April 6/Gold and silver hold their gains from yesterday/Silver open interest rises to 222,000 contracts or only 2000 away from record levels despite silver being over 2 dollars below the price when that record was set/Two major Italian banks are now asking for public help/Tillerson warns Russia that Assad must go as war drums start beating/Republicans trigger the nuclear options to get Gorsuch nominated to the Supreme Court/

Gold: $1250.30  UP $4.90

Silver: $18.23  UP 6  cents

Closing access prices:

Gold $1252.45

silver: $18.26!!!










Premium of Shanghai 2nd fix/NY:$10.00


LONDON FIRST GOLD FIX:  5:30 am est  1253.75




For comex gold:



 TOTAL NOTICES SO FAR: 562 FOR 56,200 OZ    (1.748 TONNES)

For silver:

For silver: APRIL


Total number of notices filed so far this month: 523 for 2,615,000 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 surpassing 222,000 contracts or about 2,000 contracts below the record set last year. The price of silver is a good $2.18 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.


The volume on the silver comex was extremely high and we may see a considerable rise again in its OI for tomorrow’s reading. Tomorrow is the jobs report and always we see extreme volatility in the precious metals. Let us see what tomorrow brings.

Let us have a look at the data for today



In silver, the total open interest  ROSE BY A CONSIDERABLE 3866 contracts UP to 223,026 DESPITE THE FALL IN PRICE ( 13 CENTS) WITH RESPECT TO YESTERDAY’S TRADING. THE HEDGE FUNDS (MANAGED MONEY) CONTINUES TO SLOWLY ADD TO THEIR POSITIONS WITH THE BANKERS TRYING TO COVER THEIR EVER BURGEONING SHORTS (OVER 555 MILLION OZ) BUT TO NO AVAIL. In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.115 BILLION TO BE EXACT or 159% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold also ROSE BY 568 contracts WITH THE FALL IN THE PRICE OF GOLD ($9.20 with YESTERDAY’S TRADING). The total gold OI stands at 428,376 contracts.


we had 126 notice(s) filed upon for 12600 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 a small change  in inventory at the SLV/ a withdrawal of 136,000 oz from the SLV

THE SLV Inventory rests at: 329.148 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 HUGE 2,942 contracts UP TO  222,102 DESPITE THE FACT THAT SILVER WAS DOWN A HEALTHY 13 CENT(S) with YESTERDAY’S trading. We no doubt had some attempted short covering but the longs keep piling on making it difficult to cover. In contrast, the gold open interest FELL BY 2122 contracts DOWN to 425,687 WITH THE FALL IN THE PRICE OF GOLD TO THE TUNE OF $9.60  (YESTERDAY’S TRADING).

(report Harvey


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

2c/ FRBNY earmarked gold report



i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 10.70 POINTS OR 0.33%/ /Hang Sang CLOSED DOWN 127.08 POINTS OR .52%  . The Nikkei closed DOWN 264.21 OR 1.40% /Australia’s all ordinaires  CLOSED DOWN 0.31%/Chinese yuan (ONSHORE) closed DOWN at 6.8988/Oil DOWN to 51.43 dollars per barrel for WTI and 54.71 for Brent. Stocks in Europe ALL MIXED   ..Offshore yuan trades  6.8896 yuan to the dollar vs 6.8988 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN WEAKER  AND THE OFFSHORE YUAN MUCH  WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS SATISFIED WITH WASHINGTON’S RESPONSE 





i)Here we go again:  Italy’s two problem banks Veneto and Popolare di Vicenza are asking for taxpayer help in the funding of 6.4 billion euro shortfall. They are doing everything they can to avoid a “bail in” which will hurt bondholders and shareholders.

( Reuters)

ii)Another central bank, the Central Bank of the Czech Republic negates its cap against the Euro as the Koruna advances smartly. It seems that inflation is gripping this nation and surprisingly huge capital inflows into the country due to the perception that its economy is growing.  The country just could not stop the pressure at the upper end of its peg so it abandoned it today

( zero hedge)


i)Syria denies the use of chemical weapons

( zerohedge)

ii) It seems that the “deep state” is controlling Trump and his team:  Tillerson warns Russia that there are steps underway to remove Assad:

( zero hedge)

iii)Oh my goodness!! What he is thinking!!!!: A saturation strike in Syria which will result in Russian military deaths!!  Gold down a dollar on this news!

( zero hedge)


A terrific look at what is going on inside Toronto’s house price bubble:

( Wolf Richter/WolfStreet)




Iraq will not cut production at all, instead it plans a 600,000 barrel per day output increase

( Slav/OilPrice.com)



i)Mike Kosares’s USA gold puts 11 gold related commentaries in the clear for you to read

( zero hedge)

10. USA stories


i) Strange data this morning:  jobless claims crash by the most in 2 years

( zero hedge)

ii)Knoxville Tennessee will no doubt be ground zero for Obamacare as now their only provider will provide provide services in 2018

( zero hedge)

iii)Nunes recuses himself from the phony Russian interference in the USA election probe:

( zerohedge)

ivReport shows that the spy agencies routinely unmasked lawmakers and the reports would give a detailed look at what the lawmakers were doing on a daily basis

(courtesy zero hedge)

( zero hedge)

vi)This is a surprise:  Gary Cohn backs the reinstating of Glass Steagal and the breaking up of big banks

(courtesy zero hedge)

vii) Republicans trigger the  Nuclear option which crushes the Democratic blockade of Gorsuch:

(courtesy zero hedge)

viii)Last Monday, Payless Shoes filed for bankruptcy protection:  According to Fitch here are eight others that will file next:

( zero hedge)

ix)David Stockman discusses in reality what is going on behind the scenes in the uSA: that there is not a chance that tax reform/stimulus/ will occur and the truth behind the Syrian tragedy.

a must read..

(courtesy zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 2121 CONTRACTS DOWN to an OI level of 425,687 WITH THE  FALL IN THE PRICE OF GOLD ( $9.60 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 226 contract(s) FALLING TO 2,141. We had 81 notices served yesterday so we lost another 145 contracts or 14,500 oz will not stand for delivery in the active delivery month of April and these were cash settled via the EFP route highlighted by James Turk and myself on April 4/2017.

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 176 contract(s) and thus its OI is 2550 contracts. The next big active month is June and here the OI FELL by 1173 contracts DOWN to 306347.

We had 126 notice(s) filed upon today for 12,600 oz

 And now for the wild silver comex results.  Total silver OI ROSE BY A HUGE 2,942 contracts FROM  219,160 UP TO 222,102 DESPITE YESTERDAY’S 13 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 1,000 CONTRACTS AWAY FROM RECORD HIGHS IN OI AND YET WE ARE $2.20 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 159 contracts. We had 190 notices filed yesterday so we GAINED 31 contracts or an additional 155,000 oz will stand for delivery.

The next active contract month is May and here the open interest SURPRISINGLY LOST ONLY 477contracts DOWN to 154,962 contracts which is astonishingly high. The non active June contract GAINED 4 contracts to stand at 164. The next big active month will be July and here the OI gained 2652 contracts up to 39,388.


For those keeping score, the initial amount of silver oz that stood for delivery for the May 2016 contract month: 28.01 million oz.  By conclusion of the month only 13.58 million oz stood and the rest was cash settled.(ERP ROUTE)


We had 0 notice(s) filed for NIL oz for the APRIL 2017 contract.

VOLUMES: for the gold comex

Today the estimated volume was 153,989  contracts which is FAIR.

Yesterday’s confirmed volume was 252,273 contracts  which is GOOD.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for APRIL
 April 6/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 45,032.00 oz
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 74,127.31 oz
No of oz served (contracts) today
126 notice(s)
12,600 OZ
No of oz to be served (notices)
2015 contracts
201,500 oz
Total monthly oz gold served (contracts) so far this month
562 notices
56,200 oz
1.7480 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   265,510.7 oz
Today we HAD 3 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 JPMorgan: 41,977.751 oz  (1.30 tonnes)  something is brewing if JPMorgan deposits that much gold  for two days in a row.
ii) Into Scotia: 32150.000 oz (1000 kilobars)  suspect!
total customer deposits; 74,127.751  oz
We had 3 customer withdrawal(s)
 i) Out of Brinks: 32.15  oz (one kilobar)
ii) Out of Scotia: 31,689.751 oz
iii) Out of Manfra: 13,310.100 oz (414 kilobars)
total customer withdrawal:  45,032.00  oz
 we had 1 adjustments:
 i) Out of Delaware:  7,308.175 oz was adjusted out of the customer account and this landed into the dealer account of Delaware

Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 126 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 2 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 (562) x 100 oz or 56200 oz, to which we add the difference between the open interest for the front month of APRIL (2141 contracts) minus the number of notices served upon today (126) x 100 oz per contract equals 272,100 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 (562) x 100 oz  or ounces + {(2141)OI for the front month  minus the number of  notices served upon today (126) x 100 oz which equals 257,700 oz standing in this non active delivery month of APRIL  (8.0155 tonnes)
we lost 145 contracts or an additional 14,500 oz will not stand and these guys were cash settled via the EFP route. 
 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: 8.0155
total for the 16 months;  252.857 tonnes
average 15.803 tonnes per month
Total dealer inventory 990,497.01 or 30.808 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 9,016,931.804 or 280.46 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 280.46 tonnes for a  loss of 23  tonnes over that period.  Since August 8/2016 we have lost 74 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 6. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
2,842,579.86 oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 1,422,741.652 oz
No of oz served today (contracts)
No of oz to be served (notices)
246 contracts
(1,230,000  oz)
Total monthly oz silver served (contracts) 523 contracts (2,615,000 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  1,625,004.2 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: Nil oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 3 customer withdrawal(s):
i) Out of Brinks:  1,191,454.500 oz
ii) Out of CNT  1,231,380.06 oz
iii) Out of Scotia: 419,745.300 oz
 We had 2 Customer deposits:
i) Into JPMorgan:  1,191,454.482 oz
ii) Into Scotia:  231,287.170 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; 1,422,741.652 oz
 we had 0 adjustment(s)
The total number of notices filed today for the APRIL. contract month is represented by 0 contract(s) for NIL 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 523 x 5,000 oz  = 2,615,000 oz to which we add the difference between the open interest for the front month of APRIL (446) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
Thus the initial standings for silver for the APRIL contract month:  523(notices served so far)x 5000 oz  + OI for front month of APRIL.( 446 ) -number of notices served upon today (0)x 5000 oz  equals  3,845,000 oz  of silver standing for the APRIL contract month. 
We gained 31 contracts or an additional 155,000 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 56,101 which is EXCELLENT 
Yesterday’s  confirmed volume was 86,845 contracts  which is EXCELLENT!!.
Total dealer silver:  29.181 million (close to record low inventory  
Total number of dealer and customer silver:   189.794 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 6.3 percent to NAV usa funds and Negative 6.5% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.2%
Percentage of fund in silver:39.6%
cash .+0.1%( April 6/2017) 
2. Sprott silver fund (PSLV): Premium FALLS  to -43%!!!! NAV (April 6/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to – 0.19% to NAV  ( April 6/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -43% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.19%/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 6/no change in gold tonnage at the GLD/Inventory rests at 836.77 tonnes

April 5/no change in gold tonnage at the GLD/Inventory rests at 836.77 tonnes

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 6 /2017/ Inventory rests tonight at 836.77 tonnes


Now the SLV Inventory

April 6/a tiny withdrawal of 136,000 oz of silver from the SLV/Inventory rests at 329.148 million oz

April 5/ a withdrawal of 1.042 million oz from the SLV/Inventory rests at 329.284 million oz

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 6.2017: Inventory 329.148  million oz

Major gold/silver trading/commentaries for THURSDAY


Why Now Is The Time To Invest In Gold and Silver – Schroders

Invest In Gold and Silver – Now Is The Time – Schroders 

Schroders is one of the leading investment managers in the world. It is a global asset management company, founded in 1804 and based in the UK. The company employs over 4,100 people worldwide across 37 offices in 27 different countries around Europe, America, Asia, Africa and the Middle East and manages ove £400 billion in assets.

by David Thorpe of What Investment

James Luke, Commodities fund manager at Schroders, believes now is a good time to invest in gold and silver.

Gold bars at bullion dealers Goldcore, in London, U.K. in 2010 Photographer: Chris Ratcliffe/Bloomberg

He said, ‘The primary reason for investing in commodities, and especially gold and silver, should always be as an inflation hedge. Given the printing of money by the world’s central banks through quantitative easing, there is every reason to argue that higher inflation is coming in the future.

Gold and silver investments in particular remain very under-owned. Some investors fear the prospect of an increasing base interest rate in the US is reason alone to avoid these types of investments.

However, although past performance is not a reliable indicator of future results, the gold price has tended to rise from the beginning to the end of Federal Reserve (Fed) hiking cycles. In the last four instances when the Fed embarked on a hiking cycle, in three of the four instances gold saw +10 per cent to +20 per cent returns from beginning to end.’

He continued, ‘The environment for gold investments remains positive. In the background, global record debt burdens have not magically vanished. These make global growth highly sensitive to any real increase in interest rates and the cost of servicing these debts.

This is a key reason to expect that central banks will be highly wary of raising interest rates too quickly and that real interest rates (a key driver of gold prices) should continue to remain very low and have the possibility of being negative as inflation accelerates.’

Full article on What Investment




Mike Kosares’s USA gold puts 11 gold related commentaries in the clear for you to read

(courtesy zero hedge)

11 gold-related items in USA Gold’s ‘News & Views’ letter for April


10:25a HKT Thursday, April 6, 2017

Dear Friend of GATA and Gold:

USA Gold’s “News & Views” letter for April, compiled by Mike Kosares, reports in the clear 11 gold-related items, some of which got past your secretary/treasurer. The letter is posted here:


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


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


1 Chinese yuan vs USA dollar/yuan WEAKER  6.8988(   REVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES WEAKER TO ONSHORE AT   6.8896/ Shanghai bourse UP 10.70 POINTS OR 0.33%   / HANG SANG DOWN 127.08 POINTS OR .52%

2. Nikkei closed DWON 264.21 POINTS OR 1.40%   /USA: YEN RISES TO 110.94

3. Europe stocks opened ALL MIXED: TO THE DOWNSIDE      ( /USA dollar index RISES TO  100,55/Euro DOWN to 1.0671


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  51.43 and Brent: 54.71

3f Gold UP/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.267%/Italian 10 yr bond yield UP  to 2.280%    

3j Greek 10 year bond yield FALLS to  : 7.10%   

3k Gold at $1252.10/silver $18.23 (8:15 am est)   SILVER  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 3/100 in  roubles/dollar) 56.33-

3m oil into the 51 dollar handle for WTI and 54 handle for Brent/

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


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0032 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0703 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +.268%

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 2.355% early this morning. Thirty year rate  at 3.011% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Global Stocks Rebound From Overnight Lows, On Edge Ahead Of Trump-Xi Meeting

S&P futures are little changed at 6am ET, trading at 2347.55 and paring an earlier 0.4 percent drop, on the back of the USDJPY ramp which for the second day in a row has emerged alongside the European open, just as the key 110 support level appears in danger, soothing concerns about the Fed’s balance sheet reduction and “some” Fed officials warning that stocks have gotten expensive.

The S&P plunged in the last 90 minutes of trading on Wednesday led by banks and energy companies. While Asian stocks fall in early trading, European bourses rebounded from session lows alongside the S&P and USDJPY. In Europe, media, bank and insurers lead the decline but have since cut their losses as the market’s attention shifts to the upcoming summit between Trump and Xi.

Ahead of Mar-A-Lago meeting, central banks remained the dominant theme for markets on Thursday, with traders troubled by the prospect of a shrinking Fed balance sheet and the euro briefly tumbling then recouping much of its losses after Mario Draghi reaffirmed ECB monetary policy. Specifically, the ECB’s President warned Thursday that it was too early to reduce the bank’s massive monetary stimulus, despite signs of strength in the eurozone economy, and pushed back against suggestions that the ECB might raise interest rates soon. Top ECB officials have sent out mixed messages in recent days on whether the central bank is ready to wind down sweeping stimulus measures such as its EUR2.3 trillion ($2.5 trillion) bond-purchase program and subzero interest rates. As a result, market expectations for an ECB rate hike in one year have declined sharply over the past two weeks.

Investor expectations that the ECB could raise the cost of borrowing as early as January 2018 had increased after Draghi’s March 9 press conference. Governing Council members from Austria’s Ewald Nowotny to the Netherlands’ Klaas Knot and Italy’s Ignazio Visco, as well as Executive Board member Benoit Coeure, had voiced to different degrees openness to a change in sequencing.

As has often been the case, Draghi’s commentary was quickly defused by comments from the Bundesbank’s own Jens Weidmann who said “given the prospect of a continuous, robust economic recovery in the euro area and an increase in price pressure, the discussion on when the Governing Council should consider monetary policy normalization and how it could adjust its communication accordingly in advance is legitimate.”

Weidmann adds that “there is agreement within the Governing Council that an expansive monetary policy stance is currently appropriate” yet one can “be of different opinions about the correct degree of monetary policy expansion. I could have imagined a less expansive monetary policy, especially as many economic indicators are developing positively.”

The currency impact was as follows:

Europe’s Stoxx 600 Index headed for its first retreat in three days as S&P 500 futures steadied. Treasury yields pared some of Wednesday’s drop, which was triggered by the Fed’s warning it would reduce its balance sheet before year end, damping the need for interest-rate hikes.

As Bloomberg notes, the Fed minutes did little to alter market views on the bank’s assessment of the economy, but the discussion on shrinking the $4.5 trillion balance sheet later this year underscored prospects for a drop in global liquidity. The message once again contrasted with that of the central bank in Europe, where Draghi said on Thursday “continued support for demand remains key.”

“Most portfolio managers think equities are the most overbought in 20 years and so anything that creates some kind of concern, well, it is an excuse to take profits,” said Pictet Asset Management’s chief strategist Luca Paolini. He was referring to minutes of the Fed’s last meeting that showed most of the U.S. central bank’s policymakers thought it should begin trimming its $4.5 trillion balance sheet later this year, earlier than many had expected.

Some Fed members also “viewed equity prices as quite high relative to standard valuation measures,” a rare comment on asset levels that also caught investors off guard.

“If near-zero rates and central bank buying of bonds have been the fundamental driver of global capital towards higher-yielding assets, then reversing both parts of this can’t be helpful,” Kit Juckes, a global strategist at Societie Generale, wrote in a note. “Which is how markets have reacted overnight.”

Broader sentiment had also been bruised overnight when U.S. House of Representatives Speaker Paul Ryan said there was no consensus on tax reform and it would take longer to accomplish than healthcare.

Markets have risen in recent months in part on speculation fiscal stimulus would boost U.S. growth and inflation. “Trump’s agenda is falling to pieces,” said Pictet’s Paolini. “And that is probably the main concern (for stock market investors).”

The Stoxx Europe 600 Index fell 0.2 percent after closing little changed on Wednesday. Futures on the S&P 500 were modestly in the green adter declining 0.4% earlier in the session.

The whiplash in sentiment saw Japan’s Nikkei hit its lowest since early December.  Australia’s index also lost 0.5 percent. Shanghai .SSEC made marginal gains as a private survey of China’s service sector showed activity expanded at its slowest pace in six months in March.

“We were hit by a bucket of cold water,” said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “Signs that the Fed could pare its balance sheet are shocking enough, but the mood was exacerbated as the Fed touched upon stock valuations, which is very rare.”

Today the focus turns to President Trump’s two-day meeting with China President Xi Jingping at Trump’s estate in Florida. There don’t appear to be any scheduled press conferences just yet but it’s worth keeping an eye on the headlines as the next two days progress. Clearly North Korea will be a subject near to the top of the agenda. Importantly though the meeting is the start of a new China-US bilateral relationship so the rhetoric which follows from the leaders will be closely scrutinised and debated one would imagine.

Topping the agenda at Trump’s Mar-a-Lago resort in Florida will be whether he makes good on his threat to use U.S.-China trade ties to pressure Beijing to do more to rein in its nuclear-armed neighbor North Korea. Nerves were not helped when U.S. Pacific Fleet Commander Admiral Scott Swift said any decision on a pre-emptive attack against North Korea would be up to Trump.

Investors also remain focused on health care and tax policy in Washington, with House Speaker Paul Ryan saying the chances for a vote on a revised repeal of Obamacare this week were dwindling. Ryan also said tax reform could take longer, Reuters reported.

The Bloomberg Dollar Index returned to gains as gold and oil pared declines and the euro was little changed.

Initial jobless claims data due.

Market Snapshot

  • S&P 500 futures little changed at 2,346.00
  • STOXX Europe 600 down 0.5% to 378.30
  • MXAP down 0.8% to 146.21
  • MXAPJ down 0.7% to 479.56
  • Nikkei down 1.4% to 18,597.06
  • Topix down 1.6% to 1,480.18
  • Hang Seng Index down 0.5% to 24,273.72
  • Shanghai Composite up 0.3% to 3,281.01
  • Sensex down 0.4% to 29,865.57
  • Australia S&P/ASX 200 down 0.3% to 5,856.29
  • Kospi down 0.4% to 2,152.75
  • German 10Y yield fell 0.5 bps to 0.253%
  • Euro down 0.09% to 1.0653 per US$
  • Brent Futures unchanged at $54.36/bbl
  • Italian 10Y yield fell 0.5 bps to 1.976%
  • Spanish 10Y yield rose 2.4 bps to 1.644%
  • Gold spot down 0.1% to $1,254.65
  • U.S. Dollar Index little changed at 100.58

Top Overnight News

  • Unilever Revamps to Protect Independence After Kraft Bid
  • It’s Fed Versus Market as Traders Bet Balance Sheet Slows Hiking
  • Cohn Said to Back Wall Street Split of Lending, Investment Banks
  • House Speaker Ryan Meets With Finance Executives at Capitol
  • Trump’s Tax Overhaul Keeps Congress Waiting as Questions Pile Up
  • Trump Warns Syria Poison Gas Attack Goes ‘Beyond Red Lines’
  • Deutsche Bank Said Near Full Takeup for $8.5 Billion Offer
  • Euro Declines as Draghi Sees No Need for ECB to Change Course
  • BlackRock Is ‘Tactically Adding’ to South African Bond Holdings
  • HNA Said to Be in Advanced Talks for $1 Billion CWT Takeover
  • Costco March Comp. Sales Beat Estimates
  • Gartner Sees Higher Mobile Device Spending on Chinese Upgrades
  • Ford to Introduce Two New Electric Vehicles to China
  • GM India Says Continues to Progress Toward Sale of Halol Plant
  • Barrick Says Shandong to Buy 50% of Veladero Mine for $960m
  • Google Invests in INDIGO Undersea Cable in Southeast Asia

Asia equity markets traded negative following a similar downbeat US close amid weakness in the energy sector and in the wake of the Fed minutes, which showed that the Fed discussed normalization of the balance sheet and that some officials viewed stock prices as quite high. ASX 200 (-0.5%) suffered from losses in the financial sector, while Nikkei 225 (-1.4%) was the laggard in the region on JPY strength as USD/JPY failed to maintain 111.00. Hang Seng (-0.7%) and Shanghai Comp. (+0.1%) were mixed as participants digest the latest Chinese Caixin Services and Composite PMI figures which printed at 6-month lows, but remained in expansionary territory. 10yr JGBs traded marginally higher amid a subdued risk tone in stocks, while today’s enhanced liquidity auction super-long JGBs drew greater interest with the b/c increasing from prior. Chinese Caixin Services PMI (Mar) 52.2 (Prey. 52.6); 6-month low. (Newswires) Chinese Caixin Composite PMI (Mar) 52.1 (Prey. 52.6); 6-month low. PBoC refrained from conducting open market operations for the 8th consecutive day.

Top Asian News

  • Mobius Says China Stocks Are Too Expensive After Tech-Led Surge
  • Hongqiao Tycoon Sought China Help on Auditor Talks, Short Seller
  • Yum China 1Q Rev. Beats Est.; Shares Rise
  • South Korea Tests Long-Range Ballistic Missile, Yonhap Reports
  • ADB Keeps 2017 Growth Forecast for Developing Asia at 5.7%
  • Japan Stocks to Watch: Yamato, McDonald’s, Honda Motor, Toyota
  • China Bear Has Change of Heart on Bet for New Business Cycle
  • Yes, Axis Bank Shares Overshoot Analyst Targets; Hedging Cheap

European equities initially traded with a risk-off bias following the decline in US and Asian bourses after the FOMC minutes showed that members were concerned over the strength in stock markets as some participants viewed equity prices as “quite high”. While the minutes also showed that officials were split on whether higher inflation warranted faster hikes now or a more gradual pace. As such,  financial names have been hardest hit across Europe, while the weakness in crude futures has weighed on the energy sector. The flight to quality trade has been felt in credit markets, with bond yields trending lower this morning. However, the gains in Eurozone bond prices have been curbed by supply from Spain and France. In terms of how the supply was digested, both were received well by the market with French paper managing to survive any political concerns in the region as the usual buyers managed to step up to the plate as expected.

Top European News:

  • German Factory Orders Recover as Economic Momentum Strong
  • EU Steelmakers Win 5-Year Tariffs on Chinese Hot-Rolled Coil
  • These ’Anomalous’ Spreads Show the ECB Distorting Bond Markets
  • Vlieghe Says Faster U.K. Inflation Alone Won’t Nudge Him to Hike
  • Seadrill at Mercy of Day Traders as Biggest Funds Dump Stock
  • German Banks Call for ECB to Scale Back Bond Purchases This Year
  • Vivendi Said to Seek Two-Thirds of Telecom Italia Board Seats
  • Amundi Sees Stock Bulls Return to Europe as France Concerns Fade
  • PPG May ‘Slightly’ Increase Its Bid for Akzo Nobel, KBC Says

In currencies, the Bloomberg Dollar Spot Index added 0.1 percent at 10:45 a.m. in London following a 0.1 percent drop Wednesday. The euro erased earlier gains to trade little changed. The South African rand regained some ground after recent declines to trade 0.1 percent higher. USD/JPY has again tested down into the low 110.00’s, but we continue to run into buyers ahead the figure, and will likely do so as long as the key 10yr yield holds off 2.30%. This will rest on Wall Street to a notable degree, with European bourses modestly lower so far this morning. We have also seen EUR/JPY dip under 118.00 again, but the recovery looks temporary as does the pullback off the EUFt/USD lows this morning, where sub 1.0650 has been retested. We have the ECB  inutes later today, but president Draghi has already reassured the market that there further evidence/confidence required before altering the current monetary policy stance, but the EUR dip was short lived. This impact on EUR/GBP also, testing down to 0.8500 but holding off the figure and rebounding sharply to suggest some sizeable buy orders ahead. Cable is caught between 1.2400 and 1.2500 as a result, but the tight trade in GBP near term is perhaps also reflective of the lack of gauge in UK-EU negotiations to come.

In commodities, WTI crude erased an earlier drop to trade little changed at $51.17 a barrel; data on Wednesday showed U.S. output rose for a seventh week and inventories expanded to a fresh record. Gold fell 0.2 percent to $1,253.38 an ounce.  Commodity markets have much to contend with amid the political backdrop, heightened by the meeting between respective presidents Trump and Xi Jinping. Nevertheless, fresh hopes of Chinese demand continue to bolster base metals near term, with Copper edging higher but tentatively so as USD2.70 nears. On the day, Zinc is outperforming, but few specific drivers to point to with the overhang of the ‘above. Oil prices have managed to stabilise after the surprise DoE build reported yesterday, having dipped below USD51.00. A tentative recovery as yet. Precious metals continue to move with Treasuries, and in line with this, risk sentiment adds some support which ties in with the dip in US yields.

Looking at the day ahead, we will get the latest ECB minutes followed by US data which includes the latest weekly initial jobless claims report. The other important event today is the earlier mentioned meeting between President Trump and China President Xi Jinping.

US Event Calendar

  • 7:30am: Challenger Job Cuts YoY, prior -40.0%
  • 8:30am: Initial Jobless Claims, est. 250,000, prior 258,000
  • 8:30am: Continuing Claims, est. 2.03m, prior 2.05
  • 9:30am: Fed’s Williams Speaks on a Panel in Frankfurt
  • 9:45am: Bloomberg Consumer Comfort, prior 49.7

DB’s Jim Reid summaries the overnight wrap

Where did it all go wrong for US equities last night after a strong session before the last 2 hours? Well the FOMC minutes and comments from House Speaker Ryan seemed to turn a +0.76% gain to a closing -0.31% loss in the S&P 500. The sections of the minutes that concerned the market were “some participants viewed equity prices as quite high relative to standard valuation measures” and also that “prices of other risk assets, such as emerging market stocks, high yield corporate bonds, and commercial real estate, had also risen significantly in recent months”. The more talked about subject in the market leading into the minutes was what Fed officials were thinking about the balance sheet debate. The minutes revealed that “provided that the economy continued to perform about as expected, most participants anticipated that gradual increases in the federal funds rate would continue and judged that a change to the committee’s reinvestment policy would likely be appropriate later this year”. Meanwhile the discussion around fiscal policy suggested that stimulus expectations have been pushed out by some officials to 2018 which matches what the Fed’s Evans had said last week. Indeed the minutes showed that “participants continued to underscore the considerable uncertainty about the timing and nature of potential changes to fiscal policies as well as the size of the effects of such changes on economic activity”. The text then went on to say that “however, several participants now anticipated that meaningful fiscal stimulus would likely not begin until 2018” and that in light of this “about half of the participants did not incorporate explicit assumptions about fiscal policies in their projections”.

Meanwhile the Ryan comments emerged in a Reuters article in which he was quoted as saying that tax reforms will take longer to accomplish than the repeal and replacement of Obamacare. Ryan also said that “the House has a (tax reform) plan but the Senate doesn’t quite have one yet” and “so even the three entities aren’t on the same page yet”. Separate to this Ryan also confirmed that the House will not reach a deal on healthcare before the start of the two week break with a Congressman official also confirming that “we are going to go home tomorrow without a deal”.

Treasury yields had topped out at 2.382% for the 10y just prior to the minutes and Ryan comments yesterday before falling sharply into the close to end the day down 2.5bps at 2.336%. It was a similar story at the front end too with 2y yields ending the day down 1.8bps at 1.236%. The Dollar index finished more or less unchanged after paring a move higher of as much as +0.30% while Gold bounced all the way back after being down as much as -1.00%. The other big mover in the commodity complex was Oil where WTI Oil had at one stage traded as high as $51.88/bbl and over +1.50% higher intraday. However the latest EIA data revealed that crude stockpiles rose to another record high last week which sent Oil prices sharply lower with WTI back below $51/bbl this morning.

Today the focus turns to President Trump’s two-day meeting with China President Xi Jingping at Trump’s estate in Florida. There don’t appear to be any scheduled press conferences just yet but it’s worth keeping an eye on the headlines as the next two days progress. Clearly North Korea will be a subject near to the top of the agenda. Importantly though the meeting is the start of a new China-US bilateral relationship so the rhetoric which follows from the leaders will be closely scrutinised and debated one would imagine.

Ahead of that markets in Asia this morning appear to be largely following the lead from that weaker momentum into the Wall Street close last night. The Nikkei (-1.40%) has been the big mover this morning, not helped by a slightly stronger Yen (which has touched the highest since mid-November), while the Hang Seng (-0.50%), ASX (-0.62%) and Kospi (-0.53%) are also down. Bourses in China are however flat as we go to print. That is despite the Caixin PMI in China falling 0.4pts to 52.2 in March and the lowest level since September. US equity futures are also currently in the red.

Moving on. While the FOMC minutes and Ryan comments largely dominated the focus for markets yesterday there was also some important data to digest. Indeed helping to support the initial positive sentiment in markets was the March ADP employment report which revealed a significant 263k gain in private payrolls. That was well above the consensus forecast for 185k and although there was a 53k downward revision to the February reading the three month average has still risen to a healthy 259k which paints a positive picture ahead of payrolls tomorrow.

In contrast there was some disappointment in the ISM non-manufacturing print for last month which declined 2.4pts at the headline to 55.2 (vs. 57.0 expected) and the lowest since October while the final services PMI was also revised down 0.1pts to 52.8. In the details of the former the employment component tumbled 3.6pts to 51.6 which is actually the lowest reading since August while new orders dipped 2.3pts, albeit to a still solid 58.9.

Over in Europe the main focus was also on the final PMI revisions. The final services reading for the Euro area was revised down half a point to 56.0 which as a result saw the composite scaled back 0.3pts to 56.4. That softer services reading was largely as a result of a 1pt downward revision in France to 57.5 with Germany left unchanged at 55.6. In Italy the services PMI declined 1.5pts to 52.9 (vs. 54.3 expected) while in Spain the PMI came in at 57.4 and marginally down on February. All told our economists in Europe noted that notwithstanding the slight retreat in the reading the Euro area PMIs still suggest clear upside to their moderate growth forecasts in Q1. Indeed they note that the data points to growth of 0.6% to 0.7% qoq versus their 0.3% to 0.4% projection which reflects more mixed hard data of late. For completeness the services PMI in the UK yesterday was solid at 55.0 for March which represents an uplift of 1.7pts. That helped the FTSE 100 to close up +0.13% while the Stoxx 600 finished +0.02% after paring gains into the close.

Staying with Europe for a second, it’s worth noting the comments from ECB Governing Council member Weidmann yesterday. In an interview with Die Zeit, Weidmann said that it is getting closer to a time when the ECB should “not have the foot pressed down on the gas pedal, but to lift it slightly”. The article also suggested that Weidmann would welcome bond purchases stopping in one year and that the economic recovery in the Euro area is robust and will continue. So fairly hawkish, although not too dissimilar to the timing implied by the ECB. Interestingly there was no comment or mention about depo policy which has been more topical of late.

Looking at the day ahead, this morning in Europe it’s fairly quiet with factory orders data in Germany the only release of note. ECB President Draghi is also due to speak in Frankfurt at 8am BST when he makes opening remarks at the annual ‘ECB and its Watchers Conference’ so that might be worth keeping an eye on. The ECB’s Praet will also speak at the event as will the Fed’s Williams at 2.30pm BST. Away from that we will then get the latest ECB minutes just after midday followed by US data which includes the latest weekly initial jobless claims report. The other important event today is the earlier mentioned meeting between President Trump and China President Xi Jinping


i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 10.70 POINTS OR 0.33%/ /Hang Sang CLOSED DOWN 127.08 POINTS OR .52%  . The Nikkei closed DOWN 264.21 OR 1.40% /Australia’s all ordinaires  CLOSED DOWN 0.31%/Chinese yuan (ONSHORE) closed DOWN at 6.8988/Oil DOWN to 51.43 dollars per barrel for WTI and 54.71 for Brent. Stocks in Europe ALL MIXED   ..Offshore yuan trades  6.8896 yuan to the dollar vs 6.8988 for onshore yuan.THE SPREAD BETWEEN ONSHORE AND OFFSHORE  NARROWS AGAIN/ ONSHORE YUAN WEAKER  AND THE OFFSHORE YUAN MUCH  WEAKER AND THIS IS  COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS SATISFIED WITH WASHINGTON’S RESPONSE 





Here we go again:  Italy’s two problem banks Veneto and Popolare di Vicenza are asking for taxpayer help in the funding of 6.4 billion euro shortfall. They are doing everything they can to avoid a “bail in” which will hurt bondholders and shareholders.

(courtesy Reuters)

Italy’s Veneto banks confirm capital shortfall of 6.4 bln euros

By Silvia Aloisi/ MILAN, April 4 (Reuters) –

Struggling Italian regional lenders Banca Popolare di Vicenza and Veneto Banca confirmed on Tuesday the European Central Bank has estimated they have a combined capital shortfall of 6.4 billion euros ($6.8 billion) after stress tests by the regulator last year. In almost identical statements, the two banks said that the ECB had indicated they both qualified for a so-called precautionary recapitalisation by the state. The scheme, already used by Italy’s fourth biggest lender Monte dei Paschi di Siena <BMPS.MI>, takes advantage of an exception to EU banking liquidation rules that allows public money to be injected into ailing banks with a limited contribution from their creditors. The European Commission must now decide whether the two banks’ requests for public support breaches EU state aid rules, and approve their restructuring plans for the funds to be unlocked. On Monday, a spokesman for the Commission said it was confident that a solution could be found in the coming weeks. The capital shortfall was calculated taking into account the lenders’ score in the adverse scenario of the stress tests, whose results had not been previously made public. Two sources close to the matter had earlier put the capital gap for the two banks at 6.4 billion euros. One of the sources said the ECB considered the lenders solvent, a key condition for them to receive the state bailout they have requested. Popolare di Vicenza said in its statement it had failed the stress test adverse scenario, which looked at how banks could withstand a three-year theoretical economic shock, recording a Common Equity Tier 1 ratio at the end of 2018 of minus 3.19 percent against the 8 percent minimum requirement set by the ECB. That shortfall translated into a capital gap of 3.3 billion euros according to ECB calculations, the bank said. Veneto Banca said it had also failed the baseline scenario of the tests, but that shortfall had been plugged thanks to an injection of capital by Italian bank bailout fund Atlante. The state-sponsored fund – financed mostly by private banks and financial institutions – rescued both Popolare di Vicenza and Veneto Banca last year after they failed to raise funds on the market. It has invested nearly 3.5 billion euros to save them. Under the adverse scenario, Veneto Banca recorded a capital shortfall of 3.1 billion euros, as its CET 1 ratio came in at minus 2.56 percent versus the 8 percent threshold. The two banks said the capital shortfalls estimated by the ECB will be used to calculate the final amount of the precautionary recapitalisation. Italy, which has set aside 20 billion euros to rescue ailing lenders saddled with bad loans, is already expected to spend 6.6 billion euros to bail out Monte dei Paschi. ($1 = 0.9376 euros) (Editing by Hugh Lawson) ((silvia.aloisi@thomsonreuters.com; +39 02 6612 9723; Reuters Messaging: silvia.aloisi.thomsonreuters.com@reuters.net)) Keywords: EUROZONE BANKS/ITALY VENETOBANKS (UPDATE 1)
Another central bank, the Central Bank of the Czech Republic negates its cap against the Euro as the Koruna advances smartly. It seems that inflation is gripping this nation and surprisingly huge capital inflows into the country due to the perception that its economy is growing.  The country just could not stop the pressure at the upper end of its peg so it abandoned it today
(courtesy zero hedge)

Another Central Bank Throws In The Towel: Czech National Bank Ends Currency Cap, Floats Koruna

Four months ago we showed that according to 6 month EURCZK forwards – driven by a recent surge in Czech inflation – the market was convinced the Czech central bank would end its Koruna peg to the Euro some time before the summer.

As ING stated at the time, “It shows that the market is positioning against the CNB floor more intensively, as accelerating inflation is increasing the odds of the approaching exit. The Dutch bank said it expected the currency regime to be scrapped around April or May, with annual inflation forecast to climb from 1.5 per cent to 1.9 per cent in December – close to the central bank’s 2 per cent target.

“If the intensity of interventions saw during the first days in January continues in the first quarter of 2017, total interventions in the quarter might easily overcome the whole 2016-levels”, he added.

* * *

Moments ago all those traders who bet heavily on an end to the currency peg were rewarded when the Czech National Bank announced that just like the SNB over two years earlier, it ended its regime limiting koruna appreciation, in the process setting in motion one of this year’s biggest currency trades which according to Bloomberg has attracted as much as $65 billion in estimated capital. The announcement caught some by surprise as it came during a non-rate setting meeting, diverging from the original view of it being done at a scheduled monetary policy meeting in May

In anticipation of the peg’s end, investors betting on koruna gains had poured into Czech assets, boosting foreign capital inflows in multiples of the levels normally seen in the country’s balance of payments. But, as Bloomberg adds, at least some of the speculative capital fled the koruna after the central bank stopped providing guidance at the end of March on the likely timing of the exit. The koruna has since shown volatility not seen in years.

The central bank’s board voted to exit the Swiss-inspired intervention regime at a meeting in Prague on Thursday, removing a policy that kept the koruna weaker than 27 per euro for more than three years. The decision, announced in a statement on the bank’s website, came a week after its pledge to keep the one-sided peg in place expired in March. It triggered moves sending the koruna both above and below the level of the cap.

“The CNB stands ready to use its instruments to mitigate potential excessive exchange rate fluctuations if needed,” the bank said in the statement. The monetary authority will hold a news conference at 2:15 p.m. in Prague.

The seven-member monetary-policy panel abandoned the limit in response to rising inflation and ahead of the ECB scaling down its own unconventional stimulus. As Bloomberg notes, the Czech decision highlights a diverging approach to resurgent inflation in central Europe’s economies, with Hungary continuing easing without touching its benchmark rate and Poland forecasting stable borrowing costs in the coming quarters. The Czechs originally imposed the cap in 2013 to avert deflation.

According to the latest official data, the central bank bought €47.8 billion ($51.3 billion) in the four years through January to prevent the koruna from gaining beyond the limit. Adjusted for natural inflows seen in the balance of payments, the overall speculative position was about 50 billion euros to 60 billion euros as of March. ING Groep NV puts the intervention volume at about 36 billion euros so far this year.

Ironically, central bankers had cautioned that the accumulated speculative position is so large that investors hoping for a quick payoff from koruna appreciation may struggle to find counterparties for their positions in the currency after the exchange-rate limit is removed. The koruna swung between 26.81 per euro and 27.17 per euro, trading at 26.90 as of 12:36 p.m. in Prague.

Indeed, as shown in the chart below, the initial response to the peg removal has been relatively modest.

Not so much other Czech assets, however, as Czech bonds slumped, with shorter maturities leading declines:

  • 2-year yield +20bps to minus 0.18%, highest in 8 months
  • 10-year yield +8bps to 0.91%

Elsewhere in central Europe, in reaction to the Czech central bank announcement, the Polish zloty gained 0.1% to 4.2282 per euro and Hungarian forint appreciates 0.2% to 309.72/Eur.

Governor Jiri Rusnok said after the March 30 policy meeting that the bank will be ready to mitigate excessive koruna swings after the exit. But he also said earlier in March that policy makers won’t be “overly sensitive” to initial swings, which could be in either direction, and will let the market find a new equilibrium.

After the initial calm, we expect the EURCZK to drift steadily lower as market forces normalize.

In the aftermath of the announcement, Nomura said it sees the Czech central bank intervening only if EUR/CZK gets well below 25, or on the upside if going over 27.5. He added that the central bank is looking for a monetary tightening and wants a currency rally, and “if not, they will have to start hiking rates later in the year.”



Syria denies the use of chemical weapons

(courtesy zerohedge)

Syria Denies, Condemns Use Of Chemical Weapons

With global sentiment turning against Syria again, and even president Trump yesterday saying his opinion on Syrian policy has changed (it was not immediately clear just how), on Thursday Syria’s foreign minister dismissed allegations that the Syrian Army deployed chemical weapons in the city of Idlib, saying the military will never use such weapons against its own people or even terrorists.

As reported by AP, Syria’s Foreign Minister Walid Muallem denied claims that the military used chemical weapons in the western city of Idlib. Speaking at a news conference on Thursday, Muallem said an airstrike by Syrian military had targeted an arms depot where chemical weapons stockpiles were stored by Islamic State and Al-Nusra Front militants. He said it’s impossible that the army – which has been making significant gains in almost all theaters of the Syrian war – would use banned chemical weapons against its “own people” and even terrorists.

Asked if Damascus would allow a fact-finding mission into the Idlib incident, Muallem said past experience of similar investigations was “not encouraging.” He also said that he could not predict “the reality of US intentions” in Syria. Muallem added that such a mission must not be politicized and must start its operations “from Damascus, not Turkey,” apparently referring to the latest statements by Ankara condemning the incident, as well as the fact that some victims were taken to Turkey for autopsy.

Meanwhile, the Kremlin on Thursday called the attack in Syria’s Idlib province earlier this week a “monstrous crime,” but said Washington’s conclusions about the incident were not based on objective data.

“This was a dangerous and monstrous crime, but it would be incorrect to hang labels (to identify those who did it),” Kremlin spokesman Dmitry Peskov told reporters on a conference call. The use of chemical weapons was “unacceptable,” he said, urging the Syrian army to ensure such arms did not fall into the hands of terrorists.

Peskov said evidence about the incident provided by the White Helmets civil defense group could not be considered reliable and added: “We do not agree with these conclusions.”

“Immediately after the tragedy no one had access to this region … any data which the U.S. side or our colleagues from other countries might have had access to could not have been based on objective facts,” Peskov told reporters. The disagreement was unlikely to change the nature of ties between Russia and the United States, Peskov added.

Russia’s Foreign Ministry said earlier on Thursday it was too early to accuse the Syrian government of being responsible for the attack in Idlib and said a proper investigation was needed, the RIA news agency reported.

“Immediately after the tragedy no one had access to this area, so no one could have hard verifiable data. Consequently, any information which the US side or our colleagues from other countries might have had access to, could not be based on objective facts,” Peskov told reporters.

Though Peskov rejected “hasty assessments” of the alleged use of chemical weapons, he emphasized that there are always disagreements between Moscow and Washington, but mutual discords over the Idlib incident are unlikely to affect “the spirit of our cooperation.”

* * *

Also on Thursday, the WSJ reported that autopsy results of three victims of the gas attack in Syria show evidence their deaths were linked to chemical weapons, according to Turkey’s justice minister. Specialists from the World Heath Organization and the United Nations joined Turkish forensics teams in an examination of three Syrians who died after being brought to Turkey for treatment following the attack on the village of Khan Sheikhoun in Idlib province this week.

After the attack, Turkey joined an immediate international emergency response. Dozens of injured Syrians were brought by ambulance to Turkish medical facilities close to the Syrian border. The autopsies took place in the city of Adana. It was not immediately clear why Turkey – which has had a clear conflict of interest in the Syria conflict and has repeatedly stated its desire to remove the Assad administration – had been tasked with this fact-ficning mission.

Biological samples from the victims were taken during autopsies that started late Wednesday and continued until Thursday morning, according to the Turkish state Anadolu news agency. Justice Minister Bekir Bozdag didn’t immediately provide further details on the results or what chemical substance was allegedly used.

Bozdag told Anadolu that the teams are continuing to examine the samples, but his view is the evidence shows forces loyal to Syrian President Bashar al-Assad were behind the attack.

“The autopsies’ results establish that chemical weapons were used. The forensic report presents this in a very clear way,” Anadolu quoted Mr. Bozdag as saying, adding that “Assad’s use of chemical weapons is established through this scientific examination.”


The Syrian army has denied using any chemical or toxic substances in air strikes launched Tuesday, according to state media, and blamed “terrorist groups and those behind them.” The Syrian government routinely refers to most opponents of the regime as terrorists.

In any case, the results from Turkish autopsies on the victims of a suspected poison gas attack in northwest Syria will be sent to the Dutch capital of The Hague for an additional examination, Turkish Health Minister Recep Akdag said on Thursday. The suspected chemical attack believed to have been carried out by Syrian government forces killed at least 70 people in the rebel-held Idlib province on Tuesday. Thirty-two victims have been brought to Turkey and three have subsequently died during treatment.

That said, while the presence of sarin gas will almost surely be confirmed, the question remains how the west will prove whose sarin gas it was, although since like in 2013 the “chemical attack” appears to have been a goalseeked event intended to result in a goalseeked outcome, namely to get the US involved in the Syria conflict once again with the intent of removing Assad, we have little doubt that the narrative of Assad – who had little to gain and everything to lose from the alleged gas release – being behind the attack will hardly be challenged in the legacy press


It seems that the “deep state” is controlling Trump and his team:  Tillerson warns Russia that there are steps underway to remove Assad:

(courtesy zero hedge)

Tillerson Warns Russia “Coalition Steps Are Underway To Remove Assad”

VIX was being crushed and stocks were leaking higher just as planned, until Secretary of State Rex Tillerson hit the tape beating war drums and announcing a new US policy on Syria, just a week after he said the US had no interest in removing the Syrian president.

Specifically, Tillerson said that steps are underway to remove Syrian President Bashar al-Assad, and that the U.S. is considering an “appropriate response” to the Syrian government’s alleged use of chemical weapons.

“The process by which Assad would leave is something that requires an international community effort both to first defeat ISIS within Syria, to stabilize the Syrian country to avoid further civil war and then to work collectively with our partners around the world through a political process that would lead to Assad leaving,” Tillerson said at the news conference in Palm Beach, Fla.

Tillerson on Assad: “Clearly with the acts that he has taken it would seem there would be no role for him to govern the Syrian people.”

Tillerson also called into question Assad’s future in Syria, saying there would be “no role” for authoritarian ruler in Syria, and said that there is no doubt the Assad regime was reponsible for the Syria attack.

As a result, Tillerson said that “Assad’s role in the future is uncertain clearly, and with the acts that he has taken it would seem that there would be no role for him to govern the Syrian people” 

Acknowledging that a conflict with Syria would involve Russia, Tillerson said that “it’s very important that the Russian government consider carefully their continued support of the Assad regime.”

All of which was a quick U-turn from last Thursday’s comments when Tillerson said that “I think the longer term status of President Assad will be decided by the Syrian people,” a statement which as we reported infuriated John McCain.

The reaction in the market was quick:

… sending The Dow briefly red for the day.

While he has yet to frame his new policy on Syria, President Trump also had some “insight into next steps regarding Assad.

“He’s there, and I guess he’s running things, so I guess something should happen.”

And just like that, the conflict between the US and Russia over the future of Syria – and of course that Qatar gas pipeline to Europe which started it all – is back on.




Oh my goodness!! What he is thinking!!!!: A saturation strike in Syria which will result in Russian military deaths!!  Gold down a dollar on this news!

(courtesy zero hedge)

Trump Weighs “Saturation Strike” In Syria, Resulting In Russian Military Deaths

The Pentagon has briefed President Trump on various military options the US can conduct in response to the poison gas attack in Syria that killed scores of civilians, and which Washington has blamed on the Syrian government, a U.S. official told Reuters.

Options include things like implementing a “no fly zone” or grounding aircraft used by Syrian President Bashar al-Assad’s forces, an official quoted by Reuters said.

Another option also includes the use of Tomahawk cruise missiles to overwhelm Russian air defense systems used by the Syrian military. The official did not comment on how likely military action might be which, if any, options might be recommended by the Pentagon. According to the Intercept, this would be a “saturation strike” using dozens of cruise missiles designed to hit Syrian military targets —including military air fields — in an effort to limit future Syrian Air Force attacks on rebel positions, according to the two U.S. military officials.

Among the valid military targets in Syria would be Syrian military airfields, air defenses and other types of Syrian military installations. The official played down the idea that Russian military infrastructure might be a target.

What is most troubling, however, is that according to the quoted U.S. military officials, “the current proposal would likely result in Russian military deaths and mark a drastic escalation of U.S. force in Syria.”

One U.S. military official said the decision to allow the strikes, which would kill Russians, signals a significant change in policy by the Trump administration. A decision by Trump to go forward with the plan would be a reversal from the Obama administration, which denied multiple air strike proposals  that would likely cause Russian personnel casualties in Syria.

It remains unclear if Trump does launch a military campaign that ends up killing Russians, whether the narrative about Russia hacking the US elections to get Trump elected, will finally die.

* * *

The official also said that Secretary of Defense James Mattis and National Security Adviser H.R. McMaster have been discussing the matter: Mattis is due to meet with Trump later in the day at the president’s Mar-a-Lago retreat, where a summit meeting with Chinese President Xi Jinping is underway. Speaking with reporters aboard Air Force One, Trump said that “something should happen” with Assad after the chemical attack, calling what happened in Syria “a disgrace to humanity.”

There is no doubt in our minds, and the information we have supports, that the Syrian regime under the leadership of Bashar al-Assad are responsible for this attack,” Secretary of State Rex Tillerson told reporters in Florida on Thursday, adding that “there is no role for Assad” in Syria after this.

In case of an accelerated military escalation, the US Navy currently has two warships on alert in the East Medditerranean to strike in Syria if necessary, officials say cited by Fox News’ Lucas Tomlinson, who adds that USS Ross and USS Porter are the 2 Navy warships in close proximity and ready to strike Syria, if necessary.

USS Ross and USS Porter are the 2 Navy warships in Med to strike Syria, if necessary. Both moved to Rota, Spain two years ago

Trump’s accusations against Assad put him directly at odds with Moscow, the Syrian president’s principal backer. Trump’s contemplated action also goes directly against Trump’s tweets in 2013, when he urged against a military escalation in Syria.

The President must get Congressional approval before attacking Syria-big mistake if he does not!

Earlier in the day, CNN reported that Trump has spoken to some members of Congress about military action in Syria. The president himself denied that report, however, according to Fox News correspondent Chad Pergram.

Reuters notes that any U.S. action against Syria’s government would open a new front in Syria’s fighting, with consequences that are difficult to foresee. Entering into such a confrontation might complicate the fight against Islamic State – a group seen to directly threaten the West – and very likely draw in Russia, which nearly entered into an armed conflict in 2013 when John Kerry backed off an airborne campaign targeting Assad in the last moment.  The difference between now and 2013, however, is that Russia is already present in Syria, and is conducting regular military missions.

While Syrian chemical weapons storage facilities would also be valid military targets, it was not immediately clear how much intelligence the United States had collected on where Assad might be storing the kinds of nerve agent it believes was used in the most recent attack, assuming of course, that Assad did in fact conduct the poison gas attack.

The U.S. military, which has deployed around 1,000 troops in Syria, who are there without the invitation or consent of Syria’s government, has long said its singular focus in Syria has been on the war against Islamic State, although many have said that the real motive from the beginning of US involvement in the conflict was the eliminate the Assad regime. In any case, the conflict is reaching a critical point as U.S.-backed forces isolate the city of Raqqa – the militants’ de facto capital – ahead of an eventual assault.

Earlier on Thursday, Senator Rand Paul (R-Kentucky) announced he would oppose any military action without a vote in Congress.

“The President, if he decides to do something in Syria, he would come to Congress and ask for a declaration of war. Short of Congress voting on it, I’m opposed to illegal and unconstitutional wars,” Paul told Fox News radio show ‘Kilmeade and Friends’.

Paul was promptly opposed by senators John McCain (R-Arizona) and Lindsey Graham (R-South Carolina), both of whom called for Trump to attack Syria.

“The United States should lead an international coalition to ground Assad’s air force,” they said in a joint statement Thursday. “This capability provides Assad a strategic advantage in his brutal slaughter of innocent civilians, both through the use of chemical weapons as well as barrel bombs, which kill far more men, women and children on a daily basis.”

Earlier on Friday, Damascus denied using chemical weapons, saying that its jets targeted an arms depot where chemical weapons stockpiles were stored by Islamic State and Al-Nusra Front militants. Later in the day, the Russian Ministry of Defense confirmed that account of events.

The strike, which was launched midday Tuesday, targeted a major rebel ammunition depot east of the town of Khan Sheikhoun, Russian Defense Ministry spokesman Major-General Igor Konashenkov said in a statement. According to Konashenkov, the warehouse was used to both produce and store shells containing toxic gas. The shells were delivered to Iraq and repeatedly used there, said the spokesman, pointing out that both Iraq and international organizations have confirmed the use of such weapons by militants.

Finally, the biggest wildcard of all is what and how will Putin respond to an aggression by the US that directly threatens an ally – and national interest – of not only the Kremlin, but also China.


A terrific look at what is going on inside Toronto’s house price bubble:

(courtesy Wolf Richter/WolfStreet)

Toronto House Price Bubble Goes Nuts

Submitted by Wolf Richter of Wolf Street

Based on fundamentals? You gotta be kidding.

Residential property sales in Greater Toronto soared 17.7% year-over-year to 12,077 homes, according to the Toronto Real Estate Board (TREB). New listings jumped 15.2% to 17,052. Prices for all types of homes, based on the MLS Home Price Index Composite “Benchmark,” soared 28.6%. The “average” selling price soared 33.2%!

That average selling price of C$916,567 is up from C$688,011 a year ago. Over the past five years, it has doubled!

The heavenly manna was spread across the spectrum. For condos, the average price in Greater Toronto soared 33.1% to C$518,879; for townhouses it soared 32.9% to C$705,078; for semi-detached houses, 34.4% to C$858,202; and for detached houses, 33.4% to C$1,214,422.

Even the house price bubble in Beijing cannot compete with this sort of miracle; new house prices there increased only 22% year-over-year in February. And Sydney’s fabulous house price bubble just flat out pales compared to the spectacle transpiring in Toronto, with prices up only 19% in March.

Vancouver has its own housing bubble to deal with. But there, the government of British Columbia has tried to tamp down on wild speculation with various measures, including a transfer tax aimed squarely at foreign non-resident investors, with “mixed” success.

Now the great fear in Toronto’s real estate circles is that the government of Ontario might impose similarly cruel and unusual punishment on the participants in this spectacle. Some measures are on the table, with folks wondering how to stop the bubble from inflating further and causing even greater harm to the real economy when it deflates, as all bubbles eventually do.

They’re reluctant. It seems they want to see how BC’s measures are washing out in Vancouver. The central government too is trying to fine-tune some macroprudential measures, but they’ve had absolutely no effect on Toronto’s housing bubble. And the Bank of Canada, which has been fretting about the housing bubble for a while – always couched in its very careful terms – refuses to raise rates. Everyone is talking. No one dares to do anything real about Toronto’s house price bubble.

In Toronto, according the real estate folks, it’s all based on fundamentals. It’s based on supply and demand and very rational calculated thinking, and there is no bubble in sight, lenders are just fine, and if Canadians are locked out of the housing market, so be it, it’s just a shortage of housing, really. So TREB President Larry Cerqua is glad the efforts to tamp down on it all have not come to fruition, in part due to TREB’s vigorous lobbying:

“It has been encouraging to see that policymakers have not implemented any knee-jerk policies regarding the GTA housing market,” he said in a statement.

“Different levels of government are holding consultations with market stakeholders and TREB has participated and will continue to participate in these discussions,” he said. “Policy makers must remember that it is the interplay between the demand for and supply of listings that influences price growth.”

Singing a similar tune, Jason Mercer, TREB’s Director of Market Analysis, explained the basic supply and demand problem:

“Annual rates of price growth continued to accelerate in March as growth in sales outstripped growth in listings,” he said. “A substantial period of months in which listings growth is greater than sales growth will be required to bring the GTA housing market back into balance.”

And he told policy makers to tread carefully: “As policy makers seek to achieve this balance, it is important that an evidence-based approach is followed,” he said. This is a gravy train, and it must be allowed to speed on until the last cent has been extracted.

It doesn’t take a genius to figure out that this will end in tears. What we don’t know yet is when it will end in tears, and whose tears it will end with. But we already know: When it does end in tears, real estate organizations will first be denying it, and then they’ll be clamoring for a bailout of their stakeholders – so it will end in the tears of others.

Even the big Canadian banks are fretting. “Let’s drop the pretense. The Toronto housing market and the many cities surrounding it are in a housing bubble,” Bank of Montreal Chief Economist Doug Porter warned clients. But the bubble’s deflation would push the city into a fiscal and financial sinkhole

(courtesy Wolf Richter/WolfStreet)


Iraq will not cut production at all, instead it plans a 600,000 barrel per day output


(courtesy Slav/OilPrice.com)

OPEC’s No.2 Goes Rogue: Plans 600,000 Bpd Oil Output Increase

Authored by Irina Slav via OilPrice.com,

Iraq has plans to boost its crude oil production by 600,000 bpd to 5 million bpd by the end of this year, regardless of its participation in OPEC’s production cut deal. Iraq is the cartel’s second-biggest exporter of crude and has been the most disinclined of all parties to the agreement since its inception, with a lot of observers expecting it to be the first one to cheat.

Iraq’s first problem is that as much as 95 percent of its budget revenues come from crude oil. There are no viable alternatives in sight for revenues at the moment. The second problem that the country has to contend with is its war with Islamic State, which makes these revenues more important than ever.

Amid the final push against IS in Mosul, Iraq is working hard to ensure the sustainable growth of its oil and gas industry—OPEC deal or no OPEC deal. Three months ago, Oil Minister Jabar al-Luaibi said that Baghdad is planning to build five new refineries on an investment basis, in addition to fixing and expanding existing refineries that were damaged in the war with IS.

While Al-Luaibi has repeatedly assured media – and indirectly, investors – that Iraq will stick to its OPEC commitment, Iraq is doing whatever it can to boost its returns from its only significant natural resource.

As part of these efforts, the government recently started a review of the contracts it has with foreign oil companies operating local fields in a bid to better match its interests to those of the operators. Currently, international oil companies in Iraq are working under the so-called technical service contracts, which a few years ago, forced them to reduce production from some of the country’s biggest fields because Baghdad had no money to pay them for operating the fields.

Baghdad is also cooperating with Tehran to make the most of the oil finds that the two neighbors share. Bilateral relations have been uneven historically but now that both Iraq and Iran are scrambling with their respective problems, a partnership has emerged as the mutually beneficial way to proceed. It is also strengthening its ties with other neighbors and farther countries such as Egypt, European Union members, and the U.S.

A 600,000-bpd production increase would be substantial, but Al-Luaibi did not disclose the source of this increase. Huge fields such as West Qurna, Rumaila, and Majnoon are nowhere near depletion, so Iraq could significantly boost production in these fields.

Then there is one more candidate for additional production: the Kirkuk field in the Kurdistan Autonomous Region. Kirkuk currently produces less than half a million barrels of crude daily, even though its can pump as much as 1 million bpd. The problem – yet another big one for Baghdad – is that the Kurdistan Regional Government is as eager as Baghdad to take full control of the field.

Tensions between the central government and the KRG have been simmering for a while now, and of course, it’s all about the oil, as both sides throw accusations at each other of overstepping its boundaries.

For now, Iraq’s plans to increase production seem to be vague, unless Al-Luaibi and the rest of the government just don’t want to go public with more specific plans. Given the price environment, however, and the growing likelihood that the production cut will be extended, Iraq’s output-boosting efforts have the potential of a major headwind for prices in the second half of the year.



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



GBP/USA 1.2460 DOWN .0026 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED


Early THIS THURSDAY morning in Europe, the Euro FELL by 1 basis points, trading now BELOW the important 1.08 level  FALLING to 1.0671; 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  UP 10.70 POINTS OR 0.33%    / Hang Sang  CLOSED DOWN 127.08 POINTS OR 52%/AUSTRALIA  CLOSED DOWN 0.31%  / EUROPEAN BOURSES MIXED: MOSTLY RED 

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

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

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

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

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

The NIKKEI: this THURSDAY morning CLOSED DOWN 264.21 POINTS OR 1.40%

Trading from Europe and Asia:


Gold very early morning trading: $1251.90


Early THURSDAY morning USA 10 year bond yield: 2.355% !!! UP 3 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  3.011, UP 6  IN BASIS POINTS  from WEDNESDAY night.

USA dollar index early THURSDAY morning: 100.55 UP 3  CENT(S) from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING


And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 3.904%  DOWN 2  in basis point yield from WEDNESDAY 

JAPANESE BOND YIELD: +.06%  DOWN 3/5  in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.6320%  UP 1 IN basis point yield from WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.271 DOWN 0 POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 64 points HIGHER than Spain.





Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/12:00 PM 

Euro/USA 1.0652 DOWN .0020 (Euro DOWN 20 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.03 UP: 0.637(Yen DOWN 64 basis points/ 

Great Britain/USA 1.2486 DOWN 0.0007( POUND DOWN 7 basis points)

USA/Canada 1.3407 DOWN 0.0028(Canadian dollar UP 28 basis points AS OIL ROSE TO $51.59


This afternoon, the Euro was DOWN by 20 basis points to trade at 1.0652


The POUND FELL BY 17  basis points, trading at 1.2486/

The Canadian dollar ROSE by 28 basis points to 1.3407,  WITH WTI OIL RISING TO :  $51.59

The USA/Yuan closed at 6.8954/
the 10 yr Japanese bond yield closed at +.06% DOWN 3/5 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 1/2  IN basis points from WEDNESDAY at 2.364% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.015 UP 1  in basis points on the day /

Your closing USA dollar index, 100.68 UP 16  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED UP 9.86 OR 0.13% 
German Dax :CLOSED DOWN 64.80  POINTS OR 0.53%
Paris Cac  CLOSED DOWN 9.28 OR 0.18%
Spain IBEX CLOSED UP 41.50 POINTS OR 0.40%
Italian MIB: CLOSED DOWN  3.73 POINTS OR 0.02%

The Dow closed UP 14.80 OR 0.07%

NASDAQ WAS closed UP 14.47 POINTS OR 0.20%  4.00 PM EST
WTI Oil price;  51.59 at 12:00 pm; 

Brent Oil: 54.79  12:00 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: $54.90


USA 30 YR BOND YIELD: 2.984%


USA/JAPANESE YEN:110.77   UP .384

USA DOLLAR INDEX: 100.71  up 19  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2465 : DOWN .0021  OR 21 BASIS POINTS.

Canadian dollar: 1.3413  DOWN .0023 (CAN DOLLAR UP 23 BASIS PTS)

German 10 yr bond yield at 5 pm: +.263%


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


Traders Fail To Buy The F**king War Dip


Seemed appropriate…


After yesterday’s visit to reality in the Fed minutes, it was left to VIX once again to be crushed to save stocks from a down day… and it worked until Rex Tillerson SPOILED the party with the ultimate distraction from Trump’s failed efforts so far…


This morning’s ramp erased yesterday’s losses but Tillerson pushed us red again


On the week, The Dow is clinging to unchanged, Small Caps still worst…


We can’t help but feel The Dow needs to test down to its 50DMA once again before it can really take off…


And High Yield Bonds remain glued to the 50DMA…


Banks just can’t hold a bid…


Twitter had another bad day…


Treasury yields whipsawed around on data and war headlines, ending close to unch


But the yield curve continues to flatten and butterfly around the 10Y point (2s10s at lowest since election, 10s30s at highest since Dec rate hike)…

30Y continues to hover around the 3.00% and 10Y hovers at crucial support

The dollar rose for the third day in four and was higher versus most of its G-10 peers as traders hunkered down ahead of Thursday’s meeting between President Donald Trump and China’s president Xi Jinping and the U.S. March employment report Friday morning.

Trading flows and price swings were modest as some participants stayed on the sidelines ahead of the Trump-Xi meeting, which has the potential to highlight policy differences on trade, currency and North Korea. The dollar has built modest gains for the day, reflecting upside risk in the jobs report after the ADP employment report showed stronger-than-expected hiring in the private sector in March.

The FX markets did not react as much as equity and bond markets to the Tillerson comments. AUD weakness offset JPY strength overall on the week..



Despite USD gains, WTI and RBOB also rose on the day – erasing much of the inventory drop…


Gold was very modestly bid on warmongery talk…


And finally… War must pay?


Strange data this morning:  jobless claims crash by the most in 2 years

(courtesy zero hedge)

Initial Jobless Claims Suddenly Crash By Most In 2 Years



Having slowly drifted to the highest levels since before Christmas, initial jobless claims collapsed last week by 25,000 to 234k – near 44 year lows. This is the biggest weekly drop since April 2015…


A sudden panic hiring spree?



Challenger, Gray and Christmas report for March is out and the USA job cuts jump 17% in March

(courtesy Challenger,Gray)

US job cuts jump 17 percent in March, but the total is lower than last year: Challenger report

U.S. employers announced plans in March to cut 43,310 jobs, a 17 percent increase from February, outplacement consultancy Challenger, Gray & Christmas reported Thursday.

Despite the monthly the rise, the number was 2 percent lower than the total in March 2016. So far this year, employers have announced 126,201 job cuts, 30 percent lower during the first three months of 2016.

Retail had the most job losses in the first quarter, with 38,464 announced cuts, including 4,084 in March. Despite the cuts, the sector has announced over 121,000 new jobs this year, the report said.

“Retail is typically an industry in flux, but we’ve seen long established companies close stores and cut workers. The industry, though, is creating openings just as quickly as they are cutting,” Challenger CEO John A. Challenger said in the report.

Telecommunications companies followed retailers with 7,768 job cuts in March, versus 1,264 in March 2016.

Next was energy, with 1,950 job cuts in March, compared with 3,747 last year. Through the first quarter, the sector has announced 7,880 job cuts, 84 percent lower than the 48,901 cuts announced in the period in 2016.

The Challenger numbers came a day after ADP and Moody’s Analytics said companies added 263,000 jobs in March, well above the 185,000 expected from economists surveyed by Reuters.

On Friday, the Labor Department releases its closely watched monthly employment report.



Knoxville Tennessee will no doubt be ground zero for Obamacare as now their only provider will provide provide services in 2018

(courtesy zero hedge)

Knoxville, TN Could Be Ground Zero For The Obamacare Explosion

For the 40,000 people living in and around Knoxville, TN, Humana was the only insurance company providing healthcare coverage for the 2017 plan year.  That said, even with their monopoly in the market, Humana still couldn’t figure out a way to make money on the Obamacare exchanges in the 16 Tennessee counties where it was the sole insurer.  As such, the company has decided to cancel its coverage in 2018 potentially leaving Knoxville’s 40,000 residents with no healthcare options at all.

Per the map below from the Milwaukee Journal Sentinel, while most of Tennessee is covered by Blue Cross and Cigna, the 16 counties surrounding Knoxville in the eastern portion of the state will have to find a new insurer to fill in for Humana by July 1st or residents there simply won’t have access to healthcare for the 2018 plan year.



And while Blue Cross and Cigna could theoretically expand their coverage map in Tennessee to pick up Humana’s former markets, Insuance Commissioner Julie McPeak said she’s “not optimistic” that would happen absent “some changes to the regulatory system, either by Congress or the administration.”  Which, of course, sets up Knoxville as ‘ground zero’ for the ‘Obamacare explosion’ predicted by Trump.  

Tennessee Insurance Commissioner Julie McPeak said she has had many “challenging conversations” with the state’s two remaining insurers — BlueCross BlueShield of Tennessee and Cigna — about covering the Knoxville market next year. The carriers, however, want more flexibility to limit their exposure to sick, costly enrollees, she said. For instance, they are concerned that Obamacare eliminated their ability to cap their lifetime payouts to their policyholders.


“I’m not optimistic that one of our existing insurers would like to expand their coverage area without some changes to the regulatory system, either by Congress or the administration,” said McPeak, who has criticized Obamacare.


Insurers have until July 1 to file their 2018 plans in Tennessee, but they’ll likely make their decision in the next month or two. Cigna said its participation depends on market conditions and regulatory approval of its policies. BlueCross BlueShield said it is still reviewing its options.


“The current uncertainty makes it difficult to assess what our product offerings for 2018 might be,” said Roy Vaughn, a senior vice president at the insurer, which has lost more than $400 million on the exchange over the past three years. “All options are on the table for 2018.”

Meanwhile, as we pointed out last summer, Humana was apparently still unable to make money in TN despite a 59% increase in premiums for the 2017 plan year… so one can only imagine how much higher rates will have to go in 2018 (data source:  Charles Gaba).


In the end, as we’ve noted before, the Obamacare exchanges around the country are stuck in a negative feedback loop where healthy people are refusing to sign up, which leads to losses for insurers, which leads to higher rates, which, of course, leads to even fewer healthy people signing up. 

In conclusion, it appears that Trump was right yet again:

ObamaCare will explode and we will all get together and piece together a great healthcare plan for THE PEOPLE. Do not worry!

The Democrats will make a deal with me on healthcare as soon as ObamaCare folds – not long. Do not worry, we are in very good shape!

(courtesy zerohedge)


Report shows that the spy agencies routinely unmasked lawmakers and the reports would give a detailed look at what the lawmakers were doing on a daily basis

(courtesy zero hedge)

Report Shows Spy Agencies “Routinely” Unmasked Lawmakers’ “Everyday Lives”

The U.S. government’s foreign surveillance incidentally collects information on lawmakers and their staffs as often as once a month, according to a new report.

In what seems like the first attempt to shift the narrative of Susan Rice’s alleged wrongdoings, the report positions the ‘unmaskings’ as “routine” almost as if the fact that ‘everyone’s doing it’ somehow negates the fact that the law was allegedly broken.. (as The Hill reports)

Congress frequently receives alerts that its members and their aides have been unmasked and their identities shared with intelligence and law enforcement forces, Circa said Thursday.


Circa said such alerts, named “The Gates Notification” after former CIA Director Robert Gates, go to the Gang of Eight leadership team in Congress. The Gang of Eight includes the Speaker and House minority leader, the Senate Democratic and Republican leaders, and the bipartisan heads of both chambers’ intelligence committees.


Circa added the lawmakers often don’t learn about such unmasking unless it involves a hacking or security threat.


Intelligence community sources speaking on the condition of anonymity confirmed to Circa that lawmakers’  names may appear in executive branch intelligence reports.

However, the plot thickens further, as Fox news reports that the intelligence reports at the center of the Susan Rice unmasking controversy were detailed, and almost resembled a private investigator’s file, according to a Republican congressman familiar with the documents.

“This is information about their everyday lives,” Rep. Peter King of New York, a member of the House Intelligence committee said. “Sort of like in a divorce case where lawyers are hired, investigators are hired just to find out what the other person is doing from morning until night and then you try to piece it together later on.”


On the House Intelligence Committee, only the Republican chairman, Devin Nunes of California, and the ranking Democrat Adam Schiff, also of California, have personally reviewed the intelligence reports. Some members were given broad outlines.


Nunes has consistently stated that the files caused him deep concern because the unmasking went beyond the former national security adviser Mike Flynn, and the information was not related to Moscow.

The most recent government data shows that unmasking or identifying Americans happens in a number of cases. The Office for the Director of National Intelligence, which oversees the 17 intelligence agencies, said “…in 2015, NSA disseminated 4,290 FAA Section 702 intelligence reports that included U.S. person information. Of those 4,290 reports, the U.S. person information was masked in 3,168 reports and unmasked in 1,122 reports.”

The report said “NSA is allowed to unmask the identity for the specific requesting recipient only under certain conditions and where specific additional controls are in place” and those conditions were met for “654 U.S. person identities” in 2015.

That means Americans were identified in 26 percent of the cases, or roughly one in four intelligence reports.

Still we are sure CNN will keep plugging away with its “nothing to see here, move along” narrative… until the last lonely viewer has switched off.




David Stockman discusses in reality what is going on behind the scenes in the uSA: that there is not a chance that tax reform/stimulus/ will occur and the truth behind the Syrian tragedy.

a must read..

(courtesy zero hedge)

Have the Neocons Gotten to Trump?


The Donald’s emerging incapacity for even a semblance of normal governance might as well be called a Gong Show, and one that only get crazier by the day.

Take the most recent so-called gas attack in Syria and the Trump Administration’s seeming 180 pivot within just seven days.

This reversal is typical of the Donald and at the heart of why he will never govern effectively.

Just last weekend, for example, he began arguing publicly that it was his idea to pull the Obamacare repeal and replace bill. Actually, it was his inner circle, lead by Steve Bannon, who marched up to Capitol Hill on Thursday night and decreed that all negotiations and tweaking were over and that there should be an up or down vote on Friday afternoon, ready or not.

As far as I can tell, the Donald relented only at the last minute Friday afternoon when Speaker Ryan got down on one knee in the Oval Office to beg Trump’s agreement to pull a bill that was going down by 40-50 votes or more.

What I’m saying is that whirling dervish cannot lead or make anything happen amidst the checks and balances ridden contraption that the founders created. And the interest groups have wrapped their money-spewing tentacles all around both ends of Pennsylvania Avenue.

So the Syrian spectacle is just par for the course.

Last week Trump’s Secretary of State properly announced that “regime change” in Syria is over and that the Assad government can stay.

After all, in the scale of things the threat of the murderous Sunni jihadists — whether ISIS, Nusra Front or a dozen more like minded butchers — is infinitely more serious than the harsh, despotic regime of Bashar Assad.

Whether he goes or stays is none of America’s business, of course, but he did attain power through constitutionally valid means and does maintain a secular state that includes numerous minorities including Christians in addition to his own Alawite (Shiite) tribe.

Even Trump’s hawkish, foreign policy-illiterate ambassador to the U.N. was seemingly on board. Said former South Carolina governor and ex-bookkeeper for her mother’s mail order business, Nikki Haley:

You pick and choose your battles and when we’re looking at this, it’s about changing up priorities and our priority is no longer to sit there and focus on getting Assad out…

Do we think he’s a hindrance? Yes. Are we going to sit there and focus on getting him out? No…

We can’t necessarily focus on Assad the way that the previous administration did… Our priority is to really look at how do we get things done, who do we need to work with to really make a difference for the people in Syria.

So do you think the increasingly imperiled jihadist rebels in Syria might have one more go at the old “false flag” routine to change the tide of events?

That is, like the one they pulled off back in August 2013 and blamed on Assad, when the independent evidence, including an in-depth investigation by the intrepid Seymour Hersh, points overwhelmingly to jihadi terrorists funded by Saudi Prince Bandar.

Then again, in light of its freshly announced hands-off policy you might have thought the Trump Administration would take a few days to investigate in order to get the facts straight and assess culpability?

Well, no.

At least not if you are one of the neocon NeverTrump moles who have proliferated in the Donald’s administration. I refer, of course, Nikki Haley, who turned on a dime, exhibiting no compunction whatsoever about reading straight from the playbook that Obama’s hatchet lady, Samantha Powers, left behind when she vacated her U.N. office:

“There is an obvious truth here that must be spoken,” Haley continued. “The truth is that Assad, Russia and Iran have no interest in peace.”

“The illegitimate Syrian government, led by a man with no conscious, has committed untold atrocities against his people for more than six years.”

C’mon. This is getting so old that it stinks to high heaven. When Putin says jump, Assad asks how high?

So after winning worldwide plaudits in 2013 for persuading Assad to give up all his chemical weapons, and after ceremoniously assuring the world that they had been removed from Syria and destroyed, do ya think Putin would permit Assad to drop chemical weapons on a small village in the far northeast of Syria with no strategic importance on the day before the Syrian peace conference was to resume in Brussels?

Let’s just put the obvious answer this way:

The complete suspension of disbelief in Imperial Washington and among its servile press corps has reached a frightening extreme.

It’s enough to pop a blood vessel right here on the keyboard, so I’ll let journalist Michael Krieger have the honors:

This chemical attack just happened, how does he (Trump) know the Assad regime did this? Is it because the same deep state people who have been trying to sabotage him since day one told him so? Is he that stupid? Does it even make sense considering things were going pretty well for Assad in the conflict before this attack? No, it doesn’t, and many people are starting to ask these questions…

One of those questions is why the attack was denounced on anti-government social media nearly 24 hours before it happened, as was documented in a post on my Contra Corner blog yesterday.

Moreover, the alternative explanation that the horrific civilian deaths were an accidental result of the Syrian Air Force hitting an ammo and weapons assembly depot — which seems clear from the photographic evidence — at least merits an investigation.

That’s especially pertinent given the Russian claim that the destroyed depot contained chemical shells of the very kind being used against U.S. and Iraqi troops in Mosul.

But apropos the CNBC knuckleheads who expect a massive stimulus injection from Washington, you really have to wonder about what kind of drugs they smoking down there in the canyons of Wall Street.

What kind of blind faith could actually expect the utterly incoherent and floundering Trump Administration — one that can’t or won’t smell this kind of giant skunk in the woodpile stood up by the Deep State and its media allies — could possibly make the American economy great again.

The same bumbling incompetence and confused worldview on display in the Syrian Pivot also suffuses the Administration’s entire domestic economic program.

In a word, it’s in an irreversible shambles, starting with the Goldman Sachs contingent of Gary Cohn and Steven Mnuchin, who are the purported leaders of the vaunted Trump Stimulus. These gentlemen are clueless about policy, Washington processes and GOP politics — because neither have ever been Republicans or evidence the slightest interest in public policy or political philosophy.

Nay, they are just windfall beneficiaries of the Bubble Finance era who desire to “give back” an amorphous something that is utterly irrelevant to the crisis at hand. If the Great Disrupter needs help in his slated mission, these two could not be more suited to the task.

Indeed, if their former colleagues skulking the canyons of Wall Street had any sense, they would short the both of them until the cows come home.


David Stockman
for The Daily Reckoning


(courtesy zero hedge)

Border Wall Bids Emerge; Include Everything From Tourist Attractions To Nuclear Waste Storage

Yesterday was the deadline for companies to submit bids for Trump’s “physically imposing” yet “aesthetically pleasing” border wall between the U.S. and Mexico.  And while the U.S. government has said they won’t disclose bids, rather just the names of companies actually awarded contracts on June 1st, some of the companies decided to disclose their plans themselves.  Below are a couple of our faves…

Gleason Partners of Las Vegas, for example, revealed its proposal to line the border wall with solar panels so that it could, among other things, sell electricity to Mexico to help pay for the wall.  Per the AP:

The panels would provide electricity for lighting, sensors and patrol stations along the wall. Sales of electricity to utilities could cover the cost of construction in 20 years or less, according to the company. Power could also be sold to Mexico.


“I like the wall to be able to pay for itself,” said managing partner Thomas Gleason.

Border Wall


Another company, Crisis Resolution Security Services, wants to turn the border wall into a massive tourist attraction with beautiful panoramic views of the desert landscapes.

Crisis Resolution Security Services Inc. of Clarence, Illinois, proposes a wall that is 56 feet (17 meters) high and 22 feet (7 meters) wide at the top — with plenty of room to allow tourists to enjoy desert views.


The height — nearly twice what the government envisions — would deter climbers, and its width would give the structure longevity, said chief executive officer Michael Hari.

Clayton Industries had the slightly different idea of storing nuclear waste under the wall.

Clayton Industries Inc. of Pittsburgh proposes storing nuclear waste along the wall in trenches that are at least 100 feet (30 meters) deep.


Money already collected by the U.S. Department of Energy from people who benefit from nuclear power would help pay for the wall.


The bid includes an option for hardware to convert the nuclear waste to energy.

Meanwhile, a San Diego company decided to focus on the “aesthetically pleasing” component of the RFP

Concrete Contractors Interstate of San Diego proposed a polished concrete wall augmented with stones and artifacts specific to areas on the 2,000-mile (3,218-kilometer) border.


Russ Baumgartner, CEO of the company, says the wall should be “a piece of art.”


Customs and Border Protection’s solicitation says the wall should be “aesthetically pleasing” from the U.S. side. Baumgartner wants to decorate both sides.

Border Wall


…while DarkPulse Technologies chose to focus on the “physically imposing” part.

DarkPulse Technologies of Scottsdale, Arizona, proposes a concrete wall that can withstand tampering or attacks of any kind.


“You could fire a tank round at it and it will take the impact,” said company founder Dennis O’Leary.


Fiber sensors would be embedded in the concrete to immediately alert officials to any attempts to climb over or tunnel under the wall. It would be coated with a slick coating that would prevent climbing.

Border Wall


Finally, one snowflake organization, Otra Nation, proposed no border wall at all but rather the “world’s first shared co-nation.”

Otra Nation, a group of U.S. and Mexican citizens, proposed the world’s first shared co-nation along the border “open to citizens of both countries and co-maintained by Mexico and the United States of America.”


It would also create “nodes of cultural production” such as libraries, museums, galleries and workshops between San Diego and Tijuana, Mexico, and other spots with cities on both sides of the border.


It would prohibit oil drilling and mining and create a “hyperloop transportation system” for people and cargo.

We’re almost certain Trump will choose the Otra Nation option and just be done with this whole border wall thing.



This is a surprise:  Gary Cohn backs the reinstating of Glass Steagal and the breaking up of big banks

(courtesy zero hedge)

Gary Cohn Backs Reinstating Glass-Steagal, Breaking Up Big Banks

In an unexpected statement made by the former COO of Goldman Sachs and current director of Trump’s National Economic Council, Gary Cohn told a private meeting with lawmakers on the Senate Banking Committee on Wednesday evening that he could support legislation breaking up the largest U.S. banks – a development that could provide support to congressional efforts to reinstate the Depression-era Glass-Steagall law – and impact if not so much his former employer, Goldman Sachs, whose depository business is relatively modest, then certainly the balance sheets of some of Goldman’s biggest competitors including JPM and BofA.

According to Bloomberg, Cohn said he generally favors banking going back to how it was “when firms like Goldman focused on trading and underwriting securities, and companies such as Citigroup Inc. primarily issued loans.”

What Cohn may not have mentioned is that with rates as low as they are, issuing loans – i.e., profiting from the Net Interest Margin spread – remains far less profitable than trading and underwriting securities in a world in which virtually every “developed world” central banker is either directly spawned from Goldman, or is advised by an ex-Goldman employee,

The remarks surprised some senators and congressional aides who attended the Wednesday meeting, as they didn’t expect a former top Wall Street executive to speak favorably of proposals that would force banks to dramatically rethink how they do business.


Yet Cohn’s comments echo what Trump and Republican lawmakers have previously said about wanting to bring back the Glass-Steagall Act, the Depression-era law that kept bricks-and-mortar lending separate from investment banking for more than six decades.

As Bloomberg further notes, Wednesday’s Capitol Hill meeting with Cohn was arranged by Senate Banking Committee Chairman Mike Crapo, and included lawmakers from both political parties and their staffs. The discussion covered a wide range of topics, including financial regulations and overhauling the tax code, the people said.

The WSJ adds that Cohn was asked by Sen. Elizabeth Warren (D., Mass.) whether the administration planned to carry out a promise included in the Republican 2016 platform—and made by the Trump campaign—to restore the law separating traditional commercial banking from Wall Street investment banking. The law was repealed in 1999. Cohn expressed an openness to working with Warren on the issue, and said he could support a simple policy completely separating the two businesses, these people said.

There are various ideas for restoring some form of Glass-Steagall, running the gamut from splitting apart firms completely to separating their various operations under an umbrella holding company.


While Cohn’s comments are consistent with other statements by Trump administration officials, it isn’t clear how much support there is for the idea among Republicans more broadly. Warren has in the past introduced a bill she called the 21st Century Glass-Steagall Act. In the last Congress, it received one Republican co-sponsor. Additionally, while Treasury Secretary Steven Mnuchin has also said the administration is open to implementing some version of President Donald Trump’s campaign promise. But in his Jan. 17 confirmation hearing, he expressed concern that “separating out banks and investment banks right now under Glass-Steagall would have very big implications to the liquidity in the capital markets and banks being able to perform necessary lending.”

While the Trump team has endorsed the Glass-Steagall idea, it hasn’t come forward with its own proposal. Meanwhile, Treasury officials are meeting with financial-industry officials to discuss ways to roll back rules adopted under the Obama administration. They are due to make recommendations to the White House in early June.

Some observers said they didn’t view Mr. Cohn’s comments as a threat. “We continue to believe that a return of some form of Glass-Steagall remains more of a headline risk rather than a real policy risk and we think the odds are against the reinstatement of the law,” Brian Gardner, an analyst with Keefe, Bruyette & Woods, said in a note to clients Thursday.


“I don’t think we’re concerned,” said one banker at a large firm. The bank is “pleased with the direction” of Mr. Trump’s administration and its executives aren’t racing to change strategy or make a big new lobbying push. “It’s the same day as it was yesterday,” this person said. “It’s not a time to go crazy.”


Tim Pawlenty, president of the Financial Services Roundtable trade group, said Thursday: “Large financial institutions play a role in the American economy other institutions are not able to fill. We are working with Congress and the administration on a common-sense approach to financial regulation modernization and look forward to more progress.”

Still, while Cohn’s statement may be simply posturing, some see Cohn’s support as notable: “he was the most likely obstacle within the Trump White House” to restoring Glass-Steagall, said Jaret Seiberg, an analyst with Cowen & Co., in a note to clients. “With him supporting Glass-Steagall’s restoration, there is no one in the inner circle left to fight it.”

Mr. Seiberg said banks may be underestimating the threat: “At some point the market is going to have to accept that the Trump administration is serious about restoring the Glass-Steagall separation between commercial and investment banking.”

As a reminder, Glass-Steagall was adopted in the 1930s as a way to keep securities businesses separate from taxpayer-insured banks. The separation between lending and investment banking slowly eroded in the latter part of the 20th century, as banks won regulatory exceptions to diversify their businesses. Since Congress repealed the law in 1999 under Bill Clinton, some liberals have pushed for reinstating it, “calling such a move a simple way to make the economy more stable by removing a taxpayer backstop from risky activities. Proponents of bringing back the law also say it would diminish the size and political influence of large Wall Street banks.”

The 2010 Dodd-Frank regulatory-overhaul law took a half-step toward Glass-Steagall when it mandated the Volcker rule, which bars banks from certain activities unless they are trading on behalf of their customers. Many banks have since closed so-called proprietary trading desks.

Ultimately, even with Cohn allegedly behind the push repeal, the Glass-Steagall idea hasn’t gained broad support yet, even among Democrats. As the WSJ concludes, former Federal Reserve Gov. Daniel Tarullo, the Fed regulatory guru who stepped down Wednesday, was asked about Glass-Steagall earlier this week. He pointed out that in 2008, Bear Stearns and Lehman Brothers—two investment banks without traditional lending businesses—caused significant financial stress.

“Just by separating things doesn’t mean people stay out of trouble,” he said, adding that there would be costs to forcing banks to separate and lose the potential business advantages of combining their operations. “If you are going to have those costs and still have financial stability problems…then maybe we are not getting much after all.”

Unfortunately he may be right: the current financial environment is one in which the concern is not so much separating securities businesses from taxpayer-insured operations, as separating the $14 trillion in global liquidity sloshing around courtesy of central banks, from the rest of “organic” liquidity. It is that particular separation that will be a far bigger headache in the coming years than even reinstating Glass-Steagal.


Republicans trigger the  Nuclear option which crushes the Democratic blockade of Gorsuch:

(courtesy zero hedge)

Senate Republicans Trigger Nuclear Option, “Crushing Democratic Blockade” Of Gorsuch

In a historic vote, Senate Republicans on Thursday crushed “a Democratic blockade” – in Reuters’ words – of Trump’s Supreme Court nominee Neil Gorsuch, in a fierce partisan brawl, approving a rule change dubbed the “nuclear option” to allow for conservative judge Neil Gorsuch’s confirmation by Friday.

The Senate voted 52-48 along party lines to repeal a rule allowing filibusters against Supreme Court nominees,invoking the so-called nuclear option, and clearing the way for Gorsuch confirmation who now needs a simple majority for nomination. Shortly thereafter, the Sante voted 55-45 to end debate on Gorsuch’s nomination, setting up a final vote expected Friday. Thanks to the new rule enacted earlier Thursday, a simple majority was needed.

“This will be the first and last partisan filibuster of the Supreme Court,” Republican Senate Majority Leader Mitch McConnell said on the Senate floor, accusing Democrats of trying to inflict political damage on Trump and to keep more conservatives from joining the high court.

“In 20 or 30 or 40 years, we will sadly point to today as a turning point in the history of the Senate and the Supreme Court, a day when we irrevocably moved further away from the principles our founders intended for these institutions: principles of bipartisanship, moderation and consensus,” Senate Democratic leader Chuck Schumer said on the Senate floor.

McConnell initiated the rules change by raising a point of order asserting that simple-majority votes should advance Supreme Court nominees to final confirmation votes. Democrats tried to delay it by offering motions to postpone a vote and to adjourn the chamber, but both fell short as Republicans stayed unified.

Earlier Thursday, McConnell said the rules change would restore the Senate’s tradition of considering a Supreme Court nominee based on credentials instead of ideology. He called the Democratic filibuster of Goruch “a radical move” and something “completely unprecedented in the history of our Senate.”  “This threatened filibuster cannot be allowed to succeed or to continue for the sake of the Senate, for the sake of the court and for the sake our country,” he said.

Earlier in the day, Democrats successfully blocked Gorsuch’s nomination from getting 60 votes earlier Thursday morning, prompting Republicans to go “nuclear” and change the rules to allow Gorsuch and future Supreme Court nominees to clear the Senate with only a simple majority.  Democrats tried to delay the rules change vote by offering motions to postpone a vote and to adjourn the chamber, but both fell short as Republicans stayed unified.

Democrat senators Joe Manchin (W.Va.), Heidi Heitkamp (N.D.) and Joe Donnelly (Ind.) voted with Republicans to allow President Trumps’s pick to move forward. 

Republicans defended the party-line vote on the nuclear option, saying Democrats were to blame for blocking Gorsuch, who they believe is eminently qualified to sit on the Supreme Court.  Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) argued that Democrats should “come to their senses.”

“The truth of the matter is that throughout this process, the minority led by their leader has been desperately searching for a justification for their preplanned filibuster,” he said ahead of Thursday’s votes.

McConnell added that the current stalemate was part of a decades-long Democratic effort to “politicize the courts and the confirmation process.”  “The opposition to this particular nominee is more about the man that nominated him and the party he represents than the nominee himself,” he said.

Republicans hinted for weeks that President Trump’s nominee would be confirmed one way or another. McConnell confirmed during a leadership press conference that he had the votes to go “nuclear” if needed.

According to The Hill, Republicans appeared resigned to the tactics, arguing if Democrats won’t support Gorsuch — who received the American Bar Association’s highest rating — they won’t allow any GOP nominee to join the Supreme Court.

* * *

The Republican-backed rule change on Thursday maintains the ability to filibuster legislation. In the past, the nuclear option has been averted when moderates in the two parties compromised to avoid a showdown, but the ferocious partisanship in Washington now made that impossible.

Experts said eliminating the filibuster for Supreme Court appointments could make it more likely that presidents, with little incentive to choose centrist justices who could attract support from the other party, will pick ideologically extreme nominees in the future.

Ending the filibuster also would make it easier for future Supreme Court nominees to be confirmed when the president and Senate leadership belong to the same party.

With the failure of Republican healthcare legislation in Congress and with federal courts blocking the president’s ban on people from several Muslim-majority nations from entering the United States, securing Gorsuch’s confirmation took on even greater importance for Trump, who took office in January.

* * *

Senate confirmation of Gorsuch, 49, would restore the nine-seat court’s 5-4 conservative majority, enable Trump to leave an indelible mark on America’s highest judicial body and fulfill a top campaign promise by the Republican president. Gorsuch could be expected to serve for decades.

The court’s ideological leaning could help determine the outcome of cases involving the death penalty, abortion, gun control, environmental regulations, transgender rights, voting rights, immigration, religious liberty, presidential powers and more.

The nine-seat Supreme Court has had a vacancy since conservative Justice Antonin Scalia died in February 2016.

* * *

Update 2:  Republican’s start roll call to implement ‘nuclear option’:


Update 1:  As expected, Democrats have just voted to temporarily block Judge Neil Gorsuch’s Supreme Court nomination, setting up a “nuclear option” vote for later in the day.  Around 11:30AM EST, Senators voted 55-45 on ending debate over President Trump’s pick leaving Republicans 5 votes shy of the 60 vote threshold required.

As we noted earlier, Republicans are planning a vote later today to remove the 60-vote threshold for cloture on Supreme Court nominees, lowering it to a simple majority.

And with that vote, the official Democrat policy objectives for the next two years have been publicly recorded:


* * *

Back in 2013, before Republicans seized control of the Senate during the 2014 mid-term elections, Democrats became the first party to pursue the “nuclear option” in order to appoint Obama judges over the objection of Republicans.  Both Obama and then Senate Majority Leader Harry Reid praised the use of the “nuclear option” at the time:

Obama:  “The gears of government have to work. And the step that a majority of senators took today, I think, will help make those gears work just a little bit better.”


Harry Reid:  “It’s time to change. It’s time to change the Senate before this institution becomes obsolete.”

And while Democrats celebrated, Mitch McConnell took to the Senate floor to warn his colleagues on the other side of the aisle that they just might come to regret their decision “sooner than you think.”

“If you want to play games, set another precedent that you’ll no doubt come to regret.  To my friends on the other side of the aisle, you’ll regret this and you may regret it a lot sooner than you think.”


Today, it’s looking increasingly likely that “sooner” has come.  As NBC reports, barring some unexpected, last-minute deal, Senate Majority Leader Mitch McConnell will almost certainly trigger the so-called ‘nuclear option’ later today to confirm Neil Gorsuch to the Supreme Court.

Senators spent all day yesterday debating the matter, but the outcome — a permanent change in rules that will affect both the Senate and the nation’s highest court — has been as good as settled since at least week when Democrats confirmed they had the votes required to block Gorsuch’s nomination.

Here’s how it will work:

The Senate is slated to hold a procedural vote, called a cloture around mid-day Thursday. Sixty votes are needed to end debate and move forward to a final vote that requires a simple majority of 51 to confirm Gorsuch.


But Democrats have enough votes to prevent, or filibuster that first step. When the cloture vote fails, McConnell is likely to begin the process of changing the rules to eliminate filibusters on Supreme Court nominations, with a vote on that expected later Thursday afternoon. Then the final up-or-down vote to confirm Gorsuch is expected to take place on Friday.

Meanwhile, the rule change will come after Senate Democrat Jeff Merkley wasted 15.5 hours ‘filibustering’ on the Senate floor overnight.  Ironically, as even Chuck Todd notes in the video below, Merkley fully supported the Democrats’ use of the ‘nuclear option’ in 2013. 



As The Hill notes, a group of Republicans and Democrats led by Senators Susan Collins (R-Maine) and Christopher Coons (D-Del.) negotiated intensely over the weekend in hopes of avoiding a blowup over the rules, but they fell short.

“The negotiations with which I was heavily involved have failed to come up with a compromise, which saddens me. There’s so little trust between the two parties that it was very difficult to put together an agreement that would avert changing the rules,” Collins told reporters.


“I worked very hard over the weekend, as did several Democrats and several Republicans, but we were not able to reach an agreement,” Collins added, estimating that about 10 lawmakers were involved.


The group held calls as early as 6:30 a.m. and as late as midnight in hopes of avoiding a rule change adopted along party lines.


Coons said the talks fell apart because of pressure from Senate leaders, who weren’t interested in a deal, and from the conservative and liberal bases of the party, who view the Supreme Court’s composition as a top priority.


“The fact that both leaders were opposing negotiations also, frankly, made it difficult,” Coons said. “Both caucus leadership and outside groups were a source of steady and aggressive pressure against some consensus negotiation, in both parties.”

Of course, while Republicans will undoubtedly declare victory tomorrow upon Gorsuch’s nomination, it’s only a matter of time before the tables are turned once again and their decision comes back to haunt them.


Last Monday, Payless Shoes filed for bankruptcy protection:  According to Fitch here are eight others that will file next:

(courtesy zero hedge)

These Eight Retailers Will File For Bankruptcy Next, According To Fitch

The situation is rapidly deteriorating for America’s “bricks and mortar” retailers. As discussed earlier this week, some 9 retail outlets have already filed for bankruptcy protection in 1Q 2017 alone according to Alix Partners.  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.


Confirming that even more retail defaults are imminent was the following chart from Morgan Stanley according to which in just the first quarter there were nearly 2,100 store closures, nearly double the number from Q1 of last year.


Appropriately, one day after our Monday report, Payless ShoeSource filed for bankruptcy. Payless filed Chapter 11 on April 4 to facilitate a balance sheet debt restructuring and operational overhaul. The company became highly leveraged in a 2012 buyout and debt became unsustainable as sales and cash flows decreased. The company plans to have liquidation sales for 400 out of 4,400 underperforming stores that are earmarked for permanent closure and intends to try to re-negotiate leases or close other stores and to emerge as a smaller concern. Some more details: a $385 million DIP facility, which consists of a $305 million asset-backed loan (ABL) and an $80 million term loan, has been negotiated with existing lenders to refinance certain prepetition debt and provide $120 million of incremental liquidity during the bankruptcy.

Rating agency Fitch also noticed, saying that with this latest default, the TTM loan default rate rose to 1%. The rate fell to 0% in March and was 0.5% at the end of February.

It’s about to get worse, however, because in its report on the latest retail default, Fitch said it expects the rate to climb to 9%, equating to roughly $6 billion in defaults, over the next 12 months, fueled by continued challenges in the retail sector.

Fitch’s expectation of increasing retail defaults stems from increased discounter (including off-price and fast-fashion apparel) and online penetration, and shifts in consumer spending toward services and experiences. All of these factors have created a highly competitive retail environment and accelerated mall traffic declines. Retailers have also suffered from the ebb and flow of brand popularity. Negative comparable store sales and fixed-cost deleverage have led to negative cash flow, tight liquidity and unsustainable capital structures.

Going back to Payless, the company was listed on Fitch’s Loans of Concern list, which is a compilation of issuers with a significant risk of default within the next 12 months. And, just to make the tracking of future defaults easier, Fitch also provided the list of eight other retailers with term loan debt totaling nearly $6 billion, which are also its concern list, and are most likely to be in default in the not too distant future. They are as follows:

  • Sears Holdings Corp (roughly $2.5 billion);
  • 99 Cents Only Stores LLC;
  • Charming Charlie LLC;
  • Gymboree Corp.;
  • Nine West Holdings Inc.;
  • NYDJ Apparel LLC;
  • rue21, Inc.; and
  • True Religion Apparel Inc.

Meanwhile, Jeff Bezos is this close to being the world’s richest man.



Well that about does it for tonight

I will see you tomorrow night


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