Feb 13/Gold and silver whacked as open interest in silver climbs to 195,000 contracts/GLD adds another 4.15 tonnes to its inventory/North Korea launches a medium range ballistic missile/ Now it is Japan’s turn to dump USA treasuries/China stops its tightening process last night and that sends all bourses into the green/German wholesale prices skyrocket and that signals huge inflation down the pike/Dr David Malpass nominated by Trump for undersecretary of the Treasury: he is a sound money advocate/North California’s Oroville Dam ready to break: evacuation order sends 200,000 people from their homes/FINAL DRAFT

Gold at (1:30 am est) $1224.40 DOWN 410.00

silver was : $17.80:   DOWN 11 CENTS

Access market prices:

Gold: $1225.50

Silver: $17.83

THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON

.

The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning

The fix for London is at 5:30  am est (first fix) and 10 am est (second fix)

Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.

And now the fix recordings:

MONDAY gold fix Shanghai

Shanghai FIRST morning fix Feb 13/17 (10:15 pm est last night): $  1239.63

NY ACCESS PRICE: $1230.25 (AT THE EXACT SAME TIME)/premium $9.38

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Shanghai SECOND afternoon fix:  2: 15 am est (second fix/early  morning):$   1240.33

NY ACCESS PRICE: $1230.55 (AT THE EXACT SAME TIME/2:15 am)

   SPREAD/ 2ND FIX TODAY!!:  9.78

China rejects NY pricing of gold  as a fraud/arbitrage will now commence fully

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London FIRST Fix: Feb 13/2017: 5:30 am est:  $1229.90   (NY: same time:  $1230.25   (5:30AM)

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

London Second fix Feb 13.2017: 10 am est:  $1222.25 (NY same time: $1222.60

  (10 AM)

It seems that Shanghai pricing is higher than the other  two , (NY and London). The spread has been occurring on a regular basis and thus I expect to see arbitrage happening as investors buy the lower priced NY gold and sell to China at the higher price. This should drain the comex.

Also why would mining companies hand in their gold to the comex and receive constantly lower prices.  They would be open to lawsuits if they knowingly continue to supply the comex despite the fact that they could be receiving higher prices in Shanghai.

end

For comex gold:

FEBRUARY/ 

NOTICES FILINGS FOR FEBRUARY CONTRACT MONTH:  0 NOTICE(S) FOR NIL OZ.  TOTAL NOTICES SO FAR: 5122 FOR 512,200 OZ    (15.931 TONNES)

For silver:

 

For silver: FEBRUARY

113 NOTICES FILED FOR 560,000 OZ/

TOTAL NO OF NOTICES FILED: 360 FOR 1,800,000 OZ

 

Today is Steve Mnuchin’s confirmation hearings for the position of Sec. Treasury. He holds the keys for the removal of gold from the USA to China/Russia.  Let’s see if Trump stops this process.

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE by 2,392 contracts UP to 195,053 with respect to FRIDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  .975 BILLION TO BE EXACT or 139% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH: THEY FILED: 113 NOTICE(S) FOR 565,000 OZ

In gold, the total comex gold FELL BY 6,374 contracts WITH THE FALL IN  THE PRICE GOLD ($0.70 with FRIDAY’S trading ).The total gold OI stands at 410,743 contracts

we had 0 notice(s) filed upon for NIL oz of gold.

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

GLD:

We had another huge change in tonnes of gold at the GLD: a deposit of 4.15 tonnes despite the whacking of gold today.

Inventory rests tonight: 836.73 tonnes

.

SLV

we had no changes in silver into the SLV

THE SLV Inventory rests at: 334.713 million oz

end

.

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

1. Today, we had the open interest in silver RISE by 2,392 contracts UP to 195,053 AS SILVER WAS UP 19 CENTS with YESTERDAY’S trading. The gold open interest FELL by 6,394 contracts DOWN to 410,743 WITH THE FALL IN THE PRICE OF GOLD OF $0.70  (FRIDAY’S TRADING)

(report Harvey

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

 

3. ASIAN AFFAIRS

i)Late  SUNDAY night/MONDAY morning: Shanghai closed UP 20.14 POINTS OR .63%/ /Hang Sang CLOSED UP 136.00 POINTS OR .58% . The Nikkei closed UP 80.22 POINTS OR 0.41% /Australia’s all ordinaires  CLOSED UP 0.72%/Chinese yuan (ONSHORE) closed UP at 6.8730/Oil FELL to 53.66 dollars per barrel for WTI and 56.40 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.8720 yuan to the dollar vs 6.8730  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS TO ZERO AS POBC ATTEMPTS TO STOP USA DOLLARS FROM LEAVING CHINA’S SHORES. ONSHORE YUAN STRONGER AS IS OFFSHORE YUAN COUPLED WITH THE WEAKER DOLLAR

 

REPORT ON JAPAN  SOUTH KOREA NORTH KOREA AND CHINA

3a)THAILAND/SOUTH KOREA

North Korea launches a medium range ballistic missile

(courtesy zero hedge)

b) REPORT ON JAPAN

i)Interesting:  Japan’s love for yield has now dissipated as they are dumping USA securities. Probably for two reasons:

.1 yields are rising due to Fed tightening

2 the debt ceiling fiasco will be upon us commencing March 15.2017

(zero hedge)

ii)Japan/China/Trump /USA) 

Trump backs Japan over the disputed islands in the South China Seas

(courtesy zero hedge)

c) REPORT ON CHINA

Last night: Chinese bonds rise, stocks rise along with commodities.  The yuan falls a bit.  For the first time in 7 days, China unleashed a 100 billion yuan repo and that reversed the tightening orchestrated by the POBC .

( zero hedge)

4. EUROPEAN AFFAIRS

i)France

Why is Europe frightened of a Le Pen victory? Because 80% of France’s debt will be denominated in Francs or roughly 1.7 trillion dollars.  That would without a question bankrupt the EU

( zero hedge)

 

ii)GREECE

Tsipras warns the IMF and Schauble to stop playing with fire and help Greece with their huge debt bomb. Greece has a huge 6 billion euro debt to pay by early July and that date will the the line in the sand. Greece always waits until the last minute and they have nothing to lose if they wait.  If they get no debt relief, they leave the Euro and basically bankrupt the EU.  However they will impoverish their senior citizens as the pensions become basically nil.

( zerohedge)

iii)Germany

Oh oH! this is not good for Germany and the EU.  Wholesale prices soar by a huge 4% as inflation is now upon them due to the massive printing of EU’s in the QE of their bonds

( zero hedge)

iv)EU

The EU and other trading partners are not waiting.  They are preparing a legal challenge to Trump’s  Border Tax (BAT)

As far as I am concerned, the Border tax is a non starter

(courtesy zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6.GLOBAL ISSUES

7. OIL ISSUES

In the COT report fro Oil Muir suggests one should take the net speculative interest in oil instead of the just the longs.  In gold and silver we do just that

( Muir/MacroTourist blog)

8. EMERGING MARKETS

Your humour story of the day:

Venezuela kicks out CNN out of Venezuela accusing the operation of spreading fake news:

( zero hedge)

9.   PHYSICAL MARKETS

i)We have been stating the following for years:  Germany did not get their gold back but got newly minted gold.

( Sputnik News)

ii)Egon Von Greyerz, who is one of the smartest guys on the planet with respect to physical gold locations and trading.  In this important commentary, Von Greyerz outlines the fraud in that bullion banks hypothecate the same bars over and over again.  China, Russia and India are the major buyers. When there is no more physical gold to give them, the game ends.

a must read…

( Von Greyerz/Kingworldnews)

10.USA STORIES

i)This is big:   Dr Malpass is an advocate for a strong currency and is a gold bug:

( zero hedge)

ii)Now Trump starts the deportation of illegal aliens.  Mexico plans to jam the USA court system

( zero hedge)

iii)Hundreds of illegal immigrants arrests and many more to come

( zero hedge)

iv)A must read article:  With Friday’s resignation of Tarullo who was the Fed’s point guard on regulation, Barclay’s is suggesting that there is going to be huge significant changes coming to the Fed in the next 18 months.. here is why!

( zero hedge)

v)Last week we brought you the story of how the 3 Muslim brothers were the actual people who hacked the Democratic Convention computers  and not the Russians.  There is now strong evidence that these guys supplied the information to Yemen in the raid that killed Nay Seal, Owens.  Is this why Tillerson cleaned house immediately?

( zero hedge)

vi)Northern California’s Oroville Dam is in imminent failure and now 100,000 of Californians must evacuate from their homes:

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 6,374 CONTRACTS down to an OI level of 410,743 WITH THE FALL IN THE  PRICE OF GOLD ( $0.70 with FRIDAY’S trading). No doubt that tomorrow’s reading in OI will be much lower again. As I indicated to you on many occasions that an OI of around 390,000 will be rock bottom and thus in strong hands. We are now in the contract month of FEBRUARY and it is one of the better delivery months  of the year. In this next big active delivery month of February we had a GAIN of 9 contracts UP to 1361.   We had 3 notices served upon yesterday and therefore we GAINED 12 contracts or an additional 1200 oz will stand for delivery and OUR CASH SETTLEMENTS STOPPED FOR NOW.   The next non active contract month of March saw it’s OI FALL by 52 contracts DOWN to 2102.The next big active month is April and here the OI FELL by 6308 contracts DOWN to 273,993.

We had 0 notice(s) filed upon today for NIL oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.  Total silver OI ROSE by 2,392 contracts FROM 192,661 up to  195,053 as the price of silver ROSE IN PRICE TO THE TUNE OF 19 CENTS with respect to FRIDAY’S trading.  We are moving CLOSER TO the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540). We are also witnessing a divergence with the silver OI rising and gold OI declining.

The  active month of February saw the OI FALL by 46 contract(s) DOWN TO  239.  We had 100 notice(s) served on FRIDAY so we GAINED 54 CONTRACTS  or an additional 270,000 oz will stand for delivery.

The next big active delivery month is March and here the OI decrease by 2970 contracts down to 103,060 contracts. For comparison purposes last year on the same date only 81,717 contracts were standing.

We had 113 notice(s) filed for 565,000 oz for the FEBRUARY contract.

VOLUMES: for the gold comex

Today the estimated volume was 167,223  contracts which is fair.

Yesterday’s confirmed volume was 249,203 contracts  which is very good

volumes on gold are getting higher!

INITIAL standings for FEBRUARY
 Feb 13/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
72,339.500 OZ
2,250 kilobars
HSBC
Scotia
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 NIL
No of oz served (contracts) today
 
0 notice(s)
0 oz
No of oz to be served (notices)
1361 contracts
136,100 oz
Total monthly oz gold served (contracts) so far this month
5122 notices
512,200 oz
15.931 tonnes
Total accumulative withdrawals  of gold from the Dealers inventory this month   NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month     193,914.4 oz
Today we HAD 2 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 0  customer deposit(s):
total customer deposits; NIL oz
We had 2 customer withdrawal(s)
i) Out of HSBC:  64,301.000 oz  (2,000 kilobars)
dubious: kilobars are 32.15 therefore 2,000 =  64,300.00 oz.
total customer withdrawal: 72,339.500 oz
We had 0  adjustment(s)
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
For FEBRUARY:

Today, 0 notice(s) were 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 0 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the initial total number of gold ounces standing for the FEBRUARY. contract month, we take the total number of notices filed so far for the month (5122) x 100 oz or 512,200 oz, to which we add the difference between the open interest for the front month of FEBRUARY (1361 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 648,300 oz, the number of ounces standing in this  active month of FEBRUARY.
 
Thus the INITIAL standings for gold for the FEBRUARY contract month:
No of notices served so far (5122) x 100 oz  or ounces + {(1361)OI for the front month  minus the number of  notices served upon today (0) x 100 oz which equals 648,300 oz standing in this non active delivery month of FEBRUARY  (20.165 tonnes)
 we gained 12 contracts or an additional 1200 oz will stand in this active delivery month.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
On first day notice for FEB 2016, we had 20.124 tonnes of gold standing. At the conclusion of the month we had only 7.9876 tonnes standing. The data suggests that we had almost identical amounts standing in Feb ’16 and Feb 2017; however today’s totals already surpassed the final amt which eventually stood  in 2016.(already 15.931 tonnes vs 7.9876 at the end of Feb).
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov.    8.3950 tonnes.
DEC.   29.931 tonnes
JAN/     3.9004 tonnes
FEB/ 20.165 tonnes
total for the 14 months;  246.169 tonnes
average 17.583 tonnes per month vs last yr  59.51 tonnes total for 14 months or 4.250 tonnes average per month (last yr).
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Total dealer inventory 1,416,640.129 or 44.06 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,911,107.97 or 277.17 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 277.17 tonnes for a  loss of 26  tonnes over that period.  Since August 8/2016 we have lost 74 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

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 of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 6 MONTHS  74 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE JANUARY DELIVERY MONTH
FEBRUARY INITIAL standings
 feb 13. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
nil 0z
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 nil oz
No of oz served today (contracts)
113 CONTRACT(S)
(565,000 OZ)
No of oz to be served (notices)
126 contracts
(630,000  oz)
Total monthly oz silver served (contracts) 360 contracts (1,800,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month   5,184,240.7 oz
 END
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 0 customer withdrawal(s):
TOTAL CUSTOMER WITHDRAWALS: nil oz
 we had 0 customer deposit(s):
x) Into JPMorgan:  zero  oz**
deposits into JPMorgan have now stopped.
total customer deposits;  nil  oz
 
 we had 1  adjustment(s)
i) Out of CNT:  554,479.590 oz leaves the dealer and enters the customer account of CNT
The total number of notices filed today for the FEBRUARY. contract month is represented by 113 contract(s) for 500,000 oz. To calculate the number of silver ounces that will stand for delivery in FEBRUARY., we take the total number of notices filed for the month so far at  360 x 5,000 oz  = 1,800,000 oz to which we add the difference between the open interest for the front month of feb (239) and the number of notices served upon today (113) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the FEBRUARY contract month:  360(notices served so far)x 5000 oz  + OI for front month of FEB.( 239 ) -number of notices served upon today (113)x 5000 oz  equals  2,430,000 oz  of silver standing for the Feb contract month. This is  huge for a non active delivery month in silver. 
We gained 54 contracts or an additional 270,000 oz will  stand for delivery.
At first day notice for the FEB/2016 silver contract month we initially had 515,000 oz standing for delivery.  By the conclusion of the delivery month we had 835,000 oz stand as some of the bankers required immediate silver inventory.
END
Volumes: for silver comex
Today the estimated volume was 69,810 which is excellent!!!
FRIDAY’S  confirmed volume was 114,338 contracts  which is out of this world.
To give you an idea of volume on Friday:  114338 contracts equates to 715 million oz or 102% of ANNUAL GLOBAL PRODUCTION EX CHINA EX RUSSIA
 
Total dealer silver:  30.759 million (close to record low inventory  
Total number of dealer and customer silver:   181.738million oz
The total open interest on silver is NOW moving away from  its all time high with the record of 224,540 being set AUGUST 3.2016.

end

And now the Gold inventory at the GLD

FEB 13/another deposit of 4.15 tonnes of gold into the GLD/Inventory rests at 836.73 tonnes

Feb 10/no changes at the GLD/Inventory rests at 832.58 tonnes

feb 9/no changes at the GLD/Inventory rests at 832.58 tonnes

Feb 8/another “deposit” of 5.63 tonnes of gold into the GLD/The addition is a paper addition/total inventory: 832.58 tonnes

Feb 7/another huge fake deposit of 8.30 tonnes of gold into the GLD/the addition is a paper addition and no doubt not physical/ total inventory: 826.95 tonnes

FEB 6/a huge deposit of 7.43 tonnes of gold into the GLD/Inventory rests at 818.65 tonnes

FEB 3/no change in gold inventory at the GLD/Inventory rests at 811.22 tonnes

Feb 2/another huge deposit of 1.48 tonnes/inventory rests at 811.22 tonnes

Feb 1/a huge “deposit” of 10.67 tonnes of gold into the GLD/Inventory rests at 809.74 tonnes.  this should stop GLD from sending gold to Shanghai.

JAN 31/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

jan 30/no change in gold inventory at the GLD/Inventory rests at 799.07 tonnes

Jan 27/no changes at the GLD/Inventory rests at 799.07 tonnes

Jan 26/no changes at the GLD/Inventory rests at 799.07 tonnes/

jan 25/another exactly the same withdrawal as yesterday: 50.4 tonnes and again this was used in the whacking of gold today/inventory rests at 799.07 tonnes

jan 24/a huge withdrawal of 5.04 tonnes and probably this was used today in the whacking of gold/inventory rests at 804.11 tonnes

Jan 23/a big change/this time a deposit of 1.19 tonnes of gold into the GLD/inventory rests at 809.15 tonnes.  The drainage of gold from the GLD to Shanghai has now stopped!

Jan 20/no changes in gold inventory a the GLD/Inventory rests at 807.96 tonnes

Jan 19/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

Jan 18/no changes in gold inventory at the GLD/Inventory rests at 807.96 tonnes

Jan 17/17/a deposit of 2.96 tonnes of gold/inventory at the GLD rests at 807.96 tonnes.  I guess there is no more gold inventory to sent to C+Shanghai

Jan 13/17/there were no changes in gold inventory at the GLD/Inventory rests at 805.00 tonnes

Jan 12/2017/no change in gold inventory at the GLD/Inventory rests at 805.00 tonnes

Jan 11/no change in gold inventory at the GLD/Inventory rests at 805.00 tonnes

JAN 10/no changes in gold inventory at the GLD/Inventory rests at 805.00 tonnes

JAN 9/A WITHDRAWAL OF 8.87 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 805.00 TONNES

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Feb 13/2017/ Inventory rests tonight at 836.73 tonnes
*IN LAST 88 TRADING DAYS: 113.08 TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 35 TRADING DAYS: A NET  12.13 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory
FEB 13/no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz
Feb 10/no change in silver inventory at the SLV/Inventory rests at 334.713 million oz
Feb 9/no changes in silver Inventory rests at 334.713 million oz
feb 8/No changes in inventory at the SLV/Inventory rests at 334.713 million oz
Feb 7/no change in inventory at the SLV/Inventory rests at 334.713 million oz
Feb 6/a we had no changes at the SLV/Inventory rests at 334.713 million oz
FEB3/ a tiny withdrawal of 136,000 oz to pay for fees etc/inventory rests at 334.713 million oz
Feb 2/no changes in silver inventory at the SLV/Inventory rests at 334.849 million oz
Feb 1/a withdrawal of 948,000 oz from the SLV/Inventory rests at 334.849 million oz
Jan 31.no change in inventory at the SLV/Inventory rests at 335.797 million oz
jan 30/no change in inventory at the SLV/Inventory rests at 335.797 million oz
Jan 27/we had a deposit of 758,000 oz into the SLV/Inventory rests at  335.797 million oz
Jan 26./ a huge withdrawal of 2.369 million oz from the SLV/Inventory rests at 335.039 million oz
Jan 25./another changes at the SLV/Inventory rests at 337.408 million oz
jan 24/ a withdrawal of 948,000 oz at the SLV/Inventory rests at 337.408 million oz
Jan 23/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
Jan 20/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
jan 19/no changes in silver inventory at the SLV/Inventory rests at 338.356 million oz
Jan 18/no changes in silver inventory/inventory rests at 338.356 million oz/
Jan 17/no change in silver inventory at the SLV/Inventory rests at 338.356 million oz/
Jan 13/2017/on changes in the SLV inventory/rests tonight at 338.356 million oz/
Jan 12.2017/ no changes in the SLV Inventory/ rests at 338.356 million oz
Jan 11/ A HUGE WITHDRAWAL F 2.843 MILLION OZ/INVENTORY RESTS AT 338.356 MILLION OZ/
JAN 10/no changes in inventory at the SLV/Inventory rests at 341.199 million oz
JAN 9/no changes in inventory at the SLV/Inventory rests at 341.199 million oz/
.
Feb 13.2017: Inventory 334.713  million oz
 end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.8 percent to NAV usa funds and Negative 7.9% to NAV for Cdn funds!!!! 
Percentage of fund in gold 59.9%
Percentage of fund in silver:39.9%
cash .+0.2%( feb 13/2017) 
.
2. Sprott silver fund (PSLV): Premium FALLS to -.26%!!!! NAV (Feb 13/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS TO – 0.050% to NAV  ( feb 13/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -0.26% /Sprott physical gold trust is back into NEGATIVE territory at -0.050%/Central fund of Canada’s is still in jail.
 

end

Major gold/silver trading/commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE

David McWilliams – Print Punts As French Election Could See Euro Break Up

David McWilliams, economist, writer and journalist, has warned that the coming French election may lead to the euro breaking up and that Ireland should have a ‘plan B’ and ‘print punts’ in order to be ready for the collapse of the “single currency.”

16-07-2015
David McWilliams at Ireland’s Banking Inquiry

McWilliams writes

This time last year, only a few of us were suggesting that Brexit was likely. The mainstream view was that it couldn’t possibly happen. But it did. And so too did Trump. When this column argued in June that “we should prepare for President Trump”, one or two local talk shows chuckled and sneered at the mere suggestion that such a creature could inhabit the White House. But he is there.

In December, the Italian electorate revolted against its government – again the view of ‘sensible’ people was that bolshie Italians would see reason. But they didn’t.

The next stop on this political whirlwind will be the Netherlands next month; and the big one, of course, is France. In less than 70 days, France goes to the polls and only an idiot would rule out Marine Le Pen’s chances.

It was the great French romantic poet and novelist Victor Hugo who declared:

“You can resist an invading army; you cannot resist an idea whose time has come.”

Do you get the feeling that we are living through epochal change, where one great idea is about to be replaced by another? Are we experiencing the irresistible force of an idea whose time has come?

The first thing to happen in the case of a Le Pen victory is that money will flood out of all non-German members of the euro. Italy will face a massive bond crisis, presaging default fears. Greece will be gone. Spain and Portugal will experience similar bond crises, and so too will Ireland.

The reason for this is that a bond is a 10- or 20-year IOU. For Ireland, the bond states that the Irish State will pay the investor back a certain amount in euro. But if the euro itself is breaking up from the centre, why would anyone bet on an English-speaking periphery country where ties to the UK and the US – two countries where the administrations are implacably opposed to the EU – are extremely strong?

The ECB will try to keep the entire enterprise together by buying all the bonds that scared investors are dumping. But liquidity in the non-German eurozone will dry up. There will be a run, not on the banks, but on the remaining countries of the euro. This flight of capital will be most violent in southern Europe, but it will be dramatic here too. In this case, there are two options.

The first is a lurch towards a deeper political union in the remaining euro countries around Germany. This will be done in an effort to staunch the financial haemorrhaging by stating clearly that Germany will backstop a smaller European Union of countries like the Netherlands, Belgium and Austria, without France.

Is Anglo/American Atlantic Ireland a likely candidate for that Teutonic League? Not really. And anyway, why would Germany bother with this when, after all, it is really interested in a single market of 350 million to sell its goods. German voters didn’t abandon the Deutsche Mark for the promise of some shrunken political union. Meanwhile, the Latin countries will protest their faith in the euro, but no one will believe them or at least no one will risk money and bet on them remaining within the euro.

The second option is that central banks get busy printing new currencies, just in case. With France already out of the euro and Britain out of the EU, the question would be, who’s next? What do we do in this case? Well, we’d certainly need to have new Punts printed.
You may think this scenario fanciful. I wish it was and ultimately it will be if Ms Le Pen doesn’t win.

But look at the odds. Today, Paddy Power is offering 9/4 on Ms Le Pen. Neither Brexit nor Donald Trump had such short odds this far out from polling day.

Granted, it might not happen, but it could easily. Ireland’s monetary future and our financial security is now down to the whims of angry French voters. Surely we should be prepared or have a plan, don’t you think?

Full article here

16-07-2015_1

McWilliams, who is among the best economics commentators from the only Anglophone nation in the euro – Ireland, has previously warned that the mismanagement of the euro currency has had disastruous consequences on the people in periphery EU nations. He correctly asserts that the mismanagement has been both “both laughable and terrifying”.

We share McWilliam’s lack of faith in the critically wounded and stumbling European Monetary Union and believe the ill conceived political and monetary project will soon unravel with obvious financial consequences in terms of currency devaluations and a wave of inflation.

Two articles we read over the weekend about how the French election could lead to the next global financial crises are well worth a read in this regard:

How a French revolution could trigger the next global financial crisis – Stepek (Money Week)

Economists: Le Pen Victory Would Lead To “Massive Sovereign Default”, Global Financial Chaos (ZeroHedge.com)

We advise subscribers and clients to start in earnest to make their own ‘Plan B’ – their investment and savings ‘Plan B’.

This should involve reducing exposure to large amounts of debt and risk assets, such as stocks and bonds. It also entails protecting against a collapse of the euro and other fiat currencies by diversifying internationally and owning gold and silver bullion coins and bars in the safest vaults in the safest jurisdictions in the world.

 

http://www.goldcore.com/us/gold-blog/david-mcwilliams-print-punts-french-election-see-euro-break/

END

 

We have been stating the following for years:  Germany did not get their gold back but got newly minted gold.

 

(courtesy Sputnik News)

Germany Gets the ‘Wrong Suitcase’ While Repatriating Its Gold Reserves From US

© Flickr/ Bullion Vault

BUSINESS

10:41 11.02.2017(updated 10:45 11.02.2017) Get short URL
237530573

Germany has completed repatriation of 300 tons of gold bars from the United States. According to Russian economist Vladimir Katasonov, initially the American side was not ready to give the bullion back, but finally came up with a plan.

Germany’s central bank has established the return of its gold reserves to domestic vaults by the end of 2017, three years ahead of schedule.Earlier this week, the Associated Press reported that the Bundesbank had completed relocation of 300 tons of gold from the Federal Reserve Bank of New York.

“The transfers were carried out without any disruptions or irregularities,” Carl-Ludwig Thiele, a member of the Bundesbank’s Executive Board, was quoted as saying by Bloomberg.

According to the bank, 111 tons of gold were repatriated from the US in 2013. It also returned 105 tons from Paris.

According to data from Marketwatch, by the end of 2016 47.9 percent of Germany’s gold reserves had already been stashed in vaults in Frankfurt, with 36.6 percent remaining in New York, 12.8 percent at the Bank of England in London and 2.7 percent at the Banque de France in Paris.

In January 2013 Berlin announced that it was planning to store half of Germany’s 3,378 tons of gold reserves in its own vaults, with the other half remaining in New York and London. According to the original plan, the Bundesbank would transfer 300 tons of the precious metal from New York and 374 tons from Paris to a facility in Frankfurt by 2020.Valentin Katasonov, a professor at the International Finance Department at the Moscow State Institute of International Relations (MGIMO), suggested that the US disposed of Germany’s gold bars at its own discretion.

“There are a lot of signs that the gold was not physically presented in the New York vaults when Germany called it back. Of course, the US began to return it to Germany but there is one interesting detail. When you leave your suitcase in the luggage storage you expect to get back the same suitcase. But Germany took the wrong ‘suitcase,'” Katasonov told Radio Sputnik.

According to the economist, the gold bars that Bundesbank repatriated have different labels. He suggested that the US might have replaced the German bullion with different gold bars bought from the market.Katasonov explained that the US managed to return the yellow metal thanks to favorable conditions in the precious metal market.

“I think there was a favorable environment in the market and the Americans managed to quickly buy the gold and give it back to Germany. They were not ready for this, but finally managed this replacement,” he concluded.

Have you heard the news? Sign up to our Telegram channel and we’ll keep you up to speed!

 

END

 

Egon Von Greyerz, who is one of the smartest guys on the planet with respect to physical gold locations and trading.  In this important commentary, Von Greyerz outlines the fraud in that bullion banks hypothecate the same bars over and over again.  China, Russia and India are the major buyers. When there is no more physical gold to give them, the game ends.

a must read…

(courtesy Von Greyerz/Kingworldnews)

Western central bank gold is running low, von Greyerz tells KWN

Section:

7:32p ET Sunday, February 12, 2017

Dear Friend of GATA and Gold:

Swiss gold fund manager Egon von Greyerz, in commentary at King World News, says he believes that Western central bank gold is running low after many years of plugging supply shortages and that this conclusion is supported by the U.S. Federal Reserve’s inability to return to the German Bundesbank the metal Germany thought it had deposited there. Von Greyerz’s commentary is posted at KWN here:

http://kingworldnews.com/alert-gold-is-rallying-because-western-central-…

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

 

END

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

 
 

1 Chinese yuan vs USA dollar/yuan STRONGER AT  6.8730(SMALL REVALUATION NORTHBOUND   /OFFSHORE YUAN NARROWS   TO 6.8720 / Shanghai bourse UP 20.14 POINTS OR .63%   / HANG SANG CLOSED UP 136.00 POINTS OR .58% 

2. Nikkei closed UP 80.22 POINTS OR 0.41%   /USA: YEN RISES TO 113.70

3. Europe stocks opened ALL IN THE GREEN      ( /USA dollar index FALLS TO  100.73/Euro UP to 1.0637

3b Japan 10 year bond yield: RISES TO    +.093%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.70/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  53.66  and Brent: 56.40

3f Gold DOWN/Yen DOWN

3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS  AND SELLING THE SHORT END

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 UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.337%/Italian 10 yr bond yield DOWN  to 2.236%    

3j Greek 10 year bond yield FALLS to  : 7.436%   

3k Gold at $1229.15/silver $17.94(8:15 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 22/100 in  roubles/dollar) 58.03-

3m oil into the 53 dollar handle for WTI and 56 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 SMALL   REVALUATION NORTHBOUND   from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.70 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0036 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0622 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/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT

3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +.337%

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 2.438% early this morning. Thirty year rate  at 3.033% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

HELICOPTER MONEY STILL ON THE TABLE FOR THE FUTURE/JAPANESE STIMULUS PLAN DISAPPOINTS

Global Stocks Rise, S&P Futures Make New Record Highs As “Trump Trade” Euphoria Returns

European and Asian stocks, S&P futures, bond yields, the dollar and commodity metals are rose, in some cases making new all time highs, lifted by the latest reemergence of the “Trump trades” as hopeful investors once again bet that the U.S. president’s tax reform plans will boost economic growth and corporate profits, despite another warning from Goldman that the president’s fiscal plan is about to be derailed.

Global stocks continued to rally ahead of this week’s key US CPI data, and ahead of speeches from a range of Federal Reserve officials including the all important Yellen testimony in Congress. The dollar extended gains after its first weekly advance since December, and Treasuries fell. Iron ore surged and copper climbed, buoying commodity producers.

Mrs Yellen will be busy on Valentine’s Day as the highlight this week is her semi-annual monetary policy testimony on Tuesday and Wednesday. There are probably too many unanswered questions about the new Trump administration’s fiscal plans and not enough additional hard data for her to deviate too much from her January 19th speech and the February 1st FOMC statement. Nevertheless the testimony is always a big event. Perhaps Trump’s plan to address a joint session of Congress on February 28th overshadows this especially as last week he discussed how he is going to announce a ‘phenomenal’ tax plan within 2-3 weeks. So even though we’re unlikely to hear much new from Yellen, DB believes she will use it as an opportunity to emphasise that the economy is reaching Congress’ legislated mandates of full employment and price stability. While Yellen will reiterate the “every meeting is live” mantra, she is not expected to strongly signal a March rate hike, although according to BofA it is possible she makes the March meeting “live.” Yellen will likely address Fed balance sheet strategy in broad terms as it does not appear that the FOMC has formed a consensus around the details.

Back to US stocks, where “the market is betting that Mr. Trump will succeed in cutting taxes and therefore we can have an increase in U.S. Corporate earnings without needing a significant shift in the economic environment itself,” James Bevan, chief investment officer at CCLA Investment Management Ltd., said in a Bloomberg TV interview. “For me the big issue is his announcement on taxation and then the amount of support he gets for the reduction in corporate tax.”

Continuing the US euphoria which has the S&P trading in record high territory, up 0.1% from Friday’s close, at 2.316, Asian stocks rallied to 18 month highs and European stocks rose for the fifth consecutive session on Monday, the longest winning stretch for two months. The Japanese yen was the biggest loser among DM currencies, as always happens when risk is bid. The weakness followed the Trump-Abe summit which comforted investors after ending smoothly without President Donald Trump talking tough on trade, currency and security issues. More importantly, Trump held off from repeating harsh rhetoric that accused Japan of taking advantage of U.S. security aid, stealing American jobs and “playing money markets.”

Those apparently cordial discussions drove the dollar as much as 0.9 percent higher against the yen to 114.17 yen. It last stood at 113.70 yen, up 0.4 percent on the day and extending its rebound from a 10-week low of 111.59 yen touched last week.  “The U.S. president has shown further signs of conformity in U.S. foreign policy during his weekend summit with Japan’s prime minister Abe,” Rabobank analysts said in a note on Monday.

“Markets have continued Friday’s upbeat theme,” said Kathleen Brooks, research director at City Index in London, quoted by Reuters noting that the VIX measure of U.S. stock market volatility closed last week below 11 for the third week in a row. The last time this happened was over a decade ago. “This is another sign that, for now, the Trump trade is still on. It also suggests that even with the controversy Trump has caused since he took office, financial markets are still willing to give him the benefit of the doubt,” Brooks said.

Comments from Trump on Thursday that he plans to announce what he said would be the most ambitious tax reform plan since the Reagan era in the next few weeks rekindled hopes for big tax cuts. Economic data from major economies has also been upbeat, including Friday’s Chinese trade figures, while U.S. corporate earnings have been also solid so far.

Europe’s benchmark index of leading 300 shares was up 0.3 percent at 1453 points, lifted by the mining and basic resources sectors. Basic resources rose 2.5 percent to their highest since August 2014. Germany’s DAX was up 0.4 percent, led by a 15 percent rise in drugmaker Stada after the company said it had received two offers for the acquisition of the company, one of which is private equity group Cinven Partners LLP.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.5 percent, with resource-related stocks again the driving force, while Japan’s Nikkei rose 0.4 percent. Figures on Monday showed that Japan’s economy grew for a fourth straight quarter in the final three months of last year as a weaker yen supported exports, but doubts over the sustainability of the recovery persisted.

U.S. futures pointed to a higher open on Wall Street. The S&P 500, Dow Jones Industrials and Nasdaq Composite all posted record closing highs on Friday.

The euro’s rise of 0.5 percent against the yen to 121.00 yen, helped lift the European currency slightly against the dollar. The euro was last up 0.1 percent at $1.0650, inching further away from Friday’s three-week low of $1.0608. The euro has been dogged by fears about a strong showing for French far-right leader Marine Le Pen ahead of a presidential election.

Ten-year U.S. Treasury yields rose 3 basis points to 2.44 percent.

In commodities, copper hit its highest levels since May 2015 after shipments were shut off from the world’s two biggest copper mines – due to a strike in Chile and an export’s ban by Indonesia. It last traded at $6,129 per tonne, up 0.7 percent on the day. On Friday it jumped more than 4 percent, its biggest one-day rise in almost four years. Oil prices dipped slightly after strong gains on Friday on reports that OPEC members delivered more than 90 percent of the output cuts they pledged in a landmark deal that took effect in January.

* * *

Bulletin Headline Summary From RanSquawk:

  • European equities enter the North American crossover, mostly higher with the exception of the FTSE 100
  • FX markets remain very quiet at the start of the week, with the JPY the only headline grabber after Tump and Abe failed to make any comments regarding JPY undervaluation
  • Looking ahead, today’s session sees a lack of notable highlights

Market Snapshot

  • S&P 500 futures up 0.1% to 2,316.00
  • MXAP up 0.4% to 144.47
  • MXAPJ up 0.5% to 463.18
  • Nikkei up 0.4% to 19,459.15
  • Topix up 0.5% to 1,554.20
  • Hang Seng Index up 0.6% to 23,710.98
  • Shanghai Composite up 0.6% to 3,216.84
  • Sensex up 0.09% to 28,358.73
  • Australia S&P/ASX 200 up 0.7% to 5,760.69
  • Kospi up 0.2% to 2,078.65
  • STOXX Europe 600 up 0.3% to 368.34
  • German 10Y yield rose 1.9 bps to 0.339%
  • Euro down 0.04% to 1.0639 per US$
  • Brent Futures down 0.8% to $56.23/bbl
  • Italian 10Y yield rose 9.7 bps to 2.271%
  • Spanish 10Y yield rose 1.8 bps to 1.72%
  • Brent Futures down 0.8% to $56.23/bbl
  • Gold spot down 0.3% to $1,229.51
  • U.S. Dollar Index down 0.03% to 100.77

Top Global News

  • Federal Reserve Chair Janet Yellen probably won’t drop a heavy hint on the timing of the next interest-rate increase when she speaks to Congress this week, but expect her to defend post-crisis banking rules the Trump administration has sworn to undo
  • From Tokyo to Beijing and London, the consensus is clear: few overseas investors want to step into the $13.9 trillion U.S. Treasury market right now.
  • Stada Arzneimittel AG said it has received two offers, one valuing the German drugmaker at about 3.5 billion euros ($3.7 billion), as suitors compete for access to German and Russian markets for over-the-counter and generic medicines.
  • Japan’s economy expanded for a fourth straight quarter at the end of 2016, with recovering global demand fueling export gains that offset soft domestic consumption
  • Billionaire Wang Jianlin’s Dalian Wanda Group Co. is examining potential purchases in the financial industry as the Chinese conglomerate seeks to bolster that business
  • Royal Bank of Scotland Group Plc is preparing to cut more than 1 billion pounds ($1.25 billion) of annual operating costs by eliminating jobs and closing branches as it seeks to bolster profitability
  • China Calls for Restraint on North Korea as UN Prepares to Meet
  • Amazon Said in Early Talks to Develop New Paid Channel: NY Post
  • Samsung to Supply 5t Won of Display Panels for Iphone 8: Maeil
  • Lego Superheroes Triumph Over S&M Lovers at U.S. Box Office
  • Toshiba’s Nuclear Mess Winds Back to a Louisiana Swamp

* * *

Asia equity markets rose on the momentum of another record Wall Street high where the major US indices printed fresh all-time highs amid a continuation of the reflationary trade and strength across commodities. This saw similar outperformance in materials and energy names in the ASX 200 (+0.7%) following a near-5% rally in copper and advances in WTI crude which briefly broke above USD 54/bbl last week. Nikkei 225 (+0.4%) was underpinned by a weaker currency, although gains were capped following a miss on Q4 GDP, while KOSPI (+0.1%) somewhat lagged following the geopolitical concerns in the Korean peninsula after North Korea conducted a missile test. Hang Seng (+0.5%) and Shanghai Comp. (+0.6%) completed the positive tone in the region following several encouraging results updates and as participants welcomed the PBoC’s resumption of liquidity injections for the first time in over a week. 10yr JGBs were marginally lower as demand for the safe-haven was dampened amid heightened risk appetite and the BoJ’s absence in the market, while the curve flattened amid outperformance in the super-long end. The PBoC injected CNY 20bIn via 7-day reverse repos, CNY 30bIn in 14-day reverse repos and CNY 50bIn in 28-day reverse repos, the first time it has done so after a six day halt

Top Asian News

  • China Central Bank Resumes Reverse Repo Sales After Six-Day Halt
  • Japan’s GDP Highlights the Export Risks That Abe Hopes to Curb
  • Li’s PCCW to Sell $1.1 Billion Stake in HKT Telecom Unit
  • China Stirring Up Monetary Alphabet Soup Boosts Volatility
  • Larsen Ties up With MBDA for Missile Manufacturing in India
  • Sinochem Said in Early Talks to Buy Noble Group Stake: Reuters
  • Tide Turns Against Offshore Yuan as Bearish Bets Pick Up Again
  • Samsung’s Jay Y. Lee Questioned Again by South Korea Prosecutor
  • Asian Stocks Hit 19-Month High Amid Metals Rally, Abe-Trump Meet

European markets likewise are mostly in the green as FTSE 100 trades flat. The only noticeable laggard is the Swiss SMI which underperforms due to voters looking for tax reforms indicating they feel the country’s largest corporates are not taking their fair share of the tax burden. In terms of sectors, materials lead the way again as copper prices continue push higher and telecoms underperform after Deutsche Telekom issue a write-down on its BT shareholding. The peripheral bonds play catch up this morning with 10 PGB’s outpacing their peers eyeing the psychological resistance level of 4.20%. Elsewhere, in terms of fixed income events this morning, the main highlight has been the Italian 5-part offering which saw the Italian Tesoro hit the mid-point of their targeted range and led Italian paper to be bought up once the auction had been absorbed by the market.

Top European News

  • EU Raises 2017 Euro-Area GDP Growth Forecast to 1.6% From 1.5%
  • Surging Iron Ore Won’t ‘Fall Off a Cliff,’ Says Rio Tinto
  • Swiss Must Draw Up Corporate Tax Plan B to Stay Attractive
  • European Miners Extend Gains as Iron-Ore, Copper Prices Advance
  • Unipol Still Favored to UnipolSai at Banca IMI, Kepler Cheuvreux
  • European Banks’ Best Payout Candidates Include DNB: JPMorgan
  • RBS Said to Plan More Than $1 Billion of Expense Reductions

Currency markets remain very quiet at the start of the week, with the JPY the only headline grabber after Tump and Abe failed to make any comments regarding JPY undervaluation and any trade agreements. EUR and GBP also gained some ground against the USD this morning after heavy losses seen last week. In regards to GBP/USD the only real resistance is seen at 1.2550. The Bloomberg Dollar Index added 0.1 percent after last week’s 0.7 percent advance.  The yen slid the most among major currencies, weakening 0.5 percent to 113.75 per dollar, after its biggest weekly decline since mid-December. The euro slipped 0.1 percent to $1.0635.

In commodities, copper continues to climb as there appears to be no end to the strikes at the world’s largest copper mine. Prices continued to accelerate past the 2.800 level after breaking the key 2.750 last week. Iron ore futures were up 4.9 percent. The raw material used to make steel is trading at the highest in more than two years, climbing 16 percent over the past five sessions. WTI and Brent crude oil have sold off amid no real fundamental catalyst although today we are due to see the latest monthly OPEC report (1205GMT). Gold speculators increased their net long positions by 3.660 contracts in the latest COT report data and this come in the wake of a strong rally last week.

It’s a very quiet start to the week today with nothing of particular note due out aside from CPI revisions in the US.

US Event Calendar

  • Revisions: Consumer Price Index

DB’s Jim Reid concludes the overnight wrap

Mrs Yellen will be busy on Valentine’s Day as the highlight this week is her semi-annual monetary policy testimony on Tuesday and Wednesday. There are probably too many unanswered questions about the new Trump administration’s fiscal plans and not enough additional hard data for her to deviate too much from her January 19th speech and the February 1st FOMC statement. Nevertheless the testimony is always a big event. Perhaps Trump’s plan to address a joint session of Congress on February 28th overshadows this especially as last week he discussed how he is going to announce a ‘phenomenal’ tax plan within 2-3 weeks. So even though we’re unlikely to hear much new from Yellen, DB’s Joe LaVorgna believe she will use it as an opportunity to emphasise that the economy is reaching Congress’ legislated mandates of full employment and price stability. He thinks that while Yellen will reiterate the “every meeting is live” mantra, he does not expect her to strongly signal a March rate hike. Joe also thinks that Yellen will likely address Fed balance sheet strategy in broad terms as it does not appear that the FOMC has formed a consensus around the details.

In terms of weekend news it was interesting that there was another quasi antiestablishment vote which again defied opinion polls as Switzerland voted to reject a corporate tax reform that the Government and big businesses had backed. Polls had suggested an even split amongst the electorate but in the end the reforms were rejected by a 59/41 split. It does make you wonder how accurate the recent polls are in the French elections which show that Le Pen is between 20% and 30% behind Fillon and Macron in a potential second round run-off (based on the latest OpinionWay poll from 7-9th February).

Talking of France, Friday saw a return of OAT underperformance with 10y yields finishing 6.5bps higher at 1.044%. That compares to a small 0.7bp move higher for similar maturity Bunds although the spread between the two at 73bps is just off the recent high mark of 77bps. Over the course of the week OAT’s finished 2.6bps lower in yield which was actually the first time yields have closed lower since the second week of January. Still, that was a reasonable underperformance versus Bunds with the latter 9.3bps lower over the week, closing at 0.318%. In fact, aside from Greece, there was also a decent reversal for other periphery bonds too on Friday. 10y yields in Italy (+9.8bps), Spain (+7.5bps) and Portugal (+6.9bps) all closed sharply higher. It was a similar story in equities too with the Stoxx 600 closing +0.16% but IBEX and FTSE MIB finishing -0.64% and -0.45% respectively.

It was a different story for Greek bonds on though where 2y and 10y yields finished 131bps and 46bps lower respectively. That appeared to reflect the various news articles doing the rounds suggesting that creditors were said to be preparing a proposal for a bailout deal but still we sit here this morning again in familiar territory with seemingly little new material progress made over the weekend. Indeed PM Tsipras accused the IMF and Germany of “playing with fire” over the weekend at the expense of the Greek people while also remaining confident that the second review will end positively and debt relief for Greece is inevitable. European Commission President Juncker did however warn that bailout talks are “on shaky ground in the sense that we don’t see how the IMF could manage this problem”. Regardless of whether or not the creditors are coming close to an agreement on a list of fiscal demands, the ball will still come back to the Greek side of the court. The next key date is the February 20th Eurogroup meeting but should Greece still refuse to any of the measures put forward, it’s likely that talks get delayed to Q2 with the ultimate deadline realistically being the July bond maturities Greece faces.

With regards to other markets on Friday it was a decent end to the week for US equities with the S&P 500 (+0.36%) and Dow (+0.48%) both reaching new record highs. A big part of that was the rally for commodities after China’s decent trade data and the comments from Trump stating that he is willing to honour President Xi’s “one China” policy. A rally for metals stood out in particular with Copper (+4.60%), Iron Ore (+3.32%), Aluminium (+1.30%), Zinc (+3.32%) and Gold (+0.43%) all finishing the week on a high. WTI Oil (+1.62%) also closed up back near $54/bbl and firmed for the third consecutive day. Interestingly that is despite the 8th consecutive daily gain for the Greenback (+0.15%) culminating in the Dollar index having its first positive week since the first week of January. This morning in Asia we’ve seen the positive sentiment continue for the most part with the Nikkei (+0.61%), Hang Seng (+0.63%), Shanghai Comp (+0.63%) and ASX (+0.65%) all kicking off the week on the front foot. The Yen has weakened -0.60% after Japan’s Q4 GDP came in a little short of market expectations at +0.2% qoq (vs. +0.3% expected). Meanwhile the Dollar has continued to track higher after Fed Vice-Chair Fischer said that “we’re very nearly there” with regards to the Fed’s dual mandate, although he did also signal that there is some “significant uncertainty” over what to expect from Trump’s proposed fiscal policy. Speaking of the Fed, it’s worth also noting that Governor Tarullo announced on Friday that he will step down from his role in charge of financial regulation. That strips the Fed of one of its most dovish members and perhaps further strengthens Trump’s hand to reshape financial regulation.

Wrapping up the rest Friday’s session. With regards to the data the preliminary February headline University of Michigan consumer sentiment reading was reported as falling more than expected (95.7 vs. 98.0 expected; 98.5 previously) falling -0.9% mom in December (vs. -0.7% expected) while the in the UK production rose a much better than expected +1.1% mom (vs. +0.2% expected). Manufacturing production (+2.1 % mom vs. +0.5% expected) was also significantly better than expected in the UK.

To the week ahead now. It’s a very quiet start to the week today with nothing of particular note due out aside from CPI revisions in the US this afternoon. Tomorrow we kick off in China with the January CPI and PPI prints before we then get industrial production data in Japan. During the European session we’ll get Q4 GDP data in Germany as well as the final CPI revisions for January and the February ZEW report. In the UK the January CPI/PPI/RPI data is out, while the other data due out is Euro area Q4 GDP and industrial production. Over in the US we’ll get the NFIB small business optimism survey as well as January PPI. It looks set to be a busy day on Wednesday too. In Europe we’ll get the December and January labour market data in the UK, as well as the December trade balance for the Euro area. Over in the US the highlights are the January CPI report and January retail sales data. Empire manufacturing, business inventories, industrial and manufacturing production, and the NAHB housing market index reading will also be released. Things quieten down again on Thursday with just unemployment data in France and housing starts, building permits, Philly Fed business outlook and initial jobless claims in the US. We end the week in Europe on Friday with retail sales data in the UK. In the US the only data due out is the Conference Board’s leading index for January.

As discussed at the top, arguably the biggest event this week is reserved for Tuesday when Fed-Chair Yellen is due to deliver her semi-annual congressional testimony before the Senate. She will then speak before the House Financial Services Committee on Wednesday. Away from that, the Fed’s Lacker, Lockhart and Kaplan also speak on Tuesday, while Rosengren and Harker speak on Wednesday. The ECB’s Coeure speaks on Thursday, which is also the same day the ECB minutes will be released. Earnings wise we’ve got 56 S&P 500 companies reporting accounting for 8% of the index market cap. In Europe we’re due to hear from 56 Stoxx 600 companies accounting for 10% of the market cap. Away from all that President Trump is also due to meet with Canadian PM Trudeau today and Israeli PM Netanyahu on Wednesday.

end

i)Late  SUNDAY night/MONDAY morning: Shanghai closed UP 20.14 POINTS OR .63%/ /Hang Sang CLOSED UP 136.00 POINTS OR .58% . The Nikkei closed UP 80.22 POINTS OR 0.41% /Australia’s all ordinaires  CLOSED UP 0.72%/Chinese yuan (ONSHORE) closed UP at 6.8730/Oil FELL to 53.66 dollars per barrel for WTI and 56.40 for Brent. Stocks in Europe ALL IN THE GREEN. Offshore yuan trades  6.8720 yuan to the dollar vs 6.8730  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE NARROWS TO ZERO AS POBC ATTEMPTS TO STOP USA DOLLARS FROM LEAVING CHINA’S SHORES. ONSHORE YUAN STRONGER AS IS OFFSHORE YUAN COUPLED WITH THE WEAKER DOLLAR

3a)THAILAND/SOUTH KOREA/:

North Korea launches a medium range ballistic missile

(courtesy zero hedge)

North Korea Launches Ballistic MissileTest; Trump Briefed

With the news cycle clearly far less interested in Trump’s golf game or Abe’s handicap, just before 8am local time (6pm ET), North Korea decided to provide CNN with some “exciting” news when it fired a ballistic missile into the sea off its east coast early on Sunday local time, South Korea’s military said, in what is clearly the latest test of Trump’s resolve to retaliate to North Korean provocations.

This was the first missile launch by North Korea since Donald Trump – who has repeatedly threatened of taking retaliatory measures against such an act – took office. The launch also comes just one day after California test-fired a Minuteman ICBM from California.

Cited by Reuters, a US official said that while the U.S. military had detected the missile launch and was assessing it, it was probably not an intercontinental ballistic missile.

The missile was launched from an area named Panghyon in North Korea’s western region and flew about 500 kilometers (300 miles) before falling into the sea, the South’s Office of the Joint Chiefs of Staff said in statements. “Our assessment is that it is part of a show of force in response to the new U.S. administration’s hardline position against the North,” the office said.

military says missile flew about 500km and fell into sea.

The South’s military said Seoul and Washington were analyzing the details of the launch. Yonhap News Agency said the South Korean military is assessing the launch to confirm whether it was a Musudan intermediate-range ballistic missile, which has a designed flight range of 3,000 kilometers (1,800 miles). The U.S. military also said it had detected a missile test launch by the North and was assessing it, according to a U.S. defense official in Washington.

Japan’s government said it had asked the UN to issue “a strong message” against North Korea for the latest provocation.

Japan gov’t says it’s asking to issue “a strong message” against for latest provocation.

The North tried to launch a Musudan eight times last year during the Obama presidency, but most attempts failed. One launch that sent a missile 400 km (250 miles), more than half the distance to Japan, was considered a success by officials and experts in the South and the United States.

Sunday’s launch comes a day after Trump held a summit meeting with Japanese Prime Minister Shinzo Abe and said he agreed to work to ensure strong defense against North Korea’s threat. South Korea’s presidential Blue House said a National Security Council meeting was called and chaired by President Park Geun-hye’s top national security advisor.

One month ago, during his New Year speech, North Korean leader Kim Jong Un said that the country was close to test-launching an intercontinental ballistic missile and state media said such a launch could come at any time.

At the time, Kim’s comments prompted a vow of an “overwhelming” response from U.S. Defense Secretary James Mattis. North Korea conducted two nuclear tests and a number of missile-related tests at an unprecedented rate since early last year and was seen by experts and officials to be making progress in its weapons capabilities.

If indeed today’s launch is a “show of force” in response to the US hardline position, the entire world will be closely watching to see if Trump is about to fold again as he did on Friday, when he was called a “paper tiger” by China’s media after reversing his position on the “One China” policy, and agreeing that he would not challenge China’s legacy status with Taiwan.

According to the press, the White House – and president Trump at Mar-A-Lago – has been briefed on the launch.

We expect either a very angry tweet in response shortly, or a tactical nuke to land somewhere in the middle of Pyongyang any minute now.

 

 

end

b) REPORT ON JAPAN

Interesting:  Japan’s love for yield has now dissipated as they are dumping USA securities. Probably for two reasons:

.1 yields are rising due to Fed tightening

2 the debt ceiling fiasco will be upon us commencing March 15.2017

(courtesy zero hedge)

 

“It Was A Deer In Headlights Moment”: Japan Dumps Most US Treasuries Since May 2013

With the December monthly TIC data due out this week, bond traders will be closely watching if the selling of US Treasuries by foreign accounts, and especially central banks, which as we have repeatedly shown for the past several months has hit record levels…

 

… will persist, with a focus on whether China’s near record selling of US paper will persist.

However, this time the surprise may not be China, but its nemesis across the East China Sea, Japan.

As UBS notes, Japanese investor appetite for developed market overseas bonds, and especially US, was a big story during the first seven months of 2016. However, since then interest has waned. Weekly flow data underscores how Japanese investors sold ~¥4 trillion of overseas bonds from the time of the US presidential election to the end of Jan-17. Last week the Japanese government released more granular data for the month of December which highlights a number of notable developments.

Most importantly, while December saw the largest overall net selling flow of overseas bonds since Jun-15, this was entirely due to offloading of US Treasuries – other developed bond markets on aggregate actually saw modest net purchases. Indeed, while Japanese investors bought German and Australian paper, US Treasuries were sold to the tune of ~¥2.4 trillion (~$21bn) in December, the largest net selling flow since May-13.

While last month (i.e. data for November) there were several factors that supported a rebound in Japanese investor demand for overseas debt (e.g., calmer market conditions, higher overseas FX-hedged yields, and supportive seasonality in Q1, a Trump honeymoon that was still in its early stages), so far there is little evidence of any bounce back in December, when yields surged across the curve, spurring widespread sales. Reuters and Bloomberg interviews with Japanese investors suggest that US political concerns and the potential for further Fed hikes are weighing on demand. Still, the potential for reallocation flows should not be overlooked, as highlighted by today’s data.

The selling has been so acute that after ignoring it for months (we first noted the record sales last September), the relentless selling has attracted the attention of Bloomberg which writes that “the consensus is clear: few overseas investors want to step into the $13.9 trillion U.S. Treasury market right now. Whether it’s the prospect of bigger deficits and more inflation under President Donald Trump or higher interest rates from the Federal Reserve, the world’s safest debt market seems less of a sure thing — particularly after the upswing in yields since November. And then there is Trump’s penchant for saber rattling, which has made staying home that much easier.”

[A]ny consistent drop-off in foreign demand could have lasting consequences on America’s ability to finance itself cheaply, particularly in light of Trump’s ambitious plans to boost infrastructure spending, cut taxes and put “America First.” The president has singled out Japan and China, the two biggest overseas creditors, as well as Germany, for devaluing their currencies to gain an unfair advantage in trade.

Whether Bloomberg is correct – especially after a brief rebound in the amount of Treasurys held in custody at the Fed in December – remains to be seen, some of the comments Bloomberg cites are worth nothing, the first of which comes from a bond strategist at Japan’s Mitsubishi UFJ:

“It may be more difficult than usual for Japanese to invest in Treasuries and the dollar this year because of political uncertainty,” said Kenta Inoue, chief strategist for overseas bond investments at Mitsubishi UFJ Morgan Stanley Securities in Tokyo. “Treasury yields may rise rapidly again in the near future, which will continue to discourage them from buying aggressively.”

Of course, the higher the yields go, the greater the implicit demand for yields should be, however in a world where everything is one giant momentum trade, it may take a while before it emerges.

Which is for now, other bond strategists agree with Inoue: “For now, risk-averse bond buyers like Daiwa SB Investments’s Shinji Kunibe are cutting back on Treasuries.”

Like many institutional money managers that invest abroad, Kunibe, Daiwa SB’s head of fixed-income management, likes to hedge away the risk of the dollar’s ups and downs. And right now, it makes sense. After accounting for hedging costs, 10-year Treasuries yield about 0.9 percent, roughly 10 times the return offered by Japanese government bonds. Going back to the 1980s, Treasuries have rarely enjoyed such a big edge over JGBs. However, he sees U.S. yields rising further as Trump pursues expansionary fiscal policies and takes a protectionist stance on trade. “Yields are going to be in an uptrend,” he said.

As Bloomberg puts it, investors like Kunibe can ill-afford more losses. Japanese demand for US paper first slid into the late summer as hedging costs – mostly in the form of swap spreads – rose…

 

…  last quarter, Japanese investors who hedged all their dollar exposure in Treasuries suffered a 4.7 percent loss, the biggest in at least three decades, Bloomberg reports citing data from Bank of America showed. The same thing happened in Europe, where record currency-hedged losses also stung euro-based buyers.

It was a deer in the headlights moment,” said Zoltan Pozsar, a research analyst at Credit Suisse.

While the yield pick up in recent weeks has made hedged positions profitable relative to JGBs once again, the Japanese are not rushing in.

Combined with the unpredictability of Trump’s tweet storms, interest-rate increases in the U.S. could further sap overseas demand. Mark Dowding, who helps oversees about $50 billion as co-head of investment-grade debt at BlueBay Asset Management in London, says the firm has already moved to insulate itself from further losses due to higher rates.

What’s more, central bankers in Japan and Europe are still experimenting with monetary policies that may benefit bond investors locally.

Right now, it’s just “much easier to stay home than go abroad,” said Shyam Rajan, Bank of America’s head of U.S. rates strategy.

Unless, of course, the BOJ, which has been experimenting with “curve control”, and nearly lost it  last week, fails to maintain the long end at the desired range. Once that happens, and global bond curves become unhinged leading to a worldwide dumping of duration, it may be time to head for the exits.

 

end

Japan/China/Trump /USA)

 

Trump backs Japan over the disputed islands in the South China Seas

(courtesy zero hedge)

China “Seriously Concerned And Opposed” After Trump Backs Japan Over Disputed East China Sea Islands

On Friday, when President Trump confirmed that the US alliance with Japan covers the contested “Senkaku” islands located in the East China Sea, and which prompted a diplomatic scandal between China and Japan in 2013, we predicted that China would not be happy.

ABE: CONFIRMED WITH PRES. TRUMP THAT ALLIANCE COVERS SENKAKUS
China will not be happy

Additionally, in a joint Japanese-U.S. statement after the weekend meeting in the United States said the two leaders affirmed that Article 5 of the U.S.-Japan security treaty covered the islands, known as the Senkaku in Japan and the Diaoyu in China.

Sure enough, on Monday our prediction was confirmed after China’s Foreign Ministry expressed displeasure after Japan got continued U.S. backing for its dispute with Beijing over islands in the East China Sea during a meeting between U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe, Reuters reported.

Chinese Foreign Ministry spokesman Geng Shuang said China was “seriously concerned and resolutely opposed”, adding that the islands had been China’s inherent territory since ancient times.

“No matter what anyone says or does, it cannot change the fact that the Diaoyu Islands belong to China, and cannot shake China’s resolve and determination to protect national sovereignty and territory,” Geng told a daily news briefing in Beijing.

The United States and Japan should watch what they say and do and stop making the wrong comments to avoid complicating the issue and affecting regional peace and stability, he added.

And so, just as Trump rebuilds the “One China” bridge he burned in December after his discussions with Taiwan, he appears to have started burning another one as he sides, at least for the time being, with Japan on a topic that is just as sensitive to China as the Taiwan matter: its territorial claims in both the South and East China Sea. We expect angry op-eds in the Global Times, China’s equivalent of Trump’s twitter account, to pop up momentarily.

c) REPORT ON CHINA

Last night: Chinese bonds rise, stocks rise along with commodities.  The yuan falls a bit.  For the first time in 7 days, China unleashed a 100 billion yuan repo and that reversed the tightening orchestrated by the POBC .

(courtesy zero hedge)

China Bonds, Stocks, Commodities Extend Gains As Yuan Tumbles To One-Month Lows After Renewed Liquidity Injection

As China got back to work after Golden Week, it appeared a renewed exuberance appeared in every orifice of liquidity provision (even as PBOC sucked up excess for 6 straight days). Stocks are up, bonds are up, and commodities are soaring (all as Yuan tumbles) and tonight authorities unleashed 100bn reverse-repo (for the first time in 7 days) as leverage seems nothing to worry about again yields drop and asset prices rise.

As Bloomberg reports, China’s central bank restarted the use of an instrument that adds cash to the financial system, helping ease liquidity concerns before $153 billion of funds come due this week.

The monetary authority sold a total 100 billion yuan ($14.5 billion) of reverse-repurchase agreements, the first auction after a six-day pause, a statement posted on its website showed. While the open-market operations resulted in a net withdrawal of 90 billion yuan because of maturing contracts, the resumption signals that policy makers don’t want a sudden tightening of money supply, according to Bank of Tokyo-Mitsubishi UFJ (China) Ltd. The People’s Bank of China last week allowed 625 billion yuan of reverse repos to mature, mopping up cash after adding record funds in the days before the week-long Lunar New Year holidays. Some 900 billion yuan of the contracts are set to mature this week, as well as 151.5 billion yuan of loans under the Medium-term Lending Facility, data compiled by Bloomberg show. That adds up to 1.05 trillion yuan, or $153 billion.

“The PBOC restarted the use of reverse repos to stabilize market sentiment because large maturities are on the way,” said Li Liuyang, a Shanghai-based market analyst at Bank of Tokyo-Mitsubishi UFJ (China).

“The net result will probably continue to be a withdrawal this week, but the pace will be controlled to avoid any crunch. We also expect it to conduct MLF, given the maturities.”

And Lo and Behold – China soars…so much for all that worry about Trump trade wars!!

Stocks are up…

Bonds are up…

And every industrial commodity is exploding higher…

And all of this as the Yuan tumbles in a Trump-infuriating way… dropping to 5-week lows

4. EUROPEAN AFFAIRS

France

Why is Europe frightened of a Le Pen victory? Because 80% of France’s debt will be denominated in Francs or roughly 1.7 trillion dollars.  That would without a question bankrupt the EU

(courtesy zero hedge)

 

 

Economists: Le Pen Victory Would Lead To “Massive Sovereign Default”, Global Financial Chaos

With two months left until the French election, analysts and political experts find themselves in a quandary: on one hand, political polls show that while National Front’s Marine Le Pen will likely win the first round, she is virtually assured a loss in the runoff round against either Fillon, or more recently Macron, having between 20 and 30% of the vote; on the other, all those same analysts and political experts were dead wrong with their forecasts about both Brexit and Trump, and are desperate to avoid a trifecta as being wrong 3 out of 3 just may be result in losing one’s job.

Meanwhile, markets are taking Le Pen’s rise in the polls in stride, and French spreads over Germany are moving in lockstep with Le Pen’s rising odds. In fact, as noted earlier in the week, French debt is now the riskiest it has been relative to German in four years.

Why are markets spooked?

As per her recently released manifesto, Le Pen has promised to unilaterally take France out of the Euro within six months, sparking concerns over what might happen then. The answer comes from the National Front itself, which overnight revealed its plans to the FT, suggesting that €1.7 trillion of French public debt would be redenominated into francs if the far-right National Front party gets into power.

Call it Yanis Varoufakis’ dream scenario.

As the FT reports, “in comments that are likely to amplify fears about the impact of a FN victory on the global financial system, several senior-ranking party members have told the Financial Times that in  power the far-right would seek to redenominate about 80 per cent of the France’s €2.1tn public debt — the part that was issued under French law — in a new national currency. Confirming that Le Pen’s party had extensively studied the topic, David Rachline, FN’s head of strategy, said in an interview that only about 20% of France’s total public debt “falls under international law [and would stay denominated in euros] . . . but for the rest we will have the right to change the currency”.

So with the green line in the chart above continuing to rise, a potential currency redenomination and “Frexit” on the table, and with memories of “impossible” events like Brexit and Trump quite fresh in everyone’s memory, the time has come to bring out the big scaremongering guns, starting with the rating agencies, and sure enough they did not disappoint, because as quoted by the FT, an event envisioned by Le Pen would, according to rating agencies, be likely to amount to the largest sovereign default on record, nearly 10 times larger than the €200bn Greek debt restructuring in 2012, threatening chaos to the world financial system on top of the collapse of the single currency.

Moritz Kraemer, S&P’s head of sovereign ratings, said in a statement that this would be a default. “There is no ambiguity here . . . If an issuer does not adhere to the contractual obligations to its creditors, including payment in the currency stipulated, [we] would declare a default.”

Alastair Wilson, head of sovereign ratings at Moody’s, said they would consider any country leaving the euro to be in default if changing the currency of its debt caused investors to lose out financially relative to the original promise. “The test for us is: do we think investors will be able to get back the value they put in, when they expected to get it back,” he said.

The FN’s Rachline said French debt would be redenominated on a “one franc to one euro” basis. But he added that reintroducing a national currency that could fall in value against the rump euro would lower France’s total debt burden. “[Having our own currency] will allow us to do a competitive devaluation,” he said.

Again, this was precisely the scenario contemplated by Vaourfakis, until he realized that the ECB has full control over the Greek banking system and the population’s euro-denominated deposits: there simply was not enough cash for the Greek people if everyone decided to withdraw funds, which is what ultimately killed the Varoufakis revolution.  And to think that fractional reserve banking would have been understood by now.

It is unclear if Le Pen, or the FN, has planned for this contingency yet: it would be silly not too less than two years after the Greek 2015 fiasco. Nonetheless, the process is distinctly possible. Lawyers contacted by the FT said the currency redenomination for the bonds governed by French law would be theoretically possible because any nation can change its own laws. This means that bondholders would struggle to pursue France in the courts in the same way they pursued Argentina after its default in 2001.

Matthew Hartley, a debt capital markets partner at Allen & Overy, said: “Because the bonds are governed by French law, they just have to change French law to change the terms of the bonds.

Meanwhile, just in case rating agencies were not sufficiently convincing, mainstream economists – because their reputation is obviously much higher – also chimed in, arguing that France leaving the euro would cause chaos in Europe. Benoît Cœuré, executive board member at the European Central Bank, this week said that leaving the euro would lead to “impoverishment”, higher interest rates, a heavier debt burden, unemployment and inflation.

The European Central Banker will likely be even more angry when he learned that Le Pen plans on doing what the Developed World’s central bank would love to do, but are – for the time being – stopped: deploy helicopter money. The FN has said that, following a shift back to the French franc, rules governing the country’s central bank would be changed to allow it to directly finance the French state, for example servicing French welfare payments and government debts.

Leaving the euro is just one pillar of the FN’s economic strategy, which is focused on making French industry more competitive, taking a page right out of the Trump playbook. However, since France does not share the US’ exorbitant privilege of the global’s reserve currency and world’s strongest army, France – unable to bully its trading partners, hopes that a fall in the value of the new national currency will boost exports.

The second thrust of the party’s economic policy is to use “intelligent protectionism” to allow them to defend French industries — something that they are currently prevented from doing by EU rules, says the FN.

One senior official said it was a return to the politics of postwar head of state Charles de Gaulle, who kept a tight hand on the French economy. “We are not extreme, we are Gaullists,” said the person, who did not want to be named.

This dirigiste strategy would see them imposing trade barriers on any “unfair competition” from abroad, according to party officials. There would also be a 3 per cent import tax on foreign goods that would be given as tax breaks to the poorest.

For now, it is unclear whether Le Pen will win or not: there are two more months to go, and even with her rise in the polls against scandal-ridden opponents, one can debate if she has enough support to win. But no matter the outcome, Mikael Sala, the head of Croissance Bleu Marine, a think-tank supporting the FN, summarized it perfectly when he shrugged off concerns that the redenomination of the currency would be considered a default by the rating agencies. “We will be elected by the French people — it is not our job to please [the rating agency] S&P,” he said. “They do not have much credibility after the financial crisis anyway.”

 

end

GREECE

Tsipras warns the IMF and Schauble to stop playing with fire and help Greece with their huge debt bomb. Greece has a huge 6 billion euro debt to pay by early July and that date will the the line in the sand. Greece always waits until the last minute and they have nothing to lose if they wait.  If they get no debt relief, they leave the Euro and basically bankrupt the EU.  However they will impoverish their senior citizens as the pensions become basically nil.

 

(courtesy zerohedge)

 

Tsipras Warns IMF, Schauble To “Stop Playing With Fire” Over Greek Debt

One day after Greek 2Y bond yields tumbled following press reports that for the first time in the latest Greek mini-crisis, the IMF and Eurozone creditors finally agreed on a “common stance” regarding what the Greek fiscal surplus and debt profile would look like, despite talks between Greece and its creditors ending in Brussels with no breakthrough, Greek PM Alexis Tsipras on Saturday warned the IMF and German Finance Minister Wolfgang Schaeuble to “stop playing with fire” in handling his country’s debt.

Nonetheless, striking a positive tone, Tsipras opened a meeting of his Syriza party by saying he was confident a solution would be found, and urged a change of course from the IMF. “We expect as soon as possible that the IMF revise its forecast so that discussions can continue at the technical level”, AFP reported, suggesting that contrary to initial reports, the bid-ask between the Troika and Greece still remains irreconcilable .

Tsipras also attacked Greek nemesis Wolfgang Schauble – who earlier in the week ruled out a Greek debt cut, saying “for that Greece would have to exit the currency area”- and called for German Chancellor Angela Merkel to “encourage her finance minister to end his permanent aggressiveness” towards Greece.

As documented before, ongoing feuding with the IMF has raised fears of a new debt crisis. Greece, whose economic collapse is now worse than the US Great Depression – remains embroiled in a row with its eurozone paymasters and the IMF over debt relief and budget targets that has rattled markets and revived talk of its place in the euro. 

A silver lining emerged on Friday, when Eurogroup chief Jeroen Dijsselbloem said progress had been made in the Brussels talks with Greek Finance Minister Euclid Tsakalotos and other EU and IMF officials. But he provided few details.“Today the Greek minister of Finance, the institutions (European Commission, ECB, ESM and IMF) and I had a constructive meeting on the state of play of the second review,” Dijsselbloem said in statement sent by text message to Bloomberg. “There is a clear understanding that a timely finalization of the second review is in everybody’s interest” and added that “we made substantial progress today and are close to common ground for the mission to return to Athens the coming week.”

Judging by the latest comments from Tsipras – who now badly lags behind New Democracy in the polls, and may have no choice but to stand strong on his anti-austerity promises or else lose risking control – that may have been an optimistic assessment.

According to a poll published in , leads by a large margin. is third with and not far behind

Then again, with Greece nothing happens until the last minute, and conveniently that particular deadline once again coincides with a major debt repayment deadline: the Athens government faces €7 billion in maturities this summer that it cannot afford without conceding to Troika demands which are holding up new loans from Greece’s 86 billion euro bailout.

However, Greece does not have much time. Breaking the stalemate in the coming weeks is seen as paramount with elections in the Netherlands on March 15 and France in April through June threatening to make a resolution even more difficult. Dijsselbloem also warned Friday that the next meeting of eurozone ministers on February 20,  seen as an unofficial deadline ahead of the votes, would still be too early for a breakthrough.

“We will take stock of the further progress (during that meeting)”, said Dijsselbloem, who is also the Dutch finance minister.

With a barrage of European political risk events in the coming months, including elections in France, the Netherlands and Germany, a potential undiffused Greek time bomb lurking in the background could be just the catalyst that breaks the record low volatility doldrums that the market has found itself in in recent months.

 

 

end

 

Germany

Oh oH! this is not good for Germany and the EU.  Wholesale prices soar by a huge 4% as inflation is now upon them due to the massive printing of EU’s in the QE of their bonds

(courtesy zero hedge)

 

 

German Wholesale Prices Soar 4%, Biggest Jump Since October 2011

Two weeks after Germany reported a spike in consumer prices, which jumped 1.9% from a year ago, the biggest annual increased since July 2013…

… overnight Germans got another price shock when the Federal Statistics Office reported that Wholesale Prices rose a China-like 0.8% MOM in January, and advancing 4% year-on-year in January, up from the “mere” 2.8 percent increase in December, and the fastest growth since October 2011, when prices gained 4.1%.

The biggest culprit: prices of solid fuels and mineral oils surged 16.4% from a year ago, although many core products also saw a substantial increase.

The surge in German inflation, at both the consumer and wholesale level since the end of last year is fast becoming a political flashpoint in the country, which faces elections in September, as savers remain burdened with near-zero deposit rates. Calls are mounting for the ECB to start talks over winding down its bond-buying program, which is scheduled to run until at least the end of this year. Last week, ECB policy makers have said they would likely not bring up the topic of further tightening or tapering until at least the middle of 2017, which means that regardless of how high prices rise, Germans willhave to bear with it.

At the end of January, the ECB further antagonized German shoppers when Ewald Nowotny, governor of Austria’s central bank, said “monetary policy can’t just cater to one country but to the entire euro-zone economy,” adding that “German developments are watched, but they are just a part.”

Nowotny said that while the ECB’s Governing Council will “surely” have to take a decision on the future of quantitative easing before the end of 2017, he doesn’t expect that to happen until after the summer.

Will Germany’s conservative population remain as patient as the ECB (and Angela Merkel) hopes it will, especially with major a political event on the horizon? We don’t know, although for an example of what happened to some less “patient” societies when inflation surged as much as it did last time, look no further than the African Spring, when soaring living and food costs, sparked the biggest series of revolutions (some with the implied assistance of the CIA) in recent history.

 

END

 

EU

 

The EU and other trading partners are not waiting.  They are preparing a legal challenge to Trump’s  Border Tax (BAT)

As far as I am concerned, the Border tax is a non starter

(courtesy zero hedge)

“Biggest Case In WTO History”: Europe Prepares Legal Challenge Against Trump Border Tax

Two weeks ago we looked at the immediate fate of the proposed border tax adjustment, and said that two wars are about to break out: one is domestic, and involves exporter (GE and Boeing) vs importer (WalMart and Koch Brothers) alliances and trade groups; this war will shift into the Senate, where Republicans can afford to lose at most 2 Senators, yet where as many as 6 are on the fence already (with 3 voicing a negative opinion toward BAT). The second war, we predicted, is one which would break out after the BAT is passed, and it would hammer – at least in the first few years – America’s biggest trading partners. And since the impact of the latter would be to force prices of the vast majority of retail goods sold in the US to soar, leading to a big jump in core inflation, eventually leading to a surge in the US Dollar – even if one ignores the diffuse effects and pervasive on global trade – the BAT would have an immediate impact on Fed policy, interest rates, and ultimately, prices of risk assets.

As it turns out, the second war did not even wait for the formal passage of the border adjustment tax, because as the FT reported this afternoon, the EU and other US trading partners have begun preparing for a legal challenge to a US border tax proposal in a move that “could trigger the biggest case in World Trade Organization history.”

The reason is that “the EU and other US trading partners are worried about the impact on their exports and have been deploying lawyers with a view to eventually challenging it before the global trade watchdog.

The move to block the BAT come as Congressional Republicans are working to convince President Donald Trump to back a major shake-up of the US corporate tax system that would include a new “border adjustment” system. It would see US imports subject to tax and export revenues exempted, in what the FT, us and everyone else has dubbed “the biggest shake-up in the global corporate tax system in almost a century, according to tax experts.”

And as such, America’s trade partners have finally pushed the panic button realizing that their exports to the US would likely suffer substantially, and as a result, they are taking their case to court.

Members of the WTO and trade experts warn that if the US makes the tax change, it would lead to a major challenge to the global trading system at a time when its most influential member is tilting toward protectionism under Mr Trump.  Jyrki Katainen, the European Commission vice-president who oversees EU trade policy, told the Financial Times that Europe wanted to avoid a trade war with the US as that would be “disastrous” for the world economy.

 

But he made clear the EU would be willing to act against the US whether it was related to a border tax proposal or the erection of other arbitrary trade barriers.

 

“If somebody is behaving against our interests or against international rules in trade then we have our own mechanisms to react,” Mr Katainen said. “We have all the legal arrangements within EU, but  we are also part of global arrangements like the WTO and we want to respect the global rule base when it comes to trade.”

“Our first assessment is that it is definitely not going to be compatible with the WTO,” said a senior trade official in Geneva, where the WTO is based. “On the sides of many [US] trading partners there are serious doubts about whether or not it can be made WTO compatible.”

According to the FT, should the EU indeed challenge – and defeat the US – in a border tax case, it could open the door to $385 billion a year in trade retaliation against the US, according to Chad Bown, an expert on WTO trade disputes at the Peterson Institute for International Economics. That would be almost 100 times greater than the largest WTO finding to date. And if the US ignores the WTO ruling – as Trump has threatened in the past – it could lead to the unravelling of the international system designed to prevent trade wars.  “The issue here is just orders of magnitude larger than what the WTO dispute settlement process typically is asked to manage in terms of trade frictions,” said Mr Bown.

Speaking of the proposed border tax, a senior trade official in Geneva, where the WTO is located said, “our first assessment is that it is definitely not going to be compatible with the WTO” and added “on the sides of many [US] trading partners there are serious doubts about whether or not it can be made WTO compatible.”

Meanwhile, as shown previously, Trump has yet to endorse the tax idea, which is being pushed by Paul Ryan, the speaker of the House of Representatives, and Kevin Brady, chairman of the House’s tax-writing ways and means committee.

Now that a global legal challenge is implemented, it further reduces the probability a border adjustment mechanism is implemented to nearly zero.

The implications? Since BAT was meant to offset budget shortfalls from corporate tax cuts, the total reduction in the corporate tax rate will likely be well less than Trump’s proposal. Last week, JPM proposed an alternative scenario in which, in the absence of BAT, the corporate Federal Tax rate is reduced from 35% to only 27.5%, which incidentally is almost identicaly with the effective tax rate the average US corporation already pays. This is what JPM said:

Alternative Scenario: Revised Tax Proposal (27.5% Federal Tax Rate, No BAT)

 

Given the challenges that the BAT presents, we further analyze a plausible scenario in which the BAT is dropped in favor of a smaller reduction in the corporate tax rate (resulting in a similar budget deficit to the House proposal). For this scenario, we assume the federal corporate tax rate is reduced from 35% to 27.5% (the midpoint between the current 35% rate and the 20% rate proposed in the Blueprint). We keep all other assumptions the same as in the first scenario above.

 

Using these assumptions, the modified proposal would lift S&P 500 EPS by approx. $9 with considerably lower dispersion among sectors and industries. All sectors benefit, with the relative outcome driven primarily by the portion of revenue earned domestically vs. abroad. In dollar terms, this plan reduces government revenue by roughly the same magnitude as the House Blueprint scenario (which includes 20% federal rate + border adjustment). Such a scenario would likely put less upward pressure on the dollar and inflation.

Of course, if Trump’s fiscal proposals are met with the same challenges as the BAT, and there is pushback to offset spending with new sources of revenue, it may well end up that few if any of Trump’s proposed corporate tax cuts – the primary catalyst for the ongoing surge in stocks – will ever be implemented.

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

none today

6.GLOBAL ISSUES

none today

7. OIL ISSUES

In the COT report fro Oil Muir suggests one should take the net speculative interest in oil instead of the just the longs.  In gold and silver we do just that

(courtesy Muir/MacroTourist blog)

Re-evaluating Crude Oil Speculative Positioning

ubmitted by Kevin Muir via The Macro Tourist blog,

Over the past year it is amusing how quickly market sentiment has gone from “crude oil will never rise again” to “better buy oil because of, well, just put your reason in here… there are too many to list.”

Joe Weisenthal from Bloomberg News had a great tweet that summed up the dramatic shift:

https://i2.wp.com/themacrotourist.com/images/2017/02/JoeFeb1317.png

https://i1.wp.com/themacrotourist.com/images/2017/02/CrudeFeb1317.png

Although the market is now all bulled up about the prospects of OPEC cuts, increased global economic growth and most importantly, the Trump border tax’s potential bullish effect on WTI crude oil prices, these influences are all “known” by the market.

All one needs to do is look at the CFTC’s COT (commitment of traders) report to realize the lopsided nature of crude oil sentiment.

https://i1.wp.com/themacrotourist.com/images/2017/02/NetFeb1317.png

Seems straightforward huh? Record high net speculative long positions in crude oil seem to scream disaster in the making.

I am a little embarrassed to admit, but I did apply this sort of superficial analysis to the CFTC COT net speculative positioning report. Yet a conversation between my favourite Australian (and a must follow) PrometheusAM and RealVisionTV’s Raoul Pal about the large increase in net spec longs forced me to open my eyes regarding the problems with this simple chart.

Let’s start with the most obvious error. If the contract becomes more popular, then as volume and open interest expands, there will be increasingly large net speculative positions when measured in terms of total contracts. This absolute number of speculative contracts could give false signals.

https://i0.wp.com/themacrotourist.com/images/2017/02/OpenFeb1317.png

If a contract’s volume expands by three times, but the net speculative long position only increases one and half times, then the absolute position of net speculative longs will be sitting at all time highs, but in reality, speculators will not be nearly as bullish.

Therefore the first change we need to make is to measure net speculative positions not in absolute terms, but instead as a percentage of open interest.

https://i2.wp.com/themacrotourist.com/images/2017/02/PercentFeb1317.png

When we make that adjustment, the net speculative position pictures changes a little. Yes, net specs are still elevated, but nowhere near the degree when measured in absolute terms.

I wish this was the only problem with my analysis, but there is another factor we need to consider. When net specs hit their peak in 2014, the price of oil was much, much higher.

Another way to look at net speculative positioning is to measure the total dollars of exposure.

https://i2.wp.com/themacrotourist.com/images/2017/02/DollarsFeb1317.png

This chart shows a crude oil market that is much less lopsided than I previously believed. Over the past five years, net specs have often held larger net positions as measured on a dollar basis.

Now don’t misconstrue my post as an abandonment of my bearish crude oil view. I still hate crude oil and believe the next surprise will be lower rather than higher. But a little weekend thinking has forced me to re-evaluate the true extent of the supposed extreme speculative positioning…

8. EMERGING MARKETS

Your humour stories of the day:

No 1:

Venezuela kicks out CNN out of Venezuela accusing the operation of spreading fake news:

(courtesy zero hedge)

Maduro Kicks CNN Out Of Venezuela, Accuses It Of Spreading Fake News

While tensions between President Trump and CNN dying down, a new scandal has erupted for the cable news network after Venezuela’s President Nicolas Maduro said on Sunday he wanted CNN out of the country, accusing it of spreading fake news, misrepresenting the truth and meddling in issues that are not of its concern.

“CNN, do not get into the affairs of Venezuelans. I want CNN well away from here. Outside of Venezuela. Do not put your nose in Venezuela,” said Maduro during a political statement. Quoted by Fox News, Maduro made the comment after blaming the U.S. network of distorting the facts when reporting on irregularities at a Caracas public high school.

“Some media like CNN tried to manipulate. They cannot manipulate! That is our business, of the Venezuelans,” he said.

Last week PanAmPost reported that a student demanded on national television that the president improve the conditions of his school, asking for security, infrastructure and food so his classmates wouldn’t faint from hunger anymore. CNN en Español visited the high school and talked with the staff about the student, and whether Maduro had made any improvements since that incident only to discover he had not.

Maduro said the young woman “uncovered a situation that had to be spoken about” adding that “I want the youth to tell the truth, to be critical and revolutionary, for us to go to solve the problems,” he said. “To attend to those problems, we must build a sense of belonging in each school. Lyceum belongs to me and I must take care of it.”

The demand for CNN to leave the country also came a few days after CNN en Espanol broadcast and posted online an in-depth investigation into how officials of the Venezuelan Embassy in Iraq allegedly sold Venezuelan passports and visas to suspected terrorists. “Passports in the Shadows” was the result of a yearlong investigation showcasing an account by a whistleblower, a former legal adviser to the Venezuelan embassy in Baghdad, and the government officials’ dismissal of the allegations.

Earlier on Sunday, Venezuelan police arrested and expelled two Brazilian reporters after they toured a structure built in 2012 by Odebrecht, the Brazilian company being investigated for a vast corruption scheme that allegedly touches several Latin American governments and heads of state.

end

 

Story No 2 from : Mar-A Lago

Caught On Tape: Trump Crashes Mar-A-Lago Wedding With Japanese Prime Minister Shinzo Abe

 end

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

Euro/USA   1.0637 UP .0007/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP WINS THE ELECTION/USA READY TO GO ON A SPENDING BINGE WITH THE TRUMP VICTORY/ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/USA RISING RATE/EUROPE BOURSES ALL IN THE GREEN  

USA/JAPAN YEN 113.70 UP 0.608(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  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2529 UP .0057 (Brexit by March 201/UK government loses case/parliament must vote/PRIME MINISTER MAY  DECIDES ON A HARD BREXIT/LOWER HOUSE PASSES BILL TO BEGIN THE BREXIT PROCESS)

USA/CAN 1.3091 UP .0014 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU)

Early THIS MONDAY morning in Europe, the Euro ROSE by 7 basis points, trading now WELL ABOVE the important 1.08 level RISING to 1.0687; Europe is still reacting to Gr Britain HARD 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 Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED UP 20.14 POINTS OR 0.63%     / Hang Sang  CLOSED UP 136.00 POINTS OR .58%    /AUSTRALIA  CLOSED UP 0.72%  / EUROPEAN BOURSES ALL IN THE GREEN 

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

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

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

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

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

The NIKKEI: this MONDAY morning CLOSED UP 80.22 POINTS OR 0.41% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 136.00 POINTS OR .58%       / SHANGHAI CLOSED UP 20.14   OR 0.63%Australia BOURSE CLOSED UP 0.72% /Nikkei (Japan)CLOSED UP 80.22 POINTS OR 0.41%  /  INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1229.00

silver:$17.93

Early MONDAY morning USA 10 year bond yield: 2.438% !!! UP 2 IN POINTS from FRIDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  3.033, UP 3 IN BASIS POINTS  from FRIDAY night.

USA dollar index early MONDAY morning: 100.74 DOWN 22 CENT(S) from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield: 4.005% DOWN 11  in basis point yield from FRIDAY 

JAPANESE BOND YIELD: +.093%  UP 1/10  in   basis point yield from FRIDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.662%  DOWN 4 IN basis point yield from  FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.225 DOWN 5 POINTS  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 66 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.331% UP 1/2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR MONDAY

Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM 

Euro/USA 1.0600 DOWN .0029 (Euro DOWN 29 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 113.777 UP: 0.679(Yen DOWN 68 basis points/ 

Great Britain/USA 1.2499 UP 0.0028( POUND UP 28 basis points)

USA/Canada 1.3076 UP 0.0001(Canadian dollar DOWN 1 basis points AS OIL FELL TO $52.87

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This afternoon, the Euro was DOWN by 29 basis points to trade at 1.0600

The Yen FELL to 113.77 for a LOSS of 68 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE 28  basis points, trading at 1.2491/

The Canadian dollar FELL  by 1 basis points to 1.3075,  WITH WTI OIL FALLING TO :  $52.87

The USA/Yuan closed at 6.8775/
the 10 yr Japanese bond yield closed at +.093% UP 1/10 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 3 IN basis points from FRIDAY at 2.436% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.035  UP 3 in basis points on the day /

Your closing USA dollar index, 101.01 DOWN 13 CENT(S)  ON THE DAY/1.00 PM 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY: 1:00 PM EST

London:  CLOSED UP 20,17 OR 0.28% 
German Dax :CLOSED UP 107.46 POINTS OR 0.92%
Paris Cac  CLOSED UP 59.87 OR 1.24%
Spain IBEX CLOSED UP 106.00 POINTS OR 1.13%
Italian MIB: CLOSED UP 202.53 POINTS OR 1.07%

The Dow closed UP 142.79 OR 0.70%

NASDAQ WAS closed UP 29.83 POINTS OR 0.52%  4.00 PM EST
WTI Oil price;  52.87 at 1:00 pm; 

Brent Oil: 55.45  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  58.18 UP 13/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES TO +0.331%  FOR THE 10 YR BOND  1:30 EST

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:$52.90

BRENT: $55.56

USA 10 YR BOND YIELD: 2.436%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.031%

EURO/USA DOLLAR CROSS:  1.0597 down .0033 

USA/JAPANESE YEN:113.74   up 0.635

USA DOLLAR INDEX: 100.98  up 2  cents ( HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2526 : up 54   BASIS POINTS.

German 10 yr bond yield at 5 pm: +.331%

END

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

TRADING IN GRAPH FORM

Stocks Soar To Record-est Highs Despite VIX & Crude Warnings

Reflation trade bitches…between Yellen tomorrow (hawkish), China end of reverse repo drought, Trump “phenomenal” taxes, and expectations for a hot CPI on Wednesday – everything is awesomely inflationary.

 

Before we start – Spot The Odd One Out…

Stocks were up despite crude weakness…

VIX was notably higher despite the melt-up in stocks…

And March rate-hike odds near highs…

 

New All-Time Highs In Dow, Nasdaq, S&P, and Russell 2000.

Dow topped 20,400 (up 400 points in 3 days)…

 

Notably GS and CAT accounted for one third of Dow gains – which is just fucking ridiculous when you look at fundamentals…

 

3rd day in a row of opening short-squeeze gap-up open…

 

But notably Small Caps faded significantly in the afternoon (as the squeeze ran out of energy)…

 

S&P 500 topped $20 trillion and its Price-to-Book is now back above 3.00x – the highest since 2004…

 

S&P 500 is notably overbought now…

 

Bank stocks leading the way again… Up 3 days in a row to the highest since Feb 2008 – bouncing perfectly off the 50-day moving average once again…

 

So here are some chart food for thought…

Bank investors don’t care about rate hikes anymore…

 

Bank investors don’t care about the yield curve or NIM…

 

And Bank investors don’t care about credit risk…

It’s the deregulation-stupid!

 

Apple stock reached a new closing high…

 

So buy and hold for 2 years and bonds still outperformed?

 

Treasury yields limped higher on the day (but rallied lower from the US Open) – 30Y holding above 3.00%

 

HY bonds rallied to new cycle highs back to July 2015…

 

The USD index whipsawed up and down intraday (ending higher)… with cable strength and Yen weakness

 

Which fits with the 2016 analog…

 

Copper gained (along with every China industrial commodity) after renewed liquidty operations, PMs drifted with a stronger dollar and crude tumbled…

 

Will Yellen spoil the party tomorrow?

 

end

 

This is big:   Dr Malpass is an advocate for a strong currency and is a gold bug:

(courtesy zero hedge)

Trump To Nominate Former Bear Stearns Chief Economist For International Treasury Role

Having filled up his administration to the brim with former Goldman staffers, to the point where even President Trump realizes there may be too many “Goldman Guys” on his team, Bloomberg reports that in an attempt to branch out, Donald Trump plans to nominate David Malpass, 60, the former Bear Stearns economist, as U.S. Treasury undersecretary for international affairs.

For those trading FX, his role will be critical: His first job will be to help guide policy as the world wonders whether the new administration will make a habit of talking up or down other countries’ currencies.”

Malpass will report to the Treasury secretary on the U.S.’s international economic relationships, most importantly with China. Ties between the world’s two largest economies have become more tenuous since Trump’s election. The Republican and his advisers have not only talked about China and Japan artificially manipulating their currencies — after walking back a pledge to label the former as a manipulator in the early days of the administration — but have also moved foreign exchange markets by jawboning the U.S. and Canadian dollars, Mexico peso, and the euro.

In other words, with much confusion within the Trump admin over whether the US Dollar should be stronger or weaker, Malpass will – hopefully – provide some much needed clarity. He will also be the point person, i.e., fall guy, should Trump’s dollar policy backfire.

His nomination will likely be heated as most other Trump candidates: Malpass, due to his high profile Bear Stearns roots prior to its collapse in 2008, may face heat from Democrats already bitter over the number of Wall Street alums joining the Trump administration.

Confirmations in the Senate are gummed up, with Democrats debating for 30 hours or boycotting committee votes on some cabinet picks. Treasury Secretary nominee Steven Mnuchin is expected to be confirmed in a vote on Monday.

The good news for Trump is that if confirmed by the Senate, Malpass would bring “extensive government experience to an economic team that has little background in public service. He served as a deputy assistant secretary in the Treasury and State departments during the administrations of Ronald Reagan and George H.W. Bush.”

Malpass’ ascent will be notable to Fed watchers because he has stated in the past that he views the Federal Reserve’s asset purchases as “very harmful” to the economy by channeling credit to corporations and the government instead of to new, more dynamic small businesses. That said, as Bear Stearns’ chief economist, Malpass in 2007 wrote a Wall Street Journal column advising markets not to panic over a $2 trillion loss in equity markets, calling it a “correction” that may eventually drive economic growth. The following year, that credit crunch turned into a global crisis, taking Bear Stearns down with it.

After Bear Stearns’ demise Malpass founded Encima Global, an economic research company, and has been a frequent commentator in print and on television. He served on the Trump campaign’s economic advisory council.

Bloomberg adds that Malpass would replace Nathan Sheets, who served as undersecretary of international affairs in the final stages of the Obama administration. Lael Brainard, now a Fed governor, also held that role under Obama from 2010 to 2013. As explained yesterday, Brainard is one of the Fed governors closely tied to the Clinton regime, and some see her as the next head to roll at the Fed following Daniel Tarullo’s unexpected departure on Friday.

 

 

end

 

Now Trump starts the deportation of illegal aliens.  Mexico plans to jam the USA court system

(courtesy zero hedge)

Mexicans Vow To Fight Trump By “Jamming US Courts” As Deportations Begin

While much of the media airtime in the past few weeks has been dedicated to Trump’s ongoing legal battle with the US judicial system over his now halted immigration order temporarily blocking the entry of refugees and travelers from seven nations, a separate push to remove illegal immigrant from the US has quietly – or not so quietly – commenced in recent days, resulting in a deeply concerned, at times violent, response by some of the millions of illegal aliens residing in the US.

Some recent cases documented by the NYT include an Austin, Tex., undocumented women working in a laundromat, a day laborer and mechanic in Staten Island, and Savannah, Ga., undocumented restaurant workers. As the Times put it, “as reports of immigration raids and roundups have rocketed across Twitter, Facebook and texts around the country, undocumented immigrants, their lawyers and advocacy groups are bracing for the increased enforcement that President Trump has called for.”

Overnight this sudden start in deportation activity prompted the Mexican government to urge its citizens living in the US to “keep in touch with its nearest consulate” and to make emergency contingency plans the day after at least one mother was deported, following President Donald Trump’s executive order. In a statement released Friday, the Mexican Foreign Ministry said that the country’s consulates in the US have “intensified their work” to protect fellow nationals, and are anticipating “more severe immigration measures to be implemented by the authorities of this country, and possible violations to constitutional precepts during such operations and problems with due process,” according to a CNN translation.

The announcement was released one day after Guadalupe Garcia de Rayos became one of the first people to be prominently deported under Donald Trump’s executive order on immigration. Garcia de Rayos, a 36-year-old mother of two US citizens, had lived in the US for the past 20 years. She was detained after going in for a routine check at the federal Immigration and Customs Enforcement (ICE) office in Phoenix.

ICE will remove illegal aliens convicted of felony offenses as ordered by an immigration judge.

Trump has promised to crack down on any illegal immigrants with criminal records, and Garcia de Rayos was a convicted felon. García was convicted of identity theft, a felony, to which she pled guilty after being arrested in 2009 with a false social security card, but had been checking in with immigration agents every six months and  was allowed to stay in the country under an Obama administration policy that gave leniency to undocumented migrants who had entered the US as children. This week, when she reported to their Immigration and Customs Enforcement office in Phoenix, she was detained and, after hours of protests by demonstrators, deported to Mexico.


A van bearing Mexican migrant Guadalupe García is stopped by protesters
outside the Immigration and Customs Enforcement facility

ICE has since confirmed Garcia de Rayos’ deportation to Mexico, noting that her felony conviction was reviewed by “multiple levels of the immigration court system” before it was determined that she did not have “a legal basis to remain in the US.”

“ICE will continue to focus on identifying and removing individuals with felony convictions who have final orders of removal issued by the nation’s immigration courts,” ICE spokeswoman Yasmeen Pitts O’Keefe said in a statement, according to the Associated Press.

– New statement from ICE regarding deportation of Guadalupe Garcia de Rayos. @KTAR923

Meanwhile, protesters gathered outside the immigration office in the hopes of preventing Garcia de Rayos’ deportation, with one demonstrator going as far as chaining himself to the transport van.

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

Activist stand ground blocking ICE transport vehicle from taking Guadalupe García de Rayos. One is even holding onto the tire with his body

Activistas se niegan a permitir el paso de auto de inmigración. Guadalupe García de Rayos se encuentra adentro de este vehículo @TelemundoAZ

According a statement from Mexico, the Consulate General in Nogales, Arizona, was also present for Garcia de Rayos’ deportation to ensure it was conducted in a “dignified and safe” manner. “The case involving Mrs. Garcia de Rayos illustrates a new reality for the Mexican community living in the United States, facing the most severe implementation of immigration control measures,” the statement says. “For this reason, the entire Mexican community is invited to take precautions and keep contact with its closest consulates to receive the necessary help to face this type of situation.”

Mexico’s government recently allocated some $50 million to assist undocumented migrants facing deportation, and President Enrique Peña Nieto has instructed the country’s 50 consulates in the U.S. to defend migrants Luis Videgaray, the Mexican Foreign Relations Secretary, said that Mexico was “going to focus the money on one fundamental objective, which is the defense of the rights of Mexicans. This means legal advice, informational campaigns, the hiring of lawyers where it is necessary,” according to the Washington Post.

Mexico’s Foreign Ministry said late Thursday it has intensified efforts to protect Mexican migrants, “foreseeing the hardening of measures by immigration authorities in the U.S., as well as possible constitutional violations during raids or in due process.”

In a separate, and more concerning strategy meant to fight Trump’s deportation order, the WSJ reports that influential Mexicans are pushing “an aggressive and perhaps risky strategy to fight a likely increase in deportations of their undocumented compatriots in the U.S.: jam U.S. immigration courts in hopes of causing the already overburdened system to break down.” The proposal calls for ad campaigns advising migrants in the U.S. to take their cases to court and fight deportation if detained. “The backlog in the immigration system is tremendous,” said former Foreign Minister Jorge Castañeda. The idea is to double or triple the backlog, “until [U.S. President Donald] Trump desists in this stupid idea,” he added.

While concerns over who will pay for Trump’s border wall – which prompted the Mexican president to cancel a scheduled meeting with Donald Trump – have moderated in recent weeks, the issue of stepped-up deportations is moving to the forefront in bilateral relations that have fractured since Donald Trump’s inauguration. Trump’s plans to deport undocumented Mexicans, renegotiate the countries’ free-trade deal, and build a border wall at Mexico’s expense have sparked a nationalist backlash south of the border.

It remains to be seen if some District US Court, perhaps in Seattle under the auspices of the 9th Circuit, will file another legal challenge to this aspect of Trump’s immigration order.

 

end

 

Hundreds of illegal immigrants arrests and many more to come

(courtesy zero hedge)

“Panic” Spreads Among Hispanics After Hundreds Of Illegal Immigrants Arrested

As reported earlier, one of the immediate consequences of the Trump immigration executive order – and one which has so far gone largely unchallenged – has been a crackdown against illegal immigrants residing in the US. This promptly led Mexico’s Foreign Ministry to say on Thursday it has intensified efforts to protect Mexican migrants, “foreseeing the hardening of measures by immigration authorities in the U.S., as well as possible constitutional violations during raids or in due process.”

We also noted that according to the WSJ, influential Mexicans are pushing “an aggressive and perhaps risky strategy to fight a likely increase in deportations of their undocumented compatriots in the U.S.: jam U.S. immigration courts in hopes of causing the already overburdened system to break down.” The proposal calls for ad campaigns advising migrants in the U.S. to take their cases to court and fight deportation if detained. “The backlog in the immigration system is tremendous,” said former Foreign Minister Jorge Castañeda. The idea is to double or triple the backlog, “until [U.S. President Donald] Trump desists in this stupid idea,” he added.

For now, however, these efforts to, well, trump Trump’s anti-illegal alien directive have failed to generate traction, and according to Reuters, federal immigration agents arrested hundreds of undocumented immigrants in at least four states this week in what officials on Friday called routine “enforcement actions.” The enforcement actions took place in Atlanta, New York, Chicago, Los Angeles and surrounding areas, said David Marin, director of enforcement and removal for the Los Angeles field office of U.S. Immigration and Customs Enforcement.


U.S. ICE officers conduct a targeted enforcement operation in Atlanta on

February 9, 2017.

Marin called the five-day operation an “enforcement surge.”

While the agency did not release a total number of detainees, the Atlanta office alone, which covers three states, arrested 200 people, Bryan Cox, a spokesman for the office, said. An additional 161 arrests were made the Los Angeles area in a region that included seven highly populated counties, Marin also said that of the people arrested in Southern California, only 10 did not have criminal records, and of those, five had prior deportation orders.


U.S. ICE officers detain a suspect as they conduct a targeted enforcement

operation in LA on February 7, 2017

“The rash of these recent reports about ICE checkpoints and random sweeps, that’s all false and that’s dangerous and irresponsible,” Marin said. “Reports like that create a panic.”  He described the arrests as largely routine.

Perhaps, yet we have to recall one time in the past 8 years in which a story about mass illegal immigrant arrests made the landing page of Reuters or the WSJ.

Others agree. Michael Kagan, a professor of immigration law at the University of Nevada at Las Vegas, said immigration advocates are concerned that the arrests could signal the beginning of more aggressive enforcement and increased deportations under Trump. “It sounds as if the majority are people who would have been priorities under Obama as well,” Kagan said in a telephone interview.

“But the others may indicate the first edge of a new wave of arrests and deportations.”

Which likely explains why there is suddenly a palpable sense a panic among Hispanic communities, as The Hill reports.

One of the first cases to receive national attention, the deportation of Arizona resident Guadalupe Garcia de Rayos, has put undocumented and mixed status communities on edge. “It’s fair to say we’re all extremely troubled by the deportation action we saw take place yesterday in Arizona,” said Janet Murguia, president of the National Council of La Raza. “The first deportation [after] his executive order is of a working mom with two U.S. kids,” she added.


U.S. ICE officers conduct a targeted enforcement operation in Atlanta, on
February 9, 2017.

And yet, what Trump is doing is precisely what he had promised to do. On the campaign trail, Trump initially promised to enact a deportation force to deport all 11 million undocumented immigrants, starting with dangerous criminals. “They’re going to be out of here so fast, your head will spin,” Trump told Fox News in August. “As far as the rest, we’re going to go through the process, like they are now — perhaps with a lot more energy.”  As president-elect, Trump said his government would seek out “three or four million” dangerous criminals immigrants for deportation.

Many Hispanic advocates feel that the Garcia de Rayos case shows the Trump administration will aggressively pursue all undocumented immigrants.  “This reaffirms that when the Trump administration said they would go after criminals, they really meant everybody,” Murguia said.

The perception that Trump is shifting back to his early campaign proposals has shaken many Hispanics, including many who are legally in the country, the Hill noted.

“The uncertainty and the confusion is prevalent with undocumented, legal residents and also citizens,” said Telemundo anchorman José Diaz-Balart. “There are millions of mixed status families in the United States of America.”  And community organizers admit they have few tools to quell the trepidation.

NCLR is one of many organizations that has set up a legal defense structure and started programs to inform immigrants of their rights, but under current law, an undocumented immigrant who comes in contact with federal enforcement officers has relatively few options. “We want people to stay calm and we want to give them assurances but we can’t give them assurances,” Murguía said.

Diaz-Balart, the anchor for Noticieros Telemundo, the network’s nightly news program, is hosting a town hall event Sunday for his viewers to better understand the administration’s immigration actions. “[Immigrants are] now asking, ‘how is this going to have an impact on me?'” said Diaz-Balart.

“It’s a town hall that is going to be dealing with the questions that we hear over and over and over again from the people that we serve,” he said. “It’s not about telling people what they want to hear, it’s about making sure the people are informed about things.”

In the first days of the Trump administration, immigration has emerged as the most important target for the president, seemingly of greater importance than repealing Obamacare or cutting taxes. Through his executive orders, Trump has gone after so-called “sanctuary cities” that restrict the degree to which their law enforcement agents collaborate with federal immigration enforcement. He has also redefined who could be labeled a “criminal alien.” That redefinition greatly expanded the number of undocumented immigrants liable to be targeted for removal, beyond the “three or four million” that Trump had mentioned.

José Magaña-Salgado, an attorney at the Immigrant Legal Resource Center, cited a study that said as many as 8 million people could now be targeted for deportation.  Under Trump’s order, the definition of criminality was expanded to include misdemeanors like illicitly crossing the border.  It also expanded the definitions for immigrants to be considered priorities for deportation. Foreigners who have “committed acts that constitute a chargeable criminal offense” are priorities, even before conviction. It also includes those who have committed “fraud or willful misrepresentation in connection with any official matter or application before a governmental agency,” a category that includes using fake Social Security numbers to work.

To be sure, lacking a legal challenge  for the time being, Hispanics are refuting the logic of Trump’s order.

While Trump campaigned on the prospect of removing dangerous criminals, Magaña-Salgado said the very structure of Immigration and Customs Enforcement (ICE) and U.S. Customs and Border Protection (CBP) would provide an incentive for indiscriminate enforcement. “The general philosophy of ICE agents and CBP agents, they view their job as expelling as many people from the country as possible,” said Magaña-Salgado. “It benefits them to have high deportation numbers because they can justify their budget, they can justify their mission,” he added.  And cases like Garcia de Rayos provide an easy target for federal agents.

Garcia de Rayos was apprehended during a yearly inspection at her local ICE headquarters, in which she voluntarily presented herself keeping with orders given to her when she was originally apprehended. As a low-risk offender — Garcia de Rayos was convicted of using a fake Social Security Number to work — she was not on the Obama administration’s deportation priority list despite have been slated for deportation by an immigration judge.

She was, however, very much likely an eligible Democrat voter, which while undiscussed is the bedrock behind Trump’s aggressive pursuit of undocumented illegal immigrants in the US.

Beyond the detention of Garcia de Rayos, ICE conducted large raids this week on homes and workplaces that further alarmed Hispanic communities. Karen Tumlin, legal director of the National Immigration Law Center, said agents denied access to immigration lawyers after one such raid in Los Angeles that rounded up about 100 people. “Immigration attorneys flocked to the scene,” Tumlin said. “They were shut out.” “[It’s] absolutely unacceptable and potentially unlawful,” she added.

Similar cases to Garcia de Rayos could also attract the attention of federal enforcement officers because of the shortage of immigration judges to prosecute cases. People who have already been slated for deportation by a judge can be removed without further due process. The lack of immigration judges is “certainly going to be a constraint,” said Magaña-Salgado.

But agents can use expedited removal procedures, curbed under the Obama administration but not taken off the books, to get detainees to accept a quick deportation over a lengthy wait for an immigration judge, in many cases while incarcerated.

“They’re going to use that tool to take people out of the court system and due process,” Magaña-Salgado said. It will also hinder the previously discussed attempt by influential Mexicans to “jam US courts” by increasing the number of deportation cases. Ultimately, that strategy may dramatically backfire if the law were to be further streamlined.

Meanwhile, Hispanic activists warn that going after easy targets can damage communities in several ways.

People who would otherwise be economically active could go into hiding, trust in law enforcement agencies could be diminished, and dangerous criminals could more easily slip through the cracks as federal agents pursue non-dangerous undocumented immigrants.

People want to comply with the enforcement agencies,” Murguia said. “They’re supposed to report in with these check ins; if they see they’re going to put themselves at risk, it’s a very difficult situation.”

“These are gut wrenching, heart-breaking stories,” she added. “In a civilized society, we can’t find a better way to deal with these issues?”

Well, Obama tried, and failed. Which is why “civilized” American society is now where it is, and reflecting the will of the majority.

 

 

end

A must read article:  With Friday’s resignation of Tarullo who was the Fed’s point guard on regulation, Barclay’s is suggesting that there is going to be huge significant changes coming to the Fed in the next 18 months.. here is why!

(courtesy zero hedge)

Barclays: “Significant Change Is Coming To The Fed Over The Next 18 Months”

Following yesterday’s surprise resignation announcement by Obama friend, and Fed “regulatory point man” Daniel Tarullo, which in turn followed last week’s resignation announcement by the Fed’s general counsel Scott Alvarez, and which means that there will be three open governor seats at the Fed (resulting in more Fed presidents, 5, than governors, 4, until the vacant slots are filled), Trump can now populate the Fed board with governors whose views echo his own – especially if strong pro-Clinton supporter and donor, Lael Brainard, is the next to go – even if it is still unclear just what that view is.

Between Trump’s USD-positive proposed trade policies and his USD-negative currency war statements, it remains to be seen if Trump wants a stronger or weaker US currency.

In any case, Barclays’ Fed-watcher Michael Gapen warns that no matter what, “significant change is coming to the Federal Reserve Board of Governors over the next 18 months,” although – like most other things in flux these days – what that change will be, is also unclear. What is more clear, however, is that “depending on the plans of Governor Lael Brainard, we would not be surprised to see five or six new faces on the board by the middle of 2018.”

Gapen’s full thoughts below:

Fed Governor Daniel Tarullo to resign

Federal Reserve Board Governor Daniel Tarullo will resign on or around April 5, and the Federal Reserve’s website has posted a copy of his letter of resignation. The decision does not come as a surprise to us, given that Governor Tarullo has been acting in the capacity of the vice chair for supervision despite not being formally appointed to the position. Hence, any new appointment by the Trump administration to the Board of Governors could also be slated to fill the vice chair of supervision role and supplant Daniel Tarullo in the process.

One of the main priorities of the Trump administration is deregulation and reversing many of the components of the post-crisis financial regulatory landscape, including the potential repeal of Dodd-Frank and the Volcker Rule. News reports indicate that the Trump administration sees David Nason as a potential appointment to the board in the capacity of the vice chair for supervision. Nason is currently the president and CEO of GE Energy Financial Services and was previously the assistant secretary for financial institutions at the Department of the Treasury, including during the financial crisis as a member of Hank Paulson’s team.

Tarullo’s resignation only further cements our view that significant change is coming to the Federal Reserve Board of Governors over the next 18 months. Tarullo’s departure, alongside the two existing board vacancies, means that three new faces are likely this year, and Chair Yellen’s and Vice Chair Fischer’s terms are up in 2018. Depending on the plans of Governor Lael Brainard, we would not be surprised to see five or six new faces on the board by the middle of 2018.

As an aside, in an interesting note by Wharton assistant professor Peter Conti-Brown, he makes some interest observations on whether Trump will appoint a “Priebusian” or “Bannonist” filler for the Fed board:

If the President appoints Bannonists to those open vacancies, it’s essentially a declaration of war against the idea of independent central banking, as tangled as that label can be. At that point, the hard-money types in the Republican coalition, Democrats virtually everywhere, and perhaps especially Fed insiders will be on notice: if they value the idea of expert decision-making in the central bank, then the stakes couldn’t be higher. As the dust settles on this first generation of President Trump’s cabinet appointments, we should not let these two seemingly obscure appointments go unnoticed. They will be among the most important the President will make.

More here.

 

 

end

 

Last week we brought you the story of how the 3 Muslim brothers were the actual people who hacked the Democratic Convention computers  and not the Russians.  There is now strong evidence that these guys supplied the information to Yemen in the raid that killed Nay Seal, Owens.  Is this why Tillerson cleaned house immediately?

(courtesy zero hedge)

An Alleged Muslim Spy Ring – Is This Why Rex Tillerson Cleaned House?

Submitted by Duan via Free Market Shooter blog,

Shortly after Trump took office, and before Rex Tillerson was even confirmed as Secretary of State, a slew of State Department officials were removed from their positions (or were forced to resign) as part of an effort to “clean house” at the State Department.  The whole affair was haphazardly covered by the media, especially by Jeff Bezos’s blog, which insinuated that the departures were “an ongoing mass exodus of senior Foreign Service officers who don’t want to stick around for the Trump era.”

Further analysis revealed that the officials were actually removed from their positions shortly after Tillerson visited the State Department office in Foggy Bottom prior to his confirmation:

“Any implication that that these four people quit is wrong,” one senior State Department official said. “These people are loyal to the secretary, the President and to the State Department. There is just not any attempt here to dis the President. People are not quitting and running away in disgust. This is the White House cleaning house.”

And, just a few weeks after the fact, it appears we know why Tillerson was so quick to purge existing staffers: he just didn’t trust them.  It also appears his mistrust was more than justified.

On January 29th, United States Special Forces executed an operation inside Yemen, against al-Qaeda in the Arabian Peninsula (AQAP), with the aim of gathering intelligence and killing leaders of the group.  The raid was planned under the Obama administration, but the decision to execute the raid was “punted” to Trump, using the pretext of waiting for a “low loom” (moonless) night to execute the raid with maximum secrecy:

While the operation had been proposed, it was never green-lighted. Kahl said Obama felt going the mission would mark a “significant escalation” in Yemen and should be left to the next administration to decide.

“Obama … believed this represented a significant escalation of U.S. involvement in Yemen, and therefore … thought the next administration should take a careful look and run a careful process,” he told the WSJ.

In addition, defense officials expected the Trump administration to be more willing to approve dangerous missions, something that was almost certainly known by any remaining personnel who stayed on after Obama left office:

While seemingly indicative of a more aggressive stance by Trump, one official described the raid and new proposal as an outgrowth of earlier Obama-era operations that have pushed al-Qaida militants from their sanctuaries into areas and provided more opportunities for U.S. strikes.

“We expect an easier approval cycle [for operations] under this administration,” another defense official said.

Though the Trump administration attempted to push the raid as a success, at very best, the mission was anything but, resulting in the death of Navy SEAL William “Ryan” Owens, as well as injuries to three other servicemen. While the commandos did everything necessary to maintain the element of surprise, it appears as though AQAP adversaries on the ground had advance warning of the attack:

“Initial reports are always wrong, but it doesn’t appear to be a failure of planning or intelligence,” said the former special forces officer.

Almost immediately, the raiding force on the ground took intense fire, according to the briefing paper and a senior military official. Occupants of the targeted house and its compound, along with their guard force, moved to a separate cluster of houses nearby where families, including women and children, were staying. Armed women fired on the U.S. and Emirati forces.

“There were a lot of female combatants who were part of this,” said Navy Capt. Jeff Davis, the Pentagon’s chief spokesman, on Monday. “We saw during this operation, as it was taking place, that female fighters ran to pre-established positions — as though they had trained to be ready, and trained to be combatants — and engaged with us.”

While most know about the Yemen raid, most do not know about the dismissal of the three Aman brothers, Abid, Imran, and Jamal Awan.  On February 2nd, they were abruptly removed from their positions of managing information technology for the House Permanent Select Committee on Intelligence.  Though they were initially suspected merely of stealing equipment, a connection with the previously-hacked computers of Representative Debbie Wasserman Schultz (D-FL) revealed something far more sinister:

Three members of the intelligence panel and five members of the House Committee on Foreign Affairs were among the dozens of members who employed the suspects on a shared basis. The two committees deal with many of the nation’s most sensitive issues and documents, including those related to the war on terrorism.

As Mad World News reported, the Aman brothers were hired by the Obama administration, and access to top secret information regarding military operationsThe committees they allegedly worked for had access to “the most sensitive and secretive government intelligence, including covert anti-terrorism activity… including the Yemen operation”:

The brothers were assigned access to three members of the intelligence panel and five members of the House Committee on Foreign Affairs along with dozens of congressmen who employed the suspects on a shared basis.  This gave them direct access to our military secrets, like missions carried out by Navy SEAL Team Six.

They retained their jobs after Obama left, which is not unheard of since their positions were not seen as political appointments.  However, they were fired by Trump’s administration within hours after Navy SEAL William Ryan Owens was killed in Yemen during the top secret raid on Al-Qaeda operatives. 

So, in case you’ve gotten lost, here’s a recap of the timeline of events:

  • Jan 20 – Trump takes office, and DoD officials are expecting him to be more willing to approve dangerous missions
  • Jan 26 – Rex Tillerson visits State Department headquarters prior to his confirmation, and either terminates or forces the resignation of many existing State Department personnel
  • Jan 29 – The botched Yemen raid is executed, resulting in the death of Navy SEAL Owens
  • Feb 1 – Rex Tillerson is confirmed by President Trump as Secretary of State
  • Feb 2 – The Awan brothers are terminated on suspicion that they accessed congressional computers without permission

As Mad World News previously stated,

“…it doesn’t take a rocket scientist to connect the dots.  The firing of the Awan brothers is linked to the Yemen raid where al-Qaeda knew we were coming, and it tragically ended with Navy SEAL Owens being killed in action.” 

The mainstream media seemed far more interested in obfuscating the details regarding the Tillerson terminations than they were in covering what could be one of the most dangerous intelligence leaks in years, of which there has been but a peep out of any major news outlet.  Captain Joseph R. John (Navy-Ret.) has stated that he believes the Muslim Brotherhood “fifth column” has “infiltrated U.S. Government,” and if he is correct, the Awan brothers could very well be a part of this infiltration.

Yet, there as been but a peep of information about the Awan brothers from nearly all major news outlets.  Are they in jail?  What are they accused of?  Does the Trump administration suspect them of leaking details about military operations to terrorist organizations?  And most importantly, if so, did these three men directly or indirectly contribute to the death of Owens during the Yemen raid?

One thing is for certain – as Politico seemed to take delight in stating, “Trying to nail down who the leakers are is like trying to count the cockroaches under the couch.”  However, it seems most of the “leaks” are coming from Obama holdovers.  Which makes Tillerson’s “cleaning house” look like not just the correct move, it leaves you wondering if he did enough cleaning house.

Just don’t expect to hear that from the mainstream media anytime soon.

 

end

 

Northern California’s Oroville Dam is in imminent failure and now 100,000 of Californians must evacuate from their homes:

two stories..

(courtesy zero hedge)

Nearly 200,000 People Are Evacuating Over “Imminent Failure” Of California’s Oroville Dam – Live Feeds

  • Oroville Dam Evacuations: Here Are The Latest Updates

    Following a woefully belated response by California authorities’ to the dangerous situation unfolding at the Lake Oroville Dam in Northern California over the weekend, an evacuation order forcing some 200,000 people living below the tallest dam in the US remained in place early on Monday after residents were abruptly told to flee when a spillway appeared in danger of collapse.

    The Oroville dam is nearly full following winter storms that brought relief to the state after four years of drought. Water levels were less than 7 feet (2 meters) from the top of the dam on Friday. State authorities and engineers on Thursday began releasing water from the dam after noticing that large chunks of concrete were missing from a spillway.

    California Governor Jerry Brown asked the Federal Emergency Management Agency on Friday to declare the area a major disaster due to flooding and mudslides brought on by the storms.

    As reported last night, authorities issued the evacuation order on Sunday, saying that a crumbling emergency spillway on Lake Oroville Dam in north California could give way and unleash floodwaters onto rural communities along the Feather River. “Immediate evacuation from the low levels of Oroville and areas downstream is ordered,” the Butte County sheriff said in a statement posted on social media.

    The video below summarizes the situation at the damaged dam.

    Sparking panic, the California Department of Water Resources said on Twitter at about 4:30 p.m. PST (0030 GMT Monday) that the spillway next to the dam was “predicted to fail within the next hour” despite local authorities suggesting the situation was under control for much of Saturday and early Sunday.

    As further reported on Sunday night, Butte County Sheriff Korey Honea told an earlier news briefing he was told by experts that the hole forming in the spillway could compromise the structure. Rather than risk thousands of lives, the decision was made to order evacuations.

    Officials said they feared the damaged spillway could unleash a 30-foot wall of water on Oroville, north of the state capital Sacramento. They said evacuation orders remained in place for some 188,000 people in Oroville, Yuba County, Butte County, Marysville and nearby communities and would be re-evaluated at dawn.

    Luckily, several hours later the situation appeared less dire, as the damaged spillway remained standing.  The state water resources department said crews using helicopters would drop rocks to fill a huge gouge, and authorities were releasing water to lower the lake’s level after weeks of heavy rains in the drought-plagued state. By 10 p.m., state and local officials said the immediate danger had passed with water no longer flowing over the eroded spillway. But they cautioned that the situation remained unpredictable.

    “Once you have damage to a structure like that it’s catastrophic,” acting Water Resources director Bill Croyle told reporters. But he stressed “the integrity of the dam is not impacted” by the damaged spillway. Any further deterioration may depend on further rainfall in the region, which on Saturday prompted the Lake Oroville dam to spill over for the first time in its 48 year history.

    Asked about the evacuation order, Croyle said “It was a tough call to make.” He added: “It was the right call to make.”

    The Yuba County Office of Emergency Services urged evacuees to travel only to the east, south or west. “DO NOT TRAVEL NORTH TOWARD OROVILLE,” the department warned on Twitter.

    Meanwhile, to help those affected by the spillway failure, evacuation centers were set up at a fairgrounds in Chico, California, about 20 miles northwest of Oroville, but major highways leading south out of the area were jammed as residents fled the flood zone and hotels quickly filled up. Javier Santiago, 42, fled with his wife, two children and several friends to the Oroville Dam Visitors Center in a public park above the dam and the danger zone.

    With blankets, pillows and a little food, Santiago said: “We’re going to sleep in the car.”

    The earthfill dam is just upstream and east of Oroville, a city of more than 16,000 people. At 770 feet (230 meters) high, the structure, built between 1962 and 1968, is the tallest U.S. dam, exceeding the Hoover Dam by more than 40 feet (12 meters).

    NBC 24 summarizes the latest situation at the dam:

    The Lake Oroville Dam Emergency/Auxiliary Spillway structure has suffered “potentially catastrophic damage” as a result of erosion secondary to water flow. This damage “could result in catastrophic failure of the auxiliary spillway.”

    The California Department of Water Resources (KWR) has increased exhaust water flow from the gated main spillway to 100,000 cfs in order to attempt to decrease Lake Oroville water levels. The water has quit spilling over the auxiliary spillway at this point. Helicopters will be depositing rock filled containers to strengthen the potential failure point.

    The Department of Water Resources (DWR) wants people to know that the Oroville Dam itself is sound, and is a separate structure from the auxiliary spillway.

    These developments caused the Butte County Sheriff, Kory L. Honea, to order the mandatory evacuation of the City of Oroville south to the Sutter County Line. Residents are advised to evacuate to one of the shelters listed in the shelter section below. Officials say over 188,000 people have been evacuated in Northern California due to the flooding from the spillways of Oroville Dam.

    According to Oroville lake levels have receded to the point that auxiliary spillway flows have stopped. DWR hopes to push over a million acre feet of water over the main spillway in the next week, clearing the way for much needed flood storage in the lake. Governor Brown has issued an emergency order to bolster the state’s response to the situation and support subsequent local evacuations.

    The State Operations Center at Cal OES headquarters is in full activation now, gathering and providing information and support to communities and state agencies involved in the Lake Oroville and spillway emergency. Authorities in Oroville and surrounding areas in Butte County have advised residents to evacuate due to instability of the Auxiliary Spillway at Lake Oroville. Butte County disabled residents needing assistance evacuating can dial 2-1-1 for assistance. The main number for Butte County Public Information for this situation is (530) 872-5951. Yuba or Sutter County residents can call 1-866-916-3566.

    Butte County offices in the Oroville area will be closed Monday due to the evacuations from the spillway incident.

    A Flash Flood Warning is in effect due to potential failure of a portion of the auxiliary spillway of Oroville Dam remains in effect until 4:15 P.M. Monday for south central Butte County.

    Meanwhile, authorities warn evacuees that if they find hotels/motels that they believe are exhibiting price gouging (raising their rates just for this occasion), they can report this to the state Board of Equalization. The practice is illegal.

end

Watch Attempts To Plug Oroville Dam Hole Using Rocks In Race Against Time As New Storm Forecast

After discovering a hole in Oroville Dam’s emergency spillway, officials said late Sunday that they will attempt to plug it using sandbags and rocks. But, as the LA Times notes, they stressed the situation remains dangerous and urged thousands of residents downstream to evacuate to higher ground. Video from television helicopters Sunday evening showed water flowing into a parking lot next to the dam, with large flows going down both the damaged main spillway and the emergency spillway.

They also showed lines of cars getting out of downtown Oroville. An evacuation center was set up at the Silver Dollar Fairgrounds in Chico.

Officials feared a failure of the emergency spillway could cause huge amounts of water to flow into the Feather River, which runs through downtown Oroville, and other waterways. The result could be flooding and levee failures for miles south of the dam, depending on how much water is released.

So to limit the potential damage and flooding, the primary plan of action currently in place is to plug a hole in the emergency spillway, including using helicopters dropping bags of rock into the crevasse to prevent any further erosion. Here’s the loud, chaotic scene as the choppers prepare for the rock drop via @judywbrandt on Twitter.

These sandbags full of aggregate are to be dropped into crevice below emergency spillway

Work is ongoing to prepare bags of boulders to drop onto the weakened auxiliary spillway by helicopter

has staffed and deployed to Butte Co. in support of the incident in addition to CA Swift Water TF9.

Meanwhile, as the LA Times also adds, the California National Guard is on standby and ready to assist with the Oroville Dam emergency, Adjutant General David Baldwin said during Sunday night’s press conference. The California National Guard put out an alert to all 23,000 of its soldiers and airmen telling them to be “ready to go if needed,” Baldwin said. The last time officials sent out such a broad notification was during the 1992 riots in Los Angeles, he said. The California National Guard would deploy eight helicopters to assist with spillway reconstruction; military police would also be deployed to Yuba County, Baldwin said.

* * *

Finally, the reason for the scramble to fix the dam is because a new storm system is forecast for later this week put water officials on a race against time. Bill Croyle, the acting director of the state Department of Water Resources, said they planned to continue discharging flows at a rate of 100,000 cubic feet per second, with the hope of lowering the reservoir level by 50 feet.

The biggest concern was that a hillside that keeps water in Lake Oroville — California’s second largest reservoir — would suddenly crumble Sunday afternoon, threatening the lives of thousands of people by flooding communities downstream. With Lake Oroville filled to the brim, such a collapse could have caused a “30-foot wall of water coming out of the lake,” Cal-Fire incident commander Kevin Lawson said at a Sunday night press conference. Luckily, so far this scenario has not played out.

end

Well that is all for tonight

I will see you tomorrow night

h

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