign to promote insects as one of the solutions to the rapidly growing global food crisis.
But I don’t plan to eat bugs, and I am sure that you don’t either.
Unfortunately, there isn’t going to be nearly enough food for everyone on the planet in 2023, and millions upon millions of deeply suffering individuals will soon be desperately hungry.
They can push bug eating all they want, but that isn’t going to fix our problems. Right now, they have absolutely no solutions that will prevent large numbers of people from starving to death during the difficult years that are in front of us.
* * *
It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.
Dr. Mike Yeadon and Dr. Paul Elias Alexander discuss Pfizer’s admission that they did not study or test transmission of the COVID gene injection. October 13, 2022; Pfizer did not look at transmission
Pfizer Inc. & BioNTech announced U.S. FDA granted Emergency Use Authorization (EUA) for a 10-µg booster dose of their Omicron BA.4/BA.5-adapted bivalent COVID-19 vaccine in children 5 through 11 years
These vaccines are untested in these children and the risk to them is near zero with a vaccine that is ineffective and skews towards harms. So how could FDA approve this? This is illogical, irrational, specious, and downright dangerous!
How? Where is the data? These malfeasants at FDA know that Pfizer has been fraudulent since day 1 with the data, yet the FDA has authorized this based on a few weeks of follow up so NO safety data, and based on the BA.1 subvariant that you cannot extrapolate to BA.4 and BA.5 sub-variant clade. Also based on antibody levels in another study? How outrageous this is as a methodologically sound approach. It is not!
I warn again, healthy children do not needs these fraud shots and healthy children will die from them. Adults have. Do not give your healthy child these COVID gene injections, they are sub-optimal, do not work (negative efficacy, original antigenic sin, antibody dependent enhancement of infection and disease), viral mutational immune escape) and are harmful.
I’ve read Miranda Devine’s Laptop From Hell and Peter Schweizer’s Red-Handed, which were phenomenal, but Marco Polo’sReport on the Biden Laptop is the most damning thing ever written about the Biden Crime Family.
Nothing else comes close.
630 pages.
2,020 footnotes.
459 fully-documented crimes.
The Biden Laptop is the Rosetta Stone of political corruption, and Marco Polo’s Report should be required reading for every American.
Garrett Ziegler and his team use all the documents, emails, photographs, and text messages on Hunter’s Laptop to diligently detail the Biden Crime Family’s foreign collusion and money laundering operation with America’s greatest rivals.
This report destroys the Biden Crime Family and carpet bombs everyone in their corrupt inner circle.
For the past thirteen months, Marco Polo—a nonprofit research group comprised of six men from across the U.S. dedicated to exposing corruption and blackmail—has been writing a comprehensive Report on the Biden Laptop and the crimes thereon. Our motives…
Ziegler, 26, who worked in the Office of Trade and Manufacturing Policy at the White House during the Trump administration, told The Sun: “Our number one goal is to ensure that Republicans don’t waste time.
The investigation has been done.”
“All we’re seeking is the equal application of the law.”
“So far, this saga has been one of the greatest examples of double standards in American legal history.”
“People have gone to prison for decades based on Joe’s own policies for doing exactly what Hunter did.”
“Meanwhile Hunter is living at a beachside estate in Malibu.”
‘
VACCINE IMPACT/
Zionist Organization of America: Trump “Best Friend Israel ever had in the White House”
October 19, 2022 10:00 pm
The Zionist Organization of America, which works to strengthen U.S.-Israel relations and combat anti-Israel bias, announced last Friday that it will award the “rarely given” Theodor Herzl Medallion to former U.S. President Donald Trump. In an email sent to its members, the ZOA said it was honoring the former president “for being the best friend Israel ever had in the White House.” Dr. Miriam Adelson, physician and billionaire, will present Trump’s award on Nov. 13 at the Zionist Organization’s national awards dinner in New York City.
Diesel costs continue to skyrocket as inventories plummet
(zerohedge)
Forget Oil, The Real Crisis Is Diesel Inventories: The US Has Just 25 Days Left
WEDNESDAY, OCT 19, 2022 – 10:05 PM
For all the drama surrounding Biden’s latest Strategic Petroleum Reserve fiasco and his admin’s ridiculous idea to “stimulate” US energy producers to pump more oil because, you see, Biden promises to buy oil at some unknown point in the future (he may or may not, but right now he is certainly draining a million barrels of emergency US energy lifeblood just to buy a few midterm votes, assuring energy producers have zero incentive to produce more), the real crisis is not oil or gas, but diesel.
The problem is that as we repeatedly warned over the summer, even as others were transfixed by the moves in gas, see:
… the crisis gripping the US diesel market is getting out of hand, as demand is surging while supplies remain at the lowest seasonal level for this time of year ever, according to government data released Wednesday.
According to the EIA, the US now has just 25 days of diesel supply, the lowest since 2008; and while inventories are record low, the four-week rolling average of distillates supplied – a proxy for demand – rose to its highest seasonal level since 2007.
In short, record low supply (courtesy of stifling regulations that have led to a historic shortage of refining capacity) meet record high demand. What comes next is, well, ugly (while weekly demand dipped slightly in the latest week, it’s still at highest point in two years amid higher trucking, farming and heating use).
The shortage of the fuel used for heating and trucking and – generally speaking – to keep commerce and freight running, has become a key worry for the Biden administration heading into winter, perhaps even bigger than the price of gas heading into the midterms (well, not really). As Bloomberg’s Javier Blas writes, “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.”
National Economic Council Director Brian Deese told Bloomberg TV Wednesday that that diesel inventories are “unacceptably low” and “all options are on the table” to build supplies and reduce retail prices.
But while the White House claims to be so very concerned about the coming diesel crisis, it is doing absolutely nothing besides draining the SPR which has zero impact on diesel production.
The historic diesel crunch comes just weeks ahead of the midterm elections and will almost certainly drive up prices for consumers who already view inflation and the economy as a top voting issue. Retail prices have been steadily climbing for more than two weeks. At $5.324 a gallon, they’re 50% higher than this time last year, according to AAA data.
Wholesale diesel prices in the spot market of New York harbor, a key pricing point, have surged this week to more than $200 per barrel. Excluding a brief interval from late April into mid-May, that would be a record high.
As a result, American refiners are enjoying the best-ever diesel margins, with the profit of turning a barrel of crude into one of diesel – i.e., the diesel crack spread – hitting a record high of $86.5 per barrel, up roughly 450% from the 2000-2020 average of $15.7 per barrel.
This isn’t all that surprising. as we have been warning all year, the American diesel market has been in crisis mode for most of 2022; if only others had caught on this crisis may have been averted. But now, it’s too late, and national stockpiles have drained as refiners entered maintenance season and as Russia’s war in Ukraine tightened global supplies and limited imports. Meanwhile, market backwardation – where prompt deliveries are priced at a premium over future deliveries – has made building inventory extremely costly, feeding into a vicious cycle of tight supplies and price spikes. In New England, where more people burn fuel for heating than anywhere else in the country, stockpiles are less than a third of typical levels for this time of year.
The reasons for the collapse in inventories and the price surge are four-fold.
First, local diesel demand has recovered quicker than gasoline and jet-fuel from the impact of the pandemic, draining stocks.
Second, foreign demand is also strong, with American diesel exports running at unusually high level.
Third, and according to many, most important of all, the US also has lower refining capacity than before, reducing its capacity to make fuels.
Fourth is Russia’s invasion of Ukraine. The US was importing a significant amount of Russian fuel oil before the war, which its Gulf of Mexico-based refiners turned into diesel. The trade ended after the White House sanctioned Russian petroleum exports.
Some relief is on the way, courtesy of those handful of international sources of commodities that the Biden admin hasn’t declared an implicit war on. At least two vessels carrying around 1 million barrels of diesel are due to arrive in New York after being diverted from their original destinations in Europe. Delta’s Trainer refinery in Pennsylvania is also returning from seasonal maintenance, which will increase regional diesel production.
But the impact of such band aids will be tiny. As Bloomberg’s Blas writes, “the diesel crisis leaves the Biden administration facing very difficult choices. If he leaves the market alone, prices are likely to rise further before they drop; if he intervenes, either setting up minimum inventory levels or restricting exports, price increases will likely be felt elsewhere into the world. Either route will have big implications for inflation at home and for energy security in Latin America and Europe.“
In a testament to just how clueless the Biden admin is, last spring wholesale diesel prices surged to all-time high as inventories plunged in April and May, pushing retail prices to a record high. At the time, this website (and many others) warned that we have to take urgent steps now to avoid a crisis… and nobody moved a finger; jaw bones on the other hand never stopped. Well, fast forward to now when a new crisis is in the making. America typically uses the low-demand seasons of spring and summer to rebuild its stocks of distillate fuels ahead of the winter. But it failed to do so this year – something even Europe avoided by stockpiling nat gas knowing it faces a freezing winter otherwise – and stocks are now nearly as low as they were in April, at the end of the last heating season.
If inventories decline between October and April by their 20-year average of about 25 million barrels, the US will emerge from winter with a little more than 80 million barrels in stock. That, according to Blas, is an unlikely scenario, however: The oil market would try to keep inventories from falling that much, with prices rising high enough to slow the economy, curtailing demand. Over the last 40 years, American diesel inventories have never dropped below 85 million barrels, even at the end of the heating season.
So now that the genie is out the bottle, here are the choices the Biden admin faces, all of them unpalatable:
The White House can let the market continue doing its job, with surging prices likely denting consumption and boosting supply. With refineries enjoying sky-high margins, more diesel should be coming. But the cost of the laissez-faire approach is higher inflation and a much faster recession as US industries shut down. Because diesel increases trucking costs, it’s a particularly pernicious sort of inflation as it quickly embeds into everything that needs to be transported, lifting core inflation measures.
If the White House opts to intervene, the less harmful measure would be to release a small reserve of diesel that the government keeps for emergencies (clearly they have no problem doing that). The Northeast Home Heating Oil Reserve only has one million barrels, so it would be, at best, a Band-Aid. But it’s better than nothing, and Biden should order its release. For those asking, releasing more crude from the Strategic Petroleum Reserve would do little to resolve the problem, since the bottleneck is refining.
Other interventions would have significant consequences, potentially harming American allies. In Washington, officials are mulling restricting, or even banning, diesel exports. If the measure is approved, it would leave neighbors including Mexico, Brazil and Chile short of diesel. In July, the last month with available full data, US diesel exports to Latin America hit a record high of 1.2 million barrels, double the amount a decade ago.
Another option is forcing oil companies to build up stocks quickly ahead of the winter by setting a minimum inventory level, similar to what the European Union did for natural gas stockpiles. US officials are particularly worried about the northern part of the US East Coast, where inventories are low both seasonally and in absolute terms. The region, known in the industry’s jargon as PADD1A, is where the greatest demand is: Of the roughly 5.3 million households that use heating oil in America, more than 80% are in the Northeast. The problem with a mandatory minimum stock level is that it would force American refiners to import more or reduce their exports — or both. The impact in Latin America would be noticeable. Prices in the US may decline, but they will soar elsewhere.
The bottom line, as the Bloomberg energy strategist notes, is that “the timing of today’s diesel crisis couldn’t be worse.” That’s because the EU, which relies still on Russian diesel exports, will ban imports from February onward (assuming it survives the winter). Europe will be short of diesel then, and Biden needs to consider that too. Ultimately, the imminent arrival of the bone-crushing recession will rebalance the market, reducing demand, particularly as the housing market cools and construction slows down, and consumer demand for goods declines, reducing trucking needs.
That’s a heavy price to pay to resolve the problem, but with an administration as hopelessly clueless as this one, which today blasted the following tweet to make a point yet proved just the opposite…
… we are sadly out of option
end
US NatGas Slumps To Six-Month Low As Supply Fears Ease
BY TYLER DURDEN
THURSDAY, OCT 20, 2022 – 10:15 AM
US natural gas prices slid to a six-month low Thursday morning as traders speculated US stockpiles could climb even higher, easing concerns about tight supplies ahead of the heating season.
NatGas for November delivery slid over 2% to $5.35 per million British thermal units on Nymex around 0935 ET.
“Futures have now erased most of the rally that followed the Russian invasion of Ukraine,” Bloomberg said.
The Energy Information Administration is expected to publish a weekly report this morning that shows another large inventory build. Warmer weather in the US has also been a factor in depressing demand.
“Survey averages for the morning EIA storage report suggest a build of +102-105 Bcf, larger than the 5-year average of +73 Bcf. Temperatures were near to warmer than normal over most of the US, besides slightly cool across the Great Lakes and Ohio Valley. We expect a build of +105 Bcf, and if close, will improve deficits from -221 to near -190 Bcf,” NatGasWeather noted on its website.
Warmer weather is forecasted in the National Weather Service’s 6-10 day outlook for the eastern half of the US, keeping demand for the fuel low.
However, stockpiles are still below the 20-year average, and the Freeport terminal is expected to restart soon after a June fire.
Any blast of cold weather for an extended period could reverse the downtrend in US NatGas prices. Plus, watch export data of Freeport shipments, as they should start to increase shortly.
The NOPEC bill, which would allow OPEC’s members to be sued under U.S. antitrust laws, has been placed on the Senate’s legislative calendar.
Due to the packed legislative schedule before the midterms, the NOPEC bill will likely only be up for discussion after the elections.
Interest in the NOPEC bill has intensified since the cartel agreed to a 2 million bpd cut to its November production quotas.
The U.S. Senate Judiciary Committee moved on Tuesday the bill that would allow the U.S. to sue OPEC for antitrust behavior and market manipulation to the Senate, Congress records show.
The so-called No Oil Producing and Exporting Cartels (NOPEC) Act, which proposes to amend the Sherman Act to make oil-producing and exporting cartels illegal, was placed on the Senate Legislative Calendar under General Orders.
Chances are that the bill won’t be debated until after the midterm elections on November 8, but that will depend on whether Senate Majority Leader Chuck Schumer moves the bill for debate. Considering the packed legislative schedule before the midterms, the NOPEC bill could only realistically be up for discussion after the elections, Reuters notes.
NOPEC has been an on-and-off topic for U.S. lawmakers and Administrations for over two decades but has never moved past discussions at committees in Congress. Forms of antitrust legislation aimed at OPEC were discussed at various times under Presidents George W. Bush and Barack Obama, but they both threatened to veto such legislation.
NOPEC was passed by the Senate Judiciary Committee in May this year, but calls for passing such legislation have intensified since the OPEC+ group decided in early October to reduce their headline oil production target by 2 million bpd as of November.
Following the OPEC+ decision, Republican Senator Chuck Grassley, author of the bipartisan NOPEC Act, called for action “to hold foreign oil producers accountable for colluding to fix global oil prices.”
“If this administration insists on making us more dependent on less friendly, less environmentally conscious foreign oil producers, we should at least be able to hold them accountable for their unfair price fixing. My bipartisan NOPEC Act would crack down on these tactics by the foreign oil cartel,” Senator Grassley said in early October.
The White House has vowed a response to what it described as a “short-sighted” and “misguided” decision of the OPEC+ alliance.
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 THURSDAY morning 7:30 AM
Euro/USA 0.98131 UP 0.0045 /EUROPE BOURSES // MOSTLY GREEN (EXCEPT GERMAN DAX)
USA/ YEN 149.79 DOWN 0.042 /NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL…//YEN TOTALLY COLLAPSES
GBP/USA 1.12556 UP 0.0049
Last night Shanghai COMPOSITE CLOSED DOWN 9.33 PTS OR 0.31%
Hang Seng CLOSED DOWN 231.06 POINTS OR 1.40%
AUSTRALIA CLOSED DOWN 1.16% // EUROPEAN BOURSE: ALL GREEN EXCEPT GERMAN DAX)
Trading from Europe and ASIA
I) EUROPEAN BOURSES ALL GREEN EXCEPT GERMAN DAX)
2/ CHINESE BOURSES / :Hang SENG CLOSED DOWN 231.06 PTS OR 1.40%
/SHANGHAI CLOSED DOWN 9.33 PTS OR 0.31%
AUSTRALIA BOURSE CLOSED DOWN 1.16%
(Nikkei (Japan) CLOSED DOWN 250.42 PTS OR 0.92%
INDIA’S SENSEX IN THE GREEN
Gold very early morning trading: 1636.80
silver:$18.69
USA dollar index early THURSDAY morning: 112.41 DOWN .45 CENT(S) from WEDNESDAY’s close.
The USA/Yuan, CNY: closed ON SHORE (CLOSED ..(UP) AT 7.2164
THE USA/YUAN OFFSHORE: (YUAN CLOSED (UP)…. 7.2166
TURKISH LIRA: 18.59 EXTREMELY DANGEROUS LEVEL/DEATH WISH/HYPERINFLATION TO BEGIN.
the 10 yr Japanese bond yield at +0.247
Your closing 10 yr US bond yield UP 3 IN basis points from WEDNESDAY at 4.159% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic
USA 30 yr bond yield 4.170UP 4 in basis points
Your closing USA dollar index, 112.24 DOWN 65 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 THURSDAY: 12:00 PM
London: CLOSED UP 19.76 PTS OR 0.28%
German Dax : CLOSED UP 18.27 POINTS OR 0.15%
Paris CAC CLOSED UP 40.97PTS OR 0.68%
Spain IBEX CLOSED UP 64.30 OR 0.85%
Italian MIB: CLOSED UP 206.83PTS OR 0.96%
WTI Oil price 83.48 12: EST
Brent Oil: 90.56 12:00 EST
USA /RUSSIAN /// RUBLE RISES TO: 61.31 UP 0 AND 42/100 RUBLES/DOLLAR
GERMAN 10 YR BOND YIELD; +2.3876
CLOSING NUMBERS: 4 PM
Euro vs USA: 0.9779 UP .0015 OR 15 BASIS POINTS
British Pound: 1.1214 UP .0007 or 7 basis pts
BRITISH 10 YR GILT BOND YIELD: 3.974%
USA dollar vs Japanese Yen: 150.206 UP 0.373//YEN DOWN 37 BASIS PTS//AND BREAKS THE 150 YEN/DOLLAR LEVEL
USA dollar vs Canadian dollar: 1.3776 UP 0.0003 (CDN dollar, DOWN 3 basis pts)
West Texas intermediate oil: 85.71
Brent OIL: 92.53
USA 10 yr bond yield UP 11 BASIS pts to 4.237%
USA 30 yr bond yield UP 11 BASIS PTS to 4.231%
USA dollar index:112.81 DOWN .09 CENTS
USA DOLLAR VS TURKISH LIRA: 18.59
USA DOLLAR VS RUSSIA//// ROUBLE: 61.40 UP 0 AND 34/100 ROUBLES
DOW JONES INDUSTRIAL AVERAGE: DOWN 91.01 PTS OR 0.33 %
The day started with more chaos in Blighty with Truss becoming the shortest-ternured Prime Minister in British history (girl-power!).
Gilts and Cable rallied on the news…
Source: Bloomberg
Then US existing home sales puked (as expected) and Leading Economic Indicators really puked more than expected (now back underwater YoY)…
Things were not helped by more hawkish FedSpeak, dissuading investors of the belief in a pivot…
Philly Fed’s Patrick Harker spooked stocks with comments that rates would rise thru 2023 then pause (no pivot):
“Sometime next year, we are going to stop hiking rates,” Harker said.
“At that point, I think we should hold at a restrictive rate for a while to let monetary policy do its work. It will take a while for the higher cost of capital to work its way through the economy.”
…then Fed’s Lisa Cook doubled-down, warning that “risks to inflation are skewed to the upside.”
“Inflation is too high, it must come down and we will keep at it until the job is done,” she said Thursday during opening remarks at a panel discussion with business and community leaders in Spartanburg, South Carolina.
“This likely will require ongoing rate hikes and then keeping policy restrictive for some time.”
“Policy must be based on whether we see inflation actually falling in the data, rather than just in forecasts.”
All of which helped push the market’s terminal rate expectations above 5.00% (in March and May 2023) for the first time this cycle… and also started to see the subsequent rate-cuts being priced out (a pause not a pivot)…
As the 10Y JGB yield topped the BoJ’s 25bps yield cap for over a month…
Source: Bloomberg
The choices before Japanese policy makers are stark:
either relax the yield-curve control framework;
or be willing to let the yen weaken.
Until then, as we have discussed numerous times, further interventions are doomed to failure.
US equity futures chopped around overnight and then ramped into and across the US cash open. But that rally stalled into the European close and then everything tumbled…
As Bloomberg’s Matt Turner noted, the S&P 500 once again on Thursday saw an intraday swing of at least 1% in both directions, the 16th time that’s happened this year. That’s the most for any year since the financial crisis — and 2022 still has another few months to go.
Similar moves have happened on ~8% of all trading days so far this year, the highest percentage since 2008. The post-crisis average is just 1.1%.
Exxon rallied to a new record highs today (bigger than META) and since it was removed from The Dow (and swapped for Salesforce), it has rallied 154% (while CRM is down 27%)…
Source: Bloomberg
Treasuries were clubbed like a baby seal once again (most of the curve up 8-10bps on the day). 30Y Yields are now up over 23bps on the week…
Source: Bloomberg
Since the lows right after the Sept FOMC meeting (9/21), 30Y Yields are up over 75bps…
Source: Bloomberg
Just for some context, the last 11 days have seen 10Y yields up between 5 and 13bps on 8 occasions – literally massive swings (even adjusting for absolute rate levels) pushing MOVE (Bond VIX) to highs not seen since the GFC…
Source: Bloomberg
The dollar ended the day unchanged after a huge dump’n’pump…
Source: Bloomberg
Bitcoin fell back to $19,000 today but found modest support there…
Source: Bloomberg
Oil prices jumped, extending yesterday’s post-Biden gains, on reports that China may lift some of its ZeroCOVID restrictions, but gave a lot of the gains back as stocks started to stumble…
Gold tried but failed to hold earlier gains, with futures tagging $1650 and reversing…
And while Spot Gold prices are testing their lowest levels since April 2020 in USD terms, in JPY terms they have traded sideways (holding their value) as the Japanese currency collapsed in the last few months…
Source: Bloomberg
Finally, just for fun, Bloomberg’s Michael McDonough noted that the volatility of the ‘oldest’ currency still in use (GBP) is now about the same as the volatility of the ‘youngest’ currency…
Source: Bloomberg
“Store of value”?
end
I) / LATE MORNING// TRADING//
AFTERNOON TRADING//
ii) USA DATA/
USA affordability and higher mortgage rates, the reason for the crash in existing home sales
Existing home sales dropped 1.5% MoM in September (better than the 2.1% decline expected, but only because of a major downward revision to August’s 0.4% drop to -0.8% MoM). Existing home sales are now down 23.79% YoY – the worst drop since Nov 2010 (ex COVID lockdowns)…
Source: Bloomberg
This is the eighth straight monthly drop in existing home sales (worst losing streak since 2007), pushing the SAAR down to 4.71mm, the weakest since April 2014 (ex COVID lockdowns)
Source: Bloomberg
And bear in mind these contracts were likely signed before mortgage rates really started to accelerate and hit 7.00%!
“We are not yet at the bottom,” Lawrence Yun, NAR’s chief economist said on a call with reporters.
Yun expects the figures to keep deteriorating given the current data is not reflective of where mortgage rates are now.
“Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory,” Yun said in a statement.
“The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today.”
The median selling price rose 8.4% from a year earlier to $384,800. Even so, that’s the lowest since March.
Sales fell in three of four regions, including a 1.9% drop in the South. The Fort Myers and Tampa regions of Florida saw a marked drop in purchases in the aftermath of Hurricane Ian, Yun said. He described the disruption as temporary.
Properties remained on the market for an average of 19 days, up from 16 days in August.
Mission Accomplished Mr.Powell?
end
5 Signs That The Housing Crash Is Escalating A Lot Faster Than Many Experts Anticipated
The U.S. housing market is absolutely imploding, but nobody should be surprised. In fact, we were warned way ahead of time that this would happen. When the Federal Reserve told us that they would be aggressively raising interest rates, we all knew what this would do to the housing bubble. It was obvious that home prices would fall, home sales would plummet and home builders would get absolutely crushed. Sadly, that is precisely what we are witnessing. But instead of reversing course after witnessing all the damage that they have caused, Fed officials are insisting that even more rate hikes are necessary. So as bad as things are right now, the truth is that they are going to get even worse in the months ahead.
In recent days we have gotten some new data points, and they are sobering.
We haven’t seen numbers like this since 2008, and we all remember what happened back then.
Yes, just about everyone expected that the housing market would slow down, but hardly anyone thought that things would get this bad so soon.
The following are 5 signs that the housing crash is escalating a lot faster than many of the experts had anticipated…
#1 According to Redfin, the number of homes sold in the United States during September dropped by 25 percent…
Home sales declined the most on record in September as mortgage rates surged and pushed prospective buyers out of the once-hot housing market, according to a new report.
A report from the real estate company Redfin shows the number of homes sold fell by 25 percent and new listings dropped by 22 percent last month, marking the biggest declines on record in both categories — excluding numbers at the onset of the coronavirus pandemic in April and May 2020.
#2 The number of new housing starts in the United States fell by 8.1 percent in September…
Home building pulled back in September, as buyers faced spiking mortgage rates that have made homes increasingly unaffordable.
[ZH: Single-family Housing starts are down 18.5% YoY…]
September housing starts, a measure of new home construction, dropped 8.1% from August, and were down 7.7% from a year ago, according to the US Census Bureau. After a big drop earlier this spring, housing starts had been holding relatively steady up until July when rising mortgage rates spurred more prospective buyers to sit on the sidelines.
Traffic of prospective buyers of new single-family houses plunged to the lowest since 2012, excluding the two lockdown months April and May, and is now approaching even the levels of those two lockdown months, according to data today from the National Association of Home Builders.
The NAHB index for traffic of prospective buyers dropped to 25, about where it was in mid-2007, well on the way down into Housing Bust 1.
The overall confidence of builders of single-family houses fell for the 10th month in a row in October, as “rising interest rates, building material bottlenecks, and elevated home prices continue to weaken the housing market,” the NAHB report said.
With today’s index value of 38, the NAHB/Wells Fargo Housing Market Index is now nearly where it had been in May 2020 during the lockdown, and below where it had been in February 2007, on the way down into Housing Bust 1.
#5Demand for mortgages has plummeted to the lowest level that we have seen in 25 years…
Mortgage demand, which has suffered four straight months of declines, fell last week to the lowest level since 1997, as interest rates continued to rise.
Homebuyers’ demand for mortgages dropped 4% for the week and was 38% lower than the same week one year ago, according to the Mortgage Bankers Association. Applications to refinance a home loan fell 7% compared with the previous week, in seasonally adjusted terms. Demand was 86% lower than the same week one year ago.
If you want to thank someone for this giant mess, you can thank the officials at the Federal Reserve.
They knew that raising rates would cause chaos for the housing market, but they did it anyway because they are scared to death of inflation.
But they actually played a major role in causing our inflation crisis. They should have known that pumping trillions of fresh dollars into the financial system over the years would cause rampant inflation, but they just wouldn’t stop.
Now they are trying to fix one crisis by causing another.
And in addition to absolutely crushing the housing market, they are also causing trillions of dollars in losses on Wall Street.
In fact, the financial markets are on pace for their worst year since 1969…
So far in 2022, both the stock and bond markets have posted serious losses. To find another market that looks like this one, you’d have to go all the way back to 1969, according to data from BlackRock.
The S&P 500 is down nearly 24% year-to-date, and the Bloomberg U.S. Aggregate Bond Index has surrendered about 16%. Should both indexes finish the year in the red, it would be the first time that has happened in decades.
If officials at the Fed keep hiking rates, the markets could go down a whole lot more.
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.”
Time will reveal whether Holter is right about this or if he is wrong.
But without a doubt, it certainly wouldn’t take much to push us over the edge.
If officials at the Federal Reserve had any sense, they would stop raising rates immediately.
Unfortunately, they aren’t going to do that.
So much more pain is coming for the housing market, and this new crash could ultimately be even worse than what we experienced back in 2008.
* * *
It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.
END
Philadelphia Fed’s manufacturing gauge remains weak in October
Oct. 20, 2022 at 8:43 a.m. ET
MarketWatch
Fourth negative reading in past five months
The numbers: The Philadelphia Fed said Thursday its gauge of regional business activity inched up to negative 8.7 in October from negative 9.9 in the prior month. Any reading below zero indicates deteriorating conditions.
Economists polled by the Wall Street Journal expected a negative 0.5 reading.
Key details: The headline index is based on a single stand-alone question about business conditions unlike the national ISM manufacturing sector index which is a composite based on components
The barometer on new orders ticked up 2 points to negative 15.9. The shipments index was essentially unchanged at 8.6, its lowest reading since May 2020. The measure on six-month business outlook fell sharply to negative 14.9 from negative 3.9.
Big picture: Manufacturing is struggling with declining orders, thinning order backlogs and right sizing of customer inventories, according to Richard Moody, chief economist at Regions Financial Corp.
A similar survey from New York – the Empire State Index – fell 7.6 points to negative 9.1 in October.
These two regional surveys give economists an advance sense of trends ahead of the national ISM manufacturing activity index that will be released early next month. The ISM factory index fell to 50.9 in September, the lowest level since the spring of 2020.
-END-
III) USA ECONOMIC STORIES
Demand for shipping is cratering in this peak season. Reason: demand is waning as there is just too much inventory
(zerohedge)
Peak Shipping Season A Bust Due To Reversal In ‘Bullwhip-Effect’
WEDNESDAY, OCT 19, 2022 – 06:05 PM
We predicted in May that an inventory glut, i.e., the reverse bullwhip effect, would cool the booming freight market. It’s now peak shipping season — retailers cancel overseas orders as freight companies reduce freight capacity ahead of the busiest shopping season of the year: Black Friday through Christmas.
Trans-Pacific shipping rates are cratering. Since last year’s peak, the Shanghai-Los Angeles freight rate for 40-foot shipping containers has plunged 73%.
Weeks ago, we pointed out that October cancellations for vessels on the world’s busiest shipping lanes (between China and US West Coast) are in a sharp decline. WSJ said the pullback in ordering from overseas has resulted in carriers reducing capacity on “concerns a deeper downturn is coming.”
“The growth in US import volume has run out of steam, especially for cargo from Asia.
“Recent cuts in carrier shipping capacity reflect falling demand for merchandise from well-stocked retailers, even as consumers continue to spend,” said Ben Hackett, founder of Hackett Associates and the author of the Global Port Tracker report issued by the National Retail Federation.
Remember, Morgan Stanley Shipper Survey showed ordering by 100 corporations reached the lowest point in the survey’s 12-year history. Ordering levels are down 40% year over year. Net inventory levels are also unusually high.
Wonder why?
“The NRF report is one of several measures showing shipping volumes slowing sharply from August to September, signaling waning demand rippling through supply chains even as retailers are lining up goods for the traditional sales season,” WSJ said.
An accelerating slowdown in imports means an even more significant decline is ahead, according to Descartes Datamyne, a data analysis supply-chain software company.
Descartes Datamyne’s recent report said September container imports, measured in 20-foot-equivalent units, fell 11% YoY and declined 12.4% from August. A slump in shipping activity is highly unusual for peak shipping season. They said imports of electronics, furniture, and toys for major US retailers from China plunged 18.3% from August to September.
Import slowdown has already led to a decline in rail and trucking traffic:
The slowdown in imports is already hitting rail volumes. Average weekly loads carried in intermodal operations, a combined truck-rail service favored by retailers, fell 4.8% year-over-year in September, according to the Association of American Railroads. The volume was also 5.4% below August levels. –WSJ
FTR Transportation Intelligence published a report Monday that shows Truckstop.com’s spot-market rate for available loads for truckers on the West Coast plunged to the lowest level since May 2020. The report added demand in the Southeast “fell sharply after recent strength.”
Another website that shows trucking spot rates, DAT Solutions LLC, reveals similar downward trends, showing average spot rates for truckload vans dropped from August to September for the first time since 2015.
And remember, in mid-September, FedEx CEO Raj Subramaniam warned about declining worldwide cargo volumes and mounting macroeconomic headwinds that may indicate the global economy is on the brink of a recession.
Freight winter is here thanks to high inventory as consumer behaviors changed from buying computers, televisions, and Pelotons to now spending on services, such as restaurants…
The silver lining is supply chain stress is rapid easing, as explained by Liz Ann Sonders, the chief investment strategist at Charles Schwab:
Goldman Sachs’ Supply Chain Congestion Scale is back to “4,” indicating bottlenecks are easing.
This could be good news that inflation is moderating.
end
Global value retailers have set their sights on the uSA as consumers demand lower prices
(zerohedge)
Global “Value Retailers” Set Sights On The U.S. As Consumers Are Desperate For Lower Prices
THURSDAY, OCT 20, 2022 – 05:45 AM
So it turns out that lower prices lure in shoppers…would could have figured? Certainly we don’t expect economists to…
But one group that definitely does have it figured out are retail chains constantly working to drum up business. Lately, they have been using inflationary pressures to make the point that they can offer goods at lower prices, driving more traffic into their stores.
Names like Primark and H&M are already popular with U.S. consumers because of their low prices. Now, brands like GU – who offers $30 sweaters and $60 coats – are also trying to use inflation to their advantage and drop into the U.S. market, according to the Wall Street Journal.
They are part of a group of retailers that offer “everyday” low prices, instead of making consumers wait for sales. GU Chief Executive Osamu Yunoki told The Journal this week: “This is the perfect time for GU to enter the U.S. because of the value we offer.”
The report notes that low price retailers like Walmart, TJ Maxx and Ross have been consistently winning customers from full priced stores in recent years. Value stores captured 22.4% of U.S. apparel spending in 2021, up from 19.1% in 2014, the report notes.
Retailers are taking notice. Primark, for example, is planning on having 60 U.S. locations by October 2026, up from the 13 it has now. Another value retailer, China’s Shein, is making a push to the U.S. by opening distribution centers in the country.
Some retailers are even rising from the dead to take advantage of the opportunity. For example, the once bankrupt Forever 21 said this week that it is planning on opening up 14 new stores in the U.S. through June 2023.
“When you can get a T-shirt for $5 at Shein, why would I pay $24.99 at Gap?” one consumer commented to WSJ, noting that even though the shirts are of lower quality, they are good enough. “With inflation, price is taking precedence over quality for me right now,” they continued.
Yunoki continued: “Price competition in the U.S. is severe.”
end
Good indicator that the economy is collapsing
(zerohedge)
Cargo Traffic At LA Port Plummets; Trucking Firm Warns Of 2008-Style Slowdown
THURSDAY, OCT 20, 2022 – 12:45 PM
The inventory glut, i.e., the reverse bullwhip effect, is on full display at the nation’s largest containerized port as cargo volumes slump during what is supposed to be the busiest shipping period of the season. There are also reports the trucking industry could suffer the worst decline since 2008 in the first quarter of 2023.
Let’s start by highlighting the inventory glut that we predicted in May has collapsed trans-Pacific shipping container rates as US imports of goods from Asia lose steam. Retailers are canceling overseas orders, forcing freight companies to reduce sails. A lot of this has to do with importers ordering too many items popular during the pandemic, such as televisions, computers, fancy exercise bikes, and other electronics, while consumers abruptly changed their spending habits to services, such as restaurants, earlier this year, leaving retailers with a record amount of inventory.
Gene Seroka, executive director at the Port of Los Angeles, told Bloomberg that cargo volumes declined for a second month in September. He said the outlook for the remainder of the year will be “soft.”
Seroka said the top containerized port in the country handled 709,873 twenty-foot equivalent containers last month, down 22% from the same month a year ago and the lowest amount for September in seven years. He noted volumes are so far down 4% from last year’s record-setting levels.
Inbound containers to both the Port of Los Angeles and the neighboring Port of Long Beach slid 26.6% last month from a year earlier to 343,462 containers — the lowest level since GFC in 2009.
The slowdown is happening at an unusual time because this is considered peak shipping season, as retailers build inventories for the year’s biggest shopping season. But not this year, as the reverse bullwhip effect crushes the freight industry.
Seroka blamed the cargo slowdown on:
“Record high inflation, fuel costs, interest rates and other uncertainties are making Americans cautious, which could impact discretionary spending.
“The upside: consumer hesitancy and abundant retailer inventories could lead to merchandise markdowns ahead of the holiday season.”
New consumer data last week showed retail sales stagnated in September amid elevated inflation. We noted store retailers saw a 2.5% decline month over month — the biggest monthly drop since May 2021…
… and data from Morgan Stanley shows ordering by 100 corporations reached the lowest point in the survey’s 12-year history.
The silver lining is supply chain stress is rapid easing, as explained by Liz Ann Sonders, the chief investment strategist at Charles Schwab:
The slowdown is spreading to the trucking industry. FreightWaves CEO Craig Fuller warned the worst trucking downturn since GFC is ahead.
end
Getting really bad on the Mississippi: barge captain warns about supply chain crisis as water level drops again
(zerohedge)
“It’s Disastrous”: Mississippi Barge Captain Warns About Supply Chain Crisis As Water Levels Drop
THURSDAY, OCT 20, 2022 – 01:25 PM
Drought closed a portion of the Mississippi River earlier this week, as the major waterway has been an absolute nightmare for tugboat captains to navigate.
A stretch of the Mississippi River just northeast of Memphis, near Hickman, Kentucky, was closed on Monday because water levels reached record low levels. This caused a logjam of vessels and barges. And it’s the third time a portion of the river has been shuttered in weeks.
We’ve reported dangerously low water levels have left farmers with a barge shortage as freight rates hyperinflate. Some farmers have piled up beans and other crops as logistical pipelines to transport farm goods from the Heartland by barge to export terminals in the US Gulf Coast are paralyzed due to extraordinary conditions on the Mississippi.
Ag blogDelta Farm Press‘ senior staff writer Ginger Rowsey spoke with barge captain Eric Badeaux who said it usually takes him 1-2 days to move barges from Morris, Illinois, down the Illinois River to the Mississippi River and on to New Orleans. He’s got over four decades of navigating cargo on the waterways and said because of drought and obstacles, it now takes 8-10 days for the same distance.
“We had been on the boat two weeks and had not even made it to Memphis yet,” Badeaux said. At one point, Badeaux and his crew only traveled 60 miles in four days. They typically average 200 miles per day when heading south.
“In one day, we burned 2,367 gallons of diesel fuel, just sitting here fighting the current,” Badeaux said. “That comes out to about $10,000 in fuel for one day, and we barely moved. Multiply the fuel costs for all of the boats just sitting here, plus all the other costs involved in boat maintenance and you can see why transportation costs are through the roof. It’s disastrous.”
On a recent trip, Rowsey said that Badeaux pulled 20 barges of corn, soybeans, and coiled steel down the river, along with ten empty barges. He said the rapidly dropping water levels make the waterway risky to haul more barges. An average tow usually consists of 30-40 full barges.
Badeaux said the river closures have made everything “congested,” and “traffic is moving slowly.” He said today’s river conditions are as bad as in 1988 when severe droughts led to supply chain disruptions.
He said one of the worst places to navigate is around Memphis:
“Memphis to Vicksburg is absolutely the worst part of the river to navigate. It’s flat, shallow, there are hard turns, and the river is swift.”
He spoke about the extreme difficulty experienced captains are having in navigating the waterway:
“The bottom of the river is like a roller coaster,” he said, describing the vastly uneven levels of the riverbed, “and it’s never the same. When the river stays high and then drops out, it deposits sediment in new places and creates sandbars where there wasn’t a sandbar before.”
And warned:
“There are a lot of new hands on the water now who have very little to no experience, and that lack of experience can lead to bad decisions.”
Badeaux’s story of the nation’s most crucial waterway in crisis should be disturbing. About 60% of the country’s grain for export traverses the waterway to terminals in the Gulf. If the flow of farm goods and commodities from the Heartland is disrupted, this could have significant implications for customers who rely heavily on US exports.
end
This is really good for the Republicans as the latest poll shows 90% of voters are worried about inflation and also pessimistic about the economy
(zerohedge)
Latest Polls Show 90% Of Voters Worried About Inflation – Pessimistic About Economy
THURSDAY, OCT 20, 2022 – 03:19 PM
Not the we need polls to tell us the obvious, but the vast majority of Americans (over 90%) now rate inflation and the economic decline as their top worry going into the November mid-term elections. This comes from the latest the latest POLITICO/Morning Consult poll, which traditionally tends to spin topics to the hard left, making the results all the more staggering.
The poll also indicates that 10% more voters prefer Republicans to handle inflationary concerns instead of Democrats. This may explain why leftists have started to back away from cultural topics in their campaign platforms, or are seeking to artificially tie culture war issues to economic issues. The outcome of multiple polls leaning towards widespread economic fears among the public suggest an impending red sweep in November, and Democrats are clearly worried.
When it comes to voting this November, more than 80 percent of respondents said that the economy would play a major role in deciding who to vote for. Only 4 percent said it would play no role at all. Three out of every four Democrats and almost 90 percent of Republicans said it would be a major factor in their decision making.
Economic disaster, open borders, rising crime rates and rising poverty are now linked inexorably to the Biden Administration, and thus linked to Democrats as a whole. In terms of inflation, Joe Biden has sought to mitigate the visibility of the crisis in the limited ways available to him, including his attempt to reduce gas prices by putting pressure on Saudi Arabia to increase oil output and his steady release of supply from the strategic reserves. These measures have proven to be futile, with gas prices at the pump still around double the amount they were when Biden entered the White House.
Food prices and rent in particular continue to climb and these are the areas in which voters are hit hardest. In the meantime, Democrats continue to push issues like climate change, abortion and “trans rights” which few Americans actually care about over their own pocketbooks.
The Politico poll also focused on what Americans believed was the cause of inflated prices. Three-quarters of respondents said corporations price gouging, raising prices to unreasonable levels to turn a profit, was responsible for the current high inflation rate. Forty-four percent said corporations were very responsible. The blame was found in a majority of voters across generations, gender, race and party affiliation.
This suggests that the majority of the public does not actually understand the economic situation and the true causes of the current problem, though it is likely that Politico never mentioned government spending or Federal Reserve fiat printing in their polling questions. If Americans actually believe that corporate “price gouging” is the real trigger behind the inflationary bubble, then the country is in real trouble when it comes to engaging people with solutions. One cannot recognize the solution to a crisis without knowing the causes of the crisis.
Overall, polls indicate that Americans are fed up with the current trends set by Democrats and they are looking for an aggressive change. However, the public remains uneducated on the root mechanisms associated with US decline, including the banking apparatus that engineered the crash in the first place.
END
WARNING FOR OUR CHILDREN:
Police Issue Warning Ahead Of Halloween After Fentanyl Pills Found In Candy Bags At LAX
Authorities in California have issued a warning to parents ahead of Halloween celebrations after approximately 12,000 fentanyl pills packaged in several popular candy boxes were seized at Los Angeles International Airport.
“With Halloween approaching, parents need to make sure they are checking their kids’ candy and not allowing them to eat anything until it has been inspected by them,” the Los Angeles County Sheriff’s Department said in a press release.
“If you find anything in candy boxes that you believe might be narcotics, do not touch it and immediately notify your local law enforcement agency,” the agency added.
The giant seizure of the deadly synthetic opioid happened on Oct. 19 after narcotic detectives and agents with the Drug Enforcement Agency (DEA) stopped a suspect who was attempting to pass the airport’s security screening with several bags of candy and miscellaneous snacks.
Upon investigating the packages, authorities “discovered that inside the ‘Sweetarts,’ ‘Skittles,’ and ‘Whoppers’ candy boxes were fentanyl pills,” the release said.
The suspected drug trafficker managed to flee the scene before being detained by law enforcement, officials said, noting that the suspect has been identified and the investigation is ongoing.
Anyone with additional information about the incident is asked to contact the Los Angeles Sheriff’s Department’s narcotics bureau at (562) 946-7125.
Narcotic detectives seized about 12,000 suspected fentanyl pills that were packaged in bags of candy at Los Angeles International Airport in California on Oct. 19, 2022. (Courtesy of Los Angeles County Sheriff’s Department)
Fentanyl Deaths on the Rise
Fentanyl is a potent synthetic opioid that is 50 times stronger than heroin and 100 times more potent than morphine. As little as two milligrams is potentially enough to be lethal.
An increasing number of Mexican cartels have been importing fentanyl from China before pressing it into pills or mixing it into other counterfeit pills made to look like Xanax, Adderall, or oxycodone. The drugs are then sold to unaware buyers in the United States.
The trend of high inflation rates over the past few months looks all set to continue through October, according to a recent estimate by the Federal Reserve Bank of Cleveland.
October’s Consumer Price Index (CPI), a measure of inflation, is predicted to be up by more than 0.8 percent from September, the Fed’s “Nowcast” inflation forecast shows. Core CPI, which excludes food and energy, is expected to be up by 0.54 percent. The Fed projects annual CPI to be at 8.14 percent in October, with core CPI at 6.58 percent.
Data from the U.S. Bureau of Labor Statistics show that annual CPI has remained above 7.5 percent for every single month this year. It peaked at 9.1 percent in June, and was at 8.2 percent in September.
The continuous high inflation rate under the Biden administration is eroding people’s incomes. According to a report by the Federal Reserve Bank of Dallas, 53.4 percent of American workers had their inflation-adjusted real wages decline between second quarter 2021 and second quarter 2022.
“For the 53.4 percent of such workers in second quarter 2022, the median decline (that is, half of the declines were larger and half smaller) in real wage growth was 8.6 percent,” the report said.
Meanwhile, the 12-month Producer Price Index (PPI), a measure of annual wholesale inflation, jumped 8.5 percent in September. Experts are worried about elevated PPI keeping consumer prices up.
“September’s larger-than-expected rise in producer prices adds to concerns that inflation has become more entrenched, even as certain commodity prices decline and supply shocks ease,” economist Eliza Winger said, according to Bloomberg.
Fed Action, Election Issue
The Federal Reserve has implemented five consecutive rate hikes, including three hikes of 0.75 percentage points. However, inflation continues to remain high.
Federal Reserve Chair Jerome Powell has said that the central bank intends to bring inflation down to its target rate of 2 percent, and will keep raising interest rates until it happens. But as interest rates keep rising, consumer spending can take a hit, which sours the prospect for economic growth.
Ahead of the November midterms, Sen. Roger Marshall (R-Kan.) has slammed the Biden administration for its failure to control inflation.
“Kansans and all Americans are currently paying 13.5 percent more since … Joe Biden took office. In turn, we see lower wages, savings accounts being drained, and the cost of living more expensive across the board,” he said in a statement.
“The American people can no longer afford the financial anxiety and failing economic agenda of Joe Biden. To truly put an end to this crisis, we must put an end to Democrats’ reign in Washington, D.C.”
Bonds tumbled on Wednesday, thwarting the Weird Wednesday manipulation to squeeze expiring October call options – and the huge ESZ rally that appeared after Netflix’s boffo Q3 results.
The decline in USZs commenced as soon as Asia opened on Wednesday. The decline was modest and lethargic until it gained momentum during late Asian trading. After China closed at 2:00 ET, the decline accelerated. The decline stalled when Europe opened at 3 ET. After two modest rally attempts, USZs headed south again when the US repo market opened at 7 ET.
USZs hit a bottom of 121 26/32 at 12:08 ET, fifty-two minutes before the results of the 20-year auction ($12B) were to be announced. One minute before the auction announcements, someone juiced USZs to 122 13/32. Alas, the auction was soft (4.395% vs 4.37% WI), USZs sank to a new low of 121 25/32.
ESZs, which traded sharply higher during Asian trading on Netflix, commenced a decline at 1:00 ET that persisted, despite the usual rally after a lower NYSE open, until they hit a daily low of 3675.75, -97.50 from the high, at 13:04 ET. It was time for the rally into Biden’s speech on gasoline prices.
Biden risibly stated, “We need to responsibly increase American oil production without delaying or deferring our transition to clean energy…my administration has not stopped or slowed US oil production.” Joe commanded oil companies to halt share buybacks and increase production because a “war is raging.” We missed Congress’s war declaration! https://twitter.com/townhallcom/status/1582787411251433472
While The Big Guy issued his latest scheme to lower energy costs, WTI Oil and gasoline were up sharply. Joe said the US would replenish the SPR when oil falls to around $70. It was $86 as he spoke.
@RNCResearch: BIDEN: “By selling from the [oil reserve] at the higher price of $90 earlier this year and then re-filling it in the future at a lower price around $70 will actually make money.”… https://twitter.com/RNCResearch/status/1582788227869847552
@RealMacReport: Reporter: “What is your response to Republicans who say you are only doing this SPR release to help Democrats in the midterms?” Joe Biden: “Releasing more oil from the Strategic Petroleum Reserve is not politically motivated at all.” https://twitter.com/RealMacReport/status/1582791708122976257
@townhallcom: DOOCY: “What makes you think that [oil firms] are going to listen to an administration that is…trying to put them out of business?” “How is the administration trying to put them out of business?” “They produce fossil fuels. This president says he wants to end fossil fuels.” https://twitter.com/townhallcom/status/1582807106238894080
@townhallcom: KJP is asked why Democrats blocked Trump from refilling the Strategic Petroleum Reserve when they’re looking to do so now at more than double the price: “It was a different time then. It was not the same situation that we are currently in.” https://twitter.com/townhallcom/status/1582804117977980928
The ESZ rally stalled at 13:26 ET; they traded sideways until the rally to rig the VIX Fix expiration began at 13:55 ET. ESZs rallied 30 handles by 14:19 ET. ESZs and stocks then retreated until the last-hour manipulation commenced. An 18-handle ESZ rally ended at 15:17 ET. ESZs and stocks then gently rolled over until a final manipulation appeared minutes before the NYSE close, of course.
The yen/$ hit 149.90 at 15:30 ET. USZs hit their daily low of 121 24/32 at the same time.
Part of the late ESZ rally on Weird Wednesday was due to traders expecting Tesla to report good results. Alas, Tesla reported Adj EPS of 1.05 (1.01 expected) but revenue was $21.45B ($22.09B expected), and its gross margin fell to 27.9% from 28.4%. Tesla sank as much as 6% in after-hour trading.
Positive aspects of previous session ESZs rallied sharply during Asian trading on Netflix’s results
Negative aspects of previous session Stocks and bonds sank WTI oil and gasoline rallied sharply despite Biden’s latest scheme to lower gasoline prices
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:Up; Last Hour: Up
Pivot Point for S&P 500 Index [above/below indicates daily trend to traders]: 3696.75 Previous session High/Low: 3728.58; 3666.51
UK Treasury to Transfer £11 Billion to BOE to Cover QE Losses The transfer is a key milestone for QE’s journey from government cash cow to liability. The BOE began buying bonds in 2009 and has transferred around £120 billion in profits from the scheme to the Treasury so far. The sharp rise in interest rates and the steep fall in gilt prices ahead of the BOE’s planned sales have now reversed the flows for the first time… https://finance.yahoo.com/news/uk-treasury-transfer-11-billion-154534557.html
Ex-Thatcher aide @NileGardiner: We are witnessing in the (UK) Conservative Party a Shakespearean tragedy, the result of a loss of nerve in No. 10, coupled with a nefarious attempt by Tory wets to carry out a coup. A Govt with a 70+ majority is collapsing, emboldening the Left. Lady Thatcher would have been appalled.
WaPo: American technology boosts China’s hypersonic missile program Military research groups at the leading edge of China’s hypersonics and missile programs — many on a U.S. export blacklist — are purchasing a range of specialized American technology, including products developed by firms that have received millions of dollars in grants and contracts from the Pentagon, a Washington Post investigation has found. The advanced software products are acquired by these military organizations through private Chinese firms that sell them on despite U.S. export controls designed to prevent sales or resales to foreign entities deemed a threat to U.S. national security, the investigation shows… Some of the U.S. firms whose products are reaching Chinese military research groups have been the beneficiaries of Defense Department grants to spur cutting-edge innovation, according to a federal program database, creating the specter of the Pentagon subsidizing Chinese military advances… The Washington Post mapped more than 300 sales since 2019 of U.S.-origin technology to dozens of entities involved in China’s hypersonics or missile programs…The Post identified almost 50 U.S. firms whose products were sold through intermediaries since 2019 to Chinese military groups that work on missile technology… https://www.washingtonpost.com/national-security/2022/10/17/china-hypersonic-missiles-american-technology/?s=02
The CDC is Quietly Holding a Vote on Annual Covid Shots for Children — And There is a Lot at Stake for Big Pharma – the real agenda at play here is to ensure Big Pharma can never be sued over the Covid shots… https://t.co/sOHNnQi7r7
@SKMorefield: Johns Hopkins’ Dr. Marty Makary blasts the CDC’s plan to add the Covid vaccine to the childhood vaccine schedule: “… the first to be added with no clinical data … We are basically told ‘stop asking questions’ … What are they hiding? Why can’t we see this information?”https://t.co/yWtAxI64Ch
The CDC voted 15-0 to add Covid-19 vaccines to the federal childhood immunization schedule.
Today – We warned that the action on Tuesday implied that the peak intensity of the expiry manipulation might have occurred on Monday-Tuesday. The tumbling yen and other factors weighed on bonds yesterday. The sharp decline in USZs weighed on ESZs and stocks. Astute traders will focus on the yen today. The known world expects the BoJ to intervene if the yen/$ breached 150 – and the intervention would force the BoJ to sell US bonds. Trading bonds will be a very dangerous endeavor today.
ESZs are -8.00 at 20:30 ET on Tesla. USZs are -4/32, the 2-yr is 4.56%, and the Yen/$ is 149.88.
Expected economic data: Oct Phil Fed Business Outlook -5.0; Initial Jobless Claims 230k, Continuing Claims 1.38m; Sept Existing Home Sales 4.69m; Sept LEI -0.3%; Phil Fed Pres Harker 12:00 ET, Fed Gov Jefferson 13:30 ET, Fed Gov Cook 13:45 ET, Fed Gov Bowman 14:05 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 is positive; MACD is negative – a close below 343.11 triggers a sell signal
White House desperate to prevent Biden-Putin face-off at G20 summit: reporthttps://t.co/DewG2yovft
Jill Biden lashed out at WH staffers for not stopping Joe’s solo presser: report First lady Jill Biden tore into White House staffers after they failed to cut off President Biden’s second solo press conference in January — when her husband kept taking questions even as then-press secretary Jen Psaki signaled to the president to wrap it up… Following the presser, which went on for about two hours, Jill Biden popped into a meeting of top White House officials who were rehashing the president’s performance, the New York Times reported… “She pointedly asked the group, which included the president, why nobody stepped in to stop it, according to a person who was in the room,” the outlet said. “Where was the person, she demanded, who was supposed to end the news conference?”… The Times report, describing how the first lady has become a favored surrogate for the president ahead of the midterm elections, noted that she has been protective of her husband and even took part in hiring White House staffers and press aides, including vetting Psaki alongside the president… https://nypost.com/2022/10/17/jill-biden-ripped-wh-staffers-for-not-stopping-joes-solo-presser/
Biden, White House now ‘sour’ on media coverage, NBC blog reports (Not a parody!) President Biden has avoided sit-down interviews with the press NBC News’ Mike Memoli… wrote, “President Joe Biden’s press team has made no secret of their frustration with the way their boss is covered. And of late, the president is venting that frustration himself.”…Memoli added, “Day by day, Biden has come to share that view of some of his closest advisers, that the press corps simply just doesn’t ‘get’ him and won’t give him a fair shake… https://www.foxnews.com/media/biden-white-house-now-sour-media-coverage-nbc-blog-reports
The regime media has coddled and enabled Biden for almost 50 years. Even today they avoid topics and issues that could harm him. Yet, he desires total media obeisance.
@RNCResearch: “What are some parts of the [so-called] ‘Inflation Reduction Act’…that you are most excited about?” KAMALA HARRIS: “I have a particular fondness, I must tell you, for electric school buses. I love electric school buses!” https://twitter.com/RNCResearch/status/1582753116201492481
White House is pushing ahead research to cool Earth by reflecting back sunlight (Not a parody!) The White House is coordinating a 5-year research plan to study ways of modifying the amount of sunlight that reaches the earth to temper the effects of global warming… https://t.co/sFWL1FJH5c
@RNCResearch: Stacey Abrams (Dem candidate for GA Gov) says unrestricted abortion-on-demand can help solve inflation: “Having children is why you’re worried about your price for gas. It’s why you’re concerned about how much food costs.”https://twitter.com/RNCResearch/status/1582732598291288065
@RNCResearch: “In Georgia, the president’s endorsed candidate for governor, Stacey Abrams, is suggesting that one way to mitigate the effects of inflation is to get an abortion. Does Pres. Biden agree?” Karine Jean-Pierre: “I’m not going to comment on that.” https://twitter.com/RNCResearch/status/1582807837503156224
@julie_kelly2: Bill Barr is responsible for every Russiagate perp getting away with it. He waited until Oct 2020 to name Durham special counsel. A travesty of justice that accelerated Jan 6…
@ggreenwald: Here’s Liz Cheney, in a chat at Harvard, giggling as she reflects on the close and surprising friendship she’s formed with an election denier — @RepRaskin, who wrote an entire book on how George Bush and her dad stole the 2000 election. All in good fun, apparently. https://twitter.com/ggreenwald/status/1582535212856397825
‘The View’ host Joy Behar finds voters’ focus on economy ‘sad and depressing’ Behar argues people don’t know ‘what the stakes are’ ahead of the midterm elections https://t.co/bPMjVeS1WA
@laureldugg: TX AG @KenPaxtonTX called for prosecution & updates to the state penal code in response to a sexually explicit drag performance in front of a child… A drag performer sang sexually explicit lyrics, simulated a sex act and flashed underwear in front of children at an “all ages” event Saturday in Plano, Texas… https://t.co/s5EgNMbdwI
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