Posted at 2:03 AM (CST) by & filed under Jim's Mailbox.

Jim,

For me, this is more exciting that watching the snow in Buffalo.    Time to make some popcorn.

Must listen the end of Day Two Video.   HR:   2:49:00 to the end.  It deals with precious metals and copper as a precious metal.     Levin says, "Go get um"!

Levin questions Tarullo about why Copper was made a precious metal by the OCC in 1997, and why the Fed went along with the idea.   Then Tarullo states,  "maybe we should revisit the idea of that regulation."

***Day 2 of hearing
http://www.hsgac.senate.gov/subcommittees/investigations/hearings/wall-street-bank-involvement-with-physical-commodities-day-two

***Day 1 of hearing (Nov 20th)
http://www.hsgac.senate.gov/subcommittees/investigations/hearings/wall-street-bank-involvement-with-physical-commodities-day-one

Merkley and Dudley – short clip
http://www.merkley.senate.gov/news/press-releases/video-release-merkley-grills-new-york-fed-president-on-too-big-to-jail

Warren – short clip
http://www.huffingtonpost.com/2014/11/21/fed-too-big-to-jail_n_6201476.html

Entire Hearing on "Regulatory Capture"   Dudley speaking   (unrelated to Levin’s Hearing)
http://www.banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_ID=ba1c89dc-8a7b-4cad-9e16-514fd6e6a489

CIGA Jim

Posted at 7:57 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Now you have to recognize they want to be everywhere.

China’s ICBC to set up offshore yuan center in Los Angeles
Sat, Nov 22 03:37 AM EST
By Dominique Patton

BEIJING (Reuters) – China’s Industrial and Commercial Bank (ICBC) signed a pact with the Los Angeles city government to promote cross-border yuan trade and set up an offshore renminbi center in California, the bank said on Saturday.

The move to create an offshore RMB center in the largest state in the United States would lay the foundations for greater yuan trade with China, ICBC said in a statement.

The agreement comes at a time when many other countries are ahead of the United States in establishing cross-border trade in yuan.

The United States has lagged other markets in seeking to set up offshore yuan trading hubs because the U.S. dollar remains the world’s dominant currency and U.S. firms are reluctant to accept the yuan, a Chinese bank executive said.

Beijing wants to promote its currency to more international investors and eventually turn the "redback" into a global reserve currency, while at the same time expanding its already considerable political and economic clout.

About 15 percent of China’s trade was settled in yuan in the first nine months of 2014, up from less than 1 percent in 2009.

More…

 

Jim Sinclair’s Commentary

Who said that sanctions have not accomplished anything?

Russia Eyes Chinese Cash for $150 Billion Moscow-Beijing High-Speed Railway
Nov. 21 2014 19:40
Last edited 19:47

A planned high-speed railway stretching some 7,000 kilometers between Moscow and Beijing will cost about 7 trillion rubles ($153 billion) to build, a Russian Railways executive was quoted as saying Friday.

Over half of the sum, or 4 trillion rubles ($87.5 billion), is expected to come from Chinese investors, said Alexander Misharin, who heads Russian Railways’ subsidiary High-Speed Rail Lines, news agency TASS reported.

Russia and China signed a memorandum of cooperation on the development of a high-speed rail network in mid October that included construction of a high-speed rail line from Moscow to Beijing.

Trains are expected to hurtle along the new line at an average speed of 400 kilometers per hour, cutting the travel time between the two cities from the current 6 or more days to about 33 hours.

A high speed link between Moscow and Kazan, almost 800 kilometers to the east, is intended as the first section of the continent-spanning new railroad. But it is not clear who will foot the 1 trillion rubles ($21 billion) bill for the project.

Officials have suggested that funds could be allocated from the National Welfare Fund, one of Russia’s sovereign wealth funds. Another option is that Chinese investors provide part of the sum, or about 400 billion rubles ($8.7 billion). However no investors have yet committed themselves.

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Posted at 6:58 PM (CST) by & filed under Jim's Mailbox.

Jim,

Doesn’t that beat all. The Fed has determined that are risks inherent with manipulation and control of the commodities markets. I am sure that is for the citizens consumption and not intended to actually be made to be corrected. The only thing the banksters know and understand is manipulation and control.

CIGA Larry

Fed May Limit Wall Street Role in Commodities, Citing Risks
By Cheyenne Hopkins and Silla Brush Nov 21, 2014 10:40 AM MT

The Federal Reserve may curtail Wall Street commodity businesses after lawmakers said banks’ role in energy, power and metals markets spurred unfair trading advantages and could threaten financial stability.

At a Senate hearing today, Fed Governor Daniel Tarullo said curbs under consideration include ownership limits, restricting how much revenue can be derived from commodities and requiring Wall Street firms to boost capital. He said the new rules, to be proposed early next year, could restrict banks from investing in oil tankers, coal mines and other businesses involved in physical commodities.

“We are focusing on the risk to safety and soundness presented by specific activities and on whether those risks can be appropriately and adequately mitigated,” Tarullo said at the hearing held by the Senate Permanent Subcommittee on Investigations.

More…

Posted at 1:41 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

John Williams shares the following with us.

- October Annual Inflation: 1.7% (CPI-U), 1.5% (CPI-W), 9.4% (ShadowStats) 
- Inflation Held at 1.7% for Third Month, Despite Tumbling Oil Prices That Reduced CPI-U by 0.5% 
- Annual Real Retail Sales Growth Fell Back to Recession Level, Amidst Suggestions of Much-Slower Fourth-Quarter Activity 
- Third-Quarter GDP Headline Growth of 3.5% Should Revise to Below 2.5%; Fourth-Quarter GDP Activity Fair Bet for Outright Contraction 
- Existing-Home Sales Gained 1.5% for the Month, 2.5% Year-to-Year, But Fell 3.7% in the Trailing 12 Months of Activity

"No. 676: October CPI, Real Retail Sales and Earnings, Existing-Home Sales" 
Web-page: http://www.shadowstats.com

 

Swiss Gold Initiative Leader Banned From Televised Debate
November 20, 2014

Today King World News was stunned to learn that the Swiss politician who launched the Swiss Gold Initiative was actually banned from participating in the televised debate. Luzi Stamm, who was one of the primary architects of the Swiss Gold Initiative, spoke with KWN about why he was banned from the televised debate and why “It is not possible (to continue) what’s (currently) going on in the Western world.” Below is his remarkable interview.

Eric King:  “Luzi, it’s very interesting because so much energy is being spent by Western central planners, by the Swiss National Bank and Swiss politicians — the whole (mainstream) world seems to be lined up together against you.  They are extremely concerned about this Swiss Gold Initiative, aren’t they?”

Stamm:  “Yes, that’s true.  And Switzerland has this unique political system, so we can vote on it.  And my general impression is that the (Swiss) National Bank and the political elite think totally different than the broad population.  So let’s hope the best for this vote.”

Eric King:  “A new poll has come out that signaled there was a shift in voter sentiment, but you have to wonder how real this (poll) is and how much of it is (orchestrated for the purposes of) propaganda?”

Stamm:  “The political propaganda in Switzerland is an increasing problem

“And of course we hope that a large percentage of the broad population is going to vote.  The higher the percentage is (of voter turnout), the more certain we move towards a ‘Yes’ outcome.”

More…

Obama, Daring Congress, Acts to Overhaul Immigration
By MICHAEL D. SHEARNOV. 20, 2014

WASHINGTON — President Obama chose confrontation over conciliation on Thursday as he asserted the powers of the Oval Office to reshape the nation’s immigration system and all but dared members of next year’s Republican-controlled Congress to reverse his actions on behalf of millions of immigrants.

In a 15-minute address from the East Room of the White House that sought to appeal to a nation’s compassion, Mr. Obama told Americans that deporting millions is “not who we are” and cited Scripture, saying, “We shall not oppress a stranger for we know the heart of a stranger — we were strangers once, too.”

The prime-time speech reflected Mr. Obama’s years of frustration with congressional gridlock and his desire to frame the last years of his presidency with far-reaching executive actions. His directive will shield up to five million people from deportation and allow many to work legally, although it offers no path to citizenship.

“The actions I’m taking are not only lawful, they’re the kinds of actions taken by every single Republican president and every Democratic president for the past half-century,” Mr. Obama said. “To those members of Congress who question my authority to make our immigration system work better, or question the wisdom of me acting where Congress has failed, I have one answer: Pass a bill.”

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Jim Sinclair’s Commentary

How much came from the Ukraine?

Dutch Bring 120 Tonnes of Gold Back to Amsterdam From New York
November 21, 2014

The Dutch central bank has secretly brought a large part of the national gold reserves being held in a secure depot in New York back to Amsterdam.

In total, 120 tonnes of gold valued at €4bn has been brought back to the Netherlands by ship, Nos television said.

The high security reparations for the move took months.

The central bank decided to bring some of its gold reserves back to the Netherlands to ensure a better spread, the bank said in a statement.

In addition, the bank hopes to boost consumer confidence by showing there is enough gold in the Netherlands to take the country through a new economic crisis.

Now 31% of the Dutch gold reserves are in Amsterdam, the same percentage as in New York. The rest is in Ottawa and London.

More…

 

Central banks: The new gold bugs?
Catherine Boyle | @cboylecnbc
Tuesday, 18 Nov 2014 | 7:03 AM ET CNBC.com

Gold’s sudden increase in price took the markets by surprise Tuesday, and it could be policy plans by the world’s central banks that are driving the precious metal ever higher.

Gold hit a two-week high of $1,193.95 on Tuesday, getting close to the key $1,200 per ounce level. This compares to just $1,131.85 on November 7, less than two weeks before.

The rise in the price of gold could be a "quiet signal of people revising expectations of outlook for US policy," Simon Derrick, head of the BNY Mellon markets strategy team, told CNBC.

In recent weeks, analysts and economists have started expecting the U.S. Federal Reserve to raise interest rates sooner. This has strengthened the dollar, and helped drive down gold. However, Tuesday’s relative dollar weakness, coupled with the expected actions of other central banks, has helped send it up again.

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Jim Sinclair’s Commentary

Extremely good question. Maybe the Ukraine and GLD?

Was GLD Gold Moved To The Dutch Central Bank?
November 21, 2014

In a move that is much more significant and relevant than the Chinese interest rate cut news, it was revealed that Netherland’s Central Bank repatriated 120 tonnes of gold this year.   The move was accounted for as a transfer of gold from the NY Fed to De Nederlandsche Bank (DNB).   I say “accounted for”  because I believe it is highly likely that the physical transfer took place from the GLD custodial vaults to the DNB.   Here’s the article:   LINK.

I think this also explains the 33 tonnes of gold that the U.S. military airlifted out of Ukraine:  Original Source – Translated Version. (“Jesse” of Jesse’s Cafe Americain reminded about the Ukraine gold)

Recall that the Fed, together with Germany’s Bundesbank, explained that it would take 7 years to move 300 tonnes of gold from NY to Germany because it was complicated and expensive.   As we know, that was a glaringly transparent cover story for:  “the Fed does not have 300 tonnes to ship back to Germany and it will take 7 years to buy and move that amount of gold without driving up the world price of gold.”

Why do I make this assertion?  This is from the link above:  “In total, 120 tonnes of gold valued at €4bn has been brought back to the Netherlands by ship, Nos television said.”

So, why was the DNB able to move 120 tonnes in a matter of months but it will take 7 years to move 300 tonnes to Germany?

I think we all know the answer to that question, which is why I make the assertion that the bars shipped to the DNB came from GLD (click to enlarge):

More…

Posted at 12:46 PM (CST) by & filed under Jim's Mailbox.

Dear Jim,

This morning in the biggest newspaper in the Netherlands "De Telegraaf" there is an article about the repatriation of gold from NY to Amsterdam. The Dutch Central has confirmed the story.

In a very secretive way they have transported 130 tons of gold from NY to Amsterdam which is worth euro 4 billion. This operation is meant to raise the trust under the Dutch people about their gold.

Only 13 % of our gold was stored in the Netherlands. The new situation is; 31 % in NYC, 20% in Ottawa, 18 % in London, 31 % in Amsterdam.

The Dutch gold supply is 612,000 kg worth almost euro 19 billion.

If all the negative stories about the gold bugs and that gold is just a commodity of which the price is determined at the future market just as any other commodity then why is there such a big fuss all over the world about the gold supply of Central Banks. Why does ~Germany want to repatriate their gold from NY. If it’s just a commodity then leave it there or sell it.

You predicted years ago that Central Banks would become buyers and everybody was laughing.

CIGA Richard

Posted at 4:15 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Sure?

Investigators reveal Citigroup executive, 42, found dead in his bathtub had ‘slashed his own throat ear-to-ear after drug- and booze-fueled bender’
By Josh Gardner and Joel Christie for MailOnline
Published: 15:47 EST, 19 November 2014 | Updated: 02:01 EST, 20 November 2014

The global head of Citigroup’s environmental and social risk management was found dead in his New York apartment on Tuesday with a laceration to the throat and investigators said late Wednesday it was a suicide.

Gruesome: Citigroup managing director Shawn D. Miller was found with his throat slit in his Manhattan apartment on Tuesday

The body of Shawn D. Miller was discovered in the bathtub of his condo in Manhattan’s Financial District and police initially believed a third-party was responsible after finding no weapon.

However, after moving the 42-year-old, police discovered a knife beneath his body in the bathtub, the New York Daily News reports.

Investigators had been trying to find a man with whom Miller was seen walking into the apartment at 120 Greenwich St at about 6.30pm Monday night.

The man later left alone. 

There were no signs of forced entry.

A doorman then made the gruesome discovery of Miller’s about 3pm Tuesday.

More…

 

The Next QE? Switzerland Prepares A "Living Wage" Of $2,600 For Every Citizen
Submitted by Tyler Durden on 11/19/2014 – 21:10

With Japan planning a few trillion Yen stimulus plan ofairdropping "gift cards" directly to the poor to spur spending (and the virtuous awesomeness of economic utopia), it appears Switzerland is about to go one step further. As Motherboard reports, Switzerland could soon be the world’s first national case study in basic income. Instead of providing a traditional social net – unemployment payments, food stamps, or housing credits – the government would pay every citizen a fixed stipend. The proposed plan would guarantee a monthly income of CHF 2,500, or about $2,600 as of November 2014; meaning every Swiss family can expect an unconditional yearly income of $62,400 without having to work, with no strings attached. What could go wrong?

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Jim Sinclair’s Commentary

Cold Wars can get hot very fast. The EU better wake up.

Russia warns US not to arm Ukraine forces against pro-Russian rebels
Moscow hits back at US official’s suggestion as vice-president Joe Biden arrives in Ukrainian capital Kiev for talks
Thursday 20 November 2014 16.29 EST

Russia has warned the United States against supplying arms to Ukrainian forces fighting pro-Russian separatists in eastern Ukraine, hours before US vice-president Joe Biden was due to arrive in Kiev on Thursday.

Ukraine accused Vladimir Putin of treating its territory like a “playing field“, trying to unleash a full-scale war that would pose a broader threat to Nato countries.

Russian foreign ministry spokesman Alexander Lukashevich said in Moscow that a US official’s suggestion Washington should consider sending arms to Ukraine, where pro-Russian rebels have been fighting government forces since April, sent a “very serious signal“.

Lukashevich cautioned against “a major change in policy of the (US) administration in regard to the conflict” in Ukraine.

“That (would be) a direct violation of agreements reached, including (agreements reached) with the participation of the United States,” he said.

The United States backs Kiev in its struggle against the pro-Russian separatists in two eastern regions and has imposed sanctions on Russia over its policies.

More…

Jim Sinclair’s Commentary

The big question is how the House of Saud feels about this potential treaty.

Skepticism grows over deal on Iran nuclear program as deadline looms
John Kerry arrives for talks in Vienna with Iranian counterpart and rejects claims that deadline will have to be extended
Julian Borger in Vienna and Spencer Ackerman in New York
Thursday 20 November 2014 16.06 EST

John Kerry joined Iran nuclear negotiations in Vienna as they entered a hectic final phase on Thursday night, fighting growing skepticism that they can be completed by the Monday deadline.

The US secretary of state was due to hold late-night talks with his Iranian counterpart, Mohammad Javad Zarif, in a last-ditch attempt to break the deadlock on unresolved issues.

But a former senior State Department official, involved in Middle East policy until only a few weeks ago, said it was now not “physically possible” to conclude a comprehensive agreement in the time remaining. He argued that an extension of up to six months might be necessary.

Speaking in Paris before boarding his flight to Vienna, Kerry sought to play down remarks the previous day by his British counterpart, Philip Hammond, suggesting that the deadline would have to be extended.

“We are not discussing an extension. We are negotiating to have an agreement. It’s that simple,” Kerry said in Paris before boarding the flight to Vienna. “I know that Secretary Hammond is concerned about the gaps. We all are.

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Jim Sinclair’s Commentary

Anybody seen this in MSM?

US Manufacturing Activity Is At A 10-Month Low
Myles Udland

Markit’s latest flash PMI reading came in at 54.7, missing expectations for a 56.3 and down from October’s 55.9.

The latest report from Markit showed the weakest overall improvement in business conditions since the snow-related setback in January.

Markit said that, "weaker rates of output and new business growth were the main negative influences on the headline figure in November."

The data also, "pointed to the slowest expansion of manufacturing production for ten months, with a number of survey respondents citing less favorable demand conditions."

Markit chief economist Chris Williamson said, "The manufacturing sector is undergoing a marked slowdown in the fall after enjoying a buoyant summer. Output growth has now fallen for three straight months, taking the pace of expansion down to its lowest since the start of the year. Unlike January, however, this time the weaker rate of growth can’t be blamed on the weather."

Williamson added that export weakness "holds the key" to the recent slowdown, with manufacturers reporting the largest drop in export orders in nearly 18 months.

More…

Posted at 3:06 PM (CST) by & filed under Jim's Mailbox.

Jim,

It’s what you’ve been saying for years now.

It is now coming to pass.

Thank you,
CIGA Wolfgang

The Wrath of Draghi: Bailed-Out German Megabank Imposes “Negative Interest Rates”
Submitted by testosteronepit on 11/20/2014 11:24 -0500

Wolf Richter www.wolfstreet.com www.amazon.com/author/wolfrichter

Commerzbank, Germany’s second-largest bank, a toppling marvel of ingenuity during the Financial Crisis that was bailed out by ever dutiful if unenthusiastic taxpayers, will now reward these very folks with what Germans have come to look forward to: the Wrath of Draghi.

It started with Deutsche Skatbank, a division of VR-Bank Altenburger Land. The small bank was the trial balloon in imposing the Wrath of Draghi on savers and businesses. Effective November 1, those with over €500,000 on deposit earn a “negative interest rate” of 0.25%. In less euphemistic terms, they get to pay 0.25% per year on those deposits for the privilege of giving their money to the bank.

“Punishment interest” is what Germans call this with Teutonic precision.

The ECB came up with it. In June, it started charging a “negative interest rate” of 0.1% on reserves. In September, it doubled that rate to 0.2%.

“There will be no direct impact on your savings,” the ECB announced at the time. “Only banks that deposit money in certain accounts at the ECB have to pay.” It even asked rhetorically: “But why punish savers and reward borrowers?” And it added helpfully: “This behavior is not specific to the ECB; it applies to all central banks” [here's part one of the saga... The Wrath of Draghi: First German Bank Hits Savers with ‘Negative Interest Rates’].

On November 6, as rumors were swirling that even the largest banks would inflict punishment interest on their customers, Commerzbank CFO Stephan Engels came out swinging in an interview to assuage these fears. He said point blank, “We cannot imagine negative interest rates on deposits of our individual and business customers.”

On November 11, it was Martin Zielke, member of the Commerzbank’s Board of Managing Directors, who recited the same corporate script in his interview with Focus: “We cannot imagine at the moment that private customers pay a negative interest rate on their deposits with us.”

More…

Posted at 11:50 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Williams shares his latest with us.

- October Housing Starts Indicated Fourth-Quarter Contraction 
- PPI Headline Inflation of 0.2% Reflected Peculiarities of New Reporting Approach 
- October PPI Will Dampen Real Growth in New Orders for Durable Goods and Construction Spending

"No. 675: October Housing Starts, PPI" 
Web-page: http://www.shadowstats.com

 

U.S. MINT REPORTS ON SILVER EAGLES: Huge Demand & Weekly Rationing
by SRSrocco on November 19, 2014

After the huge take-down in the price of silver on October 31st, demand for Silver Eagles skyrocketed.  Then on Nov. 5th after silver was knocked down another 5%, the U.S. Mint suspended sales of Silver Eagles.

It was reported that the U.S. Mint sold 2 million Silver Eagles on Nov. 5th before they suspended sales.  However, we didn’t see a huge increase in sales on their website for that day.  So, I decided to contact Michael White, Public Affairs person for the U.S Mint and ask him about this issue as well as some other questions.

Mr. White provided me that actual sales figures from Oct 31st to Nov. 18th.  These sales figures can be seen in the chart below:

clip_image001

On Halloween, Oct. 31st when Zombies knocked the price of silver down 4%, the U.S Mint sold 1,425,000 Silver Eagles that day.  After the weekend, Silver Eagle sales on Monday, Nov 3rd were a hefty 625,000.  As the price of silver trended lower on Tuesday, the U.S. Mint sold another 430,000 on Nov. 4th.

And then on Nov 5th, with the paper price of silver down 5%, demand for Silver Eagles increased to a level that totally wiped out all remaining Silver Eagle inventories at the U.S. Mint.  We must remember, there are Authorized Dealers who purchase Silver Eagles directly from the U.S. Mint to sell as retail or to wholesale dealers.

More…

Deformations On The Dealer Lots: How The Fed’s ZIRP Is Fueling The Next Subprime Bust
by David Stockman November 19, 2014

On any given day, Janet Yellen is busy squinting at 19 essentially meaningless labor market graphs on her “dashboard”, apparently looking for evidence that ZIRP is working. Well, after 71 months of zero money market rates—-an unprecedented financial absurdity—-there are plenty of footprints dotting the financial landscape.

But they have nothing to do with sustainable jobs. Instead, ZIRP has fueled myriad financial bubbles and speculations owing to the desperate scramble for “yield” that it has elicited among traders and money managers. Indeed, the financial system is literally booby-trapped with accidents waiting to happen owing to the vast mispricings and bloated valuations that have been generated by the Fed’s free money.

Nowhere is this more evident than in the subprime auto loan sector. That’s where Wall Street speculators have organized fly-by-night lenders who make predatory 20% interest rate loans at 115% of the vehicle’s value to consumers who are essentially one paycheck away from default.

This $120 billion subprime auto paper machine is now driving millions of transactions which are recorded as auto “sales”, but, in fact, are more in the nature of short-term “loaners” destined for the repo man. So here’s the thing: In an honest free market none of these born again pawnshops would even exist; nor would there be a market for out-of-this-world junk paper backed by 115% LTV/75-month/20% rate loans to consumers who cannot afford them.

Indeed, instead of the BLS concocted “quit rate” and other such aggregated data noise about the nation’s massive, fragmented, dynamic and complicated complex of thousands of local and sectoral labor markets—- about which the Fed can and should do nothing—-Yellen might be gazing at the $1.6 billion in bids attracted earlier this year by Prestige Financial Services of Utah. That occurred in the junk bond market, which the Fed does heavily impact, and could not have possibly happened in the absence of ZIRP.

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Jim Sinclair’s Commentary

The Flash Boys (mechanized high speed traders) are going to be the real Black Swans that breaks the system.

Flash Boys Raise Volatility in Wild New Treasury Market
By Susanne Walker and Lisa Abramowicz Nov 17, 2014 5:45 PM MT

In a flash, the bond market went wild.

What began on Oct. 15 as another day in the U.S. Treasury market suddenly turned into the biggest yield fluctuations in a quarter century, leaving investors worrying there will be turbulence ahead.

The episode exposed a collision of forces — the rise of high-frequency trading and the decline of Wall Street dealers — that are reshaping the world’s biggest and most important bond market. Money managers say the $12.4 trillion Treasury market is becoming less liquid, meaning securities can no longer be traded as quickly and easily as they used to be, thanks in part to the Federal Reserve’s bond-buying program.

“The way the market is set up right now, we’ll see instances like we did on that day,” said Michael Lorizio, senior trader at Boston-based Manulife Asset Management US LLC, which oversees $281 billion. “There’s going to be a learning curve as to how to handle that.”

The development reflects unintended consequences of new financial regulation, as well as steps the Fed has taken to breathe life into the U.S. economy. The implications, however, extend far beyond Wall Street, because the Treasury market determines borrowing costs for governments, companies and consumers around the world.

When the day began on Oct. 15, an unprecedented number of investors were betting that interest rates would rise and U.S. government debt would lose value. The news that morning seemed ominous. Ebola was spreading. So was war in the Middle East. At 8:30 a.m. in Washington, the Commerce Department announced a decline in retail sales.

Buy Quickly

The shift came all at once. The sentiment that the Fed would raise rates reversed. Traders who’d bet against, or shorted, Treasury bonds had to buy as many as they could as quickly as they could to limit their losses. By 9:38 a.m., 10-year Treasury yields plunged 0.34 percentage point, the most in five years.

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