April 10/A huge 1.77 tonnes of gold added to the GLD and A monstrous 11.231 million oz of “silver” withdrawn from the SLV/Bank of England caught in Libor scandal as authorizing it/Bank of England lied to British Parliament (perjury)/Silver;s open interest rises a touch despite the whacking in price on Friday/China deploys 150,000 troops on North Korean border/USA carrier heading toward North Korea/ Russia and Iran warn that any new aggression will be met with force: all of the above good reason for gold/silver to be whacked again/

Gold: $1251.30  DOWN $3.20

Silver: $17.89  DOWN 24  cents

Closing access prices:

Gold $1254.70

silver: $17.94!!!










Premium of Shanghai 2nd fix/NY:$10.80


LONDON FIRST GOLD FIX:  5:30 am est  1253.60




For comex gold:



 TOTAL NOTICES SO FAR: 608 FOR 60800 OZ    (1.8258 TONNES)

For silver:

For silver: APRIL


Total number of notices filed so far this month: 641 for 3,205,000 oz




The open interest in silver continues to advance with today’s reading just under 222,000 contracts or about 2,000 contracts below the record set last year. The price of silver is a good $2.55 below the price when the record OI was set. Today we saw a big drop in the price of silver.  Late tonight, I will retrieve the preliminary OI figures and if the OI remains high, then the managed money (hedge funds) remained firm again and would have refused to liquidate their silver contracts with today’s orchestrated raid.

I will let you know tomorrow…



Let us have a look at the data for today



In silver, the total open interest ROSE BY 5  contracts up to 221,867 DESPITE THE PRICE FALL ( 10 CENTS) WITH RESPECT TO FRIDAY’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.  1.110 BILLION TO BE EXACT or 159% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold also ROSE BY 6,005 contracts WITH THE RISE IN THE PRICE OF GOLD ($4.00 with FRIDAY’S TRADING). The total gold OI stands at 434,800 contracts.

we had 21 notice(s) filed upon for 2100 oz of gold.


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


We had a huge  change in tonnes of gold at the GLD: a deposit of 1.77 tonnes

Inventory rests tonight: 836.49 tonnes



We had a huge change  in inventory at the SLV/a massive withdrawal of 11.231 million oz of silver from the SLV

THE SLV Inventory rests at: 317.070 million oz



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

1. Today, we had the open interest in silver ROSE BY 5 contracts UP TO  221,867 DESPITE THE SHELLACKING THAT SILVER TOOK ON FRIDAY TO THE TUNE OF 10 CENTS. We no doubt had some attempted short covering but the longs keep piling on making it difficult for them to cover. In contrast, the gold open interest ROSE CONSIDERABLY BY 6,005 contracts UP to 434,800 WITH THE RISE IN THE PRICE OF GOLD TO THE TUNE OF $4.00  (FRIDAY’S TRADING).

(report Harvey


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg



i)Late  SUNDAY night/MONDAY morning: Shanghai closed DOWN 17.22 POINTS OR 0.52%/ /Hang Sang CLOSED DOWN 5.12 POINTS OR .02%  . The Nikkei closed UP 133.25 OR 0.71% /Australia’s all ordinaires  CLOSED UP 0.78%/Chinese yuan (ONSHORE) closed DOWN at 6.9072/Oil UP to 52.63 dollars per barrel for WTI and 55.73 for Brent. Stocks in Europe ALL IN THE RED   ..Offshore yuan trades  6.9072 yuan to the dollar vs 6.9034 for onshore yuan.FOR THE FIRST TIME IN OTHER TWO MONTHS THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN WEAKER  AND THE OFFSHORE YUAN MUCH  WEAKER AND THIS IS  COUPLED WITH THE  STRONGER DOLLAR. CHINA IS SENDING HER DISPLEASURE TO THE USA


i)North Korea

Now Trump is needing USA carrier to North Korea. With his “success” in Syria, Trump is now willing to take on Kim Jon-un

( zero hedge)

ii)After initially falling gold rebounds on news that China is deploying 150,000 troops to North Korea’s border;

( zero hedge)

iii)North Korea responds by stating that Trump is loud mouthed and that he engaged in reckless Syrian bombings.  This he claims justifies North Korea’s nuclear program( zero hedge)




Kyle Bass in a rare twitter appearance blasts Chinese capital lockdown as foreign companies cannot remove any of their money back to home base

( zero hedge/KyleBass)

ii)China offers concessions to the USA to avoid a trade war but those concessions are basically worthless.  China will allow USA firms to enter the financial scene as well as allow grains to be sold to the Chinese.  With the Chinese financial system is chaos who in their right frame of mind would want to send their money to China especially when the Chinese citizens themselves want to exit their currency as fast as their feet will carry them

( zero hedge)



They should throw Barclay’s CEO in jail as he is trying to unmask a whistleblower at the bank:

( zero hedge)

ii)A secret recording has been unearthed which implicates the Bank of England in Libor rigging. You can bet the farm that they are also rigging precious metals

( zero hedge)

iib)And on the same subject as above:


French stocks and bonds tumble as the Communist Melenchon surges making it a 4 way contest.  It would be unbelievable if we got a LePen vs Melenchon final race:

( zero hedge)





Coptic Christians target in two bombings as 37 were killed.  ISIS again claims responsibility

( zero hedge)


Russia and Iran warn that if the USA undergoes a new aggression in Syria then they will respond in kind.

For those of you who did not understand why everybody is engaging in Syria it is the new proposed pipeline that is the central theme.  Russia who controls much of the oil and gas distribution through Europe want to build a pipeline from the south of Iran through Iraq then through Syria, Lebanon and then out through the Mediterranean to Europe.

The proposed USA route is to start at Doha (Qatar), through Saudi Arabia Syria, then to Turkey and onto Europe. The uSA wants to kill Russia’s business of supplying oil/gas to Europe.

( zero hedge)

iii)A possible false flag?…Assad said to have used white phosphorus bombs (napalm) on the town of Idlib

( zero hedge)

iv)Trump is seriously weighing options for more sanctions against Russia even though there is no evidence whatsoever that Russia had anything to do with the chemical attack.  Actually there is no evidence at all that chemical weapons were stored at  the airport in Idlib Province

( zero hedge)

v)Putin will not meet Tillerson in Moscow..only Lavrov as there is total confusion over uSA policy towards Syria

( zero hedge)

vi)A Russian has been arrested in Barcelona at the request of the FBI for a possible link to the alleged USA election

Give me a break!!

( zero hedge)

vii)The new red line in the sand:  barrel bombs.

( zero hedge)




Sweden is out of control with respect to their migrants:

( zero hedge)




i)Chris Powell comments to a email sent to him on his speech in Hong Kong

( Chris Powell/GATA)

ii)This is interesting, the Dubai exchange may launch another gold contract for retail investors.  it will be 1 kg in size and settlement must be physical.  It seems that everybody is taking on the comex.

( Reuters)

iii)Ed Steer comments that intervention in the gold/silver markets are prevalent on Friday.

( Ed Steer/GATA)

iv)I agree with Lawrie that China has suspended their reporting of their gold reserves

(Lawrie Williams/Sharp’s Pixley)

v)India showed a drop of about 7 billion dollars worth of gold imports from the April-Feb fiscal year. That was to be expected as Modi engineered that awful removal of higher denomination notes which made it difficult for Indians to purchase gold.  Now everything is in order in India and February saw a good rise in imports of 3.5 billion vs last yr 1.4 billion, in February 2016.

( Times of India/Mumbai)

vi)(Hong Kong wishes to help Myanmar (Burma) set up a gold exchange at this nation tries to modernize
( zero hedge)


10. USA stories

i)An extremely important paper by Pater Tenebrarum.  You will recall that immediately after the release of the FOMC report, gold shot up despite the hawkish tones. On Friday, NY President Dudley was forced out of hibernation to say that the markets got it wrong.  Tenebraum states that the markets did not get it wrong.  They were reacting to the possibility that the Fed will not purchase bonds when bonds come due.  This is the same as a reverse QE and the resulting removal of excess liquidity. Actually when the USA raised interest rates, this is somewhat removing liquidity and for the past two years, gold has been the beneficiary.

a must read.

(courtesy Pater Tenebrarum/ Acting Man.com)

ii)Odds of a shutdown are increasing

( zero hedge)

iib)Michael Snyder weighs in on the above Government shutdown crisis.  He believes that there cannot be a deal as he concurs with David Stockman

( Michael Snyder/EconomicCollapseBlog)

iii)US Ambassador to the UN Nikki Haley, changes her tune to a “regime change in Syria” as a “top priority” for President Trump.  This no doubt will lead to a conflict with Russia

( zero hedge)

iv)Wolf Richter comments on the huge rise in personal and commercial bankruptcies in the USA in the month of March

( WolfRichter/WolfStreet)

v)As promised the tax plan is now history and they are going back to the drawing board

(courtesy zero hedge)



Let us head over to the comex:

The total gold comex open interest ROSE BY 6,006 CONTRACTS UP to an OI level of 434,800 WITH THE  RISE IN THE PRICE OF GOLD ( $4.00 with FRIDAY’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 146 contract(s) FALLING TO 1,812. We had 25 notices served yesterday so we lost another 121 contracts or 12,100 oz will not stand for delivery in the active delivery month of April and these were cash settled via the PRIVATE EFP route highlighted by James Turk and myself on April 4/2017. OUR HEDGE FUNDS MUST BE RECEIVING HUGE CASH BONUSES SUCH THAT THEY ROLL TO A FUTURE MONTH AND NOT TAKE DELIVERY OF PHYSICAL METAL 

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 168 contract(s) and thus its OI is 2412 contracts. The next big active month is June and here the OI ROSE by 3,273 contracts UP to 311,587.

We had 21 notice(s) filed upon today for 2100 oz


We are in the NON active delivery month is APRIL  Here the open interest LOST 112 contracts. We had 118 notices filed yesterday so we GAINED 6 contracts or an additional 30,000 oz will stand for delivery.

The next active contract month is May and here the open interest  LOST 5,378 contracts DOWN to 148,907 contracts which is astonishingly high. It is this front month that the crooked bankers are targeting as they must be frightened to see such a mammoth amount of contracts still standing for metal. The non active June contract GAINED 12 contracts to stand at 180. The next big active month will be July and here the OI gained 5039 contracts up to 44,459.


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.(EFP 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 92,626  contracts which is poor.

Yesterday’s confirmed volume was 390,461 contracts  which is huge.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for APRIL
 April 10/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 160,847.36 oz
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
 130,179.807 OZ
No of oz served (contracts) today
21 notice(s)
2100 OZ
No of oz to be served (notices)
1791 contracts
179,100 oz
Total monthly oz gold served (contracts) so far this month
608 notices
60800 oz
1.8911 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   429,380.2 oz
Today we HAD 1 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 1  customer deposit(s):
i) Into JPMorgan:  103,179.807 oz
total customer deposits; 130,179.807  oz
We had 3 customer withdrawal(s)
i) Out of Scotia: 868.05 oz 27 kilobars
ii) Out of Brinks: 37,756.45 oz
iii) Out of HSBC: 122,222.862 0z
total customer withdrawal:  160,847.36  oz
 we had 0 adjustments:

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 21 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

To calculate the initial total number of gold ounces standing for the APRIL. contract month, we take the total number of notices filed so far for the month (608) x 100 oz or 60,800 oz, to which we add the difference between the open interest for the front month of APRIL (1812 contracts) minus the number of notices served upon today (21) x 100 oz per contract equals 239,900 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 (608) x 100 oz  or ounces + {(1812)OI for the front month  minus the number of  notices served upon today (21) x 100 oz which equals 239,900 oz standing in this non active delivery month of APRIL  (7.4618 tonnes)
we lost 121 contracts or an additional 12,100 oz will not stand and these guys were cash settled via the PRIVATE 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: 7.4618
total for the 16 months;  252.299 tonnes
average 15.767 tonnes per month
Total dealer inventory 990,497.01 or 30.808 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,853,242.149 or 278.48 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.48 tonnes for a  loss of 25  tonnes over that period.  Since August 8/2016 we have lost 76 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 10. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
824,253.138 oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 882,655.671 oz
No of oz served today (contracts)
No of oz to be served (notices)
153 contracts
(765,000  oz)
Total monthly oz silver served (contracts) 641 contracts (3,205,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month  4,377,979.8 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:  752,605.390 oz
ii) Out of Scotia: 70,568.03 oz
iii) Out of Delaware:1079.718 oz
 We had 2 Customer deposits:
i) Into JPMorgan:  752,605.345 oz
ii) Into Delaware: 20,050.326
***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; 772,655.671 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 641 x 5,000 oz  = 3,205,000 oz to which we add the difference between the open interest for the front month of APRIL (153) 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:  641(notices served so far)x 5000 oz  + OI for front month of APRIL.(153 ) -number of notices served upon today (0)x 5000 oz  equals  3,970,000 oz  of silver standing for the APRIL contract month. 
We gained 6 contracts or an additional 30,000 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 31,189 which is FAIR 
Yesterday’s  confirmed volume was 138,180 contracts OR 690 MILLION OZ /GIGANTIC.  (THE 690 MILLION OZ = 98.5 % OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA)
Total dealer silver:  29.181 million (close to record low inventory  
Total number of dealer and customer silver:   188.416 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 6.7 percent to NAV usa funds and Negative 6.7% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.6%
Percentage of fund in silver:39.3%
cash .+0.1%( April 10/2017) 
2. Sprott silver fund (PSLV): Premium FALLS  to -457%!!!! NAV (April 10/2017) 
3. Sprott gold fund (PHYS): premium to NAV rises to – 0.11% to NAV  ( April 10/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -57% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.11%/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 10/no changes in inventory at the GLD/inventory rests at 836.49 tonnes

April 7/a small withdrawal of .28 tonnes from the GLD/Inventory rests at 836.49 tonnes

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

April 10 /2017/ Inventory rests tonight at 838.29 tonnes


Now the SLV Inventory

April 10/ a paper withdrawal of 11.231 million oz of silver from the SLV and this silver was used in the raid today. Inventory rests at 317.231 million oz

April 7./ a withdrawal of 947,000 oz of silver from the SLV/Inventory rests at 328.201 million oz.

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/
April 10.2017: Inventory 317.070  million oz

Major gold/silver trading/commentaries for MONDAY


Pension Crisis In U.S. and Globally Is Unavoidable

Pension Crisis In U.S. and Globally Is Unavoidable

by Lance Roberts

There is a really big crisis coming.

Think about it this way. After 8 years and a 230% stock market advance the pension funds of Dallas, Chicago, and Houston are in severe trouble.

But it isn’t just these municipalities that are in trouble, but also most of the public and private pensions that still operate in the country today.

Currently, many pension funds, like the one in Houston, are scrambling to slightly lower return rates, issue debt, raise taxes or increase contribution limits to fill some of the gaping holes of underfunded liabilities in their plans. The hope is such measures combined with an ongoing bull market, and increased participant contributions, will heal the plans in the future.

This is not likely to be the case.

This problem is not something born of the last “financial crisis,” but rather the culmination of 20-plus years of financial mismanagement.

An April 2016 Moody’s analysis pegged the total 75-year unfunded liability for all state and local pension plans at $3.5 trillion.

That’s the amount not covered by current fund assets, future expected contributions, and investment returns at assumed rates ranging from 3.7% to 4.1%. Another calculation from the American Enterprise Institute comes up with $5.2 trillion, presuming that long-term bond yields average 2.6%.

With employee contribution requirements extremely low, averaging about 15% of payroll, the need to stretch for higher rates of return have put pensions in a precarious position and increases the underfunded status of pensions.

With pension funds already wrestling with largely underfunded liabilities, the shifting demographics are further complicating funding problems.

One of the primary problems continues to be the decline in the ratio of workers per retiree as retirees are living longer (increasing the relative number of retirees), and lower birth rates (decreasing the relative number of workers.) However, this “support ratio” is not only declining in the U.S. but also in much of the developed world. This is due to two demographic factors: increased life expectancy coupled with a fixed retirement age, and a decrease in the fertility rate.

In 1950, there were 7.2 people aged 20–64 for every person of 65 or over in the OECD countries. By 1980, the support ratio dropped to 5.1 and by 2010 it was 4.1. It is projected to reach just 2.1 by 2050. The table below shows support ratios for selected countries in 1970, 2010, and projected for 2050 (see table above).

Which means that when the next major bear market comes growling, the real crisis won’t be secluded to just subprime auto loans, student loans, and commercial real estate. The real crisis comes when there is a “run on pensions” when “fear” prevails benefits will be lost entirely.

It’s an unsolvable problem. It will happen. And it will devastate many Americans.

It is just a function of time.

As George Will recently wrote:

“The problems of state and local pensions are cumulatively huge. The problems of Social Security and Medicare are each huge, but in 2016 neither candidate addressed them, and today’s White House chief of staff vows that the administration will not ‘meddle’ with either program.

Demography, however, is destiny for entitlements, so arithmetic will do the meddling.”

Whatever amount you are saving for retirement is probably not enough.

Full article on Realinvestmentadvice.com

Editors note: Real diversification and an allocation to gold bullion will protect pension and investment portfolios when the pension timebomb explodes.



No comment necessary:

(courtesy SilverDoctors/Craig Hemke/Dave Kranzler)


While no additional silver was put on deposit at the Comex during the [past] week, The Banks sold contracts for 120MM oz.  This is fraud.  – Craig Hemke


By PM Fund Manager Dave Kranzler:

If you were to poll the public about comparing the investment returns  between gold, silver and stocks during the first quarter of 2017, it’s highly probable that the majority of the populace would respond that the S&P 500 outperformed the precious metals.   That’s a result of the mainstream media’s unwillingness to report on the precious metals market other than to disparage it as an investment.

In reality, among silver, gold, the Nasdaq 100 and the S&P 500, the S&P 500 had the lowest ROR in Q1.  Silver led the pack at 14%, followed by tech-heavy Nasdaq 100 at 11.1%, gold at 8.6% and the S&P 500 at 4.8%.  Put that in your pipe and smoke it, Cramer.  Imagine the performance gold and silver would have turned in if the Comex was prevented from creating paper gold and silver in amounts that exceeded the quantity of gold and silver sitting in the Comex vaults.

As an example, as of Friday the Comex is reporting 949k ozs of gold in the registered accounts of the Comex vaults and 9 million ozs of total gold.  Yet, the open interest in paper gold contracts as of Friday totaled 41.7 million ozs.  This is 44x more paper gold than the amount of physical that has been designated – “registered” – as available for delivery.  It’s 4.6x more than the total amount of gold sitting on Comex vaults.

With silver the situation is even more extreme.  The Comex is reporting 29.5 million ozs of silver as registered and 190.2 million total ozs.  Yet, the open interest in paper silver is a staggering 1.08 billion ozs.  1.08 billion ozs of silver is more silver than the world mines in a year.  The paper silver open interest is 5x greater than the total amount of silver held in Comex vaults;  it’s an astonishing 37x more than the amount of silver that is available to be delivered.

This degree of imbalance between the open interest in CME futures contracts in relation to the amount of the underlying physical commodity represented by those contracts never occurs in any other CME commodity – ever.   Historically, when the amount of paper exceeds the amount of underlying commodity that is available for delivery by more than 20-30%, the CFTC intervenes by investigating the possibility of market manipulation.  But never with gold and silver.

The Comex is perhaps the most corrupted securities market in history.   It is emblematic of the fraud and corruption that has engulfed the entire U.S. financial and political system. The U.S. Government has now issued $20 trillion in Treasury debt for which it has no intention of every redeeming.  It’s issued over $100 trillion in unfunded liabilities (entitlements, pensions, etc) for which default is not a matter of “if” but of “when.”

In today’s episode of the Shadow of Truth, we discuss “The Big Lie,” which is also known as the “Comex,” and explain why those looking to protect their savings should be buying physical gold and silver now:





Chris Powell comments to a email sent to him on his speech in Hong Kong

(courtesy Chris Powell/GATA)


‘This is the business we’ve chosen’


5:17p HKT Saturday, April 8, 2017

Dear Friend of GATA and Gold:

Our friend E.S. writes:

“I thought your recent address to the two Asian mining conferences —


— was unbeatable as a summary of what has happened and where we stand with respect to the gold issue.

“I may be beating a dead horse, but if a meeting with President Trump and Treasury Secretary Steve Mnuchin is unrealistic, what about an open letter to them published in The Wall Street Journal? The text could be simply a condensed version of your speech, with a few alterations to convert it into letter form.
“I know that publishing such a letter would be an expensive proposition, but you have done it in the past, if I recall correctly. Also, couldn’t the gold and silver mining companies be solicited for funds? Maybe a few of them have finally begun to realize how central bank actions are ruining their industry. I know First Majestic’s Keith Neumeyer is outspoken about the manipulation. McEwen Mining’s Rob McEwen may also be a good prospect.

“Anyway, just an idea. Your speech was terrific.

“Best wishes, E.S.”

* * *

Dear E.S.:

Thanks much for your kind note. Yes, nine years ago GATA paid more than a quarter-million dollars to put a full-page color ad in The Wall Street Journal —


— and we’re not inclined to give the paper another cent. Indeed, I wish we had that money back. It was my idea and the dumbest thing GATA ever did. It accomplished nothing. It was ignored by all financial news organizations. We didn’t even get invited to the newspaper’s Christmas party for advertisers that year.

Since I was in Hong Kong for the conference here last March I have had extensive conversations and e-mail correspondence with a Journal reporter in New York who has purported to be investigating the gold story but seems to be refusing to put any critical questions to central bankers. An expert in Europe to whom she requested an introduction had the same impression of her. I stopped taking her seriously some time ago.

In Hong Kong this week the conference people told me that a local Wall Street Journal reporter wanted to talk to me, but I had to caution them that if he ever pursued the gold issue he would likely cross with the paper’s reporter in New York and be shut down quickly. I sent him some stuff that he acknowledged but I never heard from him. Of course I didn’t expect to; I would have been stunned if I did.

GATA has no money for advertising. As it was, to afford sending me to Asia this year we had to beg money from some longtime donors whom we have exploited too much already.

As for the gold and silver mining industry, it knows what GATA is doing and knows that we could use the help, and with the exception of several companies, it does nothing.

I understand the industry’s cowardice. No industry is more vulnerable to government than the mining industry — for its mining permits, royalty requirements, and environmental regulation compliance. Since it is the most capital-intensive industry, with an ordinary mine commonly requiring a billion dollars in financing to get started, the industry is also very dependent on the biggest investment banks, which in turn are formally agents of the central banks. Governments and investment banks may not respond well to complaints from gold and silver mining companies about suppression of monetary metals prices.

But as far as I can see the industry’s only choice is to die on its knees or risk dying on its feet. Until the industry makes the latter choice, it will be virtually useless, as useless as the World Gold Council, the great facilitator of paper gold, a collaborator with the central banks in price suppression and market destruction.

If it wasn’t for the chance to get on Asian television in Singapore and Hong Kong, the prodding to write a summary speech every year, the courage and kindness of the Asian mining conference organizers in inviting GATA’s participation, and the outside chance of meeting someone who might be willing to help substantially, I wouldn’t bother with the conferences over here. It’s a lot of work, travel, and expense. The potential attention of the mining industry alone could not justify it.

GATA has approached Keith Neumeyer and Rob McEwen many times. I have spent time with both of them. They have declined to help. I’m sure they have their reasons. I may have turned them off.

This is offered more in explanation than complaint. For as Lee Strasberg’s Hyman Roth says in “The Godfather” —


— “This is the business we’ve chosen.” So we’re stuck with it and will get on with it.

Thanks again for writing and caring.

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


This is interesting, the Dubai exchange may launch another gold contract for retail investors.  it will be 1 kg in size and settlement must be physical.  It seems that everybody is taking on the comex.

(courtesy Reuters)

Dubai exchange may launch gold contract for retail investors


From Reuters
Saturday, April 8, 2017

The Dubai Gold and Commodities Exchange said today it was considering whether to launch a new spot gold contract designed to be used by retail investors and traders.

The DGCX signed a memorandum of understanding with the Dubai Multi Commodities Centre, a body that facilitates commodity trade flows through Dubai, and National Bank of Ras Al Khaimah (Rakbank) to develop bullion products such as the proposed retail spot gold contract.

The contract could be smaller in size than the existing DGCX Spot Gold contract, which requires physical delivery of 1 kilogramme gold bars and has been used by several institutional investors since its launch in 2016, the exchange said.

The retail contract would be fully backed by physical gold and held in electronic form with the option of physical redemption. This would attract a wider pool of investors and appeal to smaller, more risk-averse traders based in the region, the exchange said. …

… For the remainder of the report:



Ed Steer comments that intervention in the gold/silver markets are prevalent on Friday.

(courtesy Ed Steer/GATA)

Ed Steer: The powers-that-be were everywhere on Friday


11:31p JST Sunday, April 9, 2017

Dear Friend of GATA and Gold:

GATA Board of Directors member Ed Steer’s Gold & Silver Daily letter (https://www.edsteergoldandsilver.com) for Saturday, posted in the clear at GoldSeek, describes the heavy interventions that characterized Friday’s “markets.” Steer’s letter is headlined “What a Day! The Powers-That-Be Were Everywhere on Friday” and it’s posted at GoldSeek here:


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



I agree with Lawrie that China has suspended their reporting of their gold reserves

(Lawrie Williams/Sharp’s Pixley)


Lawrie Williams: China may have suspended gold reserve reporting


11:48a AKT Sunday, April 9, 2017

Dear Friend of GATA and Gold:

Writing for Sharps Pixley, gold market analyst Lawrie Williams suspects that China has resumed concealing its gold purchases for long periods, withholding announcements until they are politically expedient:


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




India showed a drop of about 7 billion dollars worth of gold imports from the April-Feb fiscal year. That was to be expected as Modi engineered that awful removal of higher denomination notes which made it difficult for Indians to purchase gold.  Now everything is in order in India and February saw a good rise in imports of 3.5 billion vs last yr 1.4 billion, in February 2016.

(courtesy Times of India/Mumbai)


India’s gold imports fall over 10 months but may be rebounding


By the Press Trust of India
via The Times of India, Mumbai
Sunday, April 9, 2017

NEW DELHI — India’s gold imports witnessed a fall of about 24 percent to $23.22 billion in April-February period of the last fiscal year, which is expected to keep a lid on the current account deficit.

Total imports of the precious metal in the corresponding period of 2015-16 stood at $30.71 billion.

According to industry experts, softening prices of gold in the domestic and world markets could be the reason.

The contraction in imports helped in narrowing the trade deficit to $95.2 billion during the 11-month period of 2016-17 as against $114.3 billion in the same period of the previous fiscal year.

However, on a month-on-month basis, gold imports jumped to $3.48 billion in February as against $1.4 billion in the same month last year, according to the commerce ministry data. …

… For the remainder of the report:


Hong Kong wishes to help Myanmar (Burma) set up a gold exchange at this nation tries to modernize
(courtesy zero hedge)


Hong Kong to help Myanmar set up a gold exchange


By Enouch Yiu
South China Morning Post, Hong Kong
Sunday, April 9, 2017

The operator of Hong Kong’s gold exchange is in talks to help the government of Myanmar establish a bourse in the country for trading the precious metal, according to Haywood Cheung Tak-hay, president of the Chinese Gold & Silver Exchange Society.

“This is the right timing for Myanmar to establish a gold exchange as the country is very keen on modernising its economy,” Cheung said in an interview with the South China Morning Post. “Myanmar lies on the route of China’s One Belt, One Road project, which enables it to capture the growing opportunities of commodities and other types of trading in the region.” …

… For the remainder of the report:



Your early MONDAY 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  6.9034(   DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES WEAKER TO ONSHORE AT   6.9072/ Shanghai bourse DOWN 17.22 POINTS OR 0.52%   / HANG SANG DOWN 5.12 POINTS OR .02%

2. Nikkei closed UP 133.28 POINTS OR 0.71%   /USA: YEN RISES TO 111/29

3. Europe stocks opened ALL IN THE RED HEADING: TO THE DOWNSIDE      ( /USA dollar index RISES TO  101.25/Euro DOWN to 1.0573


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  52.22 and Brent: 55.19

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.224%/Italian 10 yr bond yield DOWN  to 2.239%    

3j Greek 10 year bond yield FALLS to  : 6.75%   

3k Gold at $1250.50/silver $17.89 (8:15 am est)   SILVER  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 7/100 in  roubles/dollar) 57.33-

3m oil into the 52 dollar handle for WTI and 55 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 BIG 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  1.0101 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0680 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  +.224%

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 2.384% early this morning. Thirty year rate  at 3.007% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Futures Flat Ahead Of Yellen As Geopolitical Risks Loom; Fear Barometer Spikes

S&P futures point to a slightly lower open, while Asian and European stocks are likewise modestly in the red. Trading volumes are muted for most markets on Monday with investors spooked by rising geopolitical tensions in the Middle East and the Korean peninsula. It is also a holiday-shortened week in much of the West. As Bloomberg puts it, there is a “sense of unease” across markets, with global stocks mixed as investors weighed looming security risks and French bonds retreating ahead of the election following the surprising surge of far-leftist Melenchon in the polls.

The dollar inched towards three-week highs after Dudley’s Friday comments and overnight follow up from a hawkish Bullard who pushed for further tightening, drawing support from U.S. rate hike expectations while global stocks, reaching the point where some see them as expensive, were stuck in neutral ahead of U.S. earnings season this week.

Top aides to U.S. President Donald Trump differed on Sunday on where U.S. policy on Syria was headed after last week’s attack on a Syrian air base, while U.S. Secretary of State Rex Tillerson warned the strikes were a warning to other nations, including North Korea. “The risks of a conflict have certainly grown and that should keep the dollar supported against most Asian currencies with hawkish comments from the U.S. central bank also helping,” said Gao Qi, an foreign exchange strategist at Scotiabank in Singapore.

Meanwhile, with nothing but confusion coming out of the Fed, and with Bill Dudley himself saying on Friday that “some people misconstrued what I said last week”, we expect the market will closely watch what Janet Yellen says today in her ad hoc Q&A at the University of Michigan, where she will take questions from Twitter. Expect many questions on the Fed’s balance sheet normalization plans, as well as her thoughts on the future rate hikes, and – with unemployment tumbling to 4.5% without boosting inflation – NAIRU.

The Bloomberg Dollar Spot Index rises for the third day to touch the highest level in over three weeks as Treasuries trade steady before Janet Yellen’s speech

Global stocks have traded flat over the past month as investors after the 10 percent rise since last November’s lows has taken valuations above long-term averages. The MSCI AC World index trades at 16 times forward earnings, compared to a 15-year average of about 14 times.

S&P 500 futures advanced in early trading, then dipped back to unchanged as an American aircraft carrier bound for Australia was diverted to North Asia, sparking a selloff in South Korea on speculation the U.S. could take a more aggressive stance against Kim Jong-Un. French bonds fell, widening the yield spread over Germany to the highest since February after polls showed the country’s presidential election is becoming a four-way contest. European stocks traded mostly sideways as equities in France gave up ground. pushing the Stoxx Europe 600 Index some 0.2% lower even as shares of mining major BHP Billiton jumped more than 5 percent after activist hedge fund Elliot Management urged the company to pursue a spin-off of its U.S. business.

The MSCI All-Country World Index fell 0.1 percent.

The euro edged lower and France’s borrowing costs hit their highest level over Germany in six weeks as investors fretted over the rise of far-left candidate Jean Luc Melenchon in polls before this month’s presidential vote. Melenchon’s emergence over the past week has raised the possibility that he will square off against far-right leader Marine Le Pen in the decisive second round in May, making the final result far more unpredictable.

France’s bond yield spread over Germany hit 70 basis points in early trading on Monday, its highest since Feb. 27. “The market is focusing a bit too much on the extreme possibilities, but I guess with the elections coming up so soon some nerves are inevitable,” said DZ Bank strategist Christian Lenk. “But at the end of the day I think (the second round) will be Macron versus Le Pen.”

The Credit Suisse fear barometer, unlike the VIX, has been creeping steadily higher since the election, and is now at the highest since Trump’s presidential victory.

Some more thoughts from Bloomberg which notes that “while moves show demand for havens assets abating as financial markets attempt to shrug off Friday’s disappointing U.S. employment figures, a ratcheting up of geopolitical tensions and Europe’s looming test of populism look set to curtail optimism. Corporate results may provide the next fresh catalyst – they’ll accelerate this week with earnings due from the likes of JPMorgan Chase & Co., Tesco Plc and Prada SpA.”

“Geopolitics trumps economics as the main market driver, with strained U.S.-Russian relations and the dispatch of a U.S. aircraft carrier towards the Korean peninsula making the headlines,” Kit Juckes, a global strategist at Societe Generale, wrote in a note. “This week, it will be geopolitics and events outside the U.S. which drive markets.”

In commodities, oil prices rose, supported by strong demand and uncertainty over the conflict in Syria, although another run-up in U.S. drilling activity kept a lid on gains. Brent crude futures, the international benchmark for oil prices, were up 0.7 percent at $55.63 per barrel. U.S. West Texas Intermediate crude futures were up 0.6 percent at $52.55 a barrel. Spot gold was little changed.

Overnight Media Digest from RanSquawk

  • European bourses trade modestly lower amid mounting geopolitical tensions as the holiday-shortened week begins.
  • GE-FR spread widens as support for left-wing candidate Melenchon surges.
  • Looking ahead, highlights include comments from ECB’s Constancio and Fed Chair Yellen

Market Snapshot

  • S&P 500 futures up 0.1% to 2,354.50
  • STOXX Europe 600 down 0.2% to 380.76
  • MXAP down 0.05% to 146.39
  • MXAPJ down 0.1% to 478.73
  • Nikkei up 0.7% to 18,797.88
  • Topix up 0.7% to 1,499.65
  • Hang Seng Index down 0.02% to 24,262.18
  • Shanghai Composite down 0.5% to 3,269.39
  • Sensex down 0.3% to 29,631.01
  • Australia S&P/ASX 200 up 0.9% to 5,912.88
  • Kospi down 0.9% to 2,133.32
  • German 10Y yield fell 0.4 bps to 0.224%
  • Euro down 0.1% to 1.0578 per US$
  • Brent Futures up 0.7% to $55.65/bbl
  • Italian 10Y yield fell 4.9 bps to 1.926%
  • Spanish 10Y yield rose 0.2 bps to 1.616%
  • Gold spot down 0.1% to $1,253.29
  • U.S. Dollar Index up 0.07% to 101.25

Overnight News

  • Barclays’s Staley Faces Probe, Bonus Cut Over Whistleblower
  • BHP Urged by Elliott to Spin Off U.S. Oil Unit in Overhaul
  • Stada Accepts $5.6 Billion Takeover Offer From Bain, Cinven
  • Fresenius SE Confirms Talks With Akorn for Potential Purchase
  • South32, GE in 3-Yr Partnership for Digital Tech to Support Ops.
  • BioTelemetry to Buy LifeWatch AG for CHF260m in Cash, Stock
  • Swift Set to Announce Merger With Knight Transportation: WSJ
  • Intrawest Said to Near Sale to KSL-Backed Operator: Reuters
  • McCormick Said Considering Bid for Reckitt Brands: Telegraph
  • Apple Warns Vietnam Stores About Logo Violations: Tuoi Tre
  • Ford CEO Says Glad to See Trump-Xi Meet, Optimistic on Relations
  • N.Y. Agency Denies Permit for Proposed Northern Access Pipeline
  • Morgan Stanley Targets 2017 Return on Equity 9%-11% Range

Asia equity markets traded mixed following the subdued Wall Street close on Friday where participants digested the US strike on Syria and NFP, as well as the fireworks in the Eurodollar complex. ASX 200 (+0.8%) rose above the 5,900 to post a 2-year high amid upside in financials and energy, with the latter buoyed after WTI broke back above USD 52/bbl, while Nikkei 225 (+0.7%) advanced after the JPY weakened against its major counterparts. Hang Seng (-0.1.) and Shanghai Comp. (-0.5%) saw lacklustre trade after the PBoC continued to refrain from open market operations, while KOSPI (-0.9%) underperformed on increased geopolitical concerns after the US deployed an aircraft carrier group in the Korean peninsula as a show of force. Finally, 10yr JGBs were marginally lower amid spill-over selling from USTs and after the BoJ refrained from a Rinban announcement, while the curve steepened amid underperformance in the super-long end.

Top Asian News

  • HNA to Offer $1 Billion for CWT in Deal to Add Logistics Network
  • Hong Kong Concerned About Risks From Developer Mortgages
  • Indonesia Bad Loan Problem to Worsen, Bank Bailout Chief Says
  • Google’s AlphaGo AI Takes on China After South Korean Triumph

European equities have started the week on the back foot in what could potentially be a quieter week given the upcoming market holidays and lighter economic calendar. That said, geopolitical concerns continue to remain at the forefront of investor sentiment amid weekend reports of North Korea criticising the US response to last week’s chemical weapons attack in Syria with the US subsequently deploying an aircraft carrier to waters near the Korean peninsula. In terms of a sector breakdown, materials, pharma and financial names outperform with equity specific news relatively light for a Monday morning. That said, headlines have mounted around Barclays amid reports that their CEO is under investigation by NY and London regulators, nonetheless Co. shares have managed to brush off any selling pressure at this stage. From a fixed income perspective, trade has been relatively uneventful thus far with Bunds modestly supported by the general risk sentiment. Aside from the German benchmark, French paper has seen some selling pressure as commentators continue to contemplate the recent rise of left-wing candidate Melenchon following a relatively successful performance in TV appearances and campaign rallies. In peripheral markets, the SP-GE spread is modestly wider this morning while Italian paper has pulled away from recent contract highs with investors also eyeing the Italian government approving a budget adjustment of EUR 3.4bIn tomorrow.

Top European News

  • French Election Becomes a Four-Way Race as Melenchon Surges
  • Agrokor Bonds Slump to Record as Company Starts State Revamp
  • Croatia Names Consultant Ramljak to Lead Agrokor Restructuring

In currencies, the Bloomberg Dollar Spot Index rose less than 0.1 percent at 10:30 a.m. in London, after advancing 0.3% on Friday. The euro was little changed. A very quiet morning in FX, with little of major significance to trade off, with the short week into the Easter break keeping volumes to a minimum. We have seen some EUR/GBP selling going through, pushing the cross rate back into the lower 0.8500’s, but as we saw last week, we ran into some decent buying interest here. Even so, the move has pushed Cable back to 1.2400, but with minimal traction through this level as we now see previous support turning into resistance. A cluster of EUR/USD support seen below 1.0600 also helps prop up the cross rates, and for now, 1.0570 represents the low for the day. With the upcoming French elections set to pressure the single currency in the meantime, there is unlikely to be any major push higher, especially with ECB members ‘underlining’ the current accommodative policy stance. Earlier today, the Apr Sentix investor confidence index rose from 20.7 to 23.9. USD/JPY has struggled into the mid 111.00’s, and despite Friday’s ramp up in Treasury yield post payrolls, risk aversion hangs in the air to keep the JPY supported to a degree for now. Cross JPY also heavy, with EUR/JPY an attractive sell given the above.

In commodities, West Texas Intermediate crude rose 0.7 percent to $52.59 a barrel, after climbing more than 1 percent in each of the previous two sessions. WTI has gained for five straight days, the longest winning streak of the year. Iron ore futures slipped 2.1 percent after falling into a bear market on Friday. Gold was fractionally lower at $1,253.20 per ounce. The bid tone in Oil prices can be largely put down to the US airstrikes on Syria, prompting fresh tensions over the region, WTI has been driven back into the middle of the USD50-55 range, but given some of the correlation trades, ie CAD, there seems to be caution over whether these gains can be held in the face of high inventory. Elsewhere, supply issues continue to hamper base metals, along with conflicting reports/views on demand. Copper has slipped back towards USD2.60, but has held so far. Gold prices are back to more familiar levels as last week’s events late in the week led to a rally to just above USD1270.00. USD1245.00 should provide support in the interim as risk sentiment remains in the balance. Silver is trading back under USD18.00 again.

US Event Calendar

  • 10am: Labor Market Conditions Index Change, est. 1, prior 1.3
  • 4pm: Fed’s Yellen Speaks at University of Michigan

DB’s Jim Reied concludes the overnight wrap

It’ll probably be a quiet week due to the holidays but there are a few important things to look out for. As you’ll see in the week ahead there’s a lot of global inflation numbers ahead. We think inflation has overtaken employment across the world as the key variable for the pace of monetary stimulus removal. Also this week, JPM, Citi and Wells Fargo kick off bank reporting in the US on Thursday and today we have the first post tapering CSPP numbers which we’ll preview below.

With regards to the weekend news, much of the focus has been on the outcome of the meeting between US President Trump and China President Xi Jingping. The main thing to note was some progress on agreeing to balancing bilateral trade. Indeed our China economist Zhiwei Zhang notes that the two sides agreed to work on a plan in the next 100 days to address trade imbalances and improving US companies’ market access to China, particularly in the services industry. He suggests that it may also involve cutting China’s export tax rebates and reducing import tariffs, although this is less important in Zhiwei’s mind.

Zhiwei also notes that the subject of North Korea remains contentious and it was clear that the US gave a strong signal that they may chart their own course if China does not coordinate with the US on the issue. On that subject, US Secretary of State Rex Tillerson said over the weekend that the US isn’t interested in a “regime change” in North Korea. This follows the news that a US aircraft carrier was diverted to waters off the Korean Peninsula.

Markets were actually fairly resilient on Friday in the face of rising geopolitical tensions and as you’ll see shortly, a well below market nonfarm payrolls reading. This morning in Asia it’s been a fairly mixed start for equity markets. While the Nikkei (+0.65%), Hang Seng (+0.08%) and ASX (+0.71%) are all higher, the Shanghai Comp (-0.25%) and Kospi (-0.77%) are both in the red. The Korean Won (-0.65%) has also been the worst performing currency this morning, reflecting perhaps the fact that the Trump-Xi summit failed to really produce a clear result about North Korea.

Back to payrolls, March’s 98k number (vs. 180k expected) also came with a cumulative 38k of downward revisions attached to the prior two months, while the March figure was the lowest since the 43k reading last May. Private payrolls also came in at a soft 89k (vs. 170k expected). All the chatter though was about the impact of winter storm Stella being responsible for the soft reading. Indeed the household survey was not impacted by the storm with hiring jumping 472k and the most since February last year. Our US economists also note that 3.1m people reported that they could not work a full work week because of “bad weather”. Significantly, the jump in household employment and a decline in the number of people unemployed pushed the unemployment rate down two-tenths to 4.5% (vs. 4.7% expected) and the lowest since May 2007. Wage pressure remains subdued however with average hourly earnings increasing +0.2% mom as expected and so making them up just +2.7% over the past 12 months. Its worth noting that our US economists saw nothing in the March employment report to suggest any change in the monetary policy outlook and continue to forecast for a 25bp hike in June and September, with policy then remaining unchanged in December.

Speaking of forecasts, our US fixed income strategist Dominic Konstam noted in his weekly over the weekend that he is now revising his rates’ forecasts lower on the basis that the bear market that he had expected to continue through 2017 seems to be on hold mainly due to the lack of progress on structural tax reform, and his expectations that this doesn’t change anytime soon. He notes that his fair model indicates that 10y yields should be around 2.25% in the near term and he now expects a move towards 2.75% by year end, reflecting at least some progress on the tax front.

Moving on. Perhaps the most interesting stat today will be the ECB CSPP number which will include 3 days worth (out of 5) of settled secondary purchases under the new tapering regime. A big debate has been as to whether they taper CSPP in line with the PSPP or leave it running at a similar pace. Obviously the latter would be very good for credit technicals. For choice I think they do taper CSPP. We won’t know for sure today but we’ll perhaps get some clues in the size of the purchases. The last two weeks have seen daily numbers of EU335m and 308m respectively down from the average of 365m since the  program started so there’s a little clue here that they have been scaling back a touch. We also have to adjust for the slightly below 20% of primary in the number which due to longer settlement periods won’t be under the new regime in today’s number. So an interesting release to follow this afternoon.

Quickly wrapping up Friday’s session. As we highlighted above markets were fairly resilient in the face of both the geopolitical headlines which hit early Friday morning and then a well below market payrolls print. Equity markets chopped and changed but the S&P 500 (-0.08%) and Dow (-0.03%) only closed with very modest losses while prior to this in Europe the Stoxx 600 (+0.13%) staged a late bounce into the close. This was also despite some sharp moves across commodities. WTI Oil continued its impressive climb from the lows after finishing higher (+1.04%) for the fourth day in a row and above $52/bbl for the first time since March 7th. The bigger moves came in base metals however with Iron Ore slumping nearly 7% while Copper (-0.41%), Zinc (-1.32%) and Lead (-1.92%) also fell sharply.

Over in rates Treasury yields crept higher with 10y yields rising 4.1bps to close at 2.383%, while the US Dollar index also closed up +0.51% and back at the highest level in nearly a month. That in part seemed to reflect some comments made by the NY Fed President Dudley. Speaking to an audience in New York, Dudley seemingly sought to clarify some of the comments he made the week prior when he suggested that the Fed might be prompted to make a “little pause” in the hiking cycle when it begins its process of reducing the balance sheet. Dudley said that “presumably at the time that you make the decision on the balance sheet you might want to forgo the decision on short-term rates just to make sure that the balance sheet decision doesn’t turn out to be a bigger decision than you thought you were making”. With that he also said “so I would emphasize the words little pause”. Dudley also made a few comments on financial regulation. Specifically he said that he thinks its “time to rethink major Wall Street regulations, including the Volcker Rule and the Fed’s annual stress tests of banks, now that almost a decade has passed since the financial crisis”.

In Europe the main data of note was the various industrial production reports. In Germany IP surprised to the upside after printing at +2.2% mom in February (vs. -0.2% expected) thanks to a big surge in construction spending. In contrast IP declined -1.6% mom in France (vs. +0.5% expected) while in the UK IP was also reported as declining (-0.7% mom vs. +0.2% expected).

Staying in Europe, it’s worth quickly updating the latest on the French presidential polls where the most notable shift has been the recent rising support for Melenchon. A Kantar Sofres Poll from the weekend showed Macron and Le Pen tied at 24% in the first round however Melenchon has now seen his support rise to 18% and putting him 1% ahead of Fillon. Melenchon’s support is now up about 6% from mid-March. While there is still a gap to the top 2 candidates in the first round it’s worth seeing if the positive momentum for Melenchon continues and whether the gap gets closed at all.

To the week ahead now. This morning in Europe the only data of note is the Bank of France business sentiment reading and Sentix investor confidence reading for the Euro area. Over in the US the sole release is the labour market conditions index reading for March. Tuesday kicks off in the UK where we will get the March CPI/RPI/PPI data docket, while Euro area industrial production for February and the April ZEW survey for the Euro area will also be closely watched. Over in the US tomorrow data includes the NFIB small business optimism reading for March and JOLTS job openings in February. Japan gets things going on Wednesday where PPI and machine orders data is due out, while shortly after we’ll get the March CPI and PPI prints in China. During the European session the focus is likely to be on the UK again with the February and March employment indicators due out. In the US the only data is the March import price index and March monthly budget statement. Thursday looks set to be an important morning for data in China with the March trade numbers due out. In Europe we are due to do get CPI reports in Germany and France along with the BoE credit conditions and bank liabilities surveys in the UK. In the US the calendar finally picks up with initial jobless claims, March PPI and the preliminary University of Michigan consumer sentiment reading all due. As a reminder, Friday is Good Friday with equity markets closed in the US and most of Europe (Treasury market shuts at midday too) however there is some important data due in the US still with the March CPI report and also March retail sales data and February business inventories.

Away from the data, the only Fedspeak this week is from Fed Chair Yellen this evening when she is due to speak at the University of Michigan (with Q&A expected) and then Kashkari on Tuesday. Away from that, the IMF is due to release the analytical chapters from its April 2017 World Economic Report today. The ECB’s Constancio is also due to present the ECB’s annual report to an EU parliamentary committee today. With regards to earnings, JP Morgan, Citigroup and Wells Fargo all report on Thursday.


i)Late  SUNDAY night/MONDAY morning: Shanghai closed DOWN 17.22 POINTS OR 0.52%/ /Hang Sang CLOSED DOWN 5.12 POINTS OR .02%  . The Nikkei closed UP 133.25 OR 0.71% /Australia’s all ordinaires  CLOSED UP 0.78%/Chinese yuan (ONSHORE) closed DOWN at 6.9072/Oil UP to 52.63 dollars per barrel for WTI and 55.73 for Brent. Stocks in Europe ALL IN THE RED   ..Offshore yuan trades  6.9072 yuan to the dollar vs 6.9034 for onshore yuan.FOR THE FIRST TIME IN OTHER TWO MONTHS THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN WEAKER  AND THE OFFSHORE YUAN MUCH  WEAKER AND THIS IS  COUPLED WITH THE  STRONGER DOLLAR. CHINA IS SENDING HER DISPLEASURE TO THE USA


North Korea

Now Trump is needing USA carrier to North Korea. With his “success” in Syria, Trump is now willing to take on Kim Jon-un

(courtesy zero hedge)



US Sends Aircraft Carrier Toward North Korea “In Response to Recent Provocations”

One day after NBC reported that the National Security Council had presented Trump with three options vis-a-vis North Korea, namely i) put American nukes in South Korea , ii) kill Kim Jong-un or iii) use the CIA to infiltrate North Korea to sabotage or take out key infrastructure, a US carrier group has departed Singapore and is headed for North Korea.

According to Reuters, a U.S. Navy strike group will be moving toward the western Pacific Ocean near the Korean peninsula, a U.S. official told Reuters on Saturday, as concerns grow about North Korea’s advancing weapons program.  The strike group, called Carl Vinson, includes an aircraft carrier and will make its way from Singapore toward the Korean peninsula.

The move of the USS Carl Vinson “is in response to recent North Korean provocations”, an official told CNN. “We feel the increased presence is necessary,” the official said, citing North Korea’s worrisome behavior.”

Harry Harris, the commander of U.S. Pacific Command, directed the USS Carl Vinson strike group to sail north to the Western Pacific after departing Singapore on Saturday, Pacific Command announced.

The Vinson strike group will operate in the Western Pacific rather than executing previously planned port visits to Australia, Pacific Command said. The group will remain under the operational control of the Third Fleet.

This year North Korean officials, including leader Kim Jong Un, have repeatedly indicated an intercontinental ballistic missile test or something similar could be coming, possibly as soon as April 15, the 105th birthday of North Korea’s founding president and celebrated annually as “the Day of the Sun.”

At the end of March, satellite images collected by 38 North suggested that North Korea was actively preparing for a nuclear test.

Late last week, President Trump and Chinese President Xi Jinping met in Florida, where Trump pressed his counterpart to do more to curb North Korea’s nuclear program. Trump’s national security aides have completed a review of U.S. options to try to curb North Korea’s nuclear and missile programs. These include economic and military measures but lean more toward sanctions and increased pressure on Beijing to rein in its reclusive neighbor

Last weekend, Trump told the FT in an interview, that “if China is not going to solve North Korea, we will.”

Although the option of pre-emptive military strikes on North Korea is not off the table, the review prioritizes less-risky steps and de-emphasizes direct military action. Then again, nobody thought that Trump would launch a cruise missile strike against Syria less than a week after Rex Tillerson said Assad’s fate lies with his people and not some foreign aggressor.

In other words, as we predicted yesterday, “with Syria down, it’s now North Korea’s turn.” Considering recent developments, Kim Jong-Un would be well advised to keep a lower profile for the next few weeks.

Finally, for a real-time breakdown of where US Carrier and amphibious ready groups can be found at this moment, here is a handy map courtesy of Stratfor.

After initially falling gold rebounds on news that China is deploying 150,000 troops to North Korea’s border;
(courtesy zero hedge)

Stocks Slide On Report China Has Deployed 150,000 Troops To North Korea Border

While the catalyst is unclear, it appears the market dropped as headlines of further sanctions against Russia appeared and reports of China deploiying 150,000 troops to its North Korea border…

This hit…

China reported to have deployed 150,000 troops to its border with North Korea in anticipation of per-emptive strike on North Korea by US

And is now confirmed by Korean news agency Chosun

As the United States announced its independent North Korean behavior and moved the United States Navy’s nuclear-powered Calvinus (CVN-70) carrier class to Singapore, the Chinese army has deployed about 150,000 troops in two groups to prepare for unforeseen circumstances.


“The report said. It is because of the prospect of taking “military options”, such as preemptive attacks on North Korea, just as the United States has launched an air raid on Syria.

And then this…


And the reaction is clear…

Dropping stocks below the levels right before Syrian airstrikes began…


Taking everything but Trannies back into the red for the day…


Gold is bid back over $1250 as USDJPY plunges…

North Korea Says “Loud-Mouthed” Trump’s “Reckless” Syria Bombings Justify Their Nuclear Program

If a secondary goal of the Trump administration’s recent bombing of a Syrian airfield was to send a strong a message to North Korea that their missile launch provocations will not be tolerated, it didn’t work. 

According to the Associated Press, a North Korean Foreign Ministry official recently spoke on the state-run Korean Central News Agency and described U.S. airstrikes in Syria as “absolutely unpardonable” and said they simply served to prove that its nuclear weapons are justified to protect the country against Washington’s “evermore reckless moves for a war.”


“Some forces are loud-mouthed that the recent U.S. military attack on Syria is an action of warning us but we are not frightened by it,” the report said, adding that the North’s “tremendous military muscle with a nuclear force as its pivot” will foil any aggression by the U.S.


“We will bolster up in every way our capability for self-defense to cope with the U.S. evermore reckless moves for a war and defend ourselves with our own force,” it said.

For its part, as we noted last week, North Korea test-launched a ballistic missile just ahead of the Trump-Xi meeting and has been rumored to be preparing for a possible nuclear test.  This latest provocation prompted the following terse response from Secretary of State Rex Tillerson, suggesting that the Trump administration’s next move will involve military force rather than diplomacy. 

“North Korea launched yet another intermediate range ballistic missile. The United States has spoken enough about North Korea. We have no further comment.”


Tensions have been even higher than usual over the past few weeks because annual war games between the U.S. and South Korean militaries are underway. The exercises this year are the biggest ever and have included stealth fighter training and other maneuvers that are particularly sensitive to North Korea.

Meanwhile, former MI6 chief, Sir John Sawers, warned in a BBC interview that a military conflict in North Korea is far more likely to bring about an international crisis than the conflict in Syria.

“[Trump’s] not someone who fills me with confidence.  He doesn’t have the background and the experience and the instincts of being an effective US president, but it is in our interests that we have a US administration that upholds the international system, that supports its allies and supports international norms.”


“We see the sensible grown-ups within the administration taking charge and the rather ideological figures around Trump himself being marginalized, and that’s to be welcomed.”


“If you are looking for a world crisis which could bring about the dangers of a clash between great powers then North Korea is a bigger concern than Syria.”


“I think what the Chinese are beginning to understand is that if this can’t be solved peaceably through negotiations, through pressure, then there is serious risk that the US will have only one option left, which is the military option.”


And while most of the world is not all that eager for World War III to get underway, John McCain continues with his attempts to pick a fight with Kim Jong Un, the “crazy, fat kid running North Korea.”






Kyle Bass in a rare twitter appearance blasts Chinese capital lockdown as foreign companies cannot remove any of their money back to home base

(courtesy zero hedge/KyleBass)

In Rare Twitter Appearance, Kyle Bass Slams Chinese Capital Lockdown

Hayman Capital’s Kyle Bass has traditionally been media shy when it comes to public appearances or statements on Twitter, and in fact has rarely if ever Tweeted since joining the platform in February 2015. The changed that last night.

The hedge fund manager, who over the past 18 months has obsessed with China’s financial system, and specifically the precarious state of its banks, betting on a collapse in the Chinese Yuan on expectations of ongoing capital outflows and/or a financial crisis, referenced a South China Morning Post article discussing the strict lockdowns implemented by Beijing on capital flight, saying “The Chinese have made it next to impossible for multi-national corporations to remove money from China. Many have been unable to since NOV.

China urges foreign firms to make ‘joint efforts’ to control flow of cash out the country http://www.scmp.com/news/china/economy/article/2085420/china-urges-foreign-firms-make-joint-efforts-control-flow-cash 

Photo published for China urges foreign firms to make ‘joint efforts’ to control flow of cash out the country

China urges foreign firms to make ‘joint efforts’ to control flow of cash out the country

China’s foreign exchange regulator has asked for cooperation from multinationals, including Sony, BMW, Daimler, Shell, Pfizer, IBM and Visa, to manage and control the flow of capital out the…


The Chinese have made it next to impossible for multi-national corporations to remove money from China. Many have been unable to since NOV.

In his most recent interview with Bloomberg’s Erik Shatzker, Bass said that China has “recklessly built a system that’s going to need to restructure and that just so happens to be metastasizing right when Trump becomes elected. This is a fire that’s been smoldering and it’s now starting to burn, and Trump is just more gasoline.” As he put it later “in lifecycles, what Trump is going to do, he is going to speed everything up.” It remains to be seen if that statement, which was spot on for the most part since Trump’s election, will need to be revised in the aftermath of Trump’s recent meeting with Xi Jinping, especially with Reuters reporting that China’s media “cheered” the meeting between the two heads of state.

In January, Bass also mocked “the idea that China is now the driving economic power in the world” calling it “illusory or somewhat of a fallacy” and said that “it’s safe to say that the Asian theater is where we’ve been focused.”

As for the SCMP article referenced by Bass, it repeats a previous report that “China’s foreign exchange regulator, SAFE, has asked for cooperation from multinationals, including Sony, BMW, Daimler, Shell, Pfizer, IBM and Visa, to manage and control the flow of capital out the country.”

The request was made public in a report on the State Administration of Foreign Exchange’s website after the regulator’s chief addressed a delegation of foreign businesses in China at a symposium in Beijing on Wednesday.


“A stable and good foreign exchange market is in line with the common interests of regulators and market players and it requires joint efforts from all sides,” Pan Gongsheng was quoted as saying.

The meeting came as many foreign businesses are complaining, albeit privately, about Beijing’s tightened controls and vetting of outbound remittances and payments as it attempts to stem the flow of cash out the country after the nation’s currency has weakened against the US dollar. The Chinese government says it is merely implementing existing rules and regulations and it has not imposed any fresh capital account control measures.

The report goes on to further say that details of the talks this week between the foreign exchange regulator and the big-name foreign investors in China were not released on the website. The SCMP added that both sides had “candid” exchanges and foreign firms had made “very good” suggestions about the regulator’s management of foreign exchange.

A picture of the meeting published by the regulator showed about 30 people crammed into a meeting room, with Chinese officials sitting on one side of a table and corporate representatives on the other.

What is surprising is that according to last week’s update by the PBOC, China’s capital outflows have eased since the start of the year – if only on paper – but many analysts expect the restrictions to stay in place for some time given the major uncertainties facing global markets. As shown in the chart below, after touching on $3 trillion early this year, in the past two months China’s reserve have seen a modest improvement.

Then again, there may be a less than benign reason for this: Jacob Parker, vice-president of the US-China Business Council, was cited by SCMP as saying that “despite the positive rhetoric from [the central bank] at the local level, regulators continue to put quotas on banks for converting a certain amount of currency each month.”

One wonders what the true reserve picture would look like if China was not covertly engaging in such a draconian capital lockdown, and if that is what prompted Bass to lash out on Twitter.




China offers concessions to the USA to avoid a trade war but those concessions are basically worthless.  China will allow USA firms to enter the financial scene as well as allow grains to be sold to the Chinese.  With the Chinese financial system is chaos who in their right frame of mind would want to send their money to China especially when the Chinese citizens themselves want to exit their currency as fast as their feet will carry them

(courtesy zero hedge)

China Offers “Concessions” To Avoid Trade War As Trump Readies Anti-Dumping Probe

While there was much fanfare over last week’s summit at Mar-A-Lago between the presidents of the US and China, the tangible results to emerge from what was the year’s most important political meeting, aside for a few photo ops, were few and far between. That may change, at least for purely optical purposes, after a report in the Financial Times that China will “offer concessions” to the US to avoid a trade war, including better market access for US financial sector investments and beef, after the nation’s leaders decided last week in Florida they needed results on trade talks within 100 days.

That said, as the FT itself concedes, “the two concessions on finance and beef are relatively easy for Beijing to make“, especially since one wonders which US firms are in a rush to enter the “bubble-bust” Chinese financial markets which as we described two weeks ago, are persistently on the edge of collapse- not to mention a banking system which has at least $6 trillion in bad debts – and only ever greater government intervention in the form of various Beijing backstops have kept afloat.

In any case, for those brave enough to rush after Chinese financial “bargains”, they will now be allowed to hold majority stakes in securities and insurance companies which at present they can not do. The country’s largest companies in these sectors, such as Citic Securities and China Life Insurance, have achieved enormous scale which as the FT notes “makes them formidable competitors for new entrants to the market.” Which once again begs the question: which private investor would want to compete with the Chinese government which is the de facto owner of all financial enterprises in China?

It is also the case that while US companies are invited to invest domestically, this would result in the creation of more Chinese jobs and perhaps boost China’s current account, without actually benefiting US-Sino trade relations.

Additionally, the FT reports that China is also willing to end a ban on US beef imports that has been in place since 2003, “and buy more grains and other agricultural products as it seeks to reduce tensions stemming from the $347bn annual trade surplus in goods that it enjoys with its biggest trading partner.”

Putting the relatively modest market in context, the US currently exports roughly $6 billion in beef around the world, with Japan, the biggest import market, accounting for about a quarter. It is unclear how big the potential Chinese market would be, and whether it could compete with other foreign importers. That said, the FT notes that “beef exporters have complained about the lingering Chinese ban on US imports, which was introduced after a BSE scare in the US herd.”

The bottom line: “while a comprehensive Sino-US investment treaty remains a distant prospect, both sides are hoping to achieve a number of smaller trade deals in the coming three months.” The real take home message, however, is that if China’s concessions are only aimed at finance and agriculture, is that China will – at least for the time being – not touch its 25% auto tariffs, arguably the most controversial issue in Chinese-US trade relations.

US officials are pressing their Chinese counterparts to lower their current 25 per cent tariff on automotive imports. Beijing in return would like greater protection for Chinese investment in the US, which tripled last year to more than $45bn, and also for Washington to relax restrictions on the sale of certain high-tech products to China. The Chinese government may simply commit to buy more US imports in the same way that Japan did in the 1980s.

Then there is the issue of steel exports, a long-running topic of contention between the two countries: here, too, China is not budging.

“We’re not going to export a whole lot of steel to China,” said Chad Bown of the Peterson Institute.  Thanks to a state-directed investment stimulus unleashed in the wake of the global financial crisis, Chinese steelmakers now produce more steel than the rest of the world combined. With the Chinese economy now growing at its slowest pace in a quarter century, reduced demand at home has led to a surge in steel exports, causing global prices to collapse.

Still, with Trump’s economic successes few and far between, the president will gladly take any “concessions” the Chinese offer, even if it means little in the grand scheme of trade relations between the two nations.

* * *

Meanwhile, in a separate report, Axios reported that the Trump administration is preparing an executive order that would probe “unfair” product dumping from foreign companies and could result in tariffs on a wide range of products.  Here is what Axios’ Jonathan Swan said he has learned so far:

  • Steel and aluminum will be targeted.
  • Other products, including household appliances, could be targeted as well.
  • If the investigations result in new import duties it could make some consumer goods more expensive and could hurt the stock prices of American companies that rely on cheap steel imports. A good number of American manufacturing companies, however, could benefit from this hit to their low-cost competitors.

A White House official was cited as saying this investigation is part of Trump’s effort to protect American jobs and end unfair trade practices like dumping and foreign government subsidization.

“The administration will use the results of that investigation to determine the best path forward, which could potentially include everything from no action at all to the levying of supplemental duties,” the White House official said. “But whichever action we take will be informed by the results of the investigation and not by predetermined conclusions.”

Axios further adds that Wilbur Ross is the point man on this executive order, which could arrive as early as late April. “But there’s no point getting too wedded to that timeline, because Trump has slowed the pace of executive actions and this is an especially sensitive one: If it’s clumsy, foreign trading partners could see this as the first shot in a trade war.

Keep in mind this EO would only lead to a probe, no definitive action yet. So putting it in context, if the investigation does lead to penalties on foreign trading partners, “it will be seen a big win for Steve Bannon, Stephen Miller, Peter Navarro, and other economic nationalists in Trump’s orbit. Given the Syria strikes and Bannon’s demotion from the NSC, their clout has appeared to diminish. The Goldman wing, meanwhile, will likely oppose aggressive trade moves.

Which, disappointingly, is what the Trump narrative in recent days has boiled down to – which camp is winning, the “nationalist” or the “Goldman” one. For now the score is firmly for the latter.




They should throw Barclay’s CEO in jail as he is trying to unmask a whistleblower at the bank:

(courtesy zero hedge)

In Latest Banking Scandal, Barclays’ CEO Probed For Attempt To “Unmask” Whistleblower

It appears that “unmasking” is not merely a scandalous ploy employed in US politics.

Overnight, Barclays CEO Jes Staley has unleashed the latest banking scandal, following reports he is facing major sanctions from UK regulators and a “very significant” pay cut for trying to uncover the identity of an internal whistleblower. The former JPM veteran is being investigated by the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority for breaking rules surrounding the treatment of whistleblowers, the FT reports. The bank’s policies for handling whistleblowing are also being investigated.

The Barclays CEO tried to unmask a tipster who alerted the bank to a personal matter involving a senior executive the bank said on Monday sending its shares lower as much as 1.2% . An investigation by law firm Simmons & Simmons LLP concluded that Staley “honestly, but mistakenly” believed that it was permissible to identify the author of the letter. The case is also under scrutiny by the Department of Financial Services in New York, the person said.

As the FT elaborates, the allegations of attempted “unmasking” are the result of an attempt by Staley to protect a Barclay’s colleague who was subject to what he deemed an “unfair attack” by the whistleblower, who sent an anonymous letter to the board last year raising concerns about a recently-recruited “senior employee” and Mr Staley’s involvement in their recruitment. A second letter was also sent to one senior executive. As Bloomberg adds, Staley requested that the bank’s Group Information Security team identify the author and the team asked for and received assistance from U.S. law enforcement agencies, according to the statement. The attempt to identify the author wasn’t successful, the bank said.

A person familiar with the probe confirmed that the individual who Mr Staley had been trying to protect was Tim Main, a New York-based banker who joined Barclay’s in June 2016 to be chairman of the investment bank’s financial institutions group. Although Mr Main came Barclays from Evercore, he had previously spent 20 years at JPMorgan, where he rose through the ranks along with Mr Staley. Mr Main could not immediately be reached for comment.

Today’s revelation is a significant blow to the British bank, which has spent much of the last five years attempting to repair its ethical reputation following its role in the Libor rigging scandal. In 2012, it was forced to pay £290m in fines to US and UK regulators for attempting to manipulate the interbank rate.

Staley has admitted his error and formally apologized to the board, Barclays said.

“I have apologized to the Barclays Board and accepted its conclusion that my personal actions in this matter were errors on my part,” Staley said in the statement. “I will also accept whatever sanction it deems appropriate. I will cooperate fully with the Financial Conduct Authority and the Prudential Regulatory Authority, which are now both examining this matter.”

“I am personally very disappointed and apologetic that this situation has occurred, particularly as we strive to operate to the highest possible ethical standards,” said John McFarlane, Barclay’s chairman.

The hit to Staley’s pay from the improper attempt to uncover the whistleblower will be decided only after the regulators’ investigations are complete, Barclays said. Last year, Staley made £4.2 million.

Staley’s future as this point appears uncertain: as Bloomberg notes, Barclays has made excellent progress under Staley and his removal at this stage would hurt the bank’s prospects for further improvement, Shore Capital analyst Gary Greenwood wrote in a note to investors. Given the bank’s history of regulatory misdemeanors, the latest investigation is a “very significant embarrassment” for the board as it tries to rebuild Barclays’s reputation, he said.

Under Staley, Barclays has slashed about 6,000 jobs in the last six months and cut dividends after fourth-quarter profit fell. The attempt to identify the whistle-blower came to the attention of the Barclays board early this year after an employee raised concerns. The board notified the FCA and the PRA and other authorities.

“The Board has concluded that Jes Staley, group chief executive officer, honestly, but mistakenly, believed that it was permissible to identify the author of the letter and has accepted his explanation that he was trying to protect a colleague who had experienced personal difficulties in the past from what he believed to be an unfair attack, and has accepted his apology,” Chairman John McFarlane said in the statement.

Barclays has taken a more aggressive posture toward government allegations than some of its rivals. While other lenders settled similar claims, Barclays balked at paying the amount the government sought to resolve allegations that it deceived investors who purchased $31 billion of mortgage-backed securities a decade ago, before the housing bubble popped. The bank is now defending a lawsuit brought by the U.S. Justice Department in December over the matter.


The bank has called those allegations “disconnected from the facts.”

If found to have violated whistleblower laws, Barclays could face penalties from regulators.




A secret recording has been unearthed which implicates the Bank of England in Libor rigging. You can bet the farm that they are also rigging precious metals

(courtesy zero hedge)

Secret Recording Implicates Bank of England In Libor Rigging

While it may seem like yesterday, it was nearly five years ago that the Libor scandal first broke, and with it brought scandalous suggestions that none other than the Bank of England was implicated.

As we first reported in July 2012, according to Barclays then CEO Bob Diamond, it was high level individuals at the BOE who may (or may not) have been aware that Libor had been “manipulated” and were (or were not) also active in the setting process:


And yet, concerned about how deep the rabbit hole would go if a central banker was implicated, Diamond tried to cover it up:


Even as:


The note in question was represented below:

Needless to say, when it comes to the central bank nothing happened: a few BOE personnel were reassigned, some quietly lost their jobs, and nobody was prosecuted or charged. Certainly, nobody went to prison.

* * *

Fast forward nearly five years later, when the Libor scandal may have reemerged after a secret recording that implicates the Bank of England in Libor rigging has been uncovered by BBC Panorama.

According to the BBC, the 2008 recording adds to evidence the central bank repeatedly pressured commercial banks during the financial crisis to push their Libor rates down, just as suggested by Bob Diamond in 2012.

The recording calls into question evidence given in 2012 to the Treasury select committee by former Barclays boss Bob Diamond and Paul Tucker, the man who went on to become the deputy governor of the Bank of England. In the recording, a senior Barclays manager, Mark Dearlove, instructs Libor submitter Peter Johnson, to lower his Libor rates.

Dearlove tells him: “The bottom line is you’re going to absolutely hate this… but we’ve had some very serious pressure from the UK government and the Bank of England about pushing our Libors lower.” To which Johnson objects, saying that this would mean breaking the rules for setting Libor, which required him to put in rates based only on the cost of borrowing cash.

Mr Johnson says: “So I’ll push them below a realistic level of where I think I can get money?”


His boss Mr Dearlove replies: “The fact of the matter is we’ve got the Bank of England, all sorts of people involved in the whole thing… I am as reluctant as you are… these guys have just turned around and said just do it.”

The phone call between Mr Dearlove and Mr Johnson took place on 29 October 2008 the BBC notes, the same day that Tucker, who was at that time an executive director of the Bank of England, phoned Barclays boss Diamond. Barclays’ Libor rate was discussed.

Diamond and Tucker were called to give evidence before the Treasury select committee in 2012. Both said that they had only recently become aware of lowballing, despite Diamond’s abovementioned tacit admission, which he then tried to cover up.

In its report, Panorama says it played the October 2008 recording to Chris Philp MP, who sits on the Treasury committee.

He told the programme:It sounds to me like those people giving evidence, particularly Bob Diamond and Paul Tucker were misleading parliament, that is a contempt of parliament, it’s a very serious matter and I think we need to urgently summon those individuals back before parliament to explain why it is they appear to have misled MPs. It’s extremely serious.

Responding to the recording, Diamond told the BBC: “I never misled parliament and… I stand by everything I have said previously.” Tucker did not respond to our questions. Peter Johnson, the Barclays Libor submitter, was jailed last summer after pleading guilty to accepting trader requests to manipulate Libor.

Two traders who made requests for Mr Johnson to move Libor up or down, Jay Merchant and Alex Pabon, were found guilty last June of conspiracy to defraud along with another submitter, Jonathan Mathew.

However, the jury could not reach a verdict on two other traders then on trial, Ryan Reich and Stelios Contogoulas. The Serious Fraud Office requested a retrial which concluded last week. Both Mr Reich and Mr Contogoulas were unanimously acquitted. Panorama also played Contogoulas the October 2008 recording. He said he believed that if it had been played during the criminal trials it might have affected the outcomes.

He said: “That’s the thing, you know in these trials that we went through they separated everything, separated trading requests and lowballing. So anything that has to do with this they don’t go in. So you’re asking me do I think that if all this was in would it make a difference? Probably, is the answer.”

* * *

Another notable “criminal” to emerge from the Libor scandal was Tom Hayes, the UBS and Citi-based Libor manipulating protagonist of the recent book “The Spider Network“, and who was arguably at the center of the prosection’s LIbor case. He has repeatedly claimed that the real culprits are not those – like him – who executed the Libor rigging, but the ones at the very top who have the instructions to do so.

Like, as the case may be, the Bank of England.

Yet while some junior people went to prison, nobody in the corner office, and certainly nobody at the BOE has faced any criminal consequences from their actions.

The BBC adds that the Serious Fraud Office, which brought the Barclays prosecutions told Panorama that evidence of lowballing, was provided to the recording. They also say they are still investigating lowballing and that they follow the evidence “as high as it goes and aim to charge the most senior people wherever there is a realistic prospect of conviction”.

The Bank of England said: “Libor and other global benchmarks were not regulated in the UK or elsewhere during the period in question…. Nonetheless, the Bank of England has been assisting the SFO’s criminal investigations into Libor manipulation by employees at commercial banks and brokers by providing, on a voluntary basis, documents and records requested by the SFO.”

Ironically, it is precisely that it was unregulated that may have given the Bank of England the green light to assume it can manipulate it with impunity.

It remains to be seen if, nearly a decade after the Libor manipulation took place, any central banker will go to prison over it.

Secret recording implicates Bank of England in LIBOR rigging


By Andy Verity
British Broadcasting Corp., London
Monday, April 10, 2017

A secret recording that implicates the Bank of England in Libor rigging has been uncovered by BBC Panorama.

The 2008 recording adds to evidence the central bank repeatedly pressured commercial banks during the financial crisis to push their Libor rates down.

Libor is the rate at which banks lend to each other, setting a benchmark for mortgages and loans for ordinary customers.

The Bank of England said Libor was not regulated in the UK at the time.

The recording calls into question evidence given in 2012 to the Treasury select committee by former Barclays boss Bob Diamond and Paul Tucker, the man who went on to become the deputy governor of the Bank of England.

Libor, the London Interbank Offered Rate, tracks how much it costs banks to borrow money from each other. As such it is a big influence on the cost of mortgages and other loans.

Banks setting artificially low Libor rates is called lowballing.

In the recording, a senior Barclays manager, Mark Dearlove, instructs Libor submitter Peter Johnson, to lower his Libor rates.

He tells him: “The bottom line is you’re going to absolutely hate this. … But we’ve had some very serious pressure from the UK government and the Bank of England about pushing our Libors lower.”

Mr. Johnson objects, saying that this would mean breaking the rules for setting Libor, which required him to put in rates based only on the cost of borrowing cash.

Mr Johnson says: “So I’ll push them below a realistic level of where I think I can get money?”

His boss Mr. Dearlove replies: “The fact of the matter is we’ve got the Bank of England, all sorts of people involved in the whole thing. … I am as reluctant as you are. … Tthese guys have just turned around and said just do it.” …

… For the remainder of the report:



French stocks and bonds tumble as the Communist Melenchon surges making it a 4 way contest.  It would be unbelievable if we got a LePen vs Melenchon final race:

(courtesy zero hedge)

French Stocks, Bonds Stumble As Communist’s Gains Upset Poll Predictions

Following our warnings last week of anxious hedging ahead of the French election, new polls this weekend have stirred the pot of fear further as communist candidate Jean-Luc Melenchon surges making the race a four-way contest with many suggesting this favors Le Pen and the anti-EU voters.

France’s presidential election is becoming a four-way contest as far-left candidate Jean-Luc Melenchon surges to catch Republican Francois Fillon, stoking uncertainty over the outcome less than two weeks before voting begins.

In a sign of the closeness of the race, Bloomberg reports, Fllon turned his sights on Melenchon on Sunday as both contenders held rallies at opposite ends of the country. Fillon sought to rally supporters for a comeback as multiple polls suggest that Melenchon has the momentum going into the crucial final stretch of campaigning.

“The electoral potential of Jean-Luc Melenchon is very high,” said Emmanuel Riviere, a pollster at Kantar Sofres in Paris. Even so, he added, “Fillon has the most solid base.”

Melenchon’s surprise groundswell of support coupled with Fillon’s resilience adds another layer of risk to France’s most unpredictable election in a generation. The latest Kantar Sofres poll published late Sunday had independent Emmanuel Macron and National Front leader Marine Le Pen tied in first place with 24 percent support apiece, followed by Melenchon with 18 percent then Fillon 1 point behind.

And unsurprisingly, jitters over the outcome of the France’s presidential election have increased after the far-left politician Jean-Luc Melenchon jumped in the latest polls, making the election a four-way contest, and boosting the small possibility of a second-round contest between the Communist-backed candidate and the anti-euro Marine Le Pen.

As we noted before, as the French election looms, investors are increasing bets on the nation’s stock-benchmark gauge. The number of options on the CAC 40 Index has surged to its highest level since 2011, while remaining stable on the regional Euro Stoxx 50 Index.

Since last month’s expiration, call open interest rose 26 percent, outpacing the 22 percent increase in puts outstanding.

And FX traders remain anxious, The cost of one-month options to buy the common currency against the yen plunged Thursday, relative to contracts for selling, to the lowest level since June.


And it appears investors are reacting to Melanchon’s gains…The yield difference between French and German 10-year bonds widened three basis points to 70, the highest since February, based on closing prices, while a measure of two-week euro volatility against the dollar spiked to 10.60 percent, the highest in more-than three months. The CAC 40 Index fell 0.5 percent, underperforming a wider European gauge, with Societe Generale SA, BNP Paribas SA and Natixis SA among the top 10 fallers among the region’s banks..


In reaction to this sudden shift, Goldman downgrades French bonds 

We recommend going tactically short June French futures (OATM7) at 147-72, for an initial target of 144.00, and stops on a close above 150.00. This position allows one to take a directional view on duration in a market that scores as very expensive on our valuation metrics.


In relation to the risk to this trade emanating from the political sphere, a victory by a moderate reformist candidate (e.g., Fillon, Macron) – which is our European Economics team base case – would result in a narrowing of French bond spreads (the ‘fair level’ to Bunds is in the region of 30-40bp, from 70bp currently) but offset by a sell-off in core rates. We would expect French bond spreads (and yields) to come under upward pressure if the first round of the Presidential election were to result in a strong showing of anti-establishment parties (e.g., Le Pen, Melenchon). By contrast, US Treasuries may instead rally on the event, on the back of flight-to-quality flows.

Mike Shedlock warnsLe Pen’s Chances Far Greater Than Most Think

While it is unclear now if Le Pen (or anyone else) makes it to round two, her chances of winning are far greater than most think.

The known anti-EU vote is Le Pen + Mélenchon + Asselineau. That totals 42.5%.  Is there more lurking somewhere else?

And what if the final pairing is Le Pen-Fillon. Will socialists really support Fillon?

I believe they will turn out for Le Pen in spades. Why? Because the odds of Le Pen being able to push through the legislation to take France off the Euro are slim.

Fillon, on the other hand, may be able to force through all kinds of badly needed reforms that the Left despises.

Nightmare Scenarios

  1. For the Left: Le Pen vs. Fillon
  2. For the EU: Le Pen vs. Mélenchon
  3. For the Right: Le Pen vs. Mélenchon

Either Le Pen or Mélenchon as a final winner would be exceptionally distasteful to the EU.

Those are very possible outcomes. Mélenchon is a social media star like Trump. He also uses video games and holograms. The Financial Times reported Mélenchon was “the first French presidential candidate to do a speech by hologram, enabling him to talk to crowds in Lyon and Paris at the same time.” He has 260,000 You-Tube subscribers.

Instead of just having to worry about Le Pen, the EU can now worry about Mélenchon as well.


So what? we hear the American stock market investors cry… we are higher and so that’s what really matters, right?

Well here’s a reminder of the last 2 major votes…



Coptic Christians target in two bombings as 37 were killed.  ISIS again claims responsibility

(courtesy zero hedge)


Over 37 Killed In Two Coptic Christian Church Bombings In Egypt; ISIS Claims Responsibility

At least 37 people were killed and more than 100 injured in two separate bombings at Christian Coptic churches packed with worshippers in northern Egypt one week before Coptic Easter, Reuters reports.

The first bombing, in Tanta, a Nile Delta city less than 100 kilometers outside Cairo, killed at least 26 and injured at least 78, Egypt’s Ministry of Health said. The second, carried out just a few hours later by a suicide bomber in Alexandria, hit the historic seat of the Coptic Pope, killing 11, including three police officers, and injuring 35, the ministry added. In a separate explosion, one person has been reported killed in a bombing of the Tanta police academy.

Egyptians gather in front of a bombed Coptic church in Tanta, Egypt, April 9

Shortly after the explosions, ISIS via its al-Amaq news agency, claimed responsibility for the bombings.

The attacks are the latest in a series of assaults on Egypt’s Christian minority, which makes up around 10% of the population and has been repeatedly targeted by Islamic extremists. They come just one week before Coptic Easter and the same month Pope Francis is scheduled to visit Egypt. The deadly bombing take place as the Islamic State branch in Egypt appears to be stepping up attacks and threats against Christians.  In February, Christian families and students fled Egypt’s North Sinai province after a spate of targeted killings.

Those attacks came after one of the deadliest on Egypt’s Christian minority, when a suicide bomber hit its largest Coptic cathedral, killing at least 25. Islamic State later claimed responsibility for that attack too.

According to Reuters, CBC TV showed footage from inside the Tanta church, where a large number of people gathered around what appeared to be lifeless, bloody bodies covered with papers. Thousands gathered outside the church in Tanta shortly after the blast, some wearing black, crying, and describing a scene of carnage.

“There was blood all over the floor and body parts scattered,” said a Christian woman who was inside the church. “There was a huge explosion in the hall. Fire and smoke filled the room and the injuries were extremely severe,” another Christian woman, Vivian Fareeg, said.

President Abdel Fattah al-Sisi and Prime Minister Sherif Ismail are set to visit the Tanta site on Sunday and Sisi has ordered an emergency national defense council meeting, state news reported.

The spike in bombings marks a deadly shift in Islamic State’s tactics, “which has waged a low-level conflict for years in the Sinai peninsula against soldiers and police, to targeting Christian civilians and broadening its reach into Egypt’s mainland is a potential turning point in a country trying to prevent a provincial insurgency from spiraling into wider sectarian bloodshed.”

Egypt’s Christian community has felt increasingly insecure since Islamic State spread through Iraq and Syria in 2014, ruthlessly targeting religious minorities. In 2015, 21 Egyptian Christians working in Libya were killed by Islamic State.


“Of course we feel targeted, there was a bomb here about a week ago but it was dismantled. There’s no security,” said another Christian woman in Tanta referring to an attack earlier this month near a police training center that killed one policeman and injured 15..


Copts face regular attacks by Muslim neighbors, who burn their homes and churches in poor rural areas, usually in anger over an inter-faith romance or the construction of a church.

Pope Francis expressed his “deepest condolences” to all Egyptians and to the head of the Coptic Church during his Palm Sunday Mass before tens of thousands of people in St Peter’s Square. “I pray for the dead and the victims. May the Lord convert the hearts of people who sow terror, violence and death and even the hearts of those who produce and traffic in weapons,” he said.

In light of recent geopolitical developments, a military response from the US to the two bombings is likely.




Russia and Iran warn that if the USA undergoes a new aggression in Syria then they will respond in kind.

For those of you who did not understand why everybody is engaging in Syria it is the new proposed pipeline that is the central theme.  Russia who controls much of the oil and gas distribution through Europe want to build a pipeline from the south of Iran through Iraq then through Syria, Lebanon and then out through the Mediterranean to Europe.

The proposed USA route is to start at Doha (Qatar), through Saudi Arabia Syria, then to Turkey and onto Europe. The uSA wants to kill Russia’s business of supplying oil/gas to Europe.


(courtesy zero hedge)


Russia, Iran Warn U.S. They Will “Respond With Force” If Syria “Red Lines” Crossed Again

A statement issued on Sunday by a joint command centre consisting of forces of Russian, Iran and allied militia alliance supporting Syrian President Bashar al Assad said that Friday’s US strike on the Syrian air base crossed “red lines” and it would “respond with force” to any new aggression while increasing their level of support to their ally.

In the statement published by the group on media outlet Ilam al Harbi, the pro-Assad alliances says that “what America waged in an aggression on Syria is a crossing of red lines. From now on we will respond with force to any aggressor or any breach of red lines from whoever it is and America knows our ability to respond well.”

Earlier on Sunday the UK’s Defence Secretary, Sir Michael Fallon, demanded Russia rein in Mr Assad (by which he really meant be willing to accept a new Syrian regime with a pro-western puppet leader, and one who is willing to allow the Qatar gas pipeline to cross the country on its way to Europe.

Fallon also claimed that Moscow is “responsible for every civilian death” in the chemical attack on Khan Sheikhun and said Putin was responsible for the brutal killings “by proxy”, because it was the Syrian president’s “principal backer.” The defense minister said the attack had happened “on their watch” and that Vladimir Putin must now live up to previous promises that Mr Assad’s chemical weapons had been destroyed.  His comments came after Foreign Secretary Boris Johnson pulled out of a Moscow visit hours before he was due to fly.
* * *

Finally, for those who are unclear about the core geopolitical tensions that are at the base of the long-running Syrian proxy war, the answer is – as so often tends to be – commodities and specifically natural gas, as we first explained in 2013, and as summarized in the following October 2016 article courtesy of Eric Zuesse (see also “Competing Gas Pipelines Are Fueling The Syrian War & Migrant Crisis“)

The Oil-Gas War Over Syria (In 4 Maps)

Turkey’s Anadolu News Agency, though government-run, is providing remarkably clear and reliable diagrammatic descriptions of the current status of the U.S – and – fundamentalist – Sunni, versus Russia – and – Shia – and – NON – fundamentalist – Sunni, sides, in the current oil-and-gas war in the Middle East, for control over territory in Syria, for construction of oil-and-gas pipelines through Syria supplying fuel into the world’s largest energy-market: Europe. Russia is now the dominant supplier of both oil and gas, but its ally Iran is a Shiite gas-powerhouse that wants to share the market there, and Russia has no objection.

Qatar is a Sunni gas-powerhouse and wants to become the main supplier of gas there, and Saudi Arabia is a Sunni oil-powerhouse, which wants to become the major supplier of oil, but Saudi oil and Qatari gas would be pipelined through secular-controlled (Assad’s) Syria, and this is why the U.S. and its fundamentalist-Sunni allies, the Sauds, and Qataris, are using Al Qaeda and other jihadists to conquer enough of a strip through Syria so that U.S. companies such as Halliburton will be able safely to place pipelines there, to be marketed in Europe by U.S. firms such as Exxon. Iran also wants to pipeline its gas through Syria, and this is one reason why Iran is defending Syria’s government, against the U.S.-Saudi-Qatari-jihadist invasion, which is trying to overthrow and replace Assad.

Here are the most-informative of Anadolu’s war-maps:

The first presents the effort by many countries to eliminate ISIS control over the large Iraqi city of Mosul. A remarkably frank remark made in this map is “An escape corridor into Syria will be left for Daesh [ISIS] so they can vacate Mosul” – an admission that the U.S. – Saudi – Qatari team want the ISIS jihadists who are in Mosul to relocate into Syria to assist the U.S. – Saudi – Qatari effort there to overthrow and replace the Assad government: 


The second is about the Egyptian government’s trying to assist the Syrian government’s defense against the Saudi – U.S. – Qatari invasion of Syria, at Aleppo, where Syria’s Al Qaeda branch is trying to retain its current control over part of that large city. The Saud family are punishing the Egyptian government for that:



Here is Russia’s proposed gas-pipeline, which would enable Russia to reduce its dependence upon Ukraine (through which Russia currently pipes its gas into Europe). Obama conquered and took over Ukraine in February 2014 via his coup that overthrew the democratically elected neutralist Ukrainian President there:


In addition, there is the following map from oil-price.com:


That map shows the competing Shiia (Russia-backed) and Sunni (U.S.-backed) gas-pipelines into Europe — the central issue in the invasion and defense of Syria.

On 21 September 2016, Gareth Porter headlined “The War Against the Assad Regime Is Not a ‘Pipeline War’”, and he pointed out some errors in Robert F. Kennedy Jr.’s account that had been published under the headline “Syria: Another Pipeline War”. Porter argued: “It’s easy to understand why that explanation would be accepted by many anti-war activists: it is in line with the widely accepted theory that all the US wars in the Middle East have been ‘oil wars’ — about getting control of the petroleum resources of the region and denying them to America’s enemies.”

But the ‘pipeline war’ theory is based on false history and it represents a distraction from the real problem of US policy in the Middle East — the US war state’s determination to hold onto its military posture in the region. Porter ignored the key question there, as to why the US war state has a determination to hold onto its military posture in the region. Opening and protecting potential oil-gas-pipeline routes are important reasons why. Clearly, Kennedy’s documentation that the CIA was trying as early as 1949 to overthrow Syria’s secular government so as to allow to the Sauds a means of cheaply transporting their oil through Syria into Europe, remains unaffected by any of the objections that Porter raised to Kennedy’s article. The recent portion of Kennedy’s timeline is affected, but not his basic argument.

Furthermore, any military strategist knows that the US war state is intimately connected to the U.S. oil-and-gas industries, including pipelines (oilfield services) as well as marketing (Exxon etc.). And Porter got entirely wrong what that connection (which he ignored) actually consists of: it consists of U.S. government taxpayer-funded killers for those U.S. international corporations. Here is how Barack Obama put it, when addressing graduating cadets at West Point, America’s premier military-training institution:

Russia’s aggression toward former Soviet states unnerves capitals in Europe, while China’s economic rise and military reach worries its neighbors. From Brazil to India, rising middle classes compete with us, and governments seek a greater say in global forums. And even as developing nations embrace democracy and market economies, 24-hour news and social media makes it impossible to ignore the continuation of sectarian conflicts and failing states and popular uprisings that might have received only passing notice a generation ago.


It will be your generation’s task to respond to this new world. The question we face, the question each of you will face, is not whether America will lead, but how we will lead – not just to secure our peace and prosperity, but also extend peace and prosperity around the globe.

He was saying there that America’s military is in service to U.S.-based international corporations in their competition against those of Russia, Brazil, China, India, and anywhere else in which “rising middle classes compete with us”. Those places are what Gareth Porter referred to as “America’s enemies”.

Economic competitors are “enemies”. Obama thinks that way, and even a progressive journalist such as Porter doesn’t place into a skeptical single – quotation – mark – surround, the phrase ‘America’s enemies’ when that phrase is used in this equational context. On both the right (Obama) and the left (Porter), the equation of a government and of the international corporations that headquarter in its nation — the treatment of the military as being an enforcement-arm for the nation’s international corporations — is simply taken for granted, not questioned, not challenged.

RFK Jr. was correct, notwithstanding some recent timeline-errors. Syria is “Another Pipeline War”, and Obama is merely intensifying it. (On 9 November 2015, I offered a different account than RFK Jr. provided of the recent history — the Obama portion — of the longstanding U.S. aggression against Syria; and it links back to Jonathan Marshall’s excellent articles on that, and to other well-sourced articles, in addition to primary sources, none of which contradict RFK Jr.’s basic view, “Syria: Another Pipeline War”).

Another portion of Porter’s commentary is, however, quite accurate: America’s ‘Defense’ (or mass-killing-abroad) industries (such as Lockheed Martin) are not merely servants of the U.S. government, but are also served by the U.S. government: “the US war state’s determination to hold onto its military posture in the region” is protection of the major market — the Middle Eastern market — for U.S. ‘Defense’ products and services. It’s not only America’s firms in the oil, gas, and pipelines, industries, which benefit from America’s military; it is also America’s firms in the mass-killing industries, that do.

To the extent that the public (here including Barack Obama and Gareth Porter) do not condemn the presumption that “the business of America is business”, or that a valid function of U.S. – taxpayer – funded military and other foreign-affairs operations is to serve the stockholders of U.S. international corporations, the hell (such as in Syria) will continue. Gareth Porter got lost among the trees because he failed to see (and to point to) that forest.




A possible false flag?…Assad said to have used white phosphorus bombs (napalm) on the town of Idlib

(courtesy zero hedge/two commentaries/Sunday  and Monday)


ISIS Attacks US-Led Base In Southern Syria, As Assad Said To Use White Phosphorus

With the US now engaged in military conflict with, and targeting Syrian army forces, what the Trump administration has (un)wittingly done is provide support to Islamic State, al-Qaeda, and al-Nusra and other terrorist forces, all of which have been engaging with the Assad regime in a fight in which the Syrian president has gradually seen the tide of war turn in his favor. At least until last Friday’s US cruise missile attack that is.

Which is why it should probably come as no surprise that, emboldened by US actions, moments ago the WSJ reported that Islamic State militants attacked a US-led coalition base (at least we now have official confirmation that there are US military bases in Syria) in southern Syria on Saturday, “triggering a fierce fight that required coalition airstrikes to repel, U.S. military officials said Sunday.”

The complex attack began on Saturday when Islamic State fighters detonated a vehicle bomb at a base in al-Tanf, a town in southern Syria along the Jordan border used by American special operation forces and Syrian rebels working with the U.S. coalition, the officials said.


Between 20 and 30 Islamic State fighters, including some with suicide vests, then attacked the base, which is a staging ground and training facility for the U.S.-backed Syrian rebels.

As the WSJ adds, Coalition forces and Syrian rebels engaged in firefights with the attackers and then called in airstrikes to repel the attack, officials said.

Luckily, there was no word of any American fatalities in the attack, although next time the US forces on the ground may not be so lucky, and the resulting media storm would prompt a full reappraisal of Trump’s action which by weakening Assad implicitly and directly is boosting the relative strength of the Islamic State.

The Islamic State attack comes as the U.S. military is deepening its presence in Syria as part of an intensifying campaign to drive the extremist group from its de facto capital in Raqqa. For weeks, the U.S. military has been strengthening its presence along the Jordan-Syria border, according to U.S. and Jordanian officials.

* * *

Meanwhile, confirming that the US is not nearly close done bombing Assad, on Sunday the Qatar-owned (the country which at long last hopes to have its gas pipeline cross Syria to Europe) Al Jazeera, reported that Syrian jets have bombed the town of Idlib using White Phosphorus.

One almost wonders what must have gone through the head of the Al Jazeera producers when told to report on such a story.

One thing we can imagine, however, is sequence of thoughts inside Assad’s head: “Well, I just got bombed by the US and I will surely get bombed even more at even the slightest additional provocation that can be splashed across the front pages of western newspaper. So… yes, brilliant idea – I will use a banned, toxic substance – White Phosphorus – and hope it appears on all media channels around the developed world, just to make sure the next US airstrike aims right for my palace.”

Sure, why not.

Expect to hear much more about white phosphorus in the coming days: it will be the “catalyst” for the next round of Syrian airstrikes.



Assad Accused Of Dropping Incendiary Bombs In Idlib Days After US Strikes

When we reported on Sunday night that ISIS forces had attacked a US-led base on southern Syria, we also pointed out that according to an unconfirmed report by Al Jazeera, the Assad regime had used the banned substance of White Phosphorus to attack rebel forces in the town of Idlib.

We further said that it would be an odd action for Assad to take, knowing full well the eyes of the world would be on him, and once pictures of the deadly substance are splayed across the front pages of the world’s newspapers, it would only prompt further strikes against Assad, this time perhaps on a “decapitation” nature, focusing directly on Assad’s presidential palace. Finally, we predicted “expect to hear much more about white phosphorus in the coming days: it will be the “catalyst” for the next round of Syrian airstrikes.”

One day later, the white phosphorus is now, predictably, headline news, and we can add one more term to the pre-war dictionary: incendiary bombs, because that is what – at least according to the popular one-man propaganda operation run in the UK by Abdul Rahman, is what was used by Syrian or Russian warplanes in Syria over the weekend, just days after Trump launched 59 cruise missiles into Syria.

According to Reuters, which together with the gated Times of London picked up on the unconfirmed story, “Syrian or Russian warplanes dropped incendiary bombs on areas of Idlib and Hama provinces just days after a deadly gas attack in the region, activists and a monitoring group reported on Monday.”

Well, make that one monitoring group: the same one which back in 2013 was responsible for the creation of the original YouTube video showing the “false flag” sarin gas attack, and which – unlike in 2017 – failed to provoke a military attack by the Obama regime.

For more details on the Syrian Observatory for Human Rights and the man behind it, Abdul Rahman, read “Meet The Man Behind The Propaganda

In any case, the British-based Syrian Observatory for Human Rights – whose information gathering network is seemingly better than that of any other newswire in the region – said Russian jets had used an incendiary substance called thermite in bombs they dropped over the towns of Saraqeb in Idlib and al-Latamenah in Hama, further south, on Saturday and Sunday.

There were some discrepancies and conflicting narratives, as always happens in the early stages when a new propaganda narrative is set, but hey: white phosphorus, thermite bombs, it will all look the same on the front page of the USA Today at the end of the day.

Indeed, as Reuters notes, “a rescue worker in Saraqeb said warplanes had dropped phosphorus bombs there, but he had not heard of the use of thermite. He said use of phosphorus was not a new development. “It’s normal, these are often used,” said Laith Abdullah of the Syrian Civil Defence, also known as the White Helmets, a rescue group working in rebel-held areas.”

That’s ok, let’s assume both were used for real shock value: that will practically guarantee another military strike against Assad.  After all, that’s the whole point.

Videos posted on social media purportedly from Saraqeb on Sunday showed flaming materials hitting the ground and spreading large fires; and since by now it has become clear that any video of unknown origin is sufficient to serve a “proof”, the plot of the white phosphorus/incendiary bombs was immediately latched on to by those desperate to be in good standing with the mainstream narrative.

Meanwhile, the Observatory said thermite had first been used in the Syrian conflict in June 2016 by the Syrian government.

And just to make the even more “credible”, the objective “Observatory”, operating out of the UK, reported the Syrian warplanes allegedly deploying the thermite took off from the same air base less than a day after the U.S. attack and carried out air strikes on rebel-held areas.  Just in case the US really need an incentive for a follow up strike…

The new red line in the sand:  barrel bombs.
(courtesy zero hedge)


Trump is seriously weighing options for more sanctions against Russia even though there is no evidence whatsoever that Russia had anything to do with the chemical attack.  Actually there is no evidence at all that chemical weapons were stored at  the airport in Idlib Province

(courtesy zero hedge)

(courtesy zero hedge)

Russian Arrested In Spain Over Suspicion Of US Election Hacking

An alleged Russian hacker, Pyotr Levashov, has been detained in Barcelona at the request of the FBI, an arrest that set cybersecurity circles abuzz after a Russian broadcaster raised the possibility it was linked to the U.S. presidential election, AP reports. A spokeswoman for Spain’s National Court said that the Pyotr Levashov was arrested in response to a U.S. computer crimes warrant while a spokesman for the Russian embassy in Madrid confirmed the arrest on Sunday.

While it was not immediately clear why Levashov was arrested, Russian television station RT reported that Levashov was arrested under a U.S. international arrest warrant and was suspected of being involved in hacking attacks linked to alleged interference in last year’s U.S. election. Peter Carr, a spokesman for the U.S. Justice Department’s criminal division, said: “The U.S. case remains under seal, so we have no information to provide at this time.”

Defusing speculation that the arrest was in connection with the election hacking as some have suggested, Reuters reports that according to a U.S. Department of Justice official the arrest was a criminal matter without an apparent national security connection. Spanish authorities notified the Russian embassy of Levashov’s arrest on Friday, the embassy spokesman said.

The NYT adds that computer researchers who have linked the long-running computer spam business of the man known as Peter Severa to malware used in 2012 to influence a domestic election in Russia say his arrest could give other investigations important information. Levashov was arrested in Barcelona, where he had been vacationing with his family, according to a report on RT, a state-owned Russian television network. The report cited his wife, who said the Spanish police had detained Mr. Levashov at the request of the American authorities. Levashov’s wife Maria was quoted by RT as saying that her husband was arrested by armed police at their apartment in Barcelona. She said her husband told her he had been accused of creating a computer virus “linked to (President Donald) Trump’s election win.”

Spamhaus, a group that tracks spammers, has for years listed Peter Severa as among the top 10 perpetrators in the world, and has identified him as Mr. Levashov. Brian Krebs, an American cybersecurity researcher, wrote in 2012 that Peter Severa could be another Russian man, Viktor Ivashov, and not Mr. Levashov.


The Russian name Peter Severa, which translates roughly as Peter of the North, could refer to Mr. Levashov’s hometown, St. Petersburg, or Peter North, an actor in pornographic films, in a reference to the online pornography businesses. Along with sending spam advertising, according to Spamhaus, Peter Severa worked with Alan Ralsky, an American spam operator who was convicted in the United States of fraud.


The Russian cybersecurity researchers Andrei Soldatov and Irina Borogan wrote in 2012 that participants in online Russian hacker forums were discussing whether Peter Severa had been recruited by the F.S.B., the successor to the K.G.B. The researchers said Peter Severa had been on closed chat sites trying to recruit underground hackers for a later abandoned effort by the Russian security services to crash Islamic extremist websites.

Peter Severa’s spam operation ran a sophisticated, evolving family of computer viruses called Waledac and later Kelihos, developed in part by a former military engineer also living in St. Petersburg named Andrei N. Sabelnikov, according to a 2012 American court filing by Microsoft.

The court filing and related forensic work on the Kelihos virus illustrated how criminal hacker tools are repurposed for political ends. The filing identified Mr. Sabelnikov as the designer of the Kelihos virus.


The Kelihos virus, which had been devised to spread spam, was used during the Russian election in 2012 to send political messages to email accounts on computers with Russian I.P. addresses. The emails linked to fake news stories saying that Mikhail D. Prokhorov, the businessman running for president against Vladimir V. Putin, had come out as gay.

Even if Levashov’s arrest is linked to the alleged US election hacking, it may come at an awkward moment, just as Trump’s foreign policy U-turn stands to alienate the Kremlin, and bring any “detente” momentum between DC and Moscow to a grinding halt. It is also unclear how “hacking” via spam may have influenced potential voters’ choices.

In January, Spanish police arrested another Russian computer programmer, whose name was given as “Lisov” and who was wanted by the United States for leading a financial fraud network.




Sweden is out of control with respect to their migrants:

(courtesy zero hedge)

Swedish Police Pelted With Rocks While Arresting Terror Suspect In Migrant “No-Go Zone”

On Friday, Sweden became the latest European target of terrorism after a man plowed a hijacked beer delivery truck into a crowd in central Stockholm, killing five people and wounding more than a dozen (we covered the situation here:  “Swedish Police In Manhunt For Terrorist Truck Driver Who Killed Five“).

And while such attacks typically tend to unify populations in the common goal of hunting down, capturing and punishing the responsible assailants, that sense of camaraderie apparently doesn’t apply in Sweden’s so-called “no-go zones” which have become home to 1,000’s of migrants flooding into Europe from Syria and elsewhere in the Middle East and Africa.

According to the Daily Mail, rather than help police arresting a suspect in Friday’s horrendous attack, migrant residents of the suburb of Rinkeby apparently decided instead to pelt the arresting officers with rocks.

Police officers responding to the Stockholm terror atrocity were attacked by a gang of youths who pelted them with stones last night, Swedish policemen have said.


The attack happened last night near Rinkeby, part of the ‘immigrant no-go zone’ that gained notoriety when President Trump referred to it in a controversial speech in February.


It is thought that the officers were taking part in an operation to arrest a 17-year-old and his mother at an address linked to the 39-year-old prime suspect.

Meanwhile the attack was confirmed by Abdallah Ahmed via social media:

‘During the night my colleagues were exposed to stone throwing in [the suburb of] Tensta, in the middle of an ongoing terror operation.


‘Some people will never learn,’ Abdallah Ahmed, a police officer, said in a social media post.


‘To terror I want to say one thing, in pure Swedish: go to hell. My thoughts go to those affected in every way.’



Of course, Rinkeby is the Swedish town that drew international attention back in February after Trump highlighted it as a prime example of the unintended consequences of allowing 100,000s of migrants to flow into Europe.  In light of Trump’s comments, independent journalist Tim Pool decided to head to Stockholm for a first-hand look at the “crime-ridden migrant suburb” of Rinkeby.  Unfortunately, upon arrival Pool didn’t get to do much investigating before arousing the suspicion of a couple of masked men who proceeded to follow him through the streets eventually leading to his prompt police escort out of the city out of fear for his crew’s safety.

Pool sent out the following tweets about the incident saying that around 2:30 in the afternoon “several men started masking up” and following his crew which prompted the police to escort his team out of town with the warning that “it would get really dangerous if we don’t leave Rinkeby.”

In Rinkeby, 2:30 PM, several men started masking up and following us. Police told us to leave and had to escort us to our car.

We weren’t filming anyone, we were just talking to police. They started getting nervous as men started masking up around us.

This ’60 Minutes’ crew got a similarly “warm welcome” from a couple of migrants when they visited Sweden on February 19th with the express goal of discrediting Trump’s comments.


In conclusion:

Give the public a break – The FAKE NEWS media is trying to say that large scale immigration in Sweden is working out just beautifully. NOT!





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



GBP/USA 1.23999 UP .0035 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED


Early THIS MONDAY morning in Europe, the Euro FELL by 15 basis points, trading now BELOW the important 1.08 level  FALLING to 1.0628; 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  DOWN17.22 POINTS OR 0.52%    / Hang Sang  CLOSED DOWN 5.12 POINTS OR .02%/AUSTRALIA  CLOSED UP 0.78%  / EUROPEAN BOURSES : ALL IN THE  RED  

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

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

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

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

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

The NIKKEI: this MONDAY morning CLOSED UP 133.25POINTS OR 0.71%

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


Gold very early morning trading: $1250.40


Early MONDAY morning USA 10 year bond yield: 2.384% !!! PAR IN POINTS from FRIDAY 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  3.007, PAR  IN BASIS POINTS  from FRIDAY night.

USA dollar index early MONDAY morning: 101.24 UP 6  CENT(S) from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING


And now your closing MONDAY NUMBERS

Portuguese 10 year bond yield: 3.82%  DOWN 4  in basis point yield from FRIDAY 

JAPANESE BOND YIELD: +.059%  DOWN 2/10  in   basis point yield from FRIDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.6130%  DOWN 1/10 IN basis point yield from FRIDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.241 UP 2 POINTS  in basis point yield from FRIDAY 

the Italian 10 yr bond yield is trading 63 points HIGHER than Spain.





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

Euro/USA 1.0603 UP .0015 (Euro UP 15 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110.97 DOWN: 0.117(Yen UP 12 basis points/ 

Great Britain/USA 1.2419 UP 0.0055( POUND UP 55 basis points)

USA/Canada 1.3354 DOWN 0.0017(Canadian dollar UP 17 basis points AS OIL ROSE TO $52.91


This afternoon, the Euro was UP by 15 basis points to trade at 1.0605


The POUND ROSE BY 55  basis points, trading at 1.2419/

The Canadian dollar ROSE by 17 basis points to 1.3354,  WITH WTI OIL RISING TO :  $52.91

The USA/Yuan closed at 6.8997/
the 10 yr Japanese bond yield closed at +.059% DOWN 2/10 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 1  IN basis points from FRIDAY at 2.348% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.975  PAR  in basis points on the day /

Your closing USA dollar index, 100.97 DOWN 21  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 MONDAY: 1:00 PM EST

London:  CLOSED DOWN 0.43 OR 0.01% 
German Dax :CLOSED DOWN 24.54  POINTS OR 0.20%
Paris Cac  CLOSED DOWN 27.83 OR 0.54%
Italian MIB: CLOSED DOWN  98.01 POINTS OR 0.48%

The Dow closed UP 1.92 OR 0.01%

NASDAQ WAS closed UP 3.11 POINTS OR 0.03%  4.00 PM EST
WTI Oil price;  52.91 at 1:00 pm; 

Brent Oil: 55.76  1:00 EST




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

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


BRENT: $56.00


USA 30 YR BOND YIELD: 2.997%



USA DOLLAR INDEX: 101.03  DOWN 15  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2415 : UP .0051  OR 51 BASIS POINTS.

Canadian dollar: 1.3322  DOWN .0051 (CAN DOLLAR UP 51 BASIS PTS)

German 10 yr bond yield at 5 pm: +.207%


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


Dow Clings To 1 Point Gain As VIX Term Structure, T-Bill Curve Both Invert



China-Korea headlines spooked stocks just before lunch but desperation kept The Dow green by 1 point!!


VIX pushed above 14 into the close…


The Dow remains above its 50DMA…


Stocks ignored the drop in the USD and Bond Yields…


Financials lagged as oil gains led Energy stocks higher…


It seems markets are – for now – ignoring the VIX term structure inversion around the French elections…

And the T-Bill curve inversion over government shutdown concerns…


Treasuries were flat overnight but bid during the EU session to end the day down around 2bps (and modestly flatter)…


30Y Yields dropped back below 3.00%


After Friday’s sudden spike on massive volume in the EDz7/EDz8 ‘reflation’ trade spread, today was very quiet…


The Bloomberg Dollar Index drifted into the red today – dragged by strength in Cable and the Loonie…


USDJPY dropped back below 111.00…


Gold is holding positive post-Airstrikes and crude is surging as copper fades…


Crude is at 1-month highs and gold is holding above $1250…


Of course, there’s good reason for the bounce in stocks… well supported by fundamentals…

Oh wait…


An extremely important paper by Pater Tenebrarum.  You will recall that immediately after the release of the FOMC report, gold shot up despite the hawkish tones. On Friday, NY President Dudley was forced out of hibernation to say that the markets got it wrong.  Tenebraum states that the markets did not get it wrong.  They were reacting to the possibility that the Fed will not purchase bonds when bonds come due.  This is the same as a reverse QE and the resulting removal of excess liquidity. Actually when the USA raised interest rates, this is somewhat removing liquidity and for the past two years, gold has been the beneficiary.


a must read.

(courtesy Pater Tenebrarum/ Acting Man.com)

Strange Moves In Gold, Federal Reserve Policy, And Fundamentals

Authored by Pater Tenebrarum via Acting-Man.com,

Counterintuitive Moves

Something odd happened late in the day in Wednesday’s trading session, which prompted a number of people to mail in comments or ask a question or two. Since we have discussed this issue previously, we decided this was a good opportunity to briefly elaborate on the topic again in these pages.

A strong ADP jobs report for March was released on Wednesday, and the gold price dutifully declined ahead of it already, while the stock market surged concurrently. Later in the day, the Fed minutes were published, and their tone was definitely seen as very “hawkish”, at least by today’s standards.


Strange happenings alert!

There was quite a bit of talk about rate hikes and  – gasp! – even about ending reinvestment of funds the Fed receives when debt securities in its QE portfolio mature. The merry pranksters also bemoaned the egregious bubble their own policies have given birth to.

According to Reuters:

Most Federal Reserve policymakers think the U.S. central bank should take steps to begin trimming its $4.5 trillion balance sheet this year as long as the economic data holds up, Fed meeting minutes showed.


The minutes also showed some participants viewed equity prices as quite high relative to standard valuation measures.” [duh…]

(emphasis added)

Here is a 15 minute candle chart encompassing Wednesday’s intra-day moves in June gold futures:

June gold futures, 15 minute candles. After at first declining in anticipation of a strong ADP report and hawkish Fed minutes, gold rebounded when said minutes were released – and actually sounded even more hawkish than expected – click to enlarge.


Talk about “balance sheet normalization” – with the added twist that “most” committee members seemed to think it was an idea whose time had come – apparently was indeed a bit of a surprise to market participants, who probably (and quite reasonably) assumed it would never happen. Not surprisingly, they have already gotten over the “shock” as of Thursday’s trading, but in this case, their initial reaction actually made sense.


An Endangered Bubble and Discounting the Future

What will happen, if the Fed actually allows its balance sheet to shrink by no longer reinvesting money it receives for maturing securities? Unless inflationary bank credit expands at a faster rate than the repayments, this will invariably result in shrinking the money supply. Essentially, it would be a reversal of QEa part of the deposit money created by debt monetization would return to where it originally came from, namely thin air.

You have one guess what will happen to “risk assets” if and when free excess liquidity in the system begins to evaporate. Here is a hint: it will be time to wave good-bye to the bubble. Stock market traders actually had the right idea on Wednesday afternoon:


S&P 500 intra-day – the Fed minutes triggered a brief moment of quite apposite bubble doubt – click to enlarge.


Before we continue, we want to stress that we are using Wednesday’s odd market moves merely as an opportunity to illustrate an important point – we are well aware that one-day moves are usually meaningless and best categorized as “noise”. Nevertheless, these moves in a way provided an illustration of an effect of longer term relevance.

We have discussed said effect a few times in these pages before. Recall that back in 2014 – 2015, assorted Fed heads were talking incessantly about impending rate hikes, which they then kept postponing over and over again. At the same time, a whole host of gold bears in the mainstream financial media never tired of reminding everyone of the merciless decimation that was certain to be inflicted on the gold price once the Fed actually did hike rates.

Long time readers may also remember that we said to this: bring it on! Luckily they finally did bring it on in December of 2015. One day after the first rate hike, we published a final, extensive debunking of the claims made by the afore-mentioned authors with respect to gold and Fed policy in an article appropriately entitled “Gold and the Federal Funds Rate”.

As it turned out, the first rate hike coincided almost to the day with what was so far the post-2011 correction low in the USD gold price (gold bottomed much earlier in other currencies). Not only that – gold has rallied by almost 20% since then. We haven’t heard back yet from Mr. and Mrs. Pet Rock (generic name for the flood of “gold experts” no-one had ever heard of before who suddenly flooded the pages of Bloomberg, the FT, the WSJ, etc., throughout 2015).


Gold, weekly – the first rate hike so far marked the end of the bear market that started in late 2011  – click to enlarge.


To this one must consider what happens when the threat of the markets losing excess liquidity becomes manifest. Gold is potentially the greatest beneficiary of such a development (treasury bonds may benefit as well to some extent). That may indeed appear counter-intuitive at first glance… after all, higher interest rates and weaker money supply growth are traditionally held to be negative for gold.

Indeed, they are – however, it is important to look at the situation holistically and consider potential leads and lags. Traditionally the gold market is one of the  markets that are most sensitive to changes in the liquidity backdrop. It often (but not always) also looks ahead the farthest.

In other words, it is not necessarily always reacting to what is happening right now, or in the near future – at times it is discounting future events long before they happen.

Below is a recent chart by Dr. Frank Shostak of AASE showing the rate of change in the US money supply measure AMS (adjusted money supply). This is essentially a narrow version of the broad money supply TMS-2, which excludes savings deposits. That makes it more volatile than TMS-2, but it is nevertheless a quite useful measure of the money supply.


A swift collapse in the y/y growth rate of money AMS to levels last seen in 2007 – i.e., right around the time when the last bubble peaked – click to enlarge.


It may still take a while for the effects of the slowdown in money supply growth to take hold – as can be seen above, the 12-month moving average remains fairly elevated, and there is always a considerable lag between a slowdown in money supply growth and declines in asset prices and a slowdown in economic activity.

Still, we consider this chart to be the biggest warning sign for “risk assets” since the beginning of the stock market rally in early 2009.


Asymmetric Central Bank Policy

If and when free liquidity is choked off to a sufficient extent, the bubble in risk assets is definitely going to stumble. What will happen when this enormous bubble bursts? Our guess is that the entire financial and economic system will once again find itself on the very brink.

Perhaps banks will weather a systemic seizure better this time around, as a much larger percentage of their deposit liabilities consists of covered money substitutes due to QE. Moreover, they have taken quite a few measures to bolster their capital – but that is a bridge we will cross when we get there. What is important with respect to gold is this:

Gold is an asset that isn’t offset by a corresponding liability, i.e., it is not dependent on any counter-party promises.  Thus it becomes the go-to asset in times of systemic crisis. In terms of discounting the future, it also reflects the inevitable response of central banks to a bursting bubble. Keep in mind that the tightening of policy that puts an end to the further expansion of an asset bubble and the subsequent reopening of the liquidity spigots are always asymmetric.

When Paul Volcker tightened policy in 1979 to 1981, the true money supply fell by a small percentage in 1981 – but it expanded by nearly 50% y/y in 1982 after he began to lower rates. In fact, it doesn’t matter which period of tightening one compares with the subsequent period of loose monetary policy – the asymmetry is glaringly obvious every time.



Once central banks try to arrest a decline in asset prices and a contraction in aggregate economic activity, a great many of the fundamental drivers of the gold price that look neutral or even bearish at the moment will turn unequivocally bullish.

We can probably assume that market participants have learned from the experiences of the past two decades – which means that an early discounting of such future developments has become much more likely (whereas they were quite slow in responding to an obvious improvement in gold’s fundamentals in 2000– 2001).

That may also explain why the market-based measure of the “fundamental gold price” calculated by our friend Keith Weiner is currently at a far higher level than one would normally expect if one were to solely look at the macro-economic gold price drivers. What his indicator is essentially telling us is that someone is busy accumulating physical gold in the market place (reservation demand for bullion has presumably increased as well) in spite of the fact that the macro-economic fundamentals are not yet bullishly aligned.

Some market participants are probably taking out insurance against a variety of potential negative outcomes (even an unexpected surge in price inflation may be on the list of things that require guarding against). We happen to believe that the are likely to constitute what is generally known as “smart money”.





Odds of a shutdown are increasing

(courtesy zero hedge)


Government Shutdown Odds Are Rising, Goldman Warns

Having been quite confident that Trump would be able to pass some form of Tax reform as recently as two weeks ago, Goldman’s Washington analyst, Alec Phillips, is turning increasingly more pessimistic on the prospects that Trump’s economic agenda will gain traction in Congress, especially now that attention has seemingly shifted to Trump’s bombing policies in Syria (and perhaps North Korea in the not too distant future).

In a note over the weekend, the Goldman strategist writes that “following the failure to pass the American Health Care Act (AHCA), which would repeal the Medicaid expansion and tax hikes enacted in the Affordable Care Act (ACA) and reduce the tax subsidies for health insurance under that law, Republican leaders in the House have struggled to develop an alternative health proposal that might find enough support to pass. At this point, it still appears possible that the House could pass a revised version of the bill at some point in May. However, the compromises that might be made in the House to gain support are apt to reduce support in the Senate, and the process in that chamber would take much longer than even the drawn out House process, in our view.”

He also observes that lawmakers and market participants have refocused their attention on tax reform, “though a number of other issues are likely to delay activity on tax legislation for another several weeks.” This includes another potential attempt to pass health legislation, the possibility of a government shutdown, a debt limit deadline later this year, and geopolitical developments.

Which brings us to the key topc: the prospect of a government shutdown in less than three weeks. This is what Phillips says when discussing the risks of a government shutdown on April 29.

Congressional appropriations expire April 28. If Congress does not pass an extension, the federal government will partially shut down. The economic consequences of a short shutdown are minor, since lost federal pay is usually made up retroactively and government procurement and private sector activity would be largely unaffected.


However, a shutdown would send  another signal to markets that Republicans may not be able to enact their agenda, lowering expectations for tax reform and an infrastructure program.

We believe Congress is more likely to meet the deadline, but see a one in three chance of a shutdown.


The “freedom caucus” in the House may be unwilling to vote for a spending bill, denying Republicans a majority without Democratic votes. However, Democrats might be unwilling to provide those votes as they often have in the past, in light of the decision to change Senate rules to confirm Neil Gorsuch to the Supreme Court over Democratic opposition.


That said, there is not yet a clear issue Democrats are likely to point to in defense of a shutdown, as Republicans did in the 2013 shutdown when they demanded that Obamacare be defunded. If such an issue emerges—Republican leaders have already indicated they plan to keep funding for the border wall out of the bill to avoid such an issue—then the odds of a shutdown would rise considerably.

Amusingly, Goldman observes that Trump’s escalation of the Syrian conflict may actually be a positive factor, reducing the odds of a shutdown.

We also note that a shutdown might be slightly less likely in light of the conflict with Syria, since a failure to extend spending authority would affect the Department of Defense in addition to domestic agencies, and some lawmakers might support the spending bill for that reason.

So now that even Goldman admits that the odds of a government shutdown are rising (two weeks ago Deutsche Bank calculated that government shutdown odds had risen to a roughly similar 40%), here is what readers “need to know” about the threat of a potential government shutdown according to Bloomberg:

  • As Congress works to fund the government for the second half of FY2017, investors are weighing the possibility of a partial government shutdown if lawmakers fail to reach an agreement by April 28.
  • President Trump has asked for about $30b in emergency spending for defense, along with $18b in cuts to non-defense spending
  • Oklahoma Rep. Tom Cole said appropriations will ignore the $18b in cuts as they negotiate the omnibus bill and a supplemental
  • Gridlock in Washington could slow pro-business reforms so much that markets would “effectively price them out,” BMO strategists Ian Lyngen and Aaron Kohli wrote March 28; they said a government shutdown would be bullish for USTs, risk- off assets


  • The second continuing resolution for the FY2017 budget expires April 28; Congress needs to pass a spending bill or continuing resolution (CR) to fund the government for the second half of the FY
  • Congress passed the first CR Sept. 28, which extended funding at previous year’s levels through Dec. 9. Congress is in recess starting this week and returns the week of April 24, leaving just 4 days to cobble a deal.


  • A (partial) government shutdown along lines of 2013; federal government workers are furloughed if their agency is part of the annual appropriations process, according to the U.S. Office of Personnel Management
  • During the 2013 shutdown, some government economic data releases were postponed and rescheduled
  • The October jobs report was delayed until Nov. 8 due to the 16-day impasse in 2013. The report was originally slated for Nov. 1
  • The Fed, which isn’t funded via congressional appropriations, released meeting minutes as scheduled during the 2013 shutdown


  • Debt ceiling is a non-issue; since Treasury reinstated the debt limit on March 15, it has employed extraordinary measures to extend its borrowing authority through September/October
  • In 2013, the debt ceiling drop-dead date coincided with the shutdown, which created more uncertainty


  • TD strategists led by Priya Misra suggest a government shutdown may be negative for risk assets as it’s likely markets would price in lower odds of tax reforms being enacted in 2017
  • In September 2013, equities dropped heading into the shutdown, then rose when a resolution appeared imminent.
  • Spending negotiations “may bring continued volatility,” but unlikely to drive UST gains as odds of a shutdown are low, JPMorgan strategists led by Jay Barry said in March 29 note.
  • 10Y yields fell by about 37bps to 2.62% in the month leading up to the 2013 shutdown, then rose to 2.73% by Oct. 15.
  • Treasury bills may react more to cut in seasonal supply after the tax deadline, not the shutdown, Nomura strategists led by George Goncalves said March 31
  • Rates on 1-month securities surged to 0.36%, then the highest levels since the financial crisis.





Michael Snyder weighs in on the above Government shutdown crisis.  He believes that there cannot be a deal as he concurs with David Stockman

(courtesy Michael Snyder/EconomicCollapseBlog)

The Debt Crisis Of 2017: Once Their Vacation Ends, Congress Will Have 4 Days To Avoid A Government Shutdown On April 29

By Michael Snyder, on April 9th, 2017

April 2017 could turn out to be one of the most important months in U.S. history that we have seen in a very long time. On April 6th, Donald Trump attacked Syria on the 100th anniversary of the day that the U.S. officially entered World War I, and now at the end of this month we could be facing an unprecedented political crisis in Washington. On Friday, members of Congress left town for their two week “Easter vacation”, and they won’t resume work until April 25th. What this means is that Congress will have precisely four days when they get back to pass a bill to fund government operations or there will be a government shutdown starting on April 29th.

Up to this point, there has been very little urgency by either party to move a spending bill forward. It is almost as if everyone is already resigned to the fact that a government shutdown will happen. The Democrats will greatly benefit from a government shutdown because they can just blame the entire mess on the Republicans. But for the GOP, this is essentially the equivalent of political malpractice.

To me, there is simply no way that Congress is going to be able to agree on a bill that funds the entire government in just four days. And it turns out that this upcoming deadline comes exactly on the 100th day of Trump’s presidency

The U.S. government is poised to shut down on Day 100 of Donald Trump’s presidency, unless Congress can pass a new spending bill or a continuing resolution before the current one expires on April 28.

Since Congress is currently on a two-week recess, there will be a sense of urgency to get a new bill passed once they reconvene on April 25. Leaders in both chambers would have four days to craft a new proposal that each side can agree on and get it on the president’s desk for Trump to sign.

If the Republicans control the White House, the Senate and the House of Representatives, why will it be so difficult to get an agreement on a spending bill?

Well, first of all, look at how difficult it was for the Republicans to agree on a bill to repeal and replace Obamacare. At this point, it doesn’t look like that is going to happen at all.

More importantly, any bill to fund the government is going to require 60 votes in the Senate. The “nuclear option” that the Republicans just used to push the Gorsuch Supreme Court nomination through is not available in this case under current Senate rules because a spending bill of this nature would not qualify.

So the Democrats have leverage, and they plan to use it to the maximum. Senate Minority Leader Chuck Schumer is already promising to block any spending bill that includes funds for a border wall or that defunds Planned Parenthood

The threat from Senate Minority Leader Chuck Schumer and other Democratic leaders sets up a climactic first showdown with the president, particularly with their inclusion of Trump’s signature border wall proposal.

“If Republicans insist on inserting poison pill riders such as defunding Planned Parenthood, building a border wall, or starting a deportation force, they will be shutting down the government and delivering a severe blow to our economy,” Schumer said in a statement.

Up until now, Trump hasn’t needed Democratic votes to stock his cabinet or advance the repeal of Obamacare, but a spending bill keeping the government open is subject to a 60-vote threshold in the Senate.

Do you understand what this means?

President Trump is going to be under an immense amount of pressure to end the government shutdown once it begins, but to do so will mean that he has to give up his goal of getting a border wall.

Do you think that Trump will just throw in the towel and forget about his beloved border wall after giving countless speeches promising one?

It is a game of chicken between Trump and the Democrats, and I don’t think that either side will give in easily.

Of even greater importance is the debate over the funding of Planned Parenthood.

There are members of the Freedom Caucus that will absolutely not vote for any spending bill that includes funding for Planned Parenthood. But without the Freedom Caucus, there aren’t enough Republican votes to get a spending bill through the House of Representatives.

Alternatively, Senate Minority Leader Chuck Schumer is vowing that his party will block any funding bill that attempts to defund Planned Parenthood in the Senate.

If Planned Parenthood is not defunded now, it never will be defunded. This is one of the most pivotal moments in recent U.S. political history, and the outcome is going to have extraordinary consequences for our nation.

For those that are optimistic that there will not be a government shutdown, do you actually expect me to believe that this battle over the funding of Planned Parenthood will somehow get resolved in just four days?

Give me a break.

And of course there are dozens of other major issues that have to be resolved as well. For example, Senator McCain is promising note to vote for any bill unless it includes an enormous increase in military spending, while many Senate Democrats would be very much against such a move.

I don’t see any way that a government shutdown is going to be avoided at this point, and the longer it goes on the more financial markets are going to get rattled.

Meanwhile, we continue to get even more signs that a substantial slowdown has begun for the U.S. economy. Last week, we learned that only 98,000 jobs were added in March, and that was only about half of what most analysts were expecting.

And since it takes approximately 150,000 jobs a month just to keep up with population growth, that means that we are losing ground.

At the same time, the Atlanta Fed’s GDPNow forecasting model is now projecting that U.S. GDP growth for the first quarter of 2017 will be just 0.6 percent on an annualized basis.

That is absolutely pathetic, and as I have said before, I wouldn’t be surprised at all if we actually end up with a negative number for the first quarter.

If we do indeed get a negative number for the first quarter and that is followed by another negative number for the second quarter, that will mean that a new recession has already started right now but we just haven’t gotten official confirmation yet.

And lots of other things are already happening which have not happened since the last recession. For instance, this is the first time since the last financial crisis when there has been no growth for commercial and industrial lending for at least six months.

In addition, commercial bankruptcies spiked during the last recession, and now it is happening again

Commercial bankruptcy filings, from corporations to sole proprietorships, spiked 28% in March from February, the largest month-to-month move in the data series of the American Bankruptcy Institute going back to 2012.

Of course consumer bankruptcies are rising at an alarming rate as well. The following comes from Wolf Richter

In December, bankruptcy filings rose 4.5% from a year earlier. In January they rose 5.4%. It was the first time consumer bankruptcies rose back-to-back since 2010. I called it “a red flag that’ll be highlighted only afterwards as a turning point.”

In March, consumer bankruptcy filings rose 4% year-over-year, to 77,900, the highest since March 2015, when 79,000 filings occurred, according to the American Bankruptcy Institute data. The turning point has now been confirmed.

If you would like, I could keep talking about the bad economic news for a couple thousand more words. U.S. credit card debt has just surpassed the one trillion dollar mark, a major crisis has arrived for the U.S. auto industry, thousands of retail stores are closing all over America, our pension funds are underfunded by trillions of dollars, and the U.S. national debt is now sitting at a grand total that is just shy of 20 trillion dollars. The only reason that we have not crossed that 20 trillion dollar mark yet is because the debt ceiling deadline has already passed, and that is another thing that Congress needs to address very quickly if they want to avoid a major crisis.

Needless to say, the last thing that we need at this point is another war or two on top of everything else.

Unfortunately, a U.S. aircraft carrier strike group headed by the USS Carl Vinson is heading toward North Korea right at this moment, and Russia and Iran are promising to “respond with force” to any new U.S. attacks on Syria. I will be writing quite a bit more about all of this on End Of The American Dream later today.

Those that were hoping for some sort of “reprieve” under Donald Trump can forget all about that now. The pace of global events is really starting to accelerate, and the U.S. is already in a more precarious position than it was at any point in 2016.

The clouds have been building for a very long time, and now the storm is almost upon us. I hope that you have been getting prepared, because a day of reckoning for the United States of America is closing in very rapidly.

US Ambassador to the UN Nikki Haley, changes her tune to a “regime change in Syria” as a “top priority” for President Trump.  This no doubt will lead to a conflict with Russia(courtesy zero hedge)

US Ambassador To UN: “Regime Change In Syria Is Now A Top Priority For Trump”

The US ambassador to the United Nations, Nikki Haley, who has done a remarkable job of continuing the diplomatic tone set by her predecessor Samantha Power, said in an interview on CNN’s “State of the Union” which will air in full on Sunday, that regime change in Syria as one of the Trump administration’s top priorities in SyriaHer statement was a complete U-turn from what she said just over a week ago, when she told a group of reporters that the US was “no longer focused on getting Assad out.”

In her CNN interview, Haley also said that defeating the Islamic State, pushing Iranian influence out of Syria, and the ouster of Syrian President Bashar al-Assad are top priorities for Washington.

“There’s not any sort of option where a political solution is going to happen with Assad at the head of the regime,” Haley told CNN anchor Jake Tapper. “If you look at his actions, if you look at the situation, it’s going to be hard to see a government that’s peaceful and stable with Assad.”

“We don’t see a peaceful Syria with Assad in there,” Haley added.

Haley’s remarks come just a day after she warned that the United States was prepared to take further actions in Syria during a special session at the UN following a US military strike against a Syrian air base. “The United States took a very measured step last night,” Haley said at the UN special session Friday. “We are prepared to do more. But we hope that will not be necessary. It is time for all civilized nations to stop the horrors that are taking place in Syria and demand a political solution.”

Contrast this with what she said on March 30:

“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,” Haley had told reporters on March 30, just days before dozens of Syrian civilians died from chemical weapons injuries.

Playing the “good cop”, and appearing to take a more patient stance regarding Assad, Secretary of State Rex Tillerson said on Saturday that Washington’s first priority is the defeat of Islamic State. Once the threat from Islamic State has been reduced or eliminated, “I think we can turn our attention directly to stabilizing the situation in Syria,” Tillerson said in excerpts from an interview on CBS’s “Face the Nation,” that will air in full on Sunday.

Quoted by Reuters, Tillerson said the United States is hopeful it can help bring parties together to begin the process of hammering out a political solution. “If we can achieve ceasefires in zones of stabilization in Syria, then I believe – we hope we will have the conditions to begin a useful political process,” Tillerson said.

Speaking on ABC’s This Week on Sunday, Tillerson took a similar conciliatory approach toward North Korea, saying that a regime change of the country’s leader Kim Jong-Un is also not a US objective.

Tillerson said that while the U.S. wants a denuclearized Korean peninsula, it has “no objective to change the regime in North Korea.” When asked about reports the US would consider killing Kim Jong Un, Tillerson said “I am aware of no such plans.”

Meanwhile, the USS Vinson carrier group is currently en route toward the Korean peninsula.



Wolf Richter comments on the huge rise in personal and commercial bankruptcies in the USA in the month of March

(courtesy WolfRichter/WolfStreet)


Great Debt Unwind: Personal And Commercial Bankruptcies Surge In March

Authored by Wolf Richter via Wolf Street,

Commercial bankruptcy filings, from corporations to sole proprietorships, spiked 28% in March from February, the largest month-to-month move in the data series of the American Bankruptcy Institute going back to 2012.They’re up 8% year-over-year. Over the past 24 months, they soared 37%! At 3,658, they’re at the highest level for any March since 2013.

Commercial bankruptcy filings skyrocketed during the Financial Crisis and peaked in March 2010 at 9,004. Then they fell sharply until they reached their low point in October 2015. November 2015 was the turning point, when for the first time since March 2010, commercial bankruptcy filings rose year-over-year.

Bankruptcy filings are highly seasonal, reaching their annual lows in December and January. Then they rise into tax season, peak in March or April, and zigzag lower for the remainder of the year. The data is not seasonally or otherwise adjusted – one of the raw and unvarnished measures of how businesses are faring in the economy.

Note that there is no “plateauing” in this chart: since the low-point in September 2015, commercial bankruptcies have soared 65%! That red spike is the mega-increase in March:


At first, they blamed the oil bust. The price of oil began to collapse in mid-2014. By 2015, worried bankers put their hands on the money spigot, and a number of companies in that sector, along with their suppliers and contractors, threw in the towel and started filing for bankruptcy protection. But now the price of oil has somewhat recovered, banks have reopened the spigot, Wall Street has once again the hots for the sector, new money is gushing into it, and oil & gas bankruptcy filings have abated.

So now they blame brick-and-mortar retail which is in terminal decline, given the shift to online sales. I have reported extensively on the distress of the larger chain stores, but brick-and-mortar retailers include countless smaller operations and stores that no ratings agency follows because they’re too small and can’t issue bonds, and many of them are even more distressed.

Businesses file for bankruptcy protection because they have too much debt. Even brick-and-mortar retailers with little debt can get by just fine. Their sales might decline, and they might not make much money, but they can keep going. However, brick-and-mortar retailers with large amounts of debt are toast.

This is happening to other businesses too. Piling on debt in good times puts a business on the edge of a cliff, and it doesn’t take much to knock it over the cliff when adverse winds pick up.

Now come the consumers – not all consumers, but those with mounting piles of debt and stagnating or declining real incomes, of which there are many. They’d been hanging on by their teeth, with bankruptcy filings consistently declining since 2010. But that ended in November 2016.

In December, bankruptcy filings rose 4.5% from a year earlier. In January they rose 5.4%. It was the first time consumer bankruptcies rose back-to-back since 2010. I called it “a red flag that’ll be highlighted only afterwards as a turning point.”

In March, consumer bankruptcy filings rose 4% year-over-year, to 77,900, the highest since March 2015, when 79,000 filings occurred, according to the American Bankruptcy Institute data.  The turning point has now been confirmed.

Total US bankruptcy filings by consumers and businesses in March spiked 40% from February and rose 4% year-over-year to 81,590, the highest since March 2015:


The Fed’s monetary policies have purposefully encouraged businesses and consumers to borrow. But debt doesn’t just go away. It accumulates. By now, an increasing number of businesses and consumers are suffocating under this debt overhang in an economy that never developed the “escape velocity” needed – and hyped by Wall Street for years – to outgrow this debt. Rising bankruptcies are a turning point in the “credit cycle.” They’re not exactly a positive mile-marker for the economy.

The irony is thick: In all major sentiment surveys, economic confidence has soared since November: consumers, owners of small businesses, and corporate executives are riding high on their own ebullience. But the economic reality is tough for businesses and consumers struggling under the hangover from eight years of ultra-low interest rates.

I hope the model is wrong. Read…  Atlanta Fed GDPNow Forecast Spirals Toward Zero




As promised the tax plan is now history and they are going back to the drawing board

(courtesy zero hedge)

Trump Scraps “Phenomenal” Tax Plan, Goes Back To Drawing Board

Remember when Trump promised in early February that he would unveil a “phenomenal” tax plan within two to three weeks? Well, it was just scrapped, because as AP reports, Trump has scrapped the tax plan he campaigned on and is going back to the drawing board, hoping to find a plan that will have Republican consensus, something his current proposal has failed to achieve. In doing so, the president threatens the timetable of what many had seen as the primary driver behind his entire first year agenda, which is not in peril, and may not come until early 2018 if not later.

According to the AP, while Trump’s first attempt to write legislation is in its early stages and the White House has kept much of it under wraps, it has already sprouted the consideration of a series of unorthodox proposals including a drastic cut to the payroll tax, aimed at appealing to Democrats. Some view the search for new options as a result of Trump’s refusal “to set clear parameters for his plan and his exceedingly challenging endgame: reducing tax rates enough to spur faster growth without blowing up the budget deficit.”

The good news: the ambitious pace to figure out a plan reflects Trump’s haste to move quickly past a bruising failure to broker a compromise within his own party on how to replace the health insurance law enacted under President Barack Obama.

The bad news: administration officials cited by AP say it’s now unlikely that a tax overhaul will meet the August deadline set by Treasury Secretary Steve Mnuchin.

Why is the White House, by which we mean Gary Cohn and Goldman Sachs, bypassing Congress and coming up with its own tax plan? One reason proposed is that it is trying to learn the lessons from health care: rather than accepting a bill written by the lawmakers, White House officials are taking a more active role (again: see Gary Cohn).

While administration officials have signaled that they want to pass tax legislation with only Republican votes, yet they’ve also held listening sessions with House Democrats, in other words there will be concessions for both parties. One problem, however, is how to raise offseting government revenues to make the plan revenue neutral and not add to the budget deficit, something which would lead to further clashes with conservative and even moderate republicans.

White House aides say the goal is to cut tax rates sharply enough to improve the economic picture in depressed rural and industrial pockets of the country where many Trump voters live. But the administration so far has swatted down alternative ways for raising revenues, such as a carbon tax, to offset lower rates.

More details: “Trump, who brands himself as a deal-maker, has not said which trade-offs he might accept and he has remained noncommittal on the leading blueprint, from Rep. Kevin Brady, chairman of the Ways and Means Committee.”

One notable change: as expected, the BAT is dead.

Brady, R-Texas, has proposed a border adjustment system, which would eliminate corporate deductions on imports, to raise $1 trillion over 10 years that could fund lower corporate tax rates. But that possibility has rankled retailers who say it would lead to higher prices and threaten millions of jobs, while some lawmakers have worried that the system would violate World Trade Organization rules. Brady has said he intends to amend the blueprint but has not spelled out how he would do so.

Among the other options are being shopped on Capitol Hill, include changing the House Republican plan to eliminate much of the payroll tax and cut corporate tax rates. This would require a new dedicated funding source for Social Security. It would also mean that the Trumpflation trade, and any stock market upside as a result of reduced effective taxes are similarly dead.

As previously reported, instead of a BAT the administration is currently contemplating a VAT.

The change, proposed by a GOP lobbyist with close ties to the Trump administration, would transform Brady’s plan on imports into something closer to a value-added tax by also eliminating the deduction of labor expenses. This would bring it in line with WTO rules and generate an additional $12 trillion over 10 years, according to budget estimates. Those additional revenues could then enable the end of the 12.4 percent payroll tax, split evenly between employers and employees, that funds Social Security, while keeping the health insurance payroll tax in place.

This approach would give a worker earning $60,000 a year an additional $3,720 in take-home pay, a possible win that lawmakers could highlight back in their districts even though it would involve changing the funding mechanism for Social Security, according to the lobbyist, who asked for anonymity to discuss the proposal without disrupting early negotiations.

While the White House would not comment on the plan, it has recently said a value-added tax based on consumption is not under consideration “as of now.”

No matter what final shape Trump’s proposal takes, it appears almost inevitable that the president will again face significant internal opposition:

The lack of detail about how to significantly rewrite tax laws for the first time in 30 years may provide Trump some time to build consensus among Republicans. But without Trump laying down his hand, lawmakers appear reluctant to back a plan that will likely stir controversy. “Because there are trade-offs, congressmen need cover from the president to withstand the lobbyists and constituents who are going to complain,” said Bill Gale, an economist at the Brookings Institution who worked at the White House Council of Economic Advisers during President George H.W. Bush’s administration.


The Trump administration appears to have shut out the economists who helped assemble one of his campaign’s tax overhaul plans, which independent analyses show would have increased the budget deficit. “It’s a little frustrating that they feel they have to write a new tax plan when they have a tax plan,” said Steven Moore, an economist at the conservative Heritage Foundation who helped formulate tax policy for the Trump campaign.


Sen. Rob Portman, R-Ohio, a member of the Senate Finance Committee, said that all of the trial balloons surfacing in public don’t represent the work that’s being done behind the scenes. “It’s not really what’s going on,” Portman said. “What’s going on is they’re working with on various ideas.”

Meanwhile, as we showed several weeks ago…

… investors no longer believe Trump can deliver a tax plan, with Goldman’s high tax basket having wiped out all gains since the election.

Stocks rallied after his election on the promise of lower taxes and fewer regulations, but the Dow Jones Industrial Average has dipped 1.2 percent over the past month as the path for health care and tax revisions has become muddied.

“The White House is going to need its own clear direction, or it’s going to need to defer to Congress, but saying that your plan is forthcoming and then not producing a plan kind of puts everything in stasis,” said Alan Cole, an economist at the conservative Tax Foundation.

Well that about does it for tonight. I will see you tomorrow night

I wish all our Jewish friends out there a very Happy Passover week




  1. themagicbusguy · · Reply

    Would you please add a “settled via EFP” to the “box scores” portion of the blog.
    Further, has anyone done a gold delivery month(s) look at these settlements?

    Best regards as always


  2. Sprott silver fund (PSLV): Premium FALLS to -457%!!!! NAV (April 10/2017)

    So, does that mean they will pay me to take silver? Or is there a problem with the decimal point?


  3. […] by Harvey Organ Harvey Organ’s Blog […]


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