July 25/Another increase in the amount of gold oz standing for July: 20.189 tonnes/another raid by the bankers as silver OI is still extremely high/For gold the OI contracts below 600,000 to 597,411 and that would be bullish !!/Japan to unleash another 6 trillion yen QE: markets were dissatisfied as they wanted more/Portugal now enters the arena with banking problems /Surprisingly for the 3rd month in a row, England imported 68 tonnes of gold..no wonder they are scrambling!!China’s high grading of gold deposits to now haunting them/Caterpillar sales decline for 43rd consecutive month/

Gold:1319.30 down $3.80

Silver 19.62  down 4 cents

In the access market 5:15 pm

Gold: 1316.00 (THE CROOKS DROVE IT DONE IN THE ACCESS MARKET)

Silver: 19.58

.

For the July gold contract month,  we had ANOTHER HUGE 54 notices served upon for 5400 ounces. The total number of notices filed so far for delivery:  6445 for 644500 oz or 20.046 tonnes

In silver we had 20 notices served upon for 100,000 oz.  The total number of notices filed so far this month for delivery:  2279 for 11,395,000 oz

 

Friday night,   I took a look at the daily bulletin which is an estimated OI and then I knew the reason for the raid that was forthcoming today!

  1. the high open interest for silver (ESTIMATED at 222,000)
  2. the front July contract month in gold saw a huge gain in an amount standing. (20.189 TONNES). Now we have over 20 tonnes standing in this a non active month.It sure looks like August will be exciting.

We are now entering options expiry month for gold and silver:

i)The comex options expiry on Tuesday July 26.

ii)The OTC options in London expire Friday at noon July 29.

So expect downward drafts in gold and silver trading until both of these contracts expire.

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 311.698 tonnes for a gain of 9  tonnes over that period

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest FELL BY ONLY 813 contracts DOWN to 220,433, AND CLOSE TO AN NEW ALL TIME RECORD EVEN THOUGH THE  PRICE OF SILVER FELL CONSIDERABLY BY 12 CENTS IN FRIDAY’S TRADING.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.102 BILLION TO BE EXACT or 157% of annual global silver production (ex Russia &ex China).

In silver we had 20 notices served upon for 100,000 oz.

In gold, the total comex gold FELL BY A CONSIDERABLE 10,042 contracts as the price of gold FELL in price FRIDAY to the tune of $7.40. The total gold OI stands at 597,411 contracts.The higher contango price seems to be having an effect as holders prefer to liquidate rather than roll.  The higher contango makes no sense with libor at extreme low levels and thus the spread between months is higher than it ought to be.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

we had A HUGE WITHDRAWAL  in gold inventory TO THE TUNE OF 4.45 TONNES. /

Total gold inventory rest tonight at: 958.69 tonnes

SLV

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 FELL by 813 contracts DOWN to 220,443, as the price of silver FELL BY 12 cents with FRIDAY’S trading. The gold open interest FELL by A WHOPPING  10,042 contracts DOWN to 597,411 as  the price of gold FELL by $7.40  ON FRIDAY. As is their custom the open interest starts to obliterate as we approach the active contract month.

(report Harvey).

 

2 a) Gold/silver trading overnight Europe, Goldcore

(Mark OByrne/zerohedge

3. ASIAN AFFAIRS

i)Late  SUNDAY night/MONDAY morning: Shanghai closed up 3.02 POINTS OR 0.10%/ /Hang Sang closed up 29.17 OR 0.13%. The Nikkei closed UP 6.96 POINTS OR 0.04% Australia’s all ordinaires  CLOSED up 0.64% Chinese yuan (ONSHORE) closed UP at 6.685 /Oil fell to 43.94 dollars per barrel for WTI and 45.45 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.6887 yuan to the dollar vs 6.6785 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS CONSIDERABLY AS CHINA TRIES TO STOP MORE USA DOLLARS LEAVING THEIR SHORES BUT CANNOT. 

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

i)Japan is set to unleash another 188 billion USA equiv. stimulus.  They may have a problem in that 8 bank governors are against this rise in QE!!

 

( zero hedge)

 

ii)This afternoon:

Actually the rumours were true: the Japanese government is to fiscally double the amount of spending at 6 trillion yen. The markets shrugged it off and the yen reversed course and proceeded northbound into the 105 column: they were visibly upset that it wasn’t more stimulation

( zero hedge)

b) REPORT ON CHINA

The number one risk to China is a revolt by its people..so what happened to one million recently fired Chinese coal and steel workers:they became  uber like drivers…over 1 million Chinese have been hired to drive people and thus starts a new industry over there:

( zero hedge)

4 EUROPEAN AFFAIRS

i)OH this is going to be good for France as she will now embrace or ISIS attacks on her soil:

( zero hedge)

ii) OK! this is a biggy.  We have been talking about Italy having banking problem but now Italy must move over as Portugal has problems.  Their original “good bank” Novo Banco which took over assets from the recently departed; Banco de Espiroto is now in trouble as it cannot raise any money to augment its tier one assets.  Not only that but nobody wants to come to the table by buy this crap.  We also have Portugal’s largest bank: Caixa de Depositos in trouble as it is badly in need of cash.  They only way out is a bailout which is outlawed by Germany.

So we now have two countries with huge banking problems.

( zerohedge)

iii)When will this stop!! Syrian refugee kills one or injures two in Southern Germany City of Reutlingen: his weapon of choice a machete!

( zero hedge)

iv)This will be the start of hyperinflation as the world begins to understand that the financial system has been totally ruined:  the huge Dutch bank ABN AMBRO WILL CHARGE NEGATIVE INTEREST ON CUSTOMER DEPOSITS)

( zero hedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6.GLOBAL ISSUES

7.OIL ISSUES

1. the huge amount of oil that China bought and now wishes to export copious amounts of gasoline

2. the low crack spread

3. the huge rise in rigs put back into production in the USA

oil back into the 43 dollar column:

( zero hedge)

ii)Cdn dollar hits a 4 month low as oil sinks.  The Cdn dollar breaks above 1.32 and now trading at 1.3228.  Thus Cdn gold is rising! and is not suffering with the same force as the USA price of gold.

( zero hedge)

8.EMERGING MARKETS

none today

9.PHYSICAL STORIES

i)For many years, China has been high grading gold deposits rather than mixing lower grade stuff with the high grade to mine economically.  Now this is now haunting China.  They must boost the price of gold to mine the lower grade stuff economically

( Stephen Leeb/GATA Kingworldnews)

ii)It is truly amazing that time and time again, rising prices in gold fail to induce Indian citizens to sell their gold.  It is just in the culture!

( Ghosal/Times of India/GATA).

iiiFor the past several years, the UK has been an exporter of gold to Switzerland, Hong Kong and China.  Strangely for the third month in a row Switzerland EXPORTED GOLD INTO THE UK TO THE TUNE OF  65 TONNES.  LADIES AND GENTLEMEN: THE UK IS OUT OF GOLD.  THEY WILL DEFAULT IN SHORT ORDER.

( Lawrence Williams/Sharp’s Pixley)

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

i)This confirms what David Stockman has told us:  Q3 EPS expectations are now turning negative and thus 6 consecutive quarters of declining earnings.

( zero hedge)

ii)Bellwether stock Caterpillar declines again as sales continue to falter:This is a good indicator of how the globe’s economy is behaving!

( zero hedge)

iii)Even though the Dallas Fed mfg index rose from 118.3 to -1.8  (still contractionary), the gain was only in the hope category.  Wages tumbled!

( zero hedge)

iv)This ought to be good: USA subprime auto lender Skopos is to delay earnings to due “accounting matters”

( zero hedge)

Let us head over to the comex:

The total gold comex open interest  FELL TO AN OI level of 597,411 for a LOSS of 10,042 contracts AS  THE PRICE OF GOLD FELL BY $7.40 with respect to YESTERDAY’S TRADING We are now in the non active month of July. As I stated yesterday: “Somebody big is continually standing for the gold metal even though July is  generally a poor delivery month. The open interest for the front July contract stands at 100 for a LOSS of 274 contracts. We had 323 notices filed on yesterday, so we gained 43 contracts or an additional 4300 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 43,440 contracts down to 199,570 as this month continues its wind down until first day notice for the August contract, Friday,July 29/2016:less than  1 week a way.  The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was VERY GOOD at 318,500. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was VERY GOOD at 308,725 contracts.The comex is not in backwardation.
Today, we had a huge 54 notices filed for  5400 oz in gold
And now for the wild silver comex results. Total silver OI FELL by ONLY 813 contracts from 221,246 DOWN TO 221,246.  We are now at an all time record high for silver open interest set ON FRIDAY (221,246). The front active delivery month is July and here the OI fell BY 101 contracts down to 247. We had 125 notices served on FRIDAY so we GAINED 24 silver contracts or an additional 120,000 oz that will  stand for delivery. The next non active month of August saw it’s OI fell by 0 contracts down to 467. The next big active month is September and here the OI FELL by 1436 contracts DOWN to 18,488. The volume on the comex today (just comex) came in at 33,794 which is FAIR. The confirmed volume yesterday (comex + globex) was EXCELLENT at 49,566. Silver is not in backwardation. London is in backwardation for several months.
We had 20 notices filed for 100,000 oz. in silver JULY contract month
:INITIAL standings for JULY
July 25.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
 22,505.000 OZ
 SCOTIA
700 KILOBARS
Deposits to the Dealer Inventory in oz  NIL
Deposits to the Customer Inventory, in oz 
 16,075.000 OZ
SCOTIA
 500 KILOBARS
No of oz served (contracts) today
54 notices 
5400 oz
No of oz to be served (notices)
46 contracts
4600 oz
Total monthly oz gold served (contracts) so far this month
6445 contracts (644,500 oz)
(20.046 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month   829371.8 OZ
Today we had 0 dealer DEPOSITS
total dealer deposit:NIL   0z
Today we had  0 dealer withdrawals:
total dealer withdrawals:  nil oz
We had 1 customer deposit:
i) Into SCOTIA:  16,075.000 oz
500 KILOBARS
Total customer deposits: 16,075.000 oz
Today we had 1 customer withdrawal:
 i) Out of Scotia 22,505.000
700 kilobars
Total customer withdrawals 22,505.000  oz
Today we had 0 adjustment:
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 54 contracts of which 0 notices was stopped (received) by JPMorgan dealer and 54 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 (6445) x 100 oz  or 644,500 oz , to which we  add the difference between the open interest for the front month of JULY  (100 CONTRACTS) minus the number of notices served upon today (54) x 100 oz   x 100 oz per contract equals 649,100 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 (6445) x 100 oz  or ounces + {OI for the front month (XXXX) minus the number of  notices served upon today (54) x 100 oz which equals 649,100 oz standing in this non   active delivery month of JULY  (20.189 tonnes).
We  gained  4300 gold ounces that will stand for metal in this non active month of July.
SOMEBODY WAS IN URGENT NEED OF PHYSICAL GOLD TODAY.
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 +  20.034 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 = 51.155 tonnes still standing against 50.893 tonnes available.
 Total dealer inventor 1,636.227.922 tonnes or 50.893 tonnes
Total gold inventory (dealer and customer) =10,021,094.310 or 311.698 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 311.698 tonnes for a  gain of 9  tonnes over that period. 
 

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

To me, the only thing that makes sense is the fact that “kilobars” are entries or hypothecated gold sent to other jurisdictions so that they will not be short in their derivatives like in England.  This would be similar to the gold used by Jon Corzine. If this is the case, this would be the greatest fraud perpetrated on USA soil.

 

 
 end
GOOD ACTIVITY AGAIN INSIDE THE SILVER COMEX
And now for silver
 
JULY INITIAL standings
 July 25.2016
Silver
Ounces
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
 826,241.290 oz
Brinks, HSBC
JPM
Deposits to the Dealer Inventory
 nil
Deposits to the Customer Inventory
 292,327.952 oz
CNT
No of oz served today (contracts)
20 CONTRACTS 
(100,000 OZ)
No of oz to be served (notices)
227 contracts
1,135,000 oz)
Total monthly oz silver served (contracts) 2279 contracts (11,395,000 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  6,495,172.4 oz
today we had 0 deposit into the dealer account
total dealer deposit nil oz
we had 0 dealer withdrawal:
:
total dealer withdrawals:  NIL oz
we had 3 customer withdrawals:
i)Out of JPM:  200,005.700 oz
ii) Out of Brinks: 5823.200 oz
iii) Out of HSBC: 620,412.390 oz
Total customer withdrawals: 826,241.290 oz
We had 1 customer deposit:
i) Into CNT: 292,327.962 oz
total customer withdrawals:292.328.962. oz
 
 
 
 we had 0 adjustments
The total number of notices filed today for the JULY contract month is represented by 28 contracts for 140,000  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 (2279) x 5,000 oz  = 11,395,000 oz to which we add the difference between the open interest for the front month of JULY (247) and the number of notices served upon today (20) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JULY contract month:  2279(notices served so far)x 5000 oz +(247 OI for front month of JULY ) -number of notices served upon today (20)x 5000 oz  equals  12,410,000 oz  of silver standing for the JULY contract month.
We GAINED 24 contracts or 120,000 ADDITIONAL ounces will  stand in this active month of July.
 
Total dealer silver:  28.967 million (close to record low inventory  
Total number of dealer and customer silver:   154.841 million oz (close to a record low)
The total open interest on silver is NOW AT its all time high with the record of 221,246 being set July 22.2016.  The registered silver (dealer silver) is NOW NEAR  multi year lows as silver is being drawn out at both dealer and customer levels and heading to China and other destinations. The shear movement of silver into and out of the vaults signify that something is going on in silver.
END
And now the Gold inventory at the GLD
JULY 25/ A HUGE PAPER WITHDRAWAL OF 4.45 TONNES FROM THE GLD/INVENTORY RESTS AT 958.69 TONNES
July 22/ no change in gold inventory at the GLD/Inventory rests at 963.14 tonnes
July 21/ a large withdrawal of gold inventory to the tune of 2.08 tonnes/Inventory rests at 963.14 tonnes
July 20./no changes in gold inventory at the GLD/Inventory rests at 965.22 tonese
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 6/WHAT A FRAUD!! A MASSIVE 28.53 TONNES OF PAPER GOLD ADDED INTO THE GLD
July 5/no change in inventory/rests tonight at 982.44
July 1/a huge change in the gold inventory/ a deposit of 3.86 tonnes/rests tonight at 953.91 tonnes
JUNE 30/no change in gold inventory /inventory rests tonight at 950.05 tonnes
June 29/ a good sized deposit of 2.67 tonnes/inventory rests at 950.05 tonnes
June 28/ a huge deposit of 13.067 tonnes into inventory/new inventory rests so far at 947.38 tonnes.  This was a paper addition
June 27/a huge deposit of 18.415 tonnes into the GLD inventory/the new inventory rests at 934.313 tonnes.  The addition was a paper addition and not physical
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
July 25 / Inventory rests tonight at 958.69  tonnes

end

Now the SLV Inventory
JULY 25/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 348.580 MILLION OZ
July 22/we had no change in silver inventory at the SLV.Inventory rests at 348.580 million oz/
July 21/no change in silver inventory at the SLV/Inventory rests at 348.580 million oz
July 20/no change in silver inventory at the SLV/Inventory rests at 348.580 million oz
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 6/AND ANOTHER FRAUD!! A MASSIVE 7.909 MILLION OZ ADDED INTO THE SLV/INVENTORY RESTS AT 341.453 MILLION OZ
july 5/no change in silver inventory/inventory rests at 333.554 milllion oz
july 1/no change in silver inventory/inventory rests at 333.544 million oz
JUNE 30/no changes in silver inventory/inventory rests at 333.544 million oz
June 29/ a small deposit of 760,000 oz/Inventory rests tonight at 333.544 million oz/
June 28/no change in silver inventory/rests tonight at 332.784 million oz
June 27/ a small deposit of 570,000 oz in the SLV inventory/Inventory rests at 332.784 million oz
.
July 25.2016: Inventory 348.580 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 5.6 percent to NAV usa funds and Negative 5.5% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 59.2%
Percentage of fund in silver:39.6%
cash .+1.2%( July 22/2016). 
2. Sprott silver fund (PSLV): Premium falls  to -0.46%!!!! NAV (July22/2016) 
3. Sprott gold fund (PHYS): premium to NAV  falls TO  0.05% to NAV  ( July 22/2016)
Note: Sprott silver trust back  into NEGATIVE territory at -0.46% /Sprott physical gold trust is back into positive territory at +0.05%/Central fund of Canada’s is still in jail.
 
 
 

end

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

Gold In Bull Market – “Every Reason For It To Continue” – Frisby In Money Week

Gold is in a bull market for a number of reasons including political risk and there is “every reason for it to continue” according to Dominic Frisby writing in the UK’s best selling financial publication Money Week.

Stockcharts.com via Money Week as seen in article

He points out that “one of the reasons to own gold is as a hedge against government.” He warns that increasing political risk, as seen with Brexit, is on the horizon with the U.S. election and the rise of Trump and Clinton and indeed elections in the two largest economies in the EU:

“We’ve got the US election too, in which neither candidate has you exactly salivating, then France and Germany – whose leaders are unpopular – have their own elections in 2017. “

Frisby kindly mentions GoldCore as a company to buy gold from and concludes

“So I shall be continuing with my current strategy of being long gold and bullish about its prospects. I shall sit back and enjoy the political fun in the comfortable knowledge that I am hedged. And if the markets punish me for my complacency (they usually do), well, so be it.

And if you’re interested in buying gold, Goldcore has all sorts of offers on at the moment, including VAT-free silver coins. A good place to start is with the MoneyWeek guide to buying gold.

At MoneyWeek, we’ve been tipping gold since 2001. In that time it went from $250 to $1,900 an ounce in 2011 (a 660% increase), hitting record highs each year since 2002.

Successful investing is about the diversification and management of risk. It makes sense to have a part of your wealth invested in gold.

You can read the full article here 

7RealRisksBanner

 

Gold and Silver Bullion – News and Prices

ABN Amro preparing for negative interest rates (Nltimes)

Newcrest Quarterly Gold Output Slides 11% to Miss Estimates (Bloomberg)

Gold futures log back-to-back weekly losses (Marketwatch)

Gold Falls as Stocks Advance and Traders See Higher U.S. Rates (Bloomberg)

Gold slips as stocks rise ahead of Fed, BoJ meetings (Reuters)

Here’s what Donald Trump would do to the price of gold (Marketwatch)

A Timeline For The Next Rally In Gold (TFMetalreport)

Vindicating GATA, academic study says central banks rig markets with gold lending (Gata)

Gold may have rallied high, but Indians unwilling to profit from it (Economictimes)

What to expect in the Fed statement this week (Marketwatch)

Gold Prices (LBMA AM)

25 July: USD 1,315.00 ., EUR 1,196.913 & GBP 1,000.321 per ounce
22 July: USD 1,323.20 ., EUR 1,199.216 & GBP 1,005.103 per ounce
21 July: USD 1,322.00 ., EUR 1,199.318 & GBP 1,000.754 per ounce
20 July: USD 1,325.60, EUR 1,204.308 & GBP 1,005.865 per ounce
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

Silver Prices (LBMA)

25 July: USD 19.41, EUR 17.66 & GBP 14.77 per ounce
22 July: USD 19.70, EUR 17.87 & GBP 15.03 per ounce
21 July: USD 19.34, EUR 17.55 & GBP 14.66 per ounce
20 July: USD 19.70, EUR 17.88 & GBP 14.95 per ounce
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


Recent Market Updates

– Is Gold Set To Hit $1,500 Per Ounce?
– Why Italy’s bank crisis could be a ‘ticking time bomb’
– Gold Holds Near Two-Week Low as Risk Appetite Rises on U.S. Data
– IMF Scraps Forecast for Global-Growth Pickup on Brexit Fallout
– 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

-END-

For many years, China has been high grading gold deposits rather than mixing lower grade stuff with the high grade to mine economically.  Now this is now haunting China.  They must boost the price of gold to mine the lower grade stuff economically

(courtesy Stephen Leeb/GATA Kingworldnews)

China mines gold uneconomically because it plans to boost the price, Leeb says

Section:

11:07a Sunday, July 24, 2016

Dear Friend of GATA and Gold:

Fund manager Stephen Leeb tells King World News that China is mining much low-grade gold uneconomically and he figures it’s because the Chinese government aims to drive the gold price way up. An excerpt from Leeb’s interview is posted at KWN here:

http://kingworldnews.com/china-is-planning-to-shock-the-world-by-pushing…

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

 

END

 

It is truly amazing that time and time again, rising prices in gold fail to induce Indian citizens to sell their gold.  It is just in the culture!

(courtesy Ghosal/Times of India/GATA).

Rising prices fail to induce Indians to sell their gold

Section:

Gold May Have Rallied High, But Indians Unwilling to Profit From It

By Sutanuka Ghosal
The Times of India, Mumbai
Monday, July 25, 2016

http://economictimes.indiatimes.com/markets/commodities/gold-may-have-ra…

KOLKATA, India — The rising price of gold since the beginning of 2016 has not enthused Indians to liquidate their household gold to create liquidity. Indians have reduced gold offerings to temples as well.

Gold has appreciated 25 percent from the beginning of this year on the back of geopolitical tensions, Britain’s decision to leave the European Union, and the growing expectations that interest rates, which are arguably the primary counterweight to gold, are set to stay lower for longer and could even fall further. …

“Despite prices surging ahead and a liquidity crisis being reported, we have not seen Indians selling household gold. Last year, when it touched Rs 29,000, we had seen people offloading old gold. But this year we are not seeing that trend though price is around Rs 31,500-31,800,” said Jitendra Jain of Mumbai-based scrap dealing firm Jugrag Kantilal.

The price rise has also affected India’s devotion quotient. Gold offerings to many temples have fallen in the recent months, said people associated with temple trusts. “Every day we are seeing a drop in gold offerings,” Sanjiv Patil, the chief executive of Mumbai’s Shree Siddhivinayak Ganapati Temple Trust, told The Times.

“Even silver offerings have declined after silver prices moved up. In the last one month the drop has been around 10-15 percent for both gold and silver.”

Currently, the temple holds 171 kilograms of gold and 3,000 kilograms of silver. It has already deposited 54 kilograms of gold under the government’s Gold Monetisation Scheme for five-to-seven-year tenure. “There will be two auctions of temple gold — one on August 20 and another after Diwali. Whatever gold will be left will be deposited in GMS,” Patil said.

At the Tirupati Balaji Temple gold offerings are steady. The spokesperson of the Tirumala Tirupati Devasthanam said: “We have not seen a decline in gold offering. It is steady as of now.”

 

end

 

Silver was a standout today

(courtesy zero hedge)

Silver Spikes Back Into Green After Overnight Slump

Silver was monkey-hammered lower as Japan and China opened overnight, bashed back below $19.50, and was accelerating lower ahead of the US Open when the fixing struck and suddenly Silver was panic-bid… on heavy volume… back into the green for the day…

 end
For the past several years, the UK has been an exporter of gold to Switzerland, Hong Kong and China.  Strangely for the third month in a row Switzerland EXPORTED GOLD INTO THE UK TO THE TUNE OF  65 TONNES.  LADIES AND GENTLEMEN: THE UK IS OUT OF GOLD.  THEY WILL DEFAULT IN SHORT ORDER.
(courtesy Lawrence Williams/Sharp’s Pixley)

LAWRIE WILLIAMS: June Swiss gold statistics highlight continuing reverse gold flows

JUL
25

With the latest stats now available from the Swiss Customs Administration, the hugely anomalous pattern of gold flows in and out of the nation we have noted before are continuing. Normal gold exporters have become importers, and vice versa – a pattern which we have put down to the combination of the big rise in the gold price this year (around US$250), coupled with a significant fall-off in Asian demand.

Switzerland, which hosts some of the world’s largest, and busiest, gold refineries, is major conduit for gold coming from producing nations and from those which vault much of the world’s gold for re-refining and export to the world’s major consumers, with its refineries specializing in refining and re-refining gold into the sizes most in demand in the gold consuming world. So, the gold movements in and out of this small Alpine nation are hugely significant in terms of monitoring global gold flows.

The anomalous import and export data are perhaps illustrated best in the bar charts for the June Swiss gold in and out statistics from Nick Laird’s goldchartsrus.com service, which are reproduced below:

The Swiss Gold Imports chart above highlights the hugely anomalous sources for gold coming into the country in June being the United Arab Emirates (UAE), Hong Kong and Thailand. The first two produce no gold domestically and the third only a tiny amount, but all three are major fabricators for gold jewellery and artefacts, and also represent important areas for gold investment. With Asian gold demand so far this year substantially down on last year’s record flows – into Hong Kong and on into mainland China in particular – it very much looks from these figures that fabricators in these countries/territories have been both running down inventories, surplus to the lower demand levels, and, at the same time taking profits given the big gold price rises so far this year, by returning some of this gold back to the Swiss refineries. This process will have been promoted by the Swiss refiners which, from anecdotal evidence, have been stretched to meet demand – bit as the exports chart below will show, the biggest part of this demand has also come form a non-traditional source – the UK!

So looking at the Swiss export statistics this anomalous gold flow back into the UK in particular, but also increasingly into the U.S. is hugely highlighted and is a pattern we have pointed out before, which is continuing. Here, the UK has been by far the largest export destination for Swiss gold so far this year – a pattern continuing in June. We have speculated that this is probably because of the massive demand for gold year-to-date from the big gold ETFs which vault their gold in London, and also suggests that perhaps the availability of non-attributed gold in these vaults was getting extremely tight. Thus gold has needed to be imported to meet this demand, whereby the prior pattern of import and export figures had always been that gold flowed from the UK to Switzerland, rather than vice versa as we are seeing at the moment.

We may get some confirmation of this when we see the Swiss gold statistics for July, due out around August 20th. Apart from a massive 28.8 tonne inflow into the SPDR Gold Shares ETF – the world’s largest which vaults most of its gold in London – over the July 4th U.S. holiday weekend, most movement in the ETF gold since then has been in terms of liquidations out, which would substantially reduce any strain that may, or may not, exist in terms of available non-attributable gold in the London vaults.

So the Swiss gold flows give an important snapshot of global gold supply/demand patterns, far in excess of the sizes of the flows themselves. The movement of gold into Hong Kong, mainland China and India, is always a good guide of the state of demand in those key consumers, while the reverse flows we have been seeing is yet another important indicator. With the gold price falling back over the past couple of weeks, and some indications that Asian demand may be beginning to pick up again, although only very mildly at the moment, we may start to see Swiss gold flows returning to a more normal pattern in the months ahead.

http://news.sharpspixley.com/article/lawrie-williams- june-swiss-gold-statistics-highlight-continuing-reverse- gold-flows/253151

 

end

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

 
 

:

1 Chinese yuan vs USA dollar/yuan SLIGHTLY DOWN to 6.6785 (  SMALL DEVALUATION SOUTHHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN WIDENS TO 6.6887) / Shanghai bourse  UP 3.02 OR 0.10%   / HANG SANG CLOSED UP 29.17 OR 0.13% 

2 Nikkei closed UP 6.096 OR .04% /USA: YEN RISES TO 106.24

3. Europe stocks opened ALL IN THE GREEN    /USA dollar index DOWN to 97.25/Euro UP to 1.0990

3b Japan 10 year bond yield: FALLS TO  -.240%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.24

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  43.93  and Brent: 46.29

3f Gold DOWN  /Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW

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 -.010%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate FALL to 8.04%/: 

3j Greek 10 year bond yield FALL to  : 7.85%   (YIELD CURVE NOW  FLAT TO INVERTED)

3k Gold at $1318.25/silver $19.50(6:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 5/100 in  roubles/dollar) 64.85-

3m oil into the 43 dollar handle for WTI and 45 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 106.24 DESTROYING WHATEVER IS LEFT OF OUR YEN CARRY TRADERS

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9850 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0830 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  -0.010%

/German 10+ year rate BASICALLY  negative%!!!

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

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

4. USA 10 year treasury bond at 1.582% early this morning. Thirty year rate  at 2.298% /POLICY ERROR)

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

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

HELICOPTER MONEY COMING!

US Futures Unchanged As Europe Stocks Rise; Strong Dollar Pressures Oil

There has been little notable market moves overnight, with the record rally in the S&P500 set to continue and European stocks climbing as German IFO business confidence proved more resilient than economists predicted in the month after Britain voted to leave the European Union, falling less than expected from 108.7 to 108.3, above the 107.5 consensus, with expectations printing at 102.2 above the 101.2 expected. Bonds fell with gold as the dollar gained before central bank meetings in the U.S. and Japan this week.

With Asia closing largely unchanged, and both the Nikkei and Shanghai Composite moving less than 0.1%, the Stoxx Europe 600 Index rose for the first time in three days after the business sentiment reading signaled Europe’s largest economy remained robust for now even after Brexit.  The U.S. dollar strengthened against most major counterparts, pushing gold to its first back-to-back weekly drop since May on expectations the Fed’s July statement may take a turn for the hawkish. Turkish markets rallied the most worldwide after the prime minister said the government planned to set up a fund to support the economy following the failed coup.

As the chart below shows, with the S&P500 set to open at new all time highs, if modestly so, the big rebound has been in global equity values, which have gained some $8 trillion since the February lows.

Meanwhile, the disconnect between global equities and crude continues. Oil traded near the lowest close in over 2 months, as U.S. producers increased drilling for 4th week even as mkt contends with abundant supplies and a record glut of gasoline.  WTI dipped below $44 with Breant trading below its 100 DMA.

U.S. oil drillers boosted number of active rigs by 14 to 371 for longest run of gains since August, Baker Hughes Inc. said Friday. U.S. crude production has halted slide, increasing for 2nd week through July 15: EIA. Hedge funds, other money managers added most bets in a year on lower WTI prices: CFTC. “Fears about the fragile state of the global economy as well as the oversupplied nature of the oil market are the reasons behind last week’s dismal performance” for prices, Tamas Varga, an analyst at PVM Oil Associates Ltd. in London, said in a report. “The global crude oil glut seems to have turned into a product glut.

In addition to the busiest week of Q2 earnings season, with 197 of the S&P 500 companies set to report, eyes will turn to central banks where the Fed will keep rates on hold this week with the chance of hinting at a September rate hike, economists predict the Bank of Japan’s most likely stimulus will be to increase in purchases of exchange-traded funds. The European Central Bank last week said it would be ready, willing and able to act if needed after studying more data on the impact of Brexit.

“Equity markets may hold up this week ahead of the BOJ and Fed meetings on hopes that these central banks may sound dovish,” Vasu Menon of Oversea-Chinese Banking in Singapore told Bloomberg. “The hope of future action from policy makers offers more support in the short term even though valuations may not be compelling”

“You haven’t seen markets fall off a cliff” in the weeks after Brexit, added Ben Kumar at Seven Investment Management. “You don’t have uncertain currency fluctuations, you don’t have uncertain monetary policy, you’re still getting clear messages from the ECB.”

The Stoxx 600 climbed 0.6 percent at 10:14 a.m. in London, with trading volumes 45 percent less than the 30-day average. Ryanair Holdings Plc rose 5.7 percent after maintaining its annual profit forecast. Ericsson AB climbed 4.5 percent after its chief executive officer stepped down. Julius Baer Group Ltd. rose 3.1 percent after adding new client money.

S&P 500 futures were unchanged. Yahoo! Inc. rose in premarket trading on news Verizon will announce plans to buy the company’s core assets for about $4.8 billion on Monday. Kimberly-Clark Corp., the consumer-products giant that owns Kleenex and Huggies, will report quarterly earnings before the open.

The Borsa Istanbul 100 Index added 2.8 percent after Turkish Prime Minister Binali Yildirim ruled out early elections and said the government plans a multi-billion dollar infrastructure fund to keep growth on track.

Market Snapshot

  • S&P 500 futures up less than 0.1% to 2168
  • Stoxx 600 up 0.7% to 343
  • FTSE 100 up 0.1% to 6739
  • DAX up 0.9% to 10242
  • German 10Yr yield up 2bps to -0.01%
  • Italian 10Yr yield up 2bps to 1.25%
  • Spanish 10Yr yield up less than 1bp to 1.12%
  • S&P GSCI Index down 0.2% to 348.3
  • MSCI Asia Pacific up 0.1% to 134
  • Nikkei 225 down less than 0.1% to 16620
  • Hang Seng up 0.1% to 21993
  • Shanghai Composite up less than 0.1% to 3016
  • S&P/ASX 200 up 0.6% to 5534
  • US 10-yr yield up 2bps to 1.59%
  • Dollar Index down 0.16% to 97.31
  • WTI Crude futures down 0.8% to $43.85
  • Brent Futures down 0.7% to $45.35
  • Gold spot down 0.5% to $1,316
  • Silver spot down 0.8% to $19.47

Top Global News

  • Verizon Said to Announce $4.8b Deal to Buy Yahoo Today: deal said to include real estate, exclude intellectual property
  • Clinton-Kaine Ticket Debuts With Rejection of Trump U.S. Vision in First Rally in Miami
  • Nintendo Plunges After Saying Pokemon Go’s Impact Limited: shares down after co. said that financial impact from worldwide hit Pokemon Go will be limited
  • German July Ifo Confidence Falls Less Than Expected After Brexit Vote: Ifo business climate index falls to 108.3 vs 108.7
  • LVMH Sells Donna Karan to G-III Apparel for $650m: DKNY to join Calvin Klein, Vince Camuto brands at G-III
  • Tesla, SolarCity Said to Be Close to Merger Agreement, Reuters says: cos. are in the final stages of carrying out due diligence and could agree on terms of a deal in “coming days”
  • Jaguar in Talks With Ford, BMW Over Battery Plant, Times Says: cos. held talks over building factory for electric-car batteries
  • Hershey Trust Reaches Tentative Deal to Reform Its Governance: scrutiny of trust grew last month after Mondelez deal spurned
  • GM Re-Evaluates Planned $1b Investment in India: Reuters
  • ‘Star Trek’ Lifts Off With Sales of $59.6m for Paramount: movie opened as the No. 1 film in North America this weekend

* * *

Looking at regional markets, we start in Asia where equity markets mostly took the impetus from last week’s 4th consecutive weekly gain in US stocks, although Chinese markets slightly lagged on weak earnings and debt woes. ASX 200 (+0.6%) and Nikkei 225 (+0.3%) traded modestly higher following another record close in the S&P 500 on Friday with JPY weakness also uplifting Japanese exporter sentiment. However, Nintendo shares severely underperformed and fell nearly 20% in early Japanese trade after the Co. dismissed Pokemon Go’s potential impact on its earnings. Elsewhere, China markets are mixed with the Shanghai Comp. (+0.24%) initially negative amid debt concerns and comments from Chinese Finance Minister Lou who vowed prudence in dealing with the issue, although the index then recovered following a firm liquidity injection, while the Hang Seng (-0.2%) was weighed following reports of several profit warnings including Citic, which saw a potential 50% decline in interim results. Finally, 10yr JGBs traded higher despite positive sentiment in Japan, with the BoJ in the market for over JPY 1.2trl of government debt.

Top Asian News

  • Kuroda Has Forecasters Convinced He’ll Add Stimulus This Week: 78% of economists forecast BOJ will expand program on July 29
  • Nintendo Plunges After Saying Pokemon Go’s Impact Is Limited: Shares slump as much as ~18%
  • China Bank to Transform $1.6 Billion of Bad Debt Into Securities: Agricultural Bank to sell securities backed by sour loans
  • Billionaire’s Selldown Adds to Puzzle on What’s Up at Minsheng: Pig-feed billionaire Liu Yonghao trimmed his stake
  • Singapore Says Current Monetary Policy Stance Is Appropriate: Headline inflation may turn positive later this year, MAS says

Equites trade in the green this morning albeit modestly so, following on from a relatively positive session in Asia amid increased appetite for risk. Fixed income has been hit this morning with bund futures down as much as 10 ticks so far, notable outperformance has been observed in the front end, with the yield curve steepening. The German IFO data came in better than expected this morning to much surprise, given that the survey was conducted post Brexit and as such expectations had positioned themselves for a slightly weaker figure. Other than that we have seen some interesting equity specific news with William Hill up 8.8% on the news that they may be acquired by 888 holdings and Rank Group in a joint venture.

Top European News

  • Philips Profit Beats Estimates as CEO Extends Cost Savings: CEO van Houten sees earnings improvement in 2H 2016
  • 888 Holdings, Rank Group Mulling Bid for Bookmaker William Hill: William Hill says it will listen to any proposal from bidders; street wrap here
  • Ericsson Ousts Vestberg as CEO After Turnaround Plans Stall: CFO Frykhammar to take over until replacement found; street wrap here
  • Ryanair Clings to Profit Target as It Navigates Brexit Turmoil: UK vote, terror wave pose ‘significant’ downside risks
  • Julius Baer Profit Advances as Wealthy Clients Trade More: clients are ‘back in the market’ after Brexit vote, CEO says

In FX, the German IFO was the only notable data release this morning, and in the wake of the Brexit vote, the market was anticipating some weakness in the numbers but were met with beats in expectation on all fronts. The EUR was unmoved on the release, but has edged higher against the USD since, though remains comfortably below 1.1000 as yet. GBP has also gained modestly against the greenback, resisting a move below 1.3100 to keep the EUR/GBP rate well contained in the mid .8300’s for now. USD/JPY attempted a return below 106.00 after rejecting 107.00 early on, but has found buyers here with a more positive FOMC and possible BoJ action eyed later in the week. CAD remains pressured alongside Oil prices, where front month WTI has moved under $44.00 again. 1.3200 a key level to watch for here, but decent offers seen ahead of this. AUD and NZD trade tight; downside momentum fading in both cases, despite the fresh calls for rate cuts in August — more so in NZ as alluded to in their impromptu economic review last week.

In commodities, heading into the North American cross, oil prices have seen muted price thus far with crude futures trending lower throughout much of the morning, in turn WTI has slipped below the USD 44.00 level. Elsewhere, gold has been pressured amid the positive risk sentiment, while copper prices were flat with the red metal failing any significant recovery from Friday’s slump.

Bulletin Headline Summary From RanSquawk and Bloomberg

  • Modest gains in European equities with the DAX further bolstered by firm post Brexit IFO survey data.
  • Major FX pairs trading in ranges amid a lack of tier 1 data to instigate significant price action.
  • The economic calendar is somewhat light today with highlights including the US Dallas Fed Manufacturing Index and a US 2-Yr Note Auction.

US Event Calendar

  • 9:45am July Dallas Fed Mfg Activity, est. -10.0 (prior -18.3)

DB’s Jim Reid concludes the overnight wrap

By the end of this week we might know a bit more about how the Italian bank problems will be resolved and also how close the Japanese are to helicopter money. We have the ECB stress test results on Friday (released at 9pm BST) and there’s some speculation that we’ll hear at this point (or perhaps before) as to how the authorities are planning to deal with Monte Paschi. However a more comprehensive package for the sector may have to wait until after the constitutional referendum held sometime between October and YE. There are also quite a few European banks reporting this week so plenty of news flow in financials over the next few days.

As for the stress test there are no pass or fail marks but the intention is that the outcomes of the results will be used as a crucial input into the Supervisory Review and Evaluation Process (SREP) in 2016. The tests are due to cover 51 banks and 70% of the EU banking sector, which is down from 123 banks in the 2014 tests – supposedly the smaller sample of banks is to ‘ensure greater comparability’ according to the EBA. The list does however include 5 Italian Banks, one of which is Monte Paschi. In terms of what to expect, the 2014 tests contained 12,000 data points and it’s expected that we should see a similar level of granularity in Friday’s report including capital positions, risk exposures and sovereign-debt holdings. The tests will also consist of two scenarios, that being baseline and adverse scenarios covering the three years through 2018 using given assumptions. With the pass/fail format scrapped and with no capital hurdles set, CET1 ratios will likely be the first point of contact for a quick judgment on how the results look.

The other big event this week is of course the BoJ meeting outcome on Friday morning. Our Japan economists expect a cut in the interest rate on its policy-rate balance from -10bps to -20bps and an increase in its purchasing of EFT’s and J-REITSs (to an annual rate of ¥6tn and ¥180bn, respectively). They do however see little chance of an increase in JGB purchasing pace. Rather, they think that the bank could make its JGB purchasing operations more flexible (e.g. annual ¥70-90tn) and indicate no more acceleration of JGB purchasing. Our colleagues also expect BoJ Governor Kuroda to be questioned about helicopter money in his post meeting press conference, but expect him to deny that the bank is even considering the option and so disappointing those expecting an imminent launch of a radical helicopter money scheme. In terms of the wider market expectations, consensus is for the policy rate to be cut to -30bps and monetary base held at ¥80. According to Bloomberg, 32/41 economists surveyed expect some form of further monetary policy easing with an increase in ETF purchases seemingly looking the most likely.

It’ll also be important to keep a close eye on any further details this week around the scale of the much talked about fiscal stimulus package. Last week press reports suggested that this package could be worth over ¥20tn, although our Japan economists also argue that the government has an incentive to make its stimulus package appear as large as possible and that the government has demonstrated a range of methods over the last 25 years to inflate the value of supplementary budgets. We should get the contents of the second supplementary budget for FY16 sometime this week or next.

Staying with Japan, trade data released this morning showed exports as declining once again in June, marking the ninth straight month of negative export growth and helping to support the case for BoJ stimulus. Shipments fell -7.4% yoy, albeit less than the -11.3% expected while imports slid -18.8% leading to an increase in the trade surplus. The Yen was close to 0.5% weaker following the data, but has pared a bit of that move since. The Nikkei and Topix were also up half a percent or so post the data but are now back to flat, while bourses elsewhere are mixed. The Hang Seng (-0.07%) and Kospi (-0.09%) are just about in the red, while the Shanghai Comp (+0.45%) and ASX (+0.54%) are firmer.

One interesting story over the weekend on Brexit was an article in the Guardian newspaper suggesting that EU leaders had discussed the option of giving the UK an emergency break on migration (i.e. freedom of movement) for up to 7 years in return for allowing single market access to stay. How realistic this is for both sides is open to debate. Hardliners in Europe and the UK would oppose such a compromise but it shows that the range of outcomes still remains wide for Brexit. In reality there’s a good chance that negotiations will be of limited substance before the Dutch, French and German elections next year.
Elsewhere, the rest of the newsflow from the weekend has been centred on snippets coming out of the G20 meeting in China. The IMF’s Lagarde concluded that ‘there was a consensus around the table that more needs to be done to share the benefits of growth and economic openness broadly within and among countries’. The group also reiterated their determination ‘to use all policy tools – monetary, fiscal and structural – individually and collectively to achieve our goal of strong, sustainable, balanced and inclusive growth’. There was also generally upbeat commentary around Italy and its banking sector, with Padoan and Visco in particular downplaying the systematic risk and saying that talks with the EU are still progressing well.

Away from the macro, earnings season is well underway now with a quarter of the S&P 500 having reported. Based on our US equity strategy teams’ data, 58% of companies have beat on EPS (vs. 18% who have missed and the remainder more or less in line) with an impressive weighted average beat of 5%. 36% of companies have beaten on sales (vs. 31% who have missed) with a weighted average beat of 1.3%. The big banks beat on good trading, decent loan growth, more cost cutting and less litigation expenses, while last week’s tech reporters also beat nicely on EPS and revenue. So it’s been a decent start to earnings season. That said we’re still seeing the familiar last minute analyst earnings cuts prior to reporting, albeit not quite to the same extent seen in Q1. The average cut to EPS forecasts has been around -3% during the calendar quarter, which compares to -4.2% historically. The average cut in Q1 was c.-9% where 2/3 of firms beat on EPS, although the weighted average beat was a smaller 2.1% (vs. 3% average historically). We’re also already seeing cuts to Q3 EPS forecasts. Our colleagues note that bottom-up consensus is $30.50 now, down from $30.85 on the 1st of June.

Moving along and before we look at this week’s calendar, in a quick recap of markets on Friday. Some slightly better than expected earnings reports in the US (General Electric and American Airlines) helped equity markets across the pond edge up into the close with the S&P 500 eventually finishing +0.46% and so capping a fourth successive (+0.64%) weekly gain since Brexit. A bounce in the July flash manufacturing PMI (+1.6pts to 52.9; 51.5 expected) helped the US Dollar quietly close up half a percent or so too.

The European session was all about the PMI’s where the focus was unsurprisingly on the UK. The data came in even weaker than expected. The composite weakened 4.7pts to 47.7 after expectations had been for a 49.0 reading. That was the lowest print since April 2009. The services print tumbled 4.9pts to 47.4 (vs. 48.8 expected) while the manufacturing print fell 3pts to 49.1 (vs. 48.7 expected). Sterling (-0.94%) weakened as a result of the data, while 10y Gilt yields were nearly 4bps lower at 0.795%. The FTSE 100 (+0.46%) was firmer with that weakness for the Pound.

While that UK data was clearly weaker in the aftermath of Brexit, the wider Euro area data was actually fairly resilient. The Euro area composite was down just 0.2pts in July to 52.9 (vs. 52.5 expected) while composite prints for Germany and France actually rose to 55.3 (+0.9pts) and 50.0 (+0.4pts) respectively. Our European economists noted that this implies a 1.5pt average point decline for readings in the periphery so all eyes on those when we get the full data early next week. Core European equity markets finished flattish following the data, with the Stoxx 600 ending -0.07%. Credit was modestly weaker (in particular financials) and sovereign bond yields were a touch lower (10y Bunds 1.4bps lower at -0.033%).

Switching now to this week’s calendar. We’re kicking things off in Germany this morning where we’ll get the July IFO survey, before the UK then releases the July CBI total orders data. It’s quiet in the US this afternoon with the only data being the Dallas Fed’s manufacturing survey.

Away from the data we’re due to hear from the Fed’s Williams and Kaplan on Friday, while corporate earnings will be the other big highlight this week. 197 S&P 500 companies are due to report (or 38% of the index market cap) with the notable names including Apple (Tuesday), Verizon (Tuesday), Facebook (Wednesday), Coca-Cola (Wednesday), Alphabet (Thursday), Exxon Mobil (Friday) and Chevron (Friday). We’ll also get reports from 203 Stoxx 600 companies (or 39% of market cap) including Shell, AB-Inbev, BP and Astra Zeneca, as well as a number of the banks.

ASIA MARKETS

i)Late  SUNDAY night/MONDAY morning: Shanghai closed up 3.02 POINTS OR 0.10%/ /Hang Sang closed up 29.17 OR 0.13%. The Nikkei closed UP 6.96 POINTS OR 0.04% Australia’s all ordinaires  CLOSED up 0.64% Chinese yuan (ONSHORE) closed UP at 6.685 /Oil fell to 43.94 dollars per barrel for WTI and 45.45 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.6887 yuan to the dollar vs 6.6785 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE WIDENS CONSIDERABLY AS CHINA TRIES TO STOP MORE USA DOLLARS LEAVING THEIR SHORES BUT CANNOT. 

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

Japan is set to unleash another 188 billion USA equiv. stimulus.  They may have a problem in that 8 bank governors are against this rise in QE!!

(courtesy zero hedge)

With Kuroda Under Pressure To Increase Stimulus Again, Dissenters Appear

With the yen strengthening ~12% against the US dollar and the Nikkei down ~10% YTD, it seems Haruhiko “Peter Pan” Kuroda is having a difficult time working his magic in favor of Abenomics. As theWSJ reports, Kuroda is under increasing pressure from the Prime Minister’s advisers to coordinate efforts to jumpstart the economy. Earlier this month, we first reported of the secretive meetingbetween Kuroda and Bernanke, where the former Fed Chairman urged Japan to unleash helicopter money.

With what little credibility it still has, the Bank of Japan is set to meet this week and likely agree on the size of yet another stimulus package for the economy. Prime Minister Abe’s main economic advisor Etsuro Honda recently detailed in an interview that the BOJ should increase its Qualitative and Quantitative Monetary Easing (QQE) program from ¥80 trillion to ¥90 trillion.

In addition, there has been growing speculation regarding coordinated fiscal and monetary stimulus. The fiscal stimulus efforts are not expected to be unveiled until August, according to the WSJ. Expectations point to a “multiyear program valued at ¥20 trillion ($188 billion), including direct spending, government loans and public-private financing.”

Perhaps more interesting, this time, Kuroda may have a difficult time convincing the 8 remaining members of the monetary board. As the Journal notes, “other BOJ officials are signaling a reluctance to act, underscoring questions about whether the central bank has reached the limits of its powers to revive Japan’s economy. They note that monetary policy is already extremely accommodative, with bond yields and interest rates at or near record lows, and express doubts that additional easing would make fiscal stimulus much more effective, according to people familiar with the central bank’s thinking.”

As core metrics and corporate expectations of inflation plummet, Kuroda’s promise to do “whatever it takes” to reach 2% inflation seems to be under significant threat. Doing nothing now would “amount to an admission that the BOJ’s monetary policy has reached its limits—it wants to move, but it can’t,” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance.

Not unlike the Fed, it is clear that the BOJ is trapped in its own end game. As Kyle Bass recently toldCNBC, “The textbooks aren’t working for the academics … I fear they’re going to have to go into some sort of jubilee where the central bank just forgives the debt that they own…I don’t know what happens to the yield curve then. The unconventional policies aren’t working, so they’re going to have to go to unconventional, unconventional policies next. I don’t know where that takes them.”

The answer appears to be a one-way ticket to Neverland, where we can all believe in our hero, Peter Pan.

 

end

 

This afternoon:

Actually the rumours were true: the Japanese government is to fiscally double the amount of spending at 6 trillion yen. The markets shrugged it off and the yen reversed course and proceeded northbound into the 105 column:they were visibly upset that it wasn’t more stimulation!!!

(courtesy zero hedge)

 

Yen Tumbles On Spurious Nikkei Headline, Stocks Shrug

When you asbolutely, positively need to get stocks higher, unleash a spurious Nikkei headline (at 220am local time)… “Japan to Double Planned Spending in Stimulus Package: Nikkei” and sure enough USDJPY spikes back above 106.00… but S&P futures algos are ignoring it for now…

Goldman earlier said that 3 trillion was too small…

On the fiscal side, Prime Minister Abe has promised a “bold” package, and numbers as high as 20 trillion yen (4% of GDP) have made the rounds in the media. But the funds will be spread over more than one year, and the reports have suggested that the headline numbers may be padded by large loan or guarantee programs, with perhaps 3 trillion yen of direct fiscal outlays–which could disappoint market participants, based on our impressions from recent client meetings. A larger fiscal impulse would be needed to have a major impact on growth and market expectations.

And so minutes later, Japan responds…

Net fiscal spending will be 6t yen, double initial 3t yen plan, the newspaper reports..

But it’s not enough to juice stocks…

Probably Putin’s fault!

end

b) REPORT ON CHINA

The number one risk to China is a revolt by its people..so what happened to one million recently fired Chinese coal and steel workers:  uber like drivers…over 1 million Chinese have been hired to drive people and thus starts a new industry over there:

(courtesy zero hedge)

What One Million Recently Fired Chinese Coal And Steel Workers Are Doing Now

Having followed China’s biggest risk with great interest for the past year,  which incidentally is not its $36 trillion in debt, nor its defaults, its zombie companies, its ponzi “wealth products”, its currency, its capital outflows, its crony capitalism and corruption, nor its gargantuan capital misallocation, but the threat of a social revolution as a result of a surge in unemployment as entire zombie industries fail, that has always been true biggest risk for Beijing (something the Politburo knows very well),  we found it less than surprising when last September a Chinese coal company announced it would fires 100,000.

That was just the tip of the iceberg for China’s insolvent commodity sector, which just happens to employs tens of millions of no longer needed workers.

Things then rapidly escalated, and as we reported in March, China’s mass layoff wave was only just starting when it was revealed that China aims to lay off 5-6 million state workers over the next two to three years as part of efforts to curb industrial overcapacity and pollution.

We expect that tens of millions more will or already have been fired as China struggles to resolve it gargantuan “overcapacity” problem.

But if indeed millions of workers have already been fired, then what are these recently laid off workers doing, and why have they not rioted as Beijing, is so terrified they will?

We now have an answer: according to South China Morning Post, Didi Chuxing, the ride-hailing company which is China’s equivalent of Uber, is claiming to have given more than a million jobs to former heavy industry workers across China, according to new research from the firm.

Its study shows there are now 3.89 million full-time and part-time drivers from 17 heavy-industry provinces including Heilongjiang, Shanxi and Sichuan who work for the firm’s private car and chauffeur services.

Out of the drivers it employs who used to work in heavy industry, 530,000 came from those that are undergoing massive restructure, including the coal and steel sectors, the report said. It claims the number represents 60.2 per cent of the Chinese government’s one-year re-employment target for heavy industry workers who have been made redundant, and 29.4 per cent of the five-year target.

Cheng Wei, Didi Chuxing’s chief executive, said in a statement that 15 million rides take place on Didi every day.

“As China undergoes sweeping economic restructuring, Didi is in a unique position to help drivers find flexible work opportunities and better livelihoods with the power of technology as we work together to create more sustainable cities,” he said.

In other words, Didi is now a systemically important company, which provides part-time jobs to millions of recently laid off workers who would otherwise be very, very angry (and with to lose they may as well riot) as there are simply are no industries with enough vacant spots to absorb the influx of newly laid of workers. Such is the magic of the “sharing” economy, where anyone who has a car can become a part-time taxe driver, pardon Didi employee.

As noted above, millions more in layoffs are coming. Xu Shaoshi, chairman of the National Development and Reform Commission, said in June that China aims to reduce steel production capacity by 45 million tonnes this year and cut coal output capacity by 280 million tonnes. Chinese premier Li Keqiang said at the Summer Davos in Tianjin last month that governments and enterprises will take steps to help laid-off steel and coal workers find employment, with the central government allocating 100 billion yuan to such efforts.

And this is where “new industries” come in play.

Kitty Fok, managing director for research firm IDC China, said: “Internet platforms like Didi are able to provide job opportunities for blue-collar workers, which also helps to fulfil the government’s Internet Plus initiative.” China’s Internet Plus initiative calls for traditional industries to better integrate big data, mobile internet, cloud computing and the internet of things into their operations.

“Private car drivers with Didi are given clear guidelines on the type of service they should provide, such as a bottle of water to passengers in every ride,” Fok said.

“This is also a type of training programme that gives heavy-industry workers new job opportunities in the service industry.

Neil Wang, president for Frost & Sullivan in Greater China, said that internet companies and the online-to-offline industry are changing the employment landscape in China.

“The rapid development of internet companies has changed the business model in many industries, providing higher-income job opportunities for people who previously earned minimum wage,” Wang said, adding that in some cases jobs created by internet companies could pay better than in heavy industries.

All of the above is good news: after all the more China’s growth decelerates and the more workers lose their existing jobs, they can find temporary employment as part-time cab drivers.

However, the only problem is when everone else is also a cab driver: who will spend money on fares? We expect China to reach that particular threshold in another 3 to 6 months.

Finally, now that Elon Musk has revealed his “master plan” to unleash an army of self-driving Teslas, which – if successful – would lead to mass unemployment among China’s incipient cab driver ranks, we wonder if he just became Beijing’s persona most non-grata?

END

EUROPEAN ISSUES

OH this is going to be good for France as she will now embrace or ISIS attacks on her soil:

(courtesy zero hedge)

France Escalates – Sends Aircraft Carrier To Fight ISIS

Seemingly not satisfied with the domestic blowback from their interventionist-driven Washingtonian foreign policy, Francois Hollande – lagging badly in the polls – has decided to double-down following the recent terror attack in Nice. As Sputnik News reports, France will send artillery to Iraq and its Charles de Gaulle aircraft carrier to assist the US-led coalition’s efforts in Syria and Iraq in the coming months.

The French aircraft carrier Charles de Gaulle will be sent to the region in September, the President added.

“The Charles de Gaulle airacrft carrier will arrive in the region by the end of September. It and our Rafale aircraft will allow to intensify our strikes against Islamic State positions in Syria and Iraq,” Hollande said in a televised statement.

France will also send artillery to Iraq in August to help the Iraqi army fight Daesh terrorists, the President added.

“The Defense Council and I made a decision this morning to provide Iraqi forces with artillery as a part of anti-Daesh efforts. The artillery will be delivered in August,” Hollande said.

However, France “will not deploy ground troops,” Hollande said.

We support the operations in Syria and Iraq, but will not send our troops. We have advice to give, training to provide, but we will not deploy men on the ground,” Hollande stressed.

The US-led coalition of more than 60 nations, including France, has been carrying out airstrikes in Syria and Iraq since the summer of 2014, with the US alone having recently reached the questionable milestone of dropping 50,000 bombs on ISIS. 

Do you feel more of less safe?

 

end

 

OK! this is a biggy.  We have been talking about Italy having banking problem but now Italy must move over as Portugal has problems.  Their original “good bank” Novo Banco which took over assets from the recently departed; Banco de Espiroto is now in trouble as it cannot raise any money to augment its tier one assets.  Not only that but nobody wants to come to the table by buy this crap.  We also have Portugal’s largest bank: Caixa de Depositos in trouble as it is badly in need of cash.  They only way out is a bailout which is outlawed by Germany.

So we now have two countries with huge banking problems.

(courtesy zerohedge)

First Italy, Now Portuguese Banks “Unexpectedly” Need A Taxpayer Bailout

Last December 30, creditors in Portugal’s Novo Banco received a very unpleasant parting present to 2015: a bail-in, which sent their bonds crashing from just shy of par to barely above worthless.

As a reminder, Novo Banco was the “good” bank forged from the ashes of Banco Espirito Santo which had to be bailed out by the state in August of 2014. The idea was to sell Novo Banco to pay for the cost of the bailout, but the auction process eventually floundered amid turmoil in Chinese markets (at least two of the potential bidders were Chinese) and uncertainty about whether this “good” bank would in fact need more capital given the elevated level of NPLs already on its books.

Then last November, the ECB told Novo it would need to raise some €1.4 billion in fresh capital which the bank initially said would come from asset sales. A little over a month later, Portugal’s central bank essentially just gave up. On December 29, the bank announced it was transferring €2 billion in NB senior notes back to Banco Espirito Santo which, like a ghost skyscraper in China, is set for demolition. In other words, Novo Banco plugged the €1.4 billion hole by essentially declaring €2 billion in bonds null and void.

Fast forward six months later, and Novo Banco is set to be the gift that keeps on giving… even more terrible news.

According to the FT, Portuguese banks, already undercapitalised and loaded with bad debt, are bracing for even more heavy losses from Lisbon’s so far unsuccessful attempts to sell Novo Banco.

Estimates of the potential bill facing banks, which finance the resolution fund that bailed out Novo Banco in 2014, range from €2.9bn to €3.9bn. Some bankers are even doubtful that the rescued lender will attract any acceptable offers, leading to its possible break-up or liquidation.

Maybe. Or maybe we will see the first case of a “bad bank squared” – it would be hardly surprising considering Italy is about to bail out its already repeatedly bailed out banking sector… again.

According to the FT, the sale of Novo Banco is among critical decisions that will shortly determine the future shape of Portugal’s banking industry, which the International Monetary Fund has linked with the problems facing Italian lenders as among potential risks to global growth.

It’s not just the tragic ghost of Nova Banco that is haunting Portugal, and the rest of Europe. Lisbon and EU authorities are locked in tough negotiations over plans to recapitalise state-owned Caixa Geral de Depósitos, Portugal’s largest bank, with conflicting estimates of its capital needs ranging from about €2bn to €5bn. The Bank of Portugal and Lisbon’s eight-month-old “anti-austerity” government are also calling for a “systemic solution” to deal with more than €30bn in bad debts and problem assets, adding to other calls for public bailouts of troubled EU banks.

But wait, there’s more.

In a recent report, Barclays estimated that Portuguese lenders could need up to €7.5bn to resolve a “systemic banking crisis” that was bringing the country under “close market scrutiny”.

In other words just like Italy “unexpectedly needs a €50 billion (to start) bailout, “suddenly” Portugal also seems to need a €7.5 billion (to start) bailout.

As the FT adds, “investors fear the capital needs of banks could further burden the public finances of a struggling country already facing potential EU sanctions for failing to meet deficit targets.”

Actually, judging by historical precedent,  “fear”  is not the right word for what investors feel when it comes to taxpayer bailouts.

“Some banks are in need of a large capital injection,” said Antonio Garcia Pascual, chief European economist with Barclays. This means any material losses from the sale of Novo Banco could end up having to be met by the sovereign, as the capacity of Portuguese banks to absorb them is rather limited.” And when Antonio says “the sovereign”, he means taxpayers.

Meanwhile, Eduardo Stock da Cunha, Novo Banco’s outgoing chief executive, is already setting the stage for the doomsday scenario should his bank not get taxpayer funding, and has warned of potential big losses on the sale, drawing a comparison with Millennium BCP, Portugal’s largest listed bank, whose shares have dropped more than 60 per cent this year and which has a market value of just over €1bn.

“Portugal has to be realistic about Novo Banco when BCP is trading at a price/book value of around 0.4 and southern European banks in general at 0.5,” said a Lisbon banking analyst.

In other words, while Italy debates whether or not to be brave enough to ask Germany to greenlight a much needed €50 billion bailout, little Portugal may steal all its glory… and in the process unleash the latest – if not last – wave of taxpayer bailouts across Europe all over again.

 

end

 

When will this stop!! Syrian refugee kills one or injures two in Southern Germany City of Reutlingen: his weapon of choice a machete!

(courtesy zero hedge)

Machete-Wielding Syrian Refugee Kills One; Injures Two In Southern German City

Update: according to Sky News, the machete-wielding attacker in Reutlinger was a Syrian refugee who acted alone.

* * *

And the hits just keep on coming. With the police still trying to piece together the story behind Friday’s Munich attack, moments ago Bild reported that a man with a machete murdered a woman, and injured two others in the downtown area of the southern German town of Reutlingen. The attacker – who appears to have been inspired by last Monday’s axe-wielding slasher who pledged allegiance to ISIS in a YouTube testimony – has been arrested by the police. 

View image on TwitterView image on TwitterView image on Twitter
View image on TwitterView image on TwitterView image on TwitterView image on Twitter

The motive behind the attack is unclear. The incident took place near a doner kebab stand at Listplatz square, Germany’s Bild Reports.

Photos posted on social media show the alleged perpetrator lying on the ground, restrained by police officers. Police have confirmed that the man was arrested after he had used a machete to kill a woman and injure two more people in Reutlingen.

This will be the start of hyperinflation as the world begins to understand that the financial system has been totally ruined:  the huge Dutch bank ABN AMBRO WILL CHARGE NEGATIVE INTEREST ON CUSTOMER DEPOSITS)

(courtesy zero hedge)

It Begins: Dutch Bank ABN Amro Will Charge Negative Interest On Deposits

ABN AMRO 2

Source: ABN AMRO Website

One of the largest Dutch banks, ABN Amro, has now warned its business clients a negative interest rateon the business accounts is in the works. The bank is currently updating its terms and conditions and will more specifically include its right to reduce the interest rates below zero as the bank wants to ‘protect itself’ against the continuously changing market circumstances.

ABN AMRO 3

Source: ewtdotorg.com

Even though this is a very interesting development, this isn’t really completely unexpected as thecompany’s CEO has released some ‘test balloons’ in the past. But this where it gets really interesting. ABN AMRO still is a government-owned and government-run bank. The bank’s CEO , Gerrit Zalm, wasn’t someone from the financial sector, but used to be the Netherlands longest-serving Minister of Finance being in office for no less than 12 years (or three complete terms).

Not only is it intriguing to see the bank that is being led by a bureaucrat rather than a banker being the first one to formally start talking about charging customers to park their money at the bank, it’s also very interesting to see it’s a government-owned bank taking the first step.

ABN AMRO 1

Source: quarterly report

Indeed, ABN AMRO was nationalized during the Global Financial Crisis in the previous decade and after floating less than a quarter of the share capital, a government-owned investment vehicle still ownsapproximately 77% of the bank’s shares (see the previous image) and thus stands to benefit from trying to get as much cash as possible out of the pockets of its clients.

But perhaps there’s a bigger picture here.

In our column last week, we expressed our surprise to see ABN AMRO had suddenly become very bullish on the previous metals after having bearish for the past several years. It does look a little bit like a ‘if you can’t beat them, join them’ scenario. The gold market didn’t crack and the gold price consistently traded above the $1000/oz mark and ABN AMRO’s target price of $800 per ounce was definitely out of reach.

ABN AMRO 4

Source: Bloomberg

On top of that, people might have forgotten (but we haven’t) that ABN AMRO was –as far as we know- the first bank which defaulted on its obligation to deliver physical gold to some of its clients. Even those clients had the right to redeem a certain investment in physical gold, ABN didn’t honor this commitment and offered those clients a payout in cash rather than delivering the metal which it originally promised to do.

So we have a bank controlled by a government that wanted to repatriate its gold, which is now proposing to reduce the interest rate below zero? We don’t believe in coincidences.

>> Protect yourself and be prepared for ‘the new reality’. Read our guide to gold

Secular Investor offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the Gold & Silver Report and the Commodity Report.

Follow us on Facebook @SecularInvestor [NEW] and Twitter @SecularInvest

end

 

The following needs no further comment!

(courtesy zero hedge

IMF’s ‘Competitiveness Drive’ Leaves 127,000 Greeks Earnings Under $110 Per Month

RUSSIAN AND MIDDLE EASTERN AFFAIRS

KABUL

Another 80 killed in a suicide bombing in Kabul by a Muslim suicide bomber.

(courtesy zero hedge)

At least 80 people were killed and 231 injured when a huge blast rocked a mass demonstration by members of the mainly Shia Hazara minority in the Afghan capital, Kabul, on Saturday. The attack was claimed by terrorist group Islamic State: “Two fighters from Islamic State detonated explosive belts at a gathering of Shi’ites in the city of Kabul in Afghanistan,” said a brief statement on the group’s Amaq news agency.

A freelance journalist working for BBC Afghan said blood and body parts were everywhere, with debris strewn around.

It was the deadliest bombing in Kabul since April, when more than 60 people were killed in an attack on offices used by the security services. That was considered the worst single incident of its kind in Kabul since 2011. The government had received intelligence that an attack could take place, and had warned the march organizers, a spokesman for Afghan President Ashraf Ghani told The AP.

Graphic television footage from the site of the attack showed many dead bodies lying on the bloodied road, close to where thousands of Hazara had been demonstrating over the route of a planned multimillion dollar power line. The protesters, mostly ethnic minority Hazaras, were marching to demand that their impoverished home province be included in a major new electricity line, according to The Associated Press. The attack succeeded despite tight security which saw much of the city
center sealed off with stacks of shipping containers and other obstacles
and helicopters patrolling overhead.

If the attack is confirmed as the work of Islamic State, it would represent a major escalation for a group which has hitherto been largely confined to the eastern province of Nangarhar.

It would represent ISIS’ first attack in the capital Kabul and would be the deadliest attack in Afghanistan yet.

The attack targeted the Hazara minority who have often complained of discrimination. The Persian-speaking Hazara, estimated to make up about 9 percent of the population, are Afghanistan’s third-largest minority but they have long suffered discrimination and thousands were killed under Taliban rule. The Taliban, a fierce enemy of Islamic State, had issued a statement denying any involvement. “We would never take part in any incident that divides the Afghan people,” Taliban spokesman Zabihullah Mujahid said.

Officials have confirmed to TOLOnews that at least three suicide bombers were present at the rally. The first detonated an explosives vest, the second was killed by police, while the third had a defective explosives vest. The fate of the third attacker is unknown.

According to Reuters, Saturday’s demonstrators had been demanding the 500 kV transmission line from Turkmenistan to Kabul be rerouted through two provinces with large Hazara populations, an option the government says would cost millions and delay the badly needed project by years. But the resentment felt by many Hazaras runs deeper than simple questions of energy supply.

In November, thousands of Hazara marched through Kabul to protest at government inaction after seven members of their community were beheaded by Islamist militants and several protestors briefly tried to force their way into the presidential palace.

The protests by a group whose leaders include members of the national unity government have put pressure on President Ashraf Ghani, who has faced growing opposition from both inside and outside the government. They have also risked exacerbating ethnic tensions with other groups and provinces the government says would have to wait up to three years for power if the route were changed.

The transmission line, intended to provide secure electricity to 10 provinces is part of the so-called TUTAP project backed by the Asia Development Bank, linking energy-rich states of Central Asia with Afghanistan and Pakistan.

Hazaras say they want the line to come through Bamyan and Wardak provinces, west of Kabul, where many Hazaras live, to ensure their power supply. The government says the project already guarantees ample power to the two provinces and denies it disadvantages Hazara people.

Afghan President Ashraf Ghani said he was “deeply saddened”, adding: “Peaceful protest is the right of every citizen, but opportunist terrorists infiltrated the crowds and carried out the attack, killing and injuring a number of citizens including some security forces.”

1. the huge amount of oil that China bought and now wishes to export copious amounts of gasoline

2. the low crack spread

3. the huge rise in rigs put back into production in the USA

oil back into the 43 dollar column:

(courtesy zero hedge)

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

Euro/USA   1.0990 UP .0016 (STILL  REACTING TO BREXIT/

USA/JAPAN YEN 106.24  UP 0.291(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA HELICOPTER MONEY NOT ON THE TABLE

GBP/USA 1.3145 UP .0044(MORE STIMULUS PLANNED)

USA/CAN 1.3161 UP .0039

Early THIS MONDAY morning in Europe, the Euro ROSE by 16 basis points, trading now JUST above the important 1.08 level RISING to 1.1012; 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 compositeUP 3.01 POINTS OR .10%    / Hang Sang closed UP 29.13 points or .13%  /AUSTRALIA is HIGHER by .64%/ EUROPEAN BOURSES ARE ALL IN THE GREEN 

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 MONDAY morning closed UP:  6.96 points or 0.04% 

Trading from Europe and Asia:
1. Europe stocks ALL IN THE GREEN 

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 29.17 POINTS OR .13%  ,Shanghai CLOSED UP 3.02 POINTS OR .04%   / Australia bourse in the green: /Nikkei (Japan) closed up 6.96 or 04%/India’s Sensex IN THE GREEN  

Gold very early morning trading: $1316.60

silver:$19.47

Early MONDAY morning USA 10 year bond yield: 1.582% !!! UP  2 in basis points from FRIDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield RISES to 2.298 UP 2 in basis points from WEDNESDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early MONDAY morning: 97.25 down 22 CENTS from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

END

 

And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield:  3.03% DOWN 2 in basis points from FRIDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.238% DOWN 2  in   basis points from FRIDAY

SPANISH 10 YR BOND YIELD: 1.11%  PAR IN basis points from FRIDAY( this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 1.24 PAR in basis points from FRIDAY (again totally nuts/)

the Italian 10 yr bond yield is trading 13 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: -.041% DOWN 3 IN  BASIS POINTS ON THE DAY

 

END

 

IMPORTANT CURRENCY CLOSES FOR MONDAY

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

 

Euro/USA 1.0990 UP .0016 (Euro UP 16 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 105.79 DOWN .153(Yen UP 15 basis points/HELICOPTER MONEY OFF THE TABLE )

Great Britain/USA 1.3119 UP 0.0015 ( Pound UP 15 basis points/BREXIT DECISION AFFIRMATIVE/QE TO START AGAIN/UK DOWNGRADED/NEW PRIME MINISTER T. MAY/

USA/Canada 1.3220-UP 0.0098 (Canadian dollar DOWN 98 basis points AS OIL FELL (WTI AT $43.10). Canada keeps rate at 0.5% and does not cut!

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 16 basis points to trade at 1.0990

The Yen ROSE to 105.79 for a GAIN of 15 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY NOW OFF THE TABLE

The POUND was UP 15 basis points, trading at 1.3119 AS PRIME MINISTER THERESA MAY TAKES OFFICE/CONCERNS ON BREXIT/CONCERNS ON TERRIBLE PMI

The Canadian dollar FELL by 98 basis points to 1.3220, WITH WTI OIL AT:  $43.10

CANADIAN RATES WERE NOT CUT

The USA/Yuan closed at 6.6785

the 10 yr Japanese bond yield closed at -.238% DOWN 2  IN BASIS  points in yield/

Your closing 10 yr USA bond yield: UP 1/2 IN basis points from FRIDAY at 1.571% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.289 UP 1  in basis points on the day /AND THE DOW RISES??

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

Your closing USA dollar index, 97.26 DOWN 20 CENTS  ON THE DAY/4 PM 

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

 

London:  CLOSED DOWN 20.35 OR 0.30%
German Dax :CLOSED DOWN  50.78 OR  0.50%
Paris Cac  CLOSED UP 6.90  OR 0.16%
Spain IBEX CLOSED DOWN 24.20 OR 0.28%
Italian MIB: CLOSED DOWN 86.50 OR 0.52%

The Dow was DOWN 77.79 points or 0.42%

NASDAQ  DOWN 2.53 points or 0.06%
WTI Oil price; 43.10 at 4:30 pm;

Brent Oil: 44.68

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  65.44 (ROUBLE DOWN  65/100 ROUBLES PER DOLLAR FROM TUESDAY) 

TODAY THE GERMAN YIELD FALLS TO -.041%  FOR THE 10 YR BOND

END

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

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

WTI CRUDE OIL PRICE 5 PM:43.05

BRENT: 44.65

USA 10 YR BOND YIELD: 1.573% 

USA DOLLAR INDEX: 97.23 UP 24 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.31345 UP .0034 or 34 basis pts.

German 10 yr bond yield at 5 pm: -.043%

END

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

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

 

Stocks Slide To Worst Day In A Month After Crude Carnage, Kuroda Chaos

Overheard in Philadelphia and on every mainstream business media outlet today…

 

Stocks did not go up today…

 

Worst day in a month for The Dow…

 

The bounce off the Brexit lows appears to have stalled – can The fed save us?!!

 

As AAPL leaked lower on downgrades…

 

Oil weighed on stocks…

 

As did USDJPY (despite an idiotic bounce on spurious Nikkei headlines)…

 

But VIX was smashed to a 12 handle at 330pmET to generate some momentum into the close…

 

Note that S&P Futs were twice ramped to VWAP…

 

The USD Index slipped very modestly lower today (despite a big tumble in the Loonie) as JPY strengthened notably…

 

USDJPY slid notably lower (despite the Nikkei bounce)

 

A relatively ugly 2Y auction (ahead of this week’s FOMC) sparked underperformance at the short-end with the long-end practically unch – very small range today...

 

Commodities were a mess with crude tumbling, copper and silver getting smashed (the latter bouncing back) and Gold quietly rolling along...

 

Pushing crude to 3-month lows…and unchanged on the year…

 

And Silver roundtripped before drifting lower after Europe’s close…

 

Charts: Bloomberg

end

 

 

This confirms what David Stockman has told us:  Q3 EPS expectations are now turning negative and thus 6 consecutive quarters of declining earnings.

(courtesy zero hedge)

Q3 EPS Expectations Just Turned Negative: Six Consecutive Quarters Of Declining Earnings

With 25% of companies reporting Q2 earnings to date, 68% have reported deeply adjusted, non-GAAP earnings above consensus while 57% have reported sales above the mean estimate. Keep in mind that coming into the earnings session, most sellside research had deeply slashed their EPS expectations, especially as we got closer. However even with the modest pick up in earnings if only relative to expectations, the blended earnings decline is still -3.7%, putting the quarter on pace for the fifth consecutive decline in earnings since Q3 2008 through Q3 2009.

More interesting is what happens to the upcoming quarters, because recall that to justify the forward S&P multiple, earnings are expected to soar in the second half of the year. And yet something unexpected is taking place here: instead of rising, Q3 earnings have been declining. Just last leek we noted that according to consensus S&P500 expectations, EPS had dipped from a 0.7% rebound Y/Y to just 0.4% in the span of one week.

And, according to the latest weekly update from Factset, as of this moment consensus estimates now expect the third quarter to be the sixth consecutive quarter of declining earnings, with Q3 EPS forecasts just turning negative for the first time, down from +0.4% to -0.1%.

Indicatively, at the start of the second quarter, consensus expected Q3 earnings to rebound more than 3% Y/Y. They are now negative, primarily on the back of the failure of energy earnings to rebound as the recovery in crude oil prices has not only stalled out but is once again declining, in line with what happened one year ago.

Here is the detail from Factset:

Year-Over-Year Earnings Decline (-0.1%) Now Projected for S&P 500 for Q3 2016

As of today, the blended earnings decline for the second quarter for the S&P 500 stands at -3.7%. Factoring in the average improvement in earnings growth during a typical earnings season due to upside earnings surprises, it still appears likely the S&P 500 will report a year-over-year decline in earnings for the second quarter. If the index does report a year-over-year decline in earnings for the second quarter, it will mark the first time the index has reported five consecutive quarters of year-over-year declines in earnings since Q3 2008 through Q3 2009.

Looking at the current quarter (Q3 2016), what are analyst expectations for year-over-year earnings? Do analysts believe earnings will decline in the third quarter of 2016 also?

The answer is yes. This past week marked a change in the aggregate expectations of analysts from slight growth in year-over-year earnings (0.3%) for Q3 2016 to a slight decline in year-over-year earnings for Q3 2016 (-0.1%).

However, expectations for earnings growth for Q3 2016 have been falling not just over the past few weeks, but over the past few months as well. On March 31, the estimated earnings growth rate for Q3 2016 was 3.3%. By June 30, the estimated growth rate had declined to 0.6%. Today, it stands at -0.1%.

Eight sectors have lower expected earnings growth rates today compared to March 31 (due to downward revisions to earnings estimates), led by the Industrials sector. On March 31, the estimated  earnings growth rate for the Industrials sector for Q3 2016 was 4.3%. Today, the estimated earnings decline is -5.2%.

However, it is interesting to note that analysts in aggregate do expect earnings growth to return in the fourth quarter of 2016. Analysts currently project revenue growth to return in Q3 2016 and earnings growth to return in Q4 2016.

To be sure, just one quarter ago, analysts”projected” Q3 earnings growth would return this quarter. It now appears that won’t happen. We look forward to updating this analysis some time in October when “analysts” are forced to shelve their optimistic expectations for a Q4 rebound, as EPS for the entire year go negative once more. At this point in time, 19 companies in the index have issued EPS guidance for Q3 2016. Of these 19 companies, 14 have issued negative EPS guidance and 5 have issued positive EPS guidance.

As of this moment, for all of 2016, analysts are still projecting earnings (+0.3%) and revenues (+1.7%) to increase slightly year-over-year. We would take the under.

For those who still foolishly trade off fundamentals and forward earnings, don’t worry – there is always the massive 2017 hockeystick.

And just how are companies expected to attain this lofty surge in earnings? Why on a surge in profit margins over the next few quarters to new all time highs, as companies supposedly slash pay and fire millions…

… even as the Bureau of Labor Services dutifully follows the instructions from the administration and “reports” of continued major job gains and rising wages. Because only under the most ludicrous propaganda narrative, can a late-cycle economy, one which is already the 4th longest “recovery” in history, continue to see rising wages and continued job gains while corporate profit margins soar to record highs despite 3 consecutive years of declining revenues.

Finally, for all those asking how the S&P500 can be trading at all time highs despite what now appears to be 6 consecutive quarters of earnings decline, we wish we had an answer.

Source: Factset

end

 

Bellwether stock Caterpillar declines again as sales continue to falter:This is a good indicator of how the globe’s economy is behaving!

(courtesy zero hedge)

Caterpillar Retail Sales Decline For 43 Consecutive Months

There was a time when Caterpillar was considered a key bellwether for trends in global heavy industries, and thus a proxy for the manufacturing sector. However, over the past 3 years that has not been the case for one simple reason: if one looks only at trends revealed by CAT’s retail sales the global economy has been mired not in a recession but an unprecedented depression, one which has now lasted some 43 months. That’s how long CAT has gone without a single positive month in global retail sales, well over double the duration of the acute collapse in demand following the financial crisis.

Since there is little we can add to this story that we haven’t sasid for the past 42 months in our monthly monitoring of demand for CAT products, we will just lay out the breakdown:

  • Asia Pacific: down 7%,
  • Europe, Africa, and Middle East: down 4%
  • Latin America: down 38%
  • North America: down 12%
  • Total: down 12%

And while there was a silver lining in construction industries, wwhere Asia/Pac and EAME posted a welcome rebound of 1% and 3%, respectively, the collapse in demand for resource industries machine continues at an unprecedented pace:

  • Asia Pacific: down 28%,
  • Europe, Africa, and Middle East: down 24%
  • Latin America: down 41%
  • North America: down 31%
  • Total: down 30%

end

 

Even though the Dallas Fed mfg index rose from 118.3 to -1.8  (still contractionary), the gain was only in the hope category.  Wages tumbled!

(courtesy zero hedge)

 

Dallas Fed Outlook Contracts For 19th Straight Month With Wages Crashing To Sept 2013 Lows

 

This ought to be good: USA subprime auto lender Skopos is to delay earnings to due “accounting matters”

(courtesy zero hedge)

 

Subprime Snaps: Largest US Subprime Auto Lender Delays Earnings Due To “Accounting Matters”

 

end

 

Well that about does it for tonight

We have 4 more days of this criminal behaviour to withstand and then gold and silver will then rise.

See you tomorrow night

Harvey

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: