Feb 21/Gold and silver refuse to buckle under the weight of cartel paper selling/At the comex silver over 3.6 million oz are standing for delivery which is huge for a non delivery month/UK to launch similar class action lawsuit against the banks for silver and gold manipulation/Russia continues to buy gold: this month 37 tonnes/China suspends all importation of coal from North Korea/coal represents 40% of all of their exports/More trouble in Japan with the Fukushima No 2 reactor/For the first time central bankers in Spain are held accountable for the failed “Bankia” share offering/HSBC crashes by 7% on losses instead of profits/Final draft

Gold at (1:30 am est) $1237.80 DOWN $0.10

silver was : $17.99:  DOWN 3 CENTS

Access market prices:

Gold: $1236.80

Silver: $18.00



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:

TUESDAY gold fix Shanghai

Shanghai FIRST morning fix Feb 21/17 (10:15 pm est last night): $  1244.89

NY ACCESS PRICE: $1233.20 (AT THE EXACT SAME TIME)/premium $11.69


Shanghai SECOND afternoon fix:  2: 15 am est (second fix/early  morning):$   1244.89


   SPREAD/ 2ND FIX TODAY!!:  10.14

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


London FIRST Fix: Feb 21/2017: 5:30 am est:  $1233.20   (NY: same time:  $1233.40   (5:30AM)


London Second fix Feb 21.2017: 10 am est:  $1241.95(NY same time: $1241.90 (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.


For comex gold:



For silver:


For silver: FEBRUARY



Let us have a look at the data for today



In silver, the total open interest ROSE by 1085 contracts UP to 205,602 with respect to FRIDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  1.025 BILLION TO BE EXACT or 146% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold ROSE BY 864 contracts WITH THE FALL IN  THE PRICE GOLD ($2.40 with FRIDAY’S trading ).The total gold OI stands at 430,011 contracts

we had 146 notice(s) filed upon for 14,600 oz of gold.


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


We had no change in tonnes of gold at the GLD:

Inventory rests tonight: 841.17 tonnes



we had a changes in silver into the SLV: a deposit of 568,000

THE SLV Inventory rests at: 335.281 million oz



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

1. Today, we had the open interest in silver ROSE by 1085 contracts UP to 205,602 AS SILVER WAS DOWN 4 CENTS with FRIDAY’S trading. The gold open interest ROSE by 864 contracts UP to 430,011 WITH THE FALL IN THE PRICE OF GOLD OF $2.40  (FRIDAY’S TRADING)

(report Harvey


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg



i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 13.36 POINTS OR .41%/ /Hang Sang CLOSED DOWN 182.45 POINTS OR 0.76% . The Nikkei closed UP 130.36 POINTS OR 0.68% /Australia’s all ordinaires  CLOSED DOWN 0.09%/Chinese yuan (ONSHORE) closed DOWN at 6.8845/Oil ROSE to 54.30 dollars per barrel for WTI and 56.96 for Brent. Stocks in Europe ALL IN THE GREEN EXCEPT LONDON. Offshore yuan trades  6.8668 yuan to the dollar vs 6.8845  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  WIDENS CONSIDERABLY AS POBC ATTEMPTS TO STOP USA DOLLARS FROM LEAVING CHINA’S SHORES. ONSHORE YUAN WEAKER AS IS OFFSHORE YUAN COUPLED WITH THE STRONGER DOLLAR




i)China has had enough with North Korea.  They are suspending all imports of North Korean coal which makes up close to 40% of all of their exports.

This is very deadly to North Korea:

( Reuters)

ii)The following explains why North Korea is in serious trouble with the banning of all coal imports:

( zero hedge)


We have lots of trouble in Japan with respect to the Fukushima disaster.  Now a second robot breaks down inside the hot No 2 reactor site.

No wonder fish are turning up dead on the west coast of the uSA.  This is a huge disaster and the story is ongoing

(courtesy zero hedge)


Sunday night;

Sunday night China sends a message to Janet that she should not raise rates.  China weakens the yuan and short term Chinese rates skyrocket:  the 1 week CNH Hibor rises from 3.75% up to 7.388%

( zerohedge)



Quite a few PD party members which are in power threatens to splinter off and form their own party as turmoil reigns supreme in Italy.  This forced Renzi to quite as Party Leader (Gentilioni is the Prime Minister and a Renzi ally).  This should trigger a re election battle.

( zero hedge)





a)The French/German spread bond yields blows out hugely as investors are waking up to the fact that in the French elections, Le Pen, a Euroskeptic has a chance of winning;

( zero hedge)

b) Tuesday:

LePen gaining on all rivals in the first and second round polls.

( zero hedge)

The following is an amazing story.  For the first time error central bankers are now being held accountable in the collapse of Bankia.  Too bad the central bankers did not listen to us: the entire “rescue” operation of the Spanish banks was ill fated from the first hour.  It has no chance to survive and it brought down many small investors who could ill afford the losses

( Don Quijones/WolfStreet)

( zero hedge)

( zero hedge)

This surprised everyone:  a huge revenue drop causes HSBC to crash by 7%. Major writedowns at this scandal plagued company.

(courtesy zerohedge)

( zerohedge)

viii)We have two clear axes with respect to the EU:

(courtesy zero hedge)


I wonder if any foul play is prevalent here: Russian Ambassador Churkin dies suddenly in NY

(courtesy zero hedge)



On Friday, Trump was mocked when he stated that Sweden has a migrant problem. Over the weekend he was vindicated after violent riots erupt in the Swedish suburb:

( zero hedge)


i)Bank of America’s Blanch believes with the increased rigs placed by the shale boys will increase production by 700,000 barrels per day.  Thus for 5 days:  3.5 million

( zero hedge)

ii)Gasoline inventories are now at 27 yr highs.  Generally when you see both crude oil inventories and gasoline levels  at record highs you have a problem

( Nick Cunningham/OilPrice.com)


none today


i)A huge story:  Investors worldwide could become plaintiffs against the banks in the class action suit against the UK bullion banks. Leon Kaye will probably file its class action suit shortly..
that should be fun…

(  GATA/Leon Kay lawyers/UK)

ii)An Arizona bill would remove state taxes on profits from the sale of gold coins.  That should have been done long ago as there should be no tax on “money”

( Fischer/Arizona Daily Star/Tucson/GATA)

iii)This is why we pay no attention to the mainstream media.  The World Gold Council while interviewing Greenspan fails to ask him on gold leasing and central bank intervention with respect to gold


iv)Why should this currency be different from any other:  JPMorgan and HSBC are among a dozen banks facing fines for rigging the South African rand

( Bloomberg)

v)Have fun with this:  Ronan Manly illustrates beautifully how paper gold influences the price of physical gold

( Ronan Manly/Bullionstar)

vi)A good illustration of the huge problems facing ordinary Greek citizens after 7 years of bailouts

( Reuters/GATA)

vii)Chinese citizens are sure anxious to get their yuan/dollars out of China as bitcoin soars above 1100.00

( zero hedge)

viii)Is the Fed having problems keeping gold in check?

( Dave Kranzler/IRD)


i)Soft data USA PMI manufacturing index disappoints as the hope category disappoints:

Mfg: 54.3 a drop from 55.0

Service:  53.9 down from 55.6

( zerohedge)


ii)Wow!! Jay Sekulow a prominent lawyer in the USA states that Obama changed the way phone conversations/recordings are distributed.  On jan 3 2017 Obama did an executive order whereby 16 other agencies are to receive the above information gathering enterprise. It is illegal to pass on conversations from private  or government officials without a warrant and that did not stop Obama

( zerohedge)

( Michael Snyder/EconomicCollapseBlog)


iv)An in depth look at the Michael Flynn saga through the eyes of David Stockman

a must read…

( David Stockman/Ron Paul Institute)

v)Your new National Security Advisor replacing Michael Flynn

(courtesy zerohedge)

vi)A new memo from the Dept of Homeland Security now reveals that just about anyone living in the USA illegally is now subject to deportation.  They will target the criminals but even a minor offense will subject the illegals back to their home country:

(courtesy zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 864 CONTRACTS UP to an OI level of 430,011 WITH THE FALL IN THE  PRICE OF GOLD ( $2.40 with FRIDAY’S trading). 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 46 contracts UP to 949.   We had 20 notice(s) served upon yesterday and therefore we GAINED 66 contracts or an additional 6600 oz will stand for delivery and  IT LOOKS LIKE THE CASH SETTLEMENTS HAVE STOPPED THOSE WHO REMAIN ARE NOT INTERESTED IN A FIAT PROFIT BUT REAL METAL.   The next non active contract month of March saw it’s OI FALL by 80 contracts DOWN TO  1880.The next big active month is April and here the OI FELL by 710 contracts DOWN to 281,062.

We had 146 notice(s) filed upon today for 14,600 oz

 And now for the wild silver comex results.  Total silver OI ROSE by 1085 contracts FROM 204,517 UP TO 205,602 AS THE PRICE OF SILVER FELL TO THE TUNE OF 4 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).

The  active month of February saw the OI RISE BY A WHOPPING 173 contract(s) UP TO  313.  We had 0 notice(s) served YESTERDAY so we GAINED 173 CONTRACTS  or an additional 865,000 oz will stand for delivery.

The next big active delivery month is March and here the OI decrease by 7,676 contracts down to 67,711 contracts. For comparison purposes last year on the same date only 60,323 contracts were standing.

We had 3 notice(s) filed for 15,000 oz for the FEBRUARY contract.

VOLUMES: for the gold comex

Today the estimated volume was 245,260  contracts which is good.

Yesterday’s confirmed volume was 177,985 contracts  which is good

volumes on gold are getting higher!

INITIAL standings for FEBRUARY
 Feb 21/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
7233.975 OZ
Deposits to the Dealer Inventory in oz nil oz


Deposits to the Customer Inventory, in oz 
203.64 oz
No of oz served (contracts) today
146 notice(s)
14,600 oz
No of oz to be served (notices)
803 contracts
80,300 oz
Total monthly oz gold served (contracts) so far this month
5291 notices
5291 oz
16.457 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  214,235.3   oz
Today we HAD 0 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 1  customer deposit(s):
 i) Into Brinks: 203.64 oz
total customer deposits; 203.64 oz
We had 1 customer withdrawal(s)
 i) Out of HSBC: 7233.975 oz
total customer withdrawal: 7233.975 oz
We had 0  adjustment(s)

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 146 contract(s)  of which 54 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

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 (5291) x 100 oz or 529,100 oz, to which we add the difference between the open interest for the front month of FEBRUARY (949 contracts) minus the number of notices served upon today (146) x 100 oz per contract equals 602,800 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 (5145) x 100 oz  or ounces + {(903)OI for the front month  minus the number of  notices served upon today (20) x 100 oz which equals 609,400 oz standing in this non active delivery month of FEBRUARY  (18.954 tonnes)
 we GAINED 66 contracts or an additional 6600 oz will stand in this active delivery month. 
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 16.457 tonnes vs 7.9876 at the end of Feb).
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/ 18.954 tonnes
total for the 14 months;  244.958 tonnes
average 17.497 tonnes per month vs last yr  59.51 tonnes total for 14 months or 4.250 tonnes average per month (last yr).
Total dealer inventory 1,418,640.029 or 44.125 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,941,217.482 or 278.296 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.296 tonnes for a  loss of 25  tonnes over that period.  Since August 8/2016 we have lost 76 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.
And now for silver
 feb 21. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
146,907.67 0z
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 2,985.35 oz
No of oz served today (contracts)
(nil OZ)
No of oz to be served (notices)
140 contracts
(700,000  oz)
Total monthly oz silver served (contracts) 410 contracts (2,050,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month   6,061,569.5 oz
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 2 customer withdrawal(s):
i) Out of Scotia::  145,939.97 oz
ii) Out of Delaware: 967.70 0oz
 we had 1 customer deposit(s):
 i)Into Brinks:2975.35  oz
***deposits into JPMorgan have now stopped.
total customer deposits;  2975.35  oz
 we had 0  adjustment(s)
The total number of notices filed today for the FEBRUARY. contract month is represented by 3 contract(s) for 15,000 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  413 x 5,000 oz  = 2,065,000 oz to which we add the difference between the open interest for the front month of feb (313) and the number of notices served upon today (3) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the FEBRUARY contract month:  413(notices served so far)x 5000 oz  + OI for front month of FEB.( 313 ) -number of notices served upon today (0)x 5000 oz  equals  3,615,000 oz  of silver standing for the Feb contract month. This is  huge for a non active delivery month in silver. 
We GAINED 173 contracts or an additional 865,000 oz will stand for delivery. It sure looks like the silver comex is under siege for physical metal.
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.
Volumes: for silver comex
Today the estimated volume was 148,953 which is gigantic!!!
FRIDAY’S  confirmed volume was 75,176 contracts  which is huge.
To give you an idea of volume today’s confirmed volume::  148,953 contracts equates to 744 million oz or 106% of ANNUAL GLOBAL PRODUCTION EX CHINA EX RUSSIA
Total dealer silver:  30.081 million (close to record low inventory  
Total number of dealer and customer silver:   184.088 million 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.


And now the Gold inventory at the GLD

FEB 21/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

feb 17/a withdrawal of 2.37 tonnes of gold from the GLD/Inventory rests at 841.17 tonnes

FEB 16/we had no changes in the GLD inventory today/Inventory rests at 843.54 tonnes

Feb 15./another deposit of 2.67 tonnes of gold into the GLD inventory despite another attempted whacking of gold/inventory rests at 843.54 tonnes

FEB 14/another deposit of 4.14 tonnes of gold into the GLD inventory/rests at  840.87 tonnes

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: 5.04 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

Feb 21/2017/ Inventory rests tonight at 841.17 tonnes


Now the SLV Inventory
FEB 21/a deposit of 568,000 oz into the SLV/Inventory rests at 335.281 million oz
feb 17/2017/again no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz/
FEB 16/we had no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz/
Feb 15./no changes in silver inventory at the SLV/inventory rests at 334.713 million oz
FEB 14/no changes in silver inventory at the SLV/Inventory rests at 334.713 million oz
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/
Feb 21.2017: Inventory 335.281  million oz

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 8.0 percent to NAV usa funds and Negative 8.0% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.3%
Percentage of fund in silver:39.5%
cash .+0.2%( feb 21/2017) 
2. Sprott silver fund (PSLV): Premium FALLS to -.36%!!!! NAV (Feb 21/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS TO – 0.30% to NAV  ( feb 21/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -0.36% /Sprott physical gold trust is back into NEGATIVE territory at -0.30%/Central fund of Canada’s is still in jail.


Major gold/silver trading/commentaries for TUESDAY



Huge story!!  Russia continues with its physical gold buying: 37 tonnes and no doubt the gold is purchased off of the SGE.  SGE is getting it’s gold through Switzerland via England.


Russia’s Gold Buying Is Back – Buys One Million Ounces In January

Russia’s Gold Buying Is Back – Buys One Million Ounces In January

Russia gold buying returned in January with the Russian central bank buying a very large 1 million ounces or 37 metric tonnes of gold bullion.

The increase in the gold reserves came after Russia did not buy a single ounce in December – a move seen as potentially a signal or an olive branch to the U.S. and the incoming Trump administration.


It also came after Russia had accelerated its gold buying in the final months of the Obama Presidency. October 2016 saw an increase of 1.3 million ounces or 48 metric tonnes and this was the largest addition of gold to the Russian monetary reserves since 1998. Indeed, it was the biggest monthly gold purchase in this millennium for the Russian central bank.

November 2016 saw another increase of 1 million ounces. Some analysts saw the increased Russian gold buying as a parting ‘gift’ and warning shot by Putin and Russia to his rival outgoing President Obama and the monetary and financial elites in the U.S.

Russian gold reserves increased a very large 199.1 tonnes in 2016 alone.

Concerns about systemic risk, currency wars and the devaluation of the dollar, euro and other major currencies has led to ongoing diversification into gold bullion purchases by large creditor nation central banks such as Russia and of course China.

There was silly speculation in 2013, 2014 and 2015 that the financial challenges facing Russia and the depreciation of the ruble could lead to Russia selling some of its increasingly large gold reserves. We pointed out on Bloomberg TV at the time that this was highly unlikely and pointed out that Russia was much more likely to sell some of its very large dollar and euro reserves and was more likely to continue to diversify into gold.

Russia has been steadily buying bullion since before the global financial crisis and is now the sixth-biggest holder of gold reserves internationally – after the U.S., Germany, Italy, France and the IMF.

The monetary diversification accelerated during the global financial crisis and in recent years. It has more than tripled its gold reserves since 2005 and holds the most gold since at least 1993, IMF data shows.

Although, it is worth noting that countries like Lebanon, Egypt, Laos, Pakistan, Kazakhstan and Turkey all have a much bigger share of gold in their foreign exchange reserves than Russia does – suggesting the recent trend is likely to continue. Especially if politics intercedes and the relationship between Russia, Trump’s U.S., the EU and NATO worsens again in the coming months.

Russia places much strategic importance on its gold reserves. Both President Putin and Prime Minister Medvedev and have been photographed on numerous occasions holding gold bars and coins. In May 2015, we pointed out how the Russian central bank views gold bullion as “100% guarantee from legal and political risks.”

Astute, risk aware investors are following Russia’s lead by diversifying and having an allocation to physical gold coins and bars.






A huge story:  Investors worldwide could become plaintiffs against the banks in the class action suit against the UK bullion banks. Leon Kaye will probably file its class action suit shortly..
that should be fun…

(courtesy  GATA/Leon Kay lawyers/UK)


Investors worldwide could become plaintiffs in class-action suit in UK against bullion banks


7:57p ET Saturday, February 18, 2017

Dear Friend of GATA and Gold:

Investors in nine countries have responded to the announcement two weeks ago that a British law firm, Leon Kaye Solicitors, is contemplating bringing a class-action lawsuit in the United Kingdom under that country’s Competition Act against bullion banks suspected of manipulating the gold and silver markets:


The firm wishes to remind investors that they could become plaintiffs in such a lawsuit even if they live outside the United Kingdom.

Information about the potential lawsuit is posted at the Leon Kaye Solicitors internet site here:


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




An Arizona bill would remove state taxes on profits from the sale of gold coins.  That should have been done long ago as there should be no tax on “money”

(courtesy Fischer/Arizona Daily Star/Tucson/GATA)

Arizona bill would remove state tax on profit from sale of gold coins


By Howard Fischer
Arizona Daily Star, Tucson
Sunday, February 12, 2017

PHOENIX, Arizona — Arguing that federal policies have made paper money “virtually worthless,” Arizona lawmakers are moving to allow residents to invest in gold coins and not have to pay state taxes on any profits they make when they sell them.

Legislation awaiting a final House vote would carve an exemption in existing laws that require people to report — and pay taxes — on capital gains. So, if you buy art, jewelry, or an antique car for $10,000 and sell if for $12,000, you owe the state tax on that $2,000 profit.

But Rep. Mark Finchem, R-Oro Valley, argues that’s not true if you’re buying U.S. gold coins. He said it’s simply exchanging one form of U.S. currency for another.

“If you were to exchange four quarters for a dollar bill, that’s not a taxable event,” Finchem explained during House debate last week on his HB 2014. …

… For the remainder of the report:





This is why we pay no attention to the mainstream media.  The World Gold Council while interviewing Greenspan fails to ask him on gold leasing and central bank intervention with respect to gold

(courtesy WGC/GATA)


World Gold Council fails to ask Greenspan about central bank intervention against gold


8:54p ET Saturday, February 18, 2017

Dear Friend of GATA and Gold:

With the February edition of its newsletter, Gold Investor, the World Gold Council inadvertently proclaims its uselessness by interviewing former Federal Reserve Chairman Alan Greenspan about gold without ever asking him about the largely surreptitious involvement of central banks in the gold market and the objectives of that involvement.

This is an especially spectacular failure in light of Greenspan’s admission of that involvement in his testimony to Congress in July 1998, wherein he acknowledged that central banks are prepared to lease gold in “increasing quantities” to suppress its price:


Of course the World Gold Council isn’t alone in avoiding these crucial questions. These questions are prohibited throughout the mainstream financial news media. Indeed, it has begun to seem that Greenspan conditions interviews on pledges not to ask him about the surreptitious intervention of central banks in the gold market, though such interventions have been extensively documented by GATA for many years, as here:


But mainstream financial news organizations don’t purport to be representing gold producers and investors as the World Gold Council does. Once again the World Gold Council has indicated that it exists primarily to ensure that there never is a world gold council.

The World Gold Council’s February newsletter is posted in PDF format here —


— with the Greenspan interview beginning on Page 11.

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




Why should this currency be different from any other:  JPMorgan and HSBC are among a dozen banks facing fines for rigging the South African rand

(courtesy Bloomberg)

JPMorgan, HSBC among dozen banks facing fines for rigging S. African rand


By Renee Bonorchis and Michael Cohen
Bloomberg News
Wednesday, February 15, 2017

South Africa’s antitrust investigators have urged that a dozen banks be fined for colluding and manipulating trades in the rand, potentially becoming the latest in a string of penalties handed to lenders around the world for rigging currencies.

South African’s Competition Commission identified lenders including Bank of America Merrill Lynch, HSBC Holdings Plc, BNP Paribas SA, Credit Suisse Group AG, HSBC Holdings Plc, JPMorgan Chase & Co., and Nomura Holdings Inc. as among those that participated in price fixing and market allocation in the trading of foreign currency pairs involving the rand since at least 2007. It referred the case to an antitrust tribunal, concluding an investigation that began in 2015. …

… For the remainder of the report:






Have fun with this:  Ronan Manly illustrates beautifully how paper gold influences the price of physical gold

(courtesy Ronan Manly/Bullionstar)

Bullion Star graphic describes how ‘paper gold’ controls the metal’s price


1:10p ET Monday, February 20, 2017

Dear Friend of GATA and Gold:

Bullion Star today publishes an elaborate informational graphic describing how bullion banks create almost infinite amounts of imaginary “paper gold” to control the monetary metal’s price and prevent the price from being determined by physical demand.

Bullion Star summarizes the graphic’s topics this way:

— The identities of the bullion banks.

— The fractional-reserve nature of bullion banking and the paper gold creation process.

— How the staggeringly large paper gold trading volumes are generated.

— The gold price discovery process and how the price of gold is set in London by unallocated trading that channels gold demand away from real physical gold and into paper.

— The secretive nature of the bullion banking club and how its activities in the City of London are deliberately shrouded in secrecy.

— How new participants in the London gold market claim to be providing competition but are actually perpetuating the underlying unallocated gold account system of trading.

The graphic can be found at Bullion Star here:


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




A good illustration of the huge problems facing ordinary Greek citizens after 7 years of bailouts

(courtesy Reuters/GATA)


After seven years of bailouts, Greeks just sink deeper in poverty


By Karolina Tagaris
Monday, February 20, 2017

ATHENS, Greece — Greek pensioner Dimitra says she never imagined a life reduced to food handouts: some rice, two bags of pasta, a packet of chickpeas, some dates, and a tin of milk for the month.

At 73, Dimitra — who herself once helped the hard-up as a Red Cross food server — is among a growing number of Greeks barely getting by. After seven years of bailouts that poured billions of euros into their country, poverty isn’t getting any better. It’s getting worse like nowhere else in the European Union.

“It had never even crossed my mind,” she said, declining to give her last name because of the stigma still attached to accepting handouts in Greece. “I lived frugally. I’ve never even been on holiday. Nothing, nothing, nothing.” …

… For the remainder of the report:






Chinese citizens are sure anxious to get their yuan/dollars out of China as bitcoin soars above 1100.00

(courtesy zero hedge)

Bitcoin Soars Above $1100, Near Record Highs As Chinese Bypass Crackdown

Despite concerted efforts by authorities to crackdown on capital outflows – specifically through virtual currencies – prices for Bitcoin are soaring as the Chinese find way around regulatory controls. Bitcoin just topped $1100 – near record highs – as Chinese traders shift their action off regulated-exchanges to local peer-to-peer marketplaces.

China’s central bank has stepped up oversight of bitcoin exchanges this year, leading major trading platforms to impose halts on withdrawals and other checks to appease the regulator. But, as Quartz reports, Chinese traders aren’t playing along—they are apparently flocking to peer-to-peer marketplaces to continue buying and selling bitcoin.

As Yuan trading on bitcoin exchanges has plummeted…

Quartz notes that one of the longest established peer-to-peer marketplaces is LocalBitcoins, which acts as a kind of directory for buyers and sellers to find each other. Users can arrange to meet in person, on chat platforms, or talk on the phone to arrange exchanges involving bitcoin.

Yuan volumes on the marketplace have exploded in the past week. Trading on LocalBitcoins currently accounts for about 6% of the total trading volume in yuan, according to data source Crypto Compare.


And Bitcoin prices have practically erased all of the Chinese crackdown losses…


It seems the Chinese will not be stopped in their effort to get capital out of the country – even as the PBOC spends billions propping up the currency in the short-term to create the illusion of stability.




Is the Fed having problems keeping gold in check?

(courtesy Dave Kranzler/IRD)



Bloomberg News Admits The Fed Manipulates Gold

 — Published: Tuesday, 21 February 2017 | Print  | Comment – New! 

By Dave Kranzler

“Yellen Can’t Halt Trump Gold Rally That Funds Bet Against” – That was the headline in a Bloomberg news report that was released on Sunday afternoon. There’s a lot going on in that headline – none of it accurate except for the fact that gold is moving higher despite the efforts of western Central Banks to cap the price.

The basic premise of the report is that gold is moving higher in defiance of the Fed’s apparent move to raise interest rates. Reading through the report reveals even more misleading and completely false information than is conveyed by the headline. Here’s a link if you want to read the article:  Bloomberg/Yellen/Gold.

The headline itself and the article content are both highly problematic, riddled with disinformation and completely inaccurate assertions.  Anyone actually who might have read the article and trusted the content has been taken down to “ground zero” intellectually.  Propaganda for the ignorant.  I will be reviewing several ways in which the article content is inaccurate, if not intentionally fraudulent, in the upcoming issue of theMining Stock Journal.

That said, the headline outright acknowledges that the Fed’s goal with respect to the price of gold is to prevent it from moving higher. The idea that Yellen “can’t halt” the rising price of gold implies that such intervention is part of the Fed’s mandate.  It’s the first time I can recall in 16 years of researching, trading and investing in the precious metals market that the mainstream financial media, unwittingly or not,  has acknowledged that the Federal Reserve attempts to intervene in the gold market.

If the implied message of the headline was inadvertent, it means that conversations with respect to the Fed and its role in preventing the price of gold from rising are actively occurring in meeting rooms and reporter “bullpens” at several financial media organizations, with orders from “above” to never publish the truth.   Imagine if the Washington Post had withheld the news about Watergate…

Today’s action in gold exemplifies the tenor of the Bloomberg report.  Almost as if “on cue,” in deference to Yellen’s attempt to “halt” the gold rally from yesterday, gold was slammed for $9 this morning.  The reason generally attributed is “March rate hike hopes”LINK.   I guess that’s all it takes.  Yellen or some Fed clown exhales “rate hike on the table in March” and gold gets slammed by the trading computers.

Allegedly Germany has repatriated a large portion of its gold ahead of schedule (why it was supposed to take 7 years no one can explain).  Notwithstanding whether or not the gold is actually sitting physically in a Bundesbank vault, the announcement of the early repatriation conveys a sense of urgency to do so.  Furthermore, the eastern hemisphere countries are hoovering gold like there’s no tomorrow for fiat currency.

The Feds and the western Central Banks are exuding fear with respect to gold. The escalation in anti-gold propaganda reflects this sense of desperation, as do the shallow sell-offs followed by a move higher in paper gold that are initiated by LBMA and Comex paper traders after the Asian markets close for the day.  The conclusion remains that all sell-offs in the gold market, like today’s, should be capitalized upon by adding to positions in physical gold and silver and in mining stocks.


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


1 Chinese yuan vs USA dollar/yuan WEAKER AT  6.8845(HUGE DEVALUATION SOUTHBOUND   /OFFSHORE YUAN WIDENS   TO 6.8668 / Shanghai bourse UP 13.36 POINTS OR .41%   / HANG SANG CLOSED DOWN 182.45 POINTS OR 0.76% 

2. Nikkei closed UP 130.36 POINTS OR 0.68%   /USA: YEN RISES TO 113.66

3. Europe stocks opened ALL IN THE GREEN EXCEPT LONDON      ( /USA dollar index RISES TO  101.52/Euro DOWN to 1.0532


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  54.30  and Brent: 56.96

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 DOWN for WTI and DOWN for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.324%/Italian 10 yr bond yield UP  to 2.225%    

3j Greek 10 year bond yield FALLS to  : 7.21%   

3k Gold at $1230.90/silver $17.96(8:15 am est)   SILVER BELOW RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 23/100 in  roubles/dollar) 57.75-

3m oil into the 54 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 HUGE   DEVALUATION SOUTHBOUND   from POBC.


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0103 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0639 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +.324%


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 2.452% early this morning. Thirty year rate  at 3.055% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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


US Futures, European Stocks Rise Despite HSBC Plunge; Dollar, Oil Jump

 European stocks rose again with S&P futures higher, while Asian stocks were mixed. The dollar rose jumped on hawkish comments by Philly Fed’s Harker, oil rose following optimistic OPEC comments, while gold dropped. Markets have largely ignored the negative result by financial heavyweight HSBC, which posted its largest fall since mid-2015 after reporting a 62% plunge in pretax profit, weighing on UK financials, with the FTSE 100 modestly underperforming.

The Bloomberg Dollar Spot Index rose the most in more than three weeks after a Federal Reserve policy maker reinforced the chances for a U.S. interest-rate increase as soon as next month. The U.S. currency advanced against most of its major peers after Philly Fed President Patrick Harker told MNI in a Friday interview he “would not take March off the table at this point.” Recent comments from policy makers have leaned on the hawkish side. A voting member of the rate-setting Federal Open Market Committee this year, Harker had said Feb. 15 that he sees three 25-basis point rate increases as appropriate for 2017.

In Europe, mining stocks climbed as surging commodities prices boosted corporate earnings even as HSBC fell the most since August 2015 after its profit missed estimates. Gold slumped and oil climbed toward $54 a barrel. As a result the Stoxx 600 climbed 0.2% as gains in mining companies overshadowed HSBC Holdings Plc’s results. Financial heavyweight HSBC has posted its largest fall since mid-2015 after reporting a 62% fall in pretax profit, weighing on UK financials, with the FTSE 100 modestly underperforming. Elsewhere, mining names have seen a lift with BHP returning to profitability while Anglo American results beat analyst expectations. However, despite the early softness, equities saw a turnaround amid better than expected PMI figures for the Eurozone and Germany. Germany’s DAX rose 0.5 percent, with automakers including Daimler AG and Volkswagen AG among the top gainers.

A closer look at HSBC Holdings which today reported a 62% slump in annual pre-tax profit that fell way short of analysts’ estimates as the British bank took hefty writedowns from restructuring and pointed to brakes on revenue growth. For the quarter, HSBC reported a $3.4 billion fourth-quarter loss, against analysts’ expectations for a profit, on a $3.2 billion impairment in its private banking business as the lender’s accounting valuation of the unit caught up with years of declining performance. HSBC CEO Stuart Gulliver said the restructured private bank is now viable as a slimmed-down operation providing advice to wealthy clients referred from the lender’s other business lines.

“What this doesn’t mean is that we are selling the private bank… it means we have restructured the private bank and that’s now behind us,” Gulliver told Reuters.

As a result, HSBC shares slid more than 6 percent after the company reported revenues fell by a fifth from 2015, underscoring the challenge it faces to boost returns amid low global interest rates and slowing economic growth in its core markets of Britain and China. Europe’s biggest bank by assets generated profit before tax of $7.1 billion in 2016 compared to $18.87 billion for the previous year, well below the average analyst estimate of $14.4 billion. HSBC also announced a new $1 billion share buy-back, as the lender continued to return cash to shareholders from the sale of its Brazilian business. The bank signaled a number of factors that would pressure its revenues in 2017, including a $500 million increase in regulatory capital costs, lower interest rates in Britain and adverse foreign exchange rates.

“We think weak income trends and significant guided headwinds mean consensus downgrades today,” Jason Napier, analyst at UBS, wrote in a research note on Tuesday.

Also in Europe we got the latest PMI data which showed that the Eurozone private sector and manufacturing growth unexpectedly accelerated to near a six-year high in February and job creation reached its fastest since August 2007, propelled by strong demand and optimism about the future, the surveys found. IHS Markit’s eurozone flash composite Purchasing Managers’ Index, seen as a good overall growth indicator, rose sharply to 56.0, the highest since April 2011, from 54.4 in January, reversing expectations for a slight dip to 54.3. The broad-based acceleration, which showed France’s momentum getting close to Germany’s, suggests that if sustained, economic growth could hit 0.6 percent in the first quarter, according to Markit.

“The increased momentum is due to demand growing at a stronger rate, but also that upturn becoming more broad-based,” said Chris Williamson, chief business economist at IHS Markit. “Importantly, what we now have is France joining the party. It’s been a laggard in the region, and a drag on the euro zone upturn for a few years … and there are finally signs the drag is easing.”

Also of note in Europe, we saw Greek bonds rally, with 2y yield dropping 115bps to 8.31%, while 10y falls 25bps to 7.25%.  The positive sentiment emerged after creditors agreed on Monday for auditors to resume talks in Athens over steps needed to continue bailout of nation. The Greek government accepted to legislate reforms that will be implemented starting 2019 under the prerequisite that they are fiscally neutral, a Greek govt official said in e-mail to reporters, speaking on condition of anonymity. Greek bond strip, the most liquid bundle of the country’s government bonds issued after its last restructuring, is up 1.39c to 68.27c

Asian stocks rose, with South Korea’s benchmark climbing 0.9 percent to the highest level since July 2015. Hong Kong’s Hang Seng slipped 0.8 percent, the most in more than a month. Japan’s Topix index, which reached a peak at the start of the year, is trading within a range of about three percentage points over the past 49 days — the narrowest since 1988.  Bourses in Japan are riding high perhaps reflecting the decent flash manufacturing PMI print in the country which saw the reading bounce 0.8pts to 53.5 and to the highest since March 2014. Elsewhere the Hang Seng and Kospi rose while in China the Shanghai Comp is +0.4%. There’s a story going around on Bloomberg suggesting that Chinese authorities may be considering easing limits on foreign ownership of life insurers, which may also be helping the positive tone.

Global equities continue to trade near a record as hopes the Trump rally will continue to generate optimism in economic growth amid signs of an inflation pickup. Yet there remains caution in the markets, with the dollar trading below this year’s highs and investors clamoring for detail on spending plans under Trump’s administration.

In global rates, the yield on 10-year Treasuries advanced four basis points to 2.45 percent. German 10-year yields rose three basis points after better-than-expected PMI euro- area manufacturing data. The yield on the equivalent French benchmark climbed four basis points. Default insurance on HSBC’s subordinate bonds increased one basis point to 140. The smaller-than-expected buyback could boost the bank’s senior bonds as it implies a less-leveraged balance sheet.

The Fed releases minutes this week from its most recent meeting, giving investors a look into how members see Trump’s policies. Data should show the U.S. housing market perking up at the start of the year. The PMI is expected to rise slightly. It’s International Petroleum Week in London and top OPEC, government and company officials are attending.

Market Snapshot

  • S&P 500 futures up 0.2% to 2,353.00
  • STOXX Europe 600 up 0.2% to 371.90
  • MXAP up 0.01% to 145.16
  • MXAPJ down 0.05% to 466.90
  • Nikkei up 0.7% to 19,381.44
  • Topix up 0.6% to 1,555.60
  • Hang Seng Index down 0.8% to 23,963.63
  • Shanghai Composite up 0.4% to 3,253.33
  • Sensex up 0.4% to 28,773.36
  • Australia S&P/ASX 200 down 0.07% to 5,791.03
  • Kospi up 0.9% to 2,102.93
  • German 10Y yield rose 1.8 bps to 0.314%
  • Euro down 0.6% to 1.0552 per US$
  • Brent Futures up 0.9% to $56.68/bbl
  • Italian 10Y yield fell 0.6 bps to 2.184%
  • Spanish 10Y yield rose 0.8 bps to 1.617%
  • Brent Futures up 0.9% to $56.68/bbl
  • Gold spot down 0.6% to $1,230.84
  • U.S. Dollar Index up 0.5% to 101.40

Top Overnight News from BBG:

  • HSBC Shares Fall After Missing Profit Estimates on Revenue Drop
  • Burger King Owner Said in Advanced Talks to Buy Popeyes Chain
  • Buffett Takes His Own Advice in Walking Away From Unilever Bid
  • Fed’s Harker Not Taking March Rate Rise Off the Table, MNI Says
  • Fed Minutes May Show Inflation Confidence, Discuss Balance Sheet
  • Telefonica to Sell Telxius Stake to KKR for $1.35 Billion
  • InterContinental Hotels Rises After Announcing Special Dividend
  • Qualcomm Says Samsung Scandal Weakens Korea Antitrust Ruling
  • Trump Picks Outspoken Army ‘Rebel’ as National Security Adviser
  • China Said to Draft Rules to Rein in Asset Management Risks
  • Canadian Court Approves InterOil Transaction With Exxon Mobil
  • Uber Taps Eric Holder to Investigate Discrimination Claims
  • Iron Futures Extend 2017’s Rally to 33% as BHP Warns on Outlook
  • BlackRock Says Space Images Can Help Monitor Chinese Companies

Asia equity markets traded mixed with Wall Street closed the day prior, with Nikkei 225 (+0.7%) outperforming amid a weak JPY with USD/JPY holding firmly above 113.00. ASX 200 (-0.1%) recovered most of its early losses after declines seen in the gold and utilities sectors weighed the index. Shanghai Comp. (+0.4%) was boosted by retail names and the telecoms sector, despite a weak CNY 100bIn liquidity injection by the PBoC, while Hang Seng (-0.8%) underperformed after HSBC reported disappointing FY16 earnings and index heavyweight Tencent shares saw losses of over 1%. Finally, 10yr JGBs were flat despite a strong enhanced liquidity auction, while the 40yr yield printed 11-month highs

Top Asian News

  • China Said to Mull Easing Foreign Stake Limits in Life Insurers
  • Chinese Banks’ Off-Book Wealth Products Exceed $3.8 Trillion
  • Ambani’s Jio to Start Charging for Services as Rivals Cry Foul
  • China Retailers Surge as CICC Lauds Alibaba’s ‘New Retail’ Model
  • China Said to Mull Easing Limits on Foreign Life Insurers
  • Over Twinkies and Tweets, China Seeks Clues on Trump Policy
  • Hong Kong Developers Advance Ahead of City’s Budget Speech

European bourses rose after a soft start with price action dictated by the latest batch of earning updates. Financial heavyweight HSBC has posted its largest fall since mid-2015 after reporting a 62% fall in pretax profit, consequently weighing on UK financials, with the FTSE 100 modestly underperforming. Elsewhere, mining names have seen a lift with BHP returning to profitability while Anglo American results beat analyst expectations. However, despite the early softness, equities saw a turnaround amid better than expected PMI figures for the Eurozone and Germany. Across fixed income markets, peripheral debt is outperforming led by Greece with markets somewhat positive over talks between Greece and its creditors yesterday with the 2-yr yield falling 140bps. Elsewhere, GE-FR spread has dropped back below 80bps after yesterday hitting its highest level since mid-2012 following the continued narrowing between Le Pen and her opponents in the French Presidential polls.

Top European News

  • Euro-Area Economy Picks Up Speed as Orders and Optimism Surge
  • Le Pen Advances in French Polls as Security Concerns Sway Voters
  • Citigroup Agrees $5.4 Million Fine to Settle Rand Collusion
  • Rosneft to Buy Crude Oil From Kurdistan Amid Expansion in Iraq
  • U.K. Posts Record Surplus in Pre-Budget Boost for Hammond
  • Brent Oil Holds Gain as Citigroup Lifts Short-Term Price Outlook
  • Vucic Clears Hurdle to Serb Presidency as Incumbent Steps Aside

In currencies, the USD is pushing higher, but the drivers are a little mixed as UST yields show modest gains on the day as yet. The key 10yr rate is still around 2.45%, still well inside the recent 2.30-2.55% range, but the modest gains have been enough to put USD/JPY back in the upper 113.00’s. The Bloomberg Dollar Spot Index gained 0.5 percent as of 10:30 a.m. in London. The greenback rose after Market News International cited Harker, who votes on policy this year, saying a rate move next month is not “off the table at this point.” That followed hawkish congressional testimony last week from Fed Chair Janet Yellen. The moves look tentative as yet, but with the equity markets on a stable footing, near term JPY weakness may well extend a little further before the selling intensifies. The BoJ is showing no signs of letting up on its reinflation process, maintaining ‘the line’ that the exchange rate is not the target of policy measures currently in play. For EUR/USD, the downside is just as much a consequence of the gaining popularity of Le Pen as it is the broader USD view, with French-German yields widening to the detriment of the EUR across the board. The lead spot rate is now refocusing on the lows seen last week, when we hit a 1.0521 base, but EUR/JPY and EUR/CHF now also pressured as sellers target all currencies.

In commodities,  oil advanced as Citigroup Inc. raised its short-term price outlook, citing good OPEC compliance with its output-cut agreement and growing demand in Asia. West Texas Intermediate gained 0.6 percent to $54.04 a barrel and Brent added 0.7 percent to $56.85. Oil prices continue to hold familiar ranges – notably WTI inside USD50.00-55.00. Growing inventory levels offset by strong cooperation with the OPEC agreed cuts, but ongoing scepticism keeps the upside contained despite hedge funds holding significant long positions in both WTI and Brent. Copper prices lead the way for base metals, fighting against USD based weakness near term as supply concerns emanating from the industrial action in Chile support. Industrial metals dropped, partially reversing their biggest gain in a week as funds were seen selling. Aluminum fell 0.4 percent to $1,893 a metric ton and copper lost 0.4 percent.  Gold declined 0.7 percent to $1,229.65 an ounce as the dollar advanced before the U.S. Federal Reserve releases minutes that may give indications of the pace of interest-rate increases. The yellow metal has tested back down to USD1230.00, this from pre USD1245.00 highs. Support remains into USD1,200 in the near term, as the risk perspective maintains an element of caution. Buyers of Silver partially reflects this. U.S. natural gas extended its decline into a third day due to forecasts for warmer-than-normal weather across the east coast. Futures fell 2.4 percent to $2.765 per million British thermal units, the lowest level in three months.

In the US calendar we’ll also get the flash PMI’s where the consensus is for a 0.3pt pickup in the manufacturing print and 0.2pt pickup in the services reading. Away from that there’s some Fedspeak due today with Kashkari (8.501m GMT), Harker (12.00pm) and Williams (3.30pm) all scheduled.

US Event Docket

  • 8:50am: Fed’s Kashkari Speaks on Economy in Golden Valley, MN
  • 9:45am: Markit US Manufacturing PMI, est. 55.3, prior 55
  • 9:45am: Markit US Services PMI, est. 55.8, prior 55.6
  • 9:45am: Markit US Composite PMI, prior 55.8
  • 12pm: Fed’s Harker to Speak on Economic Outlook
  • 3:30pm: Fed’s Williams Speaks to Students in Boise, Idaho

DB’s Jim Reid concludes the overnight wrap

One of the reasons why volatility remains so low in the face of increasingly elevated political risk is that global growth numbers have held up so well in recent weeks and months. Well today’s flash PMI numbers in the face of fresh supportive polls for Le Pen in France are a good test of this stand-off. Indeed yesterday’s OpinionWay poll in France revealed that support for Le Pen in the first round of the presidential election has crept up 1% to 27% with support for Macron and Fillon unchanged at 20%. More significantly though, the second round polling revealed that Macron would defeat Le Pen by a score of 58% versus 42%, a tighter margin than the 60% versus 40% in results from the same pollster just four days ago. In fact if you go back to the start of February, the gap was actually as wide as 65% versus 35%. Yesterday’s poll also revealed that a second round contest between Fillon and Le Pen would have the former coming out on top at 56% versus 44%, a tighter gap compared to 57% to 43% four days ago and 61% versus 39% at the start of the month.

Those results did come prior to the news yesterday that Le Pen’s Party headquarters was raided over the probe concerning whether Le Pen had used European Parliament funds to pay for fictitious jobs, so we may have to see if that has an impact at all, but the positive momentum in the polls for Le Pen is significant nonetheless. While the polls are also suggesting a tightening in support in favour of Le Pen versus Macron and Fillon, the implied probabilities based on bookmaker odds tell a similar tale. In the PDF today we show a graph showing the recent trend in the implied probabilities with the main takeaway being  that the range between the 3 candidates is hovering around the lowest – at 8% – over the last month. Indeed the implied probabilities stand out 37.8% for Macron, 34.2% for Le Pen and 29.5% for Fillon. That probability for Le Pen is up from 25.5% about a month ago while the probability for Macron has fallen from a high of over 50%. It’s fair to say that these numbers reflect a weight of money staked and that the market sees nowhere near as high a probability of a Le Pen victory. Nevertheless it’s the recent trend that’s interesting.

In what was an otherwise quiet day in markets given the US holiday it was the underperformance in French assets which stood out. In equities the CAC ended with a modest -0.05% decline but that compared to a decent +0.60% bounce for the DAX while the Stoxx 600 finished +0.22%. It was the moves in bonds which caught most investors’ eyes though. While 10y Bund yields edged down -0.5bps to 0.293%, 10y OAT’s finished the day up +2.3bps at 1.051% but, more notably, were up as much as +10.0bps at one stage following the poll, touching a high of 1.129% and coming close to the high mark this year of 1.156%. The spread between Bunds and OATs finished at 76bps (and just off the 4 and a bit year high of 77bps) but did blow out as wide as 84bps intraday at one stage and the most since August 2012.

The other notable price mover yesterday was Greek bonds. 2y yields rally nearly 70bps and dropped to a one-week low after the Eurogroup meeting yesterday to discuss Greece’s bailout suggested some progress was being made. Eurogroup president Jeroen Dijsselbloem said that the meeting was “very positive and a good step” and that the EU and IMF will soon return to Athens to continue with discussions, including laying out the more specific details around reforms. Greek finance minister Tsakalotos also confirmed that important progress had been made yesterday and sufficient for bailout auditors to continue talks.

Aside from that there wasn’t a huge amount more to report in markets yesterday. Gilts (+1.7bps) and the FTSE 100 (0.00%) also underperformed a bit yesterday. The House of Lords draft law debate kicked off with Bloomberg reporting that 30 amendments have so far been proposed. That’s far less than the 250 submitted by the House of Common’s but the lack of a Conservative majority in the upper house does raise some risks for PM May. The general debate is due to continue today but the more substantive discussions are not expected until next week.

This morning in Asia we’ve seen most markets get off to another positive start. Bourses in Japan in particular are riding high (Nikkei +0.68%) perhaps reflecting the decent flash manufacturing PMI print in the country which saw the reading bounce 0.8pts to 53.5 and to the highest since March 2014. Elsewhere the Hang Seng is +0.12% and Kospi is +1.06% while in China the Shanghai Comp is +0.26%. There’s a story going around on Bloomberg suggesting that Chinese authorities may be considering easing limits on foreign ownership of life insurers, which may also be helping the positive tone. Meanwhile US equity index futures are up about +0.20%.

Moving on. There wasn’t much to report on the data front yesterday. In the UK the CBI industrial trends survey for February revealed an increase in the output diffusions index by 7pts to 33 which is a level matched only once in the last 16 years. The proportion of firms expecting selling prices to rise increased further too with the index up 4pts to 32 and to the highest since April 2011. Elsewhere in Germany PPI in January was up a much higher than expected +0.7% mom (vs. +0.3% expected) while the flash consumer confidence reading for the Euro area in February fell 1.4pts to -6.2 (vs. -4.9 expected) and so putting it back at November levels. Finally we also got the latest CSPP holdings data at the ECB. Total holdings as of last Friday totalled €64.97bn which implies net purchases settled last week of €2.05bn or an average daily run rate of €409m, which is a little bit more than the average €367m since the program started.

Looking at the day ahead, this morning in Europe the main focus will be on the release of the February flash PMI’s which the market is expecting to remain relatively stable compared to the January figures. Also due out will be the final CPI revisions in France as well as public sector net borrowing data in the UK. In the US this afternoon we’ll also get the flash PMI’s where the consensus is for a 0.3pt pickup in the manufacturing print and 0.2pt pickup in the services reading. Away from that there’s some Fedspeak due today with Kashkari (1.50pm GMT), Harker (5.00pm GMT) and Williams (8.30pm GMT) all scheduled. BoE Governor Carney and Chief Economist Andy Haldane will speak at a Treasury Select Committee hearing on the UK February inflation report.


i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 13.36 POINTS OR .41%/ /Hang Sang CLOSED DOWN 182.45 POINTS OR 0.76% . The Nikkei closed UP 130.36 POINTS OR 0.68% /Australia’s all ordinaires  CLOSED DOWN 0.09%/Chinese yuan (ONSHORE) closed DOWN at 6.8845/Oil ROSE to 54.30 dollars per barrel for WTI and 56.96 for Brent. Stocks in Europe ALL IN THE GREEN EXCEPT LONDON. Offshore yuan trades  6.8668 yuan to the dollar vs 6.8845  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  WIDENS CONSIDERABLY AS POBC ATTEMPTS TO STOP USA DOLLARS FROM LEAVING CHINA’S SHORES. ONSHORE YUAN WEAKER AS IS OFFSHORE YUAN COUPLED WITH THE STRONGER DOLLAR


China has had enough with North Korea.  They are suspending all imports of North Korean coal which makes up close to 40% of all of their exports.

This is very deadly to North Korea:

(courtesy Reuters)

China to suspend all imports of coal from North Korea

China recently rejected a coal shipment from North Korea after Pyongyang tested a ballistic missile.

By Reuters February 19, 2017 12:25 PM (UTC+8)

China will suspend all imports of coal from North Korea starting Feb. 19, the country’s commerce ministry said in a notice posted on its website on Saturday, as part of its efforts to implement United Nations sanctions against the country.

The Ministry of Commerce said in a short statement that the ban would be effective until Dec. 31.

The ministry did not say why all shipments would be suspended, but South Korea’s Yonhap news agency reported last week that a shipment of North Korean coal worth around $1 million was rejected at Wenzhou port on China’s eastern coast.

The rejection came a day after Pyongyang’s test of an intermediate-range ballistic missile, its first direct challenge to the international community since U.S. President Donald Trump took office on Jan. 20.

China announced in April last year that it would ban North Korean coal imports in order to comply with sanctions imposed by the United Nations and aimed at starving the country of funds for its nuclear and ballistic missile programmes.

But it made exceptions for deliveries intended for “the people’s wellbeing” and not connected to the nuclear or missile programmes.

Despite the restrictions, North Korea remained China’s fourth biggest supplier of coal last year, with non-lignite imports reaching 22.48 million tonnes, up 14.5 percent compared to 2015.


The following explains why North Korea is in serious trouble with the banning of all coal imports:
(courtesy zero hedge)

North Korea’s Regime In Jeopardy After China Bans All Coal Imports

North Korea just lost a very big ally.

On Saturday, China said that it was suspending all imports of coal from North Korea as part of its effort to implement United Nations Security Council sanctions aimed at stopping the country’s nuclear weapons and ballistic-missile program. The ban, according to a statement posted on the website of the Chinese Commerce Ministry, takes effect on today and will last until the end of the year. While China will hardly suffer material adverse impacts, Chinese trade – and aid – have long been a vital economic crutch for North Korea, and the decision strips North Korea of one of its most important sources of foreign currency.

The ban comes six days after the North Korean test of a ballistic missile that the Security Council condemned as a violation of its resolutions that prohibited the country from developing and testing ballistic missile technology. In the test, – which took place during a dinner between Japan’s Prime Minister and Donald Trump – North Korea claimed that it had successfully launched a new type of nuclear-capable missile. It said its intermediate-range Pukguksong-2 missile used a solid-fuel technology that American experts say will make it harder to detect missile attacks from the North.

According to the NYT, China’s decision has the potential to cripple North Korea’s already moribund economy: coal accounts for 34-40% of North Korean exports in the past several years, and almost all of it was shipped to China, according to South Korean government estimates. As Yang Moo-jin, a professor at the University of North Korean Studies in Seoul confirms, coal sales accounted for more than 50 percent of North Korea’s exports to China last year, and about a fifth of its total trade. China had previously bought coal under exemptions that allowed trade for “livelihood” purposes. China’s Ministry of Commerce didn’t respond to faxed questions outside office hours.

“Of course they may have methods to replace the damage, but just by looking at the size of the loss, that’s a pretty big blow,” Yang said.

China’s import ban follows a UN Security Council resolution adopted in November in response to the North’s fifth and most powerful nuclear test, according to which the country should not be allowed to export more than 7.5 million metric tons of coal a year or bring in more than $400 million in coal sales, whichever limit is met first. It was unclear whether that cap has already been reached for this year.

Officials of the United States and its allies, including President Trump, have suggested that China, North Korea’s principal economic patron, should be more aggressive in enforcing sanctions. But while it does not approve of the North’s weapons program, China has also been seen as reluctant to inflict crippling pain on North Korea, for fear that it might destabilize its Communist neighbor.

That, however, changed on Saturday and as Bloomberg says “China’s move to ban coal imports from North Korea, effectively slicing the country’s exports by about half, came with a message for the U.S. and its allies: It’s time to do a deal even if it means risking political upheaval.

While China has previously resisted calls by the U.S. to apply greater pressure on Kim’s regime, North Korea is increasingly becoming a strategic liability, according to Zhou Qi, director of the National Strategy Institute at Tsinghua University in Beijing. “What we’re seeing now is Beijing is showing a new willingness to bring the North to near the breaking point,” she said. “There is still some room to squeeze the regime. But of course, it’s a risky card to play.”

“The Chinese are getting more frustrated with North Korea,” Eurasia Group President Ian Bremmer said in an interview at the same conference. “They clearly don’t feel that they have a lot of influence and they’re worried that the U.S. under Trump is going to blame China as opposed to continuing a multilateral process.”

At the same time as China announce the coal import bank, Chinese officials said that pushing North Korea into a corner won’t work as Kim’s regime will keep developing its nuclear capability until it feels safe. Instead, it’s time to restart talks and “break the negative cycle on the nuclear issue,” Chinese Foreign Minister Wang Yi said in a statement on Sunday after meeting South Korean counterpart Yun Byung-se at a security meeting in Munich.

As Bloomberg adds, China’s call for a new initiative contrasts with a more hawkish tone out of Washington.

President Donald Trump, who during his campaign said he could negotiate with Kim over a hamburger, this month promised to deal with North Korea “very strongly” after its latest missile test. He also called on China to get tougher. The U.S. is putting a defense system called Thaad in South Korea — a move that also potentially threatens Beijing’s military capabilities.

China may soon have company in making the shift. South Korea’s President Park Geun-hye was impeached in December and the leading candidates to replace her all take a softer line on North Korea, with front-runner Moon Jae-in saying that the next administration should review the decision to deploy Thaad.

Meanwhile, last week’s bizarre assassination of Kim’s estranged half-brother, who was protected by Chinese authorities, added to calls in Beijing’s foreign policy establishment to take stronger action, according to Shi Yongming, an associate research fellow at the Foreign Ministry-run China Institute of International Studies. “The case fully exposed the desperate irrationality of the Kim regime,” Shi said. “Beijing still wants to bring him to a negotiation table – and that’s where the U.S. role lies – because the collapse of the regime is right now outside China’s realistic capacity to handle.

Making the recent situation somewhat embarrassing for Beijing, China has backed the Kim dynasty since it took charge after the Korean War, in part to prevent having a U.S. ally on its border.

With the international community enforcing sanctions on North Korea after a series of nuclear tests, China now accounts for more than 90 percent of its total trade, according to Bloomberg data.

Whether the Chinese ban will bring Kim’s regime to the negotiating table is unclear. North Korea has accelerated its development of nuclear bombs and ballistic missiles since 2009, when it walked away from six-party talks involving the U.S., South Korea, China, Russia and Japan. However, losing perhaps the biggest source of outside funding will almost certainly lead to political chaos in the communist nation.

The question on everyone’s lips, but which few dare to ask in public, is whether Kim Jong-Un, pressed into a corner, will – after years of posturing with his ballistic missile tests, finally launch a rocket into one of the neighboring nations. Trump’s administration has said it will deploy the missile defense system this year in South Korea and back Japan “100 percent” in moves to deter North Korea.

Since it may have no choice but to test out this defense system in the very near future, one hopes that any North Korean “desperation” launches are safely brought down.



We have lots of trouble in Japan with respect to the Fukushima disaster.  Now a second robot breaks down inside the hot No 2 reactor site.

No wonder fish are turning up dead on the west coast of the uSA.  This is a huge disaster and the story is ongoing

(courtesy zero hedge)

Fukushima Aborts Latest Robot Mission Inside Reactor; Radiation At “Unimaginable” Levels

Two years after sacrificing one robot, TEPCO officials have aborted their latest robot mission inside the Fukushima reactor after the ‘scorpion’ became unresponsive as it investigated the previously discovered hole where the core is believed to have melted.

A “scorpion” robot sent into a Japanese nuclear reactor to learn about the damage suffered in a tsunami-induced meltdown had its mission aborted after the probe ran into trouble, Tokyo Electric Power company said Thursday. As Phys.org reports, TEPCO, the operator of the Fukushima nuclear plant, sent the remote-controlled device into the No. 2 reactor where radiation levels have recently hit record highs.

The “scorpion” robot, so-called because it can lift up its camera-mounted tail to achieve better viewing angles, is also designed to crawl over rubble inside the damaged facility.

But it could not reach its target destination beneath a pressure vessel through which nuclear fuel is believed to have melted because the robot had difficulty moving, a company spokeswoman said.

“It’s not immediately clear if that’s because of radiation or obstacles,” she said, adding that TEPCO is checking what data the robot was able to obtain, including images.

The robot, 60 centimetres (24 inches) long, is made by Toshiba and equipped with two cameras and sensors to gauge radiation levels and temperatures.

“Scorpion’s mission is to take images of the situation and collect data inside the containment vessel,” TEPCO spokesman Shinichi Nakakuki said earlier.

“Challenges include enduring high levels of radiation and moving on the rough surface,” he said.

Radiation levels inside the reactor were estimated last week at 650 sieverts per hour at one spot, which can effectively shut down robots in hours.

This is not the first robot to become disoriented under the extreme stress of the Fukushima environment…

The robot sent to inspect a reactor’ containment vessel at the Fukushima Daiichi nuclear power plant stopped responding three hours into the operation.

TEPCO hoped to take a look inside the vessel containing one of the three reactors, which underwent a meltdown in the 2011 nuclear disaster.

A group of approximately 40 workers sent the remotely-controlled device, allegedly capable of withstanding high levels of radiation, into the vessel at 11:20 a.m. The robot stopped functioning after covering two thirds of the route at approximately 2:10 p.m., according to the Tokyo Electric Power Co.

But as Michael Snyder recently noted, radiation inside one of the damaged reactors at the Fukushima nuclear power facility has reached an “unimaginable” level according to experts. Because so much nuclear material from Fukushima escaped into the Pacific Ocean, there are many scientists that believe that it was the worst environmental disaster in human history, but most people in the general population seem to think that since the mainstream media really doesn’t talk about it anymore that everything must be under control. Unfortunately, that is not true at all. In fact, PBS reported just last year that “it is incorrect to say that Fukushima is under control when levels of radioactivity in the ocean indicate ongoing leaks“. And now we have just learned that the radiation level inside reactor 2 is so high that no human could possibly survive being exposed to it.

According to the Japan Times, the level of radiation inside the containment vessel of reactor 2 is now estimated to be “530 sieverts per hour”…

The radiation level in the containment vessel of reactor 2 at the crippled Fukushima No. 1 power plant has reached a maximum of 530 sieverts per hour, the highest since the triple core meltdown in March 2011, Tokyo Electric Power Co. Holdings Inc. said.

Tepco said on Thursday that the blazing radiation reading was taken near the entrance to the space just below the pressure vessel, which contains the reactor core.

The high figure indicates that some of the melted fuel that escaped the pressure vessel is nearby.

It is hard to find the words to convey how serious this is.

If you were exposed to a radiation level of just 10 sieverts per hour, that would mean almost certain death. So 530 sieverts per hour is simply off the charts. According to the Guardian, this recent measurement is being described by scientists as “unimaginable”…

The recent reading, described by some experts as “unimaginable”, is far higher than the previous record of 73 sieverts an hour in that part of the reactor.

A single dose of one sievert is enough to cause radiation sickness and nausea; 5 sieverts would kill half those exposed to it within a month, and a single dose of 10 sieverts would prove fatal within weeks.

And the really bad news is that there appears to be a 2 meter hole that was created by melted nuclear fuel “in the metal grating under the pressure vessel in the reactor’s primary containment vessel”.

The following comes from Bloomberg

New photographs show what may be melted nuclear fuel sitting under one of Japan’s wrecked Fukushima reactors, a potential milestone in the search and retrieval of the fuel almost six years after it was lost in one of the worst atomic disasters in history.

Tokyo Electric Power Co. Holdings Inc., Japan’s biggest utility, released images on Monday showing a grate under the Fukushima Dai-Ichi No. 2 reactor covered in black residue. The company, better known as Tepco, may send in a scorpion-like robot as soon as February to determine the temperature and radioactivity of the residue.

If that isn’t frightening enough, one Japanese news source is reporting that this melted nuclear fuel “has since come in contact with underground water flowing from the mountain side”…

The melted fuel has since come in contact with underground water flowing from the mountain side, generating radioactively contaminated water every day. In order to dismantle the reactor, it is necessary to take out the melted fuel, but high radiation levels inside the reactor had hampered work to locate the melted debris.

If this disaster was just limited to Japan, the entire northern hemisphere would not be at risk.

But that is not the case.

Most of the nuclear contamination from Fukushima ended up in the Pacific Ocean, and from there it was literally taken around the rest of the planet. The following was reported by PBS

More than 80 percent of the radioactivity from the damaged reactors ended up in the Pacific — far more than reached the ocean from Chernobyl or Three Mile Island. Of this, a small fraction is currently on the seafloor — the rest was swept up by the Kuroshio current, a western Pacific version of the Gulf Stream, and carried out to sea where it mixed with (and was diluted by) the vast volume of the North Pacific.

We don’t know if there is a connection, but it is extremely interesting to note that fisheries up and down the west coast of the United States are failing because of a dramatic decrease in fish populations. Just check out the following excerpt from a story that was posted on January 18th

U.S. Secretary of Commerce Penny Pritzker today determined there are commercial fishery failures for nine salmon and crab fisheries in Alaska, California and Washington.

In recent years, each of these fisheries experienced sudden and unexpected large decreases in fish stock biomass or loss of access due to unusual ocean and climate conditions. This decision enables fishing communities to seek disaster relief assistance from Congress.

Things are particularly bad up in Alaska, and biologists are “stumped” as to why this could be happening…

In 2016, the pink salmon harvests in Kodiak, Prince William Sounds, Chignik and lower Cook Inlet came in woefully under forecast and stumped biologists as to why.

The estimated value of Kodiak’s 2016 haul was $2.21 million, compared to a five-year average of $14.64 million, and in Prince William Sound the ex-vessel value was $6.6 million, far less that the $44 million five-year average. The total state harvest was the smallest since the late 1970s.

Although state biologists weren’t ready to declare a cause for the poor pink salmon performance, the Commerce Department press release attributed the disasters to “unusual ocean and climate conditions.”

Further south, it was being reported last month that millions of dead sardines are washing up on the shores of Chile.

I could go on and on with a lot more examples like this, but hopefully you get the point.

Something really strange is happening in the Pacific, and a lot of people believe that there is a link to Fukushima.

Not too long ago, I wrote about how the elite of Silicon Valley are “feverishly prepping“, but the truth is that all of us should be. If you need some tips on how to get started, you can find my prepping book right here. Our planet is becoming increasingly unstable, and the Fukushima nuclear disaster is just one piece of the puzzle.

But it is definitely a very important piece. The nuclear material from Fukushima is continuously entering the food chain, and once that nuclear material gets into our bodies it will slowly irradiate our organs for years to come. The following is an excerpt from an absolutely outstanding opinion piece by Helen Caldicott that was published in the Guardian

Internal radiation, on the other hand, emanates from radioactive elements which enter the body by inhalation, ingestion, or skin absorption. Hazardous radionuclides such as iodine-131, caesium 137, and other isotopes currently being released in the sea and air around Fukushima bio-concentrate at each step of various food chains (for example into algae, crustaceans, small fish, bigger fish, then humans; or soil, grass, cow’s meat and milk, then humans). After they enter the body, these elements – called internal emitters – migrate to specific organs such as the thyroid, liver, bone, and brain, where they continuously irradiate small volumes of cells with high doses of alpha, beta and/or gamma radiation, and over many years, can induce uncontrolled cell replication – that is, cancer. Further, many of the nuclides remain radioactive in the environment for generations, and ultimately will cause increased incidences of cancer and genetic diseases over time.

Are you starting to understand the gravity of the situation?

Sadly, this crisis is going to be with us for a very, very long time.

According to Bloomberg, they are not even going to start removing melted nuclear fuel from these reactors until 2021, and it is being projected that the overall cleanup “may take as long as 40 years”…

Decommissioning the reactors will cost 8 trillion yen ($70.4 billion), according to an estimate in December from the Ministry of Economy, Trade and Industry. Removing the fuel is one of the most important steps in a cleanup that may take as long as 40 years.

The unprecedented nature of the Fukushima disaster means that Tepco is pinning its efforts on technology not yet invented to get the melted fuel out of the reactors.

The company aims to decide on a fuel removal procedure for the first reactor during the fiscal year ending March 2019, and to begin removing fuel in 2021.

A lot of people that end up dying as a result of this crisis may never even know that it was Fukushima that caused their deaths.

Personally, I am convinced that this is the greatest environmental crisis that humanity has ever experienced, and if the latest reading from reactor 2 is any indication, things just took a very serious turn for the worse.


Sunday night;

Sunday night China sends a message to Janet that she should not raise rates.  China weakens the yuan and short term Chinese rates skyrocket:  the 1 week CNH Hibor rises from 3.75% up to 7.388%

(courtesy zerohedge)

China Responds To Fed Jawboning March “Live” – Weakens Yuan, Spikes Money Market Rates

After a week of jawboning markets into believing that the March FOMC meeting is now “live”, it appears China has decided to send a little message.

After weakening the fix by the most since Jan 9th, Chinese money market rates are soaring (1 week CNH HIBOR up 303bps) despite notable liquidity injections…

Of course an unexpected rate hike in March is an implicit tightening of the world’s financial conditions and thus liquidity withdrawal… reversing recent improvements in global dollar liquidity.

As Mark St.Cyr asks (and answers), is China about to begin pre-emptively devaluing the yuan?

Remember when any member of the Federal Reserve, regardless of the action be it a speech, interview, what they had for breakfast et cetera, was met with panting breaths by the financial media? You know, like it was back in the old days, say around 90 days ago more or less. My how time both flies and changes.

Today? Like it or not (and I presume they disdain it) the President as opposed to a Fed. president, has reclaimed all the oxygen, print, airwaves, bandwidth, and more from not only the general news, but the business/financial news as well. I have a feeling that’s not sitting well within the confines of the Eccles Building. Remember: Elites don’t like sharing stages, especially with those they deem as “outsiders.”

So what does the above have anything to do with March and the Yuan you may be asking? It’s this:

You or I may be enjoying a respite from the media where the Fed. (or central bankers in general) aren’t dominating every topic of business/financial discussion. Yet, the one audience I’ll contend that’s still hanging on every syllable for meaning and intent is China. And China is the, and I mean just that – the – only audience that matters. The reasoning is simple:

China, overnight, can bring the entire global markets crashing to its knees via one wrong move, exponentially faster than any Fed. misstep, intentional, or otherwise. Period.

In other words, the Fed. more often than not will signal first (yet they can surprise) and the move would cause turmoil, but the move (and resulting chaos) itself would be more reaction to surprise than substance, where knee-jerk-selling is met with horns-over-hooves buying from Bulls just itching to buy the next dip. (i.e., 1/4% unannounced or unanticipated hike or something else in kind.)

China on the other hand could intentionally devalue the Yuan in whole number, even double-digit percentages, unannounced overnight, and the chaos could quickly transform into unstoppable monetary bedlam. And there’s recent precedent for clues. e.g., August of 2015.

So with the above for context the question that should be first and foremost in everyone’s mind is this:

If China believes there’s a rate hike in March, regardless of what the rest of the world (and academia) might think. Will it force  China into delivering a monetary strike first, and deal with its aftermath later, rather, than simply waiting around to then deal with any potential monetary aftermath or chaos unleashed by the Fed. later?

I believe not only will they move first – the move borders on inevitable.

I base this on no other reasoning than watching the Fed. continuing to throw ever-the-more fuel onto this “monetary powder keg” that brings that response on quicker, rather than later. For the more they pile on, the more this “monetary powder keg” moves from in-need-of-a-match, into self-igniting.

I am of the opinion China’s ever-growing capital flight problems, and more can not withstand another rate hike, let alone one so close after December. And the tell-tale signs for this to be more plausible than not have been occurring in plain sight with far more telling frequency (and I’ll imply: intent) than previously. And the ones who seem to not be reading the “tea leaves” is none other than the Fed. itself.

Here’s some of my reasoning from the article, “Feb’s FOMC Meeting: A Powder keg In Search Of A Match” To wit:

“If China feels that it is in a no-win situation (and it’s easily conceivable using the Fed’s latest words, speeches, shift in policy signaling and a whole lot more) They might decide after coming back from their New Year holiday and – act first – question later.”

Guess what the politburo did when they returned? Hint: Everything and anything but (and it’s a very big but) the one thing they always did in unison – defend the Yuan.

Everything in China went ballistic. Bonds, stocks, commodities, all up. The Yuan? Tumbled to one-month lows.

I’ll contend this is an overt signaling action which screams warning signs everywhere. For why did China, this time, throw so much money everywhere else except for the one place it basically threw the “kitchen sink” at only a month or so prior? (e.g., The Yuan as to strengthen it away from the much dreaded psychological USD/CNH 7.00 cross.)

Was this a test to see what reaction (both market and political) would take place doing something other than something solely Yuan centric? Or, was this a move of desperation as to subside further capital flight? After all: This is precisely the exact opposite of what one should/would do if the plan was to strengthen, rather than weaken one’s currency, correct?

Again: Why would you throw enormous sums of money into actions which not only have a negative effect, but a canceling effect on what you just threw (again) enormous sums of money only a month prior? Does the old joke “Drilling holes in the bottom of the boat to let the water coming in out.” come to mind here? Which is why I’m siding on the side of desperation – first, as opposed to  a test. And here’s why, as stated by economist, and China watcher Andy Xie (one of the few economists I admire) to wit:

“China’s domestic woes and international challenges are largely due to its inefficient system. The government is obsessed with concentrating economic resources in its own hands, and asset markets are like casinos, sucking people in and making them lose money. The government uses its vast resources inefficiently. Hence, China’s currency has a tendency to depreciate.”

Using the above for a prism it’s easy to see how the politburo can do two things at the same time which seem diametrically opposed to what was professed (or signaled) only weeks prior. Why? Because when elites panic – they’ll throw money everywhere and anywhere first, because that’s all they know. And I believe this demonstrates China is beginning to panic.

The real question (and problem) now is: How far, and how fast, from the “beginning” to “end game” they decide to proceed going forward from here? I believe all we have to do is look to our own Fed. for clues, for they appear utterly clueless to what is taking place right before their own eyes.

So what kind of signaling (hence exacerbating China nervousness) is forthcoming from the Fed you ask? Fair question, to wit:

From Reuters™ “Dollar Index Rises As Yellen Signals More Rate Hikes”

“Waiting too long to remove accommodation would be unwise,” Yellen said in prepared remarks before the U.S. Senate Banking Committee, the first of her two-day testimony before Congress.

That was just a few days ago from Fed. chair Janet Yellen’s televised two-day testimony before Congress.

But what went along with the above was what went nearly unreported (as I implied when stating “the old days”) when none other than the Fed’s Dennis Lockhart (another Fed. president retiring at the end of the month) stated in an interview with Bloomberg™ “March meeting is live.”

That’s a lot of confirmation that March is to be considered live, is it not?

As I’ve iterated before, I believe the rest of the world (or “markets”) are still of the idea that the Fed. is once again “crying wolf” as they did all throughout 2016. For China? I think they’re back to an August 2015 frenzy caught between what to do next, never-mind, what not to do. And it’s getting more complicated for them by the day.

Think I’m over exaggerating? Fair point, so here’s just a few “other” headlines China returned from holiday to read and think about, let alone, needing a response to:

“…Trump Backs Japan Over Disputed East China Sea Islands”

Or how about this from the WSJ™ implying further retaliation, “U.S. Eyes New Tactic To Press China”

So where are we now? As I stated in my previous article, I believe it’s all about the Fed. minutes, to wit:

During that time I believe China will wait for the minutes to be released, and if it is made apparent that there was indeed further discussion as to bolster the inferences that the Fed. may be actively considering a path as to embark on a march towards higher rates, along with the thinning of its balance sheet, which would inevitably send the $Dollar rocketing skywards?

They’ll act first and ask (or maybe not) questions later. Sending everything that is now taken for granted in the “markets” (e.g., “It’s good to be long!) into total chaos. All before March 15th’s next meeting. Again, which just so happens to be the exact date originating the “Ides of March” warning.”

If the actions by China after returning from their holiday break are any clue? Than the possibility for a “monetary first strike” is all the more plausible, if not probable, than these “markets” are signaling, let alone contemplating.

China has thrown buckets of capital at not only the Yuan, but its credit markets in unison – and capital flight is accelerating still on all fronts. All while the $Dollar strengthens, and Yuan weakens seemingly against the will of both monetary bodies.

So again, with all the above for context, as I said in the title…

If March Is indeed “live?”  Then so too is the mother of all monetary shocks.

We shall see our first clues for the minutes of the latest FOMC meeting are to be released this week. And if they are indeed “hawkish?” I believe it will force China’s hand before the next meeting. Whether anyone is prepared for it, or not.

And if any clues are to be extrapolated by current “market” action? The answer is self-evident: nobody thinks such a thing is possible anymore, let alone – positioned for it, making things more problematic than they already are. If that’s even possible.

*  *  *

Finally we wonder if – just as was the case after the Shanghai Accord had fulfilled its Plunge Protection Team role in Q1 2016 – whether the same is about to occur…

Notice that the Yuan has been strengthening against the USD for the last 2 months (despite all the gnashing or political teeth over its manipulation). A Fed rate hike is the perfect excuse to let that pretense slide again.





Quite a few PD party members which are in power threatens to splinter off and form their own party as turmoil reigns supreme in Italy.  This forced Renzi to quite as Party Leader (Gentilioni is the Prime Minister and a Renzi ally).  This should trigger a re election battle.

(courtesy zero hedge0

New Political Turmoil In Italy After Renzi Quits As Ruling Party Leader, Triggering Re-election Battle

Two months after an unexpected, landslide loss in the December 4 constitutional referendum which cost him his job as Italy’s prime minister, on Sunday Matteo Renzi quit as leader of Italy’s ruling party, in the process triggering a re-election fight against minority dissidents that threatens the stability of the center-left government, Bloomberg reports. Renzi told a national assembly of the ruling PD that he had handed in his resignation acknowledging he was set back by defeat in last year’s referendum, one day after critics from leftist factions threaten to abandon the Democratic Party.

“Everything stems from the referendum,” Renzi told more than 600 party delegates. “I feel responsible for the defeat, there is a before and an after. That referendum was a blow for the whole country, starting with the economic system and we must now put the car back on the road.” Renzi denounced “blackmail by a minority” and infighting that he called “a gift” to the anti-establishment Five Star Movement. He is expected to stand for re-election at a congress in April or May.

As Bloomberg adds, concerns about a party split have pushed Italian bond yields higher and led to the widest spread between Italian and German 10-year bonds since February 2014. The selloff may accelerate as Renzi’s resignation could benefit Five Star, which is neck-and-neck with the party in opinion polls and wants a referendum on Italian membership of the euro area. Renzi has faced challenges to his reformist strategy and leadership especially since losing the referendum, which prompted him to resign as premier and sponsor current Prime Minister Paolo Gentiloni, a Renzi loyalist and fellow PD member, as his successor.

Renzi, who has pushed for early national elections in June or September, made no such appeal on Sunday and instead urged his audience to support Gentiloni and his government.

“Basta (enough) with discussions and polemics on the government,” Renzi said. “I ask you to applaud Gentiloni and his government because it is unthinkable that the congress be turned into a congress on the government.”

Renzi’s critics have urged him to drop pleas for early elections and pledge support for Gentiloni to remain premier until the end of the parliamentary term in early 2018. They also want more time to prepare a congress and primaries, and a more leftist program.

Meanwhile, at a meeting of party dissidents on Saturday, critics of Renzi sang “Bandiera Rossa (Red Flag)”, an iconic song of the Italian labor movement. Enrico Rossi, president of the Tuscany region, called for “a party which is on the side of the workers” and derided Renzi for “trying to present himself as the Italian Macron.” Dissidents also include Roberto Speranza, a former PD chief whip in the lower house, and Michele Emiliano, president of the southern Apulia region and a possible challenger for the PD leadership.

However, a breakaway could backfire on the dissidents in making early elections more likely as it could see some 20 members of the lower house, and about a dozen senators, leave the PD and weaken the coalition government, potentially leading to further political instability in Italy.

“The Gentiloni government is our government. We back it and will continue to back it until” Italian President Sergio Mattarella decides to call elections, Matteo Orfini, PD chairman, said on the eve of Sunday’s assembly. “A split would shrink parliamentary support for the government and put it at risk.”

“We’re walking on a tightrope,” Gentiloni confided to his ministers, newspaper La Repubblica reported on Sunday.

Meanwhile, the competition between the PD and Beppe Grillo’s Five Star movement is neck and neck: an Ipsos opinion poll published in newspaper Corriere della Sera on Saturday found that Five Star would have 30.9% of the vote, against 30.1% for the PD, 13% for Forza Italia of ex-premier Silvio Berlusconi and 12.8% for the anti-immigrant Northern League. Meanwhile, a breakaway faction from the PD would have limited support with only 4.3% of voters backing a new leftist party.






The French/German spread bond yields blows out hugely as investors are waking up to the fact that in the French elections, Le Pen, a Euroskeptic has a chance of winning;

(courtesy zero hedge)

Political Turmoil Returns To Europe: French-German Spread Blows Out To Five Year Wides

Despite a calm start to European trading, with local equity bourses posting solid early gains, European political fears have returned this morning, leading to a blow out in French government bond yields, pushing the 10y yield now higher by 5bps and 5y up 8bps, as early losses extend after latest poll shows support for anti-euro presidential candidate Marine Le Pen rising in both election rounds.

As a result, the French-German 10Y govt spread has jumped to 85 bps, following an accelerated selloff, to the widest level since July 2012.

As Bloomberg notes, after opening tighter vs core bonds, OATs have been pressured as talks between left-wing candidates Melenchon and Hamon are set to continue, while Bloomberg reports that Emmanuel Macron may have harmed his own campaign after becoming entangled in controversies over France’s colonial past.

More to the point, the latest daily French election poll by OpinionWay shows first-round support for Marine Le Pen rising by 1 percentage point to 27%. Both Emmanuel Macron and Francois Fillon’s 1st-round support remains unchanged at 20%, while first round support for Jean-Luc Melenchon down 1 point to 12% as support for socialist candidate Benoit Hamon stable at 16%. While in the second round, Macron is still expected to defeat Le Pen with 58% of the vote vs 42% for Le Pen, this is a smaller margin from February 17, when the poll showed him at 60% vs Le Pen at 40%. Similarly, Fillon’s margin of victory has declined: he would defeat Le Pen with 56% of vote vs 44% for Le Pen, down from 57% to 43% on Feb. 17

Weakness in French bonds is exacerbated by poor liquidity environment, given U.S. holiday, according to a London trader. Additionally as Markit notes, the CDS spread is starting to catch up with relatively insulated Spain.

The return of the European “fear” trade has sent German 2y yields to a record low of -0.85%, down 4bps on the day, as continued selloff in French bonds prompts risk-off moves across core bonds. Bund futures rally to 164.68, volumes surge to the largest of the session, with resistance at 164.64 (Feb. 17 high) taken out

Sharp selling is pressuring peripherals, led by Italy as 10y yield rises 3bps to 2.22%. Adding to concerns about Italy was the previously reported confirmation that former PM Renzi has quit as leader of the PD, triggering a party re-election. Primaries are expected to take place at the end of April or in the first half of May. According to DB economists, there is an increasing probability of a split of Renzi’s PD with the left wing minority apparently intentioned to breakup. They note that if it materialises, the likelihood of a victory of eurosceptic parties at the general election would increase – currently the polls give the PD a small advantage over the 5SM. Hence, markets could interpret a PD split negatively. DB’s central case is a break-up of the PD with the consequence being a further increase in political fragmentation by damaging the only large party that remains pro-European. The main question, then, would become how much political support the PD would lose if historical left-wing leaders were to abandon the party. In Deutsche Bank’s view, a split of the PD could open the door to a victory of the eurosceptic parties in the coming election.

There was more political concern out of German politics as well: a weekend poll by the Emnid Institute and published in the Bild newspaper showed that the centre-left Social Democrats party have widened their lead over Merkel’s CDU party. The poll found that the SPD’s support increased 1% in a week to 33%, while the CDU’s share fell 1% to 32%. The poll also suggests that the SPD’s overall percentage has increased 12% in the last four weeks. That is the 3rd poll that we have found which shows a 1% lead for the SPD over the CDU, although the absolute percentage share for the SPD is the highest in this latest Emind poll.

As Reuters adds, the SPD’s unexpected surge of some 12 points in the last month has caught Merkel and her conservatives off guard, analysts said, just seven months before the Sept. 24 election, where she had expected to win a fourth term easily. The Emnid poll of 1,885 voters gave the SPD 33 percent of the vote, up 1 point in the last week, while the Christian Democrats (CDU) and their Bavarian sister party the Christian Social Union (CSU) would win 32 percent, down 1 point.

The SPD has now gained a record-breaking 12 points in the last four weeks, according to Bild am Sonntag newspaper, since former European Parliament president Martin Schulz was named as its candidate to run against Merkel in the Sept. 24 election.

“The increase is unmatched in the history of the Bild am Sonntag polls,” the newspaper wrote.

The SPD, junior partner in Merkel’s ruling coalition, had trailed her conservative bloc for years in opinion polls until nomination of Schulz revived the party. It last won an election under Gerhard Schroeder in 2002.

“This is a serious poll showing the SPD coming from nowhere to overtake the CDU/CSU,” Thomas Jaeger, a political scientist at Cologne University, told Reuters. “It’s amazing to see how unprepared the CDU was for someone like Schulz … They assumed the SPD was going to stay stuck in the 20-25 percent range. They’ve been caught pants down.”

The confluence of these three political narratives has put French and Italian bonds on the back foot, and has spilled over into underperforming Italian and French stock markets.

Oh, and then there is Greece: today we’ve also got the scheduled Eurogroup finance ministers meeting in Brussels where ministers are due to discuss the Greece’s bailout. Hopes for progress have seemingly stalled until after the upcoming European elections although German finance minister Wolfgang Schaeuble did reiterate his confidence over the weekend that Greece is on the right path and that he also expects the IMF to participate in a third bailout package.

According to a Reuters report, Schaeuble doesn’t expect euro zone finance ministers to reach a final deal on Greece at their meeting today in Brussels, a spokesman said on Monday. Euro zone finance ministers are meeting in the Belgian capital to assess Greece’s progress in fulfilling the conditions of its bailout.

“We do not expect a final agreement from the Eurogroup meeting, rather it is an evaluation of a progress report, and with this expectations the minister left to Brussels,” Finance Ministry spokesman Juerg Weissgerber said.

“We hope that the institutions can return relatively quickly to Greece,” he added.

LePen gaining on all rivals in the first and second round polls.

(courtesy zero hedge)

Selling Of French Bonds Accelerates As Le Pen Extends Lead, Macron Tumbles In Latest Poll

Another day, another headache for owners of French bonds. In the latest French presidential poll, conducted by Elabe for TV broadcaster BFMTV, Marine Le Pen extended her lead by another 2-3 points, while support for her primary centrist challenger Emmanuel Macron, tumbled by 5 points in the last week.

The poll, released today, showed that Le Pen’s lead rose by either 1.5 points to 27% or by 2 points to 28%, depending whether centrist candidate Francois Bayrou would take part in the election…

… or withdraw.

The most surprising result, however, is the plunge in Macron’s odds, who lost five points in the first round voting intentions compared to the same poll conducted two weeks ago. Macron, who is the former French economy minister and who is running on a pro-EU platform, fell to third place behind right-wing candidate Francois Fillon, whom he eclipsed earlier in the month after a major embezzlement scandal erupted in which Fillon was accused of using public funds to pay for his family’s wages. Fillon gained 3 points in both variations of the poll.

But more concerning for her opponents, was the notable gains Le Pen made in the second round, where while still trailing behind both Fillon and Macron, she has seen a 4 points gain in the past week, shrinking the difference between Macron in the runoff round to 59-41. Until several weeks ago, she was firmly in the 20% range.

Meanwhile, as we have observed virtually every single day in the past three weeks, the better Le Pen does the polls, the higher French yields rise, and the greater the spread to German bunds….

… over fears that a Le Pen victory would be the last nail in the coffin for the Eurozone. Le Pen’s FN party has warned it would take France out of the Eurozone, return to the French franc, and would redenominate billions in French debt, a step which leading economists and rating agencies last week declared would to “massive sovereign default” and global financial chaos.




The following is an amazing story.  For the first time error central bankers are now being held accountable in the collapse of Bankia.  Too bad the central bankers did not listen to us: the entire “rescue” operation of the Spanish banks was ill fated from the first hour.  It has no chance to survive and it brought down many small investors who could ill afford the losses

(courtesy Don Quijones/WolfStreet)

The Unthinkable Just Happened In Spain

Submitted by Don Quijones via WolfStreet.com,

Untouchable. Inviolable. Immunity. Impunity. These are the sort of words and expressions that are often associated with senior central bankers, who are, by law, able to operate more or less above the law of the jurisdictions in which they operate.

Rarely heard in association with senior central bankers are words or expressions like “accused”, “charged” or “under investigation.” But in Spain this week a court broke with that tradition, in emphatic style.

As part of the epic, multi-year criminal investigation into the doomed IPO of Spain’s frankenbank Bankia – which had been assembled from the festering corpses of seven already defunct saving banks – Spain’s national court called to testify six current and former directors of the Bank of Spain, including its former governor, Miguel Ángel Fernández Ordóñez, and its former deputy governor (and current head of the Bank of International Settlements’ Financial Stability Institute), Fernando Restoy. It also summoned for questioning Julio Segura, the former president of Spain’s financial markets regulator, the CNMV (the Spanish equivalent of the SEC in the US).

The six central bankers and one financial regulator stand accused of authorizing the public launch of Bankia in 2011 despite repeated warnings from the Bank of Spain’s own team of inspectors that the banking group was “unviable.”

Though they have so far only been called to testify, the evidence against the seven former public “servants” looks pretty conclusive. Testifying against them are two of Banco de España’s own inspectors who have spent the last two years investigating Bankia’s collapse on behalf of the trial’s presiding judge, Fernando Andreu. There are also four emails from the Bank of Spain’s inspector in charge of overseeing Bankia’s IPO, José Antonio Casaus, to the assistant director general of supervision at the Bank of Spain, Pedro Comín, that very clearly express concerns about the bank’s “serious and growing” profitability, liquidity, and solvency issues.

Here are four brief excerpts:

  • [April 8, 2011] “Bankia is unviable, both economically and financially. In the end, the FROB [Spain’s state-owned Fund for Orderly Bank Restructuring] will have to convert its debt into shares for the BFA [Spain’s state-owned banking group] and refund holders of Bankia’s subordinate bonds and “preferentes” shares. […] Find a buyer for the group.”
  • [April 14,2011] “This is not working, it’s getting worse. […] Bankia’s capacity to generate resources is deteriorating.”
  • [May 10, 2011, uppercase used by Causus for emphasis] “The endogenous solution put forward by Bankia — a public listing with a double banking structure without the necessary structural changes — WILL NOT WORK AND WILL HAVE A DEVASTATING IMPACT ON TAXPAYERS.”
  • [May 16, 2011, 2 months before the IPO] “The (bank’s) board is highly politicized and unprofessional. It still has the same directors that led the former entities to need public assistance: [they are] discredited in the eyes of the markets.”

As the court’s edict reads, the contents of the emails unequivocally demonstrate that the Bank of Spain’s management was perfectly aware of the “inviability of the group” as well as “the fabricated financial results it had presented.” Yet, together with the CNMV, it lent its blessing to those results, knowing full well they bore no relation to reality .

Featured in the IPO prospectus, those results were crucial in luring 360,000 credulous investors into buying shares in the soon-to-be-bankrupt bank, not to mention the 238,000 people who bought “preferentes” shares or other forms of high-risk subordinate debt instruments being peddled by Bankia’s sales teams as “perfectly safe investments.” Most have since been refunded by Spanish taxpayers.

The IPO prospectus was also signed off on by Bankia’s auditor, Deloitte, whose Spanish representatives are also warming the defendants’ bench. Deloitte was not just the bank’s auditor, it was also the consultant responsible for formulating its accounts. As El Mundo put it, first Deloitte built Bankia’s balances, then it audited them, in complete contravention of the basic concept of auditor independence [read: Deloitte About to Pay for its Spanish Sins?].

Given this deeply compromising, not to say illegal, set-up, it’s hardly any surprise that Deloitte was happy to confirm in Bankia’s IPO prospectus that the newly born frankenbank was in sound financial health, having made a handsome profit of €300 million just before its public launch. It was a blatant lie: in reality Bankia was bleeding losses from every orifice.

Now, just about everybody who played a role in this momentous deception, with the exception of the government itself, is standing trial. That includes 65 former members of Bankia’s management team including its former President and ex-chief of the IMF, Rodrigo Rato, who faces charges of money laundering, tax fraud, and embezzlement.

In his testimony to the court almost exactly two years ago, Rato argued (quite rightly) that the blame for Bankia’s collapse should be much more evenly spread out. Bankia’s public launch “was not a whimsical decision” taken by its chief executives, he said, but was the inevitable result of regulatory changes at the beginning of 2011. According to Rato, the CNMV even played an active role in drawing up the bank’s lie-infested IPO brochure.

Now, two years later, some of Spain’s most senior central bankers and financial regulators find themselves in the rare position of having to explain and defend the actions and decisions they took that helped pave the way to the biggest bank bailout in Spanish history. It will be one of the first times that senior members of the global central banking complex have had to face trial for the consequences of their actions.

That’s not to say that justice will prevail. Spain’s legal system is notoriously slow, especially when it’s convenient, and heavily politicized. There’s also the possibility that the ECB may intervene as it did in Slovenia’s investigation of its central bank’s alleged misuse of bailout funds. The last Spanish judge that dared to take on the financial elite, Elpidio Silva, sent Caja Madrid’s CEO Miguel Blesa to jail — not once, but twice – and was barred from the bench for 17 years. As such, the presiding judge of the current case, Fernando Andreu, would do well to tread carefully; he risks stepping on some very important toes.

Now a hot new bail-in-able debt got cooked up by financial engineers in France. And it’s a big hit. Read…  Biggest EU Banks Embark on the Mother of All Debt Binges


(courtesy zero hedge)

(courtesy zero hedge)

Bannon Breaks With Pence, Delivers Warning To Europe

Two days ago, when describing the two opposing foreign policy tracks emerging within Trump’s administration (which led to disappointment inside Russia, which was hoping for a more aggressive detente between Putin and Trump), we said that “there are two clear axes developing within the Trump administration: a Pence/Mattis/Haley foreign policy and a Trump/Bannon/Miller foreign policy.”

As a reminder, over the weekend first Secretary of Defense Jim Mattis and then Vice President Mike Pence assured participants at the Munich Security Conference that Trump would “hold Russia accountable” and vowed “unwavering support” to both NATO and EU.

Today, confirming that there is indeed a schism when it comes to the administration’s diplomatic objectives, Reuters writes that in the week before VP Mike Pence visited Brussels and pledged America’s “steadfast and enduring” commitment to the European Union, Trump’s chief strategist Steve Bannon met with the German ambassador and delivered a different message. Bannon, according to Reuters’ sources, signaled to Germany’s ambassador to Washington that he viewed the EU as a flawed construct and favoured conducting relations with Europe on a bilateral basis.

In other words, Bannon voiced the same conerns made by others about the sustainability of the European experiment, if not in polite company, and was preparing how to address Europe’s “failure” through bilateral trade treaties, the same as the recently “free” UK is doing currently with all of its former trading partners.

There was some push back to the Reuters report: a White House official who checked with Bannon in response to a Reuters query confirmed the meeting had taken place but said the account provided to Reuters was inaccurate. “They only spoke for about three minutes and it was just a quick hello,” the official said. The White House said there was no transcript of the conversation. The sources who had been briefed on it described it as polite and stressed there was no evidence Trump was prepared to go beyond his rhetorical attacks on the EU – he has repeatedly praised Britain’s decision to leave – and take concrete steps to destabilise the bloc.

However, Reuters’ sources described a longer meeting in which Bannon took the time to spell out his world view. They said his message was similar to the one he delivered to a Vatican conference back in 2014 when he was running the right-wing website Breitbart News.

In those remarks, delivered via Skype, Bannon spoke favourably about European populist movements and described a yearning for nationalism by people who “don’t believe in this kind of pan-European Union.”


Western Europe, he said at the time, was built on a foundation of “strong nationalist movements”, adding: “I think it’s what can see us forward”.

The Bannon encounter reportedly unsettled people in the German government, in part because some officials had been holding out hope that Bannon might temper his views once in government and offer a more nuanced message on Europe in private.

One source briefed on the meeting said it had confirmed the view that Germany and its European partners must prepare for a policy of “hostility towards the EU”. A second source expressed concern, based on his contacts with the administration, that there was no appreciation for the EU’s role in ensuring peace and prosperity in post-war Europe.


“There appears to be no understanding in the White House that an unraveling of the EU would have grave consequences,” the source said.

Anxiety over the White House stance led French Foreign Minister Jean-Marc Ayrault and Wolfgang Ischinger, chairman of the Munich Security Conference, to issue unusual calls last week for Pence to affirm during his visit to Europe that the U.S. was not aiming to break up the EU.

And, as discussed before, Pence obliged pledging strong ties between the United States and the EU, and making clear his message was shared by the president. “President Trump and I look forward to working together with you and the European Union to deepen our political and economic partnership,” he said.

However, despite the message of reassurance by Pence and Mattis, Europeans remain unconvinced as the real question – as suggested previously – remains unanswered: which axis is dominant: that of Trump/Bannon/Miller or Pence/Mattis/Haley. Indeed, as Reuters adds, the Pnence tour did not end the concerns in European capitals.

“We are worried and we should be worried,” Thomas Matussek, senior adviser at Flint Global and a former German ambassador to the Britain and the United Nations, told Reuters. “No one knows anything at the moment about what sort of decisions will be coming out of Washington. But it is clear that the man on top and the people closest to him feel that it’s the nation state that creates identity and not what they see as an amorphous group of countries like the EU.”

With elections looming in the Netherlands, France and Germany this year, European officials said they hoped Pence, Secretary of Defense Jim Mattis and Secretary of State Rex Tillerson could convince Trump to work constructively with the EU, overriding Bannon’s skepticism.

What is the worst-case scenario, if only perceived through the eyes of Europe? It was described by Ischinger in an article published last week, entitled “How Europe should deal with Trump”.

He said that if the U.S. administration actively supported right-wing populists in the looming election campaigns it would trigger a “major transatlantic crisis”.

Translation: should the “far right” win in the Netherlands, France and/or Italy, Europe already has a prepared scapegoat who to blame, and not surprisingly, it has nothing to do with the real culprits who over the past decade cared only about central banks’ failed reflationary policies which however succeeded in blowing the world’s biggest asset bubble, and unleashing an unprecedented tide of social discontent, leading to where the world finds itself now.


I wonder if any foul play is prevalent here: Russian Ambassador Churkin dies suddenly in NY

(courtesy zero hedge)

Russian Ambassador To UN Vitaly Churkin Has “Died Suddenly” In New York

Vitaly Churkin, who served as Russia’s permanent representative to the United Nations since 2006, “died suddenly” in New York, the Russian Foreign Ministry announced. Churkin died one day before his 65th birthday. Russia’s deputy U.N. ambassador, Vladimir Safronkov, told AP that Churkin became ill and was taken to Columbia Presbyterian Hospital, where he died Monday.

Churkin was at the Russian embassy on East 67th Street when he became sick with a “cardiac condition” around 9:30 am, sources told the New York Post. A Russian Embassy spokesperson told CBS News that they believe Churkin died of a heart attack but they do not yet have official word on the cause of death.

As the AP adds, Churkin has been Russia’s envoy at the United Nations for a little over a decade and was considered Moscow’s great champion at the U.N. He had a reputation for an acute wit and sharp repartee especially with his American and Western counterparts. He was previously ambassador at large and earlier served as the foreign ministry spokesman.

Colleagues took to social media to react to Churkin’s death:

Absolutely devastated to hear that my friend & colleague Vitaly Churkin has died. A diplomatic giant & wonderful character. RIP

Saddened to hear news of a colleague Amb Vitaly Churkin of Russian Federation suddenly passing away. Our condolences to his family & country

Our sincere condolences on the passing away of Permanent Representative Vitaly Churkin. We are saddened by the news of your loss @RussiaUN

The announcement “of Churkin’s passing this morning” was met with shock when it was delivered during a session at the UN headquarters. “He was a dear colleague of all of us, a deeply committed diplomat of his country and one of the finest people we have known,” a UN official who delivered the news to her colleagues said.

Shocking news to hear the passing away of Amb Vitaly Churkin. A brilliant ambassador who served his country & people. May he rest in peace.

The Russian foreign ministry gave no details on the circumstances of his death but offered condolences to his relatives and said the diplomat had died one day before his 65th birthday. Here is the statement issued moments ago from the Russian Foreign Ministry:

A prominent Russian diplomat has passed away while at work. We’d like
to express our sincere condolences to Vitaly Churkin’s family.

The Russian Foreign Ministry deeply regrets to announce that Russia’s Permanent Representative to the United Nations Vitaly Ivanovich Churkin has died suddenly in New York on February 20, a day ahead of his 65th birthday.

“He was an outstanding person. He was brilliant, bright, a great diplomat of our age,” Russian Foreign Ministry spokeswoman Maria Zakharova said, adding that the news of Churkin’s death was “completely shocking.”

Interviewed Churkin just 2 weeks ago. He looked in good health and was very energetic during the interview. Shockedhttps://youtu.be/1J514rtxado 

According to Sputnik, Russia’s Deputy Permanent Representative to the United Nations Yevgeniy Zagaynov said about Churkin that he kept working “till the very end.” The representative of the UN Secretary-General said that the UN was shocked by the news, extending their condolences to Moscow.

Perhaps the best known Russian diplomat alongside Sergey Lavrov, Vitaly Ivanovich Churkin was born in Moscow in 1952. He graduated from the Moscow State Institute of International Relations in 1974, beginning his decades-long career at the Ministry of Foreign Affairs shortly.

Ambassador Churkin, who held a Ph.D in history, served as Russia’s Permanent Representative to the United Nations since 2006, where he has clashed on numerous occasions with opposing members of the Security Council whose decisions Russia has vetoed more than once. Prior to this appointment, he was Ambassador at Large at the Ministry of Foreign Affairs of the Russian Federation (2003-2006), Ambassador to Canada (1998-2003), Ambassador to Belgium and Liaison Ambassador to NATO and WEU (1994-1998), Deputy Foreign Minister and Special Representative of the President of the Russian Federation to the talks on Former Yugoslavia (1992-1994), Director of the Information Department of the Ministry of Foreign Affairs of the USSR/Russian Federation (1990-1992).

Churkin is survived by his wife and two children.





On Friday, Trump was mocked when he stated that Sweden has a migrant problem. Over the weekend he was vindicated after violent riots erupt in the Swedish suburb:

(courtesy zero hedge)


“It Looks Like A War Zone”: Trump Vindicated After Violent Riot Erupts In Swedish Suburb

As we reported last night, just days after the media mocked Trump for his allegations of major problems with Swedish migrant policies, the president was vindicated after a violent riot broke out in the borough of Rinkeby, also known as “little Mogadishu.” Now that the incident is over, in their “post-mortem” Swedish officials confirm that riots erupted in the “heavily immigrant Stockholm suburb” Monday night, as masked looters set cars ablaze and threw rocks at cops, injuring one police officer, Swedish officials said.

The violence erupted just days after President Trump was ridiculed during a Saturday campaign rally for mentioning Sweden alongside a list of European targets of terror. Trump later said his “You look at what’s happening last night in Sweden” remark was in response to a Fox News report on the country’s refugee crime crisis that aired on Friday evening.

“Sweden. They took in large numbers [of refugees],” Trump added at the Florida rally. “They’re having problems like they never thought possible.”

Sweden’s official Twitter account – which is operated by a different user each week – tweeted at Trump on Monday morning: “Hey Don, this is @Sweden speaking! It’s nice of you to care, really, but don’t fall for the hype. Facts: We’re OK!”

Events just hours later refuted that optimistic assessment.

The violence in Rinkeby began around 8 p.m., when officers arrested a suspect at an underground station on drug charges, The Local reported. A group soon gathered, hurling rocks and other objects at officers and prompting one cop to fire his gun “in a situation that demanded he use his firearm,” police spokesman Lars Bystrom said.

Hours later, the Rinkeby riots began, with a second wave starting around 10:30 p.m. Seven or eight cars were set on fire and many stores saw looting, The Local reported. A photographer from media outlet Dagens Nyheter said a group of 15 people beat him as he tried to document the chaos. Swedish Police were forced to fire warning shots at the unidentified group of rioting protesters, who set cars on fire, throwing stones at police and looting local stores.

A police officer was injured during the clashes, forcing law enforcers to fire several warning shots at the crowd, Swedish public service broadcaster SVT reported, citing a local police spokesperson.

A policeman investigates a burnt car in Rinkeby, Sweden February 21, 2017

The silver lining is that “nobody has been found injured at the scene and we have checked the hospitals and there hasn’t been anyone with what could be gunshot wounds,” Bystrom added.

“I was hit with a lot of punches and kicks both to my body and my head. I have spent the night in hospital,” said the photographer, who was not named. “It looks like a war zone” he added.

The rioting ended just after midnight.

No arrests were made; however, reports were filed on three violent acts, violence against a police officer, two assaults, vandalism and aggravated thefts, authorities said.

Firefighters survey the scene in the suburb of Rinkeby where riots erupted on Monday night.

As we reported last night, Rinkeby is the same area where an Australian “60 Minutes” crew was attacked by a group of men in April 2016. The film crew was attempting to enter a so-called “no go zone,” which authorities deny they use as a label. Rinkeby, however, has been officially classified as one of 15 “particularly vulnerable” areas across Sweden.

The country’s prime minister, Stefan Lofven, said Monday, “Yes, we have challenges like all other countries. There’s no doubt. We have a situation in the world where 65 million people had to flee their countries last year, the year before that. 65 million. So that’s a war for us together.” He also said Sweden was investing more in housing, technology and its welfare system.

Reports of rapes in Sweden jumped 13 percent in 2016 compared to the previous year, and reports of sexual assaults were up 20 percent, according to preliminary data from the Swedish National Council for Crime Prevention. Recent migration to Sweden hit its peak in 2015 with more than 160,000 asylum applications. It dropped to almost 30,000 in 2016.

The mainstream media, so eager to mock Trump’s “error” on Saturday, has been oddly delayed in reporting on last night’s Swedish violence.






Bank of America’s Blanch believes with the increased rigs placed by the shale boys will increase production by 700,000 barrels per day.  Thus for 5 days:  3.5 million

(courtesy zero hedge)

US Shale Production To Soar By 3.5 Million Barrels/Day Over Next Five Years: BofA Explains Why

Two years ago, when Saudi Arabia launched on an unprecedented campaign to crush high-cost oil producers, in the process effectively putting an end to the OPEC cartel (at least until last year’s attempt to cut production), it made a bold bet that US shale producers would be swept under when the price of oil tumbled, leading to a tsunami of bankruptcies, as well as investment and production halts. To an extent it succeeded, but where it may have made a glaring error is the core assumption about shale breakeven costs, which as we reported throughout 2016, were substantially lower than consensus estimated.

In his latest note, BofA’s Francisco Blanch explains not only why a drop in shale breakevens costs is what is currently the biggest wildcard in the global race to reach production “equilibrium”, but also why US shale oil production could surge in the coming years, prompting OPEC to boost production in hopes of recapturing market share.  Specifically, Blanch predicts that US shale oil production could grow by a whopping 3.5 million barrels per day over the next five years.

Here’s why: as he explains “many oil companies around the world have survived the price meltdown by bringing down breakeven costs in the last two years.

But what parts of the world can grow output in the years ahead? In BofA’s view, US shale oil producers will come out ahead and deliver outsized market share gains by 2022. Shale oil output in the US may grow sequentially by 600 thousand b/d from 4Q16 to 4Q17 on increased activity in oil rigs and fast productivity gains. Importantly, breakeven costs for key major US plays now stand around the $55/bbl mark.

As crude oil prices recover further, cost reflation may partly offset reduced costs linked to less regulation. So assuming a gradual recovery in oil prices into a long-term average of $60 to $70/bbl, BofA  projects average annual US shale oil growth of 700 thousand b/d in 2017-22, or roughly 3.5 million bpd over the next 5 years.

Shale production could rise even more if prevailing oil prices are higher than $55/barrel. Here is BofA’s sensitivity analysis:

We estimate that US shale production will decline annually by 270 thousand b/d, on average, until 2022 in a $40/bbl WTI environment. At $50/bbl, growth returns, though only at a small average of 240 thousand b/d. Should WTI trade at $60 for the next five years, growth reaches 700 thousand b/d, and at $70/bbl it reaches 950 thousand b/d (Chart 15). It goes without saying that the level of US shale output in 2022  will highly depend on the average price of WTI in the next five years (Chart 16).

It’s not just the US however: in addition to US shale, BofA sees incremental growth in Brazil, Russia, Kazakhstan and Canada over the next five years, driven by giant projects in the Lula, Kashagan or Johan Sverdrup fields. However, many of the gains in supply from non-OPEC non-shale producers will come on the back of investments dating to before the collapse in global oil prices. Meanwhile, countries such as Mexico and the UK will keep facing output declines. All in, BofA projects non-OPEC output to reach 61.7 million b/d by 2022. This equates to 830 thousand b/d of annual average growth in the next five years, or around the 20-year average of 790 thousand b/d (Chart 3).

Put differently, Blanch sees 84% of the incremental non-OPEC supply gains coming from US shale, as production in many parts of the world either stagnates or declines outright (Chart 4).

Which brings us back to square one, and specifically the migraine-causing dilemma faced by OPEC, which Saudi Arabia had hoped to eliminate in 2014: volume or price?

With non-OPEC poised to grow again, OPEC will need to increase oil output by just 2.2 million b/d to meet global incremental oil demand of about 5.5 million b/d over the 2017-22 period, according to BofA calculations. So about 1/3 of global oil supply growth will come from OPEC in 2017-22 (Chart 5). In this context, Blanch believes that Saudi, Iraq and the UAE are the only countries able to increase their output in the medium term, while Algeria, Nigeria or Venezuela would need massive investments to reverse current trends and boost output.

This may be true, unless of course just like US shale, production breakeven costs are sliding across the world. Furthermore the actions of such giant “vendor-financing” providers as China (seen best in the case of Venezuela, where China continues to provide Caracas with much needed funds in exchange for far below market oil deliveries) remain unpredictable, and may afford these non-core OPEC nations just the funds they need to also steal market share from Saudi, Iraq and UAE.

According to BofA, while OPEC countries have the resources to grow production, its previous work shows that OPEC revenue would likely be higher if no additional investments are made compared to scenarios where increased OPEC production leads to lower prices (Chart 6).

For this reason, Francisco Blanch says he expects limited OPEC oil output growth over the next 5 years.

We, however, disagree, especially following today’s news that Russia overtook Saudi Arabia as the world’s largest crude producer in December, when both countries started restricting supplies ahead of agreed cuts with other global producers to curb the worst glut in decades.

As Bloomberg reported earlier, Russia pumped 10.49 million barrels a day in December, down 29,000 barrels a day from November, while Saudi Arabia’s output declined to 10.46 million barrels a day from 10.72 million barrels a day in November, according to data published Monday on the website of the Joint Organisations Data Initiative in Riyadh. That was the first time Russia beat Saudi Arabia since March. Iraq came in fourth at 4.5 million barrels a day, followed by China at 3.98 million barrels a day, the data show. The US, which has emerged as the oil swing producer, was the third-largest producer, at 8.8 million barrels a day in December compared with 8.9 million barrels a day in November, according to JODI.

It is unlikely that if BofA is right and US shale manages to boost oil output by 3.5 million bpd – or more, if oil prices rise further – over the next five years, potentially surpassing Saudi Arabia should the kingdom’s production remain stagnant, that Riyadh will sit and watch as not only Russia but the US threatens its standing as the world’s biggest producer of crude.

Whether this is accurate will be revealed over the coming months based on what happens to the record level of crude inventories currently in the US. Should the much anticipated “rebalancing” fail as excess demand fails to materialize, the oil-rich kingdom may have no choice but to once again try to put marginal producers out of business but breaking up the OPEC cartel and replaying the post-2014 episode once again, sending crude prices in freefall.






Gasoline inventories are now at 27 yr highs.  Generally when you see both crude oil inventories and gasoline levels  at record highs you have a problem

(courtesy Nick Cunningham/OilPrice.com)

Biggest Gasoline Glut In 27 Years Could Crash Oil Markets

Submitted by Nick Cunningham via OilPrice.com,

Oil prices are stuck in a holding pattern, waiting for more definitive data on what comes next. OPEC compliance is helping keep prices afloat, but rising U.S. oil production is acting as a counterweight.

A new problem that has suddenly emerged is the record levels of gasoline sitting in storage. The market has already had to digest the fact that U.S. crude oil stocks were rising, and investors have done their best to explain away the trend. But now gasoline inventories are climbing to unexpected heights.

It would be one thing if crude stocks were rising, perhaps because refiners were going offline for maintenance. But if that were the case, then gasoline stocks would draw down on lower refining runs. But if both crude and refined product inventories are going up at the same time, then there should be some reasons for worry.

In fact, the glut of gasoline is now the worst in 27 years. At 259 million barrels, U.S. gasoline storage levels are now at their highest level since the EIA began tracking the data back in 1990.

(Click to enlarge)

Part of the reason for the glut, of course, are high levels of production. Although gasoline production ebbs and flows seasonally, U.S. production has been on an upward trend in recent years. Instead of bouncing around in a range of 8.5 to 9.5 million barrels per day before 2014, U.S. production since the collapse of oil prices has steadily climbed to a range of 9 to 10 mb/d.

(Click to enlarge)

But that increase came in order to satisfy rising demand (which, of course, was stoked by lower prices). More demand should have soaked up that excess supply. However, that is where the problem gets worse. Lately, U.S. demand has faltered.

(Click to enlarge)

U.S. gasoline demand plunged to just 8.2 million barrels per day in January, and sales were down 4 percent from a year earlier. It was also the lowest level in four years. Weak demand is raising some red flags for the market.

Demand is seasonal, with softer demand in winter months, but this winter’s ‘valley’ is lower than any other since 2012.

The problem becomes particularly acute when you take into account the fact that refiners have actually cut back on gasoline production in recent weeks. Even with lower refining runs, gasoline storage levels continued to rise.

The data is worrying, especially since broader economic data does not point to deep problems with the U.S. economy. Some, including the EIA, speculate that higher prices are cutting into demand. That would be surprising given that prices at the pump are still a fraction of what they were a few years ago.

The drop off in demand could be temporary, with consumption rebounding in a few months. Warmer temperatures tend to lead to more driving, and if demand rises it will halt the climb in gasoline inventories. But even a small hiatus in demand has led to a buildup in storage levels to such a degree that it will take time to bring down. “It kind of ruins your whole year potentially,” Sam Margolin, an analyst at Cowen, told the WSJ. “Demand growth appears to be the riskiest element of the oil equation in 2017, and the rally could pause until driving season.”

The glut of gasoline has led to tankers being turned away at New York Harbor in recent weeks, diverted to ports in the Caribbean. However, even that did not resolve the glut on the U.S. east coast. “Record-high inventories in the region are now pushing prices low enough to turn the typical trade flow on its head,” Bloomberg reports. The east coast typically imports a lot of crude oil and refined products. But refined products are instead heading in the other direction because of the buildup in supply.

If demand does not rebound, then gasoline inventories will rise further. At that point, refiners will be forced to cut back on production, which means a reduction of their purchases of crude oil. Less oil sales means higher crude oil inventories, pushing down prices. Ultimately, that could force drillers to reduce supply. In short, if U.S. demand – and by extension, global demand – does not come through for the oil market, then oil prices could decline this year.


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



GBP/USA 1.2402 DOWN .0069 (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)


Early THIS TUESDAY morning in Europe, the Euro FELL by 76 basis points, trading now WELL BELOW the important 1.08 level FALLING to 1.0532; 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 13.36 POINTS OR 0.41%     / Hang Sang  CLOSED DOWN 182.45 POINTS OR 0.76%    /AUSTRALIA  CLOSED DOWN 0.09%  / EUROPEAN BOURSES ALL IN THE GREEN EXCEPT LONDON 

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

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

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

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

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

The NIKKEI: this TUESDAY morning CLOSED UP 130.36 POINTS OR 0.68% 

Trading from Europe and Asia:

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 182.45 POINTS OR 0.76%       / SHANGHAI CLOSED UP 13.36   OR 0.41%/Australia BOURSE CLOSED DOWN 0.09% /Nikkei (Japan)CLOSED UP 130.36 POINTS OR 0.68%  /  INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1230.50


Early TUESDAY morning USA 10 year bond yield: 2.4520% !!! UP 1 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  3.0551, UP 1 IN BASIS POINTS  from FRIDAY night.

USA dollar index early TUESDAY morning: 101.52 UP 62 CENT(S) from THURSDAY’s close.

This ends early morning numbers TUESDAY MORNING


And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 4.034% UP 1  in basis point yield from FRIDAY 

JAPANESE BOND YIELD: +.095%  UP  1/10  in   basis point yield from FRIDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD:1.682%  UP 5 IN basis point yield from  FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.247 UP 5 POINTS  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 56 points HIGHER than Spain.





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

Euro/USA 1.0546 DOWN .0063 (Euro DOWN 63 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 113.53 UP: 0.264(Yen UP 26 basis points/ 

Great Britain/USA 1.2465 DOWN 0.0007( POUND DOWN 7 basis points)

USA/Canada 1.3154 UP 0.0051(Canadian dollar DOWN 51 basis points AS OIL ROSE TO $54.27


This afternoon, the Euro was DOWN by 63 basis points to trade at 1.0546


The POUND FELL 7  basis points, trading at 1.2465/

The Canadian dollar FELL  by 51 basis points to 1.3154,  WITH WTI OIL RISING TO :  $54.27

The USA/Yuan closed at 6.8845/
the 10 yr Japanese bond yield closed at +.095% PU 1/10 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield PAR IN basis points from FRIDAY at 2.42% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.025  PAR in basis points on the day /

Your closing USA dollar index, 101.38 UP 48 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 TUESDAY: 1:00 PM EST

London:  CLOSED DOWN 25.03 OR 0.34% 
German Dax :CLOSED UP 139.87 POINTS OR 1.18%
Paris Cac  CLOSED UP 23.77 OR 0.49%
Spain IBEX CLOSED UP 34.40 POINTS OR 0.36%
Italian MIB: CLOSED UP 64.93 POINTS OR 0.34%

The Dow closed UP 118.95 OR 0.58%

NASDAQ WAS closed up 27.37 POINTS OR 0.47%  4.00 PM EST
WTI Oil price;  54.27 at 1:00 pm; 

Brent Oil: 56.85  1:00 EST




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

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


BRENT: $56.61



EURO/USA DOLLAR CROSS:  1.0532 down .0076 

USA/JAPANESE YEN:113.66   down 0.392

USA DOLLAR INDEX: 101.46  up 56  cents ( HUGE resistance at 101.80)

The British pound at 5 pm: Great Britain Pound/USA: 1.2474 : up 3   BASIS POINTS.

German 10 yr bond yield at 5 pm: +.301%



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


Tech Stocks Extend Record Winning Streak As Dow Tops 20,700

Overheard everywhere today…


Dow, S&P, and Nasdaq all hit fresh record highs today

(as Reuters notes)

The S&P is trading at 17.8 times earnings estimates for the next 12 months, above the long-term average of 15 times, according to Thomson Reuters Datastream.


“There is no doubt in anyone’s mind that the market has become over-extended and is due for a pullback,” said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey.


“That said, when you have this kind of momentum, it is very hard to sit on the sidelines.”

This is the 14th straight day of gains for the S&P 500 Tech sector… an all-time record…


And is the most overbought in history…


50 days in a row without a 1% move.

Dow topped 20,700 and while VIX was crushed lower it ended the day higher with stocks – once again very unusual…


VIX and Stocks are completely decoupled…


Gold remains 2017’s winner but the melt-up in stocks is catching up fast…


Overnight weakness in Treasuries was well bid during the US day session…


The Dollar Index roundtripped from overnight strength intraday…


Led by Cable strength…(yest4erday the USd was deastock during the President’s Day holiday)


The Peso surged below 20/$…


Copper and Crude are marginally higher from Friday’s close, PMs flat…


RBOB ended the day lower below $1.50 and crude rolled over but ended green…





Soft data USA PMI manufacturing index disappoints as the hope category disappoints:

Mfg: 54.3 a drop from 55.0

Service:  53.9 down from 55.6

(courtesy zerohedge)


US PMIs Tumble, Catch Down To ‘Hard Data’ Disappointment As “Post-Election Upturn Loses Momentum”

Despite soaring ‘soft’ survey data from around the world, US manufacturing and services PMI printed disappointing drops in February – catching down to the ‘hard’ data declines since Trump’s election.

The Soft data hope is fading fast… (Manufacturing dropped from 55.0 to 54.3, Services slumped from 55.6 to 53.9).

The composite PMI dropped 1.50 points – the biggest drop in a year.

Digging into the details exposes some ugly realities…

Manufacturers signalled that input cost inflation was at its highest level since September 2014. This was linked to increased prices for a range of raw materials, particularly metals and oilrelated inputs. However, factory gate price inflation was only marginal and slipped to a three-month low in February, thereby suggesting a continued squeeze on operating margins.


“Service sector job creation moderated to its slowest for  three  months in February”


Growth of business output, new orders and hiring all waned, as did inflationary pressures.


Some service providers commented on a greater degree of caution in terms of client spending

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“The drop in the flash PMI numbers for February suggest that the post-election upturn has lost some momentum. Growth of business output, new orders and hiring all waned, as did inflationary pressures.


“February also saw a sharp pull-back in business optimism about the outlook over the next 12 months, which suggests companies have become more cautious about spending, investing and hiring.


“However, even with the February dip, the PMI remains at a level broadly consistent with the economy growing at a 2.5% annualized rate in the first quarter. The survey’s employment index is meanwhile indicating that a respectable 165,000 jobs were added to the economy in February.



Wow!! Jay Sekulow a prominent lawyer in the USA states that Obama changed the way phone conversations/recordings are distributed.  On jan 3 2017 Obama did an executive order whereby 16 other agencies are to receive the above information gathering enterprise. It is illegal to pass on conversations from private  or government officials without a warrant and that did not stop Obama


(courtesy zerohedge)

Jay Sekulow: Obama Should Be “Held Accountable” For The “Soft Coup” Against Trump

In light of the recent flurry of leaks by the so-called “deep state”, which includes such agencies as the NSA and FBI and which last week lead to the resignation of Mike Flynn after a phone recording of his  phone conversation with the Russian ambassador was leaked to the WaPo and other anti-Trump publications, an article published on January 12 by the NYT has generated renewed interest. One month ago, the NYT reported that “In its final days, the Obama administration expanded the power of the National Security Agency to share globally intercepted personal communications with the government’s 16 other intelligence agencies before applying privacy protections.”

The new rules significantly relax longstanding limits on what the N.S.A. may do with the information gathered by its most powerful surveillance operations, which are largely unregulated by American wiretapping laws. These include collecting satellite transmissions, phone calls and emails that cross network switches abroad, and messages between people abroad that cross domestic network switches. The change means that far more officials will be searching through raw data. Essentially, the government is reducing the risk that the N.S.A. will fail to recognize that a piece of information would be valuable to another agency, but increasing the risk that officials will see private information about innocent people.

While previously the N.S.A. filtered information before sharing intercepted communications with another agency, like the C.I.A. or the intelligence branches of the F.B.I. and the Drug Enforcement Administration, and furthermore N.S.A.’s analysts passed on only information they deemed pertinent, screening out the identities of innocent people and irrelevant personal information, following passage of Obama’s 11th hour rule, other intelligence agencies will be able to search directly through raw repositories of communications intercepted by the N.S.A. and then apply such rules for “minimizing” privacy intrusions.

In other words, what until recently was a trickle of private data captured about US individuals by the NSA with only a handful of people having full, immersive access, suddenly became a firehose with thousands of potential witnesses across 16 other agencies, each of whom suddenly became a potential source of leaks about ideological political opponents. And with the universe of potential “leaking” culprits suddenly exploding exponentially, good luck finding the responsible party.

However, the implications are far more serious than just loss of privacy rights.

According to civil right expert and prominent First Amendement Supreme Court lawyer, Jay Sekulow, what the agencies did by leaking the Trump Administration information was not only illegal but “almost becomes a soft coup”, one which was spurred by the last minute rule-change by Obama, who intentionally made it far easier for leaks to propagate, and next to impossible to catch those responsible for the leaks.

This is his explanation:

There was a sea-change here at the NSA with an order that came from president Obama 17 days before he left office where he allowed the NSA who used to control the data, it now goes to 16 other agencies and that just festered this whole leaking situation, and that happened on the way out, as the president was leaving the office.

Why did the Obama administration wait until it had 17 days left in their administration to put this order in place if they thought it was so important. They had 8 years, they didn’t do it, number one. Number two, it changed the exiting rule which was an executive order dating back to Ronald Reagan, that has been in place until 17 days before the Obama administration was going to end, that said the NSA gets the raw data, and they determine dissemination.

Instead, this change that the president put in place, signed off by the way by James Clapper on December 15, 2016, signed off by Loretta Lynch the Attorney General January 3, 2017, they decide that now 16 agencies can get the raw data and what that does is almost creates a shadow government. You have all these people who are not agreeing with President Trump’s position, so it just festers more leaks.

If they had a justification for this, wonderful, why didn’t they do it 8 years ago, 4 years ago, 3 years ago. Yet they wait until 17 days left.

One potential answer: they knew they had a “smoking gun”, and were working to make it easier to enable the information to be “leaked” despite the clearly criminal consequences of such dissemination.

As this point Hannity correctly points out, “it makes it that much more difficult by spreading out the information among 16 other agencies, if they want to target or take away the privacy rights, and illegally tap the phones, in this case General Flynn, it’s going to be much harder to find the perpetrator.”

Sekulow confirms, noting that back when only the NSA had access to this kind of raw data, there would be a very small amount of people who have access to this kind of data. “But this change in the Obama Administration was so significant that they allowed dissemination to 16 other agencies, and we wonder why there’s leaks.”

The lawyer’s conclusion: “President Obama, James Clapper, Loretta Lynch should be held accountable for this.”

Full clip below: see zero hedge.

a must read…

(courtesy David Stockman/Ron Paul Institute)

Leave a Reply

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

WordPress.com Logo

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

Google photo

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

Twitter picture

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

Facebook photo

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

Connecting to %s

%d bloggers like this: