Ladies & Gentlemen, Harvey Organ’s 10-24-14 Update
Oct 24.2014:
I will be creating another website of my own. JB Slear and Silverdoctors have been gracious enough to allow me to post on their websites while mine is being set up.
All material that I use has been from public sources and I never infringe on copyright laws.
Gold: $1231.20 up $2.70
Silver: $17.14 down 3 cents
In the access market 5:15 pm:
Gold $1231.00
silver $17.21
The gold comex today had a poor notice day registering 0 notices served.
A few months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 266 tonnes for a loss of 37 tonnes. We have three commentaries on the huge withdrawal of gold from the comex with zero hedge, Dave Kranzler, and Steve St Angelo, the authors.
In silver, the open interest continues to remain extremely high and we are still at multi year highs at 172,070 contracts.
To boot, the December silver OI remains extremely high at 120,032.
Today, we had a huge loss of inventory at the GLD to the tune of 4.48 tonnes of gold. Inventory rests this weekend at 745.39 tonnes.
SLV’s inventory remains unchanged and rests at 343.415 million oz.
We have many important stories to bring to your attention today…
Let’s head immediately to see the major data points for today.
First: GOFO rates/ Moving closer to backwardation!!
All months basically moved more to the negative directions with the various GOFO months. On the 22nd of September the LBMA stated that they will not publish GOFO rates. However today we still received today’s GOFO rates.
It looks to me like these rates are now fully manipulated.
London good delivery bars are still quite scarce.
Oct 24 2014
1 Month Rate: 2 Month Rate 3 Month Rate 6 month rate 1 yr rate
+.02% +.05% + .0875% + .1275% + .1825%
Oct 23 .2014:
1 Month Rate 2 Month Rate 3 Month Rate 6 month Rate 1 yr rate
+.10% +.11% +.135% +.155 + .1925%
end
Let us now head over to the comex and assess trading over there today,
Here are today’s comex results:
The total gold comex open interest fell by a small margin of 324 contracts from 409,425 down to 409,101 with gold down $16.30 yesterday. Not too many longs left the arena. 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 2 contracts down to 233. We had 1 notice filed yesterday, so we lost 1 gold contract or an additional 100 oz will not stand for the October contract month. The November contract month saw its OI fall by 11 contracts down to 341. The December contract fell by 3746 contracts down to 278,938. The estimated volume today was poor at 96,378 contracts. The confirmed volume yesterday was fair at 152,201 but loaded with high frequency traders.
The total silver Comex OI fell by a tiny 557 contracts despite the fact that silver was down yesterday to the tune of 7 cents. It seems that the shorts are still reticent to supply for silver contracts and they are starting to cover for fear of major entities taking delivery. Tonight the silver OI complex rests at 172,070 contracts. In ounces, this represents 860 million oz or 122.90% of silver annual production (annual production of 700 million oz ex China). In commodity law generally the OI is represented by 3 to 5% of annual production. These silver contracts are in very strong hands and as I have indicated to you on countless occasions, this will continue to bring nightmares to our bankers. Probably this is as good a reason as ever for the bankers to raid on a continual basis trying to force those longs to puke their interests, and again they failed today.
We are in the non active silver contract of October and here the OI fell by 4 contracts down to 10 contracts. We had 10 notices served upon yesterday so we gained 6 silver contracts or an additional 30,000 oz of silver will be standing for the October contract month. November is also a non active delivery month and here the OI stood pat at 122 contracts.
The December silver contract is a biggy contract month and tonight it surprisingly only fell by a tiny 1210 contracts down to 120,032 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 600.0 million oz or 85.7% of annual global production (ex China). The estimated volume today was poor at 31,005. The confirmed volume yesterday was also poor at 33,683 contracts. Bill Holter and I strongly believe that only one entity could possibly behind the majority of these longs and that entity is the sovereign Chinese government.
Data for the October delivery month.
October standings
Oct 24.2014
Gold
Ounces
Withdrawals from Dealers Inventory in oz nil
Withdrawals from Customer Inventory in oz nil
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz nil
No of oz served (contracts) today 0 contracts( nil oz)
No of oz to be served (notices) 234 contracts (23,400 oz)
Total monthly oz gold served (contracts) so far this month 1089 contracts (108,900 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
39,218.97 oz
Total accumulative withdrawal of gold from the Customer inventory this month
962,978. oz
Today, we had zero dealer transactions
total dealer withdrawal: nil oz
total dealer deposit: nil oz
we had 0 customer withdrawals:
total customer withdrawals:zero oz
we had 0 customer deposits:
total customer deposit: nil oz
We had 0 adjustments:
Total Dealer inventory: 891,623.738 oz or 27.73 tonnes
Total gold inventory (dealer and customer) = 8.577 million oz. (266.79) tonnes)
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 37 tonnes have been transferred out. We will be watching this closely!
Today: zero hedge and Dave Kranzler weigh in on the huge amounts of gold leaving the JPMorgan vaults as outlined by me yesterday:
first zero hedge:
Fastest Pace Of Withdrawals From JPM’s Gold Vault In Over A Year
Submitted by Tyler Durden on 10/24/2014 12:37 -0400
• default
inShare3
While JPM’s eligible gold holdings are nowhere near the record lows hit in the summer of 2013, when they dropped to a tiny 46K ounces, sparking concerns of a potential deliverable default, yesterday according to the daily CME gold depository report, JPM saw a whopping 321,500 ounces, or about 10 tons of gold, withdrawn. This was the biggest outflow since the August 5 rebalance when nearly 1.5 million ounces were withdrawn and added, and was the biggest, and is tied with two identical 321,500 oz outflows recorded in early January. As of yesterday, JPM’s eligible gold tumbled by 40% in one day, declining to 485.K ounces from over 800K the day before: the lowest eligible gold inventory since almost exactly a year ago.
What is perhaps more notable, is that the recent outflows of eligible golds are taking place at the same time as there has been a significant reduction in the NAV/gold holdings of the GLD ETF. A question thus arises once again: where is the gold being withdrawn to and who is doing these not insubstantial withdrawals.
Finally, it bears pointing out that since September 1, eligible gold at JPM’s vault has declined from 1.5 million ounces to under 500K: a decline of over 1 million ounces in just over a month, and matching the fastest decline on record for the JPM vault recorded in early 2013.
It would appear that someone is certainly in a rush to “withdraw” as much eligible gold as possible at a time when gold has been stubbornly trading in the $1200/ounce range, and when significant moves of either physical or paper gold, appear to not have much of an impact on gold price.
Will JPM’s gold vault be further emptied today? We will know the answer in just about 3 hours. (Answer: it was zero… Harvey)
end
And for the second piece here is Dave Kranzler of IRD
GLD Drained Again Yesterday – 33% of JPM’s Comex Gold Is Drained
October 23, 2014Financial Markets, Gold, Precious Metals
Another 2 tonnes of gold was removed from the GLD trust yesterday. The last time the reported amount of gold in GLD was this low was November 18, 2008. The price of gold was $738. Despite the fact that the price of gold is up about 2% YTD, 6% of GLD’s reported amount of gold has been removed by the bullion banks. I predicted in 2009 in a report I wrote about GLD’s legal structure that GLD would eventually suffer the same fate as Enron. In fact, our entire is system is one giant Enron/Madoff Ponzi scheme.
To compound the removal of the “visible” physical stock of gold from our western system, nearly 10 tonnes of gold was removed from JP Morgan’s Comex gold vault:
Over the last month, roughly 1 million ounces, or 31 tonnes of gold has been removed from JP Morgan’s Comex gold vault.
Based on the latest Comex gold futures open interest report, the ratio of December gold futures to “registered” gold available to deliver is 31. In other words, there 31 ounces of paper gold that has been sold into the market for every ounce of gold available to deliver. If that’s not evidence of a rigged, manipulated market, I don’t know it is.
In the context of the amount of gold being removed from GLD, I would love to see an fully independent, publicly visible accounting of the gold bars that are supposedly being held in HSBC’s vault on behalf of GLD. Good luck trying to get this accomplished because the Prospectus is clear on this issue: HSBC can give you the middle finger if you ask for the audit.
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 contract 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 nil oz of gold. In order to calculate what will be standing for delivery in September, I take the number of contracts served so far this month at 1089 x 100 oz = 108,900 oz,to which I add the difference between the open interest for the front month of October(233) minus the number of notices served upon today (0) x 100 oz = 132,200 oz or 4.11 tonnes.
We lost 100 gold ounces standing for the October contract month.
Thus: October standings:
1089 contracts x 100 oz = 108,900 oz + (233 ) – (0)x 100 = 132,200 oz or 4.11 tonnes
end
Oct 24/2014:
October silver: Initial standings
Silver Ounces
Withdrawals from Dealers Inventory 335,130.820 (Brinks)
Withdrawals from Customer Inventory 511,235.498 oz
(CNT,JPM Brinks)
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 2,451,366.770 oz (CNT,HSBC,Scotia)
No of oz served (contracts) 2 contracts (10,000 oz)
No of oz to be served (notices) 10 contracts (50,000 oz)
Total monthly oz silver served (contracts) 772 contracts (3,860,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month 2,246,937.1
Total accumulative withdrawal of silver from the Customer inventory this month 7,468,139.6 oz
Today, we had 0 deposits into the dealer account:
total dealer deposit: nil oz
we had 1 dealer withdrawal:
i) Out of Brinks: 335,130.820 oz
total dealer withdrawal: 335,130.82 oz
We had 3 customer withdrawals:
i) Out of JPM: 200,677.20 oz
ii) Out of CNT: 10,307.118 oz
iii) Out of Brinks: 300,251.18
total customer withdrawal 511,235.498 oz
We had 3 customer deposits:
i) Into CNT; 6,783.700 oz
ii) Into HSBC: 2,258,515.54 oz
iii) Into Scotia: 186,067.53 oz
total customer deposits: 2,451,366.770 oz
we had 0 adjustments:
Total dealer inventory: 66.130 million oz
Total of all silver inventory (dealer and customer) 181.125 million oz.
The CME reported that we had 8 notices filed for 40,000 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 772 x 5,000 oz per contract or 3,860,000 ounces upon which I add the difference between the open interest for the front month of October (10) – the number of notices served upon today (8) x 5000 oz per contract
Thus Oct. standings for silver: 772 notices x 5,000 oz per notice or 3,860,000 oz + (10) – (8) x 5,000 oz = 3,870,000 oz,
we thus gained 30,000 additional ounces of silver standing in the October contract month.
this level should continue to rise as the month progresses.
It looks like China is still in a holding pattern ready to pounce when needed.
The open interest on silver is still highly elevated. Gold has a low OI with a low gold price. Silver has a high OI with a low silver price. Something has got to give!!
As far as the silver inventory, it looks compromised as well. Shanghai is in complete silver backwardation and yet comex seems to import huge amounts of silver.
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
Oct 24.2014: a huge withdrawal of 4.48 tonnes of gold at the GLD/Inventory 745.39 tonnes. This gold is heading to friendly territory: namely Shanghai.
Oct 23.2014: no change in gold inventory at the GLD/Inventory at 749.87 tonnes.
Oct 22.2014: we lost another 2.1 tonnes of gold at the GLD. Inventory rests at 749.87 tonnes. This tonnage no doubt is off to Shanghai.
Oct 21.2014: no change in inventory/GLD inventory rests tonight at 751.96 tonnes.
Oct 20.2014: wow!! a massive 8.97 tonnes of gold leaves the GLD heading to the friendly shores of Shanghai./Inventory 751.96
Oct 17.2014: No change in gold inventory at the GLD/Inventory 760.93 tonnes
Oct 16.2015: GLD gained back 1.79 tonnes of gold/inventory 760.93 tonnes
Oct 15.2014 GLD lost back the gold it gained yesterday to the tune of 2.09 tonnes/Inventory back to 759.14 tonnes
Oct 14. GLD inventory/stays the same at 761.23 tonnes
Oct 13.2014: this is good/it is quite possible that the gold has finally hit empty (due to gold near backwardation)
GLD 761.23 tonnes up 1.79 tonnes today.
Oct 10.2014: we lost 2.64 tonnes of gold from the GLD and this gold will head to Shanghai/inventory 759.44 tonnes
Oct 8.2014: we lost 5.39 tonnes of gold today and this gold will be heading to the friendly confines of Shanghai, China /New inventory 762.08 tonnes
oct 7.2014: as of 6 pm est, no change in gold inventory/767.47 tonnes
oct 6.2014: as of 6 pm est no change in inventory/767.47 tonnes
Oct 3.2014: as of 5 pm est no change in inventory/767.47 tonnes
Oct 2.2014: we lost another 1.19 tonnes of gold inventory heading towards Shanghai. (inventory 767.47 tonnes)
Oct 1.2014: we lost another 1.20 tonnes of gold inventory heading towards Shanghai. (inventory: 768.66 tonnes)
sept 30.2014: we lost another 2.39 tonnes of gold inventory heading towards Shanghai. (inventory 769.86 tonnes)
Today we lost a huge 4.48 in tonnage of gold inventory at the GLD
inventory: 745.37 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: 745.37 tonnes.
end
And now for silver:
Oct 24.2014: as of 6 pm, there is no change in silver inventory at the SLV. Note the difference between gold and silver. Gold leaves the vault of GLD as little silver leaves the SLV. (I guess it means that there is no silver to give to the banker participants)/Inventory: 343.415 million oz
Oct 23.2014: no change in silver inventory at the SLV (as of 6 pm est
Inventory: 343.415 million oz
Oct 22.2014: no change in silver inventory at the SLV ( as of 6 pm est)
Inventory: 343.415
Oct 21.2014; no change in silver inventory at the SLV (as of 6 pm est)
Oct 20.2014: we lost 1.15 million oz of silver inventory at the SLV/inventory 343.415 million oz
Oct 17.2014: no change in silver inventory/344.565 million oz
Oct 16.2014: no change in silver inventory/344.565 million oz
Oct 15.2014 no change in silver inventory/344.565 million oz
Oct 14.2014 today we had a loss of 1.201 million oz/SLV inventory rests at 344.565 million oz
Oct 13.2014: no change in silver inventory so far:
345.766 million oz
oct 10.2014: we lost a massive 3.25 million oz of silver leaving the SLV. Inventory 345.766 million oz
Oct.8/2014 no change in silver inventory 349.071 million oz
Oct 7.2014: a reduction of silver inventory to the tune of 863,000 oz/new inventory at SLV 349.071 million oz
Oct 6.2014: no change in inventory/349.934 million oz.
Oct 3.2014/ we had a minor loss of 152,000 oz and this is usually to pay for fees./Inventory 349.934
oct 2.2014: no change in silver inventory/350.086 million oz.
Oct 1 late last night at 11 pm I was notified by Fred that they added a remarkably high 4.075 million oz of silver inventory at the SLV.
new inventory: 350.086 million oz.
sept 30.2104: no change in inventory/inventory 346.011 million oz
Today, Oct 24.2014
Inventory tonight no change in silver inventory /silver inventory rests tonight at 343.415 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now deeply into the positive to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 8.3% percent to NAV in usa funds and Negative 8.2% to NAV for Cdn funds
Percentage of fund in gold 60.8%
Percentage of fund in silver:38.50%
cash .7%
.( Oct 24/2014)
2. Sprott silver fund (PSLV): Premium to NAV falls to positive 4.29% NAV (Oct 24/2014) (will pick up later tonight
3. Sprott gold fund (PHYS): premium to NAV rises to negative -0.44% to NAV(Oct 24/2014)
Note: Sprott silver trust back hugely into positive territory at 4.29%.
Sprott physical gold trust is back in negative territory at -0.44%
Central fund of Canada’s is still in jail.
end
At 3:30 pm we receive the crooked CME’s COT report.
Just get a load of the latest data:
First the gold COT:
Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
207,129 99,145 30,768 139,429 244,327 377,326 374,240
Change from Prior Reporting Period
13,549 -9,020 733 -1,208 24,867 13,074 16,580
Traders
141 99 75 51 54 221 203
Small Speculators
Long Short Open Interest
33,731 36,817 411,057
128 -3,378 13,202
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, October 21, 2014
Our large specs:
Those large specs that have been long in gold added a monstrous 13,549 contracts to their long side
Those large specs that have been short in gold covered a monstrous 9020 contracts from their short side
And now get a load of this…
Our commercials:
Those commercials that have been long in gold pitched a tiny 1208 contacts from their long side
Those crooked commercials who have been short from the beginning of time, added a whopping 24,867 contracts to their short side with gold up a few bucks. It seems that the bankers threw in everything but the kitchen sink to stop gold’s advance.
Our small specs:
Those small specs that have been long in gold added a tiny 128 contracts to their long side
Those small specs that have been short in gold covered a rather large 3378 contracts from their short side.
Conclusions: the crooks are at in again.
And now for silver:
COT Gold, Silver and US Dollar Index Report – October 24, 2014
– Posted Friday, 24 October 2014 | Share this article | Comment – New!
Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
207,129 99,145 30,768 139,429 244,327 377,326 374,240
Change from Prior Reporting Period
13,549 -9,020 733 -1,208 24,867 13,074 16,580
Traders
141 99 75 51 54 221 203
Small Speculators
Long Short Open Interest
33,731 36,817 411,057
128 -3,378 13,202
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, October 21, 2014
Gold COT Report – Futures & Options Combined
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
204,257 92,978 177,048 250,308 357,718 631,612 627,744
Change from Prior Reporting Period
12,683 -11,236 11,643 4,386 30,900 28,712 31,307
Traders
160 122 141 54 60 280 261
Small Speculators
Long Short Open Interest
37,535 41,403 669,147
-866 -3,461 27,846
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, October 21, 2014
And now for silver:
Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
57,236 50,405 18,335 70,098 84,689
-952 -46 -565 3,198 1,529
Traders
91 65 49 46 40
Small Speculators Open Interest Total
Long Short 170,192 Long Short
24,523 16,763 145,669 153,429
-818 -55 863 1,681 918
non reportable positions Positions as of: 156 139
Tuesday, October 21, 2014 © SilverSeek.com
The silver COT report seems tame compared to gold:
Our large specs:
Those large specs that have been long in silver pitched 952 contracts from their long side
Those large specs that have been short in silver covered a tiny 46 contracts from their short side.
Our commercials;
Those commercials that have been long silver pitched a tiny 565 contracts from their long side.
Those commercials that have been short in silver from the beginning of time added another 3198 contracts to their short side.
Our small specs:
Those small specs that have been long in silver pitched a tiny 818 contracts from their long side
Those commercials that have been short in silver covered a tiny 55 contracts from their short side.
Conclusion: same as gold.
Now your more important physical stories today:
Important read… The Swiss Referendum
(courtesy R Manly)
Swiss ‘Yes’ and ‘No’ Gold Initiative Campaigns Compete at Launches in Bern
Published in Market Update Precious Metals on 24 October 2014
By
by Ronan Manly, GoldCore Consultant
Swiss Flag in the Swiss Alps
Introduction
In what was an extraordinary first salvo in the head-to-head gold referendum battle that will take place in Switzerland over the next five weeks, yesterday witnessed the launch of both the “Save our Swiss Gold” (Gold Initiative)” campaign and the opposing “Cross-party Committee against the Gold Initiative” campaign in Switzerland’s political capital, Bern. Switzerland’s potentially historic gold initiative referendum takes place on Sunday 30th November.
First up was the Gold Initiative Action Committee, the initiators of the gold initiative and the advocates of a ‘Yes’ in the referendum, who launched their campaign at a 10:30am press conference in the conference hall of the Federal Palace Media Centre in Bern[1].
Not to be outdone, the cross-party Committee against the Gold Initiative, the advocates of a ‘No’ vote, held their campaign launch press conference at 1:15pm in the same conference hall at the Federal Palace Media Centre in Bern[2].
[1] https://www.news.admin.ch/dienstleistungen/00009/index.html?lang=fr&even…
[2] https://s.bsd.net/economie/main/page/file/e166d3e9070191a779_rom6btyxf.pdf
‘Yes’ Campaign Launch
The press conference of the Gold Initiative ‘Yes’ campaign committee was hosted by Swiss People’s Party (SVP) members, Luzi Stamm, Lukas Reimann and Ulrich Schlüer.
Ulrich Schlüer, a former SVP National Councillor, disputed the recent claim by Swiss Finance Minister Eveline Widmer-Schlumpf that since the gold initiative calls for 20% of the reserves of the Swiss National Bank (SNB) to be kept in gold, that this would mean that the SNB would need to buy SwF 60 billion worth of gold to raise the percentage of gold on the SNB’s balance sheet to 20%.
Schlüer said that this was not true, and that one alternative would be for the SNB to reduce the size of its balance sheet, bringing down the absolute level of foreign exchange reserves, thereby meeting the 20% target this way. Schlüer argued that given that the SNB would have five years in which to meet this 20% floor level, this would not necessarily impact the SwF / Euro target band, and furthermore, it was also the responsibility of the European Central Bank to manage the Euro’s value, not just the SNB.
SVP National Councillor Lukas Reimann (SG) highlighted that the gold initiative’s stipulation of gold holdings as a minimum target of 20% of the SNB’s balance sheet is still a lot lower than other countries, for example, Germany.
Since gold reserve holdings of neighbouring European countries such as France, Italy and Germany are in the range of 65% to 70% of their total foreign reserve assets, the point Reimann makes is very valid. Not to mention the fact that other large gold holding countries such as China and Russia are specifically doing everything in their power right now to continually accumulate gold reserves so as to bring gold as a percentage of their total reserve assets up to and beyond the 20% level.
The Swiss Federal Council and the SNB have frequently used the comparative statistic of gold reserves per head of population to justify their argument that Swiss gold holdings are the highest in the world (per capita), but in a world of absolute central bank gold rankings, this argument is immaterial.
Paper Decays, Gold holds its Value
The Gold Initiative Committee told their press audience that gold is a long-term “safe and stable store of value” in times of economic turbulence. The Committee views gold as an insurance, and as a reserve asset, with gold reserves being the foundation for a stable currency and economy, while securing the independence of Switzerland[1].
Lukas Reimann said that while gold is money and it defies crises, paper money can be reproduced at will and is easily manipulated. SVP National Councillor Luzi Stamm (AG) said that “paper decays, money holds its value.” According to Stamm, the SNB’s talk of “excess gold reserves” in the 1990s was very misleading.
[1] http://www.nzz.ch/schweiz/papier-zerfaellt-gold-haelt-1.18410163
Luzi Stamm lamented that the Swiss gold sales of 2000-2008, when the SNB sold 1,550 tonnes of Switzerland’s gold, were ‘a big mistake’ and that retrospectively, the sales had been conducted “at incredibly low prices” or “cut-price” levels due to Switzerland having “bowed to foreign pressure.”
On the question of why the Gold Initiative Committee wants all Swiss gold to be stored in Switzerland, Luzi Stamm asked “who seriously believes that we could bring back the gold in the event of a serious crisis in Switzerland”. He added that there was absolutely “no compelling reason” to keep Swiss gold abroad.
SVP National Councillor, Lukas Reimann (SG) speaking at the launch of the Gold Initiative Committee’s press conference in Bern, 23 October 2014
On the specific issue of the referendum vote on the 30th November, Lukas Reimann said that he had never experienced such a large discrepancy between the disinterest which is being displayed by the Swiss media on the gold initiative referendum, and the active interest that is being displayed by the Swiss population to the referendum.
Reimann pointed out that the only Swiss political party that has officially backed a ‘Yes’ vote for the gold initiative is the small EDU party (Federal Democratic Union of Switzerland). Even his own party, the SVP, is showing limited support, and when the gold initiative petition came through the Swiss parliament earlier this year, not even half the SVP grouping voted for it.
‘No’ Campaign Launch – Alphabet Soup
Switzerland has an extensive multi-party political system where cooperation and consensus are usually more important than head-to-head party political opposition and point scoring. In the case of the Swiss gold initiative, apart from a core group of the SVP party, all the main political parties have come out against the proposal.
Opposition to the Gold Initiative in Swiss politics is widespread and has evolved into a very well structured alliance of political parties from right across the Swiss political spectrum, even to the extent of a well-funded and well-organised cross-party committee actively campaigning to defeat the initiative.
This cross-party committee consists of an alphabet soup of seven political parties and various other economic groups and unions. The party names can be confusing since they mostly have multiple names and abbreviations depending on whether the French, German or Italian name is being used.
The seven political parties are (in French terms): the PDC, the PEV, the PDB, the PLR, the PS, Les Verts (The Greens), and the Vert’Libéraux[1]. There are also SVP politicians aligned to this committee.
Notably, there are a top-heavy eight co-presidents on the ‘No’ Gold-Initiative Committee (Gold-Initiative Nein) from all the main political parties, and over 123 politicians listed as committee members on the campaign’s web site. The head of the ‘No’ campaign is Matthias Leitner, from the FDP, Liberals’ party (PLR in French).
The eight co-presidents of the committee are Karin Keller-Sutter, advisor PLR States, Alex Kuprecht, advisor UDC (SVP) States, National Councillor Dominique de Buman for the PDC, National Councillor Urs Gasche for the PBD, National Councillor Philipp Hadorn for the PSS, State Councillor Konrad Graber for the CVP, National Councillor Kathrin Bertschy for the GLP, and Ursula Gut, State Councillor Zurich PLR. Six of these politicians spoke at the launch of the ‘Gold-Initiative Nein’ campaign in Bern, as well as another politician, Beat Flach of the small GLP party.
[1] https://s.bsd.net/economie/main/page/file/e166d3e9070191a779_rom6btyxf.pdf
This broad coalition of diverse political and economic interests aligning to try to scupper the gold initiative of Stamm, Reimann, Schlüer and their supporters, shows just how seriously the Swiss political establishment and the Swiss National bank are taking the possibility of the Gold Initiative Action Committee actually coming out on top in the 30 November referendum.
Unsaleable Gold Like an Unusable Fire Extinguisher?
The anti-initiative committee claims that the initiative would be catastrophic for the Swiss economy, since it would undermine the independence of the SNB and obstruct its freedom. The ‘Nein’ committee have even formulated a slogan asking “Would you equip a house with a fire extinguisher if it was impossible to use it in case of fire? That would be absurd!”
At their press conference yesterday (23 October), National Councillor Karin Keller-Sutter of the FDP said that the initiative was a fire hazard, and that ‘unsaleable gold’ destroys jobs and undermines federal and cantonal budgets[1].
One of the two Swiss National Bank headquarters, on the Bundesplatz in Bern. The majority of the Swiss gold reserves are said to be stored in gold vaults under the Bank and the Bundesplatz
National Councillor Urs Gasche of the PBD claimed that a strong Swiss Franc would negatively impact on exports and tourism, and that the SNB had saved jobs and rescued the Swiss economy through its use of the SwF/Euro peg.
Alex Kuprecht, actually representing the SVP, said that the gold initiative would put the SNB in chains and that “the SNB must always be able to use the full width of monetary opportunities and act accordingly in crises”.
Dominique de Buman of the PDC said that gold would be useless if it could not be sold, like a fire extinguisher, which you could not use in the event of a fire. Philipp Hadorn was concerned that if, in the long term, the SNB balance sheet shrank, then gold could end representing a majority of that balance sheet in terms of assets.
Financial Director of Zurich Canton, Ursula Gut, invoked the gold price fluctuation argument, drawing the conclusion that if the gold price fell, it could mean that the SNB would not distribute profits into the federal and cantonal budgets, thereby leaving the federal state and the cantons to have to increase taxes and borrowing, while degrading the service performance of the federal and cantonal governments.
Another speaker, Beat Flach, a representative of the smaller GLP party, said that foreign gold storage is wise for crisis preparedness, and that gold stored in the ‘Swiss gold trading centre’ would not work in times of crisis.
This is notwithstanding the fact that Switzerland is the largest physical gold trading centre in the world. Furthermore, if the Swiss politicians and the Swiss National Bank are so concerned with maintaining feign storage locations for Swiss gold, then why, when the Swiss National Bank sold 1,550 tonnes of sold between 2000 and 2008, did the vast majority of these gold sales emanate from SNB gold holdings at the Federal Reserve Bank in New York which ultimately settled at the Bank of England in London?
[1] http://www.derbund.ch/schweiz/standard/Gegner-warnen-vor-brandgefaehrlic…
At their press conference, the anti-initiative inter-party committee summed up, saying that “the cross-party committee considers that the gold initiative is nonsense that threatens our country.”
Swiss Electorate 5.2 million
The population of Switzerland is just over 8 million. Anyone 18 or over can register to vote at the Federal level and the size of the electorate is approximately 5.2 million. Swiss citizens living outside Switzerland can vote at the Federal level once that register at a Swiss diplomatic mission and remain registered on their home commune registry in Switzerland.
Double Majority including Cantons
In referendums on federal popular initiatives, such as the vote on the Save our Swiss Gold initiative, the proposal being voted on will not pass into a Constitutional amendment unless it wins a popular majority of the popular vote and a majority of the cantons.
What this means is as follows. There are 20 full cantons and 6 half-cantons i.e. the equivalent of 23 full cantons. If the majority of voters in a full canton vote for a referendum proposal, this creates one canton vote in favour. If the majority of voters in a half-canton vote in favour, this creates one half of a canton vote in favour.
The double majority is explained in Article 142 of the Constitution:
2 Proposals that are submitted to the vote of the People and Cantons are accepted if a majority of those who vote and a majority of the Cantons approve them.
3 The result of a popular vote in a Canton determines the vote of the Canton.
4 The Cantons of Obwalden, Nidwalden, Basel-Stadt, Basel-Landschaft, Appenzell Ausserrhoden and Appenzell Innerrhoden each have half a cantonal vote.
For there to be a majority of the cantons, at least the equivalent of 12 full cantons (out of the equivalent of 23 full cantons) must have voted for the referendum proposal. Otherwise it will not pass, despite the fact that overall a majority of Swiss citizens voted for the proposal. This is another peculiarity of the Swiss federal referendum system which makes estimation of the referendum outcome harder to predict.
The half cantons are Obwalden and Nidwalden, Basel-Stadt and Basel-Landschaft, and Appenzell Ausserrhoden and Appenzell Inner Rhoden. Whereas two of the half-canton ‘pairs’ do have very small populations (and therefore very small electorates), namely, Appenzell Inner Rhoden. Rh 11,473, Appenzell Ausser Rhoden 38,330, Obwalden 25,905, Nidwalden 30,635. The other half-canton ‘pair’ representing Basel have relatively large populations, Basel-Stadt 114,051 and Basel-Landschaft 187,247. However, some full cantons also have very small electorates, such as Glarus 26,153 and Uri 26,278.
by the Dozen
Voting on referenda in Switzerland takes usually takes place four times per year, with an average of three referenda being scheduled for each of the four days. Polling is held on Sunday mornings but a lot of people vote by post in the run up to polling day.
For the upcoming referenda on 30th November, there are actually two other popular initiative referenda taking place alongside the “”Save our Swiss Gold initiative” referendum, namely “Stop the tax breaks for millionaires (abolition of lump-sum taxation)” and “Stop Overpopulation – to secure the natural foundations of life.”
There has been speculation in the media as to how, if at all, the scheduling together of these three referenda might affect the outcome of the gold initiative, due to the possibility that more people who might be in favour of the gold initiative might also be in favour of saying ‘Yes’ to the other two referenda. Since there are so many variables involved in this speculation, its difficult to draw any conclusions at this stage.
Sometimes There Are Shock Results
In the quite well known 14 February 2014 popular initiative against mass immigration, turnout was 56.57%, with 2.91 million people voting. This was the famous shock result where 50.3% voted in favour of limiting immigration and 49.7% voted against.
The voter statistics for the immigration vote last February were “Total eligible voters: 5,211,426”, “Of which abroad: 137,480”, with “Total votes 2,948,156” and “Turnout 56.57%”.
In Switzerland, a few months after referendums take place, the Federal Administration provides very in-depth data on the voting results, giving details on voting patterns across the German, French and Italian speaking areas and also voting patterns between cities, smaller towns and rural communities.
The overall result in the ‘limiting mass immigration’ referendum which produced the 50.3% ‘Yes’ vote hid a lot of interesting variations between urban and rural centres and also between German Switzerland, French Switzerland and Italian Switzerland. Whereas urban centres only voted 41.5% for the motion, rural communities voted 57.6% in favour, highlighting a more conservative stance in rural areas, as would be expected. More interestingly, Italian Switzerland voted 68% ‘Yes’ against 52% ‘Yes’ from German Switzerland, and 41.5% ‘Yes’ from French Switzerland. This just shows the variability across the urban-rural divide and across the country.
Its also important to note that most federal popular initiatives get rejected by the electorate. Of 118 federal popular initiatives voted on between 1981 and September 2014, only 15 were adopted (12.7%) and 103 were discarded. Other referendums types, namely, mandatory and optional referenda, had a far higher adoption rate over the same period, with 61 of 79 mandatory referendums passing (81%), and 59 of 85 optional referendums passing (69%).
However, in the February 2014 ‘limiting mass immigration’ referendum (referendum #580), the only main party to call for a ‘yes’ vote was the SVP (People’s Party), and the referendum still passed, despite the fact that all other main parties had called for a ‘no’ vote.
Therefore, with both the ‘Yes’ and ‘No’ gold initiative campaigns only now officially beginning, the field is wide open, and the success of each side’s campaigning over the next five weeks will be crucial. With the only opinion poll so far, earlier this week, showing the Swiss electorate swaying towards a ‘Yes’ vote, Luzi Stamm’s Gold Action Committee appears to have gained the strongest initial momentum.
End of Part 2
by Ronan Manly, GoldCore Consultant
Editor, Stephen Flood, GoldCore CEO
Get Breaking News and Updates on the Gold Market Here
GOLDCORE MARKET UPDATE
Today’s AM fix was USD 1,231.75, EUR 973.71 and GBP 767.97 per ounce.
Yesterday’s AM fix was USD 1,240.50, EUR 979.94 and GBP 775.31 per ounce.
Gold fell $8.60 or 0.69% to $1,232.90 per ounce and silver climbed $0.07 or 0.41% to $17.22 per ounce yesterday.
Spot gold in Singapore eased 0.1% to $1,230.48 an ounce by 0020 GMT, after slipping over 1% in the prior two sessions.
The yellow metal is headed for a weekly loss of 0.6%, its first decline in three weeks, while the U.S. dollar gained after two weekly declines in a row.
Palladium raked in the best performance among precious metals with over a 4% jump set for its biggest gain since March.
In London, gold in Swiss storage traded near its lowest price in a week as investors weighed economic data pointing to signs that the U.S. economy is recovering. Silver for immediate delivery added 0.4% to $17.2702 an ounce in London. Platinum was nearly unchanged at $1,256.63 an ounce.
Gold bullion bounced back from lows made on October 6 after the U.S. Fed said slowing overseas economies were a risk to U.S. expansion. Traders have pushed back estimates for when policy makers will raise U.S. interest rates. Gold coins and bars prices dropped 28% last year on expectations of less QE from the Fed.
See Essential Guide to Storing Gold In Switzerland here
end
Chris Powell: The crucial questions financial journalism won’t ask and central banks won’t answer
Submitted by cpowell on Thu, 2014-10-23 20:26. Section: Daily Dispatches
Remarks by Chris Powell, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
New Orleans Investment Conference
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana
Thursday, October 23, 2014
For many years this conference has bravely invited GATA Chairman Bill Murphy and me to speak here about the evidence of manipulation of the gold market, particularly manipulation undertaken directly or indirectly by central banks, and every year there has been new documentation to report. This documentation has been compiled at GATA’s Internet site, GATA.org, whose home page you can see here –
http://www.gata.org
– with the “Documentation” section noted at the top left, along with a section called “The Basics,” which summarizes the documentation as well as the purposes and history of central bank policy of suppressing the price of gold, gold being a currency that competes with government currencies.
The last two months have brought confirmation that, as we long have suspected, GATA has outlined only a small part of the surreptitious market manipulation being undertaken by central banks — that this manipulation is actually comprehensive, that it covers nearly every major market in the world.
This confirmation is largely the work of Eric Scott Hunsader, founder of the market data and research company Nanex in Winnetka, Illinois, who publicized, through the Zero Hedge Internet site, documents recently filed with the U.S. government, two of them with the Commodity Futures Trading Commission and one with the Securities and Exchange Commission.
The first document is a letter to the CFTC, dated January 29 this year, from CME Group, the operator of the major futures exchanges in the United States, and signed by CME Group’s managing director and chief regulatory counsel, Christopher Bowen:
http://www.gata.org/files/CMEGlobexCentralBankIncentiveProgram.pdf
The letter notifies the CFTC of changes to CME Group’s discount trading program for central banks. That is, the letter reveals that central banks are getting discounts for trading all futures on CME Group’s exchanges, including the New York Commodity Exchange, the major mechanism for “price discovery” in the monetary metals.
The CME Group letter argues that letting central banks trade in futures is beneficial because it adds “liquidity” to the markets. But of course “liquidity” here might as well mean the ocean. Anyone trading against the ocean will drown.
The second document is another letter from CME Group’s Bowen to the CFTC, dated August 28 this year, disclosing that CME Group is enacting rules against certain trading practices that are considered abusive and unfair, specifically “spoofing” and “quote stuffing,” the abrupt placing and withdrawal of huge volumes of phony orders to mislead traders about prices:
http://www.gata.org/files/CMEGroupManipulativePractices-08-28-2014.pdf
The letter’s implication is that such manipulative trading practices have been common on CME Group exchanges.
The third document is the CME Group’s annual report to the Securities and Exchange Commission, its 10-k report:
http://www.gata.org/files/CMEGroup-10K-03-03-2014.pdf
CME Group’s 10-k report reveals on Page 9: “Our customer base includes professional traders, financial institutions, institutional and individual investors, major corporations, manufacturers, producers, governments, and central banks.”
That central banks and governments are trading both surreptitiously and comprehensively in U.S. futures markets is a transformative development. Since central banks can create and deploy infinite money, this trading means that there are probably no markets anymore in anything, mainly just government interventions. It means that democratic capitalism has been quietly overthrown by a totalitarian coup and that the world has lost the great engine of its economic and democratic progress, free markets — without even being aware of the loss.
And yet what has been disclosed by these documents filed by the CME Group is only what was asserted 14 years ago in an essay written by the British economist Peter Warburton, an essay he titled “The Debasement of World Currency: It Is Inflation But Not As We Know It”:
http://www.gata.org/node/8303
* * *
“What we see at present,” Warburton wrote, “is a battle between the central banks and the collapse of the financial system fought on two fronts.
“On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur.
“On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities, or anything else that might be deemed an indicator of inherent value. Their objective is to deprive the independent observer of any reliable benchmark against which to measure the eroding value not only of the U.S. dollar but of all fiat currencies.
“Equally, they seek to deny the investor the opportunity to hedge against the fragility of the financial system by switching into a freely traded market for non-financial assets.
“The central banks have found the battle on the second front much easier to fight than the first. Last November [November 2000] I estimated the size of the gross stock of global debt instruments at $90 trillion as of mid-2000. How much capital would it take to control the combined gold, oil, and commodity markets? Probably no more than $200 billion, using derivatives.
“Moreover, it is not necessary for the central banks to fight the battle themselves, although central bank gold sales and gold leasing have certainly contributed to the cause. Most of the world’s large investment banks have overtraded their capital so flagrantly that if the central banks were to lose the fight on the first front, the stock of the investment banks would be worthless.
“Because their fate is intertwined with that of the central banks, investment banks are willing participants in the battle against rising gold, oil, and commodity prices.”
* * *
That is, as the saying goes, the futures markets are not manipulated; the futures markets are the manipulation.
As Warburton noted, if a commodity has a futures market, the price of that commodity likely is being manipulated, and probably suppressed, by surreptitious trading by central banks and their agents. As a result most market prices now are probably mere illusions, holograms created in large part in the trading rooms of central banks, like the trading room at the Federal Reserve Bank of New York.
But overwhelming as the power to create and deploy infinite money surreptitiously through central banks is, it is not the decisive power of governments. No, the decisive power of governments is the power to stifle or intimidate news organizations. For if people are ever informed that a market is rigged, they won’t participate in it and the rigging will lose its usefulness.
For 15 years GATA has done a fair job documenting the manipulation of markets by central banks and their agents. But publicizing that manipulation has been part of GATA’s work as well, and in that respect we have not succeeded much. We can get on television in Asia and Russia but we strain for the occasional citation by Western news organizations.
We have sent the recent CME Group documents to most major financial news organizations and to many financial letter writers, and as far as we can determine, not one has posed any question about them to the authorities or written or broadcast anything about them.
As with GATA’s other documentation, no one disputes these documents either. They simply cannot be acknowledged. They give the game away.
Maybe that will change on Saturday, when this conference will have the remarkable opportunity of questioning Alan Greenspan, who was chairman of the Federal Reserve for more than 17 years, from August 1987 to January 2006. If Greenspan is in a mood to be candid, we may learn a lot without having to interrogate him as a prosecutor would. If Greenspan is not in a mood to be candid, extracting anything useful from him will be tedious, requiring his interrogators to be very specific and to brandish documentation.
Of course I suspect that Greenspan may not care to be candid. So let me suggest a few very specific and detailed questions for him.
Question 1: Mr. Greenspan, in your testimony to Congress in July 1998, in which you urged Congress not to legislate regulation of derivatives –
http://www.federalreserve.gov/boarddocs/testimony/1998/19980724.htm
– you said: “Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise.”
Did you mean that gold lending by central banks was intended to suppress or control gold’s price — that Congress didn’t have to worry about someone cornering the gold market because central banks already had it cornered? With their many years of selling, lending, and swapping of gold, have central banks been underwriting the bullion banking business because it is a mechanism by which governments control the gold price?
Question 2: Mr. Greenspan, in recent years right down to the present, have central banks or governments been trading in the gold market and related markets? Are they trading in the gold and related markets now? If so, what has been and is the objective of that trading? Is it to make money, to obtain more gold, or to control gold’s price?
Question 3: Mr. Greenspan, did central banks and governments trade in the gold market and related markets when you were chairman of the Federal Reserve? How about any agency of the U.S. government — not just the Fed but the Treasury Department or any other agency? If there was such trading, what was its objective? Was it to control the gold price because gold is a currency competing or potentially competing with government currencies?
Question 4: Mr. Greenspan, when you were chairman of the Fed you were also, by virtue of that office, a member of the Board of Directors of the Bank for International Settlements. The annual report of the BIS –
http://www.gata.org/node/12717
– says the BIS “transacts foreign exchange and gold on behalf of its customers, thereby providing access to a large liquidity base in the context of, for example, regular rebalancing of reserve portfolios or major changes in reserve currency allocations. The foreign exchange services of the bank encompass spot transactions in major currencies and Special Drawing Rights as well as swaps, outright forwards, options, and dual currency deposits. In addition, the bank provides gold services such as buying and selling, sight accounts, fixed-term deposits, earmarked accounts, upgrading and refining, and location exchanges.”
Additionally, in a presentation to potential central bank members at BIS headquarters in Basel, Switzerland, in June 2008, the BIS advertised, as being among its services to its members, secret interventions in the gold and currency markets:
http://www.gata.org/node/11012
Further, in a speech to a BIS conference in Basel in June 2005, the head of the bank’s monetary and economic department, William R. White, said that a primary purpose of international central bank cooperation is “the provision of international credits and joint efforts to influence asset prices — especially gold and foreign exchange — in circumstances where this might be thought useful”:
http://www.gata.org/node/4279
So: While you were chairman of the Federal Reserve and a member of the BIS board, did the BIS operate in the gold market on behalf of any of its members to influence the gold price, and, if so, exactly how and for what purposes? Were such operations in the gold market public and announced or were they kept secret? If they were kept secret, why?
Question 5: Mr. Greenspan, by virtue of your chairmanship of the Fed, you were also a member of the Board of Governors of the International Monetary Fund. In March 1999, while you were a member of the IMF board, the IMF staff presented the IMF board with a secret report that has been posted on the Internet site of the Gold Anti-Trust Action Committee:
http://www.gata.org/node/12016
The secret IMF staff report said central banks objected to the staff’s proposal to require them to make a forthright public accounting of their gold swaps and lending. Such a public accounting would have required central banks to distinguish gold in central bank vaults from gold that had been swapped or loaned by central banks. The secret IMF staff report said central banks objected to such a forthright accounting of their gold reserves out of “a desire to preserve the confidentiality of foreign exchange market intervention for a period, in order to enhance its effectiveness.”
While you were Fed chairman and a member of the IMF board, did the IMF intervene secretly in the gold and foreign exchange markets, and, if so, on whose behalf and for what purposes? Did the Fed, U.S. Treasury Department, U.S. State Department, or any other U.S. government agency advocate or concur with any such intervention? Why was such intervention kept secret?
Question 6: Mr. Greenspan, in a letter to the Gold Anti-Trust Action Committee in September 2009 –
http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf
– Fed Governor Kevin M. Warsh wrote that the Fed has secret gold swap arrangements with foreign banks. Did the Fed have such arrangements during your chairmanship? If so, with whom were these arrangements undertaken and what were their purposes? And why must these arrangements be kept secret?
Question 7: Mr. Greenspan, during your tenure as Fed chairman, how many markets were the Fed and other U.S. government agencies trading in, directly or through intermediaries? Was such trading by U.S. government agencies for their own accounts or for the accounts of other governments and central banks, or both? And which markets were involved and what was the objective of such trading?
Question 8: Mr. Greenspan, do the Fed or other U.S. government agencies have any connection to the huge interest rate derivative positions that, according to the U.S. comptroller of the currency, are held by JPMorganChase, a primary dealer in U.S. government securities? Are these positions really U.S. government positions or the positions of other governments or central banks, undertaken to defeat market forces on interest rates?
* * *
Of course these questions might be useful for interviewing not just Alan Greenspan but any current or former central banker — if the world ever gets any financial news organizations willing to put critical questions to central banks.
Instead, of course, while surreptitious central bank intervention in the markets is setting the value of all capital, labor, goods, and services in the world, the first rule of financial journalism is that central banks are never to be questioned about anything important.
In any case GATA aims to continue its work on behalf of free and transparent markets and limited and accountable government. We’re a nonprofit educational and civil rights organization recognized as federally tax-exempt by the U.S. Internal Revenue Service, so financial contributions to GATA are federally tax-deductible. We’re also close to broke, so we would be especially grateful for any support from you now. Donations can be made through our Internet site, GATA.org.
Thanks for your kind attention.
end
Mark Winters has been a huge advocate for us as he has relentlessly complained to management on the silver manipulation. Today we see, First Majestic, a silver producer wishes to form a counter cartel against the silver manipulators.
(courtesy Futuremoneytrends/GATA) and special thanks to Mark Winters for his effort on this subject.
First Majestic CEO wants silver miners to form counter-cartel against futures shorters
Submitted by cpowell on Fri, 2014-10-24 05:14. Section: Daily Dispatches
12:10a CT Friday, October 24, 2014
Dear Friend of GATA and Gold:
First Majestic Silver CEO Keith Neumeyer, interviewed by Future Money Trends, argues that silver miners should form a counter-cartel to combat the investment houses selling silver short on futures markets. The interview is 16 minutes long and can be heard at Future Money Trends here:
http://www.futuremoneytrends.com/trend-videos/interviews/mining-ceo-seek…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Steve St Angelo of SRSRocco Report discusses the JPMorgan inventory fall:
(courtesy Steve St Angelo/SRSRocco
JP MORGAN GOLD INVENTORIES: Fall A Stunning 33% In One Day
– Posted Friday, 24 October 2014 | Share this article | 3 Comments
By Steve St. Angelo, SRSrocco Report
As the increasingly volatile stock markets bounced back higher today, JP Morgan experienced one of the largest withdrawals of gold from its inventories this year. In just one day, a stunning 321,500 oz of gold (10 metric tons) were removed from JP Morgan’s Eligible inventories.
Total gold inventories at JP Morgan fell 33% from 983,693 oz yesterday, to 662,193 today. Of course, this had to come from JP Morgan’s Eligible inventories, because there are only 176,436 oz of gold in their Registered inventories.
You will notice, that the amount is exactly 321,500 oz (10 metric tons) to the TEE… and as Harvey Organ and Bill Holter have commented, it’s extremely rare for a gold bar or series of gold bars to equal exactly 10 metric tons. Instead, we should see a fraction of an amount shown as an example in the MANFRA, TORDELLA & BROOKES gold transfer of 29,752.630 oz from the Registered category to Eligible.
Looks like this transfer was LEGIT as we can see the fraction of 0.630 oz shown in the transfer. I gather JP MORGAN feels that it doesn’t need to be bothered with accounting for these silly fractions, when they have to deal with much larger numbers such as the $70 trillion of Derivatives on their balance sheet.
It will be interesting to see if this 10 metric ton gold withdrawal from JP Morgan becomes an entry in one of the other Bank’s vaults in the next day or so. Or maybe, it’s on its way to CHINA or INDIA. Either way… just another interesting data point taking place as the broader stock markets continue to CONVULSE up and down like someone suffering from a HEART-ATTACK.
Please check back for new articles and updates at the SRSrocco Report. You can also follow us at Twitter below:
end
another nail in the coffin of the uSA dollar;
(courtesy Reuters/GATA)
Foreign central banks cut U.S. bond stakes to lowest since May
Submitted by cpowell on Fri, 2014-10-24 05:07. Section: Daily Dispatches
By Richard Leong
Reuters
Thursday, October 23, 2014
Foreign central banks slashed their holdings of U.S. Treasuries at the Federal Reserve to their lowest level since May, Fed data released on Thursday showed.
Analysts said the decline in U.S. government bond holdings likely stemmed from a combination of factors including booking profits on the recent rally in Treasuries, and the dollar which hit a four-plus year peak earlier this month.
“Some central banks might be selling dollars to arrest its rise against their currencies. While export-oriented countries typically like a stronger dollar, they don’t want it go up too fast because they could make some imports very expensive,” said Christopher Low, chief economist at FTN Financial. …
… For the remainder of the report:
http://www.reuters.com/article/2014/10/23/usa-fed-foreigners-idUSL2N0SI3…
end
Three commentaries for you tonight with Eric King. Pay attention to Celente with respect to the Swiss referendum
(courtesy Sperandeo, Celente, and Mauldin/Kingworldnews)
At King World News, Sperandeo, Celente, and Mauldin
Submitted by cpowell on Fri, 2014-10-24 15:00. Section: Daily Dispatches
9:55a CT Friday, October 24, 2014
Dear Friend of GATA and Gold:
At King World News, market analyst Victor Sperandeo says traders enjoy the current stock market because the Federal Reserve repeatedly has manipulated it back up:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/10/23_L…
Also at KWN, trends forecaster Gerald Celente says that the more governments try to keep their economies going with money creation, the more support will be given to the price of gold:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/10/24_C…
And market analyst John Mauldin says he expects powerful deflation and astonishing strength in the U.S. dollar:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/10/23_M…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end
Alasdair Macleod…
Markets and reality disconnected
By Alasdair Macleod
Posted 24 October 2014
The behaviour of financial markets these days is frankly divorced from reality, with value-investing banished.
Markets have become distorted by Rumsfeld-knowns such as interest rate policy and “market guidance”, and Rumsfeld-unknowns such as undeclared market intervention by the authorities. On top of these distortions there is remote investing by computers programmed with algorithms and high-frequency traders, unable to make human value-assessments.
Take just one instance of possible “market guidance” that occurred this week. On Thursday 16th October, James Bullard of the St Louis Fed hinted that QE might be extended. In the ensuing four trading sessions the Dow rallied over 5%. Was this comment sparked by signs of slowing economic growth, or by a desire to buoy up sliding equity markets? Then there is the vested interest of keeping government funding costs low, which raises the question whether or not exceptionally low bond yields, particularly in the Eurozone, are by design or accidental.
Those who support the theory that it is all an evil plot will also note that governments and their central banks through exchange stability funds (set up with the explicit purpose of market intervention), wealth funds and state pension funds have some $30 trillion to direct as they see fit. The reality is that there is intervention across a range of markets; but most of the mispricing is in the hands of private, not government investors. For evidence look no further than the record level of brokers’ loans to buyers of equities, who with greed worthy of a latter-day South-Sea Bubble seek to gear up their speculative profits.
These are not markets with widespread public participation, buying dot-coms and the like. Instead ordinary people have given their savings and pension funds to professionals who speculate on their behalf. It is the professionals who talk about the Yellen put, meaning the Fed simply won’t let prices fall significantly. We can fret about who is actually responsible for market distortions, instead we should ask who benefits.
Governments: in the past they have covered their debts through a process dubbed financial repression, when artificially low interest rates and bond yields were the principal mechanism whereby wealth is transferred from savers to the government. This process still goes on today. Forget government inflation figures: when did a bank deposit net of taxes last give a positive return after your cost of living increases?
Zero interest rate policy lays the process bare, and turns savers into borrowers. Mr Average has replaced savings with mortgages and car loans. And while the elderly and other passive savers are still defenceless against financial repression, the process has taken on a new twist. The transfer of wealth to governments now targets investment managers.
Investment and hedge funds we invest with together with the banks which take our deposits speculate on our behalf. They think that with a Yellen or Draghi put underwriting markets a ten-year government bond with a two per cent yield is an attractive investment. In doing so they are transferring financial resources to governments in a variation on old-fashioned financial repression.
Our dysfunctional markets have become little more than the essential prerequisite, as Louis XIV’s finance minister Colbert might have said, to plucking the goose for the largest amount of feathers with the minimum of hissing.
end
This is a thorn into the side of the USA dollar
Three major nations absent as China launches rival to Western development bank
Submitted by cpowell on Fri, 2014-10-24 13:32. Section: Daily Dispatches
By Brenda Goh
Reuters
Thursday, October 23, 2014
SHANGHAI — Australia, Indonesia, and South Korea skipped the launch of a China-backed Asian infrastructure bank on Friday as the United States said it had concerns about the new rival to Western-dominated multilateral lenders.
China’s proposed $50 billion Asian Infrastructure Investment Bank is seen as a challenge to the World Bank and Asian Development Bank, both multilateral lenders that count Washington and its allies as their biggest financial backers.
China, which is keen to extend its influence in the region, has limited voting power over these existing banks despite being the world’s second-largest economy. …
… For the remainder of the report:
http://www.reuters.com/article/2014/10/24/china-aiib-idUSL6N0SI26S201410…
end
Early Friday morning trading from Europe/Asia
1. Stocks mostly mixed on Asian bourses with the higher yen values to 108.13
2 Nikkei up 153 points or 1.01%
3. Europe stocks down/Euro down USA dollar index down at 85.81. Chinese bourse Shanghai down as the yuan slightly strengthens in value to 6.11808 per usa dollar/yuan.
3b Japan 10 year yield at .47%/Japanese yen vs usa cross now at 108.13/
3c Nikkei now below 15,000
3d Ebola in NY
3e Banking stress tests results on Sunday
/
3fOil WTI: 81.40 Brent: 86.11
3g/ Gold up/yen up; yen above 108 to the dollar/
3h Gold at $1237.00 dollars/ Silver: $17.07
4. USA 10 yr treasury bond at 2.24% early this morning.
5. Details Ransquawk/Bloomberg/Deutche bank/Jim Reid
(courtesy zero hedge)
Overnight Futures Fail To Ramp As Algos Focus On New York’s First Ever Ebola Case
Submitted by Tyler Durden on 10/24/2014 06:45 -0400
• BOE
• China
• Consumer Confidence
• Copper
• Crude
• Erste
• Eurozone
• Fail
• fixed
• France
• Fund Flows
• Germany
• Global Economy
• Goldman Sachs
• goldman sachs
• headlines
• Hong Kong
• Italy
• Jim Reid
• New Home Sales
• New York City
• Nikkei
• ratings
• recovery
• Reuters
• Sovereign Debt
• Volatility
inShare1
And just like that, the Ebola panic is back front and center, because after one week of the west African pandemic gradually disappearing from front page coverage and dropping out of sight and out of mind, suddenly Ebola has struck at global ground zero. While the consequences are unpredictable at this point, and a “follow through” infection will only set the fear level back to orange, we applaud whichever central bank has been buying futures (and the USDJPY) because they clearly are betting that despite the first ever case of Ebola in New York, that this will not result in a surge in Ebola scare stories, which as we showed a few days ago, may well have been the primary catalyst for the market freakout in the past month.
For those who missed events last night, a doctor in New York City who recently returned from treating Ebola patients in Guinea has become the first person in New York City to test positive for the virus. Officials told a press conference at Bellevue hospital that they were monitoring 4 people with whom Spencer had contact. His fiancée and two friends had been quarantined, while the fourth person, a taxi driver, was not considered to be at risk
So with Ebola roaring back, many are wondering if the same fears that sent the market turmoiling in late September and early October will also return, most prominently global commodity deflation, slamming the EMs. In this regard, commodity markets remain relatively tentative nonetheless, WTI crude futures trade in the red in a continuation of recent losses, with BofA seeing downside risks to WTI oil prices over the next three months. In terms of metal specific news, China’s copper production rose to a record high in September of 715,000 tonnes, an increase of 5% M/M and analysts at Goldman Sachs say that iron ore prices should remain supported in the short term, adding there is no obvious catalyst that would drive prices outside the recent range.
In other market news, Asian equities traded mostly higher, albeit off their best levels following notable weakness observed across US equity futures after confirmation that a patient who was being tested for Ebola in NYC tested positive for the disease. Nikkei 225 (+1%) shrugged off the negative sentiment seen across US futures with the index supported by yesterday’s movements in USD/JPY, positive Wall Street close and the WSJ report of potential further BoJ easing.
European equities opened in a sea of red as participants remained cautious regarding the overnight confirmation of the first Ebola case in NY which subsequently weighed on US equity futures. This sentiment proceeded to weigh on travel and leisure related names with consumer staples the underperforming sector in Europe, while a negative pre-market report for BASF (after they cut their 2015 EBITDA forecast) has also weighed on chemical names. The now traditional surge in the USDJPY at Europe open, as a result of central bank stabilization, managed to push US equity futures somewhat higher and well off their overnight lows.
The only thing on the US docket today is New Home Sales at 10:00 am.
Bulletin Headline Summary from Bloomberg and RanSquawk
• European equities trade in the red amid renewed concerns over Ebola after the first case in NY was confirmed overnight.
• GBP outperformed FX markets in European trade following the UK GDP release confirming the longest uninterrupted run of growth in three years, although GBP/USD has since pared these gains heading into the NA open.
• Looking ahead, today sees the release of US new home sales as well as a host of sovereign debt ratings including Germany, Italy, Spain, Russia and Austria all due for release.
• Treasuries gain, paring week’s decline, as equity-index futures fall after New York City doctor tests positive for Ebola, first case in most populous U.S. city.
• The doctor is being treated in an isolation unit at Bellevue Hospital Center in Manhattan; officials are monitoring those who were with him as he traveled on the subway, went bowling and had close contact with several people
• U.K. GDP rose 0.7% in 3Q vs 0.9% in 2Q, matching median estimate in Bloomberg survey; slowdown comes as BoE policy makers become more concerned about threats from the weakness in the euro area, Britain’s biggest trading partner
• Britain’s decades-long battle over the EU budget flared up again with Prime Minister Cameron resisting a call for the U.K. to pay more to finance the EU’s institutions in Brussels
• The U.K. Independence Party will test its ability to win over voters from across the political spectrum next week when it seeks to seize control of a police authority in the opposition Labour Party’s political heartland
• At noon in Frankfurt on Sunday, ECB plans to release results of its stress tests of currency bloc’s 130 biggest banks
• After two previous tests run by European Banking Authority didn’t reveal problems at lenders that later failed, the ECB has staked its reputation on getting the exercise right
• Denmark won’t back a proposal to split Europe’s biggest banks as the region’s first country to enforce bail-in rules questions the value of more regulation
• China’s new-home prices fell in all but one city monitored by the government last month as the easing of property curbs failed to stem a market downturn amid tight credit.
• Sovereign yields mostly lower. Asian stocks mixed, with Nikkei higher, Shanghai lower; European stock, U.S. equity- index futures fall. Brent crude falls 1.1%; copper gains, gold little changed
US Event Calendar
• 10:00am: New Home Sales, Sept., est. 470k (prior 504k)
• New Home Sales m/m, Sept., est. -6.8% (prior 18%
ASIA
JGBs traded up 12 ticks at 146.47 underpinned by spill-over buying in USTs on the US Ebola reports. Prices were further supported by the BoJ offering to buy JPY 1.05trl of government debt incl. JPY 400bln in 5-10yr maturities. Asian equities traded mostly higher, albeit off their best levels following notable weakness observed across US equity futures after confirmation that a patient who was being tested for Ebola in NYC tested positive for the disease. Nikkei 225 (+1%) shrugged off the negative sentiment seen across US futures with the index supported by yesterday’s movements in USD/JPY, positive Wall Street close and the WSJ report of potential further BoJ easing.
FIXED INCOME & EQUITIES
European equities opened in a sea of red as participants remained cautious regarding the overnight confirmation of the first Ebola case in NY which subsequently weighed on US equity futures. This sentiment proceeded to weigh on travel and leisure related names with consumer staples the underperforming sector in Europe, while a negative pre-market report for BASF (after they cut their 2015 EBITDA forecast) has also weighed on chemical names.
Nonetheless, the periphery has provided some light at the end of the tunnel for European stocks with the FTSE MIB the notable outperformer following Italian press reporting that Banca Monte dei Paschi would not sell stock to fill any potential capital shortfall. However, an Italian Banks Association Official said it will not be simple to interpret results of ECB stress tests and they could lead to market volatility. Elsewhere in Europe, equities still remain in the red, which has subsequently supported fixed income products, albeit amid particularly light volumes (173k in the Bund).
In terms of major US stocks news, focus will be on Microsoft and Amazon after their after-market updates, with Microsoft seen higher after-market and Amazon lower. Attention will also turn towards Pfizer after they authorized a new USD 11bln share buyback program.
FX
In FX markets, GBP/USD was the notable outperformer following the UK advanced Q3 GDP release, which came in-line with expectations (Q/Q 0.7% vs. Exp. 0.7%) but provided some relief to those who had been looking for a lower reading, in line with the recent slew of weak UK data. The ONS also said the release marked the longest uninterrupted run of growth in three years, which subsequently saw GBP/USD break above yesterday’s highs of 1.6060 after tripping stops, although has since pared some of these gains. The RUB has continued to weaken in European trade ahead of the S&P’s rating announcement for the country and following RBS’ forecast yesterday that the sovereign would be cut to junk.
COMMODITIES
Commodity markets remain relatively tentative with all attention now turning towards how the US will react to the confirmation of the overnight news of the first case of Ebola in New York. Nonetheless, WTI crude futures trade in the red in a continuation of recent losses, with BofA seeing downside risks to WTI oil prices over the next three months. In terms of metal specific news, China’s copper production rose to a record high in September of 715,000 tonnes, an increase of 5% M/M and analysts at Goldman Sachs say that iron ore prices should remain supported in the short term, adding there is no obvious catalyst that would drive prices outside the recent range.
* * *
DB’s Jim Reid concludes the overnight recap
The gyrations of markets are much easier to fathom these days and after a week of a spectacular recovery in risk we thought it would be interesting to start with the latest flow numbers in HY which came out overnight. Overall it seem HY fund flows at the moment are following the (expected) future growth as US funds saw inflows whilst Western European funds suffered another week of outflows. Per EPFR’s data, the US HY mutual funds saw their strongest week since mid-August with $2bn of inflows. This came after outflows last week of $863m. The picture in Western European funds was far less positive, as they experienced $432m of outflows, the 4th week of negative numbers in row. It will be interesting to see whether yesterday’s PMI’s have any impact on these patterns.
Indeed trading over the last 24 hours has been dominated by the flash PMIs. The day began with the Japanese and Chinese manufacturing PMI’s both coming in ahead of expectation at 52.8 and 50.4 respectively. The bigger market moving numbers though came from the European and US releases later in the day. Whilst the European numbers began disappointingly with a much weaker than expected 47.3 French manufacturing PMI, the stronger than expected 51.8 German manufacturing equivalent managed to turn sentiment around. This was followed by the Eurozone manufacturing PMI which also came in ahead of expectation at 50.7 (49.9 expected). Later in the day the weaker than expected US manufacturing PMI read of 56.2 (vs 57 expected) did not harm sentiment.
At the end of today’s PDF we include our PMI vs equity table again which we’ve now updated for the new European and Asian reads. As we discussed yesterday we generally view this analysis as a guide rather than anything more serious. The main developments given yesterday’s data and market moves are in the European market where Germany has gone from looking relatively ‚fair value? to now being roughly 8% ‚undervalued? thanks to yesterday’s stronger PMI. On the flip side, France has gone from being about 2% ‚undervalued? to now being around 4% overvalued.
Markets reacted very positively to these PMI developments. In Europe the Stoxx 600 rallied +0.7% whilst the Euro Stoxx was up 1.2%. The credit reaction was slightly more muted as iTraxx Main and Xover both tightened by -1bp. US markets were also strong with the S&P500 ending the day up +1.3% whilst in credit CDX IG and HY tightened by -2bps and -10bps respectively. Govvies struggled in the risk-on environment – the Germany and US 10Y rose +3bps and +6bps respectively.
Also helping markets yesterday were relatively upbeat results with Caterpillar a big focus. DB’s Alan Ruskin had an interesting comment yesterday on their Q3 results. He wrote how, “for those looking at Caterpillar’s Q3 results and drawing positive things about the global economy, the actual detail showed a world distinctly lacking in balance, with N.America doing all the ‘heavy lifting’ while China’s and Latam’s comparisons are notably weak.? He pointed out a number of comments in Caterpillar’s Q3 Earnings Release including their statement that they, “expect the Chinese construction machine industry to remain challenged in the near future,” on the one hand whilst on the other they noted how, “sales decreases in Asia/Pacific and Latin America were about offset by increases in North America.” These comments chime in well with the IMF’s last global economic forecasts, which also stressed the role of the US in lifting global growth rates going forward. No pressure then.
Headlines this morning are dominated by the news that overnight a doctor in New York has tested positive for Ebola, the first diagnosed case in the city. S&P futures are trading -0.5% lower as we go to print on the back of this and Asian markets are generally mixed with bourses in Hong Kong, China and Korea moving -0.3%, +0.2% and -0.5% respectively whilst the Nikkei (up +0.8%) is the standout performer on the back of a 0.7% weakening of USDJPY yesterday during European and US trading times . Sentiment hasn’t been helped as China reported disappointing house price data as average prices declined 1.0% relative to August marking a fifth consecutive monthly drop. Meanwhile in Korea, Q3 GDP came in line versus expectations at 0.9% QoQ.
Looking to the day ahead, in Europe we have the November GfK consumer confidence read (expected in at 8), UK advanced Q3 GDP (expected in at +0.7% QoQ) and Italian September wage growth data. Over in the US we have September new home sales (expected in at -6.8% MoM).
Importantly, banks will find out the results of the AQR tests today with the results made public at noon on Sunday. Earlier in the week we had reports from Spanish news source Efe that eleven banks across five nations had supposedly failed the tests including Erste Bank, Banco Popolare and Dexia. However this has been quickly downplayed with a Reuters article quoting an Erste Bank spokesman as saying “Out of the supervisory dialogue we have no indication we won’t pass”. The article also quotes positive comments from senior Cypriot and Spanish officials over confidence that their respective domestic banks should fare well through the tests whilst a further article mentions that the German Bank most at risk of failing, HSH Nordbank, is set to meet the requirements. This will dominate the headlines before Monday morning but don’t be surprised to see more leaks today ahead of this.
end
The Chinese housing bubble burst which leads to its first annual price decline since 2012.
Housing in China is equivalent to the stock market in the USA. It is 80% of GDP.
(courtesy zero hedge)
Burst Chinese Housing Bubble Leads To First Annual Price Decline Since 2012; Prices Drop In Record 69 Cities
Submitted by Tyler Durden on 10/24/2014 08:04 -0400
• Bank of America
• Bank of America
• Central Banks
• China
• DRC
• Hong Kong
• Housing Bubble
• Housing Market
• Reuters
• SocGen
inShare1
It has been over six months since the Chinese housing bubble has popped. What’s worse, as overnight housing numbers out of China confirmed, the government has so far failed to contain the fallout, and according to the National Bureau of Statistics, which is anything but, after a fifth straight monthly decline, Chinese home prices have now wiped out all price gains in the past year. This was immediately spun as bullish by media outlets and sellside experts as “raising expectations the government will have to implement more economic support measures to cushion the blow.” I.e., buy stocks because central banks will push risk prices artificially higher yet again. In other words, bad is still good and failure continues to be success.
According to the NBS, average home prices in 70 major Chinese cities were down 1.3% in September from a year earlier, the first such drop since November 2012.
As compiled by Reuters, new home prices fell month-on-month in a record 69 of the 70 major cities, up from 68 in August. Only the southern city of Xiamen saw stable prices last month, National Bureau of Statistics (NBS) data showed.
The worst performance was in the eastern city of Hangzhou, where prices sagged 7.6 percent in September from a year before.
The decelerating property market, which accounts for about 15 percent of China’s economy, has crimped demand in 40 sectors ranging from steel to cement and furniture.
Actually, no. According to SocGen, “the aggregate exposure of China’s financial system to the property market is likely to be as much as 80% of GDP.” Which is why as we said in May, “this is not a sector that can go terribly wrong if China wants to avoid a hard landing.”
But much more importantly, when it comes to net worth, what the stock market is to the US, housing is to China, as we have also shown previously.
It is in this context that one can’t help but laugh at thefollowing consensus forecast that has just China and the US as accountable for virtually all the growth in 2015:
Because until and unless China manages to arrest its tumbling housing market, which now is a net drag on net worth over the past year, one can kiss about $1 trillion in “GDP growth” in 2015 goodbye.
Some other observations on the Chinese housing market. From Reuters:
“The property downturn is still the main drag on the economy,” Wang Tao, an economist at UBS in Hong Kong, said in a note.
“The negative impact of the ongoing property downturn is being felt not only in heavy industry, but also in manufacturing investment.”
The slowdown in the housing market followed GDP data showing the economy grew at its slowest rate since the 2008/2009 global financial crisis in the September quarter, adding to worries that it will drag on global growth.
Yu Bin, a senior economist at the Development Research Centre (DRC), the cabinet’s think tank, said on Friday it expected China’s economy would grow by 7.4 percent this year, slightly below the government’s target of 7.5 percent. That would be the slowest pace in 24 years.
And some more from Bank of America:
Prices of new commodity residential properties for 70 medium-to-large-sized cities surveyed by the National Bureau of Statistics (NBS) declined by 1.2% yoy in September compared with 0.5% growth in August. The number of cities with higher home prices mom was 0 in September, down one from 1 in August, while the number of cities with lower home prices mom was 69 in September, up one from 68 in August. Moreover, the number of cities with lower home prices yoy jumped to 58 in September from 19 in August.
In September, Soufun’s 100-city average new home price index rose by 1.1% yoy compared to 3.2% in August. Divergence in home price growth narrowed slightly among the different tiers of cities. September new home price growth was 5.4%, – 0.4% and -2.8% yoy, respectively for Tier-1, Tier-2 and Tier-3 cities, down from 8.0%, 1.1% and -1.3% yoy in August.
National average sale prices (ASP) of new homes was RMB5,987/sqm in September, down by 0.6% yoy compared to 1.1% decline recorded for August
Vacant residential GFA waiting for sale increased by 6.3 mn sqm in September, up from 5.9 mn sqm in August. According to the NBS data, completed unsold residential inventory stood at 376mn sqm, which is equivalent to 4.0 months of inventory, based on the average monthly sales volume in the past 12 months.
Perhaps it is time for China to take a page out of Europe’s playbook and to add the price of hookers and cocaine when calculating the blended average price of an apartment…
end
Looks like Hollande will spar with the German Minister Schaueble:
(courtesy zero hedge)
French Unemployed Hits Record High, Hollande Demands EU Budget “Must Be Adapted”
Submitted by Tyler Durden on 10/24/2014 12:12 -0400
• France
inShare6
France’s President Francois Hollande states confidently that “everyone should respeoct treaties,” then ‘Junckers’ it with this stunningly hypocritical bullshit, “budget rules must be adapted” to support growth and France “has done what it has to do” on its deficit… one glance at the following chart suggests that Hollande has done nothingand has been enabled by Draghi… What a farce!!
So:
• *HOLLANDE SAYS `EVERYONE’ SHOULD RESPECT TREATIES
• *HOLLANDE SAYS FRANCE RESPECTS DEFICIT TREATY WITH FLEXIBILITY
But:
• *HOLLANDE SAYS FRANCE `HAS WORK TO DO ON REFORMS’
• *HOLLANDE SAYS COUNTRIES WITH SURPLUSES SHOULD SUPPORT DEMAND
• *HOLLANDE SAYS BUDGET RULES `MUST BE ADAPTED’ TO SUPPORT GROWTH
• *HOLLANDE SAYS FRANCE HAS `DONE WHAT IT HAS TO DO’ ON DEFICIT
How long before Schaeuble explodes?
end
Putin warns the West of two major points:
i) the USA dollar is losing its reserve status
ii) a major conflict is approaching!!
(courtesy zero hedge)
Putin Warns Of Risk Of Major Conflict, Says Dollar Losing Reserve Currency Status
Submitted by Tyler Durden on 10/24/2014 14:06 -0400
• Abu Dhabi
• Cohen
• Middle East
• national security
• Reserve Currency
• Ukraine
• World Trade
inShare10
Having been relatively quiet for a while, Russia’s leader Vladimir, speaking in Sochi (following meetings with Middle East crown princes who confirmed Russia as a key partner – “isolated”?), has unleashed his most aggressive statements with regard the failing world order:
• *PUTIN SAYS U.S. DOLLAR LOSING TRUST AS RESERVE CURRENCY
• *PUTIN: WORLD WITHOUT RULES IS POSSIBILITY; ANARCHY GROWING
Adding that the risk of major conflicts involving major countries is growing, as well as the risk of arms control treaties being violated, Putin exclaimed that the US-led unipolar world is like a dictatorship over other countries and that “US leadership brings no good for others,” and calls for a new global consensus.
Having met Crown Prince Al Nahyan of Abu Dhabi in Sochi, who confirmed that Moscow “plays a very important role in the Middle East,” and added that he had no doubts that his country and Russia “arebound by a privileged relationship,” it appears Russia is less “isolated” than the West would have many believe.
As Bloomberg reports:
• *PUTIN SPEAKS AT MEETING OF VALDAI CLUB IN SOCHI
• *PUTIN SAYS WORLD GROWING LESS SECURE, PREDICTABLE
• *PUTIN SAYS NO GUARANTEE OF GLOBAL SECURITY
• *GLOBAL SECURITY SYSTEM IS WEAK, DEFORMED: PUTIN
• *COLD WAR ENDED WITHOUT PEACE BEING ACHIEVED: PUTIN
• *PUTIN SAYS COLD WAR `VICTORS’ DISMANTLING INTL LAWS, RELATIONS
• *U.S. HAS WORSENED DISBALANCE IN INTL RELATIONS: PUTIN
• *PUTIN SAYS U.S. ACTING LIKE NOUVEAU RICHE AS GLOBAL LEADER
• *PUTIN SAYS WORLD LEADERS BEING BLACKMAILED BY `BIG BROTHER’
• *U.S. LEADERSHIP BRINGS NO GOOD FOR OTHERS: PUTIN
• *PUTIN SEES GLOBAL MEDIA UNDER CONTROL, UNDERMINING TRUTH
• *PUTIN SAYS WEST CLOSED EYES TO INTL TERRORISM ENTERING RUSSIA
• *PUTIN CALLS U.S. SELF-APPOINTED LEADER
• *PUTIN: UNIPOLAR WORLD LIKE DICTATORSHIP OVER OTHER COUNTRIES
• *PUTIN SAYS MANY COUNTRIES DISENCHANTED W/ GLOBALIZATION: PUTIN
• *PUTIN SAYS U.S. DOLLAR LOSING TRUST AS RESERVE CURRENCY
• *RUSSIA WON’T BEG FOR ANYTHING: PUTIN
• *SANCTIONS UNDERMINING WORLD TRADE ORGANISATION RULES: PUTIN
• *RUSSIA ISN’T WALLING ITSELF OFF FROM WORLD, PUTIN SAYS
• *RUSSIA READY FOR DIALOGUE ON NORMALIZING ECONOMIC TIES: PUTIN
• *PUTIN: WORLD WITHOUT RULES IS POSSIBILITY; ANARCHY GROWING
• *PUTIN CALLS FOR NEW GLOBAL CONSENSUS, INTERDEPENDENCE
• *PUTIN: CONTINUED USE OF FORCE IN UKRAINE MAY LEAD TO DEAD END
• *PUTIN SAYS U.S. CAN’T HUMILIATE ITS PARTNERS FOREVER
* * *
Fighting talk?
* * *
Escalation? It seems sabre-rattling is picking up as The Washington Times reports,
Russian military provocations have increased so much over the seven months since Moscow annexed Crimea from Ukraine that Washington and its allies are scrambling defense assets on a nearly daily basis in response to air, sea and land incursions by Vladimir Putin’s forces.
Not only is Moscow continuing to foment unrest in Eastern Ukraine, U.S. officials and regional security experts say Russian fighter jets are testing U.S. reaction times over Alaska and Japan’s ability to scramble planes over its northern islands — all while haunting Sweden’s navy and antagonizing Estonia’s tiny national security force.
“What’s going on is a radical escalation of aggressive Russian muscle flexing and posturing designed to demonstrate that Russia is no longer a defeated power of the Cold War era,” says Ariel Cohen, who heads the Center for Energy, National Resources and Geopolitics at the Institute for the Analysis of Global Security in Washington.
“The more we retreat, the more we are encouraging Russia to behave in a more aggressive way,” Mr. Cohen said. “We need to be engaging more deeply with our Central Asian allies, but instead we are in the process of abandoning turf to Russia, and it’s wrong — it’s against our interests geopolitically to let Russia feel that they all of a sudden have won all the turf without firing a shot.”
end
The reason for all bourses being up today:
two reports:
(courtesy zero hedge)
First:
Market Jumps On Today’s Central Bank Verbal Plunge Protection, Courtesy Of Mario Draghi
Submitted by Tyler Durden on 10/24/2014 11:02 -0400
• headlines
• Recession
inShare2
One has to laugh: if stocks are selling off, then trot out the daily central banker headline urging to BTFD.
Sure enough, just as the market was about to roll over moments after today’s abysmal housing data revisions were released, what happens? The usual central banker “verbal plunge protection”, this time courtesy of ECB’s Mario Draghi and the following Bloomberg headlines:
• DRAGHI CALLS FOR STIMULUS: CNBC
• DRAGHI SAYS JOINT EFFORT NEEDED TO AVOID RECESSION: CNBC
• DRAGHI SAYS INFLATION TO REMAIN LOW IN THE NEAR TERM
Next: algos headline scan “Draghi” and “Stimulus” and the rest is levitation history.
end
Second report:
(courtesy zero hedge)
Market Jumps On Today’s Central Bank Verbal Plunge Protection, Courtesy Of Mario Draghi
Submitted by Tyler Durden on 10/24/2014 11:02 -0400
• headlines
• Recession
inShare2
One has to laugh: if stocks are selling off, then trot out the daily central banker headline urging to BTFD.
Sure enough, just as the market was about to roll over moments after today’s abysmal housing data revisions were released, what happens? The usual central banker “verbal plunge protection”, this time courtesy of ECB’s Mario Draghi and the following Bloomberg headlines:
• DRAGHI CALLS FOR STIMULUS: CNBC
• DRAGHI SAYS JOINT EFFORT NEEDED TO AVOID RECESSION: CNBC
• DRAGHI SAYS INFLATION TO REMAIN LOW IN THE NEAR TERM
Next: algos headline scan “Draghi” and “Stimulus” and the rest is levitation history.
end
A leak states that 25 banks failed the European stress test and 10 are in talks on a capital shortfall
I will bet that in reality it is far worse than what they will show:
(courtesy zero hedge)
25 Banks Said To Fail European Stress Test, 10 In Talks On Capital Shortfall
Submitted by Tyler Durden on 10/24/2014 08:49 -0400
• Deutsche Bank
• Fail
• George Soros
• Reuters
• Stress Test
inShare10
With the results of Europe’s annual AQR, aka Stress Test, due out on Sunday, most had been expecting that despite some rhetoric that various brand name banks may fail, that it would be largely more of the usual: puff. That, however, may not be the case, and as Bloomberg just reported, a whopping 25 banks are set to fail the stress test, compared to 105 which are set to pass. As Bloomberg notes:
• 105 banks passed the test, draft document shows
• Number of banks that would have shortfall even after capital-raising to Sept. 30, 2014, is the subject of ongoing talks, a person with knowledge of the matter says
• Negotations continue with about 10 banks shown to have net shortfall after 2014 capital measures, the person says
• An ECB spokesman says the central bank can’t comment on speculation about the outcome of the comprehensive assessment. Any inferences drawn as to the final outcome of the exercise would be highly speculative until the results are final on Oct. 26, spokesman says
Note: the outcome is fluid and somehow still pending negotiation, some 48 hours before the announcement. How that makes the test any more credible is beyond our meager comprehension skills. More importantly, as we noted earlier, stress test failures means more ECB bailouts. Which is, of course, bullish.
Then again, some bad news for the panic-buying vacuum tubes – contrary to some expectations, notably the Fed’s, Deutsche Bank will not get a multi-trillions bailout and in the process make George Soros a trillionaire: from Reuters:
• Deutsche Bank Set To Achieve 8.8 Percent Core Tier One Capital Ratio In Ecb’s Adverse Stress Test Scenario – Sources
• Deutsche Bank Set To Achieve 12.6 Percent Core Tier One Capital Ratio In Ecb’s Baseline Stress Test Scenario – Sources
• Deutsche Bank Declines To Comment
But apparently has no problem leaking.
end
Spanish citizens just got introduced to Wall Street bankers:
(courtesy zero hedge/Mike Krieger)
Spanish Tenants Wake Up To The Horror Of A Wall Street Landlord
Submitted by Tyler Durden on 10/24/2014 17:48 -0400
• Central Banks
• Corruption
• Free Money
• Germany
• Goldman Sachs
• goldman sachs
• Private Equity
• Real estate
• Reality
• recovery
• Reuters
• Unemployment
inShare1
Having grown weary of reality in America (after becoming the biggest landlord in the land of the free to borrow cheaply), Wall Street moved into the distressed property purchase ponzi in Spain (as we noted here) and, surprise, the Spanish are not happy with their new slumlords. AfterMadrid’s local government sold 5,000 rent-controlled apartments to Goldman and Blackstone, having told tenants their rental conditions would remain the same, dozens of people have received demands for higher rent, been told their rents will increase dramatically, been threatened with eviction or moved out to escape the insecurity as old contracts expire.
As Reuters reports,
Last year Madrid’s city and regional governments sold almost 5,000 rent-controlled flats to private equity investors including Goldman Sachs and Blackstone. At the time, the tenants were told their rental conditions would remain the same.
But as old contracts expire, dozens of people have received demands for higher rent, been told their rents will increase dramatically, been threatened with eviction or moved out to escape the insecurity. Thousands of Spain’s poor now depend for their homes on the generosity of private equity.
…
In the buildings sold to the funds, Reuters has spoken to more than 40 households who face similar difficulties. They include some of Madrid’s most vulnerable people: an unemployed single mother of five with a severely disabled daughter, for example, and an HIV patient with one lung. Both faced evictions that were temporarily halted at the last minute.
There is no suggestion the buyers have acted illegally. Having bought around 15 percent of Madrid’s publicly held social housing, the new owners are simply exercising their right to charge commercial rents once reduced rents that tenants have paid expire.
However, Socialist councillors in Madrid have launched lawsuits directed at the state bodies that sold the rent-controlled homes, and tenants meet weekly to organize street protests. Evictions ordered and postponed by the new owners are an increasingly common sight in Spain’s media.
For the private equity firms that bought the flats, the deal was good business. For tenants, less so.
The public-sector real estate workout is creating winners and losers. Spain needs new investment to put a floor under its property market – a necessary condition for a broader recovery – and at the same time its social safety net needs funds. Economist Miguel Hernandez said foreign investors play an important role by providing cash to public institutions.
“These funds may appear to be acting like vultures, but they are also helping the system, because the administrations had very few options to get the cash they needed,” said Hernandez, professor at IE Business School.
…
Six sources involved in the bidding process told Reuters that bidders knew the straitened circumstances of the tenants. The funds that entered final bidding – nine in all – were given detailed information. The sale terms, seen by Reuters, show the regional government stressed that the new owners must honor all the tenants’ rights and obligations.
Goldman went for the Madrid homes after a successful pair of similar deals in Germany, a person familiar with the matter said.Goldman looked at the profiles of the tenants and considered whether the properties were “under-managed from a yield perspective” and whether new ownership could “improve rents.”
Read more here…
Here is Mike Krieger explaining how it works…
See how this game works? Financial oligarchs always get access to free money from Central Banks, as well as discounts during privatizations, and then turn around and demand the plebs pay the market rate.
Unemployed hairdresser and mother-of-three Yasmin Rubiano lives in a flat now owned by Goldman and Azora. Rubiano said she stopped getting a printed rent bill once her reduced rent of 50 euros per month ended in December, but got no word from the new owners.
In January she started to receive monthly text messages from her bank, which she showed a reporter, advising that it had received a demand for 498.18 euros. She has been paying 100 euros a month to show goodwill, but cannot pay more. In March, Rubiano said, she received a letter from Encasa Cibeles demanding full payment or threatening legal action.
On Aug. 6, the 20 tenants in Arriba’s block signed new contracts with Fidere, some of them seen by Reuters, which stipulate a rise of more than 40 percent in rent over three years. Blackstone referred inquiries to Fidere.
Some local politicians say IVIMA acted illegally by selling the flats cheap. IVIMA Director Ana Gomendio declined to comment.
Wolves will always eat sheep, and until the sheep decide enough is enough, the wolves will continue to feast.
* * *
The irony, of course, is that Spain has been boasting about its housing recovery because Blackstone and Goldman have been buying cheap real estate hand over first. The problem is that now they are sending out the eviction notices. Let’s see how this works out for Rajoy…
With youth unemployment at record highs, corruption allegations against the Prime Minister, and regions seeking secession, it appears Goldman and Blackstone may be just the tinder to start more social unrest as reality starts to bite that a recovery never happened.
end
Another banker suicide: this one in Tel Aviv:
(courtesy zero hedge)
Banker Suicides Return: DSK’s Hedge Fund Partner Jumps From 23rd Floor Apartment
Submitted by Tyler Durden on 10/24/2014 10:53 -0400
• Belgium
• Capital Markets
• China
• Corporate Finance
• Deutsche Bank
• Dominique Strauss-Kahn
• Eastern Europe
• France
• Hong Kong
• International Monetary Fund
• Israel
• Newspaper
• Romania
• Switzerland
• Tata
inShare9
The summer, thankfully, has been largely bereft of the dismal trend of bankers committing suicide, but as Bloomberg reports, Thierry Leyne, a French-Israeli banker and partner of Dominique Strauss-Kahn, the disgraced former chief of the IMF, was found dead Thursday after apparently taking his own life by jumping off the 23rd floor of one of the Yoo towers, a prestigious residential complex in Tel Aviv. This is the 16th financial services executive death this year.
Bloomberg reports that Thierry Leyne, the French-Israeli entrepreneur who last year started an investment firm with former International Monetary Fund Managing Director Dominique Strauss-Kahn, has died. He was 48.
Leyne died yesterday in Tel Aviv, according to his assistant at the firm, who asked not to be identified. Le Figaro newspaper reported that he committed suicide.
Last year, Leyne joined Strauss-Kahn in establishing the Paris-traded firm Leyne, Strauss-Kahn & Partners after the former IMF head bought a 20 percent stake to help develop the investment-banking franchise of Leyne’s company, Luxembourg-based Anatevka SA. Leyne had taken Anatevka public in March 2013 before joining forces with Strauss-Kahn, commonly referred to in France as DSK.
The new partnership — usually called LSK & Partners by using both men’s initials — waspart of Strauss-Kahn’s efforts to rebuild his post-IMF life after he was charged in 2011 of criminal sex, attempted rape, sexual abuse, unlawful imprisonment and the forcible touching of a chambermaid at the Sofitel hotel in Manhattan. Strauss-Kahn denied the charges, which were later dropped. He settled the maid’s lawsuit in 2012.
And NYTimes adds,
Mr. Leyne, 48, jumped off the 23rd floor of one of the Yoo towers, a prestigious residential complex, according to Israeli officials.
Leyne’s Background:
Leyne, who resided in Tel Aviv, built his career as a financier in France, Israel and Luxembourg. He founded the investment firm Assya Capital in 1994 and listed it on Euronext in Paris in 2001. Leyne merged the business with Global Equities Capital Markets in 2010 to provide financial advice and private banking to clients in eastern Europe, Le Figaro reported.
Anatevka, which had a market value of 50 million euros ($63 million) when Strauss-Kahn purchased his stake, controlled the merged entity, known as Assya Compagnie Financiere, offering asset management, brokerage, corporate finance and capital investment. Anatevka had a staff of about 100 people in six countries — Luxembourg, Belgium, Monaco, Israel, Switzerland and Romania — in September 2013.
In 1996, Leyne founded the company Axfin, one of the first independent investment firms in France, according to the website of Assya Capital. Axfin listed on the Paris stock exchange in 1999 before it was bought by Nuremberg, Germany-based Consors Discount Broker AG. Leyne was the supervisory board chairman of Consors France until the end of 2002.
Leyne was born in September 1965, according to French public records. He held French and Israeli citizenship, Figaro said. He had an engineering degree from the Israel Institute of Technology in Haifa, his LinkedIn profile shows.
* * *
This is the 16th financial services executive death this year…
1 – William Broeksmit, 58-year-old former senior executive at Deutsche Bank AG, was found dead in his home after an apparent suicide in South Kensington in central London, on January 26th.
2 – Karl Slym, 51 year old Tata Motors managing director Karl Slym, was found dead on the fourth floor of the Shangri-La hotel in Bangkok on January 27th.
3 – Gabriel Magee, a 39-year-old JP Morgan employee, died after falling from the roof of the JP Morgan European headquarters in London on January 27th.
4 – Mike Dueker, 50-year-old chief economist of a US investment bank was found dead close to the Tacoma Narrows Bridge in Washington State.
5 – Richard Talley, the 57 year old founder of American Title Services in Centennial, Colorado, was found dead earlier this month after apparently shooting himself with a nail gun.
6 – Tim Dickenson, a U.K.-based communications director at Swiss Re AG, also died last month, however the circumstances surrounding his death are still unknown.
7 – Ryan Henry Crane, a 37 year old executive at JP Morgan died in an alleged suicide just a few weeks ago. No details have been released about his death aside from this small obituary announcement at the Stamford Daily Voice.
8 – Li Junjie, 33-year-old banker in Hong Kong jumped from the JP Morgan HQ in Hong Kong this week.
9 – James Stuart Jr, Former National Bank of Commerce CEO, found dead in Scottsdale, Ariz., the morning of Feb. 19. A family spokesman did not say whatcaused the death
10 – Edmund (Eddie) Reilly, 47, a trader at Midtown’s Vertical Group, commited suicide by jumping in front of LIRR train
11 – Kenneth Bellando, 28, a trader at Levy Capital, formerly investment banking analyst at JPMorgan, jumped to his death from his 6th floor East Side apartment.
12 – Jan Peter Schmittmann, 57, the former CEO of Dutch bank ABN Amro found dead at home near Amsterdam with wife and daughter.
13 – Li Jianhua, 49, the director of China’s Banking Regulatory Commission died of a sudden heart attack
14 – Lydia _____, 52 – jumped to her suicide from the 14th floor of Bred-Banque Populaire in Paris
15 – Julian Knott, 45 – killed wife and self with a shotgun in Jefferson Township, New Jersey
16 – Thierry Leyne, 48 – jumped from 23rd floor apartment in Tel Aviv.
end
We have a new confirmed Ebola in the uSA and it is in New York City:
(courtesy zero hedge)
New York City Doctor Confirmed Positive For Ebola, Girlfriend In Quarantine; Cuomo/De Blasio Press Conf – Live Feed
Submitted by Tyler Durden on 10/23/2014 14:59 -0400
• BATS
• Belgium
• Detroit
• fixed
• headlines
• Michigan
• NASDAQ
• Nasdaq 100
• NBC
• New York City
• New York State
• New York Times
• recovery
• SPY
inShare10
UPDATE:
• *PATIENT IN NYC TESTS POSITIVE FOR EBOLA, NEW YORK TIMES SAYS
• *NYC EBOLA PATIENT GIRLFRIEND QUARANTINED: CNN
• *S&P 500, NASDAQ 100 FUTURES EXTEND DECLINES ON EBOLA REPORT
• *TREASURIES ADVANCE AS NYC EBOLA REPORT SPURS DEMAND FOR SAFETY
the following lead to a press conference.
Here is what was said:
Headlines from the press conference:
De Blasio:
• *TESTING CONFIRMS PATIENT IS POSITIVE FOR EBOLA: DE BLASIO
• *NYC HAS PREPARED FOR MONTHS FOR THREAT FROM EBOLA: DE BLASIO
• *BELLEVUE HOSPITAL IN NYC IS A DESIGNATED EBOLA CENTER
• *EVERY HOSPITAL IN NYC PREPARED FOR PATIENTS: DE BLASIO
Cuomo: “There is no reason for New Yorkers to be alarmed”
• *NYC HAD BENEFIT OF LEARNING FROM DALLAS: CUOMO
• *EBOLA PATIENT HAD WORKED WITH DOCTORS WITHOUT BORDERS: CUOMO
• *NEW YORK `FULLY COORDINATED WITH AGENCIES, U.S. GOV.: CUOMO
• *HAVE IDENTIFIED 4 PEOPLE IN CONTACT WITH EBOLA PATIENT: CUOMO
• *HEALTH OFFICIALS IN CONTACT WITH THOSE IDENTIFIED: CUOMO
Mary Basset – NYC Health Commissioner
• *HOSPITAL EBOLA TEST TO BE CONFIRMED BY CDC WITHIN 24 HRS
• *EBOLA PATIENT RETURNED TO NYC FROM GUINEA THIS MONTH: BASSETT
• *EBOLA PATIENT HAD SYMPTOMS BEGIN EARLIER TODAY: BASSETT
• *NYC EBOLA PATIENT LEFT GUINEA ON OCT. 14: BASSETT
• *NYC EBOLA PATIENT HAD FIRST FEVER SYMPTOM TODAY: BASSETT
• *NYC EBOLA PATIENT WENT ON 3-MILE JOG: BASSETT
• *NYC EBOLA PATIENT WENT TO BOWLING ALLEY YESTERDAY: BASSETT
• *EBOLA PATIENT USED SUBWAYS, WENT TO BOWLING ALLEY: BASSETT
• *EBOLA PATIENT HAD CONTACT WITH GIRLFRIEND, 2 FRIENDS: BASSETT
• *TRANSPORTATION DRIVER NOT THOUGHT TO BE AT RISE: BASSETT
• *UBER DRIVER IN CONTACT W/ PATIENT CONSIDERED NOT AT RISK
Zucker – Acting health commissioner:
• *EBOLA PATIENT BROUGHT TO HOSPITAL WITH PROTECTIVE GEAR
• *EBOLA PATIENT IN SPECIAL ISOLATION UNIT AT BELLEVUE HOSPITAL
• *ZUCKER SAYS WE LOOK FWD TO QUICK RECOVERY FOR EBOLA PATIENT
The market’s reaction…
end
Then today: Great procedures guys!!
(courtesy zero hedge)
NYPD Stunner: Cops Exit Ebola Victim Apartment, Dump Gloves, Masks In Sidewalk Trash Can
Submitted by Tyler Durden on 10/24/2014 09:11 -0400
inShare30
If there was one theme from last night’s Cuomo/De Blasio Ebola press conference it was ‘how everyone has been preparing for months’ for Ebola. We can all be reassured, right? Wrong! As The Daily Mail reports (and these stunning photos show), the police officers involved in securing Dr. Spencer tossed their gloves, masks and the caution tape used to block off access to his apartment in a public trash can.
Not just any trash can, but one on a public street corner…
While it is unclear whether the police entered the apartment (which is now locked down and isolated), some are suggesting that for the sake of safety – not to mention public sanity – it would have made sense to discard of these masks and gloves and tape in a biohazard bag.
* * *
Seems like not everyone has been preparing for months (since August) for Ebola… no matter, we are all assured by Cuomo’s reassuring words that Ebola is very hard to catch (just don’t tell the hundreds of healthcare workers who have been infected despit all their precautions).
end
And now for your major data points today:
Portuguese 10 yr bond yield: 3.28 par in basis points from Thursday night.
(Portugal imploding)
Your closing Portuguese 10 year bond yield Friday night: down 2 in basis points on the day
Portuguese 10 year bond yield: 3.26%
Your closing Japanese yield Friday down 1 in basis points from Thursday night
yield .47% !!!
Japanese 10 year bond yield: .47%
And now for your closing Japanese 10 year bond yield down 1 basis points from the morning: ( Japanese markets imploding)
Japanese 10 year bond yield: .47%
end
Your opening currency crosses for Friday morning:
EUR/USA: 1.2649 down .0001
USA/JAPAN YEN 108.13 down .050
GBP/USA 1.6045 down .0009
USA/CAN 1.1232 down .0009
This morning the Euro is slightly down , trading now just below the 1.27 level at 1.2649 as Europe reacts to deflation and crumbles on the various European exchanges. The yen is up a little and it closed in Japan rising by 5 basis points at 108.13 yen to the dollar. The pound is down from Thursday as it now trades just below the 1.61 level to 1.6045. The Canadian dollar is slightly up this morning with its cross at 1.1232 to the USA dollar.
Early Friday morning USA 10 year bond yield: 2.25% !!! down 3 in basis points from Thursday night/ (USA economy not doing so well with this low yield)
USA dollar Index early Friday morning: 85.81 down 3 cents from Thursday’s close
end
The NIKKEI: Friday morning up 153 points or 1.01%
Trading from Europe and Asia:
1. Europe all in the red except Spanish ibex
2/ Asian bourses mixed / Chinese bourses: Hang Sang in the red, Shanghai in the red, Australia in the green: /Nikkei (Japan) green/India’s Sensex in the green
Gold early morning trading: $1232.00
silver:$ 17.22
end
Your closing Spanish 10 year government bond Friday/ down 2 in basis points in yield from Thursday night.
Spanish 10 year bond yield: 2.17% !!!!!!
Your Friday closing Italian 10 year bond yield up 2 in basis points and trading 35 in basis points above Spain./
Italian 10 year bond yield; 2.52%!!!!!
end
IMPORTANT CLOSES FOR TODAY
Closing currency crosses for Friday night/USA dollar index/USA 10 yr bond: Europe falling apart this afternoon
Euro/USA: 1.2672 up .0023
USA/Japan: 108.02 down .160
Great Britain/USA: 1.6088 up 0.0055
USA/Canada: 1.1229 up .0005
The euro rose quite a bit in value during this afternoon’s session, and it was up by closing time , closing well below the 1.27 level to 1.2672. The yen was well up during the afternoon session,and it gained 16 basis points on the day closing well above the 108 cross at 108.02. The British pound gained some ground during the afternoon session but it was up for the day as it closed at 1.6088
The Canadian dollar was down during the afternoon session, and it was down on the day closing at 1.1229.
Your closing USA dollar index:
85.67 down 17 cents on the day
your 10 year USA bond yield, a fall of 2 basis points: 2.26%
European and Dow Jones stock index closes:
England FTSE down 30.42 or 0.47%
Paris CAC down 28.78 or 0.69%
German Dax down 59.51 or 0.66%
Spain’s Ibex up 5.60 or 0.05%
Italian FTSE-MIB up 60.70 or 0.31%
The Dow: up 127.51 or 0.76%
Nasdaq; up 30.92 or 0.69%
OIL: WTI 80.85
Brent: 85.96
end
And now for your big USA stories
Today’s NY trading:
(courtesy zero hedge)
Stocks Shrug Off Ebola, Surge Most Since 2011, Still A Red October
Submitted by Tyler Durden on 10/24/2014 16:06 -0400
• China
• Copper
• fixed
• POMO
• POMO
• Russell 2000
inShare
Ebola in NYC, no problem. Crappy housing data, all good. School shooting in WA, buying opportunity… and that is how the S&P 500 broke back above its 100-day-moving-average (proving the world is fixed again), and had its biggest low-to-high swing since Dec 2011. It wasn’t all great BTFD news today though as small caps underperformed – though still green (just like last Friday), and only Trannies and Russell are green in October. Despite equity exuberance, Treasuries rallied modestly today (ending the week up 8-9bps on the week).HY credit slightly underperformed stocks but compressed 27bps – the biggest weekly drop in spreads since July 2013. The USD rose for the first time in 3 weeks led by JPY and EUR weakness. Oil fell once again, copper rose (since China data), gold and silver mirrored USD’s gains. VIX closed down 5 from last week’s close just above 16, but like small cap, and JPY carry, decoupled this afternoon.
Before we start… next week is last POMO and a press-conference-less FOMC statement… so why aren’t bonds loving the growth implied by stocks? Especially if as everyone claims last week saw the capitulation of shorts… We note the 3 blue boxes where equity traders were wrong footed… and now we are back at that level…
* * *
Small Caps notably underperformed today…
The S&P had its best week since Jan 2013 and biggest 2-week low-to-high swing since Dec 2011…
Ripping back above its 100DMA…(and almost 50DMA)
On the week, Nasdaqwas the winner…
And off the Bullard lows…
Only Trannies and Russell 2000 are green for October though…
And here is the last 24 hours…
VIX dropped from 21.99 last friday to just above 16 – but notably decoupled this afternoon
TS VIX
HY Credit’s best week in 15 months…
Treasuries were unchanged today but ended the week 8-9bps higher in yield…
The USD rose for the first week in 3 led by JPY and EUR weakness
JPY carry decoupled from stocks…
VIX decoupled (but was punched lower to ensure S&P success above its 100DMA)
USD strength weighed on commodities as gold and silver mirrored its move. Oil slipped further ending just above $81 and copper rallied after China PMI data…
Charts: Bloomberg
Bonus Chart: Thank the lord for QE3…
end
Dissecting the earnings of the Blue chips on NY so far:
(courtesy Wall Street Journal/ zero hedge)
Everything You Need To Know About Blue Chip Earnings In One (Ugly) Table
Submitted by Tyler Durden on 10/23/2014 21:08 -0400
• Reality
With today’s exuberance around earnings (notably forgetting the reality of various bellwether fails), we thought it appropriate to get some context on just what the “market stalwarts’” results look like in context.
A third of the companies in the Dow have posted shrinking or flat revenue over the past 12 months, as WSJ notes,
“steady has become stagnant as companies once considered among the market’s most reliable post poor growth, quarter after woeful quarter.”
Source: WSJ
end
New homes sales miss badly and now August is drastically revised lower:
(courtesy zero hedge)
New Home Sales Miss, August Drastically Revised Lower
Submitted by Tyler Durden on 10/24/2014 10:09 -0400
• NAHB
• New Home Sales
inShare1
Having exploded 18% higher in August (driven by, um, record high prices), September’s new home sales printed at 467k (against expectations of 470k) and August’s surge to 504k was revised lower to just 466k (busting the biggest beat since 2005 meme) revised 7.5% lower. After August’s reported 50% MoM rise in The West, the region saw the rate of sales slow in September. The median new home sales price (at record highs last month) fell 4% YoY to $259,000.
New Home Sales Missed…
Last month, New home sales rose the most since 1992… and there was much rejoicing…
and now that has been drastically revised lower to a 10% jump in August and a drop in July – one wonders if the gains in homebuilder stocks will also be relinquished.
Either NAHB sentiment has to plunge (as it has done the previous two times) or home sales magically surge back to bubblicious levels…
You Decide…
Charts: Bloomberg
end
And with that the housing recovery is basically dead!!
The Housing Recovery Has Been Canceled Due To Data Revisions
Submitted by Tyler Durden on 10/24/2014 10:29 -0400
• New Home Sales
• recovery
inShare2
Last month, when, with great amusement, we reported that “New Home Sales Explode Higher Thanks To… Record High Average New Home Prices?”, we mocked the latest batch of bullshit data released by the US department of truth as follows:
New Home Sales rose a magnificent (seasonally-adjusted annualized rate) 18% in August – the biggest monthly rise since January 1992 albeit with a 16.3 90% confidence interval, meaning the final number may well be +1.7%. At 504k, new home sales are back at May 2008 levels (though obviously massively below the 1.4 million homes sold at the peak in 2005). As a reminder, May’s 504K new home sales print was later revised later to 458K. But even more stunning, new home sales in The West rose a mind-numbing 50% in August (and up 84.4% YoY – nearly double).
Well, it is now a month later, and here come the revisions: first, that 50% surge in the West was revised… 30K lower. But to get a sense of just how bad the revision was, here is the old, pre-revision data, and the “data” following the latest revision.
In short: the euphoric, consensus-beating data for every single month since May has been revised lower, by on average 6% and as much as 9%.Perhaps finally people will realize that there is only one number that matters in the Census bureau’s monthly new home sales report: the ±15.7 90% confidence interval. Well, people maybe, but not algos, who only care about one thing: whether the data beat or missed.
Now we wonder: will all those market surges over the past 4 months which were based on erroneous headline data, all be revised lower? Sarcasm off.
Oh, and as for that record new home price reported last month, which magically also resulted in what the US government wanted everyone to believe was a surge in buying… well, see for yourselves:
So to summarize: the latest “housing recovery” has been indefinitely postponed due to data revisions.
end
Dave Kranzler weighs in on the housing farce:
(courtesy Dave Kranzler/IRD)
The New Homes Sales Report Is A Complete Farce
October 24, 2014Financial Markets, Housing Market, Market Manipulation, U.S. Economyhomebuilder stocks, Housing bubble, New home sales
Gyrating wildly month-to-month, as seen also with the extreme and unstable monthly reporting of the housing-starts series headline August new-home sales rose by an incredible 18.0% for the month. Even more incredible—as to why the Census Bureau even bothers to publish the current detail—a headline monthly gain of that magnitude was not statistically-significant. – John Williams, Shadowstats.com.
Well guess what? The Census Bureau reported new home sales for September and revised the original number for August down by 38,000, or 7.5%. Recall, the same thing happened in June, when May’s unbelievably high number reported was pole-axed by almost 10%. The data collection and seasonal adjustment algorithms produce a monthly statistic that is vomited out by both the Census Bureau and the National Association of Realtors (existing home sales). Then they compound this grotesque abortion by reporting an “annualized rate” for each month. It’s a complete and utter farce.
I review this month’s statistical aborticide in this article published by Seeking Alpha:September New Home Sales.
One thing to keep in mind: the data both the NAR and the Census Bureau collect are just samples. Then they impose “seasonal adjustments” on that sample data. No one outside of those organizations knows how the adjustments are calculated so we can never assess the reasonableness of the calculation.
THEN, they annualize the number output from the adjustment algorithm. To the extent that there’s errors in both the data samples and the adjustments, annualizing the data compounds the errors by a factor of 12.
The homebuilders have staged a parabolic short-squeeze spike higher during this last week in which in the Fed has heavily intervened in the stock market to keep it from falling off a cliff. Now is the perfect time to add to existing shorts or establish a new short position in the homebuilders. I have four great homebuilder short-sell ideas available here: Homebuilder Bear Reports.
In these reports I show the extreme misleading accounting being used by the homebuilders to prop up their GAAP-reported net income. All the while the insiders are unloading shares. A several people have asked me if my first report published at the end of July is still valid. It dropped 19% from its price at the time I published and has since rallied back but is still below my initial recommendation. I am looking at shorting more here myself. I have not decided if I’ll short some at-the-money calls or just short the stocks. All of my recommendations will drop quickly once this S&P 500 runs out of the steam the Fed injected into it last week.
end
A great commentary on why it will be difficult for the Fed to stop QE
(courtesy Lance Roberts/zero hedge)
5 Things To Ponder: To QE Or Not To QE
Submitted by Tyler Durden on 10/24/2014 16:32 -0400
• Bank of America
• Bank of America
• Bond
• Central Banks
• China
• Citigroup
• European Central Bank
• Eurozone
• Evans-Pritchard
• Fisher
• Global Economy
• Great Depression
• headlines
• Japan
• Merrill
• Merrill Lynch
• Quantitative Easing
• Recession
• recovery
• St Louis Fed
• St. Louis Fed
• Van Hoisington
• Volatility
inShare
Submitted by Lance Roberts of STA Wealth Management,
Over the last few weeks, the markets have seen wild vacillations as stocks plunged and then surged on a massive short-squeeze in the most beaten up sectors of energy and small-mid capitalization companies. While”Ebola” fears filled mainstream headlines the other driver behind the sell-off, and then marked recovery, was a variety of rhetoric surrounding the last vestiges of the current quantitative easing program by the Fed. As I have shown many times in the past, there is a high degree of correlation between the Fed’s liquidity programs and the advance in the markets.
This weekend’s reading list is a compilation of views on whether the Fed will end the current QE program at next weeks FOMC meeting or not. In the past, the extraction of their monetary interventions has led to market declines that were halted only once a new program was started. Are the markets, and the economy, finally strong enough to stand on their own? Or, will the end of the current QE program be the start of a bigger correction?
Here is something to consider if you believe that the Fed will end their monetary purchases next week. The chart below shows the recent sell-off and rebound matched to the Fed’s current monetary interventions.
What will happen when the Fed is absent altogether with just one round of purchases to go? ($1 billion on Monday)
1) Fed Official: End QE On Schedule by Robin Harding via Financial Times
“The comments by Mr Rosengren, an advocate for strong monetary stimulus in recent years,suggest there is limited support for a plan put forward by James Bullard,president of the St Louis Fed, to keep buying assets at a pace of $15bn a month until December.
Mr Rosengren said Fed asset purchases have achieved their stated goal, the jobs report for September is already in and his economic forecasts have not changed. ‘There has been substantial improvement in labour markets,’ he said. ‘As a result I would be pretty comfortable [ending purchases] at the end of the month.’”
[Note: I wonder if the 94 million considered "not in labor force," the 34% out of work longer than 6-months, or the 49 million dealing with food insecurity would agree with Mr. Rosengren?]
Also Read: Fed Official Bullard Says Keep QE Aliveby Robin Harding via Financial Times
Also Read: Fed Official Fisher: Correction Possible But QE End Needed by Matthew Belvedere via CNBC
2) The Fed Shouldn’t End Its Stimulus Program Yetby Danny Vinik via New Republic
“Should QE end next Wednesday? That depends. The economy really has improved over the past year, so it makes sense for the Fed to adopt a more normal policy posture. At the same time, the economy is still far from full employment and wage growth is barely keeping up with inflation. Meanwhile, the outlook for the global economy worsened over the past month, with growth slowing in China, Japan and the Eurozone. Investors are worried that policymakers, particularly the European Central Bank, will not act aggressively if the economy slows down. Economists are also unsure how the Ebola outbreak could affect the economy.”
Also Read: The Statistical Recovery Continues via Streettalklive
Also Read: Bond Market Braced For End To QE by Colleen Godo via Business Day
3) All The Markets Need Is $200 Billion A Quarter From Central Banks by Simon Kennedy via Bloomberg
“By estimating that zero stimulus would be consistent with a 10 percent quarterly drop in equities, they calculate it takes around $200 billion from central banks each quarter to keep markets from selling off.
Bank of America Merrill Lynch strategists said in a report today that another 10 percent decline in U.S. stocks might spark speculation of a fourth round of quantitative easing from the Fed. That would mimic how the Fed acted following equity declines of 11 percent in 2010 and 16 percent in 2011.
‘With central banks much more concerned about a return to recession than about asset-price bubbles, they have little choice but to step back in,’ said Citigroup.”
4) How QE Contributed To The Nations Inequality Problem by William Cohan via NYT
“[Yellen] did a wonderful job highlighting the growing disparity between rich and poor and how it is beginning to impinge upon what it means to be an American, but she ignored the fact that, in many ways, the Fed’s policies have compounded the problem.
Quantitative easing adds to the problem of income inequality by making the rich richer and the poor poorer. By intentionally driving down interest rates to low levels, it allows people who can get access to cheap money on a regular basis to benefit in extraordinary ways.”
Also Read: Let Them Eat Cake via ECRI
5) World Economy So Damaged It May Need Permanent QE by Ambrose Evans-Pritchard via The Telegraph
“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.
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.”
Also Read: “Plunge Protection Team” Behind Market’s Sudden Recovery by John Crudele via NY Post
________________________________________
Bonus Read: The Fed’s Bubble: “Overtrading” and “Discredit” Always End In Revulsion by Van Hoisington/Lacy Hunt via ZeroHedge
“In their 2014 book House of Debt. Chapter 8, entitled ‘Debt and Bubbles,’ Mian and Sufi demonstrate that increasing the flow of credit is extremely counterproductive when the fundamental problem is too much debt, and excessive debt can fuel asset bubbles.
Based on our reading of these two books we would define an asset bubble as a rise in prices that is caused by excess central bank liquidity rather than economic fundamentals.As Kindleberger clearly stated, the process of excess liquidity fueling higher prices in the face of faltering fundamentals can run for a long time, a phase Kindleberger called ‘overtrading.’ But eventually, this gives way to ‘discredit’, when the discerning few see the discrepancy between prices and fundamentals. Eventually, discredit yields to ‘revulsion’, when the crowd understands the imbalance, and markets correct.”
________________________________________
“You will know that the financial markets have reached peak instability and volatility when Britney Spears rings the opening bell.”
Have a great weekend.
end
Let us close with this week’s wrap up courtesy of Greg Hunter of USAWatchdog
(courtesy Greg Hunter/USAWatchdog)
WNW 163: No Ebola Travel Ban, Terror in Canada and NYC, Financial War
By Greg Hunter On October 24, 2014 In Weekly News Wrap-Ups 47 Comments
By Greg Hunter’s USAWatchdog.com
Another week, another Ebola infection. This time, in crowded New York City. This after the government declared “U.S. Ramps up Fight on Ebola.” This time, a young American doctor who returned after treating Ebola victims in West Africa. I cannot believe we do not have a travel ban and/or mandatory quarantine and testing for everyone coming from West Africa. It seems too stupid to be stupid to “keep track” of people when we could just stop people from coming here, and we would not have to “keep track” of them. We are getting hundreds of folks from West Africa coming in every month. Do you feel comfortable with the government keeping track of anything, let alone potentially sick people that could cause a deadly outbreak? It’s almost as if they are inviting a pandemic to America. Oh, and by the way, the new Ebola Czar, Ron Klain, reportedly said his biggest fear for the world is “how to deal with the continually growing population.” Yes, that’s right. The new Ebola Czar’s biggest concern is over-population. That should make you feel all warm and fuzzy.
Terror, terror everywhere in North America. The only difference is that, in Canada, they call it Islamic terror. In the U.S., they call it work place violence. You heard about the guy who took an ax to some New York City cops. They shot the ax attacker dead, but not before he hurt some police. This week, one of the editorial pages in USA Today talked about Christian extremists, but no one mentions Islamic extremists. You don’t hear Christian extremists hacking police up with an ax. It is simply outrageous not to call it what it really is, and I think more terror is on the way. We are at war with extremists in the Islamic world. That is clear.
Good news at the gas pump as prices are going down. How long is that going to last? Saudi Arabia has finally cut production to prop up oil prices. It’s not all good news as shale oil needs a price of $85 a barrel to turn a profit. That business could come crashing down as it is highly leveraged. Also, it’s is not all supply and demand causing the prices of crude oil to fall. It is financial war by the U.S. and the West to punish Russia over Ukraine. The lower price is hurting Russia because Russia gets half its operating revenue from energy sales. Russia is not going to sit idly by and be attacked. For example, Russia wants the EU to guarantee it will pay Ukraine’s natural gas bill this winter, and the EU is balking. Russia will cut natural gas supplies if it is not paid, and that is only the beginning of this financial war. Nobody is backing off from the sanctions, and this situation is only going to get worse this winter.
Finally, Fed Head Janet Yellen says “Inequality is worsening.” She talked about this late last week, and I cannot believe she can say this with a straight face. At one point last year, the Fed was printing and handing our $45 billion a month. Much of that went to the bankers to buy their toxic mortgage-backed securities. You print trillions of dollars to bail out your banking buddies and hedge funds, and you have the gall to stand up and complain of economic inequality? That is rich.
Join Greg Hunter as he analyzes these stories and more in the Weekly News Wrap-Up.
Video Link
http://usawatchdog.com/wnw-163-no-ebola-travel-ban-terror-in-canada-and-nyc-financial-war/
-END-
Well that about does it for tonight
I will see you Monday night
I should have my new site up by then.
No 4 son is working diligently trying to get it going
Harvey
Source: http://fortwealth.com/blog/?p=6094
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