03 October 2015 — Saturday
YESTERDAY in GOLD, SILVER, PLATINUM and PALLADIUM
The gold price began trading with a negative bias starting around 8 a.m. Hong Kong time on their Friday morning, with the HFT traders increasing the pressure beginning at 2 p.m. The low tick—and a new low for this move down, came minutes after 11 a.m. in London. From there, the price began to crawl higher—and blasted off on the job numbers. Looking at the New York Spot [Bid] chart, you can tell that “da boyz” were throwing everything they had at this rally—and got it under semi-control just over fifteen minutes later. The price struggled higher from there, with the day’s high tick coming at, or just after, the London p.m. gold fix. From that point, the gold price edged lower until shortly after 2 p.m. in electronic trading, before rallying a bit into the close.
The low and high ticks were reported by the CME Group as $1,103.80 and $1,140.90 in the December contract.
Gold finished the Friday trading session at $1,138.40 spot, up $24.90 from Thursday. And because the 50-day moving average was taken out with real authority to the upside, it should come as no surprise that the net volume was way up there at just over 174,000 contracts.
Here’s the 5-minute gold chart courtesy of Brad Robertson—and as you can see, the only volume that really mattered occurred between 6:30 and 11:30 a.m. Denver time on this chart—the gold price blast-off, until the COMEX close. The vertical line is midnight in New York—add two hours for EDT—and don’t forget the ‘click to enlarge‘ feature.
Up until the 8:30 a.m. EDT blast off yesterday morning, the silver price followed the gold price path like a shadow. After the blast off, the price got capped within minutes—and it struggled higher from there, with the high tick coming sometime after 3 p.m. in electronic trading. From that point it backed off a bit into the close.
The low and high ticks in this precious metal was recorded as $14.36 and $15.30 in the December contract.
Silver finished the day at $15.265 spot, up 74.5 cents and, like gold, would have finished a lot higher if allowed to trade freely, which it obviously wasn’t. Net volume was very chunky as well, as silver’s 50-day moving average also got blown away—and it checked in at a hair over 59,500 contracts.
Like silver and gold, the platinum price didn’t do much until shortly after 8 a.m. Hong Kong time on their Friday morning, with the [new] low tick coming shortly before Zurich opened. From there it didn’t do a lot, but also began to inch higher starting thirty minutes before the job numbers—and as you can tell from the chart, the platinum price wasn’t allowed to go anywhere. It finished the day at $910 spot, up a paltry 6 bucks from Thursday’s close.
Palladium traded almost ruler flat until it rallied about ten dollars at the Zurich open. From there the price inched higher for the remainder of the day. The job numbers had zero impact on the palladium price. It closed just under the $700 spot mark at $698—up 24 dollars on the day—and 47 bucks over the last two days.
The dollar index closed late on Thursday afternoon in New York at 96.10—and after a tiny dip shortly after 10 a.m. Hong Kong time, it began to rally—making it up to around the 96.32 mark when the job numbers were released. It cratered about 110 basis points in seconds, but ‘gentle hands appeared at the 10 a.m. EDT London p.m. gold fix—and by the time trading was done, the index was only down 19 basis points, closing at 95.91.
It’s a reasonable assumption to make that Plunge Protection Team was at battle stations across the board yesterday—and the dollar index, along with the miraculous recovery in the Dow, would have been on their ‘to do’ list as well.
And here’s the 6-month U.S. dollar index chart so you can see how ‘miraculous’ the recovery in the dollar really was compared to previous days, as it blasted through its 200-day moving average with ease. You’ll note that there has been more than one ‘miraculous’ save at the 200-day moving average over the last six weeks.
The gold stocks gapped up about four percent at the open, topped out at the London p.m. gold fix—and then chopped quietly sideways until about 2:30 p.m. EDT. from there the rallied a bit into the close, finishing the day on their absolute high tick. The HUI finished the Friday session up a very respectable 8.32 percent.
The silver stocks gapped up as well, but once the London gold fix was in, they never stopped rising—and they too finished on their high tick of the day, as Nick Laird’s Intraday Silver Sentiment Index closed higher by a very impressive 9.33 percent.
For the week, the HUI closed up 2.98 percent—and the ISSI finished higher by 3.39 percent.
The CME Daily Delivery Report showed that zero gold and 2 silver contracts were posted for delivery within the COMEX-approved depositories on Tuesday. Considering the number of contracts outstanding, I’m astonished by the low level of gold deliveries so far this month.
The CME Preliminary Report for the Friday trading session showed that gold open interest for October continues to slide. This time it dropped by 212 contracts—and that’s almost a 1,000 contract drop over the last two trading days. Maybe there won’t be that much to deliver by the time the month is over. Silver o.i. fell by the 7 contracts posted for delivery on Monday, leaving 38 still open.
There were no reported changes in GLD yesterday—but there was a tiny 133,942 troy ounce withdrawal from SLV, which I suspect was a fee payment of some sort.
With Friday’s big jumps in both gold and silver prices, it will be interesting to see how soon and how much gold is deposited in GLD next week. As for silver, I’ll be very surprised if anything gets deposited, as the authorized participants will continue to short SLV shares in lieu of depositing real metal, which just isn’t available. Ted mentioned on the phone that the silver deposit on Wednesday was probably done to cover an existing short position—and it’s my guess he’ll have much more to say about this in his weekly review this afternoon.
For the second day in a row there were no reported sales from the U.S. Mint. I would bet that we’ll see one on Monday—and it will be impressive.
After very little in/out movement in gold over the last week or so, there was none at all reported moved over at the COMEX-approved depositories on Thursday.
As always, it was another big in/out day in silver, as 627,750 troy ounces were reported received—and 972,079 troy ounces were shipped out the door. And much to Ted’s amazement, there was 301,846 troy ounces transferred out of JPMorgan’s vault. It’s a rare occurrence indeed when silver leaves the JPMorgan warehouse, as their depository has turned into a Roach Motel for 1,000 ounce good delivery bars. There was also another 181,817 troy ounces transferred from the Registered category and back into the Eligible category from three different depositories. The link to all that action is here.
While I’m on the subject, here’s the chart of the receipts [and rare withdrawals] since JPMorgan’s silver depository was opened two days before the drive-by shooting in silver on May 1, 2011. Coincidence you say? And my answer to that is: “Not bloody likely!“
Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, they reported receiving 6,738 kilobars—and shipped out 327 of them. All of the activity was at the Brink’s, Inc. depository—and the link to that action, in troy ounces, is here.
On Wednesday, Nick Laird sent around a chart showing the withdrawals from the COMEX-approved [Brink’s, Inc.] gold kilobar depository ever since it’s inception in mid March of this year—and the total withdrawals are rather impressive. But because I’ve had so many charts in my columns lately, this one had to wait for Saturday’s missive.
The Commitment of Traders Report for positions held at the close of COMEX trading on Tuesday was pretty much what I suggested it might be in yesterday’s column—a slight improvement in silver, and a deterioration in gold. And as Ted Butler said on the phone yesterday, this COT report is already “yesterday’s news” in every respect after Friday’s price action.
In silver, the Commercial net short position declined by a smallish 1,208 contracts, or 6.04 million troy ounces. This they did by adding 688 long contracts and covering 520 short contracts. The new Commercial net short position sits at 150.5 million troy ounces.
Under the hood in the Managed Money category, the changes were even more impressive, as these traders increased their short position by 5,294 contracts, plus they sold a smallish 64 long contracts, for a total weekly change of 5,358 contracts. The traders in the other two categories increased their long positions and covered short positions, mirroring what the Commercial traders were doing.
In gold, the Commercial net short position increased by 15,915 contracts, or 1.59 million troy ounces. They did this by adding 16,358 short contracts that the Managed Money traders, plus others, were selling in a panic—but the also added 443 long contracts as well. The net of that is the 15,915 contracts. The Commercial net short position now sits at 7.31 million troy ounces.
Under the hood in the Managed Money category, these traders reduced their short position by 14,633 contracts, plus they added 5,102 contracts to their long position, for a total swing of 19,735 contracts.
Now that you’ve read it, you can forget it, as the price action since Tuesday’s cut-off—particularly Friday’s price action—has blown all of these above numbers out of the water. Ted is ever hopeful that the it was only the raptors [the Commercial traders other than the Big 8] selling long positions in both gold and silver that capped the rallies in New York yesterday—and not the Big 4 adding to their collective short positions. Personally, I doubt that very much—but it’s a long wait until yesterday’s data shows up in next Friday’s COT Report—and anything can happen between now and then.
Nick sent around the chart showing the weekly withdrawals from the Shanghai Gold Exchange—and this report is for the week ending on Friday, September 25. They reported withdrawing another very chunky 65.681 tonnes of gold. Lawrie Williams has a story about this in the Critical Reads section.
After a whole week of not too many stories, it all caught up with me yesterday—and I have a lot of them today. The final edit is yours.
CRITICAL READS
Payrolls Disaster: Only 142K Jobs Added in September With Zero Wage Growth; August Revised Much Lower
And so the “most important payrolls number” at least until the October FOMC meeting when the Fed will once again do nothing because suddenly the US is staring recession in the face, is in the history books, and as previewed earlier today, at 142K it was a total disaster, 60K below the consensus and below the lowest estimate.
Just as bad, the August print was also revised far lower from 173K to 136K. And while it is less followed, the household survey was an unmitigated disaster, with 236,000 jobs lost in September.
Putting it into perspective, in 2015 job growth has averaged 198,000 per month, compared with an average monthly gain of 260,000 in 2014. The recession is almost here.
As noted above, the headline jobs print was below the lowest wall street estimate. In other words 96 out of 96 economisseds did what they do best.
This ‘no nonsense’ commentary put in an appearance on the Zero Hedge website at 12:36 p.m. EDT on Friday morning—and I thank Richard Saler for today’s first news item. It’s worth reading. There was a story in The New York Times about this as well. It’s headlined “What the Terrible September Jobs Report Means for the Economy“—and I thank Patricia Caulfield for that one.
Economists Can’t Find the Silver Lining in Today’s Jobs Report
When the U.S. jobs report is released each month, there’s typically enough nuance to offer something for everyone — the good and the bad. Today proved to be a feast for the bears.
“When you look through all the details of the data, there just isn’t anything good to hang your hat on,” said Thomas Simons, a money-market economist at Jefferies LLC in New York. “It’s been years since we’ve seen such an unambiguously bad report.”
Silver linings were tough to come by in the September jobs data. Payrolls came in at a much-weaker-than-forecast 142,000, while August and July figures were revised down. Wage growth was nonexistent for the month, with average hourly earnings actually falling by a penny on average.
The softness in manufacturing endured, with factory payrolls falling by 9,000 when they were expected to show no change. With dollar appreciation and sluggish overseas growth providing headwinds, it was the biggest back-to-back decline since 2010.
Not even the talking heads at Bloomberg could put lipstick on this pig. This article appeared on their Internet site at 9:00 a.m. Denver time on Friday morning—and its the second offering of the day from Patricia Caulfield.
U.S. Financials’ Default Risk Spikes to 2-Year High
US financials’ stocks are tumbling as ‘investor’ hopes for a rate-hike (and some dream about better earning potential for banks) drag XLF (Financials ETF) back to Oct 2014 lows. However, as have noted before, it is the message of the credit markets that has been correct all along (and stocks continue to catch down) as today’s jobs data (and Glencore asset sales) poke Financials credit spreads to their highest since Oct 2013.
Credit leading the way again…with Morgan Stanley’s credit default swaps rising the most in percentage terms post-FOMC…and TED Spreads have blown to 3 year highs.
This brief 3-chart Zero Hedge article from 9:51 a.m. EDT yesterday morning is definitely worth a look—and I thank Richard Saler for his second offering in today’s column.
It’s Been a Terrible Week for the Credit Market
Junk bonds closed their worst quarter in four years, and investment-grade corporates turned weak.
The past few days have been challenging ones for the corporate bond market where companies sell their debt.
New rules around fund liquidity announced by the U.S. securities regulator, a raft of big bond sales in recent weeks, and continued concerns over the fate of heavily indebted energy companies, all combined to set the stage for a hairy week in the credit market. Here’s a snapshot of what happened.
Junk-rated bonds sold by companies with more fragile balance sheets had already been showing signs of weakness as the week opened. Bank of America Merrill Lynch credit analysts added to the pain by noting that the junk bond market resembled a “slow moving train wreck that seems to be accelerating.” While investors had mostly been worried about energy companies that had borrowed from Wall Street to fund their exploration in recent years, their concerns seemed to be spreading across the high-yield universe.
This is another Bloomberg article that’s courtesy of Patricia Caulfield. This one showed up on their website at 8:00 a.m. MDT on Friday morning. It’s worth reading if you have the interest.
Ackman, Einhorn Lead Hedge Funds on Track to Rival ’08 Slump
There’s no big bank failure on the horizon. The housing market is booming, not melting. Yet for a handful of well-known hedge fund managers, 2015 is looking a lot like 2008, when their industry suffered record losses and investor withdrawals.
David Einhorn and Michael Novogratz have slumped about 17 percent so far this year, and Bill Ackman declined almost 13 percent in a publicly traded fund. Sean Fahey and Michael Platt have seen billions of dollars flee their firms and are now managing less than a third of what they oversaw at their peaks.
Every struggling hedge fund has struggled in its own way, yet September did a lot damage for many managers, including Ackman, who slumped as much as in all of 2008. Six of the stocks that were most popular with the hedge fund set fell more than 20 percent last month, according to a report by Novus Partners Inc. The carnage added to a year of market twists and turns that included the unexpected surge in the Swiss franc in January, the rally in European government bonds in April and the surprise devaluation of the Chinese yuan in August.
“Hedge funds are reeling from a relentless rout that has all but killed a year’s worth of alpha in a matter of two weeks,” Stan Altshuller, chief research officer at Novus, wrote in a report discussing popular trades among some of the largest funds, including Ackman’s Pershing Square Capital Management and John Paulson’s Paulson & Co.
This Bloomberg article appeared on their Internet site at 6:30 p.m. on Thursday evening MDT, but was updated about fifteen hours later. I thank Patricia Caulfield for this story as well.
JPMorgan Said to Pay Most in $1.86 Billion CDS Settlement
JPMorgan Chase & Co. is set to pay almost a third of a $1.86 billion settlement to resolve accusations that a dozen big banks conspired to limit competition in the credit-default swaps market, according to people briefed on terms of the deal.
JPMorgan is paying $595 million, with the lender’s portion of the accord largely based on the plaintiffs’ measure of market share, said the people, who asked not to be identified because the firms haven’t disclosed how they’re splitting costs. The settlement also enacts reforms making it easier for electronic-trading platforms to enter the CDS market, according to a statement Thursday from attorneys for the plaintiffs, which include the Los Angeles County Employees Retirement Association.
Morgan Stanley, Barclays Plc and Goldman Sachs Group Inc. are paying about $230 million, $175 million and $164 million, respectively, the people said. Plaintiffs’ lawyers disclosed the approximate size of the settlement in Manhattan federal court last month, saying they were still ironing out details. They updated the total Thursday.
The accord averts a trial following years of litigation by hedge funds, pension funds, university endowments, small banks and other investors, who sued as a group. They alleged that global banks — along with Markit Group Ltd., a market-information provider in which the banks owned stakes — conspired to control the information about the multi-trillion-dollar credit-default-swap market in violation of U.S. antitrust laws.
Not even coffee money for these guys! They all belong in jail. This Bloomberg article appeared on their website early Thursday afternoon Denver time and was updated about ninety minutes later. I found this story embedded in a GATA release yesterday.
Wells Fargo’s Master Spin Job — Matt Taibbi
If you still don’t believe our brethren on Wall Street have planet-sized cojones, check out this story.
All over the country, Wells Fargo is making headlines for launching a multimillion-dollar homeowner assistance program called HomeLIFT, which among other things offers $15,000 down payment grants to prospective home-buyers.
Local mayors in big cities from one end of the country to the other are showing up at ribbon-cuttings and throwing rose petals at the bank for its generosity. Newspapers in turn are running breathless profiles of the low-income homeowners who will now get to buy dream homes thanks to the bank’s beneficence.
Some knew, some didn’t, but all are leaving out one key detail: Wells Fargo was forced to launch HomeLIFT.
This longish, but very interesting commentary by Matt showed up on the rollingstone.com Internet site yesterday—and I thank U.K. reader Tariq Khan for his first contribution to today’s column.
How the banks ignored the lessons of the crash — The Guardian
Ask people where they were on 9/11, and most have a memory to share. Ask where they were when Lehman Brothers collapsed, and many will struggle even to remember the correct year. The 158-year-old Wall Street bank filed for bankruptcy on 15 September 2008. As the news broke, insiders experienced an atmosphere of unprecedented panic. One former investment banker recalled: “I thought: so this is what the threat of war must feel like. I remember looking out of the window and seeing the buses drive by. People everywhere going through a normal working day – or so they thought. I realised: they have no idea. I called my father from the office to tell him to transfer all his savings to a safer bank. Going home that day, I was genuinely terrified.”
A veteran at a small credit rating agency who spent his whole career in the City of London told me with genuine emotion: “It was terrifying. Absolutely terrifying. We came so close to a global meltdown.” He had been on holiday in the week Lehman went bust. “I remember opening up the paper every day and going: ‘Oh my God.’ I was on my BlackBerry following events. Confusion, embarrassment, incredulity … I went through the whole gamut of human emotions. At some point my wife threatened to throw my BlackBerry in the lake if I didn’t stop reading on my phone. I couldn’t stop.”
Other financial workers in the City, who were at their desks after Lehman defaulted, described colleagues sitting frozen before their screens, paralysed – unable to act even when there was easy money to be made. Things were looking so bad, they said, that some got on the phone to their families: “Get as much money from the ATM as you can.” “Rush to the supermarket to hoard food.” “Buy gold.” “Get everything ready to evacuate the kids to the country.” As they recalled those days, there was often a note of shame in their voices, as if they felt humiliated by the memory of their vulnerability. Even some of the most macho traders became visibly uncomfortable. One said to me in a grim voice: “That was scary, mate. I mean, not film scary. Really scary.”
This incredible essay was posted on theguardian.com Internet site on Wednesday—and for length reasons had to wait for today’s column. It’s definitely worth reading—and I thank Patricia Caulfield for finding it for us.
Government Set to Default Weeks Earlier Than Forecast
As the government nears a potentially devastating default, the White House and congressional leaders have begun bipartisan talks aimed at reaching a two-year budget deal, seizing on what could be their final chance at consensus before Speaker John A. Boehner’s exit ushers in what is expected to be more combative leadership in the House.
The opening of negotiations, which started this week with a closed-door meeting of senior White House and Capitol Hill staff members, came as Treasury Secretary Jacob J. Lew warned on Thursday that the United States would exhaust its ability to borrow on Nov. 5 if lawmakers refuse to increase the amount of money the government can legally borrow.
That default date is weeks before lawmakers had expected, and it immediately increased the pressure to avoid a new fiscal crisis and break the gridlock that has become business as usual in Washington. Officials from both parties tamped down expectations for success, but the timing of the economic threats may provide a rare opportunity for cooperation.
“This back and forth, going to the brink all the time, it’s bad governmentally, it’s bad for the markets and it’s bad politically,” said Representative Peter T. King, Republican of New York. “The average voter out there just thinks we’re crazy.”
“Crazy,” dear reader? They’re being kind to themselves. How about sociopathic and/or psychopathic? This New York Times article was filed from Washington—and posted on their Internet site on Thursday sometime—and it’s another contribution from Patricia C.
Wal-Mart HQ cuts with ‘need to become a more agile company’
Wal-Mart laid off 450 workers at its headquarters Friday as the world’s largest retailer attempts to become more nimble so that it can better compete with the likes of Amazon.com.
There are more than 18,000 people who work at the headquarters in Bentonville, Arkansas, a close-knit community in northwest Arkansas. The cuts were across all areas, from finance to global e-commerce. The company says that the employees were spoken with individually early on Friday.
The layoffs follow months of rumors about them and they arrived less than two months after Wal-Mart trimmed its annual earnings outlook as profits fell. That is partly because of hefty investments Wal-Mart has made in e-commerce as well as higher wages for hourly workers.
This AP story, filed from New York, was picked up by the news.yahoo.com Internet site sometime yesterday—and I thank Jerome Cherry for sending it our way.
Buffett’s Omaha Gets Stung as Cost-Cutting Zeal Hits Hometown
The cost-cutting zeal that Warren Buffett helped bring to the food industry is starting to hit home.
ConAgra Foods Inc. said Thursday that it’s planning to move its headquarters to Chicago from Buffett’s hometown of Omaha, Nebraska. In the process, the maker of Chef Boyardee pasta and Orville Redenbacher’s popcorn will eliminate more than half its 2,500 corporate jobs in the area.
Buffett’s Berkshire Hathaway Inc. has spent more than $17 billion over the past few years helping investment firm 3G Capital make acquisitions in the food industry. Earlier this year, the partners orchestrated the merger of Kraft Foods Group Inc. with H.J. Heinz. 3G’s playbook has been to cut costs and jobs to improve margins in the industry, which is struggling to grow amid shifting tastes of some health-conscious consumers.
“Kraft Heinz definitely sets the standard for cost cutting and trying to build efficiency into the system,” David Brown, president of the Greater Omaha Chamber of Commerce, said in a phone interview. “ConAgra’s going to have to make these kind of changes anyway if they were going to survive.”
This article was posted on the newsmax.com Internet site at 4:17 p.m. on Thursday afternoon EDT—and it’s courtesy of West Virginia reader Elliot Simon.
In Germany, a Cozy Relationship Between Car Makers and Government
The last president of Germany, the previous chancellor and the current deputy chancellor have all held the precious seat: a place on Volkswagen’s board.
The just-concluded Frankfurt motor show is a national event visited by leaders from all over the country.
For the auto industry, Germany sometimes operates like a company town, with a free flow of leaders between top posts in government and car manufacturers, and a level of national pride that was — at least until now — unrivaled in the United States.
But environmentalists and others say those close ties included doing the bidding of the auto industry, even on issues that run counter to Germany’s national goal of reducing carbon emissions, which has served as a model for other industrialized nations.
This news item, filed from Berlin, showed up on The New York Times website on Wednesday, October 1—and the stories from Patricia C. just keep on coming.
U.S. Seeks to Exclude E.U. From Peace Talks on Syria
The U.S. government has torpedoed European proposals for a multilateral peace conference on Syria. Washington supports the idea of peace talks, but without the E.U. at the negotiation table, DWN wrote.
Taking into account the current refugee crisis, the E.U. is bearing the major burden of the civil war in Syria. Therefore, the U.S.’ unwillingness to see Europeans at the negotiation table caused much surprise among European politicians.
There was a dispute between European diplomats and their U.S. counterparts on the sidelines of the U.N. General Assembly, when French Foreign Minister Laurent Fabius had proposed to set up a multilateral format of negotiations on Syria, similar to the P5+1 talks on the Iranian nuclear program.
Britain, France and Germany have been supporting the idea to resolve the crisis together with the U.S., China, Russia and Iran. However, the U.S. is welcoming only Russia, Iran, Saudi Arabia and Turkey to the negotiation table.
This news item appeared on the sputniknews.com Internet site at 8:09 p.m. Moscow time on their Friday evening—and it’s another offering from Tariq Khan.
Russian second largest airline in crisis as bankruptcy looms
Russia’s second-largest airline, Transaero, is in crisis after two creditors on Friday said they will file bankruptcy proceedings following the collapse of a takeover plan.
Transaero has been struggling with debt and last month a government commission arranged for most of the company’s shares to be taken over by the country’s largest carrier, state-controlled Aeroflot.
However, the takeover has collapsed in recent days and on Friday two major Russian lenders, Sberbank and Alfa Bank, announced their intention to bring bankruptcy proceedings against Transaero, according to statements on a Russian federal company register.
The Russian government now considers that bankruptcy is “the only possible option,” economy minister Alexei Ulyukaev was quoted as saying by the state-owned RIA Novosti news agency. He blamed “ineffective management” at Transaero for the company’s troubles.
This AP story, filed from Moscow yesterday, was picked up by the news.yahoo.com Internet site—and I thank Jerome Cherry for his second contribution to today’s column.
Putin Calls Out Washington
Last Wednesday (28 Sept 2015) the world saw the difference between Russia and Washington. Putin’s approach is truth-based; Obama’s is vain boasts and lies, and Obama is running out of lies.
“We can no longer tolerate the state of affairs in the world.” President Vladimir Putin
By telling the truth at a time of universal deceit, Putin committed a revolutionary act. Referring to the slaughter, destruction, and chaos that Washington has brought to the Middle East, North Africa, and Ukraine, and the extreme jihadist forces that have been unleashed, Putin asked Washington: “Do you realize what you have done?”
Putin’s question reminds me of the question Joseph Welch asked witch-hunting Senator Joseph McCarthy: “Have you no sense of decency?” Welch’s question is attributed with initiating the decline of McCarthy’s career.
Perhaps Putin’s question will have the same impact and bring the reign of “American Exceptionalism” to an end.
This absolute must read Paul Craig Roberts commentary appeared on the sputniknews.com Internet site at 10:22 a.m. Moscow time on their Friday morning, which as 3:22 a.m. EDT. The first person through the door with this story was Tariq Khan.
By Bombing Terrorists in Syria Russia Hits Washington’s Raw Nerve
Russia is undoubtedly bombing insurgents supported by the U.S., but that is only because Washington has intentionally supported Al Qaeda and ISIL in Syria, geopolitical researcher Tony Cartalucci remarks.
Along with some other Western reporters Australian journalist Lauren Williams notes in her recent piece that Russia has launched its airstrikes on Homs and Hama regions which are “not ISIS [ISIL] hotspots.”
“The areas around Homs and Hama are not ISIS [ISIL] hotspots. In fact they are known as a bastion for the U.S.-backed moderate rebel forces and an important strategic gateway to Assad’s Alawite coastal heartland,” the journalist wrote, citing US Secretary of Defense Ashton Carter, in her article for The Interpreter.
But who are these “moderate rebel forces” and where do they come from?
This news item put in an appearance on the sputniknews.com Internet site at 7:01 p.m. Moscow time on their Friday evening, which was 12:01 p.m. in Washington—EDT plus 7 hours. It’s definitely worth reading if your a serious student of the New Great Game. It’s another offering from U.K. reader Tariq Khan, for which I thank him.
U.S., allies demand Russia halt Syria strikes outside IS areas
U.S. President Barack Obama warned Russia on Friday that its bombing campaign against Syrian rebels will suck Moscow into a “quagmire,” after a third straight day of air raids in support of President Bashar al-Assad.
At a White House news conference, Obama frequently assailed Russian President Vladimir Putin, who he accused of acting out of a position of weakness to defend a crumbling, authoritarian ally.
Friday prayers were canceled in insurgent-held areas of Syria’s Homs province hit by Russian warplanes this week, with residents concerned that mosques could be targeted, according to one person from the area.
Putin’s decision to launch strikes on Syria marks a dramatic escalation of foreign involvement in a more than four-year-old civil war in which every major country in the region has a stake.
This Reuters piece has been edited—and now sports a new headline, so I would make the assumption that the content has been ‘adjusted’ as well. It’s now datelined 8:02 p.m. EDT yesterday evening, but Patricia C. sent it to me at 12:25 p.m. EDT yesterday afternoon.
How Saudi Arabia’s aggressive foreign policy is playing against itself
Iranian President Hassan Rouhani’s aggressive speech against Saudi Arabia at the U.N. General Assembly is not just an instance of Iran-Saudia rivalry that has strong sectarian-cum-ideological underpinnings; it also signifies the new height this rivalry has gained subsequent to Iran’s nuclear deal.
The struggle for power between the two States is not something new; Iran’s rising influence, however, is.
As Iran’s economy is set to take huge leap forward once sanctions are lifted, Saudi Arabia faces a remarkable failure of its foreign policy, the cornerstone of which was Saudi political supremacy across the Middle East.
While Saudi Arabia has certainly failed to strangulate Iran’s economy, it has also failed to contain Iran’s influence in the region that the former wanted to achieve through systematically engaging Iran in one conflict (Syria) after the other (Yemen).
This short essay was posted on the Asia Times website yesterday—and it’s definitely worth reading if you have an interest in the politics of that area. I thank U.K. reader Tariq Khan for his final offering in today’s column.
Afghan forces push into Taliban-held Kunduz city amid fierce clashes
Afghan troops recaptured the center of the strategic northern city of Kunduz on Thursday amid fierce clashes with Taliban militants, three days after losing the provincial capital in a humbling defeat for Kabul and its U.S. allies.
Fighting continued in other parts of the city, the seizure of which represented a major victory for the insurgents and raised questions over whether NATO-trained Afghan forces were ready to go it alone now most foreign combat troops have left.
Residents said soldiers were conducting house-to-house searches and had removed the Taliban flag from the central square, replacing it with government colors.
“There are military helicopters in the sky and government forces everywhere,” said Abdul Ahad, a doctor in the city. “Dead Taliban are on the streets, but there are still (militants) in some government buildings fighting Afghan forces.”
This Reuters article, filed form Kunduz in Afghanistan, was posted on their Internet site at 3:13 a.m. EDT on Friday morning—and it’s courtesy of Patricia Caulfield. There was another Reuters story about this that appeared on their website at 1:09 p.m. EDT on Friday afternoon.
Q&A with a Chinese Friend – a full length discussion of Chinese-Russian relations
It is my immense pleasure to present to you today a booklet entitled “Q&A with a Chinese Friend” – a full length discussion of Chinese-Russian relations authored by Mr Unknown and myself. Considering the huge importance of the topic, we have decided to release this document in three languages – English, Russian and Chinese to make it possible for English, Russian and Chinese speakers to easily exchange the same document. As a result, the 63 pages booklet we are presenting to you today contains my questions to Mr Unknown, his replies, his questions to me and my replies to him, in all three languages.
One of our main goals was to debunk the propaganda campaign currently waged by the Empire against the Chinese-Russian alliance by directly and frontally asking each other hostile and, sometimes, outright stupid questions. While normally good manners and friendly intentions exclude that kind of ‘loaded’ questions, Mr Unknown and myself have decided to set aside our personal views and feelings for the sake of having the opportunity to debunk the lies spread by those who fear an alliance between our countries.
The ‘booklet’ may be 63 pages long, but only the first 19 of those are in English. It’s a long read, but worthwhile in my opinion—and for both length and content reasons, it had to wait for Saturday’s column. I thank ‘Wojtek in Warsaw’ for bringing it to my attention on Monday. It was posted on thesaker.is website on that date.
Creating a Desert in China — Beijing pressures herders to move to the cities
Chaogetu, who like many Mongols has only one name, still lives in the house where he was born, a mud-walled three-room shack in a small oasis of Inner Mongolia’s Tengger Desert. He cooks over a wood stove and has a one-month-old lamb tethered in his living room to protect it from foxes and eagles. Like his parents, grandparents, and generations before him, the sun-beaten herder sees his fortunes rise and fall with his livestock—5 camels, 12 cows, and about 500 sheep and goats.
The small lakes dotting this arid region of China have been drying up as the desert grows ever bigger. The sandstorms that roll across the land every spring before heading to far-off Beijing and Tianjin have become more frequent. Clouds of stinging grit choke the lungs and darken the skies for as many as three days at a time, forcing Chaogetu to stay inside and taking a toll on his livestock.
This very interesting Bloomberg article appeared on their website on Wednesday afternoon Denver time—and it’s another contribution from Patricia Caulfield. This is another story that had to wait for today’s column.
How the Chinese Will Establish a New Financial Order — Porter Stansberry
For many years now, it’s been clear that China would soon be pulling the strings in the U.S. financial system.
In 2015, the American people owe the Chinese government nearly $1.5 trillion.
I know big numbers don’t mean much to most people, but keep in mind… this tab is now hundreds of billions of dollars more than what the U.S. government collects in ALL income taxes (both corporate and individual) each year. It’s basically a sum we can never, ever hope to repay – at least, not by normal means.
Of course, the Chinese aren’t stupid. They realize we are both trapped.
Although Porter has his name on this article, it would be my bet that he didn’t actually write it himself. This commentary/infomercial appeared on the internationalman.com Internet site on Friday—and I thank their senior editor Nick Giambruno for bringing it to our attention.
Doug Noland: Party Crashing
This week provided further evidence that the bursting global Bubble has progressed to a critical juncture, afflicting Core markets and economies. Ominously, few seem aware of the profound ramifications – or even the unfolding hostile market backdrop. Even many of the most sophisticated market operators have been caught off guard. There is, as well, scant indication that Federal Reserve officials appreciate what’s unfolding.
I was again this week reminded of an overarching theme from Adam Fergusson’s classic, “When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar German”: throughout that period’s catastrophic monetary inflation, German central bankers believed they were responding to outside forces. Somehow they remained oblivious that the trap of disorderly money printing had become the core problem.
Today’s paramount systemic financial threat is not new. Risk is now high for a disorderly – Party Crashing – “run” on financial markets.
Doug’s weekly Credit Bubble Bulletin is always must reading material for me every week—and it should be for you as well. This commentary appeared on his website late on Friday evening MDT.
Sprott Money Weekly Wrap-Up with Eric Sprott
Listen to Eric Sprott share his views on recently released U.S. job report, Russia joining the fight against the Islamic State in Syria, and the movement of gold and silver in the physical precious metals market.
This 8:34 minute audio interview with host Geoff Rutherford was posted on the sprottmoney.com Internet site yesterday—and it’s worth your while if you have the time.
German banker says GATA is right about gold market rigging
The chief market analyst for Bremer Landesbank in Germany, Folker Hellmeyer, tells financial journalist Lars Schall that central banks have made it their business to manipulate the gold market, that Asia’s physical markets for gold will prevail eventually over the Western paper gold markets, that central banks should vault their gold on their own nation’s soil because otherwise they have only a paper claim on the custodian, and that the market analysis provided by GATA—and GATA Chairman Bill Murphy’s LeMetropoleCafe.com is far superior to the analysis provided by major investment banks.
The interview was conducted by Schall on behalf of Matterhorn Asset Management’s Gold Switzerland, is 26 minutes long, and can be heard at the Gold Switzerland Internet site—and I thank Chris Powell for wordsmithing ‘all of the above’
India gold imports down 71% in September at 41.7 metric tonnes
Imports of gold bars into India totalled 41.7 metric tonnes in September, down 71% from August, customs data showed Friday.
The total is down from imports of 145 metric recorded in August, the highest level of gold bar imports for over a year.
Imports of gold doré, used for refining, totalled 40.8 metric tonnes in September, down 17.3% from 49.4 mt in August.
Trying to spin this news as negative doesn’t surprise me. But if you average out August and September, you’re still over 90 tonnes per month, which ain’t too shabby. Both months appeared to be one-offs. This gold-related news item, filed from London, appeared on the platts.com Internet site at 1:10 p.m. BST yesterday—and it’s something I found on the Sharps Pixley website.
India Issues Its First Sovereign Gold Coin…To Curb Gold Imports
Gold tends not to leave India once it enters. As the world’s largest importer, the country consumes massive quantities of the yellow metal—it’s on track to take in 900 tonnes of the stuff this year—where it remains in private families’ coffers, mostly in the form of jewelry and decorative heirlooms. It’s estimated that less than 10 percent of all Indian gold demand is in bars and coins.
That might change this month—strong emphasis on “might”—as the India Government Mint will issue its first-ever sovereign gold coin, just in time for the fall festival season, which kicks off November 11. The coin will reportedly feature the Ashoka Chakra, the traditional 24-spoked symbol that appears on India’s national flag.
Consider the immense popularity of the American Eagle, the Canadian Maple Leaf, the British Sovereign, the South African Krugerrand and others—and now this month, India’s coin will join their exalted ranks. You might wonder why India, whose notoriously insatiable demand for gold stretches back millennia, has only recently decided to join other nations in issuing a sovereign gold coin.
This commentary by Frank Holmes showed up on the gold-eagle.com Internet site yesterday—and it’s another gold-related story I found on the Sharps Pixley website.
Lawrie Williams: Q3 SGE gold deliveries set to exceed phenomenal 800 tonnes
The latest delivery figures from the Shanghai Gold Exchange (SGE) remain remarkably high with 65.7 tonnes withdrawn in week 38 (ended Sept 25) making a massive total so far this year of 1,958.7 tonnes. Deliveries in Q3 alone are only a shade under 800 tonnes to date – an absolutely phenomenal quarterly figure and this 800 tonne Q3 total will certainly be breached once the current (short) week’s figures are announced. If deliveries are maintained at this kind of rate our projected 2,650 tonne guesstimate for total SGE withdrawals this year could well be exceeded.
It will be interesting to see whether week 39 withdrawals will also bring the ytd total to over 2,000 tonnes, given that they will only cover 3 days trading out of the Exchange with it being closed yesterday and today (and for the first three days of next week too) for the National Day and Golden Week holidays when Chinese business shuts down. Thus we can expect total figures for weeks 39 and 40 to be well below recent levels, before picking up strongly again in week 41.
The Chinese holiday week is probably also accounting for the drift in the gold price to down below $1,110 with volumes faltering given the lack of Chinese demand which offers those Western traders who would like to see the gold price fall, the opportunity to take it lower without fear of Chinese buying bringing it back up again. However, a disappointing U.S. jobs report can serve to fill the China gap – and it has with gold spiking today as the September jobs report came in well below expectations and July and August figures were revised downwards. This is seen as a signal that the U.S. Fed may yet defer commencing interest rate rises further into the future.
Lawrie must have stayed up awful late in London last night in order to get this story posted on the sharpspixley.com Internet site before midnight BST. It’s a must read for sure.
The PHOTOS and the FUNNIES
The WRAP
I’ve been meaning to bring up another issue that could hold important bullish implications for silver. Prices of many important world commodities and metals have been hammered lower; including copper, lead and zinc, all of which have been trading at fresh five year price lows. Especially in copper, there has been an artificiality to the price decline I attribute to COMEX futures positioning (including Wednesday’s 4% copper price rally).
Regardless of whether the price declines in copper, lead and zinc are as manipulative as I suggest, the impact on the mining companies that produce these metals is as real as rain – to any company in this space, the price declines have been horrendous and that is fully reflected in reported earnings and stock price performance. It is also a fact that these three metals account for more than 50% of total silver mine production which is derived as a by-product.
Unless copper, lead and zinc prices recover substantially and soon, mine production will likely be cut, including silver by-product output. This was always the case with silver by-product output, namely, that it was captive to the production of these three base metals. What makes it different at this time, is that I don’t recall a previous occasion where this base metal production was in such jeopardy of being cut as is the case presently. — Silver analyst Ted Butler: 30 September 2015
Today’s pop ‘blast from past’ dates back to the early 1970s—and I remember spinning this 45 rpm on CHAR radio in Alert, N.WT. way back then. It came from there 1971 album “Harmony“—and the link is here.
Today’s classical blast from the past is a little something courtesy of Georg Friedrich Händel. It’s his concerto for harp and orchestra in B flat major, Op. 4/6. Everyone knows this work in one of its various iterations and transcriptions. This performance is from the 2010 International Russian Rotary Children Music Competition. The soloist is Aggejalfis Taellija-Jaroslavna—and there are no flies on her. The link to the youtube.com video clip is here.
Despite the nice rallies in both gold and silver yesterday, the precious metal market remains firmly in the grip of JPMorgan et al—as these rallies had nothing to do with legitimate supply and demand fundamentals—and had everything to do with paper positioning on the COMEX.
But it is becoming increasingly apparent that the powers-that-be, through the President’s Working Group on Financial Markets, are besieged on all sides these days—and the run on precious metals, whether it be in the form of retail bullion sales by Ted Butler’s ‘big buyers’—and the ever-increasing amounts of bullion disappearing into China, Russia and India—will, at some point, end up becoming a run on the COMEX. When that event occurs, it won’t matter what short contracts are printed or outstanding, as they will become instant and potentially lethal financial liabilities to whoever holds them.
But there is still the gold card that could be played—and even that is fraught with peril at this juncture.
The world’s central banks are so far down Lewis Carrol’s rabbit hole, that no pill offered by any white rabbit will save them now. There is no way out—and as Jim Rickards has said on numerous occasions “