https://www.zerohedge.com/news/2018-09-26/kavanaughs-confirmation-odds-are-suddenly-surging-prediction-markets
The odds that Brett Kavanaugh will be confirmed to the Supreme Court are suddenly surging, one day ahead of a much anticipated hearing in which Washington, Wall Street and just about everyone else will tune in to hear the SCOTUS candidate and his accuser, Christine Blasey Ford, on Capitol Hill on Thursday.
After tumbling on Sunday to as low as 26 cents, shortly after the New Yorker reported that a second woman had stepped forward with an accusation of sexual misconduct, this time during his college years at Yale University, a “yes” contract now costs as much as 63 cents compared to 39 cents for a “no” bet as of 9 a.m. in New York.
What may have prompted the turnaround?
As we reported yesterday, the fate of Kavanaugh's nomination may rest on the decision made by Maine Senator Susan Collins who is seen as the key swing vote in the nomination process. Then overnight, Bloomberg reported that Collins doesn’t think President Donald Trump’s Supreme Court nominee would overturn the Roe v. Wade decision that legalized abortion because he said he respects precedent. Vanity Fair echoed this and said that "Susan Collins will bite the bullet and support Kavanaugh."
Collins, a Maine Republican who supports abortion rights, said her discussions with Kavanaugh persuaded her that he believes “the concept of precedent is rooted in Article III of the Constitution, and he clearly reveres our Constitution."
Still, Collins said she hasn’t decided whether she’ll vote in favor of confirming Kavanaugh to the court. She’s waiting to make a decision until after hearing testimony at a Thursday Senate Judiciary Committee hearing from a woman who accuses Kavanaugh of sexual assault during high school.
For now, however, at least the online betting market is confident that she will go with "yes", although we still have to see what surprise attorney Michael Avenatti will pull out of his hat, and whether that will meaningfully shift the nomination odds.
https://www.zerohedge.com/news/2018-09-26/wti-algos-confused-despite-surprise-crude-gasoline-builds
Yet another surprise crude build reported by API sent WTI lower overnight, and held below $72 ahead of DOE data (which was expected to show a build).
“Exports are up and I don’t think production is going anywhere - it’s going to be pretty locked-in at 11 million barrels a day,” which would likely lead to a crude draw, says Thomas Finlon, director of Energy Analytics Group.
Bloomberg Intelligence Senior Energy Analyst Vince Piazza notes that a generous dollop of bad news is good news for the crude market. U.S. sanctions on Iran, Venezuela's deteriorating economy and other potential geopolitical disruptions will limit supply. On the other hand, the trade spat between Washington and Beijing could slow economic growth and reduce demand, which joins robust domestic production and U.S. refinery maintenance season in providing ammunition for a more skeptical view on oil prices.
API
Crude +2.903mm (-1.5mm exp)
Cushing +260k (-150k exp)
Gasoline +949k
Distillates -944k
DOE
Crude +1.85mm (-1.5mm exp)
Cushing +461k (-150k exp)
Gasoline +1.53mm (+700k exp)
Distillates -2.24mm
However, confirming API, DOE reported a surprise 1.85mm barrel build (the first in six weeks) along with unexpectedly large inventory increases at Cushing and in Gasoline.
US Crude Production rose to a new record high…
WTI broke below $72 after API, and held below it heading into DOE, but the unexpected crude build sparked algo chaos as the machines just could not make their minds up…
https://www.zerohedge.com/news/2018-09-26/lindsay-graham-summarizes-kavanaugh-chaos-perfectly-if-accusation-enough-god-help
Lindsey Graham Summarizes The Kavanaugh Chaos: "If An Accusation Is Enough, God Help Us All"
Profile picture for user Tyler Durden
by Tyler Durden
Wed, 09/26/2018 - 10:29
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Sen. Lindsey Graham (R-SC) laid out his position on Judge Brett Kavanaugh on Tuesday, telling reporters that he isn't going to deny him a seat on the Supreme Court based on flimsy allegations, and that he is going to "apply the rule of law" as his standard.
What are they supposed to do, interview everyone in Maryland from the summer of 1982?
We're talking about appointing someone to be in charge of the rule of law. I'm going to adopt the rule of law as my standard. If this were a criminal allegation you would never get out of the batter's box, because you can't tell the accused where it happened and when it happened, and there's no corroboration outside the accusation itself. You couldn't sue in civil court for the same reason - you could not even get a warrant.
So I will respectfully listen to Dr. Ford, but here's the question for me and others; what is the standard? What is it going to be? Are you really innocent or guilty based on the accusation? Is there any presumption of innocence left in the confirmation process?
If the accusation is enough, God help us all. It's OK to challenge the accuser.
I will respectfully listen, but if there's nothing new, I am not going to deny him a promotion to the Supreme Court based on a 35-year-old accusation where all of the facts that we do know about seem to suggest it didn't happen the way it was described.
If this is enough to deny a person a seat on the Supreme Court who has otherwise lived a good life, then I don't know where this ends.
Watch:
On Sunday, Graham asked Fox News Sunday host Chris Wallace: "What am I supposed to do? Go ahead and ruin this guy's life based on an accusation?" adding: "I don't know when it happened, I don't know where it happened. And everybody named in regard to being there said it didn't happen. I'm just being honest. Unless there's something more, no I'm not going to ruin Judge Kavanaugh's life over this."
"But she should come forward, she should have her say. She will be respectfully treated," he added.
Graham repeatedly expressed doubt about the allegation during the interview Sunday based on the amount of time that has passed since the alleged assault and the lack of evidence.
"This accusation has to be looked at in terms of our legal system, Graham said.
"Everything I know about Judge Kavanaugh goes against this allegation," he continued. "I want to listen to Dr. Ford. I feel sorry for her. I think she's being used here." -USA Today
Graham also said he think that people are taking advantage of Ford:
Theoretical Basis of Fundamental Gold Price Calculation – Precious Metals Supply and Demand
September 25, 2018 | Author Keith Weiner
inShare
Speculators vs. Arbitrageurs
The price of gold rose six bucks, and the price of silver rose 26 cents last week. Before we look at the graphs, we want to address a reader question. This week, someone asked about how we calculate the Monetary Metals fundamental gold price.
The theoretical fundamental gold price (black line) vs. the market price for gold since late 2015. Worth noting: most of the time, the fundamental price is leading the market price; whenever the gap between the two prices was very large in the past, the market price would more often than not catch up with the fundamental price. Recent exceptions to this rule of thumb occurred in mid and late 2016, when market prices first rose and then fell and the fundamental price followed their lead, and again this year, when a big surge in the fundamental price failed to lead to a rally in market prices (however, on this occasion the fundamental price corrected quite sharply before an accelerated decline in market prices took hold). Since early July the gap between these two prices has gradually widened again and has become quite sizable. It remains to be seen whether the fundamental price will work as a leading indicator this time. As noted above, in the long term it tends to lead in most cases. [PT]
http://www.acting-man.com/?p=53485
Speculators vs. Arbitrageurs
The price of gold rose six bucks, and the price of silver rose 26 cents last week. Before we look at the graphs, we want to address a reader question. This week, someone asked about how we calculate the Monetary Metals fundamental gold price.
The theoretical fundamental gold price (black line) vs. the market price for gold since late 2015. Worth noting: most of the time, the fundamental price is leading the market price; whenever the gap between the two prices was very large in the past, the market price would more often than not catch up with the fundamental price. Recent exceptions to this rule of thumb occurred in mid and late 2016, when market prices first rose and then fell and the fundamental price followed their lead, and again this year, when a big surge in the fundamental price failed to lead to a rally in market prices (however, on this occasion the fundamental price corrected quite sharply before an accelerated decline in market prices took hold). Since early July the gap between these two prices has gradually widened again and has become quite sizable. It remains to be seen whether the fundamental price will work as a leading indicator this time. As noted above, in the long term it tends to lead in most cases. [PT]
This is the output of our model, estimating where the metal would be trading if not for speculators who can push the price around, using extreme leverage in the futures markets.
While the formula must remain a trade secret (and we may upgrade it in the next version of our data science platform), we are happy to discuss the theory. Every week, we show a graph of the gold basis as our picture of the fundamentals. What does this mean, and how is basis showing the fundamental situation?
The basis is the spread between the spot and futures price. It measured as the actionable trade — i.e., future(bid) – spot(ask), which is the profit that a bank or hedge fund could make. And it is expressed as an annualized percentage, so it is comparable to the interest rate or yield on other assets for the same duration.
This shows the fundamentals for a compelling, but counter-intuitive exercise in reasoning. Arbitrage connects the price of an ounce in the futures market with the price of an ounce in the spot market. They track very closely, and the difference between them — i.e., the basis — is usually small and pretty stable.
If we see the basis rising, we know that arbitrageurs are putting on more carry trades. Carry means buying physical gold at spot, selling it forward, and warehousing it in the meantime. The higher the basis, the more profitable it is to engage in this carry trade.
We don’t know how many carry trades are on, but we do know that if the marginal arbitrageur walked away yesterday when the basis was, say, 0.5%, then he may take it today if the basis is 0.6%. A rising basis indicates metal is moving into warehouses. A rising basis means that the marginal demand for metal is to carry it in the warehouse.
While there could be continued momentum, this is generally not a bullish sign. The basis is rising despite this arbitrage. We say “despite” because this arbitrage compresses the basis spread. If it is rising, it shows that speculators are buying faster than arbitrageurs are adding to their carry trades.
The former are bidding up the futures price, while the arbitrageurs are pulling the spot price up behind it. This metal will come out of the warehouses and back into the market at some point.
Alternatively, if the price of gold is rising and the basis is falling, then we can be sure that fewer carry trades (if any) are being put on. The rising price is driven by buyers of spot gold. If the warehouse-men are active, they may be selling spot and buying futures, i.e., closing out their carry trades.
Our model watches the action from all angles in order to calculate a neutral price. This is the price at which spot is not pulled up or pushed down by this arbitrage activity. It is not perfect; the calculation is in part art and in part science.
And of course, the market is always changing to boot. There are times when we can see a price move counter to the fundamentals, and in due course the price reverses back to where it was. It is often tempting to say “we told you so!”
But lest we put on our hubris t-shirts, there are other times when the market price moves and the fundamentals later catch up (or down) to market prices. It could be that the speculators were right and knew what was to come. Or it could be that holders of physical metal reacted to the change in prices by buying or selling.
Stay sharp!
Fundamental Developments
We will look at the supply and demand fundamentals of both metals. But, first, here is the chart of the prices of gold and silver.
Fundamental Developments
We will look at the supply and demand fundamentals of both metals. But, first, here is the chart of the prices of gold and silver.
Gold and silver priced in USD
Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio (see here for an explanation of bid and offer prices for the ratio). It turned and fell last week.
Gold-silver ratio
Here is the gold graph showing gold basis, co-basis and the price of the dollar in terms of gold.
Gold basis, co-basis and the USD priced in milligrams of gold
Not a big move in price, but the dollar is down (i.e., the price of gold, measured in rubber-band dollars is up) while the scarcity of gold is rising (i.e., the co-basis, the red line). At least it does in the December contract. The continuous gold basis chart shows a falling co-basis.
Last week the Monetary Metals Gold Fundamental Price fell from $1,373 to $1,358.
Now let’s look at silver.
Silver basis, co-basis and the USD priced in grams of silver
In silver, the price rose by a greater percentage, and the co-basis is falling even for the December contract. As Obi Wan might say, this is not the signal you’re looking for.
Nevertheless, the Monetary Metals Silver Fundamental Price did rise by 13 cents to $15.94. Let us see if it holds around the $16 level.
© 2018 Monetary Metals
Charts by: Monetary Metals
Chart and image captions by PT
Dr. Keith Weiner is the president of the Gold Standard Institute USA, and CEO of Monetary Metals. Keith is a leading authority in the areas of gold, money, and credit and has made important contributions to the development of trading techniques founded upon the analysis of bid-ask spreads. Keith is a sought after speaker and regularly writes on economics. He is an Objectivist, and has his PhD from the New Austrian School of Economics. He lives with his wife near Phoenix, Arizona.
Don't let them shit up the bread. Shit it up yourself.