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Business News & Views - Metals, Markets, Shipping, Energy, More

Discussion in 'Coffee Shack (Daily News/Economy)' started by searcher, Aug 25, 2017.



  1. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Mississippi River Shipping Backlog Hits Farmers

    October 2, 2017 by Reuters

    [​IMG]
    File photo courtesy American Maritime Partnership

    By Karl Plume CHICAGO, Oct 2 (Reuters) – U.S. farmers are running out of options for their just-harvested corn and soybeans as delays on the Mississippi River, the main conduit for crops to export markets, cause shipping backlogs, while grain storage on the river’s banks is filling up.

    Low river levels and back-ups at aging locks have slowed navigation on the Mississippi and its tributaries and driven the cost of hauling Midwestern crops to Gulf Coast export terminals to near-record highs.

    As newly harvested supplies reach the market, elevators with barges on hand are prioritizing loading soybeans while storing corn if they have space, traders and barge brokers said.

    Cash soybean premiums at several large river terminals in the St. Louis area fell to the lowest point since at least 2011, while soy processors and inland elevators also dropped bids amid ample available supplies, grain merchants said.

    “There are a lot of trickle down effects that are being felt throughout the whole industry. It starts with the low water on the rivers and the trouble getting bushels where they need to be in exporters’ hands,” said Terry Linn, analyst at Chicago brokerage Linn and Associates.

    The grain handling woes come as farmers are beginning to harvest bumper corn and soybean crops amid weakening harvest-time prices, with soybean stocks at a decade high and corn supplies at the biggest in 29 years.

    “People are running out of space. Everybody’s been stuffing their bin space with corn and shipping beans. Now they can’t find enough barges when they need them to move the beans,” said a barge broker who asked not to be named.

    Shippers that have barges on hand are loading them with less grain to keep them from grounding in parched rivers, while barge lines are reducing the number of barges per tow to navigate the narrower shipping channel.

    Barges in the Memphis to Cairo, Illinois, market traded at an all-time high while spot barges on the lower Ohio river were booked at a level reached just once, in September 2014.

    Exacerbating the situation, the Ohio River was temporarily closed on Monday for emergency lock repairs, according to the Waterways Council industry group.

    The lock has resumed operating, but a queue of more than 65 towboats was waiting to pass, a back-log that could take more than five days to clear, barge operator American Commercial Line said in a daily newsletter.

    (Reporting by Karl Plume in Chicago; Editing by James Dalgleish and Dan Grebler)

    (c) Copyright Thomson Reuters 2017.

    http://gcaptain.com/mississippi-river-shipping-backlog-hits-farmers/
     
  2. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Global Stocks Hit Fresh Record High As Dollar Rally Fizzles

    [​IMG]
    by Tyler Durden
    Oct 3, 2017 6:57 AM

    It's deja vu all over again.

    In a repeat of yesterday's session, where US equities and the dollar levitated in a one-way trade, Tuesday's muted session - where in addition to closed China and South Korean markets, Germany's Dax is also shut for holiday - has seen early dollar and European equity strength, while the S&P is set for new record highs amid higher E-minis and a VIX that is again lower after 5 consecutive days of declines.

    It is also another day for global records: world shares hit their latest all time high on Tuesday, while the dollar was the highest in 6 weeks as encouraging U.S. data lifted it in tandem with global bond yields. MSCI’s 47-country ‘All-World’ index was pushed to the fresh peak as Europe’s main bourses added to gains made in Asia and after Wall Street set its own record close again overnight. It was the tenth new high since late July alone and extends the year’s blizzard of records that started in February to more than 40 according to Reuters, with no sign it is about to run out of steam yet.

    That said, both European stocks and the dollar lost some momentum on Tuesday as concerns reemerged about the probability of Trump's tax cuts. The euro drifted as tensions bubbled in Catalonia, with the common currency sliding briefly below 1.16 before rebounding.

    [​IMG]

    Europe's Stoxx 600 Index was mixed, and unchanged so far on Tuesday despite US stocks hitting new all time highs and amid a rally in Asian markets. Materials found a bid in Europe, as the sector
    outperforms, led by Anglo American, buoyed by its upgrade at HSBC. Yesterday’s volatility seen in Spain, and in the IBEX has slowed, with the Spanish stock index trading marginally lower this morning, as many investors await clarification and insight into further developments in regards to the Catalonian region.

    Japanese shares closed at their highest in more than two years, while Chinese stocks in Hong Kong surged, reopening after a one day vacation and boosted by the weekend's targeted RRR-cut by the PBOC. Developing nation equities also jumped.

    SEB investment management’s global head of asset allocation Hans Peterson pointed to strong economic and trade data and signs that firms in large economies like the United States and Europe were finally increasing investment spending. “The fun thing about that is that is will take over from the consumption cycle and means the (global business growth) cycle will be longer than consensus. So I think that is the mechanism that is driving equities at the moment. So we are long equities, we are long emerging markets and we are long Europe. We are risk on.”

    The greenback pared an increase but remained higher against almost all its major counterparts. As Bloomberg's FX strategist Vassilis Karamanlis writes this morning, dollar bulls may need to wait for U.S. jobs data and a speech by Janet Yellen to find the fresh catalyst that could finally push the Bloomberg Dollar Spot Index above its 2017 trendline resistance. The gauge pared early gains as it failed to escape this year’s downtrend. Further hawkish remarks by the Federal Reserve chair or strong employment data due Wednesday may do the trick, yet for now investors are happy to take some chips off the table. The dollar's inability to breach the technical resistance weighed on sentiment as the euro and pound decisively rose from their day lows, which saw the common currency below $1.1700 for the first time since Aug. 17, and sterling at the lowest in nearly three weeks. The market remains long gamma in euro-dollar and thus any dips are bound to find fading interest.

    As a result, profit taking was the name of the game as soon as London trading was underway, according to currency traders. Still, Goldman analysts released a report overnight, in which they see the greenback as having more room to run, thanks to solid growth prospects and the chance that Fed interest-rate hikes will prove more aggressive than market players currently anticipate. As a result, Goldman sees the dollar rising particularly against the euro, which could be hurt by political concerns amid the Spanish woes over Catalonia and by elections in Austria and Italy in coming months.

    Meanwhile, the yen weakened to 113.20 per dollar, just a breath away from its Sept. 27 low at 113.26. While USD/JPY follows the market’s latest narrative of a strong dollar, risk reversals buck the trend, diving further into bearish territory for the greenback. Yen calls find good demand on structures expiring post the Oct. 22 election in Japan, while calendar trades are also in play.

    “Investors have capacity to buy as the fiscal second half begins, with dip- buying potential for 10-year yields around 0.8%," says Tadashi Matsukawa, head of fixed-income investment at PineBridge Investments Japan; "Even with strong data, inflation is subdued.”

    "With views strongly intact that BOJ will cap the 10- year yield around 11 basis points, 8 basis points is where most investors are looking to buy as there is very little downside risk," says Satoshi Shimamura, head of rates and markets in the investment strategy department at MassMutual Life Insurance Co. in Tokyo; "Some may even wait until 9 basis points. Until all this appetite has been met, it’s hard to see yields falling.”

    Cable traded near session lows in the mid 1.32 range after EU's Barnier said there is "still a serious divergence on financial settlement on Brexit" while European president Jean-Claude Juncker said the UK "have not yet made sufficient progress" in Brexit talks. Not helping was news that U.K. construction unexpectedly shrank in September, moving below the the 50 level that divides expansion from contraction.

    Japanese bonds were mixed after a soft auction for benchmark 10-year notes as investors remained cautious about buying at the start of the fiscal second-half. Borrowing costs across the euro zone nudged higher too. Southern European bonds continued to underperform meanwhile as political tensions remained in Spain after Sunday’s independence vote in Catalonia was marred by police violence. In the US, the 10Y yield rose 2bps to 2.36%, while a stronger view that the Federal Reserve will raise U.S. interest rate for a third time this year in December kept two-year U.S. government bond yields hovering at a 9-year high.

    WTI and Brent crude futures have seen subdued trade following the 2% sell-off seen in oil markets yesterday, which many touted to be on the news that OPEC oil output had risen last month by 50,000 BPD. The bearish push was halted by resting bids ahead of 50.00/bbl, as the support level was evident. "The fourth quarter is not too kind to the price of oil, as we switch from summer demand to expectations of winter demand,” said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

    Gold’s bearish September continued into October, as safe haven flows further reverse, with the market now testing the
    1268.00 area, which was prevalent before the North Korea related rally.

    Market Snapshot
    • S&P 500 futures up 0.06% to 2,527.75
    • E-Mini Nasdaq 100 futures up 0.1%
    • VIX Index drops 1.2% after five days of declines
    • MSCI Asia up 0.5% to 162.19
    • MSCI Asia ex Japan up 0.6% to 534.62
    • Nikkei up 1.1% to 20,614.07
    • Topix up 0.7% to 1,684.46
    • Hang Seng Index up 2.3% to 28,173.21
    • Shanghai Composite up 0.3% to 3,348.94
    • Sensex up 0.6% to 31,483.30
    • Australia S&P/ASX 200 down 0.5% to 5,701.44
    • Kospi up 0.9% to 2,394.47
    • STOXX Europe 600 unchanged at 390.12
    • German 10Y yield rose 3.4 bps to 0.485%
    • Euro up 0.08% to $1.1742
    • Italian 10Y yield rose 4.5 bps to 1.863%
    • Spanish 10Y yield rose 1.7 bps to 1.711%
    • Brent Futures up 0.04% to $56.14/bbl
    • Gold spot down 0.01% to $1,270.96
    • U.S. Dollar Index up 0.1% to 93.65
    Bulletin Headline Summary From RanSquawk
    • In FX, the Greenback’s gains have slowed against its major counterparts. RBA kept rates unchanged as expected and highlighted the firmer currency
    • EU equities trade subdued following the Nikkei seeing highest level since Aug’16, as a weaker JPY aids the push
    • Looking ahead, highlights include: US vehicle sales and APIs
    Top Headline News
    • The president will travel on Wednesday to Las Vegas after the mass shooting there. The 64-year-old gunman had no connection to international militant groups, the FBI said, rebutting a claim of responsibility by Islamic State.
    • The White House ruled out talks with North Korea over its nuclear arsenal just days after Secretary of State Rex Tillerson said U.S. was in direct communication with Pyongyang. This was the latest sign that Trump and his top diplomat have different views on the best way to address North Korea’s accelerating nuclear and ballistic missile programs
    • The White House is showing "softness" on ending a $1.3 trillion federal tax deduction filers get for their state and local taxes, Senator Bob Corker said Monday, questioning whether GOP has fortitude for tax overhaul
    • Tesla Falters With Model 3 as Initial Output Trails Forecast
    • Qatar Fund Is Said to Weigh Asset Sales as It Looks Homeward
    • Equifax Says Additional 2.5m U.S. Consumers Potentially Impacted
    • Crisis in Spain: separatist activists are taking to the streets of Barcelona to protest the police violence that marked Sunday’s vote and reinforce their demands for a split with Spain after winning an illegal referendum at the weekend
    • Some analysts are projecting a small increase in auto sales for the month, which would be a first in 2017. September has one more selling day than a year ago, though, so even if the actual number of vehicles sold ticks up, the seasonally adjusted annualized rate (SAAR) probably will drop again
    • Equifax Inc.’s former CEO Richard Smith, who stepped down on Sept. 26, is expected to be the sole witness at a U.S. House Energy and Commerce subcommittee hearing to examine the company’s massive data breach
    • The dollar rose for a second day after U.S. factory data released Monday beat estimates, supporting the case for the Federal Reserve to raise interest rates. The Catalan independence vote and speculation about a more hawkish new Fed chief continued to support the dollar
    Asia equity markets were mostly higher with Hang Seng (+2.25%) the outperformer as it played catch up on return from holiday and took its first opportunity to celebrate news of the PBoC’s targeted RRR cut which according to sellside calculations will release hundreds of billions of liquidity into the (stock) market. The Nikkei 225 (+1.05%) was also positive with sentiment underpinned amid upside in USD/JPY and after the fresh intraday records set by all the major US indices. Conversely, Shanghai Comp and KOSPI are shut for the entire week, while ASX 200 (-0.6%) underperformed with weakness in energy names after oil slipped over 2% yesterday and with financials dampened after QBE raised it catastrophe claims allowance due to the recent hurricanes.

    Top Asian News
    • Anil Ambani’s Telecom Unit Heads for Record Low as Merger Fails
    • Kansai Electric Bellwether for Koike’s ‘Party of Hope’
    • China Stock Rally Finds a New Gear as Shares Soar Most in a Year
    • Mobike, Ofo Investors Are Said in Talks to Merge China Startups
    • Steel Boom Drives 400% Surge for Suppliers of Critical Niche
    • India Bond-Related Flows Keeping Rupee Losses in Check: Traders
    • Japan’s Corporate Foreign Bond Issuance Hits Record on M&A
    In Europe, equity markets trade largely sideways across the board, as many Eurex participants are off their desks amid the German holiday. European bourses have failed to gain traction from Asian and American sessions, where the Nikkei hit its highest level since August 2015, following another record for the S&P500. Materials have however found a bid in Europe, as the sector outperforms, led by Anglo American, buoyed by its upgrade at HSBC. Elsewhere, yesterday’s volatility seen in Spain, and in the IBEX has slowed, with the Spanish stock index trading marginally lower this morning, as many investors await clarification and insight into further developments in regards to the Catalonian region. Fixed Income markets have continued to trade bearishly, although volumes are lighter due to the German Unity Day Holiday, alongside a day that lacks much in the way of underlying tier one data releases. Gilts did nudge higher on the back of the surprise contraction in the UK construction PMI.

    Top European News
    • Ryanair Adds Fewest Customers Since March After Scrapped Flights
    • Spain’s Crisis Deepens as Catalonia Secession Clock Ticks Down
    • May’s Brexit Budget Offer Is Said to Be Conditional on Trade
    • EU Demands More U.K. Brexit Clarity Before Approving Trade Talks
    • U.K. Construction Unexpectedly Shrinks as Confidence Weakens
    • UBS Starts French JV for Family Office, Private Equity
    In currencies, cable was offered following the UK Markit Construction PMI, falling below 50.00 and printing the lowest figure since July 2016, at 48.1. Cable fell through yesterday’s low as a result, and August’s high could now behave as temporary support for the pair. The USD has given back ground against its major counterparts, following the bullish pressure seen through yesterday’s European and US sessions. The DXY fell short of the push toward 94.00, as EUR/USD found support at the 1.17 handle. USD/JPY saw a surge post European trade yesterday, with the pair breaching 113.00, as a clear break of the long-term 2017 resistance trendline has been confirmed. Investors will look toward July highs around 114.50 as the next bullish target. The outperformance in the Nikkei was spurred by the increased bullish pressure in USD/JPY, with talk of large fund interest in the pair, which continues to look towards September’s high, with further resistance likely at the 114.50 area. For the Euro, global political conditions have aided to the support seen in the EUR this morning, as Spanish/ Catalonian unrest wanes, with aforementioned bids arriving in EUR/USD. EUR/GBP has largely moved sideways as the greenback’s volatility dictated trade. Meanwhile for the OZ and Kiwi, the RBA was the headline of the Asian session, where rates were kept on hold at 1.50%, as expected. Concerns of the economy continued, with the bank stating that a strengthening AUD would slow economy and restrain price pressure. Further reiterating ‘it judges steady policy is consistent with the growth and inflation target. AUD saw a bearish push on the comments, as the growing currency concerns further diminish the likelihood for a RBA move. AUD/USD slipped through 0.78 and looks back toward the 2016 trading range. Kiwi suffered overnight, as New Zealand NZIER Confidence fell to an 18-month low, triggering some early Asian selling, as further pressure was witnessed as a result of the dovish skew from the RBA

    In commodities, WTI and Brent crude futures have seen subdued trade following the 2% sell-off seen in oil markets yesterday, which many touted to be on the news that OPEC oil output had risen last month by 50,000 BPD. The bearish push was halted by resting bids ahead of 50.00/bbl, as the support level was evident. Gold’s bearish September continued into October, as safe haven flows further reverse, with the market now testing the 1268.00 area, which was prevalent before the North Korea related rally.

    Looking at the day ahead, we have the Eurozone PPI (0.3%, Exp. 0.1% mom,; 2.5% Y/Y, exp. 2.3%) and UK’s Markit construction PMI this morning (48.1, Exp. 51.0, Last 51.1). Over in the US,
    there is total and domestic vehicle sales stats for September. The BOE
    will publish its record of the Financial policy committee. Over in the
    US, the Fed’s Powell will speak on regulatory reform.

    US Event Calendar
    • Wards Total Vehicle Sales, est. 17.2m, prior 16m; Domestic Vehicle Sales, est. 13m, prior 12.5m
    DB's Jim Reid concludes the overnight wrap

    Yesterday saw a battle between safe haven core bond markets wanting to rally or hold in after the Catalonian vote and equities wanting to rally due to the generally strong PMIs/ISMs. Below we update our PMI vs YoY equity analysis after yesterday's numbers and on balance many equity markets are now 'cheap' albeit with the usual caveats. Before we get there let’s recap the main market moves and stories.

    Turning first to the initial reactions following Catalonia’s independence vote. The EU spokesman Margaritis Schinas noted “under the Spanish constitution, the vote was not legal” and as President Juncker noted earlier “this is an internal matter for Spain that has to be dealt with in line with the constitutional order of Spain”. Locally, the leader of the Ciudadanos party (Albert Rivera – ally of PM Rajoy) called for new regional elections as “this is the only possible way we can truly go to vote and not be kidnapped as we are at the moment by this coup against democracy”.

    In terms of the markets reactions, Spain’s IBEX sold off 1.21% (the weakest day since August) - led by the financials sector, the Euro dropped -0.69% and Spain’s 10y bond yields jumped 8.8bp. Elsewhere, peripheral bonds were also impacted, with Italian and Portugal’s 10y yields up c4bp, but core bond yields were lower to little changed, with UST 10y up +0.7bp, while Bunds (-1.3bp), OATs (-1bp) and Gilts (-3.5bp) fell slightly. Notably, Bunds traded with an intraday range of c5bp, before the spread between Bunds and Spanish 10y yields settled at 124bp – highest since early June.

    For those who may have missed it, DB’s Marc’s De-Muzion published a report “Catalonia: What next?” He notes that if Catalan government declares independence (potentially on 6 October), then the Spanish government has little choice but to trigger Article 155 and withdraw regional government’s authority in Catalonia and call for early regional elections. If the Catalan government does not declare independence, the regional government would most likely dissolve and early regional elections would be called. Ultimately, the solution to the Catalan situation has to come via lengthy, constructive dialogue and negotiations.

    Overnight, White House spokeswoman Sanders has said “now is not the time to talk” with North Korea over its nuclear arsenal but that’s not really having much impact. Markets are trading on the firmer side in Asia with the ASX 200 down -0.41% being an exception while the Nikkei is up +0.77%. The Hang Seng has jumped +1.59%, partly reflecting a catch up effect as the market reopened post holidays as well the delayed positive reactions following cuts to bank reserve requirements (Banks +2.87%) and stronger than expected Chinese manufacturing PMI over the weekend. Note that Chinese bourses and the Kospi are closed for the week.

    Turning to President Trump's tax plan. National Economic Council Director Gary Cohn has provided a bit more clarity, noting that the cUS$2.6trln of offshore profits sitting in lower tax countries may be subjected to a one-time tax in the “10% range”, although tax industry experts suggest 15% may be more likely. Elsewhere, Moody’s has confirmed that the current tax plan is “likely credit negative” for the US government as “tax cuts would not be offset by equivalent cuts to spending”.

    Quickly recapping yesterday’s market performance now. US bourses strengthened further, with the S&P up +0.39% to another record high, with gains led by the materials, health care and financials sector. Elsewhere, the Dow (+0.68%) and Nasdaq (+0.32%) also advanced modestly. Over in Europe, excluding Spain’s IBEX (-1.21%), other regional indices were all higher, with the Stoxx 600 (+0.51%), DAX (+0.58%), FTSE 100 (+0.90%) and FTSE MIB (+0.51%) seeing firm days. Notably, the VIX has remained below 10 for the fourth consecutive day and is now (9.45) the lowest since late July and getting closer to the all time lows again after the North Korea wobbles destroyed the peace in early August.

    Turning to currencies, the US dollar index gained 0.52% following the stronger than expected ISMs, while Sterling fell 0.91% versus the Greenback, likely impacted by the softer manufacturing PMIs and concerns on political stability as the annual Conservative Party conference began. In commodities, WTI oil fell -2.11% following reports of higher OPEC output last month, in part as Libya’s oil fields are back online coupled with a lower OPEC production compliance rate of 82% (vs. 88% previous). Elsewhere, precious metals were slightly lower (Gold -0.67%; Silver -0.42%), while other LME base metals (Zinc +2.34%; Copper +0.19%; Aluminium -0.05%) were broadly higher yesterday.

    Away from the markets and onto central banker’s commentaries. On inflation, the ECB’s Praet noted the “overall inflation developments, despite the solid (economic) growth, have remained subdued” and that “a very substantial degree of monetary accommodation is still needed for underlying inflation pressure to gradually build-up”. Notably, he was quite vocal on forward guidance, saying “….in conditions in which uncertainty is high, frontloading the accumulation of a given stock of purchases more forcefully signals the central bank’s commitment to inject the degree of accommodation necessary to support the recovery..”. Over in the US, the Fed’s Kashkari reiterated his preference to “not to raise rates again until we actually hit 2% core PCE inflation” and that “I believe the most likely cause of persistently low inflation are additional domestic labour market slack and falling inflation expectations”.

    Elsewhere, data wise yesterday the most significant releases of note were the September manufacturing PMIs and ISM data in Europe and the US. With regards to the former, the final print for the Euro area was revised down a very modest 0.1pts to 58.1 however that print still puts it at the highest level in more than six and a half years. As a reminder, the August reading was 57.4. What was perhaps most notable was the lack of any negative impact of a stronger euro which you would expect to have the most impact on the manufacturing sector.

    Indeed the new orders component rose another 0.2pts to 58.5 and a 3-month high. The employment component also hit a 20-year high at 56.5 and the backlog of work was also up at a new cyclical high. At a country level, Germany was left unrevised at 60.6 and France was revised up 0.1pts to 56.1 – putting both at 77- month highs. There were also significant milestones hit for the Netherlands (79- month high) and Greece (111-month high). Meanwhile, the data for the periphery revealed a much better than expected reading for Spain (+1.9pts to 54.3 vs. 53.0 expected – a 3 month high) offset by a slightly softer than expected reading for Italy (unchanged at 56.3 vs. 56.8 expected). The UK also saw a 0.8pt decline to 55.9 (vs. 56.2 expected).

    Across the pond, there was a huge positive surprise in the ISM reading for the US which came in at 60.8 which compares to expectations for 58.1. The reading was also up a full 2pts from August and is the highest since May 2004. New orders also surged to 64.6 (from 60.3) and hit the highest in 7- months while employment printed at 60.3 and the highest since March 2011. The manufacturing PMI was confirmed at 53.1 (+0.1pts from the flash). Notably, the two recent storms had a modestly positive impact on the index by causing longer lead times for supplier deliveries and additional new orders, yet the underlying improvement was still broad-based across the survey.

    Looking at the day ahead, we have the Eurozone PPI (0.1% mom, 2.3% yoy expected) and UK’s Markit construction PMI this morning. Over in the US, there is total and domestic vehicle sales stats for September. Onto other events, there will be numerous speakers at the UK’s Conservative Party conference, including: Home secretary Rudd, Trade secretary Fox, Brexit secretary David Davis and Foreign secretary Johnson. Then the BOE will publish its record of the Financial policy committee. Over in the US, the Fed’s Powell will speak on regulatory reform.

    http://www.zerohedge.com/news/2017-10-03/global-stocks-hit-fresh-record-high-dollar-rally-fizzles
     
  3. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Frontrunning: October 3

    [​IMG]
    by Tyler Durden
    Oct 3, 2017 7:52 AM

    • Gunman had ‘bump-stock’ device that could speed fire (AP)
    • Supreme Court Takes On Partisan Gerrymandering (WSJ)
    • Tom Petty, 'distinctively American' rocker, dies aged 66 (Reuters)
    • White House: Now Isn’t the Time to Talk With North Korea (WSJ)
    • Dems plan to make gun control an issue in Nevada (The Hill)
    • Trump Heads for Puerto Rico After Tentative Storm Response (BBG)
    • The GOP Tax Plan Is Already Hitting Speed Bumps (BBG)
    • White House Close to Ending Mueller Probe Backlog (BBG)
    • Gravitational wave pioneers win 2017 Nobel Physics Prize (Reuters)
    • South Korea Phones the North Twice a Day. No One Answers (BBG)
    • Facebook Estimates 10 Million Users Saw Russian-Backed Ads (WSJ)
    • 26 Recession-Free Years Hide a Darker Picture for Australia (BBG)
    • Google Displayed Fake News in Wake of Las Vegas Shooting (BBG)
    • These Suburbanites May Have No Fracking Choice (BBG)
    • HSBC, Deutsche Bank Pay Penalty for FX Rate Manipulation (Zacks)
    • Why You’re Paying Even More for Premium Gas (BBG)
    • Qatar Fund Is Said to Weigh Asset Sales as It Looks Homeward (BBG)
    • Ireland asks Europe's top court to rule on EU-U.S. data transfers (Reuters)
    • Putin Is Filling the Middle East Power Vacuum (BBG)
    • China proven gold reserves at 12,100 tonnes at end-2016 (Reuters)
    • Trump May Have Found Paths to Save Coal and Hobble Clean Energy (BBG)
    • Rich Men With Extreme Politics Have the Happiest Marriages (BBG)
    • Macy's, J.C. Penney shares sink after news of faltering Nordstrom deal talks (Marketwatch)
    • How UBS Became Home to Half the World’s Billionaires (BBG)
    Overnight Media Digest

    WSJ

    - Tesla Inc badly missed its goal of building 1,500 Model 3 cars in the third quarter, the first sign that the production ramp-up for the new sedan isn't going as smoothly as planned. on.wsj.com/2hHMaor

    - Facebook Inc on Monday said it estimates 10 million people saw ads it has discovered on its platform paid for by Russian entities, but warned that it may not have uncovered all malicious activity that attempted to interfere in the American political process. on.wsj.com/2hI7r1u

    - Jeff Immelt, the longtime leader of General Electric Co , is stepping aside as chairman and leaving the board of the industrial giant several months ahead of schedule. on.wsj.com/2hIjVWC

    - Uber Technologies Inc's board is bracing for a contentious battle over voting control after two investors, Shervin Pishevar and Steve Russell, threatened legal action ahead of a planned vote Tuesday. on.wsj.com/2hGU8hJ

    - Sony Corp said the head of its videogame unit, Andrew House who steered PlayStation 4 sales to the top spot globally, will leave the Japanese conglomerate by the end of this year. on.wsj.com/2hJSQm1


    FT

    The failure of Britain’s Monarch Airlines on Monday left more than 100,000 tourists stranded abroad, prompting the government to start flying them back in what was billed as the country’s biggest peacetime repatriation effort.

    The Standards Board for Alternative Investments on Tuesday set out its plans for a new tool to help investors and managers compare costs across investments after an effort to improve fee transparency by alternative investments — including hedge funds, private equity, infrastructure and derivatives — fell short.

    The UK’s National Audit Office launched an investigation into government money given to Learndirect, in a move that turns up the pressure on the country’s largest adult training and apprenticeships business.

    Three former senior Tesco Plc executives carried on “conniving and manipulating” after a hole in the retailer’s accounts began “spiralling out of control” during the first half of 2014, a court heard on Monday.


    NYT

    - General Motors Co said it will add at least 20 electric vehicles to its lineup by 2023. nyti.ms/2xW30pY

    - Monarch Airlines, a struggling British low-cost carrier and tour operator, collapsed into bankruptcy early Monday, ceasing its flights and forcing the government to step in and bring home more than 100,000 passengers stranded abroad. nyti.ms/2xUqPOa

    - Veteran rocker and songwriter Tom Petty died on Monday at the age of 66 after suffering a cardiac arrest. nyti.ms/2fFuoOj

    - A gunman on a high floor of a Las Vegas hotel rained a rapid-fire barrage on an outdoor concert festival on Sunday night, leaving at least 59 people dead and injuring 527 others, in one of the deadliest mass shootings in American history. nyti.ms/2x9D9eU

    - Federal investigators and officials at Facebook believe that Russian ads on the social media platform during last year's American presidential election were part of a highly coordinated misinformation campaign linked to the Internet Research Agency, a secretive company in St. Petersburg, Russia. nyti.ms/2g4eVIj

    Canada

    THE GLOBE AND MAIL

    ** Jean Coutu Group PJC Inc has struck a friendly C$4.5 billion ($3.59 billion) deal to sell its pharmacy business to grocer Metro Inc which would see Jean Coutu shareholders get C$24.50 a share, 75 percent in cash and 25 percent in Metro stock. tgam.ca/2fHnMiI

    ** Magna International Inc has settled a 20-year-old lawsuit that sought damages of C$2.6 billion against the company after it sold its airbag business in 1997. The company has agreed to pay C$25 million to Windsor, Centoco Holdings Ltd and KS Centoco Ltd, and relinquish a 23 percent stake in steering-wheel manufacturer KS Centoco as part of the settlement. tgam.ca/2fFWyJh

    ** Brandon Stranzl, executive chairman of Sears Canada Inc , has accused the company of creating a sale process that has sidelined his bid to keep the insolvent retailer operating. Stranzl says Sears' decision to sell its "crown jewels" - among them its 11 best stores - and let go of 1,200 more employees was made without consulting him. tgam.ca/2fHAcqH

    NATIONAL POST

    ** Canada's largest real estate investment trust, RioCan , is putting C$2 billion of its holdings, comprising about 100 properties, onto the market over the next two to three years as it plans to focus on six core markets where there is more opportunity for growth. bit.ly/2fGNfsF

    ** Scotia Capital Inc, a unit of Bank of Nova Scotia , and Alberta Investment Management Corp (AIMCo) said they would cut their stake in the owner of Toronto Stock Exchange to less than 5 percent each. bit.ly/2fGXehq

    ** A proposal that would allow U.S. companies to immediately write off capital investments, part of a sweeping tax-reform plan announced by the White House last week, could put Canadian companies at a further disadvantage to their southern counterparts, tax experts say. bit.ly/2fH2eCR


    Britain

    The Times

    -Home Secretary Amber Rudd, has hired pollster Sir Lynton Crosby to help to craft her next election campaign in a move that will fuel speculation she is preparing a leadership bid. bit.ly/2wuDELW

    -The Financial Conduct Authority is facing fresh demands to abandon the secrecy it has attached to a review of Royal Bank of Scotland Group Plc's restructuring division after it emerged that it had commissioned the report with a view to making it public. bit.ly/2wuiRZc

    The Guardian

    -Three former Tesco Plc directors were repeatedly warned by their juniors that the UK chain was facing a multimillion-pound hole in their profits and yet they carried on "conniving and manipulating figures" rather than admitting to the problem,a court heard. bit.ly/2fLXFKU

    -The UK's biggest peacetime repatriation is under way after the collapse of Monarch Airlines, with 110,000 customers to be brought home on specially chartered planes and a further 750,000 told that their bookings have been cancelled. bit.ly/2fLzz3a

    The Telegraph

    -Brexit secretary David Davis plans to retire in 2019 and leave Boris Johnson to steer the United Kingdom through the transitional period. bit.ly/2fMvfAB

    -General Electric Co CEO Jeffrey Immelt retired nearly three months ahead of schedule. Immelt announced plans to step down as chairman and chief executive of the company after 16 years in June. He had said he would hand over the CEO post in August and would leave in December. bit.ly/2wttFH1

    Sky News

    -Uber's regional manager for northern Europe Jo Bertram has quit barely a fortnight after the ride-hailing app was stripped of its licence in London. bit.ly/2fMf1HM

    -Environment Secretary Michael Gove has confirmed the Government is working with the industry to see how a "reward and return" scheme could work to tackle plastic pollution in the world's oceans. bit.ly/2wufyRT

    The Independent

    -Conflicting reports about the death of legendary singer Tom Petty emerged after he experienced a heart attack. The singer-songwriter was reportedly rushed to the UCLA Santa Monica hospital on Monday after being found unconscious in his Malibu home. ind.pn/2wvfuB4

    -At least 50 people have been killed and more than 400 were transported to hospital after a gunman opened fire on crowds at a music festival in Las Vegas in the worst mass shooting in US history. ind.pn/2wtumjD

    http://www.zerohedge.com/news/2017-10-03/frontrunning-october-3
     
  4. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    DB - Opening Bell: 10.3.17
    https://dealbreaker.com/2017/10/opening-bell-10-3-17/

    Naked Capitalism Links 10/03
    https://www.nakedcapitalism.com/2017/10/links-10317.html

    SA - Market News Live Feed 10/03
    https://seekingalpha.com/market-news

    TRB - Hot Links: The Enemy 10/03
    http://thereformedbroker.com/2017/10/03/hot-links-the-enemy/

    TBP - 10 Tuesday AM Reads 10/03
    http://ritholtz.com/2017/10/tuesday-reads-40-2/

    CWS - Morning News: October 3, 2017
    http://www.crossingwallstreet.com/archives/2017/10/morning-news-october-3-2017.html

    MtM - Dollar Retains Firm Tone, Spanish Markets Stabilize 10/03
    http://www.marctomarket.com/#!/2017/10/dollar-retains-firm-tone-spanish.html

    SA - Wall Street Breakfast: Hurricane Impacts On The Economy? 10/03
    https://seekingalpha.com/article/4111260-wall-street-breakfast-hurricane-impacts-economy
     
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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    I Know What the Economy Did Last Summer Part 1 : Carmageddon and the Retail Apocalypse


    -- Published: Tuesday, 3 October 2017

    By David Haggith

    Summer closed in a whirlwind of weather chaos for the United States and its territories. At the start of the summer, the US economy began to show signs that it was flying apart. The two most obvious were the big blowouts in the auto industry and in retail, not all of which could be attributed to a shift to online sales.

    Carmageddon crashes on
    The auto industry rolled over this year and began a decline similar to the one we experienced at the start of the Great Recession. (See “Carmageddon Crashes into ‘the Recovery’ Right on Schedule.”)

    In response, car markers started offering record incentives (like $0 down, 0% interest on a 80-month loan), which brought an improvement to sales in July. You have to ask, just as I did back in 2007, “What is the end game when such incentives take profit down to nil?”

    Used car prices, on the other hand (not having such major incentives), plunged to their lowest level since 2009. New car prices have also fallen all year (as another part of the major incentives) and dropped almost a thousand dollars on average just between June and July (as part of the incentives package).

    Even with such pricing and financing incentives, one firm, SouthBay Research, threw cold water on the Census Bureau’s July sales report, declaring the figures “unbelievable.”

    Over the summer, delinquencies also spiked on “deep sub-prime auto loans” (now matching — like so many other things in the auto industry — their crisis-era milestone from 2007). Delinquencies rose across all credit scores, but these things always hit worse at the bottom and eventually work their way up. Is it any wonder “deep sub-prime” delinquencies are up, given the old 2007 tricks that dealers and financiers began offering this summer as yet another incentive? Look at the following ad:

    [​IMG]

    That’s right. If you have a really bad credit score, you get an extra $1,500 off! Let’s bait the people who can least afford to purchase a $40,000 truck into taking out a loan by offering them a reward for having bad credit.

    It was hurricanes to the rescue this year however, as Harvey and Irma wiped out something like a million automobiles. Those will for the most part be quickly replaced, effectively shifting the auto manufacturers’ problems for this year over to the insurance companies who will pay for most of that replacement and to uninsured individuals who will pony up if they can in order to stay in transportation. The hurricanes will force many people and businesses to make car and truck purchases they would not otherwise have made … if they can somehow swing a little more debt. (They’d better hope they have bad credit in order to make it a little easier.)

    The hurricanes will not, however, solve any of the auto manufacturers’ troubles for next year. In fact, they likely make next year worse by moving purchases up. (See “Hurricanes Harvey and Irma May Lend Helping Hand to Economy.”)

    Retail apocalypse now
    Summer also deepened the retail apocalypse that I wrote about earlier and that has become the economic topic of the year. (See “Retail Apocalypse Engulfs US Economy.”) JC Penny reported in August that its latest quarter receded further. Macy’s and Kohl’s reported similar results. Shares of all companies tumbled on the news.

    Sporting Goods Stores joined the big clothing stores in a cacophony of bad news. Dicks Sporting Goods reported horrible results and saw its stocks plunge, and Dicks notably did not hold out hope that the worst was behind it. Instead, it slashed its future guidance lower than the lowest sell-side forecasts. Sad quarterly results from two other sporting goods stores — Hibbett and Foot Locker — confirmed Dicks’ longterm assessment of the brick-and-mortar sporting goods market.

    “Athletic apparel and footwear is over-distributed and there is too much inventory in the channel,” John Zolidis, president of research firm Quo Vadis Capital Inc, wrote in a note. “We see potentially several years of retrenchment as supply is reduced to meet the new, lower level of demand…. We predict several years of pain for the companies that compete in this arena.” (Zero Hedge)

    Even kids toys took a major tumble, unable to hold out for the next holiday season. As the end of summer neared, Toys “R” Us crumpled like a dry autumn leaf almost overnight. So it appeared, but these things are long in development and merely held out of sight as long as possible. As Zero Hedge laid out,

    The company spends millions of dollars every month on expensive lawyers … investment bankers … turnaround advisors … claims administrators, etc., who all spend many sleepless nights in the days leading up to a [chapter 11 bankruptcy] filing…. CEO David Brandon explains why Toys “R” Us was forced to file for bankruptcy in such a hurry…. Debt … “Toys ‘R’ Us … has been operating for more than a decade with significant leverage, necessitating the use of substantial amounts of cash each year….” But these substantial debt service obligations impair the Company’s ability to invest in its business and future.

    As ZH wryly noted, “Apparently spending … on debt service while ignoring capital improvements and store remodels is a bad long-term business strategy.” I’ve been noting for a couple of years on this blog that there would prove to be a severe down-the-road cost from so many companies using low interest rates to invest in stock buybacks to create the illusion of higher profits and to make shareholders rich the easy way, instead of using those loans to do the hard work of research, development, and capital improvements. So, who woulda thunk that stock buybacks are not a longterm plan for corporate success?

    As John Rubino of the Dollar Collapse blog wrote,

    Long credit cycles like the current one always end with a crash. But first they deteriorate. The headline numbers remain positive while under the surface a growing list of sectors start to falter. It’s only when the latter reach a critical mass that market psychology turns dark. How far along is this process today? Pretty far, it seems, as some high-profile industries roll over.

    Given how leveraged many companies have become as they chose to buy up their own stocks during the recovery, rather than invest in capital, one must wonder what retail company has lawyers working overnight right now in order to become the next to fold overnight. Ah, well, this one was just a toy company. How much can that matter in an adult world?

    Answer: About this much …


    [​IMG]
    Retail apocalypse chart of chapter-11 bankruptcy filings in 2017.

    Toys “R” Us is, in fact, the third largest retail bankruptcy in US history. Will Sears and Kmart (Sears Holdings) be next? (Sears Canada, which spun off as an independent company in 2012, already filed this past summer.) That would be déjà vu for Kmart.

    The state of the [Sears] company is so poor that a warning was issued to investors that said, “Historical operating results indicate substantial doubt exists related to the company’s ability to continue.” (Seeking Alpha)

    Retail bankruptcies in the US are up about 30% so far this year, according to BankruptcyData.com.

    The rocky road ahead for retail
    Of course, the worst for retail in 2017 will come in the decisive fourth quarter when all profits for the year are usually made. Stores that weathered through a rough 2016 holiday season, hoping for a 2017 season that would give them a comeback, will fall through the floor when 2017 fails to provide fourth-quarter salvation for the those starving companies that have managed to hold on.

    Closely related to retail in that they share the same shopping areas, restaurants haven’t reported a single positive month since February 2016. That slide actually became more pronounced this summer with both sales and foot traffic declining. Chain restaurants, which tend to be located more around shopping centers and malls, performed the worst.

    CEO Ed Stack said “we have conducted extensive consumer research, and the customers have told us they feel our prices are not competitive in today’s environment” in which everyone is slashing price to capture market share…. Having no other choice, Dicks has joined the battle of the “deep discounters….” Of course, by doing so, the retailer assures that both Dick’s and its peers margins and net income shrink even more in the coming quarters. (Zero Hedge)

    So, the major economic cracks that I predicted for the summer of 2017 began right on schedule and gaped open much wider during the summer. The worst is certainly ahead as millions of hurricane victims will not have a lot of spending money for the holidays with more pressing needs to focus on.

    Likewise, already marginal retail stores and restaurants and even malls that were physically wiped out will choose to stay closed, rather than re-open in those stricken areas. Commerce will not rebuild to the degree that existed before the hurricanes because keeping the insurance money for lost inventory and/or capital structures will appear much more desirable to brick and mortar stores that were already going broke and are now literally broken brick and mortar.

    And then there is Puerto Rico, a US territory that was already in the throes of bankruptcy with a public power company that was also in the throes of bankruptcy now having to rebuild parts and pieces of everything. Puerto Rico is pretty much eligible for all the same assistance that states are.

    Into this darkening world of woes, the Fed’s new austerity skulks into our presence like a Halloween cat, as Grandma Yellen finally begins to claw back the money she magically created out of thin air. And October, a month known for surprises, explodes into our presence with the worst lone-gunman massacre in US history — not an economic problem exactly and yet the very kind of thing I predicted last January would be the most horrible change in 2017 — an upsurge in the severity and intensity of domestic violence.

    First, we saw it in the violent rallies that formed around President Trump’s inauguration, then in the dark advent of Antifa. We don’t yet know the motive of this latest killer, but yesterday brought a rise in the level of a single individual’s evil action beyond anything this nation has seen before. And this man was a millionaire — a real estate developer — part of the top ten percent or maybe even the one percent. He was not known to have mental issues or to be strongly religious or political. What did he have to be so upset about?

    And, yet, just as President Trump had the White House flag lowered to half mast and mourned the Las Vegas massacre as an “act of pure evil,” the insane stock market shook all this off and partied on to clock a 152-point gain in the Dow and a record close. As if we needed some absolute proof that the stock market is completely unhinged from reality! The sheer screaming mania of that should send a chill to your bones.

    http://thegreatrecession.info/blog/know-economy-last-summer-part-1-carmageddon-retail-apocalypse/

    http://news.goldseek.com/GoldSeek/1507039142.php
     
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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    ATA urges U.S. to maintain cross-border truck program

    Group says false information being circulated
    Oct 1, 2017 Fleet Owner Staff

    Related Media
    [​IMG]
    Support for NAFTA steady, survey finds


    Citing public “fear mongering,” American Trucking Associations sent a letter to U.S. Trade Representative Robert Lighthizer calling on the federal government to maintain the cross-border plan with Mexico as part of the ongoing renegotiations of the North American Free Trade Agreement (NAFTA).

    ATA senior economist Bob Costello said in the letter groups are spreading false information about Mexican trucks driving beyond commercial border zone. He said the trucking program “is not an open door policy” for Mexican carriers.

    “You might find it odd that ATA supports the Mexican truck program, but it is for good reason,” Costello wrote. “NAFTA’s trucking provisions help reduce border congestion. Congestion increases without NAFTA’s trucking provisions because trailers often return empty after delivering freight across the border.”

    Popular Now
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    Costello noted the largest Mexican-domiciled carrier in the program, representing over half of all the Mexican drivers, is owned by an American company.

    “Mexican carriers operating beyond the commercial border zones have an excellent safety record. They are operating equipment similar to U.S. motor carriers and must adhere to all U.S. laws and regulations,” he said.

    In June, ATA said the government should consider allowing commingling of cargo entering Mexico.

    http://fleetowner.com/operations/at...m=email&elq2=40782d9da93e4f95b98a49acd5f31764
     
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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Gold Seeker Closing Report: Gold and Silver End Slightly Higher
    By: Chris Mullen, Gold Seeker Report
    Gold waffled between $1268.40 and $1272.4 in Asia before it popped up to $1274.50 in early afternoon New York trade and then drifted back lower into the close, but it still ended with a gain of 0.04%. Silver rose to as high as $16.66 and ended with a gain of 0.24%.
     
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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    ITF: Right Wing Anti-Immigration Group Dumps Ship’s Crew

    October 3, 2017 by gCaptain

    [​IMG]
    Photo: Defend Europe

    The International Transport Workers’ Federation (ITF) says it is assisting the crew of the vessel C Star, who have been abandoned and left unpaid by its charterers, the right-wing youth group Defend Europe, according to the ITF.

    The ship, currently in Barcelona, Spain, has been at the centre of Defend Europe’s “comic opera efforts” to block vessels rescuing refugees and migrants from sinking boats in the Mediterranean, the ITF said in a statement.

    “Oh, the irony. This group charters a British-owned, Mongolian flag of convenience ship, with a Sri Lankan crew to protest migration into Europe. Then abandons the crew in Europe,” said ITF seafarers’ section chair David Heindel.

    “This so-called mission began as a farce, played out as a farce, and now it’s ended as a farce. Famously, the C Star was spurned at almost every stop it tried to make by local citizens and governments. Crew members have claimed asylum, and the ship has reportedly both been investigated on suspicion of people smuggling and had to call for help from one of the NGO search and rescue vessels it was supposedly blocking.

    “This vessel has been like a clown car on water: overcrowded, comical, and, just like the ‘mission’ it was on, the doors quickly fell off. Sadly, it’s no surprise that the overgrown schoolboys behind it all have now abandoned the crew and left them to be looked after by the organizations they aimed to castigate, the Red Cross, the Spanish Coast Guard and the local maritime authorities,” Heinde added.

    According to the ITF, there are currently eight crew on the ship, which has been moored at sea off Barcelona since 26 September. The ITF is working with local port state control to provide the crew with food, water and fuel. As the local ITF inspector states, “The crew are not alone”. He confirms that a decision has been made today by port state control that the ship will be allowed to berth for humanitarian reasons.

    No word has yet been received from the ship’s owner, the ITF said.

    http://gcaptain.com/itf-right-wing-anti-immigration-group-dumps-ships-crew/
     
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  10. searcher

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    Spanish Stocks Tumble On Growing Catalan Crisis; Dollar Weakens As China Jumps

    [​IMG]
    by Tyler Durden
    Oct 4, 2017 6:54 AM


    While U.S. equity futures were little changed in a rerun of every other morning this month ahead of a diagonal ramp that closes the S&P at daily all time highs, things were more volatile elsewhere with the dollar sliding as investors weighed the possibility that current Fed Governor Jerome Powell, seen widely as far more dovish than Kevin Warsh, might take the reins from Janet Yellen, who Bloomberg reported was said to be getting the cold shoulder.

    Both the Bloomberg Dollar Spot Index and 10-year Treasury yields retreated from recent highs following the a Bloomberg report that Trump had been presented with a shortlist of Fed chair candidates, among them, ex-board member Kevin Warsh has criticized the central bank for trying to do too much with monetary policy while current Governor Jerome Powell has voted in sync with Chair Janet Yellen, who’s term is up in February and who was said to have gotten little support from Trump's group of close advisors.

    Following the report, Jerome Powell's odds of replacing Yellen soared to second behind Kevin Warsh, and were at 35% most recently, ahead of John Taylor and Gary Cohn, with Janet Yellen in 5th spot.

    [​IMG]


    While the latest September econ data out of Europe was solid, pushing the euro higher, Spanish assets tumbled as a Catalan spokesperson reiterates commitment to becoming a republic and the regional leader scheduled a press conference; the bund/bono spread was wider by 7bps and Spanish IBEX heavily underperforms as domestic banks decline. Spanish notes slumped on news that Catalonia’s leader Carles Puigdemont would release a statement at 9 p.m. CET after promising a formal announcement to regional lawmakers of the referendum results, triggering a 48-hour countdown to a unilateral declaration of independence. This prompted a sharp drop in Spanish assets, with the IBEX sliding as much as 2.5% on surging volumes more than twice 30DMA, led lower by Catalan exposed banks such as Banco de Sabadell (4.7%), CaixaBank (4.5%), Banco Santander (2.7%) and BBVA (2.7%); the drop sent the IBEX into correction territory now down 10% from intraday peak on May 8.

    [​IMG]

    "As far as market reaction is concerned the short-term effect is that investors would be reluctant to hold Spanish exposure ahead of this event risk,” said Antoine Bouvet, an interest-rate strategist at Mizuho. Others chimed in with a bearish take: "A pause in the global stock market rally is necessary and the political stress coming from Spain could become one of the triggers", said Jerome Troin-Lajous, cross-asset sales trader at Louis Capital Markets. "This could revive the grim view of some U.S. investors that Europe is a political can of worms." The deteriorating Spanish politics acted as a drag on positive read-across from the record highs on Wall Street, says Jasper Lawler, head of research at London Capital Group

    The EUR/USD continued to find bullish pressure, following the support seen yesterday around the 1.17 handle, triggered by option expiries in the pair, with around 4.6bln between 1.17 and 1.18. EUR has seen subdued price action through early European trade, as much anticipation lies on pending European Markit PMI data, alongside later commentary from ECB’s Draghi.

    Meanwhile, as Spain tumbled, Chinese (offshore) stocks soared and Hong Kong equities added to yesterday’s surge on optimism about monetary loosening. With the mainland closed this week for holiday, offshore Chinese shares extended gains to the highest in almost a decade, as most lenders continued to climb following the central bank’s decision to reduce their RRR in 2018, while real-estate developers rallied. MSCI China Index rises 0.5%, at highest since December 2007; Hang Seng China Enterprises Index advances 0.8% in Hong Kong, taking 3-day gain to 4.8%; Hang Seng Index adds 0.7% for 3-day advance of 3.5%, most since July 2016. Property developers were among main gainers in Hong Kong, with Country Garden Holdings Co. rising 7.2% for 3-day gain of 9.1%. Sunac China Holdings Ltd, Shimao Property Holdings Ltd, China Vanke Co., Guangzhou R&F Properties Co. among top 10 performers on MSCI China, all rising at least 3.8%.

    Elsewhere in Asia, Japanese stocks were little changed, while Australia stocks declined -0.8%.

    In rates, the yield on 10-year Treasuries decreased one basis point to 2.32 percent. Germany’s 10-year yield dipped two basis points to 0.45 percent, the lowest in more than a week. Britain’s 10-year yield advanced less than one basis point to 1.355 percent. Spain’s 10-year yield climbed five basis points to 1.77 percent.

    In currencies, the Bloomberg Dollar Spot Index dipped 0.2 percent. The euro advanced 0.1 percent to $1.1756. The British pound gained 0.3 percent to $1.3272. The Japanese yen increased 0.3 percent to 112.56 per dollar. The DXY suffered overnight, as reports of President Trump’s shortlist for the forthcoming available Fed Chair seat began to price into markets. The likelihood of a banker with a dovish skew in their views is growing, with the candidates being spoken about: Current Fed Chair Yellen, Warsh, Powell, Cohn, and outside calls of notable dove Kashkari, alongside University of Stanford’s Taylor. Despite no official announcement, a Presidential aide declared that Trump is set to deliver a shortlist in the near future. DXY broke through its hourly ‘head and shoulders’ formation, trading below the neckline and consolidating just above 93.30.

    WTI and Brent crude futures remain pressured after yesterday’s API report which showed large builds in gasoline and cushing, despite the large than expected draw in the headline figure. Libya's Sharara oilfield (280k bpd) restarted this morning, according to a Libyan oil source. Libya National Oil Corp lifts force majeure on loadings of Sharara crude oil from Zawiya, according to sources. Gold advanced 0.3 percent to $1,275.86 an ounce. Copper decreased 0.4 percent to $2.95 a pound, the lowest in a week.

    Market Snapshot
    • S&P 500 futures down 0.05% to 2,531.50
    • STOXX Europe 600 down 0.2% to 390.06
    • MSCI Asia up 0.2% to 162.97
    • MSCI Asia ex Japan up 0.3% to 537.25
    • Nikkei up 0.06% to 20,626.66
    • Topix up 0.01% to 1,684.56
    • Hang Seng Index up 0.7% to 28,379.18
    • Shanghai Composite up 0.3% to 3,348.94
    • Sensex up 0.5% to 31,657.11
    • Australia S&P/ASX 200 down 0.9% to 5,652.06
    • Kospi up 0.9% to 2,394.47
    • German 10Y yield fell 1.0 bps to 0.453%
    • Euro up 0.2% to $1.1763
    • Italian 10Y yield rose 0.9 bps to 1.872%
    • Spanish 10Y yield rose 4.1 bps to 1.764%
    • Brent Futures down 0.9% to $55.52/bbl
    • Gold spot up 0.3% to $1,275.61
    • U.S. Dollar Index down 0.2% to 93.42
    Bulletin Headline Summary
    • Spanish assets slump amid the rift between Spain and Catalonia
    • GBP supported by firm Services PMI
    • Looking ahead, highlights include, US ADP as well as comments from Fed’s Yellen and ECB’s Draghi
    Top Overnight News
    • Trump is heading to Las Vegas in the wake of a massacre, where he will confront recurring questions of whether restrictions on firearms can prevent another tragedy
    • As part of an investigation into how Russian-linked operatives harnessed social media during the 2016 U.S. election, lawmakers are focusing on Google services including YouTube and Gmail
    • Crisis in Spain: While King Felipe VI criticized Catalan separatists for “unacceptable disloyalty,” Catalan President Carles Puigdemont has promised a formal announcement of the referendum results, triggering a 48- hour countdown to a unilateral declaration of independence
    • Punters see ex-Fed board member Kevin Warsh as the most likely nominee to take over from Janet Yellen, who is also running for another term: PredictIt.org
    • Euro-zone composite PMI climbed to a four-month high 56.7 in September as new orders rose to a six- year high, a final reading showed; services PMI increased to 55.8, beating the flash number of 55.6
    • Spain’s King Felipe VI came to PM Rajoy’s support by telling Catalan separatists trying to break up his country that their “unacceptable disloyalty” has no place in any democratic state, as he vowed to keep Spain together
    • Iron ore shipments from Australia are rising as miners boost cargoes, with vessel-tracking data signaling that nationwide flows expanded again last month to near an all-time high of 74.36 million metric tons
    • Trading of European stocks on dark markets will probably triple as a result of MiFID II overhaul, the opposite of what architects of the law intended, as the new rules give some venues flexibility in how they price shares
      Trump Aides Are Said to Deliver Shortlist of Fed Candidates; Fed Chair Hopeful Warsh Draws Opposition From Left and Right
    • Trump Suggests Puerto Rico’s Debt Will Need to Be Wiped Out
    • MiFID Is Seen Tripling Dark Trading in Europe as New Venues Soar
    Asia stocks traded mostly higher after another record setting session in the US where all major indices printed fresh all-time highs for a consecutive day and automakers advanced on strong September car sales data. The positive momentum supported the Nikkei 225 (+0.1%) but with gains capped on a firmer JPY. Hang Seng (+0.8%) continued to lead the upside in the region as financials remained underpinned by lower reserve requirements for next year and ASX 200 (-0.8%) lagged with energy names reeling after oil briefly slipped below USD 50/bbl to a 2-week low. 10yr JGBs traded higher from the open as yields declined across the curve and with prices also supported by the BoJ’s presence for JPY 990bln in JGBs ranging from 1yr-10yr maturities. World Bank raised 2017 China GDP growth forecast to 6.7% from 6.5% and raised 2018 forecast to 6.4% from 6.3%.

    Top Asian News
    • China’s Reserve Cut Excites Investors as Analysts Cautious
    • HSBC Lowers Hong Kong Stocks to Underweight Amid Tightening
    • India Seeks to Rework More LNG Contracts Amid Surplus, GAIL Says
    • RBA May Raise Rates Even If Inflation Below Target, Edwards Says
    • Russia to Challenge U.S. LNG Wave With Sevenfold Boost in Output
    • Unusual Ltd. Shares Rise to Record High; Co. Receives SGX Query
    In Europe, the IBEX is the underperformer, slipping 2% with Spanish banks leading the declines. Aside from Spain, European bourses are trading higher marginally, with the FTSE 100 supported by the rise in Tesco shares, following positive earnings and the supermarket restoring their dividend. DAX outperforming as German participants play catch up after the market closure for Unity day. Spanish bonds taking a whack this morning as the stand-off between Spain and Catalonia looks to take a turn for the worse with the Catalonian Leader Puidgemont holding a news conference at 8pm London time. 10yr Bono’s rose as much as 7bps to levels last seen in March, moving within close proximity to 1.8%. Bono’s unsurprisingly underperform against all major counterparts with the GE-SP spread widening by 6.6bps.

    Top European News
    • Catalans Dismiss Spanish King’s Attacks as Police Chief Probed
    • Pirelli Shares Fall After Return to Stock Market Following IPO
    • Stoxx 600 Turns Negative as Spanish Stock Selloff Intensifies
    In currencies, the US Dollar suffered overnight, as reports of President Trump’s shortlist for the forthcoming available Fed Chair seat began to price into markets. The likelihood of a banker with a dovish skew in their views is growing, with the candidates being spoken about: Current Fed Chair Yellen, Warsh, Powell, Cohn, and outside calls of notable dove Kashkari, alongside University of Stanford’s Taylor.

    Despite no official announcement, a Presidential aide declared that Trump is set to deliver a shortlist in the near future. DXY broke through its hourly ‘head and shoulders’ formation, trading below the neckline and consolidating just above 93.30. The EUR/USD continued to find bullish pressure, following the support seen yesterday around the 1.17 handle, triggered by option expiries in the pair, with around 4.6bln between 1.17 and 1.18. EUR has seen subdued price action through early European trade, as much anticipation lies on pending European Markit PMI data, alongside later commentary from ECB’s Draghi. In the UK, political uncertainties have once again flooded into Sterling, with contradicting reports, as yesterday saw David Davis stick to past rhetoric, stating that ‘no deal is better than a bad deal’. However, some positive developments are evident in terms of Brexit negotiations as FT reports circulated that the UK and EU have struck an agreement on dividing up WTO quotas that govern the import of farm products. GBP is marginally higher against its major counterparts, EUR/GBP has held yesterday’s high, with offers likely stacked at the 0.8880 level and trades inside the previous day’s trading range. Cable sees similar action, residing inside of Tuesday’s range, with offers touted between 1.3300-13350. Today’s services PMI reading printed firmer than analyst estimates, subsequently pushing GBP to intraday highs of 1.3281, while focus is now turning to PM May’s closing Tory conference remarks at circa 11:30.

    In commodities, WTI and Brent crude futures remain pressured after yesterday’s API report which showed large builds in gasoline and cushing, despite the large than expected draw in the headline figure. Libya's Sharara oilfield (280k bpd) restarted this morning, according to a Libyan oil source. Libya National Oil Corp lifts force majeure on loadings of Sharara crude oil from Zawiya, according to sources.

    US Event Calendar
    • 7am: MBA Mortgage Applications, prior -0.5%
    • 8:15am: ADP Employment Change, est. 135,000, prior 237,000
    • 9:45am: Markit US Services PMI, est. 55.1, prior 55.1
    • 9:45am: Markit US Composite PMI, prior 54.6
    • 10am: ISM Non-Manf. Composite, est. 55.5, prior 55.3
    • 3:15pm: Yellen Gives Welcoming Remarks at Community Banking Event

    http://www.zerohedge.com/news/2017-...ing-catalan-crisis-dollar-weakens-china-jumps
     
  11. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Frontrunning: October 4

    [​IMG]
    by Tyler Durden
    Oct 4, 2017 7:53 AM
    • Spanish tensions bar Europe from global stocks party (Reuters)
    • Catalonia to move to declare independence from Spain on Monday (Reuters)
    • Catalan Police Chief Investigated For Sedition (TSR)
    • Trump Suggests Puerto Rico’s Debt May Need to Be ‘Wiped Out’ (BBG)
    • Trump Heads to Las Vegas After Shooting Reignites Gun Debate (BBG)
    • Putin says Trump is listening to Russia's views on North Korea crisis (Reuters)
    • Yahoo Estimate of Breached Accounts Triples to 3 Billion (WSJ)
    • Facebook Fought for Years to Avoid Political Ad Disclosure Rules (BBG)
    • SEC forensics unit sought resources, cyber training ahead of 2016 hack (Reuters)
    • Trump Points to Storm Budget Effect in Puerto Rico Visit (WSJ)
    • Warren Buffett, Larry Fink criticize Trump tax plan (Reuters)
    • Fed’s QE unwind threatens to unleash US bank competition (FT)
    • Almost half disapprove of Trump’s handling of Puerto Rico: poll (The Hill)
    • EU Orders Recoup of $300 Million in Amazon Back Taxes (WSJ)
    • EU takes Ireland to court for not claiming Apple tax windfall (Reuters)
    • Russian Spy Tactic: Hack Smartphones of NATO Soldiers (WSJ)
    • Thousands of Tales of Torment From the Nation’s Worst Transit System (BBG)
    • Trump Aides Deliver Him a Shortlist of Fed Candidates (BBG)
    Overnight Media Digest

    WSJ

    - A massive data breach at Yahoo in 2013 was far more extensive than previously disclosed, affecting all of its 3 billion user accounts, new parent company Verizon Communications Inc said on Tuesday. on.wsj.com/2yWGtXQ

    - Uber Technologies Inc's board unanimously approved a series of corporate changes along with a multibillion-dollar investment from SoftBank Group. on.wsj.com/2yYBdDg

    - Warren Buffett's Berkshire Hathaway Inc made a bet on American truckers with a deal on Tuesday to acquire nearly 40 percent of the operator of Pilot and Flying J travel centers. on.wsj.com/2yWxrKw

    - Ford Motor Co will shift about $7 billion toward the development of more trucks and sport-utility vehicles while "attacking" costs, part of new Chief Executive Jim Hackett's strategic plan for the No. 2 U.S. auto maker. on.wsj.com/2yWHq2A

    - Tim Leissner, a former Goldman Sachs Group Inc senior banker linked to alleged financial fraud involving Malaysian state fund 1Malaysia Development Bhd was barred from the U.S. securities industry for failing to cooperate with a regulator's investigation. on.wsj.com/2yWK3kY

    FT

    Foreign Secretary Boris Johnson, with a vigorous defence of Brexit, won a standing ovation from the Tory conference in Manchester on Tuesday, but in private, ministers were scornful of Johnson’s “showboating”, and said a post-Brexit transition deal could extend considerably beyond his March 2021 “red line”.

    UK and Brussels have reached a preliminary agreement on dividing up World Trade Organisation quotas, in one of the first big breakthroughs in Brexit-related talks between London and the European Commission, according to diplomats and EU officials contacted by the FT.

    Royal Mail Plc workers voted for the first national strike at the postal operator since its privatisation, potentially threatening postal delays during the key pre-Christmas period.

    Uber Technologies Inc’s Dara Khosrowshahi had a “constructive” meeting with Transport for London commissioner Mike Brown on Tuesday, as the U.S. ride hailing company’s new boss stepped up his fight to retain its London licence.

    Speaking at a private business dinner on Monday, Chancellor Philip Hammond urged business leaders to stand up against Labour leader Jeremy Corbyn or risk being deemed collaborators who propel his leftwing party into power.


    NYT

    - Pressed by lawmakers, U.S. Defense Secretary Jim Mattis reiterated his view that the Iran accord is working, a contradiction to the claims of President Donald Trump. nyti.ms/2ga5Ldi

    - Republican leaders are backing away from a proposal to fully repeal an expensive tax break used by more than 40 million tax filers to deduct state and local taxes amid pushback from fellow lawmakers whose residents rely on the popular provision. nyti.ms/2xXuniV

    - Ride-hailing service Uber Technologies Inc's board voted for corporate governance changes and a potential stock sale to the Japanese conglomerate SoftBank Group Corp . nyti.ms/2yHvhxk

    - The Equifax data breach, which exposed the sensitive personal information of nearly 146 million Americans, happened because of a mistake by a single employee, the credit reporting company's former chief executive Richard Smith told members of Congress on Tuesday. nyti.ms/2xPD7sf

    - Wells Fargo Chief Executive Timothy Sloan on Tuesday faced attacks from Republican and Democratic senators, who voiced frustration with his response to a series of scandals that have rocked the bank. nyti.ms/2g8sLti


    Canada

    THE GLOBE AND MAIL

    ** Progress Energy Canada Ltd, the Canadian unit of Malaysia's Petronas Gas, has put oil and natural gas assets in Alberta's Deep Basin exploration region up for sale after abandoning plans for a major natural gas-export plant earlier this year. tgam.ca/2xRwPIm

    ** Operating at a "substantial" loss, Sears Canada Inc is preparing for a total liquidation soon if the bid by its executive chairman to save the insolvent retailer fails. tgam.ca/2fIYErR

    ** Carlos Leitao, the province's Finance Minister, said he intends to collect up to C$20 million ($16 million) per year despite the federal deal that gave up on GST in favour of a commitment from Netflix Inc to spend C$500 million on Canadian programming over five years. tgam.ca/2fJILRQ

    NATIONAL POST

    ** Square Inc is introducing support for Interac debit cards for businesses using its point-of-sale system and has developed a contactless chip reader to facilitate those transactions in Canada. bit.ly/2fKjdUM

    ** Two Home Capital Group Inc executives, Pino Decina, executive vice-president of residential lending, and Chris Whyte, executive vice-president and chief operating officer, have left the company, with one being replaced and another's position eliminated. bit.ly/2fHV1lG

    ** New York based WeWork Inc has secured a deal with Amazon.com Inc to rent most of the shared workspace provider's first Vancouver office, forcing it to find a second location in the city as it continues its aggressive push into Canada. bit.ly/2fJKB57


    Britain

    The Times

    - Two Tesco Plc employees resigned amid concerns about accounting practices at the retailer. The resignations were disclosed on the third day of the trial of Christopher Bush, John Scouler and Carl Rogberg, each of whom is facing one charge of fraud and one of false accounting. bit.ly/2wvyVK7

    -Britvic Plc said it planned to close its Robinsons squash factory, putting 242 jobs under threat, while Unilever Plc, which co-owns the site, said the move could spell the end of its own operations at a location where it employs 113 workers. bit.ly/2wvVQF6

    The Guardian

    -Ryanair Holdings Plc pilots are facing tax investigations by HM Revenue & Customs related to complex employment structures imposed on them by the no-frills airline. bit.ly/2wwGss5

    -Royal Mail Plc's postal workers are on the verge of a strike in a dispute over pensions, pay and conditions. The Communication Workers Union announced that a majority of its 111,000 members in Royal Mail had voted for industrial action, the first since the company was privatised four years ago. bit.ly/2wvGhNT

    The Telegraph

    -The European Commission will hit Amazon.com Inc with a bill for hundreds of millions of euros of back taxes in the latest example of the European Union's crackdown on tax avoidance by multinational companies. bit.ly/2wvLPrq

    -Transport for London has said it will take Uber Technologies Inc several weeks to win back its trust after a "constructive" meeting between the company's new chief executive, Dara Khosrowshahi, and senior officials. bit.ly/2wvSMsx

    Sky News

    -Former Labour minister Lord Hutton is being lined up to head the energy industry's biggest lobbying group, Energy UK, amid growing pressure on Prime Minister Theresa May to impose an industry-wide price cap on gas and electricity companies. bit.ly/2wxez34

    -A London Underground strike that had threatened to bring "substantial disruption" across the capital on Thursday has been called off. bit.ly/2wvDzrH

    The Independent

    The chief executive of Monarch Airlines, Andrew Swaffield, reportedly pocketed a six-figure salary and set up a new company just days before the airline collapsed into administration. ind.pn/2wxfosG

    -UK drivers could be paid to own an electric car under a new partnership between Ovo Energy and Nissan Motor Company Ltd . The companies hope the offer will speed up the adoption of greener vehicles. ind.pn/2wwAeIS

    http://www.zerohedge.com/news/2017-10-04/frontrunning-october-4
     
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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Asian Metals Market Update: October-04-2017
    By: Chintan Karnani, Insignia Consultants
    Gold and silver may have formed a short term bottom. Lead and zinc are the gate crashers in the positive year for industrial metals as they do not show signs of a correction. The pace of rise of lead and zinc are scary but not the rise itself. The rise of industrial metals is in sync with long term fundamentals. If lead and zinc rise another twenty percent over the next twelve months and float over the same then electric car makers will start looking for alternatives.
     
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    ELDs will put supply chains in a vise. And maybe that’s a good thing.

    Oct 3, 2017 by Sean Kilcarr in Trucks at Work


    Related Media
    [​IMG]
    FMCSA proceeds with December ELD enforcement plan


    For as long as I’ve covered both the trucking and logistics industries, they’ve functioned under a freight philosophy called “just-in-time” delivery or “JIT” for short.

    Put simply, JIT is an inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs.

    So how does trucking and the now infamous electronic logging device (ELD) mandate play into this JIT philosophy? In short, JIT delivery costs should increase significantly once the ELD mandate hits, simply because truckers will no longer be able to “bend” their operational hours to meet the tight freight scheduling demands of JIT-based supply chains – which, frankly, describes almost all supply chains now.

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    Here’s the combination of trucking, ELD, and freight demand factors that will create something of a “Bermuda Triangle” for shippers from here on out:
    • Trucking moved roughly 10.42 billion tons of freight last year; some 70.6% of all tonnage by mode in North America;
    • Trucking is an industry made up of small business: 91% of all trucking companies operate six trucks or fewer while 97.3% of them operate 20 trucks or fewer;
    • There is a growing shortage of truck drivers, a shortage that will reach 239,000 in five years if current trends persist;
    • Most industry analysts expect the ELD mandate will reduce trucking capacity by 3% to 5% as motor carriers and drivers exit the industry rather than comply with the new electronic logging rule;
    • Trucking capacity is now under further pressure due to the freight demand being spurred in the wake of hurricanes Harvey and Irma – storms that also removed a lot of trucking capacity from the overall supply chain system.
    John Larkin – managing director and head of transportation capital markets research for Stifel Capital Markets – added some further depth to that thesis in a presentation he made last month at an Iowa Motor Truck Association meeting.

    “These storms which attacked South Texas and Florida really have created a severe tightening of supply and demand [and] may have accelerated the tightening of supply and demand about six months,” he explained.

    “We were thinking [that tightening] really wouldn’t become evident until early next year when we had the at least partial impact of the ELD being factored into the equation,” Larkin noted.

    [​IMG]
    Photo: U.S. Air Force


    “[But] here we are; there aren’t enough trucks, turned-down loads are way up, spot rates are astronomical in some parts of the country, [and] trucks are flocking to the high rates – which [is] leaving other parts of the country with too few trucks,” he pointed out. “I think this is the wakeup call that shippers needed, especially those that were so harsh on everyone back in 2015 and 2016.”

    Larkin bluntly addressed what he dubbed “Neanderthal practices” on the part of shippers in the not-so-recent past and illustrated how that behavior is now starting to come home to roost.

    “A couple of people sent me letters from shippers at that time which said, ’We’re so grateful for all the great service you’ve provided to us over the years; however, we’re notifying you that we’re going to take our [freight] prices down 10% effective the Monday after next. If you’re willing to absorb that price discount that’s great, we’d be happy to have you in our carrier mix; if not we’ll put your business out to bid and you may win some of that, you may lose all of it. The likelihood of you winning it all back is zero,’” he noted in his remarks.

    “That’s pretty harsh,” Larkin stressed. “That’s treatment of somebody who’s supposed to be your partner and I think some of those folks are going to see the other end of that here very shortly. It’s hard to feel too sorry for them.”

    So what are the factors that are going to make shippers feel so “sorry”? For starters, spot rates are spiking fast, Larkin said, initially due to the hurricane recovery efforts – bringing in water and other needed supplies to folks who have been forced out of their homes.

    [​IMG]
    Irma relief supply convoy. Photo: U.S. Air Force


    “Then you’ll see the next wave of rebuilding ... particularly of South Texas,” he said. “There’s a lot of carpeting, a lot of electronics, a lot of furniture, a lot of wall board that needs to be replaced and all that has to be moved in over the next 12 to 18 months.”

    It’s not going to be something that’s fixed immediately, he added. “It’s going to have a nice tail to it [and] you have some of the same problems down in Florida. Puerto Rico had a direct hit [from Hurricane Maria] and there’s going to be a lot of material moving down there as well,” Larkin pointed out.

    So that is part one – hefty freight demand, pretty much scaling up for a year to a year and half.

    Now for part two: the impact of the ELD mandate on JIT delivery schedules.

    First of all, Larkin warned that all the talk about “soft enforcement” regarding ELD or related systems after the December 18 compliance deadline isn’t as “soft” as many truckers might believe. “You’re still going to be dinged on your CSA [Compliance Safety Accountability] score if you don’t have one and you’re still going to be fined,” he explained. “The only thing that won’t happen is you won’t be put out of service until there’s a violation on April 1 or later.”

    That’s going to have some impact Larkin believes, but more regarding the elimination of what he calls “marginal carriers” than it will be on reduced productivity of those that don’t have ELDs now.

    And here comes the kicker, as Larkin sees it: “The way some small carriers have competed is to cheat. People didn’t use to like to use the word cheat, but that’s essentially what they’re doing. They’re running 14 hours when they’re supposed to be running 11 hours.”

    He said that brokers give such carriers freight that gets hauled between Chicago to New York in one day – an 800 mile length of haul that you cannot make in 11 hours unless your average speed is 87 miles per hour.

    “I don’t think the New York State Police would allow you to do that on the New York State Thruway,” Larkin stressed.

    [​IMG]


    Thus the time required to legally carry freight shipments by truck is going to expand – and thus it will take longer and cost more to conduct such shipments. And that is not a bad thing, especially if the end result is a driver that is getting paid more and also operating their rig more safely at slower speeds.

    There’s also another regulatory hurdle to consider in all of this, Larkin added: the national drug/alcohol database or “clearinghouse” that is so far on track for implementation in early 2020.

    “That will be a mechanism to see if an applicant failed a drug test somewhere else; whether he [or she] has any DUIs or DWIs. That is, for most carriers, a non-starter [and] for most insurance companies a nonstarter,” he explained.

    “Some people think this rule here will have a bigger effect than ELDs with all the substance abuse that we have in this country – which is another sad story maybe for another day,” Larkin noted.

    That is very true – with an out-of-control opioid crisis affecting large swaths of the nation, it’s not a stretch to realize that the labor pool from which truck drivers are being hired is being affected.

    All in all, it adds up to a need to change our supply chain practices; placing a higher value on the services truckers large and small provide.

    This is a reckoning that is long overdue.

    http://fleetowner.com/blog/elds-wil...m=email&elq2=b3ff11cc9a294c27bb7529186cdaf0ac
     
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    Orders continue to climb for Class 8 trucks

    Fight for market share among OEMs shaping up for 2018.
    Oct 4, 2017 Fleet Owner Staff
    [​IMG]
    North American Class 8 order volume over the past twelve months totals 239,000 units, according to FTR. (Photo: Sean Kilcarr/Fleet Owner)


    Related Media
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    Mack Anthem: First drive and a look inside the cab


    Orders for Class 8 trucks continued to soar in September, while demand for medium-duty trucks remained more muted. However, on the heels of the recent introduction of new models from Volvo Trucks North America (VTNA), Mack Trucks, and Navistar, a major market share war may be shaping up for 2018, noted one industry analyst.

    According to data tracked by ACT Research, preliminary North American Class 8 net order volume topped 22,600 units, up 62% in year-over-year comparisons.

    FTR Transportation Intelligence posted similar numbers, noting its preliminary North American Class 8 net order volumes for September hit 22,100 units, up 7% in month-over-month comparison with August and up 62% compared to September 2016.

    “The recovery in the Class 8 market is building,” noted Don Ake, FTR’s vice president of commercial vehicles, in a statement, adding that North American Class 8 order volume over the past twelve months totals 239,000 units.

    “This is a healthy, growing truck market, which is in excellent position for greater expansion in 2018,” Ake said.

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    He pointed out that Class 8 order rates are expected to jump in the fourth quarter of 2017 and that orders from Canada were particularly robust as fleets benefit from what Ake called a “strong economy,” with a similar trend shaping up in the U.S.

    “Stronger freight growth generated by a more vibrant U.S. economy will spur demand for additional trucks next year,” he explained. “Factor in the loss of productivity from ELDs [electronic logging devices] and fleets will have to expand capacity to haul the available freight.”

    Meanwhile, Kenny Vieth, ACT’s president and senior analyst, noted that while the medium-duty market is also experiencing increased order rates, they are not matching the trend occurring in the Class 8 segment.

    ACT said preliminary North American medium-duty orders in September topped 20,900 units – up 11% from August and up 2.1% year-over-year – but remained below first half of the year activity levels.

    Michael Baudendistel, vice president of Stifel Capital Market’s transportation & logistics research group, added that the spike in Class 8 orders is also setting the stage for a market share battle of sorts among OEMs.

    “Class 8 market share gains will be hard fought in 2018,” he explained in a recent research brief. “Product life cycles tend to be long in trucks, but essentially every OEM has new or relatively new Class 8 products to display.”

    He thinks Navistar is most likely to gain share in 2018, as it has the most to gain following recent declines and has introduced several new products, such as the LT Series and RH Series tractors, plus the new HX Series vocational truck.

    Baudendistel added that Navistar is also adding its internally-manufactured 12.4 liter A26 engine to its HX Series line and is developing a new powertrain with Volkswagen, which will be available by 2021. Additionally, Navistar plans to introduce a fully-electric Class 6 truck, developed with VW, by late 2019 and is merging its telematics platform with Volkswagen’s.

    “And those [are] just the major updates,” Baudendistel said. “We believe the company is making a compelling case that its turnaround is now fully under way.”

    http://fleetowner.com/trucks/orders...m=email&elq2=b3ff11cc9a294c27bb7529186cdaf0ac
     
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    Wu-Tang Clan's Ghostface Killah Cryptocurrency Venture
    Junius Maltby



    Published on Oct 4, 2017
    Paris Hilton, Jamie Foxx and Rappers like Ghostface Killah of the Wu-Tang Clan straight from Shaolin are creating their own currencies. Now isn't that just SPECIAL...........welcome to the Junius Maltby Channel. DON'T BE A SUCKER.
    SUPPORT: https://www.patreon.com/JuniusMaltby
    Channel Coin: https://qualitysilverbullion.com/prod...

    **FAIR USE STATEMENT**
    This video may contain copyrighted material the use of which has not been specifically authorized by the copyright owner. This material is being made available within this transformative or derivative work for the purpose of education, commentary and criticism, is being distributed without profit, and is believed to be "fair use" in accordance with Title 17 U.S.C. Section 107.

    For more information go to: http://www.law.cornell.edu/uscode/17/
     
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    Rising Hacker Threat Seen Triggering Boom in Cyber Crime Insurance

    October 4, 2017 by Reuters

    [​IMG]
    Photo: Corine van Kapel / Shutterstock.com

    COPENHAGEN, Oct 3 (Reuters) – Insurer Tryg expects 90 percent of its corporate customers to buy cyber crime insurance within five years as the threat from hackers and viruses to crucial data and IT systems grows.

    Tryg, Denmark’s biggest insurer, has sold 5,000 cyber crime insurance policies since the turn of the year when it launched a new product providing assistance in restoring data and getting systems up and running if a firm is hit by a cyber attack.

    “There are no corporate clients today that don’t have insurance on their buildings or cars, but I think that within a very few years it will be just as evident that you should insure against cyber crime,” chief executive Morten Hubbe told Reuters on Wednesday.

    The initial rise in demand for cyber insurance was prompted by the ransomware attack, named “Wannacry,” that infected more than 300,000 computers worldwide in May.

    He estimated that around 50 percent of the firm’s corporate clients would buy such an insurance by 2020 and from that point it would only take “a couple of years” to reach 90 percent.

    Tryg’s two business segments for small and medium size businesses and larger corporate customers accounts for 44 percent of the group’s total premium income.

    “The biggest risk to us is that significantly more customers get hit than we believe and that it gives us a huge economic loss,” said Hubbe.

    While the firm has good insight into how often a house burns down or a bicycle is stolen on average, the frequency and extent of cyber crimes is hard to predict.

    Tryg will also offer extensions to the basic insurance that cover consequential losses, back-up of data and a so-called DNS box aimed at blocking web pages known to contain viruses and malware.

    For the big industrial players, Tryg would look to cooperate with global reinsurers to spread the risk when big companies lose revenues in connection with cyber attacks.

    The world’s biggest container shipping firm Maersk Line saw a $2-300 million bill from a June cyber attack that disrupted its operations for weeks. (Reporting by Stine Jacobsen; editing by Ken Ferris)

    (c) Copyright Thomson Reuters 2017.

    http://gcaptain.com/rising-hacker-threat-seen-triggering-boom-in-cyber-crime-insurance/
     
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    Trump Administration Plans to Delay Methane Controls from Oil and Gas

    October 4, 2017 by Reuters

    [​IMG]
    Photo credit: Royal Dutch Shell

    By Timothy Gardner WASHINGTON, Oct 4 (Reuters) – The U.S. Interior Department will propose this week delaying parts of an Obama-era rule to limit methane emissions from oil and gas production on federal lands, a rule Congress upheld earlier in the year, a document showed on Wednesday.

    Under the rule, finalized by the Interior Department’s Bureau of Land Management (BLM) two months before former president Barack Obama left office, oil and gas operators on public lands must prevent the leaking, venting and flaring of methane, a potent greenhouse gas.

    The administration of President Donald Trump has sought to do away with the rule, viewing it as excessive environmental regulation. BLM has proposed delaying the rule’s implementation until Jan. 17, 2019 as it reviews Obama’s regulation, according to the document, scheduled to be published on Thursday in the Federal Register. The document can be seen here: http://bit.ly/2xZ5BPc

    Delays in the methane rule could benefit energy drillers on public lands as the Trump administration seeks to make the country “energy dominant” by maximizing oil and gas output for domestic consumption and for shipping energy products to allies.

    Energy companies have said the rule could cost them tens of thousands of dollars per well and hinder production. The American Petroleum Institute has said the rule is unnecessary because energy producers have made strides in reducing emissions of methane, the main component of natural gas.

    Drillers on federal lands produced 9 percent of the natural gas and 5 percent of the oil in the United States last fiscal year.

    In May, the U.S. Senate rejected a resolution to revoke the rule, as several of Trump’s fellow Republicans, including Senator John McCain, voted against the measure.

    Environmentalists said the delay was a gift by the administration to the petroleum industry.

    Kate Kelly, public lands director at the liberal Center for American Progress, said Interior Secretary Ryan Zinke and the Trump administration “need to realize that they are not above the law and that it is American taxpayers, not the oil and gas industry, that pay their salaries.”

    The Interior Department, which will take public comments on the proposed delay once it is published in the Federal Register, did not immediately respond to questions about the document. (Reporting by Timothy Gardner; Editing by David Gregorio)

    (c) Copyright Thomson Reuters 2017.

    http://gcaptain.com/trump-administration-plans-to-delay-methane-controls-from-oil-and-gas/
     
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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Gold Seeker Closing Report: Gold and Silver End Mixed in Quiet Trade
    By: Chris Mullen, Gold Seeker Report
    Gold gained $10.20 to $1282.10 by a little after 8AM EST before it fell back to $1270.80 in midmorning New York trade, but it then bounced back higher into the close and ended with a gain of 0.28%. Silver climbed up to $16.885 before it dropped back to $16.554 and then also edged back higher at times, but it still ended with a loss of 0.12%.
     
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    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    F. William Engdahl: Gold, China and The Deep State
    The Daily Coin.org



    Published on Oct 4, 2017
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    Please visit F. William Engdahl, http://www.williamengdahl.com/index.php
    Please visit Rory http://thedailycoin.org

    I sat down with with economist and investigative freelance journalist, F. William Engdahl, WilliamEngdahl.com, to discuss this latest turn of events against the backdrop of the bigger picture. Mr. Engdahl points out the event in Las Vegas, while tragic, is nothing more than another distraction to keep the American people off point of the real issues going on at the global level.
     
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  23. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Spain Rebounds, Pound Tumbles In Quiet Session Ahead Of ECB Minutes, Fed Speakers

    [​IMG]
    by Tyler Durden
    Oct 5, 2017 7:03 AM


    Global markets came off record highs, trading subdued, with US index futures unchanged as traders are unwilling to make major moves ahead of today's ECB minutes and tomorrow’s NFP release, and before speeches by central bankers including SF Fed President John Williams and the potential next Fed chair Jerome Powell, as well as ECB executive board members Peter Praet and Benoit Coeure.

    There was a modest relief rally in Spain, where the main IBEX 30 stock index traded up close to 1%, with banks across the region seeing some bullish performance as participants continue to guess whether or not Catalonia will declare independence next week as Economy Minister Luis de Guindos poured cold water on Catalonia’s bid for independence. A well-received Spanish bond auction, the first since the referendum and which saw the highest 10-year bid-to-cover ratio since February, added to the optimism. Other auctions out of France and the UK were well digested across markets. The Spanish-German spread posted its first tightening this month.

    [​IMG]

    Asian stocks were mixed after a four-day rally, with markets in Hong Kong, China and South Korea all closed for holidays. The Topix dropped -0.1% with the Nikkei 225 little changed. The MSCI Asia Pacific Index was little changed at 162.93. On Wednesday, the S&P 500 Index posted a slight gain, still ending at a fresh record, after data showed American services industries climbed at the fastest pace in 12 years, while private jobs numbers met expectations. Japan’s Topix index dropped for the first time in three days, led by insurers and transportation companies. Qantas Airways Ltd. closed at the highest level in almost 10 years in Sydney after Goldman upgraded the stock. Other markets: Australia’s S&P/ASX 200 Index was little changed, and New Zealand’s NZX 50 up +0.3%. Straits Times Index +0.8%, Philippines PSEi Index -0.6%, Malaysia’s FTSE KLCI Index -0.1%, Jakarta Composite Index -0.8%, Thailand’s SET Index +0.3%. India’s S&P Sensex Index +0.1%, Nifty 50 little changed

    European bourses traded subdued, with outperformance in the IBEX 30, recovering from the losses seen yesterday. The Spanish stock index trades up close to 1%, with banks across the region seeing some bullish performance as participants continue to guess whether or not Catalonia will declare independence next week. A rangebound tone is the theme across the remainder of European indices, as utilities outperform, evident of the lack of risk trade. In Spain, the prospect of secession has increased pressure on Prime Minister Mariano Rajoy while rattling markets. His next move could involve suspending the regional government and implementing direct rule from Madrid. Emerging-market stocks are showing signs of shrugging off declines from last month that were triggered by concern a stronger dollar would hurt developing nations’ currencies.

    “The focus is of course upon the situation in Spain and Catalonia,” Dennis Gartman, editor of the Gartman Letter, wrote in his daily emailed report. “Although Catalonia’s Parliamentary President, Mr. Puigdemont, has not yet officially called for an independent Catalan nation, he may do so early next week, at which time 1.17 shall almost certainly be given” for the euro.

    The Bloomberg Dollar Spot Index was little changed while Treasuries and stock futures were stuck in tight ranges as traders stayed on the sidelines before a series of U.S. data and speeches by four Fed members including Chair candidate Jerome Powell. The pound and Aussie led G-10 losses while the euro struggled to rise a third day before ECB publishes the account of its September meeting. Currency-market volumes remain muted, with liquidity being described as below average.

    GBP has seen the majority of early price action, where sterling saw a 0.6% drop vs. the dollar. Concerns about PM May’s tenure crept into markets overnight and through the morning, following the UK press reports from The Telegraph and The Times. However, Downing Street later came out and said this was not an issue for discussion. Cable could look towards pre hawkish Carney levels around 1.3150.

    [​IMG]


    AUD saw the majority of volatility overnight, as Australian retailers were hit by the worst sales decline in over four years. August’s retail sales came in at -0.6% (M/M) leading to sharp selling pressure in the Australian dollar. AUD lost ground against both its major counterparts yet still consolidates inside current trading ranges, AUD/USD’s 2016 high continues to behave as support for the pair, with AUD/NZD not wanting to look toward 1.09.

    Looking ahead, highlights include ECB Minutes, US Trade Balance, Weekly Jobs, Factory orders and a slew of central bank speakers.

    Market Snapshot
    • S&P 500 futures up 0.02% to 2,536.75
    • VIX Index down 1.7%, ending 2-day advance
    • STOXX Europe 600 down 0.1% to 389.84
    • MXAP up 0.05% to 162.93
    • MXAPJ up 0.1% to 537.54
    • Nikkei up 0.01% to 20,628.56
    • Topix down 0.1% to 1,682.49
    • Hang Seng Index up 0.7% to 28,379.18
    • Shanghai Composite up 0.3% to 3,348.94
    • Sensex up 0.1% to 31,702.87
    • Australia S&P/ASX 200 down 0.01% to 5,651.77
    • Kospi up 0.9% to 2,394.47
    • German 10Y yield rose 0.6 bps to 0.459%
    • Euro up 0.09% to $1.1770
    • Brent Futures up 0.6% to $56.13/bbl
    • Gold spot up 0.1% to $1,276.57
    • U.S. Dollar Index up 0.01% to 93.47
    • Italian 10Y yield rose 2.9 bps to 1.901%
    • Spanish 10Y yield unchanged at 1.785%
    Top Overnight News
    • Crisis in Spain: Spanish Economy Minister Luis de Guindos ruled out any sort of mediated talks with separatist leaders and said Catalan banks have signaled they may move out of the region if the push for independence continues
    • Saudi King Salman bin Abdulaziz is beginning an historic first visit to Russia by a monarch of the Gulf kingdom as he seeks an understanding with President Vladimir Putin to extend an agreement curbing oil supplies
    • Saudi Aramco isn’t talking with any Russian companies about possible participation in its initial public offering, the head of the state oil producer said
    • Brevan Howard Asset Management LLP’s flagship hedge fund lost 0.9% in September, the sixth monthly decline this year, according to an investor letter seen by Bloomberg News. The Master Fund, which managed $6.8 billion at the end of August, was down 4.6 percent through September
    • Foreign buying of South African bonds rose to a six-month high in September, suggesting that the highest yields among emerging markets are proving irresistible despite political and economic risks
    • Ex-HSBC trader says boss ordered him to ‘ramp’ up the price of the pound, according to a recorded phone call that prosecutors say is real-time talk from a front-running scheme run by then HSBC’s head of foreign exchange cash trading in Europe
    • House and Senate Republicans will take their first concrete steps toward enacting planned tax cuts by advancing budget resolutions for fiscal 2018, lawmakers see more fights ahead on tax details
    • Saudi King Salman bin Abdulaziz is due to meet Russian President Vladimir Putin in Moscow to discuss the extension of an oil pact, to talk oil pact on ‘epochal’ Russia visit
    • Trump’s Short List for Fed Chair Features These Hawks and Doves
    • GOP Budget Kicks Off Effort on Tax Cuts. Now Comes the Hard Part
    • Spain’s de Guindos Says Catalonia’s Independence Push Is Doomed
    • Amazon Is Said to Test Own Delivery Service to Rival FedEx, UPS
    • Sempra Revises $9.45 Billion Oncor Deal to Win Over Texas
    • John Catsimatidis Mulls Buying Fairway Market: New York Post
    • Deckers Could Double With Asset Sales, Recapitalization: Marcato
    • Oil Trades Near $50 as U.S. Export Surge Revives Glut Concerns
    Asia equity markets traded range-bound amid relatively light news flow and market closures in the region. Furthermore, the mundane tone precedes Friday’s key risk US jobs data and followed a similarly quiet US session where the major indices just about eked fresh record levels. ASX 200 (-0.1%) was kept afloat by strength in mining names and Nikkei 225 (+0.01%) traded indecisive alongside a slightly choppy currency, while the absence of markets in China, Hong Kong and South Korea ensured price moves in the region were contained. 10yr JGBs were quiet overnight, but still edged minimal gains amid an indecisive tone in Japan, while 10yr inflation-indexed auction also failed to drive prices with the b/c and lowest accepted prices slightly below the prior results.

    Top Asian News
    • Bond Bulls Relish India as Best Story Post September Selloff
    • Mastercard to Invest $750m-$800m in India in Next 4 Years: Banga
    • McDonald’s Japan Posts 22nd Cons. Monthly Same-Store Sales Rise
    • Japan’s Topix Dips as Technicals Signal Stocks May Be Overbought
    • Pimco Sees Chance Singapore’s MAS Surprises by Tightening
    • Amazon Opening Pop-Up Liquor Bar in Tokyo’s Ginza District
    European bourses trade subdued, with outperformance in the IBEX 30, recovering from the losses seen yesterday. The Spanish stock index trades up close to 1%, with banks across the region seeing some bullish performance as participants continue to guess whether or not Catalonia will declare independence next week. A rangebound tone is the theme across the remainder of European indices, as utilities outperform, evident of the lack of risk trade. Much anticipation across asset classes today will be on the ECB meeting minutes, alongside a slew of upcoming Central Bank speech. Auctions come out of Spain, France and the UK, with Spain’s auction being relatively well digested across markets. The Spanish 10y trades at 1.76% following the auction, helping a marginal lift across Europe, with both Bund and Gilt seeing a recent bid. Elsewhere, the French supply was comfortably digested, providing little in the way of fireworks while UK drew an impressive b/c of 2.36.

    Top European News
    • Guindos Says Catalan Independence Would Be Illegal
    • First Spain Bond Auction After Vote to Test Investor Appetite
    • Siemens Exits Lighting With $1.4 Billion Sale of Osram Stake
    • WPP Escalates Takeover Battle Over Japanese Ad Agency ADK
    • Ex-HSBC Trader Says Boss Ordered Him to ‘Ramp’ Up Price of Pound
    • Airbus Defence & Space Is Said to Freeze Capex: Reuters
    • Deripaska’s En+ Group Plans Biggest Russian IPO Since 2013
    • Milan IPOs Booming as Investors Hunt for Made-in-Italy Assets
    In currencies, morning trade has been slow, with many investors awaiting tomorrows NFP and today’s ECB minutes. GBP has seen the majority of early price action, where sterling saw a 0.6% drop vs. the dollar. Concerns about PM May’s tenure crept into markets overnight and through the morning, following the UK press reports from The Telegraph and The Times. However, Downing Street later came out and said this was not an issue for discussion. Cable could look towards pre hawkish Carney levels around 1.3150. EUR/USD was range-bound through Asian trade, consolidating between 1.1750 – 1.1760. Subdued trade is likely to continue through the early European hours, as anticipation is likely to lie on the upcoming ECB meeting minutes later in the session. With EUR 4bln worth of option expiries due tomorrow, volatility could be due in EUR/USD, with the 1.1750 – 1.1780 range to behave as immediate resistance. Monday’s EUR/USD low continues to behave as support, with a break of these levels set to see a push toward the 50% Fibonacci ahead of 1.16. AUD saw the majority of volatility overnight, as Australian retailers were hit by the worst sales decline in over four years. August’s retail sales came in at -0.6% (M/M) leading to sharp selling pressure in the Australian dollar. AUD lost ground against both its major counterparts yet still consolidates inside current trading ranges, AUD/USD’s 2016 high continues to behave as support for the pair, with AUD/NZD not wanting to look toward 1.09.

    In commodities, an early bid has been seen in oil markets, as oil traders focus on today’s dialog between Saudi and Russia which remains optimistic regarding oil market stability. This also comes in the context of yesterday’s comments from Russian President Putin, stating that a deal between OPEC and rival oil producers to reduce production could be extended to the end of 2018. Precious metals have followed Asian trade, seeing largely sideward price action throughout European trade. Risk fears have dampened across markets, with October’s trade struggling to find any real direction, with many likely awaiting the aforementioned ECB minutes and Central Bank speech.

    Looking at the day ahead, it’s quite a busy day for central bank speakers, including the potential next Fed governor (Powell). There will be a range of data including: August factory orders (1% expected), the trade balance, final reading of durable and capital goods along with the weekly initial jobless claims and continuing claims. Onto other events, the ECB will publish the September meeting minutes. Following on, the ECB’s Praet and Coeure chair a panel in Frankfurt and the ECB’s governing council members Liikanen and Jazbec will speak. In the UK, BOE’s MaCafferty speaks in London and Chief economist Haldane will speak on “Central banks engagement with society”. Over in the US, there will be four Fed speakers, including: Jerome Powell, John Williams, Patrick Harker, and Esther George, although none are scheduled to speak directly on monetary policy.

    US Event Calendar
    • 7:30am: Challenger Job Cuts YoY, prior 5.1%
    • 8:30am: Initial Jobless Claims, est. 265,000, prior 272,000; Continuing Claims, est. 1.95m, prior 1.93m
    • 8:30am: Trade Balance, est. $42.7b deficit, prior $43.7b deficit
    • 9:10am: Fed’s Powell Speaks on Treasury Markets and the TMPG
    • 9:15am: Fed’s Williams Speaks at Community Banking Conference
    • 9:45am: Bloomberg Consumer Comfort, prior 51.6
    • 10am: Factory Orders, est. 1.0%, prior -3.3%; Factory Orders Ex Trans, prior 0.5%
    • 10am: Durable Goods Orders, est. 1.7%, prior 1.7%; Durables Ex Transportation, prior 0.2%
    • 10am: Cap Goods Orders Nondef Ex Air, prior 0.9%; Cap Goods Ship Nondef Ex Air, prior 0.7%
    • 10am: Fed’s Harker Speaks at Workforce Conference
    • 4:30pm: Fed’s George Speaks at Workforce Conference
    DB's Jim Reid concludes the overnight wrap

    Hello from a sweltering Phoenix. Back in wet autumnal London in time for tomorrow’s EMR. I had a FaceTime conversation with my exhausted wife yesterday and I don’t think she appreciated seeing blue skies and evidence of a golf course in the distance on the screen. On escaping the madness at home I actually had time to read the paper yesterday and it’s a fascinating snap shot of modern life that there was a story suggesting that songwriters are now packing everything into the first 30 seconds of modern songs to ensure that the listeners aren't bored enough to press skip. Apparently the first 30 seconds of the most globally downloaded song of the year “Despacito” is basically an executive summary of the whole song. As well as the short attention span it’s also because Spotify only pays artists if songs are streamed for longer than around 30 seconds.

    So in order to keep your attention (if it’s not been lost already) here is what you need to know today in as few words as possible. “S&P new record, Spanish assets slump, core bond yields down then up (US ISM 12yr high), UK PM May has bad cold, spluttered, faced a stage invasion and suffered bits falling off the stage for her big speech, Tillerson staying, hurricanes weakened ADP, Puerto Rico debt plunges with ECB minutes and US durables due today".

    If like me you're rather partial to slow long intros hopefully you'll read on. Indeed one wonders whether in the current era of instant gratification epic slow intro songs like “Where the streets have no name”, “Hotel California”, “Billie Jean”, “Money for nothing”, “Bat out of hell”, “One” (Metallica), “Shine on you crazy diamond”, “The year of the cat”, “Layla”, “Superstition” or “Paradise City” would get made!! If anyone has a candidate for a global smash with a long intro in recent years I'd love to hear it as I can't think of one. So after donning my 'Slash' wig we'll start the long version of the EMR.

    Despite global politics doing its best to shake things up, it still feels like there is not much stopping risk appetite at the moment as the S&P 500 notched up yet another record high last night having edged up +0.12% to close up for the 7th successive session. That is the longest run since May 17 and it’s worth highlighting that going back to September 11th, the index has now risen 15 times in 18 sessions. The index has already jumped to a +0.73% head start in October and as we noted in our Macro Bites on Tuesday, should October be a positive return month then we will have entered new ground with 10 consecutive positive total return months to start a year - the first time in at least 90 years. Markets appeared to get a bit of a boost from the news that Secretary of State Rex Tillerson is to continue in his role, while also quashing any concerns about him ever considering leaving. Prior to this, in Europe the Stoxx 600 finally snapped its long run of gains (9 days) after falling -0.08%, although in fairness that closing move hid a larger drop midway through the day. Meanwhile it was another roundabout day of moves for bonds, but Treasuries last night ending flat even with decent data, while in Europe as you’ll see shortly it was another day of underperformance for Spanish assets.

    This morning in Asia, markets are mixed but little changed (ASX 200 +0.16%; Nikkei -0.07%) as we type, but most other markets (Chinese bourses, Hang Seng and Kospi) are closed today. Elsewhere, the US and South Korea have agreed to amend their free-trade deal, but have provided no details on what has changed.

    As noted above, it was another day of big moves for Spanish assets. The IBEX closed -2.85% last night, led by real estate (-4.60%) and financials. Taking a step back, the index is now down -4.01% in the last 3 sessions and now at the lowest level since March 17. The 10y Spanish bond yields also jumped 5.6bp yesterday and is now 16bp higher this week and to the highest since March 21st. The Spain-Bund spread is also out to 132bp (widest in 5 months). The moves appeared to reflect the King’s comments on Tuesday night, while last night Catalan President Carlos Puigdemont delivered a live TV address in which he gave a somewhat mixed message, albeit marginally conciliatory. He did not directly mention the declaration of independence, but said “we’ll show our best face in coming days when our institutions apply the results of the referendum”. Further, he is open to a remediation process with the Spanish government. That said, the government responded later on, noting if Puigdemont wants to negotiate “he knows perfectly what he has to do beforehand”.

    The political turmoil and subsequent sell-off for Spanish assets is in stark contrast to the latest data in the country though. Following a bumper September manufacturing PMI print on Monday, the Spanish services PMI yesterday came in at a much better than expected 56.7 (vs. 55.5) which marked an increase of 0.7pts from August. That left the composite at 56.4 and up 1.1pts from the month prior. Meanwhile the Euro area services PMI was revised up 0.2pts to 55.8, which is the highest since May. At the country level, there was no change for Germany (55.6) and a small 0.1pt decline for France (57.0). However, the biggest disappointment was Italy which printed at a well below consensus 53.2 (vs. 55.0 expected). The UK (53.6 vs. 53.2) was ever so slightly above market. It’s worth highlighting that our European economists noted yesterday following the data, the PMIs present upside risk relative to their +0.6 qoq GDP forecast for the Euro area, most of all in Spain. However its worth also caveating that the survey data was a bit too optimistic for GDP in H1 and also that the hard retail sales data were particularly soft yesterday (-0.5% mom vs. +0.3% expected).

    Spain isn't the only Government suffering at the moment although its woes pale into insignificance with that of Puerto Rico. After returning from his trip to the US territory, President Trump went onto “The Sean Hannity show” and suggested that the government’s debt should be wiped clean to help the island to recover from Hurricane Maria. He said “we are going to work something out….you know they owe a lot of money to your friends on Wall Street. We’re gonna have to wipe that out”. Notably, the Puerto Rico government had filed for bankruptcy protection back in May and has c$74bln of municipal debt. Following his comments, the benchmark 2035 bond fell from 44c/$ to as low as 30c/ $ intraday, before recovering to 38c/$ after Trump’s Budget director Mick Mulvaney said we should not take Mr Trump’s comments too literally. Further, Governor Ricardo Rossello also prefers to resolve its debt via bankruptcy, noting “as far as the comments made about wiping the debt clean, that is the opinion of the president. Puerto Rico is already involved on a judicial front”.

    Staying in the Americas, the main focus data-wise in the US was the September ADP employment change reading which came in bang on the money at 135k. It is the lowest reading since October 2016, however obviously reflects the impact from the two hurricanes last month. It’s worth noting that the details revealed that small business hiring was -7k which compares to a 3-month trailing average of 49k in August. As a read through, the 3-month rolling average for non-farm payrolls is 185k so the current 80k consensus for NFP on Friday might appear a little conservative based on these numbers. With regards to the other US data yesterday, the ISM non-manufacturing print also turned a few heads yesterday after surging to 59.8 (vs. 55.5 expected) from 55.3 in August. That is the highest since August 2005. The employment component also nudged higher (56.8 from 56.2) which also perhaps lowers expectations of a big downward miss for NFP on Friday.

    Back to the latest political developments. In Manchester yesterday the Conservative Party Conference concluded with PM Theresa May’s speech. It might be better remembered though for a number of disruptions – some of which were funnier than others - including a prankster handing May a P45 form (given to those who lose their jobs in the UK), the PM battling coughing bouts,and also falling slogan letters on the sign behind her. As someone that gives a lot of speeches I couldn’t help feel for her yesterday. The crux of the speech focused on May’s strong defence of free market capitalism and also her pledge to put a cap on energy prices (a little contradictory) – with a bill due to be published next week - and a pledge to build more social housing. With regards to Brexit, PM May didn’t add much new at all, instead reassuring the audience that a deal will be met that works for the UK and Europe.

    Quickly recapping other market performance yesterday. Core bond yields were little changed (UST 10y flat; Bunds -0.8bp), but Gilts (+2.6bp) and Italy (+3bp) underperformed. Currencies were broadly flat, with the US dollar index softening 0.12%, while the Euro (+0.13%) and Sterling (+0.08%) marginally strengthened versus the Greenback. Elsewhere, precious metals were little changed (Gold+0.25%; Silver -0.31%), but LME base metals (Zinc +1.16%; Aluminium +1.64%; Copper +0.02%) were modestly higher.

    Moving along, Russia’s Putin spoke at the Russian energy conference and praised Mr Trump as a strong character but noted he has “zero personal relationship” with him. On North Korea, Putin noted both sides should “lower the rhetoric”, otherwise it could lead to a “very dangerous dead end”. Elsewhere he said Russia is open to extending the oil production agreement with OPEC through 2018, although it seems to have had little impact as WTI oil dipped 0.87% yesterday to $49.98/bbl (first time below $50 in two weeks). This compares to the acceptable pricing level ($55-$60) as noted by OPEC Secretary-General Barkindo yesterday.

    Away from the markets, the Fed’s Fischer who leaves office this month noted “I still believe we’ll have higher inflation”, while conceding that we may have to wait “longer than you expected to wait”, but “if it’s a very basic force, namely increasing employment, increasing wages, (then inflation) will show up”. Over in Japan, with two weeks to go before the election on 22 October, polls are suggesting Tokyo Governor Koike’s new party of Hope is unlikely to win, but there are mixed messages as to the potential hit she could inflict on PM Abe. According to the Kyodo news poll on late Sunday, c15% of respondents were planning to vote for her party, but another poll by NHK on Monday found only 5% would vote for her, although c40% of respondents remained on the sidelines and said they didn’t support any party.

    Looking at the day ahead, it’s quite a busy day for central bank speakers, including the potential next Fed governor (Powell). Firstly, on the data front, the Markit retail PMIs across Europe and Germany’s construction PMI will be due. Over in the US, there will be a range of data including: August factory orders (1% expected), the trade balance, final reading of durable and capital goods along with the weekly initial jobless claims and continuing claims. Onto other events, the ECB will publish the September meeting minutes. Following on, the ECB’s Praet and Coeure chair a panel in Frankfurt and the ECB’s governing council members Liikanen and Jazbec will speak. In the UK, BOE’s MaCafferty speaks in London and Chief economist Haldane will speak on “Central banks engagement with society”. Over in the US, there will be four Fed speakers, including: Jerome Powell, John Williams, Patrick Harker, and Esther George, although none are scheduled to speak directly on monetary policy

    http://www.zerohedge.com/news/2017-...-quiet-session-ahead-ecb-minutes-fed-speakers
     
  24. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Frontrunning: October 5

    [​IMG]
    by Tyler Durden
    Oct 5, 2017 8:01 AM

    • Las Vegas gunman stockpiled weapons over decades, planned attack (Reuters)
    • Las Vegas Shooter’s Partner Says She Is Mystified by Attack (WSJ)
    • Catalan leader says not afraid of arrest over independence (Reuters)
    • May Faces Calls to Quit After Speech That Went Wrong (BBG)
    • North Korea ‘Decoders’ Offer Dire Warnings About Nuclear Program (WSJ)
    • Five Facebook Ads Designed to Divide America at Russia’s Behest (BBG)
    • The Lawyer Who Beat Big Tobacco Takes On the Opioid Industry (BBG)
    • Inside the Revolt Threatening to Split Guggenheim Partners (BBG)
    • Companies That Perform Best Don’t Pay CEOs the Most (WSJ)
    • Macron's sharp tongue throws French Twitter into a frenzy (Reuters)
    • Wall Street Regulator Is an Investor—With Scant Returns (WSJ)
    • Saudi King, Putin to Talk Oil Pact on 'Epochal' Russia Visit (BBG)
    • ‘Mind-Boggling’ Math Could Make Blockchain Work for Wall Street (BBG)
    • Spain Gets a Little Help From Its Amigos (BBG)
    • Shale Juggernaut Shows Signs of Fatigue (WSJ)
    • GM more than doubles self-driving car test fleet in California (Reuters)
    • Dutch Regulator Warns Banks and Insurers to Factor In Climate Change (BBG)
    • Europe Could See Another Brexit-Like Rupture—Beyond Spain (BBG)
    Overnight Media Digest

    WSJ

    - Apple Inc issued a software update Wednesday that it said addresses some cellular-connectivity issues that have affected its newest smartwatch, the Apple Watch Series 3. on.wsj.com/2hOcJZ4

    - Verizon Communications Inc said its top media executive, Marni Walden, is leaving in February and her responsibilities will be split among existing executives at the telecom giant. on.wsj.com/2hNapBQ

    - Airbnb Inc's marketing chief Jonathan Mildenhall is departing the online home-rental company where he was known for promoting diversity in advertising and guiding the brand through controversies that attended its rapid growth. on.wsj.com/2hOFHs0

    - AT&T Inc Chief Executive Randall Stephenson said the telecommunications giant isn't looking to bring a "telephone company culture" to Time Warner Inc and "really screw it up" after it closes its pending $85 billion acquisition of the media company. on.wsj.com/2hQYjI0

    - Continued adoption of Monsanto Co's latest soybean, cotton and corn products drove quarterly revenue for the seed giant in what it called a challenging agricultural environment. on.wsj.com/2hNjLxf


    FT

    Prime Minister Theresa May’s bid to reassert her dwindling authority was marred on Wednesday by a calamitous keynote speech interrupted by repeated coughing fits, a prankster and even letters of her slogan falling off the stage.

    DeepMind, Google’s London-based artificial intelligence unit, has launched a research department focused on the ethical and social implications of the AI it is creating.

    Goldman Sachs Group Inc agreed a lease for new office space in a Frankfurt skyscraper that would allow it to add 800 staff in the German financial capital as the Wall Street bank gears up to shift jobs out of the UK ahead of Brexit.

    The UK’s top banking supervisor Sam Woods urged his counterparts in Europe and beyond to work together, as he warned that Brexit would make British banks more complex — and therefore more risky. (Compiled by Bengaluru newsroom)


    NYT

    - In a public statement, U.S. Secretary of State Rex Tillerson emphasized his support of President Donald Trump and his agenda, despite a recent media report that he had criticized the president. nyti.ms/2xUoHEQ

    - Alphabet Inc's Google unveiled new smartphones, smart speakers and other gadgets at a product launch in an attempt to demonstrate the company's commitment to artificial intelligence. nyti.ms/2yJ7ZYc

    - The European Commission said it would take Ireland to court for not clawing back billions from Apple Inc, and ordered Luxembourg to recover around $293 million from Amazon . nyti.ms/2ypJoeW

    - Newsroom employees at the Los Angeles Times are trying to form a union, setting up a potential clash with the newspaper's parent company, Tronc Inc. nyti.ms/2y2btYu

    - Three U.S. Army Special Forces troops were killed and two wounded on Wednesday in an ambush in Niger while on a training mission with troops from that nation in northwestern Africa, American military officials said. nyti.ms/2y2eRmr

    Canada

    THE GLOBE AND MAIL

    ** Quebec's political parties formed a common front on Tuesday to demand companies such as Netflix Inc pay provincial sales tax. Members of the legislature voted unanimously for a motion to "ensure the Quebec sales tax TVQ is imposed on all foreign companies that offer products and services online, notably in the cultural sector, as soon as possible." tgam.ca/2xTyu0a

    ** Canadian Business Growth Fund, a private equity fund backed by Canada's largest financial institutions, is expected to land veteran financier George Rossolatos as its first chief executive officer. tgam.ca/2xUOgaV

    ** Google's Sidewalk Labs has been selected as the top candidate to turn part of Toronto's waterfront into a smart neighbourhood designed to integrate new technology and advance sustainable architecture and urban design. tgam.ca/2xUBMQM

    NATIONAL POST

    ** Despite recent project cancellations, BC Hydro still expects three LNG projects — and possibly a fourth, which is undergoing a feasibility study — will need power from its controversial and expensive Site C hydroelectric dam. bit.ly/2xToKD9

    ** Bombardier Inc will likely face additional massive duties when the United States government issues a preliminary decision on Boeing Co's dumping allegations on Thursday. bit.ly/2xUNomI

    ** Alphabet Inc's Google on Wednesday unveiled Pixel 2 and Pixel 2 XL for its fall lineup. The pair of devices announced during a keynote in Mountain View, California, are the successors to the company's smartphone debut last year. bit.ly/2xUEoy5 (Compiled by Bengaluru newsroom)



    Britain

    The Times

    -Tesco Plc has restored its dividend after a three-year hiatus in a "symbolic" moment for a company that three years ago was reeling from an accountancy scandal and market downturn. bit.ly/2fT3vu6

    SPONSORED

    -Facebook Inc's tax affairs fell under the spotlight again after it revealed that it paid 5.1 million pounds ($6.75 million) corporation tax in Britain last year, even though its revenues quadrupled to 842 million pounds ($1.11 billion). bit.ly/2fSdQ9N

    The Guardian

    -Guinness owner Diageo Plc , is planning to redevelop part of the brewer's Dublin site, renovating the historic buildings in a scheme to create offices, shops, hotels and housing. bit.ly/2fSqpSs

    -The Unite union of Monarch Airlines has launched legal action on behalf of more than 1,800 Monarch staff who were laid off, in a move that could add millions to the taxpayers' bill for the collapse of the airline. bit.ly/2fSHNXj

    The Telegraph

    -Airbnb is looking to grab a larger slice of the business trip market in partnering with WeWork Cos to offer those staying in accommodation listed on its website the option to rent a desk in their nearest office. bit.ly/2fRNLaR

    -The co-founder of convenience store chain McColl's Retail Group James Lancaster has stepped down from the board and sold his entire remaining stake for 33.6 million pounds ($44.46 million) as he gears up to lead a rescue of embattled wholesaler Palmer & Harvey Plc. bit.ly/2fRNCUR

    Sky News

    -Bidders for Flora margarine are signing up some of Unilever Plc's former top executives to smooth a path to a 6 billion pounds ($7.94 billion) takeover of the Anglo-Dutch consumer goods company's spreads division. bit.ly/2fQ3IhG

    -TMF Group will unveil plans for a 1 billion pound ($1.32 billion) London listing this week that will provide a boost to the City's lukewarm market for company flotations. bit.ly/2fRvmeo

    The Independent

    -The United Kingdom's Big Six gas and electricity suppliers saw billions wiped off their stockmarket valuations after Prime Minister Theresa May outlined plans to go ahead with a cap on energy prices. ind.pn/2fRNOU8

    http://www.zerohedge.com/news/2017-10-05/frontrunning-october-5
     
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    DB - Opening Bell: 10.5.17
    https://dealbreaker.com/2017/10/opening-bell-10-5-17/

    Naked Capitalism Links 10/05
    https://www.nakedcapitalism.com/2017/10/links-10517.html

    SA - Market News Live Feed 10/05
    https://seekingalpha.com/market-news

    TBP - 10 Thursday AM Reads 10/05
    http://ritholtz.com/2017/10/thursday-reads-20-4/

    CWS - Morning News: October 5, 2017
    http://www.crossingwallstreet.com/archives/2017/10/morning-news-october-5-2017.html

    TRB - Hot Links: The Next Generation 10/05
    http://thereformedbroker.com/2017/10/05/hot-links-the-next-generation/

    SA - Wall Street Breakfast: White House To Set Space Agenda 10/05
    https://seekingalpha.com/article/4111802-wall-street-breakfast-white-house-set-space-agenda

    MtM - Sterling and Aussie Weakness Featured in the Otherwise Becalmed FX Market 10/05
    http://www.marctomarket.com/#!/2017/10/sterling-and-aussie-weakness-featured.html
     
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    Asian Metals Market Update: October-05-2017
    By: Chintan Karnani, Insignia Consultants
    Incoming US jobs numbers suggest robust consumption and growth. A December interest rate hike by the Federal Reserve has been factored in by the markets. There can be two interest rate hikes before March of next year if the US economy adds over 180,000 jobs every month in the October to December period. The only risk is that instead of Yellen some moron is made the Federal Reserve chief.
     
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    Dollar Surge Continues Ahead Of Jobs Report; Europe Dips As Catalan Fears Return

    [​IMG]
    by Tyler Durden
    Oct 6, 2017 7:02 AM


    World stocks eased back from record highs and fell for the first time in eight days, as jitters about Catalonia’s independence push returned while bets on higher U.S. interest rates sent the dollar to its highest since mid August; S&P 500 futures were modestly in the red - as they have been every day this week before levitating to record highs - ahead of hurricane-distorted nonfarm payrolls data (full preview here). U.S. jobs report will also be released Friday with a speech on monetary policy by the New York Fed chief.

    On Thursday the S&P 500 reached its latest all-time high after better-than-forecast American factory orders and hawkish comments by SF Fed President John Williams reinforced optimism in the world’s largest economy, and pushed the dollar higher. Oil fell and the gold price edged higher. The VIX declined to a new record low going back to 1990.

    [​IMG]

    “Uncertainty about whether Catalonian parliament will meet on Monday persists,” Commerzbank strategists said in a note.

    Friday’s other focus for markets will be U.S. jobs data due out at 830am ET. Wall Street consensus is for a 90,000 print down from 156,000 new jobs in August. The number however will be largely distorted by hurricanes, resulting in a drop in jobs offset by a rise in wages. The number will be largely meaningless, because as Bloomberg's David Finnery writes, "any weakness will be attributed to hurricanes, while a beat on payrolls or wages would be seen as supporting a Federal Reserve interest rate increase in December."

    As Deutsche Bank writes overnight, it's fair to say that inflation is a more important variable than employment at the moment for central banks. An in-line ADP print (135k) earlier in the week and decent employment component readings out of the ISM’s makes it feel like the whisper number is slightly above the market consensus for today of 80k (vs. 156k in August). DB economists expect a 50k reading, noting that the initially reported September 2005 employment report, which followed
    Hurricane Katrina, showed a -35k decline in nonfarm payrolls after averaging 174k over the three months ending in August 2005. It’s worth noting that the highest and lowest economist forecasts on Bloomberg for today are 260k and -45k - so the street collectively appears pretty confused. In these high intensity wage/inflation watching times, the
    average hourly earnings will be key.

    Since U.S. data this week has been solid on the whole, it has been one of the reasons for the dollar’s strength by also feeding bets that the Federal Reserve will raise U.S. interest rates for a third time this year in December. According to Reuters, interest rate futures traders are now pricing in an 86 percent likelihood of a December rate hike, up from 78 percent a week ago, according to the CME Group’s FedWatch Tool. Aberdeen Standard Investments Senior Investment Manager James Athey said the question now was what happens next year. Not only is inflation still subdued but the Fed could well get a new head.

    “Investors need a lot of convincing about how far this Fed will hike without some decent wage growth and inflation,” he said. “In any case, the Fed’s thinking is going to be extremely hard to predict over the coming months as so many members change.”

    Ahead of the payrolls report, Asian stocks rose, set to cap their best week since July, after U.S. economic reports and Fed speaker comments bolstered optimism on the global economy. The MSCI Asia Pacific Index climbed 0.2% to 163.17, its highest close in two weeks. With China's holiday week coming to an end, and maindland market still closed, the Hang Seng Index posted its biggest weekly increase since mid-July and closed at its highest since December 2007 as Geely Automobile Holdings - the year’s top performer - helped offset loses by Macau casino operators. The Hang Seng Index rose 0.3% to 28,458.04 after earlier advancing as much as 0.9%; the index rose 3.3% on the week. Hang Seng China Enterprises Index adds 0.5% for weekly gain of 5%. Japan’s Topix index rose, completing its fourth weekly gain, as banks and insurance shares climbed. Australian shares advanced, halting a three-day slide, as BHP Billiton Ltd. and Rio Tinto Ltd. led a rally of metals producers.

    European equities traded marginally flat, with underperformance evident in the IBEX: Spanish stocks and bond prices, which surged on Thursday, were sent tumbling back again as a Catalonian official said the region's parliament would meet on Monday in defiance of a ruling by Spain's constitutional court. Spain's defiance also sent the euro scuttling back below $1.17 again and gave the dollar another leg up as it headed for a fourth consecutive week of gains a move that is also starting to apply pressure to currency-sensitive emerging markets. The higher than expected German Industry Orders paved no immediate bearish pressure in German Bunds, despite opening marginally weaker, led by the US following hawkish Fed commentary yesterday.


    The Bloomberg Dollar Spot Index extended its gains, rising to an 11 week high as it moved above yearly trendline resistance before U.S. payrolls, while Treasuries were pressured after London stepped in. The Yen is set to post its fourth straight weekly loss against the dollar, which will make the longest streak since early July. The loonie hit a five-week low ahead of Canadian labor data, while the pound headed for its biggest weekly decline versus the dollar since last October’s ‘flash crash’ as doubts on Theresa May’s future as U.K. Prime Minister grew, with many of her own party members demanding she quit. Sterling was set for its steepest weekly drop against the euro since July. It could slip even further given the chaos within the Conservative party and less-than-encouraging U.K. economic data, analysts said. This is a swift turn in fortunes for the pound.

    In rates, the yield on 10-year Treasuries advanced two basis points to 2.36 percent, the highest in more than 12 weeks. Germany’s 10-year yield rose three basis points. Britain’s 10-year yield was unchanged at 1.387 percent, the highest in eight month.

    In commodities Brent crude was down 0.1 percent at $56.94 a barrel. The futures contract had jumped 2.1 percent overnight on signs Saudi Arabia and Russia would limit production through next year, although caution towards a tropical storm heading for the Gulf of Mexico cut short the advance. Gold gained 0.1 percent to $1,269.48 an ounce. Copper advanced 0.1 percent to $3.05 a pound, the highest in more than three weeks.

    Aside from US nonfarm payrolls, looking ahead highlights include the Canadian jobs reports, BoE’s Haldane, Fed’s Bostic, Dudley and Kaplan.

    Market Snapshot
    • S&P 500 futures down 0.06% to 2,548.50
    • VIX Index up 0.8%
    • STOXX Europe 600 down 0.2% to 390.31
    • MSCI Asia up 0.2% to 163.17
    • MSCI Asia ex Japan up 0.4% to 538.72
    • Nikkei up 0.3% to 20,690.71
    • Topix up 0.3% to 1,687.16
    • Hang Seng Index up 0.3% to 28,458.04
    • Shanghai Composite up 0.3% to 3,348.94
    • Sensex up 0.6% to 31,773.78
    • Australia S&P/ASX 200 up 1% to 5,710.68
    • Kospi up 0.9% to 2,394.47
    • German 10Y yield rose 2.8 bps to 0.484%
    • Euro down 0.1% to $1.1699
    • Italian 10Y yield fell 4.4 bps to 1.857%
    • Spanish 10Y yield rose 5.9 bps to 1.758%
    • WTI crude down 0.5% to $50.53
    • Brent drops 0.5% to $50.55
    • Gold spot up 0.07% to $1,269.16
    • U.S. Dollar Index up 0.1% to 94.06
    Top Headline News
    • U.S. President Donald Trump said a military gathering Thursday night might represent “the calm before the storm,” without clarifying his comments
    • Crisis in Spain: Spanish Prime Minister Mariano Rajoy convenes his cabinet on Friday as Catalan lawmakers plan to hold a meeting on Monday defying a suspension by Spain’s Constitutional Court
    • The Trump administration is set to release its blueprint for overhauling regulation of U.S. markets, an expansive list of priorities that touches on the stock, bond and derivatives trading that fuels Walls Street profits
    • German manufacturing orders rose 7.8% y/y in August, the fastest expansion since 2016, in a sign that Europe’s largest economy is set to sustain its robust pace of growth
    • With U.K. PM Theresa May’s leadership in doubt, four scenarios are that (1) May clings on, with lawmakers calculating a leadership battle would lead to another election that they may lose to Labour (perceived by markets as the least bad option), (2) that May is ousted, triggering a leadership race, (3) that May resigns and a consensus leader emerges, or (4) a general election where Labour’s Corbyn wins
    • The national working group on Swiss franc reference rates recommended SARON as alternative to the Swiss franc Libor
    • Japan Credit Rating Agency says it may consider downgrading Japan’s AAA sovereign rating if the government “completely’’ or “effectively’’ gives up its balanced-budget target
    • Tokyo Governor Yuriko Koike’s opposition party released an election manifesto ahead of the Oct. 22 vote that distances it from the Bank of Japan’s controversial stimulus program while indicating that any change will be so gradual that it’s unlikely to roil markets
    • HSBC Currency Unit Used Code to Trigger Front- Running, U.S. Says
    • Costco Fourth Quarter EPS Beats Estimates
    • U.S. Delays Announcement on Bombardier Jet Duties
    Asian stocks took the impetus from another record day on Wall St where all major indices hit new all-time highs, with the S&P 500 posting its longest win streak in around 4 years and Nasdaq outperformed on tech strength. This underpinned sentiment in the region with ASX 200 (+1.04%) led higher by commodity names after gains in copper and crude oil. Nikkei 225 (+0.30%) printed its highest in 2 years but with gains somewhat capped as participants were tentative ahead of today’s Non-Farm Payrolls report and the extended weekend, while Hang Seng (+0.3%) also conformed to the global upbeat sentiment as Hong Kong participants picked up from where they left off on return from yesterday’s market closure. 10yr JGBs were subdued with a lack of demand seen amid gains in riskier assets and as the BoJ’s presence in the market for JPY 710bln of 5yr to super-long JGBs failed to support. RBA's Harper says not ruling out a rate cut and a rate response could be warranted should a wider stalling of consumption happen.

    Top Asian News
    • Bank Indonesia Sees Narrowing Window for Policy Rate Easing
    • StanChart Is Said to Be Probed on $1.4 Billion Client Transfers
    • Ivory Coast Starts Alstom Rail Talks After Hyundai Edged Out
    European bourses have traded subdued, with Spain and Italy the noticeable under-performers, down around 0.50%; the former’s IBEX trades around session lows, following a Catalan official stating parliament will meet on Monday, not helped by the weakness specifically in peripheral banks. The higher than expected German Industry Orders paved no immediate bearish pressure in German Bunds, despite opening marginally weaker, led by the US following hawkish Fed commentary yesterday. The US will stay in focus later in the session, with focus on NFP, possibly touted to be an anomaly figure, following the catastrophic hurricanes seen in the States. Elsewhere, Spanish yields continue to trade higher, alongside other European bonds. The German 10y breaking through the 161.00 handle, likely a result of 25000 contracts pushing the asset class down from 161.08.

    Top European News
    • German Factory Orders Surge as Economy Sustains Strong Momentum
    • With May’s Leadership in Doubt, Four Scenarios for Brexit
    • U.K. Home-Price Inflation Accelerates to Fastest in Seven Months
    • Swiss Working Group Recommends Saron as CHF-Libor Alternative
    • EU Steelmakers Win Hot-Rolled-Coil Tariffs on Four More Nations
    • Catalan Separatists Squeezed Further as Spain Tightens Grip
    In currencies, the NFP trade has been evident across FX markets, with the majority of major pairs seeing range bound trade. The week’s strong US data has kept the greenback set for its fourth week of gains, as the DXY broke 94.00 in Asian hours. GBP has ground slowly lower through early European trade, as the currency continues to be hampered by concerns over PM May, with reports staying that around 30 rebels are calling for her immediate departure. The EUR dipped below 1.17 amid the strength in the USD-index, although 1.1690 holding firm for now, while cross related buying in EUR/GBP has stemmed the downside in EUR. Political woes escalating in the UK could likely see EUR/GBP back at 0.90. Huge expiries in EUR/USD likely to guide price action with 6.3bln worth of vanilla options from 1.1640-1.1750.

    In commodities, WTI has consolidated above 50.00/bbl, but looks indecisive as non-farm Friday is the theme of the day. Commentary has been muted today, with Saudi Arabia making no firm pledge yesterday to extend a deal between OPEC, Russia and other producers on cutting supplies but said it was ‘flexible’. Copper was the metal highlight overnight, buoyed by news that the re-opening of one of the world’s biggest mines has run into trouble. Copper managed to break through the 3.00 handle on the news and has consolidated above 3.02. Precious metals have been in rangebound trade, with many likely set to await today’s payroll report.

    Looking at the day ahead, the change in nonfarm and manufacturing payrolls, September unemployment rate, hourly earnings, wholesale inventories, and consumer credit are all due. Onto other events, BOE’s Chief economist Haldane speaks at the “Great Trust Shift” debate. In the US, we have three more Fed speakers, including: Bostic, Kaplan and Dudley, with the latter speaking on “The Monetary Policy Outlook and the Importance of Higher Education for Economic Mobility”.

    US Event Calendar
    • 8:30am: Change in Nonfarm Payrolls, est. 80,000, prior 156,000
      • Change in Private Payrolls, est. 74,000, prior 165,000
      • Change in Manufact. Payrolls, est. 10,000, prior 36,000
      • Unemployment Rate, est. 4.4%, prior 4.4%
      • Average Hourly Earnings MoM, est. 0.3%, prior 0.1%
      • Average Hourly Earnings YoY, est. 2.5%, prior 2.5%
      • Average Weekly Hours All Employees, est. 34.4, prior 34.4
      • Labor Force Participation Rate, prior 62.9%
      • Underemployment Rate, prior 8.6%
    • 10am: Wholesale Trade Sales MoM, est. 0.0%, prior -0.1%; Wholesale Inventories MoM, est. 1.0%, prior 1.0%
    • 3pm: Consumer Credit, est. $15.5b, prior $18.5b
    DB's Jim Reid concludes the overnight wrap

    I got home last night from my US trip to find my wife on the floor changing one twin's nappy whilst bottle feeding the other with her foot. I have never seen anything like it. After rushing to her aid we then eventually watched the final Narcos of season 3 - a season we have watched whilst feeding the twins on our laps of an evening. Given the shocking violence I'm wondering what impact this will have on them (Kray twins??) but needs must! Age appropriate programs are a bit of a barbell really as up to a certain age it surely doesn't matter (I hope). However at what age should you stop a baby watching say a violent 18 movie, only to allow them again a decade and a half or so later? Answers welcome. Narcos comes highly recommended by the way. I can believe it’s actually a true story!

    The Colombian politics in Narcos actually make current global political meanderings seem a bit dull, but the headlines continue to fly. However one could argue that the last 24 hours is a nice microcosm for markets in 2017. We’ve had plenty of headlines (mainly political) but volatility continues to remain historically low with the VIX below 10 for the 7th session in a row yesterday and in fact hitting the lowest closing level on record last night (9.19) beating the 9.31 in December 1993, but still higher than the intra-day low of 8.84 in July this year.

    Equity markets continued to grind higher with a late bounce in Europe helping stocks to just about finish onside. The S&P 500 meanwhile rose +0.56% to finish higher for the 8th session in a row (longest run since July 2013) and also notch up yet another record high. It’s worth noting that the late recovery in Europe appeared to be driven by Spain, following the news that Catalan separatists are on the verge of putting off a definitive declaration of independence. This supposedly follows some on the Catalan side as pushing for a negotiated settlement. Prior to this, the Spanish Constitutional Court had announced that it was suspending a session of the Catalan Parliament on Monday although rebels say they are still planning to convene. The Spanish Press also reported that CaixaBank was considering a temporary move of its legal domicile to the Balearic Islands which might have helped temper the separatists push. In the evening, Banco Sabadell announced plans to move out of the region and into Alicante. It seems the Spanish Government are going to make this easier for companies to relocate in order to put pressure on the rebels. A strong 2 year auction was also a help to sentiment earlier in the session. 10yrs Bonds rallied 7.8bp (the best day since late July) and the IBEX rebounded +2.51%. Bunds on the other hand were broaldy flat on the day but 2.9bp off the intra-day lows at the close. Overall it feels like there are quite a few more ebb and flows to this Spanish story to come though. Will the Catalan's Parliament meet on Monday and will they declare independence in the new few days? Or will the business community exodus create an incentive to negotiate.

    Moving onto today, the payrolls report will be the next main market hurdle although the hurricane impacts will mean the information contained within it will have less value than normal. It's also fair to say that inflation is a more important variable than employment at the moment for central banks. An in-line ADP print (135k) earlier in the week and decent employment component readings out of the ISM’s makes it feel like the whisper number is slightly above the market consensus for today of 80k (vs. 156k in August). Our US economists expect a 50k reading though. They've noted that the initially reported September 2005 employment report, which followed Hurricane Katrina, showed a -35k decline in nonfarm payrolls after averaging 174k over the three months ending in August 2005. It’s worth noting that the highest and lowest economist forecasts on Bloomberg for today are 260k and -45k - so the street collectively appears pretty confused. In these high intensity wage/inflation watching times, the average hourly earnings will be key. Our guys expect a solid 0.3% m/m partly for technical reasons.

    Leading into the report Treasuries were flattish for much of the European session yesterday before yields spiked 3.8bp on the back of comments from the Fed’s Harker and Williams, before closing 2.5bp higher for the day. The former said that he had “pencilled in” a third rate hike this year for December, while Williams (a voter next year) sounded generally upbeat on the inflationary environment, noting that “as these (temporary) effects wane and the strong economy pushes inflation higher for prices….I am optimistic that inflation will move up to our 2% goal over the next couple of years”. Further, the “favourable employment numbers, combined with findings on inflation and steady pace of growth, are all behind my confidence that rates will need to rise to their new normal levels”. The odds of a December rate hike rose c3ppt overnight to 73.3% (per Bloomberg).

    Staying with all things rates focused, the ECB meeting minutes weren't a huge event but confirmed that there exists a trade-offs between the various taper announcements that could be made at the October meeting: We discovered that “the benefits from a longer intended purchase horizon, combined with a greater reduction in pace, were compared with those from a shorter period of purchases and larger monthly volumes”. This follows various ECB comments of late suggesting that the momentum is moving towards a taper to EUR30bn/month but with a 9 month commitment over EUR40bn for 6 months. It could be that this is a compromise between the hawks and doves in that there is less QE but the program is reduced more steadily with the added benefit that it would also get us past the Italian election and all the noise that could come with a fresh taper decision just as they have to vote. DB have changed their call for the October meeting from 40bln x 6mths to 30bln x 9mths, and dropped the call for a oneoff depo hike in mid-2018 but still sees the first refi rate hike in mid-2019.

    This morning in Asia, markets have followed the positive lead from the US and are trading modestly higher. As we type, the Hang Seng (+0.44%), Nikkei (+0.25%) and ASX 200 (+0.80%) are all up modestly. The Chinese bourses and Kospi remain closed for holidays.

    Turning to the UK, Conservative lawmaker Ed Vaizey publicly noted his concerns about PM May continuing as leader and then Grant Shapps (who served as Conservative Party Chaiman) said he has a list of colleagues who want to choose a new leader of the party. DB’s Oliver Harvey has published a timely note “Brexit update: leadership options” looking at potential implications and scenarios if there was a leadership change. His base case is PM May will stay on, at least until the current stage of Brexit negotiations and autumn Budget are concluded. This is in part given the lack of obvious replacements. Other less likely scenarios considered include a full leadership contest and an orderly transition to a new leader. Overall, he believes that developments continue to point to an EEA-based transitional deal as the realistic medium term direction of travel. Please refer to his note for more details.

    Quickly recapping other market performance yesterday. Increased signs of stability at Spain boosted European markets, with Italian 10y bond yields down 4bp and equities broadly higher, with the Stoxx 600 (+0.16%), FTSE (+0.54%) and Italy’s FTSE MIB (+0.49%) all modestly higher, but the DAX dipping 0.02%. Over in the S&P, the rally was broad based with only two sectors marginally in the red (telco & utilities, both -0.1%), while gains were led by tech stocks (+1.06%) and financials.

    Turning to currencies, the US dollar index gained 0.54% to a 2 months high, following stronger than expected macro data and hawkish Fed speak. Elsewhere, Sterling weakened 0.97%, partly due to increased concerns on a potential leadership change, but the Euro/USD (-0.41%) didn’t seem to be impacted by the ECB minutes which reaffirmed that the stronger Euro “represented a source of concern, which required monitoring”. Moving onto commodities, WTI oil snapped a three day losing streak to be up 1.62% overnight asSaudi Arabiais reportedly interested in acquiring Russian oil assets and both countries would continue cooperation on mitigating the excess global crude supply. We shall learn more as Saudi’s King is scheduled to visit Russia later in the week.

    Elsewhere, precious metals were little changed (Gold -0.52%; Silver +0.07%). Away from the markets, BOE’s McCafferty has reaffirmed his hawkish bias. He said the little slack left in the economy “is likely to disappear quite quickly, while inflation is projected to persistently overshoot the target”. Further, he said rates could rise several times before BOE starts to unwind the bond purchase program. Elsewhere, he noted that “until recently, financial markets appear to believe….Brexit uncertainties effectively tied our hands…this, we felt was a misreading of our reaction function”. The odds of a rate hike in December is currently at 79.4% (per Bloomberg).

    Turning back to Puerto Rico’s municipal debt ordeal, where President Trump had earlier suggested that the government’s debt should be wiped clean to help the island to recover from Hurricane Maria. Overnight, we got the official confirmation from White House Press Secretary Sarah Sanders, who said “there’s a (bankruptcy) process for how to deal with the Puerto Rico’s debt….the President wants it to go through that process and that’s the stage we’re at on that”. Puerto Rico’s benchmark 2035 bond was broadly unchanged at 38c/$. The day before, the price tumbled down from 44c/$ to as low as 30c/$ intraday, before recovering to 38c/$ after Trump’s Budget director Mick Mulvaney said we should not take Mr Trump’s comments too literally.

    Staying in the US, the senate has voted (65-32) to confirm Randal Quarles as a new Fed governor, becoming the first of several new Fed nominees President Trump will choose over the coming weeks and months.

    Finally, IMF’s Managing Director Largarde has provided a glimpse of what to expect in next week’s IMF World Economic outlook report. Speaking at Harvard University, she noted that a cyclical pickup in investment and trade in advance economies (particularly Europe) is creating better than expected growth. Elsewhere, US growth will be above trend this year and next.

    Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the macro data was broadly better than market expectations. August factory orders was stronger than expected at 1.2% mom (vs. 1%) and is now up 5.7% yoy. The final readings on August core durable goods orders was revised up to 0.5% mom (vs. 0.2% expected) and capital goods were also higher at 1.1% mom (vs. 0.9% expected). Elsewhere, the weekly initial jobless claims (260k vs. 265k expected) and continuing claims (1,938k vs. 1,950k expected) were also marginally better than expected. Finally, the August trade deficit was slightly narrower at -$42.4bln (vs. -$42.7bln expected), which is the smallest deficit in 11 months.

    In Europe, Switzerland’s September CPI was higher than expected at 0.8% yoy (vs. 0.5% yoy previous, 0.2% mom) and the highest since 2011. Elsewhere, the Eurozone’s retail PMI was stronger than expected at 52.3 (vs. 50.8 previous), led by gains from France (53.3 vs. 50.4 previous) and Italy (50.2 vs. 48 previous), but partly offset by Germany (52.8 vs. 53.0 previous).

    Looking at the day ahead, Germany’s August factory orders (0.7% mom expected) will be due early. Then we have France’s August trade and budget balance along with Italy’s retail sales and UK’s Halifax house price index. Over in the US, the change in nonfarm and manufacturing payrolls, September unemployment rate, hourly earnings, wholesale inventories, and consumer credit are all due. Onto other events, BOE’s Chief economist Haldane speaks at the “Great Trust Shift” debate. In the US, we have three more Fed speakers, including: Bostic, Kaplan and Dudley, with the latter speaking on “The Monetary Policy Outlook and the Importance of Higher Education for Economic Mobility”.

    http://www.zerohedge.com/news/2017-...-jobs-report-europe-dips-catalan-fears-return
     
  32. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    JPMorgan Updates By-laws In Case Of "Nuclear Disaster" Or World War III

    [​IMG]
    by Tyler Durden
    Oct 5, 2017 10:48 PM



    In the most bizarre news of the day, Bloomberg's Hugh Son noticed that in a late Thursday filing, the board of JPMorgan approved a series of revisions to the bank's by-laws, including a particularly notable one: a new section defining what constitutes a quorum in an emergency resulting from "an attack on the United States" or a “nuclear or atomic disaster.” That scenario is listed among emergencies that - understandably - might make it hard to hold a normal meeting for board members of America's largest bank.

    The clause can be activated not just in case of a nuclear disaster or World War III, but also in a variety of situations including "without limitation apparent terrorist activity or the imminent threat of such activity, chemical and biological attacks, natural disasters, or other hazards or causes commonly known as acts of God."

    In short, JPMorgan's Board has decided it is time to seriously consider a TEOTWAWKI scenario.

    As Son notes, in such an event, any member of the board or the firm’s operating committee can call a meeting using “any available means of communication.” And, just in case everyone else on the Board happens to die, one person will be sufficient to constitute a quorum. Vacancies can be filled by a majority vote of available directors. And if none are around, then designated officers can stand in. No officer, director or employee can be held liable in such a situation, except for “willful misconduct.”

    The revised Emergency By-Laws are reposted below (highlights ours):


    ARTICLE XI

    Emergency By-laws

    Section 11.01. Emergency By-laws. This Article XI shall be operative during any emergency resulting from an attack on the United States or on a locality in which the Corporation conducts its business or customarily holds meetings of its Board or its stockholders, or during any nuclear or atomic disaster, or during the existence of any catastrophe or other similar emergency condition (including without limitation apparent terrorist activity or the imminent threat of such activity, chemical and biological attacks, natural disasters, or other hazards or causes commonly known as acts of God), as a result of which a quorum of the Board or the Executive Committee thereof cannot readily be convened for action (an “Emergency”), notwithstanding any different or conflicting provisions in the preceding Articles of these By-laws, the Certificate of Incorporation or the General Corporation Law. To the extent not inconsistent with the provisions of this Article XI, the By-laws provided in the other Articles of these By-laws and the provisions of the Certificate of Incorporation shall remain in effect during such Emergency and upon termination of such Emergency, the provisions of this Article XI shall cease to be operative.

    Section 11.02. Meetings. During any Emergency, a meeting of the Board, or any committee thereof, may be called by the Chairman or any other member of the Board or the Chief Executive Officer, or any member of the Corporation’s Operating Committee (each, a “Designated Officer” and collectively, the “Designated Officers”), or the Secretary. Notice of the time and place of any meeting of the Board or any committee thereof during an Emergency shall be given by any available means of communication by the individual calling the meeting to such of the directors and/or Designated Officers who shall be deemed to be directors of the Corporation for purposes of obtaining a quorum during an Emergency if a quorum of directors cannot otherwise be obtained during such Emergency, in each case, as it may be feasible to reach. Such notice shall be given at such time in advance of the meeting as, in the judgment of the individual calling the meeting, circumstances permit.

    Section 11.03. Quorum. At any meeting of the Board, or any committee thereof, called in accordance with Section 11.02 above, the presence of one director shall constitute a quorum for the transaction of business. Vacancies on the Board, or any committee thereof, may be filled by a majority vote of the directors in attendance at the meeting. In the event that no directors are able to attend the meeting of the Board, then the Designated Officers in attendance shall serve as directors for the meeting, without any additional quorum requirement and will have full powers to act as directors of the Corporation for such meeting.

    Section 11.04. Amendments. At any meeting called in accordance with Section 11.02 above, the Board or a committee of the Board, as the case may be, may modify, amend or add to the provisions of this Article XI so as to make any provision that may be practical or necessary for the circumstances of the Emergency.

    Section 11.05. Management Contingency Plan. During an Emergency, the Corporation shall be managed by the Operating Committee under the direction of the Chief Executive Officer. In the absence of the Chief Executive Officer or his or her successor, the Operating Committee shall act under the direction of the Operating Committee member with the longest tenure with the Corporation.

    Section 11.06. Liability. No officer, director or employee of the Corporation acting in accordance with the provisions of this Article XI shall be liable except for willful misconduct.

    Section 11.07. Repeal or Change. The provisions of this Article XI shall be subject to repeal or change by further action of the Board or by action of the stockholders, but no such repeal or change shall modify the provisions of Section 11.06 of this Article XI with regard to action taken prior to the time of such repeal or change.

    Section 11.08. Termination of Emergency. The provisions of this Article XI shall cease to be operative upon the termination of the Emergency as determined by a quorum of the Board or the Executive Committee thereof in accordance with Sections 2.06 and 3.01, respectively, of these By-laws.

    http://www.zerohedge.com/news/2017-...s-laws-case-nuclear-disaster-or-world-war-iii
     
  33. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    DB - Opening Bell: 10.6.17
    https://dealbreaker.com/2017/10/opening-bell-10-6-17/

    Naked Capitalism Links 10/06
    https://www.nakedcapitalism.com/2017/10/links-10617.html

    TBP - 10 Friday AM Reads 10/06
    http://ritholtz.com/2017/10/fridat-am-reads/

    SA - Market News Live Feed 10/06
    https://seekingalpha.com/market-news

    CWS - Morning News: October 6, 2017
    http://www.crossingwallstreet.com/archives/2017/10/morning-news-october-6-2017.html

    CWS Market Review – October 6, 2017
    http://www.crossingwallstreet.com/archives/2017/10/cws-market-review-october-6-2017.html

    MtM - Look Through the US Jobs Report 10/06
    http://www.marctomarket.com/#!/2017/10/look-through-us-jobs-report.html

    MtM - US Storm-Skewed Report Means Nothing about Anything 10/06
    http://www.marctomarket.com/#!/2017/10/us-storm-skewed-report-means-nothing.html

    SA - Wall Street Breakfast: Dollar Rallies Amid Catalonia Crisis, U.K. Political Woes 10/06
    https://seekingalpha.com/article/41...lies-amid-catalonia-crisis-u-k-political-woes
     
  34. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Asian Metals Market Update: October-06-2017
    By: Chintan Karnani, Insignia Consultants
    Chinese demand will be key to precious metals and industrial metals once China reopens tomorrow. Industrial metals except nickel have remained firm in the last week. Gold and silver have fallen in the last week. If the US dollar continues to gain and Chinese demand is not in line with expectations then gold and silver will see another wave of sell off. If not then gold and silver may form a medium-term bottom.
     
  35. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    The upcoming increase in interest rates


    -- Published: Friday, 6 October 2017

    By Alasdair Macleod

    Last week, both Janet Yellen of the Fed and Mark Carney of the Bank of England prepared financial markets for interest rate increases. The working assumption should be that this was coordinated, and that both the ECB and the Bank of Japan must be considering similar moves.

    Central banks coordinate their monetary policies as much as possible, which is why we can take the view we are about to embark on a new policy phase of higher interest rates. The intention of this new phase must be to normalise rates in the belief they are too stimulative for current economic conditions. Doubtless, investors will be reassessing their portfolio allocations in this light.

    It should become clear to them that bond yields will rise from the short end of the yield curve, producing headwinds for equities. The effects will vary between jurisdictions, depending on multiple factors, not least of which is the extent to which interest rates and bond yields will have to rise to reflect developing economic conditions. The two markets where the change in interest rate policy are likely to have the greatest effect are in the Eurozone countries and Japan, where financial stimulus and negative rates have yet to be reversed.

    Investors who do not understand these changing dynamics could lose a lot of money. Based on price theory and historical experience, this article concludes that bond yields are likely to rise more than currently expected, and equities will have to weather credit outflows from financial assets. Therefore, equities are likely to enter a bear market soon. Commercial and industrial property should benefit from capital flows redirected from financial assets, giving them one last spurt before the inevitable financial crisis. Sound money, physical gold, should become the safest asset of all, and should see increasing investment demand.

    Assessing potential outcomes of this new phase of monetary policy is a multi-dimensional puzzle. There’s the true state of the economy, the phase of the credit cycle, and the understanding, or more accurately the lack of it, of the relationships between money and prices by policy makers. This article is aimed at making sense of these diverse factors and their interaction. We start by examining the intellectual deficit in economic and price theory to improve our understanding of where the policy mistakes lie, the resulting capital flows that will determine asset values, and therefore the likely outcomes for different asset classes.


    Interest rate fallacies


    The most egregious error made by central banks and economists alike is the assumption that gradually raising interest rates acts as a brake on the rate of economic expansion, and therefore controls price inflation. Economic commentators generally regard interest rates as the “price” of money. It is from this fallacy that the belief arises that manipulating interest rates has a predictable effect on the demand for money in circulation relative to goods, and therefore can be used to target price inflation. This line of reasoning makes even a sieve look watertight. Interest rates are the preserve of the future exchange of goods relative to today, and have nothing to do with the quantity of money. They only determine how it is used. In a free market, rising interest rates tell us that demand for credit is increasing relative to demand for cash, while falling interest rates indicate the opposite. What matters are the proportions so allocated, and not the total.

    Therefore, if a central bank increases interest rates, it will be less demanded in the form of credit. In the past, before consumer credit became the dominant destination of bank credit over industrial production, increasing interest rates would discourage marginal projects from proceeding, and it would make many projects already under way uneconomic. Raising interest rates therefore acted to limit the production of goods, and not the demand for them. In the first stages of a central bank induced rise in interest rates, the limit placed on the supply of goods is even likely to have the effect of pushing prices higher for a brief time or encouraging import substitution, given the stickiness of labour markets because a rise in unemployment is yet to occur.

    It should be apparent that management of interest rates before consumer debt came to dominate credit allocation was never going to work as a means of regulating the quantity of money, and therefore price inflation. Nowadays, new credit allocation is less angled at increasing and improving production, and its greater use is to finance mortgages and consumption. This is particularly true in the US and UK, but generally less so elsewhere.

    Therefore, the consequences of managing interest rates are different from the past in key respects. Raising interest rates does not, in the main, reduce consumer demand for credit, except on mortgages, which we will come to in a minute. Credit cards and uncollateralised bank overdrafts typically charge as much as 20% on uncleared balances, even at times of zero interest rate policy, demonstrating their lack of interest rate sensitivity. The same is true of student debt.

    Interest on motor loans and similar credit purchases are set not by central bank interest rate policy, but by competition for sales of physical product. Manufacturers have two basic sources of profit: the margin on sales, and the profits from their associated finance companies. It matters not to them how the sum of the two add up. If wholesale interest rates rise, squeezing their lending margins, they can subsidise their finance operations by discounting the price of their products. Alternatively, by expanding credit, and assuming they have the capacity to do so without committing additional capital, the marginal cost of that credit expansion is tied to extremely low wholesale deposit rates. This is the benefit to a manufacturer of having a captive bank: expanding credit out of thin air to finance sales is low cost.

    However, changes in mortgage rates do influence demand for consumer credit. Mortgage repayments for most home-owners are their largest monthly outgoings, and therefore a rise in rates restricts spending on other goods and services. Furthermore, house prices are set in the main by the cost of mortgage finance, so a rise in interest rates on mortgages has a negative impact on house values. Falling house prices are likely to make consumers more cautious.

    The last thing the Fed and the Bank of England will wish to entertain is raising interest rates to the point where a house price collapse is risked. Understandably, they are very much aware of the economic consequences. In the US, roughly two-thirds of consumer debt is home mortgages. Furthermore, the last credit cycle crash was so obviously centred on residential property that central bankers and bank regulators are sure to be sensitive to trends in mortgage lending. But this is the only form of consumer borrowing that responds to increases in interest rates.

    The belief that interest rates correlate with the rate of inflation is unfounded, as demonstrated by Gibson’s paradox. It springs from the fallacy that an interest rate is money’s price. The basis of monetary policy is therefore fundamentally flawed.

    It should now be clear that there is a lack of knowledge at the most senior levels in central banks about the economic role of interest rates, and therefore the whole basis of monetary policy. A second fallacy is the belief that demand for credit can be micro-managed through quarter point changes in interest rates. Not only is this a reactive policy that seeks to close stable doors after the horses have bolted, but it ignores the reality that the credit cycles engineered by the central banks are the root of the problem. They cause a build-up of non-productive borrowing and investment that is only viable at artificially suppressed interest rates. Increases in interest rates, however small, will eventually trigger the sudden recognition of these distortions in the form of an interest-rate induced economic crisis. The point is that the moment a central bank begins to stimulate credit through monetary policy, it begins to lose control over subsequent events. How they then play out is our next topic.


    The price effects of credit expansion


    The link between changes in the quantity of credit and the effect on prices is far from simple. Credit expansion leads to balancing increases in deposits held in bank accounts, but the category of deposit-owner determines where price inflation occurs.

    In the early stages of a post-crisis economic recovery, increased deposits are predominantly acquired by financial market participants, and therefore early in the recovery phase of the credit cycle financial assets begin to inflate. As bankers and brokers spend a share of their gains on non-financial items, the profits and earnings of their suppliers improve as well. These range from solicitors, accountants, restauranteurs, and builders to purveyors of luxury goods. The benefits of early credit expansion gradually raise the general price level in financial centres and within commuting distance of them, as well as in fashionable holiday resorts habituated by these early receivers of new money. As time passes, further credit expansion benefits a wider population, and prices begin to rise more generally. The effect of absorbing new money into an economy is akin to throwing a stone into a pond and watching the ripples spread outwards, until they are undiscernible.

    All this assumes that the desire to hold money, rather than reduce exposure to increased money balances, remains constant. Unfortunately, this can also vary considerably.

    On the scale of values, the desire to hold money can vary from zero, in which case money is completely valueless, to infinite, in which case goods have no value. The former extreme happens to unbacked state money very occasionally (both Zimbabwe recently, and Germany in 1923 come to mind). The latter is impossible, because humanity needs to buy at least food, clothing and shelter. Therefore, the effect of changes in the desire to hold money relative to goods can have a significant impact on prices, a factor wholly beyond the central banks’ control.

    Consequently, there are two major elements driving the relationship between the quantity of money and prices to consider, as the credit cycle progresses: who is benefiting from credit expansion, and variations in the general desire to hold money relative to spending it. In this credit cycle, those that have benefited most so far have been predominantly people holding financial assets, where price inflation has been rampant. The news last week, that Janet Yellen and Mark Carney now think a more aggressive interest rate policy is appropriate, tells us that their institutions have detected a shift in the application of credit. This being the case, the engine of price inflation will become refocused from financial assets towards the economy as a whole.

    In other words, demand for bank credit from non-financial businesses is picking up, and banks are more willing to lend to them. It is undoubtedly this development that has encouraged the Fed to rein in the expansion of bank credit by reversing quantitative easing. But while there will always be some room on bank balance sheets to expand credit, most of the increase in credit aimed at non-financial activities must come from the sale of financial assets, particularly short-term US Government bills and bonds. And if the Fed tries to reduce its balance sheet at the same time, the fall in bond prices will be greater for it.

    Therefore, bond yields will rise, possibly quite sharply, and the central banks have no option but to sanction increases in short-term interest rates. Hence the interest rate signal, which instead of being a leading indicator of trends, as everyone believes, reflects developments already in the market, being led by demand for non-financial credit.

    The increase in the supply of credit to non-financial businesses will increase the bank balances of their suppliers as the credit is drawn down, leading to a temporary increase in their holdings of money relative to goods. These deposits in turn are then spent on goods and services.

    Demand for goods and services, over and above that already supplied to consumers in the form of mortgages, credit cards, auto and student loans, will therefore have an additional credit stimulus from money flows previously tied up in financial assets. Ownership of cash and deposit balances held at the banks shifts from participants in financial markets towards suppliers of goods and services, which they will then spend on components in the consumer price index.

    Credit expansion in favour of the non-financial sector also increases nominal GDP, which is simply a money total that measures consumption. At last, say the pundits, the economy is picking up. Profit forecasts will be revised upwards. Yet, the rise of government bond yields will be calling time on equity bull markets, which in truth have only reflected suppressed interest rates and bond yields held down by extra credit supply absorbed by financial markets.

    The central banks’ nightmares have only just started. They have already lost control of interest rates, because the banks have begun to lend to Main Street, hence Yellen and Carney’s warning of interest rate increases. Equities and bonds, central to earlier policies of wealth creation are turning into engines of wealth destruction. We are now entering a period when the cost of credit, measured in real terms, is about to fall to the lowest level in the credit cycle.


    Why real interest rates will become more negative


    As the non-financial economy inflates on the back of credit expansion, the character of the credit cycle undergoes significant changes. As we have seen, bank credit is withdrawn from financial activities, to the detriment of financial asset values. It leads to significant selling of short-term government bonds by the banks and the loss of bullish momentum in equity markets, which then enter a bear market. The public tends to be buyers of equities at this stage, because analysts will be revising their profit forecasts upwards, seemingly justifying market valuations. But the error that the public makes is to assume share prices are driven by valuations, when they are driven by monetary flows.

    The flow of bank credit from financials into non-financials will gather pace, encouraged further by falling bond prices, and the banks reducing their assessments of lending risk to the non-financial economy. The banks can even end up competing to lend, and suppress their lending rates by the simple expedient of expanding credit. If a significant number of banks are competing in this manner, deposit rates in the money-markets will be suppressed in turn, reducing their average cost of deposit funding, irrespective of the Fed funds rate.

    Meanwhile, price inflation begins to accelerate as increasing quantities of bank credit end up being spent on goods and services. The combination of an increase in the general price level and competition to lend will, in real terms, lead to negative interest rates once higher price inflation is considered. The continuing suppression of nominal rates by central banks, doubtless worried about wealth destruction in financial markets, is likely to result in the greatest level of negative real rates of the entire credit cycle. The central bank is reluctantly forced to raises its lending rates in a belated attempt to keep up with economic developments. While this has been the evolving situation from the start of this expansionary phase, it will then become increasingly obvious that the public’s preference for money will swing progressively towards preferring goods, as they realise that money’s purchasing power is accelerating its decline.

    Spending on goods of a higher order, or capital goods, increases as well, driven not only by reassessments of the nominal value of their production, but also by the desire to reduce cash balances. But unless bank credit contracts, the money disposed by one party ends up being owned by another, who will equally not wish to hang on to it. This is particularly noticeable in purchases of residential and commercial property, late in the credit cycle.

    Contrary to the impression often given by financial commentators, property is not a financial asset, being non-financial in both origin and use. The fact that rentals give a monetary return is no different from any other non-financial, or productive asset. Property becomes an obvious destination for investors’ money fleeing falling values in financial assets.

    Despite initial rises in nominal borrowing costs and bond yields, property becomes increasingly viewed as a solid asset, and as protection from the decline in money’s purchasing power. Obviously, the price performance of different categories of property can be expected to vary, depending on their exposure to rising nominal interest rates. Residential property markets, when they are highly dependent on mortgage finance, are likely to underperform. The growth of online sales has suppressed the utility of shopping malls and high street retail space. But despite these problems, there is little else available for capital fleeing bond and equity markets. For investors, bricks and mortar are seen to be the natural alternative to financial assets and a depreciating currency, late in the credit cycle.

    Again, it is all about flow of funds. Follow the money. Only this time, instead of inflating investment values, the prices that will be inflated are of goods, services and their associated capital assets.


    Not all jurisdictions are the same


    All major nations are subject to the credit cycle. Attempts by central bankers to coordinate monetary policies through regular meetings at The Bank for International Settlements and at G20 meetings have ensured the eventual crisis phase will be truly global. Furthermore, the global distortions from first stoking up credit demand and then failing to control the consequences are magnified because of this coordination.

    To further confuse observers of this multi-dimensional puzzle, in between credit crises the rate of progression from the recovery phase to expansion varies, and the volume of the credit flows, relative to the size of an individual economy, first into and then away from financial markets, varies as well. This leads to significant anomalies. The US and UK have very high levels of consumer credit exposure, and residential mortgage totals are also elevated. The expansionary phase has been running for some time in South East Asia, perhaps replicating the conditions that led to the Asian crisis in the late 1990s. The switch in interest rates will be greatest in Japan and the Eurozone, where negative interest rates persist, but these jurisdictions overall have a greater propensity to save than their Anglo-Saxon confrères. China plans to expand her way out of the eventual credit crisis, relying on state control through ownership of the banks. Russia, Australia, the Middle East and Africa are tied to a cycle of commodity prices, driven in turn by the expansionary phase of the global credit cycle.

    Different places, different strokes. But at least the bones of the credit cycle are being laid bare. Eventually, the expansionary phase of the credit cycle becomes so obviously out of control that central banks will have little option but to try to protect their currencies’ rapidly declining purchasing power. This was the decision faced by Paul Volcker in 1981, when he was the Fed’s chairman. He raised the Fed funds rate to a staggering 20% that June. This time, Ms Yellen (if she is still in office) need only raise the FFR by a few percentage points before the crisis is triggered, given the high levels of accumulation of unproductive debt in the US economy today.

    The lower ceiling for a rise in nominal rates becomes a limitation on the duration of the expansionary phase. It will be apparent a lot more quickly that central banks have very little room for manoeuvre on interest rates. The authorities might even try to put off the crisis phase by imposing price and wage controls, in the knowledge that at best, they might buy some time.


    Gold


    We will be lucky if this expansionary phase lasts beyond the end of 2018, given the restricted headroom for increases in interest rates for the four major currencies. But there’s one asset that is poorly understood in western financial markets, and that’s physical gold.

    In the short term, the prospect of rising interest rates can be expected to be read as a negative factor for precious metals. This is because market speculators in Western capital markets are used to trading gold as the mirror image of the dollar. If the dollar is strengthening, gold will weaken. If interest rates are rising, the dollar strengthens. Therefore, the logic goes, sell your gold. This may be true during the recovery phase of the credit cycle, when increases in interest rates, or just the threat of them, will be judged by markets as an anticipatory action, leading to a stronger currency.

    In the expansionary phase, central banks react belatedly, for the reasons described above. It changes the fundamental relationship between monetary policy and the gold price from that which persisted in the recovery phase of the credit cycle. We have seen gold suppressed during the recovery phase, once fears of financial and system collapse receded, but the dollar price of gold has more recently been rising, erratically perhaps, since December 2015. Bond yields bottomed out six months later, with the yield on the 5-year US Treasury nearly doubling to 1.9% today. We can take this as evidence of an evolution in market relationships, because gold and short-term bond yields are both rising. This change in relationship effectively confirms we have already moved from recovery to expansion in the credit cycle.

    Central banks are already behind the curve, and will become more so. The gold price can be expected to strengthen during the expansionary phase of the credit cycle, reflecting the declining purchasing power of fiat currencies and the trend towards negative real interest rates. This was certainly the case in the US’s expansionary phase of the late 1970s, when dollar inflation was threatening to escalate out of control.

    A rising gold price also accords with rising commodity prices, all measured in declining fiat currencies. We are already in the initial stages of credit expansion, signalled by the wake-up call from Ms Yellen and Mr Carney, so it also serves as a signal that industrial commodity prices will rise. Their prices are already rising, so the markets are telling us the purchasing power of the dollar, as well as the other fiat currencies, are commencing a new decline measured in industrial materials. And while in the very short-term precious metals may need to adjust further to the change in credit cycle relationships, above all, Yellen and Carney are effectively signalling that the time is right to buy gold and silver.

    i Until the 1970s, wholesale borrowing costs correlated with the general price level. Since then the correlation has failed, principally due to the collapse of fiat currencies since the end of Bretton Woods. See https://www.goldmoney.com/research/goldmoney-insights/further-thoughts-on-gibson-s-paradox

    The views and opinions expressed in this article are those of the author(s) and do not reflect those of Goldmoney, unless expressly stated. The article is for general information purposes only and does not constitute either Goldmoney or the author(s) providing you with legal, financial, tax, investment, or accounting advice. You should not act or rely on any information contained in the article without first seeking independent professional advice. Care has been taken to ensure that the information in the article is reliable; however, Goldmoney does not represent that it is accurate, complete, up-to-date and/or to be taken as an indication of future results and it should not be relied upon as such. Goldmoney will not be held responsible for any claim, loss, damage, or inconvenience caused as a result of any information or opinion contained in this article and any action taken as a result of the opinions and information contained in this article is at your own risk.

    http://news.goldseek.com/GoldSeek/1507296000.php
     
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    End of Dollar End of Empire
    Junius Maltby



    Published on Oct 5, 2017
    The Junius Maltby channel discusses a recent opinion article piece and some current news and headlines regarding economics, the Dollar, Gold, trade and foreign relations. We learn that throughout history, of 69 Empires and Large Nation states, once the collapse began, it was finalized within 2-17 years. The writer quotes projections that predict the U.S. has approximately 20 years left starting in 2003. We have already begun the early phases of micro militarization coupled with domestic tensions and economic troubles. Time will tell. Join the conversation.

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    The Calm Before The Storm: Is There Big News Coming?
    SalivateMetal



    Published on Oct 5, 2017
     
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    Insurers Tighten Net on Illegal Fishing

    October 6, 2017 by Reuters

    [​IMG]
    File photo: U.S. Coast Guard

    By Alister Doyle OSLO, Oct 6 (Reuters) – A coalition of insurance firms agreed on Friday to crack down on pirate fishing by banning coverage for trawlers whose illegal catches are worth at least $10 billion a year.

    Firms would deny insurance for vessels on a European Union blacklist of ships involved in illegal, unregulated and unreported (IUU) fishing around the world. More than 100 vessels are on the current list.

    Until now, legal loopholes in defining pirate fishing have sometimes enabled trawler owners to gain insurance for vessels that harm global fish stocks. The EU list gives a common benchmark for outlawing vessels.

    More than 20 companies agreed the measures in a deal sponsored by Allianz Global Corporate & Specialty, AXA , Generali, Hanseatic Underwriters and the Shipowners’ Club. The plan was also backed by the United Nations.

    “We will encourage the adoption of measures that help to reduce and eliminate IUU fishing,” they said in a statement released at an international conference on protecting the oceans in Malta.

    They agreed to “not knowingly insure or facilitate the insuring of vessels that have been officially blacklisted for their involvement in IUU fishing.”

    The statement included “knowingly” because some firms feared they might unwittingly insure a vessel that had recently changed its flag or name to disguise its pirate past.

    Scientists have estimated that IUU fishing costs the global economy between $10 billion and $23.5 billion a year, or between 11 and 26 million tonnes of fish.

    Dana Miller of Oceana, an international non-governmental group which works to protect the seas, said insurers would benefit from the guidelines. Owners of pirate trawlers sometimes scuppered vessels to make bogus insurance claims, she said.

    European Union law already bars anyone in the bloc from supporting IUU fishing.

    “Now the commitment is more global,” she told Reuters of Friday’s agreement, which is also part of a joint initiative by Oceana and the United Nations on sustainable marine insurance.

    The EU blacklist is based on lists drawn up by regional fisheries management organizations worldwide, from the North Atlantic to waters around Antarctica.

    Interpol also sometimes issues “purple notices” about pirate ships, but they are not publicly available. Among other measures, a 2016 U.N. agreement calls on countries to deny port entry for vessels that have been involved in IUU fishing. (Reporting by Alister Doyle; Editing by Keith Weir)

    (c) Copyright Thomson Reuters 2017.

    http://gcaptain.com/insurers-tighten-net-on-illegal-fishing/
     
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