July 11/Gold falls on a banker raid but silver remains positive/ The EU refuse to let Italy do a banking bailout/Helicopter money to commence in Japan/Deutsche bank’s CoCo bonds are now yielding 11.3% signalling trouble!/

Good evening Ladies and Gentlemen:

Gold:  $1,355 DOWN $1.60    (comex closing time)

Silver 20.27  UP 21 cents

In the access market 5:15 pm

Gold: 1355.50

Silver: 20.30

.

And now for the July contract month

For the July gold contract month,  we had 18 notices served upon for 1800 ounces.  The total number of notices filed so far for delivery:  4,065 for 406,500 oz or 12.643 tonnes

In silver we had 55 notices served upon for 275,000 oz.  The total number of notices filed so far this month for delivery:  1110 for 5,550,000 oz

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 296.777 tonnes for a loss of 6 tonnes over that period

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE BY 2594 contracts UP to 211,873, AND STILL CLOSE TO AN  ALL TIME RECORD. THE OI ROSE IN SYMPATHY TO THE  PRICE OF SILVER RISING BY 26 CENTS IN FRIDAY’S TRADING.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.059 BILLION TO BE EXACT or 151% of annual global silver production (ex Russia &ex China).

In silver we had 55 notices served upon for 275,000 oz.

In gold, the total comex gold ROSE BY 1108 contracts with gold’s FALL in price on FRIDAY to the tune of $3.50.Since most of the gain in price occurred after the comex closed on Friday expect tomorrow’s OI to be also  higher. The total gold OI stands at 655,955 contracts, CLOSE TO THE all time record SET last THURSDAY.(656,000 contracts)

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

we had non changes in gold inventory./

Total gold inventory rest tonight at: 981.20 tonnes

 

SLV

 NO CHANGE IN SILVER INVENTORY TO THE SLV

Inventory rests at 341.453 million oz.

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

1. Today, we had the open interest in silver ROSE by 2,594 contracts UP to 211,873 as the price of silver ROSE BY 26 cents with FRIDAY’S trading. The gold open interest rose by  1102 contracts up to 655,955 DESPITE  the price of gold FALLING by $3.50  ON FRIDAY. The comex gold OI is near the all time record level set yesterday.

(report Harvey).

 

2 a) Gold/silver trading overnight Europe, Goldcore

(Mark OByrne/zerohedge

 

3. ASIAN AFFAIRS

i)Late  SUNDAY night/MONDAY morning: Shanghai closed UP 6.82 POINTS OR 0.23%/ /Hang Sang closed UP 316.33 OR 1.54%. The Nikkei closed UP 601.83 POINTS OR 3.98% Australia’s all ordinaires  CLOSED UP 1.92% Chinese yuan (ONSHORE) closed DOWN at 6.6897 /Oil FELL to 44.88 dollars per barrel for WTI and 46.16 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.6890 yuan to the dollar vs 6.6897 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS QUITE A BIT 

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

Here it comes:  Helicopter money is to begin in Japan:

( zerohedge)

b) REPORT ON CHINA

NONE TODAY

4 EUROPEAN AFFAIRS

i)VisualCapitalalist’s Jeff Desjardins gives a great analysis on how the world’s largest derivative player will bring the whole deck of cards down

( zerohedge/Jeff Desjardins/VisualCapitilalist)

ii)a Deutsche bank’s chief economist now calls for a 150 billion euro bailout of the European banks.  Note:  bailout and not bail in.

( zero hedge)

iib)Trouble ahead:  CoCo bonds( hybrid bond-equity) of Deutsche bank soar to 11.5% yield as its a capital base falls below required levels:

( Sanders/Confounded Interest blog/zerohedge)

iii)Sunday night:  The Bank of England is now prepared to provide a flush fund to bail out all of those gated property funds

( zero hedge)

iv)The pound surges as Leadsom quits leaving May as the sole contender for the Prime Minister’s job:

( zero hedge)

v)Then: Theresa May confirmed as new leader of the Tory party and most likely its next Prime Minister:

( zero hedge)

vi)The chance for a bailout for Italian banks has just blown up in smoke.  It will be a bail in and that would be bad for bondholders and for moms and pops that are the majority owner of much of this non performing debt”

( zero hedge)

vi) Civil unrest in Berlin:

(zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Relations between the USA and Russia are deteriorating rapidly

( zero hedge)

6.GLOBAL ISSUES

We now have 13 trillion dollars worth of bonds in negative territory out of a total of 40 trillion.  What would happen if we got a 1% spike in rates?  What pain would then inflict? Answer: 2.4 TRILLION dollars worth of losses to Global banks;

(courtesy zero hedge)

7.OIL ISSUES

none today

8.EMERGING MARKETS

none today

9. PHYSICAL STORIES

i)Bill Murphy discusses Friday’s upside outside day reversal in gold and silver:

( GATA)

ii)Government debt is worthless as these governments can never repay their debt.  Even worse, they cannot repay the interest.  The only safe vehicle is gold and silver:

( Kingworldnews/Egon Von Greyerz)

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

i)Bank of America finally admits that there is no hope of a profits recovery as David Stockman has outlined to us on several occasions:

( zero hedge/Bank of America)

ii)Deutsche bank expects a complete collapse in the monthly job growth

( Deutsche bank/zero hedge)

iii)Janet Yellen’s favourite indicator of job growth; the Fed labour Market condition index: tumbles for the 6th straight month!  So much for that phony jobs report released on Friday.

( zero hedge)

iv)And you thought that the investigation on Hillary Clinton was over with respect to the email scandal.  Guess again:  Congress will now investigate with the help of the FBI on whether Clinton lied to the House on her 11 hr testimony:

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE TO AN OI level of 655,955 for a CONSIDERABLE GAIN of 1,102 contracts DESPITE THE FACT THAT THE PRICE OF GOLD  FELL BY $3.50 with respect to FRIDAY’S TRADING. We are now in the non active month of July. Somebody big is continually standing for the gold metal as July is generally a poor delivery month. The open interest for the front July contract stands at 1209 for a GAIN of 8 contracts. We had 4 notices filed on Friday, so we gained 12 contracts or an additional 1200 oz will stand for delivery in this non active month of July. We  are again witnessing the same scenario as in May and June whereby the front delivery month increases in OI standing for metal or a slight contraction.  The next big active contract month is August and here the OI fell by only 12,030 contracts down to 415,860  as this month starts its wind down until first day notice for the August contract, Friday,July 29/2016: less than 3 weeks away.  The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was VERY GOOD at 312,175. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was huge at 338,824 contracts. However the estimated volume for today was suppose to be around 594,000 contracts.  It seems that the data is compromised. The comex is not in backwardation.
Today, we had 18 notices filed for 1800 oz in gold
And now for the wild silver comex results. Total silver OI ROSE by  2594 contracts from 209279 UP TO 211,873.  We are still close to the new all time record high for silver open interest set on June 24. The front active delivery month is July and here the OI fell BY 91 contracts down to 1308. We had 117 notices served on FRIDAY so we gained 26 contracts or 130,000 additional silver ounces that will stand for delivery.The next non active month of August saw it’s OI RISE by 55 contracts UP to 465. The next big active month is September and here the OI ROSE by 1,797 contracts UP to 154,654.   The volume on the comex today (just comex) came in at91,318 which is HUGE. The confirmed volume ON FRIDAY (comex + globex) was HUGE at 85,935. Silver is not in backwardation . London is in backwardation for several months.
 We had 55 notices filed for 275,000 oz. in silver JULY contract month:INITIAL standings for JULY
July 11.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
 NIL
Deposits to the Dealer Inventory in oz NIL
Deposits to the Customer Inventory, in oz 
NIL
No of oz served (contracts) today
18 notices 
1800 oz
No of oz to be served (notices)
1191 contracts
119,100 oz
Total monthly oz gold served (contracts) so far this month
4065 contracts (406,500 oz)
(12.643 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month   35,253.3 OZ

Today we had 0 dealer DEPOSIT
total dealer deposit:  NIL   0z
Today we had 0 dealer withdrawals:
total dealer withdrawals:  nil oz
Today we had 0 customer deposits:
Total customer deposits; NIL   OZ
Today we had 0 customer withdrawal:
Total customer withdrawals:NIL  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 18 contracts of which 0 notices was stopped (received) by JPMorgan dealer and 10 notices was stopped (received)  by JPMorgan customer account. 
To calculate the initial total number of gold ounces standing for the JULY contract month, we take the total number of notices filed so far for the month (4065) x 100 oz  or 406,500 oz , to which we  add the difference between the open interest for the front month of JULY (1209 CONTRACTS) minus the number of notices served upon today (18) x 100 oz   x 100 oz per contract equals 525,600 oz, the number of ounces standing in this active month. 
 
Thus the INITIAL standings for gold for the JULY. contract month:
No of notices served so far (4065) x 100 oz  or ounces + {OI for the front month (1209) minus the number of  notices served upon today (18) x 100 oz which equals 525,600 oz standing in this non   active delivery month of JULY  (16.348 tonnes).
We gained 12 CONTRACTS or an additional 1200 oz of gold that will  stand for delivery in this non active month of July.
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 now have partial evidence of gold settling for last months deliveries We now have  +  6.889 TONNES FOR MAY + 49.09 TONNES FOR JUNE +  16.438 TONNES FOR JULY + 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 ; june 10 -.0008 / June 22:0.48 tonnes /June 23: 0489 tonnes, June 24..018; june 29 .036 tonnes; JUNE 30 2.49 /july 1 17.78 tonnes = 46.204 tonnes still standing against 46.009 tonnes available.
 Total dealer inventor 1,479,207.322 tonnes or 46.009 tonnes
Total gold inventory (dealer and customer) =9,539,972.918 or 296.733 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 296.733 tonnes for a loss of 6 tonnes over that period. 
 

THE GOLD COMEX IS AN ABSOLUTE FRAUD. THE USE OF KILOBARS AND EXACT WEIGHTS MAKES THE DATA TOTALLY ABSURD AND FRAUDULENT!!

 

 
 end
GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX
And now for silver
 
JULY INITIAL standings
 July 11.2016
Silver
Ounces
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
 61,315.170 OZ
SCOTIA, DELAWARE
Deposits to the Dealer Inventory
NIL
Deposits to the Customer Inventory
 /423,390.73 oz
BRINKS
No of oz served today (contracts)
55 CONTRACTS 
(275,000 OZ)
No of oz to be served (notices)
1253 contracts
(6,265,000 oz)
Total monthly oz silver served (contracts) 1110 contracts (5,550,000 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  3,066,729.1 oz
today we had 0 deposit into the dealer account
total dealer deposit :NIL oz
we had 0 dealer withdrawal:
:
total dealer withdrawals:  NIL oz
we had 1 customer deposit:
i) Into Brinks: 423,390.730 oz
Total customer deposit: 423.390.730 oz
We had 2 customer withdrawals
iv) out of Delaware: 976.100 oz
v) out of Scotia; 60,339.070 oz
:
total customer withdrawals:  61.315.170  oz
 
 
 
 we had 0 adjustment
The total number of notices filed today for the JULY contract month is represented by 55 contracts for 275,000  oz. To calculate the number of silver ounces that will stand for delivery in JULY., we take the total number of notices filed for the month so far at (1110) x 5,000 oz  = 5,550,000 oz to which we add the difference between the open interest for the front month of JULY (1308) and the number of notices served upon today (55) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JULY contract month:  1110 (notices served so far)x 5000 oz +{1308 OI for front month of JULY ) -number of notices served upon today (55)x 5000 oz  equals  11,815,000 oz  of silver standing for the JULY contract month.
We gained 26 contracts or 130,000 oz that will  stand for delivery in this active month of July.
 
Total dealer silver:  25.061 million (close to record low inventory  
Total number of dealer and customer silver:   150.792 million oz (close to a record low)
The total open interest on silver is NOW NEAR its all time high with the record of 218,979 being set June 24.2016.  The registered silver (dealer silver) is NOW NEAR  multi year lows as silver is being drawn out at both dealer and customer levels 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
July 11/no changes in gold inventory at the GLS/Inventory rests at 981.20 tonnes
JULY 8/ A  good sized deposit of 2.91 tonnes into the GLD/Inventory rests at 981.20
July 7/a good sized withdrawal of 4.15 tonnes from the GLD/Inventory rests at 978.29 tonnes (this was nothing but a paper entry/no physical moved)
JULY 6/WHAT A FRAUD!! A MASSIVE 28.53 TONNES OF PAPER GOLD ADDED INTO THE GLD
July 5/no change in inventory/rests tonight at 982.44
July 1/a huge change in the gold inventory/ a deposit of 3.86 tonnes/rests tonight at 953.91 tonnes
JUNE 30/no change in gold inventory /inventory rests tonight at 950.05 tonnes
June 29/ a good sized deposit of 2.67 tonnes/inventory rests at 950.05 tonnes
June 28/ a huge deposit of 13.067 tonnes into inventory/new inventory rests so far at 947.38 tonnes.  This was a paper addition
June 27/a huge deposit of 18.415 tonnes into the GLD inventory/the new inventory rests at 934.313 tonnes.  The addition was a paper addition and not physical
june 24./strange!! no additions to gold with its huge 58 dollar advance??
june 23/no change in gold inventory tonight/rests at 915.90 tonnese
June 22/with gold down badly again, we had another huge deposit of 3.57 tonnes into the GLD/Inventory rests at 915.90 tonnes
June 21/ with gold down badly, we had a huge deposit of 3.56 tonnes into the GLD/Inventory rests at 912.33 tonnes
June 20/we had one deposit of .890 tonnes of gold into the GLD inventory/Inventory.
rests at 908.77 tonnes.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
July 11 / Inventory rests tonight at 981.20 tonnes

end

Now the SLV Inventory
July 11/no changes in silver inventory/rests tonight at 341.453 million oz
JULY 8/no change in silver inventory/rests tonight at 341.453 million oz
July 7./no change in silver inventory/inventory rests at 341.453 million oz
JULY 6/AND ANOTHER FRAUD!! A MASSIVE 7.909 MILLION OZ ADDED INTO THE SLV/INVENTORY RESTS AT 341.453 MILLION OZ
july 5/no change in silver inventory/inventory rests at 333.554 milllion oz
july 1/no change in silver inventory/inventory rests at 333.544 million oz
JUNE 30/no changes in silver inventory/inventory rests at 333.544 million oz
June 29/ a small deposit of 760,000 oz/Inventory rests tonight at 333.544 million oz/
June 28/no change in silver inventory/rests tonight at 332.784 million oz
June 27/ a small deposit of 570,000 oz in the SLV inventory/Inventory rests at 332.784 million oz
June 24/This makes no sense!! 855,000 oz of silver leaves the SLV headed straight to Shanghai/Inventory rests at 332.214 million oz
June 23/ no change in silver inventory/rests tonight at 333.069 million oz
June 22.2016/no change in inventory at the SLV/Inventory rests at 333.069 million oz/
June 21/ we had another 2.67 million oz of silver withdrawn from the SLV.  This no doubt is real silver leaving and heading straight to China/Inventory at 333.069 million oz
June 20/we had another 2.852 million oz of silver withdrawn from the SLV. Again this is probably real silver leaving and heading straight to China. Inventory rests at 334.495
.
July 11.2016: Inventory 341.453 million oz
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 2.9 percent to NAV usa funds and Negative 2.9% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 58.7%
Percentage of fund in silver:40.1%
cash .+1.2%( July 11/2016). 
2. Sprott silver fund (PSLV): Premium rises  to +1.13%!!!! NAV (July11/2016) 
3. Sprott gold fund (PHYS): premium to NAV  rises TO  0.69% to NAV  ( July 11/2016)
Note: Sprott silver trust back  into POSITIVE territory at +1.13% /Sprott physical gold trust is back into positive territory at +0.69%/Central fund of Canada’s is still in jail.
 
 
 

end

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
Mark O’Byrne/David Russell (Goldcore)

Metals Caught Between Global Gloom and U.S. Job Gains

GoldCore's picture

Better than expected employment figures in the US causes gold to take a breather after gaining more than 28% since the beginning of the year.

Bloomberg takes a look at the current competing bullish and bearish forces affecting the outlook for precious metals.

Metal markets are caught between global gloom and renewed U.S. optimism.

A six-week surge by gold, the quintessential haven investment, stalled on Friday as better-than-expected U.S. jobs data blunted global economic concern that has boosted safe-haven demand. Copper, often used as a barometer for the global economy, gained as much as 0.9 percent after the labor report.

Gold has climbed 28 percent this year, with demand for havens surging after the U.K.’s Brexit vote and traders cutting bets on the Federal Reserve increasing interest rates this year. The Fed wants more proof that hiring has resumed a healthy pace and that economic momentum is intact before raising interest rates, minutes released Wednesday of last month’s meeting showed.

The full report can be read here 

7RealRisksBanner


Gold and Silver Bullion – News and Prices

Gold steady on Brexit concerns despite firmer equities (Reuters)

Gold ends lower but books 6th straight weekly advance (Marketwatch)

U.S. economy posts largest job gains in eight months in June (Reuters)

PRECIOUS-Gold slides on U.S. payrolls before recovering (Reuters)

Citigroup Is ‘Bullish Commodities’ for ‘17 as Brexit to Fade (Bloomberg)

Gold Prices (LBMA AM)

11 July: USD 1,358.25, EUR 1,231.66 & GBP 1,059.95 per ounce
08 July: USD 1,356.10, EUR 1,224.83 & GBP 1,047.45 per ounce
07 July: USD 1,367.10, EUR 1,233.40 & GBP 1,052.80 per ounce
06 July: USD 1,370.00, EUR 1,239.71 & GBP 1,059.01 per ounce
05 July: USD 1,344.75, EUR 1,207.05 & GBP 1,023.89 per ounce
04 July: USD 1,348.75, EUR 1,213.07 & GBP 1,016.42 per ounce
01 July: USD 1,331.75, EUR 1,199.51 & GBP 1,001.34 per ounce

Silver Prices (LBMA)

11 July: USD 20.47, EUR 18.53 & GBP 15.78 per ounce
08 July: USD 19.72, EUR 17.82 & GBP 15.20 per ounce
07 July: USD 19.95, EUR 18.00 & GBP 15.31 per ounce
06 July: USD 20.43, EUR 18.46 & GBP 15.75 per ounce
05 July: USD 19.73, EUR 17.69 & GBP 14.99 per ounce
04 July: USD 20.36, EUR 18.31 & GBP 15.36 per ounce
01 July: USD 19.24, EUR 17.29 & GBP 14.48 per ounce


Recent Market Updates

– Central Bank Resumes Monthly Gold Buying in Bid to Diversify Reserves
– Property Fund Turmoil in the UK has Eerie Echoes of Bear Stearns
– “In Gold We Trust” Annual Report – New Bull Market “Emerging”
– 3 Charts Show “How Precious Brexit Is” for Gold and Silver Bullion
– Gold, Silver Best Performing Assets In H1, 2016 – Up 26% & 38%
– Gold Surges to $1,313/oz – Fed Concerned Re Outlook, BREXIT and May “Consider Using Helicopter Money”
– Gold Prices Higher For 5th Session On BREXIT and FED

– Soros Buying Gold On BREXIT, EU “Collapse” Risk
– UK Gold Demand Rises On BREXIT “Nerves”
– Pensions Timebomb in “Slow Motion Detonation” In UK, EU, U.S.
– Silver – Perfect Storm Brewing in the Market

 

end

Bill Murphy discusses Friday’s upside outside day reversal in gold and silver:

(courtesy GATA)

GATA Chairman Murphy discusses metals’ astounding upward reversal Friday

Section:

9:57p ET Saturday, July 9, 2016

Dear Friend of GATA and Gold:

In an interview with GoldSeek Radio’s Chris Waltzek, GATA Chairman Bill Murphy discusses the astounding upward reversal of gold and silver Friday following the usual smashdown upon release of the U.S jobs report. The interview is nine minutes long and begin at the 35:05 mark at GoldSeek Radio here:

http://radio.goldseek.com/

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

END

Government debt is worthless as these governments can never repay their debt.  Even worse, they cannot repay the interest.  The only safe vehicle is gold and silver:

(courtesy Kingworldnews/Egon Von Greyerz)

When government debt is worthless, gold and silver are supreme, von Greyerz says

Section:

7:30p ET Sunday, July 10, 2016

Dear Friend of GATA and Gold:

Governments, Swiss gold fund manager Egon von Greyerz tells King World News today, will never repay their ever-increasing debt. Indeed, he adds, they can’t afford to pay even interest on that debt, which explains the rising amount of negative-interest government bonds. In such a world, von Greyerz concludes, the only safe money is gold and silver. An excerpt from the interview is posted at KWN here:

http://kingworldnews.com/danger-the-world-is-now-on-the-verge-of-the-lar…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

 

END

Bill Holter’s latest interview

(courtesy Bill Holter)

end

 

Your early MONDAY 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 6.6897 (  DEVALUATION SOUTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN NARROWS TO 6.6890) / Shanghai bourse  UP 6.82 OR 0.23%   / HANG SANG CLOSED UP 316.33 OR 1.54% 

2 Nikkei closed UP 601.84 OR 3.98% /USA: YEN RISES TO 102.47

3. Europe stocks opened ALL IN THE GREEN   /USA dollar index UP to 96.56/Euro DOWN to 1.1045

3b Japan 10 year bond yield: RISES  TO -.267%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 102.47

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  44.88  and Brent: 46.16

3f Gold DOWN  /Yen DOWN

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 -.188%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate FALL to 7.69%/: 

3j Greek 10 year bond yield FALL to  : 7.91%   (YIELD CURVE NOW SLIGHTLY INVERTED TO FLAT)

3k Gold at $1357.80/silver $20.35(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 44/100 in  roubles/dollar) 64.30-

3m oil into the 44 dollar handle for WTI and 46 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/GOT a SMALL DEvaluation DOWNWARD from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 102.47 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 .9837 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0862 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 VOTES AFFIRMATIVE BREXIT

3r the 10 Year German bund now NEGATIVE territory with the 10 year FALLS to  -.188%

/German 10+ year rate  negative%!!!

3s The Greece ELA NOW a 71.4 billion euros,AND NOW THE ECB WILL ACCEPT GREEK BONDS (WHAT A DISASTER)

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 1.385% early this morning. Thirty year rate  at 2.107% /POLICY ERROR)

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

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

HELICOPTER MONEY COMING!

S&P 500 To Open At All Time Highs After Japan Soars, Yen Plunges On JPY10 Trillion Stimulus

ASIAN AFFAIRS

 

i)Late  SUNDAY night/MONDAY morning: Shanghai closed UP 6.82 POINTS OR 0.23%/ /Hang Sang closed UP 316.33 OR 1.54%. The Nikkei closed UP 601.83 POINTS OR 3.98% Australia’s all ordinaires  CLOSED UP 1.92% Chinese yuan (ONSHORE) closed DOWN at 6.6897 /Oil FELL to 44.88 dollars per barrel for WTI and 46.16 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.6890 yuan to the dollar vs 6.6897 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS QUITE A BIT 

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

Here it comes:  Helicopter money is to begin in Japan:

(courtesy zerohedge)

“Something Big” Indeed Came – Bernanke’s Japan Visit Unveils “Helicopter Money”, Sparks Monster Rally

When we first heard this past Thursday that private blogger and Citadel employee Ben Bernanke was going to “secretly” meet with both the BOJ’s Haruhiko Kuroda and Japan PM Abe, we warned readers that “something big was coming.”

As noted late last week, “Bernanke will be in Japan next week. It has been arranged for him to meet officials including Abe and Bank of Japan Governor Haruhiko Kuroda, according to a government official speaking on condition of anonymity. Bernanke is expected to discuss Brexit and the BOJ’s negative interest rate policy with Abe and Kuroda, the official said.”

As Reuters added, “Some market players speculate Kuroda might decide, in a surprise, to provide “helicopter money” – a term coined by American economist Milton Friedman and cited by Bernanke, before he became Fed chairman, when talking about how central banks might finance government budgets as a way to seek to fight deflation.”

We concluded as follows:

So is it time? Is Bernanke about to unleash the next, and final, monetary policy evolutionary step, one which launches “helicopter money” in Japan, and if successful, brings it across the Pacific to the US?

We don’t know, but if anyone is still holding on to USDJPY shorts, now may be a good time to quietly close them out, because if Reuters is right, and a “helicopter money” is about to be served for the first time in modern history, things are about to get very volatile, very fast.

Two trading days later, with the USDJPY higher by 200 pips and soaring…

… after something big indeed came overnight from Japan: nothing less than the first “lite” instance of helicopter money .

First, this is what Reuters reported overnight:

Ben Bernanke, a former Federal Reserve chairman, visited the Bank of Japan on Monday, according to a Reuters witness. Government sources told Reuters on Friday that Bernanke, who steered the United States through its worst financial crisis in modern times, would meet with Bank of Japan Governor Haruhiko Kuroda and Prime Minister Shinzo Abe this week.

Reuters was not immediately able to confirm whether Bernanke met with Kuroda.

Last week government sources said Bernanke was expected to discuss Britain’s vote to leave the European Union and the BOJ’s negative interest rate policy.

It would appear that something else discussed was the first iteration of helicopter money, because the catalyst that sent both the Nikkei soaring and the Yen tumbling, was not so much Kuroda’s whirlwind victory in Japan’s latest election – largely as expected – but Abe’s announcement that he may proceed with launching a JPY10 trillion stimulus, funded by Japan’s first new major debt issuance in four years. From Bloomberg:

The Topix jumped 3.8 percent to 1,255.79, its largest advance since Feb. 15, as Abe said he will order the preparation of an economic stimulus package tomorrow. A person familiar with the matter said Bank of Japan Governor Haruhiko Kuroda met with former Federal Reserve Chairman Ben S. Bernanke over lunch in Tokyo on Monday, also boosting speculation for easing. Japan stocks further benefited as better-than-expected U.S. payrolls helped spur a global equities rally.

“With hopes that stimulus will come earlier than expected, investors are seeing it as an opportunity to buy,” said Hiroaki Hiwada, a Tokyo-based strategist at Toyo Securities Co. The report on Bernanke’s visit “makes it natural for speculation to emerge on additional easing.”

Abe will hold a cabinet meeting on economic measures on Tuesday and consider more than 10 trillion yen ($98 billion) in stimulus, the Nikkei newspaper reported. Following the meeting with Kuroda on Monday, Bernanke will meet with Abe tomorrow, Reuters reported.

“It’s positive for stocks that the ruling party has won so many seats,” said Shoji Hirakawa, chief global strategist at Tokai Tokyo Research Center. “History shows that when the ruling party wins the upper house, Japanese stocks are stronger afterwards.”

Bloomberg adds the following, when reporting on Shinzo Abe overnight speech in Tokyo, a day after winning an increased majority in upper house elections.

  • Want to make most of zero interest rate environment to utilize fiscal investments
  • Economy stimulus to establish 21st century infrastructure; speed up construction of high-speed train lines
  • Will consider size of economic measures from now
  • Measures to support domestic demand

However, it is not just as $100 billion fiscal expansion coming out of Japan: it is coming in conjunction with an imminent expansion in BOJ monetary stimulus: “The Bank of Japan is set to announce an expansion of its monthly bond and equity purchases on July 29 and Abe will probably introduce fiscal stimulus by year-end, according to Macquarie Bank Ltd.”

So is this the start of “helicopter money”? It would appear so.

Here is the broadest definition of the term from Jefferies: “The important distinction of helicopter money compared to QE or conventional deficit financing is that it is a combination of extreme monetary easing and fiscal relaxation.

More from a just released note by Jefferies’ Sean Derby titled “Japan: An Equity Investor’s Guide To Helicopter Money” (we will say more on this later):

We believe Japan is closer to introducing helicopter money than consensus believes as the tapering of its JGB purchase program forces the BoJ to seek other routes to stimulate growth. Although the BoJ could accelerate buying of asset classes, there are worries over diminishing returns. Moreover, negative interest rates on deposits is deeply unpopular amongst the banks and seems to have been ill thought out.

* * *

‘Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated’, Milton Friedman, The Optimum Quantity of Money

‘People know that inflation erodes the real value of the government’s debt and, therefore, that it is in the interest of the government to create some inflation’, Ben Bernanke

‘In this sense, we continue to believe that the BoJ’s sudden policy U-turn on negative deposit rates in January was driven by the need to collapse the yield curve into negative territory as far as possible. The authorities are attempting to push bond yields down below existing nominal GDP, so that the existing debt can be converted or ‘consolidated’ into a perpetual zero coupon bond presumably before any ‘tapering announcement’’, Japan: It’s Time To Launch A Zero Coupon Perpetual JGB! (II), 6th April, 2016

‘With real rates negative, the government can finance its outstanding debt without penalty. It could then write off some of the debt held by the BoJ by announcing that the excess reserves used to purchase the bonds would remain on the BoJ’s balance sheet forever while the reserves would pay no interest. Effectively, the liability (NPV) would be worth zero. This would give the government a clean slate to increase spending or cut taxes’, Japan: Moving the Goalposts (IV)

At the end of the day, most central bank mandates is devoted to price stability. Deflation in the extreme cases epitomizes falling prices, declining wages and a lack of demand. In order to overcome this ‘nightmare’ scenario, an expansionist policy would need to combine both fiscal and monetary policy. The important distinction of helicopter money compared to QE or conventional deficit financing is that it is a combination of extreme monetary easing and fiscal relaxation.

Which, incidentally, is precisely what Japan is now planning to do, and in doing so, it has given the world a glimpse of not only how “helicopter money” will look, but also the market’s enthusiastic response, which needless to say is music to the ears of central bankers everywhere.

So well done, Blackhawk Ben: while you never managed to unleash helicopter money in the US, you finally succeeded in bringing it to Japan which will now be a trial balloon for the rest of the world: if it works, expect many more instances of “extreme monetary easing coupled with fiscal relaxation” around the globe, just as Russell Napier previewed yesterday.

b) REPORT ON CHINA

NONE TODAY

4. EUROPEAN AFFAIRS

VisualCapitalalist’s Jeff Desjardins gives a great analysis on how the world’s largest derivative player will bring the whole deck of cards down

(courtesy zerohedge/Jeff Desjardins/VisualCapitilalist)

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Sunday night:  The Bank of England is now prepared to provide a flush fund to bail out all of those gated property funds

(courtesy zero hedge)

First Post-Brexit Bailout Looms As Bank Of England Mulls UK Property Fund ‘Measures’

Who could have seen that coming? While many have questioned the “suitability of daily-traded, open-ended property funds that are giving investors access to an illiquid asset,” all the time the price is rising, no one wants to rock the boat. However, now that Brexit has rocked the boat, spoiling the party for UK property investors and asset managers alike, it’s time for Carney to ride to the tax-payer-funded bailout rescue to ensure Bear Stearns 2.0 does not become Lehman 2.0…

Following the gating – or forced haircuts – of eight large UK property investment funds this week, fears have grown rapildy of the risk of contagion, which, as The FT reports, is much greater than first feared, with detailed analysis showing that a wide pool of funds have been caught up in the gates imposed on investors withdrawing cash.

The worry is that this will trigger systemic problems for the marketplace, which is already reeling from the UK’s decision last month to end its membership of the EU.

A prominent UK fund manager, speaking on condition of anonymity, said: “When you start getting daily trading funds-of-funds investing in daily trading funds that are invested in illiquid assets, that seems to be layering up potential liquidity risks. “[Investors need to] consider the impact on funds that are caught with material investments in the gated property funds.”

Three multi-asset funds run by Henderson also have around 3.5 per cent of their assets in the company’s own suspended property fund, while Aviva Investors’ multi-asset product has a 4 per cent stake in its gated property fund.

Many other multi-asset funds — one of the fastest-selling investment strategies of the past 12 months — run by rival investment managers have also been caught out by the property fund suspensions.

And so, as The Telegraph reports, financial regulators are considering bringing in a raft of emergency measures to stem the flood of money out of Britain’s biggest property funds that caused fresh market panic last week.

It is understood Bank of England officials are considering the introduction of enforced notice periods before redemptions, slashing the price for investors who rush for the door, or additional liquidity requirements for funds.

The funds, which invest in offices, warehouses and retail parks, offer daily liquidity, meaning investors can buy and sell freely despite the fund being unable to sell properties  quickly except at  knockdown prices.

When large numbers of investors pull out, fund managers slash prices and dump property on the market, and have to close the funds to further trading to prevent a run on the fund.

Andrew Bailey, the new head of the Financial Conduct Authority, said he was looking into changing the way the funds work. “Suspension is designed into these structures, it’s not a panic measure, it’s designed to deal precisely with that situation, where there’s been some shock to the market,” he said.

“It does point to issues that we will need to look at in the design of these things from the point of view of conduct and systemic stability.”

One option could be to limit liquidity to more closely match the assets, for example by forcing investors to give a notice period, typically 30 days to six months, to access their cash.

Funds could also be forced to increase their liquidity buffers, such as holding more property-related shares and bonds, which can be more easily sold off, as well as more cash.

Regulators are also expected to look at steps the US Securities and Exchange Commission has considered, including swing pricing, where investors who suddenly sell large holdings must accept a lower price.

As is now obvious, these are all measures that exist in the fine print now and limiting investor liquidity will merely create the same contagion discussed above. The Bank of England’s ‘strawman’ here is likely the first step down the road of a full-blown bailout – a slush-fund to promise to buy UK property from the funds… with the hope that once they even mention it, investors will stop their selling and pile back in.

Of course, we have seen and heard all of this before (about 9 years ago) when any number of government backstops, bailouts, partnerships, and direct buying did nothing to stop the contagious collateral chain collapse following the gating and liquidation of two Bear Stearns funds. We will never learn and this time is no different for as one major fund manager warned…

“This throws up all sorts of questions about the suitability of daily-traded, open-ended property funds that are giving investors access to an illiquid asset.”

But all the time investors believe a central bank has their back, this is not a problem… until it is THE problem, and the walls come thundering down.

 

END

The chance for a bailout for Italian banks has just blown up in smoke.  It will be a bail in and that would be bad for bondholders and for moms and pops that are the majority owner of much of this non performing debt”

(courtesy zero hedge)

Eurogroup Head Dashes Italy Bank Bailout Hopes: “I Will Resist Taxpayer Bailouts Very Strongly”

Italy’s ongoing attempts to bend Europe’s bail-in rules and revert to the “older” bailout protocol continue to run into problems. The latest confirmation came from Eurogroup head Jeroen Dijsselbloem who earlier today said he was not “particularly” worried about Italian banks. More interesting was his insistence that “there have always been and will always be bankers that say ’we need more public money to recapitalize our banks…. and I will resist that very strongly because it is, again and again, hitting on the taxpayer.” He then added that “the problems with the banks need to be sorted out in the banks and by banks.”

He sided further with the Merkel camp when he said that he finds the ease in which bankers ask for public funds to sort out problems is “very problematic.”

Dijsselbloem added that “there has to come an end to” bankers asking politicians to solve their problems.

His statement comes just a day after David Folkerts-Landau, the chief economist of Deutsche Bank, called for a €150 billion bailout for European banks, confirming that it is no longer just an “Italian” issue.

Dijsselbloem’s further comments showed that he won’t be easily swayed absent a market-wide panic and/or a steep slump in the economy.

“I think they’re talking constructively to try and find solutions within the European frameworks,” says Dijsselbloem before a meeting in Brussels Monday cited by Bloomberg. “Yes, there are issues of non-performing loans in the Italian banks, but that’s not a new issue. It needs to be dealt with. It will have to be dealt with gradually. There will be no big solutions.”

“It’s not an acute crisis. That also gives us some time to sort these things out. So as long as the authorities in Italy and the banking authorities are constructively talking, I think we should allow them the time to do that”

BRRD rules are “clear. They are, of course, also strict in the sense that they make very clear when there needs to be a bail-in and who needs to be bailed-in in what order. And within that framework a solution still can be found. I mean, you still have to deal with banks sometimes. And it’s still possible. But it has to be done within those rules.

He wasn’t the only one. Also today Austrian Finance Minister Hans Joerg Schelling says he has “no” sympathy for bending bank bail-in rules.  “Europe has few rules, but these rules must be adhered to. And we can’t discuss the rules every two years. If we give ourselves rules, we must apply them.”

His punchline was one we first noted two weeks ago, when Renzi tried to scapegoat the Italian push for a bailout on Brexit: “What’s happening in Italy has nothing to do with Brexit. The non-performing loans under discussion for offloading into a bad bank have been around for many years and have nothing to do with Brexit. One shouldn’t use Brexit as an excuse for one’s own failures. I expect there to be a tough position” toward Italy.

Needless to say this was the worst possible news for an Italian banking sector which many view as the next contagion hotspot, and which as the chart below shows continue to trade at crisis level.

end

 

Trouble ahead:  CoCo bonds( hybrid bond-equity) of Deutsche bank soar to 11.5% yield as its a capital base falls below required levels:

(courtesy Sanders/Confounded Interest blog/zerohedge)

 

Deutsche Bank CoCo Bonds Soar To 11.5% Yield Following Bailout Demands

Submitted by Anthony Sanders via Confounded Interest blog,

No, a Coco bond is not a new Chanel perfume or a Hersheys product. Rather, CoCo stands for contingent convertible capital instrument (CoCo) are is a hybrid capital security that absorbs losses when the capital of the issuing bank (such as Deutsche Bank) falls below a certain level.

dbcomp

Italy’s Unicredit and Spain’s Banco Santander have higher CoCo bond yields.

Deutsche Bank raised nearly €20 billion in 2010 and 2014, by selling shares, which diluted existing shareholders, and by issuing CoCo bonds, spread over four issues in dollars, euros, and pounds. CoCo bonds have no maturity and are perpertual. The coupons range from 6% (EUR demoninated) to 7.50% (US Dollar denominated).