Commodity Futures Trading Commission

The grind higher in equities, and tighter in credit, continues as markets brush aside concerns about a December taper for the time being. Overnight futures levitation has pushed the Fed balance sheet driven record high S&P even higher, despite as Deutsche Bank points out, the fact that we had three Fed speakers advocate or talk up the possibility of a December taper, including the St Louis Fed’s James Bullard who is viewed as a bit of a bellwether for the FOMC. Bullard said the probability of a taper had risen in light of the strengthening of job growth in recent months. Indeed, he noted that the best move for the Fed could be a small December taper given the improving jobs data but below-target inflation readings. The Fed could then pause further tapering should inflation not return toward target during the first half of 2014.  Looking at today’s calendar, the focus will be on US JOLTs job openings - a report which Yellen has previously highlighted as an important supplement to more traditional labour market indicators. US small business optimism and wholesale inventories are the other major data releases today. As mentioned above, US financial regulators are due to announce Volcker rules at some point today although as we just reported, the CFTC's meeting on Volcker was just cancelled due to inclement weather.

The FSB's first chairman was Mario Draghi, current President of the European Central Bank, while its current chairman is Mark Carney, Governor of the Bank of England. The inclusion of Financial Market Infrastructures means that large parts of the global financial system is susceptible to bail-in and could potentially be bailed-in including exchange traded funds.

The video covers the race to debase and the manipulation of precious metal prices: "They can mess around with the price all they want, ultimately the price of everything in the long term will be dictated by supply and demand, particulary for a physical commodity like gold".

• JPMorgan $13 Billion Mortgage Deal Seen as Lawsuit Shield (BBG)
• J.P. Morgan Is Haunted by a 2006 Decision on Mortgages (WSJ)
• World powers, Iran in new attempt to reach nuclear deal (Reuters)
• Keystone Foes Seek to Thwart Oil Sands Exports by Rail (BBG) - mostly Warren Buffet?
• How Would Fed Deal With Debt Ceiling Crisis? Look to Minutes for Clues  (Hilsenrath)
• Anything to prevent the loss of prop trading: 'Volcker Rule' Faces New Hurdles (WSJ)
• BOE Sees Case for Keeping Record-Low Rate Beyond 7% Jobless (BBG)
• Obama Backs Piecemeal Immigration Overhaul (WSJ)
• Abenomics Seen Cutting Japan Bad-Loan Costs to 2006 Low (BBG)

Bitcoin has increased more than tenfold since the beginning of 2013. One of the reasons for the incredible surge is that bitcoin is a freely traded market and not subject to rigging or price manipulation by banks or government. Physical Gold, either in your possession or in allocated accounts, remains a far safer alternative both to bitcoin, to digital gold platforms and to paper and electronic currencies in what is still a vulnerable banking system. 

The CFTC has won a consent order against MF Global requiring it to pay $1.212 billion in restitution to customers and a further $100 million civil penalty:

• *MF GLOBAL TO PAY $1.2 BLN RESTITUTION, $100M PENALTY
• *CFTC:PENALTY TO BE PAID AFTER MF FULLY PAYS CUSTOMERS/CREDITORS
• *CFTC:LITIGATION CONTINUES VS CORZINE,O'BRIEN,MF GLOBAL HOLDINGS
• *CFTC: MF GLOBAL ADMITS TO ALLEGATIONS OF LIABILITY IN ORDER

The big question is - of course - where is the money coming from?

• Desperate Philippine typhoon survivors loot, dig up water pipes (Reuters)
• Fading Japanese market momentum frustrates investors (FT)
• China's meager aid to the Philippines could dent its image (Reuters)
• Headline du jour: Granted 'decisive' role, Chinese markets decide to slide (Reuters)
• Central Banks Risk Asset Bubbles in Battle With Deflation Danger (BBG)
• Navy Ship Plan Faces Pentagon Budget Cutters (WSJ)
• Investors pitch to take over much of Fannie and Freddie (FT)
• To expand Khamenei’s grip on the economy, Iran stretched its laws (Reuters)
• Short sellers bet that gunmaker shares are no long shot (FT)
• Deflation threat in Europe may prompt investment rethink (Reuters)

While the public's attention has been focused recently on revelations involving currency manipulation by all the same banks best known until recently for dispensing Bollinger when they got a Libor end of day print from their criminal cartel precisely where they wanted it (for an amusing take, read Matt Taibbi's latest), the truth is that manipulation of FX and Libor is old news. Time to move on to bigger and better markets, such as physical commodities, in this case crude, as well as Interest Rate swaps. And, best of all, the us of our favorite manipulation term of all: "banging the close."

• Christie Sets Himself Up for Run in 2016 (WSJ)
• De Blasio Elected Next New York City Mayor in Landslide (WSJ)
• Hilsenrath: Fed Study: Rate Peg Off Mark (WSJ)
• MF Global Customers Will Recover All They Lost (NYT) - amazing what happens when you look under the rug
• Virginia, Alabama Voter Choices Show Tea Party Declining (BBG)
• Explosions kill 1, injure 8 in north China city (Reuters)
• Toyota boosts full-year guidance as weak yen drives revenues (FT)
• Starbucks wants to recruit 10,000 vets, spouses to its ranks (Reuters)
• U.S. Economy Slack Justifies Stimulus, Top Fed Staff Papers Show (BBG)
• Israel set to become major gas exporter (FT)

We have long pointed out that silver is not an ‘investment’ per se rather it is a store of value and a form of financial insurance. Silver is to be bought for the long term - until it has to be sold due to a need to raise cash – indeed a permanent holding.

• FHFA Is Said to Seek at Least $6 Billion From BofA for MBS Sales (BBG)
• Record Pact Is on the Table, But J.P. Morgan Faces Fight (WSJ)
• Magnetar Goes Long Ohio Town While Shorting Its Tax Base (BBG)
• Mini-Wall Street' Rises in Hamptons (WSJ)
• Obama to call healthcare website glitches 'unacceptable' as fix sought (Reuters)
• Starbucks Charges Higher Prices in China, State Media Says (WSJ)
• Cruz Is Unapologetic as Republicans Criticize Shutdown (BBG)
• Berlusconi struggles to keep party united after revolt (Reuters)
• SAC Defections Accelerate as Cohen Approaches Settlement (BBG)

The U.S. is engaged in fiscal and monetary policies that are akin to a Banana Republic.

In addition to electronically creating out of nothing $85 billion every month to buy its own debt in the form of bonds, the U.S. is also borrowing more money than it is authorized to borrow, from itself again.

• Congress Vote Ends Impasse to Be Revisited in January (BBG); Congress Passes Debt, Budget Deal (WSJ)
• House GOP extracts no concessions (Politico)
• Washington becomes the biggest risk to the U.S. economy (Reuters)
• Debt Deal Seen Boosting U.S. Consumers as Holidays Approach (BBG) - only thing missing: disposable income
• Federal Employees Head Back to Work (WSJ)
• Regulator Suggested Shift for Dimon at J.P. Morgan Unit (WSJ)
• Twitter hires Google ad exec ahead of IPO (CNET)
• Teens can now post publicly, but posts are friends-only by default (WaPo)
• Germany Moves to Finalize Coalition Deal (WSJ)
• Draghi Turns Judge on EU Banks as ECB Studies Accounts (BBG)
• UK nuclear deal with China a ‘new dawn’ (FT)

His government has ramped up spending to ward off unrest, helping drive inflation to a 15-year high last year, and pushing Algerians into the currency and real estate markets as they seek to shield savings.

“To protect themselves against inflation, and therefore the devaluation of the dinar, Algerians are investing in property, gold and foreign currencies,” Abderrahmane Mebtoul, a professor of economics at the University of Algiers, said in an interview. 

• Troops Forage for Food While Golfers Play On in Shutdown (BBG)
• Police suspect dental hygienist Miriam Carey was behind the wheel of Capitol chase (WaPo)
• Italian Senate committee starts Berlusconi expulsion process (Reuters)
• Swiss Regulator Probing Banks Over Foreign-Exchange Manipulation (WSJ)
• GOP Begins Search for Broad Deal on Budget (WSJ)
• No Jobs Report Means Economists Chew on Football Instead of Data (BBG)
• U.S. default seems unthinkable but investors have options (Reuters)
• Citigroup fined $30 million after analyst sent report to SAC, others (Reuters)
• FBI Snags Silk Road Boss With Own Methods (BBG)
• Recession Warnings Found in Asset Price Falls (BBG)
• Bank of Japan warns of severe global impact from U.S. fiscal standoff (Reuters)