April 23/Sprott to take over Central Fund of Canada’s gold fund and Bullion Fund/zero hedge provides additional evidence of spoofing and layering to the CFTC/Deutsche bank fined 2.5 billion euros for Libor infractions/

Good evening Ladies and Gentlemen:




Here are the following closes for gold and silver today:


Gold:  $1194.40 up $7.50 (comex closing time)

Silver: $15.82 up 3 cents (comex closing time)


In the access market 5:15 pm

Gold $1194.10

Silver: $15.89



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 had a poor delivery day, registering 0 notices served for nil oz.  Silver comex filed with 1 notices for 5,000  oz .


Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 246.107 tonnes for a loss of 57 tonnes over that period. Lately the removals have been rising!




In silver, the open interest rose by another 1615 contracts despite the fact that Tuesday’s silver price was down by 21 cents. The total silver OI continues to remain extremely high with today’s reading at 184,278 contracts rising to multi-year record highs. The front April month has an OI of 23 contracts for a loss of 150 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 1 notice served upon for 5,000 oz.



In gold,  the total comex gold OI rests tonight at 406,540 for a gain of 8161 contracts despite the fact that gold was down by $16.00 yesterday. We had 0 notices served upon for nil oz.



Today, we had no changes in  gold inventory at the GLD/  Gold Inventory rests at 742.35  tonnes


Looks to me like London is out of gold.


In silver, /  /we had no changes in silver inventory at the SLV/ and thus the inventory tonight is 326.334 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 another huge 1,615, contracts despite the fall in price on Wednesday (21 cents). Not only that but the OI for the front month of May fell by only 5,751 contracts as we have only 5 trading days left before first day notice.  The OI for gold rose by 8,161 contracts up to 406,540 contracts despite the fact that the price of gold fell by $16.00 on Wednesday. No changes in GLD or SLV inventories

(report Harvey)


2,One important commentary on Greece

i) The term Grexit may be replaced with the term:  Grimbo or “Greece in Limbo”.  Citibank lays out two important scenarios that may develop


(Citibank, zero hedge)


3. On Tuesday we reported on the arrest of a single trader who acted alone on that famous flash crash in May of 2010.  This trader resides in England.  Yesterday the farce continues as the trader will fight the extradition as he cites that many others are doing the same thing. Zero hedge writes his promised open letter to the CFTC on how spoofing and layering are manipulating the prices of commodities and stocks. He will document these illegal activities on a daily basis to the CFTC.

(zero hedge)

4. Ambrose Evans Pritchard states today that the USA oil shale boys are not done yet as their costs are lowering.  Saudi Arabia has its floor to the pedal increasing production trying to knock out their most important competition

UKTelegraph/Ambrose Evans Pritchard

5.  Bill Holter offers a great commentary on the negative Euribor and its meaning for us:

(Bill Holter)



6.  Sprott ready to purchase the Central Fund of Canada’s gold trust and the silver Bullion trust.


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 8161 contracts from  397,379 contracts up to 406,540 with gold down by $16.00 yesterday (at the comex close). We are now in the active delivery month of April and here the OI fell by 54 contracts down to 471. We had 54 contracts filed upon on  Wednesday so we neither lost nor gained any gold ounces  that will stand for delivery in April. The next non active delivery month is May and here the OI fell by 13 contracts up to 441.  The next big active delivery contract month is June and here the OI rose by 5080 contracts up to 266,726. June is the second biggest delivery month on the comex gold calendar. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 62,599. The confirmed volume yesterday ( which includes the volume during regular business hours + access market sales the previous day) was poor at 165,338 contracts. Today we had 0 notices filed for nil oz.

And now for the wild silver comex results.  Silver OI rose by another 1,615 contracts from 182,633 up to 184,278 despite the price of  silver was down by 21 cents, with respect to Wednesday’s trading.  Somebody big is willing to take on JPMorgan.  We are now in the non active delivery month of April and here the OI fell by 150 contracts down to 23.  We had 150 notices filed yesterday so we neither gained  nor lost any silver contracts standing  in this delivery month of April. The next big active delivery month is May and here the OI fell by only 5751 contracts down to 57,718.  We have 1 week before first day notice on Thursday, April 30.2015. The estimated volume today was poor at 28,246 contracts (just comex sales during regular business hours. The confirmed volume yesterday (regular plus access market) came in at 82,215 contracts which is excellent in volume. We had 1 notice filed for 5,000 oz today. The fact that very little silver contracts are leaving the May delivery month arena must scare the living daylights out of our banker friends.



April initial standings

April 23.2015



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 nil
No of oz served (contracts) today 0 contracts (nil oz)
No of oz to be served (notices)  471 contracts(47,100) oz
Total monthly oz gold served (contracts) so far this month 2361 contracts(236,100 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   oz

Total accumulative withdrawal of gold from the Customer inventory this month

  396,283.8 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 0 customer deposits:

total customer deposit: nil oz


We had 0 adjustments:



Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 246.107 tonnes for a loss of 57 tonnes over that period. Lately the removals  have been rising!


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

To calculate the total number of gold ounces standing for the March contract month, we take the total number of notices filed so far for the month (2361) x 100 oz  or  236,100 oz , to which we add the difference between the open interest for the front month of April (471) and the number of notices served upon today (0) x 100 oz equals the number of ounces standing.

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

No of notices served so far (2361) x 100 oz  or ounces + {OI for the front month (471) – the number of  notices served upon today (0) x 100 oz which equal 283,200 oz or 8.808 tonnes of gold.



we neither gained nor lost any gold ounces standing in this delivery month of April.


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) = 7,912,357.942  oz. (246.107) tonnes)






And now for silver


April silver initial standings

April 23 2015:



Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory 53,779.013 oz (Delaware,Scotia)
Deposits to the Dealer Inventory  nil
Deposits to the Customer Inventory 5772.900 oz (Delaware)
No of oz served (contracts) 1 contracts  (5,000 oz)
No of oz to be served (notices) 22 contracts(110,000 oz)
Total monthly oz silver served (contracts) 494 contracts (2,470,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  884,245.2 oz
Total accumulative withdrawal  of silver from the Customer inventory this month  11,176,887.9 oz


Today, we had 0 deposits into the dealer account:

total dealer deposit: nil   oz


we had 0 dealer withdrawal:

total dealer withdrawal: nil oz


We had 1 customer deposits:

i) Into Delaware: 5772.90 oz


total customer deposits: 5772.900  oz


We had 2 customer withdrawals:


i) Out of Scotia; 50,756.45 oz

ii) Out of Delaware; 3,022.863 oz


total withdrawals;  53,779.01 oz


we had 0 adjustments:


Total dealer inventory: 62.635 million oz

Total of all silver inventory (dealer and customer) 175.190 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 (494) x 5,000 oz    = 2,470,000 oz to which we add the difference between the open interest for the front month of April (23) and the number of notices served upon today (1) x 5000 oz equals the number of ounces standing.

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

494 (notices served so far) + { OI for front month of April(23) -number of notices served upon today (1} x 5000 oz =  2,580,000 oz standing for the April contract month.


we neither gained nor lost any silver ounces standing.


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 23. no changes in gold inventory at the GLD/inventory at 742.35 tonnes

April 22. no changes in gold inventory at the GLD/inventory at 742.35 tonnes

April 21.2015: a huge addition of 3.26 tonnes of gold inventory at the GLD/Inventory rests at 742.35 tonnes

April 20.2015: no change in gold inventory at the GLD/Inventory rests at 739.06 tonnes

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 23/2015 /  we had no changes in gold inventory at the GLD/Inventory stands at 742.35 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 : 742.35 tonnes.




And now for silver (SLV):


April 23.no changes in silver inventory at the SLV/326.334 million oz of inventory


 April 22/no changes in silver inventory at the SLV/326.334 million oz of inventory

April 21.2015/we had another huge addition of 1.434 million oz of silver into the SLV

April 20/ no change in silver inventory tonight/SLV 324.900 million oz.

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 23/2015 we had no change in inventory at the SLV / inventory rests at 326.334 million oz





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


Central fund of Canada data not available today/

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 6.3% percent to NAV in usa funds and Negative 6.6% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 61.9%

Percentage of fund in silver:37.60%

cash .5%

( April 23/2015)



Sprott gold fund finally rising in NAV

2. Sprott silver fund (PSLV): Premium to NAV falls to + 1.00%!!!!! NAV (April 23/2015)

3. Sprott gold fund (PHYS): premium to NAV rises to -.32% to NAV(April 23/2015

Note: Sprott silver trust back  into positive territory at +1.00%.

Sprott physical gold trust is back into negative territory at -.32%

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)

Middle East a Powder Keg as Saudi Bombing of Yemen Resumes

– Saudi operation in Yemen enters new phase as U.S. and Iranian Navies gather in the Gulf of Aden
– Saudi’s blame Houthi rebels and Iran for Saudi bombardment of Yemen, supported by US
– Chinese President Xi calls Saudi King Salman urging speedy resolution to crisis, Chinese media take neutral stance
– Russian media describes Saudi operation as ethnic cleansing and Iranian media emphasise that Saudi is operating without a UN mandate to restore their ally, the former President, to power in Yemen

While the US beefs up its navy presence around the Gulf of Aden – apparently in response to Iran dispatching a navy convoy to bring arms to the Yemeni rebels – the Saudi’s operation has entered a new phase.

Following an initial announcement on Wednesday that Saudi Arabia was to end its bombardment of Yemen, it later resumed bombing of rebel positions.   The risk of a ‘proxy’ war remains real.

U.S. Navy officials confirmed to AP that the aircraft carrier USS Theodore Roosevelt is in Yemeni waters to intercept an Iranian weapons shipments. This was then denied and the U.S. said it was there to “keep shipping lanes in the region open” as Iran parked two warships off the Yemeni coast.


The resumption of violence was played down by the Saudi government who insist that any further bombings will be in response to Houthi rebel actions.

Iran’s Press TV reports, “Saudi government spokesman Brigadier General Ahmed al-Assiri, in a broadcast late on Tuesday, announced the termination of the first phase of the Saudi war on Yemen, which was codenamed as the so-called Decisive Storm against Yemen.”

The latest phase of Saudi’s war in Yemen which has resulted in the deaths of more than 1,000 people is being called “Renewal of Hope” according to the New York Times.

NYMEX Light Sweet Crude Oil (WTI)

“Saudi ambassador to the United States, Adel al-Jubeir, said the campaign was shifting to a new phase — one in which Saudi airstrikes would be more limited and come only in response to Houthi attacks, such as the assault against Yemeni troops in Taiz”, reports The New York Times.

The New York Times refers to “Saudi insistence on continuing to wield airstrikes as a cudgel, if necessary, to batter rebel Houthi leaders to the bargaining table”.

It adds, incongruously, that “The Houthis issued a statement declaring that they were ready ‘to resume political dialogue’ under United Nations auspices, but only after ‘a complete end to the aggression against Yemen and the lifting of the blockade.’ ”

The wider regional and global implications of the war remain significant.

If Iran is intent on arming the rebels – a claim which is as yet unsubstantiated – it will be impossible for the West to bring diplomatic pressure to bear on them while Saudi Arabia interferes in the internal affairs of another sovereign nation without any kind of mandate.

The U.S. appears to have lost a degree of control over its main Arabian ally, the New York Times reports.

“‘Once your clients have a quasi-independent military capacity, you lose some control over them,’ said F. Gregory Gause III, a Middle East specialist at Texas A&M University’s Bush School of Government and Public Service.”

The narrow Gulf of Aden is a potential flash-point between the Iranian and U.S. navies. It could also be a flashpoint between the Saudi and Iranian militaries.

Thus far the Chinese media have shown no clear support for either side. But China is concerned by unfolding events in the Gulf region. President Xi called King Salmon of Saudi Arabia over the weekend, urging for a political solution to the crisis.

Russia Today has described the Saudi’s operation as being about “chaos and violence and genocide” in Yemen. Iran’s Press TV has emphasises the illegal nature of the Saudi’s actions and the the blatant use of violence to restore power to their ally, former President Abd Rabbuh Mansur Hadi, in a sovereign nation.

The new flashpoint comes at a time when ISIS is becoming a new and volatile force in the unstable region. Instability and chaos is a recipe for higher oil prices in the long term.

The Saudi bombing of Yemen is another flash point and will deepen tensions between the U.S., NATO allies and Russia and indeed China. Geopolitical risk remains high and the region remains a powder keg that is likely to explode as has already been seen in Syria and much of North Africa.

Breaking Gold News and ResearchHere


Today’s AM LBMA Gold Price was USD 1,187.75, EUR 1,107.92 and GBP 792.31 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,202.40, EUR 1,113.44 and GBP 799.19 per ounce.

 Gold fell 1.25 percent or $15.00 and closed at $1,186.80 an ounce yesterday, while silver slipped 1.37 percent or $0.22 closing at $15.79 an ounce.


Strong U.S. housing data sent spot gold in Singapore below the $1,200 an ounce level in its largest drop in a month. U.S. home resales surged to its highest figure in 18 months. There has been six consecutive months of home sale increases. This data may prompt investors to revisit the possibility of a June Fed interest rate hike.

The U.S. FOMC has a policy meeting next week April 28-29th. The dollar also strengthened which weighed on the yellow metal. A large bullion price drop often triggers technical selling.

The Greek debt crisis still looms over the precious metals market and supports safe haven bids for bullion.

In London in late morning trading gold is flat at $1,189.00. Silver is up 0.30 percent at $15.88. Platinum is down 0.35 percent at $1,128.00.




Deutsche bank to pay 2.5 billion USA for Libor manipulation.  I wonder what they are going to pay eventually for the manipulation of gold and silver?

(courtesy Bloomberg/GATA)

Deutsche Bank to pay record $2.5 billion to resolve LIBOR rigging


By Shane Strowmatt and Suzi Ring
Bloomberg News
Thursday, April 23, 2015

Deutsche Bank AG today was ordered to pay a record $2.5 billion fine and fire seven employees to settle U.S. and U.K. investigations into its role in manipulating Libor.

Deutsche Bank must terminate six London employees and one in Frankfurt who engaged in wrongful conduct, the New York Department of Financial Services said in a statement. The DFS didn’t identify them by name and said one is a managing director, four are directors, and two are vice presidents.

“Deutsche Bank employees engaged in a widespread effort to manipulate benchmark interest rates for financial gain,” DFS Superintendent Benjamin Lawsky said in the statement. “We must remember that markets do not just manipulate themselves: It takes deliberate wrongdoing by individuals.” …

… For the remainder of the report:


 Looks like our good friends, Barrick Gold, have more troubles as the Chilean regulators are going to throw additional sanctions on them for non compliance.
I wish them all the luck in the world…they have created so much harm to us:
(courtesy Chris Powell/GATA/Reuters)

Chilean regulator seeks new sanctions against Barrick’s Pascua-Lama


From Reuters
Wednesday, April 22, 2015

Chile’s environmental regulator SMA said on Wednesday it will seek new sanctions against Barrick Gold Corp’s massive Pascua-Lama gold and silver project, complicating the possibility that the suspended mine might resume construction.

The regulator already fined Barrick $16 million in May 2013 for not complying with some of the country’s environmental requirements at Pascua-Lama, which was put on hold indefinitely in October 2013.

Inspections that took place between 2013 and 2015, some of which were scheduled and others triggered by complaints from the local community, had revealed 10 new infractions, the SMA said. …

… For the remainder of the report:





More on the Flash crash arrest :

(courtesy Bloomberg/GATA)

Flash crash arrest lays bare regulatory lapses at all levels — starting with CME Group


By Dave Michaels, Matthew Leising, and Sam Mamudi
Bloomberg News
Wednesday, April 22, 2015

CME Group Inc. concluded within four days of the 2010 flash crash that algorithmic trading on futures exchanges didn’t exacerbate losses in the market.

When Washington regulators did a five-month autopsy in 2010 of the plunge that briefly erased almost $1 trillion from U.S. stock prices, they didn’t even consider whether it was caused by individuals manipulating the market with fake orders.

Their analysis was upended Tuesday with the arrest of Navinder Singh Sarao — a U.K.-based trader accused by U.S. authorities of abusive algorithmic trading dating back to 2009. Even that action was spurred not by regulators’ own analysis but by that of a whistle-blower who studied the crash, according to Shayne Stevenson, a Seattle lawyer representing the person who reported the conduct.

The episode shows fundamental cracks in the way some of the world’s most important markets are regulated, from the exchanges that get to police themselves to government agencies that complain they don’t have adequate resources to do their jobs.

Regulators were aware of Sarao’s trading behavior as early as 2009, when officials at CME — which runs the exchange where Sarao allegedly placed his problematic trades — spotted him placing and then canceling large numbers of orders, and warned him against placing deceitful trades, according to an FBI affidavit. Sarao continued to manipulate markets through March 2014, the FBI said.

“How this continued for six years when the CME appeared to know about, it kind of boggles my mind,” Dave Lauer, president of Kor Group, a lobbying and research firm, said by phone. “This is about as simple and easy as you can get, and it took them this long to do anything about it.” …

… For the remainder of the report:





Oh this is going to be fun:

Sprott makes an offer for Central Trust gold fund and Bullion fund:

(courtesy GATA/Sprott funds)



Sprott said planning unsolicited bid for Canadian metals trusts


By Scott Deveau
Bloomberg News
Thursday, April 23, 2015

Sprott Asset Management LP is planning to make an unsolicited offer to acquire Central GoldTrust and Silver Bullion Trust valued at $800 million, a person with knowledge of the matter said.

An offer at that level would reflect a 3.5 percent discount to the combined market value of the trusts at the close Wednesday of about $829 million. The proposal could come as early as today, said the person, who asked not to be identified because the information is private.

The trusts, which buy and hold substantially all of their assets in respective metals in bullion and certificates, have been under pressure from investor Polar Securities Inc., the Toronto-based hedge fund. Polar has been urging the trusts to change how unitholders can redeem their investment as a means of closing their trading gaps. …

… For the remainder of the report:





Lawrence Williams of Mineweb talks on the deception on the recording of gold reserves of central banks:


(courtesy Lawrence Williams/Mineweb)

Lawrence Williams: Does any nation hold the gold it says it does?


10:39a ET Thursday, April 23, 2015

Dear Friend of GATA and Gold:

Official central bank gold reserve figures as reported to the International Monetary Fund are at best unreliable and at worst active deceptions concealing market interventions, Mineweb’s Lawrence Williams acknowledges today.

Or as your secretary/treasurer has been putting it: The location and disposition of central bank gold reserves are secrets far more sensitive than the location and disposition of nuclear weapons. For while nuclear weapons are not ever likely to be used, central bank gold and gold derivatives traded by central banks are being used every day to rig markets surreptitiously.

Williams’ commentary is headlined “Does Any Nation Hold the Gold It Says It Does?” and it’s posted at Mineweb here:


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


The exporting of gold from Switzerland’s refiners shows huge buying from Asian buying:


(courtesy Bloomberg)

Swiss gold exports show Asia buying more as investors sell bars


By Eddie van der Walt
Bloomberg News
Thursday, April 23, 2015

China and India helped buy up investors’ biggest gold sales in more than a year.

Gold exports to China from the refining hub of Switzerland almost doubled to 46.4 metric tons in March, the most among monthly data starting in January 2014, according to the Swiss Federal Customs Administration. Shipments to India more than doubled to 72.5 tons as imports from the U.K. climbed sixfold.

That’s an indication that gold bars are leaving U.K. vaults for Switzerland, where they’re refined and sent to Asia. India and China, the biggest buyers, boosted purchases in 2013 when investors dumped the metal amid the biggest price rout in three decades. Global sales from gold-backed funds totaled 55.7 tons in March, the most since 2013, data compiled by Bloomberg show.

“The big investor outflows from the U.K. via Switzerland to China and India are a continuation of the flow of metal from West to East,” Matthew Turner, an analyst at Macquarie Group Ltd., said by phone from London. “Short-term, it is a sign of weakness, not of strength in the market.” …

… For the remainder of the report:




The following will get you thinking!!

(courtesy Bill Holter/Miles Franklin)


Debt is BETTER than cash? …Who’s running this asylum anyway?


Two days ago Reuters reported the 3 month “Euribor” went into negative interest rate territory http://www.reuters.com/article/2015/04/20/us-ecb-repo-idUSKBN0NB1YI20150420 .  In this missive I will try to make sense of this as to “why or how” this could happen.  I do not believe there is an answer other than the madness and insanity of being locked in a “short squeeze” room with the exits being blocked.
   Over the last three years we have seen gold trade many times in backwardation, James Turk has reported this again is occurring in London.  The only explanations for this is that market participants either need gold now for whatever reason and will pay a premium to get it …or, they fear not receiving gold contracted for in the future.  The bottom line is this, for backwardation to occur, the “current” gold must be in short supply for some reason.  I believe this is what we are seeing in Europe, “collateral” is in shortage and a short squeeze has pushed pricing into a Twilight Zone without logic.
  After gold backwardation came the next head scratcher which began last year where various bonds, bank accounts and even mortgages being written with negative interest rates.  How do any of these make sense?  You “pay” the sovereign or even corporate borrower to lend money to them?  Or a bank pays you to borrow money on a house or property?  Think about the incentives here.  Wouldn’t it be better to just take your money out of a bank or broker to avoid the negative interest and just bury it in a hole somewhere?  How about banks lending at negative interest rates for a home, wouldn’t the bank be better off NOT making the loan and instead just sitting on the reserves?  Here is David Stockman’s current take http://davidstockmanscontracorner.com/this-is-nuts-5-3-trillion-of-government-bonds-now-have-negative-yields/?utm_source=wysija&utm_medium=email&utm_campaign=Mailing+List+AM+Tuesday
  A similar situation to this happened years ago in Switzerland (and again currently) where interest rates went negative as people wanted assurance “of” principal rather than “on” principal.  The fear of currency devaluation was so great, capital piled into the “hard currency” francs.  This is NOT what is happening today in Europe, no one is accepting negative yield just to own the euro “for safety” as it has already crashed versus the dollar and more so versus gold.  What I believe has happened is the system has fewer and fewer doors where the exists are being blocked and collateral withdrawn.
  It is only a matter of time before we see depositors burying actual currency notes, they are also converting into precious metals but the paper exchange subsidy still holds, for now?  Not only is the ECB withdrawing collateral via “QE”, individual depositors are purchasing German sovereign debt and withdrawing it from the market.  Take the Greeks for example, they fear their own banks and know they are not safe, they fear depositing in German or other banks because their deposits may be frozen or worse, confiscated.  So what is their option for “safety” in this paper room?  Direct purchases of sovereign debt!
  Now, “interbank” lending has gone into negative interest rates which is beyond lunacy.  Banks which are theoretically run by “smart” people are paying to lend and of course willfully being paid to borrow.  The only explanation I can come up with is that collateral has become so scarce that a short squeeze has resulted.  Any institution that needs collateral is forced to pay the market rate which now includes locking in a guaranteed loss.  Business in Europe has become so poor, no one can, much less wants to borrow anything.  “Debt saturation” is where we came from in 2007-08 and further down the rabbit hole to where we are now, inverted interest rates on ALL levels …now even between “pros”?
  I view what is now happening as “eating into the bone”.  Debt has become so highly priced, locking in guaranteed losses is now seen as “wisdom”.  When viewed in history, the current mania will not be seen as a tribe or nation gone mad, it will be seen as the entire human population losing sight of their senses and allowing the lunatics to run the insane asylum.  I have no idea what the event will be to wake up the world but the event is out there and its realization will be akin to awakening from a nightmare in a cold sweat.
  “Debt is better than money” is becoming the current belief in the world.  In fact, with negative interest rates it can be said the world now values debt greater than money.  This cannot be so because of the simple fact that actual paper notes can be held out of the system and not “discounted”.  How can owning debt today which promises less currency in the future be worth more than more currency today?  The fear of loss is so great that currency itself is being discounted versus debt.  If you think this through, it says “everything is worth nothing” because the currency itself is bad and losing confidence.  Maybe this is why we are seeing a push from all around the world to go “cashless” and fully digitize?  This would be closing and locking the only remaining door other than making precious metals illegal.  The only way for this to be “normal” is if the lunatics are running the asylum …they surely are!Regards,  Bill Holter


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 but Hong Kong down  /Japan bourse higher /yen lowers to 119.99/Shanghai to allow short selling to stop their bubble/China then cuts RRR by 1% and Chinese authorities sooth fears that they want to prick that huge bubble.  On Tuesday a huge electrical company’s bonds default.  This could spell trouble as this company is a subsidiary of a state owned company. This morning lower Chinese PMI manufacturing numbers also spells trouble for the Chinese economy.

(see below)

1b Chinese yuan vs USA dollar/yuan weakens to 6.1977

2 Nikkei up by 53.75  or 0.27%

3. Europe stocks all down/USA dollar index down to 98.02/Euro rises to 1.0740/Lower European PMI manufacturing numbers (see below)

3b Japan 10 year bond yield .31% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.99/

3c Nikkei still  above 20,000

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

3e WTI  56.17  Brent 62.91

3f Gold up/Yen down

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund rises to 16 basis points. German bunds in negative yields from 7 years out.

Except Greece which sees its 2 year rate falls a bit to 26.68%/Greek stocks up .32%/ still expect continual bank runs on Greek banks.

3j  Greek 10 year bond yield:  12.55% (down 100 in basis point in yield)

3k Gold at 1190.00 dollars/silver $15.90

3l USA vs Russian rouble;  (Russian rouble up 1 3/4  rouble/dollar in value) 51.48 , the rouble is still the best acting currency this year!!

3m oil into the 56 dollar handle for WTI and 62 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!! (on Monday they lowered its RRR it is effectively doing QE)

30  SNB (Swiss National Bank) still intervening again in the markets driving down the SF.  It is not working:  USA/SF this morning 96.41 as the Swiss Franc is still rising against most currencies.  Euro vs SF is 1.0382 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 7 year German bund remains in negative territory with the 10 year close to negativity at +.16/no doubt the ECB will have trouble meeting its quota of purchases and thus European QE will be a total failure.

3s Last week the ECB increased the ELA to Greece  by another large 1.5 billion euros.  The new maximum is 75.5 billion euros.  The ELA is used to replace depositors fleeing the Greek banking system.  The bank runs are increasing exponentially. The ECB is contemplating cutting off the ELA which would be a death sentence to Greece and they are as well considering a 50% haircut to all Greek sovereign collateral which will totally wipe out the entire Gr. banking and financial sector.


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

3 u. With the big meeting in Riga this Friday, there is no new developments on Greece to provide new reforms/thus do not expect anything to develop by Friday.  However Greece’s cash is running out.

If the ECB cuts off Greece’s ELA they would have very little money left to function.

4.  USA 10 year treasury bond at 1.95% early this morning. Thirty year rate well below 3% at 2.63%/yield curve flatten/foreshadowing recession.


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



(courtesy zero hedge/Jim Reid Deutsche bank)


Futures Unexpectedly Red Despite Disappointing Economic Data From Around The Globe


Today is shaping up to be a rerun of yesterday where another frenzied Asian session that has seen both the Shanghai Composite and the Nikkei close higher yet again (following the weakest Chinese HSBC mfg PMI in one year which in an upside down world means more easing and thus higher stocks) has for now led to lower US equity futures with the driver, at least in the early session, being a statement by the BOJ’s Kuroda that there’s a “possibility” the Bank of Japan’s 2% inflation target will be delayed and may occur in April 2016.

This official admission of failure (first of many) by the central bank that it won’t be able to reach 2% inflation by its stated year-end goal, clearly reduces expectations of additional easing on April 30, according to Shinkin Asset Management. And in a world without EPS growth (and outright revenue declines) in which every PE multiple expansion turn is driven by some incremental central bank easing (preferably sooner rather than later), less easing is bad for risk, which may explain why US futures are red, if only for now: we fully expect a momentum ignition wave in the USDJPY to promptly push the pair above 120, and take the S&P with it to new all time highs on nothing but correlation algos, either at the usual ramp time of 8:30 am or just before the US market open.One just has to think like a criminal algo.

Meanwhile, “recovering” Europe also fired the first shot across the QE bow, reminding everyone that soaring stock markets have nothing to do with the underlying economies, as Europe’s PMIs disappointed across the board. As Goldman summarizes, the Euro area flash composite PMI fell by 0.5pt to 53.5 in April, below consensus expectations of a modest gain (Cons: 54.4, GS: 54.2). This was the first decline since November. The manufacturing and services subcomponents were both weaker on the month, declining 0.3pt and by 0.5pt respectively. On a national level, composite PMIs for April fell both in Germany (by 1.2pt) and in France (by 1.3pt).

As closer look at Asia reveals that that equities mostly rose with Chinese bourses at the forefront, in the wake of further disappointing Chinese data. Chinese HSBC flash Mfg PMI tumbled to a 12-month low at 49.2 vs. Exp. 49.6, the 4th consecutive month of contraction. Shanghai Comp (+0.4%) and Hang Seng (-0.4%) traded higher for most of the session as the data supports the case for more government easing. Nikkei 225 (+0.3%) extended on its 15yr peak after finishing yesterday’s session above 20,000 for the first time since Apr’00. JGBs fell after prices followed through yesterday’s global fixed income sell-off, although further downside was capped by a poor 40yr auction which attracted the lowest b/c since Aug’14.

Despite opening modestly higher, European equities have been dragged lower following a slew of lacklustre Eurozone PMI data with German and France setting a downbeat tone for the session after missing expectations on manufacturing, services and composite readings. This has also been coupled with underperformance in tech names after Ericsson posted a disappointing pre-market update, ASML paring yesterday’s gains and Texas Instruments in the US posting a disappointing after-market update, while Allianz warned of a potential stock market crash. Additionally, concerns over Greece continue to linger with reports in Handelsblatt suggesting the ECB’s patience has been tested and there are no agreements with Greece on the horizon.

From a fixed income perspective, Bunds have seen a pullback of yesterday’s heavy Gilt-inspired losses, with the move to the upside also provided a boost by the softness seen in European equities.

In FX markets, the USD-index was initially seen higher in earlier trade before being dragged lower to relatively unchanged levels alongside the softness seen in US yields. Elsewhere, AUD remains softer in the wake of the disappointing Chinese HSBC flash manufacturing PMI, with NZD also weaker following dovish rhetoric from RBNZ’s Asst. Gov. McDermott, who said weaker demand and prices would prompt consideration of a rate cut. Finally, UK retail sales weighed on GBP after missing expectations with the ONS saying the 6.2% drop in fuel sales in March was the largest since April 2012.

In the commodity complex, WTI and Brent crude futures have seen a minor extension of yesterday’s DoE-inspired losses with
energy newsflow overall relatively light. In precious metals markets, spot gold and silver trade relatively unchanged, while copper
has pared its overnight losses stemming from the disappointing Chinese data. Elsewhere, iron ore prices rose by the most since
2012 as BHP Billiton is set to curb the pace of its iron ore expansion program.

In summary: European shares remain lower though off intraday lows, with the tech and insurance sectors underperforming and utilities, telco outperforming. Euro-area, French, German, Chinese manufacturing PMI data all below estimates. U.K. retail sales fall vs forecast gain. Greece hasn’t discussed “Plan B” with creditors, official says. The German and Swedish markets are the worst-performing larger bourses, the Swiss the best. The euro is stronger against the dollar. German 10yr bond yields fall; French yields decline. Commodities decline, with zinc, nickel underperforming and silver outperforming. U.S. jobless claims, continuing claims, Markit U.S. manufacturing PMI, Bloomberg consumer comfort, Kansas City Fed index, new home sales due later.

Market Wrap

  • S&P 500 futures down 0.3% to 2093.8
  • Stoxx 600 down 0.6% to 406.6
  • US 10Yr yield down 3bps to 1.95%
  • German 10Yr yield down 3bps to 0.14%
  • MSCI Asia Pacific up 0.1% to 154.9
  • Gold spot up 0.2% to $1189.9/oz
  • Eurostoxx 50 -0.5%, FTSE 100 +0.1%, CAC 40 -0.8%, DAX -1.1%, IBEX -0.3%, FTSEMIB -0.6%, SMI +0.2%
  • Asian stocks rise with the Kospi outperforming and the Sensex underperforming.
  • MSCI Asia Pacific up 0.1% to 154.9; Nikkei 225 up 0.3%, Hang Seng down 0.4%, Kospi up 1.4%, Shanghai Composite up 0.4%, ASX up 0.1%, Sensex down 0.6%
  • Euro up 0.18% to $1.0744
  • Dollar Index up 0.01% to 97.94
  • Italian 10Yr yield up 0bps to 1.4%
  • Spanish 10Yr yield down 0bps to 1.37%
  • French 10Yr yield down 3bps to 0.38%
  • S&P GSCI Index down 0.2% to 425.8
  • Brent Futures down 0% to $62.7/bbl, WTI Futures down 0.2% to $56/bbl
  • LME 3m Copper down 0.1% to $5906.5/MT
  • LME 3m Nickel down 0.7% to $12585/MT
  • Wheat futures up 0.5% to 501.3 USd/bu

Bulletin headline summary from Bloomberg and RanSquawk


  • European stocks are seen lower after Eurozone PMIs paint a dreary picture of the area’s economy
  • Furthermore, Greece continues to remain a key issue ahead of tomorrow’s Eurozone finance minister meeting, while the ECB are said to be getting frustrated with the lack of Greek progress
  • Looking ahead, today sees the release of US Initial Jobless Claims, New Home Sales, EIA NatGas storage change as well as a host of large cap US earnings with 50 S&P 500 Co.’s due to report
  • Treasuries gain with bunds and gilts as manufacturing reports showed slowing growth in China and Europe; approach of month-end could provide support before FOMC and 2Y/5Y/7Y auctions next week.
  • Greece and its creditors haven’t discussed having the country miss a payment to the IMF or default as agreement over bailout disbursements remains beyond reach, a senior Greek government official said
  • Markit/HSBC’s China manufacturing PMI fell to a 12-month low in April, suggesting government efforts to cushion a slowdown are yet to revive the nation’s factories
  • Markit’s euro-area services PMI fell to 53.7 from 54.2 in March; manufacturing PMI fell to 51.9 from 52.2; gauges for both industries also signaled slower growth in Germany and France
  • U.K. retail sales fell 0.5% in March vs estimate for 0.4% gain; separate figures showed the budget deficit in the fiscal year ended March narrowed more than officials thought
  • BOJ’s Kuroda said there is possibility that timing of achieving central bank’s 2% inflation target will occur early in FY16 rather than FY15
  • Kuroda also said letting central bank’s JGB holdings mature is a possible exit step; raising rate on excess reserves, conducting money market operations also possible steps
  • A stock market crash is possible as equity prices and real economy are diverging, Allianz management board member and CEO designate Oliver Baete says in an interview with Manager Magazin
  • Allianz CEO Diekmann says that problems at Pimco not yet over; while situation has stabilized, there are still net outflows and this will probably not change for the year
  • Sovereign bond yields mostly lower. Asian stocks gain, European stocks, U.S. equity-index futures fall. Crude oil lower, gold higher, copper little changed


DB’s completes the overnight event summary


Regular readers will know we think bonds are in a bubble, however we think it’s a necessity bubble. There is so much debt outstanding across the globe, especially in the developed world, that to keep the system afloat and solvent we need to have a bubble in fixed income. I’m not convinced we’ll look back on April 21st/22nd 2015 as the big turning point in global yields but when you’re in a bubble you have to be mindful that it will pop at some point. As a minimum it’s been an interesting move. Completing the bond move story, US 10yrs weakened in sympathy closing 7bps higher at 1.979% but periphery bonds did rally with Spain (-7.9bps), Italy (-6.1bps) and Portugal (-8.3bps) tightening to 1.364%, 1.387% and 1.985% respectively.

Following on from the moves in bond markets yesterday, 10y Treasury (-1.2bps) yields have clawed back some of those losses, although bond markets across Asia are some 2-10bps wider generally. Much of the attention is on China and Japan however where the flash April manufacturing PMI’s are out. The numbers make for slightly disappointing reading with both China (49.2 vs. 49.6 expected) and Japan (49.7 vs. 50.7 expected) coming in below market. The reading for China in particular is the lowest since April last year and will add to the argument that more stimulus is needed despite the recent RRR cut. Despite dropping shortly following the print, both the Shanghai Comp (+0.21%) and CSI 300 (+0.24%) have recovered, while the Nikkei (+0.29%) is firmer. Credit markets in both regions are 1-2bps better off.

Moving on, yesterday’s earnings reports in the US along with some slightly better than expected data helped support a modest rise in equity markets. The S&P 500 (+0.51%) and Dow (+0.49%) both closed up while the Dollar (+0.04%) was more or less unchanged – although it was once again much of the focus in earnings calls yesterday. The market appeared encouraged by earnings out of both McDonalds (+3.1%) and Coca Cola (+1.3%) yesterday, while post-market close releases from Facebook (miss) and EBay (beat) should provide some of the early direction in trading today after declining 4% and rising 4% in aftermarket trading respectively. Facebook’s results appeared to sum up much of the trend we’ve highlighted so far. Despite reporting a beat in profits, revenues came in below expectations as management cited that advertising revenue gains of 46% could have been as much as +55% had it not been for currency fluctuations.

US housing data yesterday proved to be supportive. Existing home sales in March rose +6.1% mom and well ahead of expectations (+3.1%). The reading was in fact the highest jump since December 2010 – reflective perhaps of a weather related rebound – while the annualized 5.19m rate is the highest since September 2013.The FHFA housing index for February also showed similar encouraging signs, as the +0.7% mom print came in above the +0.5% market expectations.

Closer to home yesterday, equity markets were a tad more mixed as the DAX (-0.60%) declined, Stoxx 600 (-0.03%) closed more or less unchanged and the CAC (+0.36%) finished higher. The Euro (-0.10%) closed lower for the third consecutive day, while Greek equities (+2.08%) and 3y yields (-223bps) rebounded – which we’ll touch on later. Despite the selloff in bond markets and fairly mixed performance in equity markets credit had a better day as Crossover finished 7bps tighter.

Data was fairly thin on the ground yesterday, with just a worse than expected flash April Euro area consumer confidence reading (-4.6 vs. -2.5 expected) to speak of. Rather it was the release of the Bank of England minutes that grabbed most of the headlines. With Gilts selling off as mentioned, the Pound also rose +0.74% and +0.85% against the Dollar and Euro respectively following the more hawkish tone to come out of the text. Despite voting unanimously (9-0) in favour of keeping rates on hold, two members noted that the decision was ‘finely balanced’. More telling however, comments that the Gilt curve is ‘exceptionally flat’ and that sterling appreciation could be feeding through into inflation ‘more quickly’, implied perhaps that there is less downward pressure on prices to come and perhaps a faster than expected rise in inflation.

On the subject of Central Banks, the Swiss National Bank yesterday reduced the number of sight deposit accounts that are exempt from its negative interest rate, exposing them to the -0.75% deposit rate enacted back in January. A spokeswoman for the SNB suggested that the move was ‘made not principally due to monetary policy imperatives, but on grounds of equal treatment’. The news caused the Swiss Franc to close 1.6% lower versus the Euro.

Onto Greece now, yesterday we heard what we had largely come to expect this Friday as head of the Eurogroup Working Group, Thomas Weiser, said that ‘there won’t be a new list in Riga, but over the course of May it must finally be reached’. Perhaps of more interest however and with various conflicting views on the matter, Wieser also noted that ‘the liquidity situation in Greece is already a little tight, but it should be sufficient into June’. Meanwhile, along with the ECB approving another €1.5bn in ELA funding, Greek Deputy Finance Minister Mardas suggested that the decree forcing state entities to move reserves to the Bank of Greece should raise €2.5 (higher than previous reports we’ve seen), covering obligations due in May.

Turning over to today’s data, there’s a bit more activity this morning with the April flash manufacturing, services and composite PMI’s for the Euro area, France and Germany to look forward to. UK will again be some focus with retail sales and public sector net borrowing data for March due up. Over in the US this afternoon, the April flash manufacturing PMI will be important, while jobless claims, new home sales and the Kansas City Fed manufacturing activity index are also due. On the earnings front, Amazon, Caterpillar, Google, Microsoft, General Motors and Proctor and Gamble are the highlights.





China’s manufacturing PMI falters and thus their stock market rises:

(courtesy zero hedge)


Chinese Stocks Surge After Lowest Manufacturing PMI In A Year

Great News, the Chinese manufacturing economy is contracting at its fastest pace in a year… at least that is the reaction in the Shanghai Composite. After selling off from the open, when HSBC ChinaManufacturing PMI printed a considerably worse than expected 49.2 – the lowest since April 2014 – stocks took off, energized the future easing expectations that are assured to come from a PBOC now hell-bent on providing speculative tools for any- and every-one just to keep the populace from revolting.

PMI prints the lowest in a year…

Not very pretty under the hood either…

With employment now in contraction for almost 3 years and deflationary pressures evident in input and output prices (both driven by stronger Yuan and over-capacity thans to easy money mal-investment)

And Stocks take off…

Welcome to the new normal China.

Charts: Bloomberg




we now have a new term for you:  Grimbo or Greece in Limbo. Today Citibank outlines two scenarios that may happen to Greece if they do not get their funding right away;

(courtesy zero hedge/Citibank)


Forget “Grexit”, “Grimbo” Has Arrived


If you didn’t know any better you might think “Grimbo” was a new Sesame Street character. Far from being the name of something that brings smiles to the faces of young children however, it’s actually the latest one-word take on the likely outcome of Greece’s protracted, painful negotiations with creditors, which will continue tomorrow in Riga where progress is, according to pretty much everyone that will be involved, unlikely. The new term follows in the footsteps of the classic (but now tired) “Grexit” and its underrated predecessor “Graccident,” and refers to two of the four outcomes Citi imagines are possible in the unfolding Greek drama. Here, via Citi, are the scenarios that would constitute Grimbo:

A new programme agreed, but only after capital controls were imposed and/or a Greek government default


In this scenario, current negotiations would fail to produce an agreement until a major event (or shock) occurs. Such an event could be that i) the ECB limits access for Greek banks to ELA (as it either runs out of patience about the lack of negotiations, or Greek banks face a large increase in funding outflows), ii) PM Tsipras calls a referendum (on the new programme or Eurozone membership) or snap elections, or iii) the Greek government misses a payment/defaults. In these cases, the shock could provide an extra push on both sides to conclude the negotiations and encourage leaders to take on potential domestic detractors and opponents to push through a deal. The timing of such a shock is uncertain and hard to predict. In theory a run on banks could trigger capital controls tomorrow. Equally, the government may not run out of money or the ECB out of patience until the summer…


No new programme, government default, capital controls and yet no Grexit.


In our view, it is by no means certain that the two sides can agree on a new programme in the coming months, even with capital controls in place, given the wide gap between the negotiating positions, the mutual lack of trust and the undercurrent of personal animosity. Without a new agreement, a Greek government default at some point is very likely, in our view, due to the shortage of other funding options. The lack of an agreement would also at some point be associated with capital controls and binding limits on ELA access. Compared to the previous scenario, the capital controls (a mix of bank holidays, deposit withdrawal restrictions, restrictions on external transactions) are likely to be more extensive and longer-lived…


The lack of liquidity for the sovereign would induce it to issue more IOUs (scrip) in lieu of payments in euro, increasingly for salaries and pensions in addition to payments to suppliers. Such IOUs are likely to gradually be traded and thereby develop into a parallel currency.


This scenario may well be triggered by a negative outcome to a referendum on a proposed bailout agreement without necessarily providing a mandate to exit the Eurozone. Over time, the stressed liquidity situation, and notably deposit withdrawal restrictions for banks, would significantly increase pressure on the Greek government, making fresh elections likely.


Those could produce a mandate for a new bailout agreement with the Eurozone or pave the way for an eventual Grexit, but this could still leave Greece in limbo for an extended period of time – Such a ‘Grimbo’ scenario can, but need not end in, Grexit. Grexit is not a well-defined legal or Treaty base step.

Meanwhile, the doublespeak continues from all sides and it’s starting to appear as though no one really has a good read on what’s going on even as the situation in Greece has grown increasingly desperate and now includes the seizure of local government deposits by the central bank (which claims it needs the cash to pay salaries and pensions) and rumors that Greece may need to tap Gazprom for an advance on the Turkish Stream pipeline project in order to stay afloat.

The good (via Bloomberg)…

Agreement on whole reform package needs to be reached first, Dutch Finance Minister Jeroen Dijsselbloem tells lawmakers in The Hague. Says payments in tranches after partial implementation of reforms “imaginable”


“I’m very opposed to a Grexit,” European Union Economic and Monetary Commissioner Pierre Moscovici says.


“Greece has its place within the euro. And it’s what the Greek people want,” Moscovici says at conference in Brussels




Provided “Brussels Group” of officials keeps pace of progress, an agreement for bailout disbursement is possible by end-April


Greek govt expects a positive signal at Friday’s Eurogroup so that a deal can be reached by end-April


Creditors haven’t discussed any sort of plan B with Greek govt, including default, arrears on IMF payments, or exit from euro area


Greece wants a solution, not a rupture

The bad…

“The Greek government has got to show some backbone in its reform efforts,” Moscovici says


Need to “make Greece more attractive to investors. Investors have to come back to Greece. What Greece really needs is growth and employment creation,” Moscovici says


Pacific Investment Management Co. sees 30% chance of an accident that would force Greece to leave the euro, says Mihir Worah, Co.’s chief investment officer of asset allocation and real return, at briefing Thursday in Sydney.


European Commission Vice President Valdis Dombrovskis says “we do not expect any major breakthroughs” on Greece at Riga meeting starting Friday “because technical negotiations are ongoing.” 


“These technical negotiations will need to continue after tomorrow because progress so far is not sufficient. There is still a lot of work to be done”

And the Schaeuble…

German Finance Minister Wolfgang Schaeuble to attend informal EU finance ministers’s meeting in Riga, Latvia, with “very limited expectations,” spokesman Martin Jaeger tells reporters at govt press conference in Berlin.


Germany doesn’t expect a comprehensive package of reform measures can be agreed on in Riga


Germany sees stock-taking of progress toward reform list


Not easy to imagine what new facts Greece will present


Germany seeks Greek explanation of lack of progress on a comprehensive reform list


Can’t say whether Greek govt will submit such a list by end of April

There’s also some hope that sideline talks between Tsipras and Merkel at today’s EU Summit will bear some fruit. Here’s kathimerini:

Prime Minister Alexis Tsipras is to meet with German Chancellor Angela Merkel Thursday in Brussels in a bid to secure a statement of political support from Berlin amid tough negotiations with creditors and dwindling finances.


The meeting, which is to take place on the sidelines of a European Union leaders’ emergency meeting on immigration, was announced in a brief statement from Tsipras’s office. The move came amid reports that negotiations taking place in Paris between Greek government officials and representatives of the creditors had made some small progress but remained far from securing a deal that could unlock crucial rescue funding.

The arrival:

Against this backdrop the market is still struggling to determine the extent of the contagion risk to the EU periphery should Grexit or Grimbo become reality. While we contend that redenomination risk will ultimately be the deciding factor when it comes to whether events in Greece cause crises in the likes of Spain, Italy, or Portugal, focus has shifted to sovereign spreads over the past week despite the fact that ECB asset purchases make it difficult to determine exactly what’s being priced in. Here’s Citi with a bit of color on contagion via EGBs:

As shown in Figure 1, (severe) corrections in Greece to higher yields have also tended to coincide with periphery sell-offs within the general bullish trend. We would also note that although 10yr Portugal, Spain and Italy are 10bp-30bp wider over April, contagion remains relatively limited and spreads remain near historic tights when considering a longer-term context (Figure 2).

We think the level of near-term event risk and the pick-up in volatility in Greece is such that further episodes of periphery spread weakness cannot be ruled out. Although spreads are likely ultimately to end the year tighter largely thanks to QE, near-term headline risk is likely to weigh on market sentiment and with it, the EMU spread environment. This may dominate otherwise supportive technicals such as the net cash flows.

*  *  *

Finally, here’s a table from Bloomberg which outlines the list of reforms and where negotiations currently stand (for our part, we think this is a bit optimistic):








Unbelievable!! More on the arrest of the British flash crash trader:

(courtesy zero hedge)


Why Sarao Is The Flash Crash Patsy: He Threatened To Expose The “Mass Manipulation Of High Frequency Nerds”

There are several notable items in Bloomberg’scomprehensive overnight summary of the epic humiliation America’s market regulators are about to undergo, complete with yet another round of theatrical Congressional kangaroo courts, which will lead to a lot of red faces, a wrist slap or two and maybe even the termination of one or two lowly employees and… nothing else.

Because what difference does it make?

At this point only a bottom-up overhaul can “fix” the fragmented, broken market which by definition can only come after the next market crash, one which will promptly be blamed on HFTs (which leaving the central bankers unscathed).

Back to the Bloomberg piece in which we first discover that it wasn’t even the CFTC that, 5 years later, “figured out” the flash crash was one person’s fault:

When Washington regulators did a five-month autopsy in 2010 of the plunge that briefly erased almost $1 trillion from U.S. stock prices, they didn’t even consider whether it was caused by individuals manipulating the market with fake orders.

Their analysis was upended Tuesday with the arrest of Navinder Singh Sarao — a U.K.-based trader accused by U.S. authorities of abusive algorithmic trading dating back to 2009. Even that action was spurred not by regulators’ own analysis but by that of a whistle-blower who studied the crash, according to Shayne Stevenson, a Seattle lawyer representing the person who reported the conduct.

Your tax money not at work.

But fear not: after today’s Deutsche Bank $2.5 billion “get out of jail” card, the CFTC will be $800 million richer and can finally even afford to hire a former trader who has some understanding of how the market works.

* * *

Second, the reason why the SEC wrote a 104-page report with “findings explaining the Flash Crash” which it will have no choice but to retract in light of the latest news and developments, is the following:

Spoofing wasn’t even part of the CFTC’s analysis of the crash, said James Moser, a finance professor at American University who was the agency’s acting chief economist in May 2010. The flash-crash review marked the first time that the agency worked through the CME’s massive order book. CFTC officials often needed to call the exchange for help interpreting the data, he said in an interview.

We didn’t look for any sort of spoofing activity,” said Moser, who added that he doubts that Sarao’s activity was the main cause of the crash. “At that point in 2010, that wasn’t high on the radar, at least in our minds.”

So the CME, which is the exchange that trades the E-mini, “concluded within four days of the 2010 flash crash that algorithmic trading on futures exchanges didn’t exacerbate losses in the market,” and a few months later, so did the SEC, which instead pinned the entire crash on Waddell & Reed. And the way it did it was by completely ignoringabout 99% of all posted quotes: the layered and rapidly canceled trades or what we dubbed “quote stuffing” one whole month after the Flash Crash, in June. In fact we even explained it to anyone who cared to listen: “How HFT Quote Stuffing Caused The Market Crash Of May 6, And Threatens To Destroy The Entire Market At Any Moment.”

Shockingly, the SEC appeared in front of Congress claiming it has everything under control, when it now admits it never even looked at spoofing.

* * *

But that is nothing compared to the third revelation in the Bloomberg report, namely that the CME had interacted with Sarao, even on the day of the flash crash. The exchange contacted him about his trades after concluding he appeared to be significantly swaying opening prices. The same CME, mind you, which days after the Flash Crash determined that algo trading wasn’t the cause of the market crash.

Sarao explained some of his conduct to the CME in a March 2010 e-mail as “just showing a friend of mine what occurs on the bid side of the market almost 24 hours a day, by the high-frequency geeks.”

And the reason why nobody touched Sarao until just days before the 5 years statute of limitations following the Flash Crash had run out, is the following:

He then questioned whether CME’s actions regarding his activity meant the mass manipulation of high frequency nerds is going to end,” according to the U.S. Department of Justice’s complaint released Tuesday.

The answer was no – just his own. And this was his fatal move:


More from Bloomberg:

Sarao, who goes by Nav, also said his investing style was a reaction to high-frequency traders, who he said could manipulate the market based on his orders without any repercussions. He said his software and his distance from Wall Street made his transactions “miles too slow” to compete with flash traders operating out of the U.S.

“I don’t like the HFT arena and have complained to the exchange numerous times about their manipulative practices, please BAN IT,” Sarao told the FCA in the May 2014 e-mail.

One of his letters to the UK regulator:

Which that is why Sarao became the designated patsy for what is now a market that is manipulated by rogue, parasitic algos beyond recognition: he dared to threaten the status quo.

As for the the market, it is still “mass manipulated by high frequency nerds”, and will continue to be, until they themselves become the sacrificial lambs after the next historic market crash.



As promised, the first documentation of spoofing and layering by our HFT traders to the CFTC:

(courtesy zero hedge)


Dear CFTC: Presenting Today’s E-Mini Market Manipulating “Spoofing”

Dear CFTC commissioners:

Following yesterday’s first in a long series of articlesshowcasing the ongoing manipulation in the S&P courtesy of E-mini spoofing, we are delighted to inform you that even though you heroically used a whistleblower’s tip to capture the sole Flash Crash mastermind, Nav Sarao, five years after a flash crash which your peers at the SEC incorrectly claimed was the work of a small Kansas City-based mutual fund, the manipulation – as you called it – of the S&P 500 continues.

While we are confident you are intimately familiar with the details of the whistleblower’s, pardon, your own case against Sarao, we will remind you how the FBI summarized his transgressions:

Sarao implemented a strategy to manipulate the E-Mini market. Based on my conversations with representatives of the Consulting Group, as well as my review of documents, I know that, among other activity, SARAO used a “dynamic layering” technique, placing, repeatedly modifying, and ultimately canceling multiple 200-, 250-, 300-, 400-, 500-, 550-, 600-, and 900-lot sell orders (whereas the average market size order, based on a sample analyzed by the Consulting Group, was 7 lots).

Sure enough, while a quick look at the market in the 60 minutes between 11:00 am and noon reveals that the most prevalent ES order size today (unlike yesterday) is in the single digits as it should be, what one can see quite clearly are the tens of thousands of E-mini orders placed, and then immediately canceled, made up of either ~30 or ~50 contract blocks.

And while we are confident that if Nanex can see this, so can you, here is the buy side:

And the spoofing on the sell side:


But wait, there’s more.

As the following two charts show, the spoofing that has been going on in the S&P daily for years, is just as prevalent in Europe, where the EuroStoxx (ESX) is a veritable spoofer’s utopia.

Here are the EuroStoxx buys in during a 140 minute block recorded earlier today courtesy of Nanex:

And sales:


Then again, we are certain that you have all this data already and are already preparing the case against the perpetrator(s): after all you are the CFTC – you know “everything” that happens in the futures market. As such we are confident you are already actively investigating the ongoing spoofing in both the US and Europe… unless of course, your interest is only awakened on days when the market drops.

That, and instead of focusing on the Virtus, the Citadels, and the KCGs of the world and their armies of predatory algorithms, you insist on finding the next manipulation mastermind in a basement in a suburb of London.


A terrific article written by Ambrose Evans Pritchard who states that the USA shale oil industry is not giving up so fast.  The producers are learning fast as they lower their costs.  The low price of oil will be here for sometime.



(courtesy Ambrose Evans Pritchard)

Oil slump may deepen as US shale fights Opec to a standstill

Continental’s Harold Hamm says US shale industry has ‘only begun to scratch the surface’ of vast and cheap reserves, driving growth for years to come



55-gallon oil barrels stacked up outside a Chevron Gas station in Santa Barbara, California

Scotland’s oil industry can expect potential ruin unless taxes are cut drastically Photo: Alam6y

The US shale industry has failed to crack as expected. North Sea oil drillers and high-cost producers off the coast of Africa are in dire straits, but America’s “flexi-frackers” remain largely unruffled.

One starts to glimpse the extraordinary possibility that the US oil industry could be the last one standing in a long and bitter price war for global market share, or may at least emerge as an energy superpower with greater political staying-power than Opec.

It is 10 months since the global crude market buckled, turning into a full-blown rout in November when Saudi Arabia abandoned its role as the oil world’s “Federal Reserve” and opted instead to drive out competitors.

If the purpose was to choke the US “tight oil” industry before it becomes an existential threat – and to choke solar power in the process – it risks going badly awry, though perhaps they had no choice. “There was a strong expectation that the US system would crash. It hasn’t,” said Atul Arya, from IHS.

“The freight train of North American tight oil has just kept on coming. This is a classic price discovery exercise,” said Rex Tillerson, head of Exxon Mobil, the big brother of the Western oil industry.

Mr Tillerson said shale producers are more agile than critics expected, which means that the price war will go on. “This is going to last for a while,” he said, warning that any rallies are likely to prove false dawns.

The US “rig count” – suddenly the most-watched indicator in global energy – has fallen from 1,608 in October to 747 last week. Yet output has to continued to rise, stabilizing only over the past five weeks.

Mr Tillerson said this is more or less what happened in the sister market for US shale gas. In 2009, some 1,200 rigs produced 5.5bn cubic feet (bcf) of gas per day at a market price near $8.

Today the price is just $2.50. Nobody would have believed back then that the industry would continue boosting supply to 7.3 bcf, and be able to do so with just 280 rigs.

“Will we see the same phenomenon in five years in tight oil? I don’t know, but this is a very resilient industry. I think people will be surprised,” Mr Tillerson said, speaking at the IHS CERAWeek forum in Houston.

“We’ve really only begun to scratch the surface. Shale can keep growing by 500,000 to 700,000 b/d easily,” said Harold Hamm, founder of Continental Resources. His company has cut costs by 20pc to 25pc over the past four months.

US shale will “roll over” to some degree as producers exhaust their one-year hedges and face the full shock of lower prices. But it is hazardous to bet too heavily on this assumption.

IHS said an astonishing thing is happening as frackers keep discovering cleverer ways to extract oil, and switch tactically to better wells. Costs may plummet by 45pc this year, and by 60pc to 70pc before the end of 2016. “Break-even prices are going down across the board,” said the group’s Raoul LeBlanc.

Shale bosses have been lining up at this year’s “Energy Davos” to proclaim the fracking Gospel. “We have just drilled an 18,000 ft well in 16 days in the Permian Basis. Last year it took 30 days,” said Scott Sheffield, head of Pioneer Natural Resources.

“We’ve cut spud-to-spud time to 19 days,” said Hess Corporation’s John Hess, referring to the turnaround time between drilling. This is half the level in 2012. “We’ve driven down drilling costs by 50pc, and we can see another 30pc ahead,” he said.

IHS said shale is so competitive that it may “take off” again early next year after troughing in the fourth quarter, adding 500,000 b/d in 2016. “It could crowd out other parts of the world. In the long run the US could get a bigger share of the pie,” said Mr LeBlanc.

Scotland’s oil industry can expect a smaller share and potential ruin, unless taxes are cut drastically, blowing apart the Conservatives’ fiscal plans. “We’re going to see massive restructuring. The North Sea is a very high cost basin,” said BP’s Bob Dudley.

Mr Dudley is resigned to a long drought for oil prices as shale refuses to yield, with Iran poised to add a further 500,000 b/d in short order if the nuclear deal goes through.

The International Monetary Fund listed a hierarchy of losers in a report last week. The North Sea is deemed the most vulnerable but Brazil, Australia, Gabon, Nigeria and Colombia, among others, are all less competitive than the US.

Few of the oil barons in Houston believe market chatter about a V-shaped rally ahead. “Prices are not going to snap back. People are in denial,” said Prince Nawaf Al-Sabah, head of Kuwait’s explorer, KUFPEC.

US oil inventories have risen to a record 480m barrels. The Chinese have filled their strategic petroleum reserves. The “Li Keqiang index” of Chinese GDP – rail freight, electricity use and bank loans – implies an industrial recession in the world’s marginal consumer of oil.

The Chinese have also taken advantage of the price slump to cut fuel subisidies and have raised the fuel consumption tax three times in two months (by 50pc in total). This is a pattern replicated across much of the emerging world. Recovery will run smack into a new headwind.

“There is a lot of whistling past the graveyard,” said Stephen Chazen, head of Occidental Petroleum. “We’re preparing for $60 oil and perhaps less, and we can cover all dividends and costs in this range.”

Mr Chazen is sitting on a colossal find in the Permian Basin in West Texas. “We paid $3.8bn and thought we were getting 1bn barrels. People said we paid too much. Well, we got 7bn to 8bn barrels,” he said.

There is a dawning realisation in the energy industry that US shale output might double yet again before the end of this decade, even if prices never come close to $100. This would demolish the assumptions behind a long string of projects in the ultra-deep waters of the oceans, often below layers of salt and blind to seismic imaging.

The cost of production for the Gulf’s Opec core is far lower than anything shale can offer, but what matters for them is the “fiscal” cost needed to balance their budgets and sustain rentier regimes sitting on social and political powder kegs.

Mr Hess said global oil producers may indeed face a deficit of $100bn a year to cover dividends and investment, but Opec faces a $500bn deficit to cover social costs and military spending.

The risk for the Saudis is that the fight against US shale turns into a destructive stalemate, eroding its foreign reserves and inflicting so much damage on Iraq, Algeria and Libya that its own political neighbourhood spins further out of control.

It is lashing out incoherently. The disastrous attack on Yemen’s Houthi rebels has allowed Al-Qaeda to free its prisoners and take the country’s fifth biggest city. France’s Total has had to declare force majeure at its operations and evacuate 800 staff, cutting off revenues that fund 30pc of Yemen’s budget.

“It is turning into a Sunni-Shia war and risks destabilizing the whole region,” said Patrick Pouyanne, Total’s chief. The Saudis risk sectarian “blow-back” into their own Eastern Province, where a restive Shia minority is sitting on the Kingdom’s oil reserves.

Caution is in order. The paradox of today’s oil markets is that global spare capacity is down to half its historical average. The Saudis have their foot to the floor, boosting output by 660,000 b/d over the past month to 10.3m.

PIRA Energy estimates that Saudi spare capacity is falling to 1.7m b/d, a wafer-thin buffer for the world. The market is primed for a sudden spike in prices if anything goes wrong. It is more than ever at the mercy of geopolitical events.

One thing is for sure. If and when prices rebound, US shale is ready to sweep in with lightning speed to snatch yet more market share. Opec has met its match.




No comment necessary!


(courtesy zero hedge)

WTI Crude Surges Towards $58 – Completes “Manic Wtf” Pattern


From below $56 to $58 in a few hours as terrible Asian, European, and US PMIs prompt a spoofed, manic stop-run to Tuesday’s highs.

The “Wtf” is complete…

These are your markets…




Both of these two assets are very important globally:  oil and coal and both of these are showing that a crash in imminent;

(courtesy Graham Summers/Phoenix Research Capital)


These Two Assets Show Us a Crash is Coming

Phoenix Capital Research's picture

If the foundation of the financial system is debt… and that debt is backstopped by assets that the Big Banks can value well above their true values (remember, the banks want their collateral to maintain or increase in value)… then the “pricing” of the financial system will be elevated significantly above reality.


Put simply, a false “floor” was put under asset prices via fraud and funny money.


Consider the case of Coal.


In the US, Coal has become a political hot button. Consequently it is very easy to forget just how important the commodity is to global energy demand. Coal accounts for 40% of global electrical generation. It might be the single most economically sensitive commodity on the planet.


With that in mind, consider that Coal ENDED a multi-decade bull market back in 2012. In fact, not only did the bull market endbut Coal has erased virtually ALL of the bull market’s gains (the green line represents the pre-bull market low).



Those who believe that the global is in an economic expansion will shrug this off as the result if the US’s shift away from Coal as an energy source. The US accounts for only 15% of global Coal demand. The collapse in Coal prices goes well beyond US changes in energy policy.

What’s happening in Coal is nothing short of “price discovery” as the commodity moves to align itself with economic reality. In short, the era of “growth” pronounced by Governments and Central Banks around the world ended. The “growth” or “recovery” that followed was nothing but illusion created by fraudulent economic data points.


We get confirmation of this from Oil.


For most of the “so called” recovery, Oil gradually moved higher, creating the illusion that the world was returning to economic growth (demand was rising, hence higher prices).



That blue line could very well represent the “false floor” for the recovery I mentioned earlier. Provided Oil remained above this trendline, the illusion of growth via higher energy demand was firmly in place.


And then Oil fell nearly 60% from top to bottom in less than six months.



As was the case for Coal, Oil’s drop was nothing short of a bubble bursting. From 2009 until 2014 Oil’s price was disconnected from economic realities. Then price discovery hit resulting in a massive collapse.


Moreover, the damage to Oil was extreme. Not only did it collapse 60% in a matter of months. It actually TOOK out the trendline going back to the beginning of the bull market in 1999.




This is a classic “ending” pattern. Breaking a critical trendline (particularly one that has been in place for several decades) is one thing. Breaking it and then failing to reclaim it during the following bounce is far more damning.


In short, the era the phony recovery narrative has come unhinged.  We have now entered a cycle of actual price discovery in which financial assets fall to more accurate values. This will eventually result in a stock market crash, very likely within the next 12 months.


If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis “Round Two” Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.



Your more important currency crosses early Thursday morning:


Euro/USA 1.0740 up .0017

USA/JAPAN YEN 119.99 up .052

GBP/USA 1.5002 down .0035

USA/CAN 1.2240 down .0005

This morning in Europe, the Euro rose a little by 17 basis points, trading now well above the 1.07  level at 1.0740; 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 down again in Japan by 5 basis points and trading just below the 120 level to 119.99 yen to the dollar.

The pound was well down this morning as it now trades just above the 1.50 level at 1.5002  ( still 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 5 basis points at 1.2240 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: this morning : up by 53.75  points or 0.27%

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

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

Gold very early morning trading: $1190.00



Early Thursday morning USA 10 year bond yield: 1.95% !!!  down 2  in basis points from Wednesday night/

USA dollar index early Thursday morning: 98.02 down 5 cents from Wednesday’s close. (Resistance will be at a DXY of 100)


This ends the early morning numbers, Thursday morning


And now for your closing numbers for Thursday:


Closing Portuguese 10 year bond yield: 1.98% down 3 in basis points from Wednesday


Closing Japanese 10 year bond yield: .32% !!! up  1 in basis points from Wednesday


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


Spanish 10 year bond yield: 1.37% !!!!!!


Your Wednesday closing Italian 10 year bond yield: 1.41% up 2  in basis points from Wednesday:

trading 4 basis points above Spain.





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


Euro/USA: 1.0823 up .0099  ( Euro up 99 basis points)

USA/Japan: 119.51 down .433  ( yen up 43 basis points)

Great Britain/USA: 1.5055 up .0018   (Pound up 18 basis points)

USA/Canada: 1.2148 down .0096 (Can dollar up 96 basis points)


The euro rose today.   It settled up 99 basis points against the dollar to 1.0823. The yen was up 43 basis points points and closing well above the 119 cross at 119.51. The British pound gained considerable  ground today, 18 basis points, closing at 1.5055. The Canadian dollar gained a lot of ground to the USA dollar, up 96 basis points closing at 1.2148.

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: 1.94% down 4 in basis points from Wednesday



Your closing USA dollar index:

97.29  down 78 cents on the day.


European and Dow Jones stock index closes:


England FTSE up 25.43 or 0.36%

Paris CAC down 32.18 or 0.62%

German Dax down 143.79 or 1.21%

Spain’s Ibex up 26.60 or 0.23%

Italian FTSE-MIM down 115.97 or 0.50%


The Dow: up 20.42 or 0.11%

Nasdaq; up 20.89 or 0.41%


OIL: WTI 57.52 !!!!!!!

Brent: 64.83!!!!


Closing USA/Russian rouble cross: 50.78 up 1 1/4 rouble per dollar






And now your important USA stories:


NYSE trading for today.

Worst Macro Data in 6 Years Sends Stocks Soaring To Record Highs

The “easier for longer” trade was on in force today after every macro data item missed expectations…


…sending the US Macro index to new 6 year lows…


Buit of course, we couldn’t begin today without noting the utter nonsense that happened in US equity “markets” at 1151ET when ‘someone’ decided it was time to buy in large size at record-breaking highs, lifting the Nasdaq and S&P to record closing highs and beyond…


Which ‘demanded’ another clip on such a day as this…


By the close, Trannies were the day’s big winner until the last few minutes… Dow the relative loser…


But futures show the chaos since yesterday’s close as weakness in Asia and Europe sent stocks sprawling but US weakness was just what everyone wanted…


On the week, Trannies continue to lead…


Today was all about the data.. and how crap it was everywhere. That unleashed the “easier for longer” trade as…

Bonds were well bid…even though once again we saw the 8am selling monkey arrive right on cue…


And the Dollar was dumped… back into the red forf the week (as Swissy recovered all its losses from yesterday)


Dollar weakness sparked buyiung in commodities with gold, silver, and copper all up on the day…


As crude just exploded for no good reason whatsoever… fully retracing the “Saudis have stopped bombing” plunge


Charts: Bloomberg

Bonus Chart: Time-Warner (which ripped higher on news of the merger in Feb) also ripped higher on the news of the deal breakup – course it did in today’s idiot market… but by the close that had ended…


Initial claims are worse than expected.  Also continuing claims rose.

Texas, California, and New York were the worst states effected

(courtesy BLS/zero hedge)

Initial Claims Worse Than Expected (Again), Remain Flat For 2015

For the second week in a row, initial claims were worse than expected and increased year-to-date, While still below the magic 300k levels, claims printed 295k against expectations of 288k confirming the stagnation of the job market since the end of QE3 and the government’s fiscal year. California and New York saw the biggest rise in initial claims with only Illinois seeing a drop; notably Texas saw layoffs across various sectors as it seems it ius not as ‘diverse’ as Richard Fisher propagandized. After 4 straight weeks of decline, continuing claims rose this week by the most in almost 3 months (but remains close to 15 year lows).

Jobless Claims have gone nowhere for 6 months…

State by State breakdown

Charts: Bloomberg





This morning we witness huge misses in Chinese manufacturing PMI along with European PMI.  The global contraction continues  with today’s big USA  PMI miss.  The all important new orders tumble.

(courtesy zero hedge)

US Manufacturing PMI Misses By Most On Record As New Orders Tumble

On the heels of weak PMIs from Europe and Asia, Markit’s US Manufacturing PMI plunged to 54.2 in April (from 55.7). Against expectations of a rise to 55.6, this is the biggest miss on record. Of course, this is ‘post-weather’ so talking-heads will need to find another excuse as New Orders declined for the first time since Nov 2014.


Chart: Bloomberg

Commenting on the flash PMI data, Chris Williamson, Chief Economist at Markit said:

Manufacturers saw a disappointing start to the second quarter, reporting the weakest growth since January. Key to the slowdown was a weakening of export orders, in turn a symptom of the loss of competitiveness arising from the dollar’s strength.


“However, while exporters are suffering, domestic demand looks to have remained robust, helping to sustain a reasonably strong production trend.


“While growth has clearly slowed in 2015 compared to the impressive rate seen throughout much of last year, the goods-producing sector is by no means collapsing under the weight of the strong dollar, and fears of a sharp slowdown consequently look overplayed.


The appreciation of the dollar is meanwhile also helping to keep inflation down, with firms reporting lower import prices helping push average prices paid for raw materials down sharply again. The past two months have seen the steepest back-to-back falls in manufacturers’ input prices since 2009.”

*  *  *

We’re gonna need a better excuse than weather!!!





USA home sales tumble by the most in almost 2 years.  The northeast area crashes.
As we are highlighting: the USA economy is not doing too good
(courtesy zero hedge)

New Home Sales Tumble By Most In Almost 2 Years As Northeast Crashes

After existing home sales sent stocks vertical on great news, so new home sales plunge has sent stocks vertical on bad news. An 11.1% drop MoM – the biggest since July 2013 – dragged new home sales back below 500k to 481k SAAR – the biggest miss in a year. Sales of new homes collapse 33.3% in The Northeast and The South saw new home sales crash 15.8%.

But the weather didn’t affect Existing Home Sales:


The biggest MoM drop in almost 2 years:


And this is what the long-term trend looks like:


One comment

  1. GoldFreak · · Reply

    Central Gold Trust, not Central Fund of Canada!!!

    You freaked me out Harvey.


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