Another Day — and More Salami Slicing

15 November 2016 — Tuesday


The gold price traded higher by a few dollars when trading began at 6 p.m. EST on Sunday evening in New York, with the not-unexpected selling pressure beginning just over a hour later.  An interim low tick was set shortly after 9 a.m. China Standard time on their Monday morning.  It rallied back to unchanged by just before the morning gold fix in London — and then didn’t do much until 8:30 a.m. in New York.  At that juncture ‘da boyz’ spun their algos for real — and the low tick of the day was printed at 10:15 a.m. EST.  But once London closed at 11:00 a.m. the gold price began a spirited rally, but that had the rug pulled out from underneath it around 12:40 p.m. EST — and it was sold down until 2:50 p.m. in after-hours trading.  It rallied a few dollars into the close from there.

The high and low tick were reported by the CME Group as $1,230.90 and $1,211.00 in the December contract.

Gold finished the Monday session in New York at $1,221.00 spot, down $6.60 on the day.  Net volume was over the moon again at a hair over 300,000 contracts, as ‘da boyz’ took another decent chunk out of the gold price salami yesterday.161115gold

And here’s the 5-minute gold tick chart courtesy of Brad Robertson as usual.  And except for the odd tick here and there, there was nothing that remotely looked like background volume for any length of time yesterday, as JPMorgan et al ran the sell stops on the Managed Money traders again.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST.  The ‘click to enlarge‘ is a must for this chart.161115-5-minute-gold

It was more or less the same price pattern in silver, except the sell-off was far more vicious, as this is JPMorgan’s biggest problem child, as it’s short position, along with that of Canada’s Scotiabank, is monstrous.  However, after this past week, it certainly will be less so.  The low tick in silver was printed around 11:10 a.m. in New York, which was ten minutes after the London close.  It followed a similar but more subdued price path as gold for the rest of the day.

The high and low in this precious metal was recorded as $17.49 and $16.62 in the December contract, an intraday move of 5 percent — and that’s on top of the 9 percent intraday move on Friday.

Silver was closed in New York yesterday at $16.92 spot, down another 44.5 cents.  Net volume was over the moon once again at just under 112,000 contracts, as the Managed Money traders pitched longs and went short en masse for the second day in a row.  Of course JPMorgan et al were standing right there happily taking the other side of those trades.161115silver

Here’s the 5-minute silver tick chart courtesy of Brad as well.  There were flashes of decent volume spurts in Far East and London trading yesterday, but the volume that really mattered came between 8 a.m. and the COMEX close in New York yesterday, which is between 6:00 and 11:30 a.m. Denver time on the chart below.

Like the 5-minute gold tick chart, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and 1:00 p.m. China Standard Time [CST] the following afternoon in Shanghai—and don’t forget to add two hours for EST.  The ‘click to enlarge‘ is a must here as well.161115-5-minute-silver

Platinum was forced to follow a similar price pattern as silver and gold in Far East trading, but about forty-five minutes before the Zurich open, it was up about five bucks on the day.  At that juncture, the short buyers of last resort appeared — and it spent the next five hours and change trading down four or five dollars.  It rallied back to a dollar or so above unchanged by the COME open — and ‘da boyz’ showed up with their spoofing and algorithms a few minutes before 9 a.m. EST — and the $921 spot low tick was printed at the Zurich close — and revisited an hour later in New York.  It rallied back ten bucks within the next hour — and then chopped sideways, finishing the Monday session in New York at $930 spot, down 12 dollars on the day.161115plati

Palladium was the outlier again.  Its low tick came shortly after 9 a.m. China Standard time on their Sunday morning — and it it was up 8 bucks by shortly after 3 p.m. CST, with less than an hour to go before the Zurich open, which was similar to what happened in platinum.  Its low in London came at, or minutes before, the noon London silver fix — and it was up, up and away from there.  The powers-that-be had to put in an appearance just below the $700 spot mark for the third day in a row, or it would have cut through that price mark like a hot knife through soft butter.  It certainly appeared that the market had gone ‘no ask’ around 12:30 p.m. EST — and it was at that point JPMorgan et al showed up as the short buyers of last resort, just like they had to do for the gold price at the same moment.161115plad

It should be noted once again that the palladium market is very thinly traded, with the emphasis on the word ‘very’ — as in microscopic — therefore, by definition, very illiquid.  At most, it only takes a few hundred contracts to move this market up or down a noticeable amount, so it’s important not to read too much into its price movement.  Except for the fact, of course, that it takes the ever-vigilant short buyers of last resort to keep the price from exploding higher — as it has been attempting to do for the last three days, especially yesterday.  At the moment, they have the “Do Not Pass the $700 Spot Price Mark” sign planted in the ground.

The dollar index closed very late on Friday afternoon in New York at 98.95 — and began to head higher as soon as trading began around 11:30 a.m. EST on Sunday morning, which was a strange time for the markets to resume trading.  It was stair-stepped higher in price in three separate stages — and the three high ticks came at 9:30 a.m. China Standard Time on their Monday morning, again at minutes before 9 a.m. in London — and the 100.22 high tick, which came at, or shortly after the London p.m. gold fix.  It was sold lower from there, closing at 99.97 — and up 102 basis points from its close on Friday.

Here’s the 3-day U.S. dollar index chart, so you can see all of Sunday and Monday’s action, along with some of Friday’s as well.  As I said on Saturday — and I’ll say it again now — this dollar index rally is getting lots of help.  That’s even more apparent once you look at what happened on Monday starting at 8:00 a.m. in Tokyo.161115intraday-gif

And here’s the 6-month U.S. dollar index chart which I include for entertainment purposes only.  The only question to be asked is how high they’re going to run this thing, or have we seen the top already?161115-6-month-usd

The gold stocks opened down a bit — and traded lower until gold’s low tick was printed, which was around 10:20 a.m. in New York.  At that point, the HUI was down a bit more than 3 percent.  The subsequent rally in gold took the gold shares up 4 percent by 12:40 p.m. EST, which was the high tick of the day — and the point where JPMorgan et al stepped in.  They sold off into the COMEX close — and then chopped quietly sideways for the rest of the Monday session.  The HUI finished up 1.32 percent.161115hui

The silver equities followed an almost identical price pattern, but Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed higher by ‘only’ 0.73 percent, which is a miracle in and of itself considering how poorly the underling metal did.  Lots of people bottom fishing yesterday in both silver and gold shares obviously — and I was one of them.  Click to enlarge if necessary.161115silver-7

The CME Daily Delivery Report showed that 51 gold and 112 silver contracts were posted for delivery within the COMEX-approved warehouses on Wednesday.  In gold, the only short/issuer worth mentioning was Goldman Sachs with 50 contracts out of its client account and, not surprisingly, Canada’s Scotiabank stopped 49 of them.  In silver, all 112 contracts came courtesy of ABN Amro out of its client account — and the four long/stoppers worth noting were JPMorgan, Goldman Sachs, ADM and Scotiabank with 55, 26, 16 and 12 contracts respectively.  All were for their client accounts, except those for Scotiabank.  The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Monday trading session showed that gold open interest in November fell by 107 contracts, leaving 78 left, minus the 51 mentioned in the previous paragraph.  Friday’s Daily Delivery Report showed that 146 gold contracts were posted for delivery today, so that means that 146-107=39 gold contracts were added to the November delivery month.  Silver o.i. in November dropped by 1 contract, leaving 112 left.  Friday’s Daily Delivery Report showed that zero silver contracts were posted for delivery today, so that means that 1 lonely silver short/issuer was let off the delivery hook by the long/stopper holding the other side of that contract.

There were withdrawals from both GLD and SLV yesterday.  In GLD, an authorized participant withdrew 181,150 troy ounces — and in SLV, an a.p. took out 474,365 troy ounces.

The folks over at Switzerland’s Zürcher Kantonalbank updated their website with the goings-on inside their gold and silver ETFs as of the close of trading on Friday, November 11 — and this is what they had to report.  Their gold ETF shed a hefty 13,135 troy ounces — and their silver ETF declined by 281,447 troy ounces.

I was hoping that after the huge gold and silver deposits in those ETFs on Friday, November 4 — that we would see another big surprise increase in this week’s report.  But alas, it was not to be.

There was no sales report from the U.S. Mint yesterday.

There was decent ‘out’ activity over at the COMEX-approved gold depositories on the U.S. east coast on Friday.  Nothing was reported received, but 83,114 troy ounces was withdrawn.  Of that amount, there was 78,484 troy ounces shipped out of Brink’s, Inc. — and the remaining 4,629.600 troy ounces/144 kilobars [U.K./U.S. kilobar weight] came out of Canada’s Scotiabank.  Another link to that activity is here.

It was pretty busy in silver once again.  Scotiabank reported receiving 2,080,673 troy ounces — and 198,616 troy ounces were shipped out of Brink’s, Inc.  A link to that action is here.

Over at the COMEX-approved gold kilobar depositories in Hong Kong on their Friday, they reported receiving 3,629 of them — and shipped out 706.   Except for 6 kilobars out of Loomis International, the rest of the in/out activity was at Brink’s, Inc. as per usual — and the link to that, in troy ounces, is here.

The Veteran’s Day-delayed Commitment of Traders Report showed up on the CME’s website on Monday at 3:30 p.m. EST — and there was deterioration in the Commercial net short positions in both gold and silver  I was hoping for a slight improvement in silver…Ted was hoping for just unchanged — and neither one of us was anywhere close to the mark.

And as I’ve said several times in the last few columns, these numbers are, in every respect, “yesterday’s news”, but I’ll go through the motions anyway.

In silver, the Commercial net short position increased by 5,344 contracts, or 26.7 million troy ounces of paper silver.  They got to that number by selling 4,734 long contracts, plus they added 610 short contracts to their already monstrous short position.  The total of the two numbers is the change for the reporting week.

Ted said that the Big 4 commercial traders added about 2,000 contracts to their respective short positions.  The raptors, the Commercial traders other than the Big 8, sold 4,600 long contracts — and the ‘5 through 8’ large traders actually covered around 1,300 short contracts during the reporting week.

The Commercial net short position as of last Tuesday’s cut-off was 411.3 million troy ounces — and Ted puts JPMorgan’s short position in silver in the COMEX futures market up to about 24,000 contracts.

Under the hood in the Disaggregated COT Report the numbers in silver were even worse, as the Managed Money traders increased their total long position by 8,470 contracts — adding 5,256 longs, plus they covered 3,214 short contracts.

Here is the 3-year COT chart for silver — and I offer it without comment because, as I said earlier, it’s already ancient history.  Click to enlarge.161115cot-silver

In gold, the Commercial net short position increased by 6,335 contract, or 634,000 troy ounces of paper gold.

They arrived at this number by selling 483 long contracts, plus they picked up 5,852 short contracts — all courtesy of the Managed Money traders.  The sum of those two numbers is the change for the reporting week.

The Commercial net short position in gold stands at 24.56 million troy ounces as of last Tuesday’s cut-off.

It was “all for one, and one for all” as Ted would say, as all three categories of Commercial traders were short buyers of last resort in this week’s COT Report.  The Big 4 commercial traders added about 2,100 contracts to their short position — and the ‘5 through 8’ traders added another 700 short contracts as well.  Ted’s raptors, the Commercial traders other than the Big 8, picked up around 3,500 short contracts as well.

Under the hood in the Disaggregated COT Report, the Managed Money traders added 8,000 contracts [precisely] to their respective long positions — and they also added 630 short contracts — and the difference between those two numbers was the change for the reporting week — 7,370 contracts.

Like in silver, the small differences between what the Managed Money traders and the Commercial traders did during the reporting week, was absorbed by the traders in the other two categories — the “Other Reportables” — and the “Nonreportable”/small trader category.

And here’s the 3-year COT chart for gold.  Click to enlarge as well.161115cot-gold

Ted a few things to say about the upcoming COT Report on Friday.  My thoughts are similar to his, but he’s just so much better with words than I am, so I’ve stolen two short paragraphs as today’s quote — and you can read them when you get down that far.

I shan’t both posting the “Days to Cover” chart, plus all the usual words that go with it, because it’s a total waste of time…yours to read it and mine to write it…because it’s all meaningless at this juncture.

I have a lot of stories for you today — and rather than trim the list down more than I already have, I’m more than relieved to leave the final edit up to you.


Bond Bloodbath Becomes Buying-Panic as Treasury Yields Tumble Most Since June

After 3 days of carnage in U.S. Treasuries, pushing longer-dated bond yields notably above U.S. equity dividend yield – and following both Citi and Goldman reports that Trumponomics may be less inflationary than expected (and the yield surge is tightening financial conditions) drastically, longer-dated bond yields are dropping notably in the early Asia session. 10-year yields are down 8bps — the most since June as 30-year drops back below 3.00{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

The yield on the 100-year U.S. Treasury note is now 12bps ‘cheap’ to the dividend yield from the S&P 500 – the highest since Dec 2015…

And as Bloomberg reports, Fed speakers this week are unlikely to be as hawkish as the market, which could dent market pricing and lead to profit-taking on rates and USD, according to Citi managing director of G-10 FX strategy Steven Englander.

Were the Fed to indicate that it thought three hikes were possible, we could see a lot more damage than we have seen till now, Englander writes in note.

Citi however expects a far more dovish tone given:

  • Fed doesn’t know the nature of Trump’s fiscal measures that will be implemented, and they likely won’t be shovel ready
  • It’s cognizant of Dollar Index strength as it approaches log-term highs of 100.33

Well, despite these ‘improvements’…they’ve still got miles to go to get back to where they were — and the $1 Trillion lost in the bond market since last Tuesday is still there regardless of this ‘improvement’ as well.  I found this longish story on Zero Hedge at 9:50 p.m. EDT last night.  Another link to it is here.

What the Hell is Suddenly Going on With Foreclosures?

The total number of homes with foreclosure filings jumped 27{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in October from September, when they’d been at the lowest level since 2006. It was the biggest jump in monthly foreclosure filings since August 2007.

Compared to October last year, homes with foreclosure filings still decreased, but this nationwide decrease is covering up what is now happening in 28 states and Washington D.C., according to the Foreclosure Report by ATTOM Data Solutions. There, the inventory of homes with foreclosure filings is beginning to rise even on a year-over year basis. And in some states it soared year-over-year:

  • Colorado +64{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}
  • Georgia +22{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}
  • Pennsylvania +20{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}
  • Arizona +17{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}
  • Virginia +15{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}
  • Massachusetts +11{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}
  • New York +10{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}

When home prices rise for years, foreclosure filings become rare because defaulting homeowners can usually sell the home for more than they owe and pay off the mortgage. The problem arises when home prices fail to rise locally, and it balloons when home prices fall. We’ve seen that last time around. After bouncing along super low levels during Housing Bubble 1 through 2005, foreclosure filings skyrocketed during the housing crash starting in 2006. At first it was just an uptick that no one paid attention to. By 2008, it helped take down the financial system.

This story originally appeared on the Internet site last Friday — and I decided not to post it.  But when Brad Robertson sent me the Zero Hedge repost of it, I had a change of heart, so here it is.  It showed up on the ZH website at 12:35 p.m. on Friday afternoon EST — and another link to it is here.

Holiday disaster looms as UPS workers vote to strike

Aircraft maintenance workers at United Parcel Service have overwhelmingly voted to go on strike in a decision that could paralyze shipments during the busy holiday season.

About 80{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} of workers who are responsible for servicing UPS’s fleet of planes took part in the vote, and of those, 98{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} voted to authorize a strike.

The decision comes after three years of negotiations with UPS over the workers’ wages and health benefits.

The union representing the workers – Teamsters Local 2727 – say the biggest issue in the negotiations is related to health care.  According to the union, UPS is proposing a reduction in health benefits for the maintenance workers and retirees.

This news item showed up on the Internet site very early on Monday afternoon EDT — and I thank Swedish reader Patrik Ekdahl for finding it for us.  Another link to it is here.

Donald Trump and Hillary Clinton walk in to a bar — Paul Craig Roberts

Donald Trump and Hillary Clinton walk in to a bar. Donald leans over, and with a smile on his face and says:

“The media is really tearing you apart for that Scandal.”
Hillary: “You mean my lying about Benghazi?”
Trump: “No, the other one.”
Hillary: “You mean the massive voter fraud?”
Trump: “No, the other one.”
Hillary: “You mean the military not getting their votes counted?”
Trump: “No, the other one.”
Hillary: “Using my secret private server with classified material to hide my Activities?”
Trump: “No, the other one.”
Hillary: “The NSA monitoring our phone calls, emails and everything else?”
Trump: “No, the other one.”

This interesting back-and-forth ‘chat’ between Donald and Hillary was posted on Paul’s website yesterday — and I thank Tolling Jennings for sending it along.  Another link to it is here.

The New York Times: We blew it on Trump

The Gray Lady feels the agony of political defeat — in her reputation and in her wallet.

After taking a beating almost as brutal as Hillary Clinton’s, The New York Times on Friday made an extraordinary appeal to its readers to stand by her. The publisher’s letter to subscribers was part apology and part defense of its campaign coverage, but the key takeaway was a pledge to do better.

Ah, there’s the rub. Had the paper actually been fair to both candidates, it wouldn’t need to rededicate itself to honest reporting. And it wouldn’t have been totally blindsided by Trump’s victory.

Instead, because it demonized Trump from start to finish, it failed to realize he was onto something. And because the paper decided that Trump’s supporters were a rabble of racist rednecks and homophobes, it didn’t have a clue about what was happening in the lives of the Americans who elected the new president.  Sulzberger’s letter alludes to this, promising that the paper will “striv[e] always to understand and reflect all political perspectives and life experiences in the stories that we bring to you.”

But bad or sloppy journalism doesn’t fully capture the Times’ sins. Not after it announced that it was breaking its rules of coverage because Trump didn’t deserve fairness.

This commentary by Michael Goodwin over at The New York Sun is certainly worth reading if you have the interest — and it’s something I found in yesterday’s edition of the King Report.  Another link to it is here.

Doug Casey on Why Trump Came Out on Top

The Trump victory is very good news for the U.S. — relative to a win for Hillary, which would have been an unmitigated disaster.  So I’m happy he won.

Will Trump winning mean a real change in direction for the U.S.? Unlikely. Don’t mistake Trump for a libertarian. He has all kinds of stupid notions—torture as official policy, killing families of accused terrorists, and putting on import duties. He has no grasp of economics. He’s an authoritarian. His cabinet choices, so far, are all neocons and Deep State hangers-on. He’s likely to treat the U.S. as if it were his 100{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} owned corporation.

On the bright side, he has real business experience—although of the kind that sees government as a partner. I doubt he’ll try, or be able if he does, to pull up any agencies by the roots. He’ll mainly be able to set the tone, as did Reagan. But, hey, something is better than nothing.

This commentary by Doug showed up on the Internet site on Saturday — and another link to it is here.

Mr. Trump: The Scenic Route to Hell — Jeff Thomas

I rarely comment on specific news items, as I tend to focus on the long view. However, I’ve been repeatedly asked to comment on the recent American presidential election and what a win by Donald Trump will mean.

Of course, those who read this publication are rarely liberals in the modern sense. Many are conservative, but the majority are likely to be libertarians. Those from the latter two groups may well be singing, “Ding-dong, the witch is dead” at present, but this will not be the case.  Mrs. Clinton and her fellow globalists are not about to shrink back into the night.

Already the mighty hand of George Soros is visible on the East and West coasts of the U.S., in the form of massive demonstrations and, in some cases, riots from the “Not my president” crowd. This is a setback for them, not an endgame.

At the same time, of course, a quieter group – those who supported Mister Trump – are hoping that all will be right with the world in future. They will be anticipating a stemming of the migration tide from Mexico and the Middle East. They’ll be hoping to see companies located in the US to increase hiring and those that have left the U.S. due to excessive corporate tax returning. They may also be anticipating a diminished national debt and an overall return to prosperity.

They will be disappointed.

This very interesting commentary by Jeff showed up on the Internet site yesterday — and I think it’s worth reading.  Another link to it is here.

Soros bands with donors to resist Trump, ‘take back power’

George Soros and other rich liberals who spent tens of millions of dollars trying to elect Hillary Clinton are gathering in Washington for a three-day, closed door meeting to retool the big-money left to fight back against Donald Trump.

The conference, which kicked off Sunday night at Washington’s pricey Mandarin Oriental hotel, is sponsored by the influential Democracy Alliance donor club, and will include appearances by leaders of most leading unions and liberal groups, as well as darlings of the left such as House Democratic leader Nancy Pelosi, Sen. Elizabeth Warren and Congressional Progressive Caucus co-chairman Keith Ellison, according to an agenda and other documents obtained by POLITICO.

The meeting is the first major gathering of the institutional left since Trump’s shocking victory over Hillary Clinton in last week’s presidential election, and, if the agenda is any indication, liberals plan full-on trench warfare against Trump from Day One. Some sessions deal with gearing up for 2017 and 2018 elections, while others focus on thwarting President-elect Trump’s 100-day plan, which the agenda calls “a terrifying assault on President Obama’s achievements — and our progressive vision for an equitable and just nation.”

This article was posted on the Internet site at 5:03 a.m. EST on Monday morning — and I extracted it from a article that Brad Robertson sent our way.  Another link to it is here.

Eirexit: Could Ireland follow Britain out of the E.U.?

Until very recently, the very notion of Ireland leaving the E.U. was so outlandish and marginal that it did not feature in any public discourse in a meaningful way.

But it has now been thrust more into the limelight by a combination of Brexit, the Apple case, fears of an E.U. stealth attack on Ireland’s most sacred cow, corporation tax; and now, the election of Trump.

For major parties and for the Government, the idea does not even begin to feature.

The recently published National Risk Assessment looks extensively at the possible impacts of Brexit but is silent on the possibility of a future Irish exit.

Certainly, Eirexit has gained some momentum of late. There is a small but growing band of public figures questioning the basis of Irish E.U. membership. Some are opposed to any notion of a federal Europe or E.U. superstate.

This interesting article put in an appearance on the Internet site very early on Saturday morning GMT — and it comes to us courtesy of Roy Stephens.  Another link to it is here.

Catalans protest Spain’s legal challenges to secession

Thousands of Catalan separatists gathered in Barcelona on Sunday to protest a series of legal challenges made by Spain’s government against pro-independence Catalan politicians.

Several of Catalonia’s lawmakers are facing court cases sought by the Spanish government for having staged a secession referendum in 2014 in disobedience of a court order and for other regional laws designed to prepare a path toward secession.

Those politicians include Catalonia’s former regional president, Artur Mas, and the current speaker of the regional parliament, Carme Forcadell, who both attended Sunday’s protest.

Grassroots groups said they organized a fleet of around 150 buses to bring protesters in from the countryside and smaller towns to participate in the rally held near the Plaza de Espana in Barcelona.

Jordi Cuixart, the president of Omnium, a separatist grassroots group, told the crowd that teemed with pro-independence flags that he had “a message for the Spanish state.”

This AP story, filed from Barcelona, was posted on their Internet site at 9:21 a.m. EST on Sunday morning — and I thank Richard Saler for pointing it out.  It was embedded in a Zero Hedge news item with their own spin on it, which I thought a bit much.  Another link to this article is here.

‘Italeave’ Looms as Italian Crisis Indicator Spikes to Record High After Trump Win

The U.S. election will help all those who have not had the courage to come out and say ‘I will vote No’,” proclaimed one of Italian PM Renzi’s opponents as the Financial Times reports the centre-left prime minister’s referendum on change is threatened by the global populist wave. Even before the U.S. election, he faced a struggle to secure victory in the referendum, with most polls tilting in favor of voting ‘No’, albeit with many undecided voters, but opponents claim “many undecided voters in the polling booth will say ‘No, No, No’, just like Trump voters.”

As The FT reports, Mr. Renzi has said he will resign if his flagship changes to Italy’s political system are rejected in a referendum on December 4, making him a casualty of the populist insurgency sweeping western democracies and increasing investor concern for the Eurozone’s third-largest economy.

That fear is most evident in Italian sovereign bonds which have collapsed dramatically in the last weeks (accelerating in the last few days) with 10Y BTP yields above 2.00{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} for the first time since July 2015 and the spread to Bunds at its highest in 2 years (despite colossal buying from the ECB)…

This article was posted on the Zero Hedge website at 5:45 a.m. EST on Monday morning — and it’s the second offering of the day from Richard Saler.  Another link to it is here.

Chaos Ensues as Europe Splinters in Response to Trump: U.K., France, Hungary Snub E.U. Emergency Meeting

While America’s so-called “establishment”, the legacy political system and mainstream media, appear to be melting, and transforming before our eyes into something that has yet to be determined, Europe also appears to be disintegrating in response to the Trump presidential victory: as the FT reports, in a stunning development, Britain and France on Sunday night snubbed a contentious E.U. emergency meeting to align the bloc’s approach to Donald Trump’s election, exposing rifts in Europe over the U.S. vote.

Hailed by diplomats as a chance to “send a signal of what the E.U. expects” from Mr Trump, the plan fell into disarray after foreign ministers from the bloc’s two main military powers declined to attend the gathering demanded by Berlin and Brussels.

The meeting, which comes as Trump appointed his key deputies – choosing the more moderate establishment figure, RNC chairman Reince Priebus, to be his chief-of-staff over campaign chairman Stephen Bannon, who becomes chief strategist and counsellor – was supposed to create a framework for Europe in how to deal with a “Trump threat” as Europe itself faces an uphill climb of contentious, potentially game-changing elections over the coming few months as we described last week in “European Politicians Terrified By “Horror Scenario” After Brexit, Trump.

Instead The split in Europe highlights the difficulties “European capitals face in coordinating a response to Mr Trump, who has questioned the U.S.’s commitments to NATO and free trade and hinted at seeking a rapprochement with Russian president Vladimir Putin” much to the amusement of famous euroskeptic Nigel Farage who was the first foreign political leader to meet with Donald Trump at the Trump Tower over the weekend.

This very interesting news item appeared on the Zero Hedge website at 4:17 a.m. EST on Sunday morning — and I thank David Caron for passing it around.  Another link to this article, which I think is worth reading, is here.

Oil Tankers Used to Store Millions of Barrels as European Land Sites Fill

Oil companies booked tankers to store as many as 9 million barrels of crude in northwest Europe amid signs that space in on-land depots is filling up, a ship-operator said. The glut could get bigger still, given the region is scheduled to load the most cargoes in 4 1/2 years next month.

There are 14 to 16 Aframax-class tankers now storing crude in the region, Jonathan Lee, chief executive officer of Tankers International, operator of the world’s biggest pool of supertankers, said by phone Friday. Standard cargoes are normally almost 600,000 barrels. Lack of on-land capacity to hold the oil is the most likely cause of the buildup, he said.

Those ships are the industry’s biggest supertankers, holding 2 million barrels a piece. The vessels in the North Sea would normally carry about 70 percent less oil.

North Sea producers are among a long list of suppliers adding barrels just as OPEC prepares to try and eliminate a surplus. Pressure on the exporter club is piling up because its own members are pumping like never before while nations outside the group including Brazil, Kazakhstan, Canada and Russia are producing more than ever or pumping from new fields.

This Bloomberg news item appeared on their Internet site at 7:58 a.m. MST on Friday morning — and I plucked it from a story over at the Internet site — and my thanks go out to Brad Robertson for sharing it with us.  Another link to it is here.

Trump-Putin alliance sparks diplomatic crisis as British ministers demand assurances from U.S. over Russia

Britain is facing a diplomatic crisis with the U.S. over Donald Trump’s plans to forge an alliance with Vladimir Putin and bolster the Syrian regime.

In a significant foreign policy split, officials admitted that Britain will have some “very difficult” conversations with the President-elect in coming months over his approach to Russia.

It comes after Mr Trump used his first interviews since winning the U.S. election to indicate that he will withdraw support for rebels in Syria and thank Vladimir Putin for sending him a “beautiful” letter.

Mr Trump said that he will instead join forces with Russia and focus on defeating Isil. He has previously said it would be “nice” if the U.S. and Russia could work together to “knock the hell out of Isil”.

His views are in stark contrast with those of Theresa May, who has accused President Assad’s regime of perpetrating “atrocious violence” and said that the long-term future of Syria must be “without Assad”.

This news item was posted the Internet site at 10:00 p.m. GMT on their Saturday evening, which was 5:00 p.m. in Washington — EDT plus 5 hours.  I thank Roy Stephens for sending it along — and another link to it is here.

Putin and Trump discuss Syria and U.S.-Russia relations in phone call – Kremlin

U.S. President-elect Donald Trump and Russian President Vladimir Putin have held their first telephone call, in which the two leaders discussed Syria and agreed to improve and develop bilateral ties, the Kremlin said in a statement.

In their telephone conversation, the two leaders agreed that they share a common view on “uniting efforts in the fight with the common enemy number one – international terrorism and extremism,” the Kremlin said in a statement published on its website late Monday. The Kremlin added that Putin and Trump also discussed ways to settle the Syria crisis.

Putin and Trump paid special attention to the importance of establishing a stable basis for bilateral relations by developing trade and economic ties between the two countries and working toward “constructive cooperation,” the Kremlin said.

The president and the president-elect agreed to keep in contact by telephone and have discussed the idea of meeting in person.

This news item appeared on the Internet site at 8:02 p.m. Moscow time on their Monday evening, which was 12:02 p.m. in Washington — EST plus 8 hours.  Roy Stephens sent it to us early on Monday evening Denver time — and another link to it is here.

Truck Drivers Walk Off the Job, ATMs Run Dry After India Pulls Bills From Circulation

The crisis sparked by the shortage of cash in India following Prime Minister Narendra Modi’s anti-graft measure to ban high-value currency bills has hit the movement of goods in Asia’s third-largest economy.

More than half of an estimated 9.3 million trucks under the All-India Motor Transport Congress have been affected as drivers abandon vehicles midway into their trip after running out of cash, according to Naveen Gupta, secretary general of the group. India’s roads carry about 65 percent of the country’s freight.

That adds to the worries of a government battling to keep cash-dispensing machines running after efforts to ease withdrawals failed to keep pace for the fifth straight day.

After a teary-eyed emotional appeal to citizens to bear some pain and back the fight against corruption, Modi today defended his move to withdraw 500-rupee and 1,000-rupee notes, which accounted for 86 percent of money in circulation.

This very worthwhile Bloomberg news item showed up on their Internet site at 7:53 a.m. Denver time on Monday morning — and I found it embedded in a GATA release.  Another link to it is here.  There was another story about this on Internet site yesterday.  It’s headlined “Anger rising over India’s bungled cash exchange” — and I thank Patrik Ekdahl for that one.

Donald Trump’s election has the Philippine president singing a different tune

Philippine President Rodrigo Duterte has been in office for just a few months, but he has made clear his opinion of the current U.S. president, calling Obama a “son of a bitch” ahead of a regional summit in September.

Duterte expressed regret, and the two leaders met on the sidelines of that summit.

But the U.S.-Philippine relationship has continued to be strained by Duterte’s rhetoric and his hostility to the longstanding political and military relationship between the two countries.

Duterte, however, seems keen on the U.S. president-elect.

This news item was posted on the Internet site at 8:46 p.m. EST on Sunday evening — and it’s another contribution from Patrik Ekdahl.  Another link to it is here.

China threatens to cut sales of iPhones and U.S. cars if “naïve” Trump pursues trade war

U.S. president-elect Donald Trump would be a “naïve” fool to launch an all-out trade war against China, a Communist party-controlled newspaper has claimed.

During the acrimonious race for the White House Trump repeatedly lashed out at China, vowing to punish Beijing with “defensive” 45{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} tariffs on Chinese imports and to officially declare it a currency manipulator.

“When they see that they will stop the cheating,” the billionaire Republican, who has accused Beijing of “the greatest theft in the history of the world”, told a rally in August.

On Monday the state-run Global Times warned that such measures would be a grave mistake.

This news story put in an appearance on Internet site at 8:06 a.m. GMT on their Monday morning, which was 3:06 a.m. in New York — EDT plus 5 hours.  It’s another offering from Patrik Ekdahl — and another link to this article is here.

Australia’s Hidden Stimulus Boosts Economy as Currency Lags Commodity Rebound

Australian policy makers were publicly frustrated by the currency’s stubborn strength when commodities tumbled earlier this decade.  Now they’re conspicuously quiet as it fails to keep pace with resurgent resource prices.

Since the end of June, JPMorgan Chase & Co.’s real effective exchange rate for the Aussie has risen 4 percent, while Westpac Banking Corp.’s Australian export commodity index  has soared by 43 percent. The mismatch is another reason why central bank Governor Philip Lowe is comfortable sitting on his hands: he’s getting an easing of financial conditions without having to touch the monetary policy lever.

Indeed, money markets now see little chance the Reserve Bank of Australia will cut interest rates from the current record-low 1.5 percent next year; in fact they’re pricing in some possibility of a hike in November and December.

Normally, it’s a drop in the currency that gives a bit more stimulus to the economy; but in this case it has gone up — just by not as much as commodity prices — and that’s delivering the boost,”  said Sally Auld, head of fixed-income and currency strategy for Australia at JPMorgan.  “Given how important the whole terms of trade dynamic has been for the economy and the currency, it makes sense for the RBA just to watch and wait.”

This Bloomberg story was posted on their website at 12:00 p.m. MST on Sunday afternoon — and it’s the final offering of the day from Patrik Ekdahl — and I thank him on your behalf.  Another link to this article is here.

Utter devastation” after major quake, aftershocks hit New Zealand’s South Island

A powerful 7.8 magnitude earthquake pummeled central New Zealand early on Monday, killing at least two people, damaging roads and buildings and setting off hundreds of strong aftershocks.

Emergency response teams flew by helicopter to the region at the epicenter of the tremor, which struck just after midnight some 91 km (57 miles) northeast of Christchurch on the South Island, amid reports of injuries and collapsed buildings.

It’s just utter devastation, I just don’t know … that’s months of work,” New Zealand Prime Minister John Key told Civil Defence Minister Gerry Brownlee after flying over the coastal town of Kaikoura, according to Brownlee’s Twitter account.

He described landslips in the area as “just horrendous“. In a statement seen by Reuters, Key said of the likely damage bill: “You’ve got to believe it’s in the billions of dollars to resolve.”

Power lines and telecommunications were down, with huge cracks in roads, land slips and other damage to infrastructure making it hard to reach the worst-affected areas.

This story was posted on the Reuters website at 8:23 a.m. EST on Monday morning — and is certainly worth reading — and the embedded video clip [plus the photo sequence below it] is definitely worth watching.  State Highway 1, along with the railway line from Picton to Kaikoura — and maybe beyond, will be impassible for months.  Another link to it is here.  A second Reuters article on this earthquake is headlined “Double tectonic shifts may have teamed in New Zealand quake – experts” — and that is linked here.  Both are from Zero Hedge courtesy of Brad Robertson.

Soros More Than Doubles Stake in Barrick Gold as Shares Drop

After selling most of his stock in Barrick Gold Corp. in the second quarter, billionaire investor George Soros more than doubled his remaining holding in the mining company.

Soros Fund Management LLC bought 1.78 million Barrick shares in the third quarter, taking total holdings to 2.85 million, according to a regulatory filing. The fund rebuilt its stake in Barrick, one of the world’s two largest gold producers, after selling 94 percent of its holdings in the second quarter to cash in on the stock’s best first-half performance ever.

The billionaire investor’s purchase comes after Barrick began steps to cut costs and sell assets to lower its debt. The Toronto-based producer reported third-quarter earnings that topped analysts’ estimates even as gold prices posted their first quarterly decline this year.

Barrick shares have fallen to a seven-month low of C$19.86 as haven demand for gold wanes amid prospects of rising U.S. interest rates. Bullion has slipped more than 7 percent since June, in part because of speculation that U.S. President-elect Donald Trump’s pledge to increase infrastructure spending will widen the deficit and boost yields, hurting the appeal of non-interest bearing gold.

This gold-related Bloomberg story was posted on their Internet site at 4:19 p.m. Denver time yesterday afternoon — and was updated less than an hour later.  I found it embedded in a GATA release — and another link to it is here.


Here are three photos that Bob Anthony took at the famous Kirstenbosch National Botanical Gardens in Cape Town.  The last photo shows a couple of Egyptian geese, which are far more attractive than any of their cousins here in North America.  Click to enlarge.161115image002



Trading volume has been off the charts big [during the current reporting week] and it’s hard to imagine how the new COT report to be released this Friday won’t feature all-time weekly reductions in the commercial short positions in both markets. Since we still have a trading day to go [today – Ed] in this reporting week, I’ll save predictions until Wednesday’s article, but the improvement in market structure should be dramatic.  After all, the only reason gold and silver prices plunged like they did was expressly for the purpose of allowing the commercials to buy as many COMEX gold and silver as possible.

Having long expected the commercials to clean the managed money traders’ clocks in gold and silver, I can’t say I’m surprised at this recent price smash. And please take any alternative explanations for why gold and silver prices collapsed, away from COMEX positioning, and throw them out the highest window you can find. Further, the declines have come on such high volume that I suddenly find myself with a new worry, namely, that prices might turn up quicker than we’ve seen historically. I don’t know if we’re there yet, but we’re a heck of a lot closer in time and contract count than we’ve been is some time.Silver analyst Ted Butler: 14 November 2016

Using the dollar rally as cover once again, the bullion banks and their cohorts continued to press the Managed Money traders — and that was particularly evident in silver.  Gold, silver and platinum were all closed at new lows for this move down, as the heavy salami slicing continues.  All three of these precious metals had big intraday lows as well, much lower than their respective closing prices.

Here are the 6-month charts for all four, plus copper once again.  Copper closed about unchanged yesterday, but that’s over 20 cents off its Friday high tick.  It remains to be seen how long it takes the Commercial traders to ring the cash register on the Managed Money traders in this metal.161115-6-month-gold


And as I type this paragraph, the London open is less than ten minutes away — and I note that gold rallied about ten bucks by 9:20 a.m. China Standard Time on their Tuesday morning — and then was sold down until 11 a.m. over there.  It chopped sideways until 2 p.m. — and has been moving unsteadily higher since, but has been rolled over as the London open approaches — and is up only $4.40 the ounce currently.  Silver was up about 20 cent by 9:20 a.m. — and it was turned lower as well — and is up 3 cents at the moment.  Platinum was up 15 dollar by 9:20 a.m. as well — but it is heading unsteadily lower as of this writing — and is up only 6 bucks.  Palladium has been trading mostly lower, but began selling off in earnest around 2 p.m. CST — and is down 7 dollars.

Net HFT gold volume is pretty high at 43,500 contracts — and that number in silver is around 13,300 contracts.  Both number are pretty heavy for this time of day, so I’d guess that those earlier rallies ran into the usual short buyers of last resort.  The dollar index chopped mostly sideways until exactly 3:00 p.m. CST — and then it got shoved off a cliff — and is down 25 basis points at the moment.  That drop in the dollar index certainly isn’t reflected in the current precious metal price action, but when ‘da boyz’ are out and about, what the dollar index is doing is mostly irrelevant.

Today, at the close of COMEX trading, is the cut-off for this Friday’s Commitment of Traders Report — and it will show that it will be one for the record books, as its a given…as Ted said in his quote above…that the one-week changes will be historic.

And as I post today’s column on the website at 4:00 a.m. EST this morning, I see that the gold price turned higher shortly after the London open — and is up $7.30 the ounce.  Silver is now up 14 cents.  Platinum is up 15 dollars — and palladium was up 4 bucks, but is now back to unchanged — and would have easily broken above $700 the ounce, except the usual short buyer/long seller of last resort appeared just in the nick of time.

Net HFT volume is up to just under 54,000 contracts — and that number in silver is up to 15,500 contracts — and it’s obvious that all these rallies are not going unopposed by ‘da boyz’.  The dollar index is now heading south with a vengeance — and is down 48 basis points currently.

I have no idea what the Tuesday trading session will bring, either up or down — and is always the case, nothing will surprise me when I check the charts later this morning when I roll out of bed.

That’s all I have for today — and I’ll see you here tomorrow.


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