April 13/The Assault on $18.50 silver begins!!/And then $1291 gold which will lead to a breakout over $1300./Dow plummets by 138 points/Nasdaq falters by 31. pts/Silver open interest climbs to within 600 contracts of a record despite being $1.90 off when that record was set/USA fires a huge non nuclear MOAB bomb which was probably meant to deter North Korea/USA government receipts falter badly in first half of this fiscal year /

Gold: $1285.90  UP $10.60

Silver: $18.49  UP 21  cents

Closing access prices:

Gold $1287.80

silver: $18.53!!!










Premium of Shanghai 2nd fix/NY:$10.62


LONDON FIRST GOLD FIX:  5:30 am est  1286.10




For comex gold:



 TOTAL NOTICES SO FAR: 625 FOR 62,500 OZ    (1.9440 TONNES)

For silver:

For silver: APRIL


Total number of notices filed so far this month: 744 for 3,720,000 oz



The open interest in silver continues to advance with today’s reading just under 224,000 contracts or about 700 contracts below the record set last year. The price of silver is a good $2.00 below the price when the record OI was set.


I wrote the following yesterday:

“Late in the day, three important developments:

  1. Trump wanted a lower dollar with lower interest rates
  2.  North Korea’s Kim stated that there is going to be a big event
  3.  Talks with the Russia’s Lavrov and Putin did not go off too well

gold shot straight up to $1286.00 with silver  trading above $18.50 resistance level. The bankers sure have their work cut out for them.  If they cannot contain gold and silver prices their derivatives will blow up!

Since gold and silver made their big move after the comex closed, I do not think that the OI’s for both gold and silver will advance to a higher degree.  However I may be wrong. I will know let tonight…”


boy was I wrong.. the open interest in silver climbed by 3591 contracts up to 223,763 setting the stage for another banker resistance at that $18.50 level.

Gold and silver held their own today despite the higher USA dollar.  As everyone knows, the modus operandi of the crooks is that they never allow for a follow through rally.  So I am happy how our precious metals traded today. Late tonight I will receive the preliminary OI for both gold and silver and with James McShirley’s excellent reading of the tea leaves, he expects that the OI in gold to advance by 12,000 to 16,000 contracts. I would think that silver’s OI will rise 4,000 contracts to about 227,000 contracts.

I will report on the new OI on Monday.

Let us have a look at the data for today





In gold, the total comex gold ROSE BY GIGANTIC 8,273  contracts WITH THE RISE IN THE PRICE OF GOLD ($4.00 with YESTERDAY’S TRADING). The total gold OI stands at 464,404 contracts.

we had 2 notice(s) filed upon for 200 oz of gold.


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


We had  a huge  changes in tonnes of gold at the GLD: a deposit of 6.51 tonnes into the GLD

Inventory rests tonight: 848.92 tonnes



We had no changes in silver inventory at the SLV today/

THE SLV Inventory rests at: 328.201 million oz



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

1. Today, we had the open interest in silver ROSE BY A HUGE 3,591 contracts UP TO  223,763 DESPITE THE SMALL  RISE IN  SILVER  YESTERDAY ( 5 CENTS). We no doubt had some attempted short covering which badly failed as the longs keep piling on making it difficult for them to cover and overpowered the bankers. Our managed money sector (the hedge funds) continue to remain steadfast in their conviction as they added to their positions with yesterday’s attempted raid. This time around, silver found company in gold as it’s OI skyrocketed northbound by 8,273 contracts  WITH THE RISE IN THE PRICE OF GOLD ($4.00 YESTERDAY’S TRADING).

(report Harvey


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg


i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 2.13 POINTS OR 0.07%/ /Hang Sang CLOSED DOWN 51.84 POINTS OR .21%  . The Nikkei closed DOWN 125.77 OR 0.68% /Australia’s all ordinaires  CLOSED DOWN 0.72%/Chinese yuan (ONSHORE) closed UP at 6.8883/Oil UP to 53.30 dollars per barrel for WTI and 55.90 for Brent. Stocks in Europe ALL DEEPLY IN THE RED   ..Offshore yuan trades  6.8856 yuan to the dollar vs 6.8883 for onshore yuan. NOW  THE OFFSHORE IS STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN SLIGHTLY STRONGER  AND THE OFFSHORE YUAN  STRONGER TO THE ONSHORE AND THIS IS  COUPLED WITH THE WEAKER  DOLLAR. 




This is scary!! Voice of America claims that North Korea has apparently placed a nuclear device in a tunnel and it could be detonated by Saturday

( zerohedge)

ii)A good look at the military strength of both sides of the Korean Peninsula:

( zero hedge)

iii)Trump reissues his ultimatum to China to fix the North Korean problem or else@!

( zerohedge)

iv)And that big North Korean important event: a street opening!!



Abe claims that North Korea may be capable of sarin tipped missiles

( zerohedge)


i)Not sure why China after 13 days decided to provide a huge liquidity injection but they did.  It was either the huge problem with iron ore or in response to the weaker dollar. The offshore yuan rebounds hugely in value as does the onshore yuan.

( zerohedge)

ii)Chinese exports surge in March but Goldman Sachs warns that it will not continue because of their tightening

( zero hedge/GoldmanSachs)




A good look at what is going on inside Turkey.  All of Erdogan’s barks are basically ignored by the west and Russia

( Bekdil/Gatestone Institute)


Syria claims that the USA led coalition hit an iSIS controlled chemical weapons depot and killed hundreds. It is interesting in that this is exactly what the Russians claimed what happened on an earlier strike last week

( zero hedge)



A terrific commentary by Wolf Richter describing the irrational exuberance in my home city of Toronto. He claims that the government must continue with this game or else face a total collapse

(courtesy Wolf Richter/WolfStreet)


Rig counts in the USA surge to a 2 yr high and this will play havoc to our OPEC production cuts.  No question about it: the shale boys will kill the oil rally!

(courtesy zero hedge)



Venezuela continues on a downward spiral.  However it did pay 2.6 billion uSA bond payment.  It has another 62 billion due in the next two years.  Please recall that Russia has lent money to PDVSA and received collateral, its 49% interest in USA CITGO, an integrated oil and gas company with 800 gas stations. If PDVSA defaults then it is inevitable that Russia will control gas stations in the USA

( zero hedge)


i)This may be telling:  the CME is to close its derivative CME Europe and CME Clearing Europe at the end of 2017

( MarketWatch/GATA)

ii)As we reported to you yesterday India’s gold imports is said to have jumped 582% on wedding demand”

( Bloomberg)

iii)I brought this story to you yesterday in that the London gold fix was 12 dollars off from spot. This story should get to our class action lawyers as there is no answer as to why this happened except that our mining companies suffered.

( Reuters/GATA)

iv)The big story of yesterday;  Trump warns that the USA dollar is getting too strong

( Reuters/GATA)

v)Technical analysts will be looking to see if gold will break out past the 1290.00 level.  Just like $18.50 on silver, this the upper resistance level and if pierced, gold will have clear sailing into the 1300’s

( Ross Norman/Sharp Pixley)

10. USA stories

i)A big story…Government revenues are faltering badly. In March, the USA treasury brought in total receipts of $216 billion well below $228 billion expected.  However March recorded a massive 392 billion outlay. Thus a deficit in March of $176 billion instead of $167.For six months the deficit is already$527 billion, and no doubt the deficit for the year will exceed 1 trillion dollars.  Also may I remind you that in the deficit totals they do not include student loans and auto loans because they deem them assets!!!

( zero hedge)

ii)Wells Fargo tumbles considerably after Warren Buffet dumps 9 million shares

( zerohedge)

iii)No wonder Buffet sold his stock in a hurry:  Wells Fargo’s mortgage application tumbled by 23 billion dollars to only 59 billion dollars in the 4th quarter. In the prior quarter, alarm bells went off when it plunged by 25 billion dollars down to 75 billion.

( zero hedge)

iv) Soft data University of Michigan Confidence index rebounds

( zero hedge)



v) Well that sure ended fast:  The Donald has now flipped on five key campaign promises in 24 hours:

1.Goodbye to the strong USA dollar

2.China is not a currency manipulator

3.NATO is needed

4. Yellen may be invited back to the Fed in 2018

5. He now supports to the IMPORT-EXPORT back to which he was opposed during the election

( zero hedge)



vi)A terrific commentary by Ryan McMaken of the Mises Institute.  He correctly states that Trump has abandoned all economic reforms and seems to embrace war spending

( Ryan McMaken/Mises Institute)

vii) This no doubt will send a strong message to North Korea; the MOAB bomb strikes Afghanistan

(courtesy zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 8,273 CONTRACTS UP to an OI level of 464,404 WITH THE  RISE IN THE PRICE OF GOLD ( $4.00 with YESTERDAY’S trading). The bankers again were certainly not shy in supplying the necessary paper to our newbie longs. 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 A LOSS OF 123 contract(s) FALLING TO 1,799. We had 2 notices served yesterday so we LOST 121 contracts or 12,100 oz will NOT stand for delivery in the active delivery month of April AND THESE GUYS NO DOUBT WERE CASH SETTLED THROUGH THE OBSCURE EFT ROUTE DESCRIBED BY JAMES TURK LAST WEEK.

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 153 contract(s) and thus its OI is 2380 contracts. The next big active month is June and here the OI ROSE by 7,278 contracts UP to 336,135.

We had 2 notice(s) filed upon today for 200 oz

And now for the wild silver comex results.  Total silver OI ROSE BY 3,591 contracts FROM  220,172 UP TO 223,763 DESPITE YESTERDAY’S TINY 5 CENT PRICE RISE. Whereas in gold, the bankers supplied the necessary paper to contain gold’s excitement, they had no choice but to supply the short silver paper. As I stated yesterday:
“They knew that they were cornered and they are now trying to figure out how to extricate themselves from their mess!!”
Please remember that the price of silver did not rise appreciably until after 2:00 pm or so and this was after the comex closed.
The open interest for silver will no doubt climb to record levels when I retrieve the data for today, close to midnight.
We are moving CLOSER TO the all time record high for silver open interest set on Wednesday August 3/2016:  (224,540). The closing price of silver that day: $20.44. WE ARE ONLY 7000 CONTRACTS AWAY FROM RECORD HIGHS IN OI AND YET WE ARE $2.00 BELOW THE PRICE OF $20.44 WHEN THAT RECORD WAS SET.

We are in the NON active delivery month is APRIL  Here the open interest GAINED 134 contracts up to 199 contracts. We had 0 notices filed yesterday so we GAINED ANOTHER 134 contracts or an additional 670,000 oz will stand for delivery.

The next active contract month is May and here the open interest  LOST ONLY 2,966 contracts DOWN to 133,630 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. Also remember that Good Friday was much earlier last year:  after today, we have only 10 trading days before first day notice. The non active June contract LOST 105 contracts to stand at 207. The next big active month will be July and here the OI gained 6716 contracts up to 59,549.


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 226,132  contracts which is good.

Yesterday’s confirmed volume was 257,756 contracts  which is good.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for APRIL
 April 13/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 289.359 oz
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
No of oz served (contracts) today
2 notice(s)
200 OZ
No of oz to be served (notices)
1797 contracts
179,700 oz
Total monthly oz gold served (contracts) so far this month
625 notices
62,300 oz
1.9440 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   443,448.1 oz
Today we HAD 0 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 0  customer deposit(s):
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
i) Out of Brinks: 289.359  oz
total customer withdrawal: 289.359 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 2 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 1 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 (625) x 100 oz or 62,500 oz, to which we add the difference between the open interest for the front month of APRIL (1799 contracts) minus the number of notices served upon today (2) x 100 oz per contract equals 242,200 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 (625) x 100 oz  or ounces + {(1799)OI for the front month  minus the number of  notices served upon today (2) x 100 oz which equals 242,200 oz standing in this non active delivery month of APRIL  (7.533 tonnes)
we LOST 121 contracts or an additional 12,100 oz will NOT  stand and THESE were cash settled via the PRIVATE EFP route. IT SURE SEEMS THAT THE COMEX IS OUT OF PHYSICAL METAL TO SUPPLY TO OUR LONGS.
 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: 7.533
total for the 16 months;  252.362 tonnes
average 15.772 tonnes per month
Total dealer inventory 990,497.01 or 30.808 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,969,945.794 or 279.00 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 279.00 tonnes for a  loss of 24  tonnes over that period.  Since August 8/2016 we have lost 75 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
And now for silver
 April 13. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
1,276,557.700 oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
1,205,429.308 oz
No of oz served today (contracts)
No of oz to be served (notices)
199 contracts
(995,000  oz)
Total monthly oz silver served (contracts) 744 contracts (3,720,000 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  7,729,601.3 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 2 customer withdrawal(s):
i) Out of CNT: 621,153.900 oz
ii) Out of Scotia: 653,403.800 oz
 We had 1 Customer deposits:
i) Into JPMorgan:  1,205,429.308 oz
***deposits into JPMorgan have now resumed.
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver???
total customer deposits; 1,205,429.308 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 744 x 5,000 oz  = 3,720,000 oz to which we add the difference between the open interest for the front month of APRIL (199) 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:  744(notices served so far)x 5000 oz  + OI for front month of APRIL.(199 ) -number of notices served upon today (0)x 5000 oz  equals  4,715,000 oz  of silver standing for the APRIL contract month. 
We gained 134 contracts or an additional 670,000 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 88,209 which is gigantic 
Yesterday’s  confirmed volume was 95,046 contracts OR 475 MILLION OZ /gigantic.  (THE 475 MILLION OZ = 67 % OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA)
Total dealer silver:  30.289 million (close to record low inventory  
Total number of dealer and customer silver:   189.792 million oz
The total open interest on silver is now very close to 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 6.4 percent to NAV usa funds and Negative 5.9% to NAV for Cdn funds!!!! 
Percentage of fund in gold 60.4%
Percentage of fund in silver:39.5%
cash .+0.2%( April 13/2017) 
2. Sprott silver fund (PSLV): Premium RISES  to .49%!!!! NAV (April 13/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to +0.36% to NAV  ( April 13/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -.49% /Sprott physical gold trust is back into POSITIVE/ territory at +0.36%/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 13/a deposit of 6.51 tonnes into the GLD/Inventory rests at 848.92 tonnes

this no doubt is a paper deposit/

APRIL 12/no changes in gold inventory at the GLD/Inventory rests at 842.41 tonnes

April 11/a huge deposit of 4.12 tonnes into inventory/Inventory rests at 842.41 tonnes

this would no doubt be a paper gold entry. It would be difficult to find that amount of physical gold.

April 10/1.77 tonnes added into inventory at the GLD/inventory rests at 838.29 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 13 /2017/ Inventory rests tonight at 848.92 tonnes


Now the SLV Inventory

April 13/no changes in inventory at the SLV/Inventory rests at 328.201 million oz

April 12/no changes in inventory at the SLV/Inventory rests at 328.201 million oz/

April 11/a paper deposit of 11.131 million oz into the SLV/no doubt yesterday’s entry of a withdrawal of 11.231 million oz was in error/328.201 million oz

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 13.2017: Inventory 328.201  million oz

Major gold/silver trading/commentaries for THURSDAY


Perth Mint Silver Bullion Sales Rise 43% In March

– Perth Mint’s silver bullion sales rise 43% in March
– Perth Mint’s monthly gold coin, bars sales fall 12% 
– Gold silver ratio of 32 – 32 times more silver ounces sold
– Gold: 22,232 oz and Silver: 716,283 oz – bullion coins and minted bars sold
– Gold is 2.6% higher and silver surged 3.1% in the shortened week with markets closed for Good Friday tomorrow

The Perth Mint’s silver bullion sales of coins and bars surged 43% in March. Silver sales climbed about 43 percent in March to 716,283 ounces from 502,353 ounces in February, according to a Perth Mint blog post.

Gold bullion coins and minted bars fell in March to the lowest since August last year. Sales of gold coins and minted bars slipped about 12 percent in March to 22,232 ounces from 25,257 ounces a month earlier, the mint said on its website.

Chart shows total monthly ounces of gold and silver shipped as minted products by The Perth Mint to wholesale and retail customers worldwide. It excludes sales of cast bars and other  activities including sales of allocated/unallocated precious metal and Perth Mint Silver and Gold Certificates.

The Perth Mint is the largest gold refinery in Australia, the world’s No. 2 gold producer after China. It is one of the largest gold and silver refineries in the world.

Gold and silver prices have surged this week on a weaker dollar and as appetite for risky assets such as equities waned due to geo-political concerns in the Middle East and Asia and deepening tensions between the U.S. and Russia.

Gold is 2.6% higher and silver is 3.1% in the shortened Easter week with markets closed for Good Friday tomorrow.

Geo-political risks that were dormant are becoming more active. This is leading to renewed risk aversion which should see further gains for gold.

Perth Mint Bullion blog here


(courtesy Ross Norman/Sharp Pixley)

As we reported to you yesterday India’s gold imports is said to have jumped 582% on wedding demand”

(courtesy Bloomberg)

India gold imports said to jump 582% on festival, wedding demand


By Shruti Srivastava and Swansy Afonso
Bloomberg News
Wednesday, April 12, 2017

Gold imports by India are said to have jumped almost seven-fold in March from a year earlier as jewelers stocked up anticipating a demand recovery during the wedding season that began this month and the auspicious Hindu gold-buying day of Akshaya Tritiya.

Shipments advanced 582.5 percent to 120.8 metric tons last month from a year earlier, according to a person familiar with provisional data from the finance ministry, who asked not to be identified as the data aren’t public. Imports dropped 20 percent to 716.4 tons in the year ended March 31. Finance Ministry spokesman D. S. Malik declined to comment on the data. …

… For the remainder of the report:



I brought this story to you yesterday in that the London gold fix was 12 dollars off from spot. This story should get to our class action lawyers as there is no answer as to why this happened except that our mining companies suffered.

(courtesy Reuters/GATA)

London gold benchmark fixes $12/oz off spot price


By Peter Hobson and Jan Harvey
via Nasdaq.com, New York
Tuesday, April 11, 2017

LONDON — London’s gold price benchmark fixed some $12 below the spot price on Tuesday afternoon as the auction appeared to become locked in a downward spiral.

From an initial $1,265.75, close to the spot price at the time, the auction price ratcheted steadily lower before fixing at $1,252.90 in the ninth round. From the fifth round to the eighth the bid and offer volumes remained frozen, unable to match.

Data on the website of the auction’s administrator, Intercontinental Exchange, showed that only five banks took part in the auction on Tuesday afternoon, out of 14 officially accredited participants. …

… for the remainder of the report:



The big story of yesterday;  Trump warns that the USA dollar is getting too strong

(courtesy Reuters/GATA)

Trump warns that dollar is ‘getting too strong’


Trump Backs Away from Labeling China a ‘Currency Manipulator’

By David Lawder
Wednesday, April 12, 2017

WASHINGTON — President Donald Trump said today that his administration will not label China a currency manipulator, backing away from a campaign promise, even as he said the U.S. dollar was “getting too strong” and would eventually hurt the economy.

In an interview with The Wall Street Journal, Trump also said he would like to see U.S. interest rates stay low, another comment at odds with what he had often said during the election campaign. …

… For the remainder of the report:




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


1 Chinese yuan vs USA dollar/yuan STRONGER  6.8883(   REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES STRONGER TO ONSHORE AT   6.8856/ Shanghai bourse UP 2.13 POINTS OR 0.07%   / HANG SANG DOWN 51.94 POINTS OR .21%

2. Nikkei closed DOWN 125.77 POINTS OR 0.68%   /USA: YEN RISES TO 109.15

3. Europe stocks opened ALL IN THE RED       ( /USA dollar index FALLS TO  100.41/Euro DOWN to 1.0626


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  53.30 and Brent: 55.90

3f Gold UP/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.181%/Italian 10 yr bond yield UP  to 2.258%    

3j Greek 10 year bond yield FALLS to  : 6.65%   

3k Gold at $1286.60/silver $18.55 (8:15 am est)   SILVER ABOVE  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 16/100 in  roubles/dollar) 56.44-

3m oil into the 53 dollar handle for WTI and 56 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 REVALUATION NORTHBOUND 


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0056 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0689 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  +.181%

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 2.237% early this morning. Thirty year rate  at 2.8850% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

S&P Futures Slide Ahead Of Bank Earnings

S&P futures extended their Wednesday decline, dropping in the overnight session with banking shares in focus ahead of results from JPMorgan and Citigroup. European stocks likewise retreated along with the dollar, while Asian shares were mixed.

The dollar continued to face headwinds in the wake of U.S. President Donald Trump’s denouncement of the greenback’s strength and championing of lower interest rates.  U.S. Treasury yields also dropped a fourth day as European bonds gained across the board, compounding a retreat in yields which battered banking stocks. The dollar index, which tracks the greenback against a basket of six trade-weighted peers, fell 0.6 percent to 100.07. The benchmark 10-year U.S. Treasury yield slid to a five-month low of 2.22 percent.

Bloomberg’s Dollar Spot Index headed for a fourth day of declines after falling below its 200-day moving average on Wednesday. Lenders led the retreat as the Stoxx Europe 600 Index slid, and futures of the S&P 500 also pointed lower.

Crude oil was little changed after yesterday’s EIA report showed record Cushing inventories and another rise in US crude production. Thursday’s economic data include initial jobless claims and University of Michigan Consumer Sentiment. Citigroup, JPMorgan and Wells Fargo are among companies scheduled to publish results.

“The dollar slid after Trump commented that the currency had risen too high … (and) saying that he was in favor of low interest rates policy,” Mizuho strategists wrote in a note to clients on Thursday.

“The U.S. president also appeared to move away from a more confrontational tone against China by acknowledging the country has not intervened to weaken its currency. Following his comments, Treasury yields fell to their lowest this year.”

Escalating fears of a new weapons test by North Korea kept investors on edge too, as a U.S. carrier group sails toward the area. Concern over the situation in the area has sent the cost to protect South Korean government debt against default soaring to 9-1/2 month highs.

Taking another look at Trump’s jarring Wednesday flipflop, the day’s main event, SocGen’s Kit Juckes summarizes it as follows: “President Trump doesn’t like a strong dollar, does like low interest rates, may yet offer Janet Yellen a second term, recognises that China isn’t a currency manipulator, and is struggling to enact policies that will boost US growth. Looked at in that light, perhaps it’s only to be expected that the dollar is drifting lower. The medium-term case for the euro to usurp it as strongest of the major currencies grows steadily even if European political uncertainty holds it back in the short term.”

10-year Treasury yields are now 22bp lower than they were at the start of 2017. The failure of the healthcare bill and mixed economic data have done most of the damage, though geopolitical uncertainty has played a part and the weight of positioning was a major factor too. Federal Reserve economists publishing a paper arguing we may see rates at the zero bound more frequently in the future, and Ben Bernanke writing an article wondering why inflation expectations haven’t fallen as a result (since the Fed will struggle to keep inflation up at 2%) helps the case for ‘normal’ yield normalisation, either. With JGB yields down just 4bp and Bund yields down only 1bp, relative yields have been a major driver of dollar weakness against the yen, and a reason for it to fail to make gains against the politically-anchored euro. Even more importantly, lower US yields have provided support for emerging and higher-yielding currencies, despite a series of political risks shaking several EM currencies. The Mexican peso is 2017’s strongest currency and the dollar is only up against a handful of stragglers

Big moves in the aftermath of Trump’s remarks, which also signaled a softening stance on China’s currency practices and took in the future of Fed Chair Janet Yellen, added momentum to a jump in volatility across global stock markets. After weeks of relative calm, traders are attempting to get a handle on the president’s unpredictable interventions, rising geopolitical risks, the end of easy central bank cash and key elections in Europe. According to Bloomberg, lower volumes in the shorter trading week before Easter may have compounded the swings.

“Markets look distracted by a whole bunch of contradictory bluster,” Bill Blain, a strategist of Mint Partners in London, wrote in a note. “Let’s not forget we’re facing four days of closed markets. Most institutional investors and the banks have already bedded down their positions ahead of the holidays.”

Surprisingly strong Chinese trade figures, which showed exports surging the most in two years, and Trump’s remarks that the United States will not name China a currency manipulator helped boost Asian stocks. A quick recap of Chinese trade data:

Chinese Trade Balance (USD)(Mar) 23.9B vs. Exp. 12.5B (Prey. -9.15B).

  • Exports (USD)(Mar) Y/Y 16.4% vs. Exp. 4.3% (Prey. -1.3%)
  • Imports (USD)(Mar) Y/Y 20.3% vs. Exp. 15.5% (Prey. 38.1%)

China Trade Balance (CNY)(Q1) 455b1n.

  • Exports (CNY)(Q1) Y/Y 14.80%.
  • Imports (CNY)(Q1) Y/Y 31.10%.

Asia MSCI’s broadest index of Asia-Pacific shares outside Japan was up about 0.5 percent, while the yen’s earlier strength helped push Japan’s Nikkei down 0.7 percent. Japanese shares fell for a third day, though they pared the day’s steepest losses as the yen erased an earlier gain. The Australian dollar jumped as employment surged more than expected in March, while South Korean stocks and the won continued a recovery.  Hong Kong stocks fluctuated after China’s overseas shipments last month jumped the most in two years as global demand held up.

European stocks were lower on Thursday. The pan-European index of leading 300 stocks fell 0.5 percent to 1,496 points, Germany’s DAX was down 0.4 percent and Britain’s FTSE 100 was down 0.6 percent. European bank stocks were among the hardest hit, down more than 1 percent as the fall in longer-dated bond yields flattened the yield curve. The shrinking premium of long-dated yields over shorter-dated ones hurts banks’ profitability.

As European trading got underway, the dollar clawed back some of its earlier losses. It was down 0.1 percent against the yen at 108.90 yen, after touching a five-month low of 108.70. The euro was a touch weaker at $1.0650, after rising as high as $1.0677.

S&P 500 contracts expiring in June were down 0.3 percent at 06:15 a.m. in New York. The benchmark slipped 0.4% on Wednesday, closing below its 50-day moving average for the first time since November.

The euro and euro zone bond yields were also vulnerable to investor unease around the first round of the French presidential election on April 23. Markets are uneasy about the victory chances of both far-right leader Marine Le Pen, who has pledged to seek to take France out of the euro, and far-left candidate Jean-Luc Melenchon, who has seen his support climb in the polls.

“I think the price action in core yields is mainly shaped by the rising geopolitical concerns but also French election nerves increasing safe-haven flows,” said ING strategist Martin Van Vliet.

In commodities, oil prices fell on concerns about rising U.S. output. U.S. crude CLc1 slipped 0.3 percent to $52.95 a barrel, extending Wednesday’s 0.5 percent loss that saw it break a six-session winning streak. Brent was also down 0.3 percent at $55.70, failing to make up any of Wednesday’s 0.7 percent loss.

Gold pared earlier gains but hovered near a five-month high hit earlier in the session. The precious metal was up around 0.1 percent at $1,287 an ounce.

Today investors will be watching earnings from JPMorgan, Citigroup and Wells Fargo, kicking off an earnings season for big banks. Analysts will listen carefully to what they have to say about the slowdown in commercial loan growth as well as the state of consumer lending amid worries over high levels of student and auto loan. Many markets will be closed tomorrow for the Easter holiday weekend.

Bulletin Headline Summary from RanSquawk

  • European equities looking to close the week on the back with the Eurostoxx down a modest 0.6%, taking the lead from US and Asian bourses
  • Once again, we see the major volatility outside of European hours, with last night’s Trump comment on the USD sending USD/JPY below 109.00 in NY
  • Looking ahead, highlights include weekly jobs data, PPI, Uni. Of Michigan

Market Snapshot

  • S&P 500 futures down 0.2% to 2,336.50
  • STOXX Europe 600 down 0.4% to 380.25
  • MXAP up 0.1% to 146.98
  • MXAPJ up 0.5% to 481.83
  • Nikkei down 0.7% to 18,426.84
  • Topix down 0.8% to 1,468.31
  • Hang Seng Index down 0.2% to 24,261.66
  • Shanghai Composite up 0.07% to 3,275.96
  • Sensex down 0.3% to 29,544.35
  • Australia S&P/ASX 200 down 0.7% to 5,889.95
  • Kospi up 0.9% to 2,148.61
  • German 10Y yield fell 2.0 bps to 0.178%
  • Euro down 0.2% to 1.0644 per US$
  • Brent Futures down 0.07% to $55.82/bbl
  • Italian 10Y yield rose 1.9 bps to 2.005%
  • Spanish 10Y yield fell 3.0 bps to 1.64%
  • Gold spot down 0.06% to $1,286.02
  • U.S. Dollar Index down 0.5% to 100.27

Top Overnight News from Bloomberg

  • Aetna Is Said to Explore Sale of $2 Billion Benefits Unit
  • Texas Drafts Order Blocking NextEra’s $18 Billion Oncor Takeover
  • Broadcom Said to Win Japan Banks’ Backing for Toshiba Chip Bid
  • Oil Stocks Rose in First Quarter Despite OPEC Cut, IEA Says
  • Japan Atomic, Exelon Form JV to Advise on U.K. Nuclear Plant
  • Berkshire Hathaway Sells 7.13m Wells Fargo Shares; To Sell More
  • Infosys Boosts Investor Payout as Sales Forecast Disappoints
  • HSBC Says Companies Already Re-Routing Business Due to Brexit
  • Abbott Gets FDA Warning Letter Over Faulty Device Batteries
  • Loews May be Cut by S&P on Acquisition Announcement
  • Aerie Pharma Says New Safety Data Consistent With Prior Results
  • Amplify Snack Files Trademark Action Against Competitor

Asian markets continued with the week’s theme, as geopolitical fears and commentary continued to lead to a risk off tone. The sentiment once again weighed on both the Nikkei 225 (-0.8%) and ASX 200 (-0.8%), with the latter also dampened by poor performance in the materials sector. Hang Seng (-0.1%) and Shanghai Comp (+0.1%) were mixed as the mainland found some mild support after the PBoC’s resumed liquidity injections and as participants digested better than expected trade data. 10yr JGBs remained supported amid safe-haven flows with the 10yr Jun’17 JGB trading above the 151.00 level, while today’s 30yr auction also spurred upside with average yield falling and average prices increasing from prior. PBOC resumed open market operations and injected CNY 70bIn via 7-day reverse repos, CNY 20bIn via 14-day reverse repos and CNY 20bIn via 28-day reverse repos. The PBoC also injected CNY 83.9bIn through its pledged lending supply facility. PBoC set the CNY mid-point at 6.8651 vs. Prey. 6.8940.

Top Asian News

  • China Exports Jump the Most in Two Years as Imports Moderate
  • PBOC Official Calls for Raising Tolerance on Yuan Fluctuations
  • Singapore Sticks to Neutral Monetary Policy as GDP Contracts
  • China Says It’s Normal to Have Economic Exchanges With N. Korea
  • Malaysia to Let Fund Managers Fully Hedge Currency Exposure
  • Minecraft for Nintendo Switch to Go On Sale May 11
  • Japan to Allow Automatic Car Tests on Public Roads, Nikkei Says

European bourses looked to close the week on the back foot with the Eurostoxx down a modest 0.6%, taking the lead from US and Asian bourses. This comes amid the lingering geopolitical concerns alongside President Trumps comments on a strong USD and interest rates. In terms of worst performing sectors, financial and energy names are leading the losses with the latter weighed by weaker oil prices. Although given the light volumes ahead of the Easter weekend it is likely that moves will be somewhat exacerbated. Across fixed income markets, eurozone bonds are trading higher this morning amid the risk off tone with bunds trading some 25-30 ticks higher, albeit in particularly thin trading conditions ahead of the long weekend. Elsewhere, peripheral markets have regained some ground against their core counterparts but still sit lower for the week.

Top European News

  • Singer’s Zinger: How Elliott Showed Its Hand in Akzo Battle
  • London Housing in Its Deepest Slump Since the Financial Crisis
  • SCA Shares Surge on Report of Bid for Hygiene From Buyout Firms
  • Bund Downside May Increase as Risk Coils; OATs Extend Advance
  • Turkey’s Gezici Sees Yes Vote Slipping to 51.3% in Referendum
  • Apollo, Expobank Among Bidders for Gorenjska Banka, Delo Says

In currencies, the Bloomberg Dollar Spot Index dropped 0.1 percent to the lowest since March 28 as of 9:49 a.m. in London. The yen was little changed at 109.08 per dollar, after gaining 0.3 percent earlier.  The euro was 0.2 percent lower at 1.0639, falling for the first time in four days. Once again, we see the major volatility outside of European hours, with last night’s Trump comment on the USD sending USD/JPY below 109.00 in NY, while EUR/USD pushed back through 1.0650. Losses have since been tempered, but to varying degrees, as the risk mood is still very much to the downside given the events this week. The JPY continues to find a bid across the board, and we would suspect it would be the same for the CHF were the market left to its own devices. USD/CHF has tested back to parity but this has been a mere function of the EUR/USD move higher. EUR/CHF maintains a tight range below 1.0700. For GBP, the market maintains a bid tone, with loose talk of corporate related flow going through. The EUR cross rate looks to be driving trade at present, and despite repatriation/trade real money demand from the mid to upper 0.8400’s, intra day players have pounced on the move above 0.8500. Cable is still eyeing 1.2600 higher up, having maintained a firm uptrend since dipping to 1.2370 earlier in the week. The lack of Brexit related headlines have been GBP supportive also.

In commodities, West Texas Intermediate dropped 0.1 percent to $53.06 a barrel, as a government report showed U.S. output expanded to the highest level in more than a year, countering a decline in stockpiles from a record. Gold slipped 0.1 percent to $1,285.91 an ounce after climbing for the past four days to the highest level in five months. Iron ore futures declined 1.1 percent. That’s after the benchmark spot price tumbled 8.5 percent on Wednesday, its biggest one-day slump since March 2016.  Precious metals are where all the major action lies at present, and as we have spoken of in previous month, the safe-haven factor as now kicked in, with events in Syria and tensions with North Korea prompting a flight to safety and all things tangible. Gold is now staring at a move back through USD1300.00, allied with gains in Silver above USD18.50, with yesterday’s comments by president Trump hitting the USD to add to the more familiar correlation seen of late. Oil prices remain buoyed by recent comments from Saudi Arabia that they favour an extension to production cuts, with WTI camped back in the USD50-55 range again. Not too much of note in metals, but Copper prices have found a base amid fresh bearish calls on Iron Ore.

US Event Calendar

  • 8:30am: PPI Final Demand MoM, est. 0.0%, prior 0.3%
    • PPI Ex Food and Energy MoM, est. 0.2%, prior 0.3%
    • PPI Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.3%
    • PPI Final Demand YoY, est. 2.4%, prior 2.2%
    • PPI Ex Food and Energy YoY, est. 1.8%, prior 1.5%
    • PPI Ex Food, Energy, Trade YoY, prior 1.8%
  • 8:30am: Initial Jobless Claims, est. 245,000, prior 234,000
    • Continuing Claims, est. 2.02m, prior 2.03m
  • 9:45am: Bloomberg Consumer Comfort, prior 50.2
  • 10am: U. of Mich. Sentiment, est. 96.5, prior 96.9; Current Conditions, est. 112.5, prior 113.2; Expectations, est. 86.5, prior 86.5
    • U. of Mich. 1 Yr Inflation, prior 2.5%
    • U. of Mich. 5-10 Yr Inflation, prior 2.4%

DB’s Jim Reid concludes the overnight wrap

The market is struggling to clear the bar this week as we approach the Easter break but much of the overnight headlines concern Mr Trump’s comments to the media. In an interview with the WSJ, Trump said that the US Dollar “is getting too strong” and attributed that partially to because “people have confidence in me”. Trump also added that “it’s very hard, very hard to compete when you have a strong dollar and other countries are devaluing their currency”. Interestingly though the President then also said that China are not currency manipulators. Remember that in the past Trump had routinely criticized President Obama for not labelling China a currency manipulator. In addition to these comments, in the same interview the President also said that “I do like a low-interest rate policy” despite previously criticising Yellen for not raising rates during his campaign.

Indeed Trump also said in the interview that, while still very early in the process, he’d consider re-nominating Yellen for another term as Chair of the Fed, saying that he likes and respects her. Away from this there were similar u-turns made on NATO which Trump now no longer calls obsolete in a separate press conference with the NATO Secretary General, while Trump also lent his support behind the Export-Import Bank.

The Greenback had been trading sideways for much of the session however Trump’s comments sent the Dollar sharply lower into the close last night with the Dollar index finishing down about -0.60%. EM currencies were the biggest beneficiaries of that with the likes of the Turkish Lira (+1.36%), Mexican Peso (+1.26%) and Argentine Peso (+0.62%) all sharply higher although G-10 currencies also rose meaningfully with the Euro (+0.56%) and Yen (+0.54%) standing out. Meanwhile Treasury yields continued to march lower on the low rate comment. Indeed 10y yields are hovering around 2.221% this morning which is 8bps lower versus the level prior to the headlines hitting our screens. That means 10y yields are now down over 16bps this week alone and about 40bps from the March highs. Last night’s closing level was also the lowest since November 16th President Trump’s turnaround on China is notable and it’s clear that the North Korea situation has taken over as the immediate concern and more important issue for now compared to the currency debate. The President said in that press conference with the NATO Secretary General last night that “President Xi wants to do the right thing” and that “I think he wants to help us with North Korea”.

This follows a tweet earlier in the day from the President in which he labelled North Korea a “menace”. On the subject of North Korea, a Reuters article last night suggested that foreign journalists visiting North Korea have been told to prepare for a “big and important event” today, without any further suggestion about what this could mean.

Away from Trump, US Secretary of State Rex Tillerson met with his Russian counterpart Sergei Lavrov in Moscow yesterday. Based on the comments which came out of the press conference it would suggest that it was a fairly tense and difficult discussion. Tillerson said that “there is a low level of trust between our two countries” and that “the world’s two foremost nuclear powers can’t have this kind of relationship”. With geopolitical tensions clearly still high, volatility  continues to inch higher with the VIX yesterday up another 4.64% to 15.77 and extending the 5-month high. The S&P 500 (-0.38%) retreated for its biggest decline in over 3 weeks while the Dow (-0.29%) also edged lower. In Europe the Stoxx 600 (+0.19%) did actually manage to eke out a small gain although a number of regional benchmarks closed down and the VSTOXX stabilised around the YTD highs.

This morning in Asia the focus has again turned to China where this time the March trade data has been released. In USD terms, exports were reported as rising +16.4% yoy in March (vs. +4.3% expected) and up from -1.3% the month prior. It’s a similar story in Yuan terms also with exports surging to +22.3% yoy (vs. +8.0% expected) from +4.2%. A moderation in USD imports (+20.3% yoy from +38.1%) has helped to support a larger than expected trade surplus. China equity markets have recovered from early losses at the open but are only back to unchanged on the day. Elsewhere a strong last 24 hours for  Asia FX has put pressure on the likes of the Nikkei (-1.14%) and ASX (-0.78%) while the Kospi (+0.33%) is actually a shade firmer. It is worth noting that volumes are unsurprisingly thin this morning as we approach the long weekend and with that in mind it’s worth highlighting that all major European bond and stock markets will be closed tomorrow along with US equity markets, while the Treasury market will shut at noon tomorrow. European bond and equity markets are also closed on Monday but US markets will be open.

Moving on. As the clock ticks down to the first round French presidential election in 10 days, we are keeping a much closer eye on the moves in the polls and it’s worth highlighting the Ifop-Fiducial poll released yesterday (and covering 9-12th April). It revealed a small 0.5% drop in support for Macron to 22.5% in the first round, while Le Pen’s support also showed a small decline to 23.5%. At the same time support for Melenchon was stable at 18.5% and support for Fillon also stable at 19%. While Melenchon’s support being stable, as opposed to rising, is supportive for risk the decline for Macron and tightening in the spread between the leading 3 candidates to Le Pen in the first round is clearly less so. Indeed the spread between Macron and Melenchon is now just 4%. If you use the same pollster and go back to April 7th then that spread was 6.5% and if you go back further to April 3rd then the spread was 11%. French assets have remained relatively resilient all things considered but should the momentum in the polls continue over the next week then it wouldn’t take much for this story to become the dominant focus for the market again. It’s worth also noting the Le Monde article yesterday in which outgoing President Francois Hollande said that he fears the possibility of a Le Pen-Melenchon second round race.

Elsewhere, yesterday’s macro data was again a bit of an afterthought. In the US the March monthly budget statement revealed a larger deficit compared to a year ago of $176bn. Meanwhile the import price index reading for March declined -0.2% mom as expected. Over in Europe the significant data was again reserved for the UK where the latest employment indicators were released. Employment rose a fairly modest 39k in February (vs. 70k expected) while the ILO unemployment rate held steady at 4.7% as expected. Meanwhile weekly earnings ex bonuses rose +2.2% yoy in the 3 months to February which, while down twotenths from the prior reading, was marginally higher than expected. Away from that there was some Fedspeak although it didn’t really move the dial. The Dallas Fed’s Kaplan confirmed that “the objective and the initiative to let the balance sheet run off does not alter my views as to what the path of rates should be”.

Looking at the day ahead, this morning in Europe the significant data of note will be the final March CPI revisions in Germany, France and Italy. Away from that we will also get the BoE credit conditions and bank liabilities surveys. This afternoon in the US we’ll get March PPI, initial jobless claims and a first look at the April University of Michigan consumer sentiment survey. Away from the data we’ve got some important earnings releases in the US with Citigroup, JP Morgan and Wells Fargo all reporting prior to or at the US open


i)Late  WEDNESDAY night/THURSDAY morning: Shanghai closed UP 2.13 POINTS OR 0.07%/ /Hang Sang CLOSED DOWN 51.84 POINTS OR .21%  . The Nikkei closed DOWN 125.77 OR 0.68% /Australia’s all ordinaires  CLOSED DOWN 0.72%/Chinese yuan (ONSHORE) closed UP at 6.8883/Oil UP to 53.30 dollars per barrel for WTI and 55.90 for Brent. Stocks in Europe ALL DEEPLY IN THE RED   ..Offshore yuan trades  6.8856 yuan to the dollar vs 6.8883 for onshore yuan. NOW  THE OFFSHORE IS STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN SLIGHTLY STRONGER  AND THE OFFSHORE YUAN  STRONGER TO THE ONSHORE AND THIS IS  COUPLED WITH THE WEAKER  DOLLAR. 



This is scary!! Voice of America claims that North Korea has apparently placed a nuclear device in a tunnel and it could be detonated by Saturday

(courtesy zerohedge)

North Korea Said To Have Placed Nuclear Device In A Tunnel, “Could Be Detonated Saturday Morning”

In a striking development involving the rapidly changing North Korean geopolitical situation, moments ago Voice of America reported Steve Herman reported that according to US government and other sources say, North Korea has “apparently placed a nuclear device in a tunnel and it could be detonated Saturday AM Korea time.”

US gov’t and other sources say has apparently placed a nuclear device in a tunnel and it could be detonated Saturday AM time.

He then quotes an NSA official who had no comment at this time, but said “we will be watching closely.”

“We have no comment at this time but we will be watching closely,” an NSC official tells @VOANews. https://twitter.com/W7VOA/status/852283171546816512 

Saturday in the will be the “Day of the Sun,” celebrating the 105th birth anniversary of North Korea’s founder Kim Il Sung.




A good look at the military strength of both sides of the Korean Peninsula:

(courtesy zero hedge)


Visualizing Korea’s North-South Military Divide

North Korea warned the United States that it would respond to “reckless acts of aggression” after a carrier battle group led by the 97,000-ton USS Carl Vinson was deployed to the Korean peninsula. As Statista’s Niall McCarthy reports, the aircraft carrier is being escorted by a guided-missile cruiser and two destroyers equipped with Aegis technology capable of shooting down any future North Korean test missiles.

Is North Korea’s nuclear program going to be next? That’s the question many experts are asking themselves after American cruise missiles struck a Syrian airbase last week. If the U.S. does carry out a pre-emptive strike, Pyongyang is likely to launch a substantial military retaliation against the south. If that nightmare does one day come to pass, how well equipped is the South Korean military to repel an offensive from the North?

Infographic: The Military Balance On The Korean Peninsula | Statista

You will find more statistics at Statista

The North Korean military has substantially more active (and reserve) troops than the South, though large numbers of its soldiers are underpaid and malnourished. The North also has outdated equipment and its airforce is known to still use 1950 Korean War-era MIG-15 fighters for training purposes.

The South Korean military on the other hand boasts state of the art technology including cutting-edge tanks, warplanes and attack helicopters.

However, Seoul is only 35 miles from the DMZ and due to North’s superority in artillery, it’s highly likely that the South Korean capital would suffer massive damage in a war. Even if the South repelled an invasion, success would come with substantial military and civilian casualties.



Trump reissues his ultimatum to China to fix the North Korean problem or else@!

(courtesy zerohedge)

Trump Issues China Ultimatum: Fix North Korea Now Or We Will

With all eyes back on Syria this morning, President Trump stepped up his rhetoric in the other looming war he is involved in. Implying an ultimatum, he warned China…

I have great confidence that China will properly deal with North Korea. If they are unable to do so, the U.S., with its allies, will! U.S.A.

While China has ‘warned’ North Korea, we suspect they will not like the optics of doing it at the behest of the US president.


Trump then added, seemingly pacifying the other quagmire…

Things will work out fine between the U.S.A. and Russia. At the right time everyone will come to their senses & there will be lasting peace!


Trump’s Armada is steaming towards North Korea.  It seems that Trump want to try additional eocnomic sanctions to paralyze this nation

(courtesy zero hedge)

North Korea’s “Big And Important Event” – A Street Opening!

Amid social media chatter of Pyongyang evacuations, North Korea told foreign journalists to prepare for a “big  and important event” on Thursday (ahead of The Day of The Sun) – conjuring images of nuclear missile tests or Supreme-leader-led military drills. However, the “big and important event” turned out to be… a street opening!

After much secrecy, Beijing Correspondent for Channel News Asia Jeremy Koh reports that foreign reporters in Pyongyang watch Kim Jong Un preside over opening of the skyscraper-lined Ryomyong street…

In fact, as Reuters noted, North Korea often uses such visits to showcase new construction projects.

In recent weeks workers have been putting the finishing touches to the skyscraper-lined “Ryomyong” street in central Pyongyang.

Kim has made frequent visits to the street to inspect construction work there, according to state media. North Korea has in the past marked its April 15 holiday with tightly choreographed military parades.

Is Kim lulling America into a false sense of security?

Or are the skyscrapers a clever ruse to hide ICBM launchpads in clear sight?



Abe claims that North Korea may be capable of sarin tipped missiles

(courtesy zerohedge)

North Korea “May Be” Capable Of Sarin-Tipped Missiles, Japanese PM Warns

If you weren’t scared before, Japanese PM Abe just stepped up to the global fearmongery plate, announcing in parliament that “there is a possibility that North Korea already has a capability to deliver missiles with sarin as warheads.”

As Reuters reports,North Korea may have the capacity to deliver missiles equipped with sarin nerve gas, Japanese Prime Minister Shinzo Abe said on Thursday, amid concerns that the reclusive state could soon conduct its sixth nuclear test or more missile launches.

“There is a possibility that North Korea already has a capability to deliver missiles with sarin as warheads,” Abe told a parliamentary session.

Of course, he offered no evidence, but in this new normal, it seems possibilities trump probabilities.

On many world leaders’ minds is the fact that North Korea marks the 105th anniversary of the birth of state founder Kim Il Sung on Saturday, North Korea’s biggest national day called “Day of the Sun”. Leaders have in the past used the date to carry out weapons tests.



Not sure why China after 13 days decided to provide a huge liquidity injection but they did.  It was either the huge problem with iron ore or in response to the weaker dollar. The offshore yuan rebounds hugely in value as does the onshore yuan.

(courtesy zerohedge)

China Resumes Liquidity Injections After 13 Day Drought, Strengthens Yuan Most In 3 Months

On the heels of chaos in the FX markets created by a non-currency-manipulating President Trump’s comments that the dollar is too strong, Chinese authorities have folded – after 13 days – and resumed liquidity injections through open market operations (70 billion Yuan).


In addition, PBOC strengthened the Yuan Fix by 0.45% – the biggest mover since mid-January.


And offshore Yuan is surging…


One wonders if the sudden liquidity injection is a response to the currency moves or the commodity carnage?


Chinese exports surge in March but Goldman Sachs warns that it will not continue because of their tightening

(courtesy zero hedge/GoldmanSachs)

Chinese Exports Surge Most In 2 Years But Goldman Warns It Won’t Continue

Amid all the chaos of lunar new year adjustments, Chinese exports in March surged 16.4% YoY (-1.3% YoY in Feb) – the biggest jump since Feb 2015. Import growth fell back from February’s surge (but surprised to the upside). Furthermore, China’s trade surplus with the United States, another bone of contention for Trump, widened in March from February.


China’s overall trade surplus rose in March after logging its first deficit in three years in February. With very limited details released so far, we cannot be certain about the drivers of the high March trade growth yet, but the following factors likely contributed according to Goldman:

1. Firm domestic and external demand growth.


2. Higher export and import prices. These prices tend to lag spot market prices and possibly still went up despite the correction in spot market prices. In value terms, iron ore imports went up 101% yoy, higher than 96% yoy in January/February; steel products imports decelerated to 11% yoy, from 18% yoy in January/February; crude oil imports grew 99% yoy, vs. 71% yoy in January/February. In volume terms, iron ore imports went up 11% yoy, lower than 13% yoy in January/February; steel products imports grew 2.4% yoy in March, vs 17.2% yoy in January/February; crude oil imports grew 19.4% yoy, vs. 12.5% yoy in January/February.


3. Low base, especially for exports, which supported year-over-year growth. (March 2016 export sequential growth was -5.9% mom sa)


4. Chinese New Year distortions for both exports and imports but in opposite directions. Exports were distorted on the upside and imports on the downside. The magnitude of the distortions are highly uncertain, but potentially as large as 10 ppt. As a result March trade balance was heavily distorted on the upside, just as February balance was distorted on the downside which resulted in the temporary deficit.


5. Potential over-reporting, especially for imports to avoid capital controls. Export data may be impacted because some of these are done via round tripping.

However, Goldman expects growth in 2Q exports and imports to moderate because:

1. Domestic policy has clearly been tightened in a meaningful way. This will likely cool down domestic demand and with a lag impact external demand as well.


2. Upstream spot market prices already started to correct and will show up in trade data, especially import data as it is more affected by commodity prices.



3. Base (for year-over-year growth calculations) will become significantly higher in 2Q.


4. The government is likely to take action on over-reporting. Nevertheless, given how strong growth has been so far this year, annual growth of both exports and imports will likely be positive, for the first time in 2 years. Trade surplus is likely to be at a multi-year low given the relative strength of import growth.






Syria claims that the USA led coalition hit an iSIS controlled chemical weapons depot and killed hundreds. It is interesting in that this is exactly what the Russians claimed what happened on an earlier strike last week

(courtesy zero hedge)

Syria Claims US-Led Coalition Strike On ISIS Chemical Weapons Depot Has Killed Hundreds

Update 2:  The Pentgaon has admitted to the airstrikes but no details on what was targeted...


Update 1: Russia has reportedly dispatched drones to the area to confirm Syria’s reports. The Russian military said that it has no information confirming the reports of death as a result of the US-led coalition’s strike.

“The Russian Defense Ministry does not possess information confirming reports of deaths and the type of the destruction as a result of the US-led coalition’s bombing near Deir ez-Zor.”


“Unmanned aerial vehicles have been sent to the area to monitor the situation,” the ministry added.

*  *  *

As we detailed earlier, the Syrian General Staff said that the US-led coalition struck an ISIS depot storing chemical weapons in Deir ez-Zor on Wednesday, poisoning and killing several hundred people, including civilians.

As SputnikNews reports, the Syrian military said that this fact proves that terrorists possess chemical weapons.

“The jets of the so-called US-led coalition launched a strike at about 17:30-17:50 [local time, 14:30-14:50 GMT] on a Daesh warehouse where many foreign fighters were present. First a white cloud and then a yellow one appeared at the site of the strike, which points at the presence of a large number of poisonous substances. A fire at the site continued until 22:30 [19:30 GMT],”

The Syrian army yet again denied possessing chemical weapons. According to the Syrian General Staff, the US-led coalition’s strike killed several hundred people, including civilians. Hundreds were poisoned as a result of the strike on Daesh’s headquarters and depot with chemical weapons.

“This confirms that Daesh and al-Nusra terrorists possess chemical weapons and are capable of using, obtaining and transporting it,” the document said.

Furthermore, if true, the US coalition just did exactly what Russia has claimed occurred in the initial chemical attack (that prompted President Trump’s “Tomahawk” torrent). The Russian Defense Ministry said the day after the initial chemical weapons release that an airstrike near Khan Shaykhun was carried out by Syrian aircraft, struck a terrorist warehouse that stored chemical weapons slated for delivery to Iraq.

Of course, the propaganda battle is not over so what we need now is some YouTube clip to ‘prove’ what the US coalition did.



A good look at what is going on inside Turkey.  All of Erdogan’s barks are basically ignored by the west and Russia

(courtesy Bekdil/Gatestone Institute)

Turkey’s Barks And Bites

Authored by Burak Bekdil via The Gatestone Institute,

  • This is the first time that Erdogan is openly challenging a concerted European stand.

Turkey’s foreign policy and the rhetoric that presumably went to support it, has, during the past several years, aimed less at achieving foreign policy goals and more at consolidating voters’ support for the Ankara government.

Self-aggrandizing behavior has predominantly shaped policy and functioned to please the Turks’ passion for a return to their glorious Ottoman past.

Assertive and confrontational diplomatic language and playing the tough guy of the neighborhood may have helped garner popular support for President Recep Tayyip Erdogan and his Justice and Development Party (AKP), but after years of “loud barking and no biting”, Turkey has effectively become the victim of its own narrative.

In 2010, Turkey froze diplomatic relations with Israel and promised “internationally to isolate the Jewish state”, and never to restore ties unless, along with two other conditions, Jerusalem removed its naval blockade of Gaza to prevent weapons from being brought in that would be used to attack Israel. Turkey’s prime minister at the time, Ahmet Davutoglu, said Israel would “kneel down to us”.

In 2016, after rounds of diplomatic contacts, Turkey and Israel agreed to normalize their relations. The blockade of Gaza, to prevent shipments of weaponry to be used by Gazans in terror attacks remains in effect.

In 2012, Davutoglu claimed that Syrian President Bashar al-Assad’s days in power were numbered, “not by years but by weeks or months”. In 2016, Davutoglu had to step down as prime minister, but Erdogan’s and his worst regional nemesis, Assad, is in power to this day, enjoying increased Russian and Iranian backing. In 2012, Erdogan said that “we will soon go to Damascus to pray at the Umayyad mosque” — a political symbol of Assad’s downfall and his replacement by pro-Turkey Sunni groups. That prayer remains to be performed.

In November 2015, shortly after Turkey shot down a Russian Su-24 military jet and cited violation of its airspace, Erdogan warned Russia “not to play with fire.” As for the Russian demands for an apology, Erdogan said it was Turkey that deserved an apology because its airspace had been violated, and that Turkey would not apologize to Russia.

In June 2016, just half a year after Russia imposed a slew of economic sanctions on Turkey, Erdogan apologized to Russian President Vladimir Putin.

In July 2016, Erdogan apologized for downing a Russian plane, and in August he went to Russia to shake hands for normalization. Pictured: Russian President Vladimir Putin with Turkey’s then Prime Minister Erdogan, meeting in Istanbul on December 3, 2012. (Image source: kremlin.ru)

Erdogan and his government have countless times warned the United States not to side with the Syrian Kurds –whom Turkey views as a terrorist group– in the allied fight against radical jihadists of ISIL’s Islamic State. In March 2017, Washington denied that Syrian Kurds were a terrorist group and pledged continued support for them.

Erdogan’s Turkey has done more than enough to show that its bark is worse than its bite. Yet it keeps barking badly. This time, the enemy to bark at, not bite, is Europe. This is the first time that Erdogan is openly challenging a concerted European stand.

In a recent row between several European capitals and Ankara over Erdogan’s ambitions to hold political rallies across Europe to address millions of Turkish expatriates, the Turkish president said he would ignore that he was unwelcome in Germany and would go there to speak to his Turkish fans.

In response, the Dutch government deported one of Erdogan’s ministers who had gone uninvited to the Netherlands to speak to the Turkish community there.

Germany launched two investigations into alleged Turkish spying on German soil.

Similarly, Switzerland opened a criminal investigation into allegations that Erdogan’s government had spied on expatriate Turks.

In Copenhagen, the Danish government summoned the Turkish ambassador over claims that Danish-Turkish citizens were being denounced over views critical of Erdogan.

The barking kept on. In Turkey, Erdogan warned that Europeans would not be able to walk the streets safely if European nations persist in what he called “arrogant conduct.” That comment caused the EU to summon the Turkish ambassador in Brussels to explain Erdogan’s threatening language.

Farther east, in the rich European bloc, several hundred Bulgarians blocked the three main checkpoints at the Bulgarian-Turkish border to prevent Turks with Bulgarian passports, but who were living in Turkey, from voting in Bulgarian elections. The protesters claimed that Turkish officials were forcing expatriate voters to support a pro-Ankara party.

Meanwhile, at the EU’s southeast flank, Greece said that its armed forces were ready to respond to any Turkish threat to the country’s sovereignty and territorial integrity.

What happened to Erdogan’s promised “bite” that he could go to Germany to speak to the Turkish community despite repeated German warnings that he would not be welcome? “I will not go to Germany,” he said on March 23.

Erdogan may be winning hearts and minds in Turkey with his neo-Ottoman Turkey “barks.” But too few foreign capitals find his threats serious, too few politicians think that he is convincing and too many people tend to believe Turkey’s bark is worse than its bite.

The recent wave of European constraints against Erdogan shows that, for the first time in recent years, Europe does not seem to fear Erdogan’s bluffing and thuggishness.

At the moment, Erdogan’s priority is to win the referendum on April 16 that he hopes will change the constitution so that he can be Sultan-for-life. Picking fights with “infidel” Europeans might help him garner more support from conservative and nationalist Turks.

When the voting is done, however, he will have to face the reality that an alliance cannot function forever with one party constantly blackmailing the other.




A terrific commentary by Wolf Richter describing the irrational exuberance in my home city of Toronto. He claims that the government must continue with this game or else face a total collapse

(courtesy Wolf Richter/WolfStreet)


“Canada: Irrational Exuberance?” Wild Housing Speculation Drives Entire Economy

Why everyone is afraid of breaking the addiction.

Here’s another data point on the Canadian housing bubble, how immense it really is, and how utterly crucial wild housing speculation has become to the Canadian economy.

Housing starts surged to 253,720 units in March seasonally adjusted, the highest since September 2007, according to Canada Mortgage & Housing Corp. Of them, 161,000 were multi-family starts of condos and rental units in urban areas. In Toronto, one of the hot beds of Canada’s house price bubble, housing starts jumped by 16,600 units, all of them condos and apartments, defying any expectation of a slowdown.

Housing starts are an indication of construction activity, a powerful additive to the local economy with large secondary effects. Housing construction gets fired up by the promise of ever skyrocketing housing prices, and thus big payoffs for developers, lenders, real estate agents, and the entire industry.

National home price data covers up the real drama in certain cities, particularly Vancouver (British Columbia) and Toronto (Ontario), but it does show by how much Canadian housing prices have overshot the already lofty US housing prices.

The chart below by Stéfane Marion, Chief Economist at Economics and Strategy, National Bank of Canada, compares US home prices per the Case-Shiller 20-City index to Canadian home  prices per the Teranet-National Bank 26-market index. Both indices are based on similar methodologies of comparing pairs of sales of the same home over time. The shaded areas denote recessions in Canada. Note that during the housing crisis in the US, there was only a blip in Canada’s housing market:

Marion added in his note today:

Home price inflation has become THE hot topic of discussion in Canada. Surging prices are no longer confined to greater Toronto and Vancouver. As today’s Hot Chart shows, we estimate that close to 55% of regional markets in Canada are reporting price inflation of at least 10%.

This record proportion is very similar to that observed in the United States in 2005 at the peak of the market.

When 55% of the market is on fire, the use of interest rates to cool things down is justifiable. The Bank of Canada must change its narrative and abandon its easing bias as soon as this week.

He was referring to the Bank of Canada’s meeting this Wednesday.

How important is real estate and housing construction to the Canadian economy? Hugely important! It accounts for an ever larger proportion of the Canadian economy. For all of Canada, according to data by Statistics Canada, housing construction and real estate activities combined account for 15.5% of GDP, up from 14.7% in 2011.

This chart shows housing construction and real estate activities in the largest four provinces as percent of the province’s GDP in 2015, and for Canada overall. StatCan data for 2016 are not yet available. Note British Columbia: 22% of its economy is based on residential construction and real estate activities – due to Canada’s number one housing hot-bed Vancouver:

This is why neither the Bank of Canada nor the governments at the provincial and federal levels are eager to step on the brakes. BC tried with its housing transfer tax aimed at foreign non-resident investors. After it was instituted last summer, it temporarily froze up the market, with sellers and buyers too far apart, and transactions plunged.

By December, only four months after the transfer tax was implemented, the prospects for 22% of the provincial economy heading into a sharp decline or even a major bust motivated the BC government to step back on the accelerator to prolong the speculation – with an ingenious trick.

The province began offering a subsidy to first-time homebuyers: an interest free loan for a down payment of up to $37,500 to match the buyer’s own down payment. It was an effort to allow buyers to get around the down-payment requirements set by the federal government designed to curb wild housing speculation.

It seems the BC government has figured something out: if anything curbs this housing speculation, on which the province is so dependent, the overall economy is going to tank.

Canadian cities are desperately dependent on property taxes for their budgets. Toronto, for example, is facing major budget strains. In February, city councilors approved a 3.3% increase in the residential property tax and they raised the municipal land transfer tax. Under the new budget, property taxes would provide 38% of the revenues, and the land transfer tax 7%, for a total of 45% of the C$10.5 billion in tax revenues for this fiscal year. In other words, the city will extract a record C$4.7 billion from property owners to delay falling into a fiscal and financial sinkhole.

That kind of tax extraction is bearable for property owners only as long as the value of their property soars year after year. Once that value declines, owning this property becomes a massive liability.

This is why the housing bubble and the accompanying crazy housing speculation must be maintained and further inflated, no matter what. It has become an addictive drug for the Canadian economy. Average household indebtedness is among the highest in the world. Many households are carrying little or no debt. But many others are suffocating under a mountain of debt, and a sharp decline in house prices would wreak havoc among them.

The entire economy – including government revenues and thereby the services offered by these governments – depends on wild property speculation. And everyone is praying that it can somehow be maintained.

So are these prices based on fundamentals? You gotta be kidding. Read…  Toronto House Price Bubble Goes Nuts



Rig counts in the USA surge to a 2 yr high and this will play havoc to our OPEC production cuts.  No question about it: the shale boys will kill the oil rally!

(courtesy zero hedge)

US Oil Rig Count Surges To 2-Year High – Will Shale Kill The Oil Rally Again?

For the 14th straight week, US oil rig counts rose (by 11 to 683). This is the highest since April 2015.

and leads US crude production to its highest level since Aug 2015.


The question is, as OilPrice.com’s Nick Cunningham asks, will Shale kill off the recent oil price rally again?

WTI has rallied more than 11 percent over the past month, raising hopes from oil bulls that maybe, just maybe, the price gains are here to stay. Oil had dipped in February and March on record high levels of oil sitting in U.S. storage, but by April, the market is starting to look tighter.

The oil market bust is closing in on the three-year mark, and there are growing signs that things could finally be moving in the right direction.

Despite the record high levels of crude oil storage in the U.S., inventories are falling pretty much everywhere else. South Africa, the Caribbean, Nigeria, and Iran are all reporting lower inventory figures, although the reasons vary. Iran cleared out its fleet of floating storage, which had built up during years of sanctions that prevented the Islamic Republic from exporting to its full potential. That backlog of oil has now been worked through and Iran could have trouble lifting exports. In fact, Iran’s exports have been flat since last summer.

Europe also has high levels of oil and refined products sitting in storage, but total levels are down from 2016. And like the U.S., the past few months have been quiet ones for refiners. That suggests that inventories should start seeing some more meaningful declines in the months ahead as refineries ramp up.

(Click to enlarge)

According to FGE, and reported on by Reuters, total product stocks across the U.S., the Amsterdam-Rotterdam-Antwerp region, plus Singapore and Japan, declined by a combined 6.5 million barrels – a sign of market tightening. Storage is still exceptionally high, but converging down towards long-run averages. Outside the U.S., accurate data is hard to come by, so these snippets offer some clues into broader market trends.

“Across the first quarter of the year, crude stocks built by much less than they did in the first quarter of last year even though refinery maintenance globally was much heavier,” Energy Aspects analyst Richard Mallinson told Reuters.

According to SEB, even the record high levels of U.S. inventories are not as bad as they seem. While the buildup is in part due to rising production, they are also the result of refining maintenance season. Lower refining runs means fewer barrels bought up by refiners, which leads to higher storage. But that is, of course, a seasonal trend. With the driving season rapidly approaching, U.S. inventories are expected to decline.

American motorists should start to feel the effects of a tightening market. Gasoline prices across the U.S. jumped by an average of 11 cents per gallon this month, sitting at $2.42 per gallon. That is now the highest national average since September 2015.

Market sentiment is starting to turn bullish. For the week ending on April 4, hedge funds and other money managers stepped up their net-long positioning, the first increase in six weeks, reflecting a general feeling that the recent dip into the $40s was temporary. Related: Is The Oil Price Rally Running Out Of Steam?

Looking forward, there are more reasons to be bullish. Demand is on the rise. Saudi Arabia just announced that it had cut deeper in March, taking output down to 9.9 million barrels per day. The OPEC extension seems to be on track. Also, driving season and the end of refining maintenance should start to drain U.S. inventories, which is arguably the most important metric right now holding back more gains in oil prices. “People have been picking up on the bullish indicators in the market ahead of the seasonal draw in crude stocks,” David Wech, an analyst at JBC Energy GmbH, told Bloomberg.

But there is also the chance that the more than 10 percent rally in oil prices over the past month starts to fizzle – once again disappointing traders who are betting on rising prices. Although bullish bets on WTI futures increased recently, the positioning is more balanced than it has been for most of this year, reducing the speculative pressure on crude prices on the upside.

Then there is the comeback of U.S. shale to consider. Production is up to 9.2 mb/d and rising, a gain of nearly 700,000 bpd from last summer.



Venezuela continues on a downward spiral.  However it did pay 2.6 billion uSA bond payment.  It has another 62 billion due in the next two years.  Please recall that Russia has lent money to PDVSA and received collateral, its 49% interest in USA CITGO, an integrated oil and gas company with 800 gas stations. If PDVSA defaults then it is inevitable that Russia will control gas stations in the USA

(courtesy zero hedge)

Despite “Ruthless Economic War”, Venezuela, PDVSA Avoid Default With $2.6 Billion Payment

Bondholders confirmed that Venezuela’s state-owned oil company PDVSA made principal and interest payments of $2.2 billion today, avoiding default yet again despite what Vice President Tareck El Aissami called a “ruthless economic war” being waged against the Maduro government.


That’s the good news, the bad news is that PDVSA has $62 billion more in principal and interest due over the next few years…


As Reuters reports, President Nicolas Maduro’s government has met commitments to Wall Street investors for years by slashing imports of basic goods such as food and medicine, spurring chronic product shortages. Maduro says the country is victim of an “economic war” led by opposition businesses.

“Despite the ruthless economic war, in conspiracy with local media and foreign news agencies, spurred by imperialists and their internal cronies … the revolutionary government has paid $2.557 billion,” El Aissami said in a statement on Twitter.


The payments due on Wednesday included interest and principal on PDVSA’s maturing 2017 bond as well as interest on its 2027 and 2037 notes.


PDVSA’s bonds were up across the board, with the benchmark 2022 rising 1.750 points to yield 31.404 percent.


Venezuela’s bonds are the highest-yielding of any emerging market security due to concerns about default.


Maduro has dismissed default talk as a smear campaign against his administration.

He may want to ‘swap’ some more of his nation’s assets with China soon though as Reserves just hit a new 15 year low…


And as we noted previoously, as OPEC begins to discuss extending the cut, in part to combat a flood of U.S. supply, Venezuela’s role in the world oil market amplifies. Convincing a financially weak quasi-dictatorship to slow down the production of its country’s primary economic asset is a tough sell. And yet, this is likely what members of the Organization of Petroleum Exporting Countries will have to do with Venezuela in order to meaningfully curb global oil supply.

Oil prices will be particularly sensitive to Venezuela’s role in the next few months, with one of two extreme outcomes likely to occur, both of which will miss OPEC’s target forecasts for Venezuela. In the first scenario, as Venezuela continues to prioritize debt servicing above all else, Venezuelan President Nicolas Maduro may find ways to marginally boost production, eroding the 8 percent of OPEC’s planned production cuts the country accounts for. The second scenario would see an escalation of Venezuela’s current crisis, preventing the country from importing the necessary light crude it needs to blend with its heavy oil. This would see Venezuela production falling below OPEC’s predictions, providing a needed and unexpected boost to global oil supply cut efforts. These scenarios would carry vastly different consequences, both of which need to be considered in any analysis of the evolving OPEC supply management saga.

Scenario 1: Drill, Baby, Drill!

With creditors tightening their grip on Venezuela’s gasping financial throat, Maduro is stuck in a chess game where pressing the proverbial “drill, baby, drill” button may be the only option, given his complete dismissal of the option of default. Venezuela’s state-owned PDVSA recently announced it will indeed make its slated $2.1 billion bond payment on April 12, easing recent default concerns.

In addition to the servicing of upcoming scheduled payments, Venezuela’s production is shackled by an oil-for-loan agreement with China that Venezuela already owes a significant backlog on, according to Reuters. Over a quarter of Venezuela’s daily oil production could already be committed to this agreement, if the requirements match those analyzed by a November Harvard research paper by Igor Hernandez and Francisco Monaldi. Once the grace period China allotted expires, they write, “the government’s debt agreements with China involve a significant and increasing amount of production.”

Debt service is not the only aggressor inflicting wounds upon the idea of cutting production. Social programs and other fiscal expenditures in Venezuela are heavily dependent on the revenues from crude oil, because oil generates 40-70 percent of government income in Venezuela, with the range depending on the price of oil. Continued low oil prices pose two risks to government spending: first, the obvious cut that comes from decreased oil prices; and secondly, the high breakeven costs in the Orinoco Oil Belt may eventually force Maduro to exercise the option of lowering royalties in the field to encourage new projects.

What this means for Venezuela’s oil production is simple: if the country is to continue to service its debt – something Maduro swears by – and maintain its current fiscal spending levels, the country is without any option aside from maintaining or expanding production. What’s more is the move towards one-man rule could boost Venezuela’s oil production, as the recently overruled legislature was standing in the way of Maduro’s plan to add joint-ventures in his plan to generate quick cash.

This poses a challenge for oil bulls and decreases the odds that OPEC can count on Venezuela to deliver a further production cut should the cartel move forward with an extended cut agreement. If it does not originate in Venezuela, the 8 percent cut expected from Venezuela must come from some other country, a fact that could create damaging tensions in OPEC negotiations.

Scenario 2: Not So Fast, Maduro!

The answer to Venezuela’s financial problems is not as simple as just drilling for more oil; in fact, operational and systematic challenges limit the amount of crude Venezuela can produce in almost the same way that debt servicing requirements and government demands limit the amount of production Venezuela can afford to cut.

These operational challenges and financial difficulties could generate a larger than expected cut from Venezuela. Over the past decade, missed payments and the downward political spiral drove many risk-averse foreign operators out of the country. Why invest in a country where receiving payment is akin to betting on a game of roulette? Better yet, a rigged game of roulette.

Due to this unfavorable investment environment “the number of active rigs [in Venezuela] has declined from 70 in December of 2015 to 51 in September of 2016.” Thus, the drilling situation itself is a function of the uncertainty that cements Venezuela’s position as a mysterious wild card in forecasts of world oil supplies. Venezuela’s oil production was already hurting from low prices and low investment, with total production declining 253,000 barrels per day between 2010 and the end of 2015; the persistence of an unfavorable investment environment in the country only exacerbates the issue, discouraging foreign operators from investing in Venezuela.

Venezuela’s reserves, which consist mostly of heavy crude, are particularly sensitive to the current low oil price environment. Not only do these reserves become uniquely unattractive to developers relative to other potential investments in a low oil price environment, but they also require substantial spending on imports of lighter crudes. These imports, which are required in order to make a marketable product, recently slipped  a trend that will further complicate supply issues.

Certain Uncertainty

In the near-term, Venezuela is set to surprise oil markets and potentially rock OPEC’s plans, regardless of whether its production slips or Maduro finds a way to encourage developers to crank up drilling to generate quick cash. The drama unfolding in Venezuela is sure to come to a head as its next debt payments come due, and oil markets will be watching its production closely.

History has shown time and time again that regimes that neglect the welfare of the people eventually collapse upon themselves. It may take months, years, or even decades, but eventually, they all come falling down. But until this collapse happens, the political turmoil will continue to complicate pending OPEC conversations and add an additional layer of uncertainty to the oil markets. There may be a degree of certainty in the long-term trajectory of the Maduro regime, but predicting the fate of Venezuela’s forecasted supply cuts in the short-term is a near impossible task.


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



GBP/USA 1.2531 DOWN .0018 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED


Early THIS THURSDAY morning in Europe, the Euro FELL by 44 basis points, trading now BELOW the important 1.08 level  FALLING to 1.0626; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED UP 2.13 POINTS OR 0.07%    / Hang Sang  CLOSED DOWN 51.84 POINTS OR 0.21%/AUSTRALIA  CLOSED DOWN 0.72%  / EUROPEAN BOURSES : ALL DEEPLY 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 THURSDAY morning CLOSED DOWN 125.77 POINTS OR 0.68%

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


Gold very early morning trading: $1287.25


Early THURSDAY morning USA 10 year bond yield: 2.237% !!! DOWN 1 IN POINTS from WEDNESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%. THE RISE IN YIELD WITH THIS SPEED IS FRIGHTENING

 The 30 yr bond yield  2.8850, DOWN 1  IN BASIS POINTS  from WEDNESDAY night.

USA dollar index early THURSDAY morning: 100.41 DOWN 37  CENT(S) from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING


And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 3.884%  UP 2  in basis point(s) yield from WEDNESDAY 

JAPANESE BOND YIELD: +.031%  UP 1/5  in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.706%  up 3 IN basis point yield from WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.317 UP 2 POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 62 points HIGHER than Spain.





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

Euro/USA 1.0628 DOWN .0041 (Euro DOWN 41 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 109.21 UP: 0.328 (Yen DOWN 33 basis points/ 

Great Britain/USA 1.2518 DOWN 0.0031( POUND DOWN 31 basis points)

USA/Canada 1.3270 UP 0.0025(Canadian dollar DOWN 25 basis points AS OIL FELL TO $53.00


This afternoon, the Euro was DOWN by 34 basis points to trade at 1.0628


The POUND FELL BY 31  basis points, trading at 1.2518/

The Canadian dollar FELL by 25 basis points to 1.3270,  WITH WTI OIL FALLING TO :  $53.00

The USA/Yuan closed at 6.8864/
the 10 yr Japanese bond yield closed at +.031% UP 1/5 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 3  IN basis points from WEDNESDAY at 2.255% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.906 down 3  in basis points on the day /

Your closing USA dollar index, 100.44 DOWN 34  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 21.40 OR 0.29% 
German Dax :CLOSED DOWN 45.70  POINTS OR 0.38%
Paris Cac  CLOSED DOWN 30.01 OR 0.59%
Italian MIB: CLOSED DOWN  231.25 POINTS OR 1.16%

The Dow closed DOWN 138.61 OR 0.67%

NASDAQ WAS closed DOWN 31.01 POINTS OR 0.53%  4.00 PM EST
WTI Oil price;  53,00 at 1:00 pm; 

Brent Oil: 55.58 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: $55.65


USA 30 YR BOND YIELD: 2.888%


USA/JAPANESE YEN:109.13   UP 0.248

USA DOLLAR INDEX: 100.58  UP 39  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2503 : DOWN .0046  OR 46 BASIS POINTS.

Canadian dollar: 1.3324  UP .0080 (CAN DOLLAR DOWN 80 BASIS PTS)

German 10 yr bond yield at 5 pm: +.187%


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


“Mother Of All Bombs” Sends Stocks To 2-Month Lows Amid Safe-Haven Scramble

Bank stocks down on earnings day… “inconceivable”


*  *  *

And all it took to break the Trump trade was the mother of all bombs…


The S&P and Dow closed the week at 2-month lows…


All the major indices are below their 50-day moving average…


Bank earnings were a bust – headlines looked good but hid a lot of ugliness – investors finally woke up…


And banks are down hard YTD..


Treasury yields lower for 4th straight day. This was the 5th straight week of declines in 10Y yields and the biggest weekly drop in 10Y yields since June 2016


It seems bonds just got too attractive relative to stocks once again…


The Dollar Index retraced over 50% of the Trump “Dollar too strong” plunge…


Yen was the biggest mover on the week…


As the Yuan strengthens against the dollar, Bitcoin has tumbled in the last few days…


Gold, silver, and crude (though the daily win streak is over) gained on the week, copper and the industrial metals were hammered…


*  *  *

As we head into the long weekend, here are a few charts to consider…

The ‘real’ data just isn’t there…


But that doesn’t matter… (yet)


The market also appears to be ignoring the panic-hedging…


Bond-Stock correlation has normalized after breaking last year… echoing very similar structural shifts from 2007’s top…


Trumpflation trades are breaking down…


And banks are waking up to the Treasury Curve collapsing…


As is the VIX Term Structure…



trading today:

Bank stocks whacked!

Banks Are Getting Battered (As Investors Actually Read Earnings Reports)

Judging by the exuberant comments from analysts and TV anchors, one would imagine US banks would be soaring. But having dug below the public-relations-spin surface, the results are anything but encouragingsurging credit card charge-offs, tumbling mortgage issuance, and flat NIMs – this is not what the talking heads promised…



Year-to-Date, everything is red…


And if you’re surprised by JPMorgan’s drop, don’t be…

A big story…Government revenues are faltering badly. In March, the USA treasury brought in total receipts of $216 billion well below $228 billion expected.  However March recorded a massive 392 billion outlay. Thus a deficit in March of $176 billion instead of $167.For six months the deficit is already$527 billion, and no doubt the deficit for the year will exceed 1 trillion dollars.  Also may I remind you that in the deficit totals they do not include student loans and auto loans because they deem them assets!!!


(courtesy zero hedge)

Recession Alert: Government Revenues Suffer Biggest Drop Since The Financial Crisis

On the surface, today’s monthly budget statement was disappointing: in March the US Treasury brought in total receipts of $216 billion, below the $228 billion last March, versus outlays of a record $392 billion, resulting in a deficit of $176 billion, more than the $167 billion expected, and $68 billion more than the previous year. For the fiscal year through March 31, the total US budget deficit was $527 billion, compared to $459 billion on year ago.

Declining government revenue and long-term costs associated with an aging population are expected to continue pushing up the deficit. Over the past 12 months, the deficit stood at $651.5 billion, compared with $460.6 billion a year ago, an increase of over 40% Y/Y.

On a 12 month run-rate, the US deficit stood at 3.1% of GDP. A year earlier, that figure was a third less, or 2.2%.

More troubling is that in March the US government had its biggest one month outlay ever, spending a record $392.8 billion, $57 billion or 17%  higher than a year ago.

The break down of March spending was as follows:

  • Defense: $58 billion
  • Social Security: 79 billion
  • Medicare: $75 billion
  • Interest on debt: $30 billion
  • Other: $151 billion

However, the most concerning picture emerges when looking at the annual change in the rolling 12 month total. It is here that we find that, like last month, in the LTM period ended March 31, total federal revenues, tracked as government receipts on the Treasury’s statement, were $3.264 trillion. This amount was 1.3% lower than the $3.31 trillion reported one year ago, and was the fourth consecutive month of declines. This was also the biggest drop since the summer of 2008.

Why is this important? Because as the chart below shows, every time since at least 1970 when government receipts have turned negative on an annual basis, the US was on the cusp of, or already in, a recession. Indicatively, the last time government receipts turned negative was in July of 2008.

One potential mitigating factor this time is that much of the collapse in receipts is due to a double digit % plunge in corporate income tax, which begs the question what are real corporate earnings? While we keep hearing that EPS are rising, at least for IRS purposes, corporate America is in a recession. As for that far more important indicator of overall US economic health, and biggest contributor to government revenue, individual income taxes? As of February, the YTD number was $695Bn, just fractionally higher than the same period a year ago.

Weak corporate profits have weighed on government finances in recent years amid sluggish global economic growth, depressed energy prices and a strong dollar, among other factors. At the same time, government spending continues to rise as the population grows older and more people qualify for Social Security and Medicare.

The latest, and most troubling budget report in this economic cyle, comes as the Trump administration and Republicans in Congress are weighing proposals to further cut corporate taxes, which would lead to even steeper declines in government receipts, while boosting spending on infrastructure, which are likely to spark a broader debate about tax and spending policies.

As to whether the 4th consecutive decline in tax receipts is indicative of a recession as it has been in the past, we’ll just have to wait. If Trump indeed wants a lower dollar and even lower interest rates, this may be just the catalyst that assures he gets precisely what he wants, killing any hopes of Fed rate hikes for the foreseeable future



Wells Fargo tumbles considerably after Warren Buffet dumps 9 million shares

(courtesy zerohedge)

Wells Fargo Tumbles To Lowest Since November After Buffett Dumps 9 Million Shares

In an effort to keep its stake below 10%, Berkshire Hathaway has dumped 7.13 million shares of Wells Fargo in the last 2 days and intends to sell 1.86 million more shortly. The after-hours reaction in the stock is negative, dropping the bank’s share price to its lowest since Nov 2016, despite reassurances from Buffett that this is a more technical sale.



Full Statement:

Later today, Berkshire Hathaway Inc. will file a Form 4 – “Statement of Changes in Beneficial Ownership” with the Securities and Exchange Commission reporting the sale of 7,134,447 shares of Wells Fargo & Company (“Wells Fargo”) common stock during the period between April 10th and April 12th.

In the near future, we intend to sell 1,865,553 shares of Wells Fargo common stock in addition to the shares that are being reported on today’s Form 4. These sales are not being made because of investment or valuation considerations. Rather they are solely motivated by the desire to return to a percentage ownership below the 10% notification threshold under the Change in Bank Control Act of 1978 and Regulation Y (Bank Holding Companies and Change in Bank Control).

A little over a year ago, repurchases by Wells Fargo of its common stock caused Berkshire’s ownership interest in Wells Fargo to exceed 10%. As a result, Berkshire filed a Notice of Change in Control with the Board of Governors of the Federal Reserve System. While we then had no intention to purchase more shares of Wells Fargo we recognized that our percentage interest would slowly creep up if Wells Fargo continued to purchase shares.

After several months of discussions with representatives of the Federal Reserve, we have concluded that the commitments that would be required of us by the Federal Reserve to retain ownership of 10% or more of Wells Fargo’s outstanding common stock would materially restrict our commercial activity with Wells Fargo. Therefore, it would be simpler to keep our ownership below 10%. Accordingly, on April 7, 2017, we informed the Federal Reserve that we were withdrawing our filing and that we intend to reduce our ownership in Wells Fargo common stock below 10% within 60 trading days.

We will monitor the outstanding share count of Wells Fargo in the future and, if necessary sell shares in amounts to keep our ownership interest slightly below 10%. Berkshire has no present intention to sell Wells Fargo shares in amounts beyond the quantity required to provide a small safety margin below 10%.



No wonder Buffet sold his stock in a hurry:  Wells Fargo’s mortgage application tumbled by 23 billion dollars to only 59 billion dollars in the 4th quarter. In the prior quarter, alarm bells went off when it plunged by 25 billion dollars down to 75 billion.

(courtesy zero hedge)

Wells Just Reported The Worst Mortgage Number Since The Financial Crisis

When we reported Wells Fargo’s Q4 earnings back in January, we drew readers’ attention to one specific line of business, the one we dubbed the bank’s “bread and butter“, namely mortgage lending, and which as we then reported was “the biggest alarm” because “as a result of rising rates, Wells’ residential mortgage applications and pipelines both tumbled, specifically in Q4 Wells’ mortgage applications plunged by $25bn from the prior quarter to $75bn, while the mortgage origination pipeline plunged by nearly half to just $30 billion, and just shy of all time lows recorded in late 2013 and 2014.”

Fast forward one quarter when what was already a troubling situation, just got as bad as it has been since the financial crisis for America’s largest mortgage lender, because buried deep in its presentation accompanying otherwise unremarkable Q1 results (EPS small beat, revenue small miss), Wells just reported that its ‘bread and butter’ is virtually gone, and in Q1 the amount of all-important Mortgage Applications has tumbled by a whopping 23% to just $59 billion, below the lows hit in early 2014, and at fresh lows since the financial crisis.

And while Wells’ application pipline was not quite as dire, it too was just shy of fresh post crisis lows at only $28 billion, in line with the lowest numbers reported this decade.

The lagging mortgage originations number was nearly as bad, plunging 39% sequentially from $72 billion to only $44 billion, “due to higher rates and seasonality.” Since this number lags the mortgage applications, we expect it to post fresh post-crisis lows in the coming quarter.

What these number disturbingly reveal, is that the average US consumer can not afford to take out mortgages at a time when rates rise by as little as 1% or so, which is where they peaked in the first quarter. It also means that if the Fed is truly intent in engineering a parallel shift in the curve of 2-3%, the US can kiss its domestic housing market goodbye.

Source: Wells Fargo




Soft data University of Michigan Confidence index rebounds

(courtesy zero hedge)

UMich Confidence Rebounds As Political Polarization Plunges To Worst Since Obama’s Election

Political polarization among Americans has swung to its most tilted towards Republicans since President Obama’s election.

Source: Bloomberg Comfort Index

But this has not stopped the majority of Americans being more upbeat as UMich printed 98.0 for April (better than expected and up from March). Current Conditions are at their highest level since Nov 2000…

Notably, partisanship had no impact on the Current Conditions Index (Democrats and Republicans differed by just 0.4 points), but while respondents suggest the beginning of a convergence on the Expectations Index, with the figure for Democrats rising 7% and falling for Republicans by 7%; the gap still remained an astonishing 50.5 Index points.

A slow pace of convergence will make it more difficult to disentangle political fervor from what appears to be a growing sense among consumers that the economy will experience fundamental changes in the years ahead. It can be anticipated that optimism will commingle with uncertainty, causing uneven spending patterns across months. Moreover, differential price trends for assets, products, and imports will cause uneven trends in incomes, wealth, and spending across products as well as economic subgroups.



Well that sure ended fast:  The Donald has now flipped on five key campaign promises in 24 hours:

1.Goodbye to the strong USA dollar

2.China is not a currency manipulator

3.NATO is needed

4. Yellen may be invited back to the Fed in 2018

5. He now supports to the IMPORT-EXPORT back to which he was opposed during the election


(courtesy zero hedge)

Trump Flips On Five Core Key Campaign Promises In Under 24 Hours

Blink, and you missed Trump’s blistering, seamless transformation into a mainstream politician.

In the span of just a few hours, President Trump flipped to new positions on several core policy issues, backing off on no less than five repeated campaign promises.

In a WSJ interview and a subsequent press conference, Trump either shifted or completely reversed positions on a number of foreign and economic policy decisions, including the fate of the US Dollar, how to handle China and the future of the chair of the Federal Reserve.

Goodbye strong dollar and high interest rates

In an announcement that rocked currency markets, Trump told the WSJ that the U.S. dollar “is getting too strong” and he would prefer the Federal Reserve keep interest rates low.  “I do like a low-interest rate policy, I must be honest with you,” Mr. Trump said. “I think our dollar is getting too strong, and partially that’s my fault because people have confidence in me. But that’s hurting—that will hurt ultimately,” he added. “Look, there’s some very good things about a strong dollar, but usually speaking the best thing about it is that it sounds good.”

Trump then said the one thing that every other currency manipulator realizes all too well: “It’s very, very hard to compete when you have a strong dollar and other countries are devaluing their currency.

During his campaign Trump had repeatedly said that a “strong dollar” policy would be beneficial for the US economy, despite our repeat warnings that he will inevitably reverse on this, especially if and when the “Goldman” circle of advisors starts providing macroconomic advice.

It is unclear if the shift in Trump’s policy will mean that US economic data will now “mysteriously” begin to deteriorate to justify not only his request for a weaker dollar, but to also hit the breaks on Yellen’s plans for further rate hikes over the next 2-3 years. In any case, the debate over the Fed’s balance sheet unwind, and the trajectory of Fed hikes, is now on indefinite hiatus.

The biggest loser here, again, are America’s savers who may have been hoping that their bank deposits will finally earn some interest.

As for the most notable outcome from this Trump statement, is that it counters his “desire” for a weaker dollar with the Fed’s tightening bias. Will fireworks fly as Trump realizes that Yellen’s actions are prompting the strong dollar? Stay tuned for what may be the most entertaining clash yet: Trump vs Yellen.

* * *

Labeling China a currency manipulator

Trump also told the Wall Street Journal that China is not artificially deflating the value of its currency, a big change after he repeatedly pledged during his campaign to label the country a currency manipulator.

“They’re not currency manipulators,” the president said, adding that China hasn’t been manipulating its currency for months, and that he feared derailing U.S.-China talks to crack down on North Korea. Trump routinely criticized President Obama for not labeling China a currency manipulator, and promised during the campaign to do so on day one of his administration.

Trump’s declaration also means that Peter Navarro may as well pack his bags, as the Goldman economic advisory team has now won its contest with the “Bannon nationalist” circle.

* * *

Yellen’s future

Trump also told the Journal he’d consider re-nominating Yellen to chair the Fed’s board of governors, after attacking her during his campaign.” I like her. I respect her,” Trump said, “It’s very early.”

Trump called Yellen “obviously political” in September and accused her of keeping interest rates low to boost the stock market and make Obama look good. “As soon as [rates] go up, your stock market is going to go way down, most likely,” Trump said. “Or possibly.”

* * *

Export-Import Bank

Trump also voiced support behind the Export-Import Bank, which helps subsidize some U.S. exports, after opposing it during the campaign.

“It turns out that, first of all, lots of small companies are really helped, the vendor companies,” Trump told the Journal. “Instinctively, you would say, ‘Isn’t that a ridiculous thing,’ but actually, it’s a very good thing. And it actually makes money, it could make a lot of money.”

Trump’s support will anger conservative opponents of the bank, who say it enables crony capitalism.

* * *


Finally, Trump said NATO is “no longer obsolete” during a Wednesday press conference with NATO Secretary General Jens Stoltenberg, backtracking on his past criticism of the alliance. During the campaign, he frequently called the organization “obsolete,” saying did little to crack down on terrorism and that its other members don’t pay their “fair share.”

“I said it was obsolete. It is no longer obsolete,” the president said Wednesday.

Trump has gradually become more supportive of NATO after it ramped up efforts to increase U.S. and European intelligence sharing regarding terrorism. Trump still insisted that NATO allies “meet their financial obligations and pay what they owe.” He said he discussed with Stoltenberg his desire that allies put 2 percent of their gross domestic products into defense by 2024.

* * *

Add to this Trump’s first, most prominent reversal, the launch of air strikes on Syria last Friday after repeatedly bashing Obama for even considering that, and Trump’s transformation into a mainstream politician now appears complete.





This no doubt will send a strong message to North Korea: the MOAB bomb strikes Afghanistan

(courtesy zero hedge)

US Drops Largest Non-Nuclear Bomb For The First Time On ISIS In Afghanistan

At roughly 7pm local time, the United States military for the first time ever, used a GBU-43 bomb to target caves and tunnels in Aghanistan, denying operational space to ISIS, Sean Spicer said during a press briefing.

As we detailed earlier, perhaps in preparation for upcoming events on the Korean Peninsula, CNN reports the US military has dropped an enormous bomb in Afghanistan, according to four US military officials with direct knowledge of the mission.

The GBU-43/B Massive Ordnance Air Blast Bomb, each of which costs $16 million and nicknamed MOAB, was dropped at 7 p.m. local time Thursday, the sources said. The MOAB is also known as the “mother of all bombs.” A MOAB is a 21,600-pound, GPS-guided munition that is America’s most powerful non-nuclear bomb.

This is the first time a MOAB, which was developed during the Iraq War, has been used in the battlefield.

According to Barbara Starr, the bomb was dropped by an MC-130 aircraft, operated by Air Force Special Operations Command. They said the target was ISIS tunnels and personnel in the Achin district of the Nangarhar province.

The MOAB is so massive it had to be dropped out of the back of a U.S. Air Force C-130 cargo plane. “We kicked it out the back door,” one U.S. official told Fox News. For comparison to the 21,000-pound MOAB, each Tomahawk cruise missile launched at a Syrian military air base last week was 1,000-pounds each.

“As [ISIS’] losses have mounted, they are using IEDs, bunkers and tunnels to thicken their defense,” Gen. John Nicholson, commander of U.S. forces in Afghanistan, said in a statement. “This is the right munition to reduce these obstacles and maintain the momentum of our offensive against [ISIS].”

The military is currently assessing the damage. Gen. John Nicholson, commander of US forces in Afghanistan, signed off on the use of the bomb, according to the sources.

We expect the Trump administration will promptly released a video of the bombing, which may serve a secondary purpose of hinting to North Korea’s Kim what may be coming. Until we wwait, here is a video of the bomb in action.

A terrific commentary by Ryan McMaken of the Mises Institute.  He correctly states that Trump has abandoned all economic reforms and seems to embrace war spending


(courtesy Ryan McMaken/Mises Institute)



Trump Abandons Economic Reforms To Embrace War Spending

Authored by Ryan McMaken via The Mises Institute,

In February, David Stockman pointed out that the Trump administration appears none too interested in addressing many of the economic issues that Trump claimed would be at the center of his administration. Instead, Stockman noted, Trump spent all his time obsessing over his travel ban — which he still can’t get beyond the courts — and other non-economic issues. Stockman noted:

It’s the economy, stupid. … Trump was elected because flyover America is hurting economically. The voters of Racine, Wisconsin and Johnstown, Pennsylvania are imperiled not because of some refugees, they’re imperiled because their jobs have all been disappearing for decades. The problem is far more the Federal Reserve, Janet Yellen, the bubbles they’re creating on Wall Street…

And that was even before Trump mishandled the Obamacare repeal.

But now that it’s April, it’s all the more clear that Stockman was right. Trump and the GOP have already abandoned the Obamacare issue — and the Trump administration has now signaled there won’t be any attempts at tax cuts anytime soon.

In February, Trump was promising a corporate tax cut bill “in two or three weeks.” Now, nothing’s even on the horizon. Obamacare has also been relegated to the back burner.

Nor should we expect anything on monetary policy. Trump has already hired a Treasury Secretary who praises Janet Yellen, and if Trump is as “anti-establishment” on monetary policy as he is on foreign policy, then we can expect Trump to offer simply more of the same. And, given Trump’s big spending plans, Trump will certainly need the Fed with its ability to further monetize the deficit spending Trump is more than happy to keep going full speed ahead.

Moreover, when the economy enters recession, we can expect Trump to call for both massive monetary and fiscal stimulus, just as his Republican predecessor George W. Bush did in the face of recession in 2001 and again in 2008. 

In response to the administration’s obvious disinterest in economic issues, the Trump fanboys will surely cry “give him some time!” But, if Trump actually cared about these issues, he’d be talking about the need for tax cuts and relief from Obamacare. He’d be making speeches. He’d be meeting with Congress about it. He’d be telling voters to call their members of Congress and demand reform. He’d be giving press conferences on how we need to get the government off the backs of the people.

But no. None of that is happening.

What’s worse, what few changes Trump has made on regulatory reform have all been made through executive order. This means they will be immediately reversible when another administration comes in — probably four years from now. 

To make any lasting reform, Congress would need to take action on these matters, but Trump is either too lazy or too inept or too apathetic to do the hard work that comes with this type of lawmaking. In order to move beyond Rule by Decree, which is clearly Trump’s favored type of governing, he’d have to work with Congress. But this so-called “master negotiator” apparently lacks the necessary skills.

It is now increasingly clear that the Trump administration is going to be at least four years of endless war, budget-busting spending, massive deficits, and more big government in general. His demonstrated preference is not for addressing the issues that won him the Rust Belt states. He’s a war president now, and has better things to do.

Moreover, Trump has already declared 75 percent of the federal budget to be off limits to budget cuts, and has pledged to spent a trillion more in infrastructure spending on top of the already bloated social-spending budgets that he has pledged to not touch.

He has also called for $50 billion more in military spending, in just the next year alone.

That $50 billion is just chump change compared to what Trump will likely spend with his big plans for multiple wars, including wars in Syria and North Korea. Wars with boots on the ground — should Trump continue down that road — don’t just cost a few hundred billion dollars. They cost trillions. According to one conservative estimate, the US has spent $3.6 trillion on wars between 2001 and 2016. (That not including future obligations to disabled veterans thanks to the wars.) What could have been done with that money? To use the words of Trump himself: “we could have rebuilt our country — twice.”

Indeed, it may be a repeat of the George W. Bush years when Bush — via Medicare expansion — gave us the largest expansion of the welfare state since Johnson’s Great Society, and then went on to break the bank with massive deficit spending on wars and welfare. Much of this, by the way, was done during a six year period when the GOP had control of both the White House and Congress.

Knee-jerk defenders of the GOP will no doubt point out that Obama spent immense amounts of taxpayer funds too, and that he placed huge regulatory burdens on American workers and business owners. No one denies that, nor did anyone seriously claim that Obama was going to be a budget cutter or lessen the burden of government on middle-class workers. Trump and his supporters do make such claims.

If Trump’s only claim to fame is going to be “Hey, I’m slightly less awful than Obama,” that will probably be good enough for some people. But many of us aren’t going to be falling over ourselves to thank Trump for the few scraps that fall from his table.




Well that about does it for the week

I wish you all a safe and enjoyable Easter holiday weekend


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