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Updated: 7 hours 17 min ago

June 16/Dept of Justice shenanigans/NY Fed lowers estimate of 2nd quarter GDP to 1.8%/Gold rises $1.80 but silver loses 5 cents/ For the 12th consecutive day, the amount of silver standing at the comex increases: today almost 4.6 million oz standing...

Fri, 06/16/2017 - 18:36

GOLD: $1254.00  UP $1.80

Silver: $16.64  DOWN 5  cent(s)

Closing access prices:

Gold $1253.40

silver: $16.67

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1260.95 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1252.61

PREMIUM FIRST FIX:  $8.34

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SECOND SHANGHAI GOLD FIX: $1263.73

NY GOLD PRICE AT THE EXACT SAME TIME: $1253.80

Premium of Shanghai 2nd fix/NY:$9.93

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LONDON FIRST GOLD FIX:  5:30 am est  $1256.60

NY PRICING AT THE EXACT SAME TIME: $1255.90

LONDON SECOND GOLD FIX  10 AM: $1255.40

NY PRICING AT THE EXACT SAME TIME. $1254.50 

For comex gold: JUNE/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  336 NOTICE(S) FOR 33,600  OZ.

TOTAL NOTICES SO FAR: 2544 FOR 254400 OZ    (7.912 TONNES)

For silver: For silver: JUNE 10 NOTICES FILED TODAY FOR 50,000  OZ/

Total number of notices filed so far this month: 911 for 4,555,000 oz

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END

 

Over at the comex, the amount standing for the silver metal again rose in similar fashion to what we witnessed last month and also in April. It is up for the 12th consecutive trading day. We certainly have a determined entity trying to get its hands on whatever silver is available.

 

Last night we brought you the following story:

“The big news of the day came from China where the large conglomerate insurance giant Anbang  chairman, Wu has just been detained by the authorities.  Anbang’s revenue dropped by 90% this month and that has scared the living daylights out of investors. These guys were the huge funders of those shadow banking WMP’s and a default with Anbang will no doubt cause a systemic mess throughout China.”

Today’s Kyle Bass confirms that China’s debt is metastasizing. Also China lied about USA treasuries having an inflow.  In reality it had a 21 billion outflow.

David Stockman also delivered a powerful commentary as he suggests in detail what is going to happen in September when the USA finally reaches the end of the game with respect to its debt ceiling crisis.

Let us have a look at the data for today

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This is where we are heading:  (JB Slear/Jim Sinclair)

According to JB Slear, this is what the future holds. Why should I write words. Get into the cellar as fast as you can!

Jim

In silver, the total open interest FELL BY ONLY 4,087  contract(s) DOWN to 198,306 WITH THE HUGE FALL IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (DOWN 42 CENT(S). In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  .991 BILLION TO BE EXACT or 142% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 10 NOTICE(S) FOR 50,000  OZ OF SILVER

In gold, the total comex gold FELL BY monstrous  14,393 contracts WITH THE HUGE FALL IN PRICE OF GOLD   ($20.40 with YESTERDAY’S TRADING). The total gold OI stands at 459,608 contracts.

we had 336 notice(s) filed upon for 33600 oz of gold.

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With respect to our two criminal funds, the GLD and the SLV:

GLD:

We had no changes in tonnes of gold at the GLD:

Inventory rests tonight: 853.68 tonnes

.

SLV

Today: no changes  in silver inventory at the SLV

THE SLV Inventory rests at: 336.200 million oz

end

.

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver FELL BY A RATHER TAME 4,087 contracts DOWN TO 198,306 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), WITH THE FALL IN PRICE FOR SILVER WITH YESTERDAY’S TRADING  (DOWN 42 CENTS).We LOST a few of our paper players BUT our  core players remain firm and determined.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed DOWN 9.32 POINTS OR 0.30%   / /Hang Sang CLOSED UP 61.15 POINTS OR 0.24% The Nikkei closed UP 111.44 POINTS OR 0.56%/Australia’s all ordinaires  CLOSED UP 0.20%/Chinese yuan (ONSHORE) closed DOWN at 6.8129/Oil UP to 44.89 dollars per barrel for WTI and 47.55 for Brent. Stocks in Europe OPENED IN THE GREEN,,      ..Offshore yuan trades  6.8175 yuan to the dollar vs 6.8129 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LOT WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

b) REPORT ON JAPAN

i)The Bank of Japan leaves policy unchanged.  However they are buying fewer bonds due to the fact that they own most of the bonds

( zerohedge)

ii)This will be a huge bankruptcy: Takata/ they are the largest manufacturer of airbags

( Nikkei/Asia Review) c) REPORT ON CHINA

 

i)Kyle Bass (shortly before the announcement of Anbang’s CEO WU arrest and total collapse in revenue) states that China’s credit bubble is metastasizing and that he is still short the yuan despite attempts by the PBOC to thwart his efforts

( zero hedge/Kyle Bass)

ii)A very big story!!

Beijing totally lied about Chinese inflows of USA treasuries last month.  Instead of inflows the true number is a 21 billion uSA outflow according to numbers provided by Goldman Sachs.  No wonder Chinese citizens are bidding up bitcoin and also buying gold.

(courtesy zero hedge)

 

4. EUROPEAN AFFAIRS We brought to you an important story yesterday where the USA is going to vote on further sanctions against Russia for their “meddling into the uSA election”.  Germany has had enough.  Germany et other European nations are threatening with retaliation. a must read.. ( zerohedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

i)ISIS LEADER/BAGHDADI/RUSSIA

Russia reports that Baghdadi was killed (again)  in a Russian airstrike last month

( zero hedge)

ii)AFGHANISTAN/USA

Afghanistan is nothing but a basket case: Trump orders 4,000 more troops into the country trying to break the stalemate in the war that is now 12 yrs old:

(zerohedge)

 

 

6 .GLOBAL ISSUES 7. OIL ISSUES

i)Rig count has now peaked for the 22nd week and this will without a doubt cause increase production from the shale boys

( zerohedge)

ii)Libya is exempt from all OPEC production cuts. Now the state’s national oil company has made a deal with Germany’s Wintershall to commence production on their assets in Libya which will increase production by over 20% from their current 830,000 barrels per day.

( Dave Forest/OilPrice.com)

8. EMERGING MARKET 9.   PHYSICAL MARKETS

i)Dave Kranzler states that the Fed has only raised short term rates and that long term rates are actually falling indicating a policy error. If the economy was growing, long term rates would be rising

 

( Dave Kranzler/IRD/GATA)

ii)It is about time:  India is said to plan a new gold policy to help reform the beleaguered 19 billion jewelry sector

( Bloomberg)

iii)Barrick in discussions with the President of Tanzania to end their mining bypass disagreements

 

( London/Economist)

10. USA Stories

i)We now generally get two Fed accounts on GDP:

a) Atlanta Fed

b) New York Fed

today, the New York Fed slashed  Q2 GDP forecasts down to 1.86% from earlier estimates of 3%

We await the Atlanta Fed’s response!

(courtesy NYFed/zero hedge)

ii)This is rather stunning; The Department of Justice warns USA citizens not to trust stories based on “anonymous officials”.

Trump does not offer an opinion on this as of yet.

( zero hedge)

iii a)Trump now blasts Deputy Attorney General Rosenstein.  Trump is correct: he is being investigated by the man who told him to fire the FBI director and thus :  this whole thing is a “witch hunt”

( zero hedge)

iiib)Rosenstein states that he may have to recuse himself as it seems the probe is widening (unbelievable!!)

_( zero hedge)

iiic)Meet the next Attorney General to handle the Russian fiasco: Rachel Brand

(zerohedge)

 

iiid)then late in the day, the Dept of Justice reports that there is no reason for Rosenstein’s recusal

the dept of Justice is now in disarray

( zerohedge)

 

iiie)THE FUN BEGINS:  THE REPUBLICANS FINALLY DECIDE TO PLAY HARDBALL: THEY CALL FOR A SPECIAL COUNSEL TO INVESTIGATE FORMER ATTORNEY GENERAL LYNCH:

( zerohedge)

iv)My goodness!! these are awful numbers:  housing starts drop by a huge amt: -5.5% vs +4.1 expectations.  As zero hedge states, Janet it is a good time to keep raising rates!! ( zero hedge) v)Grocery stocks are plummeting after Amazon buys Whole Foods for $42.00.  The fear of course is that there is fear that Amazon would do to grocery operations what it has done to bricks and mortar!

( zero hedge)

vi)The Republicans finally are worried as the soft data U. of Michigan confidence slumps to the lowest level since the Trump election

(courtesy zero hedge)

vii)Illinois on death watch.  A great commentary tonight from John Rubino

(courtesy John Rubino/DollarCollapse.com)

viii)The following is a must, must read:

why the 2nd week of September will be critical. Trump is planning to allocate funds once we reach the total impasse on the debt ceiling (which will occur on the first or second week of September)

(courtesy David Stockman/Dailyreckoning)

ix) this week’s wrap up courtesy of Greg Hunter of uSAWatchdog

Let us head over to the comex:

The total gold comex open interest FELL BY A HUGE 14,393 CONTRACTS DOWN to an OI level of 459,608 WITH THE MONSTROUS  FALL IN THE PRICE OF GOLD ($20.40 with YESTERDAY’S trading)., The bankers were  probably expecting even more gold leaves to fall from the gold tree with the raid yesterday. An open interest of around 390,000 to 400,000 is core and nothing will move these guys from their contracts.

We are now in the contract month of JUNE and it is one of the BETTER delivery months  of the year. In this JUNE delivery month we had A LOSS OF 369 contract(s)FALLING TO  1204.  We had 2 notices filed yesterday so we LOST 367  contracts or an additional 36,700 oz will NOT stand for delivery in this very active delivery month of June AND  367 CONTRACTS RECEIVED AN EFP CONTRACT WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURE GOLD CONTRACT/OR A LONG CALL OR MOST LIKELY A LONDON BASED FORWARD GOLD CONTRACT. THESE EFP’S ARE PRIVATE OFF COMEX TRANSACTIONS. THE STUBBORN LONGS WHO ARE REMAINING STOIC AT THE COMEX ARE SO FAR REFUSING THAT FIAT BONUS (OVER 11 TONNES STANDING)

Below is a little background on the EFP contracts  initiated by our bankers: We now know for certain that private EFP contracts are given by the bankers when faced with an upcoming active delivery month and they state that this is for emergency purposes only and that they do not have actual physical metal to deliver upon in the front month.  We just do not know the makeup of that private deal.  It is my contention that the longs in GOLD FOR INSTANCE at the end of MAY(for June contracts) were given a fiat bonus plus a long “in the money” call for a  future July contract or a August FUTURE contract or MAYBE EVEN A LONDON BASED FORWARD GOLD CONTRACT. . and this is why the total comex open interest complex obliterates as we enter first day notice.  So now everything makes sense: the obliteration of OI as we enter first day notice has not really occurred in the real sense but replaced with a future long contract call and/or an off -comex London based gold contract  with some bonus money for their effort.

The non active July contract LOST 28 contracts to stand at 1880 contracts. The next big active month is August and here the OI LOST 16,251 contracts DOWN to 330,735,  as the bankers trying to keep this month down to manageable size.

We had 336 notice(s) filed upon today for 33,600 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI FELL BY ONLY 4,087 contracts FROM 202,393 DOWN TO 198,306 WITH YESTERDAY’S BIG 42 CENT LOSS. OUR BANKER FRIENDS ARE DESPERATELY TRYING TO COVER THEIR SHORTS IN SILVER BUT AS YOU CAN SEE  THEY HAVE NOT BEEN AS SUCCESSFUL AS THEY WOULD HAVE LIKED. We are in the NON active delivery month is JUNE  Here the open interest SOMEHOW LOST 57 contract(s) FALLING TO 18 contracts. We had 67 notices served upon yesterday so we AGAIN GAINED 10 CONTRACTS OR AN ADDITIONAL  50,000 OZ OF SILVER WILL STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.  IT SEEMS WE ARE CONTINUING WHERE WE LEFT OFF LAST MONTH IN SILVER AS INVESTORS ARE WILLING TO FORGO THE FIAT PROFIT JUST TO SECURE PHYSICAL SILVER METAL. THIS IS THE 12TH CONSECUTIVE DAY THAT THE AMOUNT OF SILVER STANDING ADVANCED FROM FIRST DAY NOTICE. 

The next big active month will be July and here the OI LOST 7037 contracts DOWN to 89,791 as we start to wind down before first day notice Friday, June 30.  July will be interesting to watch in silver as we witness fewer players pitching for EFP contracts than with gold.

The month of August, a non active month picked up 9 contracts to stand at 74.  The next big active delivery month for silver will be September and here the OI already jumped by another 3243 contracts up to 67,704.

I will give you a snapshot as to what happened last year at the exact number of days before first day notice:

 Monday, June 16.2016:  90,828 contracts were still outstanding vs 89,791 contracts June 16.2017

At the conclusion of June, the final standing for physical silver was 3,080,000 oz and we have already surpassed that number this year  (3,945,000 oz).

The line in the sand is $18.50 for silver and again it has been defended by the criminal bankers.  Once this level is pierced, the monstrous billion oz of silver shorts will blow up. The bankers are defending the Alamo with their last stand at the $18.50 mark. THE NEW RECORD HIGH IN OPEN INTEREST WAS SET FRIDAY APRIL 21/2017 AT:  234,787.

As for the July contracts:

Initial amount of silver standing for the July 2016 contract:  14.785 million  oz

Final standing:  12.370 million with the difference being EFP’s taking delivery in London.

We had 10 notice(s) filed for 50,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 139,332 contracts which is  poor

Yesterday’s confirmed volume was 266,134 contracts  which is EXCELLENT

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for JUNE  June 16/2017. Gold Ounces Withdrawals from Dealers Inventory in oz   nil Withdrawals from Customer Inventory in oz    8037.500 oz 250 kilobars Scotia Deposits to the Dealer Inventory in oz nil  oz Deposits to the Customer Inventory, in oz   803.75 oz Manfra 25 kilobars No of oz served (contracts) today   336 notice(s) 33,600 OZ No of oz to be served (notices) 868 contracts 86,800 oz Total monthly oz gold served (contracts) so far this month 2544 notices 254400 oz 7.912 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month   290,833.2 oz Today we HAD  2 kilobar transaction(s)/  We had 0 deposit into the dealer: total dealer deposits: nil oz We had NIL dealer withdrawals: total dealer withdrawals:  NIL oz we had no dealer deposits: total dealer deposits:  nil oz we had 1  customer deposit(s):  i) Into Manfra: 803.75 oz (25 kilobars) total customer deposits; 803.75  oz We had 1 customer withdrawal(s)  i) Out of Scotia: 8037.500 oz (250 kilobars) total customer withdrawal: 8037.500  oz  we had 0 adjustment(s):  Rather strange for the 2nd biggest delivery month of the year and no activity inside the gold comex.  Also it must be still alarming to our bankers to see 10.8 tonnes of gold standing and probably no gold to back up those who stand. For JUNE:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 336  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 192 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the initial total number of gold ounces standing for the JUNE. contract month, we take the total number of notices filed so far for the month (2544) x 100 oz or 254,400 oz, to which we add the difference between the open interest for the front month of JUNE (1204 contracts) minus the number of notices served upon today (336) x 100 oz per contract equals 377,900  oz, the number of ounces standing in this active month of JUNE.   Thus the INITIAL standings for gold for the JUNE contract month: No of notices served so far (2544) x 100 oz  or ounces + {(1204)OI for the front month  minus the number of  notices served upon today (336) x 100 oz which equals 341,200 oz standing in this  active delivery month of JUNE  (10.612 tonnes) . WE LOST 367 CONTRACTS OR AN ADDITIONAL 36700 OZ WILL NOT STAND AT THE COMEX AND 367 CONTRACTS) WERE GIVEN EFP CONTRACTS WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURES GOLD CONTRACT OR A LONG CALL ON A GOLD CONTRACT OR MOST LIKELY A LONDON BASED GOLD FORWARD CONTRACT. YOU CAN NOW SEE WHY THE COT REPORTS ARE DISTORTED DUE TO THE ISSUANCE OF THESE EFP CONTRACTS  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 889,847.333 or 27.67 tonnes DEALER RAPIDLY LOSING GOLD Total gold inventory (dealer and customer) = 8,636,844.749 or 268.64 tonnes    Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 268.64 tonnes for a  loss of 34  tonnes over that period.  Since August 8/2016 we have lost 85 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 10 MONTHS  85 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE June DELIVERY MONTH   June INITIAL standings  June 16 2017 Silver Ounces Withdrawals from Dealers Inventory  nil Withdrawals from Customer Inventory  nil  oz Deposits to the Dealer Inventory NIL oz Deposits to the Customer Inventory   628,668.300 oz JPMorgan No of oz served today (contracts)  10 CONTRACT(S) (50,000 OZ) No of oz to be served (notices) 8 contracts ( 40,000 oz) Total monthly oz silver served (contracts) 911 contracts (4,555,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month 2,735,819.5 oz today, we had  0 deposit(s) into the dealer account: total dealer deposit: NIL  oz we had Nil dealer withdrawals: total dealer withdrawals: nil oz we had 0 customer withdrawal(s): TOTAL CUSTOMER WITHDRAWALS: nil  oz  We had 1 Customer deposit(s): i) Into JPMorgan:  628,668.300 oz ***deposits into JPMorgan have now resumed again In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits: 628,668.300 oz    we had 0 adjustment(s) The total number of notices filed today for the JUNE. contract month is represented by 10 contract(s) for 50,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at 911 x 5,000 oz  = 4,555,000 oz to which we add the difference between the open interest for the front month of JUNE (18) and the number of notices served upon today (10) x 5000 oz equals the number of ounces standing  

 

.   Thus the initial standings for silver for the JUNE contract month:  911 (notices served so far)x 5000 oz  + OI for front month of JUNE.(18 ) -number of notices served upon today (10)x 5000 oz  equals  4,595,000 oz  of silver standing for the JUNE contract month.   We gained 10 contracts or an additional 50,000 oz will stand for delivery. WE ALSO HAD 0 EFP CONTRACTS THAT WERE ISSUED AS THE LONGS REFUSED A FIAT BONUS: THEY WANT THEIR PHYSICAL SILVER.     Volumes: for silver comex Today the estimated volume was 83,651 which is HUGE Yesterday’s  confirmed volume was 128,041 contracts which is GIGANTIC YESTERDAY’S ESTIMATED VOLUME OF 128,041 CONTRACTS EQUATES TO 640 MILLION OZ OF SILVER OR 92% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.   Total dealer silver:  34.315 million (close to record low inventory   Total number of dealer and customer silver:   205.425 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 6.5 percent to NAV usa funds and Negative 6.6% to NAV for Cdn funds!!!!  Percentage of fund in gold 62.3% Percentage of fund in silver:37.6% cash .+0.1%( June 16/2017)    2. Sprott silver fund (PSLV): STOCK   NAV  RISES TO +.06% (june 16/2017)  3. Sprott gold fund (PHYS): premium to NAV RISES to -0.64% to NAV  (June 16/2017 ) Note: Sprott silver trust back  into POSITIVE territory at +0.06 /Sprott physical gold trust is back into NEGATIVE/ territory at -0.64%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada

Submitted by cpowell on Thu, 2017-03-09 01:19. Section: Daily Dispatches

From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017

http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…

Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.

The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.

The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.

“They weren’t interested in having those discussions,” Williams said.

 Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.

If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.

“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”

Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.

The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.

Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.

Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.

end

And now the Gold inventory at the GLD

June 16/no changes in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 15/ a monstrous “paper” withdrawal of 13.32 tonnes/Inventory rests at 853.68 tonnes

June 14./NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 867.00 TONNES

June 13. No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 12/No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 9/no change in inventory at the GLD/Inventory rests at 867.00 tonnes

June 8/AN ADDITION OF 3.07 TONNES OF GOLD ADDED TO THE GLD/INVENTORY RESTS AT 867.00 TONNES

June 7 a huge change in inventory/a deposit of 13.93 tonnes/inventory rests at 864.93 tonnes

June 6/ no changes in inventory at the GLD/Inventory remains at 851.00 tonnes

June 5.2017/no changes at the GLD/Inventory remain at 851.00 tonnes

June 2/2017/a huge deposit of 3.55 tonnes of gold into the GLD/Inventory rests at 851.00 tonnes

June 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 847.45 TONNES

May 31./ no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 30/no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 26./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 25./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 24/no change in inventory at the GLD/inventory rests at 847.45 tonnes

May 23/a paper withdrawal of 5.03 tonnes of gold from the GLD/Inventory rests at 847.45 tonnes

May 22/A DEPOSIT OF 1.77 TONNES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.48 TONNES

May 19/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 850.71 TONNES

May 18/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 850.71

May 17/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 16./ no change in the GLD inventory/inventory rests at 851.89 tonnes

May 15/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 12/no changes in GLD/inventory rests at 851.89 tonnes

may 11/no changes in GLD inventory/inventory rests at 851.89 tonnes

May 10/no changes in GLD inventory/inventory rests at 851.89 tonnes/

May 9/a withdrawal of 1.19 tonnes from the GLD/Inventory rests tonight at 851.89 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx June 16 /2017/ Inventory rests tonight at 853.68 tonnes *IN LAST 174 TRADING DAYS: 93.45 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 116 TRADING DAYS: A NET  33.98 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY. *FROM FEB 1/2017: A NET  47.32 TONNES HAVE BEEN ADDED.

end

 

Now the SLV Inventory

June 16/no changes in inventory at the SLV/inventory rests at 336.200 million oz

June 15/ a massive “paper withdrawal” of 3.405 million oz of silver/Inventory rests at 336.200 million oz/

June 14/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ/

June 13/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz

June 12/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 9/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 8/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ/

June 7/no change in inventory at the SLV/inventory rests at 339.605 million oz/

June 6/no change in inventory at the SLV/Inventory rests at 339.605 million oz.

June 5/a huge change at the SLV/a withdrawal of 1.371 million oz /inventory rests at 339.605 million oz/

June 2/no change in silver inventory at the SLV/Inventory rests at 340.976 million oz/

June 1/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 340.976 MILLION OZ

May 31./ no change in silver inventory at the SLV/inventory rests at 340.976 million oz/

May 30/no change in silver inventory at the SLV/inventory rests at 340.976 million oz

May 26/another paper withdrawal of 946,000 oz of silver from the SLV with silver rising/inventory rests at 340.976 million oz

May 25/no change in silver inventory at the SLV/Inventory rests at 341.922 million oz

May 24./a “paper” withdrawal of 1.893 million oz from the SLV/inventory rests tonight at 341.922 million oz

May 23/no change in silver inventory at the SLV/inventory rests at 343.815 million oz

May 19/no change in silver inventory at the SLV/Inventory rests at 343.815 million oz.

may 18/2017/another big deposit of 1.42 million oz added to the SLV/inventory rests at 343.815 million oz.

may 17/no change in silver inventory at the SLV/Inventory rests at 342.395 million oz/

May 16./we had a huge addition of 1.416 million oz of silver into the SLV/inventory rests at 342.395 million oz

May 15/no changes in silver inventory/inventory rests at 340.979 million oz/

May 12/a huge change in silver: a deposit of 2.369 million oz/inventory rests at 340.979 million oz

May 11/no changes in silver inventory at the SLV/Inventory rests at 338.610 million oz

May 10/ a gigantic 3.833 million oz of silver added to the SLV and this occurred with the constant whacking of silver for the past 17 trading sessions/inventory rests at 338.610 million oz

may 9Again, no movement of inventory at the SLV. Inventory rests at 334.777 million oz

June 16.2017: Inventory 336.200  million oz end At 3:30 pm est we receive the COT report which gives position levels of our major players.  Now that we know that EFP’s are given, the data is total compromised. Gold COT Report – Futures Large Speculators Commercial Total Long Short Spreading Long Short Long Short 297,178 106,904 28,577 105,193 308,804 430,948 444,285 Change from Prior Reporting Period -15,062 -871 -898 -3,105 -15,848 -19,065 -17,617 Traders 174 99 80 48 58 259 206   Small Speculators   Long Short Open Interest   40,186 26,849 471,134   -3,842 -5,290 -22,907   non reportable positions Change from the previous reporting period end Our large speculators:

Those large specs that have been long in gold pitched 15,062 contracts from their long side

Those large specs who have been short in gold covered 871 contracts from their short side.

Our Commercials:

those commercials that have been long in gold pitched 3105 contracts from their long side

those commercials who have been short in gold covered 15,848 contracts from their short side.

Our Small Specs:

those small specs that have been long in gold covered 3842 contracts from their long side

those small specs that have been short in gold covered a large 5290 contracts fro their short side.

silver Silver COT Report: Futures Large Speculators Commercial Long Short Spreading Long Short 102,702 42,044 21,960 51,617 123,530 989 6,272 -10,013 -812 -4,523 Traders 94 53 55 34 36 Small Speculators Open Interest Total Long Short 201,214 Long Short 24,935 13,680 176,279 187,534 2,083 511 -7,753 -9,836 -8,264 non reportable positions Positions as of: 153 124 Tuesday, June 13, 2017   © SilverSeek. Our large speculators:

those large specs that have been long in silver surprisingly added 989 contracts to their long side

those large specs that have been short in silver pitched a huge 6272 contracts from their short side ??

Our Commercials:

those commercials that have been long in silver pitched a tiny 912 contracts from their long side

those commercials that have been short in silver covered a smallish 4523 contracts from their short side

Our Small Specs:

those small specs that have been long in silver added 2276 contracts to their long side

those small specs that have been short in silver added 467 contracts to their short side.

Conclusions:

note the difference between gold and silver.  In gold EFP’s have been handed out like candy.  In silver, they so far are refusing to accept any EFP’s

end

We are going to provide GOFO rates  (gold) each day and shortly silver courtesy of Bron Suchecki of Monetary Metals and here is today’s figures:

The actual figures can be found on our home page https://monetary-metals.com/

with this box in the left side

GOFO

6 month: 1.30%  (yesterday 1.30%)

12 month:  1.45% (yesterday 1.45%)

BRON SUCHECKI | VP Operations Unlocking the Productivity of Gold MONETARY METALS & CO M: +61 4 1210 1912 | bron@monetary-metals.com Skype: bron.suchecki Twitter: @bronsuchecki Website: monetary-metals.com Use this link to encrypt and safely send confidential documents to Monetary Metals® https://cloud.sookasa.com/upload_page/f840a3c3-54e5-42b0-85b4-15c9e94ea5e  end Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Billionaires Invest In Gold By Mark O’Byrne June 16, 2017 0 Comments

Billionaires Invest In Gold
by Visual Capitalist

There are always lessons that can be learned from the “smart money”.

Source: Visual Capitalist

Unlike regular investors, billionaire money managers like Ray Dalio and Stan Druckenmiller are professional investors. They have entire institutional teams at their disposal, dive deep into the nuances and complexities of the market, and spend every waking moment of their lives thinking about how to get more from their investments.

They want to make money – but they also want to execute on strategies that will protect their wealth and build robust portfolios that can withstand any type of macro event.

Family Offices and Billionaires invest in gold

In recent months, some of these elite investors have turned to precious metals like gold as a part of their overall investment strategies.

In the following infographic from Sprott Physical Bullion Trusts, Visual Capitalist explain why these investors are adding precious metals to their portfolios, the underlying tactics, and the best quotes each investor has on assessing today’s market.

Why do these billionaires buy gold?

Their cited reasons can basically be summed up with six categories: wealth preservation, store of value, inflation hedge, portfolio diversification, future upside, and investment fundamentals.

What Billionaire Investors Are Doing?

1. Lord Jacob Rothschild
In late summer 2016, Rothschild announced changes to the RIT Partners portfolio because he was worried about very low interest rates, negative yields, and quantitative easing, saying they are part of the “greatest monetary experiment in monetary policy in the history of the world”.

His solution? Buy gold to help preserve wealth, and as a store of value for the future.


Read
original article on Visual Capitalist

News and Commentary

Gold eases after Fed raises interest rate (MarketWatch.com)

Fed raises rates, unveils balance sheet cuts in sign of confidence (Reuters.com)

ETF rebalancing on Friday – Bumpy ride for junior gold miners (TheGlobeAndMail.com)

Oil settles at a 7-month low under $45 a barrel (MarketWatch.com)

Gold jumps, but traders see limited upside ahead of the Fed (CNBC.com)

Is Gold Undervalued? (MorningStar.co.uk)

Bundesbank’s Weidmann: Digital Currencies Will Make The Next Crisis Worse (ZeroHedge.com)

You won’t believe this stupid new law against Cash and Bitcoin (SovereignMan.com)

How the U.S. government tried to convict a golden rooster (QZ.com)

What’s next for the pound? Frisby (MoneyWeek.com)

end

Dave Kranzler states that the Fed has only raised short term rates and that long term rates are actually falling indicating a policy error. If the economy was growing, long term rates would be rising

 

(courtesy Dave Kranzler/IRD/GATA)

 

Dave Kranzler: Has the Fed really raised interest rates this year?

Submitted by cpowell on Thu, 2017-06-15 16:02. Section:

12:04p ET Thursday, June 15, 2017

Dear Friend of GATA and Gold:

Dave Kranzler of Investment Research Dynamics notes today that while the Federal Reserve purports to be raising interest rates, only the shortest-term rates are rising. Longer-term rates are actually falling, Kranzler shows, contradicting claims of a stronger U.S. economy.

Kranzler writes: “This illusion of ‘tighter’ monetary policy serves the purpose of supporting the idea of a strong dollar and enabling a highly orchestrated — albeit temporary — manipulated hit on the gold price using paper gold derivatives.”

Kranzler’s analysis is headlined “Has the Fed Really Raised Rates This Year?” and it’s posted at IRD here:

http://investmentresearchdynamics.com/has-the-fed-actually-raised-rates-…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

END

 

It is about time:  India is said to plan a new gold policy to help reform the beleaguered 19 billion jewelry sector

(courtesy Bloomberg)

India said to plan gold policy reform for $19 billion sector Submitted by cpowell on Fri, 2017-06-16 11:14. Section: By Shruti Srivastava and Swansy Afonso
Bloomberg News
Thursday, June 15, 2017India, which vies with China as the top consumer of bullion, is working on new policies to improve transparency and help expand its $19 billion gold jewelry industry, according to people with knowledge of the matter.The plans being worked out by the finance and commerce ministries along with industry groups should be finalized by the end of March, the people said, asking not to be identified because they aren’t authorized to speak publicly. D.S. Malik, spokesman for the finance ministry, didn’t answer calls to his cellphone, while a spokeswoman for the commerce ministry didn’t reply to an email seeking comment.The start of a spot bullion exchange, to make gold supply more transparent and help enforce purity standards, is under consideration, the people said. An import tax of 10 percent could also be reduced as the government seeks to eliminate smuggling, they said. The plans also include a dedicated bank for the jewelry industry, according to one of the people.The overhaul of India’s disorganized and fragmented gold jewelry industry is meant to bolster confidence among consumers, where the gifting of gold at weddings and festivals or its purchase as a store of value are deeply held traditions. Ensuring quality standards and allowing supply chains to be easily tracked are ways to enhance trust. The estimate for the size of the sector was given by the Mumbai-based India Bullion and Jewellers Association Ltd.The measures could help underpin Indian demand, which is recovering after slumping to a seven-year low in 2016. …… For the remainder of the report:https://www.bloomberg.com/news/articles/2017-06-15/india-said-to-plan-go…

*END

 

Barrick in discussions with the President of Tanzania to end their mining bypass disagreements

 

(courtesy London/Economist)

Tanzania’s firebrand leader takes on its largest gold miner

Submitted by cpowell on Fri, 2017-06-16 11:19. Section:

From The Economist, London
Thursday, June 15, 2017

“If they accept that they stole from us and seek forgiveness in front of God and the angels and all Tanzanians and enter into negotiations, we are ready to do business.”

As conciliatory gestures go, that one by John Magufuli, Tanzania’s president, to Acacia Mining, the country’s largest foreign investor, could hardly have been more fork-tongued.

Nonetheless, two days later John Thornton, head of Barrick Gold, Acacia’s largest shareholder, met Mr. Magufuli to start talks on ending a dispute that has halved Acacia’s market value since the government in March imposed a ban on the export of gold and copper concentrates. It is a mark of the seriousness of the standoff that he is ready to negotiate on all points of contention between the two sides.

The context of the row is increasingly typical of Africa’s mining industry. The Tanzanian government is seeking more tax revenue from a foreign mining firm that was initially wooed into the country by generous tax concessions. The state also wants to generate more value and jobs by smelting Acacia’s concentrates domestically, rather than abroad. …

… For the remainder of the report:

http://www.economist.com/news/business/21723427-row-raises-concerns-mini…

Your early FRIDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    

1 Chinese yuan vs USA dollar/yuan  WEAKER 6.8129(DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES  MUCH WEAKER TO ONSHORE AT   6.8175/ Shanghai bourse CLOSED DOWN 9.32 POINTS OR 0.30%  / HANG SANG CLOSED UP 61.15 POINTS OR 0.24% 

2. Nikkei closed UP 111.44 POINTS OR 0.56%   /USA: YEN RISES TO 111.39

3. Europe stocks OPENED IN THE GREEN        ( /USA dollar index FALLS TO  97.38/Euro UP to 1.1164

3b Japan 10 year bond yield: RISES TO   +.056%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.06/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  44.89 and Brent: 47.55

3f Gold UP/Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.300%/Italian 10 yr bond yield DOWN  to 1.978%    

3j Greek 10 year bond yield FALLS to  : 5.68???  

3k Gold at $1255.15  silver at:16.79 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 32/100 in  roubles/dollar) 57.53-

3m oil into the 44 dollar handle for WTI and 47 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A GOOD SIZED DEVALUATION SOUTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.39 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9749 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0894 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +0.300%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.168% early this morning. Thirty year rate  at 2.791% /POLICY ERROR)GETTING DANGEROUSLY HIGH

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Quiet Start To Quad Witching: Stocks Rebound Around The Globe, BOJ Hits Yen

Today is quad-witching opex Friday, and according to JPM, some $1.3 trillion in S&P future will expire. Traditionally quad days are associated with a rise in volatility and a surge in volumes although in light of recent vol trends and overnight markets, today may be the most boring quad-witching in recent history: global stocks have again rebounded from yesterday’s tech-driven losses as European shares rose 0.6%, wiping out the week’s losses.

USD/JPY climbed to two-week high, pushing the Nikkei higher as the BOJ maintained its stimulus and raised its assessment of private consumption without making a reference to tapering plans, all as expected. Asian stocks were mixed with the Shanghai Composite slightly softer despite the PBOC injecting a monster net 250 billion yuan with reverse repos to alleviate seasonal liquidity squeeze, and bringing the net weekly liquidity injection to CNY 410 billion, the highest in 5 months, while weakening the CNY fixing most since May. WTI crude is up fractionally near $44.66; Dalian iron ore rises one percent. Oil rose with metals. Treasuries held losses as traders focused on Yellen hawkish tone.

The MSCI All Country World Index was up 0.2%, and after the latest global rebound, the value of global stocks is almost equal to that of the world’s GDP, the highest such ratio since th great financial crisis, BBG reported.

The key overnight event was the Bank of Japan which concluded the latest round of central bank meetings and maintained its extraordinary stimulus intact. Governor Kuroda calmed market speculation that an exit- plan communication was under way as he noted that the BOJ is only halfway to its inflation target. The yen dropped versus all of its Group-of-10 peers and was down by 0.3 percent to 111.3 per dollar as of 6:00 a.m. EDT.  The euro rose 0.3 percent to $1.1175.

The dollar stood little changed on a weekly basis as demand for its major peers waned given policy makers outside the U.S. showed no intention of altering their monetary stance

European stocks advanced in a broad rally following two days of declines. Investors bought automakers after solid car sales data, while food and beverage makers led the advance which swept across all European industry group, with Nestle S.A. the biggest gainer after it revealed plans to shake up U.S. operations. U.K. retailer Tesco Plc registered its best quarter in seven years. The Stoxx Europe 600 Index rose 0.6 percent as of 9:58 a.m. in London, paring its weekly decline to 0.6 percent. France’s CAC 40 rose 1 percent, the most among European peers, outperforming ahead of the weekend’s election.

As Bloomberg notes, the latest positive change in mood comes at the end of a difficult week for stocks, with the benchmark European index recovering from the lowest close in almost two months. The markets appear to be shacking off bearish sentiment brought about by the Fed’s third interest rate increase since December. In France, newly elected Emmanuel Macron looks set for an historic majority in the National Assembly on Sunday.

In rates, 10Y yields rose one basis point to 2.17% after rising four basis points in the previous session. The rate dropped on Wednesday to 2.13%, the lowest level since November. U.K. benchmark yield advanced three basis points after the BOE surprised the market with an unexpectedly hawkish vote split in yesterday’s MPC decision. The German 2Y yield jumped to the highest level since November, although it still remains deeply in negative territory.

West Texas crude futures rose 0.6 percent to $44.71 a barrel. Oil is down about 2.4 percent for the week. Gold rose 0.1 percent to $1,254.80. The metal is heading for a second weekly loss, falling 0.9 percent. Copper rose 0.1 percent to $5,669 per ton.

Housing starts and Michigan consumer sentiment reports are scheduled to come out in the U.S. on Friday.

Bulletin Headline Summary from RanSquawk

  • European equities enter the North American open in positive territory on quadruple witching day with tech names providing support
  • A quiet morning in FX land, where we see meandering across the board. There was some early focus on the JPY pairs after the BoJ meeting stuck to the script, but through 111.00, the spot rate is starting to struggle
  • Looking ahead, highlights include US housing starts, Uni. Of Michigan and building permits

Market Snapshot

  • S&P 500 futures up 0.1% to 2,437.25
  • STOXX Europe 600 up 0.6% to 388.26
  • MXAP down 0.05% to 153.94
  • MXAPJ unchanged at 501.51
  • Nikkei up 0.6% to 19,943.26
  • Topix up 0.5% to 1,596.04
  • Hang Seng Index up 0.2% to 25,626.49
  • Shanghai Composite down 0.3% to 3,123.17
  • Sensex up 0.1% to 31,119.92
  • Australia S&P/ASX 200 up 0.2% to 5,774.03
  • Kospi up 0.01% to 2,361.83
  • German 10Y yield rose 2.6 bps to 0.308%
  • Euro up 0.2% to 1.1171 per US$
  • Brent Futures up 0.9% to $47.33/bbl
  • Italian 10Y yield rose 2.7 bps to 1.676%
  • Spanish 10Y yield rose 4.8 bps to 1.464%
  • Brent Futures up 0.9% to $47.33/bbl
  • Gold spot up 0.1% to $1,255.04
  • U.S. Dollar Index down 0.1% to 97.37

Overnight Top News from Bloomberg

  • Mueller said to probe Jared Kushner’s business dealings: Washington Post.
  • Trump Faces Yet Another Senate Probe as Judiciary Panel Gears Up
  • Trump Said to Announce Ban on Doing Business With Cuban Military
  • Eurogroup reaches agreement to approve 8.5 billion euro payout to Greece
  • EU, U.K. Brexit negotiations to start on Monday
  • BOJ keeps policy unchanged; says consumption has ’increased resilience’
  • China’s holdings of U.S. Treasuries rise to six-month high in April
  • Info Daily: China must monitor Fed’s balance sheet unwind plan
  • Bain, INCJ Said to Offer $19 Billion for Toshiba Chip Unit
  • BlackRock, Elliott and Pimco Want These Changes to Finance Rules
  • GE’s $31 Billion Hangover: Immelt Leaves Behind Big Unfunded Tab
  • U.K. Crohn’s Patients to Get Routine Access to J&J’s Stelara
  • European Car Sales Rebounded in May as Economy Buoyed Buyers
  • Global Fund Managers Voice Support for China’s MSCI Entry
  • Booz Allen Falls 13.8% After Disclosing DOJ Accounting Probe
  • Caterpillar Says Three VPs to Retire Amid Rejig
  • U.S. Navy Can’t Find Why F-18 Pilots Running Short of Oxygen
  • Optical Stocks Fall After Finisar’s 1Q Rev. View Misses Estimate
  • N.Y. Subpoenas Fiat Over Possible Use of Diesel Cheating Devices
  • Elliott Backs New BHP Chair Ken Mackenzie, Renews Change Call
  • Microsoft Must Face Claims Porn Potters Were Traumatized

Asian equity markets were mostly higher after the region shrugged off the negative Wall Street price action, where tech resumed its sell-off and participants pondered over the recent Fed rate hike as well as ongoing political woes. ASX 200 (+0.1%) and Nikkei 225 (+0.8%) gained from the open, with exporter names in the latter underpinned by a weaker currency. Shanghai Comp. (-0.3%) and Hang Seng (+0.3%) were mixed with the mainland underperforming as a firm liquidity operation by the PBoC, was overshadowed by credit bubble concerns. 10yr JGBs were relatively flat with some marginal upside seen throughout the session, while today’s BoJ policy decision also provided no fresh insights with the bank sticking to its policy framework. PBoC injected CNY 30bIn in 7-day reverse repos, CNY 160bIn in 14-day reverse repos and CNY 100bIn in 28-day reverse repos, for a net weekly injection of CNY 410bIn vs. Prey. net drain of CNY 10bIn last week

BoJ kept rates unchanged at -0.1% as expected and maintained QQE with Yield Curve Control as expected via 7¬2 votes. BoJ maintained annual pace of JGB holdings at JPY 80tIn and to target 10yr yields at around 0%, while it also kept its economic assessment unchanged in which it stated that the economy turned to moderate expansion.

Top Asian News

  • BOJ Maintains Stimulus as Pressure Rises to Talk About Exit
  • Vanke Said in Talks to Join Chinese Consortium in GLP Bidding
  • CIMB Hires Credit Suisse’s Jefferi as Investment Bank Deputy CEO
  • Indonesian Yields Approach Four-Year Low as Carry Draws Demand
  • Buffett’s Favorite Chart Says ‘Have No Fear’ to India Stock Bull
  • China’s Steel Mills Still Seen Struggling Even as Margins Climb

European markets have seemingly shrugged off a hawkish, busy week, trading in the green throughout morning trade. Individual stock news has contributed to the bullish open, with positive pre-market figures for Tesco, alongside May’s EU new car registrations bolstering the automobile names. The Tech and Energy sectors outperform, with the former supported by the late buying seen in the US tech names yesterday and the latter has been supported by some oil buying from the USD 44/bbl level. Materials trade in the red following continued selling as a result of yesterday’s reports stating that South African Miners will need to be 30% back owned. Fixed income markets have grinded lower as a result of the risk on sentiment, with some European unification evident, as Greece is said to have reached a bailout deal with creditors with the full disbursement expected at the beginning of July. The biggest mover in the bond markets has been Greek paper, with the 2y trading at its lowest yield level since October 15, further the Greece/Germany lOy spread heading for 532bps then 519bps again

Top European News

  • Greece Wins 8.5 Billion Euro Payout as Debt Clarity Deferred
  • Tesco Targets Cheaper, Healthier Food to Get Back in the Game
  • Brexit Talks To Be Pragmatic, Show Sincere Cooperation: Hammond
  • EU May Tweak Resolution Rule Based on Banco Popular: Dombrovskis

In currencies, the Bloomberg Dollar Spot Index fell 0.1 percent, after rising 0.5 percent on Thursday to snap three days of losses. The yen fell 0.4 percent to 111.34 per dollar, after dropping 1.2 percent in the previous session, the most since January.  The euro rose 0.3 percent to $1.1175. A quiet morning in FX land, where we see meandering across the board. There was some early focus on the JPY pairs after the BoJ meeting stuck to the script, but through 111.00, the spot rate is starting to struggle a little with sellers coming in ahead of pre 112.00 offers. EUR/USD has redressed some of the losses seen from the aftermath of the FOMC meeting this week, with ‘over-positioning’ taking its toll with 1.1300 a near term line in the sand. Demand into the lower half of the 1.1100’s has supported for now, with a tentative move on 1.1200 in the making. EUR/GBP is trying to base out also, but is struggling against buyers in Cable who take their lead of the hawkish reflections from the BoE vote split yesterday. 1.2800 looks to be well protected in the meantime, but expect pre 0.8800 to also garner some interest as range trading looks to be the order of the day for the most part.

In commodities, headlines have been thin on the ground this week, with traders taking their cue from the longer-term backdrop(s). This has been headlined by the ongoing drift lower in Oil prices, with recoveries mute as this broad-based selling interest is deterring bargain hunters for now. This looks to be the only major catalyst for a sustained move higher, but with WTI staying below USD45, a move towards USD40 is now widely anticipated. Metals prices have been mixed, but looking at Copper, we see upside levels also contained, with the foray through USD2.60 short lived. On the day, Zinc is outperforming and showing a 1.0%+ gain on the day. Gold prices look to have further to go on the downside if you believe the USD is set to recoup further ground. Technically, USD1225-30 is the next major support point to watch for.

Looking at the day ahead, we’ll receive the May housing starts and building permits data as well as the May labour market conditions index, before ending the week with the flash June University of Michigan consumer sentiment reading. We’ll also hear from the Fed’s Kaplan this evening while EU finance ministers are again due to meet in Luxembourg to discuss economic policy coordination and surveillance. It’s worth noting that on Sunday France will complete the election of its new National Assembly with a second round of voting where Macron is expected to achieve a comfortable legislative majority.

US Event Calendar

  • 8:30am: Housing Starts, est. 1.22m, prior 1.17m; MoM, est. 4.1%, prior -2.6%
  • 8:30am: Building Permits, est. 1.25m, prior 1.23m; MoM, est. 1.71%, prior -2.5%
  • 10am: Labor Market Conditions Index Change, est. 3, prior 3.5
  • 10am: U. of Mich. Expectations, est. 87.6, prior 87.7; 1 Yr Inflation, prior 2.6%; 5-10 Yr Inflation, prior 2.4%

DB’s Jim Reid concludes the overnight wrap

It was a twin move lower for markets yesterday as both bonds and equities sold off. With a more hawkish than expected Fed still very much the focus 10y Treasury yields closed last night up nearly 4bps at 2.165% after touching a low of 2.101% on Wednesday morning immediately following the soft inflation data. Yields are now back to within 4bps of where they were prior to that inflation data. Across the curve, after testing the recent lows in spread, the 2y10y spread was also 2bps higher yesterday at 81bps. It was a similar story in Europe with Bunds (+5.6bps) and OATs (+4.5bps) also making near complete u-turns with European supply congestion also playing a part.

Meanwhile it was a weak day for global equities but the S&P 500 (4th down day in 5) pared bigger losses near the open to only close -0.22%. The underperforming Nasdaq (-0.47%) did the same and has now retraced -2.47% in the last week. The Stoxx 600 (-0.39%) and DAX (-0.89%) also finished in the red not helped by a fairly soft day for commodities. WTI Oil (-0.60%) extended declines further below $45/bbl while a softer day for Gold (-0.55%), Copper (-0.67%) and Aluminium (-0.56%) all put pressure on commodity producers.

However the big story yesterday in markets was the BoE meeting. A slightly more hawkish than expected tone saw Gilt yields rise sharply with the 10y rising 10.6bps to 1.029% and more or less completely reversing Wednesday’s rally. Sterling also rallied as much as +0.81% from its lows although it finished the day little changed. As expected, the MPC voted in favour of holding current policy steady however by a more marginal 5-3 split. That meant that 2 members joined Kristin Forbes in voting for a hike – Michael Saunders and Ian McCafferty. DB’s Mark Wall had been of the view going into the meeting that the mix of data – including the aggravated household real income squeeze via the continuation of accelerating CPI inflation and slowing wage inflation – could see the BoE adopt less hawkish rhetoric, however the opposite happened. Instead the BoE was more hawkish than expected and the risks of a rate hike have increased. That said Mark does not think that this surprisingly hawkish outcome means a rate hike is more likely than not. Indeed he notes that how this 5-3 split resolves itself will depend on three things. First, economic momentum. Any sense of disappointment should entrench the majority. Second, the inflation overshoot. More relevant here is wages than sterling and pass-through. The government’s response to (public sector) pay could be particularly important for how this element of the BoE dilemma resolves. The third point is whether or not the replacements for Forbes and Hogg are hawks. Since this was Forbes’ last meeting the vote being carried forward is a less hawkish 5-2. This will make any upcoming BoE speeches important to keep an eye on.

Prior to the BoE we also got May retail sales data in the UK yesterday. Like Wednesday’s wages data the numbers were disappointing with sales including fuel falling more than expected (-1.2% mom vs. -0.8% expected) resulting in the annual rate dropping to just +0.9% yoy from +4.2%. There was similarly disappointing data for sales excluding fuel. Staying with the UK for a second, it’s worth highlighting that yesterday we got confirmation that Brexit talks will begin on Monday with David Davis and Michel Barnier due to open formal negotiations in Brussels. On top of that the UK government confirmed yesterday  that it will press ahead with the State Opening of Parliament next Wednesday. Sky News was reporting yesterday that a deal between the Conservatives and DUP was “95% done”.

Before we go any further we’ve got the final big central bank meeting of the week to recap this morning with the BoJ having just wrapped up. As expected the BoJ kept monetary policy on hold while also sticking to its pledge to keep 10y JGB yields around zero. The ¥80tn target on JGB purchases was also maintained. The Bank also used its policy statement to reiterate that Japan’s economy “has been turning toward a moderate expansion”. The Bank was also upbeat on consumption but there was no mention of any exit guidance, which will likely be the focus of Kuroda’s press conference due to start now.

The Nikkei and Topix are +0.53% and +0.52% respectively although those gains came prior to the meeting outcome and supported by a weaker Yen (-0.22%) while JGB yields are little moved (10y around 0.048%). Bourses elsewhere in Asia are mixed with the Hang Seng (+0.29%) and ASX (+0.33%) up but the Shanghai Comp (-0.17%) and Kospi (-0.05%) weaker.

Moving on. Away from the BoE the other notable update in Europe yesterday was the news that Greece and its creditors have reached a deal on the next stages of its bailout following a finance ministers meeting in Luxembourg last night. A Eurogroup statement after the meeting stated that the deal “paves the way for a successful completion of the second review of the ECM programme” and that a disbursement of €8.5bn is expected to be approved, helping to remove some of the concerns around a heavy debt repayment schedule next month. The deal is expected to include further deferral of EFSF interest and amortization by up to 15 years. The key sticking point over debt relief remains however and while the IMF has agreed to join in principle, a final decision on debt relief is not expected until next year. The IMF’s Lagarde confirmed last night that the deal “allows us to lock in the gains made by Greece in its reforms and it allows for more time for negotiations to be concluded on the required debt relief”.

Away from this, there was a fair bit of data released in the US yesterday and which in summary was mostly a mixed bag. Most of it was focused on the factory sector. Notable was the softer than expected industrial production reading for May (0.0% mom vs. +0.2% expected) following a +1.1% reading in April (revised up one-tenth). Capacity utilization also slipped one-tenth to 76.6% while manufacturing production was revealed as falling -0.4% mom (vs. +0.1% expected). June data was a bit more optimistic however. The empire manufacturing reading rose 20.8pts to 19.8 and well ahead of expectations (5.0 expected) – it was also the best reading since September 2014. Meanwhile the Philly Fed manufacturing index slipped 11.2pts but still came in at an elevated and better than expected 27.6 (vs. 24.9 expected). Away from this the NAHB housing market index for June declined 2pts to 67. Initial jobless claims fell a further 8k last week to 237k while finally the import price index reading for May fell -0.3% mom reflecting some of the weakness in energy prices.

Looking at the day ahead, this morning in Europe the main focus will be on the final May CPI readings for the Euro area. Q1 wages data in France will also be released. This afternoon in the US we’ll receive the May housing starts and building permits data as well as the May labour market conditions index, before ending the week with the flash June University of Michigan consumer sentiment reading. We’ll also hear from the Fed’s Kaplan this evening while EU finance ministers are again due to meet in Luxembourg to discuss economic policy coordination and surveillance. Before we wrap up it’s worth noting that on Sunday France will complete the election of its new National Assembly with a second round of voting where Macron is expected to achieve a comfortable legislative majority. We’ll have a full wrap-up of that in Monday’s EMR.

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed DOWN 9.32 POINTS OR 0.30%   / /Hang Sang CLOSED UP 61.15 POINTS OR 0.24% The Nikkei closed UP 111.44 POINTS OR 0.56%/Australia’s all ordinaires  CLOSED UP 0.20%/Chinese yuan (ONSHORE) closed DOWN at 6.8129/Oil UP to 44.89 dollars per barrel for WTI and 47.55 for Brent. Stocks in Europe OPENED IN THE GREEN,,      ..Offshore yuan trades  6.8175 yuan to the dollar vs 6.8129 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LOT WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

b) REPORT ON JAPAN

The Bank of Japan leaves policy unchanged.  However they are buying fewer bonds due to the fact that they own most of the bonds

(courtesy zerohedge)

Bank Of Japan Leaves Policy, Economic Outlook Unchanged

As expected by all 43 economists who estimate such things, the Bank of Japan left their policy mix unchanged and in a desperate bid to appear modestly positive about how things are going, maintained that “Japan’s economy has been turning toward a moderate expansion,” adding that that consumer spending “increased its resilience.” Hardly a rousing evaluation of the state of the economy after who-knows-how-many-years of so-called ‘stimulus’.

Following The Fed’s 4th rate hike in 11 years, The Bank of Japan sat on its hands once again…

  • The BOJ maintained its short-term policy rate on some bank reserves at -0.1 percent and…
  • left its target for 10-year government bond yields at around 0 percent.
  • It kept the pace of its asset purchases unchanged at about 80 trillion yen ($700 billion) annually.

As Bloomberg’s Enda Curran notes, looking through the statement, there’s not much new in terms of signalling or a change to the narrative. This may suggest the BOJ is reasonably comfortable with where the economy is headed and policy makers are happy to tread water.

USDJPY chopped around a litle, but NKY futures were entirely unimpressed as Kuroda delivered the anticipated ‘nothing-burger’.

 

The vote to do nothing was 7 to 2 with the two dissenters, Mr. Sato and Mr. Kiuchi, having one more policy meeting — July 19-20 — before their terms are up. Assuming they are sworn in by then, their replacements could change the 7-2 vote tallies that we’ve been seeing.

Kuroda’s news conference today could be interesting. Will he stick to being evasive about the topic of an exit, or will he drop any hints that the BOJ is starting to think about it?

As we noted earlier, the central bank is “technically tapering,” said Hiroshi Shiraishi, senior economist at BNP Paribas in Tokyo. This can be clearly seen in the following chart from Bank of America.

Aside from the a declining supply of bonds held by the private sector, one tactical reason why the BOJ may be buying fewer bonds is its “yield curve control” policy, which aims to keep the yield on 10-year government bonds at zero. This implies it can buy fewer bonds when the yield is close to that target. Wednesday, the yield was at 0.06%.

Previously, Kuroda has acknowledged this slowdown, but has been quick to declare that what effectively amounts to a 35% taper doesn’t signal a retreat from easy-money policies. “At this stage, we are not exiting,” Kuroda said at The Wall Street Journal’s CEO Council meeting in Tokyo on May 16.

end

This will be a huge bankruptcy: Takata/ they are the largest manufacturer of airbags

(courtesy Nikkei/Asia Review) Takata close to filing for bankruptcy protection in Japan

Troubled air bag maker’s liabilities seen at $9bn

TOKYO — Embattled air bag maker Takata is expected to file for bankruptcy protection here as early as this month, likely marking the biggest corporate failure in Japanese manufacturing in the postwar era.

Takata’s liabilities are seen exceeding 1 trillion yen ($9.02 billion) following a massive global recall of air bags linked to deadly explosions. U.S.-based subsidiary TK Holdings’ board is expected to approve a filing for Chapter 11 bankruptcy there later this month.

Related stories

American autoparts maker Key Safety Systems, owned by China’s Ningbo Joyson Electronic, will sponsor Takata’s turnaround process.

A new company created under Key Safety is to purchase Takata operations for about 180 billion yen and continue supplying air bags, seat belts and other products. The shrunken Takata will remain responsible for recall-related liabilities.

Founding family pressured to give up on out-of-court debt settlement

Meanwhile, Takata’s creditor banks are expected to continue providing financial assistance to the company to ensure it can pay its suppliers and deliver products to its clients.

As of October 2016, Takata air bags had killed 11 people in the U.S. alone. The deaths have been blamed on rupturing inflators. Some 100 million units have been recalled worldwide, with the entire process expected to cost about 1.3 trillion yen. Automakers have shouldered most of the burden for now, since Takata claims it cannot determine where the fault for the defect lies and is unable to make “a reasonable estimate of the costs likely to be borne by the group.”

Automakers seek to recoup those costs through the rehabilitation process. Takata’s total liabilities came to 397.8 billion yen as of the end of March. But with the recall costs, that figure will likely climb above 1 trillion yen. The current postwar record for a bankruptcy by a Japanese manufacturer is held by Panasonic Plasma Display, which had 500 billion yen in liabilities when it was liquidated last year.

Takata’s founding family, which controls about 60% of the air bag maker’s stock, originally favored an out-of-court settlement with creditors for the core Japanese unit. But even with partial debt forgiveness by some major creditors, the company could have faced bankruptcy eventually owing to damages paid out to air bag victims and other problems.

To prevent this, automaker clients had insisted on a court-mediated process, which would pin down Takata’s liabilities and make a recovery more likely. The founding family, including Chairman and CEO Shigehisa Takada, appears to have bowed to the pressure.

Takata holds a roughly 20% share of the world’s air bag and seat belt markets. It posted 662.5 billion yen in group sales and a 79.5 billion yen net loss for the year ended in March. Japanese automakers have already accounted for the costs of the ongoing recalls, and would be unlikely to see a significant financial impact from a Takata bankruptcy filing.

(Nikkei)

c) REPORT ON CHINA

Kyle Bass (shortly before the announcement of Anbang’s CEO WU arrest and total collapse in revenue) states that China’s credit bubble is metastasizing and that he is still short the yuan despite attempts by the PBOC to thwart his efforts

(courtesy zero hedge/Kyle Bass)

Kyle Bass: “China’s Credit Bubble Metastasizing”, Still Short The Yuan

Hayman Capital’s Kyle Bass made a brief media appearance today, when he confirmed to Reuters that unlike some other “China tourist bears”, he remains staunchly negative on China, saying he is still short the Yuan because problems from China’s credit bubble are “metastasizing.”

Speaking to Reuters’ Jennifer Aboan, Bass said that “what the public narrative is and what they have been doing behind the scenes are two completely different stories,” and added that “China has been masterful controlling the public narrative. As a fiduciary, I have no idea how anyone can invest in China.

Discussing his specific trades, Bass said Hayman’s yuan short is a “core” position and has “always been meaningful.” He also identified “fresh” warning signs that China’s credit problems are spreading.

First, Bass pointed to the yield on five-year MTNs, which are trading at 5%, exceeding the bank loan rate, about 4.75%, for the first time. We first highlighted this paradoxical “cross” one month ago when we observed that “rising base funding costs and interbank credit risk concerns have pushed banks’ cost of borrowing beyond the rate they charge customers for loans for the first time in history.”

Bass then noted last month’s downgrade of China by Moody’s – the first since 1989 – which however did not have a material impact on China so far, aside from prompting a panicked response by Beijing which actually sent the Yuan surging as the PBOC engaged every trick in the book to prevent Yuan bears from gaining momentum, including the recent change in the Yuan fixing mechanism. Next, he discussed his concerns about China’s shadow-banking system and the country’s capital controls as “multi-nationals can’t get their money out.”

Indeed, CBRC vice-chairman Cao Yu said China established 12,836 creditor committees by the end of last year, to help manage credit of 14.85 trillion yuan. Bass said this amount represents 20 percent of the loans in Chinese banks, net of mortgages.

Going back to the original “bear” thsis, Bass also said he believes that non-performing loans at Chinese financial institutions are currently approximately 20%, not the 1.7% rate that has been widely reported. “14.85 trillion is more than all of the equity in the entire banking system,” he said. “The Chinese have masterfully swept all of this under the rug.”

Bass also addressed the recent change to China’s Yuan fixing mechanism and said Beijing has been looking to force out one-way bearish bets on the yuan with the previously discussed second change this year in how the currency’s guidance rate is calculated. “This fixing mechanism throws a bit of unknown into the calculation,” he said.

Still, he said he was not throwing in the towel on his short position. “The PBOC wants you to do that,” Bass said. “I don’t know how they can hold this all together. The numbers are telling me that we are right. The numbers are getting so bad so quickly.”

Finally, a couple other things Bass should have thrown in the mix are the recent reemergence of China’s “ghost collateral” as a major risk factor, one which as Reuters framed, “lax lending practices and overvalued collateral spurred the U.S. financial crisis in 2008. Now, banks in China face risks of their own as fraudulent borrowers and corrupt bankers burden the financial system with loans lacking genuine collateral.” There is also the recent, rapid rise in interest rates which as explained last night, has led to a record plunge in net corporate bond financing, as companies find it increasingly difficult to issue new and rollover existing debt, especially that maturing in under one year.

Reuters notes as much, pointing out that “as credit conditions have tightened in the world’s second-largest economy, borrowing costs for companies have been rising. Banks are raising lending rates, including mortgage rates, and are wary of taking on more exposure to overheated sectors such as property. That trend will set the stage for a gradual slowdown in economic activity in coming months, analysts believe, though no one foresees a sharp decline as stability is the watchword ahead of a major political leadership reshuffle later this year”

Finally, as noted earlier this week, the near record plunge in China’s credit impulse remains a major deflationary risk, and one which remains unclear how it will be resolved, unless Beijing gives up on its latest deleveraging ambition and once again engages in a full bore liquidity

Then again, maybe none of the above matters. As Zhu Ning, China’s “Bubble Prophet” remarked laconically earlier this week “China may be different.”

END

A very big story!!

Beijing totally lied about Chinese inflows of USA treasuries last month.  Instead of inflows the true number is a 21 billion uSA outflow according to numbers provided by Goldman Sachs.  No wonder Chinese citizens are bidding up bitcoin and also buying gold.

(courtesy zero hedge)

 

Beijing Lied Again: Goldman Finds Chinese FX Outflows Are Accelerating, Hitting 4 Month Highs

According to official PBOC data released two weeks ago, the Chinese foreign exchange stockpile rose by $24 billion in May, the fourth consecutive month of increases, taking it to $3.056 the highest level this year, easing concerns about ongoing capital flight and preventing a self-fulfilling prophecy of capital outflows prompting more capital outflows. There is just one problem: China appears to have lied again.

Based on a separate gauge released overnight, which tracks onshore FX settlement as well as cross-border RMB flows, what happened in May was the opposite of what the PBOC reported as net renminbi outflows accelerated to $21 billion, up from $13 billion in April, and the highest monthly capital flight in 5 months. And, as Goldman writes, “the persistence of FX outflows might have contributed to the recent shift in the authorities’ CNY management strategy” and will certainly explain last month’s unexpected second revision to the Yuan fixing mechanism.

What is just as concerning, according to the revised FX flow calculation methodology, China has not had a single month of FX inflows since its mid-2015 Yuan devaluation as shown in the chart below.

Goldman explains:

We focus on two separate sets of SAFE data to gauge the underlying FX flow situation:

  • According to the SAFE dataset on “onshore FX settlement”, net FX demand by non-banks onshore in May remained low at US$4.0bn (vs. US$2.8n in Apr). This is composed of net outflow of US$7.4bn via net outright spot transactions and net inflow of US$3.4bn via net freshly-entered forward transactions.
  • Another SAFE dataset on “cross-border RMB flows” shows that net flow of RMB from onshore to offshore rose to US$17.1bn in May (vs. US$10.0bn in Apr). The PBOC reportedly relaxed to some degree the restrictions on outbound RMB flow in mid-April. This might have contributed to the increase in RMB outflow.

Our preferred gauge of underlying flow therefore suggests a total net FX outflow of US$21bn in May (US$4.0bn from net FX demand onshore plus US$17.1bn in FX outflow routed through the CNH market). Exhibit 1 shows our FX flow measure.

 

While the underlying flow picture has remained much better than last year, the persistence of net FX outflow (even as USD/CNY was broadly stable) might have been one reason for the recent shift in the authorities’ CNY management strategy. In particular, the abrupt step-appreciation in the CNY two weeks ago might be partly intended to stem any entrenched speculative outflow pressures. Also, the introduction of the counter-cyclical factor in the CNY fixing mechanism could potentially allow the authorities to increase their CNY support through “signaling” rather than only through actual FX sales.

Exhibit 1: Our measure of FX outflows rose moderately to US$21bn in May

If Goldman’s take is accurate, and in the past this calculation has proven to be far more accurate than the official monthly reserve data from the PBOC, it has implications for not only the future value of the Chinese currency – considered by many China’s fulcrum security – which is now artificially stronger due to “fake data”, but also for the Chinese economy, because if Beijing is resorting to outright misreporting on an dataset that can be easily double-checked, it would suggest that the turmoil inside China’s financial system is far greater than what is officially reported. The good news is that for now at least, the discrepancy between the official data and the calculated outflow remains relatively subdued.

Goldman’s take would certainly explain the relentless bid for bitcoin, which this morning has rebounded over 20% from yesterday’s “crash” lows.

Finally, if Chinese reserves are still being drained, then the recent Bloomberg “trial balloon” that China is “ready to buy more Treasuries as the Yuan stabilizes” was merely an attempt by Beijing to get a better price into which to sell US TSYs as it seeks to offset the capital flight.

END

4. EUROPEAN AFFAIRS  We brought to you an important story yesterday where the USA is going to vote on further sanctions against Russia for their “meddling into the uSA election”.  Germany has had enough.  Germany et other European nations are threatening with retaliation. a must read..

(courtesy zerohedge)

“That Must Not Happen”: Germany Threatens US With Retaliation Over New Russia Sanctions

One day after the Senate almost unanimously passed a bill to impose new sanctions on Russia, an unexpected outcry against the US decision emerged from two of America’s closest allies, Germany and Austria, who yesterday slammed the new sanctions and accused the U.S. of having ulterior motives in seeking to enforce the energy blockade, which they said is trying to help American natural gas suppliers at the expense of their Russian rivals. And they warned the threat of fining European companies participating in the Nord Stream 2 project “introduces a completely new, very negative dimension into European-American relations.”

Today’s the unexpected fallout from the latest round of US sanctions has escalated, and according to Reuters, Germany has threatened to retaliate against the United States if the new US sanctions on Russia end up penalizing German firms, which they almost will as it foresees punitive measures against entities that provide material support to Russia in building energy export pipelines. Such as Germany, Austria and host of other European nations. Berlin is concerned that if passed in the House, the sanctions will pave way for fines against German and European firms involved in Nord Stream 2, a project to build a pipeline carrying Russian gas across the Baltic.

And it’s not just the Germans who are sweating: among the European companies involved in the project are German oil and gas giant Wintershall, German energy trading firm Uniper, Royal Dutch Shell, Austria’s OMV and France’s Engie. In other words, if the Senate proposed sanctions pass, the US will have to fine virtually every energy giant in Europe.

Quoted by Reuters, Merkel’s spokesman Steffen Seibert described the Senate bill, which must be approved by the House of Representatives and signed by Trump before it becomes law, as “a peculiar move”. He said it was “strange” that sanctions intended to punish Russia for alleged interference in the U.S. elections could also trigger penalties against European companies. “That must not happen,” said Seibert.

Confirming the seriousness of Germany’s resolve, in an interview with Reuters, German Economy Minister Brigitte Zypries said “Berlin would have to think about counter-measures” if Trump backed the plan. “If he does, we’ll have to consider what we are going to do against it.

The unexpectedly sharp response from Germany comes at a time of deep strain in the transatlantic relationship due to shifts in U.S. policy and a more confrontational rhetoric towards Europe under Trump, who has not only demanded more funding for NATO, slammed Germany over its trade balance and cheap currency but also most recently exited Europe’s precious Paris climate treaty, Ironically, the part of the bill that threatens to impair the already precarious relations with Europe was introduced by some of the president’s top critics, including Republican hawk John McCain.

As Reuters notes, “they are intent on limiting Trump’s ability to forge warmer ties with Russia, a key foreign policy pledge during his campaign for the presidency, but once he has been unable to deliver on amid investigations into alleged Russian meddling in the U.S. election.” Judging by Germany’s response this attempt to further alienate Russia may backfire dramatically, not only alienating Berlin but bringing Europe and Russia closer, now that the Qatar gas pipeline – courtesy of Saudi Arabia – is a non-starter.

Back to Zypries who continued to lash out at the US saying “I regret that the joint approach of Europe and the United States on Russia and sanctions has been undermined and abandoned in this way.”

What she may not understand is that in the US – at least for the vast majority of the media – the only thing that matters now is the anti-Russia narrative, and Congress will do anything to perpetuate that. If that means hurting the income statement of a handful of “ally” corporations, so be it: there are newspapers to sell, after all.

In addition to Germany, France and the European Commission also urged the United States to coordinate with its partners on such matters. “For several years, we have underlined to the United States the difficulties that extraterritorial legislation spark,” a French foreign ministry spokesman told reporters.

Finally, some European diplomats said they fear the threat of new measures out of Washington may harden Germany’s defense of Nord Stream and complicate already difficult talks among EU nations over whether to seek joint talks with Russia over the pipeline. “This is not helpful now. It tends to stir up desires to protect our territorial space,” one EU diplomat said, clearly another European who does not understand that when it comes to promoting US policy, whatever it may be, foreign sovereignty – even that of friendly nations  – is never a concern.

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

ISIS LEADER/BAGHDADI/RUSSIA

Russia reports that Baghdadi was killed (again)  in a Russian airstrike last month

(courtesy zero hedge)

ISIS Leader Baghdadi Reportedly Killed In Russian Airstrike

ISIS leader Abu Bakr al-Baghdadi was reportedly killed during a Russian airstrike late last month in Raqqa that also claimed the lives of several other high-ranking ISIS leaders, according to the Russian Defense Ministry.

“According to information, which is being checked through various channels, IS leader Ibrahim Abu-Bakr al-Baghdadi was also present at the meeting and was killed as a result of the strike,” the ministry said in a statement.

Минобороны России

@mod_russia

Russian Defence Ministry reports about the elimination of a number of leaders of ISIS in by Aerospace Forces http://s.mil.ru/2rCBGpG 

Russian aircraft carried out airstrikes near the (now former) ISIS capital of Raqqa in northern Syria on May 28, the ministry said. The strikes targeted a meeting of high-ranking Islamic State chiefs where al-Baghdadi was said to be present, Reuters and Russia Today reported. The ISIS leaders had gathered to discuss “routes for the exit of militants from Raqqa through the so-called ‘southern corridor’.”

Al-Baghdadi could be among about 30 Islamic State commanders killed by the attack, the ministry added though it provided no explanation for the delay in reporting the strike, which is said also killed about 300 Islamic State fighters, Bloomberg added.

The US-led coalition has not confirmed the Russian reprort “We cannot confirm these reports at this time,” said Colonel Ryan Dillon, a military spokesman, in a statement.

Others raised doubts about the likelihood that Baghdadi died in the strikes. Rami Abdulrahman, director of the Syrian Observatory for Human Rights, said that according to his information, Baghdadi was located in another part of Syria at the end of May.

“The information is that as of the end of last month Baghdadi was in Deir al-Zor, in the area between Deir al-Zor and Iraq, in Syrian territory,” he said by phone.

 

Questioning what Baghdadi would have been doing in that location, he said: “Is it reasonable that Baghdadi would put himself between a rock and a hard place of the (U.S.-led) coalition and Russia?”

Considered the leader of ISIS, Abu Bakr al-Baghdadi, Born Ibrahim al-Samarrai, is a 46-year-old Iraqi who broke away from al Qaeda in 2013. Since the US-led coalition became involved in the battle against ISIS back in 2014, al-Baghdadi’s death has been reported a handful of times, but never confirmed. The ISIS leader is reclusive; the last public video footage of Baghdadi shows him dressed in black clerical robes declaring his caliphate from the pulpit of Mosul’s medieval Grand al-Nuri mosque back in 2014, according to Reuters.

To be sure, reports of Baghdadi’s death may be – once again – greatly exaggerated: as Bloomberg reminds us, there have been several previous unconfirmed reports of his death, including in March 2015 and in June 2016, that al-Baghdadi was seriously wounded in air strikes carried out by U.S.-led coalition forces. In March 2017, U.S. defense officials said he left Mosul before Iraqi forces began their offensive there.

end

 

AFGHANISTAN/USA

Afghanistan is nothing but a basket case: Trump orders 4,000 more troops into the country trying to break the stalemate in the war that is now 12 yrs old:

(courtesy zerohedge

 

Pentagon To Send 4,000 Troops To Afghanistan In Trump’s Largest Deployment Yet

Two days after Trump ceded unilateral authority on Afghan troop deployments to the Department of Defense, the Pentagon wasted on time and according to AP, the Pentagon will send 4,000 additional American forces to Afghanistan to support existing forces and in hopes of breaking a stalemate in a war that has now been passed on to a third U.S. President. The deployment will be the largest of American manpower under Donald Trump’s young presidency.

According to AP, the decision by Defense Secretary Jim Mattis could be announced as early as next week, and was prompted by “the rising threat posed by Islamic State extremists, evidenced in a rash of deadly attacks in the capital city of Kabul, has only fueled calls for a stronger U.S. presence, as have several recent American combat deaths.” Asked for comment, a Pentagon spokesman, Navy Capt. Jeff Davis, said, “No decisions have been made.”

Trump’s decision Tuesday to give Mattis authority to set force levels in Afghanistan mirrored similar powers he handed over earlier this year for U.S. fights in Iraq and Syria. The change was made public hours after Sen. John McCain, the Senate Armed Services Committee’s Republican chairman, blasted Mattis for the administration’s failure to present an overarching strategy for Afghanistan. McCain said the U.S. is “not winning” in Afghanistan, and Mattis agreed.

 

The finality of the decision isn’t entirely clear. While Trump has handed over the troop level decision-making, there is nothing preventing him from taking it back.

 

Mattis has repeatedly stressed that increasing the number of U.S. troops in Afghanistan would take place within a broader, long-term strategy for stabilizing Afghanistan. In congressional testimony this week, he said the strategy will take into account regional influences, such as Pakistan’s role as a Taliban sanctuary. Regional powers Iran, India and China, which all have political stakes in the fate of Afghanistan, also must be considered.

The bulk of the additional troops will train and advise Afghan forces, according to the administration official, who wasn’t authorized to discuss details of the decision publicly and spoke on condition of anonymity. A smaller number would be assigned to counterterror operations against the Taliban and IS, the official said.

From the Afghan side, reactions were split: Daulat Waziri, spokesman for Afghanistan’s defense ministry was reluctant to comment on specifics Friday but said the Afghan government supports the U.S. decision to send more troops. “The United States knows we are in the fight against terrorism, ” he said. “We want to finish this war in Afghanistan with the help of the NATO alliance.”

However, another Afghan lawmaker, Nasrullah Sadeqizada, however, was skeptical about additional troops and cautioned that the troop surge should be coordinated with the Afghan government and should not be done unilaterally by the United States. “The security situation continues to deteriorate in Afghanistan and the foreign troops who are here are not making it better,” he said.

The gamble to send even more troops in Afghanistan is a big one for the president who inherited America’s longest conflict with no clear endpoint or a defined strategy for American success, though U.S. troop levels are far lower than they were under Presidents Barack Obama and George W. Bush. In 2009, Obama authorized a surge of 30,000 troops into Afghanistan, bringing the total there to more than 100,000, before drawing down over the rest of his presidency.

Trump, who barely spoke about Afghanistan as a candidate or president, concentrating instead on crushing the Islamic State group in Syria and Iraq, may be underestimating the potential risk he faces by sending more troops in harms way. His predecessors both had hoped to win the war. Bush scored a quick success, helping allied militant groups oust the Taliban shortly after the Sept. 11, 2001, attacks, before seeing the gains slip away as America’s focus shifted to the Iraq war. In refocusing attention on Afghanistan, Obama eliminated much of the country’s al-Qaida network and authorized the mission that killed Osama bin Laden, but failed to snuff out the Taliban’s rebellion.

Obama set a cap a year ago of 8,400 troops in Afghanistan after slowing the pace of what he hoped would be a U.S. withdrawal. Nevertheless, there are at least another 2,000 U.S. troops in Afghanistan not included in the official count. These include forces that are technically considered temporary even if they’ve been in the war zone for months.

That said, Mattis’ deployment of more troops will be far smaller than Obama’s.  While the new troops could raise fears of mission creep, Mattis told lawmakers this week he didn’t envision returning to the force levels of 2010-11, when Obama thought he could pressure the Taliban into peace talks. Despite heavy losses, the Taliban fought on and in recent months appear to be gaining traction.

Meanwhile, this is the kind of news that awaits Trump: there have been almost 2,400 U.S. military deaths in Afghanistan since 2001. Three U.S. soldiers were killed and another was wounded in eastern Afghanistan this weekend in an attack claimed by the Taliban.

6 .GLOBAL ISSUES 7. OIL ISSUES

Rig count has now peaked for the 22nd week and this will without a doubt cause increase production from the shale boys

(courtesy zerohedge)

Shale Efficiency Has Peaked For Now As Rig Count Surges For 22nd Straight Week

For the 22nd week in a row, the number of US oil rigs rose (up 6 to 747) to the highest since April 2015.

Given the historical relationship between lagged prices and rig counts, we suspect the resurgence in rigs may begin to stall…

Oil is headed for the longest run of weekly losses since August 2015 as OPEC member Libya restored production and the surplus in the U.S. shows little sign of abating.

“Inventory levels remain stubbornly high,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis.

 

“The reality is, the things that have caused this trading range remain in place. Nothing’s changed.”

US Crude Production from the Lower 48 rebounded this week (after a modest fall the week before) to new cycle highs…

 

The growth in rigs has been almost entirely in The Permian…

But, as Reuters reports, while cash, people and equipment are pouring into the prolific Permian shale basin in Texas as business booms in the largest U.S. oilfield, one group of investors is heading the other way – concerned that shale may become a victim of its own success.

Eight prominent hedge funds have reduced the size of their positions in ten of the top shale firms by over $400 million, concerned producers are pumping oil so fast they will undo the nascent recovery in the industry after OPEC and some non-OPEC producers agreed to cut supply in November.

 

The funds, with assets of $286 billion and substantial energy holdings, cut exposure to firms that are either pure-play Permian companies or that derive significant revenues from the region, according to an analysis of their investments based on Reuters data.

 

“Margins will continue to be squeezed by a 15 to 20 percent increase in service costs in the Permian basin,” said Michael Roomberg, portfolio manager of the Miller/Howard Drill Bit to Burner Tip Fund.

Which, despite the forecasts for increasing production, fits with OilPrice.com’s Peter Tertzakian warning that shale efficiency has peaked… for now.

Learning takes time and effort. But a good education pays off.

North America’s oil industry has been in school for the past three years, studying how to become more productive in a fragile $50-a-barrel world. Many companies in the class of 2017 have graduated and are now competing hard for a greater share of global barrels.

Having said that, North America’s education on how to make oilfields more productive appears to be stalling. After a breathtaking uphill sprint, productivity data from the U.S. Energy Information Agency (EIA) shows that the last few thousand oil wells in top-class American plays may have hit a limit—at least for now.

Our Figure this week shows a classic S-curve learning pattern in the mother lode of all oil plays: the Permian Basin. Slow improvements to rig productivity (2012 to 2015) were followed by a steep period of rapid learning (2015 to 2017). Eventually limitations set in and advancement quickly stalled upon mastering new processes (2017 to the present).

(Click to enlarge)

As with many things in life it’s repetition that leads to mastery. Getting to know the rocks better and using progressively better techniques to extract the hydrocarbons facilitate learning in the oil and gas business. Each subsequent well that’s drilled yields a better understanding on how to drill and extract the oil buried several kilometers beneath a prospector’s feet. Trial, error and breakthroughs through repetitive drilling have been a longstanding hallmark of this 150-year-old business.

The “light tight oil” (LTO) revolution began in North America circa 2010. It took about 30,000 wells and three years before the learning in the Permian Basin kicked in. The next 20,000 wells yielded an impressive doubling of productivity. But it was innovation from the following 10,000 wells when mastery set in; by the time the 60 thousandth well was drilled the amount of new oil produced by a single drilling rig (averaged over a month) more than tripled to 700 B/d.

Aside from learning more about the rocks, the following six factors have contributed to the tight oil learning curve:

1. Walking rigs – Assembling and dismantling rigs for each new well used to be an unproductive, time consuming process. Wrenches and bolts are passé; new rigs “walk” on large well pads needling holes in the ground like a sewing machine on a patch.

 

2. Bigger, better gear – From drill bits to motors, pump and electronic sensors, all the gear on a rig is now more powerful and more precise.

 

3. Longer lateral wells – A horizontal well is like a trough that gathers oil in the rock formation. Why stop at one kilometer when you can drill out two or three with the better gear?

 

4. Fracturing with greater intensity – Hydraulic fracturing used to be a one-off, complicated process. Today, liberating tight oil is like unzipping a zipper down the length of a lateral well section.

 

5. Smarter, better logistics – Idle time on well sites can cost tens of thousands of dollars an hour. Modern supply chain management and logistics are helping operators use every hour of the clock more cost effectively.

 

6. ‘High grading’ of prospects – Low oil prices culled the industry’s spreadsheets of uneconomic play areas. Activity migrated to high quality ‘sweet spots’, which are turning out to be more plentiful than originally thought.

How much better can it all get? 

The data in our chart, and from other plays, suggests that the collective learning from these factors may have peaked; ergo a high school conclusion might lead us to believe that the golden geese—tight oil wells drilled into prolific plays like the US Permian and Eagle Ford—may have finally finished laying bigger and bigger eggs.

But it’s not wise to be fooled into that sort of undergraduate thinking. Productivity may have stalled for now, but the learning is paying off. The rate of output growth in the new genre of light tight oil plays isn’t about to lose momentum around the $50/B mark.

Learning is infectious. And what good student starts from the proverbial “square one?” Only fools reinvent the wheel. Knowledge gained from American “tight oil” plays is spreading to other plays and has already spread north into Canada where conditions favour copycat learning. Plays like the Montney and Duvernay are already climbing up their learning curves.

All this learning sounds like bad news for oversupplied oil markets. Yet there is a flip side: The good news for North America is that not everyone is going to the same school. Those on the other side of the world aren’t drilling thousands of wells from which they can learn. They’re relying on OPEC valve closures to save their competitiveness in the old-school way of doing things.

The irony is that OPEC’s artificially supported oil price is tuition for North America’s industry. On their tab we’re learning how to produce more oil at lower prices.

end

 

Libya is exempt from all OPEC production cuts. Now the state’s national oil company has made a deal with Germany’s Wintershall to commence production on their assets in Libya which will increase production by over 20% from their current 830,000 barrels per day.

(courtesy Dave Forest/OilPrice.com)

 

Did This Backroom Deal Just Bust OPEC’s Control On Oil Prices?

Authored by Dave Forest via OilPrice.com,

Libya has been one of the biggest x-factors in the global crude markets the past year. With on-again, off-again production in this key nation alternately supporting and suppressing prices.

But news this week suggests things are looking up for Libya’s crude output.

And down for global oil markets.

Reuters reported that Libya’s National Oil Company has struck a backroom deal with German energy developer Wintershall, which will see that firm restart a major chunk of oil production in the east of the country.

The Wintershall assets covered by the deal have production potential of 160,000 b/d. But have been shut-in since earlier this year after a dispute broke out between the company and the Libyan government over an alleged $900 million in unpaid taxes.

The two parties however, said Tuesday they have reached an “interim arrangement” to end the dispute. Opening the door for Wintershall’s significant swath of production to return to market.

That would be a big happening for Libya’s overall oil output. The country is currently producing an estimated 830,000 b/d — meaning a return of the Wintershall fields would lift national production by nearly 20 percent overnight.

Such a rise would continue an upward trend in Libya’s production the last few months. With production having been as low as 700,000 b/d as recently as March.

Libyan officials said they are indeed targeting production of 1 million barrels per day by the end of July. Meaning the crude market might have a lot more supply coming over the next six weeks.

All of which is critical for global crude prices. With Libya being exempted from OPEC production quotas — and thus one of the few nations on Earth free right now to ramp up output and exports.

Stats this week in fact showed that Libya’s rise the last few months is having a notable effect on supply. With OPEC’s production for May coming in 336,000 barrels higher than the previous month — at 32.1 million barrels per day.

Much of that rise was due to Libya’s surging output — with contributions from Iraq and Nigeria. Watch to see if Libyan production continues to lift overall supply, which could further dampen recently-falling oil prices.

Here’s to the odd man out.

8. EMERGING MARKET

.

end

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings FRIDAY morning 7:00 am

Euro/USA   1.1164 UP .0015/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA RAISING INTEREST RATES AGAIN/EUROPE BOURSES ALL IN THE GREEN 

USA/JAPAN YEN 111.39 UP 0.394(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2764 UP .0004 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT

USA/CAN 1.3232 DOWN .0025 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS FRIDAY morning in Europe, the Euro ROSE by 15 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1164; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  DOWN9.32 POINTS OR 0.30%     / Hang Sang  CLOSED UP 61.15 POINTS OR 0.24% /AUSTRALIA  CLOSED UP 0.20% / EUROPEAN BOURSES OPENED ALL IN THE GREEN 

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this FRIDAY morning CLOSED UP 111.44 POINTS OR 0.56%

Trading from Europe and Asia:
1. Europe stocks  OPENED ALL IN THE GREEN

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 61.15 POINTS OR 0.24%  / SHANGHAI CLOSED DOWN 9.32 POINTS OR 0.30%   /Australia BOURSE CLOSED UP 0.20% /Nikkei (Japan)CLOSED UP 111.44 POINTS OR 0.56%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1254.60

silver:$16.77

Early FRIDAY morning USA 10 year bond yield: 2.168% !!! UP 0 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.791, UP 1  IN BASIS POINTS  from THURSDAY night.

USA dollar index early FRIDAY morning: 97.38 DOWN 6  CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 2.919%  UP 6 in basis point(s) yield from THURSDAY 

JAPANESE BOND YIELD: +.056%  UP 3/10  in   basis point yield from THURSDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.456%  UP 4 IN basis point yield from THURSDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.986 UP 2   POINTS  in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 47 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.276% DOWN 1 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY

Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM 

Euro/USA 1.1189 UP .0041 (Euro UP 41 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110.788 DOWN  0.121 (Yen UP 12 basis points/ 

Great Britain/USA 1.2784 UP 2 ( POUND UP 24 basis points) 

USA/Canada 1.3230 DOWN .0028 (Canadian dollar UP 28 basis points AS OIL ROSE TO $44.72

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This afternoon, the Euro was UP by 41 basis points to trade at 1.1189

The Yen ROSE to 110.88 for a GAIN of 12  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 24  basis points, trading at 1.2784/ 

The Canadian dollar ROSE by 28 basis points to 1.3230,  WITH WTI OIL FALLING TO :  $44.72

The USA/Yuan closed at 6.8105/ the 10 yr Japanese bond yield closed at +.056% UP 3/10 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 1 IN basis points from THURSDAY at 2.151% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.781  UP 0  in basis points on the day /

Your closing USA dollar index, 97.18  DOWN 26 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 1:00 PM EST

London:  CLOSED UP 44.18 POINTS OR 0.60%
German Dax :CLOSED UP 60.92 POINTS OR 0.48%
Paris Cac  CLOSED UP 46.42 POINTS OR 0.89% 
Spain IBEX CLOSED  UP  59.80 POINTS OR 0.56%

Italian MIB: CLOSED  UP 93.22 POINTS/OR 0.45%

The Dow closed UP 24.38 OR 0.11%

NASDAQ WAS closed DOWN 13.74 POINTS OR 0.22%  4.00 PM EST
WTI Oil price;  44.72 at 1:00 pm; 

Brent Oil: 47.28 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.75 DOWN 10/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES T0  +0.276%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$44.72

BRENT: $47.33

USA 10 YR BOND YIELD: 2.151%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.773%

EURO/USA DOLLAR CROSS:  1.1198 UP .0049

USA/JAPANESE YEN:110.86  DOWN 0.134

USA DOLLAR INDEX: 97.13  DOWN 30  cent(s) ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2779 : UP 19 POINTS FROM last NIGHT  

Canadian dollar: 1.3217 UP 40  BASIS pts 

German 10 yr bond yield at 5 pm: +0.276%

END

And now your more important USA stories which will influence the price of gold/silver TRADING IN GRAPH FORM FOR THE DAY ‘Bricks & Slaughter’ – Amazon Deal Slams Stocks As Yield Curve Crashes  

Seemed appropriate…

 

As a reminder, US economic data has not disappointed this much since August 2011… This is the 13th straight week of disappointment for US economic data, and this week is the 2nd worst weekly economic disappoitment since June 2011.

 

The week saw Tech stocks hurt the most (this is the biggest two-week drop for S&P Tech Sector since Brexit) leaving the S&P scrmabled barely into the green, Trannies best, but Nasdaq and Small Caps the biggest losers…

 

(NOTE the panic bid into the close as quad witch closed out…)

 

VIX was crushed into the close as quad-witch caught up with the market. in a desperate attempt to close S&P green… even USDJPY was dragged in to play too

 

Retailers were the worst hit on the week as Amazon’s acquisition rippled through almost everything…

 

While value and growth remain divergent, we note that on the week, growth outperformed value…

 

Despite AMZN’s big bounce (paying for its WFM acquisition in market cap gains), it remains well below last Thursday’s pre-plunge close…

 

This is the worst drop for FANG Stocks since the post-election hangover…

 

Of course, today’s headlines were all about Amazon (and Whole Foods)…

 

Notably the correlation between the market and retailer stocks has collapsed…

 

Despite the 36-hour meltup in the dollar after The Fed hiked rates, the Dollar Index is closing lower for 3rd week in a row, at its lowest weekly close since September

 

CAD and AUD were strongest on the week and JPY weakest…

 

Treasury yields fell on the week, retracing yesterday’s loses today back to pre-Fed lows…

 

The yield curve collapsed…

 

Notably, HY Energy credit risk is beginning to get very serious again

As RBC notes, US HY Energy spreads hit 7 month highs yesterday, not surprisingly as crude broke to new lows.  Here is further color from my man on the desk Dave Schulte, who highlights that some of these sellers are actually now harvesting LOSSES as opposed to taking-profits, which is amazing considering the enormous scale of the rally seen since early last year:

“High yield E&P bonds tracked oil prices downward, hitting a succession of lower lows as the week progressed. Crude-focused beta credits (i.e. lower quality assets and/or high financial leverage) are weaker by as much as 6.5pts. Higher quality names (good assets in core plays with manageable capital structures) held up better, in part due to greater interest rate sensitivity, closing the week 2-3pts lower.

 

Trading activity was very balanced until today; buyers now seem to be on hold, leaving sellers to push paper lower despite a modest uptick in crude.”

The historically tight correlation between breakevens and risk appetite for stocks has collapsed with the former tumbling below pre-Trump levels as stocks hit record highs…

 

Commodities were all broadly lower on the week, despite a weaker dollar week-over-week..

 

This is the 4th weekly drop in a row – the longest losing streak for crude since Aug 2015, closing at the lowest weekly close since the election…

 

Notably, the copper-to-crude ratio has reached back above the 5.5x historical resistance level…

 

Gold was sold once again after tagging pre-Trump levels…

 

Bonus Chart: WTF!!!

END

 

We now generally get two Fed accounts on GDP:

a) Atlanta Fed

b) New York Fed

today, the New York Fed slashed  Q2 GDP forecasts down to 1.86% from earlier estimates of 3%

We await the Atlanta Fed’s response!

(courtesy NYFed/zero hedge)

 

NY Fed Crashes Trump’s Party, Slashes Q2 GDP Forecast

A day after President Trump proclaimed Q2 GDP “numbers are going to be shockingly good,” The New York Fed has slashed its forecast for America’s growth to just 1.86%.

Wednesday…

“I think this quarter’s GDP numbers are going to be shockingly good given all the facts we’re seeing”

Thursday…

“I think some very good numbers are going to be announced, by the way, in the very near future, as to GDP,”

Friday…

Thanks to the collapse in housing data this morning,The New York Fed has slashed its growth expectations for Q2 GDP to just 1.86% (from 3% in March)…

NOTE – the factors weakening the forecast are ‘hard’ data points (red squares) while the surveys are adding to GDP.

It is hardly surprising that both The Atlanta Fed (which cut its guess from 3.2% to a series low 2.878%) and New York Fed are cutting their expectations as US macro data disappoints gravely…

Given the plunge in US Macro data, we wonder if President Trump meant the GDP numbers are going to be “shocking.”

end

This is rather stunning; The Department of Justice warns USA citizens not to trust stories based on “anonymous officials”.

Trump does not offer an opinion on this as of yet.

(courtesy zero hedge)

In Stunning Announcement, DOJ Warns Not To Trust Stories Based On “Anonymous Officials”

In a move that stunned many members of the media, on Thursday night Deputy Attorney General Rod Rosenstein, who is overseeing the Russia probe due to Jeff Sessions’ recusal and who earlier this week confirmed only he has authority to fire Special Counsel Robert Mueller, released an unorthodox statement to be “skeptical about anonymous allegations” following the relentless barrage of news reports emerging from the WaPo and the NYT about the evolving probe into Russia’s “election interference” and possible collusion with Trump, all based on “anonymous sources.”

“Americans should exercise caution before accepting as true any stories attributed to anonymous ‘officials,’ particularly when they do not identify the country — let alone the branch or agency of government — with which the alleged sources supposedly are affiliated. Americans should be skeptical about anonymous allegations. The Department of Justice has a long-established policy to neither confirm nor deny such allegations.

Rosenstein, who many had seen as a Trump foil at the DOJ, did not cite specific reports. The DOJ released Rosenstein’s statement after 9 p.m., shortly after The Washington Post reported that the special counsel was investigating the business dealings of Jared Kushner, Mr. Trump’s son-in-law and adviser. That report was attributed to unnamed American officials.

As we said, the media and punditry was “stunned” by the official statement: the NYT’ Maggie Haberman said “Have literally never seen a statement like this.” The new leader of the Trump “resistance”, Preet Bharara also chimed in, tweeting “Americans should also exercise caution before accepting as true lies about firing of FBI Director & defamation of a war hero special counsel”

View image on Twitter

Preet Bharara

@PreetBharara

Americans should also exercise caution before accepting as true lies about firing of FBI Director & defamation of a war hero special counsel

To be expected, Rosenstein – who the media was ambivalent about and following his recent testimony in which he said there was “no grounds” to fire Mueller, praised – promptly became the latest pariah for insinuating that the media’s Trump reportage may be, in fact, fake news.

As the NYT reported this morning, the “statement aligned with the president’s open frustration with unflattering leaks. Mr. Trump has called stories about the investigation “fake news” and complained on Twitter about a Washington Post report on Wednesday night that the special counsel, Robert S. Mueller III, was investigating the president himself for possible obstruction of justice. That story was also attributed to unnamed sources, as was a New York Times article that same evening about Mr. Mueller’s request for interviews with three top intelligence officials.”

What to make of Rosenstein’s statement?

On one hand, it could be seen as a validation of Trump’s repeated allegations that much of what has emerged in press in recent weeks is “fake news.” On the other, as some in the media suggested, it could be an attempt to “chill” communications and leaks to the press. Yet others saw this as a preview of what may be another upcoming story. As Bloomberg’s Jennifer Epstein who said “If this statement is preemptive: oh, boy, is the story going to be explosive.”

Jennifer Epstein

@jeneps

Is this about a specific story or just a general alert? https://twitter.com/zekejmiller/status/875526604671373312 …

Jennifer Epstein

@jeneps

If this statement is preemptive: oh, boy, is the story about going to be explosive.

Trump has yet to tweet his approval of Rosenstein’s comment, although moments ago he did tweet the following:

Donald J. Trump

@realDonaldTrump

After 7 months of investigations & committee hearings about my “collusion with the Russians,” nobody has been able to show any proof. Sad!

7:53 AM – 16 Jun 2017 END Trump now blasts Deputy Attorney General Rosenstein.  Trump is correct: he is being investigated by the man who told him to fire the FBI director and thus :  this whole thing is a “witch hunt” (courtesy zero hedge) Trump Blasts Deputy AG: “I’m Being Investigated By Man Who Told Me To Fire The FBI Director! Witch Hunt”

President Trump’s latest twitter target seems to be his own Deputy Attorney General Rod Rosenstein who he blasts for the hiring of a Special Counsel to investigate the firing of former FBI Director James Comey, after writing a letter himself explicitly calling for the firing of James Comey.

“I am being investigated for firing the FBI Director by the man who told me to fire the FBI Director! Witch Hunt”

Donald J. Trump

@realDonaldTrump

I am being investigated for firing the FBI Director by the man who told me to fire the FBI Director! Witch Hunt

 

Of course, Trump’s message isn’t crystal clear on exactly who the subject of the tweet is and has left some wondering whether he might actually be referring to Special Counsel Mueller.

That said, since Rosenstein did, in fact, draft a letter calling for the termination of James Comey, a letter which Trump revealed publicly on May 9th, it would seem more logical that the tweet is directed at him. Here is an excerpt from our post back in May:

In the letter from Deputy Attorney General Rod Rosenstein, he cites the handling of Comey’s Clinton investigation, and says that Comey was wrong to cite his conclusions about the Clinton email probe in July of 2016: “I cannot defend the Director’s handling of the conclusion of the investigation of Secretary Clinton’s emails, and I do not understand his refusal to accept the nearly universal judgment that he was mistaken,” Rosenstein wrote.

 

Rosenstein was referring to Comey’s decision to announce in July last year that the probe of Hillary Clinton should be closed without prosecution, but then declared – 11 days before the Nov. 8 election – that he had reopened the investigation because of a discovery of a new trove of Clinton-related emails.  Democrats say the decision cost Clinton victory.

 

Rosenstein also identified several areas in which he said Comey had erred, saying it was wrong of him to “usurp” then-Attorney General Loretta Lynch’s authority by announcing the initial conclusion of the email case on July 5.

 

Comey “announced his own conclusions about the nation’s most sensitive criminal investigation, without the authorization of duly appointed Justice Department leaders,” Rosenstein wrote. Comey also “ignored another longstanding principle” by holding a news conference to “release derogatory information about the subject of a declined criminal investigation.”

 

Of course, despite Rosenstein’s letter, critics will note that Trump later admitted that he had been considering the termination of James Comey from the moment he took office.

end

 

Rosenstein states that he may have to recuse himself as it seems the probe is widening (unbelievable!!)_

(courtesy zero hedge)

Rosenstein Says He May Need To Recuse Himself In Russia Probe: ABC

This morning is becoming very chaotic for Deputy Attorney General Rod Rosenstein, a man who has historically maintained a very low profile at the Department of Justice.  After issuing a rather uncharacteristic and cryptic statement last night urging Americans not to trust “anonymously-sourced” new stories (a statement that many have speculated is attributable to Wapo’s latest anonymously-sourced headline from last night) and being blasted by President Trump this morning, ABC is reporting that Rosenstein has privately acknowledged that he may need to recuse himself in Mueller’s Russia probe.

The senior Justice Department official with ultimate authority over the special counsel’s probe of Russia’s alleged meddling in the 2016 election has privately acknowledged to colleagues that he may have to recuse himself from the matter, which he took charge of only after Attorney General Jeff Sessions’ own recusal, sources tell ABC News.

 

Those private remarks from Deputy Attorney General Rod Rosenstein are significant because they reflect the widening nature of the federal probe, which now includes a preliminary inquiry into whether President Donald Trump attempted to obstruct justice when he allegedly tried to curtail the probe and then fired James Comey as FBI director.

 

Of course, the next most logical question becomes who would step in to fill Rosenstein’s shoes?  According to ABC, that obligation would fall upon Associate Attorney General Rachel Brand.

Rosenstein, who authored an extensive and publicly-released memorandum recommending Comey’s firing, raised the possibility of his recusal during a recent meeting with Associate Attorney General Rachel Brand, the Justice Department’s new third-in-command, according to sources.

 

In the recent meeting with Brand, Rosenstein told her that if he were to recuse himself, she would have to step in and take over those responsibilities. She was sworn-in little more than a month ago.

That is, until Rachel Brand becomes ‘conflicted’ and also has to be recused.

In the end, we suspect liberals in Congress will not be satisfied with anyone chosen to oversee Special Counsel Mueller’s investigation until that ‘someone’ becomes Nancy Pelosi or Maxine Waters. 

END

Meet the next Attorney General to handle the Russian fiasco: Rachel Brand

(zerohedge)

Meet DOJ’s Rachel Brand: She’ll Be A Russian Spy By Next Week

Before this morning, most people in the United States had never heard of Associate Attorney General Rachel Brand.  But, an ABC story (which we covered here) suggesting that Acting Attorney General Rod Rosenstein may have to recuse himself from overseeing Special Counsel Mueller’s Russia probe, and that Brand would be the next inline to step into that position, changed all that.

So what do we know about Rachel Brand?  Well, we know 4 things with absolute certainty:

  1. She was appointed by the Trump administration and confirmed on May 18, 2017
  2. She is an active contributor to Republican campaigns
  3. Democrats hate her
  4. Therefore, by the transitive property, we also know with absolute certainty she is a Russian spy

 

This is how ABC described Brand:

As for Brand, she previously led the Justice Department’s Office of Legal Policy, and she most recently served as a member of the government’s Privacy and Civil Liberties Oversight Board. She graduated from Harvard Law School and clerked for Supreme Court Justice Anthony Kennedy, according to the Justice Department.

 

Sessions recently said she “has proven herself to be a brilliant lawyer.”

 

“She is also a dedicated public servant who is strongly committed to upholding the rule of law and our Constitution,” he added.

Of course, a couple of quick internet searches revealed far more ‘suspicious’ discoveries…

First, Brand is clearly a Conservative and has been an active contributor to several Republican campaigns in recent years, including “Ted Cruz For President” and “Ted Cruz For Senate.”

 

Moreover, Democrats hate her as evidenced by the fact that she was only confirmed in the Senate via a 52-46 vote along party lines…

…and Senator Elizabeth Warren’s opposition speech in which Brand was “branded” as just another greedy capitalist:

“…has extensive experience, years of experience, fighting on behalf of the biggest and richest companies in the world.”

 

Finally, since Democrats have been hyper sensitive, in recent hearings, to the Acting Attorney General’s authority to fire Special Counsel Mueller…

 

…an authority which could soon be passed to Associate Attorney General Rachel Brand, it’s only logical to conclude that Democrats and the Washington Post will spend the weekend telling you why Rachel Brand is most likely a Russian spy.

So, what’s the over/under on how many days it takes Brand to recuse herself…two?  Four?

end

then late in the day, the Dept of Justice reports that there is no reason for Rosenstein’s recusal

the dept of Justice is now in disarray

(courtesy zerohedge)

 

 

DOJ: No Reason For Rosenstein Recusal; “Nothing Has Changed”

What exactly is going on at the Department of Justice today?  That is the question that everyone should be asking themselves right about now.

Just a couple of hours ago, ABC warmed the hearts of disaffected Hillary voters all around the country when they reported, courtesy of anonymous sources of course, that Deputy Attorney General Rod Rosenstein had “privately acknowledged to colleagues that he may have to recuse himself from” overseeing Special Counsel Mueller’s Russia probe (see our note: “Rosenstein Says He May Need To Recuse Himself In Russia Probe: ABC“).

This latest “bombshell” report drove an all new round of hysteria in Washington D.C. as people began to immediately speculate as to what new ‘development’ could have prompted Rosenstein’s sudden change of heart on his own independence…clearly Trump must have threatened him, right?

Alas, it seems that it might have all just been more ‘fake news’ courtesy of more anonymous sources as the DOJ is now reporting that precisely “nothing has changed.”  Per the Washington Post, here is the statement released by DOJ spokesman Ian Prior:

“As the deputy attorney general has said numerous times, if there comes a point when he needs to recuse, he will.  However, nothing has changed.”

 

Of course, Trump’s tweet, presumably directed at Rosenstein, from earlier this morning only served to add to the mass confusion…

Donald J. Trump @realDonaldTrump

I am being investigated for firing the FBI Director by the man who told me to fire the FBI Director! Witch Hunt

9:07 AM – 16 Jun 2017 Twitter Ads info and privacy

 

…as did the bizarre overnight statement from Rosenstein instructing Americans to ignore anonymously sourced news stories.

“Americans should exercise caution before accepting as true any stories attributed to anonymous ‘officials,’ particularly when they do not identify the country — let alone the branch or agency of government — with which the alleged sources supposedly are affiliated.”

Meanwhile, Senator Dianne Feinstein, the ranking Democrat on the Senate Judiciary Committee, continues to repeat that she is growing “increasingly concerned” that Trump will try to fire special counsel Mueller and Rosenstein…an accusation that liberals continue to repeat despite the fact that even the Washington Post can’t  seem to find an anonymous source willing to ‘confirm’ that such a proposal has even been floated within the Trump administration.

“The message the president is sending through his tweets is that he believes the rule of law doesn’t apply to him and that anyone who thinks otherwise will be fired.”

All of which brings us back to our original question:  What exactly is going on at the Department of Justice today? 

THE FUN BEGINS:  THE REPUBLICANS FINALLY DECIDE TO PLAY HARDBALL: THEY CALL FOR A SPECIAL COUNSEL TO INVESTIGATE FORMER ATTORNEY GENERAL LYNCH:

(courtesy zerohedge)

Republicans Go On Offensive Against Mueller; Call For ‘Special Counsel’ To Investigate AG Lynch

Last night, after Trump launched yet another furious tweetstorm intended to expose the double standard applied in the Hillary investigation compared to the Russia probe, we noted that Republicans might be well served to stop sitting around twiddling their thumbs and actually go on the offensive against an investigation that has obviously morphed into mass hysteria courtesy of free-flowing leaks from a conflicted “intelligence community” intent upon bringing down a presidency.  Here’s what we said:

Of course, until someone within the Trump administration or Republican Party smartens up and calls for the appointment of a ‘Special Counsel’ to look into Hillary’s email scandal, something that should have been done long ago, and not for retaliatory reasons but simply due to Comey’s and AG Lynch’s blatant mishandling of the investigation (a point which Deputy AG Rosenstein obviously agreed with), the Democrats have no reason to calm their mass hysteria.  Then, and only then, do we suspect that Hillary might just be able to ‘convince’ her party to exercise some form of reasonable judgement.

Now, according to a note this morning from The Hill, Republicans seem to be doing just that with several members of the GOP calling on the Special Counsel to look into whether former Attorney General Loretta Lynch illegally meddled in the Hillary investigation when she met with Bill Clinton on the tarmac in Phoenix and/or instructed Comey to refer to his case as a “matter” rather than an “investigation.”

Rather than wasting resources on investigating Trump, the GOP says the special counsel must look into whether former attorney general Loretta Lynch meddled with the FBI’s criminal investigation into Hillary Clinton’s email server. Comey testified that Lynch told him to downplay the seriousness of the FBI’s email server investigation.

For those who missed it, here is Comey’s testimony in which he confirms that Lynch “directed” him to refer to the Hillary email case as a “matter” rather than an ‘investigation”…not to mention that ill-advised meeting with Bill Clinton on the Phoenix tarmac just days before the Justice Department was set to announce the results of their investigation.

 

Now, and perhaps because of a recent attack which targeted Republicans and in which the shooter seemed to be fueled by rage from largely fake, anonymously-sourced new stories, it appears that the GOP is finally starting to push back.

“These special counsels have a way of going off the rails,” Rep. Trent Franks (R-Az.) told The Hill. “And the ostensible purpose of the special counsel has now been essentially vitiated and everybody knows that. And so they’ve got to try to find something to do. In this case, it was almost the intent from the beginning to try to create something out of nothing. And it doesn’t work in physics, but in politics it seems to be pretty effective.”

 

“This is the most coordinated communications effort on behalf of the president that we’ve seen in a long time,” said Barry Bennett, a former adviser to Trump. “They need it — it’s tough to fight nameless, faceless quotes from people purposefully twisting these stories on you.”

 

Trump’s lead outside counsel, Mark Kasowitz responded to the Post story by decrying the “illegal” leaks, which he said had come directly from the FBI.

 

Jay Sekulow, a new member of Trump’s legal team, went on Fox News Channel to say that the leaks may have come from inside Mueller’s special counsel. Sekulow asked why the FBI is “not sending agents to people’s houses” to put an end to it.

 

Meanwhile, the Republican National Committee, which chairwoman Ronna McDaniel has described as the “political arm” of the White House, has led the effort to cast doubt on the special counsel investigation.

Of course, Trump has been fairly direct and open with his feelings about the ongoing “witch hunt.”

Donald J. Trump

@realDonaldTrump

They made up a phony collusion with the Russians story, found zero proof, so now they go for obstruction of justice on the phony story. Nice

Donald J. Trump

@realDonaldTrump

You are witnessing the single greatest WITCH HUNT in American political history – led by some very bad and conflicted people!

7

Donald J. Trump

@realDonaldTrump

Crooked H destroyed phones w/ hammer, ‘bleached’ emails, & had husband meet w/AG days before she was cleared- & they talk about obstruction?

 

Meanwhile, as we noted earlier this morning, even Deputy Attorney General Rod Rosenstein has grown weary of the constant leaks and what they mean for the credibility of Special Counsel Mueller’s investigation….which seems to have prompted him to release the following statement:

“Americans should exercise caution before accepting as true any stories attributed to anonymous ‘officials,’ particularly when they do not identify the country — let alone the branch or agency of government — with which the alleged sources supposedly are affiliated. Americans should be skeptical about anonymous allegations. The Department of Justice has a long-established policy to neither confirm nor deny such allegations.

Of course, it’s only a matter of time until the Washington Post uses to the Republican fury to allege guilt…after all, why would they attempt to fight back if they’re innocent?  Surely it can’t have anything to do with the barrage of anonymously-sourced, fake news stories released daily with the sole intent of bringing down a Republican President while never producing a shred of actual evidence.

end

My goodness!! these are awful numbers:  housing starts drop by a huge amt: -5.5% vs +4.1 expectations.  As zero hedge states, Janet it is a good time to keep raising rates!! (courtesy zero hedge) Housing Starts Suffer Worst Streak Since Jan 2009, Permits Plunge

For the first time since Jan 09, Housing Starts dropped for the 3rd month in a row in May, drastically missing expectations (-5.5% vs +4.1% exp.) with both March and April revised notably lower. Building Permits also tumbled in May and massively missed expectations (-4.9% vs +1.7% exp.).

No one saw it coming…

Worst streak of performance for Housing Starts since Jan 2009…

 

Both Single- and Multi-Family Starts tumbled… This is the lowest level for overall housing starts since September 2016.

 

And looking forward the picture is bad with both single- and multi-family-unit permits plunging…

 

Probably a good time to hike rates some more!!

end

 

Grocery stocks are plummeting after Amazon buys Whole Foods for $42.00.  The fear of course is that there is fear that Amazon would do to grocery operations what it has done to bricks and mortar!

(courtesy zero hedge)

 

Grocery Stocks Are Crashing After Amazon Buys Whole Foods For $42 Per Share

Whole Foods stock was halted for ‘news pending’… and now we have the answer – Amazon to acquire Whole Foods Market for $42/share in an all-cash transaction valued at ~$13.7b, including Whole Foods Market’s net debt.

With 9% of the float short this stock, we can only imagine the squeeze onm this 27% premium over last night’s close…

Full Statement:

Amazon (NASDAQ:AMZN) and Whole Foods Market, Inc. (NASDAQ:WFM) today announced that they have entered into a definitive merger agreement under which Amazon will acquire Whole Foods Market for $42 per share in an all-cash transaction valued at approximately $13.7 billion, including Whole Foods Market’s net debt.

“Millions of people love Whole Foods Market because they offer the best natural and organic foods, and they make it fun to eat healthy,” said Jeff Bezos, Amazon founder and CEO.

 

“Whole Foods Market has been satisfying, delighting and nourishing customers for nearly four decades – they’re doing an amazing job and we want that to continue.”

 

“This partnership presents an opportunity to maximize value for Whole Foods Market’s shareholders, while at the same time extending our mission and bringing the highest quality, experience, convenience and innovation to our customers,” said John Mackey, Whole Foods Market co-founder and CEO.

Whole Foods Market will continue to operate stores under the Whole Foods Market brand and source from trusted vendors and partners around the world. John Mackey will remain as CEO of Whole Foods Market and Whole Foods Market’s headquarters will stay in Austin, Texas.

Completion of the transaction is subject to approval by Whole Foods Market’s shareholders, regulatory approvals and other customary closing conditions. The parties expect to close the transaction during the second half of 2017.

Amazon expects to finance the acquisition with debt…

  • Amazon enters into commitment letter for 364-day senior unsecured bridge term loan facility in an aggregate principal amount of up to $13.7 billion.
  • Expects to finance deal with debt financing, which may include senior unsecured notes issued in capital markets transactions, term loans, bridge loans, or any combination thereof, together with cash on hand, co says in a filing
  • Goldman Sachs, BofA-Merrill Lynch to lead debt financing

Amazon stock is up 3% on the news…

Some context on the relative size…

 

And Kroger, Wal-Mart, Sprouts, and Target are plunging… (WMT -4%, TGT -5.5%, SFM -7.6%, KR -12%)

And European supermarkets are getting hammered –

  • *AHOLD, CARREFOUR, TESCO FALL TO LOWS ON AMAZON/WHOLE FOODS DEAL
  • *AHOLD DELHAIZE SLUMPS 6.8% IN AMSTERDAM ON AMAZON NEWS

With good reason probably. Grocery margin are 1-2% at best, and if Amazon can truly create smart stores with no check outs and cut employees in half they can kill regular supermarkets…

As Bloomberg’s Gadfly recently opined, Amazon wil kill your local grocer…

Amazon’s done it to books. And electronics. And clothing. Now it wants to rule the grocery aisles.

 

But Amazon still has a ways to go — the online retailing behemoth has taken a slow, yet calculated approach to attacking the grocery store. After years of testing the AmazonFresh program in its Seattle hometown, it began expanding the grocery delivery service to other cities in 2013. Today, it delivers fresh fruit and meat in parts of New York, New Jersey, Pennsylvania, Connecticut, California, Washington and Maryland. It also delivers food through its Amazon.com website and its Prime Now program.

 

And even though research from Cowen & Co. pegs Amazon’s market share of food and beverages sold online in 2015 at about 22 percent, that overall online grocery market in the U.S. is pretty small. Out of the $795 billion Cowen expects Americans to spend on food and drinks this year, it estimates only about $33 billion of it will be spent online.

 

That’s because it has taken shoppers a long time to grow comfortable with buying their apples, chicken breasts and granola online when they can stop by a physical store on the way home from work and actually touch and smell the food they’re buying. Companies struggle to profit from the very expensive business of picking, packing and transporting fresh food to their customers. It’s much easier to mail a video game or book, which doesn’t have to be kept cold or free of bruises.

 

But for Amazon, the grocery business not only brings more sales, it could also make its business more profitable. People tend to buy groceries weekly or daily, so getting them hooked on delivery justifies sending trucks out more frequently. Then any general merchandise, like a book or toy, that Amazon sells along with the food adds to profits. And since Amazon will need more trucks for grocery delivery, it could reduce its reliance on shipping companies, which have contributed to soaring costs. For now, Amazon is likely to take added grocery costs on the chin, in hopes it will pay off down the line.

 

Growing its AmazonFresh and Prime Now offerings suggests Amazon is gearing up for the long haul in grocery. Though traditional grocers are not likely to see sales migrate to Amazon right away, that luxury won’t last. And just like bookstores, your local grocer could be toast.

Thank you Feds…

end

 

The Republicans finally are worried as the soft data U. of Michigan confidence slumps to the lowest level since the Trump eleciton

(courtesy zero hedge)

Republicans Crack – UMich Confidence Slumps To Lowest Since Trump Elected

Republican finally cracked. After months of extremely partisan divergence in the UMich confidence data, the loss in confidence for self-identified Republicans fell notably more than for Democrats (who were already significantly lower). Both current and future expectations tumbled to their lowest since Nov 2016.

As UMich explains…

While this break corresponds with James Comey’s testimony, only a few consumers spontaneously referred to him or his testimony when asked to explain their views.

 

Importantly, the decline was observed across all political parties, but the loss in confidence among self-identified Republicans since June 8th was larger than among Democrats (9.2 vs. 6.8 Index-points), with Independents showing the greatest falloff (11.5 Index-points).

 

The size of the partisan difference between Democrats and Republicans in the Expectations Index, however, was largely unchanged (55.6 Index-points prior to June 8th, and 51.2 after).

 

The recent erosion of confidence was due to more negative perceptions of the proposed economic policies among Democrats and the reduced likelihood of passage of these policies among Republicans. Fortunately, a strong job market, improved household income and wealth have provided a financial buffer against rising uncertainties.

 

Nonetheless, consumers have become less optimistic about the future course of the domestic economy. Even with the expected bounce back in spending in the current quarter, personal consumption is expected to advance by 2.3% for all of 2017.

Interestingly medium-term inflation expectations jumped from 2.4% to 2.6% but short-term remained unchanged at 2.6%.

 

 

end

We finally get a semi truthful answer from Neil Kashkari as to why he decented yesterday.  It was a choice between faith and data.  The real reason for the rise in rates is to keep asset prices elevated or the whole enchilada breaks down.

(courtesy zero hedge)

 

One Fed President Says The Rate Hike Decision Was A Choice “Between Faith And Data”

Over the years many have accused central banking of being the world’s latest (and most profitable) religion, with central bankers the only modern day priests left that still matter (to the tune of $75 trillion, the market cap of all stocks in the world).

Today, in a blog post from Minneapolis Fed president Neel Kashkari explaining why he dissented from the latest Fed rate hike decision, he admits as much when he says “for me, deciding whether to raise rates or hold steady came down to a tension between faith and data. On one hand, intuitively, I am inclined to believe in the logic of the Phillips curve: A tight labor market should lead to competition for workers, which should lead to higher wages. Eventually, firms will have to pass some of those costs on to their customers, which should lead to higher inflation. That makes intuitive sense. That’s the faith part.

In a surprisingly honest assessment, he then says that “unfortunately, the data aren’t supporting this story, with the FOMC coming up short on its inflation target for many years in a row, and now with core inflation actually falling even as the labor market is tightening. If we base our outlook for inflation on these actual data, we shouldn’t have raised rates this week. Instead, we should have waited to see if the recent drop in inflation is transitory to ensure that we are fulfilling our inflation mandate.”

Which inductively suggests that the rest of the FOMC is still driven by, well, faith alone. Unfortunately, this time the faith has consequences, and as Citi’s Matt King explained earlier, the Fed’s decision to not only hike rates but also to begin a $450 billion annual reduction in its balance sheet, will have “significant adjustment in valuations.”

Which is perhaps ironic, because while Kashkari’s opinion is quite objective on the topic of America’s economic realities, he continues to be disappointing blind about the Fed’s true purpose, namely to prop up asset prices, to wit:

“while some asset prices appear elevated, I don’t see a correction as being likely to trigger financial instability. Investors would face losses from a stock market correction, but it’s not the Fed’s job to protect investors from losses. Our jobs are to achieve our dual mandate and to promote financial stability.”

Which is funny, because while the priests over at the Fed continue to live in their ivory towers, everyone figured out what was going on, and as Citi said earlier this week,”the principal transmission channel to the real economy has been lifting asset prices.

Kashkari’s full Kashsplainer can be found here.

end

S&P Warns It May Downgrade Amazon

Unlike Apple, Amazon does not have a quarter trillion in (mostly offshore held) cash. Which means, it will issue debt to fund the Whole Foods purchase. Which means its leverage will rise above 1x. Which means S&P just warned of a downgrade of Amazon’s AA- rating.

From S&P:

Amazon.com Inc. Ratings Placed On CreditWatch Negative On Debt-Financed Acquisition Of Whole Foods

  • Amazon has announced an agreement to purchase Whole Foods Market Inc. in  a debt-financed purchase of about $14 billion.
  • We are placing our ‘AA-‘ corporate credit rating on Amazon on CreditWatch  with negative implications.
  • Our preliminary view is that Amazon’s leverage will approach 1.5x, but  mostly likely remain below 2x. We see the purchase as a major strategic  initiative for Amazon, with execution risk, but also potential significant implications for Amazon’s market strategy as well as for the  broader U.S. grocery market.

 

S&P Global Ratings placed its  ratings, including the ‘AA-‘ corporate credit rating, on Amazon.com Inc. on  CreditWatch with negative implications.

 

“The CreditWatch placement reflects our expectation that Amazon’s leverage  will increase as a result of its plan to purchase Whole Foods for about $14  billion,” said S&P Global Ratings credit analyst Robert Schulz.

 

The rating action also reflects our intent to review implications for Amazon’s  financial policies and retail market strategy.

 

We believe the company will maintain leverage above the target of less than  1x, currently incorporated into the rating. Our assessment of the impact of  this transaction on Amazon’s competitive positioning and profitability will  also be part of our review. 

 

While the transaction would result in leverage consistent with our current  target for a downgrade of adjusted leverage approaching 1.5x, we would also review Amazon’s prospective strategic and financial policies as part of any  downgrade. We would expect to conclude our review once more details such as  the timing of any required shareholder and regularly approvals become clear  along with our understanding of the policies noted above.

end

The following is a must, must read:

why the 2nd week of September will be critical. Trump is planning to allocate funds once we reach the total impasse on the debt ceiling (which will occur on the first or second week of September)

(courtesy David Stockman/Dailyreckoning)

Orange Is the New Black (Swan)

 

Black swans are supposedly unexpected, stealthy and come of a sudden. But not this one — it is bright orange, and in your face day and night.

I refer to the Donald, of course, and the fact that he is truly the Great Disrupter.

He is not only impetuous, mercurial, undisciplined and unpredictable. But for reasons I will elaborate below, totally clueless about how to manage his presidency or cope with the circling long knives of the Deep State which are hell bent on removing him from office.

Accordingly, the single most important thing to know about the present risk environment is that it is extreme and unprecedented. In essence, the ruling elites and their mainstream media megaphones have arrogantly decided that the 2016 election was a correctable error.

And that makes the Donald the ultimate bull in an exceedingly fragile China shop — and an already badly wounded one at that.

So it is no understatement to suggest that the S&P 500 at 2440 is about as fragile as the “market” has ever been. Any pinprick could send it to a bubbly grave. It’s the mighty Orange Swan that will break the casino like never before.

The utter fragility of the latest and greatest Fed bubble could not be better represented than by this astounding fact:

During the last 5,000 trading days (20 years) Wall Street’s “fear gauge,” the VIX, has closed below 10 on just 11 occasions. And 7 of those have been during the last month!

Stated differently, in just the last 0.6% of the trading days since 1997, 65% of the ultra-low VIX readings have occurred. That’s complacency begging to be monkey-hammered.

The always astute Doug Kass said it best in his recent commentary:

Over history, as we have learned, a Minksy Moment develops when investor sentiment becomes complacent after long periods of prosperity and the data is ignored and doesn’t seem to matter anymore, as I wrote in “It’s a ‘Bohemian Rhapsody’ Market: Nothing Really Matters … to Investors.”

To this observer, the summer of 2017 feels similar to the important market highs of the first half of 2000 and the last half of 2007.

At the kind of bubble inflection points of which Kass speaks, the punters become not only stupidly complacent, but thoroughly delirious. Hockey sticks laid on the rising trajectory of stock prices go parabolic.

That was surely true in late 1999 and early 2000 when the NASDAQ 100 rose 30% in three months — just as has been recently when the FAAAM Five (Facebook, Apple, Amazon, Alphabet and Microsoft) gained 33% or $600 billion since the turn of the year.

But this time is actually different in a special sense.

We are now at the inflection points not just of the post-crisis bubble engineered by the Bernanke-Yellen Fed and their fellow central bankers around the world. But the inflection point for the whole multi-decade enterprise of monetary central planning.

In that sense, it is a generational high. The casino is infested not only with new-age snowflakes who have never seen a dip of more than 7%. But also complacent veterans of the entire era of bubble finance who have generated untold financial wealth by riding the bull from one bubble to the next, and now remain fearless with a vengeance.

Tuesday, MarketWatch featured one of these operators — the legendary money manager, Ron Baron.  He’s been at the game since the 1970s and has $23 billion of assets under management (AUM).

Baron said on CNBC that the bull is just getting started:

Bubble? What bubble?

To say billionaire investor Ron Baron, who oversees some $23 billion in assets, waxed bullish on CNBC Tuesday morning would be an understatement, particularly with all the jitters and negativity swirling around the stock market lately.

The 74-year-old founder of Baron Capital said that interest rates and oil prices will stay low for “a very long time,” and that the economy will grow “much faster” than it would have otherwise, bringing the market along for the ride. Hence, he sees the Dow potentially taking out the 40,000 level by 2030.

So as Doug Kass observed, this really is a ‘Bohemian Rhapsody’ market where “nothing really matters” to the bullish punters who have spent a lifetime riding the Fed’s serial bubbles.

And that gets me to the Orange Swan…

There is no point in saying any longer that the giant Trump tax cut and pro-growth Stimulus is a pure pipe dream. That’s evident from the fact that the so-called GOP congressional majorities are so tied up in their own underwear that they can’t even pass Obamacare repeal and replace.

Moreover, the “help” they are getting from the White House needs no further explanation, either. That is to say, the  Donald just stepped all over his own parade by telling the Senate GOP that the House bill, which passed by a hair and is his only symbolic legislative achievement, is actually “mean” and needs a lot more money to remedy its defects.

You can’t make this up. You also don’t need any vote counting expertise in the House to know that if it comes back un-mean and pumped-up with more tax credits and Medicaid expansion money it will be shouted down by the Freedom Caucus. After all, they did say to the Senate, change one comma and the bill is dead in the water.

So much for handing off the Stimulus baton to fiscal policy.

Nor is there any chance that the desperate Keynesians running the Fed will turn their back any time soon on their current campaign to raise interest rates and shrink the Fed’s mountainous balance sheet.

And that’s not because they have suddenly grasped that free money for 100 months running is an exceedingly dangerous, combustible thing. It’s because they need to get interest rates back high enough so that they have ammo to combat the next recession!

In that context, here is what will take the Donald down, and it’s not some new smoking gun about RussiaGate. Instead, it’s actually the growing possibility that he will do the right thing when the Treasury runs out of cash around Labor Day, and there is no capacity to assemble a majority in both houses to raise the debt ceiling by trillions.

I’m referring to the dreaded “A” word. That is, use of the President’s constitutional authority to “allocate” the incoming revenue flows — which are running about $700 billion per year lower than outlays — to what he determines are the government’s highest priority purposes.

Undoubtedly, among these would be paying interest on the debt, sending-out the Social Security and veterans checks, paying military contractors and payrolls and the like.

Needless to say, resort to “allocation” would be the ultimate sin in the eyes of the bipartisan establishment. They would instantly start bellowing from every corner of the Swamp about an unconstitutional power grab by the White House.

And the mainstream media would go to DEFCON 1 about the alleged unlawful and dictatorial actions of a President who should never have been in the Oval Office in the first place.

So why do I think the Orange Swan might arrive in this fashion?

Here is what Trump’s completely inexperienced and unschooled Treasury Secretary said Tuesday. What he means by “super powers” is that he’s contemplating use of the allocation authorities.

This is not an issue, but I don’t want to leave any doubt that we have plans and backup plans,” said the former Goldman Sachs banker following a one-day bilateral meeting between the U.S. and Canada.

When asked what those backup plans would be, Mnuchin referred to them as “Treasury secretary’s “super powers.”

I say more power to him — even if it is the 50,000 pound pin that punctures the Great Bubble now at hand.

On the other hand, I’m quite confident there is only one other alternative — a prolonged government shutdown and a thundering breakdown of governance and all government function.

Either way, the bubble’s days are numbered. Dow 40,000 will soon join the ranks of the Tulip Bulb Mania and all the others which followed.

Regards,

David Stockman
for The Daily Reckoning

Illinois on death watch.  A great commentary tonight from John Rubino

(courtesy John Rubino/DollarCollapse.com)

 

Welcome To The Third World, Part 23: Illinois Death Watch

JUNE 16, 2017

It’s been a long time coming, but Illinois’ slow-mo financial disaster is now front page news. A few recent examples:

Roadwork Could Shut Down Across Illinois Due To Budget Impasse

(Chicagoist) – Roadwork across Illinois may grind to a halt at the end of June due to the continued state budget impasse, a representative for the Illinois Department of Transportation (IDOT) announced Wednesday. IDOT will be unable to pay contractors on July 1, unless the state passes a stopgap funding measure.

IDOT has told contractors that “all construction work is to shut down on June 30,” according to a statement. “Contractors will be advised to secure work zones to ensure their safety during any potential shutdown.”

Illinois has gone almost two full years without a state budget, which has hit education funding throughout the state and generated more than $10 million in unpaid bills.

Summer is both a high-volume construction season and a vaguely ominous time to cease road repairs; just last week, IDOT released a statement warning that the heat could lead to pavement “buckling or blowing out.”

https://dollarcollapse.com/debt/welcome-third-world- illinois-death-watch/

—————

Powerball, Mega Millions to Halt Illinois Lottery Due to State’s Inability to Pay Winners

(Mish) – Both Powerball and Mega Millions Lotteries Will Pull Out of Illinois on June 30 due to the budget impasse.

Without a budget in place, the state is not authorized to make payments to the association or Mega Millions.

Lottery proceeds are about 2% of state revenue. Speaking of revenue corporate income tax collection is down 41.3%. Sales taxes are flat. How is this supposed to work?

—————

Could Illinois be the first state to file for bankruptcy?

(CBS) – Illinois residents may feel some solidarity with the likes of Puerto Rico and Detroit.

A financial crunch is spiraling into a serious problem for Illinois lawmakers, prompting some observers to wonder if the state might make history by becoming the first to go bankrupt. At the moment, it’s impossible for a state to file for bankruptcy protection, which is only afforded to counties and municipalities like Detroit.

Chapter 9 bankruptcy protection could be extended to states if Congress took up the issue, although Stanford Law School professor Michael McConnell noted in an article last year that he believed the precedents are iffy for extending the option to states. Nevertheless, Illinois is in a serious financial pickle, which is why radical options such as bankruptcy are being floated as potential solutions.

Ratings agency Moody’s Investor Service earlier this month downgraded Illinois’ general obligation bonds to its lowest investment grade rating, citing the state’s growing pile of unpaid bills and its mounting pension deficit. Illinois, by the way, has the lowest credit rating of any state. Lower ratings mean higher borrowing costs, since lenders view such borrowers as riskier bets.

“Legislative gridlock has sidetracked efforts not only to address pension needs but also to achieve fiscal balance, allowing a backlog of bills to approach $15 billion, or about 40 percent of the state’s operating budget,” the agency noted.

As noted by the Fiscal Times, Illinois is the only state that’s been operating without a balanced and complete budget for almost two years.

“We’re like a banana republic. We can’t manage our money,” Gov. Bruce Rauner said after the Illinois Legislature failed to produce a full 2017 budget earlier this month.

Two Big Questions
Based on the immensity of its pension obligations, the legal barriers to simply cutting benefits, and falling tax revenues, Illinois is a lock to default on some or all of its obligations in the next few years. That’s a problem for pensioners, state contractors and pretty much anyone who cares about local public services. In other words, life is going to get a lot harder for people living in the state, and especially for those living in double-bankrupt Chicago.

But the real impact will be felt farther afield, when everyone with money at risk starts asking who’s next – and finding a long list of likely suspects. If Illinois defaults, how far behind can New Jersey, Kentucky, or Connecticut be? Not far, according to current trends. And if those states follow Illinois, what are Italian bonds worth? Not much.

The second big question is: How will stronger governments respond to the implosion of weaker ones? If the failed states are bailed out by the still-solvent, what does that do to the latters’ balance sheets? In some cases it decimates them.

The dilemma? Allowing failed states to default will rock the global banking system, but bailing them out replaces a debt bust with a currency crisis. In a priced-for-perfection world, either will lead to global asset repricing — in other words an epic bear market.

-END-

 

LET US WRAP UP THE WEEK WITH THIS GREAT OFFERING FROM GREG HUNTER OF USA WATCHDOG

MSM Propaganda Cause Left Hate, Trump Obstruction – Not, Obama Administration TreasonBy Greg Hunter On June 16, 2017 In Weekly News Wrap-Ups

You want to know why the “Left” hates Donald Trump? Look no further than the lies, false narratives and fake news of the mainstream media (MSM). Several U.S. Congressmen were shot while practicing for a charity baseball game in Washington, D.C. The lone shooter is a self-described Trump hater and volunteered for the Bernie Sanders campaign. Looks like the propaganda of the MSM worked on the extreme in the thought shaping in this case.

For weeks, everybody on Capitol Hill knew that Donald Trump was NOT the subject of the so-called Russian collusion and Russian hacking stories. Funny how the MSM propaganda machine never brought this up. Funny how the FBI never “leaked” this fact out. The MSM propaganda machine continued to paint a false narrative that the investigation centered on President Trump when, according to fired FBI Director James Comey, it did not. Now, a new story leaks that Trump is the center of an Obstruction of Justice case by the Special Prosecutor, even though James Comey testified there was no obstruction by Trump or his Administration. Trump calls this a “witch hunt” and points to several instances of obvious obstruction that James Comey and the Obama Justice Department refused to prosecute in the Hillary Clinton email investigation. There is no “there” there on this story, just like the phony Russian collusion story.

You wonder why all the leaks and so-called investigations that go on and on lead to nowhere? Why the real story of an outgoing Administration using the resources of the FBI and Intel agencies to try to sink Trump and his Administration are not reported? Could it be the Obama Administration is desperate to cover up crime and treason that will surely be revealed by the Trump Administration? The only reason I can come up with why people would commit felony leaks is to cover up bigger felonies and even treason.

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

Video Link

http://usawatchdog.com/msm-propaganda-cause-left- hate-trump-obstruction-not-obama-administration-treason/

end

We will see you Monday night

have a great weekend

Harvey.


June 15/CROOKED BANKING CARTEL CONTINUES TO WHACK GOLD AND SILVER: GOLD DOWN $20.40 /SILVER DOWN 42 CENTS/ GIANT INSURANCE CONGLOMERATE CHAIRMAN DETAINED WITH REVENUES CRASHING 90%: THIS WILL NO DOUBT BE A HUGE SYSTEMIC RISK FOR CHINA /USA INDUSTRAIL...

Thu, 06/15/2017 - 19:12

GOLD: $1252.20  DOWN $20.40

Silver: $16.69  DOWN 42  cent(s)

Closing access prices:

Gold $1253.40

silver: $16.75

 

 

 

 

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1273.84 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1265.30

PREMIUM FIRST FIX:  $8.54

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1269.24

NY GOLD PRICE AT THE EXACT SAME TIME: $1261.95

Premium of Shanghai 2nd fix/NY:$7.25

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1260.25

NY PRICING AT THE EXACT SAME TIME: $1260.95

LONDON SECOND GOLD FIX  10 AM: $1254.55

NY PRICING AT THE EXACT SAME TIME. $1253.90 

For comex gold: JUNE/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  2 NOTICE(S) FOR 200  OZ.

TOTAL NOTICES SO FAR: 2208 FOR 220,800 OZ    (6.8678 TONNES)

For silver: For silver: JUNE 67 NOTICES FILED TODAY FOR 335,000  OZ/

Total number of notices filed so far this month: 901 for 4,505,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

 

The bankers continued with their raid of gold and silver today. I believe that the bankers are quite concerned with silver as demand continues to rise and the bankers have a massive paper short.

Over at the comex, the amount standing for the silver metal again rose in similar fashion to what we witnessed last month and also in April. It is up for the 11th consecutive trading day. We certainly have a determined entity trying to get its hands on whatever silver is available.

The big news of the day came from China where the large conglomerate insurance giant Anbang  chairman, Wu has just been detained by the authorities.  Anbang’s revenue dropped by 90% this month and that has scared the living daylights out of investors. These guys were the huge funders of those shadow banking WMP’s and a default with Anbang will no doubt cause a systemic mess throughout China.

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This is where we are heading:  (JB Slear/Jim Sinclair)

According to JB Slear, this is what the future holds. Why should I write words. Get into the cellar as fast as you can!

Jim

In silver, the total open interest ROSE BY 1179  contract(s) UP to 202,393 WITH THE RISE IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (UP 37 CENT(S). In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.014 BILLION TO BE EXACT or 145% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 67 NOTICE(S) FOR 335,000  OZ OF SILVER

In gold, the total comex gold ROSE BY  2,867 contracts WITH THE RISE IN PRICE OF GOLD   ($7.00 with YESTERDAY’S TRADING). The total gold OI stands at 474,001 contracts.

we had 2 notice(s) filed upon for 200 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

With respect to our two criminal funds, the GLD and the SLV:

GLD:

We had  a monstrous change in tonnes of gold at the GLD: a paper withdrawal of 13.32 tonnes

Inventory rests tonight: 853.68 tonnes

.

SLV

Today: no  a monstrous changes in inventory/ a withdrawal of 3.405 million oz of paper silver

THE SLV Inventory rests at: 336.200 million oz

end

.

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver ROSE BY 1,179 contracts UP TO 202,393 (AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), WITH THE RISE IN PRICE FOR SILVER WITH YESTERDAY’S TRADING  ( UP 37 CENTS).We gained back a few of our paper players as our  core players remain firm and determined.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

 i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 1.81 POINTS OR 0.06%   / /Hang Sang CLOSED DOWN 310.56 POINTS OR 1.20% The Nikkei closed DOWN 51.70 POINTS OR 0.26%/Australia’s all ordinaires  CLOSED DOWN 1.12%/Chinese yuan (ONSHORE) closed DOWN at 6.8035/Oil DOWN to 44.64 dollars per barrel for WTI and 46.95 for Brent. Stocks in Europe OPENED IN THE RED,,      ..Offshore yuan trades  6.8042 yuan to the dollar vs 6.8035 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT HAPPY TODAY WITH THE RISE IN THE USA DOLLAR

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

b) REPORT ON JAPAN c) REPORT ON CHINA

i)This is huge!! The large Chinese conglomerate Anbang which deals in insurance and other aspects of the global economy just received moments ago a  systemic risk as revenues crash 90% as its Chairman Wu has been detained. This will no doubt cause a systemic crash in the Chinese economy due to the potential liquidation of WMP products and Anbang itself!!!

(courtesy zerohedge)

 

ii)Not only is China trying to rein in shadow banking activities but now we are witnessing a crash in net bond issuance

China  is not growing at all

( zero hedge)

 

4. EUROPEAN AFFAIRS

i)The pound spikes higher as the Bank of England now becomes hawkish on a rate increase.

( zero hedge)

ii)the EU has reached a deal with Greece. However  no debt reductions until 2018. In essence the 8 billion euros received will go right back to pay the ESFS boys and other loans from  the EU.  Greece gets nothing.

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

Russia/Germany/Austria vs USA

Germany and Austria are getting quite angry with the latest sanctions against Russia for their “incursion into USA politics as well as “increased involvement into the Ukraine”.  The USA is set to pose fines for any European country that participates in the NordStream 2 pipeline.

the real reason for the sanctions:  the USA wants the LNG pipeline from Qatar through Saudi Arabia, through Syria, through Turkey and onto Greece and the rest of Europe bypassing Russia altogether

(courtesy zerohedge)

6 .GLOBAL ISSUES

i)CANADA

WOW!  This will hurt” existing home sales crash in May by 6.2%

(courtesy zero hedge)

ii) NIKE

This ought to give us a huge clue as to how global growth is performing:  Nike is cutting 2% of its global workforce

( zero hedge)

7. OIL ISSUES 8. EMERGING MARKET

 

9.   PHYSICAL MARKETS

i)A very important commentary from Andrew Maguire today.  He comments on the continual spoofing in the gold/silver markets by central banks.  He also has stated that sovereigns have bids at around $1260 or slightly below and that will give support to the market

 

( Andrew Maguire/Kingworldsnews)

 

ii)It looks like our major bankers did not win in their fight to manage the State of Texas new gold depository: Lone Star tangible won and they will also provide services for anyone wishing to hold gold there.

( Texas Tribune/GATA)

iii)Barrick to hold talks with Tanzania’s officials to allow export of dore

( Reuters/GATA)

iv)South Africa’s new charter is demanding that mines must be 30% owned by blacks. If you will recall this is the same scenario that wiped out mining in Rhodesia which became Zimbabwe

 

( zero hedge)

10. USA Stories

i)Last night:  Scalise is still in critical condition and will require more surgeries

 

( zero hedge)

ii)The witch hunt is on:  Mueller is investigating Trump for possible obstruction of Justice according to the Washington Post.What absolute nonsense!

( zerohedge)

iii)Trump’s response:  they had zero proof on Russian collusion so now they go after obstruction of Justice on the phony Russian collusion. ( zero hedge) iv)According to Bloomberg’s Cudmore, the Fed has made a big mistake and every tightening move is a signal to buy long bonds due to their mistake. They themselves are pushing the uSA towards recession ( zero hedge) v)Another sign that the economy is rolling over and that the inflation that the Fed needs is non existent

( zero hedge)

vi)Soft data NY Fed manufacturing and Philly Fed soar

DO NOT PAY ANY ATTENTION TO THIS GARBAGE REPORTING

( ZERO HEDGE)

vii)Janet will not like this:  hard data USA manufacturing output tumbles .4% month/month in May

( zero hedge)

viii)Illinois is essentially bust:

( Mish Shedlock/Mishtalk)

ix)The new budget projections is just sheer fantasy

(Craig Wilson/David Stockman) Let us head over to the comex:

The total gold comex open interest ROSE BY 2867 CONTRACTS UP to an OI level of 474,001 WITH THE  RISE IN THE PRICE OF GOLD ($7.00 with YESTERDAY’S trading)., The bankers are expecting more gold leaves to fall from the gold tree with the raid in the access market and that data will be given tomorrow.

We are now in the contract month of JUNE and it is one of the BETTER delivery months  of the year. In this JUNE delivery month we had A GAIN OF 22 contract(s)RISING TO  1573.  We had 15 notices filed yesterday so we FINALLY GAINED 37  contracts or an additional 3700 oz will stand for delivery in this very active delivery month of June AND  0 CONTRACTS RECEIVED AN EFP CONTRACT WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURE GOLD CONTRACT/OR A LONG CALL OR MOST LIKELY A LONDON BASED FORWARD GOLD CONTRACT. THESE EFP’S ARE PRIVATE OFF COMEX TRANSACTIONS. THE STUBBORN LONGS WHO ARE REMAINING STOIC AT THE COMEX ARE SO FAR REFUSING THAT FIAT BONUS (OVER 11 TONNES STANDING)

Below is a little background on the EFP contracts  initiated by our bankers: We now know for certain that private EFP contracts are given by the bankers when faced with an upcoming active delivery month and they state that this is for emergency purposes only and that they do not have actual physical metal to deliver upon in the front month.  We just do not know the makeup of that private deal.  It is my contention that the longs in GOLD FOR INSTANCE at the end of MAY(for June contracts) were given a fiat bonus plus a long “in the money” call for a  future July contract or a August FUTURE contract or MAYBE EVEN A LONDON BASED FORWARD GOLD CONTRACT. . and this is why the total comex open interest complex obliterates as we enter first day notice.  So now everything makes sense: the obliteration of OI as we enter first day notice has not really occurred in the real sense but replaced with a future long contract call and/or an off -comex London based gold contract  with some bonus money for their effort.

The non active July contract LOST 111 contracts to stand at 1915 contracts. The next big active month is August and here the OI GAINED 1,241 contracts UP to 346,986,  as the bankers trying to keep this month down to manageable size.

We had 2 notice(s) filed upon today for 200 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI ROSE BY 1,179 contracts FROM 201,214 UP TO 202,393 WITH YESTERDAY’S BIG 37 CENT GAIN. WE GAINED BACK SOME OF OUR PAPER PLAYERS BUT OUR CORE LONGS REMAIN STOIC. OUR BANKER FRIENDS ARE DESPERATELY TRYING TO COVER THEIR SHORTS IN SILVER. WE WILL SEE IF THEY WERE SUCCESSFUL IN TOMORROW’S READING WITH THEIR RAID IN THE ACCESS MARKET. We are in the NON active delivery month is JUNE  Here the open interest SOMEHOW GAINED 47 contract(s) RISING TO 75 contracts. We had 18 notices served upon yesterday so we AGAIN GAINED 65 CONTRACTS OR AN ADDITIONAL  325,000 OZ OF SILVER WILL STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.  IT SEEMS WE ARE CONTINUING WHERE WE LEFT OFF LAST MONTH IN SILVER AS INVESTORS ARE WILLING TO FORGO THE FIAT PROFIT JUST TO SECURE PHYSICAL SILVER METAL. THIS IS THE 11TH CONSECUTIVE DAY THAT THE AMOUNT OF SILVER STANDING ADVANCED FROM FIRST DAY NOTICE. 

The next big active month will be July and here the OI LOST 3,705 contracts DOWN to 96,828 as we start to wind down before first day notice Friday, June 30.  July will be interesting to watch in silver as we witness fewer players pitching for EFP contracts than with gold.

The month of August, a non active month picked up 10 contracts to stand at 65.  The next big active delivery month for silver will be September and here the OI already jumped by another 5009 contracts up to 64,461.

I will give you a snapshot as to what happened last year at the exact number of days before first day notice:

 Monday, June 15.2016:  90,474 contracts were still outstanding vs 96,828 contracts June 15.2017

At the conclusion of June, the final standing for physical silver was 3,080,000 oz and we have already surpassed that number this year  (3,945,000 oz).

The line in the sand is $18.50 for silver and again it has been defended by the criminal bankers.  Once this level is pierced, the monstrous billion oz of silver shorts will blow up. The bankers are defending the Alamo with their last stand at the $18.50 mark. THE NEW RECORD HIGH IN OPEN INTEREST WAS SET FRIDAY APRIL 21/2017 AT:  234,787.

We had 67 notice(s) filed for 335,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 171,197 contracts which is  GOOD

Yesterday’s confirmed volume was 357,697 contracts  which is EXCELLENT

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for JUNE  June 15/2017. Gold Ounces Withdrawals from Dealers Inventory in oz   nil Withdrawals from Customer Inventory in oz    nil oz Deposits to the Dealer Inventory in oz nil  oz Deposits to the Customer Inventory, in oz   nil oz No of oz served (contracts) today   2 notice(s) 200 OZ No of oz to be served (notices) 1571 contracts 157,100 oz Total monthly oz gold served (contracts) so far this month 2208 notices 220,800 oz 6.86780 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month   282,794.7 oz Today we HAD  0 kilobar transaction(s)/  We had 0 deposit into the dealer: total dealer deposits: nil oz We had NIL dealer withdrawals: total dealer withdrawals:  NIL oz we had no dealer deposits: total dealer deposits:  nil oz we had 0  customer deposit(s): total customer deposits; nil  oz We had 0 customer withdrawal(s) total customer withdrawal: nil  oz  we had 0 adjustment(s):  Rather strange for the 2nd biggest delivery month of the year and no activity inside the gold comex.  Also it must be still alarming to our bankers to see 11.5 tonnes of gold standing and probably no gold to back up those who stand. For JUNE:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 2  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 2 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the initial total number of gold ounces standing for the JUNE. contract month, we take the total number of notices filed so far for the month (2208) x 100 oz or 220,800 oz, to which we add the difference between the open interest for the front month of JUNE (1573 contracts) minus the number of notices served upon today (2) x 100 oz per contract equals 377,900  oz, the number of ounces standing in this active month of JUNE.   Thus the INITIAL standings for gold for the JUNE contract month: No of notices served so far (2208) x 100 oz  or ounces + {(1573)OI for the front month  minus the number of  notices served upon today (2) x 100 oz which equals 377,900 oz standing in this  active delivery month of JUNE  (11.754 tonnes) . WE GAINED 37 CONTRACTS OR AN ADDITIONAL 3700 OZ WILL STAND AT THE COMEX AND 0 CONTRACTS) WERE GIVEN EFP CONTRACTS WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURES GOLD CONTRACT OR A LONG CALL ON A GOLD CONTRACT OR MOST LIKELY A LONDON BASED GOLD FORWARD CONTRACT. YOU CAN NOW SEE WHY THE COT REPORTS ARE DISTORTED DUE TO THE ISSUANCE OF THESE EFP CONTRACTS  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 889,847.333 or 27.67 tonnes DEALER RAPIDLY LOSING GOLD Total gold inventory (dealer and customer) = 8,636,844.749 or 268.64 tonnes    Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 268.64 tonnes for a  loss of 34  tonnes over that period.  Since August 8/2016 we have lost 85 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 10 MONTHS  85 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE MAY DELIVERY MONTH   June INITIAL standings  June 15 2017 Silver Ounces Withdrawals from Dealers Inventory  nil Withdrawals from Customer Inventory  1,960.300  oz Delaware HSBC Deposits to the Dealer Inventory NIL oz Deposits to the Customer Inventory   nil oz No of oz served today (contracts)  67 CONTRACT(S) (335,000 OZ) No of oz to be served (notices) 8 contracts ( 40,000 oz) Total monthly oz silver served (contracts) 901 contracts (4,505,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month 2,735,819.5 oz today, we had  0 deposit(s) into the dealer account: total dealer deposit: NIL  oz we had Nil dealer withdrawals: total dealer withdrawals: nil oz we had 2 customer withdrawal(s):  i) out of Delaware: 960.60 oz ii) Out of HSBC: 999.700 oz TOTAL CUSTOMER WITHDRAWALS:  1.960.300  oz  We had 0 Customer deposit(s): ***deposits into JPMorgan have now stopped In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits: nil oz    we had 0 adjustment(s) The total number of notices filed today for the JUNE. contract month is represented by 67 contract(s) for 335,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at 901 x 5,000 oz  = 4,505,000 oz to which we add the difference between the open interest for the front month of JUNE (75) and the number of notices served upon today (67) x 5000 oz equals the number of ounces standing  

 

.   Thus the initial standings for silver for the JUNE contract month:  901 (notices served so far)x 5000 oz  + OI for front month of JUNE.(75 ) -number of notices served upon today (67)x 5000 oz  equals  4,545,000 oz  of silver standing for the JUNE contract month.   We gained 65 contracts or an additional 325,000 oz will stand for delivery. WE ALSO HAD 0 EFP CONTRACTS THAT WERE ISSUED AS THE LONGS REFUSED A FIAT BONUS: THEY WANT THEIR PHYSICAL SILVER.     Volumes: for silver comex Today the estimated volume was 82,433 which is HUGE Yesterday’s  confirmed volume was 148,650 contracts which is GIGANTIC YESTERDAY’S ESTIMATED VOLUME OF 148,650 CONTRACTS EQUATES TO 743 MILLION OZ OF SILVER OR 106% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.   Total dealer silver:  34.315 million (close to record low inventory   Total number of dealer and customer silver:   204.796 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 6.6 percent to NAV usa funds and Negative 6.8% to NAV for Cdn funds!!!!  Percentage of fund in gold 62.1% Percentage of fund in silver:37.8% cash .+0.1%( June 15/2017)    2. Sprott silver fund (PSLV): STOCK   NAV  RISES TO .31% (june 15/2017)  3. Sprott gold fund (PHYS): premium to NAV RISES to -0.64% to NAV  (June 15/2017 ) Note: Sprott silver trust back  into NEGATIVE territory at -0.31 /Sprott physical gold trust is back into NEGATIVE/ territory at -0.64%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada

Submitted by cpowell on Thu, 2017-03-09 01:19. Section: Daily Dispatches

From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017

http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…

Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.

The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.

The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.

“They weren’t interested in having those discussions,” Williams said.

 Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.

If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.

“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”

Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.

The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.

Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.

Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.

end

And now the Gold inventory at the GLD

June 15/ a monstrous “paper” withdrawal of 13.32 tonnes/Inventory rests at 853.68 tonnes

June 14./NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 867.00 TONNES

 

June 13. No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 12/No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 9/no change in inventory at the GLD/Inventory rests at 867.00 tonnes

June 8/AN ADDITION OF 3.07 TONNES OF GOLD ADDED TO THE GLD/INVENTORY RESTS AT 867.00 TONNES

June 7 a huge change in inventory/a deposit of 13.93 tonnes/inventory rests at 864.93 tonnes

June 6/ no changes in inventory at the GLD/Inventory remains at 851.00 tonnes

June 5.2017/no changes at the GLD/Inventory remain at 851.00 tonnes

June 2/2017/a huge deposit of 3.55 tonnes of gold into the GLD/Inventory rests at 851.00 tonnes

June 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 847.45 TONNES

May 31./ no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 30/no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 26./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 25./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 24/no change in inventory at the GLD/inventory rests at 847.45 tonnes

May 23/a paper withdrawal of 5.03 tonnes of gold from the GLD/Inventory rests at 847.45 tonnes

May 22/A DEPOSIT OF 1.77 TONNES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.48 TONNES

May 19/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 850.71 TONNES

May 18/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 850.71

May 17/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 16./ no change in the GLD inventory/inventory rests at 851.89 tonnes

May 15/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 12/no changes in GLD/inventory rests at 851.89 tonnes

may 11/no changes in GLD inventory/inventory rests at 851.89 tonnes

May 10/no changes in GLD inventory/inventory rests at 851.89 tonnes/

May 9/a withdrawal of 1.19 tonnes from the GLD/Inventory rests tonight at 851.89 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx June 15 /2017/ Inventory rests tonight at 853.68 tonnes *IN LAST 173 TRADING DAYS: 93.45 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 115 TRADING DAYS: A NET  33.98 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY. *FROM FEB 1/2017: A NET  47.32 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

June 15/ a massive “paper withdrawal” of 3.405 million oz of silver/Inventory rests at 336.200 million oz/

June 14/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ/

June 13/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz

June 12/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 9/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 8/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ/

June 7/no change in inventory at the SLV/inventory rests at 339.605 million oz/

June 6/no change in inventory at the SLV/Inventory rests at 339.605 million oz.

June 5/a huge change at the SLV/a withdrawal of 1.371 million oz /inventory rests at 339.605 million oz/

June 2/no change in silver inventory at the SLV/Inventory rests at 340.976 million oz/

June 1/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 340.976 MILLION OZ

May 31./ no change in silver inventory at the SLV/inventory rests at 340.976 million oz/

May 30/no change in silver inventory at the SLV/inventory rests at 340.976 million oz

May 26/another paper withdrawal of 946,000 oz of silver from the SLV with silver rising/inventory rests at 340.976 million oz

May 25/no change in silver inventory at the SLV/Inventory rests at 341.922 million oz

May 24./a “paper” withdrawal of 1.893 million oz from the SLV/inventory rests tonight at 341.922 million oz

May 23/no change in silver inventory at the SLV/inventory rests at 343.815 million oz

May 19/no change in silver inventory at the SLV/Inventory rests at 343.815 million oz.

may 18/2017/another big deposit of 1.42 million oz added to the SLV/inventory rests at 343.815 million oz.

may 17/no change in silver inventory at the SLV/Inventory rests at 342.395 million oz/

May 16./we had a huge addition of 1.416 million oz of silver into the SLV/inventory rests at 342.395 million oz

May 15/no changes in silver inventory/inventory rests at 340.979 million oz/

May 12/a huge change in silver: a deposit of 2.369 million oz/inventory rests at 340.979 million oz

May 11/no changes in silver inventory at the SLV/Inventory rests at 338.610 million oz

May 10/ a gigantic 3.833 million oz of silver added to the SLV and this occurred with the constant whacking of silver for the past 17 trading sessions/inventory rests at 338.610 million oz

may 9Again, no movement of inventory at the SLV. Inventory rests at 334.777 million oz

June 15.2017: Inventory 336.299  million oz end We are going to provide GOFO rates  (gold) each day and shortly silver courtesy of Bron Suchecki of Monetary Metals and here is today’s figures:

The actual figures can be found on our home page https://monetary-metals.com/

with this box in the left side

GOFO

6 month: 1.30%  (yesterday 1.26%)

12 month:  1.45% (yesterday 1.44%)

BRON SUCHECKI | VP Operations Unlocking the Productivity of Gold MONETARY METALS & CO M: +61 4 1210 1912 | bron@monetary-metals.com Skype: bron.suchecki Twitter: @bronsuchecki Website: monetary-metals.com Use this link to encrypt and safely send confidential documents to Monetary Metals® https://cloud.sookasa.com/upload_page/f840a3c3-54e5-42b0-85b4-15c9e94ea5e  end Major gold/silver trading/commentaries for THURSDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Is there gold “hype” and is gold an emotional trade? By janskoyles June 15, 2017 0 Comments

– Very little hype in gold

– Sentiment is important in the gold market as is other markets particularly stocks

– Article ignores the large body of research showing gold is safe haven asset

– Gold may struggle to breach $1,300 in short term

– Trading gold and short term speculation is high risk and for professionals

– Important for investors to focus on long term fundamentals which remain sound

Cycle of Emotions – Hope Phase Now (GoldCore)

Earlier this week Shelley Goldberg , commodities strategist for Roubini Global Economics wrote  about how gold was set to disappoint the ‘gold bulls – again.’ Goldberg argued that we should ‘throw out all the fancy analysis and realize that gold is an emotional trade.’

Aside from yesterday’s little hiccup following the Fed announcement, the gold price has had a great year. Goldberg agrees, ’After breaking through a six-year downtrend line, gold rose last week to its highest level since Nov. 4, and is up an impressive 10.5 percent this year.’

Despite this performance Goldberg argues that we shouldn’t ‘believe the hype’ when it comes to gold. The hype she is referring to seems to be made up of the various op-eds and analysis that argue $1,300/oz is a key barrier for the metal to break through in order to set off on a bull run.

A very straightforward presentation of the ‘number of reasons why gold is in demand’ makes up the bulk of Goldberg’s article, yet she concludes ‘with so many valid reasons for gold to rally further, why am I a doubter?  The most rudimentary reason is that gold is also an emotional trade and $1,300 is a round number. One need not be a superstar technical analyst. Just consider that for both psychological and systematic reasons, traders and algorithms like to sell on landmark numbers that also serve as a testing ground for a rally’s sustainability.’

Is the evidence that traders like to trade off ‘landmark numbers’ but analysis says it should go higher evidence that there is ‘hype’? We disagree. Rather we argue that not only is there relatively little hype in the gold market but that it is significantly outshone by all the reasons Goldberg gives herself, for why gold demand is up.

Where is the hype?

A brief google search of ‘$1,300 gold’ and my own daily experience of reading gold commentary does not bring me to the conclusion that there is hype. Gold has had a great year, but it has also surprised and disappointed many of us for the last couple of years. We are all aware that $1,300 is the next significant level, but most think that it needs to go higher than this in order to get any significant momentum.

This is something most seem relatively balanced about. There is a huge amount going on both politically and economically at the moment. As we often conclude so many of these commentaries, there is uncertainty everywhere and that includes gold’s performance.

We are not even seeing any ‘hype’ when it comes to physical gold buying. Gold demand is down in the US and we are not in any religious periods that mean manic gold buying as we often see during wedding season in India or New Year in China.

The focus on $1,300 reduces the argument for gold down to one thing – people only care about gold because of the price. This isn’t true, partly because of the six very comprehensive and real reasons Goldberg herself gives to the bullish argument to own gold but also thanks to academic evidence, history and sentiment.

Why is gold demand up?

Goldberg offers six reasons for gold’s popularity at present:

  1. Role as an inflation hedge
  2. US Dollar performance
  3. Interest rates
  4. Only commodity showing strength
  5. Concerns over overvalued sectors
  6. Geopolitical risks pushing safe haven demand

These are all very significant reasons for gold’s performance of late. What we tend to see in mainstream commentary regarding gold is the suggestion that when one of these issues begins to ‘improve’ then gold will begin to suffer. This is a very short-term perspective and one which is supported by traders and speculators. It does not take into account long term fundamentals, all of which these six listed factors feed into. The long term fundamentals are not just influenced by these factors but also history, gold’s performance in a portfolio and sentiment.

Does the price matter?

Of course the price matters, we all like to know what we can sell something for should we need to. But does it matter as much as Goldberg seems to think it does?

For much of the time you are holding gold, you should perhaps look at the price in the same way one might view the price of their house. It’s nice to know what its worth but at that moment in time you know you have no plans to sell it and you still need a roof over your head.

Short-term the price of gold may well struggle to breach $1,300. For now it is likely to stay between $1,260-$1,280, especially given the recent Fed announcement and various uncertainties in the global economy. This might sound like bad news for an investor who entered the gold market at nearly $2,000/oz in September 2011. But did the investor buy gold because of its US dollar price or because of the long-term fundamentals and gold’s role as a safe haven?

Just like when you own a house, you also buy home insurance. So when you invest and have savings you should have a form of financial insurance. Of course, the price of this financial insurance matters, but you will also be considering all the factors that affect your investments both long and short-term, you are not just focused on the price.

It’s a safe haven. It’s academic

“…there is plenty of global geopolitical risk to popularize haven investments, from the spreading of radical Islamic terrorism, to unpredictable North Korean, Philippine and Russian strongmen, to Brexit and the potential for other European Union members to exit, to Gulf Cooperation Council nations severing ties with Qatar and heightening tensions in the Middle East. Add to that global warming, climate risk and wars over water. Then consider the U.S., where a special counsel has been set up to investigate Russian meddling in the 2016 election and where hopes are fading for a economic bump from President Donald Trump’s pro-growth fiscal agenda.”

Goldberg seems to think that gold’s role as a safe haven (or form of financial insurance) is only valid due to geopolitical risk. In fact, gold acts as a safe haven against the initial five reasons she lists for gold demand climbing.

Back in February, we defined a safe haven as ‘An investment that is expected to retain its value or even increase its value in times of market turbulence. Safe havens are sought after by investors to limit their exposure to losses in the event of market downturns.’

In that same article we drew the reader’s attention to the growing body of research on gold and its financial role. Goldberg appears to be unaware of this academic evidence which appears to turn so called hype and emotional trading into real, analytical evidence for gold’s vital role in a portfolio, regardless of its price performance.

The academic research does not define gold as just having one role, for instance ’Hedges and Safe Havens – An Examination of Stocks, Bonds, Oil, Gold and the Dollar’ by Dr Constantin Gurdgiev and Dr Brian Lucey is an excellent research paper which clearly shows gold’s importance to a diversified portfolio due to gold’s “unique properties as simultaneously a hedge instrument and a safe haven.”

As Goldberg points out, sentiment for safe havens are high at present because of the geopolitical sphere. But, she also dismisses gold because it is an emotional investment. In truth, the two cannot really be separated; there is a fine line between sentiment and emotion.

If sentiment is high then we can perhaps feel too confident about an investment and we act on that emotion, and vice versa. But Goldberg seems to think that gold investors are unable to keep these feelings in check or that these are invalid reasons for investing at all.

Conclusion: What’s wrong with a bit of emotion?

“The desire of gold is not for gold. It is for the means of freedom and benefit” Ralph Waldo Emerson

Like any market, sentiment plays a big role in the price and demand for gold. There is also strong anecdotal evidence of gold demand being driven by emotion – the purchase of jewellery is the most obvious example but also consider demand for gold bars and coins during religious festivals. Additionally when people feel panicked or threatened (see Emerson’s quote) then demand for gold will go up.

None of these reasons make gold an investment that feeds of hype and should be ignored. Human emotions and sentiment drive markets, they have throughout history and they will continue to do so. What’s wrong with a bit of emotion? Very few humans can honestly say that some of the biggest life decisions they have made have not been as a result of emotion.

The key here is to be aware of when emotion is the only reason you are making an investment decision, rather than considering the other factors such as gold’s role in the wider economy, in your portfolio and its past performance.

Is gold an emotional trade? It depends on the trader. To give a blanket statement that ‘gold is also an emotional trade’ is to suggest that everyone who buys and sells gold is blinded by emotion.

Goldberg is dismissive of the multitude of factors that affect the decision to buy and hold gold, instead focusing on the price. Investors should always be aware of the risks when investing in gold, but investing in gold means you are considering and insuring yourself against the risks in the wider economy and political sphere. When you take these into account then you are unlikely to be worrying about so-called hype and an arbitrary number picked out of a price chart.

News and Commentary

Gold eases after Fed raises interest rate (MarketWatch.com)

Fed raises rates, unveils balance sheet cuts in sign of confidence (Reuters.com)

ETF rebalancing on Friday – Bumpy ride for junior gold miners (TheGlobeAndMail.com)

Oil settles at a 7-month low under $45 a barrel (MarketWatch.com)

Gold jumps, but traders see limited upside ahead of the Fed (CNBC.com)

Is Gold Undervalued? (MorningStar.co.uk)

Bundesbank’s Weidmann: Digital Currencies Will Make The Next Crisis Worse (ZeroHedge.com)

You won’t believe this stupid new law against Cash and Bitcoin (SovereignMan.com)

How the U.S. government tried to convict a golden rooster (QZ.com)

What’s next for the pound? Frisby (MoneyWeek.com)

end

 

A very important commentary from Andrew Maguire today.  He comments on the continual spoofing in the gold/silver markets by central banks.  He also has stated that sovereigns have bids at around $1260 or slightly below and that will give support to the market

 

(courtesy Andrew Maguire/Kingworldsnews)

 

 

Government’s agents keep ‘spoofing’ in gold market, Maguire tells KWN Submitted by cpowell on Wed, 2017-06-14 16:42. Section:

12:44p ET Wednesday, June 14, 2017

Dear Friend of GATA and Gold:

London metals trader Andrew Maguire today tells King World News that entities trading gold futures for the Federal Reserve and Bank for International Settlements were entering “spoofing” trades in gold futures yesterday at gold’s 50-day moving average and that he reported this, along with supporting data, to the U.S. Commodity Futures Trading Commission.

With all the recent investigations, lawsuits, and criminal charges recently brought against market manipulation, Maguire says, only the operatives of governments and central banks would continue such “spoofing.”

Maguire’s interview is excerpted at KWN here:

http://kingworldnews.com/alert-whistleblower-andrew-maguire-says-illegal…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

 

 

 

 

 

END

 

It looks like our major bankers did not win in their fight to manage the State of Texas new gold depository: Lone Star tangible won and they will also provide services for anyone wishing to hold gold there.

 

(courtesy Texas Tribune/GATA)

 

Texas taps private vendor to manage first state-run gold depository in U.S.

Submitted by cpowell on Thu, 2017-06-15 00:56. Section:

By Andy Duehren
Texas Tribune, Austin
Wednesday, June 14, 2017

https://www.texastribune.org/2017/06/14/texas-taps-private-vendor-first-…

Two years after Gov. Greg Abbott announced Texas would build the country’s first state-run gold depository, the project took a major step forward today.

Comptroller Glenn Hegar announced at a news conference at the Capitol that his office had selected Austin-based Lone Star Tangible Assets as the private vendor tasked with building and operating the Texas Bullion Depositor

“The Texas Bullion Depository will offer Texas safe, fully-insured storage of precious metals providing an alternative to the depositories largely located in and around New York City,” Hegar said.

In 2015, the Texas Legislature passed House Bill 483, creating a gold depository in Texas. The project’s main cheerleader, state Rep. Giovanni Capriglione, R-Southlake, was only able to pass the bill after rewriting it to ensure there would be no cost to the state by requiring that a private vendor run it and charge fees.

The depository will store gold and other precious metals, allowing customers to open accounts and potentially pay for transactions with them.

The state has signed a five-year-contract with Lone Star Tangible Assets with two one-year extension options, Hegar said.

Hegar said the depository could open in Lone Star’s current Austin facility as early as January. The company will also build a new vault facility in the Austin-area specifically for the Texas Bullion Depository, Hegar said. That facility could be ready as early as December 2018.

But Hegar said he expects Texans won’t have to travel to Austin to open accounts at the depository.

“We envision a network of licensed and insured depository agents to help Texans sign up for our services,” Hegar said.

The announcement ends a two-year review process in the Comptroller’s office for a private vendor to run the depository. More than a dozen companies responded last year to Hegar’s request for private sector input on the project. Tom Smelker, the director of Treasury Operations in the Comptroller’s office, will serve as the state’s first Texas Bullion Depository administrator.

Abbott drew national attention in 2015 when he announced that the depository would allow Texas to “repatriate” $1 billion in gold bullion currently being stored in New York. He was referring to gold bullion assets held by the University of Texas Investment Management Company, which oversees the assets of both the University of Texas and Texas A&M systems.

The nonprofit currently has $861.4 million worth of gold bullion in storage at the HSBC Bank in New York City, according to Jenny LaCoste-Caputo, a spokeswoman for the UT system. But UTIMCO officials appear unlikely to move their gold holdings to the state depository. Officials there have previously said the Texas depository would have to be a member of the Chicago Mercantile Exchange’s COMEX platform, where gold futures contracts are traded. LaCoste-Caputo confirmed Tuesday that that condition still holds.

The new state depository will not be a member of COMEX, according to Matthew Ferris, chairman of Lone Star Tangible Assets. He pointed to geographical limitations as preventing the Texas Bullion Depository from joining.

“Ultimately, our goal is to create liquidity of COMEX levels in the state of Texas for those large institutions over time,” Ferris said.

LaCoste-Caputo also said that gold storage fees UTIMCO pays would have to be cheaper at the Texas depository than it currently pays in New York for the organization to make the switch.

 

END

 

Barrick to hold talks with Tanzania’s officials to allow export of dore

(courtesy Reuters/GATA)

 

Barrick Gold to hold talks with Tanzania over export row

Submitted by cpowell on Thu, 2017-06-15 01:05. Section:

By Fumbuka Ng’wanakilala and David Lewis
Reuters
Wednesday, June 14, 2017Barrick Gold’s chairman and Tanzania’s president met today and agreed to hold talks aimed at resolving an escalating dispute over an export ban that has hit Barrick’s Acacia Mining.Shares in Acacia, 63.9 percent owned by Barrick, jumped as much as 11 percent, to 303 pence, after the news and closed 5.5 percent higher, outpacing sector rivals.Tanzania is Africa’s fourth-largest gold producer, and Acacia its largest miner, with three gold mines that also produce copper in the East African country.Acacia’s market value has nearly halved to about $1.4 billion since Tanzania banned the export of unprocessed ore in March, part of a push for the construction of a local smelter to make the country’s gold exports more valuable.”I feel very optimistic that we will reach a resolution which is a win-win,” Barrick Chairman John Thornton said after meeting Tanzanian President John Magufuli. …… For the remainder of the report:https://www.reuters.com/article/tanzania-acacia-idUSL8N1JB1YR

end

 

South Africa’s new charter is demanding that mines must be 30% owned by blacks. If you will recall this is the same scenario that wiped out mining in Rhodesia which became Zimbabwe

 

(courtesy zero hedge)

South Africa Says Mines Must Be 30% Black-Owned; Rand, Mining Shares Tumble

Not long after South Africa introduced legislation calling for the redistribution of white-owned land and business to the country’s black population, in a redux of the catalyst that resulted in Zimbabwe’s hyperinflation at the start of the century, on Thursday South Africa doubled down when it announced plans to revise its mining charter and introduce rules requiring all local mines be 30% black-owned, regardless of whether they have previously sold shares or assets to black investors that later divested.

Mining stocks promptly tumbled on the news, with shares in Anglo American sliding 5% after the announced mining regulation changes; AngloGold and Kumba also fell 5 percent in Johannesburg, while Sibanye traded 6.5% lower.

The charter revision comes shortly after Africa’s most industrialised economy entered its first recession since 2009, with investor confidence already shaken by infighting within the ANC over the scandal-hit presidency of Jacob Zuma.

The proposal was unveiled by the Department of Mineral Resources which said it intends to raise the minimum black-ownership level from the current 26% to ensure more proceeds from the country’s natural resources flow to the black majority, Mining Minister Mosebenzi Zwane told reporters on Thursday in Pretoria. The charter will also require companies to pay 1% of annual revenue to communities and new prospecting rights will require black control, Zwane said.

“The mining sector does not exist in a vacuum,” Zwane said as he unveiled the charter on Thursday. South African miners needed “strong legislative regimes” to thrive, he added.

“We have listened to miners who have not seen real economic benefit; people who don’t see benefit of transformation structures,” he said.

Some more details from Bloomberg:

A holder who claims a historical transaction that achieved 26 percent prior to the new Mining Charter, which Zwane presented on Thursday, “must top up to 30 percent within 12 months,” regardless of whether the earlier black shareholders still hold their position, according to a statement handed to reporters

According to Bloomberg, most mining companies reached the 26% level under previous versions of the mining charter but many black investors have since sold out. The Chamber of Mines, which represents mining companies, has said it’s willing to fight the government in court over the issue of getting credit from earlier deals, which it says would kill investment in the industry.

Glencore Plc, Impala Platinum Holdings Ltd., South32 Ltd. and Kumba Iron Ore Ltd., which is majority owned by Anglo, would need to sell the biggest stakes if the new charter fails to give credit for previous deals, Avior Capital Markets (Pty) Ltd. said June 1. AngloGold Ashanti Ltd. and Sibanye Gold Ltd., the country’s two biggest gold miners, may also be affected by the new rules.

As the FT adds, President Zuma has called for “radical economic transformation” to more fairly share the benefits of South Africa’s economy among the black majority. Zwane, a close ally of embattled president Zuma, said the government was “not blind” to the downturn but added that “there’s a need to produce a new era of industrialisation driven by young economic champions,” referring to the charter as a “revolutionary tool”.

Miners who rely on international supply chains to operate in South Africa may be hard hit by rules that require companies to procure 80 per cent of services and 70 per cent of goods from black-owned local suppliers.

 

In addition, the holder of a South African mining right will be forced to pay 1 per cent of its annual turnover to communities.

Confirming that this is the latest disastrous populist policy adopted by South Africa, the rand promptly tumbled on the news.

=

 

END

 

 

For your enjoyment.

 

(courtesy Bloomberg/GATA)

Getting high on cryptocurrencies

Submitted by cpowell on Thu, 2017-06-15 01:10. Section:

By Tim Culplan
Bloomberg News
Wednesday, June 14, 2017

There are now four times as many cryptocurrencies in circulation as fiat currencies.

That’s amazing. And encouraging.

According to the Swiss Association for Standardization, which maintains the International Standards Organization database, there are 177 national currencies currently in use. That list generously includes four precious-metals and four bond-market units (codes XBA to XBD, for the curious).

The CoinMarketCap website lists 753 cryptocurrencies, all the way from Bitcoin and Ethereum down to StrongHands and Paccoin (current value: $0.00000014).

With a retired basketball star promoting one such incarnation — tied to marijuana — on a recent trip to a repressive Asian nation lying to the north of South Korea, I’m tempted to call Peak Crypto.

But let’s not kid ourselves: The madness is far from over. Bitcoin skeptics have been eating their words ever since the leading digital currency reached $1,000. January seems like such a long time ago now that Bitcoin is trading above $2,700. …

… For the remainder of the report:

https://www.bloomberg.com/gadfly/articles/2017-06-14/this-cryptocurrency…

end

Your early THURSDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    

1 Chinese yuan vs USA dollar/yuan  WEAKER 6.8035(DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES  MUCH WEAKER TO ONSHORE AT   6.8042/ Shanghai bourse CLOSED UP 1.81 POINTS OR 0.06%  / HANG SANG CLOSED DOWN 310.56 POINTS OR 1.20% 

2. Nikkei closed DOWN 51.70 POINTS OR 0.26%   /USA: YEN RISES TO 109.77

3. Europe stocks OPENED IN THE RED        ( /USA dollar index RISES TO  97.27/Euro DOWN to 1.1166

3b Japan 10 year bond yield: FALLS TO   +.053%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.06/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  44.64 and Brent: 46.95

3f Gold DOWN/Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil DOWN for WTI and DOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.262%/Italian 10 yr bond yield UP  to 1.998%    

3j Greek 10 year bond yield RISES to  : 5.86???  

3k Gold at $1254.15  silver at:16.78 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 10/100 in  roubles/dollar) 57.50-

3m oil into the 44 dollar handle for WTI and 46 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A SMALL SIZED DEVALUATION SOUTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 109.77 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9739 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0877 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLSS to  +0.262%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.145% early this morning. Thirty year rate  at 2.785% /POLICY ERROR)GETTING DANGEROUSLY HIGH

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Global Stocks Slide On Trump Probe Report, Fed Indigestion

Is it going to be another May 17, when US stocks tumbled as concerns of a Trump impeachment over obstruction of justice and impeachment surged ahead of Comey’s testimony?

Overnight, S&P500 futures accelerated their decline following yesterday’s WaPo report that Special Counsel Mueller has launched a probe into potential obstruction of justice by Trump…

…   while European and Asian markets dropped dragged lower by commodities which reacted to the latest Fed rate hike, as copper dropped and oil fluctuated. The Bloomberg commodity index fell to the lowest in more than a year, pressuring miners and E&P companies which were among the big losers as the Stoxx Europe 600 Index retreated for a second day. The dollar advanced after the Fed raised interest rates for the second time in 2017 and Yellen suggested the strength of the U.S. labor market will ultimately prevail over recent weakness in inflation, which however the bond market strongly disagrees with, sending the curve the flattest its has been since October.

Traders were surprised as Yellen played down the recent drop in inflation and voiced confidence the central bank was on course to hit its 2% inflation goal, something it hasn’t done in three years. As Bloomberg notes, the Fed’s actions and words struck a careful balance between showing resolve to continue tightening in response to falling unemployment while acknowledging the persistence of unexpectedly low inflation this year. Adding to the uncertainty, the WaPo reported that the special counsel investigating Russia’s interference in the 2016 election plans to interview two top U.S. intelligence officials about whether Trump sought to “pressure” them to back off a related probe of former National Security Adviser Michael Flynn.

In China, overnight the PBOC injected net 90 billion yuan with reverse repos, strengthens CNY fixing to strongest since November, however unlike in March, this time the PBOC did not raise rates on its reverse repo operations, thereby not following the Fed by tightening further. Dalian iron ore slides two percent. Australia’s S&P/ASX 200 Index slumped 1.2% , with energy and raw-material shares dropping more than 2% . The Hang Seng Index slid 1.2 percent as Hong Kong followed the Fed’s move, elevating the risk of a selloff in the world’s priciest housing market.

European equities followed Asia’s lead, opening lower after the Fed raised rates for the second time this year. Subsequent dollar strength persisted while Treasuries were range-bound, having dropped after Yellen’s comments. French and Spanish bond sales pressured European fixed income; OATs extended losses, demand in 10Y Spain supply strong. WTI futures trade below $45, having dropped sharply on higher-than-expected U.S. inventories. Weaker-than-forecast U.K. retail sales helped push GBP lower, though largely driven by dollar gains, before the BOE decision at 12 p.m. in London.

S&P 500 futures dropped 0.7 percent as of 6:45am EDT. The index dropped 0.1% on Wednesday, while the tech-heavy Nasdaq indexes retreated 0.4%. The Dow Jones Industrial Average edged higher to a fresh record. The Stoxx Europe 600 Index retreated 0.7 percent.

The Bloomberg Dollar Spot Index rose 0.2 percent following three days of losses. The yen was little changed at 109.57 per dollar after climbing 0.5 percent Wednesday. The British pound weakened 0.4 percent to $1.2703 and the euro retreated 0.3 percent to $1.1181. The Australian dollar strengthened 0.3 percent after employment surged in May. The New Zealand dollar fell 0.5 percent as data showed the economy grew less than expected in the first quarter.

In rates, the 10-year Yield rose one basis point to 2.14% after dropping 8.5 bps Wednesday to 2.13 percent, the lowest level since November, a clear indicator that the bond market is convinced the Fed is making a mistake. The yield on benchmark U.K. bonds rose three basis points to 0.96% , while those of French and German peers also increased two basis points.

WTI swyng around the flatline before falling 0.1 percent to $44.70 a barrell, extending a 3.7% drop in the previous session. U.S. gasoline supplies unexpectedly rose for a second week. Gold rose less than 0.1 percent to $1,261.42 an ounce after sliding 0.5 percent the previous day.

Overnight Media Digest

  • European bourses trade lower amid the negative lead from Asia post-FOMC
  • EUR/USD has been on the back foot this morning and has now slipped back under 1.1200, but as we noted yesterday, strong demand anticipated in the 1.1150-60 area
  • Looking ahead, highlights include US CPI, Retail Sales, DoEs and the FOMC rate decision

Market Snapshot

  • S&P 500 futures down 0.7% to 2,420
  • STOXX Europe 600 down 0.7% to 385.37
  • Brent Futures up 0.3% to $47.13/bbl
  • Gold spot up 0.1% to $1,261.89
  • U.S. Dollar Index up 0.2% to 97.14
  • German 10Y yield rose 1.7 bps to 0.243%
  • Euro down 0.3% to 1.1184 per US$
  • Italian 10Y yield fell 4.1 bps to 1.649%
  • Spanish 10Y yield rose 4.8 bps to 1.43%
  • MXAP down 0.8% to 154.71
  • MXAPJ down 0.8% to 502.18
  • Nikkei down 0.3% to 19,831.82
  • Topix down 0.2% to 1,588.09
  • Hang Seng Index down 1.2% to 25,565.34
  • Shanghai Composite up 0.06% to 3,132.49
  • Sensex down 0.2% to 31,084.67
  • Australia S&P/ASX 200 down 1.2% to 5,763.19
  • Kospi down 0.5% to 2,361.65

Top Overnight News from Bloomberg

  • Mueller Said to Examine Whether Trump Sought to Slow Flynn Probe
  • Messaging Startup Slack Said to Draw Interest From Amazon.com
  • Rand Weakens as South Africa Says Mines Must Be 30% Black- Owned
  • U.K. Retail Sales Fall More Than Forecast as Squeeze Hits
  • Hammond to Make Public Case for Brexit That Protects Economy
  • SNB Keeps Key Rate on Hold as Inflation Forecasts Trimmed
  • Supply Weighs on EGBs; Block Trades in Bunds, Downside in Schatz
  • New U.S. Carrier Hobbled by Flaws in Launching, Landing Planes
  • Western Digital Seeks Injunction to Block Toshiba Chip Sale
  • Hammond to Make Public Case for Brexit That Protects Economy
  • Netlist Sues SK Hynix for Patent Infringement in California
  • Columbia Sportswear Names Jim Swanson CFO
  • Cummins Plans Electric Powertrain for Commercial Vehicles by ’19
  • CALC to Buy 50 Boeing 737MAX Aircraft for List Price of $5.8b
  • Yahoo Reports Alibaba VWAP, Prices for Shares in Tender Offer
  • Hilton Grand Vacations Holder Blackstone Offering 9.65m Shares
  • Flex Gains After Jabil 3Q Rev. Beats; Benchmark, Plexus May Move
  • AveXis Reports Alignment With FDA on Manufacturing; Shares Rise
  • Carney’s Quiet Period Ends With U.K. Demanding Attention
  • MUFG Said to Consider Shrinking Headcount by 10,000 Over Decade
  • Deutsche Bank Said to Create New Global Capital Markets Unit

A cautious tone gripped Asia with most major bourses negative following a similar showing in US, after the Fed hiked rates as expected but caught markets off guard with details on how it expects to begin its balance sheet normalization. This dampened ASX 200 (-1.2%) and Nikkei 225 (-0.3%) from the open, with underperformance in the former due to a commodity rout in which WTI crude futures fell over 3% on a narrower than expected draw in headline DoE stockpiles. Hang Seng (-1.1%) was also among the laggards after the HKMA raised base rates in response to the Fed hike and warned of property sector risks, while the Shanghai Comp. (+0.1%) traded choppy with downside stemmed by a firm liquidity effort by the PBoC and as participants digested the latest mixed loans and financing data. 10yr JGBs were higher amid a cautious risk tone in the region and the BoJ’s presence in the market for nearly JPY 700bIn of JGBs, while the curve flattened as the super-long end outperformed. PBoC injected CNY 50bIn in 7-day reverse repos, CNY 40bIn in 14-day reverse repos and CNY 60bIn in 28-day reverse repos. PBoC set CNY mid-point at 6.7852 (Prey. 6.7939).  Australian Employment Change (May) M/M 42.0K vs. Exp. 10.0K (Prey. 37.4K.) Australian Unemployment Rate (May) M/M 5.5% vs. Exp. 5.7% (Prey. 5.7%)

Top Asian News

  • Anbang’s Woes Deepen as Banks Said Told to Halt Dealings
  • BOJ Slowing Bond Buys Put Meeting Under Taper Talk Scrutiny
  • MUFG Said to Weigh Shrinking Headcount by 10,000 Over 10 Years
  • Philippine Overseas Workers Remittances Fall Most in 17 Months
  • Graticule Hedge Fund Said to Part Ways With at Least 5 Staff

European equity markets opened lower in Europe, as an aftermath of the Fed was clear. The FOMC voted to increase interest rates by 25bps, to 1.00% – 1.25% as expected, however, what was less so expected was the optimism toward the US economy from Fed Chair Yellen. As such, 9/10 of the Stoxx 600 sectors trade in the red. Fixed income markets find themselves in subdued trade, as the futures dictated the majority of the move in US hours, following from the aforementioned Fed move. 10y Gilt futures followed GBP in taking no real attention to the UK retail sales, seeing misses across the board, however, upward revisions did soften the blow. Elsewhere, supply today from Europe has come from Spain and France with both auctions relatively well digested by the market.

Top European News

  • U.K. Retail Sales Fall More Than Forecast as Squeeze Hits Home
  • SNB Keeps Key Rate on Hold as Inflation Forecasts Trimmed
  • DFS Plunges After Profit Warning, Leads U.K. Retailers Lower
  • U.K. Sofas Join Tories in Election Slump as DFS Orders Plunge

In currencies, it was a quiet start to London trade in the aftermath of the FOMC announcements last night, where the 25bp hike was followed up with details on balance sheet reduction as well as a generally upbeat tone on growth, inflation and the labour markets. The overall impact was to redress some of the overly bearish USD sentiment, which has been justified on valuation levels against some of its major counterparts, but perhaps a little too zealously in the time frame(s) achieved. EUR/USD has been on the back foot this morning and has now slipped back under 1.1200, but as we noted yesterday, strong demand anticipated in the 1.1150-60 area, and if not then from 1.1120 again lower down. We have also seen USD/JPY gravitating somewhat nervously back towards 110.00 again, and we can only put this down to the lofty levels on Wall Street, which will have been perturbed by a Fed intent on maintaining the normalisation path. For GBP, it has not been a good week based on politics alone, but on the data front it is not much better, as the slightly higher than expected inflation read on Tuesday was followed up by a drop off in wage growth yesterday while retail sales fell more than expected in this morning’s release. This was marginally offset by prior revisions, but coming up is the BoE announcement, and it is hard to see past a cautious MPC have little alternative but to account for the fresh uncertainty propagated by Theresa May’s snap election and the unnerving end result.

In commodities, given the focus on political and central bank risks of late, the commodities markets have taken a backseat to a larger degree, but standout losses in Oil prices have been prominent, with the WTI taking out USD45.00 on the downside and showing no signs of giving up on even lower levels. On the week, the API build in Crude stocks was the first surprise, added to by the DoE draw which was smaller than expected. Amid the backdrop of growing US shale production, the prospect of a test towards USD40.00 looks ever likely, but there is a strong level of support to contend with down here. Still no change in the Brent premium, which has remained uniform inside USD2.00-2.50. Copper prices have slipped again noticably, making the breach of USD2.60 an all to brief affair, but elsewhere, we see Zinc and Lead showing 1.0% gains on the day, while Nickel is now flat. Gold was choppy over the FOMC last night, having raced up to USD1280 on the post data (inflation/retail sales) USD hit, but is now hovering in the low USD1260’s with Silver still camped below USD17.00.

Looking at the day ahead, we’ll kick off with the import price index reading for May, followed
then by the latest weekly initial jobless claims print and Philly Fed
manufacturing index for June. Following that we then get industrial and
manufacturing production for May before finishing with the NAHB housing
market index reading for June.

US Event Calendaar

  • 8:30am: Empire Manufacturing, est. 5, prior -1
  • 8:30am: Import Price Index MoM, est. -0.1%, prior 0.5%; Import Price Index YoY, est. 2.9%, prior 4.1%
  • 8:30am: Export Price Index MoM, est. 0.15%, prior 0.2%; Export Price Index YoY, prior 3.0%
  • 8:30am: Initial Jobless Claims, est. 241,000, prior 245,000; Continuing Claims, est. 1.92m, prior 1.92m
  • 8:30am: Philadelphia Fed Business Outlook, est. 24.9, prior 38.8
  • 9:15am: Industrial Production MoM, est. 0.2%, prior 1.0%; Capacity Utilization, est. 76.8%, prior 76.7%
  • 9:15am: Manufacturing (SIC) Production, est. 0.1%, prior 1.0%
  • 9:45am: Bloomberg Consumer Comfort, prior 49.9
  • 10am: NAHB Housing Market Index, est. 70, prior 70
  • 4pm: Total Net TIC Flows, prior $700.0m deficit; Net Long-term TIC Flows, prior $59.8b

DB’s Jim Reid concludes the overnight wrap

Plenty to get through today but only one place to start and that is with the Fed. As widely expected a 25bp hike in the fed funds rate was delivered lifting the target range to 1.00% to 1.25%. There were no real surprises in the dots either. The 2017 and 2018 median dots were left unchanged at 1.375% and 2.125% respectively implying one further rate hike this year (although 4 members expect 2 more hikes and another 4 members expect no more hikes). The 2019 median dot was rounded down marginally to 2.9375% while the longer run dot was left unchanged at 3%. All the talk though was about the relatively upbeat tone in the FOMC statement, particularly in light of the soft CPI data earlier in the day, a continuation of a somewhat hawkish tone by Fed Chair Yellen in the postmeeting press conference and finally some of the details released around the process of rolling-off the balance sheet.

Touching on those points in some sort of order, there were two notable takeaways from the FOMC statement initially. The first was the slightly more upbeat description of economic activity and the second was the acknowledgement that “inflation on a 12-month basis is expected to remain somewhat below 2% in the near term but to stabilize around the committee’s 2% objective over the medium term”. In the press conference Yellen added to this by saying that “we continue to feel that with a strong labour market and a labour market that’s continuing to strengthen, the conditions are in place for inflation to move up”. As a reminder this followed what was a pretty soft May inflation report released a few hours earlier. Both headline (-0.1% mom vs. 0.0% expected) and core (+0.1% mom vs. +0.2% expected) CPI missed which in  turn pushed the annual rates down to +1.9% yoy (from +2.2%) and +1.7% yoy (from +1.9%) respectively. The YoY rate for the core is now the lowest since May 2015. The Fed Chair sought to downplay the data in her press conference by saying that its important “not to overreact to a few readings” and also that the data can be noisy, while indicating that the recent prints also appear to be the result of one-off factors. In summary, despite having the opportunity to do so, it didn’t feel like the Fed sounded particularly concerned on the inflation front.

In terms of the balance sheet the most notable development was the FOMC announcing the decision to likely proceed with the balance sheet wind down later this year. Specifically, the statement revealed that “the committee currently expects to begin implementing a balance sheet normalization program this year, provided that the economy evolves broadly as anticipated”. There were further details also released which provided some guidance as to the process that the Fed expects to take. In summary the initial cap will be set at $10bn a month of which $6bn will be from Treasuries and $4bn from MBS. The caps will then increase every three months by $6bn for Treasuries until they reach $30bn and $4bn for MBS until they reach $20bn. Once they hit their maximum run off the Fed then expects that “holdings will continue to decline in a gradual and predictable manner until the committee judges that the Fed is holding no more securities than necessary to implement monetary policy effectively and efficiently”.

So where to now? Our US economics team have concluded that their expectations for Fed policy for the rest of this year are unchanged post the meeting. That is they continue to expect a formal announcement about unwinding the balance sheet at the September meeting, to start in October. They also expect a pause in the rate hiking cycle in September, followed by another rate hike in December, assuming that the economy evolves in line with the Fed’s expectations. They add that it is possible for the Fed to both raise rates and announce a shift in its balance sheet policy at the same meeting if the economy, labour market, and (most importantly) inflation surprise to the upside. But recent inflation data have raised the bar for such surprises. You can read more in their report here.

Over in markets the most significant move initially came after the soft inflation data. 10y Treasury yields plunged as much as 11bps to hit an intraday low of 2.101% and the USD sold-off as much as -0.78% from its highs. While the Greenback made a near-complete u-turn post the FOMC to finish little changed on the day Treasury yields only edged a couple of basis points off their lows. 10y Treasuries still finished the day 8.5bps lower in yield at 2.126% for the lowest close since November last year. The curve flattened fairly dramatically too. The 2s10s spread tightened over 5bps to 79bps and is now at the tightest since September 1st. As a reminder this was as high as 136bps in December. The low in 2016 was 75bps and should it tighten below that, then it will hit the lowest spread since 2007. The 5s30s spread of 105bps is only a smidgen off the YTD lows too. It’s worth noting that Oil tumbled -3.72% yesterday and below $45/bbl following the latest inventory data which didn’t go unnoticed for bond  markets. Meanwhile the S&P 500 finished a choppy session down -0.10% with the energy sector underperforming, while the Nasdaq (-0.41%) underperformed once again and fell for the third time in the last four sessions.

All that to look forward to but before we get there, this morning in Asia equity markets have mostly followed the lead from Wall Street in falling into the red. The Nikkei (-0.43%), Hang Seng (-0.90%), Kospi (-0.62%) and ASX (-1.12%) are all weaker with energy and commodity-sensitive names most under pressure. Bourses in China are little changed while US equity index futures are also slightly in the red. Sovereign bond markets have rallied with the antipodeans in particular around 5bps lower in yield. In FX the Aussie Dollar (+0.58%) has been the big outperformer following better than expected employment numbers in Australia this morning.

Back to yesterday. The other notable data release in the US was the May retail sales report. The data was also disappointing with headline sales falling unexpectedly (-0.3% mom vs. 0.0% expected) – the biggest one month decline since January 2016 – and ex auto and gas sales flat versus expectations for a +0.3% mom rise. The control group (0.0% mom vs. +0.3% expected) also missed although there was a reasonable upward revision to the April reading. Away from that business inventories in April fell -0.2% mom as expected.

In the UK the remaining employment data revealed that the ILO unemployment rate held steady at 4.6% in April while the claimant count rose 7k for the third consecutive monthly increase. Elsewhere in Europe CPI for Germany in May was confirmed at -0.2% mom and +1.4% yoy (unrevised from the initial flash reading) while industrial production for the Euro area was confirmed as rising +0.5% mom, bang in line with the consensus. European bond yields moved in tow with Treasuries following that soft US CPI data. 10y Bund yields finished the day down 4.0bps at 0.223% while OATs were 2.5bps lower at 0.579%. It was the move for Gilts which stood out however with the rally clearly supported by that soft wage growth number. 10y Gilt yields plummeted 10.7bps to 0.927%, the lowest level since October last year and the biggest one-day rally since December 2nd.

Looking at the day ahead, this morning in Europe we’ll receive the final May CPI reports for both France and Italyfollowed by May retail sales data in the UK (core retail sales expected to decline -1.0% mom). Following that we’ll get the April trade balance for the Euro area before attention turns over to the aforementioned BoE policy rate decision at midday. This afternoon in the US there are a number of reports due out. We’ll kick off with the import price index reading for May, followed then by the latest weekly initial jobless claims print and Philly Fed manufacturing index for June. Following that we then get industrial and manufacturing production for May before finishing with the NAHB housing market index reading for June. Away from that we’ll also get the SNB rate decision today, while another event to keep an eye on is the Euro area finance ministers meeting in Luxembourg where debt relief for Greece is expected to be discussed.

3. ASIAN AFFAIRS

i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 1.81 POINTS OR 0.06%   / /Hang Sang CLOSED DOWN 310.56 POINTS OR 1.20% The Nikkei closed DOWN 51.70 POINTS OR 0.26%/Australia’s all ordinaires  CLOSED DOWN 1.12%/Chinese yuan (ONSHORE) closed DOWN at 6.8035/Oil DOWN to 44.64 dollars per barrel for WTI and 46.95 for Brent. Stocks in Europe OPENED IN THE RED,,      ..Offshore yuan trades  6.8042 yuan to the dollar vs 6.8035 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT HAPPY TODAY WITH THE RISE IN THE USA DOLLAR 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

b) REPORT ON JAPAN c) REPORT ON CHINA

This is huge!! The large Chinese conglomerate Anbang which deals in insurance and other aspects of the global economy just received moments ago a  systemic risk as revenues crash 90% as its Chairman Wu has been detained. This will no doubt cause a systemic crash in the Chinese economy due to the potential liquidation of WMP products and Anbang itself!!!

(courtesy zerohedge)

Anbang Just Became A “Systemic Risk”: Revenues Crash 90% As Its Chairman Is “Detained”

As reported earlier this week, overnight Bloomberg confirmed that Wu Xiaohui, the chairman of China’s insurance conglomerate which recently made headlines in the US for nearly reaching a deal with Jared Kushner over 666 Fifth Ave., was detained by a joint team of Central Commission for “Discipline Inspection” and police for questioning. It adds that that Chinese investigators who detained Wu are carrying out a wide probe that includes looking into the sources of funding for the firm’s acquisitions overseas, possible market manipulation by insurers, and “economic crimes.”

The Wall Street Journal reported earlier that investigators were seen checking whether Wu – whose fortune last year was calculated to be just over $1 billion – was involved in bribery and other economic crimes at Anbang and that Wu couldn’t be contacted for comment. As noted on Wednesday, Anbang said Wu couldn’t perform his duties for personal reasons, a story which has since been disproved.

The authorities are said to be examining Anbang transactions including acquisitions overseas and their funding. According to Bloomberg;s sources, the probe also fits into a broader investigation of possible market manipulation by insurers, although they didn’t specifically define the term “economic crimes.” The action is the result of the government’s crackdown on a sector that is “supposed to help families and companies cut their financial risks, but has recently become a hub for rampant financial speculation.”

Yet while Wu’s fate now appears sealed, swallowed by China and unlikely to reemerge any time soon if ever, questions have emerged about the viability of Anbang Insurance Group itself, which as the NYT reported overnight, has seen its growth come to a “screeching halt” as Chinese investors who helped fund its meteoric rise no longer want to have anything to do with the politically connected company which is “no longer in Beijing’s good graces.”

Specifically, according to government data released on Thursday, Anbang’s sales of life insurance policies and investment products, an key source of cash, stopped almost completely in April after tumbling sharply in March. It wasn’t just Anbang: across the insurance industry, where the (ab)use of Wealth Management Products is prevalent, sales slowed in April compared with earlier in the year.

More details:

From January through March of this year, Anbang raised three-fifths as much money as it raised all of last year, government data shows. It has maintained a large stockpile of cash after a series of big investments fell apart, including a $14 billion bid for Starwood Hotels and Resorts and a deal for a Manhattan office tower with Kushner Companies, the family real estate firm partly owned by Jared Kushner, the son-in-law of President Trump and an administration adviser.

 

But Anbang’s latest figures are eye-catching for the opposite reason. Including new kinds of policies and wealth management products, it took in only $218 million in April this year, down from $5.92 billion in the same month last year, the government data on Thursday showed.

That was the biggest Y/Y collapse in the company’s premium income on record, and as a result Anbang is now under “acute” financial pressure. The NYT notes that “its revenue from existing life insurance policies and certain wealth management products was down 88 percent in April compared with the same month the previous year. The rest of the industry was up 4.5 percent in the same period.”

While largely ignored on the list of potential Chinese risk factors, Anbang’s troubles could soon become systemic.

In early May, Chinese insurance regulators ordered Anbang to stop selling two investment products. One, they said, was improperly marketed as long-term insurance while a crucial application for the other lacked an actuary’s signature. By that point, Anbang was already in trouble. Questions about Anbang’s financial strength had begun circulating on social media in China in March and April, as Chinese officials publicly raised questions about sales of wealth management products by some insurers.

If the drop in revenue is steep enough, Anbang could eventually be forced to liquidate assets. A big factor will be what happens with its existing policies and investment products, which comprise China’s shadow banking system. As the NYT adds, Anbang’s annual report provides little information on the monthly tempo at which its previously issued investments are maturing. The company might need to pay them out if they are not rolled over into further investments with the company. The company’s policies do have very stiff penalties on early redemption to discourage holders from turning them in early for cash. Anbang could raise money by selling some of its investments, but that could take time.

Additionally, the conglomerate, which over the past 3 years was nothing short of the world’s most aggressive “roll up” has been an active investor in Western hedge funds, in addition to making outright acquisitions of overseas companies. And those terms tend to impose severe limits on Anbang’s ability to ask for its money back quickly. That said, a firesale of Anbang assets, which include the Waldorf Astoria, should be a fascinating event.

The biggest risk from a potential unwind of Anbang, however, is the fate of its billions in  WMP “assets” and whether any troubles at the insurer lead to investor impairment, and a potential run on China’s $8.5 billion “shadow bank” considered by many as the Achilles heel of China’s massively overlevered financial system

end

 

Not only is China trying to rein in shadow banking activities but now we are witnessing a crash in net bond issuance

China  is not growing at all

(courtesy zero hedge)

A New Chinese Threat Emerges: Net Bond Issuance Crashes Most On Record

One month ago, we first highlighted a troubling development for China’s banking system, one which we called the “Great Shadow Unwind” and which showed that entrusted loans, a broad proxy for China’s unregulated ‘shadow banking’ system, contracted for the first time since 2007, confirming Beijing’s ongoing crackdown of China’s runaway $8.5 trillion shadow banking system. Well, overnight, the PBOC released its latest Chinese loan data, and it had several notable highlights, most of which got lost in today’s overall noise.

First, the one aspect of the latest Chinese data most commentators focused on and discussed, was the collapse in China’s M2 aggregate to just 9.6%, which not only missed expectations of 10.4%, but was also the lowest print on record.

However, unlike most developed nations, M2 in China has largely become an anachronism from China’s pre-shadow banking past, which excludes many of the broad monetary-equivalents in circulation. This is how Goldman explained this morning why those concerned about the plunge in M2 growth shouldn’t lose much sleep: “We put more weight on the adjusted total social financing data, because M2 data are heavily distorted by borrowings between financial institutions which may have relatively limited impacts on the real economy, though TSF has its own problems– such as not including all forms of financing, especially newly developed ones.”

Touching on the plunge in M2, on the PBOC’s website, the central bank explained that slower M2 growth was a result of declining leverage, and the implementation of a “prudent, neutral monetary policy, and intensified supervision that has compelled the financial system to reduce leverage,” adding that as deleveraging continues, “slower M2 growth than in the past will become a new normal.”

Which, in turn brings us to the far more important, for China, loan number: Total Social Financing – a monetary aggregate that captures both traditional bank loans as well as shadow loans, including trusted, entrusted loans and undiscounted bankers accepetances, which in May likewise dropped to CNY 1.06tn, missing consensus estimates of CNY 1.19tn and down from 1.39 tn in April.

And while the PBOC has aggressively clamped down on shadow financing, the central bank has refrained from cutting off traditional bank loans to companies, aiming to support growth. And, sure enough, in May China’s new Yuan loan creation did beat estimates modestly, rising by CNY1.11tn vs CNY 1tn expected. This number is hardly anything to write home about however, because as Goldman explains, “strong broad credit growth is mainly a reflection of continued strength in credit demand and the willingness of the central bank to maintain just enough liquidity to the real economy to maintain growth at the current near-trend level. This is likely the main driver of stronger RMB loan growth in April and May, which offset the fall in non-loan credit in total social financing data.”

But while loan growth was stable, it was the broader TSF which demanded further attention, not least of all because – by definition – it should be bigger than its loan component. Since that was not the case, it suggests that one or more of the other TSF components declined. But before that, here is a look at China’s broadest credit growth on a annual basis: just like M2, the slowdown in the overall growth rate is, while not quite as sharp, quite visible and is a bright red flag that China’s credit impulse is turning sharply negative.

So what decline?

The answer brings us back to the abovementioned entrusted loans, a topic we first brought up a month ago. As the chart below shows, not only did entrusted loans drop for the second month in a row, but in May, they posted the biggest drop on record, dropping by CNY28 billion.

However, this time it wasn’t just entrusted loans: bankers’ acceptance bills, another key, if far more volatile, shadow funding conduit also posted a monthly decline in the past month, dropping by CNY124 billion.

For those unfamiliar, here is a breakdown of the three main “shadow” credit components,  all unique to China:

  • Entrusted loans: Loans organized by a bank between borrowers and lenders. These are essentially inter-enterprise loans due to the difficulties involved in direct borrowing and lending between commercial enterprises.
  • Trust loans: Loans made by trust companies. Typical investors are high net worth individuals and corporations, and typical maturity of these products is two years. Trust loans are often used to finance infrastructure and real estate projects and are an important source of funding for private entities and risky borrowers who have difficulties in accessing bank loans.
  • Undiscounted bankers’ acceptance: A type of short-term credit issued by a firm with a bank’s guarantee. The firm’s deposit at the bank serves as both the collateral for the credit and the source of payment at a future date. While normally used in commercial transactions, this is also a way for banks to move assets off balance sheet and to engage in high-risk lending.

And yet, neither the drop in entrusted loans, nor the decline in undiscounted bankers acceptance was the highlight of the latest Chinese data: China’s “Great Shadow Unwind” was last month’s story, and is a continuation of the previously discussed crackdown on shadow banking –  which for now appears to be gaining traction – amid moves to contain excessive borrowing as Beijing tries to push all loan creation into the “open” via regulated pathways.

The real story of the latest loan data was the record collapse in net corporate bond financing, the latest and far more “tangible” threat to China’s debt-fuelled economy. As shown in the chart below, in May a quarter trillion yuan in corporate bonds matured, or was repaid, or defaulted, resulting in the biggest corporate debt drain in history.

This has now emerged as the latest major, and most imminent, threat facing China’s financial sector and $10 trillion corporate debt market.

What happened?

It turns out, amid the continued pressure on shadow banking, Beijing’s leverage crackdown has also forced local companies to confront their addiction to traditional short-term corporate bond sales that they use to roll over debt. And, as Bloomberg warns, the shock therapy is worsening the outlook for corporate defaults in the second half of this year, just as borrowing costs jumped to a two-year high.

With various Chinese interest rates – both secured and unsecured  – surging, from Repo and Shibor…

… to short-term funding, as discussed yesterday when we most recently observed the historic inversion in China’s 1s10s curve…

… credit to China’s corporate issuers is suddenly grinding to a halt. In fact, non-banking firms sold 131 billion yuan ($19.3 billion) of bonds with a maturity of one year or less in May, the least since January 2014 and less than half of the same month last year, according to data compiled by Bloomberg which also adds that about 87% of the short note sales last month will be used for refinancing.

For those familiar with the lock up in US shadow markets during the financial crisis, this is a huge warning flag , as the growing asset-liability maturity mismatch is traditionally one of the biggest threats facing an overly indebted financial system.

According to Bloomberg, Chinese firms’ “habit” of relying on borrowing short-term money to repay maturing debt – one could call it a Ponzi scheme, and one would not be wrong – has pushed up such liabilities to a total of 5.2 trillion yuan on China’s listed non-financial companies’ balance sheets as of March 31, the highest on record. Meanwhile, with no sign of an end to the government’s campaign against leverage, the average coupon rate for bonds with a maturity of one year or less has risen to a massive 5.5% in June, deterring issuers from raising money to roll over debt. In fact, not only deterring, but making debt repayment in some cases impossible.

Unable to rollover maturities, an unknown number of Chinese companies may have no option but to default According to Ma Quansheng, of Fullgoal Fund Management, “small issuance of short-term bonds will be a normal phenomenon in the coming six months because cash supply will probably remain tight. Both default risks and the number of corporate bond defaults may increase.

To be sure, Chinese companies have managed to avoid repayment pressure so far in 2017 because thanks to loose funding environment last year, they were able to raise enough money. That, however, is no longer the case. Take for example one-year AAA rated company bonds, whose yield averaged 4.19% this year, up nearly 50% from 2.97% in 2016. According to HFT Investment Management, more note defaults may come “as the economy doesn’t look good.” In the second half of this year, Chinese non-banking firms must repay 2.36 trillion yuan of bonds, according to Bloomberg data.

“The current rising borrowing costs may have a big impact on companies’ operations and finance,” HFT’s Lu Congfan told Bloomberg. “What can you do when you must refinance to repay maturing debt while facing such high borrowing costs? That would be a question challenging many local companies in the second half or next year.

Still, some firms refuse to throw in the towel and are selling bonds despite the soaring yields. One such company is Xingjiang Guanghui Industry Investment, a AA+ rated automobile service provider, which issued one-year bonds at a whopping yield of 7.3% this month, the highest among all notes maturing in one year or less. A recent Moody’s report said that Xinjiang Guanghui’s short-term debt amounted to around 54 billion yuan as of Dec. 31, well exceeding its cash holdings. It is clear that if and when the debt can no longer be rolled over, it and many of its peers, will have no choice but to default.

Meanwhile, the worst issuers’ liquidity problems are getting worse by the day, according to China’s CIC Corp. About 14.6% of bond issuers’ cash and cash equivalents is less than 30% of their short-term borrowings as of March 31. The percentage is higher than the year-end level in 2015 and 2016, said CICC.

Any temporary halt in high-leverage issuers’ access to the short-term bond market could trigger more defaults,” said Wang Ying, head of China research initiative at Fitch in Shanghai. “The government is showing more tolerance for corporate defaults. But if there is any sign of regional risk, it may intervene to prevent default risks from spreading.”

Which brings us back to the chart above: if the biggest net reduction, or drain, in corporate bonds on record is just the start, how far will this spread?

As for the final nail in China’s economy, it may have been the result of Yellen’s own rate hike earlier today: Chen Qi, chief strategist at private fund management company Shanghai Silver Leaf Investment Co., told Bloomberg said the surging borrowing costs will make matters even worse for struggling companies. Recall that in March, after the last Fed rate increase, China had no choice but to match it. Will it risk doing so again, knowing that the outcome could be a wave of corporate bankruptcies as Chinese corporations finds themselves starved of liquidity and locked out of the bond market?

“High-quality companies will still be able to borrow money from banks even if they cancel bond sales,” said Chen in Shanghai. “But it’s difficult for lower-quality companies to get money elsewhere. They may face something bad down the road.”

* * *

Finally, the reason why all of the above matters for not only the Chinese, but global, economy is because as we showed two days ago, China’s credit impulse is already crashing and has suffered its biggest drop since the financial crisis. As UBS calculated, “from peak to trough the deceleration in global credit growth is now approaching that during the global financial crisis (-6% of global GDP), even if the dispersion of the decline is much narrower.

If one adds tens, if not hundreds of billions in Chinese corporate bond defaults to the China, and thus global credit drain next, the global credit impulse, and global deflationary tsunami, may surpass that observed during the financial crisis. And ironically, this “credit crunch” will come at a time when the Fed, unlike back in 2009 when Bernanke had just launched QE1, is hiking rates and preparing todo what it has never done before: reduce its balance sheet without crashing the market.

4. EUROPEAN AFFAIRS

The pound spikes higher as the Bank of England now becomes hawkish on a rate increase.

(courtesy zero hedge)

.

Pound Spikes As BOE “Hawkish” Vote Surprises Traders

The pound sharply reversed overnight losses (the result of weaker than expected UK retail sales 0.90% Y/Y, exp. 1.7%) rising as much as 0.3% to 1.2794 after the BOE announced it kept rates at 0.25%, however the hawkish surprise was the 5-3 vote, far closer than the 7-1 expected, as two more MPC members , Saunders and McCafferty joined Forbes in calling for a rate hike on the back of rising inflation concerns. 

  • BANK OF ENGLAND KEEPS KEY INTEREST RATE AT 0.25%; VOTE 5-3
  • SAUNDERS, MCCAFFERTY JOIN FORBES IN VOTE FOR BOE RATE HIKE

View image on Twitter

Bank of England

@bankofengland

MPC holds at 0.25%, maintains government bond purchases at £435bn and corporate bond purchases at £10bn.

Amid market chatter that Forbes would no longer favor a rate hike, the fact that three policy makers voted for a hike sees algo names jumping on the headline, BBg reported.

As the BOE stated, “Our Monetary Policy Committee has voted 5-3 to keep Bank Rate at 0.25%. The committee voted unanimously to continue with the programmes of corporate bond purchases and UK government bond purchases.” The result on the currency was immediate, sending cable surging on the news of the growing split within the MPC.

Separately, on QE the Committee voted unanimously to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £10 billion. The Committee also voted unanimously to maintain the stock of UK government bond purchases, financed by the issuance of central bank reserves, at £435 billion.

The market was drawn to the following segments discussing inflation in the BOE statement:

The projections that the Committee published in May showed that the economy was expected to operate with a small degree of spare capacity for most of the three-year forecast period, justifying the tolerance of some degree of above-target inflation.  The continued growth of employment could suggest that spare capacity is being eroded, lessening the trade-off that the MPC is required to balance and, all else equal, reducing the MPC’s tolerance of above-target inflation

and:

CPI inflation has been pushed above the 2% target by the impact of last year’s sterling depreciation.  It reached 2.9% in May, above the MPC’s expectation.  Inflation could rise above 3% by the autumn, and is likely to remain above the target for an extended period as sterling’s depreciation continues to feed through into the prices of consumer goods and services.  The 2½% fall in the exchange rate since the May Inflation Report, if sustained, will add to that imported inflationary impetus.

Just like the Fed, the BOE expressed ongoing confidence in the economy, as manifest by growing employment and consumer confidence despite dropping GDP:

GDP growth declined markedly in the first quarter, in part reflecting weaker household spending.  It remains to be seen how large and persistent this slowdown in consumption will prove.  In recent months, there have been further signs of a slowing housing market and new car registrations have fallen sharply.  Consumer confidence has remained relatively resilient, however, and employment has continued to rise.

At the same time, the BOE again cautioned that “monetary policy cannot prevent either the necessary real adjustment as the United Kingdom moves towards its new international trading arrangements or the weaker real income growth that is likely to accompany that adjustment over the next few years.”

The BoE’s conclusion:

In light of these considerations, five members thought that the current policy stance remained appropriate to balance the demands of the MPC’s remit.  Three members considered it appropriate to increase Bank Rate by 25 basis points.  All members agreed that any increases in Bank Rate would be expected to be at a gradual pace and to a limited extent.  The Committee will continue to monitor closely the incoming evidence, and stands ready to respond to changes in the economic outlook as they unfold to ensure a sustainable return of inflation to the 2% target.

As a result of the pound spike, the FTSE 100 fell 1.1% at 12:07pm in London, extending losses as currency gains weighed on its exporters. U.K. 10-year bond yield rises 8bps to 1.01% after 3 BOE members vote in favor of a rate hike; market expectations were for a 7-1 split.

end

 

the EU has reached a deal with Greece. However  no debt reductions until 2018. In essence the 8 billion euros received will go right back to pay the ESFS boys and other loans from  the EU.  Greece gets nothing.

(courtesy zero hedge)

EU Reach Bailout Deal With Greece Once Again

As expected by most (if not all, judging by the 8 year lows in Greek bond yields), European finance ministers have reportedly reached an agreement to bail out Greece once again (provide them with yet another EUR8.5 billion loan), and agreed to discuss the possibility of debt extensions.

Blomberg reports that Euro area finance ministers reached an agreement paving the way for the disbursement of the next tranche of emergency loans, setting out terms of potential debt relief measures, two people familiar with the matter say.

Euro-area finance ministers approved a payout of 8.5 billion euros for Greece, according Luxembourg Finance Minister Pierre Gramegna.

Euro-area finance ministers are mulling a possible extension of the maturities on some Greek loans by 0 to 15 years, according to a draft statement seen by Bloomberg, even though it was not immediately clear what a 0 year maturity extension represents. The preliminary draft includes a proposal to defer the interest and amortization on Greece’s EFSF loans by the same duration

And yes, holdout IMF which threatened for two years it would not participate in a Greek deal absent a debt reduction is now in: as Christine Lagarde said: “I’d like to announce my intention to propose to the IMF’s Board the approval in principle of a new IMF Stand-By Arrangement for Greece.”

View image on Twitter

Manos Giakoumis @ManosGiakoumis

Managing Director Christine Lagarde to propose approval in principle of new Stand-By Arrangement for .

The only potential risk factor: Greece commits to keeping a primary surplus of 3.5% until 2022 and that Greek Gross financing needs should be below 15% of GDP in the medium term, and below 20% afterwards to ensure debt stays on a downward path.

Finally:

  • DEBT RELIEF GREEK FOR GREECE WOULD BE GRANTED AFTER BAILOUT ENDS WITH SUCCESS IN 2018 – STATEMENT

and

  • DIJSSELBLOEM: GREEK DEBT MEASURES TO BE IMPLEMENTED AFTER 2018

In other words, if Greece does not reneg for the next 18 months, it may get another debt maturity extension, resetting the clock all over again.

Priced In?  Was the deal ever in doubt.

This deal puts an end any uncertainty about the possibility of Greece defaulting on over EUR7 billion in debt repayments due next month.

So the question is – who exactly are the EU finmins bailing out?

And another question: will Greek debt finally be eligible for ECB QE? With Mario Draghi running out of German debt to buy, this could provide with the central banks with a loophole to extend QE by at least a few months.

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Russia/Germany/Austria vs USA

Germany and Austria are getting quite angry with the latest sanctions against Russia for their “incursion into USA politics as well as “increased involvement into the Ukraine”.  The USA is set to pose fines for any European country that participates in the NordStream 2 pipeline.

the real reason for the sanctions:  the USA wants the LNG pipeline from Qatar through Saudi Arabia, through Syria, through Turkey and onto Greece and the rest of Europe bypassing Russia altogether

(courtesy zerohedge)

Germany, Austria Slam US Sanctions Against Russia, Warn Of Collapse In Relations

Less than a day after the Senate overwhelmingly voted to impose new sanctions against the Kremlin, on Thursday Germany and Austria – two of Russia’s biggest energy clients in Europe – slammed the latest U.S. sanctions against Moscow, saying they could affect European businesses involved in piping in Russian natural gas.

Shortly after the Senate voted Wednesday to slap new sanctions on key sectors of Russia’s economy over “interference in the 2016 U.S. elections” and aggression in Syria and Ukraine, in a joint statement Austria’s Chancellor Christian Kern and Germany’s Foreign Minister Sigmar Gabriel said it appeared that the Senate bill was aimed at securing US energy jobs and pushing out Russian gas deliveries to Europe.

Gabriel and Kern also accused the U.S. of having ulterior motives in seeking to enforce the energy blockade, which they said is trying to help American natural gas suppliers at the expense of their Russian rivals. And they warned the threat of fining European companies participating in the Nord Stream 2 project “introduces a completely new, very negative dimension into European-American relations.”

In their forceful appeal, the two officials urged the United States to back off from linking the situation in Ukraine to the question of who can sell gas to Europe. “Europe’s energy supply is a matter for Europe, and not for the United States of America,” Kern and Gabriel said. The reason why Europe is angry Some Eastern European countries, including Poland and Ukraine, fear the loss of transit revenue if Russian gas supplies don’t pass through their territory anymore once the new pipeline is built.

While the diplomats said that it was important for Europe and the US to form a united front on the issue of Ukraine, “we can’t accept the threat of illegal and extraterritorial sanctions against European companies,” the two officials warned citing a section of the bill that calls for the United States to continue to oppose the Nord Stream 2 pipeline that would pump Russian gas to Germany beneath the Baltic Sea. According to AP, half of the cost of the new pipeline is being paid for by Russian gas giant Gazprom, while the other half is being shouldered by a group including Anglo-Dutch group Royal Dutch Shell, French provider Engie, OMV of Austria and Germany’s Uniper and Wintershall.

Their concern was echoed by Russia’s energy giant Gazprom, whose Deputy CEO Alexander Medvedev said that Senate’s plan for extended sanctions to cover Nord Stream 2 gas pipeline project is a way to secure US LNG in Europe. He also said that the project is proceeding in line with plan and that it has already received more than €1BN from Nord Stream 2 partners, chief among which Germany and Austria.

In light of recent media frenzy in the US, we are skeptical the Senate will undo its decision, lest it too be accused of being infiltrated by KGB spies and colluding with Putin.

Meanwhile, this just hit:

  • SENATE HAS VOTES TO PASS BILL ADDING SANCTIONS ON RUSSIA, IRAN

end

6 .GLOBAL ISSUES

CANADA

WOW!  This will hurt” existing home sales crash in May by 6.2%

(courtesy zero hedge)

Despite Bank Of Canada Hubris, Existing Home Sales Crash In May

The Bank of Canada is stuck between the rock of a housing bubble (textbook-based trickle-down confidence-inspiration) and a hard place of a housing bubble (total lack of affordability) as it proclaimed this week that it may withdraw stimulus because, paraphrasing, everything was awesome. Well, today’s existing home sales collapse may change that tune quickly…

Bloomberg reports that in a speech she’s delivering in Winnipeg, Manitoba, Senior Deputy Governor Carolyn Wilkins highlighted how the nation’s recovery is broadening across regions and sectors, giving policy makers “reason to be encouraged.”

“As growth continues and, ideally, broadens further, Governing Council will be assessing whether all of the considerable monetary policy stimulus presently in place is still required,” Wilkins said in the text of a speech she’s giving Monday.

 

“At present, there is significant monetary policy stimulus in the system.”

 

“The adjustment to lower oil prices is now largely behind us, and we are looking for signs that the sources of growth are broadening across sectors and regions,” Wilkins said. “The signs are encouraging.”

Well, wih the worst print on record, Canada existing home sales crashed 6.2% MoM in May…

 

“The signs are less encouraging now”

Below we again put Canada’s housing market, and bubble, in perspective with some of our favorite charts, first showing total Canadian household debt compared to the US. Most of this is in the form of mortgages.

Next, despite Canada’s low rates, the debt service ratio of an average Canadian household is nearly 40% higher than when compared to the US.

And finally, the punchline: indexed home prices in Canada compared to the US. This needs to commentary.

This won’t end well… and as this month’s home sales data shows, the pain is just beginning.

end

 

This ought to give us a huge clue as to how global growth is performing:  Nike is cutting 2% of its global workforce

(courtesy zero hedge)

Nike Cutting 2% Of Global Workforce

In a preview of more pain to come for US, and global, workers, moments ago Nike announced that it will soon be parting ways with approximately 2% of its 70,700 global workforce, or roughly 1,500 employees.

Nike introduced the Consumer Direct Offense, a new company alignment, resulting in leadership and organizational changes as part of which the company would see an overall reduction in about 2% of the company’s global workforce to “streamline and speed up strategic execution.”

In addition to the mass layoff, Nike is realigning its regional units as it focuses on driving growth in its most important markets and getting new products to market more quickly. Among the details:

  • Cutting product styles by 25%, but will offer deeper selection of key franchises
  • Aiming to cut creation cycle in half to speed new products to market
  • Consumer Direct Offense program under NKE Brand President Trevor Edwards to focus on improving growth in New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul, Milan
  • Sees targeted cities accounting for 80% of projected growth through 2020
  • Realigning geographic segments to 4 regions from 6; will report results under North America, EMEA, Greater China and Asia Pacific and Latin America starting in fiscal 2018

Discussing the corporate overhaul, Trevor Edwards, President of the NIKE Brand said that “today we serve our athletes in a changing world: one that’s faster and more personal. This new structure aligns all of our teams toward our ultimate goal — to deliver innovation, at speed, through more direct connections.”  It will also deliver what is likely the start of many layoffs.

Full press release below.

NIKE, Inc. today introduced the Consumer Direct Offense, a new company alignment that allows Nike to better serve the consumer personally, at scale. Leveraging the power of digital, Nike will drive growth — by accelerating innovation and product creation, moving even closer to the consumer through Key Cities, and deepening one-to-one connections.

“The future of sport will be decided by the company that obsesses the needs of the evolving consumer,” said Mark Parker, NIKE, Inc. Chairman, President, and CEO. “Through the Consumer Direct Offense, we’re getting even more aggressive in the digital marketplace, targeting key markets and delivering product faster than ever.”

Consumer-focused Growth

Trevor Edwards, President of the NIKE Brand, will drive the Consumer Direct Offense through integrated category, geography, marketplace, product, merchandising, digital, and direct-to-consumer teams.

In the new alignment, the company will drive growth by deeply serving consumers in 12 key cities, across 10 key countries: New York, London, Shanghai, Beijing, Los Angeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul, and Milan. These key cities and countries are expected to represent over 80 percent of Nike’s projected growth through 2020.

Nike is moving closer to the consumer—creating a local business, on a global scale. To improve efficiency, all key cities and countries are supported by a simplified geography structure, changing from six to four—comprised of North America; Europe, Middle East and Africa (EMEA); Greater China; and Asia Pacific and Latin America (APLA). The leaders of the newly-formed geographies are: Tom Peddie VP/GM of North America, Bert Hoyt VP/GM of EMEA, Angela Dong VP/GM of Greater China, and Ann Hebert VP/GM of APLA.

As such, financial results for the NIKE Brand will be reported based on these four operating segments beginning in fiscal 2018.

The geography leaders will report to Elliott Hill, President of Geographies and Integrated Marketplace.

Nike’s Triple Double

The Consumer Direct Offense is fueled by Nike’s Triple Double strategy: 2X Innovation, 2X Speed and 2X Direct connections with consumers.

To double innovation, Nike will accelerate the impact and cadence of new innovation platforms. As an example, over the past few months, Nike launched a cushioning revolution, featuring three new groundbreaking platforms: ZoomX, Air VaporMax and Nike React. And, to give consumers more choices of the products they love, Nike is editing to amplify — reducing its styles by 25 percent, and offering a deeper selection of key franchises.

To double speed, Nike is on a path to cut product creation cycle times in half. That starts with the Express Lane, which quickly creates, updates and fulfills products in response to consumer demand. Already operating in North America and Western Europe, a new Express Lane will be activated this summer in China, serving Shanghai, Seoul and Tokyo—some of the world’s most promising markets for sport.

To supercharge this faster pipeline, Michael Spillane is assuming the new role of President of Categories and Product—leading an end-to-end design-to-delivery organization, including Categories, Design, Product and Merchandising. This new integrated organization will place greater resources in the categories with the highest potential to fuel growth: Running, Basketball, Nike Sportswear, Men’s and Women’s Training, Global Football and Young Athletes. To build on the growth of the Nike Women’s business, a new dedicated Women’s team will complement each top-tier category.

To double direct connections with consumers and shape the future of retail, Nike is creating the new Nike Direct organization, led by Heidi O’Neill, President of Nike Direct, and Adam Sussman, Chief Digital Officer. This organization will unite Nike.com, Direct-to-Consumer retail, and Nike+ digital products to enhance and expand Nike’s membership experience on an increasingly global scale. Nike will also extend innovations to its strategic wholesale partners.

Leading with mobile, this team will unite physical and digital retail to serve consumers with the best of Nike. Two recent examples of innovative consumer connections are SNKR Stash, which unlocks access to exclusive Nike and Jordan product using mobile geo-locations; and Shock Drop, surprise alerts for coveted sneakers that allow consumers to buy instantly through the app or at their nearest Nike or wholesale store. Over the next several months, Nike is also launching its Nike+ and SNKRS apps globally to energize the sneaker experience in new markets.

Spillane, Hill, O’Neill and Sussman will all report to Edwards.

Nike’s leadership and organizational changes will streamline and speed up strategic execution. The changes are also expected to result in an overall reduction of approximately 2 percent of the company’s global workforce.

“Today we serve our athletes in a changing world: one that’s faster and more personal,” said Edwards. “This new structure aligns all of our teams toward our ultimate goal — to deliver innovation, at speed, through more direct connections.”

7. OIL ISSUES 8. EMERGING MARKET

.

end

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings THURSDAY morning 7:00 am

Euro/USA   1.1166 DOWN .0044/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA RAISING INTEREST RATES AGAIN/EUROPE BOURSES ALL IN THE RED 

USA/JAPAN YEN 109.77 UP 0.335(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2766 UP .0021 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT

USA/CAN 1.3277 UP .0035 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS THURSDAY morning in Europe, the Euro FELL by 44 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1166; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  UP 1.81 POINTS OR 0.06%     / Hang Sang  CLOSED DOWN 310.56 POINTS OR 1.20% /AUSTRALIA  CLOSED DOWN 1.12% / EUROPEAN BOURSES OPENED ALL IN THE RED 

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this THURSDAY morning CLOSED DOWN 51.70 POINTS OR 0.26%

Trading from Europe and Asia:
1. Europe stocks  OPENED ALL IN THE RED

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 310.56 POINTS OR 1.20%  / SHANGHAI CLOSED UP 1.81 POINTS OR 0.06%   /Australia BOURSE CLOSED DOWN 1.12% /Nikkei (Japan)CLOSED DOWN 51.20 POINTS OR 0.26%    / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1258.35

silver:$16.86

Early THURSDAY morning USA 10 year bond yield: 2.145% !!! UP 2 IN POINTS from WEDNESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.785, UP 2  IN BASIS POINTS  from WEDNESDAY night.

USA dollar index early THURSDAY morning: 97.27 UP 33  CENT(S) from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

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And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 2.860%  UP 1 in basis point(s) yield from WEDNESDAY 

JAPANESE BOND YIELD: +.053%  DOWN 2  in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.416%  UP 3 IN basis point yield from WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.967 UP 3   POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 46 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.282% UP 6 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR THURSDAY

Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM 

Euro/USA 1.1144 DOWN .0063 (Euro DOWN 63 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110.75 UP  1.309 (Yen DOWN 131 basis points/ 

Great Britain/USA 1.2754 UP 2 ( POUND UP 2 basis points) 

USA/Canada 1.3288 UP .0045 (Canadian dollar DOWN 45 basis points AS OIL FELL TO $44.50

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This afternoon, the Euro was DOWN by 68 basis points to trade at 1.1144

The Yen FELL to 110.75 for a LOSS of 131  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 2  basis points, trading at 1.2754/ 

The Canadian dollar FELL by 45 basis points to 1.3288,  WITH WTI OIL FALLING TO :  $44.50

The USA/Yuan closed at 6.8078/ the 10 yr Japanese bond yield closed at +.053% DOWN 2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 5 IN basis points from WEDNESDAY at 2.160% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.783  UP 1  in basis points on the day /

Your closing USA dollar index, 97.50 UP 56 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for THURSDAY: 1:00 PM EST

London:  CLOSED DOWN 55.04 POINTS OR 0.74%
German Dax :CLOSED DOWN 114.24 POINTS OR 0.89%
Paris Cac  CLOSED DOWN 26.41 POINTS OR 0.50% 
Spain IBEX CLOSED  DOWN  76.20 POINTS OR 0.71%

Italian MIB: CLOSED  DOWN 113.04 POINTS/OR 0.54%

The Dow closed DOWN 14.66 OR 0.07%

NASDAQ WAS closed DOWN 29.39 POINTS OR 0.47%  4.00 PM EST
WTI Oil price;  44.50 at 1:00 pm; 

Brent Oil: 46.92 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.87 DOWN 47/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES T0  +0.282%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$44.38

BRENT: $46.84

USA 10 YR BOND YIELD: 2.162%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.788%

EURO/USA DOLLAR CROSS:  1.1148 DOWN .0064

USA/JAPANESE YEN:110.92  UP 1.470

USA DOLLAR INDEX: 97.47  UP 53  cent(s) ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2759 : UP 6 POINTS FROM last NIGHT  

Canadian dollar: 1.3262 DOWN 21  BASIS pts 

German 10 yr bond yield at 5 pm: +0.282%

END

And now your more important USA stories which will influence the price of gold/silver TRADING IN GRAPH FORM FOR THE DAY DeFANG-ed – Tech Wreck Continues As Dollar Bounces, Yield Curve Collapses

We suspect this NSFW clip reflects the sounds coming from more than a few investors today…

 

Some more dismal data this morning – yeah seriously more of it – sent the US Macro Surprise Index to its weakest level in over two years…

 

Notably, the US Macro Surprise Index has dropped for 13 straight weeks (since The Fed hiked in March) – this is the biggest 3-month drop in US economic data since Lehman and 2011’s Summer USA Downgrade

 

And while ‘weak’ growth expectations has traditionally prompted panic bids in ‘growth’ stocks

 

With the highest growth FANG stocks getting slammed to 8-week lows…before dip-butyers jumped back in again…

 

While everyone was excited about the bounce in FANG stocks, we note that they closed below yesterday’s lows…

 

NFLX remains the biggest loser of the FANGs…

 

Trannies managed to scramble into the green but Small Caps and Nasdaq were the worst, despite the drift up after the European close and meltup into the close….

 

From Thursday’s close, S&P is unch, Small Caps are red, and Nasdaq is ugly (down 4 of the last 5 days)…

 

Financials dropped for the first time in 7 days…

 

VIX topped 12 briefly but that didn’t last long…Notably VIX was slammed and stocks bid right as Europe closed…

 

Banks extended their gains today even as the yield curve collapsed…

 

Treasury yields rose modestly on the day (with the curve bear flattening once again)…

 

The yield curve collapsed even further…

 

While The Fed continues to ignore the collapse of America’s economy, the dollar is not…

 

Though ironically, today saw the dollar index extend its gains off the rebound post-Fed lows yesterday… pushing up to unchanged on the week…

 

JPY was the biggest loser today as the dollar ramped back to unch for the week…

 

WTI and RBOB both got hammered again…

 

And the Dollar strength sent gold and silver lower…

 

Finally, Bitcoin took a pretty big spill today…but bounced back in the afternoon…

And selling presure returned…

 

END

Last night:  Scalise is still in critical condition and will require more surgeries

 

(courtesy zero hedge)

Scalise Still “Critical”, Will Require More Surgeries; Trump Urges “Pray For Steve”

While it appears some have already moved on from this morning’s devastating actions in Virginia…

Some are still concerned and so MedStar Washington Hospital Center released a statement on the condition of the Majority Whip (via Rep. Scalise’s Twitter account)

“Congressman Steve Scalise sustained a single rifle shot to the left hip. The bullet travelled across his pelvis, fracturing bones, injuring internal organs, and causing severe bleeding.

 

He was transported in shock to MedStar Washington Hospital Center, a Level I Trauma Center.

 

He underwent immediate surgery, and an additional procedure to stop bleeding. He has received multiple units of blood transfusion.  

 

His condition is critical, and he will require additional operations. We will provide periodic updates.”

President Trump has just got back from visiting Majority Whip Scalise and tweeted his thoughts…

Just left hospital. Rep. Steve Scalise, one of the truly great people, is in very tough shape – but he is a real fighter. Pray for Steve!

— Donald J. Trump (@realDonaldTrump) June 15, 2017

 

end

 

The witch hunt is on:  Mueller is investigating Trump for possible obstruction of Justice according to the Washington Post.What absolute nonsense!

(courtesy zerohedge)

Mueller Is Investigating Trump For Possible Obstruction Of Justice: Wapo

If Trump wasn’t under investigation before for colluding with Russian spies to steal the election from Hillary Clinton, it seems that he may be now for claims that he intentionally obstructed justice by firing FBI Director James Comey just over a month ago…at least according to more anonymous sources from the Washington Post which have proven themselves to be slightly less than completely ‘accurate’ several times in the recent past.

According to Wapo, this new revelation marks a “major turning point” in the investigation of the Trump administration and will get underway with interviews of numerous “senior intelligence officials” as early as this week.

The special counsel overseeing the investigation into Russia’s role in the 2016 election is interviewing senior intelligence officials as part of a widening probe that now includes an examination of whether President Trump attempted to obstruct justice, officials said.

 

The move by Special Counsel Robert S. Mueller III to investigate Trump’s own conduct marks a major turning point in the nearly year-old FBI investigation, which until recently focused on Russian meddling during the presidential campaign and on whether there was any coordination between the Trump campaign and the Kremlin. Investigators have also been looking for any evidence of possible financial crimes among Trump associates, officials said.

 

Five people briefed on the requests, who spoke on condition of anonymity because they were not authorized to discuss the matter publicly, said Daniel Coats, the current director of national intelligence, Adm. Mike Rogers, head of the National Security Agency, and Rogers’ recently departed deputy, Richard Ledgett, agreed to be interviewed by Mueller’s investigators as early as this week. The investigation has been cloaked in secrecy and it’s unclear how many others have been questioned by the FBI.

And, like many of these stories from the past 6 months, the breathless headline from Wapo is followed, some 10 paragraphs into the story, with a slightly more realistic ‘hedge’ which suggests that the whole story may just another fishing expedition into prompting yet another infuriated response by Trump, which would assure he digs himself into an even deeper hole.  Here is today’s ‘hedge’:

The interviews suggest Mueller sees the attempted obstruction of justice question as more than just a “he said, he said” dispute between the president and the fired FBI director, an official said.

Of course, as we pointed out last week, Senator Jim Risch did a masterful job of dismantled any ‘hopes’ of an obstruction of justice case when he essentially got Comey himself to admit there was no ‘there’ there:

Risch: “Boy you nailed this down on page 5 paragraph 3, you put this in quotes, words matter, you wrote down the words so we could all have the words in front of us now.  There are 28 words there that are in quotes and it says, ‘I hope’, this is the President speaking, ‘I hope you can see your way claer to letting this go, to letting Flynn go…I hope you can let this go.'”

 

“Now those are his exact words, is that correct”

 

Comey:  “Correct.”

 

Risch:  “And you wrote them here and you put them in quotes?”

 

Comey:  “Correct.”

 

Risch:  “Thank you for that.  He did not direct you to let it go.”

 

Comey:  “Not in his words, no.”

 

Risch:“He did not order you to let it go.”

 

Comey:“Again, those words are not an order.”

 

Risch:  “He said ‘I hope’.  Now, like me you probably did 100’s of cases, maybe 1,000s of cases charging people with criminal offenses.  And, of course, you have knowlege of the 1,000s of cases out there where people have been charged.  Do you know of any case where a person has been charged for obstruction of justice, for that matter of any other criminal offense,  where they said or thought they hoped for an outcome?”

 

Comey:  “I don’t know well enough to answer.  And the reason I keep saying ‘his words’ is I took it as a direction…”

 

Risch:  “You may have taken it as a direction but that is not what he said.  He said, ‘I hope.’  You don’t know of anyone who has ever been charged for hoping something, is that a fair statement?”

 

Comey:“I don’t as I sit here.”

 

So, to summarize, for anyone who has managed to ignore all the mass hysteria of the past 6 months, the intelligence community basically forced Trump’s hand by slowly leaking out damaging innuendos and accusations over the past several months, all while refusing to confirm that he, himself, was never actually under investigation.  In the end, those damaging leaks, combined with Comey’s refusal to confirm publicly that Trump was not under investigation, resulted in Comey’s sudden dismissal on May 9th.  And now, even though he was never a target of any investigation, leaks from the intelligence community have forced a situation where Trump may be under investigation by the intelligence community, a rather confounding, if perhaps well-orchestrated, outcome.

 end Trump’s response:  they had zero proof on Russian collusion so now they go after obstruction of Justice on the phony Russian collusion. (courtesy zero hedge) Trump: “Zero Proof” Of Russian Collusion “So Now They Go For Obstruction Of Justice”

Yesterday, when we summarized the latest WaPo article according to which Special Counsel Mueller is now probing Trump for obstruction of justice, we said “the intelligence community basically forced Trump’s hand by slowly leaking out damaging innuendos and accusations over the past several months, while refusing to confirm that he, himself, was never actually under investigation.  In the end, those damaging leaks, combined with Comey’s refusal to confirm publicly that Trump was not under investigation, resulted in Comey’s sudden dismissal on May 9th.  And now, even though he was never a target of any investigation, leaks from the intelligence community have forced a situation where Trump may be under investigation by the intelligence community, a rather confounding, if perhaps well-orchestrated, outcome.”

This morning, Trump essentially repeated that assessment, when early on Thursday he said that “They made up a phony collusion with the Russians story, found zero proof, so now they go for obstruction of justice on the phony story. Nice”

Donald J. Trump @realDonaldTrump

They made up a phony collusion with the Russians story, found zero proof, so now they go for obstruction of justice on the phony story. Nice

6:55 AM – 15 Jun 2017

 

Trump’s Thursday morning tweet his first about the investigation since the shooting Wednesday at a congressional baseball practice in Alexandria. As a reminder, Trump had repeatedly claimed, and Comey affirmed during his testimony, that Comey assured him he was not personally under FBI investigation. But investigators began probing Trump for obstruction of justice soon after Comey’s termination, perhaps as intended. After Comey’s testimony last week, further questions were raised about whether Trump tried to obstruct justice.

Elsewhere, addressing the Russian population, Vladimir Putin echoed Trump’s sentiment, saying so far there has been “zero proof” presented confirming any collusion or interference by Russia in the US election.

Meanwhile, in a follow up tweet moments later, Trump also tweeted “You are witnessing the single greatest WITCH HUNT in American political history – led by some very bad and conflicted people!  #MAGA

Donald J. Trump @realDonaldTrump

You are witnessing the single greatest WITCH HUNT in American political history – led by some very bad and conflicted people!

end According to Bloomberg’s Cudmore, the Fed has made a big mistake and every tightening move is a signal to buy long bonds due to their mistake. They themselves are pushing the uSA towards recession (courtesy zero hedge) Cudmore: Yellen Just Made A Big Mistake

One of the lingering questions to emerge from yesterday’s FOMC meeting, after Yellen’s “first dovish, then hawkish” statement rocked the dollar and markets, is whether the Fed chair has some more accurate way of forecasting inflation than the rest of market to justify her optimistic outlook, and to explain why the divergence between the Fed’s dot plot and the market’s own FF forecasts is nearly 100%. And, if not, is the Fed about to make another major policy mistake by forecasting a far stronger economy than is possible, culminating with a recession.

According to Bloomberg’s Mark Cudmore, the answer is that while Yellen is desperate to infuse confidence in the market, the Fed, which “hasn’t been correct for seven years”, remains as clueless as ever, which is why the Fed’s hawkishness is actually a signal to buy long-end bonds, which will add to further curve tightening and ultimately precipitate the next recession.

Put otherwise, “if Yellen had acknowledged that the policy frameworks she and her colleagues have been using since the crisis have all been incorrect, then we might believe she has a chance of now applying a more appropriate framework and has a credible plan to sustainably hit the inflation target. Instead, traders can’t help but feel that no lessons are being learned and will have to raise the probability of a major policy mistake in market pricing. This means that the yield curve will need to flatten further through long-end yields dropping.”

In simple words: the Fed has just brought the next recession that much closer, which shouldn’t come as a surprise.  As we showed before, every Fed tightening akways ends with a recession. The only question is when.

From Marc Cudmore’s latest Macro View.

Fed’s Hawkishness Is Negative for Long-End Yields

 

It may seem counter-intuitive but the Fed’s optimistic perspective on the U.S. economy makes it more likely that 10-year Treasury yields have more downside.  The problem for Janet Yellen is that the data is there for us all to see: What few inflation pressures did exist are now receding rapidly. By failing to comprehensively address the fact that the committee’s projections are constantly over-optimistic, they further undermine their own credibility.

 

The Fed hasn’t been correct for seven years. The evidence would suggest their models are broken. Yellen still cites the Phillips curve even though some of her own committee have questioned its validity and it has shown no sign of working as anticipated in recent years.

 

Temporary factors are cited as the reason for low inflation – for example a decline in mobile phone bills – without acknowledging that the technological innovation frequently behind such factors isn’t a temporary phenomenon.

 

Technology is also helping drive down external inflationary pressures coming through from commodity prices. And the committee’s models don’t seem to adequately account for demographic disinflationary impulses either.

 

If Yellen had acknowledged that the policy frameworks she and her colleagues have been using since the crisis have all been incorrect, then we might believe she has a chance of now applying a more appropriate framework and has a credible plan to sustainably hit the inflation target.

 

Instead, traders can’t help but feel that no lessons are being learned and will have to raise the probability of a major policy mistake in market pricing. This means that the yield curve will need to flatten further through long-end yields dropping.

end

 

Another sign that the economy is rolling over and that the inflation that the Fed needs is non existent

(courtesy zero hedge)

US Import & Export Prices Tumble In May As China Credit Impulse Collapses

For the first time since Augist 2016, both import prices (-0.3% MoM) and export prices (-0.7% MoM) dropped in May.

As China’s credit impulse disappears (and turns negative) so YoY gains in import and export prices are also rolling over notably.

And judging by historical relationships, it’s going to get worse before it gets better… no matter what China does now (it’s already baked into the cake for the next 9 months).

end

Soft data NY Fed manufacturing and Philly Fed soar

DO NOT PAY ANY ATTENTION TO THIS GARBAGE REPORTING

(COURTESY ZERO HEDGE)

New York Fed Soars To Highest Since Sept 2014, Philly Fed Also Beats

In a much needed confirmation that Janet Yellen did not make a policy mistake by hiking rates yesterday, moments ago both the Empire State and Philly Feds smashed expectations, with the first printing at the highest level since September 2014 of 19.8, above the expected 4, and well above May’s -1 contraction print, while the Philly Fed posted at 27.6, also beating consensus estimates of 24, if a drop from last month’s 38.8.

The New York Fed breakdown:

  • Prices paid fell to 20 vs 20.9
  • New orders rose to 18.1 vs -4.4
  • Number of employees fell to 7.7 vs 11.9
  • Work hours rose to 8.5 vs 7.5
  • Inventory rose to 7.7 vs -0.7

Meanwhile over in Philadelphia:

  • June prices paid fell to 23.6 vs 24.2
  • New orders rose to 25.9 vs 25.4
  • Employment fell to 16.1 vs 17.3
  • Shipments fell to 28.5 vs 39.1
  • Delivery time rose to 13.9 vs 6.4
  • Inventories rose to 5.8 vs 1.4
  • Prices received rose to 20.6 vs 15.3
  • Unfilled orders rose to 14.0 vs 9.0
  • Average workweek fell to 20.5 vs 21.7
  • Six-month outlook fell to 31.3 vs 34.8
  • Six-month outlook for capex fell to 28.6 vs 32.6

The sentiment at both regional Feds was quite optimistic. First the NY Fed:

Business activity rebounded strongly in New York State, according to firms responding to the June 2017 Empire State Manufacturing Survey. The headline general business conditions index shot up twenty-one points to 19.8, its highest level in more than two years. The new orders index posted a similar increase, rising twenty-three points to 18.1, and the shipments index advanced to 22.3. The inventories index climbed to 7.7, indicating a rise in inventory levels, and labor market indicators pointed to a modest increase in employment and hours worked. The pace of input price increases was unchanged, while selling price increases picked up somewhat. Looking ahead, firms remained optimistic about the six-month outlook.

The only negative factor was a drop in employment: The index for number of employees edged down four points to 7.7, and the average workweek index was little changed at 8.5. 

On the inflation front, the prices paid index held steady at 20.0, and the prices received index
rose six points to 10.8, pointing to a pickup in selling price increases.

Looking forward, firms remained optimistic: “Indexes assessing the six-month outlook suggested that firms continued to expect conditions to improve. The index for future business conditions was little changed at 41.7, and the index for future new orders rose nine points to 42.2. Inventories were expected to be slightly lower in the months ahead, and employment was expected to increase modestly. The capital expenditures index rose to 20.8, and the technology spending index was 11.5.”

Meanwhile in Philadelphia, while modestly subdued, sentiment was also strong:

The index for current manufacturing activity in the region increased from a reading of 22.0 in April to 38.8 this month. The index has been positive for 10 consecutive months. This month, the index recovered some of the declines of the previous two months, but it still remains slightly below its high reading of 43.3 in February (see Chart 1). Fifty-one percent of the firms indicated increases in activity in May, while 13 percent reported decreases. The current new orders and shipments indexes remained at high readings. The shipments index increased 16 points, while the new orders index declined 2 points. Both the delivery times and unfilled orders indexes were positive for the seventh consecutive month, suggesting longer delivery times and increases in unfilled orders

Unlike New York, Philadelphia saw price pressures moderate: “The survey’s diffusion indexes for prices remained positive but decreased from their readings in April. On the cost side, 31 percent of the firms reported increases in the prices paid for inputs, compared with 36 percent in April, and the prices paid index decreased 10 points to 24.2. With respect to prices received for firms’ own manufactured goods, 21 percent of the firms reported higher prices, and 6 percent reported lower prices. The prices received index decreased 1 point.”

And while Philly firms expected continued growth, optimism fell:

Most of the survey’s six-month indicators decreased further from the higher readings seen at the beginning of the year. The diffusion index for future general activity decreased from 45.4 in April to 34.8 this month, its second consecutive decline. Forty-five percent of the manufacturers expect increases in activity over the next six months, while 10 percent expect declines. The indexes for future new orders and shipments also fell, decreasing 9 points and 6 points, respectively. The future employment diffusion index, at 29.2, fell 8 points. Thirty-seven percent of the firms expect to increase employment  over the next six months, down from 46 percent last month.

Overall, however, sentiment remained strong with responses suggesting continued growth for the region’s manufacturing sector. All the broad indicators either improved or remained at high positive readings, suggesting continued expansion.

In other words, if Yellen was looking for some validation that the economy is recovering, at least the soft data is happy to provide it. Whether it spills over into inflation prints remains to be seen.

 

 

end

 

Janet will not like this:  hard data USA manufacturing output tumbles .4% month/month in May

(courtesy zero hedge)

Trump-Train Stalls As US Manufacturing Output Tumbles In May

After an exuberant spike in April, US Manufacturing output dropped 0.4% MoM in May (the biggest drop since Feb 2015), missing expectations of a 0.1% rise by three standard deviations.

Manufacturing Output has been swinging violently in the last 3 months…

Headline Industrial Production also disappointed (unch vs +0.2% exp), the weakest print since January.

After three yuuge months for Industrial Production gains, the Trump train appears to have stopped.

Finally there’s this…

The Dow Jones Industrial Average is up 30%, while US Industrial Production is down 2% from its peak in Nov 2014.

end

 

Illinois is essentially bust:

(courtesy Mish Shedlock/Mishtalk)

Unable To Pay Bills, Illinois Sends “Dear Contractor” Letter Telling Firms To Halt Road Work On July 1

Authored by Mike Shedlock via MishTalk.com,

The state of Illinois has not passed a budget for close to three years.

Arguably it’s just as well because Illinois budgets for decades have been nothing but a moth-eaten collection of lies, one time deficits repeated endlessly, and financial wizardry statements designed to disguise Illinois’ real problems: failure to rein in spending coupled with a very business unfriendly environment.

As Illinois’ bond rating careens towards junk, Illinois Unpaid Bills Jumped to $14.3 Billion. Today, the state told contractors to halt roadwork other than that required for safety.

Dear Contractor

I do not have a link, but here is the letter in image form.

This does not raise much alarm in Illinois has these kinds of letters went out last year as well. It’s simply business as usual in Illinois.

My IDOT contact, who wishes to be left unnamed, reports …

Hello Mish

 

Last year when they did this the extra work bill to the state cost millions of taxpayer dollars. At the last minute, the shutdown was averted but not until the shutdown measures were employed and thus extra cost was due to contractors and consultants.

 

Look out for the Road Builders Association to come out with an estimate of what it will cost this time around after the letter today.

 

Last year, the supplier for paper and toilet paper had not been paid and thus various offices were reportedly cut off of supply. IDOT employees were going to have to work from home due to the potential unsanitary conditions.

Five Illinois Universities Rated Junk

Yesterday, the Illinois Policy Institute reported MOODY’S DOWNGRADES 7 ILLINOIS UNIVERSITIES, 5 ARE JUNK.

Everybody wants to blame the downgrades on the state’s current budget impasse. The stalemate of nearly two years has led to cuts in state appropriations to Illinois universities. But the universities’ financial difficulties started before the state’s budget gridlock and are largely of their own making. Illinois colleges and universities have long overspent on bloated bureaucracies and expensive compensation and benefits, prioritizing administrators over students.

 

For years, university and college officials across the state have hiked tuition to pay for administrative hiring sprees, generous executive compensation and out-of-control pensions. Their spending priorities distorted university finances long before the budget impasse began.

 

The number of administrators in Illinois’ universities grew by nearly a third (31.1 percent) between 2004 and 2010. At the same time, faculty only increased 1.8 percent, and the number of students only grew 2.3 percent.

Illinois Tuition Fees

Retirement Costs Soars

Blame Who?

It is easy to blame Governor Rauner, but he is last on my list. Illinois has been in trouble for decades. The state’s only solution has been to tax, and tax, and tax.

That is precisely the same position as Chicago Mayor Rahn Emanuel.

The result is easy to predict.

Illinois’ Economic Growth is Worse than During the Great Depression

Illinois’ total state economic activity has increased by only 4 percent since 2007, which is lower than the U.S.’ 10 percent GDP growth during the worst decade of the Great Depression according to the Illinois Policy Institute.

Illinois Employment

Feed Me

Illinois Debt Backlog

It took $31.6 billion of new tax revenue to reduce the backlog of bills by $1.3 billion. But the complete picture is much worse as Illinois’ pension debt rose more than $25B from 2010 through 2015.

Failed State
  1. On June 4, 2017, Politico reported How Illinois became America’s failed state.
  2. The Heratige Foundation beat Politico to the idea by a mile with its September 28, 2015 analysis Illinois: The Anatomy of a Failed Liberal State.
  3. The Chicago Tribune is behind the times with its January 3, 2017 analysis, Illinois in danger of becoming a failed state.

Illinois is not in danger of becoming a failed state, it is a failed state. I have been talking about this for years.

Five Desperately Needed Reforms
  1. Municipal bankruptcy legislation
  2. Pension reform
  3. Right-to-Work legislation
  4. End of prevailing wage laws
  5. Workers’ compensation reform

Number one on my list of Illinois reforms is bankruptcy legislation. It is the only hope for numerous Illinois cities whose hands are also tied by union-sponsored prevailing wage laws.

Despite massive gains in the stock market since 2009, Illinois pension plans have gotten deeper and deeper into the hole.

Even a modest pullback in the stock market will sink numerous Illinois pension plans. I expect much worse than a modest pullback.

Tax hikes are not the answer. Reform is the answer, and bankruptcy reform is at the top of the list.

Required Pension Contributions to Double or Triple

Inquiring minds will also wish to consider Required Pension Contributions of California Cities Will Double in Five Years says Policy Institute: Quadruple is More Likely.

The same fate or worse faces Illinois.

Madigan Sponsored Problem 

The problem is on Speaker Madigan’s side. He insists on tax hikes first and reforms second.

Governor Rauner has held out and I support that policy. Once the governor agrees to tax hikes, no reforms will ever take place.

Illinois is Bankrupt

Illinois is essentially bankrupt. Unfortunately, there is no provision for states to declare bankruptcy.

States can default, however, and default is an easy prediction for Illinois’ public union pensions.

end

This is interesting:  Trump is preparing an executive order on drug pricing.

(courtesy zero hedge)

Trump Preparing Executive Order On Drug Prices; Spec Pharma Stocks Slide To One Month Lows

Specialty pharma stocks are dropping – again – on news that the Trump administration is preparing an executive order – again – targeting lower U.S. drug costs. Bloomberg reports that the order addressing the sensitive campaign issue could come within weeks and has been largely left out of Republican legislative efforts in Congress, until now.

As a result of the report, the Bloomberg Specialty-Generic Pharma index has dropped as much as 1.24%, its lowest in a month, with the drop led by the usual suspects: VRX -3%, MYL -2.7%, ENDP – 2.7%, MNK -1.2%.

Some more details from Bloomberg, which writes that top health and budget officials in the administration will meet Friday to discuss the issues, according to the people, who asked not to be identified because the session is private. Trump sought recommendations from the nation’s health agencies on reducing medication costs, Health and Human Services SecretaryTom Price told senators last week.

One policy being discussed for inclusion in the order is expressing support forvalue-based agreements, a drug industry-backed proposal in which pharmaceutical companies and health insurers develop arrangements to pay for products depending on how well they work, one of the people said. Price, Centers for Medicare and Medicaid Services Administrator Seema Verma, Food and Drug Administration Commissioner Scott Gottlieb and Treasury Secretary Steve Mnuchin are expected to attend the meeting Friday, which is being led by Office of Management and Budget Director Mick Mulvaney, according to the people.

 

The recommendations from the officials may be used to craft a first executive order on drug prices that could come out soon, according to the people, followed by a second, more extensive order later. While executive orders can’t change laws, Trump could use the efforts to direct agencies to explore regulatory changes and set direction.

The development is hardly new, with Trump having threatened on several occasions to force drugmakers to bid for government business as a way to reduce prices. He’s also talked about letting consumers import drugs from other countries with lower prices. Neither of those policies, which would likely require a change in law to be implemented in a meaningful way, are in drafts of the orders.

 END The new budget projections is just sheer fantasy (Craig Wilson/David Stockman) Stockman Slams Trump Administration’s Budget Projections As “Fantasy”

Authored by Craig Wilson via The Daily Reckoning,

David Stockman joined Bloomberg Markets to discuss President Donald Trump’s latest budget projections. After the White House and current Office of Management and Budget director Mick Mulvaney released various statements on the budget proposal viability conversations already began within the GOP and Congress.

When prompted by host David Gura over his thoughts, even reflecting on former Treasury Secretary Summers comments that the budget is ludicrously optimistic, David Stockman did not mince words speaking on Washington.

“I think it is fantasy land. They have been kicking the can so long that the magnitude of the problem is almost insuperable. They just imagine options, they imagine policy mixes that have no chance in the world of happening.”

 

“Not only does this budget project all of this GDP, which can’t happen, it also says we’re going to have what they’ve laid out as a $7.5 trillion gross tax cut over ten years. They’ve identified 15% on the corporate rate, 15% on the pass through and doubled the standard deduction along with all of the rest of the proposals. Yet they say they’re going to pay for it with 100% offset so that there’s no revenue loss.”

During the conversation the Bloomberg host then inserted that the budget offers a “double count” with reference to the math completed by the Administration. Stockman remarked, “Sure, I’m all for a broader base, lower rates – that’s what Reagan did in 1986. But how are you going to come with $7.5 trillion of offsets, when you have the K-Street lobbyists lined up from one end of the swamp to the other. The big dollars are really beyond reach.”

 

“The biggest loophole you could close is the health exclusion – that’s $200 billion a year. The House Republicans backed out on that during the Obamacare repeal. The next biggest one is $180 billion which is pensions and IRA’s. Do you think they’re going to take pensions and IRA’s away?”

 

“The third biggest one is capital gains and dividends treated on a preferential basis. When you put all the Wall Street lobbyists, along with the rest of them, on the case they’re not going to do that either.”

 

“My point is, they pretend to have a tax cut that they haven’t paid for that produces GDP that’s out of this world beyond what’s possible. They end up with budget numbers that are so unrealistic and such a complete fantasy that they might as well not even bother.”

Stockman then urged all that together with the fact that, “they pretend that you can raise defense, veteran spending and have a trillion dollar infrastructure program. That you can ring-fence social security and medicare which is $1.8 trillion, not cutting them a dime.”

“Essentially, they believe you can take $500 billion of a $4 trillion budget and cut the hell out of that little corner and leave all the rest to either grow or stay the same while believing it adds up. It doesn’t.”

end

This is not pretty:  huge contractor Booz Allen crashes after the Dept of Justice launches a probe against the company

(courtesy zero hedge)

NSA Contractor Booz Allen Crashes After DoJ Launches Probe

Shares in Booz Allen Hamilton are crashing after hours (down 13%) after releasing an 8-K admitting that the Department of Justice is investigating the NSA Contractor’s direct and indirect charging practices.

In their 8K, they admit…

On June 7, 2017, Booz Allen Hamilton Inc. (the “Company”), a wholly owned subsidiary of Booz Allen Hamilton Holding Corporation, was informed that the U.S. Department of Justice is conducting a civil and criminal investigation relating to certain elements of the Company’s cost accounting and indirect cost charging practices with the U.S. government.

 

To date, our internal and external audit processes have not identified any significant deficiencies or material weaknesses, or identified any significant erroneous cost charging.

 

The Company is cooperating with the government in these matters and expects to bring them to an appropriate resolution.

As a reminder this is the company that Edward Snowden worked for, and as The Washington Post previously noted, the CEO desperately tried to distance himself from any reputational risk in 2013…

“I told our employees Mr. Snowden was on our payroll for a short period of time, but he was not a Booz Allen person and he did not share our values,” Shrader said.

 

“We cannot and will not let him define us.”

It appears they have more than ‘leaks’ to worry about.

 

We will see you tomorrow night

Harvey.


June 14/Another orchestrated gold and silver raid in the access market/At comex closing: gold up $7.00 and silver up 37 cents/Palladium lease rates skyrocket to 16% as shortages galore appear/Two shootings in the USA: first in Virginia with the...

Wed, 06/14/2017 - 18:39

GOLD: $1272.80  UP $7.00

Silver: $17.11  UP 37  cent(s)

Closing access prices:

Gold $1261.60

silver: $16.90

 

 

 

 

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1278.03 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1269.65

PREMIUM FIRST FIX:  $8.38

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1278.543

NY GOLD PRICE AT THE EXACT SAME TIME: $1268.80

Premium of Shanghai 2nd fix/NY:$9.63

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1268.25

NY PRICING AT THE EXACT SAME TIME: $1268.80

LONDON SECOND GOLD FIX  10 AM: $1275.50

NY PRICING AT THE EXACT SAME TIME. $1275.60 

For comex gold: JUNE/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  15 NOTICE(S) FOR 1500  OZ.

TOTAL NOTICES SO FAR: 2206 FOR 220,600 OZ    (6.8615 TONNES)

For silver: For silver: JUNE  18 NOTICES FILED TODAY FOR 90,000  OZ/

Total number of notices filed so far this month: 834 for 4,170,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

 

You could see a raid coming in the afternoon:  with gold and silver quite strong up until 2: 00 pm, the gold/silver equity shares languished and some of these guys were already in the red.  Then comes the dovish hike and after gold spiked to $1280, the crooks unleashed a torrent of paper shorts to bury our metals again.

Over at the comex, the amount standing for the silver metal again rose in similar fashion to what we witnessed last month and also in April. It is up for the 10th consecutive trading day. We certainly have a determined entity trying to get its hands on whatever silver is available.

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This is where we are heading:  (JB Slear/Jim Sinclair)

According to JB Slear, this is what the future holds. Why should I write words. Get into the cellar as fast as you can!

Jim

In silver, the total open interest FELL BY 3,786  contract(s) DOWN to 201,214 WITH THE NASTY FALL IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (DOWN 17 CENT(S). In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.0065 BILLION TO BE EXACT or 143% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 18 NOTICE(S) FOR 90,000  OZ OF SILVER

In gold, the total comex gold FELL BY ANOTHER  2,795 contracts WITH THE FALL GOLD TOOK  ($0.80 with YESTERDAY’S TRADING). The total gold OI stands at 471,134 contracts.

we had 15 notice(s) filed upon for 1500 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

With respect to our two criminal funds, the GLD and the SLV:

GLD:

We had no changes in tonnes of gold at the GLD:

Inventory rests tonight: 867.00 tonnes

.

SLV

Today: no changes in inventory/

THE SLV Inventory rests at: 339.605 million oz

end

.

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver FELL BY 3,786 contracts DOWN TO 201,214 (AND now A LITTLE  FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), WITH THE NASTY FALL IN PRICE FOR SILVER WITH YESTERDAY’S TRADING  ( DOWN 17 CENTS).We lost a few of our paper players but the core players remain firm and determined.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 23.07 POINTS OR 0.73%   / /Hang Sang CLOSED UP 23.80 POINTS OR 0.09% The Nikkei closed DOWN 15.23 POINTS OR 0.08%/Australia’s all ordinaires  CLOSED UP 1.04%/Chinese yuan (ONSHORE) closed DOWN at 6.7972/Oil DOWN to 45.96 dollars per barrel for WTI and 48.23 for Brent. Stocks in Europe OPENED IN THE GREEN       ..Offshore yuan trades  6.7927 yuan to the dollar vs 6.7972 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE  STRONGER DOLLAR. CHINA IS NOT HAPPY TODAY WITH THE RISE IN THE USA DOLLAR 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

b) REPORT ON JAPAN c) REPORT ON CHINA

 

Chinese yield curve inverts more as liquidity in China seems to disappear

( zero hedge)

 

4. EUROPEAN AFFAIRS

i)UK

How on earth could this happen; a fire destroyed an apartment building killing 6 and injuring many. Builders of the apartment complex used flammable material and that caused the fire to spread like wild fire…

( zero hedge)

ii) EU

my goodness! the EU sues Poland, Hungary and the Czeck Republic for not accepting refugees

(courtesy zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

6 .GLOBAL ISSUES

CANADA/SEARS

The bricks and mortar retail apocalypse moves north into Canada as Sears Canada admits that it’s future is dim

(courtesy zero hedge)

7. OIL ISSUES

Oil drops after another increase in crude and gasoline inventories

( zerohedge)

8. EMERGING MARKET

VENEZUELA

More Anti Government protests in Venezuela

( zero hedge)

9.   PHYSICAL MARKETS

i)We have 3 important traders who now have abandoned an extradition fight and have agreed to face charges of manipulation of foreign exchange (and that no doubt includes gold and silver)

( Alan Tovey/London’s Telegraph/GATA)

ii)James Ledbetter’s new book on how governments always tried to control the price of gold:

( GATA/Chris Powell)

iii)Palladium is the smallest of the 4 precious metals.  Russia for generations has been the dominant supplier of Palladium as this nation was the first to issue coinage of this rare metal. Russia had so much of the metal they did not know what to do with it. (Actually around the turn of the 20th Century they made ice boxes made of Palladium). In the late 1990’s they exported the metal to the west where its dominant use is in the auto sector.  They were exporting around 2.5 million oz per year.  Last year however, their inventories having been depleted and no new mining finds has caused a huge scarcity.  Derivatives incorporated by the west kept the metal price low.  Today the paper balloon burst with lease rates over 16% and mining for Palladium in South Africa on the skids due to high mining costs.

 

a must read..

(courtesy David Jensen/Safe Haven)

10. USA Stories

 

i)Today’s early trading right after CPI and retail sales were announced:

(ZEROHEDGE)

ii)Jeff Sessions did a terrific job yesterday deflecting collusion accusations and calling them appalling and a detestable lie. That did not stop the democrats trying to create the impression that Trump et al allied with Russian operatives  to steal the USA election.

( zero hedge)

iii)All eyes were on the CPI report and it was hoped that inflation would rip higher and instead it dropped .1%.  This will no doubt cause the Fed to stop raising rates as the economy is coming to a complete halt

( zerohedge)

iv)The first data point  (above) was lower than expected inflation.  Then they released another important data point: retail sales and it tumbled .3% month over month the biggest drop since Jan 2016.  The USA economy is grinding to a halt.

( zerohedge)

v)All eyes were on the CPI report and it was hoped that inflation would rip higher and instead it dropped .1%.  This will no doubt cause the Fed to stop raising rates as the economy is coming to a complete halt

( zerohedge)

vi)Business inventories tumble badly in April on all two fronts:  Wholesale and Retail.  Manufacturing inventory rose a tiny fraction. This will without a doubt lower 2nd quarter GDP considerably

( zero hedge)

vii)The scenario last night was for today’s hike being a dovish hike.  Now that the Fed received a slap in the face with a drop in inflation and also a drop in inflation expectations we will probably see only one hike and it is done!

vii a)   And she delivered a “dovish hike”

( zero hedge)

 vii b)  And now the unwinding of bond purchases.  there is no way that they will be able to do thus unless they collapse the economy

( zero hedge)

 

( zero hedge)

viii)The auto sector is in complete shambles as now the big auto companies extend plant shutdowns because of increasing inventory.  The

subprime auto loans together with lower used car prices are causing havoc to the industry

( zero hedge)

ix)This is not good: early this morning shots fired in Alexandria Virginia where Majority Whip Scalise was hit.

3 commentaries

( zero hedge)

x)OH NO!! Not again!! Active shooter in San Francisco.  the UPS building on 17th and Potrero

( zero hedge)

 

Let us head over to the comex:

The total gold comex open interest FELL BY 2795 CONTRACTS DOWN  to an OI level of 471,134 WITH THE  FALL IN THE PRICE OF GOLD ($0.80 with YESTERDAY’S trading). AGAIN, the bankers were expecting more gold leaves to fall from the gold tree and as such they could not cover as much as they wanted.

We are now in the contract month of JUNE and it is one of the BETTER delivery months  of the year. In this JUNE delivery month we had A  LOSS OF 70 contract(s) FALLING TO  1551.  We had 11 notices filed yesterday so we LOST ANOTHER 59  contracts or an additional 5900 oz will NOT stand for delivery in this very active delivery month of June AND WITHOUT A SHADOW OF DOUBT THESE 59 CONTRACTS RECEIVED AN EFP CONTRACT WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURE GOLD CONTRACT/OR A LONG CALL OR MOST LIKELY A LONDON BASED FORWARD GOLD CONTRACT. THESE EFP’S ARE PRIVATE OFF COMEX TRANSACTIONS. THE STUBBORN LONGS WHO ARE REMAINING STOIC AT THE COMEX ARE SO FAR REFUSING THAT FIAT BONUS (OVER 11 TONNES STANDING)

Below is a little background on the EFP contracts  initiated by our bankers: We now know for certain that private EFP contracts are given by the bankers when faced with an upcoming active delivery month and they state that this is for emergency purposes only and that they do not have actual physical metal to deliver upon in the front month.  We just do not know the makeup of that private deal.  It is my contention that the longs in GOLD FOR INSTANCE at the end of MAY(for June contracts) were given a fiat bonus plus a long “in the money” call for a  future July contract or a August FUTURE contract or MAYBE EVEN A LONDON BASED FORWARD GOLD CONTRACT. . and this is why the total comex open interest complex obliterates as we enter first day notice.  So now everything makes sense: the obliteration of OI as we enter first day notice has not really occurred in the real sense but replaced with a future long contract call and/or an off -comex London based gold contract  with some bonus money for their effort.

The non active July contract GAINED 54 contracts to stand at 2019 contracts. The next big active month is August and here the OI LOST 2,630 contracts DOWN to 345,745,  as the bankers trying to keep this month down to manageable size.

We had 15 notice(s) filed upon today for 1500 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI FELL BY 3,786 contracts FROM 205,000  DOWN TO 201,214 WITH YESTERDAY’S BIG 17 CENT LOSS. WE LOST SOME OF OUR PAPER PLAYERS BUT THE CORE LONGS REMAIN STOIC. OUR BANKER FRIENDS ARE DESPERATELY TRYING TO COVER THEIR SHORTS IN SILVER AND FINALLY THEY WERE ABLE TO COVER SOME OF THOSE SHORTS. We are in the NON active delivery month is JUNE  Here the open interest SOMEHOW GAINED 15 contract(s) RISING TO 28 contracts. We had 4 notices served upon yesterday so we AGAIN GAINED 19 CONTRACTS OR AN ADDITIONAL  95,000 OZ OF SILVER WILL STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.  IT SEEMS WE ARE CONTINUING WHERE WE LEFT OFF LAST MONTH IN SILVER AS INVESTORS ARE WILLING TO FORGO THE FIAT PROFIT JUST TO SECURE PHYSICAL SILVER METAL. THIS IS THE 10TH CONSECUTIVE DAY THAT THE AMOUNT OF SILVER STANDING ADVANCED FROM FIRST DAY NOTICE. 

The next big active month will be July and here the OI LOST 7,623 contracts DOWN to 100,533 as we start to wind down before first day notice Friday, June 30.  July will be interesting to watch in silver as we witness fewer players pitching for EFP contracts than with gold.

The month of August, a non active month picked up 17 contracts to stand at 55.  The next big active delivery month for silver will be September and here the OI already jumped by another 3139 contracts up to 59,452.

I will give you a snapshot as to what happened last year at the exact number of days before first day notice:

 Monday, June 14.2016:  92,722 contracts were still outstanding vs 100,533 contracts June 14.2017

At the conclusion of June, the final standing for physical silver was 3,080,000 oz and we have already surpassed that number this year  (3,945,000 oz).

The line in the sand is $18.50 for silver and again it has been defended by the criminal bankers.  Once this level is pierced, the monstrous billion oz of silver shorts will blow up. The bankers are defending the Alamo with their last stand at the $18.50 mark. THE NEW RECORD HIGH IN OPEN INTEREST WAS SET FRIDAY APRIL 21/2017 AT:  234,787.

We had 18 notice(s) filed for 90,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 243,283 contracts which is VERY GOOD

Yesterday’s confirmed volume was 181,591 contracts  which is GOOD

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for JUNE  June 14/2017. Gold Ounces Withdrawals from Dealers Inventory in oz   nil Withdrawals from Customer Inventory in oz    10,288.910 oz Brinks Manfra Scotia Deposits to the Dealer Inventory in oz nil  oz Deposits to the Customer Inventory, in oz   nil oz No of oz served (contracts) today   15 notice(s) 1500 OZ No of oz to be served (notices) 1536 contracts 153,600 oz Total monthly oz gold served (contracts) so far this month 2206 notices 220600 oz 6.8615 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month   282,794.7 oz Today we HAD  2 kilobar transaction(s)/  We had 0 deposit into the dealer: total dealer deposits: nil oz We had NIL dealer withdrawals: total dealer withdrawals:  NIL oz we had no dealer deposits: total dealer deposits:  nil oz we had 0  customer deposit(s): total customer deposits; nil  oz We had 3 customer withdrawal(s) i) Out of Brinks: 97.36 oz ii) Out of Manfra; 160.75 oz (5 kilobars) iii) Out of Scotia: 10,030.800 oz  (312 kilobars) total customer withdrawal: 10,288.910  oz  we had 1 adjustment(s): i) out of Brinks:  10,344.48 oz was adjusted out of the dealer and this landed into the customer account of Brinks For JUNE:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 15  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 9 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the initial total number of gold ounces standing for the JUNE. contract month, we take the total number of notices filed so far for the month (2206) x 100 oz or 220,600 oz, to which we add the difference between the open interest for the front month of JUNE (1551 contracts) minus the number of notices served upon today (15) x 100 oz per contract equals 374,200  oz, the number of ounces standing in this active month of JUNE.   Thus the INITIAL standings for gold for the JUNE contract month: No of notices served so far (2206) x 100 oz  or ounces + {(1621)OI for the front month  minus the number of  notices served upon today (15) x 100 oz which equals 374,200 oz standing in this  active delivery month of JUNE  (11.639 tonnes) . WE LOST 59 CONTRACTS OR AN ADDITIONAL 5900 OZ WILL NOT STAND AT THE COMEX.  HOWEVER THESE GUYS (59 CONTRACTS) WERE GIVEN EFP CONTRACTS WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURES GOLD CONTRACT OR A LONG CALL ON A GOLD CONTRACT OR MOST LIKELY A LONDON BASED GOLD FORWARD CONTRACT. YOU CAN NOW SEE WHY THE COT REPORTS ARE DISTORTED DUE TO THE ISSUANCE OF THESE EFP CONTRACTS  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 889,847.333 or 27.67 tonnes DEALER RAPIDLY LOSING GOLD Total gold inventory (dealer and customer) = 8,636,844.749 or 268.64 tonnes    Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 268.64 tonnes for a  loss of 34  tonnes over that period.  Since August 8/2016 we have lost 85 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 10 MONTHS  85 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE MAY DELIVERY MONTH   June INITIAL standings  June 14 2017 Silver Ounces Withdrawals from Dealers Inventory  nil Withdrawals from Customer Inventory  63,16.421  oz CNT Scotia Deposits to the Dealer Inventory NIL oz Deposits to the Customer Inventory   3,029.07 oz DELAWARE JPM No of oz served today (contracts)  18 CONTRACT(S) (90,000 OZ) No of oz to be served (notices) 10 contracts ( 50,000 oz) Total monthly oz silver served (contracts) 834 contracts (4,170,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month 2,733,859.2 oz today, we had  0 deposit(s) into the dealer account: total dealer deposit: NIL  oz we had Nil dealer withdrawals: total dealer withdrawals: nil oz we had 2 customer withdrawal(s):  i) out of CNT: 3030.111 oz ii) Out of Scotia; 60,086.310 oz TOTAL CUSTOMER WITHDRAWALS:  63,116.421  oz  We had 2 Customer deposit(s):  i) Into Delaware:   999.05 oz ii) Into JPM: 2030.02 oz ***deposits into JPMorgan have now slightly resumed In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits 3029.07 oz    we had 0 adjustment(s) The total number of notices filed today for the JUNE. contract month is represented by 18 contract(s) for 90,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at 834 x 5,000 oz  = 4,170,000 oz to which we add the difference between the open interest for the front month of JUNE (28) and the number of notices served upon today (18) x 5000 oz equals the number of ounces standing  

 

.   Thus the initial standings for silver for the JUNE contract month:  834 (notices served so far)x 5000 oz  + OI for front month of JUNE.(28 ) -number of notices served upon today (18)x 5000 oz  equals  4,220,000 oz  of silver standing for the JUNE contract month.   We gained 19 contracts or an additional 95,000 oz will stand for delivery. WE ALSO HAD 0 EFP CONTRACTS THAT WERE ISSUED AS THE LONGS REFUSED A FIAT BONUS: THEY WANT THEIR PHYSICAL SILVER.     Volumes: for silver comex Today the estimated volume was 111,746 which is GIGANTIC Yesterday’s  confirmed volume was 128,396 contracts which is GIGANTIC YESTERDAY’S ESTIMATED VOLUME OF 128,396 CONTRACTS EQUATES TO 642 MILLION OZ OF SILVER OR 92% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.   Total dealer silver:  34.315 million (close to record low inventory   Total number of dealer and customer silver:   204.798 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 7.9 percent to NAV usa funds and Negative 7.8% to NAV for Cdn funds!!!!  Percentage of fund in gold 62.4% Percentage of fund in silver:37.5% cash .+0.1%( June 14/2017)    2. Sprott silver fund (PSLV): STOCK NAV falls to -.20%   (june 14/2017)  3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.70% to NAV  (June 14/2017 ) Note: Sprott silver trust back  into NEGATIVE territory at -.20% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.70%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada

Submitted by cpowell on Thu, 2017-03-09 01:19. Section: Daily Dispatches

From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017

http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…

Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.

The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.

The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.

“They weren’t interested in having those discussions,” Williams said.

 Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.

If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.

“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”

Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.

The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.

Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.

Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.

end

And now the Gold inventory at the GLD

June 14./no change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

 

June 13. No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 12/No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 9/no change in inventory at the GLD/Inventory rests at 867.00 tonnes

June 8/AN ADDITION OF 3.07 TONNES OF GOLD ADDED TO THE GLD/INVENTORY RESTS AT 867.00 TONNES

June 7 a huge change in inventory/a deposit of 13.93 tonnes/inventory rests at 864.93 tonnes

June 6/ no changes in inventory at the GLD/Inventory remains at 851.00 tonnes

June 5.2017/no changes at the GLD/Inventory remain at 851.00 tonnes

June 2/2017/a huge deposit of 3.55 tonnes of gold into the GLD/Inventory rests at 851.00 tonnes

June 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 847.45 TONNES

May 31./ no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 30/no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 26./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 25./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 24/no change in inventory at the GLD/inventory rests at 847.45 tonnes

May 23/a paper withdrawal of 5.03 tonnes of gold from the GLD/Inventory rests at 847.45 tonnes

May 22/A DEPOSIT OF 1.77 TONNES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.48 TONNES

May 19/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 850.71 TONNES

May 18/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 850.71

May 17/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 16./ no change in the GLD inventory/inventory rests at 851.89 tonnes

May 15/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 12/no changes in GLD/inventory rests at 851.89 tonnes

may 11/no changes in GLD inventory/inventory rests at 851.89 tonnes

May 10/no changes in GLD inventory/inventory rests at 851.89 tonnes/

May 9/a withdrawal of 1.19 tonnes from the GLD/Inventory rests tonight at 851.89 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx June 14 /2017/ Inventory rests tonight at 867/00 tonnes *IN LAST 172 TRADING DAYS: 80.13 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 114 TRADING DAYS: A NET  47.30 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY. *FROM FEB 1/2017: A NET  60.64 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

June 14/no change in silver inventory at the SLV/inventory rests at 339.605 million oz/

June 13/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz

June 12/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 9/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 8/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ/

June 7/no change in inventory at the SLV/inventory rests at 339.605 million oz/

June 6/no change in inventory at the SLV/Inventory rests at 339.605 million oz.

June 5/a huge change at the SLV/a withdrawal of 1.371 million oz /inventory rests at 339.605 million oz/

June 2/no change in silver inventory at the SLV/Inventory rests at 340.976 million oz/

June 1/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 340.976 MILLION OZ

May 31./ no change in silver inventory at the SLV/inventory rests at 340.976 million oz/

May 30/no change in silver inventory at the SLV/inventory rests at 340.976 million oz

May 26/another paper withdrawal of 946,000 oz of silver from the SLV with silver rising/inventory rests at 340.976 million oz

May 25/no change in silver inventory at the SLV/Inventory rests at 341.922 million oz

May 24./a “paper” withdrawal of 1.893 million oz from the SLV/inventory rests tonight at 341.922 million oz

May 23/no change in silver inventory at the SLV/inventory rests at 343.815 million oz

May 19/no change in silver inventory at the SLV/Inventory rests at 343.815 million oz.

may 18/2017/another big deposit of 1.42 million oz added to the SLV/inventory rests at 343.815 million oz.

may 17/no change in silver inventory at the SLV/Inventory rests at 342.395 million oz/

May 16./we had a huge addition of 1.416 million oz of silver into the SLV/inventory rests at 342.395 million oz

May 15/no changes in silver inventory/inventory rests at 340.979 million oz/

May 12/a huge change in silver: a deposit of 2.369 million oz/inventory rests at 340.979 million oz

May 11/no changes in silver inventory at the SLV/Inventory rests at 338.610 million oz

May 10/ a gigantic 3.833 million oz of silver added to the SLV and this occurred with the constant whacking of silver for the past 17 trading sessions/inventory rests at 338.610 million oz

may 9Again, no movement of inventory at the SLV. Inventory rests at 334.777 million oz

June 14.2017: Inventory 339.605  million oz end We are going to provide GOFO rates  (gold) each day and shortly silver courtesy of Bron Suchecki of Monetary Metals and here is today’s figures:

The actual figures can be found on our home page https://monetary-metals.com/

with this box in the left side

GOFO

6 month: 1.26%

12 month:  1.44%

BRON SUCHECKI | VP Operations Unlocking the Productivity of Gold MONETARY METALS & CO M: +61 4 1210 1912 | bron@monetary-metals.com Skype: bron.suchecki Twitter: @bronsuchecki Website: monetary-metals.com Use this link to encrypt and safely send confidential documents to Monetary Metals® https://cloud.sookasa.com/upload_page/f840a3c3-54e5-42b0-85b4-15c9e94ea5e  end Major gold/silver trading/commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Brexit and UK election impact UK housing

By janskoyles June 14, 2017

  • Growing evidence of slowdown in UK property market
  • Slow-down in activity in UK housing market in run up to UK election
  • Average UK house prices dropped in the three months to May
  • Halifax report annual house price growth fallen to a four-year low of 3.3 percent.
  • “Political instability breeds procrastination on the part of homebuyers and sellers”
  • Sterling drop will increase divide in housing market, first time buyers continue to struggle
  • House price growth has lost momentum, volumes continue to drop

UK property market forecast to take hit on political uncertainty

The United Kingdom has been dealt a couple of ‘shocks’ in the last year – Brexit and the Conservative’s lost majority in Parliament.

The only thing that these results definitively mean for the country is uncertainty. Whilst every voter and British resident works to navigate these unclear times there is an air of nervousness about how things will pan out. This is becoming clear through the commonly used temperature gauge of any Western economy – the housing market.

Latest data suggests that both Brexit and the UK election have negatively impacted the already overheated property market. With little foresight as to how the economy and government will move forward, the housing industry is feeling nervous.

“The general election is again commonly cited as a factor hindering activity, causing some hesitancy from both buyers and vendors.” stated RICS upon release of their latest survey. Prices have also been affected by Brexit. Before Britain voted to leave the EU, the UK had seen year- on-year price rises of almost 10 percent, now house prices are either stalling or falling.

Housing market tense and uncertain

A survey carried out by Royal Institution of Chartered Surveyors (RICS) found brewing problems in the market were largely down to concerns over both the outcomes of the snap election and Brexit.

The professional body reported British house prices had risen at their slowest rate since August 2016, in May. Volumes were also down as enquiries from new buyers, new instructions from those wanting to sell and agreed sales had all declined during May, with the number of homes being put up for sale falling the most since just after the 2016 Brexit result.

The British Pound may well weaken further as we head into Brexit negotiations. This will provide international buyers with the further opportunity to purchase with a favourable exchange rate. However, they too do not like uncertainty and will likely look for more concrete assurances on how this will all play out.

Over the medium term it’s not all bad news for house prices, according to RICS contributors house prices are expected to increase at a faster pace than wages over the medium term. In short, first-time buyers will continue to suffer as the gap grows.

Currently UK house prices are nearly 8.5 times average earnings. Despite figures suggesting a fall in house prices the ratio is still at a level has not been seen at since the last property boom. On average it has never been financially easier to get a mortgage. Interest rates remain at record lows in recent years so debt servicing levels remain affordable (for the time being!).

So long as interest rates stay very low, new borrowing could keep the property market going and UK house prices buoyant at least for a while longer. However this isn’t taking into account low sentiment or government policy.

Will the government lose interest?

Western governments thoroughly enjoy riding on the wave of (and supporting) increasing house prices. But this can backfire if it is the result of a housing shortage. In the UK shortages are a major problem. UK governments have repeatedly promised to solve this problem but have rarely made headway.

One of the immediate effects of the weak Conservative victory is the shakeup in both cabinet and policy. After weak RICS data, the housing market really needed an injection of confidence this last week. However, at the moment uncertainty just continues to grow given the removal of housing minister Gavin Barwell.

The housing brief of the last government is now unlikely to be priority given Brexit negotiations and now a minority government in power. Housing market policy will be closely monitored by market participants in terms of how much government can reaffirm commitments to the pre-election policy direction rather than switch things and create further disruption or uncertainty.

The most recent housing policy white paper outlined ways and means to expand housing supply. In addition, the industry and government had both shown interest in supporting new methods of delivery such as build to rent and off-site construction. Progress in any of these areas is unlikely to be evident for some time, especially so prior to Brexit.

For new builds and development this could be a major problem, as Hayley Scott from Investec Structured Property Finance told CityAM, “Volatility and uncertainty may return to the sector….A number of proposed new projects may indeed be put on hold as the property sector takes stock of this result. Banks are likely to be cautious about financing new developments. Real estate as an asset class will lose favour with institutional and overseas investors as doubts hang over the UK real estate sector.”

Concluding thoughts

A collapse in the housing market would devastate the banking system and sterling. Confidence affects sentiment. Very few markets enjoy uncertainty and the property market is no exception. Sentiment in property markets generally changes more slowly than in more liquid, traded markets but when it does, it is as powerful a driver of prices.

In the short to medium term, Mrs May’s government has a lot of work to do when it comes to assuring markets, investors, buyers and sellers that they have this ship stable and there is nothing to worry about when it comes to property. Right now, these reassurances seem to be hot air, the longer this goes on the more damage will be inflicted on an already delicate situation.

Ultimately it is easy money that has lead us into a situation where a couple of elections can put a multi- billion pound industry close to its knees. Investors would be wise to prepare for a time (in the not too distant future) when times become tough thanks to weak sentiment and low confidence.

It is not just in the UK that property prices look over valued. In the event of price falls, gold is likely to act as a hedge and preserve wealth. Investors should select a reasonable allocation to gold bullion which is held in allocated and segregated storage. Owning these assets away from the system which fuels these overheated property markets will soon be seen as prudent.

http://www.goldcore.com/us/gold-blog/brexit-uk-election- impact-uk-housing/

-END-

By Mark O’ByrneJune 13, 20170 Comments

end

 

We have 3 important traders who now have abandoned an extradition fight and have agreed to face charges of manipulation of foreign exchange (and that no doubt includes gold and silver)

(courtesy Alan Tovey/London’s Telegraph)

UK currency traders abandon extradition fight, agree to face charges in NY

Submitted by cpowell on Tue, 2017-06-13 14:51. Section:

By Alan Tovey
The Telegraph, London
Tuesday, June 13, 2017A trio of City of London traders charged by the U.S. Department of Justice with rigging the $5.3 trillion per day currency markets have agreed to go voluntarily to the United States and not battle extradition proceedings.

The three men — part of an online chat group called “the Cartel,” which is alleged to have been used to manipulate foreign exchange deals — have struck the deal, which will allow them to return to Britain ahead of the trial.

The three men are Chris Ashton, who was formerly global head of spot trading at Barclays, ex-JP Morgan dealer Richard Usher, and Rohan Ramchandani, formerly of Citigroup.

They are accused by U.S. authorities of a single count of conspiracy to manipulate markets. This charge carries a maximum penalty of 10 years’ imprisonment and a $1 million fine, though this could rise to twice the gain they received from their actions or twice the losses of those on the other side of the deal if found guilty. …

…For the remainder of the report:

http://www.telegraph.co.uk/business/2017/06/13/three-uk-currency-traders…

end

 

James Ledbetter’s new book on how governments always tried to control the price of gold:

 

(courtesy GATA/Chris Powell)

James Ledbetter: How the U.S. government tried to convict a golden rooster

Submitted by cpowell on Wed, 2017-06-14 02:30. Section:

10:30p ET Tuesday, June 13, 2017

Dear Friend of GATA and Gold:

James Ledbetter’s new book, “One Nation Under Gold,” has a chapter humorously detailing the U.S. government’s paranoia about the monetary metal even back in the 1950s and ’60s, before the government resorted to gold sales, swaps, and leases for price suppression. The chapter tells the strange story of a golden rooster in Nevada that was prosecuted for violating the Gold Reserve Act of 1934. The excerpt is headlined “Why the U.S. Government Once Sued a Nevada Casino over a 14-Pound Solid-Gold Rooster” and it’s posted at QZ.com here:

https://qz.com/1002767/gold-price-why-the-us-government-once-sued-a-neva…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

end

Palladium is the smallest of the 4 precious metals.  Russia for generations has been the dominant supplier of Palladium as this nation was the first to issue coinage of this rare metal. Russia had so much of the metal they did not know what to do with it. (Actually around the turn of the 20th Century they made ice boxes made of Palladium). In the late 1990’s they exported the metal to the west where its dominant use is in the auto sector.  They were exporting around 2.5 million oz per year.  Last year however, their inventories having been depleted and no new mining finds has caused a huge scarcity.  Derivatives incorporated by the west kept the metal price low.  Today the paper balloon burst with lease rates over 16% and mining for Palladium in South Africa on the skids due to high mining costs.

 

a must read..

(courtesy David Jensen/Safe Haven)

 

and a special thanks to Doug Cundley for sending this for us

 

Palladium Blows the Whistle on the London Metals Market By: David Jensen | Tue, Jun 13, 2017

We noted that London palladium lease rates started to surge in late 2016 giving early visibility of a physical palladium supply shortage in the London precious metals market.

The Achille’s Heel of the world’s predominant price setting center for precious metals (gold, silver, platinum, and palladium) in London is the London Bullion Market Association’s (LBMA) design by the Bank of England to substitute trading and holding metal itself – the historically reliable price discovery method – with unallocated (unbacked) precious metals spot contracts.  Unallocated spot contracts (for immediate ownership of metal) are effective in suppressing metal prices if investment funds and banks can be convinced that the contract claims, that can be created without limit, are a substitute for metal itself. The LBMA currently trades ownership of more than 200M oz of gold each day (more than 2x global annual mine production) in the form of unallocated spot metal contracts with an estimated 400M to 600M oz of unallocated claims for gold standing in the London market.

This unbalanced market of paper claims vs the reality of actual available metal can continue while investors are happy to hold certificates of metal ownership. The problem arises when certificates of metal are not adequate substitutes for metal.

This situation appears to have arisen in the 8.5 million oz per annum global palladium market, the smallest market of the four precious metals. Palladium plays an essential role in the automotive industry providing the key metal in gasoline engine catalytic converters used for exhaust emissions reduction.  Unallocated palladium spot contracts cannot be used in these converters as a metal substitute.

The reduction in South African mine output due to global palladium and platinum prices in London being set below mining costs as well as a reduction in Russian exports of palladium in 2015 (reducing its annual mine export supply to 1.0 million oz from 2.5 million oz) has resulted in visible draw-down in global stockpiles to 1.5 million oz from ~ 3.5 million oz in 2014. The counter-intuitive reduction in palladium investment stockpiles in a rising price environment since 2015 imply that these investment stockpiles may have been utilized to meet physical supply while global mine output languished.

Palladium Lease Rate Spikes – A Metal Shortage Alert:

During this past week of June 5 to June 9, 2017, we’ve seen a notable palladium lease rate shock in London. The lease rate is the per annum cost to borrow metal for various maturity periods (1-month, 3-month, etc.) and it increased last week from 3.5% to approximately 16% in London. Also of interest is that the normally reliable Commerzbank stopped publishing its London precious metals lease data on June 5, 2017. While additional palladium may temporarily be borrowed to reduce the London lease rate, market shortage for this metal is clearly now at play.

Palladium Lease Rates from 2006 to 2017:

Source: TDBank

Russia saved the London market in the late 1990s with its stockpiles that were at that time vast during a similar London palladium shortage. Those stockpiles have now been consumed in the past 20 years and the long term price chart of palladium appears to indicate that we are heading into a new price regime for this metal. The visibility that palladium gives to the suppression of global precious metals prices in the London market from its issuing and trading unallocated paper contracts may well result in a cascade of higher precious metals prices with platinum, silver, and then gold breaking to higher prices as well as investors and industrial users alike come to realize that London unallocated paper contracts are not metal. Of concern to all should be the impact on interest rates identified by future Treasury Secretary Larry Summers in his 1985 paper with Barsky.  At that time, Summers and Barsky identified a rising price of gold as a dominant barrier to low interest rates. Two years later in 1987, the Bank of England formed the LBMA and the global debt bubble was launched in earnest. http://www.safehaven.com/article/42600/transition-of-price-discovery-in-the-global-gold-and-silver-market

end

Tradings flooding Morgan Stanley as they ask why Bitcoin is 3,000 dollar per coin and Ethereum $410.00

 

(courtesy zerohedge)

Traders Are Flooding Morgan Stanley With Calls To Explain Why Bitcoin Is Soaring

First it was Goldman succumbing to hedge funds and “due to popular demand” providing its first ever “technical” take on where Bitcoin will go from here. Now it’s Morgan Stanley’s turn.

In a report on the “Blockchain, Unchained” – in which it advocates for regulation of the blockchain as part of its evolution as well as providing a “master key” to a regulator, in effect killing the very premise behind such a decentralized infrastructure (more on that later) –  Morgan Stanley writes that “the rapid appreciation of cryptocurrencies has elicited many inbound phone calls to both our banks and tech teams.”

It responds that possible explanations for the dramatic moves include investors in search of uncorrelated risk assets and technologists looking for incremental security. But, the bank writes, “governmental acceptance, would be required for this to further accelerate, the price of which is regulation.” We doubt many supporters of cryptos will agree with this.

In any event, here are some further details from Morgan Stanley, but first, a quick primer: as MS explains, for many, Bitcoin and blockchain are often thought of synonymously. In reality, blockchain is primarily a messaging and bookkeeping method, whereas Bitcoin is a store of value that makes use of blockchain methodology to transfer value. Bitcoin and other cryptocurrencies have shown rapid appreciation, as shown in Exhibit 23 and Exhibit 24, with the pace of appreciation showing rapid acceleration since the beginning of 2017. While Bitcoin grabs the headlines, Ethereum, another cryptocurrency that attempts to address some of the echnical shortcomings of Bitcoin, has been gaining value at an even faster rate. The rapid appreciation of blockchain-based currencies and the proliferation of new cryptocurrencies is further raising blockchain’s technological profile.

MS then gives a detailed “explanation” on why Bitcoin and other cryptocurrencies have appreciated rapidly, saying “key possible drivers of cryptocurrency appreciation. It is not clear why cryptocurrencies are appreciating so rapidly (apart from the appreciation itself drawing in more speculation against a potentially inefficient ability to sell). But, in conjunction with our FX Strategy team we identify several key potential contributors:”

  • ICOs—initial currency offerings. Rapid appreciation of cryptocurrencies is encouraging speculative formation of new currencies (see Exhibit 25 ). Many of these new currencies don’t actually have use cases yet, but are intended to be exchange mediums for everything from virtual goods in games to banking mechanisms for products like marijuana where legal implications are not yet fully clear. ICOs are funded with existing cryptocurrencies, hence driving an appreciation circle—e.g., to support/invest in a new currency, one must buy and trade an existing cryptocurrency.

  • Moving funds in China. Up until the last few days, a disproportionate share of Bitcoin mining was taking place in China (where there is cheap access to servers and cheap electricity). First on this website in 2015, and subsequently on many other outlets such as the Wall Street Journal (November 5, 2016) and Fortune (January 5, 2017) have noted that Bitcoin was being used to help avoid monetary controls in China, which explains why the Chinese government has cracked down on Bitcoin mining recently.
  • Increased demand from Korea and Japan. Bitcoin appreciation seems to have been heavily driven in recent months by increased buying from Korea and Japan. In Japan, the recent legalization of Bitcoin has led to an increase in activity, including the recent opening of new Bitcoin exchanges. In Korea, however, there is not a clear explanation for the surge.

While there is no one specific explanation for the surge in cryptos, Morgan Stanley is surprised because the rapid appreciation it taking place despite clear hurdles, to wit:

The rapid appreciation of Bitcoin and others is somewhat surprising in light of some developments that seemingly would have put downward pressure on the currency, including plateauing trading volumes (see Exhibit 23 ), the SEC’s decision not to allow the listing of a Bitcoin ETF, and China’s shutdown of several Bitcoin mining operations (without those miners, transaction time for Bitcoin could increase substantially).”

MS then notes that bitcoin, ethereum et al, are acting more like an asset than currency.

Most regulators and investors view cryptocurrencies more as assets than actual currencies. Their values are too volatile and too hard to actually use for payment for most to consider them currencies. Our conversations with some merchants indicate that, while cryptocurrencies might actually be attractive for them to operate their businesses, they find that the cryptocurrencies are far too volatile to be used.

MS slams Bitcoin which it reminds clients, scales poorly, helping alternatives (especially those based on Ethereum). The blockchain underpinnings of most cryptocurrencies scale too poorly for most currency-like uses. Scaling challenges includes increasing electricity consumption as shown in the chart below, and that time to clear single transactions can often be from 10 minutes to more than an hour, and even that with no guarantee. Ethereum and others have addressed those scaling challenges by centralizing more of the blockchain function, although such increased centralization leads to increased hacking risk, as Ethereum found out the hard way last almost exactly one year ago.

Finally, going back to the most controversial point in the report, according to Morgan Stanley further price gains in cryptos may not be possible unless there is further regulation over the crypto space, which includes giving up autonomy. Which is ironic because as Ryan Vlastelica writes, “proponents of the digital currencies frequently cite their decentralized nature as one of the primary attributes that excites them about the technology.”

Morgan Stanely didn’t specify what types of regulation might be necessary to further push bitcoin higher, noting that the specific changes needed may be different for different cryptocurrencies, all of which use blockchain technology. For blockchain overall, “regulators are involved and watching closely,” Morgan Stanley writes.

“Some have suggested privacy could be improved. Regulators are looking to have a master key so all transactions are visible to them.”

And while handing a master key may indeed streamline costs, it would likely also sacrifice Satoshi Nakamoto’s original intention of blockchain technology, which was to put banking inside the hands of the individual.

In the White Paper, Satoshi said, “Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model.”

This is what Satoshi’s envisioned, but it remains to be seen whether Morgan Stanley’s idea of the master key in blockchain technology will trump the idea of bypassing third parties. Some in the ecosystem still hope Satoshi’s original vision will prevail in the end. Others, those who hope for further gains in the price of bitcoin, ethereum and others, may be willing to sacrifice decentralization if it means further gains. For now, the jury is out even as both bitcoin and ethereum continue to trade just shy of their all time highs of $3,000 and $410, respectively.

end

Your early WEDNESDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    

1 Chinese yuan vs USA dollar/yuan  WEAKER 6.7972(DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES  MUCH WEAKER TO ONSHORE AT   6.7927/ Shanghai bourse CLOSED DOWN 23.07 POINTS OR 0.73%  / HANG SANG CLOSED UP 23.80 POINTS OR 0.09% 

2. Nikkei closed DOWN 15.23 POINTS OR 0.08%   /USA: YEN RISES TO 110.28

3. Europe stocks OPENED IN THE GREEN        ( /USA dollar index RISES TO  97.05/Euro DOWN to 1.1203

3b Japan 10 year bond yield: RISES TO   +.07%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.06/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  45.96 and Brent: 48.23

3f Gold UP/Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil DOWN for WTI and DOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.261%/Italian 10 yr bond yield DOWN  to 1.945%    

3j Greek 10 year bond yield FALLS to  : 5.83???  

3k Gold at $1265.30  silver at:16.93 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 6/100 in  roubles/dollar) 57.06-

3m oil into the 45 dollar handle for WTI and 48 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A SMALL SIZED DEVALUATION SOUTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.28 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9706 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0873 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLSS to  +0.261%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.197% early this morning. Thirty year rate  at 2.852% /POLICY ERROR)GETTING DANGEROUSLY HIGH

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

“FOMC Drift” In Full Effect As Global Stocks Rise; S&P Futures Hit New Record; Oil Slides  

With last Friday’s “tech wreck” now a distant memory, this morning the “FOMC Drift” described yesterday, which “guarantees” higher stock prices and a lower dollar heading into the Fed announcement is in full effect, with European and Asian stocks rising for a second day, led by rebounding tech shares, while S&P futures are modestly in the green and stocks on Wall Streets hit a record high overnight. And as the “FOMC Drift” also expected, the dollar has weakened for a third day with Treasuries rising, while oil fell after the latest IEA world forecast cut its global demand forecast while boosting output expectations.

The MSCI All-Country World index was up 0.1% and has remained stuck in a tight range this month. European shares headed for the highest in more than a week as companies including ASML and Hexagon (on M&A speculation) led the tech share revival in the region. The Stoxx Europe 600 Index gained 0.6%, building on a 0.6% increase the day before. Apart from technology sector, European equity markets supported by continued pick-up in industrial production which helps construction stocks.

The British pound, which rose Tuesday for the first time since the U.K. election, traded sideways as pressure mounted for Theresa May to abandon a so-called hard Brexit. Weaker than expected U.K. earnings data highlights squeeze on domestic consumers, long-end gilts lead curve flattening, GBP weaker in tandem. AUD/USD pushes higher through 100-DMA to outperform G-10, residual support still evident from CAD strength after recent hawkish BOC commentary.

Sovereign yields drifted sideways inside narrow ranges with the Loonie rising for a fifth day in otherwise muted FX markets. The Nikkei was modestly higher while Shanghai Composite declines after China data dump (China May retail sales 10.7% vs 10.7% est; fixed investment 8.6% vs 8.8% est, industrial output 6.5% vs 6.4% est) was seen as mixed, with overall resilience in retail sales and industrial output offset by capex weakness, but Chinese equity markets fell on concerns about a crackdown on the insurance industry after Anbang’s chairman was “detained.”

The Shanghai Composite Index tumbled 0.7 percent and the CSI 300 Index dropped 1.3 percent, its biggest loss this year. The Hang Seng Index erased losses to add 0.1 percent and the Kospi Index in South Korea fell 0.1 percent. Japan’s Topix Index closed down 0.1 percent, while Australia’s S&P/ASX 200 Index climbed 1.1 percent to its highest since May 16. Also in China, money-market rates eased as PBOC injects a net 20 BN yuan with reverse repos and the 7-day repurchase rate fell 32 basis points from Tuesday’s one-month high, overnight CNH Hibor drops to lowest since February.

Also in China, we got the latest credit creation data which showed a modest beat in New Loan activity offset by a miss in Total Social Financing, however it was the M2 which unexpectedly rose by just 9.6%, below the 10.4% est. and the lowest on record. In a statement on its website, the PBOC said that the slower M2 growth may become “new normal” amid leverage cut, adding that the PBOC was seeking to balance delveraging and stable liquidity.

S&P 500 futures were little changed. The gauge added 0.5 percent Tuesday and the Nasdaq 100 climbed 0.8 percent, rebounding from its worst two-day drop of the year.

The pound slipped less than 0.1 percent to $1.2743 after it strengthened 0.8 percent Tuesday. The Canadian dollar rose 0.2 percent, gaining for a fifth day. The euro was little changed at 1.1210. The Bloomberg Dollar Spot Index fell 0.1 percent. The yen was also 0.1 percent weaker at 110.19 per dollar

In commodities, oil prices fell more than 1 percent, on the backfoot again on worries about US oversupply. Brent crude oil was down 45 cents a barrel at $48.27 while U.S. crude was 50 cents lower at $45.96. U.S. inventories climbed by 2.75 million barrels last week, the American Petroleum Institute was said to report. The latest IEA report stated that global oil supply rose by 585k b/d in May to 96.69mm b/d as both OPEC and non-OPEC countries produced more. Meanwhile 2017 world demand was revised to 97.8m b/d from 97.9m b/d. Gold rose 0.1 percent to $1,268.30 an ounce.  Iron ore reverses early losses to climb 1.6%.

All eyes will now turn to the Federal Reserve. The widely expected quarter-point interest rate hike will take the Fed funds target rate above 1 percent for the first time since the immediate aftermath of the collapse of Lehman Brothers in 2008. The Fed is expected stick to previous guidance for another hike before year-end, while acknowledging that inflation is muted. The $4.5 trillion question will be what clues are given on the timetable and scale of eventual balance sheet reduction. Traders’ focus will be on signals on the frequency of further hikes and how the Fed plans to unwind its huge Treasury bond stockpile over the years ahead.

“Markets will probably mostly just trade sideways today in front of the Fed’s rate decision and press conference tonight,” John Cairns, a Johannesburg-based currency strategist at Rand Merchant Bank, said in a client note. “The range of issues that the bank has to cover and the market’s sensitivities to even the slightest changes suggests some market volatility after the event.”

“With financial conditions remaining supportive … and US financials breaking higher, the Fed may see little reason to moderate its rate hike projections when meeting today,” strategists at Morgan Stanley said in a note to clients. The bank expects the dollar to gain 2 percent against major currencies over the next few weeks.

Meanwhile, rates continued to drift lower with the yield on 10-year Treasuries was down one basis point at 2.20% . The yield on U.K. gilts dropped four basis points to 1 percent after rising seven points on Tuesday. Europe’s benchmark bond yield held near seven-week lows ahead of the Fed decision.

Bulletin Headline Summary From RanSquawk

  • EU bourses have traded higher throughout the morning, buoyed by the IT sector
  • Some moderate flow to report in a session looking ahead to the FOMC meeting this evening, with traders looking past the 25bp rate hike largely priced in
  • Looking ahead, highlights include US CPI, Retail Sales, DOE crude oil and the FOMC rate decision

Market Snapshot

  • S&P 500 futures up 0.06% to 2,441.50
  • STOXX Europe 600 up 0.6% to 391.00
  • MXAP up 0.08% to 155.12
  • MXAPJ up 0.4% to 505.58
  • Nikkei down 0.08% to 19,883.52
  • Topix down 0.1% to 1,591.77
  • Hang Seng Index up 0.09% to 25,875.90
  • Shanghai Composite down 0.7% to 3,130.67
  • Sensex up 0.2% to 31,177.15
  • Australia S&P/ASX 200 up 1.1% to 5,833.90
  • Kospi down 0.09% to 2,372.64
  • German 10Y yield fell 0.3 bps to 0.263%
  • Euro down 0.01% to 1.1210 per US$
  • Brent Futures down 1.2% to $48.15/bbl
  • Italian 10Y yield fell 3.9 bps to 1.69%
  • Spanish 10Y yield fell 2.0 bps to 1.416%
  • Brent Futures down 1.2% to $48.15/bbl
  • Gold spot up 0.04% to $1,267.07
  • U.S. Dollar Index up 0.01% to 96.99

Top Overnight News

  • Jeff Sessions calls the idea he colluded with Russia a ’detestable lie’
  • Mnuchin says ’optimistic’ tax reform will get done this year
  • China May retail sales 10.7% vs 10.7% est; industrial output 6.5% vs 6.4% est
  • PBOC operations show China is sticking to ’prudent and neutral’ policy: Financial News
  • Australia June Westpac consumer confidence 96.2 vs 98.0 prev; -1.8% m/m
  • API inventories according to people familiar w/data: Crude +2.8m; Cushing -0.8m; Gasoline +1.8m; Distillates -1.5m
  • The squeeze on U.K. households intensified in the three months through April as wage growth lagged further behind inflation.
  • European Central Bank Governing Council member Jens Weidmann highlighted the risks of continuing extraordinarily expansive monetary policy for too long.
  • Nasdaq Knocks Competitor’s Proposal To Change End-of-Day Trading
  • Boeing Pares 50 Defense Executives, Eliminating Management Layer
  • TPG’s Bonderman Quits Uber Board After Cracking a Sexist Joke
  • Biogen Says CFO Leaving to Join Another Biopharma Company
  • Deutsche Post, Ford to Build Electric Delivery Vehicles
  • Calpers Considers Pay Raises for Top Executives in Delicate Move

Asia stocks rose as the region was lifted by the momentum from the upbeat close on Wall St, where the tech sector rebounded from a 2-day sell-off, while S&P 500 and DJIA printed fresh record highs. ASX 200 (+0.9%) outperformed and rose above 5,800 led by advances in healthcare and tech, while gains in the Nikkei 225 (flat) were to a lesser extent as JPY remained steadfast. Shanghai Comp. (-0.8%) and Hang Seng (flat after paring early losses) were initially negative with participants tentative as they awaited the latest Chinese data updates, which upon release failed to spur demand despite Industrial Output beating expectations as Fixed Asset Investments slowed. Finally, 10yr JGBs were flat with the BoJ’s present in the market under a somewhat lukewarm bond buying operation of JPY 750b1n, while the curve was mixed with underperformance in longer-dated bonds.

Top Asian News

  • Singapore Premier Lee’s Brother to Leave City Amid Family Feud
  • China’s Fosun Dangles Rival Bid for Biggest Emerald Miner
  • Former Noble CEO Alireza Sues Founder Elman for $58 Million
  • Time BOJ Talks Exit as Fiscal Risk Grows, Yoshikawa Says
  • China Big-Cap Stocks Sink Most This Year as Anbang Spurs Selling
  • IMF Lifts China Growth Estimate to 6.7% in Second Rise This Year
  • Inter Milan’s Chinese Owner in Talks to Expand Its Soccer Empire

European bourses have traded higher throughout the morning, buoyed by the IT sector, which has seen a recovery following the volume that was seen to the end of last week in the heavyweight US Tech names. Energy trades in the red amid last night’s API build while the latest IEA report stated that global oil supply rose by 585k b/d in May to 96.69mm b/d as both OPEC and non-OPEC countries produced more. Fixed income markets have been rangebound as the week of central banks begins with the FOMC’s anticipated “dovish hike” expected later. Deal related receiving has seen screens push by around 0.75bps in the 7-10yr, while the 2 — 10yr trades at 93.75bps, flatter from the open. Bund auction from the Buba was relatively well received with the line drawing a healthy 1.5 b/c (matching the previous)

Top European News

  • U.K. Squeeze Tightens as Wages Grow at Slowest Pace in Two Years
  • BNP Paribas, SocGen Selling $230 Million Stake in Euronext
  • Weidmann Stresses QE Risks as ECB Begins to Mull Stimulus ExitB
  • May Resumes Talks to Keep Power Amid Calls to Soften Brexit
  • Shell Sees Ability to Manage Risk Giving Edge in Offshore Wind
  • Germany Builds an Election Firewall to Fight Russian Hackers
  • Proposed New U.S. Sanctions On Russia to Tighten Debt Access
  • Hexagon ‘Regularly’ Looks at Opportunities to Boost Value

UK Election Latest: According to reports in the Telegraph, PM May is reportedly signalling that she is not willing to compromise over a hard Brexit and is determined to enter talks in Brussels next week with a threat that Britain is prepared to leave the EU without a future trading deal. However, the Times report that Chancellor Hammond is preparing to lead a battle within the government to soften Brexit by keeping Britain inside the EU customs union. Deal between DUP and Govt could be delayed until next week due to aftermath of Grenfell Tower and diary commitments of both leaders, according to BBC journalist. Delay to deal with DUP means likely postponement of Queens speech; and possibly Brexit talks.

In currencies, there has been some moderate flow to report in a session looking ahead to the FOMC meeting this evening, with traders looking past the 25bp rate hike largely priced in. We need to get a little colour on the rate path ahead, and just as importantly any fresh light on Fed intentions on balance sheet reduction which may alter the rate profile to some degree. EUR/USD and USD/JPY have been pretty balanced in the interim as a result, deviating less than 10-20 ticks from tight ranges seen over the week so far. More data for GBP traders to consider ahead of the BoE meeting tomorrow, and given expectations are that the MPC will maintain their easy stance for a little longer given last week’s events, this morning’s softer than expected wage growth numbers will add fresh concern over the inflation profile. The numbers were a little higher than expected Tuesday, but after today, the impact on household income is back in the frame. Cable tested towards 1.2800 ahead of the release as the market looked to extend the relief aspect from the perception that a softer Brexit is now more likely. Theresa May seems insistent on taking a ‘hard’ stance, which seems a little futile under the circumstances. The spot rate has dipped back into the lower half of the 1.2700’s since, but there seems to be limited conviction inside the broader range, with outliers at 1.3000 higher up and 1.2500-1.2400 lower down.

In commodities, last night’s API build reported went against the expectations in line with a series of recent draw downs, pulling WTI back under USD46.00 again and with Brent moving in tandem and still maintaining a USD2.00-2.50 premium to the former. We saw a 2.75m build vs the 4.6m draw previously, and but in relative terms the reaction has been modest, but with a view to looking for affirmation with the DoE report later today. Adding to support here, and to metals to a modest degree is the fresh weakness in the USD, and in turn, the prospect of a dovish hike this evening has lifted precious metals also as Gold is back around USD1270 or so despite the positive sentiment reflected on Wall Street last night. Silver remains below USD17.00 however. Copper remains just under USD2.60 this morning but is well off the recent lows to suggest a period of consolidation ahead. Aluminium also a touch lower today, but Nickel, Zinc and Lead all sporting modest gains on the day.

Looking at the day ahead, the focus will be on the FOMC decision due later in the day but before that we will get the May CPI number (+2.0% YoY expected; 2.2% previous) and retail sales data (+0.0% mom expected; +0.4% previous). According to DB, the headline retail sales series should slow due to another disappointing month for unit motor vehicle sales; however, sales excluding automobiles should fare a bit better. With respect to the CPI, DB expects energy prices will drag on the headline, likely resulting in a flat month-over-month reading. However he notes that the core CPI series  will receive significant attention given that the last couple of prints have been surprisingly soft – particularly highlighting that the FOMC specifically mentioned the March core CPI decline in its May meeting statement. Thereafter all focus should shift to the FOMC meeting and press conference.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 7.1%
  • 8:30am: US CPI MoM, est. 0.0%, prior 0.2%; CPI Ex Food and Energy MoM, est. 0.2%, prior 0.1%
    • CPI YoY, est. 2.0%, prior 2.2%; CPI Ex Food and Energy YoY, est. 1.9%, prior 1.9%
    • CPI Core Index SA, est. 251.6, prior 251.2;
  • 8:30am: Real Avg Weekly Earnings YoY, prior 0.34%;  Real Avg Hourly Earning YoY, prior 0.4%
  • 8:30am: Retail Sales Advance MoM, est. 0.0%, prior 0.4%;  Retail Sales Ex Auto MoM, est. 0.1%, prior 0.3%
  • 10am: Business Inventories, est. -0.2%, prior 0.2%
  • 2pm: FOMC Rate Decision
  • 2:30pm: Federal Reserve Board Chairwoman Janet Yellen holds news conference

DB’s Jim Reid concludes the overnight wrap

Overnight we’ve had the monthly key activity indicators for China released and they were broadly stable. Fixed asset investment (FAI) grew by 8.6% yoy ytd, slightly lower than 8.9% in April. Retail sales and industrial production both grew at the same pace as in April (10.7% and 6.5% respectively). Chinese stocks slipped, led by financial and developer shares, amid investor concern that regulators will place further curbs on insurers’ equity investments. The Shanghai Composite fell 0.6% as property and insurance sectors fell on fears of continued curbs for the former and tighter regulation for the sector. The Hang Seng is -0.3% with the Nikkei 0.1%. Asia is mostly waiting for the Fed.

Turning now to markets yesterday, global equities were broadly higher recovering some of Monday’s losses. Over in the US the S&P 500 and the NASDAQ both saw gains of +0.45% and +0.7% respectively with the S&P 500 and Dow back at record highs. The tech stocks are recovering a little after a difficult 48 hours. European equities saw a similar bounce with the STOXX 600 up by +0.6% while the DAX and FTSE MIB were up by +0.6% and +0.9% on the day. The odd one out in Europe was the FTSE 100 which dropped by -0.2% on the day, likely as sterling (+0.7%) gained for the first time since last week’s elections on slightly more stable politics and firmer data.

Staying in the UK, Gilts sold off yesterday across all maturities (2Y: +5bps; 10Y: +7bps) as UK inflation overshot in May. Data out yesterday saw consumer prices outpace expectations by growing at a four-year high of +2.9% YoY (vs. 2.7% expected; 2.7% previous). Retail prices were also up 3.7% YoY (vs. 3.5% expected; 3.5% previous) although wholesale price inflation remained more in line with expectations as PPI rose by +3.6% YoY (+3.6% previous).

Elsewhere in government bond markets, the US yield curve was broadly unchanged on the day (with only marginal flattening) ahead of the FOMC tomorrow whereas German Bunds saw yields rise across all maturities (2Y: +3bps; 10Y: +2bps). French OATs saw yields tick up from the 2Y point (+2bps) all the way to the 10Y (+1bp) but yields at the very long end fell (30Y -2bps). Italian BTPs saw yields fall across all maturities (2Y -2bps; 10Y -4bps) as the recent more positive political sentiment continues in the country.

Credit markets saw spreads broadly continue to tighten yesterday. In Europe iTraxx Main and Crossover saw spread tighten by -1bp and -3bps respectively, while in the US we saw CDX IG and HY tighten by -1bp and -3bps on the day. Turning to FX markets, we saw the US dollar and the Euro both hold fairly steady on the day. In the commodities space, we saw oil give up decent gains after a late day announcement of a surprise build up of US crude inventories. Metals on the other hand were broadly flat to lower.

Away from the inflation data out of the UK, we had a bit more data out of Europe to get through. We got the June ZEW survey in Germany which was a bit of a mixed bag – the current situation component clocked in above expectations at 88.0 (vs. 85.0 expected; 83.9 previous) while the expectations component deteriorated to 18.6 (vs. 21.7 expected; 20.6 previous). Over in the US we got the May NFIB small business optimism reading which held steady as expected at 104.5, while the May US PPI report saw wholesale prices unchanged on the month (+0.5% previous), although ex food and energy prices rose by more than expected (+0.3% mom vs. +0.1% expected).

Looking at the day ahead now, in Europe we are due to get the final May CPI numbers for Germany (with no revisions expected). We also get UK labour market data where the focus should be on the three month unemployment rate as of April (expected to hold steady at 4.6%) as well as weekly earnings numbers for April and jobless claims data for May. Following that we will also get the Eurozone industrial production readings for April which is expected to head back into positive territory (+0.5% mom vs. -0.1% previous).

Over in the US the focus will be on the FOMC decision due later in the day but before that we will get the May CPI number (+2.0% YoY expected; 2.2% previous) and retail sales data (+0.0% mom expected; +0.4% previous). Our Chief US Economist Joseph Lavorgna notes that the headline retail sales series should slow due to another disappointing month for unit motor vehicle sales; however, sales excluding automobiles should fare a bit better. With respect to the CPI, he expects energy prices will drag on the headline, likely resulting in a flat month-over-month reading. However he notes that the core CPI series  will receive significant attention given that the last couple of prints have been surprisingly soft – particularly highlighting that the FOMC specifically mentioned the March core CPI decline in its May meeting statement. Thereafter all focus should shift to the FOMC meeting and press conference.

  3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 23.07 POINTS OR 0.73%   / /Hang Sang CLOSED UP 23.80 POINTS OR 0.09% The Nikkei closed DOWN 15.23 POINTS OR 0.08%/Australia’s all ordinaires  CLOSED UP 1.04%/Chinese yuan (ONSHORE) closed DOWN at 6.7972/Oil DOWN to 45.96 dollars per barrel for WTI and 48.23 for Brent. Stocks in Europe OPENED IN THE GREEN       ..Offshore yuan trades  6.7927 yuan to the dollar vs 6.7972 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE  STRONGER DOLLAR. CHINA IS NOT HAPPY TODAY WITH THE RISE IN THE USA DOLLAR 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

b) REPORT ON JAPAN c) REPORT ON CHINA

Chinese yield curve inverts more as liquidity in China seems to disappear

(courtesy zero hedge)

China Says “Don’t Panic” As Yield Curve Inversion Deepens Amid Liquidity Collapse

The curious case of the inverted yield curve in China’s $1.7 trillion bond market is worsening as WSJ notes that an odd combination of seasonally tight funding conditions and economic pessimism pushed long-dated yields well below returns on one-year bonds, the shortest-dated government debt.

10-Year China bond yields fell to 3.55% overnight as the 1-Year yield rose to 3.61% – the most inverted in history, more so than in June 2013, when an unprecedented cash crunch jolted Chinese markets and nearly brought the nation’s financial system to its knees.

 

This inversion is being exacerbated by seasonally tight funding conditions.

June is traditionally a tight time for banks because of regulatory checks, and, as Bloomberg reports, this year, lenders are grappling with an official campaign to reduce the level of borrowing as well.

Wholesale funding costs climbed to the most expensive in history, and the 30-day Shanghai Interbank Offered Rate has jumped 51 basis points this month to the highest level in more than two years.

And this demand for liquidity comes as Chinese banks’ excess reserve ratio, a gauge of liquidity in the financial system, fell to 1.65 percent at the end of March, according to data from the China Banking Regulatory Commission. The index measures the money that lenders park at the PBOC above and beyond the mandatory reserve requirement, usually to draw risk-free interest.
“Major banks don’t have much extra funds, as is shown by the excess reserve data,” analysts at China Minsheng Banking Corp.’s research institute wrote in a June 5 note. Lenders have become increasingly reliant on wholesale funding and central bank loans this year, they said.

As The Wall Street Journal reports, an inverted yield curve defies common understanding that bonds requiring a longer commitment should compensate investors with a higher return. It usually reflects investor pessimism about a country’s long-term growth and inflation prospects.

“But the curve inversion we are seeing right now is one with Chinese characteristics and it’s different from the previous one in the U.S.,” said Deng Haiqing, chief economist at JZ Securities.

 

The current anomaly in the Chinese bond market is partly the result of mild inflation and expectations of a slowing economy, Mr. Deng said. “At the same time, short-term interest rates will likely stay elevated because the authorities will keep borrowing costs high so as to facilitate the deleveraging campaign,” he said.

Notably, it appears officials are concerned at the potential for fallout from this crisis situation.

In an article published Saturday, the central bank’s flagship newspaper, Financial News, said that the severe credit crunch four years ago won’t repeat itself this month because the central bank will keep liquidity conditions “not too loose but also not too tight.”

 

Chinese financial markets tend to be particularly jittery come June due to a seasonal surge of cash demand arising from corporate-tax payments and banks’ need to meet regulatory requirements on capital.

 

On Sunday, the official Xinhua News Agency ran a similar commentary that sought to stabilize markets expectations. “Don’t panic,” it urged investors.

Sounds like exactly the time to ‘panic’.

4. EUROPEAN AFFAIRS

How on earth could this happen; a fire destroyed an apartment building killing 6 and injuring many. Builders of the aprtment complex used flammable material and that caused the fire to spread like wild fire…

(courtesy zero hedge)

“The Fire Destroyed Everything, We Saw Them Dying”: Inferno Engulfs London Apartment Tower; At Least 6 Dead

At least six are dead and more than 64 injured, 20 of them critically, after a catastrophic fire at the 24-story Grenfell Tower in the Kensington area of London. A witness told Reuters she feared not all the residents had escaped the fire. Some were evacuated in their pyjamas.

As Reuters described the inferno, flames licked up the sides of the block in the north Kensington area as 200 firefighters, backed up by 40 fire engines, fought the blaze for hours. Plumes of black and gray smoke billowed high into the air over the British capital hours after the blaze broke out at the Grenfell Tower where several hundred people live.

“I looked through the spy hole and I could see smoke everywhere and the neighbors are all there. There’s a fireman shouting ‘get down the stairs’,” one of the block’s residents, Michael Paramasivan, told BBC radio. “It was an inferno.”

Residents rushed to escape through smoke-filled corridors in the housing block after being woken up by the smell of burning. Some said no fire alarm sounded. Witnesses said they saw trapped residents desperately shouting for help from windows on upper floors as flames enveloped the building.

“As we went past the fourth floor it was completely thick black smoke. As we’ve gone outside I’m looking up at the block and it was just going up. It was like pyrotechnics. It was just unbelievable how quick it was burning.”

London Fire Brigade said the fire engulfed all floors from the second to the top of the block which contained 130 apartments.

“In my 29 years of being a fire fighter, I have never ever seen anything of this scale,” London Fire Brigade Commissioner Dany Cotton told reporters

In a statement released moment ago, Commander Stuart Cundy of the Metropolitan Police said: “I can confirm six fatalities at this time but this figure is likely to rise during what will be a complex recovery operation over a number of days. Many others are receiving medical care.”

View image on Twitter

Metropolitan Police

@metpoliceuk

Latest statement re fire at . Call Casualty Bureau if concerned about a loved one or if they’ve been found safe 0800 0961 233

In an echo of a fire that engulfed a luxury tower in Dubai that occurred on New ‘ Eve in 2015, early reports suggest that the cladding material used in construction – the outer layer of covering on the building – was flammable, and allowed the flames to quickly spread to every floor of the building.

More than 200 firefighters and dozens of fire trucks and ambulances were called to the scene, according to the Associated Press. Buildings adjacent to the Grenfell Tower were evacuated by police and firefighters over fears that the flames could spread. London Fire Commissioner Dany Cotton calls the fire an “unprecedented incident” and says she has never seen anything on this scale in her 29-year career.

George Clarke, the presenter of “Amazing Spaces,” told Radio 5 Live he was covered in ash even though he was 100 meters (yards) from the scene. He said he saw people waving flashlights from the top levels of the building and saw rescuers “doing an incredible job” trying to get people out.

Authorities fully expect that the number of casualties will rise.

The fire erupted around midnight, and burned for more than nine hours.

At least one group has been warning about potential vulnerabilities at the high-rise. The Grenfell Action Group, a community organization formed to oppose a nearby redevelopment project, has been warning about the risk of fire there since 2013, the AP reported. The group says on its blog that it has raised concerns about testing and maintenance of firefighting equipment and blocked emergency access to the site.

One witness who spoke to AP says she saw a member of the public catch a baby that was dropped from the burning tower block in west London.

Samira Lamrani told Britain’s Press Association she saw a woman try to save the baby by dropping it from a window “on the ninth or 10th floor.”

She says “people were starting to appear at the windows, frantically banging and screaming. The windows were slightly ajar, a woman was gesturing that she was about to throw her baby and if somebody could catch her baby. “Somebody did, a gentleman ran forward and managed to grab the baby.”

London Mayor Sadiq Khan says questions need to be answered about tower blocks around the city following a devastating fire. Khan had been called to respond after reports that people had been advised in advance to remain in their flats in the event of fire. Khan says in a statement “there will be a great many questions over the coming days as to the cause of this tragedy and I want to reassure Londoners that we will get all the answers.”

The Guardian reported that residents repeatedly warned about the fire risk.

Michael Paramasivan, 37, a builder, lives on the seventh floor of the tower and managed to escape along with two roommates who escaped with him.

“I’ve lost absolutely everything,” he told the Guardian. “The most chilling moment was when I suddenly realised it was a fire.

“Between 1am and 1.30am, I was dozing in and out of sleep. I then smelled something. I got up and looked around to see if it was an electrical fault but there was nothing. Then I looked through the spyhole. There was smoke and people running past. We just ran straight out down the stairs.”

Paramasivan said the material on the outside of the building went up in flames rapidly. “It just went up like that,” he said, gesturing wildly. “There’s no fire alarms in the corridors, no sprinklers, nothing. There’s only smoke detectors in the flat and they didn’t go off.”

A live feed from the scene courtesy of RT

end

my goodness! the EU sues Poland, Hungary and the Czeck Republic for not accepting refugees

(courtesy zero hedge)

EU Sues Poland, Hungary And Czech Republic For Refusing To Accept Refugees

The European Commission has launched a legal case against Poland, Hungary and the Czech Republic, for refusing to take in asylum seekers, escalating a bitter feud within the 28-nation bloc about how to deal with the Pandora’s box opened up Angela Merkel’s 2015 “Open Door” policy (since shut).

The reason for Brussels’ ire is that the eurosceptic governments in Poland and Hungary refused to take in anyone under a plan agreed by a majority of EU leaders in 2015 to relocate migrants from frontline states Italy and Greece to help ease their burden. The Czech Republic initially accepted 12 people but has since said it would not welcome more. It is perhaps worth noting that the three countries are among the very few who have had virtually no terrorist attacks in the past two years.

At stake in the dispute is the bloc’s unity, already tested by Britain’s unprecedented decision to leave, weak economies and higher support for eurosceptic parties across the EU. Beyond its borders, the EU is also facing what it says is a “threat” from Russia and a foundering new relationship with President Donald Trump. But two years of arm-wrestling have so far produced no results and EU leaders are unlikely to be able to break the impasse when they discuss the matter next week in Brussels, according to Reuters.

In September 2015, EU ministers took up a plan to relocate over 100,000 migrants who have already reached the continent, throughout Europe. However, not all EU states have found the measures acceptable, saying that the migrant crisis cannot be solved through obligatory quotas. The Czech Republic, Romania, Slovakia and Hungary have staunchly opposed the plan. Despite warnings from Brussels, Budapest is determined to tighten its policy towards asylum seekers and carry on with its own border fence plan.

It all culminated yesterday, when Europe finally took legal action against the holdout states.

“I regret to see that, despite our repeated calls to pledge to relocate, the Czech Republic, Hungary, and Poland have not yet taken the necessary action,” the EU’s migration commissioner, Dimitris Avramopoulos, told a news conference cited by Reuters. He said the Commission was therefore launching so-called infringement procedures against the three, a way for the executive arm to take to task countries that fail to meet their obligations.

It opens the way for months, even years, of legal wrangling before a top EU court could potentially impose fines.

Earlier, in an statement the commission said that the three EU states have acted “in breach of their legal obligations,” adding that it had previously warned the countries to observe “their commitments to Greece, Italy and other member states.” The Czech Republic, Hungary, and Poland “have not yet taken the necessary action,” the statement says, claiming that the three EU members “have not yet relocated a single person.”

“Against this background… the Commission has decided to launch infringement procedures against these three Member States.” Since January, other countries within the bloc have relocated almost 10,300 people from Italy and Greece, according to the commission. “The pace of relocation has significantly increased,” it added, saying it has witnessed “a fivefold increase” compared to the same period last year. In total, nearly 21,000 asylum-seekers have been distributed throughout Europe, some 14,000 from Greece and the rest from Italy.

The prosecuted states were not amused.

From the political point of view, this action … unnecessarily heats up political tensions, of which there are already too many in the European Union,” Polish Deputy Foreign Minister Konrad Szymanski told state TV on Tuesday. He also called the 2015 plan “erroneous,” and argued that Warsaw contributes to solving the migrant crisis by “engaging in protection of EU’s external borders and systematically strengthening its humanitarian involvement in the region.”

“If necessary, Poland is ready to defend its legal arguments in court” he concluded.

“The Czech Republic does not agree with the system of relocation,” Prime Minister Bohuslav Sobotka said in response calling Brussels’ plan to deal with migrants “dysfunctional.”

With regard to the worsened security situation in Europe and dysfunctionality of the quota system, it will not participate in it. The European Commission blindly insists on pushing ahead with dysfunctional quotas which decreased citizens’ trust in EU abilities and pushed back working and conceptual solutions to the migration crisis.”

In a separate legal battle on the matter, Hungary and Slovakia have challenged the relocation agreement in a top EU court, with an initial indication of the ruling due next month.

The former Soviet satellite nations rightfully justify their stance on asylum seekers by citing security concerns, noting a series of militant Islamist attacks in western Europe since late 2015. The bulk of refugees come from the mainly Muslim Middle East and North Africa. Their resistance to what they present as pressure from Brussels also earns them credit with eurosceptic voters at home.

Many other EU states have also dragged their feet over taking in refugees, with fewer than 21,000 people relocated from Italy and Greece so far under a plan that had been due to cover 160,000 people. As a reminder, the EU has been using the Greek bank insolvency as leverage, forcing Greece to house “temporarily” thousands of refugees until a permanent place is found for them somewhere else. Needless to say, the process has ground to a halt.

Meanwhile, wealthier EU states including Italy – which is now the main gateway to Europe for African migrants and refugees – have threatened to reduce generous development funds earmarked to help the easterners close the gap in living standards.

* * *

The Commission is backed in the feud by Germany and Sweden, countries that took in most of the people who arrived in the EU; the two – together with France – have been hit by an unprecedented series of refugee terrorist attacks, usually by ISIS sympathizers.  Not surprisingly, Brussels’ confidence has been boosted by ardently pro-EU French President Emmanuel Macron’s victory over eurosceptics and nationalists, which gave the EU a renewed confidence a year after Brexit thrust it into an existential crisis.

But Avramopoulos said the timing of the decision came after the executive had been warning governments for months to change tack and had simply “exhausted all options” with the holdouts. An EU official said that despite its legal challenge, Slovakia had heeded the call to take in refugees and so escaped sanction.

After more than a million migrants and refugees reached the EU in 2015, mostly via Greece, Brussels sealed an accord with non EU-member Turkey that sharply cut the overall number of arrivals, though the deal was criticised by rights groups. Turkey has used the deal as a bargaining chip to obtain funding from Europe and allowed Erdogan to usurp effectively supreme power while arresting over 100,000 without as much as a peep from its “humanitarian” European neighbors.

Meanwhile, Italy remains under pressure, but the EU treats the vast majority of the 64,000 people who made it to Italian shores this year as migrants – rather than refugees requiring legal protection – and does not plan to let them stay, as Europe’s “open doors” are now mostly shut.

The internal EU dispute over relocating asylum-seekers is a political one about values, as Avramopoulos stressed in his renewed appeal to the easterners. “Europe is not only about requesting funds or ensuring security. Europe is also about sharing difficult moments and challenges,” he said.

For now, the “easterners” have told Brussels to shove it. It is unlikely this will change any time soon unless the EU imposes further pressure, which in turn threatens to tear apart the already fragile union.

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS 6 .GLOBAL ISSUES

CANADA/SEARS

The bricks and mortar retail apocalypse moves north into Canada as Sears Canada admits that it’s future is dim

(courtesy zero hedge)

‘Retail Apocalypse’ Moves North As Sears Canada Admits Its Future Is In “Serious Doubt”

The retail apocalypse that has caused the closing of thousands of department stores in the US – not to mention the evaporation of tens of billions of dollars in market capitalization – is moving north: Sears Canada revealed Tuesday that it’s exploring a sale or a possible restructuring as it draws nearer to bankruptcy. In an admission that shouldn’t come as a surprise to anyone who has ever shopped online, Sears Canada said it has “significant doubt” that it can continue to operate for much longer. Meanwhile, its American counterpart announced that it would lay off 400 employees as part of an initiative to produce $1.25 billion in savings after admitting back in March that the future of its business is also in serious jeopardy, as Fortune reported.

Sears Canada’s shares slid as much as 40% on the news.

“The company continues to face a very challenging environment with recurring operating losses and negative cash flows from operating activities in the last five fiscal years, with net losses beginning in 2014,” the company said, according to the Financial Post.

Sales at Sears Canada have fallen sharply since it was spun off from its equally-troubled US-based parent in 2012; the slump coincides with a broader shift in consumer preferences away from brick and mortar retailers and toward e-commerce.

Shares of some of the biggest department and big-box stores have seen double-digit declines this year against the backdrop of a broader market rally. Macy’s, J.C. Penney, Sears and Dick’s Sporting Goods. Meanwhile, Amazon briefly climbed above $1,000.

Department stores were slow to develop strong e-commerce platforms, leaving Amazon to dominate a segment of the market that’s seeing double-digit annual growth. Amazon’s share of the US e-commerce market rose to 43% this year, and its shares briefly climbed above the $1,000 threshold. Ignoring the fact that corporate mismanagement has more or less defined the Sears brand in recent years, Sears Holdings PR team assures readers that – in the grand scheme of things – the cuts to its workforce really aren’t all that significant.

“While the total number of people who are directly affected represents a small fraction of our total headcount, we are conscious of the impact on individual employees,” Sears said.

Those workers who are being handed pink slips can hopefully find solace knowing that the retailer has promised that it will continue to take “all necessary action” to achieve profitability – short of cutting the pay of Eddie Lambert, the company’s CEO, chairman and largest shareholder.

Lambert, as USA Today reported back in March, has extracted “significant value” from the company in recent months, and stands to profit further if the company goes belly up.

Although in a sense, Lambert has already taken a pay cut: Sears’ stock has shed more than 41% over the past 12 months, and is down 25% year to date as well. However, Lambert has managed to protect his investment in Sears – or what’s left of it – from the seemingly inevitable bankruptcy that stands to wipe out the other shareholders – American retirees, to the extent that Vanguard and State Street both own large stakes.

If Sears goes bankrupt, Lambert loses his equity stake, but he remains the company’s principal creditor. Already, Lampert has effectively laid claim to enormous amounts of the company’s assets through loans he’s made. His hedge fund, ESL Investments, also owns large stakes in Lands’ End and a Real Estate Investment Trust that gained control of some of Sears’ best properties in a $2.8 billion deal back in 2015, then leased them back to the company. Lambert owns a stake in that vehicle, too.

In other words, while Sears was floundering, Lambert was busy shielding himself from the worst of the fallout. His former employees will need to make due with the public safety net.

end

7. OIL ISSUES

Oil drops after another increase in crude and gasoline inventories

(courtesy zerohedge)

WTI/RBOB Slump After Another Shocking Crude & Gasoline Inventory Build

Following last week’s surprising builds (which sent WTI/RBOB prices lower), API reported another big crude build (+2.75mm vs an expected draw of 2.45mm) and surprise gasoline build. Crude and Gasoline futures prices immediately gave up the day’s gains.

 

API

  • Crude +2.75mm (-2.45mm exp)
  • Cushing -833k
  • Gasoline +1.794mm (-1.15mm exp)
  • Distillates -1.451mm

Last week’s surprise builds in crude, gasoline, and distillates upset the OPEC narrative of movement towards rebalancing and tonight’s API data further weakens that case…

 

WTI topped $46 in the day session ahead of the API print, but as the data hit, both saw significant selling pressure…

 

As Bloomberg noted prior to the data, “people feel like the inventory report should be at least moderately bullish, but they don’t want to bet the farm on that,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, says by phone. “It is the time of year when you expect inventory draws and high gasoline demand. Gasoline demand last week was not robust to put it lightly.”

end

Then oil moves into the 44 dollar handle

(courtesy zero hedge)

WTI Plunges To $44 Handle After Inventory & Demand Disappointment

After tumbling last night following API’s surprise builds, WTI/RBOB levitated on a weak dollar into the DOE print but initialy kneejerked lower on the data which showed a smaller than expected crude draw and confirmed another significant gasoline build. After a small drop last week, crude production rose once again to cycle highs.

API

  • Crude +2.75mm (-2.45mm exp)
  • Cushing -833k
  • Gasoline +1.794mm (-1.15mm exp)
  • Distillates -1.451mm

DOE

  • Crude -1.66mm (-2.45mm exp)
  • Cushing -1.156mm (-1.4mm exp)
  • Gasoline +2.096mm (-1.15mm exp)
  • Distillates +328k (+550k exp)

Last night’s surprise build in crude was not confirmed (but the DOE data showed a smaller than expected draw). Cushing stockpiles fall to the lowest level of the year, dropping more than a million barrels for a second week. The total is now 62.2 million barrels, plenty of room in the tanks there. However, Gasoline inventories rose once again…

 

After a modest drop in production in the Lower 48 last week, US crude production rose once again this week to its cycle highs…

 

As Bloomberg’s Laura Blewitt notes, Gasoline demand dropped for the second week in a row after hitting a record-high 9.822 million barrels a day, according to the one-week preliminary data. With another build in stockpiles reported, gasoline futures are down to the lowest levels since November.

 

WTI/RBOB prices rallied into the print this morning on the back of a dramatically weaker dollar but once the data printed, selling began…

 

WTI just hit a $44 handle – the lowest since early May…

END

 

8. EMERGING MARKET

More Anti Government protests in Venezuela

(courtesy zero hedge)

Dramatic Images From 3 Months Of Deadly Anti-Government Protests In Venezuela

Violence in Venezuela, South America’s crumbling socialists paradise, is intensifying as street clashes between anti-government protesters and government forces enter their third month. At least 67 people have died since the demonstrations began, including 18-year-old Armando Canizales, who the New York Times described as a “success story of Venezuela’s state-run music program for the poor.”

As the country’s economic and humanitarian crises worsen, President Nicolas Maduro is taking steps to consolidate power within the presidency. Maduro is now calling for the formation of a new “constituent assembly” that the country’s pro-government electoral council will vote on in July that will allow him to rewrite the country’s constitution before he faces an election in the fall. These decisions effectively guarantee that the violence will continue, as the opposition cries for his ouster.

The economic troubles – exacerbated by (but not initiated by) the drop in oil prices that began during the summer of 2014 – have caused inflation to soar above 10,000% as Venezuela’s currency, the bolivar, trades at a black-market rate of nearly 8,000 to the dollar, according to dolartoday.com. Meanwhile, the central bank’s foreign currency reserves have dwindled to $10.6 billion.

Venezuela, a member of OPEC, has the largest oil reserves of any nation on Earth. But OPEC’s fragile production cuts have failed to push the price of crude above $50 a barrel. On Tuesday, it announced that an unexpected surge in production by Iraq raised the bloc’s total production in May, validating the market’s doubts about an agreement between the bloc and a handful of other oil-exporting countries to extend a production cut that began in December. With global oil supplies near record highs, the hoped-for recovery in oil prices – key to alleviating Venezuela’s acute financial stress – is a long way off.

Photos from the daily clashes depict a level of violence that has long since become normal.

An opposition demonstrator wears a gas mask in a clash with police in Caracas.

Riot police officers confront opposition activists during a demonstration in Caracas.

Employees of the administration headquarters of the Supreme Court of Justice try to put out the fire of a burning vehicle.

Deputy of the opposition Carlos Paparoni is hit by jets of water during riots at a march to the state Ombudsman’s office.

Venezuelan opposition activists launch a firework with a tube during clashes with riot police.

 

A demonstrator throws a Molotov cocktail during a rally.

 

A demonstrator shows an injury caused by a rubber bullet.

 

Demonstrators look on as motorcycles belonging to riot security forces are set on fire.

See more images here (courtesy of The Atlantic).

end

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:00 am

Euro/USA   1.1203 DOWN .0006/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA RAISING INTEREST RATES/EUROPE BOURSES ALL IN THE GREEN 

USA/JAPAN YEN 110.28 UP 0.217(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2731 DOWN .0027 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT

USA/CAN 1.3217 DOWN .0024 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS WEDNESDAY morning in Europe, the Euro FELL by 6 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1203; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  DOWN 23.07 POINTS OR 0.75%     / Hang Sang  CLOSED UP 23.80 POINTS OR 0.09% /AUSTRALIA  CLOSED UP 1.04% / EUROPEAN BOURSES OPENED ALL IN THE GREEN 

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this WEDNESDAY morning CLOSED DOWN 15.23 POINTS OR 0.08%

Trading from Europe and Asia:
1. Europe stocks  OPENED ALL IN THE GREEN

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 23.80 POINTS OR 0.09%  / SHANGHAI CLOSED DOWN 23.07 POINTS OR 0.73%   /Australia BOURSE CLOSED UP 1.04% /Nikkei (Japan)CLOSED DOWN 15.23 POINTS OR 0.08%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1266.95

silver:$16.95

Early WEDNESDAY morning USA 10 year bond yield: 2.197% !!! UP 1 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.852, DOWN 1  IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 97.05 UP 8  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 2.849%  DOWN 10 in basis point(s) yield from TUESDAY 

JAPANESE BOND YIELD: +.07%  UP 1/2  in   basis point yield from TUESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.382%  DOWN 5 IN basis point yield from TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.939 DOWN 5   POINTS  in basis point yield from TUESDAY 

the Italian 10 yr bond yield is trading 46 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.226% DOWN 4 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

Closing currency crosses for WEDNESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM 

Euro/USA 1.1277 UP .0068 (Euro UP 68 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 109.14 DOWN  0.920 (Yen UP 92 basis points/ 

Great Britain/USA 1.2804 UP 56 ( POUND UP 56 basis points) 

USA/Canada 1.3211 DOWN .0030 (Canadian dollar UP 30 basis points AS OIL FELL TO $44.65

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 68 basis points to trade at 1.1277

The Yen ROSE to 109.14 for a GAIN of 92  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 56  basis points, trading at 1.2804/ 

The Canadian dollar ROSE by 30 basis points to 1.3211,  WITH WTI OIL FALLING TO :  $44.65

The USA/Yuan closed at 6.7917/ the 10 yr Japanese bond yield closed at +.07% UP 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 9 IN basis points from TUESDAY at 2.117% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.771  DOWN 9  in basis points on the day /

Your closing USA dollar index, 96.45 DOWN 53 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for WEDNESDAY: 1:00 PM EST

London:  CLOSED DOWN 26.04 POINTS OR 0.35%
German Dax :CLOSED UP 106.30 POINTS OR 0.96%
Paris Cac  CLOSED DOWN 18.45 POINTS OR 0.35% 
Spain IBEX CLOSED  DOWN  106.30 POINTS OR 0.96%

Italian MIB: CLOSED  DOWN 128.23 POINTS/OR 0.61%

The Dow closed UP 46.09 OR 0.22%

NASDAQ WAS closed DOWN 25.48 POINTS OR 0.41%  4.00 PM EST
WTI Oil price;  44.65 at 1:00 pm; 

Brent Oil: 46.90 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.19 DOWN 19/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES T0  +0.224%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$44.73

BRENT: $46.99

USA 10 YR BOND YIELD: 2.123%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.767%

EURO/USA DOLLAR CROSS:  1.1216 UP .0007

USA/JAPANESE YEN:109.56  DOWN 0.509

USA DOLLAR INDEX: 96.92  DOWN 6  cent(s) ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2751 : UP 3 POINTS FROM last NIGHT  

Canadian dollar: 1.3228 UP 12  BASIS pts 

German 10 yr bond yield at 5 pm: +0.224%

END

And now your more important USA stories which will influence the price of gold/silver TRADING IN GRAPH FORM FOR THE DAY Banks Best, Tech Trounced As ‘Hawkish’ Fed Flattens Yield Curve Most Since Brexit

Economic data at 2-year lows, rate hikes, and hawkish outlook…  yield curve crash, FANG (growth) plunge, and Gold down…

 

First things first – today’s macro data was an utter disaster and smashed Citi Surprise Index to its lowest in 2 years...

 

The post-FOMC fallout shows financials outperforming and tech tanking… Gold was the worst performer…

 

The Dow managed to close green today (thanks to GS, HD, and TRV)…

 

VIX broke above 11 early on but was crushed back below to ensure a ramp as ETFs rebalanced…

 

Bad data sent traders back into the ‘buy growth, sell value’ mode but then when The Fed statement hit ‘growth’ was dumped… but once Yellen started wrapping up and promised (once again) that disinflation was transitory, then growth and value ripped…

 

FANG Stocks were slammed (after touching the 61.8% retracement of the Friday/Monday plunge)

 

Treasury yields tumbled across the curve…

 

The yield curve (2s10s) collapsed to 79bps…

Almost at its flattest since 2007…

 

And 2s30s crashed by the most since Brexit…

Yeah this happened…

 

The Dollar Index had quite a day – big plunge on terrible data early on then raging bull as Yellen began to speak…

 

Gold slipped after The Fed (as per script) retracing the gains after the early dismal data dump…

 

Silver’s morning ramp tagged its 50DMA and then dumped on FOMC…

 

WTI and RBOB plunged after another DOE report showed surprise inventory builds (and weak demand)…

 

Finally, there’s this… Get back to work Mrs.Yellen…

 

 

END

Today’s early trading right after CPI and retail sales were announced:

(ZEROHEDGE)

“Brutal Price Action” – Bonds & Bullion Surge, Dollar Dumps After Dismal Data Deluge

Disappointing inflation and retail sales data has sparked a surge in safe-haven demand for bonds and bullion, and left stocks confused this morning ahead of The Fed statement and press conference this afternoon…

A disastrous morning for US macro data – and yet we are assured by The Fed that a hike is overdue and everything is awesome…

 

It’s not!

 

Gold and Bonds are well bid…

 

Pushing 10Y yield to its lowest since Nov 10th…

 

And Nasdaq jumped on the dovish-inspiring data dump…

 

USD has been hit with a double whammy, with both retail sales and inflation firmly weak. Price action has been rather brutal, most notably in fixed income. The whole treasuries curve has been hit, with US 2y yields slipping from 1.35 to the 1.31 handle. US 5y yields have similarly slipped to just 1.723%. The spillover has been felt in Europe too.

The move has been echoed in FX. USDJPY is down 70 pips to 109.60 while EURUSD is up almost 50 pips to 1.1250. USDCHF has entirely retraced earlier gains and G10 commodity currencies have found a further bid – AUDUSD is now at 0.7600 while NZDUSD trades at 0.7273. NOK and SEK are also finding bids here. Even GBP is managing to pick itself up, all things considered.

USDJPY at 2mo lows…

 

The Dollar Index has crashed to the lowest since October 3rd… Today’s drop is the biggest since The Fed hiked rates in March.

This price action might continue into the FOMC – the weakness of the data is hard to argue with.

 

end

 

 

Jeff Sessions did a terrific job yesterday deflecting collusion accusations and calling them appalling and a detestable lie. That did not stop the democrats trying to create the impression that Trump et al allied with Russian operatives  to steal the USA election.

(courtesy zero hedge)

AG Sessions Blasts Russian Collusion Accusations As “Appalling And Detestable Lie”

After yet another 2+ hour public hearing before the Senate Intelligence Committee on alleged collusion between members of the Trump campaign and Russian spies, we are still no closer to anyone providing a shred of tangible evidence as to the validity of such claims despite Democrats and the mainstream media dedicating virtually every waking moment to the express pursuit of such evidence.  That said, it all makes for great, and never ending, political theater and below are the highlights from today’s episode of the continuing insanity.

Sessions set an aggressive tone for the hearing by preemptively stating during his opening remarks that “any suggestion I participated in or was aware of collusion with the Russians is an appalling and detestable lie.”

“Let me state this clearly, colleagues, I have never met with or had any conversation with any Russians or any foreign officials concerning any type of interference with any campaign or election in the United States, further I have no knowledge of any such conversations by anyone connected to the Trump campaign… any suggestion I participated in or was aware of collusion with the Russians is an appalling and detestable lie.” 

 

But perhaps no one did a better job of thoroughly dismantling the “Russian collusion” narrative than Senator Tom Cotton who pointed out, as have we on multiple occasions, that no one, including James Comey, has seen a single shred of evidence to suggest that Trump or any of his associates colluded with Russian spies to steal emails from Hillary Clinton or the DNC and/or to generally stage a coup in the United States.

“The very simple question that should be asked is ‘did Donald Trump or any of his associates in the campaign collude with Russia in hacking those emails and releasing them to the public.” 

 

“That’s where we started six months ago.  We’ve now heard from 6 of the 8 democrats on this committee and, to my knowledge, I don’t think a single one of them asked that question. They’ve gone down lots of other rabbit trails, but not that question.”

 

“Maybe, that is because Jim Comey said last week, as he’s said to Donald Trump, that on three occasions he assured him he was not under investigation.  Maybe it’s because multiple democrats on this committee have stated that they’ve seen no evidence thus far, after six month of our investigation, and 11 months of an FBI investigation, of any such collusion.”

Cotton went on to compare the efforts that would have to be undertaken by the Trump administration to pull off the conspiracy alleged by the Left and mainstream media to a Jason Bourne movie.

 

On the topic of whether he ever met with Russian Ambassador Kislyak at the Mayflower Hotel, Sessions confirmed that Kislyak was present for the Trump speech and wouldn’t rule out short, public exchange of pleasantries, though he had no recollection of such an encounter, but he did definitively confirm that he did not have any private conversations with Kislyak at the event.

 

Sessions did get testy with Senator Wyden at one point when questioned about Comey’s testimony last week that he expected Sessions to recuse himself earlier than he ultimately did.  Those suggestions by Comey have since resulted in wild media speculation over whether Comey was in possession of undisclosed information that would link Sessions directly to the Russian interference investigation.

 

Multiple democrats on the panel, including Senator Heinrich, accused Sessions of “impeding this investigation” by refusing to discuss the details of conversations he may or may not have had with the President….though they all seemingly forgot that time that Eric Holder was held in contempt of Congress for refusing to comply with an investigation into the “Fast and Furious” gun running scandal.

 

On whether he lingered outside the oval office while President Trump spoke to Comey alone because he thought it was inappropriate:

Didn’t seem to me to be a major problem….I knew Comey…could handle himself well.”

 

Last week former FBI Director Comey testified that Sessions refused to respond when Comey approached him about not wanting to have direct 1-on-1 conversation with President trump.  Sessions directly refuted that testimony by saying the following:

“I believe it was the next day that he expressed concern about being left alone with the President.  That in itself is not problematic.  He did not tell me, at that time, any details about anything that was said that was improper.”

 

“I affirmed his concern that we should be following the proper guidelines of the Department of Justice and basically backed him up in his concerns and that he should not carry on any conversations with the President, or anyone else, about an investigation in a way that was not proper.”

 

Of course, as Senator Mark Warner promised at the outset of today’s hearing we’re undoubtedly still in the early innings of the mass hysteria on this topic and will have the unfortunate pleasure of many more upcoming hearings where wild accusations will be tossed around all while no new facts are ever revealed.

END

 

All eyes were on the CPI report and it was hoped that inflation would rip higher and instead it dropped .1%.  This will no doubt cause the Fed to stop raising rates as the economy is coming to a complete halt

(courtesy zerohedge)

Consumer Price Growth Plunges To 27-Month Lows As Shelter Inflation Rolls Over

Following a hotter than expected Core PPI, all eyes were on today’s Consumer Price data (as RBC noted is more important for The Fed than PPI) which gravely disappointed the inflation-hoping crowd. Core PPI printed +1.7% (worse than expected 1.9%) and the weakest growth since Feb 2015.

May 2014 was the last time that Core PPI (Ex Food and Energy) was this high…With goods prices dropping but services rising.

 

But Consumer Price growth is plunging…Headline CPI dropped 0.1% MoM in May

Headline CPI slowed from 2.2% YoY to 1.9% YoY (also missing expectations).

There is a silver lining for Americans though (which The Fed will hate)… Shelter inflation is rolling over…

 

As RBC warned overnight, if CPI comes in ‘soft,’ will crystalize “slow-flation” and may see consensus begin shifting to a Fed ‘one and done over balance of 2017’ view.

The inflation disappointment would see rates again grind lower, while equities trade will revert – back to the prior YTD status quo ‘risk barbell’ trade: long ‘Secular Growth’ and ‘Defensives,’ short ‘Cyclicals’ – as if Thursday, Friday and Monday didn’t happen

 

 

end

 

 

The first data point  (above) was lower than expected inflation.  Then they released another important data point: retail sales and it tumbled .3% month over month the biggest drop since Jan 2016.  The USA economy is grinding to a halt.

(courtesy zerohedge)

Retail Sales Tumble Most Since January 2016 As Gasoline, Electronics Sales Slump

This is not supposed to happen…

Headline retail sales tumbled 0.3% MoM in May, the biggest drop since January 2016 (and all the weather-related malarkey that was blamed on).

Core retail sales also dropped the same…

Retail sales less autos fell 0.3% in May, notably worse than the expectation of a 0.1% rise.

  • Retail sales forecast range -0.3% to 0.3% from 79 economists surveyed
  • Retail sales rose 0.4% in April
  • Retail sales fell to $473.808b in May vs $475.009b in April
  • Retail sales ex-auto dealers, building materials and gasoline stations unchanged in May
  • Retail sales ‘control group’ unchanged m/m in May

The breakdown show a big tumble in Electronics and appliance stores, along with gasoline prices.

 

This is the weakest YoY retail sales growth since the election and continues to signal that despite record high stock market indices, all is not at all well in ‘Murica.

end

 

Business inventories tumble badly in April on all two fronts:  Wholesale and Retail.  Manufacturing inventory rose a tiny fraction. This will without a doubt lower 2nd quarter GDP considerably

(courtesy zero hedge)

Q2 GDP In Trouble As Business Inventories Tumble In April

Adding further pain to Q2 GDP hope, April Business Inventories tumbled 0.2% MoM in April (following Wholesale Inventories decline). This is the biggest drop since November 2015.

  • Manufacturers inventories rose 0.1% m/m in April after rising 0.2% prior month
  • Wholesalers inventories fell 0.5% m/m in April after rising 0.1% prior month
  • Retailers inventories fell 0.2% m/m in April after rising 0.2% prior month

The November spike in inventories is now long gone…

 

Inventories-to-Sales stagnated in April but remain in a recession-signalling mode…

end

 

The auto sector is in complete shambles as now the big auto companies extend plant shutdowns because of increasing inventory.  The

subprime auto loans together with lower used car prices are causing havoc to the industry

(courtesy zero hedge)

 

GM Extends Plant Shutdowns As Toxic Trifecta For Auto Loans Fuels Carmageddon

In yet another unsurprising headline, The Wall Street Journal reports that GM will extend the typical summer shutdown at certain U.S. factories to deal with slumping sales and bloated inventory, a sign the industry’s hot streak is grinding to a halt.

The No. 1 U.S. auto maker in terms of sales will idle its Chevrolet Malibu factory near Kansas City for five weeks starting in late June, Vicky Hale, president of the United Auto Workers Local 31, said. Job cuts will be needed if GM is forced to slow assembly-line speeds when those workers return.

 

Additional downtime is also slated in Lordstown, Ohio, a small-car factory already stung by deep layoffs related to a pullback in demand for passenger cars. A GM spokesman declined to comment on specific plans.

 

GM enters the summer with a glut of unsold inventory after running production lines at relatively high rates to prepare for factory downtime related to plant upgrades. WardsAuto.com estimates GM’s production increased 2.9% over the first four months of 2017, even as the broader industry pulled back.

 

As a result, GM’s inventory spiked 43.5% at end of May compared with the prior year. It has nearly 1 million vehicles sitting on dealer lots, WardsAuto.com estimates, representing 101 days’ worth of supply, or 23.4% of total industry stock.

Here is what GM’s auto inventory since emergency from bankruptcy looks like.

Will this time the GM inventory cycle indicator be different? With widespread operating shutdowns planned in the coming weeks, it better be, or else something is far more broken with the US consumer than even the paltry 0.7% GDP would suggest.

And as WolfStreet.com’s Wold Richter explains below, it is not about to get any better.

Subprime Auto-Loan Backed Securities from 2015 on track to be Worst Ever.

Institutional investors that manage other people’s money grabbed subprime auto-loan backed securities because of their slightly higher yields. These bonds are backed by subprime auto loans that have been sliced and diced and repackaged and stamped with high credit ratings. But those issued in 2015 may end up the worst performing ever in the history of auto-loan securitizations, Fitch warned.

And then there are those issued in 2016. They haven’t had time to curdle.

The 2015 vintage that Fitch rates is now experiencing cumulative net losses projected to reach 15%, exceeding the peak loss rates during the Financial Crisis.

Fitch Ratings’ Auto Loan Annualized Net Loss Index shows the strong seasonality, with either May or June forming the low point each year and the winter months forming the peaks. A terrible trend took off in 2014. The winter peak last year occurred in November with a net annualized loss of 10.9%. The latest data point is for April, at 7.8%, up from 7.4% last year. The index peaked in February 2009 at 13.1%. The trend is pointing that way (via Fitch Ratings ABS):

Fitch analysts Hylton Heard and John Bella Jr. wrote in the report, cited by Bloomberg:

The 2015 vintage has been prone to high loss severity from a weaker wholesale market and little-to-no equity in loan contracts at default due to extended-term lending, a trend which was not as apparent in the recessionary vintages.

So let’s see.

Negative equity hits all-time record. The average negative equity in vehicles that were traded in for new vehicles during Q1 2017 has reached $5,195 per trade, the highest ever, according to Edmunds data, cited by AutoWeek. The percentage of trade-ins with negative equity has surged to 32.8%, also the highest ever! Average negative equity exceeded $4,000 in Q3 2013 and hasn’t looked back.

This negative equity in the trade is then rolled into the new loan, thus increasing the negative equity in that vehicle from the first second, which sends net losses soaring in the event of default.

Why is negative equity such a growing phenomenon? Because of the toxic trifecta in the auto industry, now happening.

Lengthening loan terms. The average new-vehicle loan term in Q1 2017 reached a record of 69 months, up from 64 months in 2011, according to Edmunds data. Terms between 73 and 84 months (7 years!) accounted for a record of 32.1% of all new-vehicle loans in Q4 2016, up from 29% a year earlier. Among used-vehicle loans, they accounted for 18%, up from 16% a year earlier. The value of a new vehicle declines sharply over the first few years. But the loan doesn’t amortize at this pace and doesn’t catch up with the dropping value of the vehicle until the later stages of the loan. As many consumers like to get a new vehicle every few years, these longer terms add to the negative equity at trade-in time.

 

Rising transaction prices. Vehicle prices have surged in general. And consumers buy more expensive models because low interest rates and longer loan terms make this possible by keeping the payments down.

 

Falling used-vehicle values. The seasonally adjusted Used Vehicle Price Index by J.D. Power Valuation Services (formerly NADA Used Car Guide) in May has declined for the 10th month in a row, now down over 13% from its peak in mid-2014 and at the lowest level since September 2010 [Used Vehicle Trade-in Values Sink, Hit New Vehicle Sales].

These factors, along with aggressive lending, propelled new vehicle sales to new records in 2015 and (barely) in 2016. But now the blowback has started. The net effect going forward translates into greater losses for lenders and investors in case of default after the car is repossessed and sold, and ultimately – now happening – lower sales for automakers.

Fitch isn’t alone in warning about soaring defaults and net losses of subprime auto-loan backed securities. Moody’s also warned. And S&P Global Ratings pointed out recently that net losses even on prime auto-loan backed securities have risen at the fastest pace since 2008.

For now, downgrades of subprime auto-loan backed securities are still modest. Ratings agencies cite structural enhancements, such as the slices that take the first loss and that have been retained by the lender. Investors that bought the highly rated slices might be spared initial losses. If losses continue to surge, even highly rated slices are starting to take losses.

But auto lenders that sold the subprime securities are starting to get hit. Fitch warns particularly about those that have sprung up since the Financial Crisis and have specialized in subprime auto loans, using looser underwriting standards. Lending by these weakly capitalized lenders has grown at magnificent rates in recent years. Some of those lenders have specialized in “deep-subprime” auto loans. And those lenders might be at risk.

And at least one of them, Santander Consumer USA, the top subprime auto lender in the US, verified income on only 8% of the loans, according to Moody’s. So here we go again. Read… Liar Loans Dog Subprime Auto-Loan-Backed Securities

end

 

Not a good sign for Q2 GDP.

end

 

Last night in anticipation of a dovish rate hike!

 

The scenario last night was for today’s hike being a dovish hike.  Now that the Fed received a slap in the face with a drop in inflation and also a drop in inflation expectations we will probably see only one hike and it is done!

 

(courtesy zero hedge)

  “The Day Of The Dovish Hike?”

The paradox continues: on one hand stocks continue to anticipate a reflating economy, with S&P futures hitting a new all time high overnight; on the other hand, the weaker dollar and especially Treasury yields are increasingly worried that today’s rate hike, the 4th in the past decade, will be another policy error, leading to more curve flattening and eventually a deflationary outcome.

And while there is little doubt Yellen will hike today as Goldman, and consensus, expect, the question is what the future pace of rate hikes will look like and whether the recent disappointing CPI prints will mean and “one and done” for the rest of the year from the Fed. While there is some possibility of an unexpectedly hawkish statement from the FOMC, especially if the Fed is worried about an asset price bubble, it is far more likely that today’s announcement will be yet another “dovish hike”, which is what SocGen’s Kit Juckes previews in his latest overnight note.

Here is SocGen with “The day of the dovish hike?”

At 2.21%, US 10year yields are firmly in the low end of the 2017 range, while at 1.35%, 2s are very close to the highs. The Treasury market is convinced the Fed will hike today, but not convinced about the longer term. Yesterday’s NFIB small business survey was just one of the data points to underline why the market is so perplexed. The response on ‘jobs hard to fill’ is at 34%, the highest level since December 2000. But we can all see the lack of wage growth, which used, once upon a time, to correlate pretty well with this survey. Hence the call from the likes of ex-Minneapolis Fed head Naranya Kocherlakota for the Fed’s inflation target to be raised; at the same time as 10year breakeven inflation rates on TIIPs fall to 1.78%, their lowest level since 8 November.

 

 

The FOMC’s response is likely to be a ‘dovish hike’ and that’s priced in, to a large degree. Uncertain about how much slack there is in the economy or the labour market, FOCM members are inclined to want to ‘normalise’ rates while they have the chance, but they seem very pragmatic about the longer-term outlook.

 

So more likely to raise rates now, without overlay hawkish commentary, and then lay the groundwork for another hike in the autumn if markets don’t take fright in the weeks ahead. That could leave yields in their range, the hunt for carry intact. Obviously, since this is to some degree what the market expects, the converse is also true – a ‘hawkish hike’ would come as a big surprise and unsettle higher-yielding currencies.

 

 

end

And she delivered a “dovish hike”

(courtesy zero hedge)

 

 

FOMC Delivers “Dovish Hike”, Lays Out Plans For Balance-Sheet Unwind

In the most well-telegraphed, ‘never in doubt, no matter how bad the economic data is’ FOMC Statement ever, The Fed hiked rates by 25bps and maintained its rate-hike trajectory forecast, shrugging off the collapse in economic data (including weak inflation). The market was anticipating a so-called ‘dovish hike’ and The Fed delivered to some extent by saying it is “monitoring” inflation (and dropped the word ‘transitory’) and also offered more detailed plans of the balance sheet unwind (beginning this year).

Interesting hedgeing against the chance of a “no rate hike” was “aggressive” today in Fed Funds Futures.

Here are the headlines.

  • *FED RAISES RATES, MAINTAINS FORECAST FOR ONE MORE HIKE IN 2017
  • *FED SAYS IT’S `MONITORING INFLATION DEVELOPMENTS CLOSELY’
  • *FED SAYS KASHKARI DISSENTS IN FAVOR OF KEEPING RATES ON HOLD
  • *FED SAYS IT EXPECTS TO START SHRINKING BALANCE SHEET THIS YEAR
  • *FED MAINTAINS BALANCE SHEET REINVESTMENT, LAYS OUT UNWIND PLAN

Key highlights from the Fed’s forecast, first the change in dots, which dipped on the long-end:

  • 2017 1.375% (range 1.125% to 1.625%); prior 1.375%
  • 2018 2.125% (range 1.125% to 3.125%); prior 2.125%
  • 2019 2.938% (range 1.125% to 4.125%); prior 3.000%

On inflation: the key lines:

  • “Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term.”
  • “Near term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.

The FOMC’s inflation forecast dropped by 0.2%:

  • Median 2017 core pce inflation 1.7% vs 1.9% march est.
  • Median 2017 core pce inflation 1.7% vs 1.9% march est.

On the Fed Funds rate:

  • Median federal funds est. 1.4% end-2017, unch vs march
  • Median federal funds est. 2.1% end-2018, unch vs march
  • Median federal funds est. 2.9% end-2019 vs 3% in march

The other forecasts:

  • Longer-run median unemployment rate 4.6% compares to previous forecast of 4.7% at March 15, 2017 meeting
    • 2017 median jobless rate at 4.3% vs 4.5%
    • 2018 median jobless rate at 4.2% vs 4.5%
    • 2019 median jobless rate at 4.2% vs 4.5%
  • Longer-run real GDP median projection of 1.8% compares to previous forecast of 1.8%
    • 2017 median GDP growth 2.2% vs 2.1%
    • 2018 median GDP growth 2.1% vs 2.1%
    • 2019 median GDP growth 1.9% vs 1.9%
  • Longer run PCE inflation median at 2.0% compares to previous forecast of 2.0%
    • 2017 median PCE inflation 1.6% vs 1.9%
    • 2018 median PCE inflation 2.0% vs 2.0%
    • 2019 median PCE inflation 2.0% vs 2.0%
    • 2017 median core PCE inflation 1.7% vs 1.9%
    • 2018 median core PCE inflation 2.0% vs 2.0%
    • 2019 median core PCE inflation 2.0% vs 2.0%

Some other observations:

  • Fed says it’s ‘monitoring inflation developments closely’
  • Fed raises target range for federal funds rate to 1%-1.25%
  • Fed: labor mkt continued to strengthen, job gains moderated
  • Fed: economic activity rising moderately, spending picked up
  • Fed says balance-sheet rolloff caps would start at $10b/month

*  *  *

Here is Neil Dutta of Renaissance Macro explaining what he think is the highlight:

The main development in the statement is that they are “monitoring inflation developments closely” in the second paragraph. In our view, this means they are not going to follow through on hikes if core inflation continues to disappoint.

* * *

Meanwhile, the fallacy of Fed data-dependence is exposed…

And the yield curve has collapsed in policy-error-style…

As of last night, the market was pricing 1.48 rate hikes in 2017 (including today), heading into the print, it was anticipating just 1.28 rate hikes (including today) following the dismal data this morning…

*  *  *

Full FOMC Statement redline below…

 

end

And now the unwinding of bond purchases.  there is no way that they will be able to do thus unless they collapse the economy

(courtesy zero hedge)

The Fed’s Balance Sheet Reduction Schedule, In Yellen’s Words by Tyler Durden Jun 14, 2017 2:55 PM 2 SHARES

Earlier, we laid out how, in theory, the Fed’s balance sheet unwind plan will work according to the FOMC: the Fed will trim reinvestments in TSYs at a rate of $6Bn/month initially, and MBS at $4Bn/month, or a total of $10bn/month, and will increase the reinvestment caps in steps of $10bn ($6TSY+$4MBS) at 3 month intervals over 12 months until it reaches a total 50bn per month.

Shortly thereafter Yellen confirmed that the Fed expects to implement a balance sheet reduction plan this year; not just announce it, suggesting either a September or December taper start, unless something “changes” of course.

Here is the explanation, straight from Yellen’s mouth, as laid out in the press conference following the Fed announcement:

“Initially, these caps will be set at relatively low levels, $6 billion per month for treasuries and $4 billion per month for agencies. So any proceeds exceeding those amounts would be reinvested. These caps will gradually rise over the course of a year to maximums of $30 billion per month for treasuries and $20 billion per month for agency securities, and will remain in place through the normalization process.”

The Fed believes that with this approach to limit the volume of securities, “private investors will have to absorb as we reduced our holdings, the caps should guard against outsize moves in interest rates and other potential market strains.”

“I can’t tell you what the longer run normal level of reserve balances will be because that will depend on the committee’s eventual decisions about how to implement monetary policy most efficiently and effectively in the longer run, as well as a number of as-yet unknown elements, including the banking system’s future demand for reserves, and various factors that may affect the daily supply of reserves.”

It is worth noting that, in the Q&A, Yellen also said that the Fed’s “normalization” plan is contingent on the economy and other factors, so it will most likely change.

In the first question, a reporter asked “The principles you released today say the balance sheet wind down should commence once interest rate normalization is well under way. Would this latest rate increase, with this increase, do you believe normalization is now well under way?”

Yellen answers: “So that is something that we have said for some time, and I’ve previously, when I’ve been asked what well under way means, said that I don’t want to define that in purely quantitative terms, but rather in qualitative terms. So there is no specific level of the federal funds rate that means we are well under way.”

The message: the Fed is not yet ready to signal a specific time this year when implementation might begin

end

 

The mouthpiece for the Fed further adds to the puzzle:

  1. begin to runoff bond expiries in September
  2.  rate hike in December

 

(courtesy Goldman Sachs/zerohedge)

 

 

Goldman’s Take On The FOMC: Taper In September, Next Rate Hike In December

When in doubt about the Fed’s policies, or their implementation, always go right to the source of Fed ideas, Goldman Sachs, which moments ago published its post-mortem on today’s FOMC statement, noting that the “post-meeting statement included modest upgrades to its description of growth but acknowledged the moderation in job growth and the decline in inflation, and it continued to describe risks to the outlook as “roughly balanced.”

The statement noted that the Committee expects to begin the process of balance sheet normalization this year, and an updated set of normalization principles clarified the series of caps. Taken together, Goldman continues to expect the announcement of balance sheet normalization in September and a return to rate hikes in December.

Main points from the report:

  1. The FOMC raised the funds rate target range to 1-1.25%, as widely expected. The median dot in the Summary of Economic Projections continued to show three hikes in both 2017 and 2018. The post-meeting statement included modest upgrades to its description of growth, continued to note the decline in the unemployment rate, but acknowledged the moderation in job growth and the decline in inflation. However, the statement continued to note that core inflation is running only “somewhat” below 2%, a more hawkish reference than we had expected. The statement continued to describe risks to the outlook as “roughly balanced.” Minneapolis Fed President Neel Kashkari dissented against the hike, in line with our expectations.
  2. The statement noted that the committee expects to begin the process of balance sheet normalization “this year.” The addenda to the statement provided additional guidance on the potential size of the “caps” for treasuries and mortgage backed securities, which could rise from initial levels of $6bn and $4bn, respectively, to peak caps of $30bn and $20bn. We think the language adopted – which dropped the condition “until the normalization of the level of the federal funds rate is well under way” included in the May minutes and the inclusion of specific dollar figures – make the start of balance sheet runoff in September more likely.
  3. The changes to the Summary of Economic Projections were a touch more hawkish than our expectations following the soft May CPI report. GDP growth in 2017 was upgraded a tenth to 2.2%, and the path for the unemployment rate was lowered significantly to 4.3% this year and 4.2% in 2018-2019, and NAIRU came down a tenth to 4.6%. Core PCE inflation for this year was lowered to 1.7% but was unchanged at 2.0% for next year. The funds rate projections were relatively stable, but the median and mode for 2019 declined by 0.1pp and 0.2pp respectively. Taken together, we continue to expect the announcement of balance sheet normalization in September and a return to rate hikes in December.

 

 

 

This is not good: early this morning shots fired in Alexandria Virginia where Majority Whip Scalise was hit.

3 commentaries

(courtesy zero hedge)

Multiple People Shot, Including House Majority Whip Scalise, At Congressional Baseball Practice

Update 8:

President
Trump has just confirmed that Hodgkinson has died from wounds incurred
during his shootout with the Capitol Police this morning.

 

Update 7:

The shooter has been identified at 66 year old James Hodgkinson of Belleville, Ill.

Washington Post

@washingtonpost

Live video now: Police give update on shooting at GOP baseball practice http://wapo.st/2t1ACxJ 

Washington Post

@washingtonpost

BREAKING: Shooter named as James T. Hodgkinson, 66, of Belleville, Ill. http://wapo.st/2t1V2qh 

10:42 AM – 14 Jun 2017 Shooter identified by law enforcement officials James T. Hodgkinson

The shooter at the GOP congressional baseball practice this morning is James T. Hodgkinson of Belleville, Ill., according to multiple law enforcement sources. Hodgkinson, 66, owns a home inspection…

washingtonpost.com

 

Update 6:

Virginia Governor Terry McAuliffe and law enforcement officials held a press briefing which began around 10:30AM EST.  Among other things, officers confirmed that the 2 U.S. Capitol Police Officers who were shot this morning were in “good condition.”

Virginia police said the FBI will be taking over the investigation.

View image on Twitter

Reuters Politics

@ReutersPolitics

UPDATE: FBI will be taking over the Virginia shooting investigation – Alexandria police http://reut.rs/2soann8 

 

Not surprisingly, VA governor McAuliffe used this tragedy to push gun control.

 

Update 5:

The House has gone into recess and confirmed that no votes are scheduled for today in light of this morning’s shooting.  The House Sgt. as Arms will brief members of Congress later this morning.

NBC News

@NBCNews

JUST IN: No House votes are expected today following shooting at Alexandria baseball park

10:02 AM – 14 Jun 2017 Twitter Ads info and privacy

Jake Sherman

@JakeSherman

BRIEFING ALERT — House Sgt at Arms will brief members of congress in the 11 a hour today

10:10 AM – 14 Jun 2017 Twitter Ads info and privacy

 

Update 4:

Majority Whip Steve Scalise’s office has just confirmed the congressman was shot in the hip and was transported to MedStar Washington Hospital Center where he is currently undergoing surgery.

View image on Twitter

CBS News

@CBSNews

JUST IN: Rep. Scalise’s office says he’s in stable condition & currently undergoing surgery after being shot in hip http://cbsn.ws/2saqZwy 

9:44 AM – 14 Jun 2017

 

Update 3:

Shortly after the shooting this morning at a congressional baseball practice, Representative Mark Walker (R-N.C.) said that it appeared the “gunman was there to kill as many Republican members as possible.” Walker, who was at the practice for the upcoming annual congressional baseball game in Alexandria, Virginia, confirmed he was “shaken but okay.”

https://www.facebook.com/plugins/post.php?href=https%3A%2F%2Fwww.facebook.com%2FRepMarkWalker%2Fposts%2F786008941558860&width=500

 

Update 2:

Michigan Rep. Mike Bishop tells WWJ Newsradio 950 he was attending the practice around 5:30 a.m., just outside of Alexandria, when shots rang out. He said he and his colleagues were “sitting ducks.”

“As we were standing here this morning, a gunman walked up to the fence line and just began to shoot. I was standing at home plate and he was in the third base line,” Bishop said. “He had a rifle that was clearly meant for the job of taking people out, multiple casualties, and he had several rounds and magazines that he kept unloading and reloading.”

More than 50 shots were fired, according to CBS News, with some accounts putting the number closer to 100. Four people were injured, including two Capitol Hill police officers and House Majority Whip Steve Scalise. The suspect was also shot.

The only reason why any of us walked out of this thing, by the grace of God, one of the folks here had a weapon to fire back and give us a moment to find cover. We were inside the backstop and if we didn’t have that cover by a brave person who stood up and took a shot themselves, we would not have gotten out of there and every one of us would have been hit — every single one of us,” said Bishop. “He was coming around the fence line and he was looking for all of us who had found cover in different spots. But if we didn’t have return fire right there, he would have come up to each one of us and shot us point-blank.”

Bishop was uninjured. General Jack Bergman, who represents northern Michigan and the Upper Peninsula, and John Moolenaar, from Midland, were also at the practice; both uninjured. Democratic members of Congress were practicing at a different field, miles away.

“Two of our staff was hit, Steve Scalise was hit on second base, I watched him get hit and I couldn’t do anything to help him. We tried to get him off as fast as we could but this guy was relentless with his fire,” he said. “One of our staffers got hit in the chest and I pray for him, I just don’t know what the outcome is going to be. This is a tragic situation and frankly, it’s changed everything as I know it forever.”

View image on Twitter

ABC 7 News – WJLA

@ABC7News

THE LATEST of the 5 shot in Alexandria:
– Rep. Scalise
– 2 security details
– 1 staffer
– 1 lobbyist
– Suspect in custody

8:57 AM – 14 Jun 2017 Twitter Ads info and privacy

A suspect, who received at least one gunshot, is believed to be in custody. Bishop said the man didn’t speak a word.

He stood there silently. None of us saw him walk up,” he said. “One of our coaches had his son, his 11-year-old son — I have an 11-year-old son, too, who’s supposed to be here — and I am just, I can’t even tell you, I don’t know. Fortunately everybody’s OK. It’s just traumatic

At least five people have been shot, including House Majority Whip Steve Scalise and aides, during a baseball practice in Virginia Wednesday, Fox News confirmed. The shots were reported on East Monroe Street in Del Ray, Alexandria police said on Twitter at 7:30 a.m. The location was near a YMCA.

  • BROOKS: APPEARS SOME SECURITY DETAIL MEMBERS WERE INJURED
  • BROOKS SAYS SECURITY DETAIL SHOT BACK AT ASSAILANT
  • BROOKS: HELICOPTER LANDED ON FIELD TO TRANSPORT INJURED
  • BROOKS: AT LEAST 5 INJURED, INCL. SCALISE, STAFFER, 2 GUARDS
  • INJURED GUNMAN IN CONGRESS MEMBER SHOOTING APPREHENDED: FOX

A reporter from the Huffington Post tweeted that a congressman said he “heard there was a shooting at the Congressional baseball game practice field.” ABC 7 News reported “multiple shooting” in the 400 block of E. Monroe Street.

Chad Pergram

@ChadPergram

Shooting at Congressional baseball practice. Scalise hit. Other staffers hit. Gunmen with rifle

7:48 AM – 14 Jun 2017

A reporter from Fox News tweeted that staffers were hit.

According a report from Rep. Mo Brooke, who said he was not shot, more than 50 rifle shots were fired.

Matt Murphy @mattmurphyshow

from @RepMoBrooks “Shooter attack at GOPpractice. Rifle. 50+ shots fired. 5 or more hit including GOP Whip steve scalise. I am not shot.”

7:43 AM – 14 Jun 2017

View image on Twitter

Benjamin Childers @ben_childers

Gunman just opened fire on Congressional members playing baseball this morning in Del Ray

7:23 AM – 14 Jun 2017

Brooks adds that a helicopter landed in center field and took one of the wounded to a hospital, Rep. Brooks said

Steve Brusk

@stevebruskCNN

Helicopter landed in center field and took one of the wounded to a hospital, Rep. Brooks said

8:06 AM – 14 Jun 2017

The suspected is “believed in custody,” ABC reported, according to Alexandria police.

View image on Twitter

ABC 7 News – WJLA

@ABC7News

: @AlexandriaVAPD report “multiple shooting” in 400 block of E Monroe and say “suspect believed in custody”. Story to come.

7:42 AM – 14 Jun 2017  end Suspect Reportedly Asked “Are Those Republicans Or Democrats” Before Starting To Shoot

Today’s dramatic shooting attack on Congressmen during an early morning baseball practice appears to have been politically motivated.

According to RealClearNews reporter Rebecca Berg, “Rep. Jeff Duncan plans to give a statement to police regarding a conversation he had with the shooter before leaving practice early” and she notes that “The man was wearing running clothes, asked Duncan: “Are those Republicans or Democrats out there practicing?””

Rebecca Berg

@rebeccagberg

I’m told Rep. Jeff Duncan plans to give a statement to police regarding a conversation he had with the shooter before leaving practice early

8:17 AM – 14 Jun 2017

Rebecca Berg

@rebeccagberg

I’m told Rep. Jeff Duncan plans to give a statement to police regarding a conversation he had with the shooter before leaving practice early

Rebecca Berg

@rebeccagberg

The man was wearing running clothes, asked Duncan: “Are those Republicans or Democrats out there practicing?” Per source familiar.

8:18 AM – 14 Jun 2017

Fox confirms, quoting Rep. DeSantis according to whom, the “Man Asked Whether Republicans or Dems Were on Field Before Scalise Shooting”

FoxNewsInsider

@FoxNewsInsider

Rep. DeSantis: Man Asked Whether Republicans or Dems Were on Field Before Scalise Shooting @foxandfriendshttp://insider.foxnews.com/2017/06/14/scalise-shooting-details-ron-desantis-says-man-asked-whether-republicans-or-dems-field …

8:40 AM – 14 Jun 2017 Rep. DeSantis: Man Asked Whether Republicans or Dems Were on Field Before Scalise Shooting

Rep. Ron DeSantis (R-FL) described an encounter with a man shortly before House Majority Whip Steve Scalise was shot during a congressional baseball practice in Alexandria, Va.

insider.foxnews.com

She adds: “Amazing heroism: Rep. Brooks tells CNN one member of security detail was shot in leg, still helped tend to Scalise afterward”

Rebecca Berg

@rebeccagberg

Amazing heroism: Rep. Brooks tells CNN one member of security detail was shot in leg, still helped tend to Scalise afterward

Meanwhile, Rand Paul told MSNBC that “Scalise being at practice “saved everybody else’s life. W/o leadership person there would’ve been no security there.”

TODAY @TODAYshow

Scalise being at practice “saved everybody else’s life. W/o leadership person there would’ve been no security there.” –Rand Paul on MSNBC

8:49 AM – 14 Jun 2017 end Rand Paul gives his firsthand account of the shooting. Scalise is in stable condition (courtesy zerohedge) Rand Paul’s Dramatic First Hand Account Of The Shooting

Below is a first-hand account of this morning’s shooting in Washington D.C. from Senator Rand Paul who was on the scene enjoying some batting practice when the first shots rang out.  Paul recounts a chaotic scene in which Majority Whip Steve Scalise was shot while playing 2nd base and then crawled toward the outfield to get further away from the shooter who apparently took cover behind the 3rd base dugout.

Paul, who couldn’t see the gunman from his position, said he believed the shooter fired 50-60 shots and he described the gun as sounding like an AR-15.

Paul credited the Capitol Police, who would not have been on site but for the presence of Scalise, for reacting swiftly to counteract an attack that could have been far worse.

“One of the things that’s really fortunate and probably why — everybody probably would have died expect for the fact that the Capitol Hill police were there,” he said.

 

Capitol Police were at the scene because of the presence of Scalise, the third-ranking Republican in GOP leadership.

 

“If Scalise wouldn’t have been on the team — unfortunately he was hit and I hope he does well — but also by him being there it probably saved everybody else’s life because if you don’t have a leadership person there, there would have been so security there,” Paul said.

 

“They do a great job. These are brave men and women and we were really lucky they were there,” he said.

 

 

end

 

OH NO!! Not again!! Active shooter in San Francisco.  the UPS building on 17th and Potrero

(courtesy zero hedge)

Police Issue “Shelter In Place” After Shooter Kills 2, Injures 3 More In San Francisco UPS Facility; Shooter Detained

Update: According to IPS the shooter has been detained.

* * *

San Francisco police advised residents to avoid the area and shelter in place, after at least five people were shot in San Francisco’s Potrero Hill neighborhood near a UPS facility around 9amPT this morning, according to numerous reports.

View image on Twitter

San Francisco Police @SFPD

Avoid the area of 17th Street and Vermont due to Police activity.

San Francisco Police @SFPD

Avoid the area of 17th Street and Vermont due to Police activity. pic.twitter.com/G1jpmm6hE5

San Francisco Police @SFPD

PIO is responding out to the scene. Media staging area will be at 17th and Potrero Ave. pic.twitter.com/HabDSp32xi

12:13 PM – 14 Jun 2017

Details to follow…

 

At least 2 people are being treated by fire fighters and first responders for injuries sustained in connection with the active shooter situation.

What looks like bodies being covered up on the street outside the UPS center…NBC News reports an official said that two were “medical examiner cases.” It was not immediately clear if they were deceased.

The guman reportedly attempted suicide (but is in hospital now).

Statement from UPS:

UPS confirms there was an incident involving employees within the company’s facility in San Francisco earlier this morning.

 

Local law enforcement have control of the facility and are conducting an investigation.

 

The company is cooperating with law enforcement. We cannot provide information as to the identity of persons involved at this time, pending the police investigation.

*  *  *

Social media has some color…

Stan Bunger @BungerKCBS

worker tells @KCBSNews the shooting in the well-known SF UPS building was on 3rd floor, fire alarm sounded and people fled building.

Jessica Susan @Susan__ly

Just witnessed an active shooting at UPS in SF. UPS workers ran on bus screaming for driver to go. Police en route

Michelle Zatlyn @zatlyn

Shots fired at the UPS in Potrero Hill in SF. Lots of police activity and people running for cover. Apparently it is one of the drivers.

 

end

We will see you tomorrow night

Harvey.


June 13 b/GOLD DOWN $0.80/SILVER DOWN 17 CENTS/AGAIN FOR THE 9TH CONSECUTIVE TIME, THE AMOUNT OF SILVER STANDING AT THE COMEX INCREASES IN QUANTITY/SHALE OIL PRODUCTION WILL HIT RECORD LEVELS BY NEXT MONTH/OIL: 50 DAY MOVING AVERAGE CROSSES THE 200 DAY...

Tue, 06/13/2017 - 18:28

GOLD: $1265.30  down $0.80

Silver: $16.74  down 17  cent(s)

Closing access prices:

Gold $1266.50

silver: $16.84

 

 

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1274.99 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1265.80

PREMIUM FIRST FIX:  $9.19

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1273.50

NY GOLD PRICE AT THE EXACT SAME TIME: $1265.90

Premium of Shanghai 2nd fix/NY:$7.60

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1261.30

NY PRICING AT THE EXACT SAME TIME: $1261.90

LONDON SECOND GOLD FIX  10 AM: $1262.00

NY PRICING AT THE EXACT SAME TIME. $1262.00 

For comex gold: JUNE/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  11 NOTICE(S) FOR 1100  OZ.

TOTAL NOTICES SO FAR: 2191 FOR 219,100 OZ    (6.8149 TONNES)

For silver: For silver: JUNE  4 NOTICES FILED TODAY FOR 20,000  OZ/

Total number of notices filed so far this month: 816 for 4,080,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

 

 

Over at the comex, the amount standing for the silver metal again rose in similar fashion to what we witnessed last month and also in April. It is up for the 9th consecutive trading day. We certainly have a determined entity trying to get its hands on whatever silver is available.

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This is where we are heading:  (JB Slear/Jim Sinclair)

According to JB Slear, this is what the future holds. Why should I write words. Get into the cellar as fast as you can!

Jim

In silver, the total open interest FELL BY ONLY 28  contract(s) DOWN to 205,251 DESPITE THE NASTY FALL IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (DOWN 28 CENT(S). In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.0260 BILLION TO BE EXACT or 147% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 4 NOTICE(S) FOR 20,000  OZ OF SILVER

In gold, the total comex gold FELL BY ANOTHER  3,153 contracts WITH THE FALL GOLD TOOK  ($2.40 with YESTERDAY’S TRADING). The total gold OI stands at 473,929 contracts.

we had 11 notice(s) filed upon for 1100 oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

With respect to our two criminal funds, the GLD and the SLV:

GLD:

We had no changes in tonnes of gold at the GLD:

Inventory rests tonight: 867.00 tonnes

.

SLV

Today: no changes in inventory/

THE SLV Inventory rests at: 339.605 million oz

end

.

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver FELL BY A TINY 28 contracts DOWN TO 205,000 (AND now A LITTLE  FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), DESPITE THE NASTY FALL IN PRICE FOR SILVER WITH FRIDAY’S TRADING  ( DOWN 28 CENTS). NO QUESTION THAT WE AGAIN HAD CONTINUED FAILED SHORT COVERING BY THE BANKERS ALONG WITH CONSIDERABLE BANKER DELTA HEDGING AS SILVER IS GIVING THEM NIGHTMARES

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 13.86 POINTS OR 0.44%   / /Hang Sang CLOSED UP 144.06 POINTS OR 0.56% The Nikkei closed DOWN 9.83 POINTS OR 0.05%/Australia’s all ordinaires  CLOSED UP 1.51%/Chinese yuan (ONSHORE) closed UP at 6.7971/Oil UP to 46.20 dollars per barrel for WTI and 48.37 for Brent. Stocks in Europe OPENED IN THE GREEN       ..Offshore yuan trades  6.7907 yuan to the dollar vs 6.7971 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE MUCH WEAKER DOLLAR. CHINA IS HAPPY TODAY WITH THE FALL IN THE USA DOLLAR 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

 North Korea releases a USA student following the arrival of Dennis Rodman.  There is one more American needs to be released. Rodman will now try and convince Kim to stop his nuclear ambitions ( zero hedge) b) REPORT ON JAPAN c) REPORT ON CHINA

 

i)A major win for China and a slap in the face of the USA. Panama establishes ties with China and cuts off relations with taiwan

( zero hedge)

ii)The USA is not the only country with auto sale problems.  China posts it’s first consecutive monthly drop in car sales in over 2 yrs

( zero hedge)

4. EUROPEAN AFFAIRS

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 i) RUSSIA

Interesting;  Putin meets the founder of block chain Ethereum

( zero hedge)

ii)QATAR

This is going to be expensive:  In order to bypass the embargo, Qatar will pay 8 million dollars to airlift 4,000 cows.  The cows will fly business class instead of economy.

( zero hedge)

iii)Qatar receives much of its shipment of dollars from the UAE and now that it blocked. QATAR is running out of dollars!

( zerohedge)

6 .GLOBAL ISSUES 7. OIL ISSUES

i)So much for OPEC’s production cuts

( zero hedge)

ii)Shale production will hit its all time high in July and then rise from there!

( zero hedge)

iii)Not good for oil:  a death cross/ 50 day moving averaging crossed below the 200 day moving average. Generally this means oil is heading down

( zero hedge)

8. EMERGING MARKET

 

9.   PHYSICAL MARKETS

N doubt that these guys were also involved int he rigging of gold and silver

( Bloomberg)

10. USA Stories

i)This is not good news for the state of Illinois as unpaid bills continue to mount.  Without a shadow of a doubt they will be downgraded in July to junk which will cause a massive increase of payments by the state to cover default provisions with respect to bond covenants with the bond purchases by individuals and corporations on prior deals.  The deals stipulated extra payments if the state is downgraded to junk.

( zero hedge)

ii)We are only positive 82 points with the treasury 10/2 bond yields.  Citibank is warning that it is approaching inversion levels:

( zero hedge)

iii)This is not good:  USA producer prices are rising at the fastest pace in 3 yrs and this signals huge inflationary pressures

( zero hedge)

iv)Mnuchin gives us until the first or second week of September before the fun begins on debt ceiling

( zero hedge)

v)David Stockman lays out the Fiscal Bloodbath scenario perfectly as the “Mother of all debt ceiling crises looms”:

( David Stockman/Daily Reckoning)

vi)Trump lays out a new plan to overhaul bank rules, by making it easier for them.  However Dodd Frank will be rolled back and that would not be good for us

( zero hedge)

 

vii)Gingrich correctly states that Mueller is not impartial and that the Democrats will be on a witch hunt against Trump

a must read…
( zero hedge)

viii)More signs that the USA economy is in trouble: Citigroup warns of second quarter problems with respect to trading revenues:

down a huge 12 to 13%

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 3,153 CONTRACTS DOWN  to an OI level of 473,929 WITH THE  FALL IN THE PRICE OF GOLD ($2.40 with YESTERDAY’S trading). AGAIN, the bankers were expecting more gold leaves to fall from the gold tree and as such they could not cover as much as they wanted.

We are now in the contract month of JUNE and it is one of the BETTER delivery months  of the year. In this JUNE delivery month we had A  LOSS OF 160 contract(s) FALLING TO  1621.  We had 62 notices filed yesterday so we LOST ANOTHER 98  contracts or an additional 9800 oz will NOT stand for delivery in this very active delivery month of June AND WITHOUT A SHADOW OF DOUBT THESE 98 CONTRACTS RECEIVED AN EFP CONTRACT WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURE GOLD CONTRACT/OR A LONG CALL OR MOST LIKELY A LONDON BASED FORWARD GOLD CONTRACT. THESE EFP’S ARE PRIVATE OFF COMEX TRANSACTIONS. THE STUBBORN LONGS WHO ARE REMAINING STOIC AT THE COMEX ARE SO FAR REFUSING THAT FIAT BONUS (OVER 11 TONNES STANDING)

Below is a little background on the EFP contracts  initiated by our bankers: We now know for certain that private EFP contracts are given by the bankers when faced with an upcoming active delivery month and they state that this is for emergency purposes only and that they do not have actual physical metal to deliver upon in the front month.  We just do not know the makeup of that private deal.  It is my contention that the longs in GOLD FOR INSTANCE at the end of MAY(for June contracts) were given a fiat bonus plus a long “in the money” call for a  future July contract or a August FUTURE contract or MAYBE EVEN A LONDON BASED FORWARD GOLD CONTRACT. . and this is why the total comex open interest complex obliterates as we enter first day notice.  So now everything makes sense: the obliteration of OI as we enter first day notice has not really occurred in the real sense but replaced with a future long contract call and/or an off -comex London based gold contract  with some bonus money for their effort.

The non active July contract LOST 387 contracts to stand at 1,965 contracts. The next big active month is August and here the OI LOST 1,314 contracts DOWN to 348,375,  as the bankers trying to keep this month down to manageable size.

We had 11 notice(s) filed upon today for 1100 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI FELL BY ONLY  28 contracts FROM  205,028 UP TO 205,000 DESPITE YESTERDAY’S BIG 28 CENT LOSS.  IT SURE LOOKS LIKE OUR BANKERS ARE DESPERATELY TRYING TO COVER THEIR SHORTS IN SILVER BUT TO NO AVAIL. WE ALSO NO DOUBT HAVE CONSIDERABLE EVIDENCE OF SOME DELTA HEDGING BY THE BANKERS TRYING TO OFFSET THAT HUGE SHORT POSITION THEY HAVE BEEN BURGEONING OVER THE YEARS. We are in the NON active delivery month is JUNE  Here the open interest SOMEHOW LOST ONLY 23 contract(s) FALLING TO 13 contracts. We had 29 notices served upon yesterday so we AGAIN GAINED 6 CONTRACTS OR AN ADDITIONAL  30,000 OZ OF SILVER WILL STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.  IT SEEMS WE ARE CONTINUING WHERE WE LEFT OFF LAST MONTH IN SILVER AS INVESTORS ARE WILLING TO FORGO THE FIAT PROFIT JUST TO SECURE PHYSICAL SILVER METAL. THIS IS THE 9TH CONSECUTIVE DAY THAT THE AMOUNT OF SILVER STANDING ADVANCED FROM FIRST DAY NOTICE. 

The next big active month will be July and here the OI LOST 8191 contracts DOWN to 108,156 as we start to wind down before first day notice Friday, June 30.  July will be interesting to watch in silver as we witness fewer players pitching for EFP contracts than with gold.

The month of August, a non active month picked up 1 contracts to stand at 38.  The next big active delivery month for silver will be September and here the OI already jumped by another 8205 contracts up to 56,313.

I will give you a snapshot as to what happened last year at the exact number of days before first day notice:

 Monday, June 13.2016:  94,437 contracts were still outstanding vs 108,156 contracts June 13.2017

At the conclusion of June, the final standing for physical silver was 3,080,000 oz and we have already surpassed that number this year  (3,945,000 oz).

The line in the sand is $18.50 for silver and again it has been defended by the criminal bankers.  Once this level is pierced, the monstrous billion oz of silver shorts will blow up. The bankers are defending the Alamo with their last stand at the $18.50 mark. THE NEW RECORD HIGH IN OPEN INTEREST WAS SET FRIDAY APRIL 21/2017 AT:  234,787.

We had 4 notice(s) filed for 20,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 96,475 contracts which is POOR

Yesterday’s confirmed volume was 181,057 contracts  which is GOOD

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for JUNE  June 13/2017. Gold Ounces Withdrawals from Dealers Inventory in oz   nil Withdrawals from Customer Inventory in oz    NIL oz Deposits to the Dealer Inventory in oz nil  oz Deposits to the Customer Inventory, in oz   nil oz No of oz served (contracts) today   11 notice(s) 1100 OZ No of oz to be served (notices) 1610 contracts 161,000 oz Total monthly oz gold served (contracts) so far this month 2191 notices 218,100 oz 6.84149 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month   272,415.8 oz Today we HAD  0 kilobar transaction(s)/  We had 0 deposit into the dealer: total dealer deposits: nil oz We had NIL dealer withdrawals: total dealer withdrawals:  NIL oz we had no dealer deposits: total dealer deposits:  nil oz we had 0  customer deposit(s): total customer deposits; nil  oz We had 0 customer withdrawal(s) total customer withdrawal: NIL  oz  we had 0 adjustments: For JUNE:

Today, 0 notice(s) were issued from JPMorgan dealer account and 2 notices were issued from their client or customer account. The total of all issuance by all participants equates to 11  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 7 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the initial total number of gold ounces standing for the JUNE. contract month, we take the total number of notices filed so far for the month (2191) x 100 oz or 218,000 oz, to which we add the difference between the open interest for the front month of JUNE (1621 contracts) minus the number of notices served upon today (11) x 100 oz per contract equals 379,100  oz, the number of ounces standing in this active month of JUNE.   Thus the INITIAL standings for gold for the JUNE contract month: No of notices served so far (2191) x 100 oz  or ounces + {(1621)OI for the front month  minus the number of  notices served upon today (11) x 100 oz which equals 379,100 oz standing in this  active delivery month of JUNE  (11.7916 tonnes) . WE LOST 98 CONTRACTS OR AN ADDITIONAL 9800 OZ WILL NOT STAND AT THE COMEX.  HOWEVER THESE GUYS (98 CONTRACTS) WERE GIVEN EFP CONTRACTS WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURES GOLD CONTRACT OR A LONG CALL ON A GOLD CONTRACT OR MOST LIKELY A LONDON BASED GOLD FORWARD CONTRACT. YOU CAN NOW SEE WHY THE COT REPORTS ARE DISTORTED DUE TO THE ISSUANCE OF THESE EFP CONTRACTS  xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 900,191.813 or 27.99 tonnes DEALER RAPIDLY LOSING GOLD Total gold inventory (dealer and customer) = 8,647,133.659 or 268.96 tonnes    Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 272.96 tonnes for a  loss of 34  tonnes over that period.  Since August 8/2016 we have lost 85 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 10 MONTHS  85 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE MAY DELIVERY MONTH   June INITIAL standings  June 13 2017 Silver Ounces Withdrawals from Dealers Inventory  nil Withdrawals from Customer Inventory  1,009,212.978  oz CNT Delaware HSBC Scotia Deposits to the Dealer Inventory NIL oz Deposits to the Customer Inventory   1,183,245.277 oz HSBC CNT No of oz served today (contracts)  4 CONTRACT(S) (20,000 OZ) No of oz to be served (notices) 9 contracts ( 45,000 oz) Total monthly oz silver served (contracts) 816 contracts (4,080,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month 2,670,742.8 oz today, we had  0 deposit(s) into the dealer account: total dealer deposit: NIL  oz we had Nil dealer withdrawals: total dealer withdrawals: nil oz we had 4 customer withdrawal(s):  i) out of CNT: 46,255.508 oz ii) Out of Delaware; 5,882.418 oz iii) Out of HSBC:  20,255.262 oz iv) Out of Scotia; 936,819.790 lz TOTAL CUSTOMER WITHDRAWALS:  1,009,212,978  oz  We had 2 Customer deposit(s):  i) Into HSBC:   583,168.600 oz ii) Into CNT: 600,076.677 oz ***deposits into JPMorgan have now stopped In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits 1,183,245.277 oz    we had 0 adjustment(s) The total number of notices filed today for the JUNE. contract month is represented by 4 contract(s) for 20,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at 816 x 5,000 oz  = 4,080,000 oz to which we add the difference between the open interest for the front month of JUNE (13) and the number of notices served upon today (4) x 5000 oz equals the number of ounces standing  

 

.   Thus the initial standings for silver for the JUNE contract month:  816 (notices served so far)x 5000 oz  + OI for front month of JUNE.(13 ) -number of notices served upon today (4)x 5000 oz  equals  4,125,000 oz  of silver standing for the JUNE contract month.   We gained 6 contracts or an additional 30,000 oz will stand for delivery. WE ALSO HAD 0 EFP CONTRACTS THAT WERE ISSUED AS THE LONGS REFUSED A FIAT BONUS: THEY WANT THEIR PHYSICAL SILVER.     Volumes: for silver comex Today the estimated volume was 63,055 which is EXCELLENT Yesterday’s  confirmed volume was 120,134 contracts which is GIGANTIC YESTERDAY’S ESTIMATED VOLUME OF 86349 CONTRACTS EQUATES TO 600 MILLION OZ OF SILVER OR 86% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.   Total dealer silver:  34.315 million (close to record low inventory   Total number of dealer and customer silver:   204.684 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 6.9 percent to NAV usa funds and Negative 7.0% to NAV for Cdn funds!!!!  Percentage of fund in gold 62.3% Percentage of fund in silver:37.6% cash .+0.1%( June 13/2017)   SPROTT PHYSICAL SILVER TRUST FUND NOT READY FOR PUBLICATION 2. Sprott silver fund (PSLV): STOCK  6.53%!!!! NAV  ??? (june 13/2017)  3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.58% to NAV  (June 13/2017 ) Note: Sprott silver trust back  into POSITIVE territory at -?? /Sprott physical gold trust is back into NEGATIVE/ territory at -0.58%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada

Submitted by cpowell on Thu, 2017-03-09 01:19. Section: Daily Dispatches

From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017

http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…

Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.

The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.

The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.

“They weren’t interested in having those discussions,” Williams said.

 Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.

If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.

“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”

Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.

The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.

Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.

Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.

end

And now the Gold inventory at the GLD

June 13. No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 12/No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 9/no change in inventory at the GLD/Inventory rests at 867.00 tonnes

June 8/AN ADDITION OF 3.07 TONNES OF GOLD ADDED TO THE GLD/INVENTORY RESTS AT 867.00 TONNES

June 7 a huge change in inventory/a deposit of 13.93 tonnes/inventory rests at 864.93 tonnes

June 6/ no changes in inventory at the GLD/Inventory remains at 851.00 tonnes

June 5.2017/no changes at the GLD/Inventory remain at 851.00 tonnes

June 2/2017/a huge deposit of 3.55 tonnes of gold into the GLD/Inventory rests at 851.00 tonnes

June 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 847.45 TONNES

May 31./ no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 30/no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 26./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 25./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 24/no change in inventory at the GLD/inventory rests at 847.45 tonnes

May 23/a paper withdrawal of 5.03 tonnes of gold from the GLD/Inventory rests at 847.45 tonnes

May 22/A DEPOSIT OF 1.77 TONNES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.48 TONNES

May 19/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 850.71 TONNES

May 18/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 850.71

May 17/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 16./ no change in the GLD inventory/inventory rests at 851.89 tonnes

May 15/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 12/no changes in GLD/inventory rests at 851.89 tonnes

may 11/no changes in GLD inventory/inventory rests at 851.89 tonnes

May 10/no changes in GLD inventory/inventory rests at 851.89 tonnes/

May 9/a withdrawal of 1.19 tonnes from the GLD/Inventory rests tonight at 851.89 tonnes

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx June 13 /2017/ Inventory rests tonight at 867/00 tonnes *IN LAST 171 TRADING DAYS: 80.13 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 113 TRADING DAYS: A NET  47.30 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY. *FROM FEB 1/2017: A NET  60.64 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

June 13/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz

June 12/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 9/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 8/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ/

June 7/no change in inventory at the SLV/inventory rests at 339.605 million oz/

June 6/no change in inventory at the SLV/Inventory rests at 339.605 million oz.

June 5/a huge change at the SLV/a withdrawal of 1.371 million oz /inventory rests at 339.605 million oz/

June 2/no change in silver inventory at the SLV/Inventory rests at 340.976 million oz/

June 1/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 340.976 MILLION OZ

May 31./ no change in silver inventory at the SLV/inventory rests at 340.976 million oz/

May 30/no change in silver inventory at the SLV/inventory rests at 340.976 million oz

May 26/another paper withdrawal of 946,000 oz of silver from the SLV with silver rising/inventory rests at 340.976 million oz

May 25/no change in silver inventory at the SLV/Inventory rests at 341.922 million oz

May 24./a “paper” withdrawal of 1.893 million oz from the SLV/inventory rests tonight at 341.922 million oz

May 23/no change in silver inventory at the SLV/inventory rests at 343.815 million oz

May 19/no change in silver inventory at the SLV/Inventory rests at 343.815 million oz.

may 18/2017/another big deposit of 1.42 million oz added to the SLV/inventory rests at 343.815 million oz.

may 17/no change in silver inventory at the SLV/Inventory rests at 342.395 million oz/

May 16./we had a huge addition of 1.416 million oz of silver into the SLV/inventory rests at 342.395 million oz

May 15/no changes in silver inventory/inventory rests at 340.979 million oz/

May 12/a huge change in silver: a deposit of 2.369 million oz/inventory rests at 340.979 million oz

May 11/no changes in silver inventory at the SLV/Inventory rests at 338.610 million oz

May 10/ a gigantic 3.833 million oz of silver added to the SLV and this occurred with the constant whacking of silver for the past 17 trading sessions/inventory rests at 338.610 million oz

may 9Again, no movement of inventory at the SLV. Inventory rests at 334.777 million oz

June 13.2017: Inventory 339.605  million oz end We are going to provide GOFO rates  (gold) each day and shortly silver courtesy of Bron Suchecki of Monetary Metals and here is today’s figures:

The actual figures can be found on our home page https://monetary-metals.com/

with this box in the left side

GOFO

6 month: 1.27%

12 month:  1.44%

 

 

BRON SUCHECKI | VP Operations Unlocking the Productivity of Gold MONETARY METALS & CO M: +61 4 1210 1912 | bron@monetary-metals.com Skype: bron.suchecki Twitter: @bronsuchecki Website: monetary-metals.com Use this link to encrypt and safely send confidential documents to Monetary Metals® https://cloud.sookasa.com/upload_page/f840a3c3-54e5-42b0-85b4-15c9e94ea5e  end Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

In Gold we Trust: Must See Gold Charts and Research By Mark O’Byrne June 13, 2017 0 Comments

In Gold we Trust Report: Bull Market Will Continue

The 11th edition of the annual “In Gold we Trust” is another must read synopsis of the fundamentals of the gold market, replete with excellent charts by our friend Ronald-Peter Stoeferle and his colleague Mark Valek of Incrementum AG.


Key topics and takeaways of the report:

– “Sell economic ignorance, buy gold …”
– Many signals suggest that we are about to face a big shift within the financial and monetary system
– 5 reasons why the gold bull market will continue
– Gold’s gains in 2016 dampened due to high expectations of Trump’s growth policy
– Gold still up 8.5% in 2016 and 10.2% since January 2017
– Attempt at normalization of U.S. monetary policy will be litmus test for US economy
– Bitcoin: Digital gold or fool’s gold?


– White, Gray and Black Swans and consequences for gold price
– Exclusive Interview with Dr. Judy Shelton (Economic advisor to Donald Trump) about a possible remonetisation of gold
– Prudent investors should consider accumulating gold and gold stocks now due to excessive global debt, the “gradual reduction of the U.S. dollar’s importance as a global reserve currency” and the high probability that the U.S. is close to entering a recession
– “It is a case of better having insurance and not needing it, than one day realizing that one needs it but doesn’t have it…”
– “We live in an age of advanced monetary surrealism….”


Research can be downloaded here:

In Gold we Trust – Extended version (169 pages) 
In Gold we Trust – Compact version (29 pages) 

News and Commentary

Gold tips lower, while palladium heads for highest finish since 2014 (MarketWatch.com)

Palladium near 16-year high, gold firm ahead of Fed meeting (Reuters.com)

China’s Shandong Gold Mining to seek loans to buy Barrick mine stake (Reuters.com)

Fed set to raise interest rates, give more detail on balance sheet winddown (Reuters.com)

Islamic State calls for attacks in West, Russia, Middle East, Asia during Ramadan (Reuters.com)

Palladium’s Constrained Supply. Source: Johnson Matthey & CPM Group via Macrotourist

Gold Is In A “Long Term Uptrend” Due To Political Turmoil – Cook (Bloomberg.com)

Gold could withstand rising interest rates, unwinding of Fed assets: TD Securities (Platts.com)

Palladium Pandemonium – Short Squeeze Sends Precious Metal Spreads (ZeroHedge.com)

Gold-Stock Inflection Nears – Hamilton (SeekingAlpha.com)

What, Me Worry? says Mauldin (MauldinEconomics.com)

Gold Prices (LBMA AM)

13 Jun: USD 1,261.30, GBP 992.26 & EUR 1,125.33 per ounce
12 Jun: USD 1,269.25, GBP 998.14 & EUR 1,131.28 per ounce
09 Jun: USD 1,274.25, GBP 1,001.31 & EUR 1,139.18 per ounce
08 Jun: USD 1,284.80, GBP 992.12 & EUR 1,142.70 per ounce
07 Jun: USD 1,292.70, GBP 1,001.07 & EUR 1,146.62 per ounce
06 Jun: USD 1,287.85, GBP 997.31 & EUR 1,144.77 per ounce
05 Jun: USD 1,280.70, GBP 992.41 & EUR 1,136.88 per ounce

Silver Prices (LBMA)

13 Jun: USD 16.82, GBP 13.21 & EUR 15.01 per ounce
12 Jun: USD 17.13, GBP 13.50 & EUR 15.27 per ounce
09 Jun: USD 17.35, GBP 13.60 & EUR 15.52 per ounce
08 Jun: USD 17.60, GBP 13.60 & EUR 15.67 per ounce
07 Jun: USD 17.60, GBP 13.64 & EUR 15.71 per ounce
06 Jun: USD 17.56, GBP 13.61 & EUR 15.62 per ounce
05 Jun: USD 17.52, GBP 13.58 & EUR 15.59 per ounce

Recent Market Updates

– Pension Funds, Sovereign Wealth Funds, Central Banks “Stock Up” on Gold “Amid Uncertainty”
– 4 Charts Show Gold May Be Heading Much Higher
– Gold in Pounds Surges 1.5% To £1,001/oz – UK Political Turmoil Likely
– Gold Prices Steady On UK Election Risk; ECB Meeting and Geopolitical Risk
– Gold Breaks 6-Year Downtrend On Safe Haven and 50% Surge In Chinese Demand
– Deposit Bail In Risk as Spanish Bank’s Stocks Crash
– Terrorist attacks see Gold Stay Firm
– Trust in the Bigger Picture, Trust in Gold
– Trump, UK and the Middle East drive uncertainty
– Is China manipulating the gold market?
– Why Sharia Gold and Bitcoin Point to a Change in Views
– Bitcoin volatility and why it’s good for gold
– Silver Bullion In Secret Bull Market

Access Award Winning Daily and Weekly Updates Here

Mark O’Byrne Executive Director

-END-

N doubt that these guys were also involved int he rigging of gold and silver

(courtesy Bloomberg)

FX ‘Cartel’ Traders to Surrender to U.S. in Rigging Case by

David McLaughlin

and

Suzi Ring June 12, 2017, 9:48 PM EDT June 13, 2017, 6:22 AM EDT
  • Three British traders charged by U.S. in currency-rigging case
  • Former bankers have deal for arraignment in U.S. this summer

Three former currency traders in Britain who are accused by U.S. prosecutors of conspiring to manipulate markets have reached an agreement to surrender this summer to American officials and appear in federal court to face the charges.

JPMorgan Chase & Co.’s Richard Usher, Citigroup Inc.’s Rohan Ramchandani and Barclays Plc’s Chris Ashton have agreed to be arraigned in a Manhattan court in July, according to a Justice Department letter filed Monday. The document follows months of negotiations with U.S. prosecutors over the terms of their surrender, including permission for the men to return to the U.K. while they await trial.

The trio was charged by the U.S. in January with conspiring to rig foreign-exchange markets, using an electronic chat room known as “The Cartel” to share information. The indictment was the culmination of a global investigation into currency-market manipulation that saw seven banks pay about $10 billion in fines to authorities.

“Mr. Ramchandani has agreed to travel voluntarily to the USA to stand trial and clear his name,” Alison Geary, Ramchandani’s London lawyer at WilmerHale, said Tuesday in an e-mailed statement. “He has not committed any criminal offense. The Serious Fraud Office itself concluded as much, after 18 months of investigation and the review of half a million documents.”

U.K. lawyers for Usher and Ashton didn’t immediately respond to requests for comment. Usher was previously JPMorgan’s London chief currency dealer, Ashton was global FX head of voice spot trading at Barclays, and Ramchandani was head of G-10 spot currency trading at Citigroup.

A trial would be closely watched by the British finance industry after the SFO ended its own foreign-exchange investigation in March 2016, citing insufficient evidence for a “realistic” prospect of conviction. The SFO has clashed with the Justice Department in the past over the pursuit of British bankers — most notably when the U.S. started filing charges related to Libor manipulation — but its decision not to pursue the currency case has left the door open for the Americans.

The Justice Department has agreed on bail conditions for the three that will be presented at their arraignment, ordered by U.S. District Judge Richard Berman on July 17. Bail terms are subject to court approval but U.S. judges generally follow the government’s lead on such decisions.

The case is U.S. v. Usher, 17-cr-00019, U.S. District Court, Southern District of New York (Manhattan).

end

Your early TUESDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    

1 Chinese yuan vs USA dollar/yuan  STRONGER 6.7970(REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES  MUCH STRONGER TO ONSHORE AT   6.7907/ Shanghai bourse CLOSED UP 13.86 POINTS OR 0.44%  / HANG SANG CLOSED UP 144.06 POINTS OR 0.56% 

2. Nikkei closed DOWN 9.83 POINTS OR 0.05%   /USA: YEN RISES TO 110.06

3. Europe stocks OPENED IN THE GREEN        ( /USA dollar index FALLS TO  97.05/Euro UP to 1.1211

3b Japan 10 year bond yield: RISES TO   +.064%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.06/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  46.20 and Brent: 48.37

3f Gold DOWN/Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil UP for WTI and DOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.271%/Italian 10 yr bond yield DOWN  to 1.995%    

3j Greek 10 year bond yield FALLS to  : 5.87???  

3k Gold at $1263.20  silver at:16.80 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 17/100 in  roubles/dollar) 56.89-

3m oil into the 46 dollar handle for WTI and 48 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A SMALL SIZED REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.06 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9683 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0856 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +0.271%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.216% early this morning. Thirty year rate  at 2.876% /POLICY ERROR)GETTING DANGEROUSLY HIGH

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Global Markets Rebound As Tech Rout Ends; Sterling Rises  

As the Fed begins its two-day meeting, global stocks have recovered their footing and European shares rise, led by a bounce in tech stocks as last Friday’s global selloff that started in the sector shows signs of abating. Asian stocks and U.S. futures gain as investors turn their attention to today’s Jeff Sessions testimony as well as tomorrow’s barrage of macro data including Yellen, CPI and retail sales.

It has been a risk-on session globally as the tech rout ended and technology stocks rebound from recent weakness and amid a lack of negative fundamental catalysts. European equity markets open higher with technology sector leading, travel stocks also well supported. Bund futures pushed lower, with supply pressure also coming from 10y DSL auction. Gilts sell-off after higher than expected U.K. CPI, short sterling curve bear steepens aggressively. USD broadly weakens across G-10 except for USD/JPY which is supported by lift in EUR/JPY and general risk sentiment. SEK spikes higher after strong domestic CPI data, NOK rallies in tandem after bullish domestic growth survey.

As Bloomberg notes, highlighting the importance of the tech, “should the rebound in tech shares carry through into U.S. trading investors will likely breathe a sigh of relief; the sector has been a key driver of global equity gains and a prolonged selloff would have represented a major threat to the ongoing bull market.”

Tomorrow, the Fed is widely expected to raise its benchmark interest rate in a decision scheduled for Wednesday and may also provide more details on its plans to shrink $4.5 trillion dollars of assets it amassed to nurse the economic recovery. The gap between benchmark U.S and European bond yields hit its widest in a month as the Fed meeting also shone a light on the slow pace of change in European Central Bank policy. “If the Fed is tightening policy and embarking on a gradual normalization path, whether it is the short-term policy rates or the balance sheet, it wants the market to believe it and to adjust to it,” said Frederik Ducrozet, an economist at Pictet Wealth Management.

“It is not just about complacency and the creation of financial bubbles…but also about its own credibility.” The Bank of Japan and the Bank of England also meet this week, although no major policy changes are expected.

According to a Retuers poll, a small majority of traders in China’s financial markets think its central bank will likely raise short-term interest rates again this week if the U.S. Federal Reserve hikes its key policy rate. But the reaction to this in bond markets has been concerning. China’s two-year yields have in the last few sessions risen above its 10-year yields- a trend that has only happened in a few instances over the past decade and suggests investors have worries over the long-term health of the world’s second biggest economy.

This morning, almost every industry group in the Stoxx Europe 100 Index traded in the green, with the abovementioned tech bounce meanings technology shares are poised for the largest gain in more than a month. The Stoxx Europe 600 Index climbed 0.6 percent as of 11:17 a.m. in London, after dropping 1 percent on Monday. Tech shares rose 1.3 percent. Futures on the S&P 500 Index rose 0.2 percent. The Nasdaq 100 fell 0.6 percent on Monday, adding to its 2.4 percent rout on Friday. Apple fell 2.4 percent while Microsoft Corp. slid 0.8 percent.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, recouping about half of the previous session’s losses. The MSCI Asia Pacific Information Technology index steadied, after sliding 1.4 percent on Monday. Australian equities rallied 1.7 percent, the most since November, as bank stocks jumped after investors returned from a holiday. South Korea’s Kospi added 0.7 percent, with Samsung Electronics Co. little changed after leading declines in Asia during Monday’s rout. Hong Kong’s Hang Seng rose 0.6 percent as Tencent Holdings Ltd., which tumbled 2.5 percent in the previous session, rebounded 0.7 percent.

Some analysts had predicted Asian tech shares would not see as intense a sell-off as their U.S. peers as their valuations were less stretched. “Comparatively, valuations for the IT sector in the Asia Pacific region are less expensive compared to the U.S., which may be why we’re not seeing the situation further aggravate for a second session,” said Jingyi Pan, market strategist at IG in Singapore.

Sterling headed for the first increase since the election that’s left U.K. Prime Minister May battling to shore up her position. She’ll meet Northern Ireland’s Democratic Unionists today, seeking the votes she needs to be able to pass any legislation. The pound strengthened 0.4 percent to $1.2711 after sliding 0.7 percent on Monday.

The Canadian dollar hit a two-month high after a policymaker said the central bank would assess if it needs to keep rates at near-record lows as the economy grows.

“It feels like a long time since markets have been treated to unscheduled hints of tightening, and this was quite apparent when you saw the positive reaction of CAD crosses overnight,” Matt Simpson, senior market analyst at ThinkMarkets in Melbourne, wrote in a note.

Elsewhere, the euro fluctuated before gaining less than 0.1 percent to $1.1210. The Bloomberg Dollar Spot Index fell by 0.1 percent.  The yen fell 0.2 percent to 110.12 per dollar, after Monday’s 0.3 percent gain.

The yield on 10-year Treasuries was little changed; before today it climbed for four straight sessions. German benchmark yields rose two basis points, French equivalents increased three basis points and U.K. yields added five basis points.

WTI, Brent were supported by positive risk sentiment globally. Brent trades near $48.50/bbl, WTI above $46 with industry-funded API data on U.S. stockpiles due later. “The market’s just waiting for the API data,” says Nitesh Shah, commodities strategist at ETF Securities. “There’s some expectations for a bit of a correction from last week’s disappointment.” API data due 4:30pm ET, crude inventories forecast to decline 2.25m bbl in more definitive EIA data Wednesday. Weaker dollar, positive equities supported prices earlier Tuesday.

Tomorrow the Fed is expected to raise its benchmark rate for the second time this year on Wednesday. Since that’s widely expected, the more market-sensitive elements of the meeting will relate to signals on future policy — either the path for rates or plans to cut the $4.5 trillion balance sheet. Central banks in Japan, Switzerland and Britain are also scheduled to weigh in with policy decisions this week.

Bulletin headline summary from RanSquawk

  • Tech names recoup losses to lead European bourses higher
  • UK inflation rises yet again to its highest level since June 2013, while GBP moves back above 1.27
  • Looking ahead, highlights include US PPI and API Crude Oil Inventories

Market Snapshot

  • S&P 500 futures up 0.2% to 2,430.50
  • STOXX Europe 600 up 0.6% to 388.92
  • MXAP up 0.3% to 154.94
  • MXAPJ up 0.6% to 504.10
  • Nikkei down 0.05% to 19,898.75
  • Topix up 0.1% to 1,593.51
  • Hang Seng Index up 0.6% to 25,852.10
  • Shanghai Composite up 0.4% to 3,153.74
  • Sensex up 0.3% to 31,195.41
  • Australia S&P/ASX 200 up 1.7% to 5,772.77
  • Kospi up 0.7% to 2,374.70
  • German 10Y yield rose 1.9 bps to 0.268%
  • Euro up 0.1% to 1.1217 per US$
  • Brent Futures up 0.7% to $48.64/bbl
  • Italian 10Y yield fell 6.5 bps to 1.729%
  • Spanish 10Y yield fell 0.9 bps to 1.436%
  • Brent Futures up 0.7% to $48.64/bbl
  • Gold spot down 0.3% to $1,262.70
  • U.S. Dollar Index down 0.1% to 97.04

Top Overnight News

  • The stakes of an intensifying Russia investigation are growing for President Donald Trump, as his attorney general Jeff Sessions prepares to confront lawmakers on Capitol Hill for the first time about what role he played in the inquiry and the firing of FBI director James Comey
  • The Trump administration laid out its highly anticipated plan for overhauling bank rules, calling on the government to ease, though not eliminate, many of the strictures that were imposed on Wall Street after the financial crisis
  • U.K. Prime Minister Theresa May bought herself a stay of execution by apologizing to her own lawmakers for the election debacle as she prepared to meet Northern Ireland’s Democratic Unionists to secure the votes needed to prop up her minority government
  • Goldman Sachs, Morgan Stanley and Societe Generale top the ranking of global lenders at JPMorgan as analysts led by Kian Abouhossein reiterate their preference for U.S. investment banks over Europeans
  • President Donald Trump plans to follow through on a campaign promise by rolling back the Obama administration’s effort to open Cuba to U.S. tourism and trade, with new limits being considered on travel and investment by U.S. companies
  • Several U.S. senators struck a bipartisan deal to expand existing sanctions against Russia and let Congress review any move by President Donald Trump to lift existing penalties, a sign of congressional frustration amid probes of interference in the 2016 election
  • Janet Yellen’s Federal Reserve is getting ready to set off on a path
    toward a smaller balance sheet without knowing quite where it will end
    up.
  • U.K. inflation resumed its upward march last month, accelerating more than forecast to the fastest pace in four years
  • U.K. Prime Minister Theresa May bought herself a stay of execution by
    apologizing to her own lawmakers for the election debacle as she
    prepared to meet Northern Ireland’s Democratic Unionists to secure the
    votes needed to prop up her minority government
  • German Investors Confidence in Economy Unexpectedly Declines: German Jun. ZEW Expectations: 18.6 vs 21.7 est; Current Situation 88.0 vs 85.0 est.
  • The European Union is pushing ahead with plans to assert control over the clearing of euro-denominated derivatives, a politically charged step that could force firms to move from London to the EU after Brexit
  • A rally in bonds of China’s most-indebted developer has some analysts
    warning that steps to cut borrowings have yet to bring leverage down to
    healthy levels.
  • U.K. May CPI y/y: 2.9% vs 2.7% est; Core CPI 2.6% vs 2.4% est; highest CPI since Apr. 2012, core highest since Dec. 2011; weaker GBP increased costs of computer games, laptops and package holidays
  • Senior U.K. cabinet ministers are holding secret talks with Labour MPs to secure cross-party backing for a soft Brexit: Telegraph
  • Italian Finance Minister: solution for Italian Veneto banks is close, there will be no bail-in
  • Sweden May CPI y/y: 1.7% vs 1.6% est; CPIF 1.9% vs 1.7% est; largest upside contribution from restaurants and hotels

Asian stocks shrugged off the negative lead from US where the tech sector once again underperformed and posted its worst 2-day period YTD. Nonetheless, the tone in Asia improved throughout the session with ASX 200 (+1.2%) underpinned by financials after gains in the big 4 banks, while Nikkei 225 (Unch.) recovered from early losses alongside a rebound in USD/JPY. Elsewhere, Shanghai Comp. (+0.4%) was indecisive with early weakness observed alongside speculation the PBoC may raise rates in response to a US Fed hike and after another lacklustre liquidity operation, although Chinese stocks then recovered to conform to the overall improvement of risk sentiment in the region. 10yr JGBs were lower amid an improvement in risk sentiment throughout the session, while today’s 20yr auction later also failed to spur demand with the results mixed in which the accepted prices declined from prior. PBoC injected CNY 10bIn in 7-day reverse repos and CNY 40bIn in 28-day reverse repos.

Top Asian News

  • U.S. Bears Target China With Shorts Circling $6 Billion ETFs
  • Japan Leveraged Fund Outflows in May ‘Warrants Caution’: Nomura
  • JGB Sale Price Beats Estimate as $117b of Maturities Spur Demand
  • Chinese Coal Producers Jump After Regulator Says to Cut Capacity
  • India Signals Flagship Tax Reform on Track as Timing Questioned
  • Shanghai Backs Homebuyers’ Rights After Protest on Streets
  • Steel Coil Drops in Shanghai as China Plans Auto Capacity Curbs

European bourses have seen mixed gains with the Eurostoxx 50 roughly halfway to recouping yesterday’s losses led by the recovering the tech sector. Notable movers of the morning is Capita with shares surging as much as 15% as the company pins hopes on improving profitability and secure more contract wins in the second half of the year. In fixed income markets, core European bond yields have seen a recovery this morning with the German 10yr up 1.2bps, while outperformance has been observed in peripheral markets led by Spain and Italy.

Top European News

  • Credit Agricole Said to Plan Part Sale of Saudi Fransi Stake
  • Deutsche Bank Said to Offer Ex-Managers Portion of Their Bonuses
  • ECB Said to Be Unlikely to Include Greece in QE in Coming Months
  • U.K. Inflation Rate Rises More Than Forecast to Four-Year High
  • Heineken to Offer Deal Concessions to Appease U.K. Regulator
  • Trump Administration Reviewing Eni’s Arctic Drilling Plan
  • LSE Rises to Highest on Record as Analysts Bullish on Growth
  • Capita Soars Most Since 2002 on Update, Following Mitie Jump
  • Sweden Inflation Slows Less Than Expected in Relief for Riksbank
  • ECB’s Liikanen: Economic Recovery Not Enough to Raise Inflation
  • Italy Finance Minister Says Solution Is Close for Veneto Banks

In commodities, it has been another mixed session where on the upside we see some modest gains in Oil price this morning, which as yet looks to be corrective, though value levels in WTI seem to have drawn in buyers ahead of USD45.00. Brent is keeping its USD2.00-2.50 differential and trades in the mid USD48.00’s, but where `value’ currently stands is arbitrary to a larger degree, given the weakness has been down to the rise in US shale production which translates into greater self-sufficiency. Elsewhere, metals prices are lower, but all inside familiar territory to point to sideways price action more than anything else. Copper has dipped back towards USD2.60 and just under, but the moves above this level were somewhat of a surprise in any case. On the day, Zinc is the underperformer at down over 1.0%. Gold is still better supported than Silver as the latter has now relinquished the USD17 handle.

In currencies, the key USD rates have been in consolidation mode this morning, with USD/JPY edging back above 110.00 but with little conviction. The FOMC meeting ahead is now in focus, and while traders are not phased over the 25bp hike largely priced in, there is a sense that the market may have gotten a little overly dovish on the accompanying statement and rhetoric, but on the balance on the data, this has been justified to some degree. This morning’s data focus was on UK inflation, but despite the welcome break from politics, inflation was only slightly higher than expected (worth noting during a time of GBP appreciation), but not by enough to trouble the BoE who are set to keep policy measures as they are, and more so given fresh political uncertainty. At the start of Europe, Wesaw Cable retesting the 1.2610-40 base, and having survived tests in NY, Asia and early London, higher levels now look set to be tested at 1.2740-50 initially. EUR/GBP is also giving way a little, with sellers benefitting from the more relaxed tone in EUR/USD. The CAD continues to grind higher in the aftermath of the comments from the BoC’s Wilkins, who says it is time to assess the current stimulus levels. We cannot help but point out that the Q1 GDP data was healthy, as was Friday’s jobs report, but clearly the market required some reassurances from official quarters, so USD/CAD is now probing the next support zone into 1.3250-1.3150.

Looking at today’s calendar, we get the May NFIB small business optimism number which printed at 105.2, unchanged from last month, and missing expectations 105.2, while the May PPI report is due later in the afternoon (2.3% YoY vs. 2.5% previous).

US Event Calendar

  • 6am: NFIB Small Business Optimism, est. 104.5, prior 104.5
  • 8:30am: PPI Final Demand MoM, est. 0.0%, prior 0.5%
    • PPI Ex Food and Energy MoM, est. 0.1%, prior 0.4%
    • PPI Ex Food, Energy, Trade MoM, est. 0.1%, prior 0.7%
    • PPI Final Demand YoY, est. 2.3%, prior 2.5%
    • PPI Ex Food and Energy YoY, est. 1.9%, prior 1.9%
    • PPI Ex Food, Energy, Trade YoY, prior 2.1%

 

* * *

DB’s Jim Reid concludes the overnight wrap

Global equities were on the soft side yesterday. Over in the US the S&P 500 saw losses of -0.1% while the NASDAQ extended Friday’s declines by falling another -0.5%. However both markets were off the lows of the session. The very recent tech sell-off was the talk of the town yesterday as opinion was divided as to whether this was money leaving equities or simply a rotation back into more defensive stocks. Markets in Asia have stabilised overnight with the Nikkei -0.05% but with the Hang Seng +0.5% and the Shanghai Comp +0.3%.

In Europe the STOXX fell by -1.0%, with the DAX and FTSE also dropping by -1.0% and -0.2% respectively. Credit markets however seemed immune to these risk-off moves. In Europe iTraxx Main and Crossover tightened by -1bp and -2bps respectively. In the US CDX IG was flat on the day while HY tightened by -2bp. Turning to the government bond market, German and US 10Y yields both fell by -1bp, while their respective 2Y points were unchanged on the day – hence a small flattening. Elsewhere in Europe Gilts (2Y: -1bp; 10Y: -4bps) and French OATs (2Y: -3bp; 10Y: -5bp) saw yields drop across maturities, while Italian BTPs saw all yields beyond the 2Y point drop (10Y: -7bp). The strong performance of President Macron’s party in the first round of the French legislative elections helping as did the relatively weak performance of the 5SM in regional elections in Italy over the weekend.

Turning to FX markets now and Sterling extended Friday’s losses by dropping another -0.7% yesterday (flat overnight though). On the whole the election shock last week has compounded political uncertainty in the UK and has thrown up a number of new questions clouding the outlook for the currency. Our FX strategists published a note yesterday arguing that developments over the weekend following the election have provided sufficient evidence for a muddlethrough Brexit strategy (as previously outlined as their baseline). They highlight that it is premature for the market to start pricing the soft Brexit narrative given that no political party or grouping has an incentive to change the status quo, which would likely lead to a period of acute political paralysis in coming months. Hence the risk of a disruptive Brexit is rising – as timelines are fixed, the more decisions are delayed, the greater the risk that there is no time left to negotiate something non-disruptive. All of the above increase downside risks to an already gloomy outlook for the UK economy, leaving the BoE on hold as the Fed and ECB tighten and push interest rate differentials further against the pound. Taking these factors into consideration, the outlook for Sterling is particularly negative and the team reiterates their bearish view.

Away from Sterling, the US dollar and the Euro were both broadly flat on the day. Over in the commodity space, oil saw gains of +0.4% on the day while metals were broadly higher. Gold however failed to recoup any of its past week’s losses and remained essentially unchanged.

Going back to all things Brexit/UK related, the FT reported over the weekend that today marks the day that Brussels opines on how it will police the $850bn a day OTC Euro-denominated derivatives market that currently clears in London. This may be an early marker for how financial markets, banks and Brexit will coincide so worth watching. Also worth noting is that PM Theresa May met her influential 1922 backbench committee last night and it’s been reported that she took the blame for the party’s disappointing performance last week.

On a related theme, one of the more amusing stories yesterday was news (Reuters/ BBC) that the UK’s Queen’s speech (where the government set out the next year’s legislative agenda) scheduled for next Monday may be delayed a few days as the Conservative Party’s ‘understanding’ with the DUP Party has not been finalised yet. Although it’s expected to be agreed very soon, the Queen’s speech apparently has to be written on goat’s skin parchment paper, which takes a few days to dry.

The latest ECB CSPP numbers were out yesterday. They bought €1.421bn last week which is €355mn/day (assuming 4 days given the European holiday last Monday). The average daily run rate since CSPP started is €367mn. In relative terms, the CSPP/PSPP ratio dropped to 11.9% last week (PSPP purchases were €11.94bn) which is still mildly above the 11.6% average ratio before QE was trimmed. Since the taper it’s been 13.4% on average indicating less tapering of corporates. There’s still quite a lot of noise week to week to be a 100% confidence that corporates have been tapered less but the evidence still points in that direction.

Yesterday was a very quiet day in terms of data. The only data point of note out of Europe was the Bank of France business sentiment for May which was in line with consensus (105 vs. 104 previous). There was no real data to note out of the US. Today is a bit busier in terms of data. We kick off in the UK where we are due to receive the May inflation numbers (CPI +0.2% mom expected; RPI +0.3% mom expected; PPI +0.1% mom expected). Elsewhere in Europe we will also get the ZEW survey in Germany where survey numbers are expected to tick up marginally (Current situation: 85.0 expected vs. 83.9 previous; Expectations: 21.7 expected vs. 20.6 previous). Over in the US we get the May NFIB small business optimism number which is expected to hold steady (104.5 expected) while the May PPI report is due later in the afternoon (2.3% YoY vs. 2.5% previous).

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 13.86 POINTS OR 0.44%   / /Hang Sang CLOSED UP 144.06 POINTS OR 0.56% The Nikkei closed DOWN 9.83 POINTS OR 0.05%/Australia’s all ordinaires  CLOSED UP 1.51%/Chinese yuan (ONSHORE) closed UP at 6.7971/Oil UP to 46.20 dollars per barrel for WTI and 48.37 for Brent. Stocks in Europe OPENED IN THE GREEN       ..Offshore yuan trades  6.7907 yuan to the dollar vs 6.7971 for onshore yuan. NOW  THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE MUCH WEAKER DOLLAR. CHINA IS HAPPY TODAY WITH THE FALL IN THE USA DOLLAR 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

 North Korea releases a USA student following the arrival of Dennis Rodman.  There is one more American needs to be released. Rodman will now try and convince Kim to stop his nuclear ambitions (courtesy zero hedge) North Korea Releases US Student Following Rodman Visit

Rex Tillerson announced on Tuesday that North Korea has released Otto Warmbier, an American who was serving a 15 year jail sentence somewhere in the bowels of the hermit kingdom. The announcement came just hours after Dennis Rodman arrived in North Korea for an unexpected trip, as reported last night. Warmbier, a University of Virginia student from Cincinnati, was sentenced in March after a televised tearful public confession to trying to steal a propaganda banner.

View image on Twitter

Will Ripley @willripleyCNN

First photo: Dennis Rodman arrives in North Korea for the 5th time. He wouldn’t tell me if he’s spoken to Trump or anyone from the US gov’t.

3:40 AM – 13 Jun 2017 · North Korea Twitter Ads info and privacy

“At the direction of the President, the Department of State has secured the release of Otto Warmbier from North Korea,” Tillerson said in a statement. “Mr. Warmbier is en route to the U.S. where he will be reunited with his family.”

What he really meant is that Dennis Rodman’s unique style of “diplomacy” appears to have achieved what neither Tillerson himself, nor the previous administration had been capable of.

Tillerson’s statement gave no other details and made no mention of Rodman’s visit. But it noted that the State Department is continuing “to have discussions” with North Korea about the release of other American citizens who are jailed there. The statement said the department would have no further comment on Warmbier, citing privacy concerns.

While Rodman had said he did not plan to raise the fate of the Americans while he was in North Korea, the timing is oddly coincidental and is likely a gesture of good will by Kim toward one of his favorite basketball players.

Previously, the U.S. government had condemned Warmbier’s sentence and accused North Korea of using such American detainees as political pawns. The court held that Warmbier had committed a crime “pursuant to the U.S. government’s hostile policy toward (the North), in a bid to impair the unity of its people after entering it as a tourist.”

North Korea regularly accuses Washington and Seoul of sending spies to overthrow its government to enable the U.S.-backed South Korean government to take control of the Korean Peninsula.

 

In a tearful statement made before his trial, Warmbier told a gathering of reporters in Pyongyang he was offered a used car worth $10,000 if he could get a propaganda banner and was also told that if he was detained and didn’t return, $200,000 would be paid to his mother in the form of a charitable donation.

To be sure, this is not the first release obtained from the Kim regime: in November 2014, U.S. spy chief James Clapper went to Pyongyang to bring home Matthew Miller, who had ripped up his visa when entering the country and was serving a six-year sentence on an espionage charge, and Korean-American missionary Kenneth Bae, who had been sentenced to 15 years for alleged anti-government activities. Jeffrey Fowle, another U.S. tourist from Ohio detained for six months at about the same time as Miller, was released just before that and sent home on a U.S. government plane. Fowle left a Bible in a local club hoping a North Korean would find it, which is considered a criminal offense in North Korea.

But in this case, all prop go to Rodman, who as we concluded last night, “if he manages to persuade Kim to end his nuclear program – something no other US politicians has achieved – it will mark quite a dramatic departure in style and substance to US foreign policy.” He still has a few days left on his trip….

Hunter Schwarz @hunterschwarz

Foreign policy through celebrity and sponsored by a digital currency service for marijuana. 2017, baby pic.twitter.com/8pYLt1cIQ3

Hunter Schwarz @hunterschwarz

Some photos of Rodman, provided by his North Korean trip sponsor, PotCoin pic.twitter.com/fS1E7U85Lq

9:55 AM – 13 Jun 2017 b) REPORT ON JAPAN c) REPORT ON CHINA

A major win for China and a slap in the face of the USA. Panama establishes ties with China and cuts off relations with taiwan

(courtesy zero hedge)

In Major Win For Beijing Panama Establishes Ties With China, Cuts Relations With Taiwan

Demonstrating China’s creeping geopolitical dominance, on Monday night Panama’s President Juan Carlos Varela announced that Panama has established diplomatic ties with China while breaking relations with Taiwan in a major victory for Beijing, which continues to lure away the dwindling number of countries that have formal relations with the self-ruled island. President Varela said that the strategically important nation was upgrading its commercial ties with China and establishing full diplomatic with the country which is the second-biggest user of the Panama Canal and has played a key role in sectors from banking to telecommunications. Varela called Taiwan a great friend and said he hoped for a constructive reaction.

Panama’s government said in a statement that it recognized there was only one China, with Taiwan belonging to the Asian giant, and that it was severing ties with Taipei. “The Panamanian government is today breaking its ‘diplomatic ties’ with Taiwan, and pledges to end all relations or official contact with Taiwan,” the statement said.

“We have taken a historic step,” Varela said. “Both countries opt for the connection of a world that is more and more integrated, which creates a new era of opportunities for a relationship that we are starting today.”

“I’m convinced that this is the correct path for our country,” Varela said.

In response, Taiwan’s government said it was sorry and angry over Panama’s decision, and said it would not compete with China in what it described as a “diplomatic money game“.

“Our government expresses serious objections and strong condemnation in response to China enticing Panama to cut ties with us, confining our international space and offending the people of Taiwan,” David Lee, Taiwan’s minister of foreign affairs, told a briefing in Taipei quoted by Reuters.


Taiwan’s President Tsai Ing-wen and Panama’s Juan Carlos Varela during a welcome ceremony
before a meeting at the Presidential Palace in Panama City, Panama June 27, 2016.

As Bloomberg adds, the diplomatic U-turn reduces to 20 the number of nations that recognize the government in Taipei, rather than Beijing, as representing China. The Communist Party considers Taiwan a province and has criticized President Tsai Ing-wen’s refusal to accept that both sides belong to “One China,” its precondition for ties. Taiwan Presidential office spokesman Alex Huang said earlier that he couldn’t comment before any announcement by Panama.

In December, the West African island nation of Sao Tome and Principe cut diplomatic relations with Taiwan. Beijing formally reestablished relations with Gambia last March – another former Taiwanese partner in West Africa – and has stepped up communications with others, such as the Vatican.

The establishment of links with Panama is a coup for China, which has been showering largesse on countries throughout Central America in recent years in an attempt to get them to break ties with Taiwan. As recently as December, Panama’s deputy foreign minister had said he did not expect any change in Panama’s relations with Taiwan or China. Panama is one of Taiwan’s oldest friends, but some diplomats in Beijing had speculated that the Central American country could become the next nation to break ties.

China is deeply suspicious of Taiwan President Tsai Ing-wen, who it thinks wants to push for the island’s formal independence, although she says she wants to maintain peace with Beijing.

 

China and Taiwan have tried to poach each other’s allies over the years, often dangling generous aid packages in front of developing nations, although Taipei struggles to compete with an increasingly powerful China.

Tsai visited Central American allies earlier this year but did not stop in Panama.

In Beijing, Panama’s foreign minister de Saint Malo said President Varela had expressed 10 years ago his interest in establishing ties with China, and that she hoped the move would lead to trade, investment and tourism opportunities, especially for “exporting more goods from Panama to China”.

Monday’s diplomatic move could also raise questions about the future of a Chinese-backed project to build another Central American waterway to rival the Panama Canal in Nicaragua. Earmarked at a cost of $50 billion, the Nicaraguan scheme was met with widespread incredulity when it was announced in 2013, and critics have raised questions about its feasibility.

* * *

In response to the announcement, Taiwan said it would immediately end cooperation with and assistance for Panama, and evacuate embassy and technical personnel “in order to safeguard our national sovereignty and dignity”, Lee said.

Panama is the second country to switch its recognition to Beijing since Tsai took office last year, following a similar move by Sao Tome and Principe in December, trimming to 20 the number of countries that formally recognize Taiwan. Taiwan had as many as 30 diplomatic allies in the mid-1990s, and its remaining formal ties are with mostly smaller and poorer nations in Latin America and the Pacific.

China’s Foreign Minister Wang Yi met his counterpart from Panama, Isabel de Saint Malo, in Beijing on Tuesday and signed a joint communiqué establishing ties.

 

end

The USA is not the only country with auto sale problems.  China posts it’s first consecutive monthly drop in car sales in over 2 yrs

(courtesy zero hedge)

China Auto Sales Post First Consecutive Monthly Drop Since 2015

The Chinese auto market is having it’s own version of a “cash for clunkers” moment.  After artificially pulling sales forward for all of 2016 with a purchase tax that was cut in half from 10% to 5%, the Chinese auto market is now suffering the consequences of removing that stimulus.  As Reuters notes, Chinese auto sales have declined sharply so far in 2017 with April and May registering the first consecutive monthly declines since 2015.

Chinese auto sales slipped in May from a year ago, registering two straight months of declines for the first time since 2015, with the automakers’ association saying the weakness may drag on as the rollback of a tax incentive continues to hurt.

 

The world’s biggest auto market got a shot in the arm in 2016, growing at its fastest pace in three years, after Beijing halved the purchase tax on smaller-engined vehicles. But buyers have shied away since taxes climbed to 7.5 percent, from 5 percent, at the start of this year.

 

Auto sales in China fell 0.1 percent in May from a year ago to 2.1 million vehicles, China Association of Automobile Manufacturers (CAAM) said on Monday. In April, sales recorded their steepest fall in 20 months.

 

Of course, for those of old enough to remember 2009, the U.S. auto market had it’s own, albeit short-lived, experience with massive government subsidies for auto purchases.  Unfortunately, sales crashed as soon as the stimulus was removed.

 

Meanwhile, as China Association of Automobile Manufacturers spokesman Xu Haidong notes, the downturn in China is probably far from over given that auto purchases taxes will increase again in 2018 back to their original 10%.

The current downturn in China’s auto market could extend through July or August, said Xu Haidong, a CAAM spokesman.

 

“Last year was just too strong and now the policy impact is fading away,” said Yale Zhang, managing director of Shanghai-based consultancy Automotive Foresight. “The growth (last year) overdrew some of the demand.”

 

China’s auto market recorded a 13.7 percent rise in sales last year, helped by the tax incentive. The purchase tax on vehicles with engines of 1.6 litres or below will rise to the normal 10 percent next year.

Seems as though China is experiencing an auto plateau of their own…

4. EUROPEAN AFFAIRS 5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Interesting;  Putin meets the founder of block chain Ethereum

(courtesy zero hedge)

Putin Meets With Ethereum Founder To Create National Virtual Currency

Two weeks ago, in our latest comparison of Bitcoin and its up and coming competitor, Ethereum, we said “step aside bitcoin, there is a new blockchain kid in town.” Actually, we said that for the first time back in February when Ethereum was still trading in the low teens (the return on ETH since then is roughly 3000%), but the most recent glance provided some perspective on where the competition between the two largest cryptocurrencies may culminate, because according to at least two venture capitalists, the market cap of Ethereum – currently roughly $35 bilion – and whose share of the market has been soaring, will surpass that of Bitcoin, at ~$43 billion although it changes by the second, sometime before the end of 2018.

Two things: first, at the current rate of gains in Ethereum market share (and loss in Bitcoin’s), the inflection point between the two will come not in months, or weeks, but perhaps days.

Second, said inflection point may come in even faster if Vladimir Putin has anything to say about it, because as Bloomberg reports, “Ethereum has caught the attention of none other than the Russian president as a potential tool to help Russia diversify its economy beyond oil and gas.” Putin met Ethereum’s young founder Vitalik Buterin on the sidelines of the St. Petersburg Economic Forum last week and supported his plans to build contacts with local partners to implement blockchain technology in Russia, according to a statement on Kremlin’s website.

Speaking at the Economic Forum, Putin said that “the digital economy isn’t a separate industry, it’s essentially the foundation for creating brand new business model” and discussed means to boost growth long-term after Russia ended its worst recession in two decades. As explained repeatedly over the past 6 months, besides being a method of exchange, Ethereum is also a ledger for everything from currency contracts to property rights, speeding up business by cutting out intermediaries such as public notaries. It also does not suffer from some of the size limitations that have paralyzed bitcoin in recent months.

Furthermore, just like the western Enterprise Ethereum Alliance which consists of JPMorgan, Intel, Microsoft and other leading blue chips, Russia’s central bank has already deployed an Ethereum-based blockchain as a pilot project to process online payments and verify customer data with lenders including Sberbank PJSC, Deputy Governor Olga Skorobogatova said at the St. Petersburg event. She didn’t rule out using Ethereum technologies for the development of a national virtual currency for Russia down the road.

Adoption of Ethereum in Russia has been brisk also in the private sector: last week, Bloomberg reports that Russia’s state development bank VEB agreed to start using Ethereum for some administrative functions. Steelmaker Severstal PJSC tested Ethereum’s blockchain for secure transfer of international credit letters.

Blockchain may have the same effect on businesses that the emergence on the internet once had — it would change business models, and eliminate intermediaries such as escrow agents and clerks,” said Vlad Martynov, an adviser for The Ethereum Foundation, a non-profit organization that backs the cryptocurrency. “If Russia implements it first, it will gain similar advantages to those the Western countries did at the start of the internet age.”

What about price targets? Pavel Matveev, co-founder of Wirex told CNBC today that Ethereum could reach $600 by the end of the year, leaving bitcoin in the dust. Until just a few short weeks ago, such a forecast would seem ludicrous. However, considering the recent surge in ethereum prices – recall it hit an all time high of $412 earlier today before sharply dropping then again erasing virtually all losses – it may reach that particular target in just a few weeks.

END

 

QATAR

This is going to be expensive:  In order to bypass the embargo, Qatar will pay 8 million dollars to airlift 4,000 cows.  The cows will fly business class instead of economy.

(courtesy zero hedge)

 

To Bypass Food Embargo, Qatar Will Pay $8 Million To Airlift 4,000 Cows

Yesterday we reported that as the Qatar crisis continues with no resolution in sight, in an act of generosity toward its distressed Gulf neighbor, Iran dispatched four cargo planes of food to Qatar and plans to provide 100 tonnes of fruit and vegetable every day. Qatar has also been holding talks with Iran and Turkey to secure food and water supplies after Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut links, accusing Doha of supporting terrorism.

However, any stopgap measures implemented so far are not nearly enough to compensate for all the food imports lost as a result of the gulf blockade. So, for the nation with the highest GDP/capita in the world, where money is largely not an object, an ingenious solution has emerged.

Call it the biggest bovine airlift in history, as Bloomberg puts it. Because while the “showdown between Qatar and its neighbors has disrupted trade, split families and threatened to alter long-standing geopolitical alliances”, it has prompted one enterprising Qatari businessman to fly 4,000 cows to the Gulf desert in an act of resistance and opportunity to fill the void left by a collapse in the supply of fresh milk.

The reason for the dramatic “solution” to the millk embargo is that most of Qatar’s fresh milk and dairy products, meant for Doha’s more than 1 million residents, came from Saudi Arabia up until a week ago. That supply was cut off after the kingdom and its allies cut transport links with “a country that spends $500 million a week to prepare stadiums and a metro before the soccer World Cup in 2022.”

According to Bloomberg’s calculations, it will take as many as 60 flights for Qatar Airways to deliver the 590-kilogram beasts that Moutaz Al Khayyat, chairman of Power International Holding, bought in Australia and the U.S. “This is the time to work for Qatar,” he said. In addition to the abovementioned airlifted Turkish dairy goods and Iranian fruit and vegetables, there’s also a campaign to buy home-grown produce. Signs with colors of the Qatari flag have been placed next to dairy products in stores. One sign dangling from the ceiling said: “Together for the support of local products.”

“Our government has made sure we have no shortages and we are grateful for that. We have no fear. No one will die of hunger.”

“It’s a message of defiance, that we don’t need others,” said Umm Issa, 40, a government employee perusing the shelves of a supermarket before taking a carton of Turkish milk to try.

Only you do, and those who provide the much needed milk will get even richer than they already are.

For Al Khayaat, whose main business is a construction firm that built Qatar’s biggest mall, the cow-a-drop may be a slam dunk business decision. He has been expanding the company’s agricultural business at a farm 50 kilometers north of Doha. Food security is part of Qatar’s government strategy to steer the economy away from petrodollars, known, like in Saudi Arabia, as “Vision 2030.” And what better way to aggressively grow that business than at a time when it is your countrymen’s patriotic duty to buy your goods.

On a site covering the equivalent of almost 70 soccer fields, new grey sheds line two strips of verdant grass in the desert with a road running through the middle up to a small mosque. It produces sheep milk and meat and there were already plans to import the cows by sea. Then Qatar was ostracized, so the project was expedited.

Fresh milk production will start by the end of the month rather than September and will eventually cover a third of Qatar’s demand by mid-July, Al Khayyat told Bloomberg at his office in Doha. Facilities for the Holstein cows are ready, though the company will take a hit on the shipping cost for the animals, which increased more than five times to $8 million.

Which amounts to $2,000 per cow. At that price, it was not immediately clear if the cows would fly business or first class.

END

Qatar receives much of its shipment of dollars from the UAE and now that it blocked. QATAR is running out of dollars!

(courtesy zerohedge)

Qatar Is Running Out Of Dollars

While the Saudi-led campaign to starve Qatar’s citizens may end up short of the target, with both Turkey and Iran volunteering to provide needed staples to the isolated Gulf nation while local entrepreneurs have started a cow paradropping campaign to offset the decline in milk imports, a more pressing problem has emerged: Qatar’s financial system is running out of dollars. As Bloomberg reports, several Qatari banks have boosted interest rates on dollar deposits to shore up liquidity as the Saudi-led campaign to isolate the gas-rich Arab state intensifies.

To boost their hard currency reserves, Qatar banks are now offering a premium of as much as 100 basis points over LIBOR to attract dollars from regional banks, some 80 bps higher compared to the rate they offered prior to last week’s crisis. A similar picture is visible on the 3-Month QIBOR, or Qatar Interbank Rate, which has surged to 2.3% as of Tuesday.

According to the central bank, at the end of April, Qatar’s banks held 21.4% of their customer deposits in foreign currency. Non-resident deposits made up 24% of the overall deposits of 781 billion riyals ($213 billion). A separate estimate from SICO Bahrain, Qatari banks have around 60 billion riyals ($16.5 billion) in funding in the form of customer and interbank deposits from other Gulf states. Most of this could eventually be withdrawn if the crisis continues.

Adding to concerns of a monetary blockade, Bloomberg also reports that some banks in neighboring countries have been cutting their exposure to Qatar amid concerns of a widening of the blockade.

In a Tuesday report, Capital Economics’ Jason Tuvey wrote that while banks are unlikely “to be thrust into a crisis,” borrowing costs “look set to rise and banks are likely to become more cautious with their lending,”  “If local banks struggle to rollover their external debts, they could be forced to shrink their balance sheets and tighten credit conditions.” For now the local central bank has said that Qatar’s banking system is functioning without disruption, although market indicators suggest liquidity stress is rising. Likewise, Qatar National Bank, the biggest lender in the Middle East, said it didn’t see any “significant” rate increases since the standoff began, according to statement emailed to Bloomberg on Tuesday.

The good news for Qatar – the world’s wealthiest nation on a GDP/capita basis – is that it has enough financial firepower to withstand a prolonged financial siege, and defend its currency and economy, Finance Minister Ali Shareef Al Emadi told CNBC in an interview broadcast Monday. Al Emadi played down the impact of the crisis on the country, saying the plunge in Qatari assets last week was a “normal” reaction to the standoff.

While so far there has been no suggestion that Qatar would commence liquidating its reserves, investors have already begun selling Qatari assets and speculating against the riyal, concerned how long Qatar can weather the crisis without having to devalue its currency or sell any of its global holdings. Qatar’s 12-month riyal forwards closed at 588 basis points against the dollar on Monday, the highest level since at least 2001, according to data compiled by Bloomberg. Rates eased slightly to about 500 basis points on Tuesday.

Despite the spike in interbank rates, S&P is confident that Qatari banks are strong enough to survive the pullout of all Gulf money and then some. The ratings agency ran two hypothetical scenarios of capital flight, and concluded that Qatar’s lenders could survive the withdrawal of all Gulf deposits plus a quarter of the remaining foreign funds the banks keep. Still, that did not prevent S&P from lowering Qatar’s long-term rating by one level to AA- last week.

Separately, Reuters reports, that the dollar shortage has also spread over to money exchange houses in Qatar on Sunday, making it harder for worried foreign workers to send money home.

“We have no dollars because there is no shipment or transportation from the United Arab Emirates. There is no stock,” said a dealer at the Qatar-UAE Exchange House in Doha’s City Center mall.“The shipment is blocked from the UAE” the dealer added, although it was not quite clear if it was physical cash that was being transported.

Other exchange houses in Doha also told Reuters they had no supplies of dollars. At Qatar-UAE Exchange, dozens of people – some of the foreigners who comprise nearly 90 percent of the population of 2.6 million – waited quietly in line to change money or make remittances to their home countries.

“I spoke with my wife this morning. She said, ‘Send your savings to me now.’ I am not panicked but my family are scared,” said John Vincent, an air-conditioning repairman from the Philippines.

“I sent 2,000 riyals ($550) home but I have some more savings left here in Qatar. I will see what the situation is in coming days before I decide what to do.”

Sudhir Kumar Shetty, president of UAE Exchange, which has eight branches in Qatar, said his firm was continuing to handle remittances and currency buying as usual in that country. He said the firm hadn’t seen any major change in remittance volumes due to the diplomatic tension.

 

But he added that dollar supply was not meeting demand in Qatar and attributed this partly to flows of the U.S. currency from other Gulf countries being disrupted.

 

“Everywhere, all the banks and exchange houses, there are no dollars. All the exchange houses are trying to get currencies from other countries,” the dealer at Qatar-UAE Exchange said, adding that his firm was hoping for a shipment from Hong Kong.

For now most Western banks with a presence in Qatar have continued business as normal, partly because they did not want to lose out on billions of dollars of building projects which Qatar plans before it hosts the soccer World Cup in 2022.  But other Western banks have halted new Qatar business including interbank and syndicated lending, while continuing to service existing business, banking sources said, declining to be named because of political sensitivities.

“Everybody is shocked – they’re not worried about Qatar’s credit, they’re worried about compliance and the risk that the local sanctions could be escalated to an international level,” said one foreign banker in the region.

In a worst case scenario, bankers expect Qatari banks to borrow from the central bank’s repo facility if they become short of funds. However, central bank rules limit the size of the repos to 2% of each bank’s private sector deposits. Bankers speculate the central bank may lift this cap although the central bank did not respond to Reuters requests for comment.

6 .GLOBAL ISSUES

end

7. OIL ISSUES

So much for OPEC’s production cuts

(courtesy zero hedge)

.

OPEC Oil Production Rises Most In 6 Months, Hits Highest Since December

Well, so much for OPEC’s production cut.

In OPEC’s latest Monthly Oil Market Report, the oil producing cartel reported that in May – the same month OPEC met to extend its production cuts – crude output climbed the most in six month, since November 2016, rising by 336.1kb/d to 31.139 mmb/d, the highest monthly production of 2017, as members exempt from the original Vienna deal restored lost supply.

From the report:

Preliminary data indicates that global oil supply increased by 0.13 mb/d in May to average 95.74 mb/d, m-o-m. It also showed an increase of 1.48 mb/d, y-o-y. A decrease in non-OPEC supply, including OPEC NGLs represents a contraction of 0.21 mb/d m-o-m but an increase of 0.34 mb/d in OPEC crude oil production, not only offset the decline of non-OPEC supply but also increased overall global oil output in May. The share of OPEC crude oil in total global production stood at 33.6% in May, an increase of 0.3% from the month before. Estimates are based on preliminary data for non-OPEC supply, direct  communication for OPEC NGLs and non-conventional liquids, and secondary sources for OPEC crude oil production

Specifically, Libya pumped 730k b/d in May, up 178kb/d from 552kb/d in April; Nigeria output jumped to 1.68m b/d vs 1.506m b/d, a 174kb/d increase, while even the biggest producer Saudi Arabia, saw its output grow by 2.3kb/d to 9.94mb/d vs 9.938m b/d in April.

Not surprisngly, in an attempt to preserve the “reduction” narrative, in its self-reported figures, Saudi Arabia told OPEC via direct communication that it produced 9.88mb/d in May, down 66.2kb/d from April’s 9.946mb/d, although these figures are looking increasingly suspect.

Perpetuating its existence of forced self-delusion, OPEC predicted that surplus oil inventories would continue to decline in 2H 2017 as their cuts (what cuts) take effect and demand picks up. “The re-balancing of the market is underway” OPEC wrote, conceding that it is taking place “at a slower pace” and adding that “the decline seen in the overhang” in developed-nation stockpiles “is expected to continue in the second half, supported by production adjustments by OPEC and participating non-OPEC producers.” There was little discussion of the soaring US shale output, which as we wrote last night is expected to hit an all time high next month.

From the monthly report:

The decline seen in the overhang in OECD commercial oil inventories in the first four months of the year – from 339 mb to 251 mb compared to the five-year average (Graph 2) – is expected to continue in the second half, supported by production adjustments by OPEC and participating non-OPEC producers.

 

 

These trends along with the steady decline in oil in floating storage, indicate that the rebalancing of the market is underway, but at a slower pace, given the changes in fundamentals since December, especially the shift in US supply from an expected contraction to positive growth. In light of these developments, OPEC and the participating non-OPEC countries decided to extend production adjustments for a further period of nine months in recognition of the need for continuing cooperation among oil exporting countries in order to achieve a lasting stability in the oil market.

Additionally, OPEC lowered forecasts for Russia production in 2H by 200k b/d, while the overall outlook for non-OPEC supply in 2H was reduced by 200k b/d, vs pledge of total reduction of ~558k b/d. The surplus in oil inventories in developed nations relative to their five-year average — OPEC’s main measure of the overhang — is down to 251m bbl from 339m at end-2016.

The report kept 2017 global oil demand growth forecast unchanged from previous month’s estimate at 1.27m b/d y/y, while it cut full year non-OPEC supply growth estimate to 840k b/d y/y, a downward revision of 110k b/d.  Which is, of course, wrong if Goldman’s forecast for shale production is even remotely accurate.

END

Shale production will hit its all time high in July and then rise from there!

(courtesy zero hedge)

Shale Production Will Hit An All Time High Next Month… And That’s Just The Beginning

While the June oil production data is still pending, it is safe to say that the June oil output from US shale producers – estimated today by the EIA at 5.348mb/d – will post the first double-digit production growth since July of 2015, when oil prices tumbled and a substantial portion of US production was briefly taken offline.


Chart courtesy of Forge River Research

Indicatively, while over the past year total U.S. production is up roughly 525kb/d, virtually all of it, or 98.5%, is the result of horizontal rig production in the Permian Basin, where output is up by 507kb/d.

The Permian basin has been leading the increase in horizontal oil rig count (+178%)

More important, however, is that according to the latest EIA Daily Prodctivity Report forecast released today, in July total shale basin output is expected to rise by 127kb/d in one month, hitting 5.475 mmb/d, and surpassing the previous record of 5.46 mmb/d reached in March 2015.

Needless to say, this is bad news for OPEC, which continues to price itself out of the market by not only keeping prices high enough to make production profitable for US companies, but by allowing shale to capture an increasingly greater market share.

Worse news is that shale is just getting started: both the Energy Information Administration, OPEC and the International Energy Agency have chronically underestimated the contribution of U.S. crude oil supplies in their forecasts. As Shale River notes, each has significantly increased their estimates for 2017 U.S. crude oil production during the year, with recent upward revisions larger than prior increases. In fact, the EIA recently conducted its 11th consecutive upward revision of its 2017 estimate.

But the worst news – for OPEC yet again – is in the long-term, where if 5.5mmb/d is considered a record, just wait until shale hits more than double that amount, or over 12mmb/d, which Goldman expects will be achieved some time in the 2020s.

The reason: shale breakeven costs are dropping on a monthly, if not weekly basis, and which over the next 4 years Goldman expects will plunge to prices where US production will become competitive with the lowest-cost OPEC producers: Saudi, Iran and Iraq.

Impossible? The chart below showing the collapse in breakevens in the past 9 years suggests otherwise:

Here is Goldman:

We believe the Big 3 shale plays (Permian Basin, Eagle Ford Shale and Bakken) combined with Cana Woodford plays (SCOOP/STACK) and the DJ Basin can together drive on average 0.8 mn bpd of annual production growth through 2020 and 0.7 mn bpd of annual production growth in 2021-25. We see production plateauing towards the end of the next decade at present. Importantly, as described below, we  still see room for additional productivity gains; our estimates incorporate expectations for 3%-10% productivity gains per year through 2020.

 

While rest of the world is finding ways to move breakevens down towards $50/bbl WTI, we still see shale as the dominant source of growth and as a critical source of short cycle production. Our global cost curve from our recent Top Projects report shows continued decline in shale breakevens, though at a smaller pace vs. in past years. Outside of shale, we increasingly see industry – majors, national oil companies (NOCs) and governments – working to accommodate new projects that break even at $50/bbl WTI or less with a goal of becoming more competitive with shale. This largely is occurring through a combination of improved tax/royalty terms by host governments, more limited scale by producers (smaller projects that come online more quickly) and cost reduction/efficiency gains. We still see production from new projects falling off towards the end of the decade as a result of the reduction in investment after oil prices collapsed post-2014. As such, we expect shale will continue to be a critical source of marginal supply because shale along with OPEC spare capacity are the principal sources of short-cycle supply.

The bad news for OPEC is that it is trapped when it comes to oil prices: on the bottom by plunging state revenues and booming budget deficits, which spell out austerity, social instability and eventually revolution if prices are not boosted, and on the top by shale technological advances, which consistently reduce breakeven prices, and allow shale to stale market share from OPEC the longer prices are kept artificially high.

The solution, short-term as it may be at least according to Goldman, is that oil prices “need to stay lower for longer.” That however is a non-starter with Saudi Arabia, which for obvious reasons, is rushing to IPO Aramco before math and physics finally declare victory over cartel-controlled supply, and oil prices crash. It remains to be seen if it is successful.

end

Not good for oil:  a death cross/ 50 day moving averaging crossed below the 200 day moving average. Generally this means oil is heading down

(courtesy zero hedge)

Oil Prices Suffer First ‘Death Cross’ Since 2014 Collapse

For the first time since September 2014, after which oil prices collapsed almost 75%, Brent and WTI Crude futures both just flashed a ‘death cross’ signal as the 50-day moving-average crossed below the 200-day moving-average.

The crossover is typically seen a loss of short-term momentum and last occurred in the second half of 2014, when prices collapsed due to oversupply amid surging U.S. shale oil production.

 

As Bloomberg notes, OPEC and its partners will be hoping their efforts to curb output will be enough to support prices and counteract any fears of growing downside risk.

 

However, this morning’s news of “real” OPEC production may raise more doubts about the cartel’s commitment (and going forward, the Qatar debacle won’t help).

8. EMERGING MARKET

end

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings TUESDAY morning 7:00 am

Euro/USA   1.1211 UP .0014/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA RAISING INTEREST RATES/EUROPE BOURSES ALL IN THE GREEN 

USA/JAPAN YEN 110.06 UP 0.141(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2726 UP .0057 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT

USA/CAN 1.3261 DOWN .0050 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS TUESDAY morning in Europe, the Euro ROSE by 14 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1211; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  UP 13.96 POINTS OR 0.44%     / Hang Sang  CLOSED UP 144.06 POINTS OR 0.56% /AUSTRALIA  CLOSED UP 1.51% / EUROPEAN BOURSES OPENED ALL IN THE GREEN 

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this TUESDAY morning CLOSED DOWN 9.83 POINTS OR 0.05%

Trading from Europe and Asia:
1. Europe stocks  OPENED ALL IN THE GREEN

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 144.06 POINTS OR 0.56%  / SHANGHAI CLOSED UP 144,06 POINTS OR 0.56%   /Australia BOURSE CLOSED UP 1.51% /Nikkei (Japan)CLOSED DOWN 9.83 POINTS OR 0.05%    / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1262.10

silver:$16.80

Early TUESDAY morning USA 10 year bond yield: 2.216% !!! UP 1 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.876, UP 0  IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 97.05 DOWN 9  CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 2.949%  DOWN 4 in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.064%  UP 1/2  in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.436%  DOWN 1 IN basis point yield from MONDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.981 DOWN 4   POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 46 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.266%UP 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

Closing currency crosses for TUESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM 

Euro/USA 1.1203 UP .0005 (Euro UP 5 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 109.96 UP  0.047 (Yen UP 5 basis points/ 

Great Britain/USA 1.2745 UP 76 ( POUND UP 76 basis points) 

USA/Canada 1.3241 DOWN .0070 (Canadian dollar UP 70 basis points AS OIL ROSE TO $46.34

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This afternoon, the Euro was UP by 5 basis points to trade at 1.1203

The Yen FELL to 109.96 for a LOSS of 5  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 76  basis points, trading at 1.2745/ 

The Canadian dollar ROSE by 70 basis points to 1.3241,  WITH WTI OIL RISING TO :  $46.34

The USA/Yuan closed at 6.7991/ the 10 yr Japanese bond yield closed at +.064% UP 1/2 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 1 IN basis points from MONDAY at 2.204% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.862  UP 1  in basis points on the day /

Your closing USA dollar index, 97.03 DOWN 14 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for TUESDAY: 1:00 PM EST

London:  CLOSED DOWN 11.43 POINTS OR 0.15%
German Dax :CLOSED UP 74.54 POINTS OR 0.59%
Paris Cac  CLOSED UP 21.15 POINTS OR 0.40% 
Spain IBEX CLOSED  UP 39.70 POINTS OR 0.37%

Italian MIB: CLOSED  UP 178.55 POINTS/OR 0.85%

The Dow closed UP 92.80 OR 0.44%

NASDAQ WAS closed DOWN 44.91 POINTS OR 0.73%  4.00 PM EST
WTI Oil price;  46.34 at 1:00 pm; 

Brent Oil: 48.52 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  56.90 UP 14/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES T0  +0.247%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$46.46

BRENT: $48.22

USA 10 YR BOND YIELD: 2.209%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.865%

EURO/USA DOLLAR CROSS:  1.1208 UP .0011

USA/JAPANESE YEN:110.04  DOWN 0.121

USA DOLLAR INDEX: 97.00  DOWN 13  cent(s) ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2752 : UP 83 POINTS FROM FRI NIGHT  

Canadian dollar: 1.3241 UP 69  BASIS pts 

German 10 yr bond yield at 5 pm: +0.247%

END

And now your more important USA stories which will influence the price of gold/silver TRADING IN GRAPH FORM FOR THE DAY ‘Teflon’ Tech Stocks Bounce Despite The Biggest Outflows Since 2007  

Every effort was made to stomp VIX to lift stocks ahead of The FOMC…

 

Stocks levitated at the open, dipped into the EU close, drifted sideways, then ramped on a tumbling VIX in the last hour…S&P, Dow, And Russell 2000 Record Highs…

 

Since Thursday’s close only Nasdaq remains red…

 

Of course, with The Fed due to hike rates tomorrow (June odds 100%), we are not surprised stocks were bid in that magical ‘drift into FOMC’ manner… it’s just that economic data has utterly collapsed since The Fed last hiked rates…

 

As ‘Soft’ Data collapses back to ‘Hard’ data’s reality…

 

The rout in U.S. technology shares over the past few days spurred the biggest outflows from the industry’s benchmark exchange-traded fund since the depths of the financial crisis in Nov 2007.

 

Additionally, option traders also rushed to hedge against losses with 1.42 million put contracts changing hands — the busiest session since September 2008.

 

Nasdaq VIX continued its decline…

 

S&P VIX slid back to a 10 handle…NOTE that Nasdaq only managed to get back to its pre-flash-crash ledge and was unable to break above

 

Notably, FANG stocks closed higher, but made lower highs on the day…

 

But remain down from Thursday’s close…

 

Of course, there is still plenty to keep FANG stocks higher…

 

Treasuries were mixed today with very modest gains (yield lower) at the long-end and yields higher at the short-end…

 

2s10s and 2s30s have flattened dramatically once again…

 

The Dollar Index slid lower once again

 

Gold and Silver closed down for a 5th day in a row…

 

WTI/RBOB rallied modestly today (back above $46 and 1.50 respectively) ahead of API data tonight…

 

Oh and Record high Russell 2000… as 2017 EPS expectations hit 2017 lows…

 

END

This is not good news for the state of Illinois as unpaid bills continue to mount.  Without a shadow of a doubt they will be downgraded in July to junk which will cause a massive increase of payments by the state to cover default provisions with respect to bond covenants with the bond purchases by individuals and corporations on prior deals.  The deals stipulated extra payments if the state is downgraded to junk.

 

(courtesy zero hedge)

Illinois Bond Spreads Explode As Market Pukes On Latest Batch Of Bad News

On June 1, first S&P the Moody’s almost concurrently downgraded Illinois to the lowest non-Junk rating, BB+/Baa3 respectively, with both rating agencies warning that the ongoing legislative gridlock and budget crisis need to be resolved, or else Illinois will be the first ever US state downgraded to junk status.

S&P analyst Gabriel Petek explicitly warned that “the unrelenting political brinkmanship now poses a threat to the timely payment of the state’s core priority payments“ and warned about Illinois’ inability to pass a budget for the past two years amid a clash between the Democrat-run legislature and Republican Governor Bruce Rauner. As we have documented previously, the ongoing confrontation has left the fifth most-populous US state with a record $14.5 billion of unpaid bills, ravaged entities like universities and social service providers that rely on state aid and undermined Illinois’s standing in the bond market, where investors have demanded higher premiums for the risk of owning its debt.

Bypassing its traditional 90-day review, a terse S&P also warned that Illinois will likely be downgraded around July 1, when the new fiscal year begins if leaders haven’t agreed on a budget that starts addressing the state’s chronic deficits.

Unfortunately for Illinois, and its bondholders, the downgrade – and the subsequent imminent “junking” – was just the tip of the iceberg.

As Bank of America wrote in its latest muni market report, among the $14.7bn backlog of bills (as of 5 June) to be paid by the state of Illinois due to the protracted budget impasse is some $2bn-plus in Medicaid-related payments owed to the private insurers the state contracted with to manage roughly two-thirds of its Medicaid recipients. Those payments amount to some $300mn per month. A number of private insurers have sued in U.S. District Court for the Northern District of Illinois to prioritize their payments over those due to other vendors.

Then last Wednesday, following the Illinois downgrades, the court ruled against the state. The judge ordered the parties to “continue to negotiate to achieve substantial compliance with the consent decrees in these cases. If they cannot reach a negotiated solution, either party may make an appropriate motion, to be noticed for presentment on June 20, 2017.”

The day before the court ruled, the state submitted a filing with the Court, arguing that should the court prioritize those payments – effectively making them on par with so-called “core payments” which include debt service – it could trigger another downgrade from the rating agencies. Indeed, included in Moody’s downgrade report under the headline “Factors that could lead to a downgrade,” Moody’s points to “[c]ourt rulings that increase the volume of payment obligations that are legally prioritized.”

The state asked the court in that filing that, if it were to rule against the state and prioritize those Medicaid payments, that it make its order effective 1 July, requesting so for two reasons:

  • It “likely will avoid an immediate downgrade and also would send a message to the Illinois General Assembly and Governor that they have until June 30 to resolve the State’s budget impasse and avoid the consequences of the Court’s order. If the budget impasse is not resolved by July 1, that fact alone likely will lead to a rating downgrade, regardless of the effective date of the Court’s order.”
  • It “will give Defendants some additional time to determine how to comply with the Court’s order.”

Additionally, the Illinois Comptroller warned against an adverse ruling, saying the state would “have to go to the courts and ask them: ‘OK, out of all of these court-mandated payments, which ones am I allowed to violate?'”

With all that, the court still ruled against the state saying that the Court said it believes the Comptroller “faces an unenviable situation,” though it finds “that minimally funding the obligations of the decrees while fully funding other obligations fails to comply not only with the consent decrees, but also with this court’s previous order.”

So for anyone confused, here is a summary of what happened: a judge ruled last Wednesday the state is violating consent decrees and previous orders, and instructed the state to achieve “substantial compliance with consent decrees in these case.” The order may prioritize those payments, elevating them to the level of “core payments,” such as for debt service. The state has warned that could trigger an immediate downgrade from Moody’s. The state asked the court that the order become effective on 1 July as it could pressure the state to end its protracted budget impasse.

* * *

Separately, there was a glimmer of hope for the woefully underfunded state: according to the Illinois Commission on Government Forecasting and Accountability’s (CGFA) May Monthly briefing, May net revenues of $2.19bn were up $144mn, or 7.0% compared to the same month a year ago. Personal income tax collections performed well during the month, bringing in $1.17bn, $179mn, or 18.1% more than in April 2016. Sales tax collections also performed well, outperforming April 2016’s collections by $36mn, or 5.5%. However, the state’s other significant revenue stream – the corporate income tax – underperformed, with collections of $81mn coming in $72mn, or 47.1% less than a year ago.

And while April marks the third consecutive month of Y/Y outperformance, a glimmer of sunshine in an otherwise dready Illinois monetary landscape, the recent burst in receipts is likely a fluke especially since fiscal year-to-date collections of $26.54bn are $955mn, or 4.3% behind last year. The culprit: local businesses, as corporate income tax collections have been the main cause under-performance, falling $909mn, or 41.3% on a year-over-year basis.

What happened next? As Bank of America writes, with bondholders still digesting the recent downgrades and the inevitable downgrade to junk, news of the adverse court ruling caused spreads on Illinois’ GOs to blow out. As of last Thursday, the month-to-date spreads on Illinois widened by 69bps, surging just shy of 250 bps as the market absorbed the headlines. Then according to Bloomberg, the OAS on Illinois 5% GO due Mah 2015, soared nearly 40 bps since last Thursday.

The chart below shows how the spreads have moved wider each day since the month began. On Thursday the spread widened out by 28bps, compared to average 8.2bps it moved the previous five days. Since then the move has accelerated.

Finally, Reuters today reported that Illinois appears to have essentially thrown in the towel on getting junked,  and has negotiated lower credit rating termination triggers for its interest-rate swap deals with banks, “which stood to pocket fat fees if the state is downgraded to junk as soon as next month, a spokeswoman for the governor’s office said on Monday. ”

Eleni Demertzis, the governor’s spokeswoman, said the rating levels that would trigger the termination of four swaps – two with Barclays Bank, and one each with Bank of America and JP Morgan – were dropped a notch to the second level of junk – BB with S&P or Ba2 with Moody’s.

Without this step, downgrades to the first level of junk by S&P or Moody’s Investors Service could have forced the cash-strapped state to pay the banks as much as $39 million in fees to end the swaps, according to the Illinois Comptroller’s office.

In short, while Illinois won’t be punished with higher swap termination costs when the downgrade to junk hits, all other negative side effects of being the first “fallen angel” state in history will remain, chief among them far higher borrowing costs.

* * *

And while the recent blow out in spreads has been nothing short of stunning for the otherwise sleepy muni market, a far bigger problem awaits both Illinois, which faces substantially higher borrowing costs, and bondholders, whose principal losses are starting to hurt, if the state fails to pass a budget for the third consecutive year and is downgraded to junk. A default is also not out of the question.

Traditionally, sharp moves in the bond market – such as thise one – have been sufficient to prompt politicians to reach a compromise, although in a world in which central banks have always stepped in to make things better, we fail to see how or why the Illinois auto pilot, which is currently set on collision course with insolvency, will change direction any time soon.

END

 

We are only positive 82 points with the treasury 10/2 bond yields.  Citibank is warning that it is approaching inversion levels:

(courtesy zero hedge)

 

Citi Warns ‘Inversion’ Looms As Treasury Yield Curve Slumps To 8-Month Lows

Since The Fed began its ‘tightening cycle’ in December 2015, the Treasury yield curve (2s10s) has flattened dramatically, tumbling back today towards cycle lows (and well below Trump-election-hope lows). What is perhaps more worrisome is the historical trend strongly suggests this trend is far from over and an inverted yield curve looms.

The trend is clear that Fed policy is running counter to growth expectations and all the hope that Trump offered has been erased completely.

But what happens next during a Fed tightening cycle? Citi explains…

US treasury markets, unsurprisingly, show a very clear trend towards higher front end-yields. On average longer end yields also ratchet higher, but by much less than at the short end, and with a lot more variability in the cycles. There is a clear trend towards curve flattening in other words.

 

 

Whilst this cycle is of course different in many ways (QE and bond scarcity, Fed balance sheet run down to start soon, etc.), we are still approximately in line with historic averages at the front end. At the long end, we are perhaps following the 2004 cycle a bit more, where 10y yields traded a range as the Fed hiked 17 times! Diversification into US govies by foreigners (Asia) played a big role back then, and this time round UST attractiveness to, especially yield starved, investors stands out. Low-flation is another reason why the longer end may display less beta as the Fed hikes this time.

 

With the historic analysis showing that 2s10s should flatten by at least a further 100 bp, we remain in curve flatteners in our macro portfolio alongside our tactical long in 10y USTs. Here, the recent breach of supports at 2.2% suggest we could move to 2.0% and we hold.

Which means that, given the current 85bps level of the 2s10s spread, 100bp more of flattening will mean an inverted curve, confirming the short-term recessionary fears many are feeling as US Macro Surprise Indices collapse

END

 

This is not good:  USA producer prices are rising at the fastest pace in 3 yrs and this signals huge inflationary pressures

(courtesy zero hedge)

Core Producer Prices Rise At Fastest Pace In 3 Years, Above Fed Mandate

For the first time in 3 years, Core Producer Prices have risen at a faster pace than The Fed’s mandated 2% target. May PPI (ex food and energy) rose 2.1% year-over-year, the highest since May 2014, as goods prices tumbled (gasoline, motor vehicles, fresh fruit) while services costs (retailer and wholesaler prices, and residential lending) jumped.

May 2014 was the last time that Core PPI (Ex Food and Energy)…

 

The breakdown shows a notable drop in Energy prices MoM with good prices tumbling as service costs jumping…

Final demand goods: Prices for final demand goods moved down 0.5 percent in May, the largest decrease since a 0.6-percent drop in February 2016. Most of the May decline can be attributed to the index for final demand energy, which fell 3.0 percent. Prices for final demand foods decreased 0.2 percent. In contrast, the index for final demand goods less foods and energy edged up 0.1 percent.

 

Product detail: The May decrease in the index for final demand goods was led by an 11.2-percent drop in gasoline prices. The indexes for fresh and dry vegetables, jet fuel, fresh fruits and melons, motor vehicles, and home heating oil also fell. Conversely, the index for pharmaceutical preparations rose 0.6 percent. Prices for beef and veal and for electric power also increased.

 

Final demand services: Prices for final demand services rose 0.3 percent in May following a 0.4-percent advance in April. The May increase can be attributed to the index for final demand trade services, which moved up 1.1 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) In contrast, prices for final demand services less trade, transportation, and warehousing fell 0.1 percent, and the index for final demand transportation and warehousing services declined 0.5 percent.

 

Product detail: About half of the May increase in the index for final demand services can be traced to margins for fuels and lubricants retailing, which rose 16.1 percent. The indexes for apparel, footwear, and accessories retailing; machinery and equipment wholesaling; residential real estate loans (partial); automobiles and automobile parts retailing; and food wholesaling also moved higher. Conversely, prices for guestroom rental decreased 5.2 percent. The indexes for airline passenger services and food retailing also moved lower.

 

Is this the well-timed excuse for a rate-hike tomorrow, despite collapsing macro data since the last Fed rate hike?

end

 

Mnuchin gives us until the first or second week of September before the fun begins on debt ceiling

(courtesy zero hedge)

 

“The Sooner We Do It, The Better”: Congress Should Raise Debt Ceiling Before August Recess, Mnuchin Says

Treasury Secretary Steven Mnuchin reiterated his preference for the debt ceiling to be raised before lawmakers break for August recess during testimony before the House Appropriations Committee on Monday.

Here’s Bloomberg’s summary of what was said during the hearing:

  • Can’t imagine a scenario that the debt ceiling isn’t raised
  • Mnuchin urges Congress to align the timing of raising the debt cap with the budget process
  • Markets don’t want Congress to wait to raise the debt ceiling
  • “The sooner we do it the better, there are events in the world that could make it more difficult to borrow”
  • The debt ceiling should not be a Republican or Democrat issue, it should be an acknowledgment “that we have spent the money, we have to fund the government”

Mnuchin did not give lawmakers a hard deadline for when the debt ceiling needed to be raised but said it could wait until after Congress’s August recess, the Hill reported.

“We’ve run lots of models, there are lots of assumptions. I am comfortable saying we can fund through the beginning of September,” adding he’d “prefer not to give a range at this time”

 

“If we don’t raise beforehand, I will provide updated numbers based” on revenue flows

Mnuchin added that the Treasury has “backup plans” that would allow it to fund the government should Congress fail to raised the borrowing limit, though he declined to elaborate on exactly what those plans might be. Mnuchin also expressed his preference for doing a “clean” hike that would not pair the debt bill with spending cuts or other budgetary reforms, as many Republicans would prefer.

The Treasury bumped up against its statutory borrowing limit of $20 trillion back in March.

With its cash balance collapsing toward zero, the Treasury has been forced to suspended the sale of State and Local Government Series (SLGS) securities, which count against the debt limit. At the time, Mnuchin warned that until the debt limit is either raised or suspended as it has done in the past, the Treasury will use additional extraordinary measures to meet its commitments.

 

Based on an ongoing analysis from economists at Wells Fargo, the Treasury will bump up against the debt limit within the first two weeks of September.

In its report, Wells Fargo noted that its estimate is subject to change depending on tax and spending data released in the coming months.

“While it is true that the deadline is a ways off, the complication stems from the fact that Congress is not in session the entire month of August and does not return until September 5. Thus, we expect that Congress will act before the August recess to alleviate the need to rapidly address the issue upon their return,” the Wells Fargo economists wrote.

And in an updated projection that incorporates May cash flow data from the Treasury Department, the Bipartisan Policy Center, a centrist think-tank, projected that the US must increase its debt ceiling by October or November in order to avoid payment default.

When the Treasury reported its monthly receipts and outlays data earlier today, it showed more of the same deficit-spending: The federal government recorded a 68.4% surge in the US budget deficit compared with a year ago. Specifically, outlays of $329 billion soared 19%, offset by a modest 7% increase in receipts. Overall, the Treasury reported a $88.4 billion deficit in May, more than the $87 consensus estimate, and well above the $52.5 billion a year earlier.

For now, it appears the T-Bill curve has a little stress in it around the end of September… (the curve has inverted, showing stronger demand for the longer-dated bill)

END

David Stockman lays out the Fiscal Bloodbath scenario perfectly as the “Mother of all debt ceiling crises looms”:

(courtesy David Stockman/Daily Reckoning)

 

Stockman Fears Fiscal Bloodbath As “Mother Of All Debt Ceiling Crises” Looms

Authored by David Stockman via The Daily Reckoning,

 

While the Imperial City is frozen in the Second Coming of Comey, it doesn’t mean that the Washington spending machine is on pause. In fact, the Treasury’s cash balance yesterday stood at only $153 billion — down by $130 billion just since the tax season peak was reached on April 25th.

 

Uncle Sam has been burning cash at a rate of $3.2 billion per calendar day since then and has no more room to borrow. That’s because the public debt ceiling is frozen at its March 15th level ($19.808 trillion) and the mavens at the Treasury Building have run out of borrowing gimmicks.

The countdown to the mother of all debt ceiling crises is now well underway — with the nation’s net debt sitting at $19.69 trillion. That figure, in turn, is up nearly $500 billion since FY 2016 ended on September 30 with the net debt at $19.22 trillion.

We itemize this torrent of red ink not merely to lament the nation’s dire fiscal plight, but to document a practical point. It will be impossible to pay Uncle Sam’s bills in full after Labor Day unless the debt ceiling is raised well above the $20 trillion mark.

Exactly 36 years ago, Washington stood on another symbolic threshold — that is, raising the debt ceiling over the $1 trillion mark for the first time.

Back in October 1981, however, the Gipper was in the Oval Office at the peak of his popularity. He got the debt ceiling over the symbolic barrier at that time because he could still credibly promise that the budget would be balanced within three years. That was after his already enacted tax cuts became fully effective and the already enacted spending reductions took hold.

The nation’s balance sheet then was relatively pristine compared to what it is at present. Even at $1 trillion, the public debt amounted to just 30%of GDP — a far cry from the 106% ratio presently.

Before Capitol Hill gets bogged down in a sweaty August slog desperately looking for votes to raise the debt ceiling by several trillion dollars, it will have mid-year budget updates. They won’t be encouraging.

As my colleague Lee Adler has pointed out, Treasury tax collections have slowed to a crawl. Overall collections are barely even with prior year, and even withholding payments are now coming in at barely 2% on a year/year basis. That is far below the built-in spending growth rate of about 4% — and says nothing to the big increases for defense, law enforcement, border control and infrastructure being sought be the Trump White House.

The four week moving average of withholding collections — about as accurate a real time measure of the US economy as exists — is running below the average wage rate gain of about 2.6% per annum. That means real wage growth is turning negative — not accelerating like the “escape velocity” narrative being peddled by Wall Street.

The Donald’s odds of leading Washington over the $20 trillion threshold are not even a tiny fraction of the Gipper’s at the time of the $1 trillionbarrier. The latter’s job approval rate was over 60%, whereas the Donald’s will soon dip into the low 30s as the RussiaGate prosecution gathers full force.

Back then it was still possible to pass a clean debt ceiling increase because there was always an end in sight. That is, the fiscal projections always showed a balanced budget or surplus a few years down the road that enabled the illusion of “one and done.”

No more. There is $10 trillion of new deficits built-in over the next decade — even with the Congressional Budget Office’s (CBO) rosy scenario economic forecast, and the deficit path widens, rather than narrows, over the ten year period. By 2027, in fact, the CBO baseline deficit is back above 5% of GDP.

The long and short of it is straightforward. The Democrats are not about to bail-out the Donald when they believe they have him on the ropes. At the same time, there is no GOP majority for any meaningful deficit reduction plan that could be attached to a debt ceiling increase bill as a legislative quid pro quo.

When the Senate GOP committee now working on an alternative health care bill reaches a consensus — if it ever does — there will be virtually no Medicaid cuts left. The so-called moderates have insisted that the Obamacare expansion must stay in place at least for the next five years or no dice.

At the same time, the Donald has boxed himself in with his reckless promise to ring-fence Medicare and Social Security. But when you set those two giant entitlements aside, along with Medicaid, you have taken $2 trillion per year off the table; and that quickly mushrooms to nearly $2.5 trillion per year when you add in $200 billion for Veterans, the earned income tax credit and retirement checks for former military and civilian employees of the Federal government.

Yes, the Congressional GOP could perhaps agree to a 10% cut ($7 billion) in the $70 billion food stamp program and a few billion more from some of the lesser low-income entitlements. But self-evidently that’s a rounding error in the scheme of things.

So when foreseen is not a tale of a Trump Fiscal Stimulus, but a Fiscal Bloodbath, take it to mean just that. And unlike the saves which were put together at the 11th hour in August 2011 and October 2015 by President Obama and Speaker Boehner, this time there will be absolute legislative paralysis.

It seems abundantly clear that Speaker Ryan is not ready to quit, and the Freedom Caucus has no intention of voting for a so-called “clean” debt ceiling increase.

Instead, Washington is heading for the unthinkable. That is, the need for the US Treasury to prioritize and allocate spending based on the available inflow of revenues.

That will come as a giant shock to those on Wall Street who fail to understand that Washington is in the midst of triggering the 25th amendment, and that the system will soon be ungovernable.

The prospect of allocation will also mean that debt service, social security checks, military expenditures, law enforcement, Federal payrolls and other high priority payments can be met from current receipts for an extended period of time, thereby prolonging the stalemate even further.

So the Wall Street casino may well shrug off the Comey hearing on the grounds that he did not deliver a red hot smoking gun after all.

But that will prove to be just one more chance to get out of harm’s way. What comes next is a debt ceiling Fiscal Bloodbath that will remove all doubt.

end

 

Trump lays out a new plan to overhaul bank rules, by making it easier for them.  However Dodd Frank will be rolled back and that would not be good for us

(courtesy zero hedge)

Trump Lays Out “Highly Anticipated” Plan To Overhaul Bank Rules: Here Is Goldman’s Take

Nearly four months after Donald Trump signed an executive order calling for a review of Wall Street regulations, the administration has laid out part one of its plans for reforming the system in a detailed report released by the Treasury Department late Monday.

Some of the more notable proposals in the highly-anticipated report – the first in a series that will detail the administration’s thinking on how it plans to proceed with paring back post-crisis regulations in the financial services industry – include: adjusting the annual stress tests, easing trading rules (i.e., gutting the Volcker Rule), and paring back the power of the watchdogs  – like the Consumer Financial Protection Bureau.

The Treasury said its plan was designed to spur lending and job growth by making regulation ‘more efficient’ and less burdensome, according to Bloomberg although in reality it simply caters to the “requests” of Wall Street, which has been limited in its activities since Dodd-Frank, most notanly prop trading, although in most cases banks, like Goldman, have found simply loopholes around the Volcker Rule. Also of note, “unlike the bill passed last week by House Republicans, the report consistently calls for most Obama-era rules to be dialed back, not scrapped.”

In a statement released along with the report, Treasury Secretary Steven Mnuchin said that while the administration backs congressional efforts to roll back Dodd-Frank, the report focuses on actions that can be taken without involving Congress. In fact, between 70 and 80% of its recommended reforms can be made unilaterally through federal agencies’ independent rulemaking authorities.

As expected, Democrats were quick to criticize the plan with Ohio Senator Sherrod Brown, the ranking member of the Senate Banking Committee, claiming that the reforms would gut the Consumer Financial Protection Bureau, the centerpiece of Dodd-Frank. The report is extremely critical of the fledgling agency, accusing it of being “unaccountable” and possessing “unduly broad regulatory powers.” To rein in the bureau, the Treasury report calls for the president to be able to fire its director for any reason, not just for cause as is now the case, as Bloomberg noted.

Meanwhile, representatives of the banking industry expressed their support for the report’s findings.

“Today’s Treasury report is an important step to refine financial regulations to ensure that they are supporting — not inhibiting — economic expansion,” said ABA President and CEO Rob Nichols.We applaud Secretary Steven Mnuchin for recognizing that we need regulatory reform to boost economic growth, and we expect this report will serve as a catalyst in that effort.”

As Bloomberg adds, some of the most unpopular regulations that the report asks to re-do, such as the Volcker Rule ban on banks’ proprietary trading, were put together by five different agencies. It was not immediately clear which bank was supervising them.

* * *

In any case, just because the administration has found a way to bypass Congress doesn’t necessarily mean that the reforms will be swiftly implemented. Some of the report’s most ambitious recommendations – such as reforming the Volcker Rule ban on proprietary trading – will require the cooperation of numerous separate federal agencies, as Bloomberg noted.

On the Volcker Rule, Treasury outlined several ways that regulators and Congress should consider weakening it, Bloomberg reported. Banks with less than $10 billion in assets should be exempted altogether, the report argued. It also said all lenders should have more leeway to trade and that restrictions on banks’ investing in private-equity and hedge funds should be loosened.

In other words, a return to the way Wall Street was before the financial crisis.

* * *

And since it was mostly Goldman who was behind the report, here is Goldman’s take on the key changes:

US Treasury report proposes regulatory changes for US banks

The US Treasury released its report on the US financial system, titled A Financial System That Creates Economic Opportunities, which proposes sweeping changes to the US regulatory framework with the  aim of achieving regulation consistent with the ‘Core Principles’ in President Trump’s Executive Order 13772. We note that proposals in the report do not represent policy actions and are preliminary in nature, particularly given the US Treasury is not an agency tasked with rulemaking. As we highlighted in our report of March 7, 2017, The regulatory reform agenda: Bank regulation through a growth lens, there are different thresholds for changing: 1) regulatory interpretations; 2) regulations as implemented by the regulatory agencies (e.g., the Fed, and the FDIC); and 3) Congressional legislation. Changes in the Treasury’s report would span all three.

The report is far reaching and discusses in detail a number of changes throughout the US regulatory regime. Below, we summarize key takeaways across areas where we think the proposed changes will be most impactful.

* * *

Making CCAR biennial, changing thresholds

  • The report suggests a wide variety of changes to the CCAR process, adjusting both the timing of the process and the asset thresholds, as well as eliminating the qualitative overlay. In our view, changes to the CCAR process would represent interpretation changes that have the lowest threshold for implementation.
  • Adjust the minimum asset threshold for inclusion in the Dodd Frank Act Stress Test (D-FAST) from $10bn to $50bn and eliminate the qualitative CCAR process.
  • For banks above $50bn in assets, the report suggests including a more risk sensitive test for determining whether a bank should be included based on the complexity of its business model. This suggests that banks near the $50bn threshold, such as DFS, CMA and ZION, might benefit most from this revised test.
  • The Comprehensive Capital Analysis and Review (CCAR) process should be biennial, rather than yearly.

* * *

Changes to the Supplementary Leverage Ratio (SLR)

To improve the functioning of capital markets, the Treasury recommends making substantive changes to the calculation of the SLR, through the exclusion of cash and cash equivalents from the  denominator of the calculation. The proposal goes further than we had anticipated as it recommends excluding not only cash with central banks but also US Treasury securities, and initial margin for centrally cleared derivatives.

While we expect that these changes will only lead to a greater level of excess capital for one of our banks, MS – we expect it to add $2.5bn to its excess capital (3% of market cap) we believe that if this change were implemented, banks could start to make some structural changes to their balance sheets in order to reduce Tier 1 leverage ratios as well, which could free up some excess capital (Exhibits 2 & 3).

* * *

Volcker: More exemptions, improved coordination and streamlined reporting

The report states that the Volcker Rule has “far overshot the mark” (p. 71) and has given rise to an “extraordinarily complex and burdensome” compliance regime. In our view, the proposed changes would have a far reaching impact on the structure and enforcement of the rule. However, we note that it is not clear how many of the proposed changes would require either an amendment to Dodd-Frank or an NPR or both.

The Treasury recommends that the amended Volcker rule should provide increased flexibility for market making. Including, giving banks more flexibility on managing inventory. The proposed changes also call for a simplification for the enforcement and compliance regime.

  • Give banks flexibility to adjust their inventory levels.
  • Agencies should ensure that interpretive guidance and enforcement is consistent and coordinated.
  • Banks with <$10bn total assets should be exempt; banks with >$10bn in assets but <$1bn in trading assets and trading liabilities and whose trading assets and liabilities represent 10% or less of total assets should be exempt.

* * *

Increasing the availability of credit

The report recommends fostering an environment conducive to increasing the availability of credit with a particular focus on residential mortgages, leverage loans and small business loans. Key highlights:

  • Repeal or revise the resi mortgage risk retention rules;
  • Encourage banks to rely on a robust set of metrics instead of a simply 6x leverage metric when making leveraged loans;
  • Consider reassessing regulations concerning CRE lending to promote additional flexibility for situations where a loan has strong collateral;
  • Consider adjusting the calibration of the SLR for small business loans.

* * *

Other areas of focus

In addition, the Treasury also recommends revisiting calibration of capital and liquidity rules as well as the role of the CFPB.

  • To ensure competitiveness with global regulatory standards, revisit calibration of a variety of capital and liquidity rules, including: the US G-SIB surcharge; the Federal Reserve’s Total Loss Absorbing Capacity (TLAC); The Federal Reserve’s minimum debt rule; and Calibration of the enhanced SLR (eSLR), which applies to US G-SIBs.
  • Living will should be moved to a two-year standard.
  • US Liquidity Coverage Ratio (LCR) should only be applied to US G-SIBs, and a less stringent standard should be applied to other internationally active BHCs.
  • Curtailing the powers of the Consumer Financial Protection Bureau.
    • Make the director of the CFPB removable at will by the President.
    • Fund the CFPB through the annual congressional appropriations process to enable Congress to exercise greater oversight and control over how taxpayer dollars are spent.

* * *

Full report below (pdf link):

end

Gingrich correctly states that Mueller is not impartial and that the Democrats will be on a witch hunt against Trump

a must read…
(courtesy zero hedge)

Gingrich Questions Special Counsel’s Impartiality – “Republicans Are Delusional…Look Who He Is Hiring”

Since his appointment by Deputy Attorney General Rod Rosenstein, Special Counsel Robert Mueller has enjoyed fairly bipartisan praise in Washington D.C. for his apparent impartiality.

That said, Newt Gingrich, a former ‘informal advisor’ to President Trump, thinks that Comey cast a dark shadow over Mueller’s independence last week when he admitted under oath, before the Senate Intelligence Committee, that he leaked FBI documents to the New York Times with the express intent of getting a Special Counsel appointed to investigate Trump and various members of his campaign team.  All of which prompted the following tweet from Gingrich early this morning:

“Republicans are delusional if they think the special counsel is going to be fair. Look who he is hiring.check fec reports. Time to rethink.”

Newt Gingrich @newtgingrich

Republicans are delusional if they think the special counsel is going to be fair. Look who he is hiring.check fec reports. Time to rethink.

As The Hill notes, several of Mueller’s early, notable hires have all been contributors to Hillary’s and/or Obama’s previous campaigns.

Michael Dreeben, who serves as the Justice Department’s deputy solicitor general, is working on a part-time basis for Mueller, The Washington Post reported Friday.

 

Dreeben donated $1,000 dollars to Hillary Clinton’s Senate political action committee (PAC), Friends of Hillary, while she ran for public office in New York. Dreeben did so while he served as the deputy solicitor general at the Justice Department.

 

Jeannie Rhee, another member of Mueller’s team, donated $5,400 to Hillary Clinton’s presidential campaign PAC Hillary for America.

 

Andrew Weissmann, who serves in a top post within the Justice Department’s fraud practice, is the most senior lawyer on the special counsel team, Bloomberg reported. He served as the FBI’s general counsel and the assistant director to Mueller when the special counsel was FBI director.

 

Before he worked at the FBI or Justice Department, Weissman worked at the law firm Jenner & Block LLP, during which he donated six times to political action committees for Obama in 2008 for a total of $4,700.

 

James Quarles, who served as an assistant special prosecutor on the Watergate Special Prosecution Force, has donated to over a dozen Democratic PACs since the late 1980s. He was also identified by the Washington Post as a member of Mueller’s team.

 

Starting in 1987, Quarles donated to Democratic candidate Michael Dukakis’s presidential PAC, Dukakis for President. Since then, he has also contributed in 1999 to Sen. Al Gore’s run for the presidency, then-Sen. John Kerry’s (D-Mass.) presidential bid in 2005, Obama’s presidential PAC in 2008 and 2012, and Clinton’s presidential pac Hillary for America in 2016.

This latest Twitter warning followed similar comments made by Gingrich over the weekend on Fox News.  Among other things, the former Speaker of the House said that Mueller’s investigation is shaping up to be a “witch hunt.”

“First of all, look at what Comey said.  Comey said ‘I deliberately leaked, through an intermediary, to create this counsel’…who happens to be one of his closest friends.  And look at who Mueller is starting to hire.  I mean these are people that frankly look to me like they’re setting up to go after Trump.  Including people, by the way, who have been reprimanded for hiding from the defense information in two major cases.”

 

“I think this is going to be a witch hunt.  Comey himself, by his own testimony, tainted this particular process.”

 

“You know, the Director of the FBI deliberately leaking in order to create a special counsel, who we’re now supposed to believe is going to be this neutral figure, I think that’s just nonsense.”

 

Meanwhile, appearing on the John Catsimatidis radio show, Gingrich went one step further and called on Congress to “abolish the independent counsel.”

“I think Congress should now intervene and they should abolish the independent counsel, because Comey makes so clear that it’s the poison fruit of a deliberate manipulation by the FBI director leaking to the New York Times, deliberately set up this particular situation. It’s very sick.”

 

“It’s very clear that Comey hates Trump.”

Of course, as a former surrogate of the Trump campaign, Gingrich’s opinions on the topic of Mueller’s independence will undoubtedly be quickly dismissed by the left and most of the media.

So what say you, does Gingrich raise valid concerns in light of Comey’s testimony or is he just a conflicted surrogate attempting to mount a Trump offensive?

END

More signs that the USA economy is in trouble: Citigroup warns of second quarter problems with respect to trading revenues:

down a huge 12 to 13%

(courtesy zero hedge)

Citigroup Stumbles As CFO Warns Of Second Quarter Slump In Trading Revenues

Confirming earlier concerns over performance, Citigroup CFO John Gerspach warned investors at a Morgan Stanley Conference this morning that Citi’s second quarter trading revenues would be down 12-13%.

 

Of course, none of that has anything to do with the stock price’s performance…

END

Soaring Auto Loan Defaults: Fitch Says 2015 Bonds May Be Worst Ever

It sure looks like subprime auto bonds have performed the worst in 2017 and suggests problems ahead:

 

(COURTESY MISH SHEDLOCK/MISHTALK

Authored by Mike Shedlock via MishTalk.com,

Bloomberg reports Subprime Auto Bonds From 2015 May End Up Worst Ever, Fitch Says. I suggest 2017 will be worse, but let’s tune into Fitch first.

Subprime auto bonds issued in 2015 are by one key measure on track to become the worst performing in the history of car-loan securitizations, according to Fitch Ratings.

 

This group of securities is experiencing cumulative net losses at a rate projected to reach 15 percent, which is higher even than for bonds in the 2007, Fitch analysts Hylton Heard and John Bella Jr. wrote in a report Thursday.

 

“The 2015 vintage has been prone to high loss severity from a weaker wholesale market and little-to-no equity in loan contracts at default due to extended-term lending, a trend which was not as apparent in the recessionary vintages,” said the analysts, referring to lenders’ stretching out repayment terms on subprime loans, sometimes to over six years, to lower borrowers’ monthly payment. That becomes riskier in the tail end of the loan, after the car has mostly depreciated and borrowers may be left owing large balances.

 

Credit-rating companies that assess the auto debt packaged into bonds have raised concerns in recent months about rising delinquencies and defaults. They note that additional pressures in the used-car market have weighed on lenders’ ability to recoup funds from borrowers who have their cars repossessed.

 

S&P Global Ratings, which rates a larger percentage of the markets than Fitch and Moody’s, has blamed the rising net loss rates on weaker recoveries. S&P noted this month that net losses on prime deals have reached a pace not seen since 2008.

2017 Will Be Worse

2017 will be even worse. This Automotive News story provides an easy to understand explanation: New-Car Loans Lasting 73 to 84 Months Soar.

In the first quarter of 2009, 11.7 percent of new-vehicle loans were 73 to 84 months, Karl Kruppa, senior automotive solutions consultant for Experian, said at CU Direct’s Drive ’17 conference here last week. Through February 2017, 33.8 percent of loans were 73 to 84 months.

 

Even within that bucket, term lengths are creeping up. In the fourth quarter of 2010, three-quarters of new-vehicle loans in the 73- to 84-month category were between 73 and 75 months, Kruppa said. “Now we are seeing more and more lenders willing to go all the way up to 84 months,” he said. In the fourth quarter of 2010, 17.1 percent of new-vehicle loans were 84 months. In the fourth quarter of 2016, 28.7 percent of new-vehicle loans were 84 months.

 

“You know what’s kind of startling?” Kruppa said. “There’s actually 10 percent of [2010 model-year] used vehicles being financed at a term between 73 and 84 months. Longer terms are here, and more and more lenders are willing to do that.”

Septuple Industry Whammy

  1. New car incentives are rising
  2. Used car glut with prices plunging
  3. Length of loans increasing
  4. Economy weakening
  5. Aging boomers will drive less, with cars already lasting longer
  6. With default rising risk, lenders will hike loan rates, reducing new car affordability despite increased incentives.
  7. Self-driving vehicles are right around the corner. Demand for cars without those features will plunge.

Other than those items (and anything else I may have missed) the auto industry is doing quite fine, thank you.

end

 

We will see you WEDNESDAY night

Harvey.


June 9/Another whacking of gold: down $7.80 with silver down 20 cents/For the 7th consecutive day, the amount of silver standing at the comex increases right from its starting point at First Day Notice/Theresa May falls short by 8 seats of a majority...

Fri, 06/09/2017 - 18:43

GOLD: $1268.50  down $7.80

Silver: $17.19  down 20  cent(s)

Closing access prices:

Gold $1294.30

silver: $17.68

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SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1282.60 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1274.75

PREMIUM FIRST FIX:  $7.85

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1281.00

NY GOLD PRICE AT THE EXACT SAME TIME: $1274.25

Premium of Shanghai 2nd fix/NY:$6.75

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1274.25

NY PRICING AT THE EXACT SAME TIME: $1274.55

LONDON SECOND GOLD FIX  10 AM: $1266.55

NY PRICING AT THE EXACT SAME TIME. $1266..60 

For comex gold: JUNE/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  13 NOTICE(S) FOR 1300  OZ.

TOTAL NOTICES SO FAR: 2118 FOR 211,800 OZ    (6.5878 TONNES)

For silver: For silver: JUNE  84 NOTICES FILED TODAY FOR 420,000  OZ/

Total number of notices filed so far this month: 783 for 3,915,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

Another raid as the bankers are determined to bury those who play the paper gold and paper silver game.

 

Over at the comex, the amount standing for the silver metal again rose in similar fashion to what we witnessed last month and also in April. It is up for the 7th consecutive day. We certainly have a determined entity trying to get its hands on whatever silver is available.

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This is where we are heading:  (JB Slear/Jim Sinclair)

 

According to JB Slear, this is what the future holds. Why should I write words. Get into the cellar as fast as you can!

Jim

 

 

 

In silver, the total open interest FELL BY 922  contract(s) DOWN to 205,319 WITH THE FALL IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (DOWN 19 CENT(S). In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.0260 BILLION TO BE EXACT or 147% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 84 NOTICE(S) FOR 420,000  OZ OF SILVER

In gold, the total comex gold FELL BY  8,583 contracts WITH THE GOOD SIZED WHACKING GOLD TOOK  ($13.80 with YESTERDAY’S TRADING). The total gold OI stands at 488,383 contracts.

 

we had 13 notice(s) filed upon for 1300 oz of gold.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

With respect to our two criminal funds, the GLD and the SLV:

GLD:

We had no changes in tonnes of gold at the GLD:

Inventory rests tonight: 867.00 tonnes

.

SLV

Today: no changes in inventory/

THE SLV Inventory rests at: 339.605 million oz

end

.

First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver FELL BY 922 contracts DOWN TO 205,319 (AND now A LITTLE  FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), WITH THE FALL IN PRICE FOR SILVER WITH YESTERDAY’S TRADING  ( DOWN 19 CENTS). NO QUESTION THAT WE AGAIN HAD CONTINUED FAILED SHORT COVERING BY THE BANKERS ALONG WITH CONSIDERABLE BANKER DELTA HEDGING AS SILVER IS GIVING THEM NIGHTMARES

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 8.06 POINTS OR 0.26%   / /Hang Sang CLOSED DOWN 32.77 POINTS OR 0.13% The Nikkei closed UP 104.00 POINTS OR 0.52%/Australia’s all ordinaires  CLOSED UP 0.01%/Chinese yuan (ONSHORE) closed DOWN at 6.7971/Oil UP to 45.70 dollars per barrel for WTI and 47.94 for Brent. Stocks in Europe OPENED MIXED       ..Offshore yuan trades  6.7913 yuan to the dollar vs 6.7971 for onshore yuan. NOW  THE OFFSHORE IS MUCH WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE MUCH STRONGER DOLLAR. CHINA NOT HAPPY WITH THE NEWS THAT ITS DEBT HAS BEEN DOWNGRADED

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

A little background on those 4 anti ship missiles fired by North Korea.  It was a test  for precise accuracy and it is alarming to the west

( Mac Slavo/SHTFPlan)

b) REPORT ON JAPAN c) REPORT ON CHINA

Whenever you see the Chinese 5 year/10 yr invert , then recession is flashing red!! Actually everything is inverting!

( zerohedge)

4. EUROPEAN AFFAIRS

 

i)UK

Theresa May wins  318 seats and falls short of a majority.  She will hook up with the Irish right wing Democratic Unionist Party to allow her to govern:

( zerohedge)

ii)An important lesson for us all.  A must read…

( Simon Black/SovereignMan.com)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS Tillerson asks for the blockade against Qatar to stop as it is hindering the USA campaign against ISIS ( zero hedge) 6 .GLOBAL ISSUES

Mexican Industrial production simply crashes in April

( zero hedge)

 

7. OIL ISSUES

rig counts rise for the 21 st consecutive week

( zero hedge)

8. EMERGING MARKET 9.   PHYSICAL MARKETS

i)Trading today in gold:

the Crooks are at it again:

( zero hedge)

ii)Mexico owes Canadian miners more than 360 million dollars with Goldcorp the lions share at 230 million

( Reuters/GATA)

iii)Chris Powell comments on the huge raid we have been experiencing this past two days:

( Chris Powell/GATA)

iv)A great reason to whack gold today:  Gold imports jump 400% as the increase in GST tax fear as spurred stocking of gold

( Bloomberg)

v)totally absurd:  Jim Cramer discusses bitcoin and highlights that it may hit 1 million dollars.

( Mish Shedlock/Mishtalk)

 

10. USA Stories

i)Trump accuses Comey of being a “leaker” and a liar and also he claims total and complete vindication

( zerohedge)

ii)Trump is set to file a complaint against Comey for leaking the memos to the New York Times and CNN

( zerohedge)

iib)Lawyer Kasowitz produces the May 11 New York Times article which clearly shows that someone leaked the memo prior to Trump’s tweet on the 12 of May

Perjury?…

( zero hedge)

iic)In a press conference Trump hints that he has the Comey tapes and he then tells the press that they are going to be very disappointed..

(courtesy zero hedge)

ii d)that did not take long!! The House Intelligence Committee demanded from Trump the tapes, if they exist..

( zerohedge)

iii)Not a good sign for the economy:  credit card defaults surge the most since 2009:

( zero hedge)

iv)A huge drop in auto inventories will cause the revised 2nd quarter GDP to fall further

( zero hedge)

v)The list of retails in danger of bankruptcy now climb to 22

( zero hedge)

vi)Again Alan Dershowitz states that there is no obstruction case and was glad when Comey stated that yes, the President can say who will be prosecuted and who will not be prosecuted.

( the Fly)

Let us head over to the comex:

The total gold comex open interest FELL BY A GOOD SIZED 8.583 CONTRACTS DOWN  to an OI level of 488,383 WITH THE FALL(WHACK) IN THE PRICE OF GOLD ($13.80 with YESTERDAY’S trading). The bankers were expecting more gold leaves to fall from the gold tree and as such they could not cover as much as they wanted.

We are now in the contract month of JUNE and it is one of the BETTER delivery months  of the year. In this JUNE delivery month we had A  LOSS OF 84 contract(s) FALLING TO  1997.  We had 57 notices filed yesterday so we LOST ANOTHER 27  contracts or an additional 2700 oz will NOT stand for delivery in this very active delivery month of June AND WITHOUT A SHADOW OF DOUBT THESE 27 CONTRACTS RECEIVED AN EFP CONTRACT WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURE GOLD CONTRACT/OR A LONG CALL OR MOST LIKELY A LONDON BASED FORWARD GOLD CONTRACT. THESE EFP’S ARE PRIVATE OFF COMEX TRANSACTIONS. THE STUBBORN LONGS WHO ARE REMAINING STOIC ARE SO FAR REFUSING THAT FIAT BONUS

Below is a little background on the EFP contracts  initiated by our bankers: We now know for certain that private EFP contracts are given by the bankers when faced with an upcoming active delivery month and they state that this is for emergency purposes only and that they do not have actual physical metal to deliver upon in the front month.  We just do not know the makeup of that private deal.  It is my contention that the longs in GOLD FOR INSTANCE at the end of MAY(for June contracts) were given a fiat bonus plus a long “in the money” call for a  future July contract or a August FUTURE contract or MAYBE EVEN A LONDON BASED FORWARD GOLD CONTRACT. . and this is why the total comex open interest complex obliterates as we enter first day notice.  So now everything makes sense: the obliteration of OI as we enter first day notice has not really occurred in the real sense but replaced with a future long contract call and/or an off -comex London based gold contract  with some bonus money for their effort.

The non active July contract LOST 69 contracts to stand at 2,258 contracts. The next big active month is August and here the OI LOST 9019 contracts DOWN to 363,535.

We had 13 notice(s) filed upon today for 1300 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx And now for the wild silver comex results.  Total silver OI FELL BY A TINY 922 contracts FROM 206,241 DOWN TO 205.319 DESPITE YESTERDAY’S BIG 19 CENT LOSS.  IT SURE LOOKS LIKE OUR BANKERS ARE DESPERATELY TRYING TO COVER THEIR SHORTS IN SILVER BUT TO NO AVAIL. WE ALSO NO DOUBT HAVE CONSIDERABLE EVIDENCE OF SOME DELTA HEDGING BY THE BANKERS TRYING TO OFFSET THAT HUGE SHORT POSITION THEY HAVE BEEN BURGEONING OVER THE YEARS. We are in the NON active delivery month is JUNE  Here the open interest SOMEHOW LOST ONLY 3 contract(s) FALLING TO 91 contracts. We had 9 notices served upon yesterday so we AGAIN GAINED 6 CONTRACTS OR AN ADDITIONAL  30,000 OZ OF SILVER WILL STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF JUNE.  IT SEEMS WE ARE CONTINUING WHERE WE LEFT OFF LAST MONTH IN SILVER AS INVESTORS ARE WILLING TO FORGO THE FIAT PROFIT JUST TO SECURE PHYSICAL SILVER METAL. THIS IS THE 7TH CONSECUTIVE DAY THAT THE AMOUNT OF SILVER STANDING ADVANCED FROM FIRST DAY NOTICE. 

The next big active month will be July and here the OI LOST 4242 contracts DOWN to 122,456 as we start to wind down before first day notice Friday, June 30.  July will be interesting to watch in silver as we witness fewer players pitching for EFP contracts than with gold.

The month of August, a non active month picked up 4 contracts to stand at 28.  The next big active delivery month for silver will be September and here the OI already jumped by another 3049 contracts up to 43,021.

I will give you a snapshot as to what happened last year at the exact number of days before first day notice:

June 9.2016:  103,688 contracts were still outstanding vs 122,456 contracts June 9.2017

At the conclusion of June, the final standing for physical silver was 3,080,000 oz and we have already surpassed that number this year  (3,945,000 oz).

The line in the sand is $18.50 for silver and again it has been defended by the criminal bankers.  Once this level is pierced, the monstrous billion oz of silver shorts will blow up. The bankers are defending the Alamo with their last stand at the $18.50 mark. THE NEW RECORD HIGH IN OPEN INTEREST WAS SET FRIDAY APRIL 21/2017 AT:  234,787.

We had 84 notice(s) filed for 420,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 200,263 contracts which is GOOD

Yesterday’s confirmed volume was 264,414 contracts  which is GOOD

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for JUNE  June 9/2017. Gold Ounces Withdrawals from Dealers Inventory in oz   nil Withdrawals from Customer Inventory in oz    27,352.819 oz Brinks Deposits to the Dealer Inventory in oz nil  oz

  Deposits to the Customer Inventory, in oz   nil oz No of oz served (contracts) today   13 notice(s) 1300 OZ No of oz to be served (notices) 1984 contracts 198,400 oz Total monthly oz gold served (contracts) so far this month 2118 notices 211800 oz 6.5878 tonnes Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz Total accumulative withdrawal of gold from the Customer inventory this month   143,815.8 oz Today we HAD  0 kilobar transaction(s)/  We had 0 deposit into the dealer: total dealer deposits: nil oz We had NIL dealer withdrawals: total dealer withdrawals:  NIL oz we had no dealer deposits: total dealer deposits:  nil oz we had 0  customer deposit(s): total customer deposits; nil  oz We had 1 customer withdrawal(s)  i) out of Brinks:  27,352.819 oz total customer withdrawal: 27,352.819  oz  we had 0 adjustments: For JUNE:

Today, 0 notice(s) were issued from JPMorgan dealer account and 2 notices were issued from their client or customer account. The total of all issuance by all participants equates to 13  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 7 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx To calculate the initial total number of gold ounces standing for the JUNE. contract month, we take the total number of notices filed so far for the month (2118) x 100 oz or 211,800 oz, to which we add the difference between the open interest for the front month of JUNE (1997 contracts) minus the number of notices served upon today (13) x 100 oz per contract equals 410,200  oz, the number of ounces standing in this active month of JUNE.   Thus the INITIAL standings for gold for the JUNE contract month: No of notices served so far (2118) x 100 oz  or ounces + {(1997)OI for the front month  minus the number of  notices served upon today (13) x 100 oz which equals 410200 oz standing in this  active delivery month of JUNE  (12.7589 tonnes) . WE LOST 27 CONTRACTS OR AN ADDITIONAL 2700 OZ WILL NOT STAND AT THE COMEX.  HOWEVER THESE GUYS (27 CONTRACTS) WERE GIVEN EFP CONTRACTS WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURES GOLD CONTRACT OR A LONG CALL ON A GOLD CONTRACT OR MOST LIKELY A LONDON BASED GOLD FORWARD CONTRACT.   xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Total dealer inventory 900,191.813 or 27.99 tonnes DEALER RAPIDLY LOSING GOLD Total gold inventory (dealer and customer) = 8,775,733.659 or 272.96 tonnes    Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 272.96 tonnes for a  loss of 30  tonnes over that period.  Since August 8/2016 we have lost 81 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold! The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.   IN THE LAST 13 MONTHS  80 NET TONNES HAS LEFT THE COMEX. end And now for silver AND NOW THE MAY DELIVERY MONTH   June INITIAL standings  June 9 2017 Silver Ounces Withdrawals from Dealers Inventory  nil Withdrawals from Customer Inventory  nil oz Deposits to the Dealer Inventory NIL oz Deposits to the Customer Inventory   nil oz No of oz served today (contracts)  84 CONTRACT(S) (420,000 OZ) No of oz to be served (notices) 7 contracts ( 35,000 oz) Total monthly oz silver served (contracts) 783 contracts (3,915,000 oz) Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz Total accumulative withdrawal  of silver from the Customer inventory this month 2,295,343.5 oz today, we had  0 deposit(s) into the dealer account: total dealer deposit: NIL  oz we had Nil dealer withdrawals: total dealer withdrawals: nil oz we had 0 customer withdrawal(s): TOTAL CUSTOMER WITHDRAWALS:  nil  oz  We had 0 Customer deposit(s): ***deposits into JPMorgan have now stopped In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts. why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver total customer deposits  nil oz    we had 0 adjustment(s) The total number of notices filed today for the JUNE. contract month is represented by 84 contract(s) for 420,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at 783 x 5,000 oz  = 3,920,000 oz to which we add the difference between the open interest for the front month of JUNE (91) and the number of notices served upon today (84) x 5000 oz equals the number of ounces standing  

 

.   Thus the initial standings for silver for the JUNE contract month:  718(notices served so far)x 5000 oz  + OI for front month of JUNE.(91 ) -number of notices served upon today (84)x 5000 oz  equals  3,950,000 oz  of silver standing for the JUNE contract month.   We gained 6 contracts or an additional 30,000 oz will stand for delivery. WE ALSO HAD 0 EFP CONTRACTS THAT WERE ISSUED AS THE LONGS REFUSED A FIAT BONUS: THEY WANT THEIR PHYSICAL SILVER.     Volumes: for silver comex Today the estimated volume was 79,174 which is HUGE Yesterday’s  confirmed volume was 101,041 contracts which is HUGE YESTERDAY’S ESTIMATED VOLUME OF 101,041 CONTRACTS EQUATES TO 505 MILLION OZ OF SILVER OR 72% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.   Total dealer silver:  34.315 million (close to record low inventory   Total number of dealer and customer silver:   204.477 million oz The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42 The previous record was 224,540 contracts with the price at that time of $20.44 end NPV for Sprott and Central Fund of Canada 1. Central Fund of Canada: traded at Negative 7,5 percent to NAV usa funds and Negative 7.4% to NAV for Cdn funds!!!!  Percentage of fund in gold 61.7% Percentage of fund in silver:38.2% cash .+0.1%( June 9/2017)   SPROTT PHYSICAL SILVER TRUST FUND NOT READY FOR PUBLICATION 2. Sprott silver fund (PSLV): STOCK  6.53%!!!! NAV  ??? (june 9/2017)  3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.52% to NAV  (June 9/2017 ) Note: Sprott silver trust back  into POSITIVE territory at -?? /Sprott physical gold trust is back into POSITIVE/ territory at -0.52%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada

Submitted by cpowell on Thu, 2017-03-09 01:19. Section: Daily Dispatches

From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017

http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…

Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.

The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.

The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.

“They weren’t interested in having those discussions,” Williams said.

 Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.

If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.

“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”

Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.

The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.

Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.

Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.

end

At 3:30 pm we receive the COT which gives position levels of our major players. However because of the EFP’s issued, makes this report totally distorted

The report encompasses May 31, first day notice.  You will recall we had a massive obliteration of open interest on the day but since then more paper gold has been added.

what an absolute fraud!

First the Gold COT:

Gold COT Report – Futures Large Speculators Commercial Total Long Short Spreading Long Short Long Short 312,240 107,775 29,475 108,298 324,652 450,013 461,902 Change from Prior Reporting Period 61,698 24,323 -6,074 4,547 37,682 60,171 55,931 Traders 188 96 78 48 59 268 206   Small Speculators   Long Short Open Interest   44,028 32,139 494,041   -376 3,864 59,795   non reportable positions Change from the previous reporting period COT Gold Report – Positions as of Tuesday, June 6, 2 OUR LARGE SPECS

those large specs that have been long in gold added an unheard 61,698 contracts

those large specs that have been short in gold added 24,323 contracts to their short list

 

OUR COMMERCIALS

those commercials that have been long in gold added 4547 contracts to their long side

those commercials that have been short in gold added a whopping 37,682 contracts.

OUR SMALL SPECS

those small specs that have been long in gold pitched 376 contracts to their long side

those small specs that have been short in gold added 3864 contracts to their short side.

Conclusion:

there is only one word to describe this: fraud!

Onto silver: note the difference between gold and silver

Silver COT Report – Futures Large Speculators Commercial Total Long Short Spreading Long Short Long Short 101,713 35,772 31,973 52,429 128,053 186,115 195,798 5,145 618 -158 -432 4,110 4,555 4,570 Traders 95 48 59 35 38 159 123 Small Speculators Long Short Open Interest 22,852 13,169 208,967 -823 -838 3,732 non reportable positions Change from the previous reporting period COT Silver Report – Positions as of Tuesday, June 6, 2017 OUR LARGE SPECS

those large specs that have been long in silver added 5145 contracts to their long side

those large specs that have been short in silver added 618 contracts to their short side

 

 OUR COMMERCIALS

those commercials that have been long in silver covered a tiny 432 contracts from their long side

those commercials that have been short in silver added only 4110 contracts to their short side

 

OUR SMALL SPECS

those small specs that have been long in silver covered 564 contracts to their long side

those small specs that have been short in silver covered 570 contracts.

Conclusions:

note the difference between gold and silver. Do not read anything into these figures as everything is paper.  there is no physical settlement as EFP’s distort especially in gold.

And now the Gold inventory at the GLD

June 9/no change in inventory at the GLD/Inventory rests at 867.00 tonnes

June 8/AN ADDITION OF 3.07 TONNES OF GOLD ADDED TO THE GLD/INVENTORY RESTS AT 867.00 TONNES

June 7 a huge change in inventory/a deposit of 13.93 tonnes/inventory rests at 864.93 tonnes

June 6/ no changes in inventory at the GLD/Inventory remains at 851.00 tonnes

June 5.2017/no changes at the GLD/Inventory remain at 851.00 tonnes

June 2/2017/a huge deposit of 3.55 tonnes of gold into the GLD/Inventory rests at 851.00 tonnes

June 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 847.45 TONNES

May 31./ no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 30/no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 26./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 25./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 24/no change in inventory at the GLD/inventory rests at 847.45 tonnes

May 23/a paper withdrawal of 5.03 tonnes of gold from the GLD/Inventory rests at 847.45 tonnes

May 22/A DEPOSIT OF 1.77 TONNES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.48 TONNES

May 19/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 850.71 TONNES

May 18/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 850.71

May 17/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 16./ no change in the GLD inventory/inventory rests at 851.89 tonnes

May 15/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 12/no changes in GLD/inventory rests at 851.89 tonnes

may 11/no changes in GLD inventory/inventory rests at 851.89 tonnes

May 10/no changes in GLD inventory/inventory rests at 851.89 tonnes/

May 9/a withdrawal of 1.19 tonnes from the GLD/Inventory rests tonight at 851.89 tonnes

May 8/no change in inventory at the GLD/Inventory rests at 853.08 tonnes

May 5/no changes in inventory at the GLD/Inventory rests at 853.08 tonnes

May 4/A tiny change in inventory at the GLD /a withdrawal of .28 tonnes to pay for fees/inventory rests at 853.08 tonnes

May 3/no change in inventory at the GLD/Inventory rest at 853.36 tonnes

May 2/no change in inventory at the GLD/Inventory rests at 853.36 tonnes

May 1/ no changes in inventory at the GLD/inventory rests at 853.36 tonnes

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx June 9 /2017/ Inventory rests tonight at 867/00 tonnes *IN LAST 169 TRADING DAYS: 80.13 NET TONNES HAVE BEEN REMOVED FROM THE GLD *LAST 111 TRADING DAYS: A NET  47.30 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY. *FROM FEB 1/2017: A NET  60.64 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

June 9/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 8/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ/

June 7/no change in inventory at the SLV/inventory rests at 339.605 million oz/

June 6/no change in inventory at the SLV/Inventory rests at 339.605 million oz.

June 5/a huge change at the SLV/a withdrawal of 1.371 million oz /inventory rests at 339.605 million oz/

June 2/no change in silver inventory at the SLV/Inventory rests at 340.976 million oz/

June 1/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 340.976 MILLION OZ

May 31./ no change in silver inventory at the SLV/inventory rests at 340.976 million oz/

May 30/no change in silver inventory at the SLV/inventory rests at 340.976 million oz

May 26/another paper withdrawal of 946,000 oz of silver from the SLV with silver rising/inventory rests at 340.976 million oz

May 25/no change in silver inventory at the SLV/Inventory rests at 341.922 million oz

May 24./a “paper” withdrawal of 1.893 million oz from the SLV/inventory rests tonight at 341.922 million oz

May 23/no change in silver inventory at the SLV/inventory rests at 343.815 million oz

May 19/no change in silver inventory at the SLV/Inventory rests at 343.815 million oz.

may 18/2017/another big deposit of 1.42 million oz added to the SLV/inventory rests at 343.815 million oz.

may 17/no change in silver inventory at the SLV/Inventory rests at 342.395 million oz/

May 16./we had a huge addition of 1.416 million oz of silver into the SLV/inventory rests at 342.395 million oz

May 15/no changes in silver inventory/inventory rests at 340.979 million oz/

May 12/a huge change in silver: a deposit of 2.369 million oz/inventory rests at 340.979 million oz

May 11/no changes in silver inventory at the SLV/Inventory rests at 338.610 million oz

May 10/ a gigantic 3.833 million oz of silver added to the SLV and this occurred with the constant whacking of silver for the past 17 trading sessions/inventory rests at 338.610 million oz

may 9Again, no movement of inventory at the SLV. Inventory rests at 334.777 million oz

May 8/no change in silver inventory at the SLV/inventory rests at 334.777 million oz/

May 5/Strange!! no change in silver inventory at the SLV/Inventory rests tonight at 334.777 million oz

May 4/a very tiny withdrawal of 144,000 oz to pay for fees/inventory rests tonight at 334.777 million oz/

May 3/strange!! with the drop in price of silver we had no change in inventory at the SLV/inventory rests at 334.921 million oz

May 2/extremely strange again/a huge 3.502 million oz deposit into the SLV despite silver being in the toilet for the past several trading days.Inventory 334.921 million oz

may 1/extremely strange/with silver being walloped these past several days, the inventory rises again by a huge 1.136 million oz/(maybe someone can explain this phenomena??)

June 9.2017: Inventory 339.605  million oz end We are going to provide GOFO rates  (gold) each day and shortly silver courtesy of Bron Suchecki of Monetary Metals and here is today’s figures:

The actual figures can be found on our home page https://monetary-metals.com/

with this box in the left side

6 month: 1.26%

12 month:  1.43%

 

BRON SUCHECKI | VP Operations Unlocking the Productivity of Gold MONETARY METALS & CO M: +61 4 1210 1912 | bron@monetary-metals.com Skype: bron.suchecki Twitter: @bronsuchecki Website: monetary-metals.com Use this link to encrypt and safely send confidential documents to Monetary Metals® https://cloud.sookasa.com/upload_page/f840a3c3-54e5-42b0-85b4-15c9e94ea5e  end Major gold/silver trading/commentaries for FRIDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Gold in Pounds Surges 1.5% To £1,001/oz – UK Political Turmoil Likely By Mark O’ByrneJune 9, 20170 Comments

– Gold in pounds rises 1.5% from £986/oz to £1,001/oz after shock UK election result

– Gold reaches 7 week high and surges 6% in the last 30 days from £942/oz to £1,001/oz

Gold in pounds – 1 month

– Very robust gold sales experienced by gold brokers, including GoldCore, in the UK this week and today 

– May’s ruling Conservative party loses overall majority and prospect of hung U.K. parliament

– PM May vulnerable from within Tory Party and Corbyn has called for her to resign

– Corbyn and Labour party on the rise which may pose risks to vulnerable London property market and UK economy as investor sentiment towards UK sours further

– Vote set to boost political turmoil in UK, complicate Brexit talks with EU whose hand is strengthened

As reported by Bloomberg News this morning:

Gold priced in sterling surged to the highest level in more than seven weeks as Prime Minister Theresa May failed to win an overall majority in the U.K. election, signaling further political turmoil less than a year after Britain voted to leave the European Union.

The outcome throws into doubt May’s future as prime minister just days before negotiations are due to start on the country’s exit from the EU.

Instead of increasing her majority to strengthen her hand in talks with European leaders, May has lost seats and the Conservative Party has fallen short of an absolute majority in parliament.

“The weakness in the pound has pushed up gold prices in sterling,” said Madhavi Mehta, an analyst at Kotak Commodity Services Pvt in Mumbai. “The pound has weakened amid prospects that the Brexit negotiations will be long and arduous.”

Spot gold rose as much as 2.2 percent to £1,007.52 pounds an ounce before trading at 1,002.34 pounds by 3:32 p.m. in Singapore. Bullion in the U.S. currency retreated 0.4 percent to $1,272.93 an ounce, extending its decline from a seven-month high of $1,296.15. It’s heading for the first weekly drop since early May.

The Conservative Party was on course to win 318 seats, down from 330 held at the start of the campaign and short of the 326 seats needed for an overall majority. Jeremy Corbyn’s Labour Party will take 261 seats, a gain of 29 seats, according to BBC projections.

The shock results came after a day when the European Central Bank kept interest rates unchanged and former FBI Director James Comey gave testimony to a Senate panel about meetings with President Donald Trump that centered on whether the president sought to quash part of a federal probe into Russian meddling in the 2016 election.

While bullion prices in dollar terms have come off seven-month highs, assets in the SPDR Gold Trust, the largest exchange-traded fund backed by the metal, have expanded to 867 metric tons, the highest level since December.

Full article on Bloomberg

News and Commentary

Gold in Pounds Rises to Seven-Week High on Hung U.K. Parliament (Bloomberg.com)

Sterling Falls Sharply On Hung Parliament In UK General Election (Investing.com)

Gold Imports by India Jump Fourfold as Tax Fear Spurred Stocking (Bloomberg.com)

Banco Popular faced eurozone’s first large-scale bank run – ECB (Reuters.com)

With gold mining activity nearing pre-boom levels, is this the end of the downturn? (ABC.net)

Source: Zero Hedge

Someone Just Dumped $4 Billion Of Gold Futures Ahead Of Comey Testimony (ZeroHedge.com)

40.5 Tonnes Of Paper Gold Dumped In 4 Minutes (InvestmentResearchDynamics.com)

The World’s Most And Least Peaceful Countries (Statista.com)

Spain’s Banco Popular Bailed In, Acquired By Santander For €1.00 (ZeroHedge.com)

India’s Tax Change Will Increase Gold Demand To 950 Tonnes By 2020 (Barrons.com)

END

 

Trading today in gold:

the Crooks are at it again:

(courtesy zero hedge)

UK Election Chaos Sparks Selling Spree In Bonds & Bullion

Because nothing says sell safe-havens like a shocking election result in the nation at the center of European Union chaos…

Exit Polls signal May failure… sell Gold

 

At least bonds initial reaction made some sense… but since then it’s been Sell the dip in yields and buy stocks… because more QE will paper over any political cracks, we’re sure…

Some have suggested that this is due to the May coalition implying a ‘softer’ Brexit, implying less global turmoil, implying less need for safety? We remind those ‘thinkers’, like pregnancy, there’s no half-Brexit.

end

 

Mexico owes Canadian miners more than 360 million dollars with Goldcorp the lions share at 230 million

(courtesy Reuters/GATA)

Mexico owes Canadian miners more than $360 million, Reuters says Submitted by cpowell on Thu, 2017-06-08 15:15. Section: By Alexandra Alper and Susan Taylor
Reuters
Thursday, June 8, 2017Mexico’s tax agency is holding more than $360 million in tax rebates owed to six Canadian miners, including $230 million to Goldcorp Inc., according to sources and official documents seen by Reuters, escalating the situation into a showdown between the Mexican government and Canadian mining firms operating in Mexico.In a string of meetings, Canadian officials have pressed Mexico to fix the problem, which hamstrings mining companies’ ability to invest in operations and is particularly difficult for smaller, cash-strapped miners and explorers, people familiar with the matter said.Vancouver-based Goldcorp declined to comment on its outstanding refund, which represents 142 percent of its 2016 net profit and 6 percent of its full-year revenue.Goldcorp, the world’s No. 3 gold miner by market value, is owed the largest amount, according to documents seen by Reuters, followed by Torex Gold Resources, a small, Toronto-based miner that began commercial production at its Mexico mine last year and is waiting on a refund of some $66.5 million. …… For the remainder of the report:http://www.reuters.com/article/us-mexico-mining-tax-exclusive-idUSKBN18Z…

* * *

END

Chris Powell comments on the huge raid we have been experiencing this past two days:

(courtesy Chris Powell/GATA)

 

Gold’s counterintuitive movement is an old story but it can’t be told

Submitted by cpowell on Thu, 2017-06-08 15:45. Section:

11:54a ET Thursday, June 8, 2017

Dear Friend of GATA and Gold:

Dave Kranzler of Investment Research Dynamics reports that a huge amount of “paper” gold was dumped on the futures exchange in New York today, apparently in connection with the anticipated congressional testimony of former FBI Director James Comey:

http://investmentresearchdynamics.com/40-5-tonnes-of-paper-gold-dumped-i…

Kranzler writes: “One/some/several ‘entities’ decided at 9:38 this morning that it was necessary to dump 14,315 contracts of paper gold. This is just the August contract. In total a lot more was unloaded. This represents 1.43 million ounces of gold. The Comex is showing only 900,000 ounces of ‘gold’ as ‘registered,’ or available for delivery in June, July, and August (assuming all of that gold is actually sitting physically in the Comex vaults as reported). If we make that generous assumption, 531,000 ounces of paper gold were naked-shorted.”

The counterintuitive movement of the gold price long has been one of GATA’s major points. It came to the attention of the Bank of Russia back in 2004, when the bank’s deputy chairman, Oleg V. Mozhaiskov, cited it in remarks to the London Bullion Market Association meeting in Moscow.

Mozhaiskov said: “The statistical correlation between the market prices of dollar and gold is obvious. For the problem we discuss today it means specifically that gold, in addition to its unique physical and chemical properties used in industry, has retained its particular monetary attractiveness for cautious financial investors, and its market price is still heavily influenced by the state of the international monetary system.

“This dualism in gold price formation distinguishes it from other commodities and makes the movements in the price sometimes so enigmatic that market analysts need to invent fantastic intrigues to explain price dynamics. Many have heard of the group of economists who came together in the society known as the Gold Anti-Trust Action Committee and started a number of lawsuits against the U.S. government, accusing it of organizing an anti-gold conspiracy. They believe that with the assistance of a number of major financial institutions (they mention in particular the Bank for International Settlements, J.P. Morgan Chase, Citigroup, Deutsche Bank, and others), some senior officials have been manipulating the market since 1994. As a result, the price dropped below US$300 an ounce at a time when it should, if it had kept pace with inflation, have reached US$740-760.

“I prefer not to comment on this information but dare assume that the specific facts included in the lawsuits might have given ground to suspicion that the real forces acting on the gold market are far from those of classic textbooks that explain to students how prices are born in a free market.”

Mozhaiskov’s address is posted at GATA’s internet site here:

http://www.gata.org/node/4235

GATA often has quoted the incisive remark of South African gold advocate Peter George on the eve of GATA’s conference in Dawson City, Yukon, in August 2005, a remark captured at the 35-second mark in the first video frame at GATA’s Internet site here:

http://www.gata.org/node/20

George said: “In the last 10 years the central banks have effectively shown that when there is a real crisis, gold actually goes down. And it’s so blatant, it’s a joke.”

Your secretary/treasurer has put it more sardonically, as in a dispatch in 2012:

http://www.gata.org/node/11426

“If the Northern Hemisphere was destroyed in a nuclear war, the Federal Reserve, JPMorganChase, and HSBC would get some brokers to Sydney, Rio de Janeiro, and Johannesburg to sell gold futures massively and drive the price down by at least 5 percent. Kitco market analyst Jon Nadler would crawl out from the rubble and opine to the cockroaches that the gold price had fallen because so many gold buyers had been killed, as he always had predicted would happen. CPM Group’s Jeff Christian would telephone New Zealand not to worry because he was flying down with reams of gold-colored paper that would work just as well in Wellington as it did in New York as long as nobody asked what was behind it. And the World Gold Council would console itself with whatever high-fashion models could be found wearing nose rings in French Polynesia.”

Mainstream financial news organizations know all about this but are not likely to find it curious while JPMorganChase, HSBC, and other bullion and investment banks remain among their largest advertisers and while their organizations are owned by large multi-media corporations heavily regulated by governments. For as Upton Sinclair observed in 1934 as he tried to break through the media oligopoly of his time in his campaign for governor of California, “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

 

END

A great reason to whack gold today:  Gold imports jump 400% as the increase in GST tax fear as spurred stocking of gold

(courtesy Bloomberg)

Gold imports by India jump fourfold as tax fear spurred stocking Submitted by cpowell on Fri, 2017-06-09 03:25. Section: By Swansy Afonso and Shruti Srivastava
Bloomberg News
Thursday, June 8, 2017India, which vies with China as the world’s top gold consumer, saw a fourfold increase in imports of the precious metal in May as traders stocked up fearing that the government would fix a higher rate for jewelry under a new national goods tax to be implemented from next month.Overseas purchases advanced to 126 metric tons in May from 31.5 tons a year earlier, according to a person familiar with provisional data from the finance ministry, who asked not to be identified as the data aren’t public. Finance Ministry spokesman D. S. Malik declined to comment on the data.India fixed the goods and services tax for gold at 3 percent, effective from July 1. The rate is lower than expected, Ketan Shroff, joint secretary at the India Bullion and Jewellers Association Ltd. said on Monday. The duty will replace more than a dozen domestic levies including excise tax and state tariffs, making India a common market for the first time. …… For the remainder of the report:https://www.bloomberg.com/news/articles/2017-06-08/gold-imports-by-india…

* * *

END

totally absurd:  Jim Cramer discusses bitcoin and highlights that it may hit 1 million dollars.

(courtesy Mish Shedlock/Mishtalk)

 

 

Jim Cramer Goes Batty: “Bitcoin May Hit $1,000,000”; Act Now Before It’s Too Late!

Authored by Mike Shedlock via MishTalk.com,

It’s hard to know when bubbles will end but when analysis goes ape-sh*t batty, it’s easy to know the bubble exists.

Jim Cramer’s analysis of Bitcoin provides a perfect example.

CNBC reports Cramer says it’s possible bitcoin could reach $1 million one day.

The price of digital currency stockpiled by companies to pay off potential cyberthreats could reach $1 million one day, CNBC’s Jim Cramer said Wednesday.

 

Cramer was responding to a recent comment by Business Insider CEO Henry Blodget, who said bitcoin could go to $1 million.

 

“I think it could because the European banks are frantically trying to buy them so they can pay off ransomware. It’s a short-term way to be able to deal with cybersecurity. It is the way to pay off the bad guys,” Cramer said on “Squawk on the Street.”

 

“When you get hit and you’re not sure how to do bitcoin, these cyberattackers have customer service desks,” Cramer said.

What Blodget Really Said

Blodget also mentioned the downside: “Bitcoin could go to $1 million (or fall to $0),” said Blodget maintains the view that “ultimately, Bitcoin has no intrinsic value.”

New Target $1,000,000

The Coin Telegraph reports Bitcoin Price Can Reach $1 Mln: CNBC’s Jim Cramer.

On the CNBC show “Squawk on the Street,” Cramer stated that the demand toward Bitcoin is rapidly increasing and because of Bitcoin’s decentralized nature, its price could potentially enter the $1 mln region, which would bring the market cap of Bitcoin to tens of trillions of dollars.

 

However, Cramer’s reasoning behind his Bitcoin price prediction was fundamentally flawed as he failed to grasp the core purpose of Bitcoin and why investors are starting to purchase Bitcoin.

 

“I think it could because the European banks are frantically trying to buy them so they can pay off ransomware. It’s a short-term way to be able to deal with cybersecurity. It is the way to pay off the bad guys.”

 

Such claim is evidently non-factual because the European Bitcoin exchange market only accounts for nine percent of the global Bitcoin exchange market and it is behind the US, Japan, China and South Korea in trading volumes.

 

More importantly, Cramer’s statement fails to consider the fact that Bitcoin is being utilized as a currency and safe haven asset more than it is being used as a lifeline to feed ransomware developers.

 

In the case of WannaCry ransomware, the biggest ransomware attack in history, the distributors earned less than $100,000. That is only 0.0012 percent of the European Bitcoin exchange market. Thus, to say that Bitcoin price is rising because of 0.0012 percent of traders from the fifth largest Bitcoin exchange market is not an accurate depiction of the surging Bitcoin price.

 

Regardless, Cramer believes that Bitcoin price will reach $1 mln one day due to its rapidly increasing trading volumes and demand from investors.

Frantically “Trying” to Buy Bitcoins?!

The idea that banks need to “try” to buy Bitcoins is absurd.

Do. Or do not. There is no try.

Customer Service Desks

Cyberattackers have “customer service desks”? really? And they can be trusted? And banks don’t have backups? So banks need to “try” to stockpile Bitcoins as a precaution? And that will push the price to $1,000,000?

At least Henry Blodget discussed the downside without absurd hype.

Action to Take

If you think Bitcoin has any chance of hitting $1,000,000 then buy one for $2,725 or so and relax. Bitcoin is a life-long insurance policy.

Unlike term insurance, Bitcoin never expires. And unlike real estate, it’s easily divisible.

So buy one, put it in your will, and pass it to your kids. But make them promise to hold on to it. After all, a single Bitcoin may very well be worth $1 billion someday!

Why not? Why not $10 billion?

Even at $1 million, the world would be flooded with tens-of-thousands or hundreds-of-thousands of dollar “billionaires”.

Hyperinflation Anyone?

Back in the real world, please think of what it would take for Bitcoin to hit $1,000,000. The answer is hyperinflation. The US dollar would essentially go to zero vs everything.

So when Cramer or anyone else discusses the possibility of $1,000,000 Bitcoins, they are really discussing the possibility of hyperinflation in US dollars.

Act Now Before It’s Too Late

This setup reminds me of a post I did in 2005: It’s Too Late.

I think it’s too late.

 

In fact I know it’s too late.

 

How do I know?

 

The following Email I received tonight should explain it nicely.

 

When you see stuff like this, not only is it too late, it’s way too late.

 

As a practical matter, and without all the hype, I will stick with gold even as I wish I had taken out some Bitcoin insurance at $1, $10, $100, or even $1,000.

Supposedly, it’s still not too late.

end

 

Your early FRIDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight    

1 Chinese yuan vs USA dollar/yuan  WEAKER 6.7971(DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES  WEAKER TO ONSHORE AT   6.7913/ Shanghai bourse CLOSED UP 8.06 POINTS OR 0.26%  / HANG SANG CLOSED DOWN 32.77 POINTS OR 0.13% 

2. Nikkei closed UP 104.00 POINTS OR 0.52%   /USA: YEN RISES TO 110.39

3. Europe stocks OPENED MIXED        ( /USA dollar index RISES TO  97.38/Euro DOWN to 1.1179

3b Japan 10 year bond yield: FALLS TO   +.056%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.13/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI::  45.78 and Brent: 47.94

3f Gold DOWN/Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.260%/Italian 10 yr bond yield DOWN  to 2.10%    

3j Greek 10 year bond yield FALLS to  : 6.01???  

3k Gold at $1273.00  silver at:17.35 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 4/100 in  roubles/dollar) 56.95-

3m oil into the 45 dollar handle for WTI and 47 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A SMALL SIZED DEVALUATION SOUTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.39 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9714 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0861 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  +0.260%

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 2.204% early this morning. Thirty year rate  at 2.861% /POLICY ERROR)GETTING DANGEROUSLY HIGH

5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

S&P Futures At Record High After “Shocking” UK Election Result  

“Triple Threat Thursday” is now a distant memory, with both the ECB and Comey testimony “non-events” for the market, although the UK general election was a shocker in which contrary to expectations, Theresa May lost her majority in Parliament, sending sterling tumbling overnight and prompting even more confusion about the UK’s political fate and the future of Brexit. That however did not spook risk assets, and on Friday morning, European stocks gained with Asian stocks little changed, while S&P500 futures were set for new all time highs. Just like after Brexit, it was U.K. stocks that rallied the most among developed markets as the pound fell.

With the majority of seats counted, May’s Conservatives had no way to win an outright majority in parliament. That raised fears the political turmoil could delay and confound talks on leaving the European Union, which are due to start in less than two weeks, and the pound shed over 2 percent against the dollar.

Sterling dropped as low as $1.2636 in early London trading, before clawing back some ground. Yields on 10-year gilts fell 3 basis points to 1.00 percent. However, the damage contained, with S&P futures edging up 0.2 percent to 2,434, and just shy of record highs.

“The uncertainty is bad news for sterling,” said Bank of America, Merrill Lynch European equity & cross-asset strategist James Barty. “I think for the global market it doesn’t matter. Unlike Brexit, which at the time had a spillover into other markets, this is a very UK-specific thing.”

Most impacted by the UK result was the pound, which plunged the most in eight months as the election intended to strengthen Prime Minister Theresa May’s hand in negotiations with the European Union instead cast doubt over her future. The currency’s retreat gave British stocks a boost, but the election’s impact beyond the U.K. was muted.

The euro extended losses to three days, and the Stoxx Europe 600 Index swung. Fears of a supply glut continue to weigh on oil, but it managed to reverse an earlier decline.

“For now, the results of U.K. elections do not appear to be threatening the global growth story,” Mark Haefele, global chief investment officer at UBS Group AG, said in a note to clients. But for Britain,“political uncertainty is likely to more than offset any benefit from a marginally weaker pound,” he said.

The FTSE 100 Index jumped 0.8 percent. The Stoxx Europe 600 Index swung before trading little changed. Futures on the S&P 500 rose 0.1 percent. The underlying gauge advanced less than one point on Thursday, for a second day of gains.

In other overnight news, there was muted reaction to China inflation report as producer prices missed expectations, and eased further; PBOC reverse repos close to maturities; overnight Hibor falls for sixth day; Shanghai Composite closed modestly higher.

Overnight, Wall Street had also seemingly judged that the testimony of former FBI director James Comey was not life-threatening for the administration of President Donald Trump. Comey accused Trump of firing him to try to undermine the investigation into possible collusion by his campaign team with Russia’s alleged efforts to influence the 2016 election.

“I think the market is taking less of an alarmist review of this situation because there is no smoking gun here,” said Jefferies & Co money market economist Thomas Simons. “So it’s not particularly impactful for thinking about … Trump’s economic agenda to go through.”

In commodity markets, spot gold was 0.3% lower at $1,274.20 an ounce. Oil prices remained subdued, wit Brent having settled at its lowest since Nov. 29, the eve of an OPEC production cut deal.

Bulletin Headline Summary from RanSquawk

  • UK PM May’s Conservative Party failed to win a majority in the UK general election although are still the largest party in government
  • The Northern Irish DUP are expected to support the Conservatives in a “confidence and supply” arrangement, not a formal coalition
  • Theresa May is now scheduled to head to Buckingham Palace to request to form a government

Market Snapshot

  • S&P 500 futures up 0.2% to 2,434.25
  • STOXX Europe 600 down 0.1% to 388.76
  • MXAP down 0.03% to 155.14
  • MXAPJ unchanged at 505.75
  • Nikkei up 0.5% to 20,013.26
  • Topix up 0.08% to 1,591.66
  • Hang Seng Index down 0.1% to 26,030.29
  • Shanghai Composite up 0.3% to 3,158.40
  • Sensex down 0.06% to 31,193.17
  • Australia S&P/ASX 200 up 0.02% to 5,677.80
  • Kospi up 0.8% to 2,381.69
  • German 10Y yield unchanged at 0.257%
  • Euro down 0.3% to 1.1178 per US$
  • Brent Futures down 0.4% to $47.69/bbl
  • Italian 10Y yield fell 12.1 bps to 1.884%
  • Spanish 10Y yield fell 2.8 bps to 1.448%
  • Brent Futures down 0.3% to $47.70/bbl
  • Gold spot down 0.3% to $1,274.34
  • U.S. Dollar Index up 0.5% to 97.43

Top Overnight News

  • May’s Bet Fails, Pound Falls as Government Loses Majority; House Passes Dodd-Frank Rollback Bill; FDA Toughens Stance on Opioids
  • Theresa May’s future as Britain’s prime minister was thrown into doubt after her gamble to call an early election backfired spectacularly, casting uncertainty over the government’s make-up as well as the direction and timing of negotiations on leaving the European Union
  • Ousted FBI chief James Comey and President Donald Trump accused each other of lying about their private encounters in the wake of dramatic Senate testimony that centered on whether the president sought to quash part of a federal probe into Russian meddling in the 2016 election
  • Dish Network, Amazon considering extending their partnership or potentially merging sometime in the next few months
  • Saudi Arabia dwarfs Qatar on almost any measure, yet there are plenty of ways the tussle between the Gulf neighbors could end up hurting the world’s biggest oil exporter — even if it wins
  • Central banks are poised to start rowing in the one direction again

Asian equities have been somewhat unreactive to this hurdle for PM May and the uncertainty now surrounding the UK political front, with Asian bourses as well as US equity futures relatively mixed. Nikkei 225 (+0.7%) has been the outperformer thus far following the softness in the JPY, which had been looking to test yesterday’s high around 110.40. Shanghai Comp (+0.2%). and Hang Seng (-0.1 %) struggled to find any firm direction, while the marginal gains in the ASX 200 (+0.2%) were led by the rise in miners. Finally, 10yr JGB traded marginally higher as yields trickled lower throughout the session, with JGB’s also supported by the BoJ’s rinban operation.

  • Chinese CPI (May) Y/Y 1.5% vs. Exp. 1.5% (Prey. 1.2%).
  • Chinese PPI (May) Y/Y 5.5% vs. Exp. 5.6% (Prey. 6.4%)

Top Asian News

  • China’s Factory Inflation Eases as Raw Material Prices Decline
  • Philippines Suspends Resorts World Manila’s Casino Permit: BTVPh
  • Great Wall Motor Gains as Strong Pre-Orders Seen for New Model
  • Li Ka-Shing’s Firms Slump as Falling Pound Hurts Profit Outlook
  • Hong Kong Stocks Retreat From 2015 High Amid Overheating Signs
  • Dalian Iron Ore Caps Third Weekly Drop on Steel Market Outlook
  • SoftBank Boosts Japan Stocks, Beating Impact of ‘Super Thursday’
  • Little Impact Seen From U.K. Vote, ECB Meet, Comey: Asian NDFs

In European trading, the weaker GBP has benefitted UK equities with the FTSE 100 opening higher by over 1% before paring some of the gains amid the political uncertainty over what comes next. Utility companies led the way higher with SSE and Centrica both near the top of the FTSE, while large multinationals were helped by the depreciation in the GBP. Unsurprisingly, banking names such as Lloyds and RBS, declined while homebuilders also fell as the increased uncertainty could ultimately slow house purchases. Defensive sectors drove gains in other European equity markets with health care stocks performing well across the region. Gilts opened lower but recovered as UK equity markets reversed some of the gains. The UK data had little impact on UK asset classes despite industrial output rising less than expected in April, after declining for the previous three months.

Top European News

  • Young Seek Revenge on Old as Divided Britain Upends its Politics
  • Airbus Warns U.K. Government: Retain Labor Mobility to Save Jobs
  • U.K. Heads for Hung Parliament as May’s Election Gamble Fails
  • U.K. Industrial Output, Manufacturing Rise Less Than Forecast
  • DUP Said to Consider Arrangement to Ensure May Has Support: Sky
  • M&G Bond Manager Says Election Could Lead to Second Brexit Vote

In currencies, the initial reaction was seen in the GBP after the exit poll released on Thursday evening, which showed the Conservatives would fall short of a majority. GBP/USD then dropped to its lowest level in 7 weeks as reports emerged that Theresa May would not resign, although some profit taking saw GBP/USD bounce a little off its lowest levels. Other FX markets have been relatively unreactive with JPY weakness observed amid USD/JPY demand at the Tokyo fix. Today sees large options (2.1 bIn) expire at today’s 1000am NY cut. The pound weakened 1.7 percent to $1.2732 at 10:58 a.m. in London.
The yen retreated 0.3 percent to 110.35 per dollar.  The euro slipped 0.3 percent to $1.1181. The Bloomberg Dollar Spot Index added 0.4 percent, gaining for a third day.

In commodities, WTI and Brent crude futures both stabilised after the large declines seen in the early part of the week and since the OPEC meeting in early June. The market has largely shrugged off the geopolitical tensions in the Middle-East with Qatar and other Gulf countries. West Texas oil gained 0.5 percent to $45.89 a barrel, after two days of losses. Crude has slumped this week as an unexpected increase in U.S. crude stockpiles cast doubt on OPEC’s ability to rebalance world crude markets.  Gold fell 0.3 percent to $1,274.18 an ounce, declining a third day.

Looking at the day ahead, while the fallout from the UK election will no doubt be front and centre, there is also a little bit of data to get through. This morning in Europe we get more hard data points with more industrial production prints due in France and the UK along with trade data out of Germany and also the UK. In the US we are due to receive the wholesale trade report. The EU/NATO Conference is also due today. It’s worth also noting that this Sunday France begins the two-step process to elect a new National Assembly with polls due to close on Sunday evening. The second round is on June 18th.

US Event Calendar

  • 10am: Wholesale Inventories MoM, est. -0.3%, prior -0.3%
  • 10am: Wholesale Trade Sales MoM, est. 0.2%, prior 0.0%

* * *

DB’s Jim Reid concludes the overnight wrap

You’ll wake up to shock and chaos this morning here in the UK. In numbers terms this election result is a bigger surprise than Brexit or Trump if not quite on the same scale in terms of wider global market implications.

I say wake up as if you’re like me you haven’t been to bed yet so forgive my rambling. With 516 out of 650 seats declared at 4.25am the BBC/ITV forecasts are that the ruling Conservative party will fall a handful of seats short of an overall majority. They may be able to form a working majority with the help of the Northern Irish Unionist Parties (who may win around 10 seats) but if so this would still be a very weak government and PM Theresa May might be vulnerable given she staked her reputation on holding this very early election when her party had a 10-20% lead in the polls. Another election is possible at any time really. How this leaves the Brexit negotiations is a complete mystery. The range of eventual outcomes are now much wider on this front. Hard line Brexit Tories will hold more power in a weak Tory administration of some form but the possibility of fresh elections relatively soon and an alternative more soft line approach is also a possibility. Given we’re on a tight Brexit timetable this is not great news for the UK. The Europeans must be watching with some amusement. Overall it’s going to be constitutional chaos in the UK for the foreseeable future. Ironically the Conservative Party look set to win around 44% of the vote and increase their share – an impressive number in the context of recent decades. However as we discussed yesterday the return to a two party state hasn’t allowed them to run away with things.

In markets Sterling immediately tumbled -1.96% as soon as the exit poll hit the screens, touching a low of $1.2709. It’s recovered a little but is still down -1.62% versus yesterday’s close. The moves have mostly been contained in the currency. FTSE 100 futures are -0.20% while S&P 500 futures are actually up slightly. Safe havens like Gold (-0.60%) and the Yen (-0.26%) are weaker and Treasuries are flat. Bourses in Asia are generally flat to up +0.90% too.

Whatever the overall results of this election some of the stats about potential age demographics of the voters is very interesting. Sky did a poll on election day and found amongst 18-34 year olds Labour were on 63% and Conservatives 27%. With 35-54 year olds both were on 43% and over 55 year olds Labour on 23% and Conservatives on 59%. Labour made a huge push for the young who don’t normally vote in high numbers and the Conservative Party actually proposed policies that worked against their natural older vote perhaps thinking their early lead in the polls gave them an opportunity to try to balance the books more. So were the young more motivated than normal and were the elderly less motivated? It’s fascinating as this shows the dilemma a lot of politicians have around the world. We generally have a wealth divide where the older generation (who normally vote) have a high proportion of it relative to the young who are generally in debt and/or in many countries unemployed. It feels this divide is at the higher end of the historical range.

Are the young starting to rebel more and are looking for hope? Can you politically afford to attack the wealthier older voter to help redistribution? One of the big themes of our long-term study last year was that we thought we were at the end of a 35 year super cycle of policy, politics and with it interest rates and asset prices. Our argument was that the Trump and Brexit vote marked the turning point when the disenfranchised were starting to actually win elections/ referendums. If policy wasn’t increasingly calibrated to these ‘forgotten’ people then the incumbents would get voted out. What we felt was that this would mean more fiscal spending, bigger deficits and less reliance on monetary policy at least until fixed income markets rebelled and then you’d probably get central banks forced to monetise that debt. This was our slow roadmap for the future and nights like last night may be another inching towards that. As Mr Trump has discovered it’s not easy to increase spending though but I think the trend will be up in the years to come.

There’s no doubt that this will dominate the rest of Friday for markets but investors have also got the ECB to mull over following an overall fairly dovish outcome from yesterday’s policy meeting. The most significant part of the statement and as largely expected was the removal of the “or lower” rates guidance and also upgrading economic growth forecasts by 0.1pp. Mario Draghi also said that risks to the growth outlook are now “broadly balanced” which represented an upgrade to neutral. However, the inflation tone was distinctly dovish. Draghi described the outlook for core inflation for the rest of the year as “low and flat” which as our European economists aptly put is “insufficient”. Core inflation forecasts for 2018 and 2019 were revised lower by 0.1pp to 1.4% and 1.7%. Our colleagues note that these numbers are still consistent with a gradual exit but the ECB can afford to take it slowly. Our team highlight another two important points from the meeting. The first is that there was not a single hint of the ECB preparing the ground for tapering or a phasing out of QE and the second is that the Council is cautious about wage inflation. As a result, our economists have now pushed back their timing of exit. They had expected a taper pre-announcement decision in September and one-off depo hike in December. However they now expect a six-month extension of QE to be announced in December at a slower pace of €40bn. QE will likely continue in H2 2018 at a slower pace still and a oneoff depo rate hike cannot be excluded in mid-2018 if further concessions need to be made to the hawks. In summary the start of the policy rate tightening cycle is more likely to be mid-2019 than end 2018. You can find more in our economists’ report here.

Markets reacted swiftly to the ECB with the Euro edging lower initially before consolidating into the close to finish -0.38%, although it is down another -0.27% this morning and below $1.120. Benchmark Bund  (-1.3bps) and OAT (-4.8bps) yields were both lower although it was the periphery which stood out with yields down 5bps to 13bps although as you’ll see shortly for reasons as much linked to Italian politics. 10y Treasury yields were actually a little higher (+1.6bps to 2.189%) while the S&P 500, despite getting a decent boost from Banks, limped to a +0.03% close. The James Comey testimony ended up being mostly a nonevent with both sides trading blows and accusing each other of lying, but as we had seen on Wednesday there was no silver bullet to really get markets excited about. It’s worth noting that late last night the House Republicans passed a bill to dismantle parts of the Dodd-Frank Act following a 233-to-186 majority. The Bill passes to the Senate now however it’s not expected to have much chance of passing in its current form.

Staying with markets, as noted above the standout mover in European bond markets yesterday was BTPs. 10y yields fell 12.8bps to 2.154% and the most since March 2016. This followed lawmakers in the  ruling Democratic Party saying that the push to reform the country’s electoral law was “dead” which in turn lowered the probability of a snap election as early as this autumn. This followed the far right anti-establishment 5SM rejecting the proposal in a parliament debate yesterday. The FT suggested that the PD and 5SM could still go back to the drawing board in the coming days however so it might not be the last we hear of it. Led by Banks, the FTSE MIB also rallied to the tune of +1.46% yesterday which was in the context of the Stoxx 600 (-0.01%) closing more or less flat.

Back to Asia this morning where inflation reports have also been released in China. Headline CPI for May has nudged up three-tenths to +1.5% yoy, matching market expectations, however PPI slipped a little more than expected to +5.5% yoy (vs. +5.6% expected) from +6.4% in April. That makes it three straight monthly declines in the annual PPI reading although as a reminder that does follow 14 straight months of acceleration.

With regards to the remaining data yesterday, in the US the sole release was the latest weekly initial jobless claims print which came in at 245k and which has left the four-week moving average at a still low 242k. In Europe the main focus was on the final Q1 GDP revision for the Euro area which was revised up onetenth to +0.6% qoq after expectations were for no change. That also saw the annual rate notched up two-tenths to +1.9% yoy and the highest since Q4 2015. Away from that Germany reported a better than expected +0.8% mom uplift in industrial production in April (vs. +0.5% expected). That has lifted annual growth to +2.9% yoy from +2.2%.

Looking at the day ahead, while the fallout from the UK election will no doubt be front and centre, there is also a little bit of data to get through. This morning in Europe we get more hard data points with more industrial production prints due in France and the UK along with trade data out of Germany and also the UK. In the US we are due to receive the wholesale trade report. The EU/NATO Conference is also due today. It’s worth also noting that this Sunday France begins the two-step process to elect a new National Assembly with polls due to close on Sunday evening. The second round is on June 18th

3. ASIAN AFFAIRS

i)Late THURSDAY night/FRIDAY morning: Shanghai closed UP 8.06 POINTS OR 0.26%   / /Hang Sang CLOSED DOWN 32.77 POINTS OR 0.13% The Nikkei closed UP 104.00 POINTS OR 0.52%/Australia’s all ordinaires  CLOSED UP 0.01%/Chinese yuan (ONSHORE) closed DOWN at 6.7971/Oil UP to 45.70 dollars per barrel for WTI and 47.94 for Brent. Stocks in Europe OPENED MIXED       ..Offshore yuan trades  6.7913 yuan to the dollar vs 6.7971 for onshore yuan. NOW  THE OFFSHORE IS MUCH WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN A LITTLE WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE MUCH STRONGER DOLLAR. CHINA NOT HAPPY WITH THE NEWS THAT ITS DEBT HAS BEEN DOWNGRADED  

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

A little background on those 4 anti ship missiles fired by North Korea.  It was a test  for precise accuracy and it is alarming to the west

(courtesy Mac Slavo/SHTFPlan)

 

 

WW3 Approaches, North Korea Launches 4 Anti-Ship Missiles

MacSlavo

SHTFplan.com

 

 

North Korea fired four anti-ship missiles into the sea east of the Korean Peninsula Thursday. The South Korean military said this new test was intended to demonstrate North Korea’s advancements in “precise targeting capability.”

As tensions continue to rise between the United States and the rogue nation of North Korea, the missile tests conducted also continue. This is now Kim Jong-Un’s fourth missile test in one month, as the volatile North Korean dictator continues to balk at the United Nations sanctions against his country. In fact, this is the nation’s first missile test since the UN implemented more, harsher, sanctions on the fascist nation.

South Korea’s joint chiefs said the projectiles, launched near the eastern port city of Wonsan, were believed to be surface-to-ship cruise missiles. “We assess that North Korea intended to show off its various missile capabilities, display its precise targeting capability, in the form of armed protests against ships in regard to US Navy carrier strike groups and joint naval drills,” Roh Jae-cheon, a spokesman for South Korea’s Joint Chiefs of Staffs told reporters.

The missiles went about 200 kilometers (124 miles), South Korea’s military said in a statement, adding the US military was undertaking a more detailed analysis. “Our military has strengthened surveillance and alertness readiness in cases of additional provocation by [the] North Korean military and is maintaining all readiness posture while we are tracking and monitoring [the] related situation,” the statement read.

Analysts say each launch, regardless of its success, improves missile technology for the dictatorship. The tests also ultimately provide information that will bring North Korea closer to its goal of building a missile that could reach the US. The launch comes one day after South Korea’s government suspended the deployment of a controversial US missile defense system which had strained relations with China and angered North Korea.

North Korean state media made no mention of the reported launches Thursday, but earlier warned Japan not to “gamble on its destiny.” The statement said, “If Japan is concerned about its security, it should not act (as) a poodle of the US but withdraw its hostile policy toward the DPRK and remove the US military bases for aggression (sic) from its territory.” Japan has been conducting evacuation drills in response to the North Korean provocation of war, and now they are mulling over the addition of missile shelters.

As North Korea continues to push the limits of it’s neighboring nations and the United States, it certainly seems like WW3 is becoming inevitable.

end

b) REPORT ON JAPAN c) REPORT ON CHINA

Whenever you see the Chinese 5 year/10 yr invert , then recession is flashing red!! Actually everything is inverting!

(courtesy zerohedge)

“Historic” Chinese Yield Curve Inversion Flashes Recession

A month ago, China 5s10s curve inverted for the first time ever, flashing warning signs of an imminent recession(but technical, liquidity factors were offered as excuses for this shift in the belly of the curve). The curve then double-inverted (with 3s10s inverting) seemingly confirming fundamental fears. And now, China’s yield curve is inverted from 1Y to 10Y for the second time in history.

China’s $1.7 trillion government-bond market is turning curiouser and curiouser

The yield on China’s one-year government bond climbs 6 basis points to 3.66%, rising above the 10-year yield of 3.65%, ChinaBond data show.

This is only the second time that the yield curve has inverted in data going back to 2006, with the first coming during a record cash crunch in June 2013.

As The Wall Street Journal recently wrote, such a “yield-curve inversion” defies normal market logic that bonds requiring a longer commitment should compensate investors with a higher return. It usually reflects investor pessimism about a country’s long-term growth and inflation prospects.

Perplexed traders and analysts offered up many excuses…

“Many of us are scratching our heads for an explanation because this kind of curve inversion is absolutely not normal,” said Wang Ming, a partner at Shanghai Yaozhi Asset Management Co., a bond fund that manages 2 billion yuan ($289.66 million) in assets.

 

“The inversion is a form of mispricing in the bond market,” said Liu Dongliang, senior analyst at China Merchants Bank . “The fact that no one is taking the bargain despite the higher yield on the five-year bond just shows how depressed investors’ mood is.”

 

“It’s really difficult to predict when the selloff or such anomalies will end because China’s bond market is reacting to the regulatory crackdown only and is no longer reflecting economic fundamentals,” said China Merchants Bank’s Mr. Liu.

But of course, the reality is – without massive and continued credit creation, there are very large questions about just how ‘dynamic’ Chinese growth could be and while technical flows are certainly part of the reasoning for short-end yields rising, the question is, why wouldn’t the rest of the world pile in to ‘reach for yield’… unless the fundamentals really did have them worried?

The nature of the inversion (higher yields, higher funding costs, and leverage pressure) is starting to reflexively impact the real economy (and hence the chances of dramatically lower growth/recession), as The FT reportsChinese corporate bond financing hit a record low in May, as a market rout discouraged new issuance while a wave of previously issued notes came due.

The combination of tight liquidity and a regulatory crackdown on leveraged investment in bonds has hammered China’s debt market in recent months.

Net corporate bond financing — new issuances less maturities — totalled negative Rmb217bn ($31bn) in May, well below the previous record low of negative Rmb89bn in February, according to data from Wind Information.

 

A “regulatory windstorm” led by China’s ambitious new banking regulator, Guo Shuqing, has targeted banks’ use of borrowed money to invest in bonds. The People’s Bank of China has also drained liquidity from the money market, making it more expensive for banks to borrow from each other to fund bond purchases.

 

“Banks’ demand for bonds has drastically reduced. The shock has been pretty large,” said Xu Hanfei, chief fixed-income analyst at China Merchants Securities in Shanghai. “Pressure has spread from the liabilities side to the asset side,” he said, referring to the impact of higher funding costs on demand for bonds.

 

“In the context of the increasing financing difficulty for bonds and non-standard (shadow bank) products, issuers of low quality are more severely impacted, and the corresponding credit risks tend to increase,” Haitong chief economist at Jiang Chao wrote this week.

Investors are also nervous about rising credit risk.

According to a survey of investors by Haitong Securities, only 5 per cent of bond investors are “optimistic” about low-rated corporate bonds. Companies cancelled or postponed 400 planned bond sales worth Rmb390bnbn in the year to May, up from Rmb286bn in cancellations a year earlier, according to Wind data.

But apart from that, we are sure everything is fine in the world’s biggest/second-biggest economy.

end

4. EUROPEAN AFFAIRS

UK

Theresa May wins  318 seats and falls short of a majority.  She will hook up with the Irish rightwing Democratic Unionist Party to allow her to govern:

(courtesy zerohedge)

Theresa May Says She Will Form A Government With Support Of DUP Party

In a last ditch Hail Mary effort to avoid resignation and new snap elections, Theresa May arrived at Buckingham Palace earlier to meet with the Queen where she will attempt to cling to power by linking her Conservative party with Northern Ireland’s rightwing Democratic Unionist Party (DUP) following the disastrous election that left her short of a governing majority.

As noted earlier, May has reached an understanding with Northern Ireland’s Democratic Unionist Party to form a coalition U.K. Government. With 649 of 650 seats declared, the Conservatives had won 318 seats and Labour 261. 326 seats are needed for majority. The DUP, which took 10 seats, was considering an arrangement which would involve it supporting a Conservative minority government on key votes in parliament but not forming a formal coalition, Sky said.

“If … the Conservative Party has won the most seats and probably the most votes then it will be incumbent on us to ensure that we have that period of stability and that is exactly what we will do,” a grim-faced May said after winning her own parliamentary seat of Maidenhead, near London.

The prime minister is headed back to Downing 10 after meeting with the Queen shortly after midday to seek permission from the Queen to form a new government despite the Tories winning just 318 seats in Thursday’s general election, eight short of the 326 needed to secure a majority on their own. The support of the 10 members of parliament elected for the DUP, the more hardline of the two traditional pro-British parties in Northern Ireland, would put Mrs May just over the threshold to form a government.

According to the FT, the DUP has not agreed formally to join a coalition with the Tories, though such arrangements could be agreed later. Regardless, the deal means Mrs May will govern over a union of highly disparate interests. The Tories’ surprising expansion in Scotland means her new parliamentary party will include several MPs with strong pro-EU credentials, while the DUP is a fierce supporter of departure from the EU — even though Northern Ireland voted to remain.

In addition, she will face fierce resistance from opposition parties at Westminster. Leaders of the three largest, including Labour’s second-place finisher Jeremy Corbyn, all called for her to resign.

 

Nicola Sturgeon, the Scottish first minister and head of the Scottish National party, said Mrs May had “lost all authority and credibility” while Liberal Democrat leader Tim Farron said she “should be ashamed” and should resign “if she has an ounce of self respect”.

While the DUP is not a perfect match for the Tories ideologically — they are further left on public spending but more hardline on social issues such as gay marriage and abortion — the party is opposed Mr Corbyn, who expressed support for Irish nationalism during the 1980s.

“The two parties have worked well together for two years; there’s no reason to suppose they won’t continue to do so in the future,” said one DUP official. “But the point made time after time to Labour MPs remains: for as long as you allow yourselves to be led by an IRA cheerleader, you exclude yourselves from entering Number 10.”

Upon return to Downing 10, Theresa May said that she will “now form a government” as she seeks to govern with the support of the Northern Irish DUP party. She also adds that Brexit talks will start in 10 days as scheduled.

Earlier in the day, European Union leaders expressed fears that May’s shock loss of her majority would delay the Brexit talks, due to begin on June 19, and so raise the risk of negotiations failing.

As Reuters reported, May’s Labour rival Jeremy Corbyn, once written off by his opponents as a no-hoper, said May should step down and he wanted to form a minority government.

“We need a government that can act,” EU Budget Commissioner Guenther Oettinger told German broadcaster Deutschlandfunk. “With a weak negotiating partner, there’s a danger that the (Brexit) negotiations will turn out badly for both sides.”

The EU’s chief negotiator said the bloc’s stance on Brexit and the timetable for the talks were clear, but the divorce negotiations should only start when Britain is ready. “Let’s put our minds together on striking a deal,” Michel Barnier said.

But there was little sympathy from some other Europeans. “Yet another own goal, after Cameron now May, will make already complex negotiations even more complicated,” tweeted Guy Verhofstadt, the former Belgian premier who is the European Parliament’s point man for the Brexit process.

END

 

An important lesson for us all.  A must read…

(courtesy Simon Black/SovereignMan.com)

 

This Is How A “Bail-Out” Becomes A “Bail-In”

Authored by Simon Black via SovereignMan.com,

Here’s the perfect example of how insane our financial system has become.

It was announced yesterday that, after a 24-hour white-knuckled ride, Spanish banking giant Banco Popular had been sold to Banco Santander for the price of just 1 euro.

Note- that’s 1 euro in TOTAL. Not 1 euro per share.

Banco Popular had once been one of Spain’s largest banks.

But just as certain banks tend to do from time to time, Popular sacrificed responsibility and good conduct for quick profits.

They spent years gambling their depositors’ savings away on idiotic, dangerous, pitiful loans. And those bad loans eventually came back to bite them.

The modern business of banking is all about pooling customer deposits together and making various loans and investments with those funds.

Safe, responsible banks make sensible investments.

They maintain extremely high loan standards. And they keep a SUBSTANTIAL rainy day fund set aside in case those loans and investments go bad.

Banco Popular did none of those things.

Back in 2006 during the height of the real estate bubble, for example, Popular maintained a liquidity ratio of less than 2% according to its annual report that year.

This means that over 98% of its customers’ savings had been gambled away on bad loans and bad speculations.

Eventually those risky loans started failing, and the bank started losing money.

Last year alone Popular lost 3.5 billion euros, which is about as much as they earned in all of the bubble years combined.

Fearing for the banks ability to continue servicing its customers, European regulators stepped in on Tuesday and forced a fire sale.

Banco Santander “won” that auction, again, paying a symbolic price of just 1 euro.

This means that Banco Santander will now inherit all the toxic loans (and consequent losses) that Popular had on its books.

The insanity here is that Santander had almost no time to conduct its due diligence, i.e. research the business to understand what they were buying.

Banco Popular had a balance sheet worth over $150 billion with hundreds of thousands of different loans.

It would take months to even begin scratching the surface of such a massive balance sheet.

By comparison, the last time I bought a business I paid $6 million and spent more than a year conducting due diligence.

Santander bought a $150 billion business and spent less than 24 hours trying to understand what they were buying.

This is nuts. And ENORMOUSLY risky for Santander.

But perhaps even more insane is that this deal is now being hailed by European governments and financial media as a wonderful solution to the looming problem of bank insolvency.

It doesn’t take a rocket scientist to understand that this problem wasn’t really solved.

It was just transferred from one bank to another. The assets are still toxic. They just happen to be owned by Santander now.

Most importantly, Banco Popular is FAR from alone.

Here in Italy, in fact, a number of smaller banks are teetering on insolvency.

And regulators have been scrambling trying to find potential suitors to copy this shotgun wedding ‘solution’.

But so far, no success.

Not a single bank in Italy has sufficient capital to absorb the toxic debts of another.

Plus the government itself is totally bankrupt.

So basically an insolvent government and insolvent large banks are trying to figure out how to bail out insolvent smaller banks.

It’s total madness.

And this is the important lesson: eventually they run out of options.

There’s no one left to bail out a bad bank… no taxpayers, no white knight, no bondholders, no shareholders. Nobody.

Except for depositors.

This is when a “bail out” becomes a “bail in”, and the depositors get stuck with the bill.

Bottom line: This matters. It’s your money at stake.

Don’t simply assume that your bank is in good condition. Examine their financial statements and find out for sure.

Don’t keep 100% of your life’s savings at a single institution. Make sure you diversify. If a bail-in ever occurs, it will be the largest depositors who get hit first.

And definitely consider diversifying geographically. Avoid keeping everything in the same country, especially if that country is bankrupt– the bail-in risk is much higher.

The world is a big place and there’s a ton of opportunity out there, including plenty of responsible, conservative places to bank.

And it’s hard to imagine you’ll be worse off because a portion of your savings is in a safe, well-capitalized bank.

end

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS Tillerson asks for the blockade against Qatar to stop as it is hindering the USA campaign against ISIS (courtesy zero hedge) Tillerson Tells Arab States To Lift Qatar Blockade: “It’s Hindering The Campaign Against ISIS”

Secretary of State Rex Tillerson called on the Saudi Arabia-led coalition, which includes UAE, Bahrain and Egypt and others, to lift its blockade of Qatar, saying that the cutoff is hindering the fight against the (Qatar-funded) Islamic State. Tillerson also said the blockade had led to food shortages and forced families to uproot themselves and pull their children from school.

“We believe there are unintended consequences, especially during this holy month of Ramadan but they can be addressed immediately,” Tillerson said.

The secretary of state said the Emir of Qatar has made progress in countering terrorism but needs to do more.  He added that after speaking to Gulf nations, he believes the countries involved in the dispute – all U.S. allies – are stronger together, and “the elements of a solution are available.” Even so, he said, Qatar must do more to combat extremism.

The Qatar crisis – the result of Saudi Arabia and its Arab allies severing diplomatic ties as well as land, sea and air travel with Qatar – has thrust the U.S. into a delicate position, because of its alliances with all sides, and because Qatar hosts the nerve center for U.S. air operations in the Middle East, including the fight against Islamic State. Making this more awkward is the widespread knowledge that both Qatar and Saudi Arabia are the biggest sponsors of terrorism in the region.

Separately Qatar’s foreign minister, Sheikh Mohammed bin Abdulrahman Al Thani, said that sanctions imposed upon his country violate international law, calling the moves by Saudi Arabia and other Arab nations an “unjust siege.”

speaking in the German town of Wolfenbuettel on Friday alongside German Foreign Minister Sigmar Gabriel, Qatari Foreign Minister Sheikh Mohammed bin Abdulrahman Al Thani also said that his nation’s hope was for diplomacy and dialogue.

He asked: “What crime did Qatar commit to deserve such a punishment that violates international law?”

Well, funding and supporting terrorism for once.

Gabriel said it was important to prevent any “further escalation” and that Germany was willing to help with any negotiations, noting that other diplomatic efforts were already being made by the U.S., Kuwait and others, and that he was “optimistic” they would be able to organize talks.

6 .GLOBAL ISSUES

Mexican Industrial production simply crashes in April

(courtesy zero hedge)

 

Mexican Industrial Production Crashes In April

Delayed blowback from Trump? Mexico’s Industrial Production crashed 4.4% in April – the biggest drop since Oct 2009 – with manufacturing dropping 1.7% after surging 8.5% in March.

This is the 3rd MoM drop in a row (and biggest MoM drop since Nov ’15)…

However, Manufacturing was not the worst of it as Mining plunged 9.6% YoY, Utilities declined 3.0%, and Construction tumbling 6.5%.

Whether it is the recent surge in the peso or fears oif trade wars, this is a somewhat unprecedented and sudden downshift.

end

7. OIL ISSUES

rig counts rise for the 21 st consecutive week

(courtesy zero hedge)

New US Shale Play Emerges As Rig Count Rises For 21st Week In A Row

Crude production from the Lower 48 dropped marginally last week, despite rising rig counts…

 

And in the last week oil rig counts rose once again (21st week in a row) up 8 to 741 – highest since April 2015 – notably given the lagged response to prices, we might expect the rig count rises to slow here.

But, while the Permian has dominated the conversation in recent months, OilPrice.com’s Irinia Slav explains the next big US shale play…

Media coverage of the U.S. shale oil and gas industry makes it sound like the Permian is the only place where things are happening. Everybody is buying acreage in the Permian, selling acreage in other shale plays, and production costs are falling the fastest in that same Permian.

True as this may be, this shale play is by no means the only one where production is growing. In fact, oil and gas output across the shale patch has been growing, as the Energy Information Administration’s latest drilling productivity report shows. And that’s not all because there is a new actor on stage: Powder River Basin in Wyoming.

Now, in its May drilling productivity report the EIA confirmed what media have been saying: the Permian is the hottest spot in the shale patch, with a 71,000-bpd increase in output in April. This hottest spot was followed by the Eagle Ford, which some see as a declining play but if we are to believe EIA data, it is far from a decline: drillers there added 36,000 bpd to total output in April.

Bakken, which the EIA last year said will become the largest source of tight oil and gas in the U.S., added 6,000 bpd to daily production, with Niobrara added 7,000 bpd. Even the Marcellus and Utica plays, which are more famous for their gas, are yielding more crude, with both adding 1,000 bpd to overall output in April.

All in all, despite much skepticism and open doubts in the actual performance of U.S. shale, the fact is that shale drillers are indeed boosting production. There is a school of thought that says the shale bubble will burst at some point, when producers stop being able to service the debts they are taking out to increase production but let’s bear in mind that they are not just investing in more production. Shale drillers are also investing in efficiency improvements that lower their production costs.

Now for the new player in the field, which is in fact not new at all. Bloomberg’s Alex Nussbaum calls Wyoming’s (and Montana’s) Powder River Basin “a home to cattle ranches and coal mines.” Yet until the 2014 price crash, the PRB was one of the shale oil basins that were growing at the fastest rate. Then prices tanked and drillers started getting out.

Now drillers are returning to the PBR. Crude oil production in the basin jumped to 1,000 bpd of oil equivalent over the last 12 months from less than 800 barrels and a major drilling expansion is on the way.

EOG, Chesapeake, and Devon Energy are planning to spend a combined US$600 million in that part of Wyoming, and pipeline operators are eager to expand in that direction. The reason: land prices are much lower than those in the Permian, for the moment. It’s all about early birds catching worms, and the earlier a bird is the better because prices in Powder River are already rising. A year ago, Nussbaum says, drilling permits went for less than US$1,000 per acre. Now, an acre costs US$17,000.

It may be that the Powder River Basin will repeat the success of the Permian, not least because its geology is similar, which of course means low production prices. Just this week, a local midstream operator, Evolution Midstream, purchased a gas gathering system from peer Lucid Energy Group, saying the asset will make the foundation for regional expansion now that interest in the Powder River Basin is growing so fast.

8. EMERGING MARKET

end

 

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings FRIDAY morning 7:00 am

Euro/USA   1.1179 DOWN .0009/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA RAISING INTEREST RATES/EUROPE BOURSES MIXED  

USA/JAPAN YEN 110.39 UP 0.519(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2776 UP .0054 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT

USA/CAN 1.3508 DOWN .0015 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS FRIDAY morning in Europe, the Euro FELL by 9 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1179; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  UP 8.06 POINTS OR 0.26%     / Hang Sang  CLOSED DOWN 32.72 POINTS OR 0.13% /AUSTRALIA  CLOSED UP 0.01% / EUROPEAN BOURSES OPENED MIXED

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this FRIDAY morning CLOSED UP 104.00 POINTS OR 0.52%

Trading from Europe and Asia:
1. Europe stocks  OPENED MIXED

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 32.77 POINTS OR 0.13%  / SHANGHAI CLOSED UP 8.06 POINTS OR 0.26%   /Australia BOURSE CLOSED UP 0.01% /Nikkei (Japan)CLOSED UP 104.00 POINTS OR 0.52%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1273.65

silver:$17.34

Early FRIDAY morning USA 10 year bond yield: 2.204% !!! UP 2 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.861, UP 2  IN BASIS POINTS  from THURSDAY night.

USA dollar index early THURSDAY morning: 97.38 UP 47  CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

 

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And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 3.017%  DOWN 1/2 in basis point(s) yield from THURSDAY 

JAPANESE BOND YIELD: +.056%  DOWN 2  in   basis point yield from THURSDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.444%  DOWN 3 IN basis point yield from THURSDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.087 DOWN 11   POINTS  in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 65 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.264% UP 1 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR FRIDAY

Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM 

Euro/USA 1.1197 UP .0009 (Euro UP 9 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110.49 UP  0.623 (Yen DOWN 63 basis points/ 

Great Britain/USA 1.2727 UP 6 ( POUND UP 6 basis points) AND DOWN 200 POINTS FROM 6 PM LAST NIGHT

USA/Canada 1.3436 DOWN .0087 (Canadian dollar UP 87 basis points AS OIL ROSE TO $46.06

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This afternoon, the Euro was UP by 9 basis points to trade at 1.1197

The Yen FELL to 110.49 for a LOSS   of 63  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL BY 200  basis points, trading at 1.2727/ FROM 6 PM LAST NIGHT

The Canadian dollar ROSE by 87 basis points to 1.3436,  WITH WTI OIL RISING TO :  $46.09

The USA/Yuan closed at 6.798/ the 10 yr Japanese bond yield closed at +.056% DOWN 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 1/3 IN basis points from THURSDAY at 2.209% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.866  UP 1  in basis points on the day /

Your closing USA dollar index, 97.29 UP 38 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY: 1:00 PM EST

London:  CLOSED UP 77.35 POINTS OR 1.04%
German Dax :CLOSED UP 102.14 POINTS OR 0.80%
Paris Cac  CLOSED UP  35.47 POINTS OR 0.67% 
Spain IBEX CLOSED  UP 25.20 POINTS OR 0.23%

Italian MIB: CLOSED  UP 90.01 POINTS/OR 0.38%

The Dow closed UP 89.44 OR 0.42%

NASDAQ WAS closed DOWN 113.85 POINTS OR 1.80%  4.00 PM EST
WTI Oil price;  46.06 at 1:00 pm; 

Brent Oil: 48.34 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  56.97 DOWN 5/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES T0  +0.264%  FOR THE 10 YR BOND  4.PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 5:00 PM:$45.91

BRENT: $48.21

USA 10 YR BOND YIELD: 2.200%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.856%

EURO/USA DOLLAR CROSS:  1.1194 UP .0006

USA/JAPANESE YEN:110.33  UP 0.455

USA DOLLAR INDEX: 97.27  UP 35  cent(s) ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2736 : down 200 POINTS FROM THURSDAY NIGHT  

Canadian dollar: 1.3464 down 2 BASIS pts 

German 10 yr bond yield at 5 pm: +0.264%

END

And now your more important USA stories which will influence the price of gold/silver TRADING IN GRAPH FORM FOR THE DAY FANGtastrophe Strikes Stocks As Growth Gamble Gives Up After VIX Hits 24-Year Lows

Been a while since we have been able to use this one…

Something changed today – the incessant bid for growth disappeared and value outperformed dramatically…

 

Small Caps soared again today, before getting dragged down with everything else… (but NASDAQ plunged – worst day since Brexit) – They tried to BTFD

 

And Small Caps have still managed to rise for 3 straight weeks…The Dow managed to bounce back into the green towards the close on a big buy-biased MOC

 

Small Cap Financials exploded higher in the last few days – the biggest jump since the election

 

VIX hit a 24-year low before all hell broke loose spiking above 12, and its 50/100 DMA…

 

At 9.37 lows today, this was the lowest VIX print since 1993…

 

FANG stocks were slammed today…biggest down day since the election

AMZN lost $17B in mkt cap in about 5 seconds.

Not helped this note from Goldman…

AMZN had a fun afternoon…

 

NVDA faded when Citron’s Andrew Left called the crazy-AI/VR/Chip/All-Things-To-All-People company a “casino stock”

 

Tech tumbled as Energy and Financials surged…

 

Treasury yields rose for the 3rd day in a row – pushing higher on the week, erasing the gains from payrolls…but the tech plunge into the close sent yields back lower…

 

The Dollar Index ended the week unchanged despite chaotic swings in Cable, EUR, and AUD…

 

Cable retraced most of its post-My-Snap-Election gains aftet last night’s disappointment…

 

Bitcoin had another big week (+16.7%) – up 8 weeks in a row – mainly driven by early week gains..

 

WTI/RBOB bounced modestly today ended the week ugly…

 

Silver and Gold were down on the week…

 

There’s this… While we have heard every excuse for why this ratio is not relevant, we can’t help but wonder how this is anything but a caution sign…

 

And finally there’s this…

end

 

Trump accuses Comey of being a “leaker” and a liar and also he claims total and complete vindication

(courtesy zerohedge)

 

Trump Slams “Liar, Leaker” Comey, Claims “Total And Complete Vindication”

After an uncharacteristic two-day social media silence, in which some wondered if White House lawyers had finally taken control of Trump’s iPhone, President Trump broke a nearly two-day silence on Twitter Friday morning to slam James Comey as a “liar” and a “leaker” the day after the fired FBI director’s testimony before Congress.

In the tweet, which may be the first of many, Trump claimed “total and complete vindication” from the Senate Intel Committee hearing, in which Comey likewise accused him of “lies” and requesting the FBI end a criminal investigation.

Donald J. Trump

@realDonaldTrump

Despite so many false statements and lies, total and complete vindication…and WOW, Comey is a leaker!

Despite a brief statement by his private lawyer following Comey’s three hour testimony, Trump had remained silent on Twitter throughout Thursday surprising many, when much of the U.S. was glued to the TV screen, following every word in Comey’s first public comments since the president fired him early last month.

Comey said he believed Trump terminated him over the FBI’s investigation into Russian meddling in the 2016 election, he also revealed that he had authorized a close friend to leak a memo to the NYT. “I didn’t do it myself for a variety of reasons, but I asked him to because I thought that might prompt the appointment of a special counsel,” Comey said. Comey also disclosed that Loretta Lynch had exerted pressure on him during the Hillary Clinton probe.

During the highly charged hearing with the Senate Intelligence Committee, a blunt-talking Comey said that he was “confused” and “concerned” when Trump said in May that he was firing him for undermining the morale of the agency he had led since 2013.

“The administration then chose to defame me, and more importantly, the FBI by saying the organization was in disarray, that it was poorly led, that the workforce had lost confidence in its leader,” Comey said.

We now look forward to Comey’s response, as Trump appears unwilling to let it go.

end

Trump is set to file a complaint against Comey for leaking the memos to the New York Times and CNN

(courtesy zerohedge)

 

Trump’s Lawyer Will File Leak Complaint Against Comey

President Trump’s outside counsel, Marc Kasowitz, will file a leak complaint regarding former FBI Director James Comey’s leaked memos with the Department of Justice, a source close to the outside legal team tells NBC News, NBC reports. Kasowitz is expected to file the complaint with the DOJ’s Inspector General and the Senate Judiciary Committee after Comey testified Thursday that he allowed a personal friend to leak unclassified memos of his conversations with the president to news outlets in hopes it would trigger the appointment of a special counsel.

“I asked a friend of mine to share the content of a memo with the reporter,” Comey said during yesterday’s Senate hearing. “I didn’t do it myself for a variety of reasons, but I asked him to because I thought that might prompt the appointment of a special counsel.”

As was revealed later in the day, Comey’s friend was Columbia Law Professor Dan Richman.

It was not clear if Comey was also the source of numerous other leaks originating at the FBI. Some republicans took issue with the fact that while the FBI had leaked much of the details of the FBI’s ongoing investigation into Russia meddling, nobody had “leaked” that there was no ongoing probe against Trump personally.

In a statement after Comey’s testimony Thursday afternoon, Kasowitz labeled Comey as “one of these leakers” who are “actively attempting to undermine the president” and strongly suggested that federal authorities investigate Comey’s leaks — even though the memo that Comey gave to a friend was not classified and was turned over after he was fired.

On Friday morning, after nearly two days of twitter-silence, Trump lashed out at Comey out as a “leaker.” He also said that he was “vindicated” while accusing Comey of “false statements and lies,” i.e., perjury.

 

Donald J. Trump @realDonaldTrump

Despite so many false statements and lies, total and complete vindication…and WOW, Comey is a leaker!

end

Lawyer Kasowitz produces the May 11 New York Times article which clearly shows that someone leaked the memo prior to Trump’s tweet on the 12 of May

Perjury?…

(courtesy zero hedge)

Trump Lawyer Doubles Down On Comey Perjury Accusation

Yesterday, the Twittersphere lit up when Julie Davis of the New York Times sent out a tweet suggesting that Trump’s personal attorney, Marc Kasowitz, had potentially made a serious blunder in mixing up his timeline of when Comey first leaked details of his meetings with Trump to the Times.  Davis, and most of the media, assumed that Kasowitz was referring to an article published on May 16th by the New York Times entitled “Comey Memo Says Trump Asked Him to End Flynn Investigation.”

Julie Davis @juliehdavis

Kasowitz is mistaken re NYT stories on Comey memos. We never quoted memos prior to Trump’s 5/12 tweet re tapes; 1st story doing so was 5/16

 

Of course, given that Trump’s tweet about the Comey tapes was sent 4 days prior it couldn’t have possibly been triggered the the NYT’s May 16th story….which led Ms. Davis of the Times to publish her ‘gotcha’ tweet.

Donald J. Trump @realDonaldTrump

James Comey better hope that there are no “tapes” of our conversations before he starts leaking to the press!

 

Unfortunately for her, Kasowitz has just released a clarifying statement which points out that he was never referring to the May 16th article in his statement yesterday, but rather an article published on May 11, entitled “In a Private Dinner, Trump Demanded Loyalty. Comey Demurred,” which seems to discuss, in detail, the same facts presented in Comey’s now infamous memos.  Here is the full statement from Kasowitz:

Statement of Marc Kasowitz, Attorney to President Donald J. Trump:

 

Numerous press stories have misreported that our statement yesterday incorrectly claimed that the New York Times was reporting details from Mr Comey’s memos the day before President Trump’s May 12, 2017 Tweet because, according to these reports, the first New York Times story to mention the memos specifically was May 16, 2017, which was after the Tweet.

 

Our statement was accurate and was not referring to the May 16, 2017 story.

 

Rather, Mr. Comey’s written statement, which he testified he prepared from his written memo, describes the details of the January dinner in virtually verbatim language as the New York Times May 11, 2017 story describing the same dinner.

 

That story was the day before President Trump’s Tweet.

 

It is obvious that whomever was the source for the May 11, 2017 New York Times story got that information from the memos or from someone reading or who had read the memos.

 

This makes clear, as our statement said, that Mr Comey incorrectly testified that he never leaked the contents of the memo or details of the dinner before President Trump’s May ’12. 2017 Tweet.

View image on Twitter

Jennifer Jacobs @JenniferJJacobs

Trump lawyer Mark Kasowitz issues new statement, saying statement yesterday “was accurate.”

end

In a press conference Trump hints that he has the Comey tapes and he then tells the press that they are going to be very disappointed..

(courtesy zero hedge)

Trump Hints He Has Comey Tapes, Tells Press: “You’re Going To Be Very Disappointed, Don’t Worry”

Trump just dropped an awful lot of bombs in a very short period of time during a brief press conference with the Romanian President held in the White House Rose Garden.

First, on the issue of the infamous ‘Comey tapes,’ Trump hinted that they do, in fact, exist and he will “tell you about it over a short period of time.”

Reporter: “And you seem to be hinting that there are recordings of those conversations.”

 

Trump:  “I’m not hinting anything.  I’ll tell you about it over a very short period of time….Oh, you’re going to be very disappointed when you hear the answer. Don’t worry.”

 

On whether he would be willing to refute Comey’s testimony under oath, Trump said he would “100 percent” be willing to tell Special Counsel Mueller that he did not ask for Comey’s loyalty or ask for him to drop the Flynn investigation.

Reporter:  “Would you be willing to speak under oath to give your version of events?”

 

Trump:  “100%.  I hardly know the man, I’m not going to say “I want you to pledge allegiance.”  Who would do that?  I mean think of it.  I hardly know the man.  It doesn’t make sense.”

 

And on why Trump felt vindicated by Comey’s testimony:

“No collusion, no obstruction, he’s a leaker…”

end

House Intel Committee Tells Trump To Hand Over Comey Tapes “If They Exist” by Tyler Durden Jun 9, 2017 4:32 PM 27 SHARES

Moments after an exchange between Trump and a reporter during a White House press conference, in which the president refused to publicly state if the “Comey tapes” exist – while insinuating that they do  – and that Trump will reveal an answer shortly…

Reporter: “And you seem to be hinting that there are recordings of those conversations.”

 

Trump:  “I’m not hinting anything.  I’ll tell you about it over a very short period of time….Oh, you’re going to be very disappointed when you hear the answer. Don’t worry.”

… the House Intel Committee formally requested that the White House produce any tapes (or memos) of such a conversation – if they in fact  exist – and that Trump hand them over within two weeks.

House Intel Cmte tells the White House to hand over the tapes by June 23—if they exist. pic.twitter.com/94EetONNqe

— Sahil Kapur (@sahilkapur) June 9, 2017

Full statement from the House Intel Committee:

HPSCI Russia Investigation Notification on Letters to Comey and  White House

 

Washington, DC — Today, Reps. Mike Conaway and Adam Schiff announced that they sent two letters related to the House Permanent Select Committee on Intelligence Russia Investigation.

 

First, the Committee wrote to former Federal Bureau of Investigation Director James Comey to request any notes or memoranda in his possession memorializing  Comey to request any notes or memoranda in his possession memorializing discussions Comey had with President Trump.

 

Second, the Committee wrote a letter to White House Counsel Don McGahn, requesting that he inform the Committee whether any White House recordings or memoranda of Comey’s conversations with President Trump now exist or have in the past. To the extent they exist now, the Committee’s letter asks that copies of such materials be produced to the Committee by June 23.

And so the drama between Trump and Comey, which appeared to be on its way out, just got a fresh lease on life, with Friday, June 23 now set to be the next media frenzy day.

 

 END that did not take long!! The House Intelligence Committee demanded from Trump the tapes, if they exist.. (courtesy zerohedge) House Intel Committee Tells Trump To Hand Over Comey Tapes “If They Exist”

Moments after an exchange between Trump and a reporter during a White House press conference, in which the president refused to publicly state if the “Comey tapes” exist – while insinuating that they do  – and that Trump will reveal an answer shortly…

 

Reporter: “And you seem to be hinting that there are recordings of those conversations.”

 

Trump:  “I’m not hinting anything.  I’ll tell you about it over a very short period of time….Oh, you’re going to be very disappointed when you hear the answer. Don’t worry.”

… the House Intel Committee formally requested that the White House produce any tapes (or memos) of such a conversation – if they in fact  exist – and that Trump hand them over within two weeks.

House Intel Cmte tells the White House to hand over the tapes by June 23—if they exist. pic.twitter.com/94EetONNqe

— Sahil Kapur (@sahilkapur) June 9, 2017

Full statement from the House Intel Committee:

HPSCI Russia Investigation Notification on Letters to Comey and  White House

 

Washington, DC — Today, Reps. Mike Conaway and Adam Schiff announced that they sent two letters related to the House Permanent Select Committee on Intelligence Russia Investigation.

 

First, the Committee wrote to former Federal Bureau of Investigation Director James Comey to request any notes or memoranda in his possession memorializing  Comey to request any notes or memoranda in his possession memorializing discussions Comey had with President Trump.

 

Second, the Committee wrote a letter to White House Counsel Don McGahn, requesting that he inform the Committee whether any White House recordings or memoranda of Comey’s conversations with President Trump now exist or have in the past. To the extent they exist now, the Committee’s letter asks that copies of such materials be produced to the Committee by June 23.

And so the drama between Trump and Comey, which appeared to be on its way out, just got a fresh lease on life, with Friday, June 23 now set to be the next media frenzy day.

Not a good sign for the economy:  credit card defaults surge the most since 2009:

(courtesy zero hedge)

Credit Card Defaults Surge Most Since Financial Crisis

In late April, after some disturbing monthly charge-off reports from major credit card vendors, we reported that according to the latest data from the S&P/Experian Bankcard Default Index, as of March 2017, the default rate on US credit cards had jumped to 3.31%, an increase of 13% from a year ago, and the highest default rate since June 2013.

The troubling deterioration prompted Moody’s to pen its own report yesterday titled “Spike in Charge-off Rates Indicates a Slide in Underwriting Standards” and as Moody’s analyst Warren Kornfelf writes, the steep increase in credit card charge-off rates in 1Q’17 and 4Q’16 was the largest since 2009, and indicates that “strong underwriting standards in place since the financial crisis have deteriorated, potentially rapidly.”

According to Moody’s, the “the size of the jump was surprising in light of the ongoing strength of the US employment market” unless of course the BLS is chronically, for political reasons or otherwise, misreporting the real dynamics in the labor market, or else the even more chronic failure of rale wages to rise means increasingly more Americans can not even make their minimum credit card payments.

First quarter charge-offs were highest for Capital One Financial, First National of Nebraska and Synchrony Financial (unrated), whose portfolios were already the weakest performing. Charge-offs at Capital One, First National of Nebraska and Synchrony rose to 5.31% (up 1.08% year-over-year), 4.21% (up 0.71%) and 5.40% (up 0.56%), respectively.

Capital One especially stood out, as its Q1 charge-offs almost reached their historical average while Discover and First National of Nebraska’s climbed to just over 80% of theirs; Citigroup rose to about 70%.

Another confirmation there is something very wrong with the consumer (or measures of US economic resilience), receivable growth at most issuers has exceeded U.S. nominal GDP, which totaled 3.7% in 2015 and 2.8% in 2016; when credit growth significantly exceeds nominal GDP growth it raises potential red flags such as aggressive underwriting to drive loan growth.

As noted last month, the results of the Fed’s latest survey of US bank senior loan officers showed a weakening in underwriting standards, coupled with plunging demand for credit cards and auto loans.

In Q1 2017, banks reversed the net tightening that they reported in Q4 2016, the first reversal since 2010. Moodys warsn that the steady and modest loosening of standards from 2011 to 2016 reflected an ongoing period of normalization4, but lending standards and the credit quality of new accounts can change quickly. Additionally, the Q1 2017 loosening has only been matched or surpassed in four quarters since 2012 (Q2 2015 and three 2014 quarters). The only positive news from the Q1 2017 survey was that for the first time in at least seven years, two percent of banks reported that they had tightened their credit card standards considerably

If lending standards continue to degrade, things could get messy in a hurry in the event that the economy takes a turn for the worse, according to Warren Kornfeld, a senior vice president at Moody’s.

“Although card standards were extremely tight in the years following the financial crisis, if underwriting then loosened materially, as the rise in charge-offs suggests, asset quality could continue to deteriorate rapidly going forward, especially in the event of a recession,” said Moodys.

* * *

Whatever the reason for the sudden surge in credit card charge-offs, it’s not the only red flag about the state of the US consumer. Recall CoreLogic’s warning from last month, namely that that stalwart of any viable business cycle, mortgage performance, has finally started to deteriorate…

While loan performance improved across various loan types throughout the first five years of the expansion, over the last year three of the four major types of loans began experiencing a deterioration in loan performance. The exception to the deterioration in credit performance was real estate, which continues to improve. However, a closer look reveals performance is deteriorating, albeit from pristine levels of performance.

 

While performance for the 2016 vintage is still very good from relative to the last two decades, it is beginning to worsen. Historically, when the mortgage credit cycle begins to deteriorate it continues to do so until the economy bottoms and the credit cycle begins to improve again.

… and it is becoming clear that the US consumer, responsible for 70% of US economic growth, has finally rolled over.

end

 

A huge drop in auto inventories will cause the revised 2nd quarter GDP to fall further

(courtesy zero hedge)

Q2 GDP To Suffer As Wholesale Inventories Plunge In April

Thanks to a big drop in automotive inventories (and sales) and farm products, April’s final wholesale inventories data tumbled 0.5% MoM. It has not seen a bigger drop since May 2013.

Auto Inventories dropped 1.4% MoM and Farm Products tumbled 2.4% MoM, but Petroleum products 5% drop was the biggest.

This is considerably worse than the preliminary print.

YoY Growth in both Wholesale Inventories and Sales are starting to roll over…

 

All in all, this signals Q2 GDP could be in for a big downside surprise.

end

The list of retails in danger of bankruptcy now climb to 22

(courtesy zero hedge)

“It’s A Perfect Storm”: List Of Retailers In Danger Of Bankruptcy Hits Record 22

The US retail sector continues to sink at an alarming rate, and according to the latest iteration of Moody‘s list of retailers who are in danger of filing for bankruptcy, there are now 22 distressed retailers whose troubled financials the rating agency believes could make them potential bankruptcy candidates in the near future, up substantially from just two months ago, and topping the 19 recorded at the peak of the Great Recession.

According to Moody’s analyst Charles O’Shea, legacy retailers such as Sears, Neiman Marcus and others on the rating agency’s retail distress list, face a “perfect storm” and warned that “you’re on the Andrea Gail right now, and the water’s starting to get very choppy.” The worst could be yet to come as the Moody’s analyst writes that “the ranks of distressed retailers is set to keep growing over the next 12 to 18 months amid a secular shift in the industry.”

Moody’s list consists of all retailers which have ratings of Caa or lower. That number has grown to 22, or approximately 15%, of the firm’s retail and apparel universe. “When you’re down there in C-a land, bankruptcy is a real possibility,” O’Shea said.

“The majority of retailers remain fundamentally healthy,” said O’Shea, “But as select groups of retailers continue to deteriorate — in particular department stores and specialty retailers — we believe the distressed ranks will keep growing, fueled in part by distinct vulnerabilities within the B2/B3 retail population.”

Focusing on those retailers with imminent default risk, Moody’s adds that of 42 B2/B3 rated issuers (as of April 30, 2017), seven face $1.1 billion of maturities for asset-based loans and revolving credit facilities over the next year- elevating the risk of default for already-stressed and distressed issuers should the strong refinancing pace driving recent high-yield issuance recede. Such a risk is underscored by Moody’s US speculative-grade default forecast, which predicts a decline in the overall US speculative-grade default rate to 3% by April 2018 from 4.5% today, even as spec-grade retail and apparel default forecasts trend significantly higher, at 6.7% and 6.8%, respectively.

Some of the highliights from the latest Moody’s report

  • Competitive challenges are intensifying and the credit erosion among more challenged retail sectors and individual retailers is crystallizing rapidly as more issuers file for bankruptcy and miss payments
  • The competitive challenges weighing on earnings performance for bigger retailers like Amazon.com, Walmart Stores, Best Buy and Target will have potentially devastating ripple effects for smaller, more challenged retailers over the next several quarters
  • Common characteristics of retail and apparel companies with lower credit ratings include stressed liquidity, weak quantitative credit profiles, challenged competitive positions, sponsor ownership and erratic management structure
  • Liquidity is typically the driving force in the assessment of credit risk, and a key determinant in any drop into Caa/Ca territory. “Risk becomes more acute when a company is facing a meaningful debt maturity.”

Some names that figured previously on Moody’s list have already filed for Chapter 11 protoection: among them discount footwear company Payless ShoeSource and Rue21, a teen fashion retailer, both filed for bankruptcy recently, while Gymboree, a specialty seller of children’s apparel, missed its June 1 interest payment and is expected to announce its bankruptcy filing shortly.

While landing on the distressed list of “super fallen angels” is not a death sentence, recently JC Penney managed to crawl out of it, the probability that a company will end up in bankruptcy rather than get its financial in orders is orders of magnitude greater.  “There are companies that come out of that,” said O’Shea, who noted that iconic retailer J.C. Penney “was down there, and is now out,” with an improved rating.

Doing the math here, with one company “out” and everyone else eventually filing, restructuring lawyers are finally going to be busy after a nearly decade-long hiatus.

Below is the full list of deeply distressed retailers:

  • Boardriders SA  – sporting subsidiary of Quiksilver
  • The Bon-Ton Stores – parent of department store chain
  • Fairway Group Holdings – food retailer
  • Tops Holding II – supermarket operator
  • 99 Cents Only Stores – discount retailer
  • TOMS Shoes – footwear company
  • David’s Bridal – wedding dresses and formalwear seller
  • Evergreen AcqCo 1 LP – parent of thrift chain Savers
  • Charming Charlie – women’s jewelry and accessories
  • Vince LLC – clothing retailer
  • Calceus Acquisition – owner of Cole Haan footwear firm
  • Charlotte Russe – women’s clothing
  • Neiman Marcus Group – luxury department store
  • Sears Holdings – owner of Sears and Kmart.
  • Indra Holdings – holding company owner of Totes Isotoner
  • Velocity Pooling Vehicle – does business as MAG, Motorsport Aftermarket Group
  • Chinos Intermediate Holdings – parent of J. Crew Group
  • Everest Holdings – manages Eddie Bauer brand
  • Nine West Holdings – clothing, shoes and accessories
  • Claire’s Stores – accessories and jewelry
  • True Religion Apparel – men’s and women’s clothing
  • Gymboree – children’s apparel (bankrupt: Harvey)

end

 

end

 

David Stockman on the Comey affair:

 

BY DAVID STOCKMAN
POSTED
JUNE 8, 2017

J.Edgar Comey’s Big Fat Nothingburger

 

Comey’s ballyhooed testimony contained nothing not already known. It had nothing remotely about obstruction of justice and nothing that matters at all. It’s just a replay of what Comey has been leaking all along.

Indeed, it’s the Nothingburger that proves Imperial Washington has become completely unhinged in its groundless RussiaGate hysteria. Washington is stumbling toward a lawless defenestration of a sitting president in the name of a hypocritical obeisance to a tortured version of “the law”.

It is a smoking gun in only one sense: It proves why Comey should have been fired on day one and why the Wall Street assumption that it can count on “Washington governance as usual” is so dangerously misguided.

The point is very simple. What we have is an entirely unstable, unsustainable hothouse economy and financial system. The giant bubble that was reflated after the 2008 crisis will soon violently implode and take the economy down with itunless it is again bailed-out by extraordinary Washington action.

But this time there is no one home on either end of Pennsylvania Avenue and no beltway bailout brigade at the ready. Today’s Senate show trial proves that the Imperial City is descending irretrievably into unprecedented dysfunction and political fratricide. The very fact of today’s farce is reason itself to run, not walk, from the feckless insouciance of the casino.

But to get this all in context, let’s start with the Senate Intelligence Committee hearing itself and its sad chairman, Senator Richard Burr of North Carolina. When it comes to treacherous betrayal, we’d just as soon go with Aaron (Burr).

The Senator knows full well that there is nothing to the Russian meddling story because if there was any kind of documented proof it would have leaked long ago. But he is a deck-hand of the national security apparatus and is willingly conducting today’s installment of the Imperial City’s anti-Russian witch hunt.

The substance of RussiaGate is simply the evidence-free assessments, judgments, surmises, and inferences of Deep State operatives dead set against Donald Trump from the very beginning.

That brings us to J. Edgar Comey. From the very beginning with his backhanded acquittal of Hillary last July, he has conducted himself as FBI Dictator, not director.

As the Wall Street Journal editorial page noted about Comey’s repeated whinny invocations of the FBI’s “traditionally independent status in the executive branch,”

Independent? This is a false and dangerous view of law enforcement in the American system.

Mr. Comey is describing an FBI director who essentially answers to no one. But the police powers of the government are awesome and often abused, and the only way to prevent or correct abuses is to report to elected officials who are accountable to voters. A director must resist intervention to obstruct an investigation, but he and the agency must be politically accountable or risk becoming the FBI of J. Edgar Hoover.

This whole “independence” is a smokescreen for relentless self-aggrandizement. That was evident in Comey’s statement about his first encounter with the President-elect on January 6th at Trump Tower with respect to the Christopher Steele “dossier”.

There was absolutely no reason of state for that presentation except to conduct a devious exercise in political intimidation. It was not even remotely a valid or necessary heads-up about a national security matter to the incoming occupant of the Oval Office.

He knew that the “salacious and unverified” document, as he described it, was not in any way, shape or form a national security document or product of an FBI investigation. To the contrary, it was a raw political attack.

So the January 6th briefing amounted to a deliberate hazing of the man who had been elected President. It had nothing to do with counter-intelligence or any other public purpose. Instead, it was a message from the permanent beltway government that “we rule, not you”.

As Alan Dershowitz so brilliantly and cogently schooled Anderson Cooper last night, the head of the FBI may have a 10-year term, but he serves at the pleasure of the president, and can be fired by the latter at will. The president also has the absolute and unequivocal power to tell the Attorney General and the head of the FBI — in the same room or separately — what to investigate and not to.

Furthermore, as Dershowitz made crystal clear, he could’ve told Comey that General Flynn had just been pardoned, and that the investigation should be dropped immediately. All of that would have been perfectly legal and constitutional.

The proposition that the Attorney General and FBI director operate in some insulated and antiseptic sphere above the president’s authority as head of the executive branch has been an entirely self-serving invention of the Deep State in the years since Watergate.

But that’s mere custom and practice, not law. It’s the outcome of a rolling putsch under which the permanent government, and the Washington-based apparatchiks and K-Street racketeers who feed off it, have gradually usurped control of American democracy.

In that respect, the three most powerful and destructive institutions within the beltway are the Federal Reserve, the $75 billion Intelligence Community and the Pentagon’s permanent military and civilian bureaucracy. All of them, like Comey, drape themselves in the cover of public spirited “independence” in order to exercise power unimpeded by the masses and their elected representatives.

The Congressional intelligence committee and the likes of Senators Burr and Warner are simply their subservient handmaids. In that role they have enabled the Comey’s and Brennan’s of the world to not only rule the roost, but to feign deep offense and invoke self-created “protocol” if and when they are challenged by elected officeholders.

The fact that this has all been invented during the last few decades is evident on every page of America’s recent and distant history book.

J. Edgar Hoover, for example, had amassed the same “independence” that Comey and his fawning MSM commentariat now claim. But Hoover was a menace to liberty and his arbitrary campaigns against citizens like Martin Luther King were a blight on the institutions of American democracy.

Is the garbage in the Steele dossier any different than Hoover’s tawdry collection of blackmail?

Likewise, was JFK brought under a cloud of suspicion for undermining the sacred independence of the Justice Department when he made his brother Attorney General?

What about when Nixon appointed his law partner to the job? Or when Ronald Reagan appointed as Attorney General a nice man, William French Smith, who was the husband of Nancy’s shopping companion?

As the Wall Street Journal also correctly observed, the “remarkable presumptuousness of the Comey mindset” and the false claim of high-minded independence behind it was evident during the campaign.

When it served his craving for the limelight, Comey broke the purportedly sacred DOJ “protocol.” He absolved Hillary Clinton’s mishandling of classified material without the involvement of Justice prosecutors or even telling then Attorney General Loretta Lynch.

Mr. Comey’s disregard for the chain of legal command is why Mr. Trump was right to fire him, whatever his reasons.

The January 6th presentation of the Steele “dossier” to Trump was an outright act of Hoover-style blackmail by the FBI director. It was a ringing statement that the phony “Russian meddling” narrative would be used against the White House whenever it suited the purposes of Comey and the Deep State he represented.

And that gets us to the heart of Comey’s big fat Nothingburger. As repeatedly insisted, General Mike Flynn was a fairly dangerous hawk, nut-job and Islamophobe who should never have been made director of the national security council. But in trying to open a back channel to the Kremlin through Ambassador Kislyak at the end of December, he did absolutely nothing wrong.

The move was small potatoes compared to Kissinger’s use of a KBG agent as a back channel during the December 1968 transition. It can’t hold a candle to the blatant Logan-act violation of Ronald Reagan’s team when they promised the Iranians a more attractive deal if they released the hostages on inauguration day (which they did), rather than before the election (which was Jimmy Carter’s planned “October Surprise”).

When Flynn was fired on February 13, Trump praised him offered no plausible reason for his dismissal because there wasn’t one. The Donald and his team had simply panicked in the face of the RussiaGate hysteria generated by the Deep State and propagated by mainstream media.

The bottom line was simple. The Donald had a guilty conscience for firing someone who had supported him during the campaign when the entire neocon establishment was abusing him.

Accordingly, the Donald made the plaintive request to the FBI director, who serves at his pleasure, to go easy on the blameless, short-lived director of the national security council.

The President then returned to the topic of Mike Flynn, saying, “He is a good guy and has been through a lot.” He repeated that Flynn hadn’t done anything wrong on his calls with the Russians, but had misled the Vice President.

He then said, “I hope you can see your way clear to letting this go, to letting Flynn go. He is a good guy. I hope you can let this go.” I replied only that “he is a good guy.” . . . I had understood the President to be requesting that we drop any investigation of Flynn in connection with false statements about his conversations with the Russian ambassador in December.

This is obstruction of justice?

No, it’s an Imperial City that has become unhinged.

And if you are not yet convinced, just consider the piece of evidence from two months ago when the now-French leader, Macron’s campaign was allegedly hacked by the Russians. His populist opponent, Marine Le Pen, had also said it was time to have a rapprochement with Putin.

Right on schedule, here was the election-eve story from the NYT under the ominous title: “Russian Hackers Who Targeted Clinton Appear to Attack France’s Macron“:

The campaign of the French presidential candidate Emmanuel Macron has been targeted by what appear to be the same Russian operatives responsible for hacks of Democratic campaign officials before last year’s American presidential election, a cybersecurity firm warns in a new report.

The report has heightened concerns that Russia may turn its playbook on France in an effort to harm Mr. Macron’s candidacy and bolster that of Mr. Macron’s rival, the National Front leader Marine Le Pen, in the final weeks of the French presidential campaign.

Actually, the whole story was a  crock. Here’s the truth of the matter from the head of France’s own cybersecurity agency:

The head of the French government’s cyber security agency, which investigated leaks from President Emmanuel Macron’s election campaign, says they found no trace of a notorious Russian hacking group behind the attack.

In an interview in his office Thursday with The Associated Press, Guillaume Poupard said the Macron campaign hack “was so generic and simple that it could have been practically anyone.”

He said they found no trace that the Russian hacking group known as APT28, blamed for other attacks including on the U.S. presidential campaign, was responsible.

As I’ve said before, buckle up. There is one bumpy ride ahead.

Ed. Note: For more from David Stockman, Reagan’s former budget director, get your copy of his FREE book TRUMPED!

Regards,

David Stockman
for The Daily Reckoning

end

 

Again Alan Dershowitz states that there is no obstruction case and was glad when Comey stated that yes, the President can say who will be prosecuted and who will not be prosecuted.

(courtesy the Fly)

Alan Dershowitz Says Comey Was a ‘Coward’ For Leaking to Press; Says Obstruction Case Non-Existent Against the President by The_Real_Fly Jun 9, 2017 3:19 PM 1 SHARES

Content originally published at iBankCoin.com

Get in here shills. It’s time for your daily lesson on the sacred documents of the U.S. Constitution. Following up on his emphatic belief that the President can, essentially, do whatever the hell he wants with the FBI head — the famed Harvard Law professor called the former director a ‘coward’ for leaking his notes to the press, saying “I thought it shows a lot of cowardice. The head of the FBI (audible laughter), the guy is supposed to be a strong and powerful guy and he’s afraid of a couple seagulls (referring to Comey’s depiction of the press outside his home to seagulls).”

He added, “He should have had the courage to get on television and release the memos and talk about it or not talk about it. But to have some friend become his surrogate was absurd.”

Dershowitz then reiterated his thoughts about the non-existent obstruction case against the President.

“We should just stop talking about obstruction of justice, there’s no plausible case there.”

You know things are bad when the head of the FBI is called a coward by Alan Dershowitz — for fucks sake.

end

Let’s wrap up the week with this offering from Greg Hunter talking about the Comey affair

(courtesy Greg Hunter/USAWatchdog)

Comey the Leaker, Trump the Winner, Debt and Stock Market at All-Time High

By Greg Hunter On June 9, 2017 In Weekly News Wrap-Ups

Fired FBI Director James Comey made a stunning revelation this week in Congressional Hearings about the so-called Russian collusion investigation. Comey outed himself as a leaker of privileged information when he released a personal memo to the New York Times that implied Trump tried to interfere with the investigation into alleged Russian ties to the Trump campaign. Comey admitted to leaking the memo in order to force a Special Prosecutor to be appointed. Did Comey break the law? Donald Trump’s lawyer, Marc Kasowitz, was featured in a headline that said, “President Trump’s Lawyer: ‘Leaker’ Comey ‘Retaliatory’ in ‘Unauthorized Disclosures’ to Press of ‘Privileged Communications with the President.’ ” Also, as part of a very bad week for Comey, he is facing a new lawsuit that claims “FBI Illegally Spied on Government & Trump.”

Meanwhile, Comey claims he was fired because of the Russia investigation, but Comey repeatedly said that Trump was not the target of the investigation. Comey also repeatedly said that Trump did not obstruct the investigation. You can’t have it both ways. Comey can’t testify that there was no obstruction, and then leak information to get a Special Prosecutor appointed to look into obstruction. Now, even the mainstream “Destroy Trump” media is backing off. Chris Matthews says the so-called Russian/Trump collusion story “came apart” with the James Comey testimony. Comey should hire a criminal defense lawyer.

We have a record stock market once again at the same time the world has record debt. Most of the debt is simply unpayable. Maybe this is the reason why multi-billion dollar money manager Paul Singer is “very concerned.” Singer said on Bloomberg this week, “What we have today is a global financial system that’s just about as leveraged, and in many cases more leveraged, than before 2008.” You might remember that 2008 was the last time the financial markets had a major meltdown that required the Fed and every central bank in the world to come to the rescue with trillions of dollars in bailout money. What could go wrong?

Join Greg Hunter of USAWatchdog.com as he talks about these stories and more in the Weekly News Wrap-Up.

Video Link

http://usawatchdog.com/comey-the-leaker- trump-the-winner-debt-and-stock-market-at-all-time-high/

END

 

We will see you Monday night

Harvey.


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