jULY 19


July 19, 2016 · by  · in Uncategorized · Leave a comment ·Edit

Gold:1331.50 UP $3.10

Silver 19.98  DOWN 7 cents


In the access market 5:15 pm

Gold: 1331.50

Silver: 19.92



For the July gold contract month,  we had a small 10 notices served upon for 1,000 ounces. The total number of notices filed so far for delivery:  5060 for 506,000 oz or 15.738 tonnes

In silver we had 239 notices served upon for 1,195,000 oz.  The total number of notices filed so far this month for delivery:  2068 for 10,340,000 oz


I wrote this yesterday and it certainly holds for today:

“It sure looks to me like the bankers are trapped in silver.  The OI continues to either stay constant or rise. ”

Silver today at the comex recorded an all time record for open interest and yet the price is 29 dollars cheaper. It defies commodity law!

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 307.70 tonnes for a gain of 5  tonnes over that period


In silver, the total open interest ROSE BY 1597 contracts UP to 219,101, AND A NEW ALL TIME RECORD. THE OI ROSE IN CONTRAST TO THE  PRICE OF SILVER WHICH FELL BY 5 CENTS IN YESTERDAY’S TRADING.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.095 BILLION TO BE EXACT or 157% of annual global silver production (ex Russia &ex China).

In silver we had 239 notices served upon for 1,195,000 oz.

In gold, the total comex gold ROSE BY 1,662 contracts as gold rose in price YESTERDAY to the tune of $0.10. The total gold OI stands at 614,667 contracts.


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


we had no changes in gold inventory./


Total gold inventory rest tonight at: 965.22 tonnes


we had no changes into the SILVER INVENTORY TO THE SLV

Inventory rests at 348.580 million oz.

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

1. Today, we had the open interest in silver ROSE by 1597 contracts UP to 219,101 as the price of silver FELL BY 5 cents with YESTERDAY’S trading. The gold open interest ROSE by 1662 contracts up to 614,667 as  the price of gold ROSE by $0.10  YESTERDAY.

(report Harvey).


2 a) Gold/silver trading overnight Europe, Goldcore

(Mark OByrne/zerohedge


 i)Late  MONDAY night/TUESDAY morning: Shanghai closed DOWN 6.97 POINTS OR 0.23%/ /Hang Sang closed DOWN 161.89 OR 0.57%. The Nikkei closed UP 225.46 OR 1.37%/  Australia’s all ordinaires  CLOSED DOWN 0.25% Chinese yuan (ONSHORE) closed UP at 6.6919 ON A LITTLE REVALUATION /Oil FELL to 45.51 dollars per barrel for WTI and 47.26 for Brent. Stocks in Europe ALL IN THE RED. Offshore yuan trades  6.7189 yuan to the dollar vs 6.6919 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS CONSIDERABLY AS  MORE USA DOLLARS LEAVES THEIR SHORES. 



Today’s stock market rises is mainly due to the the higher: USA/Yen cross.  This carry trade is due to investors borrowing yen knowing it will fail and buying assets like the S and p

( zero hedge)


Chinese Vice Chairman tells its troops to get ready for combat.This sounds ominous

(courtesy xinhua/Bloomberg/zero hedge)


i)European confidence crashes to 4 yr lows:

( zero hedge)

ii)S and P lowers the boom on Deutsche bank as they cut their outlook to negative due top challenging operating conditions in the banking environment.  These guys are the largest derivative player in the world:

( zero hedge)



i)Turkey is like a bank:  Too big to fail!!

( zero hedge)


ii)Tens of thousands more have been purged as Turkey “concentrates” on extraditing Gulen. Interesting enough, Turkey now blames the downing of the Russian planes on Gulen:

( zero hedge)

iii)This is far more worrisome, as the Turkish lira plummets to below levels Friday night, when it was first announced of a coup. The markets are stating that Erdogan went way too far and they are punishing the country:

( zero hedge)

iv)My goodness!!  Erdogan just fired all university deans and then sacked 21,000 private school teachers.  Turkey is going back into the early middle ages as he wants conditions similar to a caliphate and he is that leader:

( zero hedge)


none today


Oil slides into the 44 dollar column after unexpected gasoline buildup

( zero hedge)




Venezuela opens up its border with Columbia and watch the result as citizens flock over to get the necessary items to survive:

(courtesy zero hedge)


i)It now seems that Britons are now warming to gold as a safe haven because of the BREXIT vote:

( Reuters/GATA)

ii)A sensational piece and I agree 100% of what Butler asserts:

( Ted Butler)


iii)I would not put much emphasis in data from the world gold council except for mine supply only;

( Douglas McIntrye/247WallSt.com


i)The real data in housing suggests that housing starts dropped .2% year over year

( zero hedge)

ii)The real state of the uSA economy:

( David Stockman/ContraCorner)

Let us head over to the comex:

The total gold comex open interest  ROSE TO AN OI level of 614,667 for a  GAIN of 1662 contracts AS  THE PRICE OF GOLD ROSE BY $0.10 with respect to YESTERDAY’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 69 for a LOSS of 7 contracts. We had 68 notices filed on yesterday, so we gained 61 contracts or an additional 6100 gold ounces that 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 10,597 contracts down to 306,757  as this month continues its wind down until first day notice for the August contract, Friday,July 29/2016: less than  2 weeks away.  The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was fair at 175,309. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was FAIR at 194,574 contracts.The comex is not in backwardation.
Today, we had 10 notices filed for 1000 oz in gold

And now for the wild silver comex results. Total silver OI ROSE by 1597 contracts from  218504  up to 219,101.  We are now at an all time record high for silver open interest set today (219,101). The front active delivery month is July and here the OI fell BY 118 contracts down to 667. We had 49 notices served on YESTERDAY so we lost 69 contracts or 345,000 additional silver ounces that will not stand for delivery.The next non active month of August saw it’s OI fall by 23 contracts down to 467. The next big active month is September and here the OI ROSE by 1179 contracts UP to 158,895. The volume on the comex today (just comex) came in at 45,752 which is very good. The confirmed volume yesterday (comex + globex) was EXCELLENT at 55,267. Silver is not in backwardation. London is in backwardation for several months.

We had 239 notices filed for 1,195,000 oz. in silver JULY contract month

:INITIAL standings for JULY

July 19.
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 
 64,300.000 oz
No of oz served (contracts) today
10 notices 
1,000 oz
No of oz to be served (notices)
59 contracts
5900 oz
Total monthly oz gold served (contracts) so far this month
5060 contracts (506,00o oz)
(15.738 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month   561,853.6 OZ

Today we had 0 dealer DEPOSIT
total dealer deposit: NIL   0z
Today we had 0 dealer withdrawals:
total dealer withdrawals:  nil oz
We had 1 customer deposit:
ii) Into Scotia; 64,300.000 oz ( 2,000 kilobars)
Total customer deposit: 64,300.000
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 10 contracts of which 0 notices was stopped (received) by JPMorgan dealer and 5 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 (5060) x 100 oz  or 506,000 oz , to which we  add the difference between the open interest for the front month of JULY  (69 CONTRACTS) minus the number of notices served upon today (10) x 100 oz   x 100 oz per contract equals 511,900 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 (5060) x 100 oz  or ounces + {OI for the front month (69) minus the number of  notices served upon today (10) x 100 oz which equals 511,900 oz standing in this non   active delivery month of JULY  (15.922 tonnes).
We  gained 6100 gold ounces that will stand for metal 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 +  15.732 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 = 45.774 tonnes still standing against 47.653 tonnes available.
 Total dealer inventor 1,532,061.922 tonnes or 47.653 tonnes
Total gold inventory (dealer and customer) =9,892,580.993 or 307.700 tonnes 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 307.70 tonnes for a  gain of 5  tonnes over that period. 



And now for silver
JULY INITIAL standings
 July 19.2016
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
 20,119.47 OZ
Deposits to the Dealer Inventory
595,200.05 oz
Deposits to the Customer Inventory
 594,021.058 OZ
No of oz served today (contracts)
(1,195,000 OZ)
No of oz to be served (notices)
428 contracts
2,140,000 oz)
Total monthly oz silver served (contracts) 2068 contracts (10,340,000 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  5,055,509.2 oz
today we had 1 deposit into the dealer account
i) Into Brinks:  595,200.05 oz
total dealer deposit :595,200.05 oz
we had 0 dealer withdrawal:
total dealer withdrawals:  NIL oz
we had 1 customer withdrawals:
i)Out of HSBC: 20,119.47 oz
Total customer withdrawals: 20,119.47 oz
We had 1 customer deposit:
i)Into brinks: 594,021.958 oz
total customer withdrawals:594,021.958. oz
 we had 2 adjustments
i) Out of CNT:  595,066.440 oz was adjusted out of the customer and this landed into the dealer account of CNT
ii out of Delaware:  10,537.245 oz was adjusted out of the dealer and this landed into the customer account of Delaware
The total number of notices filed today for the JULY contract month is represented by 239 contracts for 1,195,000  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 (2068) x 5,000 oz  = 10,340,000 oz to which we add the difference between the open interest for the front month of JULY (667) and the number of notices served upon today (239) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the JULY contract month:  2068(notices served so far)x 5000 oz +(667 OI for front month of JULY ) -number of notices served upon today (239)x 5000 oz  equals  12,480,000 oz  of silver standing for the JULY contract month.
We lost 69 contracts or 345,000 additional oz that will not stand for delivery in this active month of July.
Total dealer silver:  28.360 million (close to record low inventory  
Total number of dealer and customer silver:   153.877 million oz (close to a record low)
The total open interest on silver is NOW AT its all time high with the record of 219,101 being set July 19.2016.  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 19/no change in gold inventory at the GLD/Inventory rests at 965.22 tonnes
July 18./ a good sized deposit of 2.37 tonnes of gld into GLD/this is a paper gold entry/inventory rests at 965.22 tonnese
July 15./no change in gold inventory at the GLD/Inventory rests at 962.85 tonnes
July 14/a good sized withdrawal of 2.37 tonnes from the GLD/this would be a “paper withdrawal”/inventory rests tonight at 962.85 tonnes..
July 13/ we had a huge paper withdrawal of 15.98 tonnes of gold from the GLD/inventory rests at 965.22 tonnes.
July 12/we had no changes in gold inventory at the GLD/Inventory rests at 981.20 tonnes
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
July 19 / Inventory rests tonight at 965.22 tonnes


Now the SLV Inventory
July 19/no change in silver inventory at the SLV/Inventory rests at 348.580 million oz
July 18/no change in silver inventory at he SLV/inventory restss at 348.580 million oz
July 15/ no change in  silver inventory at the SLV/Inventory rests at 348.580 million oz
July 14/no changes in silver inventory at the SLV/Inventory rests at 348.580 million oz/
July 13./ a huge addition of 5.187 million oz into silver inventory at the SLV/ this is a paper addition as inventory rests at 348.580 million oz
July 12/ a huge addition of 1.94 million oz into silver inventory at the SLV/a “paper” addition/inventory rests at 343.393 million oz
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
July 19.2016: Inventory 348.580 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 4.4 percent to NAV usa funds and Negative 4.4% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 58.8%
Percentage of fund in silver:40.0%
cash .+1.2%( July 19/2016). 
2. Sprott silver fund (PSLV): Premium falls  to +0.11%!!!! NAV (July19/2016) 
3. Sprott gold fund (PHYS): premium to NAV  falls TO  0.46% to NAV  ( July 19/2016)
Note: Sprott silver trust back  into POSITIVE territory at +.11% /Sprott physical gold trust is back into positive territory at +0.46%/Central fund of Canada’s is still in jail.



And now your overnight trading in gold,MONDAY 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)

Gold Holds Near Two-Week Low as Risk Appetite Rises on U.S. Data

GoldCore's picture
Jul 19, 2016 7:24 AM

Gold has consolidated near the low of the past two weeks following on from its Brexit rally.

Having increased by 25% since the beginning of the year the pause in its’ rally comes as Barnabas Gan, an economist at Singapore-based Oversea-Chinese Banking Corp observes that “Market risk-on sentiment seems to have gone back” on the table, as reported by Bloomberg today.

Recent positive economic data out of the U.S. including positive retails sales, consumer prices and employment statistics have lured investors back in to the equity markets and trimmed the rally in gold. However, this recent positive economic news needs to be viewed against the backdrop of it being an election year in the U.S. and the desire of the White House to create a connection between positive economic sentiment and the democratic administration.

You can read the full article here 



Gold and Silver Bullion – News and Prices

Gold holds on to overnight losses; central bank policies in focus (Reuters)

Gold Daily and Silver Weekly Charts – Same Old (24hgold)

Investors Pull Most Money Out of SPDR Gold in Eight Months (Bloomberg)

Gold holds on to overnight losses as risk-on mood drags (Reuters)

SP 500 and NDX Futures Daily Charts – The Dog Days of Summer (24hgold)

A warning from Turkey for emerging-market investors (Moneyweek)

The Greatest Lie Ever Told (Silverseek)

No U.S. rate hike until 2018 — and it’s the consumer to blame, Morgan Stanley says (Marketwatch)

Gold Prices (LBMA AM)

19 July: USD 1,332.20, EUR 1,203.376 & GBP 1,009.042 per ounce
18 July: USD 1,326.15, EUR 1,200.298 & GBP 1,000.050 per ounce
15 July: USD 1,330.50, EUR 1,194.789 & GBP 994.150 per ounce
14 July: USD 1,325.705, EUR 1,192.99 & GBP 1,001.96 per ounce
13 July: USD 1,340.25, EUR 1,211.45 & GBP 1,009.74 per ounce
12 July: USD 1,352.85, EUR 1,217.84 & GBP 1,029.11 per ounce
11 July: USD 1,358.25, EUR 1,231.66 & GBP 1,059.95 per ounce

Silver Prices (LBMA)

19 July: USD 19.99, EUR 18.07 & GBP 15.18 per ounce
18 July: USD 19.72, EUR 17.83 & GBP 14.89 per ounce
15 July: USD 20.14, EUR 18.08 & GBP 15.06 per ounce
14 July: USD 20.25, EUR 18.23 & GBP 15.15 per ounce
13 July: USD 20.29, EUR 18.31 & GBP 15.25 per ounce
12 July: USD 20.35, EUR 18.35 & GBP 15.47 per ounce
11 July: USD 20.47, EUR 18.53 & GBP 15.78 per ounce

Recent Market Updates

– Gold, Trump and Rates: Bank That Foresaw Rally Flags $1,500
– Gold Lower After Central Bank’s Surprise Move
– “We Are On the Cusp of an Explosion in the Silver Price” – John Embry

– Stocks Rally – Is Brexit Systemic Risks Contained?
– Britain has a new prime minister – here’s what that means for you
– Metals Caught Between Global Gloom, U.S. Job Gains as Gold Slips
– 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%



It now seems that Britons are now warming to gold as a safe haven because of the BREXIT vote:

(courtesy Reuters/GATA)

After Brexit, ordinary Britons warm to gold as safe haven

Submitted by cpowell on Mon, 2016-07-18 19:25. Section: 

By Clara Denna
Monday, July 18, 2016

LONDON — When Britain voted to leave the European Union, the thoughts of Yorkshire teacher Grace Hall immediately turned to her family’s bottom line.

Three days later, as UK stocks and sterling plummeted, she put those thoughts into action and deposited part of her life savings — 25,000 pounds — into gold.

“My husband and I are both worried about bank failures and our cash getting swallowed up,” she said. “I’m also worried about our kids’ jobs and their future.”

Hall was not alone. Dealers are seeing an unprecedented amount of interest in gold, much of it from first-time buyers, to take advantage of its role as a safe haven in times of stress or unexpected “black swan” events like Brexit. …

The surge in gold buying is in contrast with Brexit’s effect on the London property market, considered an ironclad bet for the past 20 years. More than 18 billion pounds of property funds aimed at retail investors was frozen in early July following a tide of redemption requests after the Brexit vote. …

… For the remainder of the report:





I would not put much emphasis in data from the world gold council except for mine supply only;

(courtesy Douglas McIntrye/247WallSt.com



By  July 18, 2016 8:46 am EDT

Just 20 countries control 88% of the world’s gold.

According to the World Gold Council:

Gold demand reached 1,290 tonnes Q1 2016, a 21% increase year-on-year, making it the second largest quarter on record. This increase was driven by huge inflows into exchange traded funds (ETFs) – 364t – fuelled by concerns around the shifting global economic and financial landscape. Higher prices and industrial action in India pushed global demand for jewellery down (-19%), while total bar and coin demand was marginally higher (+1%). Central banks remained strong buyers, purchasing 109t in the quarter. Total supply increased 5% to 1,135t. Hedging by producers (40t) supported an increase of 56t in mine supply, although countered by a marginal decline in recycling.

The key findings from the report for the first quarter of 2016 are as follows:

  • Overall demand for Q1 2016 increased by 21% to 1,290t, up from 1,070t in Q1 2015.
  • Total consumer demand was 736t down 13% compared to 849t in Q1 2015.
  • Global investment demand was 618t, up 122% from 278t in the same period last year.
  • Global jewellery demand fell 19% to 482t versus 597t in the first quarter of 2015.
  • Central bank demand dipped slightly to 109t in Q1 2016, compared to 112t in the same period last year.
  • Demand in the technology sector fell 3% to 81t in Q1 2016.
  • Total supply was up 5% to 1,135t in Q1 2016, from 1,081t in the first quarter of 2015. Mine supply was up 8% to 774t.

Who Has All The Gold?

Source: courtesy of Karus Chains


A great piece from ted Butler and I agree 100% of what he asserts:

(courtesy Ted Butler/)

The Greatest Lie Ever Told

Theodore Butler


July 18, 2016 – 11:25am

Granted, if you are going to label something as the greatest lie ever, it must involve something important, both in substance and in terms of who told the lie. In this case, the lie involves what’s at the heart of the silver manipulation and happens to be the issue that I consider the key factor for its price. Importantly, the lie came from the federal regulator overseeing the silver market, the CFTC.  The good news is that you will be able to decide for yourself if my assertion is correct, given that the proof is nearly incontrovertible. The best news is that as the lie is more widely recognized, it should have a positive impact on the price of silver.

The key factor in silver is the concentrated short position on the COMEX, which also happens to be the current key factor in gold. Not only am I convinced that the concentrated short position in COMEX silver is the central issue, I am also convinced that wider awareness of its existence will bring about a freeing of the silver price. If the growing numbers of those who’ve discovered the importance of the COT reports and market structure to the price of gold and silver take one additional small step and incorporate the concentration data in their thinking, I believe the impact could be profound.

First, let me describe concentration as it applies to gold and silver and why it is so important and then touch on the history and status of the greatest lie ever. In review, if many different traders held very large short positions in COMEX silver and gold futures contracts, then no problem – that’s the way free markets are structured – with many different buyers and sellers.  And you may not realize this, but quite literally, you wouldn’t be reading this if no short side concentration existed. That’s because I would never have started and continued to write publicly about silver if a short side concentration didn’t exist.

The problem is that there are not many traders short COMEX silver in terms of market structure. Only eight traders hold, effectively, the entire net short position in COMEX silver and those traders are mostly banks.  Further, the concentrated silver short position, represents more in terms of real world production and inventories than the concentrated positions in any other commodity, with the comparisons with other commodities looking impossibly distorted. For instance, the concentrated short positions in corn and crude oil are the equivalent of a few days of world production, with silver’s concentrated short position amounting to more than two hundred days world production. Most remarkable is that so few silver miners are hedging that the entire concentrated short position is speculative on its face.

It’s important to understand that there is a big difference between a large short (or long) position held by many different traders and a large position held by a few traders. It’s impossible for hundreds or thousands of different traders to intentionally conspire to manipulate prices. Crowds may be irrational at times, but that’s far removed from deliberate price manipulation.  Only a few traders conspiring together make manipulation possible and US commodity law recognizes that. That’s why the CFTC monitors and publishes concentration data. Of course, monitoring and publishing are different from preventing manipulation or busting it up when it exists.

The concept of preventing concentration is common in the body of all antitrust and anti-monopoly law and, in fact, is the basis for such law. And while simple in concept, it takes some effort to grasp why the concentrated short position is at the center of the silver manipulation.

In my case, the lightbulb that went off in my head when I first uncovered the COMEX silver manipulation 30 years ago had to do with the size of the total open interest in COMEX silver being so out of whack with all other commodities in terms of world production. It was years later, in the mid-1990’s, that I uncovered that the key feature was not just the size of the open interest, but in how few in number were the traders who were short. That’s the key and because I began to press the CFTC on the specific issue of concentration on the short side of COMEX silver, this is what led to greatest lie in the history of market regulation.

Because the issue of concentration is at the core of market regulation, whenever I wrote to the agency about the matter, particularly if great numbers of readers joined in, the CFTC was, in essence, forced to respond. In fact, not only did the agency respond to my concerns about the short side concentration in COMEX silver on more than one occasion, it also did so in public releases, both in May of 2004 and 2008 in separate 15 page letters. Of course, the CFTC vehemently denied on both occasions that there was any manipulation as a result of a short side concentration in COMEX silver futures.

Far from resolving the matter, the issue of concentration has never been more important than it is today, because the concentrated short position in silver (and gold) has never been larger than it is currently. But let me deal with the greatest lie ever first. In the 2008 public letter, the CFTC lied through its teeth. It took me a year and a half to uncover the lie because there was not sufficient data available to know that at the time.  I try to avoid+ incessant linking to past articles, but this one won’t take very long. (Embedded in the article is the link to the CFTC’s 2008 public letter).


Let me summarize what the CFTC wrote and why it was a lie. The subject of the letter was the activity of large short traders in COMEX silver and the agency took great pains to dismiss any and all concerns of a short concentration causing any price manipulation or potential clearing failure. But check the timeline and the facts as we all have come to know them to be. The CFTC’s letter was dated May 13, 2008, nearly two months after Bear Stearns, who we now know was the largest concentrated short in COMEX silver and gold, went under, with its massive concentrated short position passed along to JPMorgan at the urging of banking authorities.

Read the CFTC’s letter and tell me if you see any reference to the largest COMEX silver short needing to be rescued just as silver prices were establishing near 30 year highs just two months prior. Remember, the CFTC was responding to the specific issue of a short concentration and left out completely the fact that the largest concentrated short went under just as silver and gold prices were surging to their highest levels in decades, creating margin calls of roughly $2 billion, which Bear Stearns, obviously, couldn’t meet. Yet, in 16 pages, the agency didn’t see fit to even footnote the matter. I ask you, what other word, aside from lie, would you assign to an attempt to evade the clearest proof of what could and did go wrong with a large concentrated position, than the biggest failure ever by a concentrated short seller and leading clearing (guaranteeing) member?

If anything, my description of the CFTC telling the greatest lie ever in 2008 is understated. That’s because the lie is still being told. For weeks, the concentrated short positions in COMEX silver and gold have risen to new historical extremes, yet the CFTC ignores the obvious price manipulation and dangerous market structure created by concentration. Again, it’s not so much that the short positions in COMEX gold and silver are so high; it is much more that the huge short positions are held by so few traders. A big short (or long) position isn’t necessarily manipulative on its face, but a highly concentrated position contains the necessary elements of manipulation, requiring it to be thoroughly examined.

The CFTC can’t and won’t thoroughly examine this matter because it has painted itself into a corner. After coming out on so many past occasions and forcefully denying even the slightest possibility of a silver manipulation, there is no way for the Commission to turn around and enforce the law now, no matter how extreme the concentration grows. It’s more than being laughed out of existence, such an about face would likely doom the agency to losing its independence and being folded into the SEC. Let’s face it – the continued existence of the silver market manipulation by means of a concentrated short position is a failure of the agency’s prime mission. It’s like the Department of Defense not defending us from foreign invasion.

For this reason, I have no intention of petitioning the agency to change its ways because I know it can’t. Despite that, I am convinced the short concentration remains the key feature to silver and gold and the proper attention to it could break the backs of the concentrated shorts. There is an ocean of world investment money looking for alternatives to zero percent interest rates and it will not take much more than a handful of big investment funds to stumble upon the issue of the short concentration and how little physical silver is available for purchase to end the COMEX scam.

Any objective investigation into the matter, moreover, will confirm that not only is the total net short position in COMEX silver (and gold) held by too few traders, those traders have no real economic reason to be short in the first place. There are no silver mining producers represented by the 8 big shorts and aside from JPMorgan, none of the big shorts hold big quantities of physical silver (unless they are hiding it on the moon, because it isn’t on earth). The big shorts are just banks and other financial firms speculating their butts off – just as Bear Stearns did. Talk about a double whammy – eight big shorts hold the entire net silver short position and not one of them has legitimate economic reason to be short, save for trying to zoom the technical funds. Any big investor learning of these facts would buy all the silver available (which isn’t much to begin with).

Until the physical market overwhelms the COMEX concentrated short scam, the big shorts may continue to prevail, although they have been seriously underwater of late, for the first time ever. Being the key factor in silver and gold, it will be the resolution and eventual dissolution of the concentrated short position that will drive silver prices in the future. Since the more observers that recognize the real nature of concentration the quicker it might get dissolved, I want to do what I can to steer attention to the matter.

Particularly for those already writing about the extreme COT market structure, recognizing the concentrated nature of the short side in silver and gold, as well as its eventual resolution should come easily. After all, there is now near universal coverage of how large the commercial net short positions are in COMEX gold and silver that considering just how concentrated those large positions are should be a snap. We all know that the resolution of the current extreme positioning will affect prices greatly, even if we can’t be sure of the timing and short term outcome of the resolution. By superimposing the concentration data onto the extreme market structure, the true extent of price manipulation and potential disorderly market conditions is amplified greatly. That’s because only the few can engineer a manipulation, not the masses.

For those seeking to determine concentration levels on your own, here’s how to do it. Take any long form futures only COT report and go to the concentration data at the bottom of each commodity.  Take the percentage listed under the net short positions of the 4 and 8 largest traders and multiply the total open interest given on top to the left to get the concentration in numbers of contracts. It changes every week, but for this reporting week in COMEX silver (July 5), the percent held net short by 4 or less traders was 32.4% and the percentage held by the 8 largest traders was 46.4%, which given a total open interest of 211,347 contracts results in the 4 largest shorts holding 68,476 net contracts short and the 8 largest traders holding 98,065 contracts net short. In silver ounces, these short positions come to 342.4 million oz and 490.3 million oz respectively.


These are the largest concentrated short positions in history and as such take on a much deeper meaning than if 500 million oz were held short by hundreds or thousands of traders. I suppose one could make a case that a silver short position of half a billion ounces was no big deal if held by hundreds of independent traders, but that supposition is impossible when the number of traders is eight or fewer. Why would so few traders dare to be that heavily short in silver on any legitimate basis?

Ironically, the CFTC asked that same question, in different words, in its 2008 letter. In its own words, it noted that the advocates alleging manipulation (me) failed to explain how the manipulators might profit and what could possibly be their motive in a long term manipulation. Failed to explain? How about the manipulators never taking a loss when adding short positions and the desperate economic survival motive of adding to shorts to prevent prices from rising after full short positions were established? Illegitimate profit and financial survival at all costs sound like sufficient motives for a crime to me. Isn’t this what motivates all financial crime?

The issue of concentration on the short side has been my main focus for decades and it is truly a shame it hasn’t been embraced fully. As and when it is embraced, the silver manipulation is not likely to continue. I encourage all to dig into this issue and would only ask for proper citation if it results in public commentary.

Ted Butler

July 18, 2016


Your early TUESDAY 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 /USA: YEN RISES TO 106.23

3. Europe stocks opened ALL IN THE RED    /USA dollar index UP to 96.93/Euro DOWN to 1.1031

3b Japan 10 year bond yield: REMAINS AT  -.226%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.23

3c Nikkei now WELL BELOW 17,000

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

3e WTI::  45.51  and Brent: 47.26

3f Gold UP  /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 -.039%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate RISE to 8.07%/: 

3j Greek 10 year bond yield RISE to  : 7.94%   (YIELD CURVE NOW  FLAT)

3k Gold at $1331.20/silver $19.90(7:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 18/100 in  roubles/dollar) 63.02-

3m oil into the 45 dollar handle for WTI and 47 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 SMAL REVALUATION UPWARD 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 .9876 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0878 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  -.039%

/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 1.550% early this morning. Thirty year rate  at 2.269% /POLICY ERROR)

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

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


US Futures Dip, European Stocks Slide After EU Court Slams Italian Bank Bailout Plans

After a head-scratching S&P500 rally – which not even Goldman has been able to justify – pushed stocks to new all time highs with seemingly daily record highs regardless of fundamentals or geopolitical troubles, overnight US equity futures dipped modestly, tracking weak European stocks as demand for safe haven assets including U.S. Treasuries and gold rises. Asian stocks outside Japan fall. Crude oil trades near $45 a barrel.

Europe’s Stoxx 600 Index slid 0.9% following equity declines in Hong Kong and Singapore. The Aussie tumbled 1 percent as the Reserve Bank of Australia said the jobs market was losing momentum amid weak inflation. The kiwi lost ground against all 31 major peers after policy makers moved to rein in the nation’s housing boom, clearing an obstacle to lowering borrowing costs. Treasuries gained as Morgan Stanley predicted the yield on 10-year debt will sink to 1 percent in the first quarter of 2017.

Some of the European weakness was due to a ruling by the European Union’s top court which backed EU guidelines designed to prevent taxpayers from footing the bill for bailing out stricken lenders, strengthening the hand of Brussels regulators as Italy fights to shield some bondholders caught up in the nation’s banking crisis. As Bloomberg reports, Tuesday’s decision is a show of support for the European Commission, which updated its crisis rules for banks in 2013 as part of a shift from taxpayer-funded bailouts to bail-in, the practice of imposing losses on investors before public money can flow.

“Burden-sharing by shareholders and subordinated creditors as a prerequisite for the authorization, by the commission, of state aid to a bank with a shortfall is not contrary to EU law,” according to the EU Court of Justice. The Luxembourg-based court’s decision is binding and can’t be appealed. The European Commission, which checks whether state aid violates EU rules, welcomed the ruling, which it said “confirms the commission’s current case practice and application of EU state aid rules to the banking sector.” The ruling also made the case for a bailout as opposed to a bail in more difficult and Italian banks dropped after the decision with Banca Monte dei Paschi declining as much as 7.1%. UniCredit SpA slipped 3.2% in early trading, while Intesa Sanpaolo SpA decreased 2.5%.

In addition to Italy’s banking slump, European mining companies led losses with Rio Tinto Group sliding 2.1% in London after reporting that second-quarter iron-ore production rose a weaker-than-expected 7 percent. Worse-than-estimated quarterly results from Akzo Nobel and Trelleborg dragged European stocks lower.

European weakness dragged down US equities, with futures on the S&P 500 Index dropping 0.4% after another all time high close yesterday.

As a result, some wondered if the hopium inspired rally is finally coming to an end: “The market is taking a pause,” said Tony Farnham, a strategist at Paterson Securities in Sydney. “There isn’t much of a catalyst out there. People are starting to question if there’s still value in the market following the post-Brexit rally.”

Others chime in: “There is a lot of hope built into U.K. share prices currently – hope on economic growth and hope on the political side,” said Robert Parkes, HSBC’s head of European equity strategy. “There is an unprecedented level of uncertainty on both of those issues. U.K. shares, including the FTSE 100, are in for a bumpy ride over the course of the next few months – in a downward direction.”

Some expressed outright skepticism: “On current sentiment it seems likely that any pullbacks will be shallow and a buying opportunity,” said Chris Weston, chief market strategist at IG Ltd. in Melbourne. “We will need to see good earnings, or the market is at risk of rolling over.

Still, for now the prevailing sentiment is that all dips are to be bought until proven otherwise by algos. This won’t happen, however, if central banks finally unleash the much-jawboned additional stimulus, especially now that the IMF is also in the fray. As Bloomberg adds, policy makers are under pressure to unleash stimulus as the global economic outlook shows signs of worsening. The IMF is set to update its projections for world growth on Tuesday and Managing Director Christine Lagarde warned last week that estimates may be cut. Nonetheless, global equities have recovered to above where they were at the time of the U.K.’s vote to leave the European Union and the U.S. earnings season has so far delivered more positive surprises than negative ones.

Elsewhere, the MSCI Asia Pacific excluding Japan Index fell 0.4%, with benchmark gauges in Hong Kong and Singapore losing at least 0.5%. Japan’s Topix index rose 1.1% from Friday’s close, buoyed by Monday’s slide in the yen. SoftBank Group Corp. tumbled 10%, its biggest loss since 2012, after agreeing to pay $32 billion for ARM Holdings Plc. The U.K-listed chipmaker was little changed after soaring 41% on Monday.

The modest unwind in risk-on positions, meant that 10Y U.S. Treasuries gained for the first time in four days, pushing their yield down by three basis points to 1.56 percent. The yield reached 1.60 percent in the last session, the highest it’s been since June 24, when the Brexit vote count was announced.

Market Snapshot

  • S&P 500 futures down 0.4% to 2153
  • Stoxx 600 down 0.9% to 335
  • MSCI Asia Pacific up less than 0.1% to 134
  • US 10-yr yield down 4bps to 1.54%
  • Dollar Index up 0.16% to 96.71
  • WTI Crude futures down 0.3% to $45.12
  • Brent Futures down 0.4% to $46.79
  • Gold spot up 0.4% to $1,334
  • Silver spot down 0.4% to $19.97

Top Global News

  • Turkey’s central bank will likely slow the pace of interest rate cuts after the failed coup attempt triggered a selloff in TRY and sovereign debt
  • Turkey Baa3 Ratings May Be Cut to Junk by Moody’s
  • U.K. inflation accelerated more than economists forecast in June boosted by airfares on trips to continental Europe
  • German ZEW investor sentiment deteriorates in Brexit aftermath
  • New Zealand’s central bank is moving to quell the country’s housing boom by restricting the amount of money property investors can borrow, paving the way for another cut in interest rates
  • Honda Audit Finds Takata Engineers Manipulated Air-Bag Data: Takata engineers gave ‘prettier shortened version’ to Honda
  • Oil Trades Near $45 Amid Speculation U.S. Output May Climb: Nationwide supplies to decline by 2.1 million barrels: survey
  • U.K. Inflation Rate Rises More Than Forecast on Airfare Surge: Rate rose to 0.5 percent from 0.3 percent in May, partly due to Euro 2016 football championship in France
  • Investor Challenges Baidu on Sale of Video Service to CEO: Hedge fund urges Chairman Robin Li to withdraw iQiyi bid
  • Morgan Stanley Says Year of the Bull Will Push U.S. Yield to 1%: Hornbach says yield will fall to 1% in 1Q 2017, more bullish than any of 61 economists surveyed
  • Netflix Stumbles on Path to World Domination With Price Hike: Results show subscribers more sensitive to costs than thought
  • Murray Energy Working to Renegotiate Credit Terms: Reuters
  • Thrive Capital Said to Have Raised $700m for Fifth Fund: NYT
  • Lufthansa Said to Join Airbus, Honeywell on Runway System: WSJ

Looking at regional markets, Asian stocks outside Japan fell from their highest levels in almost nine months as commodity producers led losses.  4 out of 10 sectors fall with industrials, energy underperforming and telcos, financials outperforming.  The MSCI Asia Pacific was up less than 0.1% to 134, unmoved by the latest Nikkei 225 jump 1.4% higher to 16723. Elsehwere the Hang Seng down 0.6% to 21673, while the Shanghai Composite was down modestly by 0.2% to 3037 and the S&P/ASX 200 down 0.1% to 5451

Top Asian News

  • Son Invokes Yoda of Star Wars on SoftBank Debt as Bonds Fall: SoftBank 5.375% bond yield jumped most since issuance Monday
  • Asia Embraces Bullet Trains as Singapore, Malaysia Sign Deal: Singapore-KL link will follow projects in Indonesia, India
  • Vietnam Faults as ‘Untruthful’ China Media Reports on Sea Ruling: China claims nations support its stance on South China Sea
  • India to Inject $3.4 Billion to Boost Capital of 13 State Banks: State Bank of India, Indian Overseas Bank among lenders
  • Bank of East Asia Shares Fall After Elliott’s Legal Action: action escalates battle against BEA management
  • China Said to Create Immigration Office to Lure Overseas Talent: First-of-its-kind agency could be set up before year’s end

Over in Europe, the Stoxx Europe 600 Index retreated 0.4 percent as of 8:12 a.m. in London, following equity declines in Hong Kong and Singapore. The Aussie tumbled 1 percent as the Reserve Bank of Australia said the jobs market was losing momentum amid weak inflation. The kiwi lost ground against all 31 major peers after policy makers moved to rein in the nation’s housing boom, clearing an obstacle to lowering borrowing costs. Treasuries gained as Morgan Stanley predicted the yield on 10-year debt will sink to 1 percent in the first quarter of 2017, lower than any of the 61 estimates in a Bloomberg survey.

Top European News

  • Airbus Said to Cut in Half A400M Deliveries for 2016 to Germany: Planemaker grappling with gearbox, engine, fuselage faults
  • EU State-Aid Rules for Banks in Crisis Backed by Top Court: Decision comes as Italy and EU seek solution on investor burden-sharing
  • Ericsson Plans More Cost Cuts as Revenue Trails Estimates: Network maker to reduce research on Internet products as demand for wireless gear falling in Europe, Russia, Brazil
  • Volvo Cuts North American Market Outlook as Orders Slump: Truck orders in North America fell 29% in second quarter
  • Akzo Signals Europe Paint Demand Slowed, Marring Profit Run: Slowdown in U.K. paint sales has yet to recover, customers are reporting increased volatility in order patterns

In FX, the Aussie slipped 1 percent to 75.16 U.S. cents, after strengthening in each of the last seven weeks. Minutes published Tuesday from the RBA’s July 5 policy meeting showed that the central bank estimated the economy to have slowed last quarter and policy makers were concerned about currency appreciation. The likelihood of an August rate cut has increased to 56 percent from 45 percent over the past week, derivatives indicate.  New Zealand’s dollar dropped 1.3 percent. The central bank said it will require property investors buying housing in the nation to have a deposit of at least 40 percent from Sept. 1, compared with an existing requirement that such buyers in Auckland have at least a 30 percent deposit. Swaps traders are pricing in a 77 percent chance of an RBNZ rate cut on Aug. 11, compared with 39 percent a week ago. The yen strengthened 0.1 percent to 106.10 versus the greenback, after sliding 1.2 percent in the last session. It was trading at about 106 prior before the outcome of the Brexit vote. The currency tumbled 4.1 percent last week as Japanese Prime Minister Shinzo Abe outlined plans for a “bold”stimulus package in the wake of an election victory. Poland’s zloty led losses among emerging-market currencies, weakening by 0.4 percent. Malaysia’s ringgit fell 0.3 percent. China’s yuan was among the best performers with a 0.1 percent gain.

In commodities, crude oil fluctuated around $45 a barrel. It slid 1.6 percent on Monday after a failed coup attempt in Turkey failed to disrupt shipments through the country, a vital conduit for moving from Russia and Iraq to the Mediterranean Sea. Gold rose from a two-week low, while copper declined 0.1 percent in London.

Bulletin Headline Summary from RanSquawk and Bloomberg

  • Treasuries higher in overnight trading as global equities drop with oil and gold rises. Today’s data includes housing starts and building permits.
  • Morgan Stanley’s Matthew Hornbach called this year’s Treasury market rally. Now he’s revising his forecasts and is more bullish than just about anyone else, calling for 10Y U.S. yields to fall to 1% in the first quarter of 2017
  • Republican Party approved a platform Monday that ostensibly calls for breaking up the biggest banks by reinstating the Glass-Steagall Act
  • German investor confidence deteriorated in July on concern that Britain’s decision to leave the European Union could weaken the region’s fragile economic recovery
  • The EU’s top court backed EU guidelines designed to prevent taxpayers from footing the bill for bailing out stricken lenders, strengthening the hand of Brussels regulators as Italy fights to shield some bondholders caught up in the nation’s banking crisis
  • China’s cabinet fueled speculation that the nation is pressing ahead with debt-to-equity swaps that would give lenders stakes in some companies as part of tackling a build-up in corporate leverage and bad loans
  • Sales of London homes under construction slumped 34 percent in the second quarter as the prospect of a vote to leave the European Union damped demand already hurt by higher taxes

* * *

DB’s Jim Reid concludes the overnight wrap

The hot weather seemed to make for bit of a lethargic session in markets yesterday, although some M&A activity in the tech space and also another better than expected earnings report in the bank sector – this time from BofA – helped stocks eke out modest gains. The S&P 500 finished +0.24% by the time the closing bell came around with the Nasdaq (+0.52%) up a little more. The intraday high-to-low range for the former has not exceeded 0.65% in the last four sessions, a sign perhaps that we’re finally starting to see a little bit of consolidation in markets ahead of the summer lull. Treasury yields also inched a few basis points higher although rate hike expectations actually dipped ever so slightly. The European session was a little more mixed, although again moves were fairly modest for the most part. The Stoxx 600 ended +0.23%, while the DAX (-0.04%) nudged slightly into the red. Turkish equities plummeted over 7% following the failed coup late on Friday although that was about the extent of the fallout with markets elsewhere fairly resilient.

That M&A activity we mention came in the form of Japanese telecom group Softbank’s takeover of the UK’s semiconductor designer ARM Holdings in a bumper £24.3bn deal. The deal would be one of the largest European technology deals and SoftBank’s largest acquisition to date. Much of the chatter is that this would likely be seen as a bit of post-Brexit confidence for deal activity in the UK although it’s worth noting that ARM derives the vast majority of its revenues outside the UK (mainly Asia and North America) and would likely have been relatively immune from Brexit. On the face of it the roughly 11% fall for Sterling (vs. the Yen) would also make the deal more attractive although this has been more than offset by the c.16% move higher for ARM’s shares since the vote to Friday’s close. Yesterday ARM’s share price rallied 41% following the news.

Meanwhile, on the earnings front Bank of America continued what’s been a fairly decent start for US bank earnings after reporting Q2 results ahead of both earnings and revenue expectations, with better than expected fixed income trading revenues again being a big driver of that as we saw with JPM and Citi. It’s worth noting however that while BofA’s Q2 EPS of 0.36c was above the 0.32c expected, that Bloomberg consensus forecast was at 0.36c just two week ago, so another good example of how last minute analyst revisions can help to boost the initial headline numbers.

Away from this the tech sector also kicked off with a few earnings reports of its own. Coming after the closing bell, the slide in IBM’s revenue was not quite as bad as feared, although another quarter of negative revenue growth made it 17 consecutive quarters that revenue has fallen in YoY terms. Meanwhile Yahoo’s results were a bit more mixed, while Netflix disappointed on subscriber numbers, sending shares down some 17% in extended trading at one stage.

Switching over to Asia this morning, Japan aside the bulk of bourses are trading with a weaker tone as we go to print. The Hang Seng (-0.59%), Shanghai Comp (-0.60%), Kospi (-0.41%) and ASX (-0.21%) are all in the red, with a second consecutive daily decline for Oil weighing slightly. In Japan the Nikkei (+0.47%) is up although is playing catch up somewhat having just reopened from a public holiday. That performance is more impressive given the 10% slide in SoftBank shares this morning. Elsewhere US equity index futures are also slightly in the red following those earnings last night after the bell. In FX the Aussie Dollar is -0.85% after the RBA meeting minutes came across as slightly dovish, while the Kiwi Dollar is -1.08% after the RBNZ announced its intention to tighten existing LVR restrictions on residential mortgage lending from September.

Moving on. Over in credit markets yesterday one headline which caught our eye came from the Canadian Imperial Bank of Commerce (CIBC) which became the first non-German and non-CBPP3 eligible EUR benchmark to issue a covered bond with a negative yield. Indeed the €1.25bn 6y bond was issued at -0.009% according to Bloomberg. Another incredible statistic from the current era of negative rates.
Staying with credit, yesterday the ECB released its holdings from its CSPP program for the first time. There didn’t appear to be any surprises on the list but there was confirmation that they’ve purchased split IG rated names like Telecom Italia and Lufthansa which shows they’re happy to buy what are effectively HY names in index terms. By also buying Glencore they’ve shown that they’re not afraid to buy names that have been under pressure and are not sticking strictly to Eurozone only entities. So it’s confirmation that we expect them to take a rules based approach over a credit selection process.

In terms of run rate, their holdings as of 15 July 2016 were €10.427bn. This implies net purchases settled last week of €1.953bn with an average daily run rate of €391m. This compares favourably with an average daily run of €401m since the program started. So there has been no real sign of let up in their buying in July in spite of holiday season starting. August might be trickier and then the run rate in the autumn might depend on the volume of new issuance as secondary will get increasingly more challenging as the easy looser bonds are purchased.

In data terms the calendar was relatively quiet yesterday with a 1pt fall in the NAHB housing market index in the US to 59 (vs. 60 expected) the only data of note. There was a bit of chatter over at the BoE however where we heard from the MPC’s Martin Weale. The committee member said with regards to the uncertainty stemming from Brexit, that ‘this uncertainty points to the argument that we should wait for firmer evidence before making any policy change and least in the absence of any strong arguments for an immediate change’. It’s worth highlighting that the post-Brexit data flow is limited still although this Friday we will get the flash July PMI’s in the UK where expectations are for a decent leg lower.



i)Late  MONDAY night/TUESDAY morning: Shanghai closed DOWN 6.97 POINTS OR 0.23%/ /Hang Sang closed DOWN 161.89 OR 0.57%. The Nikkei closed UP 225.46 OR 1.37%/  Australia’s all ordinaires  CLOSED DOWN 0.25% Chinese yuan (ONSHORE) closed UP at 6.6919 ON A LITTLE REVALUATION /Oil FELL to 45.51 dollars per barrel for WTI and 47.26 for Brent. Stocks in Europe ALL IN THE RED. Offshore yuan trades  6.7189 yuan to the dollar vs 6.6919 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS CONSIDERABLY AS  MORE USA DOLLARS LEAVES THEIR SHORES. 




Chinese Vice Chairman tells its troops to get ready for combat.This sounds ominous

(courtesy xinhua/Bloomberg/zero hedge)

Chinese Military Vice Chairman Urges Troops to Get Ready For Combat: Xinhua

While it is unclear how much of it is populist bluster, how much is posturing, and how much an actual, objective caution, Bloomberg points out an article by China’s news agency Xingua posted on the website of the Ministry of National Defense, in which Fan Changlong, vice chairman of China’s Central Military Commission (which is chaired by Xi Jinping himself) “urges Chinese troops to get prepared for combat by improving planning, equipment and logistical support in order” to be ready to “win the war.”

Bloomberg adds that Fan made the comments in recent inspection tour of China’s Southern Theater Command. The warning comes days after China officially warned the US that its patrols in the South China Sea – which despite last week’s decision by the Hague tribunal – deems as its own, could end in “disaster.”



A quick bio of Fan Changlong:

Fan Changlong (born 1947) is a general in the People’s Liberation Army (PLA) of the People’s Republic of China. He is a Vice Chairman of the Central Military Commission, and formerly served as commander of the Jinan Military Region.


Fan was born in Dandong, Liaoning Province. He joined the PLA and the Communist Party of China in 1969. He became a major general in 1995, a lieutenant general in 2002, and general on July 15, 2008. Fan has been an alternate member of the 16th Central Committee of the Communist Party of China, and a full member of the 17th Central Committee. In 2012, ahead of the 18th Party Congress, he was appointed Vice Chairman of the Central Military Commission.


In mid-April 2016, he paid a visit to the disputed Spratly Islands in the South China Sea, according to the country’s Ministry of National Defense, which reported the visit on Friday 15 April 2016. Gen. Fan Changlong was said to have been the highest-ranking People’s Liberation Army officer ever to visit the Spratly Islands. General Fan led a delegation to the “relevant Nansha Islands to offer good wishes to officers and personnel stationed there, and also to understand the construction of facilities on the islands,” said a brief statement from the Ministry of National Defense. His tour appeared intended to show China’s determination to ward off any challenges to its claims over the islands, which are also the subject of claims by the Philippines, Malaysia, Vietnam, Brunei and Taiwan.

* * *

And here is the full article as it appeared on the Chinese Ministry of National Defense., google translated.

* * *

CPC Central Committee, Central Military Commission Vice-Chairman Fan Changlong emphasized recently in the southern theater forces research, to earnestly study and implement President Xi major strategic thinking and decision-making important instructions, adhere to the party’s absolute leadership over the army, firmly grasp the Party in the new situation strong military target under the full implementation of the political army reform and a strong army, in army stepping up preparations for military struggle, strengthen the combat of military training, and constantly improve deterrence and combat capability, and resolutely obey the Central military Commission and President Xi command, and resolutely safeguard national sovereignty, security and development interests.

Central Military Commission, commander of the Air Force Ma Xiaotian, CMC member and rocket forces commander Wei Feng and were about to participate in research.

Fan Changlong stressed the need to deeply understand the complexity of the grim situation facing the security, stepping up preparations for military struggle of the work to ensure that the order, be able to have to go win the war. Focus on the difficult situation to deal with complex, targeted research warfare countermeasures, revision and improvement plan program, deepen all aspects of preparation of personnel, equipment, security and so on. Depth specializing in refining and confrontational drills used in efforts to build a critical moment, to play a key role in the “dagger” forces, improve military and emergency response capabilities assault capability. Strengthen combat duty, well-organized air and sea patrol, firmly secure disposal of various contingencies, to ensure air safety side of the sea. We must resolutely implement the Party Central Committee and President Xi instructions requirements, support local flood prevention work to do, to protect people’s lives and property, to restore normal production and life order to contribute.

Fan Changlong pointed out that we should always put ideological and political construction in the first place the construction efforts in enhancing political awareness, the overall sense of core consciousness, awareness on par with efforts to lay a solid command of the Party’s ideological and political foundation. Should study and implement President Xi “July” important speech as a major political task, a thorough understanding of speech grasp the profound meaning and spirit, enhance crack army building, the actual ability to reform and preparations for military struggle puzzle. To continue thoroughly implement the spirit of the ancient Tianquan Jun political union, a strong push forward the reform of military education campaign and the “two learning to do a” study and education, a view to achieving real results.

Fan Changlong stressed the need to pay attention to changes in military research and external environment, the test of reform and adjustment of interests, arduous task forces and other factors soldiers thought to bring stability to focus on the grassroots level, unify ideological work fell to the grass roots, and create hold people’s hearts by undertaking internal environment, so that the officers and men have to realize the value of life and to get a sense of accomplishment. Strengthen military management, to maintain security and stability forces. Perseverance strengthen style building, completely eliminate Guo, Xu due to potential regulatory pernicious habits and promote overall improvement troops atmosphere, enhance the cohesion of combat troops to stimulate positive energy Army-strong army.


European confidence crashes to 4 yr lows:

(courtesy zero hedge)

“Whatever It Takes” Has Failed – European Economic Confidence Crashes To 4-Year Lows

If the premise of central-banking largesse is to maintain (or inspire) economic confidence, then Mario Draghi’s smoke and mirrors have officially failed. This morning’s ZEW data on German and European Consumer confidence is a disaster. Both the current situation and expectations for Germany tumbled but most worryingly, the ‘hope’ for European economic growth has crashed to its lowest since Draghi promised to do “whatever it takes” in the summer of 2012.

How long before “whatever it takes” morphs into shock and awe “helicopter money”? How else will Europe afford all the immigrants?



S and P lowers the boom on Deutsche bank as they cut their outlook to negative due top challenging operating conditions in the banking environment.  These guys are the largest derivative player in the world:

(courtesy zero hedge)


S&P Cuts Deutsche Bank Outlook To Negative On “Challenging Operating Conditions”


It has been a while since investors focused their attention on the world’s “most systematically risky” bank, Deutsche Bank. Moments ago, S&P made sure to remind us that nothing is fixed, when it released a report saying that “Operating Conditions May Challenge Strategy Execution” but keeping the bank at a BBB+ rating.

The full report below:

Deutsche Bank Outlook Revised To Negative As Operating Conditions May Challenge Strategy Execution; Ratings Affirmed

  • We believe the difficult operating environment may challenge Deutsche Bank as it undertakes a material restructuring of its business model and balance sheet.
  • We are revising our outlook on Deutsche Bank to negative from stable.
  • We are affirming our ‘BBB+/A-2’ issuer credit ratings on Deutsche Bank.
  • The negative outlook reflects the possibility that we may lower the long-term issuer credit rating if market conditions challenge Deutsche Bank’s ability to preserve its capital and maintain its franchise while implementing its restructuring plans.

LONDON (S&P Global Ratings) July 19, 2016–S&P Global Ratings said today that it revised the outlook on Germany-based Deutsche Bank AG to negative from stable. The ‘BBB+/A-2’ global scale, ‘cnA+’ Greater China regional scale, and ‘trAAA/trA-1’ Turkey national scale issuer credit ratings were affirmed.

At the same time, we revised the outlook on certain Deutsche Bank branches and subsidiaries to negative from stable (see rating list for details). The ratings on these entities were affirmed.

In addition, we affirmed the issue ratings on Deutsche Bank AG’s long-term senior unsecured debt at ‘BBB+’, short-term senior unsecured debt at ‘A-2’, dated nondeferrable Tier 2 regulatory capital instruments at ‘BB+’, and perpetual Tier 1 instruments at ‘B+’.

The outlook revision reflects our view that the unfavorable operating environment poses particular challenges to Deutsche Bank as it implements its 2016-2020 strategic plan (known as Strategy 2020). Although market conditions may recover somewhat from the weak first quarter of 2016, ultra-low interest rates and generally subdued client trading activity may persist for the foreseeable future. These pressures affect the entire sector but we believe they are particularly unhelpful for Deutsche Bank as it seeks to strengthen capital and maintain its franchise while fundamentally restructuring its business model and balance sheet. We note that Deutsche Bank is still in the early stages of its plan and we expected from the outset that 2016 would be the peak restructuring year. Where possible, we expect it will seek to accelerate planned cuts in costs and regulatory risk-weighted assets (RWAs) to mitigate lower revenues. Nevertheless, although it is not our current base-case scenario, we see a risk that the achievement of Deutsche Bank’s targets under Strategy 2020 may be challenged if operating conditions remain adverse.

More specifically, the negative outlook reflects the potential removal of the one-notch positive adjustment that we currently include in the ‘BBB+’ long-term issuer credit rating. This adjustment reflects our view that, if it executes Strategy 2020 well, Deutsche Bank would transition toward improved stand-alone creditworthiness over the medium term if it achieves a more stable and predictable operating model. Key elements of Strategy 2020 include significant reductions in RWAs and leverage exposure; a far-reaching cost cutting program; and exits from unprofitable countries, products, and markets. These initiatives are intended to strengthen the fully-loaded Common Equity Tier 1 (CET1) and leverage ratios to at least 12.5% and 4.5%, respectively, in 2018 and beyond. We could remove the one-notch positive adjustment from the rating if we believe Deutsche Bank appears likely to fall short of these objectives. If the Strategy 2020 measures prove insufficient, we believe it would be difficult for Deutsche Bank to extend cost and RWA cuts without harming its core businesses. The bank has already cancelled equity dividends in respect of the 2015-2016 financial years, which reduces flexibility to respond to unexpected capital events.

We have affirmed the ratings because, in addition to the one-notch positive adjustment, the anchor and bank-specific factors are also unchanged. Our risk-adjusted capital ratio was 8.6% at year-end 2015 and we expect it to be in the 8.5%-9.0% range at year-end 2017. This projection assumes relatively weak earnings in the near term, a significant reduction in RWAs, and further material litigation charges. We consider that the bank’s principal capital constraint will occur in 2019-2020 when the Basel Committee’s RWA reforms are due to be implemented and Deutsche Bank’s minimum regulatory requirement will be a 12.25% fully-loaded CET1 ratio. The bank expects to meet this hurdle by steadily strengthening retained earnings in the coming years as its restructuring measures take effect and litigation charges ease. The scope and timing of the RWA reforms remain highly uncertain and an easing of the ultimate requirements would benefit Deutsche Bank’s transition process.

The U.K.’s recent vote to leave the EU (Brexit) is a consideration in the outlook revision, but not a prominent one. We consider that Deutsche Bank should not be materially affected if the U.K. were to lose access to the EU financial services passporting arrangement, although it may need to relocate some activities from its large London branch. We assume Deutsche Bank’s trading revenues received a boost from Brexit-related market volatility but, in the longer term, we see Brexit as a factor that may prolong the current period of ultra-low global interest rates and depressed business volumes.

The negative outlook reflects our view of the execution challenges facing Deutsche Bank over our two-year rating horizon as it restructures its business model and balance sheet. We regard 2016-2017 as the most demanding phase of Strategy 2020 and we see a risk that generally unfavorable operating conditions could challenge the achievement of its goals. In assessing Deutsche Bank’s progress, we intend to focus on its capital generation prospects for 2017 and beyond, its performance versus peers, and its ability to defend its market position in its core businesses.

We could lower the long-term issuer credit and senior unsecured issue ratings if we consider that Deutsche Bank is falling behind its announced schedule for strengthening its business position and risk position. In that scenario, we would likely remove the one-notch positive adjustment that we currently include in the ‘BBB+’ long-term rating. Higher-than-expected litigation charges or material losses on disposal of non-core businesses could also lead to a downgrade if they materially erode capital.

If we were to lower the long-term rating to ‘BBB’, we would likely maintain the short-term rating at ‘A-2’ due to Deutsche Bank’s satisfactory liquidity profile. The issue ratings on Additional Tier 1 and Tier 2 regulatory capital instruments would be unaffected if the stand-alone credit profile (the starting point for these ratings) remains ‘bbb’.

We could revise the outlook to stable if Deutsche Bank executes Strategy 2020 well, maintains a resilient business position, and demonstrates progress toward its balance sheet targets.



Turkey is like a bank:  Too big to fail!!

(courtesy zero hedge)

Piling On To The “Surreal” Response To Turkish Turmoil: Here Comes The Central Bank

Update: Turkey’s central bank indeed cut, and by 25 bps, in line with expectations:

  • Turkey central bank cuts top end of its rates corridor 25bps to 8.75%, as expected
  • Holds benchmark repo rate at 7.5%, as expected
  • Holds overnight borrowing rate at 7.25%, as expected

* * *

In less than half an hour, the Turkish central bank will steal the public spotlight, if only very briefly, from Erdogan when it announces whether it will cut rates by 50 bps, 25 bps, (or – less likely – it won’t cut at all). But in light of the recent stunning transformation in the country’s political landscape, does this decision really matter? According to the market yes; according to Bloomberg’s Richard Breslow, it is simply one more indication of how surreal the response to the Turkish turmoil has become.

Here is his full note.

Turkey Shouldn’t Be Confused With a Penny Stock

Much of the response to the turmoil in Turkey has been surreal, to say the least. While President Erdogan was rounding up thousands of alleged plotters, shuttering media, closing down a bank and accusing the U.S. of harboring the ringleader there has been a lively debate whether this means the central bank should cut 50bps today or only 25.

Do we possibly think it will make a difference? Apparently a lot of people do. In this age of monetary policy uber alles, every setback somehow gets sold as a buying opportunity. There are no long-term ramifications ascribed to anything.

“Valuations look cheap. Yields look attractive.” Forget that the tourist industry will be toast. That business and consumer sentiment are likely to tank. The news cycle will pass. After all there’s great sports on the television.

There was no shortage of assurances that the impact was localized and no reason this couldn’t be a “risk-on” day for the rest of us. No reason to worry about the European banks that have been betting heavily on Turkey. And just wait until Europe gets a freshly topped-up bill for the Syrian refugee deal.

Moody’s and Fitch immediately warned on the country’s ratings, citing instability. Can’t have that. IMF Managing Director Lagarde countered that “quick action” by the CBRT has calmed markets. Move along, nothing to see here.

So what if the war on terror just got more difficult, they’re a member of NATO. Oh wait, didn’t U.S. Secretary of State Kerry warn that Turkey’s behavior may make it unsuitable to be part of that organization? Tough words. But when this stress test is evaluated they’ll be deemed systemically important and too big to fail. Erdogan is counting on it. Someone had better tell ISIS.

Monetary policy can cure many ills. Sort of. But to think it can eliminate all geopolitical risk and societal failings is a dip too far to buy.


Tens of thousands more have been purged as Turkey “concentrates” on extraditing Gulen. Interesting enough, Turkey now blames the downing of the Russian planes on Gulen:

(courtesy zero hedge)

Turkey Latest: Tens Of Thousands Purged; “Gulenist Media” Shut Down; Pilots Behind Russian Jet Downing Arrested

Turkish president Erdogan continues his witch hunt purge for the third day, and as of this morning the office of the Turkish prime minister removed from duty 257 staff suspected of being linked to the failed coup Reuters cites a source in the PM’s team as saying Tuesday. The number of those suspended from duty in the PM’s office has reached 10 percent of the estimated 2,600 total personnel of Prime Minister Binali Yildirim’s staff.

The crackdown is also impacting the army, where the state-run Anadolu news agency reported that President Recep Tayyip Erdogan’s Air Force adviser, Lt. Col. Erkan Kivrak, has been detained at a hotel in the Serik district of Turkey’s southern province of Antalya. It says Kivrak was detained while on vacation. Following processing by the Antalya police, he has been transferred to Ankara. Additionally courts have ordered 85 generals and admirals jailed pending trial over their roles in a botched coup attempt. Dozens of others were still being questioned.

Additionally, about 100 employees of Turkey’s National Intelligence Organization have been suspended from work over alleged ties to the coup of July 15, reports Haber Turk newspaper.

Anadolu Agency said Tuesday that those formally arrested include former air force commander Gen. Akin Ozturk, alleged to be the ringleader of the July 15 uprising (we documented the surprising flip-flop in his narrative yesterday) as well as Gen. Adem Hududi, commander of Turkey’s 2nd Army, which is charge of countering possible threats to Turkey from Syria, Iran and Iraq.

And then there are the teachers: moments ago Anadolu also reported that the Turkey education ministry has suspended 15,200 staff and adds that Turkey has asked for the resignation of all university deans.

Summarizing the latest purge we get the following numbers:

  • 15,200 educators
  • 8,000 police officers
  • 3,500 soldiers
  • 3,000 judges
  • 492 clerics
  • 257 in PM’s office
  • 120 generals and admirals

While the west has been largely oblivious of the Turkish purges, they have been noticed at the U.N. whose human rights chief expressed alarm about “the mass suspension or removals of judges in Turkey.”  Zeid Ra’ad al-Hussein also decried comments from some officials that the death penalty could be reinstated, saying such a move would be “a big step in the wrong direction” and violate Turkey’s responsibilities under international law.

Yet even as the arrests continue, Turkey vowed on Tuesday to root out allies of the U.S.-based cleric, Fethullah Gulen, it blames for a failed coup attempt last week, after an already deep purge of the army, police and judiciary, and said it had sent Washington evidence of his wrongdoing. Prime Minister Binali Yildirim accused Washington, which said it will only consider extradition if clear evidence is provided, of double standards in its fight against terrorism.

“We have more than enough evidence, more than you could ask for, on Gulen,” Justice Minister Bekir Bozdag told reporters outside parliament. “There is no need to prove the coup attempt, all evidence shows that the coup attempt was organized on his will and orders.”

Earlier today, Turkey’s deputy prime minister says dossiers containing details of activities of Gulen have been sent to the U.S. Numan Kurtulmus says Tuesday he can’t go into the details of the files but said they include the past actions of the group led by Fethullah Gulen. They may also include new evidence that emerges from the current investigation.

There are conflicting reports about whether Turkey has sent an official extradition request to the US, with AP reported that this has not yet happened, however FT saying that it has indeed happened:

Turkey has sent the US four dossiers on the alleged activities of Pennsylvania-based Islamic cleric Fethullah Gulen, following up on a demand for his immediate extradition that threatens to derail relations between the two Nato allies.

But as Turkish demands get louder, the US stance — that any request for extradition should go through a judicial review — has angered Turkish politicians, including Prime Minister Binali Yildirim, who told reporters on Monday that “we will be a little bit disappointed if our friends say ‘show us the evidence’ while there are members of this organisation which is trying to destroy a state and a person who instructs it”.

“Even questioning our friendship may be brought to the agenda here,” he added.

But the request does not include any evidence of Mr Gulen’s actions related to the coup, said Bekir Bozdag, the justice minister, noting the complexity of an ongoing investigation. Instead, a Turkish official said, the dossiers include the results of Turkish prosecutors’ long-running probes into Mr Gulen’s actions.

Meanwhile, as Turkey continues to pursue every domestic trace of Gulen, moments ago Turkey’s radio-TV watchdog RTUK unanimously voted to cancel all broadcast rights and licenses of radio and TV stations that are linked to Gulenist “FETO/PDY” organization, it says in statement on website.

Names of outlets, whose broadcast rights and licenses are canceled, according to state-run Anadolu Agency: STV, Samanyolu Haber, Samanyolu Haber Radyo, Can Erzincan TV, Kanal 124, Yumurcak TV, Hira TV, MC TV, Dunya TV, Kanal Turk, Bugun TV, Mehtap TV, Berfin FM, Kanal Turk Radyo, Burc FM, Samanyolu Haber Radyosu, Radyo Mehtap, Haber Radyo Ege, Dunya Radyo, Radyo Kure, Merkur TV, Esra Radyo, Tuna Shoping TV, Samanyolu Haber Radyo Anadolu

* * *

But in what may be the most surprising development, Turkish officials on Tuesday also blamed Gulen’s followers for shooting down a Russian Su-24 in November. That incident brought Russian president Vladimir Putin’s wrath on Turkish president Recep Tayyip Erdogan and Turkey’s economy, in the form of travel bans for tourists and curbs on Turkish exports. The pilots were rounded up on Saturday, as part of what has become a wide-ranging purge of supposed plotters.

“Two Turkish pilots who shot down a Russian Su-24 near the Syrian border were taken into custody, according to a senior Turkish official speaking on condition of anonymity,” Bloomberg reports, citing a high-level Turkish official.

In other words, the only reason Turkey could not hand over the two pilots to Putin is because – until Friday – they hadn’t made clear their intentions of overthrowing Erdogan. Sounds legit.

Putin and Mr Erdogan are expected to meet in August for the first time since the jet was downed, indicating a mending of fences with Russia just as Turkey bristles at Washington for harbouring a man Mr Erdogan once considered a friend, but now describes as a terrorist.




This is far more worrisome, as the Turkish lira plummets to below levels Friday night, when it was first announced of a coup. The markets are stating that Erdogan went way too far and they are punishing the country:

(courtesy zero hedge)

Erdogan Goes Too Far, Market Warns As Lira, Turkish ETF Suddenly Tumble

While so far the Western diplomatic response to Erdogan’s unprecedented putsch has been mostly stunned silence (with just the U.N. human rights chief expressing alarm about the mass suspension or removals of judges so far), the market is starting to get concerned, and moments ago the Turkish Lira suddenly tumbled, sliding below Friday’s closing level, while at the same time the MSCI Turkish ETF plunged as well.

This is not in response to speculation of another military coup; it is, however, in reaction to market concerns that the Erdogan regime counter-coup has now gone too far, and as a result not only the Turkish economy, but its capital markets, and society, will all be impacted unless somehow the Turkish president’s unprecedented scramble for power is somehow contained.

We have truly entered a new normal if capital markets are supposed to keep corrupt, conflicted “democratic” politicians honest.




My goodness!!  Erdogan just fired all university deans and then sacked 21,000 private school teachers.  Turkey is going back into the early middle ages as he wants conditions similar to a caliphate and he is that leader:

(courtesy zero hedge)

Erdogan Unleashes Unprecedented Crackdown: Fires All University Deans; Suspends 21,000 Private School Teachers

Over the weekend, after the initial reports of the purge unleashed by Erdogan against Turkey’s public,we previewed the upcoming, far more dangerous counter-coup as follows: “it was the next step that is the critical one: the one where Erdogan – having cracked down on his immediate military and legal opponents – took his crusade against everyone else, including the press and the educational system.

But while Turkey’s press is already mostly under Erdogan’s control, it is the educational witch hunt fallout that is far more troubling, and just as expected over the past hour we have gotten a glimpse of just how extensive the Turkish’s president cleansing of secular society will be, when the state-run Anadolu news agency reported that Turkey’s ministry of education has sacked 15,200 personnel for alleged involvement with a group the government claims is responsible for Friday’s failed coup.

Even more shocking, Anadolu reports that Turkey’s Board of Higher Education has requested the resignations of all 1,577 university deans, effectively dismissing them.  Of the deans dismissed, 1,176 worked in public universities and 401 in private institutions.

The National Education Ministry said Tuesday that the staff are in both urban and rural establishments, and that an investigation has been launched against them.

It didn’t stop there, and as Turkey’s Ysafak reports, the country has just canceled the license of some 21,000 private school teachers.

And just like that, In one move, Turkey’s authoritarian ruler just eliminated both the middle and higher educational system of the country.

While there is still no response from the distinguished western “democratic” powers, the market has already opined on how this ends, and as we showed moments ago, its conclusion is simple: badly.

Why is Erdogan doing all of this? Simple: he is doing everything in his power to undo the last traces of secularism in the Turkish state and to propel himself to the role of undisputed, “democratically elected” despot, without any internal opposition.

Somewhere, Mustafa Kemal Ataturk is spinning in his grace.




Then  at 7 pm Turkish time (12 noon our time: a massive explosion reported in Ankara:

(courtesy zero hedge)

Massive Explosion Reported In Turkey’s Capital Ankara

Moments ago Turkish assets took another leg lower following local press reports of a massive explosion rocking Turkey’s capital Ankara. According to initial unconfirmed reports, the explosion may have taken place at a local TV station.

View image on TwitterView image on Twitter

 Black clouds imerge as a huge explosion rocked the city of

Çok feci dumanlar yükseliyor #Ankara da neler oluyor ate?ler buradan gözüküyor!pic.twitter.com/WVkFEOseOC

— Beneyna K. (@beneyna_) July 19, 2016

The Turkish currency, already weaker on the day, has tumbled more, and is approaching post-coup lows.

Developing story






Venezuela opens up its border with Columbia and watch the result as citizens flock over to get the necessary items to survive:

(courtesy zero hedge)

This Is What Hyperinflationary Collapse Looks Like

There was some good news for citizens of Venezuela yesterday, when the government – having mostly given up on trying to provide its citizens’ with even the most basic food needs – announced it has opened its border with Colombia for the second time this month to allow people to buy food and medicine unavailable at home in their country’s collapsing economy. Colombia’s government said 44,000 people crossed on Saturday to buy food, medicine and cleaning products and said it expected that number to almost double on Sunday.

Bus terminals were packed and hotels filled to capacity in the border town of San Antonio, with many traveling hundreds of miles to shop.

The result of the scramble to obtain much needed staples is shown in the photos below.

Venezuelan citizens waiting to cross into Colombia to buy supplies

More than 100,000 Venezuelans crossed into Colombia over the weekend in
search for food and medicine.

Venezuelan women buy food staples at a local shop in Cucuta, Colombia

Tebie Gonzalez holds a wad of Bolivar bills as she exchanges what remains of 
her  and her husband’s savings.

Crowds of people flooded the bridge that links to the Colombian city of Cucuta 
to cross the border on foot

Activists handed out anti-government pamphlets, looking to galvanize the 
frustration that has characterized food riots

The border was heavily packed by Venezuelan troops, the crowds were mostly 
orderly amin and atmosphere of tense excitement

According to Reuters, last week, over 35,000 people crossed over for the first time since the governor of Venezuela’s state of Tachira, opened the border.  Socialist President Nicolas Maduro shut the border last year in an effort to crack down on smuggling of subsidised products.

Venezuela’s product shortages have since worsened, creating further incentives to buy goods in Colombia and bring them back. Venezuelans routinely spend hours in lines at home seeking items ranging from corn flour to cancer medication to car parts. Shoppers complain of violence in lines, and looting is on the rise.

* * *

That was the good news. The bad news for ordinary Venezuelans is that unless they can permanently move to Colombia or any other country, their plight is only going to get worse.  The reason is that according to the IMF, Venezuela’s consumer-price inflation is forecast to hit 480% this year and top 1,642% in 2017, according to the International Monetary Fund.  At that point it will proceed into suborbital hyperinflationary territory, hitting 2,880% in 2018 before “plateauing” at 3,500% in 2019.

While it has been speculated that the insolvent nation will soon have to ask the IMF for a bailout, Venezuela, whose government severed ties with the IMF nearly a decade ago under its former socialist autocratic leader, Hugo Chávez,  hasn’t tried to restore relations with the world’s emergency lender. Cited by the WSJ,  IMF spokesman Gerry Rice said that “there has been no change in Venezuela’s relationship with the fund. The Venezuelan authorities have not contacted us.”

China, seeking to take advantage of poor political relations that many African and Latin American nations have with the U.S. and Western-based institutions like the IMF, has been giving Venezuela and other commodity exporters cheap loans to help tide them through the commodity slump. Last year, the country supposedly secured $10 billion in cheap credit to help keep it afloat. The problem is that that loan was pledged by oil at much higher prices, which means that now Venezuela has to pump overtime just to meet its obligations to Beijing, as we explained previously.

While those loans may keep the state budget limping along, including massive costly subsidy programs, and strengthen political ties to Beijing, they don’t require the deep policy overhauls many economists say are vital to repairing the broken economy.

Meanwhile, Venezuela’s problem is simple: a lack of credible currency as the value of the Bolivar has imploded as a result of the policies of Maduro, leading to a collapse in the economy.

“A lack of hard currency has led to scarcity of intermediate goods and to widespread shortages of essential goods—including food—exacting a tragic toll.” –IMF Western Hemisphere chief, Alejandro Werner, “Latin America and the Caribbean in 2016: Adjusting to a Harsher Reality”

The bottom line is that even the IMF appears to have given up: “we have dire forecasts…predicated on very limited information that we have.” Gian Maria Milesi-Ferretti, Deputy Director, Research Department, IMF, at the October 2015 World Economic Outlook press conference.

So for those who are curious what modern-day, runaway hyperinflation looks like, here is the IMF’s forecast of Venezuela’s inflation over the next three years. We can’t help but chuckle that even in this dire case the IMF chooses to put a positive spin on events, and predicts that instead of exponential inflationary growth, somehow the country’s CPI will “taper” by 2019. Good luck.




Oil slides into the 44 dollar column after unexpected gasoline buildup

(courtesy zero hedge)


Oil Slides After Unexpected Gasoline Inventory Build

Following last week’s surprise distillates build (and lower than expected crude draw) API reported inventories largely in line with expectations (-2.3mm vs -2mm exp. This nevertheless managed to pump and dump crude futures before drifting slightly lower as Gasoline showed a bigger than expected build (+800k vs -500k exp.).



  • Crude -2.3mm (-2mm exp)
  • Cushing -84k (-100k exp)
  • Gasoline +805k (-500k exp)
  • Distillates -484k

This is the 9th weekly daw in crude in a row… and Gasoline showed a major build vs expected draw…



The reaction was chaos in crude with stops ripped lower and higher before drifting lower..


Charts: Bloomberg



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




USA/CAN 1.3014 UP .0058

Early THIS TUESDAY morning in Europe, the Euro FELL by 37 basis points, trading now JUST above the important 1.08 level RISING to 1.1054; Europe is still reacting to Gr Britain 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 DOWN 1-.73 POINTS OR 0.35%   / Hang Sang CLOSED DOWN 6.97 PTS OR 0.23% /AUSTRALIA IS LOWER BY 25%/ EUROPEAN BOURSES ARE ALL IN THE RED   as they start their morning

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

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

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

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

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

The NIKKEI: this TUESDAY morning: closed UP 225.46 OR 1.37% 

Trading from Europe and Asia:

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 161.89 OR 0.57%  ,Shanghai CLOSED DOWN 6.97 OR 0.23%   / Australia BOURSE IN THE RED: /Nikkei (Japan) CLOSED UP 225.46 OR 1.37%/India’s Sensex IN THE GREEN  

Gold very early morning trading: $1331.60


Early TUESDAY morning USA 10 year bond yield: 1.550% !!! DOWN 2 in basis points from MONDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES to 2.269 DOWN 1 in basis points from MONDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early TUESDAY morning: 96.93 UP 37 CENTS from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING



And now your closing TUESDAY NUMBERS


Portuguese 10 year bond yield:  3.09% DOWN 4 in basis points from MONDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.225% DOWN 1/10  in   basis points from MONDAY

SPANISH 10 YR BOND YIELD: 1.19%  DOWN 4 IN basis points from MONDAY( this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.24 DOWN 1 IN basis points from MONDAY (again totally nuts/)

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





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


Euro/USA 1.1014 DOWN .0054 (Euro =DOWN 54 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 106.06 DOWN 0.119(Yen DOWN 12 basis points/HELICOPTER MONEY )


USA/Canada 1.3025-UP 0.0068 (Canadian dollar UP 9 basis points AS OIL FELL (WTI AT $45.43). Canada keeps rate at 0.5% and does not cut!


This afternoon, the Euro was DOWN by 54 basis points to trade at 1.1014

The Yen ROSE to 106.06 for a GAIN of 12 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY TO COMMENCE


The Canadian dollar FELL by 68 basis points to 1.3025, WITH WTI OIL AT:  $44.63


The USA/Yuan closed at 6.6940

the 10 yr Japanese bond yield closed at -.225% DOWN 1/10  IN BASIS  points in yield/

Your closing 10 yr USA bond yield: DOWN 3 IN basis points from MONDAY at 1.554% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.271 DOWN 5  in basis points on the day 


Your closing USA dollar index, 97.07 UP 50 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 TUESDAY

London:  CLOSED UP 1.95 OR 0.03%
German Dax :CLOSED DOWN  81.89 OR  0.81%
Paris Cac  CLOSED DOWN 27.61  OR 0.63%
Spain IBEX CLOSED DOWN 39.20 OR 0.46%
Italian MIB: CLOSED UP 88.96 OR 0.53%

The Dow was UP 25.96  points or 0.14%

NASDAQ down 19.41 points or 0.38%
WTI Oil price; 44.62 at 4:30 pm;

Brent Oil: 46.69




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: 46.69

USA 10 YR BOND YIELD: 1.552% 

USA DOLLAR INDEX: 97.03 up 47 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.31028 down .0158 or 158 basis pts.

German 10 yr bond yield at 5 pm: -.030%


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


Last-Minute Algo-Driven VIX-Crash Lifts Dow Green For 8th Straight Day

It was a cliffhanger today… 8 straight up days for the Dow… or a DOWN DAY!!!


The answer… simple – a VIX-crushing algo did the job…


Smashing VIX to its lowest close since Jul 30, 2015…down for the 6th straight day…




As Nasdaq ave back most of yesterday’s M&A exuberance….


Some context for what is happening… off the Brexit lows…


But gold and Bonds are still leading the way post-Brexit…


Treasury yields fell on the day with the long-end outperforming (more curve flattening)…


The USD index rose notably today (and JPY strengthened)… (biggest jump in DXY since Brexit)


Pushing DXY above 97.00 and its 200-day moving-average – back to 4-month highs…


Commodities were very mixed with Crude tumbling in USD strength, gold ignoring it and copper loving it…


Pushing crude to 2-month lows…


It’s probably nothing…


Definitely nothing… (thanks to ECB corporate bond buying)


Also, probably nothing…


Charts: Bloomberg


The real data in housing suggests that housing starts dropped .2% year over year

(courtesy zero hedge)

Housing Starts Decline Year-Over-Year Amid Downward Revisions

Thanks to generous downward revisions, June’s Housing Starts ‘jump’ of 4.8% MoM suggests everything is awesome. However, year-over-year Starts dropped 0.2%, the second annual drop in 3 months. Both single- and multi-family starts rose MoM but rental unit starts fell notably YoY (-22% versus a 13% rise for single-family). Overall permits rose 1.5% MoM (slightly better than expected) but multi-family permits rose more than single-family permits (+2.5% MoM vs +1.0% MoM) as Rental Nation USA continues to gather pace.

Both single- and multi-family Starts rose MoM…

But, the growth in housing starts is slowing…

As Permits bounce back with single-family nearing cycle highs…

Rental Nation USA continues but one has to wonder if everything is so awesome, why are builders slowing their starts year-over-year? Especially amid constant whining about supply from the realtors?



The real state of the uSA economy:
(courtesy David Stockman/ContraCorner)


by  • July 18, 2016

Another one of the Hedge Fund high rollers, Marc Lasry of Avenue Capital, recently confessed on bubblevision that 2200 on the S&P 500 doesn’t make sense to him, either.

But his reasoning went right to the crux of the bubble implosion lurking just ahead. According to Lasry, the market may be discounting a “stronger-than-expected” economic rebound and thus only appears to be ahead of itself:

The U.S. stock market, making a string of recent record highs, “doesn’t make much sense,” distressed debt specialist Marc Lasry told CNBC Monday, sharing the view of fellow billionaire investment titan Larry Fink.

 “Everyone is a bit surprised,” said Lasry, co-founder of Avenue Capital, which has $11.3 billion of assets under management. “But the market is telling us what’s going to happen next year [or] the next two years.”

While questioning the advance in stocks, Lasry said on “Squawk Box” the market may be signaling a stronger-than-expected U.S. economy, with a growth rate somewhere in the 2 to 3 percent range….”

Ah, the hoary myth of a market that processes information, discovers price and discounts the future. Apparently, no one told Lasry what the bereavers for free markets and honest money had long ago confessed. To wit, “Mr. Market, we hardly knew ya”.

So the singular change in relevant information from the post-Brexit low has nothing to do with the outlook for economic growth or corporate profits; it’s just another excited rave in the casino after the latest batch of monetary cocaine—-helicopter money—-was passed all around.

But these revelers are going to need something stronger than the hope for “helicopter money” to avoid annihilation when the long-running central bank con job finally collapses. Indeed, that denouement lies directly ahead because helicopter money is a bridge too far.

As we demonstrated last week, there is really nothing to it except more of the same aggressive monetization of the public debt that has been going on for nearly two decades. That is, whether the central banks buy public debt from the inventories of the 23 prime dealers and other market speculators or directly from the US treasury makes no technical difference whatsoever.

The end state of “something for nothing” finance is the same in both cases. In fact, “helicopter money” is just a desperate scam emanating from the world’s tiny fraternity of central bankers who have walked the financial system to the brink, and are now trying to con the casino into believing they have one more magic rabbit to pull out of the hat.

They don’t. That’s because it takes two branches of the state to tango in the game of helicopter money. The unelected monetary central planners can run the digital printing presses at whim, and continuously “surprise” and gratify the casino gamblers with another unexpected batch of the monetary drugs.

That has been exactly the pattern of multiple rounds of QE and the unending invention of excuses to prolong ZIRP into its 90th month. The resulting rises in the stock averages, of course, were the result of fresh liquidity injections and the associated monetary high, not the discounting of new information about economics and profits.

By contrast, helicopter money requires the peoples’ elected representatives to play. That is, the Congress and White House must generate large incremental expansions of the fiscal deficit—so that the central bankers can buy it directly from the US treasury’s shelf, and then credit the government’s Fed accounts with credits conjured from thin air.

To be sure, the cynics would say—–no problem! When have politicians ever turned down an opportunity to borrow and spend themselves silly, and to than be applauded, not chastised, for the effort?

But that assumes we still have a functioning government and that today’s politicians have been 100% cured of their atavistic fears of the public debt.

Alas, what is going to cause helicopter money to be a giant dud—-at least in the US——is that neither of these conditions are extant.

Regardless of whether the November winner is Hillary or the Donald, there is one thing certain. There will be no functioning government come 2017. Washington will be the site of a political brawl of deafening and paralyzing aspect—–like none in modern US history, or ever.

At the same time, the existing budget deficit is already reversing, and will end the current year at more than $600 billion. That’s baked into the cake already based on the recent sharp slowdown in revenue collections, and means that the FY 2016 deficit will be one-third higher than last year’s $450 billion.

Moreover, when the new Congress convenes next February the forward budget projections will make a scary truth suddenly undeniable. That is, the nation is swiftly heading back toward trillion dollar annual deficits under existing policy and even before the impact of a serious recessionary decline.

The reality of rapidly swelling deficits even before enactment of a massive helicopter money fiscal stimulus program will scare the wits out of conservative politicians, and much of the electorate, too.  And the prospect that the resulting huge issuance of treasury bonds will be purchased directly by the Fed will only compound the fright.

What fools like Bernanke haven’t reckoned with is that sheer common sense has not yet been extirpated from the land. In fact, outside of the groupthink of few dozen Keynesian academics and central bankers, the very idea of helicopter money strikes most sensible people as preposterous, offensive and scary.

Even if Wall Street talks it up, there will be massive, heated, extended and paralyzing debate in Congress and the White House about it for months on end. There is virtually no chance that anything which even remotely resembles the Bernanke version of helicopter money could be enacted into law and become effective before CY 2018.

Will the boys and girls still in the casino after the upcoming election gong show patiently wait for their next fix from a beltway governance process that is in sheer pandemonium and indefinitely paralyzed?

Than again, why would anyone think the stock market is actually discounting an economic recovery. Reported LTM earnings of the S&P 500 are $87 per share, and even if there is no further deterioration from this quarter’s 5% decline during the balance of the year, CY 2016 earnings will come in at barely $89 per share.

That means the market closed today at 24X the S&P 500’s prospective earnings for 2016. So what, therefore, if GDP grows at 2-3% next year?

Even if that were to happen, and notwithstanding the self-evident headwinds in China, Japan, the eurozone, the middle east, the faltering oil market and countless more, how does that cause an earnings rebound that is remotely close to the “17x/$130” being suddenly ballyhooed on the Wall Street as the reason for the helicopter money high now underway?

After all, that’s a 30% gain from even the ex-items “operating earnings” version of profits recorded for the last 12 months of $100 per share.

Nominal GDP is growing at 3.5% annually at best—-even in the absence of an eventual recessionary slump. In fact, since CY 2012 the nominal GDP growth rate has averaged just 3.3%.

So baring some massive breakout in profit margins, there is no way for next year’s GAAP earnings to hit even $95 per share, which is still 23X.

Yet that would still be discounting what would be a 102 month old business expansion by year-end 2017. Even that unlikely outcome, given that the business cycle has now been outlawed, would absolutely end in recession and a cyclical collapse in earnings not long thereafter.

But here’s the thing. There is no “discounting” involved in the madness currently swirling in the stock market because there is not a remote chance of a margin break-out that could possibly compensate for the tepid growth of GDP and sales.

To wit, even if S&P 500 earnings hit the current consensus for Q2, operating margins will end up at the tippy top of the historic trend. According to Howard Silverblatt’s latest estimates, the Q2 operating margin will come in at 9.9%.

But that’s the second highest quarterly margin in the last decade, 15% higher than the 8.6% average since 2006, and 30% higher than the long-run average.

In short, the market is not trading on a rebound in GDP, revenue growth or a breakout of already elevated profit margins. It’s just high on one more dose of monetary cocaine that in short order will prove to have been not even that.




It is getting real bad in the states.  another police officer shot and he is in critical condition

(courtesy zero hedge)

Police Officer Shot In Kansas City

Another day, another police officer shot. Moments ago KSHB reoprted that A Kansas City police officer has been shot, according to the police chief. Chief Terry Zeigler tweeted that an officer had been shot at 22nd and Haskell.

We have an officer shot at 22nd & Haskell. Start prayers, unknown condition.

According to police, officers responded to a shots fired call at about 1:30 p.m. at Second and Edgerton. One person was taken into custody. As an officer pursued more suspects, more shots were fired, and the officer was hit. The officer was taken to a hospital and is in critical condition.

Police continue to search for the other suspects.

Wait until they see the gold/silver manipulation as Deutsche bank is providing the data to our class actions lawyers Berger, Montague
(courtesy Bloomberg)

Fed Bars Ex-UBS Trader Gardiner Over Currency Manipulation

Tom Schoenberg Tschoenberg22
David McLaughlin damclaugh
July 19, 2016 — 3:30 PM EDTUpdated on July 19, 2016 — 4:12 PM EDT
Why the Fed Banned Former UBS Trader Matthew Gardiner

The U.S. Federal Reserve has given a lifetime ban from the banking industry to former UBS Group AG trader Matthew Gardiner saying he rigged currency benchmarks.

Gardiner used electronic chat rooms to facilitate the manipulation of foreign exchange benchmarks and to disclose confidential customer information to traders at other banks, the Fed said in astatement Tuesday.

Gardiner has been helping U.S. prosecutors who are trying to build currency-rigging cases against individuals, two people familiar with the matter told Bloomberg News in April. He hasn’t been publicly charged and it isn’t clear if he has been granted immunity for cooperation. A lawyer for Gardiner didn’t immediately respond to an e-mail seeking comment.

Bloomberg reported in April that U.S. officials were on track to charge individuals over currency-rate manipulation as soon as this summer.

Gardiner participated in The Cartel instant-messaging group, which was at the heart ofguilty pleasthe U.S. government wrung from five global banks last year.

Announcing the bank convictions in May 2015, the U.S. said traders working for the institutions — UBS, JPMorgan Chase & Co., Citigroup Inc., Royal Bank of Scotland Group Plc and Barclays Plc — had conspired to fix currency benchmarks using the instant-messaging group, which participants also referred to as The Mafia.

The Fed brought enforcement actions in 2015 against UBS and Barclays Plc, where Gardiner also previously worked, over currency manipulation. Those actions resulted in UBS and Barclays paying a total of $684 million in penalties, the Fed said.

Before it’s here, it’s on the Bloomberg Terminal.LEARN MORE
That is all for today
I will see you tomorrow night

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