Thursday, November 09, 2017 10:53:23 PM
Classical Gas Data
MMgys
Nov 9/GOLD WITHSTANDS ANOTHER ATTACK FROM THE BANKERS AS IT RISES BY $3.25/SILVER HOWEVER DOWN 11 CENTS/NIKKEI SWOONS 800 POINTS BEFORE BEING RESCUED BY THEIR PPT/SAUDI ARABIA, KUWAIT AND UAE ALL THEIR CITIZENS TO LEAVE LEBANON IMMEDIATELY AS WAR SEEMS IMMINENT/
November 9, 2017 · by harvey organ · in Uncat
GOLD: $1287.00 UP $3.25
Silver: $17.00 DOWN 11 cents
Closing access prices:
Gold $1285.50
silver: $16.99
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1289.93 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1281.60
PREMIUM FIRST FIX: $8.33(premiums getting LARGER AGAIN)
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SECOND SHANGHAI GOLD FIX: $1293.60
NY GOLD PRICE AT THE EXACT SAME TIME: $1283.70
Premium of Shanghai 2nd fix/NY:$9.90 PREMIUMS GETTING LARGER AGAIN)
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LONDON FIRST GOLD FIX: 5:30 am est $1284.40
NY PRICING AT THE EXACT SAME TIME: $1283.95
LONDON SECOND GOLD FIX 10 AM: $1284.80
NY PRICING AT THE EXACT SAME TIME. 1284.60
For comex gold:
NOVEMBER/
NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 2 NOTICE(S) FOR 200 OZ.
TOTAL NOTICES SO FAR: 975 FOR 97,500 OZ (3.032TONNES)
For silver:
NOVEMBER
5 NOTICE(S) FILED TODAY FOR
25,000 OZ/
Total number of notices filed so far this month: 869 for 4,345,000 oz
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Bitcoin: BID $7119 OFFER /$7149 DOWN $328.00 (MORNING)
BITCOIN CLOSING; BID $7192 OFFER: 7217 // DOWN $265.00
end
Let us have a look at the data for today
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In silver, the total open interest FELL BY A CONSIDERABLE 1386 contracts from 208,500 DOWN TO 201,944 DESPITE YESTERDAY’S TRADING IN WHICH SILVER ROSE BY A RATHER LARGE 16 CENTS. THIS TIME WE HAD OVER 1000 EFP’S ISSUED BY OUR BANKERS IN SILVER FOR DECEMBER DUE TO THEIR “EMERGENCY SITUATION” WHERE THEY DO NOT HAVE ENOUGH METAL TO SERVE UPON OUR LONGS. OUR LONGS AT THE COMEX RECEIVE A FIAT BONUS PLUS A DELIVERABLE PRODUCT AT A DIFFERENT EXCHANGE AND THAT NO DOUBT IS LONDON. THIS IS THE EARLIEST THAT I HAVE SEEN THAT EFP’S HAVE BEEN ISSUED FOR AN UPCOMING DELIVERY MONTH. GENERALLY IT IS GOLD THAT IS THE MEGA RECIPIENT OF EFP’S WITH SILVER MUCH SMALLER. SO NO DOUBT WE WILL SEE HUGE AMOUNTS OF EFP’S ISSUED WITHIN A WEEK OF FIRST DAY NOTICE.
RESULT: A GOOD SIZED DROP IN OI COMEX DESPITE THE CONSIDERABLE 16 CENT PRICE RISE. COMEX LONGS EXITED OUT OF THE COMEX WITH OVER 1000 EFP’S ISSUED FOR A DELIVERABLE CONTRACT OVER IN LONDON WITH A FIAT BONUS.
In ounces, the OI is still represented by just OVER 1 BILLION oz i.e. 1.009 BILLION TO BE EXACT or 144% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT OCT MONTH/ THEY FILED: 5 NOTICE(S) FOR 25,000 OZ OF SILVER
In gold, the open interest FELL BY A TINY 453 CONTRACTS DESPITE THE GOOD SIZED RISE IN PRICE OF GOLD ($8.35) WITH YESTERDAY’S TRADING . WE MAY HAVE HAD SOME MINOR BANKER SHORT COVERING IN GOLD. The new OI for the gold complex rests at 536,390. NEWBIE LONGS RE-ENTERED THE ARENA TO WHICH THE BANKERS DUTIFULLY SUPPLIED THE NECESSARY SHORT PAPER..OUR BANKERS WERE MAY HAVE BEEN SUCCESSFUL IN COVERING A TINY PORTION OF THEIR GOLD SHORTS.
NO EFP’S WERE ISSUED FOR THE DECEMB CONTRACT MONTH.
Result: A TINY SIZED DECREASE IN OI DESPITE THE RISE IN PRICE IN GOLD ($8.35). WE MAY HAVE HAD SOME BANK SHORT COVERING. WE CERTAINLY HAD NEWBIE LONGS RE-ENTERING THE GOLD COMEX AREA TO WHICH OUR BANKERS REGRETFULLY SUPPLIED THE NECESSARY SHORT PAPER.
we had: 2 notice(s) filed upon for 200 oz of gold.
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With respect to our two criminal funds, the GLD and the SLV:
GLD:
No changes in gold inventory at the GLD/
Inventory rests tonight: 843.09 tonnes.
SLV
TODAY WE HAD NO CHANGE IN SILVER INVENTORY AT THE SLV
INVENTORY RESTS AT 318.074 MILLION OZ
end
.
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver FELL BY A LARGE 1386 contracts from 208,500 DOWN TO 201,944 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE CONSIDERABLE RISE IN SILVER PRICE (A GAIN OF 16 CENTS). OUR BANKERS USED THEIR EMERGENCY PROCEDURE OF OVER 1000 EFP’S FOR DECEMBER WHICH GIVES OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. THIS IS QUITE EARLY FOR THESE EFP ISSUANCE..USUALLY WE WITNESS THIS ONE WEEK PRIOR TO FIRST DAY NOTICE AND THIS CONTINUES RIGHT UP UNTIL FDN.
RESULT: A GOOD SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 16 CENT FALL IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). OUR BANKER FRIENDS ISSED OVER 1000 EFP’S WHICH GIVES COMEX LONG HOLDERS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.
(report Harvey)
.
2.a) The Shanghai and London gold fix report
(Harvey)
2 b) Gold/silver trading overnight Europe, Goldcore
(Mark O’Byrne/zerohedge
and in NY: Bloomberg
3. ASIAN AFFAIRS
i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 12.34 points or .36% /Hang Sang CLOSED UP 228.97 pts or 0.78% / The Nikkei closed DOWN 45.11 POINTS OR 0.20%/Australia’s all ordinaires CLOSED UP 0.55%/Chinese yuan (ONSHORE) closed DOWN at 6.6380/Oil DOWN to 56.88 dollars per barrel for WTI and 63.48 for Brent. Stocks in Europe OPENED RED . ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6380. OFFSHORE YUAN CLOSED WEAKER TO THE ONSHORE YUAN AT 6.6447 //ONSHORE YUAN WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO THE DOLLAR/. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS VERY HAPPY TODAY
3a)THAILAND/SOUTH KOREA/NORTH KOREA
i)North Korea//South Korea
b) REPORT ON JAPAN
Something snapped last night in Japan that saw a violent stock plunge only to be rescued by their plunge protection team
( zerohedge)
c) REPORT ON CHINA
4. EUROPEAN AFFAIRS
This may turn out to be very problematic for Draghi as there will not be enough Italian bonds for the ECB to purchase around their election time
( zerohedge)
ii)England/EU
Brexit talks going nowhere:
(courtesy zerohedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
i)A huge paper from Meijer on the situation inside Saudi Arabia and how its finances are bleeding faster than a speeding bullet. He outlines how Saudi Arabia is joining forces with the UAE with the help of Israel and the USA in the hope of replenishing its finances
a must read..
(courtesy Raul Meijer)
ii)As Israel and Saudi Arabia target Lebanon, here is a great commentary on the strength of Hezbollah’s military capabilities
( zerohedge)
iii)This should give you enough information that an attack on Lebanon from Saudi Arabia and Israel: Saudi Arabia outlaws travel to Lebanon effective immediately
iii b) one hour later: Kuwait also outlaws travel to Lebanon
( zerohedge)
iv)There are reports from Saudi Arabia that the Saudi King Salman will relinquish the throne to his son MBS
(courtesy zerohedge)
6 .GLOBAL ISSUES
7. OIL ISSUES
Satellite images reveal that the Saudis are storing much more oil than they claim
( zerohedge)
8. EMERGING MARKET
VENEZUELA
VENEZUELA is now 24 hours away from a formal default and that is when credit default swaps kick in and the underwriters will have to pay out huge sums. Also the guy handling the restructuring of the bonds is sanctioned by the USA and nobody is allowed to go near this guy. Next week should be lot of fun.
( zerohedge)
9. PHYSICAL MARKETS
i)Ethical behaviour by the Fed?
( Harrison/GATA)
ii)Will the rising trend for base metals and oil have a spill over effect for silver?
( Craig Hemke/TFMetals Report/Sprott)
iii)Dave Kranzler is spotting that something is different with respect to gold and silver trading
( Dave Kranzler/IRD/GATA)
10. USA stories which will influence the price of gold/silver
i)Early trading in the uSA as tax cut hopes fade:
( zerohedge)
ib)The markets tanked on news that the Senate tax plan is to delay the corporate tax cut until 2019
( zerohedge)
ii)Trump who is now in Beijing slams China for unfair trade despite praising XI. He blames China’s predecessors.
( zerohedge)
iii)The Republican tax plan will absolutely crush the housing market in sectors like San Francisco, San Jose, Seattle, NY and other major centres
( zerohedge)
iv)Now Federal prosecutors are leaning on estranged son in law of Paul Manafort to turn on him( zerohedge)
Let us head over to the comex:
The total gold comex open interest SURPRISINGLY ROSE BY A LESS THAN EXPECTED 2234 CONTRACTS UP to an OI level of 537,077 WITH THE GOOD SIZED RISE IN THE PRICE OF GOLD ($8.35 RISE IN YESTERDAY’S TRADING). SOME NEWBIE LONGS AGAIN ENTERED THE GOLD ARENA WITH THE BANKERS REGRETTABLY SUPPLYING THE NECESSARY PAPER AS THEY COVERED ZERO AMOUNT OF THEIR HUGE SHORTFALL.
NO EFP’S WERE ISSUED FOR DECEMBER IN GOLD YESTERDAY.
Result: a SURPRISE TINY DECREASE IN OPEN INTEREST DESPITE THE CONSIDERABLE RISE IN THE PRICE OF GOLD ($8.35.) WE MAY HAVE HAD A SMALL AMOUNT OF BANKER SHORT COVERING. NEWBIE LONGS AGAIN ENTERED THE GOLD ARENA EMBOLDENED DUE TO GLOBAL TENSIONS ESPECIALLY IN SAUDI ARABIA. OUR BANKER FRIENDS REGRETTABLY HAD TO SUPPLY THE NECESSARY SHORT PAPER AS THEY WERE TOTALLY UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY GOLD SHORTS.
.
We have now entered the NON active contract month of NOVEMBER.HERE WE HAD A LOSS OF 7 CONTRACT(S) DOWN TO 84. We had 7 notices filed YESTERDAY so gained 0 contracts or NIL additional oz will stand for delivery in this non active month of November. TO SEE BOTH GOLD AND SILVER RISE IN AMOUNT STANDING (QUEUE JUMPING) IS A GOOD INDICATOR OF PHYSICAL SHORTNESS FOR BOTH OF OUR PRECIOUS METALS.
The very big active December contract month saw it’s OI LOSE 8,599 contracts DOWN to 336,924. January saw its open interest rise by 35 contracts up to 624. FEBRUARY saw a gain of 5672 contacts up to 131,069.
.
We had 2 notice(s) filed upon today for 200 oz
VOLUME FOR TODAY (PRELIMINARY) 199.247
CONFIRMED VOLUME YESTERDAY: 392,938
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And now for the wild silver comex results. Total silver OI FELL BY a CONSIDERABLE 1386 CONTRACTS FROM 208,500 DOWN TO 201,944 WITH YESTERDAY’S 16 CENT GAIN IN PRICE. WE HAD OVER 1000 EFP’S ISSUED FOR DECEMBER BY OUR BANKERS TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. THIS IS QUITE EARLY FOR THE ISSUANCE. USUALLY WE WITNESS THIS EVENT ONE WEEK PRIOR TO FIRST DAY NOTICE AND IT CONTINUES RIGHT UP TO FDN. IT SURE LOOKS LIKE THE COMEX HAS NO SILVER TO GIVE OUR LONGS AS THEY MUST TRANSFER THE OBLIGATION OVER TO LONDON.
The new front month of November saw its OI GAIN by 4 contracts and thus it stands at 7. We had 1 notice(s) served YESTERDAY so we gained 5 contracts or an additional 25,000 oz will stand in this non active month of November. After November we have the big active delivery month of December and here the OI FALL by 2,715 contracts DOWN to 128,489. January saw A GAIN OF 84 contracts RISING TO 829.
We had 5 notice(s) filed for 25,000 oz for the OCT. 2017 contract
INITIAL standings for NOVEMBER
Nov 9/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
49,312.120
oz
JPMORGAN
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz
nil oz
No of oz served (contracts) today
2 notice(s)
200 OZ
No of oz to be served (notices)
75 contracts
(7500 oz)
Total monthly oz gold served (contracts) so far this month
975 notices
97500 oz
3.032 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
Today we HAD 0 kilobar transaction(s)/
WE HAD nil DEALER DEPOSIT:
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 0 customer deposit(s):
total customer deposits nil oz
We had 1 customer withdrawal(s)
i) out of JPMorgan: 49,312.120 OZ
total customer withdrawals; 49,312.120 oz
we had 2 adjustment(s)
i) Out of Brinks: 9,772.805 oz was removed from the dealer and this landed into the customer account of Brinks
ii) Out of JPMorgan: 16,735.244 oz was removed from the dealer and this landed into the customer accoun tof JPMorgan.
For NOVEMBER:
Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 2 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.
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To calculate the INITIAL total number of gold ounces standing for the NOVEMBER. contract month, we take the total number of notices filed so far for the month (975) x 100 oz or 97500 oz, to which we add the difference between the open interest for the front month of NOV. (77 contracts) minus the number of notices served upon today (2 x 100 oz per contract equals 105,000 oz, the number of ounces standing in this NON active month of NOV
Thus the INITIAL standings for gold for the NOVEMBER contract month:
No of notices served (975) x 100 oz or ounces + {(77)OI for the front month minus the number of notices served upon today (2) x 100 oz which equals 105,000 oz standing in this active delivery month of NOVEMBER (3.265 tonnes)
WE GAINED 0 ADDITIONAL CONTRACTS OR NIL OZ OF ADDITIONAL GOLD STANDING FOR METAL AT THE COMEX
THIS IS THE FIRST TIME EVER THAT WE HAVE WITNESSED CONSIDERABLE QUEUE JUMPING IN GOLD AT THE COMEX. SILVER’S QUEUE JUMPING STARTED IN MAY 2017 AND HAS NOT LET UP ONCE COMMENCED.
.
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Total dealer inventory 527,069.052 or 16.394 tonnes (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,722,165.167 or 271.29 tonnes
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process and are being used in the raiding of gold!
The gold comex is an absolute fraud. The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction. This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
IN THE LAST 14 MONTHS 84 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE NOVEMBER DELIVERY MONTH
NOVEMBER INITIAL standings
Nov 9/ 2017
Silver Ounces
Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory
12,973.634 oz
Delaware
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
204,983.25
Scotia
oz
No of oz served today (contracts)
5 CONTRACT(S)
(25,000,OZ)
No of oz to be served (notices)
2 contract
(10,000 oz)
Total monthly oz silver served (contracts) 869 contracts
(4,345,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month NIL oz
Total accumulative withdrawal of silver from the Customer inventory this month xx oz
today, we had 0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 1 customer withdrawal(s):
i) Out of Delaware: 12,973.634 oz
TOTAL CUSTOMER WITHDRAWAL 12,973.634 oz
We had 1 Customer deposit(s):
i) Into Scotia:
204,983.25 oz
***deposits into JPMorgan have stopped again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: 204,983.25 oz
we had 0 adjustment(s)
The total number of notices filed today for the NOVEMBER. contract month is represented by 5 contracts FOR 25,000 oz. To calculate the number of silver ounces that will stand for delivery in NOVEMBER., we take the total number of notices filed for the month so far at 869 x 5,000 oz = 4,345,0000 oz to which we add the difference between the open interest for the front month of NOV. (7) and the number of notices served upon today (5 x 5000 oz) equals the number of ounces standing.
.
Thus the INITIAL standings for silver for the NOVEMBER contract month: 869 (notices served so far)x 5000 oz + OI for front month of NOVEMBER(7) -number of notices served upon today (5)x 5000 oz equals 4,355,000 oz of silver standing for the NOVEMBER contract month. This is EXCELLENT for this NON active delivery month of November.
We gained 5 contracts or an additional 25,000 oz will stand for metal in the non active delivery month of November.
AS I MENTIONED ABOVE, WE HAVE BEEN WITNESSING QUEUE JUMPING IN SILVER FROM MAY 1 2017 ONWARD. IT IS NOW COMFORTING TO SEE CONSIDERABLE QUEUE JUMPING OCCURRING CONTINUALLY IN GOLD FOR THE FIRST TIME SINCE RECORDED TIME AT THE GOLD COMEX!!(1974). QUEUE JUMPING CAN ONLY OCCUR ON PHYSICAL METAL SHORTAGE.
ESTIMATED VOLUME FOR TODAY: NOT AVAILABLE
CONFIRMED VOLUME FOR YESTERDAY: 44,452 CONTRACTS
YESTERDAY’S CONFIRMED VOLUME OF 100,733 CONTRACTS EQUATES TO 503 MILLION OZ OR 71.9% OF ANNUAL GLOBAL PRODUCTION OF SILVER
Total dealer silver: 43.218 million
Total number of dealer and customer silver: 229.957 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end
NPV for Sprott and Central Fund of Canada
1. Central Fund of Canada: traded at Negative 2.2 percent to NAV usa funds and Negative 2.3% to NAV for Cdn funds!!!!
Percentage of fund in gold 62.3%
Percentage of fund in silver:37.5%
cash .+.3%( Nov 9/2017)
WILL UPDATE SPROTT NAV’S LATER TONIGHT
2. Sprott silver fund (PSLV): STOCK RISES TO -0.81% (Nov 9 /2017)
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.59% to NAV (Nov 9/2017 )
Note: Sprott silver trust back into NEGATIVE territory at -0.81%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.59%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada
(courtesy Sprott/GATA)
Sprott Inc. to take control of rival gold holder Central Fund of Canada
by THE CANADIAN PRESS
Posted Oct 2, 2017 8:43 am PDT
Last Updated Oct 2, 2017 at 9:20 am PDT
TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.
Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.
The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.
Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.
In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.
Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.
END
And now the Gold inventory at the GLD
Nov 9/no changes in inventory at the GLD/Inventory rests at 843.09 tonnes
NOV 8/ANOTHER HUGE WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD DESPITE GOLD’S RISE TODAY. INVENTORY RESTS AT 843.09
Nov 7/a huge withdrawal of 1.48 tonnes of gold from the GLD/Inventory rests at 844.27 tonnes
NOV 6/ a tiny withdrawal of .29 tonnes to pay for fees etc/inventory rests at 845.75 tonnes
Nov 3/no change in gold inventory at the GLD/Inventory rests at 846.04 tonnes
NOV 2/STRANGE!!! WE HAD ANOTHER WITHDRAWAL OF 3.55 TONNES FROM THE GLD DESPITE GOLD’S RISE OF $6.60 YESTERDAY AND $1.55 TODAY/INVENTORY RESTS AT 846.04 TONNES
Nov 1/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 849.59 tonnes
OCT 31/no change in gold inventory at the GLD/Inventory rests at 850.77 tonnes
Oct 30/STRANGE WITH GOLD UP THESE PAST TWO TRADING DAYS, THE GLD HAS A WITHDRAWAL OF 1.18 TONNES FROM ITS INVENTORY/INVENTORY RESTS AT 850.77 TONES
Oct 27/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 851.95 TONNES
Oct 26./A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 851.95 TONNES
Oct 25/NO CHANGE (SO FAR) IN GOLD INVENTORY/INVENTORY RESTS AT 853.13 TONNES
Oct 24./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes
OCT 23./NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 853.13 TONNES
OCT 20/NO CHANGE IN GOLD INVENTORY AT THE GLD/ INVENTORY REMAINS AT 853.13 TONNES
oCT 19/NO CHANGE/853.13 TONNES
Oct 18 /no change in gold inventory at the GLD/ inventory rests at 853.13 tonnes
Oct 17./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes
Oct 16/A HUGE WITHDRAWAL OF 5.32 TONNES FROM THE GLD/INVENTORY RESTS AT 853.13 TONNES
0CT 13/ NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 12/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES
Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES
Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES
oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT 854.30 TONNES
Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES
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Nov 9/2017/ Inventory rests tonight at 843.09 tonnes
*IN LAST 268 TRADING DAYS: 97.86 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 203 TRADING DAYS: A NET 59,42 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET 28.31 TONNES HAVE BEEN ADDED.
end
Now the SLV Inventory
Nov 9/no change in silver inventory at the SLV/inventory rests at 318.074 million oz.
NOV 8/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.074 MILLION OZ
Nov 7/a huge withdrawal of 944,000 oz from the SLV/inventory rests at 318.074 million oz/
NOV 6/no change in silver inventory at the SLV/Inventory rests at 319.018 million oz/
Nov 3/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS TONIGHT AT 319.018 MILLION OZ.
NOV 2/A TINY LOSS OF 137,000 OZ BUT THAT WAS TO PAY FOR FEES LIKE INSURANCE AND STORAGE/INVENTORY RESTS AT 319.018 MILLION OZ/
Nov 1/STRANGE! WITH SILVER’S HUGE 48 CENT GAIN WE HAD NO GAIN IN INVENTORY AT THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/
Oct 31/no change in silver inventory at the SLV/Inventory rests at 319.155 million oz
Oct 30/STRANGE!WITH SILVER UP THESE PAST TWO TRADING DAYS, WE HAD A HUGE WITHDRAWAL OF 1.133 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/
Oct 27/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ
Oct 26/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ/
Oct 25/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ
Oct 24/no change in inventory at the SLV/inventory rests at 320.288 million oz/
oCT 23./STRANGE!!WITH SILVER RISING TODAY WE HAD A HUGE WITHDRAWAL OF 1.039 MILLION OZ/inventory rests at 320.288 million oz/
OCT 20NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.327 MILLION OZ
oCT 19/INVENTORY LOWERS TO 321.327 MILLION OZ
Oct 18 no change in silver inventory at the SLV/inventory rest at 322.271 million oz
Oct 17/ A MONSTROUS WITHDRAWAL OF 3.494 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 322.271 MILLION OZ
Oct 16/ NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 325.765 MILLION OZ
oCT 13/ NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ
Oct 12/THE LAST TWO DAYS WE LOST 1.113 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ
Oct 10/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ/
Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ
Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ
Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ
OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z
Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615 MILLION OZ
Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ
Nov 9/2017:
Inventory 318.074 million oz
end
6 Month MM GOFO
Indicative gold forward offer rate for a 6 month duration
+ 1.49%
12 Month MM GOFO
+ 1.60%
30 day trend
end
Major gold/silver trading/commentaries for THURSDAY
GOLDCORE/BLOG/MARK O’BYRNE.
GOLD/SILVER
Prepare For Interest Rate Rises And Global Debt Bubble Collapse
By janskoylesNovember 9, 2017No Comments
– Diversify, rebalance investments and prepare for interest rate rises
– UK launches inquiry into household finances as £200bn debt pile looms
– Centuries of data forewarn of rapid reversal from ultra low interest rates
– 700-year average real interest rate in last 700 years is 4.78% (must see chart)
– Massive global debt bubble – over $217 trillion (see table)
– Global debt levels are building up to a gigantic tidal wave
– Move to safe haven higher ground from coming tidal wave
Editor: Mark O’Byrne
Last week, the Bank of England opted to increase interest rates for the first time in a decade. Since then alerts have been coming thick and fast for Britons warning them to prepare for some tough financial times ahead.
The UK government has launched an inquiry into household debt levels amid concerns of the impact of the Bank of England’s decision to raise rates. The tiny 0.25% rise means households on variable interest rate mortgages are expected to face about £1.8bn in additional interest payments whilst £465m more will be owed on the likes of credit cards, car loans and overdrafts.
The 0.25% rise is arguably not much given it comes against backdrop of record low rates and will have virtually no impact on any other rate. However it comes at a time of high domestic debt levels, no real wage growth and a global debt level of over $217 trillion.
Combined with low productivity across the developed world, experts are beginning to wonder how the financial system (and the individuals within) will cope.
After a decade of seeing negative real rates of interest many investors will be quietly celebrating that they may be about to see a turnaround for their savings. Many hope they will start being rewarded for their financial prudence as opposed to the punishing saving conditions of the last decade.
In reality this will not be the case, at least for some time. Savers and investors alike need to begin to prepare their portfolios for interest rate rises against a backdrop of crisis-triggering debt levels and unproductive economies.
Economies are junkies addicted to credit
Unsurprisingly, credit levels are equal to the increase in private debt every year. Credit is when people spend money that isn’t their own but instead borrow from banks. The bigger private debt levels are compared to a country’s GDP, the more the economy is dependent on credit.
Economic growth becomes addicted to credit. Therefore, the bigger the accumulated debt is when compared to GDP, the more likely it is an economic crisis will happen when credit levels are reduced.
An increase in interest rates means a decrease in credit levels. Especially in countries such as the US and UK where there has been no increase in real wage rates and there is a generation unprepared for an increase in the price of debt.
Consider the UK. When Mark Carney announced a decade-first increase in interest rates it was by a meagre 0.25%. Panic hit the newspapers; how would people with variable mortgages manage?
No one thought to ask, what are people who cannot manage a tiny increase in the cost of debt doing being allowed to borrow in the first place?
Currently debt-to-GDP ratios in the UK are not quite at pre-crisis or Great Depression levels. However they are fast approaching and they are at those levels globally. This combined with rising levels of interest rates makes for a tricky future and one that places savers and investors capital at risk.
700 year data forewarns of sudden interest rate turnaround
According to Bank of England guest blogger Paul Schmelzing as reported by Bloomberg the 700-year average real rate (the benchmark interest rates minus inflation) over the last 700 years (see chart at top) has been 4.78% and the average for the last two hundred years is 2.6%. Unsurprisingly he notes “the current environment remains severely depressed”.
More worryingly Schmelzing believes we have been in a downward trend for the last 500-years.
Upon closer inspection, it can be shown that trend real rates have been following a downward path for close to five hundred years, on a variety of measures. The development since the 1980s does not constitute a fundamental break with these tendencies.
Why is this worrying? Because the bounce back is not only inevitable, but will also be painful and sharp:
Most reversals to “real rate stagnation” periods have been rapid, non-linear, and took place on average after 26 years. Within 24-months after hitting their troughs in the rate depression cycle, rates gained on average 315 basis points, with two reversals showing real rate appreciations of more than 600 basis points within 2 years.
How will we know if such a correction is headed our way? Aside from the fact that central banks are beginning to increase rates of their own volition there are other macro indicators, many of which resonate with the current environment:
Most of the eight previous cyclical “real rate depressions” were eventually disrupted by geopolitical events or catastrophes, with several – such as the Black Death, the Thirty Years War, or World War Two – combining both demographic, and geopolitical inflections…the infamous “Panic of 1873” heralded the advent of two decades of low productivity growth, deflationary price dynamics, and a rise in global populism and protectionism.
Sound familiar?
$217 trillion global debt bubble set to pop
Currently the total global debt bubble is over $217 trillion, with little sign of it slowing. We have built a so-called economic recovery on debt. Spending has been encouraged on a pile of low interest rates and easy-to-reach cheap lines of credit. It has not been encouraged with the thought that one day interest rates will have to climb.
A sudden uptick in interest rates could not come at a more precarious time for global finances. It is not just personal debt levels that are of concern, especially when the Bank of International Settlements is aware of $13 trillion of ‘missing debt’.
In September this year the BIS said it was hard to assess the risk this “missing” debt poses, but its main worry was a repeat of events in the financial crisis: a liquidity crunch like the one that seized FX swap and forwards markets.
It is safe to say that a decade on from the global financial crisis we now have the makings of a new one.
Global debt woes are building up to a tidal wave
As Dambisa Moyo explained in the FT in ‘Global debt woes are building up to a tidal wave’:
In November last year, unsecured household debt in the UK passed pre-financial crisis highs in 2008. In the UK, debt excluding student loans crept up to £192bn, the highest figure since December 2008, and it continues to rise this year. Meanwhile, in the eurozone, debt-to-GDP ratios in Greece, Italy, Portugal and Belgium remain over 100 per cent. As of March there were more than $10tn negative yielding bonds in Europe and Japan.
With or without moderate interest rate increases, debt on a global level is becoming more expensive as markets price in further rate hikes. Add to this the global imbalances we see across the globe it is becoming increasingly questionable how so many countries will manage to service these debts.
Clouded judgement of central bankers
When the Bank of England’s Mark Carney issued a statement following the 0.25% increase, he was clearly down about the future prospects for the UK. He was so wary about encouraging any kind of positivity regarding Brexit and the country’s productivity that he almost warned against sharp future rate rises. The pound dropped unexpectedly in the wake his candidness.
What’s worrying to investors is that Carney (and other fellow bankers) seem to feel interest rate rises are almost to be done at whim. In truth, they are unlikely to have much more time before they are forced to hike rates and then it will be far more dramatic than a gesture of 0.25%.
This is worrying because the economy is unlikely to be strong enough to handle such a change. In turn this will impact economies, financial markets and assets – especially risk assets.
Many economists argue that it is only growth that can pull us out of this situation but we now live in a world where we only know how to create growth from debt. We do not know how to grow a healthy economy without the dripping syringe of the current debt based banking and monetary system.
This is the case both in people’s homes and in the highest government offices. It is an epidemic of global proportions.
Investors need to protect themselves from the addictive nature of these behaviours. We all know what happens to those who are unable to cut themselves off. They find excuses and then they come knocking for help. This is where you must ensure your finances are protected. and you are not forced to “help” the reckless bankers and their dangerous monetary system.
Move to safe haven higher ground from coming debt tidal wave
As we have discussed previously, the global debt bubble is prompting the wealthiest to diversify into gold. Wealthy investors and some of the world’s largest institutions in the world, including Lord Rothchilds, Ray Dalio and insurance company Munich Re, have all expressed their desire to protect their portfolios from the next financial crisis.
The next financial crisis may well be preceded by something we did not experience ten years ago but is now a very real scenario – bail-ins. As banks struggle to retrieve payments from those unable to service debts they will begin to falter. Governments will need to step-in. ‘Luckily’ for them they had the foresight to agree that bail-ins could happen.
This places your investments and especially your deposits at arguably greater risk than before the first financial crisis. With this in mind, follow the likes of Munich Re and prepare your portfolio against counterparty risk, unforeseen consequences of interest rate climbs and the collapse of the global debt bubble. Avoid ETF and digital gold and dependence on single counter parties and have outright legal ownership of segregated, allocated gold bullion coins and bars.
Related Content
Gold Protect From $217 Trillion Global Debt Bubble
Global Debt Bubble Sees Wealthy Diversify Into Gold
World Is Now $199 Trillion In Debt
News and Commentary
Gold holds steady at near three-week high as dollar firms (Reuters.com)
Asia Stocks Test Record High, Extend Global Rally (Bloomberg.com)
Indian Silver Imports Spiked 152% in September (SmaulGld.com)
Palladium just settled above $1,000 an ounce for first time since 2001 (MarketWatch.com)
Bitcoin surges to new high on reports software ‘fork’ suspended (Reuters.com)
America’s ‘Retail Apocalypse’ Is Really Just Beginning (Bloomberg.com)
A Monstrous Bubble – The Destroyer Called Amazon (InvestmentWatchBlog.com)
Central Banks Will Destroy The Planet – Nomi Prins (Youtube.com)
World’s witnessing a new Gilded Age as billionaires’ wealth swells to $6tn (TheGuardian.com)
We Are Reaching A Point Of No Return – Ron Paul (GoldSeek.com)
Gold Prices (LBMA AM)
09 Nov: USD 1,284.00, GBP 980.98 & EUR 1,106.29 per ounce
08 Nov: USD 1,282.25, GBP 976.82 & EUR 1,105.43 per ounce
07 Nov: USD 1,276.35, GBP 970.92 & EUR 1,103.28 per ounce
06 Nov: USD 1,271.60, GBP 969.72 & EUR 1,095.61 per ounce
03 Nov: USD 1,275.30, GBP 976.24 & EUR 1,094.59 per ounce
02 Nov: USD 1,276.40, GBP 965.09 & EUR 1,095.92 per ounce
01 Nov: USD 1,279.25, GBP 961.48 & EUR 1,099.52 per ounce
Silver Prices (LBMA)
09 Nov: USD 17.10, GBP 13.03 & EUR 14.69 per ounce
08 Nov: USD 17.00, GBP 12.96 & EUR 14.65 per ounce
07 Nov: USD 17.01, GBP 12.95 & EUR 14.70 per ounce
06 Nov: USD 16.92, GBP 12.90 & EUR 14.59 per ounce
03 Nov: USD 17.09, GBP 13.05 & EUR 14.67 per ounce
02 Nov: USD 17.08, GBP 12.98 & EUR 14.66 per ounce
01 Nov: USD 16.94, GBP 12.74 & EUR 14.55 per ounce
Recent Market Updates
– Platinum Bullion ‘May Be One Of The Only Cheap Assets Out There’
– World’s Largest Gold Producer China Sees Production Fall 10%
– German Investors Now World’s Largest Gold Buyers
– Gold Price Reacts as Central Banks Start Major Change
– Why Switzerland Could Save the World and Protect Your Gold
– Invest In Gold To Defend Against Bail-ins
– Stumbling UK Economy Shows Importance of Gold
– Wozniak and Thiel Fuel Bitcoin-Gold Debate: Gold Comes Out On Top
– Russia Buys 34 Tonnes Of Gold In September
– Gold Will Be Safe Haven Again In Looming EU Crisis
– Gold Is Valuable Due to “Extreme Rarity” – Must See CNN Video
– Gold Is Better Store of Value Than Bitcoin – Goldman Sachs
– Next Wall Street Crash Looms? Lessons On Anniversary Of 1987 Crash
END
Gold trading today:
Precious Metals Pounded As US Equities Open
Saudi warns its citizens to leave Lebanon “immediately” and gold and silver are panic-sold…
Because stocks must be ramped…
10,000 contracts ($1.3 billion notional) rushed thru in the 2 minutes before the US open…
end
Ethical behaviour by the Fed?
(courtesy Harrison/GATA)
Ethical behavior gives public confidence in Fed, Yellen says
Submitted by cpowell on Wed, 2017-11-08 13:53. Section: Daily Dispatches
So how come the Fed opposes being audited by Congress?
* * *
By David Harrison
The Wall Street Journal
Tuesday, November 7, 2017
Federal Reserve Chairwoman Janet Yellen said Tuesday that ethical behavior from the Fed allows the public to trust it is acting on its behalf.
“The Federal Reserve’s very effectiveness in setting monetary policy depends on the public’s assured confidence that we act only in its interest,” she said. “We must act ethically and we must demonstrate our ethical standards in ways that leave little room for doubt.”
Ms. Yellen spoke at a ceremony honoring her and her predecessor at the central bank, Ben Bernanke. She did not discuss the economy or monetary policy in her remarks.
The award from the Institute of Government and Public Affairs at the University of Illinois honors ethics in government and is named after the late Sen. Paul Douglas of Illinois, who devoted his political career to rooting out government corruption.
… For the remainder of the report:
https://www.wsj.com/articles/yellen-ethical-behavior-gives-public-confid..
END
Will the rising trend for base metals and oil have a spill over effect for silver?
(courtesy Craig Hemke/TFMetals Report/Sprott)
Craig Hemke: Could a commodity rally help spark silver?
Submitted by cpowell on Wed, 2017-11-08 17:26. Section: Daily Dispatches
12:26p ET Wednesday, November 8, 2017
Dear Friend of GATA and Gold:
Writing for Sprott Money, the TF Metals Report’s Craig Hemke notes the rising trends for copper and oil and wonders if they signal a rising trend for commodities generally and if such a trend can pull silver along despite the constant shorting done by investment banks in the futures market. Hemke’s commentary is headlined “Could a commodity Rally Help Spark Silver?” and it’s posted at Sprott Money here:
https://www.sprottmoney.com/Blog/could-a-commodity-rally-help-spark-silv…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
END
Dave Kranzler is spotting that something is different with respect to gold and silver trading
(courtesy Dave Kranzler/IRD/GATA)
Dave Kranzler: Something different is happening with gold and silver
Submitted by cpowell on Wed, 2017-11-08 19:25. Section: Daily Dispatches
2:25p ET Wednesday, November 8, 2017
Dear Friend of GATA and Gold:
Dave Kranzler of Investment Research Dynamics writes today that the investment banks that heavily short gold and silver futures seem to be having trouble getting prices down despite their maintaining unusually large positions. His analysis is headlined “Gold and Silver: Something Different Is Occurring” and it’s posted at IRD here:
http://investmentresearchdynamics.com/gold-and-silver-something-differen…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
Your early THURSDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST
i) Chinese yuan vs USA dollar/CLOSED DOWN AT 6.6380/shanghai bourse CLOSED UP AT 12.34 POINTS .36% / HANG SANG CLOSED UP 228.97 POINTS OR 0.78%
2. Nikkei closed DOWN 45.11 POINTS OR 0.20% /USA: YEN FALLS TO 113.35
3. Europe stocks OPENED RED /USA dollar index FALLS TO 94.56/Euro UP TO 1.1634
3b Japan 10 year bond yield: RISES TO . +.030/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 114.07/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!
3c Nikkei now JUST BELOW 17,000
3d USA/Yen rate now well below the important 120 barrier this morning
3e WTI:: 56.88 and Brent: 63.48
3f Gold UP/Yen UP
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil DOWN for WTI and DOWN FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.372%/Italian 10 yr bond yield DOWN to 1.823% /SPAIN 10 YR BOND YIELD UP TO 1.549%
3j Greek 10 year bond yield RISES TO : 5.143???
3k Gold at $1286.65 silver at:17.10: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble DOWN 2/100 in roubles/dollar) 59.25
3m oil into the 56 dollar handle for WTI and 63 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED DEVALUATION SOUTHBOUND
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.35 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9955 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1582 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017
3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.372%
The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”. Next step for Greece will be the recapitalization of the banks and that will be difficult.
4. USA 10 year treasury bond at 2.334% early this morning. Thirty year rate at 2.805% /
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Global Markets Stumble, Spooked By Japanese Stock Fireworks
The overnight fireworks in Japan, which saw the Nikkei plunge by 860 intraday points and sent vol and volumes soaring (before recovering most losses), spooked traders in Asia and around the globe, and U.S. equity futures are red this morning, along with European shares and oil. As one early riser sellside desk notes, the Nikkei 225 provided the latest example of choppy markets and the 860 point intraday plunge “got us worried. Is this a warning sign for risk assets?” President Trump’s challenge of China for “unfair trading practices” (which he blamed on his predecessors) did not help the calm mood.
“The stock market has run out of a little momentum since the blow-out on the (Japanese) topix so it feels like it’s temporarily paused,” said Societe Generale strategist Kit Juckes. “We are waiting for some news from the Republicans on the tax plans, there is a bond market that has stalled and we’ve got rather soggy looking emerging markets… We probably need to get U.S. Treasury yields higher to get things going again.”
In the aftermath of the Japanese vol spike, the MSCI Asia Pacific Index turned briefly negative having earlier climbed to all-time record.
Most of Europe’s main bourses also drifted in and out of the red after Japan’s disturbance spooked traders and after mixed earnings and as Brexit talks resumed with low expectations in Brussels. There were a series of ECB speeches and what should be buoyant new growth forecasts due later from the European Commission, though bond markets were mostly quiet following a rally this week in benchmark U.S. Treasuries and Bunds. In fact, German Bunds were sharply offered, with yields rising 9% on the day an approaching 0.36%: the move has dragged the rest of the European bonds lower, with OATs and Gilts also moving. According to some desks, this may be due to some rotation from the European equity markets, which are broadly trading into the red today and could be following in the footsteps of Nikkei.
Already shaken by events in Japan, basic-resources shares weighed on the Stoxx Europe 600 index following a decline in industrial-metals prices. An increase in growth expectations from the European Commission failed to lift stocks as disappointing results from companies including Siemens AG and Vestas Wind Systems A/S added to the malaise. Banks gained, led by Italian lenders after BPER Banca S.p.A. earnings beat estimates. Stocks in Asia earlier rose above their 2007 peak before an intraday reversal in Japanese shares on technically-driven trading pared gains in the region. Sterling edged lower as Brexit talks resumed, while oil halted a two-day drop.
Understandably, the yen was the dominant theme of the overnight session as investors rushed to buy the Japanese currency following the Nikkei plunge; the euro found support after the European Commission raised its growth outlook for the common area, while the pound reversed earlier gains as some hedge funds turned sellers;
Investor attention has been focused on Asia this week, where Trump has embarked on an 11-day tour. In Beijing Thursday, he said China is taking advantage of American workers and companies with unfair trade practices, but he blamed his predecessors in the White House rather than China for allowing the massive U.S. trade deficit to grow. A year after Trump was elected to president, investors are also reflecting on how financial markets have fared in the interim, and a rally that has outperformed all but 4 “new president” markets in US history.
As Bloomberg adds, elsewhere in the overnight session, the New Zealand dollar held onto Wednesday’s gains after the central bank flagged it may raise interest rates earlier than expected. The Kiwi was the day’s big mover, surging about 1 percent to a two-week high of before dipping to trade at $0.6956. The kiwi soared after the Reserve Bank of New Zealand (RBNZ) said the country’s fiscal stimulus and the currency’s recent fall would lead to faster inflation and likely an earlier rise in interest rates.
Treasury yields were range-bound as markets wait to see the U.S. tax proposal that will serve as the basis for further discussions. The kiwi was near two-week high after more hawkish RBNZ sends New Zealand’s 10-year yield eight basis points higher. Aussie dips briefly following surprise drop in housing finance activity and a subseqent short squeeze sent it to session highs; Australian sovereign bonds drift lower with 10-year yield up three basis points at 2.60%. JGB futures dip after mediocre 30-year auction tails 1.1bps.
The dollar index against a basket of six major currencies was 0.1 percent lower at 94.803 meanwhile, as it drifted further from the three-month high of 95.150 set in late October. A U.S. Senate tax-cut bill, differing from one already in the House of Representatives, was expected to be unveiled on Thursday, complicating a Republican tax overhaul push and increasing scepticism on Wall Street about the effort. Some also focused on fallout from Democrat wins in regional U.S. elections this week as signal for next year’s mid-term Congressional elections for U.S. President Donald Trump.
“There’s very much a risk of disappointment. The U.S. dollar could go through a weakening phase on the back of uncertainty around that tax reform,” said Steven Dooley, currency strategist for Western Union Business Solutions in Melbourne. Meanwhile, stalled Brexit talks resume on Thursday in Brussels with no indication that a breakthrough is in reach.
In commodity markets, Brent and U.S. crude oil futures were modestly lower, having hit two-year highs earlier in the week following a 40% surge since July. U.S. data showing a rise in domestic crude production had weighed on sentiment overnight but the Middle East uncertainty in Saudi Arabia limited the losses. Gold added 0.2 percent to $1,283.45 an ounce after rising to a three-week high of $1,287.13 an ounce the previous day. Palladium hovered near a 16-year high of $1,019 while nickel fell by more than 2 percent in London to its weakest since October as hype over potential electric vehicle demand that has been driving it higher eased. The nickel market had been ignoring downside risks from policy developments in supply markets Indonesia and the Philippines, and instead focusing on potential future demand from electric vehicle batteries, said Morgan Stanley in a report.
“We (have) heard little to alter our view that producing NiSO (nickel sulphate) isn’t particularly challenging/costly and we see near-term downside risk to price,” it said.
On today’s calendar, the ECB said economic growth in the U.K. is headed for a prolonged slowdown even as the euro-area economy is forecast to expand at the fastest pace in a decade this year. And in the U.S., tax reform discussions continue. The Senate is due to release a “conceptual mark” of a proposal Thursday, according to a spokeswoman. Expected economic data include jobless claims and wholesale inventories. Dish, Disney, Johnson Controls and TransCanada are among companies reporting earnings.
Bulletin Headline Summary from RanSquawk
European markets remain subdued, as equities trade mixed with a lack of any real direction
GBP weaker amid a late follow-through of concerning Brexit commentary
Looking ahead, highlights include US weekly jobs, ECB’s Lautenschlaeger and Constancio
Market Snapshot
S&P 500 futures down 0.1% to 2,588.30
STOXX Europe 600 down 0.2% to 393.82
MSCI Asia up 0.1% to 171.99
MSCI Asia ex Japan up 0.3% to 561.79
Nikkei down 0.2% to 22,868.71
Topix down 0.3% to 1,813.11
Hang Seng Index up 0.8% to 29,136.57
Shanghai Composite up 0.4% to 3,427.80
Sensex up 0.06% to 33,239.47
Australia S&P/ASX 200 up 0.6% to 6,049.43
Kospi down 0.07% to 2,550.57
German 10Y yield rose 0.2 bps to 0.328%
Euro up 0.05% to $1.1601
Italian 10Y yield rose 4.5 bps to 1.482%
Spanish 10Y yield rose 3.0 bps to 1.515%
Brent futures down 0.1% to $63.41/bbl
Gold spot up 0.2% to $1,283.82
U.S. Dollar Index down 0.06% to 94.81
Top Overnight News
President Trump said China is taking advantage of American workers and American companies with unfair trade practices, but blamed his predecessors in the White House for allowing the U.S. trade deficit to grow
The European Commission’s chief Brexit negotiator, Michel Barnier, and U.K. Brexit Secretary David Davis resume talks on the terms of Britain’s exit from the EU. Timing and duration in Brussels to be determined
ECB’s head of banking supervision, Daniele Nouy, signaled that she’s willing to compromise on controversial plans to toughen rules on bad loans after criticism from the European Parliament that sent Italian bank shares soaring
EU is giving U.K. an informal deadline of two to three weeks to set out how much it is prepared to pay in the Brexit divorce settlement, the Financial Times reports, citing an unidentified senior EU negotiator
Hearing on Powell for Fed Chair set for Nov. 28
Saudi Billionaires Said to Move Funds to Escape Asset Freeze
AT&T CEO Says He Won’t Sell CNN as Antitrust Tension Rises
Boeing Wins China Orders for 300 Planes Worth $37 Billion
London House-Price Slump Persists as Brokers See Sales Tumble
Vestas Plunges Most in 6 Years on Tougher Wind Competition
BOE’s McCafferty Says Banks May Leave Before Brexit Deal Agreed
Risk on sentiment had been in full swing in Asia as stocks continued to edge higher at the beginning of the session, before later paring initial advances, particularly in Japanese assets. Nikkei 225 had been the notable outperformer although reversed gains of 2% as US equity futures dipped, subsequently sparking safe haven flow in the JPY, while some investors also touted profit taking. Elsewhere, the ASX 200 hovered around 10yr highs with iron ore prices seeing another day of gains, consequently supporting miners. Chinese markets traded in mixed fashion with the Hang Seng keeping afloat after encouraging Chinese CPI and PPI data which tops analyst estimates, while the Shanghai Comp fluctuated between gains and losses. 10yr JGBs are a tad lower, while underperformance has been observed in the belly of the curve with the 10yr yield ticking up 0.1bps.
Top Asia News
Noble Group Posts $3 Billion Year-to-Date Loss as Crisis Deepens
Inside Noble-Vitol Deal Shows Colonial Pipeline as Top Asset
Malaysia Says It May Consider Review of Monetary Accommodation
Malaysian Bonds Face Specter of First Rate Hike Since 2014
Philippines Holds Benchmark Rate as Inflation Seen on Target
Bakrieland Says Singapore Court Approves Debt Restructuring Plan
European equities trade with little in the way of any notable price action after a directionless lead from Asia after initial gains were erased. On a sector specific basis, performance has largely been off the back of individual earnings from across the continent with notable movers including Vestas Wind Systems (-16.9%), Burberry (-10.5%), Sainsbury’s (-2.9%), Siemens (-2.6%) and Commerzbank (+2.6%). Upside in Commerzbank shares has subsequently lead to some outperformance in financial names with Italian banks also providing some support amid UniCredit’s latest trading update and a sector bounceback from yesterday’s losses. No sign of any investor angst or dampened demand whatsoever, as 2023 supply was snapped up with only a 1 tick price tail. This, despite a sharp retreat in yields following the BoE rate hike and not much in the way of concession going in to the DMO tap. Note also, the issue does not fall into the more normal 5 year bucket until next year and the average auction yield was just a shade below yesterday’s closing level. However, 10 year benchmark Liffe futures have retreated from best levels to marginal new lows for the session (125.45), albeit largely alongside a general downturn in fixed (Bunds just off a new Eurex base of 163.23). In truth, debt markets are lacking clear direction and consolidating recent gains/yield declines/curve flattening.
Top European News
Denmark’s Negative Rates Are Seen Persisting Into Next Decade
ECB’s Nouy Bends on Bad-Loan Plan as Italian Bank Shares Soar
U.K. Likely to See More Utility Mergers If SSE Deal Approved
Euro-Area Growth Forecast Lifted Again as U.K. Outlook Dims
In FX, a broadly softer Greenback, largely due to ongoing US tax reform uncertainty, and supportive RBNZ impulses has enabled the Kiwi to recoup more lost ground after the RBNZ stood pat on rates at 1.75%. Accordingly, it brought forward rate hike projections to June 2019 from Q3 previously, while Governor Spencer also contended that the NZD is now fair value (although his deputy McDermott thinks a bit more depreciation is desirable). EUR is back to pivoting around the 1.1600 level vs the Dollar where large (1.7 bn) option expiries reside. USD/JPY has seen very choppy trade in line with the Nikkei, but ultimately firmer on safe-haven grounds, as USD/JJPY retreats from 114.00 again towards November lows. Currently around 113.50, bids are seen at 113.40 and then 113.00, while offers are said to be layered from 114.00-20. Riksbank meeting minutes see several members emphasising the importance of the exchange rate for the economic outlook and inflation prospects.
In commodities, iron ore prices continued to surge higher overnight with Dalian iron ore rising as much as 2% amid the persistent rise in steel prices. Precious metals gained a slight bid following the turnaround in risk sentiment, where Japan equities reversed its 2% rise to trade with losses of 1.5%. WTI and Brent crude futures trade relatively sideways with little in the way of notable newsflow other than Goldman Sachs sticking to their USD 58bbl year-end call for Brent whilst noting the ‘potential for high spot price volatility in the coming weeks’.
Looking at today’s calendar, data wise, September Germany trade data along with UK industrial production are due. Elsewhere, US initial jobless claims and wholesale inventories are also due. We’ll also receive the latest EC economic forecasts while the ECB’s Villeroy de Galhau, Coerue, Mersch, Lautenschlaeger and Constancio are due to speak. Brexit talks are due to resume between Barnier and Davis while President Trump holds meetings with China’s Xi and Li Keqiang.
US event calendar
7:45am: Bloomberg Nov. United States Economic Survey
8:30am: Initial Jobless Claims, est. 231,500, prior 229,000; Continuing Claims, est. 1.89m, prior 1.88m
9:45am: Bloomberg Consumer Comfort, prior 51.7
10am: Wholesale Trade Sales MoM, est. 0.9%, prior 1.7%; Wholesale Inventories MoM, est. 0.3%, prior 0.3%
DB’s Jim Reid concludes the overnight wrap
Needless to say that the focus for markets today will be on what details emerge from the Senate’s version of the GOP tax bill. It’s unclear just how much detail we’ll get though with some conflicting reports out there. Axios reported that the release of the bill will be delayed however Politico reported separately that GOP leaders are ready to walk through the bill with the GOP conference at 11.30 EST. Thereafter it will be released to the public but the timing is a bit up in the air so we might have to wait and see. Overnight, a spokeswoman for the Senate Finance Committee, Ms Lawless, noted that today’s tax proposal will be a “conceptual mark” rather than the legislative details.
Over in markets, the one year Trump anniversary was one of the less exciting days that we’ve had so far. Initially the tone felt a bit more risk-off with European markets generally closing a bit softer. US markets did however pare early losses into the close at least with the S&P 500 ending +0.14%. That masked another difficult day for banks however, partly influenced by the Washington Post article that did the rounds suggesting that the Senate GOP tax bill could delay the cut in the corporate tax rate by one year. Later in the day, Treasury Secretary Steven Mnuchin also refused to rule out a possible phase-in of corporate tax cuts. Meanwhile victory for the Democrats in the two Governor races in New Jersey and especially Virginia also appeared to play a factor given the midterm elections next year. It remains to be seen whether that will transpire into taking back votes across the rest of the country but nevertheless it was a statement of intent.
Meanwhile EM tensions continue to bubble under the surface with headlines never too far from the front pages. EM sovereign debt has certainty had a tough time of it in the last week or so but we’re also starting to see some signs of selling pressure in DM HY credit with Crossover and CDX HY 11bps and 7bps wider this week, respectively. All the talk in bond markets at the moment though is the flattening across the Treasury curve. Yesterday saw both the 2s10s and 5s30s curves flatten for the 9th and 10th successive day respectively. The former dropped to 68bps and has now flattened by 16bps during that run. The latter was only modestly flatter at 78bps but is still also 12bps flatter over the same time.
So as we know the Treasury curve is the flattest it’s been in 10 years and there is plenty of ongoing debate as to what is driving the recent price action. Various reasons have been suggested. Our US rates strategists have previously noted that even with a tax plan, overseas investors and pension buying of the long-end is depressing term premium and yields. Another suggestion is that with 2y yields somewhat anchored relative to the Fed’s effective rate and therefore further rate hikes, the long-end is instead being weighed down by long-end Euro rates. Unsurprisingly there is plenty of discussion about how the recent moves are indicating late cycle tendencies. One thing we would note though is that the NY Fed recession model is only showing a 9% probability of a recession in the next 12 months. While that’s up from 3% at the end of last year the overall level is still clearly fairly low based on their model but it’s worth keeping an eye on. Also worth monitoring perhaps is the whether the flattening has had much impact on bank lending when we receive the next Fed Senior Loan Survey. In the last 3 days, US banks have dropped -3.53%, so the sector has certainly materially underperformed.
This morning in Asia, China’s October CPI was slightly above consensus at +1.9% yoy (vs. +1.8% expected) and also up from +1.6% the month prior, while PPI was steady but well above expectations at +6.9% yoy (vs. +6.6% expected). Markets are trading higher in Asia, with the Nikkei powering ahead (+0.58%) to a fresh 25 year high following sound corporate results, while the Hang Seng (+0.52%) and ASX 200 (+0.55%) are also up, but the Kospi is down 0.33%. Last night Bloomberg ran an article suggesting that the White House plans to announce $250bn of business deals with China this week based on comments from Commerce Secretary Wilbur Ross. As we go to print President Trump and China President Xi Jingping are about to hold a joint briefing. This comes after Trump called the trade relationship between the two “very one sided” and the deficit “shockingly high”. Xi said that China is to become more open to foreign investment and that the nation is “unswervingly committed” to opening up.
Moving on. In the UK, PM May’s cabinet has now lost two ministers within one week after the International Development Secretary Priti Patel offered her resignation, shortly after she admitted to holding a series of unauthorised meetings with Israeli officials without the PM’s knowledge and suggested giving British aid money to an Israeli army project. In view of the increased instability around PM May’s government, some suggested this may have knock on impacts on the progress of Brexit talks. Nonetheless, the Irish PM Varadkar has signalled that Brexit talks could have a breakthrough by December, noting that “I’m more optimistic than I was in the weeks before the October Summit”. The current round of Brexit talks will resume today in Brussels.
Following on, BoE policy maker McCafferty has warned that clarity on Brexit will be needed by early next year to better allow businesses to forward plan. He noted businesses “cannot wait until the last minute”, adding that “there’s a point…even when it becomes clear what the final deal will be – whether it’s no deal or some sort of deal – the banks will have to act”. Elsewhere, the BoE’s banking regulator Mr Woods had earlier noted that it was “plausible” the UK could lose up to 75,000 jobs in the banking and insurance sector if it left the EU bloc without a trade deal.
Staying in the UK, according to a network of UK businesses monitored by the BoE, the latest agents’ summary suggest wage growth in 2018 should improve further, now likely to be 2.5%-3.5% yoy growth (up 0.5% from prior readings), in part due to a slow-down in the availability of workers, which in some ways is not too surprising given UK’s unemployment is at a 42 year low. However, while the survey noted modest growth in spending is expected to continue for the coming year, expectations in the following two years were “weaker”.
Across the pond, the Fed’s Harker noted he has “not at this point” seen anything that would push him away from a rate hike in December, which is in line with the consensus view with the odds of rate hike unchanged at 92% (per Bloomberg). Looking ahead, he has “pencilled in three (rate) increases in 2018” but noted that this is somewhat evolving as he “will reassess that as the data comes in”. On potential tax cuts, he noted “we need more specificity as to what those programs would entail”, and that “we have not put any fiscal stimulus” in our forecasts at this stage.
Before we look at the day ahead, a quick recap of the minimal economic data from yesterday. In the US, the weekly MBA mortgage applications was flat (vs. -2.6% previous). Over in Europe, Spain’s September industrial production was above expectations at +0.1% mom (vs. -0.2% expected), leading to annual growth of +3.4% yoy (vs. +3.1% expected). In France, the September trade deficit was broadly in line at -$4.67bln, although there was a $0.3bn positive revision to the prior month’s reading. Elsewhere, the current account balance was lower than expected at -$3.1bn (vs. -$1.5bn expected). This morning in New Zealand, the central bank has the left cash rate on hold at 1.75% and noted that “monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly”. Elsewhere, inflation is now expected to trough at 1.5% yoy in 1Q18 but rebound to 2.1% yoy in 2Q.
Looking at the day ahead, data wise, September Germany trade data along with UK industrial production are due. Elsewhere, US initial jobless claims and wholesale inventories are also due. We’ll also receive the latest EC economic forecasts while the ECB’s Villeroy de Galhau, Coerue, Mersch, Lautenschlaeger and Constancio are due to speak. Brexit talks are due to resume between Barnier and Davis while President Trump holds meetings with China’s Xi and Li Keqiang.
3. ASIAN AFFAIRS
i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 12.34 points or .36% /Hang Sang CLOSED UP 228.97 pts or 0.78% / The Nikkei closed DOWN 45.11 POINTS OR 0.20%/Australia’s all ordinaires CLOSED UP 0.55%/Chinese yuan (ONSHORE) closed DOWN at 6.6380/Oil DOWN to 56.88 dollars per barrel for WTI and 63.48 for Brent. Stocks in Europe OPENED RED . ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6380. OFFSHORE YUAN CLOSED WEAKER TO THE ONSHORE YUAN AT 6.6447 //ONSHORE YUAN WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO THE DOLLAR/. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS VERY HAPPY TODAY.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
NORTH KOREA//SOUTH KOREA
3b) REPORT ON JAPAN
Something snapped last night in Japan that saw a violent stock plunge only to be rescued by their plunge protection team
(courtesy zerohedge)
Japan Rocked By Violent Stock Plunge As Nikkei Tumbles 850 Points Before Recovering Losses
Something snapped in Japan today.
With Asian stocks finally breaking out a decade-long doldrum, and hitting record highs earlier in the session, and with Japanese equities starting off the session on the right foot and continuing their recent ascent which until Wednesday had seen them rise on 23 of the past 25 days, Japanese shares suddenly lurched on Thursday, plunging sharply lower after dramatic intraday swings took the Nikkei and Topix indexes to multi-decade highs only to drop in the afternoon on futures-driven trading ahead of the following day’s options settlement. All told, in a little over an hour, what had been another solid rally in Japanese stocks turned into some rather sharp clear-air turbulence, with the Nikkei 225 Stock Average plunging about 3.6% from the afternoon-session high to its low for the day.
It all started off well enough: in the morning session, the Topix notched a new 26-year high and the Nikkei 225 broke the 23,000 level for the first time since January 1992, as financial and securities shares rallied.
Then something flipped and in a gut-churning rollercoaster of a move, the Nikkei lurched from an over 2% gain which took it to a fresh 25 year high at the end of the morning session, to a loss of as much as 1.7%. The sudden reversal quickly spread to the currency market, with the yen surging before spreading across Asia: South Korean and Hong Kong equities also tumbled in sympathy. As Bloomberg snarks, “Sydney traders could count themselves lucky their market had already closed before the worst of the sell-off.”
Some traders laid the blame on technical factors – after all, the Nikkei has been on a tear, ending the day lower in just five times since the start of October (assuming Wednesday’s 0.04% “drop” was as unchanged). Others, like Bloomberg, wondered if the Nikkei had suffered a flashback: in an odd coincidence the Nikkei 225’s was its biggest reversal (points-wise) since exactly a year ago, when Donald Trump’s shock U.S. election victory rocked markets around the world… before they bounced back the next day.
Perhaps it was indeed Trump’s fault once again: the drop started with President Trump’s first visit to the region, and the slump in the Nikkei (which then weighed on South Korean and Hong Kong stocks) accelerated as Trump spoke to reporters in Beijing. Standing alongside China’s President Xi Jinping, Trump said that the world has the power to take on the North Korean “menace.”
Whether this rhetoric contributed to the market ruckus is unclear. What is clear is that the veil of comlacency was violently pierced – the Nikkei Volatility Index surged 23%, the most since August – if only for a while.
Still, when the dust settled, the Nikkei ended down just 0.2% at 22,868.71, after tumbling 850 intraday points from a morning high of 23,382.15, or up 3%, to an afternoon session low of 22,522.83, or down -1.7%, its biggest one-day move since the election of U.S. President Donald Trump one year ago. Meanwhile, the Topix ended down 0.3 percent at 1,813.11, after soaring as high as 1,844.05 in the morning and skidding as low as 1,791.12 in the afternoon.
The modest closing drop however masked a violent undercurrent, with volatility soaring 23% while volume on the Tokyo Stock Exchange’s first section came to 4.9935 trillion yen, its highest since Nov. 4, 2014. TSE first section volume came to 2.748 billion shares, its highest since Dec. 12.
Attempts to explain the mini flash crash proliferated: “There was no special news that triggered this afternoon’s volatile moves,” said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “It was massive position adjustment ahead of tomorrow’s SQ.” The closely watched options settlement price, known in Japan as the special quotation, or “SQ,” is calculated from the opening prices of the 225 shares in the Nikkei average on the second Friday of every month.
Other traders said algorithm-driven trading exacerbated the moves once they began. Financial and securities shares were among strong performers in the morning, though they pared their gains in afternoon trade.
Courtesy of Bloomberg, here is the full list of possible explanation for today’s sharp tumble:
Takashi Kudo (Head of corporate sales at Moneysquare Japan Inc. in Tokyo):
There was some speculation in the market that the drop in equities was due to profit-taking by foreign investors, before the special quotation, and that dragged the dollar/yen lower
Typically, declines in stocks lead to yen buying.
Mitsuo Shimizu (Deputy general manager at Japan Asia Securities in Tokyo):
“The biggest factor behind today’s roller-coaster move was position adjustments ahead of the special quotation”
“At the end of the day, people came to realize ‘well, corporate fundamentals are still good.’ And then people bought on dips toward the market close”
Hans Goetti (Founder of HG Research in Singapore):
The afternoon drop in Japanese stocks may just be a one-day move and is nothing to worry about
Japan stocks could rise as much as 30 percent in next few months on earnings, valuations and central bank policy
Jingyi Pan (Strategist at IG Asia in Singapore):
“I do think the market is taking profit indeed, but likely due to the fact that it had been an opportune moment”
Some of the rhetoric coming out of U.S. President Donald Trump’s China visit had not been the most amicable, and across haven assets, there had been some buying. The reiteration of the need to “address the unfair trade practices” had likely been one alarming the markets
Tsutomu Yamada (Analyst at Kabu.com Securities Co. in Tokyo):
Sudden drop in the Topix and the Nikkei 225 is simply a technical adjustment as the earlier rally was too fast. Some people are taking profits after extreme market advance
Yukio Ishizuki (Senior currency strategist at Daiwa Securities Co. in Tokyo):
A pullback triggered gains in the yen against the dollar and other currencies, while the move wasn’t triggered by any news or currency-specific issues
So was the mini crash just a one-off event, or a harbinger of the bitcoin-esque mega plunge yet to come? And was the miraculous last minute recovery another BOJ intervention? Those are all questions the bulls – not only in Japan – will be asking themselves today.
3C CHINA REPORT.
4. EUROPEAN AFFAIRS
This may turn out to be very problematic for Draghi as there will not be enough Italian bonds for the ECB to purchase around their election time
(courtesy zerohedge)
Uh-Oh…Draghi’s Ammunition To Buy Italian Bonds Before The Election Is Less Than We Thought
Having successfully pulled off the announcement of the ECB’s “dovish taper” – where monthly bond purchases will be halved to Euro 30 billion from January 2018 – last month, a challenge for Mario Draghi in Q1 2018 has appeared on his radar. The ECB’s bond buying ammunition is slightly less than analysts thought and there is the small matter of the looming Italian election. The latter is likely to be held in March 2018, although it could take place as late as May. Veteran strategist, now Bloomberg columnist, Marcus Ashworth explains in “Italy’s Shrinking Safety Net”.
One of Mario Draghi’s hands is being tied behind his back just as bond markets may need his help the most. Data released by the European Central Bank this week show the ECB president will have reduced scope to buy Italian bonds if markets start convulsing ahead of the country’s general election in the spring. From January, the ECB’s Quantitative Easing program will pare its monthly bond purchases by 50 percent to 30 billion euros ($35 billion). Draghi has sought to soften this so-called tapering by emphasizing how the ECB can reinvest maturing bonds to pick up the shortfall.
There’s a hitch — the central bank said it intends only to reinvest proceeds from maturing bonds in debt of the same country. That leaves Draghi with only limited flexibility to use his buying power to the benefit of one country over another.
Monday’s release showed that proceeds from these maturing securities, which could then fund new purchases of Italian bonds is both less than expected and likely skewed until after the election. Ashworth provides us with the numbers.
Monday’s release showed that proceeds from these maturing securities which could then fund further purchases of government bonds, will only be about 8.5 billion euros, less than analyst expectations of as much as 12 billion euros. This means the pace of bond purchases under the QE program will fall by about a third from this year’s rate of 60 billion euros a month. The first quarter will be noticeably lighter in monthly redemptions compared with the rest of 2018. The big months for Italian redemptions won’t come until April and October.
This is inconvenient, especially as the ECB had already been “pushing the envelope” in terms of Italian purchases (and French),as Ashworth laments.
The ECB has already spent most of 2017 buying more Italian bonds than the capital key, a formula that determines how much of each nation’s debt the central bank can buy, would suggest. That variation is allowable – but it leaves little extra available slack to cut Italy.
The EU is piling the pressure on the UK to agree the divorce settlement as Brexit negotiations resumed in Brussels. In EU parlance, it appears that the term for this is the “moment of clarification”, which only makes us despise EU bureaucrats even more. Our suspicion is that, with the UK keen to settle the money issue and move on to trade talks, the EU sees an opportunity to take advantage of political turmoil in the UK, as the talks reaching their most critical stage. According to AFP.
The European Union on Thursday warned Britain to reach a divorce deal by the end of the month to guarantee moving to trade negotiations, as Brexit talks resumed in Brussels. Fears are growing in Brussels that the chaotic political situation in London after Prime Minister Theresa May suffered a string of ministerial resignations will hamper the chances of reaching a deal on key issues, especially Britain’s contentious exit bill. EU leaders had hoped to officially approve the next phase on future relations and a transition period at a summit in December, but officials are increasingly concerned that deadline could slip to February or March.
“Time is pressing,” chief EU negotiator Michel Barnier said in a speech in Rome on Thursday before flying back to Brussels to start the sixth round of the slow-moving talks. “The European Council summit in October wanted to keep up the dynamic of the negotiations and I am of the same state of mind,” Barnier said. “But the real moment of clarification is coming.”
Adding to the pressure is that this round of talks is confined to two days, rather than the normal four. Barnier and Britain’s Brexit Secretary, David Davis, will only meet on Friday morning, after which they will hold a press conference. As we’ve said on numerous occasions, the EU is believed to be demanding 60 billion Euros compared to the UK’s offer of about 40 billion Euros. However, earlier this month, Davis appeared to signal that the UK would increase its offer – see “UK Will Compromise On Divorce Bill To Accelerate Brexit Negotiations” here).
In the last two weeks, Prime Minister, Theresa May’s tenuous grip on power has been further undermined by the resignation of two ministers in her cabinet.
Defence Secretary, Michael Fallon, resigned amid the ongoing sexual harassment scandal in Westminster; and
International Development Secretary, Priti Patel, resigned over unauthorized meetings in Israel.
AFP alludes to weakness in the UK’s bargaining position given the latest scandals…
To move on to trade talks, the EU is demanding sufficient progress on three key divorce issues, above all the bill Britain must pay to cover its budgetary commitments, a figure which senior European officials put at 60 billion euros ($70 billion). They also want commitments on keeping an open border between Northern Ireland and Ireland, and on guaranteeing the rights of three million European citizens living in Britain. But the British government looks increasingly distracted, with the resignation of its aid minister over meetings in Israel on Wednesday adding to the sense of chaos since May’s disastrous showing in elections earlier this year.
…and we suspect that this is what Barnier (with the guiding hand of the odious Jean-Claude Juncker) is hoping to turn to his advantage. Coincidentally, an anonymous EU source was able to provide AFP with some cryptic comments – although it wasn’t hard to see what he/she was getting at.
“We are a bit concerned about what we are seeing in the UK at the moment, we want a strong negotiating partner,” an EU diplomat told AFP on condition of anonymity. “I see a strong willingness to come to a deal. I am confident that everybody understands what has to be done on both sides. The question is, Do they have the strength? And will the moves be made in time by the end of November, first week of December?
Bloomberg appears to have picked up a similar downbeat briefing from EU officials.
Brexit talks resumed Thursday with no indication that a breakthrough is in reach: the Europeans are taking a cautious approach even as both sides hope for an agreement by year-end. European diplomats in Brussels are concerned about the U.K.’s political crisis, and are trying to avoid sending Britain overly encouraging signals about how talks are progressing, according to a person familiar with the situation. Countries including Germany asked negotiators on Wednesday not to rush into preparing documents for trade talks, to avoid creating the impression that negotiations are moving on, the person said…EU diplomats have begun work on two versions of draft summit conclusions for the December gathering — one for the possibility of a breakthrough and another one for continuing stalemate. The Times reported on Thursday that leaders are also preparing for the possibility of May’s downfall.
It was probably another coincidence that Juncker’s European Commission today cut its forecasts for UK economic growth for 2017-19 on Brexit uncertainty, while raising its forecast for Eurozone growth. From The Guardian.
Newsflash: The European Commission has slashed its forecast for UK growth, warning that Brexit uncertainty will hurt business investment. It now expects Britain’s economy to grow by just 1.5% this year, down from 1.8% previously. The EC also predicts that growth will slow to 1.3% next year, and just 1.1% in 2019…Having slashed the UK’s growth forecasts, the EC has also raised its forecasts for the eurozone. The Commission now believes that eurozone countries will expand by 2.2% this year, up from the 1.7% forecast earlier this year.
As the talks progress, the clock is counting down to next month’s EU summit for the Brexit settlement to be finalized. As AFP’s anonymous source explains, the EU is ready to move the talks forward as long as it likes the “colour” of the UK’s money – otherwise, we suspect, banks and other businesses will go apoplectic about the risk of a “hard Brexit”.
That timescale would allow preparations for a formal decision by EU leaders at a summit on December 14-15 to move on to discussing future ties, a step Britain has been pushing for for months. “Everything is ready (to start trade talks) on the first of January,” the EU diplomat said. Failure to do so would probably push back the move to one of the next summits in February or March, leaving only around six months to reach a deal by October 2018, the timeline Barnier has set in order for the withdrawal agreement to be ratified by Brexit day in March 2019. The EU says Britain must provide written guarantees of a pledge to honour the financial commitments that May made in a speech in Florence, Italy, in September. “We don’t need speeches, we need commitments,” the diplomat said.
There’s nothing like kicking a woman, Theresa May, when she’s down, but what else would you expect from Juncker and his cronies.
5. RUSSIA AND MIDDLE EASTERN AFFAIRS
A huge paper from Meijer on the situation inside Saudi Arabia and how its finances are bleeding faster than a speeding bullet. He outlines how Saudi Arabia is joining forces with the UAE with the help of Israel and the USA in the hope of replenishing its finances
a must read..
(courtesy Raul Meijer)
How Broke Is The House Of Saud?
Authored by Raul Ilargi Meijer via The Automatic Earth blog,
Trying to figure out what on earth is happening in the Middle East appears to have gotten a lot harder. Perhaps (because) it’s become more dangerous too. There are so many players, and connections between players, involved now that even making one of those schematic representations would never get it right. Too many unknown unknowns.
A short and incomplete list of the actors: Sunni, Shiite, Saudi Arabia, US, Russia, Turkey, ISIS, Syria, Iran, Iraq, Libya, Kurds, Lebanon, Hezbollah, Hamas, Qatar, Israel, United Arab Emirates (UAE), Houthis, perhaps even Chechnya, Afghanistan, Pakistan. I know I know, add your favorites.
So what have we got, or what do we know we’ve got?
We seem to have the US lining up with Israel, the UAE and Saudi Arabia against Russia, Iran, Syria, Hezbollah. Broadly. But that’s just a -pun intended- crude start.
Putin has been getting closer to the Saudis because of the OPEC production cuts, trying to jack up the price of oil. Which ironically has now been achieved on the heels of the arrests of 11 princes and scores of other wealthy and powerful in the kingdom. But Putin also recently signed a $30 billion oil -infrastructure- deal with Iran. And he’s been cuddling up to Israel as well.
In fact, Putin may well be the most powerful force in the Middle East today. Well played?! He prevented the demise of Assad in Syria, which however you look at it at least saved the country from becoming another Iraq and Libya style failed state. If there’s one thing you can say about the Middle East/North Africa it’s that the US succeeded in creating chaos there to such an extent that it has zero control left over any of it. Well played?!
One thing seems obvious: the House of Saudi needs money.
The cash flowing out to the princes is simply not available anymore. The oil price is a major factor in that. Miraculously, the weekend crackdown on dozens of princes et al, managed to do what all the OPEC meetings could not for the price of oil: push it up. But the shrinkage of foreign reserves shows a long term problem, not some momentary blip:
nother sign that money has become a real problem in Riyadh is the ever-postponed IPO of Saudi Aramco, the flagship oil company supposedly worth $2 trillion. Trump this week called on the Saudi’s to list it in New York, but despite the upsurge in oil prices you still have to wonder which part of that $2 trillion is real, and which is just fantasy.
But yeah, I know, there’s a million different stocks you can ask the same question about. Then again, seeing the wealth of some of the kingdom’s richest parties confiscated overnight can’t be a buy buy buy signal, can it? Looks like the IPO delay tells us something.
And then you have the 15,000 princes and princesses who all live off of the Kingdom’s supposed riches (‘only 2,000’ profit directly). All of them live in -relative- wealth. Some more than others, but there’s no hunger in the royal family. Thing is, overall population growth outdoes even that in the royal family. Which means, since the country produces nothing except for oil, that there are 1000s upon 1000s of young people with nothing to do but spend money that’s no longer there. Cue mayhem.
And things are not getting better, Saudi Arabia loses money on every barrel it produces. There are stories about them lowering their break-even price, but let’s take that with a few spoonfuls of salt. A 25% drop in break-even prices in just one year sounds a bit too good. Moreover, main competitors like Iran would still have a much lower break-even price. So even if prices would rise further, the Saudi’s might only break even while Iran gets much richer. Running vs standing still.
Saudi Arabia Leads Gulf Nations in Cutting Break-Even Oil Price
Saudi Arabia, OPEC’s biggest oil producer, is also a leader when it comes to slashing the crude price the country needs to balance its budget. The kingdom will need oil to trade at $70 a barrel next year to break even, the IMF said Tuesday in its Regional Economic Outlook for the Middle East and Central Asia. That’s down from a break-even of $96.60 a barrel in 2016, the biggest drop of eight crude producers in the Persian Gulf. The break-even is a measure of the crude price needed to meet spending plans and balance the budget.
Gulf oil producers are cutting spending and eliminating subsidies after crude plunged from more than $100 a barrel in 2014 to average just over half that this year. The need to curb spending is more urgent with the Organization of Petroleum Exporting Countries cutting output to reduce a global glut. Oil will trade at $50 to $60 a barrel for the “medium term,” the IMF said.
So a thorough cleansing job of the royal family is perhaps inevitable, albeit very risky. King Salman and crown prince Mohammed bin Salman are up against a very large group of rich people. But there’s no way back now.
Saudi Banks Freeze More Than 1,200 Bank Accounts in Anti-Corruption Purge
Saudi Arabian banks have frozen more than 1,200 accounts belonging to individuals and companies in the kingdom as part of the government’s anti-corruption purge, bankers and lawyers said on Tuesday. They added that the number is continuing to rise. Dozens of royal family members, officials and business executives have been detained in the crackdown and are facing allegations of money laundering, bribery, extorting officials and taking advantage of public office for personal gain. Since Sunday, the central bank has been expanding the list of accounts it is requiring lenders to freeze on an almost hourly basis…
Much more will have to follow that. Doing a half way job is far too risky once the job has started. Not even $800 billion sounds like all that much. Separate families and factions within the royal family have had decades to accumulate wealth.
Saudi Crackdown Targets Up to $800 Billion in Assets
The Saudi government is aiming to confiscate cash and other assets worth as much as $800 billion in its broadening crackdown on alleged corruption among the kingdom’s elite, according to people familiar with the matter. Several prominent businessmen are among those who have been arrested in the days since Saudi authorities launched the crackdown on Saturday, by detaining more than 60 princes, officials and other prominent Saudis, according to those people and others. The country’s central bank, the Saudi Arabian Monetary Authority, said late Tuesday that it has frozen the bank accounts of “persons of interest” and said the move is “in response to the Attorney General’s request pending the legal cases against them.”
The most visible – and perhaps richest- of all those arrested -in western eyes- is Al-Waleed. The Bloomberg estimate of his wealth that came out this week is $19 billion. But their own article seems to indicate a much higher number. He owns 5% of Apple -says Bloomberg-, and that share alone would be worth $45 billion.
Alwaleed, Caught in Saudi Purge, Has Assets Across the World
Apple – Alwaleed bought 6.23 million shares, or 5 percent, of the computer and mobile-device maker for $115.4 million in 1997. He made these purchases between mid-March and April of that year while the company was still struggling to turn itself around. He has since continued to hold the stake while Apple’s valuation has soared to as high as $900 billion.
Going through all these numbers, you can imagine why the ruling family, or rather the rulers within that family, are getting nervous. And that’s where we get to an interesting piece by Ryan Grim at the Intercept, who says it’s not even 32-year-old crown prince Mohammed bin Salman, known as MBS, or King Salman, 81, who control the kingdom these days, it’s the United Arab Emirates (UAE) -and maybe Washington-.
The coup has already been perpetrated.
Saudi Arabia’s Government Purge – And How Washington Corruption Enabled It
The move marks a moment of reckoning for Washington’s foreign policy establishment, which struck a bargain of sorts with Mohammed bin Salman, known as MBS, and Yousef Al Otaiba, the United Arab Emirates ambassador to the U.S. who has been MBS’s leading advocate in Washington. The unspoken arrangement was clear: The UAE and Saudi Arabia would pump millions into Washington’s political ecosystem while mouthing a belief in “reform,” and Washington would pretend to believe that they meant it.
MBS has won praise for some policies, like an openness to reconsidering Saudi Arabia’s ban on women drivers. Meanwhile, however, the 32-year-old MBS has been pursuing a dangerously impulsive and aggressive regional policy, which has included a heightening of tensions with Iran, a catastrophic war on Yemen, and a blockade of ostensible ally Qatar. Those regional policies have been disasters for the millions who have suffered the consequences, including the starving people of Yemen, as well as for Saudi Arabia, but MBS has dug in harder and harder. And his supporters in Washington have not blinked.
The platitudes about reform were also challenged by recent mass arrests of religious figures and repression of anything that has remotely approached less than full support of MBS. The latest purge comes just days after White House adviser Jared Kushner, a close ally of Otaiba, visited Riyadh, and just hours after a bizarre-even-for-Trump tweet. Whatever legitimate debate there was about MBS ended Saturday — his drive to consolidate power is now too obvious to ignore. And that puts denizens of Washington’s think tank world in a difficult spot, as they have come to rely heavily on the Saudi and UAE end of the bargain.
As The Intercept reported earlier, one think tank alone, the Middle East Institute, got a massive $20 million commitment from the UAE. And make no mistake, MBS is a project of the UAE — an odd turn of events given the relative sizes of the two countries. “Our relationship with them is based on strategic depth, shared interests, and most importantly the hope that we could influence them. Not the other way around,” Otaiba has said privately.
The kingdom’s broke. Not today, or tomorrow morning, but crown prince MBS is able to look at the numbers and go: Oh Shit! And if he doesn’t see it, he has Kushner (re: Israel) and Al-Otaiba to fill him in. All three relative youngsters -MBS is 32, Kushner is 36, Otaiba is 43- are exceedingly nervous by now.
And then you get war, or the threat of war. War in Yemen, a blockade of Qatar, and now ‘mingling’ in Lebanon with the somewhat mysterious removal of billionaire PM Hariri -allegedly on an Iran/Hezbollah assassination plot-, and outright threats against Iran and Hezbollah:
Lebanon’s Hariri Visits UAE As Home Crisis Escalates
Lebanon’s outgoing prime minister, Saad al-Hariri, made a brief visit to the United Arab Emirates from Saudi Arabia on Tuesday despite a deepening crisis back home and a rise in regional tensions triggered by his surprise resignation. Hariri announced his resignation on Saturday during a visit to his ally Saudi Arabia and has not yet returned to Lebanon. He said he believed there was an assassination plot against him and accused Iran, Saudi Arabia’s arch-rival, and its Lebanese ally Hezbollah of sowing strife in the Arab world.
His resignation has thrust Lebanon back into the frontline of the regional rivalry that pits a mostly Sunni bloc led by Saudi Arabia and allied Gulf monarchies against Shi‘ite Iran and its allies. Hariri’s office said he had flown to Abu Dhabi on Tuesday and then returned to Riyadh, but it gave no reason for the trip. It also did not say when he would return home. Hariri’s Future TV channel said he would also visit Bahrain but gave no reason.
In short: billionaire PM Hariri is a puppet. Just perhaps not of Saudi Arabia, but of Abu Dhabi. Whether he’s under house arrest in Riyadh, as has been suggested, is still unclear. But it’s a safe bet that he didn’t fly to Abu Dhabi -and back- alone, or of his own accord. He went to receive instructions.
Saudi Arabia Accuses Iran Of ‘Direct Military Aggression’ Over Yemen Missile
Saudi Arabia’s crown prince has accused Iran of “direct military aggression” by supplying missiles to Houthi rebels in Yemen, raising the stakes in an already tense standoff between the two regional rivals. Mohammed bin Salman linked Tehran to the launch of a ballistic missile fired from Yemen towards the international airport in the Saudi capital of Riyadh on Saturday. The missile was intercepted and destroyed.
“The involvement of the Iranian regime in supplying its Houthi militias with missiles is considered a direct military aggression by the Iranian regime,” the prince said on Tuesday during a phone conversation with the UK foreign secretary, Boris Johnson, according to the state-run Saudi Press Agency. He added that the move “may be considered an act of war against the kingdom”. Iran has called Riyadh’s accusations as baseless and provocative.
We have no way of knowing what is true or not about this. We do know that Saudi Arabia have been executing a barbaric war in Yemen. With weapons from the US, UK, et al. So someone firing back wouldn’t be that far-fetched.
Regardless, Pepe Escobar, a journalist who knows much more than his peers, or at least doesn’t hold back as much as them, doesn’t see this end well for MBS, UAE, Israel, US, and whoever else is in their corner. Another losing war for the US in the Middle East? We’re losing count.
The Inside Story Of The Saudi Night Of Long Knives
A top Middle East business/investment source who has been doing deals for decades with the opaque House of Saud offers much-needed perspective: “This is more serious than it appears. The arrest of the two sons of previous King Abdullah, Princes Miteb and Turki, was a fatal mistake. This now endangers the King himself. It was only the regard for the King that protected MBS. There are many left in the army against MBS and they are enraged at the arrest of their commanders.” To say the Saudi Arabian Army is in uproar is an understatement. “He’d have to arrest the whole army before he could feel secure.”
[..] The story starts with secret deliberations in 2014 about a possible “removal” of then King Abdullah. But “the dissolution of the royal family would lead to the breaking apart of tribal loyalties and the country splitting into three parts. It would be more difficult to secure the oil, and the broken institutions whatever they were should be maintained to avoid chaos.” Instead, a decision was reached to get rid of Prince Bandar bin Sultan – then actively coddling Salafi-jihadis in Syria – and replace the control of the security apparatus with Mohammed bin Nayef. The succession of Abdullah proceeded smoothly.
Power was shared between three main clans: King Salman (and his beloved son Prince Mohammed); the son of Prince Nayef (the other Prince Mohammed), and finally the son of the dead king (Prince Miteb, commander of the National Guard). In practice, Salman let MBS run the show. And, in practice, blunders also followed. The House of Saud lost its lethal regime-change drive in Syria and is bogged down in an unwinnable war on Yemen, which on top of it prevents MBS from exploiting the Empty Quarter – the desert straddling both nations. The Saudi Treasury was forced to borrow on the international markets. Austerity ruled …
[..] aversion to MBS never ceased to grow; “There are three major royal family groups aligning against the present rulers: the family of former King Abdullah, the family of former King Fahd, and the family of former Crown Prince Nayef.” Nayef – who replaced Bandar – is close to Washington and extremely popular in Langley due to his counter-terrorism activities. His arrest earlier this year angered the CIA and quite a few factions of the House of Saud – as it was interpreted as MBS forcing his hand in the power struggle. According to the source, “he might have gotten away with the arrest of CIA favorite Mohammed bin Nayef if he smoothed it over but MBS has now crossed the Rubicon though he is no Caesar. The CIA regards him as totally worthless.”
[..] The source, though, is adamant; “There will be regime change in the near future, and the only reason that it has not happened already is because the old King is liked among his family. It is possible that there may be a struggle emanating from the military as during the days of King Farouk, and we may have a ruler arise that is not friendly to the United States.”
In the end, it all comes down to a familiar theme: follow the money. And we need to seriously question the economic reality of Saudi Arabia. That graph above of their foreign reserves looks downright grim.
With money comes power. Who loses money loses power. Saudi Arabia is bleeding money. The population surge is uncanny, and there are no jobs for all these young people. Perhaps the best they can do is be a US/Israel puppet in an attempt to ‘redo’ the map of the Middle East, but that has not been a very successful project off late -like the past 100 years-.
Then again, when you’re desperate you do desperate things. And when you’re a 32-year-old crown prince with more enemies than you can keep track of, you use what money is left to 1) keep up appearances, 2) steal what others have gathered, 3) buy weapons up the wazoo, and 4) go to war.
It all paints a very dark picture for the world.
Russia won’t stand for attacks on Iran. And Iran won’t let attacks on Lebanon/Hezbollah go unanswered. All that is set to push up oil prices further, and all parties involved are just fine with that. Because they can buy more weapons with the additional profits.
I’ll leave you with Nassim Taleb’s comments on the situation. After all, Nassim’s from Lebanon, and knows that part of the world like the back of his hand:
END
Intermission
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GYS_DANCE_Hanine - Arabia
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Venezuela Just 24 Hours Away From Formal Declaration Of Default
Less than a week after Venezuela shocked the world by announcing it would proceed to restructure its massive external debt, even as it was within the grace period on hundreds of millions in unpaid interest expense, on Thursday the socialist nation confirmed it has never been closer to an official default after Reuters reported that Venezuela’s state oil-firm company, PDVSA, has not made a debt payments to India’s top oil producer ONGC for six months, and has previously used a Russian state-owned bank and another Indian energy company as intermediaries to make payments.
Reuters sources noted that PDVSA has made no payment since April on what was a $540 million backlog of dividends owed to ONGC for an investment the Indian firm made in a an energy project in Venezuela. Venezuela’s President Nicolas Maduro said last week that the country planned to restructure some $60 billion of bonds, much of it held by PDVSA, as the country struggles to meet debt repayments.
While ONGC Videsh – the overseas investment arm of ONGC confirmed to Reuters that PDVSA had fallen behind on the payments, but declined to give details on the delays.
Curiously, the Indian company appears not to be overly concerned about non-payment for half a year, and instead was willing to keep giving Maduro the benefit of the doubt: “They have got certain challenges at this stage,” ONGC Videsh said in an emailed response to Reuters’ questions. “They have assured that they are working on it (payment of dues). In due course it will be settled and follow up steps will be undertaken.” And just to underscore that it has no intention of pushing Venezuela into involuntary bankruptcy, ONGC added that “we have a good working relationship with PDVSA.”
And while we commend India’s camaraderie, Venezuela may be declared insolvent as soon as Friday morning. According to the FT reports that despite promises to the contrary from Caracas, PDVSA did not in fact make a $1.1 billion payment which was due last Friday, and while some bondholders said they expected the money to arrive soon, others pointed out that the payment deadline had clearly been missed regardless.
“There has been no official communication on the payment delays. It is really odd that funds haven’t been received with sufficient time to process if the funds were sent last week as officials indicated,” said Siobhan Morden, head of Latin American bond strategy at Nomura.
As a result, an official declaration of default may be imminent: according to Bloomberg, ISDA has agreed to review a request to determine whether an event of default has occurred due to delayed principal payments on the Petroleos de Venezuela SA bond that matured Nov. 2. The ISDA Determinations Committee will hold its first meeting regarding PDVSA at 11am on Friday, November 10, although at this point the decision is trivial: the 5 year implied probability of a PDVSA default climbed to 99.99% on Wednesday from 93.25% a year ago, according to credit-default swaps data compiled by Bloomberg.
“We’re not sure when or how long this will take, but we wouldn’t expect it to take too long,” noted Stuart Culverhouse, chief economist at Exotix. “It might be possible to argue that Venezuela made the payment but this was not transferred to holders because of problems in the payment chain, although CDS were triggered in Argentina in 2014 in a similar situation.”
In anticipation of the default, international banks and suppliers have reduced, and in most cases halted, credit to PDVSA since cash flow problems led the firm to start delaying payments to creditors in 2014. U.S. sanctions against Venezuelan officials including PDVSA executives, have also deterred banks from offering credit.
* * *
With all that said, the saga of Venezuela’s constant “pre-default” state is clearly coming to a close: in addition to the ISDA meeting tomorrow, on Monday, Nov. 13, a bond restructuring meeting is set to take place between the nation and its creditors which however is expected to yield little; in fact US investors will be wary of even attending, given that the person leading the Venezuelan side of the talks, vice-president Tareck El Aissami, has been sanctioned by the US Treasury as an alleged drug smuggler.
Investors had previously said that the potential presence of sanctioned Venezuelan officials in that meeting has raised concerns that joining it could violate sanctions, although Venezuela has promised that no sanctioned personnel would be present.
Investors have valid reason for concern: as Bloomberg reported earlier this week, lead Venezuela debt negotiator is Vice President Tareck El Aissami: he was sanctioned by the U.S. Treasury Department this year after accusations he oversaw a cocaine-smuggling network, and remains one of the nation’s iron-fisted political operatives.
Often in charge of delivering President Nicolas Maduro’s most critical messages, he blasts critics publicly, exposing supposed conspiracy rings and threatening legal action against dissident leaders from National Assembly President Julio Borges to Luisa Ortega, the public-prosecutor-turned-whistle-blower.
And now, Tareck is in charge of convincing bondholders to accept haircuts voluntarily, or as Bloomberg puts it, “of a delicate financial dance in which investors and funds risk running afoul of the U.S. Office of Foreign Assets. Not only do U.S. sanctions prohibit Americans from receiving new bonds that Venezuela would hand them as part of a restructuring, but El Aissami is designated as a narcotics trafficker under the Kingpin Act. American corporate officers dealing with him run the risk of fines and prosecution of as much as $5 million and 30 years in prison.”
“Nobody will want to go near something that could be an OFAC violation,” said Robert Koenigsberger, chief investment officer at Gramercy Funds Management, which dumped its Venezuela debt a year ago. “If the Venezuelans say, ‘We want to talk over the restructuring with you,’ I’d say, ‘I’m not letting you in the building.’ I like sleeping in my own bed at night.”
Which means that for those following the Venezuela default drama, next week could be especially exciting.
END
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings THURSDAY morning 7:00 am
Euro/USA 1.1634 UP .0039/ REACTING TO SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES RED
USA/JAPAN YEN 113.35 DOWN 0.562(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/
GBP/USA 1.3127 UP .0017 (Brexit March 29/ 2017/ARTICLE 50 SIGNED
THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/
USA/CAN 1.2695 DOWN .0033(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS THURSDAY morning in Europe, the Euro ROSE by 39 basis points, trading now ABOVE the important 1.08 level RISING to 1.1634; / Last night the Shanghai composite CLOSED UP 12.34 POINTS OR .36% / Hang Sang CLOSED UP 228.97 POINTS OR 0.79% /AUSTRALIA CLOSED UP 0.55% / EUROPEAN BOURSES OPENED RED
The NIKKEI: this TUESDAY morning CLOSED DOWN 45.11 POINTS OR .20%
Trading from Europe and Asia:
1. Europe stocks OPENED RED
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 228.97 POINTS OR 0.78% / SHANGHAI CLOSED UP 12.34 POINTS OR .36% /Australia BOURSE CLOSED UP 0.55% /Nikkei (Japan)CLOSED DOWN 45.11 POINTS OR 0.20%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1286.75
silver:$17.11
Early THURSDAY morning USA 10 year bond yield: 2.3334% !!! UP 1 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)
The 30 yr bond yield 2.805 UP 1 IN BASIS POINTS from WEDNESDAY night. (POLICY FED ERROR)
USA dollar index early THURSDAY morning: 94.56 DOWN 30 CENT(S) from YESTERDAY’s close.
This ends early morning numbers THURSDAY MORNING
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And now your closing THURSDAY NUMBERS \1 PM
Portuguese 10 year bond yield: 2.045% UP 4 in basis point(s) yield from WEDNESDAY
JAPANESE BOND YIELD: +.03% UP 1/2 in basis point yield from WEDNESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.533% UP 5 IN basis point yield from WEDNESDAY
ITALIAN 10 YR BOND YIELD: 1.816 UP 6 POINTS in basis point yield from WEDNESDAY
the Italian 10 yr bond yield is trading 29 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.375% UP 5 IN BASIS POINTS ON THE DAY
END
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IMPORTANT CURRENCY CLOSES FOR THURSDAY
Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1645 UP ,0049 (Euro UP49 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 113.31 DOWN 0.603(Yen UP 60 basis points/
Great Britain/USA 1.3135 UP 0.0024( POUND UP 34 BASIS POINTS)
USA/Canada 1.2693 DOWN.0034 Canadian dollar UP 34 Basis points AS OIL ROSE TO $57.16
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This afternoon, the Euro was UP 49 to trade at 1.1645
The Yen ROSE to 113.31 for a GAIN of 60 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE
The POUND ROSE BY 24 basis points, trading at 1.3131/
The Canadian dollar ROSE by 34 basis points to 1.2694 WITH WTI OIL RISING TO : $57.16
The USA/Yuan closed AT 6.640
the 10 yr Japanese bond yield closed at +.030% UP 1/2 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 1 IN basis points from WEDNESDAY at 2.326% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.806 UP 3 in basis points on the day /
Your closing USA dollar index, 94.54 DOWN 33 CENT(S) ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for THURSDAY: 1:00 PM EST
London: CLOSED DOWN 45.62 POINTS OR 0.61%
German Dax :CLOSED DOWN 199.86 POINTS OR 1.49%
Paris Cac CLOSED DOWN 63.68 POINTS OR 1.16%
Spain IBEX CLOSED DOWN 87.60 POINTS OR 0.86%
Italian MIB: CLOSED DOWN 189.99 POINTS OR 0.83%
The Dow closed DOWN 101.42 POINTS OR .43%
NASDAQ WAS closed DOWN 39.06 Points OR 0.58% 4.00 PM EST
WTI Oil price; 57.16 1:00 pm;
Brent Oil: 63.93 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 59.38 UP 15/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 15 BASIS PTS)
TODAY THE GERMAN YIELD RISES TO +.375% FOR THE 10 YR BOND 1.00 PM EST EST
END
This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM
Closing Price for Oil, 4:30 pm/and 10 year USA interest rate:
WTI CRUDE OIL PRICE 4:30 PM:$57.10
BRENT: $63.54
USA 10 YR BOND YIELD: 2.333% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.812%
EURO/USA DOLLAR CROSS: 1.1640 UP .0045
USA/JAPANESE YEN:113.44 up 0.481
USA DOLLAR INDEX: 94.53 DOWN 34 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.3148 : UP 36 POINTS FROM LAST NIGHT
Canadian dollar: 1.2674 UP 54 BASIS pts
German 10 yr bond yield at 5 pm: +0.375%
END
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Tax Tantrum Sparks Stock Slump As Credit Crash Continues
To the middle class…
“We’re not sure when or how long this will take, but we wouldn’t expect it to take too long,” noted Stuart Culverhouse, chief economist at Exotix. “It might be possible to argue that Venezuela made the payment but this was not transferred to holders because of problems in the payment chain, although CDS were triggered in Argentina in 2014 in a similar situation.”
In anticipation of the default, international banks and suppliers have reduced, and in most cases halted, credit to PDVSA since cash flow problems led the firm to start delaying payments to creditors in 2014. U.S. sanctions against Venezuelan officials including PDVSA executives, have also deterred banks from offering credit.
* * *
With all that said, the saga of Venezuela’s constant “pre-default” state is clearly coming to a close: in addition to the ISDA meeting tomorrow, on Monday, Nov. 13, a bond restructuring meeting is set to take place between the nation and its creditors which however is expected to yield little; in fact US investors will be wary of even attending, given that the person leading the Venezuelan side of the talks, vice-president Tareck El Aissami, has been sanctioned by the US Treasury as an alleged drug smuggler.
Investors had previously said that the potential presence of sanctioned Venezuelan officials in that meeting has raised concerns that joining it could violate sanctions, although Venezuela has promised that no sanctioned personnel would be present.
Investors have valid reason for concern: as Bloomberg reported earlier this week, lead Venezuela debt negotiator is Vice President Tareck El Aissami: he was sanctioned by the U.S. Treasury Department this year after accusations he oversaw a cocaine-smuggling network, and remains one of the nation’s iron-fisted political operatives.
Often in charge of delivering President Nicolas Maduro’s most critical messages, he blasts critics publicly, exposing supposed conspiracy rings and threatening legal action against dissident leaders from National Assembly President Julio Borges to Luisa Ortega, the public-prosecutor-turned-whistle-blower.
And now, Tareck is in charge of convincing bondholders to accept haircuts voluntarily, or as Bloomberg puts it, “of a delicate financial dance in which investors and funds risk running afoul of the U.S. Office of Foreign Assets. Not only do U.S. sanctions prohibit Americans from receiving new bonds that Venezuela would hand them as part of a restructuring, but El Aissami is designated as a narcotics trafficker under the Kingpin Act. American corporate officers dealing with him run the risk of fines and prosecution of as much as $5 million and 30 years in prison.”
“Nobody will want to go near something that could be an OFAC violation,” said Robert Koenigsberger, chief investment officer at Gramercy Funds Management, which dumped its Venezuela debt a year ago. “If the Venezuelans say, ‘We want to talk over the restructuring with you,’ I’d say, ‘I’m not letting you in the building.’ I like sleeping in my own bed at night.”
Which means that for those following the Venezuela default drama, next week could be especially exciting.
END
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings THURSDAY morning 7:00 am
Euro/USA 1.1634 UP .0039/ REACTING TO SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES RED
USA/JAPAN YEN 113.35 DOWN 0.562(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/
GBP/USA 1.3127 UP .0017 (Brexit March 29/ 2017/ARTICLE 50 SIGNED
THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/
USA/CAN 1.2695 DOWN .0033(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS THURSDAY morning in Europe, the Euro ROSE by 39 basis points, trading now ABOVE the important 1.08 level RISING to 1.1634; / Last night the Shanghai composite CLOSED UP 12.34 POINTS OR .36% / Hang Sang CLOSED UP 228.97 POINTS OR 0.79% /AUSTRALIA CLOSED UP 0.55% / EUROPEAN BOURSES OPENED RED
The NIKKEI: this TUESDAY morning CLOSED DOWN 45.11 POINTS OR .20%
Trading from Europe and Asia:
1. Europe stocks OPENED RED
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 228.97 POINTS OR 0.78% / SHANGHAI CLOSED UP 12.34 POINTS OR .36% /Australia BOURSE CLOSED UP 0.55% /Nikkei (Japan)CLOSED DOWN 45.11 POINTS OR 0.20%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1286.75
silver:$17.11
Early THURSDAY morning USA 10 year bond yield: 2.3334% !!! UP 1 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)
The 30 yr bond yield 2.805 UP 1 IN BASIS POINTS from WEDNESDAY night. (POLICY FED ERROR)
USA dollar index early THURSDAY morning: 94.56 DOWN 30 CENT(S) from YESTERDAY’s close.
This ends early morning numbers THURSDAY MORNING
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And now your closing THURSDAY NUMBERS \1 PM
Portuguese 10 year bond yield: 2.045% UP 4 in basis point(s) yield from WEDNESDAY
JAPANESE BOND YIELD: +.03% UP 1/2 in basis point yield from WEDNESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.533% UP 5 IN basis point yield from WEDNESDAY
ITALIAN 10 YR BOND YIELD: 1.816 UP 6 POINTS in basis point yield from WEDNESDAY
the Italian 10 yr bond yield is trading 29 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.375% UP 5 IN BASIS POINTS ON THE DAY
END
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IMPORTANT CURRENCY CLOSES FOR THURSDAY
Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1645 UP ,0049 (Euro UP49 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 113.31 DOWN 0.603(Yen UP 60 basis points/
Great Britain/USA 1.3135 UP 0.0024( POUND UP 34 BASIS POINTS)
USA/Canada 1.2693 DOWN.0034 Canadian dollar UP 34 Basis points AS OIL ROSE TO $57.16
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This afternoon, the Euro was UP 49 to trade at 1.1645
The Yen ROSE to 113.31 for a GAIN of 60 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE
The POUND ROSE BY 24 basis points, trading at 1.3131/
The Canadian dollar ROSE by 34 basis points to 1.2694 WITH WTI OIL RISING TO : $57.16
The USA/Yuan closed AT 6.640
the 10 yr Japanese bond yield closed at +.030% UP 1/2 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 1 IN basis points from WEDNESDAY at 2.326% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.806 UP 3 in basis points on the day /
Your closing USA dollar index, 94.54 DOWN 33 CENT(S) ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for THURSDAY: 1:00 PM EST
London: CLOSED DOWN 45.62 POINTS OR 0.61%
German Dax :CLOSED DOWN 199.86 POINTS OR 1.49%
Paris Cac CLOSED DOWN 63.68 POINTS OR 1.16%
Spain IBEX CLOSED DOWN 87.60 POINTS OR 0.86%
Italian MIB: CLOSED DOWN 189.99 POINTS OR 0.83%
The Dow closed DOWN 101.42 POINTS OR .43%
NASDAQ WAS closed DOWN 39.06 Points OR 0.58% 4.00 PM EST
WTI Oil price; 57.16 1:00 pm;
Brent Oil: 63.93 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 59.38 UP 15/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 15 BASIS PTS)
TODAY THE GERMAN YIELD RISES TO +.375% FOR THE 10 YR BOND 1.00 PM EST EST
END
This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM
Closing Price for Oil, 4:30 pm/and 10 year USA interest rate:
WTI CRUDE OIL PRICE 4:30 PM:$57.10
BRENT: $63.54
USA 10 YR BOND YIELD: 2.333% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.812%
EURO/USA DOLLAR CROSS: 1.1640 UP .0045
USA/JAPANESE YEN:113.44 up 0.481
USA DOLLAR INDEX: 94.53 DOWN 34 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.3148 : UP 36 POINTS FROM LAST NIGHT
Canadian dollar: 1.2674 UP 54 BASIS pts
German 10 yr bond yield at 5 pm: +0.375%
END
TRADING IN GRAPH FORM FOR THE DAY
Stocks Tumble On News Senate Tax Plan To Delay Corporate Tax Cut Until 2019
Confirming reports from earlier this week that the Senate GOP tax plan would delay the corporate tax cut for (at least) one year, a move that would strip the proposed tax reform of its most potent benefit, moments ago the Wapo reported that in a few hours, Senate Republicans will propose delaying a cut in the corporate tax rate from 35 percent to 20 percent until 2019. Bloomberg confirmed the news, quoting Bill Cassidy who said in an interview that that Senate Finance Committee tax legislation proposal will include a one-year delay before cutting the corporate tax rate to 20%.
The compromise would be a major departure from President Trump’s insistence on immediate changes that he says “are necessary to spur the economy.” And while some Senate Republicans objected to the one year delay, they were overruled.
As Bloomberg adds, the Senate tax writers will also propose keeping number of individual income-tax brackets at seven in a departure from the House bill that condenses the number to four, Sen. Bill Cassidy tells reporters. Cassidy also says Senate proposal won’t keep top rate at 39.6%, though doesn’t state what new top individual rate would be
In an attempt to offset the delayed economic boost from excess corporate spending, the WaPo explains that to prevent companies from waiting until 2019 to invest, “Senate Republicans will propose to allow companies to immediately deduct all capital investments in 2018 to incentivize them to spend more money immediately, the people said.”
The reason for the delay is simple: there is not enough revenue. “The one-year delay would lower the cost of the tax cut bill by more than $100 billion, and negotiators are trying to preserve as much revenue as they can for other changes.” The revision could also delay decisions by companies to move back to the United States from overseas or have companies hold off on other decisions as they wait for the corporate rate to fall.
As we have explained previously, the Senate approach is different than House Republicans are taking as it is limited by practical considerations: while the House is advancing a bill that would lower the corporate tax rate in 2018, they are also having problems dealing with the total cost of their bill, which has ballooned beyond the $1.5 trillion price tag they were permitted under budget rules.
And while Treasury Secretary Steven Mnuchin told Bloomberg yesterday that the White House’s “strong preference” would be for the tax cut to go into effect next year, the White House is not expected to threaten blocking the bill over this change.
In other words, despite the various teasers how the 1 year delay is immaterial, the biggest boost to the economy from the Senate’s tax bill is about to be eliminated. The result was immediate, with stocks dumping and the VIX spiking.
end
The Republican tax plan will absolutely crush the housing market in sectors like San Francisco, San Jose, Seattle, NY and other major centres
(courtesy zerohedge)
The Republican Tax Plan Will Crush These Housing Markets
For the past few weeks, Chuck Schumer and Nancy Pelosi have screamed to anyone who would listen that the GOP tax plan is nothing more than a tax break for millionaires and an attack on middle class working families. But, as the Wall Street Journal points out this morning, America’s millionaire, billionaire, private jet owners living in expensive urban areas are set to lose ‘bigly’ if Trump’s $500,000 cap on the mortgage interest deduction survives.
But in the priciest markets, concentrated in some of the nation’s largest coastal cities, the impact could be significant. In the San Jose, Calif., metropolitan area, 75% of new mortgage loans thus far in 2017 were for more than $500,000, according to an analysis by CoreLogic Inc., a housing data provider. The median home price there is more than $1 million, and even small starter homes can climb well above the proposed cap.
In the San Francisco metro area, 60% of new loans were for more than $500,000, while in Los Angeles and San Diego, the figures were 44% and 37%, respectively.
The impact wouldn’t be limited to California. In Honolulu, 48% of loans were greater than $500,000, while the figures for the New York area and Seattle were 22% and 25%, respectively.
An analysis by ATTOM Data Solutions yielded similar results. In the Washington, D.C., area, 35% of purchase and refinance loans in 2017 thus far were for more than $500,000. In Hawaii, 15% of loans fell into that category, while in California 12% did.
In addition to capping the mortgage interest deduction, the current GOP bill also limits the amount of property taxes that households can deduct to $10,000 annually.
Not surprisingly, the assault on McMansions has angered the realtor lobby which we’re certain will fight tooth and nail to preserve the status quo.
Jeff Barnett, a California realtor and vice chairman of the National Association of Realtors’ large-firm real-estate services committee, said his area will be hit “very, very hard” if the tax bill passes. Even if corporate tax cuts help boost the economy, he doesn’t think that will be enough to compensate.
“You’ve taken away so many incentives for housing, they can’t spend” the money from any extra economic growth, he said.
Of course, as we pointed out earlier this week (see: Trump Is About To Crush Home Prices In Counties That Voted For Hillary: Here’s Why),Clinton won the vote in the top 45 counties in the country with the highest median home prices which has resulted in rampant speculation that the mortgage cap is nothing more than a clever punishment levied on Democratic voters.
As Dennis Lee calculated, “assuming that all of these homeowners are taxed at a marginal rate of 39.6%, we find that the increase in tax burden during the first 12 months of homeownership driven solely by the mortgage interest and property tax deduction caps varies from $0 for the county with the 20th highest median home price (San Miguel County, Colorado) to approximately $7,200 for the highest-priced county (San Francisco County, California).” Barclays’ conclusion: these counties – all of which are largely pro-Clinton – would need a 0-11% decline in their median home prices to keep the after-tax monthly mortgage and property tax payments the same for would-be buyers.
Of course, only time will tell whether the swamp (a.k.a. “The National Association of Realtors” in this case) will allow this particular component of the GOP tax bill to survive…
END
https://www.silverdoctors.com/tag/harvey-organ/
I see you made it to the end of this gig
Well
We don't want to leave you with a empty stomach
So come on in the cafe
Cheers & Thanks everybody
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Now Serving "Scotch Eggs Brunch" under the Gallows"
Welcome to the Graveyard Gallows Cafe.
Please have a seat kick back and enJoy the pickings from the graveyard.
GYS_Dine
Have a Most Wonderful day !
and
Ya'all come Back Now !
.jpg)
MMgys
Good Morning
Nov 9/GOLD WITHSTANDS ANOTHER ATTACK FROM THE BANKERS AS IT RISES BY $3.25/SILVER HOWEVER DOWN 11 CENTS/NIKKEI SWOONS 800 POINTS BEFORE BEING RESCUED BY THEIR PPT/SAUDI ARABIA, KUWAIT AND UAE ALL THEIR CITIZENS TO LEAVE LEBANON IMMEDIATELY AS WAR SEEMS IMMINENT/
November 9, 2017 · by harvey organ · in Uncat
GOLD: $1287.00 UP $3.25
Silver: $17.00 DOWN 11 cents
Closing access prices:
Gold $1285.50
silver: $16.99
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1289.93 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1281.60
PREMIUM FIRST FIX: $8.33(premiums getting LARGER AGAIN)
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SECOND SHANGHAI GOLD FIX: $1293.60
NY GOLD PRICE AT THE EXACT SAME TIME: $1283.70
Premium of Shanghai 2nd fix/NY:$9.90 PREMIUMS GETTING LARGER AGAIN)
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LONDON FIRST GOLD FIX: 5:30 am est $1284.40
NY PRICING AT THE EXACT SAME TIME: $1283.95
LONDON SECOND GOLD FIX 10 AM: $1284.80
NY PRICING AT THE EXACT SAME TIME. 1284.60
For comex gold:
NOVEMBER/
NOTICES FILINGS TODAY FOR OCT CONTRACT MONTH: 2 NOTICE(S) FOR 200 OZ.
TOTAL NOTICES SO FAR: 975 FOR 97,500 OZ (3.032TONNES)
For silver:
NOVEMBER
5 NOTICE(S) FILED TODAY FOR
25,000 OZ/
Total number of notices filed so far this month: 869 for 4,345,000 oz
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Bitcoin: BID $7119 OFFER /$7149 DOWN $328.00 (MORNING)
BITCOIN CLOSING; BID $7192 OFFER: 7217 // DOWN $265.00
end
Let us have a look at the data for today
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In silver, the total open interest FELL BY A CONSIDERABLE 1386 contracts from 208,500 DOWN TO 201,944 DESPITE YESTERDAY’S TRADING IN WHICH SILVER ROSE BY A RATHER LARGE 16 CENTS. THIS TIME WE HAD OVER 1000 EFP’S ISSUED BY OUR BANKERS IN SILVER FOR DECEMBER DUE TO THEIR “EMERGENCY SITUATION” WHERE THEY DO NOT HAVE ENOUGH METAL TO SERVE UPON OUR LONGS. OUR LONGS AT THE COMEX RECEIVE A FIAT BONUS PLUS A DELIVERABLE PRODUCT AT A DIFFERENT EXCHANGE AND THAT NO DOUBT IS LONDON. THIS IS THE EARLIEST THAT I HAVE SEEN THAT EFP’S HAVE BEEN ISSUED FOR AN UPCOMING DELIVERY MONTH. GENERALLY IT IS GOLD THAT IS THE MEGA RECIPIENT OF EFP’S WITH SILVER MUCH SMALLER. SO NO DOUBT WE WILL SEE HUGE AMOUNTS OF EFP’S ISSUED WITHIN A WEEK OF FIRST DAY NOTICE.
RESULT: A GOOD SIZED DROP IN OI COMEX DESPITE THE CONSIDERABLE 16 CENT PRICE RISE. COMEX LONGS EXITED OUT OF THE COMEX WITH OVER 1000 EFP’S ISSUED FOR A DELIVERABLE CONTRACT OVER IN LONDON WITH A FIAT BONUS.
In ounces, the OI is still represented by just OVER 1 BILLION oz i.e. 1.009 BILLION TO BE EXACT or 144% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT OCT MONTH/ THEY FILED: 5 NOTICE(S) FOR 25,000 OZ OF SILVER
In gold, the open interest FELL BY A TINY 453 CONTRACTS DESPITE THE GOOD SIZED RISE IN PRICE OF GOLD ($8.35) WITH YESTERDAY’S TRADING . WE MAY HAVE HAD SOME MINOR BANKER SHORT COVERING IN GOLD. The new OI for the gold complex rests at 536,390. NEWBIE LONGS RE-ENTERED THE ARENA TO WHICH THE BANKERS DUTIFULLY SUPPLIED THE NECESSARY SHORT PAPER..OUR BANKERS WERE MAY HAVE BEEN SUCCESSFUL IN COVERING A TINY PORTION OF THEIR GOLD SHORTS.
NO EFP’S WERE ISSUED FOR THE DECEMB CONTRACT MONTH.
Result: A TINY SIZED DECREASE IN OI DESPITE THE RISE IN PRICE IN GOLD ($8.35). WE MAY HAVE HAD SOME BANK SHORT COVERING. WE CERTAINLY HAD NEWBIE LONGS RE-ENTERING THE GOLD COMEX AREA TO WHICH OUR BANKERS REGRETFULLY SUPPLIED THE NECESSARY SHORT PAPER.
we had: 2 notice(s) filed upon for 200 oz of gold.
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With respect to our two criminal funds, the GLD and the SLV:
GLD:
No changes in gold inventory at the GLD/
Inventory rests tonight: 843.09 tonnes.
SLV
TODAY WE HAD NO CHANGE IN SILVER INVENTORY AT THE SLV
INVENTORY RESTS AT 318.074 MILLION OZ
end
.
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver FELL BY A LARGE 1386 contracts from 208,500 DOWN TO 201,944 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) DESPITE THE CONSIDERABLE RISE IN SILVER PRICE (A GAIN OF 16 CENTS). OUR BANKERS USED THEIR EMERGENCY PROCEDURE OF OVER 1000 EFP’S FOR DECEMBER WHICH GIVES OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. THIS IS QUITE EARLY FOR THESE EFP ISSUANCE..USUALLY WE WITNESS THIS ONE WEEK PRIOR TO FIRST DAY NOTICE AND THIS CONTINUES RIGHT UP UNTIL FDN.
RESULT: A GOOD SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 16 CENT FALL IN PRICE (WITH RESPECT TO YESTERDAY’S TRADING). OUR BANKER FRIENDS ISSED OVER 1000 EFP’S WHICH GIVES COMEX LONG HOLDERS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.
(report Harvey)
.
2.a) The Shanghai and London gold fix report
(Harvey)
2 b) Gold/silver trading overnight Europe, Goldcore
(Mark O’Byrne/zerohedge
and in NY: Bloomberg
3. ASIAN AFFAIRS
i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 12.34 points or .36% /Hang Sang CLOSED UP 228.97 pts or 0.78% / The Nikkei closed DOWN 45.11 POINTS OR 0.20%/Australia’s all ordinaires CLOSED UP 0.55%/Chinese yuan (ONSHORE) closed DOWN at 6.6380/Oil DOWN to 56.88 dollars per barrel for WTI and 63.48 for Brent. Stocks in Europe OPENED RED . ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6380. OFFSHORE YUAN CLOSED WEAKER TO THE ONSHORE YUAN AT 6.6447 //ONSHORE YUAN WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO THE DOLLAR/. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS VERY HAPPY TODAY
3a)THAILAND/SOUTH KOREA/NORTH KOREA
i)North Korea//South Korea
b) REPORT ON JAPAN
Something snapped last night in Japan that saw a violent stock plunge only to be rescued by their plunge protection team
( zerohedge)
c) REPORT ON CHINA
4. EUROPEAN AFFAIRS
This may turn out to be very problematic for Draghi as there will not be enough Italian bonds for the ECB to purchase around their election time
( zerohedge)
ii)England/EU
Brexit talks going nowhere:
(courtesy zerohedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
i)A huge paper from Meijer on the situation inside Saudi Arabia and how its finances are bleeding faster than a speeding bullet. He outlines how Saudi Arabia is joining forces with the UAE with the help of Israel and the USA in the hope of replenishing its finances
a must read..
(courtesy Raul Meijer)
ii)As Israel and Saudi Arabia target Lebanon, here is a great commentary on the strength of Hezbollah’s military capabilities
( zerohedge)
iii)This should give you enough information that an attack on Lebanon from Saudi Arabia and Israel: Saudi Arabia outlaws travel to Lebanon effective immediately
iii b) one hour later: Kuwait also outlaws travel to Lebanon
( zerohedge)
iv)There are reports from Saudi Arabia that the Saudi King Salman will relinquish the throne to his son MBS
(courtesy zerohedge)
6 .GLOBAL ISSUES
7. OIL ISSUES
Satellite images reveal that the Saudis are storing much more oil than they claim
( zerohedge)
8. EMERGING MARKET
VENEZUELA
VENEZUELA is now 24 hours away from a formal default and that is when credit default swaps kick in and the underwriters will have to pay out huge sums. Also the guy handling the restructuring of the bonds is sanctioned by the USA and nobody is allowed to go near this guy. Next week should be lot of fun.
( zerohedge)
9. PHYSICAL MARKETS
i)Ethical behaviour by the Fed?
( Harrison/GATA)
ii)Will the rising trend for base metals and oil have a spill over effect for silver?
( Craig Hemke/TFMetals Report/Sprott)
iii)Dave Kranzler is spotting that something is different with respect to gold and silver trading
( Dave Kranzler/IRD/GATA)
10. USA stories which will influence the price of gold/silver
i)Early trading in the uSA as tax cut hopes fade:
( zerohedge)
ib)The markets tanked on news that the Senate tax plan is to delay the corporate tax cut until 2019
( zerohedge)
ii)Trump who is now in Beijing slams China for unfair trade despite praising XI. He blames China’s predecessors.
( zerohedge)
iii)The Republican tax plan will absolutely crush the housing market in sectors like San Francisco, San Jose, Seattle, NY and other major centres
( zerohedge)
iv)Now Federal prosecutors are leaning on estranged son in law of Paul Manafort to turn on him( zerohedge)
Let us head over to the comex:
The total gold comex open interest SURPRISINGLY ROSE BY A LESS THAN EXPECTED 2234 CONTRACTS UP to an OI level of 537,077 WITH THE GOOD SIZED RISE IN THE PRICE OF GOLD ($8.35 RISE IN YESTERDAY’S TRADING). SOME NEWBIE LONGS AGAIN ENTERED THE GOLD ARENA WITH THE BANKERS REGRETTABLY SUPPLYING THE NECESSARY PAPER AS THEY COVERED ZERO AMOUNT OF THEIR HUGE SHORTFALL.
NO EFP’S WERE ISSUED FOR DECEMBER IN GOLD YESTERDAY.
Result: a SURPRISE TINY DECREASE IN OPEN INTEREST DESPITE THE CONSIDERABLE RISE IN THE PRICE OF GOLD ($8.35.) WE MAY HAVE HAD A SMALL AMOUNT OF BANKER SHORT COVERING. NEWBIE LONGS AGAIN ENTERED THE GOLD ARENA EMBOLDENED DUE TO GLOBAL TENSIONS ESPECIALLY IN SAUDI ARABIA. OUR BANKER FRIENDS REGRETTABLY HAD TO SUPPLY THE NECESSARY SHORT PAPER AS THEY WERE TOTALLY UNSUCCESSFUL IN THEIR ATTEMPT TO COVER ANY GOLD SHORTS.
.
We have now entered the NON active contract month of NOVEMBER.HERE WE HAD A LOSS OF 7 CONTRACT(S) DOWN TO 84. We had 7 notices filed YESTERDAY so gained 0 contracts or NIL additional oz will stand for delivery in this non active month of November. TO SEE BOTH GOLD AND SILVER RISE IN AMOUNT STANDING (QUEUE JUMPING) IS A GOOD INDICATOR OF PHYSICAL SHORTNESS FOR BOTH OF OUR PRECIOUS METALS.
The very big active December contract month saw it’s OI LOSE 8,599 contracts DOWN to 336,924. January saw its open interest rise by 35 contracts up to 624. FEBRUARY saw a gain of 5672 contacts up to 131,069.
.
We had 2 notice(s) filed upon today for 200 oz
VOLUME FOR TODAY (PRELIMINARY) 199.247
CONFIRMED VOLUME YESTERDAY: 392,938
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And now for the wild silver comex results. Total silver OI FELL BY a CONSIDERABLE 1386 CONTRACTS FROM 208,500 DOWN TO 201,944 WITH YESTERDAY’S 16 CENT GAIN IN PRICE. WE HAD OVER 1000 EFP’S ISSUED FOR DECEMBER BY OUR BANKERS TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. THIS IS QUITE EARLY FOR THE ISSUANCE. USUALLY WE WITNESS THIS EVENT ONE WEEK PRIOR TO FIRST DAY NOTICE AND IT CONTINUES RIGHT UP TO FDN. IT SURE LOOKS LIKE THE COMEX HAS NO SILVER TO GIVE OUR LONGS AS THEY MUST TRANSFER THE OBLIGATION OVER TO LONDON.
The new front month of November saw its OI GAIN by 4 contracts and thus it stands at 7. We had 1 notice(s) served YESTERDAY so we gained 5 contracts or an additional 25,000 oz will stand in this non active month of November. After November we have the big active delivery month of December and here the OI FALL by 2,715 contracts DOWN to 128,489. January saw A GAIN OF 84 contracts RISING TO 829.
We had 5 notice(s) filed for 25,000 oz for the OCT. 2017 contract
INITIAL standings for NOVEMBER
Nov 9/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
49,312.120
oz
JPMORGAN
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz
nil oz
No of oz served (contracts) today
2 notice(s)
200 OZ
No of oz to be served (notices)
75 contracts
(7500 oz)
Total monthly oz gold served (contracts) so far this month
975 notices
97500 oz
3.032 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
Today we HAD 0 kilobar transaction(s)/
WE HAD nil DEALER DEPOSIT:
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 0 customer deposit(s):
total customer deposits nil oz
We had 1 customer withdrawal(s)
i) out of JPMorgan: 49,312.120 OZ
total customer withdrawals; 49,312.120 oz
we had 2 adjustment(s)
i) Out of Brinks: 9,772.805 oz was removed from the dealer and this landed into the customer account of Brinks
ii) Out of JPMorgan: 16,735.244 oz was removed from the dealer and this landed into the customer accoun tof JPMorgan.
For NOVEMBER:
Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 2 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.
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To calculate the INITIAL total number of gold ounces standing for the NOVEMBER. contract month, we take the total number of notices filed so far for the month (975) x 100 oz or 97500 oz, to which we add the difference between the open interest for the front month of NOV. (77 contracts) minus the number of notices served upon today (2 x 100 oz per contract equals 105,000 oz, the number of ounces standing in this NON active month of NOV
Thus the INITIAL standings for gold for the NOVEMBER contract month:
No of notices served (975) x 100 oz or ounces + {(77)OI for the front month minus the number of notices served upon today (2) x 100 oz which equals 105,000 oz standing in this active delivery month of NOVEMBER (3.265 tonnes)
WE GAINED 0 ADDITIONAL CONTRACTS OR NIL OZ OF ADDITIONAL GOLD STANDING FOR METAL AT THE COMEX
THIS IS THE FIRST TIME EVER THAT WE HAVE WITNESSED CONSIDERABLE QUEUE JUMPING IN GOLD AT THE COMEX. SILVER’S QUEUE JUMPING STARTED IN MAY 2017 AND HAS NOT LET UP ONCE COMMENCED.
.
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Total dealer inventory 527,069.052 or 16.394 tonnes (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,722,165.167 or 271.29 tonnes
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process and are being used in the raiding of gold!
The gold comex is an absolute fraud. The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction. This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
IN THE LAST 14 MONTHS 84 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE NOVEMBER DELIVERY MONTH
NOVEMBER INITIAL standings
Nov 9/ 2017
Silver Ounces
Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory
12,973.634 oz
Delaware
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
204,983.25
Scotia
oz
No of oz served today (contracts)
5 CONTRACT(S)
(25,000,OZ)
No of oz to be served (notices)
2 contract
(10,000 oz)
Total monthly oz silver served (contracts) 869 contracts
(4,345,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month NIL oz
Total accumulative withdrawal of silver from the Customer inventory this month xx oz
today, we had 0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 1 customer withdrawal(s):
i) Out of Delaware: 12,973.634 oz
TOTAL CUSTOMER WITHDRAWAL 12,973.634 oz
We had 1 Customer deposit(s):
i) Into Scotia:
204,983.25 oz
***deposits into JPMorgan have stopped again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: 204,983.25 oz
we had 0 adjustment(s)
The total number of notices filed today for the NOVEMBER. contract month is represented by 5 contracts FOR 25,000 oz. To calculate the number of silver ounces that will stand for delivery in NOVEMBER., we take the total number of notices filed for the month so far at 869 x 5,000 oz = 4,345,0000 oz to which we add the difference between the open interest for the front month of NOV. (7) and the number of notices served upon today (5 x 5000 oz) equals the number of ounces standing.
.
Thus the INITIAL standings for silver for the NOVEMBER contract month: 869 (notices served so far)x 5000 oz + OI for front month of NOVEMBER(7) -number of notices served upon today (5)x 5000 oz equals 4,355,000 oz of silver standing for the NOVEMBER contract month. This is EXCELLENT for this NON active delivery month of November.
We gained 5 contracts or an additional 25,000 oz will stand for metal in the non active delivery month of November.
AS I MENTIONED ABOVE, WE HAVE BEEN WITNESSING QUEUE JUMPING IN SILVER FROM MAY 1 2017 ONWARD. IT IS NOW COMFORTING TO SEE CONSIDERABLE QUEUE JUMPING OCCURRING CONTINUALLY IN GOLD FOR THE FIRST TIME SINCE RECORDED TIME AT THE GOLD COMEX!!(1974). QUEUE JUMPING CAN ONLY OCCUR ON PHYSICAL METAL SHORTAGE.
ESTIMATED VOLUME FOR TODAY: NOT AVAILABLE
CONFIRMED VOLUME FOR YESTERDAY: 44,452 CONTRACTS
YESTERDAY’S CONFIRMED VOLUME OF 100,733 CONTRACTS EQUATES TO 503 MILLION OZ OR 71.9% OF ANNUAL GLOBAL PRODUCTION OF SILVER
Total dealer silver: 43.218 million
Total number of dealer and customer silver: 229.957 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end
NPV for Sprott and Central Fund of Canada
1. Central Fund of Canada: traded at Negative 2.2 percent to NAV usa funds and Negative 2.3% to NAV for Cdn funds!!!!
Percentage of fund in gold 62.3%
Percentage of fund in silver:37.5%
cash .+.3%( Nov 9/2017)
WILL UPDATE SPROTT NAV’S LATER TONIGHT
2. Sprott silver fund (PSLV): STOCK RISES TO -0.81% (Nov 9 /2017)
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.59% to NAV (Nov 9/2017 )
Note: Sprott silver trust back into NEGATIVE territory at -0.81%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.59%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada
(courtesy Sprott/GATA)
Sprott Inc. to take control of rival gold holder Central Fund of Canada
by THE CANADIAN PRESS
Posted Oct 2, 2017 8:43 am PDT
Last Updated Oct 2, 2017 at 9:20 am PDT
TORONTO – Sprott Inc. (TSX:SII) says it has struck a deal to take control of rival gold-holding firm Central Fund of Canada Ltd. (TSX:CEF.A) after a protracted takeover effort.
Toronto-based Sprott said Monday it will pay $120 million in cash and stock for Central Fund of Canada Ltd.’s common shares and for the right to administer and manage the fund’s assets.
The deal, which requires approval from Central Fund shareholders, would see its class A shareholders transferred to a new Sprott Physical Gold and Silver Trust.
Sprott says the deal would add $4.3 billion to its assets under management, which are focused largely on holding physical precious metals on behalf of clients, and 90,000 investors to its client base.
In March, Sprott tried to go through the Court of Queen’s Bench of Alberta to allow Central Fund’s class A shareholders to swap their shares to Sprott after the family that controls Central Fund rebuffed their attempt to make a deal.
Last year Sprott took over Central GoldTrust, a similar fund controlled by the same family, after securing support from more than 96 per cent of shareholder votes cast.
END
And now the Gold inventory at the GLD
Nov 9/no changes in inventory at the GLD/Inventory rests at 843.09 tonnes
NOV 8/ANOTHER HUGE WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD DESPITE GOLD’S RISE TODAY. INVENTORY RESTS AT 843.09
Nov 7/a huge withdrawal of 1.48 tonnes of gold from the GLD/Inventory rests at 844.27 tonnes
NOV 6/ a tiny withdrawal of .29 tonnes to pay for fees etc/inventory rests at 845.75 tonnes
Nov 3/no change in gold inventory at the GLD/Inventory rests at 846.04 tonnes
NOV 2/STRANGE!!! WE HAD ANOTHER WITHDRAWAL OF 3.55 TONNES FROM THE GLD DESPITE GOLD’S RISE OF $6.60 YESTERDAY AND $1.55 TODAY/INVENTORY RESTS AT 846.04 TONNES
Nov 1/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 849.59 tonnes
OCT 31/no change in gold inventory at the GLD/Inventory rests at 850.77 tonnes
Oct 30/STRANGE WITH GOLD UP THESE PAST TWO TRADING DAYS, THE GLD HAS A WITHDRAWAL OF 1.18 TONNES FROM ITS INVENTORY/INVENTORY RESTS AT 850.77 TONES
Oct 27/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 851.95 TONNES
Oct 26./A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 851.95 TONNES
Oct 25/NO CHANGE (SO FAR) IN GOLD INVENTORY/INVENTORY RESTS AT 853.13 TONNES
Oct 24./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes
OCT 23./NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 853.13 TONNES
OCT 20/NO CHANGE IN GOLD INVENTORY AT THE GLD/ INVENTORY REMAINS AT 853.13 TONNES
oCT 19/NO CHANGE/853.13 TONNES
Oct 18 /no change in gold inventory at the GLD/ inventory rests at 853.13 tonnes
Oct 17./no change in gold inventory at the GLD/inventory rests at 853.13 tonnes
Oct 16/A HUGE WITHDRAWAL OF 5.32 TONNES FROM THE GLD/INVENTORY RESTS AT 853.13 TONNES
0CT 13/ NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 12/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 9/ANOTHER DEPOSIT OF 4.43 TONNES INTO GLD/INVENTORY RESTS AT 858.45 TONNES
Oct 6/A DEPOSIT OF 2.96 TONNES OF GOLD INVENTORY INTO THE GLD/TONIGHT IT RESTS AT 854.02 TONNES
Oct 5/A LOSS OF 3.24 TONNES OF GOLD INVENTORY FROM THE GLD/INVENTORY RESTS AT 851.06 TONNES
Oct 4/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 854.30 TONNES
oCT 3/ A HUGE WITHDRAWAL OF 10.35 TONNES FROM THE GLD/INVENTORY RESTS AT 854.30 TONNES
Oct 2/STRANGE/WITH GOLD’S CONTINUAL WHACKING WE GOT A BIG FAT ZERO OZ LEAVING THE GLD/INVENTORY RESTS AT 864.65 TONNES
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Nov 9/2017/ Inventory rests tonight at 843.09 tonnes
*IN LAST 268 TRADING DAYS: 97.86 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 203 TRADING DAYS: A NET 59,42 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET 28.31 TONNES HAVE BEEN ADDED.
end
Now the SLV Inventory
Nov 9/no change in silver inventory at the SLV/inventory rests at 318.074 million oz.
NOV 8/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.074 MILLION OZ
Nov 7/a huge withdrawal of 944,000 oz from the SLV/inventory rests at 318.074 million oz/
NOV 6/no change in silver inventory at the SLV/Inventory rests at 319.018 million oz/
Nov 3/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS TONIGHT AT 319.018 MILLION OZ.
NOV 2/A TINY LOSS OF 137,000 OZ BUT THAT WAS TO PAY FOR FEES LIKE INSURANCE AND STORAGE/INVENTORY RESTS AT 319.018 MILLION OZ/
Nov 1/STRANGE! WITH SILVER’S HUGE 48 CENT GAIN WE HAD NO GAIN IN INVENTORY AT THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/
Oct 31/no change in silver inventory at the SLV/Inventory rests at 319.155 million oz
Oct 30/STRANGE!WITH SILVER UP THESE PAST TWO TRADING DAYS, WE HAD A HUGE WITHDRAWAL OF 1.133 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 319.155 MILLION OZ/
Oct 27/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ
Oct 26/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ/
Oct 25/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.288 MILLION OZ
Oct 24/no change in inventory at the SLV/inventory rests at 320.288 million oz/
oCT 23./STRANGE!!WITH SILVER RISING TODAY WE HAD A HUGE WITHDRAWAL OF 1.039 MILLION OZ/inventory rests at 320.288 million oz/
OCT 20NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.327 MILLION OZ
oCT 19/INVENTORY LOWERS TO 321.327 MILLION OZ
Oct 18 no change in silver inventory at the SLV/inventory rest at 322.271 million oz
Oct 17/ A MONSTROUS WITHDRAWAL OF 3.494 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 322.271 MILLION OZ
Oct 16/ NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 325.765 MILLION OZ
oCT 13/ NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ
Oct 12/THE LAST TWO DAYS WE LOST 1.113 MILLION OZ FROM THE SLV/INVENTORY RESTS AT 325.765 MILLION OZ
Oct 10/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ/
Oct 9/A HUGE DEPOSIT OF 1.227 MILLION OZ INTO THE INVENTORY OF THE SLV/INVENTORY RESTS AT 326.898 MILLION OZ
Oct 6/NO CHANGE IN SILVER INVENTORY/ INVENTORY RESTS AT 325.671 MILLON OZ
Oct 5/ANOTHER WITHDRAWAL OF 944,000 OZ FROM THE SLV/INVENTORY RESTS AT 325.671 MILLION OZ
OCT 4/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326.615 MILLION Z
Oct 3/A TINY WITHDRAWAL OF 143,000 FROM THE SLV FOR FEES/INVENTORY RESTS AT 326.615 MILLION OZ
Oct 2/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 326,757 MILLION OZ
Nov 9/2017:
Inventory 318.074 million oz
end
6 Month MM GOFO
Indicative gold forward offer rate for a 6 month duration
+ 1.49%
12 Month MM GOFO
+ 1.60%
30 day trend
end
Major gold/silver trading/commentaries for THURSDAY
GOLDCORE/BLOG/MARK O’BYRNE.
GOLD/SILVER
Prepare For Interest Rate Rises And Global Debt Bubble Collapse
By janskoylesNovember 9, 2017No Comments
– Diversify, rebalance investments and prepare for interest rate rises
– UK launches inquiry into household finances as £200bn debt pile looms
– Centuries of data forewarn of rapid reversal from ultra low interest rates
– 700-year average real interest rate in last 700 years is 4.78% (must see chart)
– Massive global debt bubble – over $217 trillion (see table)
– Global debt levels are building up to a gigantic tidal wave
– Move to safe haven higher ground from coming tidal wave
Editor: Mark O’Byrne
Last week, the Bank of England opted to increase interest rates for the first time in a decade. Since then alerts have been coming thick and fast for Britons warning them to prepare for some tough financial times ahead.
The UK government has launched an inquiry into household debt levels amid concerns of the impact of the Bank of England’s decision to raise rates. The tiny 0.25% rise means households on variable interest rate mortgages are expected to face about £1.8bn in additional interest payments whilst £465m more will be owed on the likes of credit cards, car loans and overdrafts.
The 0.25% rise is arguably not much given it comes against backdrop of record low rates and will have virtually no impact on any other rate. However it comes at a time of high domestic debt levels, no real wage growth and a global debt level of over $217 trillion.
Combined with low productivity across the developed world, experts are beginning to wonder how the financial system (and the individuals within) will cope.
After a decade of seeing negative real rates of interest many investors will be quietly celebrating that they may be about to see a turnaround for their savings. Many hope they will start being rewarded for their financial prudence as opposed to the punishing saving conditions of the last decade.
In reality this will not be the case, at least for some time. Savers and investors alike need to begin to prepare their portfolios for interest rate rises against a backdrop of crisis-triggering debt levels and unproductive economies.
Economies are junkies addicted to credit
Unsurprisingly, credit levels are equal to the increase in private debt every year. Credit is when people spend money that isn’t their own but instead borrow from banks. The bigger private debt levels are compared to a country’s GDP, the more the economy is dependent on credit.
Economic growth becomes addicted to credit. Therefore, the bigger the accumulated debt is when compared to GDP, the more likely it is an economic crisis will happen when credit levels are reduced.
An increase in interest rates means a decrease in credit levels. Especially in countries such as the US and UK where there has been no increase in real wage rates and there is a generation unprepared for an increase in the price of debt.
Consider the UK. When Mark Carney announced a decade-first increase in interest rates it was by a meagre 0.25%. Panic hit the newspapers; how would people with variable mortgages manage?
No one thought to ask, what are people who cannot manage a tiny increase in the cost of debt doing being allowed to borrow in the first place?
Currently debt-to-GDP ratios in the UK are not quite at pre-crisis or Great Depression levels. However they are fast approaching and they are at those levels globally. This combined with rising levels of interest rates makes for a tricky future and one that places savers and investors capital at risk.
700 year data forewarns of sudden interest rate turnaround
According to Bank of England guest blogger Paul Schmelzing as reported by Bloomberg the 700-year average real rate (the benchmark interest rates minus inflation) over the last 700 years (see chart at top) has been 4.78% and the average for the last two hundred years is 2.6%. Unsurprisingly he notes “the current environment remains severely depressed”.
More worryingly Schmelzing believes we have been in a downward trend for the last 500-years.
Upon closer inspection, it can be shown that trend real rates have been following a downward path for close to five hundred years, on a variety of measures. The development since the 1980s does not constitute a fundamental break with these tendencies.
Why is this worrying? Because the bounce back is not only inevitable, but will also be painful and sharp:
Most reversals to “real rate stagnation” periods have been rapid, non-linear, and took place on average after 26 years. Within 24-months after hitting their troughs in the rate depression cycle, rates gained on average 315 basis points, with two reversals showing real rate appreciations of more than 600 basis points within 2 years.
How will we know if such a correction is headed our way? Aside from the fact that central banks are beginning to increase rates of their own volition there are other macro indicators, many of which resonate with the current environment:
Most of the eight previous cyclical “real rate depressions” were eventually disrupted by geopolitical events or catastrophes, with several – such as the Black Death, the Thirty Years War, or World War Two – combining both demographic, and geopolitical inflections…the infamous “Panic of 1873” heralded the advent of two decades of low productivity growth, deflationary price dynamics, and a rise in global populism and protectionism.
Sound familiar?
$217 trillion global debt bubble set to pop
Currently the total global debt bubble is over $217 trillion, with little sign of it slowing. We have built a so-called economic recovery on debt. Spending has been encouraged on a pile of low interest rates and easy-to-reach cheap lines of credit. It has not been encouraged with the thought that one day interest rates will have to climb.
A sudden uptick in interest rates could not come at a more precarious time for global finances. It is not just personal debt levels that are of concern, especially when the Bank of International Settlements is aware of $13 trillion of ‘missing debt’.
In September this year the BIS said it was hard to assess the risk this “missing” debt poses, but its main worry was a repeat of events in the financial crisis: a liquidity crunch like the one that seized FX swap and forwards markets.
It is safe to say that a decade on from the global financial crisis we now have the makings of a new one.
Global debt woes are building up to a tidal wave
As Dambisa Moyo explained in the FT in ‘Global debt woes are building up to a tidal wave’:
In November last year, unsecured household debt in the UK passed pre-financial crisis highs in 2008. In the UK, debt excluding student loans crept up to £192bn, the highest figure since December 2008, and it continues to rise this year. Meanwhile, in the eurozone, debt-to-GDP ratios in Greece, Italy, Portugal and Belgium remain over 100 per cent. As of March there were more than $10tn negative yielding bonds in Europe and Japan.
With or without moderate interest rate increases, debt on a global level is becoming more expensive as markets price in further rate hikes. Add to this the global imbalances we see across the globe it is becoming increasingly questionable how so many countries will manage to service these debts.
Clouded judgement of central bankers
When the Bank of England’s Mark Carney issued a statement following the 0.25% increase, he was clearly down about the future prospects for the UK. He was so wary about encouraging any kind of positivity regarding Brexit and the country’s productivity that he almost warned against sharp future rate rises. The pound dropped unexpectedly in the wake his candidness.
What’s worrying to investors is that Carney (and other fellow bankers) seem to feel interest rate rises are almost to be done at whim. In truth, they are unlikely to have much more time before they are forced to hike rates and then it will be far more dramatic than a gesture of 0.25%.
This is worrying because the economy is unlikely to be strong enough to handle such a change. In turn this will impact economies, financial markets and assets – especially risk assets.
Many economists argue that it is only growth that can pull us out of this situation but we now live in a world where we only know how to create growth from debt. We do not know how to grow a healthy economy without the dripping syringe of the current debt based banking and monetary system.
This is the case both in people’s homes and in the highest government offices. It is an epidemic of global proportions.
Investors need to protect themselves from the addictive nature of these behaviours. We all know what happens to those who are unable to cut themselves off. They find excuses and then they come knocking for help. This is where you must ensure your finances are protected. and you are not forced to “help” the reckless bankers and their dangerous monetary system.
Move to safe haven higher ground from coming debt tidal wave
As we have discussed previously, the global debt bubble is prompting the wealthiest to diversify into gold. Wealthy investors and some of the world’s largest institutions in the world, including Lord Rothchilds, Ray Dalio and insurance company Munich Re, have all expressed their desire to protect their portfolios from the next financial crisis.
The next financial crisis may well be preceded by something we did not experience ten years ago but is now a very real scenario – bail-ins. As banks struggle to retrieve payments from those unable to service debts they will begin to falter. Governments will need to step-in. ‘Luckily’ for them they had the foresight to agree that bail-ins could happen.
This places your investments and especially your deposits at arguably greater risk than before the first financial crisis. With this in mind, follow the likes of Munich Re and prepare your portfolio against counterparty risk, unforeseen consequences of interest rate climbs and the collapse of the global debt bubble. Avoid ETF and digital gold and dependence on single counter parties and have outright legal ownership of segregated, allocated gold bullion coins and bars.
Related Content
Gold Protect From $217 Trillion Global Debt Bubble
Global Debt Bubble Sees Wealthy Diversify Into Gold
World Is Now $199 Trillion In Debt
News and Commentary
Gold holds steady at near three-week high as dollar firms (Reuters.com)
Asia Stocks Test Record High, Extend Global Rally (Bloomberg.com)
Indian Silver Imports Spiked 152% in September (SmaulGld.com)
Palladium just settled above $1,000 an ounce for first time since 2001 (MarketWatch.com)
Bitcoin surges to new high on reports software ‘fork’ suspended (Reuters.com)
America’s ‘Retail Apocalypse’ Is Really Just Beginning (Bloomberg.com)
A Monstrous Bubble – The Destroyer Called Amazon (InvestmentWatchBlog.com)
Central Banks Will Destroy The Planet – Nomi Prins (Youtube.com)
World’s witnessing a new Gilded Age as billionaires’ wealth swells to $6tn (TheGuardian.com)
We Are Reaching A Point Of No Return – Ron Paul (GoldSeek.com)
Gold Prices (LBMA AM)
09 Nov: USD 1,284.00, GBP 980.98 & EUR 1,106.29 per ounce
08 Nov: USD 1,282.25, GBP 976.82 & EUR 1,105.43 per ounce
07 Nov: USD 1,276.35, GBP 970.92 & EUR 1,103.28 per ounce
06 Nov: USD 1,271.60, GBP 969.72 & EUR 1,095.61 per ounce
03 Nov: USD 1,275.30, GBP 976.24 & EUR 1,094.59 per ounce
02 Nov: USD 1,276.40, GBP 965.09 & EUR 1,095.92 per ounce
01 Nov: USD 1,279.25, GBP 961.48 & EUR 1,099.52 per ounce
Silver Prices (LBMA)
09 Nov: USD 17.10, GBP 13.03 & EUR 14.69 per ounce
08 Nov: USD 17.00, GBP 12.96 & EUR 14.65 per ounce
07 Nov: USD 17.01, GBP 12.95 & EUR 14.70 per ounce
06 Nov: USD 16.92, GBP 12.90 & EUR 14.59 per ounce
03 Nov: USD 17.09, GBP 13.05 & EUR 14.67 per ounce
02 Nov: USD 17.08, GBP 12.98 & EUR 14.66 per ounce
01 Nov: USD 16.94, GBP 12.74 & EUR 14.55 per ounce
Recent Market Updates
– Platinum Bullion ‘May Be One Of The Only Cheap Assets Out There’
– World’s Largest Gold Producer China Sees Production Fall 10%
– German Investors Now World’s Largest Gold Buyers
– Gold Price Reacts as Central Banks Start Major Change
– Why Switzerland Could Save the World and Protect Your Gold
– Invest In Gold To Defend Against Bail-ins
– Stumbling UK Economy Shows Importance of Gold
– Wozniak and Thiel Fuel Bitcoin-Gold Debate: Gold Comes Out On Top
– Russia Buys 34 Tonnes Of Gold In September
– Gold Will Be Safe Haven Again In Looming EU Crisis
– Gold Is Valuable Due to “Extreme Rarity” – Must See CNN Video
– Gold Is Better Store of Value Than Bitcoin – Goldman Sachs
– Next Wall Street Crash Looms? Lessons On Anniversary Of 1987 Crash
END
Gold trading today:
Precious Metals Pounded As US Equities Open
Saudi warns its citizens to leave Lebanon “immediately” and gold and silver are panic-sold…
Because stocks must be ramped…
10,000 contracts ($1.3 billion notional) rushed thru in the 2 minutes before the US open…
end
Ethical behaviour by the Fed?
(courtesy Harrison/GATA)
Ethical behavior gives public confidence in Fed, Yellen says
Submitted by cpowell on Wed, 2017-11-08 13:53. Section: Daily Dispatches
So how come the Fed opposes being audited by Congress?
* * *
By David Harrison
The Wall Street Journal
Tuesday, November 7, 2017
Federal Reserve Chairwoman Janet Yellen said Tuesday that ethical behavior from the Fed allows the public to trust it is acting on its behalf.
“The Federal Reserve’s very effectiveness in setting monetary policy depends on the public’s assured confidence that we act only in its interest,” she said. “We must act ethically and we must demonstrate our ethical standards in ways that leave little room for doubt.”
Ms. Yellen spoke at a ceremony honoring her and her predecessor at the central bank, Ben Bernanke. She did not discuss the economy or monetary policy in her remarks.
The award from the Institute of Government and Public Affairs at the University of Illinois honors ethics in government and is named after the late Sen. Paul Douglas of Illinois, who devoted his political career to rooting out government corruption.
… For the remainder of the report:
https://www.wsj.com/articles/yellen-ethical-behavior-gives-public-confid..
END
Will the rising trend for base metals and oil have a spill over effect for silver?
(courtesy Craig Hemke/TFMetals Report/Sprott)
Craig Hemke: Could a commodity rally help spark silver?
Submitted by cpowell on Wed, 2017-11-08 17:26. Section: Daily Dispatches
12:26p ET Wednesday, November 8, 2017
Dear Friend of GATA and Gold:
Writing for Sprott Money, the TF Metals Report’s Craig Hemke notes the rising trends for copper and oil and wonders if they signal a rising trend for commodities generally and if such a trend can pull silver along despite the constant shorting done by investment banks in the futures market. Hemke’s commentary is headlined “Could a commodity Rally Help Spark Silver?” and it’s posted at Sprott Money here:
https://www.sprottmoney.com/Blog/could-a-commodity-rally-help-spark-silv…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
END
Dave Kranzler is spotting that something is different with respect to gold and silver trading
(courtesy Dave Kranzler/IRD/GATA)
Dave Kranzler: Something different is happening with gold and silver
Submitted by cpowell on Wed, 2017-11-08 19:25. Section: Daily Dispatches
2:25p ET Wednesday, November 8, 2017
Dear Friend of GATA and Gold:
Dave Kranzler of Investment Research Dynamics writes today that the investment banks that heavily short gold and silver futures seem to be having trouble getting prices down despite their maintaining unusually large positions. His analysis is headlined “Gold and Silver: Something Different Is Occurring” and it’s posted at IRD here:
http://investmentresearchdynamics.com/gold-and-silver-something-differen…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
Your early THURSDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST
i) Chinese yuan vs USA dollar/CLOSED DOWN AT 6.6380/shanghai bourse CLOSED UP AT 12.34 POINTS .36% / HANG SANG CLOSED UP 228.97 POINTS OR 0.78%
2. Nikkei closed DOWN 45.11 POINTS OR 0.20% /USA: YEN FALLS TO 113.35
3. Europe stocks OPENED RED /USA dollar index FALLS TO 94.56/Euro UP TO 1.1634
3b Japan 10 year bond yield: RISES TO . +.030/ GOVERNMENT INTERVENTION !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 114.07/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!
3c Nikkei now JUST BELOW 17,000
3d USA/Yen rate now well below the important 120 barrier this morning
3e WTI:: 56.88 and Brent: 63.48
3f Gold UP/Yen UP
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil DOWN for WTI and DOWN FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.372%/Italian 10 yr bond yield DOWN to 1.823% /SPAIN 10 YR BOND YIELD UP TO 1.549%
3j Greek 10 year bond yield RISES TO : 5.143???
3k Gold at $1286.65 silver at:17.10: 6 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble DOWN 2/100 in roubles/dollar) 59.25
3m oil into the 56 dollar handle for WTI and 63 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED DEVALUATION SOUTHBOUND
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.35 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9955 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1582 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017
3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.372%
The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”. Next step for Greece will be the recapitalization of the banks and that will be difficult.
4. USA 10 year treasury bond at 2.334% early this morning. Thirty year rate at 2.805% /
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Global Markets Stumble, Spooked By Japanese Stock Fireworks
The overnight fireworks in Japan, which saw the Nikkei plunge by 860 intraday points and sent vol and volumes soaring (before recovering most losses), spooked traders in Asia and around the globe, and U.S. equity futures are red this morning, along with European shares and oil. As one early riser sellside desk notes, the Nikkei 225 provided the latest example of choppy markets and the 860 point intraday plunge “got us worried. Is this a warning sign for risk assets?” President Trump’s challenge of China for “unfair trading practices” (which he blamed on his predecessors) did not help the calm mood.
“The stock market has run out of a little momentum since the blow-out on the (Japanese) topix so it feels like it’s temporarily paused,” said Societe Generale strategist Kit Juckes. “We are waiting for some news from the Republicans on the tax plans, there is a bond market that has stalled and we’ve got rather soggy looking emerging markets… We probably need to get U.S. Treasury yields higher to get things going again.”
In the aftermath of the Japanese vol spike, the MSCI Asia Pacific Index turned briefly negative having earlier climbed to all-time record.
Most of Europe’s main bourses also drifted in and out of the red after Japan’s disturbance spooked traders and after mixed earnings and as Brexit talks resumed with low expectations in Brussels. There were a series of ECB speeches and what should be buoyant new growth forecasts due later from the European Commission, though bond markets were mostly quiet following a rally this week in benchmark U.S. Treasuries and Bunds. In fact, German Bunds were sharply offered, with yields rising 9% on the day an approaching 0.36%: the move has dragged the rest of the European bonds lower, with OATs and Gilts also moving. According to some desks, this may be due to some rotation from the European equity markets, which are broadly trading into the red today and could be following in the footsteps of Nikkei.
Already shaken by events in Japan, basic-resources shares weighed on the Stoxx Europe 600 index following a decline in industrial-metals prices. An increase in growth expectations from the European Commission failed to lift stocks as disappointing results from companies including Siemens AG and Vestas Wind Systems A/S added to the malaise. Banks gained, led by Italian lenders after BPER Banca S.p.A. earnings beat estimates. Stocks in Asia earlier rose above their 2007 peak before an intraday reversal in Japanese shares on technically-driven trading pared gains in the region. Sterling edged lower as Brexit talks resumed, while oil halted a two-day drop.
Understandably, the yen was the dominant theme of the overnight session as investors rushed to buy the Japanese currency following the Nikkei plunge; the euro found support after the European Commission raised its growth outlook for the common area, while the pound reversed earlier gains as some hedge funds turned sellers;
Investor attention has been focused on Asia this week, where Trump has embarked on an 11-day tour. In Beijing Thursday, he said China is taking advantage of American workers and companies with unfair trade practices, but he blamed his predecessors in the White House rather than China for allowing the massive U.S. trade deficit to grow. A year after Trump was elected to president, investors are also reflecting on how financial markets have fared in the interim, and a rally that has outperformed all but 4 “new president” markets in US history.
As Bloomberg adds, elsewhere in the overnight session, the New Zealand dollar held onto Wednesday’s gains after the central bank flagged it may raise interest rates earlier than expected. The Kiwi was the day’s big mover, surging about 1 percent to a two-week high of before dipping to trade at $0.6956. The kiwi soared after the Reserve Bank of New Zealand (RBNZ) said the country’s fiscal stimulus and the currency’s recent fall would lead to faster inflation and likely an earlier rise in interest rates.
Treasury yields were range-bound as markets wait to see the U.S. tax proposal that will serve as the basis for further discussions. The kiwi was near two-week high after more hawkish RBNZ sends New Zealand’s 10-year yield eight basis points higher. Aussie dips briefly following surprise drop in housing finance activity and a subseqent short squeeze sent it to session highs; Australian sovereign bonds drift lower with 10-year yield up three basis points at 2.60%. JGB futures dip after mediocre 30-year auction tails 1.1bps.
The dollar index against a basket of six major currencies was 0.1 percent lower at 94.803 meanwhile, as it drifted further from the three-month high of 95.150 set in late October. A U.S. Senate tax-cut bill, differing from one already in the House of Representatives, was expected to be unveiled on Thursday, complicating a Republican tax overhaul push and increasing scepticism on Wall Street about the effort. Some also focused on fallout from Democrat wins in regional U.S. elections this week as signal for next year’s mid-term Congressional elections for U.S. President Donald Trump.
“There’s very much a risk of disappointment. The U.S. dollar could go through a weakening phase on the back of uncertainty around that tax reform,” said Steven Dooley, currency strategist for Western Union Business Solutions in Melbourne. Meanwhile, stalled Brexit talks resume on Thursday in Brussels with no indication that a breakthrough is in reach.
In commodity markets, Brent and U.S. crude oil futures were modestly lower, having hit two-year highs earlier in the week following a 40% surge since July. U.S. data showing a rise in domestic crude production had weighed on sentiment overnight but the Middle East uncertainty in Saudi Arabia limited the losses. Gold added 0.2 percent to $1,283.45 an ounce after rising to a three-week high of $1,287.13 an ounce the previous day. Palladium hovered near a 16-year high of $1,019 while nickel fell by more than 2 percent in London to its weakest since October as hype over potential electric vehicle demand that has been driving it higher eased. The nickel market had been ignoring downside risks from policy developments in supply markets Indonesia and the Philippines, and instead focusing on potential future demand from electric vehicle batteries, said Morgan Stanley in a report.
“We (have) heard little to alter our view that producing NiSO (nickel sulphate) isn’t particularly challenging/costly and we see near-term downside risk to price,” it said.
On today’s calendar, the ECB said economic growth in the U.K. is headed for a prolonged slowdown even as the euro-area economy is forecast to expand at the fastest pace in a decade this year. And in the U.S., tax reform discussions continue. The Senate is due to release a “conceptual mark” of a proposal Thursday, according to a spokeswoman. Expected economic data include jobless claims and wholesale inventories. Dish, Disney, Johnson Controls and TransCanada are among companies reporting earnings.
Bulletin Headline Summary from RanSquawk
European markets remain subdued, as equities trade mixed with a lack of any real direction
GBP weaker amid a late follow-through of concerning Brexit commentary
Looking ahead, highlights include US weekly jobs, ECB’s Lautenschlaeger and Constancio
Market Snapshot
S&P 500 futures down 0.1% to 2,588.30
STOXX Europe 600 down 0.2% to 393.82
MSCI Asia up 0.1% to 171.99
MSCI Asia ex Japan up 0.3% to 561.79
Nikkei down 0.2% to 22,868.71
Topix down 0.3% to 1,813.11
Hang Seng Index up 0.8% to 29,136.57
Shanghai Composite up 0.4% to 3,427.80
Sensex up 0.06% to 33,239.47
Australia S&P/ASX 200 up 0.6% to 6,049.43
Kospi down 0.07% to 2,550.57
German 10Y yield rose 0.2 bps to 0.328%
Euro up 0.05% to $1.1601
Italian 10Y yield rose 4.5 bps to 1.482%
Spanish 10Y yield rose 3.0 bps to 1.515%
Brent futures down 0.1% to $63.41/bbl
Gold spot up 0.2% to $1,283.82
U.S. Dollar Index down 0.06% to 94.81
Top Overnight News
President Trump said China is taking advantage of American workers and American companies with unfair trade practices, but blamed his predecessors in the White House for allowing the U.S. trade deficit to grow
The European Commission’s chief Brexit negotiator, Michel Barnier, and U.K. Brexit Secretary David Davis resume talks on the terms of Britain’s exit from the EU. Timing and duration in Brussels to be determined
ECB’s head of banking supervision, Daniele Nouy, signaled that she’s willing to compromise on controversial plans to toughen rules on bad loans after criticism from the European Parliament that sent Italian bank shares soaring
EU is giving U.K. an informal deadline of two to three weeks to set out how much it is prepared to pay in the Brexit divorce settlement, the Financial Times reports, citing an unidentified senior EU negotiator
Hearing on Powell for Fed Chair set for Nov. 28
Saudi Billionaires Said to Move Funds to Escape Asset Freeze
AT&T CEO Says He Won’t Sell CNN as Antitrust Tension Rises
Boeing Wins China Orders for 300 Planes Worth $37 Billion
London House-Price Slump Persists as Brokers See Sales Tumble
Vestas Plunges Most in 6 Years on Tougher Wind Competition
BOE’s McCafferty Says Banks May Leave Before Brexit Deal Agreed
Risk on sentiment had been in full swing in Asia as stocks continued to edge higher at the beginning of the session, before later paring initial advances, particularly in Japanese assets. Nikkei 225 had been the notable outperformer although reversed gains of 2% as US equity futures dipped, subsequently sparking safe haven flow in the JPY, while some investors also touted profit taking. Elsewhere, the ASX 200 hovered around 10yr highs with iron ore prices seeing another day of gains, consequently supporting miners. Chinese markets traded in mixed fashion with the Hang Seng keeping afloat after encouraging Chinese CPI and PPI data which tops analyst estimates, while the Shanghai Comp fluctuated between gains and losses. 10yr JGBs are a tad lower, while underperformance has been observed in the belly of the curve with the 10yr yield ticking up 0.1bps.
Top Asia News
Noble Group Posts $3 Billion Year-to-Date Loss as Crisis Deepens
Inside Noble-Vitol Deal Shows Colonial Pipeline as Top Asset
Malaysia Says It May Consider Review of Monetary Accommodation
Malaysian Bonds Face Specter of First Rate Hike Since 2014
Philippines Holds Benchmark Rate as Inflation Seen on Target
Bakrieland Says Singapore Court Approves Debt Restructuring Plan
European equities trade with little in the way of any notable price action after a directionless lead from Asia after initial gains were erased. On a sector specific basis, performance has largely been off the back of individual earnings from across the continent with notable movers including Vestas Wind Systems (-16.9%), Burberry (-10.5%), Sainsbury’s (-2.9%), Siemens (-2.6%) and Commerzbank (+2.6%). Upside in Commerzbank shares has subsequently lead to some outperformance in financial names with Italian banks also providing some support amid UniCredit’s latest trading update and a sector bounceback from yesterday’s losses. No sign of any investor angst or dampened demand whatsoever, as 2023 supply was snapped up with only a 1 tick price tail. This, despite a sharp retreat in yields following the BoE rate hike and not much in the way of concession going in to the DMO tap. Note also, the issue does not fall into the more normal 5 year bucket until next year and the average auction yield was just a shade below yesterday’s closing level. However, 10 year benchmark Liffe futures have retreated from best levels to marginal new lows for the session (125.45), albeit largely alongside a general downturn in fixed (Bunds just off a new Eurex base of 163.23). In truth, debt markets are lacking clear direction and consolidating recent gains/yield declines/curve flattening.
Top European News
Denmark’s Negative Rates Are Seen Persisting Into Next Decade
ECB’s Nouy Bends on Bad-Loan Plan as Italian Bank Shares Soar
U.K. Likely to See More Utility Mergers If SSE Deal Approved
Euro-Area Growth Forecast Lifted Again as U.K. Outlook Dims
In FX, a broadly softer Greenback, largely due to ongoing US tax reform uncertainty, and supportive RBNZ impulses has enabled the Kiwi to recoup more lost ground after the RBNZ stood pat on rates at 1.75%. Accordingly, it brought forward rate hike projections to June 2019 from Q3 previously, while Governor Spencer also contended that the NZD is now fair value (although his deputy McDermott thinks a bit more depreciation is desirable). EUR is back to pivoting around the 1.1600 level vs the Dollar where large (1.7 bn) option expiries reside. USD/JPY has seen very choppy trade in line with the Nikkei, but ultimately firmer on safe-haven grounds, as USD/JJPY retreats from 114.00 again towards November lows. Currently around 113.50, bids are seen at 113.40 and then 113.00, while offers are said to be layered from 114.00-20. Riksbank meeting minutes see several members emphasising the importance of the exchange rate for the economic outlook and inflation prospects.
In commodities, iron ore prices continued to surge higher overnight with Dalian iron ore rising as much as 2% amid the persistent rise in steel prices. Precious metals gained a slight bid following the turnaround in risk sentiment, where Japan equities reversed its 2% rise to trade with losses of 1.5%. WTI and Brent crude futures trade relatively sideways with little in the way of notable newsflow other than Goldman Sachs sticking to their USD 58bbl year-end call for Brent whilst noting the ‘potential for high spot price volatility in the coming weeks’.
Looking at today’s calendar, data wise, September Germany trade data along with UK industrial production are due. Elsewhere, US initial jobless claims and wholesale inventories are also due. We’ll also receive the latest EC economic forecasts while the ECB’s Villeroy de Galhau, Coerue, Mersch, Lautenschlaeger and Constancio are due to speak. Brexit talks are due to resume between Barnier and Davis while President Trump holds meetings with China’s Xi and Li Keqiang.
US event calendar
7:45am: Bloomberg Nov. United States Economic Survey
8:30am: Initial Jobless Claims, est. 231,500, prior 229,000; Continuing Claims, est. 1.89m, prior 1.88m
9:45am: Bloomberg Consumer Comfort, prior 51.7
10am: Wholesale Trade Sales MoM, est. 0.9%, prior 1.7%; Wholesale Inventories MoM, est. 0.3%, prior 0.3%
DB’s Jim Reid concludes the overnight wrap
Needless to say that the focus for markets today will be on what details emerge from the Senate’s version of the GOP tax bill. It’s unclear just how much detail we’ll get though with some conflicting reports out there. Axios reported that the release of the bill will be delayed however Politico reported separately that GOP leaders are ready to walk through the bill with the GOP conference at 11.30 EST. Thereafter it will be released to the public but the timing is a bit up in the air so we might have to wait and see. Overnight, a spokeswoman for the Senate Finance Committee, Ms Lawless, noted that today’s tax proposal will be a “conceptual mark” rather than the legislative details.
Over in markets, the one year Trump anniversary was one of the less exciting days that we’ve had so far. Initially the tone felt a bit more risk-off with European markets generally closing a bit softer. US markets did however pare early losses into the close at least with the S&P 500 ending +0.14%. That masked another difficult day for banks however, partly influenced by the Washington Post article that did the rounds suggesting that the Senate GOP tax bill could delay the cut in the corporate tax rate by one year. Later in the day, Treasury Secretary Steven Mnuchin also refused to rule out a possible phase-in of corporate tax cuts. Meanwhile victory for the Democrats in the two Governor races in New Jersey and especially Virginia also appeared to play a factor given the midterm elections next year. It remains to be seen whether that will transpire into taking back votes across the rest of the country but nevertheless it was a statement of intent.
Meanwhile EM tensions continue to bubble under the surface with headlines never too far from the front pages. EM sovereign debt has certainty had a tough time of it in the last week or so but we’re also starting to see some signs of selling pressure in DM HY credit with Crossover and CDX HY 11bps and 7bps wider this week, respectively. All the talk in bond markets at the moment though is the flattening across the Treasury curve. Yesterday saw both the 2s10s and 5s30s curves flatten for the 9th and 10th successive day respectively. The former dropped to 68bps and has now flattened by 16bps during that run. The latter was only modestly flatter at 78bps but is still also 12bps flatter over the same time.
So as we know the Treasury curve is the flattest it’s been in 10 years and there is plenty of ongoing debate as to what is driving the recent price action. Various reasons have been suggested. Our US rates strategists have previously noted that even with a tax plan, overseas investors and pension buying of the long-end is depressing term premium and yields. Another suggestion is that with 2y yields somewhat anchored relative to the Fed’s effective rate and therefore further rate hikes, the long-end is instead being weighed down by long-end Euro rates. Unsurprisingly there is plenty of discussion about how the recent moves are indicating late cycle tendencies. One thing we would note though is that the NY Fed recession model is only showing a 9% probability of a recession in the next 12 months. While that’s up from 3% at the end of last year the overall level is still clearly fairly low based on their model but it’s worth keeping an eye on. Also worth monitoring perhaps is the whether the flattening has had much impact on bank lending when we receive the next Fed Senior Loan Survey. In the last 3 days, US banks have dropped -3.53%, so the sector has certainly materially underperformed.
This morning in Asia, China’s October CPI was slightly above consensus at +1.9% yoy (vs. +1.8% expected) and also up from +1.6% the month prior, while PPI was steady but well above expectations at +6.9% yoy (vs. +6.6% expected). Markets are trading higher in Asia, with the Nikkei powering ahead (+0.58%) to a fresh 25 year high following sound corporate results, while the Hang Seng (+0.52%) and ASX 200 (+0.55%) are also up, but the Kospi is down 0.33%. Last night Bloomberg ran an article suggesting that the White House plans to announce $250bn of business deals with China this week based on comments from Commerce Secretary Wilbur Ross. As we go to print President Trump and China President Xi Jingping are about to hold a joint briefing. This comes after Trump called the trade relationship between the two “very one sided” and the deficit “shockingly high”. Xi said that China is to become more open to foreign investment and that the nation is “unswervingly committed” to opening up.
Moving on. In the UK, PM May’s cabinet has now lost two ministers within one week after the International Development Secretary Priti Patel offered her resignation, shortly after she admitted to holding a series of unauthorised meetings with Israeli officials without the PM’s knowledge and suggested giving British aid money to an Israeli army project. In view of the increased instability around PM May’s government, some suggested this may have knock on impacts on the progress of Brexit talks. Nonetheless, the Irish PM Varadkar has signalled that Brexit talks could have a breakthrough by December, noting that “I’m more optimistic than I was in the weeks before the October Summit”. The current round of Brexit talks will resume today in Brussels.
Following on, BoE policy maker McCafferty has warned that clarity on Brexit will be needed by early next year to better allow businesses to forward plan. He noted businesses “cannot wait until the last minute”, adding that “there’s a point…even when it becomes clear what the final deal will be – whether it’s no deal or some sort of deal – the banks will have to act”. Elsewhere, the BoE’s banking regulator Mr Woods had earlier noted that it was “plausible” the UK could lose up to 75,000 jobs in the banking and insurance sector if it left the EU bloc without a trade deal.
Staying in the UK, according to a network of UK businesses monitored by the BoE, the latest agents’ summary suggest wage growth in 2018 should improve further, now likely to be 2.5%-3.5% yoy growth (up 0.5% from prior readings), in part due to a slow-down in the availability of workers, which in some ways is not too surprising given UK’s unemployment is at a 42 year low. However, while the survey noted modest growth in spending is expected to continue for the coming year, expectations in the following two years were “weaker”.
Across the pond, the Fed’s Harker noted he has “not at this point” seen anything that would push him away from a rate hike in December, which is in line with the consensus view with the odds of rate hike unchanged at 92% (per Bloomberg). Looking ahead, he has “pencilled in three (rate) increases in 2018” but noted that this is somewhat evolving as he “will reassess that as the data comes in”. On potential tax cuts, he noted “we need more specificity as to what those programs would entail”, and that “we have not put any fiscal stimulus” in our forecasts at this stage.
Before we look at the day ahead, a quick recap of the minimal economic data from yesterday. In the US, the weekly MBA mortgage applications was flat (vs. -2.6% previous). Over in Europe, Spain’s September industrial production was above expectations at +0.1% mom (vs. -0.2% expected), leading to annual growth of +3.4% yoy (vs. +3.1% expected). In France, the September trade deficit was broadly in line at -$4.67bln, although there was a $0.3bn positive revision to the prior month’s reading. Elsewhere, the current account balance was lower than expected at -$3.1bn (vs. -$1.5bn expected). This morning in New Zealand, the central bank has the left cash rate on hold at 1.75% and noted that “monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly”. Elsewhere, inflation is now expected to trough at 1.5% yoy in 1Q18 but rebound to 2.1% yoy in 2Q.
Looking at the day ahead, data wise, September Germany trade data along with UK industrial production are due. Elsewhere, US initial jobless claims and wholesale inventories are also due. We’ll also receive the latest EC economic forecasts while the ECB’s Villeroy de Galhau, Coerue, Mersch, Lautenschlaeger and Constancio are due to speak. Brexit talks are due to resume between Barnier and Davis while President Trump holds meetings with China’s Xi and Li Keqiang.
3. ASIAN AFFAIRS
i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 12.34 points or .36% /Hang Sang CLOSED UP 228.97 pts or 0.78% / The Nikkei closed DOWN 45.11 POINTS OR 0.20%/Australia’s all ordinaires CLOSED UP 0.55%/Chinese yuan (ONSHORE) closed DOWN at 6.6380/Oil DOWN to 56.88 dollars per barrel for WTI and 63.48 for Brent. Stocks in Europe OPENED RED . ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.6380. OFFSHORE YUAN CLOSED WEAKER TO THE ONSHORE YUAN AT 6.6447 //ONSHORE YUAN WEAKER AGAINST THE DOLLAR/OFF SHORE WEAKER TO THE DOLLAR/. THE DOLLAR (INDEX) IS WEAKER AGAINST ALL MAJOR CURRENCIES. CHINA IS VERY HAPPY TODAY.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
NORTH KOREA//SOUTH KOREA
3b) REPORT ON JAPAN
Something snapped last night in Japan that saw a violent stock plunge only to be rescued by their plunge protection team
(courtesy zerohedge)
Japan Rocked By Violent Stock Plunge As Nikkei Tumbles 850 Points Before Recovering Losses
Something snapped in Japan today.
With Asian stocks finally breaking out a decade-long doldrum, and hitting record highs earlier in the session, and with Japanese equities starting off the session on the right foot and continuing their recent ascent which until Wednesday had seen them rise on 23 of the past 25 days, Japanese shares suddenly lurched on Thursday, plunging sharply lower after dramatic intraday swings took the Nikkei and Topix indexes to multi-decade highs only to drop in the afternoon on futures-driven trading ahead of the following day’s options settlement. All told, in a little over an hour, what had been another solid rally in Japanese stocks turned into some rather sharp clear-air turbulence, with the Nikkei 225 Stock Average plunging about 3.6% from the afternoon-session high to its low for the day.
It all started off well enough: in the morning session, the Topix notched a new 26-year high and the Nikkei 225 broke the 23,000 level for the first time since January 1992, as financial and securities shares rallied.
Then something flipped and in a gut-churning rollercoaster of a move, the Nikkei lurched from an over 2% gain which took it to a fresh 25 year high at the end of the morning session, to a loss of as much as 1.7%. The sudden reversal quickly spread to the currency market, with the yen surging before spreading across Asia: South Korean and Hong Kong equities also tumbled in sympathy. As Bloomberg snarks, “Sydney traders could count themselves lucky their market had already closed before the worst of the sell-off.”
Some traders laid the blame on technical factors – after all, the Nikkei has been on a tear, ending the day lower in just five times since the start of October (assuming Wednesday’s 0.04% “drop” was as unchanged). Others, like Bloomberg, wondered if the Nikkei had suffered a flashback: in an odd coincidence the Nikkei 225’s was its biggest reversal (points-wise) since exactly a year ago, when Donald Trump’s shock U.S. election victory rocked markets around the world… before they bounced back the next day.
Perhaps it was indeed Trump’s fault once again: the drop started with President Trump’s first visit to the region, and the slump in the Nikkei (which then weighed on South Korean and Hong Kong stocks) accelerated as Trump spoke to reporters in Beijing. Standing alongside China’s President Xi Jinping, Trump said that the world has the power to take on the North Korean “menace.”
Whether this rhetoric contributed to the market ruckus is unclear. What is clear is that the veil of comlacency was violently pierced – the Nikkei Volatility Index surged 23%, the most since August – if only for a while.
Still, when the dust settled, the Nikkei ended down just 0.2% at 22,868.71, after tumbling 850 intraday points from a morning high of 23,382.15, or up 3%, to an afternoon session low of 22,522.83, or down -1.7%, its biggest one-day move since the election of U.S. President Donald Trump one year ago. Meanwhile, the Topix ended down 0.3 percent at 1,813.11, after soaring as high as 1,844.05 in the morning and skidding as low as 1,791.12 in the afternoon.
The modest closing drop however masked a violent undercurrent, with volatility soaring 23% while volume on the Tokyo Stock Exchange’s first section came to 4.9935 trillion yen, its highest since Nov. 4, 2014. TSE first section volume came to 2.748 billion shares, its highest since Dec. 12.
Attempts to explain the mini flash crash proliferated: “There was no special news that triggered this afternoon’s volatile moves,” said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “It was massive position adjustment ahead of tomorrow’s SQ.” The closely watched options settlement price, known in Japan as the special quotation, or “SQ,” is calculated from the opening prices of the 225 shares in the Nikkei average on the second Friday of every month.
Other traders said algorithm-driven trading exacerbated the moves once they began. Financial and securities shares were among strong performers in the morning, though they pared their gains in afternoon trade.
Courtesy of Bloomberg, here is the full list of possible explanation for today’s sharp tumble:
Takashi Kudo (Head of corporate sales at Moneysquare Japan Inc. in Tokyo):
There was some speculation in the market that the drop in equities was due to profit-taking by foreign investors, before the special quotation, and that dragged the dollar/yen lower
Typically, declines in stocks lead to yen buying.
Mitsuo Shimizu (Deputy general manager at Japan Asia Securities in Tokyo):
“The biggest factor behind today’s roller-coaster move was position adjustments ahead of the special quotation”
“At the end of the day, people came to realize ‘well, corporate fundamentals are still good.’ And then people bought on dips toward the market close”
Hans Goetti (Founder of HG Research in Singapore):
The afternoon drop in Japanese stocks may just be a one-day move and is nothing to worry about
Japan stocks could rise as much as 30 percent in next few months on earnings, valuations and central bank policy
Jingyi Pan (Strategist at IG Asia in Singapore):
“I do think the market is taking profit indeed, but likely due to the fact that it had been an opportune moment”
Some of the rhetoric coming out of U.S. President Donald Trump’s China visit had not been the most amicable, and across haven assets, there had been some buying. The reiteration of the need to “address the unfair trade practices” had likely been one alarming the markets
Tsutomu Yamada (Analyst at Kabu.com Securities Co. in Tokyo):
Sudden drop in the Topix and the Nikkei 225 is simply a technical adjustment as the earlier rally was too fast. Some people are taking profits after extreme market advance
Yukio Ishizuki (Senior currency strategist at Daiwa Securities Co. in Tokyo):
A pullback triggered gains in the yen against the dollar and other currencies, while the move wasn’t triggered by any news or currency-specific issues
So was the mini crash just a one-off event, or a harbinger of the bitcoin-esque mega plunge yet to come? And was the miraculous last minute recovery another BOJ intervention? Those are all questions the bulls – not only in Japan – will be asking themselves today.
3C CHINA REPORT.
4. EUROPEAN AFFAIRS
This may turn out to be very problematic for Draghi as there will not be enough Italian bonds for the ECB to purchase around their election time
(courtesy zerohedge)
Uh-Oh…Draghi’s Ammunition To Buy Italian Bonds Before The Election Is Less Than We Thought
Having successfully pulled off the announcement of the ECB’s “dovish taper” – where monthly bond purchases will be halved to Euro 30 billion from January 2018 – last month, a challenge for Mario Draghi in Q1 2018 has appeared on his radar. The ECB’s bond buying ammunition is slightly less than analysts thought and there is the small matter of the looming Italian election. The latter is likely to be held in March 2018, although it could take place as late as May. Veteran strategist, now Bloomberg columnist, Marcus Ashworth explains in “Italy’s Shrinking Safety Net”.
One of Mario Draghi’s hands is being tied behind his back just as bond markets may need his help the most. Data released by the European Central Bank this week show the ECB president will have reduced scope to buy Italian bonds if markets start convulsing ahead of the country’s general election in the spring. From January, the ECB’s Quantitative Easing program will pare its monthly bond purchases by 50 percent to 30 billion euros ($35 billion). Draghi has sought to soften this so-called tapering by emphasizing how the ECB can reinvest maturing bonds to pick up the shortfall.
There’s a hitch — the central bank said it intends only to reinvest proceeds from maturing bonds in debt of the same country. That leaves Draghi with only limited flexibility to use his buying power to the benefit of one country over another.
Monday’s release showed that proceeds from these maturing securities, which could then fund new purchases of Italian bonds is both less than expected and likely skewed until after the election. Ashworth provides us with the numbers.
Monday’s release showed that proceeds from these maturing securities which could then fund further purchases of government bonds, will only be about 8.5 billion euros, less than analyst expectations of as much as 12 billion euros. This means the pace of bond purchases under the QE program will fall by about a third from this year’s rate of 60 billion euros a month. The first quarter will be noticeably lighter in monthly redemptions compared with the rest of 2018. The big months for Italian redemptions won’t come until April and October.
This is inconvenient, especially as the ECB had already been “pushing the envelope” in terms of Italian purchases (and French),as Ashworth laments.
The ECB has already spent most of 2017 buying more Italian bonds than the capital key, a formula that determines how much of each nation’s debt the central bank can buy, would suggest. That variation is allowable – but it leaves little extra available slack to cut Italy.
The EU is piling the pressure on the UK to agree the divorce settlement as Brexit negotiations resumed in Brussels. In EU parlance, it appears that the term for this is the “moment of clarification”, which only makes us despise EU bureaucrats even more. Our suspicion is that, with the UK keen to settle the money issue and move on to trade talks, the EU sees an opportunity to take advantage of political turmoil in the UK, as the talks reaching their most critical stage. According to AFP.
The European Union on Thursday warned Britain to reach a divorce deal by the end of the month to guarantee moving to trade negotiations, as Brexit talks resumed in Brussels. Fears are growing in Brussels that the chaotic political situation in London after Prime Minister Theresa May suffered a string of ministerial resignations will hamper the chances of reaching a deal on key issues, especially Britain’s contentious exit bill. EU leaders had hoped to officially approve the next phase on future relations and a transition period at a summit in December, but officials are increasingly concerned that deadline could slip to February or March.
“Time is pressing,” chief EU negotiator Michel Barnier said in a speech in Rome on Thursday before flying back to Brussels to start the sixth round of the slow-moving talks. “The European Council summit in October wanted to keep up the dynamic of the negotiations and I am of the same state of mind,” Barnier said. “But the real moment of clarification is coming.”
Adding to the pressure is that this round of talks is confined to two days, rather than the normal four. Barnier and Britain’s Brexit Secretary, David Davis, will only meet on Friday morning, after which they will hold a press conference. As we’ve said on numerous occasions, the EU is believed to be demanding 60 billion Euros compared to the UK’s offer of about 40 billion Euros. However, earlier this month, Davis appeared to signal that the UK would increase its offer – see “UK Will Compromise On Divorce Bill To Accelerate Brexit Negotiations” here).
In the last two weeks, Prime Minister, Theresa May’s tenuous grip on power has been further undermined by the resignation of two ministers in her cabinet.
Defence Secretary, Michael Fallon, resigned amid the ongoing sexual harassment scandal in Westminster; and
International Development Secretary, Priti Patel, resigned over unauthorized meetings in Israel.
AFP alludes to weakness in the UK’s bargaining position given the latest scandals…
To move on to trade talks, the EU is demanding sufficient progress on three key divorce issues, above all the bill Britain must pay to cover its budgetary commitments, a figure which senior European officials put at 60 billion euros ($70 billion). They also want commitments on keeping an open border between Northern Ireland and Ireland, and on guaranteeing the rights of three million European citizens living in Britain. But the British government looks increasingly distracted, with the resignation of its aid minister over meetings in Israel on Wednesday adding to the sense of chaos since May’s disastrous showing in elections earlier this year.
…and we suspect that this is what Barnier (with the guiding hand of the odious Jean-Claude Juncker) is hoping to turn to his advantage. Coincidentally, an anonymous EU source was able to provide AFP with some cryptic comments – although it wasn’t hard to see what he/she was getting at.
“We are a bit concerned about what we are seeing in the UK at the moment, we want a strong negotiating partner,” an EU diplomat told AFP on condition of anonymity. “I see a strong willingness to come to a deal. I am confident that everybody understands what has to be done on both sides. The question is, Do they have the strength? And will the moves be made in time by the end of November, first week of December?
Bloomberg appears to have picked up a similar downbeat briefing from EU officials.
Brexit talks resumed Thursday with no indication that a breakthrough is in reach: the Europeans are taking a cautious approach even as both sides hope for an agreement by year-end. European diplomats in Brussels are concerned about the U.K.’s political crisis, and are trying to avoid sending Britain overly encouraging signals about how talks are progressing, according to a person familiar with the situation. Countries including Germany asked negotiators on Wednesday not to rush into preparing documents for trade talks, to avoid creating the impression that negotiations are moving on, the person said…EU diplomats have begun work on two versions of draft summit conclusions for the December gathering — one for the possibility of a breakthrough and another one for continuing stalemate. The Times reported on Thursday that leaders are also preparing for the possibility of May’s downfall.
It was probably another coincidence that Juncker’s European Commission today cut its forecasts for UK economic growth for 2017-19 on Brexit uncertainty, while raising its forecast for Eurozone growth. From The Guardian.
Newsflash: The European Commission has slashed its forecast for UK growth, warning that Brexit uncertainty will hurt business investment. It now expects Britain’s economy to grow by just 1.5% this year, down from 1.8% previously. The EC also predicts that growth will slow to 1.3% next year, and just 1.1% in 2019…Having slashed the UK’s growth forecasts, the EC has also raised its forecasts for the eurozone. The Commission now believes that eurozone countries will expand by 2.2% this year, up from the 1.7% forecast earlier this year.
As the talks progress, the clock is counting down to next month’s EU summit for the Brexit settlement to be finalized. As AFP’s anonymous source explains, the EU is ready to move the talks forward as long as it likes the “colour” of the UK’s money – otherwise, we suspect, banks and other businesses will go apoplectic about the risk of a “hard Brexit”.
That timescale would allow preparations for a formal decision by EU leaders at a summit on December 14-15 to move on to discussing future ties, a step Britain has been pushing for for months. “Everything is ready (to start trade talks) on the first of January,” the EU diplomat said. Failure to do so would probably push back the move to one of the next summits in February or March, leaving only around six months to reach a deal by October 2018, the timeline Barnier has set in order for the withdrawal agreement to be ratified by Brexit day in March 2019. The EU says Britain must provide written guarantees of a pledge to honour the financial commitments that May made in a speech in Florence, Italy, in September. “We don’t need speeches, we need commitments,” the diplomat said.
There’s nothing like kicking a woman, Theresa May, when she’s down, but what else would you expect from Juncker and his cronies.
5. RUSSIA AND MIDDLE EASTERN AFFAIRS
A huge paper from Meijer on the situation inside Saudi Arabia and how its finances are bleeding faster than a speeding bullet. He outlines how Saudi Arabia is joining forces with the UAE with the help of Israel and the USA in the hope of replenishing its finances
a must read..
(courtesy Raul Meijer)
How Broke Is The House Of Saud?
Authored by Raul Ilargi Meijer via The Automatic Earth blog,
Trying to figure out what on earth is happening in the Middle East appears to have gotten a lot harder. Perhaps (because) it’s become more dangerous too. There are so many players, and connections between players, involved now that even making one of those schematic representations would never get it right. Too many unknown unknowns.
A short and incomplete list of the actors: Sunni, Shiite, Saudi Arabia, US, Russia, Turkey, ISIS, Syria, Iran, Iraq, Libya, Kurds, Lebanon, Hezbollah, Hamas, Qatar, Israel, United Arab Emirates (UAE), Houthis, perhaps even Chechnya, Afghanistan, Pakistan. I know I know, add your favorites.
So what have we got, or what do we know we’ve got?
We seem to have the US lining up with Israel, the UAE and Saudi Arabia against Russia, Iran, Syria, Hezbollah. Broadly. But that’s just a -pun intended- crude start.
Putin has been getting closer to the Saudis because of the OPEC production cuts, trying to jack up the price of oil. Which ironically has now been achieved on the heels of the arrests of 11 princes and scores of other wealthy and powerful in the kingdom. But Putin also recently signed a $30 billion oil -infrastructure- deal with Iran. And he’s been cuddling up to Israel as well.
In fact, Putin may well be the most powerful force in the Middle East today. Well played?! He prevented the demise of Assad in Syria, which however you look at it at least saved the country from becoming another Iraq and Libya style failed state. If there’s one thing you can say about the Middle East/North Africa it’s that the US succeeded in creating chaos there to such an extent that it has zero control left over any of it. Well played?!
One thing seems obvious: the House of Saudi needs money.
The cash flowing out to the princes is simply not available anymore. The oil price is a major factor in that. Miraculously, the weekend crackdown on dozens of princes et al, managed to do what all the OPEC meetings could not for the price of oil: push it up. But the shrinkage of foreign reserves shows a long term problem, not some momentary blip:
nother sign that money has become a real problem in Riyadh is the ever-postponed IPO of Saudi Aramco, the flagship oil company supposedly worth $2 trillion. Trump this week called on the Saudi’s to list it in New York, but despite the upsurge in oil prices you still have to wonder which part of that $2 trillion is real, and which is just fantasy.
But yeah, I know, there’s a million different stocks you can ask the same question about. Then again, seeing the wealth of some of the kingdom’s richest parties confiscated overnight can’t be a buy buy buy signal, can it? Looks like the IPO delay tells us something.
And then you have the 15,000 princes and princesses who all live off of the Kingdom’s supposed riches (‘only 2,000’ profit directly). All of them live in -relative- wealth. Some more than others, but there’s no hunger in the royal family. Thing is, overall population growth outdoes even that in the royal family. Which means, since the country produces nothing except for oil, that there are 1000s upon 1000s of young people with nothing to do but spend money that’s no longer there. Cue mayhem.
And things are not getting better, Saudi Arabia loses money on every barrel it produces. There are stories about them lowering their break-even price, but let’s take that with a few spoonfuls of salt. A 25% drop in break-even prices in just one year sounds a bit too good. Moreover, main competitors like Iran would still have a much lower break-even price. So even if prices would rise further, the Saudi’s might only break even while Iran gets much richer. Running vs standing still.
Saudi Arabia Leads Gulf Nations in Cutting Break-Even Oil Price
Saudi Arabia, OPEC’s biggest oil producer, is also a leader when it comes to slashing the crude price the country needs to balance its budget. The kingdom will need oil to trade at $70 a barrel next year to break even, the IMF said Tuesday in its Regional Economic Outlook for the Middle East and Central Asia. That’s down from a break-even of $96.60 a barrel in 2016, the biggest drop of eight crude producers in the Persian Gulf. The break-even is a measure of the crude price needed to meet spending plans and balance the budget.
Gulf oil producers are cutting spending and eliminating subsidies after crude plunged from more than $100 a barrel in 2014 to average just over half that this year. The need to curb spending is more urgent with the Organization of Petroleum Exporting Countries cutting output to reduce a global glut. Oil will trade at $50 to $60 a barrel for the “medium term,” the IMF said.
So a thorough cleansing job of the royal family is perhaps inevitable, albeit very risky. King Salman and crown prince Mohammed bin Salman are up against a very large group of rich people. But there’s no way back now.
Saudi Banks Freeze More Than 1,200 Bank Accounts in Anti-Corruption Purge
Saudi Arabian banks have frozen more than 1,200 accounts belonging to individuals and companies in the kingdom as part of the government’s anti-corruption purge, bankers and lawyers said on Tuesday. They added that the number is continuing to rise. Dozens of royal family members, officials and business executives have been detained in the crackdown and are facing allegations of money laundering, bribery, extorting officials and taking advantage of public office for personal gain. Since Sunday, the central bank has been expanding the list of accounts it is requiring lenders to freeze on an almost hourly basis…
Much more will have to follow that. Doing a half way job is far too risky once the job has started. Not even $800 billion sounds like all that much. Separate families and factions within the royal family have had decades to accumulate wealth.
Saudi Crackdown Targets Up to $800 Billion in Assets
The Saudi government is aiming to confiscate cash and other assets worth as much as $800 billion in its broadening crackdown on alleged corruption among the kingdom’s elite, according to people familiar with the matter. Several prominent businessmen are among those who have been arrested in the days since Saudi authorities launched the crackdown on Saturday, by detaining more than 60 princes, officials and other prominent Saudis, according to those people and others. The country’s central bank, the Saudi Arabian Monetary Authority, said late Tuesday that it has frozen the bank accounts of “persons of interest” and said the move is “in response to the Attorney General’s request pending the legal cases against them.”
The most visible – and perhaps richest- of all those arrested -in western eyes- is Al-Waleed. The Bloomberg estimate of his wealth that came out this week is $19 billion. But their own article seems to indicate a much higher number. He owns 5% of Apple -says Bloomberg-, and that share alone would be worth $45 billion.
Alwaleed, Caught in Saudi Purge, Has Assets Across the World
Apple – Alwaleed bought 6.23 million shares, or 5 percent, of the computer and mobile-device maker for $115.4 million in 1997. He made these purchases between mid-March and April of that year while the company was still struggling to turn itself around. He has since continued to hold the stake while Apple’s valuation has soared to as high as $900 billion.
Going through all these numbers, you can imagine why the ruling family, or rather the rulers within that family, are getting nervous. And that’s where we get to an interesting piece by Ryan Grim at the Intercept, who says it’s not even 32-year-old crown prince Mohammed bin Salman, known as MBS, or King Salman, 81, who control the kingdom these days, it’s the United Arab Emirates (UAE) -and maybe Washington-.
The coup has already been perpetrated.
Saudi Arabia’s Government Purge – And How Washington Corruption Enabled It
The move marks a moment of reckoning for Washington’s foreign policy establishment, which struck a bargain of sorts with Mohammed bin Salman, known as MBS, and Yousef Al Otaiba, the United Arab Emirates ambassador to the U.S. who has been MBS’s leading advocate in Washington. The unspoken arrangement was clear: The UAE and Saudi Arabia would pump millions into Washington’s political ecosystem while mouthing a belief in “reform,” and Washington would pretend to believe that they meant it.
MBS has won praise for some policies, like an openness to reconsidering Saudi Arabia’s ban on women drivers. Meanwhile, however, the 32-year-old MBS has been pursuing a dangerously impulsive and aggressive regional policy, which has included a heightening of tensions with Iran, a catastrophic war on Yemen, and a blockade of ostensible ally Qatar. Those regional policies have been disasters for the millions who have suffered the consequences, including the starving people of Yemen, as well as for Saudi Arabia, but MBS has dug in harder and harder. And his supporters in Washington have not blinked.
The platitudes about reform were also challenged by recent mass arrests of religious figures and repression of anything that has remotely approached less than full support of MBS. The latest purge comes just days after White House adviser Jared Kushner, a close ally of Otaiba, visited Riyadh, and just hours after a bizarre-even-for-Trump tweet. Whatever legitimate debate there was about MBS ended Saturday — his drive to consolidate power is now too obvious to ignore. And that puts denizens of Washington’s think tank world in a difficult spot, as they have come to rely heavily on the Saudi and UAE end of the bargain.
As The Intercept reported earlier, one think tank alone, the Middle East Institute, got a massive $20 million commitment from the UAE. And make no mistake, MBS is a project of the UAE — an odd turn of events given the relative sizes of the two countries. “Our relationship with them is based on strategic depth, shared interests, and most importantly the hope that we could influence them. Not the other way around,” Otaiba has said privately.
The kingdom’s broke. Not today, or tomorrow morning, but crown prince MBS is able to look at the numbers and go: Oh Shit! And if he doesn’t see it, he has Kushner (re: Israel) and Al-Otaiba to fill him in. All three relative youngsters -MBS is 32, Kushner is 36, Otaiba is 43- are exceedingly nervous by now.
And then you get war, or the threat of war. War in Yemen, a blockade of Qatar, and now ‘mingling’ in Lebanon with the somewhat mysterious removal of billionaire PM Hariri -allegedly on an Iran/Hezbollah assassination plot-, and outright threats against Iran and Hezbollah:
Lebanon’s Hariri Visits UAE As Home Crisis Escalates
Lebanon’s outgoing prime minister, Saad al-Hariri, made a brief visit to the United Arab Emirates from Saudi Arabia on Tuesday despite a deepening crisis back home and a rise in regional tensions triggered by his surprise resignation. Hariri announced his resignation on Saturday during a visit to his ally Saudi Arabia and has not yet returned to Lebanon. He said he believed there was an assassination plot against him and accused Iran, Saudi Arabia’s arch-rival, and its Lebanese ally Hezbollah of sowing strife in the Arab world.
His resignation has thrust Lebanon back into the frontline of the regional rivalry that pits a mostly Sunni bloc led by Saudi Arabia and allied Gulf monarchies against Shi‘ite Iran and its allies. Hariri’s office said he had flown to Abu Dhabi on Tuesday and then returned to Riyadh, but it gave no reason for the trip. It also did not say when he would return home. Hariri’s Future TV channel said he would also visit Bahrain but gave no reason.
In short: billionaire PM Hariri is a puppet. Just perhaps not of Saudi Arabia, but of Abu Dhabi. Whether he’s under house arrest in Riyadh, as has been suggested, is still unclear. But it’s a safe bet that he didn’t fly to Abu Dhabi -and back- alone, or of his own accord. He went to receive instructions.
Saudi Arabia Accuses Iran Of ‘Direct Military Aggression’ Over Yemen Missile
Saudi Arabia’s crown prince has accused Iran of “direct military aggression” by supplying missiles to Houthi rebels in Yemen, raising the stakes in an already tense standoff between the two regional rivals. Mohammed bin Salman linked Tehran to the launch of a ballistic missile fired from Yemen towards the international airport in the Saudi capital of Riyadh on Saturday. The missile was intercepted and destroyed.
“The involvement of the Iranian regime in supplying its Houthi militias with missiles is considered a direct military aggression by the Iranian regime,” the prince said on Tuesday during a phone conversation with the UK foreign secretary, Boris Johnson, according to the state-run Saudi Press Agency. He added that the move “may be considered an act of war against the kingdom”. Iran has called Riyadh’s accusations as baseless and provocative.
We have no way of knowing what is true or not about this. We do know that Saudi Arabia have been executing a barbaric war in Yemen. With weapons from the US, UK, et al. So someone firing back wouldn’t be that far-fetched.
Regardless, Pepe Escobar, a journalist who knows much more than his peers, or at least doesn’t hold back as much as them, doesn’t see this end well for MBS, UAE, Israel, US, and whoever else is in their corner. Another losing war for the US in the Middle East? We’re losing count.
The Inside Story Of The Saudi Night Of Long Knives
A top Middle East business/investment source who has been doing deals for decades with the opaque House of Saud offers much-needed perspective: “This is more serious than it appears. The arrest of the two sons of previous King Abdullah, Princes Miteb and Turki, was a fatal mistake. This now endangers the King himself. It was only the regard for the King that protected MBS. There are many left in the army against MBS and they are enraged at the arrest of their commanders.” To say the Saudi Arabian Army is in uproar is an understatement. “He’d have to arrest the whole army before he could feel secure.”
[..] The story starts with secret deliberations in 2014 about a possible “removal” of then King Abdullah. But “the dissolution of the royal family would lead to the breaking apart of tribal loyalties and the country splitting into three parts. It would be more difficult to secure the oil, and the broken institutions whatever they were should be maintained to avoid chaos.” Instead, a decision was reached to get rid of Prince Bandar bin Sultan – then actively coddling Salafi-jihadis in Syria – and replace the control of the security apparatus with Mohammed bin Nayef. The succession of Abdullah proceeded smoothly.
Power was shared between three main clans: King Salman (and his beloved son Prince Mohammed); the son of Prince Nayef (the other Prince Mohammed), and finally the son of the dead king (Prince Miteb, commander of the National Guard). In practice, Salman let MBS run the show. And, in practice, blunders also followed. The House of Saud lost its lethal regime-change drive in Syria and is bogged down in an unwinnable war on Yemen, which on top of it prevents MBS from exploiting the Empty Quarter – the desert straddling both nations. The Saudi Treasury was forced to borrow on the international markets. Austerity ruled …
[..] aversion to MBS never ceased to grow; “There are three major royal family groups aligning against the present rulers: the family of former King Abdullah, the family of former King Fahd, and the family of former Crown Prince Nayef.” Nayef – who replaced Bandar – is close to Washington and extremely popular in Langley due to his counter-terrorism activities. His arrest earlier this year angered the CIA and quite a few factions of the House of Saud – as it was interpreted as MBS forcing his hand in the power struggle. According to the source, “he might have gotten away with the arrest of CIA favorite Mohammed bin Nayef if he smoothed it over but MBS has now crossed the Rubicon though he is no Caesar. The CIA regards him as totally worthless.”
[..] The source, though, is adamant; “There will be regime change in the near future, and the only reason that it has not happened already is because the old King is liked among his family. It is possible that there may be a struggle emanating from the military as during the days of King Farouk, and we may have a ruler arise that is not friendly to the United States.”
In the end, it all comes down to a familiar theme: follow the money. And we need to seriously question the economic reality of Saudi Arabia. That graph above of their foreign reserves looks downright grim.
With money comes power. Who loses money loses power. Saudi Arabia is bleeding money. The population surge is uncanny, and there are no jobs for all these young people. Perhaps the best they can do is be a US/Israel puppet in an attempt to ‘redo’ the map of the Middle East, but that has not been a very successful project off late -like the past 100 years-.
Then again, when you’re desperate you do desperate things. And when you’re a 32-year-old crown prince with more enemies than you can keep track of, you use what money is left to 1) keep up appearances, 2) steal what others have gathered, 3) buy weapons up the wazoo, and 4) go to war.
It all paints a very dark picture for the world.
Russia won’t stand for attacks on Iran. And Iran won’t let attacks on Lebanon/Hezbollah go unanswered. All that is set to push up oil prices further, and all parties involved are just fine with that. Because they can buy more weapons with the additional profits.
I’ll leave you with Nassim Taleb’s comments on the situation. After all, Nassim’s from Lebanon, and knows that part of the world like the back of his hand:
END
Intermission
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Venezuela Just 24 Hours Away From Formal Declaration Of Default
Less than a week after Venezuela shocked the world by announcing it would proceed to restructure its massive external debt, even as it was within the grace period on hundreds of millions in unpaid interest expense, on Thursday the socialist nation confirmed it has never been closer to an official default after Reuters reported that Venezuela’s state oil-firm company, PDVSA, has not made a debt payments to India’s top oil producer ONGC for six months, and has previously used a Russian state-owned bank and another Indian energy company as intermediaries to make payments.
Reuters sources noted that PDVSA has made no payment since April on what was a $540 million backlog of dividends owed to ONGC for an investment the Indian firm made in a an energy project in Venezuela. Venezuela’s President Nicolas Maduro said last week that the country planned to restructure some $60 billion of bonds, much of it held by PDVSA, as the country struggles to meet debt repayments.
While ONGC Videsh – the overseas investment arm of ONGC confirmed to Reuters that PDVSA had fallen behind on the payments, but declined to give details on the delays.
Curiously, the Indian company appears not to be overly concerned about non-payment for half a year, and instead was willing to keep giving Maduro the benefit of the doubt: “They have got certain challenges at this stage,” ONGC Videsh said in an emailed response to Reuters’ questions. “They have assured that they are working on it (payment of dues). In due course it will be settled and follow up steps will be undertaken.” And just to underscore that it has no intention of pushing Venezuela into involuntary bankruptcy, ONGC added that “we have a good working relationship with PDVSA.”
And while we commend India’s camaraderie, Venezuela may be declared insolvent as soon as Friday morning. According to the FT reports that despite promises to the contrary from Caracas, PDVSA did not in fact make a $1.1 billion payment which was due last Friday, and while some bondholders said they expected the money to arrive soon, others pointed out that the payment deadline had clearly been missed regardless.
“There has been no official communication on the payment delays. It is really odd that funds haven’t been received with sufficient time to process if the funds were sent last week as officials indicated,” said Siobhan Morden, head of Latin American bond strategy at Nomura.
As a result, an official declaration of default may be imminent: according to Bloomberg, ISDA has agreed to review a request to determine whether an event of default has occurred due to delayed principal payments on the Petroleos de Venezuela SA bond that matured Nov. 2. The ISDA Determinations Committee will hold its first meeting regarding PDVSA at 11am on Friday, November 10, although at this point the decision is trivial: the 5 year implied probability of a PDVSA default climbed to 99.99% on Wednesday from 93.25% a year ago, according to credit-default swaps data compiled by Bloomberg.
“We’re not sure when or how long this will take, but we wouldn’t expect it to take too long,” noted Stuart Culverhouse, chief economist at Exotix. “It might be possible to argue that Venezuela made the payment but this was not transferred to holders because of problems in the payment chain, although CDS were triggered in Argentina in 2014 in a similar situation.”
In anticipation of the default, international banks and suppliers have reduced, and in most cases halted, credit to PDVSA since cash flow problems led the firm to start delaying payments to creditors in 2014. U.S. sanctions against Venezuelan officials including PDVSA executives, have also deterred banks from offering credit.
* * *
With all that said, the saga of Venezuela’s constant “pre-default” state is clearly coming to a close: in addition to the ISDA meeting tomorrow, on Monday, Nov. 13, a bond restructuring meeting is set to take place between the nation and its creditors which however is expected to yield little; in fact US investors will be wary of even attending, given that the person leading the Venezuelan side of the talks, vice-president Tareck El Aissami, has been sanctioned by the US Treasury as an alleged drug smuggler.
Investors had previously said that the potential presence of sanctioned Venezuelan officials in that meeting has raised concerns that joining it could violate sanctions, although Venezuela has promised that no sanctioned personnel would be present.
Investors have valid reason for concern: as Bloomberg reported earlier this week, lead Venezuela debt negotiator is Vice President Tareck El Aissami: he was sanctioned by the U.S. Treasury Department this year after accusations he oversaw a cocaine-smuggling network, and remains one of the nation’s iron-fisted political operatives.
Often in charge of delivering President Nicolas Maduro’s most critical messages, he blasts critics publicly, exposing supposed conspiracy rings and threatening legal action against dissident leaders from National Assembly President Julio Borges to Luisa Ortega, the public-prosecutor-turned-whistle-blower.
And now, Tareck is in charge of convincing bondholders to accept haircuts voluntarily, or as Bloomberg puts it, “of a delicate financial dance in which investors and funds risk running afoul of the U.S. Office of Foreign Assets. Not only do U.S. sanctions prohibit Americans from receiving new bonds that Venezuela would hand them as part of a restructuring, but El Aissami is designated as a narcotics trafficker under the Kingpin Act. American corporate officers dealing with him run the risk of fines and prosecution of as much as $5 million and 30 years in prison.”
“Nobody will want to go near something that could be an OFAC violation,” said Robert Koenigsberger, chief investment officer at Gramercy Funds Management, which dumped its Venezuela debt a year ago. “If the Venezuelans say, ‘We want to talk over the restructuring with you,’ I’d say, ‘I’m not letting you in the building.’ I like sleeping in my own bed at night.”
Which means that for those following the Venezuela default drama, next week could be especially exciting.
END
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings THURSDAY morning 7:00 am
Euro/USA 1.1634 UP .0039/ REACTING TO SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES RED
USA/JAPAN YEN 113.35 DOWN 0.562(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/
GBP/USA 1.3127 UP .0017 (Brexit March 29/ 2017/ARTICLE 50 SIGNED
THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/
USA/CAN 1.2695 DOWN .0033(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS THURSDAY morning in Europe, the Euro ROSE by 39 basis points, trading now ABOVE the important 1.08 level RISING to 1.1634; / Last night the Shanghai composite CLOSED UP 12.34 POINTS OR .36% / Hang Sang CLOSED UP 228.97 POINTS OR 0.79% /AUSTRALIA CLOSED UP 0.55% / EUROPEAN BOURSES OPENED RED
The NIKKEI: this TUESDAY morning CLOSED DOWN 45.11 POINTS OR .20%
Trading from Europe and Asia:
1. Europe stocks OPENED RED
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 228.97 POINTS OR 0.78% / SHANGHAI CLOSED UP 12.34 POINTS OR .36% /Australia BOURSE CLOSED UP 0.55% /Nikkei (Japan)CLOSED DOWN 45.11 POINTS OR 0.20%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1286.75
silver:$17.11
Early THURSDAY morning USA 10 year bond yield: 2.3334% !!! UP 1 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)
The 30 yr bond yield 2.805 UP 1 IN BASIS POINTS from WEDNESDAY night. (POLICY FED ERROR)
USA dollar index early THURSDAY morning: 94.56 DOWN 30 CENT(S) from YESTERDAY’s close.
This ends early morning numbers THURSDAY MORNING
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And now your closing THURSDAY NUMBERS \1 PM
Portuguese 10 year bond yield: 2.045% UP 4 in basis point(s) yield from WEDNESDAY
JAPANESE BOND YIELD: +.03% UP 1/2 in basis point yield from WEDNESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.533% UP 5 IN basis point yield from WEDNESDAY
ITALIAN 10 YR BOND YIELD: 1.816 UP 6 POINTS in basis point yield from WEDNESDAY
the Italian 10 yr bond yield is trading 29 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.375% UP 5 IN BASIS POINTS ON THE DAY
END
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IMPORTANT CURRENCY CLOSES FOR THURSDAY
Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1645 UP ,0049 (Euro UP49 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 113.31 DOWN 0.603(Yen UP 60 basis points/
Great Britain/USA 1.3135 UP 0.0024( POUND UP 34 BASIS POINTS)
USA/Canada 1.2693 DOWN.0034 Canadian dollar UP 34 Basis points AS OIL ROSE TO $57.16
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This afternoon, the Euro was UP 49 to trade at 1.1645
The Yen ROSE to 113.31 for a GAIN of 60 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE
The POUND ROSE BY 24 basis points, trading at 1.3131/
The Canadian dollar ROSE by 34 basis points to 1.2694 WITH WTI OIL RISING TO : $57.16
The USA/Yuan closed AT 6.640
the 10 yr Japanese bond yield closed at +.030% UP 1/2 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 1 IN basis points from WEDNESDAY at 2.326% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.806 UP 3 in basis points on the day /
Your closing USA dollar index, 94.54 DOWN 33 CENT(S) ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for THURSDAY: 1:00 PM EST
London: CLOSED DOWN 45.62 POINTS OR 0.61%
German Dax :CLOSED DOWN 199.86 POINTS OR 1.49%
Paris Cac CLOSED DOWN 63.68 POINTS OR 1.16%
Spain IBEX CLOSED DOWN 87.60 POINTS OR 0.86%
Italian MIB: CLOSED DOWN 189.99 POINTS OR 0.83%
The Dow closed DOWN 101.42 POINTS OR .43%
NASDAQ WAS closed DOWN 39.06 Points OR 0.58% 4.00 PM EST
WTI Oil price; 57.16 1:00 pm;
Brent Oil: 63.93 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 59.38 UP 15/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 15 BASIS PTS)
TODAY THE GERMAN YIELD RISES TO +.375% FOR THE 10 YR BOND 1.00 PM EST EST
END
This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM
Closing Price for Oil, 4:30 pm/and 10 year USA interest rate:
WTI CRUDE OIL PRICE 4:30 PM:$57.10
BRENT: $63.54
USA 10 YR BOND YIELD: 2.333% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.812%
EURO/USA DOLLAR CROSS: 1.1640 UP .0045
USA/JAPANESE YEN:113.44 up 0.481
USA DOLLAR INDEX: 94.53 DOWN 34 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.3148 : UP 36 POINTS FROM LAST NIGHT
Canadian dollar: 1.2674 UP 54 BASIS pts
German 10 yr bond yield at 5 pm: +0.375%
END
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Tax Tantrum Sparks Stock Slump As Credit Crash Continues
To the middle class…
“We’re not sure when or how long this will take, but we wouldn’t expect it to take too long,” noted Stuart Culverhouse, chief economist at Exotix. “It might be possible to argue that Venezuela made the payment but this was not transferred to holders because of problems in the payment chain, although CDS were triggered in Argentina in 2014 in a similar situation.”
In anticipation of the default, international banks and suppliers have reduced, and in most cases halted, credit to PDVSA since cash flow problems led the firm to start delaying payments to creditors in 2014. U.S. sanctions against Venezuelan officials including PDVSA executives, have also deterred banks from offering credit.
* * *
With all that said, the saga of Venezuela’s constant “pre-default” state is clearly coming to a close: in addition to the ISDA meeting tomorrow, on Monday, Nov. 13, a bond restructuring meeting is set to take place between the nation and its creditors which however is expected to yield little; in fact US investors will be wary of even attending, given that the person leading the Venezuelan side of the talks, vice-president Tareck El Aissami, has been sanctioned by the US Treasury as an alleged drug smuggler.
Investors had previously said that the potential presence of sanctioned Venezuelan officials in that meeting has raised concerns that joining it could violate sanctions, although Venezuela has promised that no sanctioned personnel would be present.
Investors have valid reason for concern: as Bloomberg reported earlier this week, lead Venezuela debt negotiator is Vice President Tareck El Aissami: he was sanctioned by the U.S. Treasury Department this year after accusations he oversaw a cocaine-smuggling network, and remains one of the nation’s iron-fisted political operatives.
Often in charge of delivering President Nicolas Maduro’s most critical messages, he blasts critics publicly, exposing supposed conspiracy rings and threatening legal action against dissident leaders from National Assembly President Julio Borges to Luisa Ortega, the public-prosecutor-turned-whistle-blower.
And now, Tareck is in charge of convincing bondholders to accept haircuts voluntarily, or as Bloomberg puts it, “of a delicate financial dance in which investors and funds risk running afoul of the U.S. Office of Foreign Assets. Not only do U.S. sanctions prohibit Americans from receiving new bonds that Venezuela would hand them as part of a restructuring, but El Aissami is designated as a narcotics trafficker under the Kingpin Act. American corporate officers dealing with him run the risk of fines and prosecution of as much as $5 million and 30 years in prison.”
“Nobody will want to go near something that could be an OFAC violation,” said Robert Koenigsberger, chief investment officer at Gramercy Funds Management, which dumped its Venezuela debt a year ago. “If the Venezuelans say, ‘We want to talk over the restructuring with you,’ I’d say, ‘I’m not letting you in the building.’ I like sleeping in my own bed at night.”
Which means that for those following the Venezuela default drama, next week could be especially exciting.
END
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings THURSDAY morning 7:00 am
Euro/USA 1.1634 UP .0039/ REACTING TO SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES RED
USA/JAPAN YEN 113.35 DOWN 0.562(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/
GBP/USA 1.3127 UP .0017 (Brexit March 29/ 2017/ARTICLE 50 SIGNED
THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/
USA/CAN 1.2695 DOWN .0033(CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS THURSDAY morning in Europe, the Euro ROSE by 39 basis points, trading now ABOVE the important 1.08 level RISING to 1.1634; / Last night the Shanghai composite CLOSED UP 12.34 POINTS OR .36% / Hang Sang CLOSED UP 228.97 POINTS OR 0.79% /AUSTRALIA CLOSED UP 0.55% / EUROPEAN BOURSES OPENED RED
The NIKKEI: this TUESDAY morning CLOSED DOWN 45.11 POINTS OR .20%
Trading from Europe and Asia:
1. Europe stocks OPENED RED
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 228.97 POINTS OR 0.78% / SHANGHAI CLOSED UP 12.34 POINTS OR .36% /Australia BOURSE CLOSED UP 0.55% /Nikkei (Japan)CLOSED DOWN 45.11 POINTS OR 0.20%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1286.75
silver:$17.11
Early THURSDAY morning USA 10 year bond yield: 2.3334% !!! UP 1 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. (POLICY FED ERROR)
The 30 yr bond yield 2.805 UP 1 IN BASIS POINTS from WEDNESDAY night. (POLICY FED ERROR)
USA dollar index early THURSDAY morning: 94.56 DOWN 30 CENT(S) from YESTERDAY’s close.
This ends early morning numbers THURSDAY MORNING
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And now your closing THURSDAY NUMBERS \1 PM
Portuguese 10 year bond yield: 2.045% UP 4 in basis point(s) yield from WEDNESDAY
JAPANESE BOND YIELD: +.03% UP 1/2 in basis point yield from WEDNESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.533% UP 5 IN basis point yield from WEDNESDAY
ITALIAN 10 YR BOND YIELD: 1.816 UP 6 POINTS in basis point yield from WEDNESDAY
the Italian 10 yr bond yield is trading 29 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.375% UP 5 IN BASIS POINTS ON THE DAY
END
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IMPORTANT CURRENCY CLOSES FOR THURSDAY
Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1645 UP ,0049 (Euro UP49 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 113.31 DOWN 0.603(Yen UP 60 basis points/
Great Britain/USA 1.3135 UP 0.0024( POUND UP 34 BASIS POINTS)
USA/Canada 1.2693 DOWN.0034 Canadian dollar UP 34 Basis points AS OIL ROSE TO $57.16
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This afternoon, the Euro was UP 49 to trade at 1.1645
The Yen ROSE to 113.31 for a GAIN of 60 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE
The POUND ROSE BY 24 basis points, trading at 1.3131/
The Canadian dollar ROSE by 34 basis points to 1.2694 WITH WTI OIL RISING TO : $57.16
The USA/Yuan closed AT 6.640
the 10 yr Japanese bond yield closed at +.030% UP 1/2 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 1 IN basis points from WEDNESDAY at 2.326% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.806 UP 3 in basis points on the day /
Your closing USA dollar index, 94.54 DOWN 33 CENT(S) ON THE DAY/1.00 PM/BREAKS RESISTANCE OF 92.00
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for THURSDAY: 1:00 PM EST
London: CLOSED DOWN 45.62 POINTS OR 0.61%
German Dax :CLOSED DOWN 199.86 POINTS OR 1.49%
Paris Cac CLOSED DOWN 63.68 POINTS OR 1.16%
Spain IBEX CLOSED DOWN 87.60 POINTS OR 0.86%
Italian MIB: CLOSED DOWN 189.99 POINTS OR 0.83%
The Dow closed DOWN 101.42 POINTS OR .43%
NASDAQ WAS closed DOWN 39.06 Points OR 0.58% 4.00 PM EST
WTI Oil price; 57.16 1:00 pm;
Brent Oil: 63.93 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 59.38 UP 15/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 15 BASIS PTS)
TODAY THE GERMAN YIELD RISES TO +.375% FOR THE 10 YR BOND 1.00 PM EST EST
END
This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM
Closing Price for Oil, 4:30 pm/and 10 year USA interest rate:
WTI CRUDE OIL PRICE 4:30 PM:$57.10
BRENT: $63.54
USA 10 YR BOND YIELD: 2.333% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.812%
EURO/USA DOLLAR CROSS: 1.1640 UP .0045
USA/JAPANESE YEN:113.44 up 0.481
USA DOLLAR INDEX: 94.53 DOWN 34 cent(s)/
The British pound at 5 pm: Great Britain Pound/USA: 1.3148 : UP 36 POINTS FROM LAST NIGHT
Canadian dollar: 1.2674 UP 54 BASIS pts
German 10 yr bond yield at 5 pm: +0.375%
END
TRADING IN GRAPH FORM FOR THE DAY
Stocks Tumble On News Senate Tax Plan To Delay Corporate Tax Cut Until 2019
Confirming reports from earlier this week that the Senate GOP tax plan would delay the corporate tax cut for (at least) one year, a move that would strip the proposed tax reform of its most potent benefit, moments ago the Wapo reported that in a few hours, Senate Republicans will propose delaying a cut in the corporate tax rate from 35 percent to 20 percent until 2019. Bloomberg confirmed the news, quoting Bill Cassidy who said in an interview that that Senate Finance Committee tax legislation proposal will include a one-year delay before cutting the corporate tax rate to 20%.
The compromise would be a major departure from President Trump’s insistence on immediate changes that he says “are necessary to spur the economy.” And while some Senate Republicans objected to the one year delay, they were overruled.
As Bloomberg adds, the Senate tax writers will also propose keeping number of individual income-tax brackets at seven in a departure from the House bill that condenses the number to four, Sen. Bill Cassidy tells reporters. Cassidy also says Senate proposal won’t keep top rate at 39.6%, though doesn’t state what new top individual rate would be
In an attempt to offset the delayed economic boost from excess corporate spending, the WaPo explains that to prevent companies from waiting until 2019 to invest, “Senate Republicans will propose to allow companies to immediately deduct all capital investments in 2018 to incentivize them to spend more money immediately, the people said.”
The reason for the delay is simple: there is not enough revenue. “The one-year delay would lower the cost of the tax cut bill by more than $100 billion, and negotiators are trying to preserve as much revenue as they can for other changes.” The revision could also delay decisions by companies to move back to the United States from overseas or have companies hold off on other decisions as they wait for the corporate rate to fall.
As we have explained previously, the Senate approach is different than House Republicans are taking as it is limited by practical considerations: while the House is advancing a bill that would lower the corporate tax rate in 2018, they are also having problems dealing with the total cost of their bill, which has ballooned beyond the $1.5 trillion price tag they were permitted under budget rules.
And while Treasury Secretary Steven Mnuchin told Bloomberg yesterday that the White House’s “strong preference” would be for the tax cut to go into effect next year, the White House is not expected to threaten blocking the bill over this change.
In other words, despite the various teasers how the 1 year delay is immaterial, the biggest boost to the economy from the Senate’s tax bill is about to be eliminated. The result was immediate, with stocks dumping and the VIX spiking.
end
The Republican tax plan will absolutely crush the housing market in sectors like San Francisco, San Jose, Seattle, NY and other major centres
(courtesy zerohedge)
The Republican Tax Plan Will Crush These Housing Markets
For the past few weeks, Chuck Schumer and Nancy Pelosi have screamed to anyone who would listen that the GOP tax plan is nothing more than a tax break for millionaires and an attack on middle class working families. But, as the Wall Street Journal points out this morning, America’s millionaire, billionaire, private jet owners living in expensive urban areas are set to lose ‘bigly’ if Trump’s $500,000 cap on the mortgage interest deduction survives.
But in the priciest markets, concentrated in some of the nation’s largest coastal cities, the impact could be significant. In the San Jose, Calif., metropolitan area, 75% of new mortgage loans thus far in 2017 were for more than $500,000, according to an analysis by CoreLogic Inc., a housing data provider. The median home price there is more than $1 million, and even small starter homes can climb well above the proposed cap.
In the San Francisco metro area, 60% of new loans were for more than $500,000, while in Los Angeles and San Diego, the figures were 44% and 37%, respectively.
The impact wouldn’t be limited to California. In Honolulu, 48% of loans were greater than $500,000, while the figures for the New York area and Seattle were 22% and 25%, respectively.
An analysis by ATTOM Data Solutions yielded similar results. In the Washington, D.C., area, 35% of purchase and refinance loans in 2017 thus far were for more than $500,000. In Hawaii, 15% of loans fell into that category, while in California 12% did.
In addition to capping the mortgage interest deduction, the current GOP bill also limits the amount of property taxes that households can deduct to $10,000 annually.
Not surprisingly, the assault on McMansions has angered the realtor lobby which we’re certain will fight tooth and nail to preserve the status quo.
Jeff Barnett, a California realtor and vice chairman of the National Association of Realtors’ large-firm real-estate services committee, said his area will be hit “very, very hard” if the tax bill passes. Even if corporate tax cuts help boost the economy, he doesn’t think that will be enough to compensate.
“You’ve taken away so many incentives for housing, they can’t spend” the money from any extra economic growth, he said.
Of course, as we pointed out earlier this week (see: Trump Is About To Crush Home Prices In Counties That Voted For Hillary: Here’s Why),Clinton won the vote in the top 45 counties in the country with the highest median home prices which has resulted in rampant speculation that the mortgage cap is nothing more than a clever punishment levied on Democratic voters.
As Dennis Lee calculated, “assuming that all of these homeowners are taxed at a marginal rate of 39.6%, we find that the increase in tax burden during the first 12 months of homeownership driven solely by the mortgage interest and property tax deduction caps varies from $0 for the county with the 20th highest median home price (San Miguel County, Colorado) to approximately $7,200 for the highest-priced county (San Francisco County, California).” Barclays’ conclusion: these counties – all of which are largely pro-Clinton – would need a 0-11% decline in their median home prices to keep the after-tax monthly mortgage and property tax payments the same for would-be buyers.
Of course, only time will tell whether the swamp (a.k.a. “The National Association of Realtors” in this case) will allow this particular component of the GOP tax bill to survive…
END
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