March 7/GLD LOSES 3.81 TONNES OF GOLD AS A WITHDRAWAL /NOTHING LEAVES THE SLV/ANOTHER RAID ON BOTH GOLD AND SILVER AS BOTH COMEX GOLD AND COMEX SILVER OI’S REMAIN HIGH/USA TRADE DEFICIT SKYROCKETS TO 48 BILLION USA/ATLANTA FED LOWERS ESTIMATE FOR FIRST QUARTER GDP TO ONLY 1.3%.. AND THEY ARE GOING TO RAISE RATES?/WIKILEAKS RELEASES VAULT 7 DATA : REVEALS HOW THE CIA IS SPYING ON US/final draft

Gold at (1:30 am est) $1216.50 down $9.00

silver was : $17.52:  down 18 CENTS

Access market prices:

Gold: $1216.00

Silver: $17.50

For comex gold:

MARCH/ 

NOTICES FILINGS TODAY FOR MARCH CONTRACT MONTH:  1 NOTICE(S) FOR 100 OZ.  TOTAL NOTICES SO FAR: 46 FOR 4600 OZ    (0.1430 TONNES)

For silver:

 

For silver: MARCH

11 NOTICES FILED TODAY FOR 65,000 OZ/

Total number of notices filed so far this month: 1774 for 8,870,000 

Let us have a look at the data for today

.

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In silver, the total open interest FELL by ONLY 1 contract DOWN to 193,847 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  0.969 BILLION TO BE EXACT or 138% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH: THEY FILED: 11 NOTICE(S) FOR 55,000 OZ OF SILVER

In gold, the total comex gold ROSE BY 2,768  contracts DESPITE ANOTHER FALL IN THE PRICE GOLD ($1.00 with YESTERDAY’S trading ).The total gold OI stands at 439,988 contracts.

we had 1 notice(s) filed upon for 100 oz of gold.

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

GLD:

:

We had a huge change in tonnes of gold at the GLD: a withdrawal of 3.81 tonnes

Inventory rests tonight: 836.77 tonnes

.

SLV

We had no changes in inventory at the SLV

THE SLV Inventory rests at: 332.788 million oz

end

.

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

1. Today, we had the open interest in silver FELL by 1 contracts DOWN to 193,847 AS SILVER WAS UP 2 CENTS with YESTERDAY’S trading. The gold open interest ROSE BY 2768 contracts UP to 439,988 WITH ANOTHER FALL IN THE PRICE OF GOLD OF $1.00  (YESTERDAY’S TRADING)

(report Harvey

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

 

 i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 8.54 POINTS OR .26%/ /Hang Sang CLOSED UP 84.79 POINTS OR 0.36% . The Nikkei closed DOWN  34.99 POINTS OR 0.18% /Australia’s all ordinaires  CLOSED UP 0.23%/Chinese yuan (ONSHORE) closed DOWN at 6.9001/Oil ROSE to 53.38 dollars per barrel for WTI and 56.20 for Brent. Stocks in Europe ALL MIXED ..Offshore yuan trades  6.8970 yuan to the dollar vs 6.9001  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS CONSIDERABLY/ ONSHORE YUAN WEAKER BUT THE OFFSHORE YUAN STRONGER COUPLED WITH THE STRONGER DOLLAR. CHINA SENDS A MESSAGE TO THE USA NOT TO RAISE RATES

3a)THAILAND/SOUTH KOREA/NORTH KOREA

A North Korean diplomat echoes are fears as we are dealing with a madman inside North Korea

( zero hedge)

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

Don’t take these figures to heart.  Supposedly Chinese foreign reserves rise above 3 trillion USA but we need to see the the POBC’s foreign exchange positions (revealed in the middle of March) to get a clear picture of Chinese reserves.  I would expect when that is released it will be south of 3 trillion

( zero hedge)

4. EUROPEAN AFFAIRS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6.GLOBAL ISSUES

UKRAINE

Free trade did not help Ukraine one bit.  Basically they imported more goods and exported less and thus their trade balance worsened terribly

( GEFIRA)

7. OIL ISSUES

Now it is Fitch’s turn to state that oil prices will come down due to the huge increase in USA shale output:

( Calcuttawala/OilPrice.c0m)

8. EMERGING MARKETS

9.   PHYSICAL MARKETS

i)Rangold like Agnico Eagle are very good miners.  Their latest venture was the big Kibali gold mine in the Congo.  The mine was in a difficult area on the western side of the Congo Republic and these guys put the mine into production to perfection.  Now they need new discoveries and they are having difficulty finding one

( Bloomberg/GATA)

ii)Arizona wants to have gold and silver legal tender and exempt from capital gains

( Ron Paul/)

iii)James Turk believes that the raids on silver are losing force

( James Turk/Kingworldnews)

iv)Newmont joins Agnico Eagle searching for gold in Canada’s yukon

( Reuters/GATA)

v)Copper at one month lows signaling a slowing growth in China.  Yesterday saw the biggest inventory build in 15 years and thus down went Dr Copper

( zero hedge)

vi)Bix Weir describes the reason why the Thomson Reuters and the CME are backing out of the silver fix: because it will be illegal by Jan 1 2018

the story certainly has merit:

( Bix Weir)

vii)I would not take this to heart;  Russia’s gold reserves could overtake China.  Sovereign China bought all of its gold years ago and it basically “adds” to its official totals each month even though it was bought earlier

( Lawrie Williams/Sharp’s Pixley)

 

10.USA STORIES

i)The trade deficit rises from 44.3 billion in December up to 48.5 billion in January as imports exceeded exports; a huge deficit which will be a negative to GDP.  Donald will not be too happy with these results.

( zerohedge)

ii)It sure looks like Janet is digging herself into a deep hole.  She is going to raise rates while at the same time, the Atlanta Fed just lowered Q1 estimates for GDP to only 1.3%

( zero hedge)

iii)Donald attacks the pharmaceutical industry and vows to get pricing down:

( zerohedge)

iv)Due to the internet, bricks and mortar operations are faltering. Here is the next domino to fall; commercial real estate:

( Charles Hugh Smith)

v)I am sure that China is thrilled with their giant Telecom ZTE forced to pay a 1.2 billion uSA fine for selling USA technology to sanctioned Iran:

( zero hedge)

vi)Republican release plan to repeal and replace Obamacare.  It has no chance of passsing( zero hedge)

vii)And as expected the democrats respond:

( zero hedge)

viii)Credit card debt sees a big fall  (the consumer ran out of credit) whereas auto loans and student loans keeps rolling on in a northerly direction;
( zero hedge)

ix)the long awaited release of Vault 7 which is the largest ever publication of confidential CIA documents. Basically these guys can turn the microphone on inside your smart TV and then record your conversations

( zero hedge)

x)As I highlighted to you yesterday, the new Trumpcare bill has no chance of passing. Many conservatives are calling this a train wreck;

( zero hedge)

 

Let us head over to the comex:

The total gold comex open interest ROSE BY 2768 CONTRACTS UP to an OI level of 439,988 DESPITE THE  FALL IN THE  PRICE OF GOLD ( $1.00 with YESTERDAY’S trading). We are now in the contract month of MARCH and it is one of the poorer delivery months  of the year. In this MARCH delivery month  we had a GAIN of 11 contract(s) UP to 57. We had 1 contact(s) served upon yesterday, so we GAINED 12 CONTRACTS or  AN ADDITIONAL 1200  ounces will  stand for delivery.  The next  active contract month is April and here we saw it’s OI FALL by 1226 contracts DOWN TO 257,952 contracts.

For comparison purposes, the April 2016 contract at this time had an OI of 313,947 contracts. At the end of April/2016 only 12.3917 tonnes stood for physical delivery, although 21.306 tonnes stood initially at the beginning of April 2016.

The non active May contract month added 146 contracts and thus its OI is 414 contracts. The next big active month is June and here the OI ROSE by 3646 contracts up to 100,962.

We had 1 notice(s) filed upon today for 100 oz

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 And now for the wild silver comex results.  Total silver OI FELL BY 1 contracts FROM  193,848 DOWN TO 193.847 WITH YESTERDAY’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 closing price of silver that day: $20.44

We are in the active delivery month is March and here the OI decreased by 369 contracts down to 2264 contracts. We had 343 notices served upon yesterday so we lost 26 contracts or an additional 130,000 oz  will not stand for delivery.

For historical reference: on the first day notice for the March/2016 silver contract:  19,020,000 oz stood for deliveryHowever the final amount standing at the end of March 2016:  6,755,000 oz as the banker boys were busy convincing holders of many silver contracts to cash settle just like they did today.

The April/2017 contract month LOST 42 contracts to 915 contracts. The next active contract month is May and here the open interest GAIN 488 contracts UP to 153,285 contracts.

FOR COMPARISON

Initially for the April 2016 contract, 1,180,000 oz stood for delivery.  At the end of April 2016: 6,775,000 oz as bankers needed much silver to fill major holes elsewhere.

We had 11 notice(s) filed for 1,715,0000 oz for the MARCH 2017 contract.

VOLUMES: for the gold comex

Today the estimated volume was 110,440  contracts which is poor.

Yesterday’s confirmed volume was 166,660 contracts  which is poor

volumes on gold are getting higher!

INITIAL standings for MARCH
 March 7/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
2025.45 OZ
Scotia
63 kilobars
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
 
1 notice(s)
100 oz
No of oz to be served (notices)
56 contracts
5600 oz
Total monthly oz gold served (contracts) so far this month
46 notices
4600 oz
0.1430 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     18,132.7 oz
 This is very strange:  now for many days, nothing of substance enters the comex vaults.  They must have problems locating physical just like the LBMA>
Today we HAD 1 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 0  customer deposit(s):
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
 i) Out of Scotia:  2025.45 oz
total customer withdrawal: 2025.45 oz
We had 0  adjustment(s)
For MARCH:

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

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To calculate the initial total number of gold ounces standing for the MARCH. contract month, we take the total number of notices filed so far for the month (46) x 100 oz or 4600 oz, to which we add the difference between the open interest for the front month of MARCH (57 contracts) minus the number of notices served upon today (1) x 100 oz per contract equals 10,200 oz, the number of ounces standing in this NON  active month of MARCH.
 
Thus the INITIAL standings for gold for the MARCH contract month:
No of notices served so far (46) x 100 oz  or ounces + {(57)OI for the front month  minus the number of  notices served upon today (1) x 100 oz which equals 9000 oz standing in this non active delivery month of MARCH  (.3172 tonnes)
 
 
 
 
 
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On first day notice for MARCH 2016, we had 2.146 tonnes of gold standing. At the conclusion of the month we had 2.311 tonnes standing. 
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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/ 18.734 tonnes
March: 0.3173 tonnes
total for the 15 months;  244.578 tonnes
average 16.305 tonnes per month vs last yr  61.82 tonnes total for 15 months or 4.12 tonnes average per month (last yr).
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Total dealer inventory 1,419,840.049 or 44.162 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,926,910.898 or 277.664 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 277.664 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.
 
IN THE LAST 6 MONTHS  76 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE MARCH DELIVERY MONTH
MARCH INITIAL standings
 March 7. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
1,490,057.75 oz
Brinks
CNT
HSBC
Scotia
Deposits to the Dealer Inventory
601,536.510 oz
Brinks
Deposits to the Customer Inventory 
 844,393.223 oz
CNT
Delaware
JPMorgan
No of oz served today (contracts)
11 CONTRACT(S)
(55,000 OZ)
No of oz to be served (notices)
2254 contracts
(11,270,000  oz)
Total monthly oz silver served (contracts) 1774 contracts (8,880,000 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  1,734,257.8 oz
today, we had  1 deposit(s) into the dealer account:
i) Into Brinks: 601,536.510 oz
total dealer deposit: 601,536.510 oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 4 customer withdrawal(s):
 i) Out of Brinks: 259,640.380 oz
ii) Out of CNT: 619,168.330 oz
iii) Out of HSBC: 525,316.190 oz
iv) Out of Scotia: 85,932.880 oz
TOTAL CUSTOMER WITHDRAWALS: 1,490,057.75 oz
 we had 3 customer deposit(s):
i) Into CNT: 599,629.520 oz
ii) Into Delaware:  3128.903 oz
iii) Into JPMorgan; 241,634.800 oz
***deposits into JPMorgan have now resumed.
total customer deposits;  844,393.223   oz
 
 we had 0  adjustment(s)
The total number of notices filed today for the MARCH. contract month is represented by 11 contract(s) for 55,000 oz. To calculate the number of silver ounces that will stand for delivery in MARCH., we take the total number of notices filed for the month so far at 1774 x 5,000 oz  = 8,880,000 oz to which we add the difference between the open interest for the front month of MAR (2265) and the number of notices served upon today (11) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the March contract month:  1774(notices served so far)x 5000 oz  + OI for front month of Mar.( 2265 ) -number of notices served upon today (11)x 5000 oz  equals  20,140,000 oz  of silver standing for the Mar contract month. This is  now average for an active delivery month in silver.  We lost 26 contracts or an additional 130,000 oz will not stand.  
 
END
Volumes: for silver comex
Today the estimated volume was 26,934 which is poor!!!
FRIDAY’S  confirmed volume was 51,229 contracts  which is very good.
 
Total dealer silver:  35.464 million (close to record low inventory  
Total number of dealer and customer silver:   188.287 million oz
The total open interest on silver is now further from   its all time high with the record of 224,540 being set AUGUST 3.2016.

end

And now the Gold inventory at the GLD

march 7/a huge withdrawal of 3.81 tonnes from the GLD inventory/inventory rests at 836.77 tonnes

March 6/No change in gold inventory at the GLD/Inventory rests at 840.58 tonnes

March 3/ a huge withdrawal of 2.96 tonnes of gold from the GLD/Inventory rests at 840.58 tonnes

March 2/a deposit of 2.37 tonnes of gold into the GLD/Inventory rests tat 843.54 tonnes

March 1/no change in gold inventory at the GLD/Inventory rests at 841.17 tonnes

FEB 28/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

feb 27/no change in gold inventory at the GLD/Inventory rests at 841.17 tonnes

Feb 24/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

FEB 23/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

FEB 22/no changes in gold inventory at the GLD/Inventory rests at 841.17 tonnes

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.

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March 7 /2017/ Inventory rests tonight at 836.77 tonnes
*IN LAST 104 TRADING DAYS: 113.04 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 50 TRADING DAYS: A NET  12.17 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: a net    37.60 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory
march 7/no change in inventory at the SLV/Inventory rest at 332.788 million oz/
March 6/no change in inventory at the SLV/Inventory rests at 332.788 million oz/
March 3: two transactions:
i)March 3/ a small change, a withdrawal of 125,000 oz and this would be to pay for fees like insurance, storage etc/inventory now stands at 335.156 million oz.
ii) a huge withdrawal of 2.368 million oz/inventory rests this weekend at 332.788 million oz
March 2/no changes in silver inventory (despite the raid) at the SLV/Inventory rests at 335.281 million oz
March 1/no changes in inventory at the SLV/Inventory rests at 335.281 million oz/
FEB 28/no changes in inventor at the SLV/inventory rests at 335.281 million oz/
FEB 27/no change in inventory at the SLV/Inventory rests at 335.281 million oz/
FEB 24/no changes in inventory at the SLV/Inventory rests at 335.281 million oz.
FEB 23/no changes in inventory at the SLV/Inventory rests at 335.281 million oz
FEB 22/no changes in inventory at SLV/inventory rests at 335.281 million oz
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
.
March 7.2017: Inventory 332.788  million oz
 end

NPV for Sprott and Central Fund of Canada

will update later tonight the central fund of Canada figures

1. Central Fund of Canada: traded at Negative 9.0 percent to NAV usa funds and Negative 8.5% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.2%
Percentage of fund in silver:39.6%
cash .+0.2%( Mar 7/2017) 
will update later tonight the Sprott figures.
.
2. Sprott silver fund (PSLV): Premium FALLS  to -.29%!!!! NAV (Mar 7/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to  – 0.36% to NAV  ( Mar 7/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -0.29% /Sprott physical gold trust is back into NEGATIVE territory at -0.36%/Central fund of Canada’s is still in jail.
 

end

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNEet.

Gold Investing 101 – Beware eBay, Collectibles and “Pure” Gold Coins that are Gold Plated

By Mark O’Byrne March 7, 2017

Gold Investing 101 – Beware eBay, Collectibles and “Pure” Gold Coins that are Gold Plated (Part I)

  • Investors looking to gold again but gold buyers need to exert caution
  • ‘Wolves of Wall Street’ ready to hungrily gobble up life savings of unsuspecting ‘widows and orphans’
  • Like all markets are few bad apples in gold market
  • Need to do due diligence on company buying from
  • Avoid companies marketing gold plated coins as “pure gold” coins
  • Collectible coins do not capture the value of gold and are not safe havens
  • Not liquid and pricing similar to art market
  • Own gold bullion coins as insurance, to reduce counter party risk and to preserve wealth

http://www.goldcore.com/ie/our- products/gold-coins/ http://www.goldcore.com/ie/our-products/gold-coins/
Last year gold demand reached a three-year high and the gold price finished up 8% in dollars, 13% in euros and 31% in British pounds.

2017 has picked up where 2016 left off. Uncertainty with regard to both the political and financial outlook and a growing demand to hold assets outside of the banking system is seeing safe haven demand for gold and gold is 6% higher in dollars and by more in other currencies.

It is little wonder, therefore, that many investors are again looking to invest in gold and sometimes silver in order to diversify their portfolios and reduce risk.

As mentioned last week, when it comes to investment opportunities, the pickings are looking increasingly slim with many markets, including stock, bond and many property markets now at or near all time record highs.

The sale of a Gaugain for just $25 million, 74% less than it was bought for in 2009 and a 17% and 27% fall in sales for both Christie’s and Sotheby’s respectively, shows the air is rapidly coming out of the very bubbly art market.

Many major cities around the world show clear signs of property bubbles and some of them appear to seeing their bubbles beginning to burst – including the over inflated London property market.

Gradually we are again seeing increasing numbers of investors turning to the one market that has endured political and financial uncertainties, recessions, depressions, ‘stagflations’ and ‘hyperinflations’ – the gold market.

When it comes to investing in gold, new investors can feel overwhelmed when it comes to looking at what kind of gold and related products they should go for as there are seemingly so many ‘great’ gold investment opportunities out there.

Despite a performance steeped in history, new investors are put off by media reports of scams and fraudulent activities in the gold space. Occasional frauds cause respectable papers to forget about the importance of balance and write about the‘murky world of private gold trading, a free-wheeling market prized by legitimate investors and criminals alike for its secrecy and lax regulation.’

The truth is that there are many gold investment companies and professionals who have the highest of standards when it comes to privacy and regulation. Companies such as GoldCore work hard to bring legitimacy to this growing and successful market, hence our near 14 year history, very large international client base and online community and hundreds of unbiased and positive reviews from actual clients.

As with any market, there are a ‘few bad apples’ but we would contend that there are less bad apples in the gold sector then there are in say the property sector or the stock market where there are many ‘Wolves of Wall Street’ ready to hungrily gobble up the life savings of unsuspecting “widows and orphans.”

Having said that, it is so important that investors not only do their research on the gold investment provider, but also make sure that the product or service that they choose is the best one for them and protects them in terms of counter party risk, liquidity and performance – and indeed the value and resale potential.

One of the first routes new gold investors go down is looking at collectible ‘gold’ coins some of which are actually gold plated coins masquerading as “pure gold coins”. Whilst these can at first appear to be a good, affordable way for the little guy to own some gold, they don’t always work as well for the investor or gold buyer when compared to safer forms of gold ownership such as gold bullion coins(legal tender) or small gold bars that can be taken delivery of or stored in the safest vaults in the safest way.

Below we take a look at some of the options available to gold buyers and explain why they might not be the gold standard of gold investment.

eBay, to be kept at bay

How to avoid a scam is probably the number one worry of newbie gold investors. It seems that the media love to jump on a gold scam story. Whether it’s one involving Bernie Ecclestone’s son-in-law or the website that transformed the way we shop.

eBay and other sites such as Craigslist put the gold buyer at a huge amount of risk. As ABC News explains
“The terms and conditions that apply to the sale of a gold bar are no more onerous those that apply to somebody who sells a toaster, a football jersey, or anything else on eBay: Small, casual sellers (non-professionals) pay eBay 9 percent of the price for which their bullion sells, when and if it does. There’s no charge for listing.”

Whilst eBay has worked hard to crack down on scam sellers, this is a difficult market to police. Just last year a West Berkshire man was charged with fraud after swindling nearly €3 million out of investors looking to buy rare coins on eBay. In court the fraudster told the jury that he falsely advertised that the coins had been inherited by his family, to create “advertising spin” and make them “more attractive to buyers.”

eBay and other online marketplaces such as Craigslist have also seen a flood of fake coins, from China. Until recently fake Chinese coins were made of real gold but copies of numismatic coins (see below), however the scammers are now focused on volume. Rather than real gold coins with fake minting coming onto the market, buyers are now prey to sellers with lead, zinc tungsten coins dressed up to look like the gold standard of coins.

One might imagine that if you’ve been collecting coins for some time, then fakes are easy to spot. Unfortunately technology is on the side of the scam artist. Not only does tungsten mimic gold closely in terms of density, but lasers are also used to create the fake imagery. This means any laser-crafted, tungsten-filled coins are confusing the market and can make it very difficult to sell.

Reports show that these counterfeit coins have been appearing on sites such as eBay and craigslist. Sellers of the coins may well be based in countries outside of China such as the UK or US, but they are likely to know they are selling fakes. Especially when Chinese manufacturers sell so openly on other marketplaces such as Alibaba. China Tungsten Online’s own website is keen to promote it “gold-plated tungsten coins.”

The problem of fake coins is so great that the US Federal Trade Commission had to create the Collectible Coin Protection Act:

“The law stiffens penalties and makes it illegal to make or import imitation numismatic coins that are not plainly marked as such. Congress approved the bill, and it was signed into law by the White House in 2014.”

In 2015, eBay told CNBC that sellers were buying between $1 to 2 million worth of gold each day, thanks to a fall in the gold price and deals on ‘branded coins’ including the infamous Superman ones from the Royal Canadian Mint.

What buyers were unaware of was that these coins struggle to sell at a higher price, at a later date. This is in marked contrast to actual gold bullion coins which are legal tender and issued by national government mints. These coins are investment grade gold coins of a purity of at least 22 karats or 91.66% and generally being 24 karat or 99.99% pure.

A complete lack of understanding in regard to their value and properties means that new buyers can easily believe they are buying something that will gain far more in value than it realistically will.

The Telegraph reported on the problem of buying coins, including bullion coins, through eBay, writing that not only did prices start at a higher premium to spot price than you might normally find from an experienced and trustworthy bullion dealer but that inexperienced investors were likely to push prices higher. This was especially the case on so called rare coins where buyers carried out little research in regard to the market that supposedly supported the rare coins.

Collectibles…not so profitable

Even if you are able to avoid the Chinese fakes on eBay, does this mean that collectibles are the best way to invest in gold?

Rare and collectible coins are often referred to as numismatics. Instead it means that the minter has minted a coin which they assume will one day be a collector’s item. See the Royal Canadian Mint’s Superman coin, or the UK’s Royal Mint Olympic run-up coins for examples.

The best way to look at collectible coins is that they are an item that commemorate a certain person or event and may or may not happen to include an amount of precious metal. The value is not based on the amount of gold or silver that they contain, but instead on both their rarity and condition. At a later date they may have some value if associated with a particular event. The resale market and valuations is similar to that of art – is the coin in fashion at the time? If not then the seller should expect to sell for a loss.

In the same way a painting’s value is not based on the canvas or the paints that were used but instead on whether the style or the painter is in fashion, a numismatic coin’s value is not based on the precious metal it contains or the work that went into creating it. The value is perceived by the market, and the market size for particular coins can be very small.

This means that it is possible that whilst the price of gold and silver bullion climbs, the value of your numismatic coin may fall in value. This can particularly hurt given that the mark-up on numismatics/collectibles is similar to that on jewellery, and yet regular sovereign bullion coins do not experience these issues – they are highly liquid and trad-able globally when financial markets are open.

Here at GoldCore, we do not sell numismatic coins for this reason. However, we do cater to gold and silver buyers who are keen to have some element of history and collectibility attached to their gold and silver investment. We do offer Classic European and World Gold Coinage in the form of beautiful and very old UK, European and U.S, gold and silver coins upon request. These include the old Victoria Gold Sovereigns from the 19th century (1836 to 1901), French 20 franc (Angels, Roosters and Napoleon) gold coins and U.S. Morgan and Peace dollar gold coins. We also offer $20 Liberties, St. Gaudens, Peace and Morgan Silver in collectible certified form. These rare coins are carefully hand selected by numismatists for their eye appeal and quality. They are certified for grade & authenticity by PCGS (Professional Coin Grading Service) & NGC ( Numismatic Guaranty Corp.) .

The prices of these beautiful coins are only slightly more expensive than modern gold bullion but offer many advantages. These include increasing scarcity and historical significance. Through both their high gold content, their historical significance, their scarcity and collector demand for them, these coins can appreciate by more than actual bullion.

It is worth noting that many of the older bullion sovereign coins can be bought in the secondary market. Despite their age, and perhaps status as an older coin, they still trade at a similar premium to the spot price as newer coins.

When investing in coins, the buyer must ask themselves if they are investing in gold in order to diversify their portfolio and to add some insurance to their savings, or if they are hoping to own a piece of history that may or may not deliver a return.

Some of the most popular bullion coins in the world are Canadian Maple Leafs ,American Eagles, South African Krugerrands , Gold Britannias, Chinese Pandas and Austrian Philharmonics.

With gold bullion coins as those sold by GoldCore, the value is based strictly on the gold content, which means not only is the pricing very straightforward (as it is based on the global gold price) but also that there is a global market which makes it easier to sell with need for little knowledge or research of the marketplace.

In contrast, numismatic and collectible coins’ pricing is subject to many variables that are often changing. This makes for a smaller market, where liquidity is low and it is easy to be deceived if one does not have the adequate knowledge. Not only is education a must but also a strong stomach for when claims of much bigger future worth do not materialise.

When it comes to buying collectible coins the US’ Federal Trade Commission says they have three words for you, ‘research, research, research.’ We would probably add to that phrase – avoid collectible gold coins from private mint companies including gold and silver plated coins and focus on bullion coins and some semi numismatic gold and silver coins – coins which are minted by government mints and whose primary value is derived from bullion.

Tomorrow in Gold Investing 101 (Part II) we will explore the risks inherent in unallocated gold and storing gold with indebted institutions.

http://www.goldcore.com/us/gold-blog/gold-investing- 101-beware-ebay-collectibles-pure-gold-coins-gold- plated/

end

Rangold like Agnico Eagle are very good miners.  Their latest venture was the big Kibali gold mine in the Congo.  The mine was in a difficult area on the western side of the Congo Republic and these guys put the mine into production to perfection.  Now they need new discoveries and they are having difficulty finding one

(courtesy Bloomberg/GATA)

Secret of the Kibali Mine: Flying people in and gold bars out

Section:

By Thomas Wilson
Bloomberg News
Monday, March 6, 2017

Randgold Resources Ltd. had to haul heavy equipment more than 1,000 miles to build the roads and hydropower plants needed to construct its Kibali gold mine, the biggest in Democratic Republic of Congo.

The sprawling facility in a remote corner of a country that is the size of Western Europe is a high-tech operation. In one tunnel deep underground, a $1.3 million, 68-metric-ton remote-controlled digger heaves ore out of a cavernous blast hole. The ventilation system hums as 50-ton loads are slowly humped along the 3-kilometer (2-mile) track back to the surface.

The best-performing gold miner of the past decade, Randgold has built its success on getting complicated projects like Kibali into production on time and within budget. It’s the third major mine the company has brought on stream in five years, and it has indeed been a gold mine: It accounts for about a fifth of the company’s production, which tripled between 2010 and 2015 as revenue doubled to more than $1 billion.

Now, with Kibali nearing full production and no new discoveries since 2011, the miner needs to find guaranteed output growth to impress investors wary of the shrinking pool of large-scale deposits. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-03-06/secret-of-the-kibali-…

 

 

END

Arizona wants to have gold and silver legal tender and exempt from capital gains

(courtesy Ron Paul/)

Ron Paul: Arizona challenges the Fed’s money monopoly

Section:

10:45a ET Monday, July 6, 2017

Dear Friend of GATA and Gold:

Former U.S. Rep. Ron Paul, R-Texas, announced over the weekend that he will be going to Arizona to support state legislation there to define gold, silver, and other monetary metals as legal tender and exempt transactions in them from capital gains taxes. Paul’s announcement comes in his commentary headlined “Arizona Challenges the Fed’s Money Monopoly” and it’s posted at the Ron Paul Institute’s internet site here:

http://ronpaulinstitute.org/archives/featured-articles/2017/march/05/ari…

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

 

END

 

James Turk believes that the raids on silver are losing force

(courtesy James Turk/Kingworldnews)

Bear raids on silver are losing force, Turk tells KWN

Section:

3:13p ET Monday, March 6, 2017

Dear Friend of GATA and Gold:

GoldMoney founder and GATA consultant James Turk today tells King World News that bear raids on silver by the market manipulators are losing force and that increasing inflation will support the monetary metals:

http://kingworldnews.com/james-turk-bear-raids-in-silver-weakening-as-bu…

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

 

END

 

Newmont joins Agnico Eagle searching for gold in Canada’s yukon

(courtesy Reuters/GATA)

Newmont joins gold ‘staking rush’ in Canada’s once-fabled Yukon

Section:

By Nicole Mordant
Reuters
Monday, March 6, 2017

VANCOUVER, British Columbia, Canada — Newmont Mining today became the latest of the world’s biggest gold miners to invest in Canada’s Yukon territory, the site of a famous gold rush 120 years ago, as miners hunt for rich, new deposits in safe regions.

U.S.-based Newmont, the world’s No. 2 gold producer, unveiled an agreement with small explorer Goldstrike Resources to spend $39.5 million to explore and develop Goldstrike’s Plateau property in the Yukon.

With this deal, Newmont follows moves by rivals Goldcorp Inc G.TO and Agnico Eagle Mines last year into the northwestern Canadian territory at a time when gold miners are loosening their purse strings after five years of belt-tightening when bullion prices fell. …

… For the remainder of the report:

http://ca.reuters.com/article/businessNews/idCAKBN16D2

 

END

 

I would not take this to heart;  Russia’s gold reserves could overtake China.  Sovereign China bought all of its gold years ago and it basically “adds” to its official totals each month even though it was bought earlier

(courtesy Lawrie Williams/Sharp’s Pixley)

 

LAWRIE WILLIAMS: Russia’s gold reserves could overtake China’s this year

According to the official announcement from the People’s Bank of China, the country’s gold reserves remained unchanged in February and at the current rate of gold reserve building, Russia could well overtake China as the world’s fifth largest national holder of gold by the third quarter of this year. China seems to have entered a hiatus period of gold reserve building, while Russia has been reporting strong increases in its gold holdings month by month.

According to the IMF and Russia and China’s own statistics, Russian gold reserves are only around 200 tonnes lower than those currently officially reported by China. For the latest month, as reported by its Central Bank, Russia added 31.1 tonnes to its gold reserves in January, bringing them to around 1,645 tonnes as against China’s figure of 1,842.6 tonnes, so if the latest purchase levels are repeated for the next 7 months, then Russian gold reserves could overhaul those of China by the start of the fourth quarter of the year. (See: Russia ups gold reserves by another 31.1 tonnes .)

Of course all this supposes that the reported gold reserve increases as announced by the two nations’ central banks are themselves accurate. At the moment we have no reason to doubt the Russian figures – the reported reserve build-up tallies quite well with known Russian gold output and the proportion of this believed to be taken on by the state. The country is the world’s third largest gold producer, after China and Australia, with annual new mined gold output of around 260 tonnes, and has been vying with the latter for the No. 2 position.

But as for China, although it has been officially reporting monthly gold purchases since July 2015, it does have a track record of holding gold in non-reported accounts and only announcing these as part of its gold reserve at five or six year intervals. It had been assumed that this policy may have fallen away since the country started announcing its monthly gold reserve increase figures – but who knows? According to IMF statistical data China only added 19 tonnes of gold to reserves in the second half of last year (hugely down on the previous 12 months’ monthly additions) – and none at all since the end of October.

According to statements from government officials, analysts and academics, both China and Russia see gold as an important element in the global financial system. China has reportedly called for gold to be included in the basket of currencies which makes up the IMF’s Special Drawing Rights (SDR) – some will argue that gold, in effect, should be treated as a currency, others will disagree! Certainly Russia’s President Putin is a gold believer. The Chinese hierarchy is perhaps a little more circumspect in its open support for gold, but both nations are keen to see the US dollar dominance of world trade – particularly with respect to oil and gas – depleted and see gold as one of the tools for helping them achieve this objective.


https://www.sharpspixley.com/articles/lawrie-williams- russias-gold-reserves-could-overtake-chinas-this- year_264838.html

-END-

 

Copper at one month lows signaling a slowing growth in China.  Yesterday saw the biggest inventory build in 15 years and thus down went Dr Copper

(courtesy zero hedge)

Copper Tumbles To One-Month Lows, Breaks Key Technical Level

When Dr.Copper is soaring to two-year highs it is “unequivocal” proof the world’s economy is back on track. However, as the industrial metal drops to one-month lows amid the biggest inventory build in 15 years, slowing China growth, and plans to raise China capacity – analysts are quiet at the economic PhD metal’s demise.

Yesterday saw the biggest inflow of the metal in 15 years to warehouses managed by the London Metal Exchange, according to bourse data released Monday.

 

And while China lowered its growth expectations, China’s second-largest copper refiner has decided to ramp up production (as Bloomberg reports)

Prices will end the year lower than where they started,Jiangxi Copper Co. Chairman Li Baomin said Sunday in an interview in Beijing as the government announced growth plans for 2017.

 

Jiangxi Copper plans to increase production to the maximum capacity of 1.36 million metric tons, compared with about 1.2 million tons last year, he said.

And copper prices have tumbled to one-month lows…

 

Breaking below the crucial 50-day moving average…

 

Jiangxi’s Li sums up the situation perfectly: “There are things worrying us.”

 

 

end

 

Bix Weir describes the reason why the Thomson Reuters and the CME are backing out of the silver fix: because it will be illegal by Jan 1 2018

the story certainly has merit:

(courtesy Bix Weir)

 

Bix Weir analyzes the latest announcement from the LBMA and exposes the Deadline for the Silver Rigging Mechanism! This is a huge story that is being swept under the rug so people don’t run out and buy physical silver by the Truck Load!
 
Silver Rigging: “Cease and Desist” by January 1, 2018 (Bix Weir)
May the Road you choose be the Right Road.
Bix Weir
end

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 MUCH WEAKER AT  6.90001( DEVALUATION SOUTHBOUND   /OFFSHORE YUAN NARROWS   TO 6.8970/ Shanghai bourse UP 8.54 POINTS OR .26%   / HANG SANG CLOSED UP 84.79 POINTS OR 0.36% 

2. Nikkei closed DOWN 34.99 POINTS OR 0.18%   /USA: YEN FALLS TO 113.91

3. Europe stocks opened MOSTLY IN THE RED      ( /USA dollar index RISES TO  101.78/Euro DOWN to 1.0571

3b Japan 10 year bond yield: RISES TO    +.076%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 113.91/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  53.38  and Brent: 56.20

3f Gold DOWN/Yen UP

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

Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.

3h Oil UP for WTI and U[ for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.312%/Italian 10 yr bond yield DOWN  to 2.158%    

3j Greek 10 year bond yield RISES to  : 7.15%   

3k Gold at $1222.75/silver $17.69(8:15 am est)   SILVER MOVES CLOSER TO RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 5/100 in  roubles/dollar) 58.11-

3m oil into the 53 dollar handle for WTI and 56 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 113.91 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0145 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0726 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  +.312%

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

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

4. USA 10 year treasury bond at 2.498% early this morning. Thirty year rate  at 3.098% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

HELICOPTER MONEY STILL ON THE TABLE FOR THE FUTURE

Futures Decline, Europe Slumps After German Industrial Orders Collapse

After a turbulent overnight session on Monday morning, this morning traders settle at their desks to find a relatively calmer environment, with US equity futures down 0.2% to 2,371.75, while European stocks fell for a third consecutive day, and Asian markets which closed mixed (China up, Nikkei down, MXAP up 0.2%). Basic metals continue to slide following another drop in copper as a result of the biggest inventory inflow to LME warehouses in 15 years, coupled with worries about China’s telegraphed slowdown.Some have also pointed out that the market topped just in time for the SNAP IPO, which after crashing yesterday to below its IPO break price of $24, continued to sink in the pre-market this morning.

In addition to hopes about an imminent Fed rate hike shifting to concerns, as reported yesterday JPMorgan warned that hawkish Fed rhetoric has increased the likelihood for a short-term pullback after stocks hit the bank’s year-end target of 2,400 the previous week. The dollar rose modestly as a surge in corporate bond issuance pushed up Treasury yields.

Markets appear to have topped off the relentless post-election surge, and are coming off recent peaks as investors start to contemplate what the upcoming March interest rate increase will mean for risk assets. They also have to contend with overnight headlines out of China where the “Two Sessions” are taking place, and where Premier Li Keqiang warned of larger challenges ahead during his work report to the annual National People’s Congress gathering in Beijing. In Europe, politics has become the main market driver as election campaigns in the Netherlands, France and Germany put the status quo under threat.

“The ‘pothole’ is a political one with far-right parties gaining ground in opinion polls ahead of both a Dutch and French ballots in spring,” Luca Paolini, chief strategist at Geneva-based Pictet, said in a research note. “We are scaling back exposure to European stocks, albeit retaining our overweight stance.”

Germany’s largest lender continued to grab attention and European stocks fell for a third consecutive day on Tuesday, once again dragged down by financials as Deutsche Bank shares slid again on deepening concern about its health after its $8.5 billion cash call. Deutsche shares dropped as much as 3% to a fresh 2017 low. They have lost more than 10% in the last few days since the bank said it would tap investors for $8.5 billion.

Furthermore, a batch of weak corporate earnings reports and the biggest fall in German industrial orders since the depths of the global financial crisis also disappointed investors, setting the tone for a lackluster session in Europe.  German industrial orders slumped 7.4 percent in January, the biggest fall since January 2009 and nearly three times as steep as the 2.5 percent fall expected by economists.

“Weak German industrial orders suggests it’s not a one-way ticket in Europe – there’s been a lot of bullishness around European equities lately but maybe this is a sign it’s not all positive. Deutsche Bank is not helping either,” Neil Wilson, senior market analyst at ETX Capital, told Reuters.

Across the Atlantic, S&P500 futures pointed to a slightly lower open on Wall Street, further cooling off last week’s record highs. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4%, and Japan’s Nikkei closed down 0.2%.

In currencies, the dollar inched higher against a basket of trade-weighted peers. The dollar index rose 0.1 percent to 101.73 mirroring Monday’s slender gain. The Bloomberg Dollar Spot Index added 0.2 percent, headed for its sixth advance in seven days. A rate hike from the Federal Reserve next week is virtually fully priced into financial markets, so the dollar and U.S. bond yields might be vulnerable to a correction lower. But investors saw enough room to push the greenback and yields higher on Tuesday, lifting the 10-year yield for the fifth day in a row back above 2.50 percent and the two-year yield up a basis point to 1.32 percent, on what traders attributed to interest rate locks following another massive corporate issuance session.

The Aussie Dollar has rallied after the RBA left rates on hold, as widely expected. The post meeting statement pointed to a firmly on hold RBA and few expect a change in the cash rate through 2017 or 2018. The pound was the biggest mover on major FX markets, falling nearly a third of one percent against the dollar to a seven-week low of $1.2202. Britain’s House of Lords will on Tuesday try to force the government to give lawmakers a greater say over the terms of Britain’s exit from the European Union and final approval of an eventual deal with the block.

Analysts at Morgan Stanley said on Tuesday they expect the pound to snap back as high as $1.45 by the end of next year. “Sterling looks increasingly cheap in a historical context and our FX strategists (have) recently turned more bullish on the currency, targeting $1.28 for year end and $1.45 by the end of 2018,” they wrote in a note on Tuesday.

The euro was steady at $1.0575 and the dollar was flat against the yen at 113.90 yen. In commodities, U.S. oil CLc1 rose 0.3 percent to $53.55 a barrel, following Monday’s 0.2 percent drop, and Brent crude also rose 0.3 percent to $56.17 LCOc1.

Market Snapshot

  • S&P 500 futures down 0.2% to 2,371.75
  • STOXX Europe 600 down 0.03% to 373.16
  • German 10Y yield fell 2.2 bps to 0.32%
  • Euro down 0.06% to 1.0576 per US$
  • Brent Futures up 0.3% to $56.16/bbl
  • Italian 10Y yield rose 6.5 bps to 2.165%
  • Spanish 10Y yield fell 2.6 bps to 1.702%
  • MXAP up 0.2% to 144.63
  • MXAPJ up 0.5% to 465.42
  • Nikkei down 0.2% to 19,344.15
  • Topix up 0.01% to 1,555.04
  • Hang Seng Index up 0.4% to 23,681.07
  • Shanghai Composite up 0.3% to 3,242.41
  • Sensex down 0.2% to 28,997.87
  • Australia S&P/ASX 200 up 0.3% to 5,761.39
  • Kospi up 0.6% to 2,094.05
  • Brent Futures up 0.3% to $56.16/bbl
  • Gold spot down 0.09% to $1,224.14
  • U.S. Dollar Index up 0.09% to 101.73

Top Overnight News

  • Hellman & Friedman, GIC Buy Allfunds Bank for $1.9 Billion
  • CSX Names Harrison CEO, Warns He’ll Exit Unless Paid $84 Million
  • Fitbit Chief Business Officer to Leave, Samir Kapoor Promoted
  • Copper’s Biggest Storage Rush in 15 Years Jeopardizes Rally
  • Ford Not Planning Job Cuts as it Pares Europe Costs After Brexit
  • Republicans Unveil Health Care Bill to Bridge Gaps in Party
  • WhatsApp Joins Arsenal of Online Luxury Amid Race for Customers
  • German Factory Orders Slump Most Since 2009 on Investment
  • Turkey Imposes Anti-Dumping Levy on Kraftliner Paper From U.S.
  • Dakota Access Pipeline Could See Oil by Week of March 13

Asian equity markets largely shrugged off the broad negative lead from Wall Stret to trade mixed as cautiousness remained ahead of the looming risk events. ASX 200 (+0.3%) recovered from early losses amid strength in healthcare and utilities, although upside was capped as participants awaited the RBA which kept rates unchanged and maintained a neutral tone, while Nikkei 225 (-0.2%) languished after USD/JPY failed to gain a footing above 114.00. Shanghai Comp. (+0.3%) was choppy as mainland sentiment was dampened following another weak PBoC liquidity injection and reports China is looking to slow borrowing using short term money markets, while the Hang Seng (+0.3%) was resilient after several encouraging operating updates. Finally, 10yr JGBs saw mild gains amid a lack of risk appetite in Japan, although upside has been limited following a mixed 30yr JGB auction in which accepted prices were higher and demand fell from prior.

Top Asian News

  • China to Avoid Coal Mining Limits If Prices Remain ‘Reasonable’
  • Japanese Double Bearish Yen Bets as Wall Street Cuts and Runs
  • PAG to Replace Yingde Chairman, CEO If Takeover Is Completed
  • Duterte Backs Environment Chief as Congress Weighs Endorsement
  • Lupin CFO Says $1 Billion M&A War Chest Could Be Just The Start
  • Traders Shun Hedges Before India Vote on Confidence in Modi Win

In European bourses, materials stocks are among the best performers amid a relatively flat session . Midcaps grabbed the attention given the number of earnings in an otherwise quiet session for large caps, with UK listed Intertek are at the top of the FTSE100 leader board after the company’s revenue and dividends both rose. Elsewhere, Paddy Power underperform after an uninspiring earnings update and this comes despite increased revenue past the GBP 1.5bIn mark during a “transformational” year. In Fixed Income markets, the German 2/10Y spread is nearly back to 119bps again after German factory orders fell short of expectation and many analysts are paying credence to the PSPP which has lifted the Shatz after strong buying yesterday.

  • RAI Way Said to Consider Takeover of Berlusconi’s EI Towers
  • U.K. House Price Growth Adds Weight to Predictions of a Slowdown
  • Deutsche Bank Bets on Ex-Goldman Partner in Strategy Revamp
  • EDF Begins $4.2 Billion Share Sale to Bolster Balance Sheet
  • Million Migrants Fleeing Putin Score a Jackpot for Poland
  • Norway Regional Survey Outlook Jumps to Highest in 4 Years
  • Niel’s Iliad Boosts Profit After Luring Users With Discounts

In currencies, despite the range bound USD, there has been some movement in major pairs to keep traders busy ahead of the US payrolls on Friday, as well as (what could be) a lively ECB meeting on Thursday, Both USD/JPY and EUR/USD are still trading inside relatively tight ranges, but with UST yields firm, the former is retesting 114.00 again. For EUR/USD, there is little to get excited about until we retest 1.0500 lower down. German factory orders fell 7.4% compared to a more modest forecast of -2.5%, and this may have assisted the move back towards 1.0550. The Bloomberg Dollar Spot Index added 0.2 percent, headed for its sixth advance in seven days. The euro weakened 0.4 percent to $1.0585, the worst performer among major. The yen was at 113.895 per dollar. Some support is coming through EUR/GBP buying as we continue to probe into offers ahead of 0.8700. Pressure on GBP has been exacerbated by yet another potential hurdle for PM May’s proposed Brexit timetable, as the House of Lords are set to seek a more meaningful vote on the terms of exit. This delay would have been GBP supportive a few months ago, but with the government seemingly undermined, the uncertainty factor has pushed the cross rate higher and Cable below 1.2200 accordingly. 1.2150 the next level of support to note here.

In commodities the big story at present is the recent highs seen in base metals, where the growing stockpiles in China have been garnering greater attention. Copper prices have continued their move below USD2.70 to trade below USD2.65 today, with losses in Zinc and Nickel also impacted given supply issues in all cases (strikes/mine closures). Precious metals are also lower today as they follow in tight correlation to Treasuries. The USD has been a little more reluctant to follow, but enough to pull Gold back towards USD1220 again while Silver is still pressuring the recent lows around USD17.70.  Gold futures slumped 0.1 percent to settle at $1,225.50 an ounce in New York for a fifth day of losses. That’s the longest slump since November. Oil prices still in a range, with compliance and production/inventory levels ahead feeding near term support, but CERA week could prompt some volatility: speakers include Barkindo, Novak and Al-Falih. West Texas Intermediate crude slipped 0.2 percent to settle at $53.20 a barrel. Clashes between armed factions in Libya curbed crude output, while U.S. drilling increased.

Looking at the day ahead, we will get the January trade balance and then the January consumer credit reading in the evening. Away from the data, German Finance Minister Schaeuble is scheduled to speak this morning, while in the UK we are also expecting the House of Lords to complete its scrutiny of the Brexit bill.

* * *

US Event Calendar

  • 8:30am: Trade Balance, est. $48.5b deficit, prior $44.3b deficit
  • 3pm: Consumer Credit, est. $17.3b, prior $14.2b

DB’s Jim Reid concludes the overnight wrap

In terms of markets, yesterday felt like a day you rolled the dice and landed on someone’s property and had to pay a small unwelcome amount of rent after a good run of accumulating cash in the bank. Equities closed on the soft side led by Europe with financials and commodity names in particular having a rough start to the week. Coming off the back of a +1.41% gain last week which was the strongest week this year, the Stoxx 600 closed -0.52% and European banks finished -1.23%. Markets in the US were back peddling from the start although the S&P 500 (-0.33%) did manage to pare back heavier losses into the close. The Dow (-0.24%) did likewise but still closed back below the 21,000 level for the first time since passing it last week. There were similar losses across credit markets with CDX IG about 0.8bps wider and the iTraxx Main 1.5bps wider. Sub-financials in Europe did however outperform on a relative basis, with the iTraxx Sub-Fins index finishing just 0.5bps wider (compared to +1.5bps for iTraxx  Senior-Fins). It was a similar outperformance story in the cash credit market with EUR Fin Subs actually 1bp tighter (using Markit indices), compared to EUR Fin Sen which was just 0.5bps tighter.

On those moves for commodities, while Oil ended up little changed both precious and base metals struggled throughout the day. Gold (-0.77%), Silver (-1.07%), Iron Ore (-1.74%), Copper (-1.00%) and Aluminium (-0.82%) in particular all finished lower. A few potential reasons were discussed but it appears that a combination of the China NPC headlines from the weekend, rising Copper inventories and a stronger US Dollar in the face of geopolitical related headlines all contributed to some degree. The latter concerned the reports of North Korea firing missiles into the Sea of Japan – although in fairness there didn’t appear to be a huge reaction in EM FX or equity markets – while later on in the day we got confirmation that President Trump has signed a new travel order banning the entry of citizens from 6 countries (1 less than the initial January order) into the US for the next 90 days from March 16th. The new order will also see the US Refugee Admissions Program suspended for 120 days.

Elsewhere, all things considered Treasuries had a relatively calm day compared to the Fed-driven excitement of last week. 10y Treasury yields finished +2.2bps higher at 2.500% with the slight weakness reflecting a busy day for corporate issuance with over $22bn of IG sales coming, while short end yields ended little changed. A Fed rate hike next week also consolidated around 96% according to Bloomberg’s calculator. Meanwhile bond markets in Europe were busy digesting the latest French presidential election update. Indeed as hinted by the L’Obs press report over the weekend Juppe left the French elections for a second time as he ruled out a comeback in spite of the fragile nature of Fillon’s campaign. His speech didn’t endorse Fillon’s campaign and the Republicans have to choose soon whether to stick with a candidate who is losing support due to the recent allegations or to consider alternatives who weren’t part of the original run-off or who were earlier beaten. Bloomberg reports they have 10 days to file paperwork if they want to replace Fillon. French 10y yields climbed +2.3bps yesterday versus a -1.5bps fall in the German equivalent. The spread tightened 15.6bps last week and this gave up around a quarter of these gains.

Refreshing our screens this morning now. It’s been a fairly mixed but quiet start in Asia. While the Nikkei (-0.20%) and Shanghai Comp (-0.07%) are posting modest losses, the Hang Seng (+0.42%), Kospi (+0.64%) and ASX (+0.27%) are all firmer. In FX the Aussie Dollar has rallied +0.64% after the RBA left rates on hold, as widely expected. Our economists in Australia believe that the post meeting statement point to a firmly on hold RBA and expect no change in the cash rate through 2017 or 2018.

Moving on. The latest ECB CSPP data came out yesterday. The average daily run rate in the week to March 3rd was €339mn, a bit below the average of €365mn since the scheme started. In February 8.8% was bought in the primary market, lower than the 13.5% ratio since the scheme commenced and the lowest ratio since the summer. It’s too early to say whether the ECB are starting to prepare for taper but there seems to have been a reduction recently from peak purchases. We can’t extrapolate too much as there are many who think they’ll initially taper more on the government side rather than the corporate side. Anyway one to keep an eye on over the weeks ahead.

With regards to the rest of the data yesterday, in the US factory orders in January printed at +1.2% mom which was marginally ahead of consensus expectations for a +1.0% rise in orders. The final revisions to January durable and capital goods orders were also released. Headline durable goods orders were confirmed at +2.0% mom which was up two-tenths from the initial estimate while core capex orders were revised up three-tenths to -0.1% mom. Interestingly the two most followed GDP trackers have diverged significantly for Q1 GDP estimates.

The Atlanta Fed is now at 1.8% while the NY Fed is at 3.1%. It’s worth noting that over the past 4 quarters the NY Fed has tended to be the more accurate of the two although both have shown a tendency to have large errors during various quarters. Elsewhere and wrapping up, yesterday in Europe the most notable release was the Sentix investor sentiment reading for the Euro area which showed the index as rising 3.3pts in February to 20.7 and in the process reaching a new post financial crisis high. So a sign perhaps that improving data is overshadowing any potential political concerns for now.

Looking at the day ahead, this morning in Europe the early data comes from Germany where the January factory orders data is due. Shortly after that we’ll get the February Halifax house prices data in the UK before we then get the final Q4 GDP print for the Euro area. No change from the initial +0.4% qoq estimate is expected. This afternoon in the US we will get the January trade balance and then the January consumer credit reading in the evening. Away from the data, German Finance Minister Schaeuble is scheduled to speak this morning, while in the UK we are also expecting the House of Lords to complete its scrutiny of the Brexit bill.

 

END

3. ASIAN AFFAIRS

i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 8.54 POINTS OR .26%/ /Hang Sang CLOSED UP 84.79 POINTS OR 0.36% . The Nikkei closed DOWN  34.99 POINTS OR 0.18% /Australia’s all ordinaires  CLOSED UP 0.23%/Chinese yuan (ONSHORE) closed DOWN at 6.9001/Oil ROSE to 53.38 dollars per barrel for WTI and 56.20 for Brent. Stocks in Europe ALL MIXED ..Offshore yuan trades  6.8970 yuan to the dollar vs 6.9001  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS CONSIDERABLY/ ONSHORE YUAN WEAKER BUT THE OFFSHORE YUAN STRONGER COUPLED WITH THE STRONGER DOLLAR. CHINA SENDS A MESSAGE TO THE USA NOT TO RAISE RATES

3a)THAILAND/SOUTH KOREA/NORTH KOREA

A North Korean diplomat echoes are fears as we are dealing with a madman inside North Korea

(courtesy zero hedge)

North Korea Diplomat Warns Of “Major Escalation That Might Turn Into Actual War”

Yesterday’s snap deployment of the US THAAD anti-missile system in South Korea has led to significant reverberations among the region, with not only North Korea, but also Russia and China slamming the move.

As reported last night, various equipment including 2 launch pads for U.S. missile defense system known as THAAD arrived in South Korea on Monday and will continue to be brought in, Yonhap News said.”Continued provocative actions by North Korea, to include yesterday’s launch of multiple missiles, only confirm the prudence of our alliance decision last year to deploy THAAD to South Korea,” Adm. Harry Harris, commander, US Pacific Command, said in a news release.

US Secretary of Defense James Mattis and South Korean Defense Secretary Han Min-koo spoke over the phone last week and agreed that THAAD should be deployed “ASAP.”

View image on TwitterView image on TwitterView image on Twitter

U.S. military releases first pictures of THAAD anti-missile system being deployed to South Korea overnight.

White House Press Secretary Sean Spicer signaled the deployment Monday when he told reporters that the United States is “taking steps to enhance our ability to defend against North Korea’s ballistic missiles, such as through the deployment of a THAAD battery to South Korea.” U.S. defense officials confirmed to NBC News on Monday night that that meant delivery was already under way — not that the United States was simply restating its previous promises to send the system to South Korea sometime in the future.

Both China and Russia lodged protests against the deployment: “We think the US-South Korean decision to deploy the THAAD missile defense system has seriously threatened China’s security interest. For the region, it will also break the strategic balance. So it’s completely understandable to see countries in the region firmly oppose this decision,” Chinese Foreign Ministry spokesman Lu Kang said. “China and other countries have to address our own legitimate security concerns and take necessary measures to safeguard our security interest.”

“Deployment of US missile defense systems in South Korea clearly goes beyond the tasks of deterring ‘the North Korean threat,'” Russian Deputy Defense Minister Anatoly Antonov said in October, according to Russian state-run Tass news agency.

However, it was North Korea which as expected, was the most vocal, and tried to shift blame away from its recent launch of 4 ballistic missiles and redirect attention to the joint US-South Korean drills taking place. As Reuters reports, North Korea faced a chorus of condemnation on Tuesday for its latest ballistic missile tests but declared that ongoing joint U.S.-South Korea military exercises were aimed at conducting a “pre-emptive nuclear attack” against Pyongyang.

Ju Yong Choi, a North Korean diplomat, told the U.N.-sponsored Conference on Disarmament in Geneva that the “massive, unprecedented” joint drills were “a major cause of escalation of tension that might turn into actual war”. 

Robert Wood, U.S. Disarmament Ambassador, retorted that North Korea was a “a pariah, an outlier” that has violated multiple U.N. Security Council resolutions and international law by conducting ballistic missile and nuclear tests.

With the US now ready to fire anti-missile weapons on a moment’s notice out of North Korea, many are concerned that the next launch by North Korea’s irrational ruler may promptly escalate the region to a state of conventional war.

 

end

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

Don’t take these figures to heart.  Supposedly Chinese foreign reserves rise above 3 trillion USA but we need to see the the POBC’s foreign exchange positions (revealed in the middle of March) to get a clear picture of Chinese reserves.  I would expect when that is released it will be south of 3 trillion

(courtesy zero hedge)

China FX Reserves “Unexpectedly” Rebound Above $3 Trillion, First Increase Since June

With China’s “Two Sessions” currently taking place, and Beijing hard-pressed to report positive economic data (including banning the sale of stocks by some mutual funds according to Bloomberg), it was perhaps not surprising that overnight China reported that its foreign-currency reserves “unexpectedly” rose in February for the first time since June 2016, halting a seven-month decline, rebounding over the psychological $3 trillion level controls on capital outflows and a rally in the yuan. China’s foreign reserve holdings increased by $6.9 billion to $3.005 trillion last month the PBOC reported, exceeding the consensus estimate for a $30 billion decline to $2.969 trillion. According to Goldman calculations, after adjusting for currency valuation effects, reserves rose by about $19 billion.

Among the factors cited for the rebound in the world’s biggest FX reserve holdings are stronger economic growth, stricter capital controls and a stabilizing yuan. China’s reserves have shrunk by $1 trillion from a peak of $4 trillion in 2014 as Beijing has struggled to slow yuan depreciation. Following the positive data, the offshore yuan extended gains to rise as much as 0.17%, although it has since given up all gains and was little changed at 6.8975. With pressure on reserves easing in recent months, the onshore yuan has advanced 0.7% this year amid a decline in the Bloomberg Dollar Spot Index.

“The rebound is a surprise as there should have been a negative valuation effective given that the dollar gained in February,” said Zhou Hao, an economist at Commerzbank AG in Singapore. “The increase shows the PBOC probably hasn’t been doing much spot market intervention last month, given market sentiment was stable and onshore yuan trade volume has been lower than usual.”

“Strict capital controls have taken effect, as it has reduced outflows and helped market sentiment on the yuan,” Nomura’s Zhao Yang told Bloomberg. “Reserves still face pressures, as the nation won’t want to keep tight capital controls in place for the medium term as they create difficulties for firms and thus weigh on the economy.”

In recent months Chinese authorities have boosted efforts to prevent outflows since late 2016, as the yuan headed for the biggest annual loss in more than two decades. Measures include ordering banks to stop processing cross-border yuan payments until they balance inflows and outflows, and even cracking down on bitcoin. Additionally, China’s residents face tougher reporting requirements when they want to convert yuan into foreign currency.

“The fact that they showed the world that the reserves are stabilizing at a fairly high number is an important signal,” said Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis SA in Hong Kong. “The realization that the leadership wants us to have is that China is out of the woods, it’s not losing reserves, and we’re back to normal.”

In a statement posted by China’s FX regulator, the State Administration of Foreign Exchange, it said that outflow pressures are expected to ease and reserves may gradually stabilize, however it added that global financial market uncertainties remain.

Meanwhile, in a note from Goldman, the bank warned that estimates of overall valuation effects can be noisy, pointing out that SAFE indicated that the market value of the reserve portfolio increased in Feb, which counteracted the negative currency valuation effect. That said, it is unclear exactly how large these effects were in Feb (and it has not always been obvious how the portfolio valuation effects are recorded). Therefore, as Goldman has traditionally cautioned, another dataset, the “PBOC’s FX position” (usually released in the middle of the month), will give us a much better sense of the PBOC’s FX sales net of valuation effects, as this dataset shows the PBOC’s FX assets recorded at book value. On several occasions in the past year this dataset has suggested a meaningfully different amount of FX sales by the PBOC than implied by the reserve data.

For reference, in January the PBOC’s FX position dataset showed a decline of US$30bn, even after a strong trade surplus of US$33bn (including merchandise and service trade). The trade surplus was likely not nearly as strong in Feb due to Chinese new year seasonality—in other words, the capital account dynamics would have needed to undergo a significant reversal for the PBOC to accumulate (rather than de-accumulate) FX assets in Feb.

In general, reserve data provide only partial information on the FX flow situation, and readers should await further SAFE and PBOC data to assess the underlying trend. In terms of the macro backdrop, the relatively subdued USD, which helped to stabilize USD/CNY even as the CNY continued to weaken moderately against the CFETS basket (by 0.4% in Feb, and cumulatively by 1% since end-‘16), has likely supported CNY sentiment. The various capital flow management measures introduced in the last few months have likely also helped slow outflows.

Looking farther ahead, recent policy signals and news suggest that the process of getting domestic bonds included in global bond indices has gathered pace. The amount of bond inflows following the SDR inclusion decision and more liberalized access to the domestic market by central bank-type investors has been fairly modest (about US$30bn over the past year) and may be less than hoped for. This has likely made the authorities keener to attract more bond inflows from private investors through the inclusion in the major global bond indices, which could potentially bring in significant foreign investment. This may not materialize any time soon and the precise timing is hard to predict, but continued news on this front bears close watching in the coming months.

end

4. EUROPEAN AFFAIRS

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6.GLOBAL ISSUES

UKRAINE

 

Free trade did not help Ukraine one bit.  Basically they imported more goods and exported less and thus their trade balance worsened terribly

(courtesy GEFIRA)

Ukraine Has Lost Billions On The Trade Agreement With The EU In Year One

Via GEFIRA,

The Deep and Comprehensive Free Trade Agreement (DCFTA) between Ukraine and the European Union, which came into force on 1 January 2016, was aimed at helping the East European economy to recover; however, the results after the first year fell far short of Ukraine’s expectations. The former Soviet Republic lost €2.2 billion more than it lost in 2015 on trade with the EU. While imports from the EU have surged, exports have barely grown.

As Polish media reports, the European Union has flooded Ukraine with goods, which is contrary to the aim of the free trade agreement: the document assumed the asymmetric openness of the markets in Ukraine’s favour. 

According to the Eurostat data, EU’s exports to Ukraine grew in 2016 by 17.6%, from €14bn to €16.5bn, whereas Ukraine’s exports to the EU increased by 1.9%, i.e. from €12.8bn to €13bn. As a result, Ukraine’s trade deficit with the EU has surged from €1.2bn to €3.43bn!

It seems that the Ukrainian economy was absolutely unprepared, especially in times of war in Donbass, to compete with Western enterprises. The GEFIRA team explains the problem of the destruction of Ukraine’s economy in the latest GEFIRA Bulletin. It is going to take years until Ukrainian businesses, particularly small- and medium-sized, are prepared to switch from Russian to Western orientation and it is going to be very costly if not lethal to Ukrainians.

On the other hand, Moldova was able to use the free trade agreement properly and has decreased its trade deficit with the EU by a half, even though, pro-Russian political forces continue to gain ground in the country.

end

7. OIL ISSUES

Now it is Fitch’s turn to state that oil prices will come down due to the huge increase in USA shale output:

(courtesy Calcuttawala/OilPrice.c0m)

Fitch Predicts Drop In Oil Prices By 2017 As U.S. Shale Output Soars

Via Zainab Calcuttawala of OilPrice.com,

Oil bigwigs should take a step back before becoming too comfortable with the new oil price range according to Fitch Ratings’ newest market analysis.

“The recovery in US drilling activity will drive up shale oil production in the second half of 2017, offsetting a portion of recent oil price gains,” the credit rating agency’s report released on Monday says. “We therefore expect average oil prices for the year to be below those in January and February.”

In a stable market scenario, Fitch estimates that by the end of this year, oil prices will fall to $52.50, but then rebound to $55 and then $60 in 2018 and 2019, respectively. Long-term prospects for Brent barrels sit at $65 in this model.

A stressed, oversupplied market will mean a $40 barrel through 2019, however.

Since January, a 1.8 million-barrel global production cut led by the Organization of Petroleum Exporting Countries (OPEC) and joined by several other nations has kept prices between the $55-$60 range.

Compliance to the terms of the November deal by members of the bloc has been strong. Last week, new data showed that OPEC’s compliance stood at 94 percent.

But non-OPEC enthusiasm for the deal has been much talk, with moderate action. A February 23rd report puts compliance by the 11 NOPEC nations at a modest 60-66 percent.

Fitch cited the continuous increase of active oil rigs in the United States since May 2016 as key evidence for an impending price collapse. American production is set to top nine million barrels over the course of 2017, the analysts estimate, due to rejuvenated capital expenditure budgets and higher output capacity.

The total number of active oil and gas rigs in the United States is now 756, according to oilfield services provider Baker Hughes, which is 267 rigs above the rig count a year ago.

8. EMERGING MARKETS

 

none today

 

EXTRA

Hyperinflation explained in a Federal Prison:

(courtesy zero hedge)

 

Prisoners Explain Why A Pack Of Mackerel Is The Gold Standard Of Currencies In America’s Prisons

In 2004, the U.S. banned cigarettes in all federal prisons and it was pretty much the best thing that could have happened to the packaged mackerel industry (yes, you read that correctly…the packaged fish).

So how did a smelly package of fish become the gold standard of America’s federal prisons?  Well, for a variety of reasons (we’ll let your imagination run wild) prisoners are not allowed to possess actual currency.  Up until 2004, they used cigarettes as their currency of choice to purchase anything from illicit goods such as stolen food and home-brewed “prison hooch,” as well as services, such as shoeshines and cell cleanings.  But once cigarettes were banned, prisoners needed a replacement currency and the ‘mack’ was deemed to be the best choice because it was worth roughly $1 at the commissary and pretty much no one wanted to eat it.

As one prisoner notes in the Wall & Broadcast video below, the ‘mack’ was also “inherently inflationary” because its supply was limited to 14 macks per week per inmate….

“Mackerel had utility because it was inherently inflationary.  A certain amount of macks came into circulation every day.  Every inmate can only buy 14 mackerels per week.  14 times 500 inmates time 52 weeks is the amount of mackerels that are coming into circulation every year and that’s why it was a pretty good stable value of currency.”

“The reasons mackerel had value is because inmates believed it had value.  Perfect example of that was mackerels expire after three years. But, people didn’t jut throw them away, these became known as “money macks” and retained 75% of the value of “eating macks” because people believed that they still had value and they were still being used in transactions.”

…that is at least until prison guards confiscated a massive supply of macks from one prisoner and essentially flooded the market creating a hyper-inflationary environment.

“I’ll never forget the day where the macks lost all their value almost overnight.  Someone had a huge amount of money macks and they got confiscated and the administration left them sitting in a bucket.  They essentially introduced hyperinflation.  They flooded the market with money macks.”

Perhaps Yellen & Co. could learn a thing or two from this lesson in prison economics.

 

 

end

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

Euro/USA   1.0571 DOWN .0007/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP WINS THE ELECTION/USA READY TO GO ON A SPENDING BINGE WITH THE TRUMP VICTORY/ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/USA RAISING INTEREST RATE/EUROPE BOURSES ALL IN THE RED EXCEPT SPAIN  

USA/JAPAN YEN 113.91 DOWN 0.005(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2191 DOWN .0046 (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/AND NOW A NEW SCOTLAND REFERENDUM IS ON THE TABLE)

USA/CAN 1.3410 UP .0011 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU)

Early THIS TUESDAY morning in Europe, the Euro FELL by 7 basis points, trading now WELL BELOW the important 1.08 level FALLNG to 1.0571; 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 8.54 POINTS OR 0.26%     / Hang Sang  CLOSED UP 84.79 POINTS OR 0.36%    /AUSTRALIA  CLOSED UP 0.23%  / EUROPEAN BOURSES MOSTLY IN THE RED

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 DOWN 34.99 POINTS OR 0.18% 

Trading from Europe and Asia:
1. Europe stocks  MOSTLY IN THE RED

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 84.79 POINTS OR 0.36%       / SHANGHAI CLOSED UP 8.54  OR 0 .26%/Australia BOURSE CLOSED UP 0.23/Nikkei (Japan)CLOSED DOWN 34.99 POINTS OR 0.18%  /  INDIA’S SENSEX IN THE RED

Gold very early morning trading: $1223.90

silver:$17.71

Early TUESDAY morning USA 10 year bond yield: 2.498% !!! DOWN 1/2 IN POINTS from MONDAY 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  3.098, DOWN 1/2 IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 101.78 UP 8 CENT(S) from THURSDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 3.973% UP 1  in basis point yield from MONDAY 

JAPANESE BOND YIELD: +.076%  UP 2/5  in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.738%  UP 1 IN basis point yield from  MONDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.195 UP 3 POINTS  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 47 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.319% DOWN 3 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.0582 UP .0003 (Euro UP 3 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 113.92 UP: 0.016(Yen UP 2 basis points/ 

Great Britain/USA 1.2207 DOWN 0.0032( POUND DOWN 32 basis points)

USA/Canada 1.3416 UP 0.0017(Canadian dollar DOWN 17 basis points AS OIL ROSE TO $53.33

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This afternoon, the Euro was UP by 3 basis points to trade at 1.0582

The Yen FELL to 113.92 for a LOSS of 2 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL 32  basis points, trading at 1.2207/

The Canadian dollar FELL  by 48 basis points to 1.3416,  WITH WTI OIL RISING TO :  $53.33

The USA/Yuan closed at 6.8999/
the 10 yr Japanese bond yield closed at +.076% UP 2/5 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield PAR IN basis points from MONDAY at 2.507% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.107 PAR  in basis points on the day /

Your closing USA dollar index, 101.68 DOWN 2  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 11.13 OR 0.15% 
German Dax :CLOSED UP 7.74 POINTS OR 0.06%
Paris Cac  CLOSED DOWN 17.19 OR 0.36%
Spain IBEX CLOSED DOWN 2.40 POINTS OR 0.02%
Italian MIB: CLOSED UP 5.20 POINTS OR 0.03%

The Dow closed DOWN 29.58 OR 0.14%

NASDAQ WAS closed DOWN 15.24 POINTS OR 0.26%  4.00 PM EST
WTI Oil price;  53.33 at 1:00 pm; 

Brent Oil: 56.08  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  58.12 UP 14/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD FALLS TO +0.319%  FOR THE 10 YR BOND  1:30 EST

END

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

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

WTI CRUDE OIL PRICE 5 PM:$52.88

BRENT: $55.59

USA 10 YR BOND YIELD: 2.522%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.121%

EURO/USA DOLLAR CROSS:  1.0568 down .0010

USA/JAPANESE YEN:113.89   down 0.003

USA DOLLAR INDEX: 101.82  up 12  cents ( HUGE resistance at 101.80 maintained)

The British pound at 5 pm: Great Britain Pound/USA: 1.2202 : down 36 BASIS POINTS.

German 10 yr bond yield at 5 pm: +.319%

END

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

TRADING IN GRAPH FORM

“Shit’s Starting To Break” – Stock Slide Escalates Amid Copper, Credit, & Crude Carnage

One veteran macro trader summed up the markets perfectly “Shit’s starting to break” – noting that ‘real’ macro data decoupled from stocks at the start of the year, VIX decoupled from stocks three weeks ago, EM broke over a week ago, Copper snapped last week, and now High Yield credit is breaking – stocks are always the last to catch on…

 

Russell 2000 down 4 days in a row – longest losing streak in 3 months; S&P’s 4-day decline is worst since right before the election; Trannies down 3% in the last 4 days…

As Ryan Detrick (@RyanDetrick) notes, this is the first back to back loss for the S&P in 25 days. The previous 3 times it got to 25, the streak ended also.

Bloomberg’s Andrew Cinko tallied up the drop from peak to trough for the five multi-day retreats in Nasdaq since election day:

  • March 1 peak: -1.4%
  • February 21 peak: -1.2%
  • January 26 peak: -1.7%
  • December 27 peak: -2.6%
  • November 29 peak: -3.1%

Small Caps are the worst performers of the last 4 days – biggest drop since before the election – testing key technical levels

 

Another day, another desperate attempt to crush VIX and drive momentum back into stocks… (VIX LoD 11.04)

 

Bonds and Stocks both sold off together again – 3rd day in a row – (as Risk-Parity funds contonued their biggest slide of the year)

 

Treasury yields rose modestly today (weak 3Y auction), with modest steepening in 2s30s…

 

HY Bonds have broken below key technical resistance (Uptrend line and 50-dma) with the biggest drop in price in almost 3 months…

 

The last 4 days are the worst for HY Credit since before the election…

 

And HY’s breakdown follows Emerging Markets decoupling last week…

 

And Dr.Copper’s not buying it either…

 

And stocks gave up their grip on macro data reality a while back…

 

2s10s Breakevens curve has collapsed to its lowest since June 2008

As RBC’s Mark Orsely points out, the 2s10s breakeven curve has inverted – meaning the market expectes higher inflation in the short-run than long-run.

 

The USD Index managed a modest gain for the second day in a row but remains well below Friday’s highs…

 

Gold dropped to one-month lows (futures down 6 days in a row – longest losing streak since election) – Gold futs broke below the 100-DMA today

 

Silver was also hit hard – biggest 4-day drop in 3 months…

 

Copper was clubbed like a baby seal – the biggest 4-day plunge in 10 months sent the economics PhD to two-month lows…

 

Desperate jawboning from the Saudi oil Minister and OPEC’s Barkindo failed to sustain any gains in crude…(machines ran the stops but the chatter couldn’t sustain it)

 

Finally, this remains the WTF-est chart we know of right now – as The Fed’s forecast for GDP collapses, so the odds of a rate hike soar (FF Futs tumble)…

end

 

The trade deficit rises from 44.3 billion in December up to 48.5 billion in January as imports exceeded exports; a huge deficit which will be a negative to GDP.  Donald will not be too happy with these results.

(courtesy zerohedge)

Trump Won’t Be Happy: US Records Biggest Trade Deficit In 5 Years

In a report that will be closely scrutinized – and criticized – by the trade-sensitive Trump administration, today the Department of Commerce announced that the January trade deficit surged in January 2017, jumping from $44.3 billion in December (revised) to $48.5 billion in January, in line with expectations, as imports increased more than exports.This was the biggest trade deficit going back to early 2012.

The previously published December deficit was $44.3 billion. The goods deficit increased $4.0 billion in January to $69.7 billion. The services surplus decreased $0.3 billion in January to $21.2 billion.

The January increase in the goods and services deficit reflected an increase in the goods deficit of $4.0 billion to $69.7 billion and a decrease in the services surplus of $0.3 billion to $21.2 billion. Year-over-year, the goods and services deficit increased $5.1 billion, or 11.8 percent, from January 2016. Exports increased $13.3 billion or 7.4 percent. Imports increased $18.4 billion or 8.3 percent.

The details, first exports

  • Exports of goods and services increased $1.1 billion, or 0.6 percent, in January to $192.1 billion. Exports of goods increased $1.1 billion and exports of services decreased less than $0.1 billion.
    • The increase in exports of goods mostly reflected increases in industrial supplies and materials ($2.1 billion) and in automotive vehicles, parts, and engines ($1.3 billion). A decrease in capital goods ($1.9 billion) was partly offsetting.
    • The decrease in exports of services reflected nearly offsetting changes of $0.1 billion or less in all categories.

Next, Imports

  • Imports of goods and services increased $5.3 billion, or 2.3 percent, in January to $240.6 billion. Imports of goods increased $5.1 billion and imports of services increased $0.2 billion.
    • The increase in imports of goods mostly reflected increases in consumer goods ($2.4 billion), in industrial supplies and materials ($1.0 billion), and in automotive vehicles, parts, and engines ($0.9 billion).
    • The increase in imports of services mostly reflected an increase in transport ($0.2 billion), which includes freight and port services and passenger fares.

On a geographic basis, the January figures show surpluses, in billions of dollars, with Hong Kong ($3.5), South and Central America ($3.1), Singapore ($1.2), and Brazil ($0.7).

Deficits were recorded, in billions of dollars, with China ($30.2), European Union ($13.4), Germany ($5.7), Mexico ($5.5), Japan ($5.5), Italy ($2.4), OPEC ($2.4), South Korea ($2.3), Canada ($2.0), India ($1.9), France ($1.6), United Kingdom ($0.9), Taiwan ($0.9), and Saudi Arabia ($0.9).

  • The balance with Saudi Arabia shifted from a surplus of $0.4 billion to a deficit of $0.9 billion in January. Exports decreased $0.6 billion to $1.2 billion and imports increased $0.6 billion to $2.0 billion.
  • The deficit with Mexico increased $1.0 billion to $5.5 billion in January. Exports decreased $0.2 billion to $20.5 billion and imports increased $0.8 billion to $26.0 billion.

* * *

It is likely that in his first trade-related moves, Trump will focus on the countries in bold above, as he seeks to reverse what was the worst trade deficit print in five years.

 

 

end

 

It sure looks like Janet is digging herself into a deep hole.  She is going to raise rates while at the same time, the Atlanta Fed just lowered Q1 estimates for GDP to only 1.3%

(courtesy zero hedge)

Atlanta Fed Slashes Q1 GDP To Only 1.3% With Yellen Set To Hike

One week ago, we pointed out a curious bifurcation: the Fed was telegraphing an imminent rate hike – one which following Yellen’s Friday conference is now virtually assured – even though it appears the FOMC would be hiking in a quarter in which GDP comes in in the mid 1%-range, or lower. The reason: while “soft data” – which is important to animal spirits if not actual economic output – continues to surge, the “hard data”, that which actually matters to the economy, is still disappointing.

 

Fast forward one week when according to the Atlanta Fed, Janet Yellen is about to dig an even deeper hole because should the Fed hike next Wednesday it will do so in a quarter in which GDP was just revised from 1.8% as of last week to just 1.3%. This forecast was more than double, or 2.7%, as recently as one month ago.

From the source:

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 1.3 percent on March 7, down from 1.8 percent on March 1. The forecasts for first-quarter real personal consumption expenditures growth and real nonresidential equipment investment growth fell from 2.1 percent and 9.1 percent, respectively, to 1.8 percent and 7.3 percent, respectively, after Thursday’s motor vehicles sales release from the U.S. Bureau of Economic Analysis. The forecast of the contribution of inventory investment to first-quarter growth fell from -0.50 percentage points to -0.72 percentage points after yesterday’s manufacturing report from the U.S. Census Bureau.

 

 

What is curious is the dramatic divergence between the Atlanta Fed and the Dow Jones, one tracking the real economy, the other perhaps tracking euphoria and “soft” data…

… but even more curious is the correlation between the Atlanta Fed’s GDPNow forecast and the inverted April Fed Fund Futures: this means that the worse the economy gets, the higher the Fed odds of a rate hike.

Does any of this make sense? Of course not, but then again in a world in which even the OECD no longer can explain the divergence between markets and the economy, and openly slams central banks for creating asset bubbles, nothing is supposed to make sense.

 

end

 

Donald attacks the pharmaceutical industry and vows to get pricing down:

(courtesy zerohedge)

Biotech Stocks Tumble After Trump Tweet On Pricing

Having given his blessing to “Trumpcare”, President Trump opined on the Drug Industry’s pricing model…

I am working on a new system where there will be competition in the Drug Industry. Pricing for the American people will come way down!

And drugmakers’ stocks are stumbling…

 

end

Due to the internet, bricks and mortar operations are faltering. Here is the next domino to fall; commercial real estate:

(courtesy Charles Hugh Smith)

The Next Domino To Fall: Commercial Real Estate

Via Charles Hugh-Smith of OfTwoMinds blog,

Unless the Federal Reserve intends to buy up every dead and dying mall in America, this is one crisis that the Fed can’t bail out with a few digital keystrokes.

Just as generals prepare to fight the last war, central banks prepare to battle the last financial crisis–which in the present context means a big-bank liquidity meltdown like the one that nearly toppled thr global financial system in 2008-09.

Planning to win the next war by assuming it will be a copy of the last confict is an excellent strategy for losing the next war. The same holds true for the next financial crisis: reckoning that it will be a repeat of 2008 is an excellent way to be caught completely off-guard.

Crises may rhyme, but they don’t repeat. The next Global Financial Meltdown won’t start in subprime mortgages–that sector has been wiped out, written down, or passed on to the poor tax-donkey taxpayers.

The next crisis also won’t arise on money-center banks, either. Central banks have figured out how to bail out the banks, and have rebuilt the bank balance sheets by stripping hundreds of billions of dollars in interest from savers.

(Sorry, widows and orphans–your interest income had to be transferred to the big banks. We’re sure you understand why the banks are more important than you are as you enjoy yet another meal of canned beans and saltine crackers.)

The central banks and state treasuries around the globe may be confident they can bail out the banks, but what if the next domino to fall isn’t a bank? What if it is a “safe, high yield asset” held by institutional owners such as pension funds, insurance companies and REITs (real estate investment trusts)?

What if the next crisis isn’t a spot of bother caused by excessive leverage, but a systemic collapse of collateral as an entire sector–retailers holding millions of square feet of bricks-and-mortar store space–falls off a cliff?

Consider this chart of sky-high commercial real estate (CRE) valuations…

and this photo of a decimated major mall…

and this partial list of retail closures, some due to bankruptcy, others due to downsizing, and others that claim to be downsizing but are actually the initial stages of liquidation.

Talk about an overvalued market set up for a fall. It isn’t just malls becoming empty retail wastelands–it’s Corporate America shifting to flex-work and work-at-home, slashing the need for floor after floor of costly business-park office space.

It’s about restaurants moving to smaller spaces as they move to serving more meals via delivery services.

Commercial real estate is grossly overbuilt in retail and office space. Combine sky-high valuations with cratering demand and billions in short-term CRE loans that must be rolled over into new loans, and we don’t have a liquidity crisis, we have a collateral crisis— the assets supporting the debt are no longer worth the loan balance.

Unless the Federal Reserve intends to buy up every dead and dying mall in America, this is one crisis that the Fed can’t bail out with a few digital keystrokes. Gordon T. Long and I discuss this brewing crisis and its potentially devastating consequences in our program Is Retail CRE The Next Financial Implosion? (YouTube)(34:12).

end
I am sure that China is thrilled with their giant Telecom ZTE forced to pay a 1.2 billion uSA fine for selling USA technology to sanctioned Iran:
(courtesy zero hedge)

China Telecom Giant ZTE Pleads Guilty, To Pay $1.2 Billion Penalty For Selling US Tech To Iran

In Wilbur Ross’ first public announcement, the former hedge fund manger and current Trump commerce secretary announced that China’s telecommunications giant ZTE has agreed to pay a total of $1.2 billion in penalties and plead guilty to violating U.S. sanctions on Iran, selling US technology to Tehran, and obstructing a federal investigation, ending a five-year probe that has raised trade tensions between the U.S. and China. The penalty was among the largest ever in a sanctions case.

ZTE was accused that over a six-year-long period, it planned to obtain technology products from the U.S., incorporate them into ZTE equipment and ultimately ship the equipment to Iran. The company agree to settle because as the WSJ adds, it avoided a more-devastating supply cutoff of U.S. components, which the Commerce Department slapped on ZTE in March 2016 and immediately suspended as a settlement was negotiated. Without key components such as Qualcomm processors for its smartphones, ZTE’s ability to produce some of its major products could have been crippled in a matter of months, putting it at the risk of bankruptcy.

The Chinese telecom giant will pay an initial fine of $892 million as part of the settlement, and will plead guilty to conspiring to violate the International Emergency Economic Powers Act, among other charges, in the agreement with the U.S. Department of Commerce, Department of Treasury and Department of Justice.

“The highest levels of management within the company approved the scheme,” and the company “repeatedly lied to and misled federal investigators,” said Mary McCord, who runs the Justice Department’s national security division.

The Commerce Department investigation followed reports by Reuters in 2012 that ZTE had signed contracts to ship millions of dollars worth of hardware and software from some of the best-known U.S. technology companies to Iran’s largest telecoms carrier.

“ZTE acknowledges the mistakes it made, takes responsibility for them, and remains committed to positive change in the company,” ZTE Chairman and Chief Executive Zhao Xianming said on Tuesday in a statement. An agreement caps a year of uncertainty for the Shenzhen-based company, which in March 2016 was placed on a list of entities that U.S. suppliers could not work with without a license. ZTE acted contrary to U.S. national security or foreign policy interests, the Commerce Department said at the time.

Commerce will recommend that ZTE be removed from that list if the company lives up to its deal and a court approves its agreement with the Justice Department.

According to Reuters, ZTE said it has agreed to an additional penalty of $300 million to a division of the Commerce Department that will be suspended during a seven-year term on the condition that the company complies with requirements in the agreement. The settlement includes $101 million to settle potential civil liability for Iran sanction violations. The action marks the Treasury’s Office of Foreign Assets Control’s largest settlement to date with a non-financial entity.

One of the world’s biggest telecommunications gear makers and the No. 4 smartphone vendor in the United States, ZTE sells handset devices to U.S. mobile carriers AT&T, T-Mobile US  and Sprint. It relies on U.S. companies including Qualcomm, Microsoft and Intel for components.

 

 

end

 

 

Republican release plan to repeal and replace Obamacare.  It has no chance of passsing

(courtesy zero hedge)

House Republicans Release Plan To Repeal and Replace Obamacare: Key Highlights

On Monday afternoon, House Republicans in both the Ways and Means and Energy and Commerce committees, unveiled their long-awaited legislation as part of House Republicans effort to repeal and replace Obamacare through the reconciliation process. The measure would roll back the government’s health care role and is expected to result in fewer people having insurance coverage; however, due to strong opposition among key republicans to the proposed plan, there is a high likelihood the bills will not pass in their current form.

Upon releasing the legislation, House Energy and Commerce Committee Chairman Greg Walden said: “After years of Obamacare’s broken promises, House Republicans today took an important step. We’ve spent the last eight years listening to folks across this country, and today we’re proud to put forth a plan that reflects eight years’ worth of those conversations with families, patients, and doctors. Simply put, we have a Better Way to deliver solutions that put patients – not bureaucrats – first, and we are moving forward united in our efforts to rescue the American people from the mess Obamacare has created.

“With today’s legislation, we return power back to the states – strengthening Medicaid and prioritizing our nation’s most vulnerable. We provide the American people with what they’ve asked for: greater choice, lower cost, and flexibility to choose the plan that best suits their needs. Today is just the first step in helping families across this country obtain truly affordable health care, and we’re eager to get this rescue mission started.”

The plan would dismantle the key aspects of ObamaCare, including subsidies to help people buy coverage, the law’s fines on people who don’t purchase health insurance, the expansion of Medicaid, and drop the plan to tax employer-sponsored plans. The bills can be found here and here.

A breakdown of core aspects removed from the existing law (courtesy of Axios):

  • All Obamacare taxes
  • All Obamacare subsidies, including its premium tax credit
  • Individual, employer mandate penalties
  • “Cadillac tax”
  • No longer will limit the tax break for employer-sponsored health coverage
  • No payments to insurers for cost-sharing reductions
  • Selling insurance across state lines (can’t be done in the “reconciliation” bill)
  • Medical malpractice reform (can’t be done in the “reconciliation” bill)

What is being added:

  • Pre-existing condition coverage
  • Continuous coverage — 30 percent penalty if people don’t keep themselves insured
  • Special fund to help states set up “high-risk” pools, fix their insurance markets, or help low-income patients
  • Enrollment in expanded Medicaid will be frozen
  • Current enrollees can stay until 2020, and keep getting extra federal funds, until they leave the program on their own
  • Medicaid will change to “per capita caps” (funding limits for each person) in fiscal year 2020
  • A new, refundable tax credit will be available in 2020 to help people buy health insurance
  • Covers five age groups — starts at $2,000 for people in their 20s, increases to $4,000 for people in their 60s
  • It’s not means tested, but phased out for upper-income people (starting at $75,000 for individuals, $150,000 for families)
  • Insurers can charge older customers five times as much as young adults

At its core, in place of the existing Affordable Care Act legislation, republicans will implement a system centered on a tax credit to help people buy insurance.  That tax credit would range from $2,000 to $4,000 annually  increasing with age. That system would provide less financial assistance for low-income and older people than ObamaCare, but could give more assistance to younger people and those with somewhat higher incomes.

Democrats have warned that between the phasing out of ObamaCare’s Medicaid expansion and the smaller tax credit for low income people, coverage would be put at risk for many of the 20 million people who gained it from ObamaCare. As The Hill adds, Republicans acknowledge that their plan will cover fewer people, but note that unlike ObamaCare, they are not forcing people to buy coverage through a mandate. They say their system is less intrusive and provides people a tax credit without mandates or a range of tax increases.

While some republicans such as House Ways and Means Chairman Kevin Brady are confident the bill will pass with full Republican support despite recent party infighting over the details, the measure faces a rocky path, particularly in the Senate.

Earlier on Monday, four Republican senators – Sens. Rob Portman, Shelley Moore Capito, Cory Gardner and Lisa Murkowski – objected to an earlier version of the House bill, saying that it failed to protect ObamaCare’s Medicaid expansion, saying they won’t support a bill that takes the same approach to the program as a leaked Obamacare repeal and replacement bill did. However, under the proposed bill, the repeal of the Medicaid expansion would not take effect until 2020, and Republicans would grandfather in current enrollees so that they can stay on the program. Once 2020 arrives, the federal government will no longer provide the extra federal funds that allow for expansion.

As this is unlikely to solve the senators’ problems with the bill, the proposed plan may be dead on arrival.

That plan has drawn objections from more centrist Republican senators too, who want to protect the expansion and are worried about constituents losing coverage and their states losing federal funds.

House Republicans have also objected to the plan, with Conservatives in the House Freedom Caucus calling the bill’s tax credit is a “new entitlement.” They have enough votes to kill the bill, but it remains to be seen whether they will actually vote against it.

As previously leaked, the bill would maintain ObamaCare’s protections for people with pre-existing conditions, who could still not be denied coverage. Instead of ObamaCare’s mandate, the bill would seek to incentivize healthy people to sign up by allowing insurers to charge people 30 percent higher premiums if they have a gap in coverage. The measure also repeals ObamaCare’s taxes, such as the medical device tax and health insurance tax, starting in 2018.

Finally, The Hill also notes that the bill scraps a controversial Republican proposal in earlier drafts to start taxing some employer-sponsored health insurance. Instead, the measure would keep ObamaCare’s “Cadillac tax” on generous healthcare plans starting in 2025, in order to prevent that legislation from adding to the deficit in that decade.

House committees planned votes on the legislation Wednesday at 10:30am. That will launch perhaps the year’s defining battle in Congress, and GOP success is by no means assured because of internal divisions.

 

 

end

 

And as expected the democrats respond:

(courtesy zero hedge)

Pelosi Slams ‘TrumpCare’: “Couldn’t Be Worse… Biggest Wealth Transfer Ever”

Following Chuck Schumer’s denigration of ‘Trumpcare’ overnight, Nancy Pelosi has come out swinging this morning to press the same narrative to the American people: It “couldn’t be worse” she exclaimed on ABC’s ‘This Morning’

Here is what Senate minority leader Chuck Schumer had to say about the Republican’s plan for “TrumpCare” last night…

Trumpcare doesn’t replace the Affordable Care Act, it forces millions of Americans to pay more for less care. This plan would cut and cap Medicaid, defund Planned Parenthood, and force Americans, particularly older Americans, to pay more out of pocket for their medical care all so insurance companies can pad their bottom line.

 

It cuts taxes on the rich to make middle class families pay more. To make matters worse, this sham of a replacement would rip treatment away from hundreds of thousands of Americans dealing with opioid addiction, breaking the President’s word that he would expand treatment, not cut it.

 

This bill is a giveaway to the wealthy and insurance companies at the expense of American families, and Senate Democrats will work hard to see that it is defeated.

And now, Nancy Pelosi is trotted out to the mainstream to explain how Obamacare was awesome and Trumpcare “couldn’t be worse.”

“This will make millions of people — it’s a question of 10, 15, 20 million people — off of having health insurance,” she said during an interview on CBS’s “This Morning.”

 

“It will be the biggest transfer of wealth from low and middle income people to wealthy people in our country.”

 

“Show us the numbers as to how many people will be thrown off. It couldn’t be worse.”

 

As The Hill notes, the legislation would scrap the healthcare law’s individual mandate and repeal most of its taxes and regulations. People would be given a tax credit, based on their age, to help them afford insurance. The GOP’s plan would also phase out ObamaCare’s Medicaid expansion, which now covers more than 10 million people. Pelosi argued that the measure would disproportionately harm all but the wealthiest Americans. The newly unveiled measure makes good on a long-time promise from GOP lawmakers to repeal and replace former President Obama’s signature healthcare reform law. Committees in the House are scheduled to mark up the legislation on Wednesday.

 

Judging by Schumer and Pelosi, millions will die and the ‘rich’ will be laughing as they do. We suspect that will not happen, but when all you have left is lies, scaremongery appears to be the new Democrat platform – “We’re not Trump.”

 

end

 

Credit card debt sees a big fall  (the consumer ran out of credit) whereas auto loans and student loans keeps rolling on in a northerly direction;
(courtesy zero hedge)

US Credit Card Debt Sees Biggest Drop In Over Four Years

The credit-card fueled spending spree came to a screeching halt in January, when according to the latest just released consumer credit data from the Fed, revolving credit tumbled by $3.8 billion. This was the first decline since February of 2016, and the biggest drop since December 2012.

On the other hand, the far more generous non-revolving, student and auto loans, rose once again, posting a $12.6 billion increase in January, bringing the total consumer credit increase to just $8.8 billion, one half of the $17 billion expected, and down materially from the revised December print of $14.8 billion.

The sharp contraction in revolving, i.e. credit card debt, is seen more clearly in the chart below laying out only this component of total consumer credit:

As expected, there was no change to the breakdown of student and auto loans, which remained at $1.4 trillion and $1.1 trillion, respectively, as this data series is updated once every quarter.

As traditionally happens in January, depository institutions saw a sharp, non-seasonally adjusted drop in their credit holdings, offset by a surge in Federal Government debt, which surged by $27.3 billion, the highest since last January.

Finally, a chart showing just the federal government’s contribution to new sources of credit: what the chart shows is that since the start of 2009, total consumer loans owned by the Federal Government have increased by $1 trillion, accounting for all the loan expansion in the past 7 years.

end

 

As I highlighted to you yesterday, the new Trumpcare bill has no chance of passing. Many conservatives are calling this a train wreck;

(courtesy zero hedge)

“It’s A Train Wreck”: Conservative Groups Slam GOP Healthcare Plan

As discussed earlier, the Obamacare repeal and replace effort, derisively called by some either “Obamacare Lite”, “RyanCare”, “ObamaCare 2.0″,  and even Trumpcare”. is running into major hurdles as prominent consevative groups threaten to derail Trump’s broader economic agenda.

While The Trump administration on Tuesday formally backed the House GOP’s plan to repeal and replace ObamaCare, early hurdles emerged after tea partiers Rand Paul and Mike Lee both said that the proposed plan will not pass because it is too similar to the original healthcare law, while GOP senator Roy Blunt said that the plan as it stands may not be able to get the support needed to pass the Senate.  “What I don’t like is, it may not be a plan that gets a majority votes and let’s us move on. Because, we can’t stay where we are with the plan we’ve got now,” Blunt said on KMBZ, as first reported by CNN.

The two are just the tip of the iceberg.

As The Hill writes, outside conservative groups on Tuesday blasted House Republicans’ newly unveiled healthcare proposal, saying it doesn’t live up to the GOP’s promise of fully repealing ObamaCare. Here are some of the more prominent objectors:

The Club for Growth dubbed the proposal “RyanCare” and threatened to record names of Republicans who vote for the bill unless it includes significant changes.

Americans for Prosperity/Freedom Partners called the plan “Obamacare 2.0”

The Cato Institute called the plan a “TrainWreck”

Heritage Action, FreedomWorks and the Koch brothers-backed Americans for Prosperity, a group aligned with billionaire industrialists Charles and David Koch, also issued scathing statements highly critical of the “American Health Care Act,” which was released on Monday.

FreedomWorks panned the GOP bill as “ObamaCare-Lite,” while AFP labeled it “ObamaCare 2.0.” “This is simply not a full repeal of ObamaCare. It falls far short of the promises Republicans made to the American people in four consecutive federal elections,” AFP President Tim Phillips said in a phone interview Tuesday. “The proposed legislation trades one form of government subsidy for another government subsidy, and doesn’t roll back the mandate of ObamaCare. It’s a poor first attempt.”

In short, conservatives don’t like the bill in its current form, and as the Hill puts it, “the seemingly coordinated statements — all released within an hour of each other — from these four big-money, influential conservative groups create a huge headache for Speaker Paul Ryan (R-Wis.) and the two authors of the House bill: Energy and Commerce Committee Chairman Greg Walden (R-Ore.) and Ways and Means Committee Chairman Kevin Brady (R-Texas).”

Assuming all members vote and all Democrats vote no, it would take 22 House GOP defections to kill the bill. Just three Republican votes could sink the legislation in the Senate.

As noted above, two Tea Party darlings, Sens. Rand Paul (R-Ky.) and Mike Lee (R-Utah), have already come out against the GOP plan, as have former House Freedom Caucus Chairman Jim Jordan (R-Ohio) and conservative Reps. Justin Amash (R-Mich.) and Dave Brat (R-Va.). As we explained yesterday, many on the right are objecting to the plan’s refundable tax credits, which would replace ObamaCare insurance subsidies.

“If it’s a new federal plan, I do not like it because the federal government has shown itself unable to constrain itself when it comes to fiscal matters,” Brat told The Hill. “As a result, Medicare and Social Security are insolvent and our health system will be next.”

Club for Growth said it will “key vote” the bill, meaning it will include how lawmakers vote on it when calculating grades for members of Congress, and whip votes against the House proposal unless major changes are made.

“The problems with this bill are not just what’s in it, but also what’s missing: namely, the critical free-market solution of selling health insurance across state lines,” Club for Growth President David McIntosh said in a statement. “Such an injection of competition would lead to hundreds of billions of dollars in savings, nullifying any argument by Congressional Republicans that this provision cannot be included in the current bill.  “Republicans should be offering a full and immediate repeal of Obamacare’s taxes, regulations, and mandates, an end to the Medicaid expansion, and inclusion of free-market reforms, like interstate competition.”

Meeting a tide of early criticism, the plan’s architects were busy defending it starting Tursday morning. Brady, a main architect of the bill, pushed back on the conservative objections at a joint news conference with Walden on Tuesday. Brady said the bill is similar to legislation from then-Rep. Tom Price (R-Ga.), now secretary of Heath and Human Services, which “had 84 cosponsors including members and leaders of the Freedom Caucus, the RSC and the Republican conference.”

“As Republicans we have a choice,” Brady said. “We can act now or we can keep fiddling around and squander this opportunity to repeal ObamaCare and begin a new chapter for the American people.”

For now, at least, it appears that many would prefer to fiddle, even if that means risking alienating some of their core constituents, a point made by the AFP’s Phillips who, fresh from an anti-ObamaCare rally by the Capitol, warned that there will be electoral consequences for Republicans if they don’t fully repeal the current health law. He said 88 percent of House Republicans have previously voted for full repeal in the past, as have 97 percent of Senate Republicans.

“This is not a new issue. It’s been out there for eight years and Republicans have been unambiguous about repealing ObamaCare,” Phillips told The Hill. “The American people took their word for it and gave them the largest majority in the House.

‘But this will be shortest-lived majority in the modern era if they fail to fully repeal ObamaCare.”

The vice president himself appeared to lash out at hold outs in the Senate saying “My message to GOP Senate: If you like ObamaCare, you can keep it, but people want change & fact is ObamaCare must go.”

My message to GOP Senate: If you like ObamaCare, you can keep it, but people want change & fact is ObamaCare must go.

In addition to ripping the House plan, FreedomWorks national director of campaigns, Noah Wall, also called out four GOP senators — Rob Portman (Ohio), Shelley Moore Capito (W.V.), Cory Gardner (Colo.) and Lisa Murkowski (Alaska) — for saying they could not support the House bill because it did not assist people in their states who are covered by ObamaCare’s expanded Medicaid program.

“Sens. Portman, Capito, Gardner, and Murkowski would be in jail with Bernie Madoff if they had orchestrated such a fraud in the private sector. They have scammed the American people,” Wall said in a statement. “They supported a strong repeal bill when they knew President Obama would never sign it, and now they won’t support the same language because President Trump might sign it.”

Meanwhile, the Trump administration formally backed the GOP plan in a letter Tuesday, with Secretary of Health and Human Services Tom Price writing that it would serve as a good first step. “These proposals offer patient-centered solutions that will provide all Americans with access to affordable, quality healthcare, promote innovation and offer peace of mind for those with pre-existing conditions,” Price wrote.

To sum up, here is a great cheat sheet courtesy of Axios of all those who have so far expressed objection to the plan in its current form.:

Organizations:

Politicians:

Finally, for those who missed it, here is Goldman Sachs again explaining why any delays in passing the Obamacare alternative plan, will lead to major delays for the rest of Trump’s economic agenda:

“the slow process on ACA repeal signals that tax reform is likely to take longer than initially expected and that the final tax legislation that Congress enacts is likely to be less radical than the early proposals from House Republicans and the Trump campaign. That said, while tax legislation looks likely to be delayed we expect it to move forward eventually.”

And putting it all together, here is Goldman’s chart showing “the long year ahead” and where we are right now.

end

 

the long awaited release of Vault 7 which is the largest ever publication of confidential CIA documents. Basically these guys can turn the microphone on inside your smart TV and then record your conversations

(courtesy zero hedge)

Wikileaks Unveils ‘Vault 7’: “The Largest Ever Publication Of Confidential CIA Documents”; Another Snowden Emerges

WikiLeaks has published what it claims is the largest ever release of confidential documents on the CIA. It includes more than 8,000 documents as part of ‘Vault 7’, a series of leaks on the agency, which have allegedly emerged from the CIA’s Center For Cyber Intelligence in Langley, and which can be seen on the org chart below, which Wikileaks also released:

A total of 8,761 documents have been published as part of ‘Year Zero’, the first in a series of leaks the whistleblower organization has dubbed ‘Vault 7.’ WikiLeaks said that ‘Year Zero’ revealed details of the CIA’s “global covert hacking program,” including “weaponized exploits” used against company products including “Apple’s iPhone, Google’s Android and Microsoft’s Windows and even Samsung TVs, which are turned into covert microphones.”

WikiLeaks tweeted the leak, which it claims came from a network inside the CIA’s Center for Cyber Intelligence in Langley, Virginia.

Among the more notable disclosures which, if confirmed, “would rock the technology world“, the CIA had managed to bypass encryption on popular phone and messaging services such as Signal, WhatsApp and Telegram. According to the statement from WikiLeaks, government hackers can penetrate Android phones and collect “audio and message traffic before encryption is applied.”

Another profound revelation is that the CIA can engage in “false flag” cyberattacks which portray Russia as the assailant. Discussing the CIA’s Remote Devices Branch’s UMBRAGE group, Wikileaks’ source notes that it “collects and maintains a substantial library of attack techniques ‘stolen’ from malware produced in other states including the Russian Federation.

“With UMBRAGE and related projects the CIA cannot only increase its total number of attack types but also misdirect attribution by leaving behind the “fingerprints” of the groups that the attack techniques were stolen from. UMBRAGE components cover keyloggers, password collection, webcam capture, data destruction, persistence, privilege escalation, stealth, anti-virus (PSP) avoidance and survey techniques.”

As Kim Dotcom summarizes this finding, “CIA uses techniques to make cyber attacks look like they originated from enemy state. It turns DNC/Russia hack allegation by CIA into a JOKE

CIA uses techniques to make cyber attacks look like they originated from enemy state. It turns DNC/Russia hack allegation by CIA into a JOKE

But perhaps what is most notable is the purported emergence of another Snowden-type whistleblower: the source of the information told WikiLeaks in a statement that they wish to initiate a public debate about the “security, creation, use, proliferation and democratic control of cyberweapons.”  Policy questions that should be debated in public include “whether the CIA’s hacking capabilities exceed its mandated powers and the problem of public oversight of the agency,” WikiLeaks claims the source said.

The FAQ section of the release, shown below, provides further details on the extent of the leak, which was “obtained recently and covers through 2016”. The time period covered in the latest leak is between the years 2013 and 2016, according to the CIA timestamps on the documents themselves. Secondly, WikiLeaks has asserted that it has not mined the entire leak and has only verified it, asking that journalists and activists do the leg work.

Among the various techniques profiled by WikiLeaks is “Weeping Angel”, developed by the CIA’s Embedded Devices Branch (EDB), which infests smart TVs, transforming them into covert microphones. After infestation, Weeping Angel places the target TV in a ‘Fake-Off’ mode, so that the owner falsely believes the TV is off when it is on. In ‘Fake-Off’ mode the TV operates as a bug, recording conversations in the room and sending them over the Internet to a covert CIA server.

As Kim Dotcom chimed in on Twitter, “CIA turns Smart TVs, iPhones, gaming consoles and many other consumer gadgets into open microphones” and added ” CIA turned every Microsoft Windows PC in the world into spyware. Can activate backdoors on demand, including via Windows update”

BREAKING: CIA turns Smart TVs, iPhones, gaming consoles and many other consumer gadgets into open microphones.

Dotcom also added that “Obama accused Russia of cyberattacks while his CIA turned all internet enabled consumer electronics in Russia into listening devices. Wow!”

Obama accused Russia of cyberattacks while his CIA turned all internet enabled consumer electronics in Russia into listening devices. Wow!

Julian Assange, WikiLeaks editor stated that “There is an extreme proliferation risk in the development of cyber ‘weapons’. Comparisons can be drawn between the uncontrolled proliferation of such ‘weapons’, which results from the inability to contain them combined with their high market value, and the global arms trade. But the significance of “Year Zero” goes well beyond the choice between cyberwar and cyberpeace. The disclosure is also exceptional from a political, legal and forensic perspective.”

 

END

Well that is all for today

I will see you tomorrow night

Harvey

 

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3 comments

  1. Pat Ruvolo · · Reply

    Just curious as to why gold never rockets when Maugire spews his stuff about gold shortages? I am not believing him very much at ths point.

    Like

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