International Monetary Fund

• Privately, Saudis tell oil market: get used to lower prices (Reuters)
• OPEC Members’ Rift Deepens Amid Falling Oil Prices (WSJ)
• Russia Spending $6 Billion Not Enough to Stop Ruble Rout on Oil (BBG)
• Deutsche clampdown on bad behaviour prompts exodus of traders (FT)
• Can't beat the spin: China trade data eases slowdown fears, more stimulus may still be needed (Reuters)
• China’s Exports Buoy Growth as IPhone Inflates Imports (BBG)
• Italy on Sale to Chinese Investors as Recession Bites (BBG)
• Hong Kong Protesters, Antiprotest Activists Clash (WSJ)
• Turkey Offers Military Bases to U.S.-Led Coalition (BBG) ... and the price is a small piece of post-Assad Syria
• Passenger With Flu-Like Symptoms Causes Ebola Scare At LAX (CBS)
• Boston patient deemed unlikely to have Ebola virus (Boston Globe)

• It wasn't Obama this time: Pakistani teen, Indian activist win Nobel Peace Prize (Reuters)
• Surging VIX Shakes Bulls as S&P 500 Charts Go Haywire (BBG)
• Global shares hit six-month low as growth worries mount (Reuters)
• Police, protesters clash in St. Louis ahead of weekend of rallies (Reuters)
• We're Sitting on 10 Billion Barrels of Oil! OK, Two (BBG)
• Spain seeks answers as seven more enter Ebola isolation (Reuters)
• Iran will sell its oil to Asia in November at the biggest discount (BBG)
• Redefining honeypot: U.S. DEA 'most interested' in U.S. investors in Canadian marijuana firms (Reuters)
• UKIP Wins First Commons District With Conservative Defector (BBG)
• Fake Ebola Patients Help Hospitals Prepare for Next Case (BBG)

President Obama: "Chance of Ebola outbreak in US 'extremely low'"

CDC Director Frieden: "I've been working in public health for 30 years... The only thing like this has been AIDS. And we have to work now so that this is not the world's next AIDS."

SOUTHCOM Commander: "The nightmare scenario, I think, is right around the corner."

Global economic growth remains weak and vulnerable and the global financial system remains very fragile. The ebola virus has the potential to be the straw that breaks the proverbial camel’s back. 

Stocks and commodities fell globally today due to concerns about the spread of Ebola and declining economic growth. Precious metals bounced from near multi month lows.

• Turkey says Syria town about to fall as Islamic State advances (Reuters)
• Only now? Growth worries grip stocks, oil (Reuters)
• Hong Kong Protest Leaders ‘Furious’ at Agenda for Talks (BBG)
• Earthquake Damages Thousands of Homes in Southern China (BBG)
• Keystone Be Darned: Canada Finds Oil Route Around Obama (BBG)
• Where Is North Korea's 31-Year-Old Leader? (BusinessWeek)
• Australia to Revise Employment Data (WSJ)
• Americans Living Longer as Fewer Die From Heart Disease, Cancer (BBG)
• A 401(k) Conundrum: Can You Make Cash Pile Last for Life?  (BBG)
• China Services Sector Slows in September (WSJ)

"The concept of an independent central bank clearly focused on price stability is neither old-fashioned nor outdated," exclaimed Bundesbank head Jens Weidmann. As The WSJ reports, he criticized the European Central Bank’s decision to buy private-sector bonds and signaled his fierce opposition to purchasing government bonds, underscoring his reluctance to back additional stimulus measures to combat weakness in the eurozone economy. "There is a risk of monetary policy, especially in the euro area, being held hostage by politics," Mr. Weidmann said, tying fiscal policies together through ECB bond purchases “is a dangerous path,”

It remains a very good time to diversify with the price of gold near multi year lows and under valued & stocks, bonds & property looking very toppy. It is very reminiscent of 2005-2007 period. Fail to diversify, prepare to fail ...

The Council on Foreign Relations may be concerned about the ramifications of China accumulating larger gold reserves than those that the U.S. has and the People’s Bank of China (PBOC) giving the yuan some form of gold backing. This would pose serious challenges to the dollar as global reserve currency and thus to U.S. hegemony.

We warned five weeks ago of the potential economic damage that the Ebola virus could do to West African economies, and now it appears The IMF, The World Bank, and the United Nations Food and Agricultural Organization have warned that Liberia and other West African economies, as WaPo reports, begun a frightening descent into economic hell. Fear that "that people would abandon the fields and factories, that food and fuel would become scarce and unaffordable, and that the government’s already meager capacity to help, along with the nation’s prospects for a better future, would be severely compromised" are no longer scenarios - they are real! Annual inflation rates have doubled, fuel sales are down 35%, Liberia's productivity is down 50-75%, and "micro-trade" financing is "completely depleted."

Reports of individuals snapping up near-record numbers of gold and silver coins are coming in from around the world. While individual buyers aren't the dominant players in precious metals, they do make a difference; and their renewed enthusiasm is matched by some recent national trends. There's no guarantee that this buying, encouraging as it seems, is anything more than a blip; but in the aggregate it does seem like a lot of buyers, old and new, are finding current prices to be attractive. That's how bottoms form and new bull markets begin.

The ongoing gold accumulation strategy by Russia, Kazakhstan and other ex Soviet states is a reserve diversification strategy. It may also be an attempt to undermine western markets and the vulnerable COMEX gold market in the U.S. It is likely a coordinated monetary policy, since Russia and Kazakhstan are members of the Eurasian Customs Union along with Belarus. 

In what is certainly the most impotant news of the day, the WSJ reports that China's long-serving central banker Zhou Xiaochuan, "the face of the Chinese economy to markets globally" is about to be given the boot. According to the WSJ, "Chinese leader Xi Jinping is considering replacing Mr. Zhou, say party officials, as part of a wider personnel reshuffle that also comes after internal battles over economic reforms." And while it is true that at the age of 66, Zhou has passed China's retirement age, and his departure will be spun as an old man spending more time with his family, the reality is that this is part of a major Chinese shift in the "balance of power between reformist and reactionary forces, with the momentum for reforms being eroded by the loss of growth momentum in the economy," said Eswar Prasad, a Cornell University China expert. Zhou's replacement: a career banker, who will do the bidding of, you guessed it, banks, which means "liquidity to the max."

With the Fed unleashing its bubble-watchers last week, on the heels of warnings from the Central Bankers' Central Bank (BIS), The IMF has decided it is time to chirp in. As Mises' David Howden notes, after promoting QE for years (see here and here), the IMF is finally coming to realize what has been apparent for years now to almost everyone who doesn’t work for the Fed or the IMF: that low interest rates encourage risky decisions.The IMF warns, "financial market indicators suggested investor bets funded with borrowed money looked 'excessive' and that markets could quickly deflate if there were surprises in U.S. monetary policy or the conflicts in Ukraine and the Middle East."

In a passionate speech to a joint meeting of Congress, Ukraine's President Petro Poroshenko dropped some tape-bombs:

• *POROSHENKO SAYS RUSSIA `HAS NOW INVADED UKRAINE'
• *POROSHENKO SAYS UKRAINE `URGENTLY' NEEDS LETHAL AID
• *POROSHENKO WARNS RUSSIANS WILL NEXT CROSS EUROPEAN BORDER

Supported by rounds of applause by US politicians, Poroshenko called for the US solidarity and to lead the offensive against Russia as they "fan the flames of war." Stocks dipped (but recovered) though PMs are higher still.

Never waste a good crisis. While we already knew a major reason for The West chasing into Africa was to leverage its relatively low credit levels as the last bastion of Keynesian-stimulus-hope in the world (estimated at between $5 and $10 trillion in secured debt, using its extensive untapped resources as first-lien collateral). And so it is little surprise that, as The WSJ reports, The International Monetary Fund on Thursday warned the West African Ebola epidemic requires a "large scale" global intervention to control a crisis that is ravaging economies in the region. All three major Ebola-suffering countries were already in bailout programs ($200mm loan in 2012 for Guinea, $100mm loan for Sierra Leone, and $80mm credit facility for Liberia) but with the "world community taking forever to respond," The IMF is happy to step in and secure some assets / lend over $100mm more to each nation to fill financing gaps.