April 29b/Gold and Silver offer a full court press against the bankersas gold rises almost $24.00 and silver up $.24/USA/Yen continues to falter with yen up another 1.74 yen per dollar: this breaks the backs of the yen carry traders/The National Chicago PMI falters again this month/

Good evening Ladies and Gentlemen:

Gold:  $1,289.40 up $23.60    (comex closing time)

Silver 17.79  up 24 cents


In the access market 5:15 pm

Gold $1293.20

silver:  17.86


 Today is the first time in maybe 4 years that the bankers were unsuccessful in manipulating the gold/silver market during options expiry week.  They lost big time. The price of gold rose by almost 24 dollars and the bankers supplied the necessary paper to keep gold from going off the charts.  Silver was really on fire rising close to 18 dollars before the bankers dosed the flames, such that they can regroup and decide what to do on Monday.  The OI for gold and silver are at multi year years despite the low price for both metals.On first day notice a rather large 28 million oz of silver is standing and for the first time in over 2 years, the whole silver OI complex did not contract.  In gold, the total amount of tonnes of gold standing, in a non active month total 5.67 tonnes which is huge.We must wait to see if the holders will only accept gold and not fiat as the month progresses.
In currencies, the USA/Yen collapsed again with the yen rising to 106.40 on closing, a yen gain of 1.7 yen per dollar.  Those yen carry traders who have so far not been wiped out will surely feel the mighty stick of margin calls as they must settle by Monday morning.

Let us have a look at the data for today


At the gold comex today,on first day notice we had a good delivery day, registering 25 notices for 2500 ounces for gold,and for silver we had 783 notices for 3,915,000 oz for the non active April delivery month.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 225.51 tonnes for a loss of 77 tonnes over that period


In silver, the open interest rose by a tiny  207 contracts up  to 203,677 despite the fact that the price was silver was way up to the tune of  26 cents with respect to yesterday’s trading. In ounces, the OI is still represented by 1 over BILLLION oz (1.01 BILLION TO BE EXACT or 145% of annual global silver production (exRussia &ex China) We are now within spitting distance of all time highs for OI with respect to silver

In silver we had 783 notices served upon for 3,915,000 oz.

In gold, the total comex gold OI ROSE by a gigantic 23,385 contracts, UP to 525,414 contracts AS  the price of gold was UP $15.90 with THURSDAY’S TRADING(at comex closing). You can just imagine what the OI for gold and silver will be like on Monday. Remember we are always 24 hours back in OI ( i.e. real OI for Friday will be received on Monday)

We had no change in tonnes of gold inventory at the GLD, thus the inventory rests tonight at 804.14 tonnes.Our 670 tonnes of rock bottom inventory in GLD gold has been broken. It looks to me that China has taken the last amounts of physical gold from the GLD. I guess the only place left for China to receive physical gold, after they deplete the GLD will be the FRBNY and the comex.   In silver’s SLV,we had no change in silver inventory.  Thus the inventory rests at 335.580 million oz.


First, here is an outline of what will be discussed tonight:

1. Today, we had the open interest in silver rise by only 207 contracts up to 203,677 despite the fact that the price of silver was UP by a huge 26 cents with THURSDAY’S trading. The gold open interest ROSE by A GIGANTIC 23,385 contracts AS  gold ROSE by $15.90 YESTERDAY. Somebody big is standing FOR SILVER and surrounding the comex with paper longs ready to ponce once called upon to take out physical silver. Also the bankers are resolute in supplying non backed gold paper but they do not want to supply more silver paper.

(report Harvey)

2 a) Gold trading overnight, Goldcore

(Mark OByrne)


i)Late  THURSDAY night/ FRIDAY morning: Shanghai closed DOWN BY 7.26 POINTS OR 0.25%  /  Hang Sang closed DOWN 320.98 OR 1.50%. The Nikkei closed FOR HOLIDAY  . Australia’s all ordinaires  CLOSED UP 0.51% AS RESOURCE STOCKS DOING WELL. Chinese yuan (ONSHORE) closed DOWN at 6.4855.  Oil ROSE  to 46.45 dollars per barrel for WTI and 48.00 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.4885 yuan to the dollar vs 6.4855 for onshore yuan.



see  trading overnight


This is scary!! China in this latest USA-China escalation, Beijing denies a USA aircraft carrier access to a Hong Kong harbour:

( zero hedge)


i)The head of Deutsche Bank’s integrity committee, a lawyer, has been fired due to him being overzealous!

( zero hedge)


The real issue surrounding the globe:  huge debt, not only at the sovereign level but also the corporate level.  Debt to GDP rises to astronomical heights with respect to sovereigns like Japan,  China,  Greece Italy and the USA.  If we take  China, the total debt to GDP is 350%.  Japan it is 450%.  This is a runaway train ready to crash:

( Guy Hasselman/Scotia Bank)

 ii)This is something to watch.  When the Yen/South SAfrican Rand reaches high levels, it generally means crisis time:  previous shocks where the cross was at all time highs;

9.11, Enron, and Lehman default:
( zero hedge)


i)Due to the higher prices for oil, USA shale companies are back in business and pumping out more oil.  Now OPEC in response will also boost exports to near record levels trying to get them out of business

( zero hedge)

ii)And that sends the message to dump oil:

( zero hedge)

iii Rig counts decline and yet crude cannot climb:

(courtesy zero hedge)


i)Gold and silver skyrocket during the night/trading overnight

(zero hedge)

ii)Today’s commentary from Alasdair Macleod: a very important read as Alasdair believes it is in the interest of Saudi Arabia to sell its 5% stake in Aramco to China and in return, China removes a big block of its unwanted dollars.

( Alasdair Macleod)

iii)This will be another dagger into the heart of the USA dollar:  Russia is to price its oil in Roubles:( Bloomberg/GATA)

iv)For your interest…explorers hunting for gold in the Egyptian desert: i.e. ancient sites where gold may be buried:

( NYTimes/GATA)


i)In the USA the consumer is 70% of GDP.  With the latest results, savings rate rose while spending disappointed again.  The consumer has reached peak debt!! and cannot spend anymore

( zero hedge)


ii)the all important Chicago National manufacturing PMI tumbles again due to lack of orders.  This is a very significant index as it measures manufacturing at the national level and mfg is collapsing!

( zero hedge)
iii)At first blush, the Atlanta Fed reveals Q2 GDP at 1.8% which is 1/2% below Wall Street consensus.  This number will be lowered in the next few months as the financial scene inside the USA deteriorates:
( zero hedge)

iv)The Fed just found its next excuse not to raise rates:  BREXIT.

For the first time, BREXIT takes a lead over staying in the EMU:
( zero hedge)

v)I have highlighted this to you on countless occasions but it is worth repeating;

all of the net corporate debt has gone to buy up stock not to foster growth:
( zero hedge)

vi)The following is interesting:  The USA treasury, the biggest manipulator of them all, gives explicit warnings to China, Japan,South Korea, Taiwan and Germany not to devalue their currencies: I understand the first 4 countries but Germany?  It does not have a currency, it is part of the EME  (Euro).  The key country named , of course is China.  Actually it was China that warned the USA that if the Americans raised their interest rate, then China would devalue!

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE THROUGH THE ATMOSPHERE,  to an OI level of 525,414 for a GAIN of 23,395 contracts AS the price of gold UP $15.90 with respect to THURSDAY’S TRADING. We are now entering the NON active delivery month of MAY. For the past two years, we have strangely witnessed two interesting developments and we have generally seen two phenomena happen respect to the gold open interest:  1) total gold comex collapses in OI as we enter any delivery month  and 2) a continual drop in the amount of gold standing in that month as that month progresses . The month of May saw its OI fall by 200 contracts down to 1823. The next big active gold contract is June and here the OI rose by 19,431 contracts up to 390,097. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was good at 254,687. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was good at 242,254 contracts. The comex is not in backwardation.

Today we had 25 notices filed for 2500 oz in gold.


And now for the wild silver comex results. Silver OI ROSE by a tiny 207 contracts from 203,470 up to 203,677 DESPITE THE FACT THAT the price of silver was UP quite nicely by 26 cents with THURSDAY’S TRADING. For the first time in over 2 years, we have not witnessed a liquidation of open interest as we enter first day notice .  The next active contract month is May and here the OI FELL by only 5887 contracts DOWN to 5603. This level is exceedingly high and thus we have 2 million oz standing for the May active contract month  . The volume on the comex today (just comex) came in at73,488 which is extremely high with minimal rollovers. The confirmed volume yesterday (comex + globex) was AGAIN HUGE AT 100,941. Silver is not in backwardation. London is in backwardation for several months.
We had  783 notices filed for 3,915,000 oz.

MAY contract month:

INITIAL standings for MAY

Initial Standings for MAY
April 29.
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  nil  100.01 OZ


Deposits to the Dealer Inventory in oz NIL
Deposits to the Customer Inventory, in oz  NIL


No of oz served (contracts) today 25 contracts
(2500 oz)
No of oz to be served (notices) 1798 contracts

179800 oz

Total monthly oz gold served (contracts) so far this month 25 contracts (2500 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month   nil
Total accumulative withdrawal of gold from the Customer inventory this month  100.01 OZ

Today we had 0 dealer deposits

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

total dealer deposits: 0

Today we had 0 customer deposits:


total customer deposit:  NIL oz

Today we had 0 customer withdrawals:

Total customer withdrawals:  nil


Today we had 2 adjustments:

i) Out of JPMorgan:  542.37 oz of gold was removed from the dealer and this landed into the customer account of JPM and will be deemed a settlement

ii) Out of Scotia: 1183.317 oz of gold was removed from the dealer Scotia and this landed into the customer account of Scotia: and this is deemed a settlment

in tonnage: .205 tonnes settled.


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 25 contracts of which 0 notices was stopped (received) by JPMorgan dealer and 8 notices were stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the MAY contract month, we take the total number of notices filed so far for the month (25) x 100 oz  or 2500 oz , to which we  add the difference between the open interest for the front month of MAY (1823 CONTRACTS) minus the number of notices served upon today (25) x 100 oz   x 100 oz per contract equals 182,300 oz, the number of ounces standing in this non active month.  This number is huge for May. Let us see if this number remains constant throughout themonth
Thus the initial standings for gold for the MAY. contract month:
No of notices served so far (25) x 100 oz  or ounces + {OI for the front month (1823) minus the number of  notices served upon today (25) x 100 oz which equals 182,300 oz standing in this non  active delivery month of MAY(5.6702 tonnes).
Since the comex allows GLD shares to be used for settling, it may take quite a while for the physical gold to enter the comex vaults.  So far I have seen little evidence of any settling of contracts but I will continue to monitor it for you. 
We thus have 5.6702 tonnes of gold standing for MAY and 20.000 tonnes of registered gold for sale, waiting to serve upon those standing.  The bankers are still doing their best in cash settling as there is not enough registered gold to satisfy those that are standing.
We now have partial evidence of gold settling for last months deliveries We now have 5.6702 TONNES FOR MAY + 12.3917 tonnes (April) +2.2311 tonnes (March) + 7.99 (total Feb)- .940 (probable delivery on March 1) tonnes -.0434 tonnes (March 11,12,17,18) + March 31: 1.2470 and then  April 1,2: – .0006 tonnes  and last week April 16 .3203 and April 22 .(0009 tonnes) + april 29  .205 tonnes  = 24.5652 tonnes still standing against 20.000 tonnes available.  .
Total dealer inventor 636,503.508 oz or 19.7979 tonnes
Total gold inventory (dealer and customer) =7,250,269.882 or 225.51 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 225.51 tonnes for a loss of 77 tonnes over that period. 
JPMorgan has only 21.15 tonnes of gold total (both dealer and customer)
And now for silver

MAY INITIAL standings

 april 29.2016

Withdrawals from Dealers Inventory nil
Withdrawals from Customer Inventory 647,973.598 oz


Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory 743,657.855 oz



No of oz served today (contracts) 783 contracts

3,915,000  oz

No of oz to be served (notices) 4820 contracts


Total monthly oz silver served (contracts) 783 contracts (3,915,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month nil oz
Total accumulative withdrawal  of silver from the Customer inventory this month  647,973.598 oz

today we had 0 deposits into the dealer account

total dealer deposit: nil oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil


we had 3 customer deposits:

i) Into CNT: 300,980.275 oz

ii) Into Brinks: 300,139.750 oz

Into Scotia; 142,537.830 oz

Total customer deposits: 743,657.855 oz.

We had 2 customer withdrawals

i) Out of Delaware; 47,974.298 oz

ii) Out of JPMorgan: 599,99.300 oz


total customer withdrawals:  647,973.598  oz



 we had 0 adjustments

The total number of notices filed today for the MAY contract month is represented by 783 contracts for 3,915,000 oz. To calculate the number of silver ounces that will stand for delivery in May., we take the total number of notices filed for the month so far at (783) x 5,000 oz  = 3,915,000 oz to which we add the difference between the open interest for the front month of MAY (5603) and the number of notices served upon today (783) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the MAY contract month:  783 (notices served so far)x 5000 oz +(5603{ OI for front month of April ) -number of notices served upon today (783)x 5000 oz  equals 28,015,000 oz of silver standing for the MaY contract month.
Total dealer silver:  31.957 million
Total number of dealer and customer silver:   151.779 million oz
The open interest on silver is now close an all time high with the record of 206,748 being set in the last week of April. 
The total dealer amount of silver remains at multi year low of 31.957 million oz.
At 3:30 pm we get the COT report which gives position levels of our major players.
This week will no doubt be a dandy.  Let us see what it brings:
Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
288,173 67,316 46,236 116,445 356,553 450,854 470,105
Change from Prior Reporting Period
-2,970 -6,990 1,996 -1,298 -1,311 -2,272 -6,305
172 96 86 42 57 256 201
Small Speculators  
Long Short Open Interest  
47,030 27,779 497,884  
-3,175 858 -5,447  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, April 26, 2016
Our large specs:
Those large specs which have been long in gold strangely pitched a large 2970 contract from their long side.
Those small specs that have been short in gold correctly covered 6990 contracts from their short side.
Our Commercials
Those commercials that have been long in gold pitched 1,298 contracts from their long side.
Those commercials that have been short in gold covered 1,311 contracts from their short side ??
Our Small Specs:
Those small specs that have been long in gold pitched 3175 contracts from their long side
Those small specs that have been short in gold added 858 contracts to their short side.
The commercials go net short by a tiny:13 contracts
I believe the figures are a little far fetched.
And now for our silver COT:
Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
99,774 21,001 20,826 56,700 148,002
4,786 -2,559 5,054 2,748 9,966
109 59 45 33 43
Small Speculators Open Interest Total
Long Short 206,748 Long Short
29,448 16,919 177,300 189,829
-350 -223 12,238 12,588 12,461
non reportable positions Positions as of: 167 130
Tuesday, April 26, 2016   © SilverSeek.com
These figures are a little more believable
Our large specs:
Those large specs that have been long in silver added 4786 contracts to their long side
Those large specs that have been short in silver covered 2559 contracts from their short side.
Our commercials
Those commercials that have been long in silver added 2748 contracts to their long side
Those commercials that have been short in silver added a whopping 9966 contracts to their short side.
Our small specs:
Those small specs that have been long in silver added 1263 contracts to their long side
Those small specs that have been short in silver covered 929 contracts from their short side.
Commercials go net short by 7,218 contracts and that means the bankers are ready to raid. Remember that these figures are up to Tuesday, April 26.2016.  The OI went nuts these past 3 days so I would wager that the commercials went on a continued rampage of supplying non backed paper short.
And now the Gold inventory at the GLD
April 29/no change in gold inventory at the GLD/Inventory rests at 804.14 tonnes
April 28/we gained 1.49 tonnes of gold at the GL/Inventory rests at 804.14
April 27/no change in gold inventory at the GLD/rests at 802.65 tonnes
aPRIL 26/ a withdrawal of 2.38 tonnes of gold/inventory rests at 802.65 tonnes
April 25.2016: no change in gold inventory/rests tonight at 805.03 tonnes
April 22/ no changes in gold inventory/rests tonight at 805.03 tonnes
April 21/no change in gold inventory/rests tonight at 805.03 tonnes
April 20/no change in gold inventory/rests tonight at 805.03 tonnes
April 19./we had a huge withdrawal of 7.43 tonnes from the GLD/Inventory rests tonight at 805.03 tonnes
April 18.2016/a huge addition of 6.38 tonnes of gold  in gold inventory at the GLD/Inventory rests at 812.46
April 14/another big change in gold inventory at the GLD/, a withdrawal of 3.26 tonnes/Inventory rests at 806.82 tonnes
April 13./another withdrawal of 5.06 tonnes of gold from the GLD/no doubt this gold was used in the raid/Inventory rests at 810.08 tonnes
April 12/another huge withdrawal of 2.67 tonnes of gold from the GLD and again despite the rise in gold. The boys must be desperate to get their hands on some physical.
Inventory rests at 815.14 tonnes.


April 29.2016:  inventory rests at 804.14 tonnes



Now the SLV Inventory
April 29.2016/no change in silver inventory at the SLV/Inventory rests at 335.580
April 28/no change in silver inventory at the SLV/Inventory rests at 335.580 million oz
April 27/we had another addition of 856,000 oz into the SLV/Inventory rests at 335.580
aPRIL 26/no change in silver inventory at the SLV/Inventory rests at 334.724 million oz.
April 25.2016/ No change in silver inventory/rests tonight at 334.724 million oz.
April 22/ no changes in silver inventory/rests tonight at 334.724 million oz
April 21/no change in silver inventory/rests at 334.724 million oz/
April 20/no change in inventory/rests at 334.724 million oz
April 19./we had a huge inventory deposit of 1.437 million oz/inventory rests at 334.724
April 18./no change in inventory at the SLV. Inventory rests at 333.297 million oz
April 15./we had a withdrawal of 951,000 oz of silver from the SLV/Inventory rests at 333.297
April 14./no change in inventory at the SLV/Inventory rests at 334.248 million oz
April 13/a strange withdrawal of 1.903 million oz with silver rising in price??/Inventory rests at 334.248 million oz
April 12.no change in silver inventory/rests tonight at 336.151 million oz
April 29.2016: Inventory 335.580 million oz
1. Central Fund of Canada: traded at Negative 5.9 percent to NAV usa funds and Negative 5.9% to NAV for Cdn funds!!!!
Percentage of fund in gold 60.6%
Percentage of fund in silver:38.1%
cash .+1.3%( April 29.2016).
2. Sprott silver fund (PSLV): Premium to  RISES to +60%!!!! NAV (April29.2016) 
3. Sprott gold fund (PHYS): premium to NAV  falls.0.85% to NAV  ( April29.2016)
Note: Sprott silver trust back  into positive territory at +.60%% /Sprott physical gold trust is back into positive territory at +0.85%/Central fund of Canada’s is still in jail.
It looks like Eric Sprott got on the nerves of our bankers as they lowered the premium in silver to +.60%.  Remember that Eric is to get 75 million dollars worth of silver in a new offering.

And now your overnight trading in gold, FRIDAY MORNING and also physical stories that may interest you:

Trading in gold and silver overnight in Asia and Europe


Gold “Chart of The Decade” – Maths Suggest $10,000 Per Ounce Says Rickards

James Rickards, economic and monetary expert, joined Bloomberg’s Francine Lacqua on Tuesday to discuss the gold “chart of the decade”, his new book “The New Case for Gold,” why gold is money and why gold is going to $10,000/oz in the coming years.

gold chartGold in USD – 10 Years (GoldCore)

Francine generously acknowledged how Rickards was “bullish on gold for quiet some time and actually you have been proven right … it is the chart of the decade”. She said that this “has to do with inflation expectations, it has to do with currency but it is really at the end of the day just a haven so people pile into it – as much as they do yen …”

Jim responded that

“Gold is a form of money and not an investment. As money it competes with other kinds of money — the dollar, euro, yen etc.. They’re like horses going around a racetrack – place your bets but you have a subjective preference for money. 

As investors are losing confidence in central banks … that’s what’s been going on and been clearly revealed. Central bankers have told me that they don’t know what they’re doing and they sort of make it up as they go along. They experiment.

President Evans of the Chicago Fed has said this and others have said it privately.

I spoke to Ben Bernanke and he described that everything he’s done was an experiment — meaning you don’t know what the outcome is.

So in that world where investors are losing confidence in central banks, gold does well.

Right now there are tens of trillions of dollars of sovereign debt with negative yields to maturity – bunds and JGBs..

Gold has zero yield.

Zero is higher than a negative 50 bps so gold is now the high yield asset in this environment.”

Regarding stocks, Rickards had this to say:

“Both gold and stocks are going up, and the reason stocks are going up is because Janet Yellen is going “full dove”. There’s nothing the stock market doesn’t like about free money. Plus negative interest rates might be on the table for next year.

That’s sort of bullish for stocks but it’s also bullish for gold.

Sometimes gold and stocks go up together and sometimes they don’t. There’s no long term correlation, but right now in a world of easy money and negative yields it’s good for both stocks and gold.”

GOLD AT $10K/oz
When asked for his price target for gold, Rickards says

“I have a technical level for gold, it is $10,000 U.S. per ounce. That amount gets bigger over time because it’s a ratio of physical gold to printed money. The amount of physical gold doesn’t go up very much, but printed money goes up a lot, so the dollar target goes up more over time because of all the money printing.

$10,000 U.S. per ounce is the implied non-deflationary price for gold. If you have to go back to a gold standard, or anything like it to restore confidence, that is the number you must have to avoid deflation.

So $10,000 per ounce is mathematically derived and is not a guess.”

Rickards is asked what happens if Yellen tries to normalise rates and says

“If Janet Yellen begins to normalize then it would probably throw the U.S. into a recession. A 25 basis points hike in December threw the U.S. stock market into a 10% correction in the next two months.

The U.S. is hanging by a thread. It looks like first quarter GDP is going to come in at well below 1% according to the Atlanta Fed Tracker.

What’s the difference between -1% and 1%? Technically not much. One may be a technical recession and one is not, but growth is extremely weak. You don’t raise interest rates in a recession. You’re supposed to ease in a recession.

International spill over as well as the U.S. economy being fundamentally weak is the reason to not raise rates.

The time to raise rates was 2011 and that’s long gone. But two wrongs don’t make a right.”

“The Phillips Curve seems to have broken down — if it ever existed. The bigger play is the “Shanghai Accord” which came out of the G20 meeting in Shanghai, China in February 2016.

It’s like a secret Plaza Accord between the U.S. Fed, the Bank of England, the Peoples Bank of China, the European Central Bank and the Bank of Japan.

The evidence for a new secretive plaza accord is overwhelming. See here is the deal – China needs to ease. But the last two times China eased, August 2015 and December/January 2016, the U.S. stock market fell out of bed.

So how do you ease China without destroying the U.S. stock market?

So the answer is keep the dollar/yuan cross rate unchanged. Then ease in the U.S. dollar so that China goes along for the ride. At the same time tighten Japan and Europe, so you get a stronger yen and a stronger euro.

China is a larger trading partner for Japan and Europe than the U.S. is, so it’s a backdoor easing for China. Cross rates unchanged but China gets to ease.”

Lacqua wonders if Mario Draghi in the ECB would agree to that and Rickards concludes by saying that ‘Super Mario’ “is his favourite central banker”.

Watch the full interview here

Week’s Market Updates
Property Bubble In Ireland Developing Again

Silver Bullion “Momentum Building” As “Supply Trouble Brewing”

Cyber Fraud At SWIFT – $81 Million Stolen From Central Bank

Gold In London Vaults Beneath Bank of England Worth $248 Billion – BBC

Silver Prices Up 6% This Week and 25% YTD; Gold Up 1% This Week

Gold News and Commentary
Silver “will likely continue to be the surprise outperformer in 2016” said GoldCore (Reuters)
“Tempter tantrum in global markets today is quite worrisome” said GoldCore (Marketwatch)
Gold climbs after Fed, BOJ stand pat on policy (Reuters)
Gold powers higher as BOJ’s surprise inaction hurts the dollar (Mineweb)
Russia’s VTB aims to supply up to 100 tonnes of gold to China per year (Reuters)

Gross Warns Financial System Likely To Implode – (Bloomberg Video)
JP Morgan Sees Draghi as Buyer of Last Resort for Equities (Bloomberg)
Venezuela Doesn’t Have Enough Money to Pay for Its Money (Bloomberg)
America’s earnings recession just got worse (CNN)
Germany’s Merkel warns of risks to banks from low interest rates (Reuters)
Read More Here

Gold Prices (LBMA)
29 April: USD 1,256.60, EUR 1,106.45 and GBP 861.43 per ounce (To be updated)
28 April: USD 1,256.60, EUR 1,106.45 and GBP 861.43 per ounce
27 April: USD 1,244.75, EUR 1,100.79 and GBP 853.58 per ounce
26 April: USD 1,234.50, EUR 1,093.46 and GBP 847.28 per ounce
25 April: USD 1,230.85, EUR 1,094.08 and GBP 853.79 per ounce

Silver Prices (LBMA)
29 April: USD 17.35, EUR 15.29 and GBP 11.92 per ounce (To be updated)
28 April: USD 17.35, EUR 15.29 and GBP 11.92 per ounce
27 April: USD 17.34, EUR 15.34 and GBP 11.87 per ounce
26 April: USD 16.95, EUR 15.02 and GBP 11.64 per ounce
25 April: USD 16.86, EUR 14.98 and GBP 11.67 per ounce

Mark O’Byrne
Executive Director
Published in Market Update

After the fix, the yuan faltered but the uSA dollar was still under pressure.  This allowed gold and silver to rise throughout the night.

Gold & Silver Surge To New Cycle Highs After China Strengthens Yuan By Most In 11 Years

With Japan closed, and unable for now to do more damage (or damage control), China stepped in with some modest turmoil of its own by strengthening the Yuan fix by the most since 2005, pressuring the USD weaker for the 5th day in a row. Commodities have tended to push higher on the back of this with Crude above $46.50 but Gold and Silver have surged to fresh 15 month highs (over $1275 and near $18 respectively).

The biggest strengthening in Yuan fix (implicitly pressuring the USD weaker) since 2005…

Sent PMs higher overnight…

And lifted crude (June) to the highest since Thanksgiving…up 4 days in a row

As it appears crude is playing catch up with gold post-BoJ…

A lack of BoJ “help” has left S&P futures trading in a very narrow range overnight – oscillating around VWAP…

Today’s commentary from Alasdair Macleod: a very important read as Alasdair believes it is in the interest of Saudi Arabia to sell its 5% stake in Aramco to China and in return, China removes a big block of its unwanted dollars.
(courtesy Alasdair Macleod)

Alasdair Macleod: Taking the petro out of the dollar

Submitted by cpowell on Thu, 2016-04-28 18:29. Section: 

2:30p ET Thursday, April 28, 2016

Dear Friend of GATA and Gold:

With China moving to internationalize its currency and Saudi Arabia looking for another sugar daddy, GoldMoney’s Alasdair Macleod writes, the oil trade’s decades-long support of the U.S. dollar may be coming to an end. Macleod’s commentary is headlined “Taking the Petro Out of the Dollar” and it’s posted at GoldMoney’s Internet site here:


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


This will be another dagger into the heart of the USA dollar:  Russia is to price its oil in Roubles:

(courtesy Bloomberg/GATA)

Putin’s decade-old dream realized as Russia to price its own oil

Submitted by cpowell on Fri, 2016-04-29 03:10. Section: 

By Eduard Gismatullin
Bloomberg News
Wednesday, April 27, 2016

Russian President Vladimir Putin is on the verge of realizing a decade-old dream: Russian oil priced in Russia.

The nation’s largest commodity exchange, whose chairman is Putin ally Igor Sechin, is courting international oil traders to join its emerging futures market. The goal is to increase revenue from Urals crude by disconnecting the price-setting mechanism from the world’s most-used Brent oil benchmark. Another aim is to move away from quoting petroleum in U.S. dollars.

If Russia is going to attract international participation in Russian-based pricing, the Kremlin will need to persuade traders it’s not simply trying to push prices up, some energy analysts said. The government is dependent on oil revenue to fund its budgets.

“The goal is to create a system where Russian oil is priced and traded in a fair and straightforward way,” said Alexei Rybnikov, president of the St. Petersburg International Mercantile Exchange, or Spimex, in a phone interview. …

… For the remainder of the report:



For your interest…explorers hunting for gold in the Egyptian desert: i.e. ancient sites where gold may be buried:

(courtesy NYTimes/GATA)

Following ancients, explorers hunt gold in the Egyptian desert

Submitted by cpowell on Fri, 2016-04-29 03:52. Section: 

Still another rich country insisting on being poor.

* * *

By The Associated Press
via The New York Times
Thursday, April 28, 2016

EASTERN DESERT, Egypt — Off the off-road tracks deep in Egypt’s eastern desert, prospectors are ramping up the hunt for the treasure once revered by the pharaohs as the “skin of the gods” — gold.

Essential for ancient artifacts like the famed burial mask of Tutankhamun and still highly desired in Middle Eastern culture today, gold has been mined in Egypt for millennia. But experts say the country is heavily underexplored and that modern technology now allows much deeper excavation of the ancient sites shown on pharaonic treasure maps.

If developed, gold and mineral mining could prove a boon to the country at a time it is desperate for foreign currency, and provide jobs for its burgeoning population of 90 million. But miners and experts say current legislation is out of step with global practices and doesn’t give enough incentives to bring in foreign investment.

“Mining has been going on here for over 5,000 years, but in the 21st century it’s essentially virgin ground,” said Mark Campbell, president of the Canadian exploration company Alexander Nubia, which is increasing its drilling this year in a 1,070-square mile area in the desert. “Exploring for gold and minerals in Egypt today with modern technology is like having a map where X marks the spot.” …

… For the remainder of the report:



Your early FRIDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight



1 Chinese yuan vs USA dollar/yuan DOWN to 6.4855 / Shanghai bourse  CLOSED DOWN 7.26  OR 0.25%  / HANG SANG CLOSED DOWN 320.98 OR 1.50% 

2 Nikkei closed FOR HOLIDAY /USA: YEN FALLS TO 107.04

3. Europe stocks opened ALL IN THE RED  /USA dollar index DOWN to 93.40/Euro UP to 1.1398

3b Japan 10 year bond yield: FALLS   TO -.075%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 107.04

3c Nikkei now JUST BELOW 18,000

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

3e WTI::  46.45  and Brent: 48.00

3f Gold UP  /Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS to 0.247%   German bunds in negative yields from 8 years out

 Greece  sees its 2 year rate RISE to 10.60%/: 

3j Greek 10 year bond yield RISE to  : 8.99%   (YIELD CURVE NOW DEEPLY INVERTED)

3k Gold at $1277.75/silver $17.76 (7:45 am est) BROKE RESISTANCE AT 16.52 

3l USA vs Russian rouble; (Russian rouble UP 61 /100 in  roubles/dollar) 64.14

3m oil into the 46 dollar handle for WTI and 48 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation  (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/expect a huge devaluation imminently from POBC.


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9624 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0967 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 8 Year German bund now  in negative territory with the 10 year FALLS to  + .247%

/German 8 year rate negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,

The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”.  Next step for Greece will be the recapitalization of the banks and that will be difficult.

4. USA 10 year treasury bond at 1.85% early this morning. Thirty year rate  at 2.70% /POLICY ERROR)

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

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

USDJPY Plunges As Dollar Drops To 11 Month Lows, Commodities Rise

Following yesterday’s Yen surge in the aftermath of the disappointing BOJ announcement, the pain for USDJPY long continued, with the key carry pair tumbling as low as 106, the lowest level since October 2014 before stabilizing around 107, and is now headed for its biggest weekly gain since 2008, which in turn has pushed the US dollar to to its lowest close in almost a year as signs of slowing growth in the U.S. dimmed prospects for a Federal Reserve interest-rate increase. As a result, global stocks fell and commodities extended gains in their best month since 2010.

The yen strengthened against all 16 major peers for the second day in a row, climbing as much as 1.1 percent to 106.91 a dollar, the strongest level since October 2014. It surged 4.3 percent this week as the Bank of Japan defied economists’ expectations that stimulus would be stepped up.

The sliding dollar is proving beneficial for raw materials, helping lift gold and silver to 15-month highs. Crude oil has jumped 21 percent this month to more than $46 a barrel in New York. European equities trimmed their biggest monthly advance since November.

As Bloomberg writes, the dollar’s third straight monthly drop and the prospects for the Fed moving gradually on interest rates are spurring the outlook for inflation, with the 10-year U.S. break-even rate at the highest since July. Reports today on consumer confidence and personal spending will provide clues on the trajectory of the world’s largest economy after data on Thursday showed the slowest pace of expansion in two years.

Looking at regional markets, Asia traded mixed amid holiday thinned trade and a cautious tone following Wall St. losses, where an Apple sell-off and weak US GDP dampened sentiment. However, ASX 200 (+0.4%) edged higher underpinned by commodity strength in which WTI broke above USD 46/bbl. Elsewhere, the Shanghai Comp (-0.3%) was subdued after further discouraging earnings in which PetroChina posted its first ever quarterly loss and ICBC reported lacklustre growth as well as an increase in NPL’s, while the PBoC also conducted a net CNY 290b1n drain. Finally, Japanese markets were shut for Showa Day public holiday.

In Europe, despite the upside in the energy complex today, sentiment is firmly dampened after the soft close in the US yesterday and the risk off trading seen overnight. Although Asia saw thin trade due to the Japanese holiday, the upside seen in both JPY and precious metals illustrated the uncertainty felt across asset classes, with this filtering through to Europe. Equities have traded in the red throughout the morning, with Euro Stoxx lower by 1.2%, although with the downside in equities failing to filter through to any significant price action in fixed income. Bunds are flat on the day and continue to trade in the tight range between 162.50 and 162.25.

In Fx, it has been a mixed session in FX, but one which again is to the detriment of the USD as the index is pressed down to fresh 6 month+ lows on the back of another down-leg in USD/JPY. Losses in London saw 107.00 taken out, but ahead of 106.50, exotic protective bids are helping contain the sell-off, albeit temporarily so as yet. EUR/USD has been propelled higher accordingly, having adopted a strong bid tone in recent sessions. Earlier gains extended through the pre 1.1400 top seen over the ECB press conference last week, and despite running into strong offers above here, the pullback is contained ahead of 1.1350, with better than expected Q1 GDP in the Euro zone now aiding the bid. This has also helped EUR/GBP recover a little, with Cable now only managing to match the early Feb high at 1.4667 before retracing back through 1.4600. Bids in the mid 1.4550’s supporting for now. Commodities still recovering amid the backdrop of recent jitters in equity markets. Oil continues to power north to help maintain USD/CAD pressure on 1.2500. Strong bids coming in ahead of this but sellers keen ahead of 1.2550.

Heading into the North American crossover, energy prices have seen upside for much of the morning with Brent crude futures above USD 48/bbl, while WTI is trading at levels last seen since October. Newsflow for the energy has been somewhat light, with only reports out of Saudi Arabia that they may potentially boost oil production in the summer to around 10.5mln bpd. Elsewhere, Gold rose nearly 1% as a cautious tone spurred a flight-to-safety reaching USD 1280.00/oz eyeing the highs of USD 1284.8/oz seen on the 11th Mar’16, Elsewhere Silver broke the recent highs of USD 17.66/oz reaching USD 17.84/oz with the next level up at USD 18.44/oz. Copper and iron ore prices also benefited from the USD’s demise to 8-month lows, with Dalian iron ore futures hitting limit up in early trade.

Bulletin headline summary from Bloomberg and RanSquawk

  • An uninspiring lead from US and Asian bourses filters into Europe despite the upside in the energy complex
  • USD-index continues its persistent softness with USD/JPY briefly breaking below 107.00.
  • Looking ahead, highlights include US Core PCE and Personal Spending, as
    well as comments from Fed’s Kaplan, and BoE’s Cunliffe
  • Treasuries slip during overnight trading, lower with global equities as Japan closed today and May 3-5 for Golden Week; volumes light with 10Y Treasury futures trading around 147k contracts.
  • Federal Reserve Bank of Dallas President Robert Kaplan says estimates of first-quarter growth have been disappointing, but that output should improve over the remainder of the year
  • Mario Draghi’s policy challenge was highlighted once again on Friday, with the fastest economic growth in a year overshadowed by a renewed drop in consumer prices as euro- area inflation rate fell to minus 0.2 percent in April
  • Commerzbank AG downgraded bonds from Poland, Hungary and Croatia this week, saying the countries are most vulnerable to Brexit risks
  • Spanish banks are gobbling up a growing slice of Portugal’s financial industry, taking advantage of the country’s halting recovery from Europe’s debt crisis
  • China’s central bank responded to an overnight tumble in the dollar by strengthening its currency fixing the most since a peg was dismantled in July 2005.
  • Chinese authorities are considering convening a top-level finance work conference this summer, a year ahead of schedule, to map out a sweeping consolidation of the country’s financial regulatory system in a move to reduce risks
  • Vice President Michel Temer is playing down expectations that he can achieve a quick fix for Brazil’s economic troubles should his boss, Dilma Rousseff, be impeached
  • Sovereign 10Y bond yields mixed; European, Asian markets lower; U.S. equity-index futures rise. WTI crude oil, metals higher

DB’s Jim reid concludes the overnight wrap

So a busy period of Central Bank policy meetings comes to an end giving investors a chance to take stock and assess where we go from here. In the last week and a bit we’ve heard from the ECB, Fed and now the BoJ. Much of the focus on the former was on the details around the corporate bond purchasing program with the general feeling that it largely exceeded expectations. The Fed made some subtle changes to its language, but ultimately markets remain unconvinced that we’re any closer to the next tightening move. Finally it was the turn of the BoJ yesterday and while investors had been fairly 50/50 going into the meeting for some sort of action, the immediate reaction from markets was one of obvious disappointment. Kuroda’s press conference yesterday seems to have left the market in a bit of a haze of confusion and the BoJ will have be careful not to mismanage expectations and so damage their credibility in the future. All of a sudden it might be worth checking your summer holiday dates versus the next two BoJ dates on June 16th and July 29th.

It’s interesting to take a look at how markets have performed through this busy period of monetary policy meetings, and corporate earnings results for that matter. Ultimately the conclusion is that there’s actually not been that much change for asset prices in the period since the close of play prior to the ECB. Looking at equity markets the S&P 500 is -1.2% with much of that decline a result of yesterdays late selloff, while the Nikkei is -1.4% (again plagued by yesterdays performance), the Stoxx 600 -0.3% and the DAX -1.0%, while European Banks (+2.5%) have actually bounced. Sovereign bond markets are more mixed. 10y Treasury yields are 2bps lower, while similar maturity Bunds and JGB’s are 10bps and 6bps higher respectively. The iTraxx Main index is actually unchanged which may come as a surprise while in FX land the Yen is 1.6% stronger and the Euro is up about half a percent.

Post the BoJ yesterday the main focus was on the US data and specifically the Q1 GDP print. Growth disappointed at +0.5% qoq (vs. +0.7% expected) as net exports contributed negatively while business fixed investment was also down sharply. Inventories also dragged as expected and the data confirmed that Q1 was the weakest quarterly performance for growth since Q1 2014. Interestingly though the US Dollar bounced off its lows and Treasury yields moved higher as the inflation data released alongside actually surprised to the upside. The Q1 Core PCE print came in at +2.1% qoq (vs. +1.9% expected) which is the highest level in four years. We’ll get some idea of the intra-quarter pattern with this afternoon’s March PCE data.

Before we get there though, flicking over to Asia where markets are closing out the week on a bit of a mixed note. After the steep leg lower yesterday, equity markets in Japan are closed for a public holiday, however the Yen has continued to strengthen and is another 1% firmer this morning around 107.20 which is an 18-month high. That means it has rallied over 4% since pre-BoJ yesterday. Meanwhile the Hang Seng has dropped -1.35% this morning, bourses in China are little changed, the Kospi is -0.55% however the ASX is +0.41%. The Chinese Yuan is generating headlines this morning too after the PBoC raised the fix by the most since 2005. The reference rate was set +0.56% stronger however that appears to be more of a reflection of the big weakness in the USD yesterday rather than any policy intention.

Elsewhere US equity index futures are little moved despite Amazon reporting a big beat for Q1 earnings after the closing bell yesterday which sent shares up over 10% in extended trading. The company reported an EPS of $1.07 a share for the quarter after expectations were for 57c. Even if we use the peak in consensus for Q1 EPS this year back in January of 87c, the beat is still impressive.

Back to yesterday. After European equity markets had wiped out the early BoJ-led selloff from the Nikkei into the close (Stoxx 600 closing +0.17%), US equities did look like they were on course for a broadly flattish day before a sharp leg lower for Apple took the rest of the tech sector with it meaning the S&P 500 (-0.92%) and Dow (-1.17%) both ended the session heavily in the red. Apple ended just over 3% lower and it appears that the cause of that was the CNBC interview with Carl Icahn confirming that the investor has sold his stake in the company with concerns about issues in China. US credit indices ended up being hard hit too with CDX IG nearly 3bps wider by the end of play.

Meanwhile the Yen rally yesterday saw the US Dollar index end -0.66% lower and so continuing the theme of dropping every day this week. 10y Treasury yields ended nearly 3bps lower at 1.825% after at one stage touching 1.87% post the inflation data. Oil markets took more of a backseat but the weakness in the Dollar did help to extend the YTD high for WTI after rallying +1.54% to close a smidgen above $46/bbl. Precious metals were the bigger winner on the day however in true risk off fashion. Gold ended up +1.64% at $1266/oz while Silver rallied to the tune of nearly 2% meaning it is an impressive 18% up from the lows of earlier this month.

In terms of the rest of the data yesterday, there were few surprises from the flash CPI numbers out of Germany where the April headline number printed at -0.2% mom as expected. German unemployment was also noted as falling 16k last month. The rest of the data in Europe was reserved for Euro area confidence indicators. Consumer confidence was confirmed this month at -9.3, while economic confidence rose 0.9pts to 103.9 (vs. 103.4 expected). Both services and business climate indicator readings were reported as rising this month too. Meanwhile in the US the only other data of note was a slight increase in initial jobless claims last month by 9k to 257k although albeit still at historically low levels, while the Kansas City Fed’s manufacturing survey was reported as rising 2pts this month to -4.

Looking at today’s calendar, we’ve got a busy end to a busy week for data today. This morning in Europe and shortly after this hits your emails the French Q1 GDP print will be released. Following that will be German retail sales for March before we’re back to France again with the first snapshot of the April inflation numbers. We then turn to the UK for money and credit aggregates data before its all eyes on the Euro area CPI report for April (headline expected at -0.1% mom) and Q1 GDP report (expected to be +0.4% qoq). Across the pond this afternoon we’ll get the Q1 employment cost index, March personal income and spending data and that PCE deflator and core data for last month. There’s more regional manufacturing data in the form of the ISM Milwaukee and the Chicago PMI before we get the final revision to the April reading for the University of Michigan consumer sentiment survey. Meanwhile 22 S&P 500 corporates will be out with their latest quarterly earnings today including Exxon Mobil and Chevron so it’s well worth keeping an eye on those results.



i)Late  THURSDAY night/ FRIDAY morning: Shanghai closed DOWN BY 7.26 POINTS OR 0.25%  /  Hang Sang closed DOWN 320.98 OR 1.50%. The Nikkei closed FOR HOLIDAY  . Australia’s all ordinaires  CLOSED UP 0.51% AS RESOURCE STOCKS DOING WELL. Chinese yuan (ONSHORE) closed DOWN at 6.4855.  Oil ROSE  to 46.45 dollars per barrel for WTI and 48.00 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.4885 yuan to the dollar vs 6.4855 for onshore yuan.



see above


This is scary!! China in this latest USA-China escalation, Beijing denies a USA aircraft carrier access to a Hong Kong harbour:


(courtesy zero hedge)


In Latest US-China Escalation, Beijing Denies US Aircraft Carrier Access To Hong Kong Port

What until now was mostly effete jawboning over US complaints surrounding China’s territorial expansion ambitions in the South China Sea, including the occasional sailing of a US ship deep inside the disputed territorial waters (with zero impact especially now that China may soon start building maritime nuclear power plants in the area), changed dramatically earlier today when China officially denied a U.S. carrier strike group’s request for a port visit to Hong Kong next week.

The Stennis strike group

As Stripes writesthe Chinese Ministry of Foreign Affairs notified the United States Thursday of its decision to deny the USS John C. Stennis and its escort ships access to the former British colony, Darragh Paradiso, a spokeswoman for the U.S. Consulate General in Hong Kong, said by phone. The ministry provided no explanation for the move.

While U.S. warships frequently visit Hong Kong, port calls have been canceled at times of diplomatic strain between the two Asia-Pacific powers. In 2007, China denied access to the city’s port by the aircraft carrier USS Kitty Hawk.

The decision follows weeks of increasing diplomatic sparring between China and the U.S. over Beijing’s claims to more than 80 percent of the South China Sea. The nuclear-powered Stennis has played a central role in U.S. efforts to demonstrate its continued security presence in the disputed waters, with Defense Secretary Ashton Carter visiting the warship on patrol there in April.

A plane carrying U.S. Secretary of Defense Ash Carter lands on the deck of the USS 
John C. Stennis on April 15, 2016, as the ship sailed through the South China Sea.

According to Shi Yinhong, director of the Center on American Studies at Renmin University in Beijing, and a foreign policy adviser to the State Council, the Stennis has become a “symbol of efforts to spark strategic tensions between China and the United States. The cancellation is a snapshot of the current intensity in China-U.S. security relations. Without significant security need, routine port calls would not have been canceled.

While the US has been complaining about China’s territorial expansions over the past year, culminating with the current recent incident, China’s claims to the South China Sea have resulted in numerous other disputes with other neighboring Southeast Asian nations that assert rights to the area, including Vietnam and the Philippines. Tensions are running high as the region braces for a ruling by an international arbitration panel on a Philippine challenge to China’s claims.

“We have a long track record of successful port visits to Hong Kong, including with the current visit of the USS Blue Ridge, and we expect that will continue,” Paradiso said, referencing the U.S. Navy command ship already moored in the city.

Finally, earlier today the US State Department confirmed that indeed China has refused to allow Stennis to dock in Hong Kong.

 denied Hong Kong port call by USS Stennis aircraft carrier, @StateDept confirms. 



The head of Deutsche Bank’s integrity committee, a lawyer, has been fired due to him being overzealous!

(courtesy zero hedge)

Head Of Deutsche Bank “Integrity Committee” Fired Due To “Overzealousness”

Perhaps it is merely a coincidence but just weeks after Deutsche Bank became the first bank to admit to rigging the gold market (and agreeing to rat out fellow manipulators) yesterday afternoon the head of Deutsche Bank’s “integrity committee” announced he would resign two years before his time, which is a polite way of saying he was fired.

As the FT reports, Georg Thoma has been fired from Deutsche Bank’s supervisory board two years before his contract ends “after coming under fire from other board members in a battle over how to deal with the German bank’s past scandals.”

Thoma, a veteran Shearman and Sterling lawyer, was brought on to the board by chairman Paul Achleitner in 2013 and headed the integrity committee, whose remit includes overseeing the bank’s efforts to comply with legal and regulatory requirements. Alas, he failed as the bank’s record surge in litigation charges in recent years has amply demonstrated.

According to the FT, “Thoma’s approach left him at odds with some colleagues, and on Sunday, Alfred Herling, Deutsche’s vice-chairman, took the unusual step of publicly criticising his actions in Germany’s Frankfurter Allgemeine Sonntagszeitung. Mr Herling accused Mr Thoma of “overzealousness”, saying that he “goes too far when he demands ever wider investigations and more and more lawyers come marching up”, and adding that the costs were “no longer proportionate”.

As Bloomberg adds, the remarks divided observers, with Dieter Hein, an analyst at Fairesearch-Alphavalue, saying Thoma was probably just doing his job, while Michael Seufert, an analyst at Norddeutsche Landesbank, said the question of going too far in probing wrongdoing is legitimate.

In other words, the vice-chairman goes after an internal scapegoat, the person who is tasked with fixing what is clearly a broken organization (just check its stock price) because the bank is unable to stop rigging every market it participates in.

As a reminder, Deutsche Bank’s costs and provisions for fines and lawsuits have amounted to $14.3 billion since 2012 and have substantially cut into the company’s reserves at a time when regulators order banks to hold more capital, resulting in the company’s stock price recently hitting lows not seen since the financial crisis. On Thursday, DB said that it expects further “material” legal costs this year when reporting quarterly earnings

DB at least had some kind parting words: Achleitner said Thoma had given Deutsche “outstanding service” during his time on the board. “He has implemented processes of great importance and benefit to the bank. The supervisory board is determined to continue its work of investigating possible misconduct and to draw lessons for the future,” he said.

And yet the main lesson, namely that not to fire the person who is meant to fix a broken organization, was somehow missed.

Meanwhile, Henning Kagermann, the former head of German software group SAP who is also a board member at Deutsche, told the newspaper that “for all the diligence that we have exercised, it is important for us that Deutsche Bank finally . . . devotes all its energy to looking to the future”.

Yes please, look at the future, and ignore DB’s past which, among other unexplained incidents, includes the suicide of former senior executive William Broeksmit, who was found dead after hanging himself at his London home, as well as the suicide of the bank’s associate general counsel, 41 year old Calogero “Charlie” Gambino, who was found on the morning of Oct. 20, having also hung himself by the neck from a stairway banister.

One wonders if any of those deaths had something to do with what has emerged to be a culture of unprecedented corruption and, recently, outright crime.

Deutsche said in a statement that Mr Thoma would resign immediately from his role as chairman of the integrity committee and leave the supervisory board after a one-month notice period. The bank has begun the search for a permanent successor. We are confident a former Goldman Sachs employee will be delighted to fill Thoma’s shoes.

The shocking termination comes comes just three weeks before Deutsche’s annual shareholder meeting on May 19, at which the bank’s supervisory board is likely to come under scrutiny, and even more dirty laundery may be set to emerge, especially since as the FT adds, “one small shareholder has requested a special audit of whether members of Deutsche’s supervisory board or management board breached their obligations in how they dealt with some of the bank’s legal entanglements.

The motion requests that the audit ascertain whether there were management failings in relation to a number of investigations, including the Libor scandal. Among other things, it requests an investigation into whether Deutsche had to pay heavier fines because members of its management or supervisory board obstructed, misled, or failed to co-operate sufficiently with authorities.

Considering the tsunami of legal settlements unveiled by Deutsche Bank in recent months – not to mention its shocking eagerness to put its gold manipulation history quickly in the past – we are confident the motion will be promptly denied.



The real issue surrounding the globe:  huge debt, not only at the sovereign level but also the corporate level.  Debt to GDP rises to astronomical heights with respect to sovereigns like Japan,  China,  Greece Italy and the USA.  If we take  China, the total debt to GDP is 350%.  Japan it is 450%.  This is a runaway train ready to crash:

(courtesy Guy Hasselman/Scotia Bank)

It’s The Debt Stupid: Scotiabank Warns “At Some Point ‘The Future’ Becomes ‘Today'”

Debt undermines growth and, as Scotiabank’s Guy Haselmann exclaims, the world has never been more indebted.

Reinhart and Rogoff’s 2010 research on the topic concluded that growth is about 1 percentage point lower in the long run when sovereign debt is 90% or more of GDP. They found that these episodes of ‘high debt’ were long and costly and that the average period (of ‘high debt’) lasted 23 years.  [Such long duration advocates that ‘high debt’ is not merely a function of a downturn in the business cycle.]

Debt levels of many countries have reached levels far higher than 90%. 

Those levels do not include the trillions of dollars in corporate debt (which has grown rapidly in the last 5 years). In many countries, debt has been growing at a rate far faster than economic growth. Such a trend is clearly unsustainable. Historically, rapid increases in debt levels typically result in a financial crisis or a prolonged slowdown in GDP growth.

The government debt-to GDP level of 104% in the US does not even include gargantuan unfunded entitlement liabilities which many argue will reach levels greater than $100 trillion in the next 10 years. It could be argued that a US growth rate of 2% might be the best case scenario for many years.

Loose monetary policy is supposed to provide cheap(er) funding for investment into capital projects that ultimately create jobs and spurs economic growth throughout the broader economy.  However, when there is limited visibility, projects will not be undertaken. Highly indebted corporations will be reluctant to take out more debt for capital projects without some sense of the value of those future cash flows as well as the cost of operating that future business.

Currently, it is too difficult to handicap future costs, and changes to the tax code, employee health care costs, regulations, or the fiscal policies (of whomever our elected leaders will be). Low and negative interest rates have not led to borrowing for capital projects because of this uncertainty.  Without these fiscal reforms, the effectiveness of monetary policy is muffled.

Yet, a massive amount of borrowing has taken place.Unfortunately, the proceeds of the huge corporate debt issuance have been used for share buybacks and dividend increases.  To make things look ‘less bad’, corporate executives have made efforts to increase earnings per share (EPS) ratios by making sure that the “S” falls faster than the “E”. The net result is higher asset prices that increasingly diverge from underlying economic fundamentals.

Low interest rates attempt to buy time. The idea is to bring consumption forward until the economy heals on its own as capital projects are completed. But those projects never began for the reasons I mentioned. The end result is ever-higher debt that borrows more and more from the future. Unfortunately, it borrows from the future without making the future any brighter through solutions to root causes of economic ailments.

At some point, the “future” becomes “today”.

A former central banker used a good analogy to describe the current condition in which central banks have placed themselves.  He said it is like cycling up a hill that is getting increasingly steeper and steeper and you need to pedal faster and faster to maintain the same position.

The hill is steepening as low and negative interest rates are no longer bringing spending forward. The BoJ cut in January to negative rates caused consumers to retrench.  This was likely due to worries about what such extraordinary measure must mean for the future.  Expectations matter. This market reaction has rightly acted as a warning sign to central banks about the limits of their policies.

There are trillions of dollars of debt maturing in the next 24 months.In this light, some random facts follow.  China has around $86 billion of debt maturing in May alone. The largest in their history. US CMBS has over $125 billion in loans maturing both this year and next.  Italy has around €360 Billion of impaired assets and non-performing loans (NPLs), which equals almost 25% of GDP. Since Greece had missed budget targets due to weaker than expected tax receipts, creditors may have to give them more money in order for Greece to be able to pay the €3.5 billion interest payment due in July.  The Malaysian state fund 1MDB defaulted this month on the interest on a $1.75 billion bond which in turn led to a few cross defaults.

The bottom line is that high debt typically inflicts future financial stress.  The burden magnifies if interest rates rise, or if the debt burden either cannot be rolled over or can only be refinanced at wider spreads.

High yield bonds spread have come roaring back from wide levels, but credit will face headwinds and challenges going forward.  Emerging markets (EM) corporations and countries that have borrowed in US dollars face similar challenges, particularly due to the relative strength of the USD in recent years (which is likely to persist). According to the BIS EM borrowing in USD has soared above $9 trillion.

My view of US Treasuries has not changed.  The compelling technical story, which I have outlined in several notes, remains firmly intact. The global shortage of (and increasing demand for) high-quality, risk-free, and positive-yielding collateral can be added to the list of factors. I still expect long-maturity Treasury yields to fall to all-time low levels in 2016. Other financial assets will not perform so well.

“Know what you own, and know why you own it” – Peter Lynch

This is something to watch.  When the Yen/South SAfrican Rand reaches high levels, it generally means crisis time:  previous shocks where the cross was at all time highs;
9.11, Enron, and Lehman default:
(courtesy zero hedge)

ZARpocalypse Now? BofAML Warns “Summer Of Shocks” Looms

The mysterious ZARJPY indicator of global turmoil is flashing red once again as BofAML’s Michael Hartnett warns of soaring sentiment into a potential “summer of shocks.”

With BofAML Bull & Bear index (from 0.1 in Feb to 5.0) sentiment at 11-month highs, Hartnett sees the world split into the next few months…

“Summer of Stocks” (boring macro/trading range/grind higher) plausible… cash still high, US/EU credit underpinned, breadth improving

“Summer of Shocks” (buy vol) more plausible… H1 policy “panic” ended this week, BofAML say Fed hikes June, bears getting “stopped in”, Japan yen surge, China bond vigilantes, ISM<50, BREXIT all risk-off shocks

Wall Street/Fed continues to play “cat and mouse” (risk rallies end when Fed hike expectations imminent, and start when Fed hike expectations postponed).

And (hedge fund) redemption, (central bank) repression, (market) regulation risks remain very high as the flash crash/pain trade era to continue.



Due to the higher prices for oil, USA shale companies are back in business and pumping out more oil.  Now OPEC in response will also boost exports to near record levels trying to get them out of business

(courtesy zero hedge)

OPEC Set To Pump Even More Oil In April As Saudi Arabia Boosts Exports To Near-Record High Levels

In one of the least surprising highlights from the ongoing earnings season, yesterday we reported that as oil continues to rise, US shale companies are starting to resume mothballed production.

First, it was Pioneer who said it was “expecting to deliver production growth of 12%+ in 2016 compared to the Company’s previous production growth target of 10%” adding that it also expected to “add five to ten horizontal drilling rigs when the price of oil recovers to approximately $50 per barrel and the outlook for oil supply/demand fundamentals is positive.” Then yesterday it was another US shale giant, Whiting Petroleum, who admitted that $45 oil is good enough, and that it is “increasing its production forecast to a range of 131,400 BOE/d to 136,900 BOE/d” adding that “with the majority of completions scheduled for the second half of the year, the Company expects to realize the full production benefit in late 2016 and 2017.”

And now, according to the latest Reuters production survey, in the aftermath of the failed Doha oil freeze agreement, OPEC will be the next to boost production in the coming month, expanding supplies from an already oversupplied 32.46MMb/d to 32.64MMb/d.

As Reuters notes, its survey indicates output from the Organization of the Petroleum Exporting Countries rose by 170,000 bpd in April. OPEC has no supply target. At a Dec. 4 meeting the producer group scrapped its output ceiling of 30 million bpd, which it had been exceeding for months.

The Reuters survey aims to assess crude supply to market, defined to exclude movements to, but not sales from, storage. Saudi and Kuwaiti data includes the Neutral Zone.

Venezuelan data includes upgraded synthetic oil. Nigerian output includes the Agbami stream and excludes Oso and Akpo condensates. Totals are rounded. There are no individual quotas for the OPEC member countries.

The full Reuters table:

And then moments ago:


We wonder just how much longer algos can keep ignoring fundamentals.


And that sends the message to dump oil:
(courtesy zero hedge)

Oil Suddenly Tumbles

Having risen all day on the back of the weaker dollar now sliding to nearly one year lows, moments ago oil just wiped out all its intraday gains and tumbled to unchanged, losing almost a dollar in seconds.

It is unclear what caused this sudden drop, although the headline that Saudi Arabia is set to export another record amount of oil in the coming month surely did not help, and may indicate that the ongoing quant driven buying and relentless short squeeze may be ending as eyes finally turn to fundamentals.

Rig counts decline and yet crude cannot climb:
(courtesy zero hedge)

Crude Unable To Bounce Despite Biggest Rig Count Decline In 6 Weeks

After its earlier pump and rapid dump, WTI crude is unable to bounce for now despite the biggest rig count decline in 6 weeks. The oil rig count declined by 11 to 332 – the lowest since October 2009 – tracking lagged crude prices. If the co-dependence continues we would expect to see rig counts begin to rise (or stop declining) very soon. Total US rig count dropped to 420 – a new all-time record low.



Will we see rig counts stabilize here – tracking the legged price of crude?


Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings/FRIDAY morning 7:00 am




USA/CAN 1.2505 UP .0044

Early THIS FRIDAY morning in Europe, the Euro ROSE by 41 basis points, trading now WELL above the important 1.08 level RISING to 1.1281; Europe is still reacting to deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and NOW THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE / Last night the Shanghai composite was DOWN 7.26 POINTS OR 0.25% LAST 2 HR RESCUE / Hang Sang DOWN 320.98. OR  1.50%   / AUSTRALIA IS HIGHER BY 0.51% (RESOURCE STOCKS DOING WELL)/ ALL EUROPEAN BOURSES ARE DEEPLY IN THE RED  as they start their morning/

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 and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)

3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.

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 FRIDAY morning: closed HOLIDAY 

Trading from Europe and Asia:


Gold very early morning trading: $1277.50


Early FRIDAY morning USA 10 year bond yield: 1.85% !!! UP 2 in basis points from THURSDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES to 2.70 UP 2 in basis points from THURSDAY night.

USA dollar index early FRIDAY morning: 93.40 DOWN 36 cents from THURSDAY’s close.(Now below resistance at a DXY of 100.)

This ends early morning numbers FRIDAY MORNING


And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield:  3.16% DOWN 1 in basis points from THURSDAY

JAPANESE BOND YIELD: -0.075% PAR in   basis points from THURSDAY

SPANISH 10 YR BOND YIELD:1.59% DOWN 1 IN basis points from THURSDAY

ITALIAN 10 YR BOND YIELD: 1.49  UP 1 IN basis points from THURSDAY

the Italian 10 yr bond yield is trading 10 points lower than Spain.





Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/3:30 PM

Euro/USA 1.1449 UP .0092 (Euro =UP 92  basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 106.69 DOWN 1.406 (Yen UP 107 basis points As MARKETS TANK BADLY/GOLD/SILVER SKYROCKET)

Great Britain/USA 1.4610  UP .0002 Pound UP 2 basis points/

USA/Canad 1.2538 DOWN 0.0010 (Canadian dollar UP 10 basis points with OIL RISING(WTI AT $46.08)


This afternoon, the Euro was UP by 92 basis points to trade at 1.449

The Yen ROSE to 106.69 for a GAIN of 141 basis points as NIRP is STILL a big failure for the Japanese central bank/AND TODAY IF THERE ARE ANY REMAINING YEN CARRY TRADERS THEY WERE TOTALLY WIPED OUT

The pound was UP 2 basis points, trading at 1.4610

The Canadian dollar ROSE by 10 basis points to 1.2538, WITH WTI OIL AT:  $46.07

The USA/Yuan closed at 6.4738

the 10 yr Japanese bond yield closed at -.075% PAR IN BASIS  points in yield/

Your closing 10 yr USA bond yield: DOWN 2  basis points from THURSDAY at 1.81% //trading well below the resistance level of 2.27-2.32%) HUGE policy error

USA 30 yr bond yield: 2.66 DOWN 1 in basis points on the day ( HUGE POLICY ERROR)

Your closing USA dollar index, 93.10 DOWN 67 CENTS ON THE DAY/4 PM

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for FRIDAY

London:  CLOSED DOWN 80.51 POINTS OR 1.27%
German Dax :CLOSED DOWN 282.18 OR 2.73%
Paris Cac  CLOSED DOWN 128.40  OR 2.82%
Spain IBEX CLOSED DOWN 243.30 OR 2.62%
Italian MIB: CLOSED DOWN 376.15 OR 1.98%

The Dow was down 57.12 points or 0.32%

NASDAQ down 29.83 points or 0.62%
WTI Oil price; 45.98 at 4:30 pm;

Brent Oil: 47.28





This ends the stock indices, oil price, currency crosses and interest rate closes for today

Closing Price for Oil, 5 pm/and 10 year USA interest rate:


BRENT: 47.37


USA DOLLAR INDEX:93.05 down 72 cents on the day


And now your more important USA stories which will influence the price of gold/silver

Trading Today in Graph form:

Stock-Drop-alypse Wow – Gold Soars As Kamikaze Kuroda Strikes Again

Remember Wednesday night… after Facebook crushed it…


Overheard behind the scenes at CNBC today…


US Macro suffered its 4th weekly drop in a row and earnings expectations continue to weaken…


Stocks globally were a mess after The BoJ “shock”… NKY down 1700 points


Europe’s worst week in 3 months


And US equity market’s worst week in almost 3 months…


Futures from the Wednesday cash close show the chaos best… from The Fed to Facebook to Kuroda and from dismal macro to Icahn…


The panic-buying at the end managed to get S&P green for April…


Year-to-Date, Small Caps joined Nasdaq back in the red and The S&P gave up most of its gains… (and then a very late-day buying panic managed to get Russell 2000 to unchanged)


Financials were weak but Tech was a big loser on the week…


XLF – the US Financials ETF – broke back below its 200-day moving-average…


And after rushing into the safety of Biotechs in the last few weeks, they were monkey-hammered this week (down 7.5% – worst week since the first week of the year) testing its 50-day moving-average..


AAPL’s worst week since Jan 2013 (and before that since Lehman in 2008) as the “no brainer” has fallen for 10 of the last 11 days…


VIX surged this week above 17… before The PPT stepped in stomped on its throat at the 330RAMP…


And while we prefer not to use percentage change, this week was VIX’s biggest jump since the first week of the year, closing back above its 50-day-average for the first time since early Feb…


For the month of April Crude and Silver were the best performers, Dow flat…


The long-bond yield ended modestly lower on the week but underperformed relative to the belly which dropped 7-8bps…notably the gains for Treasuries accelerated into the close (the trend of selling bonds into and through the US open continues)


USD Index has fallen for 5 days in a row… big movers were yuuge Yen strength (after The BoJ) and AUD weakness (record lowflation)


This was the worst week for Bloomberg’s USD Index since March 2015…


As Yen just had its biggest 2-day rally since Lehman…


As USDJPY accelerated lower into the close…


The USD weakness spurred comnmodities higher generically with even Copper managing toi get green after major selling pressure from China’s unwind…interesting how uniform the gains in crude and PMs were on the week…


Despite today’s rollercoaster, oil closed at its highest weekly close since Thanksgiving, up 4 weeks in a row (over 20% off the Doha Dip lows)…


Gold’s 2nd best week since Oct 2011 (to $1299), Silver up 4 weeks in a row (topping $18)…


Charts: Bloomberg



Or simply:


Keep ‘peddling’…



Source: Investors.com



In the USA the consumer is 70% of GDP.  With the latest results, savings rate rose while spending disappointed again.  The consumer has reached peak debt!! and cannot spend anymore

(courtesy zero hedge)

Savings Rate Highest Since December 2012 After Personal Spending Disappoints Again

Following the drastically revised-away surge in spending in January, and the savings rate surge to 2012 highs in Feb, March’s income and spending data released today showed more problems for The Fed. While income grew 0.4% MoM (more than the 0.3% expectations), spending disappointed with a mere 0.1% rise (against +0.2% MoM expectations). Year-over-year spending growth slowed to 3.5% – the weakest since December and income growth slowed to 4.0% YoY leaving the savings rate at its highest since January 2013.

Income up, Spending down:

As Durables Goods spending (autos?) growth tumbles…

Which in longer historical context….

… Pushed the savings rate to match its highest since December 2013:

As all that hope-strewn spending has been revised away, and as a result following several revisions, the biggest concern to the Fed, the savings rate, has just hit its highest since December 2012, which means one thing: instead of spending money US consumer are quietly packing it away under the mattress despite ZIRP.

Charts: Bloomberg

the all important Chicago National manufacturing PMI tumbles again due to lack of orders
This is a very significant index as it measures manufacturing at the national level and mfg is collapsing!
(courtesy zero hedge)

Chicago PMI Tumbles From March Dead-Cat-Bounce “Plagued By A Lack Of Orders”

March’s dead-cat-bounce in Chicago PMI (like January’s) has died again as the business barometer drops to just 50.4 (from 53.6) missing expectations of 52.6. This barely-above-contractionary level was driven by an 11-point collapse in Order backlogs to the lowest since Dec 2015, and as MNI reports, “order patterns continued to be plagued by a lack of large orders and absence of international demand, purchasers said.”

Barely above contraction, Chicago PMI’s bounce is over…


  • Prices Paid rose compared to last month
  • New Orders fell compared to last month
  • Employment fell compared to last month
  • Inventory rose compared to last month
  • Supplier Deliveries rose compared to last month
  • Production rose compared to last month
  • Order Backlogs fell compared to last month
  • Number of Components Rising: 4

As MNI reports,

Order patterns continued to be plagued by a lack of large orders and absence of international demand, purchasers said. Softer ordering led to a decrease in the Employment component, which fell back into contraction, where it has been in 10 of the last 12 months.

Despite lower ordering and employment levels, Production posted a small increase as special projects, and a plethora of low volume high margin orders kept companies busy.

The most surprising element of the report was an unusually large 20.2% surge in Supplier Deliveries to the longest since October 2014. Purchasers feared extensions in lead times could be telegraphing the beginning signs of major supply chain disruptions on the horizon.

Insufficient inventories of components at the supplier level were cited for lengthening in lead times, purchasers said. To a lesser extent some minor global strikes and transportation issues added to longer lead times aswell.

What was uniform was a lengthening in Supplier Lead times with many citing capacity issues at offshore facilities. This led to some inventory builds, purchasers said.

Outside of the barometer components, Prices Paid was up over 25% to the highest in 17-monthsand its first expansionary read in 9 months as commodities moved higher in April.  Inventories added 5.6 points to 49.6, the highest since October as some companies noted difficulty in restocking from offshore suppliers.

Comments from the survey panel remained mixed with strong players continuing on a solid footing while others barely broke even. Others remained very weak and needed “way more orders”.

Those on a solid footing reported higher backlogs and higher revenues.

Others were slow and continued to note a lack of larger orders, and an ongoing focus on grabbing market share on low volume, high margin orders. The latter may have boosted production levels along with seasonal factors.

At first blush, the Atlanta Fed reveals Q2 GDP at 1.8% which is 1/2% below Wall Street consensus.  This number will be lowered in the next few months as the financial scene inside the USA deteriorates:
(courtesy zero hedge)

Atlanta Fed Unveils First Q2 GDP Forecast, Sees 1.8% Growth, 0.5% Below Wall Street Consensus

After being just fractionally above the official Q1 GDP print which yesterday came in at 0.5%, moments ago the Atlanta Fed unveiled its first Q2 GDP estimate which it sees at 1.8%, roughly 0.5% below the sellside average estimate of 2.3%, and just in line with the lowest forecast.

From the Fed:

Latest forecast: 1.8 percent — April 29, 2016

The first GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2016 is 1.8 percent on April 29. The final model nowcast for first-quarter real GDP growth was 0.6 percent, 0.1 percentage points above the advance estimate of 0.5 percent released on Thursday by the U.S. Bureau of Economic Analysis.

The next GDPNow update is Monday, May 2. Please see the “Release Dates” tab below for a full list of upcoming releases.

Considering the ongoing retrenchment among US consumer spending, which once again missed expectations and pushed the savings rate to match 3 year highs, we expect this number to be once again revised lower in the coming weeks.

The Fed just found its next excuse not to raise rates:  BREXIT.
For the first time, BREXIT takes a lead over staying in the EMU:
(courtesy zero hedge)

The Fed Just Found Its Next Excuse Not To Hike Rates

As June looms, The Fed – having dropped ‘some’ of its global event risk language in the latest statement – is now desperate for an excuse to not hike rates (or face a total loss of credibility). Judging by Fed’s Kaplan, they just found it…


Which is a problem as ‘Brexit’ just moved into the lead among YouGov polls.

Either Brexit or market turmoil or a terrible jobs number…

I have highlighted this to you on countless occasions but it is worth repeating;
all of the Net corporate debt has gone to buy up stock not to foster growth:
(courtesy zero hedge)

Bubble Finance At Work: All The Net Corporate Debt Growth In 21st Century Has Gone To Stock Buybacks

by  • April 28, 2016

By Tyler Durden at ZeroHedge

By now it is a well-known fact that corporations have no real way of generating organic growth in this economy, so they are relying on two things to boost share prices: multiple expansion (courtesy of central banks) and debt-funded buybacks (courtesy of central banks), the latter of which requires the firm to generate excess incremental cash. Incidentally, as SocGen showed last yearall the newly created debt in the 20th century has gone for just one thing: to fund stock buybacks.

The problem with this is that if a firm is going to continue to add debt to its balance sheet in order to fund buybacks (and dividends), then it needs to be able to generate enough operational cash flow in order to service the debt. Even if one makes the argument that debt is cheap right now, which may be true, or that central banks are backstopping it, which is certainly true in Europe as of a month ago, the fact remains that principal balances come due eventually also, and while debt can be rolled over, at some point the inability to generate cash from the operations catches up with them; furthermore even a small increase in rates means the rolling debt strategy is dies a painful death, as early 2016 showed.

In the following chart we can see net debt growth skyrocketing nearly 30% y/y, while EBITDA (cash flow) has been contracting for the past year. In fact, as SocGen shows below, the difference in the growth rate between these two most critical data series is now over 35% – the biggest negative differential in recent history.

Of course, every finance 101 student knows that a firm which has to borrow more cash than it is able to produce from its core operations is not a sustainable business model, and yet today’s CFOs, pundits and central bankers do not.

And the next question is: what happens if the Fed does raise rates, what happens to the feasibility of these companies servicing the debt while also spending on R&D and CapEx (assuming there is any), and who can only afford the rising interest expense as a result of ever smaller interest rates? The answer is, first, massive cost cutting, i.e. layoffs, which would be a poetic way for the Fed’s disastrous policies to be reintroduced to the real economy… and then, more to the point, mass defaults.

Source: Debt is Growing Faster Than Cash Flow by the Most On Record – ZeroHedge

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The following is interesting:  The USA treasury, the biggest manipulator of them all, gives explicit warnings to China, Japan,South Korea, Taiwan and Germany not to devalue their currencies: I understand the first 4 countries but Germany?  It does not have a currency, it is part of the EME  (Euro).  The key country named , of course is China.  Actually it was China that warned the USA that if the Americans raised their interest rate, then China would devalue!
(courtesy zero hedge)

US Treasury Gives Explicit Warning To China, Germany And Japan Not To Devalue Their Currencies

While the US Treasury’s semi-annual report on the foreign-exchange policies of major U.S. trading partners has traditionally been, pardon the pun, a paper tiger, as the US has not named a single country as a currency manipulator since it did so to China in 1994, and it didn’t go so far as to blame any country as an outright manipulator in the just released April edition, there was a new addition to the latest report.

In an inaugural “monitoring list”, the US put five economies including China, Japan and Germany (as well as South Korea and Taiwan) on a new currency watch list, saying that their foreign-exchange practices bear close monitoring to gauge if they provide an unfair trade advantage over America.

This is what it said:

In determining the appropriate factors to assess these criteria, Treasury took a thorough approach, analyzing data spanning 15 years across dozens of economies, including all economies that have had a trade surplus with the United States during that period, and which in the aggregate represent about 80 percent of global GDP. The thresholds are relatively robust in that reasonable changes to the thresholds do not materially change the Report’s conclusions. Treasury will also continue to review the factors it uses to assess these criteria to ensure that the new reporting and monitoring tools provided under the Act meet the objective of indicating where unfair currency practices may be emerging.


Pursuant to the Act, Treasury finds that no economy currently satisfies all three criteria, however, five major trading partners of the United States met two of the three criteria for enhanced analysis. Treasury is creating a new “Monitoring List” that includes these economies: China, Japan, Korea, Taiwan, and Germany. China, Japan, Germany, and Korea are identified as a result of a material current account surplus combined with a significant bilateral trade surplus with the United States. Taiwan is identified as a result of its material current account surplus and its persistent, one-sided intervention in foreign exchange markets. Treasury will closely monitor and assess the economic trends and foreign exchange policies of these economies.


As noted above, Treasury is creating a new “Monitoring List” that cites major trading partners that have met two of the three criteria specified in the Act. In this first Report, the Monitoring List includes China, Japan, Korea, Taiwan, and Germany.

This is about as direct a threat to the 3+2 nations not to engage in major currency devaluation whether through QE, NIRP or major interest rate changes as Jack Lew could come up with, and in some ways was to be expected in the aftermath of the G-20 meeting which as we found out this week, precluded any additional QE by the BOJ.

Recall that as part of the most recent G-20 accords, which many believe is what unleashed the steep slide in the dollar, the member nations agreed to refrain from FX intervention absent “disordely markets.” It also made clear what could push a country from merely the watch list to full blown manipulator status:

While no economy met all three of the criteria, this result is a reflection, in part, of the dynamics of the global economy during the past year, in which capital outflows from emerging markets have led a number of economies to engage in foreign exchange intervention to resist further depreciation of their currency (rather than appreciation). The extent of these flows was unusually high by historical standards, which underscores the possibility that more economies may trigger these thresholds going forward.

It added that “the Administration shares strongly the objective of taking aggressive and effective actions to ensure a level playing field for our workers and companies. The President has been clear that no economy should grow its exports based on a persistently undervalued exchange rate, and Treasury has been working aggressively to address exchange rate issues bilaterally, including through the U.S.-China Strategic and Economic Dialogue, and multilaterally through the G-7, G-20, and the International Monetary Fund.”

And specifically referring to the G-20 meeting, the Treasury notes the following:

The United States has secured commitments from the G-20 member countries to move more rapidly to more marketdetermined exchange rates, avoid persistent exchange rate misalignments, refrain from competitive exchange rate devaluations, and not target exchange rates for competitive purposes. Through Treasury’s leadership, the G-7 member countries, including Japan, have publicly affirmed that their fiscal and monetary policies will be oriented toward domestic objectives using domestic instruments. Treasury has also pushed for stronger IMF surveillance of the exchange rate policy obligations of its members. The IMF now publishes an exchange rate assessment for 29 economies, and is improving its exchange rate analysis in its Article IV reports on member countries. And through U.S. leadership, the Trans-Pacific Partnership countries have adopted—for the first time in the context of a trade agreement—provisions that address unfair currency practices by explicitly adopting G-20 exchange rate commitments and by promoting transparency and accountability.

In other words, the next country that dares to engage in wholesale currency devaluation with the US’ express prior permission gets it, although it is not quite clear what “it” is (we will have more thoughts on that tomorrow).

Finally, there was no comment by the US Treasury on the biggest FX manipulator of all, the US Treasury itself which courtesy of the Fed can move the value of the Dollar higher or lower by orders of magnitude in seconds. Why? Because for now the US “reserve currency” privilege allows it to do whatever it wants, plus as a reminder, the world remains synthetically short trillions of dollars. If the US wants to punish everyone else, all it needs to do is to increase the value of the dollar by 10-15% in a short period of time, and we will again witness the same events that led to the market swoon in late 2015 and early 2016.


Let us wrap up the week, with this review by Greg Hunter of USAWatchdog
(courtesy Greg hunter/USAWatchdog)

Economy Rotten-Like Apple Sales, Russia US Moving Towards Conflict, MSM Unfair to TrumpBy Greg Hunter On April 29, 2016 In Weekly News Wrap-Ups

The economy is rotten just like Apple iPhone sales numbers. For the first time in 10 years, Apple reported its first quarterly sales drop for their popular iPhone. No, it’s not the end of the world, but it’s a sign there is trouble in the economy. Sure, Facebook beat its earnings projections, but they don’t make anything. Other bad news includes new home sales are down. Manufacturing numbers from the Dallas Fed are down. Consumer sentiment numbers from the University of Michigan are down. Spending is down. Retail sales are down. GDP in the first quarter came in at a paltry .5%. Economist John Williams says that number will be revised down and will probably turn negative. Williams says we are already in a recession or soon will be. Both Bo Polny and Greg Mannarino say the same thing: we are getting to a point where they can no longer hide the bad economy, and there really is no recovery after all.

What does this mean for the run up in the stock market we have seen in the last few months? Mannarino and Polny also come to the same conclusion, and that is the markets are rolling over and we are headed down. Maybe that’s why insiders have sold stocks for the last 13 weeks in a row—a record. Add this to the news of Saudi Arabia cutting oil deals with China, and Russia, as of this week, is no longer pricing its oil in dollars. Looks like we have a perfect storm of deep trouble for the U.S. and the world for that matter.

President Obama asked Europe for support for a possible war with Russia. While the President was in Germany recently, he asked that all members of NATO back the U.S. in Eastern Europe if war breaks out. There are all sorts of signs that things between the U.S. and Russia are not good. Russian fighters have recently buzzed U.S. Navy ships and surveillance aircraft. The U.S. has sent two F-22 Raptors to Romania to deter what the U.S. says is “Russian aggression.” Threats continue to be made on both sides. Meanwhile, in the Middle East, the U.S. sent another 250 troops to fight against ISIS while Iran’s Supreme Leader is complaining about how the U.S. is slow to remove sanctions and has done so only “on paper.” I say, that’s the deal you get when nobody signs a deal. The Iran/U.S. deal to curtail its nuclear program is a no deal-deal because you don’t have a deal if nobody signs it.

The mainstream media (MSM) continues to trash Trump. To me, it is painfully obvious that the MSM are afraid of a Trump presidency and, deep down, know Democrats are going to vote for Trump. According to a legit poll out at the first of the year, 20% of Democrats say they will vote for Trump.

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

Video Link

http://usawatchdog.com/weekly-news-wrap-up-4-29-16-greg- hunter/




well that about does it for tonight

I will see you Monday night



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