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Trump Predicts Stock Market Crash
Silver Fortune


Published on Oct 7, 2018
Is our memory really that short? Have we already forgotten that the "very bad things" that Trump predicts, could be right around the corner, given the rising rates environment, and an overvalued stock market.

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Any content within this video or any other video by the Silver Fortune channel is merely one man's opinion, commentary, and analysis, or actual information obtained from elsewhere, and should not be constituted as legal, investment, or financial advice. Make your own financial decisions, or consult a professional if you'd prefer to go that route. The Silver Fortune channel disclaims any liability for legal, financial, or investment decisions made.
 

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Weekend Chat. Bonds, Books, Brazil etc...
maneco64


Streamed live 2 hours ago
 

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Stocks Tumble On "Terrible Trio" Of China Crash, Rate Rout, And Italian Standoff


by Tyler Durden
Mon, 10/08/2018 - 07:16


It's been a painful start to the week for global markets as a wave of selling started in Asia and spread rapidly across the globe on what analysts have dubbed a "terrible trio" of crashing Chinese stocks, surging yields and fears about Italy's standoff with the EU.

Beijing's 1% reserve cut announced on Sunday, which was meant to offset last week's global rate rout-driven weakness and push Chinese stocks higher, failed to avert a selloff in China after a weeklong holiday, as mainland stocks fell sharply with the Shanghai Composite plunging 3.7%, its biggest one-day drop since February, while the CSI300 index plunged more than 4% for only the second time in more than two and a half years.



“China just cut reserve requirement ratios and expanded monetary policy, which is a response to the fact that China’s economy is slowing down but the market doesn’t believe there is enough stimulus to cut the slowdown,” said Guillermo Felices, a senior strategist at BNP Paribas Asset Management, calling the current concerns markets face a powerful cocktail. "They’ve injected more liquidity into the market to contain the slowdown, which has already translated into weaker equity prices."

The Chinese slide comes after U.S. Treasury yields hit seven-year highs on Friday following strong data that signaled a continued tightening of the labor market and increased inflationary pressures, adding to the reasons for the U.S. Federal Reserve to continue with its hiking cycle.

China's RRR cut was also seen as dovish, which pushed the offshore yuan 0.5% lower, tumbling just shy of 6.94 against the dollar, and approaching cycle lows hit in August when Beijing unleashed its latest crackdown on speculators.



The dark mood in China sent shivers across Asian markets - the MSCI benchmark emerging markets index dropped 0.7% to its lowest level since May 2017, and is now down 22% from January’s peaks.



"The return of Chinese financial markets after the Golden Week holiday is setting the tone for the rest of the world in a week that begins with the U.S., Canada and Japan all out on holiday,” ING Group's Viraj Patel wrote in an email to clients. To a large degree, both Chinese equity markets and the yuan “are playing catch-up to last week’s turmoil in global markets" and the results are ugly.

Delayed or not, Asian concerns quickly spilled over to European markets where the pan-European index dropped 0.7 percent and Germany’s DAX 0.8 percent lower as investor confidence took a knock from the "powerful cocktail" of last week’s spike in Treasury yields, the Chinese market slump brought on by concerns that an escalating trade war with the United States, and fears about Italy’s defiance of EU officials added to an already gloomy mood across equities, sent Italian yields soaring and the euro to 2 month lows, while further weakness in German industrial data added to pressure on the euro.

Oil and bank shares led the Stoxx Europe 600 Index lower after equities earlier sank from Sydney to Shanghai, where traders returned from a week-long break. U.S. stocks Japan was also shut.

And with US futures also retreating and appearing poised to extend losses following the worst week in a month for American equities amid a rout in Treasuries, which won’t trade on Monday because of a holiday, it quickly became a sea of red, as the MSCI world equity index, which tracks shares in 47 countries, falling 0.34%.



The fall in global equities boosted demand for the dollar as investors rushed for safety. Against a basket of its rivals the greenback rose 0.3%, edging toward a 14-month high hit in mid-August, and speculation that DXY 100 may soon be broken.

Meanwhile, as reported earlier, Italy’s 10-year bond yield rose to a four-year high and banking stocks sold off as the populist-led government refused to bow to EU criticism over its planned budget.

“We are a bit surprised by the strength of the reaction in bond markets, but it appears the market is jumping to the conclusion that the European Commission will take a hardline stance when Italy submits its budget,” said Mizuho rates strategist Antoine Bouvet.



Germany’s 10-year government bond, the benchmark for the region, remains close to four-month highs at 0.559%.

In FX, the dollar advanced versus most of its Group-of-10 peers as Treasury 10-year futures slipped in Asia, before rebounding in Europe, with cash trading shut due to a U.S. holiday; the euro slipped below the 1.15 handle against the greenback and Italian 10-year bond yields rose to the highest level since 2014 as Italy’s government sticks to its position on next year’s controversial budget. The pound fell, with time running out to get a Brexit deal in what looks set to be a milestone week for both the talks and the U.K. currency. Canada’s loonie was weighed down by the continued drop in oil prices, while the yen reversed an earlier drop as the risk-off tone extended into European trading. The New Zealand dollar reversed earlier losses, supported by option-related bids.

Looking ahead, traders are focusing on the world’s biggest economies for signals to the direction of markets for the rest of this week, with US Q3 earnings season on deck, while U.S., investors are gearing up for $230 billion of Treasury auctions following a selloff last week that took 10-year yields to the highest level since 2011.

In EMs, South Africa’s rand slipped on reports the finance minister sought to resign, while Brazilian assets trading in Europe advanced after investor favorite Jair Bolsonaro led the first round of the presidential election with more votes than polls forecast.

U.S. trading is likely to be muted on Monday, with markets closed for Columbus Day.

In this weekend's Brazilian election, far-right candidate Bolsonaro won the first round of elections but failed to get an outright victory, as he managed to bag 46.1% of valid votes (short of the 50% needed for an outright victory) while left-wing Workers’ Party candidate Haddad came second with 29.2%. The runoff election is to take place on 28th October 2018 where opinion polls conducted before the election predicted that the candidates would be tied, according to the BBC.

In overnight geopolitical news, US Secretary of State Pompeo said US and North Korea are close to an agreement on logistics for a second summit and added that the North Korean leader said he is ready to allow international inspectors to a nuclear site and a missile engine test site. There were also reports that North Korean leader Kim Jung Un is to visit Russia soon. Furthermore, Chinese President Xi is to visit North Korea.

Elsewhere, oil dropped back to $83.27 per barrel after Washington said it may grant waivers to sanctions against Iran’s oil exports next month, and as Saudi Arabia was said to be replacing any potential shortfall from Iran.

Market Snapshot
  • S&P 500 futures down 0.3% to 2,885.00
  • STOXX Europe 600 down 0.7% to 373.91
  • MXAP down 0.7% to 158.50
  • MXAPJ down 1.3% to 494.31
  • Nikkei down 0.8% to 23,783.72
  • Topix down 0.5% to 1,792.65
  • Hang Seng Index down 1.4% to 26,202.57
  • Shanghai Composite down 3.7% to 2,716.51
  • Sensex down 0.6% to 34,188.49
  • Australia S&P/ASX 200 down 1.4% to 6,100.31
  • Kospi down 0.6% to 2,253.83
  • German 10Y yield fell 2.1 bps to 0.552%
  • Euro down 0.4% to $1.1483
  • Brent Futures down 1.6% to $82.85/bbl
  • Italian 10Y yield rose 9.4 bps to 3.053%
  • Spanish 10Y yield rose 0.5 bps to 1.582%
  • Brent Futures down 1.5% to $82.86/bbl
  • Gold spot down 0.8% to $1,193.91
  • U.S. Dollar Index up 0.3% to 95.92
Top Overnight News
  • China’s central bank cut the amount of cash lenders must hold as reserves for the fourth time this year, as policy makers seek to shore up the faltering domestic economy amid a worsening trade war
  • Japanese Prime Minister Shinzo Abe would welcome Britain to the Trans-Pacific Partnership trade deal “with open arms,” a move that would be possible only if the U.K. left the EU’s customs union and gained the power to set its own tariffs, the Financial Times reported, citing an interview
  • The pound benefited in recent days from optimism that Britain and the European Union are getting closer to a Brexit deal, but this week could test that view. An October EU summit is fast approaching and the U.K. must submit a proposal on the contentious Irish border issue by Wednesday
  • Jair Bolsonaro, the divisive, far-right former Army captain, stormed to a huge lead in the first round of Brazil’s presidential elections Sunday. The result puts him on track for victory in the decisive, second-round vote on Oct. 28
  • Italy’s Luigi Di Maio shrugged off European Commission attacks on his government’s fiscal plan and said his anti-austerity view will grow stronger across the continent
  • President Donald Trump says he hopes to see North Korean leader Kim Jong Un “in the near future”
  • Saudi Arabia’s ambitious attempt to overhaul its oil-dependent economy is on track and indicators that suggest otherwise -- like a surge in unemployment and a slump in foreign investment - - will soon change direction, the kingdom’s crown prince said
  • Germany’s industrial output unexpectedly contracted 0.3 percent in August, missing the median estimate for a 0.3 percent increase. The decline, the third in a row, was led by capital goods and construction
  • Norway presented a neutral budget as the rise in oil prices stoke the economy of western Europe’s biggest petroleum producer. The government proposed spending 231 billion kroner ($28 billion) of its oil income, which would be a neutral budget impulse. The spending amounts to 2.7 percent of the wealth fund, below the 3 percent fiscal spending rule
  • The better- than-expected growth rates in the U.S. economy are set to dissipate unless productivity picks up, Federal Reserve Bank of St. Louis President James Bullard said in Singapore
Asian stocks traded on the backfoot as the region mimicked the lead from Wall St. where the S&P 500 posted its worst week in nearly a month as the tech sector underperformed, while Nasdaq Comp. pulled back over a percent as tech giants lagged and the Dow notched its second straight weekly declines as the index was pressured by heavyweights Intel and Caterpillar. ASX 200 (-1.3%) was weighed on by material and financial names following ANZ’s profit warning which dragged the likes of CBA, WBC and NAB lower in sympathy, while KOSPI (-0.6%) initially outperformed amid positive developments in the Korean peninsula before dipping in the red and Nikkei 225 is closed due to a public holiday in Japan. Elsewhere, Shanghai Comp. (-3.7%) plummeted as mainland China played catch-up, with participants re-entering the market and reacting to last week’s trade developments, rising yields, China downgrades and weak Caixin manufacturing data. Hang Seng (-1.3%) eroded initial gains as sentiment turned sour along with the mainland.

Top Asia News
  • Chinese Stocks Slump as Markets Reopen After Break; Yuan Falls
  • China Foreign-Currency Reserves Drop on Trade Tensions, Yuan
  • Offshore Yuan Funding Cost Surges Ahead of Dim Sum Bond Auction
  • Everyone’s Fleeing China Stocks as Foreigners Dump $1.4 Billion
  • Welcome to Rupiah’s New Normal, Indonesia Policy Makers Signal
Key European indices are down, with DAX Dec-18 futures testing 12,000 to the downside and the FTSE MIB significantly lagging its peers, down over 1.5%. This follows an EU commission letter stating that Italy’s budget targets are a source of serious concern in particular impacting Italian banks. Weakness in Italian banking stocks has pressured the financial sector, with this segment down by almost 1% Major sectors are all down, with energy down by over 1% following comments that the White House may alleviate some Iranian sanctions, and IT names lagging their peers in continuation of price action seen in the US on Friday In terms of individual equities Norsk Hydro are leading equities being up 4.6% following reports that aluminium refining is to restart at half capacity. Additionally, Schroders are up over 1% following speculation around a GBP 13bln joint venture with Lloyds. Deutsche Bank is down over 1.5% amidst reports that MIFID II is affecting revenues.

Top European News
  • Ramsay Raises Capio Bid to $900 Million to Woo Swedish Target
  • Italian Bonds, Stocks Slide as Budget Standoff With EU Continues
  • RPC Confirms Trading Update is Today; PUSU Later This Afternoon
  • Slovenia Plans Bourse Entry for Biggest Bank to Honor EU Pledge
In FX, The DXY index and broad Usd have rebounded further from last Friday’s post-NFP lows, albeit not uniformly as the safer-havens are bucking the trend, but enough to nudge the DXY back up towards 96.000. Market holidays in Japan and the US ahead (latter only partial) may have exacerbated price action/moves, but it’s certainly been a risk-off return from Golden Week in China and the Italian budget issue continues weigh on investor sentiment. Back to the Dollar, or rather the index, and beyond the big figure last week’s peak was 96.124.

CAD - The biggest G10 loser as oil prices retreat to compound the overall downturn in risk sentiment, and the Loonie retreats to 1.3000 vs its US counterpart, eyeing a couple of tech levels just above (1.3013 and 1.3018) having failed to derive any lasting support from Canadian jobs data.

EUR/GBP - The next major outperformers, and both losing grip of round numbers/psychological handles in relatively quick order amidst stops and the aforementioned bearish factors. The single currency is under 1.1500 and Cable sub-1.3100, but the former is holding above decent option expiry interest at 1.1450 (1.5 bn) and the latter has regained some poise having tested 1.3050 stops, with Brexit impulses still supportive on balance.

JPY - A clean break of stops at 113.50, and chart supports at 113.56/113.42 (Tenkan and Fib respectively) has propelled the Jpy up to almost 113.25 vs the Greenback as the more attractive currency of the pairing during periods of pronounced risk aversion.

EM - A bit of a mixed bag in terms of performance across the region, with the Rand hit hard after rumours/reports that SA Finance Minister may quit, but the Lira holding up better vs a strong Dollar ahead of the Government’s inflation combating measures due to be announced on Tuesday. Similarly, the Peso is benefiting from pre-positioning before the Real re-opens after Sunday’s Brazilian election and a bigger than anticipated 1st round victory by Bolsonaro. However, the Rouble has been undermined by a retreat in Brent and unable to reap the reward of speculation that US sanctions may be less harsh after mid-term elections. Usd/Zar around 14.8500, Usd/Try near 6.1600, Usd/Mxn close to 18.8300 and Usd/Rub hovering just under 67.0000.

In commodities, the crude complex is in negative territory with Brent breaking the USD 83.00/BBL level to the downside amid suggestions from the US Government that exemptions may be granted to countries who have made efforts to cut Iranian oil imports. This also comes amid the possibility of a Saudi-Kuwaiti oil field restart and further confirmation by Saudi Energy Minister Al Falih that 1.3mln BPD of spare capacity can be used “if needed”. This has increased the possibility of rising supply to the oil market, and pushed both Brent and WTI down by over 1%. In metals markets, gold has broken through the USD 1200/OZ level to the downside as the yellow metal is being hit by a stronger dollar.

Aluminium prices are also in the red, with prices falling by over 4%, after a Brazilian court ruled that Norsk hydro’s aluminium plant may be reopened, albeit at a lower production level. Zinc and copper have also slipped due to the effects from a stronger USD.

US Event Calendar: Nothing major scheduled

DB's Jim Reid concludes the overnight wrap
Will this week’s US CPI (Thursday) be the line in the sand for the current rates sell-off or will it add fuel to the fire? There’s nothing in the forecasts that suggests anything untoward this month but to be fair there seldom is as the consensus is for a +0.2% mom core reading - the same forecast now for the 36th month in a row. So all eyes on this as the week progresses.

We’ll highlight the rest of the week ahead at the end as usual (note it’s a US holiday today - bond market closed) but for now it’s all about rates. As regular readers know, here at DB we’ve been one of the most bearish on the street on rates for some time and often it’s been frustrating. As we ourselves discussed in our 2016 Long-term study and our “ Why rates and yields are rising, and why they should continue to... ” this year, we think the bear market started in the second half of 2016 due to: 1) ‘peak labour’ after a 35yr surge in the work force and the maximum depression of wages ended in the middle of this decade, 2) Brexit being misinterpreted as a reason for a further rates rally whereas it actually kick-started populism winning national votes and a subtle move to more fiscal spending/less austerity, 3) in a similar vein, the vote for Mr Trump was always more likely to increase fiscal spending in the US, 4) peak globalisation, 5) the BoJ moving from QQE to YCC in this period, and 6) the ECB announcing in December 2016 that they would soon taper after warming the market up to this in the months beforehand.

The lows in 10yr Treasuries and Bunds were 1.35% and -0.19% in July 2016. So at 3.23% and 0.57% currently, this bear market has been in place for a couple of years now but without a major breakout, especially in Europe. Indeed, this year has been frustrating for bond bears as every time yields have threatened to break out something has emerged to cap the rise and send yields back down. So is this sell-off the real deal? Well, our views haven’t changed much but it’s fair to say that we probably need more hints of inflation to keep momentum in the move. Perhaps last week’s Amazon wage hike was a catalyst in shaking markets out of their complacency that wage inflation in this cycle is going to remain perennially subdued. We continue to think the risks to yields and inflation are asymmetric to the upside. The biggest risk to this view is that yield rises start to trigger a financial market crisis somewhere around the world. With global debt to GDP still at record highs, this is a genuine risk. Overall, the house view continues to be 3.50% and 0.90% for 10yr Treasuries and Bunds by year-end.

Just as the rest of the world is tightening policy, China loosened policy again over the weekend. The PBoC have announced a lowering of the RRR (the fourth time this year) for some lenders as of October 15th. The statement released alongside confirmed that the PBoC will continue with prudent and neutral monetary policy. Having been closed for all of last week mainland Chinese equity markets resumed trading overnight with heavy losses, which have intensified as the session progressed. As we go to print, the Shanghai Comp and CSI 300 are -2.95% and -3.60% with the tech sector of the Shanghai Comp down -3.59%. For some context, the Hang Seng declined -4.38% last week; so these moves aren’t completely out of line given moves last week. The CNY has also depreciated 0.43% and is back to the weakest since mid-August at 6.898. Our economists in China continue to expect 7.4 by the end of 2019. Meanwhile, other markets in Asia are also down including the Hang Seng (-0.87%) and Kospi (-0.40%). It’s worth adding that the moves in China this morning may have been worse had it not been for a stronger-than-expected Caixin services PMI (53.1 vs. 51.4) reading for September.

Elsewhere, Brazil’s first round presidential election took place over the weekend with far-right candidate Jair Bolsonaro emerging as the victor by some margin. Mr Bolsonaro won with 46.2% of the votes while his closest challenger, Fernando Haddad, got 29.1%. The margin of victory is even bigger than what polls had suggested with the second round vote due on October 28th with those two candidates facing off. Brazilian assets gained as support climbed for Mr Bolsonaro in recent weeks so it should be a decent open for them later today.

Reviewing last week and Friday now, 10-year Treasury yields rose 17.0bps (+4.5bps Friday) to their highest levels since April 2011. Two-year and 30-year yields (+6.6bps and +19.9bps on the week) reached their highest levels since 2008 and 2014, respectively. The 2s10s curve steepened 10.5bps to 34.4bps, its steepest level since June and the biggest move since February. The MOVE index also rose (off near all-time lows) by the most since February, albeit to a low-by-historical-standards level of 55.2. Other developed market bonds sold off in tandem, with 10-year Bunds (+4bps on Friday) and JGBs rising 10.3bps and 2.5bps on the week, to fresh multi-month highs.

Risk assets retreated on the back of higher yields, with emerging markets hit especially hard. The S&P 500 closed -0.96% lower on the week (-0.55% on Friday) and the DOW shed -0.04% (-0.68% Friday). The VIX rose 2.70pts but closed below 15pts, so still remains relatively low by historical standards.

Tech stocks underperformed sharply, with the NASDAQ and NYFANG indexes down -3.21% and -4.18% (-1.16% and -2.06% Friday), respectively, as investors worried about the sector’s outlook. Bloomberg reported on an alleged major security breach affecting a major producer of tech hardware, which weighed on Chinese tech stocks in particular and fed through to the US. Chinese markets were closed all week for a holiday, but a US-traded ETF tracking major Chinese tech companies like Baidu, Alibaba, and Tencent, traded down -7.87% (-2.01% on Friday). The NASDAQ is now down -3.96% from its peak, outperforming the FANG index (-12.5% from peak), the Chinese tech sector (-33.96% from peak), and the broader EM complex (down -29.68% from peak and -4.85% last week).

On Friday, the September jobs report was much stronger in the detail than at first glance. The headline number missed at 134,000 versus consensus at 185,000, but the prior two months were revised up a net 87,000, so the three-month average remains strong at 190,000. Unemployment fell to 3.7%, its lowest level since 1969 on an unrounded basis. The report was depressed by transitory factors, especially storm-driven declines in activity, e.g., 299,000 people reported not working due to weather, and the number of workers in the sensitive retail and leisure and hospitality sectors both declined as well. The NY and Atlanta Fed Q3 GDPnowcasts diverged another 0.7pp on the week, with the former at 2.3% and the latter at 4.1%. DB continue to estimate Q3 growth at 3.3% qoq saar.

Over to Italy, which had a mixed week as more budget details trickled out. The FTSEMIB sold off slightly, falling -1.77% on the week, but outperformed versus other regional bourses (DAX and CAC fell -2.60% and -2.44%). Although the spread to Bunds is off the recent highs due to some reining in of the initial most aggressive 3yr budget forecasts, overall 10yr BTP yields closed Friday only 3bps off their post budget 4-and-a-half-year highs. The global bond sell-off is not helping Italy at its time of high uncertainty. As more details emerged through the week, the budget included official forecasts that envisioned a boost to growth that ends up shrinking the debt ratio through 2021. Our economists believe these forecasts are overly optimistic and expect the European Commission to most likely reject the budget.

https://www.zerohedge.com/news/2018...io-china-crash-rate-rout-and-italian-standoff
 

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CFTC Asleep as Precious Metals Prices Raided on a Sunday Night!
maneco64


Published on Oct 8, 2018
 

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farm talk oct 7
Ag Talk In The Raw


Streamed live 23 hours ago
i am here to talk about farming and al that goes with it.
 

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Used Car Industry: Boom or Bubble? - Autoline Spotlight Episode 5
Autoline Network


Published on Oct 8, 2018
On this show we dive into why used cars are selling so well right now and the problems that could derail the momentum. We also discuss the impact of certified used cars, subscription services, as well as the growth of ride sharing and the move to mobility services.

PANEL: Mike Kane, Ally; George Glassman, Glassman Automotive Group; Steve Finlay, WardsAuto; John McElroy, Autoline.tv

INSTAGRAM: https://www.instagram.com/autolinenet...
TWITTER: https://twitter.com/Autoline
FACEBOOK: https://www.facebook.com/autolinenetwork
WEBSITE: http://www.autoline.tv
 

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Naked Capitalism Links 10/08
https://www.nakedcapitalism.com/2018/10/links-10-8-18.html

SA - Market News Live Feed 10/08
https://seekingalpha.com/market-news

TBP - 10 Monday AM Reads 10/08
https://ritholtz.com/2018/10/10-monday-am-reads-186/

CWS - Morning News: October 8, 2018
http://www.crossingwallstreet.com/archives/2018/10/morning-news-october-8-2018.html

ZH - Key Events This Week: Inflation, Italy And Earnings 10/08
https://www.zerohedge.com/news/2018-10-08/key-events-week-inflation-italy-and-earnings

SA - Wall Street Breakfast: Brazil Assets Jump As Bolsonaro Takes Lead 10/08
https://seekingalpha.com/article/42...kfast-brazil-assets-jump-bolsonaro-takes-lead

MtM - China and European Woes Weigh on Equities but Buoy the Dollar 10/08
http://www.marctomarket.com/#!/2018/10/china-and-european-woes-weigh-on.html

TCS - Commodities Posted Lone Gain Last Week For Major Asset Classes 10/08
http://www.capitalspectator.com/commodities-posted-lone-gain-last-week-for-major-asset-classes/
 

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Asian Metals Market Update: Oct 8 2018
By: Chintan Karnani, Insignia Consultants
A slowdown in china can result in losses for industrial metals and gains for gold. Gold will be the safe haven in China. The Chinese cutting the reserve ratio of banks is an indication that a slowdown is in the offing. Industrial metals are bullish in the long term on supply issues. Indian gold prices are at a record high. Indian gold demand from tomorrow will be way below expectation during the nine day very auspicious navratra period which begins from tomorrow.
 

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Ira Epstein's End of the Day Financial Video 10 8 2018
Ira Epstein


Published on Oct 8, 2018
 

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Ira Epstein's End of the Day Agriculture Video 10 8 2018
Ira Epstein


Published on Oct 8, 2018
 

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The Importance of the Bond Market Should Not be Underestimated.
maneco64


Published on Oct 9, 2018
 

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The Dollar Endgame
Silver Fortune


Published on Oct 8, 2018
Nothing fancy, it doesn't need to involve a new dollar, some secret agreement, or anything of nature. I think the dollar will, one day, find itself alone, and absent of the friends/nations that helped prop it up for so long.

Help support the Silver Fortune Channel through my sponsor, SD Bullion - 10 oz. Silver Bar at Spot! https://sdbullion.com/sf

Support Silver Fortune through Patreon: https://www.patreon.com/silverfortune


Any content within this video or any other video by the Silver Fortune channel is merely one man's opinion, commentary, and analysis, or actual information obtained from elsewhere, and should not be constituted as legal, investment, or financial advice. Make your own financial decisions, or consult a professional if you'd prefer to go that route. The Silver Fortune channel disclaims any liability for legal, financial, or investment decisions made.
 

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The Real GoldFinger - Who Was This Secretive Banker?
GoldSilver (w/ Mike Maloney)


Published on Oct 9, 2018
Sit alongside Mike as he engages in his trademark due diligence, exploring the far-reaching influence of the Warburg family in the Federal Reserve, the Roosevelt administration, and offshore banking, including “The London Banker Who Broke the World,” Sigmund Warburg.

If you enjoyed watching this video, be sure to pick up a free copy of Mike's bestselling book, Guide to Investing in Gold & Silver: https://goldsilver.com/buy-online/inv...
 

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Futures Tumble As 10Y Yield Hits Fresh 7-Year High, Italian Rout Hits Europe


by Tyler Durden
Tue, 10/09/2018 - 06:57


Heading into Tuesday, there was just one thing traders wanted to know: how the 10Y cash Treasury would open after Monday's US holiday and after last week's rout which sent yields to multi-year highs (even as the 0.3% drop in the TLT ETF suggested more weakness for US rates). To their disappointment, the TSY yield promptly rose to a fresh 7-year high as soon as trading resumed, touching 3.26% in early trading.



30-year TSYs likewise dropped for a fourth day, sending yields to the highest since July 2014, ahead of the government selling a combined $38 billion of longer-maturity Treasuries this week, with futures volumes running at more than 200% of normal.

As yields rose, sentiment quickly reversed the tepid optimism that emerged in Asian trading, with U.S. futures and Asian shares falling as European equities gave up an early gain, leading to another sea of red for global stocks. JPMorgan summarized the trader mood best: "risk sentiment is in a foul mood and stocks are sinking everywhere."



Strength in oil stocks on higher crude prices and a rise in banking stocks on increased global borrowing had initially lifted Europe’s STOXX 600 index, but it was back near a 6-month low as the early momentum faded as fears over rates and Italy returned.

As yields crept above 3.25%, both S&P 500 futures and the Stoxx Europe 600 Index were poised for a fourth day of declines. Earlier in Asia, stocks in Shanghai rose fractionally after the biggest sell-off in more than three months on Monday.



The yuan gained in onshore trading after sliding a day earlier, even though the PBOC briefly allowed the currency to slip past the 6.90 "redline." China’s central bank fixed its yuan rate at 6.9019 per dollar on Tuesday, breaching the 6.9000 barrier and leading speculators to push the dollar up to 6.9120 in the spot market.



“With Chinese economic momentum continuing to weaken alongside increasing pressure from the United States, currency weakness is the obvious release valve,” JPmorgan warned. “A lurch through the 7.0 level by year end is possible.”

While a stronger yen put Japanese stocks under pressure, the currency ultimately pared its advance. Japan's Nikkei fell 1.3% hurt in part by a rise in the safe-harbor yen and as yields on Tokyo’s government bonds tested the 0.15% cap the Bank of Japan effectively has on them. Pakistan’s rupee slumped about 5 percent in an apparent devaluation ahead of what looks likely to be another IMF program.

“It all feels like it’s quite nervous here over whether things going to break (out of ranges) or not,” said Saxo Bank’s head of FX Strategy John Hardy. He pointed to the rising U.S. and Japanese government bond yields which tend to set the bar for borrowing costs globally as well as the latest pressure on China’s yuan.

And with US Treasuries set for more losses, the next question was whether Italian assets would find a bid; alas it was not meant to be and Italian bonds extended declines, led by the 10-year sector, after finance minister Giovanni Tria didn’t give investors the reassurance they were hoping for in relation to growing tensions with the European Union over the nation’s budget plans.

Italy’s benchmark 10-year government bond yield also moved toward a 4-1/2-year high as Economy Minister Giovanni Tria struck a resolute tone on his controversial budget plans in Rome’s parliament. Tria said the country’s low growth doesn’t allow for a cut to debt-to-GDP, adding that "the outlook is not positive" referring to global growth during a parliamentary hearing in Rome. The 10Y Italy yield rose above 3.70%, the highest since February 2014 while the BTP-Bund spreads widened to 311 bps...



... with Italy's FTSE MIB paring initial gains, and falling 0.4%, after gaining as much as 0.9% in early trade. Italy's stock market is now getting close to bear market territory, down 19% since its high on May 7.



As the selling returned in Italy, it promptly spread to other European assets, with the Stoxx Europe 600 falling 0.4% and dragging the EURUSD to session lows below 1.1450.



The gloomy mood that has spread across markets did not get any help from the latest IMF report released overnight. The fund reduced its outlook for global growth for the first time since 2016, due to growing trade tensions between the world’s two largest economies. Meanwhile China's RRR cut announced this weekend, which failed to stabilize Chinese stocks which plunged more than 3% one day later, will inevitably put pressure on the yuan, with weakness of the currency threatening to further aggravate the trade tensions in a vicious circle that could prompt more Chinese easing.

"If the trade confrontation continues, the Chinese currency will go lower and that will create a whole host of problems for the global economy," said Alicia Levine, chief strategist at BNY Investment Management. So far there is no sign at all that the trade war has any likelihood of easing.

The global risk off mood meant more demand for safe havens like the US dollar, and the Bloomberg Dollar Spot Index advanced a second day to rise 0.2% to a six-week high as U.S. long bonds extended their recent decline. The pound came under pressure as investors started to lose hope that a Brexit agreement was imminent.

The greenback gained against all G-10 peers as the U.S. 10-year yield touched a new seven-year high; traders kept their focus on large expiries Tuesday in the majors as a thin data calendar makes case for gamma traders to control price action until New York cut off.

In commodity markets, gold got a modest safety bid at $1,191.10, having fallen 1.4% overnight. Industrial bellwethers copper and nickel jumped 1.4 and 2% . Oil prices also rose as more evidence emerged that crude exports from Iran, OPEC’s third-largest producer, are declining in the run-up to the re-imposition of U.S. sanctions and as a hurricane moved across the Gulf of Mexico. Brent crude added 50 cents to $84.41 a barrel and U.S. crude firmed 41 cents to $74.70.

Economic data include NFIB small business optimism survey, while several Fed speakers are due. Helen of Troy is among companies reporting earnings.

Market Snapshot
  • S&P 500 futures down 0.3% to 2,884.75
  • STOXX Europe 600 down 0.09% to 371.88
  • MXAP down 0.9% to 157.44
  • MXAPJ down 0.3% to 493.14
  • Nikkei down 1.3% to 23,469.39
  • Topix down 1.8% to 1,761.12
  • Hang Seng Index down 0.1% to 26,172.91
  • Shanghai Composite up 0.2% to 2,721.01
  • Sensex down 0.3% to 34,381.04
  • Australia S&P/ASX 200 down 1% to 6,041.07
  • Kospi down 0.6% to 2,253.83
  • German 10Y yield rose 2.5 bps to 0.554%
  • Euro down 0.2% to $1.1473
  • Brent Futures up 0.7% to $84.52/bbl
  • Italian 10Y yield rose 14.1 bps to 3.194%
  • Spanish 10Y yield rose 1.1 bps to 1.602%
  • Brent Futures up 1% to $84.73/bbl
  • Gold spot up 0.1% to $1,189.09
  • U.S. Dollar Index up 0.2% to 95.91
Top Overnight News
  • The Trump administration is concerned about the Chinese yuan’s depreciation as the Treasury Department weighs whether to name China a currency manipulator in a report due out next week, a senior Treasury official said Monday.
  • Midterm elections are looking like a no-win situation for the U.S. bond market. If Democrats take the House, it raises the odds that congressional leaders will propose an infrastructure-spending bill similar in scope to President Donald Trump’s original trillion-dollar proposal. And if the GOP defies expectations and holds on in Congress, tax cut 2.0 becomes more likely. In either case, the result will be more debt
  • Italian Finance Minister Giovanni Tria warned about the negative effects of a global trade slowdown, and said the country’s output gap with other euro-area nations is unacceptable
  • The International Monetary Fund said the world economy is plateauing as the lender cut its growth forecast for the first time in more than two years, blaming escalating trade tensions and stresses in emerging markets
  • After spending most of the summer below 15, the Cboe Volatility Index climbed as high as 18.38 on Monday, a level not reached since June 28
  • The International Monetary Fund said the world economy is plateauing as the lender cut its growth forecast for the first time in more than two years, blaming escalating trade tensions and stresses in emerging markets
  • The European Union has made “limited progress” in addressing the threat a no-deal Brexit would pose to financial services, and urgent action is needed, according to the Bank of England
  • The three British currency traders who were part of an exclusive online chat group referred to by members as “the cartel” go on trial this week for alleged market manipulation that’s already cost global banks $14 billion in penalties
Asia-Pacific stocks traded mixed as the region followed a similar picture painted on Wall St, where the Dow rose for the first time in three days, the S&P closed little changed and the Nasdaq pulled back for a third straight session. ASX 200 (-0.8%) was pressured by the healthcare and lT sectors, while Nikkei 225 (-1.4%) was playing catch-up to yesterday’s slump while also subdued by a firmer currency, after re-entering the market from a long weekend. Elsewhere, Hang Seng (+0.5%) and Shanghai Comp. (+0.5%) traded choppy and with no firm direction for most of the session, before finding a firmer footing in the green following yesterday’s mass sell-off. Finally, US Treasury yields continued to rise with the 30yr hitting 4-year highs and the 10yr revisiting levels last seen in 2011.

Top Asian News
  • Messaging Upstart Touted as WeChat Rival Wiped From Apple Store
  • Fat Pigs Fed Less Is China’s Latest Strategy as Trade War Rages
  • 2018 Echoes 1987 as Central Banks Shift Toward Tighter Policy
  • Pakistan Says It Will Seek IMF Bailout, Fueling Stock Rally
Major European indices trade broadly lower (Euro Stoxx 50 -0.5%), with the FTSE MIB hitting session lows, down -0.7%, amid reports Italy’s fiscal plan may be rejected and statements from Salvini confirming the plan will not change. Sectors are mixed, with Energy up over 1% following supply concerns stemming from Hurricane Michael’s impact on the Gulf of Mexico. Commerzbank is up over 2.4% following their upgrade to Overweight from Neutral by JP Morgan; but has not alleviated the DAX which is underperforming its peers. Aviva is also up over 1.5% following announcement that CEO Wilson will step down and is to be replace by Adria Montague. Swedebank is down by over 2.3% following a downgrade to Sell from Hold at Socgen.

Top European News
  • Royal Mail Sinks Below 2013 IPO Price Lambasted as Too Cheap
  • Ceconomy Plunges After Retailer Cuts Profit Forecast Again
  • Stay Invested in Europe Banks, Despite Italy Concerns: JPMorgan
  • No-Deal Brexit Could Cut German Exports to U.K. 57%: IW Study
In FX, G10 - It’s not quite déjà vu, but price action and trends remain broadly the same with the USD firm and outperforming all its major rivals bar the JPY amidst sour or at least fragile risk sentiment.

Indeed, Usd/Jpy is slipping back towards 113.00 again having dipped just below the big figure overnight, and is currently testing the 200 WMA around 113.18. However, decent option expiry interest at 113.25 (1.1 bn) may keep the headline pair afloat, and there is a key Fib circa 112.73 providing underlying support.

Conversely, the GBP and NZD are at the foot of the G10 table as Cable retests stops/bids at 1.3050 after another retreat from 1.3100 ahead of yet another UK parliamentary presentation on Brexit, while the Kiwi is pivoting 0.6450 and lagging its more resilient AUD counterpart with the cross up near 1.1000 and Aud/Usd holding close to 0.7100. Elsewhere, the EUR remains top-heavy at 1.1500 vs the Greenback and against the Pound ahead of 0.8800 due to ongoing Italian budget jitters. The CAD awaits Canadian housing starts after nothing from BoC’s Lane so far, and eyeing option expiries at 1.2950 and 1.2975 in 800 mn+, while the CHF remains relatively confined between 0.9920-50 vs the Dollar and around 1.1400 vs the Eur. DXY underpinned amidst all the above and poised to revisit 96.000.

EM - Aside from further YUAN depreciation an air of consolidation pervades, with the TRY cautious within 6.0810-1340 trading parameters ahead of the Government’s plan to tackle inflation.

In commodities, both WTI and Brent are up by over 0.6% and testing USD 75/BBL and USD 85/BBL respectively following supply concerns from the Gulf of Mexico where just under 20% of crude oil production has been halted in preparation for hurricane Michael alongside evidence that Iranian crude exports are declining. In the metals scope, gold is uneventful, with the yellow metal trading within a thin USD 3/oz range.

Aluminium has fallen slightly amidst reports that Norsk Hydro are preparing to resume their aluminium refinery at half capacity in the coming weeks; currently -0.15% on the day. Iron ore futures in China are up by over 3% in today's session, with prices supported by increased restocking demand at steel mills.

US Event Calendar
  • 6am: NFIB Small Business Optimism, est. 108.3, prior 108.8
  • 8am: Fed’s Kaplan Speaks to Economic Club of New York
  • 1pm: Fed’s Harker Speaks on Importance of Education to the Economy
  • 9:10pm: Fed’s Williams Speaks on Recent Monetary Policy Developments
  • 10:30pm: Fed’s Williams, Indonesia Cen. Bank’s Warjiyo speak to press
DB's Jim Reid concludes the overnight wrap
Yesterday’s Treasury market holiday helped take some of the steam out of the sell off for risk assets as US equities saw a late rally in thin holiday trading to reverse some of the notable sell off in the Asian and European session. The DOW and S&P 500 outperformed, bouncing off intraday lows to close +0.15% and -0.04% respectively (the latter -0.78% at the lows as Europe went home). Tech stocks continued to selloff with the NASDAQ and FANG indices shedding -0.67% and -1.16%, respectively, but again well off the session lows.

The VIX spiked to an intraday high of 18.38 and to the highest since July, before closing up 1.01pts at 15.83 – still the highest close since July. This came after Europe was rocked by another rout for Italian assets following a clash of heads between the populist leaders and European officials. Down for the 8th time in the last 9 session, the FTSE MIB (-2.43%) took the decline during this run to -8.39% with the index also closing below 20,000 for the first time since April 2017 and -19.12% off the near 10yr highs seen in May. The STOXX 600 by comparison was down -1.12% yesterday. The V2X index closed at 17.63 and to the second highest close since July 2nd. Italian Banks also slumped -3.71% and are now down -16.87% from the September local highs and -32.76% from the end April YTD highs. Meanwhile 10yr BTPs passed 3.50% (closing 14.4bps higher at 3.568%) for the first time since February 2014 while the 10y spread to Bunds (which fell 4.4bps yesterday to 0.529%) hit 303.9bps and to the widest since June 2013.

Sparking those moves, EU Commissioners Dombrovskis and Moscovici, in a letter sent to Italy’s Finance Minister Tria over the weekend, said that there was a “significant deviation” of budget targets put forward by the government, versus the fiscal path. On the Italian side, speaking at a joint press conference with France’s Le Pen, Italy’s Deputy PM Salvini attacked the leaders of the European Commission including Juncker calling them the “enemies of Europe”, and added that “the politics of austerity of the last few years have increased Italian debt and impoverished Italy”. Le Pen also weighed in on the EU elections debate next year which is becoming an increasingly significant event given the Italian situation. Le Pen called the EU a “totalitarian system” and that the aim is to win the EU elections next year and work to form a “Europe of nations”. It’s worth noting that today will see parliament in Italy begin debating the government’s budget outline. Finance Minister Tria is due to hold a number of hearings before the Lower House and Senate joint budget committees. The current timing is for the government to submit a draft budgetary plan to the EU Commission by October 15th.

After selling off last week, 10yr Bunds yet again went into flight-to-quality mode and as touched on above rallied 4.4bps. As we discussed yesterday, although we’re convinced that yields should be going higher across the globe, the biggest risk is that rising yields and tightening policy create a financial crisis or tightening of financial conditions that reverse the move for a period. With global debt-to-GDP at record levels, this is a notable risk. Ironically, Bloomberg reported yesterday that Goldman Sachs plans to cut its targets for its online retail lending platform, on credit concerns.

With the recent risk-off, we are badly exposed to evidence of higher-than-expected inflation as this would make it very tough for bonds to rally on any flight to quality trade. This would be very bad for risk. So although that’s not the forecast for this Thursday’s vital US CPI, the risks remain asymmetric for inflation at the moment.

Also weighing on sentiment yesterday was the seemingly tense exchange between US Secretary of State Pompeo and China Foreign Minister Wang Yi. Pompeo said that there was “fundamental disagreement” between the two while Wang accused the US of escalating trade disputes and interfering in the country’s domestic affairs. Wang told reporters that “these actions have damaged our mutual trust, cast a shadow over US-China relations and are completely out of line with the interests of our two people”.

This morning in Asia markets are trading mixed with Nikkei (-0.92%) down as traders returned from yesterday’s holiday while the Shanghai Comp (+0.42%) and Hang Seng (+0.37%) are up after declining by -3.72% and -1.39%, respectively, in yesterday’s trade. Elsewhere the Chinese yuan is up +0.18% against the greenback to 6.9184. The strength in the yuan assumes significance as Bloomberg reported yesterday that the White House is concerned about the Chinese yuan’s depreciation and the US treasury department is weighing naming China as a currency manipulator in a report due out next week. In the meantime, PBOC skipped its open market operation today citing high liquidity in the system.

Overnight, US 10y yield has moved up by +1.1bp to 3.244% which is impressive given the risk off in Europe. This extends the 7 year highs.

In other news, the IMF slashed the global growth forecast for 2018 and 2019 to 3.7% from 3.9% earlier while keeping the US growth forecast for 2018 unchanged at 2.9% and reducing the 2019 growth forecast for US by 0.2pp to 2.5% citing the trade conflict. The IMF also sounded the alert on the global trade war saying it could take a significant bite out of global growth estimating output could fall by more than 0.8% in 2020 and remain 0.4% below its trend line over the long term, in a scenario where US President Trump follows through on all his threats, including global duties on cars. IMF estimates output could fall by more than 1.6% in China and over 0.9% in the U.S. next year, in such a case.

Elsewhere the IMF upped the inflation forecast for the Venezuelan economy in 2018 to 1.37 million percent by the end of the year from its earlier forecast of 1 million percent. Impressive numbers.

There was some good news for markets yesterday though and that was in the performance of Brazilian assets. Indeed following the resounding victory for the far-right Bolsonaro in the first round presidential election, the Bovespa surged +4.69% yesterday while the Brazilian Real (+2.19%) ended up the top performing currency. Local currency 10y yields also rallied 45.9bps.

On the Brexit front, the pound traded as much as -0.70% weaker yesterday before retracing to close down only -0.22%. A government spokesman declined to confirm that Brexit Secretary Raab will visit Brussels this week, potentially signalling an impasse between the two parties. He also said that the UK will seek a “precise future framework” which will be more difficult to achieve than the alternative, vaguer outcome. The spokesman described the proposed Irish border solution as “temporary” which is unlikely to be acceptable to the EU. So still a lot of details to be ironed out before an agreement can be concluded this year.

The economic data front was quiet yesterday, with the main focus on Germany’s disappointing industrial production print. It showed activity fell -0.3% mom in August versus expectations for a 0.3% expansion. That marks the third consecutive downside miss, which is beginning to present more serious downside risks to third quarter GDP. Separately, the Bank of France’s Industry Sentiment survey printed at 105 for September, up 2pts and near its cyclical high.

Before we wrap up, and as mentioned at the top, Michal in my team published a report "Credit in a Post-QE World: Spread Curves vs. Rate Curves" yesterday. It analyses the co-movement of credit spread and rate curves across the cycle, examines how much the ECB QE/CSPP taper has been priced in, highlights current term premia in credit, presents views on value across credit curves and recommends macro credit trades on the back of that. You can download the full report here .

As for the day ahead, it’s another quiet one for data with August trade stats in Germany and the September NFIB small business optimism reading in the US the only releases of note. Away from that we’ll hear from the Fed’s Kaplan just after lunch when he speaks at the Economic Club of New York, before the Fed’s Harker speaks at an event in the evening. The ECB’s Villeroy de Galhau is also due to speak this afternoon, while the BoE’s Broadbent is to testify to Parliament. As mentioned earlier, keep an eye on Italy also with Finance Minister Tria due to hold a number of hearings before the joint budget committees of the Lower House and Senate on the Government’s fiscal outline for the 2019 budget. Elsewhere, today is also the day that the IMF and World Bank annual meetings get underway.

https://www.zerohedge.com/news/2018...eld-hits-fresh-7-year-high-italy-rout-spreads
 

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The End Of An Error: After A Decade, 0% Auto Financing Finally Dries Up


by Tyler Durden
Tue, 10/09/2018 - 07:43


It’s official: prospective automobile buyers aren’t likely to be able to find 0% financing deals anymore.

Rising interest rates have caused auto lenders to pull back on the offers that have been the driving force behind the auto industry for the better part of the last decade, the WSJ reports. Until recently, still fueled by big incentives, the industry hadn’t seen too many meaningful aftershocks of rising interest rates. That's about to change in a big way (see "Car Sales Tumble As Automakers Slash Discounts For The First Time In 5 Years").

Lending companies have to pay the difference between the rate they offer customers and the Federal Funds Rate - as a result, 0% rates simply aren't a sensible financial option for captive financing companies, or banks, any longer. While some car companies are switching to different types of incentives, like discounted lease rates and rebates, even those are starting to slow.

Speaking to the WSJ, Adam Lee, chairman of Maine dealership chain Lee Auto Malls, said that "for a long time, everything was 0%. At first, buyers could find 0% finance deals on 48-month car loans, and then auto lenders started extending those deals to 60-month loans and eventually 72-month loans. There are fewer and fewer of those deals now."

The report noted that in September, the percentage of new cars that were financed with an interest rate of 1% or under was down to 5.3%, down from 8.2% a year prior and 11.7% two years ago. 0% loans made up for 3.4% of new car financings versus 9.1% two years ago.



In addition, the average final financing rate for a new car purchase was 5.75% over the last quarter, which is up from an average of 4.82% two years ago, at a time when the industry was at its strongest. Jack Hollis, general manager of Toyota North America, stated:

“You’re definitely seeing the entire industry pulling back. Obviously, interest rates rising is a reality in the marketplace, and we’re going to react.”​
Low rates were a major catalyst in helping the automobile industry run hard for almost an entire decade, all the way back to the financial crisis in 2008. The rise in rates means that the average monthly payment for new vehicles will continue to rise, as it has been, according to data provided by Experian.



Despite this, General Motors still offers no interest loans on a couple of select models, like the Chevy Trax and the Chevy Equinox (suggesting that demand for these cars is less than stellar). An executive from General Motors told the Journal that even though these promotions are more expensive to maintain, they’re not going to "drop them from their quiver" altogether. The company is simply going to become more selective on which models qualify for low rates, GM spokesman Jim Cain said.

Adam Lee concluded that "The higher payments are making it harder for people to afford a new car. Some are going to used [vehicles], some are holding off [on purchases], and some are going to leases."

These rate hikes couldn't come at a worse time: at the start of the month, we reported that automobile sales in the United States for the month of September were nothing short of awful. Results from Ford, Honda, Nissan, Toyota and Fiat all tell the story of an industry grinding to a halt, with few silver linings. Three of these names posted double digit percentage declines in YOY sales and three of them missed analyst estimates.



Here are the additional lowlights from across the industry:

  • Ford posted an 11% drop, missing analyst estimates of 9.1%. The F-Series pickup line ended a 16-month streak of sales gains. Mustang sales were down 1.3%.
  • Nissan posted a 12.2% drop in September. Nissan and Infiniti brand car sales fell by 36%, including a 28% drop for the Altima sedan as the company prepared to start selling an all-new version this week.
  • Toyota sales were down 10.4%, far below estimates of 6.7% for the month. Combined sales for Toyota and Lexus brand cars fell 25.3%.
  • Fiat posted the only true "beat", as sales rose 15% versus analyst estimates of 8%. However, the Chrysler brand fell 7% to 14,683 vehicles and the Fiat brand fell 46% to 1,185 vehicles. The deficit was made up on Jeep sales, which were up 14%, as well as sales of Ram pickups and minivans.
  • Volkswagen of America car sales were down 4.8%
  • GM third quarter total sales were down 11%. The company stopped reporting monthly numbers earlier this year, with many suspecting that weakness in the production pipeline is responsible; they were right.

With incentives and low rates now both fading out fast, the automobile industry could be in for a grim finish to 2018 and an even worse 2019. Perhaps the only question left at that point will be how long it'll take the government to bail it all back out.

https://www.zerohedge.com/news/2018-10-09/end-error-after-decade-0-auto-financing-finally-dries
 

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Ford is planning to lay off '24,000 staff' globally after it was revealed Trump's tariffs cost the U.S. car giant almost $1BILLION

  • U.S. automaker is expected to fire 24,000 employees in coming months
  • Plan is part of a $25.5billion restructuring first announced in July
  • In September, Ford said it lost $1billion because of President Trump's tariffs
https://www.dailymail.co.uk/news/ar...umps-tariffs-cost-U-S-car-giant-1BILLION.html
 

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Asian Metals Market Update: Oct 9 2018
By: Chintan Karnani, Insignia Consultants
Trump wants to call China a currency manipulator. The fall in the yuan reflects growth concerns and nothing else. Currency should reflect fundamentals. Currency prices moves are based on fundamentals. The USA has the strongest economy which is why the US dollar is strong. Asian currencies are weak as a higher energy bill wreaks havoc on a nations balance sheet and also affects voter base.
 

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Ira Epstein's Morning Flash Video for 10 9 2018
Ira Epstein


Published on Oct 9, 2018
 

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China Economic Collapse 2018
Illuminati Silver


Published on Oct 8, 2018
illuminatisilver.com

China Economic Collapse 2018 - Is it likely?

Today is Monday 8th October 2018 and we are discussing China and its supposed imminent collapse.

A month ago we produced a video titled Emerging Market Collapse and a week ago one entitled China - Bond Collapse and Tariffs - Influence on gold and silver prices – we strongly urge you to listen to them if you haven’t already done so please.

China - Bond Collapse and Tariffs - Influence on gold and silver prices
https://youtu.be/zGW5Gu7G9bo

Emerging Market Collapse – why are Gold & Silver prices affected?
https://youtu.be/ukN9Xl9LIhA

However we wish in this video to focus again on China but from a slightly different angle. You will notice on You Tube a spate of videos stating that China is about to collapse economically. Now we are old enough and frankly experienced enough to remember 20 – 30 years ago when China was then seen as an emerging market and was the place that Unit Trust and Investment Trust managers were encouraging investors to place their money. Then there was a blip and the total financial annihilation of China was predicted and so funds would exodus it but nevertheless it continued to grow and prosper at unbelievably high GDP rates for the following 30 years or so. Personally, as a young investment adviser, I remember advising clients to include China funds as part of an investment portfolio, as although it was high risk then, it would certainly provide significant growth potential taking the long term in view – which is exactly what happened I am pleased to say.
However today may be somewhat different. While China was an emerging market it presented wonderful opportunities for companies to invest in and also to obtain or manufacture products cheaply. As it grew and became more financially sophisticated, it also became an ideal depository, or purchaser if you wish, for Western Debt instruments and especially US dollar denominated assets and bonds. However, in recent years China has become a threat to dollar hegemony. It now forms part of the International SDR or Special Drawing Rights and is the second largest economy in the world – second to the US and economists predict that it won’t be long before it surpasses the US. It also negotiates trading deals with other countries for commodities which do not necessarily involve the use of the dollar which is threatening.

The US desperately needs to export its goods and to increase its own GDP which is Why President Trump and his administration is focussing on a High risk but some extent understandable US 1st Economic policy – casting aside any of the political undertones and benefits associated with that.

So what are we witnessing is this. Emerging markets which took on huge amounts of US debt, cannot afford its prepayments as the dollar value has increased thereby ironically their investors are removing funds from these markets and putting them into either US Treasuries or Stocks – thereby shoring up the dollar further (note greater reliance on the dollar) and China with the trade tariffs and their own consequential economic growth issues, are themselves printing money to shore up their own internal infrastructure thereby reducing the value of their own currency.

We are already witnessing turmoil in China Stocks markets. Today for example China's stock markets fell more than 3.7% after the country's central bank announced measures to prop up the economy amid an ongoing trade war with the United States.

Yesterday, the People's Bank of China announced it would be cutting the amount of cash that banks have to hold as reserves from Oct. 15th – in a bid to spur investment.

So what is going to happen. Well short term there will be turmoil.

China believes in its own supreme World economic dominance – and as tariffs will hurt the US too believes that the US has more to lose than it does and after all US Business generally being responsible to shareholders by definition have to look after short term interests while China prepares 25, 50 and 100 year plans.

Let us not under-estimate either the damage it could do to the US and world economies, but dollar hegemony is essential to the future of US supremacy and once this is lost, then its all over for Western dominance and power will shift inexorably to the East.

Look out for and beware of future turmoil. Its far from over and neither the US nor China are going to collapse tomorrow – but this will be an ongoing battle – temporarily adjusted by interim agreements – but the war is ultimately who will control the world from 2050 onwards – the West or the East? – and this is why long term we are confident about gold and silver prices.
 

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China Economic Collapse - Is The Writing on the Wall
Illuminati Silver

Published on Oct 9, 2018
http://illuminatisilver.com

China Economic Collapse - Is The Writing on the Wall?

Yesterdays Video:

China Economic Collapse 2018
https://youtu.be/SmfU86CWokg

Today is Tuesday 9th October 2018 and we are continuing our discussion regarding the likelihood of Chinas imminent economic collapse.

Yesterday we pointed out that Chinas economy may not be as sound as they would have us believe. We also highlighted that there would be future turmoil and that Chinas answer to its short-term problems would be a continued devaluation of the Yuan and an easier monetary policy in order to boost internal investment and hopefully productivity. Well just one day later its interesting to see what has happened.

Reported by Reuters today:

“Asian shares hit 17-month lows on Tuesday as China allowed its currency to slip past a psychological bulwark amid recent losses in domestic share markets, a shift that pressured other emerging currencies.”

Yes China did the very thing we suggested in our video.
China's central bank fixed its yuan at 6.9019 per dollar so breaching the 6.9000 barrier and leading speculators to push the dollar up to 6.9120 in the spot market.

A JP Morgan analyst is quoted as stating in a note:
“Risk sentiment is in a foul mood and stocks are sinking everywhere…..With Chinese economic momentum continuing to weaken alongside increasing pressure from the United States, currency weakness is the obvious release valve…… a lurch through the 7.0 level by year end is possible.”

This appears to be further supported by a commentary in the State backed Global Times Chinese tabloid which states “China must take strong stimulus measures to support growth, with the country in a “critical” period of stabilizing its economy”. So we could very well see similar measures similar to those adopted in 2008 by China to help overcome the consequences of the global financial crisis where it injected 4 trillion Yuan into the economy.

The result of this weakness and concern has caused the US dollar to rise with Yields on 10-year Treasury paper touching a new seven-year high at 3.252% and the dollar index standing as we produce this video at 95.89 and in our view will shortly reach 96.

Now whilst this can in some respects be favourable for the US, not least of which perhaps reducing the frothiness of US stocks – better a small release valve than one mighty explosion, there are adverse consequences too. So much so that The IMF have just cut forecasts of global growth for both this year and next, including downgrades to the outlook for the United States, China and Europe.
We stated yesterday that there will be turbulence ahead and we are more and more confident of that statement. We are also increasingly confident of the dollars inexorable rise for some weeks if not months to come thereby eliminating, at least for the short term, the pumpers clarion call that the dollar will imminently collapse and gold and silver will shoot to the moon.

For interest Gold stands at $1190 some $12 down from its Friday’s close and silver stands at $14.43 some 20 cents down from its Friday’s close. We also received a note from one of our ‘oil insiders’ and we have to add that we have not confirmed this, but we are told by our colleague that unless the Iran situation is sorted quickly, we shall see Brent Crude hit $100 a barrel before the year is out.

We sincerely hope this does not happen, as it will certainly impinge on economic growth, however in reality Brent Crude should not be more than $65 a barrel in any case and yet it stands at $84.5 – so please keep this in mind – we haven’t corroborated this yet but our contact is rarely wrong. When we have more info we shall share it with you.
 

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Ira Epstein's End of the Day Financial Video 10 9 2018
Ira Epstein


Published on Oct 9, 2018
 

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Ira Epstein's End of the Day Agriculture Video 10 9 2018


Ira Epstein
Published on Oct 9, 2018
 

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Sears Preparing To File Bankruptcy As Soon As This Week


by Tyler Durden
Tue, 10/09/2018 - 23:23


The neverending saga of the world's longest melting ice cube, that of Sears Holdings which has flirted with bankruptcy for years only to get bailed out in the 11th hour by its biggest investor and CEO Eddie Lampert each and every time, is finally coming to its logical end.

With its stock crashing to a new all time low, and with a $134 million in debt due on Monday on a bond issue that is currently yielding over 1,000% in the 3 or so business days left to maturity...



... the iconic if cash-strapped Sears Holdings, whose predecessor was the de facto originator of "online" retail with its innovative mail order catalogues, and which has been losing money for years, has hired M-III Partners to prepare a bankruptcy filing that could come as soon as this week, the WSJ reported citing people familiar with the situation, as the cash-strapped company that once dominated American retailing faces a debt payment deadline.

The WSJ reports that employees at M-III Partners, a boutique advisory firm, have spent the past few weeks working on the potential filing, with M-III staff seen at the retailer’s headquarters in Hoffman Estates, Illinois. That said, a Chapter 11 may still be avoided as Sears "continues to discuss other options and could still avert an in-court restructuring."

Furthermore, Eddie Lampert, the hedge-fund manager who is Sears’s chairman, chief executive, largest shareholder and biggest creditor, may once again simply rescue the company, as he has done on many occasions in the past by making the payment. What's different this time, is that Lampert is pushing for a broader restructuring that would include shaving more than $1 billion from Sears’s $5.5 billion debt load, selling another $1.5 billion of real estate and divesting $1.75 billion of assets, including the Kenmore appliance brand, which he has offered $400 million to buy himself. Said otherwise, Lampert hopes to shrink Sears back to profitability with the company already closing hundreds of stores in recent years.

Unfortunately for the billionaire, a key stakeholder group is resisting efforts to continue business as usual: as a result of the company’s poor financial performance, its creditors have refused to support his out of court restructuring plan, which would leave bankruptcy as the only option.

One can't exactly blame the company's lenders for being skeptical: Sears has lost more than $11 billion since 2011, and its annual sales have dropped nearly 60% in that period to $16.7 billion. Analysts say it needs to raise more than $1 billion a year to stay afloat.

Desperate to avoid losing control of the company which he bought out of bankruptcy in 2005, Lampert - who in 2003 was kidnapped from the parking lot of his Greenwich office, but was able to persuade his captors to let him go after two days of captivity - has also sought advice, or perhaps magic, from distressed consulting firm AlixPartners, lawyers at Weil, Gotshal and Lazard, as he has tried to keep the company afloat and restructure out of bankruptcy court.

Another hint that a bankruptcy now appears inevitable is that on Tuesday, Sears added restructuring expert Alan Carr as a director, expanding the six-person board to seven.

Carr runs a restructuring advisory firm and previously worked as a restructuring lawyer at Skadden, Arps, Slate, Meagher & Flom LLP. He has also served on the board of companies—including wireless-networking business LightSquared Inc. and guitar maker Gibson Brands Inc.—that have recently navigated the bankruptcy process.​
As the WSJ puts it, Lampert, who was "once hailed as a genius investor for smart bets he made on AutoZone and AutoNation," met his match in Sears, Roebuck. The retailer was struggling before he combined it with Kmart, which he rescued from bankruptcy, to create Sears Holdings Corp. in 2005.

While Lampert rushed to cut expenses and close unprofitable stores, the business continued to deteriorate during the recession following the financial crisis, as more purchases were made online and rivals such as Walmart and Amazon grew stronger. Not helping was Lampert’s unconventional approach to retailing: he resisted investing in store upgrades and after becoming CEO in 2013, managed the company from Florida.

According to the WSJ, Lampert wants to restructure Sears without filing for bankruptcy protection, because he views bankruptcy as risky for retailers who often enter Chapter 11 bankruptcy with the hope of restructuring but wind up in Chapter 7 liquidation instead, as was the case this year with Toys “R” Us Inc. More realistically, Lampert does not want cede equity control to the company's creditors, which would be the most likely outcome in court.

Lampert, whose hedge fund ESL Investments Inc. owns a majority of Sears shares, also believes the company can get more value for its assets by selling them while it is a going concern, this person added.​
And while critics have accused Lampert of stripping assets from the insolvent company, Lampert claims he has been selling assets to give Sears the cash it needs to stay in business, i.e., avoiding handing over equity control.

As for those who have never heard of M-III Partners, it was founded by turnaround expert Mohsin Meghji, who in 2011 quit Loughlin Meghji to start his own company after working on restructurings for nearly 30 years. Sears, which still has nearly 900 stores if not for long, would be M-III’s biggest assignment. It recently served as chief restructuring officer of Real Alloy, an aluminum recycling company that sought bankruptcy protection in 2017.

To be sure, none of the above will come as a surprise to anyone as Sears shares, which traded as high as $144 over a decade ago, closed Tuesday at 59 cents, confirming that investors were aware that a potential bankruptcy filing or restructuring is imminent. If there is one shared feeling among the various stakeholders, it is probably relief that the world's most drawn out insolvency - on par with that of Greece - is finally coming to an end.

https://www.zerohedge.com/news/2018-10-09/sears-preparing-file-bankruptcy-soon-week
 

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Global Stocks Spooked As US Treasury Yields Resume Their Ascent


by Tyler Durden
Wed, 10/10/2018 - 07:05


Global markets entered Wednesday in tentative fashion as US Treasury yields resumed their upward march after dropping the day before ahead of a closely watched US CPI report and as the US Treasury prepared to sell more debt to fund the soaring US deficit.

The mood in stocks soured, and European equities turned lower with American futures as Asian peers erased an advance while world stocks inched off eight-week lows; market gains were checked by fears for global economic growth, greater US decoupling, escalating trade war and the possibility of an Italy-EU clash over budget spending. The result was generally a sea of red among global capital markets in early trading.



The equity rout that resulted from the global bond selloff that took bond yields to seven-year highs this week were exacerbated by continued growth concerns arising from trade conflicts and $80-per-barrel oil, with the IMF cutting its world GDP forecasts for the first time in two years.



The yield on 10-year Treasurys resumed its ascent to 3.23% from 3.20%, after falling for the first time in a week on Tuesday, putting a lid on early trader optimism.



"We are at some sort of critical moment, a crossroads, for bond and equity markets,” Marie Owens Thomsen, global head of economic research at Indosuez Wealth Management, said noting that while U.S. 10-year yields at 2% unequivocally favored equity investment, this was not so above 3%. "This January we took out the 2 percent (yield) handle and now we are wondering if we are permanently taking out the 3 percent handle as well. That makes the climate for equities much more challenging."



The MSCI world equity index rose 0.14% after four days in the red. However, while Japan’s Nikkei and MSCI’s Asia-Pacific index outside Japan rose 0.2-0.3 percent, European shares slipped 0.2 percent, undermined by more bellicose rhetoric from Italian politicians.

The Stoxx Europe 600 Index dropped as most sectors turned lower. The European basic resources index (SXPP) - which was one of the best-performing sectors since the end of August - fell as much as 2.2%, one of Wednesday’s main sector laggards, as investors rotated toward defensive sub-groups including telecoms and health care. Milan-listed stocks traded between gains and losses, rising off 18-month lows hit earlier in the week.

Europe's weakness followed a modest recovery of bullish sentiment in Asia, as shares in Japan rose after four days of losses, South Korean equities slumped as trading resumed after a holiday while those in China closed 0.2% higher after fluctuating between gains and losses before edging barely up after early gains slipped with lithium-related stocks tumbling, while Tencent suffered a record ninth day of declines in Hong Kong.



The retreat in emerging markets took a pause on Wednesday after Donald Trump said the Fed is moving too fast on rate hikes and as traders awaited U.S. inflation data before taking a stance on riskier assets. Equities slowed their drop and currencies eked out their first gain this week, led by India’s rupee

The yuan slipped against the dollar for the fifth session out of the past six to approach four-year lows hit in August, unresponsive to Mnuchin's warning on devaluation. The focus is on next week’s semi-annual U.S. report on currencies amid Treasury officials’ comments that recent yuan depreciation has raised concerns in Washington.

The backdrop to global markets is still dominated by deepening U.S.-China tensions and a surge in volatility for stock and bond markets. While the Treasury rout has eased, a glut of new U.S. debt is coming to the market this week. American producer and consumer price data is also due in the next two days, and may determine where yields go from here.

"After President Trump once again criticized the Fed for raising rates too fast and he reiterated his preference for low borrowing costs, U.S. bond yields fell from their recent highs," Rabobank strategist Piotr Matys wrote in a note. "This in turn provided the emerging-market currencies with respite. However, looking from the perspective of technical analysis the price action implies that U.S. 10-year Treasuries have entered a period of consolidation."

Italian bonds initially dropped and bear flattened beyond the belly after Deputy PMs Salvini and Di Maio said the budget plan won’t change and there’s no going back, suggesting an unwillingness to compromise. Italy’s 10y spread to Germany blew out to 305bps, after Di Maio said that "our objective is not the spread, but the citizen... We expect that the economic growth rate will be higher” with measures included in the next year’s budget plan.

However the initial weakness reversed in a repeat of Tuesday's action after Finance Minister Giovanni Tria, speaking before the parliament’s joint budget committee, pledged action to restore calm should market turbulence escalate into financial crisis. Yields slipped further after Tria said he expected “collaboration” with the EU on the budget issue, and added that "the rise in government bond yields recorded in the last few days is certainly a reason for concern, but I want to reiterate that it was an excessive reaction which is not justified by the fundamentals of Italy’s economy and public finances."



That said, markets’ pressure has not dissuaded the government from a bigger-than-expected budget deficit as ministers’ comments indicated they are prepared to defy European Union critics. The developments have raised risks of a credit ratings downgrade for the country, with a knock-on effect for Italian banks which are big holders of government bonds. However the banks’ shares received a boost after an EU official told Reuters regulators were “intensely” monitoring Italian banks’ liquidity levels but there was no cause for alarm.

“I am not saying Italy is managing the situation in an ideal fashion but at the current junction I don’t think they are anywhere near a position where they can provoke another crisis in Europe,” Owens Thomsen said.

In currencies, the dollar reversed an early decline, rising to session highs, tracking Treasury yields, while another drop in Italian bonds kept the euro under pressure. The Bloomberg Dollar Spot Index heads for its third straight weekly advance as Treasury 10-year yields hold close to cycle highs and the euro meets selling interest on rallies above 1.15.



Politics were also in focus in Britain where reports of progress between the UK and the EU in negotiating a Brexit deal pushed the pound to 3-1/2-month highs against the dollar. Analysts at Eurizon SLJ Capital said parliamentary approval looked likely for Prime Minister Theresa May’s Brexit deal. The Times newspaper reported 30-40 opposition Labour MPs would back the agreement. “Already significantly undervalued, sterling has upside risks, especially against the euro,” Eurizon SLJ told clients, arguing that $1.55 was “fair value” for the currency.

The krone led gains in G-10 on stronger Norwegian inflation. Sterling hits its strongest level in two weeks on hopes officials will reach a compromise Brexit deal that could see the U.K. remain temporarily in the EU’s customs regime; wider than forecast trade deficit data helps push the pound back toward its opening level. The South African rand dropped following Tuesday’s rally.

In geopolitics, US President Trump said a summit with North Korean leader Kim Jung Un will be after US midterm elections on November 6th. In related news, US Secretary of State Pompeo noted real progress on his trip to North Korea and sees a full path to denuclearization.

In the latest Brexit news, ITV reported that UK PM May's negotiator Robbins has made meaningful progress in talks with EU's Chief Negotiator Barnier on the Irish border backstop. The article stated, "The most important development would be that the EU seems close to agreeing that the backstop would apply to the whole UK and not just to Northern Ireland, as it originally demanded - or at least it would apply to the whole UK for customs." (ITV) In related news, UK Brexit Minister Raab said the UK will not sign up to an indefinite customs union with the backstop and negotiations with the EU have intensified, some differences on the withdrawal agreement.

In commodities, WTI slipped but was still near $75 a barrel as Hurricane Michael curtailed offshore oil production and the IEA issued a warning to the global market.

Expected data include mortgage applications, PPIs, and wholesale inventories. Fastenal is among companies reporting earnings.

Market Snapshot
  • S&P 500 futures down 0.1% to 2,885.25
  • STOXX Europe 600 down 0.3% to 371.92
  • MXAP up 0.02% to 157.41
  • MXAPJ down 0.05% to 492.53
  • Nikkei up 0.2% to 23,506.04
  • Topix up 0.2% to 1,763.86
  • Hang Seng Index up 0.08% to 26,193.07
  • Shanghai Composite up 0.2% to 2,725.84
  • Sensex up 1.3% to 34,758.76
  • Australia S&P/ASX 200 up 0.1% to 6,049.81
  • Kospi down 1.1% to 2,228.61
  • German 10Y yield rose 0.2 bps to 0.551%
  • Euro down 0.01% to $1.1490
  • Italian 10Y yield fell 9.0 bps to 3.104%
  • Spanish 10Y yield rose 1.1 bps to 1.611%
  • Brent futures down 0.2% to $84.82/bbl
  • Gold spot down 0.2% to $1,187.48
  • U.S. Dollar Index up 0.1% to 95.76
Top Overnight News from Bloomberg
  • Republican groups have been pulling back in more than a half dozen tough House races to focus their resources in districts where they see a better chance to defend against a building midterm surge by Democrats
  • China plans to increase the number of companies it deems systemically important financial institutions, people familiar with the matter said, a sign that policy makers are stepping up crisis-prevention efforts as the nation’s debt burden swells to unprecedented levels
  • Mnuchin warns China on competitive currency devaluations; Treasury has monitored currency issues "very carefully"; notes yuan has "depreciated significantly" during the year: FT
  • Italy: Finance Minister Tria says budget watchdog approved govt economic forecast, however had different view on growth targets; rise in BTP yields are an excessive reaction
  • BOE’s Haldane: risks to domestic prices are now broadly balanced; U.K. wage growth is likely to be limited and gradual
  • Brexit: a group of 30-40 Labour MPs are prepared to back Chequers deal, according to people familiar: Times
  • ECB’s Mersch: tightening labor market should support core inflation; reiterates ECB will be data dependent
  • British and European Union officials are locked in talks in Brussels over a compromise Brexit deal that could see the U.K. remain temporarily in the EU’s customs regime, people familiar with the negotiations said
  • There are growing signs China’s yuan may weaken past 7 per dollar, a key psychological level it hasn’t breached in a decade. The latest came in a China Securities Journal commentary
  • The U.S. is threatening to block the U.K. from a 46- nation public procurement agreement, a move that would deny British companies from accessing a near $2 trillion-dollar marketplace after leaving the European Union, according to two officials with knowledge of the situation
  • Federal Reserve Chairman Jerome Powell is pinning his hopes of stopping the U.S. economy from overheating on a variable that a former colleague called “the most significant unobservable of all:” inflation expectations
  • Hurricane Michael’s winds rose to Category 4 strength of 130 miles an hour as it careened toward Florida
Asia-Pacific equities traded mixed as the region mimicked the lead from Wall St. where the S&P notched its fourth day of losses while the Nasdaq snapped its three-day losing streak. The Dow closed in the red as the major indices swung between positive and negative territory throughout the day. ASX 200 (+0.3%) was supported by strength in the healthcare and consumer discretionary sectors, while Nikkei 225 (Unch) was pressured by machinery names along with Softbank after reports emerged that the company discussed investing between USD 15bln-20bln for a majority stake in WeWork, while a firmer currency only subdued the index further. Elsewhere, mixed trade in China with Hang Seng (+0.5%) supported by oil names, while Shanghai Comp. (-0.3%) gave up initial gains to trade with no firm direction for most of the session before stabilising in the red.

Top Asian News
  • China’s Banking Showdown Pits WeChat vs. 3 Million Bank Tellers
  • Rocket Scientist’s Veggie Startup Is Said Valued at $7 Billion
  • Hong Kong Bans E-Cigarettes in Latest Blow for Big Tobacco
  • SoftBank Is Said to Consider Taking a Majority Stake in WeWork
  • Luxury Shoppers in China Still Buy Bags, But Not BMWs
  • Singapore Central Banker Strikes Upbeat Tone Amid Trade Risk
Major European indices (ex-SMI) trade lower (Eurostoxx 50 -0.4%) as Italian budgetary concerns remain a key focus; SMI. The CAC 40 (-0.7%) lags its peers after being weighed on by the Luxury names after the sector was downgraded to underweight by Morgan Stanley with the US bank citing concerns about a slowdown in Chinese activity. The move by MS took the shine of LVMH's latest sales update with other Luxury names such as Kering and Burberry trading lower in sympathy. Sectors are mixed with telecom stocks leading their peers amid broad support for the sector today. Energy names are firmer by 0.7% following oil supply concerns from Hurricane Michael. Consumer discretionary is down by over 1.5% due to the aforementioned poor performance of luxury brands. Dixons is up by 3.5% after being upgraded to buy at HSBC; whilst Sage are up by 2.4% following being upgraded to Hold at Deutsche Bank.

Top European News
  • U.K. Economy Set for Best Quarter Since 2016 Despite Flat August
  • Patisserie Valerie Owner Suspends CFO Amid Accounting Probe
In FX, the Greenback has regained some composure overall after Tuesday’s rather sharp and abrupt sell-off on a degree of US Treasury yield retracement, and to a lesser extent another expression of dissent about the rate of Fed tightening from President Trump. To recap, the broad Dollar and DXY recoiled from best levels in relatively quick order, with the index down to 95.500 vs 96.000+ and circa 95.750 now, as rival currencies also derived bullish momentum on independent factors. The JPY is back below 113.00 vs the Usd and still unable to really test a key Fib level at 112.73, but perhaps drawn towards decent option interest from the big figure to 113.05 (1.2 bn) if the headline pair fails to break above 113.25. Some retracement from peaks for the Zar after a broadly positive reaction to the new SA Finance Minister appointment, while in contrast the Try has pared losses following initial disappointment over the Turkish Government’s inflation-fighting measures.

In commodities, both WTI and Brent are down just under 0.5%, trading just under USD 75/bbl and USD 85/bbl following further supply shortages from Hurricane Michael with 40% of Gulf of Mexico production now suspended in preparation. Note, APIs will be released otnight at 2130BST due to the Columbus Day holiday on Monday. Iron ore futures are up by over 0.6% following comments from Australia’s Port Hedland that Iron ore shipments to China to rise to 37.4mln tonnes. Gold is uneventful once again trading within a thin USD 5/oz range. Zinc hit a 4-month high in Shanghai overnight amid tightening supplies.

Looking ahead, in the US, focus will be on the September PPI report ahead of Thursday’s CPI, as well as August wholesale inventories data. Brexit negotiations will remain in focus, the BoE’s Chief Economist Haldane will speak in London, and regional Fed Presidents Bostic and Evans will speak on the economic outlook later in the evening.

US Event Calendar
  • 7am: MBA Mortgage Applications, prior 0.0%
  • 8:30am: PPI Final Demand MoM, est. 0.2%, prior -0.1%;
    • PPI Ex Food and Energy MoM, est. 0.2%, prior -0.1%
    • PPI Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.1%
    • PPI Final Demand YoY, est. 2.7%, prior 2.8%
    • PPI Ex Food and Energy YoY, est. 2.5%, prior 2.3%
    • PPI Ex Food, Energy, Trade YoY, prior 2.9%
  • 10am: Wholesale Inventories MoM, est. 0.8%, prior 0.8%; Wholesale Trade Sales MoM, est. 0.5%, prior 0.0%
DB's Jim Reid concludes the overnight wrap
It was another day to wear your seatbelts if you were trading BTPs yesterday. By late morning London time 10yr yields had climbed another 14bps to 3.711%. However by the close we were almost 10bps tighter on the day at 3.476%. An impressive turnaround. Yields seemed to start to fall at the same time as the following headlines came through from Tria’s parliamentary hearing. He said that the “Government would act in case of an unexpected rise in bond spreads,” and that Italy’s current government bond yield spread is “unacceptable” and hopes to bring it down by explaining the budget measures. To be fair, this was all very vague and it’s not clear what the government could do other than reduce the budget deficit – which he hasn’t had much power over in the first place. Nevertheless the rally had started and seemed to get a further leg when headlines came through that “Conte, Tria, Salvini and Di Maio to meet at 8pm over budget.” We haven’t seen any follow through on this but Tria will address parliament at 10AM local time today.

If BTP trading required a seatbelt yesterday, Treasury and Bund markets required a small dose of motion sickness pills as 10yrs traded to both sides of a 6bp and 4bps range respectively. Given the risk off of the last few days and the weak global day for risk across the US bond market holiday on Monday, it was a bit of a surprise to see US Treasuries sell off 3bps in the morning to nearly 3.26%. However, we closed 3.0bps lower at 3.203% (3.208% in Asia). Bunds closed largely unchanged.

US equities were mixed again, though the recent underperformers bounced, with the NYFANG index up +0.63% and the NASDAQ eking out a +0.03% gain after 3 sessions of losses over which time it had shed -3.60%. The S&P 500 and DOW fell -0.14% and -0.21% respectively, while the VIX index rose as much as 1.8pts, but fell throughout the evening to close only 0.26pts higher at 15.95. That’s still a 3-month high.

This morning in Asia markets are continuing to trade mixed with the Hang Seng (+0.43%) up while the Shanghai Comp (-0.18%), Nikkei (-0.09%) and Kospi (-1.10%) are all down. Elsewhere, futures on S&P 500 (-0.15%) are pointing to a slightly softer start while EM FX is generally stronger against the greenback. On oil, IEA Executive Director Fatih Birol made a direct appeal to OPEC and other major oil producers to boost output, warning that high prices are inflicting damage on the global economy at a time when global economy is already losing growth momentum.

The pound rallied 0.41% versus the dollar yesterday on positive-sounding headlines, with Dow Jones reporting that the EU and UK will agree to a solution on the Northern Ireland issue at next week’s EU Council meeting. Separately, Brexit Secretary Raab told Parliament that the backstop for Northern Ireland will be temporary and limited. It’s hard to see how this will satisfy the EU but the headlines over the last 24 hours suggest we getting closer to a deal. The DUP’s Arlene Foster reiterated that on the Northern Ireland border issue they are trying to find a deal that works for everyone which sounded a little more dovish while the Government’s spokesman James Slack said that the UK’s new proposal for how to prevent a hard border with Ireland is coming “in due course,” signaling that the government expects the EU to flesh out how it sees UK’s future ties with the EU. In the meantime, The Times reported that the UK PM Theresa May is planning to have an extended discussion on Brexit at next Tuesday’s cabinet meeting in hopes of outlining a compromise deal on the Irish border. Overall, our strategists remain cautious, since the actual agreement of the deal will not be the key stumbling block; the real issue is if a deal can pass through Parliament. Positive movement from Labour MPs or from “hard” Brexiteers would be a more bullish catalyst for the pound. Interestingly the FT reports this morning that up to 30 Labour MPs are assessing whether they would vote against the government if it meant a no-deal.

In terms of central bank speak, the Fed’s Kaplan said on inflation that the cyclical inflation pressures are building and didn’t think that inflation is going to “run away from us” On rates he reiterated his previous view that he is comfortable hiking rates three more times till June while adding that higher productivity could lift neutral interest rates. He also added that I “don’t know the answer yet” on whether the U.S. central bank should lift interest rates past the neutral level that neither spurs nor slows growth, or “sit tight for a while.” Philadelphia Fed President Harker continued his recent hawkish shift by describing the labour market as having “very little slack left.” Overnight the Fed’s John Williams said that he expects the US economy to grow by c.3% in 2018 and 2.5% in 2019 while adding that the above trend growth should lead to decline in unemployment levels to slightly below 3.5% in 2019. On inflation he said he expects it to move a bit above 2% but doesn't see any signs of greater inflationary pressures on the horizon.

Emerging market currencies gained 0.32% yesterday, amid positive news in Turkey and South Africa. Turkey’s treasury and finance minister Berat Albayrak announced a new plan to cut inflation, including price controls/cuts and lower bank loan rates. The Turkish lira erased morning declines to close 0.26% stronger. In South Africa, Finance Minister Nene resigned after a corruption scandal and was replaced by Tito Mboweni, a former central bank governor. Mboweni has a strong reputation as an orthodox inflation hawk, and the markets greeted the new appointment with the Rand rallying 1.88% versus the dollar. The Brazilian Real also outperformed, gaining 1.74% for its 7th consecutive day of gains. It has now appreciated every day in October, as investors anticipate a victory by rightwing candidate Bolsonaro in the October 28 runoff Presidential election.

In Europe, Germany’s August trade balance came in at €17.2bn (vs. €16.2bn expected) while the current account balance stood at €15.3bn (vs. €16.2bn expected). German exports declined -0.1% mom (vs. +0.4% mom expected) for the second month in a row, however the decline in imports was more accentuated at -2.7% mom (vs. -0.1% mom expected). In the US, the NFIB small business confidence fell modestly from its all-time high of 108.8 in August, printing at 107.9 versus expectations for 108.3.

Looking ahead to today, August industrial production will print in the UK and France. After a soft reading in Germany, the stakes are marginally higher than normal. The UK will also have its monthly GDP reading and trade balance report. In the US, focus will be on the September PPI report ahead of Thursday’s CPI, as well as August wholesale inventories data. Brexit negotiations will remain in focus, the BoE’s Chief Economist Haldane will speak in London, and regional Fed Presidents Bostic and Evans will speak on the economic outlook later in the evening.

https://www.zerohedge.com/news/2018...pooked-us-treasury-yields-resume-their-ascent
 

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Severe US Recession Would Slash Public Wealth By $5 Trillion: IMF


by Tyler Durden
Wed, 10/10/2018 - 08:17


As part of the IMF's latest global economic forecast, which for the first time since 2016 saw the D.C.-based organization cut its global growth forecasts, the IMF warned that a severe recession would slash US public wealth by about $5 trillion, causing vastly more damage to Washington's finances than just an increase in debt and deficits.

At the same time, governments around the world, many of which face similar dangers, do not clearly publicize their overall net worths, the International Monetary Fund said in its new report, noting that "Few governments know how much they own" or how they use those assets for the public’s well-being, the IMF explained.

This creates a potential blind spot for policymakers who could use this knowledge to head off economic risks; Knowing what a government owns and how they can put their assets to better use matters because they can earn about 3% of GDP more in revenues each year and reduce risks, all at once according to France24. That’s as much revenue as governments make from corporate income tax receipts in advanced economies. Governments can put this money toward better schools, hospitals, or other priority spending.

Public assets consist of public infrastructure such as roads, bridges, and sewer pipes, as well as the money governments have in the bank, their financial investments, and payments owed to them by individuals and businesses. According to the IMF, "natural resource reserves in the ground are also part of assets, something that is particularly important for natural resource-rich countries. But assets also include state-owned enterprises such as public banks and, in many countries, utilities such as public electricity and water companies."



Meanwhile, total liabilities are much larger than debt alone. They come to about 198% of GDP, less than half of which is general government public debt. Pension obligations to civil servants are a large part of the remainder, yet few countries record them as such.

Another part is debt owed by public corporations. Most standard measures of general government debt do not include this, meaning that significant amounts of public debt are classified as private debt.

* * *

The global crisis lender, which in Indonesia this week is staging its annual meetings with the World Bank, cut its outlook for global GDP on Monday by two tenths to 3.7% through next year. The fund pointed to rising trade tensions as a cause for worry and also predicted slower growth in the United States next year and beyond.

Economists now say the chances of a recession in the United States are growing due to several factors, including trade tensions and mounting interest rates.

Beyond tax revenues and sovereign debts, a government's balance sheet contains a range of other assets and liabilities, such as the state enterprises, land and natural resources it owns as well as the money it has to pay to fund public-sector employee pensions. The difference between the two sides of the ledger is a country's net worth.

"The scars from the global financial crisis are still evident on public wealth a decade later," the report said, adding that the net worth of 17 advanced economies together was now $11 trillion lower than it had been prior to the crisis.

Countries that take such a broad approach to their finances may face lower borrowing costs and see higher revenues, making them more resilient in a downturn, the IMF said. But after a decade of recovery, the net worths of most Group of Seven economies are now negative, it said.
China's net worth has deteriorated to eight percent of GDP because of off-budget borrowing by local authorities and poor returns from powerful government-run businesses, the IMF found.



Meanwhile, the net worth of the United States has been in decline for nearly four decades. Worsening notably due to the global financial crisis, it had sunk by 2016 to negative 17% as a share of GDP, the report said. The federal mortgage giants Fannie Mae and Freddie Mac, which the government took over during the crisis, have lent a staggering amount - 44% of GDP - to the private sector.

But the biggest source of risk comes from state and local government retirement pensions, which can lose money when Wall Street sinks - meaning the shortfall has to come out of local government budgets. Towns and states then have to cut spending elsewhere, creating a drag on the economy.

Nationwide, such pension funds are already underfunded by about eight percent of GDP.

Using a hypothetical "stress test" scenario developed by the Fed for banking regulation, the IMF found a severe recession would cut the value of America's publicly held assets by an amount equal to 26 percent of GDP by 2020. And, at current levels, that would amount to about $5 trillion.

The scenario, which imagines a deep global recession, rising interest rates but collapsing stock and real estate prices, would see sovereign debt balloon by nine percent but net worth dive by another 17 percent, mainly because falling real estate prices would drag down the value of publicly owned structures.

Naturally, in a several recession, defaults on mortgages and student loans as well as pension fund shortfalls would all jump sharply, the report found.

https://www.zerohedge.com/news/2018...sion-would-slash-public-wealth-5-trillion-imf
 

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Investors and the Public Are Being Lied To About Inflation.
maneco64


Published on Oct 10, 2018
 

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Judge HALTS Elon Musk & SEC's Settlement; Requests Joint Brief
Lawful Masses with Leonard French


Published on Oct 10, 2018
Short video! The Judge in the SEC v. Elon Musk case has requested a joint brief as to why she should accept the settlement. This might be routine. A judge always has the power to review parties' settlements in a criminal matter.

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Trump Sides With Farmers In Battle Against Refiners

By Nick Cunningham - Oct 09, 2018, 6:01 PM CDT


The Trump administration announced a major policy change in an effort to win back farm country, allowing the year-round sale of a higher concentration of ethanol.

Coinciding with a campaign stop in Iowa, President Trump announced the lifting of the ban of E15 during summer months, a significant win for the corn and ethanol industries. Up until now, E15 cannot be sold during the summer because of smog concerns. Ethanol producers saw their share prices skyrocket on the news.

The decision comes after roughly 18 months of damaging policies to the agricultural industry. Former EPA Administrator Scott Pruitt became public enemy number one for the ethanol industry last year, even as many people in agriculture-heavy states supported Trump, as Pruitt’s agency repeatedly undermined the market for ethanol.

The EPA increased the number of waivers it granted to oil refiners last year and this year, reducing their obligations to buy and blend in corn ethanol into their fuel mixes. Not only did the waivers reduce demand for ethanol, but the prices for credits that are bought and sold in lieu of blending requirements also suffered steep losses, undermining the whole market. The ethanol credits, known as renewable identification numbers (RINs), saw their prices plunge to a five-year low, down from over $1 last year to only 12 cents today.

There has been a long-term rivalry between ethanol producers and oil refiners, and the problem for Trump is that there is somewhat of a zero-sum game between them in terms of federal policy. Oil refiners are obligated to blend a certain volume of ethanol, but have repeatedly tried to undermine those requirements. The corn and ethanol industries have fought to maintain the federal blending requirements. Any movement in either direction comes at the expense of the other. Related: What’s Next For Oil Prices?

The simmering tension was more or less bottled up for many years because federal policy didn’t change much. The two industries still lobbied against each other, but the battle was confined to the specifics of the annual blending requirements, not a broader war for wholesale policy changes.

That changed when the EPA began stepping up the number of waivers it granted to refiners, which undermined the RIN market and sparked a much more contentious fight. After repeatedly siding with oil refiners, particularly when Pruitt was at the helm of the EPA, the Trump administration is now trying to patch up the rift it created with farmers.


This is an especially important political exigency since the Trump administration has also hit the Farm Belt in another arena. The trade war with China has led to Chinese tariffs on American soy, corn, wheat, cotton, rice, sorghum, beef, pork, poultry, fish, and dairy products.

China is such a huge market for American farmers, and the tariffs have led to painful declines in prices. Soybean prices have declined more than 20 percent and corn prices are down more than 10 percent since the trade war began earlier this year. Related: Goldman: The Oil Market Can Handle Iran Outages

Between the trade war and the plunging price for farmers have grown a little wary of the Trump administration.

Trump has tried to straddle both the corn and oil industries, and his top officials have tried to broker a compromise for much of the past year. Several times, they appeared on the verge of some policy reform that offered wins to both sides, but had to back down because one side or the other felt they received the short end of the stick.

The E15 announcement on Tuesday was well received in the Farm Belt, but oil refiners are not happy. The proposed reform by the Trump administration will seek to curtail hoarding of RIN credits, an attempt to mollify refiners who say speculative trading drives up the cost of compliance. However, it wasn’t enough to bring refiners on board. “The president has promised to broker a deal to reform the [Renewable Fuels Standard] that works for all stakeholders. This isn’t it,” Chet Thompson, chief executive of the American Fuel and Petrochemical Manufacturers, said in a statement.

The battle between corn and oil clearly isn’t over.

By Nick Cunningham of Oilprice.com

https://oilprice.com/Alternative-En...oilpricecom+(Oil+Price.com+Daily+News+Update)
 

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Dow plummets 830 points in worst drop since February


CNBC
Fred Imbert and Alexandra Gibbs
15 mins ago


Stocks sank Wednesday, led by a steep decline in tech shares as this month's sell-off continued.

The Dow closed about 830 points lower as Intel and Microsoft tumbled. The Nasdaq plunged more than 4 percent.

The S&P 500 tumbled 3.3 percent, with the tech sector underperforming. The broad index was also headed for a five-day losing streak — which would be its longest since late 2016 — and fell below its 50-day moving average, a widely followed technical level.

Rising rate fears and a pivot out of technology stocks have made it a rough last few days. The S&P 500 is down for five straight days. The Dow has dropped four of the last five sessions, losing about 700 points over that span.

Shares of Amazon declined more than 3 percent, while Netflix slid 4.3 percent. Facebook and Apple also fell more than 1 percent each.

"People are getting out of the high-flying tech names right now," said Larry Benedict, CEO of The Opportunistic Trader. "I think people are under-hedged; there could be more pain ahead."

Worries about a sharp rise in interest rates also pressured equities. The 10-year Treasury note yield traded around 3.23 percent a day after hitting its highest level since 2011. The two-year yield, meanwhile, reached its highest mark since 2008.

"Portfolio managers tend to move to the sidelines in a skittish tape out of fear of suffering from a quick and sharp pullback," said Jeremy Klein, chief market strategist at FBN Securities.

"The fundamental environment, though, remains supportive of share appreciation. I contend that the concerns of rising interest rates are largely overblown. Specifically, I do not anticipate much more of an increase in longer dated Treasury yields," he said.

Rates rose on Wednesday after the U.S. government released data showing a rebound in producer prices last month. The producer price index rose 0.2 percent in September and is up 2.8 percent on a year-over-year basis. The index is a widely followed metric of inflation.

The recent rise in rates comes ahead of the start of the latest earnings season. Banks such as Citigroup and Wells Fargo are scheduled to report later this week. Overall, analysts polled by FactSet expect third-quarter earnings to have risen by 19 percent on a year-over-year basis.

But "there are just too many concerns about the rise in input costs," said Art Hogan, chief market strategist at B. Riley FBR. "Ongoing concerns about the stronger dollar and trade are being input into corporate guidance, and that is not good."

"This goes back to the assumption that the market made wrongly ... that once we got NAFTA 2.0 done, we'd pivot to China," he said. But "the rhetoric on China has only gotten worse, not better."

Stocks also fell as their European counterparts dropped on worries over Italy's budget. The Stoxx 600 index fell 1.6 percent, while the German Dax dropped 2.2 percent. France's CAC 40, meanwhile, pulled back 2.1 percent.

https://www.msn.com/en-us/money/mar...ff-in-technology-sector/ar-BBObn33?ocid=ientp
 

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'I think Fed has gone crazy': Trump blasts the Federal Reserve for its rate hikes and says the market is in a 'correction' as the Dow Jones plunges 800 points and tech stocks tumble

  • Dow Jones Industrial average fell 831 points, or 3.1 percent, on Wednesday
  • Big tech companies such as Amazon and Netflix led the stock market declines
  • Rising bond yields have been luring many investors out of the equity market
  • Investors also fear that rising interest rates could crimp corporate profits
https://www.dailymail.co.uk/news/ar...es-plunges-800-points-tech-stocks-tumble.html
 

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Gold Seeker Closing Report: Gold and Miners Gain While Stocks Plummet 10/10
By: Chris Mullen, Gold Seeker Report
Gold dipped $4.60 to $1185.50 at about 8:30AM EST, but it then rallied back higher for most of the rest of trade and ended near its last-minute high of $1193.60 with a gain of 0.25%. Silver dipped to $14.247 before it also bounced back into the close, but it still ended with a loss of 0.69%.
 

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Ira Epstein's End of the Day Financial Video 10 10 2018
Ira Epstein


Published on Oct 10, 2018
 

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Ira Epstein's End of the Day Agriculture Video 10 10 2018
Ira Epstein


Published on Oct 10, 2018
 

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Why Rising Bond Yields (and Rates) are a Big Deal
Silver Fortune


Published on Oct 10, 2018
This recent drop in bond prices and rise in bond yields could have major repercussions on the economy, and signal that the end of the expansion has arrived.

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Any content within this video or any other video by the Silver Fortune channel is merely one man's opinion, commentary, and analysis, or actual information obtained from elsewhere, and should not be constituted as legal, investment, or financial advice. Make your own financial decisions, or consult a professional if you'd prefer to go that route. The Silver Fortune channel disclaims any liability for legal, financial, or investment decisions made.