March 23/Trouble in the USA with the Trumpcare Health bill: they do not have enough votes to pass it/Gold down $2.90 but silver rises 2 cents/Italy’s ruling party is disintegrating: the 5 star movement may gain a majority in next election/Sears is on its deathbed!/

Gold: $1246.90  DOWN $2.90

Silver: $17.56  UP 2  cents

Closing access prices:

Gold $1244.70

silver: $17.57

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

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: 1254.64 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1245.00

PREMIUM FIRST FIX:  $9.64

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SECOND SHANGHAI GOLD FIX: 1256.67

NY GOLD PRICE AT THE EXACT SAME TIME: 1246.00

Premium of Shanghai 2nd fix/NY:$10.67

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LONDON FIRST GOLD FIX:  5:30 am est  1247.90

NY PRICING AT THE EXACT SAME TIME: 1246.00

LONDON SECOND GOLD FIX  10 AM: 1247.50

NY PRICING AT THE EXACT SAME TIME. 1248.90

For comex gold:

MARCH/

NOTICES FILINGS TODAY FOR MARCH CONTRACT MONTH:  0 NOTICE(S) FOR NIL OZ.  TOTAL NOTICES SO FAR: 72 FOR 7200 OZ    (0.2239 TONNES)

For silver:

For silver: MARCH

88 NOTICES FILED TODAY FOR 440,000 OZ/

Total number of notices filed so far this month: 3509 for 17,545,000 oz

Today the markets reacted in horror with the failure of the House to pass the Trump Health bill (the Ryan bill).  The Republicans are very divided and it is going to be impossible to pass anything exactly what David Stockman predicted.

Let us have a look at the data for today

.

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In silver, the total open interest  ROSE BY 695 contracts UP to 191,514  despite the FALL IN PRICE ( 1 CENT) WITH RESPECT TO YESTERDAY’S TRADING. In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  0.958 BILLION TO BE EXACT or 137% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH: THEY FILED: 88 NOTICE(S) FOR 440,000 OZ OF SILVER

In gold, the total comex gold also ROSE BY 5,977  contracts WITH THE RISE IN THE PRICE OF GOLD ($3.20 with YESTERDAY’S TRADING). The total gold OI stands at 454,481 contracts.

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

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

GLD:

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

Inventory rests tonight: 834.40 tonnes

.

SLV

We had no changes in inventory at the SLV/

THE SLV Inventory rests at: 332.504 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 695 contracts UP TO  to 191,514 AS SILVER WAS DOWN 1 CENT(S) with YESTERDAY’S trading. The gold open interest ROSE BY 5977 contracts UP to 452,857 WITH THE RISE IN THE PRICE OF GOLD OF $3.20  (YESTERDAY’S TRADING).

(report Harvey

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

 i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 3.33 POINTS OR .10%/ /Hang Sang CLOSED UP 7.29 POINTS OR 0.03% . The Nikkei closed UP 43.93 OR 0.23% /Australia’s all ordinaires  CLOSED UP 0.38%/Chinese yuan (ONSHORE) closed DOWN at 6.8880/Oil ROSE to 48.39 dollars per barrel for WTI and 50.91 for Brent. Stocks in Europe ALL IN THE GREEN    ..Offshore yuan trades  6.8732 yuan to the dollar vs 6.8880 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS CONSIDERABLY AGAIN/ ONSHORE YUAN SLIGHTLY WEAKER AS IS  THE OFFSHORE YUAN  AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA SENDS HER DISPLEASURE SIGNAL TO WASHINGTON 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

It seems that the Government of North Korea are behind the theft of Bangladesh’s 81 million USA stored at the USA Fed

( zero hedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

i)ITALY

It is within the realm of possibility that the 5 star movement will get a majority in the upcoming election

( Mish Shedlock/Mishtalk)

ii)ECB/TLTRO II UPTAKE

This gave a little juice to the markets today:  a “gift” of 233.5 billion euros of LTRO money.  This money must be repaid in 4 years. Generally this money is used in carry trades so expect more gains in global markets.

( zero hedge)

iii)LONDON/UK/YESTERDAY’S ISLAMIST ATTACK

The London attack was UK born and was investigated previously for violent extremism.  This should go over well for the upcoming Italian vote as they are totally against immigrants entering Italy

( zero hedge)

iv)GREECE
Simon Black explains the contagion problem if Greece defaults and how the domino banks will probably default
( Simon Black/Sovereign Man.com)
v)Belgium

Belgian police thwart another terrorist attack in Antwerp”

( zero hedge)

vi)Credit Suisse Bank

Credit Suisse shares tumble when they will also sell 3 billion dollars worth of stock

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Another Russian gunned down in broad daylight in the Ukraine capital of Kiev

( zero hedge)

6.GLOBAL ISSUES

i)MEXICO

The Mexican finance minister warns Mexican companies not to participate in the construction of the wall

( zero hedge)

ii)GLOBAL ART MARKET

Another sign of global growth problems:  the art bubble just crashed

( zerohedge)

7. OIL ISSUES

The banks may stop the funding of new rigs in the shale industry if they deem the risk is too great

(  Slav/OilPrice.com)

8. EMERGING MARKETS

9.   PHYSICAL MARKETS

If you deposit over 1 million euros, UBS will now charge the customer

( BBC/GATA)

10.USA STORIES

i)In continuation of the story reported to you yesterday on “incidental surveillance” it seems that during the Obama administration final days, there was a flurry of FISO warrants issued.  These warrants are issued solely against foreign nationals who may be suspected of spying on the uSA or may be used to gather intelligence against a foreign national who may do harm to the uSA. If the foreign national is talking to a USA person, that person must be minimized or blocked out. If this person is not blocked out then dissemination is criminal as that person’s rights have been violated.  Obama in his last days of office allowed the dissemination of information gathered under the FISO warrants to 17 uSA agencies and this is how Flynn was snarled.

What is fascinating here is that there is no evidence whatsoever of Russian interference in the uSA election, which is what the Democrats have been stating for weeks;

( zero hedge)

ii)The fun will begin:  Schumer says he will oppose Gorsuch’s nomination and urges all Democrats to all oppose. He threatens with a filibuster which will force the Republicans to undergo the nuclear option

( zero hedge)

iii)Initial claims spike much higher and now these claims are unchanged since Feb 2016:

( zero hedge)

iv)Strange data again:  In the housing sector everything is falling except new home sales: go figure

( zero hedge)

v)Wolf Richter explains why falling used car prices is causing havoc in the car industry and the financial sector which have given massive loans. The cars are used as collateral and this collateral is now underwater.

( WolfRichter/WolfStreet)

vi)With huge incentives it is no doubt that we will see the big auto companies warn about earnings.  Today it Ford which slashed guidance

( zerohedge)

vii)More fallout from the stupid soda tax in Philadelphia

( zero hedge)

viiiThe repeal and replace Obamacare bill is to occur later tonight.  Even though it looks like some of Freedom Caucus is willing to support Trump, we now see some of the centrists in the Republican party fold as they state they will not support Ryan’s bill:

( zerohedge)

viii b Then the following happened which is something we promised you..the Republicans cannot altogether agree on healthcare:  The Freedom caucus walks out

( zero hedge)

ix)This is going to be extremely damaging:  the death spiral now begins as vendors half shipments to Sears and KMart.  And now insurance companies refuse to provide insurance to vendors in Sears does not pay.  Remember that Sears is an anchor to many shopping malls!

(courtesy zero hedge

 

 

Let us head over to the comex:

The total gold comex open interest ROSE BY 5,977 CONTRACTS UP to an OI level of 452,857 WITH THE  RISE IN THE  PRICE OF GOLD ( $3.20 with YESTERDAY’S trading).THE BANKERS SUPPLIED ALL THE NECESSARY CONTRACTS SHORT TO OUR NEWBIE LONGS.  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 0 contract(s) REMAINING AT  21. We had 0 contact(s) served UPON YESTERDAY, so we GAINED 0 CONTRACT(S) or  AN ADDITIONAL ZERO  ounces will stand for delivery.  The next active contract month is April and here we saw it’s OI LOST 5718 contracts DOWN TO 165,205 contracts.

For comparison purposes, the April 2016 contract at this time had an OI of 183,677 contracts. At the end of April/2016 only 12.3917 tonnes stood for physical delivery, although 21.306 tonnes stood initially at the beginning of April 2016.

The non active May contract month GAINED 92 contract(s) and thus its OI is 1220 contracts. The next big active month is June and here the OI ROSE by 10,505 contracts up to 189,703.

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

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 And now for the wild silver comex results.  Total silver OI ROSE BY 695 contracts FROM  190,819 UP TO 191,514 DESPITE YESTERDAY’S 1 CENT LOSS.  THE BANKERS SUPPLIED THE NECESSARY CONTRACTS TO OUR NEWBIE LONGS.  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 7 contracts down to 423 contracts. We had 7 notices served upon yesterday so we LOST 0 CONTRACT(S) OR AN ADDITIONAL 0 OZ WILL STAND in this active delivery month of March.

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

The April/2017 contract month GAINED 3 contract(s) to 939 contracts. The next active contract month is May and here the open interest GAINED 790 contracts UP to 143,751 contracts.

FOR COMPARISON

Initially for the April 2016 contract1,180,000 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 88 notice(s) filed for 440,000 oz for the MARCH 2017 contract.

VOLUMES: for the gold comex

Today the estimated volume was 280,943  contracts which is very good.

Yesterday’s confirmed volume was 253,028 contracts  which is good.

volumes on gold are getting higher!

INITIAL standings for MARCH
 March 23/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 64,046.25 oz
SCOTIA
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
 
0 notice(s)
NIL oz
No of oz to be served (notices)
21 contracts
2100 oz
Total monthly oz gold served (contracts) so far this month
72 notices
7200 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     122,007.4 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 0  customer deposit(s):
total customer deposits; nil   oz
We had 1 customer withdrawal(s)
 i) Out of Scotia:  64,046.25 oz
total customer withdrawal: 64,046.25  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.

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To calculate the initial total number of gold ounces standing for the MARCH. contract month, we take the total number of notices filed so far for the month (72) x 100 oz or 7200 oz, to which we add the difference between the open interest for the front month of MARCH (21 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 9300 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 (72) x 100 oz  or ounces + {(21)OI for the front month  minus the number of  notices served upon today (0) x 100 oz which equals 9300 oz standing in this non active delivery month of MARCH  (.2893tonnes)
 
 
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On first day notice for MARCH 2016, we had 2.146 tonnes of gold standing. At the conclusion of the month we had 2.311 tonnes standing.
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I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov.    8.3950 tonnes.
DEC.   29.931 tonnes
JAN/     3.9004 tonnes
FEB/ 18.734 tonnes
March: 0.2893 tonnes
total for the 15 months;  244.521 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).
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Total dealer inventory 1,316,517.772 or 40.950 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,904,820.95 or 276.969 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 276.969 tonnes for a  loss of 26  tonnes over that period.  Since August 8/2016 we have lost 77 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 8 MONTHS  77 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE MARCH DELIVERY MONTH
MARCH INITIAL standings
 March 23. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
173,493.100 oz
CNT
Scotia
Deposits to the Dealer Inventory
428,997.900 oz
CNT
Deposits to the Customer Inventory 
 747,034.190 oz
CNT
Scotia
No of oz served today (contracts)
88 CONTRACT(S)
(440,000 OZ)
No of oz to be served (notices)
335 contracts
(1,675,000  oz)
Total monthly oz silver served (contracts) 3509 contracts (17,545,000 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  4,494,993.3 oz
today, we had  1 deposit(s) into the dealer account:
i) Into CNT: 428,997.900 oz
total dealer deposit: 428,997.900 oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 1 customer withdrawal(s):
i) Out of  HSBC:  173,493.100 oz
TOTAL CUSTOMER WITHDRAWALS: 173,493.100 oz
 we had 2 customer deposit(s):
 i) Into  CNT:  167,724.000 oz ??? exact weight???
 ii) Into Scotia:  579,310.19 oz
***deposits into JPMorgan have now stopped.
total customer deposits; 747,034.190   oz
 
 we had 2  adjustment(s)
i) Out of CNT: 10,054.04 oz leaves the customer and this enters the dealer account of CNT
ii Out of Scotia: 743,427.24 oz leaves the customer account and this enters the dealer account of Scotia
The total number of notices filed today for the MARCH. contract month is represented by 88 contract(s) for 440,000 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 3509 x 5,000 oz  = 17,545,000 oz to which we add the difference between the open interest for the front month of MAR (423) and the number of notices served upon today (88) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the March contract month:  3509(notices served so far)x 5000 oz  + OI for front month of Mar.( 423 ) -number of notices served upon today (88)x 5000 oz  equals  19,220,000 oz  of silver standing for the Mar contract month. This is  now average for an active delivery month in silver.  We neither gained nor lost any silver contracts (oz) standing in this active delivery month of March.
 
Volumes: for silver comex
 
Today the estimated volume was 53,011 which is excellent!!!
Yesterday’s  confirmed volume was 44,654 contracts  which is very good.
 
Total dealer silver:  40.515 million (close to record low inventory  
Total number of dealer and customer silver:   190.281 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 23/no change in gold inventory at the GLD/Inventory rests at 834.40 tonnes

March 22/no changes in gold inventory at the GLD/Inventory rests at 834.40 tonnes

March 21/a deposit of 4.15 tonnes of gold into the GLD/Inventory rests at 834.40 tonnes

March 20/WE HAD A MASSIVE 6.81 TONNE WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 830.25 TONNES/THIS GOLD MUST BE ON ITS WAY TO SHANGHAI.  WITH GOLD RISING THESE PAST FEW DAYS, IT MAYS NO SENSE WHATSOEVER ON GOLD LIQUIDATION.

March 17/a huge withdrawal of 2.37 tonnes from the GLD/Inventory rests at 837.06 tonnes

March 16/no changes in gold inventory at the GLD/Inventory rests at 839.43 tonnes

March 15/ANOTHER HUGE DEPOSIT OF 4.44 TONNES/inventory rests at 839.43 tonnes

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

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March 23 /2017/ Inventory rests tonight at 834.40 tonnes
*IN LAST 115 TRADING DAYS: 113.70 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 60 TRADING DAYS: A NET  13.73 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  39.16 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory
March 23/no change in inventory at the SLV/Inventory rests at 332.504 million oz
March 22/no change in inventory at the SLV/Inventory rests at 332.504 million oz
March 21/no change in inventory at the SLV/Inventory rests at 332.504 million oz/
March 20/a gain of 1.232 million oz of silver into the SLV/inventory rests at 332.272 million oz/
March 17/no change in silver inventory/SLV inventory rests at 331.272 million oz
March 16/no changes in silver inventory/SLV inventory rests at 331.272 million oz
March 15/no change in silver inventory/SLV inventory rests at 331.272 million oz
March 14/ a deposit of 1.136 million oz of inventory into the SLV/Inventory rests at 331.272 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
March 23.2017: Inventory 332.504  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 5.4 percent to NAV usa funds and Negative 5.3% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.0%
Percentage of fund in silver:38.8%
cash .+0.1%( Mar 23/2017) 
2. Sprott silver fund (PSLV): Premium FALLS  to +10%!!!! NAV (Mar 23/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to + 0.23% to NAV  ( Mar 23/2017)
Note: Sprott silver trust back  into NEGATIVE territory at +10% /Sprott physical gold trust is back into POSITIVE territory at +0.23%/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 THURSDAY

GOLDCORE/BLOG/MARK O’BYRNEet.

Gold Prices See Seventh Day Of Gains After Terrorist Attack In London

By Mark O’Byrne March 23, 2017

– Gold prices higher seven days in row – best gains since Brexit
– Gold spikes to three week high after terrorist attack in London
– Global stocks fell yesterday after attack in London
– Stocks resilient today and start day flat
– Gold rallies 4.1% in recent days as stock prices falter
– Sterling fell yesterday but flat today
– Risk of terrorist ‘spectacular’ shows importance of gold
– Trump faces big test today and failure may impact stocks
– Silver rose 0.3% yesterday and is another 0.5% higher today to $17.69 per ounce
– Uncertainty to provide support for gold and should test resistance at $1,250 per ounce and above that at $1,300 per ounce

Gold prices reached a 3-week high yesterday after the terrorist attack in London pushed gold to $1,251.30 per ounce – the highest it’s been since February 28.

Gold prices have risen over 4% in the last seven days as global equities slumped and risk aversion returned to markets. Gold has consolidated on the gains of the last seven sessions today and prices are marginally higher just above $1,250 per ounce.

London’s worst attack in more than a decade left five people dead, including the assailant and the police officer he stabbed, and at least 40 injured.

The history of these attacks, including those in France, Germany and Belgium last year as well those in Madrid and London more than 10 years ago, show there was little impact on economic confidence or financial markets. However, these attacks, despite being tragic were relatively small in scale and not of the magnitude of the September 11 attacks in New York.

The concern is that with economies fragile and markets looking very over valued, a spate of new terror attacks or indeed what is termed a terrorist “spectacular” akin to ‘911’ or simulated attacks across the western world as warned of by Isis recruits, could be damaging.

Markets are now also getting jittery about President Trump’s ability to push through policies that may benefit the U.S. economy. This is creating doubts on the so-called reflation trade that has seen stocks become “irrationally exuberant” in recent weeks.

Today’s focus is on whether Trump can gather enough support in a vote today to pass a bill to roll back Obamacare. It is the first major test of his legislative ability and whether he can keep his promises made to his supporters and the electorate.

Failure to eliminate the healthcare plan would suggest that Trump’s efforts to cut taxes and boost infrastructure will also be impeded. This could see stocks in the U.S. come under pressure and lead to renewed safe haven demand for gold.

Heightened political uncertainty in the U.S., the UK and indeed the EU will support gold and should lead to it testing resistance at the $1,250 to $1,260 per ounce level and above that resistance at $1,300 per ounce.

Silver rose 0.3 percent to $17.54 yesterday and is another 0.4% higher today to $17.69 per ounce.

Platinum and palladium also made gains and were up 0.5 percent at $962.55 per ounce and 0.3 percent to $788.85 respectively. Both have eked out further gains today with platinum at $968 and palladium rising 1.2% to $801 per ounce.

http://www.goldcore.com/us/gold-blog/gold-prices-see- seventh-day-gains-terrorist-attack-london/

-END-

end

 

If you deposit over 1 million euros, UBS will now charge the customer

(courtesy BBC/GATA)

UBS charges customers to deposit euros

Section:

… And they say gold doesn’t pay interest.

* * *

From the British Broadcasting Corp., London
Wednesday, March 22, 2017

Swiss bank UBS will start charging customers who deposit more than a million euros, as negative interest rates hit banks’ profits.

The annual 0.6 percent charge will take affect from May.
UBS already imposes charges for large accounts held in Swiss francs by companies and some wealthy clients.

Banks’ profits have been hit by the European Central Bank’s policy of stimulating growth through negative interest rates and increased liquidity.

The ECB penalises banks that store euros with it in an effort to make them lend rather than hoard their cash. …

… For the remainder of the report:

http://www.bbc.com/news/business-39349399

END

Your early THURSDAY 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 SLIGHTLY WEAKER AT  6.8880(  SMALL DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES WEAKER TO ONSHORE AT   6.8732/ Shanghai bourse UP 3.33 POINTS OR .10%   / HANG SANG CLOSED DOWN 7.92 POINTS OR 0.03% 

2. Nikkei closed UP 43.93 POINTS OR 0.23%   /USA: YEN FALLS TO 111.04

3. Europe stocks opened ALL IN THE GREEN      ( /USA dollar index RISES TO  99.72/Euro DOWN to 1.0785

3b Japan 10 year bond yield: FALLS TO   +.057%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 111.04/ 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::  48.39 and Brent: 50.91

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 UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.409%/Italian 10 yr bond yield DOWN  to 2.223%    

3j Greek 10 year bond yield RISES to  : 7.39%   

3k Gold at $1248.25/silver $17.61(8:15 am est)   SILVER  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 21/100 in  roubles/dollar) 57.55-

3m oil into the 48 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 DEVALUATION SOUTHBOUND   from POBC.

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.04 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  0.9929 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0709 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  +.409%

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 2.412% early this morning. Thirty year rate  at 3.021% /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, US Futures Rebound Ahead Of Critical Obamacare Repeal Vote, Yellen Speech

 

European and Asian stocks were modestly in the green, with U.S. futures higher, before a critical procedural vote on a Republican health-care bill to repeal Obamacare, while Janet Yellen is set to speak in Washington at 8:45am.

S&P 500 Index futures were 3 points in the green as of 6:45am ET as European shares edged higher, underpinned by the first gains for miners and health care stocks all week. Bonds of periphery countries gained before the European Central Bank’s last dose of free long-term cash through the final round of Targeted Longer-Term Refinancing Operations, which moments ago was announced at €233.5BN from 474 bidders, nearly double the €125BN expected. The yen gained for an eighth day, the longest winning streak in six years.

As Bloomberg notes, calm returned to the market after Tuesday’s selloff sparked by positioning ahead of the Republican health-care bill, set for a vote in Congress around 7pm ET on Thursday, which the market appears confident will pass despite numerous holdouts remaining into the 11th hour. Any setback could delay enactment of tax cuts and spending increases, the prospects for which have underpinned the rally in risk assets since Trump’s election in November. Below is a good summary of what is at stake from DB’s Jim Reid:

Often in life and indeed in markets there are forks in the road with the knock-on impact and ultimate outcomes likely to be quite different depending on the initial path taken. Today’s vote on AHCA in the House could be such an event. This might be slightly over dramatising things but it will give us big clues as to how revolutionary a Trump administration can be. If in the honeymoon period of the new administration they can’t pass a bill replacing Obamacare (very unpopular with the GOP) then it clearly will dramatically reduce expectations of wider tax reform. Pass it and Trump trades may get back some of their recent lost energy.

 

The update yesterday was that more than 25 members of the Freedom Caucus still remain opposed to the bill, according to FT, which is enough to mean that there would be insufficient votes to pass (the general assumption is more 20 dissenters will result in it failing). This followed a day of extensive lobbying from Trump and House speaker Paul Ryan yesterday. According to multiple news reports, the suggestion however is that talks are still going on behind the scenes including discussions over revisions to the “essential benefits” requirements which appears to be the sticking point. Indeed the House Freedom Caucus is expected to come to the White House today prior to the vote and Mark Meadows, chair of the Caucus, said that “I’m very encouraged that we might be seeing some real headway” and also that “we are working very diligently tonight to try and get there”. So things are hanging in the balance and its set up to be an interesting day. While it’s clear that a loss for Trump would be a major legislative defeat with likely big ramifications for policies further down the line, what is less clear is what happens in the days following today’s vote if it fails and whether Trump would be prepared to go away and make the changes to allow the bill to pass in another vote. Indeed White House press secretary Sean Spicer offered zero hints on this front by saying that “there is no plan B” and instead “there’s a plan A and a plan A and we’re gonna get this done”. When asked if he would keep on pushing healthcare in the event of the House not passing the bill, President Trump also replied saying that he would “see what happens”. So that only adds to the uncertainty.

Trump and Republican leaders of the House of Representatives have said they were making progress in their efforts to win over conservative Republicans who have demanded changes to the legislation. The vote on the bill, Trump’s first major legislation since he took office, is expected later on Thursday.

Perhaps only a successful passage of the vote provides some hope for a return to the Trump reflation trade, which has been almost entirely unwound by now, can come back: “The reflation rally in the U.S. stock markets appeared to have topped in March, causing a pullback after four months of unprecedented rise,” Ipek Ozkardeskaya, a market analyst at London Capital Group Ltd., wrote in a note. “Trump’s failure to push his plans through Congress dented investors’ appetite. Any positive news from today’s vote has the potential to revive the stock bulls.”

“If he can’t push through the bill, it would further damage stocks. It also raises the risk of his other policies, like tax cuts, being delayed,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

So heading into today’s critical vote, stocks and sterling hold their ground as markets took the latest European terror attack, this time in London, one of the world’s financial capitals, largely in their stride. The FTSEurofirst 300 barely budged as London, Frankfurt and Paris started flat and the pound fared better than most as the dollar began to muscle higher again in the currency markets. The history of these attacks, including those in France, Germany and Belgium last year as well those in London and Madrid more than 10 years ago, show little lasting impact on economic confidence or financial markets in isolation.

Overnight in Asia MSCI’s broadest index of Asia-Pacific shares outside Japan advanced 0.2 percent. Japan’s Nikkei closed 0.2 percent higher, as a weaker yen offset a political scandal over the relationship of Prime Minister Shinzo Abe and his wife with a Japanese nationalist education group that bought state-owned land. China’s CSI 300 rose early on hopes that index compiler MSCI may include A-shares in its indices, but those gains were lost as money began flowing out of the mainland market through link to the Hong Kong exchange.

Wall Street futures were pointing to modest gains later too. On Wednesday the Nasdaq .IXIC jumped 0.5 percent and the S&P 500 closed 0.2 percent higher, while the Dow Jones was flat, after all three touched their lowest levels in about five weeks earlier in the session. [.N]

Having weakened as much as 0.4 percent after news of the London attack which killed five, sterling held steady overnight and then climbed swiftly above $1.25 after more-resilient-than-expected UK retail sales data The dollar was also creeping higher again with attention firmly on Donald Trump’s first significant U.S. policy test, as he looks to gets a healthcare bill passed in U.S. congress.

“What we are getting this week is a questioning of how much of the risk rally is predicated on future Trump policy,” said Michael Metcalfe, head of global macro strategy at State Street Global Markets. “There are concerns that this vote (on healthcare reform) will be a litmus test of how much fiscal expansion he can get through.”

After losing 3.5 percent in the past 10 days, the dollar was roughly steady at 111.19 yen. It gained 0.1 percent to $1.0786 per euro and up 0.15 percent against the basket of currencies used to measure its broader strength.  The euro and euro zone bond markets’ focus was also on what the European Central Bank hopes will be its last offering of cheap, 3-year ‘TLTRO’ funding, once its main crisis fighting tool, and which today the ECB announced would amount to €233.5 billion.

Yields on Portuguese, Spanish and Italian debt fell 1-3 basis points ahead of the handout, continuing along with French bonds to close the spread on German Bunds.  The bigger question for markets though is will it matter once these kinds of ECB loans are no longer available to banks. From now on they will only be able to get either 1-week or 3-month loans from Frankfurt. “Overall I do not think the absence of further longer-term operations will make much of a difference,” said Francesco Papadia, the former head of ECB market operations who launched the offerings back in late 2011.

“LTROs (long term lending operations) are among the easiest measures to take, much easier than QE, so if there was a need for them the ECB Governing Council would not have too much of a problem in reinstating them.”

With several major currency pairs steadying after a week of losses for the dollar, the biggest mover of the day was Australia’s dollar, down half a percent on the back of nerves in China’s money market and a slump in prices for its iron ore exports. The New Zealand dollar was steady at $0.7046 after its central bank held interest rates at a record low 1.75 percent, and reiterated it would remain there for a “considerable” period of time.

In commodities markets, gold dipped lower and oil prices rebounded, after touching their lowest level since November overnight on data that showed U.S. inventories, already at a record high, grew by far more than forecast. Analysts said oil had found technical support and was being pushed up as traders took new long positions after the overnight low, but supply concerns kept the gains in check. U.S. crude CLc1 added 0.75 percent to $48.40 a barrel and global benchmark Brent LCOc1 climbed 0.7 percent to $50.99.

Bulletin Headline Summary from RanSquawk

  • Subdued affair in equity and bond markets, while focus in the latter will be the final TLTRO 2 release.
  • GBP pops higher on the back of UK retail sales beating expectations
  • Looking ahead, highlights include comments from Fed’s Yellen, Kashkari and Kaplan as well as US  Weekly Jobless data.

Market Snapshot

  • S&P 500 futures up 0.2% to 2,346.25
  • STOXX Europe 600 up 0.1% to 374.6
  • MXAP up 0.06% to 147.40
  • MXAPJ up 0.1% to 477.93
  • Nikkei up 0.2% to 19,085.31
  • Topix up 0.01% to 1,530.41
  • Hang Seng Index up 0.03% to 24,327.70
  • Shanghai Composite up 0.1% to 3,248.55
  • Sensex up 0.3% to 29,262.30
  • Australia S&P/ASX 200 up 0.4% to 5,707.95
  • Kospi up 0.2% to 2,172.72
  • German 10Y yield unchanged at 0.407%
  • Euro down 0.1% to 1.0785 per US$
  • Brent Futures up 0.4% to $50.82/bbl
  • Italian 10Y yield fell 5.7 bps to 2.263%
  • Spanish 10Y yield fell 3.2 bps to 1.705%
  • Brent Futures up 0.4% to $50.82/bbl
  • Gold spot down 0.1% to $1,247.51
  • U.S. Dollar Index up 0.1% to 99.78

Top Overnight News

  • Trump Discusses Changes to Health Bill to Win Over Conservatives
  • U.K. Police: Seven Arrested in Westminster Terror Probe
  • Apple Acquires Productivity App Workflow for Undisclosed Sum
  • Arbitrage for U.S. Gas to Europe and Asia ‘Wide-Open’: Citi
  • Amazon Plans to Enter Online Retail of Food in India, Badal Says
  • Google Ad Crisis Spreads as Biggest Marketers Halt Spending
  • Glaxo, Regeneron, Biobank Plan Largest Gene-Sequencing Program
  • Microsoft, Toyota Form Patent Pact on Connected-Car Technologies
  • Energy Transfer Seeks to Place Trans-Pecos Gas Line in Service

Asian equities traded mostly higher after the positive Wall St. close where tech names outperformed and US markets found reprieve from Tuesday’s worst performance YTD. ASX 200 (+0.4%) was underpinned by strength in the utilities and energy sectors, while Nikkei 225 (+0.2%) was kept afloat as USD/JPY recouped losses. Elsewhere, earnings were in focus in China with financials supported after Ping An Insurance reported its FY net rose by 15% Y/Y. However, the Hang Seng (+0.1%) and Shanghai Comp. (-0.4%) pared gains amid weakness in telecoms and after a lacklustre liquidity operation by the PBoC. Finally, 10yr JGBs edged marginally higher despite the recovery of sentiment in Japan, with prices supported amid the BoJ presence in the market under its bond buying programme. PBoC injected CNY 10bIn in 7-day reverse repos, CNY 10bIn in 14-day reverse repos and CNY 10bIn in 28-day reverse repos.

Top Asian News

  • MSCI Pares Down China Stock Inclusion Proposal as Hurdles Remain
  • India Said to Plan Using New Tool From April to Manage Cash
  • Templeton Said to Buy About $1.2 Billion of Indian Bonds
  • Tencent-Led Funding Round Said to Value Kuaishou at Around $3b
  • Activist Hedge Fund Effissimo Becomes Toshiba’s Top Shareholder
  • India Tribunal Approves Vedanta, Cairn India Merger; Stocks Rise
  • Toyota Industries to Buy Netherlands’ Vanderlande for EU1.16b
  • TonenGeneral, Kansai Elec. Abandon Coal Plant Project
  • Top Buffalo Meat Exporter on Edge Amid Pledge to Cut Slaughter

It thas been a quiet start to trading in European bourses, where large moves are unlikely to happen ahead of today’s House vote on Obamacare repeal. Although, the notable mover this morning has been Next with shares higher by over 8% after their earnings update subsequently boosting related names. The price rise came despite a 3.8% annual fall in profits, however, the Co. did maintain guidance it issued in its January trading statement for the 2017-18 year – full price sales, at constant currency, while weakness in earnings would have been priced in given the gloomy outlook they announced over Christmas. In credit markets, price action has also been somewhat muted with the German benchmark up a modest 8 ticks as participants await the final TLTRO. Outperformance has been seen in BTPs as the GER-ITA spread tightening        some 3.5bps.

Top European News

  • ECB Ending Four-Year Loans Makes Banks Focus on Stimulus Exit
  • Banks Trimming Compliance Staff as $321 Billion in Fines Abate
  • Trump’s Associates May Have Coordinated With Russians: CNN
  • Vienna Insurance Outperforms; Baader-Helvea Flags Valuation
  • Avoid ‘Expensive’ German Stocks, Deutsche Bank Recommends
  • U.K. Police Revise Death Toll of London Attack Down to Four
  • Nets Stuck With Private Equity Overhang Longer After Share Slide
  • Intesa Has Rerating Potential, ‘Premium’ Dividend Safe: Barclays
  • Next Warns of Tough Year Ahead as Britons Cut Clothing Outlays
  • Danish Government Reaches North Sea Tax Deal With Maersk

In currencies, the Bloomberg Dollar Spot Index was 0.1 percent higher, rising the first time in seven days.  The euro was down by 0.2 percent at $1.0778, following a 0.1 percent drop.the major movers on the week continue to grab the headlines this morning, and starting with the Pound, the UK retail sales data show the inflationary impact of the heavy GBP losses seen post Brexit are not having a detrimental effect — yet. Feb’s rise of 1.4% was a full 1% above consensus expectations, and this naturally put a fresh bid under Sterling, but the Cable move through is proving hard fought, with a move to 1.2527 swiftly reversed. EUR/GBP also stopped just shy of 0.8600, but with Article 50 set to be triggered next week, it is no surprise to see buyers taking profit on what are moderate moves as yet.

In commodities, gold fell 0.2 percent to $1,246.06, after a six-day advance that totaled 4.2 percent. WTI Crude added 0.8 percent to $48.41 a barrel on speculation record U.S. crude stockpiles that have undermined OPEC’s output cuts may finally be set to shrink. Supply (and demand) issues are continually lurking in the background in all commodity classes with the exception of precious metals. Gold has hit levels just above USD1250 but failed to close above here — represents a key target/resistance levels. The rise in US treasuries alongside the fall in stocks/risk off have had a combined positive impact, but this may stabilise near term. Base metals prices have been under scrutiny given levels attained on future demand expectations, with iron ore price tumbling as China usage/stockpiles are brought to question — again. Copper and Nickel prices have been tempered by disruptions at some of the world’s leading mines, but union leaders at Escondida set for a fresh meeting with BHP heads. Oil prices have again stabilised after fresh lows tested in WTI and Brent — the latter dipping under USD50.00. Pressure unlikely to subside as doubts over an agreement extension  continue. Inventory levels unlikely to be moderated without this.

Looking at today’s calendar, this morning in Europe we get the last 4y ECB TLTRO II auction which is being highlighted as worth keeping an eye on for further signs of take-up. Bloomberg consensus is running at €110bn. Over in the US this afternoon we’ll get the latest weekly initial jobless claims print along with new home sales data in February and the Kansas City Fed’s manufacturing survey for March. Away from the data, as mentioned earlier Fed Chair Yellen is due to speak at 8:45am while Kashkari (at 1pm ET) and Kaplan (at 7pm GMT) are also scheduled today. BoE deputy governor Ben Broadbent is also due to speak this morning. The biggest event though for markets will likely be the House vote concerning the AHCA. Timing for this is still to be confirmed.

US Event Calendar

  • 8:30am: Initial Jobless Claims, est. 240,000, prior 241,000; Continuing Claims, est. 2.04m, prior 2.03m
  • 9:45am: Bloomberg Consumer Comfort, prior 51
  • 10am: New Home Sales, est. 564,000, prior 555,000; New Home Sales MoM, est. 1.62%, prior 3.7%
  • 11am: Kansas City Fed Manf. Activity, est. 14, prior 14

Central Banks

  • 8:45am: Fed’s Yellen Speaks at Community Development Conference
  • 1pm: Fed’s Kashkari Speaks on U.S. Education Outcomes in D.C.
  • 7pm: Dallas Fed’s Kaplan Speaks on Economy in Chicago

DB’s Jim Reid concludes the overnight wrap

Often in life and indeed in markets there are forks in the road with the knock-on impact and ultimate outcomes likely to be quite different depending on the initial path taken. Today’s vote on AHCA in the House could be such an event. This might be slightly over dramatising things but it will give us big clues as to how revolutionary a Trump administration can be. If in the honeymoon period of the new administration they can’t pass a bill replacing Obamacare (very unpopular with the GOP) then it clearly will dramatically reduce expectations of wider tax reform. Pass it and Trump trades may get back some of their recent lost energy. The update yesterday was that more than 25 members of the Freedom Caucus still remain opposed to the bill, according to FT, which is enough to mean that there would be insufficient votes to pass (the general assumption is more 20 dissenters will result in it failing). This followed a day of extensive lobbying from Trump and House speaker Paul Ryan yesterday. According to multiple news reports, the suggestion however is that talks are still going on behind the scenes including discussions over revisions to the “essential benefits” requirements which appears to be the sticking point. Indeed the House Freedom Caucus is expected to come to the White House today prior to the vote and Mark Meadows, chair of the Caucus, said that “I’m very encouraged that we might be seeing some real headway” and also that “we are working very diligently tonight to try and get there”. So things are hanging in the balance and its set up to be an interesting day. While it’s clear that a loss for Trump would be a major legislative defeat with likely big ramifications for policies further down the line, what is less clear is what happens in the days following today’s vote if it fails and whether Trump would be prepared to go away and make the changes to allow the bill to pass in another vote. Indeed White House press secretary Sean Spicer offered zero hints on this front by saying that “there is no plan B” and instead “there’s a plan A and a plan A and we’re gonna get this done”. When asked if he would keep on pushing healthcare in the event of the House not passing the bill, President Trump also replied saying that he would “see what happens”. So that only adds to the uncertainty.

As we mentioned yesterday our US economists place a low probability on the bill being blocked and instead their base case remains for it being passed. This is primarily based on their view that since much of the Trump agenda rests on the ability of the Republicans to pass healthcare reform, its failure would seriously dent the party’s political capital and imperil other legislative  actions. They also believe that Senate opposition should lessen should the House pass the bill given it should become easier for more moderate Republican senators to support. It is worth noting though that the timeframe for all this is fairly tight. The effective deadline for the legislation to be passed by both chambers of Congress is April 28th. However with Congress effectively not in session from April 6th to April 24th there will only be four days to pass FY2017 budget legislation before the current continuing resolution expires. Otherwise the government could potentially shut down. This means that they expect the contours of the AHCA to take shape before April 6th.

Markets in the US are set to go into the vote in a slightly better mood following the steep selloff on Tuesday. While still well down over 2 days, the S&P 500 did close up +0.19% last night and so putting an end to that run of four consecutive down days. US Banks (-0.24%) did finish a bit weaker, not helped by a further decline for Treasury yields with the 10y (-1.3bps) down for the  fourth day in a row and to a new three week low of 2.406%. That had a greater supporting impact on credit indices though with CDX IG closing 1.3bps tighter and completely reversing Tuesday’s move wider. The same can’t be said for US HY energy cash spreads however which were another 10bps wider yesterday at 486bps, despite a bit of bounce for WTI back above $48/bbl. Spreads have now widened for 12 of the last 14 sessions and are at 3-month wides again. These moves are certainly worth keeping an eye on.

Meanwhile equity markets in Europe had previously finished a bit softer likely also reflecting some catch up from the prior US session. The Stoxx 600 closed -0.44% while in the UK the FTSE 100 ended -0.73% following the tragic attacks outside UK Parliament which authorities are treating as a terror attack. Sterling was weaker in the aftermath but reversed losses into the close to finish little changed.

Before we look at the latest in Asia this morning its worth highlighting that Fed Chair Yellen is scheduled to speak at lunchtime today (12.45pm GMT to be precise). She will speak at a community development research conference in Washington so it remains to be seen if she addresses monetary policy at all, but nevertheless it is worth keeping an eye on.

Refreshing our screens now, markets in Asia have largely followed the lead from the US with most major bourses posting small gains. The Nikkei (+0.12%), Hang Seng (+0.35%), Shanghai Comp (+0.31%), Kospi (+0.32%) and ASX (+0.29%) are amongst those higher. US equity index futures are posting similar gains while the Yen and Gold have both eased back about -0.20%.

Moving on. It’s flown under the radar a little recently given the focus on France but the latest polls in Italy are hinting at some rising support for the anti-establishment 5-Star movement. Indeed an Ipsos poll in the Corriere della Sera newspaper puts the 5-Star at 32.3% and 5.5% ahead of the Democratic Party at 26.8%. That is the highest reading we can find for the 5-Star movement. Other polls in recent days run by Demopolis, IPR and EMG show the margin lead for 5-Star at between 3% and 7% over the Democratic Party with the overall percentage for 5-Star between 30% and 31%. The vast majority of polls run in February showed the Democrats as holding a marginal lead. Unsurprisingly there are plenty of question marks about 5-Star actually being able to create a government given its aversion to forging coalitions but the moves in the polls are worth keeping an eye on.

Staying with politics, yesterday’s notable Brexit update was the comments from EU negotiator Michel Barnier. He said in a meeting of EU commissioners that there will be no talks on a future deal without agreement on the Brexit bill which runs against the UK government’s strategy of conducting talks on the exit and a deal at the same time. He also said that a transitional deal is  possible but that it will still be governed by European law. Some interesting early signs then of the EU’s negotiating stance.

Away from politics, yesterday’s data was once again fairly second tier in nature and had little impact on markets. There was little to note in Europe while in the US existing home sales were reported as falling -3.7% mom in February and a bit more than expected. The FHFA house price index was also flat in January versus consensus expectations for a +0.4% mom rise.

Before we wrap up, yesterday our Global Economics Perspectives team published their latest note looking at how the US economy is performing in Q1. They argue that whilst indicators are suggesting that another Q1 growth disappointment is possible, there are five reasons why it should not be feared: (1) GDP growth is likely to be understated due to lingering issues with seasonal adjustment, perhaps depressing reported growth by 1pp; (2) the weak growth signal from hard data is inconsistent with more supportive indications from surveys, sentiment data, and financial conditions; (3) even if real GDP growth slows, private domestic demand growth looks solid, with capex and housing improving; (4) slowing real consumer spending growth is driven in part by an uptick in inflation and should thus prove temporary; and (5) prospects for President Trump’s policy agenda will remain the key driver of shifts in the US growth outlook.

Looking at today’s calendar, this morning in Europe we’re kicking off shortly after  this hits your emails with consumer confidence indicators in both Germany and France. Shortly after that we will get the February retail sales data in the UK before we then get the last 4y ECB TLTRO II auction which is being highlighted as worth keeping an eye on for further signs of take-up. Bloomberg consensus is running at €110bn. Over in the US this afternoon we’ll get the latest weekly initial jobless claims print along with new home sales data in February and the Kansas City Fed’s manufacturing survey for March. Away from the data, as mentioned earlier Fed Chair Yellen is due to speak shortly after lunch, while Kashkari (at 5pm GMT) and Kaplan (at 11pm GMT) are also scheduled today. BoE deputy governor Ben Broadbent is also due to speak this morning. The biggest event though for markets will likely be the House vote concerning the AHCA. Timing for this is still to be confirmed.

3. ASIAN AFFAIRS

i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 3.33 POINTS OR .10%/ /Hang Sang CLOSED UP 7.29 POINTS OR 0.03% . The Nikkei closed UP 43.93 OR 0.23% /Australia’s all ordinaires  CLOSED UP 0.38%/Chinese yuan (ONSHORE) closed DOWN at 6.8880/Oil ROSE to 48.39 dollars per barrel for WTI and 50.91 for Brent. Stocks in Europe ALL IN THE GREEN    ..Offshore yuan trades  6.8732 yuan to the dollar vs 6.8880 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS CONSIDERABLY AGAIN/ ONSHORE YUAN SLIGHTLY WEAKER AS IS  THE OFFSHORE YUAN  AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA SENDS HER DISPLEASURE SIGNAL TO WASHINGTON 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

It seems that the Government of North Korea are behind the theft of Bangladesh’s 81 million USA stored at the USA Fed

(courtesy zero hedge)

U.S. Prepping Case Linking North Korea To $81MM New York Fed Bank Heist

As tensions between the U.S and North Korea continue to escalate, with the most recent provocation coming from Kim Jong Un last night, the Wall Street Journal has just reported that Federal prosecutors are building potential cases that would accuse North Korea of directing the theft of $81 million from Bangladesh’s account at the Federal Reserve Bank of New York last year.

The charges, if filed, would target alleged Chinese middlemen who prosecutors believed help North Korea orchestrate the theft, the people said.

 

The current cases being pursued may not include charges against North Korean officials, but would likely implicate North Korea, people close to the process said—with the U.S. accusing a foreign government of orchestrating one of the biggest bank robberies of modern times.

Richard Ledgett, the deputy director of the National Security Agency, said he was “optimistic about the truth of that,” when asked about reports of a connection between the two cybercrimes.  “If that linkage is true, that means a nation-state is robbing banks. That is a big deal; it’s different,” he said on Tuesday during a panel discussion at the Aspen Institute.

Meanwhile, U.S. Treasury authorities are considering sanctions against the alleged middlemen, an approach the U.S. is increasingly using to go after suspected criminals who are unlikely to fall into U.S. custody.

Fed

 

For those who missed our coverage, roughly a year ago we wrote about extensively about this incident in which a group of hackers used Swift, the interbank messaging system, to steal nearly $100 million from the Central Bank of Bangladesh being held at the Federal Reserve Bank of New York.  Here’s a recap:

For those who missed the story, you can review it in all its James Bond-ish glory in the four posts linked below, but here is a brief summary of what happened to the $81 million: 1) it was transferred to four accounts at the Jupiter Street, Makati City, branch of Rizal Commercial Banking Corp (RCBC) in the Philippines, 2) $470,000 in cash went into the branch manager’s trunk and the rest went to a possibly forged (but possibly not) account registered to one William Go, 3) the money was transferred to an FX broker called Philrem, 4) $50 million was split between two casinos and the remaining $31 was delivered to a “Weikang Xu” in cash.

From there, the trail goes cold.

 

Per the WSJ, the hackers behind the Bangladesh heist were likely a part of the same group that hacked Sony back in 2014.

Private security researchers have traced the Bangladesh heist to a hacking group known as Lazarus, which they say was also behind the Sony hack. In 2014, the FBI blamed North Korea for the Sony breach.

 

“The whole security community has said that the attack tools and techniques used in Sony are the same ones used in Bangladesh,” said Eric Chien, an engineer with security vendor Symantec Corp.

All that said, as always, one must maintain a healthy dose of skepticism when drawing conclusions on issues where pure speculation and conflicting interests can conspire to morph circumstantial evidence into undeniable ‘fact’.  As even the WSJ notes, there remains a view among some federal officials that the evidence doesn’t prove beyond a doubt that North Korea was behind the Bangladesh theft.  Moreover, others believe the hackers who carried out the Bangladesh heist may have appropriated, tweaked or repurposed the malicious code that the U.S. government made public after the Sony hack—which wouldn’t necessarily indicate they are linked to North Korea.

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

ITALY

It is within the realm of possibility that the 5 star movement will get a majority in the upcoming election

(courtesy Mish Shedlock/Mishtalk)

Italy Falls Out Of Love With The Euro: Beppe Grillo Resurgent In The Polls

Authored by Mike Shedlock via MishTalk.com,

Recent polls for Italian politicians supportin

g the eurozone and EU have collapsed.

Pro-Europe polls are highly likely to get worse as a  further splintering of Matteo Renzi’s PD party takes place.

It is not out of question for Beppe Grillo’s eurosceptic Five Star Movement (M5S) party to achieve an absolute majority in the next election. However, please note that 40% is the threshold for a “majority”.

The Financial Times reports Italy is Falling Out of Love with Europe.

Foreigners often underestimate Italy’s ability to sidestep calamity. That said, the stakes are higher now than in 1992. Solutions may prove harder to find. The reason lies in the radically different EU and Mediterranean contexts in which Italy finds itself.

 

Some of contemporary Italy’s challenges appear similar to those of the early 1990s. The party system is once again in fragments. The ruling centre-left Democratic party (PD) split last month. The right is divided. The most popular opposition party is the anti-establishment Five Star Movement. Since November 2011 four prime ministers have taken office not because voters chose them, but because of a financial emergency, factional squabble, party coup and failed constitutional reform.

 

Matteo Renzi, the former premier and PD leader, suffered a blow this month when it emerged that Tiziano Renzi, his father, and Luca Lotti, a close political ally, had been caught up in a judicial probe into suspected graft in public procurement.

 

The most disturbing comparison between 1992 and the present day concerns the Italian economy, which is projected this year to be the slowest-growing in the eurozone. Public debt is more than 132 percent of gross domestic product. Unemployment is almost 12 per cent; the youth jobless rate is over 37 percent.

 

As a consequence, ever more Italian politicians question the merits of eurozone membership. So do Italian voters. In a Eurobarometer poll published in December, 47 percent called the euro “a bad thing” for their country and only 41 percent “a good thing”. This is the big difference with 25 years ago.

 

As long as the moderate left or right governs Italy, it may be possible to contain this disenchantment with the EU and the euro. But the PD’s fissures are the latest sign that the party system is cracking under the strain. The Five Star Movement is waiting in the wings.

PD Suicide

Via email, Eurointelligence comments on the costs of Matteo Renzi’s PD’s suicide mission.

We have been saying it for a while – political parties that preoccupy themselves with their internal divisions are electorally doomed. It is happening to the Labour Party in the UK, and it is now happening to the Partito Democratico. This tendency is now being picked up by the polls, which show the Five Star Movement ahead of the PD by five points. We are now at the point where it becomes increasingly improbable for the PD to regain power after the next elections. They cannot do it on their own, and they do not have natural coalition partners to help them. Even a hypothetical alliance between Matteo Renzi and Silvio Berlusconi would not, on its own, meet the 40% majority threshold for a coalition, and there is no way the two parties would enter the election with a pre-arranged electoral pact in the first place.

 

The Five Star Movement is now only 6 points away from an absolute majority that would allow it to govern on its own assuming that the present electoral law for the chamber of deputies forms the basis of a new electoral system for the Senate. If one adds up all the non-extremist parties (and let’s count Berlusconi’s Forza d’Italia among them for the sake of argument), one would get to just over 40% – with the PD, Forza Italia, and the New Centre Right of foreign minister Angelino Alfano which only gets 2.8%.

 

Worse for the PD, its support will fall even more after the split of the party becomes a reality – which it will before the elections. The poll puts the hypothetical support for PD dissidents at 7.1%, which would reduce the PD’s overall support to under 20%. The new left, together with the old left, would have the support of close to 10%. All this shows that there can be only two election outcomes: either a fragmented parliament, with unstable and shifting coalitions, or a majority reign of the Five Star Movement. The Five Star Movement promises not to enter coalitions, and it will be interesting to see whether the party maintains that position after the elections.

 

On the issue that interests us the most – Italy’s future in the EU, and in the eurozone in particular – the picture is even more grim. The only two parties that unconditionally support Italy’s membership of the eurozone are the PD and the New Centre Right. Forza Italia is toying with the idea of a parallel currency, while the Five Star Movement has pledged a consultative referendum on Italy’s future in the euro. While this referendum can legally not end Italy’s membership in the eurozone, it would send a devastating signal to the outside world.

 

The Five Star Movement has its own share of scandals – for example involving the new municipal government in Rome, and the party is in an internal state of war over the candidate for the mayoral elections in Genoa. But none of that seems to stick.

 

Our conclusion is that the Five Star Movement is rational to avoid alliances with other parties, as this approach is paying off electorally. With that strategy in place, they will either gain a sufficient majority (over 40%) at the next elections, or in the one after that.

Italian Polls

Eurointelligence referenced a specific Italian poll that has been since superseded.

However, support for PD is clearly on the wane. Let’s take a look at all of the recent Italian Election Polls.

In only one poll since March 9 (clearly an outlier) did Matteo Renzi’s PD party come in first place. Moreover, PD has not yet split for polling purposes but it will.

I fail to see how M5s was “6 points away from an absolute majority that would allow it to govern on its own” as Eurointelligence states, but a coalition of eurosceptic parties totaling over 50%  is easily at hand.

Support for M5S (Five Star Movement) + Fi (Forza Italia) + LN (Lega Nord), all eurosceptic parties, totals 54.5%in the most recent poll.

Forza Italia is former prime minister Silvio Berlusconi’s  party.

On March 9, Bloomberg reported  Enter Berlusconi: A Man, a Ban, and His Plan to Restore the Lira.

If elections were held today, eurosceptic parties would easily hit not only a 40% threshold but a 50% threshold as well.

Whether eurosceptic could agree to form a coalition is another matter, but I suspect they would, especially if the alternative was a minority government led by PD.

 

END

ECB/TLTRO II UPTAKE

This gave a little juice to the markets today:  a “gift” of 233.5 billion euros of LTRO money.  This money must be repaid in 4 years. Generally this money is used in carry trades so expect more gains in global markets.

(courtesy zero hedge)

Banks Scramble For Free ECB Money: €233.5 BIllion Allotted To 464 Banks In Final TLTRO Operation

As previewed last night ahead of today’s fourth and final ECB TLTRO-II operation which took place earlier this morning, a big take up was expected with market consensus expecting €115bn, and some forecasts as high as €300BN. The final number came almost in the middle, with the ECB reporting it had allotted €233.5 billion among 474 bidders, more than double the amount expected.

Following the news, European stocks climbed, led by mining and bank shares, as lenders borrowed more than double what was forecast under the European Central Bank’s TLTRO program.

The Stoxx Europe 600 Index advanced 0.3 percent to 375.21 as of 11:31 a.m. London time, set to end three days of losses. European miners extended their gains to 0.9 percent, following metals prices higher, and the banks sector rose 0.6 percent. Lenders were allotted 233.5 billion euros in final round of Targeted Longer-Term Refinancing Operations, the ECB said.

As we further noted last night, from a rates perspective, what matters is whether these funds will trigger flows into the bond or swap markets as banks set up carry trades. As ABN AMRO noted, carry trades have certainly looked attractive and currently there is a possible spread of around 80bp between the rate on the TLTRO and similar maturity peripheral bonds. However, there is little evidence that banks have used TLTRO-II funds for carry trades over the last few months.

While it remains to be seen if this latest TLTRO will spur further risk on trades, the initial reaction to the far greater than expected take up favorable, sending both risk assets, US equity futures and European bond markets higher.

The final TLTRO result can be summarized as follows:

The ECB announced €233 bn of take-up (by 474 banks) in the fourth and final TLTRO-2 auction. TLTRO-2 is a four-year facility, provided on a full allotment and fixed rate (at 0%) basis. The rate can fall to -0.4%, assuming loan growth targets are met. Three points:

  1. The take-up was more than double what Wall Street expected (€115 bn expectation vs. €233 bn actual). It is also almost 4x higher vs. the previous high of €62 bn (December 2016 auction).
  2. Today’s take-up brings total utilisation of the TLTRO-2 facility to €739 bn gross and €329 bn net of TLTRO-1 repayments.
  3. A stronger take-up was expected, owing to multiple factors (pricing, accounting treatment, loan growth and this being the last auction). €233 bn of incremental liquidity in the system is positive from a sector-resilience perspective.

That said, as Goldman writes in response to the TLTRO announcement, the bank “does not see today’s take-up as having scope to meaningfully change market perception of European bank share prices.”

Finally, for those wondering why the dramatic pick up, as Goldman further writes, attractiveness of the facility had improved for four main reasons:

  1. Pricing: fixed-rate pricing is an attractive structure in a world with an upward rate bias.
  2. Accounting treatment: multiple banks started to accrue a negative rate on the facility since inception, given the high probability of beating the benchmark. This improved the attractiveness of the facility.
  3. Loan benchmarks are achievable, as loan growth has shown timid signs of improvement, increasing the probability of surpassing the ECB’s benchmark.
  4. Last auction: an additional incentive was that there is no “next time”.

LONDON/UK/YESTERDAY’S ISLAMIST ATTACK

The London attack was UK born and was investigated previously for violent extremism.  This should go over well for the upcoming Italian vote as they are totally against immigrants entering Italy

(courtesy zero hedge)

London Attacker Was UK-Born, Previously Investigated By UK Spies Over “Violent Extremism”, May Says

U.K. Prime Minister Theresa May told British lawmakers that one attacker was responsible for the deadly Westminster terror incident in London on Wednesday, and that the attacker had been investigated by security services in the past.  “It’s still believed that this attacker acted alone,” May told lawmakers in the House of Commons.

May said that a British-born man inspired by Islamist ideology, who had been previously investigated by MI-5 is responsible for the attack.

His identity is known to the police and MI5 and, when operations allow he will be publicly identified. He was British born and some years ago he was investigated by MI5 in relation to concerns about violent extremism,” May said.

She added, however, that he was not part of current invetigations and had been regarded as a “peripheral figure.”

The UK Prime Minister also said that a total of 12 people, inluding 9 foreigners, are victims of the Westminster attack and added that the UK terror level is “severe” as there is no information of a specific threat. May said she will have more security meetings after the London attack.

She said the Lond attack was “an attack on people everywhere. and vowed that terrorists will be defeated. May refered to the Westminster attack as an act trying to silence democracy, adding that “we are not afraid.”

Earlier in the day Police arrested eight people in the investigation into a lone-wolf attacker who killed three people and injured 40 before being shot dead by police near parliament in London, Britain’s most senior counter-terrorism officer said on Thursday.

“We have now made a total of eight arrests as part of the ongoing Counter Terrorism operation,” the police said on Twitter.

The Metropolitan Police said on Thursday that they searched six addresses overnight in Birmingham, London and other parts of the country in connection with the investigation. Mark Rowley, acting deputy commissioner of the Metropolitan Police, confirmed that 29 people were treated in hospital after the attack and seven people remained in critical condition. This was a revision from Wednesday night, when he said that five people had died in the attack, including three members of the public.

Michael Fallon, the defence secretary, told the BBC that the “working assumption” was the attack is “linked to Islamic terrorism in some form”. “So we’re dealing with an enemy, a terrorist enemy that is not making demands or holding people hostage but simply wants to kill as many people as possible. So this is a new element to international terrorism,” he said.

Fallon added: “London has seen this before and is taking this on the chin, and I do want to reassure you that the police and security forces are doing everything possible to make sure that people can go about their daily life as safely as possible.”

The prime minister on Wednesday night described the assault as “sick and depraved” in a statement outside Number 10 after chairing a meeting of Cobra, the government’s high-level emergency committee. May said the nation’s threat level would remain at “severe” and warned terrorists that efforts to undermine Britain’s values were “doomed to failure”.

END

 

GREECE
Simon Black explains the contagion problem if Greece defaults and how the domino banks will probably default
(courtesy Simon Black/Sovereign Man.com)

9 Years Later… Greece Is Still In A Debt Crisis!

Authored by Simon Black via SovereignMan.com,

Sometimes you have to marvel at the absurdity of the financial universe in which we live.

On one side of the Atlantic, we have the United States of America, which triggered yet another debt ceiling disaster last Thursday when the US government’s maximum allowable debt reset to just over $20 trillion.

Of course, the US national debt is pretty much already at $20 trillion.

(That’s roughly $166,000 per taxpayer in the Land of the Free.)

This means that Uncle Sam is legally prohibited from ‘officially’ borrowing any more money.

But far be it from the US government to start living within its means. Sacrilege!

These guys have zero chance of making ends meet without going into debt.

Just last year, according to the government’s own financial report, their annual net loss totaled $1 TRILLION, and the national debt increased by $1.4 trillion.

And that was in a relatively stable year. There was no major war or financial crisis to fight. It was just business as usual.

This year isn’t going to be any different.

So, cut off from their normal debt supply (the bond market), the Treasury Department is resorting to what they call “extraordinary measures.”

They’re basically pillaging government employee retirement funds, and will continue to do so until Congress raises the debt ceiling.

It’s a repeat of what happened in 2015. And 2013. And 2011.

Pretty amazing to consider that the “richest” country in the world has to plunder retirement funds in order to keep the lights on.

Former US Treasury Secretary Larry Summers said it perfectly when he quipped “How long can the world’s biggest borrower remain the world’s biggest power?”

Then, of course, on the other side of the Atlantic, we have Greece, which is now in its NINTH YEAR of a major debt crisis.

Incredible.

Greece has had nine different governments since 2009. At least thirteen austerity measures. Multiple bailouts. Severe capital controls. And a full-out debt restructuring in which creditors accepted a 50% loss.

Yet despite all these measures GREECE IS STILL IN A DEBT CRISIS.

Right now, in fact, Greece is careening towards another major chapter in its never-ending debt drama.

Just like the United States, the Greek government is set to run out of money (yet again) in a few months and is in need of a fresh bailout from the IMF and EU.

(The EU is code for “Germany”…)

Without another bailout, Greece will go bust in July– this is basic arithmetic, not some wild theory.

And this matters.

If Greece defaults, everyone dumb enough to have loaned them money will take a BIG hit.

This includes a multitude of banks across Germany, Austria, France, and the rest of Europe.

Many of those banks already have extremely low levels of capital and simply cannot afford a major loss.

(Last year, for example, the IMF specifically singled out Germany’s Deutsche Bank as being the top contributor to systemic risk in the global financial system.)

So a Greek default poses as major risk to a number of those banks.

More importantly, due to the interconnectedness of the financial system, a Greek default poses a major risk to anyone with exposure to those banks.

Think about it like this: if Greece defaults and Bank A goes down, then Bank A will no longer be able to meet its obligations to Bank B. Bank B will suffer a loss as well.

A single event can set off a chain reaction, what’s called ‘contagion’ in finance.

And it’s possible that Greece could be that event.

This is what European officials have been so desperate to prevent for the last nine years, and why they’ve always come to the rescue with a bailout.

It has nothing to do with community or generosity. They’re hopelessly trying to prevent another 2008-style meltdown of the financial system.

But their measures have limits.

How much longer do Greek citizens accept being vassals of Germany, suffering through debilitating capital controls and austerity measures?

How much longer do German taxpayers continue forking over their hard-earned wages to bail out Greek retirees?

After all, they’ve spent nine years trying to ‘fix’ Greece, and the situation has only become worse.

For a continent that has been at war with itself for 10 centuries and only managed to play nice for the last 30 or so years, it’s foolish to expect these bailouts to last forever.

And whether it’s this July or some date in the future, Greece could end up being the catalyst which sets off a chain reaction on both sides of the Atlantic.

Do you have a Plan B?

end

Belgium

Belgian police thwart another terrorist attack in Antwerp”

(courtesy zero hedge)

 

 

Belgian Police Detain Man Trying To Drive Into Busy Shopping Street Crowd

While initial details are sparse, one day after yesterday’s gruesome car attack on Westminster Bridge allegedly by a “soldier of ISIS”, it appears another Jihadist “copycat” attack was attempted, this time in Antwerp, Belgium where a car tried to enter a shopping street at high speed on Thursday, but the potentially deadly attack was prevented by Belgium police which detained the driver.

  • ANTWERP BELGIUM POLICE SAYS CAR TRIED TO ENTER SHOPPING STREET AT HIGH SPEED ON THURSDAY
  • ANTWERP BELGIUM POLICE SAYS ONE PERSON DETAINED
  • BELGIAN POLICE ARREST MAN TRYING TO DRIVE INTO CROWD
  • ANTWERP BELGIUM POLICE SAYS ADDITIONAL POLICE AND MILITARY PERSONNEL DEPLOYED IN ANTWERP
  • BELGIAN FEDERAL PROSECUTOR SAYS MAN ARRESTED IN ANTWERP IS FRENCH NATIONAL LIVING IN FRANCE

As AFP adds, the Belgian police on Thursday discovered a car containing arms and illegal
material in the city of Antwerp and cordoned off a parking area where
the car was stopped, local media reported. The car, registered in France, seemed to have been chased down after it tried to run a red light, according to La Libre news outlet.

Bart De Wever, the city’s mayor, is reportedly expected to hold a press conference where he will announce that an attack has been thwarted. According to media reports, the car was trying to hit pedestrians. Demining teams have reportedly been summoned to the parking.

end

 

Credit Suisse Bank

Credit Suisse shares tumble when they will also sell 3 billion dollars worth of stock

(courtesy zero hedge)

Credit Suisse Shares Tumble On Report It May Sell $3 Billion In Stock

First Deutsche Bank, now Credit Suisse: according to Bloomberg, the second largest Swiss bank, is also preparing to take advantage of euphoric markets and is considering selling stock valued at more than 3 billion Swiss francs ($3 billion) as it seeks to boost capital levels. The news sent the stock sliding.

Bloomberg adds that Credit Suisse could seek to raise 10 percent of its market value, or about 3.1 billion francs, through an accelerated stock sale to institutions, which wouldn’t need investors to sign off. The lender is also speaking with advisers about raising as much as 5 billion francs, subject to shareholder approval, the people said.

The share sale would be an alternative to Swiss unit IPO, BBG writes adding that the bank said to discuss raising up to CHF5B

The fundraising, which could happen in the first half of the year, would replace plans for an initial public offering of the company’s Swiss unit, they said. No final decisions have been made and Credit Suisse may decide against a deal, the people said. Meanwhile, preparation is continuing on the IPO, one of the people said.

 

Investors are returning to European banks in the belief economic growth and rising interest rates could strengthen earnings. German rival Deutsche Bank AG said this month it would raise 8 billion euros ($8.6 billion) by selling stock to strengthen its capital reserves and boost growth. Italian lender UniCredit SpA successfully raised 13 billion euros from investors in February.

While we don’t know how much TLTRO Credit Suisse was allotted in today’s final ECB “free money” operation, we wonder why the bank doesn’t simply use the zero-cost proceeds to buy its own stock.

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Another Russian gunned down in broad daylight in the Ukraine capital of Kiev

(courtesy zero hedge)

Former Russian Lawmaker Shot Dead In Broad Daylight In Ukraine Capital

A former Russian MP wanted by Moscow for fraud was shot dead in broad daylight in the heart of the Ukrainian capital on Thursday in what Kiev branded “state terrorism.”

“There was an exchange of fire in front of the entrance to the Premier-Palace Hotel about 40 minutes ago. One man was killed and two other persons were injured. The identity of the killed man has been established. He is a Russian politician, a former State Duma member. Yes, I can confirm that he is Denis Voronenkov,” the head of Kiev police, Andrey Krishchenko, said, as cited by TASS.

The former lawmaker was shot twice in the head when he was on the corner of Taras Shevchenko Boulevard and Pushkinska Street, near the main entrance to Kiev’s Premier Palace Hotel.

According to AFP, Kiev police chief Andriy Kryshchenko confirmed in televised comments that “the identity of the dead man has been established” as former Communist lawmaker Denis Voronenkov.

Denis Voronenkov was shot on a busy street in Kiev

Krishchenko said the assailant injured Voronenkov’s bodyguard, who fired at him in return. “[The suspect]  is under police protection, he is being given priority medical assistance at a hospital,” Krishchenko told reporters.

Voronenkov, a former member of the Russian Communist Party, emigrated from Russia to Ukraine in October 2016. He received Ukrainian citizenship in December, having given up his status as a Russian citizen. He was highly critical of the Russian authorities.

As RT adds, Voronenkov had been on a federal wanted list in Russia since February 15, as well as on an international wanted list since February 27, charged with masterminding a large-scale fraud. The fugitive lawmaker’s alleged corruption also featured in an investigation by Russian opposition figure Aleksey Navalny, who had reportedly discovered that Voronenkov had far more assets than his officially-declared yearly income of 2.4 million rubles (about $41,700).

Russian MP killed in Kiev

He was gunned down in broad daylight on a busy Kiev street

Police were weighing the possibility that Voronenkov was targeted in a contract killing “considering the identity of the victim, his activities and how the crime was carried out,” Kryshchenko said.

Russian MP killed in Ukraine

The former Russian lawmaker was killed and his bodyguard injured

Ukrainian President Petro Poroshenko blamed Russia for what he said was a “cunning murder”, saying Voronenkov’s killing was an “act of state terrorism”, his spokesman Svyatoslav Tsegolko wrote on Facebook.

Kremlin spokesman Dmitry Peskov swiftly dismissed Kiev’s accusations as “absurd” in comments to Russian news agencies.

Denis Voronenkov killed in Kiev

Putin critic and ex-lawmaker Denis Voronenkov was killed in Ukraine

Voronenkov’s bodyguard and the gunman were both injured in the shootout and were being treated in hospital, Kryshchenko said, adding that the gunman’s identity had yet to be established.

Russian MP killed in Kiev

The politician’s plain clothes security guard was also shot

The shooting occurred at around 11:30 am (0930 GMT) in the centre of the Ukrainian capital, police said.

Voronenkov and his wife Maria Maksakova, also a former lawmaker and a well-known opera singer, left Russia for Ukraine last year. Voronenkov received Ukrainian citizenship in December after he testified against Ukraine’s ex-President Viktor Yanukovych, who was ousted in February 2014 amid pro-Western protests.

Voronenkov told Ukrainian media in February that he had repeatedly received threats from Russian security services. Moscow and Kiev have been locked in a bitter dispute since Russia seized Crimea in March 2014, plunging ties between Moscow and the West to their lowest point since the Cold War.

* * *

Ukrainian law enforcers immediately said they believe Russia is behind Voronenkov’s killing. “Considering the identity of the victim, as one of the priority versions we consider the actions of the Russian Federation aimed at eliminating this person as a person who gave important testimony in the processes that took place in Ukraine,” the deputy head of the National Police of Ukraine, Aleksandr Vakulenko, told the press, as cited by Interfax Ukraine.

Less than an hour after the killing, Ukrainian President Petro Poroshenko called it “an act of Russian state-funded terrorism,” according to his press secretary. Poroshenko went on to link Voronenkov’s killing and the massive explosion at an ammunition depot in the Kharkov region of Ukraine that happened late on Wednesday night and continued into Thursday.

“It is no coincidence that the murder took place on the same day as the sabotage at Balakleya in the Kharkov region of Ukraine,” Poroshenko said, as quoted by his press secretary, Svyatoslav Tsegolko, in a Facebook post.

6.GLOBAL ISSUES

 

MEXICO

The Mexican finance minister warns Mexican companies not to participate in the construction of the wall

(courtesy zero hedge)

Mexico’s Finance Minister Warns Mexican Companies “Not To Participate In Construction Of The Wall”

As Trump seeks proposals for an impenetrable, yet “aesthetically pleasing”, 30-foot border wall, Mexico’s government on Tuesday warned Mexican companies that it would not be in their best “interests” to participate in the project even though there will be no explicit legal restrictions or sanctions to stop them if they tried.  Per Reuters:

“We’re not going to have laws to restrict (companies), but I believe considering your reputation it would undoubtedly be in your interest to not participate in the construction of the wall,” said Mexican Economy Minister Ildefonso Guajardo.

 

“There won’t be a law with sanctions, but Mexicans and Mexican consumers will know how to value those companies that are loyal to our national identity and those that are not,” Guajardo added.

 

His comments echo those of Mexico’s foreign minister Luis Videgaray, who said on Friday that Mexican companies that see a business opportunity in the wall should “check their conscience” first.

Despite the warnings, Cemex, one of the world’s largest cement producers, has said it is open to providing quotes to supply the raw materials for the border wall and competitor Grupo Cementos de Chihuahua has also signaled a readiness to work on the project.

Meanwhile, the only Mexican company, out of some 720 in total, to put its name down on the U.S. government’s website for business opportunities as an interested vendor for the wall construction, is a small, four-member concern from the central city of Puebla that wants to provide LED lights that it imports mostly from China.

Mexico Econ Minister

Ildefonso Guajardo Villarreal, Mexico’s Economy Minister

 

Of course, while the Mexican government offers up warnings without any real teeth, in the Communist country of California, politicians have actually introduced legislation to ban its pension funds from investing in companies that provide their services to build the wall…because who care about fiduciary duties?  From our post yesterday:

A new piece of legislation recently introduced in California, Assembly Bill (AB) 946 or the “Resist the Wall Act,” would require the California Public Employee Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) – the nation’s first and second largest pension funds – to liquidate within 12 months any investments in companies involved in the construction of President Trump’s “Wall of Shame”.  The bill also requires the two pension funds to report to the Legislature and the Governor by January 1, 2019 with a list of companies from which they have liquidated investments or plan to do so.

 

Not surprisingly, the legislation was penned by a trio of Cali democrats including Assemblymembers Phil Ting (D-San Francisco), Lorena Gonzalez Fletcher (D-San Diego), and Eduardo Garcia (D-Coachella).

Californians build bridges not walls. AB 946 asks PERS and STRS to the wall and divest from its builders. https://a19.asmdc.org/press-releases/ca-lawmakers-push-state-divest-companies-building-trumps-border-wall 

 

In a press release posted to his website, Ting said that “Californians build bridges not walls” and declared for all of California that they want no part of Trump’s “Wall of Shame.”

“Californians build bridges not walls.  This is a wall of shame and we don’t want any part of it.  Immigrant stories are the history of America and this is a nightmare,” said Ting.  “Asian Americans know the pains of being blocked from immigrating to the United States.  We endured that indignity under an act of Congress for decades.  We must stand together and fight this wall because it symbolizes weakness and hate to the world.”

 

“The state’s contracting and investment practices should reflect the values of our state,” said Gonzalez Fletcher.  “It’s clear the people of California don’t want to invest in the hateful values that the Trump wall represents.”

 

“It is counterproductive to invest in projects that will not serve the best interest of all Californians.  It is the responsibility of the legislature to safeguard our values and create opportunities for economic growth, rather than to bar them,” stated Garcia.  “We cannot build up our dreams if our resources are being used to build a wall.”

Shockingly, Villarreal did not provide an update on how/where Mexico will source the $15-$20 billion in funds required to pay for the wall during his comments.

end

 

GLOBAL ART MARKET

Another sign of global growth problems:  the art bubble just crashed

(courtesy zerohedge)

Art Bubble Pops As Sales Crash To Lowest Level Since ‘Great Recession’

Just as Yellen & Co. has finally decided that ‘Everything is Awesome’ and started raising interest rates (the timing of which we’re almost certain was in no way influenced by the conclusion of the recent election cycle), signs continue to mount that global economies are not as healthy as the Fed suddenly believes them to be.  In fact, over just the past couple of days we’ve highlighted a litany of negative economic data points including crashing bank loan creation, surging auto loan delinquencies and continuous deterioration of the retail sector, just to name a few.

And while the mega wealthy folks of the world are typically somewhat immune from the economic cycle, even they are suddenly taking a breather from purchases of multi-million dollar works of fine art which have collapsed to levels not recorded since 2009.  Per Bloomberg:

Sales of art and antiques dropped 11 percent to $56.6 billion, according to a report released on Wednesday by UBS Group AG and Art Basel. The decline, on top of a 7 percent slide in 2015, wipes out the gains seen in 2013 and 2014, when sales reached an all-time high of $68.2 billion.

 

“It was quite a challenging year for the art market,” Clare McAndrew, founder of Arts Economics that prepared the report, said in a telephone interview.

 

Her outlook for 2017 is cautious, with sellers holding back as economic and geopolitical uncertainty continues in many countries. Buyers, on the other hand, may view art and antiques as “a relative safe haven amidst volatility elsewhere,” increasing prices for the works that appear on the market, according to the report.

Art

 

This follows a note we published a few weeks ago noting that Russian billionaire Dmitry Rybolovlev had taken a 74% bath on a Paul Gauguin piece he purchased in 2008 for $85 million.

Russian billionaire Dmitry Rybolovlev paid €54 million or $85 million for a landscape by Paul Gauguin in a private transaction in June 2008. Yesterday, he incurred a whopping 74% loss on his store of value “investment” as reported by Bloomberg:

 

Gauguin’s 1892 landscape “Te Fare (La Maison)” fetched 20.3 million pounds ($25 million), including commission, at Tuesday evening’s sale of Impressionist and modern art at Christie’s in London. Rybolovlev will net about $22 million based on the hammer price. The auction house had estimated the value at $15 million to $22.4 million. The buyer was a client of Rebecca Wei, president of Christie’s Asia.

 

The Gauguin was one of four Rybolovlev pieces offered for sale on Tuesday. Another work, a Mark Rothko painting, will be auctioned March 7.

Of course, not all fine art is created equal…here were the biggest losers of 2016:

  • Auction sales declined 26 percent to $22.1 billion, according to the report, released to coincide with the opening of Art Basel Hong Kong.
  • Sales of postwar and contemporary works at auction fell 18 percent to $5.6 billion; modern art was down 43 percent at $2.6 billion; the Impressionist category declined 31 percent to $1.3 billion.
  • The high end of the auction market — where prices for artworks exceed $1 million — fell 34 percent. Trophies priced at more than $10 million saw the biggest decline, at 53 percent.
  • Industry leaders Sotheby’s and Christie’s lost market share, together accounting for 38 percent of the auction sales, down from 42 percent in 2015.

https://www.bloomberg.com/api/embed/iframe?id=1c1071d4-f095-4b43-a944-f996d37a3af6

7. OIL ISSUES

The banks may stop the funding of new rigs in the shale industry if they deem the risk is too great

(courtesy  Slav/OilPrice.com)

Are Banks About To Derail The New U.S. Shale Boom?

Authored by Irinia Slav via OIlPrice.com,

Just when international oil benchmarks are sliding down, banks are preparing to review the credit lines of U.S. E&Ps. Starting in April, lenders will reassess companies’ creditworthiness on the basis of reserves, production trends, current prices, and future prospects for the industry, among others. Should anything spark worry, banks will be quick to start reducing their exposure, cutting credit lines and arresting producers’ recovery at a crucial point.

This year, U.S. E&Ps have announced an overall spending increase of $25 billion from 2016, an 11-percent rise, as a clear sign of continuing optimism after the November OPEC-non-OPEC deal that aimed to shave 1.8 million barrels of crude off daily global supply.

Besides boosting spending plans, producers have been adding rigs at a respectable pace: at the end of last week, active oil and gas rigs in the United States totaled 789, an increase of 313 over a year ago. They are also investing in more efficient drilling technologies, aiming for ever lower production prices in the aftermath of the oil price crash.

The banks could put a stop to all this if they deem the outlook for oil prices or any other element of their assessment methodology unfavorable. For oil prices, more bad news seems to be on the way if we are to trust Goldman Sachs.

The investment bank said in a note yesterday that record-high investments in 2011-2013 could start bearing fruit this year and the next two, adding around a million barrels of crude to global daily production on an annual basis in the period 2017-2019. That will only happen if the mega projects that swallowed the huge investments deliver as expected, which is by no means certain.

This message contrasts with an earlier one, contained in another note to investors, which saw global oil supply tightening thanks to the OPEC deal. In fact, at the time – a month ago – Goldman was of the opinion that the draw in global stockpiles would completely offset the rise in U.S. shale output.

But for now, Brent crude is now trading below $51 and WTI has dropped below $48 a barrel. Investors are watching OPEC again for a possible extension of the production cut deal, but it’s still uncertain if it will happen, and even if it does, no one knows what the effect of an extension would be.

end

8. EMERGING MARKETS

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

Euro/USA   1.0785 DOWN .0004/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 GREEN 

USA/JAPAN YEN 111.04 DOWN 0.315(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 1.2504 UP .0033 (Brexit by March 2017/UK government loses case/parliament  voted to the affirmative/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 1.3328 DOWN .0005 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU)

Early THIS THURSDAY morning in Europe, the Euro FELL by 4 basis points, trading now BELOW the important 1.08 level FALLING to 1.0785; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED UP 3.33 POINTS OR 0.10%     / Hang Sang  CLOSED UP 7.29 POINTS OR 0.03% /AUSTRALIA  CLOSED UP 0.38%  / EUROPEAN BOURSES ALL IN THE GREEN 

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

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

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

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

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

The NIKKEI: this THURSDAY morning CLOSED UP 43.93 POINTS OR 0.23%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 7.29 POINTS OR 0.03% / SHANGHAI CLOSED UP 3.33 OR .10%/Australia BOURSE CLOSED UP 0.38%/Nikkei (Japan)CLOSED UP 43.93 OR 0.233%  / INDIA’S SENSEX IN THE  GREEN

Gold very early morning trading: $1248.15

silver:$17.59

Early THURSDAY morning USA 10 year bond yield: 2.412% !!! PAR IN POINTS from WEDNESDAY 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  3.024, UP 1 IN BASIS POINTS  from WEDNESDAY night.

USA dollar index early THURSDAY morning: 99.72 UP 0 CENT(S) from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

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And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 4.190%  UP 3  in basis point yield from WEDNESDAY 

JAPANESE BOND YIELD: +.057%  DOWN 4/10  in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.731%  PAR IN basis point yield from WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.271 UP 2 POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 54 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.429% UP 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.0784 DOWN .0005 (Euro DOWN 5 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.19 DOWN: 0.175(Yen UP 18 basis points/ 

Great Britain/USA 1.2524 UP 0.0054( POUND UP 54 basis points)

USA/Canada 1.3329 DOWN 0.0004(Canadian dollar UP  4 basis points AS OIL FELL TO $47.80

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This afternoon, the Euro was DOWN by 5 basis points to trade at 1.0784

The Yen ROSE to 111.19 for a GAIN of 18 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 54  basis points, trading at 1.2524/

The Canadian dollar ROSE by 4 basis points to 1.3329,  WITH WTI OIL FALLING TO :  $47.80

The USA/Yuan closed at 6.8861/
the 10 yr Japanese bond yield closed at +.057% DOWN 2/5 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 4  IN basis points from WEDNESDAY at 2.43% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.036 UP 2  in basis points on the day /

Your closing USA dollar index, 99.77 UP 9  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 THURSDAY: 1:00 PM EST

London:  CLOSED UP 15.99 OR 0.22% 
German Dax :CLOSED UP 135.56 POINTS OR 1.14%
Paris Cac  CLOSED UP 38.06 OR 0.16%
Spain IBEX CLOSED UP 95.60 POINTS OR 0.93%
Italian MIB: CLOSED UP  214.05 POINTS OR 1.07%

The Dow closed DOWN 4.72 OR 0.02%

NASDAQ WAS closed DOWN 3.95 POINTS OR 0.07%  4.00 PM EST
WTI Oil price;  47.80 at 1:00 pm; 

Brent Oil: 50.61  1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.41  UP 34/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES TO +0.429%  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:$47.70

BRENT: $50.51

USA 10 YR BOND YIELD: 2.418%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.03%

EURO/USA DOLLAR CROSS:  1.0785 DOWN .0003

USA/JAPANESE YEN:110.98   DOWN .383

USA DOLLAR INDEX: 99.73  down 0  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2521 : UP .0051  OR 51 BASIS POINTS.

Canadian dollar: 1.3353  up .0020

German 10 yr bond yield at 5 pm: +.429%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Vote Fiasco Leads To Longest Dow Losing Streak In 7 Months

 

Freedom Caucus To Trump/Ryan: “None Shall Pass”…

 

Today’s stock market (much more so than bonds and FX) was beholden to healthcare headlines all day…The Dow closed red – for the sixth day in a row – the longest losing streak since August 2016

  • 0855 Drop – Freedom Caucus Meeting postponed
  • 0930 Rally – Brady – 95% agreement of health bill
  • 0940 Drop – Brooks – 30-40 “no” votes still
  • 1030 Rally – Freedom Caucus Meeting
  • 1300 Drop – Freedom Caucus Meeting ends with no agreement
  • 1330 Rally – Spicer press conference confirms vote will take place tonight
  • 1505 Drop – Ryan Press Conference Postponed
  • 1520 Rally – Trump “we have a chance”
  • 1530 Drop – House delays vote on health bill amid doubts it can pass
  • 1557 Rally – Freedom Caucus committed to working with the President

 

Small Caps outperformed but the delay news pushed everything lower into the close, until the Freedom Caucus offered some hope right at the close…

 

But in the context of Tuesday’s drop, it’s really not a bounce…

 

VIX jumped back above 13, ending with its highest close of 2017…

 

Across the asset classes

 

Banks remain in the doldrums, dropiong back into the red after a smal lhope-filled bounce early on…

 

High yield bond prices dropped once again…

 

Treasury yields traded in an extremely narrow range today but remain notably lower and flatter post-Fed…

 

The Dollar Index also flatlined today (with Yen strength offsetting AUD weakness)…

 

Gold remains stable as Bitcoin drops..

 

The gap between fact and fiction has narrowed a little…

 

Finally, this is what we hear from The Fed’s so-called elites…FED’S WILLIAMS SAYS ECONOMY MOMENTUM VERY POSITIVE: WSJ – not so fucking much actually!!

END

In continuation of the story reported to you yesterday on “incidental surveillance” it seems that during the Obama administration final days, there was a flurry of FISO warrants issued.  These warrants are issued solely against foreign nationals who may be suspected of spying on the uSA or may be used to gather intelligence against a foreign national who may do harm to the uSA. If the foreign national is talking to a USA person, that person must be minimized or blocked out. If this person is not blocked out then dissemination is criminal as that person’s rights have been violated.  Obama in his last days of office allowed the dissemination of information gathered under the FISO warrants to 17 uSA agencies and this is how Flynn was snarled.

What is fascinating here is that there is no evidence whatsoever of Russian interference in the uSA election, which is what the Democrats have been stating for weeks;

 

(courtesy zero hedge)

 

Nunes Confirms There Was “Incidental Surveillance” Of Trump During Obama Administration, “Seems To Be Inappropriate”

Update: House Intel Chairman Nunes spoke to reporters when he left the briefing at The White House and had some more stunning things to say:

  • *NUNES: BRIEFED PRESIDENT ON CONCERNS OVER INCIDENTAL COLLECTION
  • *NUNES: `PRESIDENT NEEDS TO KNOW’ THESE INTEL REPORTS EXIST
  • *NUNES: SOME OF WHAT I’VE SEEN SEEMS TO BE `INAPPROPRIATE’
  • *NUNES: TRUMP, OTHERS IN TRANSITION PUT INTO INTELLIGENCE REPORT
  • *NUNES: QUESTION IS IF TRUMP SHOULD BE IN THESE `NORMAL’ REPORTS

And the punchline: there are “multiple FISA warrants outstanding against Trump” Nunes also told reporters:

Wow – Nunes just said there are “multiple FISA warrants out there” involving Trump.

*  *  *

As we detailed earlier, it appears Trump may have been right, again.

Two days after FBI director Comey shot down Trump’s allegation that Trump was being wiretapped by president Obama before the election, it appears that president Trump may have been on to something because moments ago, the House Intelligence Chairman, Devin Nunes, told reporters that the U.S. intelligence community incidentally collected information on members of President Trump’s transition team, possibly including Trump himself, and the information was “widely disseminated” in intelligence reports.

As AP adds, Nunes said that President Donald Trump’s communications may have been “monitored” during the transition period as part of an “incidental collection.”

Nunes told a news conference Wednesday that the communications appear to be picked up through “incidental collection” and do not appear to be related to the ongoing FBI investigation into Trump associates’ contacts with Russia. He says he believes the intelligence collections were done legally, although in light of the dramatic change in the plotline it may be prudent to reserve judgment on how “incidental” it was.

“I recently confirmed that on numerous occasions, the intelligence community collected information on U.S. individuals involved in the Trump transition,” Nunes told reporters.

“Details about U.S. persons involved in the incoming administration with little or no apparent foreign intelligence value were widely disseminated in intelligence community reports.”

The information was “legally brought to him by sources who thought we should know it,” Nunes said, though he provided little detail on the source.

BREAKING!!! Rep Devin Nunes (Intel Cmte Chmn):
There was “Incidental collection” of @realDonaldTrump thru IC surveillance <- BOMBSHELL

Nunes also said that “additional names” of Trump transition officials had been unmasked in the intelligence reports. He indicated that Trump’s communications may have been swept up. 

The House Intel Chair said he had viewed dozens of documents showing that the information had been incidentally collected. He said that he believes the information was legally collected.  Nunes said that the intelligence has nothing to do with Russia and that the collection occurred after the presidential election.

Nunes said he briefed House Speaker Paul Ryan (R-Wis.) on the revelation and will inform the White House later today.  Nunes’ statement comes after he and other congressional leaders pushed back on Trump’s claims that former President Obama had his “wires tapped” in Trump Tower ahead of the election.

Nunes said Wednesday that it was unclear whether the information incidentally collected originated in Trump Tower.

The revelation comes in the wake of the committee’s explosive hearing on Monday, at which FBI Director James Comey confirmed that the bureau has been investigating Russia’s election hacking since July, which includes probing possible coordination between members of Trump’s presidential campaign and Moscow.

The meeting represented the panel’s first open hearing on its investigation into Russia’s election meddling and also featured testimony from NSA Director Adm. Mike Rogers.

Nunes says the communications of Trump associates were also picked up, but he did not name those associates. He says the monitoring mostly occurred in November, December and January. He added that he learned of the collection through “sources” but did not specify those source

Politico adds that Nunes is going to the White House later Wednesday to brief the Trump administration on what he has learned, which he said came from “sources.”

Nunes says he is “bothered” by this. Won’t say whether or not intel community spied on Trump et. al. But says he is “concerned.”

While there are no further details, we look forward to how the media narrative will change as a result of today’s latest dramatic development.

 

end

 

The fun will begin:  Schumer says he will oppose Gorsuch’s nomination and urges all Democrats to all oppose. He threatens with a filibuster which will force the Republicans to undergo the nuclear option

(courtesy zero hedge)

 

Schumer Says He Will Oppose Gorsuch Nomination, Threatens Filibuster

Moments ago, Senate Democratic Leader Charles Schumer said he would oppose the nomination of Supreme Court nominee Neil Gorsuch and urge fellow Democrats to do the same. Schumer’s opposition comes minutes after Sen. Bob Casey said he would also oppose Gorsuch.

“After careful deliberation, I have concluded that I cannot support Judge Neil Gorsuch’s nomination to the Supreme Court” Schumer said, adding the Supreme Court nominee “was unable to sufficiently convince me that he’d be an independent check” on Trump.

Schumer also said that Gorsuch is “someone who almost instinctively supports the powerful over the weak.”

The Senate Democrat leader also announced that Democrats will filibuster Gorsuch and force Republicans to muster 60 votes to advance him to a final up-or-down vote. “He will have to earn 60 votes for confirmation. My vote will be ‘no’ and I urge my colleagues to do the same,” he said on the Senate floor.

It was unclear as of now if Republicans would use the “nuclear option” as some have suggested in retaliation.

end

 

The repeal and replace Obamacare bill is to occur later tonight.  Even though it looks like some of Freedom Caucus is willing to support Trump, we now see some of the centrists in the Republican party fold as they state they will not support Ryan’s bill:

(courtesy zerohedge)

 

The Center Folds – GOP Loses Obamacare Reform Votes From ‘Tuesday Group’

It is not just the Freedom Caucus tails of the Republican Party that are holding out from the Obamacare reform vote, GOP centrists in the House are fleeing from their party’s first major legislative test of President Trump’s reign.

As The Hill reports, centrist defections in the last 24 hours include Rep. Charlie Dent (R-Pa.), the co-chairman of the moderate Tuesday Group, which has roughly 50 members.

Reps. Dan Donovan (R-N.Y.), David Young (R-Iowa), Chris Smith (R-N.J.), Frank LoBiondo (R-N.J.), and Jaime Herrera Beutler (R-Wash.), all centrists, have also announced their opposition to the bill.

 

Reps. Leonard Lance (R-N.J.) and John Katko (R-N.Y.), two other centrists, earlier announced their opposition.

 

That brings the number of centrist no votes to at least eight, though there could be more.

Republican leaders can afford 22 defections and still pass their legislation, which all House Democrats are expected to oppose.

Centrists warn that their constituents would lose coverage under the repeal bill, and some have even said that ObamaCare is better than the Republican bill. A group of centrists met with leadership in Speaker Paul Ryan’s (R-Wis.) office Wednesday night to discuss where they are on the legislation and their concerns.

“Everybody’s frustrated, but some moved, some stayed the same, and some got more equivocal,” said a GOP lawmaker who attended the meeting.

Finally, The Hill points out that deep cuts to Medicaid in the GOP bill, and the end of ObamaCare’s expansion of the program, are also major sources of centrist objections.

“The overriding concern I have is the Medicaid expansion being significantly altered,” Smith, whose home state of New Jersey accepted the expansion, told the Asbury Park Press. “It affects so many of our disabled individuals and families, and the working poor.”

Many centrists remain undecided, including electorally vulnerable members like Rep. Barbara Comstock (R-Va.).

The center is not holding as RINOs emerge everywhere when the vote actually means something.

Ironically the Freedom Caucus seems to be coming around…

Lengthy standing ovation from the Freedom Caucus when @POTUS walked into the Cabinet Room just now. Big momentum toward .

end

 

 

Then the following happened which is something we promised you..the Republicans cannot altogether agree on healthcare:  The Freedom caucus walks out  and thus

NO DEAL!!

 

(courtesy zero hedge)

Dow Slides: Gasparino Says “No Deal” After Freedom Caucus Leaves White House

Having rallied on news that The Freedom Caucus gave President a ‘standing ovation’ upon his entry, Fox Business’ Charlie Gasparino reports that The Freedom Caucus has just left without agreement

Stocks are not happy.

 

 

And some conetxt for the drop…

 

The bottom line is for now, the market thinks the vote will be a “no” or won’t happen.

Here is the time line for today’s no vote and events that lead up to that decision!~

First the headlines:

“No Deal” – Talks Break Down, Freedom Caucus Says “Vote Will Fail If Held Tonight”

and

“Stinging Defeat For Trump”: House Delays Health Care Vote On Doubts It Can Pass

Summary of the chaotic day’s key events:

  • GOP House leaders delayed their planned vote Thursday to repeal and replace “Obamacare,” which as AP put it was a “stinging defeat” for Paul Ryan and President Trump in their first major legislative test.
  • The decision came after Trump failed to reach agreement with a bloc of rebellious conservatives. Moderate-leaning Republican lawmakers were also bailing on the legislation, leaving it short of votes.
  • At least 30 Republicans said they opposed the bill, enough to defeat the measure. But the number was in constant flux amid the eleventh-hour lobbying.
  • The bill could still come to a vote in coming days, but canceling Thursday’s vote is a significant defeat. It came on the seven-year anniversary of President Barack Obama signing the Affordable Care Act, years that Republicans have devoted to promising repeal.
  • “No deal,” House Freedom Caucus Chairman Mark Meadows, R-N.C., said after he and his group of more than two dozen rebellious conservatives met with Trump to try to get more concessions to reduce requirements on insurance companies.
  • The Republican legislation would halt Obama’s tax penalties against people who don’t buy coverage and cut the federal-state Medicaid program for low earners, which the Obama statute had expanded. It would provide tax credits to help people pay medical bills, though generally skimpier than Obama’s statute provides. It also would allow insurers to charge older Americans more and repeal tax boosts the law imposed on high-income people and health industry companies.The measure would also block federal payments to Planned Parenthood for a year, another stumbling block for GOP moderates.
  • A Quinnipiac University poll found that people disapprove of the GOP legislation by 56 percent to 17 percent, with 26 percent undecided. Trump’s handling of health care was viewed unfavorably by 6 in 10.
  • GOP leaders had targeted Thursday for the climactic vote, in part because it marks the seventh anniversary of Obama’s signing the measure into law. With the House in recess awaiting the outcome of the White House meeting, C-SPAN aired video of that signing ceremony.
  • House Minority Leader Nancy Pelosi, D-Calif., couldn’t resist a dig. “You may be a great negotiator,” she said of Trump. “Rookie’s error for bringing this up on a day when clearly you’re not ready.”
  • A key moderate who had been in the meeting, Rep. Charlie Dent of Pennsylvania, issued a statement saying he would be voting “no” on the health bill. “I believe this bill, in its current form, will lead to the loss of coverage and make insurance unaffordable for too many Americans,” said Dent, a leader of the Tuesday Group of moderate-leaning Republicans.

* * *

Update 9: And the tiebreaker – no vote today, a vote is tentatively planned for Friday. House GOP leadership has just announced that there will not be a vote on the healthcare bill today. The entire House GOP conference will meet tonight at 7 p.m. to discuss next steps.
 

* * *

Update 8: Now it gets chaotic, because on one hand some are saying there will not be a vote…

  • HOUSE SAID NOT TO VOTE TODAY ON HEALTH CARE BILL: POLITICO
  • HOUSE WILL NOT VOTE ON HEALTHCARE BILL ON THURSDAY -MSNBC, CITING REPUBLICAN LEADERSHIP SOURCE

… while others are saying there will”

  • U.S. REPUBLICAN REPRESENTATIVE BRADLEY BYRNE, AFTER MEETING IN HOUSE SPEAKER RYAN’S OFFICE, SAYS IT’S “STILL THE PLAN” TO VOTE THURSDAY NIGHT ON HEALTHCARE BILL
  • HOUSE WILL NOT VOTE ON HEALTHCARE BILL ON THURSDAY -MSNBC, CITING REPUBLICAN LEADERSHIP SOURCE
  • TRUMP SAYS “I THINK WE’RE DOING WELL. WE’LL FIND OUT IN ABOUT THREE HOURS.”
  • U.S. HOUSE REPUBLICANS TO HOLD CLOSED DOOR MEETING ON HEALTHCARE BILL AT 7 P.M. EDT/2300 GMT – SENIOR HOUSE REPUBLICAN AIDE

In short, total chaos, although it appears that the “no vote” is far more likely.

* * *

Update 7:  According to White House spokesman, Sean Spicer, despite the failure of talks with the Freedom Caucus, the vote will still be held “tonight.”

* * *

Update 6:

Freedom Caucus members leaving the White House after a meeting with President Trump said they have not reached a deal that would allow them to support an repeal-and-replace vote on Thursday, while the White House said it had made a final “take it or leave it” offer to the Freedom Caucus on the Health bill.

The members streaming out of the White House just after 1 p.m. characterized the meeting positively but showed no signs of a shift toward more favorable ground for the White House and House GOP leadership pushing the bill.  “Nothing new was agreed upon,” said Rep. Paul Gosar (R-Ariz.)

The problem is that acording to the Freedom caucus, there were no concessions by the White House. As Bloomberg adds, Rep. Patrick McHenry, a member of the House whip operation seeking to win support for measure, says it’s up to Freedom Caucus to accept offer or not. Rep. Thomas Massie, a Republican who earlier described himself as a “hell no” on the deal, said no “definitive deal” yet, though said he heard Freedom Caucus and Trump had a “good meeting.” He said leadership in “real trouble” on vote, it would be irresponsible to vote immediately without full CBO score and as such he remains opposed.

Rep. Jeff Duncan (R-S.C.) told The Hill that Trump, who joined them in the meeting, didn’t make an explicit ask. “He was very gracious, he laid out his points but no firm decision has been made by those in the room,” Duncan said.

“And he didn’t ask us, he didn’t get on the table and ask us for that. He asked us to seriously consider the position we are in. ”

Most importantly, members of the Freedom Caucus said that if a vote is held tonight, it would fail.  

  • FREEDOM CAUCUS MEMBER AMASH SAYS NOTHING NEW CAME OUT OF TRUMP MEETING, IF THE VOTE IS HELD TONIGHT, IT WILL FAIL
  • HOUSE FREEDOM CAUCUS CHAIRMAN MEADOWS SAYS HOPEFUL CAUCUS’ “REASONABLE REQUESTS” WILL ULTIMATELY BE AGREED TO

* * *

Update 5: Following The Freedom Caucus meeting without agreement:

  • *FREEDOM CAUCUS MEMBERS SAY NO DEAL MADE: THE HILL

Rep. Phil Roe – known to be closely aligned with House leaders – told reporters that his sense on vote timing was “not today, probably tomorrow.”

*  *  *

Update 4:  Or maybe the White House is just getting ahead of itself. According to Fox News’ Charlie Gasparino, the “freedom caucus say their members are still a NO but @WhiteHouse still predicting a victory.”

Sources close to @freedomcaucus say their members are still a NO but @WhiteHouse still predicting a victory. I discuss NOW!

Finally, here are the latest whip lists:

  • CBS News: 31 “cannot support the bill in its current form”
  • CNN: 24 “no” votes
  • The Hill: 29 “no” votes
  • Huffington Post: 29 “extremely likely to be against”
  • NBC News: 30 “against the bill or leaning against it”
  • New York Times: 29 “no” votes
  • NPR/WNYC: 32 “opposed”
  • Washington Post: 36 “opposed”

Update 3: Maybe those Wall Street forecasts, noted earlier, of a delay to today’s vote will be wrong after all. The reason: according to Cliff Sims, special assistant to Trump, there was a “lengthy standing ovation from the Freedom Caucus when @POTUS walked into the Cabinet Room just now” to which the aide added that there is “Big momentum toward #RepealAndReplace.”

Lengthy standing ovation from the Freedom Caucus when @POTUS walked into the Cabinet Room just now. Big momentum toward .

White House aide says Trump got long standing O from House Rs invited to haggle over health care bill. https://twitter.com/csims45/status/844939957416407041 

So while centrists may be getting cold feet in supporting Obamacare repeal, the conservatives appear to be moving toward supporting the Trump legislation, and since it is their numbers that matter, the market’s bout of optimism may be justified, especially if the vote is to take place today as expected, which would suggest enough Yes votes have been whipped. Sure enough:

  • REPUBLICAN REPRESENTATIVE MESSER, AFTER MEETING WITH HOUSE SPEAKER RYAN, SAYS STILL HOPING TO HOLD VOTE ON HEALTHCARE BILL ON THURSDAY

And then this:

  • HOUSE REPUBLICAN STUDY COMMITTEE CHAIRMAN WALKER TELLS MSNBC HOUSE WILL VOTE ON HEALTHCARE BILL ON THURSDAY EVENING, BELIEVES IT WILL PASS

* * *

Update 2:  Earlier this morning we said the following:

“…the further we press into today without confirmation that Republicans have narrowed the opposition votes from their own party down to 22 or less (as of last night the estimate was 25-30) the more unlikely the vote is to proceed.”

It now looks like other analysts are coming around to that fact as well and are lowering their expectations of TrumpCare passing the House today.  Per Bloomberg, Veda analyst Spencer Perlman has lowered his odds to 60% that a vote will occur before the weekend and Beacon Policy Advisors notes simply that the vote is “likely to slip until later today or possibly even into the weekend…”

More time likely needed on possible last minute provisions limiting benefits like hospitalization, ambulance services and maternity care, Veda analyst Spencer Perlman writes in note

 

Adding language limiting these benefits may be enough to “squeak the bill” through House, but Veda is increasingly doubtful will get done tonight

 

Sees 60% chance bill passes House before the weekend, previously saw 65% chance it would pass tonight; keeps 10% odds Senate will finish work before April recess

 

Vote is likely to slip until later today or possibly even into the weekend, Beacon Policy Advisors writes

 

Investors shouldn’t view delays as signal AHCA’s chances of passage are dying; instead, continued negotiations may be positive sign, signaling there’s still “willpower” to make concessions, forge agreements

 

end

 

 

Initial claims spike much higher and now these claims are unchanged since Feb 2016:

(courtesy zero hedge)

 

Initial Jobless Claims Surge Most In 10 Months

This trend does not appear to be your friend. Initial Jobless Claims are unchanged since February 2016 after today’s 18k spike to 258k. The last 3 weeks have seen a 15% surge in claims – the biggest spike since May 2016 (and before that since Dec 2013).

 

One wonders how this is possible in an economy that is set for rate-hikes-a-palooza…

end

 

Strange data again:  In the housing sector everything is falling except new home sales: go figure

(courtesy zero hedge)

Spot The Odd One Out – New Home Sales Spike To 7-Month Highs

Existing home sales – down; pending home sales – down; affordability (as rates spike) – down; new home sales – up at 7-month highs (beating all but one of 70 economists’ estimates)

New Home Sales SAAR in Feb printed 592k (beating expectations of 564k by 3 standard deviations)…

Weather played a big role by the look of it…

Northeast sales tumbled 21.4% MoM as Midwest soared 30.9% MoM!

And home prices appeared to tumble to the lowest since July.

 

This is the biggest two-month median home p4ice drop since 1970…

 

Spot the odd one out…

Choose your own narrative.

end

 

Wolf Richter explains why falling used car prices is causing havoc in the car industry and the financial sector which have given massive loans. The cars are used as collateral and this collateral is now underwater.

(courtesy WolfRichter/WolfStreet)

Is This The Sound Of The Bottom Falling Out Of The Auto Industry?

Authored by Wolf Richter via WolfStreet.com,

Not quite, not yet, but it’s not good either.

Let’s hope that the problems piling up in the used vehicle market – and their impact on new vehicle sales, automakers, $1.1 trillion in auto loans, and auto lenders – is just a blip, something caused by what has been getting blamed by just about everyone now: the delayed tax refunds.

In its March report, the National Association of Auto Dealers (NADA) reported an anomaly: dropping used vehicle prices in February, which occurred only for the second time in the past 20 years. It was a big one: Its Used Car Guide’s seasonally adjusted used vehicle price index plunged 3.8% from January, “by far the worst recorded for any month since November 2008 as the result of a recession-related 5.6% tumble.”

The index has now dropped eight months in a row and hit the lowest level since September 2010. The index is down 8% year over year, and down 13% from its peak in 2014.

The price decline spanned all segments, but it hit the two ends of the spectrum — subcompact cars and the luxury end — particularly hard. The list shows the change in wholesale prices from January to February in vehicles up to eight years old:

NADA blamed three factors:

  1. The surge in new vehicle incentive spending. Automakers, drowning in unsold inventories on dealer lots and desperate to move the iron and keep their plants running, increased incentive spending by 18% to the highest level in over a decade. This made new vehicle more competitive with late-model used vehicles. So this would be on the demand side.
  2. The growing flood of used vehicles going through auction. Over the first two months this year, volume of vehicles up to eight years old rose by about 5% year-over-year. Volume of late-model vehicles – the supply from rental car companies and lease turn-ins – jumped 10%. So that’s on the supply side.
  3. The IRS tax refund fiasco. Restaurants, retailers, and others are already blaming various February debacles on these delayed tax refunds. After the IRS was hit with millions of fake e-filed tax returns last year that claimed the Earned Income Tax Credit and the Additional Child Tax Credit, Congress required the agency to delay sending out refunds this year.

It’s big money. According to the IRS, refunds issued through February 10 plunged 69% from the same period a year ago. That’s $65 billion that didn’t make it into consumers’ bank accounts. But then the money was unleashed. In the week ending February 17, the IRS sent out a record $74 billion in refunds. By the week ending February 24, refunds were down only 10%, or $15 billion, year-over-year. So most of the problem was resolved by the end of February.

That might explain part of the problem on the demand side, at least at the lower end of the scale. But it’s hard to explain the plunge in prices at the luxury end. Also, these are wholesale prices. They don’t react instantly to a brief consumer cash crunch caused by tax-refund delays, now resolved. Something else appears to be going on.

The report, in attempting a forecast, cautioned:

February’s unusually soft showing makes pinpointing where used prices will go over the next few months a bit more challenging. However, given the slower than usual rollout of federal tax refunds, it’s assumed prices will be somewhat stronger in March and April than originally anticipated.

The Used Vehicle Index by Manheim, the world’s largest wholesale auto auction, didn’t pick up a massive drop in used vehicle prices over the past few months, though it too is showing some weakness. The index edged down 0.2% in February. The report pointed out that, “given a sharp decline in pricing in February of last year, the Manheim Index now shows a year-over-year gain of 1.1%.”

The index has dropped in six of the past seven months (chart), but in small increments, and as it says, “stability remains the watchword.” It too acknowledge headwinds for the market, including the “heavy new vehicle inventory and incentives,” and “a crazy tax refund season.”

Why are used vehicle wholesale prices important?

For one, they matter to lenders. Used vehicle wholesale prices determine the value of the collateral for $1.11 trillion in auto loans that have boomed on higher prices, higher unit sales, longer maturities (the average hit a new record of 66.5 months in Q4), and higher loan-to-value ratios (negative equity):

Dropping wholesale prices increase loan losses for lenders as recovery is lower. Declining wholesale values of lease turn-ins, if the trend persists, impacts how finance companies structure the lease terms, thus raising the costs for the customers and putting a damper on leasing activity.

All this puts pressure on new vehicle sales, further pushing automakers to pile on even larger incentives in order to move the units, grapple with inventories, and keep plants open. This works for a while – there’s nothing like big-fat incentives to bring out reluctant buyers. But incentives, when everyone is doing them, are front-loading sales. This is ultimately self-defeating and gets very costly even as sales begin to decline. It was a contributor in the collapse of the industry during the Financial Crisis.

And there are well-established patterns of customers switching between new vehicles and late-model used vehicles. Large incentives by automakers put pressure on late-model used vehicles. In turn, falling prices on the used vehicle side cannibalize sales from the new vehicle side. In other words, they compete with each other, often on the same dealer lot. Especially if demand is lackluster despite the incentives, these patterns can trigger a downward spiral that is difficult to get out of.

First oil & gas, then construction, then new vehicle sales. Read…  How Auto Sales Are Getting Crushed in Houston

 

 

END

 

With huge incentives it is no doubt that we will see the big auto companies warn about earnings.  Today it Ford which slashed guidance

(courtesy zerohedge)

 

Ford Stock Slumps To Post-Election Lows After Slashing Guidance

With auto loan growth collapsing

And after admitting that “auto sales have reached a plateau,”  – Below are some of the key comments from Ford executives describing the current conditions in the auto market:

“For the remainder of the year, we continue to see retail in the industry provide incentives still running at historically high levels, but down versus the record that we experienced in 2015.  Looking ahead to 2017, we continue to see industry sales are strong, but at a lower level than this year.

 

Sales have reached a plateau.

 

“It’s just that we’re no longer in a period where we have a lot of pent-up demand coming out of the financial crisis. So that’s why, I think we use the term plateau”

 

Comparisons for the rest of the year are going to be really tough.

Ford has finally faced the music and taken an ax to its earnings guidance.

Ford sees 1Q adj. EPS 30c-35c, est. 47c, blaming higher costs, lower volume & unfavorable exchange rates.

Bob Shanks, our executive vice president and chief financial officer, will host a “Let’s Chat” forum at 10 a.m. EDT today to discuss key items of interest to the investment community.

 

The presentation will note that we expect our total company adjusted pre-tax profit to be about $9 billion in 2017, which is lower than in 2016 driven by our planned investments in emerging opportunities, and to improve in 2018.   

 

We are establishing earnings per share guidance for the first quarter of 2017 in the range of $0.30 to $0.35 for both earnings per share (GAAP) and adjusted earnings per share (non-GAAP).

 

This is lower than our earnings per share in the first quarter of 2016 due to: higher costs (including commodities, warranty, and investments in emerging opportunities); lower volume (primarily fleet); and unfavorable exchange.

 

We continue to expect Ford Credit’s pre-tax profit to be about $1.5 billion in 2017 and to improve in 2018.

The result – shares plunge..

 

Erasing all post-election gains..

 

More fallout from the stupid soda tax in Philadelphia

(courtesy zero hedge)

Pepsi Pulls 12-Packs, 2 Liter Bottles From Philadelphia Stores In Protest Over Soda Tax

Two weeks ago we reported that the latest unintended casualty from Philadelphia’s soda tax would be at least 20% of Pepsi’s 423 employees in the city of brotherly love. According to the Philadelphia Inquirer, with sales slumping as much as 40% because of the new Philadelphia sweetened beverage tax, in the last week of February, Pepsi said it will lay off 80 to 100 workers at three distribution plants that serve the city. And since Pepsi employs 423 people in the city, it means that as much as 20% of its employees will be out of job due to a disastrous ordnance that was meant to provide additional municipal funding and instead will now lead to an increase in unemployment, coupled with a general decline in consumption, not to mention tax revenues for the city of Philadelphia.

The bottling giant sent out notices last Wednesday and said the layoffs would be spread over the next few months. “The layoffs come in response to the  beverage tax, which has cut sales by 40 percent in the city, PepsiCo Inc.” spokesman Dave DeCecco said. “Unfortunately, after careful consideration of the economic realities created by the recently enacted beverage tax, we have been forced to give notice that we intend to eliminate 80 to 100 positions, including frontline and supervisory roles,” DeCecco said.

The layoffs would occur at plants in North Philadelphia, South Philadelphia, and Wilmington. The plants are run as independent businesses required to report profits and losses to the company.

And while Philly mayor Jim Kenney was quick to accuse Pepsi of being selfish, and putting profits over payrolls, that appears to be a losing battle as the local laborers promptly sided with the bottling giant. Anthony Campisi, a spokesman for a coalition of retailers, bottlers, and unions opposed to the tax, said it was unfair for the city to blame the companies for the job loss.

“It’s the mayor who’s to blame for the economic and human impact of the tax,” Campisi said. “And its offensive to blame the impact on Philadelphia businesses that are no longer sustainable because of it.”

But the straw that could break the municipal camel’s back in the deeply democratic city would be if the Teamsters – the backbone of any democratic administration – cry bloody murder, which they are starting to do.   Danny Grace, secretary-treasurer for Teamsters Local 830, which represents many of the employees affected, said in a statement: “Our worst fears have been realized today. … This terrible news, although not surprising, is particularly disastrous for the members of Teamsters Local 830, who rely on a strong soda industry for their livelihoods.”

* * *

Fast forward to today when it appears that the initial round of cost-cutting was very much insufficient, and according to CBS, Pepsi is now pulling 2-liter bottles and 12-packs of its products from Philadelphia grocery store shelves over the city’s new tax on sweetened drinks. The company says it wants to offer products and package sizes working families can better afford.

As described previously, the 1.5-cent-per-ounce tax on sweetened and diet beverages is imposed at the distributor level. If fully passed on to the consumer it amounts to $1.44 on a six-pack of 16-ounce bottles. The company’s decision affects sodas including Pepsi and Mountain Dew and other sweetened drinks like Gatorade and Lipton Iced Tea.

http://up.anv.bz/latest/anvload.html?key=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

Democratic Mayor Jim Kenney’s office says the industry was trending toward smaller sizes well before the tax passed. Earlier this month, Purchase, New York-based PepsiCo Inc. cited the tax when announcing layoffs of 80 to 100 workers at distribution plants serving Philadelphia. Sadly, he seems unable to grasp that when it comes to volume consumers will just be force to buy more smaller soda containers.

But what is most troubling – and to Philadelphia’s democratic leadership, confusing – is that that no matter the passed-thru cost, Pepsi is simply unable to make a profit on any volume, or quantity, of soda, as there is simply no demand to cover the increased costs, and as a result the company has decided to pull two of the most popular size categories from the Philly market.

The result: not only has Pepsi commenced mass layoffs, not only have soda prices soared punishing everyone – not just those who allegedly abuse sugary drinks – but now all consumers just lost, with Pepsi limiting the choice of what they can and can not drink in such dramatic fashion. Meanwhile, Philadelpia’s mayor continues to pretend tht his brilliant plan is going according to plan.

end

This is going to be extremely damaging:  the death spiral now begins as vendors half shipments to Sears and KMart.  And now insurance companies refuse to provide insurance to vendors in Sears does not pay. Remember that Sears is an anchor to many shopping malls!

(courtesy zero hedge)

Sears Enters Death Spiral: Vendors Halt Shipments, Insurers Bail

When we commented yesterday morning on the unexpected “going concern” notice in Sears’ just filed 10-K which sent the stock crashing, we pointed out the immediate spin provided by Eddie Lampert’s distressed retailer which promised that its comeback plan may help alleviate the concerns, “satisfying our estimated liquidity needs 12 months from the issuance of the financial statements”, to which however we added the footnote that “the question is what happens when vendors start demanding cash on delivery as concerns about SHLD.’s liquidity concerns continue to grow.

As it turned out, we wouldn’t have long to wait, because overnight Reuters reported that the worst case Sears scenario we envisioned for Sears is now taking shape and that suppliers to Sears have told Reuters they are doubling down on defensive measures, such as reducing shipments and asking for better payment terms, to protect against the risk of nonpayment as the company warned about its finances.

The company’s disclosure turned the focus to its vendors as tension is expected to mount ahead of the key fourth-quarter selling season amid rising concern about a potential bankruptcy, they said.

Quoted by Reuters, the managing director of a Bangladesh-based textile firm said his company is using only a handful of its production lines to manufacture products for Sears’ 2017 holiday sales. Last year, nearly half of the company’s lines in its four factories were producing for Sears. “We have to protect ourselves from the risk of nonpayment,” said the managing director, who declined to be identified for fear of disrupting his company’s relationship with Sears.

Furthermore, precisely as we predicted, Mark Cohen, the former CEO of Sears Canada and director of retail studies at Columbia Business School said vendors will keep a close eye on Sears’ finances. “Whatever vendors continue to support them are now going to put them on even more of a short string. That means they’ll ship them smaller quantities and demand payment either in advance or immediately upon delivery.”

He added: Sears stores are pathetically badly inventoried today and they will become worse.

Another supplier to Sears, Arnold Kamler, CEO of New Jersey-based bicycle manufacturer and importer Kent International Inc, said he was not surprised by Sears’ Tuesday announcement. He said he noticed a warning sign last year when Sears pushed to increase its purchases, which occurred “because a lot of their current suppliers were either cutting them off or limited them on credit.”

Kamler said he declined to sell Sears more product and that he receives a report once a week from his accounting department because of concerns around billing, payments and deductions.

The Bangladesh-based clothing supplier said Sears’ announcement is making him re-evaluate accepting new orders.

“So far there was only speculation that they would declare bankruptcy in 2017. But now they are acknowledging it, which definitely complicates our relationship with them and our decision to accept future orders from Sears,” the executive said.

A second clothing supplier from Bangladesh who did not wish to be named said he renegotiated payment terms with Sears a year ago and was being paid within 15 days of sending a shipment, compared with the traditional 60 days. He is considering asking the company for an advance payment on orders going forward.

* * *

Sears disagreed, and according to Jason Hollar, the company’s CFO, Sears’ move to raise capital in recent months is helping strengthen the company’s balance sheet he claimed in a blog post.

Sears is “a viable business that can meet its financial and other obligations for the foreseeable future,” Hollar said. He cited a $1 billion increase in liquidity from a new secured loan facility and a new asset-based loan that provided $250 million more in “financial flexibility.” The only problem with this is that Sears continues to be a melting ice cube which while not as bad as Tesla, is burning through hundreds of millions each year, money which in recent years has come out of Eddie Lampert’s pocket, either directly or indirectly, with loan gurantees. At some point even Lampert will realize that throwing away billions to sustain the Sears zombie is no longer a viable strategy, especially if the vendor freak out prompts a sudden need for cash which the company does not have.

Speaking of Sears’ cash, here are some more details from Reuters:

Sears’ cash position has shrunk dramatically in recent years. Sears, which lost $2.22 billion in the year ended Jan. 28, 2017, had $286 million in cash on hand, down from $609 million in 2012. Retailers in distress often use their accounts receivable to finance operations, and Sears had $466 million in receivables, down from $635 million in 2012.

So is a bankrtupcy inevitable? Well, yes, and increasingly so with every passing day that the company avoids filing.

Neil Saunders, managing director at retail research firm GlobalData, said tension will grow as the year goes on. “As we move towards the last quarter, I think we’ll find there are more and more suppliers that are not necessarily willing to engage with Sears” and will demand cash up-front.

 

Another sign of Sears’ weakness is that insurance companies that once provided policies to Sears vendors – insuring against nonpayment for their goods – are no longer doing so.

 

Doug Collins, regional director for risk services at Atradius Trade Credit Insurance, said his firm has stopped providing insurance to Sears vendors. “We tried to hang in as long as we could,” he said. “Vendors may try to get a few more cycles in before the worst happens, and then it just depends if they’re lucky or not.”

Of course, if that’s the case, then Sears has nothing to worry about: if the past 9 years of trading this “market” has shown, is that luck – or hope – is the only strategy that matters for this market, and courtesy of central banks, it always somehow shows up in the last moment.

Well that about does it for tonight

I will see you tomorrow night

H

 

 

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