april 14/Greece contagion seems to be spreading as yields widen/silver open interest continues to rise despite the low price of silver/investors fleeing the oil ETF’s/ Bakken oil production mildly contracts yet production per well plummets/ Retails sales in the uSA falter again/Business inventories over sales ratio continues to rise signalling a stagnant economy/

Good evening Ladies and Gentlemen:



Here are the following closes for gold and silver today:



Gold:  $1192.80 down $6.50 (comex closing time)

Silver: $16.15 down 13 cents (comex closing time)


In the access market 5:15 pm

Gold $1192.25

Silver: $16.16



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



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


At the gold comex today,  we surprisingly had a poor delivery day, registering 1 notice served for 100 oz.  Silver comex filed with 5 notices for 25,000 oz .


Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 244.65 tonnes for a loss of 59 tonnes over that period. Lately the removals  have been rising!




In silver, the open interest rose by 2,014 contracts with Monday’s silver price down by 9 cents. The total silver OI continues to remain extremely high with today’s reading at 174,725 contracts. The front April month has an OI of 175 contracts for a gain of 0 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 5 notices served upon for 25,000 oz.



In gold,  the total comex gold OI rests tonight at 392,173 for a loss of 462 contracts with gold down by a considerable $5.30 on Monday. We had 1 notice served upon for 100 oz.



Today, we had no change in gold inventory at the GLD/  Gold Inventory rests at 734.29  tonnes


In silver, /  /we have another addition of .67 million oz of silver at the SLV/ and thus the inventory tonight is 324.900 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 huge 2014 contracts despite the fall in price on Monday (9 cents).  The OI for gold fell by 462 down to 392,173 contracts as the price of gold fell by a considerable  $5.30 on yesterday.

(report Harvey/)


2.Greece paid the iMF on Thursday.  On Friday, it was announced that the ECB increased its ELA to Greece by 1.2 billion euros up to 73.2 billion euros as more depositors fled.  Yesterday, the London’s Financial times has reported that Greece has decided that it will withhold the IMF payment in May and June so it can pay its pensioners. Also the reform package submitted by Greece is totally offside on its pension reform and on privatization. Contagion seems to be spreading as yields widen with the advanced risk of default. Today, the ECB advanced another 800 million euros of ELA as more depositors fled.

(courtesy London’s Financial times/Zero hedge/goldcore/GATA/Bloomberg)

3. In the oil patch, we are witnessing a huge decline of investors in the ETF’s.  Also total production of oil from Bakken shale is declining marginally.  However well productivity is dropping noticeably.  How could this be possible?  Simple the number of wells is exponentially rising

(zero hedge)

4. Two big misses on data from the USA:

i. Business inventories per retail sales still rising which is a pretty good indicator for a stagnant economy.

ii. Retail sales miss for the 4th month in a row

(zero hedge)

5. Bill Holter delivers a great paper on the 4G’s:

i) GE

ii) Greece

iii) Germany

iv) Gazprom

this is very important so you do not want to miss this.

6. Michael Krieger delivers a great commentary on the FBI hiding the true culprit in the 9/11 affair

(Michael Krieger)

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 462 contracts from 392,635 down to 392,173 with gold down by $5.30 yesterday (at the comex close).  We are now in the active delivery month of April and here the OI fell by 72 contracts down to 2,398. We had 0 contracts filed upon yesterday so we lost 72 contracts or 7200 oz will not stand for delivery in April. The next non active delivery month is May and here the OI rose by 22 contracts up to 506.  The next big active delivery contract month is June and here the OI fell by 920 contracts down to 263,623. 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 112,282  (Where on earth are the high frequency boys?). The confirmed volume yesterday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 115,213 contracts. Today we had 1 notices filed for 100 oz.

And now for the wild silver comex results.  Silver OI surprisingly rose by a huge 2014 contracts from 172,711 up to 174,725  despite the fact that silver was down by 9 cents, with respect to Monday’s trading.  We are now in the non active delivery month of April and here the OI remained at 175 for no gain of contracts.  We had 0 notices filed on Friday so we neither gained nor lost any silver ounces  standing in this delivery month of April. The next big active delivery month is May and here the OI fell by 1194 contracts down to 79,630 . The estimated volume today was poor at 25,888 contracts (just comex sales during regular business hours. The confirmed volume yesterday (regular plus access market) came in at 49,294 contracts which is excellent in volume. We had 5 notices filed for 25,000 oz today.



April initial standings

April 14.2015



Withdrawals from Dealers Inventory in oz  nil
Withdrawals from Customer Inventory in oz nil
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz 32,161.32  oz (HSBC)
No of oz served (contracts) today 1 contracts (nil oz)
No of oz to be served (notices)   2398 contracts(239,800) oz
Total monthly oz gold served (contracts) so far this month 687 contracts(68,700 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   oz

Total accumulative withdrawal of gold from the Customer inventory this month

  219,997.0 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 oz


we had 1 customer deposit:

i) Into HSBC: 32,161.32 oz

total customer deposit: 32,161.32 oz


We had 1 adjustment:

Out of the Delaware vault:

102.43 oz was transferred out of the customer and this landed into the dealer account at Delaware

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contracts of which 1 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 (687) x 100 oz  or  68,700 oz , to which we add the difference between the open interest for the front month of April (2398) and the number of notices served upon today (1) x 100 oz equals the number of ounces standing.

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

No of notices served so far (687) x 100 oz  or ounces + {OI for the front month (2398) – the number of  notices served upon today (1) x 100 oz which equals 308,400 oz or 9.592 tonnes of gold.


we lost 72 contracts or an additional 7200 oz will not stand for delivery in this April contract month.





Total dealer inventory: 567,638.401 or 17.655 tonnes

Total gold inventory (dealer and customer) = 7,865,699.514  oz. (244.65) tonnes)


Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 59 tonnes have been net transferred out. However I believe that the gold that enters the gold comex is not real.  I cannot see continual additions of strictly kilobars.






And now for silver


April silver initial standings

April 14 2015:



Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 1,226,696.34 oz (CNT,Brinks,Delaware)
Deposits to the Dealer Inventory  nil
Deposits to the Customer Inventory 1,966.6 oz (CNT)
No of oz served (contracts) 5 contracts  (25,000 oz)
No of oz to be served (notices) 175 contracts(875,000 oz)
Total monthly oz silver served (contracts) 320 contracts (1,600,000 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  9,343,963.9 oz


Today, we had 0 deposits into the dealer account:


total dealer deposit: nil   oz


we had 0 dealer withdrawals:


total dealer withdrawal: nil oz


We had 1 customer deposits:


ii) Into CNT: 1,966.600 oz



total customer deposits:  1966.600  oz


We had 3 customer withdrawals:



ii) Out of Brinks:  25,942.980 oz

iii) Out of CNT: 1,199,729.905 oz

iii) Out of Delaware; 1023.45 oz


total withdrawals;  1,387,174.86 oz


we had 1 adjustment:

i) Out of CNT vault:

24,553.400 oz leaves the customer at CNT and enters the dealer side of CNT.

Total dealer inventory: 62.972 million oz

Total of all silver inventory (dealer and customer) 173.775 million oz


The total number of notices filed today is represented by 5 contracts for 25,000 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 (320) x 5,000 oz    = 1,600,000 oz to which we add the difference between the open interest for the front month of April (175) and the number of notices served upon today (5) x 5000 oz equals the number of ounces standing.

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

320 (notices served so far) + { OI for front month of April(175) -number of notices served upon today (5} x 5000 oz =  2,450,000 oz standing for the April contract month.

we neither gained nor lost any silver ounces standing in 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




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 14/ no change in gold inventory at the GLD/Inventory rests at 734.29 tonnes

April 13.2015: we had a withdrawal of 1.75 tonnes of GLD/Inventory at 734.29 tonnes

April 10/we had no change in inventory at the GLD/Inventory at 736.04 tonnes

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 14/2015 /  we had no change in gold inventory at the GLD/Inventory stands at 734.29 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 : 734.29 tonnes.




And now for silver (SLV):

April 14. we had another addition of .67 million oz of silver at the SLV/Inventory rests at 324.900 million oz

April 13.2015: a huge addition of 2.391 million oz of silver at the SLV/Inventory rests at 324.230 million oz

April 10/ no changes in silver inventory at the SLV/Inventory rests at 321.839 million oz

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 14/2015 we had another addition  in inventory of 670,000 oz at the SLV / inventory rests at 324.900 million oz





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


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

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

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

Percentage of fund in gold 61.8%

Percentage of fund in silver:37.8%

cash .4%

( April 14/2015)



Sprott gold fund finally rising in NAV

2. Sprott silver fund (PSLV): Premium to NAV rises to + 0.58%!!!!! NAV (April 14/2015)

3. Sprott gold fund (PHYS): premium to NAV rises -.33% to NAV(April 14/2015

Note: Sprott silver trust back  into positive territory at +0.58%.

Sprott physical gold trust is back into negative territory at -.33%

Central fund of Canada’s is still in jail.






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


Gold and silver trading early this morning


(courtesy Goldcore/Mark O’Byrne)


Greece Out of Funds by Month End – Default and Drachma Imminent?


– Greek government to withhold IMF payments according to the FT
– Prime Minister Tsipras denies preparing for default according to Reuters
– Government funds to run out by end of month
– Default would likely lead to “Grexit” and return to drachma
– EU may not withstand uncertainty surrounding break-up of monetary union
– Concern could trigger derivatives crisis and ‘Lehman moment’
Like frogs in a pot of water that is very slowly coming to the boil

1,000 Greek Drachma Note

The Financial Times, citing unsourced “people briefed on the radical leftist government’s thinking” has made the claim that the Tsipras government in Athens has “has decided to withhold E2.5 billion of payments due to the International Monetary Fund in May and June if no agreement is struck”.

The Greek government was quick to deny the claim. “Greece … is not preparing for any debt default and the same goes for its lenders. Negotiations are proceeding swiftly towards a mutually beneficial solution,” read a statement from the Prime Minister’s office.

The Greek government is rapidly exhausting its funding  to pay salaries and pensions with no funding from its lenders having been released since July. Another “end of the road” deadline looms – this time the Eurogroup meeting on April 24th.

This meeting may truly be the “end of the road” because it is expected that the Greek government will have finally depleted its reserves and will be wholly dependent on its creditors by the end of this month.

Negotiations have been going around in circles since the election of the anti-austerity Syriza government in January and appear no closer to resolution. It became apparent in late February that neither side was prepared to compromise – each having too much to lose from deviating from their central positions. There has been adequate time, since then, for preparations to be made for an orderly “Grexit”.

Indeed, it may be that the two sides have agreed to disagree and are waiting for a politically expedient time for Greece to leave the euro. Media coverage of the crisis in both Germany and Greece is catalysing public opinion towards this end.

Yet, both sides have a lot to lose from a “Grexit” so it is no surprise that the brinkmanship will go down to the wire.

Despite protestations and denials, borrowing from the BRICS bank is still an option for Greece – opening the way for further influence from the East into Europe.

Indeed the ties between Greece and Russia have been strengthening in recent months.

While Europe may be preparing for a “Grexit” it is hard to imagine that it could withstand the uncertainty caused by such an event. Many banks are exposed to Greek debt and a default could trigger credit default swaps (CDS) and a derivatives crisis.

Derivatives have been described by Warren Buffet as ‘financial weapons of mass destruction’. A crisis in the derivatives market would badly impact the entire western financial system and could cause contagion.

In March we wrote with regards to the fact that Deutsche Bank had not passed the Fed’s stress test, “Equally troubling, is the fact that Deutsche Bank, who have derivatives exposure of over a whopping €54 trillion – almost nine times the GDP of the entire Eurozone – has serious issues with risk management.”

Were Deutsche Bank – with its “issues with risk management” – or any highly leveraged financial institutions to be caught in the middle of a default crisis it would cause a level of financial dislocation unseen in Europe in modern times.

While a ‘Grexit’ will likely be financially and monetarily positive for Greece itself in the long term, it would be devastating in the short term.

Gold in Greek Drachma - 10 years

This is why bank runs continue in Greece and Greeks continue tobuy gold sovereigns in volume. Greeks have been accumulating physical bullion in recent months in anticipation of ‘bank holidays’, possible bail-ins and indeed a possible return to the drachma.

A reversion to the drachma would lead to high inflation during the transitionary period although medium term it would grant Greece greater export muscle with it’s weakened currency and stimulate desperately needed economic growth.

Without the support of the ECB, the country’s banking system would be shut off from international markets and likely collapse.

The overall use of the euro system liquidity assistance (ELA) to Greece came close to €90 billion ($96 billion) in early 2015. The government would have to close the banks for a week or two, print emergency currency (drachmas), strictly limit households’ access to their deposits, and introduce capital controls.

When the market opened again, the new drachma would depreciate by 30-40% before finding an equilibrium.

It is often said that major historical events first unfold so slowly that people grow complacent. Then they accelerate so rapidly that people have little time to react. Like frogs in a pot of water that is very slowly coming to the ball.

The powers that be may find a way to postpone the inevitable beyond the end of this month. Prudence would dictate that precautionary measures be taken now to protect one from the potential for a European ‘Lehman moment’ and financial dislocations in Europe and across the world.

Updates and Award Winning Research Here


Today’s AM LBMA Gold Price was USD 1,191.45, EUR 1,127.95 and GBP 814.33 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,197.85, EUR 1,136.72 and GBP 820.54 per ounce.

Gold in USD - 5 Years

Gold fell 0.7 percent or $8.50 and closed at $1,199.70 an ounce on yesterday, while silver slipped 1.15 percent or $0.19 closing at $16.30 an ounce.

Gold dipped again Tuesday as a strong U.S. dollar has pressured bullion under $1,200 an ounce. Gold prices in Singapore were down 0.5 percent at $1,192.10 an ounce near the end of the day. The yellow metal reached a session low of $1,189.45, its weakest since April 1st.

The important data point and potentially the primary driver of gold prices today is US retail sales. This should give us a further read on the US economy and whether the recent poor data is a mere blip or an indication that the US economy is starting to slow down.

A positive number should see gold fall and test support at $1,180 per ounce. A negative number should see gold prices move higher and retest the $1,200 level.

Citigroup has trimmed its 2015 average gold price estimate to $1,190 from $1,220, citing “fundamental tightness being outweighed by continued U.S. dollar strength and macro investment headwinds”.

In London in late morning trading, spot gold is at $1,191.11  per ounce  or down 0.68 percent. Silver is at $16.17 per ounce or off 0.73 percent. Platinum is at $1,149.79  per ounce or down 0.28 percent.  Comex U.S. gold for June delivery fell to $1,192.20 per ounce.

Breaking Gold News and Research Here




 This was brought to your attention yesterday:
(courtesy London’s Financial Times/Hope and Barber/GATA)

FT: Greece prepares for debt default if talks with creditors fail


Kerin Hope and Tony Barber
Financial Times, London
Monday, April 13, 2015

Greece is preparing to take the dramatic step of declaring a debt default unless it can reach a deal with its international creditors by the end of April, according to people briefed on the radical leftist government’s thinking.

The government, which is rapidly running out of funds to pay public sector salaries and state pensions, has decided to withhold E2.5 billion of payments due to the International Monetary Fund in May and June if no agreement is struck, they said.

“We have come to the end of the road . … . If the Europeans won’t release bailout cash, there is no alternative” to a default, one government official said. …

… For the remainder of the report:





(courtesy Ronan Manly/GATA)

Ronan Manly: IMF’s gold moves around and changes quality


8:07p ET Monday, April 13, 2015

Dear Friend of GATA and Gold:

In the third of his series of reports on the International Monetary Fund’s gold depositories, gold researcher and GATA consultant Ronan Manly writes that the agency’s metal not only moves around but changes quality. His analysis is headlined “The IMF’s Gold Depositories — Part 3, Gold Swaps and the Quality of the IMF Gold” and it’s posted at Bullion Star here:


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





(courtesy Chris Powell/GATA)


Central bankers gather privately in Washington this Friday to discuss gold


3p ET Monday, April 13, 2015

Dear Friend of GATA and Gold:

Attention, mainstream financial journalists! Here’s something else important for you to ignore this week, thanks to the diligent eye of gold researcher and GATA consultant Ronan Manly.

It’s a breakfast meeting to be held Friday in Washington for “a select group of central banks and other official-sector institutions,” sponsored by the Official Monetary and Financial Institutions Forum and the World Gold Council, to discuss “gold, the renminbi, and the multicurrency system,” convened in conjunction with the spring meeting of the International Monetary Fund and World Bank Group, a United Nations agency:


“Discussions,” the discreet announcement from OMFIF says, “are under Chatham House Rules,” whereby information may be used but never attributed:


While many nations with central banks purport to be representative democracies and while the World Gold Council purports to be the representative of the gold industry, some of whose participants actually have to get their hands dirty every day —


— attendance at Friday’s meeting will be by invitation only. So for the record GATA has requested one.

But if you don’t get an invitation, you can fairly assume that the valuation of all capital, labor, goods, and services in the world is none of your business. This is after all the central bankers’ world. The rest of us are lucky that they let us even pass through it from time to time, though the impertinent among us might wonder why central bankers should need to talk in secret about something supposedly as irrelevant and retrograde as gold.

Good thing for them that mainstream financial journalists have neither curiosity nor backbone.

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




(courtesy Lawrence Williams/Mineweb)



What is China’s real gold consumption and where is it headed?

There are big discrepancies in published data on China’s real gold demand, but whichever figures one uses they all would seem to demonstrate a continually rising trend.



(courtesy Bill Holter/Miles Franklin)


The “other” 4G’s


No, we’re not talking about 4G phones, nor God, gold, guns and grub.  Today let’s look at GE, Greece, and finish with a very interesting Germany and Gazprom.  Last week GE shocked the market place by announcing they will sell their crown jewel GE Capital.  Why would they do this?  Isn’t GE capital their growth engine?  Isn’t it their cash cow?  What could they possibly be thinking?  In my opinion they are “thinking” correctly, maybe a bit too late though.
  The plan is to offload the finance division and pay a very large cash dividend to shareholders.  In my opinion they are calling “top” to the entire paper bubble now enveloping the world.  Maybe some sanity circulated the halls of their Fairfield Ct. home office and they decided the stone has no more blood to be squeezed?  Think about the macro situation, can interest rates go any lower from here?  What will happen to their “book” when interest rates start to rise?  What about their derivatives book?  I believe it is possible someone looked at this and figured out either they will be defaulted on or they themselves cannot perform somewhere?
  In any case, the decision to “sell” was made.  There are generally very few reasons to sell, far fewer than there are when deciding to buy something.  Sometimes the decision to sell is “forced” by a margin call or other situations where there is no choice.  For the most part, when a decision is made to sell something it is to profit or redeploy the capital elsewhere.  In this case the decision is to pay a large dividend and reinvest part back into their other businesses.  This will be looked at in retrospect as the final top to the market, I just wonder whether or not they will get to employ this strategy before the market falls apart and spoiling their plans?  We will see.
  We’ve spoken so much about Greece lately, I don’t want to be long winded here.  Greece made their 460 million euro payment last week and were promptly “re” funded 1.3 billion euros via previously pledged funds fro ELA.  The important thing this past week in my mind was the change of “tone”.  Mr. Varoufakis spoke of next month being “different” and Mr. Tsipras seemed to speak more boldly.  One must wonder what exactly was discussed behind the closed doors with Mr. Putin?  What did Russia offer if anything?  You can bet a pipeline deal was discussed, I would also bet that Greece’s “vote” was discussed.  The sanctions which  Russia now operates under are set to expire in June.  They cannot be extended with Greece voting to make it unanimous.  Will Greece leave or even be kicked out of the Eurozone?  The other interesting points were the strength of tone used regarding WWII reparations from Germany and the “status” of debt incurred since 2012 which they now term “odious”.  Little Greece is becoming more than a thorn in the side of the West.
  The main topic for today is Germany and Russian energy giant Gazprom.  Germany has apparently just ordered 100 Leopard 2 tanks http://mobile.reuters.com/article/idUSKBN0N11A920150410?irpc=932 “to ensure their troops are ready for action in response to Russian assertiveness”.  I have to wonder whether the addition of 100 tanks (a giant leap of a 45% increase) is really worth it considering the “signal” it sends.  Germany gets roughly 30% of their natural gas from Russia, do they really want to flex more muscle with such a large supplier of theirs?  I also wonder what the industrialists are thinking should this sour relations?
  Coincidentally, Russian energy giant Gazprom announced they will sell their 10.52% minority stake

http://russia-insider.com/en/gazprom-begins-retreat-germany/5502 in German gas supplier Verbundntz gas (VNG).  Gazprom’s position when aligned with a 15.7% stake held by Wintershall served as a blocking position.  With the stake’s power diminished, Gazprom has decided to sell.  The decision was also made last year to discontinue plans for the South Stream gas pipeline in favor of a route through Turkey …and thus ultimately Greece

  Please understand the significance of this chess strategy.  Turkey is a member of NATO, Greece is a member of the European Union.  Doing business with either (or both) puts a potential wedge in NATO’s unison and a “veto power” in the EU when it comes to renewing sanctions.  Has Mr. Putin and Russia put themselves in this position purposely or is it just business?  In my opinion Russia is simply taking the path of least resistance here which also has the “benefits” attached that come with both Turkey and Greece.
  The real head scratcher in all of this is Germany.  If you recall, they have been repatriating their gold from the New York Fed’s custody over the last two+ years.  It was said they had “total trust” in the Fed but no longer had a need to store the gold outside of their country …and the reaches of the big bad Russians.  Now they order more tanks because of the Russian perceived threat.  Will they continue to repatriate gold or will they stop and use the Russian threat as their reasoning?
  Another area where Germany is in a sticky spot is with Greece.  Will they continue to push austerity (which is actually senseless because Greece already owes too much)?  How will Germany handle Greece’s demands for WWII reparation?  Will they push for a Greek exit from the EU?  And of course one must wonder about the pipeline that will most likely go from Turkey towards Germany and Eastern Europe, now they have to wonder about the continuation of Russia selling them the gas and then the transmission through Greece.
  Germany now has pressure from so many different directions you almost have to feel sorry for them.  If I had to guess, it would not be surprising to see Germany pivot away from the U.S. and toward Russia and the Chinese.  This would only make sense as historically Germany and Russia have been very big trading partners and live in the same neighborhood to boot.  We may see a hint of what is to come as we approach June, remember, the current sanctions on Russia will run out and need to be renewed to continue.  Who does what and when, will be very interesting indeed!  Regards,  Bill Holter
  P.S.  late breaking icing to this cake, Germany’s banks brace for 50% writedowns (losses) from Austrian bank HETA http://www.bloomberg.com/news/articles/2015-04-10/bundesbank-tells-german-heta-creditors-assume-you-ll-lose-half  …and Greece is preparing for an exit from the Eurozonehttp://www.zerohedge.com/news/2015-04-13/we-have-come-end-road-greece-prepares-default-ft-reports!
Early morning trading from Asia and Europe last night:

1. Stocks mixed on major Chinese bourses as bubblemania is the name of the game in Shanghai and Hong Kong  /Japan bourse slightly higher /yen rises to 119.94/

1b Chinese yuan vs USA dollar/yuan  strengthens to 6.2118

2 Nikkei up by 3.22  or 0.02%

3. Europe stocks mixed/USA dollar index up to 99.47/Euro falls to 1.0570

3b Japan 10 year bond yield .33% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.94/

3c Nikkei still  above 19,000

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

3e WTI  52.36  Brent 58.13

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 rises to 22.11%/Greek stocks down 1.51%/ still expect continual bank runs on Greek banks.

3j  Greek 10 year bond yield:  11.50% (up 30 in basis point in yield)

3k Gold at 1187.50 dollars/silver $16.07

3l USA vs Russian rouble;  (Russian rouble up 5/8  rouble/dollar in value) 51.88 , the rouble is the best acting currency this year!!

3m oil into the 52 dollar handle for WTI and 58 handle for Brent/Saudi Arabia increases production to drive out competition.

3n Higher foreign deposits out of China sees huge 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 with the 10 year close to negativity/no doubt the ECB will have trouble meeting its quota of purchases and thus European QE will be a total failure.

3s  The ECB increased the ELA to Greece today by another  large 800 million euros.  The new maximum is 74.0 billion euros.  The ELA is used to replace depositors fleeing the Greek banking system.  The bank runs are increasing exponentially.

Greece repaid the IMF on Friday.  There will be nothing left April 24..


3t Deutsche bank to pay 1.5 billion euro fine for rigging Libor rates. Higher than expected.

4.  USA 10 year treasury bond at 1.91% early this morning. Thirty year rate well below 3% at 2.56%/yield curve flatten/foreshadowing recession.


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



(courtesy zero hedge/Jim Reid Deutsche bank)


Futures Slump As Asian Stock Bubble Calls A Timeout

Judging by the recent action in equity futures, the continuously rangebound US market since the end of QE may be entering its latest downphase, catalyzed to a big extent by the recent strength in the JPY (the EURJPY traded down to 2 year lows overnight), especially following yesterday’s not one but two statements by Abe advisor Harada saying a USDJPY at 125 isn’t “justified” and a 105 level would be appropriate. A level, incidentally, which would push the Nikkei lower by about 20% and crush Japanese pensions which are now mostly invested in stocks. Not helping matters was the pause in the Chinese and Hang Seng stock bubbles, with the former barely rising 0.3%, while the former actually seeing its first 1.6% decline after many days of torrid, relentless rises.

That said, everything can and will change with today’s March retail sales update. As a reminder, the past three months have seen the worst stretch since Lehman when it comes to US consumers spending their money at retail outlets or online, which has been mostly blamed on the winter. Of course, now that “bad is good” and vice versa once more, tje much anticipated rebound in retail sales will be very stock negative as it may mean that the Fed’s June tightening is back on schedule. A jump in PPI today will also be bad news for momentum chasing “traders.”

Indeed, Asian stocks traded mixed following a lacklustre Wall Street close, with investors observing caution ahead of the looming earnings season. The Shanghai Comp (0.3%) outperformed led by railway names amid talks that China is to invest CNY 2.8trl in railway infrastructure, while the Hang Seng (-1.6%) paused for breath, following its recent surge. Nikkei 225 (flat) consolidated throughout the session weighed on by continued JPY strength.

Bunds have ebbed higher in early trade to print yet another fresh contract high (159.54) with concerns over Greece still lingering, alongside dealers suggesting on-going interest from European real money according to analysts at IFR. Although officially denied by a Greek official, the FT reported last night that the country is preparing to default unless it can come to an agreement with its creditors. As a consequence the GR/GE 10yr spread trades 18bps wider on the day with the ASE down -0.9%. Elsewhere, stocks in Europe opened lower following the negative close on Wall Street and have traded with a downside bias into the North American open on broad based selling with consumer discretionary stocks the worst performing. The big single stock move of the morning came from French firm Alcatel-Lucent who have traded up as much as 16% following news of an approach from Nokia.

Yesterday, the head of the NY Fed’s PPT, Simon Potter, reiterated the warning by the TMPG noted previously, warning that last autumn’s “flash crash” in USTs could happen again due to the changing nature of US government deb”. He warning in a speech on Monday that the unintended consequences of regulatory and market changes could mean that “that sharp intra-day price moves become more common” in the future.

Looking specifically at UK assets the release of UK CPI saw GBP/USD come under selling pressure as participants focused on the Core Y/Y reading which came in at 1.0% vs Exp.1.2%. According to the ONS, the falls in clothing and gas prices produced the largest downward contributions to change in the inflation rate. Interesting to note that if the headline reading was adjusted to two decimal places then the reading for March was -0.01% Y/Y, which would be the first negative reading on record. Elsewhere, commodity linked currencies are weaker in sympathy with lower metal prices and with WTI and Brent crude futures declining ahead of the North American entrance.

Crude futures have drifted lower through the European morning paring back gains seen overnight amid no new fundamental news, however more definitive price action will likely stem from the looming US data in the form of US retail sales and PPI. As a reminder the weekly API inventories are due after market today and the initial estimates for this week’s DoE crude headline stands at a build of 3.5mln.

In oil specific news, Iraq are to lift their Basrah light exports by 5.3% to 2.52mln b/d in the month of May 2015. Meanwhile, Iran have set their May light crude to North West Europe at USD 3.90/bbl discount, heavy set at a USD 5.40/discount. (BBG)

In latest metal related forecasts, HSBC see 2015 and 2016 average iron price at USD 59/ton, sees iron ore supply rising over the next 2 years and says that one-third of global iron ore supply is to be loss-making. (BBG)

In summary: European shares fall with the banks and autos sectors underperforming and basic resources, real estate outperforming. The Spanish and Italian markets are the worst-performing larger bourses, the U.K. the best. The euro is little changed against the dollar. German 10yr bond yields fall; French yields decline. Commodities gain, with copper, zinc underperforming and WTI crude outperforming. U.S. small business optimism, retail sales, business inventories, PPI due later.

Market Wrap

  • S&P 500 futures down 0.2% to 2081.9
  • Stoxx 600 down 0.4% to 412
  • Euro down 0.01% to $1.0566
  • Dollar Index up 0.01% to 99.5
  • US 10Yr yield down 2bps to 1.9%
  • German 10Yr yield down 2bps to 0.14%
  • MSCI Asia Pacific little changed at 152.7
  • Gold spot down 0.6% to $1191.4/oz
  • Eurostoxx 50 -1.1%, FTSE 100 -0%, CAC 40 -0.7%, DAX -0.6%, IBEX -1.2%, FTSEMIB -1.1%, SMI -0.2%
  • Asian stocks little changed with the Kospi outperforming and the Hang Seng underperforming.
  • MSCI Asia Pacific little changed at 152.7; Nikkei 225 up 0%, Hang Seng down 1.6%, Kospi up 0.6%, Shanghai Composite up 0.3%, ASX down 0.2%, Sensex up 0.6%
  • 6 out of 10 sectors rise with consumer, utilities outperforming and tech, staples underperforming
  • Italian 10Yr yield little changed at 1.28%
  • Spanish 10Yr yield little changed at 1.25%
  • French 10Yr yield down 2bps to 0.41%
  • S&P GSCI Index up 0.5% to 414.8
  • Brent Futures up 0.4% to $58.1/bbl, WTI Futures up 0.6% to $52.2/bbl
  • LME 3m Copper down 1.1% to $5924.5/MT
  • LME 3m Nickel little changed at $12400/MT
  • Wheat futures down 0.3% to 498.5 USd/bu

Bulletin Headline Summary from Bloomberg and RanSquawk

  • US stock futures point to a lower open on Wall Street as European equities trade heavy on no new fundamental news with concerns still lingering over Greece
  • UK Core CPI comes in below expectations for March weakening GBP and lending support to gilt futures
  • Looking ahead attention will turn to US retail sales (Mar) and PPI (Mar) data which will be closely followed given the Fed’s focus on data.
  • Treasuries gain as German and French 10Y yields fall to record lows and before reports forecast to show retail sales rose 1.1% in March, core PPI increased 0.1%.
  • China’s economic growth rate probably slipped in 1Q to the slowest pace since the global recession of 2009, if analysts have called it right; GDP data to be released tonight at 10pm ET
  • Traders are betting that the China Securities Regulatory Commission will shy away from any serious steps to curb an explosion of margin finance, which fueled a 93% one- year surge in Shanghai’s benchmark stock gauge
  • Greek government officials are returning to work on Tuesday after the Orthodox Easter break to face the daily grind of negotiations to unlock financing and keep the country afloat
  • A Greek government official denied a FT report that Greece is preparing for a default
  • U.K. consumer prices stagnated for a second month as restaurants and hotels spared the country from outright deflation; core inflation slowed to the weakest in 9 years
  • The ECB could run out of eligible bonds to buy from some governments around the end of this year, which may prompt the central bank to loosen the rules of the plan and further suppress yields, according to Moody’s
  • Lawmakers skeptical about an Iran nuclear deal said U.S. Secretary of State John Kerry’s plea for more time to complete an agreement did little to dissuade them from insisting that Congress must review any final plan
  • Sovereign bond yields lower. Asian stocks mostly higher. European equities decline, U.S. equity-index futures fall. Crude oil higher, copper and gold decline
  • Germany says divide with Russia persists in latest Ukraine talks
  • U.K. Labour Party turns to private equity firms in tax crackdown
  • U.K. PM Cameron will pin his Conservative Party’s hopes of re-election on offering 1.3m poorer families the chance to buy their own homes
  • Draghi to highlight risks to recovery; may tweak QE, analysts say, ECB preview here
  • Europe’s high-yield market gets EU5b boost as at least 8 issuers roadshowing deals this week
  • European bond buyers find negative doesn’t necessarily mean bad
  • HSBC’s Major gets queasy over European bond levels after rally
  • Prudential chief echoes Dimon saying liquidity is top worry
  • Asian stocks head for 7Y high; Singapore dollar, oil advance
  • Oil gains for 4th day amid speculation U.S. shale boom is ending
  • Peripheral euro-area govt spreads vs Germany expanded yday, halting compression seen on Friday, with 5Y-15Y sectors underperforming on Spanish and Italian curves
  • Bearish catalysts included worries over Greece, Spanish supply on Thursday, Podemos comment that party wants to discuss debt restructuring


DB’s Jim Reid concludes the overnight event recap


It certainly wasn’t a day for intrigue, suspense or dragons for markets yesterday as things were fairly quiet after the weak Chinese numbers and some important data and earnings releases today and for the rest of the week. The reporting highlights today are probably JP Morgan and Wells Fargo in the financials space while Johnson & Johnson is due to report in corporate land (all before the bell). Intel is due to report post-market close as well. According to analysts’ expectations (Bloomberg), EPS for the S&P 500 is expected to fall 5.6% yoy this quarter (with subsequent falls in Q2 and Q3 expected before bouncing back in Q4). With the stronger Dollar and energy weakness playing on this reporting period, financials (-0.1% yoy) are expected to outperform the broader corporate universe, while the ex-energy related component of the index is actually forecast to see a modest +2.1% yoy in EPS growth.

In terms of data, retail sales in the US will probably be the highlight today after weak reports in recent months. Expectations are for +1.1% mom and +0.6% mom for the headline and core respectively. With the Fed data dependent, these tier one releases are important. Outside of the US, we’ll also see UK inflation where the market just expects (0.0% yoy) the UK to again avoid the first annualised deflation print since 1960. We’ll preview the rest of the day ahead at the end.

Moving on and turning to the early morning trading in Asia, following on from yesterday’s strong performance post the weak export numbers out of China, the Shanghai Comp (+0.96%) and CSI 300 (+1.06%) have extended gains this morning. Bourses elsewhere are more mixed. The Hang Seng (-0.48%) and Nikkei (-0.09%) are weaker while the Kospi (+0.47%) is firmer. Yesterday’s trade data reinforced the view of our China Economist Zhiwei Zhang that Q1 growth may have slowed sharply to 6.8% yoy from 7.3% yoy in Q4 last year with the market looking for a slightly higher 7.0% yoy print in tomorrow’s release. Zhiwei also maintains his stance of aggressive easing policy to start this quarter, with an RRR cut expected in April and interest rate cut in May.

With markets in something of a wait-and-see-mode yesterday, it was a quiet day all round as US equities in particular traded fairly subdued for the most part. The S&P 500 (-0.46%) and Dow (-0.45%) closed lower to bring to an end three consecutive days of gains. With perhaps one eye on earnings this week, financials (+0.28%) were the notable outperformer while energy (-0.84%) and industrials (-1.07%) lagged. Treasuries were a touch firmer yesterday as 5y (-2.8bps), 10y (-2.0bps) and 30y (-0.6bps) yields all closed lower. The Dollar continued to strengthen meanwhile with the DXY finishing +0.15% – its sixth consecutive day of gains. With the slightly damper tone generally, credit markets were a little soft yesterday as CDX IG closed 1.25bps wider.

Fedspeak continued yesterday and this time it was the turn of the San Francisco Fed President Williams (voting member) who said that risks are receding that an unexpected setback could derail a recovery in the US once the Fed raises rates. Williams also echoed some other recent Fed commentary, saying that ‘more importantly, we are really thinking about a path, we are talking about moving interest rates from zero to a normal level over several years’ before then going on to reiterate the dependence on data before firming any particular liftoff date. Elsewhere, in a report in the FT, Fed executive vice-president Potter yesterday warned of the possibility that the unintended consequences of regulatory and market changes could result in a similar ‘flash crash’ to that seen back on October 15th last year with ‘sharp intra-day moves becoming more common’. The article said that the move was a 1 in 1.6bn year event mathematically.

With headlines and data also few and far between in Europe, markets traded with little obvious direction as the Stoxx 600 (+0.16%) closed higher and the Dax (-0.29%) declined. In bond markets, Bunds finished unchanged while peripheral markets finished weaker as 10y yields in Spain (+2.9bps), Italy (+1.8bps) and Portugal (+7.0bps) all closed wider.

Greece was once again the main focus in European markets. Yesterday the FT ran a piece suggesting that the Greek government is preparing to declare a debt default unless it manages to reach a deal with its creditors by the end of the month. Meanwhile, with tensions running high and time running out, the EU Commission President Dombrovskis said yesterday that technical negotiations are ongoing but that talks are ‘very complicated’ and much ground still needs to be covered before the April 24th Eurogroup meeting. Finally German newspaper Bild yesterday suggested that the Greek government is considering early elections, however this has subsequently been downplayed by Greece officials.

Another event which will likely increase in attention in the coming weeks is the UK election. DB’s George Buckley noted yesterday that another hung parliament is looking likely with support for both the Conservatives and Labour running neck and neck. George argues that whichever political party is the larger following the election, neither is expected to come close to a majority and that whatever the result, George argues that there are few ‘good’ outcomes for financial markets. In the case of a Labour-led government, SNP support could encourage Labour to move further left in government resulting in increased taxes, less austerity and a likely slower reduction in the deficit. On the other hand, a Conservative-led government could see negative implications for investment and sterling with the promise of an EU referendum by 2017.

In terms of today’s calendar, as mentioned the CPI print in the UK will take up most of the attention this morning while the RPI and PPI readings for the region will also be due. Outside of these, Italian CPI and Euro-area industrial production are the other notable readings while the ECB is due to release the results of its latest quarterly Bank Lending Survey. Retail sales and earnings will be the primary focus across the Atlantic this afternoon, however PPI, business inventories and the NFIB small business optimism survey will also be of interest.




Greek bonds are plummeting as well as peripheral EU bonds as contagion risk is spreading:


(courtesy zero hedge)


Peripheral EU Bond Risk Surges As Grexit Contagion Spreads


Despite all the money-printing, bond-buying, ponzi-scheming; the looming reality of a possible Greek default is spreading rapidly across the rest of peripheral European bonds. Greek 3Y bond yields are up 167bps, breaking over 23% today. The last week has seen Italian, Portuguese, and Spanish bond risk rise 12-16bps – a dramatic move off such low Q€-driven bases. Already there is chatter that Spain’s resurgent Podemos party will look to negotiate restructuring their debt, which merely confirms the fact that for all the bluster, EU leaders are scared stiff of the implications of ‘allowing’ Greece to exit…

Greek bonds are dumping…

And peripheral European bond risk is contagion-ing…

Charts: Bloomberg




The impass between the Troika and the Greek government continues.

The key sections of disagreement:

1. pension reform

2. privatization of sovereign assets

3. sales tax increases

4.labour market reforms.

Also today, the ECB increased ELA funding to Greece by another 800 million euros up to 74 billion euros.


(courtesy Bloomberg)

Greek Talks Resume Amid Concern Reform Deadline Won’t Be Met


Talks on resolving Greece’s financial deadlock resume Wednesday amid growing creditor concern that Prime Minister Alexis Tsipras’s government won’t come up with the reforms necessary to unfreeze aid by its self-imposed deadline of April 24.The two sides are not moving closer to a deal, said an international official involved with the negotiations. The Greek government’s refusal to proceed with any privatizations, and its pledges to reverse labor-market reform, pension reform and budget savings can’t be accepted by the country’s creditors, the official said, asking not to be named as talks between the two sides are not public.A Greek official wasn’t immediately available for comment.As negotiations drag on, a further “crisis that would unsettle financial markets can’t be ruled out,” International Monetary Fund chief economist Olivier Blanchard said Tuesday. Greek stocks and bonds fell, with yields on the country’s 2017 notes rising the most in two months amid doubt that a solution will be reached by next week when euro-area finance ministers meet in Riga, Latvia to discuss the bloc’s most indebted state.

While leaving the euro would be “extremely painful” for Greece, “the rest of the euro zone is in a better position to deal with a Greek exit” than it has been previously, Blanchard said.

Cash Reserves

Greece’s government can use cash reserves of state enterprises, pension funds and local governments to stay afloat until May even if the Riga meeting is inconclusive, the international official said. Such a depletion of cash buffers would only make sense if the government’s final goal is to strike a compromise with creditors, the official said.

The European Central Bank increased the ceiling of emergency liquidity assistance available to Greek lenders to 74 billion euros ($79 billion) from 73.2 billion euros, people familiar with the matter said Tuesday. Greek banks have used about 70 billion euros of ELA so far, one of the officials said.

With a monthly bill of about 1.5 billion euros ($1.6 billion) for pensions and salaries, Greek officials last week said they are targeting the finance ministers’ meeting as a deadline for approving new money. In the first two weeks of May alone, Greece must make payments to the IMF of nearly 1 billion euros.

Red Lines

The negotiations on more aid are focused on honing an initial agreement reached in February over reforms including tax collection and maintaining sales of state-owned companies. That was struck a month after Tsipras was elected on a platform of rolling back austerity measures.

Greek officials have insisted that the government maintains so-called red lines it won’t cross, including pension cuts, sales-tax increases and plans to reintroduce labor-market regulations scrapped by previous administrations. Another flashpoint between the sides includes planned legislation to protect indebted households from lenders auctioning off primary residences. The ECB has criticized that proposal.

Later this week, the scene of Greece’s debt drama will turn to Washington, where Greek Finance Minister Yanis Varoufakis will be visiting. He’ll attend a Greek Independence Day reception at the White House, though no talks with President Barack Obama are scheduled, according to a U.S. official. A Greek Finance Ministry official said earlier that Obama and Varoufakis would meet.




The following is interesting.  Last night, the special adviser to Abe warned that 125 yen-120 yen to the dollar is not in the cards (and is too weak) whereas 105 yen is an appropriate level.  He must have been leaned on as he reversed his stance today:

(courtesy zero hedge)


JPY Jumps After Abe Special Adviser Shows He Has No Shame Whatsoever

It appears being Special Adviser to Japanese Prime Minister Shinzo Abe comes with great pressure to toe the line – as opposed to advise. Koichi Hamada yesterday said USDJPY 105 was “appropriate” and USDJPY 120 was “too weak”… that sent USDJPY tumbling. These comments were reiterated in the early Asia session and adding that he “doesn’t think JPY will weaken much further.” We wake up this morning and reuters reports that he has entirely flip-flopped his views saying now that“120 is appropriate,” and that he ” would not oppose further easing.” It’s clear someone got a tap on the shoulder…




The yen is fairly valued around current levels, a key economic adviser to Prime Minister Shinzo Abe said on Tuesday, a day after comments he made were taken to mean the yen was too weak.

“120 yen per dollar is acceptable,”Hamada said in an interview.

“I would not oppose further easing on April 30, because inflation won’t be generated even if the central bank eases again,” he said. “But I would not on my own oppose the BOJ adopting monetary easing for now.”

Stil trust what they say?

Chart: Bloomberg





Oil related stories:


The EIA predicts increased oil production for the next decade:

(courtesy zero hedge)




Crude Dips After EIA Forecasts Increased Oil Production For A Decade

(courtesy zero hedge)


The EIA’s annual energy outlook has something for everyone as it attempts to forecast energy markets out to 2040. For the bears, US crude oil production is expected to rise (even more than they had forecast last year – before the price collapse) as it seems, according to EIA the only thing more stimulative for oil production than high prices is low prices. For the bulls, EIA exuberantly forecasts prices soaring to over $240 by 2040 in a high growth environment. Crude prices are dipping modestly from their ramp highs.

Production will keep rising…

As Reuters notes,

The U.S. government on Tuesday forecast domestic crude production will rise even more than expected a year ago, undeterred by the worst price rout since the financial crisis.


U.S. crude oil production will peak at 10.6 million barrels per day in 2020, a million barrels more than the high forecast a year earlier, according to the annual energy outlook by the Energy Information Administration, the statistical arm of the U.S. Energy Department.


Crude production will then moderate to 9.4 million bpd in 2040, 26 percent more than expected a year ago, the agency said.


The reference case in the report forecasts Brent prices of $56 a barrel in 2015, rising to about $91 a barrel in 2025, $10 a barrel less than levels expected a year ago. The report uses the 2013 value of the dollar as its measure.


Despite lower prices, higher production will result mainly from increased onshore oil output, predominantly from shale formations, the agency said.


Onshore production in lower 48 states is expected to reach 5.6 million bpd in 2020 in the reference case, 34 percent more than expected a year ago.


The agency expects a faster oil drilling pace this year than it saw last year.


So “obviously” prices will keep rising…


Why should we believe the EIA? Because they soaccurately predicted the 2014 price crash which wiped out more than 50% from the price of a single barrell of oil in months.

Oh wait, they didn’t.


Annotated EIA report here:   see zero hedge for complete report




After quite a delay, we now are witnessing a huge exodus from OIl ETF’s


(courtesy zero hedge)


The Exodus Begins: Oil ETFs See Biggest Outflows In 15 Months

Just as we warned previously (here, here, and here), the knife-catching, contango-crushed, BTFDers that piled over $6bn into Oil ETFs have severely underperformed this year. The USO ETF has fallen by more than 9% since the start of the year, whereas front-month U.S. oil futures have dipped by less than 3% on account of roll costs, and as of last week, investors have started to exit this massive position en masse. As Reuters reports, outflows from four of the largest oil-specific exchange traded funds reached $338 million in two weeks to April 8 – the first since September and largest since Jan 2014. It seems Goldman was right about “misguided retail investors.

As Reuters reports, oil investors who amassed a $6 billion long position in exchange traded funds, occupying as much as a third of the U.S. futures market, are now racing for the exit at a near record pace.

Outflows from four of the largest oil-specific exchange traded funds, including the largest U.S. Oil Fund (USO), reached $338 million in two weeks to April 8, according to data from ThomsonReuters Lipper.

That is the first two-week outflow since September and the biggest since early 2014, marking a turnaround from heavy inflows in December and January on bets that oil prices would quickly rebound from six-year lows.

If the exodus gathers pace it could signal new pressure on crude oil prices that had begun to stabilize at around $50 a barrel this year following their 60 percent plunge, says John Kilduff, a partner at energy fund Again Capital LLC in New York.

Retail investors may have been “trying to bottom fish and got washed out with the recent new low,” he said.

“Passive investors have become a problem,” Philip K. Verleger, a consultant and energy economist, said in a note on Monday. ETF inflows are “denying those in the Middle East the decline in non-OPEC output they hoped to achieve”.

“The news lately has been uninspiring.Investors don’t want to be long and wrong in perpetuity,” said David Mazza, head of research at State Street Global Advisors, an institutional asset management firm with more than $2.4 trillion in assets.

*  *  *

For example, here is USO-specific flows…

As Goldman noted previously:

We believe that the key force pushing commodity markets higher has been retail investor inflows into oil ETFs.Importantly, these strong inflows have emerged despite weak commodity fundamentals, and with arguably a more bullish outlook for equities than for commodities…

We believe that these inflows are generating selling opportunities in oil and copper precisely because they are at odds with commodity market fundamentals. As we have previously outlined, even with the rapid fall in the US rig count over recent weeks, rising rig productivity, the backlog of wells and the possibility of high-grading in the near future, means that US production growth has not yet slowed enough to balance the oil market. The record US oil inventory builds seen over the last few weeks support this view, with US Gulf Cost (PADD 3) stocks now at 220 mil bbl, the highest level on record. Furthermore, we expect inventory builds to both continue over 2015H1 and to spread globally (OECD ex. US inventories have been drawing recently), as China’s oil import demand remains weak…

…and on home gamers’ “misunderstanding” of how the world actually works…

Apart from the obvious disconnect between recent price trends and physical fundamentals, the rationale of going long oil on an expected normalization or “mean reversion” also suffers from an incomplete view of how commodity returns are generated. Commodity returns incorporate both price returns and roll yields. And with roll yields currently around –9% for oil (–2.4% for the overall S&P GSCI), any upside to price returns is being significantly eroded by losses on roll yields. We expect this situation to continue for at least the next 6 months, with the roll yield on the S&P GSCI continuing to weigh on total returns. 

Thus, dramatic outflows from the major Oil ETFs will put further pressure on Oil futures prices.





The following is very important;  Bakken shale oil, the largest producer of shale oil in the USA, witnesses its output dropping to its lowest level since 2009. Even though total production fell marginally, the output per well dropped quite noticeably.  How could this be possible?  The number of wells is still rising exponentially.


(courtesy zero hedge)


Bakken Shale Oil Well Output Drops To Lowest Since 2009


In addition to the EIA’s amusing oil price forecast, which as noted previously leaves quite a bit to be desired considering it was a year ago that the EIA completely failed to anticipate the plunge in crude prices, which have collapsed far below its worst case estimate…


… there is another more substantial problem with the EIA predicting a consistent increase in oil output for the next 25 years.

That something is revealed when looking at the most recent Bakken shale production data, which earlier today revealed yet another month of declining total output, which after peaking in December is at 1.2 million barrels per day, as can be seen on the chart below.

However, it is not the total output, but the productivity of any given well that is troubling. As can also be seen on the chart below, the output per Bakken well has tumbled to 3,410, down from the 3862 recorded the month before, and the lowest since early 2009.


To be sure, there is a seasonal component to the February well output drop, which includes maintenance and other February factors, however, the magnitude of the monthly drop was undisputedly an outlier, as the 12% slide was the biggest monthly drop since January 2009 suggesting there is more here than simply seasonals.

So how is it that total production is just modestly lower when well production is tumbling? Simple: the number of wells continues, or rather continued as of February, to rise exponentially.


The question is how much longer can this surge in well numbers continue when as Baker Hughes has already reported, the oil rig count has been plunging in the past several months?

So the question for the EIA is this: what is the productivity deus-ex that is allowing such a generous forecast in the continued increase in total oil production, or if none, what is the estimate for the total number of Bakken shale rigs in the near and not so near future, and how does the EIA square that assumption with an energy industry whose capex spending has fallen off a cliff.

In any event, something is off: either US oil production is set to tumble, leading to another junk bond, and equity, rout among the energy companies (which as noted earlier are now trading at a near record high 32x forward PE), or oil production will continue rising and lead to another steep drop in prices, because without a dramatic pick up in demand, all this extra oil is merely piling up in Cushing and in various other storage hubs around the country, where it is merely awaiting for the tiniest increase in oil prices before hitting the market.

Source: North Dakota Dept of Mineral Resources

Late this evening, API inventories were released and they are down.
However we are getting close to maximum capacity at Cushing Oklahoma refineries. It is now past 90% full.
(courtesy zero hedge)

Crude Pops After Smaller-Than-Expected API Inventory Build, Cushing Capacity Concerns Remain

After last week’s record inventory build, it is perhap sno surpriose that API reports a 2.6mm build (below expectationsfor a mere 3.5mm bbl build). If this is confirmed by DOE data tomorrow, this will be the 14th week in a row – the longest streak on record. More importantly, the Cushing inventory build rose more than last week (+1.3mm vs +1.2mm) –  this is the 18th week in a row of inventory builds at Cushing (which is now over 90% full – 70.8mm bbl capacity).


Crude jumped modestly on this build…


But Cushing Capacity Constraints remain a concern…



Charts: Bloomberg

Your more important currency crosses early Tuesday morning:





Euro/USA 1.0570 down .00009

USA/JAPAN YEN 119.94 down .121

GBP/USA 1.4653 down .0013

USA/CAN 1.2582 down .0013

This morning in Europe, the Euro fell marginally again by 1 basis points, trading now well below the 1.06  level at 1.0570; 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 13 basis points and trading just below the 120 level to 119.94 yen to the dollar.

The pound was down this morning as it now trades just above the 1.46 level at 1.4653  (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 13 basis points at 1.2582 to the dollar

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: Tuesday morning : up by 3.22  points or 0.02%

Trading from Europe and Asia:
1. Europe stocks mixed

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

Gold very early morning trading: $1187.0




Early Tuesday morning USA 10 year bond yield: 1.91% !!!  down 2  in basis points from Monday night/


USA dollar index early Tuesday morning: 99.47 down 4 cents from Monday’s close. (Resistance will be at a DXY of 100)




This ends the early morning numbers, Tuesday morning




And now for your closing numbers for Tuesday:



Closing Portuguese 10 year bond yield: 1.76% up 8 in basis points from Monday


Closing Japanese 10 year bond yield: .33% !!! down 1 in basis points from Monday


Your closing Spanish 10 year government bond,  Tuesday, up 5 in basis points in yield from Monday night.


Spanish 10 year bond yield: 1.30% !!!!!!


Your Tuesday closing Italian 10 year bond yield: 1.31% up 2 in basis points from Monday:


trading 1 basis point higher than  Spain.






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


Euro/USA: 1.0649 up .0077  ( Euro up 77 basis points)

USA/Japan: 119.47 down .574  ( yen up 5 basis points)

Great Britain/USA: 1.4776 up .0108   (Pound up 108 basis points)

USA/Canada: 1.2493 down .0100 (Can dollar up 100 basis points)


The euro rose during the afternoon, stopping any further losses as the uSA dollar was whacked from all sides today.  It settled up 77 basis points to 1.0649. The yen was up 57 basis points points and closing well below the 120 cross at 119.47. The British pound gained considerable  ground today, 108 basis points, closing at 1.4776. The Canadian dollar  closed at 1.2493 to the USA dollar, up 100 basis points.

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






Your closing 10 yr USA bond yield: 1.90% down 3 in basis points from Monday


Your closing USA dollar index:

98.79 down 72 cents on the day.



European and Dow Jones stock index closes:




England FTSE up 10.96 or 0.16%

Paris CAC  down 36.06 or 0.69%

German Dax down 111.13 or 0.90%

Spain’s Ibex down 161.70 or 1.36%

Italian FTSE-MIB down 256.00 or 1.07%



The Dow:up 59.66 or 0.33%

Nasdaq; down 10.96 or 0.22%



OIL: WTI 53.08 !!!!!!!

Brent: 58.41!!!!



Closing USA/Russian rouble cross: 50.99 up  1 1/4 rouble per dollar

the best advancing currency so far this year.








And now your important USA stories:



NYSE trading for today.


Dollar Dumped, Oil Pumped As Another Retail Sales Miss Sends Stocks Surging


Another day, another miss on retail sales, another opening buying-panic pump and immediate dump, and another miraculous v-shaped recovery in stocks… We dusted off this clip as an analogy for thr grip on reality that every “investor” appears to be losing….


Energy leads the way today after lagging dramatically yesterday…


But as Tech loses ground so Nasdaq ends red with Dow and S&P surging after the post-retail sales dip, opening rip…


On the week, Small Caps remain very modestly green – everything else red…


The intraday moves in US equity markets are not clear until you see the futures markets moves… come on!!!!Almost 700 Dow points swings…


VIX traded in a very narrow range today…


Big roundtrip in bonds today as TSY yields tumbled on retail sales and then pushed back higher all afternoon on very low volumes…


The Dollar was monkey-hammered as EUR ramped 150 pips to oiver 1.07 after the retail sales miss… but as the afternoon wore on USD buyubg returned…


Despite USD weakness, copper, gold, and silver contoinued to slide…


As Crude just did its own crazy thing ahead of tonight’s API inventrory data…



Charts: Bloomberg

Bonus Chart: What goes down, must go up?


The sell side is rapidly lowering Q1 GDP:

(courtesy zero hedge)



Q1 GDP Expectations Are Crashing

In just six short months, expectations for US economic growth in Q1 2015 has been slashed by more than half (from ‘trend’ 3% to a mere 1.4% growth this week). While consensus is still well above the Atlanta Fed’s 0.1% forecast, the sell-side is rapidly being forced to admit it’s not just the weather…

GDP growth is collapsing…

and the bounces in forward earnings and US macro data are stalling once again…

Chart: Bloomberg





The following is a reliable indicator to indicate a stagnate economy:

(courtesy zero hedge)


Stocks Stumble As Business Inventory-to-Sales Ratio Hovers At Lehman Levels


The post-retail-sales, opening ramp has been eviscerated as yet another data series suggests things aren’t well in the US economy. US Business inventories rose more than expected in February (+0.3% vs +0.2% exp) but this held the crucial inventories-to-sales ratio at 1.36x – the highest since the Lehman spike.

Worst since Lehman…

And stocks continue to slide…

Charts: Bloomberg

Retail sales miss for the 4th month in a row.  Remember that the consumer is 70% of GDP:
 (courtesy zero hedge)

Retail Sales Miss For 4th Month In A Row: First Time Since Lehman

After 3 months of missed expectations and the first consecutive drop in retail sales since Lehman, retail sales rose 0.9% in March (missing expectations of +1.1%), following a revised 0.5% drop in February.While the 0.9% rise is the biggest since March last year, this is now the worst streak of missed expectations in retail sales since 2008/9. Ex-Autos, retail sales also mised expectations (rising just 0.4% vs 0.7% exp).

This is the worst March YoY growth in retail sales (control group) since 2009…

The breakdown shows what we already know: courtesy of soaring non-revolving loans, auto sales spiked in March…

… however offset by modest increases in other category, with electronics, food and online sales posting a decline. Too warm outside to spend money on Amazon.com?

And another quick look at the control group: while rising at 0.3% in March, this was below the 0.5% expected, meaning another cut to Q1 GDP, while the annual increase of 2.4% was the lowest since last February.

Quite a story!!
(courtesy Michael Kreiger)

The FBI Is Using “Aggressive Deception” To Cover Up Saudi Links To 9/11 Attack

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Screen Shot 2015-04-13 at 1.13.10 PM

Former Democratic Sen. Bob Graham, who in 2002 chaired the congressional Joint Inquiry into 9/11, maintains the FBI is covering up a Saudi support cell in Sarasota for the hijackers. He says the al-Hijjis’ “urgent” pre-9/11 exit suggests “someone may have tipped them off” about the coming attacks.


Graham has been working with a 14-member group in Congress to urge President Obama to declassify 28 pages of the final report of his inquiry which were originally redacted, wholesale, by President George W. Bush.


“The 28 pages primarily relate to who financed 9/11, and they point a very strong finger at Saudi Arabia as being the principal financier,” he said, adding, “I am speaking of the kingdom,” or government, of Saudi Arabia, not just wealthy individual Saudi donors.


Sources who have read the censored Saudi section say it cites CIA and FBI case files that directly implicate officials of the Saudi Embassy in Washington and its consulate in Los Angeles in the attacks — which, if true, would make 9/11 not just an act of terrorism, but an act of war by a foreign government.


– From the New York Post article: How the FBI is Whitewashing the Saudi Connection to 9/11

One of the strangest aspects of the post 9/11 period has been the number of very intelligent people who intimately appreciate and fight against the innumerable crimes and thefts committed by the American oligarchy, yet simply can’t comes to terms with the fact that the official story of September 11, 2001 is a heaping pile of bullshit. At the end of the day, I think it’s just a function of managing career risk. Having already achieved some level of public success, not many people will want to give the mainstream media the opportunity to attach “9/11 truther” to their name, thus tarnishing all the other work they do in the mind of the general public.

I’ve never claimed to know exactly what happened on that day. The only thing I’ve said is that we aren’t being told anything close to the whole story, and without the real story, the entire “war on terror” becomes a gigantic scam. I simply don’t believe that a few guys pulled off these attacks and brought down the World Trade Center without state backing. Once state backing enters the equation, the entire thing does indeed become a very real conspiracy. One that takes on special significance if the state sponsor is one of America’s closest allies in the Middle East. An ally that is unquestionably a ruthless, medieval-style monarchy that was itching to rid itself of Saddam Hussein in Iraq.

Over the past few years, it has become increasingly obvious that elements within the Saudi government were directly responsible for 9/11. I suggest familiarizing yourself with the following:

Must Watch Video – Congressman Thomas Massie Calls for Release of Secret 9/11 Documents Upon Reading Them

Two Congressmen Push for Release of 28-Page Document Showing Saudi Involvement in 9/11

Moving along, the New York Post reports that the FBI is going out of its way to cover up this involvement, despite extremely suspicious events that were called into question immediately after 9/11. For example:

Just 15 days before the 9/11 attacks, a well-connected Saudi family suddenly abandoned their luxury home in Sarasota, Fla., leaving behind jewelry, clothes, opulent furniture, a driveway full of cars — including a brand new Chrysler PT Cruiser — and even a refrigerator full of food.


About the only thing not left behind was a forwarding address. The occupants simply vanished without notifying their neighbors, realtor or even mail carrier.

Perfectly normal, particularly when you combine it with the fact that 15 of the 18 hijackers were Saudi citizens.

The 3,300-square-foot home on Escondito Circle belonged to Esam Ghazzawi, a Saudi adviser to the nephew of then-King Fahd. But at the time, it was occupied by his daughter and son-in-law, who beat a hasty retreat back to Saudi Arabia just two weeks before the attacks after nearly a six-year stay here.


Neighbors took note of the troubling coincidence and called the FBI, which opened an investigation that led to the startling discovery that at least one “family member” trained at the same flight school as some of the 9/11 hijackers in nearby Venice, Fla.


The Saudi-9/11 connection in Florida was no small part of the overall 9/11 investigation. Yet it was never shared with Congress. Nor was it mentioned in the 9/11 Commission Report.

Some report…

Now it’s being whitewashed again, in a newly released report by the 9/11 Review Commission, set up last year by Congress to assess “any evidence now known to the FBI that was not considered by the 9/11 Commission.” Though the FBI acknowledges the Saudi family was investigated, it maintains the probe was a dead end.


The review panel highlighted one local FBI report generated from the investigation that said Abdulaziz and Anoud al-Hijji, the prominent Saudi couple who “fled” their home, had “many connections” to “individuals associated with the terrorist attacks on 9/11/2001.”


But: “The FBI told the Review Commission that the communication was ‘poorly written’ and wholly unsubstantiated,” the panel noted in its 128-page report. “When questioned later by others in the FBI, the special agent who wrote (it) was unable to provide any basis for the contents of the document or explain why he wrote it as he did.”


How strange. Yet panelists did not interview the unidentified agent for themselves. They just accepted headquarters’ impeachment of his work.


The panel’s report also doesn’t explain why visitor security logs for the gated Sarasota community and photos of license tags matched vehicles driven by the hijackers, including 9/11 ringleader Mohamed Atta.


Former Democratic Sen. Bob Graham, who in 2002 chaired the congressional Joint Inquiry into 9/11, maintains the FBI is covering up a Saudi support cell in Sarasota for the hijackers. He says the al-Hijjis’ “urgent” pre-9/11 exit suggests “someone may have tipped them off” about the coming attacks.


Graham has been working with a 14-member group in Congress to urge President Obama to declassify 28 pages of the final report of his inquiry which were originally redacted, wholesale, by President George W. Bush.


“The 28 pages primarily relate to who financed 9/11, and they point a very strong finger at Saudi Arabia as being the principal financier,” he said, adding, “I am speaking of the kingdom,” or government, of Saudi Arabia, not just wealthy individual Saudi donors.


Sources who have read the censored Saudi section say it cites CIA and FBI case files that directly implicate officials of the Saudi Embassy in Washington and its consulate in Los Angeles in the attacks — which, if true, would make 9/11 not just an act of terrorism, but an act of war by a foreign government. The section allegedly identifies high-level Saudi officials and intelligence agents by name, and details their financial transactions and other dealings with the San Diego hijackers. It zeroes in on the Islamic Affairs Department of the Saudi Embassy, among other Saudi entities.


The review commission, however, concludes there is “no evidence” that any Saudi official provided assistance to the hijackers, even though the panel failed to interview Graham or his two key investigators — former Justice Department attorney Dana Lesemann and FBI investigator Michael Jacobson — who ran down FBI leads tying Saudi officials to the San Diego hijackers and documented their findings in the 28 pages.


Graham smells a rat: “This is a pervasive pattern of covering up the role of Saudi Arabia in 9/11 by all of the agencies of the federal government which have access to information that might illuminate Saudi Arabia’s role in 9/11.”

If the 9/11 attacks were indeed orchestrated by Saudi Arabia, then it’s not a stretch to ask who else may have been involved or aware of it ahead of time considering the extremely close relationship between the U.S. and the desert monarchy. The apparent cover-up makes everything look even more suspicious.

Oh, and in the event that the New York Post isn’t sophisticated enough for you, this was also covered the by the New York Times in the article, Florida Ex-Senator Pursues Claims of Saudi Ties to Sept. 11 Attacks. Here’s an excerpt:

“One thing that irritates me is that the F.B.I. has gone beyond just covering up, trying to avoid disclosure, into what I call aggressive deception,” Mr. Graham said during an interview in a family office in this Miami suburb, which rose on what was a sprawling dairy farm operated by Mr. Graham’s father, also political leader in Florida.

“Conspiracy theory” indeed.




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