March 24/Trump pulls the Health bill and down goes the Dow/gold rises by $1.30 and silver rises 16 cents/Another 1.78 tonnes of gold withdrawn from GLD/No movement again at the SLV/Ted Butler reports on the managed money account (hedge funds) COT: a very important read!!/ the NSA is provide “smoking gun” proof that Obama spied on Trump and his transition team during the 2016 election

Gold: $1248.20  UP $1.30

Silver: $17.72  UP 16  cents

Closing access prices:

Gold $1245.60

silver: $17.80!!!










Premium of Shanghai 2nd fix/NY:$12.45


LONDON FIRST GOLD FIX:  5:30 am est  1244.00




For comex gold:



For silver:

For silver: MARCH


Total number of notices filed so far this month: 3646 for 18,230,000 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.


We have now entered options expiry week so expect gold and silver to be subdued from today forward.


The comex options expiry is Tuesday March 28.

The OTC/LBMA options expiry is the morning of March 31.

Let us have a look at the data for today



In silver, the total open interest  ROSE BY 463 contracts UP to 191,977  with the TINY RISE IN PRICE ( 2 CENTS) WITH RESPECT TO YESTERDAY’S TRADING. In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  0.960 BILLION TO BE EXACT or 137% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold also ROSE BY STRONG 6232  contracts DESPITE THE FALL IN THE PRICE OF GOLD ($2.90 with YESTERDAY’S TRADING). The total gold OI stands at 459,089 contracts.

we had 10 notice(s) filed upon for 1000 oz of gold.


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


We had another big change in tonnes of gold at the GLD: a withdrawal of 1.78 tonnes from the GLD.  This gold is no doubt headed for Shanghai

Inventory rests tonight: 832.62 tonnes



We had no changes in inventory at the SLV/

THE SLV Inventory rests at: 332.504 million oz



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

1. Today, we had the open interest in silver ROSE BY 463 contracts UP TO  to 191,977 AS SILVER WAS UP 2 CENT(S) with YESTERDAY’S trading. The gold open interest ROSE BY 6232 contracts UP to 459,089 DESPITE THE FALL IN THE PRICE OF GOLD OF $2.90  (YESTERDAY’S TRADING).

(report Harvey


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

2c) COT report



i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 20.85 POINTS OR .64%/ /Hang Sang CLOSED UP 30.57 POINTS OR 0.13% . The Nikkei closed UP 177.22 OR 0.93% /Australia’s all ordinaires  CLOSED UP 0.73%/Chinese yuan (ONSHORE) closed UP at 6.8862/Oil ROSE to 47.93 dollars per barrel for WTI and 50.83 for Brent. Stocks in Europe ALL IN THE RED    ..Offshore yuan trades  6.8741 yuan to the dollar vs 6.8862 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS CONSIDERABLY AGAIN/ ONSHORE YUAN SLIGHTLY STRONGER BUT  THE OFFSHORE YUAN  IS SLIGHTLY WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY WEAKER DOLLAR. CHINA SENDS HER DISPLEASURE SIGNAL TO WASHINGTON




none today


Wow!! that happened fast! Huishan Dairy’s stock collapsed over 90 in minutes wiping out 4.2 billion in market value

( zerohedge)



The Central Bank of Switzerland spent a mammoth 68 billion dollars worth of Euros in an attempt to keep the Swiss Franc from rising against the Euro.

( zero hedge)




Norway is contemplating putting defense shields on its territory facing Russia.  Russia warns Norway not to do it

( Gorka/StrategicCultureFoundation)


This is a surprise;  Russia cuts interest rates by 25 basis points. What is more surprising is that the Rouble rose despite the fall in rates:

( zero hedge)



Welcome to the new world.  Sweden builds a police fortresss in Rinkeby, a suburb of Stockholm where many of the migrant (many Somalians) now live

( zero hedge)


i)Trump approves the Trans Canada Keystone Pipeline project officially:

( zero hedge)

ii)USA rig counts up 10 weeks in a row and it is double the May 2016 lows. USA cured production is now at 13 month highs

( zero hedge)


Venezuela is now in dire straits as it cannot pay for gasoline or other refined products.  It will probably default later this year.

(courtesy Nick Cunningham/


i)An extremely important paper from Ted Butler.  You will note that I have been providing the managed money account for you on COT days.  Basically Ted is stating that the non technical hedge funds have been accumulating silver and these guys do not budge on raid days.  The long positions on these guys have been rising to around 80,000 contracts and this is coupled with small specs or non hedge funds who have accumulated another 30,000 contracts.  Ted states that the 7 banks that hold 98,000 short positions are “dead men walking

( Ted Butler)

ii)A good look at mining in South Africa.  At one time, South Africa produced over 1000 tonnes of gold, and that was about 90% of world production at that time

( Bloomberg/GATA)

iii)India last month received 37.2 tonnes from Switzerland in February which is terrific as India is now back into gold.  If we extrapolate 37.2 tonnes x 12, India’s demand from Switzerland will exceed 446.4 tonnes.  Switzerland is not the only source for India.

( Lawrie Williams/Sharp Pixley)

iv)We have already reported to you the huge withdrawals of gold from the Shanghai Gold Exchange and that generally equals demand.  The total reported to you two weeks ago for February was 179 tonnes.

However the following is very interesting:  a huge increase in hydro consumption. That generally bodes well for commodities

(Katchum/seeking Alpha)


i)The CBO has now weighed in on the new Ryan proposals and they decided it was simply awful:  it kept all the negatives and almost none of the positives.  The new bill will not cover anybody new and while the original bill saved 337 billion over a 10 yr period, the new plan only saves 150 billion.

the conservatives will not like this at all..

( zero hedge)

ii)Trump issues an ultimatum:  vote on Friday in the affirmative or Obamacare stays.  The Freedom causes may capitulate:

( zerohedge)

iib) updates on the vote: Ryan claims that they do not have enough votes

(zero hedge)

ii c) Ryan pulls the Health Care bill

ii d) And now the last word on today’s debacle courtesy of David Stockman of Daily Reckoning/ContraCorner

iii)This will be explosive:  the NSA is provide “smoking gun” proof that Obama spied on Trump during the 2016 election

( zero hedge)

iv)Nunes calls in Comey and Rogers for a closed session after he states that the intel is very concerning to him:

( zerohedge)

iv) OH OH!! something is up!!

FBI director Comey unexpectedly is called to the White House

( zero hedge)

v)Trump wins as a Virginia Judge correctly refuses to block the revised travel ban

( zero hedge)

vi)Hard data core durable goods shows that growth is very slow and the capital goods also declined:

( zero hedge)

vii)Even soft data USA services PMI, Manufacturing PMI’s both plunge to 6 month lows:

( zero hedge)

viii)the Fed continually claims that inflation is tiny. In reality it is rearing its ugly head.

Inflation is embedded in financial assets

(courtesy zero hedge)

ix)Here is why today’s debacle will make tax reform less likely exactly what David Stockman predicted:

( zerohedge)

x) Today’s wrap up courtesy of Greg Hunter of USAWatchdog


Let us head over to the comex:

The total gold comex open interest ROSE BY 6232 CONTRACTS UP to an OI level of 459,089 DESPITE THE  FALL IN THE  PRICE OF GOLD ( $2.90 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 6 contract(s) RISING TO  27. We had 0 contact(s) served UPON YESTERDAY, so we GAINED 6 CONTRACT(S) or  AN ADDITIONAL 600 ounces will stand for delivery.  The next active contract month is April and here we saw it’s OI LOST 3761 contracts DOWN TO 159,356 contracts.

For comparison purposes, the April 2016 contract at this time had an OI of 152,305 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 1312 contracts. The next big active month is June and here the OI ROSE by 9409 contracts up to 199,172.

We had 10 notice(s) filed upon today for 1009 oz

 And now for the wild silver comex results.  Total silver OI ROSE BY 463 contracts FROM 191,514 UP TO 191,977 WITH YESTERDAY’S 2 CENT GAIN.  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 88 contracts down to 335 contracts. We had 88 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 5 contract(s) to 944 contracts. The next active contract month is May and here the open interest GAINED 174 contracts UP to 143,925 contracts.


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 137 notice(s) filed for 685,000 oz for the MARCH 2017 contract.

VOLUMES: for the gold comex

Today the estimated volume was 220, 225  contracts which is  good.

Yesterday’s confirmed volume was 289,385 contracts  which is very good.

volumes on gold are getting higher!

INITIAL standings for MARCH
 March 24/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 nil oz
Deposits to the Dealer Inventory in oz 999.98 oz


Deposits to the Customer Inventory, in oz 
 nil oz
No of oz served (contracts) today
10 notice(s)
1000 oz
No of oz to be served (notices)
17 contracts
1700 oz
Total monthly oz gold served (contracts) so far this month
82 notices
8200 oz
0.2550 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 1 deposit(s) into the dealer:
 i) Into brinks:  999.98 oz
total dealer deposits:999.98  oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 0  customer deposit(s):
total customer deposits; nil   oz
We had 0 customer withdrawal(s)
total customer withdrawal: nil  oz
We had 0  adjustment(s)

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 10 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

To calculate the initial total number of gold ounces standing for the MARCH. contract month, we take the total number of notices filed so far for the month (82) x 100 oz or 8200 oz, to which we add the difference between the open interest for the front month of MARCH (27 contracts) minus the number of notices served upon today (10) x 100 oz per contract equals 9900 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 (82) x 100 oz  or ounces + {(27)OI for the front month  minus the number of  notices served upon today (10) x 100 oz which equals 9900 oz standing in this non active delivery month of MARCH  (.3079tonnes)
we gained 6 contracts or an additional 600 oz will stand for delivery in March.
On first day notice for MARCH 2016, we had 2.146 tonnes of gold standing. At the conclusion of the month we had 2.311 tonnes standing.
I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first month of January 2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov.    8.3950 tonnes.
DEC.   29.931 tonnes
JAN/     3.9004 tonnes
FEB/ 18.734 tonnes
March: 0.3076 tonnes
total for the 15 months;  244.539 tonnes
average 16.302 tonnes per month vs last yr  61.82 tonnes total for 15 months or 4.12 tonnes average per month (last yr).
Total dealer inventory 1,317,517,752 or 40.980 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,905,820.930 or 277.00 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 277.00 tonnes for a  loss of 26  tonnes over that period.  Since August 8/2016 we have lost 77 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
And now for silver
 March 24. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
121,780.369 oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 nil oz
No of oz served today (contracts)
(685,000 OZ)
No of oz to be served (notices)
198 contracts
(990,000  oz)
Total monthly oz silver served (contracts) 3646 contracts (18,230,000 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  4,616,773.7 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 3 customer withdrawal(s):
i) Out of Brinks: 10,802.85 oz
ii) out of Delaware: 20,836.029 oz
iii) Out of Scotia; 90,123.490 oz
 we had 0 customer deposit(s):
***deposits into JPMorgan have now stopped.
total customer deposits; nil   oz
 we had 0 adjustment(s)
The total number of notices filed today for the MARCH. contract month is represented by 137 contract(s) for 685,000 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 3646 x 5,000 oz  = 18,230,000 oz to which we add the difference between the open interest for the front month of MAR (335) and the number of notices served upon today (137) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the March contract month:  3646(notices served so far)x 5000 oz  + OI for front month of Mar.( 335 ) -number of notices served upon today (137)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 38,986 which is good!!!
Yesterday’s  confirmed volume was 53,687 contracts  which is excellent.
Total dealer silver:  40.515 million (close to record low inventory  
Total number of dealer and customer silver:   190.159 million oz
The total open interest on silver is now further from   its all time high with the record of 224,540 being set AUGUST 3.2016.


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

Let us head over to the gold COT and see what gives!



Gold COT Report – Futures
Large Speculators Commercial Total
Long Short Spreading Long Short Long Short
219,719 103,467 82,582 101,282 230,279 403,583 416,328
Change from Prior Reporting Period
9,404 -810 13,494 -1,253 4,457 21,645 17,141
161 95 90 46 50 245 202
Small Speculators  
Long Short Open Interest  
43,297 30,552 446,880  
-935 3,569 20,710  
non reportable positions Change from the previous reporting period
COT Gold Report – Positions as of Tuesday, March 21, 2017

Interesting report!

Our Large Specs:

those large specs that have been long in gold added a huge 9404 contracts

those large specs that have been short in gold covered a tiny 810 contracts


Our commercials:

those commercials that have been long in gold pitched a tiny 1953 contracts

those commercials that have been short in gold added a small 4457 contracts (for them)

Our small specs:

those small specs that have been long in gold pitched 935 contracts from their long side

those small specs that have been short in gold added 3569 contracts to their short side.

Managed money ( a subset of large/small specs) generally referred to as hedge funds:

In gold; the hedge funds increased their managed money accts by 9080 contracts on the long side

and decreased by 741 contracts from their short side.


commercials go net short by 5710 contracts which is bearish. The managed money (hedge funds) go net long by over 9100 contracts. They seem to remain resolute to what the commercials throw at them.



Silver COT Report: Futures
Large Speculators Commercial
Long Short Spreading Long Short
100,337 21,225 17,362 48,468 142,202
-2,338 1,428 4,444 1,721 -2,544
98 41 46 28 36
Small Speculators Open Interest Total
Long Short 190,819 Long Short
24,652 10,030 166,167 180,789
56 555 3,883 3,827 3,328
non reportable positions Positions as of: 146 109
Tuesday, March 21, 2017

 And now the important COT report on silver and incorporating data form this morning’s Ted Butler commentary:

Our large specs:

Those large specs who have been long in silver pitched 2338 contracts from their long side.

those large specs that have been short in silver added 1428 contracts to their short side.


Our commercials:

those commercials that have been long in silver added 1721 contracts to their long side !!!!!

those commercials that have been short in silver pitched a huge 2544 contracts from their short side

wow!! commercials are capitulating!

Our small specs:

those small specs that have been long in silver added only 56 contracts to their long side

those small specs that have been short in silver added a tiny 555 contracts to their short side.

Managed money (hedge funds)


In Ted Butler’s paper released this morning  (above) the managed money account which is a subset of the large/small specs had an open interest of 80,582 contracts at last weeks report


This week we saw a loss of only 1668 contracts from their long side and an increase of 1063 contracts from their short side for a net short position gain of 2731 contracts.

This subset is remaining very resolute and refusing to budge on commercial raids.


commercials go net long 4265 contracts!!! and they also seem to be capitulating!











And now the Gold inventory at the GLD

March 24/another withdrawal of 1.78 tonnes from the GLD/Inventory rests at 832.62 tonnes

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 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

March 23 /2017/ Inventory rests tonight at 832.62 tonnes


Now the SLV Inventory
March 24/no change in inventory at the SLV/Inventory rests at 332.504 million oz/
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 24.2017: Inventory 332.504  million oz

NPV for Sprott and Central Fund of Canada

will update later tonight the central fund of Canada figures

1. Central Fund of Canada: traded at Negative 5.1 percent to NAV usa funds and Negative 5.3% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.9%
Percentage of fund in silver:38.9%
cash .+0.2%( Mar 24/2017) 
2. Sprott silver fund (PSLV): Premium FALLS  to -16%!!!! NAV (Mar 24/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to + 0.48% to NAV  ( Mar 24/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -16% /Sprott physical gold trust is back into POSITIVE territory at +0.48%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

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

(courtesy Sprott/GATA)

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


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

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

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

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

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

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

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

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

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

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

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

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


Major gold/silver trading/commentaries for FRIDAY


Gold ETFs or Physical Gold? Hidden Dangers In GLD

By Mark O’Byrne March 24, 2017

by Olivier Garret on Forbes

Gold ETFs are rising in popularity due to their convenience. They’re easy to trade, there’s no need to store anything, and no one is going to break into your house to steal your GLD shares.

But there are a lot of hidden dangers inherent in the structure and operation of gold ETFs that few investors are aware of—and these risks are more pronounced than ever, as the threat of another financial crisis is always around the corner.

Considering the public’s waning trust in the banking system, many investors find themselves wondering how GLD stacks up to owning the real thing. When you look at both assets more closely, it’s clear that gold ETFs and gold bullion are very different investments.

Why GLD Is Not the Same as Gold

SPDR Gold Trust (GLD), the largest, most popular gold ETF, is an investment fund that holds physical gold to back its shares. The share price tracks the price of gold, and it trades like a stock, but the vast majority of investors don’t have a claim on the underlying gold.

The reason for this is that you can only request physical delivery of metal if you own a minimum of 100,000 GLD shares (most investors don’t: at $1,000 gold, 100,000 shares is more than a million dollars). Even if you do own enough shares, the GLD ETF reserves the right to settle your delivery request in cash.

So why is GLD appealing to investors if you never actually own any gold?

For one, the fund is both convenient and low cost. If you’re looking for an inexpensive way to invest in the direction of the gold price, GLD is ideal.

The other advantage is you can employ leverage with options, which can be risky, but it’s something you can’t do with gold bullion. If you’re an investor who doesn’t plan to take delivery and you’re comfortable with a higher degree of risk, GLD can be a good way to gain exposure to the price of gold.

Counterparty Risk on All Levels

While gold ETFs can be a fine investment, they come with a lot of counterparty risk inherent in their chain of custody. And this risk will only grow commensurately with systemic uncertainties.

Think about it: If you own GLD, you must rely on a counterparty to make good on your investment. If the fund’s management, structure, chain of custody, operational integrity, regulatory oversight, or delivery protocols break down, your investment is at risk.

It all raises too many questions. Can you be sure the bank doesn’t front-run its customers? How safe are the fund’s holdings? Is the fund protected by adequate insurance? Is the custodian bank trustworthy enough to safeguard the gold?

The best reason to own gold is as a hedge against risk. It can be your last line of defense in an economic crisis—a form of wealth insurance, if you will. But since gold ETFs are part of the very banking system you need protection from, you must ask yourself if they serve one of the primary purposes for owning gold.

In a period of financial crisis, the risks inherent in holding GLD would only rise. In fact, the frequency and severity of counterparty risks with gold ETFs are already rising.

When you consider how these ETFs function, the problem of counterparties quickly becomes apparent:

The Custodian

When you invest in GLD, you buy shares through an Authorized Participant, which is usually a large financial institution responsible for obtaining the underlying assets necessary to create ETF shares.

When it does so, it is buying shares in the fund’s trustee, the SPDR Gold Trust. The trustee then uses a custodian (HSBC) to source and store the gold for it.

Trust in the custodian is paramount: If you’re buying gold as a hedge against a failure in the financial system, you must be confident that the custodian would not be impaired if a crisis were to happen.

As HSBC is one of the world’s largest banks, you simply don’t have that assurance. If there’s a systemic disruption, your GLD shares would likely be negatively affected.

The Sub-Custodian

Custodians like HSBC can use sub-custodians, such as another bank, to source and store gold. So in addition to the risk you assume with the fund’s primary custodian, you’re now exposed to even more risk because it has added another counterparty.

The Trustee

There are no written contractual agreements between sub- custodians and the trustees or the custodians, which means if a sub-custodian drops the ball, the ability of the trustee or the custodian to take legal action is limited.

This leaves the trustee on the hook for any negligence. But trustees don’t insure the gold for gross negligence; they leave that to the custodian, who secures limited general insurance coverage for the contents of the vaults. The value of the gold in the vaults is likely to be much greater than this limited policy would cover.

What this all boils down to is that if anything happens to any of the counterparties, you’re the one who loses. And you have zero recourse.

Full article on Forbes gold-hidden-dangers-gld/



An extremely important paper from Ted Butler.  You will note that I have been providing the managed money account for you on COT days.  Basically Ted is stating that the non technical hedge funds have been accumulating silver and these guys do not budge on raid days.  The long positions on these guys have been rising to around 80,000 contracts and this is coupled with small specs or non hedge funds who have accumulated another 30,000 contracts.  Ted states that the 7 banks that hold 98,000 short positions are “dead men walking

(courtesy Ted Butler)

Dead Men Walking?

Theodore Butler


March 23, 2017 – 10:48am

The narrative thus far – after decades of allowing themselves to be led in and out of COMEX silver futures contracts by their commercial counterparties, several managed money traders appear to have woken up to the fact they’ve been duped all along. A key component of the silver manipulation for the past 30 years has been the knee-jerk and mechanical reaction of the managed money traders to collectively sell whenever the commercials rigged prices lower beyond certain moving averages. Ditto for buying on rising prices.

The dependability of the managed money technical funds (Harvey: managed money = hedge funds) to obey commercially rigged price signals made the funds the true enablers of the manipulation. The commercials, mostly domestic and foreign banks, made their profits by getting the technical funds to buy high and sell low. Without the technical funds to maneuver at will, the commercials would have little reason to prolong the silver manipulation.

So obvious had become the continued whipsawing of the managed money traders by the commercials that a near-universal question emerged – “why are these technical funds engaging it such a bizarre and harmful (to their investors) game?” I’ve heard from more than one reader that there must be some kind of collusion between the technical funds and the commercials, featuring under the table payments to the technical funds by the commercials to continue deliberately losing. While I understand and empathize with the logic of such an explanation, given the nearly inexplicable behavior of the technical funds, I don’t see such collusion, as I’ve tried to explain over the years. I certainly see collusion, just not on the part of managed money traders to deliberately lose. (Harvey:  he is wrong)

Nowhere is the price influence of the continuing contest between the managed money traders and the commercials more pronounced than it is in COMEX silver. That’s what led me to conclude the price of silver was manipulated more than 30 years ago. And while it is now true that this same price influence has come to infect just about all our markets, silver still maintains a unique role as being the most manipulated market of all. Not just because it was the first such market to be manipulated by futures positioning, but that has something to do with it. Being first means that silver has been manipulated in this manner for far longer than any other market and, as such, its price is necessarily more artificial. More to the point is that the objective relative measures involving actual production and consumption and real world supplies always feature silver at a much different level than any other commodity.

So extreme has become the size of the derivatives trade in silver compared to actual metal in the world and the fact that it has lasted so long (decades) that perhaps it’s no great surprise that, if the managed money traders were ever going to wake up to the realization they were being gamed; then they would likely first see it in silver. Should the managed money traders come to such a realization and radically alter their behavior, then there should be strong signs indicating such a change. Those strong signs abound and have been discussed on these pages.

First came the start of a buildup in core non-technical fund managed money long positions in COMEX silver, starting around three years ago. I define these positions as not being governed by price change, meaning such longs are not sold on price selloffs and, therefore, are not technical in nature. In simple terms, the core long position is the amount of long positions remaining after significant price declines.   (Harvey:  call these strong longs that refuse to budge not matter what criminal activity the banks throw at them) From the time the COT data started tracking managed money traders around 2009 until the fall of 2013, the long position of managed money traders in COMEX silver rarely fell below the 20,000 contract level at the depths of price declines. Again, what’s remaining long in the managed money category at the end of significant silver price declines is the core non-technical fund long position.

But starting in 2014, the core non-technical fund managed money long position began a years-long climb, first to 30,000 contracts, then 40,000 and finally this past December to nearly 60,000 contracts (56,000 contracts on Dec 6). This meant many more managed money longs remained long after selloffs. Then, on the $3 rally early this year, some 40,000 new managed money longs were added, as technical funds joined with their non-technical fund fellow managed money traders on the long side of COMEX silver futures, creating a combined managed money long position of 96,000 contracts on Feb 28. Part of me wants to apologize for throwing so many numbers at you, but I’m talking about the only numbers that matter. Every 10,000 contracts of COMEX silver is equal to 50 million oz of metal, so I am talking about the many hundreds of millions of oz that is setting the price of silver, so please bear with me (but certainly feel free to question me about any of this).

On the sharp $1.50 selloff thru the last COT report, some 16,000 managed money long positions were sold (presumably by technical funds), leaving over 80,000 contracts long in the managed money category. Prices moved higher since then, so there is little reason to suspect that the long position is lower as of yesterday’s cutoff date. If silver prices don’t get pushed below the recent lows ($16.75), then by my definition, the core non-technical fund long position in COMEX silver appears to be 80,000 contracts or 400 million oz, until proven otherwise. That is four times the 20,000 contract (100 million oz) core long position that existed prior to late 2013.

Not only is this a shocking and monumental increase in core long positions, I must remind you that it is unique to COMEX silver and this pattern of an exploding core non-technical managed money long position exists in no other market, gold included. Moreover, the stunning size of the core managed money long position in silver is also accompanied by at least another 30,000 contract core non-technical fund long position held by traders not in the managed money category. The bottom line, as I’ve indicated recently, is that there exists at least 110,000 contracts (550 million oz) of a core paper long position in COMEX silver futures not likely to be sold should silver prices get rigged lower.

Also as I’ve indicated previously, if this core long position is not about to be sold to the downside (as I believe), then it will only be sold to the upside. So here we have 550 million oz of paper silver held by a fairly diverse number of traders seemingly intent on holding until they can sell at what they conclude is a sufficiently high enough price. Because this huge core long silver position is held in paper contract or derivative form, there must be an equally huge corresponding short position. Thanks to exquisitely detailed government data (in the form of COT and Bank Participation Reports), we can pinpoint the huge short position in COMEX silver with even greater precision than the long side. That’s because, as large as the short position is in COMEX silver, it is held by far fewer traders than exist on the long side. Because the traders which hold the huge short position in COMEX silver are so very few in number, serious issues related to market concentration, position limits and collusion are raised, none of which I’ll go into today.

This issue today is that the core long position in COMEX silver is held by a diverse number of traders (into the hundreds), while nearly all of the short position is held by just 8 big commercial shorts. In last week’s COT report, these eight large traders held, essentially, the entire 98,000 contract (490 million oz) total commercial net short position. One of those 8 traders, JPMorgan, held around 27,000 contracts short, leaving the remaining 7 traders net short more than 70,000 contracts (350 million oz).

For the sake of brevity, let me quickly conclude that because the crooks and scoundrels at JPMorgan saw the need and wisdom to accumulate the many hundreds of millions of ounces of physical silver that they did acquire over the past six years, JPMorgan must be removed from any calculation of loss due to higher silver prices. The problem is that none of the crooks and scoundrels at the seven remaining big commercial shorts can be removed from such calculations because none bought actual silver. As such, I can’t help but think of these 7 big COMEX shorts as dead men walking – their financial fates sealed and with only the timing to be determined.

There are several forces that seal the fate of the seven big COMEX silver shorts. One, the unquestioned and documented buildup of core long positions, not about to be resolved by lower prices. Two, JPMorgan exiting the dead man fold, by virtue of snatching up every available ounce of actual silver for six years. Three, the growing awareness of the big seven’s predicament, including lawsuits hitting closer to home. Incredibly, these are self-reinforcing factors. For example, sensing the fate of the doomed 7 could and should have encouraged ever larger managed money core long positions.

Further, we know that the 7 big COMEX silver shorts are mostly foreign banks, speculating their butts off on the short side of silver and are not, repeat not, legitimately hedging in any way, just taking the other side of a speculative derivatives bet. Because there is no legitimate basis for why a Bank of Nova Scotia, for instance, would maintain a massive short position in COMEX silver, then, by definition, the basis for being short must be illegitimate. There is no way anyone could construct a legitimate economic motive behind the 7 big shorts’ massive and concentrated short position in COMEX silver; otherwise I would have heard it long ago. And not for a moment am I exempting JPMorgan in the legitimacy department, just in the 7 dead men’s fate.

What makes the 7 big traders dead men walking is that they can no longer resolve their fate profitably. It took years to create this very unique situation, but basically, they are trapped. There are only two ways for any short to get covered – by actual delivery or by buying back the short position. How the heck are the 7 big COMEX silver shorts going to secure 350 million ounces of physical silver in a hurry , with which to deliver against and close out their huge short position, when JPM has put a strangle hold on physical silver? Look at the current March silver delivery process – JPM has taken nearly all of the 15 million oz delivered this month. Any attempt by the big 7 to buy physical silver in any reasonable quantity would send the price soaring and financially cripple these traders.

Likewise, any attempt to buy back big quantities of COMEX paper futures contracts would also send prices soaring for the simple reason the big 7 (along with JPM) have been the sole sellers up until now. How can the former big short sellers simply turn around and begin to buy in earnest without causing prices to explode? In simple terms, they can’t. Sure, they can buy on lower prices as long as the core longs are willing to sell, but that’s the whole point – the evidence strongly suggests the core longs won’t sell on lower prices. This is what’s known as being between a rock and a hard place.

Of course, I can’t give you the exact timeline and sequence of events and if I tried to, you should reject that. No one can see the future with such clarity. I can’t tell you if the crooks at JPMorgan might not still continue to aid the 7 soon to be dead men by adding shorts for a while longer, but I don’t see JPMorgan bailing them out completely by donating the bank’s acquired physical silver of six years at low prices. My firm sense about JPMorgan and how they behave typically is that they would sooner rip your lungs out than look at you if there was a decent buck in it for them. Even if JPMorgan temporarily prolongs the silver manipulation, as they are certainly capable of doing that will only offer a brief stay of execution for the 7 walking dead.

What I can tell you is that when the time is up for the walking dead, it will be a time like no other in the history of silver. Prices can and will continue to muddle along as long as the 7 big shorts and JPMorgan continue to cap price rallies, but the moment the capping ends – either at the hands of JPM or the walking dead – the silver price landscape will be changed forever. None of us – myself included – will be able to fully comprehend the upcoming shock to the upside. This has little to do with price per se, just the mechanics of the market; but it will be seen most vividly in price. When the big shorts start to buy back their shorts to the upside, the world of silver will have changed.

Ted Butler

March 23, 2017

For subscription information please go to



A good look at mining in South Africa.  At one time, South Africa produced over 1000 tonnes of gold, and that was about 90% of world production at that time

(courtesy Bloomberg/GATA)

Reviving South Africa’s gold industry means getting mine workers off their knees


By Kevin Crowley
Bloomberg News
Thursday, March 23, 2017

During his early years as a miner in South Africa, Joas Mahanuque spent six hours a day on his knees drilling for Impala Platinum Holdings Ltd. The dust-filled tunnels half a mile underground were too low for him to stand, and temperatures reached 105 degrees Fahrenheit (40 degrees Celsius).

Today he has essentially the same job 2.5 kilometers (1.5 miles) beneath the surface for Gold Fields Ltd. But unlike most of the precious-metals miners in the country, Mahanuque sits comfortably atop a new 7-ton vehicle, using a joystick to control an 8-foot drill as ventilated air blows behind him. …

If only it was that easy for the rest of the once dominant South African gold industry. After more than a century as the world’s top producer, the country has slipped to No. 7 over the past decade. Mines are deep, labor intensive and are being developed with mostly drill-and-blast methods little changed since the 1950s, which means costs have soared and output has dropped. …

… For the remainder of the report:…


India last month received 37.2 tonnes from Switzerland in February which is terrific as India is now back into gold.  If we extrapolate 37.2 tonnes x 12, India’s demand from Switzerland will exceed 446.4 tonnes.  Switzerland is not the only source for India.

(courtesy Lawrie Williams/Sharp Pixley)


LAWRIE WILLIAMS: Swiss gold exports to India top the table in February

Gold exports from Switzerland are an excellent indicator of the strength of the gold flows from the West to the East and while the February overall figure was a low 88.7 tonnes, compared with total imports of 139 tonnes, the make-up of these totals in itself tells an interesting story.

The top recipient of Swiss gold exports in February was India – comfortably – with 37.2 tonnes confirming the reported pick-up in Indian gold demand so far this year as the populace got to grips with the withdrawal from circulation of Rupee 1,000 and 500 notes.  India is very much a cash society and much of the gold buying pressures comes from individuals making small cash purchases when their financial situation makes this possible – and last year’s monsoon rains, and subsequent harvest, were good increasing gold demand from the enormous subsistence agricultural sector – which traditionally forms a very significant part of gold demand in the subcontinent.

And then the next biggest recipient of Swiss gold last month was mainland China with direct imports of 21.5 tonnes, dwarfing the 7.2 tonnes to Hong Kong. (Indeed Hong Kong was a substantial net exporter of gold back to Switzerland – more of which later).  The direct flow of gold into mainland China again confirms that Hong Kong gold imports can very definitely no longer be considered a proxy for Chinese imports, nor flows from Hong Kong to the mainland be taken as anything more than an ever-decreasing indicator of overall Chinese gold consumption as more and more gold is taking the direct route. (See article: China 154, Hong Kong 39. Swiss Dec gold exports show remarkable gold flows which highlighted this situation with respect to a huge December figure for gold exports from Switzerland direct to mainland China).

A bar chart showing the breakdown of Swiss gold exports on a country-by country basis is shown below courtesy of Nick Laird’s website:

The Swiss gold imports are interesting too in that although the UK is again the largest source of imported gold, accounting for a little over 30 tonnes, the second and third largest sources were Hong Kong (26.5 tonnes) and the United Arab Emirates (UAE) with 16.4 tonnes.  Thailand also accounted for 9 tonnes of Swiss gold imports.  All three of these are traditional gold consuming nations so the fact that Switzerland is importing gold from them suggests, perhaps, light demand and destocking by traders, perhaps coupled with some scrap.  The higher gold price prevailing in February may also have stimulated some of these reverse flows.  See chart below – again courtesy of

Most of the other sources of the Swiss gold imports are gold producing nations like the USA, Ghana, Burkina Faso, Argentina, Peru, Russia and South Africa, although one should perhaps see Germany and Italy as somewhat anomalous, although both were actually net importers of Swiss gold in February.

Switzerland is very much a conduit for gold flows from West to East, largely because of it being the location for four of the world’s largest independent gold refineries.  (Swiss refineries are reported by to account for 65-70% of world refined gold output).  These refineries specialise in re-refining .995 London good delivery gold bars in 350-430 troy ounce sizes, and refining gold scrap, and producing the higher .999 purity and much smaller gold bars and wafers in demand in the East, as well as producing high purity gold coins for some nations.  Upwards of 1,600 tonnes a year of gold passes through these Swiss refineries, which is around half global gold production.  Indeed in 2013, when Chinese demand was booming and there were big liquidations out of the gold ETFs, it is reported that Swiss gold exports exceeded 2,500 tonnes (equivalent to nearly 80% of global new mined gold output that year).

So the importance of the Swiss gold import and export figures cannot be emphasised enough in terms of global gold flows and where they are coming from and going to.  In the latest month’s figures almost 85% of the Swiss gold exports were headed for Asia.  The West to East gold flows continue unabated.

23 Mar 2017


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


1 Chinese yuan vs USA dollar/yuan SLIGHTLY STRONGER AT  6.8862(  SMALL REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES WEAKER TO ONSHORE AT   6.8741/ Shanghai bourse UP 20.85 POINTS OR .64%   / HANG SANG CLOSED UP 30.57 POINTS OR 0.13% 

2. Nikkei closed UP 177.22 POINTS OR 0.93%   /USA: YEN RISES TO 111.02

3. Europe stocks opened ALL IN THE RED      ( /USA dollar index FALLS TO  99.69/Euro UP to 1.0802


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  47.93 and Brent: 50.83

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.412%/Italian 10 yr bond yield UP  to 2.255%    

3j Greek 10 year bond yield FALLS to  : 7.389%   

3k Gold at $1245.70/silver $17.62(8:15 am est)   SILVER  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 11/100 in  roubles/dollar) 57.24-

3m oil into the 47 dollar handle for WTI and 50 handle for Brent/

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


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9920 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0715 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +.412%

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 2.421% early this morning. Thirty year rate  at 3.032% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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


All Eyes On Washington: US Futures Rise On Hope Healthcare Vote Will Pass

Asian shares and S&P futures rose on optimism that today’s rescheduled U.S. vote on health care will pass following Trump’s Ultimatum to the Freedom Caucus. European stocks gave up some of Thursday’s gains, falling for the fourth time in five days, and moving further away from a 15-month high reached a week ago while the yen weakened for the first time in nine days before the long awaited U.S. health-care vote that has dominated market sentiment this week. Oil was headed for a third weekly drop this month. Economic data include durable goods orders, Markit U.S. manufacturing PMI. Companies due to report earnings include Finish Line.

As Reuters notes, all eyes in global financial markets were fixed on stuttering Republican efforts to pass a replacement for Obamacare on Friday, with failure likely to undermine faith in Donald Trump’s promise to deliver a “phenomenal” U.S. tax reform. The White House’s ability to get legislation through Congress is crucial to “Trumpflation” bets on fiscal stimulus, tax cuts and capital repatriation that markets late last year assumed would drive inflation and growth higher. Below are the latest developments on the House vote on American Health Care Act, aka Trumpcare.

  • The House delayed the vote on the AHCA bill amid doubts whether it could pass, with House GOP leaders later confirming the vote is to occur on Friday afternoon.
  • President Trump reportedly warned House Republicans he would leave Obamacare in place and will move onto tax reform if the healthcare bill fails in today’s vote.
  • US Freedom Caucus Chairman Meadows said the Freedom Caucus is to meet and discuss the revised health bill and that the bill has improved. Meadows also stated that he is a ‘no’ right now, but has not made the final decision.
  • Congressional Budget Office released its scoring on the amended GOP healthcare bill which showed smaller savings over the next decade with the projected deficit reduction declining to USD 150bIn from USD 337b1n, while it maintained guidance that 14mln will lose coverage by 2018.

“No one has any idea what’s going to happen with this vote so they are sitting there waiting for actual information rather than theory,” said Ben Kumar, a London-based investment manager at Seven Investment Management, which oversees about 10 billion pounds ($12 billion). “In general you can ignore the politics and trade on the underlying fundamentals. The market is still fundamentally intact.”

“There is still a risk that the vote fails today, (and) there are numerous other uncertainties that suggest anything but a smooth course ahead for implementing the much anticipated tax reform reflation program,” said MUFG currency strategist Derek Halpenny, in London. “We still expect a much smaller tax cutting program simply due to the inability to agree on how a large program could be financed. The Trump reflation trade could still reverse course in a more meaningful way, resulting in dollar weakness.”

In Europe, the STOXX 600 Index dropped 0.5%, extending its weekly decline, with insurers and energy companies the biggest losers, as trading volumes dropped by almost a third from the previous week. The drop comes despite stronger than expected PMIs across the board for both Germany and France.

  • France Manufacturing PMI, actual 53.4, est. 52.4, prior 52.2
  • France Services PMI, actual 58.5, est. 56.1, prior 56.4
  • Markit France Composite PMI, actual 57.6, est. 55.8, prior 55.9
  • Germany Manufacturing PMI, actual 58.3, est. 56.5, prior 56.8
  • Germany Services PMI, actual 55.6, est. 54.5, prior 54.4
  • Germany Composite PMI, actual 57, est. 56, prior 56.1

The yen halted its longest rally since 2011 as U.S. lawmakers hurtled toward a vote on an amended health-care bill after a delay that fueled speculation President Donald Trump may struggle with other policies. Bonds were mixed, and oil rose for the first time this week even as a rotation out of growth sectors into safe utilities continued.

The Stoxx Europe 600 Index was down 0.5 percent as of 6:34 a.m., trimming the previous day’s brisk gains. Aegon NV weighed down insurers after it cut its Solvency II ratio. Japan’s Topix trimmed some losses for a week that included the biggest one-day drop since Trump’s election. The index finished with a 1.4 percent decline for the week. The MSCI Asia Pacific fared better, with a 0.1 percent decrease. Futures on the S&P 500 climbed 0.1 percent. The index fell 0.1 percent on Thursday.

The dollar recovered some ground against the yen, however, after U.S. Treasury yields inched higher in Asian time, halting an eight-day losing streak that is its worst since the end of 2010.

Bank of Japan Governor Haruhiko Kuroda told a Reuters event on Friday that there was “no reason” to raise the bank’s bond yield targets now with inflation so far from its 2 percent target.

A sell-off in a number of commodities markets has also been a factor in the weakness of share prices this week. Iron ore prices fell for a fourth day on Friday and are on course for their worst week since December. Crude inched higher, supported by a fall in Saudi exports to the United States, but remained under pressure from a glut of supply that OPEC curbs has broadly failed to stem. Thomson Reuters data shows OPEC shipments to Asia, the world’s biggest and fastest-growing oil-consuming region, are up more than 5 percent since January, suggesting the group of producers is shielding its main customers from the reductions. Unless OPEC extends the curbs beyond June or makes bigger cuts, traders say oil prices are at risk of falling further.

“OPEC’s goal of drawing down inventories to normal levels is not going to be reached before their agreement expires on June 30,” said U.S. investment bank Jefferies in a note to clients.

Leaders from European Union countries except the U.K. meet Saturday on the 60th anniversary of the bloc’s founding Treaty of Rome to discuss the way forward after Brexit. Meanwhile, representatives from five OPEC and non-OPEC members gather for a meeting of the Joint Ministerial Monitoring Committee to oversee oil production cuts.

* * *

Bulletin Headline Summary from RanSquawk

  • Stocks reside modestly negative in Europe as participants await news regarding the litmus test of Trump’s power in the form of his healthcare bill
  • EUR gains with Europe encouraged by strong PM! surveys
  • Today’s highlights include Eurozone and US manufacturing and services PMIs, US Durable Goods Orders and comments from Fed’s Evans, Williams, Bullard and Dudley

House vote on American Health Care Act

Market Snapshot

  • S&P 500 futures up 0.1% to 2,341.75
  • STOXX Europe 600 down 0.5% to 375.7
  • MXAP up 0.4% to 148.01
  • MXAPJ up 0.08% to 478.73
  • Nikkei up 0.9% to 19,262.53
  • Topix up 0.9% to 1,543.92
  • Hang Seng Index up 0.1% to 24,358.27
  • Shanghai Composite up 0.6% to 3,269.45
  • Sensex up 0.5% to 29,488.44
  • Australia S&P/ASX 200 up 0.8% to 5,753.55
  • Kospi down 0.2% to 2,168.95
  • German 10Y yield rose 1.0 bps to 0.441%
  • Euro up 0.1% to 1.0798 per US$
  • Brent Futures up 0.3% to $50.69/bbl
  • Italian 10Y yield rose 0.9 bps to 2.272%
  • Spanish 10Y yield rose 2.2 bps to 1.753%
  • Brent Futures up 0.3% to $50.69/bbl
  • Gold spot down 0.2% to $1,242.62
  • U.S. Dollar Index down 0.1% to 99.71

Top Overnight News via BBG

  • Trump Dares GOP Into High-Stakes Vote on Troubled Health Bill
  • Uber Rival Grab Said Raising $1.5 Billion in New Funding Round
  • EU’s Juncker Says U.K.’s Brexit Bill Will Be Around $62 Billion
  • Bayer Says Not Aware of Rejection of Monsanto Deal From India
  • Monsanto Roundup Users to Question Ex-EPA Manager in Cancer Suit
  • U.S. Equities See Biggest Outflows Since Brexit Vote: BofAML
  • Watchmakers Like Mondaine Confront U.S. ‘Consumer Blockage’
  • Euro-Area Economic Momentum Bodes Well for Wage Growth and Jobs
  • Fed’s Kaplan Says MBS and Treasuries Should Both Be Rolled Off
  • U.S. Biodiesel Producers File Trade Case Against Argentina
  • Atanor Said to Sell Second Sugar Mill to Argentine Grocery Mogul
  • Indonesian Govt Sees ‘Good Progress’ in Talks With Freeport

* * *

Asian markets trade mostly higher in the last day of the week as local stocks shrugged off a cautious tone on Wall Street where a delay in the healthcare bill vote dampened sentiment. ASX 200 (+0.8%) was led by the Healthcare and Financial sectors, while Nikkei 225 (+0.9%) benefited as USD/JPY recovered some ground. Elsewhere, Hang Seng (-0.1%) and Shanghai Comp. (+0.2%) traded choppy as participants digested earnings including CNOOC which posted its worst results in 5 years, while the PBoC also refrained from open market operations and stated that liquidity in China’s banking system is relatively high. Finally, 10yr JGBs were lower amid the increased risk appetite in Japan and after the latest weekly securities transactions data showed foreign investors upped their selling of Japanese bonds, while underperformance in the curve was seen in the belly.

Top Asian News

  • BOJ Sells Bonds With Repurchase Agreements First Time Since 2008
  • Kuroda Sees No Problems for BOJ Bond Purchases in the Future
  • Huishan Dairy, Muddy Waters Target, Sinks 85% in Hong Kong
  • Two-and-20 Era Cedes Way to No Fees Upfront as Hedge Funds Adapt
  • Carlyle, Tiger Global Buy Stake in Delhivery for More Than $100m
  • Nippon Yusen Cancels 2 Boeing 747 Airplane Orders
  • Japan’s JR East Pitches Minimal Delays to Win U.K. Rail Bid
  • Iron’s Rally Gives Way to Rout as China Futures Post Record Loss

Europe’s final session of the week kicked off with major bourses trading in the red, albeit modestly so, with risk mood steady as the US healthcare vote moved to late Friday. Newsflow throughout the European morning has been light, with energy names leading the way lower, while the material sector outperforms. In credit markets, price action is rather muted with the next focal point for the market being next week’s approach to quarter end, particularly given the recent squeeze in repos over year-end. Consequently, it is likely that positioning will take place ahead of this event.

Top European News

  • Credit Suisse Increases Bonuses; Bank Said to Weigh Stock Sale
  • Deutsche Bank Commits to London With New U.K. Headquarters
  • German Output Growth Accelerates as Costs, Employment Spike
  • French Companies Bet on Favorable Post-Election Business Outlook
  • Fillon Accuses French President of Plot to Destroy His Candidacy
  • U.K. Police Make Two More Arrests in London Terror Attack Probe
  • End of Winter Pushes U.K. Natural Gas to Longest Slide in Decade
  • Eni Becomes First Oil Major to Find Crude in Mexico Waters
  • Schaeuble: Greece Can Only Stay in Euro If It Undertakes Reforms
  • Nordea Cuts Correspondent Banking in Half as High Risk Area
  • Biotest to Seek New Partner for Drug Rejected by ImmunoGen

Currency markets have been relatively subdued this morning, with traders looking for drivers given we must now wait until the end of Friday for the vote on healthcare in the US. This is set to resume just after the London close, so the JPY pairs in particular look set for some range bound trade ahead. USD/JPY continues to hold above 111.00, but is struggling for traction on the upside, despite US Treasury yields rising 3-4bps in the belly of the curve. EU PMIs came in strong this morning, and although much of this was to be assumed given the weakness of the EUR of late, traders bought the spot rate back up to 1.0800 in an isolated move, with USD/CHF moving the other way to suggest a USD based move. EUR/CHF was camped in the low 1.0700’s, though we did see some modest upside in EUR/GBP, which is back around the 0.8650 level. Cable is still struggling with selling interest through the 1.2500 mark, so the EUR/GBP reaction is partially a result of this, with next week’s triggering of Article 50 likely to limit the upside, but dip buying notable here in the wake of yesterday’s much stronger than expected retail sales release. Indeed at time of writing, the spot rate is still pushing for 1.2500+. but resistance ahead of 1.2600 is very strong.

Commodities traders will be looking to tonight’s vote on healthcare in the US as a measure of how president Trump’s spending plans will fare through Congress going forward. We see few material moves of note other than palladium, which has extended to near 2 year highs. Gold has come back in line with the USD, but is pushing higher —modestly — as the greenback trickles back, but US Treasuries seeing little movement against this. Interesting news for Copper as the strikes in the Escondida mine look to end of 43 day run of inactivity. This looks to be a temporary measure though as workers agree to extend current contracts. WTI is still struggling below the USD50.00 mark, with all eyes and ears on the OPEC meeting towards the end of May to see whether the production cut agreement can be extended.

Looking at the day ahead, in the US the main focus is likely to be on the February flash durable and capital goods orders data where market expectations is for a +1.3% mom rise in headline durable goods orders and +0.5% mom rise in core capex orders. The flash PMI’s will also be out in the US this afternoon. Away from the data there is plenty of Fedspeak with the Fed’s Evans (12pm GMT), Bullard (1.05pm GMT), Dudley (2pm GMT) and Williams (5.30pm GMT) scattered throughout the day.  Of course the main focus will be on the healthcare bill developments.

US Event Calendar

  • 8:30am: Durable Goods Orders, est. 1.3%, prior 2.0%;
  • Durables Ex Transportation, est. 0.6%, prior 0.0%;
  • Cap Goods Orders Nondef Ex Air, est. 0.5%, prior -0.1%
  • 9:45am: Markit US Manufacturing PMI, est. 54.8, prior 54.2
  • US Services PMI, est. 54, prior 53.8
  • US Composite PMI, prior 54.1
  • 10am: Revisions: Wholesale sales and inventories

Central Banks

  • 8am: Fed’s Evans Speaks at Community Development Event
  • 9:05am: Fed’s Bullard to Speak to Economic Club of Memphis
  • 10am: Fed’s Dudley Speaks in New York at York College
  • 1:30pm: Fed’s Williams Speaks in Q&A

* * *

DB’s Jim Reid concludes the overnight wrap

So it turns out we’ll have to wait a little bit longer for our first glimpse at how successful Mr Trump’s legislative agenda might be. The breaking news yesterday was that House GOP leaders postponed Thursday’s planned vote on the Obamacare replacement bill. Following a behind closed doors meeting late last night between Republican lawmakers the White House said that a vote is planning to go ahead this afternoon in Washington although there is still no suggestion that Trump has garnered sufficient support at this stage following the discussions last night. Indeed the most significant comment that we’ve heard came from Republican representative Chris Collins who confirmed that there will
be “no more negotiations” and that “if it loses, we just move on to tax reform”. In other words, it sounds like Trump has issued his final ultimatum.

According to various news reports centrist Republicans were said to have balked at proposed changes to the minimum insurance benefits which had been negotiated between the President and Freedom Caucus. At the same time the Freedom Caucus are also said to still be unhappy about some of the finer details. In another twist, the Congressional Budget Office announced last night that the latest version of the AHCA (as of March 22nd) is estimated to result in a reduction in the deficit of $150bn over the next 10 years which compares to the $337bn reduction in the original version. The plan is also estimated to still result in 24 million more people being uninsured in 2026. The scope of any last minute changes is clearly not reflected in these figures but nonetheless, it’s hard to see the results as boosting the GOP’s cause at what is clearly a very tense time for negotiations.

While the announcement of a delay to the vote caused a little bit of retracing for risk yesterday, the actual magnitude of the moves wasn’t particularly eye catching. The S&P 500 finished -0.11% with healthcare stocks underperforming after the index traded as high as +0.44% in the early going while the Dow closed -0.02% having also been up a similar amount. There’s no doubt that the intraday ranges have been a lot more exciting over the last few days however.

The average of the last 3 days has been a 1.03% swing in the high to low points which compares to an average of just 0.53% for the rest of the year to date. Meanwhile credit retraced just less than 1bp of the move tighter yesterday while Treasuries and the Greenback were actually fairly unperturbed. The 10y finished at 2.419% which was +1.4bps on the day while the intraday range was 5bps. The US Dollar index closed +0.08% although didn’t really budge much in and around the headlines. The VIX did however finish nearly 8% up from the day’s lows, closing at 13.12 and with that, closing at the highest level this year. In commodities Gold faded to end the day down -0.29% while WTI Oil finished below $48/bbl again after dipping -0.71%.

Before we look at how the Asia session has followed up, it’s worth noting that as well as the obvious focus on the healthcare bill developments, or lack thereof, the release of the global flash March PMI’s today should make for a bit of a welcome distraction. In Europe the consensus is for a modest tick lower in the composite Euro area reading to 55.8, albeit a level which would still suggest a possible uplift in growth from recent levels. In the US the consensus is for a lift in both the services (to 54.0 from 53.8) and manufacturing (54.8 from 54.2) readings. So keep an eye on those later today.

To Asia now then where for the most part it’s been a fairly mixed session again, although there are no obvious signs of concern ahead of the health bill vote later today. While there are decent gains for the Nikkei (+0.99%) and ASX (+0.99%), the Shanghai Comp and Kospi are both little changed while the Kospi (-0.32%) is down slightly. US equity index futures are a touch higher while Treasuries have weakened a bit further following comments from the Fed’s Kaplan who said that 3 hikes this year remains a “reasonable” baseline. Kaplan also said that the Fed should begin to roll off both mortgage backed securities and Treasury holdings when it begins the process of letting its balance sheet shrink.

Moving on. While markets were unsurprisingly occupied with the health care bill developments there was also some focus on the ECB’s TLTRO II auction. Take up was higher than expected at €233.5bn compared to the consensus forecast for €110bn. A total of 474 bidders also took part which compares to 200 bidders in December. While we didn’t get a country breakdown we did see equity markets in Europe strengthen following the news with the Stoxx 600 finishing up +0.85% and the peripherals up a little more. European Banks also rose +0.75% while bond yields generally finished higher (2y Bunds +2.9bps, 10y Bunds +2.3bps, 10y Peripherals +1bp to +5bps). Financials credit also tightened with the iTraxx Senior and Sub indices rallying 2bps and 5bps respectively, outperforming iTraxx Main which finished 1bp tighter.

Away from that the data in the US was once again fairly second tier in nature. New home sales were reported as rising +6.1% mom in February and more than the +1.6% expected by the market, perhaps reflecting the relatively mild winter. Initial jobless claims ticked up to 258k last week which was a rise of 18k, although the four-week average continues to hover around the 240k area. Meanwhile the Kansas City Fed’s manufacturing index rose 6pts to 20 in March which is in fact the highest reading since March 2011. Elsewhere, in Europe the European Commission’s flash consumer confidence reading rose 1.2pts to -5.0 in March which was a little better than expected. In the UK retail sales excluding fuel also surprised to the upside after printing at +1.3% mom (vs. +0.3% expected) in February. The CBI’s Distributive Trades Survey for March also revealed that 32% of respondents reported growth which was up from 27% in February.

There was also a little bit of Fedspeak yesterday although nothing that particularly moved the dial. Fed Chair Yellen didn’t touch on either monetary policy or the economy. San Francisco Fed President Williams did however and said that three “or maybe even more” rate increases this year makes sense, but depends on how the data comes in.

Looking at the day ahead, this morning in Europe we’re kicking off in France where the final revisions to Q4 GDP will be made. Thereafter we will get the aforementioned flash PMI’s for the Euro area, Germany and France. This afternoon in the US the main focus is likely to be on the February flash durable and capital goods orders data where market expectations is for a +1.3% mom rise in headline durable goods orders and +0.5% mom rise in core capex orders. The flash PMI’s will also be out in the US this afternoon. Away from the data there is plenty of Fedspeak with the Fed’s Evans (12pm GMT), Bullard (1.05pm GMT), Dudley (2pm GMT) and Williams (5.30pm GMT) scattered throughout the day.  Of course the main focus will be on the healthcare bill developments.



i)Late  THURSDAY night/FRIDAY morning: Shanghai closed UP 20.85 POINTS OR .64%/ /Hang Sang CLOSED UP 30.57 POINTS OR 0.13% . The Nikkei closed UP 177.22 OR 0.93% /Australia’s all ordinaires  CLOSED UP 0.73%/Chinese yuan (ONSHORE) closed UP at 6.8862/Oil ROSE to 47.93 dollars per barrel for WTI and 50.83 for Brent. Stocks in Europe ALL IN THE RED    ..Offshore yuan trades  6.8741 yuan to the dollar vs 6.8862 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS CONSIDERABLY AGAIN/ ONSHORE YUAN SLIGHTLY STRONGER BUT  THE OFFSHORE YUAN  IS SLIGHTLY WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY WEAKER DOLLAR. CHINA SENDS HER DISPLEASURE SIGNAL TO WASHINGTON 




Wow!! that happened fast! Huishan Dairy’s stock collapsed over 90 in minutes wiping out 4.2 billion in market value

(courtesy zerohedge)


China’s Largest Dairy Operator Suddenly Crashes 90% To Record Low, Muddy Waters Says “Worth Close To Zero”

In December 2016, Muddy Waters’ Carson Block said China’s largest dairy farm operator, Hong-Kong listed China Huishan Dairy Holdings Co., is “worth close to zero” and questioned its profitability in a report. Today, with no catalyst, it suddenly almost is. The stock collapsed over 90% in minutes to a record low.

The sudden crash wiped out about $4.2 billion in market value in the stock, which is a member of the MSCI China Index.

In December, Muddy Waters alleged that Huishan had been overstating its spending on its cow farms by as much as 1.6 billion yuan to “support the company’s income statement.” The report also alleged that the company made an unannounced transfer of a subsidiary that owned at least four cow farms to an undisclosed related party and Muddy Waters concluded that Chairman Yang Kai controls the subsidiary and farms. Those findings came from several months of research including visits to 35 farms and five production facilities, drone flyovers of Huishan sites and interviews with alfalfa suppliers, according to the report. Muddy Waters said it has shorted Huishan’s stock.

“It will be even harder for Huishan to get funded in the capital market after the report, amid a couple of earlier allegations that have raised some red flags to investors,” said Robin Yuen, an analyst at RHB OSK Securities Hong Kong Ltd. Still, Huishan’s shares and operations are unlikely to “collapse” due to its high share concentration and sufficient cash flow generated by its dairy business, he said by telephone.

About 73 percent of Huishan’s shares are held by Champ Harvest Ltd., a company that’s in turn 90-percent owned by Yang. A buying spree by Yang had supported the shares last year, making it a painful trade for short sellers. A one-year rally of about 80 percent through a peak in June had made the shares expensive.

Well that is all over now!!



We have already reported to you the huge withdrawals of gold from the Shanghai Gold Exchange and that generally equals demand.  The total reported to you two weeks ago for February was 179 tonnes.

However the following is very interesting:  a huge increase in hydro consumption. That generally bodes well for commodities



(Katchum/seeking Alpha)

China’s Economy Explodes In February 2017

Mar. 24, 2017 5:23 AM ET


1 comment |Includes: SPDR Gold Trust ETF (GLD)

China’s February 2017 power consumption exploded. I have never seen such a large spike.

This means that there is a high probability that China’s GDP growth will accelerate and this will bode well for commodities. We’ll keep monitoring this trend.

This trend is confirmed by the record high Shanghai gold withdrawals in February 2017.

Something happened in February…



The Central Bank of Switzerland spent a mammoth 68 billion dollars worth of Euros in an attempt to keep the Swiss Franc from rising against the Euro.


(courtesy zero hedge)

SNB Spent $68 Billion On Currency Manipulation In 2016

While Donald Trump has repeatedly expressed his displeasure with China for manipulating its currency, he appears to have recently figured out that over the past 2 years Beijing has been spending hundreds of billions in dollar to strengthen, not weaken, the Yuan and to halt the ~$1 trillion in capital flight from China. But while everyone knows that the biggest currency manipulation in the world, and perhaps the Milky Way galaxy is Japan, which now owns 40% of all JGBs in its ongoing attempt to pressure the Yen lower and explains why Abe was trembling when he met with Trump, terrified the US president would tell him to stop, one place where Trump may want to look is Europe’s famously “neutral” country, which however continues to be quite bellicose when it comes to currency warfare. Overnight, the SNB announced that in 2016 it spent 67.1 billion Swiss francs, or $67.6 billion, to purchase foreign currencies in an effort to weaken its currency.

The amount, published in the central bank’s annual report on Thursday, was roughly CHF20 billion lower than the 2015 total of 86.1 billion francs and a record of 188 billion spent in 2012. What is notable is that in 2015, the Swiss National Bank ended its 1.20 EURCHF peg, which ended up costing the SNB tens of billions in FX losses.

As shown in the chart below, the SNB has used interventions for the better part of a decade to keep the franc, Europe’s preeminent flight to safety currency, in check and lessen the risk of deflation. After it gave up its currency cap in early 2015, the SNB has also relied on a negative deposit rate to counter appreciation pressure. It reaffirmed that two-pillar policy stance last week.

Additionally, as part of its annual report, the SNB reported that at the end of 2016, the SNB’s assets hit a record CHF 747 billion, compared to CHF 641 billion the previous year, higher than the country’s total GDP. The central bank’s assets consisted almost exclusively of currency reserves, that is gold and foreign currency investments. Currency reserves were up by CHF 89 billion year-on-year to CHF 692 billion, principally due to inflows from foreign currency purchases and valuation gains.

And since the SNB is the only central banks which admits it is an aggressive hedge fund, it also reports both the composition of its balance sheet and the return on assets, and in 2016 it generated a profit on currency reserves of 3.8%. Meanwhile, returns on gold and foreign exchange reserves were 11.1% and 3.3% respectively.

What is paradoxical is that despite gold generating the SNB’s highest return not only in 2016 (11.1%) and over the entire 2002-2016 period, at 6.5%, the central bank has been aggressively reducing the relative size of its gold-denominated assets over the past 7 years, mostly as a result of purchases of USD-denominated stocks and bonds.

In 2016, both fixed income investments and equities contributed to the SNB’s bottom line. On the other hand, the slight appreciation of the Swiss franc reduced the return.

The SNB also revealed that in 2016, the SNB held 20% of its foreign exchange reserves in the form of equity investments. Measured in Swiss francs, the average annual return on equities since their introduction in 2005 has been 2.8%; the return on bonds has averaged 0.7%.

Finally, for those confused that the SNB is so open about its purchases and holdings of mostly US stocks, this is how the central bank justifies its policy of active stock management:

The contribution of equities to preserving the value of the currency reserves and building the SNB’s equity base has thus been very substantial during this period.

We look forward to how this boilerplate language will change after the next equity market crash which will wipe out tens of billions in “value” from the SNB’s balance sheet.




Norway is contemplating putting defense shields on its territory facing Russia.  Russia warns Norway not to do it

(courtesy Gorka/StrategicCultureFoundation)

Russia Warns Norway Over Missile Defense Plans

Authored by Alex Gorka via The Strategic Culture Foundation,

Russia has warned Norway over consequences of joining NATO ballistic missile defense (BMD) plans. According to Russian ambassador to Oslo, Moscow will retaliate. Norway’s possible accession to NATO’s missile shield «will be a new factor that will be considered in our strategic planning as the emergence of an additional problem in the Arctic region», Teimuraz Ramishvili told the Norwegian state media network NRK.

In 2017, Norway may become a part of BMD. The Norwegian government has appointed an expert group to consider a possible Norwegian contribution to the missile shield. A detailed report on the issue is currently being prepared by experts from the Norwegian Defense Research Establishment and the US Missile Defense Agency to be submitted the year.

Norway has no interceptors on its soil but there are other ways to contribute into the anti-missile plans. Denmark does not host missiles but it committed itself to the bloc’s BMD in 2014, working to equip its frigates with advanced radar systems capable of detecting and tracking ballistic missiles. The missile defense program continues to be implemented despite the fact that after the nuclear agreement with Iran in 2015, there is no rationale for it.

?slo is a participant in the US-led Maritime Theater Missile Defense Forum. The Norwegian contribution to the missile defense system has not yet been decided on. Even without interceptors, Norway could contribute by integrating into the BMD system its Globus II/III radar in the Vardøya Island located near the Russian border just a few kilometers from the home base of strategic submarines and 5 Aegis-equipped Fridtjof Nansen-class frigates. The Vardøya radar can distinguish real warheads from dummies.

Another radar located in Svalbard (the Arctic) can also be used by US military for missile defense purposes. Senior US officials and politicians have visited the site during the last few years, including former Defense Secretary Ash Carter, former State Secretary John Kerry and Republican Senator John McCain. The radar is installed in violation of the 1925 treaty which states that Svalbard has a demilitarized status. The visitors invented different reasons, like viewing the effects of climate change (John Kerry) or highlighting the plight of polar bears (John McCain) to justify the need to inspect the site.

Installation of BMD sites might potentially undermine the efficiency of Russian strategic nuclear forces as a means of deterrence.

Norway is executing a drastic change in its military policy towards a far more aggressive posture. Even though the country is small, it has the sixth biggest military budget per capita, after the United States, Israel, Singapore and some ‘monarchies’ in the Persian Gulf. The country spends 7.3 billion dollars on the military, more than Sweden (5.7 billion), a country with twice the population. Its geographic position makes it a key element of NATO military planning. The nation’s leading political parties want an increased focus on ‘strategic assets’ like F-35, capable of striking deep into Russian territory, submarines and surveillance capabilities.

Norway hosts 330 US Marines in the central areas of the country, formally on a ‘rotating’ basis. The rotation does not change the fact that the forces are permanently present in Norway. They are deployed at the Vaernes military base, about 1,500 km (900 miles) from the Russian territory, but the training program involves traveling closer to the border. Norway and Russia share a small land border far in the north.

The Marines can be easily reinforced. The US forward storage areas have been upgraded to store cutting edge weapons and equipment for about 16,000 Marines. Building up stockpiles is a key part of US strategy to enhance its capabilities in Europe. There are plans to warehouse tanks, artillery and other fighting vehicles at other locations around the Old Continent.

The only purpose for the deployment is preparation for an attack against Russia. The Marines are first strike troops. The provocative move is taking place at the time the Russia-NATO relationship hit a new low as the bloc’s forces deploy in Eastern Europe and tensions run high in the Black Sea and elsewhere. According to Heather Conley, the director of the Center for Strategic and International Studies’ Europe Program, Northern Europe is now being viewed as a «theatre of operations».

There are other plans to increase US military presence in Norway. According to a report of Washington-based Center for Strategic and international Studies (CSIS), «The former Royal Norwegian Navy base at Olavsvern is ideal for supporting submarine operations in the extreme North Atlantic and Arctic Seas». The think tank believes it may be possible for Norway to nationalize and reopen a portion of the facility to support the rotational presence of US, UK, French, and Norwegian submarines. Olavsvern was NATO’s closest naval base to Russia’s submarine bases along the coast of the Kola Peninsula west of Murmansk.

It was reported last year that a study group from the US Navy visited both Andøya and Evenes airports in northern Norway to see if any of the two airports could be suitable to serve as a base for American P-8 Poseidon patrol aircraft.

The deployment of NATO forces to Norway is clearly a provocative act directed at Moscow. Norway shares a 121 mile border with Russia, while the Russian Northern Fleet is based in the Murmansk region, approximately 100 miles from the border.

Norway has pledged not to host foreign forces on its territory. It had stashed stockpiles of weapons in preparation for a possible conflict, but until recently, foreign troops were allowed into the country only temporarily for training purposes. Oslo had adhered to this principle even at the height of the Cold War.

Shifting away from the «no foreign forces on national soil» policy is fraught with consequences. Turning the national territory into a spearhead for an offensive against Russia inevitably makes Norway a target for a retaliatory strike. Russia did not start it. Actually, very few NATO members take part in the BMD plans. The decision to join would be seen as an outright provocation staged by a neighboring state. By doing so, Norway will deteriorate the relations and greatly reduce its own security which can only be achieved through developing of partnership and strengthening of centuries of good neighborly relations.




This is a surprise;  Russia cuts interest rates by 25 basis points. What is more surprising is that the Rouble rose despite the fall in rates:

(courtesy zero hedge)


Russia Unexpectedly Cuts Interest Rates For The First Time In Seven Months

The Russian Central Bank surprised markets when it unexpectedly cut interest rates by 25 bps to 9.75% (30 economists expected no change, 8 predicted a 25 bps cut), its first rate cut in four meetings or 7 months, as inflation, which has dropped from a peak of 17% to just 4.6% last month, appears to be under control, while growth is returning to the oil-dominated economy driven by the steady price of oil.

In the statement after the decision, the central bank said the risk it would miss the 4% inflation target this year had “abated” with further rate cuts a possibility over in the third and fourth quarters, while boosting its 2017 GDP forecast to 1-1.5%:

“Bank of Russia admits the possibility of cutting the key rate gradually in coming 2Q-3Q” the bank said in a statement while noting that it still plans to keep monetary policy moderately tight as inflation risks have declined, but remain elevated. It also said the risk of missing 2017 inflation target of 4% have “slightly abated”

Quoted by the FT, Timothy Ash, at Bluebay Asset Management, who notes Russia has some of the highest real interest rates of the world’s major emerging markets said that with GDP growth expected to come in at a still moderate 1-1.5% this year, there is still “significant scope for rate cuts.”

“With no prospect for sanctions being removed this year, one might expect the CBR to try and help with the heavy lifting by giving a bump to the economy before the elections [in 2018],” said Mr Ash.

Curiously, despite the easing, the ruble strengthens 0.4% to 57.2175 per dollar after initially erasing gains as central bank cuts key rate; it stoodat a three-day high against the dollar after the decision. Meanwhile, Russian five-year bonds steady at 8.11% as the Micex Index of stocks declined modestly by 0.4%.




Welcome to the new world.  Sweden builds a police fortresss in Rinkeby, a suburb of Stockholm where many of the migrant (many Somalians) now live

(courtesy zero hedge)

Swedes Begin Construction Of Police Fortress In “Little Mogadishu”

Rinkeby is a suburban housing estate near Stockholm, where the Swedish welfare state keeps a large number of unassimilated migrants. 90% of the population is non-Swedish and many of these are Somalians given to crime and rioting.

Some may remember it from the riots confirming President Trump’s fears about Sweden…

In June 2010, Rinkeby was the scene of riots and attacks against the local police station and Rinkeby is the region in which the ’60 Minutes’ crew were attacked in 2016.

The problems Sweden faces integrating large numbers of Muslim immigrants is a subject on which Nordstjernan columnist Ulf Nilson has written many times. His warnings of increasing radicalization among Sweden’s Muslims – warnings he started to broadcast a decade ago – now seem eerily prophetic in light of an Associated Press investigation that found Stockholm to be a breeding ground for jihadists among Swedish Somalis.


According to the AP report, which first ran Jan. 24, an al-Qaida-linked group is busy recruiting anti-government fighters among Somali youths living in Rinkeby. A suburb of Stockholm, Rinkeby has earned the nickname of “Little Mogadishu” because of the number of Somalis living there. Rinkeby is also the center of the recruiting efforts of al-Shabab, a group with ties to al-Qaida.

Rinkeby is a known problem area in Stockholm. It was here NRK journalist Anders Magnus was attacked with stones last spring, and here the police never go in the evenings without reinforcements from other patrols according to Dabladet.

As Alt-Right-News reports, in 2014, they had to close down the police station, as it had originally been built for an all-Swedish community, where the main job of policemen is to look for lost pets and help old ladies cross the street.

The new police station, which is being built under heavy security and is scheduled to open in 2019, will cost over $40 million construction costs in addition to an annual rental cost of $1.6 million. The security cost for the actual construction is unknown. It is planned that 250 personnel will work there in the community of around 15,000 people. This is a ratio of one cop to 60 residents (for comparison Chicagohas one cop to 270 residents).

The police station will feature bullet proof windows, walls reinforced with sheet metal, and fencing around it, possibly with electrified barbed wire. So it will look more like a military installation than anything. Also it will be designated as “specially protected,” which means a year in prison for anyone even throwing a stone at it. 

But there are problems with the police station, as none of the largely White police working there will actually live in the community and will have to commute it. This being Sweden, a disproportionate number will also be women. This raises several problems that would not be issues elsewhere. Police officers are worried about vandalism to their private cars so refuse to drive in, while using public transport is considered too dangerous, especially for female officers.

“Those who will be working in Rinkeby do not want to use public transport and take the subway,” Local Police Area Manager Niclas Andersson told the press.


“It’s too dangerous. One suggestion is secure parking for the private cars of police personnel. Another is that the police will be driven to and from work.”

A secure parking area for the private cars of police personnel can not be added without greatly inflating the already high cost of the facility, so it looks like police personnel will have to be bussed in at the start of each shift in a specially reinforced police bus with darkened windows.

This is what multiculturalism looks like, folks, and the costs are enormous.



Trump approves the Trans Canada Keystone Pipeline project officially:

(courtesy zero hedge)

Trump Approves TransCanada’s Keystone XL Pipeline

It’s official: moments ago TransCanada said the U.S. Department of State issued a presidential permit for the construction of the Keystone XL Pipeline, ending a multi-year controversial, at times acrimonious debate over the future of the pipeline. The pipeline linking Canadian oil sands to U.S. refiners had been blocked by Barack Obama, who said the pipeline would do nothing to reduce fuel prices for U.S. motorists and would contribute emissions linked to global warming.

“This is a significant milestone for the Keystone XL project,” said Russ Girling, TransCanada’s president and chief executive officer, said in a statement. “We greatly appreciate President Trump’s administration for reviewing and approving this important initiative and we look forward to working with them as we continue to invest in and strengthen North America’s energy infrastructure.”

Transcanada also said it would continue to work with Nebraska, Montana and South Dakota to get necessary permits and approvals to advance project to construction

Full statement is below:

TransCanada Receives Presidential Permit for Keystone XL


TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada) today announced that the U.S. Department of State has signed and issued a Presidential Permit to construct the Keystone XL Pipeline. 


“This is a significant milestone for the Keystone XL project,” said Russ Girling, TransCanada’s president and chief executive officer. “We greatly appreciate President Trump’s Administration for reviewing and approving this important initiative and we look forward to working with them as we continue to invest in and strengthen North America’s energy infrastructure.”


Keystone XL is an important piece of TransCanada’s comprehensive U.S. growth portfolio driving an investment of more than US$15 billion in liquids and natural gas projects that will create thousands of well-paying jobs and generate substantial economic benefits across the U.S.


TransCanada will continue to engage key stakeholders and neighbors throughout Nebraska, Montana and South Dakota to obtain the necessary permits and approvals to advance this project to construction.


In conjunction, TransCanada has discontinued its claim under Chapter 11 of the North American Free Trade Agreement (NAFTA) and will end its U.S. Constitutional challenge.



USA rig counts up 10 weeks in a row and it is double the May 2016 lows. USA cured production is now at 13 month highs

(courtesy zero hedge)

US Crude Production Hits 13-Month Highs As Oil Rig Count Doubles Off May 2016 Lows


With crude production at 13-month highs, the trend of rising rig counts (now up 10 weeks in a row) suggests OPEC remains anything but in control as the global inventory glut deepens. The last week saw the oil rig count rise by 21 (the most since January) to 652 – the highest since September 2015.

From 318 at its trough in May 2016, the US oil rig count is now up 332 to 652 (a double) – tracking the lagged WTI price perfectly…

Bloomberg Intelligence analysts Andrew Cosgrove and William Foiles wrote in a note Monday.

“U.S. rig counts may continue to rise further in the short run, given the lag between approvals and physical deployments,” Cosgrove and Foiles said.


“Any rig increases should remain front-loaded in the first half as capital spending ramps up at least 40 to 50 percent in 2017.”

US Crude production continues to track the lagged rig count and is now at its highest since Feb 2016…


The reaction in WTI was modestly lower…


And OPEC producers are in trouble…

As Bloomberg reports, oil officials from Kuwait, Algeria, Venezuela, Russia and Oman meet in Kuwait this weekend to discuss how well OPEC members have adhered to the agreement to curtail output. With oil falling on the heels of bearish figures from the EIA, the organizations’ producers are being squeezed by fiscal breakevens that soar an average of $40 a barrel above the current oil price, according to figures from RBC.



Now Goldman Sachs believes that 2018 will be a rough year for oil:

(courtesy Nick Cunningham/


OPEC Out Of Moves As Goldman Sachs Expects Another Oil Glut In 2018

Authored by Nick Cunningham via,

Oil prices are heading down again on swelling U.S. crude oil inventories, with Brent dropping below $50 per barrel for the first time this year.

The OPEC deal that has taken more than 1 million barrels per day of oil off the market has not succeeded in reversing this bearish trend for inventories. And with the deal at its midway point, focus is shifting towards an extension of the cuts through the end of the year.

But OPEC’s usual strategy of jawboning the market back up ahead of these negotiations seems to be wearing thin amid record high crude oil inventories. “OPEC has used up most of its arsenal of verbal weapons to support the market. One hundred percent compliance by all is the only tool they have left and on that account they are struggling,said Ole Hansen, head of commodity strategy at Saxo Bank.

“OPEC’s market intervention has not yet resulted in significant visible inventory drawdowns, and the financial markets have lost patience,” investment bank Jefferies said in a research note.

Although projections from Wall Street banks tend to vary quite a bit, there is a growing chorus warning about another slide in crude prices. At this point, the big variable is whether or not OPEC decides to extend the deal when it meets in May – an extension would likely stabilize prices and might even push them back up into the mid-$50s or higher. No extension and oil could fall much further into the $40s.

Looking out a bit further, things get much more complicated. Even if the supply/demand imbalance is taking a long time to correct itself, rising demand and tepid supply growth suggest that the glut will ease over time. At least that is the general consensus.

However, Goldman Sachs warns that another downturn could come over the next three years, sparked by a new wave of supply stemming from megaprojects planned years ago. These projects cost billions of dollars and take many years to bring online, and many of them were initiated back when oil prices traded at $100 per barrel.

“2017-19 is likely to see the largest increase in mega projects production in history, as the record 2011-13 capex commitment yields fruit,” Goldman said in a note.This long-lead-time wave of projects and a short-cycle revival, led by U.S. shales, could create a material oversupply in 2018-19.”

Goldman identified a handful of projects in Brazil, Russia, Canada and the Gulf of Mexico that will reach completion and add to global supply between 2017 and 2019. Combined with new shale output, these projects could add another 1 million barrels per day next year.

The investment bank also warned that the markets have become overly optimistic on oil prices since the OPEC deal was announced nearly four months ago. It’s not hard to see why. OPEC’s production cuts in November ushered in several months of unusual stability in prices, ended a three-year run of spectacular volatility. It also sparked widespread confidence in a price floor – with the cuts coming, oil prices likely wouldn’t fall much in the near run, market analysts concluded, and over the longer-term, they would slowly move up towards $60 per barrel.

As a result, U.S. credit markets warmed up to new drilling again, and not surprisingly, spending and drilling activity are already on the rise. But Goldman says that shale output could come in higher than expected this year, disappointing those expecting higher prices.

Most European integrated companies are using a working assumption for their budgets that oil prices will average $60 per barrel in 2017, with an upper end bound of $80 per barrel between 2018 and 2020. That stands in sharp contrast to Goldman’s projections of oversupply for the next three years. Related: Oil Has Room To Fall As Speculators Bail On Bullish Bets

In short, we have a situation in which shale output is surging too quickly, before OPEC has had the chance to balance the market. On top of that, production from yesteryear’s megaprojects will soon come online, exacerbating the glut. The only thing that will prevent another downturn in prices would be an extension of the OPEC cuts, but as Goldman points out, the group has to “weigh the relative benefit of stability (extend the cut) vs. the risk of long-term share loss.”

OPEC has been burned before when it tried to cut back, losing market share without a corresponding increase in prices. So far in 2017, the same thing is occurring. That might make OPEC members think twice about continuing to shoulder the burden for the global market, ceding market share to shale companies already on a spending spree. It’s not clear how this will shake out, but it’s safe to say that, at this point, there is more danger on the downside for oil prices than on the upside.



Venezuela is now in dire straits as it cannot pay for gasoline or other refined products.  It will probably default later this year.

(courtesy Nick Cunningham/

Venezuela In Dire Straits As Oil Production Falls Further

Authored by Nick Cunningham via,

Venezuela’s economic crisis continues to deepen. The South American OPEC member is thought to be sitting on nearly 300 billion barrels of oil, far more than any other country in the world, including Saudi Arabia (estimated at 268 billion barrels). But the economy has been in freefall for several years, with conditions continuing to deteriorate.

The economic crisis has morphed into a full-blown humanitarian disaster. Just this week the Wall Street Journal reported on Venezuelan women traveling to neighboring Colombia to give birth because the state of Venezuela’s hospitals are horrific, with shortages of medical supplies and trained staff. Infant mortality is worse than in war-ravaged Syria.

Food and other essential items are also painfully scarce, leading to long lines at shops. Tensions run high because there is not enough to go around.

Now even gasoline is running low in Caracas, Reuters reports, an unusual development for the capital city.

Gas shortages suggests problems for Venezuela’s state-owned oil company PDVSA are deepening. The government depends on oil production for more than 90 percent of its export revenues, and the collapse of oil prices back in 2014, coupled with a long-term slide in output, have ruined the company’s finances.

That, in turn, puts even more pressure on PDVSA. A shortage of cash is straining the company’s ability to import refined products as it falls short on bills to suppliers. PDVSA needs to import refined products to dilute its heavy crude oil, but without enough cash, tankers are sitting at ports unable to unload their cargoes. Reuters also says that “many tankers are idle because PDVSA cannot pay for hull cleaning, inspections, and other port services.”  

Separately, Bloomberg reported that Venezuela’s largest port at Puerto Cabello is quiet, with satellite imagery showing no vessels arriving or departing. “If you can see a country’s economic decline from space, you know it’s in big trouble,”Graham Stock, the head of emerging-market sovereign research at BlueBay, told Bloomberg on March 19.

The economic malaise has Venezuela’s cash reserves plunging to $10.4 billion, according to the latest estimates, which is equivalent to only 10 percent of the country’s outstanding debt. Graham Stock told Bloomberg that he puts Venezuela’s odds of a default this year at 50 percent.

Inflation is likely over 700 percent annually, but in February the central bank decided to stop publishing money supply data, which surely doesn’t bode well. “If they are not publishing, you know it must be skyrocketing,” Aurelio Concheso, director of the Caracas-based business consultancy Aspen Consulting, told Reuters in an interview.

The economic meltdown and humanitarian crisis has sparked anger across the country, and opposition to the incompetent management of President Nicolas Maduro is growing. That has been met with a clenched fist by the Maduro government, which has jailed political prisoners, weakened the National Assembly and indefinitely delayed gubernatorial elections. In response, 14 Latin American nations plus the United States and Canada are pushing a resolution in the Organization of American States calling on the Maduro government to hold elections and back off his nationwide crackdown. The efficacy of such a move is uncertain, but for a dozen nations in Latin America to intervene in such a way is a testament to how far Venezuela’s stock has fallen. “It’s one more step in the increasing isolation of Venezuela,” Javier Corrales, a professor and Latin American expert at Amherst College, said in a WSJ interview. “It’s a very important step in a region that realizes one of its members is in violation of the democratic precepts of the OAS charter.”

Venezuela’s predicament has ramifications for the oil market. The South American nation was desperate for collective production cuts from OPEC members, and has enthusiastically supported the deal. Venezuela pledged output cuts of 95,000 bpd from October levels, promising to average 1.972 million barrels per day between January and June. Early data shows that Venezuela has not yet followed through on those cuts – Reuters says it is achieving only a 7 percent compliance rate. But the government has ordered cuts from some PDVSA operations in Orinoco Belt, a sign that the Maduro government has intensions to follow through on its pledge. Non-compliance could rattle the resolve of other OPEC members, ultimately leading to an unraveling of the deal, which would likely push oil prices much lower and worsen Venezuela’s crisis.

However, production cuts also run the risk of exacerbating the economic depression that Venezuela finds itself in. Lower production means much less revenue. On top of that, Reuters says that some of the cuts will affect joint ventures that PDVSA has with Eni and Rosneft, two partners that won’t be too happy about being ordered to reduce output.

The bottom line is that Venezuela’s oil output might be heading down whether or not President Maduro wants it to. Fitch Ratings says that a default on PDVSA’s debt is “probable” this year, with an estimated $10 billion in debt payments falling due and only $2 billion in cash on hand. And the company would need much higher prices in order to boost production at any point in the near-term. “Giving the tight liquidity, prices need to be significantly higher to revive output,” Lucas Aristizabal, a senior director at Fitch, told Bloomberg in February. “At least more than $100 to start with.”


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





Early THIS FRIDAY morning in Europe, the Euro ROSE by 19 basis points, trading now ABOVE the important 1.08 level RISING to 1.0802; 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 20.85 POINTS OR 0.64%     / Hang Sang  CLOSED UP 30.57 POINTS OR 0.13% /AUSTRALIA  CLOSED UP 0.73%  EUROPEAN BOURSES ALL IN THE RED 

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

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

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

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

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

The NIKKEI: this FRIDAY morning CLOSED UP 177.22 POINTS OR 0.93%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 30.57 POINTS OR 0.13% / SHANGHAI CLOSED UP 20.85 OR .64%/Australia BOURSE CLOSED UP 0.73%/Nikkei (Japan)CLOSED UP 177.22 OR 0.93%  / INDIA’S SENSEX IN THE  GREEN

Gold very early morning trading: $1245.45


Early FRIDAY morning USA 10 year bond yield: 2.421% !!! UP 1 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  3.032, PAR IN BASIS POINTS  from THURSDAY night.

USA dollar index early FRIDAY morning: 99.69 DOWN 7  CENT(S) from THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING


And now your closing FRIDAY NUMBERS

Portuguese 10 year bond yield: 4.150%  DOWN 4  in basis point yield from THURSDAY 

JAPANESE BOND YIELD: +.065%  UP 1  in   basis point yield from THURSDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.70%  DOWN 3 IN basis point yield from THURSDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.231 DOWN 4 POINTS  in basis point yield from THURSDAY 

the Italian 10 yr bond yield is trading 53 points HIGHER than Spain.





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

Euro/USA 1.0809 UP .0027 (Euro UP 27 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.02 UP: 0.025(Yen DOWN 3 basis points/ 

Great Britain/USA 1.2594 DOWN 0.0020( POUND DOWN 20 basis points)

USA/Canada 1.3368 UP 0.0020(Canadian dollar DOWN 20 basis points AS OIL ROSE TO $47.78


This afternoon, the Euro was UP by 27 basis points to trade at 1.0809


The POUND FELL BY 20  basis points, trading at 1.2494/

The Canadian dollar FELL by 20 basis points to 1.3368,  WITH WTI OIL RISING TO :  $47.78

The USA/Yuan closed at 6.8802/
the 10 yr Japanese bond yield closed at +.065% UP 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 3  IN basis points from THURSDAY at 2.407% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.013 DOWN 2  in basis points on the day /

Your closing USA dollar index, 99.62 DOWN 15  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED down 5.07 OR 0.07% 
German Dax :CLOSED UP 24.59 POINTS OR 0.20%
Paris Cac  CLOSED DOWN 11.16 OR 0.24%
Italian MIB: CLOSED UP  20.53 POINTS OR 0.10%

The Dow closed DOWN 59.86 OR 0.29%

NASDAQ WAS closed UP 11.05 POINTS OR 0.19%  4.00 PM EST
WTI Oil price;  47.78 at 1:00 pm; 

Brent Oil: 50.62  1:00 EST




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

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


BRENT: $50.95


USA 30 YR BOND YIELD: 3.014%



USA DOLLAR INDEX: 99.72  down 4  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2465 : down .0049  OR 49 BASIS POINTS.

Canadian dollar: 1.3346  down .0001

German 10 yr bond yield at 5 pm: +.411%



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


VIX Spikes To 2017 Highs, Stocks Suffer Worst Week In 6 Months As GOP Pulls Vote

“Good Day Sir…”


Another day, another headline-algo game… Dow is down over 600 points from record highs

  • 1235 Drop – Freedom Caucus “things are not good”
  • 1247 Drop  – Good chance vote may be postponed
  • 1249 Drop – Ryan “we don’t have the votes”
  • 1350 Drop – Spicer sounding downbeat
  • 1529 Rally – Vote Pulled (retarded narrative that now they can focus on tax reform!)
  • 1545 Drop – Market suddenly wakes up to realization no health bill means smaller tax reform

    1527 Rally –

Just look at the panic selling in VIX as headline shit that the vote was being pulled!!!


The Dow’s longest losing streak since right before the election (7 days)

VIX soared above 14 to 2017 highs… up 6 days in a row and above its 200DMA – then collapsed in the last few minuest to close red!


Quote a swing…


On the week:

  • Small Caps worst week since Feb 2016
  • Trannies down 3 weeks in a row – worst week since June 2016
  • Dow worst week since September
  • S&P worst week since November
  • Nasdaq worst week since 2016 (from record high to one-month lows)

Financials were a bloodbath on the week, with only Utes in the green –


Financials suffered the worst week since Jan 2016


The Bloomberg Dollar Index fell again today – the 8th losing day in a row – USD Index down 2nd week in a row – biggest 2-week drop in 12 months


The longest losing streak since April 2011… (the dollar has not had a longer losing streak since Dec 2006)


Treasury yields tumbled on the week – this is the best 2 weeks for Bonds since July 2016 – 


NOTE that both times The Fed hiked rates, yields tumbled…30Y back to 3.00%, 10Y back to 2.40%


Gold up for 2 weeks in a row – best 2 weeks since Brexit – back to unchanged for March


Crude managed to scramble back to a $48 handle into the close but red on the week, RBOB rallied into the close back above $1.60


Gold topped $1250, Silver topped $17.50 on the week…


Gold is 2017’s biggest winner…


Time for some mean reversion – in ‘soft’ data…


And stocks to earnings…



Trading today when it was learned that they may not have enough votes:

Stocks, Dollar, Bond Yields Tumble As GOP Leaders ‘Not Confident” They Have Votes

House leaders are reportedly mulling next steps if the health bill does not pas as GOP leaders are not confident that they have the votes to pass. The reaction in stocks was very fast…

Stocks are fading fast to yesterday’s lows and VIX is surging


10Y Yield dropped below 2.40%…


And the Dollar Index is sliding fast


The CBO has now weighed in on the new Ryan proposals and they decided it was simply awful:  it kept all the negatives and almost none of the positives.  The new bill will not cover anybody new and while the original bill saved 337 billion over a 10 yr period, the new plan only saves 150 billion.

the conservatives will not like this at all..

(courtesy zero hedge)

Revised GOP Health Plan Gets Terrible CBO Score: All The Negatives, Almost No Positives

CBO has scored the revised RyanCare plan that was released on Monday night (notably not with amendments that have likely been discussed this week with the Freedom Caucus) and it is even worse… considerably less budget deficit reduction, the same number of uninsured, and similar effects on healthcare premium. 

CBO Comparison With the Previous Estimate

On March, 13, 2017, CBO and JCT estimated that enacting the reconciliation recommendations of the House Committee on Ways and Means and the House Committee on Energy and Commerce (which were combined into H.R. 1628) would yield a net reduction in federal deficits of $337 billion over the 2017-2026 period. CBO estimates that enacting H.R. 1628, with the proposed amendments, would save $186 billion less over that period. That reduction in savings stems primarily from changes to H.R. 1628 that modify provisions affecting the Internal Revenue Code and the Medicaid program.


Over the 2017-2026 period, modifications to provisions affecting the Internal Revenue Code that are not directly related to the law’s insurance coverage provisions would reduce JCT’s estimate of revenues by $137 billion. Reducing the threshold for determining the medical care deduction on individuals’ income tax returns from 7.5 percent of income to 5.8 percent would reduce revenues by about $90 billion. Other changes include adjusting the effective dates and making other modifications to the provisions that repeal or delay many of the changes in the Affordable Care Act, which would reduce revenues by $48 billion.


A number of changes to the Medicaid program would reduce CBO’s estimate of savings by $41 billion over the 2017-2026 period. The reduction would result from revising the formula for calculating the per capita allotments in Medicaid to allow for faster growth of the per capita cost of aged, blind, and disabled enrollees. The effects of changing that formula would be offset somewhat by the effects of three other provisions that would increase savings: reducing the per capita allotment in Medicaid for the state of New York in proportion to any financing the state receives from county governments; providing states the option to make eligibility for Medicaid conditional on satisfying work requirements for enrollees who are not single parents of children under age 6 or who are not pregnant or disabled; and allowing states to receive a block grant for Medicaid coverage of children and some adults instead of funding based on a per capita cap.


Other smaller changes resulting from the manager’s amendments would reduce savings by an estimated $8 billion over the period.


Compared with the previous version of the legislation, H.R. 1628, with the proposed amendments, would have similar effects on health insurance coverage: Estimates differ by no more than half a million people in any category in any year over the next decade. (Some differences may appear larger because of rounding.) For example, the decline in Medicaid coverage after 2020 would be smaller than in the previous estimate, mainly because of states’ responses to the faster growth in the per capita allotments for aged, blind, and disabled enrollees—but other changes in Medicaid would offset some of those effects.

The legislation’s impact on health insurance premiums would be approximately the same as estimated for the previous version.


  • The bill would save $150 billion between 2017 and 2026. The original bill would have saved $337 billion.
  • In 2018, 14 million people would lose coverage. This number would increase to 24 million in 2026. This number did not change.

We would imagine conservatives will throw up all over it as it has all the negatives of the original bill with less than half the positives – less coverage and less deficit reduction!





Trump issues an ultimatum:  vote on Friday in the affirmative or Obamacare stays.  The Freedom causes may capitulate:

(courtesy zerohedge)


Trump Issues An Ultimatum To House Republicans: Vote On Friday Or Obamacare Stays

Update: Trump’s bluff may be working already. Following Trump’s ultimatum, Mark Meadows, chairman of the Freedom Caucus said that the healthcare bill has been improved, and that the Freedom Caucus will meet and discuss the revised bill. And while Meadows is maintaining a solid front for now, saying he is a “No” vote right now, with Trump having shone the spotlight fully on the Freedom Caucus, and thus providing republicans with a scapegoat should the vote fail tomorrow, we would not find it at all surprising if the Freedom Caucus were to fold overnight following “intense deliberations.”

* * *

Following a day of narrative twists and turns ahead of what was supposed to be a Thursday night vote to repeal Obamacare, a vote which was pulled in the last moment when over 30 conservative and moderate House republicans threatened to vote against the Ryan/Trump plan, Trump has had enough with the Freedom Caucus dissenters and has issued an informal ultimatum: vote to repeal Obamacare on Friday or Obamacare stays.

Trump is demanding a vote Friday in the House on the Republican plan to repeal and replace Obamacare, White House Budget Director Mick Mulvaney said according to Reuters. If the bill fails, Trump is prepared to move on and leave Obamacare in place the budget director added.

Trump officials meeting with the House GOP conference said Trump is done negotiating over the legislation, which was set to come up for a vote Thursday but was delayed.

Mulvaney told the GOP conference that Trump wants a vote on Friday during a dramatic closed-door meeting, according to a GOP source in the room.  If the vote fails, Trump will move on to other priorities and ObamaCare will stay as the law of the land, Mulvaney said.

There were last-minute changes being considered to the bill. But it was unclear whether the House of Representatives would be able to pass it, said North Carolina Congressman Mark Meadows, the chairman of a group of conservatives known as the Freedom Caucus, which has been critical of the bill. “I’m still optimistic” about reaching an agreement, Meadows told reporters.

Having met with Paul Ryan on Thursday evening, Trump’s right hand man Steve Bannon told reporters after the House Republican conference that he expects lawmakers to vote Friday on the health-care bill. When asked if he’s confident there’s enough votes for passage: “We’re going to vote and we’ll see.”

Rep. Chris Collins confirmed the Trump administration’s message after the meeting. Trump is done negotiating, he said.  “We have to have a vote tomorrow. He expects it to pass, but he’s moving on if for some reason it didn’t,” Collins said.

According to The Hill, the developments set up a likely vote on the measure Friday afternoon.

It remains unclear just how Trump’s ultimatum will change the minds of dozens of Republicans who have vowed to oppose the bill, putting them into a direct confrontation with their president. With all of the House’s Democrats expected to vote against the bill, the GOP can only afford 22 defections.

Additionally, even if their replacement plan does eventually get approval from the House, the legislation faces an even tougher fight in the Republican-controlled Senate.

Meanwhile, in a worst case scenario, in which the House votes tomorrow and fails to generate the needed majority of votes, it is unclear just how Trump can “move forward” under the reconciliation process, as tax reform is part and parcel with deficit-reducing – as scored by the CBO – Republican health bill. Should Trump push on, at best it will mean he has an even smaller tax cut cushion. Furthermore, should Trump further antagonize the Freedom Caucus, a far bigger problem for Trump and the government will be if the conservative wing refuses to budge on the debt ceiling negotiation, because should the US be unable to once again indefinitely extend the debt ceiling limit, the US will suddenly have far greater problems than repealing Obamacare.



And at 2 o’clock this afternoon: Ryan claims that  we do not have the votes:

(courtesy zero hedge)

here are the updates as they happened

Paul Ryan: “We Don’t Have The Votes”

Update 4:  After a series of conflicting headlines earlier, CNN is now reporting that Paul Ryan has made the trip to the White House to inform Trump: “We don’t have the votes.”

* * *

Update 3:  Moments ago new headlines surfaced that Paul Ryan was headed to the White House to brief President Trump on where the Healthcare legislation currently stands.  And, in an exact repeat of the mass confusion that dominated the press yesterday, headlines continue to be completely contradictory and only serve to further the chaos.

On the one side, Bloomberg is reporting that GOP leaders are not confident they have the votes with one House aide even admitted that Republican discussions have morphed from trying to whip votes to trying to figure out what to do after the bill fails.



And Rep. Gohmert tweeted there’s a “good chance vote may be postponed.”

Good chance vote may be postponed. Leadership hiding likely more NON-Freedom Caucus No votes than Freedom Caucus No votes.


That said, Reuters subsequently released a statement from Rep. Mullin
saying that things are looking up for the late afternoon healthcare


Meanwhile, The Hill’s latest whip list suggests that the number of Republican ‘no’ votes is actually growing rather than shrinking and currently stands at 34.

In reality, despite all the jawboning, we suspect that no one will really know how this thing is going play out until the votes are counted later today.

* * *

Update 2:The House has just passed a procedural vote by a margin of 230 – 194 which now clears the path for 4 hours of floor debate on the healthcare bill which will be followed by a vote later this afternoon on the legislation.  Update per The Hill:

Six Republicans voted against the rule, an unusually high number. Lawmakers typically do not break ranks on procedural votes, which are viewed as a referendum on how leadership is managing the floor.


Among the Republicans who voted against the rule were Reps. Justin Amash (Mich.), Thomas Massie (Ky.) and Walter Jones (N.C.). All three voted Thursday night against invoking what is known as “martial law” rule to speed the legislation to the floor.


Lawmakers typically stick with their party on the rules votes even if they plan to vote against the underlying legislation.


The rule stipulates that floor debate on the healthcare legislation will last four hours, with time equally divided between Republicans and Democrats.


That sets up a likely vote around 4 p.m. or 5 p.m.


Ryan pulls the Health bill:

(courtesy zero hedge)

Watch Live: Paul Ryan Explains Why He Pulled The Health Bill

Following two days of utter chaos in Washington D.C., the Republicans in the House have finally called it quits and laid to rest, at least for now, efforts to repeal and replace Obamacare.  The bill was pulled shortly before voting was set to begin at 3:45PM EST.


BREAKING: Trump suggested pulling House healthcare bill and House Speaker Ryan has agreed – networks. 

Photo published for Live: U.S. Politics

Live: U.S. Politics

Live U.S. political coverage of President Donald Trump’s first 100 days in office.

After a last ditch effort by Paul Ryan and Mike Pence to rally support from conservative members of the House and save the bill, at the end of the day, they simply didn’t have the votes.

Tune in below to watch a dejected Paul Ryan take questions from the press:



Summary of the withdrawal of the Healthcare bill:


In Blow To Trump, Obamacare Repeal Fails: Republicans Withdraw Healthcare Bill

To summarize today’s latest Congressional rollercoaster, the pundits and the White House were wrong, and the online betting markets were right.

Following a day of drama in Congress yesterday, Friday was another nail-biter until the last moment, and after Trump’s Thursday ultimatum failed to yield more “yes” votes, the embattled bill seeking to replace major parts of Obamacare was yanked Friday from the floor of the House.

As a result, Trump suffered a second consecutive blow as opposition from within his own party forced Republican leaders to cancel a vote on healthcare reform for the second time, casting doubt on the president’s ability to deliver on other priorities.

The withdrawal pointed to Trump’s failure to charm republicans in the last minute, raising questions about whether he could unify Republicans behind his pro-growth legislative goals of tax reform and infrastructure spending.

NBC News reported that the President Donald Trump asked House Speaker Paul Ryan, R-Wisc., to pull the bill. A source told NBC that Ryan during visit to Trump at the White House earlier Friday afternoon had “pleaded to pull” the bill after telling the president that the GOP leaders had failed to convince enough House Republicans to support the bill.

Trump personally told Washington Post reporter Robert Costa about the move to avoid an embarrassing loss in the House during a phone call, Costa tweeted. “We just pulled it,” Trump reportedly said to Costa.

President Trump just called me. Still on phone.
“We just pulled it,” he tells me.

A large number of GOP House members had declared their opposition to the bill since Thursday night. It was the second time in less than 30 hours that Republicans postponed a scheduled House vote on the American Health Care Act. Republicans could afford to lose at most 22 members of their caucus in the vote. But as of Friday afternoon, there were 34 GOP House member publicly opposing the bill.

Ryan visited Donald Trump at the White House at around 1 p.m. to inform him of the shortfall in support.

The second delay was another humiliating setback for GOP leaders and Trump, who had thrown his weight behind the bill.

Trump on Thursday night demanded that the House vote on the plan on Friday, and said he would not agree to change the bill further than he already had in an effort to persuade wavering Republicans to back it.

Shortly after the president drew that line in the sand, GOP leaders amended the bill further to allow states, as opposed to the federal government, to mandate what essential health benefits have to be part of all insurance plans.

But as was the case on Thursday, GOP leaders knew Friday that if the vote occurred as scheduled, the bill would be defeated. The problem those leaders face is not from Democrats, who hold a minority of 193 seats in the House, and who were all expected to vote against the bill.

Ultimately, and this may be the real take home message, the Freedom Caucus demonstrated it is more powerful than Trump as of this moment. Which, incidentally, means it is time to start getting very nervous about the upcoming debt ceiling negotiation, in which the Freedom Caucus will likely get its way.

Finally, with over half a trillion in budget cuts now out of the picture, Trump may be able to proceed to his tax reform, but he will have about $500 billion in potential tax cuts to work with now that repeal of Obamacare is indefinitely delayed.

As for the humiliated Paul Ryan, he just wants to move on… for obvious reasons.


Here is why today’s debacle will make tax reform less likely exactly what David Stockman predicted:

(courtesy zerohedge)

Here Are The Reasons Why Today’s Republican Debacle Makes Tax Reform Less Likely

With Americans now “stuck with Obamacare for the foreseeable future“, attention shifts to Trump’s next agenda item: tax reform.

This was confirmed by none other than the President himself who moments ago said that “Republicans will probably work on tax reform now.” To be sure, following today’s embarrassing fiasco, Trump will be eager to move on to a law which will be easier to pass, and according to market consensus, tax reform is precisely that. Alas, consensus may once again be wrong.

Ignoring the fact that work on tax reform in earnest won’t start for 6-8 weeks as House Ways and Means member Merchant said moments ago, and may not even take place until fiscal 2018 (after August), the reality is that since Obamacare and tax reform are both parts of the Reconciliation process, as a result of not freeing up hundreds of billions from the deficit that the CBO estimated repealing Obamacare would do, it means that Trump’s tax cuts have been hobbled – by as much as $500 billion – before even starting.

Furthermore, with the Freedom Caucus flexing its muscle and openly defying Trump, another major headache for Trump’s tax reform is that the Bordere Adjustment Tax – an aspect of the reform that the Caucus has been vocally against – is likely off the table. And since BAT was expected to generate over $1 trillion in government revenues, it means that a matched amount in tax cuts is also now off the table.

In summary, between Obamacare repeal and BAT being scrapped, roughly $1.5 trillion in budget “buffers” are wiped out.

And yet, when news hit that Obamacare repeal has failed, stocks surged, arguably on traders’ belief that this will accelerate tax reform. Alas, in addition to the above, Axios lists another four reasons why today’s healthcare debacle spells trouble for tax reform.

  • We now know that Congressional Republicans are willing to buck Trump and leadership on big-ticket legislative items.
  • Republicans will need to keep working on healthcare reform, even though Trump says that he’s done with it. They’ve campaigned for years on killing Obamacare, and can’t head into the mid-terms without giving it another go. Particularly when they keep insisting that the current scheme is collapsing?
  • CBO said that the Republican healthcare bill would shrink long-term budget deficits by hundreds of billions of dollars. Without it, filling the tax revenue hole becomes harder.
  • Sean Spicer today said repeatedly that Trump had talked to “everyone” and listened to “all” ideas, which reflects zero consideration of Congressional Democrats. If such sentiment persists ? it just raises the degree of difficulty for tax reform, particularly if the White House doesn’t change its position on keeping corporate tax reform tied to personal tax reform.

Finally, here is Goldman’s timeline: “Our current expectation is that tax reform will be enacted in Q4 2017, with a clear risk that it slips to early 2018.”

If today’s events are any indication, don’t hold your breath for a law being concluded this calendar year



And now the last word on today’s debacle courtesy of David Stockman of Daily Reckoning/ContraCorner)

It’s All Over Except the Shouting

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


It’s all over except the shouting, and I’m not talking just about Ryan’s “repeal and replace” washout.

I mean the whole fantasy of the Trump Reflation trade and Wall Street’s delusional view that the massive financial bubble now enveloping the casino can be kept afloat indefinitely because Washington will always come through with whatever “stimulus” it takes.

The idea that there is an actual working GOP majority and that some pro-growth policy juggernaut is coming down the pike has always been a case of the wish being father to the thought.

After all, the present day Republican party is such a fragmented gang of factions that it couldn’t even nominate a presidential candidate. What remains of the party got mugged by a rank amateur and insurrectionist.

He won only because Flyover America is desperate economically; but the Donald offered no coherent program at all.

Among other things, that’s why today’s non-vote came down to the wire at all. The campaign was all noisy demands for “repeal,” but hardly more than a few random tweets about “replace.”

So there is no GOP consensus or public mandate at all about the hard part of replacing Obamacare. Trump himself had no ideas except eliminating interstate barriers to insurance sales, but that assumes there are customers.

There are not. Roughly 275 million people are hostage to Medicare, Medicaid and employer group plans, which alone include about 160 million beneficiaries.

But those are giant pre-payment pools where insurance competition doesn’t matter; coverage structures are rigidly “one size fits all” within each of the big pools; and, perhaps most importantly, what passes for the health care “market” is just a bureaucratic clearing house where provider cartels attempt to maximize their billings — while insurance companies, HMOs, PPOs and utilization review and pre-approval agencies seek to minimize what they certify for payment.

Under those status quo arrangements, there is absolutely no way to get what most of the GOP professes to want, especially the conservatives.

Namely, lower insurance premiums, reduced entitlement program costs, greater delivery system innovation and flexibility and more consumer empowerment and choice.

Those good things can only happen when a meaningful share of the above-mentioned 275 million participants are liberated from the inherent collectivism of third-party payment pools and, instead, are given the cash equivalent to shop the hell out of the medical service delivery and insurance coverage system.

Then “competition” would be electrified, thousands of differentiated health plans would bloom and pricing would become individual cost-based.

Then too, the relief from soaring Obamacare premiums that the Freedom Caucus demands could be actually achieved because the dynamics of the underlying system would be fundamentally altered.

That is, there would be capitalism for providers and consumers alike — not the de facto socialism for the latter which is the structural driver of the current disastrous system.

But none of this is even on the table.

This means that whatever adjustments finally emerge from the push and pull within the GOP caucus, the resulting bill will still be inherently Obamacare Lite.

Indeed, what has happened during the last few days of bargaining is that the House bill was moved a few notches rightward. It became Obamacare Ultra-Lite, but it would not actually achieve any of the objectives sought by the Freedom Caucus.

In this context, the very best outcome for Speaker Ryan and the White House would have been that they tortured enough elbows to win Obamacare Ultra-Lite by one or two votes.

But they pulled it altogether because the votes just weren’t there.

The bill wasn’t defeated outright — but let’s just call it a defeat for Trump.

Normally, at this stage of the game, the majority party and Speaker ordinarily would have arrived at a third alternative, which is to pull the bill and rework it until they have a margin of safety on the roll call.

But the great deal-maker in the Oval Office elected to roll the dice, demanding an up-or-down on vote today (Friday) whether the whip count is there or not.

The Donald’s ultimatum surely represented the height of folly.

In any event, even if the the bill passed, it still had to make its way past Senate GOP moderates like Susan Collins (Maine), Rob Portman (Ohio) and Lisa Murkowski (Alaska), to name a few, all have the same complaints as the House moderates.

That means, in turn, that all the 11th hour concessions to the Freedom Caucus would have been stripped out in the Senate in order to obtain 50 votes plus Pence.

Even then, it would have taken weeks of maneuver in the Senate and then a prolonged conference committee resolution process to get a compromise that had any chance whatsoever of passing muster in the House.

The idea that all of this can still happen, if it happens at all, before Memorial Day or even July 4th is a pipe dream — and not only because of the substantive difficulty of parsing what amount to trivial differences.

The implications are straightforward. Whether the bill failed today or somehow passes, the silly idea that there is a monolithic, effective GOP majority will soon be put to rest.

And the notion that the Donald is some kind of brilliant deal-maker will be replaced by the reality that he’s an impetuous, undisciplined, naïve amateur that most of the Imperial City already detests and is looking for every opportunity to take down.

And that gets to an even more important implication of this week’s gong show.

The lack of policy substance and political consensus within the GOP about the “replace” component of Obamacare will be revisited in spades when it comes to the tax cut and fiscal agenda.

In a word, the debt ceiling is now frozen, the built-in structural deficit is running at nearly $1 trillion per year, and there can be no tax reform without FY 2018 budget resolution and reconciliation.

Here’s the thing.

To get the mandatory 10-year budget resolution and layer on top of that the big Trump corporate and individual tax cuts imagined by Wall Street will require 218 House GOP votes (there is no longer a snowball’s chance of that because they have declared war on the Donald) for a minimum of $12 trillion of new deficits and a $30 trillion public debt by 2027.

It won’t happen. Not in a million years.

As I said, it all over except the shouting. It’s also another good opportunity to get out of the casino.

George W. Bush wasn’t right about much, but he was spot on — albeit 9 years early, as it turns out — when he famously said “this sucker is coming down.”

Truer words were never spoken.


David Stockman
for The Daily Reckoning


This will be explosive:  the NSA is provide “smoking gun” proof that Obama spied on Trump during the 2016 election

(courtesy zero hedge)

NSA To Provide “Smoking Gun” Proof Obama Spied On Trump

Yesterday, Republican Devin Nunez Nunes held an explosive press conference outside the White House in which he told reporters that communications from the Trump team were picked up and disseminated within the government during the 2016 campaign.

Not surprisingly, the comments ruffled some liberal feathers and the mainstream media launched an immediate smear campaign calling for Nunes to resign his post immediately.

Now, according to Fox News sources, congressional investigators expect that a potential “smoking gun” from the NSA establishing that the Obama administration spied on the Trump transition team, and possibly the president-elect himself, will be produced to the House Intelligence Committee as early as tomorrow.

The intelligence is said to leave no doubt the Obama administration, in its closing days, was using the cover of legitimate surveillance on foreign targets to spy on President-elect Trump, according to sources.


The FBI hasn’t been responsive to the House Intelligence Committee’s request for documents, but the National Security Agency is expected to produce documents to the committee by Friday. The NSA document production is expected to produce more intelligence than Nunes has so far seen or described – including what one source described as a potential “smoking gun” establishing the spying.


Classified intelligence showing incidental collection of Trump team communications, purportedly seen by committee Chairman Devin Nunes, R-Calif., and described by him in vague terms at a bombshell Wednesday afternoon news conference, came from multiple sources, Capitol Hill sources told Fox News. The intelligence corroborated information about surveillance of the Trump team that was known to Nunes, sources said, even before President Trump accused his predecessor of having wiretappedhim in a series of now-infamous tweets posted on March 4.


The key to that conclusion is the unmasking of selected U.S. persons whose names appeared in the intelligence, the sources said, adding that the paper trail leaves no other plausible purpose for the unmasking other than to damage the incoming Trump administration.

Because Nunes’s intelligence came from multiple sources during a span of several weeks, and he has not shared the actual materials with his committee colleagues, he will be the only member of the panel in a position to know whether the NSA has turned over some or all of the intelligence he is citing.

If true, of course, this could put a ‘slight’ taint Obama’s claim of a “scandal free” eight years in the White House.

* * *

For those who missed it, here was Nunes’s press conference from yesterday:

The FBI is not cooperating with the House of Representatives’ investigation into the NSA’s surveillance of the Trump campaign during the 2016 election, the chairman of the U.S. House Permanent Select Committee, Devin Nunes said in a press conference on Wednesday afternoon.

In the aftermath of today’s most stunning news report, namely the confirmation that Trump may have been right all along following the admission of House Intel Committee Chair Devin Nunes that the communications of Trump’s aides and the president himself had been “incidentally” monitored, Nunes held an explosive press conference outside the White House in which told reporters that communications from the Trump team were picked up and disseminated within the government during the 2016 campaign. Nunes said sources within the intelligence community presented him with the information. He spoke to the press after briefing the administration.

Nunes said that he had briefed the president about his concerns over the “incidental” collection of data, adding that the president “needs to know” that these intel reports exist, and adding ominously that “some of what I’ve seen seems to be inappropriate.

Nunes also said that Trump, others in the transition team were put into the intelligence report and asked if Trump should be in these “normal” reports.

But what was perhaps most troubling in Nunes presser is that in the aftermath of Monday’s Congressional hearing with James Comey in which the FBI director said on the record there had been no surveillance of Trump, is the House Intel Commission chair’s statement that the FBI is not cooperating with the investigation.

“We don’t actually know yet officially what happened to General Flynn,” Nunes said of how communications from Gen. Flynn’s calls were leaked to the press. “We just know that his name leaked out but we don’t know how it was picked up yet. That was one of the things that we asked for in the March 15th letter, was for the NSA, CIA, and FBI to get us all the unmasking that was done.”

“And I’ll tell you, NSA is being cooperative,” Nunes continued, “but so far the FBI has not told us whether or not they’re going to respond to our March 15th letter, which is now a couple of weeks old.”

Nunes also reported that as of now, he “cannot rule out” President Obama ordering the surveillance.

Finally, and contrary to earlier media reports, Nunes clarified that the surveillance was not related to the FBI’s investigation into possible collusion with Russia. This surveillance, he emphasized to reporters, does not “have anything to do with Russia.” As a reminder, this has been the strawman argument proposed by much of the liberal media, which has said that a wiretapping of Trump or his aides, would only confirm that his relations with Russia were suspect and thus prompted a FISA warrant.

If Nunes is correct, and Trump was being wiretapped for reasons having nothing to do with Russia, that entire narrative falls apart, and the press will now have to spend the next few weeks building up an entirely new narrative to “justify” why Trump was being wiretapped on Obama’s watch


Nunes calls in Comey and Rogers for a closed session after he states that the intel is very concerning to him:

(courtesy zerohedge)

Nunes Calls Comey, Rogers For “Closed Session” After Finding “Concerning Info” In Intel Reports

Last night we highlighted a Fox News story which suggested that Devin Nunes expected the NSA to deliver a “smoking gun” which would prove that the Obama administration spied on the Trump transition team, and possibly the president-elect himself, as early as today.

Moments ago, Nunes fanned that speculation by holding an impromptu press conference announcing that he’ll call both FBI Director Comey and NSA Director Rogers before a closed session of the House Intelligence Committee to discuss topics which “they couldn’t answer in a public setting.”

Here is Nunes’s statement:

BREAKING: House Intelligence Committee chair Nunes says Trump’s former campaign chairman has volunteered to be interviewed by the committee.


And some early takeaways:

.@DevinNunes: “There are just questions that we have for Dir. Comey and Adm. Rogers probably that they couldn’t answer in a public setting.”

.@DevinNunes: “The Committee will ask Dir. Comey & Adm. Rogers to appear in closed section.”


Nunes continues to decline requests from the press to reveal his sources…

.@DevinNunes: “I’m still not going to tell you who our sources are.”


But did confirm there was “no wiretapping of Trump Tower; That didn’t happen”

.@DevinNunes: “There was no wiretapping of Trump Tower; that didn’t happen.”


Meanwhile, proving that Nunes may actually be on to something here, WaPo has quickly called for an immediate investigation into his behavior.


OH OH!! something is up!!

FBI director Comey unexpectedly is called to the White House

(courtesy zero hedge)


FBI Director Comey Unexpectedly Shows Up At The White House

Update: as Reuters’ Steve Holland reports, the reason Comey is at the White House is for “a routine interagency meeting,” per WH official.

Re FBI’s Comey at the White House: “He is here for a routine interagency meeting,” per WH official.


* * *

FBI Director James Comey is at the White House, @ABC confirms. No answer from FBI or WH as to why.

WH tells @ABC that Comey is there for “a routine interagency meeting”

And as CNBC adds, around 3pm ET, Comey departed the White House after his unannounced visit.

* * *

ABC’s Jennfier Hasler reports that FBI Director James Comey is at The White House and has had no response from either The FBI or White House as to why..

Video: FBI director Comey just left the White House. (He’s the tallest guy in the shot)



.@FBI Director Comey has been here at White House for past 30 minutes or so per @JaxAlemany. Unclear who he is meeting with now.


Interesting timing no doubt after Nunes’ press conference this morning

The lack of a leak investigation is quite concerning. We need to make sure that these leaks are being tracked down…There are just questions that we have for Dir. Comey and Adm. Rogers probably that they couldn’t answer in a public setting…”

What happens next?


Trump wins as a Virginia Judge correctly refuses to block the revised travel ban

(courtesy zero hedge)

Trump Wins: Virginia Judge Refuses To Block Revised Travel Ban

On a day when all eyes are on Washington and the healthcare vote, President Trump just won an important victory as a Virginia judge refused to block his revised travel ban against six predominantly Muslim countries (even though, as Bloomberg reports, the directive remains on hold because of court orders in two other states).

U.S. District Judge Anthony Trenga on Friday denied a request by Muslim activists for a temporary restraining order, who said Trump’s revised March 6 executive order — like the original before it — was a disguised “Muslim ban” that discriminated against immigrants based on their religion. The Virginia case was brought by Linda Sarsour, a well-known Muslim activist from Brooklyn, New York, and national co-chair of the Women’s March on Washington that took place the day after Trump’s inauguration. The suit was the first that sought to use Trump’s recent public remarks against him court, in addition to his comments about Muslims during the campaign. As Bloomberg reports,

At a hearing in Alexandria on March 21, the government’s lawyer, Dennis Barghaan, said another ruling blocking the executive order wasn’t warranted because of the injunctions issued in Hawaii and Maryland. But Gadeir Abbas, an attorney for the plaintiffs, said his clients are still being harmed because “the status of the other orders isn’t durable, and they could be reversed at any time.”


Abbas pointed to Trump’s remarks at the rally, saying they showed the president’s real motive is a bias against Islam. That would violate the Constitution’s Establishment Clause, which prohibits any government preference for one religion over another.


“President Trump, hours after Hawaii enjoined the executive order, said three times in 10 minutes, in front of thousands of people and with television cameras pointed in his face, that the new executive order is a watered down version of the first,” which courts had said unfairly targeted Muslims, Abbas said.

The ruling by Trenga in Alexandria bolsters the administration’s efforts to overturn a block on his executive order issued last week by judges in Maryland and Hawaii.

Notably, AP reports that the FBI says authorities are aware that the federal judge in Hawaii who ruled against President Donald Trump’s travel ban has received threatening messages.

FBI spokeswoman Michele Ernst said Thursday the agency is aware of reports of threatening messages against U.S. District Judge Derrick Watson and is prepared to help if necessary.


Watson blocked the federal government from enforcing its ban on new visas for people from six mostly Muslim countries and its suspension of the nation’s refugee program. He issued his ruling last week hours before the travel ban was to go into effect.


The U.S. Marshals Service is responsible for protecting federal judicial officials, including judges and prosecutors. The service says marshals don’t discuss specific security measures but does provide additional protection when warranted.

While Judge Trenga’s decision won’t have any immediate effect, it is certain to be cited by administration lawyers as the cases move toward the U.S. Supreme Court.

More to follow…



Hard data core durable goods shows that growth is very slow and the capital goods also declined:

(courtesy zero hedge)

More ‘Hard’ Data Disappointment: Core Durable Goods Order Growth Slows, Capital Goods Decline

Core Durable Goods Orders have risen YoY for 3 straight months (after 21 months of decline) but February saw growth slow dramatically (from 4.0% to 2.5%) as the 0.4% MoM gain missed expectations.

Note the peak growth in each of the cycles since the financial crisis has been slowing (red line).

Even more concerning is Capital Goods New Orders (non-defense, ex-aircraft) declined 0.1% MoM – the first drop since September.


Another disappointing ‘hard’ data print…



Even soft data USA services PMI, Manufacturing PMI’s both plunge to 6 month lows:

(courtesy zero hedge)

‘Soft’ Data Slammed: US Services, Manufacturing PMIs Plunge To 6-Month Lows

Following Europe’s surging PMIs (to six year highs), US data was extremely disappointing. Both Services and Manufacturing PMI disappointed, tumbling to the lowest levels since before the election. Simply put, the ‘soft’ data is converging back lower to the dismal reality of the ‘hard’ data.


Hope is hot in Europe…


And not in USA…


As Output slows dramatically..

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

The US economy shifted down a gear in March. A slowing in the pace of growth signalled by the PMI surveys for a second straight month suggests that the economy is struggling to sustain momentum. The survey readings are consistent with annualized GDP growth of 1.7% in the first quarter, down from 1.9% in the final quarter of last year.


The employment readings from the survey have also deteriorated, suggesting private sector hiring is running at a reduced rate of around 120,000 per month.


Inflows of new business have moderated in both manufacturing and services, the latter seeing the most worrying slowing. Backlogs of work are also starting to fall again – something which is commonly followed by firms cutting back on their hiring.


“Business confidence ticked higher in March, however, providing some brighter news on the outlook and a glimmer of hope that the growth trend will pick up again in the second quarter.”

The bottom line is that ‘animal spirits’ are fading fast.


the Fed continually claims that inflation is tiny. In reality it is rearing its ugly head.

Inflation is embedded in financial assets

(courtesy zero hedge)

Dear Fed: This Is Where The Inflation You Are Looking For Is “Hiding”

The Fed’s most recurring lament over the past 8 years, ever since the Financial crisis, is that there has been no measurable inflation in the US economy when using such conventional indicators as CPI, even though according to recent measurements by PriceStats real inflation, not the BLS’ seasonally-adjusted, goalseeked and politically convenient  mutant, is now running at a blistering 3.6%, the highest in five years.


That however has not stopped Fed members such as Williams to declare idiotically that since there is “no inflation”, it is the Fed’s duty to run policy “too hot” to spur inflation:


Unfortunately, since the Fed – which several years ago canceled tracking M3 because “it was too expensive” – can not afford to buy a subscription to a service such as PriceStats, here is a simple answer where all that runaway inflation the Fed has created since the financial crisis courtesy of trillions and trillions in central bank liquidity, has ended up. Even better, the answer comes from the Fed’s favorite FDIC-backed hedge fund: Goldman Sachs.

To wit:

This has been no ordinary bull market. Set in the context of the Global Financial Crisis, and despite the many ongoing concerns around political events and secular stagnation (and at times fears of deflation), equities have achieved phenomenal returns by any standards. As we have long discussed, much of this has reflected the impact of the very policies employed to prevent a deflationary trap in the aftermath of the Great Recession of 2009. Central banks moved rapidly to cut interest rates to record low levels and, before long, supplemented this with extraordinary monetary policies including QE. The results were clear to see: while consumer prices (and other measures of inflation in the real economy) were disinflating, the generous policies of the central banks resulted in rapid inflation of financial asset prices (Exhibit 1).


The impact of QE has been felt across the financial landscape; rather unusually in an economic recovery (since the recession of 2009), bond markets also have enjoyed extraordinary returns alongside equities. Much of this can be explained by monetary policy and QE influences together with global disinflationary forces.

And while the clueless economists of the Fed and other central banks keep focusing on the right part of the chart, especially the “US Wages” bar, where their policies have unleashed asset bubbles is on the left, in places like European and US High Yield, and of course the S&P500.

So the next time, clueless hacks such as Williams or Dudley, whose only goal in life is to make products and service for ordinary Americans cost far more than they do now, lament the lack of inflation, please show them this chart from Goldman, and advise them that in order to stimulate “real economic” inflation, they will first have to burst the hyperinflation in “asset prices.” Something tells us the commercial banks that own the Fed (recall “Bernanke’s Former Advisor: “People Would Be Stunned To Know The Extent To Which The Fed Is Privately Owned“) may not find that trade off particularly enjoyable.


Let us close the week out with this offering from Greg Hunterof uSAWatchdog

(courtesy Greg Hunter/USAWatchdog)

Spying Lying Exposed-Trump Proven Right, Economy Tanking, North Korea Update

By Greg Hunter’s (3.24.17 WNW 277)

Donald Trump was mocked by the mainstream media (MSM) for saying Obama “wiretapped” or spied on Trump and his top advisors. This week, Trump was proven 100% correct when information came out that President-elect Trump and his transition team were, in fact, wrapped up in government surveillance.  Information was illegally leaked to the press, and identities were illegally “unmasked” to discredit and embarrass the incoming President and his team.  This makes Watergate look like a squirt gun fight, and this investigation is now set to reveal “smoking gun” proof that the Obama Administration was involved in illegal activity.  This investigation is far from over and could directly implicate former President Obama.

Sears is in financial trouble, and is reportedly having trouble finding the money to keep its shelves stocked with merchandise. Sears, once the largest retailer in America, is saying that it could even be filing for bankruptcy within the year.  This is only the latest problem that has surfaced in the retail sector.  Macy’s and JCPenney have also recently reported financial problems that have forced store closings.  Nearly two dozen other national retailers are reportedly in financial trouble.

North Korea has announced it will “launch another nuclear test in the next few days.” It recently had a failed rocket test, and there are growing concerns with Japan and South Korea about threats North Korea is making.  Just a few weeks ago, it fired several missiles in a mock attack on Japan.  The missiles fell harmlessly into the Sea of Japan, but it still upset Japan enough to make threats of a preemptive first strike against the communist nation.  Secretary of State Rex Tillerson says “all options are on the table” in future dealings with North Korea.

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

After the Wrap-Up:

Economist John Williams of will be the guest on the “Early Sunday Release.” Williams says President Trump has a short amount of time to get the economy going.


(To Donate to Click Here)

Well that about does it for this week

I will see you Monday night


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