Happy Birthday Lehman Bankruptcy: Silver +71%, Gold +61%, S&P +58%

Three charts... "The West is done, it's over! We screwed it all up. Do you want your great-grandchildren speaking Chinese?"

Market Performance (from the close before Lehman BK) - Silver +71%, Gold +61%, S&P +58%

Federal Reserve Balance Sheet - Plus $3.5 Trillion

And The Recovery? From 62% of the nation employed to less than 59%...

India gold imports rocket 176%

Long the top importer of gold, India fell behind China in 2013.

The decline in gold consumption came after bullion import duties were pushed up tenfold – from 1% at the start of 2012 to 10% – and other rules such as mandatory re-export of 20% of imports, transaction taxes and even curbs on ETF buying stymied India's gold industry.

Business-friendly prime minister Narendra Modi's sweeping victory has raised hopes – since dashed – of relief for the gold industry that employs more than 3 million traders and shopworkers.

Despite most of the curbs on gold imports still in place, official trade data released on Monday shows a 176% rise in gold imports from $739 million to $2 billion during the month of August.

Bloomberg quotes Shubhada Rao, an economist at Yes Bank in Mumbai as saying the big jump should not set off alarm bells over the country's balance of payments:

"We can manage with monthly gold imports of about $2 billion and the jump in the August number is largely due to last year’s low base after a sudden clamp down. The jump may look alarming, but there is no reason for panic."

July, August and September are typically gold's strongest performing months as buying from Asia increases – particularly due to upcoming festivals and wedding season in India.

Despite the huge August import numbers demand – as evidenced by premiums asked by gold traders in India above the London price – does not appear as frenzied as in 2013.

Jewellers and traders are now asking for $5 an ounce over the London price, that's down from a whopping $170 an ounce a year ago when the country's import restrictions really began to bite.

LME copper near 3 month low on China growth jitters

 London copper slipped towards three-month lows on Monday after growth at China's factories stumbled to its weakest in nearly six years in August, fueling concerns over its metals demand.

As well as weakening growth in China's factories, growth in other key sectors also cooled, raising fears the world's second-largest economy may be at risk of a sharp slowdown unless Beijing takes fresh stimulus measures.

"It's going to be a messy day I think," said commodity analyst Daniel Hynes of ANZ in Sydney.

"I suspect the European and U.S. investors will probably take that data a little worse than those in Asia. Their optimism has been quite fragile over the past few weeks, so this will result in a few selling out pretty quick," he added.

Three-month copper on the London Metal Exchange slipped by 0.7 percent to $6,793.75 a tonne by 0146 GMT after closing flat in the previous session.

It earlier fell as far as $6,780.75, towards support at $6,734 a tonne which was the low from Sept. 11 and the weakest since June 20.

The most-traded November copper contract on the Shanghai Futures Exchange fell 0.4 percent to 48,230 yuan ($7,856) a tonne having earlier hit its weakest since June 23.

Losses were cushioned in Asian hours as traders raised bets that China's central bankers will embark on more stimulus to buttress the economy against a property led slowdown.

But further headwinds for commodities were coming from expectations that the U.S. may hike interest rates sooner than previously thought given a string of improving economic signals.

U.S. retail sales rose broadly in August and consumer sentiment hit a 14-month high in September, supporting expectations for sturdy economic growth in the third quarter.

BNP Paribas has shifted its expectations for the first U.S. rate rise to the second quarter of 2015 from the third quarter.

The expectations have weighed on commodities prices because industry will have to pay higher costs to obtain capital and because a stronger dollar makes commodities more expensive for holders of other currencies.

Investors have turned bearish copper. Hedge funds and money managers switched copper into a net short position for the first time since April, the Commodity Futures Trading Commission said on Friday.

Across other metals, more refined zinc is likely to be shipped from bonded warehouses in China to warehouses approved by the LME in Asia in the fourth quarter as tight credit crimps domestic demand, traders said, which is likely to temper a rally in LME zinc.

Three month zinc slipped by 0.2 percent to 2272.25 a tonne but is still up by more than 10 percent this year.

Weak Chinese demand may push zinc stocks to LME warehouses

 

More refined zinc is likely to be shipped from bonded warehouses in China to warehouses approved by the London Metal Exchange in Asia in the fourth quarter as tight credit crimps domestic demand at a time of increased imports, traders said.

 

Higher shipments from China, the world's top consumer and producer of refined zinc, to LME warehouses in Asia could cap LME zinc prices , which have risen more than 10 percent this year.

 

Chinese importers had contracted more refined zinc for term shipments for delivery in 2014 and the bulk was set to be used as collateral for loans, traders said.

 

But tight credit in China has slowed domestic demand this year, weighing on Chinese prices, and traders said that had forced importers to store the metal in bonded warehouses, mostly in Shanghai and the southern province of Guangdong.

 

"If importers are not able to sell the stocks into the domestic market by October ... they may ship to the LME warehouses (in Asia)," said a manager at Shanghai-based firm, which imported zinc for its own consumption and trading.

 

The firm estimated there was more than 100,000 tonnes of refined zinc in bonded warehouses in Shanghai currently, said the manager, who declined to be named because he was not authorised to talk to the media.

 

China's refined zinc imports surged 39 percent to 421,130 tonnes in the first seven months of the year. 

 

Some bonded zinc stocks in Guangdong that have been used in financing deals with foreign banks have already been moved to LME warehouses in Asia after an alleged metals financing scam came to light in early June, traders said.

 

The relocation was requested by foreign banks to secure the metal, even though it was alumina, aluminium and copper stocks in Qingdao port that were involved in the financing scam, they said.

 

A trader who works for an international trading firm said the company would move 1,000 tonnes of bonded zinc stocks from Guangdong to LME warehouses in Malaysia and Singapore in coming weeks.

 

Traders said Chinese banks had been willing to give letters of credit for zinc imports even after the scandal at Qingdao port, although they had tightened checks on the stocks.

"World War III May Have Already Begun", Pope Francis Warns

While we doubt the pope is much of a trader, based on his latest comments, speaking during a visit to Italy's largest military cemetery, where he was commemorating the centenary of World War I and where he said that a "piecemeal" World War III may have already begun, we assume he too would join the confusion of the BIS and every other carbon-based life form, wondering how it is possible that risk assets are at all time highs which the world is not only teetering on the edge of a new global conflict but may have already in fact entered it. Oh wait, the central banks, never mind.

But back to the pope. From BBC:

A "piecemeal" World War III may have already begun with the current spate of crimes, massacres and destruction, Pope Francis has warned.

"War is madness," the Pope said at a memorial to 100,000 Italian soldiers at Redipuglia cemetery near Slovenia. The Argentine Pope has often condemned the idea of war in God's name.

Only last month, Pope Francis said the international community would be justified in using force to stop what he called "unjust aggression" by Islamic State militants, who have killed or displaced thousands of people in Iraq and Syria, including many Christians, the BBC's David Willey reports.

In Saturday's homily, standing at the altar beneath Italy's fascist-era Redipuglia memorial - where 100,000 Italian soldiers killed during WWI are buried, 60,000 of them unnamed, the Pope paid tribute to the victims of all wars.

"Humanity needs to weep, and this is the time to weep," he said. "Even today, after the second failure of another world war, perhaps one can speak of a third war, one fought piecemeal, with crimes, massacres, destruction," he said.

And don't forget S&P500 at all time highs. Because the New Normal, where apparently world war news is the best imaginable news for risk assets.

But while the Pope may be pacifism personified, his grandfather is quote familiar with the concept of world war: he fought in - and survived - Italy's offensive against the Austro-Hungarian empire, in north-east Italy in 1917 and 1918.

That said, we now fully expect futures to open limit up because there is nothing more bullsh for central bank intervention that the world waking up one morning with mushroom clouds all over the place. Just think of all the printing...

China Bad News & Scotland No News Send Futures Lower

While USDJPY is not moving much, no clear news from Scotland (GBP is modestly weaker) and an opposition win in Sweden (Krone weaker) along with China's dismal data (and Securities Journal note that no rate cut is coming anytime soon from the PBOC) sparked some significant selling in US stock futures at the open (-13 points). Treasury futures are modestly higher as S&P future are stabilizing around -7 points for now extending losses from Friday as AUDJPY slides...

US equity futures down notably...

seemingly led by AUDJPY weakness (AUD weakness and JPY unchness) on the back of China data

Charts: bloomberg

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