April 9./Greece pays 460 million euros to the IMF/They are given 6 days to complete reforms to the Troika/Yemeni rebels seize town in centre of oil patch in SW Yemen/also Yemeni rebels bring welding equipment to the Central Bank of Yemen branch in Aden/Iran and USA do not agree on what was agreed in their deal last week/Huge increase in GLD to the tune of 2.98 tonnes/

Good evening Ladies and Gentlemen:

 

 

Here are the following closes for gold and silver today:

 

 

Gold:  $1193.60 down $9.50 (comex closing time)

Silver: $16.16 down 28 cents (comex closing time)

 

In the access market 5:15 pm

 

Gold $1194.70

Silver: $16.18

 

 

 

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

Despite the fact that gold and silver were down today, the gold/silver equity shares were higher.  Thus expect gold and silver to rise tomorrow.

 

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 10 notices served for 1000 oz.  Silver comex surprised again with  114 notices for 570,000 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 surprisingly rose by a huge 2015 contracts despite the fact that Wednesday’s silver price was down by 37 cents. The total silver OI continues to remain extremely high with today’s reading at 171,715 contracts. The front April month has an OI of 185 contracts for a loss of 200 contracts. We are still close to multi year high in the total OI complex despite a record low price. This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end.

 

We had 114 notices served upon for 570,000 oz.

 

 

In gold the collapse of OI stops. The total comex gold OI rests tonight at 391,054 for a gain of 483 contracts despite the fact that  gold was down $7.50 on Wednesday. We had 10 notices served upon for 1000 oz.

 

 

Today, we had a huge addition of 2.98 tonnes of  gold inventory at the GLD/  Gold Inventory rests at 736.04  tonnes

 

In silver, / the SLV/Inventory /we have no changes 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 rise by a considerable 2015 contracts with the 38 cent fall in price on Wednesday.  The OI for gold rose by 483  contracts as the price of gold fell on Wednesday to the tune of $7.50.

(report Harvey/)

2.Greece pays the iMF today.  They are now given 6 days to complete their reforms and present them to the Troika et al

(zero hedge)

3. Bank deposits no longer guaranteed by the Austrian state. This spells trouble when the bail in is orchestrated to save the Austrian banks

(Mark O’Byrne)

4.Yemen rebels seize a very important town in the southwestern section of Yemen.  This is the region that is very oil rich.  Also in Aden, the Yemeni rebels arrive at the central bank of Yemen with welding equipment. They are intent on stealing the funds and possibly any gold still lying around there

(zero hedge)

5. Despite the lower Euro, German industrial production falters

(zero hedge)

6. Seems that Iran and the uSA do not agree on the terms of their agreement.  Iran wants all sanctions lifted by signing..the Americans state that the sanctions will be lifted over time.

(zero hedge)

7. Wholesale sales in the USA faltering.  Along with the fall in factory orders this is generally a harbinger of a recession.  Also inventories are rising despite falling demand.

(courtesy zero hedge)

 

8. Great commentaries tonight from Bill Holter

(Bill Holter )

 

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 rose by 483 contracts from  390,571 up to 391,054 despite the fact that gold was down by $7.50 on Wednesday (at the comex close).  We are now in the active delivery month of April and here the OI fell by 76 contracts down to 2,731. We had 0 contracts filed upon on Wednesday so we lost another 76 contracts or 7600 oz will not stand for delivery in April. The next non active delivery month is May and here the OI fell by 40 contracts down to 421.  The next big active delivery contract month is June and here the OI fell by 651 contracts down to 263,938. June is the second biggest delivery month on the comex gold calendar. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 62,289  (Where on earth are the high frequency boys?). The confirmed volume on Wednesday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 123,053 contracts. Today we had 10 notices filed for 1000 oz.

And now for the wild silver comex results.  Silver OI rose by 2015  contracts from 169,700 up to171,715  despite the fact that silver was down by 38 cents, with respect to Wednesday’s trading . We are now in the non active delivery month of April and here the OI fell to 185 for a loss of 200 contracts.  We had 200 notices filed yesterday so we neither gained nor lost any silver ounces in this delivery month of April. The next big active delivery month is May and here the OI fell by 3,173 contracts down to 88,673 . The estimated volume today was poor at 26,916 contracts  (just comex sales during regular business hours. The confirmed volume yesterday  (regular plus access market) came in at 64,025 contracts which is excellent in volume. We had 114 notices filed for 570,000 oz today.

 

 

April initial standings

April 9.2015

Gold

Ounces

Withdrawals from Dealers Inventory in oz  nil
Withdrawals from Customer Inventory in oz 96.45 oz (3 kilobars), Manfra
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz 128.605 oz (JPMorgan)
No of oz served (contracts) today 10 contracts (1000 oz)
No of oz to be served (notices)   2807 contracts(280,700) oz
Total monthly oz gold served (contracts) so far this month 686 contracts(68,600 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   oz

Total accumulative withdrawal of gold from the Customer inventory this month

  163,772.1 oz

Today, we had 0 dealer transaction

total Dealer withdrawals: nil oz

 

 

we had 0 dealer deposits

 

total dealer deposit: nil oz

 

we had 1 customer withdrawal

 

i) Out of Manfra:  96.45 oz (3 kilobars)

total customer withdrawal: 96.45 oz (3 kilobars)

 

we had 1 customer deposit:

i) Into JPMorgan:  128.605 oz

total customer deposit: 128.605 oz

 

We had 0 adjustments

 

Today, 0 notices was issued from JPMorgan dealer account and 10 notices were issued from their client or customer account. The total of all issuance by all participants equates to 10 contracts of which 5 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 (686) x 100 oz  or  68,600 oz , to which we add the difference between the open interest for the front month of April (2731) and the number of notices served upon today (10) 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 (686) x 100 oz  or ounces + {OI for the front month (2731) – the number of  notices served upon today (10) x 100 oz which equals 340,700 oz or 10.59 tonnes of gold.

 

we lost 76 contracts or 7,600 oz of gold that will not stand for delivery in April

 

 

 

 

Total dealer inventory: 631,988.064 or 19.65 tonnes

Total gold inventory (dealer and customer) = 7,849,645.349  oz. (244.15) 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 9 2015:

Silver

Ounces

Withdrawals from Dealers Inventory 61,928.17 oz (Brinks)
Withdrawals from Customer Inventory 1,686,101.851 oz(Delaware, CNT,HSBC,Scotia)
Deposits to the Dealer Inventory  432,769.940 oz (CNT)
Deposits to the Customer Inventory 1,450,284.63 (JPM,CNT)
No of oz served (contracts) 114 contracts  (570,000 oz)
No of oz to be served (notices) 171 contracts(855,000 oz)
Total monthly oz silver served (contracts) 315 contracts (1,575,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  548,169.5 oz
Total accumulative withdrawal  of silver from the Customer inventory this month  4,531,912.7 oz

Today, we had 0 deposits

Today, we had 1 deposit into the dealer account:

i) Into CNT:  432,769.940 oz

total dealer deposit: 432,769.940   oz

 

we had 1 dealer withdrawal:

i) Out of the Brinks vault: 61,928.17 oz

total dealer withdrawal: 61,928.17 oz

 

We had 2 customer deposits:

i) Into CNT:  167,095.99 oz

ii) Into JPMorgan: 1,283,188.64 oz

total customer deposits:  1,450,284.63  oz

*this is the second day in a row that we had greater than 1 million oz of silver arrive at JPMorgan customer side.

 

We had 4 customer withdrawals:

 

i) Out of Delaware:  179,204.711 oz

ii) Out of HSBC:  5,069.25 oz

iii) Out of CNT: 1,310,969.35 oz

iv) Out of Scotia: 90,858.54

 

total withdrawals;  1,686,101.851 oz

 

we had 1 adjustment:

 

i) Out of the CNT vault:

158,441.64 oz was adjusted out of the customer and this landed into the dealer account at CNT

 

Total dealer inventory: 63.235 million oz

Total of all silver inventory (dealer and customer) 176.373 million oz

.

The total number of notices filed today is represented by 134 contracts for 570,000 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 (315) x 5,000 oz    = 1,575,000 oz to which we add the difference between the open interest for the front month of April (385) and the number of notices served upon today (114) x 5000 oz equals the number of ounces standing.

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

315 (notices served so far) + { OI for front month of April(185) -number of notices served upon today (114} x 5000 oz =  1,930,000 oz standing for the April contract month.

we neither gained nor lost any silver ounces standing for this delivery month of April .

 

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 9.2015 we have a huge addition of 2.98 tonnes of gold inventory/GLD inventory tonight stands at 736.04 tonnes

April 8.2015:no changes in the GLD/Inventory 733.06 tonnes

 

April 7. we had another withdrawal of 4.18 tonnes of gold at the GLD/Inventory rests at 733.06 tonnes

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

 

April 8/2015 /  we had a huge addition of 2.98 tonnes of  gold at GLD/ inventory at the GLD/Inventory stands at 736.04 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 : 736.04 tonnes.

 

end

 

And now for silver (SLV):

April 9/2015 no changes in inventory at the SLV/Inventory rests at 321.839 million oz/

April 8.2015: no changes in inventory at the SLV/Inventory rests tonight at 321.839 million oz

April 7.2015: no changes in inventory at the SLV/Inventory rests tonight at 321.839 million oz

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

 

 

April 9/2015 we had no changes  in inventory at the SLV/ 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 8.0% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 61.5%

Percentage of fund in silver:38.1%

cash .4%

( April 9/2015)

Sprott gold fund finally rising in NAV

2. Sprott silver fund (PSLV): Premium to NAV rises to + 1.44%!!!!! NAV (April 9/2015)

3. Sprott gold fund (PHYS): premium to NAV falls -.30% to NAV(April 9/2015

Note: Sprott silver trust back  into positive territory at +1.44%.

Sprott physical gold trust is back into negative territory at -.30%

Central fund of Canada’s is still in jail.

 

end

 

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

 

Gold and silver trading early this morning

 

(courtesy Goldcore/Mark O’Byrne)

The banking system inside Austria is burning as derivatives blow up.

 

Bank Deposits No Longer Guaranteed By Austrian Government

Austria will remove state guarantee of bank deposits
Austrian deposit plan given go ahead by the EU
– Banks to pay into a deposit insurance fund over 10 years
– Fund will then be valued at a grossly inadequate €1.5 billion
– New bail-in legislation agreed by EU two years ago

– Depositors need to realise increasing risks and act accordingly
– “Bail-ins are now the rule” and ‘Bail-in regime’ coming


Bank deposits in Austria will no longer enjoy state protection and a state guarantee in the event of bank runs and a bank collapse when legislation is enacted in July. The plan to ensure that the state is no longer responsible for insuring deposits has been readied by the Austrian government in conjunction with the EU two years ago according to Die Presse.

goldcore_chart1_9-04-15
Currently, Austrians have their bank deposits guaranteed to a value of €100,000 – the first half to be provided by the failing bank and the other by the state. From July, however, the state will be removed from the process and a special bank deposit insurance fund is to be set up and paid into by banks to meet potential shortfalls.

The fund will be filled gradually over the next ten years to a value of €1.5 billion. In the the event of a failure of a major bank in the intervening period the legislation will allow the fund to borrow internationally although who will provide such funding and on what terms is not clear, according to Austria’s Die Presse.

However, even when the scheme is fully funded it is clear that €1.5 billion will be woefully inadequate to deal with a bank failure.

€1.5 billion amounts to a mere 0.8% of total deposits in Austria. It is highly unlikely that deposits of any major bank would be adequately covered and in the event of multiple concurrent bank failures it is likely that most savers would be wiped out.

Die Presse gives the example of Bank Corp in Bulgaria. When that bank failed it had €1.8 billion in deposits but there was only €1 billion in the deposit insurance fund.

On a positive note “inheritances, real estate transactions, a dowry or a divorce [will be] be protected for three months, even up to an amount of 500,000 euros,” according to Die Presse (via google translate).

It is telling that, as Die Presse reports, the framework for the legislation was agreed in Europe two years ago and the legislative change has to take place by this summer. It was on June 27th, 2013 that Irish Finance Minister Michael Noonan made his infamous declaration that “bail-in is now the rule.”

The Die Presse story suggests that the Austrians may have gotten a derogation or an exemption from the new bail-in legislation which was enacted in 2013.  “Bail-in is now the rule” as Irish finance Minister Michael Noonan warned in June 2013. Noonan admitted then that the move to not maintain deposits as sacrosanct was a “revolutionary move.” That it was and yet investors and depositors remain very unaware of the risks of bail-ins both to their own deposits but also to the wider financial system and economy.

At that time average depositors with deposits of less than €100,000 were given no indication that their savings may be at risk even as EU institutions were working on removing state liability for such deposits.

Romania’s Bursa newspaper points out that this is not some monetary experiment being foisted upon some peripheral Eurozone country. Austria is regarded as being part of the EU’s “hard core”.

What unfolds in Austria will likely follow across the EU. It may be that Austria was prompted to enact this legislation first among its European partners precisely because it anticipates major banks failures in the wake of the failure of its “bad bank”, Heta.

Also many Austrian banks have large exposures to Eastern European countries and property markets. Austrian banks are the most exposed to potential losses from tougher sanctions on Russia according to Fitch and the IMF.  Swedish, French and Italian lenders are also vulnerable, the International Monetary Fund also warned.

Deposits in the insolvent banking system are no longer safe. So where is one to place one’s savings?

goldcore_chart2_9-04-15

As Germany’s Deutsche Wirtschafts Nachrichten opines “depositors will have to thoroughly research the situation of the bank they place their savings in”. It adds, “this task is extremely difficult, because of the muddy financial statements and of the complexity of the interdependencies in the banking system”.

While Austria may be the first in enacting this legislation there is no guarantee that savers, particularly in the peripheral nations, will receive any indication that their deposits may be at risk.

Emergency legislation can be drawn up over-night – as was the case when Ireland was “bailed-out” or rather Ireland’s banks were bailed out and Ireland’s tax payers were bailed in. The developing bail-in regimes, means that soon individual and corporate depositors could see their savings and capital ‘bailed in’.

These are important developments. Average savers can no longer rely on the state to protect their deposits. They provide a good reason for depositors to allocate some of their funds to physical gold stored outside of the banking system, in the safest jurisdictions in the world.

Must Read Guides: Protecting Your Savings In The Coming Bail-In Era (11 pages)

Must Read Guides: From Bail-Outs To Bail-Ins: Risks and Ramifications –  Includes 60 Safest Banks In World
(51 pages)

MARKET UPDATE

Today’s AM LBMA Gold Price was USD 1,196.00, EUR 1,113.33 and GBP 808.49 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,211.10, EUR 1,113.66 and GBP 811.40 per ounce.

Gold fell 0.59 percent or $7.10 and closed at $1,203.20 an ounce yesterday, while silver slid 2.13 percent or $0.36 closing at $16.52 an ounce. Gold has remained robust in most currencies except the dollar and remains above EUR 1,100 and GBP 800 per ounce.

Gold fell in dollar terms for its third session after some traders interpreted comments from the U.S. Fed minutes released yesterday as hawkish. Market participants still think a June interest rate hike remains a possibility despite the appalling jobs number last Friday.

goldcore_chart4_9-04-15
The yellow metal dipped below its psychological $1,200 per ounce level yesterday as the U.S. dollar surged higher. The greenback hit a one week high against the euro at 1.0730. Silver sunk to a three week low.

Gold prices in Singapore was off 0.5 percent at $1,196.30 an ounce near the end of day trading prior to ticking slightly higher in London.

Holdings of SPDR Gold Trust, the world’s largest gold ETF, edged down to 733.06 tons on Wednesday, from its previous close of 735.45 tons on Tuesday.

Technical analysis suggest gold could drop to $1,181 as it has cleared a support at $1,205, based on a Fibonacci retracement analysis. The next support may be at $1,181, the 23.6 percent level.

Physical gold buying in China has briefly waned but powerhouse India is still seeing robust physical demand.

Fed governors, Dudley and Powell yesterday alluded to scenarios in which the central bank could make an initial move earlier than many now expect and then proceed in a slow and gradual manner on further rate increases.

As ever, many members of the Fed talk a good hawkish talk but never walk the hawkish walk. Meaning that despite continual talk of interest rate rises for years now – none never come. They will some day but it may not be this year.

In Europe, gold for immediate delivery in the late morning was trading at $1,196.30 or down 0.41 percent. Silver was $16.29 or off 1.16 percent and platinum was $1,159.55 or down 0.32 percent.

 

end

 

(courtesy Pam and Russ Martens/GATA)

 

 

Pam and Russ Martens: Americans don’t trust the Fed because it’s too secretive

Section:

By Pam and Russ Martens
Wall Street on Parade, New York
Wednesday, April 8, 2015

Having defeated the Crown in a bloody revolution some two centuries ago, Americans don’t like living under a patriarchy, oligarchy or kleptocracy. Unfortunately, the U.S. central bank, the Federal Reserve, is a little of all three.

On Monday this week the president of the Federal Reserve Bank of New York stated in a speech that “the Federal Reserve already is very transparent and accountable to Congress and to the public.” Two days later Wall Street On Parade attempted to get one piece of very basic information from the Fed and got the royal runaround.

We wanted to know if JPMorgan Chase, a bank operating under a deferred prosecution agreement for two felony counts and under a criminal investigation for currency rigging, was still the custodian of $1.7 trillion of mortgage-backed securities owned by the Federal Reserve, as we had reported on November 3, 2014.

Other basic information from the Fed is also off-limits to the press.

Each day the president of the United States posts his daily schedule on the Internet. Trying to find out whom the chairman of the Federal Reserve has met with is far more secretive. …

… For the remainder of the commentary:

http://wallstreetonparade.com/2015/04/why-americans-dont-trust-the-fed-i…

 

end

 

The 11 rules for gold/silver manipulation:

(courtesy James McShirley/GATA)

James McShirley: 11 rules for gold price suppression

Section:

By James McShirley
www.LeMetropoleCafe.com
Wednesday, April 8, 2015

1. Daily gold gains are capped at 1 percent (limit up) or 2 percent (expanded limit up).

2. Gold isn’t allowed to have any follow-through rallies.

3. Gold is attacked at specific times — 3 a.m. ET, pre-Comex and Comex open, NYSE open, London close, Comex close, 6 p.m. access trade open, and any opportune, thinly traded access markets.

4. Gold is attacked on all significant government data releases, especially the monthly nonfarm payrolls Friday report.

5. Gold is attacked on any ordinarily bullish news — war, turmoil, economic crises, and Wall Street jitters.

6. Gold is attacked on all significant Comex option expiration and first-notice days, assuring that the maximum number of calls expire worthless, mitigating deliveries.

7. An attack on gold is frequently signaled by attacking either silver, HUI stocks, or both.

8. Flash crashes with no corresponding explanation always keep speculative longs stopped out or in losing positions.

9. New York and London are the centers of gold price suppression, so the London PM fix will be lower or no higher than $5 from the AM fix.

10. Comex margin changes, both higher and lower, are always to the detriment of gold longs.

11. Gold is never allowed to anticipate any bullish developments, nor is it allowed to be a barometer for currency largesse.

—–

James McShirley writes for GATA Chairman Bill Murphy’s LeMetropoleCafe.com.

 

end

 

(courtesy Bullionstar.com/GATA)

Torgny Persson: Pro-gold governments and central banks

Section:

7:15a ET Friday, April 9, 2015

Dear Friend of GATA and Gold:

Bullion Star proprietor Torgny Persson writes this week that not all central banks are anti-gold. There are more or less pro-gold governments too, Persson writes, including those of China, Russia, Singapore, and even the super-government of Europe, the European Central Bank. Persson’s commentary is headlined “Pro-Gold Governments and Central Banks” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/bullionstar/pro-gold-governments-and-c…

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

end

A really good one tonight from Bill Holter

 

(courtesy Bill Holter/Miles Franklin)

 

Ignorant depositors

 

The plan for today was to pen an article regarding silver.  I believe silver to be the cheapest, most undervalued asset on the planet.  From these current levels I believe any capital in silver is a no brainer.  Let’s hold off on this thought until next week however, a more pressing thought has come up.

  Let’s start with a question.  Would you ever lend money to someone you knew for a fact was bankrupt?  Or, would you lend money to someone who told you to your face they were cooking their own book?  Isn’t this exactly what you are doing any time you deposit money into most any bank?  Without getting long winded on this aspect, you do remember back in 2010 or thereabouts our banks in the U.S. were allowed to outright cook their books?  The banks were no longer required to price their portfolios at “marked to market” prices.  Since then, they can simply “make up” whatever prices they choose and report those.
  It is the same situation in Europe but they have had a little “help” in their fraud.  For example let’s look at Greek bonds that are held in banks all over Europe.  Greece without a doubt cannot mathematically pay back their debt.  They do not have enough cash to even make next month’s “credit card payment” without an infusion from somewhere.  I use this term credit card payment because that is exactly what these are, this week for example is a miniscule 500 million euros, not even half a ham sandwich in the global scheme of things.  If they cannot make a payment or they go through a restructuring, or in all probability they cut a deal with the Russians and Chinese followed by “we quit and we aren’t paying you” …what are these bonds really worth?  Ten cents?  Five?  Zero?
  My point is this, these bonds are carried on balance sheets at 100 cents on the euro!  Banks, including the European Central Bank itself values these bonds at par as if they were pristine a credit.  The BIS has allowed sovereign credits within Europe to be carried at par on bank balance sheets.  This is clearly bogus.  It was my intention to also speak about Spain’s short term interest rates going negative.  They were my original thought to “would you lend money to a bankrupt entity?”.  While writing this, two pieces of news have come out and spotlights my point.  Greece has in fact made the April payment, now we wait for the next due date which finance minister Varoufakis says “will be different”, what does he mean by “different”?  Mr. Tsipras concluded his meeting in Moscow, what exactly was discussed?  Greece has also surprised us yesterday by contemplating calling all new debt taken on since 2012 as “odious” http://www.zerohedge.com/news/2015-04-08/odious-debt-has-finally-arrived-greece-write-illegal-debt .  I believe the new amount of debt taken on is over 100 billion euros, does this mean they will just walk away from this post 2012 debt and only service the earlier debt?  Was this a part of the discussions in Moscow?  Greece will continue to pay on pre 2012 debt but not post debt?  Is this debt “justified” being priced at 100% or par or should a minor adjustment be in order?
  As you know from previous writings, the Austrian banking system is wobbling because of the rise in the Swiss franc versus the euro.  This was caused by Hypo Alpe Adria bank not being able to make a 600 million euro payment.  This has affected their counterparties and has since spread.  Could this paltry amount take down the Austrian banks?
  Do you see what today’s exercise is all about?  It looks like amounts as small as “millions” which only amount to credit card monthly payments may be enough to torpedo individual banks …and even a country!  The fact that the world is so levered and interconnected means  very small “non payments” have the ability to spread and take everything down with it… and it looks like this is exactly what is happening!
  I have said all along that our entire financial system was about “collateral” and it would be the realization the collateral was “bad” as the reason for collapse.  This is where we are today, extremely small interest payments which cannot be made are about to expose the true value of the underlying “collateral”.  Just because the regulators have allowed banks to mark their assets to fantasy levels does not mean the bad collateral will not fail.  It will.  IT ALL WILL!  This is the reason “bail in” legislation has been written and put into place all over the world.  Because they KNEW when they wrote the legislation they would be forced to use it.
  The white knight of “bail outs” will not and can no longer ride in to save ignorant depositors.  I use the word “ignorant” because who in their right mind would lend their money at a negative interest rate …in a debasing currency …to a bank that lies about their asset quality …in a system where if one fails they all fail?  And on top of this, the regulators, central banks and governments themselves have already written legislation saying “when it comes down, we will take your money to make ourselves whole”.  Who would do this?  I’m pretty sure holding gold is a safer bet but that’s just me and everyone knows I wear a tin foil cowboy hat.  Regards,  Bill Holter
end

 

Here is a link to Bill Holter’s latest interview with Sean Corrigan.

end

 

Early Thursday morning trading from Europe/Asia

 

1. Stocks mainly higher on major Chinese bourses  /Japan higher /yen rises to 119.97

1b Chinese yuan vs USA dollar/yuan  weakens to 6.2063

2 Nikkei up by 147.61  or 0.75%

3. Europe stocks all in the green/USA dollar index up to 98.16/Euro falls to 1.0770

3b Japan 10 year bond yield .35% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.97/

3c Nikkei still  above 19,000

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

3e WTI  51.62  Brent 57.16

3f Gold down/Yen up

3gJapan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion.  Japan’s GDP equals 5 trillion usa.

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

3h  Oil 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 20.73%/Greek stocks up by .53% today/ still expect continual bank runs on Greek banks.

3j  Greek 10 year bond yield:  11.25% (down by 40 basis point in yield)

3k Gold at 1199.80 dollars/silver $16.32

3l USA vs Russian rouble;  (Russian rouble up 1 1/4  rouble/dollar in value) 51.92 , with the higher brent oil price/the rouble is the best acting currency this year!!

3m oil into the 51 dollar handle for WTI and 57 handle for Brent/Saudi Arabia increases production to drive out competition.

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 repaid the IMF today.  There will be nothing left after that.

(see article below/zero hedge)

3t

4.  USA 10 year treasury bond at 1.88% early this morning. Thirty year rate well below 3% at 2.52%/yield curve flatten/foreshadowing recession.

 

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

 

 

(courtesy zero hedge/Jim Reid Deutsche bank)

 

US Dollar Surge Returns, Pushes Equity Futures Lower

As noted several hours ago, the main story overnight is not that Greece once again narrowly averted a Grexit when it was reported it would make its scheduled payment to the IMF today (adding that next month is a “different story”) a development that was met with yet another ultimatum by its “partner“, the Eurozone, but the dot com bubble deja vu-esque move in Hong Kong stocks, where the Chinese, seemingly tired of pushing up their local market into the stratosphere have turned their attention southward and are desperate to buy up every single Hong Kong stock.

As a result, the Hang Seng (+2.7%) jumped to its highest level since 2007, gaining as much as 6.4%, with volume turnover on the Index ~400% above the 30-day average. Gains were led by Chinese regulators allowing mainland Chinese funds to buy shares in HK and as analysts see HK stocks as undervalued relative to their Chinese peers, due to the out performance of the Shanghai Comp. vs. HSI. Despite opening above 4,000 for the first time since 2008, the Shanghai Comp (-0.9%) moved lower given the flows away from Chinese equities into Hong Kong stocks. Nikkei 225 (+0.75%) extended on its 15-year highs and is now in close proximity to the key 20,000 level, further underpinned by JPY weakness. JGBs rose with the curve notably flatter after today’s 30yr auction which despite a lower than prev. b/c, saw the yield in price narrow significantly to 0.19% vs. prev. 0.34%.

European equities started the session on the front foot, taking the lead from the positive Wall Street close and Asia-Pacific session overnight. Furthermore, sentiment has also been bolstered by confirmation that Greece are to make their scheduled repayment to the IMF Later today, which has subsequently seen the GR/GE spread tighter by 21bps. On a sector specific basis, auto-names outperform and have helped support the DAX after bouncing back from yesterday’s declines and also being assisted by lower aluminium prices in the wake of Alcoa’s after-market report yesterday. Elsewhere, fixed income markets trade in a relatively directionless manner with things otherwise quiet from a European perspective. However, heading into the North American crossover, Gilts have moved higher after breaking above yesterday’s highs with volumes otherwise light.

In FX markets, the USD-index trades higher with no stand out news supporting the move higher, with price action instead led by a technical break below 1.4850 in GBP/USD which triggered stops along the way, with EUR/USD extending further losses and the next level of support said to be at 1.0714 – its March 31st low. With regards to GBP, GBP/USD has pared the entire gains from yesterday which were attributed to the large M&A deal between Royal Dutch Shell and BG Group. Elsewhere, Antipodeans remain supported as carry trades continue to come back in favour amongst investors stirred by yield demand, with NZ and AU yields notably higher across the curve, while NZD faded earlier losses, after PM Key said he expects the currency to fall further against USD.

And while the USD has indeed been higher all night without any material catalyst, the snapback is starting as can be seen below, in what has now become a standard market fixture before the US open, i.e., the infamous stop hunt. Case in point: a 30 pip move in the biggest FX pair in seconds and on no news.

In the commodity complex, both WTI and Brent crude futures trade higher in a pullback of yesterday’s heavy losses which were triggered by the latest API and DoE inventory data which revealed a substantial build for the headline figures and an increase in US oil production. The result was the biggest drop in WTI in 2 months.

Elsewhere, precious metals continue to weaken as gold retreats for a third consecutive session as the USD trades higher, subsequently seeing the yellow metal remain below the USD 1,200 level. Furthermore, Aluminium underperforms industrial metals amid revised forecasts from Alcoa that now sees a surplus of aluminium compared to a previous deficit, which consequently weighed on aluminium prices.

In summary: European shares rise a third day with the media and construction sectors outperforming and basic resources, telcos underperforming. The Swiss and French markets are the best-performing larger bourses, Spanish the worst. The euro is weaker against the dollar. German 10yr bond yields fall; Greek yields decline. Commodities gain, with Brent crude outperforming and silver, gold underperforming. * U.S. jobless claims, continuing claims, Bloomberg consumer  comfort, wholesale inventories, due later.

Market Wrap

  • S&P 500 futures down 0.3% to 2070.5
  • Stoxx 600 up 0.6% to 407
  • US 10Yr yield down 1bps to 1.89%
  • German 10Yr yield little changed 0.16%
  • MSCI Asia Pacific up 0.6% to 152
  • Gold spot down 0.5% to $1196.8/oz
  • Eurostoxx 50 +0.5%, FTSE 100 +0.7%, CAC 40 +0.8%, DAX +0.4%, IBEX +0.2%, FTSEMIB +0.5%, SMI +1.2%
  • MSCI Asia Pacific up 0.6% to 152; Nikkei 225 up 0.7%, Hang Seng up 2.7%, Kospi little changed, Shanghai Composite down 0.9%, ASX down 0.5%, Sensex up 0.6%
  • Shell’s $70 Billion BG Deal Meets Shareholder Skepticism
  • Teva Mulls Next Move as Mylan’s Perrigo Bid Jolts Drugmakers
  • Burberry Outperforms; Daily Mail Cites Takeover Speculation
  • Chemicals M&A May Accelerate, Baader-Helvea Says; Lists Targets
  • Wincor Nixdorf M&A Not Without Risks, Analysts Say
  • Euro down 0.45% to $1.0733
  • Dollar Index up 0.52% to 98.45
  • Italian 10Yr yield up 2bps to 1.26%
  • Spanish 10Yr yield up 1bps to 1.21%
  • French 10Yr yield down 1bps to 0.44%
  • S&P GSCI Index up 1.5% to 410.1
  • Brent Futures up 2.8% to $57.1/bbl, WTI Futures up 2.6% to $51.7/bbl
  • LME 3m Copper up 0.5% to $6043/MT
  • LME 3m Nickel down 0% to $12575/MT
  • Wheat futures down 0.4% to 524.3 USd/bu

Bulletin Headline Summary

  • European equities take the lead from the US and Asia, with things otherwise quiet from a European perspective
  • The USD-index is providing a bulk of the price action in FX markets, subsequently weighing on EUR and GBP, with GBP paring yesterday’s M&A related advances
  • Looking ahead, today sees the BoE rate decision, US weekly jobs data, wholesale inventories and US 30yr auction.
  • Treasuries gain before week’s auctions conclude with $13b 30Y bonds; WI yield 2.525% vs. 2.681% in March. 10Y notes sold yesterday awarded at lowest yield since May 2013.
  • Greece has met its payment obligation to IMF that was due today, Greek Finance Ministry official says on condition of anonymity
  • German industrial production rose 0.2% in February, better than expected, vs a revised 0.4% drop in January
  • State action can help solve bad loan issue, Bank of Italy Governor Ignazio Visco said in an interview; public intervention can help free up resources for credit, even through “a direct participation in the management and the recovery of impaired loans”
  • Italy banks’ gross non-performing loans rose 15.3% in Feb. from yr earlier, Bank of Italy says in e-mailed statement today.
  • Kaisa Group Holdings said that a unit of shareholder Sino Life Insurance Co. agreed to lend it 1.38b yuan ($222m) as “financial assistance”
  • While Obama probably hoped an interview he gave to public radio would help sell Americans on a proposed nuclear accord with Iran, critics of the deal have seized on three sentences uttered by the president in their effort to scuttle it
  • Sovereign bond yields mostly lower. Asian stocks mixed, European equities gain. U.S. equity-index futures fall. Crude oil and copper higher, gold lower

DB’s Jim Reid concludes the overnight event summary

 

Yesterday we saw the first ever 10 year government bond auction issued at a negative yield with Switzerland’s new deal clearing at -0.055%. With 500 years of bond market data to look back on we’ve never seen anything like this before. Will Switzerland be the only country that ever manages such a feat or will we see a few more in this cycle? On this, 10 year Bunds dropped another couple of basis points yesterday to now trade at 0.161%. So it’s not beyond the realms of possibility that Germany will be next.

Over on the other side of the Atlantic, the FOMC minutes showed that the Fed have not given up hope of returning markets to some kind of normality as “Several participants judged that the economic data and outlook were likely to warrant beginning normalization at the June meeting?. Others on the committee thought energy weakness and a stronger dollar would continue to depress inflation and thus argued for a rate increase later in the year. A couple said the economy probably wouldn’t be ready for tighter policy until 2016. Although we were surprised June was still so much on the radar, these minutes pre-date last Friday’s weak payroll print so one has to bear that in mind. It’s all to play for though over the coming months. Data will likely swing this debate a few times over the coming weeks and months.

Following the release of the minutes, the Fed’s Dudley yesterday reiterated his more dovish view of late. He said that the intention of the Fed should be conservative and that there are strong arguments for being a little on the late side before reiterating the dependency on data for the timing of liftoff. Fed Governor Powell, also speaking yesterday, was more hawkish however, saying that he expects a cycle of rate hikes to begin later this year and possibly start as early as the June meeting. Like other recent Fed commentary, Powell seemingly placed more importance on the pace of liftoff rather than the date however, saying that ‘from a macroeconomic perspective the precise timing of liftoff is less important than the path of subsequent additional rate increases’ and that ‘if the economy continues on its expected path, it will be appropriate for a time to increase rates fairly gradually’.

Staying with the Fed, our colleagues in the US yesterday took a look at the composition of this year’s FOMC, noting that the group is more dovish relative to the 2014 group. By assigning a ranking to each member based on a 1-5 scale (1 being dovish, 5 hawkish), they calculated the average ranking for the FOMC in 2014 was 2.6, so close to neutral. Now that the hawkish-leaning President’s Fisher, Mester and Plosser have rotated off the committee, they calculate a much more dovish 1.8 average ranking. Given the FOMC minutes showed some differing in opinion on liftoff between members, the slightly more dovish-tilt in the composition could become more of a factor if the committee remain divided on timing.

Elsewhere, the start of Q1 earnings season in the US was the other notable highlight yesterday as Alcoa reported post US-close. Despite delivering profit above analyst expectations, revenues grew less than expected and management pointed towards a somewhat challenging outlook which caused the shares to slide in extended trading.

Yesterday’s price action was fairly subdued for the most part as the S&P 500 (+0.27%) ended more or less where it started in the moments leading up to the release of the minutes. 10y Treasuries traded in a tight range for much of the session before eventually closing 2bps higher at the close to finish at 1.905%. Meanwhile the Dollar rebounded from earlier losses with the DXY ending +0.25% to mark its third consecutive day of gains. There were bigger moves in the commodity complex however as Gold closed 0.55% lower and oil markets sold off. Indeed, both WTI (-6.60%) and Brent (-6.01%) reversed some of the strong gains seen so far this week to close at $50.42/bbl and $55.55/bbl respectively on the back of reports that US crude inventories jumped the most in 14 years.

Closer to home yesterday, European equity markets weakened into the close to finish mostly in the red. The DAX (-0.72%), CAC (-0.28%) and peripheral bourses all closed lower, while the Stoxx 600 (+0.08%) posted a modest gain. Despite continued strength in core bond markets, peripherals were a touch softer yesterday as 10y yields in Spain (+1.7bps) and Italy (+0.8bps) closed higher. The small sample of data we got in the region yesterday reflected the mixed sentiment. February retail sales for the Euro-area surprised to the upside (+3.0% yoy vs. +2.8% expected), although German factory orders disappointed with the -0.9% mom print well below the +1.5% expected. Our colleagues in Europe noted however that the details continue to support their high Q1 German GDP forecast of +0.8% qoq. They point out that passenger car production was particularly strong in March and that consumer goods orders rose by +2.9% mom supporting their number.

Yesterday we also got confirmation of the news that Shell will pay £47bn for BG Group in the biggest deal for the sector for more than a decade with suggestions that this could spark a wave of further consolidation. The M&A theme also continued yesterday in the US pharma space as Mylan bid to take over Perrigo in a $29bn deal. The two announcements in fact place at 1st and 4th YTD by acquisition announcement size.

Elsewhere, as well as the aforementioned Swiss negative 10-year auction yesterday, it was interesting to see that in the EM space Mexico yesterday issued its first ever Euro-denominated 100 year ‘century’ bond, with the notes pricing at 4.2%. A report on Bloomberg noted that EM countries and company’s issued €20bn in the first three months of this year which marks the second busiest quarter for EM bond sales in a decade.

Refreshing our screens this morning, equity markets in Asia are mixed on the whole. The Nikkei (+0.64%) and Hang Seng (+3.67%) have firmed while markets in China have weakened, led by a 1.24% fall for the Shanghai Comp. In fact, the Hang Seng jumped as much as +6.7% earlier in trading and briefly touched the highest level since 2007 with volumes around 5x the average. The rally has been helped by inflows from China mutual funds in Hong Kong listed companies after Chinese regulators eased restrictions on the Hong Kong-Shanghai Connect. Shares in Hong Kong Exchanges and Clearing opened around 14% higher this morning following a 12% rise yesterday.

Taking a look at today’s calendar, the highlights in Europe this morning will be trade data and industrial production out of Germany while in France we get business sentiment. In the UK this morning we see the latest BoE decision (not much excitement expected) as well as trade data due. It’s quiet in the US this afternoon with just jobless claims and wholesale inventories expected. Attention will also likely be on Greece with the government due to repay a €440m IMF loan.

end
Greece paid its 460 million euros loan back to the IMF today.  However they did state that they have no run out of money and cannot fund next month.
(courtesy zero hedge)

IMF Payment Sends Greek Yields Lower; Athens Warns “Next Month Is A Different Matter”

A central bank official, according to The FT, said thatGreece has repaid the €450m it owed the International Monetary Fund today. Bond yields have fallen across the Greek curve with 10Y GGBs now at 11.1% (down 70bps from Tuesday’s highs). Greek stocks are not as impressed and are giving back their gains.Tsipras, on return from Moscow, explained Greece “was not a beggar…asking other countries to solve its problem,” but as a senior Greek official earlier this week said that while it would be able to make Thursday’s IMF repayment, it will still exhaust its cash reserves very soon and “next month is a different matter.” HSBC points out that the real crisis point looms on the 12th May.

As The FT reports,

Greece repaid €450m it owed the International Monetary Fund on Thursday, sending bond yields sliding as investors’ showed relief it had met its deadline.

A central bank official said that the payment to the IMF had been made.

The payment only brings minimal relief to Greece, as the country remains cash-strapped and faces more looming debt repayment deadlines.

Bonds are rallying but stocks are rapidly giving back their gains…

As Reuters reports, the Greco-Russian meetings progressed well…but no cash yet…

Russian President Vladimir Putin offered Greek Prime Minister Alexis Tsipras moral support and long-term cooperation but no financial aid on Wednesday, leaving Athens to fend for itself in resolving urgent debt problems with Western creditors.

The leftist-led Greek government, at loggerheads with its euro zone and International Monetary Fund creditors, risks running out of money within weeks unless it can reach a new cash-for-reform deal.

“The Greek side has not addressed us with any requests for aid,” Putin told a joint news conference after Kremlin talks. “We discussed cooperation in various sectors of the economy, including the possibility of developing major energy projects.”

Tsipras added: “Greece is not a beggar going around to countries asking them to solve its economic problem, an economic crisis that doesn’t only concern Greece but is a European crisis.”

*  *  *

But HSBC notes that while this repayment is good news, the real crisis point looms in May…

Threats and promises continue…

Responding indirectly to a warning from European Parliament President Martin Schulz, Tsipras said: “Greece is a sovereign country with an unquestionable right to implement a multi-dimensional foreign policy and exploit its geopolitical role.”

Putin said he understood that Greece, which has historical and cultural ties to Russia, had been forced to go along with the policy and disavowed any attempt to use Athens’ debt woes to drive a wedge among EU nations.

“I want to assure you that we do not aim to use any internal European Union situations to improve ties with the European bloc as a whole. We want to work with the whole of united Europe,”the Russian leader said.

And Greek FinMin Varoufakis had the last word this morning, jabbing back at The Troika Institutions…

  • *VAROUFAKIS: `MORALIZING’ FINGER POINTING WON’T FIX GREEK CRISIS
  • *VAROUFAKIS: NEW EURO INSTITUTIONS OFFER UNSATISFACTORY SOLUTIONS
  • *VAROUFAKIS SAYS MUCH WORK TO BE DONE ON EUROPEAN INSTITUIONS

“The institutions created this asymmetric union will then have to come to terms with it, have to deal with it,”

“The big question is:

under the current institutional framework, and given the institutional changes, can we pat ourselves on the back and say that we’ve learned the lessons of economic history to deal with legacy problems and avert future problems?

I shall submit to you my very simple answer: no we haven’t.

We have much work to do,” Varoufakis says

 

end

 

During the night, this happened in Hong Kong.  An accident waiting to happen.  (What you are witnessing is a true bubble about to burst here)

(courtesy zero hedge)

 

Right Now, In Hong Kong…

 

In our overnight market summary first thing morning, in which we noted that the Chinese bubble (shown most recently here) has finally spilled over into Hong Kong, we were dumbfounded by the move in the Hang Seng overnight, where as we reported previously, overnight there was “a blistering rally which rose nearly 4% on immense volume which at 250 billion Hong Kong dollars ($32 billion) was three times the average daily volume over the past year and nearly 20% more than the previous record volume day in October 2007, at the height of the pre-financial crisis bubble.

As it turns out that was nothing.

This is what has happened since then, in just the past hour, as the elementary school-educated Chinese momentum trading hoardes have descended.

 

No, that chart is fine, and nothing is wrong with your eyes: that was, indeed, until a few minutes ago, a 10% move in just the past two days!

This is how it looks longer term:

 

Some details from Bloomberg:

  • Hang Seng Index’s 14-day relative-strength index rises to 87.2, highest since October 1993. RSI >70 signals to some traders shares are due to decline
  • Turnover on Hang Seng Index ~400% higher than 30-day avg for this time of day
  • Hang Seng Volatility Index surges 56%, set for biggest increase on record and heading for highest level since June 2012; two-day jump is 138%
  • Hang Seng China Enterprises RSI climbs to 85.2, Shanghai Composite at 84
  • 31 out of 40 Hang Seng China members had RSI >70 yday, most since Oct. 2007
  • 20 Hang Seng China stocks at new 52-week highs yday, also most since Oct. 2007

Or, said far simpler, a stock bubble of epic proportions.

So sit back and enjoy, because at this point there are just two options: it continues rising parabolically, or it crashes. And since the Chinese stock market is now linked to Hong Kong, any crash here will first lead to a shake down in China, and – since global central bank liquidity is immediately fungible – a crash in China may well be the catalyst that take out the unprecedented global central bank liquidity bubble which has been reflating in virtually a straight line since 2008.

 

end

 

 

The engine for growth in Europe, i.e. Germany, is stalling.  Industrial production plunges:

 

(courtesy zero hedge)

 

German Stocks Pump’n’Dump After “Surprise” Industrial Production Plunge

For an hour or so, terrible news was great news as the DAX dipped and ripped after February Industrial Production fell 0.3% (against expectations of a 0.6% rise) and even worserer, January’s ‘everything is awesome’ +0.9% rise was revised massively lower to 0.0%… February was the biggest drop in German Industrial production since August (but of course now that Q€ is here, we are sure everything will be great going forward).

 

German Industrial Production missed and dropped YoY unexpectedly in February…

 

 

Which was greeted by a small dip and nice rip in the DAX before sanity crept in and DAX drifted back into the red…

 

Charts: Bloomberg

end
As we warned yesterday, Yemen rebels are now outside the office of the local central bank of Yemen in Aden with welding equipment, ready to steal money and any gold that is stored there:
(courtesy zero hedge)

Yemen Rebels Spotted Outside The Local Central Bank (Carrying Welding Equipment)

Five days ago, we documented the incursion of the Iranian-backed Houthi rebels into the heart of the Yemeni port city of Aden, which has some ~800,000 residents and where holdouts loyal to President Hadi (who fled for Saudi Arabi in the face of the rebel advance) are battling in the streets in a desperate attempt to repel the rebels from the central Crater district where more than 75,000 people reside. The fight for the city has quickly deteriorated into a humanitarian crisis with the first shipments of aid arriving on Wednesday. Here’s Reuters describing the scene:

Residents saw a dozen bodies strewn on the streets and said several buildings were burnt or demolished by rocket fire. Mosques broadcast appeals for jihad against the Houthis, Iran-allied fighters who have taken over large areas of Yemen.

 

The Houthi attack in the central Crater neighborhood, backed by tanks and armored vehicles, was at least partially repelled, residents said, and Houthi gunmen had also been driven from some northern neighborhoods.

In our coverage of the unfolding events, we also made the important observation that the Aden branch of Yemen’s central bank is located right where the fiercest fighting is taking place:

This of course sets the stage for a repeat of what is becoming a familiar occurrence in a world where Washington’s haphazard attempts at conducting what somehow still passes for foreign policy end up having the most absurd, yet by now very predictable, of consequences: 

The local branch of Yemen’s central bank is located in the area, which suggests the Houthis (and, as you’ll see below, Al Qaeda) may be playing for a repeat of what occurred just 9 months ago when jihadis seized $400 million from the Mosul central bank in Iraq making ISIS the best funded islamic fundamentalist force in the world. Of course the tragically ridiculous part of the whole story is that the Houthi advance is very likely being aided by some of the $500 million worth of weapons the US “misplaced” in the country so in short, US-armed, Iranian-backed rebels have now overthrown a US puppet government, fought their way (using US weapons) into the last important city still loosely under coalition control, and are now operating a few blocks from a branch of the Yemeni central bank.

Well, sure enough, just 5 short (or “long” if you live in Aden) days later, locals are reporting that Houthi militia are gathering outside the central bank — carrying welding equipment. Here’s more from Aden Alghad (via Google translate):

Witnesses and local residents said the pro- Houthi forces deployed in the vicinity of the Central Bank of Yemen, Aden branch building…

 

He said citizens living neighborhood herd Pkritr for ” Eden tomorrow ,” said the number of cars arrived on the scene , carrying soldiers where they have access to the bank’s headquarters .

 

A witness said he saw some soldiers carrying gas cylinders ( welding ) used in the iron cutting but did not allow for Aden tomorrow confirm these partial from a trusted source.

And so the Houthis who, thanks to a few hundred million worth of “lost” US weapons are already well armed, and thanks to Iran are also well trained, are now set to get a capital injection courtesy of the Yemen central bank much as AQAP did just last week when militants raided banks to the east in Mukalla and very much like ISIS did last year in Mosul when the group also captured US arms.

*  *  *
Meanwhile, as reported earlier today, Iran has just senttwo warships into the Bab al-Mandab. We’ll close with two terms we think may be relevant here: “powder keg” and “tail risk.”
 end
Somebody seems to have gotten the terms wrong.
(courtesy zero hedge)

Iran Dictates “Deal” Conditions To Obama, Demands All Sanctions Lifted On “Same Day”

If there was any confusion whether Iran thought it had gotten the best of John Kerry and the Obama administration as a result of the non-deal April 2 “framework” announcement for some future possible deal, it can be swept away following a Reuters report that Iran will only sign a final nuclear accord with six world powers if all sanctions imposed over its disputed atomic work are lifted on the same day, President Hassan Rouhani said in a televised speech on Thursday.

In other words, Iran is now dictating conditions to Obama, something it would not consider doing if it thought it did not had the leverage, or if it actually cared about how said negotiations ultimately conclude.

From Reuters:

“We will not sign any deal unless all sanctions are lifted on the same day … We want a win-win deal for all parties involved in the nuclear talks,” Rouhani said.

 

Since the preliminary agreement was reached, Iran and the United States seem to have different interpretations over some issues, including the pace and extent of sanctions removal.

 

“Our goal in the talks (with major powers) is to preserve our nation’s nuclear rights. We want an outcome that will be in everyone’s benefit,” Rouhani said in a ceremony to mark Iran’s National Day of Nuclear Technology.

And just in case his speech may have been lost in translation, here again, for the benefit of John Kerry, is Iran’s presidential assessment of the winners and losers in the Lausanne negotiations.

“The Iranian nation has been and will be the victor in the negotiations.”

 

Iran insists all nuclear-related United Nations resolutions, as well as U.S. and EU nuclear-related economic sanctions, will be lifted immediately once a final accord is signed.

 

But the United States said on Monday that sanctions would have to be phased out gradually under the comprehensive nuclear pact.

 

The U.S. and EU sanctions have choked off nearly 1.5 million barrels per day (bpd) of Iranian exports since early 2012, reducing its oil exports by 60 percent to around 1 million barrels a day.

 

“Our main gain in the talks was the fact that U.S. President Barack Obama acknowledged that Iranians will not surrender to bullying, sanctions and threats,” Rouhani said.

 

“It is a triumph for Iran that the first military power in the world has admitted Iranians will not bow to pressure.”

So why the sudden surge in perceived negotiating leverage by the middle eastern nation? Well, the full backing of Russia and China may have something to do with it, just as we explained in the hours leading up to the non-deal announcement, and as was confirmed overnight with a report (more shortly) that China is about to build a pipeline from Iran to Pakistan to deliver Iran’s massive resources that much closer to Beijing.

 

end

 

 

Despite the constant bombing by the Saudis and the Americans, the Yemeni rebels advance and seize a key town in the oil rich southwest of Yemen:

 

 

(courtesy zero hedge)

 

 

Despite Constant Saudi Bombing, Yemen Rebels Advance, Seize Key Town; Ayatollah Trolls US, Saudis on Twitter

 

It appears that when the US inadvertantly “misplaced” $500 million of weapons in Yemen, the bulk of which fell right in Houthi rebel hands, it created a very credible adversary… for the US and its Saudi-backed coalition allies. Because despite the bombing campaign by the Saudi-headed coalition, AP reports that the rebels seized a key provincial capital in a heavily Sunni tribal area on Thursday as their patron Iran called the two-week air campaign a “crime” and appealed for peace talks.

According to media reports the Houthius overran Ataq, capital of the oil-rich southeastern Shabwa province, after days of airstrikes and clashes with local Sunni tribes. The capture marked the rebels’ first significant gain since the Saudi-led bombing began.

The rebels’ capture of Ataq came after days of clashes as well as negotiations with local tribes. When the Houthis and Saleh loyalists entered the city they encountered little resistance, raising questions about whether Yemen’s fractured tribes — even in Sunni areas — can serve as reliable allies.

 

Ataq residents said the rebels and allied soldiers installed checkpoints all around the city. Government offices, shops and schools were closed, and residents appeared reluctant to leave their homes. “Ataq is like a military barracks. A tank here, an armored vehicle there and non-stop patrols,” said resident Saleh al-Awlaki. “I consider this an occupation by all means. And all occupation must be removed, also by all means.”

 

Military and tribal officials said some leading members in the tribes facilitated the rebels’ entry after days of fighting. One official said the Sunni tribesmen didn’t want to keep on fighting, even though they were assisted by coalition airstrikes. The official spoke anonymously because he feared reprisals. The military officials spoke on condition of anonymity because they were not authorized to brief reporters.

 

Mohamed Abkar, an Ataq resident, said locals looted unguarded weapons warehouses in the city on Wednesday, but that no shot was fired at the rebels as they entered the city.

Ataq’s capture won’t be the last: the coalition had hoped to keep the rebels out of the southern port city of Aden, which Hadi had declared his provisional capital after fleeing Sanaa earlier this year and before leaving the country last month. But there too the rebels and Saleh loyalists have advanced, sparking days of heavy clashes.

Meanwhile, even as Iran deployed two warships just off the Yemen coast and in proximity to two US aircraft carriers as reported yesterday, Iran’s Supreme Leader Ayatollah Ali Khamenei called on Saudi Arabia to cease airstrikes targeting Shiite rebels in Yemen, calling the campaign “genocide” against Yemeni people.

The Ayatollah said “this is a crime, genocide and legally pursuable” according to comments posted on his website. He went on to warn that “the Saudis will lose” and that “Yemenis will resist and will win.” He added that “The US will also fail & face loss in this issue.

In a testament to the social media age, then the supreme leader took to Twitter to troll not only the Saudis but the US in that medium as well:

Earlier, in speech in Tehran on Thursday, Iranian President Hassan Rouhani urged a cease-fire in Yemen to allow for broad-based talks on resolving the crisis.

“To the countries in the region, I say, let’s adopt the spirit of brotherhood, let’s respect each other and other nations. A nation does not give in through bombing,” said Rouhani. “Do not kill innocent children. Let’s think about an end to the war, about cease-fire and humanitarian assistance to the suffering people of Yemen.”

He said the bombing campaign was “wrong,” comparing it to Syria and Iraq, where a U.S.-led coalition is targeting Islamic State militants.

“You will learn, not later but soon, that you are making a mistake in Yemen, too,” Rouhani said, without naming any particular country.

In a normal world, the US would simply grunt out a few remarks meant to put Iran in its place, and that would be the end of that. However, what makes things complicated is that in the current environment in which the Obama administration is desperate to maintain a good line of discussion with Iran so it can “deliver” the historic nuclear agreement, the US simply has no negotiating leverage, and Iran knows this. And, as a result, it is otherwise supporting the Houthi rebels in a way it otherwise wouldn’t, in the process humiliating not only the Saudi bombing campaign, but also the biggest backer behind the counter-rebellion operation, the US itself.

Finally, to get a sense of the events on the ground, here is a video clip taken earlier in Yemen’s rebel overrun city of Sana’a.

end

 

Oil related stories

 

The following explains the oil market perfectly as to why Saudi Arabia is increasing production.  They realize that Iran will be pumping in excess of 1 million barrels per day.  Also Iraq and Libya are also producing more oil as they too are aware of the Iran situation.  Saudi Arabia does not want to give up any market share to the Iranians

 

(courtesy zero hedge)

 

“Saudi Arabia Is Going For it” – Why The Saudis Just Boosted Oil Production To A Record High

Several days ago, oil spiked when headlines hit that Saudi Arabia’s oil minister Ali al-Naimi said he was “optimistic” about the future of the price of oil. The spike was confusing because what Saudi Arabia also said, but got no air time, is that the current excess oil production would persist indefinitely, and assure that the scariest chart for oil bulls, namely crude oil inventories in the US …

… would continue to be the only thing in the US economy that has achieved “escape velocity.”

Actually, we take that back: Saudi did not say it would keep production flat – what it did say is that it is boosting its output even higher in what is now a clear confrontation with the US “marginal producer”, namely the shale patch, which so far has survived thanks to cheap funding from naive bondholders who are willing to fund US shale on hopes that an oil rebound is imminent, and increasing consolidation in the space which will cut overhead thus bringing the breakeven cost of production lower.

As Globe and Mail reported, instead of leaving its own production flat in an attempt to stabilize oil prices and hit its “optimistic” outlook sooner rather than never, Saudi Arabia would boost production quite sharply to claw back market share. Specifically al-Naimi, revealed that the kingdom’s oil production in March was 10.3-million barrels a day – a record high. “Saudi Arabia is going for it,” Olivier Jakob of the Swiss energy consultancy PetroMatrix said on Wednesday as Brent crude fell by about 1.3 per cent.

So what is Saudi Arabia’s reasoning to “make up in volume what it loses in price”? Here is G&M’s attempt at explanation:

Why is Saudi Arabia opening the spigot? There is no doubt that country’s own domestic demand is rising, thanks to heavy investment in new refineries, requiring more production.But it also appears that Saudi Arabia is making renewed push for market share for fear that a gusher of Iranian oil will soon hit the export markets as the Iranian embargo is ratcheted back. “They will not want to abandon any market share to Iran,” Mr. Jakob said.

 

The problem for oil producers and investor is that the Saudis are not acting in isolation. In March, both Iraq and Libya managed to boost production in spite of the violence and chaos in those countries. As a result, OPEC production in March was about 31.5-million barrels a day, an increase of 1.2-million barrels over February and 2-million barrels over March, 2014. The March figure is well above the second-quarter estimate put out by the International Energy Agency.

 

At the same time, U.S. production is surging, creating burgeoning stockpiles of oil. Thecombination of rising U.S. production and rising Saudi production can only be bearish for oil prices. The prospect of oil testing its January low should not be ruled out, especially if Iran is given the green light to ramp up exports.

 

The good news for oil investors is that low prices could well trigger a repeat of the consolidation round seen in the late 1990s, which was another period of extremely low prices. In that era, the biggies – BP, Chevron and Exxon – all did monster deals that significantly boosted their global clout. The trick, of course, is to pick the right company. The premium paid on BG’s share was 50 per cent over BG’s closing prices on Tuesday.

All of which probably “explains” why oil was, until a few days ago, at the highest level seen so far in 2015.

 

end

 

 

Another casualty in the energy patch:

 

“I’m The First To Say: I Can’t Do It” – The Energy Junk-Bond Implosion Just Claimed Its First Victim

 

 

The universe of entities who have blown up in the past year trading oil and commodities is getting increasingly more crowded and includes among them such former luminaries as one-time oil trading god (if mostly in the eyes of Citigroup) Andy Hall. However, until now there not been any prominent casualties among the group of indirect investors in the energy space, those investing in the stocks or debt of energy names, and especially those most at risk from the oil price collapse: junk bond investors.

That changed today when as WSJ reported earlier, Kamunting Street, which managed about $1 billion at its peak, announced it was returning capital to investors, as a result of plunging oil prices and wrong way junk bond bets tied to hard-hit energy companies which had gone sour over the past nine months.

Allan Teh, Kamunting Street’s founder and a former Citigroup trading star, said “I’m the first to say: I can’t do it. I just don’t think in this environment I can have a portfolio that mirrors what was done in the past.

And with that he joins another list of illustrious hedge fund managers who applied such Old Normal concepts as fundamentals, logic and reason to a broken and manipulated “market”, which due to the Federal Reserve’s central planning, has become merely a policy tool designed to “restore confidence” and which does precisely the opposite with every passing day.

More from the WSJ:

Kamunting, named after Mr. Teh’s childhood street in Malaysia, is far from alone in its struggles to navigate the unpredictable market moves of recent months. Few hedge funds were able to capitalize on an unexpected oil bust that has sent prices down 50% since last summer, and most haven’t come close to matching the largely giddy ride for U.S. stocks and government bonds.

 

Mr. Teh, 49 years old, had a profitable decadelong run with Kamunting, which he founded in 2004 after serving as chief investment officer of Citigroup’s now-defunct Tribeca Global Investments hedge-fund unit. A convertible bond specialist for much of his career, Mr. Teh grew Kamunting to manage about $1 billion at the end of 2007. The firm lost money during the crisis, and then roared back to an 88% gain in 2009 by buying up fixed-income assets that rebounded along with the financial recovery.

 

More recently, however, his strategy of placing offsetting bets to keep from moving lock step with the broader market turned into a drag. Kamunting lost money last year on positions designed to protect against losses in its overall portfolio, including wagers against U.S. Treasurys and stocks.

 

That came as the riskier part of the noninvestment grade, or junk-bond, universe crumbled late last year on the heels of a sharp decline in oil-even for borrowers with few obvious connections to energy.

Most surprising is that K-Street did not have any major blow ups, at least not on paper: “Kamunting was up 7% at midyear 2014, but skidded in the back half during what Mr. Teh described as a “bad swing,” and ended the year down 4%. It was down an additional 2% in 2015.” Unless of course, the vast majority of assets were simply market-to-myth in hopes of an imminent oil price rebound which never came, and the result was the fund’s shuttering and total liquidation at firesale prices.

Kamunting’s total assets dropped to less than $300 million recently, and when its largest outside investor asked for its cash back at the start of the year, Mr. Teh said he was bound to sell some positions at inopportune prices to pay back the request. He soon decided he would be better off managing only his own money, which represented the lion’s share of what was left in the fund.

His words of parting were taken directly from Steve Cohen’s SAC Capital farewell letter:

“I feel pretty proud of what I’ve done,” he said, noting that he had made his investors more than $1 billion over the firm’s lifetime. He added that he felt free of the pressure to trade amid low volatility to satisfy jittery potential backers who were worried about avoiding even the remote possibility of short-term losses. “I can enjoy things more now that I don’t have investor issues to deal with,” he said.

Well, at least he didn’t have a criminal investigation hanging over his head that would cost him at least two Kandinskis and three Picassos to put to rest. He will, however, continue running his own money as a family office.

And now that the spigot has been opened, expect to see many more junk-bond hedge funds throw in the towel on what continues to be the biggest oil rout since Lehman.

end

Your more important currency crosses early Thursday morning:

 

 

 

 

Euro/USA 1.0770 down .0015

USA/JAPAN YEN 119.99 down .103

GBP/USA 1.4828 down .0047

USA/CAN 1.2528 down .0014

This morning in Europe, the Euro fell by 15 basis points, trading now just below the 1.08  level at 1.0770; 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, 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  up again in Japan by 10 basis points and trading just below the 120 level to 119.99 yen to the dollar.

The pound was well down this morning as it now trades well below the 1.49 level at 1.4824  (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 up by 14 basis points at 1.2428 to the dollar with 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>

 

this is explained perfectly by Graham Summers, Phoenix Research Capital:

 

(courtesy Graham Summers /Phoenix Research Capital))

 

 

The US Dollar Rally Will Crush Stocks Just As It Did in 2008

The world carry trade for US Dollars is over $9 trillion.

In today’s world of monetary insanity, investors seem to forget that $1 trillion is a staggering amount of money. So to put that $9 trillion carry trade into perspective, if it were a country instead of a carry trade, it would be roughly equal in size to the economy of China, the second largest economy in the world.

Suffice to say, we’re talking about a truly staggering amount of borrowed US Dollars that have been invested into other assets/ investments.

Carry trades only work if the currency you are borrowing in doesn’t rally. As soon as it does, your trade very quickly goes into the red.

This is particularly true if you’re talking about a corporation that has borrowed in US Dollars to fund projects in countries where sales are denominated in other currencies (Europe, Asia, etc.)

The reason for this is that many multi-nationals do not hedge their currency risk. So if, for instance, they are borrowing in US Dollars without a hedge to invest in Europe and the US Dollar rallies, their projects very quickly begin to lose their appeal… and a LOT of money.

Ka-Boom:

!$$$$.png

To put that move into perspective, it’s GREATER THAN the US Dollar rally that occurred during the 2008 CRASH!

$$$$$.png

This tells us point blank that something MAJOR is happening in the financial system right now. You DO NOT get 20+% moves in the US Dollar during normal, healthy environments.

Indeed, it is not coincidental that Oil and emerging markets like Brazil imploded when the US Dollar carry trade began to blow up.

$$$$$$.png

As usual, US stocks are the last to “get it.” But this won’t last for long. The S&P 500 is sitting on the ledge of a massive cliff. And when it finally tumbles, the move will be both fast and violent.

$$$$$$$$.png

end

 

 

The NIKKEI: Thursday morning : up 147.91  points or 0.75%

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

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

Gold very early morning trading: $1199.80

silver:$16.32

 

 

Early Thursday morning USA 10 year bond yield: 1.88% !!!  down 2  in basis points from Wednesday night/

USA dollar index early Thursday morning: 98.16 up 10 cents from Tuesday’s close. (Resistance will be at a DXY of 100)

 

 

 

This ends the early morning numbers, Thursday morning

 

 

 

And now for your closing numbers for Thursday:

 

 

Closing Portuguese 10 year bond yield: 1.64% up 2 in basis points from Wednesday

 

Closing Japanese 10 year bond yield: .37% !!! up 1 in basis points from Wednesday

 

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

 

Spanish 10 year bond yield: 1.24% !!!!!!

 

Your Thursday closing Italian 10 year bond yield: 1.30% up 5 in basis points from Wednesday:

 

trading 6 basis points higher than  Spain.

 

 

IMPORTANT CURRENCY CLOSES FOR TODAY

 

 

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

 

Euro/USA: 1.0654 down .0131  ( Euro down 131 basis points)

USA/Japan: 120.64 down .540  ( yen down 54 basis points)

Great Britain/USA: 1.4703 down .0172   (Pound down 172 basis points)

USA/Canada: 1.2591 up .0049 (Can dollar down 49 basis points)

 

The euro collapsed again during the afternoon, and adding further losses from yesterday. It settled down 131 basis points to 1.0654. The yen was down 54 basis points points and closing well above the 120 cross at 120.64. The British pound lost a lot more ground, 172 basis points, closing at 1.4703. The Canadian dollar was on a roller coaster ride again today against the dollar. It closed at 1.2591 to the USA dollar, down 49 basis points even though oil was 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: 1.96% up 5 in basis points from Wednesday

 

Your closing USA dollar index:

99.09 up 100 cents on the day.

 

 

European and Dow Jones stock index closes:

 

 

 

England FTSE up 77.97 or 1.12%

Paris CAC  up 72.09 or 1.40%

German Dax up 130.58 or 1.08%

Spain’s Ibex up 130.58 or 1.08%

Italian FTSE-MIB up 225.20 or 0.96%

 

 

The Dow:up 56.22 or 0.31%

Nasdaq; up 24.47 or 0.49%

 

 

OIL: WTI 50.63 !!!!!!!

Brent: 56.63!!!!

 

 

Closing USA/Russian rouble cross: 52.05 up  1 1/2 rouble per dollar with the higher oil price.

 

 

 

end

 

 

 

And now your important USA stories:

 

 

 

 

Today the weekly initial claims are 281,000.  The problem is the state of Texas where the data conflicts with the Challenger Christmas layoffs.

 

(courtesy BLS/zero hedge)

 

Latest Weekly Initial Claims Of 281K Better Than Expected, Under 300K For Fifth Straight Week

After the abysmal March payrolls number, there were expectations in the whisper forecast of today’s initial claims that there would be a sizable jump in initial unemployment claims, one that may break the streak of 4 consecutive prints under 300K. It did not happen, and in fact the number which was released moments ago by the BLS indicated continued strength in the US labor market, where there was 281K initial claims in the past week, just under the 283K expected and higher than the revised 267K from last week. This is the lowest level for this average since June 3, 2000 when it was 281,500. The previous week’s average was revised down by 250 from 285,500 to 285,250.

The DOL added that “there were no special factors impacting this week’s initial claims.”

Continuing claims likewise declined from last month’s 2.327MM to 2.304MM, below the 2350K expected.

From the report:

In the week ending April 4, the advance figure for seasonally adjusted initial claims was 281,000, an increase of 14,000 from the previous week’s revised level. The previous week’s level was revised down by 1,000 from 268,000 to 267,000. The 4-week moving average was 282,250, a decrease of 3,000 from the previous week’s revised average.

 

The advance seasonally adjusted insured unemployment rate was 1.7 percent for the week ending March 28, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending March 28 was 2,304,000, a decrease of 23,000 from the previous week’s revised level. This is the lowest level for insured unemployment since December 9, 2000 when it was 2,263,000. The previous week’s level was revised up 2,000 from 2,325,000 to 2,327,000. The 4-week moving average was 2,360,750, a decrease of 27,500 from the previous week’s revised average. This is the lowest level for this average since January 13, 2001 when it was 2,360,500. The previous week’s average was revised up by 500 from 2,387,750 to 2,388,250.

 

The total number of people claiming benefits in all programs for the week ending March 21 was 2,617,970, a decrease of 141,794 from the previous week. There were 3,163,363 persons claiming benefits in all programs in the comparable week in 2014.

Curiously, the state breakdown did not show any sizable jump in the Texas claims for yet another week, which contradicts the Challenger layoffs report according to which Texas is now, based solely on the pace of terminations, in recession.

So will today’s good news be bad news for the market, just like Friday’s ugly jobs report was initially seen as bad news for the S&P only to lead to the biggest intraday surge of 2015 on Monday? Or will the “market” merely do Bill Dudley’s bidding and keep going higher, but not too fast?

 

end

 

The following is foolproof data from wholesale sales.  If it records a downturn, a recession is in order especially if the factory orders are also in decline.  Inventory levels are still rising not reflecting the slowdown in demand.

two very important graphs for you to see:

 

(courtesy zero hedge)

 

 

Recession 2.0: Abysmal Wholesale Sales Join Factory Orders In Confirming US Economic Contraction

Despite another data series revision by the Department of Commerce, there was no way to put lipstick on the pig of America’s wholesale trade data, and as reported moments ago, the all important merchant sales for February dropped for 3rd month in a row in February, the longest stretch since the last recession. After January’s downward revised plunge of 3.6% MoM (against -0.5% expectations), which was the biggest single monthly drop since March 2009, the decline continued in February at a -0.2% pace, wiping the floor with expectations of a 0.3% rebound.

Worst of all the annual pace of decline has now stretched over both January and February, confirming that 2015 is now officially a year of contraction for the US economy. As a reminder, every time this series suffers an annual decline, there is a recession.

 

Worse, not expecting the drop in demand, wholesales built up inventories once more, with wholesale inventories rising by 0.3%, above the 0.2% expected, and as a result the Inventory to Sales ratio has hit a new post-Lehman high of 1.29.

The above should not come as a surprise: a parallel and just as important data series, the US factory orders, also confirmed a week ago that the US is now in a recession, when Factory Orders tumbled by 4.3% Y/Y, their worst annual decline since, you got it, Lehman.

Source: Census Bureau

end

 
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