April 17/According to Dave Kranzler, it looks like a massive derivative bust/Meijer: A GREXIT by May 9/the ECB thinking about a parallel currency for Greece i.e. issuing IOU’s/Oil rigs continue to fall in number/Dow falls/GLD has a huge addition of 3.01 tonnes of gold

Good evening Ladies and Gentlemen:

 

 

Here are the following closes for gold and silver today:

 

 

Gold:  $1202.90 up $4.90 (comex closing time)

Silver: $16.22 down 6 cents (comex closing time)

 

In the access market 5:15 pm

Gold $1203.25

Silver: $16.27

 

 

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 good delivery day, registering 1 notice served for 100 oz.  Silver comex filed with 0 notices for nil oz .

 

Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 244.40 tonnes for a loss of 58 tonnes over that period. Lately the removals  have been rising!

 

end

 

In silver, the open interest rose by 1065 contracts with Thursday’s silver price up by 1 cent. The total silver OI continues to remain extremely high with today’s reading at 174,943 contracts remaining close to record highs. The front April month has an OI of 172 contracts for a gain of 2 contracts. We are now at multi year high in the total OI complex despite a record low price. This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end.

 

We had 0 notices served upon for nil oz.

 

 

In gold,  the total comex gold OI rests tonight at 397,852 for a gain of 1277 contracts with gold down by a considerable $3.40 on Thursday. We had 1 notice served upon for 100 oz.

 

 

Today, we had a huge addition of 3.01 tonnes in  gold inventory at the GLD/  Gold Inventory rests at 739.09  tonnes

 

In silver, /  /we had no change in silver inventory 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 1065, contracts with the rise in price on Thursday (1 cent).  The OI for gold rose by 1277 contracts up to 397,852 contracts as the price of gold fell by  $3.40 on yesterday.  We also have a report on the gold and silver COT

(report Harvey)

2,Many important commentaries on Greece

(Bloomberg/Zero Hedge)

 

3. China introduces short selling.  This causes the futures to plummet by 7%

(courtesy zero hedge)

4. Dave Kranzler comments that he believes that there has been a massive derivative bust and the Feds are scrambling.

a must read…

(Dave Kranzler/IRD)

 

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 1277 contracts from 396,575 up to 397,852 with gold down by $3.40 yesterday (at the comex close). We are now in the active delivery month of April and here the OI fell by 319 contracts down to 1,827. We had 334 contract filed upon yesterday so we gained 15 contracts or an additional 1500 gold ounces will stand for delivery in April. The next non active delivery month is May and here the OI fell by 35 contracts down to 489.  The next big active delivery contract month is June and here the OI rose by 432 contracts up to 264,688. 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 74,706. The confirmed volume yesterday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 168,756 contracts. Today we had 1 notice filed for 100 oz.

And now for the wild silver comex results.  Silver OI rose by 1065 contracts from 173,878 up to 174,943  despite the fact that silver was up by only 1  cents, with respect to Thursday’s trading. Somebody big is willing to take on JPMorgan and we must have lost a few nervous nellies along the way.  We are now in the non active delivery month of April and here the OI rose to 172 for a gain of 2 contracts.  We had 0 notices filed on Thursday so we  gained 2 silver contracts or an additional 10,000 silver ounces will stand in this delivery month of April. The next big active delivery month is May and here the OI fell by 3257  contracts down to 69,562.  We have 2 weeks before first day notice on Thursday, April 30.2015. The estimated volume today was poor at 31,461 contracts (just comex sales during regular business hours. The confirmed volume yesterday (regular plus access market) came in at 57,041 contracts which is excellent in volume. We had 0 notices filed for nil oz today.

 

 

April initial standings

April 17.2015

Gold

Ounces

Withdrawals from Dealers Inventory in oz  nil
Withdrawals from Customer Inventory in oz 8134.2 oz (Manfra, HSBC)
Deposits to the Dealer Inventory in oz nil
Deposits to the Customer Inventory, in oz 50,020.016 (HSBC)
No of oz served (contracts) today 1 contracts (100 oz)
No of oz to be served (notices)  1826 contracts(182,600) oz
Total monthly oz gold served (contracts) so far this month 1024 contracts(102,400 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   oz

Total accumulative withdrawal of gold from the Customer inventory this month

  278,223.4 oz

Today, we had 0 dealer transaction

total Dealer withdrawals: nil oz

 

we had 0 dealer deposits

 

total dealer deposit: nil oz

we had 2 customer withdrawals

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

ii) Out of HSBC:  8,037.75 oz (250 kilobars)

 

 

total customer withdrawal: 8134.2 oz

 

we had 1 customer deposit:

i) Into HSBC: 50,020.016

total customer deposit: 50,020.016 oz

 

We had 0 adjustment:

 

 

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 1 contract of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account

To calculate the total number of gold ounces standing for the March contract month, we take the total number of notices filed so far for the month (1024) x 100 oz  or  102,400 oz , to which we add the difference between the open interest for the front month of April (1827) 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 (1024) x 100 oz  or ounces + {OI for the front month (1827) – the number of  notices served upon today (1) x 100 oz which equal 285,000 oz or 8.86 tonnes of gold.

 

we gained 15 contracts or an additional 1500 oz will stand for delivery in this April contract month.

This has been the lowest amount of gold ounces standing in an active month in quite some time.

 

 

 

 

Total dealer inventory: 567,927.751 or 17.66 tonnes

Total gold inventory (dealer and customer) = 7,857,533.165  oz. (244.40) tonnes)

 

Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 58 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 17 2015:

Silver

Ounces

Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 63,617.512oz (Delaware,Scotia)
Deposits to the Dealer Inventory  nil
Deposits to the Customer Inventory 1,183,777.295 oz (JPM)
No of oz served (contracts) 0 contracts  (nil oz)
No of oz to be served (notices) 172 contracts(860,000 oz)
Total monthly oz silver served (contracts) 343 contracts (1,715,000 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  10,568,264.0 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 JPM: 1,283,777.295 oz  *  this is the 7th day out of 7 ,that JPMorgan has deposited a huge amount of silver in its customer account.  Something is seriously happening behind the scenes.

 

total customer deposits:  1,183,777.295  oz

 

We had 2 customer withdrawals:

 

 

i) Out of Delaware: 3,044.392 oz

iii) Out of Scotia; 60,573.12 oz

 

total withdrawals;  63,617.512 oz

 

we had 0 adjustments:

 

 

Total dealer inventory: 62.972 million oz

Total of all silver inventory (dealer and customer) 175.939 million oz

.

The total number of notices filed today is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in April, we take the total number of notices filed for the month so far at (343) x 5,000 oz    = 1,715,000 oz to which we add the difference between the open interest for the front month of April (172) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing.

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

343 (notices served so far) + { OI for front month of April(172) -number of notices served upon today (0} x 5000 oz =  2,575,000 oz standing for the April contract month.

 

we  gained 2 contracts or an additional 10,000 ounces of silver will stand in this delivery month.

 

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 17.2015/ we had a huge addition of 3.01 tonnes of gold inventory at the GLD.  It looks like the raids at the GLD have stopped.

April 16.2015: no change in inventory at the GLD/total inventory at 736.08 tonnes

April 15/ a huge addition of 1.79 tonnes of gold inventory added to the GLD/ Inventory tonight at 736.08 tonnes

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

 

 

April 17/2015 /  we had a huge addition of 3.01 tonnes of gold inventory at the GLD/Inventory stands at 739.09 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 : 739.09 tonnes.

 

end

 

And now for silver (SLV):

April 17.2015: no change in silver inventory tonight at the SLV.324.900 million oz

April 16.2015: no change in silver inventory tonight at the SLV/324.900 million oz

April 15.2015: no change in silver inventory tonight at the SLV/324.900 million oz is the inventory tonight.

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

 

 

 

April 17/2015 we had no change in inventory  at the SLV / inventory rests at 324.900 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 8.4% percent to NAV in usa funds and Negative 8.8% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 61.6%

Percentage of fund in silver:38.00%

cash .4%

( April 17/2015)

 

 

Sprott gold fund finally rising in NAV

2. Sprott silver fund (PSLV): Premium to NAV rises to + 0.48%!!!!! NAV (April 17/2015)

3. Sprott gold fund (PHYS): premium to NAV falls -.33% to NAV(April 17/2015

Note: Sprott silver trust back  into positive territory at +0.48%.

Sprott physical gold trust is back into negative territory at -.313%

Central fund of Canada’s is still in jail.

 

 

end

 

 At 3:30 pm we get the COT report.

Let us head over and see the gold COT first:

Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
184,741 86,344 44,957 130,960 234,553 360,658 365,854
Change from Prior Reporting Period
1,611 3,971 5,798 -2,239 -6,935 5,170 2,834
Traders
143 87 73 51 48 228 181
 
Small Speculators  
Long Short Open Interest  
34,431 29,235 395,089  
-652 1,684 4,518  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, April 14, 2015

Our large specs:

Those large specs that have been long in gold added 1611 contracts their long side.

Those large specs that have been short in gold covered a monstrous 3971 contracts from their short side.

Our commercials;

Those commercials that have been long in gold pitched a large 2239 contacts form their long side.

Those commercials that have been short in gold covered a monstrous 6935 contracts from their short side.

Our small specs:

Those small specs that have been long in gold pitched 652 contracts from their long side.

Those small specs that have been short in gold added 1684 contracts to their short side.

 

Conclusions:  commercials going net long by 4696 (bullish)

And now for silver:

 

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
61,417 26,872 27,726 67,026 110,891
-1,824 5,712 5,993 2,434 -4,139
Traders
87 46 53 41 47
Small Speculators Open Interest Total
Long Short 177,877 Long Short
21,708 12,388 156,169 165,489
1,574 611 8,177 6,603 7,566
non reportable positions Positions as of: 150 129
Tuesday, April 14, 2015   © SilverSeek
Our large specs:
Those large specs that have been long in silver pitched  1824 contracts from their long side.
Those large specs that have been short in silver added a monstrous 5712 contracts to their short side????
Our commercials;
Those commercials that have been long in silver added 2434 contracts to their long side
Those commercials that have been short in silver covered a huge 4139 contracts from their short side.
Our small specs:
Our small specs that have been long silver added 1574 contracts to their long side.
Those small specs that have been short in silver added 611 contracts to their short side.
Conclusion: commercials go net long again by 6573 contracts and should be extremely bullish.

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

 

Gold and silver trading early this morning

 

(courtesy Goldcore/Mark O’Byrne)

 

Gold In Dollars Has “Hallmarks Of Market That Bottoming”

MARKET UPDATE

Today’s AM LBMA Gold Price was USD 1,204.55, EUR 1,113.83 and GBP 801.86 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,204.60, EUR 1,131.19 and GBP 811.40 per ounce.

Gold fell 0.29 percent or $3.50 and closed at $1,199.00 an ounce on yesterday, while silver rose 0.18 percent or $0.03 closing at $16.29 an ounce.

Gold in USD - 1 Week

In Singapore gold was at $1,200.80 an ounce near the end of day trading. In late European trading gold is at $1,205.31 an ounce or up 0.52%. Silver is at $16.44 an ounce or up  0.87% while platinum at at $1,165.67 an ounce or up 0.41%.

Gold remained firm above $1,200 an ounce today with the weaker dollar, negative economic data and concerns about a Greek debt default supporting this week. Greece’s government has been dead locked in talks over harsh measures to its bailout loans. Germany’s Finance Minister said an agreement next week would be unlikely increasing the likelihood of a default.

For the week, in dollar terms gold is $2 or marginally lower, while silver is down 0.3% and platinum is down nearly 1%. Palladium is outperforming and is up 1% and is having its third straight weekly gain.

The marginal losses are the first loss since the week ended March 13. After recent sharp gains in euros terms in particular and indeed in sterling terms, gold was weaker in both currencies this week.

Gold in GBP - 1 Week

European markets were sharply lower in morning trade, as investors become increasingly nervous about the funding crisis in Greece and the Chinese economy. Falls in Chinese stock markets and an outage on Bloomberg financial terminals did not help increasing market jitters.

There is also some nervousness creeping in about the risk of over valuations and developing bubbles in stock and bond markets globally – not to mention a developing global property bubble.

Some analysts posit that uncertainty over the timing of the U.S. Fed’s first interest rate hike in ten years is weighing on gold but this uncertainty appears to be exaggerated, especially given the fact that much of the economic data this week out of the U.S. and China has been negative and suggests the U.S. and global economy are weakening again.

This would be bearish for stocks and bonds and bullish for gold.

Gold in Euro - 1 Week

Yesterday’s economic data out of the U.S. was fairly poor. Weekly unemployment claims came in at 284,000 and 294,000 were forecast.  The Philly Fed manufacturing index was 7.5 versus 6.5 forecasted. U.S. building permits and housing starts were both below their forecasts.

The U.S. inflation number today was a non event and was largely as expected.

U.S. economic data released this week showed signs of economic weakness, adding to speculation that the Federal Reserve may delay raising interest rates.

Fed Vice Chairman Stanley Fischer said yesterday that he expects the economy to rebound after a soft first quarter. Atlanta Fed President Dennis Lockhart and Boston Fed chief Eric Rosengren said in separate speeches the recent spate of weak data made them more wary of tightening too soon.

The surge in oil and energy prices this week could be supportive of gold next week.

goldcore_chart6_17-04-15

Gold has all the hallmarks of a market that is engaged in a long process of bottoming.

Much of the weak hands have been washed out of the market with us and many bullion dealers internationally are seeing renewed selling of bullion this week after gold fell below $1,200 again. This is especially the case among small retail investors who are nervous about further price falls and capital losses. Some high net worth clients continue to dollar cost average into gold and silver bullion due to the quite strong fundamentals.

Sentiment in general remains poor and all the focus is on gold’s weakness in dollar terms, despite gold’s strong gains in euro terms in 2014 and so far in 2015. Poor sentiment is of course bullish from a contrarian perspective and suggests all the froth has been washed out of the gold market.

Gold’s gains in euro terms in 2014 and again in 2015 is a harbinger of higher prices in dollar terms in the coming months. The fact that gold has held up so well despite dollar strength, equities continuing to surge and the collapse of oil prices is positive for the long term outlook.

However in the short term, the technicals remain poor and the momentum, trend following traders are focussed on gains in stocks, bond and other markets. This could result in further weakness next week.

Dollar cost averaging into position remains prudent given developing risks of a new global financial crisis – possibly triggered by a Greek default in the Eurozone.

Breaking Gold News and Research Here

 

end

 

(courtesy Reuters/GATA)

Greece scrapes bottom of barrel in hunt for cash to stay afloat

Section:

By Lefteris Papadimas and Deepa Babington
Reuters
Friday, April 17, 2015

ATHENS — Greece will need to tap all the remaining cash reserves across its public sector — a total of 2 billion euros ($2.16 billion) — to pay civil service wages and pensions at the end of the month, according to finance ministry officials.

Barring a last-ditch deal with its creditors, that would leave no money to repay the International Monetary Fund almost 1 billion euros due in the first half of May. Athens’ scramble for basic funds shows how extreme the financial constraints on Greek Prime Minister Alexis Tsipras have become as he tries to convince skeptical foreign creditors to extend his country new financial aid.

Officials from Greece and the lenders are meeting in Brussels on Saturday for a new round of negotiations ahead of a key euro zone finance ministers’ meeting in Riga on April 24.

“This is the last bit of cash that the Greek state has,” a senior finance ministry official, who requested anonymity, told Reuters.

Euro-zone officials have voiced scepticism about previous Greek warnings of empty coffers, although even they acknowledge a crunch is nearing. …

… For the remainder of the report:

http://www.reuters.com/article/2015/04/17/us-eurozone-greece-cash-exclus…

end

 

Alasdair Macleod…

(courtesy Alasdair Macleod/GATA)

Alasdair Macleod: The overvalued dollar

Section:

By Alasdair Macleod
GoldMoney.com
Friday, April 17, 2015

There are two connected reasons usually cited for the current dollar strength: the U.S. economy is performing better than all the others, leading toward relatively higher U.S. dollar interest rates, and that this is triggering a scramble for dollars by foreign corporations with uncovered U.S. dollar liabilities. There is growing evidence that the first of these reasons is no longer true, in which case the pressure to buy dollars should lessen considerably. …

… For the full commentary:

http://www.goldmoney.com/research/analysis/the-over-valued-dollar?gmrefc…

 

end

 

(courtesy Lawrence Williams/Mineweb)

Is gold tide beginning to turn?

Some mainstream analysts predict better things ahead for gold and other precious metals, although this is not a unanimous view.

The LBMA Gold Price at this morning’s benchmark setting was at $1 204.55 – up 1.7% for the year to date (ytd). For comparison the S&P 500 was up 2.3% ytd and the Dow up 1.5%. In the Euro the gold price has risen a little over 12%, while the German DAX index is up 22% and the UK’s FTSE all share index up 8.2%. Thus gold has not necessarily been performing badly in comparison with the general equities markets – indeed in the key US it has marginally outperformed the DJIA and slightly underperformed the S&P 500.

So is the perception tide now turning for gold? Interestingly all three of the recent major analytical studies on gold – from CPM Group, GFMS and Metals Focus suggested that they expected gold to bottom this year with a price pickup anticipated in the final quarter. But they were also forecasting a further fall in price during Q2 and Q3. Now we are also beginning to see more positive predictions for the yellow metal from some of the major bank analysts, after almost wholly negative forecasts only a few months ago, although this is by no means yet an unanimous viewpoint.

But even taking these better forecasts into account, they mostly see the gold price as being at best perhaps a little better than flat this year, but picking up more strongly in 2016 and 2017 – but still nothing like the kinds of levels the gold mega bulls have been preaching.

Some analysts seem to feel gold’s fundamentals are getting stronger with a continuation in high Asian demand – seen as rising along with an ever growing middle class (and associated wealth) in key consuming nations China and India, where there is a strong predilection to acquire gold both as an outward show of wealth, but also as a protection against possible difficult economic times ahead. As has been well reported here on these pages, China has been actively encouraging purchases of precious metals via media advertising by the state controlled banks, while it is widely believed that the nation is itself substantially increasing its own gold holdings without reporting this to the IMF, as a support for the growing internationalisation of the yuan and the possibility of it gaining a place in the make-up of the IMF’s Special Drawing Rights (SDR) reserve asset.

However, this latter is not a foregone conclusion, whatever the logic might be,  as the US has effective veto powers over major IMF decisions (through its 16.75% voting power while an 85% plus approval vote is required to confirm major changes) and it may see increasing Chinese participation in the global economy as a potential threat to its own current global currency dominance.

The new Modi government in India is also a bit of an unknown here as it seems to blow hot and cold over gold. India has had a massive balance of payments problem, exacerbated by the populace’s huge gold demand which has to be mostly satisfied through imports as nowadays the country has virtually no domestic production.  Consequently the previous government slapped high duties on imports of precious metals, together with other restrictions to try and reduce the gold proportion of its current account deficit. While the new government has relaxed some of the restrictions imposed, the high duty levels remain in place, at least for the time being, although it is under pressure to bring these down – but at the same time has proposed other legislation which could adversely affect gold purchasing. It is also desperately trying to persuade some of those entities with massive gold holdings (mostly Hindu temples) to monetise their gold. The temples are thought to hold as much as 3 000 tonnes of gold and the idea is for the temples to deposit their gold with the banks – in exchange for interest payments and the banks could thus lease the gold to the huge jewellery sector, thus cutting the necessity for such a high level of gold imports (gold apparently accounting for more than 20% of the nation’s total import bill) and thereby improving the deficit. However there is much doubt as to whether the temples will be willing to relinquish their gold holdings in this manner.

India’s gold imports otherwise are expected to amount to perhaps 1 000 tonnes this year, but the payment balance may otherwise be improved by lower oil prices, and the likelihood of a reduction in gold import duties is probably dependent on how the government sees the current account deficit position faring.

Otherwise, looking further ahead, it is expected that the lower gold prices will start to adversely impact global new mined gold production perhaps this year or next with uneconomic gold mines – and there are plenty of these – beginning to shut down at a greater rate, while the incentive to find new deposits, or build new mines, has been reduced sharply over the past three years. Scrap supplies have also been falling due to lower prices, so the latest GFMS analysis predicts a gold supply deficit this year – and this deficit could increase, particularly if Asian gold demand holds up or increases.  But again this is not a scenario with which all would agree.

Mainstream gold investment in comparison with other investment options is very much about perception and there is the indication that this may at last be changing after three years of mostly adverse media publicity. This does need to be a strong perception change though to more than counter the high frequency traders who appear to be stopping any major upwards price breakout in its tracks. But if gold can continue to hold its own against the major stock indices then a trickle could eventually become a flood – particularly given some very significant global geopolitical uncertainties which are continuing to simmer away, and a US economy which seems to be underperforming expectations.

Gold prices may well, for the time being at least, be driven by ups and downs in U.S. data and Fed interest rate raising speculation, coupled with the occasional impact of some peculiar massive gold trades on the markets, but we do see these things changing as Asia becomes ever more involved in global gold price setting.  We are already seeing the start of this, and it is bound to grow so gold probably is at or near its bottom, with better things ahead.

But gold price growth may well continue to proceed at a far slower pace than the precious metal’s adherents would anticipate, although at some point in time an inflection point will be reached (perhaps triggered by some key event) and we should see a big price surge yet again.

As always the question remains as to when this might occur. For the time being its always, as Lewis Carroll had the White Queen say to Alice in ‘Through the Looking Glass’ – “The rule is, jam tomorrow and jam yesterday, but never jam today” which Alice found most confusing saying “It must come sometimes to ‘jam today’” to which the White Queen demurred. But gold investors have to hope that indeed ‘jam today’ will come for the yellow metal and that that day will be soon at hand.

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 higher /yen rises to 118.69/Shanghai to allow short selling to stop their bubble

1b Chinese yuan vs USA dollar/yuan slightly weakens to 6.1978

2 Nikkei down by 232.89  or 1.17%

3. Europe stocks down/USA dollar index down to 97.25/Euro rises to 1.08.14

3b Japan 10 year bond yield .31% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 118.69/

3c Nikkei still  above 19,000

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

3e WTI  56.34  Brent 63.64

3f Gold up/Yen up

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

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

3h  Oil down  for WTI and down for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund below 10 basis points. German bunds in negative yields from 9 years out.

Except Greece which sees its 2 year rate remains at a monstrous 26.86%/Greek stocks down another 1.11%/ still expect continual bank runs on Greek banks.

3j  Greek 10 year bond yield:  12.77% (up 80 in basis point in yield)

3k Gold at 1204.80 dollars/silver $16.42

3l USA vs Russian rouble;  (Russian rouble down 3/4  rouble/dollar in value) 50.79 , the rouble is the best acting currency this year!!

3m oil into the 56 dollar handle for WTI and 63 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.  It is not working:  USA/SF this morning 95.17 as the Swiss Franc is rising against most currencies.  Euro vs SF is 1.0286 well below the floor set by the Swiss Finance Minister.

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

3r the 9 year German bund now enters 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 last Friday.  There will be nothing left April 24..

 

3t Greece informally asks the IMF to delay its payment for May 1 and they refuse.

3 u.  Bloomberg terminal outage last night, cancelling much trading.

4.  USA 10 year treasury bond at 1.85% early this morning. Thirty year rate well below 3% at 2.53%/yield curve flatten/foreshadowing recession.

 

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

 

 

(courtesy zero hedge/Jim Reid Deutsche bank)

Global Futures Slide After Worldwide Bloomberg Outage, China Tumbles

Just as China was closing for trade and Europe was opening, something previously unseen happened: no, not another another GPIF or Virtu inspired marketwide stop squeeze, those are quite recurring these days. It was every Bloomberg terminal around the globe getting suddenly disconnected.

This promptly led to widespread panic among traders mostly in Europe, who were flying blind and unable to chat with other, just as clueless colleagues (the one function used predominantly on the terminal is not charts, nor analytics, but plain old chat).

It got so bad that in a world in which everything has become automated, Europe was forced to delay or cancel pricing various bond deals.

As the WSJ observed, the U.K.’s Debt Management announced in a statement Friday morning that it was postponing a scheduled buy-back of government debt ”due to ongoing technical issues with the third party platform supplier,” and that bids already submitted would be declared null and void. A spokesperson confirmed that the supplier is Bloomberg.

In short if the “terrorists” want to take down the financial world, all they have to do is crash the chat system used by global bond traders. As a reminder, equity “traders” speak in nanosecond bursts of binary, and don’t need Bloomberg.

The WSJ continued: “It’s scary how dependent we have become on our Bloomberg screens,” said Anthony Peters, a strategist at London-based capital markets adviser SwissInvest. “We had [bond] deals which are not going ahead due to this,” one London-based banker said, other bankers said that trading volumes had fallen as a result of the outage.

“The communication chat has become vital to the sharing of information across regions and counterparties. So a global outage like this is systemically important to markets all around the world,” said Louis Gargour, the chief investment officer at London-based asset manager LNG Capital, adding that this shows just how vulnerable the market has become.

 

“We’re flying blind and in our office as our principal counterparties are unable to act as market makers, therefore we’re all catching up on admin because there is little else that we can do,” he added.

 

A second London-based banker said that even if you wanted to do a bond deal in today’s market, “you couldn’t as communication with possible investors and salespeople is incredibly difficult.”

 

A third fixed income banker said that he was involved in a deal but relying on phone conversations for communicating with brokers and investors, which he said feels incredibly “old fashioned”.

 

The outage was trending on Twitter in early European trade and in Asia. Bloomberg said on its website: “We are currently restoring service to those customers who were affected by today’s network issue and are investigating the cause.”

It is unclear if the Bloomberg outage, which has since been largely restored, was the catalyst, but suddenly global futures turned blood red on no major news, with China equity futures tumbling about 5% and dragging European and US futures down with them.

This move is likely unrelated to the Bloomberg outage, and likley has to do with what appears to be either a long overdue crackdown on margin trading in China, or a regulatory push for more shorting:

  • CSRC TO BAN MARGIN FINANCING FOR OTC STOCK TRADING
  • CHINA TO EXPAND STOCKS AVAILABLE FOR SHORT SELLING TO 1,100

Others say Europe’s weakness which has pushed Bunds to even lower record low yields, is due to even more rumblings of an imminent Greek default, with Greek banks in southeast European countries told to exit Greek debt, a step which would render them insolvent overnight and start a financial inferno that drags down all Greek banks.

In any event, should the Bloomberg outage return, and the market crash persist, some are now asking: “if the markets crash and nobody MSGed, did the markets really crash?

* * *

A brief summary of what else has happened so far:

 

European shares fall with banks, chemicals sectors underperforming and oil & gas, utilities outperforming. The Spanish and Italian markets are the worst-performing larger bourses, the U.K. the best. Euro is stronger against the dollar. German 10yr bond yields fall; Japanese yields decline. Commodities decline, with natural gas, WTI crude underperforming and copper outperforming. Euro is stronger against the dollar. European index, equity options expire today. China Securities Regulatory Commission is to ban margin financing for OTC stock trading. Shenzhen stock exchange says will allow publicly raised funds in short selling. VW Board Leaders Support CEO Winterkorn in Struggle With Piech. Alibaba Health said CEO Wang Jian resigned. FCC Denies Petition to Reconsider Vodafone-Verizon Wireless Ruling. U.S. CPI, Michigan confidence leading index due later.

Market Wrap

  • S&P 500 futures down 0.5% to 2090.6
  • Stoxx 600 down 1% to 406.7
  • US 10Yr yield down 3bps to 1.86%
  • German 10Yr yield down 2bps to 0.07%
  • MSCI Asia Pacific down 0.1% to 154.2
  • Gold spot up 0.6% to $1205.6/oz
  • 12.2% of Stoxx 600 members gain, 87% decline
    Eurostoxx 50 -1.3%, FTSE 100 -0.3%, CAC 40 -1%, DAX -1.3%, IBEX -1.7%, FTSEMIB -1.6%, SMI -0.6%
  • Asian stocks little changed with the Shanghai Composite outperforming and the Nikkei underperforming.
  • MSCI Asia Pacific down 0.1% to 154.2; Nikkei 225 down 1.2%, Hang Seng down 0.3%, Kospi up 0.2%, Shanghai Composite up 2.2%, ASX down 1.2%, Sensex down 0.8% * 5 out of 10 sectors rise with energy, telcos outperforming and tech, staples underperforming
  • Euro up 0.67% to $1.0833
  • Dollar Index down 0.32% to 97.11
  • Italian 10Yr yield up 7bps to 1.45%
  • Spanish 10Yr yield up 5bps to 1.4%
  • French 10Yr yield down 1bps to 0.34%
  • S&P GSCI Index down 0.2% to 433.6
  • Brent Futures down 0.7% to $63.5/bbl, WTI Futures down 0.8% to $56.2/bbl
  • LME 3m Copper up 1.3% to $6136/MT
  • LME 3m Nickel down 0% to $12840/MT
  • Wheat futures up 0.1% to 491 USd/bu

 

end

 

 After their market closed, China announced that they will allow short selling.  Futures immediately plummeted setting the stage for a Monday rout:
(courtesy zero hedge)

This Is China’s Short Selling Announcement Which Sent Chinese Futures Plunging

As noted earlier, while tens of thousands of Bloomberg terminal users were twiddling their thumbs during an outage that lasted several hours, China crashed.

 

There was some confusion about the cause of the rapid move, but it appears the catalyst was an announcement by the China Securities Regulatory Commission in which it allowed fund managers to lend shares for short-selling, and will also expand the number of stocks investors can short sell, in a bid to raise the supply of securities in the market.

Reuters has more:

Investors now face difficulties borrowing stocks for sale, even with some companies trading at lofty valuations.

 

China’s shares posted seven weeks of gains, reaching seven-year highs on Friday, as retail investors rushed to open stock accounts and borrow a record amount of money to buy shares, pushing trading turnover to record highs.

 

Institutional investors including mutual fund companies and asset management businesses of securities firms are encouraged to lend stocks because the “margin financing business has been growing rapidly, but the business of short-selling has been developing slowly,” the Shanghai and Shenzhen stock exchanges said in a statement.

 

The type of stocks that investors can short sell will also be expanded soon to 1,100, from 900 currently.

Some promptly interpreted this as a blessing by the authorities to short stocks and acted accordingly. “This is a combination of actions that is negative to the stock market,” said Shen Zhengyang, Shanghai-based analyst at Northeast Securities.

“With index futures to hedge against risks, institutions would be willing to lend stocks for interest income.”

In other words, in its rapid push to “modernize” its stock trading, China totally forgot to fully implement the infrastructure to enable shorting. No wonder it “doubled” the value the Shanghai Composite over the past year.

Anyway, it seems that the infrastructure to short stocks has finally been enabled.

What happens next?  Shen added that a correction in Chinese stocks “is unavoidable”, given the rich valuations of some stocks.

The China’s securities regulator warned as much, when during a conference held earlier today, it cautioned investors of market risks. “Some investors have insufficient understanding and alertness of market risks,” Deng Ge, spokesman of the China Securities Regulatory Commission said. “I want to remind retail investors: invest rationally, and always treat the market with awe.”

 

end

 

After the Chinese markets closed, the futures came crashing down:

 

(courtesy zero hedge)

Chinese Stocks Are Still Crashing

While the Chinese are long to bed, futures continue to trade on their exuberant stock market… and it’s going south in a hurry. As we noted earlier, the catalyst appears to be a regulatory decision to increase the number of ‘shortable’ securities (and follow-through from PBOC’s day prior demands of brokers to monitor margin trading). Both of these actions were taken as ‘signals’ that policymakers may be getting nervous about the ebullient wealth creation… Chinese stock futures are now down almost 7% – the 2nd biggest drop in 7 years.

It appears the 4% rally post-crappy-GDP print was a little too far too fast..

This seemed to sum things up rather well…

Source: Nanex LLC

 

end

 

This will not go over well with the Greek citizenry:

(courtesy zero hedge)

Greece May Pay Wages And Pensions In IOUs

 

Earlier today we said the following about the Greek government’s rapidly deteriorating cash situation:

 

So it’s either pay salaries and pensions or pay the IMF which is tragically ironic because Athens has already gone the route of plundering pensions to make payments to its creditors, the only difference is that now, instead of “borrowing” money from the public coffers and hoping to pay it back in the interim before anyone actually gets shorted, you’re talking about simply not paying people at all (or paying people with IOUs which would be the hilarious rough equivalent of conducting repos with individual citizens) which needless to say could turn into an untenable social and political issue virtually overnight, not to mention the fact that if the government defaults you would almost certainly see the imposition of capital controls in order to stem the inevitable deposit flight. Athens owes nearly €2 billion in public sector wages and pensions at the end of the month. 

 

For anyone who thought we were joking when we suggested Athens may look to pay government employees with IOUs, we were not, nor were we kidding when we said such a move by the Greek government would almost immediately plunge the country into a state of extreme instability which would likely be characterized by mass protests, bank runs, and then capital controls to stop the bank runs. While we certainly hope, for the sake of the poor Greek populace, that this eventuality does not play out, here’s Capital Economics to explain what an IOU scenario would entail:

The Greek crisis has reached a new crunch point amid signs that the Eurogroup will not grant desperately needed financial aid after next week’s meeting. Greece might resort to IOUs and/or capital controls to avoid a disorderly default and keep the banks afloat for now. But such measures would offer a temporary solution at best and could be the first steps towards a euro-zone exit.

Assuming that a deal is not reached next week, there are a couple of routes that the Greek Government might take to avert disaster in the short term. First, it could issue IOUs to pay public sector workers and pensioners and free up money to repay its debts. But this could cause economic chaos if fears that the IOUs would never be paid sparked riots or public sector employees simply refused to work.

And that’s exactly what would happen. Greeks have labored under the threat of economic collapse for years and surely being paid with an IOU issued by a government who just turned over your paycheck to the IMF which is set to disburse $2.4 billion in aid to Ukraine at just about the exact same time Greece would officially go into default (remember there’s a 30-day lag, Greece will likely fall short in early May, and the second tranche of aid is set to be delivered to Ukraine in June) would be the final insult and we imagine that all of those public sector workers who refuse to work would use their time off to express, in one way or another, their extreme displeasure at their socialist ‘savior’ Syriza.

Here’s more from Capital Economics:

Even if Greek people accepted IOUs, they could only function for a very short period.Before long, those receiving incomes in IOUs could only afford to pay their taxes through the same medium. And given that the Government’s international creditors would not accept IOUs as repayment, this would still lead to a debt default.Effectively, the IOUs would become a parallel currency whose value was deemed lower than that of a normal euro. This would be akin to a euro-zone exit.

It’s worth taking a moment to reflect on that absurd chain of events. By paying citizens in IOUs, Athens would be virtually ensuring that it would remain insolvent because even as the Greek government isn’t the most efficient tax collector in the world, some taxes are better than no taxes, and the latter is what you would have if Greeks began to hand in their IOUs in place of euro-denominated tax payments and we suspect that Capital Economics is correct when they say that the IMF would not be amenable to accepting sticky notes from Varoufakis that say “a little short right now, will pay you when able”especially given the fact that Greece is already issuing the rough equivalent of those in the form of Greek T-bills which are sitting on the books of the very same Greek banks which, in the event the IOU solution is pursued, will be besieged by the very same citizens to whom the IOUs are issued.

*  *  *

Or, put more simply:

end
Late this afternoon, the ECB is thinking about this parallel currency or IOU’s:
(courtesy zero hedge)

The ECB Is Considering A Parallel Greek Currency

As we first reported yesterday, one of the proposed measures to be implemented in Greece just before, or during its default and/or exit from the Eurozone, in addition to pervasive capital controls of course, is the implementation of a parallel “currency”, or as explained yesterday, a government paying its citizens with IOUs.

This is what we said less than 24 hours ago:

Greece might resort to IOUs and/or capital controls to avoid a disorderly default and keep the banks afloat for now. But such measures would offer a temporary solution at best and could be the first steps towards a euro-zone exit.

 

Assuming that a deal is not reached next week, there are a couple of routes that the Greek Government might take to avert disaster in the short term. First, it could issue IOUs to pay public sector workers and pensioners and free up money to repay its debts. But this could cause economic chaos if fears that the IOUs would never be paid sparked riots or public sector employees simply refused to work.

 

Even if Greek people accepted IOUs, they could only function for a very short period. Before long, those receiving incomes in IOUs could only afford to pay their taxes through the same medium. And given that the Government’s international creditors would not accept IOUs as repayment, this would still lead to a debt default. Effectively, the IOUs would become a parallel currency whose value was deemed lower than that of a normal euro. This would be akin to a euro-zone exit.

Today, to our dismay, we find that the ECB has not only considered a “parallel currency” alternative but for Greece this may be a reality before long. According to Reuters,the ECB “has analyzed a scenario in which Greece runs out of money and starts paying civil servants with IOUs, creating a virtual second currency within the euro bloc, people with knowledge of the exercise told Reuters.”

“The fact is we are not seeing any progress… So we have to look at these scenarios,” said one person with knowledge of the matter.

 

A spokesman for the ECB said it “does not engage in speculation about how specific scenarios regarding Greece could unfold.”

One Greek government official, who declined to be named, said there was no need to examine such a scenario because Athens was  optimistic it would reach a deal with its international lenders by the end of the month.

 

Not surprisingly, “experts at the ECB have concluded that using IOUs to pay public sector wages would probably fail to avert a full-blown crisis and could even threaten Greece’s future in the 19-country euro zone.”

This is precisely what we warned about yesterday when we further noted that “Greece is already issuing the rough equivalent of those in the form of Greek T-bills which are sitting on the books of the very same Greek banks which, in the event the IOU solution is pursued, will be besieged by the very same citizens to whom the IOUs are issued.”

What is most surprising is how eager the ECB is to instill a banking sector panic and a self-fulfilling prophecy of a terminal bank run. In fact, as we noted first back in February, based on the rhetoric out of the Eurozone the eurocrats are practically desperate to crush the Greek financial system (perhaps in order to teach the Syriza government a lesson) where it is a miracle there are still any deposits left.

What is disturbing is the lack of vision on behalf of the ECB about what will surely happen to every peripheral European country’s deposits once it is revealed that what was, according to Draghi, an “unbreakable” union is quite fragile and where the safety of one’s lifetime savings is entirely contingent on not electing a government which the Troika deems unworthy.

Back to the ECB and its calculations:

Those officials believe that up to 30 percent of Greeks would end up receiving such government IOUs rather than payment in euros, which would only put further pressure on Greek banks because those workers were likely then to plunder their savings.

 

The banks would then be forced to tap increasing amounts of emergency liquidity funding or boost their capital base.

 

But the banks could not use the IOUs as security for drawing down the emergency credit because the ECB would not accept them.

 

“The IOUs, I just don’t think it can work,” said the first person who spoke to Reuters. “That could effectively be it, they would be out (of the euro).”

 

Those fears were voiced by others familiar with ECB thinking.

 

With a parallel currency … you are getting to something so tailored that you are almost in Grexit,” said a second person. “It is something that is outside the institutional set-up.

Perhaps the only question at this point is whether Bloomberg (which today showed beyond a reasonable doubt it is as systematically important as any financial institution when 2 hours of downtime led to a worldwide panic), will show the XGD first

 

or the XIOU?

In any event, it is only a matter of time before the Drachma, which may or may not look as rendered below, is now officially back.

end
Three scenarios developing with respect to the upcoming Greek sovereign default or possible default.  The last scenario will set up an atomic blast throughout the world crippling the globe’s finances.  Written last night
(courtesy Bloomberg)

Greece Enters Twilight Zone as Visions of Euro Exit Take Shape

With Greek officials hinting they could be forced from the euro and the country’s creditors growing frustrated with the government’s foot-dragging, analysts are asking what might happen if talks break down.German officials are “taking just about everything into consideration,” Finance Minister Wolfgang Schaeuble said in an interview this week as he urged Greek leader Alexis Tsipras to stop offering his people false hopes. Economists such as UniCredit Bank AG’s Erik Nielsen say it may be just a matter of time before Tsipras’s cash supplies run out and he’s forced to print a new currency.Adopting the euro was always supposed to be a one-way ticket, so there is no legal precedent or political roadmap for an exit. If you’re waiting for a formal announcement of a clear resolution, you may be waiting a long time.Next steps for Greece range from retaining the euro to catastrophic divorce; half-measures like having multiple currencies circulate, with aid recycled to repay foreign-currency debts, are also in the cards.Equally unclear is who would tell the world — and how — that Greece has entered an economic afterlife. Possible messengers include Tsipras, the European Central Bank, European Union President Donald Tusk and European Commission President Jean-Claude Juncker, among others.The following are potential scenarios, based on interviews with economists, investors and former policy makers:

SCENARIO A — GREXIT AVOIDED

Tsipras, whose Syriza party won January elections promising to undo the tough terms of the bailout loans, capitulates to creditor demands. His brinkmanship drained cash reserves and crippled Greek banks.

Faced with a choice between expulsion from the euro area or implementing austerity in exchange for loans, Tsipras takes the cash. The ECB maintains its support of the financial system.

While aid flows, the government’s days are numbered as his most hardline supporters mutiny. A new coalition is formed and backing from pro-European opposition parties keeps Tsipras in office — or elections are called.

Greece’s membership of the euro is ultimately secured as new loans are used to repay the ECB and the International Monetary Fund and the country’s coffers are replenished. Greece gets easier repayment terms on bailout loans and more lenient conditions to tame the popular backlash.

SCENARIO B — HOTEL CALIFORNIA

Greek Finance Minister Yanis Varoufakis has said membership in the euro zone is a bit like the lyric from the 1976 Eagles song: “You can check out any time you like, but you can never leave.”

This chain of events might follow if Tsipras fails to strike a compromise acceptable to stakeholders ranging from the German government to Communist factions of his Syriza party.

Bailout loans, Greece’s only source of funding, remain stalled. With Europe’s political leaders unwilling to proceed, the ECB rations Emergency Liquidity Assistance, the lifeline keeping Greek banks afloat.

That requires the imposition of capital controls — as there isn’t enough cash to meet demand — and probably a bank holiday.

We’re calling the two possible outcomes from here “somersault” and “check out.”

SCENARIO B1: SOMERSAULT

The dramatic consequences of capital controls — limits on withdrawals and transfers — force Tsipras to compromise. Opinion polls show that most Greeks — between two-thirds and three-quarters of the population — want to stay in the euro area “at any cost.”

Tsipras forges a new coalition with opposition lawmakers of pro-European parties. A referendum, carried out amid capital controls and with banks shut, gives him a mandate to reverse course. A unity government is formed and Greece remains in the euro but not before the disruption triggers a new recession.

SCENARIO B2: CHECKING OUT

With banks shut, the political situation deteriorates and a popular uprising intensifies, with Germany targeted as the country’s main antagonist. Polls show a swing in favor of breaking from the euro area.

Capital controls give the government the space and time to print either a new currency or IOUs for domestic payments. The new scrip quickly plunges, reflecting the weak fundamentals of an economy that has shrunk by about a quarter since 2008.

Euro-area governments give Greece a “sweetener,” a loan in hard currency. The rationale is to avert total economic collapse, which would create a failed state in a strategically critical region.

Greece’s debt to public entities is restructured, providing for the repayment of loans to the IMF, either through the euro area’s crisis fund or from the departure credit. Greece remains shut out of debt markets.

Most Greek companies and banks default. Some bank deposits are seized to recapitalize a shattered financial system. The sovereign debt restructuring of 2012 has already ensured that the state won’t have to pay principal on most of its existing loans to private investors and the euro area for the next few years and until the economy stabilizes.

The new paper and the euro both circulate. Greece hasn’t officially left the euro zone — the door is open to a return in good standing — though the country sputters in a financial purgatory.

SCENARIO C — ‘C’ FOR CATASTROPHE

Greece separates from the euro area in a messy default, amid demonstrations, deepening misery for most and the government blaming everything on the Germans.

No help is provided to support a new currency and to keep servicing bonds and IMF debt. That triggers cross-default clauses to all creditors. The government and banks collapse, meaning that years will be needed before a new structure emerges.

Greece’s economy plunges into a second depression. The blow from the biggest default in the history of capitalism drives Europe back into a recession and heaps pressure on vulnerable euro countries such as Italy.

Bad blood leads to Greece’s departure from the European Union. The idea that the euro is irreversible is thrown into question, rattling global markets.

The economic implosion paves the way for extremists, from either the left or the far right, to take power. Those who can, flee the country.

The tumult casts doubt on Greek membership in NATO. A new – – and unstable — government turns to Russia for support, providing a Mediterranean outpost for Vladimir Putin.

 

end

 

This morning.Sparks flying all over the place as European banks are trying to distance themselves from the Greek contagion:

 

(courtesy zero hedge)

Greek Bank “Quarantine” Abroad Sparks European Selloff

 

A large number of European countries have effectively quarantined Greece in a bid to minimize the consequences on their credit systems in case of a Greek “accident.” As ekathimerini reports, the actions are being taken in order to shield themselves and minimize the danger of contagion in case the negotiations between the Greek government and the eurozone do not bear fruit. This has sparked broad-based selling across global risk assets but particularly in Europe. Stocks from Germany to Spain are having their worst day of the year, European sovereign bond risk is exploding higher (contagion Mr. Schaeuble?), and Greek bank bonds and stocks are getting crushed.

European stocks plunged…

and sovereign boind risk has contagiously exploded!!

After news broke (as ekathemerini reports) that neighboring countries have effectively quarantined Greece in a bid to minimize the consequences on their credit systems in case of a Greek “accident.”

Kathimerini understands that the central banks of Albania, Bulgaria, Cyprus, Romania, Serbia, Turkey and the Former Yugoslav Republic of Macedonia have all forced the subsidiaries of Greek banks operating in those countries to bring their exposure to Greek risk (bonds, treasury bills, deposits to Greek banks, loans etc.) down to zero in order to shield themselves and minimize the danger of contagion in case the negotiations between the Greek government and the eurozone do not bear fruit.

This quarantine was deemed necessary after the aggressive rhetoric of the new Greek government – particularly in the first few weeks after the election – regarding a debt restructuring, the non-completion of the creditors’ assessment and so on.

Special care was taken for the subsidiaries of Greek lenders, which have a major presence in neighboring states, to make sure that they would not proceed to new positions in Greek bonds, T-bills, deposits in Greek banks or interbank funding. The Greek government recently put press pressure on banks to think how they could get around the European Central Bank’s ban on the acquisition of more T-bills.

Another concern for local bank groups is the threat of a reduction in the Greek element of their subsidiaries in neighboring countries in case of turmoil in Greece. Don’t forget that the Cypriot-owned bank branches in Greece changed hands virtually overnight in March 2013 during the Cyprus bank bail-in process.

*  *  *

Greek banks are getting crushed as their bonds hit new lows…

Just under a year ago, everyone was calling Greece fixed… the miracle of Europe… crisis over…

Charts: Bloomberg

end
Your big commentary for today.  Raul Meijer predicts that the GREXIT date is May 9 and I believe he is right. I have highlighted the key sections for you!
(courtesy Meijer)
Is May 9 The Grexit Date?

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

Yes, more Greece, ever more Greece. Well, the focus is still very much there. It’s not the only topic, obviously, China warrants interest too, certainly with things like Tyler Durden quoting Cornerstone Macro as saying China’s true economic growth rate was just 1.6% in Q1 2015, not the official government number of 7%. Never trust anyone, especially a government, that consistently meets or beats its predictions. With housing prices falling the way they have, -6% or thereabouts, and over 70% of Chinese private investment in real estate, it’s hard to see how a 7% GDP growth number could pass scrutiny. Sure, there’s the stock market bubble, but even then.

But for now back to Athens. Or Washington, actually, where Yanis Varoufakis finds himself. From what we can gather on his schedule, Varoufakis has (or has had) meetings with Obama and Lagarde on Thursday, and with Mario Draghi, Jack Lew and Wolfgang Schaeuble on Friday.

Also on Friday, he’s meeting sovereign debt lawyer Lee Buchheit, who’s a partner at New York law firm Cleary Gottlieb [..Steen & Hamilton], and has helped restructure debt for various countries. The Guardian, back in 2013 (how times have changed!), portrayed Buchheit as the ‘fairy godmother to finance ministers in distress’:

This is the man who stands up to the vulture funds – so named because they buy up the debt of desperately poor countries in order to chase them through the courts for repayment. So it is something of a surprise to meet a slight, mild-mannered lawyer, with more than a whiff of academia about him.

 

He insists he does not make a moral judgement in choosing who he acts for, but rather enjoys working for the debtor nations. “It’s just more fun,” he says. “If you represent the lender, your client is tiresomely saying things to you like, ‘Why don’t they just pay us the money back?’ When you’re on the debtor side, you can say, ‘If you want to get it back, why did you give it to us?’

In view of that last quote, it may be wise to once again reiterate that only about 8% of the bailout funds Athens is now on the hook for, actually went to Greece; the other 92% was used to save major European and American banks. As I said before, this has been a political decision, not an economic one. In that vein , we can take a look at the following from John Ward at the Slog, dated March 26:

At this link is an official EU release whose sole concern is the subject of ‘contingent liabilities’ entered into by EU member states. [..] the EU release in this instance contains some blockbuster facts….and adds another piece to the eurozone jigsaw of hypocritical mendacity. Contingent liabilities are often referred to as Shadow Debt: if you’re lucky, they won’t become an eventuality. But as the EU table shows, given the parlous nature of the ezone banking sector, every one of the liabilities is a racing certainty.

 

We’ve all been asking why Germany ignored the EC bailin directive last week and bailed out a small Bavarian Bank. The answer is simple: not to do so would’ve been illegal under BundesRepublik law, because Berlin had promised so to do. On this basis, while at first sight German national debt is a ‘mere’ 70% of GDP, add the promises it has made to its banks, and the number comes in at a horrific 222%. Not far behind comes the Netherlands with a similar ‘official’ national debt at 73% of GDP. But the contingent liabilities are 115%…making a pretty nasty mountain of 188%.

 

The Number One and Number Two top contingent liability millstones in the EU are – by miles – Germany and the Netherlands. Now let me see…who are the two chaps working hardest to stop the Greeks and their contagious banks from going their own way? Why, none other than German finance minister Wolfgang Schäuble, and Dutch finance minister Jeroen René Victor Anton Dijsselbloem. The third prong of Troika2 is of course the ECB’s Italian Mario Draghi. Without any contingencies at all, Italy’s national debt is 132.6% of GDP. Add its 45.5% of contingents, and this too adds up to 178.1% of GDP.

Before you know it, things are no longer what they seem. If you were Lee Buchheit, you might want to argue that Greece is being thrown to the lions and the wolves because Germany and Holland bailed out their bankrupt banking systems, and vowed to keep doing it.

That would make it very hard to imagine them saving Greece today, since to do that, they would risk their own banks, which they bailed out with trillions of their own taxpayers’ money. It would be political suicide. It’s much easier to tell those taxpayers that it’s Greece that’s at fault, not their own heroic leaders (I say heroic because that’s how Bernanke portrays himself in his ‘Courage to Act’ fictional fluff).

So when, oh when, could the Grexit come? Daniel Roberts at Raas Consulting thinks he might have part of the answer:

Why The Grexit Is Inevitable – and some singing PIGS

One thing in common for almost all of my Pinewood International Schools (TiHi to some) class of ’78 is that we left. Many still live in Greece and in Thessaloniki or have returned, and they are closest to the pain. The real pain of the past decade, that has destroyed wealth and hope. Unemployment is running at levels not see in Europe since after the war, and at levels that encouraged the socialist-fascist civil wars of the 1930s. Those did not end well.

 

But that does not explain why the Grexit is inevitable, and why it will happen very soon.

 

1) This is what the Greek people voted for. No, they did not vote to stay in the Euro, they voted for the party that said it would reduce the debt and meet pension obligations. The Greek people and voters are not stupid. They knew this could only happen by either the rest of Europe bailing out Greece again, or by leaving the Euro.

 

2) The Greek people know perfectly well that Europe is not going to bail them out, because to do so will only set everyone up for the next bailout.

 

3) The Greek people, and the rest of Europe, know full well that the debt will never be repaid, and that the Troika are now acting as nothing better than the enforcers of loan sharks.

 

4) Syriza knows that it had six months before the voters would throw them out, and once out, Syriza would never come back.

 

5) The Greeks needed to show “good faith” in actually attempting to negotiate a resolution with the Troika. This has now been done, and is failing.

 

6) The demand for reparations from Germany is designed not to actually extract the reparations, but to anger the Germans to the point that they will block any compromise that Syriza would have been required to accept.

 

The Greek government, elected by a battered and exploited Greek people, has been establishing the conditions that will give them the moral high ground (in the eyes of their voters) needed to actually leave the Euro. Having set the conditions, when will it happen? I’m still guessing May 9th. Why? Greece will leave the Euro, and they will do it sooner than later. They’ve made the April payment, but simply do not have the money for the May or June payments, and they cannot pass the legislation required by Europe and the Germans and stay in power. That gives us a late May or June date. So why earlier?

 

Capital flight. Imposing currency controls will be a fundamental element of any Grexit. Accounts will be frozen, and any money in accounts will be re-denominated in New Drachmas. Once the bank accounts are unfrozen, the residual, former Euros will now be worth whatever the New Drachma has dropped to, and the drop will be significant, over–correcting to the downside. Once it is accepted that the Grexit is coming and there will be no last minute deal, and with memories of Cyprus too fresh in every Greek’s mind, the money will flow out of the country. Not just corporate money (most of which is probably off-share already) but any remaining personal money in bank accounts. So Greece has to move before the coming Grexit is perceived as inevitable, and the money starts to flow out.

 

Weekend event. When the Grexit happens, it will be on a weekend. The banks will be closed, parliament will be called into emergency session, and a packet of laws will be passed. As this needs to be on a Saturday to avoid wholesale capital flight the moment that parliament is called into session, were it a weekday. This leaves only a few possible dates. And where there are few possible dates, I’m punting on the earlier date, so earlier in May. And looking at the calendar, that leaves us with May 2nd, 9th or 16th. My own guess is that the 2nd is too soon, and the 16th is too late. That leaves me guessing May 9th.

The top graph on the left side of my essay shows all Greek payments due until September. It comes down to about €13 billion in the next 5 months. The country is desperately waiting for a last €7.2 billion bailout tranche the lenders won’t pay out, but it wouldn’t even make that much difference. So when will the drama come to an end? Turning to the second graph, we see specifics. The next payments are:

• April 17 and 20: a combined total of €273.5 million in interest payments to the ECB.

• May 1: €195.1 million to the IMF.

• May 12: €744.9 million to the IMF.

It’s hard to see how Greece can even attempt to make that last payment. Let alone the €1.61 billion due in June (numbers on both graphs don’t add up exactly), or the billions after that.

The big questions concern not just the difference between on the one hand, economic issues and on the other, political ones. Syriza doesn’t have the mandate to take Greece out of the eurozone. That is a huge point. But neither does it have the mandate to give in to the troika’s insistence on pensions cuts. At a certain moment, it may come down to what can be explained to the Greek people, and how well it can be explained. This explanation will almost certainly have to come after the fact, since holding a referendum pre-Grexit would carry far too much potential risk of uncontrolled demolition of the entire Greek economy and banking system.

Tsipras and Varoufakis are not the most enviable people out there at the moment. They have hard choices to make. Still, in the end, running a society, a nation, or a union of nations, cannot be just a matter of balancing your books. That can never be your bottom line. You’re talking about real people, not mere entries in a ledger. Schaeuble and other European politicians keep bragging about the ‘success’ of Greek government policies before Syriza came to power, even as it’s been well documented that many Greek children go hungry and people have no access to health care. How is that a success?

That attitude may be the most valuable argument Syriza has available to it in its upcoming discussions with its voters. Whether these discussions take place before or after a Grexit is hard to say at this point. But Daniel Roberts’ reasoning towards a May 9 event certainly has some logic to it. We may still hope that the troika doesn’t put Syriza into a position of an impossible fork in the road, but right now it doesn’t look good, it looks like they’re getting ready to sacrifice Greece on their pagan altars.

To top off the cynicism involved Bloomberg runs an article today entitled Germany: Has Any Country Ever Had It So Good?. At the same time, a few hundred miles to the south east, children don’t have enough to eat. The European Union sure is a great place to be. What a success story! Pity it’s about to end.

end
I am quite sure that Dave is absolutely correct in his calculations that major derivative busts have occurred due to the deteriorating conditions inside Greece, the massive losses in the oil field, and the huge losses in the yen carry  trade, the huge losses from the short dollar positions etc.
a must read…
(courtesy Dave Kranzler/IRD)

Is The Global Financial System On The Brink Of Collapse?

A reverse repurchase agreement, also called a “reverse repo” or “RRP,” is an open market operation in which the Desk sells a security to an eligible RRP counterparty with an agreement to repurchase that same security at a specified price at a specific time in the future.  LINKIMF tells regulators to brace for global ‘liquidity shock’ LINK.

The financial news spin-doctors are attributing today’s abrupt sell-off to a report of a Bloomberg terminal outage and to a report that China has expanded its list of stocks available for shorting.   This explanation for the plunge in stocks globally is so absurd it almost leaves me speechless.

I have been postulating since mid-December that the strange volatility we’ve been experiencing in the markets – combined with the most intensive effort I’ve ever seen by the Plunge Protection Team (the Fed + the Treasury’s Working Group on Financial Markets) to prop up the stock market and keep a manipulative cap on gold – is occurring because there’s is a massive derivatives melt-down going on behind the scenes.  The volatility reflects the turmoil and the market intervention in stocks and precious metals reflects the effort to keep the problem covered up.

But a good friend and colleague showed me graph this morning that shows my thinking about a derivatives collapse may be correct – click to enlarge:

RRP

That graph shows the Fed’s Reverse Repurchase Agreement operations with foreign Central Banks and big foreign banks.   A reverse repo is an operation which generally is thought of as being used as a tool to remove short term liquidity from the banking system.  However, as you can see from the timing of the first massive spike up, which occurred in early September 2008, it is an absurd notion to think the Fed would have removed liquidity from the system. (Note:  the second spike up in 2011 coincided with the Fed’s “Operation Twist” which was essentially a huge QE extension disguised with a “twist” – but nonetheless was done to keep the system from collapsing).

No, instead the massive operation was conducted to INJECT Treasury collateral into the global banking system.  Treasuries are used as collateral against derivatives positions.  It’s in a sense margin collateral for the big boys.   When an entity (typically a bank or hedge fund) takes on a derivatives bet, it needs to post collateral to protect the counterparty from a decline in the value of the bet.  Treasuries are the de rigeur collateral, although the ECB now allows everything for collateral except loans to lemonade stands.

When the value of the derivatives bet declines because the value of the underlying asset declines (think:  Greek debt, oil debt), more collateral has to posted.  Eventually, the market runs out of collateral and there’s a collateral short squeeze.  The use of hypothecation exacerbates the situation by several multiples.  Please note that Zerohedge intermittently reports big spikes up in Treasury settlement fails.  This reflects the extreme shortage of collateral.  When collateral has been posted but not hypothecated, it can be called and used for settlement.  When that Treasury has been hypothecated by the custodian of the collateral, it becomes harder to call, especially when it’s been hypothecated several times.  Big spikes up in settlement fails occur.

Circling back to my postulation that a massive, ongoing derivatives melt-down has started, as the derivatives lose value, more Treasury collateral has to be posted.  When the situation becomes extreme, collateral isn’t posted and counterparties begin to fail, especially if the counterparty can’t come up with the cash needed to remedy a derivatives bet gone bad.   My bet is that the Greece situation ignited the problem and the collapse in the price of oil threw millions of gallons of napalm on the situation.

The reason I believe this explanation is correct, is from the graph above.   We know that in 2008 we were told that a big derivatives accident started in Europe and spread to the U.S.  Lehman filed for Chap 11 on Sept 11, 2008.    We also know that AIG and Goldman experienced a massive counterparty default collapse in September 2008 that was remedied thanks to rather explicit lies circulated by Ben Bernanke and Henry Paulson about systemic collapse if TARP wasn’t approved.

A reverse repo can be looked at as tool to remove liquidity from the system OR as a tool to inject Treasury collateral into the system.  We know the Fed has been “testing” a new Reverse Repo system since mid-2013 that take Treasuries from its “SOMA” holdings (SOMA = the Treasuries the Fed purchased with QE) and use them for reverse repos, including reverse repos with MONEY MARKET FUNDS and foreign central banks/ Too Big To Fail banks.  Nothing happens by accident and that spike above shows us why the Fed was “testing” a new reverse repo system.

The only reason the Fed would need to inject massive amounts of Treasuries into the global banking system is because there’s an extreme shortage.  A massive derivatives accident requiring massive amounts of collateral to be posted has developed.  If Treasuries are not available to post as collateral, while at the same time a massive amount of hypothecated (Treasuries out on loan, several times over) collateral fails are occurring, it will cause the banking system to seize up.  The giant spike up shown in the graph above is occurring because the Fed is engaging in an enormous reverse repo operation in order to prevent the global financial system from collapsing.

Remember I suggested some time ago that the elitists like give us a warning before something bad is about to happen.   As my colleague John Titus states:  “the true elite aristocracy are polite criminals – they consider it gauche to flush the toilet while we’re in the shower without giving us a heads up.”

This is why the IMF issued this warning yesterday for the financial media to publish:

The so-called ‘flash crash’ on US bond markets last October and the collapse of the Swiss currency floor in January showed how quickly liquidity can vanish, acting as “a powerful amplifier of financial stability risks.”   LINK:   IMF tells regulators to brace for global ‘liquidity shock’

THIS is why stock markets globally are selling off hard today.   The S&P 500 is now down over 1%.  Typically the Plunge Protection Team has been able to prop it up by noon EST when it falls at the open.  So far today the sell-off has accelerated.

I guarantee that the reason for this  is unequivocally NOT because the Chinese Government is letting the public short a few more stock issues OR because Bloomberg experienced a widespread terminal outage.   But it does go a long way to explaining THIS:  LINK

Oil related stories:

US Rig Count Drops For Record 19th Week In A Row

Rig counts fell for a record 19th week in a row. Total rigs dropped 34 to 954 and oil rigs dropped 26 to 374. This means the total rig count drop is now greater than 50% –the fastest drop since 1986.

Crude prices had slid into the rig count announcement and popped afterwards.

This is a record 19th week of consecutive rig count declines…

Leaving the total rig count decline now over 50% – the most since 1986…

Charts: Bloomberg

end

 

Your more important currency crosses early Friday morning:

 

Euro/USA 1.0811 up .0052

USA/JAPAN YEN 118.69 down .367

GBP/USA 1.5020 up .0096

USA/CAN 1.2160 down .0042

This morning in Europe, the Euro rose  again by 52 basis points, trading now well above the 1.08  level at 1.0811; Europe is still reacting to deflation, announcements of massive stimulation, a proxy middle east war, crumbling bourses 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 37 basis points and trading well below the 120 level to 118.69 yen to the dollar.

The pound was up this morning as it now trades just above the 1.50 level at 1.5024  (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 well up by 42 basis points at 1.2160 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). Swiss franc is now 1.0280 to the Euro, trading well above the floor 1.05.  This will continue to create havoc with the 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: Friday morning : down by 232.89  points or 1.17%

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

2/ Asian bourses mostly in the red … 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) red/India’s Sensex in the red/

Gold very early morning trading: $1204.50

silver:$16.42

 

Early Friday morning USA 10 year bond yield: 1.85% !!!  down 4  in basis points from Thursday night/

USA dollar index early Friday morning: 97.25 down 45 cents from Thursday’s close. (Resistance will be at a DXY of 100)

 

This ends the early morning numbers, Friday morning

 

And now for your closing numbers for Friday:

 

Closing Portuguese 10 year bond yield: 2.02% up 13 in basis points from Thursday  (Contagion hits Portugal)

 

Closing Japanese 10 year bond yield: .31% !!! down 2 in basis points from Thursday

 

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

Spanish 10 year bond yield: 1.45% !!!!!!  (contagion hits Spain)

Your Friday closing Italian 10 year bond yield: 1.48% up 10 in basis points from Thursday: (contagion hits Italy)

 

trading 3 basis points above Spain.

 

IMPORTANT CURRENCY CLOSES FOR TODAY

 

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

Euro/USA: 1.0801 up .0043  ( Euro up 43 basis points)

USA/Japan: 118.75 down .307  ( yen up 31 basis points)

Great Britain/USA: 1.4946 up .0022   (Pound up 22 basis points)

USA/Canada: 1.2224 up .0021 (Can dollar up 21 basis points)

The euro rose again stopping any further losses as the uSA dollar was whacked from all sides again today.  It settled up 43 basis points to 1.0801. The yen was up 31 basis points points and closing well below the 119 cross at 118.75. The British pound gained considerable  ground today, 22 basis points, closing at 1.4946. The Canadian dollar lost some ground to the USA dollar, down 21 basis points closing at 1.2224.

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: 1.87% par in basis points from Thursday

 

Your closing USA dollar index:

97.45 down 10 cents on the day.

 

European and Dow Jones stock index closes:

 

England FTSE down 65.82 or 0.93%

Paris CAC down 81.23 or 1.55%

German Dax down 310.16 or 2.58%

Spain’s Ibex down 252.30 or 2.17%

Italian FTSE-MIB down 566.73 or 2.40%

 

The Dow: down 279.47 or 1.54%

Nasdaq; down 75.97 or 1.52%

 

OIL: WTI 56.10 !!!!!!!

Brent: 63.72!!!!

 

Closing USA/Russian rouble cross: 52.03 down   2 1/4 rouble per dollar

 

 

end

And now your important USA stories:

 

NYSE trading for today.

 

China’s Bursting Bubble + Grexit Trouble = Dow Rubble

Straw … meet camel’s back…

Before we start, it is perhaps worth noting that the US equity market is now the worst performing asset YTD (beaten by gold, credit, bonds, and oil)…

Year-to-Date, Trannies are ugly, The Dow just went red then was liofted to close pefectly unchanged YTD, and the S&P is up less than 1%…

Dow 17823 was what mattered – MUST KEEP GREEN STOCKS YTD DREAM ALIVE…

Big down day in stocks started with Chinese regulators cracking down, continued through Europe with BBG down, pushed further on Grexit fears, then legged lower on DoJ anti-trust news…

On the day, Nasdaq came under pressure from AAPL weakness and Trannies outperformed  (Dow lost 18,000; S&P lost 2,100; Nasdaq lost 5,000) and all that with a handful of hopeful Greek headlines which typiucally would have sent algos rushing higher…

On the week… everytthing ended clumped together around 1-1.5% lower….

Futures volume was huge compared to recent averages…

How many more times are stocks going to pump’n’dump back to bond reality?

Another whipsaw day in bond yields and another down day for yields ending the week 6-11bps lower (with the long-end outperforming today)… Everey bond selloff is met by buying…

The dollar slipped once again – the first 4 day losing streak in a year (since April 10 2014) – the streak of buying and selling swings intraday continues also…

This is the 2nd worst week for the USD since October 2011

Despite the USD weakness, gold and silver lost ground on the week (Gold held $1205) but copper popped and crude soared…

WTI Crude had its biggest week since Feb 2011 surgiung 8.75% to close above $56 for the first time in 2015…

Charts: Bloomberg

Bonus Chart: US Macro data has printed a new low this week…

end
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2 comments

  1. john mcmullan · · Reply

    Harvey you are one of the hardest workers in America,thank you for your service.

    Like

  2. Harvey can you go back on youtube USA watchdog and explain why Silver and Gold are still struggling to break free from the cartel ? Its been several months since your last prediction, can you please update us.
    Thanks,

    Like

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