April 6/Friday’s job report lousy/Goldman Sachs now reports that rate hikes are now put off for a while/gold and silver rise/Greece ready to nationalize their banks/Huge gold demand for the last week of March in China to the tune of 46 tonnes/

Good evening Ladies and Gentlemen:

 

 

Here are the following closes for gold and silver today:

 

 

Gold:  $1218.60 up $17.10 (comex closing time)

Silver: $17.10 up 41 cents (comex closing time)

 

In the access market 5:15 pm

 

Gold $1214.50

Silver: $16.96

 

 

 

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

Expect the banker crooks to attack gold/silver tomorrow as they hate to see two advances in precious metals on consecutive day and we are very close to upper resistance  (for gold at $1224 and silver at $17.40

 

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

 

At the gold comex today,  we surprisingly had a poor delivery day, registering 3 notices served for 300 oz.  Silver comex registered 0 notices for nil oz .

 

Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 244.16 tonnes for a loss of 59 tonnes over that period. Lately the removals  have been rising!

 

 

end

 

In silver, the open interest fell by a large 3506 contracts, as Thursday’s silver price was down by 39 cents. The total silver OI continues to remain extremely high with today’s reading at 168,215 contracts. The front April month has an OI of 179 contracts for a loss of 1 contract.   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 0 notices served upon for nil oz.

 

 

In gold the collapse of OI continues. The total comex gold OI rests tonight at 382,278 for another loss of 4,986 contracts as  gold was down $7.20 on Thursday.  We had 3 notices served upon for 300 oz.

 

 

Today, we had no changes in gold inventory   at the GLD/  Gold Inventory rests at 737.24  tonnes

 

In silver, / the SLV/Inventory /we have a small withdrawal of 136,000  oz and thus the inventory tonight is 321.839 million oz

 

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

 

1, Today we had the open interest in silver fall appreciably with the 39 cent drop in price on Thursday.  The OI for gold surprisingly fell by a huge 4986 contracts as the price of gold fell on Thursday ($7.20). Also we will report on both the gold COT and silver COT released at 3;30 pm today.

(report Harvey/)

2. Gold demand into China equals 46 tonnes of gold during the last weekly reporting

(Koos Jansen)

 

3. USA jobs report lousy/people not in the labour force rises again.

(zero hedge, Dave Kranzler, IRD/)

 

 

4. Reports that Greece will exit the Euro and then nationalize their banks

(zero hedge)

5. To further inflame Germany, Greece calculates what they are owed in reparations  Germany is not enthralled

(courtesy zero hedge)

6.Goldman Sachs states that with the latest jobs report that the Fed will put its hiking of interest rates on hold.  This propelled gold.

(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 another whopping 4,986 contracts from 387,264 down to 382,278 as gold was down by $7.20 on Thursday (at the comex close).  We are now in the active delivery month of April and here the OI fell by 1708 contracts down to 3,087. We had 667 contracts filed upon on Thursday so we lost another 1041 contracts or 104,100 oz will not stand for delivery in April. The next non active delivery month is May and here the OI rose by 33 contracts up to 690.  The next big active delivery contract month is June and here the OI fell by 2,961 contracts down to 259,437. June is the second biggest delivery month on the comex gold calender. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 58,932  (Where on earth are the high frequency boys?). The confirmed volume on Thursday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 123,186 contracts. Today we had 3 notices filed for 300 oz.

And now for the wild silver comex results.  Silver OI fell by 3506 contracts from 171,721 down to 168,215 as silver was down by 39 cents, with respect to Thursday’s trading . We are now in the non active delivery month of April and here the OI fell to 179 for a loss of 1 contract.  We had 0 notice filed on Thursday so we we neither lost nor gained any silver contracts standing for delivery in April. The next big active delivery month is May and here the OI dropped by 4,571 contracts down to 94,185 The estimated volume today was poor at 13,788 contracts  (just comex sales during regular business hours. The confirmed volume yesterday  (regular plus access market) came in at 44,713 contracts which is good in volume. We had 1 notice filed for 5,000 oz today.

 

 

April initial standings

April 6.2015

Gold

Ounces

Withdrawals from Dealers Inventory in oz  nil
Withdrawals from Customer Inventory in oz  nil oz
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz nil
No of oz served (contracts) today 3 contracts (300 oz)
No of oz to be served (notices)   4128 contracts(412,800) oz
Total monthly oz gold served (contracts) so far this month 674 contracts(67,400 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   oz

Total accumulative withdrawal of gold from the Customer inventory this month

  163,579.2 oz

Today, we had 0 dealer transaction

total Dealer withdrawals: nil oz

 

 

we had 0 dealer deposits

 

total dealer deposit: nil oz

 

we had 0 customer withdrawals

total customer withdrawal: nil

 

we had 0 customer deposit:

 

total customer deposit: nil oz

 

We had 0 adjustments

 

 

Today, 0 notices was issued from JPMorgan dealer account and 600 notices were issued from their client or customer account. The total of all issuance by all participants equates to 3 contract 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 (674) x 100 oz  or  67,400 oz , to which we add the difference between the open interest for the front month of April (3087) and the number of notices served upon today (3) x 100 oz equals the number of ounces standing.

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

No of notices served so far (674) x 100 oz  or ounces + {OI for the front month (3087) – the number of  notices served upon today (3) x 100 oz which equals 375,500 oz or 11.679 tonnes of gold.

 

we lost 1041 contracts or 104,100 oz of gold that will not stand for delivery in April

 

 

 

 

Total dealer inventory: 647,270.900 or 20.13 tonnes

Total gold inventory (dealer and customer) = 7,849,806.094  oz. (244.16) 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.

 

 

end

 

 

And now for silver

April silver initial standings

April 6 2015:

Silver

Ounces

Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory 205,424.110 oz (Scotia, CNT)
Deposits to the Dealer Inventory  nil
Deposits to the Customer Inventory nil
No of oz served (contracts) 0 contracts  (nil oz)
No of oz to be served (notices) 179 contracts(895,000 oz)
Total monthly oz silver served (contracts) 1 contracts (5,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal  of silver from the Customer inventory this month  586,230.1 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 0 customer deposits:

total customer deposits:  nil  oz

 

We had 2 customer withdrawals:

 

i) Out of CNT:  5,191.410 oz

ii) Out of Scotia:  200,232.700 oz

 

total withdrawals;  205,424.110 oz

 

we had 1 adjustments: and it was a doozy!!!!!

 

Out of CNT:

7,104,910.93o oz was adjusted out of the dealer at CNT into the customer account of CNT  ( in tonnage:  220 tonnes)

something is going on with respect to silver!!

 

 

Total dealer inventory: 63.192 million oz

Total of all silver inventory (dealer and customer) 176.287 million oz

.

The total number of notices filed today is represented by 0 contract for nil oz. To calculate the number of silver ounces that will stand for delivery in April, we take the total number of notices filed for the month so far at (1) x 5,000 oz    = 5,000 oz to which we add the difference between the open interest for the front month of April (179) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing.

 

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

 

 

1 (notices served so far) + { OI for front month of April(179) -number of notices served upon today (0} x 5000 oz =  900,000 oz standing for the April contract month.

we neither lost nor gained any silver ounces standing.

 

 

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

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

 

 

end

 

 

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

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

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

i) demand from paper gold shareholders

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

vs no sellers of GLD paper.

 

 

And now the Gold inventory at the GLD:

 

 

April 6. no changes in gold inventory at the GLD/Inventory at 737.24 tonnes

April 2/no changes in gold inventory at the GLD/Inventory at 737.24 tonnes

April 1/2015/ no changes in gold inventory at the GLD/Inventory at 737.24 tonnes

march 31.2015/ no changes in gold inventory at the GLD/Inventory at 737.24 tonnes

March 30/no changes in gold inventory at the GLD/Inventory at 737.24 tonnes.

March 27/no changes in gold inventory at the GLD/Inventory at 737.24 tonnes

March 26 we had another huge withdrawal of 5.97 tonnes of gold.  This gold is heading straight to the vaults of Shanghai, China/GLD inventory 737.24 tonnes

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

 

 

 

April 6/2015 /  we had no changes in  gold/Inventory at 737.24 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 : 737.24 tonnes.

 

 

end

 

 

And now for silver (SLV):

 

April 6. we had a small withdrawal of 136,000 oz/inventory tonight rests at 321.839 million oz

 

April 2/2015: no changes in inventory/SLV inventory rests this weekend at 321.975 million oz

April 1.2015: we had a huge withdrawal of 1.913 million oz of silver from the SLV vaults/Inventory 321.975 million oz

March 31.2015: no changes in inventory at the SLV/Inventory at 323.88 million oz

March 30.2015: no changes in inventory at the SLV/inventory at 323.888 million oz.

March 27. we had a huge withdrawal of 1.439 million oz leave the SLV/Inventory rests this weekend at 323.888 million oz

March 26.2015; no change in silver inventory/SLV inventory 325.323 million oz

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

 

 

 

April 6/2015 we had a small change (withdrawal) in inventory at the SLV of 136,000 oz/ inventory rests at 321.839 million oz

 

 

end

 

 

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

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

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

1. Central Fund of Canada: traded at Negative  8.1% percent to NAV in usa funds and Negative 7.8% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 60.9%

Percentage of fund in silver:38.7%

cash .4%

 

( April 6/2015)

 

Sprott gold fund finally rising in NAV

2. Sprott silver fund (PSLV): Premium to NAV rises to + 0.32%!!!!! NAV (April 6/2015)

3. Sprott gold fund (PHYS): premium to NAV rises -.36% to NAV(April 6/2015

Note: Sprott silver trust back  into positive territory at +0.32%.

Sprott physical gold trust is back into negative territory at -.36%

Central fund of Canada’s is still in jail.

 

 

end

 

Normally we get the COT report on Friday but due to the holiday it was released today.

Let us see the gold COT:

 

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
172,818 92,799 37,572 144,197 225,312 354,587 355,683
Change from Prior Reporting Period
4,584 -21,154 -14,618 -33,861 -5,671 -43,895 -41,443
Traders
135 87 78 49 51 220 187
 
Small Speculators  
Long Short Open Interest  
32,998 31,902 387,585  
-2,287 -4,739 -46,182  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, March 31, 2015

end

 

Our large specs:

My goodness!!

Those large specs that have been long in gold saw the light and added a huge 4584 contracts to their long side.

Those large specs that have been short in gold covered a monstrous 21,154 contracts from their short side as they were squeezed

 

Our commercials:

Those commercials that have been long in gold liquidated 33,861 contracts from their long side.

Those commercials that were short in gold covered 5671 contracts from their short side.

Our small specs:

Those small specs that have been long in gold pitched 2287 contracts from their long side.

Those small specs that have been short in gold covered a huge 4739 contracts from their short side.

Conclusion: I have never seen anything like this with respect to the commercials.

 

end

 

And now for the silver COT: (quite a difference between the gold COT and silver COT)

 

 

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
65,426 22,314 21,968 63,225 113,086
3,094 -7,895 -829 -4,051 6,568
Traders
85 40 46 37 48
Small Speculators Open Interest Total
Long Short 170,105 Long Short
19,486 12,737 150,619 157,368
-768 -398 -2,554 -1,786 -2,156
non reportable positions Positions as of: 139 120
Tuesday, March 31, 2015

Our large speculators:

Those large specs that have been long in silver added another 3094 contracts to their long side.

Those large specs that have been short in silver covered a huge 7895 contracts.

Our commercials;

Those commercials that have been long in silver pitched a huge 4051 contracts from their long side.

Those commercials that have been short in silver added a huge 6568 contracts to their short side.

Our small specs;

Those small specs that have been long in silver pitched a tiny 768 contracts to their long side

Those small specs that have been short in silver covered a tiny 398 contracts from their short side.

Conclusions; in the commercials are wrong, they are in serious problems in silver.

 

end

 

 

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

 

Gold and silver trading early this morning

 

(courtesy Goldcore/Mark O’Byrne)

off today.

 

end

 

James Turk is interviewed by Eric King and they discuss the inevitable default of Greece;

 

(courtesy Kingworldnews/Eric King/James Turk)

ECB will expropriate Greek bank deposits, Turks tells KWN

Section:

9a ET Friday, April 3, 2015

Dear Friend of GATA and Gold:

The European Central Bank will expropriate deposits in Greek banks to recover the loans the bank has made to the Greek government, GoldMoney founder and GATA consultant James Turk tells King World News today. An excerpt from the interview is posted at the KWN blog here:

http://kingworldnews.com/man-who-remarkably-first-predicted-ecb-would-st…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

 

 

end

 

Gold demand in China for the week ended March 27 amounted to 46 tonnes of gold.  Year to date:  607 tonnes and a lot higher than Koos had predicted last month. At this  rate, gold demanded for the year will be in excess of 2400 tonnes.  The world ex China ex Russia produces on an annual basis 2200 tonnes of gold.  Also remember that this demand (equals withdrawals of gold from SGE) excludes sovereign purchases.

 

(courtesy Koos Jansen)

 

Posted on 4 Apr 2015 by

Thoughts On The Price Of Gold

Withdrawals from the Shanghai Gold exchange (SGE), which equal Chinese wholesale gold demand, in week 12 (March 23 – 27) accounted for 46 tonnes, down 14.5 % w/w. Year to date total withdrawals have reached 610 tonnes, up 9 % from 2014, up 33 % from 2013.

Screen Shot 2015-04-03 at 11.23.15 AM
Blue (本周交割量) is weekly gold withdrawn from the vaults in Kg, green (累计交割量) is the total YTD.

Shanghai Gold Exchange SGE withdrawals delivery only 2014 - 2015 week 12

Shanghai Gold Exchange SGE withdrawals delivery 2015 week 12 dips

Ever wondered why Chinese demand doesn’t move the price of gold substantially higher? A much perceived analysis in the gold space is that (central) banks suppress the price of gold. While it certainly is in their interest to control the price of gold and there are many clues they do intervene, in this post I would like to approach this subject from scratch, from what I believe is basic economics, hopefully sparking debate.

Thoughts On The Price Of Gold

In any market where goods are traded there is supply and demand. For this post we’ll look at the gold market to examine the relationship between both; there can be people offering gold for sale (supply), meeting people who are willing to buy gold (demand). If a transaction is agreed at a certain price the amount of gold sold (supply) is always equal to the amount of gold bought (demand), it’s impossible supply and demand are not equal by any measure – or one would use different metrics to measure either one.

When demand increases relative to supply (economic agents are willing to buy more gold at prevailing prices), the strength of demand will transcend the strength of supply. As a result the price of gold will rise until a new market equilibrium is found. The volume of gold bought in itself does not indicate the price will rise, for if an immense flood of supply would be unleashed that is being met by equally strong demand the price of gold will not change. No matter how much gold is sold, it won’t tell us anything about the strength of demand relative to supply, only the price can tell. The price unveils the forces of supply relative to demand.

In the graph below we can see how an increment in demand relative to supply can move the price.

Supply Demand curves

  • P – price
  • Q – quantity of good
  • S – supply
  • D – demand

In this example demand increases from Q1 to Q2, while supply remains constant; the price moves up from P1 to P2 for a new market equilibrium.

Technically, if India buys (or imports) 4,000 tonnes a year this doesn’t necessarily mean demand is strong, nor does it mean the price will go up or would have gone up in the process. If supply to India was stronger than demand from India, the price can go down while thousands of tonnes cross the globe (given India has no domestic mine production).

The gold market is quite unique and cannot be compared to other markets, like the potato market. The primary difference lays in the fact that gold can’t be consumed, as it doesn’t corrode all gold is immortal and can be recycled indefinitely. We humans can lose gold, but it can’t vanish. Therefor, all gold mined is added to the total above ground stock. In contrast, potatoes have a limited life span of itself and when eaten are digested. Yearly supply and demand of potatoes is determined by what is produced versus human trends that set our need for consumption.

Gold supply, on the other hand, is less determined by mining output, as this is effectively only a small percentage of the total above ground stock. It’s estimated yearly mining output is 1.6 % of the total above ground stock. I doubt whether this number is accurate, though, for this post the accuracy of this percentage is not important. In theory the total above ground stock is potential supply at the right price. The willingness of owners of gold to sell largely depends on the “category of existence of the gold”. Yearly mining output is likely to be sold no matter what the price is; bullion can be sensitive to price movements to be sold; gold from redundant cellphones is stripped and sold before the chips become actual waste, ancient gold artifacts are likely never to be sold; etc. Furthermore, no one is ever forced to sell – though exceptions by government confiscation have occurred in history. In short, the volume of yearly supply is hard to predict, but for sure it’s more than mining output.

Additionally, many other aspects determine the volume of supply and demand (the price). To name a few: technical analysis, monetary circumstances, inflation, the strength of alternate currencies, industrial applications and supply and demand data (for example, if China buys 2,000 tonnes of gold per annum, but analysts worldwide state – for whatever reason – the Chinese buy 1,000 tonnes, this leads to distortion of sentiment as the market will react on false assumptions).

Two other major components that influence the price are gold derivatives – futures, options, forwards and unallocated gold – and the London Gold Fix. Derivatives are leveraged a multitude of physical supply and demand volumes and therefor have an equally greater impact on the price and sentiment, especially in the near term. In derivative markets the price of gold can be easily moved up or down to the likes of big traders.

Terry Smeeton of the Bank Of England stated at the Australian Gold Conference in March of 1994 (from Frank Veneroso’s Gold Book 1998):

…at least 20 central banks are engaged in swaps, options and futures. This is double the number of banks who were regular players a few years ago.  

CME Group, the world’s biggest derivatives marketplace located in the US, launched a program in July 2013 to incentivize central banks outside the US to trade in a number of products, a few of which are Metals Futures Contracts traded on CME Globex, by offering them a special discount (click here to read the details from CME Group). I would be surprised if central banks don’t trade gold futures at this moment.

The London Gold Fix is set twice a day in the London gold market through an electronic, auction-based platform, at which currently seven bullion banks participate. The auction has been under scrutiny as its opaque nature is vulnerable for manipulation.

Gold Fix Chart

It should be noted that the volume of gold traded in the London OTC gold market is unknown, but estimated to be a few times the size of the futures market in New York (the COMEX).

Derivatives can be used by bullion banks and central banks to influence the price, subsequently influencing technical analysis and sentiment on which the rest of the market reacts. People can be scared to sell, however, when the price in the paper markets (derivatives) moves up or down, no physical owner of gold is forced to sell at the paper prices. If the paper price goes down and physical demand increases this has to be met by equal physical supply, that is, if the price for physical gold follows the paper price. If the physical price disconnects from the paper price, premiums will appear at one location.

Reality Check

In 2013 the price of gold made a spectacular nosedive, which was followed by an even more impressive exodus of physical gold from Western vaults to China. The UK net exported 1,424 tonnes of bullion, China net imported 1,507 tonnes.

Screen Shot 2015-04-02 at 9.56.46 PM
BulionStar charts

According to my textbooks the drop in price and the physical moving east was a stronger force of supply than demand. We could quantify Chinese demand as “strong”, but supply was stronger. From the World Gold Council, Gold Demand Trends Q2 2014:

The rapid 25% drop in the gold price during the April-June period of 2013 sparked a leap in gold demand that we have heard described as a ‘once in a generation’ event.

My point being, if central banks suppress the price of gold, this can only be done if physical gold is supplied to the market. So the question is, who is currently selling gold to China? (Or in the free market since the London Gold Pool collapsed in 1968.)

China is the largest miner of gold at 450 tonnes a year, though to satisfy domestic demand additional gold is imported; in 2013 Chinese net import exploded to 1,507 tonnes, my estimate for 2014 is at least 1,250 tonnes and year to date China has imported well over 400 tonnes. Is this sold by institutional investors in London (the LBMA system) or by central banks? Eventually time will tell. In the meantime I will continue to research how much gold is flowing to Asia and if there is any gold left in Fort Knox (read this and this post for my Fort Knox research).

Koos Jansen
E-mail Koos Jansen on: koos.jansen@bullionstar.com

 

end

 

 An interesting commentary from Alasdair Macleod

(courtesy Alasdair Macleod)

 

Alasdair Macleod: Gold becomes even more underpriced compared to fiat money supply

Section:

10:25p ET Thursday, April 2, 2015

Dear Friend of GATA and Gold:

Getting out his fiat money quantity charts again, GoldMoney research director Alasdair Macleod concludes that gold has become even more underpriced compared to fiat money supply in recent months, so much so that an upward correction is due. Macleod’s commentary is posted at GoldMoney’s Internet site here:

http://www.goldmoney.com/research/analysis/usd-fmq-update?gmrefcode=gata

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

 

end

 

Dave Kranzler interviews Bill Murphy of GATA

(courtesy Bill Murphy/Dave Kranzler)

 

GATA chairman interviewed by Dave Kranzler of Investment Research Dynamics

Section:

9:38p ET Saturday, April 4, 2015

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy was interviewed for 20 minutes this week by Dave Kranzler of Investment Research Dynamics, discussing gold and silver market manipulation and the refusal of mainstream financial news organizations to acknowledge the issue. The interview can be heard at the IRD Internet site, beginning at the 7:30 mark here:

http://investmentresearchdynamics.com/shadow-of-truth-ep-14-bill-murphy-…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

 

end

 

IMF chief Lagarde states that Greece will pay what it owes on April 9/2015:

(courtesy London Telegraph/GATA)

IMF chief Christine Lagarde: Greece will pay us back

Section:

By Mehreen Khan
The Telegraph, London
Monday, April 6, 2015

Greece’s finance minister has reassured the International Monetary Fund that his government will make a key debt repayment this week after meeting with chief Christine Lagarde in Washington.

Following two hours of talks, Lagarde said she had received “confirmation by the minister that payment owing to the fund would be forthcoming on April 9.”

Greece’s growing insolvency problems have raised fears the country would become the first developed nation to ever fall into an arrears process with the IMF. …

… For the remainder of the report:

http://www.telegraph.co.uk/finance/economics/11517720/IMF-chief-Christin…

 

end

I guess these guys are worried about supply:

(courtesy Dave Forrest/OIlPrice.com)

 

We’ve Never Seen This Before In The Gold Market

Submitted by Dave Forrest via OilPrice.com,

It might prove to be a one-off. But one group in the gold industry this week forged ahead with a unique strategy – which might just change the market.

The group is India’s largest jewellery-maker, Rajesh Exports. Which said that it is taking an unusual step in securing gold supply for its operations.

Buying gold mines.

The firm’s owner, Rajesh Mehta, told reporters in Australia this week that he is visiting the country to vet potential mining acquisitions. Adding that his company has hired investment bankers to identify assets that could “ensure a reliable and permanent gold supply-line to our company”.

The buys are apparently sizeable. With Mehta indicating that he may spend up to $700 million to acquire “equity or loan” interests in mining projects.

“We would also like to invest in the retail jewelry sector in Australia,” he said. “That is, take the gold from here, process it in India and then supply the jewelry back here in the retail line that we set up here.”

Of course, the words of one company don’t make an industry trend. But in the case of Rajesh Exports, the firm does have substantial clout in terms of gold demand — currently consuming about 140 tons per year of the metal. Equal to about 15% of India’s total yearly gold import volume.

It also signals an interesting trend in natural resources of late. Where end users of metal globally are becoming some of the most active parties in funding new mining projects.

We’ve seen similar moves from state-owned metals firms in Asia — in markets ranging from copper to platinum to coal. But the Rajesh Exports asset buy would be one of the first-ever project transactions by an end user for the gold market. Watch for announcements on specific investments for the firm.

Here’s to going to the source.

A must see interview with Bill Kaye and Grant Williams.  This youtube interview is in the clear.

(courtesy Bill Kaye/Grant Williams/GATA)

 

Fund manager Kaye gives Real Vision the case for gold without being a gold bug

Section:

5:10p ET Sunday, April 5, 2015

Dear Friend of GATA and Gold:

Interviewed by Grant Williams, lately editor of the “Things That Make You Go Hmmm. …” letter, for his new Real Vision series of video interviews by subscription, fund manager William Kaye of Pacific Group in Hong Kong observes that markets are now completely manipulated by high-frequency trading and derivatives. Kaye adds that it is hard to make a case for gold on the basis of currency fundamentals without being disparaged as a gold bug, even as Williams notes that many serious investment professionals like Kaye are starting to recognize that case. Kaye argues that the volume of derivatives linked to the currently artificially low interest rates is so huge that it would threaten the world financial system if rates rise.

Kaye’s interview with Williams is posted in the clear at You Tube here:

https://www.youtube.com/watch?v=cyaiJpCcZdc

A subscription to Real Vision costs $400 per year, but GATA supporters can get a $100 discount by using promotion code GATA-RV when they subscribe. More information about the Real Vision service, other sample material, and a subscription mechanism are accessible at Real Vision’s Internet site here:

https://realvisiontv.com/teaser/118272195

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

And now for the important paper stories for today:

 

 

 

 

end

 

(courtesy Forbes/GATA)

 

The Philippines, another rich country insisting on being poor

Section:

Trillion-Dollar Goldmine For Philippine Economy Emerging From Murky Pit

By Ralph Jennings
Forbes.com, Jersey City, New Jersey
Sunday, April 5, 2015

The Philippines holds the world’s second largest gold reserves, and applications from foreign mining firms are piling up to tap that plus a list of other metals that basically just sit under the ground now.

Mining made up just 0.72 of the impoverished Southeast Asian country’s economy in 2012 as gold production fell back that year. Access to the $1.4 trillion Philippine mining sector, rich also in copper and nickel, has been mired since the 1980s in klutzy laws, environmental battles, and land rights issues. It may be on its way out of the pit this year.

Officials in Manila see mining as an untapped treasure that could help sustain recent annual economic growth of about 6 percent and bring in foreign investment — a national priority since 2010. It’s one of the country’s next boom sectors, forecasts Jonathan Ravelas, chief market strategist with Banco de Oro UniBank in metro Manila. …

… For the remainder of the report:

http://www.forbes.com/sites/ralphjennings/2015/04/05/trillion-dollar-gol…

 

end

 

A must read….

(courtesy Bill Holter/Miles Franklin

Greeced Lightning!

 

We seem to have finally arrived at some sort of moment of truth regarding Greece and their inclusion in the EU.  The speculation is they will be out of money byApril 9th, this Thursday, unable to make a less than 500 million euro payment.  Please keep in mind they have already been raiding the country’s pension plans to fund day to day services.  How large of a “dent” they have already made remains to be seen but that is not the point.  The point is this, any person, corporation or government who needs to dig into retirement savings for daily operations is like buying a carton of cigarettes with a credit card at 14.99% …and then carrying the balance!
  Before laying out their potential options, please keep in mind that Mr. Varoufakis  was in New York this past weekend meeting with Christine Lagarde , Mr. Tsipras plans a trip to Moscow forTuesday.  Are they pleading for unpaid bailout funds from the IMF?  And if they don’t get them, do they cut a deal and fall into Russia’s arms?  This, just as so many nations have pledged their allegiance to the East and the AIIB bank (topic for tomorrow), Greece may be forced into a pivot toward the rising Sun.  They do however have something left to offer, they stand between Turkey and Eastern Europe, they can provide a route for Russian gas to flow to Europe.
  What options does Greece have left?  As I see it, they really only have three, and all with blurry edges.  First, they can cut some sort of deal with Germany (the EU) and the IMF.  They can kick the can down the road by extending maturities of existing debt and restructuring it.  The IMF still owes past monies pledged in bailouts, will they really throw new money away knowing it cannot be paid back?  Obviously this does nothing to face the real problem, Greece simply has too much debt for the size of their economy (this is a global problem but not “admitted yet”).  This option may have been taken off the table on Friday.  As a side note, it was reported Friday by Der Spiegel the IMF evacuated their Athens office.  Why would they do this?  I can only come up with one or two scenarios.  The IMF is giving up and know it is over … or, they are getting out of town while they still can.  Maybe they realize massive social unrest will be unleashed and don’t want to see their employees hanging from lamp posts?  This was denied by Saturdayhttp://www.ekathimerini.com/4dcgi/_w_articles_wsite1_1_04/04/2015_548826
but interesting nonetheless!
  Their second option is to just default.  If they cannot make debt payments, they simply don’t pay and thus become classified as a default.  The next question is whether or not they would stay in the EU?  Would they want to?  Or even be allowed to?  Option number three, an offshoot of number two, is Greece defaults and they decide to leave the EU (or are kicked out) and join team Russia.
  My guess is we will see Greece default, leave the EU and cut a gas pipeline deal with Russia becoming a stepping stone for China’s “silk road”.  At this point, it’s the only thing that makes any sense …if you are Greek and try to do what is best for Greece.  A story also making the rounds on Friday was preparations to re issue the “drachma” http://www.telegraph.co.uk/finance/economics/11513341/Greece-draws-up-drachma-plans-prepares-to-miss-IMF-payment.html .  If this is true, I would say the decision to leave the EU has already been made except for the formalities!  The next question is the biggie, and one which will affect the entire world.  How do the markets and financial systems react to this?
  Before exploring this, James Turk proposed a theory the Greek banks will be bailed in as their deposit balances slip down to equal the close to 100 billion Euros that Greece owes the ECB. http://kingworldnews.com/man-who-remarkably-first-predicted-ecb-would-steal-greek-bank-deposits-issues-more-shocking-predictions-for-2015/  He believes this will be done within the next 10 days or so.  In my opinion, there is one big “IF” in this theory.  I would question whether or not the ECB or even the BIS would have the authority to do Cyprus style bail ins if Greece leaves or has already left the EU.  Wouldn’t this be a sovereign decision?  One made by the Greeks themselves?  If I were a Greek depositor, I wouldn’t however hang around to see how it turns out, I’m just not sure if the authority exists to bail in Greek banks?  Another story out over the weekend is Germany may be preparing to freeze deposits http://www.zerohedge.com/news/2015-04-04/germany-generously-offers-freeze-bank-accounts-wealthy-greeksof wealthy Greeks, will the rest of Europe follow?
  As for market reactions, if Greece does end up cutting a deal with Russia/China and in fact does default, the first and most obvious reaction will be a further crash in the Euro itself.  Participants will then turn their attention to Spain, Portugal and Italy and ask “who’s next”?  The thought process will be frenzied with investors wanting out first and asking questions later.
  A Greek exit will be extremely complicated.  They owe 350 billion euros, much of this debt was held inside under collateralized German and French bank portfolios, much of this was “swapped” out with the ECB.  A default by Greece would “un swap” these bonds and thus bring the question of solvency to the heart of the Eurozone.  Even more complicated is how the money will be handled for the “Target2” amounts owed to other Euro nations?  This is a running balance of payments accounting for countries running trade deficits versus surplus nations.  Greece obviously cannot pay for their already accumulated deficits, the question is, who eats the loss?  Then of course there are derivatives at maybe 10 times the amount of debt outstanding, now we are talking big money and in the trillions.
  Hedges will be broken, losers busted and winners not paid.  The derivatives chain will be shaken by massive valuation swings and then broken by losing counterparties becoming insolvent.  As I have said many times before, we live in an “instant information” age where computers (programmed algorithms) will all move in the same direction and all at once.  In my opinion, a true Greek default has the potential of shutting down global markets within 48 hours of an announcement.
  As I wrote last week, Greece is just one of three or more potential flash points which have the ability to tip our world upside down,  The U.S. has sent 50 Abrams tanks to Ukraine, specifically defying Russia’s warnings.  The Austrian banking system is experiencing a systemic margin call and one that will reach the German banks themselves.  We also have the U.S. throwing political matches all around a very dry Middle East.  We fight against the Iranians in Yemen and alongside them in Iraq.  We back the Saudis who just joined the Asian infrastructure bank against U.S. wishes.  It is not even known if we still back the Israelis who also joined the AIIB.  I have no idea what history will exactly point to as the spark, I do know “Greeced lightning” will be a good description as to the speed of the collapse once started.  Regards,  Bill Holter
end
and for an encore…

bill Holter was interviewed by Greg Hunter:

you will not want to miss this:

(courtesy Greg Hunter/Bill Holter:

 

Linked is my latest interview with Greg Hunter.

 

http://usawatchdog.com/fed-rate-rise-would-smoke-derivatives-bill-holter/

 

end

 

Early Monday morning trading from Europe/Asia

 

1. Stocks all higher on major Chinese bourses  /Japan lower /yen falls to 119.03

1b Chinese yuan vs USA dollar/yuan dramatically strengthens to 6.1327

2 Nikkei down by 37.10 or 0.19%

3. Europe stocks closed/USA dollar index up to 96.62/Euro rises to 1.0997

3b Japan 10 year bond yield .34% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.03/

3c Nikkei still barely above 19,000

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

3e WTI  50.40  Brent 56.50

3f Gold up/Yen down

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 up 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 23.69%/Greek stocks up by .78% today/ still expect continual bank runs on Greek banks.

3j  Greek 10 year bond yield:  12.06% (up by 25 basis point in yield)

3k Gold at 1219.50 dollars/silver $17.17

3l USA vs Russian rouble;  (Russian rouble up  2 rouble/dollar in value) 55.95 , rising with the higher brent oil price

3m oil into the 50 dollar handle for WTI and 56 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.

3s Eurogroup reject Greece’s bid for more euros of bailout funds as proposal is to vague. The ECB increases ELA by .7 billion euros up to 72.0 billion euros.  This money is used to replace fleeing depositors.

Greece agrees to repay the IMF on April 9.2015.  There will be nothing left after that.

3t USA non farm payrolls to be released on Friday shows poor job gains. Goldman Sachs states that this will put on hold the USA rate hike.

4.  USA 10 year treasury bond at 1.84% early this morning. Thirty year rate well below 3% at 2.49%/yield curve flatten/foreshadowing recession.

 

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

 

 

(courtesy zero hedge/Jim Reid Deutsche bank)

Stock Futures Keep Losses, Gold Near Highs After Worst Jobs Report Since 2013

As market participants slowly make their way back to trading desks around the post-Easter world, and especially the US where a truncated session on Friday morning ended in tears for anyone hoping for a 2015 US recovery following an abysmal March nonfarm payrolls print, they find that unlike on previous occasions, the equity futures liftathon is nowhere to be found this morning, with the S&P set to resume trading in the red for 2015.

 

That, however, should hardly come as a surprise with Q1 earnings season about to start, a season which is expected to post a decline in non-GAAP EPS terms, with Q2 and Q3 set to follow, all of this coming after a quarter which as we showed yesterday, tumbled over 17% (!) Y/Y in GAAP EPS terms.

 

Newsflow has been slow this weekend, with no material developments on the Greek front where Greece overnight agreed to repay its debt to the International Monetary Fund by April 9, IMF chief Christine Lagarde said after a meeting with Greek Finance Minister Yanis Varoufakis. There was speculation ahead of the visit that Athens might fail to meet the 460-million-euro ($501-million) IMF installment if forced to choose between the IMF and paying government workers. As AFP reported, Lagarde said repaying the IMF debt was in the country’s best interest. “Continuing uncertainty is not in Greece’s interest and I welcomed confirmation by the minister that payment owing to the Fund would be forthcoming on April 9th,” Lagarde said in a statement.

In other words, Greece has “agreed” not to default. Still, many wonder if this is just another ploy to buy time (after all Greece is merely borrowing money from the Troika to repay the Troika with nothing sticking in the local economy, a recipe for a prompt government overhaul), while the Tsipras government pivots East, something we first suggested three months ago. As the Telegraph suggests this morning, “Greece’s bail-out drama is threatening to take a geostrategic turn to the east. A mere three weeks after his maiden trip to Berlin, Prime Minister Alexis Tsipras is on the road again, this time heading to the heart of Greece’s eastern hegemon. On Wednesday, the 40-year-old premier will sit down for his first official meeting with Russian counterpart President Vladimir Putin at the Kremlin. The timing is not fortuitous.”

Fears of a Leftist alliance with Putin’s Russia first emerged after Syriza’s landslide election win in late January. The nascent government moved to quickly condemn economic sanctions placed on Moscow.

 

In a nod to their long-standing historical ties, Mr Tsipras’s Moscow trip was announced as Greeks marked the anniversary of their foundational War of Independence, when Tsar Alexander I allied with the Mediterranean state to throw off three centuries of Ottoman rule.

 

The dalliance with Kremlin has since intensified as Greece’s creditor show no signs of lessening the squeeze on the country.

 

Ahead of his visit, a defiant Mr Tsipras revived calls for the EU to halt sanctions and open up diplomatic channels with the Kremlin. In a hint at Greece’s simmering tensions with Brussels, the Syriza leader attacked economic warfare as a “dead-end policy”.

It remains to be seen if and how much use Russia and China may have for Greece and a foothold in Europe, however with Greek money gone, things will move fast.

Away from Greece, whose future remains in limbo, thebiggest development over the holiday weekend was a Goldman note in which the central-bank friendly firm launched the first trial balloon against rate hikes, and using an “analysis” conducted on the Fed’s own FRB/US reality simulator, determined that “it is hard to be “reasonably confident” in the inflation outlook given current economic conditions, unless several inflation drivers rise at the same time. We therefore do not have much confidence in the inflation outlook and believe that the right policy would be to put hikes on hold for now.

This catalyzed a jump in gold, which reached the resistance band in the mid-$1220s overnight before once again finding paper selling pushing it lower. A breakout here may lead to a huge short squeeze as noted yesterday courtesy of a record number of gold shorts.

 

It is unclear if this open hint toward the end of easing season is what catalyzed it, or whether the realization that there is no Iran “deal” but merely a framework which will be gutted over the coming months and in the process likely undo any “oil embargo” progress, but overnight WTI has jumped and at last check was trading back over $50 once again. Late on Thursday a joint statement from parties involved in nuclear talks over Iran stated sufficient progress had been made to keep negotiations ongoing until 30th June and Iran’s Tasnim said that banking and oil sanctions to be removed after the deal has been agreed which caused selling pressure in crude futures into the NYMEX pit close. However, since then WTI and Brent prices have been supported by the weaker USD as well as news that Saudi Arabia have increased their official selling prices for all Asian exports during May. Furthermore, the latest CFTC data shows that bullish bets on oil have been increased by the most in four years.

In FX markets, the USD remains roughly near its post-NFP lows after the latest jobs report from the US showed a substantial miss on the headline and subsequently pushed back expectations for a Fed rate hike. Elsewhere, with European participants away from market, things remain relatively subdued, although EUR has been granted some reprieve after promising developments regarding Greece despite the latest CFTC data showing record shorts for EUR.

The coming week, as is traditional following NFP, will be quieter than normal, with all eyes today on Non-mfg ISM at 10:00 am expected to print down from 56.9 to 56.5 (with the Markit PMI serving as a humorous and once again totally disconnected from reality foil). If this is indeed the “kitchen sink” period, expect a major downside “surprise” in this latest soft-data report.  Also on deck today is the Labor Market Conditions Index.

Bulletin Headline Summary from Bloomberg and RanSquawk

  • Friday’s NFP headline fell short of expectations, leading to selling pressure in USD and US equities, while bolstering treasuries
  • Over the weekend, Greece confirmed they will make their April 9th repayment to the IMF
  • While Europe remains away from market, today’s session will see notably lower volumes than normal
  • Treasuries steady after Friday’s rally on worse-than-expected March payrolls (+126k vs +245k estimate); New York Fed’s Bill Dudley to speak this morning on economic outlook.
  • Conviction that Fed might raise rates mid-year fades after weak payrolls; some economists reserving judgment to see whether further data confirm stalling growth
  • While policy makers are suggesting there’s something wrong with UST yields that aren’t climbing as the economy recovers, traders are signaling there’s little reason yields can’t, and won’t, stay depressed
  • The Fed has “been wrong for so long,” said Jeffrey Gundlach; “Their incremental input in what will happen in the future has been literally of no value, because the market’s pricing has been closer”
  • Saudi Arabia raised official crude oil prices for Asia for a second straight month as refining margins improved; the country’s oil minister said global demand was improving as lower prices boost use
  • Greece is stepping up efforts to find allies in the U.S. and Russia as cash reserves run dry while an agreement on additional funding from the country’s euro partners still looks like weeks away
  • Yemen’s Houthi movement is ready to resume talks to resolve the country’s crisis if the Saudi-led military coalition stops airstrikes, though it won’t accept the kingdom-backed deposed president returning to power
  • Iran’s military chief congratulated Supreme Leader Ayatollah Ali Khamenei for negotiators’ success in reaching a nuclear agreement with six world powers, in an open backing of President Hassan Rouhani’s government
  • Obama said engaging with Iran on a nuclear accord doesn’t mean the U.S. will forfeit its military superiority or fail to protect Israel
  • Mizuho plans to hire as many as 200 people from RBS in the U.S. as part of its deal to buy loans from the British lender, a person with knowledge of the matter said
  • Japan stocks rise; European markets closed. U.S. equity- index futures decline. Crude and gold higher, copper falls

 

end

 

On Good Friday, we learn that Greece does not have enough money to pay for the iMF loan and they are now contemplating nationalize their banks and ready to use a parallel currency, the drachma.

 

 

(courtesy zero hedge)

 

 

Greece Said To Prepare “Grexit”, Drachma, Bank Nationalization Plans

 

On Thursday morning, we took an in-depth look at what the progression of events is likely to be in the event a cash-strapped, negotiation-weary Greece finally, for lack of will or for lack of options, fails to scrape together enough cash to pay its creditors. As BofAML notes, a missed IMF payment and/or failure to make interest payments to either the ECB or private creditors over the coming weeks would likely lead to default within 30 days, at which point “mark-to-fantasy” becomes mark-to-market and then “mark-to-default” in very short order.

Although Greek officials came out midday with a “categorical” denial of reports that the country was set to run completely out of cash in just 7 days, it now appears Athens may be prepared to chance a missed IMF payment and all that comes with it if it means saving face and preserving Syriza’s campaign promises to the beleaguered Greek populace.

More, via The Telegraph:

Greece is drawing up drastic plans to nationalise the country’s banking system and introduce a parallel currency to pay bills unless the eurozone takes steps to defuse the simmering crisis and soften its demands.

 

Sources close to the ruling Syriza party said the government is determined to keep public services running and pay pensions as funds run critically low. It may be forced to take the unprecedented step of missing a payment to the International Monetary Fund next week.

 

Greece no longer has enough money to pay the IMF €458m on April 9 and also to cover payments for salaries and social security on April 14, unless the eurozone agrees to disburse the next tranche of its interim bail-out deal in time.

 

“We are a Left-wing government. If we have to choose between a default to the IMF or a default to our own people, it is a no-brainer,” said a senior official…

 

“They want to put us through the ritual of humiliation and force us into sequestration. They are trying to put us in a position where we either have to default to our own people or sign up to a deal that is politically toxic for us. If that is their objective, they will have to do it without us,” the source said.

 

Going into arrears at the IMF – even for a few days – is an extremely risky strategy.

 

No developed country has ever defaulted to the Bretton Woods institutions. While there would be a grace period of six weeks before the IMF board declared Greece to be in technical default, the process could spin out of control at various stages.

 

Syriza sources say are they fully aware that a tough line with creditors risks setting off an unstoppable chain-reaction. They insist that they are willing to contemplate the worst rather than abandon their electoral pledges to the Greek people. An emergency fall-back plan is already in the works.

 

“We will shut down the banks and nationalise them, and then issue IOUs if we have to, and we all know what this means. What we will not do is become a protectorate of the EU,” said one source.

 

It is well understood in Athens such action is tantamount to a return to the drachma, even though Syriza would rather reach an amicable accord within EMU.

As a reminder, here is Goldman’s take on what redenomination would mean for Greece:

Secluded from international capital markets, Greece would not be able to issue a globally traded currency 

 

With senior liabilities outstanding, Greece would be secluded from international capital markets. This would not just hold for the Greek government. It is likely that the implications touch the Greek private sector too, with Greek exporters and importers not being able to rely on letters of credit provided by Greek institutions.

 

In such a case, Greek trade would collapse to the level that can be sustained by cash businesses in Euros.

 

Should a Greek currency be introduced following failure to pay, it would likely have very limited convertibility into Euros outside Greece. It would purely be a means of internal transactions, in all likelihood.

 

But is this an equilibrium solution for Greece? No. Because in such an event, it would be hard to convince even the Greeks to hold any drachmas. Put simply, while public sector employees, pensioners and government supply providers would be paid in drachmas (and be expected to pay part of their tax liabilities in the new currency), they would not be able to use that currency to buy imported goods.

 

Exported goods would also become too valuable to be bought in drachmas, as they would correspond to hard currency receivables. Anticipating this, even providers of domestic services (taxi drivers, hairdressers etc) would avoid receiving payments in drachmas if possible.

 

If at all, the drachma would trade at a huge discount to the Euro. The economy would remain largely euro-ised but without a natural source of Euro-liquidity…

 

Ultimately as we discuss in our note with Huw Pill, it would be very hard for Greece to introduce a viable new currency unilaterally. Baring the complications of actually printing a new note, such a move would likely lead to a collapse in Greece’s international transactions and trade (both for the government and the private sector), would expose the country to litigation risks and trigger a significant destabilization of the banking system.

 

The only function of such a new currency would be to “tax” parts of the population that would not naturally receive hard currency as part of their payments structure. But that tax would not lead to a natural increase in government receivables as the economy (both the internal and the external economy) would shrink in a downward spiral.

So now, just as we predicted two weeks ago, Goldman (and anyone else who had effectively ruled out the possibility that Greece would finally reach a breaking point and fire up long-dormant national printing presses) may have to revise and rethink their assessment as the final curtain looks set to fall on the long-running tragicomedy that is the Greco-Euro standoff. 

*  *  *

Here’s what Greece owes to who and when…

…and here’s what happens next:

end
and on the same subject as above, Greece is planning to nationalize banks and bring into this country a parallel currency
(courtesy international business times)

Greece Drawing Up Contingency Plans To Nationalize Banks, Bring In Parallel Currency: Report

By @markdhanrahan m.hanrahan@ibtimes.com on April 03 2015 1:01 AM EDT

Greece’s government is drawing up contingency plans to nationalize the country’s banks and introduce a parallel currency, as the cash-strapped country teeters on the brink of defaulting on a key international loan.

According to a report in the Telegraph, sources close to the Syriza-led government said: “We will shut down the banks and nationalize them, and then issue IOUs if we have to, and we all know what this means. What we will not do is become a protectorate of the EU.”

Greece is due to make a payment of 458 million euros ($498 million) to the International Monetary Fund (IMF) on April 9. But officials told a conference call of Euro Zone deputy finance ministers this week that the country would run out of money by then, raising the possibility of a default on the IMF loan.

Greece’s leftist government was swept to power in January, pledging to renegotiate the terms of the country’s international bailout, and put an end to internationally supported austerity policies that ministers have said are responsible for a “humanitarian crisis” in the country.

Interior Minister Nikos Voutsis said on Wednesday that the country would have to decide whether to pay back the IMF or pay salaries and pensions. He said it would choose the latter,Reuters reported.

Greece has submitted a list of reforms to its international creditors, which, if approved, will unlock a further tranche of bailout funds. The government is keen to increase revenue by cracking down on the tax evasion that is widespread in the country while maintaining public services.

International creditors have, however, not been overly impressed with Greece’s attempts at reform thus far. Pensions have been a particular sore spot with the country’s creditors. Greece spends a larger portion of its GDP — 17.5 percent — on pensions than any other country in Europe. This has caused political blowback in Germany, and Slovakia pulled out of the first Greek bailout in 2010, over similar public anger there, the Economist reported.

Jose Manuel Barroso, the former president of the European Commission, had harsh words for Greece’s government Thursday, telling the BBC that it had made “completely unrealistic promises” to voters that it cannot fulfill now. He added that Greece’s demands were “completely unacceptable to other countries.”

 

end

 

With only one week’s money left, Tsipras now heads to Moscow to forge
a deal to provide synergistic benefits to both Russia and Greece:
(courtesy zero hedge)

 

Tsipras Heads To Moscow As IMF Withdraws Athens Staff; Greek Default Risk Hits Post-Crisis High

 

Amid growing pressure from their ‘Troika colleagues’ with Eurogroup Chair Dijsselbloem noting there is “still a long way to go” on Greek proposals and The IMF withdrawing its staff in Athens; new prime minister Alexis Tsipras heads to Russia to meet with Putin early next week. As Kremlin spokesman, Dmitry Peskov noted – somewhat intriguingly – “Greece has not asked [Russia] for financial aid… yet,” as Tsipras is expected to seek agreement for a ‘road map’ of initiatives on the political and economic levels. Greek default risk has resurged in the last few days to its highest since the last ‘restructuring’…

Greek default risk hits post-crisis highs…

 

 

With friends like this…

Eurogroup Chairman Jeroen Dijsselbloem said there’s a “long way to go” to strike a deal on Greece’s aid proposals even after the Athens government responded to demands for more detail on its bid to end the deadlock.

 

“It’s continuously improving,” Dijsselbloem told reporters today in the Hague. “They deliver more and more proposals that are more and more detailed. On some parts, we will definitely reach an agreement.”

and

Is it any surprise, Greek PM Tsipras is pivoting to Russia?

  • *PUTIN, TSIPRAS TO DISCUSS GREEK ECONOMIC SITUATION: PESKOV
  • *PUTIN, TSIPRAS TO DISCUSS EU’S ANTI-RUSSIA SANCTIONS: PESKOV
  • *GREECE HASN’T ASKED RUSSIA FOR FINL AID YET, TALKS AHEAD:PESKOV

As ekthimerini reports, the aides of Greek Prime Minister Alexis Tsipras and Russian President Vladimir Putin, and the Greek and Russian embassies in Moscow and Athens, are feverishly preparing for a scheduled visit by Tsipras to the Russian capital on April 8 and 9 which the Greek government hopes will serve to significantly upgrade bilateral ties.

According to a well-informed source, Tsipras is expected to seek agreement for a “road map” of initiatives on the political and economic levels.

 

Talks are expected to touch on several topics of bilateral interest, including “commercial and financial cooperation, investments, energy, tourism and cooperation in matters of education and culture,” according to Tsipras’s office. Other topics on the agenda include “the relationship between Russia and the European Union, as well as regional and international issues.”

 

Tsipras is expected to emphasize Greece’s respect for its commitments as a member of the European Union and NATO on the one hand while underlining his conviction that the European Union’s “security architecture” should include Russia. Amid European concerns about Greece’s position vis-a-vis EU sanctions against Russia, Greek officials have sought to offer reassurances, suggesting that Athens will not actively oppose the EU line. But sources close to Tsipras said the government will continue to express its disagreement with sanctions as a policy.

 

As for a likely bilateral cooperation in the energy sector, a high-ranking government source told Kathimerini that Greece “will reassure the Russians, not the Westerners.” According to sources, Energy Minister Panayiotis Lafazanis has already agreed in principle to a proposal made by the head of Russian giant Gazprom, Alexey Miller, for a new gas pipeline through Turkey to be extended through Greek territory. The plan foresees the creation of a consortium in which Greece’s Public Gas Corporation (DEPA) would play a key role along with Russian funds and possibly also European clients of Gazprom, Kathimerini understands.

*  *  *

And irony of ironies, as Greece appears to set to invoke its own capital controls, Cyprus lifts its own capital controls, two years after bailing-in its depositors…

  • *CYPRUS TO LIFT LAST CAPITAL CONTROLS ON APRIL 6
  • *CONFIDENCE IN CYPRIOT BANKING SYSTEM FULLY RESTORED: GOVT

“While nothing will go wrong with Greece, Cyprus has prepared for all possibilities in order to minimize any effects on its economy”

Mission accomplished?

 

end

 

It will not be long before Greece leaves….

(courtesy zero hedge)

 

 

Greek Minister Slams Troika’s “Unbelievable Prejudice” As EU Proclaims Tsipras’ Government “Cannot Survive”

 

The rhetoric, threats, and promises continue to increase as Greece, its international creditors (i.e. Troika), and its potential pivot partners from Russia to China to Iran all vie for attention.

Greek FinMin Varoufakis ‘promised’ Christine Lagardethis morning that Greece will repay the IMF loan on April 9th (though was unable to explain how)…

Though it is unclear where he will get the cash from…

Even as energy minister Panagiotis Lafazanis denounced Greece’s international creditors for treating the country with “unbelievable prejudice and as a colony.”As The Guardian reports,

With Greece’s cashflow problem deteriorating with every passing day, rumours of Athens’ overtures towards the unlikeliest of sources have the sprung up.The latest comes form the country’s former prime minister, Atonis Samaras.

 

Mr Samaras has accused the current incumbent of “sending his cousin to Iran to ask the Tehran government to buy Greek bonds”.

 

“When you are in Europe and ask Chinese, Iranians, Russians to finance your deficit, don’t you send a signal to the rest of Europe that you are not really a serious pro-European?,” was the refrain of the leader of the much diminished New Democracy party.

 

The rumours remain unsubstantiated for now. An official Greek visit to Tehran is not yet in the pipeline, but the search for foreign bondholders is likely to continue. The European Central Bank has banned domestic banks from increasing their holdings of government debt – a stance that pushed Athens to seek out alternative willing investors.

 

With the clock ticking on its cash crunch, both sides will be hoping for a denouement to the saga before Mr Tsipras returns to Moscow in May. The Greek premier will be marking Russian Victory Day – a celebration of the capitulation of Nazi Germany to the Soviet Union in the Second World War.

EU officials have suggested privately that Greek prime minister Tsipras should jettison the far left of his governing Syriza party to make a bailout agreement possible with one senior official exclaiming “this government cannot survive.” As The FT reports,

Eurozone authorities’ frustration with Greece has grown so intense that a change in the current Athens government’s make-up, however far-fetched, has become a frequent topic of conversation on the sidelines of bailout talks.

 

Many officials — up to and including some eurozone finance ministers — have suggested privately that only a decision by Alexis Tsipras, Greek prime minister, to jettison the far left of his governing Syriza party can make a bailout agreement possible.

 

The idea would be for Mr Tsipras to forge a new coalition with Greece’s traditional centre-left party, the beleaguered Pasok, and To Potami (The River), a new centre-left party that fought its first general election in January.

 

“Tsipras has to decide whether he wants to be prime minister or the leader of Syriza,” said one European official.

 

A senior official in a eurozone finance ministry added: “This government cannot survive.”

 

Members of Syriza’s moderate wing admit there is a problem with the Left Platform, the official internal opposition that represents about a third of the party and controls enough MPs to bring down the government if it were to rebel in a parliamentary vote.

With 68% of Europeans seeing Greece as a drag on the EU economy…

 

Perhaps Greece’s last best hope is the pivot to an increasingly interested Russia or China (or even Iran) because even the rost case scenario inside the EU could make Brussels very uncomfortable…

One person briefed on the EU’s negotiating stance said concern was rising in Brussels thatif the continued stalemate forced Greece to impose capital controls to prevent a bank run, this could strengthen Syriza’s populist appeal rather than sparking disillusionment among voters.

 

end

 

However the Greeks demand money owed to it during the Nazi occupation of Greece and the forced loans to Germany given by Greece as well as occupation payments.  Greece has a legitimate claim:

 

(courtesy zero hedge)

 

Greece Calculates Germany Owes It 1/12 Of Its GDP In WWII Reparations

 

With almost 70% of Europeans already believing that Greece is a drag on the EU economy, this morning’s statement by Greek Alternate Finance Minister Dimitris Mardas – coming just a week after the war-raparations committee was set-up, telling lawmakers in Parliament that he has calculated that Germany owes Greece EUR 278.7 billion in World War II reparations, will surely deepen the rift (at almost 8.4% of Germany’s EUR 3.3 trillion euros GDP) whether right or wrong.

As Bloomberg reports,

Greece’s total war reparations claim amounts to EUR 278.7b, Greek Alternate Finance Minister Dimitris Mardas tells lawmakers in Parliament.

The claim was calculated by Greece’s General Accounting Office, which has collected archival material.

This includes a EU10.3b repayment of loan country was forced to make to Germany during Nazi occupation…

Another legal issue that has surfacedconcerns the 476 million reichsmarks lent against its will to Germany by the Greek National Bank during the war. If this were to be considered a form of war damage, then in principle it would be subject to reparation — except that according to the 1990 treaty, Germany would not have to pay it.

If the money were, however, to be considered a normal credit, then Greece would be entitled to get the money back. The problem is this: even partial recognition of such a debt would create a precedent that could bring untold claims in its wake.

*  *  *

This comes less than a week after the war reparations committee was set up(Reuters on April 1st)

A Greek parliamentary committee set up by Prime Minister Alexis Tsipras’s government to demand reparations for the Nazi occupation of Greece began work on Wednesday, in a move likely to heighten tensions between Athens and Berlin.

Greece’s emotive campaign for war damages has been waged for decades by governments and private citizens alike.But it has gained momentum in recent years as Greeks suffered under the German-backed austerity imposed by the European Union and the International Monetary fund in exchange for financial bailouts.

The committee that began work today will claim German debts include war reparations, the repayment of the so-called occupation loan that Nazi Germany forced the Bank of Greece to make and the return of stolen archaeological treasures.

Tsipras has accused successive German governments of using legal tricks to avoid paying compensation. Germany dismisses the claims as a distraction from Greece’s financial difficulties. It says it has honoured its obligations, including a 115 million- deutsche mark (60 million euros) payment to Greece in 1960.

Relations between the two countries have frayed since Tsipras’s government took power in January seeking to ditch previously agreed bailout promises of austerity measures such as steep cuts to wages and pensions.

The Nazi theme is popular among Greek media in taking potshots at Germany, the country’s biggest creditor. German officials like Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble have been depicted in Nazi uniforms or with Hitler moustaches.

Hundreds of villages were destroyed, thousands of civilians executed and huge sums looted from the Greek central bank during the Nazi occupation. The Greek government has not officially quantified its reparation claims.

*  *  *

end
We now learn that the Bad Bank mania  is turning sour.
Just take a look at the bad bank Sareb:
(courtesy Don Quijones/WolfStreet)

“Bad Bank” Mania Spreads in Europe

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By Don Quijones, Spain & Mexico, editor at WOLF STREET.

One thing that the world is not in short supply of these days is bad banks. They are everywhere, it seems. But there are bad banks, and there are Bad Banks. This article is about the latter, the officially dubbed “Bad Banks” launched by governments and central banks to conceal the rising tide of triple-F toxic junk (derivatives, securitized debt, non-performing loans…) that threatens to engulf the world’s financial system.

As Bad Banks go, few are as bad as Spain’s SAREB, the public-private company responsible for managing assets transferred from the four nationalized financial institutions BFA-Bankia, Catalunya Banc, NGC Banco-Banco Gallego, and Banco de Valencia.

In theory, SAREB was never meant to exist: “There will be no Bad Bank in Spain, and we will establish procedures that will not be burdensome for taxpayers.” Those were the famous words of Spanish PM Mariano Rajoy during the first few months of 2012. The promise was made on numerous occasions, and not just by Rajoy but also by his Minister of Economy (and former Lehman advisor) Luis de Guindos.

But in politics, promises are not made to last; they are there to be broken. By December of that same year, Sareb was born and Spanish taxpayers were left holding the tab for the biggest bank bailout in Spanish history.

Fast forward to today. Sareb is hemorrhaging. In 2014 the firm’s total losses were €585 million, more than double the amount registered in 2013, its first full year of operations (€260.53 million). It’s a stark contrast from the rosy picture painted by KPMG, the firm hired by the government to draw up Sareb’s original business plan. According to KPMG, investor returns, based on “conservative estimates,” would be in the order of around 15%!

Enough investors needed to be brought on board “to ensure that the participation of the FROB (the government’s Fund for Orderly Bank Restructuring) remained below 50%. That way, Sareb’s debt would not count as official public debt,” one source told Spanish financial news website El Confidencial. “To do that we had to reel them [investors] in with promises of really high returns,” said another.

Putting the “Bad” into Banking

Bad Banks have been around for decades. Arguably the first ever incarnation of a Bad Bank was Grant Street National, created in 1988 to house the souring assets of New York Mellon Bank. Since then, countries as far and wide as Sweden, China, Mexico and Ireland have experimented with the model, with varying degrees of success or failure – mainly failure!

According to Spanish economist Juan Ramón Rallo, bad banks are by nature a bad idea (unless, of course, you’re a senior banker working for an insolvent bank, or an investor with sizable holdings of slowly putrefying bank shares or bonds, in which case they’re a stroke of genius):

A bad bank is a mechanism for redistributing the wealth of a country from its taxpayers to the shareholders, executives, workers and creditors of financial institutions… The logic is disarmingly simple: if the only party willing to buy the [toxic] assets at the prices [offered by the banks] is the State, the chances are that the assets are not worth what the State is paying for them.

This may go some way to explaining why so few foreign investors – only two Europeans banks (Barclays, Deutsche Bank) and a smattering of insurance firms (Axa, Generali, Zurich and Santa Lucia) – could be persuaded to take a stake in Sareb when it was launched in 2012, despite the Spanish government’s frantic lobbying efforts. After all, if the assets are heavily overpriced, how would Sareb’s investors make money?

The rest the private-sector shareholders are home-grown entities, mainly banks and insurance firms. According to some reports, their 52% participation in Spain’s bad bank owes much less to the fanciful expectations raised by KPMG than to serious arm-twisting by the Rajoy government and the Bank of Spain.

A Good “Bad Bank” and a Bad “Bad Bank”

Sweden’s experience from the early nineties offers a rare positive (or at least not so negative) example of bad banking. Unlike in Spain, Swedish banks that were nationalized or merged with other banks after the country’s 1992 financial crisis were forced to overhaul their management. There were also serious strings attached to government assistance (what a novel idea!). Bank shareholders were not covered by the blanket guarantee, and in order to receive the government loans, banks would have to open up their entire books for inspection.

Such clarity and transparency are ominously absent in Sareb’s case. Even after over two years of operations the organization still lacks fully established, broadly accepted accounting standards. According to the Spanish daily El Periodico, this is one of the reasons for the sudden deterioration in losses last year. The organization’s regulator, the Bank of Spain, decided to apply different rules halfway through the financial year, forcing the bank to undertake “extraordinary restructuring” measures in order to cover hundreds of millions of euros of unpaid unsecured debt.

What’s more, in Spain the brunt of the financial pain has been borne by taxpayers, whereas in Sweden it was the nationalized banks’ shareholders that took the biggest hit. Indeed, many economists have argued that if you factor in the country’s continued stake in the nationalized bank, now called Nordea, Swedish taxpayers ultimately broke even. In Spain, by contrast, taxpayers are unlikely to break anywhere close to even. They (myself included) will be on the hook for 48% of Sareb’s toxic assets for well over a decade. Given the magnitude of the recent housing collapse and its anemic recovery, few of those assets are likely to turn a tidy profit any time soon.

Nonetheless, Sareb’s new president Jaime Echegoyen remains upbeat. “Initial forecasts were perhaps excessive, but we will continue to strive to provide positive returns to investors, as long as the economy continues to improve.”

But what if things get worse? What if Spain’s tentative economic remission reverses? Sareb has already burnt through €1.2 billion of capital and there’s only €350 million left in the kitty. Not much of a buffer for a bank with some of the ugliest assets in the western world!

If further capital is needed – something Echegoyen dismisses for now – taxpayers could end up having to cover 48% of the new capital injection. Worse still, as El Confidencial points out, if Sareb runs out of capital it may not be able to keep servicing its huge debt – €45 billion at last count. It just so happens that the guarantor on that debt is … the Spanish state.

It’s an old plot with a familiar twist. One way or another, the taxpayers will be left holding a bag of worthless assets… until, of course, they can’t. Or unless the Bad Bank in question is an Austrian entity by the name of Hypo Alpe-Adria [read… Austria Pulls Ripcoard on Bailouts].

Meanwhile, Europe’s Bad Banks continue to proliferate, to make room for the ever-rising tide of toxic financial waste. As I type these last words, a new Bad Bank is sprouting up in Andorra, to help hide BPA’s dodgy assets. And pressure continues to mount on Renzi’s government to create Italy’s first ever Bad Bank, to help conceal the €333 billion of non-performing loans festering on its banks’ books. The New York Times says it’s a “good idea.” Sure, but for whom? Not the taxpayer. That much we know. By Don Quijones, Raging Bull-Shit.

European banking mayhem spreads to Madrid and shady tax haven Andorra. Read… Rich Man’s Bank Hit by Bank Run, Collapse, “Bail-In”

 

end
Russia plans another drill near the southern border with the Ukraine:
(courtesy zero hedge)

Russia Plans Missile Defense System Drill Near Southern Border As North Korea Test-Fires Short-Range Rockets

 

With ‘shocked’ OSCE observers noting that the Minsk accord ceasefire is not holding in Ukraine’s Shyrokyne, it appears sabre-rattling around the world is picking once again. Military exercises in Russia’s Astrakhan region, conducted successful launches of the ‘hypersonic’ S-300 anti-aircraft missile systems, repelling an “enemy” air assault. This follows another drill invloving ten aircraft including helicopters in simulated attacks by an “enemy” near the Chinese border. Meanwhile, North Korea has test-fired four short-range missiles into the sea off its west coast, in protest at US-South Korean military drills, which are currently ongoing, and a 2nd drill is underway ” supervised by Kim Jong-Un.”

 

First, The Minsk Accord is not holding…

  • *OSCE MEMBERS ‘SHOCKED’ AT DONETSK AIRPORT VISIT: BOCIURKIW
  • *CEASEFIRE NOT HOLDING AT UKRAINE’S SHYROKYNE: BOCIURKIW
  • *OSCE SEES WORSENING HUMANITARIAN SITUATION IN EAST UKRAINE

And then… (as TASS reports),

The S-300V4 air defense missile systems that can launch hypersonic missiles…

 

 

will be involved in field firing exercises at the Kapustin Yar range in the Astrakhan region, Southern Russia, head of the tactical air defense Lieutenant General Alexander Leonov told TASS on Friday.

 

 

“Air defense specialists of the Ground Forces will conduct field firing exercise using the modern air defense missile systems Tor-M2U and S-300V4 at the Kapustin Yar range in the Astrakhan region,” he said.

 

 

Russia’s Eastern Military District plans to use Zastava unmanned aerial vehicles to live-stream large-scale live fire military drills involving S-300 missile systems set to take place in the Republic of Buryatia in southern Siberia.

Which followed…

Earlier this week, the Eastern Military District announced that over ten aircraft including helicopters had participated in simulated attacks by an “enemy” near the Chinese border.

 

The Russian Defense Ministry announced plans to conduct at least 4,000 military exercises throughout the country in 2015.

Which was ‘coincidental’ with… (as The BBC reports),

North Korea has test-fired four short-range missiles into the sea off its west coast, say South Korean military officials.

 

In a statement, the Joint Chiefs of Staff said the missiles had a range of about 140km (87 miles).

 

They were fired from Dongchang-ri in the north of the country on Friday afternoon local time, it said.

 

The North often conducts missile tests in protest at US-South Korean military drills, which are currently ongoing.

 

The US and South Korea say the annual exercises are for defence training purposes, but Pyongyang calls them a rehearsal for invasion. They are always a trigger for a surge in tensions between the two Koreas.

 

When the drills began in March, the North fired two short-range ballistic missiles, and on 13 March it fired seven ground-to-air missiles into the sea to coincide with the end of one part of the drill, Operation Key Resolve.

 

A second drill, Foal Eagle, is continuing.

 

A JCS spokesman said Friday’s test“appeared to have been supervised by Kim Jong-Un”, the AFP news agency reports.

 

The two Koreas are technically still at war as the 1950-53 conflict ended with a ceasefire, not a peace treaty.

*  *  *

But apart from that…

 

end

 

We now have a Nazi-sympathizer as adviser to the Ukraine military:

(courtesy zero hedge)

Leader Of Ukraine’s Ultranationalist “Right Sector” Appointed As Army Advisor

With Greece on the verge of either getting kicked out of Europe or suffer through yet another government overhaul, one which many suggest may usher the “last”option for Greece, the ultra nationalist, neo-Nazi Golden Dawn party into governance, some wonder if it is not Europe’s ulterior intention to force a populist shift toward right wing, nationalist parties (perhaps best observed in France where Marine le Pen’s dramatic rise to power has left many dazed and confused) one which will lead to social instability and shortly thereafter, war (because in a world in which every Keynesian voodoo trick to revive the economy has failed, war is the last remaining outcome).

So while we await to see if Europe’s turn to ultra right wing movements accelerates in the coming months, we just learned of a very disturbing development in just as insolvent Ukraine, where moments ago the website of the local Ministry of Defense reported that Dmytro Yarosh, i.e., the person show below…

… leader of Ukraine’s “Right Sector” political party, whose adherents are shown in the photos below…

… and whose political ideology has been described asnationalist, ultranationalist, neofascist, right-wing, or far right, was just appointed as Advisor to Chief of General Staff.

From the Ukraine ministry of defense:

Dmytro Yarosh appointed as Advisor to Chief of General Staff

Dmytro Yarosh, leader of ‘Pravyi Sector’ (Right Sector) political party, appointed as Advisor to Chief of General Staff. Yesterday, Colonel General Viktor Muzhenko, Chief of General Staff, and Dmytro Yarosh agreed the format of cooperation between ‘Pravyi Sector’ and the Ukrainian Armed Forces.

Colonel General Viktor Muzhenko stressed the Ukrainian army had become one of the strongest armies of Europe; the Ukrainian soldiers proved they knew how to fight and appreciated the contribution of volunteer battalions to defense of Ukraine and said: “We understand the needs of changes and increase of efficiency at all the army levels. We also consider various models of formation of the army reserve. We are developing the reforms and will implement them. We gathered all the patriots and defenders of Ukraine under single leadership. The enemy understands our unity and that its attempts end in failure. We have one goal and the united Ukraine. The Army becomes stronger each week”.

Dmytro Yarosh underlined the unity was the key precondition for further successful fighting and demonstrated the readiness to establish the cooperation and integration of volunteer battalions to the Ukrainian Armed Forces.

‘Pravyi Sector’ is ready to be subordinated to military leaders in issues related to defense of state from the external enemy.

In other words, the leader of Ukraine’s Neo-Nazis will, as a local “patriot and defender of Ukraine” be advising, i.e., fighting for, what little remains of Ukraine’s army.

Sadly the parallels with Europe of the 1920s and 1930s, not to mention the decade just following, grow more visible with every passing day.

 

end

 

 

Russia proposes an arms embargo on all participants to the Yemeni conflict.  Saudi Arabia is very angry as its stock market crashes:

(courtesy zero hedge)

 

 

Saudi Stocks Are Plunging Following Rejection Of Russian Embargo Proposal; Death Toll Mounts

Earlier this morning, RT reports that Saudi Arabia rejected Russia’s amendments to a Security Council draft resolution which would see an all-inclusive arms embargo on all parties in the Yemeni conflict. Saudi stocks did not like the news and began to tumble – now down over 3%, back at January lows as the fighting continues to spiral out of control with civilian death toll climbing. At least 185 people were left dead and more than 1,200 wounded as a result of fighting in Aden, a medical official told AFP Saturday, three-quarters of them civilians. In the meantime, Reuters reports The Houthis are gaining ground in Aden, despite the onslaught of airstrikes.

Saudi stocks not happy… down 13% from mid-March highs…

“We urgently need an immediate halt to the fighting, to allow families in the worst affected areas, such as Aden, to venture out to get food and water, or to seek medical care,” said Robert Mardini, head of the ICRC’s operations in the Near and Middle East. But as RT reports, for now that remains a distance away…

“There is little point in putting an embargo on the whole country. It doesn’t make sense to punish everybody else for the behavior of one party that has been the aggressor in this situation,”Saudi Arabia’s representative to the UN Abdallah Al-Mouallimi said after a closed emergency UN Security Council meeting on Saturday.

Al-Mouallimi added that he “hopes” Russia won’t resort to its veto power in case the all-inclusive embargo clause is not added into the draft submitted by the Gulf Cooperation Council that urges an arms embargo only on the Houthis.

At the same time, Riyadh agreed with Moscow’s calls for need of “humanitarian pauses” in the Saudi-led coalition’s air campaign in Yemen – though saying that Saudi Arabia already cooperates fully in this regard.

“We always provided the necessary facilities for humanitarian assistance to be delivered,” Al-Mouallimi told reporter heading out of the meeting. “We have cooperated fully with all requests for evacuation.”

The 15-member council is considering the possibly of merging the Russian and Gulf Cooperation Council proposed drafts into one.

The Security Council meeting coincided with the call from the International Committee of the Red Cross for a “humanitarian pause.” The NGO urged to break hostilities for at least 24 hours.

*  *  *
Meanwhile intensive airstrikes early Saturday morning targeted Houthi positions near Aden and in the Houthi stronghold of Saada in the north of the country.

* * *

But as Reuters reports,

Yemen’s Houthi militiamen, supported by army units, gained ground in the southern city of Aden on Sunday, pushing back loyalists of the Saudi-backed President Abd-Rabbu Mansour Hadi.

Residents took refuge in their homes and reported hearing sporadic gunfire and blasts of rocket-propelled grenades, and one witness saw a Houthi tank in the downtown Mualla district, which sits astride Aden’s main commercial port.

Houthi forces have inched forward in street-fighting in the city despite an 11-day nationwide bombing campaign by a Saudi-led coalition aimed at halting the Iran-allied group and protecting Hadi’s last bastion of support in the country.

Saudi planes parachuted weapons to Hadi’s armed supporters there on Friday, helping them temporarily beat back Houthi advances.

The crates of light weapons, telecommunications equipment and rocket-propelled grenades were parachuted into Aden’s Tawahi district, on the far end of the Aden peninsula which is still held by Hadi loyalists, fighters told Reuters.

Saudi Arabia has said defending Aden’s government is a “main objective” of its mission and Hadi’s administration has called for a foreign ground intervention into the beleaguered city.

Adel al-Jubeir, Saudi ambassador to the United States, said sending ground troops remained “on the table” and the operation’s spokesman Brigadier General Ahmed Asseri declined to comment on media reports of Saudi special forces there.

*  *  *

So here comes more Military Advisor boots on the ground…

end
This will not go over well!!
(courtesy Stephen Lendman/Global Research)

Saudis Bomb Russian Consulate in Yemen

Russia-consulate-yemen-aden

During US-led NATO’s rape of Yugoslavia, China’s Belgrade embassy was willfully bombed. 

Claiming by mistake didn’t wash. The Pentagon included China’s embassy on its target list.

Yemen is Obama’s war. Saudis and other regional states involved are US proxies. 

Months of planning preceded air and naval strikes. Yemeni targets were carefully chosen – among them Russia’s Aden consulate. Maybe its Sanaa embassy is next.

Bombing its Aden consulate is part of Washington’s increasing confrontation with Moscow – a reckless agenda including vicious propaganda, US Ukraine policy, its growing Eastern European military footprint and saber rattling exercises close to Russia’s borders.

On April 2, Sputnik News reported Saudi air strikes damaged Russia’s Aden consulate.

A source cited said “(t)here is not a single window left.” All Russian citizens may be evacuated from the city.

Since conflict began last week, other countries and UN authorities evacuated their citizens and staff from Yemen.

Remaining risks death or injury. Sputnik reported Saudi authorities denied a Russian plane sent to evacuate its nationals from Yemen permission to land in Sanaa.

It was forced to divert to Cairo. It’s awaiting clearance to complete its mission.

Lebanon’s Mayadeen news channel earlier reported Russia got permission to evacuate its citizens.

No official confirmation followed. Sanaa’s international airport director, Khaled al-Shayef, said the aircraft’s “crew made contact with (Saudi-led) forces while flying over the Red Sea.”

They “refused to allow the landing and the plane had to fly to Cairo.”

Tass reported Russia’s aircraft was denied landing permission “despite a preliminary reached agreement.”

According to Russia’s daily Kommersan, evacuation was delayed until Thursday.

A chartered aircraft accompanied by two others is expected to arrive in Sanaa later today – unless again blocked.

Plans are to evacuate Russian nationals and citizens of the Commonwealth of Independent States.

Saudi-led airstrikes continue. UNICEF said over five dozen Yemeni children were killed so far – many others injured.

Civilian neighborhoods, hospitals, schools and basic infrastructure are being deliberately targeted.

UNICEF reported heavy damage to healthcare and education facilities. Terror-bombing leaves children traumatized.

An increasing humanitarian crisis includes food insecurity, severe malnutrition, growing displacement and lack of medicines, supplies and equipment to treat the injured.

UNICEF Yemen representative Julien Harneis said “children are in desperate need of protection.”

Since March 25 Saudi-led terror bombing began, scores of civilians were killed, hundreds injured.

UN High Commissioner for Human Rights Zeid Raad al-Hussein expressed alarm over a growing humanitarian crisis, saying:

“The situation in Yemen is extremely alarming, with dozens of civilians killed over the past four days. The country seems to be on the verge of total collapse.”

ICRC spokeswoman Sitara Jabeen said Saudi-led forces are hampering delivery of vital medical supplies.

“The thing is that we have to restock our supplies in Yemen with more supplies,” she said.

“If we do not manage to bring these supplies, we would not be able to cope with the situation and the (wounded) would be without treatment.”

“We have been negotiating, but we still haven’t gotten permission” to deliver aid.

Overnight Wednesday, Saudi-led terror bombing targeted a Hodeida dairy/juicing facility. Reports indicate at least 37 killed, another 80 injured.

Preparations for a Saudi-Egyptian-led ground invasion remain underway – with full US support and encouragement.

Mass slaughter may follow. Millions of Yemenis are at risk. US regional policy is ravaging and destroying another country.

previous article quoted a Yemeni national’s call for help – by email to this writer. It was deeply moving.

A second one followed, saying:

“Dear Stephen,

I would like to extend my thanks & gratitude for taking our cause seriously. Happy with tears I read your email and your article.

On behalf of all war affected people in my country, I highly appreciate your human feelings and noble values in raising our cry to the world.

Also thank you for availing me the chance to communicate with you as u can follow up the news about the air strikes.

The situation today is even worse as we witness continuous air strikes & anti-air fighter heavy machine guns with scaring sounds.

Also there is restricted movement in streets. Sana’a is dark no electricity, shortage of food supplies and cooking gas.

Petrol stations started closing running short of petrol.

I can’t sleep fearing that a missile or bomb might come and hit me with my wife & 4 daughters. It is really a difficult life.

Again thank you for standing with us. I wish all best and kindest regards.

Ahmed, Sana’a, Yemen”

Ahmed speaks for everyone in Yemen and region-wide grievously harmed by US imperial viciousness.

Millions of corpses attest to its barbarism. So do countless millions more injured and displaced – their welfare and futures destroyed.

It bears repeating what other articles stressed. No nation in human history caused more harm to more people at home and abroad over a longer duration.

None more recklessly threaten world peace. It hangs by a thread.

Stephen Lendman lives in Chicago. He can be reached at lendmanstephen@sbcglobal.net. His new book as editor and contributor is titled “Flashpoint in Ukraine: US Drive for Hegemony Risks WW III.” http://www.claritypress.com/LendmanIII.html Visit his blog site at sjlendman.blogspot.com. Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network. It airs three times weekly: live on Sundays at 1PM Central time plus two prerecorded archived programs. 

 

end

 

The following should be interesting:   the Falkland islands have stroke oil off its coast. I am sure that Argentina is not amused:

(courtesy UKTelegraph)

 

Oil and gas discovered off Falkland Islands

British exploration companies strike oil off the Falkland Islands in a successful start to a new drilling campaign

 

A

The London-listed oil explorers found 25 metres of oil and 17.5m of gas. Photo: REUTERS/Marcos Brindicci

A group of British exploration companies have discovered oil and gas in an offshore area north of the Falkland Islands, which could raise tensions with Argentina over their disputed ownership.

Falkland Oil and Gas, which shares the exploration area with Rockhopper and Premier Oil, said the ‘Zebedee’ exploration well was “better than expected”.

The London-listed oil explorers found an oil reservoir 25 metres thick and a gas deposit 17.5m thick sandwiched between sands. The well was drilled on a licence area that is 40pc owned by Falkland Oil and Gas, 36pc Premier Oil, and 24pc Rockhopper Exploration.

Samuel Moody, chief executive at Rockhopper, said: “This is a fantastic start to the 2015 Falklands drilling campaign and provides early proof of the significant remaining potential of the North Falkland Basin.”

The oil was found in the first of four wells due to be drilled during an eight month exploration campaign as the Eirik Raude floating drilling rig works through prospective sites to the South and East of the Falkland Islands.

The Eirik Raude exploration rig

“The new discoveries add to our already significant resources we have discovered in the basin and we now look forward to drilling the higher risk Isobel prospect before the rig moves to drill in the South Falkland Basin,” added Mr Moody.

Jean-Pierre Dmirdjian, from broker Liberum, said: “We think today’s discovery will raise the interest of the market for the 3 other wells to be drilled in 2015. This exploration programme could also lead to fuller recognition of the value of the existing Sea Lion asset.”

Shares in Premier Oil jumped 3pc higher in morning trading while Rockhopper shares were up 1pc, and Falkland Oil and Gas shares fell 8.4pc.

 

end

 

Your more important currency crosses early Monday morning:

 

 

 

 

Euro/USA 1.0997 up .0033

USA/JAPAN YEN 119.03 up .163

GBP/USA 1.4946 up .0044

USA/CAN 1.2469 up .0003

This morning in Europe, the Euro rose  again by 33 basis points, trading now well above the 1.09  level at 1.0997; Europe is still reacting to deflation, announcements of massive stimulation, a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, and a possible default of Greece and the Ukraine.

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 slightly down again in Japan by 16 basis points and trading well below the 120 level to 119.03 yen to the dollar.

The pound was up this morning as it now trades just above the 1.49 level at 1.4946  (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 down by 3 basis points at 1.2469 to the dollar despite the 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 : down 37.10  points or 0.19%

Trading from Europe and Asia:
1. Europe stocks closed

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

Gold very early morning trading: $1219.50

silver:$18.17

 

 

Early Monday morning USA 10 year bond yield: 1.84% !!! par  in basis points from Thursday night/

USA dollar index early Monday morning: 96.62 up 7 cents from Thursday’s close. (Resistance will be at a DXY of 100)

 

 

 

This ends the early morning numbers, Monday morning

 

 

 

And now for your closing numbers for Monday:

 

 

Closing Portuguese 10 year bond yield: 1.71% par in basis points from Thursday

 

Closing Japanese 10 year bond yield: .34% !!! par in basis points from Thursday

 

Your closing Spanish 10 year government bond,  Monday, par in basis points in yield from Thursday night.

Spanish 10 year bond yield: 1.22% !!!!!!

 

Your Thursday closing Italian 10 year bond yield: 1.30% par in basis points from Thursday:

trading 8 basis points higher than  Spain.

 

 

IMPORTANT CURRENCY CLOSES FOR TODAY

 

 

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

Euro/USA: 1.0918 down .0045  (down 45 basis points)

USA/Japan: 119.61 up .742  ( yen down 74 basis points)

Great Britain/USA: 1.4876 down .0025   (Pound down 25 basis points)

USA/Canada: 1.2500 down .0046 (Can dollar down 33 basis points)

 

The euro rose during the morning but an avalanche occurred in the afternoon, depressing the euro until closing. It settled down 45 basis points to 1.0918. The yen was down 74 basis points points and closing just below the 120 cross at 119.61. The British pound lost some  ground, 25 basis points, closing at 1.4876. The Canadian dollar was on a roller coaster ride again today against the dollar. It closed at 1.2500 to the USA dollar, down 33 basis points even though oil was well up today.

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.

 

 

end

 

 

Your closing 10 yr USA bond yield: 1.90% up 6 in basis points from Thursday

 

Your closing USA dollar index:

97.23 up 68 cents   on the day.

 

 

European and Dow Jones stock index closes:

 

 

 

England FTSE  closed

Paris CAC  closed

German Dax closed

Spain’s Ibex closed

Italian FTSE-MIB closed

 

 

The Dow:up 149.71 or 0.84%

Nasdaq; up 33.36 or 0.68%

 

 

OIL: WTI 51.91 !!!!!!!

Brent: 57.89!!!!

 

 

Closing USA/Russian rouble cross: 55.28 up 1 1/4 rouble per dollar on the day with the higher oil price .

 

 

 

end

 

 

 

And now your important USA stories:

 

 

First New York trading today:

Dismal Data Sparks Biggest Stock Ramp In 5 Months

From selling-scramble to buying-frenzy on the same dismal data… While this clip seemed appropriate…

Perhaps this one is more appropriate given the magnitude of the schizophrenia…

 

So, here it is in all its glory… Bad news is bad news becomes bad news is awesome news… not entirely surprising we closed on the weaker side after this idiocy

 

Biggest open to close ramp in 5 months

 

Leaving Cash Equity indices up (apart from Trannies) from Thursday’s close…

 

How long until AAPL is included in The Dow Transports? (when they make the iCar)

 

With the biggest short squeeze in 3 months…

 

VIX-banging was the order of the day… (VIX ended the day higher despite the epic surge in stocks)

 

Biotechs closed red…

 

Treasury yields surged higher – unwinding all the compression of Friday… (yields up 5-8bps across the curve today)

 

 

FX markets were a total farce…

 

EURUSD imploded in the last hour and USDJPY ran all its stops…

 

Gold closed higher on the day (despite a surge in the USD) as Silver and Copper slipped and crude ripped…

 

With WTI soaring by th emost in 2 months… narrowing the gap to Brent and once again double-ramping to recent highs…

 

 

Charts: Bloomberg

end

 

The official March payrolls had a huge miss when they reported on Friday with all markets closed.  Instead of the projected 250,000 only 126,000 jobs was added:

 

(courtesy BLS/zero hedge)

 

 

March Payrolls Huge Miss: Only 126,000 Jobs Added, Worst Since December 2013

 

We warned yesterday that the “whisper expectation is for a NFP print that will be well below consensus, somewhere in the mid-100,000s if not worse now that the bartender hiring spree is over”, and we were right: moments ago the BLS reported that in March a paltry 126K jobs were added, nearly 50% below the 245K expected, and the lowest monthly increase since March 2013.The unemployment rate was unchangned at 5.5%.

The change in total nonfarm payroll employment for January was revised from +239,000 to +201,000, and the change for February was revised from +295,000 to +264,000. With these revisions, employment gains in January and February combined were 69,000 less than previously reported.  Over the past 3 months, job gains have averaged 197,000 per month.

Most importantly this ends any speculation about a rate hike in mid 2015, or ever for that matter, as virtually all Fed credibility is now lost.

 

And before you ask, no it wasn’t the weather:

 

More from the report:

Total nonfarm payroll employment increased in March (+126,000). Over the prior 12 months, employment growth had averaged 269,000 per month. In March, employment continued to trend up in professional and business services, health care, and retail trade, while employment in mining declined. (See table B-1.)

Employment in professional and business services trended up in March (+40,000). Job growth in the first quarter of 2015 averaged 34,000 per month in this industry, below the average monthly gain of 59,000 in 2014. Within professional and business services, employment continued to trend up in architectural and engineering services (+4,000), computer systems design and related services (+4,000), and management and  technical consulting services (+4,000).

Health care continued to add jobs in March (+22,000). Over the year, health care has added 363,000 jobs. In March, job gains occurred in ambulatory health care services (+19,000) and hospitals (+8,000), while nursing care facilities lost jobs (-6,000).

In March, employment in retail trade continued to trend up (+26,000), in line with its prior 12-month average gain. Within retail trade, general merchandise stores added 11,000 jobs in March.

Employment in mining declined by 11,000 in March. The industry has lost 30,000 jobs thus far in 2015, after adding 41,000 jobs in 2014. The employment declines in the first quarter of 2015, as well as the gains in 2014, were concentrated in support activities for mining, which includes support for oil and gas extraction.

Employment in food services and drinking places changed little in March (+9,000), following a large increase in the prior month (+66,000). Job growth in the first quarter of 2015 averaged 33,000 per month, the same as the average monthly gain in 2014.

Employment in other major industries, including construction, manufacturing, wholesale trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.

In March, the average workweek for all employees on private nonfarm payrolls declined by 0.1 hour to 34.5 hours. The manufacturing workweek decreased by 0.1 hour to 40.9 hours, and factory overtime remained at 3.4 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.1 hour to 33.7 hours. (See tables B-2 and B-7.)

In March, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $24.86. Over the year, average hourly earnings have risen by 2.1 percent. Average hourly earnings of private-sector production and nonsupervisory employees rose by 4 cents to $20.86 in March. (See tables B-3 and B-8.)

 

 

end

 

 

With markets closed, the initial reaction was the bad news is bad for the stock markets;

i)futures on S and P falter

ii) bond yields plummet

iii) USA dollar falters against all currencies

 

(courtesy zero hedge)

 

Payrolls Reaction – Bad News Is Bad News: Stocks Down, Bonds Up As Carry Trades Unwind

 

Uh-oh… the payrolls “bad news” does not appear for now to be bad enough to prompt a “good news” buying mania as perhaps – just perhaps – the market is coming around to the total farce of smoke and mirrors of lower rates and QE doing anything for the real economy is being exposed… Dow futures are down 90 points, TSY yields down 7-8bps and USD weakness spreads as carry trades are unwound en masse.

Stock futures not happy…

The entire bond complex is seeing yields collapse…

as The Dollar gets dumped and Swissy soars…

The S&P has joined the Dow in the red for 2015…

Charts: Bloomberg

 

end

 

The number of Americans not in the labour force rises to 93.2 million poor souls. The labour participation rate drops to 62.7%

 

(courtesy zero hedge)

Americans Not In The Labor Force Soar To Record 93.2 Million As Participation Rate Drops To February 1978 Levels

So much for yet another “above consensus” recovery, and what’s worse it is, well, about to get even worse, because while the Fed keeps baning some illusory drum that slack in the economy is almost non-existent, the reality is that in March the number of people who dropped out of the labor force rose by yet another 277K, up 2.1 million in the past year, and has reached a record 93.175 million.

Indicatively, this means that the labor force participation rate dropped once more, from 62.8% to 62.7%, a level seen back in February 1978, even as the BLS reported that the entire labor force actually declined for the second consecutive month, down almost 100K in March to 156,906.

Why is this important? Because as long as the true employment rate, that of the civilian employment to total population, remains at depression levels, there will be no incrases in average hourly earnings.

end
The waiter and bartender growth is now over as the report shows the fewest jobs added.
(courtesy zero hedge)

The Waiter And Bartender Recovery Is Over: Fewest Food Workers Added Since June 2012

Yesterday we warned that “the whisper expectation is for a NFP print that will be well below consensus, somewhere in the mid-100,000s if not worse now that the bartender hiring spree is over.” As already noted, we were spot on with the abysmal jobs print, the worst since 2013. We were also correct about the end of the “bartender hiring spree” because as the following chart shows, the number of “Food Services and Drinking Places” workers, aka waiters and bartenders just saw its worst monthly increase since June of 2012.

So much for the “waiter and bartender” recovery so heavily praised by the WSJ a month ago.

That said, we also predicted something else earlier today just ahead of the payroll number:

This, too, was correct, because despite the dramatic slowdown in bartender hiring, the total series just hit a new all time high of 11.017 million waiters and bartenders employed in the US.

So aside from food workers, what other job categories saw job gains (of Americas 55 and over) in March?

Well, it will hardly come as a surprise, that four of the five most active job categories hiring in March were also the lowest paid:

  • Education and Health saw the addition of 38K workers
  • Retail Trade added 26K
  • Leisure and Hospitality added another 13K
  • Temp workers increased by 11K.

We point this out just in case anyone is still worried about “wage growth.”

end
On Sunday, Goldman Sachs states that it is time to put a hold on rate hikes.  This sends gold flying:
(courtesy Goldman Sachs/zero hedge)

Gold Surges After Goldman Says It Is Time To “Put Rate Hikes On Hold For Now”

While equity futures are modestly higher compared to Friday’s early 9:15 am close, where only a short, 45 minute long bloodbath was allowed on Good Friday after the worst jobs report in two years, the one asset class that has moved the most by far this evening is gold, which has spiked by 1.5% and is on the verge of breaking out above the resistance level that has proven a tractor beam to any momentum breakout over the past 2 months.

If gold rises above $1225 overnight, or rather if the trading desk under the supervision of Benoit Gilson, the BIS’ “head of FX and gold” allows the price of paper gold to reach that level, a huge short squeeze will be imminent because, as a reminder, in addition to the EUR, gold shorts are also at a record high.

As for the reason why gold is suring off the bat, the main reason cited by trading desks is what Goldman announced late on Friday and what Zero Hedge reported first, namely Goldman’s economic team strong hint to the Federal Reserve that “believe that the right policy would be to put hikes on hold for now.

This is the punchline from Goldman’s 180 degree turn on its “above consensus” growth forecast for the US economy:

Simultaneous shocks are more likely to do the trick. Exhibit 5 provides an example of what could raise the confidence score above 75%, a likelihood one might consider to qualify as “reasonable confidence.” The chart shows the marginal impact on the confidence score of a combination of shocks. A ½pp improvement in the growth outlook would raise the confidence score by 8bp, a ½pp pick-up in wage growth on top of that would raise the confidence score by another 4pp and an additional ¼pp shock to inflation expectations would be enough to boost the confidence score for the combined scenario to over 75%.

 

It Is Hard to Be Confident

The FRB/US model is a helpful tool for analyzing the uncertainty around the inflation outlook, but it comes with a number of caveats. Inflation expectations, for example, play a very important role in determining inflation 2-3 years ahead, resulting in relatively minor roles for recent news on payrolls or actual inflation. Our analysis is therefore best seen as an illustration of the issues involved.

The analysis suggests that it is hard to be“reasonably confident” in the inflation outlook given current economic conditions, unless several inflation drivers rise at the same time. We therefore do not have much confidence in the inflation outlook and believe that the right policy would be to put hikes on hold for now.

One can assume that the BIS gold selling division will be very busy when the Fed trial balloons not only an end to rate hikes, but leaks the first hint that QE4 is just around the corner.

 

end

 

This morning, Janet Yellen’s labour index falters terribly and yet the stock market opens up in positive territory:

(courtesy zero hedge)

Great News! Labor Market Conditions Collapse Sends Stocks To Strongest Opening Rally Of 2015

We can’t make this up. Following Friday’s dismal payrolls, today’s Fed Labor Market Conditions Index (the aggregate index of all Yellen’s indicators) collapsed to its lowest in almost 3 years. That was just the news that stocks needed to complete the biggest opening rally of the year so far…

Worst labor market conditions in almost 3 years…

So buy the bad news…

end
Now even the Philly Fed admits that the BLS data is BS:
(courtesy zero hedge)

Even The Fed Admits Bureau Of Labor Statistics Data Is Now Meaningless

 

Shortly after Japan admitted all of its “rising wages” data for 2014 had been fabricated and on close examination all the optimistic increase in base wages was merely pre-election propaganda by the Abe government…

 

… we now find none other than the Philly Fed admittingthat it no longer can report its state coincident and leading indexes because “the recent benchmark data revisions from the Bureau of Labor Statistics produced greater changes to the Philadelphia Fed’s estimating methodology than are typical. While estimates for most states do appear to be reasonable, those for some states are not.

In other words, the BLS has “adjusted” its “data” so much (to fit within its political propaganda goalseek parameters) not even the Federal Reserve can make any sense of it, and can no longer use it for its own data analysis purposes.

Luckily for the permalgobulls, the BLS had enough credibility that its horrible March jobs data was enough to launch the S&P 500 on the biggest intraday ramp so far in 2015.

Source: Philly Fed, h/t James

 

end

 

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