Ladies & Gentlemen, Harvey Organ’s 10-16-14 Update
Oct 16.2014:
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: 1240.50 down $3.60
Silver: 17.39 down 2 cents
In the access market 8 pm:
Gold 1239.00
silver 17.39
The gold comex today had only 1 notice filed, and thus ends the streak of 6 straight days of zero notices served upon, which is totally unusual for an active month. There are a little less than 5 tonnes of gold standing.
In silver, the open interest continues to remain high at 169,281 contracts.
To boot, the December silver OI remains extremely high at 118,697. The confirmed volume yesterday was extremely high at over 70,000 contracts and yet no additional OI was added.
Sorry for being so late but my computer was down for the entire day.
Let’s head immediately to see the data has in store for us today.
First: GOFO rates/
All months basically moved slightly in both directions with the various GOF) months. On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates
London good delivery bars are still quite scarce.
Oct 16 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
+.07% +.08% +.09% +.112% + .1725%
Oct 15 .2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
+.065% +.0775% +.09% +.11 +.180%
end
Let us now head over to the comex and assess trading over there today,
Here are today’s comex results:
The total gold comex open interest surprisingly rose by a huge margin of 5,016 contracts from 397,855 up to 402,871 with gold up $10.50 yesterday. We are now in the active delivery month of October and generally this is a very poor month for deliveries. The October contract month actually fell by 20 contracts down to 967. We had 0 notices filed yesterday so we lost another 20 contracts or 2,000 additional oz will not stand for the October contract month. No doubt that these guys were cash settled. The November contract month saw its OI rise by 43 contracts up to 356. The December contract rose by 5073 contracts up to 290,954. The estimated volume today was fair at 171,781 contracts. The confirmed volume yesterday was excellent at 273,135. Strangely after 6 consecutive day of 0 gold notices filed, we finally had a positive filing but it was only 1 notice. We have had 4 out of 10 filing days with positive readings with the first two days having 98.7% of the entire total number of notices filed so far. They must have a great difficulty finding gold to serve upon our notices. That fact that London is also very close to backwardation kind of confirms this.
The total silver Comex OI fell by a tiny 48 contracts despite the fact that silver was up yesterday to the tune of 6 cents. It seems that the shorts are reticent to supply for silver contracts and they are starting to cover for fear of major entities taking delivery. Tonight the silver OI complex rests at 169,281 contracts. In ounces, this represents 847 million oz or 121.00% of silver annual production (annual production of 700 million oz ex China). In commodity law generally the OI is represented by 3 to 5% of annual production. These silver contracts are in very strong hands and as I have indicated to you on countless occasions, this will continue to bring nightmares to our bankers. Probably this is as good a reason as ever for the bankers to raid on a continual basis trying to force those longs to puke their interests.
We are in the non active silver contract of October and here the OI rose by 5 contracts up to 188 contracts. We had 10 notices served upon yesterday so we gained 15 contract or an additional 75,000 ounces will stand for delivery in October. November is also a non active delivery month and here the OI remained constant at 123 contracts.
The December silver contract is a biggy contract month and tonight it slightly fell to 118,697 contracts for a loss of 359 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 594 million oz or 84.9% of annual global production (ex China). The estimated volume today was fair at 34,771. The confirmed volume yesterday was huge at 70,164 contracts and yet no OI gain for the entire complex!!!!. 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 16.2014
Gold
Ounces
Withdrawals from Dealers Inventory in oz nil
Withdrawals from Customer Inventory in oz 102.85 oz : 1 (Scotia)
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz nil
No of oz served (contracts) today 1 contracts( 100 oz)
No of oz to be served (notices) 967 contracts (96,700 oz)
Total monthly oz gold served (contracts) so far this month 484 contracts (48,400 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
542,437.96 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 Scotia: 102.85 oz
total customer withdrawals: 102.85 oz
we had 0 customer deposit:
total customer deposit: nil oz
We had 0 adjustment:
Total Dealer inventory: 945,591.06 oz 29.41 tonnes
Total gold inventory (dealer and customer) = 9.009 million oz. (280.65) tonnes)
A few weeks ago we had total gold inventory of 303 tonnes, so during this short time period 23 tonnes have been transferred out. We will be watching this closely!
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 1 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices stopped by JPMorgan customer account.
We had 1 notices served upon our longs for 100 oz of gold. In order to calculate what will be standing for delivery in September, I take the number of contracts served so far this month at 484 x 100 oz = 48,400 oz,to which I add the difference between the open interest for the front month of October(967) minus the number of notices served upon today (1) x 100 oz = 145,000 oz or 4.50 tonnes.
We lost 2000 oz of gold standing tonight.
Thus: October standings:
484 contracts x 100 oz = 48,300 oz + (967 ) – (1)x 100 = 145,000 oz or 4.50 tonnes
end
Oct 16/2014:
October silver: Initial standings
Silver Ounces
Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 1,102,428.06
(Scotia/Delaware)oz
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory nil
No of oz served (contracts) 14 contracts (70,000 oz)
No of oz to be served (notices) 174 contracts (870,000 oz)
Total monthly oz silver served (contracts) 577 contracts (2,885,000 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 3,558,740.5 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 2 customer withdrawals:
i) Out of Scotia: 1,102,428.06 oz
ii) Out of Delaware: 1916.910
total customer withdrawal 1,102,428.06 oz
We had 0 customer deposit:
total customer deposits: nil oz
we had 1 adjustment:
i) Out of the Brinks vault:
10,291.620 oz was removed from the dealer and this landed into the customer account at Brinks
Total dealer inventory: 66.512 million oz
Total of all silver inventory (dealer and customer) 181,435 million oz.
The CME reported that we had 14 notices filed for 70,000 oz today. To calculate what will stand for this active delivery month of October, I take the number of contracts served for the entire month at 577 x 5,000 oz per contract or 2,885,000 ounces upon which I add the difference between the open interest for the front month of October (188) – the number of notices served upon today (14) x 5000 oz per contract
Thus Oct. standings for silver: 577 notices x 5,000 oz per notice or 2,885,000 oz + (188) – (14) x 5,000 oz = 3,755,000 oz
we gained an additional 75,000 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 16.2015: GLD gained back 1.79 tonnes of gold/inventory 760.93 tonnes
Oct 15.2014 GLD lost back the gold it gained yesterday to the tune of 2.09 tonnes/Inventory back to 759.14 tonnes
Oct 14. GLD inventory/stays the same at 761.23 tonnes
Oct 13.2014: this is good/it is quite possible that the gold has finally hit empty (due to gold near backwardation)
GLD 761.23 tonnes up 1.79 tonnes today.
Oct 10.2014: we lost 2.64 tonnes of gold from the GLD and this gold will head to Shanghai/inventory 759.44 tonnes
Oct 8.2014: we lost 5.39 tonnes of gold today and this gold will be heading to the friendly confines of Shanghai, China /New inventory 762.08 tonnes
oct 7.2014: as of 6 pm est, no change in gold inventory/767.47 tonnes
oct 6.2014: as of 6 pm est no change in inventory/767.47 tonnes
Oct 3.2014: as of 5 pm est no change in inventory/767.47 tonnes
Oct 2.2014: we lost another 1.19 tonnes of gold inventory heading towards Shanghai. (inventory 767.47 tonnes)
Oct 1.2014: we lost another 1.20 tonnes of gold inventory heading towards Shanghai. (inventory: 768.66 tonnes)
sept 30.2014: we lost another 2.39 tonnes of gold inventory heading towards Shanghai. (inventory 769.86 tonnes)
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 gained back 1.79 tonnes of gold inventory at GLD
inventory: 760.93 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: 760.93 tonnes.
end
And now for silver:
Oct 16.2014: no change in silver inventory/344.565 million oz
Oct 15.2014 no change in silver inventory/344.565 million oz
Oct 14.2014 today we had a loss of 1.201 million oz/SLV inventory rests at 344.565 million oz
Oct 13.2014: no change in silver inventory so far:
345.766 million oz
oct 10.2014: we lost a massive 3.25 million oz of silver leaving the SLV. Inventory 345.766 million oz
Oct.8/2014 no change in silver inventory 349.071 million oz
Oct 7.2014: a reduction of silver inventory to the tune of 863,000 oz/new inventory at SLV 349.071 million oz
Oct 6.2014: no change in inventory/349.934 million oz.
Oct 3.2014/ we had a minor loss of 152,000 oz and this is usually to pay for fees./Inventory 349.934
oct 2.2014: no change in silver inventory/350.086 million oz.
Oct 1 late last night at 11 pm I was notified by Fred that they added a remarkably high 4.075 million oz of silver inventory at the SLV.
new inventory: 350.086 million oz.
sept 30.2104: no change in inventory/inventory 346.011 million oz
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 16.2014
Inventory tonight no change in inventory rests/silver inventory at 344.565 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now deeply into the positive to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 7.5% percent to NAV in usa funds and Negative 7.6% to NAV for Cdn funds
Percentage of fund in gold 61.60%
Percentage of fund in silver:38.80%
cash .6%
.( Oct 15/2014)
2. Sprott silver fund (PSLV): Premium to NAV rises to positive 4.24% NAV (Oct 15/2014) will pick up later
3. Sprott gold fund (PHYS): premium to NAV rises to negative -0.37% to NAV(Oct 15/2014) will pick up later.
Note: Sprott silver trust back hugely into positive territory at 4.24%.
Sprott physical gold trust is back in negative territory at -0.37%
Central fund of Canada’s is still in jail.
end
Oct 16.2014
Now your more important physical stories today:
Important read….
(courtesy Mark O’Byrne)
end
An extremely important article from Ambrose Evans Pritchard on how the collapsing price of Brent crude will having devastating effects on the budgets on major countries.
a must read…
(courtesy Ambrose Evans Pritchard)
Ambrose Evans-Pritchard: World economy so damaged it may need permanent QE
Submitted by cpowell on Wed, 2014-10-15 21:41. Section: Daily Dispatches
By Ambrose Evans-Pritchard
The Telegraph, London
Wednesday, October 15, 2014
http://www.telegraph.co.uk/finance/economics/11165982/World-economy-so-d…
Combined tightening by the United States and China has done its worst. Global liquidity is evaporating.
What looked liked a gentle tap on the brakes by the two monetary superpowers has proved too much for a fragile world economy, still locked in “secular stagnation.” The latest investor survey by Bank of America shows that fund managers no longer believe that the European Central Bank will step into the breach with quantitative easing of its own, at least on a worthwhile scale.
Markets are suddenly prey to the disturbing thought that the 5 1/2-year expansion since the Lehman crisis may already be over, before Europe has regained its prior level of output. That is the chief reason why the price of Brent crude has crashed by 25 percent since June. It is why yields on 10-year US Treasuries have fallen to 1.96 percent, and why German Bunds are pricing in perma-slump at historic lows of 0.81 percent this week.
We will find out soon whether or not this a replay of 1937 when the authorities drained stimulus too early, and set off the second leg of the Great Depression.
If this growth scare presages the end of the cycle, the consequences will be hideous for France, Italy, Spain, Holland, Portugal, Greece, Bulgaria, and others already in deflation, or close to it. The higher their debt ratios, the worse the damage.
Forward-looking credit swaps already suggest that the US Federal Reserve will not be able to raise interest rates next year, or the year after, or ever, one might say. It is starting to look as if the withdrawal of $85 billion of bond purchases each month is already tantamount to a normal cycle of rate rises, enough in itself to trigger a downturn.
Put another way, it is possible that the world economy is so damaged that it needs permanent QE just to keep the show on the road.
Traders are taking bets on capitulation by the Fed as it tries to find new excuses to delay rate rises, this time by talking down the dollar. “Talk of ‘QE4′ and renewed bond buying is doing the rounds,” said Kit Juckes from Societe Generale.
Gentle declines in the price of oil are typically benign, a shot in the arm for companies and consumers alike. The rule of thumb is that each $10 drop in the price adds 0.3 percent to GDP growth over the next year.
Crashes are another story. They signal global stress, doubly dangerous today because the whole industrial world is one shock away from a deflation trap, a psychological threshold where we batten down the hatches and wait for cheaper prices. That is the Ninth Circle of Hell in economics. Lasciate ogni speranza.
The world is also more stretched. Morgan Stanley calculates that gross global leverage has risen from $105 trillion to $150 trillion since 2007. Debt has risen to 275 percent of GDP in the rich world, and to 175 percent in emerging markets. Both are up 20 percentage points since 2007, and both are historic records. The Bank for International Settlements warns that the world is on a hair trigger. The slightest loss of liquidity can have “violent” effects.
Saudi Arabia has clearly shifted strategy, aiming to force high-cost producers out of business across the globe rather than defend OPEC cartel prices by slashing its own output to offset rises in Libyan supply. Bank of America thinks the Saudis are targeting $85 a barrel, partly to squeeze three enemies, Iran, Russia, and the Caliphate.
If crude prices stay low for long, almost all the major oil producers will have to start dipping into their foreign reserves to fund their welfare states and military apparatus. The “fiscal break-even” price needed to cover the budget is $130 for Iran, $115 for Algeria and Bahrain, $105 for Iraq, Russia, and Nigeria, and almost $100 even for Abu Dhabi. The Saudis themselves are probably well above $90 by now.
This means that they will have to sell holdings of foreign bonds, assets, and gold to plug the gap. Russia has run through $7 billion in recent days defending the rouble. The scale of this could be huge, and it comes at a time when China has stopped accumulating reserves for its own reasons, taking away the biggest global source of fresh purchases.
Nor does the chain reaction stop there. Lower prices chill the US shale industry, which has lifted US (liquids) output from 7 million barrels a day (b/d) to 11.6 million since 2008 and turned America into the world’s biggest producer. Bank of America says the pain starts at around $75 for the most costly fields. “Shale oil output is very sensitive to price conditions,” it said.
The US Energy Department says oil and gas companies have been amassing huge debts drilling for marginal output in ever more hostile regions. Net debt rose $106 billion in the year to March, on top of $73 billion of asset sales. Yet revenues were stagnating even when crude prices were above $100. The fossil fuel nexus has spent $5 trillion since 2008, and much of this is at risk. It has in itself become a systemic threat.
Yet the oil crash is not merely a supply story. “There has been a rapid collapse of demand,” said Edwin Morse from Citigroup. The International Energy Agency says demand fell by 50,000 b/d in France, and 45,000 b/d in Italy in August, below earlier estimates. China’s oil demand is no longer rising by half a million b/d each year. It has slowed to a quarter a million.
The global slowdown has caught the global authorities off-guard, as it always does. Above all, it has confounded the central banking fraternity. In thrall to “creditism,” it insists that QE works by forcing down interest rates across the maturity curve. Ergo, Fed tapering does not matter so long as rates stay low. By the same logic, ECB policy is “accommodative” because rates have collapsed, a claim that would have Milton Friedman turning in his grave.
Monetarists say this is a cardinal error, bound to cause serial mishaps. Indeed, Robert Hetzel from the Richmond Fed blames the Lehman crisis and all that followed on monetary overkill in early to mid-2008, arguing in his book “The Great Recession” that the Fed ignored the warning signs that M2 money was buckling.
We forget that the Venetian Grain Board regulated commerce over the centuries by altering the quantity of money, not interest rates. So did the Bank of England in the 18th century, injecting liquidity when Easterly winds brought ships into London. The Bank continued to target the quantity of money in the early 20th century when QE was known as open market operations. Quantity was Friedman’s lodestar in his great opus.
Quantity is not doing very well. The Center for Financial Stability in New York says “Divisia M4″ — its measure of broad money growth — has fallen to 2.5 percent from around 6 percent in early 2013. The US economy can perhaps handle some loss of dollar liquidity. The world as a whole cannot. There are $11 trillion of cross-border loans outstanding, and two thirds are still in US dollars. Emerging-market companies have borrowed a further $2 trillion in dollars since 2008.
China is no longer tightening, but it is not loosening much either. It is actively steering down the growth rate of M2 money even though house prices have been falling for five months, industrial output has stalled, and factory gate inflation has dropped to minus 1.8 percent. President Xi Jinping seems resolved to break China’s credit bubble early in his 10-year term, come what may. This will not be pretty. Standard Charted says debt has reached 250 percent of GDP, off the charts for a developing economy.
Property curbs have been lifted. The central bank has injected small bursts of liquidity into the banking system. But this time China has not let rip with credit from the state banking system to keep the game going. “We cannot rely again on increasing liquidity to stimulate economic growth,” Premier Li said last month.
He is targeting jobs, not growth, willing to deflate the economy and purge excess capacity in the steel and shipbuilding industries as long as unemployment does not rise much above 5 percent. This may be the right course for China, but it is an unpleasant shock for those across the globe who feed the dragon for a living.
China will eventually blink if the slowdown deepens, and so will the Fed in Washington. First the markets will have to learn the hard way that they have mispriced the reality of a broken global economy.
end
Scary stuff tonight from Bill Holter
(courtesy Bill Holter/Miles Franklin)
Fire, Water…and the “4 G’s”
I have thought about writing this type of piece many times before but have only touched on the subject several times. I had decided in the past not to venture forth because I was afraid that what I wrote might be perceived incorrectly and turn readers off to my main message of protecting themselves financially. What I am about to write assumes we will have at least a short period of time where life goes back if not 150 years, but maybe to “caveman days”.
Before really getting started, ask yourself if you believe it is even possible for an event, or events (plural) could possibly send us back in time where one must be self sufficient just to sustain life? Is it possible for the global fiat money system to collapse? Is it possible to have a widespread banking and financial system closure? Is it possible for a war, any war to pass the Rubicon and go nuclear? Is it possible for some type of pandemic (Ebola?) to become widespread which shuts the system down and people to within their homes? Is any of it even possible? In my opinion any or all scenarios are possible, the fiat money and financial system breakdowns are even highly probable in my opinion. If you don’t believe this then what follows is a waste of your time …until maybe it’s not?
Assuming a few weeks or few months where “nothing works” as it once did, what can you do now to prepare yourself? There are several areas, each with its own subsets and choices. I will ask a few questions and hopefully if you have not prepared for anything yet, you get cracking. If you have prepared then hopefully at least one light bulb goes on where you say to yourself “I had not thought of that”. First, you have only so much money you can use to prepare with so you do whatever you can. Secondly, if you live in a city or densely populated area, in my opinion you shouldn’t. Remember, you can only do the best you can do and if/when things pass there is no sense in beating yourself up for something forgotten.
To begin with, fire and water are life’s necessities, the “4G’s” (God, Grub, Guns, and Gold) will all have variable importance to your survival depending who and where you are. The two most important things to mankind sustaining himself are “fire and water”. If workers are not getting paid (or fearful of a pandemic) to man and maintain a clean water supply will they go to work? What will you do for clean water? If you live near a river or other water supply then great …but it’s probably not drinkable. You can also put trashcans under your downspouts …this is probably also not drinkable. Have you done anything to aid in purifying water? Do you have Clorox? A filtration system such as a Steri pen or even something as simple as purchasing Life straws? Nothing can live without water, this should be your number one concern, a filtration system should be a top concern.
Do you plan to boil water? What will be your source of heat? LP gas? How many tanks? Wood? Have you ordered a cord or two? How will start a fire? Do you have massive amounts of newspaper or kindling to get it started? Do you even have disposable lighters or matches? What will you use for light at night? The fireplace? Candles? Do you have enough to last a couple of months? Had you thought about buying a dozen or so of the solar driveway lights and instead of prettying up your driveway, you won’t smack your knee on the coffee table after dark?
What about food? How will you cook what you have? Have you stored anything …at all? Have you stocked up in the different categories such as bulk, protein, vegetables and fruits etc.? How long and what are the expiration dates? How long after the expiration dates is it safe to eat? Have you stored your grains so that bugs will not infiltrate? I personally found that “parboiled rice” stores much longer and does not attract bugs like other rice …(it also tastes better). Do you have oil to cook with? In my opinion, if you want to build a storage it should be done with dry products, canned products and topped off with dehydrated products that will last up to 25 years. (Once you get the basics taken care of, don’t forget some “fun food”. How great would some M+M’s, potato chips, raisins or even cookies taste after not having any for 2 months or more?) Remember, you will need water for much of this. If you want to cook rice, pasta, dehydrated packages or even MRE’s, you will need WATER and preferably FIRE to sterilize and allow for warm food. I could write an entire book on this subject but YOU need to research and decide what is best for your family. What is right for me, my next door neighbor or anyone else may not be the solution for you. You may have a special diet, low sodium or even an allergy. Some people are allergic to peanuts (I am), peanut butter is great for protein intake but not if it affects you negatively. You need to try to think of everything in the food category, not just what will fill your bellies but for nutrition and the ability to actually prepare it.
What about household goods? What if you have an ant or insect problem? How will you get rid of your waste from food? Maybe a little bit of gasoline will help you burn it? Plastic bags? What about “your” waste? How will you dispose of it? Have thought about what it would be like to “squat in the woods? Two pieces of rope between two trees tied to a saddle “girth” to lean back on might be handy huh? What about your medical products? Can you purchase some of your meds. ahead? If your insurance company won’t let you buy more than 2 months ahead …can you purchase some from Canada or elsewhere to give you a buffer? What about over the counter products? Do you have any cold or flu medicine? Aspirin or pain killers? What about something simple like Rolaids or even diarrhea medicine? Toothpaste or soap? An extra couple of razor blades, shampoo and don’t forget the toilet paper? I mentioned disposable lighters earlier, you would need these but here is a valid question …what would a .99 cent lighter be worth to someone who didn’t have one? Would it maybe be worth a bicycle or something similar?
Speaking of transportation, what will you use if gasoline could not be procured? A horse? How will you feed him? A bicycle? What if it gets a flat? Could you repair it or do you even have a pump to pump it up if it becomes low? Speaking of a horse, do you have a cat or some dogs? What will they eat? Table scraps of rice and beans? What will they drink for water? So you live near a river and will get water from there and travel on your bike …can you protect yourself and your bucket of water?
Protection, this is a whole ‘nother topic. Do you have any arms? More ammo than just one clip or two? Can you shoot and actually hit your target? When was the last time you practiced? Do you live in a state where it is legal to carry concealed? Do you have a license in case you were stopped (if the police are actually working) while carrying? How about a shotgun for close quarters at home? Do you only have buckshot or did you remember to buy some birdshot for a squirrel or juicy white wing dove? How about a pellet gun for a rabbit or something similar? Have you ever cleaned and cooked an animal before or might it be a good idea to buy a book or print something from online now so at least you have an idea what to eat and what not to?
I have written extensively regarding “money” itself. Do you have a little bit of “cash cash” which might spend for a short time period for something your neighbor has a surplus of? How about silver? Did you buy 100 ounce bars? 10 ouncers? or did you buy rounds or junk which will be “spendable”? Have you spoken to any local farmers and asked them if they will accept silver now? Will they? Do you even know any local farmers? How about your serious capital? Have you taken anything “out of the system” so if a financial collapse or even a major “hack attack” wiped out your balances, will you have anything left?
Another area I am sure some will roll their eyes at is “religion”. Do you have any spiritual relationship with whoever your God is? Should you? Is it something you believe is worthy now? Or when things look darker than midnight will you come around to it? What about your physical shape? Can you walk 10 miles packing supplies? Have you exercised or tried to keep yourself in good shape given your age?
I have only scratched the surface here and I am sure I will hear from those who say what about batteries or radios or whatever. Yes! That is exactly the point of me writing this …THINK! Think for yourself. Think now about what you might need. If I am wrong and we “live happily ever after” you can ride your bike, eat your food, have some fun target practicing and make your driveway the envy of your neighbors after dark! And…you will be purchasing any and all items most probably “2%” (sarcasm) cheaper than you can get them a year from now!
Maybe I am wrong, I don’t think so. In my opinion, the odds of some sort of major league “Black Swan” have increased greatly over the last couple of years and are approaching certainty. Do I know what it will be? Do I know when it will arrive? Do I know how severe or long lasting affects it will have? No, of course not, but I do know that “something” (many things) just ain’t right. I know the population is now more unprepared than anytime in my lifetime to be self sustainable. The will isn’t there, the ability is fleeting and the knowledge is almost gone. No one will “prepare” anything for you, only you can “think” and then “act” for yourself. Please do not fall into the trap I hear all the time …”they” will never let it happen”. “They” have put us in the situation we now find ourselves and unfortunately it is my opinion “they” will kick the table over and then “blame” it on something “out of their control”. The system is big, too big, and there is nothing anyone as an individual can do about it. The ONLY thing you can do is be as ready as you can for when the table does get kicked over. I hope this piece was helpful and even if just one person takes heed, it was well worth my time to write it. Regards, Bill Holter.
Early Thursday morning trading from Europe/Asia
1. Stocks mostly down on Asian bourses with the higher yen values to 105.89
2 Nikkei down 335 points or 2.22%
3. Europe stocks down/Euro up USA dollar index up at 85.25. Chinese bourse Shanghai up as the yuan slightly strengthens in value to 6.12322 per usa dollar/yuan.
3b Japan 10 year yield at .48%/Japanese yen vs usa cross now at 105.89/
3c Nikkei now below 15,000
3d Japan now says it will not do QE/yen rises/futures implode
3e European data awful, Europe stocks implode along with German collapsing industrial production/entire banking system needs 875 billion to recapitilize/where is it going to get the money???
3f/ negative German ZEW (negative German confidence)
3gOil: WTI 80.44 !!!! and Brent: 83.15!!
3h/ Gold down/yen up; yen below 106 to the dollar/
3i Greek bonds blowing out of the water/signifies trouble
3j Abenomics looks like it is finished!
3k Gold at $1243.00 dollars/ Silver: $17.46
4. USA 10 yr treasury bond at 2.05% early this morning.
5. Details Ransquawk/Bloomberg/Deutche bank/Jim Reid
(courtesy zero hedge)
Everything Breaks Again:
Futures Tumble; Peripheral
Yields Soar, Greek Bonds
Crater
Submitted by Tyler Durden on 10/16/2014 06:28 -0400
•
Yesterday afternoon’s “recovery” has come and gone, because just like that, in a matter of minutes, stuff just broke once again courtsy of a USDJPY which has been a one way liquidation street since hitting 106.30 just before Europe open to 105.6 as of this writing:
• U.S. 10-YEAR TREASURY YIELD DROPS 15 BASIS POINTS TO 1.99%
• S&P FUTURES PLUNGE 23PTS, OR 1.2%, AS EU STOCKS DROP 2.54%
This comes after futures actually were briefly green for the session earlier in the morning. The catalyst this time, however, is not some US fund liquidating or repositioning or new Ebola pandemic news, but all Europe:
• GERMAN 10-YEAR BUND YIELD DROPS TO RECORD LOW 0.715%
Only this time Europe is once again broken with periphery yields exploding, after Spain earlier failed to sell the maximum target of €3.5 billion in bonds, instead unloading only €3.2 billion, and leading to this:
• PORTUGAL 10-YR BONDS EXTEND DROP; YIELD CLIMBS 30 BPS TO 3.58%
• IRISH 10-YEAR BONDS EXTEND DECLINE; YIELD RISES 20 BPS TO 1.90%
• SPANISH 10-YEAR BONDS EXTEND DROP; YIELD JUMPS 29 BPS TO 2.40%
And the punchline, as usual, is Greece, whose 10 Year is now wider by over 1% on the session(!), to just about 9%.
One-handed golf clap to all those who used other people’s money to buy those Greek 5 Year bonds a few months ago.
In short, Europe is a sea of red, only unlike before when the bid for safety was peripheral bonds, this time the puking is also sending the periphery crashing, something we last saw just before Draghi’s “whatever it takes” speech, which means that the market has finally called the ECB’s bluff and demands that after 2 years of jawboning, that the ECB actually put the printer where its mouth is. Good luck with that.
Let’s not forget that oil is also still sliding and we have yet to see some major macro fund liquidate as a result of commodity margin calls. The wait will hardly be too long at this point.
Oh, and we forgot to mention that today Dallas well announce State of Disaster (aka martial law lite) and activate an emergency plan over its third Ebola case. So all those BTFD, best of luck to you too.
Bulletin Headline Summary
• European equities only see short-lived relief at the open as Greek market rot spreads to the Eurozone core, pushing German 10yr yields to – yet again – record lows.
• Greek markets continue to sell-off on speculation that Greece’s early bailout exit will be less than smooth. The market turmoil also results in Spain failing to sell their targeted EUR 3.5bln in a longer-dated Bono auction
• Focus turns to the slew of Fed speakers today, primarily Yellen at 1745BST/1145CDT, and earnings from Goldman Sachs, Google and Philip Morris
• Treasury rally continues, 10Y trading below 2% while 30Y yield lowest since Dec. 2012 amid concern over global growth and possible economic impact of Ebola.
• Investors are worried that five years since the world limped out of recession, central banks have virtually exhausted their stimulus arsenals if inflation and activity keep fading
• A second Texas nurse infected with Ebola alerted U.S. health officials to her elevated temperature before flying from Cleveland to Dallas on a commercial airline
• Lawmakers and health specialists say reversals and missteps mar the Obama administration’s handling of the outbreak — and fueled calls for the resignation of CDC chief Thomas Frieden, who testifies today in Congress
• As airpower has failed to dislodge Islamic State fighters from the Syrian border town of Kobani or halt their offensive in Iraq, Obama’s appeals for strategic patience are being challenged by some U.S. military and intelligence officers and diplomats who say more needs to be done
• It’s futile for the U.S. and its allies to “blackmail” Russia over the Ukraine crisis, Putin said in a newspaper interview; also accused Obama of adopting a “hostile” approach in naming Russia as a threat to the world
• The ECB agreed yesterday on two acts that officially establish its covered-bond program and lay out how it will be implemented, according to two euro-area officials, who asked not to be identified because the discussions aren’t public
• Hong Kong Chief Executive Leung Chun-ying said his government is ready to meet student leaders next week to discuss the city’s first leadership election as he seeks to end three weeks of pro-democracy protests
• EU peripheral yields surge, with Greek 10Y over 8.00%. Asian stocks fall, Nikkei -2.2%, Shanghai -0.7%. European stocks, U.S. equity-index futures fall. Brent crude falls to four-year low; copper falls, gold little changed
POMO
• 11:00am: Fed to purchase $150m-$250m in 2024-2031 sector
FIXED INCOME
After yesterday’s sell-off in US equities abated ahead of the Wall Street close, European equities opened on firmer footing – albeit this was very short-lived. Greek woes swirled further, as the Greek 10yr yield jumped above 8.5% for the first time in 8 months on continued speculation that Greece’s early IMF bailout exit will be less-than smooth. The resulting market turmoil in Greece rubbed off on today’s Spanish bond auction, as the Spanish Treasury failed to sell their targeted EUR 3.5bln in 2024 and 2028 debt. The SP/GE 10yr government bond yield has widened in response, wider by 22bps today as the Spanish 10yr yield climbs above 2.3%.
The Euribor curve continues to bear-flatten after the ECB confirmed they are yet to make a decision on Greece’s collateral requirements at the ECB, despite discussing doing so as earlier reports suggested the ECB could accept poorer quality collateral in order to access liquidity.
EQUITIES
Greek equities have fallen sharply, dragging both Italian and Spanish stocks with it, as a number of Italian banks are stopped out of trade – limit down. Furthermore, lacklustre corporate earnings updates from Nestle and Roche as well as AbbVie turning against Shire dropped blue-chip stocks across the continent.
Corporate earnings updates today include Goldman Sachs, Google, Philip Morris International and Schlumberger all due today.
FX
A resumed decline in industrial metals (Chinese iron ore futures fell 4% overnight) has knocked commodity-based currencies, with CAD, AUD and NZD all underperforming. EUR/USD saw some mild upside after Eurozone Core CPI was revised higher to 0.8% vs. Exp. 0.7%, allowing the pair to reclaim the 1.2800 level ahead of the US crossover. Alongside the downside in European equity futures, the JPY has benefited further, gaining no solace from comments out of BoJ’s Kuroda overnight – who reiterated the Bank of Japan will continue with QQE until their price target is reached.
COMMODITIES
WTI and Brent crude futures again trade softer, with WTI crude briefly breaking below USD 80/bbl. Energy prices failed to find support in positive Chinese data, which overnight showed Foreign Direct Investment rising 1.9% vs. Exp. -14.0%. Furthermore, Yesterday’s API inventories showed a significant build of 10200K vs. Prev. 5100K. The Kuwaiti Oil Co. additionally appeared unphased by the recent slide in oil, as the CEO reaffirmed that the Co. are to raise production further.
* * *
Jim Reid’s dramatic summary concludes the overnight recap
Where do we start this morning? Its tempting to get back under the duvet after a 24 hours like the last one, especially as after a year of renovations, my central heating is still not working properly. Anyway I grew up in a house without central heating so I’m made of sterner stuff. As a starter I think its fair to say that after the US opened yesterday it was not wise to be long Greek government bonds and short US Treasuries. In 10 years the former rose 82bps on the day and the latter fell an incredible 34bps at the lows. It was the worst day for Greek Government bonds since July 23rd 2012 (more on this later) and had the US intra-day move stuck, it would have been the biggest yield move on a % basis relative to the starting yield in history.
However it didn’t stick and the story of the day for US treasuries was one of a sharp post retail sales rally, then a flash rally, then a flash crash and then a slow but steady sell-off. At 7am NY time 10 years were sitting calmly at around 2.20% before rallying hard to 2.05% by 9am (post weak retail sales) and then 2% at 9.34am. At 9:38am though they hit 1.86%!!! They then reversed back to around 2.04% 15 minutes later before selling off to 2.14% at the close (currently lower this morning at 2.08%). A wild trip that suggests a large liquidation, capitulation or huge technical trading level breached. In markets that have a lower structural liquidity than pre-crisis these things can happen but something big in positioning must have happened yesterday.
With all this going on one wonders what probabilities you’d get that the Fed actually does QE again before it raises rates. I’m sure if you’d have suggested this a month ago many would have thought that there was more chance of Elvis being found living a relaxing retirement on the moon. As a minimum markets have now priced out a 2015 rate hike from the Fed which seems a sensible response. Our US rate strategist Dominic Konstam hosted a call last night and in it he suggested that a minimum pre-condition for stability was for the Fed to validate the re-pricing of the interest rate curve. Or in other words if they stick close to the message of the dots then to paraphrase Dominic it would be a disaster for risk assets. So we perhaps need to hear more dovish comments from the Fed along the lines of Fischer’s remarks at the IMF over the weekend and others like Williams back on Tuesday.
The other (and bigger) problem is clearly in Europe. Before we get to Greece the further collapse in 5yr5yr breakevens suggest a market running out of confidence in the ECB’s ability to be able to do enough to arrest deflation. In the pdf today we show the history of this. Before mid-August we had only fleetingly traded below 2% in the 10 year history we have. It did manage to go back above 2% again in early September but since September 9th we’ve been back below 2% with the move accelerating over the last week. We closed at around 1.75% yesterday having hit 1.70% intra-day. This is a key gauge that Draghi looks at although he did downplay it a little in the last ECB meeting. However whichever variable he looks at this morning its fair to say that he will see a market that is not confident the ECB can deliver anywhere near enough to turn things around.
More days like yesterday will surely produce a policy response soon though. If it were to prompt a fiscal break through in Europe then the market would really like that.
Onto Greece and markets struggled yesterday on the back of ongoing political issues in the country. The Athex closed down -6.3%, its worst day since 29th October 2012, although at one point it was down more than 10%, making it the biggest intra-day drop in six years. At the same time Greek 10Y debt closed the day 82bps wider, its biggest one day widening since 23rd July 2012. Greek assets have been struggling recently as its current embattled government has looked ever more likely to collapse before their official mandate expires in 2016, even as the Prime Minister Antonio Samaras has decided Greece will end its IMF bailout programme in December, 15 months early. The anti-bailout Syriza party has seen its polling lead grow ever larger over the current dominant governing party, New Democracy. The latest poll, conducted between October 9-13 by GPO, put Syriza in a 6.5% lead over New Democracy. A general election will take place if the governing parties New Democracy and Pasok fail to secure 180 votes in parliament – the minimum needed to elect a new head of state in February as the incumbent is set to retire. The Greek PM told the Cabinet yesterday that he still expects elections in 2016 as scheduled and remains committed to his current reform programme. Almost irrespective of the final outcome of current political worries it seems they could well remain unresolved well into Q1 next year with the February vote on Greece’s new head of state the most obvious catalyst for change on the horizon.
Moving on to other parts of the European market it was also a historic day to some degree. The 10yr German Bund and French OAT yields fell around 7-8bps to fresh lows of 0.75% and 1.13%, respectively. European equities endured a difficult day with the Stoxx600, DAX, CAC, IBEX, and FTSEMIB down -3.2%, -2.9%, -3.6%, -3.6% and -4.4%, respectively. It was the 7th consecutive down day for the Stoxx600 and it was also the biggest loss for Italian markets since February 2013. On the other side of the Atlantic, the official close of S&P 500 (-0.81%) also failed to tell the whole picture. The index saw a 2.9% peak-totrough intraday move yesterday which at one point actually erased all of its YTD gains. The VIX index closed at a near 29-month high of 26.25 (crossed 31 during intraday). Interestingly Energy (+0.43%) stocks posted modest gains despite the further drift lower in oil prices. Brent fell 1.5% to test the lows of US$83/bbl into the close and there seems to be little good news going on for the commodity right now. US Financials (-2.0%) were the biggest drag to the market in what was the worst day for US bank stocks in nearly 2 years as low rates raised fears of margin concerns.
Indeed there wasn’t much good news anywhere for markets yesterday. Ebola concerns are also gaining more media focus in the US after second nurse Amber Joy Vinson was tested positive for Ebola in Dallas after nursing a Liberian patient. This raised renewed concerns about the protocols for containing the outbreak and has prompted US officials to call for more aggressive monitoring of incidents where the virus could potentially spread. Data flow failed to offer much relief either. The Fed’s Beige Book reported modest-to-moderate growth conditions but the NY Fed survey fell by 21.3pts in October (second biggest monthly fall in recorded history) whilst Retail sales print were also disappointing (-0.3% mom v -0.1% expected). PPI was also softer than expected which is broadly in line with the trend of prices we are seeing globally.
Asian markets are not surprisingly following the weaker lead from US yesterday. Chinese equities are the only major equity markets trading firmer on the day probably helped by data showing that aggregate credit growth rose to a 3 month high in September. Power consumption in China rose 2.7% yoy in September, which although is an improvement from the negative 1.5% print in August, it is still the second worst reading in the last 18 months. Away from China, bourses in Tokyo, Sydney, Seoul and Hong Kong are down -2.2%, -0.4%, -0.3% and -0.5%, respectively as we go to print. The Nikkei is now at around a 6-month low. The Dollar is weaker against key currencies. Asian credit spreads drifted wider given the broader risk off tone. Bank of China’s US$6.5bn AT1 printed overnight and is now quoted higher at 100.40/100.65 after having dipped below par at the open.
Looking at the data docket ahead we have initial jobless claims, industrial production, NAHB housing market index, and the Philly Fed in the US. Data will still be important but with the current disconnect between what’s priced in and the Fed’s dot plot, we will be increasingly sensitive to any Fed communication in the weeks and months to come. The next key event will be the 2 day FOMC meeting concluding on the 29 October (no press conference scheduled) but well ahead of that we have four Fed speakers today. Fed’s Plosser (1pm UKT) will speak on the economic outlook and will take questions from reporters. Fed’s Lockhart (2pm UKT) will speak on workforce development at a university conference co-sponsored by the Atlanta and Kansas Fed. Kocherlakota’s speech today is “Clarifying the Objectives of Monetary Policy” (3pm UKT) and finally Fed’s Bullard (5.45pm UKT) will speak on US demographics (Q&A available). After all this the focus will be on Yellen as she speaks to a Boston Fed conference on “Inequality of Economic Opportunity” tomorrow so stay tuned for that.
Let’s see what the next 24 hours brings!!
end
The following is extremely important as 8 European countries are already facing deflation and Germany will simply not allow QE to enter the Euro ranks:
(courtesy zero hedge)
8 European Countries In Outright Deflation As Inflation Expectations Crash To Record Low
Submitted by Tyler Durden on 10/16/2014 08:16 -0400
• European Union
• France
• Germany
• Italy
inShare13
Forward inflation expectations for Europe have collapsed to all-time record lows (based on 5Y forward implied 5Y inflation) as the market grows increasingly impatient at Draghi’s dragging his “whatever it takes” feet on pulling the sovereign QE trigger.
With 8 European nations now in outright deflation, the growing political pressure on the ECB to actually “do” something is, however, equal and opposite to Germany’s (read Buba’s) insistence that member states have some fiscal discipline (oh and the fact that OMT may just be exactly what we always said it was – illegal and a mirage).
With France shunning Brussels laws directly, and Italy flouting the “hookers-and-blow” GDP adjustment to improve its debt-to-gdp ratios, is it any wonder that Germany sticks to its anti-hyperinflationary, fiscally responsible guns… But then again, as we have seen again and again with the failed European Union, beggars can be choosers as politicians are unwilling to give up their perks in favor of helping the people that voted for them (or didn’t in some cases).
end
As we pointed out to you yesterday, the falling oil prices could very well push Venezuela over the cliff:
(courtesy zero hedge)
Falling Oil Prices Could Push Venezuela Over The Edge
Submitted by Tyler Durden on 10/16/2014 14:00 -0400
• Bond
• Capital Markets
• default
• Kuwait
• Market Share
• OPEC
• PDVSA
• Rating Agency
• Saudi Arabia
• Ukraine
• Wall Street Journal
inShare
“There is nothing good to say about the state of Venezuela’s economy, and this isn’t helping,” warns Danske’s Lars Christensen as tumbling prices for Venezuela’s oil are threatening to choke off funds (oil is 95% of exports) needed to pay debt.. and that is clear from the collapse of bond prices. The Maduro government desperately needs a rise in oil prices, but Saudi Arabia has so far rebuffed calls for an emergency meeting as it pursues a strategy of waiting out higher cost competitors.OPEC does not plan on meeting until Nov. 27. That is an eternity for a country that is beginning to unravel.
Submitted by Nick Cunningham via OilPrice.com,
Oil prices continue to slide, putting enormous pressure on oil producers around the world.
Saudi Arabia has insisted it is willing to live with lower prices for quite a while as it seeks to maintain a grip on its market share. Kuwait also indicated its willingness to slash prices in order to keep output level. That sent oil prices lower on Oct. 14, as the markets reacted with a bit of surprise to the unwavering stance by OPEC’s leading members: WTI dropped 4.5 percent.
Lower oil prices are putting a strain on all producers, including Saudi Arabia, but Riyadh is hoping that the economic pain will be much greater for some of its competitors. That includes U.S. shale producers, which have higher average production costs.
In fact, an estimated 2.8 percent of total worldwide oil production could become unprofitable if oil prices drop below $80 per barrel, according to a new report from the IEA. Canadian oil sands projects topped the list, but U.S. shale might not be far behind.
But while Saudi Arabia tests the mettle of North American producers, it could be Venezuela that is the most vulnerable. As a fellow OPEC member, Venezuela has been the most vocal about the need to cut oil production and has called for an emergency meeting of the 12-member oil cartel. That is because Venezuela is in a much weaker position than many of the other member countries, and the recent drop in prices has raised alarm in Caracas.
Using state-owned oil company PDVSA as a piggy bank has allowed the Venezuelan government to increase social spending over the last decade, a key political objective of the late President Hugo Chavez and his successor, Nicolas Maduro. However, using oil revenues for a wide array of spending priorities has also starved PDVSA of money needed for investment in order to boost oil production, let alone keeping output level. Since 2000, Venezuela has seen its oil output drop from 3.5 million barrels per day (bpd) down to 2.5 million bpd.
The bad news for President Maduro is that there was major unrest earlier this year even when oil prices were above $100 per barrel. That is because oil makes up 97 percent of Venezuela’s foreign earnings, and the country needs oil prices of around $120 per barrel for its bloated budget to break even.
Venezuela is in an economic crisis. Annual inflation is estimated to be in excess of 60 percent. The country’s economy actually shrank at a rate of 5 percent in the first six months of 2014. Shortages of food, medicine, shampoo, diapers, and other basics are so common that the government rolled out a plan this past summer to fingerprint people at grocery stores.
Crime is so rampant in the capital that people are afraid to go out at night. For those who can afford it, leaving the country has become the best option.
The government is heavily indebted, and Venezuela’s bonds are now competing with Ukraine’s for the mantle ofthe world’s riskiest. With bond yields surpassing 16 percent, Venezuela cannot keep up. There is a 50-50 chance of default within the next two years, according to credit rating agency Standard & Poor’s.
The sudden 20 percent decline in oil prices since June is compounding the problem and has the potential to throw the country into crisis. “Venezuela’s oil prices have been high for several years now, and the country is still struggling to pay its debt at those prices,” Russ Dallen of Caracas Capital Markets told The Wall Street Journal. Lower oil prices could bring things to a head.
The Maduro government desperately needs a rise in oil prices, but Saudi Arabia has so far rebuffed calls for an emergency meeting as it pursues a strategy of waiting out higher cost competitors. OPEC does not plan on meeting until Nov. 27. That is an eternity for a country that is beginning to unravel.
end
It is now Mr Putin against McDonalds:
Mapping The Battle Of The Bulge: Russia’s War Against McDonalds
Submitted by Tyler Durden on 10/16/2014 19:45 -0400
• Czech
• France
• McDonalds
• Vladimir Putin
inShare
Since Russia first began rattling its retaliatory anti-Western-fast-food sabre at McDonalds in April, things have escalated. It started in Crimea, spread to Moscow, and now as Yopolis notes, has spread across much of Russia as more and more McDonalds stores are shuttered by Russia’s Food Safety Commission(Rospotrebnadzorom)…
The Map of Hostilities – all the closed McDonalds in Russia…
July 28th. There is information about the checks Rosselkhoznadzor. Experts interested in the quality of the cheese, which is still possible to deliver from the Czech Republic and France.
August 6th. Vladimir Putin signed a decree banning the import of products and raw materials from Europe, the United States and other countries that have imposed sanctions against Russia.
On 20 August. “McDonald’s” unexpectedly closes three Moscow restaurant – on Manezh Square, on Prospekt Mira and Malaya Bronnaya street. Company forced to suspend their activities because of the claims Rospotrebnadzora that found numerous violations in the work of institutions. A few days later a restaurant on Manezh Square will be closed for 90 days, the decision of the court of Tver.
Court suspends the very first McDonald’s in Russia – Pushkin Square.
On 27 August. 85 days closes McDonalds in Yekaterinburg. The next day, suspend work two places in Sochi and one – in Serpukhov.
On 29 August. banned 12 restaurants across Russia, among them – three in Moscow and two in the suburbs.
September 1st. “McDonald’s” makes a statement that eliminate irregularities in three popular restaurants in Moscow. Despite this, the court does not allow them to open ahead of schedule. Around the same time, it appears that the company has filed eight lawsuits in the Pension Fund. The fact that officials refuse to accept the quarterly reports of the “McDonald’s”, and because of this, the staff could not shape their future retirement.
It turns out that the CPS checks quarter of 440 restaurants, “McDonald’s” in Russia. According to the service, their actions are planned and not related to politics.
September 4th. Closes second restaurant network in Yekaterinburg.
September 9 receives information about the penalties for suburban McDonald’s – in total they have to pay 500 thousand rubles.
“McDonald’s” refuses to salads “Vegetable” and “Caesar” because of the ban on the importation of products from the EU. Company “Belaya Dacha”, collaborating with restaurants since 1994, promised to find new channels of supply of raw materials, but in Moscow, salads and have not appeared.
On the website of the Russian “McDonalds” appears statement “planned modernization” restaurants.
September 12th. McDonalds on “Tretyakov” cordoned off by police.
September 16th. CPS finds a breach in the restaurant Novosibirsk.
On 17 September. “McDonald’s” increasingly resists. She sued the Government of St. Petersburg with a request to annul the decision of the arbitral tribunal. However, according to local Rospotrebnadzora, the service has not conducted inspections in St. Petersburg.
On 29 September. Temporarily closes the only McDonald’s in the Komi Republic. Guide denies Rospotrebnadzora explains closing “technical Rearrangement.”
On 8 October. PROSECUTOR starts checking the charity fund “Ronald McDonald House”, which helps sick children. In all honesty, organizations questioned the deputy from the “Just Russia” Andrei cool.
October 10th. third McDonalds in Volgograd closed for two months. Total in the region, there are five restaurants of the chain. The first closed in September, the second stopped working after a month. The reason is the same: the violation of sanitary norms and E. coli. After complaining of the court permits the work to one of the restaurants, but without the right to sell food and drinks. Places fined 100 and 150 thousand rubles.
On the same day the company’s representatives say they won the case in Veliky Novgorod. The court did not prohibit the restaurant to sell their products, as requested in Roskomnadzor.
In one of the McDonald’s Voronezh find E. coli. Allowable rate of bacteria in cucumbers exceeded 1.6 times. Restaurant fined 50 thousand rubles. Another McDonald’s closes at center of Nizhny Novgorod.
October 13th. Court in Moscow satisfies the claim Rospotrebnadzora to “McDonald’s” in 100 thousand rubles. In the production and reverse actions are – the company wants to make a claim for it to be unfounded.
October 14th. One of the restaurants of the Krasnodar Territory is sentenced to a fine of 300 thousand rubles. “McDonald’s” again disagrees with the decision of the court and provides a counter-suit.
With each passing day the story gets more and more strange. On Monday, the Moscow Arbitration Court fined the restaurant at ENEA 100 thousand rubles for the illegal sale of toys in the “Happy Meal.”
Source: Yopolis
* * *
We are sure this is not helping MCD sales as they suffer the longest streak of losing quarters on record
end
And now for your update on the Ebola pandemic:
(courtesy zero hedge)
2nd Ebola Patient’s Akron, Ohio Family Home Cordoned Off
Submitted by Tyler Durden on 10/15/2014 19:59 -0400
• Ohio
inShare
Having now identified the 2nd health care worker infected with Ebola as Amber Joy Vinson, and discovered she (against CDC advice) traveled across the nation to her family home in Tallmadge (near Akron, Ohio), we now find out that, as WKYC reports, police have cordoned off the home of her mother and are allowing only limited access to the residential development.
As Cleveland.com reports,
Dallas nurse Amber Joy Vinson spent last weekend in Tallmadge, an Akron suburb, before testing positive for the Ebola virus.
Summit County Public Health officials are still trying to determine who Vinson may have seen and where she went while she was visiting family. A family member has already self-quarantined himself in a Tallmadge home following Vinson’s positive test.
Interviews to determine Vinson’s whereabouts are expected to take time,said Summit County Public Health Medical Director Margo Erme, and people will be interviewed twice to determine whether or not they were in contact with Vinson.
“We have been in there all day to see if there are additional contacts and to see where those additional contacts may be, and also the nature of those contacts,”Erme said.
Quarantine needs will be determined on an individual basis, Erme said.
Health officials learned the Vinson had been in the county at around 10 a.m. Wednesday.
And now as WKYC reports,
Police have taped off a home in Tallmadge they believe belongs to the mother of Ebola patient Amber Vinson.
The home is on Stonegate Trail, in the Stonegate Reserve housing development.
At one point, about seven police cars were outside the home and later, that number went down to three.
Police are only allowing limited access to the development for residents.
end
WHO Shocked At 427 Ebola-Infected Healthcare Workers As Cases Top 9000, Deaths Exceed 4500
Submitted by Tyler Durden on 10/16/2014 09:47 -0400
• France
• Germany
• Newspaper
• Reuters
inShare10
If trained professionals (in West Africa and the US) are becoming infected by the deadly Ebola virus, what hope is there for fellow passengers in a tightly-packed metal tube? The World Health Organization expects Ebola cases to top 9000 this week and deaths to exceed 4500 as they shockingly note 427 healthcare workers are now infected. The economic impact of Ebola continues to rise as Liberia slashes its GDP estimate and East African nations discuss strategies to stop the spread from the West. In Europe, Germany is sending aid, the Spanish nurse is stable but Madrid airport activated emergency measures due to a suspected Ebola passenger. US screening restrictions increase as Yale New Haven Hospital is dealing with a patient with Ebole-like symptoms. Politicians begin debating travel bans as Dallas is expected to approve a “state of disaster” today. Contained?
First the shocking news:
• *EBOLA CASES TO EXCEED 9,000 IN W. AFRIA THIS WEEK, WHO SAYS
• *EBOLA DEATHS TO EXCEED 4,500 IN W. AFRICA THIS WEEK, WHO SAYS
• *427 HEALTH-CARE WORKERS INFECTED WITH EBOLA, WHO’S NUTTALL SAYS
Across Europe…
Officials claim the Spanish Ebola nurse is ‘stable’ and 68 low-risk people are being monitored (via Bloomberg)
Of 68 “low-risk” people being monitored for ebola infection in Spain, one developed low fever this morning, Fernando Simon, coordinator of the center of alerts and emergencies at Spain’s health ministry, says in news conference
• Person has fever above 37.7 degrees: Simon
• 15 “high-risk” contacts are still all asymptomatic: Simon
• Ebola patient Teresa Romero is stable; viral levels are falling, still not negative: Simon
But Madrid airport activated emergency measures… (via Reuters)
Madrid’s Barajas international airport activated emergency measures on Thursday after a passenger arriving on an Air France flight was suspected of possibly having Ebola, a spokeswoman for airports operator Aena said.
Spain’s health ministry confirmed that an Ebola emergency protocol had been set in motion but declined to give details.
Aena and Air France said in separate statements that a passenger on Air France 1300 from Lagos via Paris had started shaking during the flight. Air France said the other passengers disembarked from the plane, which will now be disinfected. The return flight has been cancelled.
And Germany is sending aid… (via Bloomberg)
Funding boost to raise German emergency aid against Ebola to EU102m ($130m), Christian Democratic Union lawmaker Nobert Barthle says in e-mailed statement.
• Funding approved by German lower-house budget committee yday
• Germany also contributing EU700m in long-term aid for African health systems: Barthle
In Africa…
Liberia cuts its GDP estimate… (via FrontPageAfrica)
Economic “growth is expected to be zero percent in 2015,” due to Ebola, contraction in mining activity, agriculture, services, Finance Minister Amara Konneh says in interview with online edition of Monrovia-based newspaper.
Disease “seriously affected economic activities and livelihoods throughout the country with domestic food production, mining activities, hospitality industry, and transport services all declining.”
And East African nations are in full panic mode…
“We have already seen an impact on our economies, regarding reduced tourism flows, flight cancellations,” Kenyan President Uhuru Kenyatta says at conference in Rwandan capital, Kigali.
• East African Community is being “proactive to avoid the spread of the virus to EAC countries”
• 5-nation bloc also looking for ways to help affected countries
• EAC includes Kenya, Uganda, Tanzania, Rwanda and Burundi
The US continues to see ‘potential’ cases arrive… (via WTNH)
A patient is being evaluated at Yale New Haven Hospital at this hour with Ebola-like symptoms, according to a statement from the hospital.
A physicians document obtained by News 8 says, “On Wednesday evening Yale-New Haven Hospital admitted a patient who met the threshold to be monitored for Ebola virus disease(DVD). The Hospital is working with the CDC and Prevention and the State Department of Public Heath to have the patient tested for EVD.”
News 8 Medical Reporter Jocelyn Maminta has talked to a credible source with the hospital who says the patient is one of the Yale Researchers who just returned from a trip to Liberia on Monday. This is one of the same researchers officials decided not to have quarantined after their trip to Africa.
And politicians are pushing for travel bans and visa restrictions…
And Dallas County commissioners are expected to announce a “State of Disaster” today
* * *
Some context…
end
You can kiss the airline goodbye:
(courtesy zero hedge)
The Ebola Effect Arrives: Half Of Americans Will Avoid International Air Travel Out Of Ebola Fears
Submitted by Tyler Durden on 10/16/2014 17:34 -0400
• NBC
• None
• Ohio
• Reuters
inShare
Remember when Obama said “Putin was isolated”, despite the Russian having the explicit support of the BRIC nations, and thus at least half of the world’s population? Well, as irony would always have it with this particular US president, the tables have promptly turned, and paradoxically where ISIS failed to “terrorize” Americans into a state of paralyzed daze, the West African virus has succeeded in isolating none other than America, and as a brand new Reuters poll reveals, nearly half of Americans are so concerned about the Ebola outbreak that they are avoiding international air travel!
In other words, global trade, commerce and simply transit, already declining thanks to the global depression rematerializing now that the Fed’s latest placebo round has worn off, are about to slam into a brick wall.
The poll results come as health officials said the second nurse infected at Texas Health Presbyterian Hospital in Dallas had flown from Ohio to Texas with a slight fever the day before she was diagnosed.
The Reuters/Ipsos poll, which surveyed 1,577 Americans 18 or older online, found nearly 80 percent were concerned about the Ebola outbreak, with 41 percent saying they were “very concerned” and 36 percent “somewhat concerned.”
And while the one thing that is certain to provoke an even greater popular panic at the invisible terror, is at least one more Ebola case developing on US soil, the whistleblowing admission by another nurse at Texas Health Presbyterian will hardly boost America’s confidence in the way the Ebola crisis is being handled.
NBC Chicago reports that a Dallas nurse who cared for a co-worker who contracted the Ebola virus at Texas Health Presbyterian Hospital said the facility was unprepared to fight the disease and she would “do anything” to avoid being treated there if she were ever to fall ill with the potentially deadly virus.
“I can no longer defend my hospital,” Briana Aguirre said Thursday on NBC’s “Today” show.
Aguirre claims that before Thomas Eric Duncan arrived at Texas Health Presbyterian nursing staff had not been trained in how to treat an Ebola patient beyond being offered an “optional seminar.”
Aguirre did not treat Duncan, who died on Oct. 8. But she said that co-workers told her thathe was put in an area with up to seven other patients and it took three hours before the hospital first contacted the Centers for Disease Control and Prevention. She called the situation a “chaotic scene.”
“Our infectious disease department was contacted to ask, what is our protocol. And their answer was, we don’t know. We’re going to have to call you back,” she said.
“We never talked about Ebola and we probably should have,” Aguirre said, adding that staff was “never told what to look for.”
Well, at least Obama will be kind enough to tell the thousands of reservists he just announced he will be mobiziling by executive order and sending to west Africa precisely what it is they should look for: a virus. One which they should preferably shoot on site.
end
And now for your major data points today:
Portuguese 10 yr bond yield: 3.26 par in basis points from Wednesday night.
(Portugal imploding)
Your closing Portuguese 10 year bond yield Thursday night: another rise of 19 in basis points on the day
Portuguese 10 year bond yield: 3.48%
Your closing Japanese yield Thursday down 1 in basis points from
Friday night:
yield .48%
Japanese 10 year bond yield: .48%
And now for your closing Japanese 10 year bond yield / ip 1 in basis points from the morning: ( Japanese markets imploding)
Japanese 10 year bond yield: .49%
end
Your opening currency crosses for Thursday morning:
EUR/USA: 1.2738 down .0086
USA/JAPAN YEN 105.89 down .300
GBP/USA 1.5984 down .0017
USA/CAN 1.1345 up .0081 !!!
This morning the Euro is down , trading now just above the 1.27 level at 1.2738 as Europe reacts to deflation and crumbles on the various European exchanges. The yen is up a lot and It closed in Japan rising by 30 basis points at 105.89 yen to the dollar. The pound is well down from Wednesday as it now trades just below the 1.60 level to 1.5984. The Canadian dollar is well down this morning with its cross at 1.1345 to the USA dollar.
Early Thursday morning USA 10 year bond yield: 2.18% !!! down 2 in basis points from Wednesday night/ (USA economy not doing so well with this low yield) wow!!
USA dollar Index early Thursday morning: 85.25 up 9 cents from Wednesday’s close
end
The NIKKEI: Thursday morning down 338points or 2.22%
Trading from Europe and Asia:
1. Europe all in the red
2/ Asian bourses mostly in the red except Australia / Chinese bourses: Hang Sang in the red, Shanghai in the red, Australia in the green: /Nikkei (Japan) red/India’s Sensex in the red
Gold early morning trading: $1243.00
silver:$ 17.46
end
Your closing Spanish 10 year government bond Thursday/ up 10 in basis points in yield from Wednesday night.
Spanish 10 year bond yield: 2.22% !!!!!!
Your Thursday closing Italian 10 year bond yield up 16 in basis points and trading 36 in basis points above Spain./
Italian 10 year bond yield; 2.58%!!!!!
end
IMPORTANT CLOSES FOR TODAY
Closing currency crosses for Thursday night/USA dollar index/USA 10 yr bond: Europe falling apart this afternoon
Euro/USA: 1.2810 down .0014
USA/Japan: 106.26 up .300
Great Britain/USA: 1.6074 up 0.0072
USA/Canada: 1.1247 down .0018
The euro rose quite a bit in value during this afternoon’s session, but it was down a little by closing time , closing well above the 1.28 level to 1.2810. The yen was down during the afternoon session,and it lost 30 basis points on the day closing just above the 106 cross at 106.26. The British pound gained back major ground during the afternoon session and it was up for the day as it closed at 1.6074
. The Canadian dollar was well up during the afternoon session, and it was up on the day closing at 1.1247.
Your closing USA dollar index:
84.97 down 17 cents!!! on the day
your 10 year USA bond yield, a fall of 4 basis points: 2.15%!!!!!!!!!
European and Dow Jones stock index closes:
England FTSE down 15.73 or 0.25%
Paris CAC down 21.10 or 0.54%
German Dax down 10.95 or 0.13%
Spain’s Ibex down 168.80 or 1.72%
Italian FTSE-MIB down 221.88 pts !!! or 1.21%
The Dow: down 24.50. or .15%
Nasdaq; up 2.07 or .05
OIL: WTI 83.09
Brent: 84.47
end
And now for your big USA stories
Today’s NY trading:
Dow Drops 6th Day – Longest Losing Streak In 14 Months
Submitted by Tyler Durden on 10/16/2014 16:08 -0400
• Across the Curve
• Bond
• Copper
• GOOG
• POMO
• POMO
inShare1
An ugly dump in stocks early on sent all the major indices to yesterday’s lows (and bond yields to yesterday’s lows) but for a smorgasbord of reasons (pick from: Bullard “QE4″, jobless claims, industrial production, oil rising, lack of Ebola panic, oh and POMO) stock performed the ubiquitous bounce and extended gains quite handsomely before fading back in the afternoon. Volume was considerably lower than yesterday but solid (driven mostly by the dump). All major asset classes ticked together all day with USDJPY, Treasury yields, stocks, and oil all rising with one another. The USD was flat(despite some intraday kneejerks) as were gold and silver. Copper slid lower as oil jerked dramatically higher intraday before falling back (holding above $82). VIX fell modestly to around 25.5. Once again early manic-selling led to late buying panic (but the volume buying was dramatically lower). The Dow closed red for the 6th day in a row – longest losing streak since Aug 2013.
Russell & Trannies were the best performers on the day as the major indices all closed around unchanged despite the best effortsof JPY…
The weakness in stocks (during the European session) is evident from futures…
Ramp volume (which lifted S&P Futs back to VWAP) was weak relative to selling volume
Sectors saw the worst first today as Energy rebounded…
Everything was nicely coupled today…
A very big swing in HY CDX today (looks like hedges being unwound and managers reducing risk into the rally)
VIX decoupled again at the close (same as the last 2 days)…
The USD kneejerked higher and back down around EU and US data to close very marginally higher (-0.9% on the week)
Treasury yields rose 3-4bps on the day – across the curve
Oil surged (but faded back), gold and silver flat, copper lower…
Charts: Bloomberg
Bonus Chart: GOOG….
end
The important Philly manufacturing index drops to a 4 year low:
(courtesy zero hedge)
Philly Fed Drops To 4-Month Lows, Employment Tumbles
Submitted by Tyler Durden on 10/16/2014 10:06 -0400
• Philly Fed
• recovery
inShare1
Despite a small beat of expectations at 20.7 vs expectation sof 19.8 but down from 22.5 , Philly Fed fell for the 2nd month from 3-year highs to 4-month lows.
Under the surface things were even less agreeable with employment and average workweek tumbling notably. As the table below shows, the number of employees was whacked in half to just 12.1, while the employee workweek actually dipped into negative territory at -1.3
Forward-looking expectations dropped driven by a fall in capital spending expectations, which slid as now has become the norm, from 23.7 to 18.9.
The punchline from the Philly Fed’s summary:
The October Manufacturing Business Outlook Survey suggests continued expansion of the region’s manufacturing sector. Firms reported continued increases in new orders but slower growth in activity, shipments, and employment this month. The survey’s future activity indexes remained at high readings, suggesting continued optimism about manufacturing growth. Firms were less optimistic about employment increases over the next six months, but one-third of the firms still expect to hire additional workers.
Oh well, there is always the 7th half of 2014 for Tim Geithner’s August 2010 “recovery” to finally flourish.
end
Well that is all for tonight
I will see you tomorrow night
Harvey.
Source: http://fortwealth.com/blog/?p=6052
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