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Monetary Lunacy At Work: IMF Puts 0.05% "Floor" Under SDRs

No negative rates for the putative Bancor... Keynes must surely be rotating in his grave. It turns out the IMF is not going to lend SDRs for less than nothing, thus breaking ranks with some well-known central banks out there. Instead, the IMF has decided to set a floor for its SDR interest rate to maintain its role as a profit center…it will be at what is nowadays a downright usurious height of 0.05%.



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A Glimpse Inside The FX "Cartel's" Chat Rooms

First it was Libor, then gold, then dark pools, now for those who want a glimpse into just how for years bank FX traders, whether belonging to "The Cartel" or "The Bandits Club" or otherwise, colluded on trades around the daily fix, breached fiduciary duty, and generally engaged in illegal rigging of the world's largest market by volume, Bloomberg News had received a transcript of the instant-messages by various FX traders currently being investgated for FX rigging. Here are some excerpts.



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Dow Is Up 110 Points, Visa Is 120 Of Them

Broad-based strength... as Pisani might say.



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Stocks Decouple From Bonds, Ramp To Pre-FOMC Levels

Now what?



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Russian Ruble Soars Over 5% (Swings Most Since 1998) On Intervention, Rate-Hike Rumors

Having made new record lows for 7 days in a row, various technical triggers, short squeezes, and rumors of Central Bank intervention prompted the Russian Ruble to rally over 5%  - the biggest swing since 1998 as chatter of a very aggressive (greater than 50bp) rate-hike at tomorrow's meeting.



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Why Did Q3 GDP Jump: Thank ISIS And The "War On Terror"

Never let a crisis, or war on terror, go to waste...



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Q3 GDP Rises 3.5% Despite Sharp Slowdown In Consumption, Pushed Higher By Government Spending Spree

Moments ago, the market was expecting Q3 GDP to print at 3.0%, and was pleasantly surprised when instead it got a 3.5% print, sending all risk assets kneejerk higher. However, a quick glance into the components revealed that things were certainly not as they seemed, with Personal Consumption in Q3 actually decreasing notably from Q2's 2.5%, to just 1.8% in Q3, below the 1.9% Expected, and accounting for 1.22% of the 3.54% Q3 GDP, the lowest Personal Consumption boost to GDP since Q2 2012 excluding the infamous Q1 winter vortex quarter. So what happened to boost Q2 GDP if that core driver, the US consumer was not there? Simple. Government stepped in, and stepped in hard, with its 0.83% boost to the bottom line GDP the highest since Q2 of 2009!



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Initial Jobless Claims Average Nears 40-Year Low

Initial claims rose a very modest 3k this week but it does little to change the overall picture of a jobs market where there is no hiring and therefore no firing. The 4-week moving average of initial claims has only been lower than this once in 40 years. Is it any wonder the FOMC is stuck with its hawkish perspective... Continuing claims rose 33k to 2.384 million, missing expectations by the most since August - but still hovering near cycle lows.



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Silver, Copper Slammed As Commodities Crumble Into US Open

Catalyst, who needs catalyst...continued dollar strength post-FOMC is weighing on the whole commodity complex but copper and silver seem to suffering most...



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Western Banks Find "In China, Nothing Is What It Appears To Be"

When Chinese property developer Agile Property Holdings Ltd. said this month that its chairman was taken into custody by authorities, the disclosure was a shock to Western banks that lent the company money, according to China Spectator as the fog of ever-rising asset values suddenly evaporates into the reality of an opaque real estate credit market slap them in the face. The simple fact is "it is very difficult to get a handle on the financials of a Chinese company," as a local investigative consulting firm warns "in China, nothing is what it appears to be."



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Don't Show The "Deflation Isn't Going To Happen" ECB Germany's Declining October Prices

Brandenburg CPI -0.3%, Previous 0.0%
Hesse CPI -0.2%, Previous 0.1%
Saxony CPI -0.2%, Previous 0.1%
Bavaria CPI -0.3%, Previous 0.1%



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Frontrunning: October 30

  • "Soaring consumer confidence" - How the Economy Is Stoking Voter Anger at Incumbent Governors (WSJ)
  • Euro zone deflation worries shield German Bunds from upbeat Fed (Reuters)
  • Greece’s Euro Dilemma Is Back as Minister Sees Volatility (BBG)
  • Ukraine gas supplies in doubt as Russia seeks EU payment deal (Reuters)
  • Sterling Lads Chats Show FX Traders Matching Fix Orders (BBG)
  • NATO Tracks Large-Scale Russia Air Activity in Europe (WSJ)
  • U.K. SFO Charges Ex-Tullett Prebon Broker in Libor-Rigging Probe (BBG)
  • Jerusalem on edge after shooting of rabbi (FT)
  • Israeli police kill Palestinian suspected of shooting far-right activist (Reuters)
  • Samsung seeks smartphone revamp to arrest profit slide (Reuters)


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Sudden Bout Of Risk-Offness Sends European Shares Sharply Lower, US Futures Not Happy

To summarize (even though with liquidity as non-existant as it is, this may be completely stale by the time we go to print in a minute or so), European shares erase gains, fall close to intraday lows following the Fed’s decision to end QE. Banks, basic resources sectors underperform, while health care, tech outperform. Companies including Shell, Barclays, Aviva, Volkswagen, Alcatel-Lucent, ASMI, Bayer released earnings. German unemployment unexpectedly declines. The Italian and U.K. markets are the worst-performing larger bourses, the Swiss the best. The euro is weaker against the dollar. Greek 10yr bond yields rise; German yields decline. Commodities decline, with nickel, silver underperforming and wheat outperforming. U.S. jobless claims, GDP, personal consumption, core PCE due later.



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Alan Greenspan: QE Failed To Help The Economy, The Unwind Will Be Painful, "Buy Gold"

"Gold is a good place to put money these days given its value as a currency outside of the policies conducted by governments." ... "I don’t think it’s possible" for the Fed to end its easy-money policies in a trouble-free manner. ... "Effective demand is dead in the water" and the effort to boost it via bond buying "has not worked.



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20-Year CBS News Veteran Details Massive Censorship And Propaganda In Mainstream Media

"Reporters on the ground aren’t necessarily ideological, Attkisson says, but the major network news decisions get made by a handful of New York execs who read the same papers and think the same thoughts. Often they dream up stories beforehand and turn the reporters into 'casting agents,' told 'we need to find someone who will say...' that a given policy is good or bad. “We’re asked to create a reality that fits their New York image of what they believe,"



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