March 28/Raid on gold and silver in the access market after options expiry on the comex/Turkey’s top bankers arrested in the USA for conspiring to evade Iranian sanctions/

Gold: $1255.30  DOWN $0.10

Silver: $18.22  UP 14  cents

Closing access prices:

Gold $1251.80

silver: $18.20!!!  ???










Premium of Shanghai 2nd fix/NY:$14.86


LONDON FIRST GOLD FIX:  5:30 am est  1253.65




For comex gold:



For silver:

For silver: MARCH


Total number of notices filed so far this month: 3825 for 19,125,000 oz


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

The comex options expired today, 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 A HEALTHY 5422 contracts UP to 198,081  with the STRONG RISE IN PRICE ( 36 CENTS) WITH RESPECT TO YESTERDAY’S TRADING. THE HEDGE FUNDS (MANAGED MONEY) CONTINUES TO SLOWLY ADD TO THEIR POSITIONS WITH THE BANKERS TRYING TO COVER THEIR EVER BURGEONING SHORTS (OVER 555 MILLION OZ). In ounces, the OI is still represented by just less THAN 1 BILLION oz i.e.  0.990 BILLION TO BE EXACT or 141% of annual global silver production (ex Russia & ex China).



we had 51 notice(s) filed upon for 5100 oz of gold.


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


We had a big change in tonnes of gold at the GLD: a deposit of 2.67 tonnes into the GLD

Inventory rests tonight: 835.29 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 5,422 contracts UP TO  to 198,081 AS SILVER WAS UP 36 CENT(S) with YESTERDAY’S trading. The gold open interest ROSE BY 9380 contracts UP to 472,405 WITH THE RISE IN THE PRICE OF GOLD OF $7.20  (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



i)Late  MONDAY night/TUESDAY morning: Shanghai closed DOWN 14.01 POINTS OR .43%/ /Hang Sang CLOSED UP 152.17 POINTS OR 0.63% . The Nikkei closed UP 217.28 OR 1.11% /Australia’s all ordinaires  CLOSED UP 1.23%/Chinese yuan (ONSHORE) closed DOWN at 6.8853/Oil ROSE to 48/13 dollars per barrel for WTI and 51/15 for Brent. Stocks in Europe ALL IN THE GREEN EXCEPT PARIS    ..Offshore yuan trades  6.8663 yuan to the dollar vs 6.8853 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN WEAKER BUT  THE OFFSHORE YUAN  IS MUCH WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS SATISFIED WITH WASHINGTON’S RESPONSE




none today


The province of Herbei promised last year to cut production of steel by 8 million tonnes. Governor Zhang lied and instead of cutting they increased production.  The world believed that the Chinese would cut production and that is the reason that iron ore rose in price. They were wrong and now iron ore tumbles

( zero hedge)



Scotland votes to have a second referendum in a vote of 69 in favour and 59 against

( zero hedge)


Conflicting stories as a Chinese man was shot dead in Paris by police.  It is sparking a riot as well as causing Beijing to protest:

(courtesy zero hedge)



Popcorn anyone?  Turkey’s top banker, CEO of Turkey’s largest state owned banks was arrested this afternoon on charges that he conspired with another famous Iranian Turkish financier (Reza Zarrab) to bypass Iranian sanctions.  You will recall that this is the same Zarrab that was involved in the laundering of gold (money) from Iran into Turkey.  Iran sold oil and was paid in gold.  The gold came from Dubai.

Since Erdogan profited handsomely form this latest deal, I can assure you that all hell is going to break lose  (e.g. migrants let loose?)

(courtesy zero hedge)



The Rand tumbles after Zuma states that he will fire the finance minister Gordhan

( zero hedge)


i)An excellent commentary on what will drive oil prices this summer

( Rizvia/Oil

ii)Oil tumbles after a lower than expected drawdown

( zero hedge)



i)The Shanghai gold exchange is claiming 70% of annual global production

( Bullionstar/Ronan Manly)

ii)The following illustrates what happens once we enter the option expiry week and how central banks sell contracts to control gold’s rise.

( James turk/Kingworldnews)

iii)House Committee passes a bill to “audit” the Fed.  It now goes to  the entire house for a vote and then onto the Senate where it will have a tougher time.

( zero hedge)


( David Stockman/Daily Reckoning)

ii)A little fuel for our democrats as Trump’s son in law , Jared Kushner met key personnel of the state owned Russian bank VEB

( zero hedge)

iii)As David Stockman writes:  Trump and Ryan are deeply divided over tax cuts which can never happen.  Also remember that we have reached the debt ceiling and there will be certain clashes as to how to raise the ceiling;

( zero hedge)

iv)Trump asks why the Intelligence Committee is not probing the Clintons?

( zerohedge)

( zero hedge)

vi)  a.It seems that the Intel Committee is divided:  they just cancelled all meetings for the week;

( zero hedge)

vi b Nunes still refuses to share intelligence source with other members of his committee. However he did state that he will give the details of what he found to them by the end of the week

(courtesy zero hedge)

(courtesy zerohedge)

vii b/ Wow!! this is something!! Gallup has now come out and stated that the consumer confidence in the USA is in shambles and did not grow as indicated above by the Conference board!

(Gallup/zero hedge)

viii)Another joke:

Richmond Fed mgf survey (soft data) beats by 6 sigma ( 6 std deviations)

( zero hedge)

x)It looks like the snowflakes will be out again.  Trump’s new executive order will kill  Obama’s climate change initiatives

( zero hedge)

xi)It seems that traders and just about everybody in the uSA seems to forget that exactly one month from today, the USA has a real problem when the continuing resolution runs out on April 28 and all the Government shuts down

( zero hedge)

xii)Good reason for the NY stock market to rise today:  NY retail vacancies are soaring and this is causing massive rent concessions:

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY A STRONG 9,380 CONTRACTS UP to an OI level of 472,405 WITH THE  RISE IN THE  PRICE OF GOLD ( $7.20 with FRIDAY’S trading). THE BANKERS SUPPLIED ALL THE NECESSARY CONTRACTS SHORT TO OUR NEWBIE LONGS WHO CONTINUE TO PILE INTO GOLD ON THE LONG SIDE.  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 53 contract(s) RISING TO  70. We had 0 contact(s) served YESTERDAY, so we gained 53 gold contracts or an additional 5300 oz will stand for delivery in this non active delivery month of March. The next active contract month is April and here we saw it’s OI LOST 22,392 contracts DOWN TO 123,905 contracts.

For comparison purposes, the April 2016 contract at this time had an OI of 125,328 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 108 contract(s) and thus its OI is 1586 contracts. The next big active month is June and here the OI ROSE by 23,397 contracts up to 238,996.

We had 51 notice(s) filed upon today for 5100 oz

 And now for the wild silver comex results.  Total silver OI ROSE BY 5422 contracts FROM 192,659 up to 198,081 WITH YESTERDAY’S 36 CENT GAIN.  THE BANKERS SUPPLIED THE NECESSARY CONTRACTS TO OUR HEDGE FUND LONGS WHO CONTINUE TO PILE INTO SILVER ON THE LONG SIDE.  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 ONLY 26,000 CONTRACTS AWAY FROM RECORD HIGHS IN OI AND YET WE ARE $2.40 BELOW THE PRICE OF $20.44 WHEN THAT RECORD WAS SET.

We are in the active delivery month is March and here the OI decreased by 149 contracts down to 147 contracts. We had 149 notices served yesterday so we neither gained nor lost any silver contracts (oz) that 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 LOST 2 contract(s) to 950 contracts. The next active contract month is May and here the open interest GAINED 2265 contracts UP to 146,896 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 30 notice(s) filed for 150,000 oz for the MARCH 2017 contract.

VOLUMES: for the gold comex

Today the estimated volume was 114.942  contracts which is poor.

Yesterday’s confirmed volume was 325,699 contracts  which is excellent.

volumes on gold are getting higher!

INITIAL standings for MARCH
 March 28/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 nil oz
Deposits to the Dealer Inventory in oz 5099.765 oz


Deposits to the Customer Inventory, in oz 
 63,724.990 oz
No of oz served (contracts) today
51 notice(s)
5100 oz
No of oz to be served (notices)
19 contracts
1900 oz
Total monthly oz gold served (contracts) so far this month
133 notices
13300 oz
0.4136 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 122,843.3 oz
Today we HAD 0 kilobar transaction(s)/
Today we had 1 deposit(s) into the dealer:
 i) Into Brinks:  5099.765 oz
total dealer deposits: 5099.765 oz
We had nil dealer withdrawals:
total dealer withdrawals:  nil oz
we had 1  customer deposit(s):
 i) Into HSBC: 63,724.990 oz
total customer deposits; 63,724.990   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 51 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 (133) x 100 oz or 13,300 oz, to which we add the difference between the open interest for the front month of MARCH (70 contracts) minus the number of notices served upon today (51) 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 (133) x 100 oz  or ounces + {(70)OI for the front month  minus the number of  notices served upon today (51) x 100 oz which equals 15,200 oz standing in this non active delivery month of MARCH  (.4727 tonnes)
we gained 53 contracts or an additional 5300 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: 0.4727 tonnes
total for the 15 months;  244.703 tonnes
average 16.313 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 1022,342.417 or 31.799 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,973,809.785 or 279.12 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 279.12 tonnes for a  loss of 24  tonnes over that period.  Since August 8/2016 we have lost 75 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 28. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
20,120.000 oz
exact weight??
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 601,135.82 oz
No of oz served today (contracts)
(150,000 OZ)
No of oz to be served (notices)
17 contracts
(85,000  oz)
Total monthly oz silver served (contracts) 3825 contracts (19,125,000 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  4,636,893.7 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 1 customer withdrawal(s):
i) Out of HSBC:  20,120.000 oz     ????
 We had two deposits:
i) Into CNT:  973,300 oz
ii) Into Scotia: 600,162.52 oz
***deposits into JPMorgan have now STOPPED.
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
total customer deposits; 601,135.82   oz
 we had 1 adjustment(s)
i) out of HSBC:  5011.200 oz leaves the customer account and this lands into the dealer account of HSBC.
The total number of notices filed today for the MARCH. contract month is represented by 30 contract(s) for 150,000 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 3825 x 5,000 oz  = 19,125,000 oz to which we add the difference between the open interest for the front month of MAR (47) and the number of notices served upon today (30) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the March contract month:  3825(notices served so far)x 5000 oz  + OI for front month of Mar.( 47 ) -number of notices served upon today (30)x 5000 oz  equals  19,210,000 oz  of silver standing for the Mar contract month. This is  now average for an active delivery month in silver.  We neither lost nor gained any silver ounces standing in this active delivery month of March.
Volumes: for silver comex
Today the estimated volume was 28,158 which is fair
Yesterday’s  confirmed volume was 66,568 contracts  which is huge.
Total dealer silver:  41.276 million (close to record low inventory  
Total number of dealer and customer silver:   191.488 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.


And now the Gold inventory at the GLD

March 28/this is good!! A deposit of 2.67 tonnes of gold into the GLD/Inventory rests at 835.29 tonnes.

March 27/no changes in gold inventory at the GLD/Inventory rests at 832.62 tonnes

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

March 28 /2017/ Inventory rests tonight at 835.29 tonnes


Now the SLV Inventory
March 28/no changes in inventory at the SLV/Inventory rests at 332.504 million oz/
March 27/no changes in inventory at the SLV/Inventory rests at 332.504 million oz/
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/
March 28.2017: 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 6.2 percent to NAV usa funds and Negative 6.1% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.7%
Percentage of fund in silver:39.2%
cash .+0.1%( Mar 28/2017) 
2. Sprott silver fund (PSLV): Premium FALLS  to -48%!!!! NAV (Mar 28/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to – 0.48% to NAV  ( Mar 28/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -48% /Sprott physical gold trust is back into NEGATIVE 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 TUESDAY


Gold Bullion Coin Worth $4 Million, Stolen in Berlin Museum Heist

– Gold coin called ‘Million Dollar Gold Coin’ or ‘Big Maple Leaf’ stolen from Berlin museum early on Monday
– World’s purest gold coin and in the Guinness Book of Records for its purity of 99999 fine gold
– Gold coin was legal tender, investment grade, bullion coin and only 5 other coins were minted
– Other ‘Million Dollar Gold Coin’ is still available for sale by GoldCore safely stored in vaults in Ottawa

– Royal Canadian Mint minted the gold coin in 2007 and carries imprint of Queen Elizabeth II
– Like all bullion coins, is worth much more than its legal tender value
– Gold should be stored in secure vaults, in safe jurisdictions such as Singapore, Hong Kong and Zurich

When debating whether or not gold has value or not, the naysayers will often argue that it is a “pet rock” and just a shiny, heavy, cumbersome piece of yellow metal that has no “intrinsic” value.

Ignoring the fact that the majority of humanity still know that gold remains great valued. Even daring thieves realise the value of gold and will go to great lengths to get their hands on it.

Yesterday morning German police received a call from Berlin’s Bode Museum saying that one of the  ‘Big Maple Leaf’ coins had been stolen over the weekend.

  • Face Value: $1,000,000
  • Composition: 99999 fine gold
  • Weight (troy oz): 3,215
  • Weight (kg): 100
  • Coins in Existence Worldwide: 5
  • Coins Currently for Sale Worldwide: 1 (Now maybe 2)

Despite the massive size of the gold coin and huge weight  – it wasn’t too big for thieves and they were more than happy to relieve the Berlin musuem of one of the their prized possessions.

The museum houses one of the world’s largest coin collections, with about 102,000 coins from ancient Greece and about 50,000 Roman coins, so why did they single out this particular one?

World’s purest gold coin as “big as a tyre” and one of just seven

The gold coin, issued in 2007, by the Royal Canadian Mint is about as big as a tyre. The 53cm across and 3cm thick coin weighs nearly 100 kilos (221-pounds or 3,215 t.oz). It is made of 99.999% pure gold bullion and is this one of the purest gold coins according to the Guinness Book of Records.

Given the vast size and weight of the coin, this clearly was not an opportunistic theft. Reports state that the alarm system was circumnavigated and a ladder onto a nearby rail track was also found. It would want to be a very strong ladder !

Police shut down the local transport system in order to comb for clues. Whilst this is a crime and one that can never be condoned, it serves a great purpose in showing that gold remains greatly valued and highly coveted and perhaps more importantly of the vital importance of owning gold coins and bars in secure vaults in the safest jurisdictions.

They don’t want the coin

The coin is arguably a collector’s item, but it is unlikely that this is why it was stolen. Thieves had easy access to a 100kg of gold at the highly technical purity of 99.999%. When asked what the thieves would do with the coin, a police spokesman Die Welt: “Either they were hired to do it by someone who wanted to have the coin, but it’s more likely that it will be melted down.”

One of the many reasons we like gold as money is because of its divisibility. It can be melted down, broken into smaller parts. Those smaller parts retain the value of the gold it contains, unlike a diamond which is worth more as a whole rather than broken into fragments.

Gold can be broken up many times over, no matter it’s appearance, it will always be worth the same whether apart or melted into one bar or coin.

The coin with the poker face

The thieves may be keen to melt it down not just because it will make it easier to transport and resell, but because they know that it’s still worth something despite losing it’s current appearance. The face value of the Big Maple Leaf reads CAD 1 million, it is in reality worth around €3.7m, £3.2m or $4m given the value of the total gold content.

We recently wrote about how collectible gold coins should be likely avoided in the majority of situations due to their face value  (and later resale value) failing to reflect the underlying metal content or purchase price.

Some mints or private minting companies have a habit of churning out collector coin sets that commemorate certain events or series.

But this is where this gold coin bucks the trend. As explained above, the coin might have a face value of 1 million Canadian dollars, but in truth it is worth significantly more than that, and it has become more valuable (due to its gold content) since it was minted in 2010.

We’re used to the actual value of money not being what we’re told it is according to its face, but it’s rare that the real value exceeds that face value. The 100 kg of the purest minted gold, is worth several multiples of 1 million Canadian dollars legal tender, but the provenance of the coin also contributes significant value to it.

Will you get your hands on the ‘Million Dollar’ Big Maple Leaf?

There are legitimate ways to own the Big Maple Leaf, in fact there are four more versions of the coin excluding the one that is no doubt on it’s way to be melted down. However there is only one that is for sale.

A year ago GoldCore announced that we had been given the exclusive rights in the UK and Ireland, to sell one of the five Big Maple Leaf coins. It is the only one that is currently for sale, in the world.

As we explained at the time, owning one of the extremely rare Big Maple Leaf is the opportunity to own a piece of history. It is a unique opportunity to own not only something is rare in its existence but is “It is a collector’s item and commands a premium both for its gold bullion content but also for being incredibly rare.”

Don’t store your gold in a public place

Whilst this escapade is another example of how gold is money, the main lesson of this is that this amount of gold should not be stored anywhere other than a secure vault in one of the safest jurisdictions.

Very few vaults meet this criteria. Loomis International and Brinks vaults as offered by GoldCore’s partners in secure locations including Switzerland, Singapore and Hong Kong are some of the safest vaults in the world, provided the coins and bars are owned in allocated and segregated storage.

Unlike the Berlin-based museum, the gold bullion you store with GoldCore isn’t there because of a need to show it off and to allow people to admire it. Allocated and segregated coins and bars are fully insured and owned in the name of the client who have outright legal ownership.

Gold is a safe haven asset but only if held in a safe haven manner. It is locked away in the safest vaults to keep it safe and so it is there when you need it to protect your wealth.

Owning the financial insurance that is physical gold is important in these uncertain times.

Owning gold has protected people throughout history and again in recent years. Bail-ins as seen in Cyprus and now enacted in the EU, UK and U.S. may see deposits confiscated in the same manner that  the Berlin thieves ‘confiscated’ the gold coin yesterday.

NOTE to U.S. Tax Residents regarding Storing Offshore

GoldCore are not restricted in dealing with US residents due to Fair and Accurate Credit Transactions Act (FACTA), as we are not deemed to be a designated financial institution.

GoldCore is not a financial institution and the primary business of GoldCore is to act as a specialist provider of gold and silver bullion coins and bars for delivery and secure storage through our partners. These are not regulated financial services activities.

Thus, GoldCore are a non-financial foreign entity (NFE) and considered a non-financial foreign entity (NFFE) by the U.S. government.

Some vault providers will not allow U.S. residents to store their bullion directly in their vaults. GoldCore provide precious metals coin and bar storage and delivery for our U.S. clients in Loomis Zurich, Loomis Hong Kong and Brinks Singapore.




Gold trading this afternoon:

gold slammed on dovish comments!

(courtesy zero hedge)

Gold Slammed Below $1250 After Fed Fischer ‘Dovish’ Comments

Confirming just two more rate hikes in 2017 and plenty of uncertainty and fear over productivity growth, a ‘dovish’ Stanley Fischer sparked an instant reaction in USDJPY (spiked above 111) and Gold (slammed below $1250) as stocks moved to the day’s highs and bond yields rose (30Y over 3.00%)…

Notably Fischer did his very best to say absolutely nothing. But did say the folowing which seemed enough to trigger the algos…


And the reaction… the Gold and USDJPY ‘pairs’ trade converges…


Stocks bid (on FX carry and VIX slam) and bonds sold off…



The Shanghai gold exchange is claiming 70% of annual global production

(courtesy Bullionstar/Ronan Manly)

Bullion Star’s gold market charts for March


11:10p SST Monday, March 27, 2017

Dear Friend of GATA and Gold:

Bullion Star’s latest gold flow charts report that the Shanghai Gold Exchange seems to be claiming 70 percent of annual world gold mine production, though of course this doesn’t prevent Western central banks from dishoarding gold from their reserves or lending or swapping gold and underwriting gold derivatives so less conscientious investors can content themselves with claims to metal that doesn’t exist. Bullion Star’s charts are headlined “Gold Market Charts — March 2017” and they’re posted here:…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.



The following illustrates what happens once we enter the option expiry week and how central banks sell contracts to control gold’s rise.

(courtesy James turk/Kingworldnews)

‘1% percent rule’ that suppresses gold is a central bank racket, Turk tells KWN


9:30a SST Tuesday, March 27, 2017

Dear Friend of GATA and Gold:

Interviewed by King World News today, GoldMoney founder and GATA consultant James Turk discusses the algorithmic “black box” trading in gold that usually prevents the price from rising more than 1 percent in a day — the “1-percent rule” long identified by futures trader James McShirley in GATA Chairman Bill Murphy’s daily “Midas” commentaries at

Turk says: “The gold market is rigged, but not by the profit-seeking high-frequency traders who focus their trading on shares. The gold market is rigged by entities seeking to cap the gold price. They are not seeking profit, and there is only one possibility of who falls into that group. Only central banks don’t care about making a trading profit. They don’t care if they end up losing money, because if they do, they just print more money to cover their losses. Central banks only have one objective. They want their currencies to look good relative to gold.”

Turk’s comments are posted at KWN here:…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


House Committee passes a bill to “audit” the Fed.  It now goes to  the entire house for a vote and then onto the Senate where it will have a tougher time.

(courtesy zero hedge)

House Committee Passes Bill To “Audit The Fed”

The Republican-controlled Committee on Oversight and Government Reform approved a bill earlier today to allow for a congressional audit of the Federal Reserve’s monetary policy, a proposal Fed policymakers have opposed and likely faces a difficult path to final approval in the Senate.  Under the bill, the Fed’s monetary policy deliberations could be subject to outside review by the Government Accountability Office.

While similar bills have garnered some support from Democrats in the past, they uniformly spoke against the current proposal during a meeting of the House of Representatives suggesting the current iteration would face stronger resistance from an increasingly polarized environment in Washington D.C..

The House previously passed similar versions of this legislation twice before in 2012 and 2014, with dozens of Democrats joining nearly unanimous Republican support.  That said, those bills both died in the Senate and likely would have faced a Presidential veto from Obama had they survived anyway.

That said, Trump expressed interest in passing such legislation multiple times during the 2016 campaign cycle which means the 3rd time might just be the charm for Republicans.

It is so important to audit The Federal Reserve, and yet Ted Cruz missed the vote on the bill that would allow this to be done.


And while proponents of the bill argue that the Fed wields too much power over the U.S. economy with minimal oversight, opponents assert that Fed decisions should be informed purely by economic indicators and completely insulated from “political pressure”…and we presume those same opponents would argue that Yellen’s decision to wait until just after the conclusion of the 2016 Presidential election to start hiking rates had absolutely nothing to do with politics.  Per Reuters:

Proponents of the measure argue that the Fed is too powerful and lacks sufficient oversight for its interest rate decisions. But Fed officials from Yellen on down, as well as other critics, have warned that such a policy could subject the Fed to undue political pressure and discourage it from taking unpopular steps for the good of the overall economy.


“We should not in any way hinder their independence,” said Representative Carolyn Maloney, a New York Democrat, echoing the sentiment of Fed policymakers who say they could come under political pressure to avoid making unpopular decisions such as raising interest rates to slow growth and control inflation.

The next step for the bill would be a floor vote by the entire House, where Republicans hold a solid majority, followed by a Senate vote that would be much more difficult given Republcans’ narrow lead.

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



2. Nikkei closed UP 217.28 POINTS OR 1.11%   /USA: YEN FALLS TO 110.39

3. Europe stocks opened ALL IN THE GREEN      ( /USA dollar index FALLS TO  99.29/Euro DOWN to 1.0853


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  48.13 and Brent: 51.15

3f Gold DOWN/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.379%/Italian 10 yr bond yield DOWN  to 2.140%    

3j Greek 10 year bond yield FALLS to  : 7.14%   

3k Gold at $1256.15/silver $18.08(8:15 am est)   SILVER  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 26/100 in  roubles/dollar) 57.13-

3m oil into the 48 dollar handle for WTI and 51 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 SMALL DEVALUATION SOUTHBOUND   from POBC.


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  0.9856 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0698 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 FALLS to  +.379%

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 2.371% early this morning. Thirty year rate  at 2.978% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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


“They ‘Buy The Dip’ Yet Again”: Global Stocks, US Futures Rebound; Dollar Rises Off 4 Month Lows

European, Asian stocks have rebounded as investor anxiety over Trump economic policy and US tax reform eased following yesterday’s remarkable comeback in the US market. S&P futures point to a slightly higher open, with oil higher and the dollar rebounding off four month lows. It is a relatively quiet day in the US with the economic calendar focusing on wholesale inventories, consumer confidence and the Case-Shiller index.

European and Asian equities rose and S&P 500 futures edged higher as investor bullishness returned after the failure of U.S. President Donald Trump’s health-care bill.  Hopes that the Trump administration will now prioritize tax reforms coupled with still-robust economic data and corporate earnings forecasts spurred some investors to look past creeping doubts about Trump’s ability to deliver on campaign promises.

According to Bloomberg, the resumption of demand for risk assets signals investors are still pinning hopes on Trump’s ability to push through tax cuts and regulatory changes, pledges that helped trigger a reflationary upswing in global markets after his election. Bond and FX market participants’ reaction to the failure of the health-care bill has been to re-price Treasuries and the dollar under the assumption that President Trump has lost a little of his shine,Kit Juckes, a London-based global strategist at Societe Generale SA, wrote in a note.

Equity market participants have taken a look at the lower yields and weaker dollar and decided that since absurdly low rates are the elixir that the equity bull market lives on, they might as ‘buy the dip’ yet again.

Europe’s Stoxx 600 rose 0.4% helped by financials and pharmaceutical stocks. Futures on the S&P 500 rose 0.1 percent. The underlying gauge dropped 0.1 percent Monday, paring a loss of as much as 0.9 percent.

In FX, the dollar index against a basket of major currencies edged up 0.1 percent to 99.252, after plumbing a trough of 98.858 overnight, its lowest level since Nov. 11. “Risky asset markets have rebounded from yesterday’s opening low, supporting our view of the current market setback as a risk pause and not a turning point towards generally lower risk valuations,” analysts at Morgan Stanley said in a note to clients. Morgan Stanley said that given some of the savings that were to come from replacing Obamacare would be lost, the upcoming tax reform may turn out to be a smaller package or result in a higher fiscal deficit.

The dollar steadied after its worst week since Trump’s election after talk of more rises in Federal Reserve interest rates this year. “Clearly we shouldn’t forget we are going to see at least two more hikes by the Fed this year and that there is still the potential for the next one to be pulled forward to June,” said CIBC strategist Jeremy Stretch. Sterling edged up a notch, trading within a narrow range as Britain prepared to start formal divorce proceedings with the European Union on Wednesday.

Recent weakness in the dollar underpinned crude oil prices though persistent worries about oversupply kept gains in check. Prices for front-month Brent crude futures were up 0.6 percent. In the United States, WTI crude futures rose 0.7% .

Yields on 10-year TSYs were unchanged at 2.38% after falling three basis points on Monday. European bonds mostly rose, with 10-year German yields falling one basis point to 0.39 percent.

On today’s calenar, Fed Chair Yellen will make a speech on workforce development in low-income communities. Although it does not seem like she will address monetary policy, we will watch her speech for any clues about the Fed’s thinking. Otherwise, Tuesday looks set to be a very quiet day. In the US, the Conference Board Consumer Confidence index for March will probably rise further.

Bulletin Headline Summary from RanSquawk

  • A brighter spark for European equities today with much of the upside attributed to an unwind of yesterday’s flight to quality price action
  • The USD recovery has been a modest one this morning, with limited upside traction seen in USD/JPY as focus falls on EM amid ZAR softness
  • Looking ahead, highlights include potential comments from Fed’s Yellen, George, Kaplan & Powell and ECB’s Coeure

US Markets

  • S&P 500 futures up 0.1% to 2,340.50
  • STOXX Europe 600 up 0.3% to 376.11
  • MXAP up 0.8% to 148.71
  • MXAPJ up 0.6% to 480.79
  • Nikkei up 1.1% to 19,202.87
  • Topix up 1.3% to 1,544.83
  • Hang Seng Index up 0.6% to 24,345.87
  • Shanghai Composite down 0.4% to 3,252.95
  • Sensex up 0.6% to 29,399.95
  • Australia S&P/ASX 200 up 1.3% to 5,821.23
  • Kospi up 0.4% to 2,163.31
  • Brent Futures up 0.7% to $51.11/bbl
  • German 10Y yield fell 1.2 bps to 0.39%
  • Euro down 0.1% to 1.0850 per US$
  • Brent Futures up 0.7% to $51.11/bbl
  • Italian 10Y yield fell 2.7 bps to 2.197%
  • Spanish 10Y yield fell 0.5 bps to 1.683%
  • Gold spot down 0.1% to $1,253.74
  • U.S. Dollar Index up 0.1% to 99.29

Top Overnight News

  • Amazon Wins Battle to Buy Middle East E-Commerce Firm
  • Trump to Kill Suite of Obama-era Climate Change Policies
  • Akzo Pledges Plan for Profitable Split to Repel PPG Takeover
  • Credit Suisse Progress Buys Swiss Bank Room on Capital
  • Ericsson Sees Up to $1.7 Billion in Costs as Revamp Begins
  • Engie Aims to Fill U.S. Power and Gas Trading Gap Left by Banks
  • American Air to Invest $200 Million in China Southern Deal
  • Manhattan Landlords Turn to Retailer Giveaways as Stores Go Dark
  • Brookfield Finds Solar ‘Entry Point’ After SunEdison’s Collapse
  • Dakota Access Oil Line Outlasts Protests, Readies for Service
  • Huntsman Sees Venator Spinoff on Time Despite Damaged Ti02 Plant

Asian market sentiment improved as the region’s major indices shrugged-off the subdued Wall Street lead and traded mostly positive. ASX 200 (+1.1%) outperformed with the index led by financial and energy sectors, while Nikkei 225 (+1.1%) was underpinned as exporters found early respite from the recent JPY advances and with participants noted be on the bid ahead of ex-dividend dates. China traded mixed as the Hang Seng (+0.5%) conformed to the upbeat tone seen in its major regional counterparts, while Shanghai Comp. (-0.4%) lagged after the PBoC refrained from open market operations for the 3rd consecutive session, which resulted in a daily net liquidity drain of CNY 70bIn. 10yr JGBs traded slightly lower with demand dampened amid an improvement in risk sentiment and also following the enhanced liquidity JGB auction which saw weaker demand than the prior. PBoC refrained from open markets operations for a 3rd consecutive session, for a daily net drain of CNY 70bIn.

Top Asian News

  • Didi Said to Be Weighing $6 Billion SoftBank-Backed Funding
  • Malaysia Central Bank Sees March Inflation Exceeding 8-Year High
  • Unreachable Huishan Executive Exposes China Debt Woes, Bank Risk
  • Philippine Central Bank Chief Says Successor Must Be Named Soon

Europe likewise has seen a brighter spark for equities with much of the upside attributed to an unwind of yesterday’s flight to quality price action. The reprieve in commodity prices has seen energy and material names among the best performers. However, market moves have been somewhat contained ahead of the invoking of A.50 tomorrow. Of note, Members of the Scottish Parliament are to vote on giving First Minister Sturgeon authority to call a second independent referendum. In credit markets, French opinion polls keep OATs afloat with polls showing Macron would ease to victory ahead of Le Pen. In turn, this has alleviated concerns of the French political risk, subsequently narrowing the GE-FR spread (currently 57.5bps).This has also accounted for 2yr German Schatz yields rising, although the upside will likely be capped given the ongoing collateral squeeze as we approach month-end and financial year-end, the Schatz also saw a particularly soft auction today, which was technically uncovered (1.1) and saw a retention of 27.75%.

Top European News

  • Tesco to Pay $269 Million Over U.K. Accounting Scandal
  • U.K. Businesses Prepare Brexit Wish Lists as EU Talks Commence
  • Le Pen 25%, Macron 24%, Fillon 18% in 1st Round: Ipsos Poll
  • Dufry Rallies After Report China’s HNA May Buy Stake in Retailer

In currencies, the rand slid 1.9 percent to 12.98 against the dollar at 10:38 a.m. in London following Monday’s 2.5 percent decline. Prior to this drop, the currency had gained 9.5 percent year-to-date, making it a top emerging-market performer. The British pound climbed 0.2 percent to 1.2581. The Bloomberg Dollar Spot Index rose 0.1 percent after dropping 0.4 percent Monday. The USD recovery has been a modest one this morning, with limited upside traction seen in USD/JPY. Gains have extended to a little over 110.80, but with the market waiting for the next move from the Trump administration,
Treasuries find some near term support. The key 10yr rate is holding off 2.40%, and is only 3-4 bps higher from EUR/USD has pulled back off the 1.0900 level, and the market may sense the response to the policy shift at the ECB is now adjusted for. This is not to preclude a move on 1.0950 or 1.1000, but with French election fever hotting up from next week, gains may prove tough. Similar price action seen in GBP today as we saw Monday, though Cable gains towards 1.2600 are struggling amid modest USD buying. EUR/GBP continues to press for 0.8600-10 on the downside, the support here is likely to be aided by the familiar month end flow from Europe. Article 50 set to be triggered tomorrow, and even though this looks priced in, we cannot account for the subsequent rhetoric from Europe which may or may note add some colour to the negotiations which lie ahead.

In commodities, gold fell 0.1 percent at $1,253.50 an ounce after rising 0.9 percent Monday. West Texas Intermediate crude rose 0.8 percent at $48.11 per barrel following a 0.5 percent drop the previous day. As the USD recovers on the modest drop off in Treasuries, precious metals have come back off better levels, but not to any notable degree. The tenuous recovery in risk assets is largely behind this, as the market awaits the next move from the Trump administration — on tax reform. Gold still above USD1250.00, silver USD18.00. In contrast, base metals have recovered, though perhaps unconvincingly as yet — for the same reasons as above. Iron ore prices have come under pressure from Chinese stockpiles also, and this naturally impacts across the board. Copper is tentatively back above USD2.60. Oil prices also stabilise, with further comments — from Iran — that an extension to the production cuts agreed to late last year is on the table. Inventory levels and prospective shale production continues to counterbalance any relief rally. Iranian oil minister says that extending the OPEC and non-OPEC deal is likely but time is required in order to evaluate the decision.

Looking at the day ahead, the early data is the advance goods trade balance reading for February and the preliminary wholesale inventories data for February. Following that we’ll get the S&P/Case- Shiller house price index print in January before we then get the March consumer confidence print (expected to nudge down to 114.0 from 114.8) and Richmond Fed manufacturing survey. Away from the data it is a busy day for  Fedspeak. The Fed’s George speaks this afternoon at 12.45pm before Fed Chair Yellen speaks shortly after at 12.50pm. The Chair is however scheduled to speak on workforce development challenges so there is little suggestion that she will touch on monetary policy. Also due up today is Kaplan at 1pm and Powell at 4.30pm. The other potentially interesting event today is the  Scottish Parliament debate on a independence referendum.

US Event Calendar

  • 8:30am: Advance Goods Trade Balance, est. $66.4b deficit, prior $69.2b deficit, revised $68.8b deficit
  • 8:30am: Wholesale Inventories MoM, est. 0.2%, prior -0.2%; Retail Inventories MoM, prior 0.8%
  • 9am: S&P CoreLogic CS 20-City YoY NSA, est. 5.6%, prior 5.58%
  • 10am: Conf. Board Consumer Confidence, est. 114, prior 114.8; Present Situation, prior 133.4; Expectations, prior 102.4
  • 10am: Richmond Fed Manufact. Index, est. 15, prior 17

Central Banks

  • 12:45pm: Fed’s George Speaks in Midwest City, OK
  • 12:50pm: Fed Chair Janet Yellen Speaks
  • 1pm: Fed’s Kaplan Speaks in Dallas
  • 4:30pm: Fed Governor Jerome Powell Speaks

* * *

DB’s Jim Reid concludes the overnight wrap

After a bad start to the US session it felt like the market had its own sugar hit as the day wore on yesterday. Indeed whether you’re shocked at the fact that the S&P 500 only fell -0.10% yesterday (after being as low as -0.94% intra-day) perhaps depends on how much you think Trump’s most radical policies were priced into markets. There is an argument for saying that such trades weren’t actually priced in much anyway. The examples discussed yesterday within DB were that the 1) Fed funds market pricing are well below the FOMC dots; 2) the Dollar index is now back to where it was at the end of October; 3) the S&P 500 has been performing similarly to how it normally does after a close election even if there was a small pop up in February; and 4) that global PMIs are all consistent with where equities should be given the recent strength – a point we’ve made in previous EMRs. What we don’t know though is if some of the strong survey data contains some element of animal spirits only there because of Trump optimism. The fact that global numbers have been strong perhaps indicates that a lot of the optimism is in fact a global story and not a Trump one. So unless the global story turns then the healthcare debacle shouldn’t be too big a hit. Having said that, failure in the tax reform agenda will surely have more impact on animal spirits given its economic importance. So all to play for even if on some measures little obvious indication of success is priced in.

In markets the leader of the big selloff at the US open yesterday were Banks which tumbled over -2.50% within the first 10 minutes or so of trading. In doing so that meant US Banks briefly entered correction territory after plummeting -10.70% from the early month highs. After that, like the broader index, the sector bounced back impressively into the close and although finished a shade in the red by the end of play at -0.37% still recouped over 2% of the early losses. That move also came in the face of another day of tumbling Treasury yields with the 10y finishing the day 3.4bps lower at 2.379%. That is the lowest closing yield now since February 27th although yields did briefly dip below 2.350% at one stage yesterday. It’s worth noting that Chicago Fed President Charles Evans said yesterday that he sees the possibility of the Fed only hiking one more time this year should uncertainty continue to linger around the outlook for inflation and government spending.

The excitement for volatility also peaked fairly early in the day yesterday after the VIX touched an intraday high of 15.11 and the highest since November, before then settling back to finish at 12.50 and down over 3% on the day. Meanwhile Gold (+0.91%) found a bid amongst the risk-off moves and in doing so has now rebounded nearly 5% from the early month lows. Elsewhere metals had a day to forget with Copper (-0.76%), Aluminium (-0.46%) and Iron Ore (-4.10%) all down, while in FX the Greenback retreated -0.46% although as we noted above is back to pretty much where it was in October last year. It’s worth noting that the biggest mover in currencies yesterday was the South African Rand which tumbled -2.57% following the news that President Zuma ordered Finance Minister Gordhan to return home early from investor meetings in the UK and US. While there was no reason provided much of the chatter was that Zuma is preparing for an imminent cabinet reshuffle, raising uncertainty further around what is already a fragile situation.

As we refresh our screens this morning it appears that the positive momentum which saw Wall Street pare early losses has continued into Asia. The Nikkei (+1.07%), Hang Seng (+0.52%), Kospi (+0.28%) and ASX (+1.12%) are amongst the bourses higher while markets in China are largely flat. US equity index futures are also up about +0.20% while Gold has eased back a touch and rates markets are generally holding in around yesterday’s levels.

Moving on. Yesterday we saw the latest ECB CSPP numbers where the average daily rate of purchases of €308mn last week was the lowest outside of the summer and Xmas lull (average since start of €365mn). One week’s numbers do not make a trend but with the ECB tapering as of next week there will be some speculation that they are preparing to lower purchases. We’ll know in two weeks when the first week of April numbers are in. These will be important in working out the direction of spreads as this will give us an idea of whether they are planning tapering credit purchases as well as Governments. At the moment I would say the consensus is that they taper credit less.

The rest of the data yesterday was a little less exciting. In Germany the IFO survey surprised to the upside after the headline business climate reading rose 1.2pts in March to 112.3. Expectations had been for no change. The details also revealed a relatively equal contribution from both the expectations (+1.5pts to 105.7) and current assessment (+0.9pts to 119.3) components. Our economists in Germany made the point that the survey corroborates the strength of the PMI’s heading into Q2 and that both indices point to about 0.7% qoq GDP growth in Q1. The hard data continues to tell a different story though and the February hard data points will be important to gauge when and how this divergence will be resolved. Meanwhile the other data out in Europe yesterday was the ECB’s money and credit aggregates for February. M3 money supply growth was reported as slowing slightly to +4.7% yoy from +4.8% and as a result roughly staying in the range of the last couple of years. The credit side of the numbers also saw some retreat following strong January data. Banks lending to households slowed while lending to corporates saw its slowest pace in 5 months with the annual growth of corporate lending retreating to +2.0% yoy from +2.3%. Markets in Europe largely ignored the data yesterday and instead followed much of the lead from across the pond with the Stoxx 600 closing -0.40% but paring early heavier losses. In the US yesterday the sole release was the Dallas Fed’s manufacturing survey which was reported as falling 7.6pts in March to 16.9 (vs. 22.0 expected).

Looking at the day ahead, this morning in Europe it’s a particularly quiet start with no notable data due out, although we will hear from a couple of ECB speakers in Coeure and Makuch. Over in the US this afternoon the early data is the advance goods trade balance reading for February and the preliminary wholesale inventories data for February. Following that we’ll get the S&P/Case- Shiller house price index print in January before we then get the March consumer confidence print (expected to nudge down to 114.0 from 114.8) and Richmond Fed manufacturing survey. Away from the data it is a busy day for  Fedspeak. The Fed’s George speaks this afternoon at 4.45pm GMT before Fed Chair Yellen speaks shortly after at 4.50pm GMT. The Chair is however scheduled to speak on workforce development challenges so there is little suggestion that she will touch on monetary policy. Also due up today is Kaplan at 5pm GMT and Powell at 8.30pm GMT. The other potentially interesting event today is the  Scottish Parliament debate on a independence referendum


i)Late  MONDAY night/TUESDAY morning: Shanghai closed DOWN 14.01 POINTS OR .43%/ /Hang Sang CLOSED UP 152.17 POINTS OR 0.63% . The Nikkei closed UP 217.28 OR 1.11% /Australia’s all ordinaires  CLOSED UP 1.23%/Chinese yuan (ONSHORE) closed DOWN at 6.8853/Oil ROSE to 48/13 dollars per barrel for WTI and 51/15 for Brent. Stocks in Europe ALL IN THE GREEN EXCEPT PARIS    ..Offshore yuan trades  6.8663 yuan to the dollar vs 6.8853 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN WEAKER BUT  THE OFFSHORE YUAN  IS MUCH WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS SATISFIED WITH WASHINGTON’S RESPONSE 




The province of Herbei promised last year to cut production of steel by 8 million tonnes. Governor Zhang lied and insteadof cutting they increased production.  The world believed that the Chinese would cut production and that is the reason that iron ore rose in price. They were wrong and now iron ore tumbles

(courtesy zero hedge)


Iron Ore Tumbles As China Steel-Producing Hub Found Lying About Production Cuts

Very much like the self-imposed output cut by OPEC and non-OPEC members which successfully boosted the price of crude over $50 even if global crude inventories “inexplicably” continue to hit new all time highs, one of the main reasons why commodity metal prices have seen a dramatic increase in prices over the past year has been China’s solemn vow to cut back on overcapacity and excess production. In 2016, China’s state council set out plans to eliminate 100 -150 million tonnes of steel capacity in a bid to restructure the economy from one driven by government-led infrastructure investment and exports to a more consumption and services-oriented model. Last January, the hub of China’s steel production –  the northern province of Hebei – announced it would cut output to ease pollution and help curb oversupply. Hebei said it planned to reduce steel output by 8 million metric tons in 2016, its Governor Zhang told local lawmakers, while Iron ore production would be cut by 10 million tons.

More than one year later, it appears that Governor Zhang lied about Hebei’s intentions, and according to a provincial notice by the Chinese province, it has emerged that China’s compliance with its own mandatory production cuts has been “problematic.”

A steel factory in Wu’an, Hebei province

According to Reuters, the same Hebei province, China’s biggest steel-producing area, launched a probe into steel overproduction in the city of Tangshan “amid concerns that firms have continued to raise output despite mandatory capacity cuts.

Tangshan is the heartland of Chinese steel production. The city is home to the headquarters of the state-owned Tangsteel Group, which in 2006 merged with other companies to form Hebei Steel Group, the second-largest steel producer in the world. Located around 100 miles east of the capital Beijing, Tangshan is on the frontline of the country’s “war on pollution”, and was seventh on the list of China’s ten smoggiest cities in the first two months of this year.

Hebei was ordered by China’s central government to investigate firms in Tangshan that have “restricted but not cut production, restricted production but not actually cut emissions, and cut capacity but actually increased output,” the provincial dated March 25 said, and circulated by traders on Monday.

Cited by Reuters, an industry source based in Tangshan confirmed the veracity of the document, but said it was unclear whether the new round of inspections would have any immediate impact on production or prices. The document was issued by a special provincial policy team responsible for restructuring the steel industry. It said Hebei has already established an inspection team and Tangshan must begin its own investigations immediately.

The FT adds, that the notice, sent on Saturday, cites orders from President Xi Jinping and Zhang Gaoli, the vice-premier, for Tangshan to investigate the problem of falsely reported plant closures and rising steel output.

Tangshan produces around 90 million tonnes of steel a year, more than the whole of the United States. While China has pledged to slash steel capacity by between 100 million and 150 million tonnes over the 2016-2020 period to shore up prices and ease sector debts, there have been lingering suspicions that this may have been a ruse to push commodity prices higher, boosting cash flows of overindebted domestic producers, who employs millions of low-skilled workers and whose mass defaults could result in widespread social unrest.

The FT confirms as much:

local authorities have dragged their feet on implementing orders to shut down steel mills because doing so would potentially eliminate hundreds of thousands of jobs.

“The local government will always want to protect its own industries because company officials get promotions based on growth,” says Scott Laprise, the founder of steel research firm LTH Consulting. “No one gets a promotion because they lost jobs and their local economy did poorly.”

In addition to the cuts noted above, at the start of the year, Tangshan promised to shut a further 8.6 million tonnes of annual crude steel capacity in 2017. It pledged to make cuts of 40 million tonnes over the 2013-2017 period and had already shut 31.9 million tonnes by the end of last year. Hebei promised to cut crude steel capacity to less than 200 million tonnes a year in the province by the end of 2020, down from 286 million tonnes in 2013. It aims to shut 15.6 million tonnes in 2017.

However, in light of the recent revelation, it appears that local producers did not take the directives too seriously, and may have simply been stockpiling the excess production.

As Reuters adds, the Ministry of Environmental Protection has routinely named and shamed municipal governments in Hebei for failing to implement pollution rules; so far it has failed to achieve the desired result.

Of course, if one province is reneging on its production cut agreement, why not more?

That may indeed be the case: one month ago, Greenpeace said that China’s active steel capacity actually rose by 35 million tonnes in 2016 after the high-profile closure program focused mainly on shutting plants that had already been idled. Additionally, production of crude steel in 2016 actually rose about 1% from the year before, to 808m tonnes, according to preliminary data from the National Bureau of Statistics.

“The steel industry’s capacity reduction targets need to be upgraded to reductions in actual production – only then will we see real improvements in air quality,” said Lauri Myllyvirta, senior global campaigner at Greenpeace East Asia.

The problem is that just like with OPEC, there is no credible way of enforcing capacity cuts.

“Local governments will report back and simply say certain companies eliminated capacity or were closed or went bankrupt,” said LTH Consulting’s Laprise. “No one is checking what is supposedly already closed and what is actually closed.”

Excess production notwithstanding, China’s jawboning alone, and stated commitment to removing overcapacity, has managed to send prices of core commodities such as iron ore soaring as shown in the chart below.

Should it be confirmed that China was merely jawboning about removing excess supply then the appreciating commodity complex, a core driver of the global reflation trade which in recent months appears to have plateaued may soon see prices tumbling, in the process launching the latest deflationary wave to emerge out of China, and putting an end to the “global coordinated recovery” as so many analysts have called it in recent months.

It may already be happening: prices of iron ore, the key material used in steel production, tumbled fell 6.7% on Monday as inventories of the commodity at China’s ports rose. The fall brings the price to its lowest since January 10, down nearly 18% from its peak in March.




Conflicting stories as a Chinese man was shot dead in Paris by police.  It is sparking a riot as well as causing Beijing to protest:

(courtesy zero hedge)

Chinese Man Shot Dead In Paris By Police, Sparking Riot, Beijing Protest

A fresh diplomatic scandal has erupted after a Chinese man was shot dead by police at his Paris home, triggering rioting in the French capital by members of the Chinese community and an angry reaction from Beijing. The shooting which took place on Sunday brought 150 members of the French-Chinese community on to the streets in Paris’s main Chinatown district on Monday night, resulted in the detention of 35 people, and led China’s foreign ministry to summon in a French diplomat.

Local media said the police were called to solve a domestic dispute on Sunday night and a Chinese man was shot dead by the police after he stabbed a policeman. A staff member of the police station in Paris’ 19th District told reporters that the policeman would have been killed in the attack if the officer had not been wearing a bullet-proof vest. A second policeman on scene who witnessed the stabbing is said to have fired the fatal shot.

However, reporters from got a different story from one of the man’s daughters who was at the site when her 56-year-old father was shot dead. She said that the police broke into their home and immediately opened fire after seeing her father holding scissors. She said her father was using the scissors to prepare fish. Moreover, she added that her father, being only about 160 cm (5.2 feet) in height, was almost knocked over by the police after they broke into their house.

After the shooting, some Chinese protesters threw projectiles outside the district’s police headquarters and a number of vehicles were torched in a confrontation with riot police.

China Plus adds that 35 people were detained by police in Paris after around “150 members of the Asian community” gathered near a local police station late Monday local time to protest the death. There officers were reportedly slightly injured and at least one man of Chinese origin was also injured in the protest.

The Chinese Foreign Ministry responded on Tuesday that it had lodged representations with officials of the French Embassy in China and urged the authorities in France to take practical and effective measures to protect the legal rights and wellbeing of Chinese citizens. It also sought a thorough investigation by French authorities and steps to be ensure the safety of Chinese citizens in France.

The Foreign Ministry said that it will pay close attention to the development of the incident in Paris and hoped Chinese people in France express their appeals in a proper and legal manner.

The French foreign ministry said in a statement that an inquiry was under way into the shooting and added that the security of Chinese citizens in France was a priority for the national authorities. “Additional (security) measures have been taken in recent months and everything has been done to provide them with the best conditions for living here and for their security,” it said.

So far, local police have cordoned off the site of the incident and the man’s wife and 5 children are temporarily staying at a hotel. It’s been reported that the testimonies of the man’s daughters will be heard on March 28. Local Chinese associations issued an appeal to Chinese communities to remain calm and refrain from protesting before the results of the police investigation were unveiled.



Scotland votes to have a second referendum in a vote of 69 in favour and 59 against

(courtesy zero hedge)

Cable Tumbles As Scottish Parliament Votes For 2nd Independence Referendum

A day ahead of UK PM Theresa May’s timeline for submitting Article 50 and beginning formal Brexiut procedures, Scottish parliament just voted 69 to 59 in facor of a second Scottish independence referendum. While somewhat expected, cable is lagging on the news…

As AP reports, Scottish lawmakers have voted to seek a new referendum on independence, to be held within the next two years.

The Scottish parliament voted 69-59 to back First Minister Nicola Sturgeon’s call to ask the British government for an independence vote.

Sturgeon says Scots must be given the chance to vote on their future before Britain leaves the European Union. British Prime Minister Theresa May plans to launch the U.K’s two-year process to exit the EU on Wednesday by triggering Article 50 of the bloc’s key treaty.

“Scotland’s future should be in Scotland’s hands,” Sturgeon told lawmakers in the Edinburgh-based parliament.

Scottish voters rejected independence in a 2014 referendum that Sturgeon’s Scottish National Party called a once-in-a-generation vote. But Sturgeon says Brexit has changed the situation dramatically.

She says there should be a new vote on independence between fall 2018 and spring 2019, when details of Britain’s divorce terms with the bloc are clear.

Notably, May, whose government must approve the referendum for it to be legally binding, says the time is not right. She says all parts of the U.K. — England, Scotland, Wales and Northern Ireland — must pull together to get the best-possible deal with the EU.

Scottish Conservative leader Ruth Davidson agreed, saying Tuesday that Scots do not want “the division and rancor of another referendum campaign.” It’s unclear what could break the stalemate between Edinburgh and London.

Nicola Sturgeon’s full statement following the passage of the vote is below.


FM @NicolaSturgeon following vote: “The people of Scotland are sovereign, and they will be given a choice on their own future.”



Popcorn anyone?  Turkey’s top banker, CEO of Turkey’s largest state owned banks was arrested this afternoon on charges that he conspired with another famous Iranian Turkish financier (Reza Zarrab) to bypass Iranian sanctions.  You will recall that this is the same Zarrab that was involved in the laundering of gold (money) from Iran into Turkey.  Iran sold oil and was paid in gold.  The gold came from Dubai.

Since Erdogan profited handsomely form this latest deal, I can assure you that all hell is going to break lose  (e.g. migrants let loose?)

(courtesy zero hedge)

Top Turkish Banker Arrested At JFK Airport Over Massive Gold Money-Laundering Scheme

If Turkish president Erdogan needed one more reason to go ballistic in his daily comparisons of western leaders to Hilter and the Nazis, he got it this morning when a top executive at Halkbank, one of Turkey’s largest state-owned banks was arrested at JFK airport on charges of conspiring with an Iranian-Turkish financier who is awaiting trial for using his network of companies to circumvent Iranian sanctions.

As first reported by Bloomberg, Mehmet Hakan Atilla, deputy CEO at Turkiye Halk Bankasi, was taken into U.S. custody at John F. Kennedy International Airport in New York on Tuesday. He was detained on suspicion of conspiring to execute transactions on behalf of Iran. The arrest was made in connection with the pending prosecution of Reza Zarrab. The U.S. claims it has evidence that Zarrab paid millions of dollars in bribes to Turkish government officials and top executives at Halkbank, as it is commonly known, which allegedly helped Zarrab process the transactions.

Zarrab was a key figure in a 2013 scandal, in which Turkish prosecutors accused him of bribing the country’s cabinet ministers in a gold-trading operation worth at least $12 billion. We documented that particular fascinating incident in June 2014 in ‘Turkey’s “200 Tons Of Secret Gold” Trade With Iran: The Biggest, Most Bizarre Money Laundering Scheme Ever?

To be sure, Turkey’s President Recep Tayyip Erdogan who personally benefited from the money, or rather gold, laundering scheme called the investigation a coup attempt, and all charges against Zarrab and members of his administration were eventually dropped.

Zarrab, owner and operator of Royal Holdings A.S., is accused of using his multibillion-dollar network of companies in Turkey and the United Arab Emirates to induce U.S. banks to launder hundreds of millions of dollars in transactions that violated international sanctions against Iran. He was arrested in Miami in March 2016 after arriving in the U.S. for a family trip to Disney World and remains in detention.

And now we look forward to Erdogan’s furious response as one of his top bankers will be spending the foreseeable future in the questionable comfort of Rykers island.



The Rand tumbles after Zuma states that he will fire the finance minister Gordhan

(courtesy zero hedge)

Rand Tumbles For Second Day After Zuma Says He’ll Fire Gordhan

One day after the South African rand tumbled on the suprising report that president Zuma had ordered his finance minister Pravin Gordhan to cancel roadshow meetings with investors in the UK and US and return home on Monday, overnight the rand plunged for the second day in a row, after the 74 year old president told senior leaders of the South African Communist Party that he plans to fire Finance Minister Pravin Gordhan.

The rand weakened as much as 2.9% and was at 12.8757 to the dollar after sliding as much as 3.2% a day earlier.  The government’s rand-denominated bonds due 2026 fell, driving the yield 42 basis points higher to 8.78% over the two days (hint for all you yield chasers).

According to Bloomberg, citing people present, Zuma told officials from the party, which is allied to his ruling African National Congress, during a meeting on Monday in Johannesburg. He didn’t say when he planned to fire Gordhan.

Zuma said during the meeting with the communists he had taken the decision to remove the finance minister because he’s the president with responsibility for leading the government and Gordhan is blocking him, according to the people. “There is a power struggle between the politics of patronage and politics of constitutionalism,” Colin Coleman, a partner and head of Goldman Sachs Group in South Africa, said Tuesday in an interview on Bloomberg Television. “We may certainly see a very strong battle emerge in the days and in the months ahead.

On one hand, the report notes that on Monday a meeting of the top six leaders of the ANC was held after the SACP gathering and there was no indication that they agreed with the decision to fire Gordhan. Zizi Kodwa, a spokesman for the ANC, said the people were misinformed. However, speculation that Gordhan, 67, is on the verge of being fired has swirled for months, as he clashed with Zuma over the management of state companies and the national tax agency. “While Gordhan has led efforts to keep spending in check and fend off a junk credit rating, Zuma wants to embark on “radical economic transformation” that he says will tackle racial inequality and widespread poverty.”

Gordhan said that while in London, he and his delegation of finance minister officials and business and labor union leaders met with about 50 investors who have “great faith” in the South African economy.


“There are many in government who want to do the right things and make sure that our economy is on track and keep our development moving in the right direction so we can say we have done our job and done it well,” he said.

As Bloomberg adds, Gordhan’s dismissal may be delayed because ANC officials will be preoccupied with ceremonies to honor Ahmed Kathrada, the anti-apartheid activist jailed with former South African President Nelson Mandela, who died Tuesday at the age of 87.

Zuma and Gordhan have had a checkered past: the president named Gordhan finance minister in December 2015 after he was forced to backtrack on an earlier decision to install a then little-known lawmaker in place of Nhlanhla Nene. The president’s decision to fire the respected minister had hammered the nation’s bonds and currency and spurred ANC and business leaders to pressure him to reconsider.

“I don’t know if it’s true that Gordhan will be fired,” Enoch Godongwana, the head of the ANC’s economic policy committee, said by phone. “If that were to happen, it would be tragic for the economy. We are trying to move our growth to better levels. The growth numbers are beginning to reflect a positive trend. This sort of issue will be damaging.”

The termination of the finance minister may be just the catalyst rating agencies need to downgrade the nation, pushing prices on its sovereign debt, not to mention the currency, even lower. That said, despite the two-day drop in the currency, the Rand remains one of the better performing EM currencies YTD, with the USDZAR having started the year just shy of 14, and trading north of 15 one year ago this time.



An excellent commentary on what will drive oil prices this summer

(courtesy Rizvia/Oil

4 Factors Driving Oil Prices This Summer

Authored by Osama Rizvia via,

Uncertainty is dominating today’s oil markets, with production cuts, ballooning inventories and a rising rig count all adding to oil price volatility. And as the summer driving season approaches and oil companies return to their projects here are four key factors to watch closely.

Inventory, Rig counts – An significant inventory build on the 7th of March sent oil prices tumbling, ending a period of relative stability for oil markets. The build-up of 8.2 million barrels at Cushing, Oklahoma sent prices below the psychological level of $50. The next week saw a draw of 237,000 barrels, providing the investors and market with some much needed breathing space. The most recent inventory report saw a 5-million-barrel build, adding yet more downward pressure to oil prices. The inventory level now rests at 533 million barrels, the highest in history. At the same time, we have seen a rapid increase in the number of active oil rigs in U.S. The total number now stands at 652 after an increase of 21 rigs last week according to Baker Hughes. This is the highest level since September 2015. Given the remarkable adaptability of shale producers to low prices, these trends are likely to continue, adding yet more downward pressure to oil prices.

(Click to enlarge)

The OPEC deal-Extension or no Extension: Questions surrounding the possibility of an extension to the current OPEC deal can be heard in all corners of the oil market. But attempting to make sense of the mixed signals coming from OPEC’s various members is not only a fool’s errand, but an insignificant one. The outcome of both scenarios: extension or no extension, are going to yield the same results. If OPEC does extend the production cut we will see the same vicious cycle: prices will rise, more rigs will be added in U.S., production will increase and prices will stall. On the contrary, if the OPEC and NOPEC members do not reach an agreement then we will see what we saw in 2014-16, each producer will ramp up production vying for the market share. This will cause prices to either go down or to once again be stuck in limbo. A third scenario may see OPEC members agreeing while NOPEC nations leave the table. Russia is already preparing for $40 oil. Oil analyst Baruch of IITRADER while speaking to Bloomberg explained how U.S. production has risen from 8.7 million barrels to more than 9.1 million, and that he expects it to rise further. Iraq’s oil minister says that the “fate of OPEC’s output cut depends upon how the market responds’’. Well, the response is not going to be a promising one except for a temporary price rally. Even if the OPEC members were to agree to an extension, the world is only going to believe hard tangible facts, not rhetoric. But markets will have to wait until May to find out how the OPEC production cut saga will develop.

Summer Driving Season: This summer driving season might provide some cushion for oil prices. According to Jason Schenker “This year, the seasonal upside could be even greater than normal. With the lowest U.S. unemployment rate since before the recession of 2008, and two consecutive years of record SUV and light truck sales in 2015 and 2016, the coming summer driving season is likely to show records for miles driven and gasoline demand. In fact, there has been a record number of miles driven every month since December 2014. And a continued trend higher in the 12-month moving total of U.S. miles driven is likely to continue throughout 2017.” According to an article in Reuters, U.S. auto sales will remain strong in 2017 around 17.6 million.

E&P Projects: While the IEA recently stated its concerns about a lack of new projects creating a lack of supply, the recent uptick in prices has led many oil majors to restart their once abandoned projects. There are not only more projects coming on-line but the payback time has also decreased significantly. Goldman Sachs reports that the rising Shale production and the flurry of new oil projects may “result in an oversupply in the next couple of years”. Wood Mackenzie predicts that new oil projects will double in 2017 as it sees spending getting a 3 percent boost this year.

(Click to enlarge)

These are sure to be the four key factors in the oil markets in the near future and should be closely watched by any market observer eager to understand where oil prices are headed.


Oil tumbles after a lower than expected drawdown

(courtesy zero hedge)

RBOB Tumbles After Lower Than Expected Gasoline Draw

After an early spike on Libya production fears and OPEC production cut extension hope, WTI and RBOB faded all day on dollar strength ahead of the API data. The trend of builds in Crude and draws in gasoline and distillates continued but the gasoline draw was notably less than expected and has sparked selling in RBOB.



  • Crude +1.91mm (+2mm exp)
  • Cushing -576k
  • Gasoline -1.104mm (-2mm exp)
  • Distillates -2.035mm

Cushing saw a draw for the first time in 5 weeks but crude builds continued their streak. The most notable print was lower than expected gasoline draw…


The kneejerk reaction was selling in RBOB after a smaller than expected draw…

According to James Williams, economist at London, Arkansas-based energy-research firm WTRG Economics:

Gasoline is also pulling up crude. The normal spring maintenance season switch to summer blend of gasoline always puts upward pressure on crude,… Every spring, the market seems to wonder if we are going to have enough gasoline for summer”



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



GBP/USA 1.2555 DOWN .0001 (Brexit  March 29/ 2017/


Early THIS TUESDAY morning in Europe, the Euro FELL by 7 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.0853; 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+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED DOWN 14.01 POINTS OR 0.43%     / Hang Sang  CLOSED UP 152.17 POINTS OR 0.63% /AUSTRALIA  CLOSED UP 1.23%  / EUROPEAN BOURSES ALL IN THE GREEN EXCEPT PARIS 

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

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

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

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

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

The NIKKEI: this TUESDAY morning CLOSED UP 217.28 POINTS OR 1.11%

Trading from Europe and Asia:

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 152.17 POINTS OR 0.63% / SHANGHAI CLOSED DOWN 14.01 OR .43%/Australia BOURSE CLOSED UP 1.23%/Nikkei (Japan)CLOSED UP 217.28 OR 1.11%  / INDIA’S SENSEX IN THE  GREEN

Gold very early morning trading: $1255.30


Early TUESDAY morning USA 10 year bond yield: 2.371% !!! PAR IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  2.978, PAR IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 99.29 UP 8  CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING


And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 4.070%  DOWN 1  in basis point yield from MONDAY 

JAPANESE BOND YIELD: +.058%  UP 1/5  in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.68%  DOWN 1 IN basis point yield from MONDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.161 DOWN 4 POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 48 points HIGHER than Spain.





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

Euro/USA 1.0842 DOWN .0020 (Euro DOWN 20 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110.62 DOWN: 0.141(Yen UP 14 basis points/ 

Great Britain/USA 1.2487 DOWN 0.0069( POUND DOWN 69 basis points)

USA/Canada 1.3359 DOWN 0.0027(Canadian dollar UP 27 basis points AS OIL ROSE TO $48.63


This afternoon, the Euro was DOWN by 20 basis points to trade at 1.0842


The POUND FELL BY 69  basis points, trading at 1.2487/

The Canadian dollar ROSE by 27 basis points to 1.3359,  WITH WTI OIL RISING TO :  $48.63

The USA/Yuan closed at 6.8778/
the 10 yr Japanese bond yield closed at +.058% UP 1/5 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 2  IN basis points from MONDAY at 2.391% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.995 UP 1  in basis points on the day /

Your closing USA dollar index, 99.34 UP 12  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED UP 49.92 OR 0.68% 
German Dax :CLOSED UP 153.35 POINTS OR 1.28%
Paris Cac  CLOSED UP 28.77 OR 0.57%
Spain IBEX CLOSED UP 86.10 POINTS OR 0.84%
Italian MIB: CLOSED UP  206.23 POINTS OR 1.02%

The Dow closed UP 150.52 OR 0.73%

NASDAQ WAS closed UP 34.77 POINTS OR 0.60%  4.00 PM EST
WTI Oil price;  48.63 at 1:00 pm; 

Brent Oil: 51.62  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: $51.30


USA 30 YR BOND YIELD: 3.026%

EURO/USA DOLLAR CROSS:  1.0811 down .0050

USA/JAPANESE YEN:111.15   up .390

USA DOLLAR INDEX: 99.69  up 47  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2446 : down .01100  OR 110 BASIS POINTS.

Canadian dollar: 1.3381  down .0004

German 10 yr bond yield at 5 pm: +.388%



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


Biggest VIX Crash Since Election Saves Dow From Worst Losing Streak In 39 Years

Consumer Confidence soaring, expectations for stock gains at record highs, 6 sigma beat in Richmond Fed survey…


The faith is strong with this one…


The Dow rallied over 150 points, breaking the losing streak and avoiding the worst run since 1978!! Yesterday’s bounce off the 50DMA seems so perfectly orchestrated…


4 VIX Slams later, The Dow was back into the green for the week… $1 billion MOC did dull the close a little but hardly…


And USDJPY was lifted 1 big figure…


From record complacency to panic and back in just a few days… The last two days have seen the fastest reversal in VIX since the election…


Dow, S&P, Nasdaq, and Small Caps all rallied tick for tick with each other – which makes perfect sense, right?!!


From Friday’s close, banks are back in the lead, bonds and bullion lagging…


But bear in mind, March has been ugly still for the big banks – worst since Jan 2016…


Off the opening lows from Monday, Trannies are best and “Most Shorted” stocks have been squeezed dramatically again…


With month-end malarkey underway, the S&P was ramped unrelentingly into the green for March…


AAPL traders could not get enough, greatly rotating out of SNAP… (AAPL gained over $15 bn in market cap today, that 1.5x TWTR!)


Fed VC Fischer was dovish with his view of uncertainty and just two more hikes and… The USD rallied!?


Yen weakness was the big driver of USD’s gains back to unch on the week…EURUSD fell to 1.0799 before bouncing back


Swissy plunged after SNB’s Marchler called the currency “strongly overvalued”…


Bitcoin slid lower as the USD ralied…


Treasury yields snapped higher today with 30Y back above 3.00% ands 10Y back above 2.40%


Year-to-Date, 7Y yield are unch; 10s and 30s are still lower and 2Y the owrst +11bps…


WTI and RBOB ended the day higher – despite a stronger dollar – but faded for most of the day after the opening gap…


Gold broke back below $1250 – back to pre-healthcare-bill levels – but Silver remains higher…


Finally, this summed up this week’s market rather well…

can’t stop, won’t stop…



Stocks Roll-Over As USDJPY Tumbles To Post-Healthcare-Fail Lows

Yesterday’s dead-bill-bounce is fading fast in the pre-market (mimiccing yesterday’s moves) with USDJPY leading the way lower.

Treasury yields and the dollar are also dropping…

(courtesy David Stockman/Daily Reckoning)

Trump’s $4 Trillion Fiscal Hole


[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.]


The “you ain’t seen nothing yet” rule applies from here on out.

The GOP was unified on Obamacare “repeal” but completely fractured on “replace,” both on policy philosophy and fiscal cost.

That particular chapter of  the “replace” saga, however,  is chicken feed compared to finding a coherent majority on measures to “replace” the $4 trillion of revenue loss from the corporate and individual tax cuts promised by Trump and embraced widely by the GOP rank and file.

Wall Street has been drooling about the prospect of cutting the corporate rate to 20% and other related corporate tax reforms. These measures would reduce revenue by $2.1 trillion over a decade.

On top of that, there’s the revenue loss from lowering the top individual tax rate to 33%, collapsing the tax brackets from seven down to three (33% 25% and 12%) and raising the standard deduction.

That’s another $2 trillion of Federal receipts gone missing over the next decade, thereby widening the fiscal hole to the above mentioned$4 trillion.

Good luck with that, as the kids say. So with a $4 trillion funding hold, the Trump Stimulus is heading for oblivion.

But here’s the true shocker of the present moment in American governance…

The Trump White House and purported GOP majority on Capitol Hill are structurally incapable of cutting even $1 from the Federal government’s current $4.2 trillion annual spending level.

That’s right. I’m not being figurative here. I mean that the motley ruling party on display Friday afternoon is literally incapable of cutting one single net dollar of Federal spending from the current built-in baseline.

In a word, Trump’s $54 billion per year defense increase will more than exceed any potential cuts in discretionary spending that the fragile GOP majorities could agree upon. At the same time, 80% of non-defense spending is accounted for by entitlements and interest payments.

Trump has taken the former off the table, of course, while the latter is untouchable.

In short, the vaunted pivot to “tax cuts” purportedly now underway is equivalent to that of a pole-vaulter unaware of the fact that on the far side of the bar is a pit with virtually no bottom.

That is to say, repealing taxes is even easier to advocate than repealing Obamacare, but replacing the $4 trillion revenue loss is next to impossible.

What this boils down to is that the Trump/GOP government has a $4 trillion promise and virtually zero capacity to fund it. And that fiscal hole is absolutely real because the GOP Congressional leaders’ insistence that the tax bill must be “deficit neutral” is more than warranted.

Indeed, the whole tax cutting charade is being conducted atop a fiscal volcano that is already rumbling with anticipatory temblors.

As shown below, under the Congressional Budget Office’s (CBO) current law projections issued in January, the Federal deficit is set to soar based on the explosion of entitlement and medical spending relative to revenue growth, and will reach $1.4 trillion per year by 2027. That means that over the 10-year period nearly $10 trillion would be added to the public debt.

Moreover, that’s just the happy time view of the fiscal outlook.  The CBO projections are based on the absurd economic assumption that the there will be no U.S. recession for 206 months running (e.g. between June 2009 and September 2027).

That has never happened in human history, and is twice the business cycle expansion of 119 months that occurred during Greenspan’s unsustainable tech and dotcom boom of the 1990s.

Additionally, Congress has learned every trick in the budget accounting books about how to make the out-year deficit appear lower than it actually is so that it can keep kicking the debt monster down the road.

Thus, even Brookings Institution has dropped a dime on the CBO by calling out the accounting games it feels necessary to accommodate in its long range projections. By using a concept called “current services” (which is what we always used back in the day), which projects Congress’actual policies over the 10-year horizon, Brookings concluded that even under CBO’s Rosy Scenario economic assumptions, the cumulative deficit will actually total $11.4 trillion over the period.

And more crucially, that by 2027 the annual deficit will hit $1.7 trillion or 6.1% of GDP — and keep rising from there.

The reason is simple. The Brookings revision just removed all the “make pretends” from the CBO projection, such as the fact that upwards of$850 billion of tax measures are counted in the CBO revenue baseline that will never materialize in the real world.

That’s because Congress habitually postpones the effective date of certain Obamacare tax increases (e.g. the tanning tax and the levy on medical devices) or extends at the last minute a huge range of tax “incentives” that are conveniently scheduled to “expire” several years down the road, but never do. The wind energy credit boondoggle is one case in point.

In sum, the Trump/GOP coalition is in a massive inherited debt trap, and therefore has zero wiggle room to enact the kind of sweeping, deficit-financed Reaganesque tax cuts that Wall Street is peddling to the homegamers in order to herd them to the slaughter one last time.

Indeed, even setting aside the CBO’s drastic undercount of the real outyear deficit path, its January update contains a singular number that demonstrates why this week’s pivot to tax cutting will quickly degenerate into a legislative tailspin.

That number is well over $30 trillion and is found on page 29 of the report. It’s CBO’s official projection of the total public debt in 2027 before a single dime of the Trump/GOP tax cut is paid for.


Here’s the skunk in the woodpile…

Congress can’t even start the tax cutting process until both Houses have passed a 10-year budget resolution for FY 2018, which contains “reconciliation instructions” on the magnitude of the tax cuts and the basket of “payfors” that would off-set a major share of the revenue loss.

On this front, the White House is even more clueless than it was on Obamacare repeal and replace. In recent days, for example, the S&L guy at the Treasury Department, Steve Mnuchin, has been insisting that the tax cuts could be enacted by the August recess — even if that is on the ambitious side by his own reckoning.

No, that is pure rookie gibberish. Before giving any consideration to spending cuts or so-called dynamic forecasting of revenue “reflows” from tax cuts, the House GOP would have to pass a budget resolution that increased the public debt to $34 trillion and left a $2 trillion or 7.5% of GDP deficit by 2027.

That’s not going to happen in a million years — let alone by the August recess. And spending cuts and revenue reflows will not materially mitigate that reality.

In any event, it now appears that the casino is beginning to get the message based on the modest sell-off today and last week. But do not wait for the talking heads of bubblevision to signal the all-clear and that it’s again time to buy-the-dip.

Actually, it’s just another warning sign that reality is closing in on the great financial fantasy of our times, and that getting out of the casino with all deliberate haste is the only prudent thing left to do.


David Stockman
for The Daily Reckoning


A little fuel for our democrats as Trump’s son in law , Jared Kushner met key personnel of the state owned Russian bank VEB

(courtesy zero hedge)

Sanctioned Russian Bank Confirms It Met With Trump’s Son-In-Law

In what is emerging as the latest headache for Donald Trump, a state-run Russian bank which has been under U.S. economic sanctions since 2014 disclosed on Monday that its executives had met Jared Kushner, Trump’s son-in-law and key policy adviser, during the 2016 election campaign. As reported previously, Kushner has been asked to discuss the contact, and a meeting during the same period with the Russian ambassador, with a Senate committee probing Russia’s alleged interference in the 2016 election.

Executives of Russian state development bank Vnesheconombank (VEB) had talks with Kushner during a bank roadshow in 2016 when it was preparing a new strategy, the bank said as reported by Reuters. “As part of the preparation of the new strategy, executives of Vnesheconombank met with representatives of leading financial institutes in Europe, Asia and America multiple times during 2016,” VEB said in an emailed statement.

It said roadshow meetings took place “with a number of representatives of the largest banks and business establishments of the United States, including Jared Kushner, the head of Kushner Companies.”

VEB declined to say where the meetings took place or the dates. U.S. officials said that after meeting with Russian Kislyak at Trump Tower last December, a meeting also attended by Flynn, Kushner met later in December with Sergei Gorkov, the CEO of Vnesheconombank. White House spokeswoman Hope Hicks confirmed the meetings.

That said, simply meeting with representatives of a U.S.-sanctioned entity is not a violation of sanctions or against the law, although we doubt the media will focus on that nuance.

A bigger circumstantial problem may be that Evgeny Buryakov, 41, a Russian citizen who worked at Vnesheconombank and whom U.S. authorities accused of posing as a banker while participating in a New York spy ring, pleaded guilty to a criminal conspiracy charge on Friday. Buryakov admitted in federal court in Manhattan to acting as an agent for the Russian government without notifying U.S. authorities. He was sentenced to 30 months in US prison.

Additionally, Gorkov, the bank’s chairman, graduated in 1994 from the Academy of the Federal Security Service of Russia, the Russian school for intelligence officials, i.e., spies. He later worked for the now-defunct Russian oil giant Yukos and state-controlled Sberbank before taking the top job at VEB. As the WSJ reminds us, the plunge in oil prices and Western sanctions over the Ukraine crisis had  pushed the bank into financial trouble, forcing the Russian government to undertake a bailout.

The White House said Kushner was simply doing his job by holding this meeting, although Obama sanctioned the bank in 2014 after the Ukraine coup and subsequent hostilities with Russia, and contacts with Russia have landed other Trump associates in hot water.

Earlier on Monday, White House spokesman Sean Spicer told reporters that Kushner is willing to testify to the Senate Intelligence Committee chaired by U.S. Senator Richard Burr, a North Carolina Republican. “Throughout the campaign and the transition, Jared served as the official primary point of contact with foreign governments and officials … and so, given this role, he volunteered to speak with Chairman Burr’s committee, but has not received any confirmation regarding a time for a meeting,” Spicer told reporters at his daily briefing. The Republican and Democratic leaders of the Senate panel also said Kushner had agreed to be interviewed.

Allegations by U.S. intelligence agencies that Russian actors were behind hacking of senior Democratic Party operatives and spreading disinformation linger over Trump’s young presidency. Democrats charge the Russians wanted to tilt the election toward the Republican, a claim dismissed by Trump. Russia denies the allegations




As David Stockman writes:  Trump and Ryan are deeply divided over tax cuts which can never happen.  Also remember that we have reached the debt ceiling and there will be certain clashes as to how to raise the ceiling;

(courtesy zero hedge)

The Next Clash Emerges: Trump-Ryan Deeply Divided Over Tax ‘Cuts’

After failing to achieve Republican agreement over healthcare reform, The Washington Post reports that while President Trump and House Speaker Paul D. Ryan both want to rewrite the tax code, they are deeply divided over how much tax relief to give the middle class.

As WaPo details, Trump proposed a plan that would have reduced taxes drastically, especially for the wealthy but also for the poor and working class. Meanwhile, Ryan and his colleagues put together a plan that was equally generous to the rich but that would give poor and middle-class taxpayers less of a break. The speaker’s plan would even have increased taxes on some in the upper middle class. The richest 0.1 percent of households would receive similar benefits from both politicians: an average of $1.4 million per household a year under Ryan’s plan and $1.5 million annually under Trump’s plan.

After a decade, 99.6 percent of the tax relief Ryan proposed would have accrued to the wealthiest 1 percent of the country. In Trump’s plan, 50.8 percent of the relief would have gone to that group, according to analyses by the nonpartisan Tax Policy Center. Most notably given the divisions within the Republican Party (i.e. fiscal conservatives rejection of the healthcare reform bill), Trump’s plan would be extremely costly for the government, reflecting his conservative populist comments in the past that suggest he would be willing to put the federal government deeper into debt to fund breaks for the middle class.

Ryan’s plan would instead simplify and streamline the tax code in accordance with conservative orthodoxy, eliminating the goodies for households with modest incomes that Trump would preserve or expand.

It’s not all bad though as the two tax plans have important features in common, as WaPo’s Max Ehrenfreund reports,

In terms of taxes on the rich, both plans would reduce the marginal rate paid by the wealthiest taxpayers on individual income from 39.6 percent to 33 percent.


The two plans would repeal some of the taxes that Obamacare imposed on the rich, and both plans also repeal the estate tax, which rich families pay when one of their members dies. Repealing the tax would return $300 billion or so to those families over a decade, according to the center, depending on the details of the plan.


Meanwhile, both plans would increase the amount that many families can earn without paying taxes.

The biggest reason for the discrepancy in the effects of the plans on the middle class is how Ryan’s proposal would affect imports and exports.

The plan includes a complex and controversial provision known as a “border adjustment”, which some economists think would increase prices for goods and services imported from overseas.


Eric Toder, an economist at the Tax Policy Center, said the group’s initial analysis of this aspect of the plan treated it as a kind of tax on households’ purchases, but many experts believe that Ryan’s proposal would not have that effect over the long term.


Ryan’s plan would be better for the middle class on that more optimistic assumption. “When we do it that way, there actually is a bit of a cut for the middle class,” Toder said.

So get ready America, it will be hard for Trump to temper his on-again, off-again support for Speaker Ryan if this division grows – and ironically, Trump may find more support from the other side of the aisle for his ‘middle-class tax cuts’ as the GOP splinters further.




It seems that traders and just about everybody in the uSA seems to forget that exactly one month from today, the USA has a real problem when the continuing resolution runs out on April 28 and all the Government shuts down

(courtesy zero hedge)

Top Republican Warns: “Government Shut Down Is A Real Possibility, And Wall Street Is Unprepared”

In all the spirited rhetoric over the Republicans’ failure to pass Obamacare repeal and confusion over what lies ahead, many pundits and market watchers seem to have forgotten that a far more imminent threat, one due exactly one month from today, is that the US government may shut down. As Axios pointed noted, citing a top Republican, after the GOP failure on healthcare, a government shutdown which looms when the continuing resolution runs out April 28 and coincides with Day 100 of the Trump presidency, is “more likely than not… Wall Street is not expecting a shutdown and the markets are unprepared.

Axios further notes that the message CEOs took from Friday’s fiasco, according to an executive at a money-center bank, was “Holy crap! We may be facing the same crap on a shutdown threat, and on the debt ceiling. Holy crap! We may not get tax reform, or a repatriation bill, or infrastructure spend, or substantial changes to regulations.”

However, while we agree with the quoted republican that by and large markets are unprepared, they are starting to realize that a government shut down is becoming an all too real possibility, as the following just released note from BMO’s strategists Ian Lyngen and Aaron Kohli.

The RBC duo note that they have been fielding questions about ‘what’s next’ for the administration in terms of legislative proposals – tax reforms? An infrastructure program to ‘Repave America’?

Here is their response:

While Trump would surely like the tax issue to be front and center, we’re starting to hear growing concerns that a government shutdown at the end of April may be a real possibility given the rise of the Freedom Caucus. Moreover, with the Democrats emboldened by their success in averting the repeal of Obamacare (at least for now), there is clearly less incentive to ‘play nice’ with the rest of Congress. In short, rather than clearing the way for tax reforms to take center stage, the healthcare bill mistakes might have more damaging implications for the effectiveness of the new administration than the Trump camp wants to admit.


In considering the market impact from the healthcare bill, perhaps the question shouldn’t be ‘what happens when tax reforms and infrastructure gets passed?’ and ratherwhat happens when the government enters a partial-shutdown on April 28th?’ To the latter question, that would certainly be a bullish event for the Treasury market and risk-off more broadly. The most straightforward implications are that the gridlock and relative strength of the opposition in Washington will simply slow pro-business reforms so significantly that markets will effectively price them out. After all, if Congress cannot keep the lights on in the Capitol building, how much confidence will the market have in their ability tackle the weightier issues of tax and infrastructure spending.


We’ll be the first to admit that we came into this year expecting that the debt ceiling debate would be a complete non-issue given what (at the time) appeared to be a unified Republican government. We were clearly a bit too optimistic, or politically naïve, and what’s currently playing out triggers flashbacks of the summer of 2011 when the US was downgraded by S&P as a polarized Congress wasn’t able to raise the debt ceiling quickly enough. While one might intuitively think that the risk of a downgrade would increase the cost to the borrower (i.e. higher yields), during the period of April 18, 2011 when S&P put the US on “negative outlook” to August 5, 2011 when the downgrade occurred, 10-year yields dropped from 3.40% to 2.56%.


There were certainly a number of other more tangible drivers at play behind the rally as well; slowing economic growth, the Fed’s quantitative-easing program, falling inflation expectations, etc. – but our broader point is that the market’s reaction to another ‘head-to-head’ debt-ceiling debate will be bullish for the Treasury market. If for no other reason than what it suggests will ultimately be delivered in terms of other reforms.

To be sure, traders have demonstrated an amazing ability to reallign the bullish narrative with any change in the underlying facts, so it is quite possible that we are just one month away from the market surging back to all time highs because a shut government is spun as positive for risk assets, the same Trump’s healthcare bill failure has resulted in rising stock prices.





Trump asks why the Intelligence Committee is not probing the Clintons?(courtesy zerohedge)

Here’s The Story Behind Trump’s Podesta-Russia Tweet

President Trump took to Twitter this morning to remind Americans that the “It was Russia” stone-throwers on the left may have been living in Russia-funded glass-houses after all…

Watch @foxandfriends now on Podesta and Russia!

The story behind this Podesta-Russia link is explained in full gore by Mike Krieger via Liberty Blitzkrieg blog; dot connectors, Twitter diagram creators and newly minted Russia-conspiracy sleuths from sea to shining sea take note.

Since anything connected to Russia is now considered treasonous, I’ve got a great story for you to sniff out.

It relates to John Podesta, but somehow I doubt you’ll be interested in this one…

The Daily Caller reports:

John Podesta, former Secretary of State Hillary Clinton’s 2016 national campaign chairman, may have violated federal law by failing to disclose the receipt of 75,000 shares of stock from a Kremlin-financed company when he joined the Obama White House in 2014, according to the Daily Caller News Foundation’s Investigative Group.


Joule Unlimited Technologies — financed in part by a Russian firm —  originally awarded Podesta 100,000 shares of stock options when in 2010 he joined that board along with its Dutch-based entities: Joule Global Holdings, BV and the Stichting Joule Global Foundation.


When Podesta announced his departure from the Joule board in January 2014 to become President Obama’s special counsellor, the company officially issued him 75,000 common shares of stock.


The Schedule B section of the federal government’s form 278 which — requires financial disclosures for government officials — required Podesta to “report any purchase, sale or exchange by you, your spouse, or dependent children…of any property, stocks, bonds, commodity futures and other securities when the amount of the transaction exceeded $1,000.”


The same year Podesta joined Joule, the company agreed to accept 1-Billion-Rubles — or $35 million — from Rusnano, a state-run and financed Russian company with close ties to President Vladimir Putin.


Anatoly Chubais, the company CEO and two other top Russian banking executives worked together with Podesta on the Joule boards. The board met six times a year.


Ron Hosko, a former FBI assistant director said because of the Kremlin backing, it was essential Podesta disclose the financial benefits he received from the company.


“I think in this case where you’re talking about foreign interests and foreign involvement, the collateral interest with these disclosure forms is put in the forefront of full disclosure of any foreign interest that you may have,” he told TheDCNF in an interview.


The existence of the 75,000 shares of Joule stock was first revealed by the Government Accountability Institute report issued last year.


But Podesta didn’t pocket all the shares. Correspondence from Podesta to Joule instructed the firm to transfer only 33,693 shares to Leonidio Holdings, a brand-new entity he incorporated only on December 20, 2013, about ten days before he entered the White House.


Leonidio is registered in Delaware as a limited liability corporation. Podesta listed the address of his daughter, Megan Rouse, in the incorporation papers. His mother and father also appear to be co-owners of Leonidio.


TheDCNF made multiple inquiries to OGE and received no reply. TheDCNF inquiries to Mr. Podesta were not returned.

That’s not the end of the story though, as John Podesta’s brother, Tony, confirmed Russia’s largest bank had hired the Podesta Group to lobby for an end to sanctions

Russia’s largest bank, Sberbank, has confirmed that it hired the consultancy of Tony Podesta, the elder brother of John Podesta who chaired Hillary Clinton’s presidential campaign, for lobbying its interests in the United States and proactively seeking the removal of various Obama-era sanctions, the press service of the Russian institution told TASS on Thursday.


“The New York office of Sberbank CIB indeed hired Podesta Group. Engagement of external consultants is part of standard business practices for us,” Sberbank said.



Previously, The Daily Caller reported that Tony Podesta was proactively lobbying for cancellation of a range of anti-Russian sanctions against the banking sector. In particular, he represented interests of Sberbank and was paid $170,000 for his efforts over a six-month period last year to seek to end one of the Obama administration’s economic sanctions against that country.  Podesta, founder and chairman of the Podesta Group, is listed as a key lobbyist on behalf of Sberbank, according to Senate lobbying disclosure forms. His firm received more than $24 million in fees in 2016, much of it coming from foreign governments, according to the nonpartisan Center for Responsive Politics.



Regular readers will recall that the Sberbank-Podesta relationship goes back many years. Sberbank was the lead financial institution in the Russian deal to purchase Uranium One, owned by one of Bill Clinton’s closest friends, Frank Giustra. Giustra and Bill Clinton lead the Clinton-Giustra Enterprise Partnership, an integral part of the Clinton Foundation.

Consider if any or all of the above had taken place among any of the Trump administration – what would have occurred? How villified would the offender have been? As Mike Krieger concludes, personally, I doubt any of the above is a huge deal, and I certainly don’t think Podesta is working for Vladimir Putin under the table. However, just imagine the hysteria if the above narrative could’ve been connected to anyone in Trump’s orbit. It would’ve been plastered on the front page of The Washington Post and The New York Times with headlines like, “More Financial Ties Emerge Between Those in Trump’s Orbit and Putin.”

Naturally, you won’t see this story hyped because it doesn’t fit the corporate media narrative, and the narrative is all they care about.



It seems that the Intel Committee is divided:  they just cancelled all meetings for the week;

(courtesy zero hedge)

(courtesy zero hedge)

(courtesy zerohedge)

Richmond Fed mgf survey (soft data) beats by 6 sigma ( 6 std deviations)

(courtesy zero hedge)

Tuesday Humor: Richmond Fed Smashes Expectation by Six Standard Deviations

The Richmond Fed Manufacturing Survey has now risen for 7 straight months, soaring to 22 in March – the highest since April 2010.

 This smashed expectations by over six standard deviations as new orders, employees, workweek, and wages all soared.


Given the stagnation of industrial production, there must be something very special in Richmond…

Consider – the last time Richmond Fed printed this high, Industrial Production was growing at over 8% YoY!! Today it is up 0.3%!



Wow!! this is something!! Gallup has now come out and stated that the consumer confidence in the USA is in shambles and did not grow as indicated above by the Conference board!

(Gallup/zero hedge)

And Now Fake Consumer Confidence Too: Gallup Says Confidence In The Economy “Tumbled”

It appears we can now add “consumer confidence” to fake news trash heap.

Roughly at the same time as the allegedly apolitical Conference Board reported the highest consumer confidence print in 17 years…


… not to mention the most optimistic outlook on stocks since 2 months before the dot com bubble burst, a very different number emerged from a similar poll by Gallup.

First, a reminder of what the Conf. Board said this morning:

Consumer confidence increased sharply in March to its highest level since December 2000 (Index, 128.6),” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current business and labor market conditions improved considerably. Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs and personal income prospects. Thus, consumers feel current economic conditions have improved over the recent period, and their renewed optimism suggests the possibility of some upside to the prospects for economic growth in the coming months.”

The result was based on a random survey of 3,000 people in the latest month.

Meanwhile, in the week of March 20-26, Gallup surveyed a random group of (supposedly different) 3,547 adults, and found something completely different, namely that

Americans’ confidence in the U.S. economy tumbled along with the Dow Jones industrial average last week. Though still in positive territory, Gallup’s U.S. Economic Confidence Index (ECI) dropped six points to a score of +5 for the week ending March 26. This is the lowest weekly average since the presidential election in November.

chart 1

How is this divergence possible? Simple: Gallup actually admits the reflexive nature of the primary driver of “confidence”, the stock market… the same stock market which according to headlines on CNBC and elsewhere jumped today because consumer confident rose. “Americans’ falling confidence in the economy may be tied to events in Washington and on Wall Street. Last week, the Dow logged its worst week since September as congressional Republicans ultimately failed to vote on legislation that would repeal and replace the Affordable Care Act.”

That, however, is hardly the entire story, because confidence waned prior to the effort to replace the ACA dying in Congress on Friday. “This suggests that the broader GOP infighting earlier in the week, rather than the decision to pull the bill itself, may have been a factor, in addition to the market’s poor performance.”

And yet, none of this decline was captured by the Conference Board, almost as if it serves a specific political, or maybe market manipulating purpose.

As Gallup also adds, confidence did not drop evenly across party lines. Rank-and-file Republicans became significantly less confident in the economy last week, with their index score falling to a still-robust +42 from +52 the week before. Independents, too, lost confidence, with their score retreating back into negative territory to -1 from +6 the previous week. Democrats’ confidence in the economy changed little, with their current -20 score similar to the -18 they had in the week prior.

That was not all: Americans’ assessments of current economic conditions took a seven-point hit for the week ending March 26 after reaching a high of +17 in the prior week. This loss marked the largest drop for this component since the federal government shutdown in October 2013.

The current +10 score is the result of 32% of Americans rating the economy “excellent” or “good,” and 22% rating it “poor.” This collapse in current economic conditions was strangely missing from the group of 3,000 adults polled by Nielsen which does the Conference Board surveys.

Meanwhile, Gallup’s economic outlook component of the ECI fell five points, but enough to send this component back into the negative territory for the first time since the election. Americans’ economic outlook had already dropped significantly in March. The current -1 score is the result of 46% of Americans saying the economy is “getting better,” and 47% saying it is “getting worse.”

chart 2

The Gallup bottom line: “A rocky week on Wall Street may have hurt Americans’ confidence in the economy’s health. The failure of Republicans to repeal the ACA didn’t seem to immediately affect confidence further, at least in the short term. However, if losses on Wall Street continue this week, the situation may contribute to further erode confidence in the coming days. If confidence does fall more, it may result in Americans’ net evaluation of the economy growing more negative than positive for the first time since the election.

Donald Trump’s election spurred a renewed level of confidence among his fellow Republicans, which boosted the overall average for the index into positive territory. But, if his supporters perceive that the promises he made during the campaign are not being kept, or if Republicans lose faith in Trump’s negotiating prowess, the party rank and file could become further depressed.

So which data is right: the Conference Board’s surge to near record highs, or Gallup’s “plunge” to the lowest of Trump’s tenure? Frankly, at this point, with every other piece of (fake) news, data and analysis having the same credibility, what difference does it make



Good reason for the NY stock market to rise today:  NY retail vacancies are soaring and this is causing massive rent concessions:

(courtesy zero hedge)

NYC Retail Vacancies Soar Prompting Massive Rent Concessions

It used to be that taking a 10-minute walk around SoHo meant passing by at least a dozen upstart, trendy fashion retailers eager to sell you a $500 hoodie or $1,000 pair of sneakers.  But these days you’re much more likely to see a whole bunch of this:

NYC Vacancies


As Bloomberg points out this morning, in the wake of Manhattan’s retail drought, commercial landlords, who have seen retail occupancy levels plummet over the past 12 months, are doing everything possible to avoid big price cuts.  Instead, like residential landlords, commercial real estate owners are providing massive rent concessions through things like interior redesigns and moving expenses to keep storefronts from going empty.

Tenant-improvement allowances haven’t been typical in the Manhattan retail market. But now the concessions, which can pay for anything from lighting and displays to a complete overhaul, are becoming a key component in some new leases, particularly for large, flagship stores in high-profile areas, such as Madison Avenue and Fifth Avenue, according to Steve Soutendijk, an executive director at brokerage Cushman & Wakefield Inc.


“We’re seeing tenant-improvement and concession packages that retail landlords never, ever contemplated before,” he said.


The sweeteners signal that the balance of power is tilting toward merchants in Manhattan after a relentless surge in rents during the past five years. Landlords facing rising vacancies are more willing to negotiate with retailers, who have gotten battered by the rapid rise of e-commerce and have shied away from committing to costly, long-term leases.


The incentives are “a creative solution that landlords are using now to get deals done,” said Jeffrey Roseman, an executive vice president at Newmark Grubb Knight Frank Retail. “It’s a way to get over the hump.”

Retail Rent


And a perfect example of NYC’s desperation to fill retail store frontage comes from a 15-year lease the Nike just signed on a 70,000 sq. ft. space on 5th Avenue.  In order to fill a space that has been empty since 2013, landlords SL Green and Jeff Sutton agreed to, among other things, take over Nike’s existing lease at another location.

In the city’s largest retail lease of 2016, Nike in December signed a 15-year agreement to rent 69,214 square feet across seven floors at 650 Fifth Ave. in Midtown. Landlords SL Green Realty Corp. and Jeff Sutton had been working to fill the space since acquiring the property in 2013. They bought out the leases of Devon & Blakely and Godiva and committed to adding three additional floors and rerouting the storefront’s entrance, according to a presentation in December for SL Green’s investors.


“That deal did not come easy by any stretch,” Andrew Mathias, president of SL Green, said while discussing the Nike lease at the investor conference.
Nike Deal.


As part of Nike’s deal at 650 Fifth Ave., the landlords offered to take over the company’s lease obligation at an existing store about five blocks away and adjacent to Trump Tower, according to a person with knowledge of the transaction who asked not to be named because the terms are private.



As The Real Estate Board of New York recently noted, retails rents in Manhattan are down pretty much across the board with rents in trendy areas like SoHo off around 10% YoY and high-end store frontage on the Upper East Side down a staggering 24%.

Increasing retail inventory and a slower retail sales environment in New York City have started to affect  ground floor asking rents in Manhattan’s most prominent retail corridors.  The Real Estate Board of New York’s (REBNY) Fall 2016 Manhattan Retail Report shows that average asking rents declined in 11 of the 17 retail corridors surveyed, which is a shift from Spring 2016 when availability was accumulating in some corridors, but the effect on asking rents was subdued.


Madison Avenue, between 57th and 72nd Streets, on the Eastside is one such corridor that is suffering from an increased availability of ground floor retail spaces.  As the corridor’s inventory level rose in Fall 2016, the average asking rent decreased eleven percent to $1,433 per square foot from $1,613 in Fall 2015.  Additionally, an increase in the availability for less expensive ground floor spaces in the corridor caused a 22 percent drop in the median asking rent to $1,350 from $1,728 per square foot last year.


Increased retail inventory has also hurt asking rents Downtown in SoHo, on Broadway between Houston and Broome Streets.  The average asking rent for ground floor space in this corridor fell nine percent to $755 per square foot from $831 last fall.


Midtown South asking rents in Herald Square on West 34th Street, between Fifth and Seventh Avenues, fell eleven percent year-over-year from $836 to $745 per square foot of ground floor space.  This decline was caused by a combination of increased supply and supply being concentrated on the south side of the corridor.  Spaces on the north side of West 34th Street typically offer wider street frontage, while spaces on the south side are usually smaller and more limited in frontage.

NYC Rents


Seems the retail rents are just “too damn high.”


Well that about does it for tonight

I will see you tomorrow night


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