July 27b/ Amount of gold standing at comex increases to 21.43 tonnes ( a new record for July I believe)Gold and silver advance despite options expiry in the OTC gold/silver market/Japan unveils helicopter spending but markets unimpressed/Deutsche bank’s profit drops to nothing and stock falls 5%/Oil drops into the 41 dollar column/Policy error with respect to FOMC as gold and silver rise/ bond yields rise and dollar tanks/Strong Agnico eagle results!!/

 

Gold:1326.60 up $5.90

Silver 19.97  up 31 cents

In the access market 5:15 pm

 

Gold: 1342.00

Silver: 20.36

.

For the July gold contract month,  we had ANOTHER GOOD 17 notices served upon for 1700 ounces. The total number of notices filed so far for delivery:  6897 for 689,700 oz or 21.452 tonnes

In silver we had 9 notices served upon for 45,000 oz.  The total number of notices filed so far this month for delivery:  2359 for 11,795,000 oz

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

 

I)COMEX OPTIONS EXPIRED LAST NIGHT

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

 

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 2015 contracts DOWN to 218,297 AND CLOSE TO AN NEW ALL TIME RECORD AS THE  PRICE OF SILVER ROSE  BY 4 CENTS IN YESTERDAY’S TRADING.In ounces, the OI is still represented by just over 1 BILLION oz i.e. 1.091 BILLION TO BE EXACT or 156% of annual global silver production (ex Russia &ex China).

In silver we had 9 notices served upon for 45,000 oz.

In gold, the total comex gold fell BY A CONSIDERABLE 33,097 contracts despite the fact that the price of gold ROSE by $1.40 yesterday. The total gold OI stands at 576,325 contracts.This is very bullish for gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD

we had NO CHANGES in gold inventory . /

Total gold inventory rest tonight at: 954.23 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 2015 contracts DOWN to 218,297, as the price of silver ROSE BY  4 cents with YESTERDAY’S trading. The gold open interest FELL by A WHOPPING  33,097 contracts DOWN to 576,325 despite the fact that  the price of gold ROSE by $1.40 IN YESTERDAY’S TRADING.

(report Harvey).

 

2 a) Gold/silver trading overnight Europe, Goldcore

(Mark OByrne/zerohedge

3. ASIAN AFFAIRS

i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 58.17 POINTS OR 1.91%/ /Hang Sang closed up 89.26 OR .40%. The Nikkei closed UP 281.78 POINTS OR 1.72% Australia’s all ordinaires  CLOSED up 0.04% Chinese yuan (ONSHORE) closed UP at 6.67404/Oil fell to 42.66 dollars per barrel for WTI and 44.26 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.6761 yuan to the dollar vs 6.6704 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS SLIGHTLY AS CHINA TRIES TO STOP MORE USA DOLLARS LEAVING THEIR SHORES  

REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) REPORT ON JAPAN

i)Tuesday night:  9:30 pm est/8:30 am Wednesday Japan time zone:

Trial balloon floated on a “pseudo helicopter route” i.e. a purchase by the B of J of a 50 yr bond at zero rates.

(courtesy zero hedge)

ii)Early this morning while we were sleeping:  7 am est

announcement of a 28 trillion yen stimulus but the spending may be limited.  After a roller coaster ride the USA Yen cross is back to 105.69 as I write this today:

( zero hedge)

b) REPORT ON CHINA

Chinese regulators overnight state that they are going to rein in the huge shadow banking: WMP’s.  You will recall that they total around 3.5 trillion equiv. USA and many are non performing.  This can bring down the entire Chinese banking system

( zero hedge)

4 EUROPEAN AFFAIRS

i)Deutsche bank`s profit drops to next to nothing and yet they expect more bad things to come

( zero hedge)

ii)ITALY

Just take a look at the following Texas ratios which show that all the major Italian banks are insolvent.  And this is why Renzi has a problem.  The bail in would cause considerable problems for the huge number of bond holders but that is what Germany wants.

lots of fun here…

(courtesy Steve Hanke)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

TURKEY

Erdogan files criminal charges against the head of research at a Turkish bank for writing an account of what happened in the “failed” coup by suggesting that it may be a “false flag”

(courtesy zero hedge)

6.GLOBAL ISSUES

Global central banks are performing QE at a rate of 180 billion USA per month or 2.2 trillion USA equiv per year!

(courtesy zerohedge)

7.OIL ISSUES

i)Another huge  buildup at Cushing OK forces oil lower

( zero hedge)

ii)Last night it was API, today DOE!

( zero hedge)

8.EMERGING MARKETS

none today

9.PHYSICAL STORIES

i)New discoveries of gold has fallen off a cliff which will force mergers.  The lower production of gold will be deadly to our shorters as physical will be difficult to find and their massive short derivatives will be difficult to maintain as China moves more metal onto its shores..

(Saefong/MarketWatch/Sprott/GATA)

ii)A good commentary from Nick Barisheff as he correctly describes gold as money and not just a commodity:

( Nick Barisheff/GATA)

 

iii)Dave Kranzler gives his reasoning why mining stocks will explode higher:

(courtesy Dave Kranzler/IRD)

iv) Agnico Eagle results

(Agnico Eagle)

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

i)it is about time:  the IRS launches a criminal investigation on tax evasion with the subject: The Clinton Foundation

( Richard Pollock/the Daily Caller)

ii)Another good indicator that is telling us that something is wrong in the economy: durable good orders crash by the most in two years:  the longest non recessionary streak of declines in USA history:

( zero hedge)

 

iii)Interesting:  pending home sales disappoint as realtors are now feeling a veryunealthy price appreciation on homes

( zero hedge)

 

iv)Today is FOMC day:

First the official babble out of the Fed:

( zero hedge)

Second: the market reaction:

The bond market did not believe the babble coming out of the Fed as the dollar drops, the yield curve flattens and gold and silver surge!!

Looks to everybody like a policy error!

( zero hedge)

Let us head over to the comex:

The total gold comex open interest  WAS OBLITERATED TO AN OI level of 576,325 for a LOSS of 33,097 contracts DESPITE THE FACT THAT  THE PRICE OF GOLD ROSE BY $1.40 with YESTERDAY’S TRADING..  We have been witnessing for the past two years, the OI obliterates rather than roll into a future month. 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 17 for a LOSS of 430 contracts. We had 435 notices filed on yesterday, so we gained 5 contracts or an additional 500 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 60,321 contracts down to 88,176 as this month continues its wind down until first day notice for the August contract, Friday,July 29/2016:with only 2 more reading days.  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 335,239. The confirmed volume  yesterday (which includes the volume during regular business hours + access market sales the previous day was VERY GOOD at 317.162 contracts.The comex is not in backwardation.
Today, we had  17 notices filed for  1700 oz in gold
And now for the wild silver comex results. Total silver OI FELL by ONLY 2015 contracts from 220,312 DOWN TO 218,297 .  We are now CLOSE an all time record high for silver open interest set ON FRIDAY jULY 22.: (221,246). The front active delivery month is July and here the OI fell BY 77 contracts down to 124. We had 71 notices served on YESTERDAY so we LOST 6 silver contracts or an additional 30,,000 oz that will not  stand for delivery. The next non active month of August saw it’s OI fell by 17 contracts down to 439. The next big active month is September and here the OI FELL by 2,4971 contracts DOWN to 155,770. The volume on the comex today (just comex) came in at 41,002 which is VERY GOOD. The confirmed volume yesterday (comex + globex) was good at 39,759. Silver is not in backwardation. London is in backwardation for several months.
We had 9 notices filed for 45,000 oz. in silver JULY contract month
:INITIAL standings for JULY
July 27.
Gold
Ounces
Withdrawals from Dealers Inventory in oz   nil OZ
Withdrawals from Customer Inventory in oz  nil
 0 OZ
 nil
Deposits to the Dealer Inventory in oz  NIL
Deposits to the Customer Inventory, in oz 
 393,598.097 oz
Brinks,HSBC
Manfra,Scotia
(incl 5600 kilobars)
No of oz served (contracts) today
17 notices 
1700 oz
No of oz to be served (notices)
0 contracts
nil oz
Total monthly oz gold served (contracts) so far this month
6897 contracts (689,700 oz)
(21.452 tonnes)
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL
Total accumulative withdrawal of gold from the Customer inventory this month   829,596.9 OZ
My goodness we had a huge amount of gold enter the vaults of the comex.
Today we had 0 dealer DEPOSITS
total dealer deposit:NIL   0z
Today we had  0 dealer withdrawals:
total dealer withdrawals:  nil oz
We had 4 customer deposits:
i) Into Brinks: 16,075.000 oz  (500 kilobars)
ii) Into Manfra:  163,965.000 oz   (5100 kilobars)
iii) into HSBC: 176,380.987 oz
iv) into Scotia:  37,177.110
Total customer deposits:393,598.097 oz  12.242 tonnes )
Today we had 0 customer withdrawals:????
Total customer withdrawals nil  oz ???
Today we had 1 adjustment:
i) Out of the Scotia vault:  392,756.062 oz was adjusted out of the customer and this landed into the dealer account of Scotia
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 17 contracts of which 0 notices was stopped (received) by JPMorgan dealer and 17 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 (6897) x 100 oz  or 689,700 oz , to which we  add the difference between the open interest for the front month of JULY  (17 CONTRACTS) minus the number of notices served upon today (17) x 100 oz   x 100 oz per contract equals 689,700 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 (6897) x 100 oz  or ounces + {OI for the front month (17) minus the number of  notices served upon today (17) x 100 oz which equals 689,700 oz standing in this non   active delivery month of JULY  (21.452 tonnes).
We  gained 500 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 +  21.452 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 = 51.658 tonnes still standing against 63.109 tonnes available.
 Total dealer inventor 2,028,983.984 oz or 63.109 tonnes
Total gold inventory (dealer and customer) =10,414,467.437 or 323.93 tonnes 
 
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 323.93 tonnes for a  gain of 21  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
And now for silver
 
JULY INITIAL standings
 July 27.2016
Silver
Ounces
Withdrawals from Dealers Inventory NIL
Withdrawals from Customer Inventory
 60,047.938   oz
Scotia
Deposits to the Dealer Inventory
 nil
Deposits to the Customer Inventory
  1014.700 oz
Delaware
No of oz served today (contracts)
9 CONTRACTS 
(45,000 OZ)
No of oz to be served (notices)
115 contracts
575,000 oz)
Total monthly oz silver served (contracts) 2359 contracts (11,795,000 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  6,555,220.3 oz
today we had 0 deposit into the dealer account:
total dealer deposit nil oz
we had 0 dealer withdrawal:
:
total dealer withdrawals:  NIL oz
we had 1 customer withdrawals:
i) Out of Scotia: 60,047.938 oz
Total customer withdrawals: 60,047.938 oz
We had 1 customer deposit:
i) Into Delaware: 1014.700 oz
total customer withdrawals:1014.700. oz
 
 
 
 we had 0 adjustments
The total number of notices filed today for the JULY contract month is represented by 71 contracts for 355,000  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 (2359) x 5,000 oz  = 11,795,000 oz to which we add the difference between the open interest for the front month of JULY (124) and the number of notices served upon today (9) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the JULY contract month:  2359(notices served so far)x 5000 oz +(124 OI for front month of JULY ) -number of notices served upon today (9)x 5000 oz  equals  12,370,000 oz  of silver standing for the JULY contract month.
We lost 6 contracts or 30,000 ADDITIONAL ounces will not  stand in this active month of July.
 
Total dealer silver:  29.293 million (close to record low inventory  
Total number of dealer and customer silver:   155.104 million oz (close to a record low)
The total open interest on silver is NOW CLOSE TO 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 27/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 954.23 TONNES
jULY 26./ANOTHER HUGE PAPER WITHDRAWAL OF 4.46 TONNES FROM THE GLD/INVENTORY RESTS AT 954.23 TONNES
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 27 / Inventory rests tonight at 954.23  tonnes

end

Now the SLV Inventory
July 27/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 348.580 MILLION OZ
jULY 26/NO CHANGE IN SILVER INVENTORY AT THE slv/INVENTORY RESTS AT 348.580 MILLION OZ
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 27.2016: Inventory 348.580 million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 2.5 percent to NAV usa funds and Negative 2.7% to NAV for Cdn funds!!!!  (the discount is starting to disappear)
Percentage of fund in gold 59.3%
Percentage of fund in silver:39.5%
cash .+1.2%( July 27/2016). 
2. Sprott silver fund (PSLV): Premium rises  to +0.29%!!!! NAV (July27/2016) 
3. Sprott gold fund (PHYS): premium to NAV  rises TO  0.87% to NAV  ( July 27/2016)
Note: Sprott silver trust back  into POSITIVE territory at -0.21% /Sprott physical gold trust is back into positive territory at +0.87%/Central fund of Canada’s is still in jail.
 
 
 

end

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

Trading in gold and silver overnight in Asia and Europe
Mark O’Byrne/David Russell

Marc Faber: Invest 25% Of Investment Portfolios In Gold Bullion

Marc Faber has told advisers to invest 25% of investment portfolios in gold bullion.

The author of the Gloom, Boom & Doom Report, urged investment professionals at the CFA Institute Conference in Chicago that 25 percent of a portfolio should be allocated to gold given the very significant risks facing investors today.

The Chicago Tribune reports that Faber advised that gold is a “protection from a dangerous combination of tremendous government debt and massive bond-buying by central banks globally trying to fight off recession with near-zero interest rates.”

Faber said rates are so low that investors can’t make money in bonds so they keep buying stocks even though the prices are very inflated. Central banks want rising stock prices to make people feel wealthy and therefore spend their money, but the end result is income inequality and investor resentment, he said.

“Faber told the investment professionals gathered in Chicago that they shouldn’t be prejudiced against gold. Although the typical investment pro keeps less than 1 percent of his or her portfolio in gold, Faber suggests 25 percent. He sees it as protection from a dangerous combination of tremendous government debt and massive bond-buying by central banks globally trying to fight off recession with near-zero interest rates. Besides gold, Faber has invested in Asian real estate and some stocks and bonds.”

“It’s ludicrous to think that slashing rates will get people to spend.” When rates are low, he says, you feel insecure as savings earn nothing. So, “you save more” according to the Chicago Tribune.

Faber told GoldCore in a webinar in 2014 how he will “never sell his gold”, he buys “more every month” and he believes owning gold in vaults in Singapore “is safest.”

Webinar: Gold Bullion Stored In Singapore Is Safest – Marc Faber via Youtube

Download Guide: Essential Guide To Storing Gold In Singapore

 

Gold and Silver Bullion – News and Prices

Gold market surplus shrinks as fund inflows offset weaker Asian buying (Reuters)

Britain’s mint is making big money from gold rush (CNN)

Gold Edges Higher Ahead of Fed (WSJ)

Gold ends narrowly higher as investors await Fed decision (Marketwatch)

Gold consolidates ahead of Fed meeting outcome (Bulliondesk)

Deutsche Bank’s Pain Turns Chronic (Bloomberg)

Forget Silver or Gold; Palladium Is Winner Post-Brexit: Chart (Bloomberg)

Gold and Pork Bellies (Goldseek)

Gold Futures – critical days in the battle (not the war) (GATA)

Global arms race escalates as sabres rattle in South China Sea (Telegraph)

Gold Prices (LBMA AM)

27 July: USD 1,320.80, EUR 1,200.21 & GBP 1,007.77 per ounce
26 July: USD 1,321.25, EUR 1,199.56 & GBP 1,006.40 per ounce
25 July: USD 1,315.00, EUR 1,196.91 & GBP 1,000.32 per ounce
22 July: USD 1,323.20, EUR 1,199.22 & GBP 1,005.10 per ounce
21 July: USD 1,322.00, EUR 1,199.32 & GBP 1,000.75 per ounce
20 July: USD 1,325.60, EUR 1,204.31 & GBP 1,005.86 per ounce
19 July: USD 1,332.20, EUR 1,203.38 & GBP 1,009.04 per ounce

Silver Prices (LBMA)

27 July: USD 19.58, EUR 17.81 & GBP 14.95 per ounce
26 July: USD 19.68, EUR 17.89 & GBP 15.00 per ounce
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


Recent Market Updates

– “Could Not Invent A More Bullish Story For Gold Bullion”
– Gold In Bull Market – “Every Reason For It To Continue” – Frisby In Money Week
– 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

Mark O’Byrne
Executive Director
end

New discoveries of gold has fallen off a cliff which will force mergers.  The lower production of gold will be deadly to our shorters as physical will be difficult to find and their massive short derivatives will be difficult to maintain as China moves more metal onto its shores..

(Saefong/MarketWatch/Sprott/GATA)

‘Impending gold production cliff’ may deliver a jolt to prices

Section:

Assuming, of course, that buyers want actual metal instead of “paper gold.”

* * *

By Myra P. Saefong
Marketwatch.com, New York
Tuesday, July 26, 2016

Gold discoveries peaked in 2007 and production will soon follow, strengthening the value of the yellow metal and possibly fueling a boom in mergers and acquisitions in the gold-mining sector, according to Sprott Asset Management.

Discoveries of gold has collapsed since then, “despite exploration budgets increasing by 250 percent from 2009 to 2012,” Sprott’s gold team said in a recent note. …

… For the remainder of the report:

http://www.marketwatch.com/story/impending-gold-production-cliff-may-del…

END

 

A good commentary from Nick Barisheff as he correctly describes gold as money and not just a commodity:

(courtesy Nick Barisheff/GATA)

 

Nick Barisheff: Gold and pork bellies

Section:

The former is always money, the latter is breakfast.

* * *

By Nick Barisheff
BMG Bullion, Markham, Ontario, Canada
Tuesday, July 26, 2016

Many investors and their financial advisors consider gold to be a commodity, which makes gold no different than copper, timber, pork bellies, or orange juice. They do not understand, or simply are unaware, that gold has been successfully used as money for more than 3,000 years. Although some people think gold is an archaic relic, the facts don’t support this view.

So, what is money?

Gold is traded on the currency desks of all major banks and brokerages, along with dollars, euros, yen, and pounds, and not on the commodity desks along with other commodities. The foreign exchange traders know gold is money.

On the balance sheets of all central banks, gold is classified as a monetary asset, along with their foreign currency reserves. The central bankers know gold is money. Central banks do not hold any other commodity as part of their reserves.

Alan Greenspan knows gold is money, as he laid out in his famous article “Gold and Economic Freedom,” written in 1966 before he became chairman of the Federal Reserve. …

… For the remainder of the commentary:

http://bmgbullion.com/gold-pork-bellies/

 

end

 

They state that silver rose because of the dismal durable goods order.  Actually we got a little pause between the two gold/silver commodity expiry dates:

  1.  the comex silver contracts expired last night
  2.  the OTC expires on Friday.  So they let silver/gold run up again so they can attempt another whack.

(courtesy zero hedge)

Silver Surges Over $20 After Dismal Durable Goods Data

After 21 straight days of economic improvements, today’s dismal durable goods orders appears enough to prompt‘the QE trade’ as bonds, stocks, and bullion surge (and dollar drops). Silver just spiked to $20…

Silver broke major downtrend…

And Gold is surging on heavy volume…

 

end

 

Dave Kranzler gives his reasoning why mining stocks will explode higher:

(courtesy Dave Kranzler/IRD)

Mining Stocks Look Ready To Explode Higher Again

The news that China has been to some degree crowded out this year by Western demand for gold is of minor importance compared to this further evidence that the mighty double-digit growth 15+ year surge in Chinese domestic gold production seems at last to have topped out. This means Chinese appetite for gold will increasingly have to be met from overseas.  – John Brimelow   JB’s Gold Jottings report  LINK

It was reported by Reuters Africa yesterday that Chinese gold production in the first half of 2016 was up slightly from the same period in 2015.  2015 production was down .4% from 2014.

If the amount of China’s domestically produced gold begins to decline, China’s enormous demand for gold will require a lot more gold imported from the rest of the world.  This will make things interesting – given the already enormous supply/demand deficit in deliverable physical gold  – because we know that, based on retail gold coin sales in the  U.S., Canada, England and Australia,  retail demand in the west is picking up quickly.

Let’s examine the phrase, “deliverable physical gold” for a moment.  It’s well understood that the amount of legal claims to deliverable gold written on pieces of paper – Comex futures, LBMA forwards, lease agreements, hypothecation agreements, OTC derivatives, etc – exceed the amount of available deliverable physical gold by an unaccountable amount.

For example, the total paper gold open interest on the Comex exceeds the amount of gold that has been made available for delivery by a multiple of 35.  But we can’t account for the amount of LBMA forwards, lease/hypothecation claims and OTC derivatives gold liabilities. Therefore,  the total physical gold supply deficit is unaccountable.

With gold in a state of scarcity and with the mining stocks historically undervalued in relation to the price of gold and silver, the mining stocks have the potential to make a move that will rival the move made by the internet stocks in from 1998 – 2000.  James Dines is the first to have made this prediction over 16 years ago. The only difference, of course, is that the revaluation in the mining stocks will be based on measurable intrinsic value whereas the move made by the internet stocks was a modern version of the Dutch Tulip bulb bubble.

All this is to suggest that mining stocks appear ready for another big upside move (click on graph to enlarge):

Untitled

At some point soon, the mining stocks are going to undergo another significant upward revaluation, which will reflect the increasing amount of stress that is going to be exerted on the market for deliverable physical gold. This “stress” will only be relieved by a much higher price for gold and silver.

While I’m not making an official price forecast, I would not be surprised to see $1500 gold and $25 silver by the end of October.

Click on the banner below to find out how you can take advantage of junior mining stock ideas that have significantly outperformed the market.

 

end

 

I know many of you have shares in Agnico Eagle…

 

Later tonight Agnico eagle will release its earnings.  Prior to the release they gave an update on drilling and new discoveries.  These guys are on fire!

 

(courtesy Agnico Eagle)

Mid-Year 2016 Exploration Update: Expansion of Whale Tail and V Zones at Amaruq; Initial Results Reported from the Odyssey Zone; New Zones of Mineralization Outlined at Madrono and El Barqueno in Mexico; Sisar Zone Continues to Expand at Kittila

July 27, 2016

Stock Symbol:AEM (NYSE and TSX)

TORONTO, July 27, 2016 /PRNewswire/ – Agnico Eagle Mines Limited (NYSE:AEM, TSX:AEM) (“Agnico Eagle” or the “Company”) is pleased to provide an update on its 2016 exploration activities at the Amaruq project in Nunavut, the Sisar Zone at Kittila, the Barsele project in Sweden, the 50% owned Odyssey prospect adjoining the Canadian Malartic mine, the Madrono prospect adjoining the Pinos Altos and Creston Mascota operations and the El Barqueno project in Mexico.  Highlights include:

  • Drilling at Amaruq discovers an additional vein structure in V Zones and further infills the Whale Tail deposit – Exploration drilling has encountered a new vein structure in the V Zones, with results up to 15.5 grams per tonne (“g/t”) gold (capped) over 9.4 metres estimated true width at 18 metres depth in drill hole AMQ16-706.  The V Zones have been shown to include multiple parallel structures.  A recent lower intercept was 15.5 g/t gold (capped) over 5.4 metres estimated true width at 349 metres depth in drill hole AMQ16-833.  The V Zones are being evaluated as a potential second source of open pit ore at Amaruq.
  • Kittila drilling continues to extend Sisar Zone to the north and south – Recent exploration drilling continues to return good intercepts such as in drill hole ROD16-700D that intersected 7.4 g/t gold (uncapped) over 9.6 metres estimated true width at 1,161 metres depth, and hole ROD16-700B that intersected 6.4 g/t gold (uncapped) over 6.5 metres estimated true width at 1,261 metres depth.  Optimization studies are ongoing to evaluate the potential to bring Sisar into the Kittla mine plan.
  • At the Barsele Project in Sweden, drilling extends the Skirasen Zone – Recent drilling at the Skirasen Zone has extended the mineralization at depth by approximately 100 metres, and 80 metres to the southeast.  Highlights include hole SKI16-006 grading 1.31 g/t gold (capped) over an estimated true width of 69.8 metres at 445 metres depth.  This drill intercept is located roughly 850 metres southeast of the core of the Central Zone, indicating that the current known mineralization could be part of a larger mineralized system.  The Skirasen and Central zones are intrusive-hosted deposits that appear similar to the Goldex mine deposit.
  • Odyssey prospect at 50%-owned Canadian Malartic mine – Drilling outlines significant areas of mineralization in the North and South Odyssey zones – In the first half of 2016, 57 drill holes were completed, continuing the investigation of the Odyssey prospect.  Recent drilling continues to return significant intercepts such as 2.63 g/t gold (capped) over 33.5 metres estimated true width at 1,138 metres depth in drill hole ODY16-5039, showing similarities to the Goldex mine deposit.  Additional drilling totalling C$5.5 million (35,000 metres) has been added to the original budget of C$8.0 million (60,000 metres) (on a 100% basis).
  • New zones of mineralization outlined at the Madrono prospect – Agnico Eagle has undertaken a first campaign of drilling on this recently acquired property surrounded by itsPinos Altos mine property, just 0.5 kilometres from the Creston Mascota pit.  Mapping and sampling of historical mine workings have quickly identified high-potential targets.  The initial drilling has returned up to 4.1 g/t gold and 64.5 g/t silver (both grades uncapped) over 6.2 metres estimated true width at 45 metres depth in hole MAD16-005, confirming the potential to outline additional high-grade satellite zones close to the existing mines.
  • El Barqueno Project – Drilling outlines new, 700-metre-long Olmeca structure and extends existing deposits – Drilling is currently moving beyond the deposits that host the mineral resources.  Significant high-grade intercepts are reported at the new Olmeca prospect, which has been traced over 700 metres of strike length.  Results from Olmeca include up to 4.5 g/t gold (capped) and 4.7 g/t silver (uncapped) over 11.0 metres estimated true width at 85 metres depth in drill hole OLM16-010, and 9.4 g/t gold (capped) and 14.1 g/t silver (uncapped) over 5.1 metres estimated true width at 67 metres depth in drill hole in OLM16-003.

“Despite a significant downturn in the gold price over the past few years, we continued to invest in our operations and advance our development projects, and we significantly increased exploration spending.  As a result, we have made several new discoveries and we are now seeing the potential for many of these projects to have a positive impact on our production profile in the coming years,” said Sean Boyd, Chief Executive Officer of Agnico Eagle.  “Based on current exploration results, we believe that there is good potential to expand and upgrade the mineral resources at most of our key projects by year-end 2016, “added Mr. Boyd.

Amaruq Project – Focus on Infilling Whale Tail Mineral Resources and Defining Multiple Lenses of V Zones

Agnico Eagle has a 100% interest in the Amaruq project.  The large property consists of 116,717 hectares, located approximately 50 kilometres northwest of the Meadowbank mine.  The most recent drill results from the Amaruq project were reported in the Company news release dated April 28, 2016.  The inferred mineral resource estimate as of December 31, 2015 is 3.3 million ounces gold (16.9 million tonnes grading 6.05 g/t gold).

The goals of the first phase of the 2016 exploration program were to infill and expand the known mineral resource areas and to test other favourable targets with a focus on identifying a second source of open pit ore.  Drilling began at the end of January and continued through May based mainly on lake ice; the drilling since June has been land-based supported by helicopters. Exploration and infill drilling to the end of June has totalled 77,517 metres (338 holes), using up to nine rigs, completing the initial 75,000-metre 2016 drill program.  Almost half of this drilling was in the IVR deposit (36,545 metres, 152 holes), with 30% at Whale Tail (24,820 metres, 103 holes) and the rest at Mammoth (16,153 metres, 83 holes).  In addition, there was 2,186 metres (nine holes) related to engineering studies (rock mechanics / geotechnical drilling and metallurgical testing) in this period.

 

And their earnings beat the street:

 

Stock Symbol: AEM (NYSE and TSX)
(All amounts expressed in U.S. dollars unless otherwise noted)

TORONTO, July 27, 2016 /PRNewswire/ – Agnico Eagle Mines Limited (AEM) (“Agnico Eagle” or the “Company”) today reported quarterly net income of $19.0 million, or net income of $0.09 per share for the second quarter of 2016 (on an undiluted basis).  This result includes a non-cash foreign currency translation loss on deferred tax liabilities of $7.0 million ($0.03 per share), various mark-to-market and other adjustment losses of $5.8 million ($0.03 per share), non-cash foreign currency translation losses of $5.5 million ($0.02 per share), non-cash stock option expense of $3.1 million ($0.01 per share), non-recurring gains of $4.4 million ($0.02 per share), and unrealized gains on financial instruments of $1.0 million (nil per share).  Excluding these items would result in adjusted net income1 of $35.0 million or $0.16 per share for the second quarter of 2016.  In the second quarter of 2015, the Company reported net income of $10.1 million or net income of $0.05 per share.

For the first six months of 2016, the Company reported net income of $46.8 million, or $0.21 per share.  This compares with the first six months of 2015 when net income was $38.8 million, or $0.18 per share.  Financial results in the 2016 period were positively affected by higher gold production and realized prices (approximately 2% and 3% higher, respectively) and higher by-product metals revenues.

Second quarter 2016 cash provided by operating activities was $229.5 million ($192.7 million before changes in non-cash components of working capital).  This compares to cash provided by operating activities of $188.3 million in the second quarter of 2015 ($152.8 million before changes in non-cash components of working capital).

For the first six months of 2016, cash provided by operating activities was $375.2 million ($360.2 million before changes in non-cash components of working capital), as compared with the first half of 2015 when cash provided by operating activities was $331.8 million ($329.6 million before changes in non-cash components of working capital).

The increase in cash provided by operating activities before changes in working capital during the second quarter 2016 and first six months of 2016 was mainly due to a combination of higher gold and by-product metals production, as described above.

“The second quarter saw continued strong operating results from all of our mines coupled with record safety performance”, said Sean Boyd, Agnico Eagle’s Chief Executive Officer.  “Given these strong results and a more robust gold price environment, we have significantly improved our financial position, while continuing to make important investments in several of our growth projects.  In addition, we have raised our dividend signaling our confidence in our business and growth plan”, added Mr. Boyd.

________________________
1 Adjusted net income is a Non-GAAP measure.  For a discussion regarding the Company’s use of non-GAAP measures, please see “Note Regarding Certain Measures of Performance”.

Second Quarter 2016 highlights include:

  • Quarterly gold production – Payable gold production2 in the second quarter of 2016 was 408,932 ounces of gold at total cash costs3 per ounce on a by-product basis of $592 and all-in sustaining costs4 (“AISC”) on a by-product basis of $848 per ounce
  • 2016 production guidance increased and cost forecasts reduced – Expected gold production for 2016 is now forecast to be approximately 1.58 to 1.6 million ounces (previously 1.565 million ounces) with total cash costs per ounce on a by-product basis of $580 to $620 (previously $590 to $630) and AISC of approximately $840 to $880 per ounce (previously $850 to $890)
  • Investment grade balance sheet further enhanced – In the second quarter of 2016, the outstanding balance of $210 million was repaid under the Company’s credit facility, and C$20 million (reflecting the Company’s 50% interest) was repaid under the Canadian Malartic General Partnership’s (the “Partnership”) secured loan facility.  Net debt was reduced by approximately $181 million, to $742 million, at June 30, 2016.  For the seventh consecutive quarter, the Company has reduced net debt.  The Company’s investment grade credit was re-confirmed by Dominion Bond Rating Service Ltd. (“DBRS”) with a stable trend
  • Quarterly dividend increased by 25% – The Company has declared a $0.10 quarterly dividend.  The previous quarterly dividend was $0.08
  • Final permit received at the Meliadine Gold project –  In May 2016, the Company received the Type A Water License, which is the final license necessary to commence construction activitiesSecond Quarter Financial and Production Highlights – Higher Gold Production, Lower Unit Costs

In the second quarter of 2016, strong operational performance continued at the Company’s mines.

Payable gold production in the second quarter of 2016 was 408,932 ounces compared to 403,678 ounces in the second quarter of 2015.  The higher level of production in the 2016 period was primarily due to higher grades at LaRonde, increased throughput levels and higher grades at Goldex (GDXRF) and increased throughput levels at Canadian Malartic.  A detailed description of the production and cost performance of each mine is set out below.

Total cash costs per ounce on a by-product basis for the second quarter of 2016 were lower at $592, as compared to $601 for the second quarter 2015.  The reduction in total cash costs per ounce on a by-product basis in the second quarter of 2016 was a result of higher silver production, higher gold production at most of the Company’s mines and weaker local currencies inCanada and Mexico against the U.S. dollar compared to the second quarter of 2015.

Payable gold production for the first half of 2016 was 820,268 ounces, compared to payable gold production of 807,888 ounces in the comparable 2015 period.

For the first half of 2016, total cash costs per ounce on a by-product basis were $582, as compared to $595 for the first half of 2015.  The lower costs in the 2016 period are due to the same reasons set out above.

AISC on a by-product basis for the second quarter of 2016 were lower at $848 as compared to $864 per ounce for the second quarter 2015.  The lower AISC on a by-product basis is primarily due to higher production, lower total cash costs per ounce on a by-product basis and timing of capital expenditures.

For the first half of 2016, AISC on a by-product basis were $822 as compared to $835 per ounce for the 2015 period.  The lower AISC on a by-product basis in the 2016 period are due to lower total cash costs per ounce on a by-product basis.

Cash Position Remains Strong; Net Debt Reduced for Seventh Consecutive Quarter

Cash and cash equivalents and short term investments increased to $473.7 million at June 30, 2016, from the March 31, 2016 balance of $168.0 million.

The outstanding balance on the Company’s $1.2 billion credit facility was reduced from $210 million at March 31, 2016 to nil at June 30, 2016.  This results in available credit lines of approximately $1.2 billion, not including the uncommitted $300 million accordion feature.

In order to take advantage of historically low interest rates and improve term and liquidity, on June 30, 2016, the Company issued on a private placement basis an aggregate of $350 million of guaranteed senior unsecured notes due 2023, 2026 and 2028 (the “Notes”) with a weighted average maturity of 9.43 years and weighted average yield of 4.77%.  Net proceeds from the sale of the Notes were used to reduce amounts outstanding under the Company’s credit facility and for general corporate purposes.  During the quarter the Company’s investment grade credit was re-confirmed by DBRS with a stable trend.

Total capital expenditures (including sustaining capital) made by the Company in the second quarter of 2016 were $131.6 million, including $28.2 million at Meliadine, $20.7 million at Goldex, $19.3 million at Canadian Malartic (50% basis), $18.8 million at Kittila, $15.4 million at LaRonde, $12.2 million at Pinos Altos, $10.6 million at Meadowbank, $3.3 million at La India and $2.2 million at Creston Mascota.

Total capital expenditures (including sustaining capital) for the first six months of 2016 were $232.1 million, including $43.4 million at Meliadine, $35.9 million at Goldex, $33.0 million at Kittila, $29.8 million at Canadian Malartic (50% basis), $29.7 million at LaRonde, $28.2 million at Pinos Altos, $22.1 million at Meadowbank, $5.0 million at La India and $3.5 million at Creston Mascota.

Total sustaining capital expenditures made by the Company in the second quarter of 2016 were $78.7 million, including $18.3 million at Canadian Malartic (50% basis), $15.8 million at Kittila, $15.4 million at LaRonde, $10.6 million at Meadowbank, $9.0 million at Pinos Altos, $4.1 million at Goldex, $3.3 million at La India and $2.2 million at Creston Mascota.

Total sustaining capital expenditures for the first six months of 2016 were $145.1 million, including $29.7 million at LaRonde, $28.3 million at Canadian Malartic (50% basis), $27.5 million at Kittila, $22.1 million at Meadowbank, $19.8 million at Pinos Altos, $9.1 million at Goldex, $5.0 million at La India and $3.6 million at Creston Mascota.

Total capital expenditures (including sustaining capital) in 2016 remain forecast at $491 million.

Revised 2016 Guidance – Production Increased, Costs Lowered, Depreciation Decreased

Production for 2016 is now forecast to be approximately 1.58 to 1.6 million ounces of gold (previously 1.565 million ounces) with total cash costs per ounce on a by-product basis of $580 to $620 (previously $590 to $630) and AISC of approximately $840 to $880 per ounce (previously $850 to $890).

The Company expects depreciation and amortization expense to be in the range of $610 to $630 million.  Previous guidance was $630 to $660 million.

Second Quarter 2016 Results Conference Call and Webcast Tomorrow

The Company’s senior management will host a conference call on Thursday, July 28, 2016 at 10:00 AM (E.D.T.) to discuss financial results and provide an update of the Company’s operating activities.

Via Webcast:

A live audio webcast of the conference call will be available on the Company’s website www.agnicoeagle.com.

 

END

Your early WEDNESDAY 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 UP to 6.6704 (  SMALL REVALUATION NORTHBOUND  /CHINA UNHAPPY TODAY CONCERNING USA DOLLAR RISE/MORE $ USA DOLLARS LEAVE CHINA/OFFSHORE YUAN NARROWS TO 6.6761) / Shanghai bourse  DOWN 58.17 OR 1.61%   / HANG SANG CLOSED UP 89.26 OR 0.40% 

2 Nikkei closed UP 281,78  OR 1.72% /USA: YEN RISES TO 105.43

3. Europe stocks opened ALL IN THE GREEN    /USA dollar index DOWN to 97.24/Euro DOWN to 1.0998

3b Japan 10 year bond yield: FALLS TO  -.289%     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 105.43

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  42.69  and Brent: 44.26

3f Gold UP  /Yen DOWN

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

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 RISES to -.041%   German bunds BASICALLY negative yields from  10+ years out

 Greece  sees its 2 year rate RISE to 8.09%/: 

3j Greek 10 year bond yield FALL to  : 7.72%   (YIELD CURVE NOW  FLAT TO INVERTED)

3k Gold at $1320.65/silver $19.63(6:45 am est)   SILVER FINAL RESISTANCE AT $18.50 BROKEN 

3l USA vs Russian rouble; (Russian rouble DOWN 20/100 in  roubles/dollar) 66.12-

3m oil into the 42 dollar handle for WTI and 44 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 REVALUATION UPWARD from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 105.43 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 .9936 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0927 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT

3r the 10 Year German bund now NEGATIVE territory with the 10 year RISES to  -0.0410%

/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 1.563% early this morning. Thirty year rate  at 2.278% /POLICY ERROR)

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

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

HELICOPTER MONEY NOW A REALITY IN JAPAN!

Global Stocks, Futures Continue Rise On Apple, Japan Stimulus; Yellen On Deck

Following a rollercoaster night for the Japanese Yen, when following several media headlines Abe was said to have announced a stimulus package that would be more than JPY28 trillion, which however upon more careful reflection appeared less then met the eye (more in a subsequent post), Japanese stocks surged 1.7% while the USDJPY spiked but well off overnight highs, pushing risk assets higher.

Offsetting Japan’s exuberance was a sharp drop in Chinese stocks, which tumbled the most in 6 weeks, however closing well off the lows, down -1.9% after the 21st Century Business Herald reported the country’s banking regulator is again considering cracking down on the $3.6 trillion market for wealth management products, however yesterday’s AAPL earnings beat fueled optimism over the outlook for the global economy and served as impetus to push European stocks firmly in the green despite a collapse in Deutsche Bank profit and a drop in revenues across the board, which also helped push US equity futures higher, with the S&P set to open green for yet another session.

The Fed concludes its two-day meeting later today (no press conference), with Yellen widely expected to announce nothing, although questions remain if the recent onslaught of good economic news will not awak the “hawkish” FOMC from a deep slumber and prompt the chairwoman to once again flip flop and hint at a September rate hike.

Apple and its suppliers in Europe and Asia rallied after the iPhone maker reported a smaller-than-estimated decline in revenue. Positive earnings by companies from LVMH Moet Hennessy Louis Vuitton SE to PSA Group helped lift the Stoxx Europe 600 Index to a third day of gains. Japan’s currency slid on speculation stimulus will boost demand for higher-yielding assets at home and abroad. The yield on two-year Treasuries approached a one-month high as investors awaited the Federal Reserve’s latest assessment of the economy.

The yen weakened 0.8 percent to 105.49 per dollar, after advancing 1.4 percent in the previous two days. Prime Minister Shinzo Abe said his total program will amount to 28 trillion yen ($265 billion), with some unspecified part coming in a supplementary budget for 2016.

“Central bank move this week will still remain key to market direction,” said Nicholas Teo, a strategist at KGI Fraser Securities Pte. BOJ Governor Haruhiko Kuroda’s “show is especially important. Seeing how much expectations have been building in the markets for a ’generous’ helping of stimulus, Disappointment in the actual announcement may have a pronounced negative effect”

Almost 80% of surveyed analysts forecast the BOJ will expand its stimulus program Friday, while the Fed is forecast to keep interest rates unchanged on Wednesday.

“The good earnings are driving us further today,” said Michael Woischneck, who oversees about 300 million euros ($330 million) at Lampe Asset Management in Dusseldorf, Germany. “But we have to be aware what the Fed tells us tonight after their two-day meeting.”

Despite resilient stocks, oil is unable to stage a rebound and as of this morning was on a 5 day losing streak.

The Stoxx 600 rose 0.5 percent in London at 10:15 a.m. in London. Nasdaq 100 futures expiring in September climbed 0.7 percent, while S&P 500 futures added 0.2 percent, with the gauge near a record. Apple rallied 6.4 percent after saying iPhone demand picked up and forecasting fourth-quarter sales that may exceed analysts’ estimates. European suppliers Dialog Semiconductor Plc and AMS AG climbed more than 3 percent.

* * *

Market Snapshot

  • S&P 500 futures up 0.2% to 2167
  • Stoxx 600 up 0.4% to 343
  • FTSE 100 up 0.3% to 6745
  • DAX up 0.9% to 10338
  • German 10Yr yield down 1bp to -0.04%
  • Italian 10Yr yield down 2bps to 1.23%
  • Spanish 10Yr yield down less than 1bp to 1.1%
  • S&P GSCI Index down 0.4% to 342.9
  • MSCI Asia Pacific up 0.2% to 135
  • Nikkei 225 up 1.7% to 16665
  • Hang Seng up 0.4% to 22219
  • Shanghai Composite down 1.9% to 2992
  • S&P/ASX 200 up less than 0.1% to 5540
  • US 10-yr yield up 1bp to 1.57%
  • Dollar Index up 0.13% to 97.28
  • WTI Crude futures down 0.5% to $42.70
  • Brent Futures down 1% to $44.42
  • Gold spot down less than 0.1% to $1,320
  • Silver spot down 0.3% to $19.59

Top Global News

  • Apple’s Cheaper IPhone Is Catching On, Allaying Growth Concerns: 3Q revenue, profit beat analysts’ predictions
  • Abe Plans Stimulus Package of More Than 28 Trillion Yen
  • Hillary Clinton wins nomination to be U.S. president: with nomination, Democrats seek to put divisions behind them
  • Twitter’s Revenue Boost From Video Advertising Is Still Far Off: social media company doesn’t have video ad techology ready yet
  • Elon Musk Sees Tesla Master Plan Costing Tens of Billions: Musk says he doesn’t plan on spending billions more right away; Tesla energy storage growth may exceed that of its cars
  • Deutsche Bank Signals Deeper Cuts as Trading Slump Erodes Profit: 2Q profit almost wiped out by slump in trading revenue and costs tied to job reductions
  • Boeing Wins $5.5 Billion Malaysia Air Order for 737 Max Jets: deal has option for 25 more; deliveries to start in 2019
  • Nintendo Posts Wider Quarterly Loss, Delays Pokemon Go Plus: game maker keeps its profit outlook for fiscal year intact
  • Bayer Second-Quarter Profit Gains 5.7% Amid Monsanto Pursuit: Crop sciences sales to be flat in “weak market environment”
  • BASF Quarterly Profit Hurt by Weak Demand For Crop Chemicals: reiterates 2016 forecast for profit, sales drop; specialty chemicals gain helps buffer decline at agro- products
  • Blackstone May Bid EU6B For Italian Food Retailer Esselunga: MF

Looking at regional markets, Asia equity markets traded mixed following the indecisive US close with Japan outperforming as BoJ easing and fiscal stimulus take focus. Nikkei 225 (+1.7%) soared on JPY weakness following reports of increasing support within the BoJ for additional stimulus, with Apple suppliers benefitting from stronger than expected results from the tech giant, while a possible stimulus announcement also provided a catalyst. ASX 200 (0.0%) is relatively flat with early basic material-led gains offset by reduced expectations of an RBA rate cut after a mixed CPI release, with Credit Suisse swaps now indicating around a 50% chance of a cut next week vs. over 60% prior to the data. Elsewhere, Hang Seng (+0.4%) and Shanghai Comp (-1.9%) failed to sustain the support from an improvement in industrial profits and another firm PBoC liquidity injection, as debt concerns linger and the continued strong data dampens easing prospects. Finally, 10yr JGBs traded higher on increased BoJ easing hopes with the 10yr lead bond futures rising to a record high, while the BoJ were also in the market for JPY 750b1n of government debt.  Support is increasing within the BoJ for further monetary easing, according to reports in Nikkei. According to reports in the Kyodo, Japan PM Abe states that the stimulus package is to be over JPY 28tr1, however Abe also noted that economic stimulus is to be compiled next week.

Top Asian News

  • China Stocks Tumble on Report of Wealth Management Product Curbs: Regulators have been increasing scrutiny of investment flows
  • Australian Inflation Remains Subdued, Leaving Rate Cut on Table: Annual trimmed-mean CPI climbed 1.7% y/y in 2Q
  • Hedge Funds in Asia Worst Hit by Redemptions, eVestment Says: Asia-based funds have lost about 10% of assets this year
  • Daiwa’s Quarterly Profit Falls on Brokerage Commissions, Trading: Stock slump is dissuading households from investing savings
  • Line Posts a Profit in its First Report Card Since Global IPO: Co. reports 2.56b yen of net income in 6 months through June
  • Indonesia Names Sri Mulyani Indrawati as Finance Minister: Govt revamps cabinet to solve poverty and economic inequality issues

In Europe, it has been an upbeat session so far in Europe (Euro Stoxx: +0.4) with price action dictated by the latest batch of earnings, most notably the CAC 40 (+1.5%) is outperforming after strong updates from Peugeot (+7%) and LVMH (+6%). While Deutsche Bank (-4.3%) shares slipped this morning after announcing a 98% decline in net income, subsequently heightening the concerns surrounding the financial sector ahead of the ECB stress test results later this week. Alongside this, reports doing the rounds that support for further monetary easing is increasing amongst the BoJ members has also been a catalyst for the upside across global equities. Bunds have edged higher throughout the European morning and head into the North American crossover higher by over 30 ticks and back towards the 167 level, while the German 30Y auction saw the 10/30Y spread extending on earlier flattening.

Top European News

  • UniCredit Said to Mull $5.5 Billion Stock Sale, Pekao Exit: bank said to mull selling exiting online lender Fineco
  • UniCredit, Santander End Talks for Asset Management Deal: UniCredit to explore options for Pioneer, including IPO
  • LVMH Climbs After Estimate-Beating Sales Showcase Resilience: shares rise as Cognac, champagne boosted sales at wines-and-spirits division
  • U.K. Economy Grew Faster Than Forecast Before Brexit Vote: economic growth accelerates to 0.6% in 2Q; pickup may mark end of more than 3 years of expansion
  • Airbus Suffers $1.5 Billion Hit Against Delays to Two Key Model: co. needs huge production surge to meet 2016 profit goal
  • Santander Quarterly Profit Falls as Lending Margins Narrow: chairman reaffirms guidance of earnings, dividend increase
  • Italian Manufacturing Confidence Rises to Highest Since Jan.: consumer confidence, economic sentiment also rose in July
  • PSA Profit Jumps 32% as French Carmaker Downplays Brexit: Brexit is opportunity to ‘demonstrate agility,’ CFO says

In FX, the yen weakened 0.8 percent to 105.49 per dollar, after advancing 1.4 percent in the previous two days. Prime Minister Shinzo Abe said his total program will amount to 28 trillion yen ($265 billion), with some unspecified part coming in a supplementary budget for 2016. The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, added 0.1 percent following Tuesday’s 0.3 percent drop. The pound weakened versus the euro even as a report showed U.K. economic growth was stronger than expected in the second quarter, accelerating to 0.6 percent from 0.4 percent in the first. The data predated the June 23 referendum that resulted in the shock decision to leave the European Union and recent surveys suggest the vote delivered an immediate and sharp blow to business and consumer sentiment.

In commodities, copper fell 0.6 percent, leading most industrial metals lower following reports on Chinese curbs on wealth-management products. Zinc dropped 0.6 percent and nickel slid 0.1 percent. Oil traded near the lowest closing price in three months as industry data showed U.S. crude stockpiles at the nation’s biggest storage hub expanded by 1.4 million barrels, swelling supplies that are already at a seasonal record. West Texas Intermediate was little changed at $42.86 a barrel and Brent traded at $44.73. Gold was also little changed, at $1,319.66 an ounce. Silver dropped 0.2 percent and platinum rose 0.1 percent.

On today’s calendar, the key data to keep an eye on will be the June durable and capital goods orders. Also out today will be pending home sales data, before we then get the FOMC meeting outcome (2pm ET). A reminder that there is no post-meeting Yellen press conference scheduled. Earnings wise today we’re due to get quarterly reports from 54 S&P 500 companies including Coca-Cola and Boeing prior to the open and Facebook after the close. The European earnings calendar will also see Glaxo and Banco Santander release results

* * *

Bulletin Headline Summary From RanSquawk and Bloomberg

  • European equities have seen price action dictated by individual earnings, with Deutsche Bank in negative territory while Peugeot lead the way higher
  • GBP shrugs off the latest GDP readings, with the higher than Exp. reading considered out of date, given the current post-Brexit outlook
  • The main highlight today comes in the form of include FOMC Rate Decision, while today also sees DOE Crude Oil Inventories and earnings from Facebook and Comcast
  • Treasuries little changed in overnight trading as global equities rally and oil and precious metals drop; FOMC rate decision due today at 2pm ET, markets are wary.
  • Japanese Prime Minister Shinzo Abe announced plans for more than 28 trillion yen ($265 billion) in economic stimulus in an effort to prop up the nation’s economy
  • The BOJ has become more relevant to some U.S. traders than their own central bank as a Bloomberg survey of economists projects Governor Haruhiko Kuroda will expand his record stimulus program Friday
  • U.K. Chancellor Philip Hammond says govt and BOE “will take whatever action is necessary to support our economy and maintain business and consumer confidence”
  • U.K. retail sales fell at the fastest pace in more than four years in July, signaling caution among consumers; the index dropped to minus 14 — the lowest since January 2012 — from 4 in June
  • China’s central bank boosted the supply of cash in the financial system, helping push the benchmark money-market rate down from a three-month high
  • Deutsche Bank CEO John Cryan signaled Germany’s largest lender may have to deepen cost cuts after second-quarter profit was almost wiped out by a slump in trading revenue and costs tied to job reductions
  • Chancellor Angela Merkel faced renewed criticism of her handling of the refugee crisis in the wake of four attacks in Germany in the span of a week that have unsettled the public

* * *

DB’s Jim Reid concludes the overnight wrap

The key thing to watch at tonight’s FOMC conclusion is how strong a signal they want to send about the possibility of a September hike. The problem is that a big part of the reason for the recent rally in markets is that post the Brexit vote Fed hikes were practically priced out of the market over the subsequent 18 months. Although that’s reversed a bit with the rally it’s fair to say that a pretty benign looking Fed is keeping risk elevated. So they are a little trapped even if several on the committee would be only too pleased to have the licence to hike. Overall they are unlikely to close the door on September which may make for a slightly hawkish interpretation tonight but the reality is that ‘doing’ is proving a lot more difficult than ‘saying’.

The outcome of that meeting and the statement will be out at 7pm BST. A reminder also that there is no Yellen press conference scheduled for after. In the meantime, one topic which is at least generating a little bit of interest in what has otherwise been a pretty dull start to the week is the back and forward headlines concerning Japan and specifically the debate or doubts over how far the BoJ will push the fiscal stimulus envelope. In yesterday’s EMR we highlighted the report about the mooted second supplementary budget for FY2016 which was seen as a little disappointing. Later in the day yesterday there was a fair bit of focus on Finance Minister Taro Aso’s comments, who said that the government is still yet to have decided on the size of the fiscal package. However just a short time ago Japanese press (FNN) reported that a ¥27tn package will be announced this morning and this is seemingly gaining some real interest with PM Abe due to speak as we go to print. The package is said to include ¥13tn of low interest loans. As we go to print the WSJ is also suggesting that Japan is considering issuing 50y JGB’s. The Nikkei has rallied to +2.11% following the news and the Yen is just shy of 1% weaker.
Meanwhile on the monetary policy side of things this morning the Nikkei newspaper is suggesting that BoJ officials are looking at a number of monetary easing proposals for this Friday including cutting rates deeper into negative territory, expanding government buying beyond ¥80tn or expanding purchases of other assets.

Another potentially interesting story which did the rounds yesterday was another Nikkei report suggesting that the Japan government is considering cash disbursals to low income people as part of its potential stimulus plan, a sign perhaps of what a potential form of helicopter money could look like. The article said that the government is mulling distributions of ¥10K ($95) or more to low income people to spur spending as part of the expected ¥6tn extra spending budget being considered. The article goes on to suggest other proposals including the biggest minimum wage hike ever and lowering the unemployment insurance premium from 0.8% of an insured worker’s pay to 0.6% over several years which would result in ¥340bn of relief for workers and employers. This wouldn’t be the first time we’ve heard such proposals this year with Switzerland having previously rejected a UBI vote a couple months back. It’s likely that such redistribution scheme prove tempting for many countries over the years ahead.

On the topic of fiscal spending, our Global Economics group published a Global Economic Perspectives yesterday entitled: “Global fiscal stimulus to the rescue?” They conclude that while the potential shift away from monetary policy as the principal lever of support is welcome, the boost to global growth from the most probable fiscal packages is likely to be modest. The change in the fiscal stance they expect from the G3 and several other advanced economies could provide a meaningful boost to advanced economy growth, but it will only raise global growth by about 0.2 percentage points in the year ahead – this is not insignificant but it is also not a game-changer according to their analysis.

Yesterday was mostly about the various corporate earnings reports. Prior to the open we got a few mixed reports. Both McDonald’s and Verizon numbers were seen as relatively disappointing, with domestic sales growth at the former in particular much weaker than expected. The latest Caterpillar numbers were a bit better than expected though at both the earnings and revenue line. It was noted that management also expect declining construction sales to flatten out and that they were starting to see some signs of dealer rebuilds. After the bell we then got the latest Apple numbers (for fiscal Q3) which were also taken positively. Earnings per share was 3c ahead of estimates and revenues also beat modestly. Despite iPhone sales falling 15% yoy during the quarter, the drop wasn’t quite as much as expected and raised hopes that the worst of the sales decline is in the past. Shares were up 7% in extended trading.

Along with some mixed data, it was another reasonably benign day of price action as a result. The S&P 500 closed +0.03% although credit did underperform with CDX IG over a basis point wider. European equities edged higher (Stoxx 600 +0.10%) and credit was little changed. Sovereign bond markets were fairly unchanged, while in the commodity complex WTI (-0.49%) closed below $43/bbl (at $42.92/bbl) for the first time since mid-April.

Outside of Japan, markets are a bit more mixed in Asia. Equities in China are weaker (Shanghai Comp -0.58%) despite industrial profits for China in June rising to +5.1% yoy from +3.7% in May. Elsewhere the Kospi (-0.21%) is also in the red, while the Hang Seng (+0.35%) and ASX (+0.08%) are slightly firmer. The Aussie Dollar has weakened after the latest CPI data in Australia raised expectations that the RBA will ease at the August meeting.

In a quick recap of yesterday’s data, in the US the flash services PMI was a little disappointing after printing at 50.9 (vs. 52.0 expected), down 0.5pts from June. Together with the manufacturing reading on Friday the composite for July did however nudge up 0.3pts to 51.5. Elsewhere consumer confidence edged down a very modest 0.1pts this month to 97.3 (vs. 96.0 expected), while the present situations component rose 1.7pts. In the housing market new home sales rose +3.5% mom in June (vs. +1.6% expected) to an annualised rate of 592k. On the manufacturing side of things the Richmond Fed manufacturing survey impressed, rising 20pts to +10 (vs. -5 expected). Finally the S&P/Case-Shiller house price index fell -0.05% mom in May (vs. +0.10% expected).

Before we look at today’s calendar, there was an interesting article in the FT last night suggesting that Italy was seeking a privately backed bailout of Monte dei Paschi, which included a plan to raise €5bn of new capital. The article goes on to suggest that a private rescue is being aimed before the announcement of the stress test results on Friday. One to keep an eye on.

Looking at today’s calendar, this morning in Europe we’re kicking off with the latest consumer confidence data in Germany and France, closely followed by the ECB’s June money aggregates data. Following this, attention will turn to the UK where we’ll get the advance Q2 GDP report which our economists are pencilling in at a below market +0.3% qoq (vs. 0.5% expected). This afternoon in the US the key data to keep an eye on will be the June durable and capital goods orders. Our US economists expect headline durable orders to be soft (-3.5% mom expected) as a result of aircraft orders, and expect core capex orders to be flat. Importantly though this report could still have an impact on Friday’s Q2 GDP reading. Also out today will be pending home sales data, before we then get the FOMC meeting outcome later in the evening (7pm BST). A reminder that there is no post-meeting Yellen press conference scheduled. Earnings wise today we’re due to get quarterly reports from 54 S&P 500 companies including Coca-Cola and Boeing prior to the open and Facebook after the close. The European earnings calendar will also see Glaxo and Banco Santander release results

ASIA MARKETS

i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 58.17 POINTS OR 1.91%/ /Hang Sang closed up 89.26 OR .40%. The Nikkei closed UP 281.78 POINTS OR 1.72% Australia’s all ordinaires  CLOSED up 0.04% Chinese yuan (ONSHORE) closed UP at 6.67404/Oil fell to 42.66 dollars per barrel for WTI and 44.26 for Brent. Stocks in Europe ALL IN THE GREEN . Offshore yuan trades  6.6761 yuan to the dollar vs 6.6704 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS SLIGHTLY AS CHINA TRIES TO STOP MORE USA DOLLARS LEAVING THEIR SHORES  

FIRST  REPORT ON JAPAN  SOUTH KOREA AND CHINA

a) JAPAN ISSUES

Tuesday night:  9:30 pm est/8:30 am Wednesday Japan time zone:

Trial balloon floated on a “pseudo helicopter route” i.e. a purchase by the B of J of a 50 yr bond at zero rates.

(courtesy zero hedge)

Yen Plunges On Yet Another Strawman Headline About Stimulus, Then Surges On Denial

Update: Well that didn’t last long…

Livesquawk: Japan Ministry of Finance say it is not true they are considering 50yr bonds – debunking earlier WSJ story –Rtrs

Who could have seen that denial coming?

*  *  *

USDJPY just spiked back over 106.00 after headlines suggesting Japanese PM Shinzo Abe will unveil new stimulus as soon as today. News reports on 27t yen fiscal stimulus and issuance of 50-year bond, both spur yen selling, says David Lu, HK-based director at NBC Financial Markets Asia. We suspect there will be some disappointment after the algos are finished as FNN reports the package will include 13t yen of low-interest loans (so a smaller helicopter than expected) and besides, it’s not like the Japanese are suffering from rates being too high.

Abe wil speak today at 0400GMT – no confirmation yet as to whether the stimulus will be the topic.

As one analyst noted, it appears Abe pre-announced the stimulus package. It looks like psuedo debt monetization is on the way, if as expected, the BoJ will buy these ‘low interest loans’. But of course, direct debt monetization will never be admitted to… or will it?

The question is – will this be it? Or is this to strawman the size once again to see if the market (for that is all that matters) will be satiated by Abe’s promises.

end

Early this morning while we were sleeping:

announcement of a 28 trillion yen stimulus but the spending may be limited.  After a roller coaster ride the USA Yen cross is back to 105.69 as I write this today:

(courtesy zero hedge)

For Those Who Slept Through The “Yen Rollercoaster”, This Is What You Missed

As we started reporting last night, the yen suffered a rollercoaster ride for more than two hours today as investors chased various media trial balloons and reports – many conflicting – about prime minister Abe’s stimulus package and debt-sale plans, ahead of this week’s much anticipated BOJ announcement.

For those who slept through the night’s fireworks this is what you missed.

Sequence of events:

Initially, the Yen was lower for the early part of the morning before extending decline by 0.6% to 105.93 vs USD after FNN reported Abe will give details of stimulus package this afternoon

  • USD/JPY buyers scrambled to cover positions on FNN report, with leveraged and intraday accounts leading rush to buy dollars, according to a trader

The Currency then extended the drop to 106.54, taking the day’s losses to as much as 1.8% after the WSJ reported that the government was considering selling 50-year debt

  • A WSJ report of 50-year debt sale raised speculation of “helicopter money” policy again, according to Takenobu Nakashima, quantitative strategist at Nomura Securities

However, a prompt Ministry of Finance denial of the 50-yr bond-sale plan led yen to pare losses to 105.48, near levels before FNN report

  • Two-way price in USD/JPY on $50m trades widened to 5 pips from 3 pips by largest Japanese banks, according to an Asia-based trader
  • Clients and market makers were frustrated by the debt sale report as it was denied by MOF, the trader added

Yen briefly steadied as the market awaited Abe’s scheduled briefing in southern Fukuoka

  • Initial headlines from Abe’s speech didn’t mention stimulus
  • Abe then said the measures would be compiled next week and the lack of details supported the yen briefly before the PM finally revealed the 28 trillion yen headline figure, sending yen tumbling again to 106.13, still stronger than than its weakest point earlier

As of this moment the USDJPY was back to 105.40, near the start of the session, as if the rollercoaster ride never happened…

But a bigger problem than the surge in algo-driven volatility is that now most of the “surprise” factor both Abe and the BOJ may have had has been priced in. Worse, while Abe has shown the size of the economic package to be a bit bigger than previously thought, BOJ won’t be able to judge the impact on the economy with just the headline figure, said Osamu Takashima, a Citigroup FX strategist.

And even more troubling is that the final stimulus plan may be far less than expected: Japanese Prime Minister Shinzo Abe’s plans for more than 28 trillion yen ($265 billion) in stimulus may have a limited impact on the economy, said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities in Tokyo.  Maruyama said because “actual spending” may not be as large as the 28T yen number, “there may be limited impact on boosting the economy.” “The size of the package looks magnified,” Maruyama said.

If so, the USDJPY may plunge moments after the BOJ has no choice but to disappoint on Friday when it reveals its latest stimulus. It remains to be seen if US stocks will follow.

Source: BBG

b) REPORT ON CHINA

Chinese regulators overnight state that they are going to rein in the huge shadow banking: WMP’s.  You will recall that they total around 3.5 trillion equiv. USA and many are non performing.  This can bring down the entire Chinese banking system

(courtesy zero hedge)

Chinese Stocks Sink Over Fears Regulators Will Curb Wealth Management Schemes

China’s burgeoning problem with its ponzi-like wealth management product or WMP, industry, is nothing new: we presented a comprehensive summary one year ago in “The 8 Trillion Black Swan: Is China’s Shadow Banking System About To Collapse?” For those unfamiliar, the outstanding value of WMPs, widely expected to be a major source of future systemic risk, rose to 23.5 trillion yuan, or 35% of China’s gross domestic product, at the end of 2015 from 7.1 trillion yuan three years earlier. Much of the growth came in open WMPs, which are extra appealing to investors because they can be redeemed at any time, and thus provide another major duration risk which as we recently saw with commercial real estate funds in the UK, can turn sour overnight. Mid-tier banks such as China Merchants Bank Co. and China Everbright Bank Co. are especially dependent on the products for funding.

However, while these products provide a constant threat of imminent failure, so far the government has refused to take any steps to curbs them for one simple reason: they remains some of the most aggressive buyers of Chinese risk assets.

However, that may have changed overnight when China’s Banking Regulatory Commission drafted new rules curbing the nation’s multi-trillion market for wealth management products, which was not taken well by the local stock market, leading to a plunge in stocks in early Chinese trading, before rebounding at the close of trading. China’s ChiNext index of smaller companies sank as much as 5.5%.

Ironically, this took place just hours after we warned that China’s stock volatility – just like in the US – has plunged to near record lows.

From over 110, short-term volatility in China’s major stock market – Shanghai Composite – has collapsed to single-digits this week. This is among the least volatile period in the index’s history, despite increased uncertainty around stimulus and economic transition. China’s $6.2 trillion equity market was until recently best known for its violent price swings.
 

As Bloomberg observes, the market’s material response to the news showed what was at stake for China’s watchdogs as they attempt to reduce risk in the financial system while avoiding going too far and provoking another crash in the $6.4 trillion stock market. The Shanghai Composite is down 15%this year, among the world’s worst performers.

Many banks have been investing in WMPs to funnel money into the stock market,” said Francis Cheung, head of China and Hong Kong strategy at CLSA Ltd. in Hong Kong. “It’s non-transparent, so I understand why regulators would try to act. But if this causes too much correction, then they will get worried. The No. 1 priority is to maintain a relatively stable stock market.”

Indeed it is, and not just in China but around the globe.

The CBRC’s proposed crackdown on the $3.5 trillion WMP market was first reported by the 21st Century Business Herald, which said that all lenders may face caps on the investment of proceeds in stocks. Draft rules state that cash from “mass market” wealth products can only be invested in money or bond markets, not domestically-listed shares, a person with direct knowledge of the matter told Bloomberg. The rules are pending feedback from banks, the person said.

There’s an obvious trend of regulators wanting to strengthen market monitoring and lower the use of leverage in financial markets to control risks,” said Dai Ming, a fund manager at Hengsheng Asset Management Co. “Under such circumstances, ChiNext is especially vulnerable, given its high valuations.”

This is not the first time China has tried to tackle the local “shadow investing” industry. In fact, China has been tightening rules on WMPs since late 2014, however it has been mostly unsuccessful. The products are a key reason behind the growth in the shadow-banking industry, which Moody’s Investors Service estimates is worth more than 50 trillion yuan, and have been used by some financial institutions as a way to extend funds to risky borrowers and evade capital requirements. WMPs are sold by banks but often stay off their balance sheets. China’s securities regulator has already restricted the use of leverage by structured asset management plans, and was said to warn brokerages to do better due diligence when raising money for companies.

Adding to concerns, the Shenzhen Stock Exchange will demand better disclosure and limit speculation on stocks in popular industries such as virtual reality and artificial intelligence, according to a statement in the Securities Daily Tuesday.

“China will curb asset bubbles”, the official Xinhua News Agency reported the same day, citing a government statement after a Politburo meeting chaired by President Xi Jinping.

Somehow we doubt it, but on Wednesday, that all added up to a bad day for stock investors. The ChiNext Index of small-company shares sank by the most since June 13, the Shanghai Composite Index fell 1.9 percent and the Shenzhen Composite Index lost 4.5 percent.

And just like in the US, any time sellers emerge, so does volume: according to Bloomberg data, trading volume in Shanghai surged to the highest since April, while a gauge of 10-day price swings doubled. The Shanghai gauge trades at 12.8 times projected 12-month earnings, compared with more than 31 times for the ChiNext.

It goes without saying, that if the “crackdown” on WMPs leads to ongoing selling in Chinese stocks, the local regulator will promptly scrap the rules which as of last night are proposed to include the following:

  • Restrictions would be placed on banks with less than 5 billion yuan ($750 million) of net capital or fewer than three years of experience with wealth-management products, the person said. They would be required to invest the proceeds of any WMPs they issue in less-risky assets, such as government bonds and bank deposits, the person added.
  • Proceeds from “mass market” WMPs cannot be invested in securities funds that aren’t focused on money markets or bond markets, said the person, who asked not to be identified as he is not authorized to speak publicly
  • Private bank clients with net financial assets of more than 6m yuan and high-net worth individuals with more than 1m yuan of financial assets, as well as institutional investors, will be excluded from “mass market” category
  • Proceeds from such WMPs cannot be invested directly or indirectly in domestically listed companies’ shares or beneficiary rights
  • Banks with more than 5 billion yuan of net capital that comply with other regulatory requirements will be allowed to conduct “comprehensive” WMP business and also invest proceeds in equities and non-standard assets, in addition to low-risk assets such as government bonds, bank deposits, central bank bills
  • Banks can only apply for “comprehensive” license after running WMP business for more than three years
  • Banks will be required to set aside risk reserves from their net income until the buffer reaches 1 percent of the value of their outstanding WMPs
  • Banks will be banned from issuing WMPs with different tranches
  • The rules are pending banks’ feedback and may be subject to change

end

EUROPEAN ISSUES

GERMANY

Deutsche bank`s profit drops to next to nothing and yet they expect more bad things to come

(courtesy zero hedge)

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

Euro/USA   1.1015 UP .0026 (STILL  REACTING TO BREXIT/

USA/JAPAN YEN 104.35  DOWN 1.238(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 1.3128 UP .0028(MORE STIMULUS PLANNED)

USA/CAN 1.3220 DOWN .0003

Early THIS WEDNESDAY morning in Europe, the Euro ROSE by 26 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 34.33 POINTS OR 1.14%    / Hang Sang closed UP 136.29 points or .62%  /AUSTRALIA is HIGHER by .07%/ EUROPEAN BOURSES ARE ALL IN THE RED EXCEPT LONDON

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 WEDNESDAY morning closed DOWN:  237.25 points or 1.43% 

Trading from Europe and Asia:
1. Europe stocks ALL IN THE RED EXCEPT LONDON 

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 136.29 POINTS OR .62%  ,Shanghai CLOSED UP 34.33 POINTS OR 1.14%   / Australia bourse in the green: /Nikkei (Japan) closed DOWN 237.25 OR  1.43%/India’s Sensex IN THE RED  

Gold very early morning trading: $1321.30

silver:$19.67

Early WEDNESDAY morning USA 10 year bond yield: 1.546% !!! DOWN  4 in basis points from TUESDAY night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%. The 30 yr bond yield FALLS to 2.254 DOWN 4 in basis points from TUESDAY night. (SPREAD GOES AGAINST THE BANKS)

USA dollar index early WEDNESDAY morning: 96.95 down 33 CENTS from TUESDAY’s close.

This ends early morning numbersWEDNESDAY MORNING

END

And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield:  3.03% par in basis points from TUESDAY  (does not buy the rally)

JAPANESE BOND YIELD: -0.253% DOWN 2  in   basis points from TUESDAY

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

ITALIAN 10 YR BOND YIELD: 1.25 UP 1 in basis points from TUESDAY (again totally nuts/)

the Italian 10 yr bond yield is trading 14 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: -.027% DOWN 3 IN  BASIS POINTS ON THE DAY

END

IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.0984 DOWN .0005 (Euro UP 16 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 104.63 DOWN .953(Yen UP 95 basis points/HELICOPTER MONEY BACK ON THE TABLE )

Great Britain/USA 1.3128 UP 0.0025 ( Pound UP 25 basis points/BREXIT DECISION AFFIRMATIVE/QE TO START AGAIN/UK DOWNGRADED/NEW PRIME MINISTER T. MAY/

USA/Canada 1.3184-DOWN 0.0038 (Canadian dollar UP 38 basis points AS OIL FELL (WTI AT $42.67). Canada keeps rate at 0.5% and does not cut!

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was DOWN by 5 basis points to trade at 1.0990

The Yen ROSE to 104.63 for a GAIN of 95 basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY NOW ON THE TABLE

The POUND was UP 25 basis points, trading at 1.3128 AS PRIME MINISTER THERESA MAY TAKES OFFICE/CONCERNS ON BREXIT/CONCERNS ON TERRIBLE PMI

The Canadian dollar ROSE by 38 basis points to 1.3184, WITH WTI OIL AT:  $42.67

CANADIAN RATES WERE NOT CUT

The USA/Yuan closed at 6.6690

the 10 yr Japanese bond yield closed at -.253% DOWN 2  IN BASIS  points in yield/

Your closing 10 yr USA bond yield: DOWN 1 IN basis points from TUESDAY at 1.561% //trading well below the resistance level of 2.27-2.32%)

USA 30 yr bond yield: 2.283 DOWN 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, 97.16 DOWN 10 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 WEDNESDAY

London:  CLOSED UP 13.90 OR 0.21%
German Dax :CLOSED UP  49.52 OR  0.49%
Paris Cac  CLOSED UP 6.77  OR 0.15%
Spain IBEX CLOSED DOWN 15.50 OR 0.18%
Italian MIB: CLOSED UP 4.84 OR 0.03%

The Dow was DOWN 1.58 points or 0.01%

NASDAQ  UP 29.76 points or 0.58%
WTI Oil price; 42.07 at 4:30 pm;

Brent Oil: 44.55

USA DOLLAR VS RUSSIAN ROUBLE CROSS:  65.87 (ROUBLE UP  5/100 ROUBLES PER DOLLAR FROM TUESDAY) 

TODAY THE GERMAN YIELD FALLS TO -.027%  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:41.91

BRENT: 43.42

USA 10 YR BOND YIELD: 1.497% 

USA DOLLAR INDEX: 96.75 DOWN 42 cents

The British pound at 5 pm: Great Britain Pound/USA: 1.32172 UP .0071 or 71 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

Manic Day Leav

end

 

Today is FOMC day:

 

First the official babble out of the Fed:

(courtesy zero hedge)

Un-Dovish Fed Stays On Hold, Upgrades Economy, Suggests “Risks Have Diminished”, George Dissents

Following the longest streak of positive economic surprise in history, the stability of China, the Brexit non-event, and equity market record highs, it is perhaps no surprise that The Fed – once again – punted its decision to hike rates, although it made it clear that a rate hike is far closer than the market expects by adding language that “near-term risks to the economic outlook have diminished.”

  • FED SAYS `NEAR-TERM RISKS’ TO ECONOMIC OUTLOOK HAVE DIMINISHED
  • FED: JOB MKT STRENGTHENED, ECONOMY EXPANDING AT MODERATE RATE
  • FED: HOUSEHOLD SPENDING GROWING STRONGLY, BIZ INVESTMENT SOFT
  • FED REPEATS ECONOMY TO EVOLVE IN WAY WARRANTING GRADUAL HIKES

This all suggests rising probability of rate-hikes as the statement may not be full hawktard but is shifting that way. And further suggesting the Fed is turning Hawkish was the first dissent in over a year, when Kansas Fed’s Esther George dissented.

Here are the key changes in the form of lanugage removals, all focused mostly on jobs, which following the June “stellar” jobs report was to be expected:

  • the pace of improvement in the labor market has slowed
  • Job gains have diminished.

Additions:

  • Job gains were strong in June following weak growth in May. On balance, payrolls and other labor market indicators point to some increase in labor utilization in recent months.
  • Market-based measures of inflation remain low

And the most important standalone inclusion:

  • Near-term risks to the economic outlook have diminished

Finally, the dissenters are back:

  • Voting against the action was Esther L. George, who preferred at this meeting to raise the target range for the federal funds rate to 1/2 to 3/4 percent

* * *

Pre-FOMC: S&P Futs 2158, 10Y, Gold, JPY

Rate hike odds pre-Fed:

Since the last FOMC: Stocks, Gold, and Bonds are up…

 

Best. Data. Streak. Ever…Amid the plethora of 11-foot-tall-men multiple-standard deviation beats in recent economic data, the Citi Macro Surprise Index did something it has never done before – it rose for 21 days straight – breaking the last 5 years trends of seasonal dumps (into mid-year) and pumps (into fiscal year-end)…

 

Best. Stock. Market. Ever... (as fundamentals collapse)

 

 

And so the Fed headlines explain why they held… again…

  • *FED: JOB MKT STRENGTHENED, ECONOMY EXPANDING AT MODERATE RATE (upgrade)
  • *FED: HOUSEHOLD SPENDING GROWING STRONGLY, BIZ INVESTMENT SOFT
  • *FED REPEATS JOB MKT TO STRENGTHEN, INFLATION SEEN STAYING LOW

But leaves itself an out…

  • *FED REPEATS CLOSELY MONITORING GLOBAL, FINANCIAL DEVELOPMENTS

And 1 Dissent:

  • *FED: GEORGE DISSENTS IN FAVOR OF QUARTER-POINT RATE RISE

Full Redline Statement Below: see zero hedge if you want to see the garbage comingout their mouths

 

end

 

The bond market did not believe the babble coming out of the Fed as the dollar drops, the yield curve flattens and gold and silver surge!!

Looks to everybody like a policy error!

(courtesy zero hedge)

 

 end

Another good indicator that is telling us that something is wrong in the economy: durable good orders crash by the most in two years:  the longest non recessionary streak of declines in USA history:

(courtesy zero hedge)

Durable Goods Orders Crash Most In 2 Years – Longest Non-Recessionary Streak Of Declines In US History

Despite the longest winning streak for US macro data in US history, Durable Goods Orders collapsed in June. The4% MoM plunge (vs -1.4% exp) is the biggest drop since Aug 2014. This represents a 6.6% YoY crash – the biggest drop since July 2015.

The drop appears driven by  plunge in airplane orders (non-defense aircraft and parts). Which should not be surprise:

Airbus Group SE and Boeing Co. racked up their lowest tally of aircraft orders in six years at the aviation industry’s annual showcase, as a slowing global economy and concern about the impact of Britain’s decision to quit the European Union curbed demand.

Core Capex continues to slide…

Does this look like a “non-doom-and-gloom” economy?

Worse still, core durable goods orders extended their annual declines to 18 months straight – the longest non-recessionary streak of declines in US history.

“It’s probably nothing”

Charts: Bloomberg

end

 

Interesting:  pending home sales disappoint as realtors are now feeling a veryunealthy price appreciation on homes

(courtesy zero hedge)

Pending Home Sales Disappoint, Realtors Fear Unhealthy Price Appreciation

Following New Home Sales rebound to their highest since 2008, amid record high prices, Pending Home Sales disappointed with a mere 0.2% MoM rise (versus +1.2% expectations) showing very little bounce off May’s tumble. Northeast sales saved the day with a 3.2% surge but The South and West both continued to slide. As NAR’s Larry Yun noted however: “home prices are showing little evidence of slowing to a healthier pace that more closely mirrors wage and income growth.”

Diverging fortunes…

Regional breakdown suggests price is starting to have an impact:

  • Northeast up 3.2%; May fell 5.3%
  • Midwest up 0.8%; May fell 4.2%
  • South fell 0.6%; May fell 3.1%
  • West fell 1.3%; May fell 3.4%

Lawrence Yun, NAR chief economist, says a solid bump in activity in the Northeast pulled up pending sales modestly in June.

“With only the Northeast region having an adequate supply of homes for sale, the reoccurring dilemma of strained supply causing a run-up in home prices continues to play out in several markets, leading to the last two months reflecting a slight, early summer cooldown after a very active spring,” he said. “Unfortunately for prospective buyers trying to take advantage of exceptionally low mortgage rates, housing inventory at the end of last month was down almost 6 percent from a year ago, and home prices are showing little evidence of slowing to a healthier pace that more closely mirrors wage and income growth.

Adds Yun, “Until inventory conditions markedly improve, far too many prospective buyers are likely to run into situations of either being priced out of the market or outbid on the very few properties available for sale.”

As Bloomberg summarizes, the leveling off in pending home sales comes on the heels of reports showing existing-home sales jumped in June to its highest level since 2007 and the strongest new-home demand in eight years. The Realtor’s group said last week that sales have probably peaked for the year as prospective buyers don’t have enough homes from which to choose, forcing up property values. That’s mitigated the positive influence of mortgage rates that are close to record lows. Keep an eye on the pending home sales figure, since buyer traffic has slowed in recent weeks, the real-estate agents’ group said last week.

Charts: Bloomberg

end

it is about time:  the IRS launches a criminal investigation on tax evasion with the subject: The Clinton Foundation

(courtesy Richard Pollock/the Daily Caller)

IRS Launches Investigation Of Clinton Foundation

Submitted by Richard Pollock via The Daily Caller,

IRS Commissioner John Koskinen referred congressional charges of corrupt Clinton Foundation “pay-to-play” activities to his tax agency’s exempt operations office for investigation, The Daily Caller News Foundation has learned.

The request to investigate the Bill, Hillary and Chelsea Clinton Foundation on charges of “public corruption” was made in a July 15 letter by 64 House Republicans to the IRS, FBI and Federal Trade Commission (FTC). They charged the foundation is “lawless.”

The initiative is being led by Rep. Marsha Blackburn, a Tennessee Republican who serves as the vice chairwoman of the House Committee on Energy and Commerce, which oversees FTC. The FTC regulates public charities alongside the IRS.

The lawmakers charged the Clinton Foundation is a “lawless ‘pay-to-play’ enterprise that has been operating under a cloak of philanthropy for years and should be investigated.”

Koskinen’s July 22 reply came only a week after the House Republicans contacted the tax agency. It arrived to their offices Monday, the first opening day of the Democratic National Convention in Philadelphia.

“We have forwarded the information you have submitted to our Exempt Organizations Program in Dallas,”Koskinen told the Republicans.

The Exempt Organization Program is the division of the IRS that regulates the operations of public foundations and charities. It’s the same division that was led by former IRS official Lois Lerner when hundreds of conservative, evangelical and tea party non-profit applicants were illegally targeted and harassed by tax officials.

Blackburn told TheDCNF she believes the IRS has a double standard because, “they would go after conservative groups and religious groups and organizations, but they wouldn’t be looking at the Clinton Foundation for years. It was as if they choose who they are going to audit and question. It’s not right.”

Blackburn said she and her colleagues will “continue to push” for answers on the Clinton Foundation’s governing policies, including its insular board of directors. She said they also will examine conflicts of interest and “follow the money trail.”

“In my opinion, there’s a lack of good governance, there is the appearance of conflicts of interest, and there are continued questions about the financial dealings,” she told TheDCNF.

House Republicans singled out Laureate Education and Uranium One as two companies that seemed to have paid lavish sums to the Clintons and later received official government benefits.

Laureate hired former President Bill Clinton as “honorary chancellor,” paying him $16.5 million over five years. The Baltimore-based company, which operates for-profit universities in 28 countries, also donated between $1 million and $5 million to the Clinton Foundation, according to the foundation’s web site.

While Bill was collecting a paycheck from the company and his wife was secretary of state, the International Finance Corporation (IFC), an arm of the World Bank, invested $150 million in Laureate. It was the largest-ever single IFC investment to an educational company. The United States government is the largest contributor to the IFC. During that same period, the Department of State’s U.S. Agency for International Development awarded $55 million to the International Youth Foundation. Laureate CEO Douglas Becker is on the foundation’s board of directors. International Youth Foundation, the Clinton Foundation and Laureate jointly participated in foundation programs.

A Laureate spokesman denied the quid pro quo charges: “Allegations of any quid pro quo between Laureate, the International Youth Foundation and the Clintons are completely false,” she told TheDCNF, adding, “the IFC’s decision to invest in Laureate had no connection to and was not influenced in any way whatsoever by Hillary Clinton.”

The IFC also awarded $150 million to another company owned by Frank Giustra, a close friend of Bill Clinton. Giustra donated $100 million to create the “Clinton Giustra Enterprise Partnership” within the Clinton Foundation. The funds went to Pacific Infrastructure, a company in which Giustra had a significant financial stake. The company was to build a port and oil pipeline in Colombia that was strenuously opposed by environmental and human rights groups because the pipeline sliced through five indigenous villages and forcibly displaced the tribes.

Giustra also was an owner in Uranium One, a uranium mining company with operations in Kazakhstan and in the western United States. Giustra wanted to sell a share of the uranium business to Russia’s atomic energy agency, which required U.S. approval, including that of Secretary Clinton. The Russian investment was approved.

Blackburn added that it appeared the Clinton Foundation — which was tax-exempt only to construct and manage Clinton’s presidential library — never got IRS approval to become a tax-exempt global organization with operations in Africa, Asia, Latin America, the Pacific and the Caribbean.

“In the Clinton Foundation we have a charity that has never filed the appropriate paperwork,” Blackburn charged.

Charles Ortel, a Wall Street analyst who has been investigating the Clinton Foundation, told TheDCNF that the expansion of the foundation into a global giant was not legally approved by the IRS.

“It’s crystal clear in a review of their application that their purposes were narrowly limited, as they should have been, to a presidential archive in Little Rock, Arkansas,” he said to TheDCNF. “End of discussion.”

Blackburn also questions the makeup of the Clinton Foundation’s board of directors, which IRS rules require include independent, arm’s-length board members. The Clinton Foundation board mainly consists of close friends, business colleagues and big donors to the Clintons, as reported by TheDCNF.

“All charities need to guard against incestuous relationships which limit their ability to be objective,” the congresswoman said. “In the Clinton Foundation, we see a lack of diversity within their board.”

Uranium One did not respond to TheDCNF’s request for comment. The Clinton Foundation also did not respond to TheDCNF’s request for comment.

 

end

 

Well that about does it for tonight

I will see you tomorrow night

 

A little heads up:  I will be delivering Friday’s commentary again on Saturday.

end

 

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