Overnight

A line from an old Jim Croce song: It's was bound to happen, just a matter of time and now looks like the time at least in the eyes of many market watchers, a rate hike by  the Fed and the ECB easing its quantitative easing.In short, the ECB is draining some of the punch out of the old whatever-it-takes punch bowl.

And that affected Asian shares ear;y Wednesday as four of the makrets traded lower, the ASX 200 off 0.5%; Korea's Kospi dropped 0.1%;Singapore's FTSE Straits Times Index lost 0.2% and the Taiwan was down 0.15. But it wasn't all negative as the Hang Seng cut early losses to trade higher up 0.5%. Chinese mainland markets are closed for the week.

After years of looking for the inflation needle everywhere but hay stacks, Fed officials apparently think they've found some on the distant data horizon and want to step on the interest rate accelerator to head off inflation at the corner of Wall and Broad. Here's a typical quote from Chair Yellen's messengers, Federal Reserve Bank of Richmond President Jeffery Lacker: “While inflation pressures may seem a distant and theoretical concern right now, prudent pre-emptive action can help us avoid the hard-to-predict emergence of a situation that requires more drastic action after the fact.” Some observers might choke on that term pre-emptive, but oh well.

Meanwhile, all the rate hike talk coupled with Magic Mario's insinuating bond buying will get wound down gradually, gold and silver took it in the shorts as the yellow stuff fell below the $1,300,trading at $1,272 and ounce. The lower price, if they last, should add to buying later this month at the Indian festival. At one point gold was off nearly 2%.



Neils Christensen of Kitco news noted: "The silver market has seen as even sharper drop with prices at its lows down well more than 3% on the day. December Comex silver futures last traded at $18.255 an ounce."

The one market that failed to take the head fake, if that's what it is, was the Nikkei 225, up 0.6%, led by the big auto makers and aided by the weaker yen.That's your signal to know that the dollar was up. Coming up to keep investors busy are the ISM non-manufacturing data and U.S. job numbers Friday.
Overnight, U.S. crude oil futures climbed 0.92 percent to $49.14 a barrel, while Brent futures were up 0.85 percent at $51.30.

Hillary And The Buckeye State

If you're a registered voter in Ohio you might want to pay attention to this quote.

But its Rust Belt profile, Mr. Trump’s unyielding anti-trade campaign and Mrs. Clinton’s difficulty energizing Ohio’s young voters have made it a lesser focus for Democrats this year, even as it remains critical to Mr. Trump’s path to the White House. As Mrs. Clinton’s aides privately note, the demographic makeup of Florida, Colorado and North Carolina, which have a greater percentage of educated or nonwhite voters, makes those states more promising for Democrats in a contest in which the electorate is sorted along bright racial and economic lines.

pjmedia.com/homeland-security/2016/10/03/is-hillary-clinton-abandoning-ohio-media-downplays-buckeye-states-importance-for-her-electoral-calculus

Well, we know there are a bunch of stupid oafs, dolts and uneducated white folks living in Ohio and its colleges and universities are sub par to put it mildly. The only problem is Clinton's campaign people either can't or more likely spend too much time reading bathroom graffiti and missed the October 2016 issue of Money  magazine and its article where these two apparently ignoramus brothers moved their successful business to Columbus. Here's the quote from the article: "The 6 top Big Cities."

When brothers Andy and Phil George decided to find a permanent home for their then flediing business in 2012, Columbus was a no brainer. It was just the low cost  of living vs. Los Angeles, where they launched the business or the dozen-plus Fortune 1,000 firms in town, or the resources of The Ohio Stater University. It was the promise of a city on the rise. "We felt there ws a lot of positive momentum," Andy George, cofounder of startup MentorcilQ, which helps launch and manage employee mentoring programs.

You sure could say that. In the past five years more than 150 companies have moved to the area, drawn by a highly educated workforce--the region has more than 60 college and university campuses--and a solid business base that includes major retailers L Brands and Ambercrombie & Finch. In 2015 the city saw the highest wage growth in the country, with average hourly wages shooting up 6.2%,far exceeding the national average rate of around 2% and surpassing even such go-go burgs as San Francsico (6%).

Gotta Watch Those Hand Signals

 
The outrage of censoring in this election campaign continues. Google, Facebook, Twitter, the list.
grows. And now Maria Yahoo the law abiding government spy. Anyone with a tape of the entire debate?

Hillary Clinton is not above cheating, lying or stealing to get what she wants.
So it shouldn’t be any surprise that she is being accused of cheating during Monday’s 1st Presidential debate. During the debate when Clinton wanted to signal Holt when she wanted the floor, she rubbed her face in a manner similar to a baseball manager.

If you think this is an unfounded charge: why was the video promptly removed and put it back up doctored. 

According to True Pundit she has not done this in any other debates during her career supporting the accusation that these were signals.

thegatewaypundit.com/2016/09/breaking-poker-pro-agrees-hillary-sending-hand-signals-debate-moderator-holt/#disqus_thread

Let's Discuss It, Mr. Senator

In tonight VP debate the Virginia Senator said one shouldn't be afraid to discuss an issue. Well, here's one that just cropped up Clinton and Obama apparently are afraid to discuss.

The Obama administration is moving to dismiss charges against an arms dealer it had accused of selling weapons that were destined for Libyan rebels.

Lawyers for the Justice Department on Monday filed a motion in federal court in Phoenix to drop the case against the arms dealer, an American named Marc Turi, whose lawyers also signed the motion.

Story Continued Below

The deal averts a trial that threatened to cast additional scrutiny on Hillary Clinton’s private emails as Secretary of State, and to expose reported Central Intelligence Agency attempts to arm rebels fighting Libyan leader Moammar Qadhafi.

Government lawyers were facing a Wednesday deadline to produce documents to Turi’s legal team, and the trial was officially set to begin on Election Day, although it likely would have been delayed by protracted disputes about classified information in the case.

A Turi associate asserted that the government dropped the case because the proceedings could have embarrassed Clinton and President Barack Obama by calling attention to the reported role of their administration in supplying weapons that fell into the hands of Islamic extremist militants.

Or perhaps the Senator was referring to Hillary's real medical records and all those emails she and this administration has been stonewalling on for months.

Read more:.politico.com/story/2016/10/marc-turi-libyan-rebels-hillary-clinton-229115

Make You Feel Wanted?

This is why banks are not your friend and you keep your money possibly there at your peril.

It also tells you that negative interest rates and cumbersome government regulations are strangling  bank profit margins. So that leaves you to pass the make-up costs onto.

That unplanned stop at the ATM might be costing you more than you think.
The average fee of using an out-of-network ATM is now $4.57, according to Bankrate. This is the tenth straight year of increases.

That means that you'll pay 9% in fees for withdrawing $50 from an out-of-network ATM.
"Paying the fee every once in a great while isn't going to make or break you, but it's the habit of routinely paying these types of fees that is going to put you in the poor house," said Greg McBride, chief financial analyst at Bankrate.

 money.cnn.com/2016/10/04/pf/atm-record-fees

The fees differ by region.

Here are the cities with the lowest average ATM fees:
San Francisco $3.90
Cincinnati $3.92
Dallas $4.22
Los Angeles $4.28
Boston $4.33
Philadelphia $4.33
And the cities with the highest:
Phoenix $5.07
Atlanta $5.05
Cleveland $4.98
Miami $4.94
Denver $4.88

A Wayward Unruly Child

How do you bring a wayward kid back into the fold?  Try to scare the hell out of him is one way. And that's what MSM and others are doing given the outlook for what they're calling a hard Brexit landing soon when those stubborn, ignorant Brits exit the EU.

What you expect here is what you are getting from Bloomberg, hyperbole of the worst kind, as they continue to ramp up the scaremongering. You have to give it to them, they will try anything and the harder they try the more you know you're doing exactly the correct thing, getting out of a mind-numbing, suffocating gaggle of indifferent, non-local bureaucrats who care only about their agendas and noting about yours.

Notice the term crashing; that's no accident. A goal break would be much more correct and appropriate. Recall the whinny words of Chase Bank CEO Jamie Dimon: "There's still time to change your mind." Now that a timeline has been set, the prospect they've been hoping for, another election, gets dimmer than vision of a Brussels' bureaucrat. Notice too the word threaten. That's the term a U.S.lame duck official came to your sovereign country and threatened you with when it came to trade agreements. Headlines about the pound hitting 31-year lows are more of the same. We're buyers of the pound and now you can play the same game all the others have been plying for so long, beggar thy neighbor, while your exports ramp up.

Britain crashing out of the European single market could cost banks and associated businesses in the U.K. almost 40 billion pounds ($51 billion) in lost revenue, undermining a key sector of the economy, an industry report will warn on Wednesday.

Finance firms are making a fresh bid for special status in upcoming Brexit negotiations with the EU after U.K. government officials this week indicated banks will get no favors. The report, prepared by Oliver Wyman on behalf of TheCityUK lobby group, warns that almost 70,000 jobs and 10 billion pounds of tax revenue are at risk from a so-called hard Brexit, according to two people familiar with its contents.

Prime Minister Theresa May has ruled out prioritizing protection of the banks in Brexit talks and has dismissed their key business demand for an interim deal to help ease the transition out of the bloc, Bloomberg News reported Monday, citing three government officials. Finance executives have threatened to move jobs if Britain doesn’t secure a deal allowing them to serve European clients from London. More:

bloomberg.com/news/articles/2016-10-04/global-banks-fight-back-on-brexit-warning-51-billion-at-stake

Beware of Trojan horses.

Another Melting Iceberg

This can't be true.

It ran on CNN. Could it be that this leftist scribe will now face the same fate as the creator of Dilbert for violating the party line? Publishing something that might cast doubt on the perceived wisdom of climate change freaks? That's certainly a crime akin to supporting Hillary's opponent. Will the Wolfman have his lucrative speaking engagements scrapped?

 Another iceberg melting. Could this be the ultimate phony iceberg of climate change? It appears after all the threats, years of misinformation, scaremongering and lying, those hearty Americans are still not convinced. Their collective first cranial nerve appears to be intact and on the job. Bovine flatulence isn't the only thing that smells.
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Nearly three-quarters of Americans don’t trust that there is a large “scientific consensus” amongst climate scientists on human behavior being the cause of climate change, according to an in-depth survey on “the politics of climate” released Tuesday by Pew Research Center.

According to the survey, only 27 percent of Americans agree that “almost all” climate scientists say that human behavior is mostly responsible for climate change, while 35 percent say that “more than half” of climate scientists agree on this. An additional 35 percent of those surveyed say that fewer than half (20%) or almost no (15%) climate scientists believe that human behavior is the main contributing factor in climate change.

Pew contrasted this to the United Nations’ Intergovernmental Panel on Climate Change (IPCC), which “stated in the forward to its 2013 report, ‘the science now shows with 95 percent certainty that human activity is the dominant cause of observed warming since the mid-20th century.’

cnsnews.com/news/article/lauretta-brown/pew-most-americans-dont-believe-scientific-consensus-climate-change

Maybe Not So Bizzare After All

For a long time we've heard about the threat of foreigners cashing in their holdings of U.S. assets. Mavens of MSN have always poked humor at such a risk, equating those who brooked the subject with the likes of those crazy gold bugs.

More often than not, however, it's the bizarre not the commonly expected event or incident that topples the apple cart, horse and all. Those buildings that crumpled on 911 was, unless you were in on planning it, a pretty bizarre happening. It turns out history is fraught with bizarre events leading to even more unexpected bizarre events. 

Way back in January most were saying Trump's rise to his current status would be much too bizarre. It can't happen.

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The end of U.S. dollar dominance may be unfolding in front of our eyes. No, we don't think China's ascent is the key threat; instead, key to understanding the U.S. dollar may be to understand the money market fund you might hold. Let me explain what's unfolding in front of our eyes, and what it might mean for the U.S. dollar and global markets.

Typically, when we think about potential threats to the dollar, we think a different reserve currency might take over; or that foreigners might dump their dollar holdings. I will touch on these, but then dive into what may be a much bigger elephant in the room. Bear with me.

Foreigners holding U.S. debt
Yes, foreigners hold trillions in U.S. debt, and if they were to dump all their debt, borrowing cost in the U.S. might rise. Except it hasn't happened: in our analysis, as foreigners have been selling U.S. Treasuries, the dollar has neither plunged, nor have U.S. borrowing costs skyrocketed. Why is that? As we will discuss below, we believe, in the short-term, other market forces have been even stronger.
That said, the recent decision by Congress to override President Obama's veto to allow private citizens to sue Saudi Arabia should get our attention. Saudi Arabia has threatened to sell its U.S. assets in case this law passes, as it doesn't want a judge to freeze their assets. As this chart below shows, this may not be an empty threat:

I write "may be" because there might be other reasons for the Saudis to sell U.S. Treasuries, such as a need to raise cash to deal with the fiscal challenges that have resulted from lower oil prices.
Some say the inclusion of China's currency into the official basket of reserve currencies (SDRs) by the International Monetary Fund (IMF) is a clear sign that we have the beginning of the end of dollar dominance. In our assessment, this change is mostly symbolic. First of all, the new SDR basket barely changes the U.S. dollar weighting (other currencies were reduced to make space for the yuan); second, no large country manages its reserves according to the formula provided by the SDR; instead we allege that they manage them according to what they believe to be in their perceived self-interest. Where SDRs come into play is when the IMF provides a loan, as those are typically denominated in SDR. A belief in this theory suggests a great belief in the power of the IMF, an institution that has, ever since its inception, looked for reasons to be relevant. I'm not trying to discredit this theory, but am a firm believer that market forces playing out may well overwhelm the bureaucrats at the IMF for a long time.

It turns out, though, that those that predict the end of the dollar dominance might still be right; not because of the IMF, though, but because of what we believe are massive changes underway in how anyone from foreign governments to foreign banks to foreign and domestic corporations fund themselves. More:

advisorperspectives.com/commentaries/2016/10/04/the-end-of-dollar-dominance 

The Law Abiding Spy

If you like being secretly spied on by the government, you'll love Yahoo. The Russians did it is the modern day equivalent of that old time excuse, the devil made me do it.

Just days after admitting that some 500 millions of its email accounts were hacked (allegedly Russians, of course), the Yahoo confessional continues as Reuters reports, somewhat stunningly that, Yahoo secretly built software to search all of its customers' incoming emails for US intel officials. Yahoo's reaction to this: we are "a law abiding company."



So you spy on law abiding citizens?

Yahoo Inc last year secretly built a custom software program to search all of its customers' incoming emails for specific information provided by U.S. intelligence officials, according to people familiar with the matter.

The company complied with a classified U.S. government directive, scanning hundreds of millions of Yahoo Mail accounts at the behest of the National Security Agency or FBI, said two former employees and a third person apprised of the events.

Some surveillance experts said this represents the first case to surface of a U.S. Internet company agreeing to a spy agency's demand by searching all arriving messages, as opposed to examining stored messages or scanning a small number of accounts in real time.

Mayer and other executives ultimately decided to comply with the directive last year rather than fight it, in part because they thought they would lose, said the people familiar with the matter.

Yahoo in 2007 had fought a FISA demand that it conduct searches on specific email accounts without a court-approved warrant. Details of the case remain sealed, but a partially redacted published opinion showed Yahoo's challenge was unsuccessfu

zerohedge.com/news/2016-10-04/yahoo-admits-secretly-hacking-customer-accounts-us-intelligence