Ladies & Gentlemen, Harvey Organ’s 10-23-14 Update

Oct 23.2014:

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: $1228.50 down $16.30
Silver: $17.11 down 7 cents

In the access market 5:15 pm:

Gold $1233.00
silver $17.21

The gold comex today had a poor notice day registering only 1 notice served.
Today we had a huge questionable withdrawal of gold from the J.P.Morgan vaults to the tune of 321,500.000 oz or 10,000 kilobars. A few months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 266 tonnes for a loss of 37 tonnes.

In silver, the open interest continues to rise and we are now at multi year highs at 172,627 contracts.
To boot, the December silver OI remains extremely high at 121,868.

Today, we had inventory at the GLD. remain constant at 749.87 tonnes.

SLV’s inventory remains unchanged and rests at 343.415 million oz.

We have many stories to bring to your attention today…

Let’s head immediately to see the major data points for today.

First: GOFO rates/

All months basically moved slightly in the negative directions with the various GOFO 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.

It looks to me like these rates are now fully manipulated.

London good delivery bars are still quite scarce.

Oct 23 2014

1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate

+.072% +.095% + .1225% + .145% + .1825%

Oct 22 .2014:

1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate

+.10% +.11% +.135% +.155 + .1925%

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 fell by a small margin of 1,632 contracts from 411,057 down to 409,425 with gold down $6.20 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 153 contracts down to 235. We had 154 notices filed on yesterday we gained 1 gold contract or an additional 100 oz will stand for the October contract month. The November contract month saw its OI fall by 9 contracts down to 352. The December contract fell by 4434 contracts down to 282,684. The estimated volume today was poor at 129,868 contracts. The confirmed volume yesterday was also poor at 124,217.

The total silver Comex OI shockingly rose by a huge 2435 contracts despite the fact that silver was down yesterday to the tune of 18 cents. It seems that the shorts are still reticent to supply for silver contracts and they are starting to cover for fear of major entities taking delivery. Yet the OI continually advances!!! Tonight the silver OI complex rests at 172,627 contracts. In ounces, this represents 863 million oz or 123.20% 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, and again they failed today. Let’s see what tomorrow brings in the OI for silver.

We are in the non active silver contract of October and here the OI fell by 88 contracts down to 14 contracts. We had 100 notices served upon yesterday so we gained 12 silver contracts or an additional 60,000 oz of silver will be standing for the October contract month. November is also a non active delivery month and here the OI fell by a tiny at 2 contracts to register an OI of 122.

The December silver contract is a biggy contract month and tonight it surprisingly rose to 121,242 contracts for a gain of 2,535 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 606.2 million oz or 86.6% of annual global production (ex China). The estimated volume today was poor at 28,525. The confirmed volume yesterday was good at 40,006 contracts. 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 23.2014

Gold
Ounces
Withdrawals from Dealers Inventory in oz nil
Withdrawals from Customer Inventory in oz 321,500.000 oz (JPM 10,000 kilobars
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz nil
No of oz served (contracts) today 1 contracts( 100 oz)
No of oz to be served (notices) 234 contracts (23,400 oz)
Total monthly oz gold served (contracts) so far this month 1089 contracts (108,900 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
39,218.97 oz
Total accumulative withdrawal of gold from the Customer inventory this month

962,978. oz

Today, we had zero dealer transactions

total dealer withdrawal: nil oz

total dealer deposit: nil oz

we had 1 gigantic and very questionable customer withdrawal:

i) Out of JPMorgan: 321,500.000 oz (10,000 kilobars)

????

remember also that JPmorgan deposited supposedly 3 lots of 10,000 kilobars last year.

total customer withdrawals:321,500.000 oz

we had 0 customer deposits:

total customer deposit: nil oz

We had 1 adjustment:

i) out of Manfra:

29,752.63 oz was adjusted out of the dealer and this landed into the customer account of Manfra.

Total Dealer inventory: 891,623.738 oz or 27.73 tonnes
Total gold inventory (dealer and customer) = 8.577 million oz. (266.79) tonnes)

Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 37 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 1 contract of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices stopped by JPMorgan customer account.

We had 1 notice served upon our longs for 100 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 1089 x 100 oz = 108,900 oz,to which I add the difference between the open interest for the front month of October(235) minus the number of notices served upon today (1) x 100 oz = 132,300 oz or 4.115 tonnes.

We gained 100 gold ounces standing for the October contract month.
Thus: October standings:

1089 contracts x 100 oz = 108,900 oz + (235 ) – (1)x 100 = 132,300 oz or 4.115 tonnes

end

Oct 23/2014:

October silver: Initial standings

Silver Ounces
Withdrawals from Dealers Inventory 31,087.34 (CNT)
Withdrawals from Customer Inventory 35,431.78 oz
(/CNT,Delaware)
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory nil
No of oz served (contracts) 4 contracts (20,000 oz)
No of oz to be served (notices) 10 contracts (50,000 oz)
Total monthly oz silver served (contracts) 764 contracts (3,820,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month 1,911,806.3
Total accumulative withdrawal of silver from the Customer inventory this month 6,956,904.1 oz

Today, we had 0 deposits into the dealer account:

total dealer deposit: nil oz

we had 1 dealer withdrawal:

i) Out of CNT: 31,087.34 oz
total dealer withdrawal: 31,087.34 oz

We had 2 customer withdrawals:

i) Out of Delaware: 6094.68 oz
ii) Out of CNT: 29,337.10 oz

total customer withdrawal 35,431.78 oz

We had 0 customer deposit:

total customer deposits: nil oz

we had 0 adjustments:

Total dealer inventory: 67.306 million oz
Total of all silver inventory (dealer and customer) 179.520 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 764 x 5,000 oz per contract or 3,820,000 ounces upon which I add the difference between the open interest for the front month of October (14) – the number of notices served upon today (10) x 5000 oz per contract

Thus Oct. standings for silver: 764 notices x 5,000 oz per notice or 3,820,000 oz + (14) – (10) x 5,000 oz = 3,840,000 oz,

we thus gained 60,000 additional ounces of silver standing in the October contract month.

this level should 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 23.2014: no change in gold inventory at the GLD/Inventory at 749.87 tonnes.

Oct 22.2014: we lost another 2.1 tonnes of gold at the GLD. Inventory rests at 749.87 tonnes. This tonnage no doubt is off to Shanghai.

Oct 21.2014: no change in inventory/GLD inventory rests tonight at 751.96 tonnes.

Oct 20.2014: wow!! a massive 8.97 tonnes of gold leaves the GLD heading to the friendly shores of Shanghai./Inventory 751.96

Oct 17.2014: No change in gold inventory at the GLD/Inventory 760.93 tonnes

Oct 16.2015: GLD gained back 1.79 tonnes of gold/inventory 760.93 tonnes

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)

Today no change in tonnage of gold inventory at the GLD

inventory: 749.87 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: 749.87 tonnes.

end

And now for silver:

Oct 23.2014: no change in silver inventory at the SLV (as of 6 pm est
Inventory: 343.415 million oz

Oct 22.2014: no change in silver inventory at the SLV ( as of 6 pm est)
Inventory: 343.415

Oct 21.2014; no change in silver inventory at the SLV (as of 6 pm est)

Oct 20.2014: we lost 1.15 million oz of silver inventory at the SLV/inventory 343.415 million oz

Oct 17.2014: no change in silver inventory/344.565 million oz

Oct 16.2014: no change in silver inventory/344.565 million oz

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

Today, Oct 22.2014

Inventory tonight no change in silver inventory /silver inventory rests tonight at 343.415 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 7.7% percent to NAV in usa funds and Negative 7.6% to NAV for Cdn funds
Percentage of fund in gold 61.0%
Percentage of fund in silver:38.40%
cash .6%

.( Oct 23/2014)
2. Sprott silver fund (PSLV): Premium to NAV falls to positive 4.29% NAV (Oct 23/2014)
3. Sprott gold fund (PHYS): premium to NAV rises to negative -0.44% to NAV(Oct 23/2014)
Note: Sprott silver trust back hugely into positive territory at 4.29%.
Sprott physical gold trust is back in negative territory at -0.44%

Central fund of Canada’s is still in jail.

end

Oct 21.2014
Now your more important physical stories today:

Important read…

(courtesy Mark O’Byrne)

Prepare for Global Gold Confiscation and Orwell’s 1984, Warns Rickards
Published in Market Update Precious Metals on 23 October 2014
By Mark O’Byrne

Microchips embedded in the arms of citizens to track their activities, the total destruction of the middle classes and a cashless economy where an authoritarian state can freeze the accounts of dissenting citizens excluding them from all economic activity….. These are all part of the cheery scenario painted by the highly respected author and IMF-insider with connections to the Pentagon, Jim Rickards in his most recent article for Agora Financial.
“In the year 2024″ as the article is called, capitalism and markets will have been abolished in favour of a marxist dystopia managed by the “New World Order.” The savings and assets of the middle classes will have been annihilated. This unfolds through a series of panics and shocks to the markets and hyper-inflation. As the hyperinflation takes hold there is a mass exodus out of paper currency and into gold. The G-20 arrange for the mass confiscation of gold, to be stored in an enormous vault in the Swiss Alps, in order to force the public back onto newly created digital currency. To ensure that the public cannot protect themselves from the profligacy of governments gold is taken out of circulation forever.

He references Naomi Klein’s Shock Doctrine: The Rise of Disaster Capitalism when explaining “how power elites such as central bankers, finance ministers and the ultra-rich work behind the scenes” to achieve this Orwellian vision.
“Shock doctrine is simple. Political leaders use crises to ramrod policies into place no one would accept in normal times.” Using this model the elites simply wait for the next crisis to unfold and then use the fear and confusion (“people begin to value order over liberty”) as cover for implementing anti-democratic agendas.
Rickards cites the USA Patriot Act which was passed by congress following the 9-11 attacks. In that highly charged atmosphere, reams of legislation – which had obviously been drafted before the attacks just waiting for the appropriate crisis – were rushed through congress. Privacy in the face of the state is now a thing of the past in the U.S. The private communication of all citizens are collected and stored on a database to be monitored at will by intelligence agencies who are not accountable to the public in any real way.
While we have more faith in humanity than Mr. Rickards, it is clear that the scenario he describes is not beyond possibility. The U.S. enjoyed the status of sole superpower for more than fifteen years after the fall of the Soviet Union. Naturally, it has attracted that element of humanity who crave power and control above all else. The Germans – arguably among the most sophisticated people in the world at the dawn of the twentieth century – still succumbed, following a series of crises, to a devious, vindictive, militaristic dictatorship by the 1930′s.
On the flip side of that coin, average people have never had such ease of access to the information they want. So now, more than ever before in history, we can make informed choices. So the political outcome of the monetary crisis facing the world today is far from certain.
We find Rickards’ description of how the current crisis facing the Central Banking establishment (damned if they do, damned if they don’t) will unfold is more plausible. He takes the line that QE will be pursued until the system crashes, referencing QE-7 in 2018. When the public finally lose faith in paper money it will cause savers to gush out of paper currencies and into gold, silver, agricultural land and fine art. However, he warns that – before inflation takes hold on the wider economy – these safe havens will already have been bid up to extraordinarily high prices and will therefore be unattainable to those people wishing to protect their wealth from hyperinflation.
We do not believe Rickard’s prognostications for a “New World Order” will come to pass. “How would that happen? The G-20 meetings struggle to agree on a final communique. How could they agree something like that?” asks Arabian Money in their review of Rickards’ article. We do see potential for a major crisis in the financial and monetary system along the lines that Rickards describes. And with this in mind we emphasise once again the prudence of storing gold and silver in fully segregated and fully allocated accounts in ultra-secure vaults in the safest jurisdictions in the world.
Get Breaking News and Updates on the Gold Market Here
GOLDCORE MARKET UPDATE
Today’s AM fix was USD 1,240.50, EUR 979.94 and GBP 775.31 per ounce.
Yesterday’s AM fix was USD 1,246.75, EUR 982.08 and GBP 777.66 per ounce.
Gold fell $6.80 or 0.54% to $1,241.50 per ounce and silver slid $0.36 or 2.06% to $17.15 per ounce yesterday.
Gold in Singapore rose 0.3% to $1,244.72 an ounce and traded at $1,243.43 at 2:35 p.m, Bloomberg pricing shows. Prices fell 0.6% yesterday, their largest fall since October 3rd.
Gold in Swiss storage or for immediate delivery climbed 2.9% this month on the heels of equities losses, after the U.S. Fed said slowing foreign economies were a risk to U.S. growth and the International Monetary Fund cut its growth outlook.
In London, the yellow metal pulled back as a positive surprise in eurozone business activity data lifted stock markets from early lows, while the dollar index remained near its highest in a week. Spot gold was down 0.1% at $1,239.50 an ounce at 0936 GMT, while U.S. gold futures for December delivery were off $5.60 an ounce at $1,239.90.
Gold increased after the biggest loss in over two weeks as the festival and wedding season in India, saw purchases of gold coins, bars and especially jewellery. Silver and platinum gained.
See Essential Guide to Storing Gold In Switzerland here

end

The USA desperately tries to stop Beijing’s power in trying to launch a 50 billion Asian Infrastrucutre bank.

(courtesy London’s Financial times/GATA)

Big nations snub Beijing bank launch after US lobbying
Submitted by cpowell on Thu, 2014-10-23 02:03. Section: Daily Dispatches
Jamil Anderlini
Financial Times, London
Tuesday, October 22, 2014

http://www.ft.com/intl/cms/s/0/41c3c0a0-59cd-11e4-9787-00144feab7de.html

BEIJING — China will officially launch a new $50 billion Asia Infrastructure Investment Bank on Friday as it steps up its challenge to global financial institutions like the World Bank that it feels are dominated by America and its allies.
But only 20 mostly small economies, many of them effectively client states of China, will become founding members of the bank at Friday’s ceremony in Beijing after Washington lobbied furiously to stop other countries from signing up.
When it first unveiled its plan to establish the bank last year, Beijing extended a broad invitation and several European states, as well as Australia, Indonesia, and South Korea initially showed interest.
But thanks to pressure from the US — conveyed by US diplomats in Beijing, Washington, and other capitals — none of these countries will join the bank at this stage, although some are hoping to be involved later.
India will be the only large economy to sign up to the Chinese initiative at the ceremony in the Great Hall of the People in Beijing on Friday morning, according to people familiar with the matter.
It will be joined by Mongolia, Uzbekistan, Kazakhstan, Sri Lanka, Pakistan, Nepal, Bangladesh, Oman, Kuwait, Qatar, and all of the Association of Southeast Asian Nations except Indonesia.
Indonesia excused itself from being involved at this stage, saying the newly installed government had not yet had time to consider Beijing’s proposal.
By Wednesday evening three of the agreed signatory countries were waiting for final approval from their highest level of government.
The AIIB will initially be capitalised with $50 billion, most of it contributed by China, which has told other countries it hopes to quickly increase that amount to $100 billion.
With that amount, the AIIB would already be nearly two-thirds the size of the $165-billion Manila-based Asian Development Bank, which China sees as far too influenced by Japan and the US.
The new bank will initially focus on building a “new silk road,” Chinese President Xi Jinping’s initiative to open new trade routes to Europe. Projects will include a direct railway link from Beijing to Baghdad.
China’s push for a regional institution that it would control reflects Beijing’s frustration at Western dominance of existing multilateral bodies.
For years Chinese leaders have demanded a greater say in institutions like the World Bank, IMF, and ADB but reforms to better reflect China’s increased economic importance and power have been painfully slow.
The AIIB and a “BRICs bank” that includes Brazil, Russia, India, South Africa, and China “represent the first serious institutional challenge to the global economic order established at Bretton Woods 70 years ago this summer,” according to Matthew Goodman, a scholar at the Center for Strategic and International Studies in Washington. “Less clear is how much of a substantive improvement these new institutions will make to global governance — or even to the interests of the countries championing them,” he said.
Western diplomats say China and the US have played a cat-and-mouse game in recent months, with Beijing misleading some European countries into believing that other European capitals had already joined the initiative and Washington pressuring its allies to ignore Chinese overtures.
US officials have said they do not want to support an initiative Washington thinks is unlikely to promote good environmental, procurement, and human rights standards in the way the World Bank and ADB are required to do.
But Chinese officials view American opposition as an attempt to contain its global rise and its ambition to be the dominant power in Asia.
“You could think of this as a basketball game in which the US wants to set the duration of the game, the size of the court, the height of the basket, and everything else to suit itself,” said Wei Jianguo, a former vice-minister of commerce. “In fact, the US just wants to exclude China from the game.”

end

Goldcorp CEO suggests that Asian buying will put a floor on the price of gold

(courtesy London’s financial times/GATA)

Goldcorp chief says Asian buying will support price of gold
Submitted by cpowell on Thu, 2014-10-23 01:50. Section: Daily Dispatches
By James Wilson and Michael Hunter
Financial Times, London
Wednesday, October 22, 2014
Demand from China and other parts of Asia will support the price of gold, the chief executive of one of its largest miners said, as the precious metal traded near its strongest level in six weeks.
Chuck Jeannes of Goldcorp said he saw “as much clarity in the market as there has ever been,” with a “floor” created by strong demand whenever gold reached or fell below about $1,200 per ounce.
“The anecdotal evidence is that gold goes down and physical demand goes up,” Mr. Jeannes said in an interview with the Financial Times. “A huge number of physical buyers in the world see gold as a bargain below $1,200.” …
… For the remainder of the report:

http://www.ft.com/intl/cms/s/0/3a1a0d40-59c4-11e4-8771-00144feab7de.htmlmatter.

end

Now Lawrence Williams is a firm believer in Koos Jansen’s data for gold demand inside
China. Remember that the 2,200 tonnes of gold demand does not include any sovereign purchases

(courtesy Lawrence Williams/Mineweb)

China: Higher 2013 gold demand and import figures now confirmed
China’s 2014 Gold yearbook states that Chinese gold demand last year came to 2,199 tonnes of which imports were 1,524 tonnes.
Author: Lawrence Williams
Posted: Thursday , 23 Oct 2014
LONDON (MINEWEB) -
Once again it has taken Koos Jansen to let the world know what the real figures for Chinese gold demand and gold import figures were for last year. The data was actually published in Mandarin Chinese in September with the release of the 2014 China Gold yearbook by the China Gold Association – yet none of the mainstream Western media seems to employ anyone who reads Chinese, or at least no one who does who may be asked to cover gold. The yearbook was apparently made available at the Beijing China Gold Congress that month.
China does seem to be adept at muddying the waters on gold demand and imports though. Earlier in the year the China Gold Association itself said in a statement in English that China’s gold demand was only 1,176 tonnes in 2013 – a figure we queried at the time as that was remarkably close to known Hong Kong gold import figures for the year.
The World Gold Council didn’t help with its own assessment at 1,066 tonnes – again a figure we queried at the time. After all we know China mined around 430 tonnes of gold and that there will have been scrap supplies as well as gold imports through ports other than Hong Kong. These figures, which most western analysts will have relied upon in their assessments of global gold supply and demand, were patently too low.
Now, in the China Gold Yearbook we learn via Koos Jansen’s blog on bullionstar.com that Chinese wholesale demand was 2,199 tonnes in 2013 and this is further broken down into imports of 1,524 tonnes (in direct gold imports plus gold contained in doré bullion coming in from overseas mines), and China’s own mine production of 428 tonnes, leaving a balance of around 247 tonnes which must have come from gold scrap and recycling.
We have already been reporting that, based on China’s Shanghai Gold Exchange weekly withdrawal figures, the country’s gold demand this year looks to be heading for close to 1,900-2,000 tonnes a fall of perhaps around 10-15%, far short of some of the big decline figures quoted by non-gold-savvy media wonks.
It remains to be seen whether these higher figures start to appear in some of the research reports prepared by the gold supply/demand specialist analysts – or is that too much to hope for?
It should also be pointed out that these Chinese gold demand and import figures do not include bullion that may, or may not, be being purchased by Chinese government agencies and which many western analysts will be used to boost reported Chinese gold reserves to be announced to the IMF and the world at a time when it suits the Chinese to do so. Some suggest that China is in fact building its reserves so as to exceed the US’s reported 8,133.5 tonnes held in Fed vaults and will report them when it has exceeded that target – but with the Chinese who knows? If they are building reserves surreptitiously no-one is saying!
Topics: KOOS JANSEN, CHINA, CHINESE GOLD DEMAND, CHINA GOLD ASSOCIATION, BEIJING CHINA GOLD CONGRESS, WORLD GOLD COUNCIL, SHANGHAI GOLD EXCHANGE

end

Early Thursday morning trading from Europe/Asia

1. Stocks mostly down on Asian bourses (except India) with the lower yen values to 107.57

2 Nikkei down 57 points or 0.37%
3. Europe stocks down/Euro up USA dollar index down at 85.72. Chinese bourse Shanghai down as the yuan slightly weakens in value to 6.12080 per usa dollar/yuan.
3b Japan 10 year yield at .49%/Japanese yen vs usa cross now at 107.57/
3c Nikkei now below 15,000
3d Fake Chinese data to seek a paper bourse advance
3e very bad French PMI numbers sets most of Europe tumbling.
German composite PMI up .2 and thus the Dax is up.
Markit does not believe it’s own numbers
/
3fOil WTI: 80.65 Brent: 84.88
3g/ Gold down/yen down; yen above 107 to the dollar/
3h ECB: early this morning still not looking to buy covered bonds/second denial
3i) There are only 540 billion euros worth of covered bonds (see Jim Reid). If the ECB went with this route, there would be huge liquidity problems.

3j Gold at $1237.00 dollars/ Silver: $17.07

4. USA 10 yr treasury bond at 2.24% early this morning.

5. Details Ransquawk/Bloomberg/Deutche bank/Jim Reid

(courtesy zero hedge)

Futures Bounce On Stronger Europe Headline PMIs Despite Markit’s Warning Of “Darker Picture” In “Anaemic” Internals

Submitted by Tyler Durden on 10/23/2014 06:59 -0400
• Barclays

• Bloomberg News

• BOE

• Central Banks

• China

• Comcast
• Continuing Claims

• Copper

• Core CPI

• CPI

• Credit Suisse

• Crude
• Daimler

• Deutsche Bank

• Equity Markets

• Eurozone

• fixed

• France
• Germany

• Global Economy

• headlines

• High Yield

• Initial Jobless Claims

• Japan

• Jim Reid

• Markit

• Middle East

• Nikkei

• Precious Metals

• Price Action

• Recession

• recovery

inShare

Perhaps the most interesting question from late yesterday is just how did the Chinese PMI rebound from 50.4 to 50.2, when the bulk of its most important forward-looking components, New Orders, Output, New Export Orders…

… posted a material deterioration? When asked, not even Markit could provide an explanation that seemed remotely reasonable so we can only assume the headline was goalseeked purely for the kneejerk reaction benefit of various algos that only focus on the headline and nothing else. Luckily, we didn’t have much time to ponder this quandary as a few hours later we got the latest batch of Eurozone PMI numbers.
The reason the PMI “soft-data” surveys are relevant, if mostly again for the benefit of kneejerk reacting algos, is because as Deutsche Bank said, “These real time numbers are clearly going to be important at the moment with many fearing an inflexion point in the global data.” So what better way to instill some confidence in a triple-dipping Europe, if only on actual “hard” data, than by providing cherry-picked, seasonally adjusted survey responses.
And sure enough, Markit did not disappoint when following an ugly French PMI number (because as we have shown before, France is long gone from anyone’s idea of Europe’s core), which printed at 47.3 for Manufacturing, down from 48.8 in September, and below the 48.5 expected, and a Services print of 48.1, down from 48.4 and below the 48.3 expected, we got yet another magical turnaround in Europe, driven once again by Germany, whose Mfg PMI printed at a whopping 51.8, far above the contractionary 49.5 which was expected, and up from the 49.9 contraction Markit reported a month ago. This was the highest reading since July 2014, and up from the 51.7 reported a year ago. It was high enough to offset the tiny decline in the Services PMI which dipped from 55.7 to 54.8 below the 55 expected. This in turn helped boost the composite European PMI to 52.2, from 52.0, above the 51.1 expected, driven by a rise in manufacturing from 50.3 to 50.7, below the contractionary print of 49.9 expected, even as Services remained flat at 52.4.

Ironically, just like in China, new orders were flat but the forward-looking orders-to-stock difference fell 0.8pt! But as long as the headline number picked up all is well, and judging by the violent reaction in USDJPY and futures, Markit achieved its mission for the day.
This is how Goldman summarized Europe’s Deus Ex PMI data:
The Euro area composite PMI edged up by 0.2pt to 52.2 in October, against consensus expectations of a contraction (Cons: 51.5, GS: 51.2). The rebound in the composite PMI was driven by a 0.4pt increase in the manufacturing component to 50.7, while the services PMI was flat at 52.4. The level of PMIs continues to point to small positive growth rates in Q3 and now early Q4.

1. The manufacturing PMI increased marginally from 50.3 to 50.7 in October, after five months of consecutive declines. The services PMI was unchanged at 52.4 (Exhibit 1). The consensus expectation was for small declines in both the manufacturing and services PMI.

2. The breakdown generally showed a mixed picture. New orders were flat but the forward-looking orders-to-stock difference fell 0.8pt. Other subcomponents of the manufacturing PMI were more positive, with output rising 0.9pt and employment rising 0.5pt. The forward-looking subcomponents (which are not part of the headline services PMI figure) were weak: ‘business expectations’ fell 3.1pt and ‘incoming new business’ fell 1.1pt.

3. In addition to the Euro area aggregate, Flash PMIs were released for Germany and France. The German composite PMI edged up 0.2pt to 54.3, against consensus expectations of a 0.5pt decline (Cons: 53.6). This was driven by a strong 1.9pt increase in the German manufacturing PMI (while the German services PMI eased 0.9pt). In contrast, the French composite PMI printed at 48.0 in September, 0.4pt below the previous month’s reading, against consensus expectations of a small increase (Cons: 48.7). The French PMI decline was driven by weakness in the manufacturing sector. In a separate release, the French INSEE manufacturing confidence survey sent a diverging signal, posting a small 1pt increase to 97. Overall, the German/French PMI gap widened by 0.6pt in October and is now greater than 6pt (Exhibit 2).
So what does the latest PMI print imply for GDP? Goldman said that “based on historical correlations, a reading of 52.2 is associated with +0.2%qoq GDP growth. In the same vein, our CAI points to similar growth in October (+0.2%), in line with the September reading.” Well, it ispositive…

But the best indication of just how ridiculous the headline prints were came from Markit itself, which clearly did not believe the numbers it had reported: This is what Markit’s Chris Williamson said:
“The Eurozone PMI rose in October but anyone just watching the headline number misses the darker picture painted by the survey’s other indices, which show the region teetering on the verge of another downturn.

“Growth of new orders slowed closer to stagnation and backlogs of work fell at a faster rate, causing employment to be cut for the first time in nearly a year.

“Business confidence in the service sector also slid to the lowest for over a year and prices charged fell at the fastest rate since the height of the global financial crisis, adding to an increasingly downbeat assessment of business conditions.

“While the survey suggests the euro area has so far avoided a slide back into recession this year, a renewed downturn cannot be ruled out. Growth is so anaemic that increasing numbers of companies are being forced into laying off staff and slashing prices in an attempt to cut costs and boost sales through discounting.”
The message is clear: we needed a stronger headline number, but weak enough to prompt the ECB to do something. Good luck.
In other news, Asian equities traded on a sombre note following suit from yesterday’s negative Wall Street close, led by weakness in energy shares amid a sharp drop in oil prices. Hang Seng (-0.3%) and Shanghai Comp (-1.0%) traded lower, shrugging off a better than expected Chinese HSBC manufacturing PMI (50.4 vs. Exp. 50.2), as new orders and output (50.7 vs. Prev. 51.3) metrics fell, the latter printing at the lowest since May’14. The Nikkei 225 (-0.37%) finished the session in the red in a continuation of the negative US close while also tracking the move lower in USD/JPY overnight.
Despite opening in the red in a continuation of the move lower seen on Wall St. and overnight, European equities enter the North American open in a sea of green with the exception of the FTSE 100. Despite a lower than expected French PMI release, with all three components falling short of expectations which initially placed further weight on equities, attention instead turned towards the strong German and Eurozone PMI releases. With the data points going against the grain of recent lacklustre Eurozone releases, European equities emerged back into the green with the DAX moving higher by a total of 150 points, which subsequently dragged fixed income products lower as Bunds moved back below 150.50. On a sector specific basis, telecommunication names lead the way following strong earnings updates from the likes of Nokia, Orange and Tele2.
Looking forward, we will get initial jobless claims (expected in at 281k vs +264k previously). We will also get earnings reports from the likes of Credit Suisse, Daimler and Tesco in Europe, and American Airlines, GM, Microsoft and Amazon in the US.
Bulletin Headline Summary from Bloomberg and RanSquawk
• European equities shrug off lacklustre French and Chinese PMI releases as attention turns towards better than expected German and Eurozone figures, while the FTSE 100 remains firmly in the red.
• UK retail sales (Ex Auto M/M -0.3% vs. Exp. 0.0%), provide a further source of concern for the UK economy, which subsequently saw GBP/USD briefly break below 1.6000.
• Looking ahead, attention turns towards the release of the weekly US jobs data, US manufacturing PMI as well as a host of large cap. US earnings including the likes of Microsoft, Comcast, Caterpillar, Eli Lilly, GM and Amazon.
• Treasuries steady, 10Y and 30Y yields at highest since early October as market focus begins shifting to next week’s Fed meeting.
• Fed is slated to complete $10b of UST purchases in October next week; those will be the final events of QE3 “if the FOMC decides to end its current program of asset purchases at the next meeting,” schedule says
• A China manufacturing gauge rose in October, with HSBC/Markit’s PMI rising to 50.4 from 50.2 the previous month
• Markit’s euro-area manufacturing PMI rose to 50.7 in October from 50.3; in Germany, factories rebounded from a slump in September while in France both services and manufacturing shrank more than forecast
• ECB has purchased more than EU800m of covered bonds in the first three days of its asset-purchase program, according to estimates from three traders
• U.K. retail sales fell 0.3% in September, more than forecst, with clothing and footwear sales dropping 7.8%, the most since April 2012, the Office for National Statistics said in London today
• Terror reached Canada this week when a “radicalized” convert to Islam on Monday ran down and killed a soldier with a car and a gunman yesterday invaded the capital and murdered a soldier at a war memorial before entering Ottawa’s parliament building where he was shot to death
• The attack may add fuel to a more than decade-long debate over the country’s participation in U.S.-led military operations in the Middle East that has divided political parties and public opinio
• Heightened U.S. regulatory scrutiny of leveraged lending is leading the biggest banks to back away from funding some takeovers financed by debt, creating an opportunity for smaller competitors to step in
• Goldman Sachs Asset Management used the recent selloff in U.S. high yield bonds as an opportunity to add to its position, betting that a strengthening of the world’s largest economy will keep defaults low
• Sovereign yields mostly higher. Asian stocks decline, European stocks mixed, U.S. equity-index futures gain. Brent crude gains, copper and gold fall

ASIA
JGBs traded up 3 ticks at 146.32 after tracking overnight gains in USTs and further underpinned by earlier weakness in Japanese stocks. Asian equities traded on a sombre note following suit from yesterday’s negative Wall Street close, led by weakness in energy shares amid a sharp drop in oil prices. Hang Seng (-0.3%) and Shanghai Comp (-1.0%) traded lower, shrugging off a better than expected Chinese HSBC manufacturing PMI (50.4 vs. Exp. 50.2), as new orders and output (50.7 vs. Prev. 51.3) metrics fell, the latter printing at the lowest since May’14. The Nikkei 225 (-0.37%) finished the session in the red in a continuation of the negative US close while also tracking the move lower in USD/JPY overnight.
FIXED INCOME & EQUITIES
Despite opening in the red in a continuation of the move lower seen on Wall St. and overnight, European equities enter the North American open in a sea of green with the exception of the FTSE 100. Despite a lower than expected French PMI release, with all three components falling short of expectations which initially placed further weight on equities, attention instead turned towards the strong German and Eurozone PMI releases. With the data points going against the grain of recent lacklustre Eurozone releases, European equities emerged back into the green with the DAX moving higher by a total of 150 points, which subsequently dragged fixed income products lower as Bunds moved back below 150.50. On a sector specific basis, telecommunication names lead the way following strong earnings updates from the likes of Nokia, Orange and Tele2.
However, to the downside, the FTSE 100 has underperformed throughout the session following Tesco’s (down as much as 7%) pre-market update which revealed a larger than expected overstatement and scrapping of guidance. Further negative sentiment from the UK has also stemmed from UK property seller Foxtons (-15%) who noted a fall in home sales volumes.
Prelim Barclays month end extension for US treasuries +0.08yrs, Pan Euro Agg month-end extensions +0.08yrs (Prev. +0.09yrs), 12-month average +0.08yrs, Prelim Barclays Sterling Agg month-end extensions +0.06yrs
FX
In FX markets, USD/JPY has been one of the notable movers during the European session after breaking above Monday’s and last week’s highs alongside the move lower in fixed income products as USD/JPY gained amid favourable interest differential flows. The move to the upside was also exacerbated by the pair tripping stops through 107.55 and talk of leveraged names on the bid which also saw the pair break above an option expiry at 107.50. Elsewhere, GBP/USD has been weighed on by a disappointing UK retail sales release (Ex Auto M/M -0.3% vs. Exp. 0.0%), which saw the pair briefly break below 1.6000 to the downside, with the ONS noting that the fall in clothing sales volumes is the biggest since April 2012. NZD was a notable mover overnight, with NZD/USD falling just shy of a point, weighed on by NZ CPI (1.0% vs. Exp. 1.2%) which printed at its lowest level since June 2013, prompting several large investment banks incl. Barclays and JP Morgan, to push back their forecast for next RBNZ OCR hike.
COMMODITIES
Heading into the North American open, WTI and Brent crude futures trade in relatively neutral territory in a modest recovery of yesterday’s DoE inspired losses which saw WTI hit its lowest level in two years, with a lack of further newsflow to dictate price action. Precious metals markets also trade in relatively neutral territory, while residing modestly below yesterday’s lows. However, copper prices have been provided some reprieve following the Chinese manufacturing PMI release, although the move to the upside was capped as attention turned towards the output component of the release. Elsewhere, Anglo American have lifted their annual output targets for all its major commodities with the exception of platinum.
* * *
DB’s Jim Reid concludes the overnight recap
Kicking off this morning we’ve already had the flash PMI print in China with the 50.4 reading modestly better than market expectations of 50.2. The benign reading has done little to spark any sort of confidence in investors following the GDP print earlier in the week with the local benchmark unchanged at the time of writing. We’ve also had PMI out of Japan which surprised to the upside, the 52.8 print up from 51.7 in September. Markets in the region are trading mostly in the red. The Nikkei, Hang-Seng and Kospi are -0.2%, -0.3% and -0.3% down whilst in credit iTraxx Asia is +3 bps wider.
These real time numbers are clearly going to be important at the moment with many fearing an inflexion point in the global data. To help take stock this morning we resurrect our simple grid looking at the relationship between manufacturing PMIs and equity markets (using YoY % change). This analysis looks at the correlation between these two variables across a selection of key countries over time and which allows us create a simple regression to see whether any anomalies currently exist.
Of our 8 sample countries plus the Eurozone, seven currently see manufacturing PMIs between 48.8 (France) and 51.7 (Japan). Depending on the country and based on these numbers, our regressions suggest that these equity markets should generally be flat to slightly higher than 12 months ago. In actuality they’re slightly lower suggesting that the market expects PMIs to edge lower or that equities are cheap if they don’t. The biggest exception is in the US where the last PMI was 56.6 which corresponds to a 18% YoY gain rather than the 11% we actually have. So the US is ‘cheap’ if the PMIs don’t decline from current levels.
We’ve used this measure less over the last couple of years as central banks have increasingly distorted the relationship between fundamentals and valuation. However all-in-all the relationship looks pretty appropriate over the last 12 months. Those equity markets with lower domestic PMIs are generally the ones struggling and vice-versa. The results are in today’s pdf but remember that we always treated this as a back of the envelope guide to value rather than anything more substantial. So treat with care.
In terms of what’s expected today, for Europe consensus is for a general slip in the PMI’s, with the euro area composite, manufacturing and services PMI dropping to 49.9, 52 and 51.5 respectively. We will also get the French and German numbers with the market expecting the French composite to rise slightly (to 48.7) whilst the German composite is expected to fall (to 53.6).
Across the Atlantic, we will get the flash US manufacturing PMI which is also expected to fall (though only to 57).
Market performance was mixed yesterday as European assets were broadly up whilst the US struggled. In Europe, the Stoxx 600 closed the day up +0.7% whilst in credit markets iTraxx Xover tightened -6bps. EURUSD fell another -0.4%. After opening on a positive note US equities closed at their lows. The index fell -0.7% whilst credit also struggled with CDX HY widening by +5bps. Markets drifted lower as energy stocks took suffered following an EIA report that showed the US is stockpiling oil reserves at surprisingly high levels for this time of year, WTI sold off 1.9% to trade at close to $80/barrel. The weaker sentiment was further compounded by a mixed batch of earnings releases. Towards the end of the day, news emerged in Ottawa that a gunman had fatally killed a soldier and opened fired inside the parliament building close to the Canadian PM Stephen Harper (BBC). We are yet to hear any confirmation on whether or not the gunman was linked to a known terrorist group.
The main macro release of the day was US September CPI which came in slightly ahead of expectations at +0.1% MoM and +1.7% YoY, whilst estimates of core CPI came in at expectation (at +0.1% MoM and +1.7% YoY). In other headlines the ECB entered its third day of asset purchases, with Bloomberg News reporting it had bought Spanish covered bonds, whilst it is also adding to its French and Portuguese purchases. In other ECB news, ECB Governing Council Member Luc Coene said in an interview with Les Echos that “we could extend our interventions to other instruments such as corporate bonds” but that, “there is no concrete proposal on the table at the moment.” In the UK, the BoE minutes saw sterling fall as the minutes showed that whilst 2 members continued to vote for a hike, 7 opted to keep rates unchanged, with the minutes also showing increased pessimism about the global economy.
Looking ahead European banks will this evening get the results from the AQR, before the full results are released on Sunday. It’s likely that leaks about the results will intensify in this interim period. Data wise, beyond the PMI’s we will get French confidence numbers and UK September retail sales, whilst in the US we will get initial jobless claims (expected in at 281k vs +264k previously). We will also get earnings reports from the likes of Credit Suisse, Daimler and Tesco in Europe, and American Airlines, GM, Microsoft and Amazon in the US.

end

The following article shows the real strength of China as its tries to begin its journey as a replacement of the uSA dollar:

(courtesy London’s Financial times and special thanks to Robert H for sending this to us)

http://www.ft.com/intl/cms/s/0/28f6b8d4-59cd-11e4-9787-00144feab7de.html?siteedition=intl

China’s outbound investment set to eclipse inbound for first time
©AFP
China’s outbound direct investment is for the first time set to exceed investment into the country, highlighting the ongoing shift of global economic influence to the east.
Outbound direct investment rose 21.6 per cent in the first nine months compared with last year to $75bn and on Wednesday a senior Chinese official said that on current trends it would probably exceed inbound investment by the end of the year.
“This is just a matter of time; if it doesn’t happen this year then it will happen in the very near future,” said Zhang Xiangchen, China’s assistant minister of commerce. “China is already a capital exporting country and it is now poised to become a net exporter of capital.”
From Africa and Latin America to the US and Europe, cash-rich Chinese investors are already snapping up real estate, companies and other assets while growth at home is poised to fall to itsslowest annual pace in nearly two and a half decades.
This month a Chinese insurance company bought the iconic Waldorf Astoria Hotel in Manhattan for nearly $2bn while in the same week China’s state-owned Bright Food Group, which bought Britain’s Weetabix two years ago, took a majority stake in Italian olive oil maker Salov Group.
But with $4tn in government-administered foreign exchange reserves and Beijing’s active policy of supporting offshore acquisitions, there is enormous potential for a much larger flow of investment abroad.
The rise in outbound investment over the past decade has already been meteoric. In 2002 Chinese investors spent just $2.7bn on acquisitions and greenfield projects abroad but by 2013 the total had increased 40-fold to $108bn.
In the first half of this year there was a rare drop in outbound Chinese investment, according to alternative data published by the US think-tank the Heritage Foundation, which compiles its own numbers.
Analysts blamed the drop largely on the country’s vociferous anti-corruption campaign, which discouraged offshore deals since these are often used to skim off cash and assets and stash them beyond the reach of the Chinese authorities.
But there was a surge in deals in the third quarter, according to the Ministry of Commerce, as investment into China from abroad registered its worst performance since the depths of the financial crisis.
In July and August, investment into China dropped 14 per cent and 17 per cent respectively from the same months a year earlier.

Inbound FDI recovered somewhat in September but total investment into China of $87.4bn in the first nine months of the year was still down 1.4 per cent from the same period a year ago.
Apart from a drop during the global financial crisis, FDI inflows to China have grown steadily since the country joined the World Trade Organisation in 2001 and reached a record $118bn last year.
At current rates of growth, inbound FDI will be lucky to reach that level again this year, while outbound investment could come in at close to $130bn for 2014.
China still maintains tight restrictions on cross-border financial and portfolio investments and the renminbi is still not fully convertible, but the outward flow of direct investment is being facilitated by looser Chinese regulations.
While companies still need to consult several ministries and government agencies before they are able to invest abroad, many formal approval procedures have been simplified this year.
The Ministry of Commerce this month adopted new measures that mean it no longer approves every single outbound investment deal over $100m, although it still requires all deals to be “registered” and approvals from several other agencies are needed for most deals.
“It is expected that [the looser regulations] will further accelerate the flow of outbound capital from China, in particular into favoured markets like Australia, the US and the UK,” said Alistair Meadows, head of international capital in Asia-Pacific for JLL, the real estate investment consultancy.
The slowing domestic economy is another powerful factor pushing Chinese companies to hunt for acquisitions abroad.
The world’s second-largest economy is suffering from chronic over-investment and overcapacity after a five-year credit boom and is on track this year to post its slowest annual growth rate since 1990.

end

Good reason for the European stocks to go up today:

(courtesy Meijer/Automatic Earth Blog/zero hedge)

40% Of Eurozone Banks Are In Bad Shape

Submitted by Tyler Durden on 10/23/2014 15:30 -0400
• Belgium

• Bond

• Central Banks

• China

• Erste

• European Central Bank
• Eurozone

• Fail

• fixed

• Greece

• Italy

• Japan

• PIMCO

• Portugal
• Reuters

• Stress Test

• Tyler Durden

• Volatility

inShare

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

David Myers Theatre on 9th Street. Washington, DC July 1939
Reuters has had a busy day today reporting on Europe’s banks and the stress tests the European Banking Authority is set to unveil on Sunday. And which put the EU and ECB on a see-saw like balancing act between credibility and panic.
The news bureau started off in the early morning citing a report by Spanish news agency Efe, which said 11 banks would fail the tests:
11 Banks To Fail European Stress Tests
At least 11 banks from six European countries are set to fail a region-wide financial health check this weekend, Spanish news agency Efe reported, citing several unidentified financial sources. The results of the stress tests on 130 banks by the European Central Bank are due to be unveiled on Sunday.

Four banks in Greece, three Italian lenders and two Austrian ones are among those that preliminary data showed had failed the tests, Efe said. It gave no details of how much capital the banks would have to raise and said this could yet change as numbers could be revised at the last minute. The euro fell on the report. Efe also identified a Cypriot bank and possibly one from Belgium and one from Portugal.
That’s right, the journalist lists 12 banks there, not 11. But anyway, that text is, miraculously, not available anymore, since at the same URL you now get the following article. Jean-Claude ‘When it gets serious, you lie’ Juncker’s first act in his first day in office as European Commission head may well have been to give Reuters a call. Make that a shout.
ECB Cools Speculation Over Bank Health Checks Ahead Of Results
The European Central Bank cautioned on Wednesday against speculation over the outcome of its stress tests after a media report said at least 11 banks had failed the landmark financial health checks, driving some banking shares lower. Austria’s Erste Group rejected the report from Spanish newswire Efe, which said that it along with banks from Italy, Belgium, Cyprus, Portugal and Greece, had failed the ECB review based on preliminary data, but it gave no details of the size of the capital holes at the banks.

The ECB, which will publish the test outcomes for 130 banks on Sunday, said final results had not yet been sent to the lenders involved, and it could not comment on individual institutions. “Any inferences drawn as to the final outcome of the exercise would be highly speculative until the results are final on 26 October,” said an ECB spokesman. The European Banking Authority, the EU watchdog coordinating the Europe-wide stress test, said the results would not be final until they are endorsed on Sunday just prior to publication. It had no comment on individual lenders.

Erste told Reuters it had no reason to believe it would fail the test. Banks have already had some feedback on the outcome of the tests through ‘supervisory dialogs’ with the ECB. They get the results on Thursday, three days ahead of the public announcement. The ECB becomes supervisor of the euro zone’s banks on Nov. 4. “Out of the supervisory dialogue we have no indication we won’t pass,” an Erste spokesman said. [..]“The bigger, more important question is not which banks have failed but which banks have achieved only a marginal pass,” said Jeremy Batstone-Carr at Charles Stanley.

Sources told Reuters that German public sector lender HSH Nordbank – which was not named in the Efe report – was set to pass the health checks. HSH was seen as the German lender most likely to fall short of requirements. Other than Erste, the banks listed by Efe were Italy’s Banco Popolare, Monte dei Paschi and Banca Popolare di Milano; Greece’s Alpha Bank, Piraeus Bank and Eurobank; Portugal’s Millennium BCP and Belgium’s Dexia. The agency also said a second, unnamed Austrian bank and a Cypriot bank were set to fail.
Looks like Brussels thinks it’s free of leaks to the media. Look, it’s Wednesday, and the banks will get results tomorrow. These are known, and can and will therefore be leaked. It’s 2014. Get with it.
Do note the words I bolded. Banks that only just slipped through the test are a major topic in this. If only because they’ve all had many months to shore up their capital by whatever means possible.
Those who still fail after that should probably have been long gone, while those who make it by a narrow margin are in bad shape. There are many ways to shore up your capital, including some that are temporary, just shy of being 100% legal and/or simply based on accounting tricks.
And of course many problems will remain hidden, for now, behind the veil of ultra cheap credit, either from central banks or corporate bond investors. Because that’s one of the damaging effects of ZIRP: it keeps zombies alive.
Then later in the day Reuters followed up with this interview with Pimco global banking specialist Philippe Bodereau, who says 18 banks will fail. Juncker must have thrown a hissy fit, and then lied about it.
Pimco’s Banking Expert Expects 18 Lenders To Fail ECB Stress Test
Fixed income investment firm Pimco’s global banking specialist, Philippe Bodereau, expects 18 banks will be seen to have failed the European Central Bank’s stress test of 130 regional lenders when results are published by the ECB on Sunday. Bodereau said in an interview on Wednesday the failures would likely include some German and Austrian cooperative and public sector banks, as well as weak regional lenders in the southern periphery.[..]

Describing the exercise as a milestone for cleaning up the banks, he said the test was “reasonably credible” when compared with previous tests and provided investors with a starting point to evaluate banks. “It’s pretty clear that not that many banks are going to fail it. A fair amount of balance sheet strengthening has taken place over the last six to nine months in anticipation of this exercise,” Bodereau told Reuters.

Big national champions across northern Europe and also in Southern Europe should pass quite easily, he said, although he expected almost a third of those tested to pass by a narrow margin. This group would likely include many medium-sized banks. “Probably the market will ask questions about their dividend policies, about their ability to grow balance sheet, etcetera. They will be under pressure to remain quite conservative on capital management and on deleveraging,” said Bodereau. [..]

Given recent market volatility, he said it was more likely there would be a positive than negative market shock after the results are released, and that share prices for the region’s biggest banks could be a market winner on Monday.
130 banks are being tested. 12-18 will fail. And on top of that, almost a third of 130, that’s over 40, will pass while still getting their feet wet. That means anywhere between 40% and 44% of Eurozone banks either fail or are in bad shape. And Bodereau suggests this will lead to a positive market shock on Monday morning. You might want to ask yourself what market position he has taken, how short he is exactly, and what book he’s talking.
If 40% of your banks are either dead in the water or barely floating, I’d say you have a major problem. ECB head Mario Draghi is undoubtedly still stuck in misplaced confidence on account of how well his ‘whatever it takes’ speech worked out, and ‘fresh’ EC head Juncker is as we speak emptying several bottles of champagne at once to celebrate his new job. He’s known to like his drinky.
And the ECB, under current conditions, seems almost entirely powerless to do anything about this, since, as Tyler Durden, using Barclay’s numbers, summarizes, it can only purchase $10 billion or so in ABC/Covered bond purchases per month, and another $5 billion per month in corporate bonds. There is simply not more eligible debt available for it to buy. Its mandate would have to be changed in drastic ways, and that doesn’t seem to be in the cards at all.
To keep markets afloat, however, as Bloomberg notes,$200 billion a quarter in QE from the central bankers is needed. The Fed is almost out, China has mostly withdrawn, Japan has too many domestic problems to look out the window, and the ECB can do just $15 billion a month. Confused? You won’t be .. after next week’s episode of .. the Eurosoap.
We all know our world, be it politics or economics, consists almost exclusively of spin these days, but in the face of these numbers I very much wonder how many people will be willing to bet their own money that Europe can get away with another round of moonsmoke and roses come Monday.

end

And going mainstream… in the huge periodical, the economist…

(courtesy zero hedge/the Economist)

The Parrot Is Finally Dead: The Economist Does It Again

Submitted by Tyler Durden on 10/23/2014 10:40 -0400
• Greece

• The Economist

inShare

With its latest “coverage” of the European economy, the Economist may have finally jumped the parrot.

end

The following is fascinating. Now we see Hungary willing to bypass the EU and build the southstream pipeline to aid Russia.

again another dagger into the heart of the USA dollar

(courtesy Portfolio.HU) and again special thanks to Robert H for sending this to us:

http://www.portfolio.hu/en/economy/hungary_set_to_bypass_eu_over_south_stream_with_law_amendment.28562.html

Hungary set to bypass EU over South Stream with law amendment
October 22, 2014, 9:47 am Hungarian version

Ever since Hungary’s Prime Minister Viktor Orbán sat to the negotiating table with Gazprom’s CEO Alexei Miller, the number of Hungarian steps putting the Russian gas giant in an advantageous position and supporting Russian interests have oddly increased. First Hungary shut down reverse gas flow to Ukraine, then allowed Gazprom to stash its gas in local gas storage units. The latest measure is a law amendment proposal submitted by parliament’s economic committee chaired by Fidesz caucus chief Antal Rogán that would give Hungary the green-light to start building the South Stream pipeline. Despite all reservations and obstructions by the European Union, local news portal index.hu reported on Wednesday.

How to make the USA more angry with Hungary, we asked our readers on Tuesday, but we did not have the faintest idea that the government has been holding the best answer to that and it beats every idea we have ever had.

Parliament’s economic committee helmed by Antal Rogán, the head of the ruling Fidesz party’s parliamentary group, has submitted an amendment proposal to a bill submitted by Fidesz MP Roland Mengyi that would practically make it possible for Hungary to start building the South Stream pipeline without consulting either the European Union or other international organisations.

Could build however it wants

As the rationale of the document says, the amendment would facilitate any gas company to construct the pipeline that is not a certified transmission system operator, i.e. it would not have to comply with any rules under which TSOs must operate.

What regulations are we talking about? For instance, a TSO cannot just decide on a whim to start building a pipeline without international approvals as the national development plans need to be harmonised and controlled. The TSO may start development projects that are included in an approved 10-year development plan. Moreover, once that plan is approved, the development projects must be carried out.

This rule was made not by chance, but because large natural gas transmitting pipelines are always cross-boarder, giant and vastly expensive projects that shape the geopolitical situation therefore it is crucial for the participating countries to be in appropriate harmony.

With the approval of the above amendment proposal any gas company would be able to build gas pipelines in Hungary on a simple nod from the Hungarian Energy Office. In that case the different international co-ordination bodies would have no jurisdiction.

Although the amendment proposal does not specify any pipeline construction project, the only one on the agenda right now is South Stream. This happens to be the pipeline which Hungary would be able to start building only if it bypassed international organisations.

According to plans

If the planned modification of the law is indeed aimed at this, we can expect both the European Union and its ally, the United States, which have implemented sanctions against Russia for its conflict with Ukraine, to be furious. The EU is against Moscow’s endeavours to expand its imperial reach, a tool of which is the South Stream pipeline in its current form. It has taken up a rigorous stance on this issue, declaring that it would not negotiate on the building of the pipeline until the Russia-Ukraine conflict is settled.

Irrespective of the fact that officially the project is in a standstill, Russian President Vladimir Putin has called his allies into action behind the scenes. Gazprom CEO Alexei Miller met Hungarian PM Orbán on 22 September in Budapest and the company said in a statement that the subject of their discussion was gas supply in Hungary in the winter and the South Stream project which “is progressing according to plan”.

Odd timing

A few days after the Orbán-Miller meeting Hungary’s gas pipeline network operator FGSZ announced it was indefinitely suspending gas supply to neighbouring Ukraine for technical reasons. Ukraine was fuming over the move and interpreted it as the outcome of the Russian-Hungarian meeting. It was in the open for some time now that Moscow does not take it well that the “enemy” Ukraine is receiving gas from Hungary. The explanation Budapest delivered was that filling up the gas storage units for the winter was the priority therefore it had to halt reverse gas flow to Ukraine.

Let’s admit, it was more than a lame excuse. The depleted storage units indeed had to be filled back up, as the turning off of the gas tap seemed to be a realistic risk due to the Russia-Ukraine conflict.

However, there were interesting developments also during the filling up process, for instance, a proposal submitted by Fidesz MP Roland Mengyi a few days after the Orbán-Miller meeting. The MP, who is a stranger to energy issues, proposed the amendment of the gas law, as a result of which Gazprom was allowed to transmit natural gas into Hungarian storage facilities without obtaining a trade permit.

On paper it will have several hundreds of millions of cubic metres of gas abroad so it will not have to pay taxes until it sells this volume to a Hungarian company. If it wants to sell it that is. In case the flow of Ukrainian transit gas is stopped neighbouring countries could also be queuing up for this stashed gas reserve.

And now there is Rogán’s amendment proposal to top this off nicely.

Hungary’s Foreign Minister Péter Szijjártó will meet Victoria Nuland, the Assistant Secretary of State for European and Eurasian Affairs at the United States Department of State, and special energy envoy Amos Hochs in Washington on Wednesday. South Stream is likely to be discussed there

end.

Your updates on Ebola:

(courtesy zero hedge)

New York’s First Ebola Case? Doctor Treating Ebola Patients In Guinea Rushed To Bellevue Hosptial

Submitted by Tyler Durden on 10/23/2014 14:59 -0400
• BATS

• fixed

• NBC

• New York City

• New York State

• SPY

• Twitter
• Twitter

inShare1

Just when you thought it was safe to assume that Ebola-in-America was fixed (one day into Ron Klain’s tenure as Ebola Czar), NYPost reports some rather disquieting news. A New York City doctor – who returned from treating Ebola patients in Guinea 10 days ago – has been rushed under police escort to Bellevue Hospital… He is being tested for Ebola. Market liquidity has dried up instantly!
• *PATIENT BEING TESTED AT BELLEVUE FOR POSSIBLE EBOLA, NYC SAYS
• *NYC HEALTH DEPARTMENT TO ISSUE STATEMENT SOON, SPOKESMAN SAYS
• *NYC: PATIENT WITH FEVER, GASTROINTESTINAL SYMPTOMS AT BELLEVUE
• *NYC SAYS PATIENT EBOLA TEST RESULTS EXPECTED WITHIN 12 HOURS
• *NYC TRACING ALL OF PATIENT’S CONTACTS
• *NYC HEALTH DEPARTMENT ALSO WORKING CLOSELY WITH HHC
Update #2:
• POSSIBLE NYC EBOLA PATIENT DID NOT SELF-QUARANTINE: CNN
• POSSIBLE NYC EBOLA PATIENT TOOK UBER TO BOWLING ALLEY YDAY: CNN
Full Statement on Patient at Bellevue Hospital
Today, EMS HAZ TAC Units transferred to Bellevue Hospital a patient who presented a fever and gastrointestinal symptoms.

The patient is a health care worker who returned to the U.S. within the past 21 days from one of the three countries currently facing the outbreak of this virus.

The patient was transported by a specially trained HAZ TAC unit wearing Personal Protective Equipment (PPE). After consulting with the hospital and the CDC, DOHMH has decided to conduct a test for the Ebola virus because of this patient’s recent travel history, pattern of symptoms, and past work. DOHMH and HHC are also evaluating the patient for other causes of illness, as these symptoms can also be consistent with salmonella, malaria, or the stomach flu.

Preliminary test results are expected in the next 12 hours.

Bellevue Hospital is designated for the isolation, identification and treatment of potential Ebola patients by the City and State. New York City is taking all necessary precautions to ensure the health and safety of all New Yorkers.

As a further precaution, beginning today, the Health Department’s team of disease detectives immediately began to actively trace all of the patient’s contacts to identify anyone who may be at potential risk. The Health Department staff has established protocols to identify, notify, and, if necessary, quarantine any contacts of Ebola cases.

The Health Department is also working closely with HHC leadership, Bellevue’s clinical team and the New York State Department of Health to ensure that all staff caring for the patient do so while following the utmost safety guidelines and protocols.

Bellevue and the New York State Department of Health to ensure that all staff caring for the patient do so while following the utmost safety guidelines and protocols.

The chances of the average New Yorker contracting Ebola are extremely slim. Ebola is spread by directly touching the bodily fluids of an infected person. You cannot be infected simply by being near someone who has Ebola.
* * *

end

And now Mali becomes the 6th West African nation with Ebola;

(courtesy zero hedge

Despite WHO’s Confidence, Mali Becomes 6th West African Nation With Ebola

Submitted by Tyler Durden on 10/23/2014 17:55 -0400

inShare

In yet another blow for the doctors fighting the spread of this deadly disease, AP reports, Mali’s health minister says the West African country has confirmed its first case of Ebola. Despite every effort to close borders, quarantine areas, and now send US troops (to do… well we are not sure really), Mali becomes the sixth West African country to report an Ebola case.

As AP reports,
Mali’s health minister says the West African country has confirmed its first case of Ebola.

The announcement made on Malian state television Thursday evening by Ousmane Kone said that the patient was a 2-year-old girl who had come from neighboring Guinea.

The child was brought to a hospital in the Malian town of Kayes on Wednesday, and her blood sample tested positive for the virus.

Mali becomes the sixth West African country to report an Ebola case — though nearly all the cases and deaths have occurred in Liberia, Sierra Leone and Guinea.

Senegal and Nigeria had imported cases though both have now been declared Ebola-free.

The World Health Organization says the disease has killed at least 4,877 people and infected 9,936.
* * *

* * *
Sadly this comes just hours after WHO said the following:
The World Health Organization said on Thursday it was still trying to slow the rate of new infections but had “reasonable confidence” that the Ebola virus plaguing three West African ountries had not spread into neighbouring states.

Asked whether countries such as Guinea Bissau, Mali and Ivory Coast might have cases of the disease crossing their borders without knowing about or reporting them, WHO assistant director general Keiji Fukuda said he considered that unlikely.
“I think that there is reasonable confidence right now that we are not seeing widespread transmission of Ebola into the neighbouring countries,” Fukuda told a news briefing in Geneva.
* * *
Nailed it!

And now for your major data points today:

Portuguese 10 yr bond yield: 3.33 par in basis points from Wednesday night.
(Portugal imploding)

Your closing Portuguese 10 year bond yield Thursday night: down 5 in basis points on the day

Portuguese 10 year bond yield: 3.28%

Your closing Japanese yield Thursday par in basis points from Wednesday night

yield .49% !!!

Japanese 10 year bond yield: .49%

And now for your closing Japanese 10 year bond yield down1 basis points from the morning: ( Japanese markets imploding)

Japanese 10 year bond yield: .48%

end

Your opening currency crosses for Thursday morning:

EUR/USA: 1.2661 up .0014

USA/JAPAN YEN 107.57 up .400

GBP/USA 1.6013 down .0031

USA/CAN 1.1237 up .0001

This morning the Euro is up , trading now just below the 1.27 level at 1.2661 as Europe reacts to deflation and crumbles on the various European exchanges. The yen is down a lot and It closed in Japan falling by 40 basis points at 107.57 yen to the dollar. The pound is down from Wednesday as it now trades just below the 1.61 level to 1.6013. The Canadian dollar is slightly down this morning with its cross at 1.1237 to the USA dollar.

Early Thursday morning USA 10 year bond yield: 2.24% !!! up 1 in basis points from Wednesday night/ (USA economy not doing so well with this low yield)

USA dollar Index early Thursday morning: 85.72 down 2 cents from Wednesday’s close

end

The NIKKEI: Thursday morning down 57 points or 0.37%
Trading from Europe and Asia:

1. Europe all in the red except German Dax
2/ Asian bourses all red except India / Chinese bourses: Hang Sang in the red, Shanghai in the red, Australia in the red: /Nikkei (Japan) red/India’s Sensex in the green

Gold early morning trading: $1237.00

silver:$ 17.07

end

Your closing Spanish 10 year government bond Thursday/ down 2 in basis points in yield from Tuesday night.

Spanish 10 year bond yield: 2.19% !!!!!!

Your Thursday closing Italian 10 year bond yield down 1 in basis points and trading 31 in basis points above Spain./

Italian 10 year bond yield; 2.50%!!!!!

end

IMPORTANT CLOSES FOR TODAY
Closing currency crosses for Thursday night/USA dollar index/USA 10 yr bond: Europe falling apart this afternoon

Euro/USA: 1.2640 down .0007
USA/Japan: 108.29 up 1.120
Great Britain/USA: 1.6028 down 0.0015

USA/Canada: 1.1234 down .0002

The euro fell quite a bit in value during this afternoon’s session, and it was down by closing time , closing well below the 1.27 level to 1.2640. The yen was well down during the afternoon session,and it lost 112 basis points on the day closing well above the 108 cross at 108.29. The British pound gained some ground during the afternoon session but it was down for the day as it closed at 1.6028

The Canadian dollar was up during the afternoon session, and it was up on the day closing at 1.1234.

Your closing USA dollar index:

85.85 up 7 cents on the day

your 10 year USA bond yield, a rise of 5 basis points: 2.28%

European and Dow Jones stock index closes:

England FTSE up 19.42 or 0.30%
Paris CAC up 52.59 or 1.28%
German Dax up 107.17 or 1.20%
Spain’s Ibex up 83.80 or 0.82%

Italian FTSE-MIB up 168.73 or 0.88%

The Dow: up 216.58. or 1.32%
Nasdaq; up 72.07 or 1.64%

OIL: WTI 82.04

Brent: 86.90

end

And now for your big USA stories

Today’s NY trading:

(courtesy zero hedge)

Ebola Fears Take Shine Off Panic-Buying Surge In Stocks

Submitted by Tyler Durden on 10/23/2014 16:06 -0400
• Bond

• China

• Copper

• fixed

• headlines

• Volatility

inShare

Buyback-manipulated earnings produced the low-volume opening face-ripper everyone wanted and stocks took off, recovering yesterday’s late losses and not looking back.Trannies were the big winners, led by a resurgence in Airlines (as Ebola in US is fixed) and, despite drastically lower than average volume, stocks kept lifting after EU close on a bed of AUDJPY and USDJPY… until 1450ET (when NYC Ebola headlines hit). Airlines were hit hard, S&P futures dumped back to VWAP, VIX was whacked back above 17, and the exuberant day transformed into merely a great day for stocks.Weakness in Treasuries and the HY bond ETF(despite notable compression in HY spreads) had the smell of a lot of HY issuance being hedged and unhedged butTSYs ended the day up 6-7bps (off their highs post-NYC-Ebola headlines). The USD rose for the 3rd day in a row taking gold lower. Copper (China) and Oil (Saudi) rose on the day (oil unch on the week).

Tale of two headlines…

Airlines ripped and dipped…

As traders instantly reached for VIX…

and S&P naged back top VWAP (on heavy volume)

Credit and bond markets seemed very driven by rate-locks and hedge needs after Europe closed. After Ebola TSY yields and stocks/HY dropped

Treassuries once again surged in yield during the European session but held those losses thru most of the NY session until Ebola hit…

The USD rose once again – 3rd day in a row, led by EUR weakness

And USD Strength took the shine off gold, silver ended flat but copper rose (China data) and Oil (Saudi supply cut)

Intrday historical volatility is surging…

Charts: Bloomberg
Bonus Chart: 7 Year Itch (well 30 quarters)…?

end

Bell weather Caterpillar reports and earnings were much above expectations. How did they do it? Simple: huge stock buybacks:

(courtesy zero hedge)

This Is How Caterpillar Just Blew Away Q3 Earnings

Submitted by Tyler Durden on 10/23/2014 07:58 -0400
• Middle East

• Monetary Policy

• New Normal

• Recession

inShare

Those who have been following Caterpillar actual top-line performance know that things for the industrial bellwether have been going from bad to worse, with not only retail sales declining across the globe, as documented here previously, but with the current stretch of declining global retail sales now longer than during what was seen during the Great Recession.

And yet, moments ago, CAT, which is a major DJIA component, just reported blowaway EPS of $1.72, far above the $1.35 expected. How did it achieve this stunning number which has pushed equity futures by at least half a percent?
Simple: first there was the usual exclusions, with “restructuring costs” adding back some $0.09 to the bottom line number.
But the punchline was this: “In addition to the profit improvement, we have a strong balance sheet and through the first nine months of the year, we’ve had good cash flow. So far this year, we’ve returned value to our stockholders by repurchasing $4.2 billion of Caterpillar stock and raising our quarterly dividend by 17 percent,” Oberhelman said.”
And here is just how the surge in buyback activity looked in comparison to Q3 2013…

… and since the start of 2013:

One can only assume the collapse in CapEx spending is because the company is so enthused about its global growth prospects.
But wait, there’s more, because another reason why the stock is soaring is because CAT actually boosted EPS guidance despite the ongoing retail sales collapse. To be sure, CAT did not boost revenue guidance, and “The company now expects 2014 sales and revenues to be about $55 billion, the middle of the previous outlook range of $54 to $56 billion.”
What it did do was say that “with 2014 sales and revenues of about $55 billion, the revised profit outlook is $6.00 per share, or $6.50 per share excluding $450 million of restructuring costs. That is an improvement from the previous profit outlook of $5.75 per share, or $6.20 per share excluding $400 million of restructuring costs at the mid-point of the previous sales and revenues outlook range of $54 to $56 billion. The improvement in the profit outlook is a result of our continuing focus on execution and cost control, favorable currency impacts and a favorable tax item that occurred in the third quarter.”
Actually no. The improvement is the result of a surge in current and upcoming buybacks.
Recall: “As previously announced, the company repurchased $2.5 billion of Caterpillar common stock during the third quarter of 2014. This repurchase is part of the $10 billion stock repurchase authorization approved by the Board of Directors in the first quarter of 2014.”
In other words, expect about $2.5 billion of stock buybacks per quarter, reducing the company’s outstanding share count, and thus boosting its Earnings Per Sharenumber.
What else did CAT say:
Despite cautious optimism for improved global economic growth, significant risks and uncertainties remain that could temper growth in 2015. Political conflicts and social unrest continue to disrupt economic activity in several regions, in particular, the Commonwealth of Independent States, Africa and the Middle East. The Chinese government’s push for structural reform is slowing growth, and the ongoing uncertainty around the direction and timing of U.S. fiscal and monetary policy actions may temper business confidence. As a result, our preliminary outlook for 2015 expects sales and revenues to be flat to slightly up from 2014.

“At this point, our view of 2015 sales and revenues isn’t significantly different than 2014. Our order backlog was up a little in the third quarter and was slightly higher than at this point last year. We’re hopeful that economic growth will improve in 2015, but are mindful of the uncertainties and risks. We have continued to improve operational execution, and if we see more positive economic momentum, we believe we’re well-positioned to respond and deliver for our customers and stockholders,” Oberhelman added.
So much more buybacks. Because in the new normal, if you can’t grow, you just buy your way to growth. On margin.

end

However Amazon is crashing tonight: here is why!!

(courtesy zero hedge)

Why Amazon Is Crashing: Jeff Bezos’ Nightmare Quarters In Charts

Submitted by Tyler Durden on 10/23/2014 16:26 -0400
• After Hours

inShare8

The only six charts you need to know why the Amazon dream is over and why AMZN stock is currently crashing after hours to fresh 52 week lows.
Total employees and global sales growth:

Quarterly Operating and Net Income

Operating Margin: whoosh

LTM Operating Margin: at 0.1% it is pretty much the lowest ever.

Q3 over time for profit and net income

And for operating margin

and the result so far…

This is interesting: USA manufacturing PMI tumbles and it is the biggest miss in 14 months and the Dow rises by 216 points?

(courtesy zero hedge)

US Manufacturing PMI Tumbles, Biggest Miss In 14 Months

Submitted by Tyler Durden on 10/23/2014 09:54 -0400
• China

• Eurozone

• Markit

inShare4

But the world has been printing such great PMIs? And the US is the new engine of global growth? So how did US Manufacturing PMI just print 56.2, 3 month lows, and its biggest miss since August 2013? Following China and Europe’s lead, US is latest PMI print with collapsing New Orders (57.1, down from 59.8, lowest since January), Output, and New Export Orders. This is thebiggest 2-month drop in US PMI since May 2013.

As Markit explains…
“The flash PMI provides the first available glimpse into how manufacturing is faring at the national level at the start of the fourth quarter, and presents a mixed picture. The data will no doubt add to the view that policymakers should be in no rush to raise interest rates, with output and order book growth slowing and price pressures easing.

A concern is that growth of new orders weakened sharply, which may translate into a further slowdown in coming months. The source of the slowdown appears to be weaker economic growth in key markets such as the Eurozone, China and other emerging markets, which has hit export performance. Many companies reported that domestic demand remains reassuringly strong.”
So the narrative is alive – moar stimulus needed stat!!!!
* * *
Did it snow in October?

end

Initial claims rise the most in 3 months:

(courtesy zero hedge)

Initial Jobless Claims Rise Most In 3 Months, 4-Week Average Lowest Since 2000

Submitted by Tyler Durden on 10/23/2014 08:39 -0400
• Continuing Claims

• Initial Jobless Claims

inShare1

Having reached multi-year lows last week, this week’s 17k rise to 283k (albeit noise), missing expectations for the first time in 6 weeks, is the biggest weekly rise in initial jobless claims since early August. Of course that’s irrelevant as all the time there is no hiring, there is no firing and the 4-week average (less noisy) dropped to its lowest since May 2000 – though we are sure Fed heads will not be reassured by this data as they focus attention on inflationary expectations (having ‘fixed’ employment). Continuing Claims dropped to cycle lows – the lowest since Dec 2000.

First miss in 6 weeks and biggest weekly rise in almost 3 months… but trend is in tact

And Continuing Claims plunges to near 15-year lows…

Certainly looks like time to unleash QE4 eh!!??

Charts: Bloomberg

end

Well that about does it for tonight
I will see you tomorrow night

Harvey

Source: http://fortwealth.com/blog/?p=6085