April 26/TRUMP GIVES HIS TAX REFORM OUTLINE AND IMMEDIATELY GOLD RISES ALONG WITH BONDS/USA INTENDS TO WITHDRAW FROM NAFTA/CANADA’S HOME MORTGAGE LENDING COLLAPSES WITH CLOSE TO A DEFAULT FROM HOME CAPITAL/GOVERNMENT SHUT DOWN STILL LOOMS ON FRIDAY: MAY HAVE A ONE WEEK BILL TO STOP THE SHUTDOWN ON FRIDAY/

Gold: $1262.10  DOWN 3.50

Silver: $17.35  DOWN 23  cents

Closing access prices:

Gold $1269.50

silver: $17.50!!!

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: $1274.97 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1264.30

PREMIUM FIRST FIX:  $10.67

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SECOND SHANGHAI GOLD FIX: $1278.00

NY GOLD PRICE AT THE EXACT SAME TIME: 1263.80

Premium of Shanghai 2nd fix/NY:$15.20

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LONDON FIRST GOLD FIX:  5:30 am est  $1264.95

NY PRICING AT THE EXACT SAME TIME: $1266.00 ???

LONDON SECOND GOLD FIX  10 AM: $1261.85

NY PRICING AT THE EXACT SAME TIME. 1263.80 ????

For comex gold:

APRIL/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  43 NOTICE(S) FOR 4300 OZ. 

 TOTAL NOTICES SO FAR: 809 FOR 80900 OZ    (2.5163 TONNES)

For silver:

For silver: APRIL

0 NOTICES FILED TODAY FOR nil  OZ/

Total number of notices filed so far this month: 906 for 4,530,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

 

The silver open interest fell by 13,000 contracts but that was with a tiny 27 cent loss. I am confident that there is no loss in OI technically as these are held in the EFP’s. Once the new month of May commences, these contracts will be released to the longs so they do the same thing all over again..rinse and repeat..

Gold and silver got a much needed bump in prices with the Trump announcement of tax reform.  The world knew that it would be hopeless to get anything passed in the USA.

As far as options expiry:

As I stated yesterday

“Our precious metals will be under much pressure from today until Friday April 28 as we enter options expiry week.”

From the beginning of time, the crooked banks continue to raid on options expiry week and this week so no different

Comex options expiry:  LBMA/OTC options Friday morning at around 11 am

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest FELL BY A CONSIDERABLE 13,084  contracts DOWN to 214,785 WITH THE SMALL LOSS IN PRICE ( 27 CENTS) WITH RESPECT TO YESTERDAY’S TRADING.  FOR THE PAST FEW YEARS WE HAVE NOTICED THAT THE OPEN INTEREST IN AN ACTIVE MONTH COLLAPSES AS WE APPROACH FIRST DAY NOTICE.  WE NOW KNOW THAT THE MAJORITY OF THE LIQUIDATION RECEIVE AN EFP CONTRACT IN A FUTURE MONTH PLUS FIAT BONUS.  WE HAVE BEEN WITNESSING THIS SAME PATTERN NOW FOR AT LEAST THE LAST COUPLE OF YEARS.  i THINK WE HAD NEGLIGIBLE SHORT COVERING BY THE BANKS. In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.074 BILLION TO BE EXACT or 153% 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 FELL BY 5,410 contracts WITH THE FALL IN THE PRICE OF GOLD ($10.20 with YESTERDAY’S TRADING). The total gold OI stands at 475,985 contracts.

we had 43 notice(s) filed upon for 4300 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: 854.25 tonnes

.

SLV

We had  a huge change in silver inventory at the SLV today/a deposit of 2.934 million oz into inventory

THE SLV Inventory rests at: 330.283 million oz

end

.

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

1. Today, we had the open interest in silver FELL BY A HUGE 13,084 contracts DOWN TO  214,785,( AND FURTHER FROM  THE NEW COMEX RECORD SET ON FRIDAY AT 234,787) DESPITE THE RATHER SMALL  FALL IN PRICE FOR SILVER YESTERDAY (27 CENTS). We may have witnessed short covering by the bankers or we may again have witnessed the power of that obscure EFP contract.  For the past few years, strangely we have seen the open interest collapse as we enter first day notice. The EFP allows the longs to liquidate his delivery contract month for a fiat bonus and the receipt of a future contract month once first day notice has occurred. That may have happened again today.

(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

3. ASIAN AFFAIRS

i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed UP 6.28 POINTS OR 0.20%/ /Hang Sang CLOSED UP 122.49 POINTS OR 0.50%.  The Nikkei closed UP 210.10 OR 1.10% /Australia’s all ordinaires  CLOSED UP .61%/Chinese yuan (ONSHORE) closed DOWN at 6.8913/Oil DOWN to 49.28 dollars per barrel for WTI and 51.70 for Brent. Stocks in Europe  IN THE RED   ..Offshore yuan trades  6.8977 yuan to the dollar vs 6.8913 for onshore yuan. NOW  THE OFFSHORE IS MUCH WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN SLIGHTLY WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN ALSO MUCH WEAKER AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT HAPPY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

Following President Trump’s North Korea briefing, Secretary of State Rex Tillerson, Secretary of Defense James Mattis, and Director of National Intelligence Dan Coats have issued a joint statement making it very clear where America goes next…

Past efforts have failed to halt North Korea’s unlawful weapons programs and nuclear and ballistic missile tests. With each provocation, North Korea jeopardizes stability in Northeast Asia and poses a growing threat to our allies and the U.S. homeland.

 

North Korea’s pursuit of nuclear weapons is an urgent national security threat and top foreign policy priority. Upon assuming office, President Trump ordered a thorough review of U.S. policy pertaining to the Democratic People’s Republic of Korea (DPRK).

 

Today, along with Chainnan of the Joint Chiefs of Staff Gen. Joe Dunford, we briefed members of Congress on the review. The president’s approach aims to pressure North Korea into dismantling its nuclear, ballistic missile, and proliferation programs by tightening economic anctions and pursuing diplomatic measures with our allies and regional partners.

 

We are engaging responsible members of the international community to increase pressure on he DPRK in order to convince the regime to de-escalate and return to the path of dialogue. We will maintain our close coordination and cooperation with our allies, especially the Republic of Korea and Japan, as we work together to preserve stability and prosperity in the region.

 

The United States seeks stability and the peaceful denuclearization of the Korean peninsula. We remain open to negotiations towards that goal. However, we remain prepared to defend ourselves and our allies.

Certainly does not leave too much room for any more ‘sabre-rattling’ from Korea. Having sent a carrier group (or 2 or 3), ported a nuclear Sub, test-fired its nuclear missiles, America appears to have shown its ‘stick’…

END

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

none today

4. EUROPEAN AFFAIRS

GREECE

Greece is going to be in a terrible state as widow’s pensions will be cut by 50%.  This will push thousands more into poverty

( zero hedge/Keep talking Greece)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

Russia has withdrawn half of its fighter jet group from Syria as the number of terrorist units has decreased considerably

(courtesy zero hedge)

6 .GLOBAL ISSUES

i)This is huge!!  The USA intends to withdraw from NAFTA.  That is going to hurt both Canada and Mexico

( zerohedge)

ii) A double whammy for Canada as its largest mortgage lender, Home Capital Group’s stock cratered today.  it disclosed it struck an emergency credit arrangement of 2 billion dollars to counter evaporating deposits…it may be insolvent..

( zero hedge)

 

iib)Bloomberg comments that there may be fraud involved as deposits plunge at Home Capital, Canada’s largest mortgage lender

(Bloomberg)

iii)At least they are honest:  Canada’s housing regulator warns of “strong evidence” of housing market problems!

( zero hedge)

7. OIL ISSUES

Huge drawdown but that was offset by a major rise in production levels”

( zero hedge)

8. EMERGING MARKETS

This ought to scare you:  Venezuela plans to give firearms to loyalists in order to purge resistance

(Daniel Lang/SFTFPlan)

9.   PHYSICAL MARKETS

i)Craig Hemke describes the fraud at the silver comex and how these crooks with only 220 million oz of physical silver available for investment demand is bombarded with over 1.1 billion oz of paper silver obligations

a must read..

( Craig Hemke)

ii)One of China’s main route for gold into Shanghai comes from Hon Kong which doubled its imports to 111 tonnes.  The other routes Shanghai uses is Switzerland and London.  It is now evident that China is increasing gold purchases to a high degree.

( Reuters)

10. USA stories

i)JPMorgan states what we have been telling you:  Trump’s tax plan will be impossible to pass through congress:

( zero hedge)

 

i b ) Trump’s tax plan:

( zero hedge)

i c)And our resident expert on USA taxation and budgets..David Stockman weighs in on the tax proposal of Trump.

this is a must read….

( David Stockman/Daily Reckoning)

ii)We may have a government shutdown on Friday after all as the Democrats raised new positions. Trump will never include government subsidies for Obamacare.  He is non committal n the funding for medicare for Puerto Ricans:

‘( zero hedge)

 

iib) It appears that they are going nowhere. They may agree to a one week funding bill.  With Trump no longer asking for the Wall funding now, the Democrats seems to be asking for blood

( zero hedge)

iii)S and P releases the chaos in the Bricks and mortar problems in the uSA..they list 10 publicly traded retailers that will file for bankruptcy net:

( Sand P /zerohedge)

iv)Wall Street extremely nervous with the results of US Steel and one analyst considers it a “nightmare on Elm Street”

Will Trump attack China’s steel industry?

(courtesy zero hedge)

v) The Freedom Caucus now confirms supports for the revised Obamacare.  Now that the fringe ultra conservatives have been satisfied, we guess that the centrists on this health care will abandon it

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 5410 CONTRACTS UP to an OI level of 475,985 WITH THE  FALL IN THE PRICE OF GOLD ( $10.20 with YESTERDAY’S trading).   The longs still continue to remain stoic as they refused to liquidate any of their contracts despite the constant torment.  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 411 contract(s) FALLING TO 142. We had 38 notices served yesterday so we LOST 373 contracts or AN ADDITIONAL 37,300 oz that will  NOT stand for delivery in the active delivery month of April AND THESE CONTRACTS WERE CASH SETTLED THROUGH THE OBSCURE EFT ROUTE DESCRIBED BY JAMES TURK AND KOOS JANSEN. 

(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/2017 contract month LOST 516 contract(s) and thus its OI is 1157 contracts. The next big active month is June/2017 and here the OI LOST by 6832 contracts UP to 347,468.

We had 43 notice(s) filed upon today for 4300 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
And now for the wild silver comex results.  Total silver OI FELL BY A HUGE 13,084 contracts FROM 227,866 DOWN TO 214,785  WITH YESTERDAY’S  27 CENT PRICE LOSS.  I AM SURE  WE HAVE WITNESSED ANOTHER OF THOSE EFP EVENTS ESPECIALLY WHEN YOU SEE THAT GOLD’S OI ROSE.   ONCE WE APPROACH FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH, JAMES TURK AND KOOS JANSEN NOTICED AN OBSCURE VEHICLE BEING USED (IN HIGH QUANTITY) BY THE SHORT BANKERS, WHEREBY A LONG CONTRACT HOLDER RECEIVES A FIAT BONUS AND A FUTURES CONTRACT IN RETURN FOR NOT TAKING DELIVERY.  USUALLY THE TOTAL OPEN INTEREST RETURNS TO ITS PREVIOUS LEVEL ONCE THE NEW ACTIVE DELIVERY MONTH COMMENCES AS THE LONG HOLDER WOULD RECEIVE THROUGH A PRIVATE DEAL SAY A JUNE OR JULY SILVER CONTRACT.
The line in the sand is $18.50 for silver and again it has been defended by the criminal bankers.  Once this level is pierced, the monstrous billion oz of silver shorts will blow up. The bankers are defending the Alamo with their last stand at the $18.50 mark. THE NEW RECORD HIGH IN OPEN INTEREST WAS SET FRIDAY APRIL 21/2017 AT:  235.787.
 We are in the NON active delivery month is APRIL  Here the open interest GAINED 25 contracts RISING TO 36 contracts. We had 0 notices filed yesterday so we  gained 25 silver CONTRACTS OR AN ADDITIONAL 125,000 ounces will stand in this non active delivery month of April.  We lost 0 contracts through this route of ERP.

The next active contract month is May and here the open interest LOST 24,452 contracts DOWN to 32,355 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. We have only 2 trading days before first day notice. The non active June contract GAINED 78 contracts to stand at 482. The next big active month will be July and here the OI GAINED 9702 contracts UP to 145,285.

FOR COMPARISON SAKE, ON   APRIL 27/2016 WE HAD 27,030 CONTRACTS STANDING FOR DELIVERY. (and the exact same number of days left before first day notice). 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 267,198 contracts which is very good.

Yesterday’s confirmed volume was 321,348 contracts  which is VERY good.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for APRIL
 April 26/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 128.60 oz
4 kilobars
Manfra
Deposits to the Dealer Inventory in oz nil oz

 

Deposits to the Customer Inventory, in oz 
 nil
No of oz served (contracts) today
 
43 notice(s)
4300 OZ
No of oz to be served (notices)
99 contracts
9900 oz
Total monthly oz gold served (contracts) so far this month
809 notices
80900 oz
2.5316 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   453,316.8 oz
Today we HAD  1 kilobar transaction(s)/
Today we had 0 deposit(s) into the dealer:
total dealer deposits: nil oz
We had NIL dealer withdrawals:
total dealer withdrawals:  NIL oz
we had 0  customer deposit(s):
total customer deposits; nil  oz
We had 1 customer withdrawal(s)
 i Out of Manfrea:  128.60 oz
4 kilobars
total customer withdrawal: 128.60 oz
 we had 0 adjustments:
For APRIL:

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 43 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 19 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

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To calculate the initial total number of gold ounces standing for the APRIL. contract month, we take the total number of notices filed so far for the month (809) x 100 oz or 80,900 oz, to which we add the difference between the open interest for the front month of APRIL (142 contracts) minus the number of notices served upon today (43) x 100 oz per contract equals 90,800 oz, the number of ounces standing in this  active month of APRIL.
 
Thus the INITIAL standings for gold for the APRIL contract month:
No of notices served so far (809) x 100 oz  or ounces + {(142)OI for the front month  minus the number of  notices served upon today (43) x 100 oz which equals 90,800 oz standing in this non active delivery month of APRIL  (2.8244 tonnes)
we LOST A WHOPPING 373 contracts or an additional 37,300 oz will  stand and THESE CONTRACTS WERE  cash settled via the PRIVATE EFP route.   The comex is now one complete massive fraud with no physical component as they settle through the private paper EFP.
 
 
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 We had 21.206 tonnes of gold initially stand for delivery in April 2016.  By the month’s conclusion we had only 12.39 tonnes stand.
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I have now gone over all of the final deliveries for this year and it is startling.
First of all:  in 2015 for the 13 months: 51 tonnes delivered upon for an average of 4.25 tonnes per month.
Here are the final deliveries for all of 2016 and the first 4 months of  2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes complete.
Nov.    8.3950 tonnes.
DEC/2016.   29.931 tonnes
JAN/2017     3.9004 tonnes
FEB/ 18.734 tonnes
March: 0.5816 tonnes
April/2017: 2.824
total for the 16 months;  247.62 tonnes
average 15.5476 tonnes per month
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Total dealer inventory 994,397.311 or 30.94 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,954,376.878 or 278.53 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 278.53 tonnes for a  loss of 24  tonnes over that period.  Since August 8/2016 we have lost 75 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 10 MONTHS  75 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
APRIL INITIAL standings
 April 26. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 237,914.776 oz
 Delaware
594,967,011 oz
Scotia
total: 832,881.737 oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
1,174,689.071 oz
JPMorgan
599,836.500 oz
CNT
2021.300 oz
Delaware
total:  1,776,556.871 oz
No of oz served today (contracts)
 0 CONTRACT(S)
(NIL OZ)
No of oz to be served (notices)
36 contracts
(180,000  oz)
Total monthly oz silver served (contracts) 906 contracts (4,530,000 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  15,305,713.6 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 2 customer withdrawal(s):
i) Out of Delaware:  237,914.726 oz
ii) Out of Scotia:  594,967.011 oz
TOTAL CUSTOMER WITHDRAWALS: 832,881.737  oz
 We had 3 Customer deposits:
i) Into JPMorgan: 1.174,689.071 oz
ii) Into CNT: 599,836.500 oz
iii) into Delaware: 2031.300 oz
***deposits into JPMorgan have now resumed.
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits; 1,776,556.871 oz
 
 we had 0 adjustment(s)
The total number of notices filed today for the APRIL. contract month is represented by 0 contract(s) for nil oz. To calculate the number of silver ounces that will stand for delivery in APRIL., we take the total number of notices filed for the month so far at 906 x 5,000 oz  = 4,530,000 oz to which we add the difference between the open interest for the front month of APRIL (36) and the number of notices served upon today (0) x 5000 oz equals the number of ounces standing 
 
Thus the initial standings for silver for the APRIL contract month:  906(notices served so far)x 5000 oz  + OI for front month of APRIL.(36 ) -number of notices served upon today (0)x 5000 oz  equals  4,710,000 oz  of silver standing for the APRIL contract month. 
We gained 125,000 additional silver oz (25 contracts) that will stand  in this non active delivery month of April and NO CONTRACTS WERE CASH SETTLED THROUGH THE EFP ROUTE. However it is more than likely that a major number of contracts in May were settled through the ERP described above. 
 

FOR COMPARISON

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

Volumes: for silver comex
 
Today the estimated volume was 175,059 which is very HUmongous 
Yesterday’s  confirmed volume was 148,146 contracts which is humongous
(TODAY’S EST. VOLUME OF 175,059 CONTRACTS EQUATES TO 875 MILLION OZ OF SILVER OR 125% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA)
 
Total dealer silver:  29.207 million (close to record low inventory  
Total number of dealer and customer silver:   197.830 million oz
The total open interest on silver is  now at record levels of 227,498 contracts with the price of $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
 
end

NPV for Sprott and Central Fund of Canada

will update later tonight the central fund of Canada figures

1. Central Fund of Canada: traded at Negative 7.1 percent to NAV usa funds and Negative 6.9% to NAV for Cdn funds!!!! 
Percentage of fund in gold 61.3%
Percentage of fund in silver:38.6%
cash .+0.1%( April 26/2017) 
 
2. Sprott silver fund (PSLV): Premium FALLS TO   -.59%!!!! NAV (April 26/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to -0.36% to NAV  ( April 26/2017)
Note: Sprott silver trust back  into NEGATIVE territory at -.59% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.36%/Central fund of Canada’s is still in jail  but being rescued by Sprott.

Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

Sprott makes hostile $3.1 billion bid for Central Fund of Canada

 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

I will update gold inventory and silver inventory (GLD and SLV) at 11 pm tonight.

And now the Gold inventory at the GLD

APRIL 26/we had no changes at the GLD/Inventory rests at 854.25 tonnes

April 25/2017/A WITHDRAWAL OF 5.92 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 854.25 TONNES

April 24/a deposit of 1.48 tonnes of gold into the GLD/inventory rests at 860.17 tonnes

April 21/A DEPOSIT OF 4.44 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 858.69 TONNES

APRIL 20/A WITHDRAWAL OF 6.51 TONNES FROM THE GLD/INVENTORY RESTS AT 854.25 TONNES

April 19/ A DEPOSIT OF 11.84 TONNES INTO THE GLD/INVENTORY RESTS AT 860.76 TONNES

April 18/no changes at the GLD/Inventory remains at 848.92 tonnes

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
April 26 /2017/ Inventory rests tonight at 854.25 tonnes
*IN LAST 138 TRADING DAYS: 93.88 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 81 TRADING DAYS: A NET  33,55 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  58.98 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

APRIL 26/2017/another huge deposit of 2.934 million oz into the SLV/Inventory rests at 330.283 million oz

April 25/a huge deposit of 1.98 million of into inventory/inventory rests at 327.349 million oz/

April 24/no changes in inventory at the SLV/Inventory rests at 325.361 million oz/

April 21/A WITHDRAWAL OF 719,000 OZ OF SILVER AT THE SLV/INVENTORY RESTS AT 325.361 MILLION OZ/

APRIL 20/NO CHANGES IN INVENTORY AT THE SLV/INVENTORY RESTS AT 326.308 MILLION OZ

April 19/a withdrawal of 1.893 million oz/inventory rests at 326.308 million oz/

April 18/no changes in inventory at the SLV/Inventory rests at 328.201 million oz

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/

March 31/no change in inventory at the SLV/Inventory rests at the SLV/Inventory rests at 330.894 million oz/
March 30/a huge withdrawal of 2.746 million oz from the SLV/inventory rests at 330.894 million oz/
March 29/a deposit of 1.136 million oz into the SLV/Inventory rests at 333.640 million oz
March 28/no changes in inventory at the SLV/Inventory rests at 332.504 million oz/
March 27/no changes in inventory at the SLV/Inventory rests at 332.504 million oz/
March 24/no change in inventory at the SLV/Inventory rests at 332.504 million oz/
March 23/no change in inventory at the SLV/Inventory rests at 332.504 million oz
March 22/no change in inventory at the SLV/Inventory rests at 332.504 million oz
March 21/no change in inventory at the SLV/Inventory rests at 332.504 million oz/
March 20/a gain of 1.232 million oz of silver into the SLV/inventory rests at 332.272 million oz/
March 17/no change in silver inventory/SLV inventory rests at 331.272 million oz
March 16/no changes in silver inventory/SLV inventory rests at 331.272 million oz
March 15/no change in silver inventory/SLV inventory rests at 331.272 million oz
March 14/ a deposit of 1.136 million oz of inventory into the SLV/Inventory rests at 331.272 million oz
March 13/no change in silver inventory at the SLV/Inventory rests at 330.136 million oz.
March 10/no change in silver inventory at the SLV/Inventory rests at 330.136 million oz/
March 9/another big withdrawal of 1.137 million oz from the SLV/Inventory rests at 330.136 million oz/
March 8/a big change; a withdrawal  of 1.515 million oz from the SLV/Inventory rests at 331.273 million oz/
April 26.2017: Inventory 330.283  million oz
 end

Major gold/silver trading/commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

Last month 192 tonnes were withdrawn (equals demand) for gold from mainland China. This equates to around 46.8 tonnes per week which is great.  Slowly but surely China is draining the west’s gold

 

Gold Bullion Imports Into China via Hong Kong More Than Doubles in March

Gold bullion imports into China via main conduit Hong Kong more than doubled month-on-month in March, data showed on Tuesday as reported by Reuters.

China’s net-gold imports via Hong Kong more than doubled in March to 111.6 tonnes. Chart not updated as official data not publicly available yet. Source: Goldchartsrus.com 

Net-gold imports by the world’s top gold consumer through the port of Hong Kong rose to 111.647 tonnes in March from 47.931 tonnes in February, according to data emailed to Reuters by the Hong Kong Census and Statistics Department.

China’s net-gold imports rose to its best since May 2016. Total gold imports rose to 116.68 tonnes in March from 49.026 tonnes in February.

Both total and net imports in March rose for a second straight month.

Gold has risen over 10 percent so far this year, driven by geopolitical worries.


Source: Goldchartsrus.com 

Gold bullion is often seen as an alternative investment during times of political and financial uncertainty.

Gold prices eased on Tuesday as investor sentiment remained skewed towards riskier assets in the wake of the French election results last weekend, though concerns over tensions on the Korean peninsula limited the safe-haven metal’s losses.

Full article on Reuters here

END

And now the second leg of imports of gold into China and this time from Switzerland at 46.4 tonnes.  India imports a massive 73 tonnes.

If you include both import data points, Switzerland and Hong Kong, then Mainland China’s total importation:  238 tonnes or on average weekly of 58 tonnes.

If you extrapolate India’s monthly total to year, India will have almost 900 tonnes and this does not include smuggling.  India is back into the gold business.

(courtesy Steven Flood/Goldcore)

 

Gold Flows East – China, India Import Massive Quantities of Gold from Switzerland

By Stephen Flood April 27, 2015

goldcore_chart1_27-04-15

In what future generations will likely see as a major, potentially catastrophic blunder of monetary policy, the West and particularly the City of London continues to hemorrhage huge volumes of gold which is flowing Eastwards to Singapore, India and China from London via Switzerland.

“Gold exports to China from the refining hub of Switzerland almost doubled to 46.4 metric tons in March”, up from 23.6 tonnes in February” according to Bloomberg. India’s gold imports from Switzerland doubled to 72.5 tonnes in the same period.

The increasingly affluent masses in China and India continue to have a voracious appetite for gold as a store of value.
Policy makers in China and Russia have also made gold a cornerstone of their monetary policy.

Bloomberg reported the following:

“Flows to India rose before this month’s Akshaya Tritiya festival, which is considered a traditional day to buy precious metals.”

goldcore_chart2_27-04-15

The Asian demand for Swiss refined gold was met in part by very large gold imports from the U.K. Bloomberg states that Swiss imports from the U.K.  rose sixfold in the same period to 97.2 tonnes.

This figure dwarfs Swiss imports from other nations. The U.S. and Turkey exported just over 18 tonnes and 15 tonnes respectively and these figures greatly exceed the amounts coming from all the other countries from whom Switzerland imports gold.

It is likely that London good delivery bars (400 troy ounces) favoured by western institutions including bullion banks and central banks are being imported into Switzerland. They go to the Swiss refineries to be smelted and refined into kilobar format which is increasingly popular in Asia and traded on the Shanghai Gold Exchange (SGE).

Bloomberg also reports that “Global sales from gold- backed funds totaled 55.7 tons in March.” This would indicate that the gold making its way to Asia is coming from official holdings and or liquidation of gold ETFs. Some of those selling the ETFs are opting to acquire physical, allocated bullion and storing in vaults in Zurich, Hong Kong and of course Singapore.

Singapore is fast becoming an important gold hub and a favourite location for allocated bullion storage among risk conscious bullion buyers. Hong Kong saw a decline in its share of the market as Chinese investors increasingly opt to use the Shanghai Gold Exchange (SGE) for buying and trading in general.

Bloomberg reports that “Shipments to Hong Kong fell 26 percent to 30 tons”, whereas “Trading volume for bullion … jumped about 60 percent from the previous month to a record in March, Shanghai Gold Exchange data show.”

The SGE deals solely in physical gold bars and not paper contracts or unallocated bullion bank accounts which can be used to divert and reduce actual demand for physical gold and cap gold prices.

Between them China and India and Singapore – who imported almost 29 tonnes from Switzerland – imported almost 150 tonnes of the 223.3 tonne total of gold exported from Switzerland in March which Bloomberg said are “the highest since at least 2013”.

While sentiment towards gold in the West is abysmal – even as gold languishes at record lows when adjusted for inflation – Asian demand remains insatiable.

goldcore_chart3_27-04-15

It would be wise for investors to inform themselves as to why this should be so. Demand for gold in Asia is often written off by Westerners as an irrational impulse of uneducated Asian peasant farmers and workers.

This is unfair to gold buyers in Asia – many of whom have experience of currency devaluation and therefore opt to own gold as a savings mechanism and a superior store of value.

However irrational holding gold may appear, the alternative – holding paper currencies which are continually being devalued through QE and inflation in various sectors of the economy – is even more irrational.

The fact that it is a matter of Chinese state policy to continuously accumulate vast volumes of gold and that the Chinese government has encouraged its citizens to own gold shows that bullion is not the fringe asset of irrational ‘gold bugs’ as it is often suggested in some western media.

The fact that Western central banks continue to hold, consolidate and repatriate gold shows the strategic importance placed on gold by the very entities who issue the currencies we use.

People need to protect themselves from potential economic and monetary crises where existing currencies may be devalued. In the event of serious problems or even the collapse of the unsustainable debt-based international  monetary system, an allocation to gold will protect wealth. Both the savings of peasants in India and those of the middle classes and high net worths in the western world.

Separately, this morning the LBMA have said that gold bullion trading in London isn’t likely to move to an exchange because it would increase costs and reduce liquidity, the LBMA told Bloomberg.

The London Bullion Market Association on Monday said it has commissioned Ernst & Young LLP to conduct a study and prepare recommendations on how to develop the market. In the future, there may be more regular transaction reporting and a return of publishing gold forward offered rates and the forward curve, said Ruth Crowell, the association’s chief executive.

The World Gold Council began gathering views from banks and traders, including potentially moving over-the-counter trading to an exchange, three people with knowledge of the matter said in February. Contracts change hands through an exchange in New York, Singapore and Shanghai, while London relies on banks and other companies to manage counterparty risks.

“It is unlikely that the Ernst & Young review will recommend moving the existing business from OTC to an exchange, given a move would increase costs for OTC clients and diminish liquidity,” Crowell said by phone on Monday. “We have also had a lot of changes happening in the market. Recently, the market has needed a lot more from the LBMA …”.

Important guides to storage in Singapore and Switzerland:
Essential Guide to Storing Gold In Singapore
Essential Guide to Storing Gold In Switzerland

-END-

Craig Hemke describes the fraud at the silver comex and how these crooks with only 220 million oz of physical silver available for investment demand is bombarded with over 1.1 billion oz of paper silver obligations

a must read..

(courtesy Craig Hemke)

TF Metals Report: Silver price management

Section:

3:15p ET Tuesday, April 25, 2017

Dear Friend of GATA and Gold:

The TF Metals Report’s Craig Hemke today reminds us how the bullion banks trading the silver market keep prices down by creating vast imaginary supply through derivatives — or, rather, really, how silver futures buyers keep prices down by playing the bullion banks’ game. The report is headlined “Silver Price Management” and it’s posted at the TF Metals Report here:

https://www.tfmetalsreport.com/blog/8298/silver-price-management

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

END

Here is Craig’s important commentary in the clear..

(courtesy Craig Hemke)

Silver Price Management

If the entire world only produces 880,000,000 ounces of silver per year…and if 75% of that silver is consumed through the production of cell phones, solar panels and other items…then how do The Banks manage price off of the remaining 220,000,000 ounces? The answer: Alchemy.

Look, you likely already know how The Bullion Banks alchemize gold in order to control price. After the failure of the US to manage price in the 1950s and the failure of The London Gold Pool in the 1960s, the alchemy of paper/digital “gold” was formalized with the creation of Comex gold futures in 1975. If you need a refresher, perhaps you should take a moment and read this: https://www.tfmetalsreport.com/blog/8075/42-years-fractional-reserve-alchemy

Today, we want to focus upon how The Banks and The Comex alchemize silver. Like the alchemy of gold, the alchemy of paper/digital silver is also done to manage and control price. However, where the gold price is managed in order to prop up and sustain confidence in the fiat currency system, the alchemy of silver is primarily done for profit. And which parties profit?

  1. The Banks which manage, manipulate and control price through the brute force of sheer market domination.
  2. Manufacturers who use silver as a key input in their products. For examples, check the list found here: http://www.silverusersassociation.org

If someone is profiting in this process, then it follows that someone is also losing. And who are the losers?

  1. Mining companies, their shareholders and their employees.
  2. Any and all investors and traders of physical silver.

So, with all that in mind, let’s take a look at how The Banks alchemize “silver” for investment demand.

As with just about anything, and as we wrote here (https://www.tfmetalsreport.com/blog/8252/econ-101-silver-market-manipulation), much of this can be explained through the lessons of Econ 101. Where supply meets demand is where you discover price. If demand outstrips supply, price is forced to rise. Conversely, if supply increases faster than demand, prices fall.

Applying this lesson to silver…If industrial production annually consumes about 3/4 of mine supply, leaving just 220,000,000 ounces per year for investment, then the shifting demand for that 220,000,000 ounces would largely determine price. In years where investment demand rose, leading to a shortfall in supply, prices would rise. In years where investment demand fell, leading to a surplus in supply, prices would fall.

And now we’ve come to the crux of the matter. How do Banks manage price for themselves and the manufacturers when the supply of actual, physical silver is so incredibly tight? The answer, again, is alchemy. The Banks create all forms of virtual/paper “silver” and then convince the investment world that it’s a proxy for the real thing. Whether through the creation of shares in the SLV and other ETFs or the creation of futures contracts on The Comex , these forms of digital silver take the place of actual, physical silver and are used to meet the investment demand that exceeds the supply of real, physical silver.

For today, let’s just focus upon how The Comex functions in this process. Again, in numbers that are approximations, the world annually produces about 880,000,000 ounces of physical silver per year. This leaves only about 220,000,000 ounces to satisfy investment demand after industrial demands consume up to 660,000,000 ounces per year. How do The Banks on The Comex manage this investment demand? Through the unfettered creation of paper derivative contracts which are fed to speculators and traders who seek silver “exposure” through investment.

Note the chart below and pay particular attention to the bubbles showing total Comex silver contract open interest at certain dates since late last year.

This post is not intended to describe again how price is effected by the daily creation of open interest. Instead, note the volume of the contract creation since the first of the year.

In the lower left, note that total Comex silver open interest was 163,812 contracts on January 3, 2017. At 5,000 ounces per contract, this represents a total of Comex obligation of 819,060,000 ounces of digital silver. Compare that to the CME Silver Stocks report of that same date. Note that the total Comex vault supply of silver was 181,903,038 ounces with 28,050,481 ounces listed as “registered”.

Now take a look at the upper left of that chart back up above. Do you see that, as of last Friday, total Comex silver open interest had grown to a new ALLTIME high of 234,558 contracts?

Let’s do the math, shall we? Again, with each Comex contract representing an eventual obligation to take or make delivery of 5,000 ounces of silver, 234,558 contracts equates to a total digital supply of 1,172,790,000 ounces of “silver”.

Deciphering how much virtual/paper/digital silver has been created thus far in 2017 in order to meet investment demand is pretty simple:

Friday, April 21 paper supply: 1,172,790,000 ounces

Tuesday, January 3 paper supply: 819,060,000 ounces

DIFFERENCE: 353,730,000 ounces

So, how is it that price is only up 12% year-to-date? Supply and demand. But not supply of simply physical metal. Instead, this is about the supply of digital metal or “exposure” and how this bank-created product is foisted upon the masses as a substitute for the real thing.

How do The Banks and Silver Users solve the problem of supply and demand? Well, if the world only has 225,000,000 ounces of silver each year available for investment demand, then you simply create virtual/paper/digital silver in enough supply to soak up the excess demand. And so far this year, The Banks have created over 350,000,000 ounces for this purpose.

Oh, and in case you’re wondering, has the amount of silver held on deposit at The Comex grown over this same time period? I mean, to be fair, you would think that it should, right? Well see below. Note that as of last Friday, the same date as the latest open interest alltime high, total silver in the Comex vaults was still just 195,505,395 ounces of which 30,532,200 was listed as registered.

We’ve often described The Comex Pricing Scheme as a fraud and a scam and you can once again see why in the data above. While total, potential delivery obligations have grown by 353,730,000 ounces, total silver in the vaults has grown by just 13,602,357 ounces. That’s leverage of 26:1. But, obviously, not ALL of the Comex silver is for sale. If we look at just the supply of “registered” silver, we see that it has only grown by 2,481,719 ounces over the same time period. The leverage of this silver versus total open interest is 142:1.

Anyway, we’ll write about that again some other day. In the meantime, what is the point/objective of this post?

Simply…You need to realize and understand how this works. The price of physical silver is determined NOT through the trading of actual silver. Instead, paper derivative contracts that act as proxies or substitutes for physical silver make up the vast majority of the transactions and, as long as the investment world continues to accept these worthless paper obligations and the scheme through which the price is discovered, the fraud will continue.

All parties interested in fair pricing MUST reject The Bankers and their scheme:

  • Investors must demand physical metal. NOT paper derivatives, NOT unallocated accounts and NOT shares of ETFs.
  • Mining companies must demand delivery into a physical exchange for their product and move their business away from the hyper-leveraged paper exchanges.
  • Traders must recognize that The Banks are using their ignorance against them. Every trader that believes in “free and fair markets” in nothing but the proverbial fool who is soon to be separated from his cash.

Only when the world demands physical delivery for their silver investments will The Bankers’ schemes finally fail. Only then will true and fair price discovery finally be made.

TF

www.tfmetalsreport.com/subscribe

end

One of China’s main route for gold into Shanghai comes from Hon Kong which doubled its imports to 111 tonnes.  The other routes Shanghai uses is Switzerland and London.  It is now evident that China is increasing gold purchases to a high degree.

(courtesy Reuters)

China’s net-gold imports via Hong Kong more than double in March

Section:

By Nallur Sethuraman and Arpan Varghese
Reuters
Tuesday, April 25, 2017

China’s net-gold imports via main conduit Hong Kong more than doubled month-on-month in March, data showed on Tuesday.

Net-gold imports by the world’s top gold consumer through the port of Hong Kong rose to 111.647 tonnes in March from 47.931 tonnes in February, according to data emailed to Reuters by the Hong Kong Census and Statistics Department.

China’s net-gold imports rose to its best since May 2016.

Total gold imports rose to 116.68 tonnes in March from 49.026 tonnes in February.

Both total and net imports in March rose for a second straight month.

“In the past the (Chinese) banks had enough stocks to deal with the local consumption and now it looks like the old inventories have been consumed and the banks are replenishing stocks,” said Joshua Rotbart, managing partner, J. Rotbart & Co in Hong Kong.

China allows only 13 banks, including three foreign lenders, to import gold, according to the Shanghai Gold Exchange.

China does not provide trade data on gold, and the Hong Kong figures serve as a proxy for flows to the mainland. The Hong Kong data, however, might not provide a full picture of Chinese purchases as gold is also imported via Shanghai and Beijing. …

… For the remainder of the report:

http://www.reuters.com/article/china-gold-imports-idUSL4N1HX3GL

end

 


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

 
 

1 Chinese yuan vs USA dollar/yuan WEAKER  6.8913(   DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES WEAKER TO ONSHORE AT   6.8977/ Shanghai bourse up 6.28 POINTS OR 0.20%   / HANG SANG CLOSED UP 122.49 POINTS OR 0.50%

2. Nikkei closed UP 210.10 POINTS OR 1.10%   /USA: YEN RISES TO 111.18

3. Europe stocks opened IN THE RED        ( /USA dollar index FALLS TO  99.03/Euro DOWN to 1.0896

3b Japan 10 year bond yield: FALLS TO   +.016%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 111.18/ 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::  49.28 and Brent: 51.70

3f Gold UP/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.364%/Italian 10 yr bond yield UP  to 2.285%    

3j Greek 10 year bond yield FALLS to  : 6.44%   

3k Gold at $1264.35/silver $17.58 (8:15 am est)   SILVER ABOVE  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 44/100 in  roubles/dollar) 56.58-

3m oil into the 49 dollar handle for WTI and 51 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.18 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  .9940 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0831 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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  +.364%

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 2.325% early this morning. Thirty year rate  at 2.978% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Global Market Cap Hits $50 Trillion For The First Time Ever As All Eyes Turn To Trump Tax Plan

After two days of back to back triple digit gains in the Dow for the first time since the election, overnight the torrid rally has faded, with European shares and U.S. stock futures little changed ahead of Trump’s big unveil of his much anticipated tax cut plan as investors seek new impetus for a flagging relief rally. And, if as some traders expect, the rally is likely to be reignited no matter what Trump announces today (although a less hyperbolic plan may in fact be more favorable for risk, as it makes Trump’s plan more likely instead of being shot down by Congress).

Despite the tapering of euphoria, world stocks hit another all time high on the back of strong earnings and the realization that whatever Trump says, the S&P – less than 1% from all time highs – will likely hit a new record.  the MSCI world equity index, which tracks shares in 46 countries, was up 0.1% to a fresh record high. It is up nearly 2% this week and 8.35% since the start of the year. As Bloomberg’s David Ingles charts, the market cap of all stocks in the index, and thus the world, has just surpassed $50 trillion for the first time ever.

“On top of (the French election result) we have had a very decent set of corporate earnings in the U.S. and that helped push the market further along the same direction,” said Investec economist Philip Shaw. “I am unsure how further along we really are on the tax cutting agenda, but it is certainly not doing market sentiment any harm,” he added.

Further details on President Trump’s tax cutting plans are expected to be announced later on Wednesday, potentially reviving reflation bets. The threat of a U.S. government shutdown this weekend also receded after Trump backed away from demanding Congress include funding for his planned border wall with Mexico in a spending bill.

The dollar rebounded modestly for a second day after plunging in the past week to lows not seen since November, gaining against most group-of-10 currencies even as the WTI slide continues, with crude languishing below $50 a barrel after a report on U.S. supplies. European stocks halted a five-day advance that had taken them to the highest since 2015 as earnings painted a mixed picture on growth.

According to Bloomberg, investors are waiting to see if Trump’s conciliatory tone on the border wall could help avert a government shutdown even as most members of the Congress are in the dark about the $1.1 trillion spending bill. Policy reviews by the Japanese and European Central Bank may also set the tone for rest of the week.

European shares pulled back slightly from 20-month highs as some disappointing corporate results weighed on the market but Asian stocks powered ahead. The Stoxx Europe 600 Index was little changed, after a five-day rally to the highest since August 2015.

Japan’s Topix index rose 1.2 percent, climbing for a fifth straight day for the longest winning streak this year.  Futures on the S&P 500 Index were flat after the underlying gauge climbed 0.6 percent on Tuesday, to within 10 points of its closing record.

The early FX price action this morning has been in the EUR, as the market has faded the story out late yesterday that the ECB are considering signalling a tweak in their monetary policy stance in the wake of the Macron first round victory at the weekend. This sounds premature to say the least, and alongside this, we have seen Draghi and Co curbing some of the hawkish sentiment in response to their last meeting. The recovery EU wide is a little better than fragile, but as the Fed have been struggling to do in their communication to the market, the ECB now face a similar task.

The slew of positive news pushed the Nasdaq composite to a record high on Tuesday while the Dow and S&P 500 brushed against recent peaks.

Against a strengthening dollar, the euro held on to the bulk of the gains made earlier this week; it fell 0.13 percent to $1.0911, but is still up 1.72 percent from Friday’s close.

U.S. Treasury yields, meanwhile, rose above 2.30 percent for the first time in two weeks. “U.S. bond yields have broken higher without the support of commodity prices which is one of the clearest signs that the Trump trade is back,” Morgan Stanley analysts said in a note. Euro zone government bond yields nudged up ahead of Trump’s keenly anticipated tax announcement.

Oil prices resumed their downward trend on Wednesday as data showed a rise in U.S. crude inventories and record supplies in the rest of the world cast doubt on OPEC’s ability to cut supplies and tighten the market.

Economic data include revision of retail sales. Procter & Gamble, PepsiCo are among companies scheduled to publish results. Alphabet, Microsoft, Amazon.com, Twitter, Intel, Barclays, Bayer AG and Total SA are among major companies releasing results later this week. The Bank of Japan is widely expected to keep the settings on its monetary easing program unchanged at the end of a two-day policy meeting on Thursday. Though inflation remains well below the central bank’s 2 percent target, it’s ticking up. The ECB sets monetary policy later that same day. With officials indicating little chance of a policy change, the focus will be on any signals from President Mario Draghi that the central bank is debating an exit from its extraordinary stimulus.

* * *

Market Snapshot

  • S&P 500 futures down less than 0.1% to 2,384.00
  • STOXX Europe 600 unchanged at 386.90
  • MXAP up 0.5% to 149.55
  • MXAPJ up 0.3% to 487.86
  • Nikkei up 1.1% to 19,289.43
  • Topix up 1.2% to 1,537.41
  • Hang Seng Index up 0.5% to 24,578.43
  • Shanghai Composite up 0.2% to 3,140.85
  • Sensex up 0.7% to 30,149.50
  • Australia S&P/ASX 200 up 0.7% to 5,912.04
  • Kospi up 0.5% to 2,207.84
  • German 10Y yield fell 1.0 bps to 0.368%
  • Euro down 0.2% to 1.0910 per US$
  • Brent Futures down 0.04% to $52.08/bbl
  • Italian 10Y yield rose 8.4 bps to 1.972%
  • Spanish 10Y yield rose 1.1 bps to 1.686%
  • Gold spot up 0.1% to $1,265.84
  • U.S. Dollar Index up 0.2% to 98.98

Top Headline News from Bloomberg

  • President Donald Trump’s expected call to slash the corporate tax rate to 15 percent — a number that many economists say would boost the deficit so much that the cut would be short-lived — may be less about policy and more about deal-making
  • The roll-out of legislation this week that would rip up much of the Dodd-Frank Act marks a pivotal moment for Republicans’ efforts to overhaul post-crisis financial rules
  • Credit Suisse Chief Executive Officer Tidjane Thiam is bowing to investor pressure to keep the bank’s biggest profit generator and instead will bolster capital by selling stock in a rights offer
  • KKR & Co. offered to buy a controlling stake in Hitachi Kokusai Electric Inc., the chip system-making unit of Hitachi Ltd., in a bid that values the target at $2.3 billion
  • BHP Billiton Ltd. said it may resurrect the sale of its under-performing Fayetteville shale gas assets in Arkansas a little more than two weeks after billionaire Paul Singer proposed spinning off the mining company’s U.S. petroleum division
  • China Southern Airlines Co. said it plans to buy 20 widebody aircraft from Airbus SE in a deal worth about $6 billion, according to a filing to the Hong Kong stock exchange Wednesday
    KKR to Acquire Hitachi Kokusai in Deal Valued at $2.3b
  • IQiyi, Netflix Reach Content Cooperation Agreement
  • Uber to Question Alphabet’s Larry Page in Robocar Case
  • Bayer-Monsanto Deal Needs EU Scrutiny, NRW Minister Tells RP
  • Shanghai to Develop ‘Water Town’ Next to Disneyland, Zone Says

Asia equity markets maintained the positive momentum from their counterparts in US, where the DJIA outperformed on strong earnings and the NASDAQ Comp. closed over 6,000 for the first time ever. ASX 200 (+0.8%) gained on return from holiday, while Nikkei 225 (+1.1%) benefitted after the JPY weakened against its major counterparts. The Hang Seng (+0.3%) and Shanghai Comp. (+0.2%) also conformed to the upside after the PBoC continued its liquidity injections. Finally, 10yr JGBs were lower with demand dampened amid the broad-based heightened risk appetite and as the BoJ kick-started its 2-day policy meeting in which the bank is widely expected to remain on hold, while there was also notable underperformance observed in the super long end.
PBoC injected CNY 40bIn in 7-day reverse repos, CNY 20bIn in 14-day reverse repos and CNY 20bIn in 28-day reverse repos.

Top Asian News

  • China’s Homemade Aircraft Carrier Is Second in Xi’s Fleet
  • China Merchants Seeks to Overtake UBS in Asia With Offshore Push
  • China Market Strains Worsen as AAA Rated Vanke Scraps Bond Sale
  • ICRA Sees FY18 Foreign Flows Into Indian Debt Capped at $5- $10b
  • China Eastern Said in Cargo Stake Sale Talks With Private Firms
  • Huarong Investment Risks in Spotlight After Glaucus Report
  • Hyundai Motor Counts on SUV, Genesis Brand to Revive Profits
  • Korean Peninsula on Brink of War Provoked From Outside: Russia

European bourses fail to find any firm direction with equities trading somewhat mixed yet again. Earning updates are yet again at the forefront of investors’ minds, with Credit Suisse outperforming in the SMI this morning after announcing profit rose above analyst estimates, additionally the Swiss bank noted that they will raise USD 4bIn in a rights issues. Elsewhere, luxury names have been lifted after Kering stated that their organic growth were significantly ahead of expectations. Credit markets have found some support following yesterday’s risk sentiment as the bund has seen a slow grind higher since the cash open, benefiting from month-end extension buying needs.

Top European News

  • Santander’s Brazil Patience Pays off as Rebound Lifts Profit
  • Kering Shares Surge After Gucci’s Strongest Growth in 20 Years
  • Standard Chartered Profit Soars as Bank Overhaul Gains Traction
  • Daimler Raises Earnings Forecast as Spending Pressure Mounts
  • HSBC, RBS Saudi Ventures in Talks to Form $78 Billion Lender
  • BHP Considers U.S. Shale Asset Sale After Activist Call
  • Handelsbanken’s Capital Supremacy Fails to Charm Shareholders
  • Telia Sees Lower Uzbek Fine of $1 Billion as Sales Top Views
  • SEB Sees Riksbank Move After ’Shock’ Sweden Manufacturing Data
  • De Benedetti Bets on Media as Italy Business Clans Look to Sell

In currencies, the Bloomberg Dollar Spot Index increased 0.2%, climbing for a second day after a 0.5 percent drop on Monday. The yen slipped 0.1 percent to 111.24 per dollar, after dropping 1.2 percent on Tuesday. The euro lost 0.2 percent to $1.0903, after four straight days of gains. The early price action this morning has been in the EUR, as the market has faded the story out late yesterday that the ECB are considering signalling a tweak in their monetary policy stance in the wake of the Macron first round victory at the weekend. This sounds premature to say the least, and alongside this, we have seen Draghi and Co curbing some of the hawkish sentiment in response to their last meeting. The recovery EU wide is a little better than fragile, but as the Fed have been struggling to do in their communication to the market, the ECB now face a similar task. So the 1.0950 test was inevitable given the headline driven market, but EUR/USD has since tempered this with a move back to 1.0900, while EUR/GBP — traditionally bid into month end — is also restrained through 0.8500 — but largely down to Cable resilience ahead of 1.2750, but now seemingly 1.2800 (1.2805 the low this morning). For EUR/USD, 1.0850-30 looks strong in the meantime. USD/JPY has also slipped back a little, and as we noted yesterday, sellers aplenty in the 111.00-112.00 area. We suspect a large chunk of the upside is down to the hopes and expectations of credible tax plans to be ‘outlined’ in an announcement later today, so the risk here is that the market is (again?) disappointed. EUR/JPY has also relented given the above move, and after failing to touch on 122.00, we are back in the lower 121.00’s.

In commodities, gold struggled with reclaiming USD1270 yesterday, and we have since slipped back into the mid USD1260’s as the recovery in the USD index allied with a modest recovery in risk assets put further pressure on precious metals. Silver has also given up ground, and has dipped into the USD17.50’s. Oil prices back in focus after we slipped back under USD50.00 in WTI, resuming its decline and losing 0.2% to $49.45 per barrel, after halting a six-day selloff on Tuesday. . OPEC talks now key as Oil bulls need further encouragement on an extension to the output cuts. The major producers all seem broadly open to the idea, most of all Saudi Arabia as ongoing comments suggest. Key EIA report today with speculation inventory will contract. Base metals all following the risk mood, with ranges tight ahead of Trump announcement later today. Copper buoyed but struggles at USD2.60.

It’s a very quiet day ahead in terms of data. Over in Europe French  consumer confidence for April is the only number of note and is expected to be unchanged at 100, and there’s nothing of note to watch in the US. However earnings season continues with Proctor & Gamble and Boeing due to report today among other names. Away from data, we will see UK PM Theresa May host EC President Juncker and EU’s Brexit negotiator Michal Barnier today

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -1.8%
  • 10am: Revisions: Retail Sales

* * *

DB’s Jim Reid concludes the overnight wrap

So on day 97 of his Presidency, today is all about Mr Trump’s tax plans of which the eventual success (or lack of it) will likely define the economic landscape of his administration. The WSJ last night reaffirmed that Mr Trump wants to slash corporate tax including on pass through businesses. He is also planning a tax break for child care expenses. There was also talk of a territorial tax for companies where they would pay little or no tax on future foreign earnings. Bloomberg also report that a repatriation tax of 10% is planned on the estimated $2.6tn of stockpiled offshore earnings. Anyway whatever we hear today it will still have to go through legislative approval and there will a lot of talk about how tough that will be if it’s not revenue neutral.

Staying with US politics there were signs yesterday that a US government shutdown may end up being averted as President Trump showed signs of easing up on his demands for the immediate funding of the border wall. So far the spending plan needed to keep agencies running till September has been kept quiet ahead of this Friday’s deadline, but Trump’s willingness to push back funding the wall to later this year could be a sign that he would be ready to sign the spending bill.

Ahead of the big day in Washington, sentiment across global markets remained positive yesterday following the relief rally on Monday. European equities ticked up on the day (STOXX +0.2%) while the Eurozone Banks index gained by +0.6%. The DAX and CAC posted small gains of +0.1% and +0.2%. US equity markets maintained momentum with the S&P gaining +0.6%, led by Materials (+1.4%) and Financials (+1.2%). Strong bluechip earnings helping. The NASDAQ also hit a new all time high, breaking the 6,000 mark for the first time after gaining +0.7% on the day. Interestingly this was 17 years after first hitting 5,000 although without checking one wonders how many constituents were in the index back then that are still there today. We note that having taken 17 years to fill in this last 1,000 point gap, it only took 49 days to move from 4,000 to 5,000 back in 2000. Another stat is that the index is now up around 4.7 times from its lows in March 2009. Impressive and all these stats are a reminder that timing is everything in investing!

Elsewhere risk-on continued in credit. In Europe we saw Main and Crossover spread tighten by -2bps and -8bps respectively, while Senior and Sub financials spreads tightened by -5bps and -11bps on the day. Over in the US we saw similar moves tighter as CDX IG and HY tightened by -2bps and -7bps respectively. We saw a broad based sell off in government bond markets with yields rising across all maturities for US treasuries (2Y: +4bps; 10Y: +6bps) and Bunds (2Y: +2bps; 10Y: +5bps) . Yields for 10Y OATs and BTPs yields also rose on the day by +7bps and +9bps respectively, with the 10Y OAT-Bund spread widening by +2bps.

In currency markets we saw the dollar (-0.3%) weaken for the second day in a row while the Euro gained +1.0%. Sterling also gained +0.5% to reach its highest level this year. Moves over in commodity markets were fairly muted at both ends of the risk spectrum, with WTI and Gold mostly flat. The Asian session is also relatively quiet with the positive mood of the last few days continuing. The Nikkei is 0.7% higher as the BoJ start their 2-day meeting, the Hang Seng +0.6% and the Shanghai Comp +0.35%. Gold, the Dollar, Oil and Treasuries haven’t moved much in the overnight session.

Looking now at some of the data out yesterday. In Europe, the ECB Q1 Bank Lending Survey was broadly positive as credit standards loosened across all three major categories. Loans to enterprises dipped back into easing territory (-2%) after having ticked up by +5% in Q4 2016. The net easing was roughly in line with the expected change in standards as reported in the previous survey, and banks now expect a net tightening of lending standards for enterprises in Q2 (2%). Standards for consumer credit and lending to households also loosened in Q1 (-7% and -5% respectively). Despite loose lending conditions credit demand growth from enterprises is slowing down: net 6% of banks reported an increase in loan demand from enterprises in Q1 but this was well below the 11% that expected an increase (as reported in the previous survey) and also less than the 18% reporting an increase in loan demand in Q4 2016. Banks however expect net loan demand from enterprises to accelerate in Q2 2017 (12%).

Elsewhere in Europe we also got French manufacturing confidence numbers for April that rose more than expected (108 vs. 105 expected; 104 previous) while business confidence was flat on the month (104) as expected. In the UK the PSNB numbers (including banks) for March were reported well above expectations at GBP 4.4bn (vs. 1.5bn expected).

Over in the US we saw a large number of housing market indicators which were mostly positive. The FHFA house price index rose by +0.8% mom in February (vs. 0.4% expected) while new home sales  unexpectedly rose to 621k (vs. 584k expected; 592k previous). In terms of softer data, the consumer board consumer confidence indicator for April fell more than expected to 120.3 (vs. 122.5 expected; 125.6 previous). The Richmond Fed manufacturing survey also fell on the month but less so than expected (20 vs. 16 expected; 22 previous). It’s a very quiet day ahead in terms of data. Over in Europe French  consumer confidence for April is the only number of note and is expected to be unchanged at 100, and there’s nothing of note to watch in the US. However earnings season continues with Proctor & Gamble and Boeing due to report today among other names. Away from data, we will see UK PM Theresa May host EC President Juncker and EU’s Brexit negotiator Michal Barnier today.

3. ASIAN AFFAIRS

i)Late  TUESDAY night/WEDNESDAY morning: Shanghai closed UP 6.28 POINTS OR 0.20%/ /Hang Sang CLOSED UP 122.49 POINTS OR 0.50%.  The Nikkei closed UP 210.10 OR 1.10% /Australia’s all ordinaires  CLOSED UP .61%/Chinese yuan (ONSHORE) closed DOWN at 6.8913/Oil DOWN to 49.28 dollars per barrel for WTI and 51.70 for Brent. Stocks in Europe  IN THE RED   ..Offshore yuan trades  6.8977 yuan to the dollar vs 6.8913 for onshore yuan. NOW  THE OFFSHORE IS MUCH WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN SLIGHTLY WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN ALSO MUCH WEAKER AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT HAPPY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREASabre

Tillerson, Mattis, Coats Call North Korea “Urgent National Security Threat”, Prepared To Act

Following President Trump’s North Korea briefing, Secretary of State Rex Tillerson, Secretary of Defense James Mattis, and Director of National Intelligence Dan Coats have issued a joint statement making it very clear where America goes next…

Past efforts have failed to halt North Korea’s unlawful weapons programs and nuclear and ballistic missile tests. With each provocation, North Korea jeopardizes stability in Northeast Asia and poses a growing threat to our allies and the U.S. homeland.

 

North Korea’s pursuit of nuclear weapons is an urgent national security threat and top foreign policy priority. Upon assuming office, President Trump ordered a thorough review of U.S. policy pertaining to the Democratic People’s Republic of Korea (DPRK).

 

Today, along with Chainnan of the Joint Chiefs of Staff Gen. Joe Dunford, we briefed members of Congress on the review. The president’s approach aims to pressure North Korea into dismantling its nuclear, ballistic missile, and proliferation programs by tightening economic anctions and pursuing diplomatic measures with our allies and regional partners.

 

We are engaging responsible members of the international community to increase pressure on he DPRK in order to convince the regime to de-escalate and return to the path of dialogue. We will maintain our close coordination and cooperation with our allies, especially the Republic of Korea and Japan, as we work together to preserve stability and prosperity in the region.

 

The United States seeks stability and the peaceful denuclearization of the Korean peninsula. We remain open to negotiations towards that goal. However, we remain prepared to defend ourselves and our allies.

Certainly does not leave too much room for any more ‘sabre-rattling’ from Korea. Having sent a carrier group (or 2 or 3), ported a nuclear Sub, test-fired its nuclear missiles, America appears to have shown its ‘stick’…

end

 

b) REPORT ON JAPAN

none today

c) REPORT ON CHINA

none today

4. EUROPEAN AFFAIRS

GREECE

Greece is going to be in a terrible state as widow’s pensions will be cut by 50%.  This will push thousands more into poverty

(courtesy zero hedge/Keep talking Greece)

Sudden Death For Greek Widows’ Pensions: New Criteria, Cuts To Push 1000s More Into Poverty

The implementation of the Greek pension reform of 2016, will lead to the sudden death of incomes for widows, and as KeepTalkingGreece reports, will push a large portion of population further into poverty. Widows’ pensions will be cut down to 50% of the deceased’s pension and new more restrictive age-based criteria will go into effect this month.

According to so-called Katrougalos Law, a widow is entitled to receive a pension for the rest of her life, if she was at least 55 years old at the time of the spouse’s death.

  • If the surviving spouse was below this age limit, the pension is given initially for three years. Then it is interrupted and is granted again after the surviving spouse reaches the age of 67.
  • If the age of 55 in not completed within three years, the pension is cut and never granted again.

The state keeps in its pockets all the pension contribution paid by the deceased.

Exemptions are for widows with underage children until they reach 18th year of age and students until they reach the 14th year of age. Widows receive the pension independently of their age until the children/students reach the age limit.

Provision is for widows or unmarried children with disability over 67%. They receive the pension. However, if the disability occurred after the death of the spouse or father, this does not count as precondition to retirement.

Changes are also implemented to the age of the deceased.

The deceased insured person must have fulfilled completed at the time of death the requirements for pension due to age, invalidity, full or reduced pension.

“Old” insured – i.e. who started to pay social security contributions before 1993 – need to have 1,500 insurance days, 600 of them in the last five years.

A new criterion is the one linked to the length of marriage and the age difference between the deceased and the surviving spouse. Minimum length of marriage is now 5 years, from 3 previously.Exemptions are when the death was caused by an accident, if a child was born during the marriage or the widow was pregnant at the time of death. Unfortunately, I did not see details about the age difference between the spouses and how they can affect the pensions.

At the same time, widow pensions are lowered from 70% of the pension down to 50 percent.

What is interesting is that I read nothing about the old odd Greek regulation that daughters of civil servants, especially daughters of armed forces personnel, were granted the pension of their parents until the end of their life, if they were unmarried.

In times of recession and high unemployment, widows over 50 or 55 should seek a job or sink in poverty in a country without social safety net?

We have gone completely nuts here…

And it appears President Trump agrees.

Trump expressed his true sympathy for the plight in Greece and said that he will reveal his policy for the International Monetary Fund in the next days.

Speaking to a group of conservative US journalists in the West Wing of the White House, Donald Trump reportedly said “Greece!” They are in such a terrible situation there. It’s awful!”

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

Russia has withdrawn half of its fighter jet group from Syria as the number of terrorist units has decreased considerably

(courtesy zero hedge)

Russia Has Withdrawn Half Of Its Fighter Jet Group From Syria

In an unexpected development, the Russian General Staff announced on Wednesday that it has withdrawn almost half of its air grouping originally based at the Hmeymim facility in Syria.  Cited by Sputnik, the chief of the Main Operational Directorate Col. Gen. Sergei Rudskoi said at the VI Moscow Conference on International Security that “the number of terrorist units has decreased, which allowed us to
withdraw almost half of the aircraft based at the Hmeymim airbase.”

Rudskoi said that the Russian air group never exceeded 35 aircraft between November 10, 2016 and January 10, 2017. He also said that Russia is operating about 80 drones in Syria, and stressed that an analysis has shown that the Russian Aerospace Forces have conducted four times more airstrikes than the US-led coalition despite having fewer aircraft.

“Comparative analysis of the results of activities by Russian aircraft and the international coalition’s aircraft in Syria shows that having far fewer aircraft, the Russian Aerospace Forces carried out three times more combat sorties and made four times more missile and bomb strikes,” Rudskoi said.

Since September 2015, the Russian Aerospace Forces have carried out constant airstrikes in Syria targeting terrorist positions at the request of Syrian President Bashar Assad. In March 2016, the biggest part of Russian air forces left Syria in line with the decision of Russian President Vladimir Putin, following successful task fulfillment.

Predictably, there was no discussion if the recent air strike by the US was a factor in the decision to repatriate half of the Russian air support from Syria, neither was there a comment on whether the recent report by Iran’s FARS that Russia was considering deploying ground troops to Syria was accurate.

6 .GLOBAL ISSUES

This is huge!!  The USA intends to withdraw from NAFTA.  That is going to hurt both Canada and Mexico

(courtesy zerohedge)

 

Peso Plunges As White House Plans Nafta Withdrawal

The Mexican Peso is tumbling (and Loonie extending yesterday’s timber-tariff-driven losses), as Politico reports, the Trump administration is considering an executive order on withdrawing the U.S. from NAFTA, according to two White House officials.

Politico reports that a draft order has been submitted for the final stages of review and could be unveiled late this week or early next week, the officials said. The effort, which still could change in the coming days as more officials weigh in, would indicate the administration’s intent to withdraw from the sweeping pact by triggering the timeline set forth in the deal.

The approach appears designed to extract better terms with Canada and Mexico, and judging bvy the FX market’s reaction, they agree…

Trump in recent weeks has stepped up his rhetoric vowing to terminate the agreement all together.

“NAFTA’s been very, very bad for our country,” he said in a speech last week in Kenosha, Wis.

 

“It’s been very, very bad for our companies and for our workers, and we’re going to make some very big changes or we are going to get rid of NAFTA once and for all.”

Peter Navarro, the head of Trump’s National Trade Council, drafted the executive order in close cooperation with chief White House strategist Steve Bannon. The executive order was submitted this week to the staff secretary for the final stages of review, according to one of the White House officials.

 

 

end

 

A double whammy for Canada as its largest mortgage lender, Home Capital Group’s stock cratered today.  it disclosed it struck an emergency credit arrangement of 2 billion dollars to counter evaporating deposits…it may be insolvent..

(courtesy zero hedge)

Canada’s Housing Bubble Explodes As Its Biggest Mortgage Lender Crashes Most In History

Call it Canada’s “New Century” moment.

We first introduced readers to the company we said was the “tip of the iceberg in Canada’s magnificent housing bubblenearly two years ago, in July 2015 when we exposed a major problem that we predicted would haunt Home Capital Group, Canada’s largest non-bank mortgage lender: liar loans in particular, and a generally overzealous lending business model with little regard for fundamentals. In the interim period, many other voices – most prominently noted short-seller Marc Cohodes – would constantly remind traders and investors about the threat posed by HCG.

Today, all those warnings came true, when the stock of Home Capital Group cratered by over 60%, its biggest drop on record, after the company disclosed that it struck an emergency liquidity arrangement for a C$2 billion ($1.5 billion) credit line to counter evaporating deposits at terms that will leave the alternative mortgage lender unable to meet financial targets, and worse, may leave it insolvent in very short notice.

As part of this inevitable outcome, one which presages the company’s eventual disintegration and likely liquidation, Bloomberg reports that the non-binding rescue loan with an unnamed counterparty will be secured by a portfolio of mortgage loans originated by Home Trust, the Toronto-based firm said in a statement Wednesday. Home Capital shares dropped by 61% in Toronto to the lowest since 2003, dragging down other home lenders. Equitable Group Inc. fell 17 percent, Street Capital Group Inc. fell 13 percent, while First National Financial Corp. declined 7.6 percent. In short, the Canadian mortgage bubble has finally burst.

Some more details on HCG’s emergency source of funding: Home Capital will pay 10% interest on outstanding balances and a non-refundable commitment fee of C$100 million, while standby fee on undrawn funds is 2.5%. The initial draw must be C$1 billion. The loan has an effective – and very much distressed – interest rate of 22.5% on the first C$1 billion, declining to 15% if fully utilized, according to a note from Jaeme Gloyn, an analyst at National Bank of Canada.

Home Capital said the credit line is intended to “mitigate” a sharp drop in Home Trust’s high-interest savings account balances, which sank by $591 million from March 28 to April 24, at which point the total balance was $1.4 billion. Home Capital warned on Wednesday that further outflows are anticipated.

Translated: what until last night was a depositor bank jog just became a sprint.

The loan will provide Home Capital with more than C$3.5 billion in total funding, more than twice the C$1.5 billion in liquid assets it held as at April 24. It also has C$200 million in securities available for sale, and high interest savings account balances fell about 25% to C$1.4 billion over the past month. Home Capital relies on deposits to fund their mortgage loans; following today’s announcement the company’s liquidity is certain to get even worse as all non-distressed sources of cash are pulled.

Cited by Bloomberg, Andrew Torres, founding partner and chief investment officer at Toronto-based Lawrence Park Asset Management said that “The company is facing a bit of a liquidity crunch and they felt they needed to resolve it quickly.” He said the “steep” commitment fee and the interest rate on the loan “are surprising numbers for a company that was ostensibly investment-grade.”

Well, it was only investment grade because as usual the rating agencies never did their homework. For a real hint into the company’s rating, look at the 22.5% interest rate, suggesting the company’s days outside of bankruptcy are numbered.

Home Capital Group’s sudden collapse was actually visible from a distance. While in the summer of 2015, the termination of HCG was still debate, in recent months the company’s woes stemmed from allegations by the Ontario Securities Commission that Home Capital misled investors and broke securities laws.

In other words engaged in those “liar loans” which we first warned about back in the summer of 2015.

Meanwhile, founder Gerald Soloway will step down from the board when a replacement is named and Robert Blowes will assume the role of interim chief financial officer, the company said Monday.

“The company anticipates that further declines will occur, and that the credit line would also mitigate the impact of those,” Home Capital said.

Amusingly, it was just two months ago when the company set new performance goals after reporting quarterly results, targeting revenue growth of 5% or greater, diluted earnings-per-share of 7% or greater and a return on equity of 15 percent or more over the long term, according to Bloomberg. It should add one more “performance goal” – stay out of bankruptcy for at least 3 months.

“They did what appears to be to us a very expensive deal,” said David Baskin, president and founder of Baskin Wealth Management in Toronto, a former investor in Home Capital stock. “Basically they blew up the income statement in order to save the balance sheet, which I guess if you’re facing an existential crisis is what you have to do.”

The Office of the Superintendent of Financial Institutions (OSFI) told Canada’s BNN it does not comment on specific institutions it supervises, but that it maintains ongoing relationships with those institutions and is monitoring the Home Capital situation “closely.”

end

 

At least they are honest:  Canada’s housing regulator warns of “strong evidence” of housing market problems!

(courtesy zero hedge)

Home Capital Plunges as New Loan Will Force It to Miss Goals

April 26, 2017, 8:42 AM EDT April 26, 2017, 10:36 AM EDT
  • Will pay 10% interest, C$100 million non-refundable fee
  • Home Capital shares drop the most on record in Toronto trading

Home Capital Group Inc. plunged the most on record after disclosing that it struck a deal for a C$2 billion ($1.5 billion) credit line to counter dwindling deposits, at terms that will leave the alternative mortgage lender unable to meet financial targets.

The non-binding agreement with an unnamed counterparty will be secured by a portfolio of mortgage loans originated by Home Trust, the Toronto-based firm said in a statement Wednesday. Home Capital shares dropped 59 percent as of 10:24 a.m. in Toronto to the lowest since 2003, dragging down other home lenders. Equitable Group Inc. fell 17 percent, Street Capital Group Inc. fell 13 percent, while First National Financial Corp. declined 7.6 percent.

Home Capital will pay 10 percent interest on outstanding balances and a non-refundable commitment fee of C$100 million, while standby fee on undrawn funds is 2.5 percent. The initial draw must be C$1 billion. The loan has an effective interest rate of 22.5 percent on the first C$1 billion, declining to 15 percent if fully utilized, according to a note from Jaeme Gloyn, an analyst at National Bank of Canada.

“The company is facing a bit of a liquidity crunch and they felt they needed to resolve it quickly,” said Andrew Torres, founding partner and chief investment officer at Toronto-based Lawrence Park Asset Management, which holds Home Capital’s bonds due May 2017. He said the “steep” commitment fee and the interest rate on the loan “are surprising numbers for a company that was ostensibly investment-grade.”

Dwindling Deposits

The company’s woes stem from allegations by the Ontario Securities Commission that Home Capital misled investors and broke securities laws. Founder Gerald Soloway will step down from the board when a replacement is named and Robert Blowes will assume the role of interim chief financial officer, the company said Monday.

The loan will provide Home Capital with more than C$3.5 billion in total funding, more than twice the C$1.5 billion in liquid assets it held as at April 24. It also has C$200 million in securities available for sale, and high interest savings account balances fell about 25 percent to C$1.4 billion over the past month. Lenders such as Home Capital rely on deposits to fund their mortgage loans.

“The company anticipates that further declines will occur, and that the credit line would also mitigate the impact of those,” Home Capital said.

‘Existential Crisis’

The company set new performance goals in February after reporting quarterly results, targeting revenue growth of 5 percent or greater, diluted earnings-per-share of 7 percent or greater and a return on equity of 15 percent or more over the long term.

“They did what appears to be to us a very expensive deal,” said David Baskin, president and founder of Baskin Wealth Management in Toronto, a former investor in Home Capital stock. “Basically they blew up the income statement in order to save the balance sheet, which I guess if you’re facing an existential crisis is what you have to do.”

(A previous version of this story was corrected to fix name of asset management company in fourth paragraph.)

7. OIL ISSUES

Huge drawdown but that was offset by a major rise in production levels”

(courtesy zero hedge)

WTI/RBOB Jump On Largest Crude Draw In 2017 Offset By Major Product Build, Rising Production

WTI/RBOB prices were at the lows of the day after last night’s huge surprise inventory data from API, but kneejerked higher after DOE reported a surprisingly large crude draw (the biggest since Dec 2016. However, it’s clear that refineries are on fire as gasoline and distillates inventories surged by the most in at least 3 months. US crude production rose once again to its highest since August 2015.

API

  • Crude +897k (-1.75mm exp)
  • Cushing -1.971mm – largest since Feb 2014
  • Gasoline +4.445mm (+500k exp) – largest since Jan 2016
  • Distillates -36k

DOE

  • Crude -3.64mm (-1.75mm exp) – biggest since 2016
  • Cushing -1.203mm
  • Gasoline +3.369mm (+500k exp) – biggest in 3 months
  • Distillates +2.651mm (-1mm exp) – biggest since first week of Jan

As Bloomberg notes, the U.S. refining system is absolutely on fire: up another 347,000 barrels a day last week to 17.3 million barrels a day processing. It’s huge. And that explains the major builds in products (gasoline/distilates) and surprise draw in crude…

 

Crude stocks fell -3.6 million bbl to 529 million bbl last week, a faster draw down than normal at this time of year.

As Reuters adds, crude stocks tightened last week by about -5.7 million bbl compared with 2016 and -7.6 million bbl compared with 10-yr average

Crucially, as Bloomberg’s Javier Blas details: Saudi Arabia cutting production? Not much, if you believe the U.S. oil imports figures. Last week, the U.S. bought from the kingdom 1.19 million barrels of oil, up from 1.18 million barrels the previous week. Imports from Kuwait and Iraq also rose last week. So far, OPEC cuts are not really translating into lower U.S. imports from key players in the Middle East.

US Crude production continues to trend higher with lagged rig counts – now at the highest level since Aug 2015 (and on pace for record production levels by the end of July 2017 if this trend continues).

Prices were already retesting the post-API lows heading into the DOE priont but price for both WTI and RBOB snapped higher (despite the major build in the latter)

 

As Bloomberg’s Javier Blas notes, the market is starting to lose faith in the re-balancing story, with hard data not showing yet a significant draw in inventories (particularly of crude). In the meantime, U.S. production (weekly figures) continues to march up. In recent weeks, the EIA has pegged U.S. domestic output growing at 30,000-50,000 barrels a day and further confirmation of the growth will undermine the bulls. The chart shows a dramatic increase.

8. EMERGING MARKETS

This ought to scare you:  Venezuela plans to give firearms to loyalists in order to purge resistance

(Daniel L:ang/SFTFPlan)

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

Euro/USA   1.0896 DOWN .0031/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 IN THE RED

USA/JAPAN YEN 111.18 UP 0.103(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 1.2821 DOWN .0010 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.3573 UP .0004 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS WEDNESDAY morning in Europe, the Euro FELL by 31 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.0896; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED UP 6.28  POINTS OR 0.20%    / Hang Sang  CLOSED UP 122.49 POINTS OR 0.50%/AUSTRALIA  CLOSED UP .61% EUROPEAN BOURSES ALL IN THE RED 

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

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

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

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

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

The NIKKEI: this WEDNESDAY morning CLOSED UP 210.10 POINTS OR 1.10%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 122.49 OR 0.50%  / SHANGHAI CLOSED UP 6.28 POINTS OR 0.20%/Australia BOURSE CLOSED UP .61% /Nikkei (Japan)CLOSED UP 210.10 OR 1.10%  / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1265.40

silver:$17.60

Early WEDNESDAY morning USA 10 year bond yield: 2.325% !!! DOWN 1 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.978, DOWN 1  IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 99.03 UP 24  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 3.574%  DOWN 3  in basis point(s) yield from TUESDAY 

JAPANESE BOND YIELD: +.016%  DOWN 1   in   basis point yield from TUESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.699%  up 2  IN basis point yield from TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.312 up 5   POINTS  in basis point yield from TUESDAY 

the Italian 10 yr bond yield is trading 61 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.352% DOWN 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.0869 DOWN .0058 (Euro DOWN 58 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.62 UP: 9.551 (Yen DOWN 55 basis points/ 

Great Britain/USA 1.2831 UP 0.0001( POUND UP 1 basis points)

USA/Canada 1.3611 UP 0.0039(Canadian dollar DOWN 39 basis points AS OIL FELL TO $49.86

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This afternoon, the Euro was DOWN by 58 basis points to trade at 1.0869

The Yen FELL to 111.62 for a  LOSS of 55 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 1  basis points, trading at 1.2831/

The Canadian dollar fell by 39 basis points to 1.3611,  WITH WTI OIL FALLING TO :  $49.86

The USA/Yuan closed at 6.8926/
the 10 yr Japanese bond yield closed at +.016% DOWN 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 1 IN basis points from TUESDAY at 2.325% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.978 UP 1  in basis points on the day /

Your closing USA dollar index, 99,21 UP43  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 WEDNESDAY: 1:00 PM EST

London:  CLOSED UP 13.08 POINTS OR 0.18% 
German Dax :CLOSED UP 5.76 POINTS OR .05% 
Paris Cac  CLOSED UP 10.00 POINTS OR 0.19%
Spain IBEX CLOSED DOWN 19.70 POINTS OR 0.18%
Italian MIB: CLOSED UP 30.99 POINTS OR 0.15%

The Dow closed DOWN 23.23 OR 0.10%

NASDAQ WAS closed UP 0.26 POINTS OR 0.00%  4.00 PM EST
WTI Oil price;  49.86 at 1:00 pm; 

Brent Oil: 51.95 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.15 down 101/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD RISES TO +0.352%  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 4:45 PM:$49.27

BRENT: $51.50

USA 10 YR BOND YIELD: 2.302%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.960%

EURO/USA DOLLAR CROSS:  1.0906 DOWN .0021

USA/JAPANESE YEN:110.94  DOWN 0.127

USA DOLLAR INDEX: 98.96  UP 18  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2850 : up .0019  OR 19 BASIS POINTS.

Canadian dollar: 1.3618  UP .0046 (CAN DOLLAR DOWN 46 BASIS PTS)

German 10 yr bond yield at 5 pm: +.352%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stocks Stumble As Treasury-Bill Curve Inverts. ‘Animal Spirits’ Slump

So to sum up – US testfires a Nuke, Govt Shutdown looms, Trump Tax plan is a wishlist with no details, Canadian mortage lenders collapse, and animal spirits tumble – stocks close unchanged… so we thought this would help…

 

Bonds and Bullion were bid after the Trump Tax plan was unveiled and banks and stocks sank…

As Citi noted, while the market isn’t jumping around on this but there is a bid in US fixed income, taking USDJPY down towards 111.00. All in all, a classic buy the rumor, sell the news on an underdelivered (but fairly presented as such) “big announcement” from the Trump Administration.

Trannies fell for the second day in a row, but The Dow, S&P, and Nasdaq all desperately clung to unch amid late day selling…

 

Stocks still positive post-French-election…

 

But Small Caps ripped to new record highs… because fun-durr-mentals…

 

We note that there was a desperate VIX crush after stocks began to sink following Trump’s Tax Plan – have to keep the smoke-and-mirrors dream alive… Despite two good runs at trying to break 2,400, they failed…

 

Of course all the headlines were surrounding the wishlist of tax Trump’s tax reform plan but in the meantime, Canada’s mortgage lenders collapsed…

 

The Peso and The Loonie tumbled on chatter of a NAFTA withdrawal notice executive order…

 

Government Shutdown concerns grew notably once again (despite hope for a stopgap funding bill) with the short-dated curve inverting notably…

 

‘Animal Spirits’ have tumbled to 2-month lows…

 

One has to wonder at the market’s confidence when 5Y Treasury yields tumble at the announcement of a “pro-growth” tax reform plan…

 

In fact the entire Treasury cirve flattened and fell after the tax plan…

 

But hey Twitter ripped 10% on the biggest revenue drop YoY since the IPO…

 

 

The Dollar ripped higher to run stops from Trump’s “strong dollar” comment bounce but the Tax Plan today sparked selling…

 

USDJPY was today’s big mover…

 

The machines tried 3 times to juice stocks (via VIX) but each time it fell back to USDJPY’s reality…

 

On the heels of a bigger than expected crude draw, WTI kneejerked higher but RBOB pumped and dumped as inventories rose…

 

Gold ansd Silver were bid (as the dollar sank) after Trump unveiled his wishlist tax plan…

 

Finally we thought this was interesting – stock and bond performance since the S&P top in October 2007…

end

JPMorgan states what we have been telling you:  Trump’s tax plan will be impossible to pass through congress:

(courtesy zero hedge)

JPMorgan: “Trump’s Tax Plan Will Be Virtually Impossible To Pass Through Congress”

With little macro data overnight (aside from a modestly disappointing Australian CPI print), offset by an ongoing of corporate profits (this is the single busiest week for corporate earnings in more than 10 years), today everyone’s attention will be focused on three things to come out of Washington: taxes, healthcare, spending.

And while we did our best to summarize what is known and unknown last night, this morning JPM has released what may be the best summary assessment, one which comes to a predictable conclusion, namely that Trump’s tax plan “will be virtually impossible to pass through Congress”, in other words it is merely a gambit, or as Trump would see it, a first step in a negotiating process with Congress. Whether Congress responds favorable, especially to a plan that has no revenue aspect to it whatsoever, remains to be seen.

Until we wait, for those who may be unfamiliar with the framework of what Trump will propose today, here is JPM’s summary:

Washington – three big headlines overnight – taxes, healthcare, spending

Taxes – Trump’s much-anticipated tax blueprint will be released on Wed but

  1. a lot of the details have already been leaked to the press over the last few days;
  2. it seems very inchoate, leaving out key details esp. as it pertains to the individual code;
  3. it will be virtually impossible to pass through Congress.

With all that said, Trump will propose cutting the corporate rate and “pass-through” rate to 15% (from 35% and 39.6% now, respectively) and the repatriation rate to 10% (from 35%) while raising significantly the standard deduction for individual filers (which will have the effect of dramatically cutting individual rates). There are proposals being worked on for deducting child care costs but these won’t be ready for  Wed. Trump’s plan won’t contain any large revenue raisers (there won’t be a BAT) and thus the conversation has shifted very much away from “tax reform” and towards “tax cuts”. Needless to say the blueprint would dramatically expand the deficit although WH/Treasury officials are expressing confidence in “dynamic scoring” (i.e. the belief that higher growth will more than pay for the lower tax rates).

Background material: Washington Post http://wapo.st/2phiEWp, WSJ http://on.wsj.com/2pimbpv, NYT http://nyti.ms/2pygx3A. 

  • Mnuchin, Cohn (not Trump) expected to roll out Trump tax plan at 1:30pmET – The Hill http://bit.ly/2qdsjMP
  • Rather than spurring tax reform, Trump may instead kill it – Trump’s Wed blueprint is so unrealistic that it could actually hurt the chances of Congress taking any action on the tax front – Politico. http://politi.co/2phk6bj
  • Dynamic scoring – the NYT (http://nyti.ms/2pklsUJ) examines the “Laffer Curve” and the concept of dynamic scoring (whereby tax cuts pay for themselves via higher economic growth). Stephen Moore has an editorial in the WSJ (“growth can solve the debt dilemma” http://on.wsj.com/2oICesP) although his calls for a return to ‘90s-like growth doesn’t appear realistic given present labor supply/productivity trends (the ‘90s was an extraordinarily unique period of time that is very unlikely to repeat).
  • Market expectations – at this point investors would be happy to see the corporate rate brought down to ~27% by the end of Q1:18 (beyond Q1:18 Washington’s focus will shift towards the mid-terms). Most think 15% (Trump), 20% (Ryan), and even 25% to be too ambitious given the country’s political and fiscal constraints. Expectations for changes to the individual tax code are near zero.

Healthcare – once again it looks like a deal may be close in the House on a repeal/replace compromise. All the major media outlets overnight (including Politico http://politi.co/2qdCXmM and Washington Post http://wapo.st/2oKNVzN) were reporting on a compromise agreement that will bridge differences between moderates and conservatives in the House GOP. However, “it is far from clear that the fragile agreement will provide Ryan w/the 216 votes needed for passage in the House” (per Politico). A vote still seems unlikely this week although one could occur soon assuming the Freedom Caucus lends its support.

Spending – indications continue to point to a spending compromise that will avoid a shutdown later this week. Republicans/Trump have withdrawn demands for $1.5B in funding to go towards wall construction although will get money for overall border security. The Pentagon also could see a spending boost. The two sides remain at odds over whether the spending bill would include ACA subsidy payments. Washington Post http://wapo.st/2oICTu9, Politico http://politi.co/2ovcBQP, WSJ http://on.wsj.com/2pkc2J1.

end

 

Trump’s tax plan:

(courtesy zero hedge)

Trump Individual Tax Plan To Have 3 Brackets: 35%, 25%, & 10%

As the minutes tick by ahead of the announcement of “the greatest tax cut in human history,” we are getting more information on the personal tax rates (something Treasury Secretary Mnuchin failed to mention earlier). As Fox News reports, in addition to raising deductions, the Trump administration will collapse the current seven-tier bracket system into just three tax brackets under the new plan, taxed at rates of 35 percent, 25 percent and 10 percent.

As Fox News reports, President Donald Trump’s tax plan, which will be unveiled Wednesday, calls for a sizable increase to the standard deduction Americans can take when filing taxes, potentially allowing taxpayers to keep more of their income – to the tune of a couple thousand dollars, White House sources told Fox News.

A piece of the proposed tax overhaul would nearly double the standard deductions that both individuals and families can claim on their returns, Fox News reported. Under the proposal, the tax cuts for individuals and married couples filing separately will increase from $6,300 to $12,600. The standard deduction for a married couple filing jointly will jump from $12,700 to approximately $24,000.

 

White House sources also said the plan would eliminate the marriage penalty.

 

In addition to raising deductions, the Trump administration will collapse the current seven-tier bracket system into just three tax brackets under the new plan, taxed at rates of 35 percent, 25 percent and 10 percent… this is slighlty different than Trump’s previously proposed tax rates were 33 percent, 25 percent and 12 percent.

We look forward to hearing from Mnuchin and Cohn in an hour on the details… and of course any guesstimate at whether this will pass.

end

 

And the tax reform in more detail:

 

Having promised “the biggest tax cut in history,” and seemingly desperate for a win (given his folding on the funding of the wall), one wonders why President Trump has delegated the announcement of his Tax Reform plan to Treasury Secretary Steven Mnuchin and Chief Economic Advisor Gary Cohn. Reduction, repatriation, simplification, and de-itemization appear to be the cornerstones.

2017 Tax Reform for Economic Growth and American Jobs

The Biggest Individual And Business Tax Cut in American History

Goals For Tax Reform

  • Grow the economy and create millions of jobs
  • Simplify our burdensome tax code
  • Provide tax relief to American families—especially middle-income families
  • Lower the business tax rate from one of the highest in the world to one of the lowest

Individual Reform

  • Tax relief for American families, especially middle-income families:
    • Reducing the 7 tax brackets to 3 tax brackets of to%, 25% and 35%
    • Doubling the standard deduction
    • Providing tax relief for families with child and dependent care expenses
  • Simplification:
    • Eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers
    • Protect the home ownership and charitable gift tax deductions
    • Repeal the Alternative Minimum Tax
    • Repeal the death tax
  • Repeal the 3.8% Obamacare tax that hits small businesses and investment income

Business Reform

  • 15% business tax rate
  • Territorial tax system to level the playing field for American companies
  • One-time tax on trillions of dollars held overseas
  • Eliminate tax breaks for special interests

Process

Throughout the month of May, the Trump Administration will hold listening sessions with stakeholders to receive their input and will continue working with the House and Senate to develop the details of a plan that provides massive tax relief, creates jobs, and makes America more competitive—and can pass both chambers.

Of course the crucial question is – With The White House targeting deductions to help pay for tax plan (but mortgage/charitable are protected), how does this not blow up deficit?

We look forward to Steve Mnuchin and Gary Cohn explaining it all (with as many superlatives as possible we are sure).

Perhaps the most concerning aspect is the apparent expectations management that is being undertaken this morning:

The White House’s presentation will be “pretty broad in the principles,” said Marc Short, Trump’s director of legislative affairs.

 

In the coming weeks, Trump will solicit more ideas on how to improve it, Short said. The specifics should start to come this summer.

 

Short said the administration did not want to set a firm timeline, after demanding a quick House vote on a health care bill and watching it fail.

 

But, Short added, “I don’t see this sliding into 2018.”

 

end

And our resident expert on USA taxation and budgets..David Stockman weighs in on the tax proposal of Trump.

this is a must read….

(courtesy David Stockman/Daily Reckoning)

Tax Lessons for the Donald

 

[Urgent Note: The nation’s future hangs in the balance as Trump approaches his first 100 days. That’s why I’m on a mission to send my new book TRUMPED! A Nation on the Brink of Ruin… and How to Bring It Backto every American who responds, absolutely free. Click here for more details.]

 

Hang onto your hat. The Donald is fixing to drive the Imperial City deeper into the debt Swamp than ever before.

Whatever he has been doing for the past 97 days, it obviously didn’t involve learning a single thing about the nation’s dire fiscal plight or the procedural landmines that infest the budget process at every turn.

So according to the Wall Street Journal he has ordered his advisors to jettison even the pretense of “payfors” and go for a near abolition of the corporate income tax — the deficit be damned:

President Donald Trump has ordered White House aides to accelerate efforts to draft a tax plan slashing the corporate rate to 15% and prioritizing cuts in tax rates over an attempt to not increase the deficit, according to a person familiar with the directive.

During a meeting inside the Oval Office last week, Mr. Trump told staff he wants a massive tax cut to sell to the American people, the person said. It was less important to him if the plan loses revenue. Mr. Trump told his team to “get it done,” in time to release a plan by Wednesday (today).

Mr. Trump promised from the campaign trail to cut corporate rates to 15% from 35%. There likely aren’t enough business tax breaks that could be repealed to offset the fiscal cost, meaning such a move would increase budget deficits. Roughly, each percentage-point cut in the tax rate lowers federal revenue by $100 billion over a decade, so a 20-point cut would cost the government $2 trillion, according to the congressional Joint Committee on Taxation.

To be sure, I’m all for a 15% corporate tax rate, and zero would actually be even better.

But how in the world does the Donald think he doesn’t have to pay for the revenue loss with entitlement reforms or even by draining the Deep End of the Swamp at the Pentagon by cutting, not increasing, its already swollen budget?

And besides that, apparently no one has told him that the deficit-conscious Freedom Caucus wing of the Republican House will never vote for $2 trillion in deficit-financed tax cuts. Nor will the moderate Tuesday Group side of the party support a huge corporate rate cut without commensurate reductions on the personal income tax side that would cost another $3 trillion or so over a decade.

And that’s not the half of it. The Senate can’t possibly pass any kind of tax bill without a 51-vote reconciliation procedure. Yet that would be impossible under the Donald’s newest instructions because the reconciliation procedure forbids — for good reason — any net deficit add-ons beyond the 10-year budget period.

At the same time, there is no possibility of a “bipartisan” tax bill, either. The Donald can pretend to “pivot” all he wants, but it will be to no avail because Democrats become deficit hawks whenever there is a Republican in the White House — especially one that wishes to cut corporate rates and those for the richest taxpayers.

And in that respect, let’s again recall why there will never be significant Democrat votes for a traditional GOP “tax cut.”

The Dems are the party of redistribution. Their rank and file voters overwhelmingly are among taxpayers with household adjusted gross incomes of $75,000 or below.

But the 110 million filers in this cohort don’t really pay any material Federal income tax at all. 50 million of these filers owed not one single penny of Federal income tax in 2014.

Another 33 million paid less than $25 per week.

In fact, these households accounted for 74% of all Federal tax filers, but paid only $175 billion of income taxes or just 13% of the total. For the average household among these 110 million filers, a 15% income tax cut would amount to barely $1 per day of savings.

By contrast, the top 4% of households (with adjusted gross incomes above $200,000) paid $802 billion in Federal income taxes or nearly 5X what the bottom 74% paid. Altogether, these 6.2 million tax filers accounted for 58% of all Federal individual income taxes and paid $129,000 in taxes on average.

Moreover, the top 16% of filers (24 million) accounted for $1.1 trillion of income tax payments or 80% of the $1.38 trillion paid in 2014. So no matter how you slice it, big personal income tax cuts can be demagogued until the cows come home by the Dems because the truth is the income tax has morphed into a tax almost exclusively borne by the wealthy.

My point, however, is not to bemoan the obvious extreme “progressivity” of the Federal income tax. That’s a policy scandal for another day.

My purpose here is to explain its political consequence and the reason that a” bipartisan” tax bill is now a legislative impossibility.

Beyond the legislative politics, personal rate cuts are essentially irrelevant in this day and age of Bubble Finance. That is, whatever their philosophical shortcomings as a matter of fairness and equity, current income tax rates are not a significant barrier to economic activity, and therefore rate cuts will generate only modest incremental “growth” and supply side gains.

What is very different today compared to 1981 when I was White House Budget Director is that the madcap money printers at the Fed have caused such enormous inflation of financial asset prices that no entrepreneur is wanting for rewards for his or her efforts.

Almost any viable investment has paid off big time owing to the drastic expansion of valuation multiples and low rates of taxation on capital gains.

At the same time, such a huge share of the work force has been excused from the Federal income tax that little labor is being withheld from production on account of personal income tax rates, if any at all.

And with the tax code indexed for inflation since 1986, the old scourge of bracket creep  experienced by tens of millions of working households back then, is now long gone.

Likewise, owing to the Fed’s massive financial bubbles, there is virtually unlimited venture capital available in the U.S. economy today for any good idea that comes along — and endless numbers of bad ones, too.

At the end of the day, the Laffer Curve — meaning lower marginal tax rates produce much higher tax revenues — has essentially gone missing. Owing to the Fed’s systematic falsification of financial asset prices for three decades now, the overwhelming share of the $63 trillion gain in financial assets values in the U.S. since 1987 has been captured by the top 15% of households, which own most of the financial assets.

Lowering marginal tax rates a few points won’t give them any more incentive to produce.

To be sure, the current situation won’t last. The traumatic day of reckoning is coming when the current era of central bank driven Bubble Finance finally crashes for the last time. But in the interim, tax cuts are not going to pay for themselves in higher growth.

The way to address the real barrier to growth is to clean house at the Fed and get the burden of payroll taxation off 140 million wage and salary workers in the American economy.

By contrast, the Donald’s most recent tax plan will be DBA (dead before arrival) even sooner than the he reaches his vaunted 100 Day mark.

And, besides, it would be an absolute fiscal disaster if by some miracle it were actually enacted into law.

Regards,

David Stockman
for The Daily Reckoning

We may have a government shutdown on Friday after all as the Democrats raised new positions. Trump will never include government subsidies for Obamacare.  He is non committal n the funding for medicare for Puerto Ricans:

(courtesy zero hedge)

Mulvaney On Latest Government Shutdown Status: “I’m Not Sure What’s Happening”

Earlier this week, courtesy of Trump’s latest flip-flop on the border wall, it looked as though a path had been cleared for a bi-partisan funding bill to be passed that would avert a government shutdown starting Friday night.

That said, it seems that Democrats may actually be eager to force a government shutdown after all.  As budget director Mick Mulvaney explained to CNN last night, after giving in on border wall funding, something Dems defined as a critical issue to avert a shutdown, Democrats have apparently gone radio silent.

Tapper:  “And there will be an agreement, you think?”

 

Mulvaney:  “I hope so.  Here’s what concerns me.  We informed the democrats yesterday that we were not going to insist, for now, on bricks and mortar [for the border wall].  We’re going to move that discussion to September of this year for fiscal year 18.  And we thought that was going to get a deal done. And we’ve not heard anything from them today.  So, now i’m not so sure what is happening.  I’d be curious to ask the democrats where they stand on a shutdown right now because we thought we had a deal as of yesterday.”

 

As Reuters points out, now that funding for the border wall is off the table, democrats are suddenly far more interested in securing funding for healthcare subsidies and Puerto Rico’s Medicaid program.

The most powerful Democrat in the Senate, Chuck Schumer, said on Tuesday his party is concerned about the ratio of increase in defense and non-defense spending. Democrats prefer a one-to-one ratio, and boosting both sides of the budget equally could become a sticking point in negotiations.

 

Democrats also want provisions for more healthcare coverage for coal miners and appropriations for healthcare subsidies. Health insurance would abruptly become unaffordable for 6 million Americans who rely on cost-sharing subsidies under the national health plan commonly called Obamacare.

 

Democrats have been seeking immediate assistance for a funding gap in Puerto Rico’s Medicaid program, federal health insurance for the poor, saying it is in such bad shape that 1 million people are set to lose healthcare.

But, as Mulvaney noted above, Trump has vowed to cut off Obamacare subsidies, at least until this next flip, and Democrats seemingly raised the Puerto Rico issue out of no where.

Mulvaney also said Trump would not agree to including Obamacare subsidies in a spending bill.

 

He told CNN that Democrats “raised Puerto Rico for the first time a couple of days ago,” but did not give Trump’s stance on the Medicaid assistance.

Of course, it’s only logical that Democrats would secretly want a government shut down.  In the end, Republicans (i.e. the fiscally conservative party that is generally looking to reduce entitlements rather than increase them) typically tend to take the brunt of the public backlash for government shutdowns and all of the media coverage provides a very effective bully pulpit for liberals.  Well played, Chuck and Nancy.

end

It appears that they are going nowhere. They may agree to a one week funding bill.  With Trump no longer asking for the Wall funding now, the Democrats seems to be asking for blood

(courtesy zero hedge)

 

House May Pass One Week Funding Bill To Avoid Shut Down As Negotiations Stall

It appears that contrary to expectations that Trump caving on the border wall would assure a US government shutdown is averted, Reuters reports the U.S. House of Representative could move soon to consider a stop-gap “can kicking” bill to fund the government for a week to avoid a shutdown at midnight on Friday and buy time to strike a deal for a long-term funding plan.

Reuters cited a House Republican source who said that a one-week bill would give lawmakers “a little breathing room” to complete negotiations on broader legislation, although it is unclear why if Democrats haven’t agreed with core GOP principals, they would agree next Friday.

Meanwhile, Democrats have said they would support a weeklong extension only if a deal on a longer-term plan was close to completion, and while a senior House Republican suggested that was the case, we very much doubt it.

“We could get there today, we are not very far away,” Representative Tom Cole, a member of the House Appropriations Committee, told reporters.

Translation: we are very, very far away.

 

House May Pass One Week Funding Bill To Avoid Shut Down As Negotiations Stall

It appears that contrary to expectations that Trump caving on the border wall would assure a US government shutdown is averted, Reuters reports the U.S. House of Representative could move soon to consider a stop-gap “can kicking” bill to fund the government for a week to avoid a shutdown at midnight on Friday and buy time to strike a deal for a long-term funding plan.

Reuters cited a House Republican source who said that a one-week bill would give lawmakers “a little breathing room” to complete negotiations on broader legislation, although it is unclear why if Democrats haven’t agreed with core GOP principals, they would agree next Friday.

Meanwhile, Democrats have said they would support a weeklong extension only if a deal on a longer-term plan was close to completion, and while a senior House Republican suggested that was the case, we very much doubt it.

“We could get there today, we are not very far away,” Representative Tom Cole, a member of the House Appropriations Committee, told reporters.

Translation: we are very, very far away.

S and P releases the chaos in the Bricks and mortar problems in the uSA..they list 10 publicly traded retailers that will file for bankruptcy net:

(courtesy Sand P /zerohedge)

S&P: These Ten Retailers Will File For Bankruptcy Next

Three weeks ago, we reported that Fitch had put together a list of 8 retailers who were likely next in line to file for bankruptcy. The rating agency speculated that distressed legacy “bricks and mortar” outlets such as 99 Cents Only, rue 21, Gymboree and True Religion would follow what has already been a historic surge in retailers filing for Chapter 11 protection and/or shuttering stores. The Fitch list is below:

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

Putting this list in context, over the weekend we presented a chart from Credit Suisse showing that on an annualized basis, some 8,640 – or more – stores would be closed in 2017, the highest number on record.

As we further showed, the number of announced store closures so far in 2017 – whether in bankruptcy or otherwise – is already staggering:

Additionally, as the WSJ previously observed, the number of bankruptcies so far this year has already come close to the total in 2016, with 14 retailers filing compared with 18 last year.

And it’s only just beginning.

Taking a cue from their peers at Fitch, analysts at S&P Global Market Intelligence likewise released a list of 10 publicly traded retailers they consider most at risk of default within the next 12 months. As the WSJ notes, the firm’s analysis is based on industry factors, such as intensity of competition and barriers to entry, as well as company-specific metrics.

“The shift to online shopping has left a lot of financial distress in its wake,” Jim Elder, director of risk services at S&P, wrote in a research note. “The results from the first quarter do not suggest that a quick recovery is on the horizon.” As expected, some (surprisingly not all) retailers disputed S&P’s analysis; the rest pointed to previous statements or didn’t respond to requests for comment.

Also notable: while there were some similarities between the Fitch and S&P lists, namely Sears, most of the names in the two lists diverged, suggesting that between Fitch and S&P up to 17 retailers may be going under soon.

Here’s S&P’s ranking, courtesy of the WSJ:

1. Sears Holdings Corp.

Sears has been buying time by making cost-saving maneuvers that include the sale of its Craftsman brand and the closure of 150 stores. On Friday, the retailer said it would shutter 92 Kmart pharmacies and 50 Sears Auto locations this year. Sears “is determined to remain a viable competitor in retail and we are taking all necessary actions to improve our performance,” said a spokesman for the company.

2. DGSE Companies Inc.

The Dallas-based seller of precious metals and jewelry has been struggling with declining sales. It has a market value of about $43 million. Following a leadership change in December, the company said it “eschewed the unsuccessful strategies of recent years” and expects to post a profit in the first quarter for the first time in four years.

3. Appliance Recycling Center of America Inc.

The recycler and seller of household appliances, with about 18 retail locations under the ApplianceSmart banner, has a market value of less than $10 million.

4. The Bon-Ton Stores Inc.

The department store chain, with dual headquarters in Milwaukee, Wis., and York, Pa., reported a $63 million loss in 2016 and expects comparable sales to decline in 2017. It operates about 263 stores. Although it had more than $2.5 billion of revenue last fiscal year, it has a $13 million market value.

5. Bebe Stores Inc.

The mall-based women’s apparel chain, which was popular for its fitted clothing in the early 2000s, has suffered from declining foot traffic and a consumer shift toward more subtle styles. Last week, the company said it would close its remaining 168 locations and only sell online.

6. Destination XL Group Inc.

The chain sells men’s big and tall apparel in about 344 stores. The company said in March it would slow store expansion, increase marketing spending and improve its digital operations. It projected a net loss for 2017 on about $470 million to $480 million in revenue. “We strongly believe the analysis by S&P Global Research is misguided and does not in any way, shape, or form fairly represent our company’s current financial position,” said David Levin, CEO of Destination XL. “Our financial condition is extremely healthy.”

7. Perfumania Holdings Inc.

The specialty retailer, which sells perfumes and fragrances, has been facing dwindling foot traffic to its stores in malls and tourist-dependent areas. The company has a market cap of about $14 million.

8. Fenix Parts Inc.

A small reseller of automotive parts reclaimed from damaged vehicles. It has a market value of less than $25 million.

9. Tailored Brands Inc.

Tailored Brands, which primarily sells men’s apparel, has been struggling amid increased competition from several e-commerce players. Comparable sales at Men’s Wearhouse, the company’s largest brand, fell 2.2% in the fourth quarter and are expected to decline in fiscal 2017. Shares are down nearly 50% this year. The S&P’s analysis is “extremely misleading” because it “does not take into account debt maturities and our first debt maturity is not until 2021,” a company spokeswoman said.

10. Sears Hometown and Outlet Stores Inc.

The retailer, which was spun off from Sears Holdings in 2012, closed 160 stores in fiscal 2016 as part of an effort to cut costs. As of Jan. 28, the company or its independent dealers and franchisees operated a total of 1,020 stores. It had $2 billion in revenue last fiscal year, but has lost money for three straight years.

end

 

Wall Street extremely nervous with the results of US Steel and one analyst considers it a “nightmare on Elm Street”

Will Trump attack China’s steel industry?

(courtesy zero hedge0

Wall Street Throws Up On US Steel’s “Nightmare On Elm Street” Results

Yesterday when commenting on the abysmal results and even worse guidance by steel giant US steel, which cut its 2017 guidance by more than half, now expecting 2017 net earnings of approximately $260 million, or $1.50 per share, more than 50% below the prior forecast of $3.08, we asked “if X cuts EPS by 50% in “improving” market conditions, one wonders what EPS would look like if conditions were actually worse.”

This morning, with X plunging 18% in pre-market trading as Wall Street struggled to understand the reasons behind its earnings miss and guidance cut, the sellside is out, screaming for blood. While some analysts said the steelmaker may be facing company-specific issues, the results also dragged down competitors including ArcelorMittal and Nucor. Axiom’s Gordon Johnson, who has the only sell rating on the stock, said the company has worse to come.

Below, courtesy of Bloomberg is a summary of the reactions to US Steel’s numbers, which if nothing else, will likely prompt Trump to be even more aggressive in seeking trade remedies from China which over the past two years has been dumping its own steel on the US market with gusto.

U.S. HRC Spot Price vs. Chinese HRC Spot Price – U.S. Premium = $244 (courtesy of Axiom)

AXIOM (Gordon Johnson)

  • If things are so bad during good times, 2Q-4Q is set to resemble a “Nightmare on Elm Street”
  • Applying market’s 2017 4x Ebitda multiple implies a fair value of $21/share for X
  • Next move in U.S. steel industry fundamentals is lower, given scrap prices now in full-on correction mode, negative seasonality around the corner for U.S. steel mills, iron ore price declines, rising steel imports and correction in coking coal prices
  • Reiterates sell

JEFFERIES (Seth Rosenfeld)

  • Operational issues and a myriad of other headwinds pressured flat rolled results which drove the “abysmal results”
  • Management’s asset revitalization plans may be the best long-term strategy, but disruption caused by these efforts will ultimately cap X’s ability to participate in currently favorable markets
  • X’s post-market trading on April 25 implied shares were trading at ~4.9x X’s revised $1.1b Ebitda guidance, or just below $26/share, which is slightly above Jefferies $25/share downside scenario

MORGAN STANLEY (Evan Kurtz)

  • Reasons behind guidance cut are unclear
  • Would think that faster asset revitalization program should lead to increased spending, but that’s not the case; will be looking for the company to provide more clarity on this issue
  • Struggling to understand how costs moved up so much in 1Q

BMO (David Gagliano)

  • All of X’s shortfall was in core U.S. flat-rolled segment results
  • $1.1b of Ebitda implies $24-$30 share price, assuming 4.5x-5.5x Ebitda
  • The magnitude of the miss once again highlights underlying unprecedented earnings volatility for the company, even when compared with its high-beta steel making peers

KEYBANC (Phil Gibbs)

  • Expect meaningful weakness in shares today
  • On an apples-to-apples basis, guidance cut includes positive reclassification of $175m in cost and $160m of incremental Carnegie Way savings, making “true apples-to-apples” mark- to-market 2017 Ebitda guidance cut to be ~29% to $925m vs reported $1.1b

MACQUARIE (Aldo Mazzaferro)

  • Magnitude of year EPS guidance cut is even larger than first apparent; new guidance of $1.50 includes previously outlined $0.60 gain from lower operating expenses, due to new accounting policy, thus adj. EPS guidance would actually be 90c
  • Given recent report and revised guidance, remain concerned that X’s high-fixed costs, amplified by weak volumes and pricing, will continue to keep earnings under pressure

Source: Bloomberg

END

The Freedom Caucus now confirms supports for the revised Obamacare.  Now that the fringe ultra conservatives have been satisfied, we guess that the centrists on this health care will abandon it

(courtesy zero hedge)

Freedom Caucus Confirms Support For Revised Obamacare Replacement Bill

Moments ago the House Freedom Caucus announced their support for a revised version of an Obamacare replacement bill that includes the so-called “MacArthur Amendment.”  Here is the official statement from Freedom Caucus Chair Mark Meadows:

“Over the past couple of months, House conservatives have worked tirelessly to improve the American Health Care Act (AHCA) to make it better for the American people. Due to improvements to the AHCA and the addition of Rep. Tom MacArthur’s proposed amendment, the House Freedom Caucus has taken an official position in support of the current proposal.

 

The MacArthur amendment will grant states the ability to repeal cost driving aspects of Obamacare left in place under the original AHCA.  While the revised version still does not fully repeal Obamacare, we are prepared to support it to keep our promise to the American people to lower healthcare costs. We look forward to working with our Senate colleagues to improve the bill. Our work will continue until we fully repeal Obamacare.”

 

Mission statement of the House Freedom Caucus:

 

“The House Freedom Caucus gives a voice to countless Americans who feel that Washington does not represent them. We support open, accountable and limited government, the Constitution and the rule of law, and policies that promote the liberty, safety, and prosperity of all Americans.”

NEWS: Freedom Caucus announces support for AHCA with Rep. MacArthur’s amendment included. Statement: https://meadows.house.gov/media-center/press-releases/house-freedom-caucus-announces-support-for-house-ahca-bill-with 

House Freedom Caucus Announces Support for House AHCA Bill with MacArthur Amendment

  Washington, D.C. — The House Freedom Caucus released the following statement on the American Health Care Act:”Over the past couple of months, House conservatives have worked tirelessly to improve…

meadows.house.gov

 

As we noted previously, the “MacArthur Amendment” (summarized here) effectively allows individual states to ‘opt out’ of certain Obamacare regulations which require minimum coverage and restrict the ability to insurers to charge varying rates based on an individual’s health.

Of course, only time will tell if appealing to the more conservative wing of the Republican party will now result in defections of more centrist votes.  As John Boehnor said best, “Republicans have never, ever, not once agreed on what a healthcare bill should look like.”

end

 

Let us close tonight with this interview of Craig Hemke by Greg Hunter

(courtesy Greg Hunter/usa watchdog)

Trump Feel Good Financial Narrative Crumbling-Craig Hemke


By Greg Hunter’s USAWatchdog.com
 

Financial writer Craig Hemke is looking beneath the pie in the sky high stock market to the shaky foundation that is trying to hold up the so called “Trump Bump.” Hemke says the “generally accepted narrative” is failing and points out, “If we go back a couple Fridays ago, the March employment report was terrible.  It was something like 88,000 jobs.  The latest other data on inflation is coming in negative, not just below expectations, but negative inflation.  So, this whole generally accepted narrative is crumbling.  The other part of it was higher interest rates and a stronger dollar.  The dollar is down 3% or 4% year-to-date.  So, that ain’t working too well.  With the idea of higher interest rates, yeah, the Fed has increased the short end . . . but everything from 2-year to 5-year to 10-year to 30-year are all down.  That’s just flattening the yield curve, and anybody that has taken Econ 101 knows that is a precursor to recession.  So, this whole notion that this is a layup and Trump is going to cut taxes and spend all this money and the economy is going to boom . . . I just think this is bunk, and I have said that from the word go this year.  It continues to play out that way. . . . The banks want this story told that everything is just fine. . . .You are told that things are going to get better.  It’s right around the corner, and it’s just not a mathematical possibility that it will.”

Hemke says the system is being propped up and is very weak and contends, “These markets are quite literally held together by . . . electronic bailing wire and digital chewing gum. . . . When you see this disconnect from economic reality, you know, hardly anybody working, record amount of people not in the labor force, the miniscule amount of growth, but yet the stock market is 21,000?   When we talk about geopolitical risk when the system is already simply held together in a binary fashion of ones and zeros, the whole thing can be brought down pretty quick.”

One of the hottest hot spots is North Korea, according to Hemke. If there is war, the death toll could be exponential.  Hemke contends, “I think Trump is looking at this and is thinking I am not going to let this North Korea thing hang over my head for four years or eight years.  Something bad is not going to happen on my watch.  As soon as his domestic agenda stalled:  health care, not going to be tax cuts this year, and infrastructure is off the boards at this point, I think Trump thought,  I am going to take care of some of this international stuff.  This is truly frightening stuff.  There are 20 million people that live in Seoul (South Korea) and the North Koreans have had 60 years to fortify its positions with artillery guns and all that stuff.  If something, anything happens that starts the shooting over there . . . you are not going to be able to take out all those fortified positions in a day’s worth of bombing raids.  You’ve got 20 million people in range of North Korean artillery.  We are talking loss of life on a scale we have not seen since World War II. . . .Gold may go up, but this is not why or how we would want gold to go up.  This is a frightening situation.  There are three events this week.  Only one I have ever seen happening before.  Yesterday, Trump invited every ambassador that sits on the UN Security Council to come to the White House for lunch.  I have never seen that happen before.  Trump is having all 100 U.S. Senators for a briefing from Trump, the Secretary of Defense, the Secretary of State and the Head of the Joint Chiefs.  I have never seen all 100 Senators briefed this way.  Lastly, Secretary of State Tillerson is chairing a meeting of the UN Security Council on Friday.”

Hemke says the last time a U.S. Secretary of State chaired a meeting with the UN Security Council was just before the U.S. invaded Iraq.

Join Greg Hunter as he goes One-on-One with precious metals expert and financial writer Craig Hemke of TFMetalsReport.com.

(There is much more in the video Interview.)

After the Interview:  

Well that about does it for tonight

I will see you tomorrow night

H.

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