Ladies and Gentlemen, Harvey Organ’s 10 -15-14 Udate
As many of you know, my website was pulled Friday afternoon and I could not post. Here is a copy of the email that I received.
Oct 10 (3 days ago)
to me, blogger-dmca-n.
Hello,
We’d like to inform you that we’ve received a court order regarding your blog http://harveyorgan.blogspot.com/. In accordance with the terms of the court order, we have removed content previously located at:
http://harveyorgan.blogspot.com/
A copy of the court order we received is attached. Thank you for your understanding.
Terms of Service: http://www.google.com/intl/en/policies/terms/
Content Policy: http://www.blogger.com/content.g
The Google Team
end
I have sent 5 emails to google for the copy of the court order to no avail.
I will be creating another website of my own. JS Slear and Silverdoctors have been gracious enough to allow me to post on their websites.
All material that I use has been from public sources and I never infringe on copyright laws.
Gold: 1244.10 up $10.50
Silver: 17.41 up 6 cents
In the access market:
Gold 1242.00
silver 17.50
The gold comex again had 0 notices filed for the 6th straight day, which is totally unusual for an active month. There are a little less than 5 tonnes of gold standing.
In silver, the open interest continues to remain high at 169,329 contracts. To boot, the December silver OI remains extremely high at 119,329 contracts.
The bankers were all over gold and silver today but both metals rebuffed all attempts of containment.
The huge volatility is not too good for our banker derivative friends.
Let’s head immediately to see the data has in store for us today.
First: GOFO rates/
All months basically moved slightly in both directions with the various GOF) months. On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates
London good delivery bars are still quite scarce.
Oct 15 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
+.065% +.07750% +.090% +.11% + .180%
Oct 14 .2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
+.02% +.03% +.045% +.0975 .180%
end
Let us now head over to the comex and assess trading over there today,
Here are today’s comex results:
The total gold comex open interest surprisingly rose by 126 contracts from 397,729 up to 397,855 with gold up $4.30 yesterday. We are now in the active delivery month of October and generally this is a very poor month for deliveries. The October contract month actually fell by 72 contracts down to 987. We had 0 notices filed yesterday so we lost another 72 contracts or 7,200 additional oz will not stand for the October contract month. No doubt that these guys were cash settled. The November contract month saw its OI fall by 8 contracts down to 313. The December contract fell by 538 contracts down to 285,881. The estimated volume today was excellent at 247,461 contracts. The confirmed volume yesterday was a poor at 116,058. Strangely this was the 6th consecutive day of 0 gold notices filed and only 3 out of 9 filing days had positive readings. The first two days had 98.7% of the entire total number of notices filed so far. They must have a great difficulty finding gold to serve upon our notices. That fact that London is also very close to backwardation kind of confirms this.
The total silver Comex OI fell by 482 contracts despite the fact that silver was up yesterday to the tune of 6 cents. It seems that the shorts are reticent to supply for silver contracts and they are starting to cover for fear of major entities taking delivery. Tonight the silver OI complex rests at 169,329 contracts. In ounces, this represents 847 million oz or 121.00% of silver annual production (annual production of 700 million oz ex China). In commodity law generally the OI is represented by 3 to 5% of annual production. These silver contracts are in very strong hands and as I have indicated to you on countless occasions, this will continue to bring nightmares to our bankers. Probably this is as good a reason as ever for the bankers to raid on a continual basis trying to force those longs to puke their interests.No doubt that the open interest for tomorrow will be quite high.
We are in the non active silver contract of October and here the OI fell by 11 contracts down to 183 contracts. We had 21 notices served upon yesterday so we gained 10 contract or an additional 50,000 ounces will stand for delivery in October. November is also a non active delivery month and here the OI fell by 3 contracts down to 123 contracts.
The December silver contract is a biggy contract month and tonight it fell to 119,056 contracts for a loss of 587 contracts. No doubt the December contract month may provide all the fireworks if our major entity tries to take delivery of much of the comex silver. In ounces, the December contract equates to 595 million oz or 85.0% of annual global production (ex China). The estimated volume today was excellent at 63,494. The confirmed volume yesterday was poor at 26,744 contracts. Both Bill Holter and I strongly believe that only one entity could possibly behind the majority of these longs and that entity is the sovereign Chinese government.
Data for the October delivery month.
October standings
Oct 15.2014
Gold
Ounces
Withdrawals from Dealers Inventory in oz nil
Withdrawals from Customer Inventory in oz 32.15 oz kilobar: 1 (JPMorgan)
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz 9645.000 oz
300 kilobars/Scotia
No of oz served (contracts) today 0 contracts( zero oz)
No of oz to be served (notices) 987 contracts (98,700 oz)
Total monthly oz gold served (contracts) so far this month 483 contracts (48,300 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
15,000.27 oz
Total accumulative withdrawal of gold from the Customer inventory this month
542,335.11 oz
Today, we had zero dealer transactions today
total dealer withdrawal: nil oz
total dealer deposit: nil oz
we had 1 customer withdrawal:
i) Out of JPMorgan: 32.15 oz or 1 kilobar
total customer withdrawals: 32.15 oz
we had 1 customer deposit:
i) Into Scotia: 9645.000 oz
(300 kilobars)
total customer deposit:9645.000 oz
We had 0 adjustment:
Total Dealer inventory: 945,488.206 oz 29.408 tonnes
Total gold inventory (dealer and customer) = 8.989 million oz. (279.60) tonnes)
A few weeks ago we had total gold inventory of 303 tonnes, so during this short time period 24 tonnes have been transferred out. We will be watching this closely!
Today, 0 notices was 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 0 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices stopped by JPMorgan customer account.
We had 0 notices served upon our longs for 0 oz of gold. In order to calculate what will be standing for delivery in September, I take the number of contracts served so far this month at 483 x 100 oz = 48,300 oz,to which I add the difference between the open interest for the front month of October(987 minus the number of notices served upon today (0) x 100 oz = 147,000 oz or 4.56 tonnes.
We lost 7200 oz of gold standing tonight.
Thus: October standings:
483 contracts x 100 oz = 48,300 oz + (987 ) – (0)x 100 = 147,000 oz or 4.56 tonnes
end
Oct 15/2014:
October silver: Initial standings
Silver Ounces
Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory nil oz
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory nil
No of oz served (contracts) 10 contracts (50,000 oz)
No of oz to be served (notices) 173 contracts (865,000 oz)
Total monthly oz silver served (contracts) 563 contracts (2,815,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month 1,783,683.3
Total accumulative withdrawal of silver from the Customer inventory this month 2,456,312.4 oz
Today, we had 0 deposits into the dealer account:
total dealer deposit:nil oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 0 customer withdrawals:
total customer withdrawal nil oz
We had 0 customer deposit:
total customer deposits: nil oz
we had 1 adjustment:
i) Out of the Brinks vault:
60,127.770 oz was removed from the dealer and this landed into the customer account at Brinks
Total dealer inventory: 66.573 million oz
Total of all silver inventory (dealer and customer) 184.102 million oz.
The CME reported that we had 10 notices filed for 50,000 oz today. To calculate what will stand for this active delivery month of October, I take the number of contracts served for the entire month at 563 x 5,000 oz per contract or 2,815,000 ounces upon which I add the difference between the open interest for the front month of October (183) – the number of notices served upon today (10) x 5000 oz per contract
Thus Oct. standings for silver: 563 notices x 5,000 oz per notice or 2,815,000 oz + (183) – (10) x 5,000 oz = 3,680,000 oz
we gained an additional 50,000 silver ounces that will stand for silver at the Comex for the October delivery month.
this level will continue to rise as the month progresses.
It looks like China is still in a holding pattern ready to pounce when needed.
The open interest on silver is still highly elevated. Gold has a low OI with a low gold price. Silver has a high OI with a low silver price. Something has got to give!!
As far as the silver inventory, it looks compromised as well. Shanghai is in complete silver backwardation and yet comex seems to import huge amounts of silver.
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
Oct 15.2014 GLD lost back the gold it gained yesterday to the tune of 2.09 tonnes/Inventory back to 759.14 tonnes
Oct 14. GLD inventory/stays the same at 761.23 tonnes
Oct 13.2014: this is good/it is quite possible that the gold has finally hit empty (due to gold near backwardation)
GLD 761.23 tonnes up 1.79 tonnes today.
Oct 10.2014: we lost 2.64 tonnes of gold from the GLD and this gold will head to Shanghai/inventory 759.44 tonnes
Oct 8.2014: we lost 5.39 tonnes of gold today and this gold will be heading to the friendly confines of Shanghai, China /New inventory 762.08 tonnes
oct 7.2014: as of 6 pm est, no change in gold inventory/767.47 tonnes
oct 6.2014: as of 6 pm est no change in inventory/767.47 tonnes
Oct 3.2014: as of 5 pm est no change in inventory/767.47 tonnes
Oct 2.2014: we lost another 1.19 tonnes of gold inventory heading towards Shanghai. (inventory 767.47 tonnes)
Oct 1.2014: we lost another 1.20 tonnes of gold inventory heading towards Shanghai. (inventory: 768.66 tonnes)
sept 30.2014: we lost another 2.39 tonnes of gold inventory heading towards Shanghai. (inventory 769.86 tonnes)
sept 29.2014: we lost another 1.2 tonnes of gold inventory heading straight to Shanghai. Later in this report you will see that 50 tonnes of gold exited SGE. Thus the 1.2 tonnes is a drop in the bucket as to the inventory needed. No doubt much of the gold will now come from the FRBNY:
current inventory: 772.25 tonnes.
sept 26.2014: no change in inventory/773.45 tonnes
sept 25 no change in gold inventory/773.45 tonnes
Sept 24.2014: no change in gold inventory/773.45 tonnes
Today we lost 2.09 tonnes of gold inventory at GLD
inventory: 759.14 tonnes.
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD gold: 759.14 tonnes.
end
And now for silver:
Oct 15.2014 no change in silver inventory/344.565 million oz
Oct 14.2014 today we had a loss of 1.201 million oz/SLV inventory rests at 344.565 million oz
Oct 13.2014: no change in silver inventory so far:
345.766 million oz
oct 10.2014: we lost a massive 3.25 million oz of silver leaving the SLV. Inventory 345.766 million oz
Oct.8/2014 no change in silver inventory 349.071 million oz
Oct 7.2014: a reduction of silver inventory to the tune of 863,000 oz/new inventory at SLV 349.071 million oz
Oct 6.2014: no change in inventory/349.934 million oz.
Oct 3.2014/ we had a minor loss of 152,000 oz and this is usually to pay for fees./Inventory 349.934
oct 2.2014: no change in silver inventory/350.086 million oz.
Oct 1 late last night at 11 pm I was notified by Fred that they added a remarkably high 4.075 million oz of silver inventory at the SLV.
new inventory: 350.086 million oz.
sept 30.2104: no change in inventory/inventory 346.011 million oz
sept 29.2014: an addition of 767,000 oz/new inventory 346.011 million oz
sept 26 no change in inventory/remains at 345.244 million oz.
sept 25 another huge addition of 2.398 million oz of silver was added late last night (after I posted). New inventory 345.244 million oz.
Sept 24.2014: no change in silver inventory at the SLV/remains at 342.846 million oz.
Sept 23.2014: another gain of 2.397 million oz of silver into the SLV/inventory 342.846 million oz (note the difference between GLD and SLV movements)
sept 22.2014: strange again/inventory remains the same: 340.449 million oz
Sept 19.2014: inventory remains constant at 340.449 million oz
Sept 18.2014: late last night we picked up another 960,000 oz/inventory now 340.449 million oz
sept 17.2014: no change in silver inventory 339.489 million oz
Sept 16.2014: no change in silver inventory at the slv/339.489 million oz
Today, Oct 15.2014
Inventory tonight no change in inventory rests/silver inventory at 344.565 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now deeply into the positive to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 6.4% percent to NAV in usa funds and Negative 6.8% to NAV for Cdn funds
Percentage of fund in gold 61.20%
Percentage of fund in silver:38.20%
cash .6%
.( Oct 15/2014)
2. Sprott silver fund (PSLV): Premium to NAV rises to positive 4.09% NAV (Oct 15/2014) will pick up later
3. Sprott gold fund (PHYS): premium to NAV rises to negative -0.72% to NAV(Oct 15/2014) will pick up later.
Note: Sprott silver trust back hugely into positive territory at 4.09%.
Sprott physical gold trust is back in negative territory at -0.72%
Central fund of Canada’s is still in jail.
end
Now your more important physical stories today:
Important read….
(courtesy Mark O’Byrne)
“Secret Scheme To Manipulate The Price Of Silver” – Lawsuits Against Banks Proceed
Published in Market Update Precious Metals on 15 October 2014
By Mark O’Byrne
The lawsuits against banks that alleges they engaged in a secret scheme to manipulate the price of silver bullion is proceeding.
Gold fixing in London at NM Rothschild and Sons began in September 1919
Litigation alleging that Deutsche Bank, Bank of Nova Scotia and HSBC Plc illegally fixed the price of silver were centralised in a Manhattan federal court yesterday. The banks have been accused of rigging the price of billions of dollars in silver to the detriment of investors globally.
Lawsuits filed by investors since July over the allegations were consolidated yesterday in the U.S. District Court for the Southern District of New York, following an order issued last Thursday by the U.S. Judicial Panel on Multidistrict Litigation, a special body of federal judges that decides when and where to consolidate related lawsuits.
The banks abused their position of controlling the daily silver fix to reap illegitimate profit from trading, hurting other investors in the silver market who use the benchmark in billions of dollars of transactions, according to the suit.
Investors claim, the banks unlawfully manipulated silver and silver futures.
Sharelynx
The U.S. Judicial Panel on Multidistrict Litigation ruled that the cases should be handled by U.S. District Judge Valerie Caproni in Manhattan, who is already overseeing similar litigation over alleged gold price fixing.
Three lawsuits were originally filed in Manhattan, and two were filed in Brooklyn. The plaintiffs in the Brooklyn lawsuits had sought to have the litigation consolidated there.
The banks had also asked that the litigation be consolidated in Brooklyn, in the Eastern District of New York. However, the multidistrict litigation panel said Manhattan made more sense because the defendants all had corporate offices there and also because the cases involved issues similar to the gold litigation.
The plaintiffs allege that the banks abused their power as participants in the silver fix, a London based benchmark pricing method dating back to the Victorian era, in which banks fixed silver prices once a day by phone.
In August, the system was replaced by a new benchmark system administered by the CME (Chicago Mercantile Exchange) and Thomson Reuters.
HSBC spokesman Neil Brazil declined to comment and representatives of the other banks did not immediately respond to requests for comment.
This follows the initiation of similar actions against some bullion banks for alleged gold price manipulation earlier this year. The three named banks, Deutsche Bank, Bank of Nova Scotia, and HSBC are alleged to have abused their position at the LBMA to profit from inside knowledge.
The fixing of the price of silver is a daily operation where banks on the panel of the LBMA agree on a price for the precious metals which are then used throughout the financial, jewellery and mining industries throughout the day.
It is alleged that some of the banks who fix the price, position themselves advantageously in the silver market before the price is made public.
“Defendants have a strong financial incentive to establish positions in both physical silver and silver derivatives prior to the public release of silver fixing results, allowing them to reap large illegitimate profits,” plaintiff Scott Nicholson told the AFP.
Separately, Bullion Desk reported yesterday that JPMorgan Chase Bank is now the fifth accredited member of the silver pricing benchmark, the LBMA has confirmed, with others parties “in the pipeline”, a spokesman said.
The American multinational bank which has been the subject of silver manipulation allegations by Max Keiser and others, took part in its first silver benchmarking session yesterday.
A spokesperson said they had completed “strict regulatory controls” for accredited members..
JP Morgan becomes the fifth member, alongside HSBC Bank USA, Mitsui & Co Precious Metals, the Bank of Nova Scotia – ScotiaMocatta and UBS AG.
Furthermore, the LBMA has confirmed that several other parties are also in the process of joining the list, subject to passing regulatory requirements.
Several Chinese banks have expressed interest in participating in the new global price setting mechanism for silver, according to the head of the LBMA.
The LBMA ushered in a new era of electronic benchmarking for London’s precious metals market in August when an algorithm was used for the first time to set the benchmark price for silver after recent scandals regarding price fixing and concerns about the nature of the gold and silver fix.
It will be interesting to see if Chinese banks partake in the new fix process as the concern is that the fixes remain the play things of certain western banks and are not representative of global physical demand and supply of actual gold and silver bullion.
Manipulation of the silver market was covered in a recently released ‘Get REAL’ Special on Silver presented by Jan Skoyles. Mark O’Byrne of Goldcore.com was interviewed and the interview was an in depth look at this silver market today.
See Video here
GOLDCORE MARKET UPDATE
Today’s AM fix was USD 1,223.50, EUR 967.58 and GBP 768.63 per ounce.
Yesterday’s AM fix was USD 1,233.00, EUR 974.55 and GBP 772.41 per ounce.
Gold climbed $0.70 or 0.06% to $1,233.40 per ounce and silver slipped $0.05 or 0.29% to $17.40 per ounce yesterday.
Silver in U.S. Dollars – 1984 to October 14, 2014 (Thomson Reuters)
Gold in Singapore fell 0.3% to $1,222.10 an ounce. The metal hit a four week high of $1,237.90 on Tuesday, before pulling back to close 0.4% lower.
Silver for immediate delivery or Swiss storage fell 1.4% to $17.19 an ounce in London. Palladium dropped 1.6% to $782.10 an ounce. Platinum lost 1% to $1,254 an ounce.
Gold fell on low volume again and futures trading volume was 40% below the average for the past 100 days for this time of day, data compiled by Bloomberg show.
Volumes for the benchmark spot contract on the Shanghai Gold Exchange are about 33% lower than in late September, the latest data show however physical deliveries remain very high and are headed for 2,000 tonnes again in 2014.
Yesterday, Germany’s Economy Ministry cut its economic growth forecasts for 2014 and 2015, before the Federal Reserve releases its Beige Book on economic conditions.
end
Fighting back, First Majestic delays sale of silver amid price weakness
Submitted by cpowell on Tue, 2014-10-14 23:38. Section: Daily Dispatches
7:42p ET Tuesday, October 14, 2014
Dear Friend of GATA and Gold:
Ninety-nine point nine percent of gold and silver mining companies and their executives are brain-dead, merely geologists and accountants, unaware of the monetary nature of their product and how their product is priced by surreptitious market intervention by central banks. But here and there certain companies and their executives have a clue, and First Majestic Silver Corp. today again proclaimed itself to have far more than a clue.
First Majestic announced that it won’t sell its metal into the recent weakness in the silver futures markets. In a statement the company said:
“Silver prices declined 19 percent in the third quarter, representing the second largest quarterly decline since the financial crisis in 2008. As a result of this weakness, the company decided to temporarily suspend silver sales in an attempt to maximize future profits. This suspension of sales will result in lower revenues and earnings for the third quarter. However, it is likely that these inventories of unsold ounces will instead be sold in the fourth quarter. As of September 30, 2014, approximately 934,000 ounces of silver were held in inventory.”
This isn’t the first time that First Majestic has withheld production amid price weakness. The company and its chief executive officer, Keith Neumeyer, long have acknowledged that the monetary metals are monetary and subject to attack by issuers of other forms of money. Unlike most other gold and silver mining companies, First Majestic is not inclined to cooperate with such attacks. It even mints its own silver rounds, bars, and ingots and sells them directly to the public:
https://www.store.firstmajestic.com/
First Majestic’s statement is posted at the company’s Internet site here:
http://tinyurl.com/ol8j9fq
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Oil price dip is Saudi bow to China, Leeb tells King World News
Submitted by cpowell on Tue, 2014-10-14 23:51. Section: Daily Dispatches
7:50p ET Tuesday, October 14, 2014
Dear Friend of GATA and Gold:
Fund manager Stephen Leeb tonight tells King World News that the decline in oil prices may be part of a scheme between Saudi Arabia and China to facilitate their trade as Saudi Arabia moves out of the United States’ political orbit. An excerpt from the interview is posted at the KWN blog here:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/10/14_H…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Gold stubs Swiss National Bank’s toe, and the Financial Times says ‘ouch!’
Submitted by cpowell on Wed, 2014-10-15 00:13. Section: Daily Dispatches
On its own hook the FT’s “news” story accuses the Swiss gold initiative of “absurdities,” mockery the newspaper has yet to hurl against central banks even as they intervene openly in every market and resort to “negative interest rates.” Yes, in the FT’s view only gold as money can be “absurd.” And largely surreptitious control of the valuation of all capital, labor, goods, and services in the world by an unelected, supra-national elite isn’t totalitarian — it’s good government! Central banking, heil!
* * *
Swiss Fight to Block Public Gold Vote
By Delphine Strauss
Financial Times, London
Tuesday, October 14, 2014
http://www.ft.com/intl/cms/s/0/a886cb26-53b4-11e4-8285-00144feab7de.html
Switzerland’s central bank is flexing its muscles to defend its cap on the Swiss franc. Its battle to fend off deflation — in which it sees the exchange rate as its chief weapon — is already complicated by the slide in the euro that followed European Central Bank easing. Now the SNB is fighting on a new front: to block a populist motion that would force it to almost treble the proportion of reserves held in gold.
At the end of November, Swiss citizens will vote on an initiative that calls on the central bank to hold at least 20 per cent of its assets in gold; to repatriate any gold stored abroad; and to refrain from selling any gold in future.
The “Save our Swiss Gold” initiative — launched by members of the ultra-conservative Swiss People’s Party — seeks to tap into a current of Swiss public opinion that is fiercely proud of the country’s independence, and unsettled by the economic struggles of its neighbours. But it has drawn criticism from across the political spectrum.
The government has rejected the idea, saying last year that “gold no longer has any meaning for monetary policy.” Parliament voted against it by a large majority.
For the central bank, the measures are not merely an anachronism: they pose an immediate threat. Since September 2011, when it promised to buy as much foreign currency as needed to stop the Swiss franc strengthening past SFr1.20 to the euro, the SNB’s foreign currency holdings have ballooned — rising from about SFr204bn at the end of 2010 to SFr470bn in August. Despite the difficulty of managing such a rapid increase, the SNB says the minimum exchange rate is still “the key instrument to avoid an undesirable tightening of monetary conditions.”
The gold initiative could, if it passed, blow a hole in this policy.
Jean-Pierre Danthine, vice-chairman of the SNB’s governing board, said last week that the central demand, to hold 20 per cent of assets in gold, “would severely restrict the conduct of monetary policy.” If this limit had existed when the SNB first enforced its minimum exchange rate, he argued, the central bank would have had to buy gold in huge quantities as well as euro — “which would almost certainly have caused the foreign exchange markets to doubt our resolve to enforce the rate.”
It is rare for the SNB to take such a stance on what is purportedly a political issue, so these comments show how sensitive policy makers are when it comes to the credibility of their policy on the franc. Thomas Jordan, chairman, said in September the SNB had not had to intervene to enforce the policy since 2012. But the Swiss franc is still trading close to SFr1.20 to the euro — with the euro’s weakness and renewed global risk aversion keeping it under upward pressure. There is continued speculation that the SNB may eventually resort to negative deposit rates — as the ECB has done — to keep the currency in check.
The central bank is also deeply concerned about its ability to manage its vast reserves. Mr Danthine pointed out that a ban on gold sales could mean that gold eventually accounted for the bulk of the SNB’s assets — it would be obliged to buy gold every time its balance sheet expanded and to sell euro every time it contracted.
He also noted that gold holdings would not earn interest or dividends, and underlined other absurdities inherent in the initiative, such as repatriating gold stored in the UK or Canada, where it could most easily be sold if needed, or stipulating that reserves meant for use in emergencies could not be sold at all.
It is not yet clear whether the measures stand any real prospect of becoming law. Population growth and mass communication have made it easier to gather the 100,000 signatures needed to put initiatives to a public vote in Switzerland, but only 10 of 66 initiatives that have gone to referenda since 2000 have passed. Opinion polls will not appear until later this month, and have proved unreliable before previous votes.
But Scotland’s independence referendum last month was a reminder of how rapidly political risks can come to the fore in currency markets. Analysts at Nomura warn that speculators may test the exchange rate floor if initial polling results were to show support for the public vote in coming weeks.
The vote warrants close attention, says Derek Halpenny, a strategist at Bank of Tokyo Mitsubishi. He thinks the SNB could — given a long enough lead-in time — both increase its gold holdings to the level the initiative requires, and maintain its minimum exchange rate. This could have knock-on effects in forex markets, because it would need to convert euro into dollars to fund gold purchases.
Analysts say the other logical possibility — meeting the 20 per cent criterion by shrinking foreign exchange reserves — would make it impossible to enforce the cap on the franc.
In the long term, though, Mr Halpenny argues that “a shift back towards much larger gold holdings would only help reinforce the franc’s safe-haven status. … The imposition of a limit would be seen as reducing the ability of the authorities to devalue the franc in order to lift inflation.”
* * *
end
What!!!!! India imported last month 95 tonnes of gold.
Now with China importing around 170 tonnes per month and India 95 tonnes the west’s central bankers are finished…
a must read..
(courtesy bloomberg/Parija/GATA)
Gold imports by India seen rising more than fourfold last month
Submitted by cpowell on Wed, 2014-10-15 12:40. Section: Daily Dispatches
By Pratik Parija
Bloomberg News
Wednesday, October 15, 2014
NEW DELHI, India — Gold imports by India, the largest user after China, probably surged more than fourfold last month on expectations declining prices would boost festival demand.
Purchases are estimated at about 95 metric tons compared with 15 tons to 20 tons in September last year, said Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation. The government raised import taxes for a third time in August last year after a month earlier obliging importers to set aside 20 percent of purchases for re-export as jewelry.
India represented 25 percent of global demand in 2013. Imports of gold were valued at $3.75 billion in September, 450 percent more than a year earlier, the Commerce Ministry estimates. Buying and gifting of gold is considered auspicious and the most favorable time is the festival of Dhanteras, two days before Diwali which occurs on Oct. 23. Festivals run through November and the wedding season follows to early May. …
… For the remainder of the report:
http://www.bloomberg.com/news/2014-10-15/gold-imports-by-india-seen-risi…
end
It has been told to me from very reliable sources that the Bank of Nova Scotia in Toronto (not an official comex vault) has released approximately 400,000 ONE oz bars of silver and this silver was sent to alleviate a shortage in London (and quite possibly heading to Shanghai.
end
Leasing at these low prices? Idiots…
(courtesy GATA/Reuters)
Miner Fresnillo looks to hedge some gold output
Submitted by cpowell on Wed, 2014-10-15 12:44. Section: Daily Dispatches
From Reuters
Wednesday, October 15, 2014
Mexican miner Fresnillo Plc reported a small drop in quarterly silver production and said it could hedge a part of its gold output to protect its recent investment in the Herradura corridor in northern Mexico.
Shares in the miner fell as much as 3.4 percent on Wednesday morning, making the stock one of the top percentage losers on the FTSE 100 index.
An increasing numbers of precious metals miners, battered by last year’s steep drop in prices, are selling planned output forward to better control their cash flow. …
… For the remainder of the report:
http://uk.reuters.com/article/2014/10/15/fresnillo-output-idUKL3N0SA2UV2..
Bill Holter addresses the “crazy” guys like us who have continually pounded the table that something is seriously wrong in the precious metals market.
a must read….
(courtesy Bill Holter/Miles Franklin)
Who could’ve seen it coming?
I can almost promise you when the dust is clearing you will hear “who could’ve seen it coming” everywhere you turn in the mainstream. You will hear the financial pundits say it, you will hear many titans of industry say it and you will certainly hear the politicians and regulators say it. The politicians and regulators will be running around with signs on their foreheads that say “don’t look at me” while babbling “who could’ve seen it coming?”.
Before going any further, I do want to tell you there have been many who have seen it coming and have voiced their opinions verbally and in print. Obviously, if you are reading this then you know I am included in this group who have been shouted down and labeled as “one of the crazies”. If you think about it, “us crazies” were the only ones who saw 2008 and the financial crisis coming. We were the only ones who foretold “why” it was coming and have said all along that the “fixes” would not work. Were we laughed at and ridiculed in late 2006 and throughout 2007? Yes, of course we were but I don’t remember the “fervor of our branding” as whackos as strong as it is now. Maybe because the vast majority at the time were also long and recommending gold which was pushing new highs at the time. Now, $1,230 gold which is some $400 higher than it was back then has “fallen” $700 from it’s highs so “we” must be even MORE wrong now? If you cannot understand that increased physical demand should result in higher prices and when it does not …there must be a logical (nefarious) reason for it, then you surely must know “why” the stock market has reached its levels. Heck, even Bloomberg has reported on “it” When Even Bloomberg Jokes About It… | Zero Hedge . “It” being the “Plunge Protection Team” which many of us talked about well over 10 years ago only to be followed by blank stares, the rolling of eyes, snickers, and the whispers of “conspiratorial crazy”.
In any case, I figured I would write out a few thoughts now so when you do hear “who could’ve seen it coming” you can tell them “you” did! If you ask anyone on the street today whether or not the U.S. government is broke, you will get an 80-90% answer of yes, the government is broke (even John Boehner publicly said “we are broke”). Everyone knows this but yet expect life to go on and not change compared to the old days when we weren’t broke? Of course, dollars are issued (not really) and backed by this bankrupt government yet this 80-90% who believe the government is broke think that their issued dollars have value and are not effected by the bankruptcy of the issuer?
Then, we have the banking and financial systems. These are regulated, backed (FDIC and SIPC) by government agencies and supported by the Fed and Treasury, it should be “safe” to put your worthless currency into an overleveraged institution backed by a bankrupt government …right? It should also be safe to put your money into the bond market where all bonds are priced off of a benchmark of bonds issued by the bankrupt entity …right? And the stock market? This should be safe because the Plunge Protection Team has your back, the Fed will never raise interest rates, tighten credit or reduce their balance sheet …right?
As a side not, if even Bloomberg admits to the PPT supporting the stock market and the Bank of Japan publicly admits they are the biggest owner of Japanese equities, then what other markets might the central banks be “playing in”? Yes I know, you are thinking the gold and silver markets …but please don’t go there because of the crazy looks you will get and who in their right mind wants to be labeled a “crazy”?
So we live in a land where the government has promised more than it can ever provide because the underlying economy isn’t big enough, has too many sucking off the public teet and not enough worker bees. The economy doesn’t “make anything” anymore anyway but don’t let that bother you. 15% of the population is in a “bread line” but since this is 2014, it’s no longer politically correct to actually “stand” in a line…and in public no less! Besides, those people were dopes back in the 1930′s, standing in line is actually work. We now have more recipients than we have donors …who could’ve seen it coming?
Finance is now over 30% of the economy and manufacturing 10% or thereabouts …farming even less, who could’ve seen it coming? Derivatives are now about 20 times the size of the global economy and 10 times the size of the equity and debt markets, who could’ve seen it coming. Mom and Dad both work today and some even more than one job, I’m only 54 years old and really cannot remember ANY of my friend’s Moms working except for the school nurse, has something changed? $1.2 trillion of student debt outstanding with an average graduate owing $30,000 …which cannot be wiped clean in an honest bankruptcy? 50 percent or more of our population living from check to check with no savings at all? Nearly 15 years where 95% of the population’s standard of living has decreased because “nonexistent” inflation has grown faster than their paychecks?
I’ve only scratched the surface of the financials above and did not even get into social or public issues. I didn’t even get into racial issues either but ask yourself if we are now “more harmonious” between races, religions or even “nationalities” than we were back in the old days …when we weren’t broke? As for social and moral issues, I really shouldn’t go there but let me ask a question or two. If an individual has poor morals, should they be trusted at their word? Should an entire country? I think this has been a common question and on a global basis recently.
Of course, we also have the largest military by leaps and bounds past the rest of the world combined. Ask the average person if we have used our military wisely, fairly and justly? Can a bankrupt treasury really afford the largest military in the world? The average person can get the answer to this one correct also.
I could keep on going and going with examples but I won’t and rather finish with a few questions. If it was the crazy lunatic fringe who foresaw the financial crisis coming, voiced it publicly (amidst laughter) and were correct not only in what happened but more importantly “why” …then why are “we” still crazy? Oh, I know, because gold and silver have fallen in price? “We” say gold and silver prices have been “diluted” with paper substitutes, are we crazy about this or does it make common sense that “something” is negating the simple laws of supply and demand?
If you agree that the façade, charade, house of cards, Ponzi scheme or whatever you’d like to call it is on its way down, please read my worktomorrow. I plan to write about some common sense preparations which by no means will be a complete “survival guide”. Hopefully it will make your brain churn a bit as to what might be needed to be done. There is a possibility of “the worst case scenario” actually occurring, if this is the case, you should be thinking like a caveman here and now. Regards, Bill Holter
Early Tuesday morning trading from Europe/Asia
1. Stocks mostly up on Asian bourses with the higher yen values to 106.94
2 Nikkei up 137 points or 0.92%
3. Europe stocks down/Euro up USA dollar index up at 85.92. Chinese bourse Shanghai up as the yuan slightly strengthens in value to 6.12456 per usa dollar/yuan.
3b Japan 10 year yield at .50%/Japanese yen vs usa cross now at 106.94/
3c Nikkei now below 15,000
3d Japan now says it will not do QE/yen rises/futures implode
3e European data awful, Europe stocks implode along with German collapsing industrial production/entire banking system needs 875 billion to recapitilize/where is it going to get the money???
3f/ negative German ZEW (negative German confidence)
3gOil: WTI 80.57 !!!! and Brent: 84.00!!!
3h/ Gold down/yen up; yen below 107 to the dollar/
3i Greek bonds blowing out of the water/signifies trouble
3j Abenomics looks like it is finished!
3k Gold at $1227.00 dollars/ Silver: $17.16
4. USA 10 yr treasury bond at 2.18% early this morning.
5. Details Ransquawk/Bloomberg/Deutche bank/Jim Reid
(courtesy zero hedge)
Futures Fail To Rebound On Third US Ebola Case, Continuing Crude Bloodbath
Submitted by Tyler Durden on 10/15/2014 06:59 -0400
• American Express
• Bank of America
• Bank of America
• Bank of Japan
• Barclays
• Bear Market
• Beige Book
• Blackrock
• Bond
• Bridgewater
• China
• Copper
• CPI
• Crude
• Fail
• Federal Reserve
• fixed
• France
• Germany
• Gilts
• Greece
• High Yield
• Hong Kong
• Iran
• Iraq
• Japan
• Jim Reid
• Kuwait
• Recession
• Saudi Arabia
• Ukraine
• Unemployment
inShare
For the fourth consecutive night, futures attempted to storm higher, and were halted in their tracks when the USDJPY failed to rebound from the recalibrated 107 tractor beam, following a statement by the BOJ’s former chief economist and executive director (until March 2013) who said that now is the time for the Bank of Japan to begin tapering. Needless to say, there could be no worse news to bailout and liquidity-addicted equities as the last thing a global rigged market can sustain now that QE is about to end in two weeks, is the BOJ also reducing its liquidity injections in the fungible world. This promptly took away spring in the ES’ overnight bounce.
Not helping matters is the continuing selloff in oil, which as we reported first yesterday, has hit the most oversold levels ever, is not helping and we can only imagine the margin calls the likes of Andy Hall and other commodity funds (ahem Bridgewater -3% in September due to “commodities”) are suffering.
But the nail in the coffin of the latest attempt by algos to bounce back was the news which hit two hours ago that a second Ebola case has been confirmed in Texas, and just as fears that the worst is over, had started to dissipate. Expect transports to continue their bipolar moves, and following yesterday’s jump – the best in one week – today will be profit taking day ahead of what is increasingly shaping up to be a big “one-time, non-recurring” fourth quarter EPS crash for airlines due to the great Ebola scare of Q4.
In terms of markets, Asian markets have bounced off their opening lows with equity benchmarks moderately higher in China, Japan and Hong Kong. This follows on the modest gains in the S&P 500 (+0.16%) yesterday as the market once again averted a four-day rout. US Banks’ results were a little bit mixed though the mood is still dictated by the ongoing question marks around global growth. Taking at a look at the movers and shakers the market was once again weighed down by Energy stocks with Oil prices taking another beating yesterday. Brent and WTI were -4.3% and -4.6% lower at US$85.0/bbl and US$81.8/bbl by the end of the US session driving them even deeper into bear market territory. IEA’s forecast of the slowest oil consumption growth since 2009 didn’t help. The impact was clearly felt by Oil producers with the likes of Chevron, Schlumberger and ConocoPhillips down -2.25%, -1.97% and -1.87% respectively on the day. The S&P 500 Energy sub-sector index officially tipped into bear market territory after yesterday’s sell-off, putting it 20.1% off its June highs.
After falling in the Asia-Pacific session, T-notes have regained some poise in the European morning, as spill-over buying in both Bund and Gilt futures pressed German 10yr yields to record lows once more after a softer start for European stock markets. UK jobs numbers initially weighed on Gilts, as real wage growth in the UK rose to -0.3% from -0.8% on an ex-bonus basis, however weaker jobless claims change numbers (-18.6K vs. Exp. -35.0K) suggested a lack of follow-through in labour market strength, prompting Gilts to reverse course and hit session highs.
Looking at the day ahead, we have the Beige Book, Retail Sales, Empire state survey, and the monthly budget from the US. Other than Germany’s inflation data it should be a quiet day for European data flow. Draghi’s speech in Frankfurt this morning will also grab some attention. In terms of earnings Bank of America, American Express and eBay are probably the highlights.
Bulletin Headline Summary from Bloomberg and RanSquawk
• The FTSE-100 lags European equities as AbbVie’s decision to reconsider their deal with Shire (SHP LN) wipes GBP 6bln from the Co.’s market cap
• Softer equities have provided further support for fixed income products with the German 10yr yield once again printing a record low and the Dec’14 Bund printing yet another contract high
• Looking ahead, attention turns towards as slew of US data points, with empire manufacturing, retail sales, PPI and API’s all due for release.
• Treasuries steady, with 10Y yields at lowest since June 2013, 2Y at lowest since May; oil in a bear market amid signs global growth is slowing.
• Central bankers are discovering that cheaper energy can be a headache, especially when warding off deflation is the economic challenge du jour
• Amid questions of whether U.S.-led airstrikes can stop the extremist Sunni group from gaining territory in Iraq and Syria, Obama defended his strategy as he met yesterday with top military commanders from 21 countries allied with the U.S.
• A second health-care worker in Texas tested positive for Ebola after caring for a patient with the deadly viral illness, adding to concern that infection controls at U.S. hospitals aren’t strong enough
• Concern about the deadly disease has started to affect investor psychology, contributing to a decline in global airline stocks; the S&P 500 Index fell 1.2% in an hour on Oct. 13 following reports that plane passengers in Boston were hospitalized with flu-like symptoms
• The BOJ should start paring its unprecedented easing soon or risk hurting people, the bank’s former chief economist Hideo Hayakawa said in an interview, as pushing inflation to a 2% target in a short period will raise living costs without boosting employment or growth
• U.K. unemployment fell more than forecast to the lowest in six years and wage growth picked up for a second month
• Russia warned that Ukraine is running risks by allying with Europe and faces deadlock unless it decentralizes power as Ukrainian forces repelled another attack by separatists on Donetsk Airport
• Hong Kong police said they would investigate a complaint alleging officers beat a pro-democracy protester during clashes early this morning over control of a key road
• Sovereign yields mixed, with U.K., Germany and U.S. lower, EU peripherals higher; Greece 10Y at 7.369%. Asian stocks mostly higher, European stocks, U.S. equity-index futures decline. WTI crude falls, Brent slumps as much as 2% to lowest since Nov. 2010; gold and copper lower
US Event Calendar
• 7:00am: MBA Mortgage Applications, Oct. 10 (prior 3.8%)
• 8:30am: Empire Manufacturing, Oct., est. 20.25 (prior 27.54)
• 8:30am: Retail Sales Advance m/m, Sept., est. -0.1% (prior 0.6%)
o Retail Sales Ex Auto, est. 0.2% (prior 0.3%)
o Retail Sales Ex Auto and Gas, est. 0.4% (prior 0.5%)
o Retail Sales Control Group, est. 0.4% (prior 0.4%)
• 8:30am: PPI Final Demand m/m, Sept., est. 0.1% (prior 0.0%)
o PPI Ex Food and Energy m/m, est. 0.1% (prior 0.1%)
o PPI Final Demand y/y, est. 1.8% (prior 1.8%)
o PPI Ex Food and Energy y/y, est. 1.7% (prior 1.8%)
• 10:00am: Business Inventories, Aug., est. 0.4% (prior 0.4%)
• 11:00am: Treasury Budget Statement, Sept., est. +$90b (prior +$75.1b)
• 2:00pm: Federal Reserve releases Beige Book
• 2:00pm: ECB’s Draghi speaks in Frankfurt Supply
• 11:00am: Fed to purchase $950m-$1.15b in 2018-2019 sector
• 11:30am: U.S. to sell $33b 4W bills, $25b 1Y bills
FIXED INCOME
After falling in the Asia-Pacific session, T-notes have regained some poise in the European morning, as spill-over buying in both Bund and Gilt futures pressed German 10yr yields to record lows once more after a softer start for European stock markets. UK jobs numbers initially weighed on Gilts, as real wage growth in the UK rose to -0.3% from -0.8% on an ex-bonus basis, however weaker jobless claims change numbers (-18.6K vs. Exp. -35.0K) suggested a lack of follow-through in labour market strength, prompting Gilts to reverse course and hit session highs.
EQUITIES
Markets wiped GBP 6bln from Shire’s market-cap this morning after AbbVie warned they could withdraw their USD 55bln bid from the UK pharma name in the wake of the US Treasury’s crack-down on tax inversion based M&A. Unsurprisingly then, the healthcare sector is the poorest performer, with energy names also sustaining losses as Brent crude futures fell to four-year lows for the fourth consecutive session.
After-market yesterday, Intel traded higher by over 2% after shipping 100mln chips in a quarter for the first time in the Co.’s history as Q3 revenue USD 14.6bln vs. Exp. USD 14.44bln and sees Q4 revenue USD 14.2bln-15.2bln vs. Exp. USD 14.5bln. Earnings pre-market include Bank of America, BlackRock and American Express.
FX
In FX markets, commodity-linked currencies traded markedly lower with CAD, NZD and AUD all weaker amid macro fund led selling, helping. Consequently, USD/CAD trades at 5yrs highs while further downside in AUD/USD has been reprieved by chatter of central bank activity, which was initially observed on Monday, at around the 0.8680 level. Elsewhere, real wage growth in the UK rose to -0.3% from -0.8% on an ex-bonus basis at today’s UK jobs numbers, which provided a minor lift in GBP/USD to hit highs of 1.5939, however the gains were not sustained as weaker jobless claims change numbers (-18.6K vs. Exp. -35.0K) suggested a lack of follow-through in labour market strength.
COMMODITIES
Heading into the North American open, both WTI and Brent crude futures trade firmly in the red in an extension of the recent losses, with WTI slipping below the USD 81.00/bbl level and Brent hovering around USD 84.00/bbl. Prices tripped stops through yesterday’s lows after Kuwait joined Saudi Arabia, Iraq and Iran in cutting their official selling prices for crude destined for Asia, while BofAML have also cut their 2015 Brent and WTI prices forecasts. Elsewhere, the metals complex trades in the red with the broadly stronger USD weighing on prices.
* * *
DB’s Jim Reid completes the overnight recap
We been discussing for a while that the Fed is likely to do QE again, probably during the next US recession. The rationale being that the terminal Fed funds rate will probably not be able to get high enough this cycle for conventional policy alone to be enough by the time we get to the next recession. By this time the ECB may be fully into QE and the BoJ may have done more, so without Fed QE the dollar might also be becoming too strong for comfort. However after the events of the last few weeks could the Fed actually re-start purchases before a recession?
Well Fed Williams made some interesting comments yesterday, albeit ones that were caveated. He was quoted as saying that “If we really get a sustained, disinflationary forecast … then I think moving back to additional asset purchases in a situation like that should be something we should seriously consider.” However he did say it would take a big shift in the U.S. economic outlook for the Fed to restart its bond buying and that he still felt it would likely be appropriate to begin lifting rates from zero in the middle of next year. So a fairly big bid-offer on how Fed policy might evolve over the next 12 month but another small sign from the Fed that there is some recent anxiousness about global growth and inflation.
In terms of markets, Asian markets have bounced off their opening lows with equity benchmarks moderately higher in China, Japan and Hong Kong. This follows on the modest gains in the S&P 500 (+0.16%) yesterday as the market once again averted a four-day rout. US Banks’ results were a little bit mixed though the mood is still dictated by the ongoing question marks around global growth. Taking at a look at the movers and shakers the market was once again weighed down by Energy stocks with Oil prices taking another beating yesterday. Brent and WTI were -4.3% and -4.6% lower at US$85.0/bbl and US$81.8/bbl by the end of the US session driving them even deeper into bear market territory. IEA’s forecast of the slowest oil consumption growth since 2009 didn’t help. The impact was clearly felt by Oil producers with the likes of Chevron, Schlumberger and ConocoPhillips down -2.25%, -1.97% and -1.87% respectively on the day. The S&P 500 Energy sub-sector index officially tipped into bear market territory after yesterday’s sell-off, putting it 20.1% off its June highs.
While lower crude prices are negative for oil producers it may start to provide some offset for heavy users of the commodity too. The S&P 500 Airline sector index rallied strongly yesterday (+5%) to post their first daily gain in more than a week. Joe LaVorgna was also quick to highlight that gasoline prices have fallen to US$3.30/gallon last week from the peak of US$3.70 at the end of June. If sustained, Joe thinks this 40 cent decline will give US households a sharp lift to their cash flows. He has highlighted this several times in the past but it is worth remembering that every one cent annual change in gasoline prices is worth approximately US$1bn in annual US household energy consumption. So the bottom line is that if the current 40 cent decline in energy costs is maintained, consumer cash flow would improve by roughly $40 billion – which is equivalent to almost three-tenths on annualized GDP growth.
Energy prices aside what is also on the way down again are inflation readings globally. Overnight we saw Chinese CPI for the month of September come in at +1.6% yoy, the slowest since January 2010. The CPI print is below the +2.0% seen in August and slightly short of market consensus of +1.7%. PPI readings were also lower at -1.8% yoy vs consensus of -1.6% and previous month of -1.2%. Chinese PPI yoy growth has been negative every month since March 2012. Falling commodity prices clearly doesn’t help but it perhaps goes to show the excess capacity that is currently in place for the industrial sector. Away from China the inflation readings in the UK yesterday weren’t great either. September CPI and PPI both came in softer than expected with the former falling to 1.2% yoy (or a 10 year low for the series). Core inflation fell to 1.5% yoy from 1.9% yoy previously which is also the lowest since Spring of 2009. PPI output also fell more than expected (-0.4% yoy v -0.3% consensus). Away from the UK we also saw a weaker-than-expected inflation reading from France (+0.3% yoy v +0.4% expected) although Spain and Italy’s equivalent were broadly in line with expectations. Germany’s latest inflation update is due today.
Bringing our focus back to markets US credit was a notable underperformer yesterday given the modest gains in stocks. The CDX IG closed around 3bps wider on the day with the HY index out by 15bp in spread terms. In terms of cash, HY was around 17bps wider yesterday and is now about 40bps wider on the month or around 150bp wider from the YTD tights seen in June. Interestingly the ETF market held up better yesterday. Both the SPDR Barclays High Yield Bond ETF and the iShares iBoxx $ High Yield Corporate Bond ETF were around two to three tenths of a percent higher yesterday.
Away from Credit, core rates were the main outperformers in the fixed income space yesterday. The UST 10yr has rallied around 7bps since the end of last week to around 2.217% as we type. Hovering at its year to date low and we haven’t seen such levels since June last year. Remarkably the 30yr UST is now below 3% at a levels which is only around 15bp away from its pre Taper-tantrum levels in May last year. European core yields are also making new lows with 10yr government bonds in Germany and France now at around 0.84% and 1.20% respectively.
Looking at the day ahead, we have the Beige Book, Retail Sales, Empire state survey, and the monthly budget from the US. Other than Germany’s inflation data it should be a quiet day for European data flow. Draghi’s speech in Frankfurt this morning will also grab some attention. In terms of earnings Bank of America, American Express and eBay are probably the highlights.
end
The following hurts Russia, Venezuela, Iran and other Arab nations:
(courtesy zero hedge)
Crude Crashing: Brent Is Most. Oversold. EVER
Submitted by Tyler Durden on 10/14/2014 23:30 -0400
• Andrew Hall
• Crude
• Lehman
inShare41
Yesterday we lamented the ridiculously oversold levels in West Texas Intermediate, which as BofA calculated, has hit “oversold” levels for only the third time in six years. We assumed that this could be the basis for a short-term rebound. We were wrong, because we clearly had no idea just how determined the Saudis are to crush Putin into the ground courtesy of plunging oil prices.
As of moments ago, WTI has tumbled nearly $4, some 5%, to just over $81…
… which just goes to show how idiotic any reliance on charts is in a centrally-planned world, in which commodities are nothing but political weapons. Bottom line: based on its weekly RSI chart, WTI has just hit the most oversold levels since Lehman.
But to our rather great dismay, what is gong on with Brent turned out to be far worse, and as the weekly RSI indicator shows the selloff in Brent is now the worst, well, ever!
In other news: Andrew Hall, our condolences.
end
Putin reacts to the low oil price obviously orchestrated by the west:
(courtesy zero hedge)
Putin Warns Of “Nuclear Power Consequences” If Attempts To Blackmail Russia Don’t Stop
Submitted by Tyler Durden on 10/15/2014 15:23 -0400
• Barack Obama
• Newspaper
• Nuclear Power
• President Obama
• Ukraine
• Vladimir Putin
inShare9
Vladimir Putin slams President Obama for adopting a “hostile” approach in naming Russia as a threat to the world in his recent UN speech. From an interview with Serbia’s Politika newspaper, Bloomberg reports,
It’s futile for the U.S. and its allies to “blackmail” Russia over the Ukraine crisis, President Vladimir Putin said in a newspaper interview today.
Russia’s partners should remember the risks involved in disputes between nuclear powers, Putin said. He accused Barack Obama of adopting a “hostile” approach in naming Russia as a threat to the world in the U.S. president’s speech to the United Nations General Assembly on Sept. 24.
“We hope that our partners will realize the futility of attempts to blackmail Russia and remember what consequences discord between major nuclear powers could bring for strategic stability,” Putin told Serbia’s Politika newspaper on the eve of his visit to the Balkan nation today.
Putin said that Obama had identified Russian aggression in Europe as one of the three “major threats facing humanity,” alongside the Ebola virus and Islamic State.
“Together with the sanctions against entire sectors of our economy, this approach can be called nothing but hostile,” Putin said.
Attempts to pressure Russia with “unilateral and illegitimate restrictive measures” will impede efforts to settle the crisis, he said.
“How can we talk about de-escalation in Ukraine while the decisions on new sanctions are introduced almost simultaneously with the agreements on the peace process?” he said. “If the main goal is to isolate our country, it’s an absurd and illusory goal.”
* * *
Opportune timing with markets weak for some nuclear sabre rattling…
end
The following set the mood for Europe today.
Remember the big problem with Greece is not the country but the mega amounts of credit default swaps written on the country by western banks.
Western banks are the underwriters and hedge funds etc are the longs.
(courtesy zero hedge)
Greece Is Crashing
Submitted by Tyler Durden on 10/15/2014 08:45 -0400
• Bond
• Greece
• Reality
inShare11
As we explained in detail yesterday, between governments hopes to exit the bailout program early (in order to save their election) – which the market does not like the idea of – and fears over the reality of OMT, Greek markets are tumbling. Greek stocks are down over 9% – the biggest plunge in 6 years and bond yields are surging… it appears the market is demanding Draghi get back to work as the “whatever it takes” gains have been halved (Greek stocks -35% from March 2014 highs).
• *GREEK ASE INDEX FALLS 9.3% BIGGEST INTRADAY DROP IN 6 YEARS
Greek stocks are down 8% and have retraced at least 50% of the “whatever it takes” gains…
And bond yields are surging…
Charts: Bloomberg
end
Europe collapses today:
(courtesy zero hedge)
European Stocks Plunge, Enter Correction (-11% From Record Highs)
Submitted by Tyler Durden on 10/15/2014 12:02 -0400
• Greece
• Italy
• Portugal
inShare1
Greece (-6.5% today), Italy (-4.4%), Spain (-3.6%), and Portugal (-3.2%) all saw major stock price collapses today dragging the broad European Stoxx 600 index down 11.4% from its highs just 18 days ago… All European stock indices are now red for 2014
All European national stock indices are red YTD…
Charts: Bloomberg
end
And now for Ebola update:
a second Texas healthcare worker tests positive for Ebola:
(courtesy zero hedge)
Second Texas Healthcare Worker Tests Positive For Ebola
Submitted by Tyler Durden on 10/15/2014 05:55 -0400
inShare2
And then there were three.
As the Texas Department of State Health reported an hour ago, just three days after the shocking announcement that the late Thomas Eric Duncan had managed to infect one nurse in the first person-to-person transmission of Ebola on US ground, a second Texas Health Presbyterian Hospital worker has been infected with the deadly virus.
From the official statement:
Second Health Care Worker Tests Positive for Ebola
News Release
Oct. 15, 2014
A second health care worker at Texas Health Presbyterian Hospital who provided care for the first Ebola patient diagnosed in the United States has tested positive for the disease.
The health care worker reported a fever Tuesday and was immediately isolated at the hospital.
Health officials have interviewed the latest patient to quickly identify any contacts or potential exposures, and those people will be monitored. The type of monitoring depends on the nature of their interactions and the potential they were exposed to the virus.
The worker was among those who took care of Thomas Eric Duncan after he was diagnosed with Ebola.
The preliminary Ebola test was run late Tuesday at the state public health laboratory in Austin, and results were received at about midnight.
Confirmatory testing on a separate specimen will be conducted by the Centers for Disease Control and Prevention in Atlanta.
Ebola is spread through direct contact with bodily fluids of a sick person or exposure to contaminated objects such as needles. People are not contagious before symptoms such as fever develop.
Surely the CDC’s Tom Frieden will say this is perfectly expected: after all the CDC, which promised it would “stop Ebola in its tracks in the US” just two weeks ago, changed its tune and said to expect more cases.
As of this moment, equity futures are not happy, and certainly not transports, which after a seesaw session in which airline stocks rebounded following a deep oversold condition, are about to become even more oversold as the US public responds to increasingly unpleasant Ebola pandemic news by deciding to “just stay home this weekend.”
And now we await the CDC to explain how this is all due to another breach in protocol for a disease which still is clearly not airborne.
end
Second Ebola-Infected Nurse Identified, Was Symptomatic With 99.5 Degree Fever While Flying
Submitted by Tyler Durden on 10/15/2014 14:18 -0400
• Ohio
• Reuters
inShare6
Just about an hour ago, the CDC’s Tom Frieden held a press conference in which he tried to diffuse the CDC’s incompetence for a allowing healthcare workers who cared for the now deceased “Index Patient” Thomas Eric Duncan, to board a plane. A worker, who as was reported earlier today, was confirmed sick with the deadly virus. Still, in order to defend his agency from accusations of gross incompetence, of which it clearly is guilty, Frieden said that…
• NEW PATIENT HADN’T BEEN BLEEDING OR VOMITING BEFORE FLIGHT
… Although, he promptly pushed the ball of blame back in her court adding that:
• NEW PATIENT KNOWINGLY EXPOSED TO EBOLA,SHOULDNT HAVE FLOWN
But what is worse, is that as the WaPo reports the nurse had a fever of 99.5 degrees Fahrenheit before boarding a passenger jet on Monday, a day before she reported symptoms of the virus and was tested, according to public health officials. “Even though there appeared to be little risk for the other people on that flight, she should not have traveled that way, Thomas Frieden, director of the Centers for Disease Control and Prevention, said during a news conference Wednesday.”
“She should not have flown on a commercial airline,” Frieden said.
The reason he said that is that since she was clearly symptomatic, she was also contagious. Which explains why the CDC is scrambling to uncover all those passengers who may have flowen with her.
Furthermore, the nurse has now been identified: “The health-care worker was not identified by public health officials, but family members told Reuters and the Dallas Morning News that her name is Amber Vinson, a nurse at Texas Health Presbyterian Hospital. She was part of a team that had cared for Thomas Eric Duncan, a Liberian man who flew to Texas and was diagnosed with Ebola last month, during his hospitalization in Dallas. Duncan died last week. Nina Pham, a nurse who also cared for Duncan, was diagnosed with Ebola on Sunday.”
And where it gets simply ridiculous is that not only did the nurse fly once, she flied a second time, this time from Cleveland to Texas on Monday.
Vinson, who flew from Dallas to Cleveland on Friday, flew back to Texas on Monday, a day after Pham was diagnosed. She reported a fever on Tuesday and was isolated and tested for Ebola.
Still, the fact that she boarded a commercial flight raises the question of how much the other 50 health-care workers who entered Duncan’s room could have traveled or moved around in recent days. The CDC recommends controlled movement on private flights or vehicles for people who may have been exposed to Ebola, Frieden said.
Meanwhile, the panic to contain the possible spread of the airborne virus is full blown: as WFAA reports, “Frontier Airlines says the plane stayed at DFW International Airport overnight, and has since been cleaned. It traveled to Cleveland on Tuesday and was cleaned again. The airline says Vinson traveled to Ohio from Dallas-Fort Worth on Flight 1142 on Oct. 10.
“The safety and security of our customers and employees is our primary concern. Frontier will continue to work closely with CDC and other governmental agencies to ensure proper protocols and procedures are being followed,” the airline said in a press release.
Some other details:
Wednesday morning, Mayor Mike Rawlings confirmed that Vinson lives alone without pets at The Green in the Village Apartments, in the 6000 block of Village Bend near Skillman, just north of Lovers Lane.
Police and Dallas Fire-Rescue teams were at the complex early Wednesday, cleaning common areas and knocking on doors, communicating with neighbors. Reverse 911 calls were sent out at 6:15 a.m. to people who live in the area.
“We rallied together and we decided that we needed to move quickly like we did Sunday morning,” Mayor Rawlings said.
He added that the state has hired a company to come in Wednesday afternoon and clean Vinson’s apartment and car.
Like Pham, Vinson had also been involved in caring for Thomas Eric Duncan, the Liberian man who died of Ebola one week ago at Presbyterian. More than 70 hospital employees had been involved in that effort and are still being monitored.
So despite the epic Snafu that Tom Frieden has managed to achieve, and we fully expect that airplane travel will see a substantial decline until the Ebola pandemic is indeed contained, we will give him props for telling one piece of the truth this weekend, when he said that “more Ebola cases are likely going to emerge.” At least this time, he was telling the truth.
end
CDC Demands 132 Passengers That Flew With 2nd Ebola Patient Report For Testing
Submitted by Tyler Durden on 10/15/2014 13:25 -0400
inShare4
But, but, but they said it wasn’t contagious unless you came into contact with bodily fluids. According to the CDC, the 2nd health-care worker infected with Ebola traveled on Frontier Flight 1143 from Cleveland to Dallas on October 13th and are asking all 132 passengers on the flight to get tested. One question… what about the thousands of people that those 132 passengers came in contact with in the last 2 days?
• NEW TEXAS EBOLA PATIENT FLEW DOMESTICALLY NIGHT BEFORE FEVER APPEARED — CDC
Via Bloomberg,
Second health-care worker with Ebola traveled on Frontier flight 1143 from Cleveland to Dallas on Oct. 13, CDC says in e-mailed statement.
CDC asking 132 passengers on flight to call 1-800-CDC-INFO, plan to begin interviewing passengers about flight, monitoring those who need it
Health-care worker exhibited no signs, symptoms of illness while on flight, according to crew
* * *
Frontier Airlines Statement
“At approximately 1:00 a.m. MT on October 15, Frontier was notified by the CDC that a customer traveling on Frontier Airlines flight 1143 Cleveland to Dallas/Fort Worth on Oct. 13 has since tested positive for the Ebola virus. The flight landed in Dallas/Fort Worth at 8:16 p.m. local and remained overnight at the airport having completed its flying for the day at which point the aircraft received a thorough cleaning per our normal procedures which is consistent with CDC guidelines prior to returning to service the next day. It was also cleaned again in Cleveland last night. Previously the customer had traveled from Dallas Fort Worth to Cleveland on Frontier flight 1142 on October 10.
Customer exhibited no symptoms or sign of illness while on flight 1143, according to the crew. Frontier responded immediately upon notification from the CDC by removing the aircraft from service and is working closely with CDC to identify and contact customers who may traveled on flight 1143.
Customers who may have traveled on either flight should contact CDC at 1 800 CDC-INFO.
The safety and security of our customers and employees is our primary concern. Frontier will continue to work closely with CDC and other governmental agencies to ensure proper protocols and procedures are being followed.”
* * *
As we warned before – coming to an airplane near you soon…
US Airways Flight 850 from Philadelphia to Punta Cana – October 8th 2014
end
And now for your major data points today:
Portuguese 10 yr bond yield: 3.04 par in basis points from Tuesday night.
(Portugal imploding)
Your closing Portuguese 10 year bond yield Wednesday night: up a huge 22 in basis points on the day
Portuguese 10 year bond yield: 3.29%
Your closing Japanese yield Wednesday down 1 in basis points from
Friday night:
yield .49%
Japanese 10 year bond yield: .49%
And now for your closing Japanese 10 year bond yield / par in basis points from the morning: ( Japanese markets imploding)
Japanese 10 year bond yield: .49%
end
Your opening currency crosses for Wednesday morning:
EUR/USA: 1.2660 up .0016
USA/JAPAN YEN 106.96 down 0.29
GBP/USA 1.5920 up .0030
USA/CAN 1.1383 up .0083 !!!
6This morning the Euro is up , trading now just above the 1.26 level at 1.2660 as Europe reacts to deflation and crumbles on the various European exchanges. The yen is up a lot and It closed in Japan rising by 29 basis points at 106.96 yen to the dollar. The pound is well up from Tuesday as it now trades just below the 1.60 level to 1.5920. The Canadian dollar is well down this morning with its cross at 1.1383 to the USA dollar.
Early Wednesday morning USA 10 year bond yield: 2.18% !!! down 2 in basis points from Tuesday night/ (USA economy not doing so well with this low yield) wow!!
USA dollar Index early Wednesday morning: 85.92 up 9 cents from Tuesday’s close
end
The NIKKEI: Wednesday morning: up 137 points or 0.92%
Trading from Europe and Asia:
1. Europe all in the red
2/ Asian bourses mostly in the green except India / Chinese bourses: Hang Sang in the green, Shanghai in the green, Australia in the green: /Nikkei (Japan) green/India’s Sensex in the red
Gold early morning trading: $1228.00
silver:$ 17.16
end
Your closing Spanish 10 year government bond Wednesday/ up 8 in basis points in yield from Tuesday night.
Spanish 10 year bond yield: 2.12% !!!!!!
Your Wednesday closing Italian 10 year bond yield up 12 in basis points and trading 30 in basis points above Spain./
Italian 10 year bond yield; 2.42%!!!!!
end
IMPORTANT CLOSES FOR TODAY
Closing currency crosses for Wednesday night/USA dollar index/USA 10 yr bond: Europe falling apart this afternoon
Euro/USA: 1.2805 up .0161 (huge move)
USA/Japan: 106.14 down 1.11
Great Britain/USA: 1.5965 up 0.0075
USA/Canada: 1.1266 up .0036 (huge move)
The euro rose sharply in value during this afternoon’s session, and it was up by leaps and bounds on the day , closing well below the 1.28 level to 1.2805. The yen was up during the afternoon session,and it gained 111 basis points on the day closing just above the 106 cross at 106.14. The British pound gained back major ground during the afternoon session and it was up for the day as it closed at 1.5965
. The Canadian dollar was well up during the afternoon session, and it was up on the day closing at 1.1265.
Your closing USA dollar index:
84.99 down 83 cents!!! on the day
your 10 year USA bond yield, a fall of 9 basis points: 2.19%!!!!!!!!!
European and Dow Jones stock index closes:
England FTSE down 181.04 or 2.83%
Paris CAC down 148.53 or 3.63%
German Dax down 253.26 or 2.87%
Spain’s Ibex down 366.40 or 3.59%
Italian FTSE-MIB down 850.86 pts !!! or 4.44%
The Dow: down 173.45 or 1.06%
Nasdaq; down 11.86 or 0.28%
OIl: WTI 81.58
Brent: 83.68
end
And now for your big USA stories
Today’s NY trading:
Liquidation-nado: Stocks Crash-And-Thrash As Bonds Pump-And-Dump
Submitted by Tyler Durden on 10/15/2014 16:04 -0400
• After Hours
• Bond
• Copper
• Crude
• headlines
• HFT
• Jim Cramer
• Meltup
• NASDAQ
• None
• recovery
• Russell 2000
• Volatility
inShare
The headlines… (from the most extreme levels)
• VIX over 31 (highest since Dec 2011)
• Dow Industrials -4% Year-to-date (nears correction, -8.6% from highs)
• Nasdaq -10.5% from highs (correction, -1% Year-to-date)
• Dow Transports -11.6% from highs (correction)
• Russell 2000 -14.4% from highs (correction, -9.6% Year-to-date)
• S&P -1.5% Year-to-date (nears correction, -9.8% from highs)
• S&P 500 futures volume highest in 3 years
• High-Yield Credit +20bps to 417bps (13 month wides)
• Treasury yields down 16-18bps (multi-year low yields and multi-year high sized moves)
• Gold at one-month high
• WTI Crude hits $80.01 (lowest since June 2012)
And then – thanks to massive HFT order/cancels, squeeze of ‘shorts’ as long-short funds liquidated, and a well-placed random headline proclaiming Yellen confident – we ripped back green as if none of it ever mattered… (ignoring WMT guiding notably lower and Putin’s nuclear sabre rattling)
BUT… thanks to missed earnings and guidance, all the major indices dropped 1% after hours…
* * *
Today, summarized in pictures
* * *
CNN’s Fear & Greed index is buried at 0…desparate to go negative
* * *
Year-to-date, bonds remain the massive winners +22%, Gold +3%, and S&P -1.2%…
Bond yields utterly collapsed today… then screamed back higher…
For a sense of just how massive today’s move was in bonds…
10Y inflation breakevens collapsed to fresh 3-year lows…
But is the stock market that opened most eyes today….
Year-to-Date, it’s starting to get ugly…
On the week, intraday volatility is incredible…
And today…
Even with the afternoon meltup, Financials lagged…
VIX spiked above 31… before bouncing back
Stocks were driven by AUDJPY most of the day (recovering to VWAP thanks to the stability of USDJPY around the 106 the figure level)
JPY strength characterized the day and week but EUR strength also weighhed on the USD…
Gold was higher on the day – at one-month highs, Silver recovered early losses, copper tumbled and Oil fell further but not catastrophically…
Algos were extremely active with some major manipulation at the lows in the Russell.. As Nanex notes, intense order place/canceling made the lows in the Russell futures
Wondering what drove the recovery in the afternoon? It appears hedge funds are force-liquidating everything to free up margin – so “most shorted” got squeezed again.
Charts: Bloomberg and @Not_Jim_Cramer and @Nanexllc
Bonus Chart: Some context on the ‘bounce’ in Shale stocks…
end
Bell Weather Wal Mart disappoints….
(courtesy zero hedge)
Wal-Mart Tumbles After Slashing Revenue Guidance, Warns Of “Somewhat Slower” Profit Growth
Submitted by Tyler Durden on 10/15/2014 15:20 -0400
• recovery
inShare
If anyone wanted any confirmation that corporate earnings are always and only driven by the (very rigged) market, look no further than Wal-Mart, which moments ago did the inevitable: it just cut its sales forecast by nearly half, to just 2-3% from the prior forecast of 3-5%. From Bloomberg:
• WAL-MART SEES NEXT 3 YRS PROFITS GROWTH ‘SOMEWHAT SLOWER’
• WAL-MART SEES FY16 SALES GORWTH 2-4%
• WAL-MART SEES NEXT 3 YRS SALES TO GROW 2.5%-3.5%
Also per Bloomberg, Wal-Mart Stores Inc. plans to dramatically scale back expansion of its U.S. supercenters, while investing more in e-commerce in an effort to pursue customers where they are shopping.
So instead of growth, what will WMT spend its money on? Why making its shareholders as rich as possible, while firing thousands and converting full-time workers to part-time status:
• WAL-MART SEES USING CASH ON DIVS, SHARE BUYBACKS
It’s days like today when we wish Tim Geithner’s hadn’t “welcomed the recovery” back in August 2010.
and so… WMT stock tumbles to the lows…
end
10Y Treasury Yield Crashes Below 2 Handle
This occurred early in the session which basically rocked all markets:
(courtesy zero hedge)
Submitted by Tyler Durden on 10/15/2014 09:39 -0400
inShare7
end
The all important Empire manufacturing index (NY mfg index) plunges the most in 3 years. The USA economy is imploding as fast as Europe:
(courtesy zero hedge)
Empire Fed Manufacturing Plunges, Biggest Miss In Over 3 years
Submitted by Tyler Durden on 10/15/2014 08:40 -0400
inShare1
From 5 years highs to 6-month lows in one month – Empire Fed manufacturing missed expectations by the most since June 2010 as New orders collapsed. The employment sub-index rose but workweek tumbled. Yet again, as we have described in greast detail, US economic data surges into the end of Q3 (government fiscal year-end) on spend-spend-spend year-end budget flushes, then collapses and disappoints.
:
end
Bank of America posts a 3rd quarter loss.
The financial sector is in disarray:
(courtesy zero hedge)
Bank Of America Posts Q3 Loss, Slammed By Yet Another “One-Time, Non-Recurring” Legal Charge
Submitted by Tyler Durden on 10/15/2014 08:08 -0400
• Bank of America
• Bank of America
• BLS
• net interest margin
• Racketeering
• recovery
inShare4
Remember when banks said to ignore “one-time, non-recurring” legal fees because they are going away? Well, JPM yesterday showed they aren’t. But it was Bank of America today which was slammed with the latest whopping $5.3 billion pretax litigation charge, which pushed its EPS once again into the red.
But wait, there’s great news: the loss of $0.01 is really a $0.42 non-GAAP adjusted profit if one “adds back” the $0.43 in litigation charges.
Which is great for ostriches who like having their heads shoved in the sand. The only problem is that addbacks usually require charges to be one-time, non-recurring. Instead as the chart below shows Bank of America’s litigation and legal charges are not only very much recurring, but as a cost of doing business, they keep increasing quarter after quarter:
And imagine how bad it would be if BofA hadn’t taken out yet another $407MM in loan loss reserve releases, bringing BofA’s total reserve releases in the past three years to a massive $13.6 billion:
So whether one treats BofA as a criminal, racketeering organization or not aside, the bigger problem is that the bank’s already deplorable trading results from Q2 declined even more in the 3rd quarter as volumes crashed, showing that banks desperately need volume to make money since they clearly can’t rely on rising rates to boost their Net Interest Margin:
Not surprisingly, BofA is hardly betting on a “recovery” – its full time employees declined yet again, hitting a multi-year low ofonly 212,400. Somehow we doubt those terminated will ever see the BLS rolls.
Finally, see if you can spot the real-estate recovery in the following chart.
Stick a fork in US banks.
end
Let us close with this interview with legendary John Williams of Shadowstats..
a must see.
(courtesy Greg Hunter USAWatchdog)
Reality of No Economic Recovery Means Collapse-John Williams
By Greg Hunter On October 15, 2014 In Market Analysis No Comments
By Greg hunter’s USAWatchdog.com
Economist John Williams is sticking by his assessment that the economy is in deep trouble. Williams says, “What we are seeing is a very big fiction by the financial media and the political media that the economy has recovered. The economy has not recovered. . . . We are seeing all sorts of things that indicate the economy is not recovering and never has recovered, and it is turning down again.”
On the recent wild gyrations of the stock market, Williams says, “I can’t give you good reason for why the stock market is as high as it is. The fact you are seeing this volatility means there are a lot of people who are very nervous about what is going on and where things are in the market. It is probably one of the great bubbles of all time. It most likely will collapse along the lines of the U.S. dollar in response to the reality of no economic recovery. . . . I can’t think of a more vulnerable market than what we are seeing here.”
On the dollar, Williams says, “The big factor here is the U.S. dollar and all sorts of things that impact that. The economy is probably the biggest. You also have the Fed policy. Right now, there is the presumption that the easing is over and they are going to raise interest rates. Guess what? If the stock market continues going as it is and the economy starts turning down, I think the Fed is going back to easing (money printing) again. They will use the economy as cover for its actions in trying to prop up the stock market and trying to prop up the banking system. The Fed’s primary function in life is to prop up the banking system. A weak economy is not good for the banking system. The economy is a sideline for it, and there is very little it can do, but it can use the weak economy as political cover for flooding the system with liquidity and keep the banking system afloat.” Williams goes on to say, “Any pull-back from the ‘taper,’ any shift in expectation, the Fed is going to have a QE 4, will tend to hit the dollar very hard. Along with that, a spike in gold prices and we’re off and running. . . . You are getting a confluence of extraordinary factors that are coming together that will cause the dollar to break. You’ll have a panic flight from the dollar along with dumping of U.S. Treasury bonds by foreign owners. We are coming in on the end game here.”
On rumors swirling about coming QE 4 by the Fed, Williams predicts, “It’s a virtual certainty in the event of a stock market crash. It’s a certainty in the deterioration in the quality of the banking system. That’s happening.” Williams contends, “You are not going to have a healthy recovery here until the system has had a chance to shake out all the waste and the fat, and people can sit back and say now we can move forward on a positive basis. That environment is not there. We are still living in the shadow of the panic of 2008. The latter part of that panic is now in the final stages of playing out. It is not a happy circumstance. All they did was push it into the future.”
On Williams’ 2014 hyper-inflation forecast, Williams says, “I have been forecasting hyper-inflation in 2014 for some years now. We are coming to the end of 2014, and it hasn’t happened. A prerequisite is a collapse in the dollar. A collapse in the dollar can happen at anytime . . . and at this point, I am not looking to change the outlook.”
On the fear factor of investors, Williams says, “I have had a lot of calls from clients recently to that effect, yes. I can tell you what they are seeing in terms of their business, after adjusting for inflation, and that’s using the government’s inflation number; they are not seeing any sales growth. How can you have no sales growth in 80% of the economy and have a booming economy? It’s not happening.”
Join Greg Hunter as he goes One-on-One with founder of ShadowStats.com, John Williams.
Video Link
http://usawatchdog.com/reality-of-no-economic-recovery-means-collapse-john-williams/
-END-
(There is much more in the video interview.)
end
Well that is all for today.I will see you late tomorrow night
Harvey
JB Slear
866-443-0868 Ext 104
817-717-5489
Fax: 817-764-2537
www.FortWealth.com
Don’t risk what you cannot afford to lose….
There is significant risk involved in trading futures and/or options on futures. Futures and/or options of futures trading may not be suitable for all investors. Investors should consider these risks and evaluate their suitability based on their financial conditions. Past performance is not indicative of future results.
Source: http://fortwealth.com/blog/?p=6041
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