Ladies and Gentleman, Harvey Organ’s 8-13-14 Update
Oct 11.2014:
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: 1229.30 up 8.30
Silver: 17.29 up 4 cents
In the access market:
Gold 1236.00
silver 17.50
Today gold and silver got a huge boost this afternoon with the scare at Logan Airport
in Boston, where 5 individuals were removed with flu like symptoms.
The gold comex again had 0 notices filed for the 4th straight day, which is totally unusual for an active month. There are 5 tonnes of gold standing.
In silver, the open interest continues to remain high at 169,495 contracts. To boot, the December silver OI rose to 119,402 contracts.
Let’s head immediately to see the data has in store for us today.
First: GOFO rates/
we are moving closer and closer to backwardation!!
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 11 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
+.02% +.03250% +.0450% +.095% + .1825%
Oct 10 .2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
+.040% +.050% +.060% +.1025% .19667
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 fell by a large 2883 contracts from 386,149 all the way down to 386,186 with gold down $3.60 on Friday. 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 a large 182 contracts down to 1134. We had 0 notices filed on Friday so we lost another 182 contracts or 18,200 additional oz will not stand for the October contract month. The November contract month saw its OI fall by 16 contracts down to 296. The December contract fell by 4151 contracts down to 276,986. The estimated volume today was poor at 107,506 contracts. The confirmed volume on Friday was also poor at 128,174. Strangely this was the 4th consecutive day of 0 gold notices filed and only 3 out of 7 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 surprisingly rose by 52 contracts despite the fact that silver was down on Friday to the tune of 12 cents. Tonight the silver OI complex rests at 169,495 contracts. In ounces, this represents 847 million oz or 121.00% of silver annual production. 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 rose by 6 contracts up to 184 contracts. We had 4 notices served upon yesterday so we had another gain of 10 silver contracts or an additional 50,000 ounces will stand for delivery in October. November is also a non active delivery month and here the OI remained constant at 124 contracts.
The December silver contract is a biggy contract month and tonight it surprisingly rose to 119,402 contracts for a gain of 707 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 597 million oz or 85.2% of annual global production (ex China). The estimated volume today was poor at 25,151. The confirmed volume on Friday was fair at 35,362 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 11.2014
Gold
Ounces
Withdrawals from Dealers Inventory in oz nil
Withdrawals from Customer Inventory in oz 3,200.000 oz ?????(JPMorgan)
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz nil ( o oz)
No of oz served (contracts) today 0 contracts( zero oz)
No of oz to be served (notices) 1134 contracts (113,400 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
542,302.96 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: 3,200.000 oz
and this is not divisible by 32.15 so it is not kilobars. How on earth can this be possible????
total customer withdrawals: 3200.000 oz
we had 0 customer deposit:
total customer deposit:nil oz
We had 0 adjustment:
Total Dealer inventory: 945,488.206 oz 29.408 tonnes
Total gold inventory (dealer and customer) = 8.979 million oz. (279.30) 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 (1134 ) minus the number of notices served upon today (0) x 100 oz = 161,700 oz or 5.02 tonnes.
We lost 18,200 oz of gold standing tonight.
Thus: October standings:
483 contracts x 100 oz = 48,300 oz + (1134 ) – (0)x 100 = 161,700 oz or 5.02 tonnes
end
Oct 11/2014:
October silver: Initial standings
Silver Ounces
Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 2,000.000 oz (Delaware)?????
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 586,986.7 oz (JPMorgan)
No of oz served (contracts) 0 contracts (nil oz)
No of oz to be served (notices) 184 contracts (920,000 oz)
Total monthly oz silver served (contracts) 532 contracts (2,660,000 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 1 customer withdrawals:
i) out of Delaware an exact 2,000.000 oz
how can this be possible???
total customer withdrawal 2,000.000 oz ???
We had 1 customer deposit:
i) Into JPMorgan; 586,986.700 oz oz
total customer deposits: 586,986.700 oz
we had 0 adjustment:
Total dealer inventory: 66.633 million oz
Total of all silver inventory (dealer and customer) 184.102 million oz.
The CME reported that we had 0 notices filed for nil 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 532 x 5,000 oz per contract or 2,660,000 ounces upon which I add the difference between the open interest for the front month of October (184) – the number of notices served upon today (0) x 5000 oz per contract
Thus Oct. standings for silver: 532 notices x 5,000 oz per notice or 2,660,000 oz + (184) – (0) x 5,000 oz = 3,580,000 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 11.2014: 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 had a huge addition of gold inventory at GLD to the tune of 1.79 tonnes ( Inventory: 761.23 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: 761.23 tonnes.
end
And now for silver:
Oct 11.2014: 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 11.2014
Inventory tonight no change 345.766 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 8.2% percent to NAV in usa funds and Negative 8.3% to NAV for Cdn funds
Percentage of fund in gold 60.50%
Percentage of fund in silver:38.90%
cash .6%
.( Oct 10/2014) holiday i n Canada today
2. Sprott silver fund (PSLV): Premium to NAV rises to positive 3.97% NAV (Oct 10/2014) will pick up later
3. Sprott gold fund (PHYS): premium to NAV falls to negative -0.48% to NAV(Oct 10/2014) will pick up later.
Note: Sprott silver trust back hugely into positive territory at 3.97%.
Sprott physical gold trust is back in negative territory at -0.48%
Central fund of Canada’s is still in jail.
end
Now your more important physical stories today:
Important read….
(courtesy Mark O’Byrne)
U.S. and UK Test Big Bank Collapse – Risk Of Bail-ins
Published in Market Update Precious Metals on 13 October 2014
By Mark O’Byrne
1
Regulators from the U.S. and the UK are in a “war room” today to see if they can cope with any possible fall-out when the next big bank topples over, the two countries said on Friday according to Reuters.
Treasury Secretary Jack Lew and the UK’s Chancellor of the Exchequer, George Osborne, on Monday will run a joint exercise simulating how they would prop up a large bank with operations in both countries that has landed in trouble.
Also taking part are Federal Reserve Chair Janet Yellen and Bank of England Governor Mark Carney, and the heads of a large number of other regulators, in a meeting hosted by the U.S. Federal Deposit Insurance Corporation.
“We are going to make sure that we can handle an institution that previously would have been regarded as too big to fail. We’re confident that we now have choices that did not exist in the past,” Osborne said at the International Monetary Fund’s annual meeting.
Six years after the financial crisis, politicians and regulators around the globe are keen to prove they have created rules that will allow them to let a large bank go under without spending billions in taxpayer dollars.
They have forced banks to ramp up equity and debt capital buffers to protect taxpayers against losses, and have told them to write plans that lay out how they can go through ordinary bankruptcy. The plans are so-called living wills.
Yet salvaging a bank with operations in several countries – which is the norm for most of the world’s largest banks such as Deutsche Bank, Citigroup Inc and JPMorgan – has proven to be a particularly thorny issue.
Because the failure of a big bank is such a rare event, regulators may not be used to talking to each other. There have also been suspicions that supervisors would first look to save the domestic operations of a bank, and would worry less about units abroad.
The exercise comes as regulators are about to bring to fruition further initiatives to make banking safer.
The first would force banks to have more long-term bonds that investors know can lose their value during a crisis, on top of their equity capital, to double their so-called Total Loss-Absorbing Capacity (TLAC).
A second measure, expected to be announced this weekend, will force through a change in derivative contracts, which in their current form protect investors, and complicate the winding down of a bank across borders.
Gold in U.S. Dollars (Thomson Reuters)
It is now the case that in the event of bank failure, your deposits could be confiscated.
Let’s be crystal clear: The EU, UK, the U.S., Canada, Australia and New Zealand all have plans for bail-ins in the event of banks and other large financial institutions getting into difficulty.
Are your deposits safe?
Are you prepared for Bail-Ins?
Special Report on Bail-ins Here
GOLDCORE MARKET UPDATE
Today’s AM fix was USD 1,228.00, EUR 969.14 and GBP 763.82 per ounce.
Friday’s AM fix was USD 1,222.25, EUR 964.38 and GBP 761.01 per ounce.
Gold and silver both remained unchanged on Friday at $1,223.70 and $17.35. Last week, gold and silver both climbed 2.7% and 3.2%, respectively.
Silver in U.S. Dollars (Thomson Reuters)
Gold jumped sharply in the early Asian trading Monday as a safe haven bid came into the market. Gold in Singapore rose as high as $1,235 an ounce prior to concentrated selling in London pushed prices lower again. At the open in London, gold climbed to $1,237.30 an ounce, near a 4 week high, prior to selling saw gold fall back to $1,225/oz.
Last week gold bullion saw its largest weekly gain in 4 months as safe haven buying was seen due to concerns about the Eurozone and continuing ultra loose monetary policies.
Poor economic data from Europe, slow growth in China and concerns about Ebola have prompted investors to sell equities. Asian stocks stumbled to seven-month lows on today while crude oil prices were pinned near a four-year trough. Stocks in Dubai fell 6.5% on Sunday, the biggest drop in four months to bring the Dubai Financial Market General Index to its lowest level since July 20.
Gold is a proven hedging instrument and safe haven asset to riskier assets such as equities.
Last week the IMF cut its global economic forecast, and the U.S. Fed’s very dovish comments have made investors think that an interest rate hike is coming later than they expected.
Fed officials also expressed concern over the global economy, which could further delay a rise in U.S. interest rates.
Most notably, Fed Vice Chairman Stanley Fischer said the effort to normalise radical U.S. monetary policy after years of extraordinary stimulus may be hampered by the global outlook.
A delay in raising interest rates is positive for gold, a non-interest-bearing asset, and negative for the dollar and other interest yielding assets.
Today, Japanese markets are closed and the U.S. and Canada will be partially, or fully, shut for holidays as well.
Singapore launched physically-settled kilobar gold trading today or contracts for 25kg or 804 ounces each. Singapore has stated its intent to become an Asian gold hub with a goal of setting a regional benchmark price. The contract which expires tomorrow was priced at $39.685/gram at close of trade. The contracts trade at 830-1130 am Singapore time.
end
Turd Ferugson interviews Koos Jansen. It is 58 minutes long but well worth it:
(courtesy Turd Ferguson,Koos Jansen/GATA)
China gold market researcher Koos Jansen interviewed by TF Metals Report
Submitted by cpowell on Sun, 2014-10-12 16:05. Section: Daily Dispatches
12:02p ET Sunday, October 12, 2014
Dear Friend of GATA and Gold:
Gold researcher and GATA consultant Koos Jansen, market analyst for Bullion Star in Singapore, was interviewed last week by the TF Metals Report’s Turd Ferguson, discussing Jansen’s groundbreaking work on China’s gold and silver markets, including the increasingly crucial question of when China will reach the total of gold reserves claimed by the United States.
The interview is 58 minutes long and can be heard at the TF Metals Report here –
http://www.tfmetalsreport.com/podcast/6214/chinese-gold-demand-expert-ko…
– and at Bullion Star here:
https://www.bullionstar.com/article/koos%20jansen%20interview
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
The real Chinese demand. We have told you in the past that Koos Jansen was the guy to really understand Chinese demand for gold and we are correct:
(courtesy zero hedge/Koos Jansen/GATA)
Shanghai Exchange Chairman Admits China Gold Demand Topped 2000 Tonnes In 2013
Submitted by Tyler Durden on 10/12/2014 20:51 -0400
• China
• Hong Kong
• Precious Metals
inShare3
Submitted by Koos Jansen via BullionStar.com,
This is the final blow for the ones who still couldn’t comprehend, after all evidence presented, the amount of Chinese non-government gold demand in 2013. At the LBMA forum in Singapore June 25, 2014, one of the keynote speakers was chairman of the Shanghai Gold Exchange (SGE) Xu Luode. In his speech he made a few very candid statements about Chinese consumer gold demand, that according to Xu reached 2,000 tonnes in 2013. In contrast to the Word Gold Council (WGC) that states Chinese gold demand was 1,066 tonnes in 2013. Xu’s speech has now finally been translated and published in the LBMA magazine The Alchemist #75.
Xu’s statements once again confirm what I have been writing for months. SGE withdrawals equal Chinese wholesale demand:
import + mine + scrap = total supply = SGE withdrawals = wholesale demand
Let’s go through a couple of quotes from Xu:
Data on China’s gold imports has not previously been made available to the public. However, gold has historically been imported through Hong Kong, and Hong Kong is highly transparent, disclosing details such as the number of tonnes of gold imported on a monthly basis. Last year, China imported 1,540 tonnes of gold. Such imports, together with the 430 tonnes of gold we produced ourselves, means that we have, in effect, supplied approximately 2,000 tonnes of gold last year.
The 2,000 tonnes of gold were consumed by consumers in China. Of course, we all know that the Chinese ‘dama’ [middle-aged women] accounts for a significant proportion in purchasing gold. So last year, our gold exchange’s inventory reduced by nearly 2,200 tonnes, of which 200 tonnes was recycled gold.
Again, we can read the simplified equation (for 2013):
import (1540t) + mine (428t) + scrap (229t) = SGE withdrawals (2197t)
Additionally, it’s very clear what kind of metric the SGE uses. Xu subtracts recycled gold from SGE withdrawals to measure consumer demand, which equals newly added gold (import + mine = 1968t) to the private holdings of Chinese citizens. Confirming the Chinese gold market with the SGE at its core, is designed by the PBOC to track the quality and quantity of gold held in non-government reserves.
By flipping the variables in the formula I was able to estimate Chinese import in 2013 (SGE withdrawals – mine – scrap = import) by an error margin of only 2.6 %. Year to date SGE withdrawals account for 1425 tonnes, of which I estimate 855 tonnes was imported. Western media are still focusing on the amount of gold Hong Kong net exports to China, which is dropping like a brick, as a proxy for Chinese imports. However, this data has dramatically lost its significance as China has openly announced it imports more gold directly into cities like Shanghai and Beijing. This was clearly communicated, see the next video from 1:14.
see GATA.com and zero hedge for the video
The Shanghai Customs department published a press release September 19 on their website saying they imported 48 batches of gold in the first eight months of this year worth $15 billion dollars, which roughly translates to 380 tonnes. Unfortunately the article does not say where this gold came from, but it very well supports the fact China continues to import large amounts of bullion, which can be seen by strong SGE withdrawal data. in September import has increased 30 % m/m.
The strange thing is, there were many industry professionals and journalists in the room when Xu spoke at the LBMA forum (click for the delegate list), but only one of them rushed to his laptop during the break to share the content of Xu’s speech, paramount information. He sent me an email that I immediately published for the whole world to read. This person was my friend and CEO of BullionStar, Torgny Persson.
However, there still hasn’t been a single mainstream news outlet that has covered the immense discrepancy between the Chinese demand numbers from the WGC and the SGE. I would like to express my deepest concern about how the mainstream media is covering the (Chinese) gold market. Xu stated, at the most prominent precious metals forum in the world, Chinese gold demand reached 2,000 tonnes. How could the press have missed this? By the way, later on in his speech he repeated it twice!
Earlier, I have reported on the data that physical gold consumption in China’s gold market has, in effect, reached more than 2,000 tonnes last year. All of you here are experts in this industry and are very clear about the percentage accounted for by these 2,000 tonnes of physical gold in the global market.
The difference between WGC and SGE Chinese non-government gold demand is 1,000 tonnes. Go figure.
The first publication I posted about what Torgny emailed me from the LBMA forum can be found here. In the comment section underneath there is a conversation with Bron Suchecki who also listened to Xu’s speech, however, he (and one other journalist) couldn’t recall Xu saying Chinese demand hit 2,000 tonnes. Fortunately we have it in black and white now; Xu said it three times and other SGE officials have made the same statements.
I would recommend everyone to read the entire speech from Xu (here).
end
As we have been pointing out to you on past commentaries, major
gold hubs are moving into physical gold markets:
(courtesy Wall Street Journal/GATA)
Asian market hubs move into gold
Submitted by cpowell on Sun, 2014-10-12 22:32. Section: Daily Dispatches
Asian Market Hubs Move Into Gold
Demand From Region Is World’s Largest but Most Trading Is in West
By Biman Mukherji and Ese Erhereine
The Wall Street Journal
via EIN News, Washington
Sunday, October 12, 2014
Asians buy most of the world’s gold, but nearly all of it trades in London. Now, with Western investors souring on the metal, the region is making a bid for some of the action.
Three big financial hubs in Asia are separately launching trading in a gold contract, each backed with physical gold.
If they draw enough investors, the contracts could influence the price of gold, which is set by a daily fix in London. …
China is now the world’s largest producer and consumer of gold, and the biggest importer, as domestic demand has outstripped supply. India also is a major buyer and importer. Two-thirds of global gold purchases come from Asia, the World Gold Council says.
Still, many observers say Asia is likely to find it a hard task to unseat London as the world’s center for gold trading. A major reason: China bans the export of gold bullion, arguing its huge domestic production is needed to meet local demand.
That means gold can flow into China when prices there are above those set in London, but cannot move the other way. Beijing’s strict controls also limit movement of capital. …
“The greater prominence of prices out of Asia can only enhance the mix, but I doubt within the next couple of years that it will fundamentally change the way spot prices are derived,” says Ross Norman, chief executive officer at Sharps Pixley, a London-based bullion broker. …
… For the remainder of the report:
http://world.einnews.com/article/228757932/JSFuQtFN1QPMeHZ7
end
A terrific piece from Robert Fitzwilson courtesy of Kingworldnews
(courtesy Robert Fitzwilson/Kingworldnews)
Robert Fitzwilson: Will world reject the West’s paper-manipulated markets?
Submitted by cpowell on Sun, 2014-10-12 23:06. Section: Daily Dispatches
7p ET Sunday, October 12, 2014
Dear Friend of GATA and Gold:
Money manager Robert Fitzwilson of the Portola Group, writing at King World News, notes that unbacked futures contracts control the price of oil as much as they control the price of gold and silver. He argues that the recent decline in oil prices is not supported by supply and demand fundamentals for the real thing. Fitzwilson speculates about “the end of worldwide acceptance of Western paper-manipulated markets.” His commentary is posted at KWN here:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/10/13_C…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Looks like Marc Faber will not be asked back of Toronto’s BNN:
(courtesy GATA)
Faber’s likely last time on BNN: Gold and silver markets are manipulated
Submitted by cpowell on Mon, 2014-10-13 02:27. Section: Daily Dispatches
10:31p ET Sunday, October 12, 2014
Dear Friend of GATA and Gold:
Financial letter writer Marc Faber made on Friday what likely will be his last appearance on Business News Network in Canada — not because of failing health or retirement but because he declared that the monetary metals markets are manipulated.
As soon as Faber made his declaration on BNN’s “Business Day” program, moderator Frances Horodelski cut him off, asserting that time had run out.
Horodelski asked Faber if gold would reverse upward with other commodities when the U.S. dollar falls. Faber replied: “Precious metals can still go lower, because, as some knowledgeable people have proven, the markets are manipulated. But I don’t think they will stay low. I think they may go lower temporarily and then rebound strongly, and if I were a reader, I would no longer trust central banks, and [instead] say, ‘I want to be my own central bank and have some gold and silver stored in a safe place, certainly not in the U.S.”
BNN’s likely final interview with Faber is 9 minutes and 22 seconds long, with the comments about gold and silver market manipulation coming at the 8:15 mark. Until BNN takes it down, it can be watched at the network’s Internet site here:
http://www.bnn.ca/Video/player.aspx?vid=464264
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
A Russian oil executive is accusing the Saudis of manipulating the price of oil down:
(courtesy RIA/GATA)
Russian oil exec accuses Saudis of manipulating oil price down
Submitted by cpowell on Mon, 2014-10-13 14:57. Section: Daily Dispatches
Oil Surplus in World Market Temporary, Rosneft Vice President Says
From RIA Novosti, Moscow
Sunday, October 12, 2014
http://en.ria.ru/business/20141012/193992405/Oil-Surplus-in-World-Market…
MOSCOW — The surplus of oil on the world market is a temporary phenomenon, the vice president of Russian oil giant Rosneft, Mikhail Leontyev, said Sunday.
“The current price dynamic, which has been developing for the last few months, may not reflect the objective trend,” Leontyev told the Russkaya Sluzhba Novostei radio.
“Prices can be manipulative. First of all, Saudi Arabia has begun making big discounts on oil. This is political manipulation, and Saudi Arabia is being manipulated, which could end badly.
“The second factor is the stolen ISIL [Islamic State] oil, which reaches the market through Turkey and Israel with a triple discount. It is not much, but it is stolen, so it is cheap,” the Rosneft vice president said.
That the market, primarily in the United States, is filled with American oil is due to the so-called shale revolution and it is a long-term factor, Leontyev stated.
On Friday, after the publication of the OPEC (Organization of the Petroleum Exporting Countries) October report that noted an increase in oil production in the countries belonging to the OPEC countries, international oil prices began to decline.
end
Another important commentary tonight from Bill Holter
(courtesy Bill Holter/Miles Franklin)
Collapse is coming…what will take the blame?
Very interesting times we now live in, the financial system is running out of options very quickly and “blowing up the world” seems to be the only final option. I know, this sounds grandiose and dire but let me explain.
This past week we finally saw some very big volatility in global stock markets. I say “finally” because it has been almost 3 years of a steady grind upward where all drops were “aborted” and volatility kept to a minimum. This changed … “something” has changed. We are now red for the year in the closely followed Dow Jones and actually approaching “bear market” territory on the Russell 2000. European bourses have also been very weak and took out some important support levels this past week.
So what has changed? First, the dollar has had a spike upwards in its biggest rally in 4 years. I believe this to be a result of the Fed “only” printing an extra $10 billion (soon to be zero?) per month versus the previous $85 billion per month. This “lack of extra liquidity” has affected the dollar market (I believe short term) and also upset the leverage in the stock market. On a side note, one of Apple’s suppliers went into a “secret bankruptcy” this past week and the reason for this bankruptcy has been “sealed” by the court. How can this be? Apple is doing great so why would a supplier have a problem? Could it be that this supplier was on the wrong end of some sort of hedge or derivative? I think you can bank on this as the explanation, little else fits AND could be swept under the rug so neatly!
Volatility and stress is back and now being felt and seen plainly in Europe. The euro as an inverse to the dollar has been quite weak. In what would have been “heresy” 10 or more years ago, the calls for a very real and very large “QE” are being heard throughout Europe. RBS and Bank of America were quoted in The Telegraph Dam breaks in Europe as deflation fears wash over ECB rhetoric – Telegraph that deflation is taking over Europe. This very well may be but the flip side of the coin are all the sovereign nations where (understated) debt is at or above the banana republic threshold of 100% debt to GDP ratio. You can now see it as clear as day, “inflate or die” and in either case there unfortunately will be no middle ground.
Another area to look at is oil, the price has cracked well below $90 per barrel for both WTI and Brent crude. Why would this be with all of the unrest and potential production damage caused by warring factions? Zero Hedge put out a great piece on Friday with an explanation Why Oil Is Plunging: The Other Part Of The “Secret Deal” Between The US And Saudi Arabia | Zero Hedge . As I had written about several weeks ago, we are witnessing the U.S. classic playbook in the run up to war.
If you recall, I wrote that standard operating procedure prior to war is to make your opponent weaker financially by hook or by crook. The U.S. has strengthened the dollar and pushed the ruble into new low territory. The price of oil has been pushed down which affects two foes, both the Iranians and Russians. Iran has a breakeven cost for budget purposes of $140 per barrel and Russia budgeted $100. They are being squeezed in the hopes that Syria can be finally toppled without Iranian or Russian interference, I believe this to be a faulty plan.
This of course is all about a gas pipeline that Syria, Russia and Iran do not want as Arab oil and gas will compete with Russia’s production in Europe. I believe this “plan” to be faulty because the Chinese will bankroll the Russians no matter how low oil goes. I also believe this may be THE very last deal where the Saudis work hand in hand with the U.S.. They want Assad gone and at long last have the U.S. doing their dirty work in Syria, what will happen if or when Assad does fall? Do the Saudis really want “cheap oil”? No, no more than Russia or any other producer. Will the Saudis stand with the petrodollar when derivatives are blowing up and taking the financial system with them? Again, no. It is clear the financial power of the U.S. is waning, will Saudi Arabia hang on or will they trade their allegiance toward the rising Chinese? I still personally believe they will not only switch sides but it will be this particular announcement that historians will look back upon as THE watershed event of the decline of American hegemony.
Another big newsworthy area last week was the spread of Ebola. “It couldn’t reach our shores” we were told. It has. Our borders are open, flights from West Africa continue to land here and the virus apparently created and patented by the U.S. is coming home to roost. Fast forward 2 or 3 months, how likely will you be to get on a plane? Or go to a restaurant or shopping mall, grocery store or anywhere else for that matter if it means becoming infected? Connecticut has already declared a state of emergency where your civil rights are no longer and the state can quarantine you if they wish? Ask yourself this, why 5 years ago were 100′s of thousand “hermetically sealed” casket liners stacked up outside of Atlanta? What could they possibly be used for …other than disposing of bodies with “the plague”?
The situation we are now in financially and economically was known about years ago, it just wasn’t known how far down the road the can could be kicked. Now, the ruse all around the world is beginning to collapse and as I have said for the last several months …something or someone will need to be “blamed”. A war, a plague, a computer hack attack, an “un” natural disaster or whatever will be pointed at as the cause for the financial system’s collapse when in fact the table is now in the process being kicked over purposely. The hope in my opinion is that when everything collapses, the public will be more interested in the future and getting back up and running rather than protesting what got us here. Oddly, if the coming collapse can be blamed on an Ebola plague, protestation and violence will be much less than otherwise. Who will risk contracting Ebola by joining protests? What is for sure is that either left alone or “pushed” over the edge, the current ship in its current form is going to mathematically sink. “Blame” will come, the only question being “on what” and the extent of the following reaction. The rest of the world is becoming fully aware of this which is why the demand for gold has increased so dramatically, I will talk about this tomorrow. Regards, Bill Holter
Early Monday morning trading from Europe/Asia
1. Stocks mostly down on Asian bourses with the lower yen values to 107.29
2 Nikkei closed
3. Europe stocks up/Euro up USA dollar index up at 85.52. Chinese bourse Shanghai up as the yuan slightly strengthens in value to 6.12481 per usa dollar/yuan.
3b Japan 10 year yield at .51%/Japanese yen vs usa cross now at 108.33/
3c Nikkei still above 15,000
3d Japan tries to stimulate economy by buying $USA/yen.
3eOil: WTI 84.74 and Brent: 88.42
3f/ Gold up/yen up; yen below 108 to the dollar/
3g Abenomics looks like it is finished!
3h Gold at $1227.00 dollars/ Silver: $17.40
4. USA 10 yr treasury bond at 2.28% early this morning.
5. Details Ransquawk/Bloomberg/Deutche bank/Jim Reid
(courtesy zero hedge)
Futures Storm Into The Green, 20 Points Off The Lows; NY Fed’s Chicago Office Kept Busy All Night
Submitted by Tyler Durden on 10/13/2014 06:37 -0400
• Bank of America
• Bank of America
• Beige Book
• Bond
• China
• Citigroup
• Consumer Sentiment
• CPI
• Crude
• Daniel Tarullo
• Demographics
• Fitch
• fixed
• France
• Germany
• Goldman Sachs
• goldman sachs
• headlines
• Housing Starts
• Iraq
• Japan
• Jim Reid
• Larry Summers
• Monetary Policy
• Morgan Stanley
• Nikkei
• OPEC
• Philly Fed
• Real estate
• Recession
• recovery
• Saudi Arabia
• Trade Balance
• Trade Deficit
• Volatility
inShare1
With futures slamming the lows at their open yesterday evening, touching levels not seen since May, and with the EuroStoxx 50 officialy entering correction just hours ago, down 10% from the June highs, many were wondering if the NY Fed’s Chicago Trading Desk, aka Overnight Ramp Capital LLC, would be put in damage control duty and send futures right back to unchanged (because with new Ebola patient alerts springing up everywhere from Boston to Los Angeles, the pandemic is clearly contained). The answer, with a whopping 20 point levitation on no volume, and futures which are pointing now well into the green (not to mention the Eurostoxx rebounding off the lows and now green too), is a resounding yes (thank the AUDJPY, which is over 100 pips off the overnight lows and back over 94).
Curiously this happened even after China reported another set of imaginary, goalseeked trade numbers, where the trade deficit missed expectations but both exports (+15.3% vs. Exp. +12.0%) and imports (+7.0% vs. Exp. -2.0%) surged beyond expectations, which says nothing about China’s actual trade (recall the trade data is not only goalseeked a la carte but distorted thanks to Commodity Funding Deals), but everything about China’s nonexistant intentions to inject further stimulus into the market/economy.
That said, with liquidity and overnight volumes non-existent, it wasn’t difficult to manipulate ES higher and since Japanese markets are closed today for a holiday, while Columbus day will keep the US bond market offline, this levitation may well continue. On the other hand, sending crude (Brent was just under $89 at last check as Saudi Arabia keeps doing America’s bidding in getting the Kremlin to finally kneel) higher, while pushing bond prices lower (a yield of 2.28% again is basically screaming global recession) may be far more difficult for those Federal employees concerned only with the optics of day to day stock market moves and generating confidence in the economy courtesy of a rigged and manipulated market.
The Shanghai Composite is around 0.4% lower overnight but off its intraday lows. Indeed it has been a fairly weak session for Asian equities. Bourses are in the red across the board (Hang Seng -0.6%, HSCEI -1.0%, KOSPI -0.8%, ASX 200 -0.8%) following the negative US lead on Friday. Treasuries continue to catch a bid on the back of the risk-off tone with the 10yr closing around 3bps lower at 2.28% (at a YTD low and lowest since June 2013) on Friday (closed for Asian session overnight). In FX, the Dollar is weaker overnight (DXY -0.5%) which did little to support Oil prices. The correction in Oil continues with Brent down 1.3% overnight at US$88.9/bbl (near a four year low). Asian stocks fall with the Hang Seng outperforming and the Kospi underperforming. The Nikkei 225 is closed for holiday in Japan. MSCI Asia Pacific down 0.1% to 136.4. Hang Seng up 0.2%, Kospi down 0.7%, Shanghai Composite down 0.4%, ASX down 0.6%, Sensex little changed. 4 out of 10 sectors rise with utilities, telcos outperforming and tech, energy underperforming
European equities have taken the opportunity to cover short-positions as the recent corrective sell-off somewhat abated in the first few hours of trade. Materials and industrials lead the way higher, as a brief spell of USD-weakness and poor performance from Asia-Pacific equities lifted spot gold to trade at 4-week highs of USD 1,237.80/oz. 3 out of 19 Stoxx 600 sectors rise; basic resources, autos outperform, food & beverage, financial services underperform. Eurostoxx 50 -0.2%, FTSE 100 -0.3%, CAC 40 -0.3%, DAX -0.2%, IBEX -0.3%, FTSEMIB little changed, SMI -0.8%, although this was as of the last time we hit F5, and since then Ramp Capital has been very busy.
Looking ahead, US traders will be eyeing any recovery in equities after the 200DMA in the S&P 500 (1905) held on Friday, with the data calendar looking very quiet. The backdrop of earnings season looms, with BofA, Citigroup, JPMorgan and Goldman Sachs all due over the next five days. Tomorrow will see the release of Germany’s ZEW survey alongside CPI prints from the UK, France and Spain. Wednesday’s data highlights will include the US retail sales for September, the Fed’s Beige Book, CPI readings from China and Germany, US PPI, and the NY Fed Empire State survey. Draghi will speak twice on Wednesday which could also be a source for headlines. On Thursday, we will get Industrial Production stats and the Philly Fed Survey from the US on top of the usual weekly jobless claims. European CPI will also be released on Wednesday. We have the first reading of October’s UofM Consumer Sentiment on Friday along with US building permits/housing starts. Yellen’s speech at the Boston Fed Conference on Friday (entitled “Inequality of Economic Opportunity”) will also be closely followed.
Away from the macro events this week, it will also be a busy week for company earnings. We have over 50 S&P 500 companies lined up for quarterly results (nearly a fifth of the index’s market cap). JPMorgan and Citigroup will kick things off for US banks tomorrow followed by BofA on Wednesday, Goldman Sachs on Thursday, and Morgan Stanley on Friday. Away from Financials, we have the likes of Intel, Johnson & Johnson, Google, and GE also reporting this week.
Market Wrap
• S&P 500 futures up 0.1%1 to 1891.4
• Stoxx 600 unchanged 320.3
• US 10Yr yield down little changed at 2.28%
• German 10Yr yield little changed at 0.89%
• MSCI Asia Pacific down 0.1% to 136.4
• Gold spot up 0.6% to $1230.6/oz
Bulletin Headline Summary from Bloomberg and RanSquawk
• Oil markets slump further after Saudi Arabia reportedly signalled that the country is comfortable with low oil prices for an extended period – a move reportedly targeting countries that look to expand oil production (including US shale plays)
• US equity futures indicate a slightly higher open, however sentiment remains very fragile after the S&P 500 suffered the worst two-day performance last week since the taper-tantrum in 2013
• US Columbus Day keeps bond pit trading closed, however all other markets open as usual. Traders eye upcoming earnings from JP Morgan, Bank of America, Citigroup and Goldman Sachs this week
FIXED INCOME
Bund futures failed to break above contract highs of 150.78 shortly following the open, leading to short-term profit-taking and allowing the 10yr yield in Germany to test 0.89% to the upside. Portuguese debt underperforms Germany, with the PO/GE 10yr spread wider by 5.5bps after Fitch affirmed the Portuguese rating at BB+ on Friday – against expectations of a rating upgrade. UK fixed income outperforms, with the UK curve markedly flatter as the Euribor strip is stymied by reports of division amongst the ECB board, after ECB President Draghi’s relationship with Jens Weidmann becomes ‘near impossible’ – lessening the likelihood of an unified agreement to tackle deflation via QE.
EQUITIES
Amid holiday thinned markets (Japanese markets closed, US bond pit to remain shut for Columbus Day), European equities have taken the opportunity to cover short-positions as the recent corrective sell-off somewhat abated in the first few hours of trade. Materials and industrials lead the way higher, as a brief spell of USD-weakness and poor performance from Asia-Pacific equities lifted spot gold to trade at 4-week highs of USD 1,237.80/oz.
Looking ahead, US traders will be eyeing any recovery in equities after the 200DMA in the S&P 500 (1905) held on Friday, with the data calendar looking very quiet. The backdrop of earnings season looms, with BofA, Citigroup, JPMorgan and Goldman Sachs all due over the next five days.
FX
The USD was initially dented in Asia-Pacific trade, as strong buying of the JPY amid holiday-thinned markets weakened the greenback, however the USD has regained some clamour as real-money selling brings EUR/USD off its highs, twinned with European banks taking profit on USD/JPY shorts. AUD trades stronger across the board, as the recent poor performance is partially reversed after China’s trade balance showed both exports (+15.3% vs. Exp. +12.0%) and imports (+7.0% vs. Exp. -2.0%) surged beyond expectations.
COMMODITIES
WTI crude futures tumbled in a continuation of recent weakness as Saudi Arabia have reportedly signalled to market participants that they are comfortable with an extended period of low oil prices – a tactic that some see as a message to other producers looking to increase their output (including US shale plays). (RTRS) Furthermore, Iraq trimmed its price differentials for Basrah Light supplies to Asia and Europe for November, helping accelerate the downside. (RTRS)
The Venezuelan foreign minister has called for an urgent OPEC meeting to deal with falling oil prices. (WSJ) However, Kuwait’s oil minister said OPEC is unlikely to cut oil production in an effort to prop up prices because such a move would not necessarily be effective.
***
DB’s Jim Reid concludes the overnight event summary
The IMF meeting in Washington dominated the weekend headlines which according to the DB staff in attendance was a bit of a worryfest. Worries over global growth, especially in Europe, dis-inflation and secular stagnation came out in style. However timing is everything in financial markets and had this mass gathering been held 2-3 weeks ago it probably would have been dominated by how US growth was going to de-couple from the rest of the world and ultimately drag everyone else up by the bootlaces. As it was the event we hosted with Larry Summers was the big draw as the secular stagnation theme resonated. A reminder that we did an in depth piece on this topic in our long-term study last month for those who want to read more. We still believe secular stagnation is a real issue across large parts of the globe because of demographics, poor resource allocation, a large debt overhang and inequality (to name a few key themes). Such economies arguably need asset bubbles to sustain semi-acceptable growth. This is perhaps why the Fed withdrawing QE and talking about policy normalising seems to be having such an impact on markets. However betting against central bankers hasn’t ultimately been successful in recent years and at some point soon we may start to appreciate that the Fed aren’t likely to raise rates in a weak capital market or economic environment. As for the ECB, the next (and major) response will likely be slow to materialise but it probably will happen. Full QE in 2015 is still the most likely scenario and while it may not have much impact on the economy, the money is likely to find its way into asset markets. So while we would be reasonably bearish on the macro fundamentals still, we suspect the liquidity theme will come back well before year-end. However as we’ve recently discussed, volatility is certainly back to stay in a world without Fed QE.
In response to all these growth fears, the central bankers in Washington generally responded in dovish terms over the weekend. The one that stood out was perhaps comments from Fed’s Vice Chairman Stanley Fischer who said that “if foreign growth is weaker than anticipated, the consequences for the U.S. economy could lead the Fed to remove accommodation more slowly than otherwise”. He also hinted that the market is roughly on the mark regarding the timing of US rate hikes but it is perhaps a reminder that the global outlook does matter for the Fed. As for other dovish sound bites, Fed Governor Daniel Tarullo speaking at an IIF conference said that he is worried about global growth and noted “there are more downside risks than upside risks” which is “obviously something we have to think about in our own policies”. Chicago Fed’s Evans also said that a strengthening of the USD and weak growth aboard could mean slower inflation in the US and less justification for the Fed to hike rates.
Away from Fed officials there was also more debate around what is the right policy for Europe – in particular the mix between monetary and fiscal policies. Draghi said that ECB’s balance sheet expansion is the last monetary tool left to revive inflation. Draghi reiterated his EUR1trillion target but this was met by some opposition by Bundesbank’s Weidmann who said that a target value isn’t set in stone. Indeed Germany looks rather isolated when it comes to policy prescriptions for Europe. Draghi’s call for easier fiscal policies from European countries (that can afford to) was opposed by Germany’s Finance Minister Wolfgang Schaeuble earlier last week who continues to emphasise on fiscal discipline and structural reforms across Europe. This was again a key theme in Washington over the weekend with Larry Summers, Christine Lagarde, and Jyrki Katainen all urging for more fiscal flexibility from Germany. A Die Welt lead editorial on Sunday also argued that a weakening German economy should force a policy rethink and warned that Schaeuble’s push to achieve a “schwarze Null” (a federal budget that is in the black) in 2015 should not turn into a mindless “fetish”.
DM developments aside the main EM headlines from Washington was on China. PBOC’s Chief Economist Jun Ma doesn’t see any reason for large-scale fiscal or monetary stimulus “in the foreseeable future” despite China’s slowing growth. He thinks the risk of a hard landing is very low but did note that leverage in certain sectors — including real estate, certain state-owned enterprises and local-government financing vehicles — was already too high, and that further lending to these areas should be avoided. On a similar note, China’s Premier Li reaffirmed during a speech in Hamburg that “China’s economy will not suffer a ‘hard landing’ like some people fear”. PBOC’s governor Zhou also re-iterated the party line that the central bank will stick to a prudent monetary policy but also noted that employment is better-than-expected, inflation is relatively low, and expects China GDP to be at about 7.5% this year.
Staying on China the latest data overnight were on the encouraging side of things. Both exports (+15.3% yoy v +12.0% yoy expected) and imports (+7.0% yoy v -2.0% yoy expected) grew more than expected in September. The Shanghai Composite is still around a percent lower overnight but off its intraday lows. Indeed it has been a fairly weak session for Asian equities. Bourses are in the red across the board (Hang Seng -0.6%, HSCEI -1.0%, KOSPI -0.8%, ASX 200 -0.8%) following the negative US lead on Friday. Indeed the S&P 500 (-1.15%) fell for its second consecutive day to close at its lowest since May. We are now around 5% off its recent highs of 2011 and hovering just around an interesting technical level namely its 200-day moving average. The S&P 500 Futures (-0.5%) are now trading at around 1884 as we type. Treasuries continue to catch a bid on the back of the risk-off tone with the 10yr closing around 3bps lower at 2.28% (at a YTD low and lowest since June 2013) on Friday (closed for Asian session overnight). In FX, the Dollar is weaker overnight (DXY -0.5%) which did little to support Oil prices. The correction in Oil continues with Brent down 1.3% overnight at US$88.9/bbl (near a four year low).
Moving on to today, the risk tone will likely be dictated by the European session as US activity will be very light given the Columbus Day holiday. We have a relatively quiet day for data watchers today but the calendar will pick up tomorrow and beyond with a big focus on inflation numbers amongst other things. Indeed tomorrow will see the release of Germany’s ZEW survey alongside CPI prints from the UK, France and Spain. Wednesday’s data highlights will include the US retail sales for September, the Fed’s Beige Book, CPI readings from China and Germany, US PPI, and the NY Fed Empire State survey. Draghi will speak twice on Wednesday which could also be a source for headlines. On Thursday, we will get Industrial Production stats and the Philly Fed Survey from the US on top of the usual weekly jobless claims. European CPI will also be released on Wednesday. We have the first reading of October’s UofM Consumer Sentiment on Friday along with US building permits/housing starts. Yellen’s speech at the Boston Fed Conference on Friday (entitled “Inequality of Economic Opportunity”) will also be closely followed.
Away from the macro events this week, it will also be a busy week for company earnings. We have over 50 S&P 500 companies lined up for quarterly results (nearly a fifth of the index’s market cap). JPMorgan and Citigroup will kick things off for US banks tomorrow followed by BofA on Wednesday, Goldman Sachs on Thursday, and Morgan Stanley on Friday. Away from Financials, we have the likes of Intel, Johnson & Johnson, Google, and GE also reporting this week.
end
No stimulus will be coming forth from China.
(courtesy zero hedge)
China Central Bank Crushes Hopes For A “Large-Scale Fiscal Or Monetary Stimulus”
Submitted by Tyler Durden on 10/12/2014 15:13 -0400
• China
• Housing Market
• Jamie Dimon
• Mahwah
• New York Stock Exchange
• Real estate
• Shadow Banking
• Wall Street Journal
inShare1
Late into Friday’s major market selloff, a completely unfounded rumor emerged out of nowhere, seeking to rekindle the BTFD spirits, that with central bank intervention from both the BOJ and ECB already priced in, and with the Fed still in taper mode (if not for much longer should the S&P dump accelerate), that the last central-planner wildcard, China, would join the fray and a major monetary gusher would come out of Beijing over the weekend to halt the slide. Alas, we have bad news for said BTFDers: just hours before futures are set to open on Sunday afternoon, the chief economist at China’s central bank said Saturday that he doesn’t see any reason for large-scale fiscal or monetary stimulus “in the foreseeable future” despite slowing growth in the world’s second-largest economy and disagreements about the depth and timing of economic overhauls.
According to the WSJ, the PBOC’s Ma Jun, speaking in Washington at a meeting of the Institute of International Finance – the same place where Jamie Dimon said that he is concerned about shadow banking – said the Chinese job market “looks pretty stable” despite wobbly economic growth. That’s up to debate, but it was what he said about leverage in certain sectors — including real estate, certain state-owned enterprises and local-government financing vehicles — that was already too high, and that further lending to these areas should be avoided.
Ma Jun, chief economist at the People’s Bank of China, shown in September.
We have covered the critical state of China’s debt-stock consistently since 2009, a country whose corporate debt is higher than any developed or developing country, so while we wholeheartedly agree with Jun, one question emerges: why tell the truth? After all, the only reason the status quo managed to survive so long is because it piled lies upon lies upon propaganda. If indeed the times has come for the truth, then all bets are off…
And while in Beijing, debate about how to manage the country’s slowdown has been intense, so far the monetary authority has not been involved apart from rumors and innuendo. Furthermore, it was in late September when hopes flared that China would join the easing fray following news that the existing PBOC governor, Zhou, would be replaced with a far more pro-stimulus candidate. However, so far that has not materialized.
The People’s Bank of China so far has bolstered the economy using narrow stimulus measures, including targeted lending in sectors like agriculture and public housing. But The Wall Street Journal reported last month that Chinese leaders are considering replacing the central bank’s governor, Zhou Xiaochuan, as part of internal battles over whether larger-scale expansion of credit should be used to spur economic growth.
Mr. Ma on Saturday instead emphasized the importance of reforms to prevent slower growth from turning into a broader crisis. The government is working on improving the productivity of state-owned companies and better controlling their spending, he said. Beijing also is endeavoring to allow more companies both public and private to go bankrupt, which is “warranted,” he added.
Clearly, this is a major market negative. As for future growth, Mr. Ma said China has “interesting bright spots” including tech and health care, which he predicts will rise to above 10% of GDP from 6% today. “I think the chance of a hard landing is very low,” he said, referring to worries about a sharp slowdown in China’s economy.
The punchline:
Part of China’s “new normal,” he said, is that “big stimulus” won’t be called for every time growth decelerates. “And secondly, the new norm will involve a lot of rebalancing in terms of changing the economic structure.”
If that is indeed the case, one can now forget about any Chinese monetary intervention. Or rather, one can forget about such intervention until such time as the Chinese housing market is in freefall, at which point China’s 1+ billion society will be on (if not beyond) the edge of out right revolt. To say that the PBOC will not get involved at that point is certainly naive. However, to gether there, there will be blood on the streets, metaphorically when it comes to the New York stock exchange in Mahwah, NJ and literally when it comes to China.
end
Dubai crashes over 6.5% on Sunday:
(courtesy zero hedge)
Ripple Effects Begin: Dubai Crashes Over 6.5%, Most In 14 Months
Submitted by Tyler Durden on 10/12/2014 15:00 -0400
• Dubai
• Equity Markets
inShare3
It appears the weakness in US equity markets (the last of the hot money flow darlings to be hit) is now rippling back down the bubble-complex of world equity markets. Dubai, infamous for its huge surge in the last 2 years and 36x over-subscribed IPO of a company with no actual operations – which marked the top before a 30% collapse – was open for business today and crashed 6.5%. This the Dubai Financial Markets General Index biggest daily drop in 14 months… the ripple effect is beginning.
It appears the hot money trades are slowly being unwound… commodities, EM FX, HY credit, and now US equities…
And are now blowing-back to the rest of the world’s most bubblicious markets…
Charts: Bloomberg
end
Overnight, Dollar/Yen collapses which sends futures on the Nikkei to below 15,000. Nikkei will begin trading tonight:
(courtesy zero hedge)
BoJ Invisible Hand (Briefly) Rescues Nikkei From Sub-15,000 Plunge (Again)
Submitted by Tyler Durden on 10/12/2014 20:22 -0400
• Japan
• Nikkei
inShare
UPDATE: That didn’t last long… NKY back under 15k as JPY collapses
Heavy volume selling in Nikkei futures at the open sent the index down over 200 points and broke the oh-so-crucial 15,000 line. It appears – just as in August that 15,000 is the BoJ’s line in the sand as a miracle buyer turned up and lifted the index all the way back to 15,000 (whiule JPY remained lower and US futures saw no bounce). Of course, for those who prefer to ignore the fact that the BoJ is almost the biggest holder of Japanese stocks in the world and bought more stock ETFs than ever before in August, this is a clear signal of BTFD’ers back to save the world. For the rest of the sane rational fact-checking market participants, that ‘know’ the BoJ’s trigger to buy is a weak morning session, we wonder how much of this futures ramp is front-running… that will fade as JPY is not supportive at all.
Who has the muscle to do this in size in the face of heavy volume… in the face of VongFong too
Because it’s not carry traders lifting it…
Now where have we seen that miracle buying before…
Don’t forget the market’s perception that if Japan is down 1% in the morning, the BoJ comes to the rescue… or is it different this time?
Charts: Bloomberg
end
Russia and China sign another 150 billion yuan vs rouble swap as plunging oil price is having a powerful effect on Russia. Inflation is ripping through Russia which may force Putin for price controls.
However the plunging oil price is drawing Putin closer to China and more trade between these two countries bypassing the uSA and its dollar completely:
(courtesy zero hedge)
China, Russia Sign CNY150 Billion Local-Currency Swap As Plunging Oil Prices Sting Putin
Submitted by Tyler Durden on 10/13/2014 07:57 -0400
• Central Banks
• China
• European Union
• Natural Gas
• Newspaper
• OPEC
• Reality
• Recession
• Renminbi
• Saudi Arabia
• SPY
• Ukraine
• Vladimir Putin
• Yuan
inShare8
While it is beyond a doubt that the primary catalyst for Europe’s triple-dip recession has been the nearly two quarters and counting of escalating Russian sanctions that were supposed to solely harm Putin (because who could have possibly foreseen that plunging German exports to Russia would have a far greater impact on the export-driven German economy), the truth is that the Kremlin itself is starting to hurt, if not so much as a result of the European trade embargo but mostly due to crashing oil prices, which have been driven lower almost exclusively by Saudi Arabia as part of its most recent secret bargain with the US, a bargain which as we read today is likely to tear OPEC apart.
One place where Russia has been hit the hardest as a result of tumbling oil prices, is the crashing currency, with the Ruble hitting new record lows against the USD on a daily basis. In fact, as Bloomberg reports, Russia has been forced to spend a whopping $6 billion in just the past 10 days to slow down the tumble of the RUB:
The ruble extended its longest losing streak in more than a year as $6 billion of Russian currency interventions failed to stem the depreciation amid tumbling oil prices.
The ruble weakened 0.5 percent versus the dollar-euro basket to 45.2911 by 1:50 p.m. in Moscow, taking its seven-day decline to 2.2 percent, the longest stretch of losses since the nine days ended Aug. 1, 2013. Oil, which along with natural gas contributes almost half of Russia’s revenue, fell 2.4 percent to $88.08 per barrel in London, the lowest since December 2010.
Russia’s central bank intervened in the past 10 days to stabilize the ruble, central bank Governor Elvira Nabiullina told lawmakers in Moscow today. The action, which comes as President Vladimir Putin orders a withdrawal of Russian forces from Ukraine’s border, has so far failed to halt the ruble’s decline amid a domestic foreign currency shortage stemming from sanctions. The cost of swapping rubles into dollars widened to a record.
“The main driver for the ruble right now is the oil price,” Dmitry Polevoy, the chief economist for Russia at ING Groep NV, said in e-an e-mailed note. Crude’s decline “totally eclipses” the “reassuring news” that Russia announced it was pulling back forces from Ukraine’s borders, he said.
Needless to say, Saudi Arabia is hardly getting a Christmas card from Putin this year, although one wonders, just what channels will the former KGB spy use to retaliate against the Saudi princes. Because retaliate he will.
In the meantime, however, Putin has other problems as well, the main of which is a direct consequence of the tumbling currency, namely soaring inflation, and the all too possible reality of upcoming price controls. From the WSJ:
Russia’s government is considering freezing prices for some “socially important” goods as inflation nears a four-year high, the government newspaper Rossiyskaya Gazeta reported on Thursday.
Russia had been aiming to bring inflation to a post-Soviet low of 5% this year, but the annexation of Ukraine’s region of Crimea ruined the plan. The annexation and the subsequent sanctions imposed by Western countries have put pressure on the ruble, making imports more expensive. The Kremlin’s decision to ban food imports from states that have sanctioned Russia has further spurred already burgeoning inflation.
Russia’s Industry and Trade Minister Denis Manturov said in an interview with Rossiyskaya Gazeta that the government may artificially stabilize prices for some 40 vital goods if a price jumps by more than 30%. He did not say what these goods were or when the price freeze may happen.
If Venezuela or Argentina is any indication, price controls always end badly. And the local population knows this, which completes the triple whammy of Russia’s sharp economic impact, namely the accelerating conversion of ruble denominated savings into dollars, sapping Russian commercial banks’ dollar holdings, and yet another drain on Russia’s central bank reserves:
More Russians are keeping their cash in dollars and euros as the ruble falls to records amid central bank efforts to maintain control over the pace of the decline.
The number of people with foreign-currency holdings rose in September from August, Bank of Russia said in its inflation report published Oct. 10. OAO Sberbank, Russia’s biggest lender, had its first drop in retail deposits since May last month, while the premium to swap rubles for dollars climbed to a record at the end of last week, data compiled by Bloomberg show.
Investors are betting the most in six years that central bank Governor Elvira Nabiullina will have to raise interest rates after about $6 billion of interventions failed to prevent the ruble from reaching all-time lows every day last week. While the economy risks sinking into a recession amid U.S. and European Union sanctions over the crisis in Ukraine, policy makers must underpin confidence in the ruble.
“Once the mindset of a crisis sets in, it becomes a self-fulfilling prophecy,” Neil Shearing, an economist at Capital Economics Ltd. in London, said by phone on Oct. 10. “Residents start to anticipate further weakness in the ruble and shift out of rubles and into hard currency and that precipitates further weakness.”
To be sure, the traditional read through of this news is quite negative for the economy of yet another country which is reliant on the petrodollar. On the other hand, another take is that the collusion between the US, Europe and now Saudi Arabia will merely force Russia to accelerate its bilateral ties with China, in everything from trade to capital flows. Indeed, that is precisely what is happening. As RIA reported over the weekend, China is ready to export agricultural products and oil and gas equipment to Russia, China’s Vice Premier Wang Yang stated Saturday. Products, for which Russia could pay in either Rubles or Renminbi, thereby accelerating the de-dollarization of bilateral commercial relations.
“China is willing to export to Russia such competitive products as agricultural goods, oil and gas equipment, and is ready to import Russian engineering products,” Wang Yang said during the 18th session of the Russian-Chinese Commission for the Preparation of Regular Meetings of the Heads of Governments.
He noted that trade turnover between Russia and China is increasing every year. Compared to the same period of 2013, it has already grown by 6.7 percent. This trend will help to accomplish the task to increase trade turnover to $100 billion by 2015. The Russian-Chinese Commission for the Preparation of Regular Meetings of the Heads of Governments is currently taking place in Sochi. The annual Russian-Chinese Economic Forum is held within its frameworks.
The participants of this year’s forum have noted a positive trend in the development of joint investment, economic, industrial projects, and strengthening of partnerships between the two countries.
Bloomberg added that Russia, China sign accords on energy, banking, technology, during a ceremony overseen by Russian Prime Minister Dmitry Medvedev, Chinese Premier Li Keqiang in Moscow. Pacts include accords on east gas pipeline route, double-tax treaty, satellite navigation, high-speed rail cooperation, Rosneft-CNPC cooperation, local-currency swaps, and so on. China Exim Bank also signs accords w/ VTB, Vnesheconombank, Russian Agricultural Bank.
And the cherry on top came moments ago when, as if to assure all involved parties that there will be enough capital support on both sides, the PBOC released a surprising announcement that the central banks of China and Russia signed a 3-year, 150 billion yuan bilateral local-currency swap deal today, according to a statement posted on PBOC website. Deal can be expanded if both parties agree, statement says. Deal aims to make bilateral trade and direct investment more convenient and promote economic development in 2 nations.
To be sure, some such as Bloomberg, are skeptical that the unprecedented pivot by Russia toward China as it shuns the west, will merely harm the Kremlin. Others, however, wonder: who will be left standing: Europe, with its chronic deficit of energy and reliance on Russia, a country overflowing with natural resources, or Russia, whose economy is currently underoing a dramatic and painful shift, as it scrambles to dissolve all linkages to the Petrodollar and face the Gas-O-Yuan? Perhaps it is worth refreshing this subject in a few months, after Europe’s economic situation is made far more clear after what is sure to be a long, cold winter.
end
The major city of Kobani is about to fall as ISIS strengthens it’s positions throughout Iraq and Syria:
(courtesy zero hedge/Patrick Cockburn/the Indepedent)
America’s Anti-ISIS Strategy Is In Tatters
Submitted by Tyler Durden on 10/12/2014 18:31 -0400
• Iran
• Iraq
• national security
• President Obama
• Reality
• Saudi Arabia
• Turkey
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A week ago we noted how critical the seige in Kobani was (and why it suggested President Obama’s strategy was a fiasco given a lack of commitment from supposed allies such as Turkey). 7 days later.. and America’s plans to fight Islamic State are in ruins as the militant group’s fighters come close to capturing Kobani and have inflicted a heavy defeat on the Iraqi army west of Baghdad. While John Kerry has today stated, “Kobani does not define strategy against Islamic State,” the ‘loss’ is symbolic as The Independent’s Patrick Cockburn notes, in both Syria and Iraq, ISIS is expanding its control rather than contracting.
Authored by Patrick Cockburn via The Independent,
The US-led air attacks launched against Islamic State (also known as Isis) on 8 August in Iraq and 23 September in Syria have not worked. President Obama’s plan to “degrade and destroy” Islamic State has not even begun to achieve success.In both Syria and Iraq, Isis is expanding its control rather than contracting.
Isis reinforcements have been rushing towards Kobani in the past few days to ensure that they win a decisive victory over the Syrian Kurdish town’s remaining defenders. The group is willing to take heavy casualties in street fighting and from air attacks in order to add to the string of victories it has won in the four months since its forces captured Mosul, the second-largest city in Iraq, on 10 June. Part of the strength of the fundamentalist movement is a sense that there is something inevitable and divinely inspired about its victories, whether it is against superior numbers in Mosul or US airpower at Kobani.
In the face of a likely Isis victory at Kobani, senior US officials have been trying to explain away the failure to save the Syrian Kurds in the town, probably Isis’s toughest opponents in Syria. “Our focus in Syria is in degrading the capacity of [Isis] at its core to project power, to command itself, to sustain itself, to resource itself,” said US Deputy National Security Adviser Tony Blinken, in a typical piece of waffle designed to mask defeat. “The tragic reality is that in the course of doing that there are going to be places like Kobani where we may or may not be able to fight effectively.”
Unfortunately for the US, Kobani isn’t the only place air strikes are failing to stop Isis. In an offensive in Iraq launched on 2 October but little reported in the outside world, Isis has captured almost all the cities and towns it did not already hold in Anbar province, a vast area in western Iraq that makes up a quarter of the country. It has captured Hit, Kubaisa and Ramadi, the provincial capital, which it had long fought for. Other cities, towns and bases on or close to the Euphrates River west of Baghdad fell in a few days, often after little resistance by the Iraqi Army which showed itself to be as dysfunctional as in the past, even when backed by US air strikes.
Today, only the city of Haditha and two bases, Al-Assad military base near Hit, and Camp Mazrah outside Fallujah, are still in Iraqi government hands. Joel Wing, in his study –”Iraq’s Security Forces Collapse as The Islamic State Takes Control of Most of Anbar Province” – concludes: “This was a huge victory as it gives the insurgents virtual control over Anbar and poses a serious threat to western Baghdad”.
The battle for Anbar, which was at the heart of the Sunni rebellion against the US occupation after 2003, is almost over and has ended with a decisive victory for Isis. It took large parts of Anbar in January and government counter-attacks failed dismally with some 5,000 casualties in the first six months of the year. About half the province’s 1.5 million population has fled and become refugees. The next Isis target may be the Sunni enclaves in western Baghdad, starting with Abu Ghraib on the outskirts but leading right to the centre of the capital.
The Iraqi government and its foreign allies are drawing comfort, there having been some advances against Isis in the centre and north of the country. But north and north-east of Baghdad the successes have not been won by the Iraqi army but by highly sectarian Shia militias which do not distinguish between Isis and the rest of the Sunni population. They speak openly of getting rid of Sunni in mixed provinces such as Diyala where they have advanced. The result is that Sunni in Iraq have no alternative but to stick with Isis or flee, if they want to survive. The same is true north-west of Mosul on the border with Syria, where Iraqi Kurdish forces, aided by US air attacks, have retaken the important border crossing of Rabia, but only one Sunni Arab remained in the town. Ethnic and sectarian cleansing has become the norm in the war in both Iraq and Syria.
The US’s failure to save Kobani, if it falls, will be a political as well as military disaster. Indeed, the circumstances surrounding the loss of the beleaguered town are even more significant than the inability so far of air strikes to stop Isis taking 40 per cent of it. At the start of the bombing in Syria, President Obama boasted of putting together a coalition of Sunni powers such as Turkey, Saudi Arabia, Qatar, Jordan, United Arab Emirates and Bahrain to oppose Isis, but these all have different agendas to the US in which destroying IS is not the first priority. The Sunni Arab monarchies may not like Isis, which threatens the political status quo, but, as one Iraqi observer put it, “they like the fact that Isis creates more problems for the Shia than it does for them”.
Of the countries supposedly uniting against Isis, by the far most important is Turkey because it shares a 510-mile border with Syria across which rebels of all sorts, including Isis and Jabhat al-Nusra, have previously passed with ease. This year the Turks have tightened border security, but since its successes in the summer Isis no longer needs sanctuary, supplies and volunteers from outside to the degree it once did.
In the course of the past week it has become clear that Turkey considers the Syrian Kurd political and military organisations, the PYD and YPG, as posing a greater threat to it than the Islamic fundamentalists. Moreover, the PYD is the Syrian branch of the Kurdistan Workers’ Party (PKK), which has been fighting for Kurdish self-rule in Turkey since 1984.
Ever since Syrian government forces withdrew from the Syrian Kurdish enclaves or cantons on the border with Turkey in July 2012, Ankara has feared the impact of self-governing Syrian Kurds on its own 15 million-strong Kurdish population.
President Recep Tayyip Erdogan would prefer Isis to control Kobani, not the PYD. When five PYD members, who had been fighting Isis at Kobani, were picked up by the Turkish army as they crossed the border last week they were denounced as “separatist terrorists”.
Turkey is demanding a high price from the US for its co-operation in attacking Isis, such as a Turkish-controlled buffer zone inside Syria where Syrian refugees are to live and anti-Assad rebels are to be trained. Mr Erdogan would like a no-fly zone which will also be directed against the government in Damascus since Isis has no air force. If implemented the plan would mean Turkey, backed by the US, would enter the Syrian civil war on the side of the rebels, though the anti-Assad forces are dominated by Isis and Jabhat al-Nusra, the al-Qaeda affiliate.
It is worth keeping in mind that Turkey’s actions in Syria since 2011 have been a self-defeating blend of hubris and miscalculation. At the start of the uprising, it could have held the balance between the government and its opponents. Instead, it supported the militarisation of the crisis, backed the jihadis and assumed Assad would soon be defeated. This did not happen and what had been a popular uprising became dominated by sectarian warlords who flourished in conditions created by Turkey. Mr Erdogan is assuming he can disregard the rage of the Turkish Kurds at what they see as his complicity with Isis against the Syrian Kurds. This fury is already deep, with 33 dead, and is likely to get a great deal worse if Kobani falls.
Why doesn’t Ankara worry more about the collapse of the peace process with the PKK that has maintained a ceasefire since 2013? It may believe that the PKK is too heavily involved in fighting Isis in Syria that it cannot go back to war with the government in Turkey. On the other hand, if Turkey does join the civil war in Syria against Assad, a crucial ally of Iran, then Iranian leaders have said that “Turkey will pay a price”. This probably means that Iran will covertly support an armed Kurdish insurgency in Turkey. Saddam Hussein made a somewhat similar mistake to Mr Erdogan when he invaded Iran in 1980, thus leading Iran to reignite the Kurdish rebellion that Baghdad had crushed through an agreement with the Shah in 1975. Turkish military intervention in Syria might not end the war there, but it may well spread the fighting to Turkey.
end
ISIS seizes an Iraqi military base 29 kilometres from Baghdad
(courtesy bloomberg/Alwan)
Islamic State Seizes Iraq Base Amid Concern for Baghdad
By Aziz Alwan Oct 13, 2014 12:06 PM ET
Islamic State came closer to gaining full control of Iraq’s Anbar province after it seized a military base to the west of Baghdad that had been one of the government’s few remaining outposts there.
Militants took the base, located near the town of Hit and a major highway from Baghdad to the Syrian border, after heavy fighting with soldiers, according to Ahmed al-Dulaimi, a Sunni tribal leader. Its capture increases the threat to Ramadi, Anbar’s capital, and to Iraq’s second-largest dam at Haditha.
The insurgent group has declared a caliphate that stretches across much of northern Syria and Iraq, prompting the U.S. to launch a bombing campaign backed by European and Arab allies to halt the advance. The group’s recent gains to the west of Baghdad have sparked concern it’s preparing to attack the capital.
Al-Qaeda’s Heirs
Islamic State captured the Anbar towns of Hit and Kubaisa last week, and its fighters are battling Iraqi forces in Abu Ghraib, 18 miles (29 kilometers) from Baghdad’s fortified Green Zone that houses embassies and government offices.
Airport Threat
The top U.S. military officer said yesterday that Islamic State is moving into areas populated by fellow Sunnis near the capital. “I have no doubt there will be days when they use indirect fire into Baghdad,” Joint Chiefs Chairman General Martin Dempsey said in an interview with ABC’s “This Week.” Indirect fire can refer to use of mortars or artillery.
Dempsey also said that the U.S. recently had to call in Apache attack helicopters to secure the Baghdad airport and prevent Iraqi forces from being overrun, without specifying when it happened. While an outright assault on the capital is unlikely, strikes from a distance could heighten the sense of insecurity there, he said.
Baghdad is already the target of regular attacks, some of them claimed by Islamic State. The group said it was behind Oct. 11 suicide bombings that killed more than 43 people in the Shiite Shula and Kadhimiya districts of Baghdad, as well as similar attacks yesterday in Diyala north of the capital.
‘Combative’ Militias
Baghdad will be better defended than Iraqi cities such as Mosul, seized by Islamic State after it routed the Iraqi army during a lightning advance across the north in June, according to Peter Harling, senior Middle East and North Africa adviser at the International Crisis Group.
“There is simply no way, for instance, Daesh could storm the large, combative Shiite militias that are awaiting in the Iraqi capital, and which enjoy unconditional state backing, from both the local government and Iran,” he said in an e-mailed reply to questions.
To contact the reporter on this story: Aziz Alwan in Baghdad at [email protected]
end
Mark Carney is telling bankers to embrace new rules as criminal charges are being laid against bankers into the Libor scandal.
(courtesy UKTelegraph/ and special thanks to Robert H for sending this to us)
Carney tells bankers to embrace new rules or quit – Telegraph
Senior bank executives unhappy with new rules to make them criminally liable for failures should resign, according to the Governor of the Bank of England.
Mark Carney said directors and top executives should be made more responsible for any reckless staff behaviour because reforms to curb bank pay were not enough to prevent another financial crisis.
“One of the legacies of the crisis in the US and by and large in the UK was that the individuals who ran the institutions got away. They got away with their compensation packages, they got away without sanction,” Mr Carney said at an event at the International Monetary Fund’s annual meeting. “Maybe they were not at the best tables in society after that, but they’re still at the best golf courses. That has to change.”
However, Mr Carney conceded it was not possible to prevent risky behaviour through new remuneration measures alone, such as a limit to cash bonuses and clawbacks. “It’s very hard to design compensation for systemic outcomes, to internalise financial stability risks. So you need something more.”
Mr Carney’s broadside comes after it was reported that two of HSBC’s most senior executives were poised to quit as part of a pushback against new misconduct rules that mean reckless bankers face a maximum jail sentence of seven years. While Mr Carney did not address the resignations directly, he said regulators would not back down.
“If you’re chair of an audit committee, you have responsibility for the activities of an institution. And if you don’t think you can discharge that responsibility, you shouldn’t be on that board.”
He said bankers who abused the Libor inter-bank lending rate had become “detached” from reality in their search for profits. “These are individuals who were totally detached from what the ultimate purpose of what that benchmark really is. It [became] a game between people within a square mile.”
But Philipp Hildebrand, vice-chairman of Blackrock who joined Mr Carney on the panel, warned that creating a “cops and robbers” situation where onerous regulation and hefty fines prevented banks from conducting day-to-day activities would also be counterproductive.
The Archbishop of Canterbury, the Most Rev Justin Welby, added: “It will be very difficult and painful to change, but failure to change the leadership and culture over the next five years … means that we will end up with a financial services industry that is over-regulated, that is risk averse, and therefore can’t oil the economy.” All agreed that a simple regulatory framework should be put in place to ensure rules were clear and simple.
In a separate speech on Sunday, Mr Carney said global regulators had reached a “watershed” moment in ending “too big to fail” that would be presented at next month’s G20 summit in Brisbane, Australia.
The world’s most powerful nations will agree a minimum capital buffer limit for the biggest banks that Mr Carney said would establish a “level playing field” that would help to stop taxpayer-funded bail-outs.
“Operating in a heads-I-win-tails-you lose bubble, the world’s largest banks threatened the stability of the global financial system. Their bail-out using public funds undermines market discipline and goes to the heart of fairness in our societies,” he said. “This cannot be allowed to continue.”
end
No kidding!!
these guys are already hyperinflating!!
(courtesy Bloomberg)
Venezuela Default Almost Certain, Harvard Economists Say
By Sebastian Boyd and Anatoly Kurmanaev Oct 13, 2014 5:25 PM E
Venezuela should default on its foreign debt as a shortage of dollars makes it impossible for the government to meet its citizens’ basic needs, Harvard University economistsCarmen Reinhart and Kenneth Rogoffsaid.
The economy is so badly managed that per-capita gross domestic product is 2 percent below 1970 levels, the professors wrote in an opinion piece published by Project Syndicate today. A decade of currency controls has made dollars scarce in the country with the world’s biggest oil reserves, causing shortages of everything from deodorant to airplane tickets.
“Given that the government is defaulting in numerous ways on its domestic residents already, the historical cross-country probability of an external default is close to” 100 percent, Reinhart and Rogoff wrote. “External default would be a good thing.”
The suggestion that the country stop servicing its bonds comes a month after Harvard colleagues Ricardo Hausmann and Miguel Angel Santos wrote that Venezuela should consider defaulting given that it was piling up arrears to importers. Venezuela owes about $21 billion to domestic companies and airlines, according to Caracas-based consultancy Ecoanalitica.
Venezuelan debt is the riskiest in the world, yielding 15.42 percentage points more than similar maturity Treasuries, according to data compiled by JPMorgan Chase & Co. The cost to insure the country’s bonds against default with credit-default swaps is also the highest for any government globally.
Photographer: Andrew Harrer/Bloomberg
“Given that the government is defaulting in numerous ways on its domestic residents…Read More
Bond Decline
The country’s bonds fell 1.9 percent on Sept. 5, the day Hausmann and Santos published their article, and 4.4 percent on Sept. 8, the next trading day.
The two-day decline was the steepest in more than a year. PresidentNicolas Maduro dubbed Hausmann a “financial hitman” and “outlaw,” and instructed the attorney general and public prosecutor to take “actions” against the Venezuelan-born professor for seeking to destabilize the country.
“Given the depth and breadth of the deepening crisis that Venezuela is facing, Maduro’s efforts and attention would be best directed at resolving the country’s problems, rather than at lashing out against scholars stating uncomfortable truths,” Reinhart and Rogoff wrote.
Venezuela this month paid back $1.5 billion of debt that matured on Oct. 8. It dipped into its international reserves to make the payment, pushing them to an 11-year low of $19.8 billion. The payment didn’t end the decline in the country’s bonds, which have lost 22 percent in the past three months.
IMF Economist
State-owned oil company Petroleos de Venezuela SA is due to pay back $3 billion of maturing bonds on Oct. 28. It has already bought back 60 percent of the debt, a company official said Oct. 10. The company will also pay interest on bonds due in 2017, 2027 and 2037 on Oct. 14, it said in an e-mailed statement yesterday.
Rogoff is the former chief economist at the International Monetary Fund and author of a 1985 paper suggesting central banks should focus more on low inflation than spurring employment.
Rogoff and Reinhart wrote the 2009 book “This Time Is Different: Eight Centuries of Financial Folly,” which predicted that the recovery from the financial crisis would be a “protracted affair,” featuring extended declines in asset markets, large contractions in output and employment, and an explosion of government debt — similar to the aftermath of past financial crises.
Reinhart and Rogoff argued in a 2010 paper that high government debt depresses GDP growth. In emerging-market countries, high debt-to-GDP ratios may also spark inflation, they wrote.
Debt Ratios
In 2013, the professors acknowledged they had inadvertently left some data out of their calculations for the paper, which had been used by some policy makers to justify austerity in the U.S. and Europe, after researchers at the University of Massachusetts at Amherst questioned their methods.
While Reinhart and Rogoff claim the error doesn’t change the thrust of their research, Nobel laureate and Princeton University economist Paul Krugman has said the two are doing little to dispel what he calls a misconception generated by their paper that economies falter when debt levels exceed 90 percent of GDP.
To contact the reporters on this story: Sebastian Boyd in Santiago at [email protected]; Anatoly Kurmanaev in Caracas at [email protected]
To contact the editors responsible for this story: Brendan Walsh at [email protected]; Andre Soliani at [email protected] Robert Jameson
end
•
We now have our first person to person transmission of the Ebola virus on USA soil:
(courtesy zero hedge)
Dallas Hospital Worker Tests Positive For Ebola In First Person-To-Person Transmission On US Soil
Submitted by Tyler Durden on 10/12/2014 08:57 -0400
• Reality
inShare9
And then there was #2. A few hours ago, Texas Health Presbyterian Hospital, announced that a health care worker who cared for dying Ebola patient Thomas Eric Duncan, has tested positive for the virus after a preliminary test, officials said early Sunday. If confirmed, it would be the first known person-to-person transmission of the disease in the United States. The name of the patients is currently unknown, what is known however, is that the worker was “considered to be at low risk for contracting the virus” and the he or she was wearing full protective gear when treating Duncan, suggesting – yet again – that there is a transmission mechanism which is not accounted for under conventional protocol.
Confirmatory testing of the second case on U.S. soil will be conducted by the Centers for Disease Control and Prevention in Atlanta, the statement from the Texas Department of State Health Services said.
The worker reported a fever late Friday and was isolated and referred for testing. “We knew a second case could be a reality, and we’ve been preparing for this possibility,” said Dr. David Lakey, commissioner of the Texas Department of State Health Services. “We are broadening our team in Dallas and working with extreme diligence to prevent further spread.”
Alas, until Friday night, said spread was once again completely uncontained if said worker was able to interact with countless others, who will become symptomatic only after they in turn have spread the disease to an unknown number of their own friends, acquaintances and co-workers.
The statement added that people who had contact with the health care worker after symptoms emerged “will be monitored based on the nature of their interactions and the potential they were exposed to the virus.”
This announcement came hours after New York’s JFK Airport began an Ebola screening program, taking the temperatures of passengers arriving from three West African Countries.
The full statement from the Texas Department of State Health Services.
Texas Patient Tests Positive for Ebola
A health care worker at Texas Health Presbyterian Hospital who provided care for the Ebola patient hospitalized there has tested positive for Ebola in a preliminary test at the state public health laboratory in Austin. Confirmatory testing will be conducted by the Centers for Disease Control and Prevention in Atlanta.
The health care worker reported a low grade fever Friday night and was isolated and referred for testing. The preliminary ?test result was received late Saturday.
“We knew a second case could be a reality, and we’ve been preparing for this possibility,” said Dr. David Lakey, commissioner of the Texas Department of State Health Services. “We are broadening our team in Dallas and working with extreme diligence to prevent further spread.”
Health officials have interviewed the patient and are identifying any contacts or potential exposures. People who had contact with the health care worker after symptoms emerged will be monitored based on the nature of their interactions and the potential they were exposed to the virus.
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.
end
“We Have A System Failure” CDC Chief Blasted For Scapegoating Ebola ‘Protocol Breach’
Submitted by Tyler Durden on 10/13/2014 10:40 -0400
• Don’t Panic
• Kaufman
• Reuters
inShare
Do not panic. Ebola is not very contagious at all. That remains the mantra from health and political officials in America.. and as far as the nurse who was treating now-dead Dallas Ebola patient Thomas Eric Duncan, it was user error, according to CDC Director Frieden. As Reuters reports, some healthcare experts are bristling at the assertion by a top U.S. health official that a “protocol breach” caused the Dallas nurse to be infected with Ebola while caring for a dying patient, saying the case instead shows how far the nation’s hospitals are from adequately training staff to deal with the deadly virus, “you don’t scapegoat and blame when you have a disease outbreak… We have a system failure. That is what we have to correct.”
As Reuters reports,
Some healthcare experts are bristling at the assertion by a top U.S. health official that a “protocol breach” caused a Dallas nurse to be infected with Ebola while caring for a dying patient, saying the case instead shows how far the nation’s hospitals are from adequately training staff to deal with the deadly virus.
…
It was not immediately clear whether the Texas hospital prepared its staff with simulation drills before admitting Duncan, but a recent survey of nurses nationwide suggests few have been briefed on Ebola preparations. Officials at the hospital did not respond to requests for comment.
Some experts also question the CDC’s assertion that any U.S. hospital should be prepared to treat an Ebola patient as the outbreak ravaging West Africa begins to spread globally. Given the level of training required to do the job safely, U.S. health authorities should consider designating a hospital in each region as the go-to facility for Ebola, they said.
“You don’t scapegoat and blame when you have a disease outbreak,” said Bonnie Castillo, a registered nurse and a disaster relief expert at National Nurses United, which serves as both a union and a professional association for U.S. nurses. “We have a system failure. That is what we have to correct.”
…
In many cases, hospitals “post something on a bulletin board referring workers and nurses to the CDC guidelines. That is not how you drill and practice and become expert,” she said.
CDC spokesman Tom Skinner said the agency is still investigating the case of the Dallas nurse, but stressed that “meticulous adherence to protocols” is critical in handling Ebola. “One slight slip can result in someone becoming infected.”
…
“Doctors and nurses get lost in patient care. They do things that put themselves at risk because their lens is patient-driven,” Kaufman said. In Dallas, “I suspect no one was watching to make sure the people who were taking care of the patients were taking care of themselves,” he said.
…
“Towards of end of the illness, the virus is trying to live and thrive. It’s trying to get out of the person’s body. It’s producing massive amounts of fluid,” he said.
…
“Every hospital can then prevent the spread of Ebola, but not every hospital in the U.S. can admit a patient in the hospital for long-term care,” he said.
* * *
So – let’s get this straight – Ebola is a deadly disease but is not easily spread (so don’t panic) but if you are a healthcare worker a slight slip and you are done…
end
One of the reasons for the big downdraft this afternoon:
Emirates Flight Quarantined In Boston’s Logan Airport Over Ebola Scare – Live Webcast
Submitted by Tyler Durden on 10/13/2014 15:57 -0400
• Dubai
inShare1
One of the reasons why the market sold off rapidly in the last hour or so, has been news out of Boston that an Emirates flights has been quarantined at Logan Airport, where as Fox Boston reports, according to the Massachusetts Port Authority, five passengers on an a flight from Dubai were experiencing flu-like symptoms. Crews are on the ground responding to the situation. Those passengers were not in West Africa, according to the agency. FOX 25′s Crystal Haynes reports that family members at Logan Airport who have been in contact with the passengers on the flight are saying that each passenger is being evaluated one-by-one. The passengers, Haynes reports, are being told to be patient. At least one emergency responder in hazmat gear has boarded the flight.
A person has been walked off the Emirates Flight 237 plane at Logan Airport #fox25
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And finally pay attention to the following:
As we have been telling you: EBOLA is AIRBORNE
(courtesy CIDRAP /University of Minnesota/zero hedge)
CIDRAP: “We Believe There Is Scientific Evidence Ebola Has The Potential To Be Airborne”
Submitted by Tyler Durden on 10/13/2014 14:46 -0400
• ETC
• Illinois
• Middle East
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When CDC Director Tim Frieden first announced, just a week ago and very erroneously, that he was “confident we will stop Ebola in its tracks here in the United States”, he hardly anticipated facing the double humiliation of not only having the first person-to-person transmission of Ebola on US soil taking place within a week, but that said transmission would impact a supposedly protected healthcare worker. He certainly did not anticipate the violent public reaction that would result when, instead of taking blame for another epic CDC blunder, one which made many wonder if last night’s Walking Dead season premier was in fact non-fiction, he blamed health workers for “not following protocol.”
And yet, while once again casting scapegoating and blame, the CDC sternly refuses to acknowledge something others, and not just tingoil blog sites, are increasingly contemplating as a distinct possibility: namely that Ebola is, contrary to CDC “protocol”, in fact airborne. Or as, an article posted by CIDRAP defines it, “aerosolized.”
Who is CIDRAP? “The Center for Infectious Disease Research and Policy (CIDRAP; “SID-wrap”) is a global leader in addressing public health preparedness and emerging infectious disease response. Founded in 2001, CIDRAP is part of the Academic Health Center at the University of Minnesota.”
The full punchline from the CIDRAP report:
We believe there is scientific and epidemiologic evidence that Ebola virus has the potential to be transmitted via infectious aerosol particles both near and at a distance from infected patients, which means that healthcare workers should be wearing respirators, not facemasks.
In other words, airborne. And now the search for the next LAKE, i.e., a public company maker of powered air-purifying respirator (PAPR), begins.
Here is the full note: we hope the CDC will take the time to read it.
Health workers need optimal respiratory protection for Ebola
Today’s commentary was submitted to CIDRAP by the authors, who are national experts on respiratory protection and infectious disease transmission. In May they published a similar commentary on MERS-CoV. Dr Brosseau is a Professor and Dr Jones an Assistant Professor in the School of Public Health, Division of Environmental and Occupational Health Sciences, at the University of Illinois at Chicago.
Healthcare workers play a very important role in the successful containment of outbreaks of infectious diseases like Ebola. The correct type and level of personal protective equipment (PPE) ensures that healthcare workers remain healthy throughout an outbreak—and with the current rapidly expanding Ebola outbreak in West Africa, it’s imperative to favor more conservative measures.
The precautionary principle—that any action designed to reduce risk should not await scientific certainty—compels the use of respiratory protection for a pathogen like Ebola virus that has:
• No proven pre- or post-exposure treatment modalities
• A high case-fatality rate
• Unclear modes of transmission
We believe there is scientific and epidemiologic evidence that Ebola virus has the potential to be transmitted via infectious aerosol particles both near and at a distance from infected patients, which means that healthcare workers should be wearing respirators, not facemasks.1
The minimum level of protection in high-risk settings should be a respirator with an assigned protection factor greater than 10. A powered air-purifying respirator (PAPR) with a hood or helmet offers many advantages over an N95 filtering facepiece or similar respirator, being more protective, comfortable, and cost-effective in the long run.
We strongly urge the US Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO) to seek funds for the purchase and transport of PAPRs to all healthcare workers currently fighting the battle against Ebola throughout Africa—and beyond.
There has been a lot of on-line and published controversy about whether Ebola virus can be transmitted via aerosols. Most scientific and medical personnel, along with public health organizations, have been unequivocal in their statements that Ebola can be transmitted only by direct contact with virus-laden fluids2,3 and that the only modes of transmission we should be concerned with are those termed “droplet” and “contact.”
These statements are based on two lines of reasoning. The first is that no one located at a distance from an infected individual has contracted the disease, or the converse, every person infected has had (or must have had) “direct” contact with the body fluids of an infected person.
This reflects an incorrect and outmoded understanding of infectious aerosols, which has been institutionalized in policies, language, culture, and approaches to infection control. We will address this below. Briefly, however, the important points are that virus-laden bodily fluids may be aerosolized and inhaled while a person is in proximity to an infectious person and that a wide range of particle sizes can be inhaled and deposited throughout the respiratory tract.
The second line of reasoning is that respirators or other control measures for infectious aerosols cannot be recommended in developing countries because the resources, time, and/or understanding for such measures are lacking.4
Although there are some important barriers to the use of respirators, especially PAPRs, in developing countries, healthcare workers everywhere deserve and should be afforded the same best-practice types of protection, regardless of costs and resources. Every healthcare worker is a precious commodity whose well-being ensures everyone is protected.
If we are willing to offer infected US healthcare workers expensive treatments and experimental drugs free of charge when most of the world has no access to them, we wonder why we are unwilling to find the resources to provide appropriate levels of comparatively less expensive respiratory protection to every healthcare worker around the world.
How are infectious diseases transmitted via aerosols?
Medical and infection control professionals have relied for years on a paradigm for aerosol transmission of infectious diseases based on very outmoded research and an overly simplistic interpretation of the data. In the 1940s and 50s, William F. Wells and other “aerobiologists” employed now significantly out-of-date sampling methods (eg, settling plates) and very blunt analytic approaches (eg, cell culturing) to understand the movement of bacterial aerosols in healthcare and other settings. Their work, though groundbreaking at the time, provides a very incomplete picture.
Early aerobiologists were not able to measure small particles near an infectious person and thus assumed such particles existed only far from the source. They concluded that organisms capable of aerosol transmission (termed “airborne”) can only do so at around 3 feet or more from the source. Because they thought that only larger particles would be present near the source, they believed people would be exposed only via large “droplets” on their face, eyes, or nose.
Modern research, using more sensitive instruments and analytic methods, has shown that aerosols emitted from the respiratory tract contain a wide distribution of particle sizes—including many that are small enough to be inhaled.5,6 Thus, both small and large particles will be present near an infectious person.
The chance of large droplets reaching the facial mucous membranes is quite small, as the nasal openings are small and shielded by their external and internal structure. Although close contact may permit large-droplet exposure, it also maximizes the possibility of aerosol inhalation.
As noted by early aerobiologists, liquid in a spray aerosol, such as that generated during coughing or sneezing, will quickly evaporate,7 which increases the concentration of small particles in the aerosol. Because evaporation occurs in milliseconds, many of these particles are likely to be found near the infectious person.
The current paradigm also assumes that only “small” particles (less than 5 micrometers [mcm]) can be inhaled and deposited in the respiratory tract. This is not true. Particles as large as 100 mcm (and perhaps even larger) can be inhaled into the mouth and nose. Larger particles are deposited in the nasal passages, pharynx, and upper regions of the lungs, while smaller particles are more likely to deposit in the lower, alveolar regions. And for many pathogens, infection is possible regardless of the particle size or deposition site.
It’s time to abandon the old paradigm of three mutually exclusive transmission routes for a new one that considers the full range of particle sizes both near and far from a source. In addition, we need to factor in other important features of infectivity, such as the ability of a pathogen to remain viable in air at room temperature and humidity and the likelihood that systemic disease can result from deposition of infectious particles in the respiratory system or their transfer to the gastrointestinal tract.
We recommend using “aerosol transmissible” rather than the outmoded terms “droplet” or “airborne” to describe pathogens that can transmit disease via infectious particles suspended in air.
Is Ebola an aerosol-transmissible disease?
We recently published a commentary on the CIDRAP site discussing whether Middle East respiratory syndrome (MERS) could be an aerosol-transmissible disease, especially in healthcare settings. We drew comparisons with a similar and more well-studied disease, severe acute respiratory syndrome (SARS).
For Ebola and other filoviruses, however, there is much less information and research on disease transmission and survival, especially in healthcare settings.
Being at first skeptical that Ebola virus could be an aerosol-transmissible disease, we are now persuaded by a review of experimental and epidemiologic data that this might be an important feature of disease transmission, particularly in healthcare settings.
What do we know about Ebola transmission?
No one knows for certain how Ebola virus is transmitted from one person to the next. The virus has been found in the saliva, stool, breast milk, semen, and blood of infected persons.8,9 Studies of transmission in Ebola virus outbreaks have identified activities like caring for an infected person, sharing a bed, funeral activities, and contact with blood or other body fluids to be key risk factors for transmission.10-12
On the basis of epidemiologic evidence, it has been presumed that Ebola viruses are transmitted by contaminated hands in contact with the mouth or eyes or broken skin or by splashes or sprays of body fluids into these areas. Ebola viruses appear to be capable of initiating infection in a variety of human cell types,13,14 but the primary portal or portals of entry into susceptible hosts have not been identified.
Some pathogens are limited in the cell type and location they infect. Influenza, for example, is generally restricted to respiratory epithelial cells, which explains why flu is primarily a respiratory infection and is most likely aerosol transmissible. HIV infects T-helper cells in the lymphoid tissues and is primarily a bloodborne pathogen with low probability for transmission via aerosols.
Ebola virus, on the other hand, is a broader-acting and more non-specific pathogen that can impede the proper functioning of macrophages and dendritic cells—immune response cells located throughout the epithelium.15,16 Epithelial tissues are found throughout the body, including in the respiratory tract. Ebola prevents these cells from carrying out their antiviral functions but does not interfere with the initial inflammatory response, which attracts additional cells to the infection site. The latter contribute to further dissemination of the virus and similar adverse consequences far beyond the initial infection site.
The potential for transmission via inhalation of aerosols, therefore, cannot be ruled out by the observed risk factors or our knowledge of the infection process. Many body fluids, such as vomit, diarrhea, blood, and saliva, are capable of creating inhalable aerosol particles in the immediate vicinity of an infected person. Cough was identified among some cases in a 1995 outbreak in Kikwit, Democratic Republic of the Congo,11 and coughs are known to emit viruses in respirable particles.17 The act of vomiting produces an aerosol and has been implicated in airborne transmission of gastrointestinal viruses.18,19 Regarding diarrhea, even when contained by toilets, toilet flushing emits a pathogen-laden aerosol that disperses in the air.20-22
Experimental work has shown that Marburg and Ebola viruses can be isolated from sera and tissue culture medium at room temperature for up to 46 days, but at room temperature no virus was recovered from glass, metal, or plastic surfaces.23Aerosolized (1-3 mcm) Marburg, Ebola, and Reston viruses, at 50% to 55% relative humidity and 72°F, had biological decay rates of 3.04%, 3.06%. and 1.55% per minute, respectively. These rates indicate that 99% loss in aerosol infectivity would occur in 93, 104, and 162 minutes, respectively.23
In still air, 3-mcm particles can take up to an hour to settle. With air currents, these and smaller particles can be transported considerable distances before they are deposited on a surface.
There is also some experimental evidence that Ebola and other filoviruses can be transmitted by the aerosol route. Jaax et al24reported the unexpected death of two rhesus monkeys housed approximately 3 meters from monkeys infected with Ebola virus, concluding that respiratory or eye exposure to aerosols was the only possible explanation.
Zaire Ebola viruses have also been transmitted in the absence of direct contact among pigs25 and from pigs to non-human primates,26 which experienced lung involvement in infection. Persons with no known direct contact with Ebola virus disease patients or their bodily fluids have become infected.12
Direct injection and exposure via a skin break or mucous membranes are the most efficient ways for Ebola to transmit. It may be that inhalation is a less efficient route of transmission for Ebola and other filoviruses, as lung involvement has not been reported in all non-human primate studies of Ebola aerosol infectivity.27 However, the respiratory and gastrointestinal systems are not complete barriers to Ebola virus. Experimental studies have demonstrated that it is possible to infect non-human primates and other mammals with filovirus aerosols.25-27
Altogether, these epidemiologic and experimental data offer enough evidence to suggest that Ebola and other filoviruses may be opportunistic with respect to aerosol transmission.28 That is, other routes of entry may be more important and probable, but, given the right conditions, it is possible that transmission could also occur via aerosols.
Guidance from the CDC and WHO recommends the use of facemasks for healthcare workers providing routine care to patients with Ebola virus disease and respirators when aerosol-generating procedures are performed. (Interestingly, the 1998 WHO and CDC infection-control guidance for viral hemorrhagic fevers in Africa, still available on the CDC Web site, recommends the use of respirators.)
Facemasks, however, do not offer protection against inhalation of small infectious aerosols, because they lack adequate filters and do not fit tightly against the face.1 Therefore, a higher level of protection is necessary.
Which respirator to wear?
As described in our earlier CIDRAP commentary, we can use a Canadian control-banding approach to select the most appropriate respirator for exposures to Ebola in healthcare settings.29 (See this document for a detailed description of the Canadian control banding approach and the data used to select respirators in our examples below.)
The control banding method involves the following steps:
1. Identify the organism’s risk group (1 to 4). Risk group reflects the toxicity of an organism, including the degree and type of disease and whether treatments are available. Ebola is in risk group 4, the most toxic organisms, because it can cause serious human or animal disease, is easily transmitted, directly or indirectly, and currently has no effective treatments or preventive measures.
2. Identify the generation rate. The rate of aerosol generation reflects the number of particles created per time (eg, particles per second). Some processes, such as coughing, create more aerosols than others, like normal breathing. Some processes, like intubation and toilet flushing, can rapidly generate very large quantities of aerosols. The control banding approach assigns a qualitative rank ranging from low (1) to high (4) (eg, normal breathing without coughing has a rank of 1).
3. Identify the level of control. Removing contaminated air and replacing it with clean air, as accomplished with a ventilation system, is effective for lowering the overall concentration of infectious aerosol particles in a space, although it may not be effective at lowering concentration in the immediate vicinity of a source. The number of air changes per hour (ACH) reflects the rate of air removal and replacement. This is a useful variable, because it is relatively easy to measure and, for hospitals, reflects building code requirements for different types of rooms. Again, a qualitative ranking is used to reflect low (1) versus high (4) ACH. Even if the true ventilation rate is not known, the examples can be used to select an appropriate air exchange rate.
4. Identify the respirator assigned protection factor. Respirators are designated by their “class,” each of which has an assigned protection factor (APF) that reflects the degree of protection. The APF represents the outside, environmental concentration divided by the inside, facepiece concentration. An APF of 10 means that the outside concentration of a particular contaminant will be 10 times greater than that inside the respirator. If the concentration outside the respirator is very high, an assigned protection factor of 10 may not prevent the wearer from inhaling an infective dose of a highly toxic organism.
Practical examples
Two examples follow. These assume that infectious aerosols are generated only during vomiting, diarrhea, coughing, sneezing, or similar high-energy emissions such as some medical procedures. It is possible that Ebola virus may be shed as an aerosol in other manners not considered.
Caring for a patient in the early stages of disease (no bleeding, vomiting, diarrhea, coughing, sneezing, etc). In this case, the generation rate is 1. For any level of control (less than 3 to more than 12 ACH), the control banding wheel indicates a respirator protection level of 1 (APF of 10), which corresponds to an air purifying (negative pressure) half-facepiece respirator such as an N95 filtering facepiece respirator. This type of respirator requires fit testing.
Caring for a patient in the later stages of disease (bleeding, vomiting, diarrhea, etc). If we assume the highest generation rate (4) and a standard patient room (control level = 2, 3-6 ACH), a respirator with an APF of at least 50 is needed. In the United States, this would be equivalent to either a full-facepiece air-purifying (negative-pressure) respirator or a half-facepiece PAPR (positive pressure), but standards differ in other countries. Fit testing is required for these types of respirators.
The control level (room ventilation) can have a big effect on respirator selection. For the same patient housed in a negative-pressure airborne infection isolation room (6-12 ACH), a respirator with an assigned protection factor of 25 is required. This would correspond in the United States to a PAPR with a loose-fitting facepiece or with a helmet or hood. This type of respirator does not need fit testing.
Implications for protecting health workers in Africa
Healthcare workers have experienced very high rates of morbidity and mortality in the past and current Ebola virus outbreaks. A facemask, or surgical mask, offers no or very minimal protection from infectious aerosol particles. As our examples illustrate, for a risk group 4 organism like Ebola, the minimum level of protection should be an N95 filtering facepiece respirator.
This type of respirator, however, would only be appropriate only when the likelihood of aerosol exposure is very low. For healthcare workers caring for many patients in an epidemic situation, this type of respirator may not provide an adequate level of protection.
For a risk group 4 organism, any activity that has the potential for aerosolizing liquid body fluids, such as medical or disinfection procedures, should be avoided, if possible. Our risk assessment indicates that a PAPR with a full facepiece (APF = 50) or a hood or helmet (APF = 25) would be a better choice for patient care during epidemic conditions.
We recognize that PAPRs present some logistical and infection-control problems. Batteries require frequent charging (which requires a reliable source of electricity), and the entire ensemble requires careful handling and disinfection between uses. A PAPR is also more expensive to buy and maintain than other types of respirators.
On the other hand, a PAPR with a loose-fitting facepiece (hood or helmet) does not require fit testing. Wearing this type of respirator minimizes the need for other types of PPE, such as head coverings and goggles. And, most important, it is much more comfortable to wear than a negative-pressure respirator like an N95, especially in hot environments.
A recent report from a Medecins Sans Frontieres healthcare worker in Sierra Leone30 notes that healthcare workers cannot tolerate the required PPE for more than 40 minutes. Exiting the workplace every 40 minutes requires removal and disinfection or disposal (burning) of all PPE. A PAPR would allow much longer work periods, use less PPE, require fewer doffing episodes, generate less infectious waste, and be more protective. In the long run, we suspect this type of protection could also be less expensive.
Adequate protection is essential
To summarize, for the following reasons we believe that Ebola could be an opportunistic aerosol-transmissible disease requiring adequate respiratory protection:
• Patients and procedures generate aerosols, and Ebola virus remains viable in aerosols for up to 90 minutes.
• All sizes of aerosol particles are easily inhaled both near to and far from the patient.
• Crowding, limited air exchange, and close interactions with patients all contribute to the probability that healthcare workers will be exposed to high concentrations of very toxic infectious aerosols.
• Ebola targets immune response cells found in all epithelial tissues, including in the respiratory and gastrointestinal system.
• Experimental data support aerosols as a mode of disease transmission in non-human primates.
Risk level and working conditions suggest that a PAPR will be more protective, cost-effective, and comfortable than an N95 filtering facepiece respirator.
Acknowledgements
We thank Kathleen Harriman, PhD, MPH, RN, Chief, Vaccine Preventable Diseases Epidemiology Section, Immunization Branch, California Department of Public Health, and Nicole Vars McCullough, PhD, CIH, Manager, Global Technical Services, Personal Safety Division, 3M Company, for their input and review.
References
1. Oberg L, Brosseau LM. Surgical mask filter and fit performance. Am J Infect Control 2008 May;36(4):276-82 [Abstract]
2. CDC. Ebola hemorrhagic fever: transmission. 2014 Aug 13 [Full text]
3. ECDC. Outbreak of Ebola virus disease in West Africa: third update, 1 August 2014. Stockholm: ECDC 2014 Aug 1 [Full text]
4. Martin-Moreno JM, Llinas G, Hernandez JM. Is respiratory protection appropriate in the Ebola response? Lancet 2014 Sep 6;384(9946):856 [Full text]
5. Papineni RS, Rosenthal FS. The size distribution of droplets in the exhaled breath of healthy human subjects. J Aerosol Med 1997;10(2):105-16 [Abstract]
6. Chao CYH, Wan MP, Morawska L, et al. Characterization of expiration air jets and droplet size distributions immediately at the mouth opening. J Aerosol Sci 2009 Feb;40(2):122-33 [Abstract]
7. Nicas M, Nazaroff WW, Hubbard A. Toward understanding the risk of secondary airborne infection: emission of respirable pathogens. J Occup Environ Hyg 2005 Mar;2(3):143-54 [Abstract]
8. Bauchsch DG, Towner JS, Dowell SF, et al. Assessment of the risk of Ebola virus transmission from bodily fluids and fomites. J Infect Dis 2007;196:S142-7 [Full text]
9. Formenty P, Leroy EM, Epelboin A, et al. Detection of Ebola virus in oral fluid specimens during outbreaks of Ebola virus hemorrhagic fever in the Republic of Congo. Clin Infect Dis 2006 Jun;42(11):1521-6 [Full text]
10. Francesconi P, Yoti Z, Declich S, et al. Ebola hemorrhagic fever transmission and risk factors of contacts, Uganda. Emerg Infect Dis 2003 Nov;9(11):1430-7 [Full text]
11. Dowell SF, Mukunu R, Ksiazek TG, et al. Transmission of Ebola hemorrhagic fever: a study of risk factors in family members, Kikwit, Democratic Republic of Congo, 1995. J Infect Dis 1999 Feb;179:S87-91 [Full text]
12. Roels TH, Bloom AS, Buffington J, et al. Ebola hemorrhagic fever, Kikwit, Democratic Republic of the Congo, 1995: risk factors for patients without a reported exposure. J Infect Dis 1999 Feb;179:S92-7 [Full text]
13. Kuhl A, Hoffmann M, Muller MA, et al. Comparative analysis of Ebola virus glycoprotein interactions with human and bat cells. J Infect Dis 2011 Nov;204:S840-9 [Full text]
14. Hunt CL, Lennemann NJ, Maury W. Filovirus entry: a novelty in the viral fusion world. Viruses 2012 Feb;4(2):258-75 [Full text]
15. Bray M, Geisbert TW. Ebola virus: the role of macrophages and dendritic cells in the pathogenesis of Ebola hemorrhagic fever. Int J Biochem Cell Biol 2005 Aug;37(8):1560-6 [Full text]
16. Mohamadzadeh M, Chen L, Schmaljohn AL. How Ebola and Marburg viruses battle the immune system. Nat Rev Immunol 2007 Jul;7(7):556-67 [Abstract]
17. Lindsley WG, Blachere FM, Thewlis RE, et al. Measurements of airborne influenza virus in aerosol particles from human coughs. PLoS One 2010 Nov 30;5(11):e15100 [Full text]
18. Caul EO. Small round structured viruses: airborne transmission and hospital control. Lancet 1994 May 21;343(8908):1240-2 [Full text]
19. Chadwick PR, Walker M, Rees AE. Airborne transmission of a small round structured virus. Lancet 1994 Jan 15;343(8890):171 [Full text]
20. Best EL, Snadoe JA, Wilcox MH. Potential for aerosolization of Clostridium difficile after flushing toilets: the role of toilet lids in reducing environmental contamination. J Hosp Infect 2012 Jan;80(1):1-5 [Full text]
21. Gerba CP, Wallis C, Melnick JL. Microbiological hazards of household toilets: droplet production and the fate of residual organisms. Appl Microbiol 1975 Aug;30(2):229-37 [Full text]
22. Barker J, Jones MV. The potential spread of infection caused by aerosol contamination of surfaces after flushing a domestic toilet. J Appl Microbiol 2005;99(2):339-47 [Full text]
23. Piercy TJ, Smither SJ, Steward JA, et al. The survival of filoviruses in liquids, on solid substrates and in a dynamic aerosol. J Appl Microbiol 2010 Nov;109(5):1531-9 [Full text]
24. Jaax N, Jahrling P, Geisbert T, et al. Transmission of Ebola virus (Zaire strain) to uninfected control monkeys in a biocontainment laboratory. Lancet 1995 Dec 23-30;346(8991-2):1669-71 [Abstract]
25. Kobinger GP, Leung A, Neufeld J, et al. Replication, pathogenicity, shedding and transmission of Zaire ebolavirus in pigs. J Infect Dis 2011 Jul 15;204(2):200-8 [Full text]
26. Weingartl HM, Embury-Hyatt C, Nfon C, et al. Transmission of Ebola virus from pigs to non-human primates. Sci Rep 2012;2:811 [Full text]
27. Reed DS, Lackemeyer MG, Garza NL, et al. Aerosol exposure to Zaire Ebolavirus in three nonhuman primate species: differences in disease course and clinical pathology. Microb Infect 2011 Oct;13(11):930-6 [Abstract]
28. Roy CJ, Milton DK. Airborne transmission of communicable infection—the elusive pathway. N Engl J Med 2004 Apr;350(17):1710-2 [Preview]
29. Canadian Standards Association. Selection, use and care of respirators. CAN/CSA Z94.4-11
30. Wolz A. Face to face with Ebola—an emergency care center in Sierra Leone. (Perspective) N Engl J Med 2014 Aug 27 [Full text]
And now for your major data points today:
Portuguese 10 yr bond yield: 2.94 down 1 in basis points from Friday night.
(Portugal imploding)
Your closing Portuguese 10 year bond yield Monday night: up 8 in basis points on the day
Portuguese 10 year bond yield: 3.04%
Your closing Japanese yield Monday up 1 in basis points from
Friday night:
yield .51%
Japanese 10 year bond yield: .51%
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: .51%
end
Your opening currency crosses for Monday morning:
EUR/USA: 1.2678 up .0054
USA/JAPAN YEN 107.29 down .27
GBP/USA 1.6083 up .0010
USA/CAN 1.1206 up .0016
This morning the Euro is up , trading now above the 1.26 level at 1.2678 as Europe continues to face deflation. The yen is up a lot and It closed in Japan rising by 27 basis points at 107.29 yen to the dollar . The pound is up from Friday as it now trades just below the 1.61 level to 1.6083. The Canadian dollar is down this morning with its cross at 1.1206 to the USA dollar.
Early Monday morning USA 10 year bond yield: 2.28% !!! down 1 in basis points from Friday night/ (USA economy not doing so well with this low yield) wow!!
USA dollar Index early Monday morning: 85.52 down 39 cents from Friday’s close
end
The NIKKEI: Monday morning: holiday
Trading from Europe and Asia:
1. Europe all in the red
2/ Asian bourses mixed / Chinese bourses: Hang Sang in the red, Shanghai in the green, Australia in the green: /Nikkei (Japan) holiday/India’s Sensex in the red
Gold early morning trading: $1227.00
silver:$ 17.40
end
Your closing Spanish 10 year government bond Monday/ down 2 in basis points in yield from Friday night.
Spanish 10 year bond yield: 2.08% !!!!!!
Your Monday closing Italian 10 year bond yield up 1 in basis points and trading 25 in basis points above Spain./
Italian 10 year bond yield; 2.33%
end
IMPORTANT CLOSES FOR TODAY
Closing currency crosses for Monday night/USA dollar index/USA 10 yr bond: Europe falling apart this afternoon
Euro/USA: 1.2754 up .0130 (huge move)
USA/Japan: 106.79 down .870 (huge move)
Great Britain/USA: 1.6081 up 0.0007
USA/Canada: 1.1193 down .0002
The euro rose sharply in value during this afternoon’s session, and it was
up hugely on the day , closing well above the 1.27 level to 1.2754. The yen was up strongly during the afternoon session,and it gained 87 basis points on the day closing just above the 106 cross at 106.79. The British pound gained some ground during the afternoon session and it was up for the day as it closed at 1.6081
. The Canadian dollar was well up during the afternoon session, and it was up on the day closing at 1.1193.
Your closing USA dollar index:
85.19 down 71 cents on the day
your 10 year USA bond yield, a fall of 1 basis points: 2.28%!!!!
European and Dow Jones stock index closes: closed before NY slaughter)
England FTSE up 26.27 or 0.41%
Paris CAC up 4.99 or 0.12%
German Dax up 23.62 or 0.27%
Spain’s Ibex 35 up 36.80 or 0.36%
Italian FTSE-MIB down 61.89 or 0.32%
The Dow: down 223.03 or 1.35%
Nasdaq; down 62.58 or 1.46%
OIl: WTI 85.05
Brent: 88.14
end
And now for your big USA stories
Today’s NY trading:
Manic-Buying Turns To Panic-Selling As ‘Illiquid’ Stocks Plunge To 5-Month Lows
Submitted by Tyler Durden on 10/13/2014 16:01 -0400
• Across the Curve
• Bond
• China
• Copper
• Japan
• NASDAQ
• Reality
• SPY
inShare2
Just as we warned, liquidity was incomprehensibly low today (below normal pre-market levels during the peak of the trading day) and the intraday whipsaws were meteoric as a closed cash bond market enabled the slightest twitch in USDJPY to send S&P algos into conniptions. Biotech crashed. Trannies were ripped ridiculously higher at the open – then collapsed into correction (-11% from highs); US Airlines have fallen for 6 straight days, crashing 17% (with today’s 7% plunge – driven by chatter over airborne Ebola – its biggest in over years). Tresury futures implied a notable drop in yields across the curve (10Y -7bps at 2.21%, 30Y 2.97%, and 5Y 1.45%). The USdollar closed -0.33% led by EUR and JPY strength (but AUD surged 1% extending gains after China data). Gold ($1234), Silver, and copper all gained on the day as WTI fell once again (despite some intraday strength in the middle of the day). Stocks “flash-crashed” on very heavy volume in the last 30 mins with VIX breaking above 24 (highest in 16 months). All major equity indices are now below their 200DMA with the worst 3-day loss since late 2011.
Liquidity was simply not there – but but but HFTs?
Which meant – just as we warned – epic whipsaws in stocks…
As USDJPY tested down towards 107…
and Tresasuries led stocks lower all day…
Leaving all the major indices red on the day (even after Russell tried to stage a big comeback)… just look at Trannies at the open!! (that’s not a fat finger!!!)
A look at futures trading shows the magical levitation overnight giving way to reality in the US session…
Year-to-date, Dow joins Russell in the red, Nasdaq getting close…
VIX punched above 24…
Airlines index crushed…
Bonds may have been closed but futures implied some big yield drops on the day…
Credit was closed today but just as a quick context for where stocks might end up…
FX markets were also thin but notable moves in AUD and SEK as the USD weakened again… the moves were dominated by the overnight China data
Commodsities rallied (on safety and weaker dollar) but WTI fell once again… (even after a modest rally intraday)
Charts: Bloomberg
Bonus Chart: Remember what happened the last time Japan raised taxes…
end
Here are some stories on me on the closing of my site:
from Bill Murphy
“Then there was the commotion over the weekend over Google shutting down our friend Harvey Organ’s blog … by “court order.” Have no idea what that is all about. We’ll have to wait to hear more on it from Harvey. Meanwhile…”
From Nicholas (from Lagos):
“One of my first actions in the early hours of every morning when the blogs (like MIDAS) become available as the USA markets close, is to review Harvey Organ’s daily blog to ascertain whether there has been much change to the silver open interest, since this could be one of the really big stories as the year draws to a close. Jesse has confirmed that this blog has been deleted by court order, just as COMEX once again reduces margins. There are never coincidences in the precious metals markets. Thankfully there are just too commentators now following the GATA line of thinking, so perhaps you will be spared this kind of intervention.”
Regards
Nicholas
*Russia
Bill,
You said it might get crazy. This is pretty crazy. Organ says he needs legal help. What if the conspiring part is real? Government may have a right to set price controls on all assets, but does it have a right to conspire with third parties to instigate profits through material misstatements, and does it have a right to nullify constitutional liberties of individual citizens without due process?
/gold-and-precious-metals/2014/10/latest-upda
te-from-harvey-organ-sunday-10-12-14-2614024.html
end
Let us close with this important interview of Jim Rickards by Greg Hunter
(courtesy Greg Hunter/USAWatchdog)
Greg Hunter’s USAWatchdog.com (Early Sunday Release)
Best-selling author and financial expert James Rickards contends a big financial crash is locked in. Rickards says, “Everyone is waiting for some blunder down the road, and the point I try to make is the blunders have already been made. The blunders have already been built into the system. You can see this collapse coming a mile away. . . . Using science, we can’t say very much about the timing, but we can say a lot about the magnitude. This will be the greatest financial collapse in history. I am quite sure about that, but I am not sure about the timing. . . . People think I can call them up at 3 o’clock in the afternoon and tell them tomorrow’s that day, sell your stocks and buy some gold. I can’t do that. I don’t know what day it will be. If we get to that point, it would be too late to act. So, the time to act is now.” Rickards goes on to say, “On top of the threats from Ebola, the Islamic State, the normal currency wars and the normal depression the world is in, there is financial war going on right now. We put sanctions on Russia. Do you think Russia is going to sit there and take it? Russia is responding asymmetrically through cyber warfare.”
Rickards says in the coming crash, it is going to be very difficult to turn your assets into spendable cash. Rickards explains, “People think everything is money. People think your stocks are money because you can sell them and get the cash in your account in a couple of days. People think your money market funds are money because you can call your broker and get the cash in your bank account tomorrow. You think your house is money because you can take a second mortgage or sell your house. What you find out in a panic is all those things are not money. You are locked in, locked down and the only thing that is money is money. That would be cash, if you happen to have it or gold or silver in physical form, not paper gold. So, people don’t understand what money really is until everyone wants their money back. That’s when you find out only a small number of things are actually money.”
On the Islamic State or caliphate, Rickards says, “There is nothing new about this. Islam has been establishing caliphates since the seventh century A.D. This is just the latest in a long string; it’s part of their plan for global domination. Their theology is you convert to Islam . . . or they behead you. They kill you. What they are doing is according to their scripts. None of it comes as a surprise. What is a surprise is how unprepared the United States was for the emergence of something like the Islamic State and the weakness of our response.” Can things like beheadings in America take down the markets? Rickards says, “That’s kind of street violence, and that by itself will terrorize people, but that won’t take down the markets. What would take down the markets is some type of bomb or radiological device and other kinds of asymmetric warfare on a large scale. That’s probably coming. The other thing is disruption to the flow of oil. The United States does not get its oil from the Middle East . . . but it’s a world market and a world price. . . . If the Islamic State spreads and disrupts the flow of oil . . . that would have an enormous impact upon markets. You’ve seen the price of oil drop like a stone lately because the world is in depression and there are deflationary fears, but that could turn around on a geopolitical vector.”
When asked if a crash was a mathematical certainty, Rickards said, “It is a mathematical certainty, but I can take it further . . . what you don’t hear is this will be exponentially larger than any financial panic in the past. . . . The next time, the Fed is going to be in trouble. They are already insolvent on a mark-to-market basis. Each bailout gets much bigger than the one before. The Fed has a 10 foot seawall, and they are going to get hit with a 50 foot tsunami.”
Join Greg Hunter as he goes One-on-One with best-selling author of “The Death of Money,”James Rickards.
Video Link
http://usawatchdog.com/you-can-see-this-collapse-coming-a-mile-away-james-rickards/
-END-
Well that is all for today. We are getting close to the end game
And I again would like to extend my sincere gratitude to Jon of Silver doctors and J.B. for hosting my site until my new site is ready.
bye
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=6024
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