March 10/Jobs report in the USA showed a bigger increase than expected but earnings was down and that propelled gold and silver from its nadir: gold closed down $1.70 and silver down: 11 cents/the open interest on silver continues to remain stoic and we witness that in the COT report/David Stockman tells us what is going to happen on the 15th of March and beyond: final draft

Gold: $1200.70  down $1.70

Silver: $16.88  down 11 cents


Closing access prices:

Gold $1205.00

silver: $17.03

For comex gold:



For silver:


For silver: MARCH


Total number of notices filed so far this month: 2748 for 13,740,000


Let us have a look at the data for today



In silver, the total open interest FELL by ONLY 1874 contracts DOWN to 189,548 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  0.948 BILLION TO BE EXACT or 135% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold FELL BY A TINY 1790  contracts WITH ANOTHER FALL IN THE PRICE GOLD ($6.10 with YESTERDAY’S TRADING) The total gold OI stands at 432,298 contracts.

we had 2 notice(s) filed upon for 200 oz of gold.


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



We had a big change in tonnes of gold at the GLD: a withdrawal of 4.886 tonnes

Inventory rests tonight: 825.25 tonnes



We had a big change in inventory at the SLV/a withdrawal of 1,.66 million oz from the SLV

THE SLV Inventory rests at: 330.136 million oz



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

1. Today, we had the open interest in silver FELL by ONLY 1,874 contracts DOWN to 189,548 AS SILVER WAS DOWN A HEALTHY 27 CENTS with YESTERDAY’S trading. The gold open interest FELL BY 1,790 contracts DOWN to 425,837 WITH ANOTHER FALL IN THE PRICE OF GOLD OF $6.10  (YESTERDAY’S TRADING).  It sure looks like Ted Butler is correct in that hedge funds are now longer playing the game.  They refuse to liquidate their longs on continual raids orchestrated by the bankers. TODAY BOTH GOLD AND SILVER OPEN INTEREST REFUSED TO BUCKLE UNDER THE WEIGHT OF BANKER CARTEL SELLING.

(report Harvey


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg


 i)Late  THURSDAY night/FRIDAY morning: Shanghai closed DOWN 3.98 POINTS OR .12%/ /Hang Sang CLOSED UP 67.11 POINTS OR 0.29% . The Nikkei closed UP 286.03 POINTS OR 1.48% /Australia’s all ordinaires  CLOSED UP 0.35%/Chinese yuan (ONSHORE) closed DOWN at 6.9160/Oil ROSE to 49.49 dollars per barrel for WTI and 52.47 for Brent. Stocks in Europe ALL IN THE GREEN ..Offshore yuan trades  6.9074 yuan to the dollar vs 6.9160  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS CONSIDERABLY/ ONSHORE YUAN WEAKER AS IS THE OFFSHORE YUAN  COUPLED WITH THE SLIGHTLY WEAKER DOLLAR. CHINA SENDS A MESSAGE TO THE USA NOT TO RAISE RATES


South Korea’s President Park has been removed from office after their court upholds impeachment:

(courtesy zero hedge)


none today


China finally admits that it has a debt problem.  Right now total Chinese debt to GDP is around 277% and by next year it should approach 300% and thus close to a Minisky moment.  China is raising rates trying to cool its inflation in housing and  other commodities.

( zero hedge)


Bloomberg reports that there has been discussions within the ECB that they are considering raising rates prior to the end of QE due to the rising inflationary scenario

up goes gold, up goes the Euro and the bunds tumble again.

(courtesy zero hedge)


This is fascinating: the state department urges the coroner to keep Churkin’s cause of death secret.

( zero hedge)


You will see throughout my blog data which suggests yields on all sovereign debt have been rising.  Last year, the world was worried about deflation and what did the bozos do?  They increased their monetary QE.  The result: inflation is coming!!

a very important commentary from John Rubino of Safe Haven:

( John Rubino/Safe Haven)


i)OPEC and the Saudis are now panicking as they warn the USA shale boys not to assume a production cut extension.  The shale boys do not care, as they will keep on producing oil and hedge production with options

( zero hedge)

ii)Rising oil rig counts are certainly causing oil production to rise and that has been going on for 8 straight weeks.  No doubt that the shale boy’s increase in production has killed the production cut rally orchestrated by the Saudis

( zero hedge)



i) Strange!! Bitcoin rises above 1300.00 dollars USA per coin and much higher than gold

( zero hedge)

ii)Alasdair Macleod on his weekly message to us:

(courtesy Alasdair Macleod/


i)What a disaster: 31% of college students spend some of their loan money on Spring break in Cancun or other holiday destinations

( zero hedge)

ii)The official jobs report:  a gain of 235,000 jobs but the all important earnings disappoint.

( zero hedge)

iii)Initial trading after the jobs report:

( zero hedge)

iv)As indicated above, Trump’s victory has “caused” many to go back into the labour force as 176,000 people entered the force (new level 94,190,000).

(zero hedge)

v)Wolf Richter explains why they are not going to drain the swamp

( Wolf Richter/WolfStreet)

vi) As we have outlined to you on several occasions, the real crisis begins on March 15.2017 and the guy who is banging the table on this is David Stockman

( David Stockman/Fox News/Daily Reckoning)

vii) Down goes the dollar as Mnuchin states that he is against the devaluation of countries’ currencies to gain an advantage.  In the upcoming G20 meeting no doubt there is will be a discussion on protectionism something that the USA wants but all other nations are against.

( zero hedge)

viii)Late this afternoon:

if job growth has been so great, can someone explain why USA government revenues have suffered the biggest drop since 2009?

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 1,790 CONTRACTS DOWN to an OI level of 425,837 WITH THE  FALL IN THE  PRICE OF GOLD ( $6.10 with YESTERDAY’S trading).  We are probably only 32,000 contracts away from rock bottom  (393,000). 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 LOSS of 39 contract(s) DOWN to 31. We had 10 contact(s) served upon yesterday, so we LOST 29 CONTRACTS or  AN ADDITIONAL 2900  ounces will NOT  stand for delivery.  The next active contract month is April and here we saw it’s OI FALL by 12,597 contracts DOWN TO 216,702 contracts.

For comparison purposes, the April 2016 contract at this time had an OI of 276,650 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 gained 356 contract(s) and thus its OI is 776 contracts. The next big active month is June and here the OI ROSE by 8414 contracts up to 123,462.

We had 2 notice(s) filed upon today for 200 oz

 And now for the wild silver comex results.  Total silver OI FELL BY ONLY 1874 contracts FROM  191,422 CONTRACTS DOWN TO 189,548 WITH YESTERDAY’S TRADING . It sure seems that the hedge funds are now longer playing the game as they refuse to liquidate their silver longs.We are moving FURTHER 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 717 contracts down to 1280 contracts. We had 708 notices served upon yesterday so we lost 9 contract(s) or an additional 45,000 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 delivery . However 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 GAINED 9 contracts to 987 contracts. The next active contract month is May and here the open interest LOST 2131 contracts DOWN to 148,404 contracts.


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 135 notice(s) filed for 675,0000 oz for the MARCH 2017 contract.

VOLUMES: for the gold comex

Today the estimated volume was 256,572  contracts which is good.

Yesterday’s confirmed volume was 264,904 contracts  which is good

volumes on gold are getting higher!

INITIAL standings for MARCH
 March 10/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
399.015 OZ
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
2 notice(s)
200 oz
No of oz to be served (notices)
29 contracts
2900 oz
Total monthly oz gold served (contracts) so far this month
59 notices
5900 oz
0.1835 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     51,678.5 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 0 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 0  customer deposit(s):
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
 i) Out of Delaware: 399.015 oz
total customer withdrawal: 399.015 oz
We had 2  adjustment(s)
i) Out of Delaware:  1,382.916 oz leaves the customer and enters the dealer account of Delaware
ii) Out of HSBC: 54,401.33 oz leaves the dealer account and enters the customer account of HSBC

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

To calculate the initial total number of gold ounces standing for the MARCH. contract month, we take the total number of notices filed so far for the month (59) x 100 oz or 5900 oz, to which we add the difference between the open interest for the front month of MARCH (31 contracts) minus the number of notices served upon today (2) x 100 oz per contract equals 8800 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 (59) x 100 oz  or ounces + {(31)OI for the front month  minus the number of  notices served upon today (2) x 100 oz which equals 8800 oz standing in this non active delivery month of MARCH  (.2737 tonnes)
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.
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: 0.2737 tonnes
total for the 15 months;  244.532 tonnes
average 16.302 tonnes per month vs last yr  61.82 tonnes total for 15 months or 4.12 tonnes average per month (last yr).
Total dealer inventory 1,366,821.635 or 42.513 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,893,365.207 or 276.622 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 276.622 tonnes for a  loss of 26  tonnes over that period.  Since August 8/2016 we have lost 77 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
And now for silver
 March 10. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
1,196,915.210 oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 nil oz
No of oz served today (contracts)
(675,000 OZ)
No of oz to be served (notices)
1145 contracts
(5,725,000  oz)
Total monthly oz silver served (contracts) 2748 contracts (13,740,000 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  3,284,723.5 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 2 customer withdrawal(s):
i) Out of Scotia: 96,805.210 oz
ii) Out of HSBC: 1,196,915.210 oz
 we had 1 customer deposit(s):
i) into JPMorgan:  599,942.800 oz
***deposits into JPMorgan have now resumed.
total customer deposits;  599,942.800  oz
 we had 1  adjustment(s)
i)Out of CNT:
596,571.150 oz was adjusted out of the customer and this landed into the dealer account of CNT
The total number of notices filed today for the MARCH. contract month is represented by 135 contract(s) for 675,000 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 2748 x 5,000 oz  = 13,740,000 oz to which we add the difference between the open interest for the front month of MAR (1280) and the number of notices served upon today (135) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the March contract month:  2748(notices served so far)x 5000 oz  + OI for front month of Mar.( 1280 ) -number of notices served upon today (135)x 5000 oz  equals  19,465,000 oz  of silver standing for the Mar contract month. This is  now average for an active delivery month in silver.  We lost 9 contracts or an additional 45,000 oz will not stand.  
Volumes: for silver comex
Today the estimated volume was 75,491 which is huge!!!
Yesterday’s  confirmed volume was 72,981 contracts  which is huge.
Let’s take today’s estimated volume of 75,491 contracts:  that represents:377.4 million oz of silver or approx. 53.922% of annual global supply (ex Russia ex China)
Total dealer silver:  37.579 million (close to record low inventory  
Total number of dealer and customer silver:   186.736 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.


At 3:30 pm we receive the COT report which gives position levels of our major players

you will recall last week that the commercials went massively short on gold. You will recall that the drive by shooting of gold and especially silver began on the Wednesday

Let us see what today’s report reveals;


Gold COT

Report – Futures

Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
229,969 96,284 61,157 99,484 252,132 390,610 409,573
Change from Prior Reporting Period
-17,525 12,588 6,747 -696 -27,955 -11,474 -8,620
152 106 82 46 50 239 201
Small Speculators  
Long Short Open Interest  
43,791 24,828 434,401  
-206 -3,060 -11,680  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, March 07, 2017

Our large speculators:


Boy were they blown out of the water:  they pitched 17,525 contracts from the long side

Our large specs that have been short in gold added 12,588 contracts to their short side.


Our commercials:

Those commercials that have been long in gold pitched 696 contracts from their long side

those commercials that have been short in gold covered a massive 27,955 contracts and their criminal ways continue unobstructed!!


Our small specs;

those small specs that have been long in gold pitched a tiny 206 contracts from their long side

those small specs that have been short in gold added another 3036 contracts to their short side.




commercials go net long by 28,651 contacts and that would be bullish.


And now for silver:

Remember that we are waiting to see if the managed money (hedge funds) pitched their contracts or held their positions despite the huge whacking.

Let us see:

Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
113,437 19,984 9,327 46,774 152,636
-1,792 178 806 -3,307 -5,455
97 36 36 30 38
Small Speculators Open Interest Total
Long Short 192,398 Long Short
22,860 10,451 169,538 181,947
-938 -760 -5,231 -4,293 -4,471
non reportable positions Positions as of: 142 99
Tuesday, March 07, 2017   © SilverSeek.c

Our large speculators:

those large specs that have been long in silver pitched only a  1,792 contracts from their long side.

those large specs that have been short in silver covered a tiny 178 contracts from their short side.

Ted Butler is again correct;  the managed money refused to budge!

Our commercials:

those commercials that have been long in silver pitched 3307 contracts from their long side

those commercials that have been short in silver covered only 5455 contracts from their short side and not really as much as in gold.

Our small specs:

those small specs that have been long in silver pitched a huge 1071 contracts from their long side

those small specs that have been short in silver covered 934 contracts from their short side.


the hedge funds are taking on the commercials by refusing to buckle under the weight of commercial bank short selling….






And now the Gold inventory at the GLD

March 10/ a withdrawal of 4.886 tonnes from the GLD/Inventory rests at 830.25

this tonnage no doubt is off to Shanghai

March 9/a withdrawal of 2.67 tonnes from the GLD/Inventory rests at 834.10

March 8/no change in gold inventory at the GLD/inventory rests at 836.77 tones

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.

March 10 /2017/ Inventory rests tonight at 825.25 tonnes
*FROM FEB 1/2017: a net    30.04 TONNES HAVE BEEN ADDED.


Now the SLV Inventory
March 10/no change in silver inventory at the SLV/Inventory rests at 330.136 million oz/
March 9/another big withdrawal of 1.137 million oz from the SLV/Inventory rests at 330.136 million oz/
March 8/a big change; a withdrawal  of 1.515 million oz from the SLV/Inventory rests at 331.273 million oz/
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 10.2017: Inventory 330.136  million oz

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 4.5 percent to NAV usa funds and Negative 4.6% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.0%
Percentage of fund in silver:38.8%
cash .+0.2%( Mar 10/2017) 
2. Sprott silver fund (PSLV): Premium RISES  to -.13%!!!! NAV (Mar 10/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to  – 0.35% to NAV  ( Mar 10/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -0.13% /Sprott physical gold trust is back into NEGATIVE territory at -0.35%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada


From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017…

Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.

The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.

The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.

“They weren’t interested in having those discussions,” Williams said.

 Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.

If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.

“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”

Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.

The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.

Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.

Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.


Major gold/silver trading/commentaries for FRIDAY


Silver Very Und



Alasdair Macleod on his weekly message to us:

(courtesy Alasdair Macleod/

The fateful date

Caesar: What sayest thou to me now? Speak once again.
Soothsayer: Beware the ides of March.
Caesar: He is a dreamer; let us leave him: pass.

This famous advice, according to Shakespeare, was ignored with fatal consequences for Julius Caesar. Markets may be being similarly complacent ahead of this anniversary date next week. The Fed has signalled that it will raise interest rates at the FOMC’s March meeting, timed for the same day. It so happens that this fateful date coincides with the end of the suspension of the US debt ceiling. Dare Janet Yellen raise rates at such a sensitive juncture?

We shall see. But it is worth pointing out that gold rose strongly following the last two rate rises. It is likely that it was a “sell the rumour, buy the fact” response, and was also impelled by being the other side of the dollar trade. And the last time debt brinkmanship came up was with an agreement between the President and congress to suspend the debt ceiling in end-July 2011, following which gold rose $200 in the ensuing weeks.

As all the investment brochures say, past performance is not a guide for the future. But if the Fed raises the Fed funds rate this month by ¼%, there could be a third relief rally for gold. If the increase is more than that, which it should be to begin the process of normalising rates, gold would probably be marked down heavily. However, given the fragility of the Eurozone and the President’s desire to see a lower dollar, a half per cent raise would be a very aggressive move.

There is just a possibility that the Fed will delay for another month until the uncertainty over the budget deficit and debt ceiling is hopefully resolved, with the Eurozone an added factor. By the way, the Dutch parliamentary election is also scheduled for 15th March. If the Fed funds rate is increased, and Geert Wilders’ Party for Freedom does well, the euro/dollar rate could challenge parity, heightening fears of price inflation in the Eurozone, which has already breached the ECB’s 2% target. The ECB might in turn be forced to abandon its negative interest rate policy, so perhaps Janet should wait.

The problem with the ECB reversing its monetary policy is it is the only buyer of large swathes of Eurozone sovereign debt, which otherwise are arguably distressed. The whole Eurozone market for sovereign debt is priced on the back of the ECB’s monthly purchases, and prices can be expected to fall significantly if it slashes its bond-buying programme, or is forced into abandoning negative interest rates. The ECB’s monetary policy, designed to drive the Eurozone into the sunny uplands of economic nirvana, is the sickest joke of monetary failure today, but at least it has staved off a systemic crisis, likely to undermine the entire Western banking system. Staved off, made potentially more severe, but not prevented.

Easy-money complacency is not restricted to the Eurozone. For all major central banks, rising borrowing costs are the greatest challenge today, which could be why they are talking hopefully about interest rates being at a permanently low level. It is a hope born out of the realisation that a rise in interest rates has become the primary systemic threat to economies overburdened with debt, and to those governments which have used the opportunity from suppressed interest rates to increase their indebtedness. It is also a threat to the survival of highly-geared central banks themselves, because their own balance sheets are stuffed full of over-valued bonds, certain to fall in price as rising interest rates take hold. On this subject, the Fed is geared to its own balance sheet 112 times its capital.

Debt is the Fed’s basic problem, and it doesn’t know how high rates can go without triggering a financial crisis. And even if the Fed could make an assessment for America, there is the knock-on effect of the Fed’s interest rate policy on foreign dollar borrowers, as well as on the Eurozone and Japan. China has indirectly added to the West’s problems by being the largest component of global economic growth. Her massive credit expansion is contributing to higher interest rates elsewhere by financing imports, commodity stockpiles and driving up prices. It is the lack of ability of the ECB and the Fed to raise interest rates sufficiently to counter higher rates of price inflation that’s becoming the most pressing challenge.

The hope that we are in an era of permanently low interest rates allows no headroom for President Trump’s economic plans. While he has been fighting the deep state over Russia and wire-taps, we hear not nearly enough about his plans to make America great again. Could it be because his own economists are telling him his tax cuts and infrastructure regeneration promises are more difficult to apply than first thought, at least in terms of budget control? So far, he has said he will increase defence spending by $54bn, to be paid for by cutting environmental and other domestic spending, as well as foreign aid. But apart from general statements while electioneering, that he will cut government waste, regulation and taxes, we have heard little more, other than entitlement programmes are unlikely to be affected.

In any event, from last Monday, the process of Congress negotiating the budget with the White House began. The White House budget office is drafting an official request for budgets in the 2018 fiscal year to be submitted to Congress. That still leaves us with the rest of fiscal 2017.

There appears to be a complacent assumption that with Republicans controlling Congress, Trump’s plans, after some back and forth, will be nodded through. Therefore, the assumption goes, a request for a rise in the debt ceiling might not meet insurmountable objections, unlike President Obama’s problems in 2011. That said, the suspension of the budget limit ends on 15th March and if the suspension is not to become semi-permanent, a new limit must be agreed.

Currently, the accumulated deficit stands at a fraction under $20 trillion, an emotive figure. Worryingly, at this stage of the credit cycle the budget should be balanced, or at least moving towards it. Instead, the Trump administration will probably need to issue nearly one trillion of Treasury debt for the rest of calendar 2017 on current spending projections. The White House will argue that the reduction in government spending and the pick-up in the economy will take the budget back into balance between fiscal 2018 and 2019. All that’s needed is some extra bridging finance until then.

This argument is probably unrealistic. Trump wishes to stimulate the American economy at or close to the top of the credit cycle. The intention is good, reducing the state’s share of the economy, along with the tax burden on the productive private sector. That way leads to genuine wealth creation. But it requires the government to deliver a dramatic reduction in its costs, concurrently with tax cuts and any state-financed infrastructure spending. To achieve both at the same time is as difficult as getting a democratically-elected Mexican government to imprison its own citizens by taxing them to build a wall.

Given Trump’s economic plan requires at the very least a continuance of the current rate of government borrowing, it hinges on whether the banks are prepared to increase their investment in Treasuries, at a time of rising interest rates. The excess reserves are available for the banks to extend the necessary credit, but they have already been extending increased levels of bank credit to the private sector throughout 2016. Given the US economy is at a late stage in the credit cycle, both private and government sectors are competing for funds. This is the path to accelerating price inflation, and yet higher interest rates.

If funding is short-term and gives the banks a reasonable spread above the Fed funds rate on their excess reserves, of course, bank credit will be expanded to accommodate the government. However, when the Fed raises interest rates, the interest demanded by commercial banks on buying T-bills and Treasuries will also rise, forcing bond prices down over the maturity spectrum.

So much for the hope that interest rates will remain permanently low. Future expansion of bank credit coincides with escalating demand for energy and industrial commodities from China, giving an underlying drive to global price inflation. Even if the Fed manages to finesse the transition to rising interest rates without a systemic crisis being triggered, it is unlikely the ECB will be as lucky. Also, Japan’s NIRP must come to an end, as she is directly affected by China’s economic prospects, being integral to her supply chain. Presumably, both the ECB and the BoJ will attempt to cautiously raise interest rates from NIRP through ZIRP, while nursing insolvent banks, and in the former case, governments as well.

So dire has the situation in the Eurozone become, that it could easily face a financial crisis just through the passage of time, without the ECB increasing interest rates at all. The politics are nudging events in that direction. The irony is the Chinese and Russian banking systems are the best placed to survive a financial and systemic crisis originating in the Eurozone or the US, through relatively low counterparty exposure. But then that was likely to have been the strategic intention from the outset, a point completely missed by western commentators who assume that systemic risks are most likely to emanate from China.

Before Trump was elected, the Western financial system already faced a combination of threats from rising price inflation, rising nominal interest rates and unproductive debt. His plans will only make the situation worse. The realisation that this is so, and that it is fruitless to think Trump can implement his plans when the government is already insolvent, will begin to dawn on capital markets sooner or later. Perhaps the ides of March will mark the beginning of that process. The gold price could fulfil the roll of the soothsayer, not ahead of the fateful day, but afterwards.


Strange!! Bitcoin rises above 1300.00 dollars USA per coin and much higher than gold

(courtesy zero hedge)

Bitcoin Soars Above $1300 For First Time Ahead Of SEC Decision

With the SEC decision to approve a Bitcoin ETF looming, the payrolls data-inspired weakness in the USD appears to have sparked a sudden panic bid in Bitcoin, spiking the virtual currency to $1305 – new record highs.

Hard to say if someone ‘knows’ something about the SEC decision or this is a kneejerk to the dollar drop…

Additionally, as Bloomberg points ut, BitMEX, a bitcoin platform, is offering members the ability to place bets using the digital currency on whether the Winklevoss Bitcoin Trust (COIN) will be approved by the SEC. Based on the betting, the ETF has a 45% chance of approval. Odds started at about 33% a month ago and jumped to 70% last week before fading. The lawyer who worked on the initial application said it’s unlikely to get approved, while some analysts call it a “coin toss.”


Your early FRIDAY 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  6.9160( DEVALUATION SOUTHBOUND   /OFFSHORE YUAN NARROWS  TO 6.9074/ Shanghai bourse DOWN 3.98 POINTS OR .12%   / HANG SANG CLOSED UP 67.11 POINTS OR 0.29% 

2. Nikkei closed UP 286.03 POINTS OR 1.48%   /USA: YEN RISES TO 115.40

3. Europe stocks opened ALL IN THE GREEN      ( /USA dollar index FALLS TO  101.84/Euro UP to 1.0609


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  49.49  and Brent: 52.47

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.447%/Italian 10 yr bond yield UP  to 2.316%    

3j Greek 10 year bond yield RISES to  : 7.20%   

3k Gold at $1296.90/silver $16.87(8:15 am est)   SILVER  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 18/100 in  roubles/dollar) 59.09-

3m oil into the 49 dollar handle for WTI and 52 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.


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0121 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0738 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +.447%

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 2.602% early this morning. Thirty year rate  at 3.187% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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


S&P Futures, Global Stocks Jump Ahead Of US Payrolls As Global Bond Rout Continues

European and Asian shares rise along with a jump in S&P futures which are pointing to a solidly green open on US payrolls day. The dollar, trading somewhat weaker against the euro was stronger against the yen, and was on track for its firth week of gains, while the rout in global Treasuries continued following a Mario Draghi conference that was interpreted as more hawkish than expected.

Today’s key event is the February nonfarm payrolls, where consensus expects a solid gain of 190,000 jobs after Wednesday’s blockbuster ADP report, and with whisper expectations around 220,000, the number can at most disappoint as previewed earlier, especially in the closely followed average hourly earning dataset which will provide details about the pace of future Fed rate hikes. A tighter labor market, stock market boom and rising inflation amid a strengthening global economy have left some economists expecting that the Fed, whose March rate is seen by the market as a 100% probability event, could increase interest rates much faster than is currently anticipated by financial markets.

Consensus calls for an increase of 193K jobs in February, with the unemployment rate falling to 4.7% from 4.8%. Much of the focus could be on average hourly earnings for signs of inflationary pressure. Last month, average hourly earnings disappointed with Y/Y wage growth slowing to 2.5% from 2.9%. This month, average hourly earnings are expected to pick up to 2.7% Y/Y with monthly growth of 0.3%.

“Global and local inflationary pressures could soon make markets reprice Fed rate hike expectations going into 2018 and beyond, which we think would be bullish for the USD,” said Morgan Stanley forex strategists in a note to clients.

While the dollar index was little changed, the euro extended its overnight gains on read throughs into the ECB’s Thursday announcement which is being interpreted as more hawkish than expected. The euro, and the regional banking index, enjoyed a lift after European Central Bank head Mario Draghi’s suggestion on Thursday it was less necessary to prop up the market through ultra-loose monetary policy.  Indeed, optimism about an economic recovery in Europe gaining traction helped the European equity indexes claw back much of their weekly losses. The Stoxx 500 index rose 0.4 percent helped by financials and energy shares. Shares of European banks rose nearly two percent to their highest in more than a year while BT Group jumped more than 4 percent after the telecoms giant after ending a two-year row with the UK regulator.

In commodity markets, crude prices inched up after dropping to their lowest in more than three months in the previous session on worries about a global supply glut. U.S. West Texas Intermediate crude was up 0.5 percent while Brent crude rose 0.4 percent. Gold fell below the key level of $1,200 an ounce on Friday and was on track for its worst week in four months, pressured by a stronger dollar.

In the all important rates market, the yield on the 10Y Treasury continued to rise and were at the post-election high of 2.61%. That is the first time that Treasuries have closed above 2.600% since September 2014 although on an intraday basis yields did hit 2.639% back in December last year.  As a reminder, Bill Gross has predicted that a yield of 2.60% will start a bear market, should it hold on a weekly basis. The selloff in US paper is approaching historic proportions, with the losing streak in US Treasuries now the longest in 43 years. As discussed yesterday, following yesterday’s close, Treasury yields had risen for 9 straight days, the longest streak of losses since April 1974. A red close today would extend the losing streak to 10 days.


The yield on the 10-year German bund jumped six basis points to 0.421 percent, while the German long-end has seen the 30Y rise to the highest since January 2016, leading to substantial absolute value losses for those who bought duration last summer, with P&L losses approaching 20%. 10y Bund yields ended Thursday 5.6bps higher at 0.421% and so putting them to within just 6bps of the 2017 high. Similar maturity yields in France (+5.8bps), Netherlands (+4.3bps), Italy (+5.7bps), Spain (+2.8bps) and Portugal (+3.7bps) were up a similar amount.

Bulletin Headline Summary from RanSquawk

  • European equites trade higher with financial names supported in the wake of yesterday’s ECB announcement
  • The bullish USD tone is hard to ignore, however focus lies ahead for the US jobs data
  • Highlights include US nonfarm payrolls and Canadian employment change

Market Snapshot

  • S&P 500 futures up 0.3% to 2,374.00
  • STOXX Europe 600 up 0.5% to 374.56
  • MXAP up 0.5% to 144.10
  • MXAPJ up 0.3% to 462.77
  • Nikkei up 1.5% to 19,604.61
  • Topix up 1.2% to 1,574.01
  • Hang Seng Index up 0.3% to 23,568.67
  • Shanghai Composite down 0.1% to 3,212.76
  • Sensex up 0.04% to 28,939.97
  • Australia S&P/ASX 200 up 0.6% to 5,775.62
  • Kospi up 0.3% to 2,097.35
  • Brent Futures up 0.6% to $52.49/bbl
  • German 10Y yield rose 1.5 bps to 0.441%
  • Euro up 0.4% to 1.0617 per US$
  • Brent Futures up 0.6% to $52.49/bbl
  • Italian 10Y yield rose 5.8 bps to 2.312%
  • Spanish 10Y yield rose 0.6 bps to 1.845%
  • Gold spot down 0.3% to $1,197.32
  • U.S. Dollar Index down 0.08% to 101.77

Top Overnight News

  • Alere’s Arriva Loses Bid to Restore Medicare Billing Rights
  • A U.S.-Mexico Trade Dispute Wouldn’t Derail Ingredion, CEO Says
  • Acorda Wins Rulings That Uphold Four Patents for Ampyra Drug
  • Iron Ore Rally Starts to Crack as Capital Economics Sees $45
  • CIT Reaches Pact to Sell 30% Stake in TC-CIT Aviation JV
  • Boeing Paid Air India $328 Million on Dreamliner Delivery Delays
  • Citigroup Names Biller Head of Asean Corporate, Investment Bank
  • Legg Mason to Set Up Dublin Operation in Response to Brexit
  • MGM Said in Talks to Pay Over $1 Billion for Cable Channel Epix

Asia closed largely in the green, following the lacklustre gains on Wall Street where strength in healthcare and financials kept indices afloat. ASX 200 (+0.6%) was led higher by similar outperformance seen in the aforementioned sectors, considering financials account for almost 50% weighting in the index, while Nikkei 225 (+1.5%) was underpinned by a broadly weaker JPY. Elsewhere, Shanghai Comp. (-0.1%) and Hang Seng (+0.3%) were choppy amid a lack of conviction following mixed lending data and after the PBoC refrained from liquidity operations for a 2nd day, while KOSPI was supported after President Park’s impeachment was upheld as expected which was viewed as the more politically-stable outcome. 10yr JGBs shrugged off the selling in its global counterparts and positive risk appetite in Japan, to trade with mild gains amid the BoJ in the market for a total of JPY 1tIn in government debt. PBoC Governor Zhou stated that monetary policy is currently neutral and prudent, while he added the PBoC has plenty of tools. Governor Zhou also stated that chaos is seen in China’s asset management sector and talked about raising financial sector regulation.

Top Asian News

  • PBOC’s Zhou Sees Relatively Stable Yuan Even as Fed Hikes Loom
  • China’s ‘Stable, Solid’ Yuan Faces Five Key Threats in 2017
  • India Feb. Passenger Vehicle Sales Rise 9% Y/y to 255,359 Units
  • Singapore Eases Property Curbs After Housing Prices Decline
  • CSRC Fines, Confiscates 1.2b Yuan in Two Stock Connect Cases
  • China-Korea Tensions Spread to Air Travel as Some Flights Halted
  • Deadly Dispute at Auto Giant Highlights India’s Jobs Malaise
  • Musk Bets He Can Fix Aussie Power Woes in 100 Days or It’s Free
  • Hitachi Plans to Bid for U.S. Streetcar, Light-Rail Projects

European bourses are also trading higher driven by European bank stocks on optimism the ECB’s hawkish turn will boost local bank NIMs even as newsflow remains particularly light. European financial names are performing well after yesterday’s ECB meeting, Commerzbank are trading higher by 2.9%. In stock specific news, BT (BT/A LN) are performing well after Ofcom reached an agreement with the Co. to separate its Openreach brand away from the main company. Energy companies are also outperforming this morning after softness earlier in the week, however with the energy complex itself remaining under pressure and failing to retake the USD 50/bbl level to the upside. Elsewhere, fixed income markets are trading lower alongside the upside in European equities with peripheral paper tighter to that of the German benchmark in the wake of yesterday’s ECB meeting, although attention for the periphery will also be on the Spanish supply announcement later today.

Top European News

  • U.K. Loses Momentum as Factories, Builders Reduce Output
  • Aberdeen CEO Says He’ll Focus on External Affairs After Merger
  • William Hill’s Bowcock Beats Off Competition to Land CEO Job
  • Repsol Shares Jump After Making Giant Oil Discovery in Alaska
  • UBS Reduces Bonus Pool, Ermotti Pay in ‘Challenging Year’
  • M&G Said to Auction $862 Million of European ABS in Unwind
  • PPG’s Biggest Deal Proves Hardest as New Offer for Akzo Seen
  • Saab Targets Submarine Sales Jump as Russia Tensions Lift Demand

In currencies, the dollar was little changed as measured by the Bloomberg dollar index, holding in the middle of a narrow daily range as momentum stalled after the greenback breached a key technical resistance level at the 55-day moving average. The euro rose 0.4 percent to $1.0583, paring a gain that took it above $1.06. The yen slipped to 114.943 per dollar. South Korea’s won paced losses in emerging-market currencies. The bullish USD tone is hard to ignore, but we also point to some resistance in 10yr Treasury yields, which have stalled ahead of the Dec 2016 highs. USD/JPY has hit a wall at 115.50, but this will not stop the intra day market for pushing on higher levels given the prospect of a non farm payrolls beat in the wake of the stronger private jobs reported by ADP midweek. Average earnings is the major risk for USD bulls however. There seems to be little joy in expressing this view against the EUR however, with the ECB having relaxed some of their accommodative stance — even if in rhetoric only. UK data this morning has given little cause for a fresh push on the Pound, with manufacturing production lower than expected, but tempered by the view that higher input prices pointed to this dynamic. Trade figures were modestly better than expected, but given the EUR/GBP push higher early on, traders are taking their lead from the current trend here which is dampening Cable trade ahead of 1.2200.

In commodities, WTI crude dropped 2 percent to settle at $49.28 per barrel, the lowest close since Nov. 29. Concerns mounted that OPEC’s output cuts are failing to restrain record U.S. stockpiles, with the post-agreement oil rally evaporating. All London Metal Exchange metals declined as the dollar strengthened ahead of U.S. non-farm payrolls data Friday. Further losses in Gold and Silver as the USD prospects are highlighted today by the US non farm payrolls release. The yellow metal is now through USD1200, but with Treasuries (10y) topping out, support levels are starting to kick in — but tentatively as yet. Silver has taken out USD17.00, but has stabilised since. WTI remains below the USD50.00 level for now, and given the breakout of the range seen over the year so far, specs will be looking for better levels to sell. Fundamentally, supply remains at the core of price determinant with recent comments out of CERA on future production agreements weighing along with recent inventory data. In base metals, Copper is struggling to reclaim USD2.60, with larger gains on the day seen in Zinc and Aluminium. Nickel is underperforming.

Looking at the day ahead, all eyes turn to the February employment report, while the monthly budget statement for February will be released later in the afternoon. Away from the data EU leaders continue their two-day meeting in Brussels this morning.

US Event calendar

  • 8:30am: Change in Nonfarm Payrolls, est. 200,000, prior 227,000; Unemployment Rate, est. 4.7%, prior 4.8%
    • Average Hourly Earnings MoM, est. 0.3%, prior 0.1%; Average Hourly Earnings YoY, est. 2.75%, prior 2.5%; Average Weekly Hours All Employees, est. 34.4, prior 34.4
    • Labor Force Participation Rate, prior 62.9%;  Underemployment Rate, prior 9.4%
  • Monthly Budget Statement, est. $190.0b deficit, prior $51.3b

DB’s Jim Reid concludes the overnight wrap

Watching a block of ice slowly melt was probably slightly more interesting than watching the ECB press conference yesterday and such a statement is a reflection of the relative calm at the central bank at the moment. The best way of me describing where I think the ECB are after yesterday’s meeting is that they are in the ‘sweet spot’ or perhaps in a Goldilocks environment or if you wanted to be more cautious they’re in the calm before the storm. The reason for saying this is that Draghi was able to paint a picture of an encouraging economic rebound without needing at the moment to signal that monetary policy is  in imminent danger of tightening. More challenging communications could come in the second half if growth momentum continues but for now there was an air of calm and indeed according to our colleagues an element of ‘selfcongratulation’ in detailing the successes of monetary policy! With the ECB seeing little signs of core inflation being a worry at the moment the conclusion was that a “very substantial degree of monetary accommodation” was still needed. Our economist’s baseline expectation has not changed. They think tapering is announced in September and implemented from January. The risks are skewed towards a June announcement, but this can only happen if no political risks materialize, the surveys are right about the pace of GDP growth (that is, the real data convergences up to the level implies by surveys) and core inflation surprises to the upside in the next few months.

Although we thought the meeting was fairly dull it did seem to further pressurise global bond yields yesterday. 10y Bund yields ended 5.6bps higher at 0.421% and so putting them to within just 6bps of the 2017 high. Similar maturity yields in France (+5.8bps), Netherlands (+4.3bps), Italy (+5.7bps), Spain (+2.8bps) and Portugal (+3.7bps) were up a similar amount with those moves then also extending across the pond with 10y Treasuries finishing 4.6bps higher at 2.605%. That is the first time that Treasuries have closed above 2.600% since September 2014 although on an intraday basis yields did hit 2.639% back in December last year. Yesterday’s selloff also means that 10y Treasuries have weakened for 9 consecutive sessions which is the joint longest run since March 2012. Amazingly the last time Treasuries sold-off for longer was all the way back in April 1974. It’s worth highlighting that the selloff in bonds was largely concentrated at the mid to long end of the curve. In fact 2y Bund yields actually ended the day down 1.2bps at -0.882% reflecting perhaps the fact that the ECB stopped short of voicing any concerns about scarcity issues. Meanwhile in FX the Euro firmed up +0.34% but it was another rough day for EM currencies and particularly commodity-sensitive ones. The Russian Ruble (-1.87%), South African Rand (-1.49%) and Brazilian Real (-0.68%) were amongst those to weaken as WTI Oil at one stage plunged below $49/bbl. It did recover slightly but still finished down -1.99% at $49.28/bbl for the lowest close since November 29th which was also the day prior to OPEC approving supply cuts. There wasn’t actually any new news yesterday and instead it appeared to just be a reflection of the continuing fallout from that US supply data on Wednesday which is reigniting concerns about global supply and demand rebalancing again.

It wasn’t just Oil that fell in the commodity complex though with Gold (-0.59%) at one stage also tumbling below $1200 for the first time since the start of February. Copper (-1.31%) also fell for the sixth day in a row. All that said, equities again proved to be relatively resilient. In Europe the Stoxx 600 recovered from early losses to close up +0.08% despite the energy and materials sectors doing their best to drag the index lower. Instead it was the post-ECB rally for European Banks (+1.11%) which led gains. The S&P 500 (+0.08%) closed up with an identical gain following a late bounce into the close after being down as much as -0.60% from the early highs following some suggestions that President Trump supported the restoration of Glass-Steagall. US credit did however weaken reflecting perhaps the bigger energy exposure. CDX IG ended 0.5bps wider. It’s worth highlighting that in cash terms US HY energy spreads were 12bps wider yesterday and so making them 35bps wider this week. You have to go back to the first week of November to find the last time spreads moved this much in one week (37bps that week).

Before we look at what markets are doing this morning, it’s taken us a while to get there but the main event today is almost certainly likely to be the February employment report in the US this afternoon. Both our economists and the market are expecting a 200k print. Given the bumper 298k ADP print on Wednesday though we’d imagine that the whisper number is on balance higher than the consensus. Our US economists made an interesting point also in that the initially-reported headline February payroll gain has exceeded the consensus forecast by an average of 47k in recent years. As always keep an eye on the other employment components including the unemployment rate (consensus is for a one-tenth improvement to 4.7%), average hourly earnings (+0.3% mom expected) and participation rate.

To Asia now where markets are ending the week on a fairly mixed note. While the Nikkei (+1.33%), ASX (+0.60%) and Kospi (+0.21%) are up, the Hang Seng (-0.21%) is lower while bourses in China are little changed. WTI Oil (+0.57%) has recovered a bit but still remains below $50/bbl, while bond yields in Asia are generally higher. There has been a bit of newsflow this morning. In South Korea Park Geun-hye has been stripped of his presidency following a corruption scandal. The Korea Won hasn’t really reacted to the news however. Meanwhile in China the PBOC’s Zhou said to the National People’s Congress that he expects the Yuan to be relatively stable this year in spite of his expectation of wider FX vol in the face of rising rates.

Back to Europe yesterday DB published a comprehensive multi-asset analysis of the French elections. Six separate reports cover (i) economics and politics, (ii) currencies, (iii) government bonds, (iv) French banks, (v) European equities and (vi) equity derivatives. These documents have been summarised in a single report “French elections: An investor guide”. Please use links in the overview document to access the in-depth publications.

The note(s) discuss how Europe is going through its worst existential crisis in sixty years. Opinion polls suggest that France though is more likely to elect a Europefriendly candidate rather than National Front leader Marine Le Pen. If polls turn out to be right German government yields would likely increase and France’s and Italy’s spreads narrow. European banks could outperform materially led by the French banks. Electing Le Pen would deepen the existential crisis for the euro area even before knowing whether the new president would (a) manage to hold a referendum on Europe and (b) win it. The macro and multi-asset outlook would depend on the interaction between the Presidential and legislative elections. A President Le Pen would still face material institutional and constitutional hurdles. With Le Pen as a president we see a one-in-three chance of a euro referendum. If a euro referendum is called, capital flight, contagion to peripherals and market stress are likely to ensue. Government spreads in France would widen above – and in Italy in line with – the respective levels seen during the euro-area sovereign crisis. In this case, we expect the ECB to play a constructive role in avoiding a disintegration of the common currency area in the short run.

Wrapping up now what was a pretty quiet day for data yesterday. In the US initial jobless claims printed at 243k which is up 20k from that 44-year low print the week prior. The four-week average is now at 237k. Meanwhile the import price index printed at a slightly higher than expected +0.2% mom in February (vs. +0.1% expected). In Europe and away from the ECB the only data came from France where the Bank of France business sentiment reading was revealed as rising 2pts last month to 104 (vs. 102 expected).

Looking at the day ahead, this morning in Europe the early data comes from Germany where the January trade data and Q4 labour costs data is released. French industrial production follows before we then  get the UK industrial production data and the January trade numbers. This afternoon in the US all eyes turn to the aforementioned February employment report, while the monthly budget statement for February will be released later in the afternoon. Away from the data EU leaders continue their two-day meeting in Brussels this morning.


i)Late  THURSDAY night/FRIDAY morning: Shanghai closed DOWN 3.98 POINTS OR .12%/ /Hang Sang CLOSED UP 67.11 POINTS OR 0.29% . The Nikkei closed UP 286.03 POINTS OR 1.48% /Australia’s all ordinaires  CLOSED UP 0.35%/Chinese yuan (ONSHORE) closed DOWN at 6.9160/Oil ROSE to 49.49 dollars per barrel for WTI and 52.47 for Brent. Stocks in Europe ALL IN THE GREEN ..Offshore yuan trades  6.9074 yuan to the dollar vs 6.9160  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS CONSIDERABLY/ ONSHORE YUAN WEAKER AS IS THE OFFSHORE YUAN  COUPLED WITH THE SLIGHTLY WEAKER DOLLAR. CHINA SENDS A MESSAGE TO THE USA NOT TO RAISE RATES


South Korea’s President Park has been removed from office after their court upholds impeachment:

(courtesy zero hedge)

South Korea’s President Has Been Removed From Office After Court Upholds Impeachment

South Korea’s constitutional court has voted unanimously, 8-0, to uphold the impeachment of President Park Guen-hye, removing her from office after a 92-day leadership crisis and triggering a presidential election in the weeks to come. A snap election my be held within 60 days.

The ruling, which was announced by the court’s acting chief and televised live, made Park the nation’s first democratically elected leader to be ousted. She was impeached by parliament on Dec. 9 on charges of letting a close friend meddle in state affairs, colluding with her to extort money from conglomerates, and neglecting her duties during a 2014 ferry sinking that killed more than 300.

The court’s decision strips Park of her immunity from criminal prosecution, which will force her to undergo interrogation by prosecutors over her alleged crimes.

President Park Geun-hye (R) and Lee Jung-mi, acting chief of the Constitutional Court

“The Constitutional Court’s decision is equivalent to demanding legal accountability for President Park’s failure to properly run state affairs,” said Yang Seung-ham, honorary professor at Seoul’s Yonsei University. “Now the public should accept the ruling.”

The nation has been sharply divided along ideological and generational lines since the scandal broke in October, pushing millions of people into the streets to rally for or against the impeachment.

Park’s problems began in October, when revelations emerged about the influence Park’s confidante and adviser Choi Soon-sil had over the President. Choi is currently on trial for abuse of power and fraud. What followed later was 5 months of at times sheer chaos (see full timeline below) culminating with today’s decision.

Local media and opposition parties had accused Choi of abusing her relationship with the president to force companies to donate millions of dollars to foundations she runs. She denies all charges against her.

Hundreds of thousands of South Koreans braved the brutally cold winter temperatures to take to the streets of Seoul and call for Park’s ouster.

In a brief televised apology however, Park made it clear that she had no intentions of resigning. In December, the National Assembly voted 234 to 56 to impeach her.

Park was impeached in December after being accused of corruption. She is alleged to have let her close confidante Choi Soon Sil meddle in state affairs and conspired with her to extort money from major companies including Samsung.

Local pundits cited by Yonhap said the court’s decision demonstrated that South Korea’s democratic system is firmly in place. “We have undergone a process of resolving considerable conflict and differences in a predictable manner through legal procedures stipulated in the Constitution,” said Park Myoung-kyu, a sociology professor at Seoul National University. “Now is the time to calm down and turn (the conflict) into policy debates and arguments.”

The president’s supporters and detractors rallied outside the court as police officers and police buses were deployed to prevent a possible clash.

* * *

Below is the full timeline of the Park scandal:


24 – South Korean cable TV network JTBC reports that Park’s longtime friend Choi edited some of the president’s speeches. Prosecutors were already investigating claims that Choi had used her relationship with Park to raise funds for two foundations.
25 – Park apologizes on national television, saying Choi had access to dozens of presidential speeches before they were made public.
29 – Thousands of anti-government protesters gather in Seoul, calling for Park’s resignation. Organizers estimate the crowd at 20,000; police put attendance at 9,000.
31 – As Choi arrives at the prosecutors’ offices, following a two-month stay in Germany, she apologizes, saying she has committed “an unpardonable crime.” Late that night, prosecutors place Choi in emergency detention.


1 – Prosecutors raid the offices of eight banks. Choi is suspected, among other things, of getting preferential treatment from local banks for loans.
2 – Park nominates a new prime minister, Kim Byong Joon, a member of an opposition party, in a bid to quell the controversy.
3 – A South Korean district court issues an arrest warrant for Choi. Kim, the prime minister-designate, says Park could be investigated, saying, “Everyone is equal before the law.”
4 – Park again apologizes on TV, saying she will cooperate in the investigation.
5 – Thousands of protesters take to the streets of Seoul to demand Park’s resignation. Organizers say about 100,000 people participate; police put the number at 40,000.
6 – Prosecutors issue warrants for two of Park’s former aides, AnChong Bum and Jeong Ho Seong, who both resigned the previous week. Prosecutors continue to question Choi.
8 – Prosecutors search the offices of electronics giant Samsung. Park says she will withdraw her nominee for prime minister.
12 – The biggest protest yet takes place near the presidential palace in Seoul. Organizers say 500,000 people participate; police put the number at 190,000. Protests are planned in 40 other cities in South Korea and abroad.
13 – Prosecutors say they plan to question Park.
17 – South Korea’s parliament passes a bill to open up an independent enquiry into Park’s friendship with Choi. The legislation seeks 60 investigators and a special prosecutor to lead the case.
19 – Protestors again gather in Seoul.
20 – Prosecutors say Park is likely to have played a role in the corruption scandal but that they cannot indict her, as the country’s constitution guarantees the president immunity “except in cases of insurrection or treason.”
21 – The country’s largest opposition party says it will take steps to begin impeachment proceedings against Park.


1 – South Korea’s ruling party pushes for Park to resign in April, saying presidential elections planned for the end of 2017 could be brought forward to June.
2 – The country’s three opposition parties say they will vote December 9 on impeachment, even if Park announces a plan to resign. Park plans to meet with members of her own ruling party over the weekend.
3 – Hundreds of thousands of demonstrators march within 100 metres of Park’s official residence.
6 – Park says she won’t immediately resign if impeached. Five thousand South Koreans file a lawsuit demanding compensation from Park for mental suffering caused by the scandal.
9 – Lawmakers including members of her own party vote to impeach Park
16 – In a 24-page document, Park’s lawyers argue that there is no legal foundation for her removal.
19 – Park’s influential friend Choi Soon Sil goes on trial on charges of abuse of authority and attempted fraud.


3 – The first open hearing in Park’s impeachment trial is held. As expected, she does not attend.


17 – Samsung heir Lee Jae Yong is arrested over bribery allegations linked to the corruption scandal.


9 – Lee denies bribing Park and Choi on the first day of his trial
10 – The Constitional Court upholds Park’s impeachment


none today


China finally admits that it has a debt problem.  Right now total Chinese debt to GDP is around 277% and by next year it should approach 300% and thus close to a Minisky moment.  China is raising rates trying to cool its inflation in housing and  other commodities.

(courtesy zero hedge)


China Central Bank Admits It Has A Debt Problem, Warns No Easy Solution

It’s a well-known risk, perhaps the biggest to the global financial system: China’s debt is too high, with estimates ranging from 250% to 300% of GDP per the IIF:

And while China has largely ignored, or avoided, discussing the troubling implications of its unprecedented debt load, this changed today when the head of China’s central bank, Zhou Xiachuan finally admitted that it has a debt “problem” saying that corporate debt levels are too high and that “it will take time to bring them down to more manageable levels”, underlining what has become the defining battle to put the world’s second-largest economy on a more sustainable footing: keeping GDP growing at 6.5% (or above) while injecting trillions in new debt.

“Non-financial corporate leverage is too high,” PBOC Governor Zhou Xiaochuan told reporters at a news conference on the sidelines of the annual parliament session.

Quoted by Reuters, he said that efforts will be made to contain debt levels, including restructuring of firms with heavy debt burdens, alongside a push to reduce excess industrial capacity.  Furthermore, banks will withdraw support for financially unviable firms, he added, repeating pledges by other officials last year to drive such “zombie” firms out of the market.

“I personally think this process is relatively medium-term. It won’t have very obvious results in the short-term because the existing stock (of debt) is very large,” he said.

Zhou Xiaochuan, Governor of the People’s Bank of China, attends a news

conference in Beijing China March 10, 2017. REUTERS/Jason Lee

Zhou also said that measures by local governments to cool rising house prices will slow mortgage growth to some degree, but housing loans will continue to grow at a relatively rapid pace. We profiled China’s mortgage debt problem last October when we showed that over 70% of all new loans went to fund mortgages, which in turn now account for a fifth of total Chinese outstanding loans.

According to official data, China’s debt-to-GDP has risen to 277%, up nearly 25% since the end of 2016 when it was 254%, with an increasing share of new credit being used to pay debt servicing costs, UBS analysts said in a note. In other words, China now finds itself in the “ponzi financing” stage of its debt lifecycle, with a “Minsky Moment” approaching fast. 

China’s credit growth has been “very fast” by global standards, and without a comprehensive strategy to tackle the overhang, there is a growing risk it will have a banking crisis or sharply slower growth or both, the IMF warned late last year.

While China’s leaders have pledged to contain debt and housing risks in 2017 after years of credit-fueled expansion, which has been propelled by the need to meet official economic growth targets, this has proven to be problematic with expectations that China will have to issue over $3 trillion in debt in the coming year, and as a result most analysts remain doubtful over the government’s commitment to follow through on potentially painful reforms, especially if growth falters.

Despite his dour admission, according to Reuters Zhou, who took control of the PBOC in 2002 and is the under the radar architect of China’s financial reforms, was seeimingly in a very good mood, smiling and engaging with the deputy governors beside him as well as news journalists throughout  the news conference.

China’s corporate debt has soared to 169 percent of gross domestic product (GDP), according to figures from the Bank for International Settlements. China needs to first stabilize its overall debt levels before gradually reducing them, deputy central bank governor Yi Gang said at the same briefing.

* * *

Perhaps more troubling to China’s liquidity addicts, Zhou said that the central bank’s tilting towards a neutral stance would help with China’s supply-side reforms, reiterating that it would be “prudent” while reminding markets that the central bank has many policy tools at its disposal. In recent months, the PBOC has cautiously moved to a modest tightening bias in a bid to cool explosive growth in debt and discourage speculative activity, though it is treading cautiously to avoid hurting economic growth. It surprised financial markets by raising short-term interest rates in January and February by marginal amounts, and is expected to bump them higher in coming months, though an increase in its benchmark policy lending rate is seen as unlikely this year.

Over the weekend, Beijing set a more modest economic growth target of “around 6.5%” this year, easing from last year’s 6.5-7 percent range, ostensibly to give policymakers more room to focus on financial risks. The economy ultimately expanded 6.7 percent last year, but much of the growth came from record lending by state banks and higher government spending on infrastructure, which has helped revived the long ailing and heavily indebted industrial sector.

Still, despite promises of deleveraging, Beijing’s trajectory remains much of the same: bank lending in January was the highest on record and it did not slow as much as expected in February.

“If there is too much money in the economy, in fact it is very harmful to the economy as it might lead to problems such as higher inflation and asset price bubbles,” Zhou said.

While admission of the problem is a key first step, few have any faith that China will take the necessary, and very painful, next steps to remove the debt froth that has kept not only China, but the global growth dynamo turning, especially now that the global credit impulse, as UBS demonstrated two weeks ago, has tumbled and is on the verge of turning negative.

Our global credit impulse (covering 77% of global GDP) has suddenly collapsed: as the chart below shows the ‘global’ credit impulse over the last 18 months is essentially mainly China (the green shaded bit), which even now is still creating new credit at an annualized rate of around 30pp of (Chinese) GDP. But the credit impulse is the ‘change in the change’ in credit and even the Chinese banks could not sustain the recent extraordinary pace of credit acceleration. As a result: whereas back in Jan ’16 the global credit impulse was positive to the tune of 3.8% of global GDP (of which China comprised 3.5% of global GDP) it has now fallen back to -0.1% of global GDP (China’s contribution is -0.3% of global GDP).

Should the impulse turn negative outright, the transition would have dire implications for the global growth, and reflation, cycle.




Bloomberg reports that there has been discussions within the ECB that they are considering raising rates prior to the end of QE due to the rising inflationary scenario

up goes gold, up goes the Euro and the bunds tumble again.

(courtesy zero hedge)

Euro Surges, Bunds Tumble On Report Draghi Considering Rate Hikes Prior To QE End

Update: Reuters chimes in with its own headline, saying the discussion was brief, without broad support.


* * *

The EURUSD spiked, European stocks faded gains, and German Bund futures tumbled to session lows following B loomberg report that the ECB has discussed whether the central bank can hike rates before the end of QE.

As Bloomberg further adds, ECB policy makers considered the question of whether interest rates could rise before their bond-buying program comes to an end, and notes that the central bank’s Governing Council on March 9 “exchanged views on ways of communicating and sequencing an exit from unconventional stimulus.”

That said, Bloomberg’s sources notes that the council didn’t discuss any specific scenario or timeline and hasn’t made any formal decisions on a strategy. An ECB spokesman declines to comment on the rumor. Bloomberg further adds that the ECB Governing Council currently “expects the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases.”

While the report may be merely the latest trial balloon to gauge the market’s response, for the now the market is not taking chances, and has aggressively sold off the German bunds, while paring gains on the Stoxx 600 to only 0.2% on the day: Bund futures tumbled to session low of 159.10 on the news, sending the Bund yield to 0.48%, while Schatz futures likewise drop sharply and the Euribor strip steepens in expectation of future ECB rate hikes.

As to the mechanics of just how the ECB hikes rates while continuing to buy bonds, we eagerly look forward to the details.



This is fascinating: the state department urges the coroner to keep Churkin’s cause of death secret.

(courtesy zero hedge)

State Department Urges Coroner To Keep Russian UN Ambassador’s Cause-Of-Death Secret

Following the unexpected death of 65-year-old Russian ambassador to the United Nations Vitaly Churkin, conspiracy theorists were stirred up as the ongoing Russophobic Deep State war combined with the deaths of nine Russian diplomats in the last year raised many coincident-questioning eyebrows. Now, as The Hill reports, pouring further fuel on that fire, the State Department asked the New York Medical Examiner not to publicly release information about Churkin’s cause of death.

“In order to comply with international law and protocol, the New York City Law Department has instructed the Office of Chief Medical Examiner to not publicly disclose the cause and manner of death of Ambassador Vitaly Churkin, Permanent Representative of the Russian Federation to the United Nations,”  Office of Chief Medical Examiner spokesman Julie Bolcer said, according to New York Times reporter Michael Grynbaum.


“As outlined in formal requests from the United States Department of State, Ambassador Churkin’s diplomatic immunity survives his death. Further questions concerning this matter should be directed to the United States Department of State.”

Initial reports suggested that there was no foul play involved in the incident and that Churkin died from cardiac arrest, but, as a reminder, Churkin was not alone among Russian diplomats who died of ‘heart attacks’:

1. You probably remember Russia’s Ambassador to Turkey, Andrei Karlov — he was assassinated by a police officer at a photo exhibit in Ankara on December 19.


2. On the same day, another diplomat, Peter Polshikov, was shot dead in his Moscow apartment. The gun was found under the bathroom sink but the circumstances of the death were under investigation. Polshikov served as a senior figure in the Latin American department of the Foreign Ministry.


3. Russia’s Ambassador to the United Nations, Vitaly Churkin, died in New York this past week. Churkin was rushed to the hospital from his office at Russia’s UN mission. Initial reports said he suffered a heart attack, and the medical examiner is investigating the death, according to CBS.


4. Russia’s Ambassador to India, Alexander Kadakin, died after a “brief illness January 27, which The Hindu said he had been suffering from for a few weeks.


5. Russian Consul in Athens, Greece, Andrei Malanin, was found dead in his apartment January 9. A Greek police official said there was “no evidence of a break-in.” But Malanin lived on a heavily guarded street. The cause of death needed further investigation, per an AFP report. Malanin served during a time of easing relations between Greece and Russia when Greece was increasingly critiqued by the EU and NATO.


6. Ex-KGB chief Oleg Erovinkin, who was suspected of helping draft the Trump dossier, was found dead in the back of his car December 26, according to The Telegraph. Erovinkin also was an aide to former deputy prime minister Igor Sechin, who now heads up state-owned Rosneft.

If we go back further than 60 days…

7. On the morning of U.S. Election Day, Russian diplomat Sergei Krivov was found unconscious at the Russian Consulate in New York and died on the scene. Initial reports said Krivov fell from the roof and had blunt force injuries, but Russian officials said he died from a heart attack. BuzzFeed reports Krivov may have been a Consular Duty Commander, which would have put him in charge of preventing sabotage or espionage.


8. In November 2015, a senior adviser to Putin, Mikhail Lesin, who was also the founder of the media company RT, was found dead in a Washington hotel room according to the NYT. The Russian media said it was a “heart attack,” but the medical examiner said it was “blunt force injuries.”


9. If you go back a few months prior in September 2016, Russian President Vladimir Putin’s driver was killed too in a freak car accident while driving the Russian President’s official black BMW  to add to the insanity.

If you include these three additional deaths that’s a total of nine Russian officials that have died over the past 2 years that’s Aaron Kesel knows of – he notes there could be more.

*  *  *

So why is the State Department now trying to keep Churkin’s cause of death from the public?




You will see throughout my blog data which suggests yields on all sovereign debt have been rising.  Last year, the world was worried about deflation and what did the bozos do?  They increased their monetary QE.  The result: inflation is coming!!

a very important commentary from John Rubino of Safe Haven:

(courtesy John Rubino/Safe Haven)


2016 Debt Binge Produces (Surprise!) 2017 Inflation. Guess What That Means For 2018?

By: John Rubino | Thu, Mar 9, 2017

Just as everyone was finally accepting the idea of deflation and negative interest rates, inflation decides to pay a return visit. In the past day, articles with the following headlines appeared in major publications around the world:

Swiss inflation rises at highest monthly rate in 5 years
China February producer inflation fastest in nearly nine years
Year-over-year import prices at highest level in five years
ECB keeps bond-buying, rates unchanged amid inflation flare-up
Food inflation doubles in a month as UK shoppers start to feel the pinch

What happened? Well, towards the end of 2015 most of the world’s major governments apparently got spooked by deflation and decided to ramp up their borrowing and money creation. China, for instance, generated the following stats in 2016:

  • New loans totaling 12.65 trillion yuan, or $1.8 trillion.
  • M2 money supply growth of 11%.
  • Debt-to-GDP ratio jump from 254% to 277%.

In Europe, the European Central Bank ramped up its bond buying program, pumping about a trillion newly-created euros into the Continental economy:

European Central Bank Bond Buying

And the US increased its federal government debt by over $1 trillion, presumably spending the proceeds on things that raise wages or increase the demand for commodities.

Federal Debt closed 2016 at $19,573,444,713,936.79

Since there’s no way for the growth of global production to match this blistering pace of new money creation, the result is higher prices for just about everything. Oil and most other industrial materials are more expensive, wages are rising, long-term interest rates (the cost of money) are up; you name it, it went up in the past year.

What comes after a debt-driven spike in inflation? History is pretty clear on this one: instability, as rising interest rates spook the fixed income markets and rising business costs spook stock speculators. Toss in global political upheaval as populism (the inevitable result of previous bad policies) sweeps the globe, and the “Great Moderation” of the past year – which was as it turns out just a bunch of clueless people borrowing a ton of money – will give way to something a lot more interesting.

The only amusing part of what’s coming will be the disarray among the economists and politicians who have been advocating a higher inflation target, as if a modern economy is a thermostat that can be dialed up and then back down by an omniscient homeowner. As Jim Rickards likes to say, it’s not a thermostat, but a nuclear reactor that can, if allowed to get too far out of balance, go critical.


OPEC and the Saudis are now panicking as they warn the USA shale boys not to assume a production cut extension.  The shale boys do not care, as they will keep on producing oil and hedge production with options

(courtesy zero hedge)

OPEC Panics, Warns US Shale Not To “Assume” Production Cut Extension

All it took for OPEC to panic, was the sharpest drop in oil prices since last summer, sending WTI not only back under $50, but also wiping out all gains since the November Vienna “supply cut” deal.

With the cartel suddenly finding itself in unfamiliar territory, where neither the daily barrage of “flashing red headlines” sparks a headline-scanning algo buying frenzy, nor the alleged production cuts leading to a reduction in inventory (quite the contrary, US commercial stocks just hit a new all time high) OPEC had no choice but to make a  threat to its biggest competitor: US shale companies.

According to Reuters, Saudi energy officials told top independent U.S. oil firms in a closed-door meeting this week that they should not assume OPEC would extend output curbs to offset rising production from U.S. shale fields. The reason for Saudi ire is simple: it is producing less, having shouldered the bulk of OPEC cuts, and yet with prices once again declining, and US shale producers ramping up production, not only are Saudis pocketing less revenue, but they are also are permanently giving up market share to US producers whose production in recent months has soared, especially in the Permian, where breakeven costs are as low as $30 for some producers.

the Permian basin has been leading the increase in horizontal oil rig count (+130%)

As shown before, in addition to generous capital markets which have allowed shale companies, even those on the verge of obtain relatively easy financing, the biggest driver of the recent ramp in production have been technological gains, which have slashed breakeven costs for domestic producers.

Unfortunately for Saudi Arabia, and OPEC, they never considered these two very critical variables. As a result, while oil producers led by Saudi Arabia and top non-OPEC exporter Russia are in an uneasy truce with U.S. shale firms after a two-year price war that sent many shale producers to the wall, the truce is now being violated by the same shale companies which Saudi Arabia launched a massive attack on in late 2014, in hopes of putting the bulk of the space in bankruptcy.

It failed, and now it’s payback time, ironically permitted largely by OPEC’s own actions.

Following last November’s Vienna deal to cut production – which judging by record inventories one can allege never happened – the resulting rise in oil prices has sparked a rush of new output by shale producers, who this week outlined ambitious production growth plans across the United States. That prompted the Saudi to lash out: speaking at an industry conference in Houston, Saudi Arabia’s Energy Minister Khalid al-Falih said that there would be no “free rides” for U.S. shale producers benefiting from the upturn.

According to Reuters, Falih’s senior advisors even went a step further at the meeting on Tuesday evening with executives from Anadarko, ConocoPhillips, Occidental Petroleum, Pioneer Natural Resources, Newfield Exploration and EOG Resources.

“One of the advisors said that OPEC would not take the hit for the rise in U.S. shale production,” a U.S. executive who was at the meeting told Reuters. “He said we and other shale producers should not automatically assume OPEC will extend the cuts.”

The irony, of course, is that shale isn’t “assuming” anything – it is merely producing as it has recently hedged itself for months to come and more importantly, it is profitable to produce at current prices: it is Saudi Arabia who, in a desperate attempt to boost interest and demand for its upcoming Saudi Aramco IPO, had no choice but to concede that its November 2014 decision to temporarily break the cartel was a mistake, and it alone was instrumental in getting last year’s production cut deal together. It’s even more ironic that should OPEC’s production cut deal not be extended into the second half, oil prices will tumble as the Vienna “deal” is promptly forgotten, and the Saudi financial crisis which several months ago sent Saudi financial stocks crashing and bets on Riyal devaluation to all time highs, will quickly come back, backfiring on Riyadh far more than on US shale.  Oh, it also likely means a far lower valuation for the Aramco IPO.

The Saudis, who we recently learned had been colluding with hedge funds to learn about the “speculative” mindset and to gauge why there has been little faith and confidence in OPEC actions, called the meeting to exchange views on the market and to gauge the outlook for shale output, Reuters’ sources said.

After slamming shale companies on Tuesday for their impudence to, well, do their job, Falih then said that global inventories had fallen more slowly than he expected in the first two months of the year, although oil market fundamentals were improving as a result of the curbs. He did not provide an explanation for how it was possible that (allegedly) improving supply and demand dynamics would lead to greater inventory.

Then on Wednesday, as if in a coordinate liquidation, oil prices plunged 5% to lowest levels this year after U.S. crude inventories surged to a record high, in part because of rising output from shale producers. The price drop continued on Thursday. According to one narraitve, the inventory rise stoked concern that the glut could persist because shale supply, along with more output from Brazil and Canada, could offset output cuts by OPEC and some non-OPEC suppliers.

That, of course, makes little sense as inventories had been at record levels for weeks. Far more likely is that speculators, already at record long positions, started selling, and the initial trickle quickly became an avalanche as margin calls went off, prompting even more selling.

Meanwhile, the the EIA announced it expects U.S. oil output to rise 330,000 bpd in 2017, mostly from shale, but some analysts and producers are forecasting the increase could be more than double that amount. In any event, absent another big drop in oil prices, US production will soon surpass its previous all time high in the mid 9 mmbpd range.

* * *

As for OPEC, aside from panicking, it now has few other viable options. The cartel next meets on May 25 in Vienna to discuss supply policy, and is expected to decide there on whether to extend supply curbs implemented at the start of the year. Should oil prices continue to slide, while shale production ramps even higher leading to even greater market share loss for Saudi Arabia, the Kingdom, finding itself in a lose-lose situation, will likely let the production cut lapse and revert to the old “every OPEC member for himself.”

For now however, it’s all smiles: in a joint news conference on Tuesday, Falih, Russian Oil Minister Alexander Novak, Mexican Deputy Secretary of Energy Aldo Flores, Iraqi Oil Minister Jabar al-Luaibi and Secretary-General Barkindo, said they were happy with compliance by the pact’s members so far. Just don’t show them where oil closed today




Rising oil rig counts are certainly causing oil production to rise and that has been going on for 8 straight weeks.  No doubt that the shale boy’s increase in production has killed the production cut rally orchestrated by the Saudis

(courtesy zero hedge)


Rising Rig Count Leads US Shale To Kill Off The OPEC-Driven Oil Price Rally

With US crude inventories at record highs and production surging higher, the ongoing oil rig count rise in America (up 8 to 617 – 8th week in a row and highest since Sept 2015) signals more ‘problems’ ahead for a record level of speculative long positioning in black gold.



Sadly the resurgence in rig counts and production has not created any jobs…

And despite all the jawboning this week by OPEC members (especially the Saudis), WTI is at a $48 handle and testing the lows post-OPEC-deal. As’s Nick Cunningham notes,US Shale has killed off the OPEC-driven oil price rally…

Oil prices plunged on Wednesday and Thursday, dropping to their lowest levels since December when the optimism surrounding the OPEC deal was just getting underway. WTI dipped below $50 for the first time in 2017 on March 9, a two-day loss of more than 8 percent.

The catalyst for the sudden decline in prices was yet another remarkably bearish report from the EIA, which showed an uptick in crude oil inventories by 8.2 million barrels last week. That takes crude stocks to another record high, and it was the ninth consecutive week of inventory builds.

Up until now, oil speculators have taken the unusual increase in crude inventories in stride. Instead of paring back their long positions, hedge funds and other money managers doubled down over the past two months, putting more money into bullish bets, hoping that the OPEC production cuts would outweigh the comeback in U.S. shale.

The result was a shocking level of bullish bets on WTI and Brent, creating a lop-sided position in the futures market. That is not necessarily a problem if market conditions are tightening, as many investors believed, but it begins to look unbalanced if in fact the oil market is still oversupplied.

The pace of adjustment in the physical market for crude oil is starting to drag on, and investors are getting anxious. With so many investors having staked out bullish bets, oil prices are exposed to sharp and sudden corrections if they unwind those positions.

And that may be starting to occur. It was just a matter of time before sentiment shifted, and another week of enormous crude inventory builds might have been a too much to stomach. “When you look at a very visible marker like the weekly U.S. inventories and you see that crude stocks are still rising, then some of these market participants may begin losing a bit of faith in the effectiveness of producer restraint,” Harry Tchilinguirian, head of commodity strategy at BNP Paribas SA, told the WSJ.

The sudden downward shift in WTI below $50 per barrel also suggests that the U.S. shale industry might be ramping up too quickly. This week Continental Resources CEO Harold Hamm warned at the CERAWeek Conference that shale drillers might crush oil prices if spending and production move too high too fast. Noting that shale production could “go pretty high,” Hamm warned that “it’s going to have to be done in a measured way, or else we kill the market.”

Saudi Arabia’s energy minister also warned industry participants at the Houston Conference that his country would not bail out shale drillers if such a situation occurred. It would be “wishful thinking” to expect that Saudi Arabia and OPEC “will underwrite the investments of others at our own expense” by slashing production further, Saudi energy minister Khalid al-Falih said.

The fact that U.S. crude inventories are breaking records every week and oil prices have failed to post any gains so far in 2017 offers some evidence into the notion that the comeback in the U.S. oil industry is undermining the effectiveness of the OPEC deal. OPEC has achieved a much higher compliance rate than the market expected, posting steep cuts in output, yet the market fundamentals are improving at a much slower pace than everyone anticipated. That largely is the result of the sharp uptick in U.S. output, now up nearly 600,000 bpd since last summer.

In the most recent data release alone, the EIA reported an uptick in production by about 56,000 bpd, a large jump for a single week. Production is now up to 9.088 million barrels per day, the highest level in over a year.

(Click to enlarge)

And the pace of growth is surprising the market.“Since the start of 2017 the average U.S. crude oil production growth has been +35 kb/d w/w. That equates to a marginal, annualized growth rate of 1.8 mb/d,” Bjarne Schieldrop, chief commodities analyst at SEB, the leading Nordic corporate bank, said in a statement. That amount of growth is “too much, too early.”

Oil traders have been optimistic regarding prices for several months now, betting that OPEC would accelerate the adjustment towards balance. But the sharp rise in U.S. production is deflating the rally. Schieldrop went on to sum up the predicament for OPEC: “[W]hat will OPEC do in the face of strongly rising US crude oil production? They can decide to make cuts in H2 2017, but does this make sense? We don’t think so. The U.S. shale oil production response is too fast and too flexible.”If OPEC feels that cutting back is futile, they could pass on a six-month extension. That would certainly mean more losses for WTI and Brent are ahead.




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





Early THIS FRIDAY morning in Europe, the Euro ROSE by 29 basis points, trading now WELL BELOW the important 1.08 level RISING to 1.0609; 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 3.989 POINTS OR 0.12%     / Hang Sang  CLOSED UP 67/11 POINTS OR 0.29% /AUSTRALIA  CLOSED UP 0.53%  / EUROPEAN BOURSES ALL IN THE GREEN 

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

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

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

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

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

The NIKKEI: this FRIDAY morning CLOSED UP 286.03 POINTS OR 1.48% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 67/11 POINTS OR 0.29%       / SHANGHAI CLOSED DOWN 3.98  OR 0 .12%/Australia BOURSE CLOSED UP 0.35%/Nikkei (Japan)CLOSED UP 286.03 POINTS OR 1.48%  /  INDIA’S SENSEX IN THE  GREEN

Gold very early morning trading: $1196.80


Early FRIDAY morning USA 10 year bond yield: 2.602% !!! DOWN 1/2 IN POINTS from THURSDAY 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  3.187, DOWN 1/2 IN BASIS POINTS  from THURSDAY night.

USA dollar index early FRIDAY morning: 101.84 DOWN 19 CENT(S) from TUESDAY’s close.

This ends early morning numbers FRIDAY MORNING


And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 4.056% UP 3  in basis point yield from THURSDAY 

JAPANESE BOND YIELD: +.089%  DOWN 1  in   basis point yield from THURSDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.889%  UP 5 IN basis point yield from  THURSDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.367 UP 5 POINTS  in basis point yield from THURSDAY 

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





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

Euro/USA 1.0670 up .0091 (Euro UP 91 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 114.96 DOWN: 0.185(Yen UP 19 basis points/ 

Great Britain/USA 1.2171 UP 0.0016( POUND UP 16 basis points)

USA/Canada 1.3464 UP 0.0042(Canadian dollar UP 42 basis points AS OIL FELL TO $48.85


This afternoon, the Euro was UP by 91 basis points to trade at 1.0670


The POUND ROSE 16  basis points, trading at 1.2171/

The Canadian dollar ROSE  by 42 basis points to 1.3464,  WITH WTI OIL FALLING TO :  $48.85

The USA/Yuan closed at 6.9140/
the 10 yr Japanese bond yield closed at +.089% DOWN 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield PAR  IN basis points from WEDNESDAY at 2.585% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.174 UP 2/5  in basis points on the day /

Your closing USA dollar index, 101.44 DOWN 59  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 FRIDAY: 1:00 PM EST

London:  CLOSED DOWN 19.65 OR 0.27% 
German Dax :CLOSED UP 11.08 POINTS OR 0.09%
Paris Cac  CLOSED UP 21.03 OR 0.42%
Spain IBEX CLOSED UP 147.90 POINTS OR 1.50%
Italian MIB: CLOSED UP 88.85 POINTS OR 0.46%

The Dow closed UP 44.79 OR 0.21%

NASDAQ WAS closed UP 22,92 POINTS OR 0.39%  4.00 PM EST
WTI Oil price;  48.85 at 1:00 pm; 

Brent Oil: 51.72  1:00 EST




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

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


BRENT: $51.23


USA 30 YR BOND YIELD: 3.162%

EURO/USA DOLLAR CROSS:  1.0672 up .0088

USA/JAPANESE YEN:114.77   down .390

USA DOLLAR INDEX: 101.34  down 69  cents ( HUGE resistance at 101.80 broken)

The British pound at 5 pm: Great Britain Pound/USA: 1.2167 : up 13 BASIS POINTS.

Canadian dollar: 1.3457  down .0058

German 10 yr bond yield at 5 pm: +.4285%


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


Dow Suffers Worst Week Of 2017 Amid Credit Carnage, Bond Bloodbath, & Crude Crash

To summarize – this week saw chaos in emerging market stocks, high yield credit, Treasuries, crude, copper, Chinese money markets, and risk-parity funds… and US stocks hung in there:

All we can say is…


If today’s payrolls print was so awesome, why did stocks and the dollar tumble and gold and bonds rally?


Small Caps suffered the worst week since September… This was The Dow’s worst week of 2017 which is sad at (up 5 of the last 6 weeks), note that NASDAQ very briefly tagged unch for the week at the open today…


VIX was pressured to ensure it closed the week below 11.55 (which is 2017’s highest weekly close) – BUT FAILED! Highest weekly close for VIX in 2017


The Dow, S&P, and Nasdaq desperately clung to unchanged from pre-Trump-speech close…


Financials had the worst week in 2 months… with JPMorgan (green) down 2.5% off the Trump speech highs…


SNAP briefly Crackled then dropped… and today’s options opening did not help…Snap put options outpaced calls over 3 to 1 on the first day the options traded since last week’s IPO.


Something is very broken with market internals – McClellan Oscillator is crashing as stocks hold near record highs…


This week saw Risk Parity funds suffering – the worst week for the stock-bond-vol strategy funds since the election…


And the delevering sparked selling across bonds and stocks…


High Yield bond prices crashed this week (back to its 200DMA) – the worst week since Feb 2016


Massive HYG outflows this week…


Treasury yields rose for the second week in a row to 2017 highs…


Today’s rally in bonds saved the Treasury complex from its worst losing streak since 1974!!


The USD Index was on target for a strong week but today’s disappointing earnings (and payrolls miss of the whisper number) combined with Wilbur Ross’ comments on trade deals legged the USD notably lower… Today’s drop echoes last week’s moves almost perfectly – and erases practically all the dollar’s gains on the week…


So the week’s gains are erased today – despite a “good” jobs print – policy error? Note EUR surged on the week


EURUSD hit 1.07 – one-month highs, extending gains after chatter (denied) of rate hikes before the end of QE


Notably Wilbur Ross’ comments on NAFTA and Japan sent both the peso and Yen surging today…


March continues to be ugly for commodities… this was copper’s worst week since September


Crude saw its worst week since right before the election, tumbling to a $48 handle and erasing all the OPEC-Cut Deal gains…


Oil Vol is starting to pick up but has a long way to go…


Precious Metals were pummeled this week – gold and silver’s worst week since the election…(NOTE gold managed to eke out a green day today – breaking an 8 day losing streak)


Bitcoin soared above gold – hitting $1327 intraday after payrolls.


Finally we leave you with this WTF chart of the month – the odds of a March rate hike have soared (Fed Funds Futures collapse) in aperfectly correlated way with the collapse in GDP growth forecasts – the exact opposite of what would be expected in any rational world…

March rate hike odds now 100%, and June is now above a 50% chance of a 2nd hike. Dear Janet, explain the above!




The official jobs report:  a gain of 235,000 jobs but the all important earnings disappoint.

(courtesy zero hedge)


US Adds 235,000 Jobs In February, Beating Expectations But Earnings Disappoint

The US economy added 235,000 jobs in February, beating upward revised expectations of 200K, in-line with whisper expctations of 233K. Last month’s report was upward revised from 227K to 238K with the net addition for the past two months coming to +9K.

Nonfarm private payrolls rose 227k up from 221k prior and above the estimate of 215k. Manufacturing payrolls rose 28k after rising 11k in the prior month; this also beat the +10k consensus estimate.

The unemployment rate stayed at 4.7%, while the labor participation increased fractionally from 62.9% to 63.0%. In February, the number of people not in the labor force declined by 176K to 94,190K, the lowest since April 2016 as more Americans are returning to the labor force. Additionally, the number of people who “currently want a job” declined to only 5,597K.

The Underemployment rate came in at 9.2%, down from 9.4% in January.

And while the headline data was stronger than expected, the growth in average hourly earnings disappointed again, rising 0.2% M/M, below the 0.3% increase expected, following last month’s disappointing 0.1% increase. Still, on a year over year basis, average hourly earnings rose 2.8%, in line with expectations. Similarly, average weekly earnings also rose by 2.8%, slightly better than expectations.

The bottom line: the number is good enough for the Fed to hike next Wednesday, although for those looking at earnings to provide color on the pace of future rate hikes, they may have to wait until the next jobs report.

More details from the report:

Total nonfarm payroll employment increased by 235,000 in February. Job gains occurred in construction, private educational services, manufacturing, health care, and mining.


In February, construction employment increased by 58,000, with gains in specialty trade contractors (+36,000) and in heavy and civil engineering construction (+15,000). Construction has added 177,000 jobs over the past 6 months.


Employment in private educational services rose by 29,000 in February, following little change in the prior month (-5,000). Over the year, employment in the industry has grown by 105,000.


Manufacturing added 28,000 jobs in February. Employment rose in food manufacturing (+9,000) and machinery (+7,000) but fell in transportation equipment (-6,000). Over the past 3 months, manufacturing has added 57,000 jobs.


Health care employment rose by 27,000 in February, with a job gain in ambulatory health care services (+18,000). Over the year, health care has added an average of 30,000 jobs per month.


Employment in mining increased by 8,000 in February, with most of the gain occurring in support activities for mining (+6,000). Mining employment has risen by 20,000 since reaching a recent low in October 2016.


Employment in professional and business services continued to trend up in February (+37,000). The industry has added 597,000 jobs over the year.


Retail trade employment edged down in February (-26,000), following a gain of 40,000 in the prior month. Over the month, job losses occurred in general merchandise stores (-19,000); sporting goods, hobby, book, and music stores (-9,000); and electronics and appliance stores (-8,000).


Employment in other major industries, including wholesale trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government, showed little or no change over the month.


The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in February. In manufacturing, the workweek was unchanged at 40.8 hours, and overtime remained at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls has been 33.6 hours since August 2016.


In February, average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $26.09, following a 5-cent increase in January. Over the year, average hourly earnings have risen by 71 cents, or 2.8 percent. In February, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.86 in February.


The change in total nonfarm payroll employment for December was revised down from +157,000 to +155,000, and the change for January was revised up from +227,000 to +238,000. With these revisions, employment gains in December and January combined  were 9,000 more than previously reported. Monthly revisions result from additional reports received from businesses since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 209,000 per month.

Initial trading after the jobs report:

(courtesy zero hedge)


Gold Jumps Above $1200 As Bond Yields, Dollar Drop After ‘Disappointing’ Jobs Data

While the headline print for payrolls beat economists’ expectations, it failed to beat the whisper number (and earnings were weak) and it appears traders are fading the media’s exuberance…

Payrolls printed 235k vs 200k expectations (but was only in line with the whisper number of 235-240k) and earnings disappointed… the result appears to be “sell the news” in the dollar…


And gold is back above $1200..


As Bond yields leak lower…




As indicated above, Trump’s victory has “caused” many to go back into the labour force as 176,000 people entered the force (new level 94,190,000).

Americans Flood Back Into The Labor Force Under Trump

It appears that the “animal spirits” unleashed by President Trump are not contained to the stock market: according to the BLS, one of the most notable observations to emerge from the February (and January) jobs reports is that the number of Americans no longer in the labor force plunged since December, declining by 736,000 in January (to a modest extent due to a data revision) and a further 176,000 in February to 94,190K. The combined two-month addition of 912,000 was the biggest drop in the “not in labor force” series on record.

The 94,19 million people who are considered “not in the labor force” in February includes millions of baby boomer retirees, students, the disabled, homemakers and others who do not work for

various reasons. The number is important because many of those not in the labor force receive Social Security, Medicare, Medicaid, health insurance subsidies and other entitlements that come partly from the taxes paid by those who do work.

Additionally, in February, the nation’s civilian noninstitutionalized population, consisting of all people age 16 or older who were not in the military or an institution, reached 254,246,000.  Of those, 160,056,000 participated in the labor force by either holding a job or actively seeking one, representing a 63% labor force participation rate.

At the same time, the Household survey reported that the number of employed workers, a number used in the calculation of the unemployment rate, jumped from 152,081 to 152,528, an increase of 447, and the highest on record..

Furthermore, a breakdown of the labor participation rate by age group shows that the recently stagnant and all important 25-54 age group has seen a notable improvement in recent months.

While on the surface this is great news for the US job market as many of those who until recently thought they would be unable to find a job, and had stopped being counted by the BLS, are once again back in the labor market, the flip side is that this sudden increase in new potential hires may keep wages suppressed longer than expected, as what until recently was observed as “lack of slack in the job market” turns out to merely have been “workers on the sidelines.”





The big gains in the jobs report were the higher paying manufacturing and construction.  However the retail sector suffered terribly

(courtesy zerohedge)

Where The Jobs Were: Manufacturing, Construction Workers Soar

There has been a distinct shift in the composition of job gains in the first full job report under Donald Trump: whereas in the recent past, jobs under Obama were mainly focused in low-paying, minimum-wage categories, such as retail, hospitality, education and, of course, food service and drinking places, in February there was a notable change with some of Trump’s favorite sectors, such as manufacturing and construction posting dramatic gains.

While all sectors of the economy, with the exception of retail and utilities, expanded payrolls in February, it was the jump in manufacturing employment, which increased 28,000, and the largest increase since August 2013, that caught analysts’ attention. Employment rose in food manufacturing (+9,000) and machinery (+7,000) but fell in transportation equipment (-6,000). Over the past 3 months, manufacturing has added 57,000 jobs.

And then there was the surge in highly-paid construction payrolls, which soared by a whopping 58,000, the biggest gain since March 2007, boosted by warmer weather. Construction has now added 177,000 jobs over the past 6 months, in what has been interpreted by analysts as good news for the US housing market.

On the other hand, confirming the woes of the retail sector, employment here fell 26,000 after a gain of 39,900 jobs in January. In recent months, retailers including J.C. Penney and Macy have announced thousands of layoffs as they shift toward online sales and scale back on brick-and-mortar operations: these mass layoffs are finally starting to be noticed by the BLS.

Other notable highlights:

  • Specialty trade contractors (+36,000) and heavy and civil engineering construction (+15,000) saw major gains. .
  • Employment in private educational services rose by 29,000 in February, following little change in the prior month (-5,000). Over the year, employment in the industry has grown by 105,000.
  • Health care employment rose by 27,000 in February, with a job gain in ambulatory health care services (+18,000).
  • Employment in mining increased by 8,000 in February, with most of the gain occurring in support activities for mining (+6,000). Mining employment has risen by 20,000 since reaching a recent low in October 2016.
  • Employment in professional and business services continued to trend up in February (+37,000), even though just 3,100 temporary workers were added in February. The industry has added 597,000 jobs over the year.

The visual summary is below.

There is just one question: despite the healthy gains across the board, mostly in high-paying jobs, the average hour wage growth in February disappointed, suggesting that some disconnect between good jobs, and higher wages, still remains.  It will be up to the Fed to decide if that “disconnect” is structural or one-time.





The Yen and Peso rise after Wilbur Ross will target NAFTA and other trade agreements:

(courtesy zero hedge)

Yen, Peso Pop After Ross Targets NAFTA, Japan For Trade Deals

The yen and the peso jerked higher after President Trump’s commerce secretary Wilbur Ross commented that he expecte to start renegotiating NAFTA within two weeks and that Japan will be high on the list for trade agreements.

As Bloomberg reports, discussions are under way with the Finance, Ways and Means committees and the expectation is that “in the next couple weeks” the U.S. will issue the 90-day notice trigger legally required consultations with lawmakers, Commerce Secretary Wilbur Ross tells journalists in Washington. Ross spoke at a press briefing with Mexican Economy Secretary Ildefonso Guajardo Villarreal. The revamping of Nafta could result in either two bilateral agreements with symmetrical conditions or a fresh trilateral deal, says Ross, adding the U.S. is less concerned with the form than trying to get the right substance, and that it is premature to discuss specific details of Nafta talks. The border adjustable tax is still a concept, and there’s been no formal proposal; whatever is decided will probably be a “large component” of the House tax bill.

Additionally, Ross said that Japan was to be a high priority with regard a new trade agreement. 

The result was a kneejerk higher in the Yen and peso…




As we have outlined to you on several occasions, the real crisis begins on March 15.2017 and the guy who is banging the table on this is David Stockman

(courtesy David Stockman/Fox News/Daily Reckoning)


David Stockman: Debt Crisis Countdown Begins

[Ed. Note: To see exactly what this former Reagan insider has to say about Trump and the fiscal threats from politics and the debt crisis, David Stockman is sending out a copy of his book Trumped! A Nation on the Brink of Ruin… And How to Bring It Back to any American willing to listen – before it is too late. To learn how to get your free copy CLICK HERE.]

David Stockman joined Fox News and host Neil Cavuto to sound off on his warning concerning the debt ceiling crisis and why it threatens the U.S economy. In the interview Stockman relays his budget analysis as a Washington insider to offer the concrete numbers on what he views as a debt catastrophe in the making.

When asked about current Republican leadership that pushes back against his concern over the debt David Stockman responded, “I think they’re dead wrong. The countdown to crisis actually begins next Wednesday, March 15. The Federal Reserve is going to raise interest rates and is not going to stop. Expect three or four times this year. It has not choice and has dithered for 99 months at a zero bound rate. It has to allow the market to normalize.”

“Second, the debt ceiling freezes in at $20 trillion. They’re burning through cash at the Treasury like drunken sailors. I can’t emphasize this enough, the Treasury has no idea what is happening within its on joint. In the first 46 days of the Trump Administration they have burned through $294 billion of cash. They started with $382 billion. It is now down to $88 billion and dropping by the day.”


Politics of the Debt Crisis 

“At the rate they lost cash last year, between March and early June, they will be out of cash by Memorial Day. There is no reason to believe that will be any different this year.”

Stockman then exposed the severity of the crisis and the politics of Congress stating, “There is no pathway to a majority in the Congress that soon [to raise the debt ceiling]. They have declared war on the Democrats. After all of the immigration ban, the walls at the border, the deportations, the attacks on Obama… there are zero Democrat votes for debt ceiling increase right now. In the bloodbath that is happening on Obamacare-Lite… is that by May the Republican party is going to be in tethers. There will be no majority to raise the debt ceiling. By then the rubber will meet the road. They’ll have to start all of these gimmicks.”

David Stockman FNC Cavuto Debt Crisis Countdown

After The Dollar… But Before A Return to Gold


“I’ve been in Washington a long time. I know when the disinvesting and gimmicks start, it’s a sign to everybody that the crisis is near.”

When Cavuto posed whether the economy might be able to grow out of the debt crisis and the looming threat of a debt ceiling Stockman pressed, “No, you can’t get a tax cut boom in 2 weeks, 5 weeks or 10 weeks.” When asked if it was about redirecting GDP and revenues he remarked, “No. There is no chance it is going down. The first quarter GDP is coming in at 1%. This whole flurry of bullish enthusiasm that we’ve had in the stock market is a farce.”

“It will soon become clear that the tax cuts aren’t going to happen, that this debt ceiling crisis is going to take down the whole system. Why did they allow $294 billion of cash to be burned up? Only $237 billion of that was to cover the inherited deficit that you can’t blame Trump for but he used $57 billion in cash to lower the debt ceiling.”

To watch the full interview on the debt crisis with David Stockman on Fox News CLICK HERE.

If you would like to learn how to get your FREE copy of his book sent directly to you – CLICK HERE.




Down goes the dollar as Mnuchin states that he is against the devaluation of countries’ currencies to gain an advantage.  In the upcoming G20 meeting no doubt there is will be a discussion on protectionism something that the USA wants but all other nations are against.

(courtesy zero hedge)

Dollar Tumbles To Session Lows On Mnuchin Devaluation, Trade Deficit Warning

First, the dollar dropped following comments from commerce secretary Wilbur Ross, who said that he expected to start renegotiating NAFTA within two weeks and that Japan will be high on the list for trade agreements.

Now, in a second salvo against the strong dollar on the same day, Bloomberg reports that during his first appearance at next week’s G-20 meeting in Baden-Baden, Germany, Treasury Secretary Steven Mnuchin plans to drive home the message that the U.S. won’t tolerate countries that engage in currency devaluation to gain an edge in trade, a statement which would clearly refute Mnuchin’s recent praise for a stronger dollar, and provides further evidence that the Trump administration’s preliminary focus will be on getting the dollar weaker, not stronger, which may in turn impact the Fed’s decision-making, especially if indeed Yellen hopes to hike rates three (or more) times in 2017.

The message, which will borrow from the G-20 consensus view hammered out with the previous U.S. administration, will be Mnuchin’s focus as he has few political staffers to develop detailed positions on key points such as global trade rules and their collision with President Donald Trump’s “America First” stance.

Mnuchin will also say that the American trade deficit is a sign other major economies aren’t doing their part to support global demand, making the world’s economic growth unbalanced. While this is a long-standing U.S. grievance, Bloomberg notes that counterparts are on the lookout for signs that this position is hardening in the context of a stronger dollar, especially toward Germany, which last year ran a trade surplus of more than 8 percent of its gross domestic product.

More from Bloomberg:

Specific language on countering trade barriers that may also be a focus for haggling in Baden-Baden. The G-20’s last communique, from the meeting in Chengdu, China, in July, commits members to resisting “all forms of protectionism,” wording that the U.S. now appears set on removing. The Trump administration’s protectionist stance, plans to renegotiate trade pacts like Nafta, and the possible implementation of a border tax would make it next to impossible for Mnuchin to sign up to that line.


An early draft communique, dated March 1, omitted that pledge, even though the hosts, Germany, and most other members continue to back it. Instead, the U.S. wants the insertion of a reference to “fair and equitable trade,” a reflection of the inward-looking trade policies that Trump backs, two people said.


If Mnuchin advances this argument further in Germany, he’ll find himself at odds with fellow Goldman Sachs alumnus Mario Draghi. The European Central Bank president on Thursday rejected the Trump administration charge that Germany is manipulating its currency — the euro, which is shares with 18 other countries — and defended the G-20 status quo. “It’s quite important that the G-20 reaffirms this commitment,” Draghi said at a press conference in Frankfurt. The consensus against protectionism and in favor of market-based exchange rates “have been pillars of world prosperity for many, many years,” he said.

One ex-Goldmanite versus another: it should make for an entertaining media – and trial balloon – spectacle, if little more.

Having been hit earlier following Ross’ comments, the greenback slide further, and hit intraday lows following the Mnichin statement, as concerns build that the Trump administration’s patience with a strong dollar may have run out.



What a disaster: 31% of college students spend some of their loan money on Spring break in Cancun or other holiday destinations

(courtesy zero hedge)

31% Of College Students Spend Their Loans On Spring Break

As Washington D.C. liberals continue their fight for ‘free’ college education for all (which, of course, is just a nicer way of saying largely useless community college education crammed down the throats of taxpayers) and student loan forgiveness programs, a new study from LendEDU reveals some of the shocking realities behind where college students are really spending their $1.3 trillion worth of student debt.

Per a survey of 500 college co-eds, LendEDU found that 31% of students, or roughly 2.4 million kids, admitted to using student loan money to fund their binge drinking trips to Cancun and Daytona Beach for spring break.

According to the LendEDU poll, 30.60% of college students with student debt claim that they are using money they received from student loans to help pay for their spring break trip this year. For reference, you can use student loan funding for living expenses.

The National Center for Education Statistics calculated that 20.5 million students will be attending college this year in the United States. Orbitz reported that 55% of students will be going on spring break. Using this data, we can roughly calculate that 11,275,000 students will be going on spring break this year. And, it is estimated that 69% of all current college students use student loan debt by the time of graduation. By doing some additional arithmetic, we can calculate that roughly 7,779,750 student debtors are going on spring break this year.

Factoring in our data, and assuming the claims made in our survey are accurate, this means that 2.38 million students are using money received from student loans to pay for their spring break excursion this year.

But don’t worry yourselves you silly taxpayers…it’s only $1.3 trillion (and counting) of debt that you’ll soon have to cover.

Student Loan Debt

Adding insult to injury, 24% of students admitted to using their student loan money for alcohol and 7% use those federally-subsidized checks for drugs.

Nearly a quarter (23.80%) of respondents stated that they have used money received from student loans to pay for drinking some type of alcohol. This answer also included spending money at bars.

A third (33.40%) of students answered that they have used money received from student loans to pay for clothing and other accessories.

Similarly, the same amount (33.40%) of students said that they have used money received from student loans to pay for restaurants and take-out.

6.60% of respondents responded saying that they have used money received from student loans to pay for drugs.

Finally, 5.60% of students that participated in our survey stated that they used money received from student loans on gambling or sports betting.

“Students should minimize their borrowing during their college years and live a sparse lifestyle — but no one wants to hear that when their fraternity brothers or sorority sisters are packing up to Cabo for the week,” said Greg McBride, chief financial analyst of  “It’s like putting spring break on a credit card, but this one is subsidized by taxpayers,” McBride added.

Meanwhile, as we pointed out before (see “Obama Student Loan Foregiveness Plan To Cost Taxpayers $137 Billion, GAO Finds“), the GAO currently estimates that taxpayers will ultimately have to cover $137 billion of student loan debt outstanding…an obligation we’re certain will only grow over time.

Student Loans

So fight on, Bernie…and while you continue your crusade for “free college,” America’s entitled millennials will be laughing all the way to Cancun.




Wolf Richter explains why they are not going to drain the swamp

(courtesy Wolf Richter/WolfStreet)

Late this afternoon:


if job growth has been so great, can someone explain why USA government revenues have suffered the biggest drop since 2009?

(courtesy zero hedge)


Recession Alert: US Government Revenues Suffer Biggest Drop Since The Financial Crisis

On the surface, today’s monthly budget statement was disappointing: in February the US Treasury brought in total receipts of $172 billion, versus outlays of $364 billion, resulting in a decicit of $192 billion, more than tha $190 billion expected (if in line with last year’s $192.6 billion deficit). For the fiscal year through Feb. 28, the total US budget deficit was $349 billion, virtually identical to the $351 billion deficit over the same period in 2016 and set to keep rising this year and for the foreseeable future.

On a 12 month run-rate, the US deficit stood at 3.1% of GDP. A year earlier, that figure was a third less, or 2.2%.

However, something more concerning emerges when looking at the annual change in the rolling 12 month total. It is here that we find that, like last month, in the LTM period ended Feb 28, total federal revenues, tracked as government receipts on the Treasury’s statement, were $3.275 trillion. This amount was 1.1% lower than the $3.31 trillion reported one year ago, and is the third consecutive month of annual receipt declines. This was the biggest drop since the summer of 2008. At the same time, government spending rose 3.8%.

Why is this important? Because as the chart below shows, every time since at least 1970 when government receipts have turned negative on an annual basis, the US was on the cusp of, or already in, a recession. Indicatively, the last time government receipts turned negative was in July of 2008.

One potential mitigating factor this time is that much of the collapse in receipts is due to a double digit % plunge in corporate income tax, which begs the question what are real corporate earnings? While we hear that EPS are rising, at least for IRS purposes, corporate America is in a recession.

How about that far more important indicator of overall US economic health, and biggest contributor to government revenue, individual income taxes? As of February, the YTD number was $611bn fractionally higher than the same period a year ago, and declining.

Finally should Trump proceed to cut tax rates without offsetting sources of government revenue, a recession – at least based on this indicator – is assured.

Let us wrap up the week, with this offering from Greg hunter of USAWatchdog

(courtesy Greg Hunter)

Deep State Treason Against Trump, Rate Hike Disaster, Troops Sent to Iraq

By Greg Hunter’s
(WNW 275 3.10.17)

The story of Trump colluding with the Russians prior to Election Day has now been totally discredited along with the Democrats, mainstream media (MSM) and rogue members of the intelligence agencies. The story has morphed into felony leaks to try to destroy Donald Trump.  It has revealed police state tactics from an outgoing party to an incoming party.  Did the White House know about the wiretapping of the Trump campaign?  Are the leakers inside the Intel agencies going to be charged with felonies for the leaking of information to try to destroy Trump?  Can the MSM ever recover from their unfair and fake news reporting?  The answers will be coming in the weeks and months ahead, and Donald Trump will be getting the last laugh.

Wall Street says the chance of the Fed raising interest rates is now 100%. Bond King Bill Gross says, “Our financial system is a truckload of nitroglycerin on a bumpy road.”  Is Gross worried about the bond market blowing up by selling off?  Sure looks that way, and rising interest rates can very well be the trigger.  This is up against a backdrop of a recently downgraded GDP to a sluggish 1.3%.

The U.S. is sending near 1,000 new troops to Syria to assist with efforts to defeat the Islamic State, or ISIS. Iran is also test firing missiles again, this time from a ship in the Persian Gulf.  Japan is thinking about adding defensive missiles to protect its coast after a new round of North Korean missiles are fired at the Land of the Rising Sun.

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

(To Donate to Click Here)

Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

(To Donate to



Well that about does it for this week

I will see you Monday night


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