March 25/ECB forbids Greek banks from buying Sovereign Gr. bonds/Yemen rebels heading to Aden/Saudi Arabia calls up troops to defend border/may cross/Central Bank of Brazil gives up supporting the Real/confidence falls to all time lows/Ukrainian bonds fall as rating agencies downgrade bonds/Ukraine has to default shortly to receive IMF 17.5 billion in new loans/Atlanta fed’s model for first qurter GDP now only 0.2%/GLD loses another 1.19 tonnes/SLV constant/


Good evening Ladies and Gentlemen:



Here are the following closes for gold and silver today:


Gold:  $1197.30 up $5.60 (comex closing time)

Silver: $16.98 up 1 cent (comex closing time)


In the access market 5:15 pm


Gold $1195.00 (options expiry tomorrow so the crooks are already whacking)

Silver: $16.95


Gold/silver trading:  see kitco charts on the 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 0 notices served for nil oz.  Silver comex registered 154 notices for 7700,000 oz .

Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 245.34 tonnes for a loss of 58 tonnes over that period. Lately the removals  have been rising!


In silver, the open interest fell by 1464 contracts, due to short covering, as Tuesday’s silver price was up by 9 cents. The total silver OI continues to remain extremely high with today’s reading at 172,659 contracts. The front month of March fell by 258 contracts to 346 contracts. We are still close to multi year high in the total OI complex despite a record low price. This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end.


We had  154 notices served upon for 770,000 oz.


In gold we again have a total collapse of OI as we enter the next active delivery month of April . The total comex gold OI rests tonight at 433,767 for a whopping loss 14,006 contracts. With June gold almost equal to April gold in price, it just does not sense why so many would liquidate their positions.Tomorrow is options expiry and you know what that entails.  Today, surprisingly we again had 0 notices served upon for nil oz.


Today, we had a withdrawal of 1.19 tonnes  at the GLD/  Gold Inventory rests at 743.21  tonnes


In silver, /SLV  we had no changes in silver inventory at the SLV/Inventory, at 325.323 million oz


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

1, Today we again had some short covering in the silver comex with the silver OI falling by 464 contracts.  Gold OI fell by a whopping 14,006 contracts.  Both gold and silver rose nicely today. Again we had 1,028.80 oz of gold leave the comex vaults.  (report Harvey)

2, DDay for Greece this coming Monday as they continue to drain cash. Today the ECB outlawed the purchase of sovereign bonds by the banks.


(zero hedge)

3. Yemen rebels heading straight for the strategic city of Aden, on the southern tip of the Red Sea. The President of Yemen having vacated the capital Sanaa two weeks ago has now fled the country this morning.


(zero hedge)


4. Saudi Arabian troops are heading to the border of Yemen (and may enter Yemen).   The Saudis are very fearful of the Iran backed Yemen rebels.


(Russia’s Sputnik)

5.The Central Bank of Brazil has stopped intervening in the support of the Brazilian real. They were trying to contain inflation but the intervention was too costly.  Confidence levels in Brazil at all time lows

(zero hedge)

6. The rating agencies have again lowered the rate on Ukrainian bonds and they are stating an obvious default looming shortly. They cite that Ukraine must find 15 billion dollars in restructuring in order to receive the new 17.5 billion IMF aid.



7. The Atlanta Fed model for growth in the first quarter GDP now down to 0.2%

(zero hedge)


we have these and other stories for you tonight


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 fell by a whopping 14,006 contracts from 447,773 down to 433,767 as gold was up by $3.70 yesterday (at the comex close). As I mentioned above, the complete collapse of OI as we enter an active delivery month makes no sense. We are now in the contract month of March which saw it’s OI surprisingly rise to 346 for a gain of 373 contracts. We had 0 notices filed upon on Tuesday so we gained 346 gold contracts or an additional 34,600 ounces will stand for delivery in this delivery month of March. Somebody must have been in great need of gold. The next big active delivery month is April and here the OI fell by 25,804 contracts down to 155,010.  We have 6 days before first day notice for the April gold contract month, on March 31.2015. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 178,525.  (Where on earth are the high frequency boys?). The confirmed volume on yesterday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 217153 contracts. Today we had 0 notices filed for nil oz.


And now for the wild silver comex results.  Silver OI fell by 1464 contracts from 174,123 down 172,659 despite the fact that silver was up with respect to Tuesday’s trading . We therefore again had some more short covering by our bankers. We are now in the active contract month of March and here the OI fell by 258 contracts rising to 346. We had 106 contracts served upon yesterday. Thus we lost 152 contracts or an additional 760,000 oz will not stand in this March delivery month. The estimated volume today was simply awful at 16,281 contracts  (just comex sales during regular business hours.  The confirmed volume on Tuesday (regular plus access market) came in at 45,145 contracts which is good in volume. We had 154 notices filed for 770,000 oz today.


March initial standings

March 25.2015





Withdrawals from Dealers Inventory in oz  nil
Withdrawals from Customer Inventory in oz  1028.80 oz (Manfra and Scotia)  32 kilobars
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz 835.90 oz (Delaware)
No of oz served (contracts) today 0 contracts (nil oz)
No of oz to be served (notices)  108 contracts (10,800 oz)
Total monthly oz gold served (contracts) so far this month 8 contracts(800 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month  114,790.651 oz

Total accumulative withdrawal of gold from the Customer inventory this month

 653,137.7 oz

Today, we had 0 dealer transaction

total Dealer withdrawals: nil oz

we had 0 dealer deposit

total dealer deposit: nil


we had 2 customer withdrawals


i) Out of Manfra:  32.15 oz  (1 kilobars)

ii) Out of Scotia:  996.65 oz (31 kilobars)

total customer withdrawal: 1,028.80  (32 kilobars)


we had 1 customer deposits:

i)_ Into Delaware:  835.90 oz   (26 kilobars)


total customer deposit:  835.90 oz

We had 0 adjustments



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 0 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 (8) x 100 oz  or  800 oz , to which we add the difference between the open interest for the front month of March (108) and the number of notices served upon today (0) 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 (8) x 100 oz  or ounces + {OI for the front month (481) – the number of  notices served upon today (0) x 100 oz} =  48,900 oz or  1.5209 tonnes


we  gained a huge 37,300 oz of additional gold standing for delivery.

Total dealer inventory: 658,537.414 oz or 20.48 tonnes

Total gold inventory (dealer and customer) = 7,887,779.813 million oz. (245.34) tonnes)

Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 59.0 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.







And now for silver




March silver initial standings

March 25 2015:





Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory 401,239.24 oz (Delaware, HSBC)
Deposits to the Dealer Inventory  nil
Deposits to the Customer Inventory  234,806.700 oz (Scotia)
No of oz served (contracts) 154 contracts  (770,000 oz)
No of oz to be served (notices) 498 contracts (2,490,000)
Total monthly oz silver served (contracts) 2303 contracts (11,515,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal  of silver from the Customer inventory this month  7,416,837.6 oz

Today, we had 0 deposits into the dealer account:


total dealer deposit: nil   oz


we had 0 dealer withdrawal:

total dealer withdrawal: nil oz


We had 1 customer deposits:

i) Into Scotia:   234.806.700 oz



total customer deposit: 234,806.700  oz


We had 2 customer withdrawals:


i) Out of HSBC:  400,248.09 oz

ii) Out of Delaware; 991.15 oz



total withdrawals;  401,239.24 oz


we had 0 adjustments:




Total dealer inventory: 70.569 million oz

Total of all silver inventory (dealer and customer) 175.180 million oz


The total number of notices filed today is represented by 154 contracts for 770,000 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 (2393) x 5,000 oz    = 11,515,000 oz to which we add the difference between the open interest for the front month of March (346) and the number of notices served upon today (154) x 5000 oz  equals the number of ounces standing.

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

2303 (notices served so far) + { OI for front month of March(346) -number of notices served upon today (154} x 5000 oz =  12,475,000 oz standing for the March contract month.

we lost an additional 760,000 oz of silver standing in this March delivery month.


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






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 25.2015 we had a withdrawal of 1.19 tonnes of gold from the GLD/Inventory at 743.21 tonnes


March 24/ no changes in gold inventory at the GLD/Inventory 744.40 tonnes


March 23/we had a huge withdrawal of 5.37 tonnes of gold from the GLD vaults/Inventory 744.40 tonnes

march 20/we had no changes in  inventory at the GLD/Inventory at 749.77 tonnes

March 19/we had no changes in inventory at the GLD/Inventory 749.77 tonnes

March 18/ we had a withdrawal of .9 tonnes of gold from the GLD/Inventory at 749.77 tonnes

March 17.2015: no change in gold inventory at the GLD/Inventory 750.67 tonnes

March 16/no change in gold inventory at the GLD/Inventory 750.67 tonnes





March 25/2015 /  we had a withdrawal of 1.19 tonnes of gold/Inventory at 743.21 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 : 743.21 tonnes.







And now for silver (SLV):


March 25.2015:no change in silver inventory/SLV inventory 325.323 million oz


March 24.2015/ we had another withdrawal of 835,000 oz of silver from the SLV/Inventory rests tonight at 325.323 million oz


March 23./we had a huge withdrawal of 1.174 million oz of silver from the SLV vaults/Inventory 326.158 million oz

March 20/ no changes in silver inventory/327.332 million oz

March 19/ no change in silver inventory/327.332 million oz

March 18/ no change in silver inventory/327.332 million oz

March 17/ no change in silver inventory/327.332 million oz

March 16/no change in silver inventory/327.332 million oz



March 25/2015 we had no changes in inventory/SLV inventory at 325.323 million oz






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  7.9% percent to NAV in usa funds and Negative 8.1% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 61.6%

Percentage of fund in silver:39.0%

cash .4%

( March 25/2015)


Sprott gold fund finally rising in NAV

2. Sprott silver fund (PSLV): Premium to NAV rises to + 1.31%!!!!! NAV (March 25/2015)

3. Sprott gold fund (PHYS): premium to NAV rises -.28% to NAV(March 25  /2015)

Note: Sprott silver trust back  into positive territory at +1.31%.

Sprott physical gold trust is back into negative territory at -.28%

Central fund of Canada’s is still in jail.





And now for your more important physical gold/silver stories:



Gold and silver trading early this morning


(courtesy Goldcore/Mark O’Byrne)




Global Risks To Irish Economy Being Ignored Again


Global Risks To Irish Economy Being Ignored Again

– Leading think tank forecasts strong economic growth in Ireland, ignores global risks
– Impact of Euro zone debt crisis and global geopolitical risk underestimated  
– Global macro-economic, systemic, geo-political and monetary risks largely ignored  
– Risk that lulls politicians, investors and people into false sense of security … again

Ireland’s leading economic think tank, the Economic and Social Research Institute(ESRI) has issued its latest quarterly report in which it forecasts that the strong economic performance in Ireland is set to continue.

It has forecast strong economic growth of 4.4% this year and a lower but still strong 3.7% next year. It says it expects unemployment in Ireland to drop below 10% this year for the first time since 2008 and as low as 8.4% next year.

The report said the economy is now growing so strongly that Ireland’s budget deficit could be virtually eliminated by next year – two years ahead ofschedule.

The economy was supported by the first growth in consumer spending since the start of the recession. Consumer spending grew by 1.1 per cent last year, and the think tank forecasts this to rise to 2 per cent this year.

However, the think tank does acknowledge that it will be constrained by the still very high levels of household and mortgage debt, by people prioritising debt repayment over consumption, and by the still falling level of consumer credit from Irish banks.

It says that while exports drove growth up until the middle of last year, domestic consumer spending started to play a stronger role in economic growth in the second half.

This is concerning given that the euro began plummeting against both the dollar and the pound during the middle of last year. This should have given exports a strong boost in the final quarter of 2014 and into 2015.

It highlights the export dependent nature of the Irish recovery and the risks posed by currency wars. The recent sharp fall in the euro should help exports. At the same time, the U.S. may be forced to maintain ultra loose monetary policies and competitive currency devaluations. The strong dollar is undermining U.S. exports. If this happens, it may have a negative impact on Irish exports and the growth that the ESRI expects.

We believe the report, which views Ireland’s economic performance as though it were independent of international considerations, is misguided. It assumes that there is a real, sustainable global economic recovery underway and if Irish politicians manage the economy correctly, Ireland will continue to recover from its economic collapse.

This is quite an assumption given the uncertain world of today and the fact that the Irish economy is a tiny, tiny fraction of the global economy.

It ignores many of the still significant global macroeconomic, systemic, geopolitical and monetary risks (MSGM) of today.

a) Macroeconomic risk is seen in the risk of recessions in major industrial nations with negative data emanating from the debt laden Eurozone, UK, Japan, China and U.S. recently.

The collapse in oil prices is a reflection of lack of demand for energy globally. Industry is buying less oil as economic activity is declining globally.

Issues with banks, a la Lehman Brothers, a major terrorist event or a another war in the Middle East or with Russia would badly impact fragile consumer, investor sentiment and western economies.

b) Systemic risk remains high as some of the major problems in the banking and financial system have not been addressed. There is a real risk of another ‘Lehman Brothers’ moment or a new ‘Grexit’ moment and the seizing up of the global financial system. The significant risk from the unregulated “shadow banking system” continues to be significantly underappreciated.

Global debt has ballooned more than 25% since the 2008 crisis which was itself a product of excessive debt. This dwarfs the growth in the global economy over the same period. The world is now in a deeper, though as yet
unacknowledged, debt-crisis than it was in 2008.

c) Geopolitical risks are elevated – particularly in the Middle East. This is seen in the serious developments in Syria and in the tensions between Iran and Israel. There is the real risk of conflict and consequent impact on oil prices and the global economy.  There are also simmering tensions between the U.S. and its western allies and China and particularly Russia.

d) Monetary risk is high as the policy response of major central banks to the first three risks continues to be ultra loose monetary policies, ZIRP, NIRP, the printing and electronic creation of a tsunami of currency and the debasement of currencies.

Should the macroeconomic, systemic, or geopolitical risks increase even further in the coming months than the central banks response will again be by monetary and further currency debasement which risks currency wars deepening. This risks the devaluation of all fiat currencies and serious inflation in the coming months and years.

That the ECB has begun a trillion euro QE program is clear evidence that the policies of the past seven years have not been effective and the Euro zone, bloated with unpayable debt like the rest of the developed world, risks economic stagnation and in a worst case scenario – economic and political contagion in the Euro zone.

Mario Draghi’s QE experiment and printing of EUR 1.1 billion is an act of desperation.

What catalyst triggers the next crisis is anyone’s guess? There are many options to choose from.

It remains prudent to remain aware of the risks and adopt a cautious approach with regard to personal finances and indeed the nation’s finances.


Ignoring the considerable risks in the mid 2000s led to the global financial crisis. It also led to significant pain being inflicted on those who had been lulled into a false sense of security by think tanks, politicians and assorted financial experts.

‘Forecasts’ and forecasting the future is an extremely difficult task. It is essential for planning but must be qualified and anchored in empirical data with an international context. It is important that major caveats and health warnings are included.

Latest ESRI forecast predicts strong GNP growth in 2015 and 2016

OUTLOOK 2015 – Uncertainty, Volatility, Currency Devaluations – DIVERSIFY



Today’s AM fix was USD 1,192.55, EUR 1,088.89  and GBP 801.18 per ounce.
Yesterday’s AM fix was USD 1,193.25, EUR 1,085.56  and GBP 798.96 per ounce.

Gold rose  0.26 percent or $3.10 and closed at $1,193.70 an ounce yesterday, while silver slipped 0.35 percent or $0.06 at $17.00 an ounce.

Gold inched downward after its five day rally, but hovered near its two and a half week high.

Gold in Dollars - 1 Year

Gold in Dollars – 1 Year

In Singapore, gold for immediate delivery pulled back 0.2 percent to $1,190.90 an ounce near the end of trading but was not far from a high of $1,195.30 hit in the prior session.

Yesterday, Fed policymaker James Bullard said that a first rate hike “sometime in the summer” would still leave monetary policy extremely accommodative, and that market expectations should be better aligned with those of the Fed considering the current “boom time” for the U.S. economy.

Positive economic data from the Eurozone strengthened the euro versus the dollar, and expectations for a U.S. interest rate rise is focused on later in the year. As ever, watch what the Fed’s actions rather than their daily ‘jawboning.’

Gold is at $1,192.58 per ounce or up 0.08 percent. Silver is $16.96 per ounce or plus 0.25 percent and platinum is at $1,143.25 per ounce or up 0.37 percent.

Gold in Euros - 1 Year

Gold in Euros – 1 Year

Spot gold at $1,200 per ounce remains a key psychological level for gold and a close above this level should see gold eke out further gains.

The European Central Bank banned Greek banks from increasing holdings of short-term government debt, as concerns grow that  they are nearly out of cash. Eurozone finance ministers will hold a call on Wednesday to discuss progress on Greece, amid concerns that the country will run out of money by early April.

A clash in the Ukraine amongst politicians was seen as Ukrainian President Petro Poroshenko accepted the resignation of Igor Kolomoisky, the billionaire governor of the strategic Dnipropetrovsk region who has clashed with authorities over the control of energy companies.Yesterday, in a vote that largely slid under the radar, the U.S. House of Representatives passed a resolution urging Obama to send lethal aid to Ukraine, providing offensive, not just “defensive” weapons to the Ukraine army – the same insolvent, hyperinflating Ukraine which, with a Caa3/CC credit rating, last week started preparations to issue sovereign debt with a U.S. guarantee.

The resolution passed with broad bipartisan support by a count of 348 to 48. The measure urges Obama to provide Ukraine with “lethal defensive weapon systems” that would better enable Ukraine to defend its territory from “the unprovoked and continuing aggression of the Russian Federation.”

Geopolitical risk remains very high and is not priced into “irrationally exuberant” markets.





A good study of all of the gold mints around the world.


(courtesy Koos Jansen)


Posted on 25 Mar 2015 by

The Largest Gold Mints Of The World

The most recent data available suggests the US Mint is currently the largest mint on the planet in terms of production output, having produced 4.54 tonnes of gold in Eagles and Buffalos year to date (January and February 2015).

The largest gold mints of the world are the Turkish State Mint, Chinese Mint, South African Mint, US Mint, Perth Mint (Australia), Royal Canadian Mint and Austrian Mint. Sales and production numbers of all these mints of 2014 has not been released, however, below is a chart displaying available data up until 2013.

All Mints 2002 - 2013

What is little known in the gold space is that the Turkish Mint is one of the biggest mints around. Because Turkish Ziynet coins are not widely sold outside of Turkey, the blogosphere is hardly taking note.  From 2002 until 2008 the Turkish Mint was by far the largest producer on earth, on average minting 49 tonnes of gold a year over this period. The US Mint ranked second, having produced 17 tonnes on average over the same period.

Turkish Republic Coin
Turkish Republic Coin

Since Lehman Brothers feel in 2008 mostly Western mints saw their market share grow, led by the US Mint, who overtook the Turkish Mint in 2009 by minting 56 tonnes of gold.

Gold Eagle Coin 2014 low res
American Eagle Coin

From 2011 the Turkish took back the lead at 59 tonnes, versus 35 tonnes at the US Mint. Extending first position in 2012 at 40 tonnes and in 2013 at a staggering 91 tonnes.

Though data from other mints is lagging, both the Turkish and US Mint publish production numbers every week. From these figures we know Turkish production has also been transcending that of the US in 2014 (by 19 tonnes) at 41 tonnes in total. However, year to date the US Mint has outpaced its Asian colleague by 0.95 tonnes at 4.54 tonnes.

Turkish vs US Mint 2002 - 2015 ytd

If we look at monthly data we see that after the price of gold made its famous nosedive in April 2103, the Turkish Mint stepped up its production output, before it shut down in August and September 2013, presumably as a result of supply issues.

Turkish vs US Mint monthly 2012 - 2015 ytd

Note, all coins produced by the Turkish Mint are 22 karat. For comparing them to other coins I calculated the fine content.

Koos Jansen
E-mail Koos Jansen on:







(courtesy Bill Holter/Miles Franklin)


 COMEX Gold COT’s.
Gold and silver probed their November 2014 lows early last week and finished strong.  From a chart standpoint, they both put in outside reversal weeks to the upside.  I’d like to visit the  current “setup” in gold and silver from several angles and then take a step back and look at them from a very broad view.
  The latest commitment of traders report, out this past Friday (and with data throughTuesday) shows a picture which has changed dramatically over the last few weeks.
-The large specs reduced long positions by 9,553 contracts and increased shorts by 19,246 contracts.
-The commercials increased longs by 25,886 contracts and reduced shorts by 6,966 contracts.

-The small specs reduced longs by 816 contracts and increased shorts by 3,237.
You will notice the giant movement in sales and even larger shorts put on by the large and small speculators.  The specs dumped over 1 million ounces and went short another 2.25 million ounces.  Totaling these, speculators altered their position by over 3.25 million ounces in just one week.  On the commercials side we saw the opposite.  They bought almost a net 2.6 million ounces and covered almost 700,000 short ounces for a net decrease of short exposure by about 3.3 million ounces.
  I point this out to you for several reasons with a couple of caveats.  The caveats being, COMEX is a playground where the charts are painted with paper brushes, very little metal actually changes hands and the total amount of gold claimed in inventory is less than China and India import in a month …EVERY month.  Another aspect is we don’t really know if these reported numbers are real.  How do we know this?  Because CME group told us so, over a year ago they basically said they cannot verify the numbers and rely on the individual reporting firms for data.  “Imperfect” to say the least.
  These are HUGE moves and their “size” tells me something is happening or going to if the numbers are real.  The sentiment shift has been huge with the specs confirming the negativity in the air.  I know of no other previous time where sentiment for gold and silver have ever been worse, including the major bottoms in 2001 and 2008.  Another reason to point this out is because even though we are not at all time record levels, the specs have not been less “long” nor the commercials less “short” since November of 2013, prior to this I believe was late 2008.
  While on the subject of COMEX, we have also noticed something else very strange.  February which is traditionally a very active delivery month, saw very little delivered even though open contracts just before first notice day were huge and outsized.  March on the other hand is a very small delivery month, yet HUGE amounts of gold have left their vaults in just the first three weeks.  I don’t know how to explain this other than to say, “someone wants or needs the gold”.
  We have also mentioned several times in the past that movements within the COMEX have been showing as “kilo” movements.  Much of what is being reported are “000” weights and divisible by 32.150.  COMEX threw us another curveball on Thursday when they began reporting a new “kilo gold” contract.  I had no idea this was even being contemplated and had not seen any news prior.  What’s quite interesting is in just two days they reported the inflow of close to 700,000 ounces of gold.  ALL of the gold came in as “eligible” and none as “registered”.  The other oddity is the fact the reporting DID show “.xxx” (numbers) as opposed to (“.000”) triple zeroes.  It appears kilo bars are moving within the 100 ounce category on COMEX while ounces are being moved in the kilo category.  COMEX now creating a kilo contract cannot easily be explained, this for me is a head scratcher and would love to hear theories on “why”?
  Switching gears, the biggest topics currently are Greece, Ukraine and the new AIIB bank in Asia.  I plan to write further about the AIIBtomorrow because the U.S. has been outflanked and has folded as even the IMF will now join.  Greece and Ukraine are two hotspots for very different reasons.
  Greece’s continued participation in the Eurozone is now being called a 50-50 proposition by none other than George Soros.  I look at it a little differently and put the odds far higher that Greece will exit unless someone can show me where exactly the money will come from?  Will Germany fold and give in to Greece’s WWII reparations demands?  I don’t know the answer to this but I do know it is THE only source of cash for Greece which comes with no “strings attached”.  By “strings” I mean money that will need to be paid back in the future.  I just do not see any viable way for Greece to remain solvent and stay in the Eurozone.  It is my opinion Greece will fall into Russian (and the East’s) arms.
  Speaking of Russian “arms”, though you may not be hearing much via mainstream media, the West/East saber rattling is frenzied like never before.  The Iranian nuclear talks have broken down and Russia has vowed to protect both Iran and Syria.  This at a time NATO has been sending troops and machinery within spitting distance to Russia’s borders.  There was also some muscle flexing with a test fire of an ICBM over the weekend and the “big ship” are now moving toward the Persian Gulf .
  Whether you see it or not, the U.S. has not “isolated” Russia as was the plan.  The U.S. has now succeeded in isolating ourselves, I will talk about this tomorrow.  China has attracted a long list of “charter members” for their international infrastructure banks which includes Britain, Germany, France, Italy and the IMF with Japan and Australia waiting in the wings.  Could our self imposed isolation be any more obvious!?  Regards,  Bill Holter
Bill Holter interviewed by Palisade Radio
(courtesy Palisade Radio/Bill Holter)
Fw: Palisade Radio interview: Bill Holter: China Will Flip the Switch on the Gold Price – 03/22/15
Bill Holter:

China Will Flip the Switch on the Gold Price
Once again we bring on a very popular guest, Mr. Bill Holter. Bill is very vocal on how corrupt governments and central banks are mismanaging (or outright destroying) the western economy, before our very eyes. Bill is also highly regarded for his investment knowledge, and thousands of investors follow his writing every week on It was great to get Bill on once again, and to get his comments on the new political developments from Asia.

Takeaways from this week’s interview with Bill Holter:● How the federal reserve has few options when dealing with the US economy moving forward● Real reasons behind quantitative easing explained● How China will trigger a huge shift in the gold market!● Implications of the new Chinese led Asian Infrastructure Investment Bank (AIIB) – a competitor to The World Bank….● The way Bill has structured his own gold portfolio

And now for the important paper stories for today:



Early Wednesday morning trading from Europe/Asia



1. Stocks generally mixed on major Chinese bourses ( India’s Sensex and Shanghai lower)/yen rises to 119.53

1b Chinese yuan vs USA dollar/yuan weakens to 6.2122

2 Nikkei up by 32.75 or .17%

3. Europe stocks all in the red/USA dollar index down to 96.74/Euro rises to 1.0986

3b Japan 10 year bond yield .32% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.53/

3c Nikkei still above 19,000

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

3e WTI  47.25  Brent 55.32

3f Gold up/Yen up

3gJapan 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.

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 up for Brent this morning.

3i European bond buying continues to push yields lower on all fronts in the EMU

Except Greece which sees its 2 year rate slightly falls to 19.74%/Greek stocks up by a huge 3.66%today/ still expect continual bank runs on Greek banks.

3j  Greek 10 year bond yield:  10.80% (down  by 60 basis point in yield)



3k Gold at 1195.00 dollars/silver $17.00

3l USA vs Russian rouble;  (Russian rouble up  7/8 rouble/dollar in value) 56.90 rising with the higher brent price

3m oil into the 47 dollar handle for WTI and 55 handle for Brent

3n Higher foreign deposits out of China sees hugh risk of outflows and a currency depreciation.  This scan spell financial disaster for the rest of the world/China may be forced to do QE!!

30  SNB (Swiss National Bank) still intervening again in the markets driving down the SF

3p Britain’s serious fraud squad investigating the Bank of England/ the British pound is suffering

3r the 7 year German bund still is  in negative territory/no doubt the ECB will have trouble meeting its quota of purchases and thus European QE will be a total failure.


3t Bloomberg calculates Greece’s shortfall in March at 3.5 billion euros.



4.  USA 10 year treasury bond at 1.86% early this morning. Thirty year rate well below 3% at 2.45%/yield curve flatten/foreshadowing recession.



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



Without Buyback Back Up, Futures Fail To Find Fizzle


After three days of unexpected market weakness without an apparent cause, especially since after 7 years of conditioning, the algos have been habituated to buy on both good and bad news, overnight futures are getting weary, and futures are barely up, at least before this morning’s transitory FX-driven stop hunt higher. Whether this is due to the previously noted “blackout period” for stock buybacks which started a few days ago and continues until the first week of May is unclear, but should the recent “dramatic” stock weakness persist, expect Bullard to once again flip flop and suggesting it is clearly time to hike rates, as long as the S&P does not drop more than 5%. In that case, QE4 is clearly warranted.

Asian stocks traded mixed overnight following a negative Wall Street close although newsflow remained light and markets quiet. The Nikkei 225 (+0.2%) overturned its early losses ahead of the close, while the Shanghai Comp (-0.8%) is poised to halt its longest streak of gains in 23yrs, weighed on by poor earnings from several large financial names. Elsewhere, the Hang Seng (+0.5%) was the session’s best performer lifted by China Mobile after the company announced a plan to cut its Capex this year by 6.5%.

Most major currencies steadied overnight against the USD after the index pared back some of yesterday’s post US CPI-inspired gains. NZD was the session’s laggard after NZ February trade balance data showed the widest deficit in more than 5yrs (12-Month YTD -2.18bln vs. Exp. -1.85bln) and weakness was also seen in AUD following the RBA Financial Stability Review which prompted markets to tweak expectations of a rate cut to 61% probability of a rate cut at the Apr. 7th meeting vs. 49% before the release. In other news, Brazil’s central bank announced it will not extend its FX intervention program past March 31st.

Newsflow and firm direction has been lacking in this morning’s European trade with equity markets trading mixed although the USD continues its downward trend. In overnight news reports suggested that the ECB are looking to make it illegal for lenders in Greece to add to their government debt pile by loading up on short-term debt, a move which could force the hand of Greece into a compromise with the Eurogroup in order to get continue to raise much needed cash. Headlines on Greece are also expected today as the ECB are believed to be planning a call today to assess emergency funding for Greek banks, however it is worth bearing in mind that Greece markets are closed today for a market holiday. EUR has failed to be negatively dented by overnight developments and the slide in the USD has supported the pair in earlier trade, which has also led to upside in other EUR crosses.

Fixed income markets have been pretty quiet this morning so far although German paper supported by some slight weakness in Equities. Gilts continue to outperform and have shrugged off overnight comments from BoE Deputy Governor Shafik (Soft Dove) who said the next move in rates is likely to be higher, however the BoE are still open to possible cuts in the future. Peripheral spreads are marginally wider this morning however there are no major standouts across the bloc.
Barclays Prelim Pan Euro Agg month-end extensions +0.07yrs (Prev. +0.07yrs, Avg. Of last 12 months +0.08yrs) Barclays Prelim month-end extensions for US Treasury +0.09yrs (Prev. +0.13yrs, Average of last 12 months +0.10yrs)

Crude futures have pared overnight weakness alongside an uptick in gold and silver prices, shrugging off the build shown by the API inventories yesterday which saw a build in oil stockpiles of 4.8mln vs. Prev. 10.5mln and ahead of the DoE inventories which are expected to show a build of 4.75mln for the headline.

In summary: European shares fall with the personal & household and food & beverage sectors underperforming and autos, basic resources outperforming. Euro strengthens as German business confidence rose for 5th month in March. European shares trading off session low. The French and Spanish markets are the worst-performing larger bourses, the Swedish the best. The euro is  stronger against the dollar. German 10yr bond yields fall; Japanese yields increase. Commodities little changed, with natural gas, nickel underperforming and Brent crude outperforming.  U.S. mortgage applications, durable goods orders, capital goods orders due later.

Market Wrap

  • S&P 500 futures up 0.1% to 2087.8
  • Stoxx 600 down 0.3% to 401.4
  • US 10Yr yield little changed at 1.87%
  • German 10Yr yield down 2bps to 0.22%
  • MSCI Asia Pacific up 0.2% to 149
  • Gold spot down 0.1% to $1192.1/oz
  • 45.8% of Stoxx 600 members gain, 50.3% decline
  • Eurostoxx 50 -0.4%, FTSE 100 +0.1%, CAC 40 -0.5%, DAX -0.2%, IBEX -0.3%, FTSEMIB -0.2%, SMI -0.2%
  • MSCI Asia Pacific up 0.2% to 149; Nikkei 225 up 0.2%, Hang Seng up 0.5%, Kospi up 0.1%, Shanghai Composite down 0.8%, ASX up 0.1%, Sensex down 0.2%
  • Heinz to Merge W/Kraft as Berkshire, 3G Invest $10 Billion
  • Hutchison to Buy U.K. Mobile Network O2 for $15.3 Billion
  • Airbus to Sell Additional Stake in Dassault Aviation
  • Euro up 0.27% to $1.0953
  • Dollar Index down 0.23% to 96.97
  • Italian 10Yr yield up 2bps to 1.34%
  • Spanish 10Yr yield up 2bps to 1.31%
  • French 10Yr yield down 1bps to 0.5%
  • S&P GSCI Index up 0.1% to 400.5
  • Brent Futures up 0.8% to $55.5/bbl, WTI Futures up 0.1% to $47.6/bbl
  • LME 3m Copper down 0.6% to $6109.5/MT
  • LME 3m Nickel down 1.1% to $13790/MT
  • Wheat futures little changed at 523.8 USd/bu

Bulletin Headline Summary From RanSquawk and Bloomberg

  • Reports suggest that the ECB are looking to make it illegal for lenders in Greece to add to their government debt pile by loading up on short-term debt, a move which could force the hand of Greece into a compromise with the Eurogroup in order to raise much needed cash
  • Otherwise markets have been quiet in early European trade although central bank speakers are due on the docket including Fed’s Evans and ECB’s Weidmann
  • Treasuries steady as week’s auctions continue with 2Y floaters and 5Y notes; latter yield 1.375% in WI trading vs. 1.48% award in February.
  • Yesterday’s$26b 2Y auction was awarded at 0.598% vs 0.602% WI bid at 1pm, according to Stone & McCarthy, with biggest direct award since June 2014 (18.3%)
  • The international economic architecture crafted by the U.S. after WWII faces its biggest shakeup yet as U.S. allies defy America to back China’s initiative to establish the Asian Infrastructure Development Bank
  • Germany’s Ifo institute business climate index advanced to 107.9, more than expected, from 106.8 in March
  • Brazil’s central bank scaled back its support for the real, ending sales of new foreign-exchange swaps that had swelled the government’s dollar liabilities
  • Lifting oil sanctions on Iran could hit global markets long before the nation starts pumping more crude as the OPEC member has been stockpiling oil onshore and in supertankers in the Persian Gulf, according to data compiled by Bloomberg
  • Forces loyal to Yemeni President Abdurabuh Mansur Hadi collapsed in the face of rebels, who advanced deeper in the south toward his stronghold in the port city of Aden
  • French helicopters searched for bodies and wreckage of the Airbus A320 that crashed in rugged terrain in the French Alps while en route to Germany from Spain.
  • Sovereign 10Y yields mixed. Asian stocks mixed, European stocks decline, U.S. equity-index futures rise. Crude, gold and copper lower



DB’s Jim Reid completes the overnight event summary



I noticed yesterday that a new series of cult 1990s TV program the “X-Files” is coming back to our screens. FBI agents Mulder and Scully used to investigate unexplained paranormal phenomena in a covert wing of the organization. Apparently their first case in the new series is on negative bond yields as in the original series back in the 1990s this was seen as too far fetched to use as a plot line!! On a serious note this was one of my favorite programs back in the day so I’m looking forward to a return of UFOs and Aliens.

Talking of spooky occurrences, yesterday saw the 25th day without the S&P 500 (-0.61%) experiencing consecutive gains. This is the longest such stretch since 2001. US equities are struggling for momentum in a post Fed QE, uncertain Fed rate outlook, strong dollar world. Having said that the dollar continues to be relatively weak post FOMC last week. Indeed, despite a +0.16% gain for the broader DXY yesterday, the index is down around 2.3% from the levels just prior to the FOMC statement release. Price action in the US yesterday was largely driven by the CPI numbers – which we’ll touch on shortly. Equity markets closed at their lows for the day while US Treasuries bounced as the curve flattened. 10y (-3.8bps) and 30y (-5.0bps) yields were lower at 1.873% and 2.464% respectively. The former is in fact now 37bps off the highs in yield of earlier this month. In the commodity complex, Gold (+0.31%) was higher for the fifth consecutive day, however oil markets were somewhat mixed with WTI (+0.13%) higher but Brent (-1.45%) declining.

With much of the global focus on the data yesterday and with UK YoY% headline inflation hitting zero for the first time since 1960, and likely to enter deflation soon for the first time in 55 years, we thought we’d show one of our favorite graphs that we often use in our long-term studies. This is UK inflation back 800 years. To make it easier to read (and more relevant) we’ve also repeated it from 1900. Indeed prior to 1900 deflation and inflation were broadly equal partners. In an era where money was linked to precious metals deflation was arguably the natural state as human ingenuity and productivity growth and a fixed supply of money encouraged prices to fall over time. The periods where overall prices picked up likely reflected discovery/introduction of new precious metals in circulation or a debasement (punching holes in coins was a tactic used by some governments). However post the twentieth century ties to precious metals periodically weakened and eventually broke completely in 1971 with the Bretton Woods system imploding. So the last century has been the century of inflation and fiat currencies. As we’re still in a world of fiat currencies it’s fairly remarkable that we’re still flirting with deflation in many countries and returning to levels more consistent with a fixed supply of money. On the contrary we have seen a huge amount of money printed in the last 6-7 years across the globe but not much inflation to show for it. Most of the QE has ended up pushing asset prices higher and has not really made it into the real economy. The transmission mechanism continues to be broken and for as long as it is then inflation will respond with a very low multiplier to QE. If the money printing seen so far had been used by Governments to directly finance real economy projects (e.g. infrastructure/ tax cuts) then we likely would have seen much higher inflation.

Staying with inflation, across the Atlantic yesterday, the modest beat in US CPI attracted most of the attention. The headline +0.2% mom print was enough to nudge the annual rate up to 0.0% yoy, which was ahead of both expectations (-0.1%) and up from the -0.1% yoy we saw in January. The core also saw a modest beat, with the +0.2% mom reading for February (+0.157% to be exact), a touch above expectations (+0.1%). It was enough to push the annualized reading up one-tenth to 1.7% yoy and in line with consensus.

Data elsewhere in the US was a mixed bag. New home sales (+7.8% mom vs. – 3.5% mom expected) were a considerable beat for February although the FHFA house price index showed a 0.4% drop to +0.3% mom, and below expectations of +0.5%. Manufacturing indicators were somewhat contrasting yesterday. The preliminary March manufacturing PMI (55.3 vs. 54.6 expected) came in ahead of market, however the Richmond Fed manufacturing index for March wasn’t quite so positive, with the -8 reading 8pts down from the February reading and well below expectations of a reading of 3. The print was in fact the lowest since January 2013. The St Louis Fed President, Bullard (a non-voter) meanwhile noted that unless market expectations for interest rates line up with the outlook of policy makers, then the market reaction could be ‘violent’ in the event of a surprise move by the Fed. Bullard did however say that, ‘given the extent of discussion about it, I’d be surprised if we get all the way to that juncture’ (Bloomberg).

Moving on, this morning we’ve published a note entitled “Credit left behind post-QE. Lessons from 2000?” where we look at how credit performance has been impacted by a ‘buy the rumour – sell the fact’ theme post QE starting. While the announcement (and the lead up) of government bond purchases by the ECB in January was generally greeted with strength in EUR credit, the start of the purchases on the 9th March has seen a more sober environment for the asset class. While Germany and French yields are around 12bps lower since QE started, the Peripherals are broadly flat, Euro IG credit yields are generally a handful of bps higher with HY up to 30bps weaker. So credit spreads have moved meaningfully.

Although we continue to think credit spreads will tighten this year given the need for yield and decent fundamentals we make comparisons in the note to the build up to the year 2000 where credit got hit by the all-time wides for swap spreads. This occurred when the market was pricing in a long period ahead of Government buy backs of debt. Indeed the US CBO was predicting that the entire US debt could be eliminated by 2013!! It’s amusing to think back to this prediction. The experience is a reminder that credit spreads are simply the relative supply/demand balance between the benchmark (say bunds) and credit. At the moment the former is seeing extreme demand relative to supply (like in 2000) and the later has seen high demand but is perhaps currently digesting record corporate supply.

While we think the extra yield story and decent fundamentals will be too compelling for investors to ignore given where Government bonds trade, it is a reminder of what spreads actually are. They are a relative not absolute measure. It’s not impossible to consider a scenario where credit remains well bid but that bunds see an even greater bid. If this is the case spreads will widen. Food for thought to test our positive spread view. See the full note in your inboxes within the last hour.

Wrapping up events from yesterday, better than expected PMI readings in Europe helped support a better day for risk assets in the region. The Stoxx 600 closed +0.31%, the DAX +0.92% and the CAC +0.67% while credit markets also firmed with Crossover 8bps tighter at the close. The better tone generally saw sovereign yields widen with 10y Bunds 1.2bps wider at 0.234% and yields in the periphery 3-5bps wider. In the UK, the FTSE 100 (-0.26%) was lower on the back of the inflation numbers, while the Pound fell 0.68% versus the Dollar to $1.485. Back to the data, preliminary March Euro-area PMI’s beat consensus with the manufacturing (51.9 vs. 51.5 expected), services (54.3 vs. 53.9 expected) and composite (54.1 vs. 53.6 expected) all supportive. The services and composite prints in particular were at the highest level since May 2011. On a regional basis, a 0.5pt fall in the composite reading for France to 51.7 (vs. 51.9 expected) was somewhat offset by a 1.5pt rise for Germany’s composite reading to 55.3 (vs. 55.0 expected).

Elsewhere, Greece was once again the subject of various headlines yesterday. Some of the attention appeared to come from a story on Reuters reporting that Greece is set to submit its list of reforms by next Monday at the latest. The same article suggests that the Greek government is set to run out of cash by April 20th, while the Eurogroup Chairman Dijsselbloem has asked the EFSF to review the Greek government’s case for the €1.2bn in funds left in the Greek bailout fund that was held back by the Eurozone last month. The release of these would clearly be a near term liquidity boost for the nation. Another report suggests that the ECB’s governing council has approved a decision to stop Greek banks increasing holdings of T-Bills. Greek equities (+3.66%) rallied yesterday for their third consecutive day of gains. The pressure has clearly been applied from the European side to force the Greek government to speed up its reform proposals, and with a Monday deadline potentially in the works, we could have greater clarity around where Greece goes from here over the coming week ahead.

Finally in Europe, Ukraine was yesterday downgraded by Moodys to Ca (from Caa3) and kept on negative outlook. The move comes following the Finance Minister Natalie Jaresko’s plea to restructure the country’s debt. Jaresko has urged for more financial aid for the economy, on top of the IMF aid already received earlier this month and with a potential default now looming large.

In terms of the early trading in Asia this morning, bourses are largely mixed with the Nikkei (-0.07%) and Shanghai Comp (-0.91%) lower, but the Hang Seng (+0.46%) and ASX (+0.07%) both trading firmer. The Dollar is softer with the DXY -0.12% as we type. Meanwhile, headlines that private equity firm 3G Capital are in advanced talks to buy Kraft Foods through its Heinz unit have caught our eye. The WSJ is reporting that a deal could be announced as soon as this week.

Moving onto today’s calendar, the March IFO survey for Germany will likely be the highlight this morning, while business and manufacturing confidence readings are also due for France. It’s a quieter calendar in the US meanwhile, with just durable and capital goods orders for February due. The Fed’s Evans is also due to speak today, specifically on economic and monetary policy so will be well worth keeping an eye on.






Today, the ECB stopped the circular move of Greek banks buying sovereign Greek bonds from the government as they put more pressure on  the ruling party. Deposit outflows continue at great speed.  food shortages are being noted and by the end of the week, 1.5 billion euros of salaries and pensions must be paid.  Greek newspapers suggest that this Monday is D-Day for Greece!


(courtesy zero hedge)



On Greek “Independence Day”, Creditors Prepare To Seal Athens’ Fate


With The ECB banning Greek banks from continuing the GGB-buying ponzi scheme, the banking system in deposit outflow panic, cash running extremely dry, food shortages building, and bond/loan payments looming,Greek celebrations of Independence Day today are likely tempered by European officials coin-tossing over the nation’s future (in or out of the EU). 196 years after winning their sovereignty from The Ottoman Empire, one wonders if The Greeks have the ability to fight their sovereignty back from “The Institutions.”

As Bloomberg reports, while inspectors are gauging the case for continuing financial support for Europe’s most-indebted nation, many Athenians will be watching a parade of battle tanks and fighter jets to mark the beginning in 1821 of the war that won independence from the Ottoman Empire.

Greeks celebrate their independence Wednesday with a military parade and a folk-music festival sponsored by the Ministry of Defense, as European officials more than 1,000 miles away review the financial aid that will shape their future.


Euro-area finance ministry officials will have a discussion on the progress of the country’s economic policy program.Without access to capital markets, or the ECB’s normal financing operations, Greek banks rely on almost 70 billion euros ($76 billion) of ELA to cover a financing shortfall exacerbated by steep deposit withdrawals… which The ECB just upped to EUR71bn.



The government of George Papandreou scaled down military parades to cut costs after the Greek debt crisis erupted in 2010. Fighter jets made a comeback to the skies of Athens last year at a cost of about 500,000 euros, according to a defense ministry official from the previous administration.


With government cash supplies running out and negotiations on financial aid only inching forwards, European officials have said that Greece could default on its obligations within weeks unless there’s a breakthrough.


The government has to pay about 1.5 billion euros of salaries and pensions by the end of March and Prime Minister Alexis Tsipras is at loggerheads with its creditors over the conditions attached to its emergency loans.


Revenue from taxes also missed budget targets by about 1 billion euros in the first two months of the year, the country’s Ministry of Finance said Tuesday, further depleting cash buffers.

*  *  *

As Keep Talking Greece reports, for the first time since 2011, Greeks celebrate Independence Day and enjoy the school students and military parades without barriers. The new Greek government decision to remove barriers and allow people to attend the parades at close range has a strong symbolism aiming to demonstrate that neither the government is afraid of protests nor the people feel the need to protest austerity.



Crowds were banned from coming close to parades and dignitaries, after angry anti-government and anti-austerity protesters had booed the President of the Republic Karolos Papoulias in Thessaloniki during the National Day parade in October 28th 2011.


After the parade, the President of the Republic, the Prime Minister and other dignitaries mingled with the people and showed that they were not afraid of the citizens, of angry crowds and anti-government demonstrators.




Police were there in “discrete presence” but certainly no riot police squads around.

*  *  *

Things appear to be gettng desperate as it is becoming increasingly clear there is very little cash in the Greek Banking system… ECB funding lines in February Here’s a timeline showing how the cap has gradually increased since Feb 5th when it was set at ~EU60b:

  •  Feb 5 Set at EU59.5b
  • Feb 12 Raised to EU65b
  • Feb 18 Raised to EU68.3b
  • Mar 5 Raised to EU68.8b
  • Mar 12 Raised by EU600m
  • Mar 18 Raised by EU400m
  • Mar 25 Raised to just over EU71b

All of which will be “Bailed In” courtesy of whatever depositors (and bondholders) are left after this ends and Th ECB grabs its cash back…

*  *  *

Perhaps, in the future, The Greeks will mourn “In Dependence” Day as opposed to celebrating “Independence” Day…





The following is not good.  Yemen rebels are heading for the strategic city of Aden which is on the southern most tip of Yemen.  It is very important for shipping.  The rebels are Shiite and thus the Sunni denominated Saudi Arabia are extremely worried…


early this morning


(courtesy zero hedge)



Armed With US Weapons, Yemen Rebels Advance On President As Saudi Arabia Prepares For War


Previously we reported that in the latest “coup” for US foreign policy, the US had “lost” over $500 million in weapons in Yemen, until recently an Obama’ foreign policy “success story”, following the abrupt evacuation of the US embassy there, all of which ended up in local rebel and al-Qaeda hands.


It didn’t take long for the local Houthi rebels to put all these weapons to good use: as Reuters reports, Houthi forces in Yemen backed by allied army units seized a key air base on Wednesday and appeared poised to capture the southern port of Aden from defenders loyal to President Abd-Rabbu Mansour Hadi, local residents said.

As a reminder this is the second time the Yemeni president, so close to Obama, will be forced to uproot and get out of Dodge, after his prompt “evacuation” from the capital Sanaa a month ago:

The Houthis and their military allies later advanced to within 40km (25 miles) of the city, where Hadi has been holed up since fleeing the group’s stronghold in the capital Sanaa last month.


Yemen’s slide toward civil war has made the country a crucial front in mostly Sunni Saudi Arabia’s rivalry with Iran, which Riyadh accuses of sowing sectarian strife through its support for the Houthis.


Sunni Arab monarchies around Yemen have condemned the Houthi takeover as a coup and have mooted a military intervention in favor of Hadi in recent days.

The situation in Yemen is “fluid” but not looking good for the status quo: in Aden, heavy traffic clogged Aden as parents brought schoolchildren home and public sector employees obeyed orders to leave work. Eyewitnesses said pro-Hadi militiamen and tribal gunmen were out in force throughout the city

This happens as the northern militia alongside army units loyal to Yemen’s powerful ex-president Ali Abdullah Saleh have driven back an array of tribal fighters, army units and southern separatist militiamen loyal to embattled president Hadi.


The Iranian-backed Houthi Shi’ite militants took control of Sanaa in September and seized the central city of Taiz at the weekend as they move closer to Aden.


Houthi leaders have said their advance is a revolution against Hadi and his corrupt government, and Iran has blessed their rise as part of an “Islamic awakening” in the region.


Yemeni officials denied reports that Hadi had fled Aden.

Next up: yet another regional civial war involving a regime that was until recently so very loyal to Obama: a war which many blame on the former administration:

While Hadi has vowed to check the Houthi push south and called for Arab military support, his reversals have multiplied since heavy fighting first broke out in south Yemen on Thursday and the Houthis began making rapid advances southward.


In Houta, storefronts were shuttered and residents reported hearing bursts of machine gun fire and the bodies of fighters from both sides lying in the streets. Eyewitnesses said Houthi fighters and allied soldiers largely bypassed the city center and traveled by dirt roads to the southern suburbs facing Aden.


While the battle is publicly being waged by the Shi’ite Muslim Houthi movement, many Adenis believe that the real instigator of the campaign is former president Ali Abdullah Saleh, a fierce critic of Hadi. It was Saleh who was the author of the city’s previous humiliation in 1994, when as president he crushed a southern secessionist uprising in a short but brutal war.

A body of army loyalists close to Saleh on Wednesday warned against any foreign interference, saying in a statement on Saleh’s party website that Yemen would confront such a move “with all its strength.”

Which is ironic because according to AP, what’s left of the government is now actually calling for its neighbors to invade the country to restore peace and stability!

And as a follow up Reuters reports, the Saudi are indeed preparing for what appears to be the next MENA war, by moving heavy military equipment including artillery to areas near its border with Yemen, U.S. officials said on Tuesday, raising the risk that the Middle East’s top oil power will be drawn into the worsening Yemeni conflict.

The slide toward war in Yemen has made the country a crucial front in Saudi Arabia’s region-wide rivalry with Iran,which Riyadh accuses of sowing sectarian strife through its support for the Houthis.

Just as Ukraine is a proxy war between Russia and the US, Yemen will be a proxy war between Iran and Saudi Arabia:

The conflict risks spiraling into a proxy war with Shi’ite Iran backing the Houthis, whose leaders adhere to the Zaydi sect of Shi’ite Islam, and Saudi Arabia and the other regional Sunni Muslim monarchies backing Hadi.

The armor and artillery being moved by Saudi Arabia could be used for offensive or defensive purposes, two U.S. government sources said. Two other U.S. officials said the build-up appeared to be defensive.


One U.S. government source described the size of the Saudi buildup on Yemen’s border as “significant” and said the Saudis could be preparing air strikes to defend Hadi if the Houthis attack his refuge in the southern seaport of Aden.


Another U.S. official, speaking on condition of anonymity, said Washington had acquired intelligence about the Saudi build-up. But there was no immediate word on the precise location near the border or the exact size of the force deployed.

As a result, the Saudis would reather shoot first, ask questions later:

Saudi Arabia faces the risk of the turmoil spilling across its porous 1,800 km (1,100 mile)-long border with Yemen and into its Shi’ite Eastern Province where the kingdom’s richest oil deposits lie.


“The Saudis are just really deeply concerned about what they see as an Iranian stronghold in a failed state along their border,” U.S. Ambassador to Yemen Matthew Tueller told Reuters on Monday at a conference hosted by the National U.S.-Arab Chamber of Commerce in Washington.


But a former senior U.S. official, speaking to Reuters on condition of anonymity, said the prospects for successful external intervention in Yemen appeared slim. He said Hadi’s prospects appeared to be worsening and that for now he was “pretty well pinned down.”

Slim or not, the countdown to another proxy war has begun. The biggest winner? These guys.

Then an update as the President fled the country altogether.  He originally fled from the capital Sinaa to reside in Aden.  Fearing the advancing rebels, he fled the country.:
 (courtesy zero hedge)

US-Armed Rebels Force Yemen President To Flee Country As Saudis Prepare For War



As The BBC reports,


Yemen’s President Abdrabbuh Mansour Hadi has fled his palace in Aden as Houthi rebels advance towards the city.


Gunfire could be heard around the city centre, and the rebels are reported to have seized the international airport.


On Wednesday morning, the Houthis moved to within 60km (37 miles) of the city after taking a key air base following fierce fighting with Hadi loyalists.


Government officials later said the president had been moved to a “secure location” but had not fled the country.

*  *  *




(courtesy Russia’s Sputnik)


Saudi Arabia readies for Possible Intervention in Yemen on Thursday


Saudi Arabia amassed heavy military equipment and artillery near its border with Yemen, showing signs of an impending military intervention. A formal go-ahead for the invasion might be given on Thursday by the Arab League.

As the conflict in Yemen escalates, US officials are saying that Saudi Arabia may be preparing airstrikes to defend Yemen’s embattled President Abd-Rabbu Mansour Hadi against advancing Houthi rebels, as it starts moving weapons to areas near its neighboring country’s border.

Speaking to Reuters on condition of anonymity, a US official said that Washington had acquired intelligence about Saudi’s mobilization of weapons, but declined to provide further details on location of said weapons or the exact size of the force being deployed.

Another US official referred to the move as “significant”, saying that the Saudis may be preparing air strikes to defend US-backed President Hadi in his southeastern refuge of Aden, where he fled to from Sanaa in February, as Shia Houthi rebels continue a southward advance in the country.

Tension has been rising in Yemen since the Houthis seized the capital city of Sanaa in September of last year and has escalated to near-civil war proportions when the rebels captured the central city of Taiz last weekend.

The conflict in Yemen additionally has a profound impact on Saudi Arabia’s regional politics, and readily lends itself to a proxy-war battlefield for rivaling Saudi Arabia and Iran. Furthermore, a Shia group’s advancement in Yemen would increase the perceived threat of Iranian influence moving into Saudi Arabia’s backyard.

Houthi Shia Yemenis chant slogans during a rally to show support for their comrades in Sanaa, Yemen.
Houthi Shia Yemenis chant slogans during a rally to show support for their comrades in Sanaa, Yemen.

“The Saudis are just really deeply concerned about what they see as an Iranian stronghold in a failed state along their borders.” US Ambassador to Yemen Matthew Tueller said to Reuters.

Hadi asked the United Nations Security Council on Tuesday authorize “willing countries that wish to help Yemen provide immediate support for the legitimate authority by all means and measures to protect Yemen and deter Houthi aggression.”

Hadi’s Foreign Minister, Riad Yassin, also enlisted the help of Gulf Cooperation Council (GCC) states. Speaking to Al Jazeera, he said that “arrangements are taking place”, but provided no additional details.

Saudi Foreign Minister, Saud Al-Faisal criticized the “aggression” of Houthi rebels and their allies, confirming that Gulf states will take “necessary measures” to counter it. He added, “We are prepared to accept all of President Hadi’s requests for the sake of the Yemeni people and their stability.”

The Arab League, set to meet in Sharm El-Sheikh in Egypt on Thursday, will discuss the crisis in Yemen and Hadi’s request for intervention.

While the prospect of military intervention remains murky, Saudi Arabia’s mobilization of weapons to the border and consultations with other GCC states seem to indicate a readiness on the part of Sunni monarchies to combat Shia influence in the region.

The most recent Saudi intervention was in March 2011 when, along with the United Arab Emirates, the country deployed troops in Bahrain to crack down on local Shia-led protesters. The Sunni Bahraini royal family requested the intervention, invoking a joint security clause in the GCC agreement, and citing concerns about Iranian involvement in the protests.

The Houthis have denied taking financial or material support from Iran, while US officials have noted that any Iranian involvement in Yemen is likely limited to funding as the Shia regional power is more heavily invested in Syria and Iraq conflicts.

Read more:




This is big news:   the central bank of Brazil has just announced defeat in their support of the Brazilian real.  The overvalued real has been keeping inflation somewhat subdued in this nation but that will now end.  Consumer confidence is at record lows as the entire global economy seizes:


(courtesy zero hedge)



Brazil Confidence Plummets To Record Low As Central Bank Admits Currency War Defeat


Four and a half years after Brazil’s FinMin Guido Mantega first re-introduced the world to the term “currency wars,” it appears the Brazilians have admitted defeat. Amid what Goldman calls a sharp decline in consumer confidence – to the lowest level in series history – which could also extend the ongoing macroeconomic adjustment processes and therefore delay the recovery of the economy; Brazil’s central bank has announced that it will no longer intervene to support the Real via its Dollar-Swap program. In a SNB2.0-esque move, though somewhat anticipated by the market, Brazil enables the devaluation that has occurred to perhaps extend (improving competitiveness) and removing what was becoming a notable fiscal drag. Implicitly, Brazil just followed the Swiss and admitted defeat in the global currency war…


As Goldman notes, according to the monthly FGV Index, consumer confidence (CC) posted a 2.9% mom sa decline in March, adding to the even larger 6.7% and 4.9% mom sa declines recorded in January and February. The overall consumer confidence index is now at its lowest level since the index started to be reported in September 2005. Furthermore, consumer confidence is currently 36% below the April 2012 peak and 28% below the average of the last five years.

The index measuring current conditions declined by a large 5.6% mom sa in March (adding to the 8.6% and 7.0% mom sa declines in Jan and Feb) and the index measuring expectations declined 1.4% mom sa (-6.2% and -4.2% mom sa in Jan and Feb). The two sub-indices are now below the levels sees during the 2008-09 global economic and financial crisis, and also at historical lows (for the series that started in September 2005).



Finally, as reported yesterday, business confidence in the industrial sector declined by a large 8.2% mom sa in March, adding to the 3.4% mom sa decline recorded in February, and is currently 28% below the January 2013 peak. The index measuring current conditions declined 9.0% mom sa in March and the index measuring expectations fell 7.2% mom sa.


Business and consumer confidence remains very depressed given the anticipation of policy tightening, rising inflation, rising taxes, rising interest rates, significant increases in utility and transportation tariffs, deteriorating labor market conditions, and more demanding credit conditions. This poses major headwinds for private consumption and overall activity in the coming months and indirectly contributes to erode overall governability conditions.


Very weak confidence indicators could also extend the ongoing macroeconomic adjustment processes and therefore delay the recovery of the economy.

*  *  *

As Bloomberg reports, the program, which began in 2013 as part of an effort to limit volatility, wasn’t enough to keep the Brazilian real from plunging 26 percent over the past year to the weakest level since 2003 this month. The swaps became a fiscal liability after growing to about $113 billion, according to Alberto Ramos, the chief Latin America economist for Goldman Sachs Group Inc.

Last year, the weekly total for foreign-exchange swaps shrank to $200 million.In 2015, the bank has offered only as much as $100 million a day in swap auctions. The real touched 3.3148 per dollar on March 20 and traded at 3.1395 on Tuesday.


While the swaps don’t change the supply of physical dollars in Brazil, they support the real by meeting demand from investors who want to hedge against the risk of the decline in the Brazilian currency. They also boost onshore dollar loan rates, encouraging commercial banks to bring the U.S. currency into Brazil to profit from the higher rates onshore.


“This is good not only because they’ll stop increasing their position, but because the daily auctions create more noise in the foreign-exchange market,”Roberto Padovani, chief economist at Votorantim Ctvm, said by phone from Sao Paulo. “They announce the auctions and there’s a lot of turbulence.”

And as Goldman concludes, this is a very welcome move and a step forward to facilitate the needed macroeconomic adjustment…

In our assessment, the Central Bank has intervened excessively in the FX market over the last 19 months, driving the outstanding stock of Dollar swaps to a very high US$113bn, and contributed in keeping the BRL over-valued for most of the period.



While an over-valued currency certainly helped to prevent inflation from escalating to an even higher level in recent years, it ultimately hurt the competitiveness of a number of tradable sectors in the economy and contributed to the significant widening of the current account deficit.


Barring further announcements, at the current pace of daily roll-over auctions the Central Bank seems bound to let roughly US$2.2bn of the swaps maturing April 1st expire (an amount that is broadly equivalent to the amount of new swaps placed throughout the month of March).


Ending the Dollar-swaps program was to some extent already anticipated by the market as in recent weeks the authorities have signaled not only comfort with BRL depreciationbut had expressed the view that the stock of Dollar hedge offered via the Dollar-swaps was already close to the level demanded by the market.


The swaps program was turning into an increasing fiscal liability.



Since September the swaps program generated heavy fiscal losses (via net interest-payment recorded in the fiscal balance) as the BRL/USD entered a rapid depreciation path; and the losses have likely accumulated further in February-March given additional BRL depreciation in the month.

As we concluded at the time of Manteca’s warning,

We feel sad for the central banks, who apparently don’t realize that in this war of attrition there are no losers, and the final outcome is the end of Keynesianism.We hope someone promptly discovers the FX equivalent of the nuke, and a global exchange occurs, as we, for one, can’t wait for this most destructive experiment in economic fundamentalism to end already.

*  *  *





Ukraine’s bond rating falls as the rating agency concludes that there must be a restructuring in order to receive the latest IMF loan.

Russia refuses to take part in this deal as they want their 3 billion dollars back that they loaned the Ukraine last week.


(courtesy Ed Adamczyk/UPI)


Ukraine’s bond rating falls as Russia refuses deal

At issue is how Ukraine will pay lenders expecting promised returns on bonds.
By Ed Adamczyk Follow @adamczyk_ed Contact the Author   |   March 25, 2015 at 3:26 PM
 KIEV, Ukraine, March 25 (UPI) — A downgrade in Ukraine’s bond-issuing rating coincides with a debt restructuring program and suggestions the country may soon default on its obligations.”Although negotiations over the specific details of restructuring are only now getting underway, Moody’s believes that the likelihood of a distressed exchange, and hence a default on government debt taking place is virtually 100 percent,” Moody’s Investor Services said Tuesday in announcing Ukraine’s downgrade from Caa3 status to Ca, the second-lowest grade and one grade above default.Finance Minister Natalie Jaresko said Ukraine had no alternative but to proceed with debt restructuring negotiations with creditors, and the implied understanding foreign private lenders will incur substantial losses instead of expected returns on the bonds they hold. Russia holds a $3 billion bond due for a December payment, and Moscow has repeatedly said it expects to be paid in full, noting it is not a private creditor and will not participate in negotiations.

She added the Kiev government must follow orders of a $15.3 billion debt restructuring program ordered in an International Monetary Fund rescue plan intended to provide $17.5 billion if Ukraine can meet its conditions.

“It is our hope that all of our sovereign bond holders will come to the table and try and find a sustainable solution to Ukraine’s debt problem. We hope for creditor negotiations to be very transparent, we don’t see any other opportunity or path right now.”

The military conflict in eastern Ukraine has plunged Ukraine into recession. Economic output declined by 15 percent in the last quarter of 2014 and is expected to fall another 11 percent in the first quarter of 2015. Its inflation rate currently stands at 28 percent.

Read more:

Read more:





This is interesting!!  Obama would rather have Europe do its dirty work with respect to Russia vs Ukraine.  Let us see how this plays out:



(courtesy zero hedge)



US House Votes 348-48 To Arm Ukraine, Russia Warns Lethal Aid Will “Explode The Whole Situation”


Yesterday, in a vote that largely slid under the radar, the House of Representatives passed a resolution urging Obama to send lethal aid to Ukraine, providing offensive, not just “defensive” weapons to the Ukraine army – the same insolvent, hyperinflating Ukraine which, with a Caa3/CC credit rating, last week started preparations to issue sovereign debt with a US guarantee, in essence making it a part of the United States (something the US previously did as a favor to Egypt before the Muslim Brotherhood puppet regime was swept from power by the local army).

The resolution passed with broad bipartisan support by a count of 348 to 48.

According to DW,  the measure urges Obama to provide Ukraine with “lethal defensive weapon systems” that would better enable Ukraine to defend its territory from “the unprovoked and continuing aggression of the Russian Federation.”

“Policy like this should not be partisan,” said House Democrat Eliot Engel, the lead sponsor of the resolution. “That is why we are rising today as Democrats and Republicans, really as Americans, to say enough is enough in Ukraine.”

Engel, a New York Democrat, has decided that he knows better than Europe what is the best option for Ukraine’s people – a Europe, and especially Germany, which has repeatedly said it rejects a push to give western arms to the Ukraine army, and warned that Russia under President Vladimir Putin has become “a clear threat to half century of American commitment to an investment in a Europe that is whole, free and at peace. A Europe where borders are not changed by force.

This war has left thousands of dead, tens of thousands wounded, a million displaced, and has begun to threaten the post-Cold War stability of Europe,” Engel said.

Odd, perhaps the US state department should have thought of that in a little over a year ago when Victoria Nuland was plotting how to most effectively put her puppet government in charge of Kiev and how to overthrow the lawfully elected president in a US-sponsored coup.

Then again, one glance at the Rep. Engel’s career donorsprovides some explanation for his tenacity to start another armed conflict and to escalate what he himself defines as a cold war into a warm one.


So what will Obama do? As a reminder, the president has been far more eager to sit this one out, and giving Europe the upper hand when it comes to the decision if and when to escalate the proxy civil war in Ukraine.  To be sure, the vote puts even more pressure on the Obama administration, which has repeatedly said it was considering providing lethal aid to Ukraine; it just never dared to actually pull the trigger. Several months ago, the Joint Chiefs of Staff chairman General Martin Dempsey said we would “absolutely consider” providing lethal aid, sentiments that were echoed by Defense Secretary Ashton Carter, who said that he was also “inclined” in that direction.

Obama’s options may be even more limited after NATO’s top military commander General Philip Breedlove said Sunday that the West should “consider all our tools” to assist Ukraine, including sending defensive weapons to areas held by pro-Russian rebels.

For now the president is delaying because according to the State Department, the White House is waiting to see whether the second Minsk ceasefire will hold before deciding whether to deliver lethal assistance.

Ironically, the biggest stumbling block ahead of an outright overture to World War III, may be Hillary Clinton herself. The former SecState, currently embroiled in an e-mail communication scandal, was recently revealed to have been a recipient of some very generous foreign donations into the Clinton foundation: donations where Ukraine was at the very top!


Considering last week’s news of a just as dangerous cold war being waged between Obama’s right hand (wo)man, Valerie Jarrett, and the Clintons, it is perhaps just as likely that Obama, whose foreign policy team is absolutely abysmal and whose offshore “achievements” can best be described as a disaster, is not eager to get involved in Ukraine not so much to avert the cold war with Russia to turn hot, but to make Hillary’s life difficult as she launches her challenge to Obama’s favorite populist Elizabeth Warren.

Then again, when it comes to calling the foreign shots, the US president is merely a figurehead, and the real decision-maker has always been the US military-industrial complex. So while Obama may stall sending weapons, he will ultimately get a tap on the shoulder from the gentle folks shown on the table below, who will soon demand something in exchange for their millions in lobby funding.

The prepackaged spin is already ready: “sending weapons to the Kiev government would not mean involvement in a new war for America”, claimed the abovementioned Eliot Engel who sponsored the document. “The people of Ukraine are not looking for American troops,” Engel said. “They are just looking for the weapons.

Beautiful. And if weapons the Ukraine wants, the US MIC will be delighted to provide them.

So the only question is how Russia will responds to this escalation: according to RT, “Washington’s decision to supply Ukraine with ammunition and weapons would“explode the whole situation” in eastern Ukraine and Russia would be forced to respond “appropriately,” Russia’s Deputy Foreign Minister Sergey Ryabkov said at the end of February.

“It would be a major blow to the Minsk agreements and would explode the whole situation,” TASS quoted Ryabkov as saying.

In other words, bullish for stocks – just think of the central-bank monetary paradrops that World War III would unleash.





A must see interview on the reasons for the new infrastructure bank initiated by China plus other goodies


(courtesy Greg Hunter/USAWatchdog/Alasdair Macleod)





We Are All Trapped-Alasdair Macleod


By Greg Hunter’s  

Finance and economic expert Alasdair Macleod sees a fragile global economy with many ways to crash.  Macleod starts in Europe with the euro currency, “We are looking at a currency which, at any moment, triggered by Greece or triggered by a butterfly in the jungle, could begin to unravel.  I actually think the lack of any history behind the euro is probably the worst thing that it has.  People can go off the euro incredibly quickly. . . . That is one area where it could happen. . . . Look what’s going on in Japan.  They are printing money, and its hyperinflation.  It is monetary hyperinflation which, at some stage, is going to be price hyperinflation.  It’s only a matter of time. . . .  I can’t find what’s good in the world.  China is going to try to tackle a credit bubble.  I have never known a government to tackle a credit bubble and succeed in managing it. . . . That is an accident waiting to happen.  Coming back to America, last year, the Federal Reserve laid out how it was going to raise interest rates.  That’s a complete joke.  They can’t do it.  We are all trapped, and it’s not going to take very much to change the valuations in the markets, and the effect on the gold price could happen at the same time, and it could be very, very dramatic.”

On the Asian Infrastructure Investment Bank (AIIB), Macleod says, “The reason this bank is being set up is twofold.  First, China . . . wants to build the largest internal market the world has ever seen.  It will run roughly from the Genghis Kahn’s Straits of Bering to the gates of Jerusalem.  We are talking over half of the world’s population once India joins in this. . . . From America’s point of view, she is losing a huge sphere of influence. . . . We then come over to Europe and you got NATO.  The importance of the AIIB is that NATO’s members’ commercial logic is driving policy a lot more than political logic.  So, even though they are all members of NATO, they are all deserting the ship as far as America is concerned by signing up to join the AIIB.  So, what we have is this new bank which is specifically set up to finance huge infrastructure projects in Asia, and we could be talking about upwards of $25 trillion worth of infrastructure spending.  This is enormous. . . . This is happening outside the control of America, and that is what is upsetting America.”   Will this undermine the U.S. dollar?  Macleod, who is also the top researcher for, contends, “Yes, in a sense, but it is part of multiple processes which, actually, collectively undermine the dollar.  This is just the latest in a chain of things that has been planned for an awful long time.”

In terms of the prices of gold, Macleod says, “The whole thing is mispriced.  We’ve been emptying our vaults, and the whole thing is going over to China. . . . The sentiment in the West for gold is so negative, but this is not unusual.  We see this in all markets.  Look at the reverse of it.  We had the dotcom bubble back in 2000.  The prices of the tech companies were absolutely ridiculous. That is a valuation extreme.  I reckon, in the case of gold, we have the opposite valuation extreme, and it coincides with valuation extremes of super optimism in bond yields and stock markets and high end property and all the rest of it.”

When will the Chinese make their next big move?   Macleod says, “Their style is not to go in and disrupt markets.  They act very, very quietly.  You would hardly know they are there.  This is certainly how they have handled their acquisition of gold.  I don’t think they would want to be blamed for destabilizing western capital markets.  What could happen is if we set a chain of events going that would lead to our own demise, then the Chinese would protect themselves.  There is so little gold left in western vaults now . . .  anything that changes the really sunny outlook for bonds equities and all the rest of it . . . and for people to realize that people don’t have any gold, that could drive the price sharply higher because there is not enough gold for us to buy.  The stocks are very, very low, and anybody who comes into the market is going to have to bid it up to get it.”   Join Greg Hunter as he goes One-one-One with Alasdair Macleod of

(There is much more in the in-depth video interview.)








Early this morning WTI initially falls after huge increase in inventories for the 11th straight week:


(courtesy zero hedge)


WTI Tumbles After Crude Inventories Rise For 11th Straight Week – Longest Streak On Record


Crude prices rallied this morning – on the back of absolutely nothing – ahead of this morning’s DOE inventory/production data. Following last night’s bigger than expected 4.8 mm barrel API inventory build, DOE reports a huge 8.17mm barrel build (against expectations of a 4.91mm build) – the 11th consecutive week and longest streak on record. Cushing inventories rose for the 16th consecutive week, up 1.91mm barrels (against a 2.1mm barrel build expectation). Crude production hit a new record high. Oil prices are giving back this morning’s gains…


11th week in a row… a record


As Total Inventories hits a new record high…


And production hits a new record high…


And Crude gives back this morning’s hope-filled rally


Charts: Blooomberg




Then the contango tumbles which causes WTI crude to rise to the 49 dollar handle:


(courtesy zero hedge)



Contango Tumbles To 2-Month Lows As WTI Crude Melts Up Above $49


Fifth ramp in 5 days takes WTI crude back above $49 for the first time in 2 weeks… on the heels of record production, record streak of inventory builds, and record inventory at Cushing. The 1Y spread has compressed to 2-month lows…


WTI melts up…


Contango at 2-month lows…


as the whole curve flattens…



Charts: Nanex and Bloomberg



Your more important currency crosses early Wednesday morning:



Euro/USA 1.0986 up .0082

USA/JAPAN YEN 119.53 down .251

GBP/USA 1.4909 up .0075

USA/CAN 1.2502 down .0007

This morning in Europe, the Euro continued on its upward movement, rising by 82 basis points, trading now well above the 1.09 level at 1.0986; Europe is still reacting to deflation, announcements of massive stimulation,crumbling bourses and the ramifications of a default at the Austrian Hypo bank, and a possible default of 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 25 basis points and trading well below the 120 level to 119.53 yen to the dollar. (and again causing havoc to our yen carry traders)

The pound was up this morning as it now trades just above the 1.49 level at 1.4909  (very worried about the health of Barclay’s Bank and the FX/precious metals criminal investigation/Dec 12 a new separate criminal investigation on gold, silver and oil manipulation).

The Canadian dollar is also up by 7 basis points at 1.2502 to the dollar trading in total sympathy to  the temporary higher oil price.

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

2, the Nikkei average vs gold carry trade (still ongoing)

3. Short Swiss franc/long assets (European housing/Nikkei etc.  This has partly blown up (see  Hypo bank failure)

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: Monday morning : up 32.75 points or 0.17%

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

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

Gold very early morning trading: $1195.00



Early Wednesday morning USA 10 year bond yield: 1.86% !!! down 1 in basis points from Tuesday night/


USA dollar index early Wednesday morning: 96.74  down 50 cents from Tuesday’s close. (Resistance will be at a DXY of 100)


This ends the early morning numbers, Wednesday morning



And now for your closing numbers for Wednesday:




Closing Portuguese 10 year bond yield: 1.81% up 1 in basis points from Tuesday  (despite QE???)


Closing Japanese 10 year bond yield: .33% !!! up 2 in basis points from Tuesday/


Your closing Spanish 10 year government bond,  Wednesday par in basis points in yield from Tuesday night.(despite QE)

Spanish 10 year bond yield: 1.29% !!!!!!


Your Wednesday closing Italian 10 year bond yield: 1.34% up 1 in basis points from Tuesday: (despite QE)



trading 5 basis points higher than  Spain.






Closing currency crosses for Wednesday night/USA dollar index/USA 10 yr bond: 4 pm



Euro/USA: 1.0963 up .0059  (up 59 basis points)

USA/Japan: 119.50 down .287  ( yen up 29 basis points and killing more of our yen carry traders)

Great Britain/USA: 1.4868 up .0035  (up 35 basis points)

USA/Canada: 1.2518 up .0009 (Can dollar down 9 basis points)



The euro rose quite a bit today to the tune of 59 basis points up to 1.0963. The yen was up in the afternoon, and it was up by closing to the tune of 29 basis points and closing well below the 120 cross at 119.50. The British pound gained more  ground, 35 basis points, closing at 1.4868. The Canadian dollar was down today against the dollar. It closed at 1.2518 to the USA dollar despite the higher oil price.

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 and huge losses on the USA dollar will no doubt produce many dead bodies.








Your closing 10 yr USA bond yield: 1.92 up 5 in basis points from Tuesday



Your closing USA dollar index:

96.94 down 30 cents   on the day.


European and Dow Jones stock index closes:



England FTSE  down 28.71 points or 0.41%

Paris CAC down 67.29 or 1.32%

German Dax down 140.37 or 1.17%

Spain’s Ibex down 114.60 or 0.99%

Italian FTSE-MIB down 188.10 or 0.81%



The Dow: down 292.60 or 0.58%

Nasdaq; down 116.18 or 2.33%



OIL: WTI 48.88 !!!!!!!

Brent: 56.21!!!!

Closing USA/Russian rouble cross: 57.32  up 1/2 rouble per dollar on the day.







And now your important USA stories:


First New York trading today:



Biotech Bloodbath Sparks Selling Scramble In Stocks


Author’s impression of today’s stock market…


Post-FOMC, everything’s not looking so awesome…


Small Caps were the biggest lower on the day, followed by Nasdaq, Trannies and The Dow & S&P… but the drop was very uniform…


and started as the cash markets opened…


The Dow has fallen back into the Red YTD and the S&P is close…


Financials are now down 2% from before Yellen…


Biotechs Baumgartner’d… down over 12% from the highs 3 days ago – the biggest such slide since April 2014


and back into the red for March…


Apple’s worst day in 2 months…


The US Dollar leaked lower again…


And Treasury yields surged higher after a weak 5Y auction…


Stocks starting to catch down to credit?


Commodities were broadly higher…


But Saudi/Yemen shenanigans trumped massive over-supply and sent crude prices soaring…


Copper popped and dropped on CODELCO mine shutdown news…


Oddly, another day of horrible data but this time “Bad news” was not good news…

What caused this carnage? Who knows… but this is awkwardly coincidental

Charts: Bloomberg

Bonus Tweet:





Another big miss, this time durable goods:


(courtesy zero hedge)


Durable Goods Orders Drop And Miss In Worst Run Since Lehman



For the 3rd of the last 4 months, Durable Goods Orders fell and missed expectations (the worst run since Lehman). A 1.4% drop (against expectations of a 0.2% rise) is made worse by downward revisions of the last month’s modest bounce. Across the board the numbers are a disaster – Ex-Trans fell 0.4%, Ex-defense fell 1%, Capital Goods Shipments fell 1.4% with capital goods ex-air dropping a stunning 7.6% YoY. Paging negative Q1 GDP print expectations…



  • *U.S. FEBRUARY DURABLES ORDERS FALL 1.4%; EX-TRANS. DROP 0.4% (both big misses)
  • *JANUARY DURABLE GOODS ORDERS RISE 2%, REVISED FROM 2.8% GAIN (major downward revision)

New orders fell for Computer products, fabricated metals, machinery, transportation, motor vehicle, and a dramatic plunge in non-defense aircraft new orders andeven larger (33.1%) collapse in defense aircraft orders.

*   *   *

Just one thing… the “Field of Dreams” economy continues with motor vehicle inventories up 9.7% YoY… a sustained inventory build did not end well last time…


*  *  *

Here is the slowmotion reversion of the US back to yet another recession, unless QE4 comes in in the last moment, as usual, and prevents the long overdue business cycle from re=emerging: the annual increase in Durables went form 4.7% to 0.6%. Next month we go negative.


The trend in Durables ex-Transports is just as bad:


Finally, who could have possibly imagined that with oil “half off” (still, with the China hard landing now raging), CapEx would be on the verge of going negative.


Expect massive layoffs on this “synergy” move:


(courtesy zero hedge)





Thousands Of Layoffs Coming After Buffett Merges Heinz With Kraft, Creating 5th Largest Food Company In The World



Another day, another mega-M&A deal taking advantage of abnormally low bond rates, this time however not involving biotechs or a specialty pharma seeking to purchase a debt-free balance sheet, but one involving the Oracle of Omaha himself, and his Heinz investment, which will merge with Kraft Foods whose market cap was over $40 billion this morning on the news of the merger, and create the third largest food and beverage company in the US, and 5th largest in  the world.

And while the resulting company will certainly be an unprecedented food giant, one which leaves the US food industry even more concentrated, here is the rationale behind the deal and the punchline for American workers: “significant synergy opportunities.” Translation:thousands of layoffs imminent.

Details from the press release:

H.J. Heinz Company And Kraft Foods Group Sign Definitive Merger Agreement To Form The Kraft Heinz Company Combination Creates Unparalleled Portfolio of Powerful and Iconic Brands

  • Merger will create the 3rd largest food and beverage company in North America and the 5th largest food and beverage company in the world.
  • Combined company to be named The Kraft Heinz Company and to be co-headquartered in Pittsburgh and the Chicago area.
  • The new company will have revenues of approximately $28 billion with eight $1+ billion brands and five brands between $500 million-$1 billion.
  • Stock and cash transaction, with Kraft shareholders to receive a special cash dividend of $16.50 per share upon closing and stock in the combined company representing a 49% stake in the new company.
  • Berkshire Hathaway and 3G Capital will invest an additional $10 billion in The Kraft Heinz Company; existing Heinz shareholders will collectively own 51% of the new company.
  • Significant synergy opportunities with strong platform for organic growth in North America, as well as global expansion, by combining Kraft’s brands with Heinz’s international platform.
  • The Kraft Heinz Company is fully committed to maintaining an investment grade rating; Company plans to maintain Kraft’s current dividend per share, which is expected to increase over time

Full press release:

— H.J. Heinz Company and Kraft Foods Group, Inc. (NASDAQ: KRFT) today announced that they have entered into a definitive merger agreement to create The Kraft Heinz Company, forming the third largest food and beverage company in North America with an unparalleled portfolio of iconic brands.

Under the terms of the agreement, which has been unanimously approved by both Heinz and Kraft’s Boards of Directors, Kraft shareholders will own a 49% stake in the combined company, and current Heinz shareholders will own 51% on a fully diluted basis. Kraft shareholders will receive stock in the combined company and a special cash dividend of $16.50 per share. The aggregate special dividend payment of approximately $10 billion is being fully funded by an equity contribution by Berkshire Hathaway and 3G Capital.

The proposed merger creates substantial value for Kraft shareholders. The special cash dividend payment represents 27% of Kraft’s closing price as of March 24, 2015. Also, by continuing to own shares of the new combined company, Kraft shareholders will have the opportunity to participate in the new company’s long-term value creation potential.

Global Brand Portfolio Powerhouse

The combination of these iconic food companies joins together two portfolios of beloved brands, including Heinz, Kraft, Oscar Mayer, Ore-Ida and Philadelphia. Together the new company will have eight $1+ billion brands and five brands between $500 million and $1 billion. The complementary nature of the two brand portfolios presents substantial opportunity for synergies, which will result in increased investments in marketing and innovation.

Alex Behring, Chairman of Heinz and the Managing Partner at 3G Capital, said, “By bringing together these two iconic companies through this transaction, we are creating a strong platform for both U.S. and international growth. Our combined brands and businesses mean increased scale and relevance both in the U.S. and internationally. We have the utmost respect for the Kraft business and its employees, and greatly look forward to working together as we integrate the two companies.”

Warren Buffett, Chairman and CEO of Berkshire Hathaway said, “I am delighted to play a part in bringing these two winning companies and their iconic brands together. This is my kind of transaction, uniting two world-class organizations and delivering shareholder value. I’m excited by the opportunities for what this new combined organization will achieve.”

“Together we will have some of the most respected, recognized and storied brands in the global food industry, and together we will create an even brighter future,” saidJohn Cahill, Kraft Chairman and Chief Executive Officer. “This combination offers significant cash value to our shareholders and the opportunity to be investors in a company very well positioned for growth, especially outside the United States, as we bring Kraft’s iconic brands to international markets. We look forward to uniting with Heinz in what will be an exciting new chapter ahead.”

“We are thrilled about the unique opportunities this merger will create for our consumers worldwide, as well as our employees and business partners. Together, Heinz and Kraft will be able to achieve rapid expansion while delivering the quality, brands and products that our consumers love,” said Bernardo Hees, Heinz Chief Executive Officer. “Over the past two years, we have transformed Heinz into one of the most efficient and profitable food companies in the world while reinvesting behind our key brands and continuing our relentless commitment to quality and innovation.”

Management and Governance

When the transaction closes, Alex Behring, Chairman of Heinz and the Managing Partner at 3G Capital, will become the Chairman of The Kraft Heinz Company. John Cahill, Kraft Chairman and Chief Executive Officer, will become Vice Chairman and chair of a newly formed operations and strategy committee of the Board of Directors.

Bernardo Hees, Chief Executive Officer of Heinz, will be appointed Chief Executive Officer of The Kraft Heinz Company. The new executive team for the combined global company will be announced during the transition period, but no later than transaction closing.

The Board of Directors of the combined company will consist of five members appointed by the current Kraft Board, as well as the current Heinz Board, including three members from Berkshire Hathaway and three members from 3G Capital.

Long-Term Ownership

3G Capital and its principals have a proven track record of investing in and growing iconic brands. In previous transactions over the years, 3G has partnered with other long-term investors to build significant shareholder value by driving innovation and growth and expanding the international reach of its companies and brands.

Berkshire Hathaway and 3G Capital have a history of successful partnerships and are committed to long-term ownership of The Kraft Heinz Company as it strengthens its leadership position in the industry.

Commitment to Communities

The Kraft Heinz Company will be co-headquartered inPittsburgh and the Chicago area.

Understanding the need to preserve both Heinz and Kraft’s heritage in their respective hometowns of Pittsburgh and the Chicago area, the new company is committed to supporting local charities and community relationships in the communities in which they operate.

Structure, Terms and Synergies

Existing Heinz shareholders will have a 51% ownership stake in the combined company, and existing Kraft shareholders will have a 49% ownership stake on a fully diluted basis. Each share of Kraft will be converted into one share of The Kraft Heinz Company.

The significant synergy potential includes an estimated$1.5 billion in annual cost savings implemented by the end of 2017. Synergies will come from the increased scale of the new organization, the sharing of best practices and cost reductions.

The transaction is expected to be EPS accretive by 2017. Once the transaction is complete, The Kraft Heinz Company plans to maintain Kraft’s current dividend per share, which is expected to increase over time. Kraft has no plans to change its dividend prior to closing.

The special cash dividend of $10 billion in the aggregate to existing Kraft shareholders will be paid upon closing and will be funded by an equity investment by Berkshire Hathaway and 3G Capital. Shares of the company will continue to be publicly traded.

As the cash consideration is fully funded by common equity from Berkshire Hathaway and 3G Capital, the merger is not expected to increase the debt levels of The Kraft Heinz Company. The Company is fully committed to deleveraging in a timely manner and to maintaining an investment grade rating going forward.


The transaction is subject to approval by Kraft shareholders, receipt of regulatory approvals and other customary closing conditions and is expected to close in the second half of 2015.


Lazard served as exclusive financial advisor for Heinz, and Cravath, Swaine & Moore and Kirkland and Ellis acted as legal advisors.

Centerview Partners LLC served as exclusive financial advisor for Kraft, and Sullivan & Cromwell acted as legal advisor.





The high frequency boys are going to be regulated? No, this cannot be so!!!!



(courtesy zero hedge)



Is This What’s Causing Today’s Market Puke?


orrelation is not causation but the plunge began just asThe SEC voted in favor of high-speed trading firms being registered with FINRA…


Regulate Us? We’ll show you what happens when you do that…


As MarketWatch reports,

The Securities and Exchange Commission on Wednesday voted to propose a rule that would force high-speed trading firms to register.


Such high-speed trading firms, when they conduct business only for their own accounts, are currently exempt from registration with the Financial Industry Regulatory Authority.


The rule that allows this exemption hasn’t been substantively amended since 1983, the SEC says. The Michael Lewis book “Flash Boys” has brought more scrutiny on high-frequency trading.

*  *  *

The proposal will

ensure that all broker-dealers active in the off-exchange market, not just some as it is today, are subject to the same comprehensive set of SRO regulations and compete on a level playing field,

SEC Chairman Mary Jo White said.



The Atlanta Fed model for growth for the first quarter GDP is now only .2%:


(courtesy zero hedge)




Fed Now Sees Only 0.2% GDP Growth In Q1


From almost 2.5% GDP growth expectations in February, The Atlanta Fed’s GDPNow model has now collapsed its estimates of Q1 GDP growth to just 0.2%plunging from +1.4% just 2 weeks ago. The reality of plunging capex and no decoupling is starting to rear its ugly head in the hard data and as the sun warms things up, weather will start to lose its ability to sway sentiment. While sell-side consensus has dropped(Goldman, Morgan Stanley, and Barclays all cut today following Durable goods), it remains unable to quite accept the reality of massively weaker than expected macro data evident everywhere (except in the soft-survey PMI data).


March 3rd… +1.2%


March 12th… cut in half to +0.6%


March 18th… another 50% cut in growth to a mere +0.3%


And now.. March 25th… Q1 GDP growth forecast drops to just +0.2%


On the bright side – at least he still has a job and hasn’t been moved to more important things.

As The Atlanta Fed explains…

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2015 was 0.2 percent on March 25, down from 0.3 percent on March 17.

Following this morning’s advance report on durable goods manufacturing from the U.S. Census Bureau, the nowcasts for real equipment investment and real inventory investment declined slightly.


And that decline is only getting started…


*  *  *




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