Gold: $1289.40 UP $3.50
Silver: $18.49 UP 0 cents
Closing access prices:
Gold $1285.00
silver: $18.42!!!
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1295.80 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: 1288.25
PREMIUM FIRST FIX: $7.55
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1295.80
NY GOLD PRICE AT THE EXACT SAME TIME: 1288.25
Premium of Shanghai 2nd fix/NY:$7.55
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
LONDON FIRST GOLD FIX: 5:30 am est holiday
NY PRICING AT THE EXACT SAME TIME: xxx
LONDON SECOND GOLD FIX 10 AM: xx
NY PRICING AT THE EXACT SAME TIME. xxx
For comex gold:
APRIL/
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 7 NOTICE(S) FOR 700 OZ.
TOTAL NOTICES SO FAR: 632 FOR 63,200 OZ (1.9657 TONNES)
For silver:
For silver: APRIL
0 NOTICES FILED TODAY FOR NIL OZ/
Total number of notices filed so far this month: 744 for 3,720,000 oz
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
END
The open interest in silver continues to advance with today’s reading just under 228,000 contracts (227,498 contracts) or about 4000 contracts ABOVE the record set last year. The price of silver is a good $2.04 below the price when the record OI was set. It seems that the boys want to attack gold and silver as the hit upon our precious metals in the thinly traded access market.
Let us have a look at the data for today
.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
In silver, the total open interest ROSE BY A HUGE 3,735 contracts UP to 227,744 WITH THE CONSIDERABLE RISE IN PRICE ( 21 CENTS) WITH RESPECT TO THURSDAY’S TRADING. THE HEDGE FUNDS (MANAGED MONEY) CONTINUE TO REMAIN STEADFAST WITH THEIR POSITIONS ON DOWNDRAFT DAYS WHILE ADDING TO THEIR LONGS ON GOOD DAYS. THE BANKERS ARE DESPERATELY TRYING TO COVER THEIR EVER BURGEONING SHORTS (OVER 555 MILLION OZ) BUT TO NO AVAIL. In ounces, the OI is still represented by just OVER 1 BILLION oz i.e. 1.138 BILLION TO BE EXACT or 163% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MARCH MONTH/ THEY FILED: 0 NOTICE(S) FOR NIL OZ OF SILVER
In gold, the total comex gold ROSE BY GIGANTIC 9,340 contracts WITH THE HUGE RISE IN THE PRICE OF GOLD ($10.60 with THURSDAY’S TRADING). The total gold OI stands at 473,744 contracts.
we had 7 notice(s) filed upon for 700 oz of gold.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
With respect to our two criminal funds, the GLD and the SLV:
GLD:
We had no changes in tonnes of gold at the GLD:
Inventory rests tonight: 848.92 tonnes
.
SLV
We had no changes in silver inventory at the SLV today/
THE SLV Inventory rests at: 328.201 million oz
end
.
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver ROSE BY A HUGE 3,735 contracts UP TO 227,498, A NEW COMEX RECORD WITH THE CONSIDERABLE RISE IN SILVER THURSDAY ( 21 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 again with Thursday’s attempted raid. In gold, the open interest rose by 9,340 contracts with the accompanying rise in price by $10.60
(report Harvey
.
2.a) The Shanghai and London gold fix report
(Harvey)
2 b) Gold/silver trading overnight Europe, Goldcore
(Mark O’Byrne/zerohedge
and in NY: Bloomberg
2c) COT report
(Harvey)
3. ASIAN AFFAIRS
i)Late SUNDAY night/MONDAY morning: Shanghai closed DOWN 23.90 POINTS OR 0.74%/ /Hang Sang CLOSED. The Nikkei closed UP 19.63 OR 0.11% /Australia’s all ordinaires CLOSED/Chinese yuan (ONSHORE) closed UP at 6.8857/Oil DOWN to 52.72 dollars per barrel for WTI and 55.37 for Brent. Stocks in Europe ALL DEEPLY IN THE RED ..Offshore yuan trades 6.8812 yuan to the dollar vs 6.8812 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.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
NORTH KOREA
i)Friday: the USA is contemplating a preemptive non nuclear strike against North Korea ahead of its nuclear test
( zero hedge)
ii) Saturday night/North Korea
After much anticipation, North Korea finally launches its missile late Saturday night and it blow seconds after launching. President Trump offers no further comment as to what he intends to do:
(courtesy zero hedge)
iii) Sunday/NorthKorea
iv. Monday
NORTH KOREA/USA
Trump is considering a sudden first strike against North Korea
( zero hedge)
v)Monday afternoon
It does not seem that North Korea is backing down as they threaten missile tests on a weekly basis
( zero hedge)
b) REPORT ON JAPAN
c) REPORT ON CHINA
i)China/Air China/North Korea
Escalation continues as Air China suspends flights to North Korea
( zerohedge)
4. EUROPEAN AFFAIRS
London/UK
London home prices down 4.6 to 10% as this market suffers its worst collapse since the financial crisis
( zero hedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
i)AFGHANISTAN/USA
USA releases the video of the MOAB bomb which was dropped in the remote region of Afghanistan along the Pakistan border. It was quite successful as it killed 36 ISIS fighters and sealed off major tunnels.
( zero hedge)
ii)India claims that 500 Pakistanis who were protecting ISIS fighters were killed in the blast. Former Prime Minister Karzai considers the USA bombing to be treasonous.
(courtesy zerohedge)
iv)TURKEY
Meet the new dictator of Turkey Erdogan as he declares victory in Turkey’s new constitutional referendum (after removing most of his enemies)
(courtesy zero hedge)
Monday/Turkey/EU:
EU leaders refuse to congratulate Erdogan/await the OECD report on voting irregularities:
( zero hedge)
6 .GLOBAL ISSUES
India
Not good! Again India has run out of cash as 90% of India’s ATM’s have run dry:
(courtesy zero hedge)
7. OIL ISSUES
8. EMERGING MARKETS
i)VENEZUELA
I brought this story to you on Thursday. Congress is now panicking because they now realize that if Venezuela defaults, major USA oil assets will fall into Russian Hands. Russia state owned Rosneft lent Venezuela 1.5 billion USA and as collateral, she gave 49.9% of CITGO which has 3 refineries and 800 gas stations. If Russia buys a tiny amount of CITGO debt, on default Russia could control the company and its assets on USA soil
(courtesy zerohedge/Oil Price.com/Nick Cunningham)
ii)
9. PHYSICAL MARKETS
i)Ted Butler asks all of us to write to the CFTC such that they do their job
( SilverSeek.com/Ted Butler/GATA)
ii)Goldseek radio interviews Bill Murphy
( GATA/Goldseek)
iii)A good explanation as to what happened on both April 10 2017 with silver’s fixing and in April 11/2017 in the afternoon gold fixing. You will recall that the difference in price as to what was trading at the time of the fix: $1267.00 and the fix price of $1252.00 was an unheard of $15.00 and this caused losses to our mining companies who were forced to use the lower price in settling what gold was sold at the afternoon fix.
( Ronan Manly/Bullionstar)
10. USA stories
i)Trading overseas on Friday:
big event: uSA/Yen tumbles into the 108 column on dismal uSA data!
( zero hedge)
ii)Retail sales decline for the 2nd straight month /real earnings stagnate:
( zero hedge)
iii)The above release on retail sales causes the Atlanta Fed to slash Q1 GDP from 0.6% down to .5%
( zerohedge)
iv)Janet is not going to like this: Core CPI tumbles for the first time in 7 years and the entire CPI index including food and energy fell 0.3%. The reflation trade is now officially dead!
( zero hedge)
v)Even soft data is now plunging: please note the New York (Empire Fed Mfg Index) plunges the most in a year.
No doubt that the uSA is in serious recession;
(courtesy zero hedge)
vi)David Stockman comments that on April 28, the government will shut down and that will be a precursor of events once money for the debt ceiling has run out.
a must read..
( David Stockman/Daily Reckoning)
vii)Business must be good! Boeing laying off hundreds of engineers!
( zero hedge)
viii)Great reason for the boys to commence a raid on gold and silver in the access market: Mnuchin agrees with Trump that the dollar is too strong!
( zero hedge)
Let us head over to the comex:
The total gold comex open interest ROSE BY 9,340 CONTRACTS UP to an OI level of 473,744 WITH THE RISE IN THE PRICE OF GOLD ( $10.60 with THURSDAY’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 672 contract(s) FALLING TO 1,120. We had 7 notices served yesterday so we LOST 672 contracts or 67,200 oz will NOT stand for delivery in the active delivery month of April AND THESE GUYS WITHOUT A DOUBT WERE CASH SETTLED THROUGH THE OBSCURE EFT ROUTE DESCRIBED BY JAMES TURK.
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 65 contract(s) and thus its OI is 2315 contracts. The next big active month is June and here the OI ROSE by 8,568 contracts UP to 344,703.
We had 7 notice(s) filed upon today for 700 oz
We are in the NON active delivery month is APRIL Here the open interest LOST 119 contracts DOWN to 80 contracts. We had 0 notices filed yesterday so we LOST ANOTHER 119 contracts or an additional 595,000 oz will NOT stand for delivery AND THESE GUYS WERE PAPER SETTLED THROUGH THE ERP ROUTE.
The next active contract month is May and here the open interest LOST ONLY 4,123 contracts DOWN to 129,507 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: we have only 9 trading days before first day notice. The non active June contract LOST 24 contracts to stand at 183. The next big active month will be July and here the OI gained 7203 contracts up to 66,752.
FOR COMPARISON SAKE, ON MONDAY APRIL 18/2016 WE HAD 97,642 CONTRACTS STANDING FOR DELIVERY. SO YOU CAN VISUALIZE FOR YOURSELF THE HUGE DIFFERENCE BETWEEN 2016 AND THIS YEAR.
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 172,008 contracts which is fair.
Yesterday’s confirmed volume was 248,543 contracts which is good.
volumes on gold are STILL HIGHER THAN NORMAL!
Gold | Ounces |
Withdrawals from Dealers Inventory in oz | nil |
Withdrawals from Customer Inventory in oz |
2025.45 oz
Scotia
63 kilobars
|
Deposits to the Dealer Inventory in oz | nil oz |
Deposits to the Customer Inventory, in oz |
nil
|
No of oz served (contracts) today |
7 notice(s)
700 OZ
|
No of oz to be served (notices) |
1113 contracts
113,000 oz
|
Total monthly oz gold served (contracts) so far this month |
632 notices
63,200 oz
1.9657 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 | 445,473.6 oz |
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 7 contract(s) of which 0 notices were stopped (received) by jPMorgan dealer and 3 notice(s) was (were) stopped/ Received) by jPMorgan customer account.
March 2016: 2.311 tonnes (March is a non delivery month)
Silver | Ounces |
Withdrawals from Dealers Inventory | nil |
Withdrawals from Customer Inventory |
611,427.58 oz
BRINKS
CNT
HSBC
|
Deposits to the Dealer Inventory |
nil oz
|
Deposits to the Customer Inventory |
1,205,429.308 oz
JPMorgan
1,198,827.64 oz
CNT
total: 2,392,041.220 oz
|
No of oz served today (contracts) |
0 CONTRACT(S)
(NIL OZ)
|
No of oz to be served (notices) |
80 contracts
(400,000 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 | 10,121,642.0 oz |
FOR COMPARISON
Initially for the April 2016 contract, 1,180,000 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.
Gold COT Report – Futures | ||||||
Large Speculators | Commercial | Total | ||||
Long | Short | Spreading | Long | Short | Long | Short |
253,004 | 80,338 | 57,490 | 98,119 | 285,483 | 408,613 | 423,311 |
Change from Prior Reporting Period | ||||||
13,943 | -3,287 | 8,447 | 2,004 | 18,352 | 24,394 | 23,512 |
Traders | ||||||
165 | 90 | 75 | 45 | 59 | 240 | 197 |
Small Speculators | ||||||
Long | Short | Open Interest | ||||
47,518 | 32,820 | 456,131 | ||||
3,929 | 4,811 | 28,323 | ||||
non reportable positions | Change from the previous reporting period | |||||
COT Gold Report – Positions as of | Tuesday, April 11, 2017 |
Silver COT Report: Futures | |||||
Large Speculators | Commercial | ||||
Long | Short | Spreading | Long | Short | |
131,969 | 26,454 | 18,802 | 46,900 | 161,314 | |
5,445 | 1,312 | -2,738 | -739 | 1,329 | |
Traders | |||||
101 | 50 | 48 | 30 | 39 | |
Small Speculators | Open Interest | Total | |||
Long | Short | 220,172 | Long | Short | |
22,501 | 13,602 | 197,671 | 206,570 | ||
-956 | 1,109 | 1,012 | 1,968 | -97 | |
non reportable positions | Positions as of: | 158 | 120 | ||
Tuesday, April 11, 2017 | © SilverSeek.com |
NPV for Sprott and Central Fund of Canada
will update later tonight the central fund of Canada figures
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
Submitted by cpowell on Thu, 2017-03-09 01:19. Section: Daily Dispatches
From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017
http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…
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.
end
And now the Gold inventory at the GLD
April 17/no changes at the GLD/Inventory remains at 848.92 tonnes
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 20/WE HAD A MASSIVE 6.81 TONNE WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 830.25 TONNES/THIS GOLD MUST BE ON ITS WAY TO SHANGHAI. WITH GOLD RISING THESE PAST FEW DAYS, IT MAYS NO SENSE WHATSOEVER ON GOLD LIQUIDATION.
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
end
Now the SLV Inventory
April 17/no changes in inventory at the SLV/Inventory rests at 328.201 million oz
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/
Major gold/silver trading/commentaries for MONDAY
GOLDCORE/BLOG/MARK O’BYRNE.
ON HOLIDAY
END
Sunday night/Gold trading
USDJPY, Yields Slide, Gold Spikes As Markets Finally Respond To Latest Set Of Economic, Geopolitical Shocks
With markets shut on Good Friday, even as the one-two knockout punch of the worst monthly core CPI print in 7 years hit…
… coupled with a miss in March retail sales, which suffered their biggest two month drop in 2 years…
… on Sunday night traders were desperate to catch up, or rather down to, the USDJPY which was the only instrument that traded through Friday’s data dump, and which at last check was trading at 108.34, nearly 100 pips below the Friday open, sliding further in early Japanese trading as the last holdouts on the reflation trade capitulate in panic, further pressured by fears over the rapidly deterioating situation in North Korea.
As one would expect, a surge in the yen means continued weakness in the dollar, and sure enough on Sunday night, Donald Trump’s recent bid for a weaker greenback has been the market’s command.
Predictably, and contrary to virtually every sellside analyst’s prediction for ongoing levitation in interest rates, US TSY yields have tumbled across the curve, with 5-year yields down as much as 5bps at 1.72%, lowest since Nov. 18, while the benchmark 10-year yield has slide 4bps to 2.20%, also the lowest since the election.
Perhaps the one asset class where the reflation revulsion has not been observed yet is S&P futures, as the E-mini stubbornly holds out to selling pressure and is barely lower on the session following Thursday’s sharp drop.
However, while equity markets may be ignoring the moves in FX and rates, gold is hardly waiting, and on Sunday night evening was trading above $1,290/oz, the highest price since the Trump electiomn…
… and poised for a key double resistance breakout.
While the spike in gold is hardly a surprise in light of last week’s economic data and this weekend’s North Korean events, with spot not trading there was little opportunity for traders to take advantage of what many expected would be a sharp jump in the yellow metal. Except… that’s not quite true: as we noted on Friday, while spot may have be closed, physical vendors such as Ampex were happy to sell gold, and even better, at Thursday’s depressed price.
Gold arb trade: Physical dealers like Apmex are still stuck at Thursday’s gold price
Finally, before we forget, there was another asset class that was surging overnight: the Turkish lire, which has been on fire ever since Erdogan won the popular mandate to become dictator, and which just as Barclays predicted, would lead to a spike in the Turkish currency… if only for a the very near future.
end
Ted Butler asks all of us to write to the CFTC such that they do their job
(courtesy SilverSeek.com/Ted Butler/GATA)
Ted Butler: Another opportunity to induce the CFTC to do its job
Submitted by cpowell on Thu, 2017-04-13 14:04. Section: Daily Dispatches
By Ted Butler
SilverSeek.com
Thursday, April 13, 2017
An unusual confluence of seemingly unrelated factors may have created an opportunity to do something about the silver (and gold) manipulation.
On Monday, April 10, two new officials assumed key roles with the Commodity Futures Trading Commission — a new director of the Enforcement Division and the first chief officer of the newly-created Market Intelligence Unit. The main mission of both departments is to uncover and terminate market fraud and manipulation, the same overall prime mission of the agency itself.
There’s little wonder that price manipulation is the prime regulatory mission, since it is the most serious market crime possible — damaging even to those not directly involved in trading. …
… For the remainder of the commentary:
end
Goldseek radio interviews Bill Murphy
(courtesy GATA/Goldseek)
GoldSeek Radio interviews GATA Chairman Bill Murphy
Submitted by cpowell on Thu, 2017-04-13 19:40. Section: Daily Dispatches
3:40p ET Thursday, April 13, 2017
Dear Friend of GATA and Gold:
GATA Chairman Bill Murphy, interviewed by GoldSeek Radio’s Chris Waltzek, says he doesn’t expect geo-political events to have much effect on the price of gold but that silver is giving real trouble to the price-suppression cartel. The interview is 10 minutes long and can be heard at GoldSeek here:
http://radio.goldseek.com/nuggets.php
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
end
A good explanation as to what happened on both April 10 2017 with silver’s fixing and in April 11/2017 in the afternoon gold fixing. You will recall that the difference in price as to what was trading at the time of the fix: $1267.00 and the fix price of $1252.00 was an unheard of $15.00 and this caused losses to our mining companies who were forced to use the lower price in settling what gold was sold at the afternoon fix.
(courtesy Ronan Manly/Bullionstar
Ronan Manly: Death spiral for LBMA gold and silver auctions?
Submitted by cpowell on Fri, 2017-04-14 10:46. Section: Daily Dispatches
12:19p ET Friday, April 14, 2017
Dear Friend of GATA and Gold:
Researcher Ronan Manly today examines the strange glitches that struck the London Bullion Market Association’s gold and silver auctions Monday and Tuesday, concluding that the auction systems are not only flawed but, as with everything else in the gold and silver markets, obscured by official secrecy and refusal to accept accountability. Manly’s analysis is headlined “Death Spiral for LBMA Gold and Silver Auctions?” and it’s posted at Bullion Star here:
https://www.bullionstar.com/blogs/ronan-manly/death-spiral-lbma-gold-sil…
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
end
First quarter 2017 SGE withdrawals 556 tonnes which is up 7.7% from last year. That means we are heading for 2224 tonnes for the year. If we subtract out China’s mining of 472 tonnes and some scrap we get actual demand coming into China at around 1600 tonnes. Add India’s 1000 tonnes and we are well above global production of 2,200 tonnes ex China ex Russia
(courtesy LAWRIE WILLLIAMS/SHARP’S PIXLEY)
LAWRIE WILLIAMS: China Q1 gold demand 7.7% Up On 2016
While the detailed Shanghai Gold Exchange (SGE) Monthly Report figures on its website still seem stuck on the February figures (released on March 7th), trawling elsewhere through the site suggests that the March withdrawals figure actually came through at 192.25 tonnes and totalling up the reported year to date figures show that Q1 withdrawals totalled 555.9 tonnes – some 7.7% up on the 2016 Q1 figure, although still 11% behind that for the record 2015 calendar year.
(There does appear to be an anomaly of around 30 tonnes on the cumulative year to date figure as reported in the March SGE Delivery volume table, but these may be accounting anomalies from the preparations of the figures under different systems so we’ll let our assessment shown below ride until we may have a more accurate cumulative figure assuming the SGE reports the March figures separately in the same format as January and February.)
Table: SGE Monthly Gold Withdrawals (Tonnes)
Month | 2017 | 2016 | 2015 | % change 2016-2017 | % change 2015-2017 |
January | 184.41 | 225.08 | 255.42 | – 18.1% | -27.8% |
February* | 179.24 | 107.60 | 156.36 | +66.6% | +14.6% |
March | 192.25 | 183.24 | 213.35 | +4.9% | -9.9% |
April | 171.40 | 195.45 | |||
May | 147.28 | 162.15 | |||
June | 138.51 | 195.67 | |||
July | 117.58 | 285.50 | |||
August | 144.44 | 265.27 | |||
September | 170.90 | 259.98 | |||
October | 153.25 | 176.29 | |||
November | 214.72 | 202.71 | |||
December | 196.37 | 228.21 | |||
Year to date | 555.90 | 515.92 | 625.13 | +7.7% | – 11.1% |
Full Year | 1,970.37 | 2,596.37 |
Source: Shanghai Gold Exchange, Lawrieongold.com
*February figures always distorted by Chinese New Year holiday
While China’s gold demand as expressed by SGE withdrawals may be up on that of a year ago, it is early days yet for 2017 and it should be recalled that Chinese gold demand was probably at its lowest for four years in 2016, and way below that of the record 2015 year. There are, however, also a number of other factors out there – not least a potential for economic conflict – or even, but probably unlikely, military conflict – between China and the USA over a number of flashpoints such as trade equality, North Korea and the South China Sea any of which could affect gold demand positively.
Whether SGE gold withdrawals should be equated to the real gold flows into China remains a contentious point. As we have pointed out here beforehand the withdrawals data as reported appears to offer a far closer correlation to the sum of Chinese gold imports plus domestic gold production and an estimate of scrap recycling than some of the estimates of demand produced by independent specialist consultancies. In part this divergence of estimates tends to relate to how Chinese demand is calculated, with the consultancies tending to dismiss gold going into the financial and banking sectors. None of the figures take into account anything that may, or may not, be being absorbed by the government for the nation’s gold reserves. Officially these have not increased for the past five months – See: Chinese CB reports zero addition to gold reserves in March – back to its bad old days but doubts are being raised again as to whether China is again hiding gold reserve additions in separate accounts now that the nation has achieved its aim of having the Yuan (Renminbi) incorporated as an integral part of the IMF’s Special Drawing Rights.
-END-
Your early MONDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight
1 Chinese yuan vs USA dollar/yuan STRONGER 6.8857( REVALUATION NORTHBOUND /OFFSHORE YUAN MOVES STRONGER TO ONSHORE AT 6.8812/ Shanghai bourse DOWN 23.90 POINTS OR 0.74% / HANG SANG CLOSED
2. Nikkei closed UP 19.63 POINTS OR 0.11% /USA: YEN FALLS TO 108.35
3. Europe stocks opened ALL IN THE RED THAT WHICH ARE TRADING ( /USA dollar index FALLS TO 100.28/Euro UP to 1.0636
3b Japan 10 year bond yield: FALLS TO +.008%/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 108.35/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!
3c Nikkei now JUST BELOW 17,000
3d USA/Yen rate now well below the important 120 barrier this morning
3e WTI:: 52.72 and Brent: 55.37
3f Gold UP/Yen UP
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil DOWN for WTI and DOWN for Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.187%/Italian 10 yr bond yield UP to 2.317%
3j Greek 10 year bond yield RISES to : 6.69%
3k Gold at $1287.60/silver $18.56 (8:15 am est) SILVER ABOVE RESISTANCE AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 7/100 in roubles/dollar) 56.10-
3m oil into the 52 dollar handle for WTI and 55 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT BIG REVALUATION NORTHBOUND
JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 108.35 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 1.0036 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.06876well 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.
3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017
3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to +.187%
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 2.213% early this morning. Thirty year rate at 2.878% /POLICY ERROR)GETTING DANGEROUSLY HIGH
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Dollar, Yields, Futures Under Pressure Following Weak US Data; Europe Closed
Following Sunday night’s resumption of trade after a three-day weekend, which saw sharp moves lower in US yields, the dollar and the USDJPY after Friday’s disappointing CPI and retail sales data and the weekend’s North Korea jitters, the mood has stabilized in light trading with Asian stocks advancing, Europe mostly closed for Easter Monday and S&P futures fractionally lower at 2,325 in early New York trading.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.1 percent in holiday-thinned trade, while Japan’s Nikkei fell as much as 0.6 pct to hit a five-month low before ending up 0.1 percent. Asian gains were led by consumer staples and health care as information technology and real estate sectors decline. Japan’s Nikkei and Korea’s Kopsi advance, while Hang Seng Index and Shanghai Composite decline. Investors prepare for first U.S. stocks trading since Thursday, which will be punctuated by Netflix earnings and Empire Manufacturing data.
As noted earlier, a raft of Chinese economic data beat market expectations but did not produce notable market reactions as investors had been already optimistic following a recent string of positive China numbers. China’s economy grew 6.9 percent in the first quarter from a year earlier, a tad above economists’ forecast of 6.8 percent. However, mainland Chinese shares fell, with Shanghai Composite Index down 1.0 percent at 3,212, risking a close below its 60-day average at 3,216, seen as an important support by investors and weighed by warning from top securities regulator to combat market misbehavior.
In the US, yields on 10-year Treasuries fell three basis points to the lowest since Nov. 11, while Bloomberg’s Dollar Spot Index slipped to the weakest in three weeks. Gold and the yen both climbed. The two have traded in what has effective been a mirror image for the past year.
There has been a barrage of macro news and events over the long weekend, from Friday’s disappointing inflation data casting doubt on the pace of Fed rate hikes and the U.S. decision not to label any countries currency manipulators to North Korea’s failed ballistic missile launch and Turkey’s referendum.
On Friday, U.S. retail sales dropped more than expected in March while annual core inflation slowed to 2.0 percent, the smallest advance since November 2015, from 2.2 percent in February. Core CPI posted its biggest monthly drop since 2010.
That helped to drive down the 10-year U.S. Treasuries yield to 2.200 percent, its lowest level since mid-November from around 2.228 percent on Thursday before a market holiday on Friday. The yield had risen above 2.6% in December and again in March, from around 1.85 percent before the U.S. presidential election, on expectations of Trump’s stimulus. But growing perception that Trump will struggle to push any tax cuts and fiscal spending programs through the Congress has prompted unwinding of the “Trump” trade.
“At the moment, it is hard to see any factors that could drive up bond yields,” said Hiroko Iwaki, senior strategist at Mizuho Securities. “And compared to U.S. bond yields, which have given up much of their gains after the election, U.S. share prices, having gone through a limited correction, look vulnerable given potential developments in North Korea or the French election,” she said.
As Bloomberg puts it, investors will be bracing for more to come, as the earnings season ramps up and European populism is put to the test in the first round of France’s presidential election.
“Geopolitical uncertainty weighed on global markets over the holiday weekend,” Cole Akeson, a strategist at Sberbank CIB in Moscow, wrote in an emailed note. “However, the macro data out of China this morning was slightly better than expected. For global markets generally and European markets in particular, the first round of the French presidential election on Sunday is probably the biggest planned event of the week.”
Elsewhere, there is no sign of easing in tensions over North Korea’s nuclear and missile program after the reclusive country’s failed missile test on Sunday. Trump’s national security adviser said on Sunday that the United States, its allies and China are working together on a range of responses to North Korea. “In essence, North Korea made a provocation that would not transcend the U.S. ‘red line’. But depending on how China will react, Trump could lose his patience,” said Makoto Noji, senior strategist at SMBC Nikko Securities.
Bucking the broader risk off trade, Turkey’s lira jumped as much as 2.4% after voters handed President Recep Tayyip Erdogan greater powers, however the currency pared gains as investors digested the referendum result.
Safe-haven gold gained as much as 0.8 percent to hit a five-month high of $1,295.5 per ounce on continued concerns on tensions over North Korea. The dollar slipped to as low as 108.13 yen, a five-month low and 0.4 percent below its late U.S. levels. The semi-annual U.S. Treasury currency report maintained the six countries on a “monitoring list” — China, Japan, Germany, South Korea, Taiwan and Switzerland — suggesting Washington could put more pressure on those countries to take steps to reduce their trade surplus with the United States in future.
The euro stood at $1.0622, little moved so far, and not far from a one-month low of $1.0570 touched last Monday, with focus on the French presidential election. Ahead of the first round of voting on April 23, the race looked tighter. Two polls put any of the four frontrunners, including far-right candidate Marine Le Pen and hard-left challenger Jean-Luc Melenchon, within reach of a two-person run-off vote.
Companies reporting this week include Bank of America Corp., Goldman Sachs Group Inc., International Business Machines Corp., Netflix Inc., Heineken NV and Unilever.
Market Snapshot
- S&P 500 futures down 0.1% to 2,325.25
- MXAP up 0.4% to 146.86
- MXAPJ down 0.2% to 479.84
- Nikkei up 0.1% to 18,355.26
- Topix up 0.5% to 1,465.69
- Hang Seng Index down 0.2% to 24,261.66
- Composite down 0.7% to 3,222.17
- Sensex down 0.1% to 29,432.39
- Australia S&P/ASX 200 down 0.7% to 5,889.95
- Kospi up 0.5% to 2,145.76
- Brent Futures down 0.9% to $55.38/bbl
- Gold spot up 0.3% to $1,289.17
- U.S. Dollar Index down 0.2% to 100.32
Top Overnight News from Bloomberg
- Amazon Seeks 1,300 Prime Now Warehouses in Europe: Telegraph
- Amazon Said to Be Consider Buying BJ’s Wholesale Club: NYP
- Jared Kushner Said in Talks to Sell His WiredScore Stake: WSJ
- Ethos Still Critical of Credit Suisse Pay After Bonus Cut: SZ
- Leonard Green Said to Be Near $1.5b Charter NEX Purchase: Reuters
- Wal-Mart Said in Advanced Talks to Buy Bonobos: Recode
- Groupon Cuts About 100 Jobs in Chicago: Chicago Tribune
- Abbott Said to Agree to Buy Alere For $51/Shr; Ends Lawsuit: FT
- Ant Financial Raises MoneyGram Bid 36% to Fend Off Euronet
- BP North Slope Well Leaking Gas After Crude Oil Spray Stops
- Crude Slips Below $53 as U.S. Drilling Surge Stokes Output Fears
- Pence Visits North Korea Border, ‘Heartened’ by China Moves
- Universal’s ‘Fate of the Furious’ Is No. 1 Film at $100.2m
- ‘Star Wars: Battlefront II’ Game to Be Released Nov. 17
- McKesson Gets Temporary Order on Use of Lethal-Injection Drug
- Intercontinental Hotels: Malware Accessed Pay Cards in Americas
- Energy Transfer Partners: ISS Recommends Hldrs Vote for Merger
- Apple Gets California Autonomous-Vehicle Test Permit
- South Korea’s Former President Park Charged in Corruption Probe
- Gold Seen Climbing on Weak Dollar, Global Political Tension
In Asian markets, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.1 percent in holiday-thinned trade, while Japan’s Nikkei fell as much as 0.6 pct to hit a five-month low before ending up 0.1 percent. A raft of Chinese economic data beat market expectations but did not produce notable market reactions as investors had been already optimistic following a recent string of positive China numbers. China’s economy grew 6.9 percent in the first quarter from a year earlier, a tad above economists’ forecast of 6.8 percent.
Top Asian News
- North Korea Said to Snub Chinese Diplomats as Tensions Mounted
- Shanghai Aluminum Climbs to Highest Since 2014 on Project Halts
- China Stocks Drop to Two-Week Low on Korea, Regulation Concern
- China’s Economy Accelerates as Retail, Investment Pick Up
- China-U.S. Yield Gap at Widest in Seven Months on GDP Momentum
- Indiabulls Real Restructure, Outlook Boost Property-Stock Rally
- Japan Stocks to Watch: H2O Retailing, Showa Denko, Densan
- Euro Casts Off French Vote Worries as Dollar Wilts: Markets Live
- U.S. Scrutiny Seen Sidelining Taiwan Central Bank: Street Wrap
- Singapore Stock Traders on FIS SunGard Face Monday Glitch
Most European bourses remain closed for Easter holidays. The Stoxx Europe 600 Index fell 0.3 percent to 380.58, the lowest in more than a week. The U.K.’s FTSE 100 Index also dropped 0.3 percent.
The MSCI Emerging Market Index slid 0.2 percent.
Top European News
- EU’s Piri: Turkey Talks to Be Suspended If Package Not Changed
- Erdogan Declares Referendum Victory as Opposition Cries Foul
- Turkey Central Government Budget Deficit 19.5b Liras in March
- Moscow Oil Refinery Units Restart After Maintenance: Transneft
- Turkey Election Board Chief: All Authentic Ballots Counted Valid
- Turkey Banks Should Start Thinking How They Can Lend More: Bulut
- U.K. Will Need EU Workers After Brexit, Hammond Says in Rp.pl
- Turkish Jobless Rate Rises to 13% in January, Highest Since 2010
- Macron: Turkey’s EU Membership Won’t Advance in Coming Years
- FG Future EGM to Discuss New Share Issue
- Turkish Stock Futures Rise at Open After Referendum Vote
- HSBC Bank Settles Allegations it Failed to Disclose Fraud
In currencies, The Bloomberg Dollar Spot Index fell 0.3 percent to 1,218.01 at 10:13 a.m. in London, the lowest in three weeks. The euro rose 0.1 percent to $1.0627. The British pound strengthened 0.2 percent to $1.2542, the strongest in more than two weeks. The Turkish lira rose 1.2 percent to 3.6648 per dollar.
In commodities, gold rose 0.3 percent to $1,289.89 an ounce, the strongest in more than five months. West Texas Intermediate crude fell 0.8 percent to $52.73 a barrel, the lowest in more than a week. The U.S. continued to ramp up drilling, stoking concerns the nation’s surge in output this year will counter OPEC-led efforts to cut a global supply surplus. Iron ore fell 2 percent to 501 yuan per metric ton, the lowest in more than 14 weeks.
US Event Calendar
- 8:30am: Empire Manufacturing, est. 15, prior 16.4
- 10am: NAHB Housing Market Index, est. 70, prior 71
- 4pm: Total Net TIC Flows, prior $110.4b
- 4pm: Net Long-term TIC Flows, prior $6.3b
END
3. ASIAN AFFAIRS
i)Late SUNDAY night/MONDAY morning: Shanghai closed DOWN 23.90 POINTS OR 0.74%/ /Hang Sang CLOSED. The Nikkei closed UP 19.63 OR 0.11% /Australia’s all ordinaires CLOSED/Chinese yuan (ONSHORE) closed UP at 6.8857/Oil DOWN to 52.72 dollars per barrel for WTI and 55.37 for Brent. Stocks in Europe CLOSED ..Offshore yuan trades 6.8812 yuan to the dollar vs 6.8812 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.
3a)THAILAND/SOUTH KOREA/NORTH KOREA
Friday: the USA is contemplating a preemptive non nuclear strike against North Korea ahead of its nuclear test
(courtesy zero hedge)
US May Launch Preemptive Strike On North Korea Ahead Of Nuclear Test
With just two days to go until North Korea’s “Day of the Sun” celebrations, when as reported yesterday it may conduct its 6th nuclear test at the Punggye-ri Nuclear Test Site, NBC reports citing multiple senior U.S. intelligence officials that in the latest stepwise escalation, the U.S. is prepared to launch a preemptive strike with conventional weapons against North Korea should officials become convinced that Kim Jong-Un’s nation North Korea is about to follow through with a nuclear weapons test. Note: North Korea does not even have to carry out the text: mere conviction on the side of the US that it would, is sufficient.
As first reported yesterday, North Korea warned that a “big event” is near, and U.S. officials say signs point to a nuclear test that could come as early as this weekend. According to multiple sources, the U.S. intelligence community has reported with “moderate confidence” that North Korea is preparing for its sixth underground nuclear test, though the U.S. is also in the dark regarding the specific timing.
The launch of a preemptive attack would naturally threaten a counterattack by Kim: the U.S. is thus “worried” that its strikes could provoke the volatile and unpredictable North Korean regime to launch its own blistering attack on its southern neighbor. “The leadership in North Korea has shown absolutely no sign or interest in diplomacy or dialogue with any of the countries involved in this issue,” said Victor Cha, the Korea Chair at the Center for Strategic and International Studies.
Meanwhile, intelligence officials have told NBC News that the U.S. Navy has positioned two destroyers capable of shooting Tomahawk cruise missiles in the region, one just 300 miles from the North Korean nuclear test site. Additionally, American heavy bombers are also positioned in Guam to attack North Korea should it be necessary, and earlier this week, the Pentagon announced that the USS Carl Vinson aircraft carrier strike group was being diverted to the area.
Earlier in the week, North Korea said it would “hit the U.S. first” with a nuclear weapon should there be any signs of U.S. strikes. On Thursday, North Korea warned of a “merciless retaliatory strike” should the U.S. take any action. It is almost as if the U.S. is eager to provoke the “irrational” North Korean dictator.
“By relentlessly bringing in a number of strategic nuclear assets to the Korean peninsula, the US is gravely threatening the peace and safety and driving the situation to the brink of a nuclear war,” said North Korea’s statement, which actually sounded quite rational and measured.
Futhermore, virtually everyone knows that Kim’s threats are those of a paper tiger: North Korea is not believed to have a deliverable long-range nuclear weapon, according to U.S. experts, nor does it yet possess an intercontinental missile. Which begs the question: why is the US getting involved in yet another regime change operation half way around the world?
South Korea’s top diplomat said today that the U.S. would consult with Seoul before taking any serious measures, or at least he hoped: “U.S. officials, mindful of such concerns here, repeatedly reaffirmed that (the U.S.) will closely discuss with South Korea its North Korea-related measures,” foreign minister Yun Byung told a special parliamentary meeting. “In fact, the U.S. is working to reassure us that it will not, just in case that we might hold such concerns.”
Of course, if the U.S. does not “closely discuss” any pre-strike plans, then… oops.
In any case, a new war may break out as soon as this weekend: “Two things are coming together this weekend,” said retired Adm. James Stavridis, former commander of NATO and an NBC analyst. “One is the distinct possibility of a sixth North Korean nuclear weapons detonation and the other is an American carrier strike group, a great deal of firepower headed right at the Korean Peninsula.”
The U.S. is aware that simply preparing an attack, even if it will only be launched if there is an “imminent” North Korean action, increases the danger of provoking a large conflict, multiple sources told NBC News.
“It’s high stakes,” a senior intelligence official directly involved in the planning told NBC News. “We are trying to communicate our level of concern and the existence of many military options to dissuade the North first.”
“It’s a feat that we’ve never achieved before but there is a new sense of resolve here,” the official said, referring to the White House.
The unofficial admission that a preemptive strike is imminent comes on the same day the U.S. announced the use of its MOAB in Afghanistan, attacking underground facilities, and on the heels of U.S. missile strikes on a Syrian airbase last week, a strike that took place while President Trump was meeting with Chinese President Xi Jinping at Mar-a-Lago.
Earlier today, Trump gave China what amounted to a tacit ultimatum: deal with North Korea, or Trump will.
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.
And as the clock is ticking, officials have told NBC that Trump has talked to Chinese president Xi twice about North Korea since their Florida summit.
China has since sent its top nuclear negotiators to Pyongyang to communicate the gravity of the situation to the North, officials say. On Wednesday, President Xi called for a peaceful resolution to the escalating tensions.
It’s not just China: “Moscow has weighed in as well: “We are gravely concerned about Washington’s plans regarding North Korea, considering hints about the unilateral use of a military scenario” the Putin government said in a press release issued on Tuesday.”
Ultimately, the only thing standing between Kim and a Tomahawk is a decision by South Korea, where as a reminder, the political regime has been in chaos since the impeachment of former president Park.
Implementation of the preemptive U.S. plans, according to multiple U.S. officials, depends centrally on consent of the South Korean government. The sources stress that Seoul has got to be persuaded that action is worth the risk, as there is universal concern that any military move might provoke a North Korean attack, even a conventional attack across the DMZ.
Tensions have escalated on the Korean Peninsula, as this Saturday marks the anniversary of the birth of the nation’s founder — Kim il-Sung, grandfather of the current leader, Kim Jong-un. At the highest levels in South Korea and the U.S., sources told NBC News, there are fears North Korea could mark the “Day of the Sun” by testing a nuclear device. As discussed yesterday, North Korea in the past has used these national holidays to celebrate the strengths of the regime and to reinforce the national narrative of their independence, as confirmed by Cha.
“I think that is what President Trump is trying to get the Chinese to do,” said Cha. “[It] would impose real pain and force real choices on North Korea — whether the costs are worth it for them to continue to pursue this program if they no longer have any sustenance.”
In addition to the coal ships, the Chinese made an important gesture at the UN Thursday: A surprising abstention on a Security Council resolution condemning a Syrian chemical weapons attack. China didn’t stand with the Russians on Syria, as it has in the past.
But the biggest indicator may have been the market: for the first time in month, the S&P closed on the lowest tick of the day ahead of a long weekend, almost as if traders had no desire to go long into a the 72 hours in which there is a non-trivial chance that, in some form or another, a nuclear device may go off, coupled with the launch of an unknown number of US Tomahawk missiles.
end
After much anticipation, North Korea finally launches its missile late Saturday night and it blow seconds after launching. President Trump offers no further comment as to what he intends to do:
(courtesy zero hedge)
North Korean Missile “Blows Up” During Launch; President Trump Aware, Has “No Further Comment”
The initial official reactions to the failed missile launch are beginning to hit the wires:
U.S. Pacific Command on North Korea missile launch:
U.S. Pacific Command detected and tracked what we assess was a North Korean missile launch at 11:21 a.m. Hawaii time April 15. The launch of the ballistic missile occurred near Sinpo.
The missile blew up almost immediately. The type of missile is still being assessed.
U.S. Pacific Command is fully committed to working closely with our allies in the Republic of Korea and in Japan to maintain security.
Additionally, Secretary of Defense Mattis says President Trump is aware of the situation and has “no further comment” on failed North Korean missile test.
The big question is whether Trump will retaliate while VP Pence is in South Korea.
* * *
As we detailed earlier, after Saturday came and went without any provocation out of North Korea on its national holiday, many asked if Kim Jong-Un had finally learned his lesson.Well, according to South Korean news agency, not only did Kim not learn any lesson – or heed Trump’s warning that a nuclear test or missile launch would be grounds for a US military strike – but Kim was not even successful in properly defying the US as according to the Joint Chiefs of the South Korean army, North Korea fired an unidentified missile but the test failed. The incident occurred a day after Kim Jong Un oversaw an elaborate military parade in the center of Pyongyang as the world watched for any provocations that risk sparking a conflict with the U.S.
According to a US official quoted by CBS, the launched missile was not an intercontinental ballistic missile, which North Korea has claimed to possess but has never successfully tested. It’s unclear why the missile failed.
The missile “blew up almost immediately” on its test launch on Sunday, the U.S. Pacific Command said, hours before U.S. Vice President Mike Pence was due in the South for talks on the North’s increasingly defiant arms program.
As Yonhap further reports, North Korea’s attempted missile launch on Sunday ended in failure, South Korea’s Joint Chiefs of Staff (JCS) said.
“The North attempted to launch an unidentified missile from near the Sinpo region this morning but it is suspected to have failed,” the South’s Office of the Joint Chiefs of Staff said in a statement
The missile launch attempt came amid rising tensions with the United States that is sending an aircraft-carrier strike group to waters off the Korean Peninsula to deter potential North Korean provocations such as a nuclear test.
As VoA reports, there is still no information on the type of missile the DPRK tried to launch from Sinpo, where North Korea has a submarine base. What we do know, however, is that the time of the missile launch was at 06:20 am Korean time, and as Reuters also adds, the missile launched earlier this month flew about 60 km (40 miles) but what U.S. officials said appeared to be a liquid-fueled, extended-range Scud missile only traveled a fraction of its range before spinning out of control.
“It appears today’s launch was already scheduled for re-launching after the earlier test-firing” Kim Dong-yub, a military expert at Kyungnam University’s Institute of Far Eastern Studies in Seoul.
“This launch can possibly be a test for a new type of missile or an upgrade,” Kim added. The North has said it has developed and would launch a missile that can strike the mainland United States but officials and experts believe it is some time away from mastering all the necessary technology.
Tension had escalated sharply in the region amid concerns that the North may conduct a sixth nuclear test or a ballistic missile test launch around the April 15 anniversary it calls the “Day of the Sun.”
That said, in light of the recent NYT report that the US has been able to sabotage and remotely control North Korean launches for years courtesy of cyberattacks, one does wonder if the US did not play at least a minor role in this attempted, but failed, launch.
Three years ago, President Barack Obama ordered Pentagon officials to step up their cyber and electronic strikes against North Korea’s missile program in hopes of sabotaging test launches in their opening seconds.
Soon a large number of the North’s military rockets began to explode, veer off course, disintegrate in midair and plunge into the sea. Advocates of such efforts say they believe that targeted attacks have given American antimissile defenses a new edge and delayed by several years the day when North Korea will be able to threaten American cities with nuclear weapons launched atop intercontinental ballistic missiles.
Sabotage or not, at this moment Vice President Mike Pence is en route to South Korea on Saturday night for meetings with officials amid increased tensions in the region over Pyongyang’s nuclear program and missile tests.
As we await more information, the immediate question is whether the mere intent to test the US’ resolve, even if such an attempt was ultimately a failure will be sufficient for the US to commence bombing Pyongyang. Recall that two days ago, NBC reported that the US is prepared to launch preemptive strikes on North Korea in case Kim Jong-Un was planning on conducting a nuclear test. One can probably extrapolate the same logic to ballistic missile launches, especially now that North Korea revealed a new, far bigger ICBM during the Saturday parade.
We expect the answer whether the US will strike North Korea to be revealed within the next few hours.
Meanwhile, courtesy of Stratfor, here are four possible scenarios on what happens next:
A Red Line at the 38th Parallel
A Range of Options
Action against North Korea could take many shapes or forms, from a limited strike to a large-scale military offensive targeting all of North Korea’s military assets. On the lowest end of the scale, the United States could launch a strike to punish North Korea for continuing to develop its nuclear and missile arsenal and to deter it from pursuing nuclear weapons in the future. A punitive strike may be limited to a single base or facility in the country, with the threat of further action down the line if Pyongyang doesn’t alter its behavior. Though this kind of attack offers the best way to keep the situation from escalating, it would by no means ensure that North Korea heeds the United States’ warning and eases up on its nuclear and missile development. Nor does it eliminate the risk that Pyongyang may respond to the strike in kind.
Alternatively, the United States could elect to launch a more comprehensive punitive or preventive strike in an attempt to physically interrupt the nuclear and missile programs’ maturation. The strikes would still be limited, focusing only on nuclear and missile infrastructure to signal that the United States is not trying to orchestrate a change in the country’s leadership. This kind of operation, such as a strike on a single target, would encourage North Korea to curb its response so as not to provoke further attacks — though a full-scale retaliation could not be ruled out.
If Washington judges that Pyongyang is likely to launch a counterattack regardless, it may decide a comprehensive campaign to degrade or eliminate North Korea’s retaliatory capacity would be most prudent. This scenario would best position the United States and its allies against a North Korean response, but it would entail significant risks, virtually guaranteeing full-blown war on the Korean Peninsula. Consequently, a campaign of this magnitude would require buy-in from regional actors — something that has yet to manifest — and a buildup of military assets far greater than what the United States has deployed in the region so far. A more limited strike, be it a focused punitive strike or a larger one targeting nuclear and missile infrastructure, is more likely at this point. In the meantime, the Pentagon has rerouted several carrier strike groups to the waters surrounding the Korean Peninsula.
Weighing the Risks
Such an operation could involve cruise missiles as well as fixed-wing aircraft conducting strikes against various facilities across North Korea. Prime targets include the nuclear reactor or uranium enrichment facility at Yongbyon, as well as North Korean nuclear scientists. Should the United States plan more extensive strikes aimed at disabling all elements of the North Korean nuclear program, it may also deploy special operations forces to go after underground facilities that airstrikes couldn’t easily or reliably destroy. But the broader the target set, the greater the risk of retaliation. North Korea has a hefty arsenal of short- and medium-range missiles that it could launch at nearby targets, including U.S. military facilities elsewhere in the region. Pyongyang’s conventional artillery, moreover, could also do significant damage to northern areas of South Korea, reaching as far as the country’s capital. U.S. military planners would likely view this kind of escalation as an unacceptable risk.
The United States will base its decision about whether and how to strike North Korea in large part on the kind of reaction it anticipates from Pyongyang. North Korea has many reasons to mount a credible retaliation to any action taken against it, not only to maintain the appearance of a powerful actor on the global stage but also to ensure domestic stability. A weak response from North Korean leader Kim Jong Un’s administration could undermine its legitimacy among the country’s public or perhaps prompt a palace coup. At the same time, however, Pyongyang understands that a significant retaliation would meet with a commensurate response, which could cripple North Korea’s military capabilities.
If the United States determines the country is unlikely to take that kind of chance, it will have little else standing in the way of a military strike. Short of that scenario, however, Washington may still be willing to assume the risks of a limited retaliation. The United States could consider the launch of a small number of missiles that might be intercepted, for example, or incursions by North Korean special operations forces into South Korean territory to be acceptable consequences. Even low-level naval skirmishes may not be considered too great a repercussion. Still, anticipating the scale of North Korea’s response is a daunting and treacherous gamble.
Beijing’s Options
Then there’s China’s response to consider. Until now, Beijing has stressed diplomatic solutions to ease the rising tension, all the while warning against the chain reaction that military action against Pyongyang could set off. Beijing has consistently made clear that its red line on the issue is war or instability on the Korean Peninsula; China wants to make sure that it has a pliable buffer state along its northeastern border.
In the event of a military strike against North Korea, China could intervene, either to support the North Korean government or to facilitate a power transition without jeopardizing order in the country. Its options for intervention range from military backing for Pyongyang to support for a U.S.-led military campaign to a decapitation strike. But whatever path it chooses, it will stay focused on ensuring the North Korean state’s continuity and preventing any scenario that could lead the Korean Peninsula to unify under a competing power.
The United States would doubtless risk a response in kind from China should it launch a military strike without consulting Beijing. And if Washington were to launch a full-scale campaign against North Korea, or if a limited attack spirals into a war, the likelihood of a Chinese military intervention to secure its interests on the Korean Peninsula will climb. Along with its desire to keep a buffer between its territory and U.S. forces in South Korea, China is worried about the threat of spillover from a potential conflict in North Korea.
What to Watch Out For
The window has not closed on a diplomatic solution to the problem. Pyongyang may decide to postpone its nuclear test, and the United States, in turn, could delay military action in favor of tougher sanctions. Still, given the high stakes at play, Stratfor will be watching closely for early warnings of impending military action.
Defensive Preparations Near the North-South Border
South Korea is always on alert during its northern neighbor’s test cycles. And because it is a prime target for North Korea’s prospective retaliatory action, the country is anxious about the possibility of a military strike — all the more so as it deals with prolonged political instability at home. South Korea’s acting president has ordered his military to intensify preparations. But reports have yet to surface that the country is bolstering security at the border.
A Shutdown at China’s Border
Overall, we are on the lookout for any sign that China is changing its military posture or taking steps to evacuate foreigners from North Korea. Reports suggest that China is mobilizing troops along the border, though we have not been able to verify these claims. Nonetheless, Air China — one of two airlines with service to North Korea — has announced that it is canceling flights to the country starting April 17. As one of the only countries that operate flights to North Korea, China may be trying to prove that it is willing to ramp up its economic pressure on Pyongyang. Otherwise, it may have canceled the flights simply because of low passenger turnout. The move could also be a precautionary measure, though, and we’re watching to see whether it indicates that China is preparing for a military crisis.
Changes in Travel Plans or Diplomatic Activity
Changes to the itinerary of U.S. Vice President Mike Pence’s impending 10-day tour of the Asia-Pacific region would be a red flag. He is expected to celebrate Easter with U.S. forces in South Korea. A sudden uptick in diplomatic activity between the United States and China, likewise, could signal imminent action in North Korea.
US Cyber Attack “Sabotaged Kim’s Missile Launch”, Former British Foreign Secretary Claims
Seemingly confirming what we hinted at previously, The Sun newspaper reports that the US may have sabotaged Kim Jong-un’s missile test yesterday through a cyber-attack causing the rocket to spectacularly flop, according to a former British foreign secretary.
In light of the recent NYT report that the US has been able to sabotage and remotely control North Korean launches for years courtesy of cyberattacks, we previously wondered if the US did not play at least a minor role in this attempted, but failed, launch.
Three years ago, President Barack Obama ordered Pentagon officials to step up their cyber and electronic strikes against North Korea’s missile program in hopes of sabotaging test launches in their opening seconds.
Soon a large number of the North’s military rockets began to explode, veer off course, disintegrate in midair and plunge into the sea. Advocates of such efforts say they believe that targeted attacks have given American antimissile defenses a new edge and delayed by several years the day when North Korea will be able to threaten American cities with nuclear weapons launched atop intercontinental ballistic missiles.
And now, as The Sun reports, Sir Malcolm Rifkind claims American intelligence has used cyber warfare to successfully foil missile tests before and that there is a “strong belief” that President Trump’s administration was behind North Korea’s latest failed launch.
Speaking with the BBC, he said:
“It could have failed because the system is not competent enough to make it work, but there is a very strong belief that the US through cyber methods has been successful on several occasions in interrupting these sorts of tests and making them fail.”
But Sir Malcolm, who served as foreign secretary from 1995 to 1997 in John Major’s government, did warn that despite the missile flop, North Korea remains a serious nuclear threat. He said:
“But don’t get too excited by that, they’ve also had quite a lot of successful tests.
“They are an advanced country when it comes to their nuclear weapons programme. That still remains a fact – a hard fact.”
Shell-shocked North Korean experts admit the secretive nation now appears far more advanced than previously thought. Dave Schmerler, a research associate at the Middlebury Institute of International Studies in California, told The Wall Street Journal: “We’re totally floored right now. I was not expecting to see this many new missile designs.”
Sabotage or not, one can’t help but wonder if the US intelligence agencies have the capability to blow up a North Korean missile after launch, do they also have the capability to ‘launch’ a North Korean missile, setting in motion yet another ‘safe’ false flag to enrage the world?
end
NORTH KOREA/USA
Trump is considering a sudden first strike against North Korea
(courtesy zero hedge)
Trump Considering “Kinetic Military Action” On North Korea Including “Sudden Strike”
Following Sunday’s failed medium-range missile test by Kim Jong-Un, President Donald Trump has been evaluating his response options and according to Bloomberg, which cited a “person familiar with his thinking”, is willing to consider ordering “kinetic” military action, including a sudden strike, to “counteract North Korea’s destabilizing actions in the region”
However, before launching another offensive campaign – or war as some would call it – Trump’s preference is for China to take the lead on dealing with North Korea, according to the source.
While still afforded the luxury of time, Trump may be forced to decide soon how to respond: on its take on the ongoing North Korea crisis, the New York Times said in a front-page article that “what is playing out, said Robert Litwak of the Woodrow Wilson International Center for Scholars, … is ‘the Cuban missile crisis in slow motion,’ but the slow-motion part appears to be speeding up.”
That said, Trump’s reported strategy isn’t a radical departure from long-standing U.S. policy. As Bloomberg writes, “he isn’t particularly interested in toppling the regime of leader Kim Jong Un and isn’t looking to force a reunification of the two Koreas, the person said. He instead wants to push for their long-term cooperation.”
Furthermore, Trump’s national security team had already thought through various scenarios that North Korea might take, and how the U.S. would react. So when the medium-range missile test failed right after launch early Sunday morning local time, Trump was informed immediately and decided to downplay it, according to the person. It was Trump’s decision that the administration’s initial response would come from Defense Secretary James Mattis, who issued a 22-word statement Saturday night.
This was followed by National Security Adviser General H.R. McMaster, who used familiar language Sunday to describe North Korea’s “provocative and destabilizing and threatening behavior,” while leaving all options on the table as his team helps develop plans of action for the region. In a previously reported interview Sunday on ABC’s “This Week,” McMaster said Trump had directed the National Security Council to collaborate with the Defense and State Departments, and intelligence agencies to “provide options and have them ready for him if this pattern of destabilizing behavior continues.”
Hours after the failed test, McMaster emphasized Trump’s preference, as with this month’s airstrikes in Syria, for unannounced military action. He added that the North Korean leader’s unpredictability complicated U.S. strategy.
McMaster’s use of “provocative” and “destabilizing” to describe North Korea echoes administrations of both parties that have attempted to rally others on the global stage, including China, to help prevent fresh war on the peninsula. Trump used the language in his February visit with Japanese Prime Minister Shinzo Abe.
Meanwhile, China has refused to commit to any specific course of action and as discussed earlier, Beijing made a plea for a return to negotiations. Foreign Ministry spokesman Lu Kang said Monday that tensions need to be eased on the Korean Peninsula to bring the escalating dispute there to a peaceful resolution. Lu said Beijing wants to resume the multi-party negotiations that ended in stalemate in 2009 and suggested that U.S. plans to deploy a missile defense system in South Korea were damaging its relations with China.
Ultimately, Trump may be in wait and see mode for the next week until all the available options are on the table: on April 25, the USS Carl Vinson aircraft carrier is expected to reach the South Korea east coast on April 25. If Trump is indeed pressed to make a swift decision, he will surely do so once air support is available next weekend, just as the first round of the French presidential election takes place.
end
Monday afternoon
It does not seem that North Korea is backing down as they threaten missile tests on a weekly basis
(courtesy zero hedge)
Provocation Guaranteed As North Korea Threatens Missile Tests “On A Weekly Basis”
Despite Trump and Pence’s warnings, it seems North Korea will not back down…
“North Korea would do well not to test his resolve or the strength of the armed forces of the United States in this region.”
Vice Foreign Minister Han Song-Ryol told the BBC’s John Sudworth in Pyongyang…
“We’ll be conducting more missile tests on a weekly, monthly and yearly basis,”
He added that:
an “all out war” would result if the US was “reckless enough to use military means”.
Certainly seems like rhetoric is worsening, not improving, and if Trump is to be held to his pre-emptive word then this threat of guaranteed provocation, guarantees a pre-emptive strike.
b) REPORT ON JAPAN
c) REPORT ON CHINA
China/Air China/North Korea
Escalation continues as Air China suspends flights to North Korea
(courtesy zerohedge)
Air China Suspends Flights To North Korea As Kim Vows “Merciless Response To Any US Provocation”
In the latest escalation over what may be an imminent preemptive airstrike on North Korea by US warships now located just 300 miles away from the North Korean nuclear test site, moments ago China’s national airline, Air China, announced it was suspending flights from Beijing to the North Korean capital, Pyongyang, from late on Friday, Chinese state broadcaster CCTV said. It did not say why the flights, which operate on Monday, Wednesday and Friday, were being suspended.
In the report published on its website, CCTV did not cite a source while according to Reuters, Air China could not immediately be reached for comment after business hours. The last flight between the two cities took place on Friday, with the return flight to Beijing arriving in the early evening, the broadcaster said. Air China began regular flights between the two countries in 2008 but the flights were frequently cancelled because of unspecified problems, the broadcaster said. China is North Korea’s sole major ally but it disapproves of the North’s weapons programs, and its confrontations with the United States and its Asian allies, and it has supported U.N. sanctions against it.
Following repeated missile tests that drew international criticism, China banned all imports of North Korean coal on Feb. 26, cutting off the country’s most important export product. North Korea’s army vowed a ‘merciless’ response to any US provocation, the official news agency reported Friday, as tensions soar over Pyongyang’s rogue nuclear program.
Meanwhile, after warning that it was ready to “go to war”, on Friday North Korea’s army vowed a “merciless” response to any US provocation, the official news agency reported Friday. A statement of KCNA, which cited Washington’s recent missile strike on Syria, said the administration of President Donald Trump had “entered the path of open threat and blackmail against the DPRK”.
DPRK supreme leader inspects army’s special operation forces amid tension with U.S. http://ht.ly/xFT830aQZio
China Warns North Korea War “Could Break Out At Any Moment”
“North Korea is a problem,” Trump told reporters at the White House on Thursday. “The problem will be taken care of.”
Which prompted North Korea’s rebuke of US President Trump’s “aggressive words,” overnight.
Both China (“The situation now is similar to the time before a storm, and this kind of dangerous situation worth of our attention and we must be alert,”) and Russia (watching the developments around North Korea with “great concern”) have weighed in on the increasingly tense saber-rattling occurring between the two nations.
As Bloomberg reports, China warned that a war on the Korean Peninsula would have devastating consequences and “one has the feeling that a war could break out at any moment.”
Chinese Foreign Minister Wang Yi urged all parties “to stop provoking and threatening each other and not to make the situation irretrievable,” seemingly fearful that the next step could make war (world-inclusive) inevitable.
“No matter who the nation is, if it continues to provoke wars in the Peninsula, it has to bear this historical responsibility and pay its price.”
“Once a war really happens, the result will be nothing but losing all round and no one could become a winner,” Wang told reporters in Beijing on Friday, according to the official Xinhua News Agency.
These concerns were echoed by a senior Russian lawmaker who, as AP reports, says the US is a greater threat to global peace than North Korea…
Konstantin Kosachev, the head of the Foreign Affairs Committee in the upper house of Russian parliament, said Friday “the most alarming thing about the current U.S. administration is that you can’t be sure if it is bluffing or really going to implement its threats.”
He says “America objectively poses a greater threat to peace than North Korea,” adding that “the entire world is scared and left guessing if it strikes or not.”
Kosachev says there is a “small hope” that President Donald Trump’s administration would listen to warnings from Russia and China not to use military force against nuclear-armed Pyongyang.
U.S. Vice President Mike Pence heads to Asia on a 10-day trip that will include South Korea. Pence plans to celebrate Easter with U.S. and Korean troops on Sunday before talks on Monday with acting President Hwang Kyo-ahn.
“We’re going to consult with the Republic of Korea on North Korea’s efforts to advance its ballistic missile and its nuclear program,” a White House foreign policy adviser told reporters, previewing Pence’s trip. Pence will land in Seoul the day after North Korea’s biggest national day, the “Day of the Sun.”
The White House has contingency plans for Pence’s trip should it coincide with a another North Korean nuclear test by its leader Kim Jong Un, the adviser said. “Unfortunately, it’s not a new surprise for us. He continues to develop this program, he continues to launch missiles into the Sea of Japan,” the adviser said.
“With the regime it’s not a matter of if – it’s when. We are well prepared to counter that,” the adviser said.
But, with Trump’s pre-emptive strike looming Damocles sword-like overhead, the world is watching North Korea as speculation mounts that Kim Jong Un’s regime will carry out a ballistic missile or nuclear test this weekend to mark the 105th birth anniversary of his grandfather Kim Il Sung, the nation’s founder, on Saturday.
end
CHINA/USA/RUSSIA
This is getting scary! Both China and Russia dispatch naval vessels to the Korean Peninsula to track the USS Carl Vinson
(courtesy zero hedge)
China, Russia Dispatch Naval Vessels To Track USS Carl Vinson To Korean Peninsula
Video has been released allegedly showing a mass military mobilization in Vladivostok, Russia, just eight miles from the border with North Korea, as the world edges towards war.
As The Express reports, the dramatic move, unconfirmed by the Russian government, was spotted by residents in the border city and posted on social media.
According to the reports, a military convoy of eight surface-to-air missiles, part of Russian Air Defence, were on the move.
The S400 anti-aircraft missiles were moved to Vladivostok, where Vladimir Putin already has a major navy base.
Furthermore, As the following footage shows (beginning at aorund 1:20 below) Chinese military assets are also being moved to the North Korean border…
In addition to military forces, AP reportsChina and Russia have dispatched intelligence-gathering vessels from their navies to chase the USS Carl Vinson nuclear-powered aircraft carrier, which is heading toward waters near the Korean Peninsula, multiple sources of the Japanese government revealed to The Yomiuri Shimbun.
It appears that both countries aim to probe the movements of the United States, which is showing a stance of not excluding military action against North Korea. The Self-Defense Forces are strengthening warning and surveillance activities in the waters and airspace around the area, according to the sources.
The aircraft carrier strike group, composed of the Carl Vinson at its core with guided-missile destroyers and other vessels, is understood to be around the East China Sea and heading north toward waters near the Korean Peninsula.
The dispatch of the intelligence-gathering vessels appears to be partly aimed at sending a warning signal to the United States.
Yonhap reports that the USS Carl Vinson is expected to reach South Korea’s east coast by April 25th.
end
CHINA/HONGQIAO
We have another biggy fraud: aluminum producer China Hongqiao is facing default as accounting firm Ernst and Young walks away:
(courtesy zerohedge)
World’s Biggest Aluminum Producer Faces Default, Warns Of “Dramatic Social Unrest” Without A Beijing Bailout
Step aside China Huishan Dairy Holdings – a company which cratered last month after a negative Muddy Waters research report brought attention to a company we knew for one year was collateralizing its cows to fund stock buybacks – and make space for what may be the next Chinese megafraud.
While China Hongqiao Group may be best known for being the world’s largest aluminum producer, it has in recent months featured just as prominently among short-seller reports who have accused the company of being a fraud. As the WSJ’s Scott Patterson writes, questions about China Hongqiao’s finances first emerged in November, when an anonymous short seller wrote on a website called Hongqiao Exposed that the company’s profits are “too good to be true.” China Hongqiao in the March 31 statement called the report “untrue and unfounded.”
A subsequent 46-page report on Feb. 28 by Emerson Analytics, a trading firm focused on Chinese stock-market fraud, disclosed more allegations of fraud involving the Chinese commodity giant.
Emerson accused China Hongqiao of “abnormally high” profits generated by underreporting production costs and disclosing electricity expenses—one of the biggest costs for aluminum producers—as much as 40% below their true cost. Emerson said it investigated Chinese electricity costs, spoke to former China Hongqiao employees and compared the company’s costs and profits with other comparable companies.
Additionally, China Hongqiao has been more profitable than some Chinese competitors. For instance, China Hongqiao earned an average operating profit margin of 27% in the past five years, compared with minus-1.7% for state-owned Aluminum Corp. of China , known as Chalco, and 5.9% for Alcoa, according to FactSet. “People were always skeptical about how they managed to be more profitable than their peers,” said Sandra Chow, a credit analyst at CreditSights.
And while China Hongqiao denied the Emerson report’s allegations and said it hired an investigative agency to look into the firm and people behind the claims, things are starting to unravel rapidly for the Chinese megacap.
As Patterson reports, China Hongqiao – the world’s biggest aluminum producer – is in trouble, locked in a feud with its accountant over fraud allegations that have forced it to suspend trading of its shares and seek help from the central government in Beijing.
Just like in the case of its cow dairy peer, the problems emerged to the surface following the bearish 3rd party reports. Just days after the Emerson Analytics note, on March 4 China Hongqiao sought assistance from a trade group, the Chinese Non-Ferrous Metals Industry Association, or CNIA, saying the short sellers’ claims of inflated profits were forcing the company’s accountant, Ernst & Young, “to adopt an extremely conservative and careful attitude.” One wonders just whose books E&Y had been reviewing until that point if it took an outside party to bring attention to potential fraud at one of its biggest Chinese clients.
From that point, it all just spiralled out of control: on March 6, Ernst & Young notified the company it had suspended its audit of its 2016 financial results, according to a March 31 statement by China Hongqiao. Ernst & Young asked the company to commission an independent investigation into the short sellers’ claims, delaying the release of the company’s annual financial results, China Hongqiao said.
With E&Y washing its hands of China Hongqiao, and without audited results, China Hongqiao said in its letter to CNIA, the company risks an investigation from Hong Kong securities regulators and a credit crunch. According to the WSJ, the company has about $10 billion in debt and could be in default on a $700 million loan unless it gets waivers from creditors, says Standard & Poor’s Global Ratings. S&P, citing the move by Ernst & Young, has downgraded China Hongqiao’s bonds a notch deeper into junk territory to B-plus. Once again, one wonders just who both E&Y and S&P were analyzing until the emergence of the short seller’s report.
To be sure, in its March 31 statement, China Hongqiao denied the short sellers’ fraud allegations, calling them “untrue and unfounded.” Ernst & Young declined to comment, but by then the market had largely smelled a rat, prompting China Hongqiao to demand both the CNIA and the Chinese government to come to its aid, warning in its March 4 letter of “serious effects” if nothing is done, including “regional systemic financial risks” and “dramatic social unrest.”
Ah yes, playing the usual assured destruction card if nothing is done card. Only in this case, the megafraud, pardon aluminum producer may have a point. You see, over the past few years, China Hongqiao drew the attention of the global aluminum market and U.S. trade officials as it soared to the pinnacle of the industry leapfrogging the production of giant competitors like Alcoa in the U.S. and United Co. Rusal PLC in Russia.
As Patterson, who has been closely following the aluminum space for years notes, the rise coincided with American allegations that Chinese companies—helped by government subsidies—flooded the world with cheap aluminum, coal and steel, depressed prices and decimated U.S. industries. U.S.-Chinese trade issues were a focus of a two-day summit last week between President Donald Trump and President Xi Jinping of China.
The problem, now that the Company’s fraud appears to have been exposed, is that China Hongqiao, a Hong Kong-listed company, employs no less than 60,000 people. A sudden collapse may indeed result in “dramatic social unrest”
There is a silver lining: as the WSJ adds, “trouble for Hongqiao could upend the aluminum industry in China and present an opportunity for American producers who say the company has been using unfair tactics to dominate the industry. It could also reinforce the broader concerns over what many view as questionable business practices by China’s big industrial giants, many of which are increasingly active on the global stage.”
* * *
Perhaps the best news from this event, should it indeed result in the insolvency of China Hongqiao, is that one of the biggest commodity zombie companies will soon be wiped out, allow competitors to take its place.
Some statistics:
China’s aluminum output reached an estimated 31 million tons in 2016, according to the U.S. Geological Survey, more than half of global output and up 60% since 2011. That is the year China Hongqiao went public, raising $817 million. China Hongqiao’s founder, Zhang Shiping, holds an 81% stake in the company worth $5.3 billion, according to FactSet.
The U.S. government in January launched a formal complaint against the Chinese government with the World Trade Organization, accusing China of funneling artificially cheap loans from state-run banks to aluminum producers including China Hongqiao. China provides China Hongqiao with access to cheap coal, aluminum and electricity, according to the WTO complaint. The dispute shines a light on the underpinning of a Chinese aluminum boom that has roiled trade relations with the U.S.
China Hongqiao’s production capacity has almost quadrupled to 6.7 million metric tons since 2011, according to commodity researcher CRU Group. Rusal can produce 4.1 million tons of aluminum a year, Alcoa up to 3.4 million tons of aluminum a year, CRU says.
For now, it isn’t clear if the government or regulators will step in. According to the WSJ, the CNIA, the Hong Kong Securities and Futures Commission, and China’s Ministry of Industry and Information Technology, which oversees China’s industrial policies, didn’t respond to requests for comment.
The events are “very embarrassing for the Chinese and for Hongqiao,” said Paul Adkins, managing director of AZ China Ltd., a Hong Kong consultancy that tracks the Chinese aluminum industry.
Since this is just the tip of the iceberg for China’s “walking dead” commodity companies, Beijing has an option: proceed with even more bailouts, or prepare for much more embarrassment in the coming months as the veil is lifted and China’s commodity zombies – first profiled here in October 2015 – are exposed for the entire world to see.
END
CHINA/DATA
Chinese Economic Data Beats Across The Board After Record Credit Injection
Overnight China reported a barrage of economic data for March and Q1, that not only showed the first back to back GDP acceleration in seven years, but beat across the board as investment picked up, retail sales rebounded and factory output strengthened, following record credit growth and a fresh rebound in China’s property markets which defy Beijing’s attempts to taper the country’s newest housing bubble.
The Q1 data highlights:
- GDP rose 6.9%, above the 6.8% expected, and higher than the 6.8% in Q4
- Fixed-asset investment rose 9.2% y/y, up from 8.1%, and higher than the 8.8% estimate, and in line with the highest forecast among 35 economists
- Industrial Production rose 7.6% y/y in March; also well above the estimated 6.3% gain, and higher than the highest forecast of 6.5% among 37 economists polled
- Retail sales rose 10.9% y/y in March; beating estimates of 9.7%
“Growth remained strong on the back of continued strength in housing activity, resilient infrastructure investment, and better external demand,” said Robin Xing, chief China economist at Morgan Stanley in Hong Kong. “The strong growth and better external demand has provided room for a faster pace of countercyclical monetary policy tightening.”
In current-price terms, the economy expanded 11.8% from a year earlier, according to Bloomberg estimates. “That’s making the problem of excess leverage look a little more manageable – at least as long as factory reflation stays strong,” BI economists Tom Orlik and Fielding Chen wrote in a report. Of note: the GDP internals pointed to further rebalancing away from the old industrial growth drivers. Consumption reportedly contributed 77.2% to growth in the first quarter, an NBS spokesman said at a briefing in Beijing. Last year, 64.6% of growth came from consumption, although one traditionally takes such goalseeked breakdowns with a grain of salt.
The Q1 expansion validated China’s recent rebound as producer prices have soared, resulting in the ongoing global “reflation” trade, as industrial output picked up courtesy of soaring credit. Still, one measure of consumer earnings slowed. Growth of median per-capita disposable income decelerated to 6.7% in the first quarter, down from 8.3% last year and slower than GDP expansion for the first time since NBS began releasing the gauge in March 2014.
“The rebound in retail sales growth was particularly important as it indicates that consumer spending remains strong,” said Rajiv Biswas, Asia-Pacific chief economist at IHS Markit in Singapore. “The upturn in Chinese growth is a very positive indicator for the Asia Pacific and world growth in 2017, as well as underpinning the near-term outlook for global commodities.”
Quoted by Bloomberg, Raymond Yeung, chief greater China economist at Australia & New Zealand Banking Group Ltd. in Hong Kong said “for the first time in the recent years, China starts a year with a strong headline GDP. Thanks to strong investment and property, the economy is performing well.”
“The first quarter growth is mainly driven by reflation and very strong property sales and investment,” said Larry Hu, head of China economics at Macquarie Securities Ltd. in Hong Kong. “This strong data would give more confidence to maintain a tightening stance.”
Additionally, the labor market has been holding up too: The surveyed jobless rate fell in March from February, while the level in big cities was below 5 percent at end of last month, the NBS said. China said it added 3.34 million new jobs in the first quarter.
Other notable data releases overnight from China:
- China produced a record quantity of steel in March as production of crude steel expanded 1.8 percent from a year earlier
- Coal production rebounded in March after the government said it doesn’t intend to reintroduce widespread restrictions this year as long as prices remain acceptable to regulators
- Oil production stagnated in the first quarter, averaging 3.91 million barrels a day
- Investment in property development rose 9.1 percent in the first three months from a year earlier, compared with 8.9 percent in the first two months and 6.9 percent in 2016. Yet developers may find 2017 more challenging, as about a dozen cities have imposed tighter restrictions on purchases to curb a frenzy of speculation.
As Bloomberg adds, forecasters responded to the data by raising full-year growth estimates. Zhu Haibin, an economist at JPMorgan Chase & Co. in Hong Kong, boosted his to 6.7% from 6.6%, citing expectations for “solid growth momentum for the rest of the year.” Nomura Holdings Inc. analysts Yang Zhao and Wendy Chen raised their projection to 6.7 percent from 6.5 percent.
Despite recent property tightening measures, investment momentum is likely to stay strong in coming months amid heavy infrastructure investment. The April 1 announcement of the new Xiongan economic zone portends massive construction spending and suggests authorities are likely to remain reliant on investment to help support longer-term growth.
However, for all the rhetoric just one key variable mattered: China’s relentless credit pump. As reported on Friday, the broadest measure of new credit rose more than estimated last month amid strong growth in shadow banking. Aggregate financing grew 2.12 trillion yuan ($308 billion). Furthermore, for the first quarter, total social financing reached a new record high 6.93 trillion yuan – equivalent to the size of Mexico’s economy – and well above last year’s first quarter total. At today’s Yuan exchange rate, China’s credit creation in Q1 amounted to just over 1 trillion US dollars.
While the economic data was a welcome offset to this unprecedented credit boom, concerns continue to mount that with China’s growth primarily a function of relentless credit expansion it is only a matter of time before this debt-fueled model breaks and the world’s growth dynamo suffers a cardiac arrest.
END
4. EUROPEAN AFFAIRS
London/UK
London home prices down 4.6 to 10% as this market suffers its worst collapse since the financial crisis
(courtesy zero hedge)
London Housing Market Suffers Worst Collapse Since Financial Crisis
At the end of 2016 we reported that the formerly invincible London home market had suffered its biggest crack in years, when home prices plunged the most in six years according to Rightmove. Asking prices in London dropped 4.3% in December with inner London down 6%. Meanwhile, the most exclusive neighborhoods, like Kensington and Chelsea, recorded even sharper declines at nearly 10% as home buyers migrated to cheaper areas of the city.
While it was unclear what was the catalyst: whether post-Brexit nerves, China’s crackdown on capital outflows, the ongoing depressed commodity market, or reduced migrations by wealthy Russian and Arab oligarchs, what is obvious is that the slump has continued, and according to the Royal Institution of Chartered Surveyors, its price balance for the city fell to the lowest since February 2009 last month, plunging to minus 49, which means that a greater percentage of agents reported drops in March.
Still, as Bloomberg reports, more respondents than not still expect prices in London to rise over the next year, the report showed. they may be disappointed.
Speaking to Bloomberg, Samuel Tombs at Pantheon Macroeconomics said that the London measure tends to represent the prime market rather than the city as a whole. The slump in the gauge tallies with other reports of sellers in central London having to cut prices to close deals. Nationally, the RICS price index stayed at 22 in March, though the expectations for both values and sales over the next year weakened. New buyer inquiries and sales were stagnant, with the most expensive properties among the worst performers, according to report.
While buyers – especially those relying on mortgages – remain largely locked out of the market because of high prices, nervousness about Brexit and the U.K. outlook, price downside according to realtors may be “limited because of the continued shortage in the supply of property to buy, with estate agents’ listings reportedly at a record low.”
Which is odd because a cursory check reveals not only that there is a glut of high end properties, many of which have been on the market as long as a year, but that despite huge discounts as high as 40%, nothing is moving, and just this one listing service has no less than 124 pages of properties – at 15 properties per page – with price declines in Kensington and Chelsea alone, up from “only” 53 pages when we last looked at the same website back in December.
“High end sale properties in central London remain under pressure, while the wider residential market continues to be underpinned by a lack of stock,” said Simon Rubinsohn, RICS chief economist. “For the time being it is hard to see any major impetus for change in the market, something also being reflected in the flat trend in transaction levels.”
end
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
AFGHANISTAN/USA
USA releases the video of the MOAB bomb which was dropped in the remote region of Afghanistan along the Pakistan border. It was quite successful as it killed 36 ISIS fighters and sealed off major tunnels.
(courtesy zero hedge)
US Releases Video Of “Mother Of All Bombs” Explosion Which Killed 36 ISIS Fighters
One day after the Trump administration demonstratively used the GBU-43/B Massive Ordinance Air Blast bomb (MOAB, also known as Mother Of All Bombs) the most powerful non-nuclear bomb in the US arsenal in Afghanistan, in a clear show of force meant to send a signal to North Korea, it released a video of the explosion.
Afghan officials said 36 militants were killed in the strike in Nangarhar province, near the Pakistan border, where the US military previously estimated ISIS had 600 to 800 active fighters. There were no civilian casualties, according to the Ministry of Defense statement, which also said several ISIS caves and ammunition caches were destroyed. U.S. officials said precautions were taken to avoid civilian casualties. The ISIS commander in the area was among the dead, Afghanistan’s presidential palace said.
Hakim Khan, 50, a resident of Achin district where the attack took place, was quoted by CBS as saying he welcomed the attack on ISIS, saying, “I want 100 times more bombings on this group.”
But fierce opposition among Afghans also surfaced. Former President Hamid Karzai condemned the strike, saying it “is not the war on terror but inhuman, and (the) most brutal misuse of our country as (a) testing ground for new and dangeorus weapons. It is upon us,Afghans, to stop the USA.”
Karzi said, “I vehemently and in strongest words condemn the dropping of the latest weapon.”
Others were similarly stunned by the unexpected US show of force.
Since news of the strike broke, most social media users in Afghanistan criticized both the Afghan government and U.S. One user calleld it “our generation’s “Hiroshima,” adding, “I’m still in shock.”
In a 2003 review of the legality of using the MOAB, the Pentagon concluded that it could not be called an indiscriminate killer under the Law of Armed Conflict. “Although the MOAB weapon leaves a large footprint, it is discriminate and requires a deliberate launching toward the target,” the review said, adding, “It is expected that the weapon will have a substantial psychological effect on those who witness its use.”
Meanwhile, President Trump called the attack a “very, very successful mission.” The U.S. military headquarters in Kabul said in a statement that the bomb was dropped at 7:32 p.m. local time Thursday on a tunnel complex in Achin district of Nangarhar province, where the Afghan affiliate of ISIS has been operating. The target was close to the Pakistani border.
The U.S. estimates 600 to 800 IS fighters are present in Afghanistan, mostly in Nangarhar. The U.S. has concentrated heavily on combatting them while also supporting Afghan forces battling the Taliban. Just last week a U.S. Army Special Forces soldier, Staff Sgt. Mark R. De Alencar, 37, of Edgewood, Maryland, was killed in action in Nangarhar.
According to CBS, Adam Stump, a Pentagon spokesman, said the bomb was dropped from a U.S. MC-130 special operations transport. He said the bomb had been brought to Afghanistan “some time ago” for potential use. Army Gen. John W. Nicholson, commander of U.S. forces in Afghanistan, said in a written statement that the strike was designed to minimize the risk to Afghan and U.S. forces conducting clearing operations in the Achin area “while maximizing the destruction” of ISIS fighters and facilities. He said ISIS has been using improvised explosive devices, bunkers and tunnels to strengthen its defenses.
“This is the right munition to reduce these obstacles and maintain the momentum of our offensive against ISIS-K,” he added, using the U.S. military’s acronym for the ISIS affiliate.
Ismail Shinwari, the governor of Achin district, said the U.S. attack was carried out in a remote mountainous area with no civilian homes nearby. He said there has been heavy fighting in the area in recent weeks between Afghan forces and ISIS militants.
White House spokesman Sean Spicer said ISIS fighters had used the tunnels and caves in Achin to maneuver freely. “The United States takes the fight against ISIS very seriously and, in order to defeat the group, we must deny them operational space, which we did,” Spicer said.
* * *
With that we now turn our attention to North Korea, where many expect that an explosion of a similar magnitude is imminent over the next 48 hours.
END
India claims that 500 Pakistanis who were protecting ISIS fighters were killed in the blast. Former Prime Minister Karzai considers the USA bombing to be treasonous.
(courtesy zerohedge)
India Claims 500 Pakistanis (Protecting ISIS) Killed In “Treasonous” US Bombing In Afghanistan
While US officials have upped their death count from the Afghan MOAB drop to 94, Indian authorities are claiming that at least 500 Pakistani nationals (who had been protecting the ISIS operatives in this area) were killed in the US bombing in Nangarhar province.
One India reports that the area that was targetted was controlled by the Islamic State and protected by the Pakistan army, sources say.
The operation that was jointly coordinated by the 201 Selab Corps of the Afghanistan army targeted the caves and tunnels that were used as hiding places by the IS. It is now clear that the Pakistan army was backing these IS operatives in Afghanistan, official sources also confirmed.
Indian agencies who are coordinating withe counterparts in Afghanistan have learnt that there are no civilians living in the area. There were a large number of stooges of the Inter-Services intelligence who have been protecting the IS operatives in this area. The US action comes at a time when there was a huge build-up of IS forces in Afghanistan.
Indian agencies say that the Pakistan army and the ISI were nurturing these operatives. The entire area that was bombed was under the control of the ISI officials backing the IS, sources also said. The impact of the bomb was so huge that it blew up at least 500 Pakistanis and an equal number of IS operatives.
So, while India seems pleased with the result of the US bombing, not everyone else is. Reuters reports that former Afghan president Hamid Karzai accused his successor on Saturday of committing treason by allowing the U.S. military to drop the largest conventional bomb ever used in combat during an operation against Islamic State militants in Afghanistan.
Karzai, who also vowed to “stand against America”, retains considerable influence within Afghanistan’s majority Pashtun ethnic group, to which President Ashraf Ghani also belongs. His strong words could signal a broader political backlash that may endanger the U.S. military mission in Afghanistan.
“How could you permit Americans to bomb your country with a device equal to an atom bomb?” Karzai said at a public event in Kabul, questioning Ghani’s decision. “If the government has permitted them to do this, that was wrong and it has committed a national treason.”
“I decided to get America off my soil,” he said. “This bomb wasn’t only a violation of our sovereignty and a disrespect to our soil and environment, but will have bad effects for years.”
Ghani’s office said the strike had been closely coordinated between Afghan and U.S. forces and replied to Karzai’s charges with a statement saying:
“Every Afghan has the right to speak their mind. This is a country of free speech.”
Public reaction to Thursday’s strike has been mixed, with some residents near the blast praising Afghan and U.S. troops for pushing back the Islamic State militants.
end
U.S. Insurers Sue Saudis For $4.2 Billion Over 9/11
Authored by Jason Ditz via TheAntiMedia.org,
Last year’s Justice Against Sponsors of Terrorism Act (JASTA), a bill which allowed Americans to sue Saudi Arabia in US court over their involvement in 9/11, has yielded another major lawsuit yesterday, a $4.2 billion suit filed by over two dozen US insurers related to losses sustained because of the 2001 attack.
The lawsuit is targeting a pair of Saudi banks, and a number of Saudi companies with ties to the bin Laden family, accusing them of various activities in support of al-Qaeda in the years ahead of 9/11, and subsequently having “aided and abetted” the attack.
“But for the assistance provided by defendants,” the lawsuit said, “al Qaeda could not have successfully planned, coordinated, and carried out the September 11th attacks, which were a foreseeable and intended result of their material support and sponsorship of al Qaeda.”
The 10 defendants in the lawsuit include Al Rajhi Bank, aviation contractor Dallah Avco, the Mohamed Binladin Co, the Muslim World League, and other charities, but the biggest target is the Saudi National Commercial Bank, which is majority state-owned. The Saudi government heavily pressured the Obama Administration to block the JASTA last year, threatening to crash the US treasury market if it led to lawsuits, but overwhelming Congressional support still got it passed into law.
While there were more than a few lawsuits already filed in the past several weeks related to JASTA, this is by far the biggest, and most previous lawsuits are still in limbo as the court and lawyers try to combine them into various class action groups.
Historically, US sovereign immunity laws have prevented suits against the Saudi government related to overseas terrorism. With the release of the Saudi-related portions of the 9/11 Report last year, however, such suits were inevitable, and the federal government could no longer protect the Saudis from litigation.
end
TURKEY
Meet the new dictator of Turkey Erdogan as he declares victory in Turkey’s new constitutional referendum (after removing most of his enemies)
(courtesy zero hedge)
Watch Live: Erdogan Declares Victory In Turkey’s Constitutional Referendum
Live feed from Turkey via TRT World:
* * *
With over 97% of ballots counted, Turkey’s president Erdogan and soon, quasi dictator, declared victory in the Turkish referendum and called the leaders of three political parties supporting changes to the constitution to congratulate them on the victory, Anadolu news agency reported, and added rather comically that “many world leaders send congratulatory messages to President Erdogan.” One wonders who exactly…
#Breaking | President Erdogan congratulates heads of AK Party, MHP and BBP on referendum victory pic.twitter.com/KLufzQgL3k
#Breaking | Many world leaders send congratulatory messages to President Erdogan: Presidential sources
Absent some last minute fireworks, Turkey is now set to shift to a presidential system as the outcome of the referendum puts “Yes” votes at 51.3%, according to unofficial sources.
If you can’t win a vote after purging all your enemies & undermining the free press, you don’t deserve to run an authoritarian regime.
“Yes” votes were ahead at 51.3% or 24.598.880 votes, while “No” votes fell behind at 48.6% or 23,326,636 votes. “Yes” votes prevailed in four of Turkey’s seven regions, including southeastern Anatolia.
#Turkey#referendum2017 unofficial overall results
YES: 51.32%
NO: 48.68%
Ballots opened: 97.92%http://aa.com.tr/en
The reforms were approved by 339 deputies on January 21st, and Erdo?an signed the amendments on February 10th. Under the proposed changes, the post of prime minister is abolished and the president, vice president(s) and cabinet officials can be investigated by the parliament. The current system has no mechanism that monitors presidential conduct.
The new constitution proposes a streamlined legislative process. The post of prime minister will be abolished and the president will be able to issue laws by decree concerning specific areas of executive power. The parliament will be able to declare a decree void, and presidential decrees will be monitored by Parliament and the Constitutional Court.
The president will appoint four members to the Supreme Council of Judges and Prosecutors, Turkey’s highest legal body responsible for the judicial system, which is the same number as the president appoints now, and the Parliament will appoint the remaining members. The number of members will be reduced from 17 to 15.
The new constitution would also abolish military commissions and courts, which were the remnants of an outdated constitution written by coup plotting generals. This is perhaps one of the most significant of the proposed changes, because for the first time in Turkey’s history the judiciary would be completely under civilian control. The Cabinet will also be abolished but ministers will remain.
The president will also be able to appoint presidential aides and ministers and also unseat them.
The age of candidacy for required for the Parliament would be lowered from 25 to 18, and the total number of parliamentarians will increase from 550 to 600, in order to better represent the growing population.
Meanwhile, AP reports that Turkey’s main opposition party says it will challenge 37% of the votes counted in the referendum. Erdal Aksunger, deputy head of main opposition party CHP, tells reporters at televised press conference that there are about 2.5 million ‘problematic’ votes in the referendum. Aksunger has called on supporters not to leave ballot boxes until the count is over; “The election isn’t over. We are going to get what is our right.” Bloomberg adds that the High Election Board YSK counted around 1.5 million votes that should have been considered invalid
Separately, pro-Kurdish HDP party, former members of nationalist MHP party also contesting results with election board.
That said, one doubts the protests would have any impact on the final outcome which was largely expected.
A press conference is scheduled for 6pm GMT, 2pm ET, when the Turkish prime minister is expected to make statement on the referendum.
EU Rapporteur For Turkey Warns Turkish Talks Will Be Suspended If Erdogan Gets “Unchecked Powers”
Just hours after the predictable passage of today’s Turkish referendum, the EU has promptly slammed the outcome, warning it threatens to slide the country’s collapse into “authoritarianism” and that Turkey’s accession talks with the EU will be suspended if the constitutional package is implement as per today’s outcome.
In a post on the website of Kati Piri, the European Parliament’s Turkey rapporteur warned that if the referendum package is implemented unchanged, “this will have to lead to the formal suspension of the EU accession talks. Continuing to talk about Turkey’s integration into Europe under the current circumstances has become a farce.”
In her role as EU rapporteur for Turkey, Piri is responsible for drafting and presenting reports on Turkey’s progress to the EU parliament; rapporteurs are elected by other members of the European Parliament. Needless to say, her view of today’s referendum is hardly enthusiastic:
“The result of today’s vote is a major shift away from European values. Erdogan’s autocratic behaviour has deeply polarized Turkish society and harmed the economy. His accusations towards some EU leaders on ‘nazi practices’, seriously undermined Turkey’s credibility as a political partner.”
She then warns that after today’s referendum result, Turkey would become an “authoritarian system” which will give President Erdogan “unchecked powers.”
Which, of course, is the whole point.
As to how far Europe will go to antagonize Erdogan, recall that the Turkish president and soon, dictator, has some 2 million trump cards in the form of Syrian refugees contained inside Turkey’s borders, all just waiting for the green sign to flood Europe and unleash even more populist havoc in a continent where populism has emerged as the single biggest threat to the legacy status quo.
Full note from her website:
In an unfair election environment, a narrow majority of the Turkish population has endorsed the constitutional package that will give President Erdogan unchecked powers – which will fit an authoritarian system.
“This is a sad day for all democrats in Turkey. It is clear that the country cannot join the EU with a constitution that doesn’t respect the separation of powers and has no checks and balances. If the package is implemented unchanged, this will have to lead to the formal suspension of the EU accession talks. Continuing to talk about Turkey’s integration into Europe under the current circumstances has become a farce,” says the European Parliament’s Turkey rapporteur Kati Piri.
Piri: “The result of today’s vote is a major shift away from European values. Erdogan’s autocratic behaviour has deeply polarized Turkish society and harmed the economy. His accusations towards some EU leaders on ‘nazi practices’, seriously undermined Turkey’s credibility as a political partner.”
“I will continue to stand by all those fighting for democracy and fundamental rights in Turkey. Today’s outcome shows that there are millions of Turkish citizens who share the same European values and who chose for a different future for their country. The EU should never close the door to them.”
end
Monday/Turkey/EU:
EU leaders refuse to congratulate Erdogan/await the OECD report on voting irregularities:
(courtesy zero hedge)
EU Leaders Refuse To Congratulate Erdogan, Await OECD Report On Referendum Irregularities
Leaders of member states of the European Union have been cautious about the results of the referendum in Turkey. As KeepTalkingGreece.com reports, no EU leader sent the traditional congratulations message to President Recep Tayyip Erdogan for his victory so far. They are reportedly awaiting for the independent OECD report on alleged voting irregularities, especially after Turkish opposition parties shouted foul play and fraud.
In Germany, Chancellor Angela Merkel, in a joint statement with Foreign Minister Sigmar Gabriel, warned that the “tight referendum result shows how deeply divided Turkish society is and that means a big responsibility for the Turkish leadership and for President Erdogan personally”.
Julia Klöckner, a leading voice in Angela Merkel’s German CDU party said the door to EU accession was “well and truly shut” and called for billions of euros in contributions to finance Turkey’s bid to stop.
Elmar Brok, the German head of the European Parliament’s foreign affairs committee, said the result did not legitimise a complete overhaul of the state.
Austria‘s Foreign Minister Sebastian Kurz said the result was a “clear signal against the European Union”. The “fiction” of Turkey’s bid to join the bloc must be ended, he said.
The European Commission urged Turkey to seek “the broadest possible consensus” in implementing changes. It pointed to “alleged irregularities” in the vote and said it was awaiting the assessment of international observers.
European Commission statement issued April 16, 2017
President of the European Commission Jean-Claude Juncker, High Representative for Foreign Affairs and Security Policy/Vice-President of the European Commission Federica Mogherini and Commissioner for European Neighbourhood Policy and Enlargement Negotiations Johannes Hahn issued the following statement today:
“We take note of the reported results of the referendum in Turkey on the amendments to the Constitution, adopted by the Turkish Grand National Assembly on 21 January 2017.
We are awaiting the assessment of the OSCE/ODIHR International Observation Mission, also with regard to alleged irregularities.
The constitutional amendments, and especially their practical implementation, will be assessed in light of Turkey’s obligations as a European Union candidate country and as a member of the Council of Europe.
We encourage Turkey to address the Council of Europe’s concerns and recommendations, including with regards to the State of Emergency. In view of the close referendum result and the far-reaching implications of the constitutional amendments, we also call on the Turkish authorities to seek the broadest possible national consensus in their implementation.”
Greece that became also Erdogan’s target during the campaign keeps a stand-by attitude. Government sources said that Athens “supports stability and democracy in Turkey”. the sources added that the Greek government follows with great attention and interest the developments in the neighboring country and the referendum results.
6 .GLOBAL ISSUES
India
Not good! Again India has run out of cash as 90% of India’s ATM’s have run dry:
(courtesy zero hedge)
“Out Of Cash” – More Than 90% Of India ATMs Run Dry
Five months have passed since the demonetisation drive, but the people of India continue to face a shortage of cash in banks and ATMs. The Times of India reports that more than 90% of the ATMs in the northern region do not have cash, and in the southern states as many as 65% of ATMs have run dry.
Speaking to TOI, State Bank of India (SBI) deputy general manager Ajoy Kumar Pandit said the customers are losing confidence in them due to the crisis. “Nearly 70 per cent of our 648 ATMs in the three districts are out of cash. The rest will also become dry in the next few days as we do not have cash to refill the machines. We are helpless from our side,” he said.
A banking source said the RBI has diverted most of the cash to north India due to the recent elections. This has affected the southern parts of the country. “The government’s intention is to encourage smart payment systems, but the infrastructure is not up to the mark,” the source said. Many ATMs have not been upgraded with the new software required for handling the new Rs 500 and Rs 2,000 denominations, the source added.
India.com notes that the worst hit is the common man, who has been suffering the pinch even as the government has made an effort to make available sufficient cash in ATMs across the nation. The post-demonetisation woes continue to haunt the common man in the country as many ATMs in metro cities seem to be running low on cash for the last one week.
“No Cash” signs hang across ATMs across India…
One of the reasons why ATMs would be short of cash is because of the charges that have been levied in the coming months on ATM withdrawals. Currently, a customer has to pay Rs 20 per ATM withdrawal after five free transactions a month from a bank one has an account in. Customers using ATMs of banks they don’t have an account in are charged Rs 20 after three free withdrawals. However, banking officials said on Thursday that banks may slash the number of free ATM withdrawals or hike the charges levied to discourage people from using cash.
According to a survey conducted by the LocalCircles citizen engagement platform, it was reported that the availability of cash at ATMs has worsened in the last two months or so in many parts of the country. It reported that eighty-three per cent citizens who visited ATMs last week in Hyderabad, could not find the cash while it was 69 per cent in Pune.
C.H. Venkatachalam, general secretary of All India Bank Employees Association was quoted by Free Press Journal saying, “Actually, the problem is directly linked to demonetisation. Many ATMs are yet to be recalibrated. Plus, people have started hoarding Rs 2,000 notes. There is still a huge mismatch in the demand and supply of currency notes.” Meanwhile, Ashish Gupta, research analyst at Credit Suisse was quoted by Financial Times saying, “The government wants to slow down the cash money in the economy. They want the new equilibrium level in the economy to be lower”.
end
7. OIL ISSUES
8. EMERGING MARKETS
I brought this story to you on Thursday. Congress is now panicking because they now realize that if Venezuela defaults, major USA oil assets will fall into Russian Hands. Russia state owned Rosneft lent Venezuela 1.5 billion USA and as collateral, she gave 49.9% of CITGO which has 3 refineries and 800 gas stations. If Russia buys a tiny amount of CITGO debt, on default Russia could control the company and its assets on USA soil
(courtesy zerohedge/Oil Price.com/Nick Cunningham)
Congress Panics As US Oil Assets Could Fall Into Russian Hands If Venezuela Defaults
As we noted last night, 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…
And, as OilPrice.com’s Nick Cunningham details, that has members of Congress very nervous… If Venezuela defaults on its debt obligations, it could result in Russia taking control over U.S. refining assets, leading to more Russian “control over oil and gas prices worldwide,” which would “inhibit U.S. energy security, and undermine broader U.S. geopolitical efforts.”
That is the warning from two members of Congress, Reps. Jeff Duncan (R-SC) and Albio Sires (D-NJ). The two Congressmen sent a joint letter to the U.S. Secretary of Treasury Steven Mnuchin, requesting his attention on the matter. A bipartisan group of six U.S. Senators also requested a response from Secretary Mnuchin on the matter.
They cite the fact that Russia’s government-backed oil company, Rosneft, gave Venezuela’s state-owned oil company, PDVSA, a $1.5 billion loan. As collateral, PDVSA offered up 49.9 percent of Citgo, a subsidiary of the Venezuelan oil company. Citgo owns three refineries in the U.S., along with pipelines and retail gas stations.
The Congressmen are worried that if PDVSA defaults, Rosneft will seize the U.S.-based refineries.
“The Russian government could readily become the second-largest foreign owner of U.S. domestic refinery capacity,” which would be “to the detriment of U.S. interests,” the Congressmen wrote. “[W]e remain deeply concerned over the implications for U.S. national security.”
The concerns are rather odd. What exactly would “the Russians” do with the three refineries? The Congressmen seem to be suggesting that somehow Rosneft would conspire to restrict gasoline production to drive up prices in an effort to somehow weaken U.S. national security or the American economy. Related: Is The Oil Price Rally Running Out Of Steam?
This is silly. While Rosneft is state-owned, it is also a company that would rather not lose a ton of money. Even if Rosneft somehow gained control of Citgo’s refineries, restricting gasoline production might provide some discomfort for U.S. motorists in the region, but it would be financially ruinous to the Rosneft-controlled refineries. “The Russians can’t hold the U.S. hostage,” John LaForge, head of Real Assets strategy at Wells Fargo, told CNN. The three refineries are also a drop in the bucket as far as U.S. gasoline production is concerned. “Other refineries would love to pick up the slack,” LaForge added. Undoubtedly, Rosneft would rather operate the refineries just like anybody else, which is to say, selling gasoline in order to make money. Russian control of Citgo’s refineries would not threaten U.S. national security.
It is hard not to conclude that the Congressmen are engaging in a bit of bluster and Russia fear-mongering, not coincidentally at a time when U.S. Secretary of State Rex Tillerson is in Moscow and U.S.-Russian relations are deteriorating. So, there isn’t much to see here.
The country is in the midst of a multi-year economic meltdown, with no light at the end of the tunnel.
PDVSA has a $2.5 billion debt payment due this week, and at the time of this writing, it appears that the company will be able to meet that obligation. The state also has nearly $500 million in sovereign debt payments falling due. Cash is running out, but the Venezuelan government, for better or worse, has prioritized meeting bond payments at all costs.
The state has roughly $10 billion left in cash reserves before this week’s payment (although some of that is reportedly not in cash, but in gold), and billions more in coupon payments to meet later this year. A default this week doesn’t appear likely. But it is not a given that Venezuela makes it through 2017 without a default, a missed debt payment, or some sort of debt restructuring.
According to the credit-default swap market, investors are pegging the odds of a Venezuelan default within the next six months at 41 percent, a jump from just 34 percent in March.
And, as the two U.S. Congressmen worried about the situation wrote in their letter, the state’s and PDVSA’s assets are indeed on the line. The immediate spark to the latest political crisis was the government’s negotiations with Rosneft to offer them a stake in Venezuelan oil fields. Last month, when the Congress objected, the Supreme Court – which is controlled by the ruling party – tried to neuter the legislature. That resulted in the mass protests that are still unfolding. The Venezuelan government is desperate to sell off some oil assets in order to raise cash.
The situation in Venezuela is dire, and deserves U.S. – and global – attention. But Russian control of U.S. refineries is hardly the main story here.
Maduro Orders Army Into The Streets Ahead Of “Mother Of All Protests”
With the world’s attention focused on Syria and North Korea in recent weeks for obvious reason, another geopolitical hotspot is on the verge of eruption. According to AFP, after weeks of increasingly more violent protests, Venezuelan President Nicolas Maduro has ordered the army into the streets as the insolvent nation braces for what the opposition has vowed will be the “mother of all protests” on Wednesday.
Maduro, who recently backed down from a bid to usurp supreme power after a Supreme Court decision left the local Congress powerless, only to reverse itself following furious blowback even from his own party, has faced violent protests over recent moves to tighten his grip on power, and ordered the military to defend the leftist “Bolivarian revolution” launched by his late mentor Hugo Chavez in 1999.
“From the first reveille (on Monday morning), from the first rooster crow, the Bolivarian National Armed Forces will be in the streets… saying, ‘Long live the Bolivarian revolution,'” Maduro said Sunday night in a televised address. State TV showed images of army units marching in the streets of Caracas as Defense Minister Vladimir Padrino watched although there was no sign of soldiers on patrol Monday morning in the capital.
As noted previously, Venezuela has been rocked by two weeks of unrest since Maduro’s camp moved to consolidate its control with a Supreme Court decision quashing the power of the opposition-majority legislature. The court partly backtracked after an international outcry, but tensions only rose further when authorities slapped a political ban on opposition leader Henrique Capriles.
In the ensuing protests, at least five people have been killed and hundreds wounded as riot police clashed with demonstrators. All this took place as the country was scrambling to collect $2 billion to make a bond principal repayment for domestic energy giant PDVSA (which it did last week), even if it meant briefly running out of gasoline for domestic consumption.
Maduro’s recent attempt to concentrate power – which unlike those of Erdogan proved unsuccessful for now – led to a powerful backlash, with near daily protests around the country and capital; these are expected to climax on Wednesday when Maduro’s opponents have called for a massive protest, a national holiday that marks the start of Venezuela’s independence struggle in 1810.
Meanwhile, the president’s supporters have called a counter-demonstration the same day. As AFP puts it, April 19 is a touchy date in Venezuela “where Chavez and Maduro have built a politics of populist, left-wing nationalism around the struggle for independence from colonial Spain and its hero, Simon Bolivar.”
Maduro is fighting off the center-right opposition’s efforts to force him from power amid an economic crisis that has sparked severe food shortages, riots and looting.
Maduro denounced his opponents as “traitors” and called the new deployment a sign of the military’s “honor, unity and revolutionary committment.”
Despite pervasive public anger at the Maduro regime driven by an economic collapse that has resulted in the Bolivar losing all value in recent years, so far the key arbiter of Venezuela’s fate – the army – remains on his side.
Opposition leaders have urged the military, the only remaining pillar of Maduro’s power, to turn on the socialist president. So far, they have been unsuccessful, and if Wednesday’s preview is any indication, this won’t change any time soon: the defense minister vowed the army would show its “fighting spirit ahead of April 19,” but said the deployment was “a call to peace.” “We don’t want confrontation.” For the ordinary people, millions of whom have little if anything left to lose, a confrontation may be the only option.
end
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings MONDAY morning 7:00 am
Euro/USA 1.0636 UP .0027/REACTING TO + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA RAISING INTEREST RATES/EUROPE BOURSES CLOSED
USA/JAPAN YEN 108.35 DOWN 0.198(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA: HELICOPTER MONEY ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST
GBP/USA 1.2543 UP .0026 (Brexit March 29/ 2017/ARTICLE 50 SIGNED
USA/CAN 1.3295 DOWN .0023 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU)
Early THIS MONDAY morning in Europe, the Euro ROSE by 27 basis points, trading now BELOW the important 1.08 level RISING to 1.0636; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED DOWN 23.90 POINTS OR 0.74% / Hang Sang CLOSED HOLIDAY/AUSTRALIA CLOSED HOLIDAY / EUROPEAN BOURSES CLOSED
We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;
1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.
2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)
3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.
These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>
The NIKKEI: this MONDAY morning CLOSED UP 19.63 POINTS OR 0.11%
Trading from Europe and Asia:
1. Europe stocks ALL IN THE RED (THOSE THAT ARE TRADING)
2/ CHINESE BOURSES / : Hang Sang CLOSED / SHANGHAI CLOSED DOWN 23.90 POINTS OR 0.74%/Australia BOURSE CLOSED /Nikkei (Japan)CLOSED UP 19.63 OR 0.11% / INDIA’S SENSEX IN THE RED
Gold very early morning trading: $1288.80
silver:$18.55
Early MONDAY morning USA 10 year bond yield: 2.213% !!! 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 2.878, DOWN 1 IN BASIS POINTS from THURSDAY night.
USA dollar index early MONDAY morning: 100.28 DOWN 23 CENT(S) from THURSDAY’s close.
This ends early morning numbers MONDAY MORNING
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And now your closing MONDAY NUMBERS
Portuguese 10 year bond yield: 3.885% UP 1/5 in basis point(s) yield from THURSDAY
JAPANESE BOND YIELD: +.008% DOWN 2 in basis point yield from THURSDAY/JAPAN losing control of its yield curve
SPANISH 10 YR BOND YIELD: 1.707% PAR IN basis point yield from THURSDAY (this is totally nuts!!/
ITALIAN 10 YR BOND YIELD: 2.317 PAR POINTS in basis point yield from THURSDAY
the Italian 10 yr bond yield is trading 62 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.187% PAR IN BASIS POINTS ON THE DAY
END
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IMPORTANT CURRENCY CLOSES FOR MONDAY
Closing currency crosses for MONDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/12:00 PM
Euro/USA 1.0658 UP .0048 (Euro UP 48 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 108.47 DOWN: 0.067 (Yen UP 7 basis points/
Great Britain/USA 1.2588 UP 0.0071( POUND UP 71 basis points)
USA/Canada 1.3278 DOWN 0.0042(Canadian dollar UP 42 basis points AS OIL FELL TO $52.95
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This afternoon, the Euro was UP by 48 basis points to trade at 1.0658
The Yen ROSE to 108.47 for a GAIN of 7 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016
The POUND ROSE BY 71 basis points, trading at 1.2588/
The Canadian dollar ROSE by 71 basis points to 1.3278, WITH WTI OIL FALLING TO : $52.95
Your closing 10 yr USA bond yield PAR IN basis points from THURSDAY at 2.234% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.902 PAR in basis points on the day /
Your closing USA dollar index, 100.09 DOWN 42 CENT(S) ON THE DAY/1.00 PM
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for MONDAY: 1:00 PM EST
London: CLOSED
German Dax :CLOSED
Paris Cac CLOSED
Spain IBEX CLOSED
Italian MIB: CLOSED
The Dow closed UP 183.67 OR 0.90%
NASDAQ WAS closed UP 51.64 POINTS OR 0.89% 4.00 PM EST
WTI Oil price; 52,95 at 1:00 pm;
Brent Oil: 55.60 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 55.93 UP 26/100 ROUBLES/DOLLAR
TODAY THE GERMAN YIELD FALLS TO +0.187% FOR THE 10 YR BOND 4.PM EST EST
END
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:
WTI CRUDE OIL PRICE 5 PM:$53.09
BRENT: $55.65
USA 10 YR BOND YIELD: 2.25% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.908%
EURO/USA DOLLAR CROSS: 1.0643 UP .0033
USA/JAPANESE YEN:108.89 UP 0.334
USA DOLLAR INDEX: 100.30 DOWN 21 cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)
The British pound at 5 pm: Great Britain Pound/USA: 1.2564 : UP .0047 OR 47 BASIS POINTS.
Canadian dollar: 1.3318 DOWN .0001 (CAN DOLLAR UP 1 BASIS PTS)
German 10 yr bond yield at 5 pm: +.187%
END
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Traders Buy The F**king Thermonuclear War Threat Dip
Just seemed appropriate…
Soft data rolled over today (as Empired Fed and Homebuilder confidence dropped) but one glance at the following chart shows the “odd one out”…
After lackluster U.S. retail sales and inflation data on April 14, as well as heightened geopolitical concerns, the bond market is skeptical the Federal Reserve will raise interest rates another two times in 2017, as forecast by central bank officials in the so-called dot plot. Implied rates on the fed fund futures curve are fully pricing in a September rate increase, with about a 22 percent chance of another by year-end, according to BMO strategists Ian Lyngen and Aaron Kohli.
“Despite criticism of the Fed’s March rate hike, they certainly now look very prudent to have put at least one rate hike on the books this calendar year before the series of risks and economic headwinds picked up,” the pair wrote Monday.
And that says nothing about the sheer panic in European FX hedges…
Oh and then there’s the debt ceiling (which has now inverted the front of the Bill curve)…
But nothing can stop a total VIX slam and sure enough, as VIX’s term structure collapses worryingly, stocks were lifted majestically… helped also by a USDJPY run stop to 109.00…
Stocks fooled by VIX segmentation…
From Thursday’s close, Stocks were suddenly bid as bonds, gold, and crude tumbled…
But Gold remains the safe haven…
On the day all the major indices were higher…Trannies and Small Caps melted up in a masive short-squeeze
Erasing Thursday losses…
Big short squeze at the open and then on Mnuchin saying tax reform won’t happen soon!!
So to summarize:
- US Hard data greatly disappoints
- US Soft data rolls over
- French election odds narrow further – anyone’s game and hedges at EU crisis highs
- Debt Ceiling looms (and curve inverted)
- North Korea threatens weekly missile tests guaranteeing provocation
- US sends 2 more aicrcraft carriers to Korean Peninsula
- Oil prices tumble
- Mnuchin says a strong dollar is a bad thing (but machines misinterpret)
And Stocks have their best day in 6 weeks!
That spike was the spech to congress jump that ended the bank rally.
The machines did their best to rally The Dow above its 50DMA proving that US stocks are the real safe haven of the world, right?
SNAP seriously!!
Dollar started to rise when Mnuchin FT piece hit “Strong Dollar Over Short-Period Of Time Is Hurting US Economy” which the machines misintepreted…
The Turkish Lira surged 2% overnight after Erdogan’s “successful” referendum, but then started to tumble as OECD and US questioned voiting irregularities…
Treasury yields rose on the day… on relief that thermonuclear war did not break out? Notice bonds did begin to really into the last few minutes of the day.
Stocks and bonds glued tick for tick…
Small bounce back higher in the Trumpflation trades wtih 2s30s and EDZ7EDZ8 steeper (but very marginal)
Crude tumbled back to a $52 handle, RBOB slid lower and gold sold off as the USD lifted in the afternoon…
end
Trading on Friday:
big event: uSA/Yen tumbles into the 108 column on dismal uSA data!
(courtesy zero hedge)
USDJPY Tumbles To 5-Month Lows After Dismal US Data
More indications that the US economy is not doing anything like as well as the soft survey data would suggest has sparked a fresh round of selling in USDJPY…
Sending Yen to its strongest since just after the Trump election.
This is the biggest weekly drop for USDJPY since July 2016
end
Retail sales decline for the 2nd straight month /real earnings stagnate:
(courtesy zero hedge)
Retail Sales Decline For Second Straight Month As Real Earnings Stagnate
For the second month in a row, retail sales declined in March as ‘hard’ data fails to live up to ‘soft’ data’s hype. This is the biggest 2-month tumble in retail sales in over 2 years.
The full breakdown shows the biggest declines in building materials and motor vehicles.
This drop in sales should not be total surprise as real average weekly earnings has now failed to rise for 3 straight months.
Two more ‘hard’ data series to add to the list that dismiss the hope embedded in all the soft survey data… but we are sure stocks know better.
end
The above release on retail sales causes the Atlanta Fed to slash Q1 GDP from 0.6% down to .5%
(courtesy zerohedge)
Atlanta Fed Slashes Q1 GDP Forecast To Just 0.5%, Lowest In Three Years
Just over two months ago, the Atlanta Fed “calculated” that Q1 GDP was going to be a pleasant 3.4%, confirming that the Fed had made the correct decision by hiking not only in December, but also last month. Since then, the Fed’s own GDP estimate has crashed in almost linear fashion, and as of this morning – after the latest disappointing retail sales report – it had plunged to just 0.5%, which if accurate would make Q1 the weakest quarter going back three years to Q1 2014.
From the regional Fed:
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 0.5 percent on April 14, down from 0.6 percent on April 7. The forecast for first-quarter real consumer spending growth fell from 0.6 percent to 0.3 percent after this morning’s retail sales report from the U.S. Census Bureau and the Consumer Price Index release from the U.S. Bureau of Labor Statistics.
Putting the Atlanta Fed’s forecast in context, a 0.5% GDP would mark the weakest quarter in 37 years, or going back to 1980, in which the Fed hiked rates. Then again, considering today’s abysmal CPI and retail sales data, the narrative to focus on next is not so much hiking, or balance sheet normalization, but when the Fed will resume easing, cut rates (as per Donald Trump’s recent suggestion) and/or launch QE4.
end
Janet is not going to like this: Core CPI tumbles for the first time in 7 years and the entire CPI index including food and energy fell 0.3%. The reflation trade is now officially dead!
(courtesy zero hedge)
“Reflation” Is Officially Dead: Core CPI Tumbles For The First Time In Over Seven Years
The reflation trade is officially over.
At the same time that retail sales posted the worst 2 month drop in 2 years, CPI – the bedrock behind the Fed’s rate hiking intentions – just hit a brick wall, and after months of headline CPI growth mostly the back of the energy “base effect”, in March this ended with a thud, when headline CPI printed at -0.3%, badly missing expectations of an unchanged print. The number was so bad, all 79 economist estimates missed the number (predicting a -0.2% low).
The biggest driver for the headline plunge was energy, which declined 3.2%, with the gasoline index falling 6.2%, and other major energy component indexes decreasing as well. The food index rose 0.3 percent, with the index for food at home increasing 0.5% its largest increase since May 2014.
But the real story was in the core number, because CPI ex-food and energy dropped -0.1%, another huge miss to the +0.2% rise expected, and also the first – and worst – decline since January 2010.
Among the core components, the shelter index rose 0.1 percent, and the indexes for motor vehicle insurance, medical care, tobacco, airline fares, and alcoholic beverages also increased in March. These increases were offset by declines in several indexes, including those for wireless telephone services, used cars and trucks, new vehicles, and apparel.
More details from the report that will likely assure that Yellen will not be hiking rates for a long time:
The index for all items less food and energy declined 0.1 percent in March. The index for communication fell 3.5 percent as the index for wireless telephone services decreased 7.0 percent, the largest 1-month decline in the history of the index. The index for used cars and trucks continued to fall, declining 0.9 percent in March, and the new vehicles index decreased 0.3 percent. The apparel index declined 0.7 percent in March after rising 0.6 percent in February.
The shelter index rose 0.1 percent in March, its smallest increase since June 2014. The rent index rose 0.3 percent and the index for owners’ equivalent rent advanced 0.2 percent, but the index for lodging away from home fell 2.4 percent. The medical care index increased 0.1 percent in March, as the index for hospital services rose 0.4 percent, the index for prescription drugs was unchanged, and the physicians’ services index declined 0.3 percent.
The index for motor vehicle insurance continued to rise, increasing 1.2 percent in March. The index for tobacco rose 0.5 percent, the airline fares index increased 0.4 percent, and the index for alcoholic beverages rose 0.2 percent. The indexes for recreation, for education, and for household furnishings and operations were unchanged in March.
Even Shelter inflation is now rolling over:
Incidentally, just moments after Trump’s flip-flop on the USD and on rates, now looking for lower rates instead of higher under advice of his ex-Goldman counsel, it became clear that the US economic data would have to decline sharply in the coming months to grant his wish, and to stop the Fed from hiking further, which is why we said the following:
So this is where the economic data tumbles going forward
And sure enough…
Now we look forward for Wall Street to “U-turn” alongside Trump, and explain how it was only kidding about rising rates being good for risk assets, and what it really meant was that only QE4 can fix the economy, as usual.
end
Even soft data is now plunging: please note the New York (Empire Fed Mfg Index) plunges the most in a year.
No doubt that the uSA is in serious recession;
(courtesy zero hedge)
Soft Data Slump Begins – Empire Fed Plunges Most In A Year
And so it begins. After exploding higher post-election, it appears the ‘soft’ survey data hype has begun to fade. Empire Fed’s manufacturing survey tumbled most since May 2016 in April, almost erasing the entire post-election surge. New Orders (current and expected) slumped and average workweek caved as Trump’s ‘plans’ remain stymied.
And just like that… hope died.
This won’t end well…
It seems the bond market may have been right after all.
end
Business must be good! Boeing laying off hundreds of engineers!
(courtesy zero hedge)
Boeing To Lay Off “Hundreds” Of Engineers
President Trump will not be amused. In a letter to employees, Boeing VP John Hamilton announces that the company will lay off “hundreds” of engineers as soon as this week, affecting Washington and “other enterprise locations.”
As Bloomberg headlines show:
- *BOEING TO SEND NOTICES FOR INVOLUNTARY LAYOFFS APRIL 21
- *BOEING ENGINEERING LAYOFFS PLANNED FOR JUNE 23, 2017
The timing is interesting as the Ex-Im Bank discussions hot up and comes just 2 months after Trump visited Boeing’s South Carolina plant.
Standing in front of a new Boeing 787-10 Dreamliner passenger aircraft made at in North Charleston, Trump repeated his campaign promises to promote American production that partly fueled his dizzying path to the White House. He warned of a “substantial penalty” for companies that move jobs out of the United States.
“We want products made by our workers in our factories stamped with those four magnificent words — made in the USA,” Trump said.
The share price is entirely unimpressed…
end
Great reason for the boys to commence a raid on gold and silver in the access market: Mnuchin agrees with Trump that the dollar is too strong!
(courtesy zero hedge)
Mnuchin Agrees With Trump: “Strong Dollar Over Short-Period Of Time Is Hurting US Economy”
In an interview with the FT, Treasury Secretary Steven Mnuchin discussed Trump’s “tremendous” tax reform, and confirmed what many already knew: that the push to revise the US tax code has been dramatically slowed by the failure to repeal and replace Obamacare, and conceded that the administration’s timetable for ambitious tax reforms will be delayed. Mnuchin also said the target to get tax reforms through Congress and on President Donald Trump’s desk before August was “highly aggressive to not realistic at this point”.
However while his tax-related comments were predictable, it is what he said about the strength of the dollar that was most notable. Recall that during his confirmation hearing, Mnuchin stated that a strong-dollar is preferable “in the long-run.” The question then became how he would reconcile his strong dollar stance with Trump’s recent flip-flop, in which the president urged for not only lower interest rates but a weaker dollar. This is what he told the FT about what relative value of the USD he prefers:
He stressed that the US did not intervene in currency markets, saying: “The president was making a factual comment about the strength of the dollar in the short term . . . There’s a big difference between talk and action.”
Mnuchin rebuffed suggestions that Washington may be seeking to depreciate the currency via verbal interventions following remarks from Mr Trump last week. “As the world’s currency, the primary reserve currency, I think that over long periods of time the strength of the dollar is a good thing,” said Mr Mnuchin. “It’s a function of the confidence and the strength of the US economy.”
And while this may appear a validation of Mnuchin’s previously stated strong dollar policy, what the Treasury Secretary said just moments after is that in the “near-term” the USD will have to depreciate… as in before it reaches the “longer-term.”
He agreed with the president’s repeated comments in recent months that the dollar’s strength in the short term was hurting US exports and the economy. “The president’s comment — which again I agree with — is that over short periods of time the strength of the dollar creates certain issues that hurt our exports. I think that is what he has referred to, which is again factually correct.”
As a reminder, the “short period” Mnuchin refers to comes first, and before the “long period” discussed above.
Alas, the FX algos, programmed by 20-year-old math PhD’s with zero attention span, only read the first part and ignored the nuance in the interview, which is why the USD has so far spiked higher on the Mnuchin comments.
It remains to be seen if any carbon-based traders will take advantage of this false kneejerk reaction.
end
David Stockman comments that on April 28, the government will shut down and that will be a precursor of events once money for the debt ceiling has run out.
a must read..
(courtesy David Stockman/Daily Reckoning)
The Trump Reflation Fantasy Ends on Day 100
In honor of the Donald’s “Mother of All Bomb” (MOAB) attack on the Hindu Kush mountains Thursday, let me introduce MOAD.
I’m referring to the “Mother of All Debt” crises, of course. The opening round is coming when Washington goes into shutdown mode on April 28, which happens to be Day 100 of the Donald’s reign.
In theory, this should be just a routine extension of the fiscal year (FY) 2017 continuing resolution (CR) by which Congress is funding the $1.1 trillion compartment of government which is appropriated annually.
The remaining $3 trillion per year of entitlements and debt service is on automatic pilot, but the truth is Washington can’t agree on what to do about either component — except to keeping on borrowing to pay the bills.
There is a problem with this long-running game of fiscal kick-the-can, however. Namely, a 100 year-old statute requires Congress to raise the ceiling for treasury borrowing periodically, but the Imperial City has now reached the point in which there is absolutely no way forward to accomplish this.
Moreover, that critical fact is ill-understood by Wall Street because it does not remotely recognize that all the debt ceiling increases since the public debt exploded after the 2008-09 crisis were an accident of the Obama presidency.
That is, surrounded by Keynesian economic advisers and big spending Democratic politicians, he had no fear of the national debt at all and obviously even believed the more debt the better.
And Obama was also able to bamboozle the establishment GOP leadership led by former Speaker Boehner into steering enough GOP votes to the “responsible” course of action.
Needless to say, Obama is gone, Boehner is gone and the 17-month debt ceiling “holiday” that they confected in October 2015 to ride Washington through the election is gone, too. What’s arrived is vicious partisan warfare, a new President who is clueless about the urgency of the debt crisis and a bloc of 50 or so Freedom Caucus Republicans who now rule Washington.
And good for them!
They genuinely fear and loathe the banana republic financial profligacy that prevails in the Imperial City, and would rip the flesh from Speaker Ryan’s face were he to go the Boehner route and try to assemble a “bipartisan” consensus for a condition-free increase in the debt ceiling.
What that means is a completely new ball game in the Imperial City that will absolutely dominate the agenda as far as the eye can see. That’s because the Freedom Caucus will insist that sweeping entitlement reforms and spending cuts accompany any debt ceiling increase.
Even “moderate” Senator Rob Portman (Ohio) has legislation requiring that dollar for dollar deficit cuts accompany any increase in the debt ceiling.
But if you think the GOP fractures and fissures generated by Obamacare replace and repeal were difficult, you haven’t seen nothin’ yet. There is absolutely no basis for GOP consensus on meaningful deficit cuts, meaning that MOAD will bring endless starts, stops, showdowns and shutdowns, as the U.S. Treasury recurringly exhausts its cash and short-term extensions of its borrowing authority.
In the meanwhile, everything else — health care reform, tax cuts, infrastructure — will become backed-up in an endless queue of legislative impossibilities. Accordingly, there will be no big tax cut in 2017 or even next year. For all practical purposes Uncle Sam is broke and his elected managers are paralyzed.
The Treasury will be out of cash and up against a hard stop debt limit of $19.8 trillion in a matter of months. But long before that there will be a taste of the Shutdown Syndrome on April 28 owing to the accumulating number of “poison pill” “riders” to the CR.
These include the virtual certainty of riders to the House bill to “defund” Planned Parenthood and sanctuary cities. Other extraneous amendments will also possibly include funds demanded by the White House to start the Mexican Wall, enhance deportations and fund some of Trump’s $54 billion defense increase.
By contrast, the Senate Democrats will move heaven and earth to attach mandatory funding for upwards of $7 billion to fund Obamacare, screaming that without these funds massive new premium increases will be needed and/or more insurance companies will withdraw from the Obamacare exchanges next fall.
Unfortunately, such rank demagoguery will almost surely gather considerable support from squishy middle-of-the-road Republicans like Susan Collins and Lisa Murkowski.
To be sure, none of these riders have much to do with the mutli-trillion deficit and debt ceiling crises ahead, but they are just as toxic politically.
So when they close down for several days the Washington monument owing to an inability to reach agreement on a trivial $70 million annual funding item for family planning services — the equivalent of nine minutes of annual Federal spending or something that Bill Gates could fund out of his cash drawer — it will not only come as a shock to Wall Street.
It will also embody a warning that there is no consensus on anything or any real semblance of functioning government in Washington, and that as these battles accumulate the degree of dysfunction will only intensify.
Meanwhile, there is another shock heading toward the canyons of Wall Street. Namely, that this so-called recovery is finally running out of gas. I have no use for the seasonally maladjusted and endlessly manipulated, massaged and revised data that come out of the Washington statistical mills.
By contrast, the data that comes out of Uncle Sam’s revenue farebox is an altogether different kettle of fish. That is, no employer in America is paying withholding taxes on payroll slots that do not exist or sending in estimated taxes on profits that are not happening.
Yet after six months of FY 2017 has elapsed, two things are quite evident. First, Federal receipts in March were down on a year over year basis (12 month moving average) for the fourth straight month. The so-called recovery has deflated completely and receipts are now heading lower in the manner that has accompanied prior recessions.
Secondly, the deficit is once again rising rapidly. During the first six months of this fiscal year it totaled $527 billion compared to $459 billion last year, thereby representing a 15% year-over-year gain. And that is something new on the scene, as well.
The kick-the-can fiscal game of the last eight years was enabled originally by Washington’s false fears of Great Depression 2.0 generated during and after the financial crisis by Ben Bernanke and former Treasury Secretary Hank Paulson.
And after the crisis passed, by the glib belief that the Federal deficit was steadily falling and would cure itself with the passage of enough time.
That delusion is now off the table — at least among the Freedom Caucus Republicans who rule the roost. So again, the consequence will be a hardening of the lines of battle around MOAD in a manner that has never before been seen in the Imperial City.
As I told Fox Business the other day, it is a stark warning to get out of the casino before it’s too late.
Even if you are not troubled by the outbreak of hostilities at hotspots all around the planet or not inclined to fret about the shocking fact that the Fed is actually contemplating shrinking its balance sheet for the first time in essentially three decades, there is still this:
The U.S. economy is sliding toward recession and the chances that the “stimulus” baton will be handed off to ballyhooed Trump Reflation are lower than those of the proverbial snowball in the hot place.
On April 28, reality is likely to come breaking in and finally shatter all remaining delusion.
Regards,
end
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