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


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)


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


we had non changes in gold inventory./

Total gold inventory rest tonight at: 981.20 tonnes




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



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 



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

( zerohedge)




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:



Relations between the USA and Russia are deteriorating rapidly

( zero hedge)


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)


none today


none today


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


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)


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.
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
Deposits to the Dealer Inventory in oz NIL
Deposits to the Customer Inventory, in oz 
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. 



And now for silver
JULY INITIAL standings
 July 11.2016
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
 61,315.170 OZ
Deposits to the Dealer Inventory
Deposits to the Customer Inventory
 /423,390.73 oz
No of oz served today (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.
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 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.
July 11 / Inventory rests tonight at 981.20 tonnes


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 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

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.


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 


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



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

(courtesy GATA)

GATA Chairman Murphy discusses metals’ astounding upward reversal Friday


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:


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


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


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:


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



Bill Holter’s latest interview

(courtesy Bill Holter)



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




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.


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.


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

/German 10+ year rate  negative%!!!


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)


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



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 



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.




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)


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.



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.



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.


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).


The purpose? To prop up Tier 1 capital,  And yes, the capital trigger is mechanical, not arbitrary.


And now that ‘protective’ capital is collapsing…

And now, Deutsche Bank’s Chief Economist, David Folkerts-Landau, is calling for a 150 billion Euro bailout of EU banks (the largest and most sick being … Deutsche Bank).

Speaking to Germany’s Welt am Sonntag, the economist said European institutions should get fresh capital for a recapitalization following a similar bailout in the US. What he didn’t say is that the US bailout took place nearly a decade ago, in the meantime Europe’s financial sector was supposed to be fixed courtesy of “prudent” fiscal and monetary policy. It wasn’t.

As Landau says the US helped its banks with $475 billion dollars, and such a program is now needed in Europe, especially for Italian banks. In other words, just because the US did it, now it’s Europe’s turn to ask for more of the same.

“In Europe, the bailout does not need to be so large. A €150 billion program should be enough to help European banks recapitalize,” said David Folkerts-Landau. He adds that the decline in bank stocks is only the symptom of a much larger problem, namely a fatal combination of low growth, high debt and a “dangerous” deflation.

“Europe is seriously ill and needs to address very quickly the existing problems, or face an accident,” said the chief economist.

The Deutsche Bank expert said he is particularly worried about Italy and the condition of local banks, where the €40 billion in funding needs is said to be “conservative.” He said that the bank bailout is so urgent that it should permit Europe to violate the bail-in rules of the new Banking Directive. The economist notes that such a bail-in is not doable and is politically unfeasible because it would hit people’s savings and may cause a bank run in both Italy and elsewhere. We find it strange how nobody thought of this before the rules were implemented, or rather how impairing savings was only a problem when “second-rate” European citizens such as those in Cyprus and Greece were affected. Now that Italians and even Germans are in the cross hairs, suddenly “it is time to change the rules.”

His conclusion: “Strictly adhering to the rules rules would cause greater harm than if they were suspended.”

Our only question is whether Deutsche Bank’s chief economist is more worried about the future of Italy’s banks, or that of his own employer.

No, it wasn’t Deutsche Bank’s US economist Joe LaVorgna, who looks exactly like he did when I worked at DB.


But I suspect LaVorgna will soon look like Folkerts-Landau if Deutsche Banks doesn’t stop hemorrhaging.


Just add a pair of cheesy glasses to the photo below and a pink tie and you have a stressed-out Joe LaVorgna.


Hey, I thought CoCo bonds were supposed to protect taxpayers, such as EU member Great Britain??



(courtesy zero hedge)

Sterling Surges, UK Stocks Enter Bull Market After Andrea Leadsom Quits UK Leadership Race

Update 2: more details from the WSJ:

Andrea Leadsom, one of two contenders to replace David Cameron as leader of the Conservative Party and prime minister, on Monday pulled out of the leadership race. Ms. Leadsom’s exit appears to clear the way for Home Secretary Theresa May to become the next U.K. prime minister. Ms. Leadsom said a nine-week leadership election was “highly undesirable” and that Britain needs a new prime minister as soon as possible. She added that she was giving her full support to Ms. May.

The British pound surged on the news.

The withdrawal comes after a weekend of controversy in which Ms. Leadsom appeared to suggest her rival, Ms. May, wasn’t as qualified because she didn’t have children. According to a transcript of an interview with the Times of London newspaper, the 53-year-old Ms. Leadsom said she didn’t want the conversation in the campaign to be about how she has three children while Ms. May, 59, doesn’t have any.

“But genuinely I feel being a mum means you have a very real stake in the future of our country, a tangible stake,” Ms. Leadsom said. “She possibly has nieces, nephews, lots of people, but I have children, who are going to have children, who will directly be a part of what happens next.”

* * *

Update: it is confirmed and Leadsom is indeed out of the race leaving just Theresa May in the running.


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

(courtesy zero hedge)

Theresa May Confirmed As New Leader Of Tory Party, Most Likely Next UK Prime Minister

Following the surprising withdrawal announcement by Tory leadership challenger Andrea Leadsom, moments ago Theresa May was confirmed as the new leader of the UK Tory Party.


So does this mean that the next UK prime minister has been decided? More or less yes: as Sky adds, the 1922 Committee can now either name May as Prime Minister or hold a ballot of Tory members on her leadership.

Leadsom pulls out of the Tory leadership race.

1922 Committee can either name May as PM or hold a ballot of Tory members on her leadership

In any case, bypassing this formality, it is now virtually assured that May will be the next UK Prime Minister, one who will be tasked with either triggering the Article 50 process for the UK’s departure from the EU, or trying to undo the entire process.


vi) Civil unrest in Berlin:


Civil Unrest Explodes In Berlin – Over 3500 People Riot Against Police

“Civil Unrest is exploding,” warns Armstrong Economics’ Martin Armstrong,

The biggest and most violent protest in Germany erupted in Berlin over the weekend exactly with our models calling for an explosion in civil unrest.

Some 1800 police were called in and at least 120 policemen were injured in what is becoming a street battle. This has been the most aggressive and violent protest in Germany for the past five years.

Protesters were throwing bottles, cobblestones and fireworks, as well as they destroyed cars in addition to attacking police officers. It appears at least 3,500 rioters took part in the uprising and possibly more than 4,000.

The protest is against police operations and involved mostly young people who have risen up against the police operations in the Riga street area. Protesters wore black hoods carrying banners with slogans like “Riga defend 94” and “Housing solidarity against state terror.”

The demonstration went on with the crowd chanting repeatedly: “Bullenschweine get out of Riga!” Demonstrators were throwing firecrackers and police fired back with tear gas. The police also called in air support using helicopters and they had to call in for reinforcements from Bavaria, Brandenburg, Lower Saxony, Saxony, Saxony-Anhalt, Thuringia and the Federal Police.

Interior Senator Frank Henkel (CDU) announced that the police will also be present at night after the demonstration, so riots and arson attacks should be stopped…calling the riot a “leftist orgy of violence.”

With September’s elections looming we suspect the tensions will only get worse.



Relations between the USA and Russia are deteriorating rapidly

(courtesy zero hedge)

Russia Expels Two US Diplomats Following Similar “Unfriendly” Move By Washington

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)

With Over $13 Trillion In Negative-Yielding Debt, This Is The Pain A 1% Spike In Rates Would Inflict



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




USA/CAN 1.3083 UP .0044

Early THIS MONDAY morning in Europe, the Euro FELL by 6 basis points, trading now JUST above the important 1.08 level RISING to 1.1045; Europe is still reacting to BREXIT,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 UP 6.82 POINTS OR 0.23%   / Hang Sang CLOSED UP 316.23 OR 1.54%/AUSTRALIA IS HIGHER BY 0.09%/ EUROPEAN BOURSES ARE ALL DEEPLY IN THE GREEN   as they start their morning

We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;

1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.

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

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

These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>

The NIKKEI: this FRIDAY morning: closed DOWN 169.26 POINTS OR 1.11% 

Trading from Europe and Asia:

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 316.33 OR 1.54%  ,Shanghai CLOSED UP  6.82 POINTS OR .23%  / Australia BOURSE IN THE GREEN: /Nikkei (Japan) CLOSED  IN THE GREEN/India’s Sensex IN THE GREEN  

Gold very early morning trading: $1358.80


Early MONDAY morning USA 10 year bond yield: 1.385% !!! UP  3 in basis points from FRIDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS to 2.107 UP 2 in basis points from FRIDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early MONDAY morning: 96.56 UP 20 CENTS from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING



And now your closing MONDAY NUMBERS


Portuguese 10 year bond yield:  3.11% UP 3 in basis points from FRIDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.267% UP 2  in   basis points from FRIDAY

SPANISH 10 YR BOND YIELD: 1.15%  PAR IN basis points from FRIDAY( this is totally nuts!!/AND THE MARKETS GO UP???)

ITALIAN 10 YR BOND YIELD: 1.20 UP 1 IN basis points from FRIDAY (again totally nuts/AND MARKETS GO UP???)

the Italian 10 yr bond yield is trading 5 points HIGHER than Spain.





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

Euro/USA 1.1056 UP .0010 (Euro =UP 10 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 102.78 UP 2.424(Yen DOWN 242 basis points/HELICOPTER MONEY )


USA/Canada 1.31126-UP 0.0089 (Canadian dollar DOWN 89 basis points  AS OIL FELL  (WTI AT $44.60).


This afternoon, the Euro was UP by 10 basis points to trade at 1.1056

The Yen FELL to 102/78 for a LOSS of 243 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY TO COMMENCE

The POUND was UP 63 basis points, trading at 1.3001

The Canadian dollar FELL by 89 basis points to 1.3126, WITH WTI OIL AT:  $44.60

The USA/Yuan closed at 6.6880

the 10 yr Japanese bond yield closed at -.267% UP 2  IN BASIS  points in yield/

Your closing 10 yr USA bond yield: UP 7 IN basis points from FRIDAY at 1.43% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.148 UP 7  in basis points on the day 


Your closing USA dollar index, 96.56 UP 20 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 MONDAY

London:  CLOSED UP  92.22 OR 1.40%
German Dax :CLOSED UP  203.75 OR  2.12%
Paris Cac  CLOSED UP 73.88  OR 1.76%
Spain IBEX CLOSED UP 119.20 OR 1.46%
Italian MIB: CLOSED UP `94.26 OR 1.21%

The Dow was UP 250.86  points or 1.40%

NASDAQ UP 79.95 points or 1.64%
WTI Oil price; 44.62 at 4:30 pm;

Brent Oil: 46.505




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

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


BRENT: 46.08

USA 10 YR BOND YIELD: 1.43% 

USA DOLLAR INDEX: 96.53 UP 23 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.29996 UP .0058 or 58 basis pts.

German 10 yr bond yield at 5 pm: -.167%


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


Japanado Sends Stocks To Record Highs Despite Crude Crumble

Record high stocks, record low yields, 2016 low earnings expectations, and sixth straight month of labor market conditions collapse…


This is now the second longest bull market in US history…


Nasdaq regained 5,000 briefly… as 2016 EPS expectations near the year’s lows…


but failed to hold it…


Nasdaq is now up over 2% from Brexit…


Today’s excitment was all over in futures land before the US open thanks to a promise of a cajillion yen of fiscal stimulus from Japan…


The S&P 500 took out its 2015 all-time record highs at 2134.72…but VIX also rose on the day…


It appears the new highs are being aggressively hedged…


Notably Dow Futures leaked over 60 points from their highs after Europe closed…


Post-Brexit, gold and bonds remain the biggest winners, stocks just green, and crude crashing…


The last time stocks were this high, 10Y yields were 105bps higher!!!


And bonds, gold, and silver have soared since May 20th 2015…


Oil tumbled again today to near 3-month lows and breaking below key technical support (100- and 200-day averages)…


And stocks continues to diverge…


Notably the correlation between high yield credit and oil prices has turned notably negative… which has not ended well the last 5 times it happened…

h/t @JesseFedler


The USD Index rose today as JPY weakness (huge move on Abe stimulus mockery) offset GBP strength (May as PM)…


This was USDJPY’s biggest day since QQE2 was unleashed…bear in mind that USDJPY is stil down 5 handles from pre-Brexit excitement…


as Nikkei 225 has rallied over 1000 points post-payrolls…


Treasury yields rose notably today (5bps at the short-end and long-end, 8bps in the belly)… 10Y yields had their biggest percentage gain since December today…


Copper managed to hold gains after last night’s China inflation data, silver outperformed gold but crude crumbled off an early bounce…


Charts: Bloomberg



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

(courtesy zero hedge/Bank of America)

Bank of America Throws In The Towel: “The Profits Recovery Won’t Live Up To Expectations”

Next week the second quarter earnings season begins in earnest (as usual with Alcoa reporting after the close on Monday), with some 5% of the S&P reporting Q2 results, a number which will rise to 89% by August 5.

During this period, most corporate buybacks, arguably the only source of stock buying, will remain in a blackout period. Whether this means the S&P will again remain rangebound for the next 4 weeks is unclear: with rampant central bank intervention now a daily fixture of “markets”, it remains a folly to attempt any predictions.

A more interesting question will be what earnings will be reported. As is widely known, Q2 will be the fifth consecutive quarter of declining earnings, the first time this has happened since the financial crisis. Curiously, in just the past week, analysts have further taken down their estimates, with average EPS now seen a declining 5.6% from a year ago, compared to a drop of 5.4% as of June 30 (with revenue set to drop by 0.7% Y/Y).

And for those wondering, no – it is not just energy companies whose earnings are plunging: as the chart below shows, a majority, or 6 of the S&P’s 10 sectors, are expected to report negative earnings growth with only Telecom, Consumer Discretionary, Utilities and Healthcare posting an increase (largely due to the daily ongoing collapse in interest rates to all time lows).

But while a Q2 earnings contraction is a given (even when factoring the last minute “beats”, which traditionally push up the final result by 3-4%), another question is what to expect out of Q3: will the earnings recession last for an unprecedented 6 quarters even as the S&P hits all time highs? For now, the answer is borderline: while consensus expects a sharp drop in the second quarter, Q3 EPS, as of this moment, are expected to rise a modest 0.7% (however this number too is declining).

To be sure, what is going on here is the traditional optimism bias prevalent among all analysts: we expect that as we get closer to the end of the third quarter, the Q3 EPS consensus will drop sharply lower.

And nowhere is this more evident than in a note released overnight by Bank of America’s Dan Suzuki who is the first analyst to admit that an earnings recession that will have lasted well over one year is not normal, and as a result he has thrown in the towel, saying that “The profits recovery is unlikely to live up to expectations.” Here is his full note which admits that the “hockeystick” EPS rebound in 2016 and 2017 is a mirage that will promptly float away in the coming months.

Cutting forecasts to reflect a weaker recovery

Trimming EPS by 3% in 2016 and 2% in 2017

In the wake of the weaker-than-our-expected 1Q results and recent macro headwinds, we are trimming our S&P 500 EPS forecasts by 3% in 2016 and 2% in 2017. Our revised forecasts of $117 (flat y/y) in 2016 and $125 (+7% y/y) in 2017 suggest downside to the bottom-up consensus of 1% and 7%, respectively. Excluding the extremely volatile earnings of the Energy sector, which we expect to decline by more than 50% for a second consecutive year, we forecast S&P 500 earnings growth to trend from 7% in 2015 to 0% in 2016 and 4% in 2017. At 2098, the S&P 500 currently trades at 17.9x our 2016E EPS while our year-end target of 2000 implies a 16x multiple on our 2017E EPS.


Headwinds from Brexit, pensions, FX and oil

As a result of the UK referendum, we now assume slower global growth and a modestly stronger dollar. Our biggest cuts for 2016 were to the global cyclicals’ earnings (Chart 2): Financials (-$14bn), Tech (-$11bn), Energy (-$10bn) and Industrials (-$5bn). We assume that the impact of net buybacks (+1ppt), a stronger dollar (-1ppt) and declining Energy profits (-2ppt) will result in a net drag of 2ppt in 2016 vs. a drag of 10ppt in 2015 (Chart 4 and Table 3). Excluding these factors, our forecasts imply a slowdown in non-Energy constant currency earnings growth from roughly +10% to +4%. See the detailed forecast table on page 3. Given the fall in interest rates this year, we think pension expense is likely to be another modest headwind to earnings growth next year. And just as the GAAP gap was closing, we could see it widen at the end of the year, as those companies that have transitioned to mark-to-market pension accounting take charges that hit GAAP EPS.

The profits recovery is unlikely to live up to expectations

Earnings season for 2Q is about to kick off, and despite our expectation of a 3% beat vs. consensus, we think S&P 500 EPS is still likely to come in below 2Q15. While this would mark the fourth consecutive quarter of negative y/y EPS growth, in our view, what is encouraging is that 1Q likely marked the trough. Despite the negative impact of the Brexit vote, we see EPS growth accelerating throughout the rest of the year, but not nearly at the trajectory of consensus expectations, which imply growth will accelerate from -6% in 1Q to +9% by 4Q (Chart 1) and +16% by 1Q17. And given the S&P 500’s 15% rally since mid- February, we are concerned that much of the improvement in earnings growth may already be priced in, especially with signs that earnings revision trends may be rolling over.

We expect other banks to promptly join the crowd and slash their own overly optimistic forecasts which will never materialize.

So does that mean that stocks will stop rising in a world in which they are unable to generate incremental income growth? Of course not: since the S&P’s GAAP PE is currently north of 24x, there is no reason central banks can’t push it even higher: after all any time the market has rallied over the past 1.5 years, a time when earnings have been steadily declining has been on multiple expansion. And since even the Fed admits the stock market is in bubble territory, saying “forward price-to-earnings ratios for equities have increased to a level well above their median of the past three decades”, and yet does nothing about it, we expect the bubble to keep growing ever bigger until the day it finally bursts. What concerns us more, however, is that the world will be engaged in both regional and global conflict and/or war at that time, for anyone to really care too much.




Deutsche bank expects a complete collapse in the monthly job growth

(courtesy Deutsche bank/zero hedge)

Why Deutsche Bank Expects A Collapse In Monthly Job Growth To Under 60,000

Deutsche Bank’s stock price has crashed to all time lows, while its market-implied default risk is back to just shy of record levels


… which is what likely prompted its chief economist to admit today that all is not well in the state of European banking, asking for a €150 billion (to start) bailout for European banks (of which DB is a member).

However, that in itself is unlikely to occur absent a major dislocation in the global economy, and especially the “cleanest dirty shirt”, i.e., the United States. After all, the already angry population will be foaming at the mouth if hundreds of billions in taxpayer funds are used to rescue not only Europe banks but Europe’s biggest bank at a time when the S&P500 is trading at all time high and the US labor market is – supposedly – humming along.

So something has to snap in order for Deutsche to get its much desired bailout, and that something may be nothing less than a sudden swoon in the economy and market: just like the one unleashed by the failure of Lehman. That is precisely what DB’s Dominic Konstam is expecting will happen by looking at the trends in the US labor market that are being so aptly masked by the headline prints reported each month by the BLS.

Here is why Konstam thinks monthly job growth is about to hit a brick wall, and plunge to just 50-60K per month.

Long-time readers might remember when we pointed to what we call the labor productivity gap, or the difference between productivity growth and labor input (as measured by payroll aggregate hours), turning negative roughly 15 months ago. The hypothesis was that firms that had been hiring full steam in the past several years and have yet to see return on their investment in the form of higher output (because productivity has been lagging) will respond by reducing their demand for additional labor, or otherwise wages will outstrip production and their profits will suffer. This hypothesis is supported by data going back until at least 1989, when each time the labor-productivity gap started to deteriorate it predicted a deceleration in labor input growth roughly one year later.

We can use historic betas of the gap to labor input momentum to predict implied job growth. Applying the historical beta of employment growth on the labor/productivity gap, the current labor/productivity gap implies that over the next 4 quarters, the cumulative slowdown in labor input growth should be 4.5 percent. This implies that aggregate hours (which most recently have been expanding at a 1.6 percent annual rate) would average just 0.5 percent (1.6 – 4.5 / 4). Expressed in terms of new jobs, this means that unless firms cut back on employee hours, monthly job creation would average close to 60K next year, which is a substantial drop from the 200K running average of the past 12 months. If we are correct, then the abysmal report in May could be less an aberration than a preview of a new norm.

The flip side to late cycle dynamics is the implication for stabilizing profits. The price-unit labor cost spread has collapsed, signaling the extreme loss of profit momentum and, based on past cycles, implying a  cumulative deceleration of labor input to 0.4% in 2017 and zero growth in 2018. Again, this would imply job creation slowing to 50K per month, which is consistent with our earlier analysis using the labor- productivity gap.

What are the implications of this collapsing new economic normal?

The important difference between this “cycle” and others, however, is that while the symptoms may be the same, the underlying causes are very different. We think this is less about negative demand shocks and overly tight financial conditions than about stagnating demand related to the absence of positive demand shocks such as demographics, globalization, deregulation etc. This in some ways makes the problem appear “less bad” but in other ways it is also more insidious since the solutions may be harder to achieve in practice and may not be observable for some time.

The result is a prolonged period of financial repression where real yields are necessarily very low. The equilibrium is that risk assets, subject to their real yield sensitivity, perform relatively well. Unlike prior “cycles” the rebalancing of growth is therefore not about a risk off/risk on trade, but is more about rotating investors into higher yielding assets as nominal yields fall, lead by real yields. Specifically for the SPX we can argue that performance is not driven by top line earnings expansion or even expanding P/Es but instead a declining earnings yield premium to bond yields. It is the collapse in real yields above all that drives this, in our view.

In other words, it all goes back to central banks keeping the “market” supported, as neither the economy (productivity growth) nor fundamentals (earnings) justify the S&P where it is.

And here is the paradoxic: with DB’s pleas for the ECB to end NIRP having fallen on Draghi’s deaf ears, the German bank is both warning, and tacitly requesting, that central banks allow some renormalization. After all, the only way that a request for another bank bailout may have even a remote chance of passing is if the population sees not only a market swoon but an economic one as well. The alternative is far worse: instead of sacrificing someone else, DB will itself become this cycle’s Lehman, unleashing precisely the events that Konstam has been warning about for so long.

Which is why the economy and the “market” better let off some steam in the very near future… for Deutsche Bank’s sake.




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.

(courtesy zero hedge)

Fed’s Labor Market Conditions Index Tumbles For 6th Straight Month

Despite Friday’s ‘magnificent’ goldilocks jobs print, The Fed’s Labor Market Conditions Index (once Janet Yellen’s favorite indicator… until it started to turn down… and now just “experimental”) tumbled 1.9% in June, dramatically worse than expected and down for the 6th straight month.

Of course it’s probably nothing... better to focus on one extremely noisy data item than a 19-factor smoothed model that has historically correlated extremely well to recession…



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:

(courtesy zero hedge)


Hillary’s Seven Biggest Lies Refuted By The FBI, And The “Smoking Gun”

Well that is all for today

I will see you tomorrow night



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