JUNE 9/GLD ADDS A WHOPPING 6.23 TONNES INTO ITS INVENTORY/RESTS TONIGHT AT 887.38/no change in silver inventory at SLV/Comex silver again has a massive 1.6 million oz removal/Dealer comex silver remains at all time lows of 22 million oz/The front comex June contract month increases in tonnage again surpasses first day notice: tonight we have 49.135 tonnes standing for delivery/copper crashes again close to 2.00 per lb/this puts pressure on Glencore and Noble Industries/Japan’s machinery orders plummet 11% month/month//South Korea lowers its interest rate and thus expect currency wars in that region especially with China/Bill Holter’s commentary is huge today/USA has problem with loading cash onto cards and thus many Americans have not “bought” food with no money on the card/

Good evening Ladies and Gentlemen:

Gold:  $1,269.00 UP $10.10    (comex closing time)

Silver 17.25  UP 28 cents

In the access market 5:15 pm

Gold $1269.50

silver:  17.30

 

i) the June gold contract is an active contract. Late last night we had a HUGE  1101 notices filed for 110,100 oz.  The total number of notices filed in the 8 days is enormous at 14,107 for 1,410,700 oz.  (43.87 tonnes) WHAT IS MORE FASCINATING WAS OUR FRONT JUNE MONTH  INCREASED IN NET OI BY 678  CONTRACTS LAST THURSDAY(67,800 OZ).  ON FRIDAY IT INCREASED BY 78 CONTRACTS OR 7800 OZ, ON MONDAY IT INCREASED BY 264 CONTRACTS OR 26400 OZ. ON TUESDAY, IT INCREASED BY 284 CONTRACTS. FOR 28,400 OZ. AND YESTERDAY IT INCREASED BY 38 CONTRACTS OR 3800 OZ.TODAY IT INCREASED BY 8 NOTICES OR 800 OUNCES OF GOLD. THE ENTITY STANDING DOES NOT WANT FIAT AND IT SURE LOOKS LIKE A SOVEREIGN IS STANDING FOR GOLD.

Let us have a look at the data for today

.

Several months ago the comex had 303 tonnes of total gold. Today, the total inventory rests at 272.46 tonnes for a loss of 30 tonnes over that period

 

In silver, the total open interest ROSE by ONLY 597 contracts UP to 192,973 DESPITE THE FACT THAT THE PRICE OF SILVER WAS WELL UP by 60 cents with respect to YESTERDAY’S trading. In ounces, the OI is still represented by just under 1 BILLION oz i.e. 0.965 BILLION TO BE EXACT or 138% of annual global silver production (ex Russia &ex China)

In silver we had 0 notices served upon for nil oz.

In gold, the total comex gold OI ROSE by a CONSIDERABLE 10,642 contracts UP to 506,972 as the price of gold was well UP BY  $15.40 with YESTERDAY’S trading (at comex closing).

NOTICE THE DIFFERENCE IN OI BETWEEN GOLD AND SILVER.  THE BANKERS REFUSE TO PROVIDE THE SHORT PAPER DESPITE AN ADVANCING SILVER PRICE!!!

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

With respect to our two criminal funds, the GLD and the SLV:

 

WITH RESPECT TO GLD

 

We had A HUGE change  in inventory, A DEPOSIT OF 6.23 TONNES into the GLD/Inventory rests at  887.38 tonnes.

And now for SLV

We had no change in inventory into the SLV Inventory/Tonight it rests  at 338.725 million oz.

 

Both the GLD and SLV are massive frauds as they have no metal behind them!

.

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

1. Today, we had the open interest in silver rise by ONLY 623 contracts UP to 192,973 despite the fact that the price of silver was NORTHBOUND BY A CONSIDERABLE 60 cents with YESTERDAY’S trading. The gold open interest ROSE by 10,642 contracts UP to 506,972 as the price of gold was up $15.40 yesterday.

(report Harvey).

 

2 a) Gold trading overnight Europe, Goldcore

(Mark OByrne/

2b)  Gold trading earlier this morning USA;

(/zero hedge)

3. ASIAN AFFAIRS

i)Late  TUESDAY night/ WEDNESDAY morning: Shanghai closed DOWN  BY 8.89 PTS OR 0.30% /Hang Sang closed DOWN 30.36 OR 0.14%. The Nikkei closed UP 155.47 POINTS OR 0.93% Australia’s all ordinaires  CLOSED DOWN 0.02% Chinese yuan (ONSHORE) closed DOW at 6.5715 Oil ROSE to 51.12 dollars per barrel for WTI and 52.09 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.5771 yuan to the dollar vs 6.5715 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS) 

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

This is a biggy!  Japanese machinery orders have crashed over 11% on a month over month basis in April ( on a yearly basis 8.2% drop) and much worse than expected.  It is the biggest drop in over a year and the result was a huge 3 standard deviation miss. It now looks like Japan has entered its 7th recession since the financial crisis in 2008

( zero hedge)

b) REPORT ON CHINA

Last month saw a huge 116.5 surge in Chinese imports from Hong Kong.  If that was not earth shattering, then this month’s 242.6% explosion was!.  China is disguising its dollar outflows with these fake figures!

 

( zero hedge)

c)  SOUTH KOREA

In an unexpected move, the Central Bank of Korea lowered its interest by by 25 basis points to 1.25% a record low.  This caused the won to fall back above the 1160 level and no doubt this will create further devaluations across the region

(courtesy zero hedge)

4. EUROPEAN AFFAIRS

i)Deutsche bank takes on the ECB claiming NIRP and low interest rate policy is killing the economic scene as well as the banks who cannot make money in this environment:

( Deutsche bank/zero hedge)

ii)On day one of  Mario’s binge into the purchasing of bonds of corporates, he bought junk rated bonds even though he stated he would not do so.

( zero hedge)

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

( zero hedge)

7.OIL ISSUES

Poor Nigeria!.  They now have a second militant group threatening the Niger Delta Oil: the Ultimate Warriors of the Niger Delta:

( zero hedge/Oilprice.com)

8.EMERGING MARKETS

9. PHYSICAL STORIES

i)On silver:  Steve St Angelo/SRSRocco report)

( Steve St Angelo)

ii)Copper is crashing again this morning, down to $2.01 per lb, the lowest levels since January.  As copper deteriorates in price so does the global economy.  This should put huge pressures on Glencore, Noble Industries, Trafigura and other base metal companies:

( zero hedge)

 

iii)We brought you this story yesterday but it is worth repeating.  Commerzbank may hoard billions of euros in order to pay ECB charges.  No doubt, they will do what insurance giant Munich Re did in March : hoard Euro paper bills but also gold!

( zero hedge)

iv Bill Holter delivers a blockbuster commentary tonight:

(Bill Holter/Holter Sinclair collaboration)

the piece is entitled: “Something VERY BIG is afoot! “(public article)

10.USA STORIES WHICH MAY INFLUENCE THE PRICE OF GOLD/SILVER

i)This is troublesome! With the boat loaded with massive shorts on the 10 yr USA bond, you make imagine the trouble today as yields plummeted to 1.66%, the lowest in 4 months.

And for the first time in a week, the stock market got the message that the economy is not doing too good

( zero hedge)

 

ib)Wholesale inventories rise/sales miss and now the ratio at 1.35 is the highest post Lehman. This generally signals recession is upon us;

 

ii)Another darling of Wall Street, Restoration Hardware crashes after they slashed their guidance southbound! Restoration Hardware is owned by many hedge funds.

Why the guidance lower:  the consumer is not spending!

( zero hedge)

 

iii)My goodness! Goldman Sachs is now pounding the table that Obamacare has led to a rise involuntary part time employment as the expense of full timers and that a “few hundred thousand workers have received cut hours.  What took them so long!

( zero hedge)
iv)And now the real story by the JOLTS job openings and hirings/firings/( Mish Shedlock/Mishtalk)

 

v)Michael Snyder reports out outages on Food stamp EBT cards as many Americans are going hungry because the money is not loaded onto their cards.  It has been 8 days in June and for many no food:

(courtesy Michael Snyder)

vi)Falling tax receipts (withholding taxes) is for sure signalling a recession:

( Mish Shedlock/Mishtalk)

Let us head over to the comex:

The total gold comex open interest ROSE to an OI level of 506,972 for a GAIN of 10,642 contracts AS THE PRICE OF GOLD WAS UP $15.40 with respect to YESTERDAY’S TRADING. And we should expect another dandy rise in OI tomorrow with gold’s advance today. WE HAVE ENTERED THE SECOND BIGGEST DELIVERY MONTH OF THE YEARTHAT IS JUNE, A VERY ACTIVE MONTH. 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. IN THE MONTH OF MAY THE LATER HAD STOPPED. DURING THE MAY WE DID WITNESS A GRADUAL RISE IN AMOUNT STANDING AND THE AMOUNT STANDING AT THE CONCLUSION OF THE MONTH FINISHED AT ITS ZENITH..  IN JUNE, ON FIRST DAY NOTICE WE HAVE CERTAINLY WITNESSED THE FORMER, A HUGE LOSS OF TOTAL OPEN INTEREST CONTRACTS FOR THE ENTIRE GOLD COMEX COMPLEX . IN A VERY SURPRISING TURN OF EVENTS  AGAIN TODAY, THE JUNE OPEN INTEREST ROSE WHICH CERTAINLY SUGGESTS A MAJOR ENTITY IS STANDING AND MOSTLY LIKELY A SOVEREIGN LIKE CHINA

The FRONT gold contract month of June saw it’s OI fall to 2791 for a loss of 115 contracts. We had 123 notices filed yesterday, so we GAINED AGAIN 8 contracts or 800 additional oz standing FOR METAL. The next active contract month is July and here we saw it’s OI ROSE by 356 contracts UP to 2738.This may also be troublesome for our bankers as the front July contract month is extremely high for a non active month and it also refuses to shrivel. The next big active contract month is August and here the OI ROSE by 3,688 contracts UP to 368,276. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was POOR at 147,379. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was fair at 199,080 contracts. The comex is not in backwardation.

Today we had 1101 notices filed for 110,100 oz in gold.

 

And now for the wild silver comex results. Silver OI ROSE by ONLY 597 contracts from 192,973 UP to 192,973 DESPITE THE FACT THAT the price of silver was up BY A HUGE 60 cents with YESTERDAY’S TRADING. The front month of June saw it’s OI RISE by 1 contracts UP TO 349. We had 0 notices filed yesterday, so we gained one contract or an additional 5,000 ounces  will stand for delivery. The next big delivery month is July and here the OI fell by 3,688 contracts DOWN to 103,688. The volume on the comex today (just comex) came in at 57,369 which IS EXCELLENT. The confirmed volume YESTERDAY (comex + globex) was huge at  90,977. Silver is not in backwardation . London is in backwardation for several months.
 
We had 0 notices filed for nil oz.
 

JUNE contract month:

INITIAL standings for JUNE

June 9.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil  29,014.100oz

Brinks

 

Deposits to the Dealer Inventory in oz nil

 

Deposits to the Customer Inventory, in oz   25,766.870 oz

JPM

No of oz served (contracts) today 1101 contracts
(110,100 oz)
No of oz to be served (notices) 1690 contracts

169,000 oz

Total monthly oz gold served (contracts) so far this month 14,107 contracts (1,410,700 oz)

(43.88 TONNES SO FAR)

Total accumulative withdrawals  of gold from the Dealers inventory this month   1400.01 OZ
Total accumulative withdrawal of gold from the Customer inventory this month  113,229.5 OZ
QUIET ACTIVITY AGAIN INSIDE THE GOLD COMEX TODAY

Today we had 0 dealer DEPOSITS

 

total dealer deposit:  NIL 0z

 

Today we had 0 dealer withdrawals:

total dealer withdrawals:  nil oz

 

Today we had 1 customer deposit:

i) into JPM:  25,766.870 oz

Total customer deposits;  25,766.870 OZ

Today we had 1 customer withdrawals:

I) OUT OF BRINKS 29,014.100 OZ

total customer withdrawals: 29,014.100 OZ

Today we had 0 adjustments

Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 1101 contracts of which 426 notices was stopped (received) by JPMorgan dealer and 505 notices was stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the JUNE contract month, we take the total number of notices filed so far for the month (14,107) x 100 oz  or 1,410,700 oz , to which we  add the difference between the open interest for the front month of JUNE (2791 CONTRACTS) minus the number of notices served upon today (1101) x 100 oz   x 100 oz per contract equals 1,578,900 oz, the number of ounces standing in this active month.  This number is EXTREMELY huge for JUNE.  THE AMOUNT STANDING FOR GOLD IN MAY HELD THROUGHOUT THE MONTH AND ACTUALLY INCREASED AS THE MONTH PROCEEDED. AND IT SURE LOOKS LIKE IT WILL HAPPEN AGAIN IN JUNE.  THE BANKERS JUST RECEIVED THEIR MINSKY MOMENT!! 
 
Thus the INITIAL standings for gold for the JUNE. contract month:
No of notices served so far (14107) x 100 oz  or ounces + {OI for the front month (2791) minus the number of  notices served upon today (1101) x 100 oz which equals 1,579,700 oz standing in this   active delivery month of JUNE (49.135 tonnes).
INTERESTINGLY FIRST DAY NOTICE HAD 49.119 TONNES OF GOLD STANDING FOR DELIVERY SO WE HAVE GAINED BACK  ALL OF THE GOLD LOST IN STANDING DUE TO FIAT SETTLEMENTS AND A LITTLE MORE (49.135 TONNES) .
WE GAINED 8 CONTRACTS OR AN ADDITIONAL 800 OZ  IS STANDING FOR THE PHYSICAL GOLD.
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 49.135 tonnes of gold standing for JUNE and 51.12 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 6.889 TONNES FOR MAY + 49.135 TONNES FOR JUNE + 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 + May 5:  3.799 and May 6: 1.607 tonnes – MAY 12  .0003- May 18: 1.5635 tonnes-May 19/   2.535 tonnes-May 27 .0185 – .024 TONNES MAY 31 -jUNE 4: .5044   = 65.838 tonnes still standing against 51.04 tonnes available.
 Total dealer inventor 1,643,563.321 tonnes or 51.12 tonnes
Total gold inventory (dealer and customer) =8,759,687.737 or 272.46 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 272.46 tonnes for a loss of 30 tonnes over that period. 
 
JPMorgan has only 22.79 tonnes of gold total (both dealer and customer)
JPMorgan now has only .900 tonnes left in its dealer account.
 
 end
HUGE ACTIVITY INSIDE THE SILVER COMEX AS WELL
And now for silver
 

June initial standings

 June 9.2016

Silver
Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory  1,656,614.322 oz

Scotia,BRINKS,

DELAWARE,

HSBC

Deposits to the Dealer Inventory NIL
Deposits to the Customer Inventory   nil
No of oz served today (contracts) 0 CONTRACTS 

nil OZ

No of oz to be served (notices) 349 contracts

1,745,000 oz

Total monthly oz silver served (contracts) 202 contracts (1,010,000 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  13,900,756.0 oz

today we had 0 deposit into the dealer account

total dealer deposit:NIL oz

we had 0 dealer withdrawals:

total dealer withdrawals:  nil

we had 0 customer deposit:

Total customer deposits: nil oz.

We had 4 customer withdrawals

i) Out of Scotia:600,515.55  oz

ii) Out of Delaware:  1989.700 oz

iii) Out of Brinks;; 376,627.200 oz

iv) Out of HSBC; 677,481.872 oz

:

total customer withdrawals:  1,656,614.322 oz

this is a huge loss in silver and we are not in an active delivery month!

 
 

 

 we had 0 adjustment

LOOKS LIKE WE ARE HAVING A BANK RUN AT THE SILVER COMEX/today 1,656,614.322 oz leaves the customer account (eligible acct) 
The total number of notices filed today for the JUNE contract month is represented by 0 contracts for nil oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at (202) x 5,000 oz  = 1,010,000 oz to which we add the difference between the open interest for the front month of JUNE (349) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JUNE contract month:  202 (notices served so far)x 5000 oz +{349 OI for front month of JUNE ) -number of notices served upon today (0)x 5000 oz  equals  2,755,000 of silver standing for the JUNE contract month.
We  gained 1 silver  contract or an additional 5,000 ounces will stand for metal in this non  active delivery month of June.
 
Total dealer silver:  22.482 million  (RECORD LOW INVENTORY)
Total number of dealer and customer silver:   151.366 million oz
The total open interest on silver is NOW moving away from an all time high with the record of 207,394 being set May 18.2016. The registered silver (dealer silver) is NOW AT  multi year lows as silver is being drawn out and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver.
end
And now the Gold inventory at the GLD
JUNE 9. a huge deposit of 6.23 tonnes of gold into the GLD/Inventory rests at 887.38 tones
June 8/no change in inventory at the GLD/Inventory rests at 881.15 tonnes
june 7/ a tiny withdrawal of .29 tonnes of inventory/probably to pay for fees/Inventory rests at 881.15 tonnes
June 6/no change in gold inventory at the GLD/Inventory rests at 881.44 tonnes
June 3/ We had two big  sized deposits of 4.46 tonnes early this morning and then another 6.24 tonnes late tonight/ new GLD total: 881.44 tonnes  (total: 10.7 tonnes)
June 2/no change in gold inventory at the GLD.Inventory rests at 870.74 tonnes
June 1.2016/ a good sized deposit of 2.08 tonnes/Inventory rests at 870.74 tonnes
May 31/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 868.66 TONNES
May 27/no change in gold inventory at the GLD/Inventory rests at 868.66 tonnes
May 26./no change at the GLD/Inventory rests at 868.66 tonnes
May 25./no change in gold inventory at the GLD/Inventory rests at 868.66 tonnes
MAY 24/ a good sized withdrawal of 3.86 tonnes of paper gold from the GLD/Inventory rests at 868.66 tonnes
May 23./this is rather impossible: another huge deposit of 3.26 tonnes into the GLD with the price of gold down again today?/inventory rests at 872.52 tonnes
May 20/what!!!A MONSTER DEPOSIT OF :8.92 TONNES OF GOLD INTO THE GLD INVENTORY/AND WITH GOLD DOWN $2.80??/INVENTORY RESTS AT 869.26
May 19/ANOTHER HUGE DEPOSIT OF 4.46 TONNES OF GOLD INTO THE GLD/iNVENTORY RESTS AT 860.34 TONNES
May 18 /no changes in inventory at the GLD/Inventory rests at 855.89 tonnes.
May 17/ we had a huge deposit of 4.76 tonnes of gold into the GLD/Inventory rests tonight at 855.89 tonnes/in the last two and 1/2 weeks we have added 50 tonnes of gold and this most likely was all paper gold addition..
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

June 9.:  inventory rests tonight at 887.38 tonnes

end

Now the SLV Inventory
JUNE 9/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz.
June 8/no change in silver inventory at the SLV/Inventory rests at 338.725 million oz
june 7/ we had a huge addition (deposit) of 1.456 million oz into the SLV/Inventory rests at 338.725 million oz/
June 6/no change at the SLV/Inventory rests at 337.299 million oz/
June 3/ a huge deposit of 1.56 million oz was added to the SLV inventory/new inventory rests at 337.299 million oz
June 2/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz
June 1/no change in silver inventory at hte SLV/inventory rests at 335.739  million oz
May 31/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 335.739 MILLION OZ
May 27/no change in silver inventory at the SLV/Inventory rests at 335.739 million oz/
May 26./ no change in silver inventory at the SLV/Inventory rests at 335.739 million oz
May 25./no change in silver inventory at the SLV/Inventory rests at 335.739
MAY 24/no change in inventory at the SLV/Inventory rests at 335.739 million oz
May 23./we had a small withdrawal of 285,000 oz and that generally means payment of fees.Inventory rests at 335.739 million oz
May 20/WE HAD A GOOD SIZED DEPOSIT OF 951,000 OZ INTO THE SLV/INVENTORY RESTS AT 336.024 MILLION OZ
May 19/no changes in silver inventory at the SLV/Inventory rests at 335.073 million oz
May 18/no changes in silver inventory at the SLV/Inventory rests at 335.073 million oz/
May 17/no change in silver inventory at the SLV/Inventory rests at 335.073 million oz/
.
June 9.2016: Inventory 338.725 million oz
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 2.6 percent to NAV usa funds and Negative 3.0% to NAV for Cdn funds!!!!
Percentage of fund in gold 61.3%
Percentage of fund in silver:37.4%
cash .+1.3%( June 9/2016). /
2. Sprott silver fund (PSLV): Premium RISES  to +0.13%!!!! NAV (June 9.2016) 
3. Sprott gold fund (PHYS): premium to NAV  FALLS TO +1.60% to NAV  ( June 9.2016)
Note: Sprott silver trust back  into POSITIVE territory at +13% /Sprott physical gold trust is back into positive territory at +1.60%/Central fund of Canada’s is still in jail.
 
 
 

END

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

Trading in gold and silver overnight in Asia and Europe
Mark O’Byrne (Goldcore)

Gold Bullion Sees UK Demand Rise On BREXIT “Nerves”

Gold bullion is seeing increased sales in the UK on BREXIT “nerves” according to Reuters today:

BREXIT
“Demand for bullion bars and coins is rising, with men and women of all ages buying up the safe-haven metal in case of a British exit from the European Union.

Mark O’Byrne, director of Dublin-based gold dealer Goldcore, said the price bounce had already driven a significant demand increase this year, with broader geopolitical concerns also feeding into the rise.

“In the coming weeks, we’re expecting to be busy,” he said. “The recent polls (on Brexit) are going to create more jitters… that should lead to quite robust demand as we run into polling day.”

Sales have picked up since the latest polls suggested that the ‘leave’ campaign is gaining support, with online polls by ICM and YouGov showing at the weekend it had taken a 4-5 percentage point lead ahead of the June 23 referendum.

Those looking to hedge against Brexit risk with gold can choose from a range of small investment products, from 1 gram bars for less than 50 pounds to kilobars priced at more than 28,000 pounds, bought over the counter or online.

Interest in gold has surged this year largely due to a reappraisal of the pace of U.S. interest rate rises, making it hard to pinpoint the impact of concerns about Brexit on prices

The biggest quarterly rally in nearly 30 years at the beginning of the year marked a turnaround in a three-year price slide for gold.

Sterling-denominated gold rose back above 900 pounds an ounce in March and remains up 18 percent this year.

A ‘leave’ vote would likely push it higher still. A Reuters poll of forex strategists indicated last week that the pound would sink 9 percent against the dollar if Britain quit the EU, boosting the price of gold in sterling terms.”

Read full article here

Recent Market Updates
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market
– Martin Wolf: There Will Be Another “Huge” Financial Crisis
– Silver Price To Surge 800% on Global Industrial and Technological Demand

– BREXIT Gold Diversification As Vote Fuels Market Uncertainty
– Gold Forecasts Revised Higher – Citi Says “Buy the Dip”
– Gold Should Rise Above $1,900/oz -“Get In Now!”
– World’s Largest Asset Manager Suggests “Perfect Time” For Gold

7 Key Storage Must Haves - Copy (1)Learn the risks inherent in paper and digital gold

Gold Prices (LBMA AM)
09 June: USD 1,258.35, EUR 1,107.98 and GBP 870.53 per ounce
08 June: USD 1,252.40, EUR 1,101.61 and GBP 851.65 per ounce
07 June: USD 1,241.10, EUR 1,091.42 and GBP 851.02 per ounce
06 June: USD 1,240.55, EUR 1,092.67 and GBP 859.08 per ounce
03 June: USD 1,211.00, EUR 1,086.63 and GBP 839.34 per ounce
02 June: USD 1,215.50, EUR 1,085.32 and GBP 842.10 per ounce

Silver Prices (LBMA)
09 June: USD 16.75, EUR 14.73 and GBP 11.50 per ounce
08 June: USD 16.75, EUR 14.73 and GBP 11.50 per ounce
07 June: USD 16.31, EUR 14.36 and GBP 11.18 per ounce
06 June: USD 16.40, EUR 14.46 and GBP 11.39 per ounce
03 June: USD 16.10, EUR 14.45 and GBP 11.17 per ounce
02 June: USD 15.98, EUR 14.27 and GBP 11.07 per ounce

Mark O’Byrne
Executive Director

 

end

 

On silver:  Steve St Angelo/SRSRocco report)

(courtesy Steve St Angelo)

 

 

COMEX Registered Silver Owners Per Ounce Jump To Record Leverage

by SRSrocco on June 7, 2016 • 18 Comments

Something very interesting took place in the COMEX Registered silver inventories last week. There were two very large transfers of silver from the Registered to the Eligible category. What makes these two large withdrawals so interesting is that the Registered silver inventories are now at a record low.

The first large transfer of silver was reported on June 1st, in which 2.5 million oz (Moz) were taken out of the CNT Depository and another 410,000 oz from HSBC. Nearly 3 Moz of silver were transferred out of the Registered inventories in one day:

Then on June 3rd, another 3.5 Moz were transferred out of the Registered silver inventories on Brinks and put into the Eligible category:

In just three days, the total Registered silver inventories at the COMEX fell from almost 30 Moz down to 23.1 Moz. Thus, COMEX Registered silver inventories are the lowest they have been in more than 15 years.

The chart below, thanks to Nick Laird of Sharelynx.com, shows total Registered silver inventories on the top and owners per ounce on the bottom:

This chart, going all the way to 2001, shows the last time total Registered silver inventories were at a low was in July 2011. This was at the time silver hit a record high of $49. As the price of silver bottomed in 2008 and surged to nearly $50 in 2011, the Registered silver inventories fell from almost 90 Moz down to 26 Moz.

What is interesting this time around is that the Registered silver inventories declined from a peak of 70 Moz in the beginning of 2015 to 23 Moz currently on very low silver prices. Furthermore, the “Owners Per Ounce” of Registered silver is at a record 42. Which means for each outstanding contract (195,000 contracts), there are 42 owners per each ounce of Registered silver.

We can see the big change if we look at a one year chart:

You will notice in June 2015, during the huge spike of retail silver investment, that the total Registered silver inventories were nearly 60 Moz. Over the next several months Registered silver inventories fell to approximately 42 Moz. This was at the time that investors had to wait 2-3 months for certain retail silver investment products.

Then in October 2015, the tightness in the retail silver market began to loosen as the “Forecasted” market crash did not occur. The Registered silver inventories stabilized and leveled off until the end of the year. However, more large Registered silver withdrawals and transfers continued again in January 2016 as the price of silver surged from less than $14 to nearly $16 in March. This was also at the same time the Dow Jones fell 2,000 points.

Even though the Registered silver inventories increased in March, they are currently at 15 year lows. Moreover, the number of Owners Per Ounce of Registered silver has never been higher. If we look at the 15 year chart above, we can see that the Owners Per Ounce of silver went exponential starting in 2016.

Lastly, I believe something quite interesting is going on in the silver market even though precious metal analyst Keith Weiner suggests there is weak demand. Sure, there might be weak demand currently due to falling industrial silver consumption, but the long-term trend points to a much diffehttps://srsroccoreport.com/comex-registered-silver-owners-per-ounce-hits-record-leverage/rent picture. I will be discussing this in detail in an upcoming article this week.

 

END

 

Copper is crashing again this morning, down to $2.01 per lb, the lowest levels since January.  As copper deteriorates in price so does the global economy.  This should put huge pressures on Glencore, Noble Industries, Trafigura and other base metal companies:

 

(courtesy zero hedge)

 

Copper Is Crashing Again…

Dr.Copper is sick again as the almost unprecedented surge in inventories, that we detailed previously, continues to pressure the economic metal to its lowest levels since January…

 

 

As LME Copper inventories explode higher

 

As Bloomberg details,

Copper held in Asian warehouses tracked by the London Metal
Exchange jumped 50 percent in the past two days, the most in seven
years.

 

 

Supplies are moving to Singapore, South Korea and Taiwan from China,
where stockpiles tracked by the Shanghai Futures Exchange have almost
halved since mid-March.

 

Base metals are still trading at “relatively low levels,” Jens
Naervig Pedersen, a senior analyst at Danske Bank in Copenhagen, said by
e-mail. “Uncertainty over the outlook for global manufacturing is outweighing the positive effect of the lower dollar,” he said.

Whether this is more CCFD unwinds or the hangover from the massive
speculative bubble of the last 3 months is unclear but the inventory
spike in almost without precedent.

 

end

We brought you this story yesterday but it is worth repeating.  Commerzbank may hoard billions of euros in order to pay ECB charges.  No doubt, they will do what insurance giant Munich Re did in March : hoard Euro paper bills but also gold!

 

(courtesy zero hedge)

 

Commerzbank may hoard billions to avoid ECB charges, Reuters says

Section:

By Arno Schuetze and Andreas Kroner
Reuters
Wednesday, June 8, 2016

FRANKFURT, Germany — Commerzbank, one of Germany’s biggest lenders, is examining the possibility of hoarding billions of euros in vaults rather than paying a penalty charge for parking it with the European Central Bank, according to sources familiar with the matter.

Such a move by a bank part-owned by the German government would represent one of the most substantial protests yet against the ECB’s ultra-low rates, which have been criticized by politicians including Finance Minister Wolfgang Schaeuble.

Although no decision has yet been taken, the lender has held discussions on the matter with German authorities, said two officials, who asked not to be named because of the sensitivity of the matter. …

… For the remainder of the report:

http://www.reuters.com/article/us-commerzbank-ecb-idUSKCN0YU1HW

 

END

Something VERY BIG is afoot! (public article)

 

 

For more than three years we have watched the COMEX very closely.  The initial clue to begin watching were the waterfall events where the amounts of paper gold and silver sold simply dwarfed what was being mined.  I have said many times after the smackdowns, “first, no one has this much (gold or silver), second, no trader would ever sell in this fashion and destroy the price he will receive for the sale.  Clearly the sales were done to affect price downward”.  Each time I have written on this topic and suggested it would ultimately end with a delivery default I have been trolled.  It looks very much like we will soon find out a default of delivery is not only possible but highly probable.
Starting with gold, last month (May) saw 221,000 ounces stand for delivery.  This amount actually grew during the month which is highly unusual as the amount standing has ALWAYS dropped during delivery periods, this is the first time to my knowledge that the amount standing actually increased.  For comparison, May 2015 delivered only 2,500 ounces.  Looking back at June of 2015, the amount standing on first notice day was 509,000 ounces.  The final amount delivered was 295,000.  As I have written and questioned before, who would fully fund their account 100% to take delivery …and then “go away”?  The answer of course is someone willing to accept a “premium” as a bribe to not take delivery.
This June as you know does look to be quite interesting.  The initial amount standing was 49.119 tons or over 1.5 million ounces.  The amount dropped on day two by about 4 tons but has since gained back nearly all of it to stand at 49.11 tons.  (If I am not mistaken, this month is the largest month of gold contracts ever standing for delivery.)  Over 40 tons have already been served so we know these longs could not be persuaded to “go away”.  We have seen no evidence of delivery for March, April or May.  If we add these together with June, we have 65.813 tons standing with only 51.12 tons of registered gold. 
  My point is this, someone very real and very big is standing for gold.  This “someone” would not be bribed to go away last month and does not look like they will go way this month!  Who is this long who all of a sudden cannot be bribed to stand down?  As you know, I have speculated the Chinese (and Russia) have been positioning themselves to abandon the dollar as the reserve currency.  I theorized nearly two years ago it was the Chinese who held the long month after month and rolled them …until they won’t and then demand delivery.  I still believe this is the case as the open interest in silver has stayed so high, only pockets as deep as a sovereign could have sustained the losses.  It also needs to be said again, no market has ever seen open interest expand to all time record highs …while the price was plumbing multi year lows.  A reconciliation will come at some point, either open interest needs to be washed out or price skyrockets, one or the other.
  Looking specifically at silver, we have a true potential atomic bomb in the works for July.  COMEX claims to have 22,482,000 ounces registered and available for deliver.  This number is an ALL TIME low for “registered” ounces.  To put this number in perspective, it is less than $400 million dollars and only about 10 days of global production.  Also in perspective, customers have already withdrawn 12,244,000 ounces of silver in just the first 8 days of June!  Finally, the real shocker is the July contract.  First, the open interest for July of over 107,000 contracts is more than 50% of the entire open interest.  This represents over 536 MILLION OUNCES!  Do you realize this amounts to over 60% of total global production on just one bourse and in just one single month?  Obviously there will not still be 536 million ounces standing for delivery by July 1st, but as it stands now there are contracts open to deliver 24 ounces for every 1 ounce registered for delivery. 
  So, is a delivery default here and now in June or July?  I am sure I will hear “they will never default, they will cash settle”.  “Cash settlement” IS default, please do not delude yourself into thinking it isn’t.  If you believe cash settlement is OK, what will you think AFTERWARDS when your cash will not buy metal?  There is no way to tell if it is here and now but it certainly looks possible.  Something has definitely changed.  The longs of the past who would stand on first notice day only to mysteriously disappear during the delivery period seem to have changed or …are now different entities.  It is clear by looking at past deliveries and current inventories that COMEX is not meant to be a major delivery hub.  It has been “used” to “price” gold even though very little real metal changed hands.  I believe this is about to change as actual gold being traded will become the pricing mechanism.  The about face in the price action over the last six months and now the amounts standing tell you something very big is afoot.  We already know that physical metal has been moving from West to East for years.  I believe we are about to find out the pricing mechanism itself is being moved from West to East.  Stay tuned!
This is a public article, if you would like to read and hear all of our work, please click here https://www.jsmineset.com/membership-account/membership-levels/ to subscribe.
Standing watch,
 
Bill Holter
Holter-Sinclair collaboration
Comments welcome  bholter@hotmail.com
end

Your early THURSDAY 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  UP to 6.5624 ( REVALUATION NORTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.5779) / Shanghai bourse  CLOSED HOLIDAY / HANG SANG CLOSED HOLIDAY

2 Nikkei closed DOWN 162.51 OR 0.97% /USA: YEN FALLS  TO 106.45

3. Europe stocks opened ALL IN THE RED  /USA dollar index UP to 93.83/Euro DOWN to 1.1346

3b Japan 10 year bond yield: FALLS  TO -.125%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.45

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  50.79  and Brent: 51.91

3f Gold DOWN  /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 DOWN for WTI and DOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10 yr bund FALLS to 0.045%   German bunds in negative yields from 9 years out

 Greece  sees its 2 year rate FALL to 7.62%/: 

3j Greek 10 year bond yield FALL to  : 7.38%   (YIELD CURVE NOW COMPLETELY FLAT)

3k Gold at $1259.40/silver $17.06(7:45 am est)  RESISTANCE AT 16.52 

3l USA vs Russian rouble; (Russian rouble DOWN 58 in  roubles/dollar) 64.20-

3m oil into the 51 dollar handle for WTI and 51 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.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 109.08 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9616 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0909 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.

3p BRITAIN IN LAST LEG OF ITS CAMPAIGN AS TO WHETHER EXIT THE EU.

3r the 9 Year German bund now  in negative territory with the 10 year FALLS to  + .045%

/German 9 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 1.681% early this morning. Thirty year rate  at 2.488% /POLICY ERROR)

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

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

 

Futures Slide On Rising Dollar As Global Bond Yields Hit Fresh Record Lows

Please do not adjust your screens: that off-green color you are seeing, that is not a malfunction. Yes, for the first time in six days, global stocks are lower with the MSCI all-country world index dipping from a 6 month high dragged down by lower European and Japanese equity markets, as the USDJPY dropped to a fresh five-week low while Treasury yields continued to hit new record lows because, as Bloombergexplains, “traders assessed the outlook for the global economy.” It is unclear if that means that the outlook is suddenly much brighter. After all, it was last Friday’s recessionary payrolls that sent the S&P soaring to just shy of all time highs, so in this bizarro, centrally-planned “market”, we need more clarification.

The global stocks gauge fell 0.4%, led by telecom and materials shares. The Stoxx Europe 600 Index dropped 1 percent, heading for its biggest slide since May 23. S&P 500 futures expiring this month retreated 0.4%. Markets in China and Hong Kong were closed today,

It also appears the algos have gotten tired of first creating then chasing oil momentum because after hitting almost record overbought levels, oil finally fell and the Bloomberg Commodity Index erased earlier gains, putting it on track for the first decline in seven days after earlier advancing as much as 0.4%. WTI dipped back under $51 following yesterday’s late day algo-driven buying scramble, down 0.9% to $50.78, while Brent dropped 0.3% to $52.34 a barrel.

However, while “risk” assets such as stocks and commodities dipped, bonds rose, with U.K. gilt and German Bunds yields declining to a record low and a Japan 5 year auction pricing at a fresh average record low yield overnight. New Zealand’s currency jumped after the central bank refrained from cutting borrowing costs.

Some more humor: this is what Bloomberg has to say: “Global economic optimism has cooled because of weak U.S. jobs data, a lower growth forecast from the World Bank and the U.K.’s looming referendum on quitting the European Union. Central banks are still pursuing accommodative policies, with the European Central Bank buying corporate bonds for a second day and the Bank of Korea unexpectedly cutting rates.” Oh so it took traders 5 days to spot the “weak US jobs data” and 2 days to finally read the article on the growth forecast cut? Golf clap.

And now some even more fantastic quotes: “Growth still doesn’t look brilliant,” said Peter Dixon, global equities economist at Commerzbank AG in London. “The kind of rally we’ve had in the past few days across most assets doesn’t tend to last very long.” Oh but it can Peter – after all, all it takes is a bunch of lunatic central bankers who are left with nothing to lose and intent on blowing the biggest bubble in history, to keep doing what they do so well (for the full slamdown, read DB’s response). Here, James gets it: “Monetary policy remains accommodative globally and expectations for a rate hike in the U.S. have been pushed back,” James Woods, an analyst at Rivkin Securities in Sydney, said by phone. “That should be supportive of equities.” That’s right James: bad news for millions of US workers – for the 8th year in a row – is great news!

The dollar hit a five-week low against the yen, hurt by falling Treasury yields amid waning expectations that the Federal Reserve will lift interest rates anytime soon. Those expectations saw German 10-year Bund yields hit a low of 0.034 percent, not far from negative territory in which $10 trillions worth of bonds globally already trade at.

Market Snapshot

  • S&P 500 futures down 0.4% to 2101
  • Stoxx 600 down 0.8% to 342
  • FTSE 100 down 0.8% to 6251
  • DAX down 1.2% to 10099
  • S&P GSCI Index down 0.2% to 388.9
  • MSCI Asia Pacific down 0.6% to 132
  • Nikkei 225 down 1% to 16668
  • S&P/ASX 200 down 0.1% to 5362
  • US 10-yr yield down 3bps to 1.68%
  • German 10Yr yield down less than 1bp to 0.05%
  • Italian 10Yr yield down 1bp to 1.38%
  • Spanish 10Yr yield down 2bps to 1.41%
  • Dollar Index up 0.21% to 93.79
  • WTI Crude futures down 0.4% to $51.01
  • Brent Futures down 0.7% to $52.14
  • Gold spot down 0.3% to $1,259
  • Silver spot up less than 0.1% to $17.06

Top Global News

  • Soros Said to Return to Hands-On Trading, Sees Market Shifts: Has been spending more time in the office directing trades and recently oversaw a series of big, bearish investments
  • China’s Factory-Gate Deflation Eases in Capacity-Cut Drive: May producer price index fell 2.8%, least since late 2014
  • UBS to Cut Managers at U.S. Wealth Unit, Recruit Fewer Advisers: Headcount reduction will mostly hit middle and senior managers, including some at main offices in New Jersey, New York
  • Twitter Confident Systems Not Breached By Hackers: Techcrunch: Co. confident that “our systems have not been breached,” TechCrunch says citing a spokesperson responding to reports that >32m Twitter login credentials have been leaked; Ross Hoffman to Run Twitter Media Team: Recode
  • Blackstone Said to Have $200 Million Profit in Hawaii Deal: Hyatt Waikiki Beach resort to sell to Mirae for $780m
  • DOJ Asks Supreme Court to Overturn Apple Patent Ruling: Reuters: DOJ asked the Supreme Court to send Apple, Samsung’s smartphone patent case to trial court for more litigation
  • Ralph Lauren Said to Hire Coach’s Jane Nielsen as CFO: WSJ; Coach CFO Nielsen to Leave Co. to Pursue Another Opportunity
  • Avaya Said to Meet Creditors as It Wrangles $6 Billion Debt Load: Discussions will put co. face-to-face with a group of lenders including Blackstone Group and Apollo Global Management
  • Samsung May Supply Batteries to Tesla Energy, CEO Musk Says: Unit provides electricity storage for homes, businesses
  • Solar Makes Up Most of New U.S. Power Capacity for First Time: Solar accounted for 64% of new capacity, wind added 33%
  • Puerto Rico Bill Faces House Vote Despite Uncertain GOP Support: Republicans will likely need robust support from Democrats to pass the measure
  • Caesars Judge Says He May Not Be Able to Halt Creditor Suits: Casino giant asking for freeze on cases in Delaware, New York

Asia equity markets shrugged off the positive US close and traded cautious with a lack of demand amid several market closures in the region. Nikkei 225 (-1.0%) underperformed on a firmer JPY and weaker than expected Machine Orders in which the M/M figure contracted the most since May 2014. ASX 200 (-0.2%) also suffered from broad-based weakness, although commodity strength stemmed losses after oil prices extended its gains following the DoE inventory drawdown. Elsewhere, the KOSPI (-0.1%) was initially supported following an unexpected 25bps rate cut by the BoK but then conformed to the downbeat sentiment, while mainland Chinese and Hong Kong markets were closed for holiday. 10yr JGBs traded marginally higher amid the risk-averse tone, while the 5yr auction saw the highest b/c since 2014, a narrower tail in price and the lowest accepted price surpassing estimates.

Top Asian News

  • Korea Unexpectedly Cuts Rate to Support Debt Restructuring: Only one of 18 economists in survey correctly picked move
  • Korea Bond Yields Drop to Records as BOK Signals Worst Not Over: BOK Governor Lee Ju Yeol says S. Korea seems to be getting closer to lower rate limit
  • RBNZ Keeps Key Rate at 2.25% as Inflation, Housing Pick Up: Governor Wheeler says further easing may still be needed
  • Tencent Said to Weigh Supercell Deal at $9 Billion Valuation: SoftBank is selling assets to strengthen balance sheet

European shares fell for a second straight day, with a drop in Vodafone weighing on the telecom sector and Essentra hit by a profit warning.  Risk-off tone dictates the state of play in Europe with the Euro Stoxx (-1.1%) seeing heavy losses this morning amid the softness across the commodity complex with WTI crude edging towards USD 51.00bbl . Additionally, the DAX has been one of the underperformers led by utility giant EON (-6.8%) as they go Ex Div. As such, this has underpinned the gains in Bunds, while the 30yr outperforms on the back of duration buying with the yield curve continuing to bull flatten amid the front end lagging with oil prices hovering near 8-monh highs.

Top European News

  • ECB Said to Buy Volkswagen Securities in Second Day of Purchases: Purchases included securities issued by Volkswagen, Continental and Orange, according to a person familiar
  • Draghi Says Economic Cost of Delaying Reforms Too High to Ignore: Called on politicians to help the ECB’s bid to restore economic health to the region by accelerating reforms, comments in speech at Brussels economic forum
  • U.K. House Prices Predicted to Drop for First Time Since 2012: RICS survey shows London home prices already falling in May
  • Dong Valued at $15 Billion Joins List of European IPO Giants: Share sale raises gross proceeds of DKK17.1b
  • Aspen to Buy Anaesthetics From AstraZeneca for $520 Million: Will also pay AstraZeneca royalties and as much as $250m in additional sales-based installments over the next two years
  • Glencore Sells Agri Stake to Canadian Fund for $625 Million: British Columbia Investment Management Corp buys 9.99% stake
  • Telefonica Said to Seek Sale of Argentine TV Broadcaster Telefe: Disposing of non-core assets under new chairman

In FX, the Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, gained 0.3 percent, snapping a two-day drop. The U.S currency strengthened 0.4 percent to $1.1347 per euro and was 0.5 percent weaker against the yen. The kiwi soared as much as 2 percent to 71.48 U.S. cents, its strongest level in about a year, after the Reserve Bank of New Zealand refrained from cutting rates and said it expects inflation to accelerate.  Risk sentiment has been driving FX this morning, with USD/JPY driven lower again to take out the Monday lows at 106.35, but limited follow through below here as we hold comfortably off 106.00 for now Nevertheless, AUD, CAD and GBP have suffered a little in line with this, while NZD has had some of the shine taken off the post RBNZ rally. The EUR/USD slipped back into the mid 1.1300’s. In the GBP, more data proving the UK economy is holding up despite the uncertainty over the Brexit vote in 2 weeks, as the trade deficit narrowed on the month, whilst also exceeding expectations. GBP lower nevertheless, with Cable now in the mid 1.4400’s. Losses proving hard fought though, but this is largely down to lower participation. Another day of slim pickings for US data, with only weekly claims and wholesale inventories to look to, but Wall Street now key for the JPY pairs after the price action see this morning.

In Commodities, WTI and Brent have traded in negative territory in the EU session and this comes in tandem with broad based weakness across the commodities sector with Gold USD 1252.10/oz down 0.37% in EU trade. U.S. crude oil fell 0.9 percent to $50.78 a barrel after hitting a 11-month high of $51.67 a barrel. Brent crude rose as high as $52.86 a barrel, highest since October 2015, but was last trading lower at $52.23 a barrel. Spot gold dropped after hitting a three-week high of $1,266.01 an ounce, while aluminium fell 1 percent after climbing to a one-month high of $1,614.50 a tonne. Copper also fell. “I think gold is going to stay range bound until we see more confirmation. We need more confirmation from labour market data in the U.S. that we get in a month from now. The market wants to see at least two data points,” said Dominic Schnider of UBS Wealth Management in Hong Kong. Silver is also down 0.75%. This morning base metals have been quiet as Chinese markets are closed but copper has edged higher rising 0.7% and an average gain across the board of 1.2%, today’s volumes have been light with 2,597 lots traded.

Looking at today’s calendar, it’ll be interesting to see how last week’s initial jobless claims data comes in (270k expected) in light of the weak payrolls report. Later on this afternoon we’ve also got the April wholesale trade sales and inventories report. Away from the data we’ve got the ECB’s Draghi due to speak at 8am BST this morning where he opens the Brussels Economic Forum so it’ll be worth seeing if anything of interest comes out of that.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • European equities enter the North American crossover lower across the board with risk-averse sentiment gripping the region
  • USD/JPY has been driven lower again to take out the Monday lows at 106.35, but limited follow through below here as we hold comfortably off 106.00 for now
  • Looking ahead, highlights include US Initial Jobless Claims and Wholesale Inventories
  • Treasuries edge higher in overnight trading, global equities and commodities sell off; auctions conclude with $12b 30Y bonds, WI 2.49%, last sold at 2.615% in May, extended a pattern of tails by 30Y refundings.
  • South Korea’s central bank unexpectedly cut the benchmark interest rate to a new record low Thursday, citing growing risks to the economy including slowing global trade and the government’s push to restructure indebted companies
  • The European Central Bank bought corporate bonds in euros for a second day as it expanded its stimulus program for the region’s flagging economy; The bank’s entry into the corporate bond market included buying bonds with junk ratings and saw purchases of notes from troubled German carmaker Volkswagen AG
  • Billionaire investor George Soros has become more involved in trading at his family office, concerned about the outlook for the global economy and the risk that large market shifts may be at hand, according to a person familiar with the matter
  • “Everything is being driven by high liquidity that ultimately is being provided by central banks,” Simon Quijano-Evans, chief emerging-market strategist at Commerzbank AG, Germany’s second-largest lender, said in London
  • UBS Group AG, which said last month it’s looking for ways to cut costs, is eliminating some management positions in its U.S. wealth unit and reducing the number of financial advisers recruited from competitors
  • U.K. exports surged 9.1% in April to their highest level in almost three years as Britain shipped more to countries both inside and outside the European Union

 

DB’s Jim Reid concludes the overnight wrap

The post-payrolls and post-Yellen slow grind higher continues for US equity markets with the S&P 500 continuing to edge to within touching distance of that record high. Yesterday it closed up +0.33% and it means we’ve not had a swing of greater than 0.50% either way for the index since May 25th. A fourth consecutive weaker day for the US Dollar seemed to be the trigger with little other newsflow for markets to really feed off. European equity markets had actually edged lower (Stoxx 600 -0.49%) earlier on following a big two-day rally as peripheral banks came under pressure again while those moves in the Bund market were also closely watched. 10y Bund yields actually touched an intraday low of 0.032% only to give up those gains into the close to finish more or less unchanged around 0.053%.

Meanwhile, much of the chatter yesterday was on how much of an impact the start of the ECB corporate sector purchasing program, which kicked off yesterday, would have on markets. Certainly the price action in the European CDS indices was more one of consolidation that anything else with the iTraxx Main and Crossover indices little changed on the day. All of the suggestion was that they were very much active through the secondary market as we’d expected.

Flipping over to Asia now where the latest inflation numbers have been released in China. Headline CPI has printed at -0.5% mom in May, the third straight monthly decline which has had the effect of lowering the YoY rate by three-tenths to +2.0% (vs. +2.2% expected). Another slowdown in food prices appears to have been the main driver there. On the other hand, there was a notable increase in the latest PPI print. Prices rose +0.5% mom last month which has resulted in the YoY rate increasing to -2.8% (vs. -3.2% expected) from -3.4%. Producer prices have actually edged higher for three consecutive months now.

With markets in China and Hong Kong closed today, we’ll have to wait to see what the impact there is although it’s largely a sea of red for markets elsewhere in Asia. The Nikkei (-0.91%), Kospi (-0.22%) and ASX (-0.59%) are all lower while there’s also been some action in the FX market. The Kiwi Dollar has rallied nearly 2% after the RBNZ held rates on hold again with some concern about financial stability risks stemming from the housing market being attributed. Meanwhile the Bank of Korea surprisingly cut its benchmark rate this morning by 25bps to 1.25% after expectations had been that they would stay put. The Won immediately weakened 0.7% post the move but is back to unchanged now.

Elsewhere while both US equities and credit were a smidgen stronger yesterday, Gold actually rallied a robust +1.53% while Treasuries were also well bid with the benchmark 10y yield trading down a couple of basis points to 1.703%. Oil continued its surge too with WTI (+1.73%) rallying hard for the third consecutive day to settle up above $51/bbl now. The latest EIA data showing a decline in US crude stockpiles helped, as did the concerning reports of more wildfires in Canada. Indeed two Canadian oil producers have been forced to halt production only just as output had recommenced and workers have again been evacuated in the Alberta region.

With regards to that JOLTS job openings report yesterday in the US, openings were reported as increasing to 5.79m in April (vs. 5.68m expected) from a downwardly revised 5.67m in March. That put the job opening rate at 3.9% from 3.8%, however the data also showed that the hiring rate dipped two tenths to 3.5% which is the lowest level since August 2014. Given this is one of Yellen’s most favoured series the recent spike lower is significant. Our US economists highlighted yesterday that in their view corporate profit margins may be one source of the weakness in hiring. Indeed they note that corporate profits have been down year-over-year for the last three quarters and they suggest that corporate profit margins have likely peaked in the current business cycle.

Away from this, the only other data of note was out of the UK with a surprisingly bumper industrial production report for April (+2.0% mom vs. 0.0% expected). That was the actually the largest monthly increase since 2012 and has had the effect of lifting the YoY rate to +1.6% from -0.2% in the month prior. Manufacturing production was also up a robust +2.3% mom during the month (vs. -0.1% expected).

end

 

ASIAN AFFAIRS

 

i)Late  WEDNESDAY night/ THURSDAY morning: Shanghai closed for holiday/ /Hang Sang closed for holiday. The Nikkei closed DOWN 162.51 POINTS OR 0.97% Australia’s all ordinaires  CLOSED DOWN 0.15% Chinese yuan (ONSHORE) closed UP at 6.5624 /Oil FELL to 50.79 dollars per barrel for WTI and 51.91 for Brent. Stocks in Europe ALL IN THE RED . Offshore yuan trades  6.5779 yuan to the dollar vs 6.5624 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS 

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

This is a biggy!  Japanese machinery orders have crashed over 11% on a month over month basis in April ( on a yearly basis 8.2% drop) and much worse than expected.  It is the biggest drop in over a year and the result was a huge 3 standard deviation miss. It now looks like Japan has entered its 7th recession since the financial crisis in 2008

(courtesy zero hedge)

7th Post-Crisis ‘Recession’ Looms As April Japanese Machinery Orders Crash Most Since 2009

end

b) REPORT ON CHINA

Last month saw a huge 116.5 surge in Chinese imports from Hong Kong.  If that was not earth shattering, then this month’s 242.6% explosion was!.  China is disguising its dollar outflows with these fake figures!

 

(courtesy zero hedge)

WTF Chart Of The Day: Chinese Trade Data Lies Exposed (Again)

If March’s 116.5% surge in China imports from Hong Kong didn’t raise eyebrows as the veracity of the trade data, then perhaps following last night’s data drop, this month’s 242.6% explosion year-over in China imports from Hong Kong must at minimum deserve a second glance.

As Bloomberg’s Tom Orlik previously noted, the implausible 242.6% YoY surge screams that China is clearly disguising capital flows…

Trade mis-invoicing as a way to hide capital flows remains a factor. In the past, over-invoicing for exports was used as a way to hide capital inflows.

 

The latest data show the reverse phenomenon, with over-invoicing of imports as a way of hiding capital outflows.

Does this look “real”?

 

Of course, no one actually looks at the details of the data of course – headlines are all that matters when the powers that be need an all-time-high to prove everything is awesome and give The Fed room to hike rates into this profit recession.

 

end

 

C. SOUTH KOREA

In an unexpected move, the Central Bank of Korea lowered its interest by by 25 basis points to 1.25% a record low.  This caused the won to fall back above the 1160 level and no doubt this will create further devaluations across the region

 

(courtesy zero hedge)

 

Currency Wars Re-Escalate As Bank Of Korea Eases To Record Low Rate With Surprises Rate Cut

END

 

EUROPEAN AFFAIRS

 

Deutsche bank takes on the ECB claiming NIRP and low interest rate policy is killing the economic scene as well as the banks who cannot make money in this environment:

courtesy Deustche bank/zero hedge)

Deutsche Bank’s Shocking ECB Rant: Warns Of Social Unrest And Another Great Depression

 END
On day one of  Mario’s binge into the purchasing of bonds of corporates, he bought junk rated bonds even though he stated he would not do so.
(courtesy zero hedge)

(courtesy zero hedge)

 

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

Euro/USA   1.1346 DOWN .0055 ( STILL REACTING TO USA FAILED POLICY

USA/JAPAN YEN 106.45  DOWN 0.326 (Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER

GBP/USA 1.4453 DOWN.0058 (GREATER THREAT OF BREXIT)

USA/CAN 1.2740 UP  .0054

Early THIS THURSDAY morning in Europe, the Euro FELL by 55 basis points, trading now WELL above the important 1.08 level FALLING to 1.1346; 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  CLOSED HOLIDAY / Hang Sang CLOSED FOR HOLIDAY      / AUSTRALIA IS LOWER BY 0.15%/ EUROPEAN BOURSES ARE ALL 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 THURSDAY morning: closed UP 155.47 OR 0.93% 

Trading from Europe and Asia:
1. Europe stocks ALL IN THE RED AS  THEY START THEIR DAY

2/ CHINESE BOURSES / : Hang Sang CLOSED HOLIDAY . ,Shanghai CLOSED HOLIDAY/ Australia BOURSE IN THE RED: /Nikkei (Japan) CLOSED IN THE RED /India’s Sensex IN THE RED

Gold very early morning trading: $1258.70

silver:$17.04

Early THURSDAY morning USA 10 year bond yield: 1.681% !!! DOWN 2 in basis points from WEDNESDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES to 2.488 DOWN 3 in basis points from WEDNESDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early THURSDAY morning: 93.83 UP 24 CENTS from WEDNESDAY’s close.(Now below resistance at a DXY of 100.)

This ends early morning numbers THURSDAY MORNING

END

And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield:  3.07% DOWN 1 in basis points from WEDNESDAY

JAPANESE BOND YIELD: -0.125% DOWN 2 1/2  in   basis points from WEDNESDAY

SPANISH 10 YR BOND YIELD:1.42%  DOWN 1 IN basis points from WEDNESDAY

ITALIAN 10 YR BOND YIELD: 1.38  DOWN 1 IN basis points from WEDNESDAY

the Italian 10 yr bond yield is trading 4 points lower than Spain.

GERMAN 10 YR BOND YIELD: 035% DOWN 2 FULL  BASIS POINTS ON THE DAY

END

 

IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

 

Euro/USA 1.1333 DOWN .0069 (Euro =DOWN 69 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/reacting to dovish YELLEN/ANOTHER FALL IN USA;YEN CROSS TODAY

USA/Japan: 106.87 UP .096 (Yen DOWN 10 basis points )

Great Britain/USA 1.4480 DOWN.0032 ( Pound DOWN 32 basis points/(STILL BREXIT CONCERN)

USA/Canada 1.2708 UP 0.0022 (Canadian dollar DOWN 22 basis points  AS OIL FELL  (WTI AT $50.51).

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was DOWN by 69 basis points to trade at 1.1333

The Yen FELL to 106.87 for a LOSS of 10 basis points as NIRP is STILL a big failure for the Japanese central bank/

The pound was DOWN 32 basis points, trading at 1.4480( BREXIT FEARS INCREASE )

The Canadian dollar FELL by 22 basis points to 1.2708, WITH WTI OIL AT:  $50.51

The USA/Yuan closed at 6.5590 

the 10 yr Japanese bond yield closed at -.125% DOWN  2 IN BASIS  points in yield/

Your closing 10 yr USA bond yield: DOWN 2 IN basis points from WEDNESDAY at 1.679% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.481 DOWN 3 in basis points on the day ( HUGE POLICY ERROR)

BANKS NEED THE LONGER BOND HIGHER IN YIELD: INSTEAD THE SPREAD LESSENS.

Your closing USA dollar index, 93.95 UP 36 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 THURSDAY

London:  CLOSED DOWN 65.70 OR 1.04%
German Dax :CLOSED DOWN 133/30 OR 1.31%
Paris Cac  CLOSED DOWN 43.12  OR 0.97%
Spain IBEX CLOSED DOWN 61.90 OR 0.70%
Italian MIB: CLOSED DOWN 145.82 OR 0.81%

The Dow was DOWN 19.86  points or 0.11%

NASDAQ DOWN 7.94 points or 0.18%
WTI Oil price; 50.51 at 4:30 pm;

Brent Oil: 51.87

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  64.21 (ROUBLE DOWN 59/100 ROUBLES PER DOLLAR FROM YESTERDAY) EVEN THOUGH THE PRICE OF BRENT FELL AND WTI FELL

TODAY THE GERMAN YIELD FALLS TO 0.0330%  FOR THE 10 YR BOND

.

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:

WTI CRUDE OIL PRICE 5 PM:50.43

BRENT: 51.81

USA 10 YR BOND YIELD: 1.686%

USA DOLLAR INDEX: 94.11 UP 52 cents

 

END

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

Trading Today in Graph form;  VERY IMPORTANT FOR YOU TO VIEW ALL THE CHARTS TODAY

end

 

This is troublesome! With the boat loaded with massive shorts on the 10 yr bond, you make imagine the trouble today as yields plummeted to 1.66%, the lowest in 4 months.

And for the first time in a week, the stock market got the message that the economy is not doing too good

(courtesy zero hedge)

Bond Bears Bewildered As Treasury Yields Tumble Below ‘Red Line’

Yesterday we warned that a combination of extreme short positioning in bonds and Treasury yields sitting at a crucial support level meant trouble was looming. Today that ‘support’ level of 1.70% for 10Y yields has been well andtruly broken as 10Y trades to 1.66% – its lowest in 4 months…

Across the entire Treasury futures complex – from 2Y to Ultras – net aggregate speculative positioning is about as short (in 10Y equivalents) as it has been since 2010…

 

And 10Y yields have definitively broken support…

 

The last time we broke this key level with such a heavy speculative short (thanks to The Fed telling everyone to be short bonds), we saw the Fed flash-crash in yields.

Finally, when do stocks “get it”?

Wholesale Inventories Rise Most In 10 Months, Sales Miss; Ratio Only Higher Post-Lehman

Wholesale inventories rose more than expected in April (up 0.6% MoM vs 0.1% exp) – the biggest monthly jump in 10 months – but sales disappointed (rising only 1.0% versus a 1.1% expectation). This sales growth topping inventory growth is a positive but for context the inventory-to-sales ratio remains at 1.35x – the highest level ex-Lehman on record.

They just keep building inventories… even as sales remain lower YoY…

 

The absolute “wholesale trade gap” did drop modestly…

 

While inventory-to-sales ratio did drop modestly, we remind ‘investors’ that the only time it was higher than this was in the immediate aftermath of Lehman…

Another darling of Wall Street, Restoration Hardware crashes after they slashed their guidance southbound! Restoration Hardware is owned by many hedge funds.

Why the guidance lower:  the consumer is not spending!

 

(courtesy zero hedge)

Restoration Hardware Stock Crashes After Company Slashes Guidance

Last quarter, the stock of Restoration Hardware crashed after it announced dreadful earnings, which however were somewhat redeemed after the company came up with the most original of excuses: in an exercise of absurd reflexivity, RH blamed its own falling stock price on its poor results: “Historically, our business has a correlation to large movements in stock prices as we believe asset valuations influence our customers’ buying patterns.” It also blamed various other things, all of which boiled down to one simple thing: the consumer is simply not spending.

Then moments ago, RH reported its Q1 earnings which this time were not quite as terrible, with revenue of $455.5MM, inside the forecast range, and above $452.8MM consensus, although the EPS loss of 5 cents missed estimate of 5 cents.

However, the reason why the stock is crashing right now is due to the company’s guidance. This is what it said:

The Company’s results for fiscal 2016 will be impacted by certain short term operational items including costs associated with RH Modern production delays and investments to elevate the customer experience, timing issues related to the transition from a promotional to a membership model, and a more aggressive approach to rationalizing its SKU count and optimizing inventory. These factors are negatively impacting the Company’s fiscal 2016 adjusted diluted EPS outlook by approximately $0.90 to $1.00.

As a result, the company slashed guidance and instead of the consensus estimate of $0.80 in Q2, now expected to generate only $0.28-$0.33 in the quarter, while revenues will grow only 1-3%, well below the previous estimate of  up 5%. To wit:

The Company is providing the following outlook for the second quarter of fiscal 2016 (including an approximate $2 million to $3 million net revenue and approximately $0.30 adjusted diluted EPS reduction per the short term operational items described above; these negative factors are partially offset by the addition of Waterworks during the second quarter of fiscal 2016):

 

  • Net revenues in the range of $505 million to $520 million
  • Adjusted net income in the range of $11.5 million to $13.5 million
  • Adjusted diluted EPS in the range of $0.28 to $0.33
  • Income tax rate of approximately 39%
  • Diluted shares outstanding of approximately 41 million

 

The Company is lowering its outlook for fiscal year 2016 (including an approximate $16 million to $17 million net revenue and $0.90 to $1.00 adjusted diluted EPS reduction per the short term operational items described above; these negative factors are partially offset by the addition of Waterworks during the second quarter of fiscal 2016):

 

  • Net revenues growth in the range of 1% to 3%
  • Adjusted diluted EPS in the range of $1.60 to $1.80
  • Capital expenditures in the range of $180 million to $210 million

The problem, just like last quarter, is that the dramatic drop in guidance has little to do with the company’s (once again) sliding stock price, or any of the excuses listed above, and everything to do with the US consumer, who contrary to Wall Street expectations, simply refuses to come out of his shell and spend.

If RH is a proxy for the rest of the retail sector, we expect a barrage of earnings warning to hit the tape over the coming weeks as we approach the end of the quarter.

Meanwhile, the stock is doing what it did so well this time last quarter: plunging.

 

end
My goodness! Goldman Sachs is now pounding the table that Obamacare has led to a rise involuntary part time employment as the expense of full timers and that a “few hundred thousand workers have received cut hours.  What took them so long!
(courtesy zero hedge)

Goldman Crushes Democrat’s Dreams: Shows Obamacare Has Cost “A Few Hundred Thousand Jobs”

end

 

And now the real story by the JOLTS job openings and hirings/firings/

(courtesy Mish Shedlock/Mishtalk)

 

 

BLS Says Jobs Openings Up; Actually, Openings Falling Fast!

Submitted by Mish Shedlock of MishTalk

The BLS JOLTS (Jobs Openings and Labor Turnover) report came out today.

The BLS claims jobs openings are up. Based on an alternate reports, I suggest opening are not only down, but falling steeply.

The implications are huge, so let’s dive into the discrepancies.

BLS: Job Openings vs. Hires

That’s how the BLS sees things. Before we dive into the alternate view, let’s take a peek at mainstream media analysis.

Mainstream JOLTS Comments

Bloomberg Econoday spins it this way:

Job openings are up but hiring isn’t, in what are mixed but still favorable results from the April JOLTS report. Job openings rose to 5.788 million from a downward revised 5.670 million in March. The job openings rate also rose, up 1 tenth to 3.9 percent. The hiring rate, in contrast, fell a sharp 2 tenths to 3.5 percent in what perhaps confirms anecdotal reports that employers are having a hard time finding qualified applicants for skilled positions. In a separate indication that points to weakness in worker confidence, the quits rate fell 1 tenth to 2.0 percent suggesting that workers are not shopping their skills around to other employers. Back on the positive side, the layoff rate fell 1 tenth to a low 1.1 percent. This report is mixed and embodies what are increasingly mixed signals across employment indicators in general.

Supposedly hiring is down because employers cannot find qualified workers.

How about the fact that part-time employment for economic reasons soared by 468,000? For more grim details, please see Fed Hiking Not: Payroll Jobs +38K, Employed +26K, Labor Force -458K, Revisions -59K.

Beat the Street

CNBC reported 5.8 Million Job Openings in April vs 5.7 Million Expected.

Hooray!

Job Openings – Real Time Macroeconomics

Jon Hartley, Researcher and Policy Analyst for Real Time Macroeconomics see things this way (anecdotes Mish).

Clearly someone is wrong. Who is it?

Red Flag on the US Economy

Please consider the Financial Sense report Real Time Online Jobs Data Continues to Raise a Red Flag on the US Economy.

Following the big jobs miss last Friday, we recently showed that this trend is likely to continue without a turnaround in leading employment indicators.

Another important data point that we’ve been keeping our eye on is online jobs listings, which, as we noted last month, were beginning to plunge and rollover in a manner similar to the last US recession

 

Our contact is Jon Hartley at Real Time Macroeconomics who previously worked at the Federal Reserve, Dallas Cowboys, and Goldman Sachs Asset Management as a quantitative analyst, economic researcher, and data scientist of sorts.

 

When we spoke to him a couple months ago on our podcast about his company and using real-time online data for tracking changes in the economy, he said there were some signs of leveling off but no clear red flags just yet.

 

Since that time, however, the data they track has moved from leveling off to outright decline and Jon just recently emailed us to say he is now “leaning toward forecasting a likely downturn/recessionary scenario” and said, “I don’t think last week’s poor jobs report was just a blip.”

 

Though the data only goes back around 10 years, it’s clearly rolled over in a manner similar to the last recession. As we noted last month, if the online data is providing a more accurate picture of the US economy vs. the official government surveys, then “expect to see a string of downward revisions” and continued misses moving forward. Last week that prediction was fulfilled quite strongly with only 38,000 jobs added and heavy downward revisions to the two prior months.

 

We recently spoke with Bob Eisenbeis, Cumberland Advisors’ Chief Monetary Economist and former Executive Vice-President at the Federal Reserve Bank of Atlanta, who made a very interesting observation on our show (airing Wednesday). Given the economic uncertainties currently present (he specifically cited the Great Depression as our closest parallel),forecast errors on government data will tend to be larger than normal.

 

The big worry, Eisenbeis said, is that US productivity continues to slow, which, as we recently discussed (See Chad Syverson Busts the Labor Productivity Mismeasurement Thesis) , is in all likelihood not a measurement issue, but more structural in nature. Unfortunately, there’s not much that monetary policy can do about this.

Why Believe Hartley?

I asked Cris Sheridan at Financial Sense a simple question: Why believe Hartley?

The answer is found in the May 17 FS report Plunge in Online Job Postings Raises Red Flag.

  1. The official JOLTS data is collected using a survey and has a smaller sample size.
  2. Online data may skew towards higher paying white-collar jobs (a forthcoming paper to be provided on this, Hartley noted)
  3. Real Time Macroeconomics shows only new online job openings whereas JOLTS may include unfilled job postings from prior months.

Given the above, the real-time online data is likely providing a more accurate picture of the US labor market vs. the official survey. Expect to see a string of downward revisions if that’s the case.

Downward Revisions

I have been discussing downward revisions for some time. If they come, revisions are likely to show the US is in recession already.

More and more things simply do not add up.

I have a report tomorrow listing 10 reasons the May jobs report was not an outlier. If you prefer to believe cheerleaders, I have another answer.

Jobs Report Just Noise Says J.P.Morgan

Earlier today ZeroHedge tweeted a comment from JPM. Here’s the conversation.

JPM looks at April JOLTS data and decides May payrolls “more noise than signal”

@zerohedge I propose JOLTS “more noise than signal”

Whom do you believe?

Also consider Fun with the BLS Birth/Death Model.

 

end
More faulty data: today the Dept of Labour states initial jobless claims for last week was 264,000 much better than expected and it is falling back toward 42 year lows.  Yet the Fed states that labour produced only 38,000 jobs and that was with a fake 200,000 plug in the B/D.
Who is right? both are wrong: the data is phony!
(courtesy zero hedge)

EBT Card Outage? 8 Days Into June And Many Americans Are Still Waiting For Food Stamp Money

Submitted by Michael Snyder via The Economic Collapse blog,

Widespread reports continue to pour in from all over the nation of “glitches” with the food stamp system.  It is eight days into the month and large numbers of people still have not received their benefits, and in other instances it is being reported that EBT cards are simply not working correctly.  So what in the world is going on here?  On downdetector.com there are scores of reports of problems with the EBT system from people all over the nation.  Could this simply be another example of government incompetence, or is something else at work here?

I had heard some rumblings about this over the past few days, but I had not really taken them seriously until I read an article from highly respected author Ray Gano

It interesting over the weekend I got several emails telling me about cell phones being down, internet being down, and get this, EBT cards not working and having no money associated to them.

 

This is a concern because when the US Government has payment failures, then there is possibly something happening that the press is not telling you about.

 

Now, we know that computers have problems and that states, counties and cities run on computers. But what is interesting is that since the beginning of 2016, The US government has had over 2,700 reports on downdetector.com showing that they have been late loading the money onto these EBT cards.

 

Folks, we are now going on 8 days where the Government has not paid the EBT payments so that people have food.

So I went over to downdetector.com myself, and I was stunned to see that reports of EBT outages continue to pour in every hour.  Here are just a few of the recent comments that have been left by people that are still waiting for their food stamp benefits for June…

Heidi Lynn: I was supposed to get mine on the 5th and still nothing. Even ebt NJ site says $0 as well as my EBT card says $0. I’m on disability. I forgot to add I tried calling NJ Board of Services and was on hold for over an hour. I had to hang up to take dog out, etc. Does anyone know what’s going on yet?

 

Ann Wilson: Now that it’s been a whole week since I was supposed to get my June benefits, and haven’t, I’m planning on going to my Illinois FCRC office. I hope they will be able to fix this difficulty.

 

Jenn Johnson: I always get mine on time. I was due to get mine today June 7th and nothing. I am from kentucky. Why is there nothing on the news about this?

 

Jarrett Manhart: Havnt received mine either. They are never late. And my fone is off so i cant call em. Im on Wi-Fi down the street from me.

 

Sunny Nicole Jones: I haven’t gotten mine either! I’m glad it’s not just me though because then I would really be worried!

But when I went to confirm these widespread outages with articles from the mainstream media, I came up empty.

Either the mainstream media does not know what is going on yet, or it is being ignored.

If you have not gotten your EBT benefits for this month yet or you know someone that is in that position, please feel free to let me know.  I want to get to the bottom of this.  There are people all over the nation that are reporting problems with the food stamp system, but nobody seems to know exactly how widespread this issue is just yet.

Today there are well over 40 million Americans on food stamps, and a lot of them would start rioting tomorrow if you told them that their food stamp cards were being turned off permanently.

EBT cards are the modern equivalent of the bread lines of the 1930s.  Instead of having to wait in long lines for food, the government just zaps money on to EBT cards each month, and those that are hurting are able to get something to eat.

But down in Venezuela, extremely long food lines are a daily reality for much of the population right now.  The following comes from the Daily Mail

Venezuela was once South America’s richest nation, but a fall in oil prices combined with other economic problems has led to desperate citizens taking drastic measures.

 

Nearly half of Venezuelans say they can no longer afford to eat three meals a day, according to a recent poll by the local firm Venebarometro. The poll surveyed 1,200 adults at their homes during the first week of April and had a margin of error of plus or minus of about two percentage points

 

Those who can, cross the border into Colombia to buy, bring back and then use or sell food and other basic commodities.

Could you imagine not being able to provide three meals a day for your family any longer?

Close to half the population of Venezuela is already in that position, and the economic collapse down there grows worse with each passing day.

Most Americans just assume that nothing like that could ever happen here.

Most Americans just assume that the government will always have plenty of money to give out.

As I mentioned above, there are well over 40 million Americans that receive EBT benefits.

However, when you factor in all government programs, more than 100 million Americans get some form of money or benefits from the federal government each month.

So what would happen someday if suddenly the spigot was turned off?

What would those 100 million people do?

How would they survive?

Hopefully this current EBT outage is just a temporary technical glitch, and hopefully the government will get it fixed in short order.

But someday there will be a major crisis that will cause food stamp benefits to be cut off either permanently or for an extended period of time.

When that day arrives, what will that do to our communities?

This is coming soon…

As SHTFPlan.com’s Mac Slavo notes, this isn’t the first such incident and it certainly won’t be the last as an evermore impoverished populace becomes increasingly dependent on government handouts.

In 2013 we reported that the EBT card acceptance system in 16 states crashed, leaving thousands with no way to put food on their dinner tables. As further evidence of what may happen following a widespread outage wherein those on government assistance have no way of buying food and other necessities, considerwhat this woman had to say:

I go to the register and they ask me “how you going to pay.”

 

I said with food stamps.

 

“Oh, we’re shut down, you can’t pay with food stamps.”

 

I got kids to feed. You know?

 

And because the government’s down I can’t feed my family?

 

 

What’s going on with America? Now they trying to starve us to death?

 

…This is crazy

 

…I got six kids I have to feed.

 

 

I’m just trying to figure out how to get something to eat.

end

 

Falling tax receipts (withholding taxes) is for sure signalling a recession:

(courtesy Mish Shedlock/Mishtalk)

 

US Tax Receipts Signaling Recession?

Submitted by Michael Shedlock via MishTalk.com,

US federal personal tax receipts receipts are falling fast. So is the Evercore ISI State Tax Survey.

The last two times the survey plunged this much, the US was already in recession.

Is it different this time?

ISI Tax Receipts

I like to credit my sources. I picked that chart up from Liz Ann Sonders, Senior Vice President, Chief Investment Strategist, Charles Schwab & Co., Inc.

In turn, Sonders picked that up from Evercore ISI.

I added the recession bars and comments.

Each month, Evercore conducts a State Tax Receipts Survey across 16 states capturing 64% of the US population.

Although 2Q likely up vs 1Q, perhaps not as much as some are hoping as per tax receipts
Evercore ISI tax data

Unlike Sonders, I am not willing to state second GDP quarter will likely be up vs. first quarter.

Second Quarter GDP Estimates

  1. New York Fed Nowcast June 3: 2.4% New York Fed Nowcast Up to 2.4% (I’ll Take “The Under”); Modeling Error on Unemployment Rate?
  2. Atlanta Fed GDPNow June 1: 2.5%GDPNow Forecast Dips to 2.5% Following Construction Report
  3. Markit June 3: 0.7% to 0.8%Composite PMI Flirts With Contraction; Markit Chief Economist Estimates GDP 0.7-0.8%
  4. ISM June 3: 1.6%Non-Manufacturing ISM Much Weaker Than Expected

Manufacturing Productivity

Manufacturing Productivity 2016-06-07C

For productivity discussion, please see Productivity Declines 0.6%, Labor Costs Rise 4.5%; What’s Going On?

Recession?

Many things are outright screaming recession.

I expect huge revisions on numerous fronts. And I am not the only one.

END

Well that about does it for today

I am glad I was able to deliver you this commentary today as I was out of commission for quite a while.

see you tomorrow night

all the best

Harvey

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