April 4/We now have the mechanism used by the crooks when they cash settle and then roll to a future month: it is an obscure off comex contract which allows they to roll as well as getting a fiat bonus/ No change in inventory at the GLD/No change in inventory at the SLV/Silver comex open interest rises to almost 219,000 contracts/ Susan Rice to testify at the House Intelligence Panel/

Gold: $1255.00  UP $4.20

Silver: $18.30  UP 11  cents

Closing access prices:

Gold $1256.60

silver: $18.32!!!










Premium of Shanghai 2nd fix/NY:$xxx


LONDON FIRST GOLD FIX:  5:30 am est  1258.65




For comex gold:



For silver:

For silver: APRIL


Total number of notices filed so far this month: 333 for 1,665,000 oz



The FRBNY just released its March report on Gold movement at the FRBNY:

In February’s report: 7841 billion dollars worth of gold was in inventory valued at $42.22 per oz

In the March report:  78.41 billion dollars worth of gold was in inventory valued at $42.22 per oz

No of gold oz moved:  zero


The open interest in silver continues to advance with today’s reading close to 219,000 contracts or about 5,000 contracts below the record set last year.  The price of silver is a good $2.12 below the price when the record OI was set. There is no question that the hedge funds together with a possible sovereign entity are willing to take on the crooked bankers.

Today we learned how the bankers are cash settling comex contracts once we enter an active delivery month.  There is an obscure private contract called an EFP which allows a banker to enter into a contract with a long to receive a bonus fiat along with a roll to the next active delivery month. The transaction is private so we do not know how much bonus they received. Thus every time that I told you that comex contracts were “cash settled” these past several years, they actually were cash settled as I described above. This kills the spirit of a physical delivery process!!

Let us have a look at the data for today





In gold, the total comex gold also ROSE BY 3512 contracts WITH THE  RISE IN THE PRICE OF GOLD ($3.50 with YESTERDAY’S TRADING). The total gold OI stands at 421,066 contracts.

we had 134 notice(s) filed upon for 13,400 oz of gold.


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


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

Inventory rests tonight: 836.77 tonnes



We had no changes in inventory at the SLV/

THE SLV Inventory rests at: 330.326 million oz



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

1. Today, we had the open interest in silver ROSE BY ANOTHER UNBELIEVABLE 2,563 contracts UP TO  to 218935 DESPITE THE FACT THAT SILVER WAS DOWN 4 CENT(S) with YESTERDAY’S trading. The gold open interest ROSE BY 3512 contracts UP to 421,066 WITH THE RISE IN THE PRICE OF GOLD TO THE TUNE OF $3.50  (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 HOLIDAY/ /Hang Sang CLOSED HOLIDAY  . The Nikkei closed DOWN 172.98 OR 0.91% /Australia’s all ordinaires  CLOSED DOWN 0.24%/Chinese yuan (ONSHORE) closed at PAR 6.8872/Oil ROSE to 50.44 dollars per barrel for WTI and 53.34 for Brent. Stocks in Europe ALL MIXED   ..Offshore yuan trades  6.8789 yuan to the dollar vs 6.8872 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN AT PAR AND THE OFFSHORE YUAN MUCH  WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS SATISFIED WITH WASHINGTON’S RESPONSE 




Finally a key advisor to Abe is telling him to pull the plug on QE

( zero hedge)


Not a very good start to 2017 for China as we witness the highest number of corporate defaults in history

( zero hedge)





Brazil who is not part of OPEC or the deal to cut production reports a huge 14.6% jump in February output.  This is good for Brazil with the balance of payments but bad for oil as production increases everywhere:

( Calcuttawala /oilPrice.com)


Venezuela will be entering hyperinflation very shortly as its money supply soared by 200% in a year.  Hyperinflation can see increases of 1000’s%

( zerohedge)


i)I now have a good grip on why the front active gold month’s open interest collapses without a noticeable price decrease.  There is an obscure comex mechanism called EFP’s which is nothing but an off comex transaction which allows the short gold holder from delaying delivery with some sweeteners. Generally there is only a few trade but lately the volume of these has escalated.  In April 35,000 contracts or 111 tonnes of gold was transferred to June.  Both Andrew Maguire and James Turk believe that we may have a sovereign behind these delayed deliveries and June would be an ideal month to finally take delivery on all of its gold.

this is a must must read..

( James Turk/Kingworldnews)

ii)Craig Hemke explains how imaginary supply from the futures are keeping silver down in price

( Craig Hemke/TFMetals)

iii)European refiners are consolidating with the merger of Argor-Heraeus and Heraeus Precious Metals

( Ronan Manly)

iv)Proven and Probable interviews Bill Murphy of GATA

( Chris Powell/GATA)

v)Chris Powell comments on how Michael Kramer of Mott Capital totally misses the point on central bank gold intervention as to why gold does not keep up with inflation

(courtesy Chris Powell/GATA)

10. USA stories

i)Rand Paul suggests that Rice should testify under oath whether Obama ordered her to “unmask” the Trump team:

( zero hedge)

ii)This is no doubt criminal activity as Susan Rice used detailed spreadsheets on intercepted phone calls of the Trump team.  This was a co -ordinated attack  to use the full force of the uSA intelligence apparatus to take down a political adversary, namely Donald Trump

( zero hedge)

iii)Susan Rice responds to Trump unmasking allegations that she did not leak anything. Wishing thinking!

(courtesy zero hedge)

iv)That did not take long:  the House Intelligence panel will now ask Susan Rice to testify.

popcorn anyone?  or will she plead the 5th!

( zero hedge)

v)Two big changes to the former Health care bill and now Trump seeks by Friday its passage.  Let us wait for the CBO to report its costs!

( zero hedge)

vi a)Paul Ryan then quashes hope for a quick 2nd try at healthcare.  He states that the new health care bill is only in the conceptual stage:

( zero hedge)

vi) b.  The USA trade deficit shrank by 5 billion USA from $48 billion down to $43. 6 aided by the lower dollar. The trade deficit with China fell by 4.9%

( zero hedge)

vi c)uSA factory orders rise by 7.3% year over year but do not get too excited: it was mainly defense spending

( zero hedge)

vii)Dallas Mayor pulls his support for a massive taxpayer bailout of the Police and Fire pension fund.  The only way out if bankruptcy and start all over again

( zero hedge)

viii a )USA retail “bricks and mortar” bankruptcies soar in 2017:

( zero hedge)

viii b)The closing of Ralph Lauren’s flagship 5th Avenue store is a good Bellwether on what is going on in the  USA economy

( zero hedge)

ix)Michael Snyder discusses the upcoming economic collapse:

two commentaries

( Michael Snyder/Economic Collapse Blog)

x)Fed Hawk Lacker resigns after admitting he leaked that confidential Fed information to Medley in 2012.  He did not leave voluntarily:

(courtesy zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 3,512 CONTRACTS UP to an OI level of 421,066 WITH THE  RISE IN THE PRICE OF GOLD ( $3.50 with YESTERDAY’S trading). We are now in the contract month of APRIL and it is one of the BETTER delivery months  of the year. In this APRIL delivery month  we had AN ANOTHER  LOSS OF 241 contract(s) FALLING TO 2,550. We had 57 notices served yesterday so we lost another 184 contracts or 18,400 oz will not stand for delivery in the active delivery month of April.

At the end of April/2016 only 12.3917 tonnes stood for physical delivery, although 21.306 tonnes stood initially at the beginning of April 2016.

The non active May contract month LOST 337 contract(s) and thus its OI is 2716 contracts. The next big active month is June and here the OI ROSE by only 2745 contracts up to 301,526.

We had 134 notice(s) filed upon today for 13400 oz

 And now for the wild silver comex results.  Total silver OI ROSE BY ANOTHER 2563 contracts FROM 216,372 UP TO 218,935 WITH YESTERDAY’S 4 CENT LOSS.  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 5,000 CONTRACTS AWAY FROM RECORD HIGHS IN OI AND YET WE ARE $2.19 BELOW THE PRICE OF $20.44 WHEN THAT RECORD WAS SET.

We are in the NON active delivery month is APRIL  Here the open interest fell by only 2 contracts. We had 0 notices filed yesterday so we lost only 2 contracts or an additional 10,000 oz will not stand for delivery.

The next active contract month is May and here the open interest GAINED 61 contracts UP to 156,871 contracts which is astonishingly high.The non active June contract gained its initial 8 contracts to stand at 8. The next big active month will be July and here the OI gained 1445 contracts up to 35,297.


For those keeping score, the initial amount of silver oz that stood for delivery for the May contract month: 28.01 million oz.  By conclusion of the month only 13.58 million oz stood and the rest was cash settled.


We had 62 notice(s) filed for 310,000 oz for the APRIL 2017 contract.

VOLUMES: for the gold comex

Today the estimated volume was 152,595  contracts which is FAIR.

Yesterday’s confirmed volume was 150,273 contracts  which is FAIR.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for APRIL
 April 4/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 97,063.619 oz
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 128,460.744 oz
No of oz served (contracts) today
134 notice(s)
13,400 OZ
No of oz to be served (notices)
2416 contracts
241600 oz
Total monthly oz gold served (contracts) so far this month
355 notices
35500 oz
1.104 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   97,063.619oz
Today we HAD 2 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits: 0 oz
We had NIL dealer withdrawals:
total dealer withdrawals:  NIL oz
we had 2  customer deposit(s):
 i) Into HSBC  64,128.593 oz
ii) Into Scotia: 64,300.000 oz  ?? suspect!
total customer deposits; 128,460.744   oz
We had 2 customer withdrawal(s)
 i) Out of HSBC: 89,026.119 oz
ii) Out of Scotia: 8037.500 oz  (250 kilobars)
total customer withdrawal:  97,063.619  oz
 we had 2 adjustments: and very unusual:
i) Out of HSBC: 83,289.35 oz accounting error???
ii) Out of Delaware: 1643.201 oz  accounting error???

Today, 0 notice(s) were issued from JPMorgan dealer account and 100 notices were issued from their client or customer account. The total of all issuance by all participants equates to 134 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 28 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

To calculate the initial total number of gold ounces standing for the APRIL. contract month, we take the total number of notices filed so far for the month (355) x 100 oz or 35,500 oz, to which we add the difference between the open interest for the front month of APRIL (2550 contracts) minus the number of notices served upon today (134) x 100 oz per contract equals 277,100 oz, the number of ounces standing in this  active month of APRIL.
Thus the INITIAL standings for gold for the APRIL contract month:
No of notices served so far (355) x 100 oz  or ounces + {(2550)OI for the front month  minus the number of  notices served upon today (134) x 100 oz which equals 277,100 oz standing in this non active delivery month of APRIL  (8.6189 tonnes)
 We had 21.206 tonnes of gold initially stand for delivery in April 2016.  By the month’s conclusion we had only 12.39 tonnes stand.
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 4 months of  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/2016.   29.931 tonnes
JAN/2017     3.9004 tonnes
FEB/ 18.734 tonnes
March: 0.5816 tonnes
April/2017: 8.6189
total for the 16 months;  253.443 tonnes
average 15.840 tonnes per month
Total dealer inventory 983,188.826 or 30.528 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,903,407.737 or 276.93 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 276.93 tonnes for a  loss of 26  tonnes over that period.  Since August 8/2016 we have lost 77 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
And now for silver
 April 4. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
201,289.88 oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 1,201,651.290 oz
No of oz served today (contracts)
(310,000 OZ)
No of oz to be served (notices)
472 contracts
(2 360,000  oz)
Total monthly oz silver served (contracts) 333 contracts (1,665,000 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  201,289.88 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 Scotia:  201,289.88
 We had 2 deposits:
i) Into CNT:  599,742.480 oz
ii) Into JPMorgan:  601,708.810 oz
***deposits into JPMorgan have now resumed.
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
total customer deposits; 1,201,656.290  oz
 we had 2 adjustment(s)
i) Out of CNT:  300,305.910 oz leaves the customer account and enters the dealer account of CNT
ii) Out of Delaware:  8883.67 oz accounting error???
The total number of notices filed today for the APRIL. contract month is represented by 62 contract(s) for 310,000 oz. To calculate the number of silver ounces that will stand for delivery in APRIL., we take the total number of notices filed for the month so far at 333 x 5,000 oz  = 1,665,000 oz to which we add the difference between the open interest for the front month of APRIL (472) and the number of notices served upon today (62) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the APRIL contract month:  333(notices served so far)x 5000 oz  + OI for front month of APRIL.( 472 ) -number of notices served upon today (62)x 5000 oz  equals  3,715,000 oz  of silver standing for the APRIL contract month. 
We lost 2 contracts or an additional 10,000 oz will stand for delivery in this non active delivery month of April.


Initially for the April 2016 contract1,180,000 oz stood for delivery.  At the end of April 2016: 6,775,000 oz stood as bankers needed much silver to fill major holes elsewhere.

Volumes: for silver comex
Today the estimated volume was 52,108 which is EXCELLENT 
Yesterday’s  confirmed volume was 54,427 contracts  which is EXCELLENT!!.
Total dealer silver:  29.802 million (close to record low inventory  
Total number of dealer and customer silver:   191.214 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.


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 6.6 percent to NAV usa funds and Negative 6.8% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.2%
Percentage of fund in silver:39.6%
cash .+0.1%( April 4/2017) 
 Sprott figures later tonight
2. Sprott silver fund (PSLV): Premium RISES  to -55%!!!! NAV (April 3/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to – 0.01% to NAV  ( April 3/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -55% /Sprott physical gold trust is back into NEGATIVE territory at -0.01%/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.



And now the Gold inventory at the GLD

April 4/no change in gold tonnage at the GLD/Inventory rests at 836.77 tonnes

April 3.2017: a huge deposit of 4.45 tonnes of gold into the GLD/Inventory rests at 836.77 tonnnes

March 31/another withdrawal of 1.19 tonnes of gold inventory fro the GLD/this inventory would no doubt be heading for Shanghai/GLD inventory: 822.32 tonnes

March 30/no changes in gold inventory at the GLD/Inventory rests at 833.51 tonnes

March 29/a withdrawal of 1.78 tonnes of gold out of the GLD/Inventory rests tongith at 833.51 tonnes

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

April 4 /2017/ Inventory rests tonight at 836.77 tonnes


Now the SLV Inventory

April 4/no change in inventory at the SLV/Inventory rests at 330.326 million oz/

April 3.2017; a withdrawal of 568,000 oz from the SLV/Inventory rests at 330.326

million oz/

March 31/no change in inventory at the SLV/Inventory rests at the SLV/Inventory rests at 330.894 million oz/
March 30/a huge withdrawal of 2.746 million oz from the SLV/inventory rests at 330.894 million oz/
March 29/a deposit of 1.136 million oz into the SLV/Inventory rests at 333.640 million oz
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/
April 4.2017: Inventory 330.326  million oz

Major gold/silver trading/commentaries for TUESDAY


Invest In Gold – 46 Trillion Reasons Why

Buy Gold – 46 Trillion Reasons to Buy

By Robert Guy in Barron’s

Gold’s 200-day moving average again proved to be a barrier for the precious metal, which in late Asian trading was around $1,250 an ounce. It had traded as high as $1,258 an ounce overnight.

Gold in USD 1 Year – GoldCore.com

But the pullback is unlikely to dent the faith of gold bulls who remain convinced that the yellow metal’s worth will be proved over coming years as the Fed attempts to normalize U.S. interest rates.

One bull is Trey Reik, a senior portfolio manager with Sprott Asset Management. In a new commentary, he’s convinced that gold’s value as protector of portfolios will become apparent as the Fed hikes rates at a time of low quality U.S. growth and high valuations on financial assets. Here’s his take:

“We maintain high confidence that the eroding quality of U.S. economic growth guarantees that U.S. financial asset prices will eventually reflect their true eroding intrinsic value, to gold’s significant benefit. Along the way, such as during the S&P 500 Index declines of 2000-2002 (50%) and 2007-2009 (57%), gold has provided unparalleled portfolio protection as over-exuberant faith in U.S. financial assets has been punished.”

He points out that since the first quarter of 2009, U.S. household net worth has increased $38.016 trillion – from $54.790 trillion to $92.805 trillion – compared to a $4.766 trillion increase in nominal GDP (from $14.090 trillion to $18.856 trillion). That means U.S. household net worth has grown at eight times the rate of underlying GDP growth.

U.S. household net worth ($92.805 trillion) is now 492% of GDP, which is 40% higher than the 353% average during the five decades prior to the Greenspan/Bernanke/Yellen era. That’s a pace of growth viewed as unsustainable.

Here’s Reik in his own words:

“Given the poor savings and growth rates of the past 16 years, our model suggests it would not be unreasonable for the ratio of HHNW-to-GDP to clear somewhere between 250% and 300%, implying a decline of between $36 trillion and $46 trillion in the aggregate value of the three major U.S. asset classes (stocks, bonds and real estate).”

The other issue that may play in gold’s favor is the pressure that may be brought to bear on corporate debt if the Fed raises rates as expected:

“Should the Fed’s recent shift in rate-hike urgency prove to be motivated by concern for stretched valuations of U.S. financial assets, as we suspect, it will be interesting to see just how far the Fed will go to press its message. We have long suggested the Fed’s reticence to raise rates has reflected concern for the instability of excessive U.S. debt loads, and now the Fed may finally be forced to raise rates out of concern for the instability of excessive U.S. equity valuations. Our long-term expectation of a “rock and a hard place” may be the immediate reality in which the Fed now finds itself.

If so, gold’s role as productive portfolio diversifier is about to reassume center stage.”

Full Barron’s Asia article here

Gold and Silver Bullion – News and Commentary

Gold rises to 1-week high on weaker dollar, geopolitical worries (Yahoo Finance)

Gold logs second straight gain as U.S. ISM data disappoint (MarketWatch.com)

Asia Stocks Drop as Yen Gains, Auto Shares Slump (Bloomberg.com)

UK airports and nuclear power stations on terror alert after ‘credible’ cyber threat (Metro.co.uk)

Dubai Precious Metals Conference to focus on blockchain technology (EconoTimes.com)



I now have a good grip on why the front active gold month’s open interest collapses without a noticeable price decrease.  There is an obscure comex mechanism called EFP’s which is nothing but an off comex transaction which allows the short gold holder from delaying delivery with some sweeteners. Generally there is only a few trade but lately the volume of these has escalated.  In April 35,000 contracts or 111 tonnes of gold was transferred to June.  Both Andrew Maguire and James Turk believe that we may have a sovereign behind these delayed deliveries and June would be an ideal month to finally take delivery on all of its gold.

Thus every time I stated that contracts were “cash settled”, the mechanism used was the EFP’s which is essentially a fiat bonus for cash settling in the front month and buying the next active delivery month. I guess for the past 10 years I have been correct.

this is a must must read..

(courtesy James Turk/Kingworldnews)



Obscure Comex mechanism getting heavy use, suggesting short squeeze in gold, Turk says


10:19a HKT Tuesday, April 4, 2017

Dear Friend of GATA and Gold:

GoldMoney founder and GATA consultant James Turk today tells King World News about evidence of a short squeeze in gold on the New York Commodities Exchange, where use of the obscure contract-settling mechanism of “exchange of futures for physicals” seems to be exploding. Turk’s analysis is posted at KWN here:


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



Craig Hemke explains how imaginary supply from the futures are keeping silver down in price

(courtesy Craig Hemke/TFMetals)



TF Metals Report: Infinite imaginary supply from futures keeps silver down


11a HKT Tuesday, April 4, 2017

Dear Friend of GATA and Gold:

The TF Metals Report’s Craig Hemke explains today how creation of futures contracts purporting to represent infinite supply of commodities, silver in particular, is used for price suppression purposes, making the commodity futures markets very different from the ordinary stock markets. The TF’s Metals Report’s analysis is headlined “Econ 101 — Silver Market Manipulation” and it’s posted here:


Indeed, back in 2001 the British economist Peter Warburton surmised that central banks had more or less induced their investment bank agents to expand greatly the use of derivatives like futures contracts to divert into financial assets the inflation created by central banks, keeping that inflation away from commodities, whose rising prices would manifest themselves plainly in consumer price indexes.

Warburton concluded that any commodity market that was attached to a futures market would be suppressed by investment banks at the instigation of central banks and that the only investment hedges against inflation that would succeed would be commodities for which no futures contracts were traded.

Warburton’s essay, “The Debasement of World Currency: It’s Inflation But Not As We Know It,” is posted at GATA’s internet site here:


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


European refiners are consolidating with the merger of Argor-Heraeus and Heraeus Precious Metals

(courtesy Ronan Manly)

Ronan Manly: More consolidation in gold refinery business in Europe


11:15a HKT Tuesday, April 3, 2017

Dear Friend of GATA and Gold:

Bullion Star’s Ronan Manly today reports more consolidation in the European gold and silver refinery business, the acquisition of Argor-Heraeus by Heraeus Precious Metals. Manly’s report is headlined “German and Swiss Precious Metals Refiners Join Forces as Heraeus Acquires Argor-Heraeus” and it’s posted at Bullion Star here:


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



Proven and Probable interviews Bill Murphy of GATA

(courtesy Chris Powell/GATA)

Proven and Probable interviews GATA Chairman Murphy


11:22a HKT Tuesday, April 4, 2017

Dear Friend of GATA and Gold:

GATA Chairman Bill Murphy, interviewed by Maurice Jackson of Proven and Probable, says monetary metals prices would be far higher if they had kept up with inflation and had not been suppressed by central banks and investment banks. Murphy notes that the U.S. government is fully authorized by law to rig the monetary metals markets surreptitiously. The interview is 18 minutes long and can be heard at Proven and Probable’s internet site here:


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




Chris Powell comments on how Michael Kramer of Mott Capital totally misses the point on central bank gold intervention as to why gold does not keep up with inflation

(courtesy Chris Powell/GATA)

Yes, Michael Kramer, but WHY hasn’t gold kept up with inflation?


1:25p HKT Tuesday, April 4, 2017

Dear Friend of GATA and Gold:

Writing this week at Investopedia, fund manager Michael Kramer of Mott Capital Management in Garden City, New York, notes that the gold price in recent decades has not kept up with inflation, a point GATA has made for many years and that GATA Chairman Bill Murphy and GoldMoney founder and GATA consultant James Turk repeated this week.

Unfortunately Kramer uses this observation only to disparage gold as an investment, not as a point of departure for investigation. That is, if inflation manages to keep up with itself, why can’t gold keep up with it?

Of course Kramer could place himself with the “don’t care” crowd and assert that all he cares about for himself and his investors is profit, no matter how obtained. But what if the gold market is being rigged surreptitiously by governments and central banks to support their currencies and bond prices? And what if this rigging is distorting other markets and, indeed, destroying the world’s market economy? Would that still be of no concern to investment professionals?

Is a little truth telling really out of the question for them — say, acknowledging that gold is a lousy investment because governments and central banks wage desperate war against it and that the way to profit is to invest as coerced by governments and central banks, free markets and human liberty itself be damned?

Or should investors and citizens be given only half the story about gold, lest their illusions be disturbed?

Kramer’s commentary is headlined “Not All that Glitters Is Worth Owning, Especially Gold” and it’s posted at Investopedia here:


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


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


1 Chinese yuan vs USA dollar/yuan AT PAR  6.8872(  NO REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES WEAKER TO ONSHORE AT   6.8789/ Shanghai bourse CLOSED   / HANG SANG CLOSED

2. Nikkei closed DOWN 192.98 POINTS OR 0.91%   /USA: YEN FALLS TO 111.39

3. Europe stocks opened ALL MIXED      ( /USA dollar index RISES TO  100,68/Euro DOWN to 1.0647


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  50.44 and Brent: 53.34

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.247%/Italian 10 yr bond yield UP  to 2.268%    

3j Greek 10 year bond yield RISES to  : 7.054%   

3k Gold at $1258.70/silver $18.35 (8:15 am est)   SILVER  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 37/100 in  roubles/dollar) 56.46-

3m oil into the 50 dollar handle for WTI and 53 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 NO REVALUATION / NO MOVEMENT from POBC.


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0025 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0676 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  +.247%

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 2.323% early this morning. Thirty year rate  at 2.963% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Futures Slide As Weak Start To Q2 Continues Amid Global Growth, Political Jitters

Global stocks were pressured by a poor start to the second quarter in the US, where carmakers reported disappointing sales data, slamming auto stocks around the globe. The selling has persisted for a second day, with Asian stocks and European shares all partially in the red today after their biggest decline in two weeks. Car sector is biggest mover in Europe, offsetting gains in financial services and media. A modest flight to safety saw gold strengthen with the dollar edging up against a basket of major currencies but losing ground against the safe-haven Japanese yen while South Africa’s dropped on a ratings downgrade.

U.S. index futures declined after stocks fell close to their 50-day moving average and as investors weigh risks to the economy’s outlook, including whether fiscal stimulus will be carried out. S&P 500 contracts expiring in June slipped 0.2 percent to 2,351.50 at 6:36 a.m. in New York. The benchmark dropped Monday, the first day of the second quarter, with falling bond yields weighing on banks and energy companies, while automakers slid as a collapse in monthly sales offered a warning that Americans may have become more thrifty.

A gauge of stocks around the world fell a third day after auto companies’ monthly sales offered a warning that Americans may be spending less on cars even with record auto debt available. South Africa’s rand extended declines for a seventh day after the country lost its investment-grade credit rating from S&P Global Ratings for the first time in 17 years; on Tuesday the ZAR fell as much as 1.9 percent before recovering to trade down 1.1 percent at 13.83 per dollar while bank shares tumbled after the credit rating cut in response to President Jacob Zuma’s dismissal of his finance minister, Pravin Gordhan, last week. Yields on South African dollar-denominated government bonds rose, with the 10-year benchmark yielding nearly 5 percent.

The concerns surrounding the big picture, and specifically reflation trade, remain the same: as Bloomberg summarizes, investors are taking stock ahead of a key U.S. payrolls report on Friday and minutes from the Federal Reserve’s latest meeting on Wednesday. After the best quarter for U.S. equities since 2013, traders are starting to question whether optimism about U.S. President Donald Trump’s pro-growth policies has gone too far. Veteran money manager Bob Doll wrote in an April 3 letter to clients that sentiment on the economy may be too high, leaving investors vulnerable to negative surprises.

“The hard data is beginning to wobble and that’s going to cause some of the Trump trades to come under pressure,” Tim Haywood, investment director at GAM (UK) Ltd. said in an interview with Bloomberg TV. “Dents in car sales are perhaps an early warning of a little bit of weakness in the U.S. economy.”

Automaker stocks were the main drag on Tokyo shares on Tuesday; the Nikkei fell 0.9 percent to a 10-week low, also hit by the impact of the strong yen on exporters. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 percent, having hit a 21-month high last week. The MSCI All Country World Index fell 0.1%, extending its longest decline in almost two weeks. The Stoxx Europe 600 index was unchanged, as gains in energy shares offset declines in auto stocks. Futures on the S&P 500 lost 0.2% . The S&P cash index slid 0.2% on Monday after a persistent rebound was catalyzed by relentless selling of VIX futs.

Gold topped $1,260 and is headed for the highest close since the aftermath of the U.S. election and the yen was the top performer among major currencies.

The dollar rallied versus all of its Group-of-10 peers except the yen as risk-off sentiment gained traction with French elections firmly back in traders’ focus. On the European political front, today we get the second live and televised French presidential debate tonight so that is worth keeping an eye on. While first round polls still heavily favour a Macron-Le Pen one-two, Melenchon has gained additional support in recent weeks largely at the expense of Fillon and Hamon. Indeed the Ifop-Fiducial poll from Mar  30th-3rd April shows Macron and Le Pen as taking home 26% and 25.5% of the votes in the first round, followed then by Fillon with 17% and Melenchon with 15%. The same pollster had Melenchon with 11.5% of the votes back on March 20th and Fillon with 18%.

Japan’s currency strengthened, with local banks adding longs as the new fiscal year got under way, according to foreign- exchange traders in Europe quoted by Bloomberg. With French presidential elections getting airtime and global equities under pressure this week, the yen drew haven demand. Risk-off-dominated flows meant the Swiss franc was also stronger, albeit in tighter ranges.

“(The yen buying) is based on broad-based risk-off since yesterday. There was a tragedy in Russia and there may be some hedging-type buying ahead of the French presidential debate and also French elections in three weeks,” said Yujiro Gato, currency analyst with Nomura in London.

Dollar-yen was lower a third day as increased bearish momentum threatened February lows above the psychological level of 110. The euro and the Australian dollar fell to their lowest levels versus the yen in more than four months, with price action dropping below important technical levels. Moves in yen crosses may have been partially driven by a steepening in low-delta option structures. Implied volatilities were bid as demand for long vega positions gained traction on the back of increased risk-off sentiment, said the traders. Upcoming tier-one data out of the U.S. coupled with a meeting between President Donald Trump and Chinese President Xi Jinping have also caused a lift of bids in options.

The Bloomberg dollar index, or BBDXY, rose 0.2%, higher a second day; support came as Treasury yields attempted to rebound and pare Monday’s decline.

Yields on low risk U.S. and German government bonds fell. falls. Benchmark 10-year U.S. Treasury yields were down 2 basis points at 2.33 percent after falling as low as 2.31 percent, its lowest in more than a month, in Asian trade. German 10-year yields touched their lowest level since March 1 and last stood at 0.26 percent, down 1.6 bps. Italy’s bonds outperformed the rest of the euro zone on the prospect of help for two struggling Italian lenders.

Yields on the bonds of Banca Popolare di Vincenza and Veneto Banca fell sharply after a European Commission spokesperson said late on Monday said there could be a solution on a bailout. Italian 10-year government bond yields fell 2.7 bps to 2.3 percent. (Harvey: not a chance)

“Italy’s banking sector has been a never-ending story, so any news pointing towards state support reduces the risk of a more severe development that could be the beginning of a banking crisis,” said DZ Bank strategist Daniel Lenz.

Today we get factory orders and durable goods data while the sole Fed spearker, Tarullo speaks in Princeton.

* * *

Bulletin Headline Summary from RanSquawk

  • The subdued start to Q2 continues today, with equities picking up today where they left off yesterday, trading mixed with little in terms of firm direction
  • Mixed trade across the board in FX to a larger degree, with the JPY buying finding its limits, notably ahead of 110.00 against the USD as Treasuries top out for now.
  • Looking ahead, highlights include US Trade Balance, ECB’s Draghi, ECB’s Liikanen and Fed’s Tarullo

Market Snapshot

  • S&P 500 futures down 0.2% to 2,351.5
  • STOXX Europe 600 donw 0.03% to 379.19
  • MXAP down 0.3% to 147.25
  • MXAPJ down 0.3% to 479.88
  • Nikkei down 0.9% to 18,810.25
  • Topix down 0.8% to 1,504.54
  • Hang Seng Index up 0.6% to 24,261.48
  • Shanghai Composite up 0.4% to 3,222.51
  • Sensex up 1% to 29,910.22
  • Australia S&P/ASX 200 down 0.3% to 5,856.55
  • Kospi down 0.3% to 2,161.10
  • German 10Y yield fell 1.5 bps to 0.262%
  • Euro down 0.1% to 1.0657 per US$
  • Brent Futures down 0.4% to $52.92/bbl
  • Italian 10Y yield rose 0.6 bps to 2.028%
  • Spanish 10Y yield fell 0.6 bps to 1.637%
  • Gold spot up 0.4% to $1,258.85
  • U.S. Dollar Index up 0.1% to 100.70

Top Overnight Nights

  • Trump Cracks Down on Visa Program That Feeds Silicon Valley
  • Seadrill Drops to Record Low as It Warns of Shareholder Losses
  • ECB Said to See Vicenza, Veneto as Solvent, Needing $6.8 Billion
  • Amazon Launches Business Procurement Service in U.K.
  • Microsoft Reports Licensing Partnership With Casio
  • CenterPoint Proposes $250m Transmission Project to Regulator
  • Celgene Says Teva Submitted Application to Make Pomalyst Generic
  • Kate Spade Falls on Report That Takeover Process Is Bogging Down
  • BMW’s First 2017 Win Over Mercedes Narrows U.S. Luxury Race
  • Bob Diamond Mounts Latest Comeback From U.K.’s Minor Leagues
  • Intesa Insurance Unit Signs Partnership Deal With Aon
  • Indonesia to Grant Freeport 8-Month License to Resume Exports

Asian equity markets traded subdued amid holiday-thinned trade and following a lacklustre US close where sentiment was dampened by poor auto sales data for March. ASX 200 (-0.2%) was weighed by weakness in telecoms and financials, although the downside has been stemmed by buoyant commodity-related sectors. Nikkei 225 (-0.9%) lagged in the region amid a stronger JPY with Japanese auto makers also feeling the brunt from poor US sales, while markets in Mainland China and Hong Kong remained closed due to public holiday. 10yr JGBs trade higher with demand supported by safe-haven flows and after an encouraging 10yr auction where the b/c and accepted prices increased from last month, while the curve steepened with underperformance observed in the super long end. RBA kept the Cash Rate unchanged at 1.50% as expected and commented that unchanged policy is in line with growth and inflation targets. RBA also stated that the pick-up in inflation is expected to be gradual and that China faces medium term economic risks.

Top Asian News

  • U.S. Car Demand Collapses in Threat to Trump’s Factory Push
  • FX OPTIONS: Yen Volatility Spread Shows France Risks Dominate
  • CYBG/Virgin Money Have Strategic Reasons for Buying Co-Op: Citi
  • Investa Office Gets Non-Binding Offer From Cromwell Property
  • Topix Drops to Four-Month Low as Stronger Yen Pummels Exporters
  • U.S. Curve Flattest in 5 Months as Fed Outlook Lifts Short End

In European bourses, the subdued start to Q2 continues today, with equities picking up today where they left off yesterday, trading mixed with little in terms of firm direction. The energy sector continues its strong start to the quarter, with financials weighed on today by Deutsche Bank (-2.8%) as they enter their final day of their rights issuance, while Investec and Old Mutual are also at the bottom of the Stoxx 600 as they continue to feel the damage of their South African exposure. Fixed income markets have been pushing up across the board so far today, with European participants keeping an eye out for this evenings second French presidential election. With Macron seen as firm favourite after his performance in the last debate, a poor performance or any doubts of his ability to cross the finish line could see a widening of the GE/FR spread.

Top European News

  • French Candidates Return to Debate With Macron the Target
  • Merkel’s Party in Dead Heat With SPD as Schulz Sustains Momentum
  • WS Atkins May Be Subject to a Counterbid, Liberum Says
  • Novo CEO Says He’s Interested in Biopharmaceutical Acquisitions
  • Prysmian Top Italian Gainer; Goldman Raises PT on Market Trends
  • Nordea Wins Competition Authority Backing in Bank Fee Dispute
  • Mercedes, Bosch Join Forces to Accelerate Rollout of Robo- Taxis
  • Gibraltar Spat Shows How Bumpy the Road to Brexit Will Likely Be

In currencies, it has been mixed trade across the board in FX to a larger degree, with the JPY buying finding its limits, notably ahead of 110.00 against the USD as Treasuries top out for now. 10Yr yields have found support again ahead of 2.30%, and this serves as a firm prop, though we are watching Wall Street from here. The yen rose 0.3% to 110.50 per dollar, after climbing at least 0.4% in each of the previous two sessions. The Bloomberg Dollar Spot Index added 0.2 percent. The South African rand dropped 1.1 percent. The currency has tumbled 11 percent over the past seven days, the longest streak since August, amid a cabinet purge by President Jacob Zuma. The euro fell 0.1 percent and the British pound was 0.3 percent weaker. EUR/USD has been tight on 1.0650 however, with EUR/JPY sales taking the cross rate below 118.00. GBP/JPY has dropped under 138.00 accordingly, but is finding some support here as cross rate sellers coming in ahead of 0.8600 in EUR/GBP. This is in line with Cable support into the low 1.2400’s, and despite another PMI miss (construction — not a big one!), overstretched short positioning in the Pound is starting to tell. EU retail sales saw a marked pick up, but is of limited relevance in the current climate. The ECB’s head Draghi is speaking in Frankfurt later today, but few are expecting any verbiage on monetary policy.

In commodities, oil markets are looking a little resilient at present, seeing limited movement as Libyan output resumed. Inventory data is still a concern, but as OPEC have been pointing out, the impact of the production cuts have yet to hit levels, and there is the ongoing hope that the output agreement can be extended into H1. WTI sticks close to USD50.00, while Brent has traded a touch over $53.00. Weakness in base metals on the back of the softer than expected Caixin manufacturing PMIs. Copper has dipped back below USD2.60, but little momentum through here as yet. Precious metals are doing considerably better however, as the USD drop off pushes Gold back to USD1260. Silver has solidified its footing above USD18.00, and is now pushing higher again.

Looking at the day ahead, the calendar is fairly thin in Europe this morning with Euro area retail sales data the only release of note, and which printed a modest beat coming in at 0.7% vs Exp. 0.5%. In the US this afternoon we’ll get the February trade balance reading as well as February factory orders (+1.0% mom expected) and the final revisions to the February durable and capital goods orders data. Away from the data the Fed’s Tarullo is scheduled to speak at 4.30pm while the ECB’s Draghi speaks this afternoon at 2.30pm BST. Away from that we’ll get the second live and televised French presidential debate tonight so that is worth keeping an eye on. While first round polls still heavily favour a Macron-Le Pen one-two, Melenchon has gained additional support in recent weeks largely at the expense of Fillon and Hamon. Indeed the Ifop-Fiducial poll from Mar  30th-3rd April shows Macron and Le Pen as taking home 26% and 25.5% of the votes in the first round, followed then by Fillon with 17% and Melenchon with 15%. The same pollster had Melenchon with 11.5% of the votes back on March 20th and Fillon with 18%.

US Event Calendar

  • 8:30am: Trade Balance, est. $44.6b deficit, prior $48.5b deficit
  • 10am: Factory Orders, est. 1.0%, prior 1.2%
    • Factory Orders Ex Trans, prior 0.3%
    • Durable Goods Orders, est. 1.7%, prior 1.7%
    • Durables Ex Transportation, prior 0.4%
    • Cap Goods Orders Nondef Ex Air, prior -0.1%
    • Cap Goods Ship Nondef Ex Air, prior 1.0%
  • 4:30pm: Fed’s Tarullo speaks at Princeton University

DB’s Jim Reid concludes the overnight wrap

In markets a new month and new quarter has so far been a bit of an unwelcome sight for risk assets. There didn’t appear to be one specific driver yesterday but a combination of some soft US data, the headlines around Trump and North Korea over the weekend and the news of a subway explosion in Russia all appeared to play a part in contributing to a slightly risk off tone to start the week. Following a fairly uneventful first half of the session the Stoxx 600 declined as the US session kicked into gear and eventually finished -0.49% to bring to an end a run of four consecutive gains. The S&P 500 closed -0.16% although in fairness did pare a bigger decline near the open. Even the VIX index hit the highest level in a week at one stage, before eventually ending the day flat.

The more significant price action yesterday though was in bonds. Indeed on the day that the ECB kicked off its tapering process from €80bn to €60bn it was ironic to see govies rally sharply across the board in Europe. 10y Bund yields finished the day down 5.1bps at 0.273% – the strongest day since February 8th and the lowest closing yield since February 28th. Yields in Spain and Portugal were also 2.4bps and 6.9bps lower while yields in the likes of Switzerland, Netherlands and France were down anywhere from 2-5bps. It appears that this was partly to do with ECB board member Peter Praet’s comments which were the latest in the line of the depo hike backtracking. Praet said in an interview with Expansion that the ECB is not yet ready to signal any change in its policy stance and that there is “no number, period of time in months or anything like that which will determine when interest rates go up after the debt purchases end”. Meanwhile 10y Treasury yields also fell 6.8bps to 2.320% with the yield now the lowest since February 24th. A lot of focus in the US was on the soft auto sales data which showed that annualized sales fell to 16.53m in March (vs. 17.30m expected) from 17.47m. That is also the lowest print since February 2015.

The other big data focus yesterday was the final March manufacturing PMI’s. In Europe there was no change to the final Euro area reading of 56.2 and so confirming a 0.8pt rise from February. Germany was also unrevised at 58.3 while France was revised down 0.1pts to 53.3. The UK data disappointed a little after dipping 0.3pts to 54.2 while in the periphery Italy rose to 55.7 (up 0.7pts) while Spain declined to 53.9 (down 0.9pts). In the US the PMI was revised down 0.1pts to 53.3 although the ISM dipped half a point to a still elevated 57.2. The ‘global’ March PMI was confirmed at 53.0 which is unchanged from the 69-month high February reading.

To the latest in Asia now where with a number of markets closed, it’s been a fairly quiet overnight session. That said bourses are largely following the lead from Wall Street still with the Nikkei (-0.92%), Kospi (-0.23%) and ASX (-0.36%) all in the red. China and Hong Kong are both closed today. US equity index futures are also slightly in the red while there isn’t much to report in either FX or commodities. There has been a central bank meeting this morning however with the RBA, although as expected there were no surprises with the 1.5% cash rate left unchanged.

Elsewhere, there wasn’t a huge amount more to report from yesterday’s session. The Fedspeak continued with the Philadelphia Fed President Harker reiterating that 3 hikes this year remains appropriate as long as “things stay on track”. In EM the big story was in South Africa where S&P moved to downgrade South Africa’s foreign currency rating by one notch to junk (BB+) in the wake of the cabinet purge by President Zuma. Moody’s has also placed the sovereign’s rating on review for downgrade. The Rand sold off another -2.04% yesterday which follows the -7.88% tumble for the currency last week.

Looking at the day ahead, the calendar is fairly thin in Europe this morning with Euro area retail sales data the only release of note. In the US this afternoon we’ll get the February trade balance reading as well as February factory orders (+1.0% mom expected) and the final revisions to the February durable and capital goods orders data. Away from the data the Fed’s Tarullo is scheduled to speak at 9.30pm BST while the ECB’s Draghi speaks this afternoon at 2.30pm BST. Away from that we’ll get the second live and televised French presidential debate tonight so that is worth keeping an eye on. While first round polls still heavily favour a Macron-Le Pen one-two, Melenchon has gained additional support in recent weeks largely at the expense of Fillon and Hamon. Indeed the Ifop-Fiducial poll from Mar  30th-3rd April shows Macron and Le Pen as taking home 26% and 25.5% of the votes in the first round, followed then by Fillon with 17% and Melenchon with 15%. The same pollster had Melenchon with 11.5% of the votes back on March 20th and Fillon with 18%.


i)Late  MONDAY night/TUESDAY morning: Shanghai closed HOLIDAY/ /Hang Sang CLOSED HOLIDAY  . The Nikkei closed DOWN 172.98 OR 0.91% /Australia’s all ordinaires  CLOSED DOWN 0.24%/Chinese yuan (ONSHORE) closed at PAR 6.8872/Oil ROSE to 50.44 dollars per barrel for WTI and 53.34 for Brent. Stocks in Europe ALL MIXED   ..Offshore yuan trades  6.8789 yuan to the dollar vs 6.8872 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN AT PAR AND THE OFFSHORE YUAN MUCH  WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS SATISFIED WITH WASHINGTON’S RESPONSE 



Finally a key advisor to Abe is telling him to pull the plug on QE

(courtesy zero hedge)

Abe Advisor Says It’s Time To Pull The Plug On QE

In what may be one of the few sane policy recommendations to emerge out of Japan in years, Nobuyuki Nakahara, an adviser to Prime Minister Shinzo Abe and an influential former Bank of Japan board member said the BOJ should make a “clean break” from its current policy approach when Kuroda’s term ends next spring, roughly at the same time as Yellen’s term is ending (at which point a Trumpian Fed is said to arrive).  According to Nakahara, Kuroda’s successor should announce a “second phase” of the BOJ’s quantitative-easing program that end the BOJ’s attempts at “yield control” and slashes purchases of JGBs by at least half, Dow Jones reported.

He described the central bank’s efforts to control the yield curve as an attempt to make up for the “mistake” of introducing negative interest rates in early 2016.

In a radical – and accurate – departure from the status quo which will inevitably result in currency collapse and hyperinflation, controlled Inflation in Japan would return thanks to the correction in the yen’s strength, the tightening of the labor market to full employment and a tick-up in wages, the former central banker said, so the bank should scale back its efforts to fuel it. If the bank is reluctant to act so boldly, it should commit to buying only as many JGBs as needed to reach 2% inflation by 2023 at the latest, he added.

“Under the new governor they should think hard about what they will do for the next five years,” said Mr. Nakahara, who has already said he doesn’t favor a second term for Mr. Kuroda.

According to Nakahara, continuing to buy government bonds at the same pace of JPY80 trillion per year, will limit the bank’s leeway to respond in a crisis and stop interest rates from rising gradually as inflation picks up. A bigger problem is that as this website first, and then the IMF calculated, the BOJ will run out of monetizable debt in a little over a year, at which point it will have bond market failure to deal with as well.

The comments from Nakahara are a striking U-turn from one of the strongest Japanese advocates of QE, and are the latest indication that central bankers around the globe have realized the past 8 years of policies have led to a monetary policy dead end.

Last week, Japan’s government announced the unemployment rate in February fell to 2.8%, the lowest since June 1994, which in a normal world where the Philips curve works would have led to a spike in price, and yet in Japan CPI barely rose by a mere 0.2% (and that’sonly after using one of the BOJ’s endlesslyrevised CPI definitions).

“We have been fighting deflation for 20 years, and finally we have full employment, but the BOJ still hasn’t gotten consumer prices up or considered what kind of relationship it should have with the finance ministry regarding their JGB holdings,” he said. Well, the reason for the is demographics and technology, but one thing that is certain: keep pumping enough money, eventually shifting to the infamous monetary “helicopter”, and you will get your inflation, just like in Venezuela.

Nakahara hinted as much when he suggested that one measure the BOJ could consider would be turning one part of its JGB holdings into a perpetual bond, he added.

In other words, instead of pushing away from unconventional policy, Abe’s advisor was really calling for helicopter money, although since that is a Ministry of Finance responsibility and not that of the BOJ, one can see why the former central banker is eager to reduce the role of the BOJ.

Finally, Nakahara said there are risks for the BOJ and to his view. If domestic stock prices fall and the yen strengthens against the dollar, the bank would need to scrap its yield-curve control earlier and focus on bond purchases as its main policy tool. The same approach would also be necessary if global oil prices stagnate between $30 and $50 a barrel. Considering that the Yen is already surging, and a plunge in the Nikkei – which correlates one to one with the Yen – is now inevitable, means that far from scrapping QE, the BOJ may soon have to do much more of it, mercifully reaching Japan’s monetary  endgame that much faster.

And speaking of the Yen, moments ago it just hit fresh five month lows.



Not a very good start to 2017 for China as we witness the highest number of corporate defaults in history

(courtesy zero hedge)

China Starts 2017 With Highest Number Of Corporate Defaults In History

Back in October 2015, roughly around the bottom of the recent commodity cycle, we reported a stunning statistic: more than half of Chinese companies did not generate enough cash flow to even cover the interest on their cash flow, and as we concluded “it is safe to assume that up to two-third of Chinese commodity companies are now at imminent danger of default, as they can’t even generate the cash to pay down the interest on their debt, let alone fund repayments.

While commodity prices have staged a powerful bounce over the past 18 months, and despite the government’s powerful drive to avoid major defaults over concerns about resulting mass unemployment, the inevitable default wave has finally arrived, and as Bloomberg reports overnight, “China’s deleveraging push has racked up the most defaults on corporate bonds ever for a first quarter, and the identity of the debtors is pretty revealing.”

Seven companies have defaulted on a total of nine bonds onshore so far in 2017, versus 29 for all of last year, according to data compiled by Bloomberg. In a sign of the struggles facing China’s old economic model, most of them depend on heavy industry and construction. While it’s still far from a crisis point, the defaults shows how policy makers’ efforts to reduce the liquidity that had propelled the bond market until late last year is exacting casualties.

Cited by Bloomberg, Liu Dongliang, a senior analyst at China Merchants Bank Co. in Shenzhen said that “weak companies can’t sell bonds, which adds to the pressure on their cash flow.” As a result, “the pace of defaults will continue. It will be even more difficult for weak companies to sell bonds because corporate bond yields may rise further — the current yield premium doesn’t provide enough protection against credit risks.”

As discussed in recent months, the Chinese central bank has been curbing leverage in money markets leading to a spike in borrowing costs…

… which has also hit issuance: making rolling over of existing debt prohibitive for many. Firms rated AA, generally considered junk in China, sold 33 billion yuan ($4.8 billion) of bonds in the first quarter, the least since 2011, Bloomberg data show. Chinese companies have scrapped 129 billion yuan of bond sales since Dec. 31, a jump of more than 50 percent from the same period a year before.

Continuing the deleveraging push, and further tightening financial conditions, over the weekend, the PBOC boosted rates on loans aimed at small- and medium-sized financial institutions while as reported last weekend, smaller and mid-size banks have been caught in the cross hairs of shadow banking deleveraging, with some said to have missed debt payments in March.

Not surprisingly, Bloomberg reports that four of this year’s nine defaulted bonds were issued by companies based in the northeast rust-belt province of Liaoning, which has been among the areas hit hardest by China’s focus on reducing capacity in industries such as steel and coal. Another key Chinese commodity producing province, Hebei, which is the nexus of China’s steel-production has so far been spared as a result of lying about its production cuts, however recent revelations have prompted Beijing to crack down on local factories, resulting in the recent decline in iron-ore prices, which will likely have adverse impacts on Chinese upstream steel suppliers, and result in even more defaults in the coming months.

Courtesy of Bloomberg, here is a summary of the companies that have defaulted so far in 2017:

1. Dalian Machine Tool Group Corp.

The top perpetrator, this Liaoning manufacturer defaulted on three bonds this year, after issuing new securities as recently as October. The tool making industry has a large number of players, and is ripe for consolidation, according to Bloomberg Intelligence. Dalian Machine is also based in a province that tumbled into an outright recession last year. The securities involved include a note due in May 2017, one due in July and another due in January 2019.

2. Dongbei Special Steel Group Co.

This steelmaker based in Dalian, a port city on the Yellow Sea, is a good example of Liaoning’s troubles. The company, partially state owned, was already bailed out in the early 2000s before it had to grapple with the challenges of China’s economy decelerating from around 10 percent growth to sub-7 percent. It’s now defaulted on its sixth bond since its latest financial difficulties began a year ago. The company is in bankruptcy proceedings. The note defaulted on was originally issued in 2013 and is due in January 2018.

3. Inner Mongolia Berun Group Co.

This investment company is based in the heart of the northern province of Inner Mongolia, which saw a surge in construction during the record credit boom unleashed during the global financial crisis. Berun Group’s home city, Ordos, was dubbed China’s biggest “ghost town,” for all the vacant buildings that went up during the stimulus period. This was the second default within two months for the company, which invests in chemicals and logistics. The defaulted security was a note issued last year that was due in January.

4. China Shanshui Cement Group Ltd.

While this company is based in Shandong, a province southeast of Beijing that’s better off than its neighbor across the Yellow Sea, Liaoning, cement has become a tougher industry since regulators took steps to rein in China’s property sector. China Shanshui Cement Group has defaulted on several bonds since November 2015 after a boardroom fracas stymied financing. Its Hong Kong-traded shares are suspended. The bond in question was three-year note issued in February 2014.

5. China City Construction Holding Group Co.

This builder is based in the national capital, but Beijing’s ongoing property boom wasn’t enough to prevent it from missing interest payments. A change in the contractor’s ownership last April triggered early redemption of a Dim Sum bond, and then China City faced difficulties transferring funds offshore to repay the debt. The shifting shareholder structure has had a “serious” negative impact on the company’s ongoing ability to secure funding, according to China Lianhe Credit Rating Co. The company defaulted again early last month. The security was a bond due in March 2021.

6. Huasheng Jiangquan Group Co.

Another Shandong-based company, this steelmaker suffered “huge losses” after its subsidiary cut manufacturing of the alloy, according to Dongxing Securities Co., the lead underwriter on the defaulted bond. Premier Li Keqiang said in his address to the National People’s Congress last month that China wants to reduce steel capacity by about 50 million tons. Huasheng Jiangquan repaid the overdue amount on the debt March 22. The 800 million-yuan bond that was defaulted on was due in March 2019.

7. Zhuhai Zhongfu Enterprise Co.

A bottle maker for Coca-Cola Co., this company sticks out because it hails from Guangdong, China’s powerhouse exporter province. Zhuhai Zhongfu said in a statement last week that it’s running at a loss amid competition in the industry and weak demand. The company’s controlling shareholder says Zhuhai Zhongfu is planning to make an overdue payment by April 26 on the bond that it defaulted on March 28. The firm defaulted on a separate bond in 2015 and repaid the debt five months later.





Brazil who is not part of OPEC or the deal to cut production reports a huge 14.6% jump in February output.  This is good for Brazil with the balance of payments but bad for oil as production increases everywhere:

(courtesy Calcuttawala /oilPrice.com)

Brazil Reports 14.6% Jump In February Oil Output, Exports Almost Double

Authored by Zainab Calcuttawala via OilPrice.com,

Brazilian oil output in February was 14.6 percent higher year-over-year, according to the latest data released by ANP, the South American country’s petroleum regulator.

February production touched 2.676 million barrels per day, an ANP statement said, adding that natural gas output also rose 9.2 percent compared to the same month last year.

Figures released earlier in March from the nation’s Trade Ministry said that oil exports had jumped 94 percent year-over-year in February at 45.7 million barrels – a figure that topped the January 2017 record by 12 percent.

The surge in oil exports was a function of higher production from the offshore areas in Brazilian waters, where huge oil finds were made in the pre-salt and sub-salt layers in the past few years.

Brazil – which is not part of the non-OPEC group that signed up to OPEC’s concerted efforts to cut global supply – had said that it planned to increase its oil production in the coming years, even before the cartel decided to commit to cuts.

Brazil announced last week that it expected to see its first profits from projects finalized under new profit-sharing agreements (PSAs) in September.

The PSAs were introduced by the government of Ignacio Lula da Silva to replace previous royalty payments and to ensure the state gets a bigger portion of the revenues derived from the deposits in Brazil’s presalt layer.

The announcement of profits from the new framework comes just as oil prices recover from 2.5 years of volatility.

New foreign investment is also a national priority for Brazil’s authority figures. After removing the requirement calling for Petrobras to be operator of all new projects in the presalt layer, last month the government also relaxed local content requirements for foreign energy companies, which they saw as a stumbling block for foreign investors. The move comes in preparation for new oil and gas block tenders scheduled for this year and next.


Venezuela will be entering hyperinflation very shortly as its money supply soared by 200% in a year.  Hyperinflation can see increases of 1000’s%


(courtesy zerohedge)

Venezuela’s Money Supply Soars By A Record 200%

Two weeks ago, Reuters reported that due to “unexplained” reasons, the Venezuela central bank had stopped publishing its M2, or money supply, data.  The M2 money supply was up by nearly 180% in mid-February from a year earlier, according to the central bank before it halted the release of the weekly data without explanation in February.

“If they are not publishing, you know it must be skyrocketing,” Aurelio Concheso, director of the Caracas-based business consultancy Aspen Consulting, stated the obvious. The central bank and ministry of communications did not respond to a request for comment, Reuters adds.

Fast forward to today when following the international outcry over last Wednesday’s failed coup-attempt by Maduro, in which the Supreme Court first withdrew the power of Venezuela’s opposition-controlled Congress, and then promptly reversed itself following loud international outcry and after it appeared that Maduro’s precarious grip on Venezuela society was about to be lost, when Venezuela’s M2 has once again mysteriously reappeared. According to the latest data, the money supply in the crisis-stricken country has surged over 200% in a year, up from 180% as of February, and the fastest rise since records began in 1940, putting it on track for the world’s highest inflation.

According to Reuters which first spotted the return of the data, soon after a month-long hiatus from publication, the central bank said late on Friday the total amount of local currency in circulation, M2, as of March 24 was 13.3 trillion bolivars, up 202.9% from a year earlier. By comparison, in the US, M2 rose by 6.4% in the same period.

But while M2 may have returned, official inflation data is still missing, which is probably for the best: Venezuela is in a major economic crisis, with millions struggling with food shortages and hyperinflation inflation in triple digits, if not higher.  Venezuela’s opposition-led National Assembly, which correctly accuses the leftist government of destroying the OPEC country’s economy, says inflation reached 741 percent in the year to February. It’s likely far higher.

The exponential rise in M2, the sum of cash, together with checking, savings and other deposits, means an exponential rise in the amount of currency circulating. Coupled with a decline in the output of goods and services, that has accelerated inflation.

Curiously, never before has Venezuela sunk so low, despite its economy being largely uniform over the years. As Reuters notes, the central bank website shows five separate spreadsheets with money supply data going back to 1940. Back then, as now, Venezuela’s primary export was oil.

One thing did change recently, however, roughly around the time the M2 curve started going exponential: that paragon of socialist virtue, Nicolas Maduro took over. The rest is history.

Maduro says right-wing businessmen are hoarding goods to sabotage his administration, and has accused the US of coordinating with other global leaders to remove him from power (that actually may not be too far off, if only the CIA wasn’t more focused on destabilizing the domestic US situation in recent months).

Meanwhile, as M2 goes exponential, we have a feeling that the following chart of the Bolivar on the Venezuela black market – which reflects its true lack of value – is about to take its next step function higher… or rather lower as what little value the local currency may have had disintegrates in the coming months.

We can only imagine the awe shared by Western central bankers who watch in dumbfounded amazement as this small country has achieved precisely the final outcome all “developed” currencies will one day soon experience.


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



GBP/USA 1.2437 DOWN .0052 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED


Early THIS TUESDAY morning in Europe, the Euro FELL by 22 basis points, trading now BELOW the important 1.08 level  FALLING to 1.0653; 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 FOR HOLIDAY    / Hang Sang  CLOSED FOR HOLIDAY /AUSTRALIA  CLOSED DOWN 0.24%  / EUROPEAN BOURSES MIXED 

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

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

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

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

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

The NIKKEI: this TUESDAY morning CLOSED DOWN 172.98 POINTS OR 0.91%

Trading from Europe and Asia:
1. Europe stocks  ALL MIXED


Gold very early morning trading: $1258.60


Early TUESDAY morning USA 10 year bond yield: 2.322% !!! 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  2.963, UP 1  IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 100.68 UP 19  CENT(S) from FRIDAY’s close.

This ends early morning numbers TUESDAY MORNING


And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 3.926%  UP 2  in basis point yield from MONDAY 

JAPANESE BOND YIELD: +.066%  DOWN 1  in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.617%  DOWN 3 IN basis point yield from MONDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.276 DOWN 7 POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 60 points HIGHER than Spain.





Closing currency crosses for TUESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/4:00 PM 

Euro/USA 1.0668 DOWN .0002 (Euro DOWN 2 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110.73 UP: 0.233(Yen UP 23 basis points/ 

Great Britain/USA 1.2441 DOWN 0.0047( POUND DOWN 47 basis points)

USA/Canada 1.3403 UP 0.0018(Canadian dollar DOWN 18 basis points AS OIL ROSE TO $51.06


This afternoon, the Euro was DOWN by 2 basis points to trade at 1.0668


The POUND FELL BY 47  basis points, trading at 1.2441/

The Canadian dollar FELL by 109 basis points to 1.3441,  WITH WTI OIL RISING TO :  $51.06

The USA/Yuan closed at 6.8831/
the 10 yr Japanese bond yield closed at +.066% DOWN 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 2  IN basis points from MONDAY at 2.361% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.9999 UP 2  in basis points on the day /

Your closing USA dollar index, 100.57 UP 8  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 39.13 OR 0.54% 
German Dax :CLOSED UP 25.14  POINTS OR 0.27%
Paris Cac  CLOSED UP 15.22 OR 0.30%
Spain IBEX CLOSED UP 35.90 POINTS OR 0.35%
Italian MIB: CLOSED UP  14.22 POINTS OR 0.07%

The Dow closed UP 39.03 OR 0.19%

NASDAQ WAS closed UP 3.93 POINTS OR 0.29%  4.00 PM EST
WTI Oil price;  51.06 at 4:00 pm; 

Brent Oil: 54.08  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: $53.15


USA 30 YR BOND YIELD: 2.953%

EURO/USA DOLLAR CROSS:  1.0671 up .0031


USA DOLLAR INDEX: 100.46  up 1  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2481 : DOWN .0060  OR 60 BASIS POINTS.

Canadian dollar: 1.3380  UP .0092 (CAN DOLLAR DOWN 92 BASIS PTS)

German 10 yr bond yield at 5 pm: +.257%


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


VIX Panic-Sellers Barely Manage To Rescue Stocks’ Green Close


The machines used every tick of USDJPY and VIX today to ensure The Dow ended green…


After yesterday’s dump and pump, The Dow and Nasdaq clung to April Gains… as Small Caps were slammed then the BTFDers arrived and it went exponential…


Despite a VIX crushing slam to an 11 handle, stocks just would not behave and ramp until the close


The Dow bounced once again off its 50DMA yesterday and rolled back over again today…


The Dow just scraped into the green for April…


After inverting for the first time ever in a sub-14 spot VIX environment yesterday…


The VIX curve over the next month is once again upward-sloping but notably flatter than the rest of the curve as short-term anxiety (French election, Trump tax reform) remain…


Tesla finally topped $300 for the first time ever…


Retail stocks suffered due to speculation Trump moving away from BAT to VAT


Treasury yields inched higher on the day but remain lower on the week…



The Dollar index followed a similar pattern to yesterday with strength overnight and weakness during EU/US day


WTI climbs to one-month highs over $51 as U.S. crude and gasoline inventories seen declining in coming inventory report and as North Sea Buzzard oil field said to have unplanned halt…


Gold held on to gains above $1250 today…


Rand Paul suggests that Rice should testify under oath whether Obama ordered her to “unmask” the Trump team:

(courtesy zero hedge)

Rand Paul: Rice Should Testify Under Oath If Obama Ordered Her To “Unmask” Trump Team

After it emerged courtesy of Mike Cernovich that former National Security Advisor Susan Rice had made numerous requests to “unmask” the identities of Americans associated with President Trump in intelligence reports, senator Rand Paul who in recent days has been on increasingly better terms with the president and even went golfing with him this weekend, said Rice should testify under oath about her involvment in a potentially illegal scandal that she herself denied she had any knowledge of as recently as 2 weeks ago.

The Kentucky senator called the unmasking an “enormous deal” and indicated that it should be illegal.

“If it is allowed, we shouldn’t be allowing it, but I don’t think (we) should just discount how big a deal it is that Susan Rice was looking at these and she needs to be asked, ‘Did President Obama ask her to do this? Was this a directive from President Obama?  I think she should testify under oath on this.” Paul told reporters.

“I think she should be asked under oath, did she reveal it to The Washington Post. I think they were illegally basically using an espionage tool to eavesdrop or wiretap — if you want to use the word generally — on the Trump campaign,” Paul said.

The report about Rice is linked to Devin Nunes’s claim that the Trump transition team was “accidentally surveilled” and associated information was widely disseminated in intelligence community reports.

Nunes made the claim nearly two weeks ago, infuriating his Democratic colleagues by briefing the media and Trump on the information before revealing it to his committee. Nunes said he was particularly concerned with the possibility that Trump associates were “unmasked” in the intelligence reports.  Nunes revealed the information weeks after Trump accused Obama of having his “wires tapped” at Trump Tower ahead of the presidential election.

Paul used Monday’s development to renew his push for reform of a controversial provision of the Foreign Intelligence Surveillance Act (FISA) that allows the U.S. intelligence community to target non-Americans outside the United States without a warrant. The provision, Section 702, is up for renewal later this year. Paul also signaled that he sees Nunes — who has long been an advocate for the foreign intelligence law — as a potential ally for reform.

Nunes previously took issue with the fact that Michael Flynn, Trump’s former national security adviser, had his communications monitored by the intelligence community, which were later the subject of media reports.

“I have been very impressed with Devin Nunes,” Paul said. “All of the intelligence hawks don’t like him because he appears to have found something and he’s willing to talk about it with the president.”

“I think it is inappropriate and it should be illegal,” Paul said of “incidental collection” on Americans without a warrant, i.e. spying by the NSA first revealed by Edward Snowden.

“I don’t think you should be allowed to listen to Americans’ conversations without a warrant. They are doing it without a warrant. They are targeting a foreigner, and because they are targeting a foreigner they are gathering all of this information on Americans.”

“Is there a possibility that Susan Rice was politically motivated? Let’s ask her why she was opening up all of the conversations with Trump transition figures.”

Last Friday, in a rare public compliment of a political figure, Matt Drudge said that “Rand Paul is America’s best senator.”



This is no doubt criminal activity as Susan Rice used detailed spreadsheets on intercepted phone calls of the Trump team.  This was a co -ordinated attack  to use the full force of the uSA intelligence apparatus to take down a political adversary, namely Donald Trump

(courtesy zero hedge)



Susan Rice Ordered “Detailed Spreadsheets Of Intercepted Phone Calls” With Trump Team

After it was revealed over the weekend by Mike Cernovich that Susan Rice was the mysterious Obama official behind the “unmasking” of Trump associates, the details behind the extreme measures taken by the Obama administration, including what seems to be personal legal liability for Susan Rice and potentially others, continue to grow more and more disturbing.

This morning, the Daily Caller has provided new details, courtesy of former U.S. Attorney Joseph diGenova, suggesting that Rice specifically requested that the NSA provide her with “detailed spreadsheets of intercepted phone calls with unmasked Trump associates.”

“What was produced by the intelligence community at the request of Ms. Rice were detailed spreadsheets of intercepted phone calls with unmasked Trump associates in perfectly legal conversations with individuals,” diGenova told The Daily Caller News Foundation Investigative Group Monday.


“The overheard conversations involved no illegal activity by anybody of the Trump associates, or anyone they were speaking with,” diGenova said. “In short, the only apparent illegal activity was the unmasking of the people in the calls.”

Meanwhile, Retired Colonel James Waurishuk, an NSC veteran and former deputy director for intelligence at the U.S. Central Command, said that the level of coordination required to pull off such a massive spying operation is staggering and would have required numerous personnel from the White House, NSA, CIA, National Security Council, etc. 

“The surveillance initially is the responsibility of the National Security Agency,” Waurishuk said. “They have to abide by this guidance when one of the other agencies says, ‘we’re looking at this particular person which we would like to unmask.’”


“The lawyers and counsel at the NSA surely would be talking to the lawyers and members of counsel at CIA, or at the National Security Council or at the Director of National Intelligence or at the FBI,” he said. “It’s unbelievable of the level and degree of the administration to look for information on Donald Trump and his associates, his campaign team and his transition team.  This is really, really serious stuff.”

In other words, it’s growing increasingly unlikely that this operation was anything but a direct, targeted attempt of the Obama administration to utilize the full force of the U.S. intelligence apparatus to take down a political adversary.

Susan Rice


As Michael Doran points out, if these alleged actions are proven to be accurate then several people within the Obama administration likely committed felonies.

Michael Doran, former NSC senior director, told TheDCNF Monday that “somebody blew a hole in the wall between national security secrets and partisan politics.” This “was a stream of information that was supposed to be hermetically sealed from politics and the Obama administration found a way to blow a hole in that wall.”


Doran charged that potential serious crimes were undertaken because “this is a leaking of signal intelligence.”


“That’s a felony,” he told TheDCNF. “And you can get 10 years for that. It is a tremendous abuse of the system. We’re not supposed to be monitoring American citizens. Bigger than the crime, is the breach of public trust.”


Waurishuk said he was most dismayed that “this is now using national intelligence assets and capabilities to spy on the elected, yet-to-be-seated president.”


“We’re looking at a potential constitutional crisis from the standpoint that we used an extremely strong capability that’s supposed to be used to safeguard and protect the country,” he said. “And we used it for political purposes by a sitting President. That takes on a new precedent.”

Of course, just because Obama used the NSA to try and take down Trump doesn’t mean that those allegations that he used the IRS to take out Romney supporters in 2012 were true….Scandal-free administration…


Susan Rice responds to Trump unmasking allegations that she did not leak anything. Wishing thinking!

(courtesy zero hedge)

Susan Rice Responds To Trump Unmasking Allegations: “I Leaked Nothing To Nobody”

If anyone expected former National Security Advisor Susan Rice, the same Susan Rice who “stretched the truth” about Benghazi, to admit in her first public appearance after news that she unmasked members of the Trump team to admit she did something wrong, will be disappointed. Instead, moments ago she told MSNBC’s Andrea Mitchell that she categorically denied that the Obama administration inappropriately spied on members of the Trump transition team.

“The allegation is that somehow, Obama administration officials utilized intelligence for political purposes,” Rice told Mitchell. “That’s absolutely false…. My job is to protect the American people and the security of our country. “

“There was no such collection or surveillance on Trump Tower or Trump individuals, it is important to understand, directed by the White House or targeted at Trump individuals,” Rice said.

EXCLUSIVE: Susan Rice says the claim that intelligence was used for political purposes is “absolutely false” Watch:

“I don’t solicit reports,” Rice said Tuesday. “They’re giving it to me, if I read it, and I think that in order for me to understand, is it significant or not so significant, I need to know who the ‘U.S. Person’ is, I can make that request.” She did concede that it is “possible” the Trump team was picked up in “incidental surveillance.”

“The notion, which some people are trying to suggest, that by asking for the identity of the American person is the same is leaking it — that’s completely false,” Rice said. “There is no equivalence between so-called unmasking and leaking.”

Watch: Susan Rice tells @mitchellreports it is “possible” the Trump team was picked up in incidental surveillance

That said, Rice did not discuss what motive she may have had behind what Bloomberg, Fox and others have confirmed, was her unmasking of members of the Trump team.

Rice also flatly denied exposing President Trump’s former national security advisor Michael Flynn, who was forced to resign in February after media reports revealed that he misled Vice President Pence about the contents of a phone call with the Russian ambassador. Asked by Mitchell if she seeked to unmask the names of people involved in the Trump campaign in order to spy on them, Rice says: “absolutely not, for any political purpose, to spy, expose, anything.” And yet, that is what happened. She was then asked if she leaked if she leaked the name of Mike Flynn: “I leaked nothing to nobody.”

WATCH: Susan Rice insists “I leaked nothing to nobody”

In a follow up question, Rice said that when it comes to Mike Flynn with whom she had “civil and cordial relations”, that she learned “in the press” that he was an unregistered agent for the Turkish government.

WATCH: Susan Rice says she learned from the press that Flynn was an unregistered agent for the Turkish government

We doubt that anyone’s opinion will change after hearing the above especially considering that, in addition to Benghazi,  Rice is the official who praised Bowe Bergdahl for his “honorable service” and claimed he was captured “on the battlefield”, and then just two weeks ago, she told PBS that she didn’t know anything about the unmasking.

Unfortunately, Mitchell’s list of questions did not go so far as to ask about her false claim in the PBS interview, in which she said “I know nothing about unmasking Trump officials.”

It is thus hardly surprising that now that her memory has been “refreshed” about her role in the unmasking, that Rice clearly remembers doing nothing at all wrong.

On Monday night, Rand Paul and other Republicans called for Rice to testify under oath, a request she sidestepped on Tuesday. “Let’s see what comes,” she told Mitchell, when asked if she would testify on the matter. “I’m not going to sit here and prejudge.”



That did not take long:  the House Intelligence panel will now ask Susan Rice to testify.

popcorn anyone?  or will she plead the 5th!

(courtesy zero hedge)

House Intel Panel Asks Susan Rice To Testify

If former National Security Advisor Susan Rice thought she could get away from the current furore over the Trump “unmasking” scandal with just one MSNBC interview in which Andrea Mitchell did not even ask her why she lied two weeks ago to PBS, she will be disappointed as moments ago Dow Jones reported that the House Intelligence Panel has asked Susan Rice to testify, supposedly under oath.


The next question on everyone’s lips: will she plead the Fifth?

As a reminder, earlier in the day, the MSNBC anchor asked Susan Rice if she would testify before congress as Rand Paul requested, Rice responded by changing the subject to Russia.

“Rand Paul is suggesting that you be subpoenaed to testify. Would you be willing to go to Capitol Hill?” Mitchell asked.

“You know, Andrea, let’s, let’s… see what comes,” she said. “Umm, I’m not going, ahh, you know, sit here and prejudge, but what I will say is that the investigations that are underway as to the Russian involvement in our electoral process are very important and they’re very serious. Every American ought to have an interest in those investigations going wherever the evidence indicates they should.”

Asked if she would testify, Susan Rice freezes, stammers, then changes subject to Russia.

Her decision may have been made for her.




Two big changes to the former Health care bill and now Trump seeks by Friday its passage.  Let us wait for the CBO to report its costs!

(courtesy zero hedge)

In Aggressive Push, Trump Seeks Friday Passage Of Revised Healthcare Bill

Will second time be the charm for Trump?

Just over a week after the Republicans’ embarrassing failure to repeal Obamacare as a result of infighting with both conservative and moderate factions, on Monday White House officials led by the vice president met the same opposing Republicans in the House of Representatives, in an aggressive effort to revive the passage of the Republican Obamacare deal, potentially voting as soon as the end of the this week.

As Reported by Reuters and other newswires, members of the Trump administration led by Vice President Mike Pence, invited a group of moderate Republicans known as the “Tuesday Group” to the White House. Pence then went to Capitol Hill to meet the Freedom Caucus, who have recently clashed with Trump over their insistence to block the bill in its current format. The revised deal as presented by Pence had two key components:

  • Granting a waver to States from some, if not all, Obamacare insurance rules including the minimum benefits, the amount of medical expenses that insurers have to cover, and the rule preventing insurers from charging higher rates to sick people, per Axios.
  • A $115 billion “stability fund” for the states would be narrowed to be spent specifically on high-risk pools, which many Republicans think is a better way to cover people with pre-existing conditions.

The Freedom caucus had a favorable first reaction: Pence and White House Chief of Staff Reince Priebus laid out the administration’s revised healthcare plan during a 40-minute meeting with Freedom Caucus members, said Congressman Mark Meadows, the leader of the conservative group. Meadows said he was “intrigued” by the new plan, which would allow states to opt out of some of Obamacare’s mandates, possibly by obtaining waivers.

“We’re encouraged … but would certainly need a whole lot more information before we can take any action either in support or in opposition,” Meadows told reporters. He expected to see a detailed draft of the proposal within 24 hours, he said.

Meanwhile, the moderates also were pleasantly surprised: in an earlier meeting with the moderate Tuesday Group, Pence said the new plan would preserve Obamacare’s essential health benefits clause, or services and care that insurers must cover, but states could apply for a waiver if they could show it would improve coverage and reduce costs, according to Collins. Trump aides also discussed directing funds from the $115 billion stability fund for states into high-risk pools for people with pre-existing health conditions to better ensure insurance premiums come down in cost.

What is most notable about the recent attempt to reach out is the timing: the White House would like to see a revised bill come up for a vote as early as week’s end, before the House breaks for a spring recess, and the text of the new proposal could be ready some time on Tuesday, lawmakers said.

“It was clear the president would be very happy come Friday to have this passed,” said U.S. Representative Chris Collins, a member of the Tuesday Group and a Trump ally and added that “It’s an acknowledgement that they were chasing votes with the Freedom Caucus and the Far Right and then ended up losing votes with those of us who are typically the most reliable votes.”

The clincher may have been Trump’s weekend golf game with Rand Paul: after golfing with the president on Sunday, Reuters reports that the Republican Senator, a sharp critic of the Republicans’ previous healthcare bill, also expressed renewed hope the healthcare bill could be revised in a way that picked up support from the conservative and moderate factions of the Republican Party.

Paul told reporters he was “very optimistic that we are getting closer and closer to an agreement repealing Obamacare.”

“This could move fairly quickly,” Collins said.

If so, it would provide a much needed victory for Trump whose series of political missteps in recent weeks have seen his approval rating tumble even with Republicans, dropping to the lowest on record for a new president according to various polls.


Paul Ryan then quashes hope for a quick 2nd try at healthcare.  He states that the new health care bill is only in the conceptual stage:

(courtesy zero hedge)

Paul Ryan Quashes Hope For Quick Second Try At Healthcare Bill

Earlier this morning, we reported that “In An Aggressive Push, Trump Seeks Friday Passage Of Revised Healthcare Bill“, and has instructed Mike Pence to rattle the cages of both conservative and moderate Republicans, to see what the bid/ask difference is. Among the things the White House was willing to concede on: i) granting a waver to States from some, if not all, Obamacare insurance rules including the minimum benefits; and ii) a $115 billion “stability fund” for the states would be narrowed to be spent specifically on high-risk pools, as a form of coverage for those with pre-existing conditions.

Some expressed optimism that Trump’s renewed interest to pass Trump/Ryancare could take place as soon as this Friday, with Rep. Chris Collins adding “this could move fairly quickly.”

Freedom Caucus leaders said they’re open to the idea but want to see the legislative text, meanwhile White House officials were hoping to send the text to Capitol Hill as early as Tuesday night.

Or maybe not, because as Reuters reports, House Speaker Paul Ryan on Tuesday poured cold water on expectations that after last month’s Republican failure to pass their own Healthcare bill, a quick deal to repeal and replace ObamaCare would not happen and declined to say whether the House would hold a vote by the end of the week. As The Hill adds, his remarks followed a flurry of meetings between Vice President Mike Pence, other top White House officials, the Tuesday Group of centrists and the ultraconservative House Freedom Caucus.

“These are ongoing talks. We want our members to talk with each other about how we can improve the bill to get consensus. Those productive talks are happening. We’re at the concept stages right now,” Ryan told reporters after a closed-door meeting with Republicans earlier. “So right now, we’re just at that conceptual stage about how to move forward in a way we can get everybody to 216 [votes]. … It’s premature to say where we are or what we’re on because we’re at that conceptual stage.”

We don’t have a bill text or an agreement, but these are the kinds of conversations we want — all the various caucus members, the administration, those productive kinds of conversations are happening right now,” Ryan said. “It’s all about getting the premiums down.”

The House breaks for a two-week spring recess at the end of the week, creating a sense of urgency for Republicans who don’t want to return to their districts and face constituents without a healthcare victory. At least two Republicans stood up during Tuesday’s GOP conference meeting and told leadership the House should delay its recess until it passes a health bill, sources in the room said.

But when asked if there will be a health vote by the end of the week, Ryan said he didn’t know.

“I don’t want to put some kind of artificial deadline because we’re at that conceptual stage,” Ryan said. “We have very productive conversations occurring with our members. But those are productive conversations; it doesn’t mean we have language and text that’s ready to go and the votes are lined up.”

The USA trad deficit shrank by 5 billion USA from $48 billion down to $43. 6 aided by the lower dollar. The trade deficit with China fell by 4.9%

(courtesy zero hedge)

February Trade Deficit Shrinks, Smaller Than All Estimates

The US Trade Balance shrank to $43.6 billion in February (the smallest deficit since October and smaller than all economists’ estimates). Imports fell modestly (-1.8%) and exports inched higher (+0.2%) as it seems a notably weaker dollar did nothing to help. Notably US’ trade deficit with China is down 4.9% on a year-to-date, year-over-year basis.

The deficit decreased from $48.2 billion in January (revised) to $43.6 billion in February, as exports increased and imports decreased. The previously published January deficit was $48.5 billion. The goods deficit decreased $4.6 billion in February to $65.0 billion. The services surplus increased less than $0.1 billion in February to $21.4 billion.


Exports of goods and services increased $0.4 billion, or 0.2 percent, in February to $192.9 billion. Exports of goods increased $0.4 billion and exports of services increased less than $0.1 billion.

The increase in exports of goods mostly reflected increases in consumer goods ($0.7 billion), in other goods ($0.5 billion), and in industrial supplies and materials ($0.4 billion). Decreases in foods, feeds, and beverages ($0.7 billion) and in capital goods ($0.6 billion) were partly offsetting.

The increase in exports of services reflected nearly offsetting changes of $0.1 billion or less in all categories.


Imports of goods and services decreased $4.3 billion, or 1.8 percent, in February to $236.4 billion. Imports of goods decreased $4.2 billion and imports of services decreased less than $0.1 billion.

The decrease in imports of goods mostly reflected decreases in consumer goods ($3.1 billion) and in automotive vehicles, parts, and engines ($2.6 billion). An increase in industrial supplies and materials ($1.4 billion) was partly offsetting.

The decrease in imports of services reflected nearly offsetting changes of $0.1 billion or less in all categories.

*  *  *

This should make Trump happy heading into the meetings with Xi – as his ‘deficit’ is relatively lower.


uSA factory orders rise by 7.3% year over year but do not get too excited: it was mainly defense spending

(courtesy zero hedge)

US Factory Orders Rise At Fastest In 3 Years (Thanks To Global Warmongery)

Great news – US factory orders grew 7.3% YoY, the highest since July 2014, surely showing the Trumpian hope translating into economic reality? However, adjusted for non-defense and aircraft orders, year-over-year growth was just 0.3% – not exactly what the record high levels of sentiment would have hoped for.



Unless Washington can keep the global wormongery up, this spike will be short-lived just as in 2014. Time for some more Putin bashing, or is North Korea now the focus.


Dallas Mayor pulls his support for a massive taxpayer bailout of the Police and Fire pension fund.  The only way out if bankruptcy and start all over again

(courtesy zero hedge)


Dallas Mayor Pulls Support For “Massive Taxpayer Bailout” Of Police Pension

Dallas Mayor Mike Rawlings has finally reached his maximum willingness to throw taxpayer dollars at the Dallas Police and Fire Pension (DPFP) system and has pulled is support for a bill that, if it passes, will undoubtedly prove to be yet another futile effort to save the system from insolvency.  Despite support for the original legislation introduced by Dan Flynn, chair of the pensions committee in the Texas House of Representatives, Rawlings apparently took issue with a last minute addition to the bill that would have taxpayers fund the pensions of “phantom employees” based on a target Dallas police force of 3 officers per 1,000 residents.  Per ABC:

The clause sets a baseline number of officers and firefighters. In the case of police, that’s three officers per thousand. The clause would also automatically assume that a certain level of raises given.


“Basically you’re paying on phantom employees, not real employees,” Rawlings said. “We just can’t enter into an agreement with that degree of commitment for the city. No business would do it this way. We cannot find another pension fund in American where someone pays into a fund based on future employees. It’s just not done and it should not start here in the State of Texas.”


“This is the most taxpayer unfriendly poison pill that I’ve seen in this bill,” he said. “I’m not going to swallow this pill.”

Frankly, not wanting to spend taxpayer dollars to fund the pensions of officers that don’t even exist just seems selfish, Mike!

As we reported previously (see “Dallas Police Pension Board Approves Benefit Cuts; Asks For More Taxpayer Money To Avoid Collapse“), legislation to save the DPFP was introduced a couple of months ago by Dan Flynn.  Flynn’s bill called for Dallas taxpayers to contribute 34.5% of police and firefighter salaries each year into the failing pension system, up from 27% in 2015, plus an incremental $11 million per year.  In total, the adopted plan was expected to cost Dallas taxpayers an extra $22 million per year.

That said, the plan also called for pensioners to grant concessions, including the following:

  • Increase in retirement age to 58 from 55
  • Increase in employee contributions to 13.5% of payroll from 8.5%
  • Elimination of COLAs in the near term
  • Elimination of exorbitant interest payments made on employees DROP accounts

Of course, Flynn was appalled by Rawling’s opposition to funding the pensions of fake employees and took to twitter to blast his decision.

 “I am deeply disappointed that the Mayor is not in support of the Legislation that will save the Dallas Police and Fire Pension.  Dallas’s own website says how much they are committed to provide and now they back out over a provision that has always been in the bill since the day it was filed and want to hurt families more. I simply won’t allow it. 10,000 Police and Fire retirees and active members and their extended families will be damaged by this stance and we hope the Mayor thinks better of it.”

On the eve of public hearing, Dallas Mayor has changed his mind on support of bill to bring about Actuarial Soundness, to maintain plan.


Meanwhile, Rawlings also expressed opposition to the current governance set out in the bill as it gives 50% control to the city and 50% to public safety workers.

“The thing that’s really concerning to me is that retirees say Dallas promised us this money, ‘give it to us,’” he said. “Dallas didn’t promise the money and if you want us to own the problem,… Dallas needs to have the right governance to do that.”


He noted that when he first became mayor in 2011, he sought to have the pension fund audited in the face of questions about the financial stability of the fund.


“They said you have no legal authority to do that,” he said.


The mayor and the city’s position is that police and firefighters voted themselves excessively generous benefits, and that the fund’s leadership hid the extent of the fund’s troubles from the membership for years.

But don’t worry dear pensioners, we’re sure you’ll end up getting your taxpayer funded bailout…after all, there is no problem too large for taxpayers to solve.

* * *

For those who aren’t familiar with the DPFP fiasco, here is some background on how it ended up in its current predicament.

Just over a month ago we wrote that the Dallas Police and Fire Pension Fund was on the verge of collapse after a series of shady real estate investments resulted in massive markdowns of pension assets, the ouster of the fund’s CIO and an FBI raid of the fund’s largest real estate investment manager (see “Dallas Cops’ Pension Fund Nears Insolvency In Wake Of Shady Real Estate Deals, FBI Raid“).  We summed up the fund’s dilemma as follows:

The Dallas Police & Fire Pension (DPFP), which covers nearly 10,000 police and firefighters, is on the verge of collapse as its board and the City of Dallas struggle to pitch benefit cuts to save the plan from complete failure.  According the the National Real Estate Investor, DPFP was once applauded for it’s “diverse investment portfolio” but turns out it may have all been a fraud as the pension’s former real estate investment manager, CDK Realy Advisors, was raided by the FBI in April 2016 and the fund was subsequently forced to mark down their entire real estate book by 32%Guess it’s pretty easy to generate good returns if you manage a book of illiquid assets that can be marked at your “discretion”.

The rampant fraud at the DPFP left the fund over $3BN underfunded and its board of directors with no other option but to seek a $600mm infusion from taxpayers to keep the fund afloat.  Even worse, a review of the pension’s financials revealed $2.11 of annual benefit payments to members for every $1.00 contributed to the plan by members and taxpayers (mostly taxpayers)…the typical pension ponzi whereby plan administrators borrow from assets reserved to cover future liabilities (which are likely impaired) to cover current claims in full.



Well, it seems as though Dallas police officers are catching on to the ponzi and rushing to withdraw retirement funds as quickly as possible before the whole system goes bust.  As reported by a local ABC affiliate, Dallas police officers are retiring at a record rate and opting for full cash withdrawals of their pension benefits as opposed to equal monthly distributions for life (apparently they don’t think the fund will be around long enough to pay them for very long).

But the pension fund is in trouble and in danger of going bankrupt. That’s causing some officers and retirees to begin withdrawing their retirement funds and rolling it into their 401Ks.


News 8 has learned a that one assistant chief recently withdrew more than $1 million, and sources say nearly $300 million has been withdrawn throughout the department.


“We are in a serious situation and I think everyone needs to be concerned right now about where we are and where we need to go to get out of this.”

DPFP board chairman, Sam Friar, was apparently worried enough about the “run on the bank” exposing the pension for the ponzi scheme that it is, that he decided to send a letter to members urging them to “not act rashly and without full information.”  The pension board also voted to stop allowing current police officers to withdraw the cash value of their pensions and are considering further measures that would also restrict withdrawals by retirees.

The panic that has set in forced the chairman of the pension board Sam Friar to issue a letter to members.


“I would strongly urge all members not to act rashly and without full information,” he wrote. “You may make decisions that, after all the changes are made, are not in your best interest.”


The board was so concerned it voted to stop current officers from withdrawing any money from their pensions, and sources say the board will soon vote to no longer allow retirees to take their money out.


“This may be the only way the pension can limit the cash outflow because we are in a bad situation that right now the existence of system is at stake.”

Alas, the threats to restrict withdrawals of retirees probably didn’t work out the way Friar expected as it has set off a wave of early retirements.  According to NBC, for the first two weeks of September, 21 Dallas police officers retired when only 14 retirements were expected for all of August and September.

Through the first two weeks of September, there have been 21 Dallas police officers who retired.


Multiple sources told NBC 5 that commanders are bracing for many more retirements over the next two weeks as well.


The Dallas Police Department did not foresee the volume of retirements this month.


In early August, Deputy Chiefs told city council members in a presentation that they projected 14 retirements between Aug. 9 and Oct. 1.

Alas, while Dallas police and fire fighters may endure some short-term pain, as their pension Ponzi is revealed for all to see, we suspect that the real losers, as per the usual, will be taxpayers who will ultimately be forced to pony up whatever amount of money is required to keep the whole farce going just a little longer.



USA retail “bricks and mortar” bankruptcies soar in 2017:

(courtesy zero hedge)

2017 Retail Bankruptcies Soar To ‘Great Recession’ Highs

As U.S. equity markets continue their march back toward all-time highs, courtesy of the latest BTFD binge trade, at least one ‘small’ segment of the U.S. economy does not seem to be participating in the rally as 9 brick-and-mortar retailers have already filed for bankruptcy protection in 1Q 2017 alone.  That volume of filings matches the total number of retail bankruptcies for all of 2016 and puts the industry on pace to exceed even the ‘great recession’ highs. Per CNBC:

Nine retailers have filed in just the first three months of 2017, according to data provided exclusively to CNBC from AlixPartners consulting firm. That equals the number for all of 2016. It also puts the industry on pace for the highest number of such filings since 2009, when 18 retailers resorted to that action.


The rising number of retail bankruptcies comes as consumers are making more purchases online, and shifting their spending toward travel and other experiences. Meanwhile, the supply of physical stores continues to outweigh shopper demand, putting pressure on the industry’s profits.


“It’s just kind of this perfect storm where things are coming together, and it’s going to continue for awhile,” Deb Rieger-Paganis, a managing director in the turnaround and restructuring practice at AlixPartners, told CNBC.



Many of the early retail victims include companies that were snapped up by Private Equity interests during the last down cycle and aggressively levered.  In addition to the following nine retailers that have already liquidated or are working to reorganize, Payless Shoes and Bebe are also expected to file at some point in the not so distant future.

  • Gordmans Stores
  • Gander Mountain
  • General Wireless Operations (formerly RadioShack)
  • HHGregg
  • BCBG Max Azria
  • Michigan Sporting Goods Distributors
  • Eastern Outfitters
  • Wet Seal
  • Limited Stores

Of course, as Deb Rieger-Paganis, a managing director in the turnaround and restructuring practice at AlixPartners, points out, retail bankruptcies and/or store closures, especially from anchor tenants, can push the whole retail space into a downward spiral as “people don’t like to shop where there’s a lot of vacant space.”  So while larger retailers like Macy’s, J.C. Penney, Sears and Kmart have avoided chapter 11 so far in this cycle, they’re all in the process of closing hundreds of stores and those vacancies are likely to have ripple effects through the industry.

Meanwhile, as we pointed out last month (see “America’s Desperate Mall Owners Turn To Grocers, Doctors & High Schools To Fill Empty Space“), America’s mall owners are having such a hard time filling empty retail space that they’re turning to high schools, doctors offices and grocery stores.

Once a shining beacon of American capitalism, malls around the U.S. are failing at an alarming rate due to a combination of shifting consumption patterns, years of underinvestment by mall owners and a spate of retailer bankruptcies over the past 12 months that have left large swaths of once prime real estate empty (see “Number Of Distressed US Retailers Highest Since The Great Recession“).

Now, as the vacant square footage grows larger, mall owners are being increasingly forced to turn to non-conventional tenants to fill empty space.  Per the Wall Street Journal, the latest target of mall owners is yet another struggling industry, grocers, with everyone from Whole Foods to Kroger looking to snap up square footage at discount prices.

Natick Mall in Natick, Mass., is leasing 194,000 square feet of space vacated by J.C. Penney Co. to upscale grocer Wegmans Food Markets Inc., which is planning to open a store in 2018.
College Mall in Bloomington, Ind., plans to bring in 365 by Whole Foods Market in the fall.
Grocery giant Kroger Co., meanwhile, has purchased a former Macy’s Inc. location at Kingsdale Shopping Center in Upper Arlington, Ohio, and plans to build a new store in its place.

But we’re sure it will all work out just fine and wall street will go on buying those mall reits with reckless abandon…you know, because dividend yields.


The closing of Ralph Lauren’s flagship 5th Avenue store is a good Bellwether on what is going on in the  USA economy

(courtesy zero hedge)

Ralph Lauren To Close Flagship Fifth Avenue Store; Cut Jobs

The ongoing retail massacre claimed its latest victim this morning when iconic luxury retailer Ralph Lauren said it would shut its flagship Polo store on Fifth Avenue in New York City, among other office and store locations, and cut jobs as part of a cost-cutting plan. The company also said on Tuesday that it would integrate its products from the Fifth Avenue store into the Ralph Lauren men’s and women’s flagship stores on Madison Avenue and its downtown locations.

From the press release:

As part of Ralph Lauren’s continued commitment to optimizing its store footprint, the Company will close its dedicated Polo store at 711 Fifth Avenue and integrate its product into the Ralph Lauren Men’s and Women’s flagship stores on Madison Avenue and its downtown locations. The Company will continue to operate its seven additional store locations and its flagship Polo Bar Restaurant in New York City.


These decisions, together with actions to continue to streamline the organization, cost structure and real estate portfolio, will result in approximately $140 million in annualized expense savings, which will also help fund investments for future growth. These savings are in addition to the $180-$220 million of annualized expense savings announced at the Company’s June 7, 2016 Investor Day and are a part of achieving its financial objectives. Ralph Lauren expects to incur restructuring charges of approximately $370 million as a result of these new activities.


The Company will also explore new retail concepts, including leveraging Ralph’s Coffee, and developing new store formats that connect the brand to loyal and new consumers.

The retailer also said its e-commerce business would move to Salesforce.com Inc’s cheaper and more efficient Commerce Cloud platform. Ralph Lauren had said last year it was building an in-house global e-commerce platform.

Ralph Lauren said it expects to incur about $370 million in charges and save about $140 million from the new measures, which are part of a cost-cutting plan announced in June. The retailer did not specify how many jobs it would cut.

Last June, Ralph Lauren said it would cut 1,000 jobs and close 50 stores to lower costs and revive sales growth. As Reuters adds, Ralph Lauren, like other luxury brands, has been struggling as Americans spend lesser on apparel and accessories, resulting in falling sales in the last seven quarters.

Is was not immediately clear which CMBS loan would be impacted as a result of the imminent rent shortfall from Ralph Lauren’s vacancy, or whether a new renter had already signed up to take over the soon to be vacant space.



Michael Snyder discusses the upcoming economic collapse:

two commentaries

(courtesy Michael Snyder/Economic Collapse Blog)


What Is America Going To Look Like When Stock, Housing, And Even Used Car Prices All Crash?

Authored by Michael Snyder via The Economic Collapse blog,

Have you ever thought about what comes after the bubble?  In 2008 we got a short preview of what life will be like, but most Americans seem to have come to the conclusion that the last financial crisis was just a minor bump in the road toward endless economic prosperity.  But of course the truth is that the ridiculously high debt-fueled standard of living that we are enjoying now is not sustainable, and after this bubble bursts it will be an extremely painful adjustment for our society.

Since the last financial crisis, the U.S. national debt has nearly doubled, corporate debt has doubled, stock valuations have reached exceedingly ridiculous extremes, the student loan debt bubble has surpassed a trillion dollars, we are facing the largest unfunded pension crisis in U.S. history, and in many parts of the country (particularly the west coast) we are facing a housing bubble that is even worse than the one that burst in 2007 and 2008.

And even with all of these bubbles, U.S. GDP growth has been absolutely anemic Even if you believe the grossly manipulated numbers that the federal government puts out, the U.S. economy grew at a “miserably low” rate of just 1.6 percent in 2016…

In terms of GDP, the fourth quarter was revised up slightly, but there were adjustments for prior quarters, and overall GDP growth for the year 2016 remained at a miserably low 1.6%. We’ve come to call this the “stall speed.” It’s difficult for the US economy to stay aloft at this slow speed. As Q4 gutted any hopes for a strong finish, GDP growth in 2016 matched the worst year since the Great Recession.


And corporate profits, despite a stock market that has been surging for years, are even worse. A lot worse. They’ve declined for years. In fact, they declined for years during the prior two stock market bubbles, the dotcom bubble and the pre-Financial-Crisis bubble. Both ended in crashes.

Things have continued to get even worse early in 2016.  At this point, it is being projected that U.S. GDP will grow at an annual rate of just 0.9 percent during the first quarter of 2017.

So anyone that tries to tell you that the U.S. economy is in good shape is simply not being honest with you.

But even though things don’t look great now, they are going to look far, far worse after the biggest debt bubble in human history bursts.

For example, what do you think that America will look like after half of all stock market wealth disappears?  In a recent note to his clients, John P. Hussman stated that his team is projecting that by the end of this current market cycle “roughly half of U.S. equity market capitalization – $17 trillion in paper wealth – will simply vanish”.

And of course that projection lines up perfectly with what I have been saying for quite a while.  In order for key measures of stock market valuation (such as CAPE, etc.) to return to their long-term averages, stocks are going to have to fall at least 40 to 50 percent from their current levels.

As this coming crisis unfolds, other asset classes will experience astounding downturns as well.  This week, Morgan Stanley (one of the too big to fail banks) released a report that said that used car prices “could crash by up to 50%” over the next several years…

For months we’ve been talking about the massive lending bubble propping up the U.S. auto market. Now, noting many of the same concerns that we’ve highlighted repeatedly, Morgan Stanley’s auto team, led by Adam Jonas, has just issued a report detailing why they think used car prices could crash by up to 50% over the next 4-5 years.

Housing prices are primed for a major plunge as well.  This is especially true on the west coast where tech money and foreign purchasers from Asia have pushed home values up to dizzying levels.  Half a million dollars will be lucky to get you a “starter home” in San Francisco, and it was being reported that one poor techie living there was paying $1400 a month just to live in a closet.  Many believe that some cities on the west coast will be quite fortunate if home values only go down by 50 percent during the coming crash.

Everywhere you look there are bubbles.  In a recent piece, Daniel Lang pointed out some more of them

  • Eric Rosengren, the president of the Federal Reserve Bank of Boston, recently made a startling tacit admission. We may be in the midst of yet another real estate bubble. Major financial institutions in this country are in possession of over $14 trillion worth of residential real estate loans. That’s well over $40,000 for every man woman and child in America.
  • Low interest rates have fueled a bubble in subprime auto loans, and that bubble appears to be reaching its limits. There are now over 1 million ordinary and subprime auto loans that are delinquent, a number that hasn’t been this high since 2009.
  • There is now well over a trillion dollars worth of student loan debt in this country; much of it owned by low income families. And there’s little hope that these students will ever see a return on their investment. That’s why at least 27% of student loans are in default. While more than one in four students are in default now, that number was one in nine a decade ago. And if current trends continue, there could be $3.3 trillion of student loan debt by the end of the next decade.

At some point the imbalances become just too great and the system collapses in upon itself.

In other words, we are heading for a massive implosion.

And once the implosion happens, people are going to go absolutely nuts.  Anger and frustration are already rising to the boiling point all over the country, and it isn’t going to take much to push millions of Americans completely over the edge.

In a recent interview with Greg Hunter, author James Rickards warned that when things get really bad in America we could actually see what he refers to as “money riots”

So, could we be facing a “Mad Max” world if the financial system totally crashes? Rickards says, “In ‘Road to Ruin,’ I talk about what I call the money riots.  There is a lot of reasons for rioting.  When you start shutting banks and the stock exchange and they say you can’t get your money, it’s only temporary, trust us, people will go out and start to burn down banks.  The government is ready for that also with emergency response and martial law. . . . Governments don’t go down without a fight. . . . You can see the shutdown coming because they will try to buy time until they come up with a solution, whether it’s gold, Special Drawing Rights (SDR), guarantees or whatever it might be.  There are only two or three possibilities here, but all of them will take time, and they will have to shut down the system. . . . People will not sit for that.  So, that means people will riot.  They’ll burn down banks.  They will smash windows, but what is the reaction to that?  The answer is martial law, militarized police, actual military units and you get something that looks like fascism pretty quickly.”

I very much agree with his assessment.

All it is going to take is another major financial crisis and this nation will go completely and utterly insane.

Unfortunately, all of our long-term economic problems have proceeded to get a lot worse since the last time around, and so when things fall apart this time we will likely be looking at a scenario that is absolutely unprecedented in American history.

A lot of people have become very complacent out there these days, but that is a huge mistake.

Just because a crisis is delayed does not mean that it is canceled.  And because our leaders have kept making this economic bubble larger and larger, that just means that the coming crisis will be even more painful than it otherwise could have been.



The Next Subprime Crisis Is Here: 12 Signs That The US Auto Industry’s Day Of Reckoning Has Arrived

Authored by Michael Snyder via The Economic Collapse blog,

In 2008, subprime mortgages almost single-handedly took down the entire financial system, and now a new subprime crisis is here. 

In recent years, the auto industry has been able to boost sales by aggressively pushing people into auto loans that they cannot afford.  In particular, auto loans made to consumers with subprime credit have been accounting for an increasingly larger percentage of the market.  Unfortunately, when you make loans to people that should not be getting them, eventually a lot of those loans are going to start to go bad, and that is precisely what is happening now.  Meanwhile, automakers and dealers are starting to panic as sales have begun to fall and used car prices have started to crash.  If you work in the auto industry, you might remember how horrible the last recession was, and this new downturn could eventually turn out to be even worse.  The following are 12 signs that a day of reckoning has arrived for the U.S. auto industry…

#1 Seven out of the eight largest automakers in the United States fell short of their sales projections in March.

#2 Overall, U.S. auto sales so far in 2017 have been described as a “disaster” despite record spending on consumer incentives by automakers.

#3 Dealer inventories are now at the highest level that we have seen since the last financial crisis.  Why this is so troubling is because there are a whole lot of unsold vehicles just sitting there doing nothing, and this is becoming a major financial problem for many dealers.

#4 It now takes an average of 74 days before a dealer is able to sell a new vehicle.  This number is also the highest that it has been since the last financial crisis.

#5 Not only is Ford projecting that sales will fall this year, they are also projecting that sales will fall in 2018 as well.

#6 Used vehicle prices are already starting to decline dramatically

The used-vehicle price index from the National Automobile Dealers Association posted a 3.8% decline in February compared to the prior month. NADA also said wholesale prices fell 1.6%.

#7 As I discussed yesterday, Morgan Stanley is projecting that used car prices “could crash by up to 50%” over the next four or five years.

#8 Right now, more than a million Americans are behind on their payments on their auto loans.  This is something that has not happened since the last financial crisis.

#9 In 2017, U.S. consumers are more “underwater” on their auto loans than they have ever been before.

#10 Subprime auto loan losses have soared to their highest level since the last financial crisis, and the delinquency rate on those loans has risen to the highest level that we have seen since the last financial crisis.  By now, I am sure that you are starting to notice a pattern in these data points.

#11 At this moment, approximately $200,000,000,000 has been loaned out by auto lenders to consumers with subprime credit.

#12 Just like with subprime mortgages in the run up to the last financial crisis, subprime auto loans have been bundled together and sold as “securities” to investors.  And just like last time around, this has turned out to be a recipe for disaster

Many auto loans, including those considered subprime, are securitized and sold to investors. But Morgan Stanley recently reported that the share of auto securities tied to “deep subprime” loans – those given to borrowers with a FICO credit score below 550 — has risen from 5.1 percent in 2010 to 32.5 percent today. It said defaults on those bonds have risen significantly in the past five years.


Almost a quarter of the more than $1.1 trillion in U.S. auto loan debt is owed by subprime borrowers, and delinquency rates have hit their highest point in seven years.

In the old days, you could always count on the U.S. auto industry to bounce back eventually because of the economic strength of average U.S. consumers.

Unfortunately, the middle class in America is being systematically hollowed out by long-term economic trends that our leaders in Washington D.C. have consistently ignored.

We have become a nation of economic extremes.  There are more millionaires in this country than ever before, but meanwhile poverty is exploding in communities all over the country.

If you live in a prosperous area, things may be going great where you live for the moment.  But as Gallup has discovered, an all-time record high percentage of Americans are worrying “a great deal” about hunger and homelessness these days…

Over the past two years, an average of 67% of lower-income U.S. adults, up from 51% from 2010-2011, have worried “a great deal” about the problem of hunger and homelessness in the country. Concern has also increased among middle- and upper-income Americans, but they still worry far less than do lower-income Americans.

You may have plenty of money in your bank account, and so for you hunger and homelessness are not very big issues.  But for those that are just scraping by from month to month, having enough food and a place to sleep at night are top priorities.  Here is more from Gallup

Americans at all income levels are expressing greater concern about hunger and homelessness, and it is the top worry among lower-income Americans, who are most likely to struggle to pay for adequate food and housing.

In addition to the woes of the auto industry, the retail industry is going through the worst wave of store closings in modern American history, pension funds are melting down all over the nation, and stocks are primed for a crash of epic proportionsThings are lining up just right for the kind of scenario that I laid out in The Beginning Of The End, but unfortunately most people are not listening to the warnings.

The same thing happened just before the great financial crisis of 2008.  All of the warning signs were there well in advance, and many of the experts were warning about what was coming as early as 2005.  But because it did not happen immediately, a lot of people greatly mocked the warnings.

But then the fall of 2008 arrived and all of the mockers suddenly went silent.

As you can see from the numbers that I shared above, a new crisis has already arrived.

The only question now is how bad it will ultimately turn out to be.

As always, let us hope for the best, but let us also get prepared for the worst.


Fed Hawk Lacker resigns after admitting he leaked that confidential Fed information to Medley in 2012.  He did not leave voluntarily:

(courtesy zero hedge)


Richmond Fed President Lacker Resigns After Admitting He Leaked Confidential Fed Information

Tyler Durden's picture

We can now close the case on who leaked that confidential, market-moving data to Medley global back in 2012: it was Richmond Fed’s Jeffrey Lacker, who previously was expected to retire in October, and  is resigning immediately.

In a statement, Lacker confirms he revealed confidential FOMC information to Medley Global and that he lied to the Fed’s general counsel on at least two occasions. His full statement is below:

Statement Of Dr. Jeffrey Lacker


During the past 13 years it has been my privilege to serve as President of the Federal Reserve Bank of Richmond. It has also been an honor to contribute to the development of our nation’s monetary policy as a member of the Federal Reserve’s Federal Open Market Committee (“FOMC”).


While transparency of the monetary policy process is important, equally important are the confidentiality policies that protect the internal deliberations of the FOMC and ensure the integrity of our financial markets. The Federal Reserve’s confidentiality policies seek to guide participants in maintaining the balance between transparency and confidentiality. The FOMC has had in place for many years two specific policies relating to confidentiality. the FOMC Policy on External Communications of Committee Participants (the “External Communications Policy-) and the Program for Security of FOMC Information (the “Information Security Policy”).


In 2012, my conduct was inconsistent with those important confidentiality policies. Specifically, on October 2, 2012, I spoke by phone with an analyst (“the Analyst”) concerning the September 2012 meeting of the FOMC. The Analyst authors reports on Federal Reserve matters on behalf of Medley Global Advisors (“Medley’). Medley publishes macro-economic policy intelligence for institutions such as hedge funds and asset managers and is owned by the Financial Times Limited.


During that October 2, 2012 discussion, the Analyst introduced into the conversation an important non-public detail about one of the policy options considered by participants prior to the meeting. Due to the highly confidential and sensitive nature of this information, I should have declined to comment and perhaps have ended the phone call. Instead, I did not refuse or express my inability to comment and the interview continued. Additionally, after that phone call I did not, as required by the Information Security Policy, report to any FOMC personnel that the Analyst was in possession of confidential FOMC information. When Medley published a report by the Analyst the following day, October 3, 2012, it contained this important detail about one of the policy options and I realized that my failure to decline comment on the information could have been taken by the Analyst, in the context of the conversation, as an acknowledgment or confirmation of the information.


I deeply regret the role I may have played in confirming this confidential information and in its dissemination to Medley’s subscribers. In this episode, as in all of my communications with analysts, journalists and the public, it was never my intention to reveal confidential information. I further acknowledge that through this and other conversations with the Analyst, I may have contravened the External Communications Policy, which prohibits providing any profit-making person or organization with a prestige advantage over its competitors.


Following these events, I was interviewed on December 10, 2012, as part of an internal review conducted by the General Counsel of the FOMC. In advance of that interview, on December 6, 2012, I provided written responses to a questionnaire issued by the General Counsel seeking, among other things, all relevant information regarding my communications with the Analyst. Althoug it was my intention to cooperate fully with the internal review, I regret that I did not disclose to the General Counsel, either in my December 6, 2012 questionnaire or the December 10, 2012 interview, that the Analyst was in possession of confidential information during my conversation with her on October 2,2012.


In 2015, I was interviewed again as part of a separate investigation conducted by the United States Attorney’s Office for the Southern District of New York, the Office of the Inspector General of the Federal Reserve Board, the Federal Bureau of Investigation, and the U.S. Commodity Futures Trading Commission. In this subsequent 2015 interview with law enforcement officials, I did disclose that the Analyst was in possession of confidential information during my October 2. 2012 conversation with her.


I apologize to my colleagues and to the public I have been privileged to serve. I have always strived to maintain the appropriate balance between transparency and confidentiality, but I regret that in this instance I crossed the line to confirming information that should have remained confidential. I previously announced my intention to retire as President of the Federal Reserve Bank of Richmond in October 2017, and in light of these matters I have decided to make my departure from the Federal Reserve effective today.

The Richmond Fed made the following announcement moments ago, which suggests that Lacker did not leave voluntarily:

The Federal Reserve places a high priority on safeguarding information. We expect every employee to comply with all relevant policies and procedures, as well as our standards of conduct. Employees must review and acknowledge our policies annually. Once our Bank’s Board of Directors learned of the outcome of the government investigations, they took appropriate actions.


We are focused on moving forward within our organization—and were already underway with our presidential search, following Jeffrey Lacker’s announcement in January to retire in 2017. This search process will continue as scheduled. In the interim, First Vice President Mark Mullinix is serving as the Bank’s acting president.

This shocking event comes just hours after Chairman of the House Financial Services Committee Jeb Hensarling demanded that “American Households Should Demand a More Reliable Governance Structure for the Fed.”

As CNBC’s Steve Liesman adds, Lacker’s resignation was the result of negotiations with law enforcement officials.

While that does not make it clear if Lacker will now not face criminal prosecution for leaking material information – recall the FBI has been probing the Fed’s 2012 leak to Medley since 2015 – this is great news for Janet Yellen, who was personally close with Medley’s Regina Schleiger, ther person at the center of the Fed leak scandal, as the Fed Chair is now off the hook.

Or maybe not: while Lacker has taken blame for the Medley leak from October 3, 2012, recall that the Fed was also investigating a second leak, involving a September 28, 2012 article in the WSJ by Jon Hilsenrath titled “How Bernanke Pulled the Fed His Way” in which Bernanke’s planning to launch QE3 was described in great detail.

As the Fed revealed in a FOIA seeking information on the internal probes, the WSJ leak is ongoing:

One article was published in the Wall Street Journal (WSJ) on September 28, 2012, and appeared to disclose information about discussions of Committee participants around the June, August and September, 2012, FOMC meetings in apparent violation of the FOMC’s policies regarding security of FOMC information. In particular, this first article included:

  • Descriptions of the non-public views of some participants that appeared to have been disclosed by other participants. (As described below, all participants are permitted to disclose their own views about monetary policy, but participants are not permitted under the FOMC’s policies to describe the views of another participant unless that participant has already expressed those views publicly.)
  • The number of policy alternatives considered by the Committee at its September meeting.
  • The roles of various participants in the policy development.

As for who will replace Lacker, Trump will surely have some thoughts on that, as Lacker’s seat becomes a voting one in 2018.

* * *

Update: No charges will be brought against Lacker.

Statement from Lacker’s attorney, Richard Cullen of McGuire Woods:

No further comment, although maybe Ben Bernanke can blog about it one day.


Please forgive me as tonight’s commentary is not as detailed as always because I was out for much of the day.

It will be better tomorrow.


I will see you tomorrow night


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