March 14/Gold and silver whacked in the access market: however GLD inventory rises by 2.93 tonnes to 834.99 tonnes/SLV also has an addition of 1.136 million oz/Chinese retail sales plummet so far to begin their New Year/Theresa May may invoke article 50 as she gets approval from Parliament/Erdogan calls off deal with Europe and now threatens to release millions of migrants onto Greece and then onto other European destinations: just in time for the Dutch elections!/ Tomorrow 3 big events: 1. Debt ceiling reached officially. 2. FOMC will raise rates by 1/4% /Dutch elections/

Gold: $1201.90  DOWN $0.50

Silver: $16.89  DOWN 4 cents

Closing access prices:

Gold $1199.70

silver: $16.90

 

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

 

 

SHANGHAI FIRST GOLD FIX: 1222.23 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1204.00

 

PREMIUM FIRST FIX:  $18.23

 

SECOND SHANGHAI GOLD FIX: 1223.48

NY GOLD PRICE AT THE EXACT SAME TIME: 1202.25

Premium of Shanghai 2nd fix/NY:$21.23

 

LONDON FIRST GOLD FIX:  5:30 am est  1203.25

NY PRICING AT THE EXACT SAME TIME: 1203.60

 

 

LONDON SECOND GOLD FIX  10 AM: 1204.60

 

NY PRICING AT THE EXACT SAME TIME. 1203.75

 

 

For comex gold:

MARCH/

NOTICES FILINGS TODAY FOR MARCH CONTRACT MONTH:  0 NOTICE(S) FOR nil OZ.  TOTAL NOTICES SO FAR: 59 FOR 5900 OZ    (0.1835 TONNES)

For silver:

For silver: MARCH

241 NOTICES FILED TODAY FOR 1,205,000 OZ/

Total number of notices filed so far this month: 2992 for 14,960,000

Three big events for tomorrow:

 

  1. FOMC will raise rates despite the economy faltering
  2. Dutch elections
  3. Debt ceiling has been reached officially and then the fun begins

I will report on all of these points tomorrow.

 

 

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest ROSE by 229 contracts UP to 188,619 with respect to YESTERDAY’S TRADING.    In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  0.943 BILLION TO BE EXACT or 134% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH: THEY FILED: 241 NOTICE(S) FOR 1,205,000 OZ OF SILVER

In gold, the total comex gold ROSE BY A CONSIDERABLE 7,593  contracts EVEN WITH  A SMALL  PRICE RISE IN GOLD ($1.70 with YESTERDAY’S TRADING) The total gold OI stands at 426,020 contracts. Note the difference between gold and silver.

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:

:

We had a big change in tonnes of gold at the GLD: this time  another huge deposit of 2.93 tonnes

Inventory rests tonight: 834.99 tonnes

.

SLV

We had a huge changes in inventory at the SLV/a deposit of 1,136,000 oz

THE SLV Inventory rests at: 331.272 million oz

end

.

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

1. Today, we had the open interest in silver ROSE by 229 contracts UP to 188619 AS SILVER WAS UP ONLY 5 CENTS with YESTERDAY’S trading. The gold open interest ROSE BY A CONSIDERABLE 7,593 contracts UP to 426,020 WITH A TINY RISE IN THE PRICE OF GOLD OF $1.70  (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 in silver on continual raids orchestrated by the bankers, and they back off when the banks release their foot from the throat of silver when it rises.

(report Harvey

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

 i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 2.304 POINTS OR .07%/ /Hang Sang CLOSED DOWN 1.72POINTS OR 0.01% . The Nikkei closed DOWN 24.25 POINTS OR 0.12% /Australia’s all ordinaires  CLOSED UP 0.06%/Chinese yuan (ONSHORE) closed UP at 6.9148/Oil FELL to 47.72 dollars per barrel for WTI and 50.84 for Brent. Stocks in Europe ALL IN THE RED  ..Offshore yuan trades  6.9043 yuan to the dollar vs 6.9148  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS CONSIDERABLY/ ONSHORE YUAN STRONGER BUT  THE OFFSHORE YUAN IS WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA SENDS A MESSAGE TO THE USA NOT TO RAISE RATES

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)Good reason for gold to fall this morning:  North Korea threatens the USA with merciless strikes:

( zerohedge)

ii)And he puts his army into “combat mode”

( zerohedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

i)Chinese retail sales growth, the worst start to a year since 2002

( zero hedge)

ii)China is not happy with the USA deployment of the THAAD anti missile system into South Korea as their first strike ability would be compromised!

( zero hedge)

4. EUROPEAN AFFAIRS

i)UK/last night

UK Parliament passes approval such that Theresa May may invoke Article 50 by this Thursday

( zero hedge)

ii)GREECE

Over in Greece citizens are rioting with shepherd crooks

( Lang/SHTFplan.com)

iii)FRANCE

Fillon is formally charged with misuse of public funds and that should cause him to remove himself from the race:

(courtesy zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Turkey states that the “Migrant deal” in which it collected 3 billion dollars has now ended as Erdogan states that Europe did not live up to its bargain. Turkey may unleash millions of refugees into Greece:

( zerohedge)

6.GLOBAL ISSUES

7. OIL ISSUES

i)Down goes oil on a report that the Saudis did not cut production but actually increased production back to over 10 million barrels per day from a supposed 9.797 million barrels.

( zero hedge)

ii)Huge Oil trader Andurand loses 130 million dollars in the first two months of the year, with oil trading sideways.  You can just imagine what his loses will be in March

( zero hedge)

iii)USA shale is set to expand and that causes oil to plummet again

( zero hedge)

(courtesy zero hedge)

v)Late in the session oil got a boost from an unexpected inventory drawdown:

( zero hedge)

8. EMERGING MARKETS

9.   PHYSICAL MARKETS

i)Insider trading?

( Mike Bird/Wall Street Journal/GATA)

ii)A good commentary explaining why the mining companies remain silent against the obvious manipulation in the gold and silver markets

( ChrisPowell/GATA)

iii)Valentin Schmid of Epoch Times talks about Chinese demand for gold using faithful data from Koos Jansen

( Schmid/Epoch Times)

iv)Now it is Idaho’s turn to remove income taxation from the precious metals

(courtesy Digg)

10.USA STORIES

i)Producer prices is the forerunner to inflation.  Today PPI spiked at his fastest pace in over 5 years and this will surely be a cover for Yellen to raise rates.  Inflation is rearing its ugly head in the uSA

( zero hedge)

( Goldman Sachs/zero hedge)

iib) The White House now working with Congress to amend the Healthcare bill with the disappointing scoring by the CBO

( zero hedge)

iii)A very important commentary from David Stockman.  He explains the huge cash drawdown at the Treasury from 435 billion USA down to 66 billion USA.  The reason, the boys instead of re-liquefying with more debt, the paid off that treasury debt which put the foot off the debt throat and this allowed the stock market to rally.

Now the debt ceiling will be re instated tomorrow and the treasury will now use their trust funds of around 500 million to fund the daily needs of Government.  Once a new debt ceiling is agreed upon in June or July these funds must be replaced and then we become closer to the new debt ceiling. Stockman believes that there can be no agreement between the divided Republicans and the Democrats on any matter

( David Stockman/ContraCorner)

iv) We have been highlighting to you the mega problems facing brick and mortar operations.  Today, USA department store sales crashed by the most on record!!

( zero hedge)

v)This once upon a time darling on the New York Stock exchange which saw its stock rise from 10 dollars all the way up to 260 dollars is now trading at 10 dollars and its chief investor and cheer leader Bill Ackman has thrown in the towel and sold all of his stock in the company.  This company is heading to zero with a huge 30 billion in long term debt and only 9 billion of real assets behind them

( Dave Kranzler /iRD)

 

Let us head over to the comex:

The total gold comex open interest ROSE BY A CONSIDERABLY 7,593 CONTRACTS UP to an OI level of 426,020 WITH THE RISE IN THE  PRICE OF GOLD ( $1.70 with YESTERDAY’S trading).  We are probably only 33,000 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 GAIN of 3 contract(s) PU to 31. We had 0 contact(s) served YESTERDAY, so we GAINED 3 CONTRACT(S) or  AN ADDITIONAL 300  ounces will  stand for delivery.  The next active contract month is April and here we saw it’s OI FALL by 4874 contracts DOWN TO 199,957 contracts.

For comparison purposes, the April 2016 contract at this time had an OI of 269,016 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 LOST 14 contract(s) and thus its OI is 749 contracts. The next big active month is June and here the OI ROSE by 10,456 contracts up to 137,278.

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
 And now for the wild silver comex results.  Total silver OI ROSE BY 229 contracts FROM 188,390 UP TO 188,619 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 and not jumping in with vigour on the back of gold rises.We are moving CLOSER TO the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540). The closing price of silver that day: $20.44

We are in the active delivery month is March and here the OI decreased by 31 contracts down to 1117 contracts. We had 3 notices served upon yesterday so we LOST 28 contract(s) or an additional 140,000 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 LOST 1 contract(s) to 990 contracts. The next active contract month is May and here the open interest lost 821 contracts DOWN to 146,614 contracts.

FOR COMPARISON

Initially for the April 2016 contract, 1,180,

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

We had 241 notice(s) filed for 1,205,000 oz for the MARCH 2017 contract.

VOLUMES: for the gold comex

Today the estimated volume was 99,779  contracts which is poor.

Yesterday’s confirmed volume was 205,971contracts  which is  good

volumes on gold are getting higher!

INITIAL standings for MARCH
 March 14/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
nil OZ
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 48,407.66 oz  HSBC
No of oz served (contracts) today
 
0 notice(s)
NIL oz
No of oz to be served (notices)
31 contracts
3100 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
Today we HAD 0 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits:  nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 1  customer deposit(s):
 i) Into HSBC: 48,407.66 oz
total customer deposits; 48,407.66  oz
We had 0 customer withdrawal(s)
total customer withdrawal: nil oz
We had 0  adjustment(s)
For MARCH:

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the initial total number of gold ounces standing for the 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 (0) x 100 oz per contract equals 9000 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 (0) x 100 oz which equals 9000 oz standing in this non active delivery month of MARCH  (.2799 tonnes)
 
 
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On first day notice for MARCH 2016, we had 2.146 tonnes of gold standing. At the conclusion of the month we had 2.311 tonnes standing.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov.    8.3950 tonnes.
DEC.   29.931 tonnes
JAN/     3.9004 tonnes
FEB/ 18.734 tonnes
March: 0.2799 tonnes
total for the 15 months;  244.516 tonnes
average 16.301 tonnes per month vs last yr  61.82 tonnes total for 15 months or 4.12 tonnes average per month (last yr).
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Total dealer inventory 1,379,264.072 or 42.900 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,941,772.867 or 278.12 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.12 tonnes for a  loss of 25  tonnes over that period.  Since August 8/2016 we have lost 76 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 7 MONTHS  76 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE MARCH DELIVERY MONTH
MARCH INITIAL standings
 March 14. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
1,998.900 oz
 Delaware
Deposits to the Dealer Inventory
994,266.180 oz
Brinks
CNT
Deposits to the Customer Inventory 
 803,243.06 oz
CNT
JPMorgan
No of oz served today (contracts)
241 CONTRACT(S)
(1,205,000 OZ)
No of oz to be served (notices)
876 contracts
(4,380,000  oz)
Total monthly oz silver served (contracts) 2992 contracts (14,960,000 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  3,3862,169.3 oz
today, we had  2 deposit(s) into the dealer account:
i) Into Brinks:  598,125.14 oz
ii) Into CNT: 396,141.040 oz
total dealer deposit: 994,266.180 oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 3 customer withdrawal(s):
i) Out of CNT: 3058.37  oz
ii) out of HSBC: 2048.67 oz
iii) Out of Scotia: 70,339.880 oz
TOTAL CUSTOMER WITHDRAWALS: 75,446.920 oz
 we had 2 customer deposit(s):
 i) Into CNT: 203,174.960 oz
ii) Into JPMorgan: 600,068.100 oz
***deposits into JPMorgan have now resumed.
total customer deposits;  803,243.06   oz
 
 we had 1  adjustment(s)
 i) From the CNT vault:  1023.20 oz was adjusted out of the customer account of CNT into the dealer account of CNT
The total number of notices filed today for the MARCH. contract month is represented by 241 contract(s) for 1,205,000 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 2992 x 5,000 oz  = 14,960,000 oz to which we add the difference between the open interest for the front month of MAR (1117) and the number of notices served upon today (241) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the March contract month:  2992(notices served so far)x 5000 oz  + OI for front month of Mar.( 1117 ) -number of notices served upon today (241)x 5000 oz  equals  19,340,000 oz  of silver standing for the Mar contract month. This is  now average for an active delivery month in silver.  We LOST 28 contracts or an additional 140,000 oz will NOT  stand.  
 
Volumes: for silver comex
 
Today the estimated volume was 21,052 which is POOR!!!
Yesterday’s  confirmed volume was 54,102 contracts  which is huge.
Let’s take today’s estimated volume of 54102 contracts:  that represents:270 million oz of silver or approx. 39% of annual global supply (ex Russia ex China)
 
Total dealer silver:  38.975 million (close to record low inventory  
Total number of dealer and customer silver:   188.460 million oz
The total open interest on silver is now further from   its all time high with the record of 224,540 being set AUGUST 3.2016.

end

And now the Gold inventory at the GLD

March 14/strange they whack gold and yet the GLD adds 2.93 tonnes of gold./inventory rests at 834.99 tonnes

March 13/a deposit of 6.78 tonnes of gold into the GLD/Inventory rests at 832.03 tonnes

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.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
March 14 /2017/ Inventory rests tonight at 834.99 tonnes
*IN LAST 109 TRADING DAYS: 110.89 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 54 TRADING DAYS: A NET  14,32 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: a net    39.75 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory
March 14/ a deposit of 1.136 million oz of inventory into the SLV/Inventory rests at 331.276 million oz
March 13/no change in silver inventory at the SLV/Inventory rests at 330.136 million oz.
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 14.2017: Inventory 331.272  million oz
 end

NPV for Sprott and Central Fund of Canada

will update later tonight the central fund of Canada figures

1. Central Fund of Canada: traded at Negative 6.4 percent to NAV usa funds and Negative 6.3% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.9%
Percentage of fund in silver:38.9%
cash .+0.2%( Mar 14/2017) 
2. Sprott silver fund (PSLV): Premium RISES  to -.21%!!!! NAV (Mar 14/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to  + 0.03% to NAV  ( Mar 14/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -0.21% /Sprott physical gold trust is back into POSITIVE territory at +0.03%/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

 Section: 

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

http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…

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.

end

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNEet.

EU Crisis Is Existential – Importance of Tomorrow’s Vote

EU Crisis Becoming Existential… Dutch Vote Tomorrow and Why It Matters

The leader of the National Front in France, Marine Le Pen, has hailed Britain’s decision to leave the EU – and has called for France to hold a similar referendum

The EU is facing an existential crisis and does not look like it will survive the massive political and financial challenges it is faced with. This has ramifications for investors in the EU itself and globally as the collapse of one of the world’s largest trading blocs will badly impact already fragile global economic growth and increasingly “frothy” looking financial markets – particularly stock and bond markets.

The existential crisis facing the EU, the Dutch elections tomorrow and the coming elections in France and Germany and the risks increasingly likely EU contagion poses to Asian economies and the global economy is considered by True Wealth’s Kim Iskyan today:

Tomorrow, parliamentary elections in the Netherlands mark the first of several important votes in EU member countries that will dictate the future of the continent.

After the Netherlands, France has a presidential election late next month (and likely in a run-off election in early May). Germany follows with presidential elections in September, followed by general elections in Italy in early 2018. All four countries are founding members of the EU. And in each case, there is a chance that an anti-EU party takes power, with potentially enormous consequences for the future of the EU.

Emboldened by the Brexit referendum and the election of U.S. President Donald Trump, right-wing parties have surged in popularity all across the continent. After years of déjà-vu episodes of debt crises, now much of the EU is in the midst of a populist backlash over concerns about immigration, refugees and terrorism. The prospect that anti-EU parties will assume power in countries that are the historical bedrock of the EU is a serious threat to the 28-member political and economic union – and also globalisation itself.

A functioning EU is important to Asia’s economic prosperity

As we’ve written before, a less globalised world hurts Asia. Many of the biggest Asian markets have been empowered by greater global integration. And for countries like China, Japan, South Korea, Singapore and Malaysia, trade is critical to economic growth.

Asia is easily the EU’s largest regional partner in trade. China is the EU’s second-biggest trade partner after the U.S. (the EU is China’s largest trading partner.) And Japan, South Korea and India are currently the EU’s 7th, 8th and 9th largest trading partners.

Together, the 10 countries that make up the Association of Southeast Asian Nations (ASEAN) are the EU’s third-largest trading partner, while the EU is ASEAN’s second largest partner. The EU is also the largest foreign investor into ASEAN. It accounts for 22 percent of the Southeast Asian region’s foreign direct investment (FDI) inflows.

“Euroexits” would affect trade and financial flows

Any country that leaves the EU would have to establish new bilateral (that is, between two countries) or multilateral (involving three or more countries) trade agreements with other countries. The UK is now starting to lay the foundations for such trade pacts with non-EU nations. On the positive side, around 60 countries already have special trading agreements with the EU in place, including South Korea. So should France vote to leave, for instance, it should (theoretically) be able to quickly replicate existing trading arrangements with these 60 countries.

But other countries, including China, Japan and the U.S. have no such free trade accords with the EU. These countries will likely need to use World Trade Organisation (WTO) framework to establish trade agreements with EU “exiters”. Meanwhile, all participating economies would probably see a dip in trade. And should another country leave the EU, heightened levels of uncertainty could further weigh on Asian economies.

A mixed outlook for the Netherlands

The Dutch Party for Freedom (PVV), which is headed by Geert Wilders – who requires 24-hour security in part due to his anti-Islam and anti-immigration views – could provide the next nail in the EU’s coffin. The far-right politician has promised to call for a referendum for a Dutch exit from the EU, and possibly a return to the country’s old currency, the guilder, if he wins.

In Wilders’ words, “The European Union is a political bureaucratic organisation that took away our identity and our national sovereignty. So, I would get rid of the European Union and be a nation-state again.” Current polls suggest that PVV has a narrow lead.

If the PVV does get the most votes, it would have to form a coalition with another party. And it appears unlikely that any other major party would enter into such a coalition with Wilders. A “Nexit” is a possibility, but isn’t a certainty.

France is the EU’s biggest worry

More concerning for the health of the EU are the French elections. And at the moment, Marine Le Pen’s Front National party leads the first round of polls.

If she gains power, Le Pen has promised to seek parliamentary approval to hold a “Frexit” referendum within her first six months in charge. Similar to Wilders, she wants France to abandon the euro and adopt a new version of the country’s previous currency, the franc. And much like Trump’s “America First” campaign, Le Pen’s “Made in France” mantra seeks to push back against what she calls the “ultra-liberal economic model” of globalisation.

The leader of the National Front in France, Marine Le Pen, has hailed Britain’s decision to leave the EU – and has called for France to hold a similar referendum.

A Frexit would mean that the EU would lose two of its three biggest economies (Germany, France and the U.K.) in the space of about one year. And while the EU may have survived the UK’s departure, the loss of France would “bring the project that has underpinned the European order for the past 60 years to a close”, according to The Economist.

Even if Le Pen does not win, discontent in France isn’t going away. Unemployment has been above 10 percent for the past four years. A poll by Pew Research also found that 45 percent of French citizens have a negative view of their country’s engagement in the global economy, as they believe that it lowers wages and costs jobs.

Other French presidential candidates also harbour protectionist views. Le Pen’s strongest rival at present, the centrist Emmanuel Macron, has previously voiced concern over China’s steel “dumping” on Europe (a practice we have previously highlighted). And the other major candidate François Fillon has said that he wants “a Europe able to defend its industries and jobs against China and the U.S.”

France may impose protectionist trade measures, similar to those that the U.S. is toying with. Whether that happens whilst remaining in the EU, or having exited, remains to be seen. Either way, the shift towards a more nationalist sentiment will be bad news for Asian exporters.

Germany: The EU’s (and Asia’s) biggest hope

From Asia’s standpoint, Germany’s election seems to be less of a concern at this stage. Neither of the front-runners is in favour of leaving the EU, although there is some mounting pressure from the right-wing anti-EU populist party Alternative for Germany.

In the bigger picture, Germany is one of the few rays of light for globalisation advocates. German Vice Chancellor Sigmar Gabriel recently said that the EU should pivot its economy towards Asia, should the Trump administration pursue protectionism.

Similarly, the head of Germany’s Federal Association of Wholesale, Foreign Trade and Services recently said that American protectionist plans should allow the trade ties between Germany and China to be “further strengthened.” China is already Germany’s most important trading partner, with the two nations conducting US$180 billion worth of business in both imports and exports.

But if Brexit and Trump proved anything, it was that polls don’t mean much. The mood is clearly turning in Europe, away from globalisation and towards nationalism. Should even one more country leave the EU, it could trigger a domino effect that quickly leaves the regional bloc standing on shaky ground. And Asia could stand to lose from that.

http://www.goldcore.com/us/gold-blog/eu-crisis-existential-importance-tomorrows-vote/

END

Valentin Schmid of Epoch Times talks about Chinese demand for gold using faithful data from Koos Jansen

(courtesy Schmid/Epoch Times)

Solving the Secret Behind the Chinese Gold Market

Expert estimates total holdings at 19,500 metric tons

 

The world is full of golden rules. There is one for every field: ethics, communication, fashion. But there is only one that counts, the golden rule of money: “Who has the gold makes the rules.”

China, it seems, wants to make the rules in the international monetary system, which is why it has been acquiring vast amounts of gold both through private and official channels.

Because of the obscure nature of the Chinese gold market and the reluctance of Chinese officials to show their hand, nobody has been able to accurately calculate how much gold the Chinese have amassed since about 2000, when they began amassing it.

Enter Koos Jansen, an analyst with Singapore bullion dealer Bullion Star. He has studied the Chinese gold market for years and recently came up with an estimate of total Chinese gold holdings: 19,500 metric tons, or 21,495 U.S. tons, at the end of January 2017.

“They have promoted gold ownership as a store of value since at least 2002, but more so when they introduced the ‘storing gold with the people’ concept in 2004,” says Jansen, a campaign encouraging private citizens to buy gold.

Private Hoard

According to Jansen’s estimates, total private holdings, including those of individuals and firms, are 15,500 metric tons. The official reserves of the People’s Bank of China (PBOC) are around 4,000 metric tons.

This would make Chinese the second biggest holders of gold after India, where citizens are estimated to hold 20,000 metric tons of gold in jewelry and other forms. Private sector holdings for the United States are unknown, but the Treasury still holds 8,134 tons in official reserves.

But where did China get all this gold when in the year 2000 it only had 4,000 tons in total?

The first piece of the puzzle is domestic mining.

“In the 1970s when China needed foreign exchange, that’s when they started their mining industry. They were supposed to start exploration and the people were incentivized to mine gold. That’s why there are so many gold mines in China.” He pegs the number at around 600.

Those 600 mines produced 490 tons of gold in 2015, making China the biggest producer ahead of Australia with 300 tons.

Importing Into a Black Hole

The next piece of the puzzle are imports. According to Jansen’s estimates, China imported about 1,300 tons of gold in 2016, mostly through Hong Kong but also directly from Switzerland and the United Kingdom.

Here, Jansen points out a peculiarity regarding Asian buying: “Asian demand is strong when the price goes down. Western demand is strong when the price goes up. In April 2013, the gold price collapsed and a lot of gold was exported from the West to China, mostly from the U.K.”

When the gold gets into China, it is then sold through the Shanghai Gold Exchange (SGE), which also handles scrap supply and domestic mining.

Curiously, Jansen points out, none of this supply is going to the central bank but rather to consumers and companies.

“In the domestic market, there are laws and incentives to push supplies through the SGE. Scrap, domestic production, imports, all go through SGE at first. The withdrawals from the exchange are equal to total private gold demand.”

Private demand includes individuals who want to diversify their assets or institutional investors, like pension funds but also the gold sold to jewelry companies for later resale.

“Companies and individuals buy gold for the same reason. Get out of the Renminbi, diversify, protection, etc.,” he says.

As for the central bank, Jansen says that their purchases don’t show up in official import statistics and are kept a tight secret.

“The Chinese army even has a special division, I call it the gold army. This gold army can still be active, they can pick it up directly in the U.K.,” he says. The central bank also uses commercial banks who buy in Switzerland or South Africa and secretly ship the gold to China.

For example, the total gold holdings of the London Bullion Market Association dropped by 2,750 tons from 2011 to 2015 but net exports were only 1,000 tons. Thus, those 1,750 tons are unaccounted for and most likely ended up in official Chinese reserves.

According to Jansen’s contacts at Chinese banks, official holdings are closer to 4,000 tons rather than the published figure of 1839 tons.

What does China need that gold for? “They buy official gold to internationalize the renminbi. If there are enough reserves behind it, they can make it a credible currency.” He who has the gold makes the rules.

That’s also why China doesn’t allow even one ounce of gold and silver to leave its shores once it enters. As Jansen put it: “The West has been selling gold into a black hole.”

end

 

Insider trading?

(courtesy Mike Bird/Wall Street Journal/GATA)

Market drift suggests some investors may be trading on U.K. data ahead of release

Section:

… Or maybe governments themselves are trading on it. But mainstream financial news organizations don’t dare to look at the evidence that governments are surreptitiously trading markets.

* * *

Market Drift Suggests Some Investors May Be Trading on U.K. Economic Data Ahead of Release

By Mike Bird
The Wall Street Journal
Monday, March 13, 2017

U.K. government-bond futures often move sharply in the 24 hours before sensitive economic reports are released, an analysis of trading data shows, a phenomenon that suggests some investors may be trading with knowledge of official statistics before they are made public.

On average, between April 2011 and December 2016, U.K. government-bond futures correctly anticipated the rise or fall that happened when economic data were published, according to an analysis prepared for The Wall Street Journal by Alexander Kurov, associate professor of finance at West Virginia University. …

… For the remainder of the report:

https://www.wsj.com/articles/market-drift-suggests-some-investors-may-be…

END

A good commentary explaining why the mining companies remain silent against the obvious manipulation in the gold and silver markets

(courtesy ChrisPowell/GATA)

‘Conspiracy’ defines government, and ‘cowardice’ the monetary metals mining industry

Section:

2p ET Tuesday, March 14, 2017

Dear Friend of GATA and Gold:

Our friend T.P. writes:

I have read enough to believe that there is significant manipulation of gold and silver prices.

I hold investments in two gold mining companies in Canada. Would you believe that one company thinks that suppression of gold and silver prices is just a “conspiracy theory”?

The company claims not to see any firm evidence. Yet this company also sells its product to one of the bullion banks (Scotia Bank) that have been implicated in the silver price manipulation lawsuit. To see some evidence one needs only to review the filings coming out of the court in New York, filings in which traders for the investment banks are transcribed discussing and yukking up their successes in gold and silver market manipulation.

.

Putting aside sheer stupidity, how can gold and silver mining companies not understand what is happening right in front of them?

I must surmise that the banks, traders, and the U.S. government authorities have advised the mining companies to stand down. What other reason could it be?

* * *

Not that it has much chance of penetrating the cowardice of any monetary metals mining company, but T.P. and any investor in the monetary metals mining industry might ask the managers of their companies to reconsider “conspiracy theory” as a term of disparagement here.

Dictionary definitions of “conspiracy” go like this: “An evil, unlawful, treacherous, or surreptitious plan formulated in secret by two or more persons” — that is, anything treacherous plotted or implemented in secret.

Of course this is the definition of much of government, even in nominally democratic countries.

T.P. and other investors might ask mining company managers whether they would be allowed to attend, for example, the secret meetings of the Federal Open Market Committee, the Board of Directors of the Bank for International Settlements, the Board of Governors of the International Monetary Fund, or the governing bodies of any central bank.

If those agencies discuss or do anything in secret that is against the interest of monetary metals miners and investors or anyone else, those agencies are by definition conspiracies.

Of course the managers of T.P.’s mining companies are hardly alone. Even the most highly regarded and wealthy managers of companies that mine the monetary metals pretend not to understand this, though one of them, Frank Giustra, indicated in January that he is beginning to suspect that central banks and governments are working against gold prices:

http://www.gata.org/node/17223

If Giustra, a billionaire and confidant of former President Bill Clinton, ever chose to act on his suspicion, he might change the world.

Then monetary metals mining company investors might urge the managers of their companies to review and try rebutting the extensive documentation of government suppression of monetary metals prices compiled by GATA here:

http://www.gata.org/node/14839

Anyone who reviews those documents will discover that far from being mere “conspiracy theory,” gold price suppression is actually long-established Western government policy, recorded in government archives, both public and secret.

That is, there is no “theory” here, only historical fact.

But as hopeless as the monetary metals mining industry seems, there are reasons for its cowardice.

First, the mining industry is the industry most vulnerable to regulation and expropriation by government, being subject to mining permits, mining royalties, and environmental regulations applying to public lands. Any government can shut down a mining company at any time on almost any pretext, and if a government is controlled by the financial interests that congregate around central banks, as most governments are, it will not want the monetary metals competing strongly for investment purposes with central bank-issued currencies and government-issued bonds.

Second, the mining industry is the most capital-intensive industry. That is, opening a mine of any size typically costs billions of dollars, which causes the industry to rely for its financing on the biggest investment banks, which are the most intimate agents and appendages of central banks, the operators of the monetary metals price suppression scheme.

So to ask a gold or silver mining company to overcome its cowardice and to stand up for its shareholders against central banks and governments is asking a lot. But after all these years of price suppression, such companies should ask themselves whether, if, as it seems, they are in danger of dying from futures market derivatives underwritten by governments and central banks, they want to die on their knees or on their feet.

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

* * *

end

Now it is Idaho’s turn to remove income taxation from the precious metals

(courtesy Digg)

Idaho House of Representatives Votes Overwhelmingly to Remove Income Taxation from Precious Metals
 — Published: Tuesday, 14 March 2017 | Print  | Comment – New!

Boise, Idaho (March 14, 2017) – By an overwhelming 56-13 margin, the Idaho House of Representatives today voted to end all Idaho taxation on precious metals, e.g. gold and silver coins and bars.

 

Bill sponsor Representative Mike Moyle (R) and the entire Republican caucus voted for the measure.  If the Republican-controlled Idaho Senate follows suit and Governor Butch Otter (R) signs the bill, Idaho citizens will better be able to use gold and silver as a form of savings which protects against ongoing devaluation of America’s currency.

 

Backed by the Sound Money Defense League, Idaho Freedom Foundation, Money Metals Exchange, and grassroots activists, HB 206 expands Idaho’s existing sales tax exemption to end Idaho income taxation of sales of “precious metals bullion” and “monetized bullion.”

 

“According to the U.S. Constitution, Article I, Section 10, there is only one thing that a state can declare as currency if they think that our federal currency is going out of whack and some might argue that they think our federal currency is going out of whack already,” said Representative Ron Nate (R) from the House floor.

 

“If we are not going to allow people to declare capital losses on their Federal Reserve Notes or their dollar holdings, it would also be unfair to tax people for their gold and silver holdings. Gold and silver is an alternative to holding Federal Reserve Notes and it is the ONLY alternative that the U.S. Constitution says that the state can allow as another currency. It’s unfair to tax it just as [it’s unfair] to tax losses on Federal Reserve Notes” continued Rep. Nate.

 

Under current law, the taxpayer who sells their precious metals may end up with a capital “gain” in terms of Federal Reserve Notes – commonly referred to as “dollars.” This capital ‘gain’ is not necessarily a real gain. It’s often a nominal gain that simply results from the inflation created by the Federal Reserve and the attendant decline in the dollar’s purchasing power. Yet this nominal gain is taxed at the federal level – and taxed again by Idaho.

 

Under HB 206, precious metals gains and losses reported on a taxpayer’s federal income tax return would be removed from the calculation of the taxpayer’s Idaho taxable income.

 

“Policies that discourage precious metals ownership reduce the likelihood that Gem State citizens will take prudent steps to insulate themselves from the inflation and financial turmoil caused by the Federal Reserve System,” said Stefan Gleason, director of the Sound Money Defense League. “Precious metals bullion is already exempt from Idaho’s sales tax. HB 206 removes the final disincentive in Idaho tax law that stands against ownership of the monetary metals.”

 

States are taking actions to defend sound money because the monetary system in America, largely run by the Federal Reserve, has dramatically undermined the purchasing power of the currency to the detriment of savers and wage-earners in particular.

 

Legislators in Utah and Oklahoma have already enacted similar income tax measures and Arizona may enact its own version of HB206 in the new few weeks. Other states such as Tennessee, Maine, and Alabama are working to remove precious metals from the sales tax – just like Idaho and over 20 states have already done.

 

For more information on House Bill 206, please follow this link.
| Digg This

end

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

 
 

1 Chinese yuan vs USA dollar/yuan STRONGER AT  6.9148( REVALUATION NORTHBOUND   /OFFSHORE YUAN NARROWS  TO 6.9043/ Shanghai bourse UP 2.304 POINTS OR .076%   / HANG SANG CLOSED DOWN 1.72 POINTS OR 0.01% 

2. Nikkei closed DOWN 24.25 POINTS OR 0.12%   /USA: YEN FALLS TO 114.87

3. Europe stocks opened ALL IN THE RED      ( /USA dollar index RISES TO  101.61/Euro DOWN to 1.0627

3b Japan 10 year bond yield: RISES TO    +.097%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 114.89/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  47.72  and Brent: 50.84

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.463%/Italian 10 yr bond yield UP  to 2.391%    

3j Greek 10 year bond yield RISES to  : 7.25%   

3k Gold at $1203.65/silver $16.97(8:15 am est)   SILVER  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 65/100 in  roubles/dollar) 59.45-

3m oil into the 47 dollar handle for WTI and 50 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 REVALUATION NORTHBOUND   from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 114.89 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0087 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0719 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +.463%

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 2.611% early this morning. Thirty year rate  at 3.194% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

HELICOPTER MONEY STILL ON THE TABLE FOR THE FUTURE

Global Stocks Drop Ahead Of Fed Rate Decision; Dollar Rises As Sterling Tumbles

European stocks declined for first session in five ahead of Wednesday’s Dutch elections, debt ceiling expiration and the conclusion of the Fed’s 2-day meeting where it is expected to raise rates by 25 bps. Tightening concerns emerged, also dragging down Asian shares and S&P futures, while the dollar continued its rise for a second day. Crude oil has ended its six-day drop. The pound tumbled 0.8% to the lowest since mid-January in a delayed reaction after Theresa May won permission to trigger the country’s departure from the EU. On today’s US calendar, we get the Producer Price Index although most NYC-based traders are likely taking a snow day off or trading from home.

A quick reminder of the key events this week:

  • The Fed’s 26 bps increase is expected on Wednesday.
  • The Bank of England, Swiss National Bank, Bank of Japan and Bank Indonesia are expected to keep monetary policies unchanged on Thursday.
  • The Dutch go to the polls on March 15.
  • G-20 finance ministers will gather in Germany for a series of meetings.
  • Trump is expected to unveil his budget

In a relatively quiet session, the standout move was the plunge sterling which dropped on Tuesday after Britain’s parliament paved the way for Prime Minister Theresa May to launch divorce talks with the European Union. Curiously, on Monday, sterling had jumped 0.4 percent after Scotland’s First Minister Nicola Sturgeon demanded a new independent referendum in late 2018 or early 2019, once the terms of the UK’s exit from the EU are clearer with the delayed selloff coming largely on priced-in news.

Europe’s Stoxx 600 Index was headed for its first decline in five days with every industry except healthcare in the red in early trading. India’s NSE Nifty 50 Index surged to a record and the rupee climbed to an 11-month high after Prime Minister Narendra Modi’s victory in state elections. The yield on 10-year Treasuries remained near the highest level of the year and oil fluctuated after declining for six straight days.

The MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2 percent, while Japan’s Nikkei closed down 0.1 percent. Shares of Toshiba closed up 0.5 percent after plunging as much as 8.8 percent, their biggest one-day loss in almost a month. The company said it would “aggressively consider” a sale of most of Westinghouse and announced it had received approval from regulators to extend for a second time the Tuesday deadline for its official third-quarter earnings. Its statement earlier in the session that it had requested the extension to expand a probe into problems at its U.S. nuclear unit Westinghouse sent the shares tumbling, Reuters reported.

Chinese shares reversed early gains after data showed retail sales dropped more than expected in the first two months of the year, posting their first single-digit Y/Y increase since 2003.

 

Other China data on Tuesday was more upbeat and positive for the global economy, with investment and industrial output expanding more than expected, but investors feared those signs of strength may not be sustainable. China has cut this year’s economic growth target to about 6.5% to give policymakers more room to push through painful reforms to contain financial risks. The economy grew 6.7 percent in 2016, the slowest pace in 26 years. On Monday, Goldman Sachs upgraded Chinese stocks to “overweight” on better growth prospects and a bullish view on the country’s banking sector, a move interpreted by many as a top-tick indicator.

Overnight, Wall Street was mixed, with the Dow Jones Industrial Average down 0.1 percent, while Nasdaq rose 0.24 percent and the S&.SPX was little changed.

According to Bloomberg, putting a damper on risk sentiment today are expectations the Federal Reserve “will raise borrowing costs at a faster pace than was expected at the start of this year have surged as data globally pointed to firming growth and accelerating inflation.” The question for most traders now is how fast the Fed will move, and they hope to get the answer tomorrow in the comments accompanying Wednesday’s expected quarter-point increase for clues. “The market is waiting,” said Peter Schaffrik, global macro strategist at RBC Europe Ltd. “Moves today have been fairly muted. The Fed is clearly on everyone’s mind. The rate hike is a foregone conclusion, so it’s the press conference that’s really relevant.”

“On one hand, the market ponders a surprise hold, in which massive unwinding of positions could take place with the hike already priced in,” Jingyi Pan, market strategist at IG in Singapore, wrote in an note. “On the other hand, concerns have also been paid to an acceleration in the Fed’s path to normalization, where the likelihood of four Fed hikes has been raised, up from the current projection of three,” she said. “The immediate reaction is likely to be seen in the dollar and upsides towards December’s high on the dollar index may be eyed.”

Perhaps in anticipation of a tighter Fed, the dollar index rose another 0.2% at 101.49, extending Monday’s gains following a bout of profit taking at the end of last week. The dollar gained 0.1% to 114.92 yen JPY, but remains below the seven-week high touched on Friday on expectations of a Fed move at the end of a two-day meeting on Wednesday.

Markets are also awaiting a meeting of the Group of 20 finance ministers and central bankers in the German town of Baden Baden starting on Friday, their first meeting since Donald Trump won the U.S. presidential election. U.S. Treasury Secretary Steven Mnuchin will be “pushing hard” to advance U.S. interests in his debut G20 meeting, including reaffirming commitments to avoid competitive currency devaluations, a senior Treasury official said on Monday.

In commodities, oil prices dipped after touching a 3-1/2-month low in the previous session as concerns about rising U.S. production offset optimism about supply cuts by the Organization of Petroleum Exporting Countries. Both WTI and Brent staged a modest rebound, halting 6 days of losses, although just shy of 3 month lows.

Market Snapshot

  • S&P 500 futures down 0.2% to 2,368.50
  • STOXX Europe 600 down 0.2% to 373.77
  • MXAP down 0.09% to 145.38
  • MXAPJ up 0.3% to 468.66
  • Nikkei down 0.1% to 19,609.50
  • Topix down 0.2% to 1,574.90
  • Hang Seng Index down 0.01% to 23,827.95
  • Shanghai Composite up 0.07% to 3,239.33
  • Sensex up 1.9% to 29,484.90
  • Australia S&P/ASX 200 up 0.03% to 5,759.14
  • Kospi up 0.8% to 2,133.78
  • German 10Y yield rose 0.9 bps to 0.48%
  • Euro down 0.08% to 1.0644 per US$
  • Brent Futures up 0.2% to $51.47/bbl
  • Italian 10Y yield fell 0.3 bps to 2.364%
  • Spanish 10Y yield rose 2.3 bps to 1.929%
  • Brent Futures up 0.2% to $51.47/bbl
  • Gold spot down 0.09% to $1,203.19
  • U.S. Dollar Index up 0.3% to 101.56

Top Overnight News

  • Monsanto Loses Bid to Seal Documents Related to Ex-EPA Official
  • Trump’s Border Wall Likely a Boon for Martin Marietta, Says CEO
  • Synopsys to Replace Harman International in S&P 500 Index
  • Spain’s Popular Said to Tap UBS to Explore Sale of U.S. Bank
  • China’s Economy Holds Momentum as Output, Investment Accelerate
  • Oil Holds Losses as U.S. Crude Stockpiles Seen Rising 10th Week
  • BMW Being Probed by U.S. Over Car Leases to Military Members
  • Trump, Xi Said to Discuss Mar-a-Lago Summit Amid Korea Tensions
  • Pfizer Launches Zavicefta Antibiotic in U.K., Germany
  • GE Wins Contract to Supply Its Largest Gas Turbine in China
  • Physicians Realty Trust Stock Offering Priced at $18.20 Apiece

Asia equity markets traded mixed after a mixed close on Wall Street as a non-committal tone persisted ahead of key risk events. ASX 200 (Unch.) closed relatively flat with outperformance seen in commodity related sectors after copper and iron ore prices rose by around 1% and 2% respectively, while Nikkei 225 (-0.1%) was subdued by a firmer currency with USD/JPY failing to reclaim 115.00. Shanghai Comp. (+0.1%) and Hang Seng (-0.1%) were choppy after the PBoC slightly increased its liquidity injections and as participants digested mixed data in which Chinese Industrial Production beat expectations to print a 6-month high, although Retail Sales disappointed and showed the weakest start since 2002. The Nifty (+1.6%) outperformed to hit a fresh all-time high as India returned from a long weekend and reacted to state election results in which the ruling BJP party won a landslide victory in the country’s largest state of Uttar Pradesh, which highlighted political stability and confidence in PM Modi’s government. 10yr JGBs were mildly higher amid a subdued tone in riskier Japanese assets and after a mixed 20yr auction where the b/c slightly declined, but prices rose from the prior month.

Top Asian News

  • China Bond Default Woes Deepen as Steel Producer Misses Payment
  • Mitsubishi Heavy Shares Jump as Damages Due to Edison Capped
  • PBOC Saps Funds for 14th Straight Day as Hoarding Period Looms
  • Modi’s Victory Sends Indian Stocks to Record, Rupee Advances
  • Morgan Stanley Sees China Bonds in Key Indexes in Three Years
  • Rupee Snaps Rally on RBI Speculation, Others Quiet: Asian NDFs

UK House of Lords passed the Brexit bill without the EU citizen rights or final vote amendments after House of Commons rejected amendments, with reports stating that Parliament also granted UK PM May permission to start Brexit. Furthermore, it is now expected that the UK will trigger Article 50 in the last week of March rather than this week, with UK Brexit Minister Davis stating Article 50 will be triggered by the end of this month as planned. The BoE accepts resignation of Charlotte Hogg in the wake of the central banker failing to disclose her brother’s position at Barclays.

Top European News

  • Amundi Starts Rights Offering; Credit Agricole Stake to Drop
  • Prudential Full-Year Operating Profit Rises 7% on Asia Business
  • RWE Sees Profit Rising This Year on Trading, Innogy Units
  • Aker Solutions Surges on Report of Halliburton Deal Talks
  • May Eyes Late-March Brexit Trigger as Parliament Clears Way
  • Scottish Referendum May Re-Open Pressure Points for Markets
  • No Trichet Flashback for Poland as CPI Jolts Eastern Europe
  • Fraport, Vinci Interested in Belgrade Airport: Blic
  • Popular Seeks to Sell Private Banking Unit: Independiente

In currencies, he Bloomberg Dollar Spot Index gained 0.2 percent at 9:55 a.m. in London, up for a second day. The British pound led losses, weakening by as much as 0.9 percent before trading 0.8 percent lower. The euro slipped 0.1 percent to $1.0639, following a 0.2 percent drop Monday. Cable was the overnight standout, taking another sharp hit, as the 2 Houses of Parliament finally agree on the Brexit Bill, giving the green light to trigger Article 50. Some will point to a knee jerk response from the market, but with the House of Lords having effectively undermined the government with its amendment proposals, PM May’s negotiating powers may/will have been impaired. Cable has tested 1.2100, but has so far held, while EUR/GBP has retested the resistance ahead of 0.8800, but this also holding for now.

In commodities, oil traded near a three-month low as U.S. crude stockpiles were seen rising for a 10th week, but West Texas Intermediate managed to add 0.4 percent to $48.61 a barrel. Aluminum led a decline in industrial metals, falling 0.5 percent to $1,871.50 a metric ton as China, the largest producer, increased output to a record. Gold was little changed at $1,203.72 an ounce as investors prepared to assess the tone of the Fed’s commentary. In the run up to the FOMC meeting, the commodities market is trading a tight range, with some of the losses seen in Oil and Copper specifically having tailed off over the last 24- 36 hours or so. Oil prices are set to stay pressured however, as the market is focusing on the next OPEC meeting in Jun, and looking to further agreements on production given the impact on inventory so far. Concerns over Shale production have also heightened, keeping WTI below the USD50.00 mark. Copper is back above USD2.60, but all down to the disruptions (strikes) in key mines in Chile and Peru. Base metals all looking heavy, with Lead underperforming. Gold continues to hover above USD1200.00, and is looking a little more resilient given the fresh drop-off in Treasuries ahead of Wednesday’s key policy meeting.

Looking at the day ahead, in the US the February PPI report is due to be released as well as the latest NFIB small business optimism print, which missed expectations. Away from the data Dutch party leaders are due to hold a final debate this evening ahead of tomorrow’s election. Meanwhile a meeting which had been scheduled between President Trump and Chancellor Merkel today has now been postponed to Friday given the concerns over the storm.

US Event Calendar:

  • 6am: NFIB Small Business Optimism 105.3, est. 105.6, prior 105.9
  • 8:30am: PPI Final Demand MoM, est. 0.1%, prior 0.6%
    • PPI Ex Food and Energy MoM, est. 0.2%, prior 0.4%
    • PPI Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.2%
    • PPI Final Demand YoY, est. 1.9%, prior 1.6%
    • PPI Ex Food and Energy YoY, est. 1.5%, prior 1.2%
    • PPI Ex Food, Energy, Trade YoY, prior 1.6%

DB’s Jim Reid concludes the overnight wrap

The calm before the storm is the probably the best way to describe how markets have kicked off this week. Ahead of much bigger events starting tomorrow and continuing into the end of the week – namely the Fed, BoJ, BoE, Dutch election, US data, G-20 meeting and Trump budget – it was a fairly quiet start to the week for the most part yesterday. The most significant news concerned the UK where Brexit headlines dominated. Late last night we got the news that Parliament has passed the legislation which allows PM May’s government to go ahead with triggering Article 50. That came after the House of Commons overturned the House of Lords amendments which had included guaranteed rights for EU citizens in the UK and also the amendment concerning giving Parliament a ‘meaningful vote’ on May’s negotiation terms with the EU. May is now expected to address the House of Commons today however it’s still unclear when exactly she will look to start the formal process of leaving the EU although the FT did cite government figures as saying that the last week of March is most likely.

Indeed it was highlighted separately that the formal process would unlikely start before the EU celebrations to mark the 60th anniversary of the EU’s founding treaty on March 25th in Rome, as well this week’s Dutch election and the Scottish National Party conference this weekend. With British Parliament on recess on March 31st that makes the days from March 27th-30th most likely. Meanwhile that news last night also comes after Scotland’s First Minister Nicola Sturgeon announced her plan to call another Scottish independence vote by spring 2019. It’s expected that Sturgeon will ask Scottish parliament to vote to authorize such next week. That wasn’t all with Sinn Fein leader Michelle O’Neil also quoted as saying that a referendum in Northern Ireland “has to happen as soon as possible”. So well worth keeping an eye on things over the coming days.

Sterling initially rallied yesterday on the Scottish independence vote headlines, touching an intraday high of $1.225 in the afternoon (about +0.69% on the day) before easing back in the evening session. It’s down a bit more this morning and back to $1.220 although still up about +0.30% versus Friday’s close. The FTSE 100 also edged up +0.33% and 10y Gilt yields were +1.6bps higher at 1.244% although the news that Parliament had passed legislation did come after markets closed.

Away from that equity markets weren’t hugely exciting elsewhere. The S&P 500 (+0.04%) seemingly started the process of battening down the hatches early for storm Stella with volumes well below the usual average. The Stoxx 600 did close up +0.38% helped by a decent session for the miners with commodities largely stabilizing or having a solid session (Gold -0.03%, Copper +1.12%, Iron Ore +1.78%, WTI Oil -0.19%). Bonds were a bit more exciting though. 10y Treasury yields reached a new two and a half year high at 2.626% (+5.1bps) with corporate issuance again enjoying another bumper day which weighed on Treasuries. In contrast 10y Bund yields were actually -1.2bps lower at 0.467% after the ECB’s Smets was quoted in the WSJ as saying that the ECB’s latest policy statement “does not in itself signal a change in the monetary policy stance”.

This morning in Asia the focus has by and large turned over to another batch of data out of China with the release of the latest activity indicators. In summary the data suggests that China has, on the whole, started the year on a firm footing. Indeed industrial production was revealed as rising +6.3% yoy (vs. +6.2% expected) in the first two months of the year from +6.0% in December while fixed asset investment climbed materially to +8.9% yoy (vs. +8.% expected) from +8.1% in the same period. Retail sales data was less upbeat however with sales softening from +10.4% to +9.5% yoy (vs. +10.6% expected) with the impact of tax changes on small engine cars seemingly having a big impact. Market wise there hasn’t been much of a reaction with bourses in China pretty much unchanged as we go to print along with the Hang Seng. Elsewhere the Nikkei (-0.13%) has edged a bit lower while the Kospi (+0.65%) is higher for a second successive day.

While we’re on China it’s worth highlighting a potential date for your diary. Over April 6th-7th President Trump is planning to host China President Xi Jinping in Florida with the escalating tension around North Korea expected to be high on the agenda. We should get confirmation of the meeting this week.

Staying on the subject, yesterday was a quiet day for data but we did get the latest ECB CSPP holdings data. As of March 10th the ECB reported total holdings of €70.43bn which implies net purchases settled last week of €2.09bn. That works out to be an average daily run rate of €417m and another strong, above average week of purchases compared to the €367m average daily run rate since the program started.

Before we wrap up, a quick mention that yesterday our House View team published their latest report called ‘Policy landscape remains in focus’. They note that potential shifts to the policy landscape remain in focus for markets, where uncertainty still reigns on most fronts. Polls for the French Presidential Election have tightened. A Le Pen victory remains unlikely but cannot be ruled out. Politics will continue to be at the fore elsewhere in Europe, with the Dutch election, the UK triggering Art. 50, turmoil in Italy and ongoing negotiations with Greece. Prospects for the key pillars of Trump’s economic agenda also remain uncertain. Markets have better clarity on other fronts: a chorus of more hawkish Fed rhetoric jolted expectations for a March hike. Counterbalancing this uncertainty is a broad-based uptick in global growth momentum, which has supported market sentiment. In the US, surveys point to robust growth, and consumer and business sentiment are showing signs of animal spirits, though hard data have been somewhat weaker. Europe has been an upside surprise, with supportive data tilting the balance of risks in a more positive direction. The growth story is also cautiously more positive in China and EM more broadly.

Looking at the day ahead, this morning in Europe the main focus should be on Germany where we will get the final revisions to the February CPI report, along with the March ZEW survey which is expected to showing a slight improvement in sentiment. Industrial production data for the Euro area is also due to be released. Over in the US this afternoon the February PPI report is due to be released as well as the latest NFIB small business optimism print. Away from the data Dutch party leaders are due to hold a final debate this evening ahead of tomorrow’s election. Meanwhile a meeting which had been scheduled between President Trump and Chancellor Merkel today has now been postponed to Friday given the concerns over the storm.

3. ASIAN AFFAIRS

i)Late  MONDAY night/TUESDAY morning: Shanghai closed UP 2.304 POINTS OR .07%/ /Hang Sang CLOSED DOWN 1.72POINTS OR 0.01% . The Nikkei closed DOWN 24.25 POINTS OR 0.12% /Australia’s all ordinaires  CLOSED UP 0.06%/Chinese yuan (ONSHORE) closed UP at 6.9148/Oil FELL to 47.72 dollars per barrel for WTI and 50.84 for Brent. Stocks in Europe ALL IN THE RED  ..Offshore yuan trades  6.9043 yuan to the dollar vs 6.9148  for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS CONSIDERABLY/ ONSHORE YUAN STRONGER BUT  THE OFFSHORE YUAN IS WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA SENDS A MESSAGE TO THE USA NOT TO RAISE RATES

3a)THAILAND/SOUTH KOREA/NORTH KOREA

Good reason for gold to fall this morning:  North Korea threatens the USA with merciless strikes:

(courtesy zerohedge)

North Korea Threatens US With “Merciless Strikes” As US Carrier Arrives

One day after South Korea press reported that US special forces, including a Delta Force team and the infamous SEAL Team 6 are participating in local drills, practicing the removal of Kim Jong-un as well as the infiltration and destruction of North Korea’s weapons of mass destruction, North Korea threatened the US with “merciless” attacks if an aircraft carrier strike group led by the USS Carl Vinson, which is currently taking part in joint South Korean drills “infringes on its sovereignty or dignity”, Reuters reported on Tuesday.

North Korea said the arrival of the U.S. strike group was part of a “reckless scheme” to attack it.

“If they infringe on the DPRK’s sovereignty and dignity even a bit, its army will launch merciless ultra-precision strikes from ground, air, sea and underwater,” the North’s state news agency KCNA adding that “on March 11 alone, many enemy carrier-based aircraft flew along a course near territorial air and waters of the DPRK to stage drills of dropping bombs and making surprise attacks on the ground targets of its army.”

Meanwhile, a US Navy spokesman told Reuters the Carl Vinson was on a regular, scheduled deployment to the region during which it would take part in exercises with the forces of ally South Korea. Last week, North Korea fired four ballistic missiles into the sea off Japan in response to annual U.S.-South Korea military drills, which the North sees as preparation for war.

North Korea’s warning comes as Secretary of State Rex Tillerson is due to make his first visit to South Korea on Friday. Last week, the U.S. ambassador to the United Nations said President Donald Trump’s administration was re-evaluating its North Korea strategy and “all options are on the table.”

As reported last night, and adding regional tension, China has been vehemently opposed to the deployment in South Korea of an advanced U.S. anti-missile system. According to the SCMP, a retired PLA general, Wang Hongguang, said that China is set to deploy anti-radar countermeasures which will neutralize the South Korean THAAD.

“We will complete our deployment before THAAD begins operations. There is no need to wait for two months [before the election of the next South Korean president],” he said on the sidelines of the political sessions in Beijing. “We already have such equipment in place. We just have to move it to the right spot.”

The United States and South Korea say the Terminal High Altitude Area Defense anti-missile system is for defense against North Korea, but China fears its powerful radar can probe deep into its territory and compromise its security. The United States began to deploy the system a week ago, a day after North Korea launched its latest four missile tests.

As a reminder, South Korean and U.S. troops began the large-scale joint drills, which are billed as defensive in nature, on March 1. The exercise last year involved about 17,000 American troops and more than 300,000 South Koreans. South Korea has said this year’s exercise would be of a similar scale.

Additionally, the United States has also started to deploy “Gray Eagle” attack drones to South Korea, a U.S. military spokesman said on Monday. China says the exercises do nothing to ease tension. Last week, it called on North Korea to stop its weapons tests and for South Korea and the United States to stop their drills.

A state-run Chinese newspaper said the USS Carl Vinson was taking part in a simulation of a preemptive strike against North Korea’s nuclear and missile facilities. The drills sent the North “an explicit radical threat”, to which it could not be expected to remain indifferent, the influential Global Times said. North and South Korea were “equally hysterical”, it said. “The U.S. and South Korea often accuse China of being uncooperative, but the reality is they are uncooperative over China’s mediation,” it said, referring to complaints that China does not do enough to rein in old ally North Korea.

Finally, the latest breakdown of US naval forces around the globe is shown below, courtesy of Stratfor.

(courtesy zerohedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

Chinese retail sales growth, the worst start to a year since 2002

(courtesy zero hedge)

China Suffers Worst Start To A Year For Retail Sales Growth Since 2002

With its credit impulse wearing off (and inflation spikes stalling any hopes of renewed stimulus anytime soon), it appears China’s always-happy consumer is not so happy as 2017 begins.

 

Against expectations of a 10.6% year-over-year gain in year-to-date cumulative retail sales, February saw just a 9.5% rise – the weakest February since 2002.

Presumably there is some lunar-new-year adjustment that will rescue this terrible print from its 15 year lows but we note once again that every one of the 37 analysts over-estimated (or forgot to read the calendar).

This was a 4 standard deviation miss…

China is not happy with the USA deployment of the THAAD anti missile system into South Korea as their first strike ability would be compromised!

(courtesy zero hedge)

China Prepares Countermeasures Against South Korea Missile Shield

The recent deployment by South Korea of the controversial US-made Terminal High Altitude Area ­Defence (THAAD) anti-missile system in response to potential ballistic threats from North Korea, has led to a furious response by China, whose first-strike ability would be compromised under the existing military configuration.  And as BBC reports, “the deployment in South Korea of the US Terminal High Altitude Area Defense (THAAD) missile defense system has been slammed by Beijing. Now the Chinese Communist Party is calling on its people to embrace their ill will towards their neighbours” and notes that as anti South-Korea fever sweep China, local school students chant “Boycott Sth Korea!”, and smash South Korean appliances as the “communist Party unleashes anti-Korea spirit.”

However, while eliciting up a traditional nationalistic response by China was to be expected, what is more troubling is that according to the South China Morning Post, China is set to deploy anti-radar countermeasures which will neutralize the South Korean THAAD. The THAAD system consists of a sophisticated radar and interceptor missiles designed to spot and knock out incoming ballistic missiles.

Speaking to retired PLA general Wang Hongguang, the SCMP reports that China knew it might not be able to stop Seoul deploying a US anti-missile system “and was prepared to counter with its own anti-radar equipment.” The comments came as a South Korean court’s decision to uphold the impeachment of former president Park Geun-hye had fanned hopes Seoul might put plans for the Terminal High Altitude Area Defence system on hold.  Park supported the installation of the system to help protect South Korea against threats from North Korea, which Beijing says can peer through China’s defences. However, such a de-escalation does not appear to be imminent.

Wang, former deputy commander of the Nanjing Military Region, said China could not take the chance the next South Korean president would change policy and roll back the deployment, and added that Beijing had measures in place to neutralize THAAD’s radars.

We will complete our deployment before THAAD begins operations. There is no need to wait for two months [before the election of the next South Korean president],” he said on the sidelines of the political sessions in Beijing. “We already have such equipment in place. We just have to move it to the right spot.”

Going even further, Yue Gang, a military commentator and former People’s Liberation Army colonel, said China could either destroy THAAD or neutralise it. However, he hedged by adding that “destroying [THAAD] should only be an option during wartime.” However, China could and would interfere with the system’s functions through electromagnetic technology, he said. Yue said an ideal place to install the Chinese equipment was on the Shandong peninsula on the country’s east coast, opposite South Korea.

Quoted by SCMP, Fu Qianshao, an aviation equipment expert with the PLA Air Force, said China could also send planes – manned or unmanned – to fly close to THAAD to interfere with its radar signals. All the country’s armed forces had the capacity to interfere with radar signals, Fu said.

Wang said China’s chief concern was not just with South Korea’s deployment of the American system but also the United States’ broader potential to contain the region in a sophisticated web of missile defence systems in Japan, Singapore, the Philippines and even Taiwan.

Stated differently, the ongoing diplomatic escalation between China and South Korea over THAAD is really just China lashing out against the ongoing interefence by the US, which seeks to blanket its allies in the region in a mesh that would eliminate China’s tactical first strike advantage, in the process putting the precariouar nuclear balance of power in the region in jeopardy, the same way that the deployment of the US Aegis ashore anti-missile shielf system in Eastern Europe has put Russia on edge, as it too, has lost its first strike capabilities, if only for now.  The question, for both China and Russia, is what deterrence they will unveil in response, as a “game theoretical” layout in which two nuclear-armed superpowers suddenly finds themselves questioning their offensive supriority never leads to favorable outcomes, at least in (game) theory.

end

4. EUROPEAN AFFAIRS

UK/last night

UK Parliament passes approval such that Theresa May may invoke Article 50 by this Thursday

(courtesy zero hedge)

U.K. Parliament Gives Theresa May Approval To Start Brexit

Moments ago, UK Parliament passed legislation giving prime minister Theresa May approval to start the Brexit process and allowing the government to invoke Article 50, with the House of Commons overturning amendments from the unelected House of Lords that sought to limit May’s room for maneuver.  While press reports earlier said May could trigger Article 50 as early as Thursday, subsequent reports from Bloomberg suggested that she will commence Brexit in the last week of March.

The victory for May in Parliament, where she has a slim majority, allows her to negotiate Brexit with a free hand and consolidates her hold on power in the ruling Conservative Party. That said, according to Bloomberg she now faces the simultaneous challenge of pulling Britain out of the EU on good terms while navigating a second constitutional upheaval: Scotland’s renewed bid for independence.

On Monday evening, lawmakers rejected two revisions by unelected peers which would have guaranteed rights for EU citizens living in the U.K. and given Parliament a final binding say on what May negotiates with the EU. The government argued against the changes, saying it wanted to preserve May’s flexibility in the talks. While some Tories had signaled they might vote against the government, several would-be rebels fell into line, or abstained. As Bloomberg adds, May will address the House of Commons on Tuesday, although she isn’t expected to fire the starting gun on exit talks yet.

Waiting until the end of the month will avoid souring the March 25 celebrations in Rome of the 60th anniversary of the EU’s founding treaty and allow her to avoid the Dutch election on March 15 and the Scottish National Party’s conference on March 17-18. With March 26 a Sunday and the British Parliament on recess on March 31, the likeliest days for the notification are March 27 to March 30, a Bloomberg source said.

Once May pulls the plug, the EU would respond to an Article 50 notification within 48 hours European Council President Donald Tusk said last week that. The European Commission will then publish legal rules for the talks, spokesman Margaritis Schinas said on Tuesday.

Potentially complicating matters for May is the announcement earlier on Monday by Scottish First Minister Nicola Sturgeon that in one week she would start the process of getting permission to hold a second independence referendum. Scotland voted to remain in the EU and Sturgeon says May’s determination to take Britain out of the single market against Scotland’s wishes makes a plebiscite necessary to address a “democratic deficit.”

As Bloomberg notes, Sturgeon’s threat means the harder the break with the EU, the louder the calls for Scotland to secede will be. Nick Macpherson, a former Treasury official, last week tweeted that the government’s “uncompromising approach to tearing up partial membership” of the EU was “putting at risk the 300 year Union which made Britain Great.”

As for the market’s reaction, with sterling having tumbled in recent weeks, the response to the news was non-existent, as cable barely moved by 5 pips.

end

GREECE

Over in Greece citizens are rioting with shepherd crooks

(courtesy Lang/SHTFplan.com)

“The Powers-That-Be Have Looted Everything” – Greek Farmers Fight Riot Police With Shepherd Crooks

Authored by Daniel Lang via SHTFplan.com,

The economic and social disintegration of Greece used to be big news.

However it’s largely been overshadowed by the migrant crisis, and the American media hardly reports on Greece anymore. If you’ve been out of the loop, allow me to get you caught up on the financial situation in that country, by giving two answers to the questions you’re probably thinking. Yes, the Greek government still sucks. And yes, the people of Greece are still really pissed off.

Believe it or not, riots are still a common occurrence in that country. In fact there was an incident last week in Athens, after the government tried to increase taxes and social security contributions. In response, over a thousand farmers from Crete, who used to be immune from these taxes, took a ferry to Athens and proceeded to riot outside of the agriculture ministry building.

This however wasn’t an ordinary riot, not even by Greek standards. The farmers fought the riot police with shepherd crooks.

Taxes are being hiked to satisfy inspectors who represent the international creditors who Greece’s debt. If the government can’t pay 7 billion euros by July, then the country will once again face the possibility of default. However, the farmers are determined to change their Leftist government’s mind about the tax hikes. One of the protesting farmers who spoke to The Guardian stated that “We want to have them take back everything they have encumbered us with. To us, it seems like the powers that be have looted everything.”

end

 

FRANCE

Fillon is formally charged with misuse of public funds and that should cause him to remove himself from the race:

(courtesy zero hedge)

Fillon Formally Charged With Misuse Of Pubic Funds, French Stocks Tumble

Having explored the various ‘-gates’ that are hovering over French presidential candidate Francois Fillon this morning, it appears his vow to keep fighting may just be about to end. France’s Canard Enchaine reports that Fillon has been formally charged today with misuse of public funds (over parliamentary jobs for his family).

Since announcing he would not be forced out, Fillon’s support has risen but flatlined.

Canard Enchaine says on its official Twitter account that Fillon is charged and says the news will be reported in its Wednesday printed edition.

Translated via Google: the Tweet from Canard Enchaine notes:

Fillon has been indicted on 14 March in the morning for embezzlement utilities, ABS, etc

Fillon’s lawyer and spokeswoman were not immediately available to comment.

The initial reaction to the news was the French stock market legging to the day’s lows…

Fillon is not alone though, as Bloomberg reports that French tax authorities are auditing the assets of presidential candidate Marine Le Pen’s family on suspicion that they undervalued two mansions near Paris, Le Monde reports, citing unnamed sources.

  • Properties covered by audit are jointly owned by Le Pen, her father Jean-Marie Le Pen, and other family members: Le Monde
  • Audits focus on possible underpayment of wealth and inheritance taxes: Le Monde

Her lawyer Frederic Joachim told Le Monde that they contest the tax authorities’ claims and that one of the houses is in too poor a state to fetch the price claimed by the tax authorities

END

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Turkey states that the “Migrant deal” in which it collected 3 billion dollars has now ended as Erdogan states that Europe did not live up to its bargain. Turkey may unleash millions of refugees into Greece:

(courtesy zerohedge)

Turkey Says “Migrant Deal Has Ended”, May Unleash Millions Of Refugees

As we noted moments ago, the tit-for-tat aggression resumed its escalation between Turkey and the Netherlands, with Turkish Deputy Prime Minister Numan Kurtulmus exclaiming from Ankara that “Europe’s politicians are under fascist, neo-nazi influence” and in response, Turkey will suspend all high-level diplomatic meetings and cancel all flight permissions for Dutch politicians.

As part of its furious response, Turkey said it would impose various travel sanctions on Dutch diplomats such as halting all high-level political discussions with the Netherlands in the wake of the Dutch government’s decision to bar two cabinet ministers from campaigning in the country. Kurtulmus said during a news conference following a weekly cabinet meeting that Ankara also is closing its air space to Dutch diplomats until the Netherlands meets Turkish requests, according to the AP.

Kurtulmus also says the Dutch ambassador to Turkey, who was traveling when the diplomatic row started, won’t be allowed to return, and said that Turkey’s government plans to advise parliament to withdraw from a Dutch-Turkish friendship group.

It was unclear what the sudden Turkish escalation means for economic ties between the two nations: as a reminder,  Dutch direct investment in Turkey amounts to $22 billion, making the Netherlands the biggest source of foreign investment with a share of 16%.  Furthermore, Turkish exports to the Netherlands totalled $3.6 billion in 2016, making it the tenth largest market for Turkish goods, according to the Turkish Statistical Institute. Turkey imported $3 billion worth of Dutch goods in 2016. Should the diplomatic spat lead to a collapse in trade relations, a Turkey recession is all but assured.

Kurtulmus said the political sanctions will apply until the Netherlands takes steps to “redress” its actions. He said: “There is a crisis and a very deep one. We didn’t create this crisis or bring to this stage.”

However the most troubling development, and one which has the potential to sway the outcome of the Dutch election which will be held in less than two days, is that in the final power play aimed towards Merkel, Kurtulmus exclaimed that since Europe has not kept its promises on the migrant deal, for us that agreement has ended.

Which means that one year after it collected $3 billion for the migrant deal, Turkey has just voided the agreement, and the next step would be that Turkey is about to flood Europe with refugees currently held inside Turkish borders. And since by some estimates Turkey currently harbors over 2 million potential migrants, Europe’s refugee situation is about to get far worse, and as a corollary, support for anti-immigrant political organizations across the continent is about to take another step function higher.

END

6.GLOBAL ISSUES

7. OIL ISSUES

Down goes oil on a report that the Saudis did not cut production but actually increased production back to over 10 million barrels per day from a supposed 9.797 million barrels.

(courtesy zero hedge)

Oil Tumbles After Saudis Report Big Jump In Production; Kuwait Warns Of Drop To $45

Just as WTI was trying to record its first increase in 6 days, the latest, March, OPEC monthly report was released which revealed something surprising: while secondary sources claimed that Saudi Arabia production declined by 68kbpd to 9.797mmbpd, according to Saudi’s own numbers, the kingdom ramped up production in February by a whopping 263kpb, back over 10 million barrels per day.

While the Saudi surge was a surprise, the kingdom contained itself to producing within its permitted quota, which as per the Vienna agreement is at 10.058mmbpd.

Perhaps just as concerning is that as a result of the vast gap between the self-reported Saudi production, and the far lower secondary sourced one, the official OPEC production number is now quite suspect: according to the cartel, in February, total production declined by 140kbpd to 31.958mmpd, however thwas number is driven by a Saudi number that is over 200kbps below the one reported by Saudi Arabia itself, and as such one can argue that in February total OPEC production actually rose if using primary source data.

Finally, the straw that broke the oil rebound’s back came from Kuwait’s oil minister, Issam Almarzooq, who said at the same time as the OPEc report was released that oil risks dropping to $45/barrel as a result of rising shale production, as well as other factors.

The result: WTI has tumbled following the OPEC report and Kuwait statement.

Erasing the entire OPEC production cut surge.

(courtesy zero hedge)

(courtesy zero hedge)

(courtesy zero hedge)

WTI/RBOB Kneejerk Higher After Unexpected Inventory Drawdown

After the Saudis spoiled the energy party early on (and tried to talk it back for the rest of the day), API reported an unexpected 531k Crude draw (the first drawdown in 2017). While Cushing saw a notable build (over 2mm – biggest since Dec 2016), Gasoline and Distillates had big draws and that sent WTI and RBOB prices higher.

 

API

  • Crude -531k (+3.13mm exp)
  • Cushing +2.06mm
  • Gasoline -3.875mm (-2mm exp)
  • Distillates -4.07mm

The unexpected crude drawdown ends the 9 week streak of builds, but Cushing’s build was the largest in over 3 months. This is the 4th weekly draw in Gasoline (seasonally appropriate)

 

The overnight drop in WTI leaked back higher after the Saudis tried to explain why/how they cheated (note, RBOB managed to get green by the close). Notice the small run higher in WTI/RBOB before the data was released, then jumped as the data hit… RBOB tagged 1.60 stops and WTI 48.50…

end

8. EMERGING MARKETS

end

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

Euro/USA   1.0627 DOWN .0023/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP WINS THE ELECTION/USA READY TO GO ON A SPENDING BINGE WITH THE TRUMP VICTORY/ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/USA RAISING INTEREST RATE/EUROPE BOURSES all in the RED/   

USA/JAPAN YEN 114.89 DOWN 0.022(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2134 UP .0066 (Brexit by March 201/UK government loses case/parliament must vote/PRIME MINISTER MAY  DECIDES ON A HARD BREXIT/PARLIAMENT PASSES BILL TO BEGIN THE ARTICLE 50 PROCESS AND  THE BREXIT/AND NOW A NEW SCOTLAND REFERENDUM IS ON THE TABLE)

USA/CAN 1.383 UP .0032 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU)

Early THIS TUESDAY morning in Europe, the Euro FELL by 23 basis points, trading now WELL BELOW the important 1.08 level RISING to 1.0627; 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 2.304 POINTS OR 0.07%     / Hang Sang  CLOSED DOWN 1.72 POINTS OR 0.01% /AUSTRALIA  CLOSED UP 0.06%  / EUROPEAN BOURSES ALL IN THE RED 

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

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

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

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

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

The NIKKEI: this TUESDAY morning CLOSED DOWN 24.25 POINTS OR 0.12% 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 1.72 POINTS OR 0.01%       / SHANGHAI CLOSED UP 2.304 OR .07%/Australia BOURSE CLOSED UP 0.06%/Nikkei (Japan)CLOSED DOWN 24.25 POINTS OR 0.12%  /  INDIA’S SENSEX IN THE  GREEN

Gold very early morning trading: $1205.00

silver:$16.97

Early TUESDAY morning USA 10 year bond yield: 2.611% !!! DOWN 2 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  3.194, DOWN 2 IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 101.61 UP 24 CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 3.983% DOWN 5  in basis point yield from MONDAY 

JAPANESE BOND YIELD: +.097%  UP 7/10  in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.883%  DOWN 5 IN basis point yield from  MONDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.353 DOWN 2 POINTS  in basis point yield from MONDAY 

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

GERMAN 10 YR BOND YIELD: +.450% DOWN 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.0638 DOWN .0012 (Euro DOWN 12 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 114.58 DOWN: 0.332(Yen UP 33 basis points/ 

Great Britain/USA 1.2159 DOWN 0.0045( POUND DOWN 45 basis points)

USA/Canada 1.3485 UP 0.0034(Canadian dollar DOWN 34 basis points AS OIL FELL TO $47.36

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This afternoon, the Euro was DOWN by 12 basis points to trade at 1.0638

The Yen ROSE to 114.58 for a GAIN of 33 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL 45  basis points, trading at 1.2159/

The Canadian dollar FELL  by 34 basis points to 1.3485,  WITH WTI OIL FALLING TO :  $47.36

The USA/Yuan closed at 6.9129/
the 10 yr Japanese bond yield closed at +.097% UP 7/10 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 1  IN basis points from MONDAY at 2.593% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.1720 DOWN 1  in basis points on the day /

Your closing USA dollar index, 101.50 UP 13  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 9.23 OR 0.13% 
German Dax :CLOSED DOWN 1.24 POINTS OR 0.01%
Paris Cac  CLOSED DOWN 25.34 OR 0.51%
Spain IBEX CLOSED DOWN 94.00 POINTS OR 0.94%
Italian MIB: CLOSED DOWN 169.55 POINTS OR 0.86%

The Dow closed DOWN 44.11 OR 0.27%

NASDAQ WAS closed DOWN 18.97 POINTS OR 0.32%  4.00 PM EST
WTI Oil price;  47.36 at 1:00 pm; 

Brent Oil: 50.42  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.38 DOWN 57/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES TO +0.450%  FOR THE 10 YR BOND  1:30 EST

END

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

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

WTI CRUDE OIL PRICE 5 PM:$48.42

BRENT: $51.63

USA 10 YR BOND YIELD: 2.602%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.179%

EURO/USA DOLLAR CROSS:  1.0604 DOWN .0047

USA/JAPANESE YEN:114.77   DOWN .136

USA DOLLAR INDEX: 101.76  UP 39  cents ( HUGE resistance at 101.80 broken)

The British pound at 5 pm: Great Britain Pound/USA: 1.2152 : DOWN 53 BASIS POINTS.

Canadian dollar: 1.3482  UP .0031

German 10 yr bond yield at 5 pm: +.450%

END

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

TRADING IN GRAPH FORM

Stocks Drop, Bonds Pop As Crude & Credit Crash Continues

Overheard in the Oval Office when Yellen unleashes her rate hike into dismal economic growth expectations tomorrow…

 

Since the last fed rate hike, bonds are lower, banks are best…

 

Trannies and Small Caps are in the red since the last Fed rate hike…

 

A down day for stocks…but the dip-buyers were active once again after Europe closed…

 

Goldman is down 10 days in a row…

 

SNAP is ugly…

 

VIX was chaotic into the close – gapping all over the place…

 

For the first time since prior to the election, HYG (the high yield corporate bond ETF) has broken below its 200-day moving average

 

And for a change bonds rallied…

 

The first recoupling for stocks and bonds in 2 weeks…

 

The Dollar Index rose driven by EUR weakness…

 

March continues to be an ugly month for commodities (especially Crude and Silver)…

 

Crude tested to $47.09 intraday after Saudis admitted chwating onm the production cust (and then desperately jawboned thei way out)

 

Gold fell back below $1200 into the close and Bitcoin reached above $1250…

 

Here’s 4 interesting charts as we head into The Fed decision…

“Probably Nothing” – give stocks the benefit of the doubt, right? When have they ever got it wrong?

Finally, as we noted earlier, as GDP growth expectations have plunged so April Fed Funds futures have tumbled – completely against the common sense that The Fed hikes into strength, not weakness…

If the current Atlanta Fed GDPNow forecast is correct and first-quarter growth is a mere 1.2%, that would tie as the second-weakest quarter since 1987 in which rates were raised, according to Julian Emanuel at UBS.

END

Producer prices is the forerunner to inflation.  Today PPI spiked at his fastest pace in over 5 years and this will surely be a cover for Yellen to raise rates.  Inflation is rearing its ugly head in the uSA

(courtesy zero hedge)

US Producer Prices Spike At Fastest Rate In 5 Years

With tomorrow’s rate hike baked in the cake, today’s hotter than expected PPI print for February provides Yellen more cover (as economic growth forecasts slump). PPI Final Demand surged 2.2% YoY (more than expected) driven by a 4.0% YoY jump in final demand goods. This is the highest inflationary print since March 2012.

 

Final Demand Energy prices surged 19.8% YoY

 

In February, another major factor in the increase in prices for final demand services was the index for traveler accommodation services, which rose 4.3 percent. The indexes for chemicals and allied products wholesaling; legal services; apparel wholesaling; health, beauty, and optical goods retailing; and architectural and engineering services also moved higher. In contrast, the index for automotive fuels and lubricants retailing fell 10.0 percent. Prices for wireless telecommunication services and for securities brokerage, dealing, and investment advice also decreased. 70% of the increase in prices for final demand goods is attributable to the index for electric power.

 

(courtesy Goldman Sachs/zero hedge)

Goldman Warns CBO Report Will Substantially Delay Obamacare Repeal

After CBO’s much-anticipated estimate of the GOP’s Obamacare replacement proposal showed that the legislation could result in as many as 24 million Americans losing coverage by 2026, we wondered just how much of an additional bottleneck this report would present to the already conflicted passage of the controversial “Trumpcare.” We got the answer overnight, when Goldman’s government economists Alec Phillips said that the CBO scoring would likely slow the passage of the Obamacare repeal process. Specifically, he said that “CBO’s estimates of the Obamacare replacement legislation’s effects on coverage were somewhat worse than expectations and suggest changes are likely to be necessary before the bill can pass the Senate. We continue to expect enactment of ACA replacement this year but probably not by the early April deadline that Republican leaders have highlighted.” And since the Obamacare process timeline is closely tied to Trump’s tax reform, a delay in the former, will mean yet another delay in the latter, leading to further market disappointments, which however so far have yet to materialize as the “market” seems oblivious of the practical realities of Trump’s economic policies.

Here are the main points from Goldman:

CBO Estimates Could Slow Passage of Obamacare Replacement Bill

 

BOTTOM LINE: CBO’s estimates of the Obamacare replacement legislation’s effects on coverage were somewhat worse than expectations and suggest changes are likely to be necessary before the bill can pass the Senate. We continue to expect enactment of ACA replacement this year but probably not by the early April deadline that Republican leaders have highlighted.

 

MAIN POINTS:

 

  1. The Congressional Budget Office (CBO) released its estimate of the effect of the American Health Care Act (AHCA). It estimates that the bill, which replaces the Affordable Care Act (ACA, or Obamacare) would reduce the federal deficit by $337bn over the next ten years and would reduce coverage by 24 million by 2026.
  2. The estimates of coverage loss are at the more negative end of expectations. CBO had previously estimated that repeal of the individual mandate would reduce coverage by 15 million by 2026; combined with other changes in the bill, CBO’s new estimate is that 24 million fewer individuals would have insurance coverage than under current law by 2026, or nearly all of the coverage expansion CBO attributed to the ACA. This reduction would occur over several years; in 2018, the coverage decline is estimated at 14 million, due mainly to the proposed elimination of the individual insurance mandate; the subsequent decline would be due mainly to the phase-out of the ACA’s Medicaid expansion.
  3. The fiscal estimates contained few major surprises. The bill as a whole is estimated to reduce the budget deficit by $337bn over ten years (through 2026). Phasing out the Medicaid expansion would reduce spending by $880bn over ten years. Another $673bn in savings is attributed to the elimination of the subsidies in the individual insurance market, but this would be nearly offset by new tax credits, grants to states, and the revenue loss associated with repeal of the individual and employer mandates. The repeal and/or delay of the taxes established by the ACA would increase the deficit by $592bn/10yrs, resulting in net budgetary savings of $337bn.
  4. Individual market premiums are projected to rise and then fall. In the short-run (prior to 2020), the estimate suggests that premiums are expected to rise by 10-15% more than without the legislation. This is a notable finding, since Republican leaders had already raised concerns about high premiums under the program. However, in the longer run (in 2020 and beyond) CBO estimates the bill would lower the average premium by 10% relative to current law, as higher premiums and reduced enrollment for older people would be offset by lower premiums and greater enrollment among younger people. Funding for states to limit the costs to insurers of high-cost patients and the loosening of benefit rules also contribute to the lower estimated premiums.
  5. The details of the CBO report make passage somewhat more difficult, in our view. While few aspects of the CBO estimate are surprising many Republican lawmakers who were already willing to support the bill are likely to continue to support it, the new estimate could lead some uncommitted Republicans to oppose the bill unless additional changes are made. Additional changes to the bill are likely, in our view, before it reaches the House floor the week of March 20. The greater obstacle remains the Senate, where the bill is unlikely to come up for a vote until the week of March 27, at earliest. While it is possible that ACA replacement legislation could reach the President’s desk in April, as Republican leaders have predicted, a delay until May or later continues to look more likely, particularly in light of today’s CBO estimate.

Meanwhile, as the Hill reports this morning, leading House Republicans are “fighting to defend their ObamaCare replacement bill in the face of a Congressional Budget Office (CBO) report that found the measure would result in millions of people becoming uninsured.” As expected, Democrats are on the attack, hoping the findings — and the eye-popping estimate that 24 million additional people will be without coverage by 2026 — will stop ObamaCare repeal in its tracks.

“Numbers are quite eloquent things; they speak very clearly,” said House Democratic Leader Nancy Pelosi (D-Calif.) Monday evening after the CBO’s report was released.  “I would hope that they would pull the bill,” she added. “It’s really the only decent thing they could do.”

 

Republicans had long expected that the CBO score would produce uncomfortable headlines that could sap support. The task ahead, for Speaker Paul Ryan (R-Wis.) and his lieutenants, is to weather the storm.  Ryan went on Fox News soon after the report was released and said he was “encouraged” by the findings. He pointed to items like the deficit reduction and decrease in premiums that the report found, while seeking to downplay the coverage losses.

 

Much of the change in the uninsured rate, Ryan said, would simply be due to people choosing not to buy coverage once the mandate for having coverage is repealed. “What I’m encouraged [by] is, once our reforms kick in, what the CBO is telling us is, it’s going to lower premiums — it will lower premiums 10 percent. It stabilizes the market. It’s a $1.2 trillion spending cut, an $883 billion tax cut, and $337 billion in deficit reduction,” Ryan said. “So of course the CBO is going to say if you’re not going to force people to buy something they don’t want to buy, they won’t buy it.“

Confirming the Goldman take, many Senate Republicans were already voicing skepticism of the House bill before the CBO score was released. They are urging their colleagues to slow down on the legislation. Sen. Bill Cassidy (R-La.) called the score “awful.”

Sen. Susan Collins (R-Maine) said it  “should prompt the House to slow down and reconsider certain provisions of the bill.” Added Sen. Lindsey Graham (R-S.C.): “If half of the CBO is true I think we should slow down.”

Trump himself has expressed doubts about the political wisdom of pressing ahead, repeating his frequent musing again Monday that it would be easier to just let ObamaCare fall under its own weight.  “The best thing you could do politically is wait a year, cause it’s going to blow itself off the map,” Trump said. “But that’s the wrong thing to do for our country. It’s the wrong thing to do for our citizens.”

But House Republican leaders are pressing ahead. The House Budget Committee is set to hold a final markup of the legislation on Thursday, setting the stage for a floor vote next week that could turn into a cliffhanger. “This week, a third House committee will debate the American Health Care Act as part of an open, transparent process,” Ryan said in a statement.

“We have set out a clear goal — to give every American access to quality, affordable care — and a clear plan to achieve it. Now we must keep our promise and deliver.”

The only question is when, and after how many changes

 

end

The White House now working with Congress to amend the Healthcare bill with the disappointing scoring by the CBO

(courtesy zero hedge)

White House Is Working With Congress To Amend Healthcare Bill

After yesterday’s disappointing CBO scoring of the republican Obamacare repeal bill, which prompted loud protests from both the White House on Tuesday said it is working with House leadership on changes to the Obamacare repeal bill in the form of a “manager’s amendment,” which could alter the bill before it hits the House floor.

According to Reuters, when asked at today’s regular briefing if the White House was in discussions with House leadership over “shaping a major or significant managers’ amendment,” spokesman Sean Spicer said: “Yes… We are obviously in talks with House leadership,” he said of the discussions.

“As we have noted multiple times from the podium, when people have ideas that are constructive or supportive, or ones we’ve heard about from different members we’ve engaged with … we’ve always stated a willingness,” Spicer said noting that “part of the reason we’re engaging with these individuals is to hear their ideas.”

“All of that is part of a comprehensive strategy to engage with members who support us, who have ideas, who want to be on board, who wanted to be constructive in the process.”

Spicer added that the White House is “in talks with House leadership about the content,” noting that President Trump will speak with both House Speaker Paul Ryan (R-Wis.) and Majority Leader Kevin McCarthy (R-Calif.) later Tuesday afternoon to talk “about some of these ideas and a path forward.” According to The Hill, a manager’s amendment is typically used after the traditional committee process to make changes to a bill to gain more support before a floor vote.

Speculation that one would be used increased as GOP members aired their opposition to the bill as it is. More conservative members of the House Freedom Caucus don’t believe the legislation goes far enough to repeal ObamaCare.  Spicer pitched the amendment as a way to help forge a greater consensus on the legislation. But asked whether its existence is an admission the bill can’t pass as is, Sean demurred, arguing that it’s about forging a consensus.

“That’s not entirely true. I think it’s an admission of what we stated at the beginning of this entire process, which was the president was going to engage with members to hear their ideas,” Spicer said adding that “this has never been a ‘take it or leave it.’ … We want to get the strongest bill through the House with as many ideas and opinions and facts that will help strengthen this as possible.”

Some Republicans also fear that moving to meet some concerns of the more conservative members could cost support from more moderate lawmakers in both the House and the Senate.  Ryan spokesman Doug Andres said it was “too early to discuss” any manager’s amendment.

Meanwhile, earlier on Tuesday, the architect of Trumpcare, House Speaker Paul Ryan, said he doesn’t plan to make major changes to Republicans’ plan to replace Obamacare, even as the White House effectively contracited him. House leadership is “working on getting that consensus” with Republicans in both chambers, Ryan said on Fox News Monday evening. Ryan said he expected the score to show fewer people covered under a plan that doesn’t include a mandate to buy insurance, and he highlighted the deficit reduction and lower premiums in the long term.

“Actually I think if you read this entire report, I’m pretty encouraged by it, it actually exceeded my expectations,” Ryan told Fox’s Bret Baier Monday.

Representative Mark Meadows of North Carolina, chairman of the House Freedom Caucus and an opponent of Ryan’s plan, said, “I think we’re making real good progress with the White House and leadership, and I’m optimistic that we’ll see some good results in less than a week.” Ryan and House Majority Leader Kevin McCarthy are speaking with President Donald Trump by telephone Tuesday afternoon to discuss the next steps.

For now, however, what shape the bill will take next is anyone’s guess: Senator Roy Blunt said Tuesday that he thinks the House will alter the bill before it gets sent to Senate. “And the plan will be open to change here,” the Missouri Republican said as he headed into a lunch with Health and Human Services Secretary Tom Price

 

 

A very important commentary from David Stockman.  He explains the huge cash drawdown at the Treasury from 435 billion USA down to 66 billion USA.  The reason, the boys instead of re-liquefying with more debt, the paid off that treasury debt which put the foot off the debt throat and this allowed the stock market to rally.

Now the debt ceiling will be re instated tomorrow and the treasury will now use their trust funds of around 500 million to fund the daily needs of Government.  Once a new debt ceiling is agreed upon in June or July these funds must be replaced and then we become closer to the new debt ceiling. Stockman believes that there can be no agreement between the divided Republicans and the Democrats on any matter

(courtesy David Stockman/ContraCorner)

 

Stockman Explains The Mystery Of The Treasury’s Disappearing Cash

Authored by David Stockman via DailyReckoning.com,

As of October 24, the U.S. Treasury was flush with $435 billion of cash. That was because the department’s bureaucrats had been issuing debt hand-over-fist and piling up a cash hoard, apparently, for the period after March 15, 2017 when President Hillary Clinton would need to coax another debt ceiling increase out of Congress.

Needless to say, Hillary was unexpectedly (and thankfully) retired to Chappaqua, New York. But the less discussed surprise is that the U.S. Treasury’s cash hoard has virtually disappeared in the run-up to the March 15 expiration of the debt ceiling holiday.

That’s right. As of the Daily Treasury Statement (DTS) for March 7, the cash balance was down to just $88 billion — meaning that $347 billion of cash has flown out the door since October 24.

And I find that on March 8 alone the Treasury consumed another $22 billion of cash — bringing the balance down to $66 billion!

To be sure, there has been no heist at the Treasury Building — other than the normal larceny that is the stock-in-trade of the Imperial City.

What’s different this time around is that the bureaucrats have apparently decided to sabotage what they undoubtedly believe to be the usurper in the White House.

To this end, they’ve been draining Trump’s bank account rather than borrowing the money to pay Uncle Sam’s monumental bills. This has especially been the case since the January 20 inauguration. The net Federal debt on March 7 was $19.802 trillion — up $237 billion since January 20th.

But that’s not the half of it. During that same 47 day period, the Treasury bureaucrats took the opportunity to pay-down $57 billion of maturing treasury bills and notes by tapping its cash hoard.

In all, they drained $294 billion from the Donald’s bank account during that brief period — or about $6.4 billion per day. You wouldn’t be entirely wrong to conclude that even Putin’s alleged world class hackers couldn’t have accomplished such a feat.

At this point I could don my tin foil hat because this massive cash drain was clearly deliberate.

Last year, for example, during the same 47 day period, the operating deficit was even slightly larger — $253 billion. But the Treasury funded that mainly by new borrowings of $157 billion, which covered 62% of the shortfall. Its cash balance was still $223 billion on March 7. Again, that cash balance is just $66 billion right now.

(the last time we saw this situation was 2011, when US debt was downgraded)

Moreover, the Trump Administration has only a few business days until its credit card expires on March 15 — so it’s also way too late for an eleventh hour borrowing spree to replenish its depleted cash account. (Besides that, I’m predicting a very dangerous market event will start on the 15th.)

The Treasury will likely be out of cash shortly after Memorial Day. That is, the White House will be in the mother of all debt ceiling battles before the Donald and his team even see it coming.

With just $66 billion on hand it is now going to run out of cash before even the bloody battle over Obamacare Lite now underway in the House has been completed. That means that there will not be even a glimmer of hope for the vaunted Trump tax cut stimulus and economic rebound on the horizon.

Needless to say, the punters and robo-traders on Wall Street do not see the coming disaster, either. But have they not noticed that the Donald is unpredictable, impulsive and reckless in the extreme; and that he might take next summer’s midnight debt ceiling showdown to the brink and beyond in a manner that the Boehner/Obama establishment would have never even contemplated?

Besides, where is Trump going to get the votes to solve it?

Trump’s already burned all bridges with the Democrats beyond repair by his immigration ban, deportation orders and Mexican Wall/border control campaign. But after his valid but slightly misstated tweet about Obama’s order to tap the wires at Trump Tower (actually either NSA or the Loretta Lynch did), there is not a Dem vote left on Capitol Hill for anything he wants to do.

At the same time, Speaker Ryan’s Obamacare Lite is already on life support on Capitol Hill, which also has big implications for the debt ceiling battle. The conservative backbenchers realize that Ryan’s plan amounts to another giant Republican-endorsed entitlement and will add upwards of $1 trillion to the nation’s already giant $10 trillion structural deficit over the next decade.

Accordingly, they are in open revolt and the coming campaign from the White House to force them to walk the plank in April will likely end in failure. That’s because the bill will be withdrawn once it becomes evident that the Rand Paul conservatives and the moderates in the Senate are both off the reservation.

Or in the alternative, the House fiscal hawks will be left seething about the blatant fiscal profligacy of the Ryan plan if the Speaker succeeds in ramming it through, Nancy Pelosi style. Either way, a long summer walk on the debt ceiling plank is about the last thing the so-called GOP “majorities” are likely to coalesce around.

But as they say on late night TV, there’s even more. Namely, when the deep state bureaucrats shelved Uncle Sam’s credit card a few months ago and actually paid back $57 billion of debt since the inauguration, they bestowed a huge favor on Wall Street.

Rather than draining cash from Wall Street by selling $157 billion of new debt between January 20 and March 7 as they did last year, they stopped the issuance entirely and actually pumped in $57 billion to pay-off maturing securities.

In a word, the Treasury took its boot off the neck of the bond dealers, thereby enabling the 15% frolic higher in the stock market that has become known as the Trump Reflation Trade.

In all, it amounted to a giant — but temporary — shot in the arm in the casino. It was a quarter trillion dollars freed-up to buy stocks rather than new Treasury issues.

Needless to say, those myths begin to die on March 15 and the screaming aberration of the past four months — that is, a broke Uncle Sam paying down his debt — goes into reverse.

To be sure, as the cash balance dwindles to the vanishing point in the next 90 days, the Treasury will resort to its normal trust fund divestment gimmicks — a maneuver that can only prolong the day of reckoning by a few months. But even then there will be a “surprise” on the other side of the debt ceiling battle that will be even more shocking to Wall Street.

Namely, when the debt ceiling is finally increased, the Treasury will need to borrow at least $500 billion in a matter of days to pay back the trust funds it borrowed from and replenish Uncle Sam’s operating cash.

In that event, the government bond dealers will be selling equities and other “risk assets” like junk bonds hand-over-fist in order to finance the tsunami of Treasury debt.

And as the man says, that’s the good news part of the story. The bad news is that not only is the Obamacare “repeal and replace” campaign opening up a legislative blood bath that will stall tax cuts and infrastructure stimulus indefinitely, but the Trump White House is now demonstrating that it will give the words erratic, incompetence and self-inflicted wounds a whole new definition.

I’ve been saying that the problem with the Wall Street robo-machines is that they can read the words in the financial news headlines, but not the political tea leaves in Washington. With each passing day that proposition is being proved in spades.

And with each new “unexpected” stumble in Washington, the case to get out of the casino with all deliberate speed becomes all the more urgent.

 

end

Strange:  with the odds of a rate hike on the 15th of March is a 100% certainty, the odds for a June hike plummet to 4 month lows because of the probability that Trump will get nothing passed and their will be a stalemate in the both the House and Senate:

(courtesy zero hedge)

June Rate Hike Odds Slump To 4-Month Lows

While Fed Funds futures imply a 100% probability that The Fed hikes rate by 25bps tomorrow, it appears questions over Trump’s policy timeline combined with the collapse in GDP expectations has dragged expectations for another rate hike in June back to its lowest since the election

As GDP growth expectations have plunged so April Fed Funds futures have tumbled – completely against the common sense that The Fed hikes into strength, not weakness…

But the lower chart shows the July futures not following the collapse and fading that disappointment.

For some context, if the current Atlanta Fed GDPNow forecast is correct and first-quarter growth is a mere 1.2%, that would tie as the second-weakest quarter since 1987 in which rates were raised, according to Julian Emanuel at UBS,who added:

“When also considering the potential for retail fund flows to slow down as tax season (April 15) approaches, the realization that economically stimulative legislation in Washington DC may take longer and carry less “punch” than anticipated, and that political change in Europe (the French election is May 7) could prove disruptive, the expectation of a pullback consistent with past macro episodes is reasonable over the next several months.”

This translates into a notable drop in the odds of an additional Fed rate hike in June…

 

Of course, with The Fed determined, we are sure they will manage to jawbone this up also – no matter how un-dependent on data they become.

It is abundantly clear that The Fed is more dependent on smoke and mirrors data than real economic growth…

 

(courtesy Dave Kranzler /iRD)

(courtesy zero hedge)

“Something Snapped”: US Department Store Sales Crash Most On Record

As we first documented last week in “Mega-Bears Smell Blood As Mall REITs Tumble” and as Bloomberg followed up yesterday, looking at CMBS on the Mall REIT space, many have set their sights on mall REITs as the “next big short.” However, an obvious question that has emerged is whether it is too late to go all in on this particular short, or whether as some have suggested, the bottom is in.  “The short feels crowded to us,” said Matthew Weinstein, principal at Axonic Capital, a hedge fund that specializes in structured products. “If these defaults start happening soon, the short will work, but if the defaults do not occur quickly, the first guy out could drive the market meaningfully higher.”

On the other hand, one particular chart revealed in the latest monthly Bank of America debit and credit card spending report shows that things may be about to get a whole lot worse for America’s department stores, as well as malls where they are for the most part the anchor tenants. Of note: while official US retail sales data will be released tomorrow (BofA data always comes several days ahead of the official release), what is especially ominous is that the collapse in department store spending was the biggest on record.

The collapse in department store spending in February took place in the context of broad weakness across the entire retail universe, with BofA reported that retail sales ex auto declined 0.2% seasonally adjusted. Since that was not accepetable, BofA decided to smooth out large swings over the prior two months, leaving it with retail sales ex-autos running at an average 3 month pace of 0.1% mom SA. As the chart below shows, even that suggests a far weaker than expected retail sales report tomorrow, just hours before the Fed’s rate hike announcement: “Given that the BAC data trends closely with the Census Bureau, we think our data points to a soft report when it is released on Wednesday the 15th.”

Breaking down the headline number into components shows a notable decline across virtually all subsegments, with the exception of Cruise Ships (clearly not a concern for much of middle-class America), Home improvement stores and Home goods. Everything else was flat to down substantially.

 

To be sure, Bank of America tries to explain the sudden February weakness with the previously documented delay in tax refunds, although that hypothesis does not conform with last week’s Gallup survey according to which February Consumer spending was the highest since 2008. This is what BofA says: “We believe that a delay in tax refunds likely biased spending lower in February relative to prior years.

Comparing debit and credit card spend is a good indication since presumably usage of debit cards should be more sensitive to the tax refund (proxy for cash) than credit cards (leverage). Indeed, we found that retail sales ex-autos for debit cards declined 1.7% mom while credit card spending was up 1.8% mom. The second test we looked at was by income cohort — the tax changes are more likely to impact the lower income households given that the EITC and ACTC are aimed at assisting lower-income households. We see this clearly in our data where the lowest income quintile reduced spending by 3.4% while the highest income quintile actually increased spending by 0.9% mom. We combine these two factors in the Chart of the Month to show weaker debit card spending, particularly for lower income households.

Alas, even if one believes this explanation, the next charts below show that no matter what – if anything – prompted the February spending collapse, when it comes to secular trends across various key spending segments, the deterioration has been taking place for years. First looking at restaurant sales, there has been a decisive slowing in spending at restaurants over the past two years with weakness concentrated in the larger / chain restaurants.

The same is obvious in the chart showing spending on “food service and drinking places”…

… as well as spending at food and beverage stores, as well as luxury designer goods, all of which are plunging.

And while we await tomorrow’s government data, all appropriately seasonally adjusted to eliminate outlier data points, two things become clear from the charts above: the pervasive consumption weakness, which only accelerated recently, shows that the retail weakness is far more profound that can be merely explained with “everyone is shifting to Amazon“, and more importantly, the US consumer continues to retrench with every passing month, spending less on discretionary products as well as traditional pastimes as eating out, or aspirational purchases like luxury goods.

As for what it was that “snapped” in department stores, we may need a “bigger short” soon, should the recent trend be indicative of just how bad things truly are.

Source: Bank of America

end

Well that about does it for tonight

I will see you tomorrow night

H

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