June 24/Russia retaliates by raising gas rates to the Ukraine/Greece leaves empty handed as there is no deal/silver open interest rises to over 200,000 contracts or over 1 billion oz.

Good evening Ladies and Gentlemen:

Here are the following closes for gold and silver today:


Gold:  $1172.60 down $3.60(comex closing time)

Silver $15.84 up 11 cents.


In the access market 5:15 pm

Gold $1175.00

Silver: $15.90


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 1 notice serviced for 100 oz.  Silver comex filed with 1 notice for 5,000 oz. Remember we are entering options expiry week: This Thursday, the comex gold and silver expires and then next Tuesday, we have options expiry on the gold/silver LBMA contracts and on the OTC contracts.  So gold and silver will be subdued in price until Tuesday night.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 245.07 tonnes for a loss of 57 tonnes over that period.

In silver, the open interest rose hugely again by 4909 contracts despite yesterday’s huge price decline of 41 cents.   The total silver OI continues to remain extremely high, with today’s reading at 200,273 contracts now at decade highs despite a record low price. In ounces, the OI is represented by 1.001 billion oz or 142% of annual global silver production (ex Russia ex China). 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 as they continue to raid as basically they have no other alternative. There can only be one answer as to how the OI of comex silver is now over 1 billion oz coupled with a low price under 16.00 dollars:  sovereign China through proxies are the long and they have extremely deep pockets.

In silver we had 1 notice served upon for 5,000 oz.

In gold, the total comex gold OI rests tonight at 430,978 for a gain of 11,084 contracts as gold was down $7.50 yesterday. We had 1 notice filed for 100 oz.

we had another addition of .900 tonnes in gold inventory at the GLD; thus the inventory rests tonight at 706.37 tonnes. The appetite for gold coming from China is depleting not only gold from the LBMA and GLD but also the comex is bleeding gold. I am sure that 700 tonnes is the rock bottom inventory in gold.  Anything below this level is just paper and the bankers know that they cannot retrieve “paper gold” to send it onwards to China.In silver, /we had no change in inventory at the SLV Inventory now rests at 326.918 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 4909 contracts to 200,273 despite the fact that silver was down considerably yesterday to the tune of 41 cents.. The OI for gold rose by 11,094 contracts up to 430,978  contracts as the price of gold was down $7.50 yesterday.

(report Harvey)


2. Today, 6 important commentaries on Greece
(zero hedge, Reuters/Bloomberg)

3.the silver fraud at the comex
(Dave Kranzler IRD)

4. Gold trading overnight
(Goldcore/Mark O’Byrne)

5. Trading from Asia and Europe overnight
(zero hedge)

6. Trading of equities/ New York
(zero hedge)

7. Ron Paul warns the USA if they confiscate Russian assets
(Ron Paul)

8. Data on final figures for first quarter GDP
(zero hedge)

9 Russia strikes back by vacating all discounts on gas to the Ukraine.

(zero hedge)

10.  French unemployment rises again
(zero hedge)

we have these plus other stories to bring your way tonight. But first……..

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 appreciably by 11,094 contracts from 419,884 down to 430,978 despite the fact that gold was down $7.50 in price  yesterday (at the comex close).  We are now in the big active delivery contract month of June.  Here the OI fell by 38 contracts down to 369. We had 0 notices served upon yesterday.  Thus we lost 38 contracts or an additional 3,800 oz will not stand for delivery as they were no doubt cash settled.  The next contract month is July and here the OI fall by 60 contracts to 601.  The next big delivery month after June will be August and here the OI rose by 7,195 contracts up to 278,660.  The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 76,495. The confirmed volume yesterday (which includes the volume during regular business hours + access market sales the previous day was poor at 129,521 contracts. Today we had 1 notice filed for 100 oz.

And now for the wild silver comex results.  Silver OI rose by a gigantic 4,909 contracts from 195,364 up to 200,273 despite the fact that the price of silver was down sharply in price by 41 cents, with respect to yesterday’s trading. We continue to have our bankers pulling their hair out with respect to the continued high silver OI.  The front non active  delivery month of June saw it’s OI fall 49 contracts to 24 contracts. We had 51 contracts delivered upon yesterday.  Thus we gained 2 silver contracts or an additional 10,000 oz  will stand for delivery in this non active June contract month. The next delivery month is July and here the OI surprisingly fell by only 12,977 contracts down to 55,067. We have 4 trading days left before first day notice on June 30 and the front month is not contracting much in volume at all.The next major active delivery month is September and here the OI rose by a huge 12,977 contracts. So far, for the first time we are not witnessing the collapse of OI in an active delivery month.  The estimated volume today was good at 37,016 contracts (just comex sales during regular business hours. The confirmed volume on yesterday (regular plus access market) came in at 114,586 contracts which is huge in volume. However we had many rollovers. We had 1 notice filed for 5,000 oz today.

June initial standing

June 24.2015



Withdrawals from Dealers Inventory in oz    nil
Withdrawals from Customer Inventory in oz 3407.900 oz (Manfra,Scotia)
Deposits to the Dealer Inventory in oz 700.000 oz Brinks?????
Deposits to the Customer Inventory, in oz nil
No of oz served (contracts) today 1 contracts (100 oz)
No of oz to be served (notices) 368 contracts (36,800 oz)
Total monthly oz gold served (contracts) so far this month 2690 contracts(269,000 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month 99.93 oz
Total accumulative withdrawal of gold from the Customer inventory this month  525,250.1  oz

Today, we had 1 dealer transaction

Dealer withdrawal:

we had zero dealer withdrawals

total Dealer withdrawals: nil  oz

we had 1 dealer deposit

i) Into Brinks:  7,000.000 oz???? how can this be possible???

total dealer deposit: 7,000.000 oz
we had 2 customer withdrawal

i) Out of Scotia: 3215.000 oz  (100 kilobars)

ii) Out of Manfra:  192.90 oz (6 kilobars)

total customer withdrawal:3407.900 oz  (106 kilobars)

We had 0 customer deposits:


Total customer deposit: nil oz

We had 0 adjustments:


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

To calculate the total number of gold ounces standing for the June contract month, we take the total number of notices filed so far for the month (2690) x 100 oz  or 269,000 oz , to which we add the difference between the open interest for the front month of June (369) and the number of notices served upon today (1) x 100 oz equals the number of ounces standing.

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

No of notices served so far (2690) x 100 oz  or ounces + {OI for the front month (369) – the number of  notices served upon today (1) x 100 oz which equals 305,800 oz standing so far in this month of June (9.511 tonnes of gold).  Thus we have 9.5111 tonnes of gold standing and only 16.07 tonnes of registered or for sale gold is available.  We lost 38 contracts or 3,800 oz to probable cash settlements.

Total dealer inventory 517,422.669 or 16.09 tonnes

Total gold inventory (dealer and customer) = 7,898,336.053 oz  or 245.07 tonnes

Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 245.07 tonnes for a loss of 57 tonnes over that period.


And now for silver

June silver initial standings

June 24 2015:



Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory nil
Deposits to the Dealer Inventory  nil
Deposits to the Customer Inventory  nil
No of oz served (contracts) 1 contracts  (5,000 oz)
No of oz to be served (notices) 23 contracts(115,000 oz)
Total monthly oz silver served (contracts) 274 contracts 13,655,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month 526,732.4  oz
Total accumulative withdrawal  of silver from the Customer inventory this month 5,575,143.2 oz

Today, we had 0 deposits into the dealer account:

total dealer deposit: nil   oz

we had 0 dealer withdrawal:

total dealer withdrawal: nil  oz

We had 0 customer deposits:


total customer deposit: nil  oz

We had 0 customer withdrawals:


total withdrawals from customer;nil  oz

we had 0 adjustments

Total dealer inventory: 57.840 million oz

Total of all silver inventory (dealer and customer) 181.117 million oz

The total number of notices filed today is represented by 1 contracts for 5,000 oz. To calculate the number of silver ounces that will stand for delivery in June, we take the total number of notices filed for the month so far at (274) x 5,000 oz  = 13,700,000 oz to which we add the difference between the open interest for the front month of June (24) 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 June contract month:

274 (notices served so far) + { OI for front month of June (24) -number of notices served upon today (1} x 5000 oz ,= 13,815,000 oz of silver standing for the June contract month.

we gained 2 contracts or an additional 10,000 oz will stand for delivery in this non active delivery month of June.

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



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:

June 24/ a good addition of.900 tonnes of gold into the GLD/Inventory rests at 706.37 tonnes

June 23/no change in gold inventory/rests tonight at 705.47 tonnes

June 22/ a huge increase of 3.27 tonnes of gold into GLD/Inventory tonight: 705.47 tonnes

June 19.2015: no change in gold inventory/rests tonight at 701.90 tonnes.

June 18/no change in gold inventory/rests tonight at 701.90 tonnes

June 17/no change in gold inventory/rests tonight at 701.90 tonnes

June 16./no change in gold inventory/Rests tonight at 701.90 tonnes.

June 15/we lost a huge 2.08 tonnes of gold from the GLD/Inventor rests tonight at 701.90 tonnes

June 12/we had a small withdrawal of .24 tonnes of gold from the GLD/Inventory rests this weekend at 703.98 tonnes.

June 11/we had another huge withdrawal of 1.5 tonnes of gold from the GLD/Inventory rests tonight at 704.22 tonnes

June 10/ we had a huge withdrawal of 2.98 tonnes of gold from the GLD/inventory rests at 705.72

June 9/ no change in gold inventory at the GLD/Inventory rests at 708.70 tonnes

June 8/ a big withdrawal of 1.19 tonnes of gold from the GLD/Inventory rests at 708.70 tonnes

June 24 GLD : 706.37 tonnes



And now for silver (SLV)

June 24/no change in inventory/rests tonight at 326.918 million oz

June 23/we had a small withdrawal of 956,000 oz/Inventory tonight rests at 326.918 million oz

June 22/ no change in silver inventory/327.874 million oz

June 19/no change in silver inventory/327.874 million oz

June 18 no change in silver inventory/327.874 million oz

June 17/no change in silver inventory/327.874 million oz

June 16./no change in silver inventory/327.874 million oz

June 15/we had no change in silver inventory/327.874 million oz

June 12/we had another addition to the tune of 956,000 oz/Inventory rests this weekend at 327.874.  Please note that there has been an addition on each of the past 5 days.

June 11.2015: we had another monster of an addition to the tune of 2.791 million oz/Inventory rests at 326.918

June 10/another monster of an addition to the tune of 1.126 million oz/Inventory rests at 324.127

June 9/ a monster of an addition to the tune of 3.393 million oz/inventory rests at 323.001 million oz.

June 8/no change in inventory/SLV inventory rests at 319.608 milion oz.

June 5 a huge addition of 1.433 million oz of silver added to the SLV/Inventory at 319.608 million oz

June 24/2015: we had no change in silver inventory/SLV inventory rests tonight at 326.918 million oz


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

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

1. Central Fund of Canada: traded at Negative 7.9 percent to NAV usa funds and Negative 7.8% to NAV for Cdn funds!!!!!!!

Percentage of fund in gold 62.7%

Percentage of fund in silver:38.0%

cash .3%

( June 24/2015)

2. Sprott silver fund (PSLV): Premium to NAV rises to.90%!!!! NAV (June 24/2015)

3. Sprott gold fund (PHYS): premium to NAV falls to – .63% toNAV(June24/2015

Note: Sprott silver trust back  into positive territory at +.90%

Sprott physical gold trust is back into negative territory at -.63%

Central fund of Canada’s is still in jail.

Sprott formally launches its offer for Central Trust gold and Silver Bullion trust:

SII.CN Sprott formally launches previously announced offers to CentralGoldTrust (GTU.UT.CN) and Silver Bullion Trust (SBT.UT.CN) unitholders (C$2.64)
Sprott Asset Management has formally commenced its offers to acquire all of the outstanding units of Central GoldTrust and Silver Bullion Trust, respectively, on a NAV to NAV exchange basis.
Note company announced its intent to make the offer on 23-Apr-15 Based on the NAV per unit of Sprott Physical Gold Trust $9.98 and Central GoldTrust $44.36 on 22-May, a unitholder would receive 4.45 Sprott Physical Gold Trust units for each Central GoldTrust unit tendered in the Offer.
Based on the NAV per unit of Sprott Physical Silver Trust $6.66 and Silver Bullion Trust $10.00 on 22-May, a unitholder would receive 1.50 Sprott Physical Silver Trust units for each Silver Bullion Trust unit tendered in the Offer.
* * * * *


And now overnight trading in gold/silver from  Europe and Asia/plus physical stories that might interest you:

First:  Goldcore’s Mark O’Byrne
(courtesy Goldcore/Mark O’Byrne)


“Being Fed Garbage” Re Gold and Complacency Rules… For Now”

– GoldCore interview with Kerry Lutz on the Financial Survival Network
– Gradual realisation that central bank “masters of the universe”
-“We all know that bad stuff is going to happen, we just don’t know when it is going to happen”
-“The penny is beginning to drop that … we are coming very close to the end of the road”
– Prevailing wisdom that can print currencies with reckless abandon not being questioned
– We need a free market in currencies, not bail-ins and a war on cash and gold
– People blindly trust “experts” so welcome that some of them giving prudent advice re diversification
– Currencies of creditor nations – Norway, Switzerland, Singapore, Hong Kong will outperform in long term
– Mr Spreadbury of Fidelity “helped a lot of people in the mainstream who would never consider gold and silver”
– Avoid speculation, focus on diversification and owning quality assets for long term

Interview Transcript

Kerry Lutz: Mark O’Byrne, you know him well, executive director of Goldcore – a well known precious metals seller, bullion dealer, storage company across the channel is on the case. Mark hasn’t been on the show before but he is a very sage, savvy advisor on the topic of precious metals and how to protect your wealth. We’re really pleased to have him on – Mark, Welcome….

Mark O’Byrne: Hi Kerry. Thanks for having me on and for your kind words. I have enjoyed your show as well over the years. You are doing some good stuff out there so keep up the good work.

KL: Likewise, I follow your writing religiously. We all know what’s going to happen, we just don’t know when it’s going to happen but that’s going on now – when people in the mainstream finance – and Fidelity is the bedrock in the U.S. – they manage I think well in excess of a trillion dollars. When a guy like that tells you to put money in your mattress what are you supposed to think?

MOB: Yeah. It’s interesting and I think it shows that the concerns that many of us have had for a long time is percolating into the mainstream and the “smart money” who…they’ve almost been indoctrinated as well and they believed in the powers of the central banks as the masters of the universe. But some of the smart money… and as you said ….Fidelity, it doesn’t get any bigger that that, I mean they are one of the biggest mutual fund managers in the world, one of the biggest financial services companies in the worlds, they are absolutely massive.

This guy is very well respected, one of their bigger bond fund managers in the UK – about £4 billion worth of money that he manages. So for him to say that – and he wasn’t talking off the record, he actually told the Daily Telegraph.

The Telegraph, for your American listeners is , there are two papers of financial record in the UK, one is the Financial Times and the second one is the Telegraph so they are the newspapers, that people buy for markets, finance and business news. So for him to tell the Telegraph that is incredible.

He actually said specifically people need to own “physical cash” or “physical currencies” so he wasn’t even saying specifically – own physical pounds to a UK audience, he was saying physical currencies and that suggests maybe  two or three currencies, not just one currency so he appears to be speaking to global diversification there.

He also mentioned, even more unusually for a bond fund manager – he told people to own precious metals, gold and silver specifically. So its very interesting and it got picked up very widely. It went viral on the Telegraph website and saw huge traction – people sharing it on Twitter, Facebook and all the rest of it. Zero Hedge picked up on it and they got huge traction with it as well. I think it was read by 180,000 people which is massive so I think it shows the that regarding risks that are out there … the penny is beginning to drop.

These risks have been building up for years and years and we got a temporary stay and a temporary reprieve in recent months and years as they kicked the can down the road as we all know but I think people are beginning to realise we are coming very close to the end of the road.

KL: What amazes me Mark is why now, I mean for people like you and I – we have not believed in the efficacy of central banking for decades now. We’ve questioned everything these people do – the Bernanke’s, the Greenspans, the Christine Lagarde’s of the world. We’ve questioned them and their infallibility, it’s just like the infallibility of the Pope right. I mean how could you think other wise if you are a thinking person who thinks critically and questions the world around you its just like Newton lying back there, and i know this is apocryphal event, of the apple hitting him in the head and it’s like “oh gravity” like thats to me”…..?” Why are they so late to the party here?

MOB: It’s hard to know. These eureka moments…. some of them seem to be having that. Maybe deep down they didn’t really believe in the modern Keynesian Doctrine that we have today in terms of the all powerful central banks and the notion that they could just print money with reckless abandon and there would be no ramifications – because that has been very much the prevailing wisdom of recent years.

Some of them maybe were a little bit skeptical of it but they went along with it. I suppose by the very nature of it – if you are fund manager and you work in a bank you have to go along to get along. You are not going to have a job for very long if you start asking the questions that this guy has bravely gone on the record and said.

Also, markets were working in their favour and have been booming for a number of years, stock markets and bond markets as we know are at all time record highs. This sentiment allied with momentum is a powerful thing.

Its a bit like, was it Chuck Prince at Citigroup who had the expression “as long as the music keeps playing we all have to keep dancing” and i think that is the prevailing philosophy with a lot of these guys.

Some of them are beginning to ask questions and I think a lot of them see the writings on the wall and they can  almost cover their asses and say well I did warn about this. it will be interesting to see, the guy will probably never mention this again. He’s probably surprised how much traction it’s got internationally, you know.

But it also goes back to economics and the prevailing Keynesian wisdom.  Its the Keynesian-Austrian thing. There isn’t any awareness of Austrian Economics among the vast majority of the public and also these fund managers, these gods who work in various banks and central banks … the majority don’t appreciate that.

There are a few guys who do and those are the guys who have done well for their clients, particularly over the long term and they did well at the height of and during the crisis. They have done slightly less well over recent years where the stock markets have boomed and gold and silver bullion haven’t done as well.

So its interesting …they see the writing on the wall and I suppose for the rest of us, it is better late than never because hopefully he (Mr Spreadbury of Fidelity) has helped a lot of people in the mainstream who would never consider gold and silver and never have realised there were these levels of risks pertaining to bonds and cash.

I think people are led by the nose by these experts so if you get a few of these experts coming out and giving good advice, it’s actually quite a good thing …”

This transcript is the first half of the interview. Listen to the AudioHere


Today’s AM LBMA Gold Price was USD 1,175.75, EUR 1,048.93 and GBP 744.71 per ounce.
Yesterday’s AM LBMA Gold Price was USD 1,183.35, EUR 1,052.24  and GBP 749.17 per ounce.

Gold fell $7.50 or 0.63 percent yesterday to $1,177.60 an ounce. Silver slid $0.37 or 2.28% percent to $15.83 an ounce.

Gold in Singapore for immediate delivery slipped 0.2 percent to $1,176 an ounce near the end of the day,  while gold in Switzerland was again flat.

Gold inched down to a one week low as investors hope a Greek debt deal is on the horizon.  The yellow metal is seeing speculative liquidations as stock markets surge again and on renewed speculation that Fed interest rate rise could come this year.

Greece’s creditors have refused Tsipras’ proposal. In addition to that the Greek Prime Minister must sell the new austerity package to his own party, coalition partners and the people of Greece. As they say at the opera, “It isn’t over until the fat lady sings”. The Greek tragedy is set to continue …

Fed Governor Jerome Powell said yesterday that he was prepared to raise interest rates twice this year, once in September and once in December, as long as the economy performs as expected. Fed governors voice their opinion in the press but the decision to raise rates still comes to a vote and members are still divided.

China is awaiting approval from its central bank for a yuan-denominated gold fix “anytime now”, with more details about the scheme that may be revealed at an industry conference this week, noted Reuters.  The world’s top gold buyer and top gold producer is seeking to become the leading price-setter for bullion and is asserting itself at a time when the global dollar denominated benchmark, the century old London fix, is being investigated for price manipulation.

In late European trading gold is down 0.02 percent at $1,178.56an ounce. Silver is up 0.43 percent at $15.90 an ounce, and platinum is up 0.37 percent at $1,072.64 an ounce.

Breaking News and Research Here



Dave Kranzler on the corrupt silver market.
(courtesy Dave Kranzler/IRD)

Comex Silver Is The Most Corrupted Market In History

The silver paper futures open interest is now officially over a 1 billion ozs., most of which represents a naked short position in silver.   Never in the history of the markets has any futures market been this extraordinarily disconnected from the amount of underlying physical commodity that is available to deliver against those contract open interest.

The only conclusion that can be drawn is that the Fed, Treasury and big banks are implementing the most extreme market manipulation exercise ever witnessed.  I shudder to think about what catastrophe is coming at us that they know about but we don’t – yet.

“James Mc,” a valuable daily contributor to Lemetroplecafe.com’s nightly “Midas” report commented last night on the Comex silver market in comparison to the CME lumber futures market:

Total North American lumber production for 2015 (est.) is 60 billion board feet. At an average of $400 mbf that translates into $24 billion dollars. Keep in mind this excludes the rest of the world’s lumber production, which could easily be double that amount. On the other hand total world silver mine production for 2014 was estimated by GFMS to be 877 million ounces. At $16 oz. that is a total of $14 billion. Silver OI is 45.45 times greater than lumber OI. with physical silver production being only a fraction of lumber production in dollars. Lumber futures O.I would have to be 100 times greater or more to compare to the outlandish oversized silver futures. Or, put another way lumber futures would have to reflect hedging 68 billion board feet, more than the entire year’s production for North America to be scaled to silver Any arguments for a higher silver O.I due to hedging for recycled and above ground silver supply are dwarfed by the stark reality of the above figures. To say the silver market is normal is like having referred to hurricane Katrina as a passing thunderstorm.

A long-time friend of mine who works with hedge funds in NYC thinks a Comex default is coming.  If that’s the case, it would make sense that JP Morgan, HSBC and Scotia – the primary Comex market-makers and Comex gold/silver vault custodians – are amassing a record level of naked-short interest in paper silver.

Why?  Because this serves the two purposes:

1)  these banks make enormous trading profits through their illegal manipulation of the gold and silver markets.  In fact, I don’t know about HSBC and Scotia, but in some past quarters JP Morgan’s commodities trading unit has been its only cash-profitable business segment.  I suspect this was largely from illegal trading profits in gold and silver futures trading.

2)  keeping the price of silver down via illegal manipulation enables these banks to accumulate physical silver at artificially low prices.  Obviously they know the truth about the real condition of the physical market. If you put on your “think like a criminal” hat, you would use the paper to push the price of silver down using paper – taking out trading gains on the market’s volatility – and you would be accumulating a massive hoard of physical silver because, once the Comex eventually defaults, both gold and silver will soar in price but silver will soar many multiples more than gold.

The Comex is headed for a default.  This means that the long side of the open interest will be settled in cash.  Of course, it takes a force majeure to trigger the cash settlement provision in the gold and silver contracts.  I can’t wait to see the nature of that force majeure event…


We are dealing with as heinous a suppression scheme as we have had to deal with all these years. While we have to deal with the here and now, there is no doubt in my mind there will be reckoning for all of this, as James Mc posits … especially in silver. The odds grow that reckoning will occur when least expected and it will be spectacular.  – Bill “Midas” Murphy, http://www.lemetropolecafe.com


You will love this piece:  EDITORIAL
(courtesy New York Sun/GATA)

New York Sun: The Bernanke ten-spot


From the New York Sun
Tuesday, June 23, 2015

Now he tells us. The former chairman of the Federal Reserve, Ben Bernanke, is claiming in a blog post that he’s a huge fan of Alexander Hamilton.

Mr. Bernanke qualifies America’s first treasury secretary as “among the greatest of our founders for his contributions to achieving American independence and creating the Constitution alone. In addition to those accomplishments, however, Hamilton was without doubt the best and most foresighted economic policymaker in U.S. history.”

So Mr. Bernanke is opposing the demotion of Hamilton from his featured spot on the 10-dollar bill.

The irony of this is that while chairing the Federal Reserve, Mr. Bernanke traduced every principle Hamilton held dear, particularly the idea of sound money defined by Congress. It was Hamilton who wrote the first law Congress passed under the authority the Constitution grants it to coin money and regulate the value there of, and of foreign coin, and to fix the standard of weights and measures. That piece of legislation, the Coinage Act of 1792, is the final fruit of what Hamilton envisaged in respect of money and the purest record of how he thought about the dollar. …

… For the full commentary:



Another flash crash in gold/silver this morning:

(courtesy GATA/zero hedge)

Zero Hedge: Gold and silver slammed in mini-flash crash


From Zero Hedge, New York
Wednesday, June 24, 2015

Fifteen minutes after GDP data was released — showing Q1 was indeed as weak as expected and inventories suggesting Q2 will be just as weak — someone decided it was an appropriate time to dump over half a billion dollars of notional gold on the futures market. …

… For the remainder of the report:



And now Bill Holter:

Crying Wolf?

We have all from time to time tried to help others, friends and family, by pointing them toward reality.  For our troubles and efforts we have been viewed as the “squirrely” guy/gal with a tinfoil hat who see’s everything as a conspiracy.  We have lost friends and even had family cringe when holiday get togethers were planned because no one wants to be exposed to our “craziness”.  Worse than any disease or even leprosy, anyone spouting Austrian economics or even “common sense” (almost extinct today) has been shoved into the outcast corner by the mass delusional majority.  Over the last few years, “theory after theory” has become fact after FACT afterFACT!  There can no longer be any question, conspiracy to delude and defraud has run rampant and is a day to day operation in the Western world.


  Originally my thought was to write this piece about and around the perfect response, “but you do agree the government is bankrupt, right?“.  I say this because almost anyone (in the U.S.), no matter what age, sex, religion, race or financial status will generally agree with this.  For those who don’t agree, it is better to leave well enough alone, this is a subset living in their own delusional world.


  For those who do agree “the government is broke”, they are broken down into basic subsets.  There are those who “get it” fully.  There are those who know the government is broke but don’t really understand what it means or the ramifications (they can’t connect the dots).  Another group are those who agree and know in the back of their mind this is true …but they don’t REALLY believe it because they simply cannot …”it’s too awful to comprehend”.  Then, we have another group, probably the largest of all, those who agree but think it really doesn’t matter.  They may also believe no financial crisis will ever occur because “the government will never let it happen”.  Let’s talk about this group next.


  The “can’t happen here” crowd only need the dots connected for them.  I believe it is best to ask them questions in an effort to lead them to their own answer and understanding.  This is much better than lecturing or “telling” them because they will actually have to think to answer your questions.  Questions such as:
1.  if the government is broke, how will they make good on their obligations such as payrolls, Social Security, food stamps, paying the military and most importantly paying on their debt?  Forget the first four, “do you realize Treasury securities are what funds Social Security, your pension, the bank’s balance sheet which holds your money …AND what underlies the dollar itself?”!


2.  If the above doesn’t work, you might ask if the economy currently “feels good”?  Then ask, do you realize the federal government spends almost 20% of GDP (and their spending is “counted” as part of GDP).  If they are broke and have to drastically cut back on spending, will the economy not shrink by the amount the government can no longer spend?  Do you see without government spending, under any definition we would be in a depression greater than the 1930’s?


  I don’t want to go through the entire exercise but please understand, “guiding” someone to their own conclusion which happens to be correct is best done with questions, MANY OF THEM.  If you can, take two, three or even more philosophical roads to help them reach the same conclusion each time …the understanding will be that much more cemented in their mind when they finally do(hopefully) arrive!
  Switching gears just a bit, we have seen the “mentality” change somewhat over the last year or so.  Even the mainstream is showing some signs of a shift.  This “shift” has even become evident amongst and within the “old boys club”.  For example, who would have imagined Germany, Netherlands, Belgium and Austria would ever ask for their gold back?  Or Texas building its own depository and using the words “not” and “confiscate” in the legislation for proposed repatriation?


  Several very well known and at one time mainstream money managers have publicly told of the dangerous situation.  The latest is a bond manager who has gone entirely to cash, how’s this for putting a crash helmet on?


http://www.bloomberg.com/news/articles/2015-06-22/tcw-braces-for-bond-market-collapse-by-piling-the-cash-up-high  Just a few weeks ago, Bloomberg put out an article asking if China could gold back the yuan.  This was significant because no news source (other than maybe Kitco) has been as bearish and slandering regarding gold than Bloomberg. http://www.bloomberg.com/news/articles/2015-05-20/chinese-gold-standard-would-need-a-rate-50-times-bullion-s-price


  Going to the beginning and back to the top, who exactly was correct in 1999-2000?  Who was correct from 2005-2008 about an impending crisis?  The answer of course is the very same people screaming bloody murder today “the financial system will come apart from the seams”.  Are those who were correct before, now “crying wolf”?  Or are they saying the same things for the same reason and forecasting the same results as before?  “They” (we) were not crazy then and are not crazy now.  In fact, it is even much easier to see now than previous.  As a side note if you recall, we heard in late 2008 and 2009, “who could have seen it coming”?  Or, “no one could have seen it coming”.  This is dead wrong!  In fact, even within the mainstream press there was a concerted effort to silence the truth.  For example, Greg Hunter while at CNN tried to warn of the banking collapse.  He was told “don’t go there” and was rewarded by having his contract not renewed!


  “Some” saw the dotcom bubble coming, more saw and warned of the 2008 crisis coming …and even more see this one coming.  Not only are there more and louder voices today, the numbers are growing slowly but surely and even engulfing some mainstreamers who used to laugh at “us tinfoilers”!


  I know how difficult it is and has been.  The financial landscape is perverted beyond recognition and any time you open your mouth, you are proven wrong.  Gold goes down the following day along with a new high in stocks so you look “stupid”.  You are not.  “We” cannot make price, we can only tell the truth as we see it and suggest via common sense and logic the need to prepare for the worst.  As I see it, the outcome is not in any doubt and becomes clearer each day.  My fear is we are not in 2008 anymore, the coming collapse will change the world order to one unrecognizable to today.  The U.S. is in fact “broke” as we spoke of at the beginning.  The “realization” of this not only can happen but WILL happen.  Sadly, because of how badly the U.S. has treated the world over these last years, we will be given no mercy when negotiating our bankruptcy.  It will be a real live wolf at our door!


Regards,  Bill Holter
Holter-Sinclair collaboration

and now overnight trading in stocks and bonds from Asia and Europe:


1 Chinese yuan vs USA dollar/yuan strengthens to 6.2071/Shanghai bourse green and Hang Sang: green

2 Nikkei closed up by 58.61  points or 0.13%

3. Europe stocks all in the red except London’s FTSE/USA dollar index down to 95.13/Euro rises to 1.1207

3b Japan 10 year bond yield:  rises to  .47% !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 123.87/ominous to

3c Nikkei still just above 20,000

3d USA/Yen rate now well above the 123 barrier this morning

3e WTI 60.91 and Brent:  64.31

3f Gold down/Yen up

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund falls to .86 per cent. German bunds in negative yields from 3 years out.

Except Greece which sees its 2 year rate rise  to 21.63%/Greek stocks this morning falls by 4.58%/ still expect continual bank runs on Greek banks /Greek default inevitable/

3j Greek 10 year bond yield fall to to: 10.69%

3k Gold at 1177.25 dollars/silver $15.89

3l USA vs Russian rouble; (Russian rouble up 1/4 in  roubles/dollar in value) 54.27,

3m oil into the 60 dollar handle for WTI and 64 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 can spell financial disaster for the rest of the world/China may be forced to do QE!!

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9316 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0442 just below the floor set by the Swiss Finance Minister.

3p Britain’s serious fraud squad investigating the Bank of England/

3r the 3 year German bund remains in negative territory with the 10 year moving closer to negativity at +.86

3s Last Friday, another 1.8 billion ELA was raised to a maximum of 85.9 billion euros. Monday morning then saw another 1.9 euros added to the ELA as massive bank runs were the object of the day and thus the ELA stood at a maximum 87.8 billion euros.Then yesterday and today, the ELA was raised twice but the figures were not released (Reuters).The ELA is used to replace depositors fleeing the Greek banking system. The bank runs are increasing exponentially.This week 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  paid the 700 million plus payment to the IMF last Wednesday but with IMF reserve funds.  The funds are deferred to June 30.

3 u. If the ECB cuts off Greece’s ELA they would have very little money left to function. So far, they have decided not to cut the ELA but this weekend is the likely time to do it.

4. USA 10 year treasury bond at 2.39% early this morning. Thirty year rate well above 3% at 3.17% / yield curve flatten/foreshadowing recession.

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

(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)

Buy Programs Stumble After Greek Deal Proposal Goes Back To Drawing Board In Last Minute

And it started off all so well: the market, blissfully ignoring what we wrote just yesterday in Why The IMF Will Reject The Latest Greek Proposal In Just Two Numbers, was in full blown levitation mode overnight when it sent Japanese stocks to their highest close since 1996 (pre dot com) and with the Chinese central bank doing its best to keep levitating local stocks away from the abyss, pushing the SHCOMP up another 2.5%.

European shares opened small in the green, hopeful despite a Greece deal not yet being finalized. The market tried to hold its gains despite an appalling unemployment number in Finland and a blah Ifo report from Germany. These numbers began to weigh, even as the ECB’s QE program is not going to be tapered anytime soon. And then red headlines ran quoting Greece PM Tsipras saying “creditors didn’t accept Greek proposals.” Oops, market immediately got  hit, but didn’t panic.”

Euro Stoxx 50 went from flat to down 1% and is bouncing. As BBG’s Richard Breslow adds, predictably, the market is taking this as a ploy, not an end game. Of course, this is precisely the “Bear Stearns is fine” conventional wisdom that Cramer was spewing days before Bear failed because nobody could fathom how anyone can conceive of a worst case scenario. Only it isn’t nobody: we reported before of a Goldman’s “Conspiracy Theory” Stunner: A Greek Default Is Precisely What The ECB Wants.


It was Goldman’s green light that let Lehman fail. Will it be twice in under a decade?

In any event, safe-haven flows have been observed across the board heading into the North America crossover following the report posted earlier, citing Greek government official who said that Greek PM Tsipras states that Greek proposals have been rejected, which led to weakness in EUR and DAX, with Bunds rising 44 ticks immediately after the news. This comes following earlier reports from an EU official this morning who said that there is still distance between Greece and creditors ahead of today’s discussions, with limited progress made yesterday. All this meant that stocks in Europe traded lower since the open, as market participants were forced to contend with mixed reports surrounding Greece which again hinted at divisions between the country and creditors. Press reports pointed out that the IMF and German parliament still share concerns over the latest proposals.

Looking elsewhere, EU vs. UK short-end rates continued to diverge this morning, with Short-Sterling under pressure, this time
driven by hawkish comments by BoE’s Weale. The central banker said that the Bank should be ready to hike rates as soon as
August and will likely face a split over views as strong wage data points towards a tightening labour market.

Positive close on Wall Street stemming from further optimism surrounding Greece continued to support stocks in Asia, where the Nikkei-225 (+1.3%) broke above its year-2000 peak and settled at its highest level since 1996. At the same time, the ASX 200 (+0.3%) and Hang Seng (+0.2%) were led by outperformance in the energy names, following broad based strength in energy prices.

After posting its worst performance in the last 3-months, EUR staged a modest rebound, though remained in close proximity to the 1.1200 level, where a large option is said to expire at 3pm BST (NY cut). GBP also benefited from hawkish comments by BoE’s Weale and favourable interest differential flows. Consequent USD weakness, with the index up 2.2% since last Thursday supported commodity linked-currencies amid an uptick in oil prices.

WTI and Brent crude futures benefited from a weaker USD, as well as the third consecutive drawdown in API crude oil stockpiles (-3.2mln vs. Prev. -2.9mln), as indicated in the latest report after the closing bell on Wall Street yesterday. Russia continued to flex is military muscle today, with reports indicating that Russian Navy missile cruiser Moskva is in North Atlantic and is in the area to launch Vulkan test missiles. Of note, yesterday it was reported that the Russian Black Sea Fleet’s flagship, the Moskva and support ships were headed to the Atlantic. The last time they were there was in 2013.

On the US event calendar today the third revision to Q1 GDP guess and personal consumption are the only eco numbers of note. GDP is expected to improve but remain negative.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • Greek PM Tsipras states that Greek proposals have been rejected, according to a Greek government official
  • Stocks in Europe lower, as market participants were forced to contend with mixed reports surrounding Greece which again hinted at divisions between the country and creditors.
  • EU official stated this morning that there is still distance between Greece and creditors ahead of today’s discussions, with limited progress made yesterday.
  • Going forward, market participants will get to digest the release of the latest US GDP report (Q1 T), weekly DOE inventories report and the US Treasury will sell USD 35bln in 5y notes.
  • Treasury yields drop in overnight trading as Greece’s creditors handed the government revised terms for an agreement on bailout funds as Prime Minister Alexis Tsipras expressed incredulity; week’s auctions continue with $35b 5Y notes, WI yield 1.705% vs. 1.566% last month; last sold at 1.56%.
  • Greek PM Tsipras told his government that creditors haven’t accepted the country’s proposals to unlock needed aid
  • Following U.S. federal probe that ended last month with guilty pleas and $6 billion in fines regarding currency trades, the Justice Department unit behind those prosecutions is turning its sights on the $12.7 trillion U.S. Treasury market
  • The debt load of U.S. states declined in 2014 for the first time in almost three decades and probably won’t rebound this year, showing lawmakers are still reluctant to borrow even six years after the recession
  • China is proposing to scrap 75% loan-to-deposit ratio cap, according to statement on State Council’s website
  • QE shows signs of backfiring as investors obsess over market depth, the Riksbank’s bond purchases are undermining liquidity and driving Swedish yields higher
  • The exemption of some ABS from the toughest capital rules will promote the creation of simpler securitizations and attract more investors, according to the Bank of England
  • Sovereign 10Y bond yields mixed, with Greece rising 10bps; Portugal, Italy and Spain yields also slightly higher. Asian, European stocks mixed, U.S. equity-index futures drop. Crude oil and gold rise, copper drops

The remainder of the overnight news as summarized by DB’s Jim Reid


Renewed optimism for a Greece deal being made today continued to be the dominant driver for markets again yesterday as European equities moved higher to mark the largest four-day gain since January. Indeed, the Stoxx 600 rose +1.16% to cap a +3.9% move since last Wednesday’s close now. Gains were led again in Greece where the equity market finished +6.11% (including a 9% rally for banks) with the index there now 17% off the 3-year lows of last Wednesday. The DAX (+0.72%) and CAC (+1.18%) also firmed further, while the FTSE MIB and IBEX were +0.35% and +0.30% respectively. 10y Bunds bounced around over most of the session before ending 1.2bps tighter at 0.870%. It was a bit more muted in US equity markets with the S&P 500 (+0.06%) and Dow (+0.13%) a tad higher although a combination of hawkish Fed comments and mixed data, which we’ll touch on shortly, appeared to play a part.

So the focus today will turn to the Eurogroup meeting of finance ministers at 6.00pm GMT tonight. Hopes beforehand are for a Staff Level Agreement to have been reached between Greece and the Creditors with the agreement then signed off in the meeting. There did appear to be some jitters in markets yesterday after German press Suddeutsche Zeitung reported that the IMF believes that the European Commission is being too soft on Greece and that some European officials accused the Fund of not wanting a deal, although this seemed to somewhat go against comments from the IMF Chief Lagarde who told her board that she is optimistic of a deal being done this week.

Ahead of tonight’s Eurogroup, Greek PM Tsipras is due to meet with the ECB’s Draghi, EC’s Juncker and IMF’s Lagarde in a likely bid to overcome the last remaining hurdles. It seems that the gaps are now relatively small given the substantial u-turn made by Tsipras and this has become somewhat evident in the domestic political situation as tensions in the Syriza partly appear to be showing signs of flaring. This becomes increasingly more important after we learned that German parliament will not approve any deal until approval is first passed through Greek parliament, adding another layer of pressure ahead of the IMF repayments at the end of the month. Yesterday we heard Syriza lawmaker Kodelas saying that ‘personally, I cannot support such an agreement that is contrary to our election promises’, before going on to say that ‘I do not care about the consequences of my decision’. This was echoed by another Syriza party member, Sotiriou, who said the proposals ‘cannot be supported’. In yesterday’s EMR we highlighted DB’s George Saravelos’ outlook on the likely messy domestic political situation where by Tsipras will need to rely on opposition votes in order to pass and in turn lead to a change in coalition. The danger however lies in his own party for now, with the threat of a referendum in the case of approval not being gained. It’s highly likely that this will have implications for the June 30th IMF payments, with the threat of non-payment ultimately determined by the ECB’s opinion of whether or not there is enough agreement in place to warrant a raising of the T-bill cap to fund the IMF obligations.

Ahead of today’s meetings, equity markets in Asia are trading with a positive tone as we go to print. The Hang Seng (+0.13%), Kospi (+0.06%) and ASX (+0.30%) are all up, while the Nikkei (+0.54%) has just moved to its highest level since 1996. In China the Shanghai Comp (+0.91%) and Shenzhen (+0.51%) have also risen. Having traded some 2.5% down when we went to print yesterday, China equities completed the seemingly recurring theme of then completely reversing course to eventually finish up around 2% yesterday, so there’s every chance that these levels are outdated by the time they hit your inbox. Just on China, the Westpac consumer sentiment indicator for the region rose 1.2pts this morning to 112.3, a three-month high.
Away from Greece yesterday, it was a case of rising yields in the Treasury market again with the benchmark 10y rising 3.6bps to 2.410% and closing back above the pre-FOMC levels of last week. Some hawkish comments from the Fed’s Powell who said that ‘my own forecast calls for liftoff in September and for an additional increase in December’ appeared to help spark some of move higher, although he noted that a move in September was likely to be a 50-50 chance. The comments also helped support a strong day for the Dollar, with the Dollar index ending +1.17%.

It was a relatively mixed batch of data out of the US yesterday. Durable goods orders for May in particular disappointed after falling 1.8% mom (vs. -1.0% expected). Core capex orders also disappointed after the +0.4% mom print missed expectations of +0.5% while the April reading was revised down to -0.3% mom after an initial +1.0% gain. Core capex shipment orders (+0.3% mom vs. +0.5% expected) demonstrated a similar trend. There was, however, some more positive news out of the housing sector where May new home sales rose +2.2% mom (vs. +1.2% expected), helping lift the annualized rate to 546k and the most in over seven years. Elsewhere, there were some mixed readings on the manufacturing front where the flash June PMI fell 0.6pts to 53.4 (vs. 54.1 expected), while the Richmond Fed manufacturing index rose 5pts to 6 (vs. 4 expected). Finally, the FHFA house price index printed below market for April (+0.3% mom vs. +0.5% expected). Meanwhile, following on from Monday’s existing home sales data, the Atlanta Fed upgraded their GDPNow model forecast for Q2 growth to 2.0% (from 1.9%). With that, the upward revision now puts the model at more or less the bottom end of the range of the current market forecasts (2.0% to 3.7%).

Moving on, yesterday we also saw DB’s Joe Lavorgna highlight that with the weak wage and price trends that we are currently seeing in the US, the risk right now is that the Fed may look to hold off on raising rates until next year. Joe examined the relationship between the unemployment rate and inflationary wage trends over three business cycles: 1982 to 1990, 1991 to 2000 and 2001 to 2007. Joe noted that during the 1980s cycle, average hourly earnings growth surpassed 3% – the minimum rate the Fed believes is necessary to push inflation back toward 2% – when the unemployment rate was 5.5%. The pattern was the same in the long 1990s cycle, as the 3% ceiling was breached once the unemployment rate fell to 5.5%. But in the last business cycle, it was not until the unemployment rate fell to 5% that the growth in average hourly earnings surpassed 3%. Currently, wage gains are very modest, as average hourly earnings are expanding only at 2% yoy. Joe believes that this means policymakers believe that they have time before lifting rates because they do not expect unemployment to get back to 5% until the end of 2016 and so therefore supporting an argument of delaying liftoff. A soft core PCE deflator only muddles this view. An interesting relationship we think worth highlighting.

Wrapping up, data flow and specifically the PMI indicators were largely supportive in Europe yesterday. Indeed, the Euro area flash June composite reading of 54.1 was up 0.5pts from May and ahead of expectations of 53.5.

This was supported by both a +0.3pts rise for the manufacturing (52.5 vs. 52.2 expected) and +0.6pts rise for the services reading (54.4 vs. 53.8 expected). Regionally, there were improvements in the composite readings for both Germany (+1.4pts to 54.0; expected 52.7) and France (+1.4pts to 53.4; 52.0 expected). DB’s Marco Stringa noted that the synthetic non-core composite index suggests a less rosy picture for non-core countries (Italy, Spain and Ireland) with a 0.6pt fall. The data continues to support the ECB’s cautious approach and suggests little reason to change the current pace of QE purchases. Elsewhere on the data front, French business (97 vs. 98 expected) and manufacturing (100 vs. 103 expected) confidence indicators were slightly below market.

Looking at the day ahead, the German IFO survey for June will likely attract most of the market attention this morning while the final reading for French Q1 GDP is also expected. Over in the US this afternoon there will be some attention on the third reading for Q1 GDP (market currently looking for an upward revision to -0.2% while our US colleagues have a slightly more bullish 0.0% forecast) as well as the Core PCE print. Of course, Greece events will remain front and centre ahead of the Eurogroup meeting tonight.



Then early this morning:
(courtesy zero hedge)

Greece Rejects “Totally Unaccepetable” IMF Counterproposal Demanding Pension Cuts, VAT Hike

As reported earlier and as tipped here on Monday, markets will have to call off the party for now because the focus of the Greek debt deal negotiations has now shifted back to Brussels after all eyes had turned briefly to Athens on Tuesday following reports which indicated a deal in principle had been struck. Here’s what we said less than 24 hours ago:

The IMF demands no tax hikes and pension cuts. Instead it will get almost exclusively tax hikes, amounting to 92% of the proposed measures, and just a few cuts, few of which actually impact Greek pensions. In short: the proposal is not only unsustainable, it is also unenforceable, something which the Germans – already facing a third Greek bailout – will be quick to point out.


Which is why tomorrow, after Tsipras is finished with the meeting with the Troika, he will have a new homework assignment: revise the “final final” proposal and come up with much less in tax hikes, much more in spending cuts: something which the already furious hard-line elements within Syriza will have a field day with.

And that is precisely what happened. As WSJ reports, creditors have decided to stick to their “red lines” after all:

Significant divisions remain between Greece and its international creditors over measures Athens must implement before receiving desperately needed bailout aid, according to a document seen by The Wall Street Journal on Wednesday ahead of a crucial meeting of eurozone finance ministers.


Key points of disagreement are corporate taxation, the overhaul of Greece’s pension system and value-added taxes, according to the document. For instance, Greece had planned to increase corporate taxes to 29%, but in the document creditors limited increase to 28%. That may cause new budget shortfalls that need to be plugged with other measures.


The Greek government has proposed increasing pension system revenues largely by raising social-security contributions from employers and limiting early retirement.


In the document, the creditors insist on savings worth 1% of Greece’s gross domestic product by next year and also call for eliminating a supplementary payment to the poorest pensioners, known as EKAS, by the end of 2017. The


Greek proposal wanted EKAS to be phased out only between 2018 and 2020.


The creditors also continue to insist on raising funds worth 1% of GDP from VAT, up from the 0.74 proposed by Greece.

And more from MNI:

One official said that the IMF disagrees with heavy taxation in businesses and the special corporate tax and wants more spending cuts in pensions and other public sector areas. 


The International Monetary Fund sent its own version of a counter proposal to Greece’s debt talks late Tuesday, a government official has told MNI, illustrating the growing dissent among the country’s international


The new proposal, sent to Greece late Tuesday, was deemed unacceptable by the Syrzia-led government, the official said, who used a Greek expression to suggest that receiving it was like “touching fire”.

As indicated above, Athens isn’t pleased with the IMF’s position:


AFP confirms:

Put simply, the IMF has decided  that allowing Greece to wriggle from under the troika’s thumb by substituting unenforceable tax hikes for actual, sustainable fiscal reform would send the wrong message to Spain and Portugal ahead of elections this fall where Podemos in Spain and the socialists in Portugal may well score decisive victories at the ballot box.

So it’s back to square one — or square four, or five, or whatever square the negotiations were on when talks were still mired in an intractable stalemate last week.

Of course that means the terminal Greek bank run — which had already driven the Greek banking sector’s remaining deposits to a level below the Eurosystem’s total claims on Greece — will officially restart after taking a breather on Wednesday morning. Sure enough, despite reports earlier in the day that Greece had not requested an ELA increase, the ECB has now raised the limit again in anticipation of further withdrawals. ViaReuters:

The European Central Bank approved the amount of emergency funding (ELA) Athens requested for its banks on Wednesday, a banking source with direct knowledge of the decision said, without disclosing what amount Greece had asked for.


“The Bank of Greece got approval for the ELA it requested. If necessary the ECB governing council will convene again in the next 24 hours,” the source said.

So as we’ve said all along, the troika will get its pension cuts and VAT hike come hell, high water, or Grimbo, because that’s the only way to keep the Syriza germ from spreading and it’s also the only guaranteed way to ensure that any and all “radicalists” are purged from the Greek government. That is, if you thought The Left Platform was upset on Tuesday, you haven’t seen anything yet, because when Tsipras comes to parliament with a deal that looks identical to what the troika put forth months ago, political upheaval will follow in short order and either Syriza will be transformed into a party that will accept Greece’s fate as Germany’s debt serf, or Greeks will demand a new government and a Grexit — either outcome is ultimately preferable, from the troika’s perspective, to giving the rest of the EU periphery hope that austerity (or what passes for austerity in Europe) is negotiable. So, either the Greek negotiators will finally enact the “dreaded” pension cuts and VAT hike (in its originally proposed form), or else the Troika will be able to wash its hands of a Greek default and blame it all on Greek intransigence while sending a strong message to political sympathizers that they will get nothing from the institutions.

Reinforcing this point is the following from Bundesbank board member Joachim Nagel (via MNI):

Bundesbank Executive Board member Joachim Nagel said Wednesday that he opposes another debt relief for Greece at this point, arguing that such a move could encourage other EMU countries to follow the example.


A debt relief for Greece “sets the wrong incentive for other countries,”Nagel said at a conference in Frankfurt. “At this stage, a second debt relief would set the wrong incentives, especially for governments that are already weak” and struggling with growing opposition to austerity.

Then again, maybe all of this is just an elaborate attempt to hide the fact that Greece’s fate has already been decided by Mario Draghi, whose former employersuggested as much earlier this week.


And more on the rejection of the deal:

“No Deal”: Tsipras Says Creditors Did Not Accept Greek Proposal

Who could have possibly foreseen that the IMF would throw up all over the Greek “proposal”… aside from this post here “Why The IMF Will Reject The Latest Greek Proposal In Just Two Numbers” yesterday afternoon of course. In any event, moments ago Bloomberg reportedthat just as we wrote here yesterday afternoon, there is no deal and that Greek PM Alexis Tsipras told his associates that creditors not accepting equivalent fiscal measures has never happened before, according to a Greek govt official, who asked not to be named in line with policy.

Creditors “not accepting parametric measures has never happened before. Neither in Ireland, nor in Portugal, nor anywhere. This strange stance can hide two scenarios;they either don’t want an agreement or serve specific interests in Greece,” the official cited Tsipras as saying.”

As a reminder, Tsipras is meeting Wednesday with European Central Bank President Mario Draghi, International Monetary Fund Managing Director Christine Lagarde and European Commission President Jean-Claude Juncker in an effort to reach a deal before Greece’s bailout expires and about 1.5 billion euros ($1.7 billion) in payments come due to the IMF on June 30.

Here is the man himself tweeting as much and confirming that the blame game continues:

Some more comments:

The reaction across European asset classes was kneejerk lower…

… although it has since bounced back modestly as “hopes” that this final final deal, which was just scuttled, will be revised and lead to yet another favorable conclusion. They don’t call it climbing the wall of Greek rumors for nothing.

As for Tsipras suggesting that Troika does not want an agreement, he is absolutely correct. Recall “Goldman’s “Conspiracy Theory” Stunner: A Greek Default Is Precisely What The ECB Wants“… the same Goldman that blessed a Lehman bankruptcy and got precisely what it requested.

In any event, the ball is now in Greece’s court…


… also as we predicted, where either the Greek negotiators will finally enact the “dreaded” pension cuts, or else the Troika will be able to wash its hands of a Greek default and blame it all on Greek intransigence. As a further reminder, at this point it is all about who gets the blame for a “Grexident.


Germany weighs in on the matter:
(courtesy Bloomberg)

Germany Says Greece Breakthrough Far Off as Deal Terms Rejected

June 24, 2015 — 9:07 AM EDT

Greece’s Prime Minister Alexis Tsipras, right, is welcomed by European Commission President Jean-Claude Juncker, left, ahead of a meeting on Greece, at the European Commission in Brussels, on June 24, 2015, as eurozone finance ministers try to finalise a debt deal and avoid a default by Athens.

Germany downplayed the chances of an imminent deal with Greece as Prime Minister Alexis Tsipras’s government rejected the latest terms set by creditors to unlock bailout aid.

The downbeat tone from Berlin reinforced the brinkmanship at play as Tsipras met in Brussels Wednesday with the heads of the three creditor institutions: International Monetary Fund Managing Director Christine Lagarde, European Commission President Jean-Claude Juncker and European Central Bank President Mario Draghi.

“Our impression is that there’s still a long way to go,” German Finance Ministry spokesman Martin Jaeger told reporters at a regular government press briefing in Berlin. Creditor institutions have made “exceptionally generous” concessions to the Greek government, and “it’s now up to the Greek side to show some movement,” he said.

Stocks in Athens fell as Tsipras dug in over the conditions attached to any accord before heading to Brussels for talks aimed at patching together a deal before Greece’s bailout expires and about 1.5 billion euros ($1.7 billion) in payments come due to the IMF on June 30.

He took to Twitter earlier Wednesday to denounce creditors for refusing to accept his own proposals for higher taxes, and his government later rejected a counter proposal tabled by creditors, saying it differed little from an earlier document which had also been shot down.


Steen Jakobson states correctly that even if they get an extension of the second bailout deal in order to retrieve the much needed 7.9 billion in left over funds, it will need a minimum of 60 to 80 billion euros in a third bailout, something that the Europeans cannot stomach any longer.  He believes that there will be a stalemate and then an election. The politicians will finally lay out the cards for the citizens to see that it is impossible to stay in the Euro.

(courtesy zero hedge/Steen Jakobson)

Saxobank CIO Explains Why The Greek ‘Problem’ Won’t Be Solved

“Even if a deal between Greece and its creditors is struck, the problem isn’t solved,” warns Saxobank CIO Steen Jakobsen, which leaves the door open to a snap election being called shortly and a referendum on continued membership of the EU just weeks later. Debt refinancing will be the first issue, with the country needing a significant discount.But how can the country secure that, asks Jakobsen, when the government is unwilling to bring in significant reforms?




So much for a Greek deal getting “done” today, as the market had priced in for the nth countless time on Monday. Here is what happened moments ago according to Bloomberg and Reuters:


From the scene of the ongoing crime:

And so on, until the next round of buying ahead of the next rumor, until the next denial launches stocks even higher, ahead of more hopes of an imminent deal launches even more buying program, until the next round of rumors leds to new all time highs and so on, and so on…


Eurogroup Meeting Ends With No Deal

Given that the Greek delegation already left, this is hardly a surprise but…

Finland FinMin says it’s over…

It appears Greek stock investors remain convinced a deal is coming…


Last night:  Ron Paul warns the west on the seizure of Russian assets

(courtesy Ron Paul)

Ron Paul Warns Seizure Of Russian Assets Will Hasten Dollar Demise

Submitted by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

While much of the world focused last week on whether or not the Federal Reserve was going to raise interest rates, or whether the Greek debt crisis would bring Europe to a crisis, the Permanent Court of Arbitration in The Hague awarded a $50 billion judgment to shareholders of the former oil company Yukos in their case against the Russian government. The governments of Belgium and France moved immediately to freeze Russian state assets in their countries, naturally provoking the anger of the Russian government.

The timing of these actions is quite curious, coming as the Greek crisis in the EU seems to be reaching a tipping point and Greece, having perhaps abandoned the possibility of rapprochement with Europe, has been making overtures to Russia to help bail it out of its mess. And with the IMF’s recent statement pledging its full and unconditional support to Ukraine, it has become even more clear that the IMF and other major multilateral institutions are not blindly technical organizations, but rather are totally subservient lackeys to the foreign policy agenda emanating from Washington. Toe the DC party line and the internationalists will bail you out regardless of how badly you mess up, but if you even think about talking to Russia you will face serious consequences.

The United States government is desperately trying to cling to the notion of a unipolar world, with the United States at its center dictating foreign affairs and monetary policy while its client states dutifully carry out instructions. But the world order is not unipolar, and the existence of Russia and China is a stark reminder of that. For decades, the United States has benefited as the creator and defender of the world’s reserve currency, the dollar. This has enabled Americans to live beyond their means as foreign goods are imported to the US while increasingly-worthless dollars are sent abroad. But is it any wonder after 70-plus years of a depreciating dollar that the rest of the world is rebelling against this massive transfer of wealth?

The Europeans tried to form their own competitor to the dollar, and the resulting euro is collapsing around them as you read this. But the European Union was never considered much of a threat by the United States, existing as it does within Washington’s orbit. Russia and China, on the other hand, pose a far more credible threat to the dollar, as they have both the means and the motivation to form a gold-backed alternative monetary system to compete against the dollar.That is what the US government fears, and that is why President Obama and his Western allies are risking a cataclysmic war by goading Russia with these politically-motivated asset seizures. Having run out of carrots, the US is resorting to the stick.

The US government knows that Russia will not blithely accept Washington’s dictates, yet it still reacts like a petulant child flying into a tantrum whenever Russia dares to exert its sovereignty. The existence of a country that won’t kowtow to Washington’s demands is an unforgivable sin, to be punished with economic sanctions, attempting to freeze Russia out of world financial markets; veiled threats to strip Russia’s hosting of the 2018 World Cup; and now the seizure of Russian state assets.

Thus far the Russian response has been incredibly restrained, but that may not last forever. Continued economic pressure from the West may very well necessitate a Sino-Russian monetary arrangement that will eventually dethrone the dollar. The end result of this needless bullying by the United States will hasten the one thing Washington fears the most: a world monetary system in which the US has no say and the dollar is relegated to playing second fiddle.


Russia’s lack of response to the seizing of assets has ended.  By raising the gas prices to the Ukraine, their economy will spin out of control. This is a huge dagger into the heart of their economy.

(courtesy Sputnik news/zero hedge)

Putin Strikes Back: Cuts Ukraine Gas Discount

We had wondered at the relative lack of response by Russia to extended sanctions and asset freezes in Europeand now we see the first major move. Having confirmed new counter-sanctions this morning, Russian President Vladimir Putin just threw The IMF (US taxpayers), and Ukraine’s ‘American’ finance minister under the bus…

“Moscow can no longer give Ukraine gas discounts due to the current drop in oil prices.”


The price must be on level of other countries like Poland, he added.

While Christine Lagarde has made it clear she will spend Other People’s Money in Ukraine (but not Greece) no matter whether Ukraine defaults or not, one suspects the end of the gas discount will crush IMF expectations for Ukraine growth and make it increasingly impossible for her to justify throwing worse money after bad…

Does Ukraine have any gold left with which to grease the skids?

*  *  *

With potential Greek pivots still on the table (as The IMF shuns Greece’s offer) and the odd new allies in The Middle East, it appears this economic sabre-rattle will once again boomerang back to Washington as Ukraine goes from failed state to failed-er state.

*  *  *

Source: SputnikNews


French unemployment hits record highs for 80th consecutive month of rising joblessness.  Europe is imploding!!
(courtesy zero hedge)

French Unemployment Hits Record High: 80th Consecutive Month Of Rising Joblessness

While French president Hollande is busy “grilling” (in the words of The Local) president Obama over the latest US “spying on its allies” snafu, the French economy continues to deteriorate and according to the latest French labor ministry data, in May the number of French jobseekers rose by another 0.5%, or 16,200, to 3.552 million, 10k more than expected, and a new all time high.

The number was 5%, or 168,500 greater, compared to a year ago as the so-called European recovery has yet to have a positive impact on what is supposed to be Europe’s second strongest economy.

Most troubling: this is the 80th consecutive month of increasing Y/Y unemployment, yet stocks are delighted of course.



Labour Minister Francois Rebsamen said Wednesday that  that “by the end of the year we will see, I hope, a phase of  stabilization followed by a decline in the number of jobseekers.”

Well, there is still hope… at least until the ECB runs out of Bunds to monetize and starts buying it up next.



Oil related stories

(courtesy zero hedge)

Stocks Jump, Oil Dumps After DOE Reports Bigger Than Expected Inventory Draw, Production Rises (Again)

Against expectations of a 2.0 mm bbl inventory draw, DOE reports a substantial 4.93mm bbl draw (double last week’s draw) extending the streak of inventory drawdowns to 8 weeks. Crude production overall raose 0.16% to near a new cycle record high. The reaction – oil algos ran stops at highs then dumped… stocks just ripped – which allmakes perfect sense.


Inventories have fallen for 8 straight weeks…


But production near a new record high…


And the reaction… Crude down, stocks up


As we continually state:  Russia and China are now  joined at the hip:

In Historic Shift, Russia Overtakes Saudi Arabia As China’s Number One Oil Supplier

Over the course of the last seven months, we’ve painstakingly documented the quiet death of petrodollar mercantilism, the USD recycling system and fixture of the post-war global economic order that has served to underwrite decades of dollar dominance.

As a reminder, the petrodollar system works like this: oil export countries recycle the dollars they receive in exchange for their oil exports by purchasing more USD-denominated assets, boosting the financial strength of the reserve currency, leading to even higher asset prices and even more USD-denominated purchases, and so forth, in a virtuous (especially if one holds US-denominated assets and printed US currency) loop.

The flow of petrodollar reserves into financial markets peaked in 2006 and turned negative for the first time last year when Saudi Arabia famously Plaxico’d itself (and the US) by glutting the world with crude, in an attempt to crush Putin, and subsequently, to take out the US crude cost-curve.

And while the recent drawdown in oil exporters’ petrodollar reserves suggests Saudi Arabia’s actions were sufficient in and of themselves to catalyze the system’s demise, the US has accelerated the process by backing economic sanctions on Russia which, starting this year, began to settle oil and natural gas exports to China in yuan, marking what we have hailed as the  the intersection of two critically important themes that have far-reaching geopolitical and economic consequences: 1) the death of petrodollar mercantilism, and 2) the idea of yuan hegemony.

In “The PetroYuan Is Born: Gazprom Now Settling All Crude Sales To China In Renminbi”, we argued that as economic ties between China and Russia deepen (thanks to billions in currency swap lines and the construction of the new Western gas line which will deliver an additional 30bcm/y to China on top of the 38bcm/y which will flow through the “Power of Siberia” line once operational) Beijing could increasingly look to Moscow to meet China’s energy needs. This would of course only serve to further de-dollarize the global energy trade, dealing yet another blow to the petrodollar system. Sure enough, Russia has, for the first time in history, overtaken Saudi Arabia as China’s top oil supplier. FT has more:

Russia was China’s largest supplier of crude oil for the first time on record in May, as Moscow looks beyond Europe for customers and grows its ties in the east.


The country leapfrogged Saudi Arabia, the world’s largest oil exporter, sending almost 930,000 barrels a day to China, up 21 per cent since April, according to customs data published on Tuesday.


Sino-Russian ties have warmed as sanctions over the conflict in Ukraine have strained Moscow’s relations with the west.


Analysts said the data were the result of a string of oil-for-loan deals that China, which is in the process of overtaking the US as the world’s biggest importer of crude, has signed with Russian oil companies including state-backed Rosneft.


“Russian imports are likely to stay high over the next several years as these long-term crude supply contracts kick in,” said Amrita Sen, head of oil research at Energy Aspects in London.


“By our records, which started in 2007, this is the first time Russia is China’s top crude supplier,” she added.



“This trend only depicts the inevitable problem that Middle Eastern producers are going to face in China,” said Ed Morse, Citigroup’s global head of commodities research.


Loan-for-oil deals with Russia, as well as other countries such as Brazil, will “make it more difficult for Saudi Arabia, Iraq and others to compete for market share in China”, he added. Additional oil from Iran if sanctions are lifted will only increase the struggle.

*  *  *

Make no mistake, Europe’s move to extend economic sanctions on Russia into next year and the recent attempt by Belgium, France, and Austria to freeze Russian assets in an effort to enforce the unenforceable Yukos settlement, serve to drive Russia and its vast energy reserves further away and provide more incentives for Moscow and China to de-dollarize the global energy trade, facilitating both the demise of the petrodollar and the ascension of the yuan in the process.


And now for your more important early morning currency and Asian and European bourse results: 


Euro/USA 1.1207 up .0034

USA/JAPAN YEN 123.87 down .015

GBP/USA 1.5764 up .0027

USA/CAN 1.2305 down .0018

This morning in Europe, the Euro rose by a tiny 34 basis points, trading now just above the 1.12 level at 1.1207; Europe is still reacting to deflation, announcements of massive stimulation, a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, a possible default of Greece and the Ukraine, rising peripheral bond yields and today falling bourses.

In Japan Abe went all in with Abenomics with another round of QE purchasing 80 trillion yen from 70 trillion on Oct 31. The yen continues to trade in yoyo fashion as this morning it settled up again in Japan by 2 basis points and trading just above the 123 level to 123.05 yen to the dollar.

The pound was again up this morning as it now trades just below the 1.58 level at 1.5764, 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 18 basis points at 1.2305 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 1.0489 to the Euro, trading well below 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  58.61  points or 0.28%

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

2/ Asian bourses mostly in the green … Chinese bourses: Hang Sang green (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: $1177.25


Early Wednesday morning USA 10 year bond yield: 2.39% !!! down 2 in basis points from Tuesday night and it is trading just above  resistance at 2.27-2.32% and no doubt still setting off massive derivative losses.

USA dollar index early Wednesday morning: 95.13 down 27 cents from Tuesday’s close. (Resistance will be at a DXY of 100)

This ends the early morning numbers, Wednesday morning

And now for your closing numbers for Wednesday:

Closing Portuguese 10 year bond yield: 2.75%  par in basis points from Tuesday ( still very ominous/and dangerous with an accident waiting to happen)

Closing Japanese 10 year bond yield: .46% !!! down 1 in basis points from Tuesday/very ominous

Your closing Spanish 10 year government bond, Wednesday, par in basis points  (still very ominous)

Spanish 10 year bond yield: 2.11% !!!!!!

Your Wednesday closing Italian 10 year bond yield: 2.12% down 2 in basis points from Tuesday: (very ominous)

trading 1 basis point higher than Spain.



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

Euro/USA: 1.1207 up .0033 ( Euro up 33 basis points)

USA/Japan: 123.88 up  .0160 ( yen down 2 basis points)

Great Britain/USA: 1.5705 down .0033 (Pound down 33 basis points)

USA/Canada: 1.2388 up .0065 (Can dollar down 65 basis points)

The euro rose by a small amount today. It settled up 33 basis points against the dollar to 1.1207 as the dollar traded in all directions  today against  the various major currencies. The yen was down by 2 basis points and closing well above the 123 cross at 123.88. The British pound lost some ground today, 33 basis points, closing at 1.5705. The Canadian dollar lost some ground against the USA dollar, 65 basis points closing at 1.2388.

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: 2.37% down 4 in basis point from Tuesday// (just below  the resistance level of 2.27-2.32%)/ and ominous

Your closing USA dollar index:

95.24 down 17 cents on the day


European and Dow Jones stock index closes:

England FTSE up 9.93 points or 0.15%

Paris CAC down 12.33 points or 0.24%

German Dax down  71.28 points or 0.62%

Spain’s Ibex down 80.60 points or 0.71%

Italian FTSE-MIB down 124.18 or 0.53%


The Dow down 178.00  or 0.98%

Nasdaq; down 37.68 or 0.73%


OIL: WTI 60.24 !!!!!!!



Closing USA/Russian rouble cross: 54.30  down 1/2  rouble per dollar on the day


And now for your more important USA stories.

NY trading for today:

Icahn Frets, Fed Threats & Greek Regrets Send Stocks Sliding

It had to be this…


Between Carl Icahn’s frets over bubbles, Fed threats over rate hikes no matter what, and Greek regrets over unacceptable EU creditor terms, stocks just could not hold on to hope gains…


From The FOMC Statement, stocks are still green…


On the day Trannies were spanked… after ramping on DOE inventory data as algos latched on to oil idiocy…


VIX jumped from an 11 handle yesterday to a 13 handle today…


Trannies are back in correction…


Dow broke thru the 50DMA and tested the 100DMA…


It’s been a volatile week… (but remember everyone told you that Greece doesn’t matter and is priced in…)


NFLX pumped and dumped a few more retail muppets to losses today…


Deja Vu all over again from the last NFLX stock split?


AAPL was the oinly Dow stock green – thanks to Carl Icahn saying he has not sold any stock…


Greek stocks appear to still believe… (still up 7% on the week!?)


Treasury yields slid lower after 2 big selling days…Notice that after the big deals yesterday we rally in bonds today as rate lock pressure lifts…


The USDollar limped lower with modest EUR strength happening after the Greek deal appeared to fall through…


Commodities were a mixed mess – an early slam in precious metals was bid back then a EU close collapse in Crude and copper…


Biggest down day in Crude in 3 weeks…


One quick question – if Icahn is right that HY is in a bubble, then WTF are stocks in again?


Charts: Bloomberg

Bonus Chart: The Macro Bounce Is Over…

Bonus Bonus Chart: “that’s what makes a market”

We now have the final Q1 revision in GDP and it confirms a negative .2%.  It is the 3rd negative reading in a quarter starting from 2011:
(courtesy zero hedge)

Final Q1 GDP Revision Confirms 3rd Negative GDP Quarter Of The “Recovery”, Inventory Build Up Flashing Red

Just as consensus had expected, after printing at -0.7% in the first revision to Q1 GDP, the final revised GDP print for the March 31-ended quarter came in at -0.2%, confirming the third negative GDP quarter in one recovery cycle since 2011 (all of which have come in the first quarter of the year as global winter cooling fans will have you know)- the first time this has happened since the 1950s.

The breakdown by components:

According to the BEA, which has yet to implement double seasonally adjusted data so that every report is favorable no matter how bad it is, ‘the decrease in real GDP in the first quarter primarily reflected negative contributions from
exports, nonresidential fixed investment, and state and local government spending that were partly offset
by positive contributions from PCE, private inventory investment, and residential fixed investment.
Imports, which are a subtraction in the calculation of GDP, increased.”

But the biggest surprise is what we have been saying for months, namely the relentless build up in inventories:

The change in real private inventories added 0.45 percentage point to the first-quarter change in real GDP after subtracting 0.10 percentage point from the fourth-quarter change. Private businesses increased inventories $99.5 billion in the first quarter, following increases of $80.0 billion in the fourth quarter and $82.2 billion in the third.

it is so bad that even the world’s biggest permabull, Joa Lavorgna is warning that the upcoming inventory liquidation…

… will be bad. How bad? Well, it may well be the catalyst that finally tips the US into the next recession as we showed over the weeeknd.



If one removes the higher utilities, removes the large inventory gains and then removes the higher spending on Obamacare, the GDP would have been negative 1.7%

Excluding Obamacare And The “Harsh Winter”, Q1 GDP Tumbled -1.4%


It is somewhat ironic that even as reporters posing as economists, reporters posting as reporters, and even the US department of truth and failed weathermen posing as the Bureau of Economic Analysis decided to blame the “harsh winter” for the collapse in GDP, according to the BEA’s own GDP report, real Q1 GDP which printed at -0.2% actually benefited from the cold weather as a result of Utilities adding 0.59% to the bottom line GDP in the quarter.

But wait, because if it wasn’t for that now traditional “contributor” to the US economy, the mandatory tax better known as Obamacare, and which was the primary contributor to the 0.62% in healthcare contribution to GDP, Q1 GDP would have tumbled by a consolidated -1.4%.

Finally, if one also excludes the 0.45% contribution from the now ridiculous addition in inventories which even Joe Lavorgna has noticed and is warning will result in weaker growth in the future…

… Q1 GDP would have been -1.9%.

So if one excludes just three items: Obamacare, the “harsh winter”, and near record inventory re-stocking in anticipation of a spending deluge that never comes, Q1 GDP would have tumbled nearly 2.0%.


And this is why a recession-level inventory liquidation is imminent, one that could on its own push the US into recession:


So, bring on the rate hikes?
(courtesy zero hedge)

Stocks Slide As Fed Warns “Not Prepared To Wait For Market”

With the US equity market jerking around on every headline (having jumped on DOE inventories?!), reports from MNI that the FOMC majority is not prepared to wait indefinitely for market participants to be fully on board, appear to have taken the shine off the exuberance. It seems yesterday’s warning from Jerome Powell that there will be 2 rate hikes this year did not stall the stock bubble enough and so more “officials” leaked more information today.

As MarketNews reports, Fed officials have let it be known they realize they can’t avoid all volatility and are prepared to move when they believe they have met two main conditions for “liftoff.”

The Deutsche Boerse publication notes that the Fed has done everything it can to facilitate communication with markets, “including FOMC statements, press conferences, quarterly economic forecasts, Congressional testimony and speeches by key policymakers” to convey how the Fed perceives progress toward fulfilling the two conditions.

However, MNI is told the FOMC majority is not prepared to wait indefinitely for market participants to be fully on board.

MNI had previously reported on May 14, that Fed officials are highly sensitive to financial markets but are determined not to be ruled by them. “As much as the Fed would like to be in sync with markets and avoid excessive volatility, there is a sense it cannot be cowed by the markets into indefinitely delaying liftoff.”

Needless to say, for now the Fed has been all talk and no hike, and any claims it won’t be “cowed” by markets are nothing more than a sad joke and proof of just how cornered the Fed is by the very asset bubble it itself has blown.

Well that is all for today

I will see you Thursday night.



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