Overnight

Some will say risk back on as the weak yen has perhaps fueled investor risk appetite once again. A spike in crude oil prices also helped as production cuts were again in the discussion. The Shanghai Composite Index rallied 0.4% after a 1.5% upturn on Monday. The dollar was last up 0.3 percent against the yen at 103.90 yen, helping exporters.

One observer noted: "Crude prices in the U.S. jumped more than 3 percent after Russia said it was ready to join the Organization of the Petroleum Exporting Countries' (OPEC) output freeze deal, which was loosely agreed in September in a bid to cut the global supply overhang that has weighed on prices."

The Kospki was off -1.03%, the ASX 200 slightly up 0.08% and the Hang Send down -1.31%.  Spot gold prices were trading lower by 0.16 percent at $1,257.40 an ounce, after two consecutive sessions of gains, as the dollar strengthened on increased expectations of the Federal Reserve raising rates in December.
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Here's a report from Reuters:

TOKYO, Oct 11 Japan's Nikkei share average gained on Tuesday, led by mining stocks after oil prices jumped the previous day and a weak yen lifted risk appetite.

The Nikkei rose 1.0 percent to 17,020.62 in midmorning trade, while the broader Topix rose 0.9 percent to hit a four-month high of 1,362.33.

Investors returned from a long weekend to find overseas developments had benefited Japanese stocks while markets in Japan were closed on Monday for a national holiday.

Intensely scrutinised U.S. jobs data on Friday showed that U.S. employment growth eased for the third straight month in September and the jobless rate rose, but the slowdown was not expected to prevent the Federal Reserve from raising interest rates later this year.

Meanwhile, after the second U.S. presidential debate on Monday, most investors saw Democrat Hillary Clinton holding a lead in the U.S. presidential election over Republican rival Donald Trump.

"Nothing has been decided yet... we are not 100 percent sure on a U.S. rate hike or a Clinton presidency. But the outcomes of the key events over the weekend were seen helping the Japanese market," said Takuya Takahashi, a strategist at Daiwa Securities.

The Tipping Point

We've been writing a longtime about this Ivy League pedigree dominance--Congress, Wall Street, Academia. It's probably at least 200 years old. We think Shiller, as the response below points out, has this exactly backwards. This has been too long in the wind. We see more whistling by the elites past the midnight cemetery than anytime in our life.

We don't know know Schiller's whole background but we're willing to bet it's the longest yard from the mean streets of America where we grew up, a place where some would pluck your eye out and eat it for a grape if you stared at them wrong. That's why we find all the name calling and the premeditated epithets healthy. This is one of Gladwell's tipping points and it's probably not going to go down pretty. They usually don't. But that's okay too. We've been here before.



"The Coming Anti-National Revolution" by Robert J. Shiller:

For the past several centuries, the world has experienced a sequence of intellectual revolutions against oppression of one sort or another. These revolutions operate in the minds of humans and are spread – eventually to most of the world – not by war (which tends to involve multiple causes), but by language and communications technology. Ultimately, the ideas they advance – unlike the causes of war – become noncontroversial.
I think the next such revolution, likely sometime in the twenty-first century, will challenge the economic implications of the nation-state. It will focus on the injustice that follows from the fact that, entirely by chance, some are born in poor countries and others in rich countries. As more people work for multinational firms and meet and get to know more people from other countries, our sense of justice is being affected.

Indeed a likely big wave in the comin' decades.  Any further thoughts?

Rocky Humbert writes: 

.dailyspeculations.com/wordpress/?p=11303#respond

Shiller may have gotten this 100% backwards. If my perception of the global and popular mood is correct, then the pendulum may be about to start moving in the opposite direction. The Brexit/Trump meme is the instant when the acceleration of the globalist/intellectual elite/HYP is changing sign. (Stefan can elaborate–but I am unaware of any of these so-called revolutions being wholesale wealth transfers…without bullets flying.)
As a footnote, I am surprised that anyone claims to be surprised by the most recent lewd Trump video–it is entirely consistent with the persona that he projects. In my 30 years on Wall Street, I've heard and seen much much worse. Similarly, the Wiki document dump on Hillary's speeches confirmed the perceptions that her detractors have.
Lastly, someone posted an article about the wisdom of crowds and confidence. And that confident observers (as a group) make the best predictions. I have gone on record and remain confident that Trump will be the next president. I do not share Mark Cuban's belief that this will result in a stock market "crash" — but on the edges, none of this is particularly bullish. The most interesting question for me is whether when Trump wins and if the markets get turbulent, will the Fed blink in December? Given the number of HYP's there, and their collective beliefs…
Back to Shiller. The UN will be the first globalist institution to suffer Trumpture. (Trumpture is the rupture of a bubble by Trump. If the NY Post and Drudge pick this up, I will be most pleased.)
HYP=harvard/yale/princeton. For full disclosure, I'm a Yalie.

Welcome To The Global Party

 
The reaction to last night's debate came as expected.

All this hand wringing about how we got here. The elitists know exactly how we got here. The only thing disgraceful about the debate was former news guru Bob Schieffer's comments post-debate labeling it "disgraceful."

Schiffer is less relevant now than when he was shilling of the his elite government buddies. Then there's the writers with the double and triple chins who concoct the Wall Street Journal's Opinion page. These Neanderthals are fretting about someone looking presidential when the globe is about a half a nuclear block away from WW III.

Not to mention Hillary's potty mouth: "Get that fuckin' dog out of here!" Schieffer disdained those women with a "supposed" connection to Hillary's husband. Apparently, Schieffer doesn't count too well in his old age. One of those ladies received an $800,000 connection from the presidential looking former president. You can see Willy Boy clearly recalls. One of Willy Boy's boyhood idols reportedly was JFK. Now we know why.

                                                

The Journal writers try to justify their point with another half truth--"Trump's Last Stand." Not everyone knows about Billy Boy's cigar thrusting escapades. A whole new generation of voters since has hit the scene. Then the writer pens this gem. "Democrats know how to do opposition research, and Mr. Trump's past is an opponent's field of dreams." Wow! Such brilliance. That must mean Hillary's nearly 30-year abortion is cleaner than a big cat's tooth.

What's pissing these political spelunkers off is Trump didn't come crawling to them asking for their archaic advice. Enter Paul Ryan, a guy who is semi-amicable at being dull. He's a guy who's likely swallowed too much Wisconsin cedar growing up. He resembles someone with a bad case of  decision constipation which makes him a perfect candidate for what he does--nothing.

We'll bypass the list of other so-called defectors the Journal spends so much ink chewing their crude over except to say, Arizona Senator McCain had threatened to write-in the name "of some good conservative Republican." That is, if John boy could ever identify one. Asking him to define conservative is like asking a blind man to describe the head of a camel.

These are nasty times and there little to be gained trying to gloss over it. The Grand Old bromide-laden party the Wall Street Journal crowd longs for is crusty, obsolete and bankrupt. And the criminal-infested Democrat party is even worse. Just as bankrupt and boring.

And, yes, people are starting to get it. It's head-rolling time and this election, whoever the hand picked winner, is just the start. Welcome to the global party.

The Corrupt EU Watering Hole

Anyone who differs with the traditional status quo is deserving of a name, an epithet like the current favorite from MSM and their fellow elitists--populist. Or as another academic whinny voice in a pathetic FT article today, "Voters sour on traditional economic policy," labeled it: "populists authoritarianism."

Rolling out the three trite, favorite villains of these folks, money laundering, regulatory arbitrage and tax avoidance and evasion, former U.S. Treasury Secretary and now back safely ensconced at his beloved Harvard, Lawrence Summers regurgitates of his pet topic the "dark side of capital mobility." This is code for a cashless society. This is what he implies is hurting the now nearly extinct and disgruntled American and global middle class, a group he and his fellow travelers, most of  whom most of the time reside in dank, dark econometric cellars, worked long and hard to destroy.

But let's just take this phony money laundering meme, a real smokescreen. It has about as much impact on middle class peoples' daily lives--supposedly one of the vital missing ingredients in Summers' view to peace and world harmony--as a male flea crawling up the hind leg of a 2,500 pound female elephant with rough sex on its mind.

The tip off here is anytime anyone disagrees with the status quo, their point of view is baseless and deserving of what is calculated and intended as a pejorative. Now that the uproar about global inequality is getting more uproarious these elite snobs want to discuss tossing a few more of their covet crumbs to the masses.

Without being threatened--and you now know by their massive display of concern, they are--does anybody really believe they were on the voluntary brink of a giant show of largess. Here's a piece from one of the current sagas making the rounds today, the mess at Deutsche Bank. Elitists like Summers would have you believe that all of this behind the scenes favoritism was going on unbeknownst to his crew. Recall Magic Mario's "Whatever it takes" was, what many failed to realize at the time, an all-inclusive term, as it always has been with these bureaucrats, politicians and money lords.

Here's a quote from the same issue of FT.

Deutsche Bank was given special treatment in the summer EU stress tests that promised to restore faith in Europe’s banks by assessing all of their finances in the same way.
Germany’s biggest lender, which has seen its share price fall as much as 22 per cent in recent weeks on fears that it could face a US fine of up to $14bn, has been using the results of the July stress tests as evidence of its healthy finances.

But the Financial Times has learnt that Deutsche’s result was boosted by a special concession agreed by its supervisor, the European Central Bank.

Deutsche’s results included the $4bn proceeds from selling its stake in Chinese lender Hua Xia even though the deal had not been done by the end of 2015, the official cut-off point for transactions to be included. The Hua Xia sale was agreed in December 2015. It has still not been completed and now faces a delay after missing a regulatory deadline last month, though the bank is still confident of completion this year.

ft.com/topics/organisations/Deutsche_Bank_AG

And just for the record the French also received special treatment. So here you have the two largest economies in the EU sucking up to the public trough to help repair their financial misgivings.. And now Matteo Renzi,  rightfully so, wants his turn at the watering hole. And here is the classic case of elitism, EU-style. Brussels' bullies are saying, "But, Matteo, be reasonable. You're too far down the pecking order!"

Now you might just get a glimpse why Trump and Trumpism, as these epithet-loving demagogues, is such a threat to the status quo. No, they're not just a bunch of angry, uneducated, disenfranchised blue collar white Luddites. But even if they were, why is it other seemingly cohesive disenchanted groups in so-called democracies (See Germany!) can express their concerns,but not white people. We're waiting to hear from you, Angela.

There's only one reason: The fix is in. And it  has been for a long time.

Up, Up And Away

This is what real bureaucratic screw-ups do--screw it up and then suddenly announce there's nothing more they can further screw up and pass the buck. From Fed Chair Janet Yellen to other Fed apologists like Mohammed El-Erian and his drivel in his last book, The Only Game In Town, full of self-praise and singing the accolades of Lady Yellen and the Lords of  Eccles, it's bailout time.

El-Erian misnamed his tome. It should've been titled, The Only Shame In Town.

Get your hat. Blaming Brexit as Marvelous Magic Mario and others are now pushing is just sleight of the hand gestures. Public debt is going up, up and away.
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 Central banks' repeated warnings that there are limits to what they can do to bolster the sputtering world economy could suggest they are about to pull back and pass the baton to governments. But a steady flow of research and a new tone in the debate among policymakers and advisers points in a different direction: rather than retreat, central banks are preparing for the day they may need to do more, even at the risk of antagonizing politicians who argue they already have too much power.
 

The shift can be seen in the acknowledgment by Federal Reserve policymakers that their massive $4 trillion balance sheet will not shrink anytime soon, or that asset buying may become a "recurrent" tool of future monetary policy. It can be seen in the comments of Bank of England officials who talk of crisis-fighting tools as now semi-permanent fixtures, or in the Bank of Japan developing a new monetary policy framework, in this case targeting long-term market interest rates.

Driving those developments is an emerging consensus among policymakers who now acknowledge that the global financial crisis has led to a fundamental shift toward low inflation, tepid growth, lagging productivity and interest rates stuck near zero. "We could be stuck in a new longer-run equilibrium characterized by sluggish growth and recurrent reliance on unconventional monetary policy," Fed Vice Chair Stanley Fischer said last wee. For years, Federal reserve and other policymakers have discounted such a scenario, arguing that temporary factors were slowing the recovery and plotting a return to conventional pre-crisis policies.

Over the past months, though, that optimism has given way to an admission that such a return is increasingly elusive. Interest rates are set to stay low far longer than thought only a year ago and jumbo balance sheets accumulated through crisis-era asset purchases are now cast as a possibly permanent tool.

reuters.com/article/us-imf-g20-centralbanks-analysis-

At the annual Jackson Hole Fed conference in August the discussion had shifted from the mechanics and timing of "normalization," to how and whether to expand the central bank footprint yet again

Policymakers still keep reminding governments they should help boost productivity and growth with reforms and, where possible, spending on infrastructure.

The Polling Business

Everyone it seems is in the polling business, so why not us. We can't do any worse.



It's s simple yes or no vote.

Guilty SOB or not?

Yes                  No

Overnight

A holiday in Tokyo held down early trading overnight and the MSCI index of Asian-Pacific shares outside Japan rose only 0.1% with the ASX 200 up 0.2%, the Kospi traded unchanged after being  negative early.

Mainland Chinese share after a week holiday rallied a bit with the Shanghai  Composite up 0.78% and the Shenzhen  Composite higher 0.89%. Other markets closed for holidays were Hong Kong and Taiwan. The dollar index, which measures the greenback against a basket of currencies, was trading at 96.522, up from levels below 95.600 early last week.


Reuters reported: Sterling was steadier around $1.2430 GBP=D4 after its flash crash last Friday, though dealers braced for more volatility amid concerns about a "hard" Brexit.
A survey out on Monday showed key measures of UK business investment and turnover confidence hit four-year lows in the third quarter.

"The uncertainty of leaving the single market is causing enormous concern over the future of the UK economy and the funding of its twin deficits," said analysts at ANZ.
"Moreover, the rhetoric from the UK government on immigration and EU legislation has hardened of late at the same time as the EU's position is also hardening."

China's central bank set the value of its yuan CNY=PBOC at the lowest since September 2010 as markets there returned from a week-long holiday.

If you're trading or investing in the UK area you need to be aware that the scaremongers will be piling on the negative news abut Brexit and the UK Prime Minister Theresa May at every opportunity.This is a form of anger and get even, but the worse it gets the more it will create investing opportunities. The UK is not going anywhere. We think the pound will be one of the safer currencies to buy. U.S. gold futures rose over one percent to $1,266.10 an ounce. Last week spot gold ended 4.5% lower, the biggests weekly decline since late 2015.

A good signs when you see editorial and opinion writers at scribes like the WSJ and the Financial times complaining about politics over economics and the stricken  pound. They want to make people believe there is a difference between the two. There isn't. Brexit passed because of not in spite of politics and economic. Having a say in your ability to determine your freedom and your future is pure economics and politics.


More and more global inhabitants are finding out the hard way they won't find either in Brussels or Washington.

What Could Be More Appropriate

What could be more appropriate before tonight's second presidential debate. See the list of names.
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Internal strategy documents and emails among Clinton staffers shed light on friendly and highly useful relationships between the campaign and various members of the U.S. media, as well as the campaign’s strategies for manipulating those relationships.

The emails were provided to The Intercept by the source identifying himself as Guccifer 2.0, who was reportedly responsible for prior significant hacks, including one that targeted the Democratic National Committee and resulted in the resignations of its top four officials. On Friday, Obama administration officials claimed that Russia’s “senior-most officials” were responsible for that hack and others, although they provided no evidence for that assertion.

As these internal documents demonstrate, a central component of the Clinton campaign strategy is ensuring that journalists they believe are favorable to Clinton are tasked to report the stories the campaign wants circulated.

At times, Clinton’s campaign staff not only internally drafted the stories they wanted published but even specified what should be quoted “on background” and what should be described as “on the record.”
theintercept.com/2016/10/09/exclusive-new-email-leak-reveals-clinton-campaigns-cozy-press-relationship/

Who Sold The Gold?

Who sold the gold?

That's a question yet to be answered. This wasn't physical gold. It was paper contracts. How many contracts? Enough to equal about 1/3 of the whole world's annual production. This raises one of the what did they know or think they knew and when did they know it?

 Rumors were afloat that the CEO of Deutsche Bank was on his way to  the U.S. to concluded a deal on the fine the Department of Justice was trying to steal from the bank for alleged selling of inappropriate mortgages a few years back. The original holdup price was announced at $14 billion, but those are just opening bids to establish seriousness and guidelines.
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You couldn’t really miss THE event of this week, as the gold price nosedived on Tuesday, taking out the psychological support level at $1300/oz, but also the technical support levels around the $1280 mark. Subsequently, towards the end of the week, the powers that be also tried to take out the perhaps stronger support level located at the 200 moving average, as you can see on the next chart.

It’s pretty clear something ‘fishy’ was going on, as Andrew Maguire, a well-known precious metals trader immediately confirmed the total volume of the crash was very suspicious as in excess of 1,000 tonnes of paper contracts were dumped on the market in a matter of hours. Yes, that’s approximately 1/3rd of the entire world’s annual gold production from mining activities, so yes, it’s obvious this isn’t normal trading behaviour.

What makes the drop even more interesting is that it happened on a Tuesday, right after the bank holiday in Germany (the financial markets were closed in Germany on Monday). Could this indicate certain market parties were expecting to see a solution for troubled Deutsche Bank during the long weekend? Nothing materialized even though Deutsche Bank will very likely need to raise more capital, and rumors about a semi-bailout by other German large companies started to circulate later in the week. So whacking down gold might indeed have been some sort of pre-lude and part of the global idea of a monetary reset or a bailout of Deutsche Bank. Because let’s be fair, it’s just ridiculous to see 1,000 tonnes being dumped on the open market on a day when the Chinese markets (and the Shanghai Gold Exchange) were closed…

And indeed, our hunch was confirmed when Qatar announced on Friday it was considering taking a massive equity stake in Deutsche Bank, so this adds credibility as to why the gold price was pushed down on Tuesday, rather than on Monday. 

But then the main question obviously remains, who sold? Because if one thing is clear, the futures market crash  was NOT caused by sellers of physical gold. We pulled up the data from the SPDR Gold Trust (GLD), and between Monday and Thursday’s closing bell, the total amount of gold owned by the Gold Trust fell by just 10,000 ounces of gold. That’s 0.3 tonnes of gold, and just 0.03% of what has been sold on Tuesday in the paper markets. But the biggest surprise occurred on Friday when during an off-day in excess of 360,000 ounces were added to the inventory. 

Once again, if this doesn’t smell fishy, we have no idea what would! 

We are pretty sure the Chinese and the Russians will be really grateful for this opportunity to add more physical gold at a multi-month low price. Let’s forget about the Chinese for a minute and zoom in on the Russian stance. As you can see on the data of the International Monetary Fund (IMF), Russia has continued to purchase more physical gold to its balance sheet every single month this year.

 If it isn't normal trading behavior, like the recent chaos in the UK pound, what is it? Read more here and you might find out, but you might not find out just yet.

.zerohedge.com/news/2016-10-09/so-who-sold-gold-week

Barbecue Ribs And Pussy

Given the tapes we've seen apparently the current occupant of the White House likes to dip his wick  once in awhile and has for sometime.

And apparently another former White House occupant liked--and still does--to dip his wick. We call Colin Powell to the witness stand. And we don't know where Harvard presidential historian Delores Kearns Goodwin is when she's needed, but history suggests many former White House dwellers liked the activity. Both in and out of wedlock.

There are many ways to degrade women as we've now seen with the "barbecue and pussy" quote. Nothing racial here, just fact. Most men we have heard about like both. One supposes that's a PC crime now too.Just maybe Mr. OB is not that strange after all. What Mr. OB failed to tell us which came first, the barbecue ribs or the pussy. With Billy Boy we think we already know the answer. FDR had a paramour. Eisenhower reportedly had one too. JFK a couple dozen. They're still counting on Billy Boy.

So the Trump outrage is orchestrated to the maximum. And the reasons are as obvious as Hillary's lies. We said before this is healthy. Americans have been hung up about openly discussing sex for years. Instead of all this opprobrium we should be shouting three cheers for a great campaign. The only people objecting are the NFL.