March 3/Greece robs pension accounts to pay the IMF/Israeli Prime Minister addresses congress/USA has plans to retake the Iraqi city of Tikrit/Ukraine raises interest rates to 30% to stem the fall in the hryvnia/The City of Chicago credit rating is lowered to a step above junk/

 

Good evening Ladies and Gentlemen:

Here are the following closes for gold and silver today:

Gold: $1204.00 down $3.70   (comex closing time)
Silver: $16.26 down 15  cents  (comex closing time)

 

 

In the access market 5:15 pm

 

 

Gold $1203.70
silver $16.28

 

Today, in Greece as we warned your yesterday, the government is seizing the pension accounts in order to pay the IMF bill.  I believe that they learned those skills from the Americans.

The Russians are threatening NATO not to arm the Ukrainians in their battle with the rebels.  If they do, then Russia will intercede.

Today the Ukraine raised interest rates to 30% in order to stem the fall in the value of the hyrvnia.

The Israeli Prime Minister arrived in Washington to speak to congress on the threat of Iran. While this was going on, the USA was having discussions with the Iranians on their nuclear ambitions. They were also preparing to retake the Iraqi city of Tikrit from ISIS.

 

We have these and many other stories to bring your way.

However first..your data from gold and silver trading together with data from the comex…

 

 

 

 

 

Gold/silver trading:  see kitco charts on right side of the commentary.

 

 

Following is a brief outline on gold and silver comex figures for today:

 

 

The gold comex today had a poor delivery day, registering 1 notices served for 100 oz.  Silver comex registered 200 notices for 1,000,000 oz .

 

Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 260.08 tonnes for a loss of 43 tonnes over that period.

 

In silver, the open interest rose by 2348 contracts even though Monday’s silver price was down by 11 cents. The total silver OI continues still remains relatively high with today’s reading at 162,740 contracts. The front month of March contracted by 156 contracts.

We had  200 notices served upon for 1,000,000 oz.

 

In gold we had a good rise in OI as gold was up by $4.90 yesterday. The total comex gold OI rests tonight at 405,027 for a gain of 3,338 contracts. Today, surprisingly we again had only 1 notice served upon for 100 oz.

 

 

 

Today,  we had another huge withdrawal of 2.69 tonnes of gold inventory at the GLD/Inventory now at 760.80  tonnes

 

 

In silver, /SLV  we had a small deposit of 328,000 oz of silver into  the SLV/Inventory 326.118 million oz

 

 

We have a few important stories to bring to your attention today…

Let’s head immediately to see the major data points for today

 

 

Let us now head over to the comex and assess trading over there today.

Here are today’s comex results:

 

 

The total gold comex open interest rose by 3,338 contracts today from  401,689 up to 405,027 as gold was up by $4.90 yesterday (at the comex close). We are now in the contract month of March which saw it’s OI fall by 39 contracts down to 163. We had 0 notices filed on yesterday so we lost 39 contracts or an additional 3900 oz will not stand for delivery in March. The next big active delivery month is April and here the OI rose by 1,143 contracts up to 260,824. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 92,563. The confirmed volume yesterday ( which includes the volume during regular business hours  + access market sales the previous day) was poor at 147,377 contracts even  with mucho help from the HFT boys. Today we had 1 notices filed for 100 oz.

And now for the wild silver comex results.  Silver OI rose by 2348 contracts from 160,392 up to 162,740 with silver down by11 cents with respect to Monday’s trading. We are now in the active contract month of March and here the OI fell by 156 contracts down to 1,383. We had 141 contracts served yesterday. Thus we lost 15 contracts or 75,000 oz will not stand.  The estimated volume today was poor at 24,701 contracts  (just comex sales during regular business hours. The confirmed volume yesterday was fair (regular plus access market) at 30,,152 contracts. We had 200 notices filed for 1,000,000 oz today.

March initial standings

 

March 3.2015

Gold

Ounces

Withdrawals from Dealers Inventory in oz 102.71  oz (Scotia)
Withdrawals from Customer Inventory in oz   128.60  4 kilobars (Manfra)
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz 64,300.000 (Scotia)2,000 kilobars
No of oz served (contracts) today 1 contracts (100 oz)
No of oz to be served (notices)  162 contracts (16,200 oz)
Total monthly oz gold served (contracts) so far this month 1 contracts(100 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month

Total accumulative withdrawal of gold from the Customer inventory this month

 16,590.00 oz

Today, we had 1 dealer transactions

we had 1 dealer withdrawal:

 

i) Out of Scotia: 102.71 oz

total dealer withdrawal: 102.71 oz

 

 

we had 0 dealer deposits:

 

 

 

we had 1 customer withdrawals

i) Out of Manfra:  4 kilobar or 128.60 oz

 

 

total customer withdrawal: 128.60 oz

 

 

we had 1 customer deposit: (and the farce continues)

 

i) Into Scotia: 64,300.000 oz  (2,000 kilobars)

total customer deposits;  64,300.000  oz

 

We had 0 adjustment

 

 

 

 

 

Today, 0 notices was 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 1 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account.

To calculate the total number of gold ounces standing for the March contract month, we take the total number of notices filed so far for the month (1) x 100 oz  or  100 oz , to which we add the difference between the open interest for the front month of March (163) and the number of notices served upon today (1) x 100 oz equals the number of ounces standing.

 

Thus the initial standings for gold for the March contract month:

 

No of notices served so far (1) x 100 oz  or ounces + {OI for the front month (163) – the number of  notices served upon today (1) x 100 oz} =  16,200 oz or .5038 tonnes

 

we lost 3900 oz of gold that will not stand in this March contract month.

 

 

Total dealer inventory: 814,793,315 oz or 25.34 tonnes

Total gold inventory (dealer and customer) = 8.385 million oz. (260.08) tonnes)

 

Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 43 tonnes have been net transferred out. However I believe that the gold that enters the gold comex is not real.  I cannot see continual additions of strictly kilobars.

 

 

end

 

 

 

And now for silver

 

March silver initial standings

March 3 2015:

Silver

Ounces

Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory 31,129.15 oz (Brinks, HSBC)
Deposits to the Dealer Inventory  38,145.200 oz CNT
Deposits to the Customer Inventory 622,157.530  oz (Brinks)
No of oz served (contracts) 200 contracts  (1,000,000 oz)
No of oz to be served (notices) 1183 contracts (5,915,000)
Total monthly oz silver served (contracts) 1593 contracts (7,965,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal  of silver from the Customer inventory this month  313,628.9 oz

Today, we had 1 deposit into the dealer account:

 

i) Into CNT: 38,145.200 oz

total dealer deposit: 38,145.200   oz

 

we had 0 dealer withdrawal:

total dealer withdrawal: nil oz

 

We had 1 customer deposit:

 

i) Into Brinks: 622,158.530 oz

 

total customer deposit: 622,157.530 oz

 

We had 2 customer withdrawals:

 

i) Out of Brinks;  30,015.65 oz

ii) Out of HSBC: 1,113.50 oz

 

 

total customer withdrawal: 31,129.15  oz

 

we had 0 adjustment

 

 

Total dealer inventory: 68.850 million oz

Total of all silver inventory (dealer and customer) 177.79 million oz

.

The total number of notices filed today is represented by 200 contracts for 1,000,000 oz. To calculate the number of silver ounces that will stand for delivery in March, we take the total number of notices filed for the month so far at (1593) x 5,000 oz    = 7,965,000 oz to which we add the difference between the open interest for the front month of March (1383) and the number of notices served upon today (200) x 5000 oz  equals the number of ounces standing.

 

Thus the initial standings for silver for the March contract month:

1593 (notices served so far) + { OI for front month of March (1383) -number of notices served upon today (200} x 5000 oz =  13,880,000 oz standing for the March contract month.

 

we lost 3 contracts or 1,755,000 oz will not stand for delivery in March.

 

 

for those wishing to see the rest of data today see:

http://www.harveyorgan.wordpress.com orhttp://www.harveyorganblog.com

 

end

 

 

The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.

There is now evidence that the GLD and SLV are paper settling on the comex.

***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:

i) demand from paper gold shareholders

ii) demand from the bankers who then redeem for gold to send this gold onto China

vs no sellers of GLD paper.

 

 

 

And now the Gold inventory at the GLD:

 

March 3 we had another 2.69 tonnes of gold withdrawn from the GLD. Inventory is now 760.80 tonnes.

 

March 2  we had 7.76 tonnes of withdrawal from the GLD today and this physical gold landed in Shanghai/Inventory 763.49 tonnes

 

feb 27.2015 no change in gold inventory at the GLD/Inventory at 771.25 tonnes

 

 

Feb 26. no change in gold inventory at the GLD/Inventory at 771.25 tonnes

Feb 25. no change in gold inventory at the GLD/Inventory at 771.25 tonnes

 

Feb 24.2015: no change in gold inventory at the GLD/Inventory at 771.25 tonnes

 

Feb 23.2015: no change in gold inventory at the GLD/Inventory at 771.25 tonnes

 

 

Feb 20/we had another good addition of 1.79 tonnes of gold into the GLD.  Inventory 771.25 tonnes

 

Feb 19/ a huge addition of 1.5 tonnes of gold into the GLD/Inventory 769.46

 

Feb 18/ a small withdrawal of .3 tonnes/no doubt to pay for fees/Inventory 767.96 tonnes

 

Feb 17/no changes in gold inventory at the GLD/Inventory 768.26 tonnes

 

 

 

 

 

 

March 3/2015 / we had another huge withdrawal of 2.69 tonnes of gold inventory at the GLD/ no doubt we had physical gold leaves London’s shores and head over to Shanghai.

inventory: 760.80 tonnes.

The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).

GLD : 760.80 tonnes.

 

 

end

 

 

And now for silver (SLV):

 

March 3 a small deposit of 328,000 oz of silver into the SLV/Inventory at 726.118 million oz.

 

March 2/ no change in silver inventory tonight; 725.734 million oz

 

 

Feb 27.2015 no change in silver inventory tonight: 725.734 million oz

 

 

Feb 26. no change in silver inventory at the SLV/Inventory at 725.734 million oz

 

 

Feb 25. no changes in silver inventory/SLV inventory at 725.734 million oz

Feb 24.we had an addition of 1.435 million oz of silver to the SLV/SLV inventory at 725.734 million oz

 

Feb 23 no change in silver inventory/324.299 million oz

Feb 20 no change in silver inventory/324.299 million oz

 

Fen 19/ we had a huge addition of 4.082 million oz of silver into the SLV/Inventory 324.299 million oz

 

 

Feb 18.2015/ no change in silver inventory at the SLV/Inventory at 320.327 million oz

 

Feb 17 no changes in silver inventory at the SLV/Inventory at 320.327 million oz

 

 

 

 

March 3/2015   a small addition of 328,000 oz of silver into the SLV/SLV inventory registers: 326.118 million oz

 

 

 

 

 

end

 

 

And now for our premiums to NAV for the funds I follow:

Note: Sprott silver fund now for the first time into the negative to NAV

Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)

 

 

1. Central Fund of Canada: traded at Negative  7.6% percent to NAV in usa funds and Negative 7.4% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 61.7%

Percentage of fund in silver:37.9%

cash .4%

 

( March 3/2015)

 

Sprott gold fund finally rising in NAV

 

Sprott NAV not available at press time/I will adjust later tonight.

 

2. Sprott silver fund (PSLV): Premium to NAV falls to + 3.03%!!!!! NAV (March 3/2015)

3. Sprott gold fund (PHYS): premium to NAV rises to +.35% to NAV(March 3  /2015)

Note: Sprott silver trust back  into positive territory at +3.03%.

Sprott physical gold trust is back into positive territory at +.35%

Central fund of Canada’s is still in jail.

 

 

 

 

And now for the important paper stories for today:

 

 

Early Tuesday morning trading from Europe/Asia

 

 

1. Stocks mostly lower on major Asian bourses  / the  yen rises  to 119.85

1b Chinese yuan vs USA dollar/ yuan weakens  to 6.2740
2 Nikkei down 11.72 or 0.06%

3. Europe stocks mostly lower  // USA dollar index down to 95.55/

3b Japan 10 year yield huge rises to .38%/ (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.85/everybody watching the huge support levels of 117.20 and that level acting as a catapult for the markets.

3c Nikkei still  above 17,000/

3e The USA/Yen rate still  below the 120 barrier this morning/
3fOil: WTI 50.35 Brent: 60.98 /all eyes are focusing on oil prices. This should cause major defaults as derivatives blow up.

3g/ Gold up /yen up;

3h/ Japan is to buy the equivalent of 108 billion usa dollars worth of bonds per MONTH or $1.3 trillion

Japan’s GDP equals 5 trillion usa/thus bond purchases of 26% of GDP

3i 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 (see Von Greyerz)

3j Oil up this morning for  WTI  and Brent

3k  The Central Bank of Australia keeps rates unchanged/notes that China  (the main engine of growth for Australia) is slowing down

 

3l  Greek 10 year bond yield :9.77% (up 25 basis points in yield)

3m Gold at $1209.70 dollars/ Silver: $16.51

3n USA vs Russian rouble:  ( Russian rouble  par per rouble / dollar in value)  62.18!!!!!!.

3 0  oil  into the 50 dollar handle for WTI and 61 handle for Brent

3p  Japan may stop easing as real wage rates seem to be rising

3Q  SNB (Swiss National Bank) still intervening again driving down the SF/window dressing/Swiss rumours of intervention to keep the  soft peg at 1.05 Swiss Francs/euro and major support for the Euro.

3r  USA justice department investigating 10 major USA banks in the manipulation of gold and silver pricing

3s European QE may have blown a 92 billion euro hole in defined pension plans throughout Europe

3t  there is now talk on a 30 to 50 billion euro 3rd bailout for Greece

4. USA 10 yr treasury bond at 2.10% early this morning. Thirty year rate well below 3%  (2.70%!!!!)/yield curve flattens/foreshadowing recession
5. Details: Ransquawk, Bloomberg/Deutsche bank Jim Reid

 

Market Wrap: Futures Decline; Treasurys Weak On Actavis Mega-Deal, Dollar At 12 Year High

 

With little newsflow out of Europe, and just as little on deck out of the US (just NY ISM and auto sales later today), the main overnight events were out of Asia where first the RBA decided to leave rates unchanged (despite the majority calling for a rate cut) when as Bloomberg’s Richard Breslow noted, in the RBA communique the central bank “changed their reference to China from “China’s growth was in line with expectations” to “China’s growth will slow a little from last year’s outcome.” Whatever may be happening with China, one thing is clear – either the RBA announcement was leaked a minute early, or HFT algos took a huge gamble and soared higher up to a minute earlier (more shortly).

Speaking of China, the rate-cut euphoria lasted just one day, and after a feeble 0.8% bounce on Monday, the SHCOMP was down 2.2% this morning over fears the PBOC is doing too little, too late to halt what is now perceived by many as a massive “tightening” capital flight out of China. Finally, Japan made the newsflow, after it JGBs continued to slide following a weak auction, fears that the BOJ is done easing after Abe advisor Etsuro Honda warned against overheating, and after the biggest jump in base pay in over a decade led some to think the BOJ may soon have to halt easing altogether, especially if real wages proceed to rise.

Another notable development is the ongoing weakness in US rates even as the ECB-buying backstop has made selling of rates in Europe virtually illegal. The weakness in the US 10Y however can be almost entirely attributed to the “mammoth” Actavis-Allergan issue, which is now said to be more than 4x oversubscribed, with nearly $90 billion in orders for just over $20 billion in paper. The result is weakness for matched Treasurys due to rate locks: as InTouch David Fuller’s writes watch for “late rate lock unwinds into/out of pricing” though it depends on how big rate lock was Feb. 26 and “whether end-users buy it outright or vs USTs.” Once this latest mega issue is absorbed expect the convergence trade to resume.

Wrapping up the key moves, the dollar index rose modestly to 95.53 this morning, hitting the highest since 2003, as further easing pressure builds on banks around the world as the US marches along to what is seen by many as a de minimus rate hike come hell, high water, or any economic data whatsoever.

European equities currently reside in modest positive territory in what has been yet another session so far which has been relatively void of pertinent newsflow from the Eurozone. On a sector specific basis, financial names have been placed under some minor pressure in the wake of Barclay’s (-2.8%) pre-market report whereby the Co. increased their provisions for the FX probe by GBP 500mln and said they could not be certain over whether they would need to set aside further provisions. From a fixed income perspective, Bunds initially saw a subdued first half of the session in tandem with the rangebound performance seen across European equities with participants still monitoring the ongoing negotiations between Greece and their Eurozone counterparts with European Commission President Juncker suggesting that a third bailout for Greece has not been discussed. Heading into the North American crossover, Bunds and USTs saw a modest downtick with volumes in the Bund rolling from the March contract to June, while Finland has also opened books on its EUR 3bln 2031 offering. Additionally, Actavis’ mammoth nine-part offering is expected to be priced today, with the size of the issuance expected to be in excess of USD 22bln. Note, this placed downward pressure on USTs heading into the close yesterday.

In FX markets, AUD has managed to hold onto its gains seen overnight after the RBA unexpectedly left its Cash Rate Target steady at 2.25%. Nonetheless, the central bank also signalled further easing by saying it may be appropriate over the period ahead, which capped further AUD gains. Elsewhere, USD-index has recovered off its worst levels amid no fundamental news, although USD/JPY remains in negative territory following comments from Japanese PM Advisor Honda who also said current USD/JPY levels are a kind of an upper limit in the exchange rate’s comfort zone. GBP was granted a brief spell of reprieve following the latest UK construction PMI reading which exceeded expectations (60.1 vs. Exp. 59.1), however, GBP remains relatively unchanged against the Greenback.

In the commodity complex, spot gold resides in modest positive territory, reversing some of the losses seen during yesterday’s session alongside the strength in US equities. Elsewhere, Copper prices pulled further back from their 7-week highs as Chinese risk sentiment was dampened on IPO concerns after China’s securities regulator approved 24 IPO’s which could lock up a record value of CNY 3trl. In energy markets, both Brent and WTI crude futures trade in the green ahead of the after-market API inventory release with energy newsflow overall relatively light.

In summary: European shares remain higher, though off intraday highs, with the food & beverage and personal & household sectors outperforming and financial services, banks underperforming. RBA leaves rates unchanged, Australian dollar rises. Swiss economy grew faster than forecast before franc cap removal. The French and Italian markets are the best-performing larger bourses, Swedish the worst. The euro is weaker against the dollar. Japanese 10yr bond yields rise; French yields increase. Commodities gain, with natural gas, copper underperforming and Brent crude outperforming. U.S. ISM New York, vehicle sales, IBD/TIPP economic optimism,  due later.

Market Wrap

  • S&P 500 futures down 0.1% to 2112.5
  • Stoxx 600 up 0.2% to 392.2
  • US 10Yr yield up 2bps to 2.1%
  • German 10Yr yield up 1bps to 0.37%
  • MSCI Asia Pacific up 0.1% to 146.3
  • Gold spot up 0.1% to $1208.2/oz
  • 56% of Stoxx 600 members gain, 42% decline
  • Eurostoxx 50 +0.2%, FTSE 100 +0.1%, CAC 40 +0.3%, DAX +0.2%, IBEX -0.1%, FTSEMIB +0.2%, SMI -0.1%
  • Asian stocks little changed with the Sensex outperforming and the Shanghai Composite underperforming.
  • MSCI Asia Pacific up 0.1% to 146.3
  • Nikkei 225 down 0.1%, Hang Seng down 0.7%, Kospi up 0.2%, Shanghai Composite down 2.2%, ASX down 0.4%, Sensex up 0.5%
  • Euro down 0.13% to $1.117
  • Dollar Index up 0.03% to 95.49
  • Italian 10Yr yield up 0bps to 1.35%
  • Spanish 10Yr yield down 0bps to 1.35%
  • French 10Yr yield up 2bps to 0.66%
  • S&P GSCI Index up 0.8% to 416.4
  • Brent Futures up 2.1% to $60.8/bbl, WTI Futures up 1.5% to $50.3/bbl
  • LME 3m Copper down 0.9% to $5850/MT
  • LME 3m Nickel down 0.8% to $13740/MT
  • Wheat futures up 0.3% to 501.3 USd/bu

Bulletin Headline Summary From RanSquawk and Bloomberg

  • European newsflow is relatively quiet so far with participants now awaiting the US’ arrival to the market
  • AUD manages to hold onto its overnight gains after the RBA refrained from cutting rates, although warned that further easing may be appropriate over the period ahead
  • Looking ahead, today sees the release of Canadian GDP at 1330GMT/0730CST
  • Treasuries extend yesterday’s decline before Actavis prices 9-part deal that could be second-largest on record; market focus also on Friday’s payrolls and average hour earnings data.
  • Order book for Actavis deal said to be around $90b; pricing expected today
  • Global banks are EU305b ($341b) short of a target for easy-to-sell assets intended to prevent another financial crisis, according to the latest data from the Basel Committee on Banking Supervision; LCR takes full effect in 2019
  • Draghi will have an opportunity at ECB meeting Thursday to add to details of the EU1.1t QE plan announced in January; will also unveil the ECB’s first growth and inflation forecasts for 2017, numbers that will have significance for program’s duration
  • ECB’s QE plan might have already blown a EU92b hole in defined-benefit pension plans by depressing bond yields, S&P said Feb. 26; if the actual start of QE  pushes yields further, for longer, companies may have to take drastic measures to make ends meet, and could face a hit to their credit ratings
  • Reserve Bank of Australia said further interest-rate cuts could be needed to bolster growth after it unexpectedly left its benchmark unchanged
  • PBOC Deputy Governor Yi Gang says he doesn’t see urgent need to change yuan band, current range for yuan trading is “much more flexible than before”
  • The Swiss economy grew twice as fast as economists forecast at the end of 2014, indicating resilience before the central bank scrapped a currency cap that was shielding exporters
  • Hillary Clinton used personal e-mail account to conduct govt business as secretary of state, State Department officials say, and may have violated federal requirements that official correspondence be retained as part of agency’s record: NYT
  • Sovereign 10Y yields higher. Asian stocks mostly lower. European stocks stocks gain; U.S. equity-index futures decline. Crude higher; gold little changed, copper falls

 

DB’s Jim Reid completes the overnight news roundup

 

 

 

Over the last few weeks it feels like there’s been a big story to talk about everyday. We had the build-up and announcement of ECB QE, the SNB shock, the Greece story, negative bond yields and numerous central banks easing across the globe. This morning it feels like we’re in a little lull and the story that has caught our eye most over the last 24 hours is purely a sentimental one. Yesterday the NASDAQ closed above 5000 for the first time since March 2000. At the time we have fond memories of showing a graph of the S&P 500 after 1929, pointing out that after that bubble burst, it took until 1954 for the index to scale its former peak. Well on this measure the NASDAQ has done rather well, only taking 15 years to get close to its old peak (of 5049).

The NASDAQ 2000 bubble and the current negative government bond yields are linked in our opinion. Over the last 15-20 years policy makers have tried to limit the fall-out from various major shocks/events by very aggressive stimulus not seen before in history. No bubble has been allowed to fully correct naturally without such intervention. To cut a long story short this has ensured rolling bubbles through the financial system (equities, finance, housing, credit, private debt) and there’s little doubt in our mind that there is a now a bubble in parts of the government bond market as a result of this policy super-cycle. It’s very hard to say when this bond bubble will burst as indeed its needed to some degree to smoothly finance the mountain of debt we have. However it will likely burst in some form eventually. The best case scenario for this to unwind and avoid a financial crisis will be for bond holders to take a slow and long haircut via inflation. There is precedent for this as US and UK government bond investors saw their investments half in real-terms in the 35 years that followed WWII after a large debt build up. A stunningly bad period for fixed income returns but one without defaults.

The conclusion from this is that we believe there are long cycles in markets. When equities are chronically overvalued they can easily go nowhere for a couple of decades. However when bonds are chronically over-valued you may either never get your money back or have it eroded aggressively by inflation. Fascinating times. I’m really not sure how central banks get out of this one longer-term without serious damage. However the start of the resolution to this story could still be someway ahead.

While we’re on this subject a reminder that yesterday we published a note looking at the record monthly run of positive total returns of the iBoxx Euro indices. In the note we showed that the government benchmark to these indices was now negative for the first time and the credit index now below 1% (also for the first time). We also showed that a 2bps increase in yields in a month was now enough for a negative total return for Euro credit indices. So while we still like spreads, periodic negative total return months are becoming inevitable.

Following on from this yesterday was a day of rising bond yields. 10y Bunds rose 2.7bps to 0.354% which much of the move coming late in the day whilst US Treasuries went back above 2% climbing 8.9bps to 2.082%. It was weaker day across the Treasury curve in fact as 2y yields closed at 0.662% (+4.4bps) and are now just off the 2015 highs in yield we saw back in early January (0.665%). Although yesterday’s macro data was mixed, there was enough in it to disturb bonds a little. Following the weak Chicago PMI on Friday, it was all eyes on the ISM manufacturing yesterday afternoon in the US which, despite falling 0.6pts to 52.9 and the lowest reading since January last year, was more or less in line with expectations (53.0) and helped abate some of the earlier fears from Friday’s shock reading. In conjunction with the better sentiment from the China move over the weekend, the S&P 500 closed +0.61% – offsetting three previous days of decline to record a fresh record high.

Data elsewhere in the US was largely mixed. Both personal income (+0.3% mom vs. +0.4% expected) and personal spending (-0.2% mom vs. -0.1% expected) were a touch below expectations. The PCE deflator was as expected with the energy influenced headline down to +0.2% yoy (from +0.8%) and the core unchanged at +1.3% yoy. Meanwhile, in contrast to the ISM print, the final reading of the Markit manufacturing PMI rose 0.8pts to 55.1 in February. Finally the ISM price paid was unchanged at 35 (although below expectations of 37.5) and construction spending surprised to the downside (-1.1% mom vs. +0.3% expected).

Meanwhile in Europe yesterday, focus was on the inflation print for the Euro-area which helped support a move wider in bond yields across the region. The headline CPI estimate of -0.3% yoy for February was down three-tenths of a percent from January but came in a touch ahead of expectations (-0.4% yoy) whilst the final core reading for the month was unchanged at +0.6% yoy. Elsewhere, it was case of generally mixed prints. Unemployment came in below consensus (11.2% vs. 11.4% expected) whilst the final February manufacturing PMI print for the region was revised down a tenth to 51.0 as Germany was revised up (51.1 vs. 50.9 previously) but offset by a lower revision for France (47.6 vs. 47.7 previously). Meanwhile the preliminary February manufacturing PMI reading for the UK was firmer than expected at 54.1 (vs. 53.3) – and was in fact the highest reading since July last year.

Despite the better than expected inflation print, bourses in Europe were generally subdued with the Stoxx 600 finishing -0.23% and DAX +0.08%. Energy stocks (-1.30%) were a notable drag however after Brent (-4.86%) in particular took a sharp leg lower.

There was further chatter in Greece yesterday after the Spanish economy minister, Luis de Guindos, suggested that the Eurogroup were looking at a third bailout package for Greece worth in the range of €30bn – €50bn. Specifically, Guindos was quoted on the FT as saying that ‘we are negotiating a third rescue for Greece’ which would likely provide for ‘flexibility’ and include new attached conditions. The suggestions of a third package is not a surprise although it’s the first signs from Euro members that talks of such nature have happened beyond just the extension of the current programme. Attention in the near term however continues to be on current financing for Greece with continued worries that the government is due to run out of cash this month. An upcoming T-Bill auction tomorrow will be watched closely given the €1.4bn maturing on Friday for the nation as well as a €300m IMF repayment. With tensions clearly running high on the current liquidity position, according to the UK Telegraph, the Greek economy minister Stathakis was reported as saying that the government could also draw upon various central bank deposits including pension reserves.

Quickly glancing over our screens this morning, focus has been on Australia in large part following the RBA meeting in which the Central Bank has, to some surprise, kept rates on hold – however there was some indication in the statement that further rate cuts could be appropriate over the near term. The AUD has rallied around +0.8% versus the Dollar following the news whilst the ASX has fallen 0.42% as we type.

Elsewhere, bourses are generally mixed. The Shanghai Comp (-1.12%) is weaker whilst the Nikkei (-0.04%) and Hang Seng (-0.05%) are largely unchanged and the Kospi (+0.24%) is higher. In terms of the day ahead, it’s a lighter calendar in Europe today with Euro-area PPI, German retail sales and Spanish employment data all due up. Meanwhile across the Atlantic this afternoon in the US we’ve got the ISM NY, IBD/TIPP economic optimism index and February vehicle sales data all due.

 

 

end

 

Japan warns that they may have reached the limit to its bond buying:

 

(courtesy zero hedge)

 

Japan Approaches Limit To Bond Buying Former BOJ Official Okina Warns

A day after we highlighted the veritable collapse in U.S. shadow banking liquidity (down by nearly half since 2008) occasioned by a potent one-two punch from Fed bond purchases and regulatory measures designed to stem prop trading (but which have apparently impaired market making), we get rumblings out of Japan that the BOJ might have hit the limit on how many JGBs it can purchase without breaking the market. Specifically, Yuri Okina, vice chairman at Japan Research Institute, is concerned about the exact same issue raised by the Center for Financial Stability in their report on the “steep slide” in market finance: namely, that the absence of liquidity created by QE will create distortions and volatility.

From Bloomberg:

“If additional easing is done using government bonds, it may have the considerable side-effect of impairing the functioning of the market,” Okina, an economist and a former BOJ official, said on Feb. 26 in an interview in Tokyo. 

The BOJ’s purchases have had a “huge” impact on the market’s liquidity, Okina said. Buying bonds at a faster pace would make it more difficult for the BOJ to exit from its easing policy when the time comes to reduce stimulus, she said.

Clearly there’s something self-evident (even tautological) about this discussion. That is, the BOJ is set to monetizeall JGB gross issuance in 2015 (and may own 50% of the entire market within three short years), so yes, there are likely to be rather serious issues with market liquidity going forward.

What’s especially perturbing about this scenario, is that sapping liquidity from the market has the potential to create enormous volatility (as we saw on October 15 of last year when Treasurys staged a six standard deviation move in the space of a few hours), something the pot committed BOJ simply cannot afford lest the house of cards should come cascading down. In other words, if yields on JGBs become increasingly unwieldy because either traders lose confidence in the central bank’s ability to manage the ponzi or a lack of liquidity triggers excessive volatility (or both), it’s game over or, as BlackRock put it: “…the nightmare scenario would be a spike in JGB rates leading to a fiscal crisis.”

Given this, it doesn’t inspire much confidence that the BOJ’s actions are curtailing price discovery. Here’s Bloomberg again:

Primary dealers responsible for distributing JGBs to investors told the government in November it was getting harder to determine prices because net supply was low.

…and with no price discovery comes volatility:

Yields on benchmark 10-year Japanese government bonds fell to a record low of 0.195 percent on Jan. 20 before swinging to a two-month high of 0.45 percent on Feb. 17. Historical volatility for the past 30 days touched a 21-month high of 4.56 percent on Feb. 25.

Just as the SNB finally buckled in January, and just as the ECB faces the prospect of failing to deliver on its trillion euro Q€ promise, the BOJ could be nearing the dreaded inflection point where the market realizes once and for all that the emperor truly has no clothes. A few more auctions like last month’s 10- and 5-year sales could well accelerate the process — this month’s 10-year auction is tomorrow.

*   *   *

In related news, the SEC’s Daniel Gallagher said today that regulators aren’t doing enough to mitigate the risks posed by an increasingly illiquid corporate bond market. As we noted yesterday, the unwillingness of primary dealers to hold inventories has, to use the CFS’s terminology, created a situation where “an accident” is likely.

More from Bloomberg:

Lack of liquidity in corporate bond market is “systemic risk” not addressed by regulators, SEC Commissioner Daniel Gallagher says in public remarks.

Gallagher cites 80% decline in corporate bond inventories among dealers and impact of higher interest rates on future trading needs; “that has accompanied a record level of issuance year after year since 2008 of $1 trillion-plus of corporate debt”

 

“I would submit to you that the lack of liquidity in our securities markets is a systemic risk,” he says at conference sponsored by Institute of International Finance.

 

…and a bit more from BofAML for good measure:

Historically, dealers provided liquidity by buying bonds when investors wanted to sell, selling bonds when investors wanted to buy and by holding sufficient inventory level.

Onerous capital charges imposed on many securitized products has resulted in shrinking dealer balance sheets, less competitive bids for bonds unless buyer is already lined up.

“While this has reduced trading flows and muted spread volatility over the last year or so, it potentially sets the stage for a significant volatility spike if an event, such as the downgrade of the U.S. long term debt in 2011, was to occur and the markets broadly entered risk-off mode.”

To extent dealers unwilling/unable to step in and provide liquidity, spreads will need to widen until they hit clearing levels attractive enough for other investors to step in.

 

 

end

 

 

 

As we indicated in the above commentary, the Bank of Japan is losing control of their mess as demand wanes for their bonds:

 

(courtesy zero hedge)

 

BoJ Is Losing Control As Demand Wanes For JGBs

 

Well that didn’t take long. Just yesterday we noted that Japanese policy makers were starting to get wise to the fact that rampant monetization of government bonds can (and will) foster extreme volatility by robbing the market of liquidity and inhibiting price discovery. We went on to warn that with the BOJ greedily sucking up all gross JGB issuance (and in the process driving historical volatility to near two-year highs last month), all it will take are a couple of more weak auctions (like the 10- and 5-year debt sales from February) for things to go awry and that’s just what happened overnight.

Yields on JGB 10s rose 4 bps and the 30-year yield tacked on 6 bps after demand was tepid at the monthly 10-year sale. While down from last month’s 12-year high, the tail, at 0.33, was still some three standard deviations outside of the historical norm (not good). Allow us to reiterate (although this should, by now, be self-evident to anyone with a pulse) that Japan simply cannot afford for yields to spike as the entire ponzi scheme rests solely on there being a constant bid (from somewhere) for JGBs. The next test is Thursday’s 30-year auction which, according to Bloomberg, traders are already worried about.

We’re starting to notice a pattern here:

 

 

Meanwhile, another government adviser (this makes the second in two days) expressed skepticism about Japan’s ability to manipulate markets in perpetuity. Further easing “shouldn’t be undertaken,” Etsuro Honda, an adviser to PM Abe told WSJ, adding that the dollar likely can’t go much higher against the yen as we’ve probably reached the “upper limit in the exchange rate’s comfort zone.”

We’re reminded of what we said last month: “The idea that a nation can devalue itself into prosperity on the backs of the rest of the world was total idiocy after all.”

 

 

 

end

 

 

 

 

 

We can assure you that pensioners are not happy with this latest development: as we warned yesterday, the Syriza party will raid the pension fund in order to pay off the IMF:

 

 

(courtesy zero hedge)

 

 

 

 

Greek Pensioners To Fund Ukraine’s Government: Syriza Will Tap Pension Funds To Pay IMF

 

Just yesterday we warned that, among the ‘solutions’ the Greek government was exploring in its scramble for cash to pay back The IMF loan, was ‘borrowing’ from the nation’s pension funds. Today we get the sad confirmation that indeed Greece will raid cash reserves in pension funds and other public sector entities to cover its funding needs. As Reuters reports, Greece will use short-term repo transactions to transfer the cash, but one government official said they could not be used to repay the IMF. As the radical left-wing government takes from the implictly wealthier Greeks (pension funders), it is giving free electricity, a rent allowance, and food stamps to the poor.

 

As we warned yesterday, we are sure the Greek people will be enthused when they find out what the ‘radical left’ has in store for their funds… And as reuters reports, the raiding of Greek pension funds is now confirmed…

Greece is tapping into the cash reserves of pension funds and public sector entities through repo transactions as it scrambles to cover its funding needs this month, debt officials told Reuters on Tuesday.

 

Shut out of debt markets and with aid from lenders frozen, Athens is in danger of running out of cash in the coming weeks as it faces a 1.5 billion euro loan repayment to the International Monetary Fund this month.

 

The government has sought to calm fears and says it will be able to make the IMF payment and others, but not said how.

 

At least part of the state’s cash needs for the month will be met by repo transactions in which pension funds and other state entities sitting on cash lend the money to the country’s debt agency through a short-term repurchase agreement for up to 15 days, debt agency officials told Reuters.

However, one government official said they could not be used to repay the IMF unless Athens was able to repay the state entities the cash it borrowed from them.

*  *  *
Tomorrow brings a regularly scheduled six-month T-bill auction of 875 million euros to refinance a maturing issue, in a sale that will be closely watched.

*  *  *

But Syriza appears to be “Robin Hood”-ing, as Keep Talking Greece reports, the coalition government submitted a draft legislation to tackle the humanitarian crisis in Greece. The measures will benefit impoverished households unable to access to three basic goods: electricity, housing and food.

The draft contains measures among others for free electricity, rent- and food allowances. But also free access to health and public transportation means.

 

In particularly:

 

a) Free electricity for up to 300 KhW per household until the end of 2015.  The measure refers to some 300,000 households and especially those already in the ‘social price policies program’ of PPC.

 

Fee-free reconnection of power to primary residence due to outstanding debts to the Public Power Company.

 

b) Rent-allowance of €70 – €220 per month for up to 30,000 households. The allowance will not be considered as ‘taxable income’ and will not be seized by the state for outstanding debts. However the allowance could be used to cover debt repayments to tax authorities and social insurance funds.

 

c) Food allowance for the supply of basic food and other items for 300,000 people.The allowance will be distributed through food stamps or some electronic means (‘smart card’ to be charged on weekly basis.)

 

The allowance-amount will vary depending on the number of the family members. The food and other basic good supplies will be provided by businesses and companies willing to participate in the program.

 

The government seeks to establish the food program in cooperation with the Greek Orthodox Church and the local municipalities.

 

Priority will be given to families with under-aged children, jobless and long-term unemployed, tenants under risk to be evicted and families who do not have access to these three basic goods: electricity, housing, food.

 

The criteria for the beneficiaries to participate in the program will be based on tax declarations and sources of income.

 

Main criteria is the “poverty line” which is considered “annual income of up to €5.023 per single household and up to €10,547 for a four-member family.”

 

According 2013-data of Greek Statistics Authority ELSTAT, 35.7% of Greeks live at risk of poverty and  social isolation.

*  *  *

Greece remains second only to Ukraine for default risk….

end

 

 

The Ukraine central bank raised its key interest rate to 30% to stem the losses in the hryvnia.  With the new rate the hryvnia strengthened to 24.25 UAH to the dollar.

 

 

Ukraine Raises Benchmark Rate to 30% to Stem Hryvnia Plunge

 

(Bloomberg) — Ukraine’s central bank raised its benchmark interest rate to the highest since 2000 as policy makers struggle to curb a decline in the nation’s currency and seek to move closer to obtaining an emergency loan.

The National Bank of Ukraine raised its refinancing rate to 30 percent from 19.5 percent, effective Wednesday, to “stabilize the situation on the money and lending markets,” Governor Valeriya Gontareva told reporters in Kiev. The regulator also retained a requirement for exporters to convert 75 percent of their foreign-currency revenue, helping the hryvnia strengthen 9.3 percent against the dollar.

Ukraine is working to access an International Monetary fund loan to avert default after the war with pro-Russian separatists in the country’s east helped wipe 15.2 percent off the economy last quarter compared with a year earlier. Authorities are also trying to prevent capital flight and stabilize the hryvnia, which has lost 60 percent against the dollar in the past year to become the world’s worst-performing currency.

“The rate hike will increase the appeal of holding hryvnias, so it will be a positive factor, but I’m not sure that it alone will be enough to fix a rather acute deficit of dollar supply,” Fyodor Bagnenko, a Kiev-based trader at Dragon Capital, said by e-mail. “What’s really needed in this situation is a combination of administrative and monetary measures — and it seems like this is exactly what the central bank is doing.”

Hryvnia, Bonds

The hryvnia strengthened for a third day, rising to 24.25 per dollar by 2:23 p.m. in Kiev from a record low 33.75 last week, according to Bloomberg data. The nation’s benchmark international bonds, the $2.6 billion of 9.25 percent notes due in July 2017, gained 0.8 cents to 44.12 cents on the dollar, extending the advance over four days to 2.4 cents.

Importers returning to the market on Wednesday may help create a more representative hryvnia price, Dragon Capital’s Bagnenko said

The hryvnia’s plunge prompted the central bank to tighten capital controls last week as reserves declined to the lowest in more than a decade in January. Ukraine’s First Deputy Finance Minister Ihor Umanskyi said Feb. 27 that IMF funds will go into reserves, because “it will be very difficult to douse the fire and panic without additional resources poured in.”

All laws demanded by the IMF for the approval of a four-year $17.5 billion loan program have been adopted by lawmakers, Gontareva said.

They central bank is “eager” to strengthen the hryvnia toward the 21.7 per dollar average rate in the 2015 budget, which is important to ensure a board approval of the IMF loan next week, Timothy Ash, the chief emerging-market economist at Standard Bank Plc, said by e-mail. The IMF board will discuss the Ukrainian bailout on March 11.

“The central bank is trying to send a strong signal that it is in charge,” Ash said.

To contact the reporters on this story: Volodymyr Verbyany in Kiev atvverbyany1@bloomberg.net; Marton Eder in Budapest at meder4@bloomberg.net

 

 

end

 

 

 

These are words that we just do not want to hear:

 

(courtesy zero hedge)

Despite Russian Warnings, US Will Deploy A Battalion To Ukraine By The End Of The Week

Before this week is up, we’ll be deploying a battalion… to the Ukraine to train Ukrainian forces for the fight that’s taking place,” stated US 173rd Airborne Brigade Commander Colonel Michael Foster said at the Center for Strategic and International Studies in Washington, DC on Monday. Despite earlier warnings from Russia (and claims that NATO had not agreed to any such foreign ‘boots on the ground’ action’), Sputnik News reports, Foster added, “what we’ve got laid out is six United States companies that will be training six Ukrainian companies throughout the summer.

This comes a week after PM David Cameron confirmedBritain will be sending 75 military personnel to help combat Russian military aggression.

Despite earlier reports from Russia’s NATO envoy that, as TASS reports,

NATO has taken no decisions on sending British or any other instructors to Ukraine, Russia’s Ambassador to the North Atlantic Alliance Alexander Grushko said on Monday.

 

“NATO has taken no decisions on sending instructors,” he told the Rossiya 24 television channel. “NATO is implementing the decisions that were taken at the political level at the Wales summit in September 2014.”

 

Moscow will take all measures, including military-technical, to neutralize possible threat from NATO presence in Ukraine, he added.

It seems it is happening, as Sputnik News reports,

The United States will deploy personnel by the end of this week to train the Ukrainian national guard, US 173rd Airborne Brigade Commander Colonel Michael Foster said at the Center for Strategic and International Studies in Washington, DC on Monday.

 

“Before this week is up, we’ll be deploying a battalion minus… to the Ukraine to train Ukrainian forces for the fight that’s taking place,” Foster stated. “What we’ve got laid out is six United States companies that will be training six Ukrainian companies throughout the summer.”

 

 

The current plan is for US forces to stay six months, he said, and noted there have been discussions about how to increase the duration and the scope of the training mission.

 

The current channels for military training set up between Ukraine and the United States would not be used for transferring defensive lethal aid if the United States decided to provide arms to Ukraine, Foster told Sputnik on Monday.

 

“It would go through something separate… We would not funnel the lethal aid or arms through that [training] event, we would use a secondary method for that,” Foster said, adding that a completely separate process is preferable.

*  *  *

Here is the full interview with Colonel Foster: “If Russia will invade Ukraine, why would we not think they will invade the US next?”

At 14:45, Colonel Foster discusses the deployment of US troops to Ukraine…

*  *  *

Of course, we already knew American military boots were on the ground in east Ukraine…

 

But this seems like a direct aim at Putin after the war-mongery rhetoric this morning:

 

 

 

end

 

 

 

I highlighted to you in previous commentaries Goldman Sachs proprietary swirlogram which gives a pretty good picture of the global economy.  Last night, they confirmed, that the global economy is in contraction:

 

 

(courtesy Goldman Sachs/zero hedge)

 

 

 

US Macro Weakest Since July 2011 As Goldman Affirms Global Economy In Contraction

 

Goldman’s Global Leading Indicator (GLI) final print for February affirms the global economy has entered a contraction with accelerating negative growth. Just six months after “expansion”, the Goldman Swirlogram has collapsed into “contraction” with monthly revisions notably ugly and 9 out of 10 components declining in February. Some have suggested, given US equity’s strong February (buyback-driven) performance, that the US economy will decouple from the world… or even drive it.. but that is 100% incorrect. US Macro data has fallen at its fastest pace in 3 years and is at its weakest level since July 2011 as 42 of 48 data items have missed since the start of February.

 

With 9 of 10 components negative in February,Goldman’s Swirlogram has collapsed from expansion to contraction within just 6 months…

 

First negative print since 2012 – indicating global industrial production is set to contract…

What is the GLI: The Global Leading Indicator (GLI) is a Goldman Sachs proprietary indicator that is meant to provide an early signal of
the global industrial cycle on a monthly basis. There is an Advanced reading for each month, released mid-month, followed by the Final reading, released on the first business day of the following month.

*  * *

But for those who look at US stocks and somehow believe America is an island economy capable of decoupling from the world… think again – it’s all a lead-lag cycle and the global contraction blowback is boomeranging back to US data…

Today was ugly… nowhere worse than spending…

For the first time since Q1 2009 (i.e. post Lehman), we have just had back to back drops in consumer spending…

 

The Bloomberg US Macro Surprise Index just dropped – after today’s dismal data showing – to its lowest absolute level since July 2011. The last 3 months have seen it fall at the fastest pace sinceJuly 2012. Notice the lower peaks and lower troughs on each cycle since 2012…

Note: this index tracks not just miss/beat but absolutepositive or negative data items – key to the cyclical aspect is the over-optimism and over-pessimism of economist’s forecasts. The last 3 years (lower peaks and lower troughs) suggest economists are strongly biased to over-optimistic forecasts and normally this kind of drop woul dhave stopped but economists continue to look for hockey-sticks which, perhaps, in this case will be absent (and have been for a month).

But of course that doesn’t matter…

 

A reminder of how this happened (clue: non-economic buyers)…

 

From the start of February…

MISS

  1. Personal Spending
  2. Construction Spending
  3. ISM New York
  4. Factory Orders
  5. Ward’s Domestic Vehicle Sales
  6. ADP Employment
  7. Challenger Job Cuts
  8. Initial Jobless Claims
  9. Nonfarm Productivity
  10. Trade Balance
  11. Unemployment Rate
  12. Labor Market Conditions Index
  13. NFIB Small Business Optimism
  14. Wholesale Inventories
  15. Wholesale Sales
  16. IBD Economic Optimism
  17. Mortgage Apps
  18. Retail Sales
  19. Bloomberg Consumer Comfort
  20. Business Inventories
  21. UMich Consumer Sentiment
  22. Empire Manufacturing
  23. NAHB Homebuilder Confidence
  24. Housing Starts
  25. Building Permits
  26. PPI
  27. Industrial Production
  28. Capacity Utilization
  29. Manufacturing Production
  30. Dallas Fed
  31. Chicago Fed NAI
  32. Existing Home Sales
  33. Consumer Confidence
  34. Richmond Fed
  35. Personal Consumption
  36. ISM Milwaukee
  37. Chicago PMI
  38. Pending Home Sales
  39. Personal Income
  40. Personal Spending
  41. Construction Spending
  42. ISM Manufacturing

BEAT

  1. Markit Services PMI
  2. Nonfarm Payrolls
  3. JOLTS
  4. Case-Shiller Home Price
  5. Q4 GDP Revision (but notably lower)
  6. Markit Manufacturing PMI

*  *  *

Of course, earnings expectations are not encouraging…

*  *  *

But apart from that… everything is awesome.

 

 

end

 

 

 

The Israeli Prime Minister comes to congress to deliver a message:

 

“please do not deal with Iran”

 

Netanyahu’s “Don’t Deal With Iran” Speech To Congress – Live Feed

 

 

Israeli Prime Minister Benjamin Netanyahu will address the US Congress this morning at 11ET to issue a high-profile warning against what he considers an ill-advised nuclear deal with Iran. This brings to a head weeks of tension between Israel and The White House and numerous politicians (including The President) will boycottbe absent during Bibi’s speech. In what NYTimes calls an‘implicit challenge to Obama’, Bibi plans to outline his case for a tougher strategy to stop Iran from obtaining nuclear weapons and to dissect the flaws of an agreement that has been emerging from American-led negotiations;gambling that disclosing compromises the U.S. made in trying to negotiate a nuclear deal with Iran will delay or derail any agreement.

Netanyahu arrives…

 

 

As The NY Times reports, for Mr. Netanyahu, the stakes could hardly be higher. Coming just two weeks before Israeli elections, the speech offers an opportunity to build support at home for another term while rallying opposition abroad to a diplomatic accord that he sees as a threat to his country’s security.

It will be, said Abraham H. Foxman, national director of the Anti-Defamation League, “the most important speech of his political life.”

 

For Mr. Obama, however, it is an extra complication as he seeks to draw Iran into a pact by late March, a complication he worries may embolden lawmakers into intervening.

 

“I’m less concerned, frankly, with Prime Minister Netanyahu’s commentary than I am with Congress taking actions that might undermine the talks before they’re complete,” he told Reuters on Monday.

At the heart of the dispute between Mr. Obama and Mr. Netanyahu is a debate over the best way to curb Iran’s nuclear program.

The United States, along with European allies, Russia and China, has been negotiating a potential deal in which Iran for at least 10 years would restrict the number of centrifuges it has for enriching uranium and open its program to international inspection.

 

The goal would be to limit Iran’s capacity so that it would take at least a year to build a nuclear weapon should it choose to violate or break the agreement. In theory, that would give the West enough time to respond. In exchange, international sanctions that have hampered Iran’s economy would be eased.

 

Mr. Netanyahu argues that Iran cannot be trusted given its history of cheating and hostile statements about Israel. The deal contemplated by the American-led negotiations would give away far too much, he contends. Instead, Mr. Netanyahu and other critics have advocated tightening sanctions and demanding that Iran give up all uranium enrichment.

 

“I plan to speak about an Iranian regime that is threatening to destroy Israel, that’s devouring country after country in the Middle East, that’s exporting terror throughout the world and that is developing, as we speak, the capacity to make nuclear weapons — lots of them,”Mr. Netanyahu told the Aipac conference on Monday. “Ladies and gentlemen, Israel and the United States agree that Iran should not have nuclear weapons, but we disagree on the best way to prevent Iran from developing those weapons.”

 

Mr. Obama and his team said they shared the concerns but considered Mr. Netanyahu’s approach unrealistic.

*  *  *

And then there’s this…

Right wing radio host would like to see members of the Congressional Black Caucus “hanging from a noose in front of the U.S. Capitol building” for skipping the Netanyahu speech.

 

 

end

 

The USA with help from both Iraq and Iran forces are now set to retake Tikrit.  Once that is done, then they can concentrate on retaking Mosul:

 

(courtesy zero hedge)

 

As The Battle For Tikrit Begins, A Map Of Who Controls What

 

 

As the world awaits to see if following his speech, Israel’s PM will now proceed with launching a full on assault on Iran just to show he means business, or at least stage yet another false flag intervention to greenlight war in the middle east, several hundred kilometers to the northeast, the biggest offensive in the “war on ISIS” is now taking place after thousands of Iraqi soldiers and Shi’ite militiamen seek to retake the northern Iraqi town and birthplace of Saddam Hussein, Tikrit.

As previously reported, U.S. officials said last month that plans are afoot for a massive operation to recapture Mosul from ISIS — probably this spring — but wresting Tikrit from the militants beforehand is seen as critical given the city’s strategic location. The question is whether third time will be the charm, er, offensive: Iraq’s security forceshave tried repeatedly — in June, again in August — to retake Tikrit but made little headway against the militants. This time may or may not be different, with a key variable being whether US air support will be granted to the local “resistance” fighters.

According to Reuters, Iranian military commander Qassem Soleimani, who has helped coordinate Baghdad’s counter-attacks against Islamic State since it seized much of northern Iraq in June, was overseeing at least part of the operation. In other words, the same Iran that was being vilifies in Congress is now fighting on behalf of the US-led “alliance”, to eradicate the same terrorists which according to some, have seen a substantial Mossad influence in their appearance. Ironic.

As Reuters puts it, the Iranian’s presence on the frontline highlights neighbouring Iran’s influence over the Shi’ite fighters who have been key to containing the militants in Iraq.

In contrast, the U.S.-led air coalition which has been attacking Islamic State across Iraq and Syria has not yet played a role in Tikrit, the Pentagon said on Monday, perhaps partly because of the high-level Iranian presence.  Iraqi military officials said security forces backed by the Shi’ite militia known as Hashid Shaabi (Popular Mobilisation) were advancing gradually, their progress slowed by roadside bombs and snipers.

Adding to the confusion, on the southern flank of the offensive, army and police officials said government forces had surrounded and sealed off al-Dour, but had not yet launched an assault on the town, a source in military operations command said. To the north, they captured a village close to Tikrit, the army said.

More confusion: we now have a war against a stateless enemy that has seen Iraqi and Iranian soldiers fighting side by side:

Soleimani, head of the Iranian Revolutionary Guards Quds Force, was directing operations on the eastern flank from a village about 55 km (35 miles) from Tikrit called Albu Rayash, captured from Islamic State two days ago.

 

With him were two Iraqi Shi’ite paramilitary leaders: the leader of the Hashid Shaabi, Abu Mahdi al-Mohandis, and Hadi al-Amiri who leads the Badr Organisation, a powerful Shi’ite militia.

 

“(Soleimani) was standing on top of a hill pointing with his hands towards the areas where Islamic State are still operating,” said a witness who was accompanying security forces near Albu Rayash.

Perhaps he is also pointing to where he hopes Iran borders will stretch in the coming years? Although before crossing that bridge, ISIS ground soliders will have to be repelled from a city which they are fiercely guarding and in which they have been strongly fortified:

The offensive is the biggest in the Salahuddin region north of Baghdad since last summer, when Islamic State killed hundreds of Iraqi army soldiers who had abandoned their base at Camp Speicher outside Tikrit.

 

Several Shi’ite Hashid Shaabi fighters have described this week’s campaign – which has been given the title “Here I am, Messenger of God” – as revenge for the Speicher killings. Prime Minister Haider al-Abadi has urged them to protect civilians in Salahuddin, a mainly Sunni Muslim province.

And while Tikrit itself is irrelevant, the battle “will have a major impact on plans to move further north and recapture Mosul, the largest city under Islamic State rule.”

If the offensive stalls, it will complicate and delay a move on Mosul. A quick victory would give Baghdad momentum, but any retribution against local Sunnis would imperil efforts to win over Mosul’s mainly Sunni population.

 

To the west of Mosul, Islamic State fighters attacked Kurdish forces in the town of Sinjar on Monday, a senior peshmerga source said. Nine peshmerga and 45 militants were killed in the fighting, which began with a suicide car bomb in the Nasr quarter of the town.

 

Islamic State “want to show people they can still attack and inflict losses on the peshmerga”, the source said. Kurdish forces currently control around 30 percent of the town of Sinjar, as well as the hills to the north and the mountain overlooking it.

As noted above: much confusion all around since pretty much everyone in the middle east is now somehow involved in this war on Iraqi/ISIS soil, so to provide some clarity, here is a simple map showing who controls what in this latest diversionary war designed merely to get Syria’s president committed so the US has a legitimate pretext to obliterate him.

end

Oil related stories:

 

API oil inventories drop sending crude higher;

 

(courtesy zero hedge)

 

Crude Jumps After API Inventories Build Less Than Expected

 

The last three times that API inventories reported (each notably greater than expected), crude prices tumbled (only to ramp hilariously the next day following DOE inventory data). Against Bloomberg estimates of a 3.95 million barrel build, API printed only a 2.89 million barrel build; and WTI crude prices surged to the day’s highs.

 

Crude jumped to the highs of the day…

Breaking the pattern…

For now…

 

Charts: Bloomberg

 

end

 

Your more important currency crosses early Tuesday morning:

 

 

 

Eur/USA 1.1159 down  .0017

USA/JAPAN YEN 119.85  down .360

GBP/USA 1.5363 up .0006

USA/CAN 1.2513 down .0028

This morning in Europe, the euro is down, trading now well below the 1.12 level at 1.1159 as Europe is supported by other nations keeping the Euro afloat,  Europe reacts to deflation, announcements of massive stimulation, falling bourses, the default at Austrian Hypo bank and the possible default of the Ukraine and Greece.   In Japan Abe went all in with Abenomics with another round of QE purchasing 80 trillion yen from 70 trillion on Oct 31. The yen continues to trade in yoyo fashion as this morning it settled up again in Japan by 36 basis points and settling just below the 120 barrier to 119.85 yen to the dollar. The pound was up this morning as it now  trades just below the 1.54 level at 1.5363.(very worried about the health of Barclays Bank and the FX/precious metals criminal investigation/Dec  12 a new separate criminal investigation on gold,silver oil manipulation and now the HSBC criminal probe). The Canadian dollar was up again reacting to the higher oil price and is trading  at 1.2513 to the dollar. It seems that the 4 major global carry  trades are being unwound. (1) The total dollar global short is 9 trillion USA, and as such we now witness a sea of red blood on the streets as derivatives blow up with the massive rise in the dollar against all paper currencies.We also have the second big yen carry trade unwind as the yen refuses to blow past the 120 level.(3) the Nikkei vs gold carry trade. (4) short Swiss Franc/long assets  (European housing), the Nikkei, etc. These massive carry trades are terribly offside as they are being unwound. It is  causing deflation as the world reacts to a lack of demand. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT.

The NIKKEI: Tuesday morning : down 11.72 points or 0.06%

Trading from Europe and Asia:
1. Europe stocks mostly in the red

2/ Asian bourses mostly in the red    … Chinese bourses: Hang Sang in the red ,Shanghai in the red,  Australia in the red: /Nikkei (Japan) red/India’s Sensex in the green/

Gold very early morning trading: $1209.70

silver:$16.45

 

Early Tuesday morning USA 10 year bond yield: 2.10% !!!  up 2  in basis points from Monday night/

 

USA dollar index early Tuesday morning: 95.56  up 10 cents from Monday’s close.

 

 

This ends the early morning numbers, Tuesday morning

 

 

 

And now for your closing numbers for Tuesday:

 

 

 

 

 

 

Closing Portuguese 10 year bond yield: 1.93% up 7 in basis points from Monday

 

Closing Japanese 10 year bond yield: .38% !!! up 3 in basis points from Monday

 

Your closing Spanish 10 year government bond,  Tuesday up 4 in basis points in yield from Monday night.

 

Spanish 10 year bond yield: 1.39% !!!!!!

 

Your Tuesday closing Italian 10 year bond yield: 1.40% up 5 in basis points from Monday:

 

 

trading 1 basis points higher than  Spain.

 

IMPORTANT CURRENCY CLOSES FOR TODAY

 

Closing currency crosses for Tuesday night/USA dollar index/USA 10 yr bond:

Euro/USA: 1.1177  up .0007

USA/Japan: 119.72 down .500

Great Britain/USA: 1.5364 up .0007

USA/Canada: 1.2488 down .0055

 

 

The euro rose a bit this afternoon and it was up  on the day by 7 basis points finishing the day just below the 1.12 level to 1.1177. The yen was up slightly in the afternoon, and it was up by closing to the tune of 50 basis points and closing well below the 120 cross at 119.72. The British pound gained some ground during the afternoon session and was up on the day closing at 1.5364. The Canadian dollar was up again today as the oil price was up today.  It closed at 1.2488 to the USA dollar

As explained above, the short dollar carry trade is being unwound, the yen carry trade , the Nikkei/gold carry trade, and finally the long dollar/short Swiss franc carry trade are all being unwound and these reversals are  causing massive derivative losses. And as such these massive derivative losses is the powder keg that will destroy the entire financial system. The losses on the oil front will no doubt produce many dead bodies. The last asset still rising are the stock exchanges.

 

 

Your closing 10 yr USA bond yield: 2.12 up 3 in basis points from Monday

 

 

 

Your closing USA dollar index: 95.40 down 6 cents on the day.

 

 

European and Dow Jones stock index closes:

 

England FTSE  down 51.51 points or 0.74%

Paris CAC  down 48.07 or 0.98%

German Dax down 130.00 or 1.14%

Spain’s Ibex down 163.80 or 1.47%

Italian FTSE-MIB down 310.42. or 1.39%

 

 

The Dow: down 85.26 or 0.47%

Nasdaq; down  28.19 or 0.56%

 

 

OIL: WTI 50.42 !!!!!!!

Brent: 61.03!!!!

 

 

Closing USA/Russian rouble cross: 61.86 up almost 1/4   roubles per dollar on the day.

 

 

 

 

end

 

 

 

And now for your more important USA economic stories for today:

 

 

 

Your New York trading for today:

 

 

Hubris Hangover? Stocks, Bonds, & Bullion All Red

For those who bought the breakout to 5,000 in the Nasdaq…

 

We are sad to report that The Nasdaq Composite was unable to trade back above 5,000 today…

 

An early dip into the red for the week was rescued, then another dip after Europe closed took all but The Dow into the red for the week… but then  as the USD strengthened and bonds sold off, stocks rallied to end green for the week…

 

But closed red on the day

 

Today’s weakness started in the European session as selling the QE news and Greek funding issues, extended when US opened (unusually) and then extended losses as Bibi spoke… the lows were put in as Europe closed…

 

VIX jumped the most in 3 weeks back above 13 once again… (toipping 14.6 intrday)Hubris Hangover?

 

Bonds and stocks have recoupled from the Yellen dovishness and Actavis rate-lock pressure…

 

Treasury yields trod water for most of the day but pushed higher in the afternoon – now up a notable 12-14bps on the week (2Y +6bps) and steeper…

 

The USDollar ended the day modestly lower, following a similar SELL EUROPE, BUY US pattern to unchanged for the week… Swissy is being sold this week and SEK notably bid…

 

The Brazilian real was monkey-hammered once again – now down 3.2% in the last 2 days to fresh 11-year lows over 2.9330

 

Commodities were mixed with prices charts looking more and more like EKGs than ever… Note the drop as China opened in all commodities… Silver and oil are now anti-correlated once again…

 

Crude did what it does – this time was a dump-and-pump as we await the API inventory data (dump if history is right)…

 

Charts: Bloomberg

 

end

 

 

First quarter GDP according to the Atlanta Fed will only show a growth of 1.2%:

 

(courtesy Atlanta Fed/zero hedge)

 

 

 

GDP Shocker: Atlanta Fed Calculates Q1 Growth Of Only 1.2%

While every other word from talking-heads and policy-makers relates various anecdotes (or simple lies) about US economic growth, The Atlanta Fed appears to have taken a ‘data-dependent’ perspective on the real economy (as opposed to smoke and mirrors). Based on theirGDPNow “nowcasting” model, The Atlanta Fed projects Q1 2015 GDP growth of just 1.2% (less than half current sell-side economist consensus) and getting weaker…

As The Atlanta Fed explains…

The growth rate of real gross domestic product (GDP) is a key indicator of economic activity, but the official estimate is released with a delay. Our new GDPNow forecasting model provides a “nowcast” of the official estimate prior to its release.

 

 

 

 

 

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2015 was 1.2 percent on March 2, down from 1.7 percent on February 26. The nowcasts for first-quarter real residential and nonresidential structures investment and for real state and local government spending all declined following this morning’s construction spending release from the U.S. Census Bureau.

*  *  *

This forecast from The Atlanta Fed is less than half consensus… and not even we were bearish enouogh….

*  *  *

Of course, none of this matters for stocks…

*  *  *

As it appears, just as we noted previously – thanks to Jim Bullard, that stocks believe there will be no rate hike and Fed exuberance will continue Japan-like for years/decades to come.

 

 

end

 

 

 

 

The crackdown on subprime car loans absolutely killed auto sales in February:

 

just look at the data;

 

(courtesy zero hedge)

 

This Is What Happens When The Government Cracks Down On Subprime Auto Loans

 

 

A running theme here has been the great rotation of bubble-blowing credit from subprime housing to subprime auto-loans. Amid government probes of underwriting standards and soaring delinquencies, it appears when the least-creditworthy Americans are cut off from debt servitude, bad things happen in car sales…

  • *FORD FEB. U.S. LIGHT-VEHICLE SALES FALL 2.0%, EST. UP 5.8% (miss!)
  • *GM FEB. U.S. AUTO SALES UP 4.2%, EST. UP 5.9% (miss!)
  • *NISSAN FEB. U.S. AUTO SALES UP 2.7%, EST. UP 3.8% (miss!)
  • *FIAT CHRYSLER FEB. U.S. AUTO SALES UP 5.6%, EST. UP 8.2% (miss!)
  • *HONDA FEB. U.S. AUTO SALES RISE 5%, EST. UP 11% (miss!)
  • *TOYOTA FEB. U.S. AUTO SALES RISE 13.3%, EST. UP 15%( miss!)

Of course, the real blame – as we will be told – is theweather… It seems Obama’s new American Dream of a brand new Ford or GM (or Maserati) in every driveway may be another broken promise.

  • *FORD SAYS WEAK TEXAS SALES MAY HAVE BEEN WEATHER RELATED

So did the analysts that forecast sales not know that there was weather? not know the seasonals in fleet sales?

This won’t end well…

 

as the delinquencies are already surging…

 

The details are even worse:

  • *FORD FEB. U.S. F-SERIES SALES DOWN 1.2%
  • *FORD FEB. U.S. ESCAPE SALES DOWN 9.6%
  • *FORD FEB. U.S. FUSION SALES DOWN 4.9%
  • *JAGUAR LAND ROVER CEO SEES 2015/2016 PROFIT MARGIN DECLINING

This really should not be a total surprise as auto sales have fallen and missed for 2 months in a row…

And now 3rd month:

  • *AUTODATA: FEB. LIGHT VEHICLE SAAR 16.23M UNITS, EST. 16.6M

Even Phil LeBeau could only muster “lacklustre” as a response to this data…

But finally…

  • *LAMBORGHINI CEO SEES HIGHER SALES IN 2015 THAN 2014

We leave you with this…

Sergio Marchionne, chief executive officer of Fiat Chrysler, said in an interview. “Full employment, low interest rates, stock prices up. It’s like dreamland.”

 

 

end

 

 

 

The following will no doubt hurt Hillary’s bid for the Presidency.

 

(courtesy zero hedge)

 

 

Hillary Clinton’s Latest Scandal: Former SecState Exclusively Used Undocumented, Personal Email Account

 

 

While the Hillary Clinton campaign seems unperturbed by recent problematic disclosures by Politico into the Hillary Clinton Foundation, the former first lady and current democrat presidential hopeful will have a field day explaining why, as the NYT reported overnight, Hillary – in her role as Secretary of State – “exclusively used a personal email account to conduct government business” according to State Department officials in violation of “federal requirements that officials’ correspondence be retained as part of the agency’s record.”

Mrs. Clinton did not have a government email address during her four-year tenure at the State Department. Her aides took no actions to have her personal emails preserved on department servers at the time, as required by the Federal Records Act.

Why is this a deeply troubling breach of protocol, not to say a substantial threat to national security by America’s former top diplomat? For starter, using Hotmail or Aol instead of a protected, encrypted government address leaves little to the hacker’s imagination.  But what’s worse is that as a result of exclusive reliance on non-government platforms, which have no document retention policy and in fact have a “straight to trash” policy, any and all emails regarding the Benghazi scandal, many of which were FOIAed, could have been and were simply deleted without ever leaving a trace. Or as NSA Nate summarized:

Even the left-leaning NYT couldn’t find the appropriate damage control spin to an action that would lead many to question her common sense sensibilities as a future president:

Her expansive use of the private account was alarming to current and former National Archives and Records Administration officials and government watchdogs, who called it a serious breach.

 

“It is very difficult to conceive of a scenario — short of nuclear winter — where an agency would be justified in allowing its cabinet-level head officer to solely use a private email communications channel for the conduct of government business,” said Jason R. Baron, a lawyer at Drinker Biddle & Reath who is a former director of litigation at the National Archives and Records Administration.

In other words, nothing Clinton did for four years has a paper trail mandated of any and all other civil servants.

Under federal law, however, letters and emails written and received by federal officials, such as the secretary of state, are considered government records and are supposed to be retained so that congressional committees, historians and members of the news media can find them. There are exceptions to the law for certain classified and sensitive materials.

 

“I can recall no instance in my time at the National Archives when a high-ranking official at an executive branch agency solely used a personal email account for the transaction of government business,” said Mr. Baron, who worked at the agency from 2000 to 2013.

That, and the clear security threat:

Mr. Blanton said high-level officials should operate as President Obama does, emailing from a secure government account, with every record preserved for historical purposes.“Personal emails are not secure,” he said. “Senior officials should not be using them.”

But why this “deus ex” could not have come at a better time for the GOP: “Regulations from the National Archives and Records Administration at the time required that any emails sent or received from personal accounts be preserved as part of the agency’s records. As the NYT adds “others who, like Mrs. Clinton, are eyeing a candidacy for the White House are stressing a very different approach. Jeb Bush, who is seeking the Republican nomination for president, released a trove of emails in December from his eight years as governor of Florida.

Things get worse when looking at the initial response by the flailing Clinton camp, who said it was not her responsibility to keep a track of the emails: someone else would – after all for every email there is a sender and recipient:

Mr. Merrill, the spokesman for Mrs. Clinton, declined to detail why she had chosen to conduct State Department business from her personal account. He said that because Mrs. Clinton had been sending emails to other State Department officials at their government accounts, she had “every expectation they would be retained.” He did not address emails that Mrs. Clinton may have sent to foreign leaders, people in the private sector or government officials outside the State Department.

And this: “A spokesman for Mrs. Clinton, Nick Merrill, defended her use of the personal email account and said she has been complying with the “letter and spirit of the rules.””

Well, no. She failed to comply with rules in every possible form.

Finally, how was the deeply damaging discovery made?

The existence of Mrs. Clinton’s personal email account was discovered by a House committee investigating the attack on the American Consulate in Benghazi as it sought correspondence between Mrs. Clinton and her aides about the attack.

 

Two weeks ago, the State Department, after reviewing Mrs. Clinton’s emails, provided the committee with about 300 emails — amounting to roughly 900 pages — about the Benghazi attacks.

So surely she will release all the emails into the public domain now, especially with the Benghazi investigation still ongoing? Well no.

Mrs. Clinton and the committee declined to comment on the contents of the emails or whether they will be made public.

All of which begs the question: when third party citizens demanded FOIA production of Clinton’s emails, related to Benghazi or otherwise, such as Muckrock’s Jason Smathers here, just what was the Department of Homeland Security’s Privacy Office looking at when deciding it would deny said request?

It also explains why the DHS is so desperate for funding: otherwise, how will the massive government agency sort through non-existent emails to fabricate a reason why they can’t be produced in response to “Freedom of Information” requests?

 

end

 

The State of Illinois continues to have troubles with the highest fiscal state deficit.  It has the largest unfunded pension liability in the country.  Today, Chicago was downgraded to almost junk status.  Will it become the next Detroit?:

 

(courtesy Dave Kranzler/IRD)

 

 

Is Chicago The Next Enron?

Chicago nears fiscal free fall with latest downgrade

Is Chicago the next Detroit?  The State of Illinois has one of the largest, if not the largest, State fiscal deficits.  The public pension funds in Illinois is woefully underfunded – as it is in almost every State.   As it turns out, the municipality of Chicago may become the next Detroit, as Moody’s downgraded the Chicago to two notches away from junk status:

Chicago’s finances are already sagging under an unfunded pension liability Moody’s has pegged at $32 billion and that is equal to eight times the city’s operating revenue. The city has a $300 million structural deficit in its $3.53 billion operating budget and is required by an Illinois law to boost the 2016 contribution to its police and fire pension funds by $550 million.  LINK

I would like to point out here that it is likely that Chicago’s financial condition is FAR worse than the Baa2 rating given to it by Moody’s.   Moody’s after all had Enron rated triple-AAA until about a week before it blew up.  In other words, Moody’s ratings are essentially worthless.

Moody’s is also very likely under extreme pressure from Obama – and his side-kick Mayer Rahm Emanuel – to maintain Chicago at above investment grade.   Recall that as soon as S&P downgraded the U.S. Government’s credit rating, the Government began to go after S&P for violating financial regulations.   If Moody’s is consenting to a Baa2, Chicago’s true financial condition is likely the equivalent of the Fukushima nuclear disaster.

This one will be interesting to watch.  As the economy continues to slide into the abyss, all of the big cities and States that are sitting on the precipice of a financial catastrophe will be unable to avoid the inevitable unless the Fed/Treasury re-up QE.

 

 

end

 

 

 

(courtesy Dr Paul Craig Roberts/)

 

 

Putin Predicted Washington Would Employ Assassination Tactic Against Russia — Paul Craig Roberts

 

 

Putin Predicted Washington Would Employ Assassination Tactic Against Russia

Paul Craig Roberts

The Saker provides a one minute video with translation of Putin explaining two years ago the Russian government’s concern that an overseas entity would use a false flag assassination within Russia in order to create an “involuntary martyr” that the Western media would use to demonize Russia.
http://www.informationclearinghouse.info/article41124.htm

According to this report by The Saker, http://www.globalresearch.ca/the-boris-nemtsov-assassination-russias-non-system-opposition-refuses-to-blame-the-kremlin/5434206 , the Washington-financed Russian opposition has not, as Washington hoped it would, joined the Western anti-Putin media campaign. Possibly the Washington-financed Russian NGOs have wised up from observing events in Ukraine. In place of “more democracy,” they got a Washington stooge government squandering Ukraine’s last cent on a losing war.

The most likely explanation of Nemtsov’s murder is that the CIA decided, as Nemtsov was completely marginalized as an opposition politician with 5% as against Putin’s 85%, that Nemtsov was worth more dead than alive. But the ploy, if that is what it is, has not worked inside Russia.

Part of the circumstantial evidence that Nemtsov’s murder was a CIA tactic to destabilize Russia is the orchestrated US media. The New York Times, Washington Post, Wall Street Journal, NPR, and the rest of the presstitutes were ready on cue with reports insinuating that Putin was responsible. Stephen Lendman has done a good job tracking the US media’s unquestioning adherence to Washington’s propaganda line. http://sjlendman.blogspot.com

On February 28 NPR’s report consisted of a sound bite from a dissident Russian in exile who implied that Nemtsov was actually a rival to Putin with the population split between the two and that Putin eliminated his rival. No counterview to this abject nonsense was offered. At one time NPR was an alternative voice. Today NPR belongs to the Republican Party and the corporations whose advertising revenues are larger than listener donations.

If the Russian investigation discovers CIA involvement, the Russian government will keep it quiet. The audacity of Washington murdering a washed-up Russian politician in order to blame the Russian government bespeaks of war. Putin, unlike Washington, does not want war. If the culprit(s) is not found, it will look like a coverup. So someone has to be blamed. The Russian police have already suggested that possibly the key to the murder is the attractive young woman with Nemtsov when he was shot down. Nemtsov might have been trespassing on the property of a dangerous man, possibly a member of the Russian mafia.

Like everything else that happens, Americans will be given by the presstitutes an explanation that coincides with the interests of Washington. All who rely on the US media will never know why Nemtsov was murdered, or anything else for that matter.

 

 

end

 

 

 

We  will see you on Wednesday.

bye for now

Harvey,

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