May 3/ANOTHER RAID ON GOLD AND SILVER ESPECIALLY AFTER FOMC STATEMENT/THE AMT OF SILVER STANDING AT THE COMEX IN MAY HAS INCREASED AGAIN AND NOW STANDS AT OVER 19 MILLION OZ/USA SENDS A MESSAGE TO NORTH KOREA WITH THE LAUNCHING OF THE MINUTEMAN III/CHINA GIVES ONE LAST ULTIMATUM TO NORTH KOREA/NORTH KOREA REBUKES CHINA FOR “THEIR BETRAYAL”/ UK ISUNDERSTANDILBY UPSET AT THE 100 BILLION EURO DIVORCE BILL HANDED TO THEM/PUERTO RICO OFFICIALLY SEEKS BANKRUPTCY PROTECTION AND MAY HAVE TO LIQUIDATE ASSETS/FOMC HIGHLIGHTS/

Gold: $1246.40  DOWN 8.70

Silver: $16.49  DOWN 34  cent(s)

Closing access prices:

Gold $1237.50

silver: $16.48!!!

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: $1264.95 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1256.40

PREMIUM FIRST FIX:  $8.55

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SECOND SHANGHAI GOLD FIX: $1264.10

NY GOLD PRICE AT THE EXACT SAME TIME: 1253.95

Premium of Shanghai 2nd fix/NY:$9.25

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1253.95

NY PRICING AT THE EXACT SAME TIME: $1253.80

LONDON SECOND GOLD FIX  10 AM: $1255.45

NY PRICING AT THE EXACT SAME TIME. $1254.85

For comex gold:

MAY/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  8 NOTICE(S) FOR 800 OZ. 

 TOTAL NOTICES SO FAR: 35 FOR 3500 OZ    (.1088 TONNES)

For silver:

For silver: MAY

535 NOTICES FILED TODAY FOR 2,675,000  OZ/

Total number of notices filed so far this month: 2713 for 13,565,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

FEDERAL RESERVE EAR MARKED GOLD REPORT for April

In Feb we had $7,841,000 worth of gold housed at the FRBNY valued at 42.21 dollars per oz

Last month: we had the same;  $7,841,000  of gold valued at 42.21

thus 0 oz of gold moved out.

END

The key event today is the rising amount of silver that is standing at the comex.  It has now risen above what was standing on day one, first day notice, April 30.  On that day 16.8 million oz stood for delivery and for 3 consecutive days it has risen to 19.1 million oz.  We have not seen that before.

As far as the raid today, most of the damage has been done in the access market.  They are afraid to whack during regular comex hours where physical transactions can occur.

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest FELL BY 4883  contracts DOWN to 189,240 WITH THE SLIGHT RISE IN PRICE ( 1 CENT) SILVER TOOK WITH RESPECT TO YESTERDAY’S TRADING. As you will see below, we must have had considerable considerable covering of banker shorts yesterday.  In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.946 BILLION TO BE EXACT or 135% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 313 NOTICE(S) FOR 1,565,000  OZ OF SILVER

In gold, the total comex gold FELL BY 3431 contracts DESPITE THE RISE IN THE PRICE OF GOLD ($1.80 with YESTERDAY’S TRADING). The total gold OI stands at 461,905 contracts.

we had 131 notice(s) filed upon for 13,100 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: 853.36 tonnes

.

SLV

Strange!!! We had no change in silver inventory at the SLV today..despite the huge drop in silver price

THE SLV Inventory rests at: 334.921 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 4883 contracts DOWN TO 189,240, (AND NOW FURTHER FROM  THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21 AT 234,787), DESPITE THE SLIGHT RISE IN PRICE FOR SILVER ON YESTERDAY (1 CENT). Yesterday we must have had some considerable bank short covering.

(report Harvey

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

2c) Federal Reserve Bank ear marked gold movement

(Harvey)

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 8.36 POINTS OR .27%  OR / /Hang Sang CLOSED .  The Nikkei closed/Australia’s all ordinaires  CLOSED DOWN .86%/Chinese yuan (ONSHORE) closed UP at 6.8932/Oil DOWN to 47.99 dollars per barrel for WTI and 50.77 for Brent. Stocks in Europe OPENED IN THE RED   ..Offshore yuan trades  6.8890 yuan to the dollar vs 6.8932 for onshore yuan. NOW  THE OFFSHORE IS A LITTLE STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN SLIGHTLY STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN: STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS HAPPY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA/USA

the USA sends a warning to North Korea with the release of the overnight minuteman iii ICBM launch

( zero hedge)

ii)North Korea’s plump Kim Jong-Un threatens China with “grave consequences over its betrayal

( zero hedge)

 

b) REPORT ON JAPAN

c) REPORT ON CHINA

i)China is taking no chances: they have just issued an unprecedented warning to its citizens in North Korea to return home

( zero hedge)

ii)China reportedly issues its final warning to North Korea to stop missile testing

( zero hedge)

4. EUROPEAN AFFAIRS

i)As I outlined to you in yesterday’s commentary, the EU has now given its bill to the EK for leaving the union at 100 billion euros.

As expected, the UK is quite angry and the pound falters. They should just walk away

( zero hedge/London’s Financial times)

ii)Cable (Great Britain Pound/USA dollar cross)  falls as European official have issued threats against the UK

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

The house bubble in Vancouver is back

( zero hedge)

7. OIL ISSUES

Oil tumbles again on inventory rise as well as a huge production rise
( zero hedge)

8. EMERGING MARKETS

9.   PHYSICAL MARKETS

i)The banks are trying to get out of their gold/silver fixing case.

So let me get this straight:  360,000 pages and 75 audio tapes, showing  evidence of collusion, price fixing and mega breach of trust is inadmissible???

(Law 360/GATA

ii)Craig Hemke reminds us not to play with the crooks on the comex.

( Craig Hemke/TFMetals Report)

iii)Bill Rice eloquently states why miners do not complain that their markets are rigged

( Bill Rice/GATA)

iv)A good indicator to a collapsing global economy/copper collapsing

( zero hedge)

10. USA stories

i)As I outlined to you yesterday, the one year temporary hold on bankruptcy litigation is over this weekend and as expected there are quite a few Puerto Rico lawsuits filed

( zero hedge)

ii)This is going to hurt:  Puerto Rico files for bankruptcy protection and it will be the largest ever Municipal debt restructuring

( zero hedge)

iii)Conditions are not good in Baltimore as the Feds heed to the Mayor’s plea and sends in help as “murder is out of control”

( zero hedge)

iv)Usually the ADP report is glowing with employment gaines.  However the April ADP showed only  a 177,000 gain and the lowest growth in jobs since Oct 2016:

(/ADP/zero hedge)

v)More soft data nonsense: USA services rebounds despite the slump in enployment

( zero hedge)

vi)Oh! this cannot be so!! Such good citizens rigging treasury auctions??

this is not the only thing they rig!

( zerohedge)

vii)The House may have enough votes to repeal Obamacare.  If so it may be voted upon on Saturday.  However it probably has no chance of passing in the Senate

( zero hedge)

viii)FOMC highlights

(zerohedge)

ix)  I will leave you tonight with this great interview of Axel Merk and Greg Hunter.

he is bang on with respect to China!

( Greg Hunter/USAWatchdog)

Let us head over to the comex:

The total gold comex open interest FELL BY 3431 CONTRACTS DOWN to an OI level of 461,905 DESPITE THE  RISE IN THE PRICE OF GOLD ( $1.80 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 MAY and it is one of the POORER delivery months  of the year. In this MAY delivery month  we had A LOSS OF 83 contract(s) FALLING TO 335. We had 8 notices filed yesterday so we again lost 75 contracts or an additional 7500 oz were cash settled through the EFP route where they receive a cash bonus plus a future gold contract.

The next big active month is June/2017 and here the OI LOST 6445 contracts DOWN to 317,268.  The non active July contract gained another 62 contracts to stand at 96 contracts. The next big active month is August and here the OI gained 1996 contracts up to 57,250.

We had 131 notice(s) filed upon today for 13,100 oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
And now for the wild silver comex results.  Total silver OI FELL BY 4,883 contracts FROM  194,123 DOWN TO 189,240  WITH YESTERDAY’S 1 CENT PRICE RISE. We had without a doubt huge short covering by the banks which we will see in the next COT report.
We are in the active delivery month is MAY  Here the open interest LOST 357 contracts FALLING TO 1,107 contracts. MY GOODNESS!! IT HAPPENED AGAIN!! We had 535 notices filed on THIRD day notice so we gained another 178 notices or an additional 890,000 oz will stand for delivery. In the last few years, I do not believe I have ever seen an active month increase in amount standing on day 2, day 3 AND DAY 4 of the delivery cycle. No wonder JPMorgan is getting reading for a physical attack at the comex. I have never seen anything like this!!

The non active June contract lost 105 contracts to stand at 912. The next big active month will be July and here the OI lost 4102 contracts down to 149,674.

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)

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:  234,787.

We had 313 notice(s) filed for 1,565,000 oz for the MAY 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 93,318 contracts which is poor.

Yesterday’s confirmed volume was 197,144 contracts  which is good.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for MAY
 May 3/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 4725.47 oz
Delaware
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
nil oz
No of oz served (contracts) today
 
131 notice(s)
13,100 OZ
No of oz to be served (notices)
204 contracts
20,400 oz
Total monthly oz gold served (contracts) so far this month
166 notices
16,600 oz
.5163 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   28,063.7 oz
Today we HAD  0 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 Delaware:  4725.47 oz
total customer withdrawal: 4725.47 oz
 we had 0 adjustments:
For MAY:

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the initial total number of gold ounces standing for the MAY. contract month, we take the total number of notices filed so far for the month (166) x 100 oz or 16,600 oz, to which we add the difference between the open interest for the front month of MAY (335 contracts) minus the number of notices served upon today (131) x 100 oz per contract equals 37,000 oz, the number of ounces standing in this  active month of MAY.
 
Thus the INITIAL standings for gold for the MAY contract month:
No of notices served so far (166) x 100 oz  or ounces + {(335)OI for the front month  minus the number of  notices served upon today (131) x 100 oz which equals 37,000 oz standing in this non active delivery month of MAY  (1.1508 tonnes).  We lost 78 contracts or an additional 7800 oz were cash settled through the EFP route where they received a fiat bonus plus a futures contract in a private deal with the bankers.
 
 
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I have now gone over all of the final deliveries for this year and it is startling.
Here are the final deliveries for all of 2016 and the first 5 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
Nov.    8.3950 tonnes.
DEC/2016.   29.931 tonnes
JAN/2017     3.9004 tonnes
FEB/ 18.734 tonnes
March: 0.5816 tonnes
April/2017: 2.8678
MAY:2017/  1.1415 TONNES
total for the 17 months;  248.79 tonnes
average 14.634 tonnes per month
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Total dealer inventory 914,233.183 or 28.43 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,929,938.432 or 277.75 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 277.75 tonnes for a  loss of 25  tonnes over that period.  Since August 8/2016 we have lost 76 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 11 MONTHS  76 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
MAY INITIAL standings
 May 3. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 nil
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
600,019.690 oz
JPMorgan
total: 600,019.690oz
No of oz served today (contracts)
 313 CONTRACT(S)
(1,565,000 OZ)
No of oz to be served (notices)
794 contracts
( 3,970,000 oz)
Total monthly oz silver served (contracts) 3026 contracts (15,130,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month  NIL oz
Total accumulative withdrawal  of silver from the Customer inventory this month  1,908,422.1 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 0 customer withdrawal(s):
TOTAL CUSTOMER WITHDRAWALS: nil  oz
 We had 1 Customer deposits:
 i Into JPMorgan: 600,019.690 oz
JPMorgan after a one day holiday from from not hoarding silver, today they continued to add.
***deposits into JPMorgan have now continued 
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  600,019.690 oz
 
 we had 2 adjustment(s)
i)Out of the CNT vault:
455,225.282 oz was adjusted out of the customer and this landed into the dealer account of CNT
ii) Out of JPMorgan; a removal from the customer account of 60,897,360 oz as a counting error.
The total number of notices filed today for the MAY. contract month is represented by 313 contract(s) for 1,565,000 oz. To calculate the number of silver ounces that will stand for delivery in MAY., we take the total number of notices filed for the month so far at 3026 x 5,000 oz  = 15,130,000 oz to which we add the difference between the open interest for the front month of MAY (1107) and the number of notices served upon today (313) x 5000 oz equals the number of ounces standing

 

.
 
Thus the initial standings for silver for the MAY contract month:  3026(notices served so far)x 5000 oz  + OI for front month of APRIL.(1107 ) -number of notices served upon today (313)x 5000 oz  equals  19,100,000 oz  of silver standing for the MAY contract month.
We actually gained another 178 contracts or an additional 890,000 oz will stand for delivery and again nobody wished to accept an EFP contract for a fiat bonus. It probably means that the entire 19 million oz that is standing wants only physical metal and refuses a fiat bonus. This is identical to backwardation where the investor will not accept to roll to a futures month and receive a sure fiat profit but instead that investor holds onto his physical because he is not sure in the future he would receive his metal back if he engages in that future contract. WE HAVE NEVER HAD AN INCREASE IN PHYSICAL  STANDING FOR DELIVERY ON  DAY 2 ,day 3 and day 4 inclusive OF THE DELIVERY CYCLE. SOMEBODY OR SOME SOVEREIGN IS TAKING ON OUR BANKERS.  
 
 
Volumes: for silver comex
 
Today the estimated volume was 38,454 which is good 
Yesterday’s  confirmed volume was 71,730 contracts which is huge
(TODAY’S CONFIRMED. VOLUME OF 71,730 CONTRACTS EQUATES TO 358 MILLION OZ OF SILVER OR 51% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.  
 
Total dealer silver:  34.045 million (close to record low inventory  
Total number of dealer and customer silver:   197.609 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $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

1. Central Fund of Canada: traded at Negative 8.6 percent to NAV usa funds and Negative 8.4% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.1%
Percentage of fund in silver:37.8%
cash .+0.1%( May 3/2017) 
 
2. Sprott silver fund (PSLV): Premium RISES TO   -.10%!!!! NAV (May 3/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to -0.31% to NAV  ( May 3 /2017)
Note: Sprott silver trust back  into NEGATIVE territory at -.10% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.31%/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

And now the Gold inventory at the GLD

May 3/no change in inventory at the GLD/Inventory rest at 853.36 tonnes

May 2/no change in inventory at the GLD/Inventory rests at 853.36 tonnes

May 1/ no changes in inventory at the GLD/inventory rests at 853.36 tonnes

April 28/no changes in inventory at the GLD/Inventory rests at 853.36 tonnes

April 27/a small withdrawal of .89 tonnes/Inventory is now at 853.36 tonnes

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

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
May 3 /2017/ Inventory rests tonight at 853.36 tonnes
*IN LAST 143 TRADING DAYS: 94.77 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 86 TRADING DAYS: A NET  32,66 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  58.00 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

May 3/strange!! with the drop in price of silver we had no change in inventory at the SLV/inventory rests at 334.921 million oz

May 2/extremely strange again/a huge 3.502 million oz deposit into the SLV despite silver being in the toilet for the past several trading days.Inventory 334.921 million oz

may 1/extremely strange/with silver being walloped these past several days, the inventory rises again by a huge 1.136 million oz/(maybe someone can explain this phenomena??)

April 28/Strange again!! no change in inventory at the SLV/Inventory remains at 330.283 million oz  (no liquidation with a drop in silver price??)

April 27.2017/Strange!! no change in inventory at the SLV/Inventory remains at 330.283 million oz  (no liquidation???)

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
May 3.2017: Inventory 334.921  million oz
 end

Major gold/silver trading/commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Silver Bullion On Sale After 10.6% Fall In Two Weeks

By Mark O’Byrne May 3, 2017 0 Comments

Silver Bullion On Sale After 10.6% Fall In Two Weeks

– Silver down for eleven consecutive days to $16.80/oz
– Further weakness possible and support at $15.73/oz
– Never catch a falling knife – dollar cost average
– Silver buyers love manipulative futures selling
– Thank you ‘Gold and Silver Cartel’ !

Precious metals continue to weaken, especially silver which has declined eleven consecutive days and is now down over 10.6%.

The sell off is again almost solely a result of futures market participants pushing or manipulating prices lower – depending on your view – despite no bearish silver or wider market developments or news that could be construed as bearish for silver.

It is telling that over the years, there have been very little massive silver and gold futures buying in very short periods of time which has propelled futures much higher. Why is this concentrated trading of futures always on the sell side, pushing prices to the downside?

The questions that arise once again are who was responsible for the sudden bout of selling and was it a bank or fund manipulating prices for their own book and profits or were they acting as a proxy for a central bank.

One way or the other, silver appears increasingly oversold. However, as ever with silver, rather than trying to time the exact bottom with a large lump sum investment or purchase of silver coins and bars, we would caution to “never catch a falling knife.”

Instead emulate the ‘silver stackers’ and keep gradually accumulating silver on artificial price dips.

This is what we are increasingly seeing and we tend to be very busy with silver buyers on price dips. Yesterday was no exception. Indeed, it was the busiest day for silver bullion coin sales in two months.

Silver stackers love manipulative silver futures selling as it allows them to accumulate even more silver bullion coins at discounted prices.

Thank you hedge funds, banks and or ‘Gold and Silver Cartel’ !

http://www.goldcore.com/us/gold-blog/silver-bullion-sale- 10-6-fall-two-weeks/

-END-

 

The banks are trying to get out of their gold/silver fixing case.

So let me get this straight:  360,000 pages and 75 audio tapes, showing  evidence of collusion, price fixing and mega breach of trust is inadmissible???

(courtesy : Law 360/GATA

Banks say gold price-fixing data errors entitle them to do-over

Section:

By Cara Mannion
Law 360, New York
Monday, May 1, 2017

NEW YORK — Barclays and three other banks told a New York federal court Monday that they didn’t waste its time when requesting a second shot at tossing a case over their alleged conspiracy to manipulate the price of gold, saying investors’ use of flawed data in the suit justifies a do-over.

Barclays Bank PLC, HSBC Bank PLC, Societe Generale, and the Bank of Nova Scotia again asked the court for permission to renew their dismissal bid, fighting against investors who say their suit still supports allegations of collusive trading even after admitting the complaint included flawed data analyses.

“Plaintiffs’ suggestion that defendants ‘should accept th[e] result’ of the motion to dismiss and ‘move on’ despite newly discovered falsehoods that go to the heart of plaintiffs’ claims is not only wrong on the substance, it is also procedurally improper,” the banks said.

Investors originally filed their putative class action in March 2014, alleging the banks conspired to manipulate the London gold fix, a benchmark used to determine the price of gold and gold derivatives. A New York federal judge upheld claims against the banks in October, finding there was circumstantial evidence that they agreed to restrain trade.

The three banks pushed last week for another shot to dismiss the case, saying the allegations are based on statistical evidence with “material errors.” Rerunning the analysis after correcting these errors shows “no statistically significant difference” between the banks’ pricing before and after the collusion allegedly ended, thus disproving the suit’s claims, they said.

But the investors fired back in a letter Friday, saying minor coding errors in the complaint’s statistical evidence don’t warrant another round of dismissal motions.

“Defendants had a motion to dismiss, and they lost,” the putative class said. “They should accept that result and move on. They provide absolutely no legal support for the notion that they should get to ‘move again’ based on a minor coding error in one chart in the complaint.”

These supposed errors don’t constitute a pleading defect, and the data still fully supports allegations of collusion, the investors said. The banks wasted the court’s time and resources by criticizing the data’s underlying assumptions, which investors said should instead be hashed out during the case’s expert phase, according to their letter.

Daniel L. Brockett, counsel for the investors, told Law360 on Monday that the banks are “making a much bigger deal” than what’s really at issue.

“Attacking an expert study in the complaint because they disagree with the assumptions is not a valid argument,” he said. “That’s not something they get to do at this stage.”

But the banks said Monday that they aren’t challenging the “irrational methodologies” that produced the data. Instead, the banks argued that the corrected data shows there was no statistically significant change in pricing between 2001 and 2012, which they say defeats the conspiracy claims’ entitlement to an assumption of truth.

“Actually performing the analyses plaintiffs claimed to have performed (until they were confronted with their error) produces a fundamentally different result that contradicts plaintiffs’ allegations and renders their claims unsustainable,” the banks said.

An attorney for Barclays declined to comment Monday.

The investors and traders are represented by Merrill G. Davidoff of Berger & Montague PC and Daniel L. Brockett of Quinn Emanuel Urquhart & Sullivan LLP.

Barclays is represented by Michael S. Feldberg, Todd S. Fishman, and Brian Fitzpatrick of Allen & Overy LLP. HSBC is represented by Leah Friedman and Scott Eisman of Freshfields Bruckhaus Deringer US LLP and Michael A. Brille and Jessica E. Phillips of Boies Schiller Flexner LLP. Societe Generale is represented by Marc J. Gottridge, Dennis H. Tracey III and DeNae M. Thomas of Hogan Lovells US LLP. The Bank of Nova Scotia is represented by Stephen Ehrenberg and Kenneth M. Raisler of Sullivan & Cromwell LLP.

The case is In re Commodity Exchange Inc. Gold Futures and Options Trading Litigation, case number 1:14-md-02548, in the U.S. District Court for the Southern District of New York.

END

Craig Hemke reminds us not to play with the crooks on the comex.

(courtesy Craig Hemke/TFMetals Report)

TF Metals Report: Comex crime scene mechanics

Section:

9:06p ET Tuesday, May 2, 2017

Dear Friend of GATA and Gold:

The TF Metals Report’s Craig Hemke today reminds investors that if they play in the silver futures market against bullion banks that can create infinite imaginary supply of the monetary metal, they are going to lose, and though the market is rigged, government regulators are not going to do anything about it. Hemke’s analysis is headlined “Comex Crime Scene Mechanics” and it’s posted at the TF Metals Report here:

https://www.tfmetalsreport.com/blog/8313/comex-crime-scene-mechanics

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

end

 

Bill Rice eloquently states why miners do not complain that their markets are rigged

(courtesy Bil Rice/GATA)

Bill Rice Jr.: Silver miners must know their market is rigged but are too afraid to protest

Section:

By Bill Rice Jr.
Tuesday, May 2, 2107

As silver is again being pushed down hard and good for no market-related reason, I can’t help but wonder what the mining company executives are thinking. One thing we know. They won’t protest. Two reasons are typically given for this “grin and bear it’ attitude:

1) The bullion banks doing the rigging also provide the miners’ much-needed financing. The miners can’t get on the wrong side of these guys.

2) Governments supporting the rigging also can harm mining companies in any number of ways, such as permitting, environmental regulations, OSHA-type violations, audits, etc.

I’ve come to believe that the miners know that their markets are rigged but they are simply afraid to protest this. They fear retaliation.

Now think about this. If my assumption is accurate, the miners know that these two groups are suppressing the price of their product. They also know that they can’t say anything. If they do, one or both of these groups will come after them. Is this not an acknowledgment that manipulation is taking place? That is, if the miners did not fear such retaliation, would they not be screaming bloody murder?

They can’t blame the banks or the government because the banks and the government could put them out of business.

Another way of stating this is the miners know that manipulation is important to the bullion banks and to governments. The miners know that they should not do anything that would interfere with a program so important to these groups. In their view, challenging such entities would probably be the equivalent of committing corporate suicide.

Summarizing: There are two common-sense reasons given for the miners’ refusal to defend themselves. Both involve fear of reprisal/retaliation. Miners cannot attack governments or bullion banks without great risk of harm to their companies. Miners are not unlike the shop owner paying tribute to the Mafia in a city whose justice system is controlled by the Mafia.

The governments and the bullion banks are bullies who threaten the existence of anyone who might challenge their goals or call them out.

This, I believe, is the unspoken secret of the manipulation. Of course the miners know who is working against the interest of their employees and shareholders. They are simply afraid of them. And, probably, rightly so (a frightening acknowledgement of the Mafia-type tactics powerful and “honorable” players in our system are willing to employ, or at least tacitly threaten.)

Also, as top managers of mining companies are paid very well, they have even less of an incentive to take a chance and fight back. These people live very comfortably even as the price of their product is kept lower than it would be in a free market.

Of course, the bullion banks and the agents of government orchestrating the manipulation know that the mining companies fear them and will not say a word.

The mainstream news organizations aren’t going to write anything. The politicians aren’t going to hold any hearings. The regulators know to look the other way. The miners themselves aren’t going to utter a word in protest. The bullion banks and governments manipulation the monetary metals markets simply because they can.They have seemingly covered all their bases. All the potential threats to this operation have neutralized.

—–

Bill Rice, Jr. is a freelance journalist in Montgomery, Alabama. He has been publisher and managing editor of newspapers in Troy and Montgomery, Alabama, and has written many commentaries for precious metal internet sites.

end

 

A good indicator to a collapsing global economy/copper collapsing

(courtesy zero hedge)

Copper Is Crumbling After Stockpiles Surge

After reaching one month highs on Monday, copper futures prices have tumbled to near 3-week lows amid slowing China credit impulse-driven economic signals (PMIs weak) and a surge in LME stockpiles.

  • *LME COPPER STOCKPILES JUMP 12%, MOST SINCE MARCH 9

And the market reacted…

Additionally, as Bloomberg reports, There are also more signs of slack spot demand: immediate delivery copper’s discount to the three-month contract on the LME has widened 28 percent this week. Bigger inventories and the loosening of the copper price curve are at odds with forecasts that the copper market will move into deficit this year, Leon Westgate, an analyst at Levmet U.K. Ltd., said by phone.

“Judging by the price action and the movement in the spreads, it looks like the market might have been anticipating these deliveries,” he said.

As Guy Wolf, a London-based analyst at Marex Spectron Group, noted:

“It is about whether the tide of liquidity is going in or out, not the latest anecdote about Chinese demand or comment from a Chilean union official.”

“We think we’ll see a more sizable slowdown out of China,” says Edward Meir, an analyst at INTL FCStone in NY
“We’re a little bearish on copper for May”

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 SLIGHTLY STRONGER  6.8935(   REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES STRONGER TO ONSHORE AT   6.8890/ Shanghai bourse CLOSED DOWN 8.36 POINTS OR .27%   / HANG SANG CLOSED 

2. Nikkei closed   /USA: YEN RISES TO 112.21

3. Europe stocks OPENED ALL IN THE RED        ( /USA dollar index RISRS TO  99.11/Euro DOWN to 1.0908

3b Japan 10 year bond yield: RISES TO   +.021%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.21/ 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::  47.99 and Brent: 50.77

3f Gold DOWN/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  +.322%/Italian 10 yr bond yield DOWN  to 2.269%    

3j Greek 10 year bond yield FALLS to  : 6.01%   

3k Gold at $1254.00/silver $16.81 (8:15 am est)   SILVER ABOVE  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 21/100 in  roubles/dollar) 57.25-

3m oil into the 47 dollar handle for WTI and 50 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 REVALUATION NORTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.21 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  .9909 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0809 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 FALLS to  +.328%

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 2.298% early this morning. Thirty year rate  at 2.98% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Global Stocks Dip On Poor US Auto Sales, Apple Miss; Fed Decision On Deck

European, Asian stocks and S&P futures all fall as investors digested poor overnight news on Apple earnings and U.S. car sales, while the dollar rose in muted trading as investors contemplated chances of another rate hike next month ahead of today’s Federal Reserve statement.

Europe’s Stoxx 600 fell from a 20 month high as traders sold risk after poor earnings from Apple and a 4th consecutive month of declining U.S. car sales, while the dollar strengthened before a Federal Reserve meeting where policy makers will need to mull over another soft patch in the U.S. economy. European Apple suppliers were among the biggest losers in the broader Stoxx 600 Index, with Dialog Semiconductor dropping as much as 6.2% before recovering losses.

Poor April auto sales in turn hit industrial metals which pushed commodity producers for a third day. Falls in the price of copper, iron ore and other metals also underlined growing nerves over China and, with oil prices stuck near recent lows, weighed on Europe’s commodity-heavy indices.

“These numbers point to U.S. consumers becoming more cautious and do seem like a source of some of the weakness today,” said Andy Sullivan, a portfolio manager with GL Asset Management UK in London. “Autos, tech and basic resources are leading Europe lower.”

A bond rally in peripheral Europe was led by Italy while closed markets in Japan, South Korea and Hong Kong limited trading in Treasuries, which weakened at the start of European hours.

And then there is today’s Fed statement. As a reminder, markets now price in a 60% probability of a June rate hike, however weak U.S. economic numbers in the past month have cast some doubt on this. As a result, traders will be keenly looking at hints by Yellen whether the recent bout of economic weakness will be seen by the Fed as merely temporary.

According to DB, there is unlikely to be much new information in this month’s FOMC statement. DB’s Peter Hooper believes that the risk, albeit a small one, is that they will come closer to moving in a tightening direction than currently expected. More will be learned on that score in post-meeting Fedspeak (for which there are a number of speakers due on Friday including Fed Chair Yellen) or the minutes to the meeting. In terms of the finer details, Peter highlights that the Committee should be able to get away with relatively minor changes in the discussion of recent developments. They can acknowledge the soft GDP print and consumer spending in particular. That said they should also downplay this softness given the known issues with seasonality. On the inflation front, indicators have trended modestly higher on balance, notwithstanding a softening in core inflation in March driven by the anomalous drop in mobile phone services prices. The YoY change in the core PCE price index was running just modestly below the Committee’s 2% objective through Q1. An up-drift in most measures of wage inflation over the past couple of years confirm that the labor market has been in the vicinity of full employment for a while now. Market measures of inflation expectations have eased on balance since the March FOMC meeting, though they have rebounded recently. In summary, with market expectations for a June hike running at 67% according to Bloomberg’s calculator (and just 13% for a May hike) there will probably not be a need to push these expectations higher at this point. But any net changes in the statement are more likely to be read as hawkish rather than dovish, simply because the current and near-term prospective mix of economic developments probably moves them closer to their next rate hike, which DB expects will be in June

Back to markets, where after a mixed Asian session, with Japan, SKorea and HK closed, the MSCI global share index was marginally lower on the day. Satoshi Okagawa, senior global markets analyst for Sumitomo Mitsui Banking Corporation in Singapore, said the weak U.S. auto sales could make market participants wary of actively buying the dollar against the yen for now. “Concerns about geopolitical risks such as North Korea had weighed on the dollar against the yen recently … But the focus is shifting to whether the (strength) of U.S. economic fundamentals is for real,” he said. “There is more data coming up including the jobs data, so those need to be watched closely,” Okagawa said, referring to the U.S. nonfarm payrolls report due on Friday.

Euro Stoxx 600 fell 0.2 percent as of 10:37 a.m. in London, with losses led by miners; Futures on the Nasdaq 100 gained 0.1 percent. S&P 500 futures retreated 0.2% after the underlying gauge rose 0.1% Tuesday.

The Bloomberg Dollar Spot Index rose, reversing Tuesday’s fall, as traders covered some shorts in the currency even though options suggested the Federal Reserve policy decision will fail to excite markets. Bloomberg notes that amid low volumes and below-average liquidity with Japan closed for holidays, fast-money accounts were seen cutting part of their dollar-short positioning in the London session, according to foreign-exchange traders in the region. Investors expect marginal language shifts, if any, by the Fed and an unwillingness to commit to a June hike. Tier-one data out of the U.S. are to be released in the weeks ahead, including employment and inflation figures, which makes a case for policy makers to adopt a fully flexible approach. Options reflect subdued expectations on the Federal Open Market Committee decision and communique: overnight volatility in euro-dollar peaked earlier at 12.41 percent, the second-lowest reading on any announcement day since 2016

Meanwhile WTI rebounded overnight, as futures bounced back from lowest level in 6 weeks. Brent also gained trading around $51after Russia said to back extension to output cuts. Yesterday’s API data are “keeping a bid in the market as we await confirmation of these numbers,” said Jens Pedersen, senior analyst at Danske Bank. “There had been bearish sentiment as the market has become a bit more concerned about the extension of cuts” As a reminder, API reported inventories down 4.16MMBbl, with gasoline 1.93MM barrels lower.

Carlyle, Estee Lauder, Humana are among companies reporting earnings. The main event is the Fed’s rate announcement at 2pm; there is no Yellen press conference this month.

Market Snapshot

  • S&P 500 futures down 0.2% to 2,381.75
  • STOXX Europe 600 down 0.2% to 388.89
  • MXAP down 0.1% to 149.79
  • MXAPJ down 0.2% to 489.58
  • Nikkei up 0.7% to 19,445.70
  • Topix up 0.7% to 1,550.30
  • Hang Seng Index up 0.3% to 24,696.13
  • Shanghai Composite down 0.3% to 3,135.35
  • Sensex up 0.04% to 29,934.31
  • Australia S&P/ASX 200 down 1% to 5,892.34
  • Kospi up 0.7% to 2,219.67
  • German 10Y yield fell 0.6 bps to 0.322%
  • Euro down 0.2% to 1.0912 per US$
  • Brent Futures up 0.9% to $50.93/bbl
  • Italian 10Y yield rose 2.4 bps to 2.011%
  • Spanish 10Y yield fell 2.4 bps to 1.63%
  • Gold spot down 0.3% to $1,253.39
  • U.S. Dollar Index up 0.09% to 99.07

Top Overnight News

  • Apple Inc. reported falling iPhone sales, highlighting the need to deliver blockbuster new features in the next edition of the flagship device if the company is to fend off rivals like Samsung Electronics Co.
  • Wall Street dealers, resigned to the prospect of a new ultra-long U.S. government bond, predict the Treasury would issue only a limited amount of the securities and pay a yield spread over existing 30-year debt
  • The euro area maintained its growth momentum at the start of 2017, strengthening the case of those pressuring the ECB to sketch out an end to extraordinary stimulus measures
  • EU chief Brexit negotiator Michel Barnier ruled out any immediate negotiations on transitional arrangements for the U.K.’s withdrawal from the bloc as he unveiled his first detailed vision of how talks will take shape
  • JPMorgan plans to move hundreds of London-based bankers to expanded offices in Dublin, Frankfurt and Luxembourg as it prepares for the U.K. to lose easy access to the EU’s single market after Brexit
  • Russia considers it sensible to extend the existing deal with OPEC to curb crude output for at least six months, given current market dynamics

Asian markets traded mixed ahead of the looming key risk events including the FOMC meeting and amid several market closures with Japanese, South Korean and Hong Kong markets shut for public holiday. ASX 200 (-0.9%) declined below the 5,900 level with telecoms weighed on by Vocus, while miners also slipped as copper prices remained pressured. The Shanghai Comp. (-0.3%) failed to benefit from a firm CNY 200bIn PBoC liquidity injection and the Taiex gained with the Apple supply chain mostly higher following the tech giant’s earning release, where Q2 EPS beat expectations but revenue and iPhone sales disappointed. PBoC injected CNY 170bIn in 7-day reverse repos, CNY2Obln in 14-day reverse repos and CNY 10bIn in 28-day reverse repos.

Top Asia News

  • Australia Stocks Drop, Dollar Becalmed Before Fed: Markets Wrap
  • BNM Says Bank Institutions Don’t Need to Maintain Reserve Fund
  • Noble Group on the Ropes Before Share Consolidation Kicks In
  • Nickel Sinks as Philippines’ Lopez Is Rejected by Lawmakers
  • Indian Stock Valuations May Stay Elevated on Equity Demand: MS
  • Deutsche Bank’s Chinese Backer HNA Becomes Top Shareholder
  • Strike at Freeport’s Grasberg Mine Continues as Talks Stalled
  • Citi Seeks to Buy Santos Stake on Behalf of Hony, AFR Says
  • Duterte Attending to Possible Lopez Replacement, Abella Says

In European trading tech names underperformed after Apple shares fell in after market trade as the tech giant announced iPhone sales missed analyst estimates due to a 14% decline in Chinese sales. EU bourses are trading modestly in the red with the main headline this morning focusing on reports from the FT that the Brexit bill may be around EUR 100BN, according to their calculations. While UK Brexit Minister Davis has been quick to state that the UK would not have to pay the bill if they do not reach an agreement with the EU, subsequently adding further uncertainty to how the Brexit negotiations will take place. However, the FTSE has been somewhat undeterred by these latest reports. Fixed income markets have been on the front foot with FTQ flow keeping prices afloat, OATs are relatively flat with yields trickling down by 0.4bps ahead of tonight’s French Presidential TV debate.

Top European News

  • U.K. April Construction PMI 53.1 vs 52.2 in March; Est. 52
  • Deutsche Bank’s Chinese Backer HNA Becomes Top Shareholder
  • German Unemployment Falls Further as Business Outlook Brightens
  • Commerzbank Had Solid 1Q Results, ‘Good’ Start to Year, CEO Says
  • Nordea Says Potential Move of HQ Will Cost Less Than EU70m
  • Macron 59%, Le Pen 41% in Ipsos Poll, Le Monde Says
  • Russia Said to Back Extending OPEC Deal After Hitting Target
  • European Miners Drop to 4-Month Low as Metals Prices Sink
  • Novo’s Legal Challenges Mount as U.S. States Query Insulin Price
  • M&S Poaches Car-Parts Seller’s CEO to Lead Clothing Revival
  • Sistema Plunges in Moscow After Rosneft Files $1.9 Billion Suit

In currencies, FX liquidity has not at its best based on the price action seen this morning. GBP has been in focus given the latest rhetoric from the EU 27, who have now banned Theresa May from head of state meetings. The hard-line stance relates to the settling of the exit bills, where some of the numbers have been pumped in the media, but early GBP selling has been reversed. Cable dipped under 1.2900 but held the Tuesday lows, while EUR/GBP has been contained by 0.8435-80. Construction PMIs in the UK also beat forecasts, but key services sector due tomorrow. EU growth data matched expectations to underline the steady recovery alluded to by ECB president Draghi last week. No major impact as yet as French politics takes over the focus, and to that end, sellers ahead of 1.0950 contain the spot rate, but sub 1.0900 bids also banking on a Macron victory as the polls (so far) suggest. A large 1.0925 expiry today is also helping to steady the ship. USD/JPY has traded a very quiet range above 112.00, but this is likely to change after the ADP private jobs survey later on today. US Treasury yields have taken a modest dip, though brushed off by FX markets as yet.

In commodities, it is proving a little more volatile in the commodities market of late, and with Oil prices dominating in recent sessions, it has been Copper taking a hit. Various factors cited, with some pointing to the weaker China manufacturing PMIs, but the timing of the hit suggests weak US auto car sales would have been more of a factor. Price now eyeing a move towards the range lows for 2017, but still comfortably off USD2.50 as yet. Oil traders still testing lower levels, and this was in light of the higher than expected draw down on Crude inventory. APIs are pretty erratic however, and pressure likely to continue unless the data is underlined by the EIA later today. WTI resistance ahead of USD50.00 has been a factor, but this level also support for Brent. Precious metals still basing out, but we may see some upside going into the weekend and the second round vote in France.

Looking at the day ahead, in the US the early focus will be on the April ADP employment change print which will be closely watched ahead of payrolls on Friday. The consensus is for a 175k reading while our US team are forecasting 200k. Also due out are the final PMI revisions (services and composite) and the ISM non-manufacturing print. Thereafter all eyes turn over to the FOMC meeting in the evening. Away from the data, the ECB’s Hansson is due to speak around lunchtime today, while the EU’s Barnier is also due to brief press on Brexit talks in Brussels this morning. This evening we have the decisive French presidential debate. Earnings wise today we’ve got 33 S&P 500 companies scheduled to report including Kraft Heinz, Facebook and Time Warner. BNP Paribas and Volkswagen also report in Europe.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 2.7%
  • 8:15am: ADP Employment Change, est. 175,000, prior 263,000
  • 9:45am: Markit US Services PMI, est. 52.5, prior 52.5
  • 9:45am: Markit US Composite PMI, prior 52.7
  • 10am: ISM Non-Manf. Composite, est. 55.8, prior 55.2
  • 2pm: FOMC Rate Decision

DB’s Jim Reid concludes the overnight wrap

This week is still yet to really kick into gear although there is the potential for things to get a bit more interesting tonight when we first get the outcome of the FOMC meeting, before following that up with a head to head battle between French presidential candidates Macron and Le Pen when they face-off in a live televised debate.

With regards to the Fed the general feeling is that there is unlikely to be much new information in this month’s FOMC statement. DB’s Peter Hooper believes that the risk, albeit a small one, is that they will come closer to moving in a tightening direction than currently expected. More will be learned on that score in post-meeting Fedspeak (for which there are a number of speakers due on Friday including Fed Chair Yellen) or the minutes to the meeting. In terms of the finer details, Peter highlights that the Committee should be able to get away with relatively minor changes in the discussion of recent developments. They can acknowledge the soft GDP print and consumer spending in particular. That said they should also downplay this softness given the known issues with seasonality. On the inflation front, indicators have trended modestly higher on balance, notwithstanding a softening in core inflation in March driven by the anomalous drop in mobile phone services prices. The YoY change in the core PCE price index was running just modestly below the Committee’s 2% objective through Q1. An up-drift in most measures of wage inflation over the past couple of years confirm that the labor market has been in the vicinity of full employment for a while now. Market measures of inflation expectations have eased on balance since the March FOMC meeting, though they have rebounded recently. In summary, with market expectations for a June hike running at 67% according to Bloomberg’s calculator (and just 13% for a May hike) there will probably not be a need to push these expectations higher at this point. But any net changes in the  statement are more likely to be read as hawkish rather than dovish, simply because the current and near-term prospective mix of economic developments probably moves them closer to their next rate hike, which DB expects will be in June.

Over in France the polls continue to heavily favour Macron over Le Pen in recent days with the average lead from the last 5 polls still at 20pp. Some of the press reports in the last 24 hours or so have been on Le Pen seemingly trying to downplay her anti-euro message with the FT in particular running such a story so it’ll be interesting if this comes out at all tonight. As noted at the top tonight’s debate is live and televised once again and is due to kick off at 9pm CET (8pm BST).

Over in markets yesterday it was another fairly uneventful session on Wall Street with the S&P 500 (+0.12%) eking out another modest gain. This came after European bourses returned from the long weekend in a good mood as evidenced by the +0.75% gain for the Stoxx 600. Developments in Greece seemed to be a big factor behind the positive sentiment after the country came to an agreement with creditors on reforms needed to unlock the next disbursement tranche of emergency loans. The deal came about following a long night of talks with Greece eventually backing down on aggressive pension cuts, dropping  the minimum income tax threshold and liberalising Sunday trade amongst other things. Greece PM Tsipras will now need to pass everything through parliament while the IMF and Europeans will also now have to come to an agreement on debt relief measures. Unsurprisingly Greek assets rallied pretty hard yesterday. The Athex finished up +3.06% while 10y Greek yields were 32bps lower by the end of play.

Similar maturity Bunds on the other hand were 1bp higher at 0.324%. Away from this, there wasn’t much new to report on the politics front in the US. President Trump used twitter to say that “Our country needs a good ‘shutdown’ in September to fix mess!” but the market was little moved. 10y Treasury yields perfectly reversed Monday’s move to finish 3.8bps lower at 2.281% with the only data release being a non-eventful April auto sales print (16.8m vs. 17.1m expected). Oil may have played a factor in the move for Treasury yields however after WTI dipped -2.42% and back below $48/bbl. It has however rebounded about 1% overnight after the API report showed a drop in gasoline and crude stockpiles.

Another mover after the US close last night was Apple after shares dipped 2% in extended trading following its Q2 earnings report. While earnings were marginally ahead of Bloomberg consensus, revenues missed on lower iPhone sales and Q3 revenue guidance was set at $43.5bn-$45.5bn which was also seen as disappointing compared to expectations for $45.7bn. Apple did announce an increase to their capital return program but that wasn’t enough to stop shares falling and we’re seeing Nasdaq futures down -0.30% in the early going too this morning. Meanwhile in Asia it’s another holiday-disrupted session with only bourses in China and Australia open. Both are weaker as we go to print with the Shanghai Comp down -0.22% and ASX -1.01%.

Moving on. The main focus of yesterday’s data was the final revisions to the European manufacturing PMIs. At a headline level the final reading for the Euro area was revised down one-tenth to 56.7. All told that leaves the reading up 0.5pts versus March and also at the highest in six years. Germany and France were unrevised at 58.2 and 55.1 respectively. Meanwhile Italy recorded a 73-month high at 56.2 (vs. 56.0 expected), Spain a 2-month high at 54.5 (vs. 54.4 expected) and Ireland a 3-month high at 55.0. The UK also came in at a much better than expected 57.3 (vs. 54.0 expected) which was an increase of 2.9pts versus March and the highest level in 3 years.

Also yesterday we thought that we would get greater clarity from the ECB in terms of the CSPP/PSPP taper ratio. However the numbers are yet to be conclusive even if they hint at tapering in both but with slightly less tapering in CSPP. Last week’s CSPP net purchases dropped to €1.2bn from €1.5bn a week earlier and €1.7bn the week before whereas PSPP net purchases went up to €14.1bn from €11.1bn and €12.5bn, respectively. So the last week of the month’s data has balanced the data a bit after what looked like at one point a more aggrieved PSPP taper over CSPP. Michal Jezek in my team has published a note overnight updating the view and numbers on the CSPP program and the recently ended BoE equivalent. Further, this IG update looks at credit repricing following the first round of French presidential elections, including a focus on the relative performance of French credit. Email him (Michal.jezek@db.com) if you didn’t receive a copy.

Looking at the day ahead, this morning in Europe the early data release is from Germany where the April unemployment stats are due out. Shortly following that we’ll get the advance release of Q1 GDP for the Euro area, the consensus for which is pegged at +0.5% qoq. The Euro area PPI report is also due out this morning. This afternoon in the US the early focus will be on the April ADP employment change print which will be closely watched ahead of payrolls on Friday. The consensus is for a 175k reading while our US team are forecasting 200k. Also due out across the pond are the final PMI revisions (services and composite) and the ISM non-manufacturing print. Thereafter all eyes turn over to the FOMC meeting in the evening. Away from the data, the ECB’s Hansson is due to speak around lunchtime today, while the EU’s Barnier is also due to brief press on Brexit talks in Brussels this morning. This evening we then have the aforementioned French presidential debate. Earnings wise today we’ve got 33 S&P 500 companies scheduled to report including Kraft Heinz, Facebook and Time Warner. BNP Paribas and Volkswagen also report in Europe.

 

European trading this morning:

Although the Italian stock market is rising risk with respect to Italian bonds is rising!

 

To Italeave Or Not? Confused European Traders Shift Attention Away From France

A quick glance at the soaring Italian stock market and one would have faith in the future of the euro, with Alitalia just a ‘storm in a teacup’. However, bond traders are as worried about political uncertainty as ever with Italian bond risk surging to over 3 year highs.

As Bloomberg reports, the FTSE MIB Index is trading near a 15-month high after ex-Prime Minister Matteo Renzi resoundingly won back the leadership of the Democratic Party.

But bonds tell a slightly different story, with a wider yield spread to France showing investors are wary of the country’s political uncertainty as Renzi faces an uphill battle to regain his role as prime minister.

 

So which one to believe? Bonds (Italeave) or Stocks (Rome-ain)?

 

end

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 8.36 POINTS OR .27%  OR / /Hang Sang CLOSED .  The Nikkei closed/Australia’s all ordinaires  CLOSED DOWN .86%/Chinese yuan (ONSHORE) closed UP at 6.8932/Oil DOWN to 47.99 dollars per barrel for WTI and 50.77 for Brent. Stocks in Europe OPENED IN THE RED   ..Offshore yuan trades  6.8890 yuan to the dollar vs 6.8932 for onshore yuan. NOW  THE OFFSHORE IS A LITTLE STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN SLIGHTLY STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN: STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS HAPPY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/USA

the USA sends a warning to North Korea with the release of the overnight minuteman iii ICBM launch

(courtesy zero hedge)

In Latest Warning To North Korea, US Releases Video Of Overnight Minuteman III ICBM Launch

As previewed last night, this morning the US Air Force confirmed that another unarmed Minuteman III ICBM missile capable of sending a nuclear bomb across the world was launched early on Wednesday from California’s Vanderberg Air Force base, in what was a second clear signal of nuclear deterrence aimed squarely at North Korea and took place one week after the US test fired another ICBM under identical circumstances.

The unarmed Minuteman 3 intercontinental ballistic missile blasted off from a silo at 12:02 a.m. from Vandenberg Air Force Base and delivered a single re-entry vehicle to a target approximately 4,200 miles away at Kwajalein Atoll in the Pacific Ocean, the Air Force Global Strike Command said. The test, which reprotedly took 10 months to plan, was the latest designed “to check the readiness and accuracy of a weapon system that forms part of the U.S. nuclear force” but in reality was the second strong message sent to Kim Jong-Un in the span of one week.

This is the statement Vanderberg released shortly after the launch:

Airmen from Malmstrom and Vandenberg Air Force bases conducted an operational test launch of an unarmed Minuteman III missile. The test launch used an intercontinental ballistic missile pulled randomly from a silo on Malmstrom Air Force Base, which was then transported and reassembled at Vandenberg, and launched by crew members from the 341st Missile Wing. The ICBM was equipped with a single test reentry vehicle, and traveled approximately 4,200 miles to a test range near the Kwajalein Atoll in the Marshall Islands. These ICBM test launches verify the accuracy and reliability of the weapon system, providing valuable data to ensure a safe, secure and effective nuclear deterrent.

It also released the following video of the ICBM launch, which we are confident will be closely watched by everyone in the Kim Jong-Un administration.

 

North Korea Threatens China With “Grave Consequences” Over “Betrayal”

Earlier this morning we reported that according to Korea Times, China had allegedly sent North Korea what amount to a final warning over its military provocations. The rumor cited the May issue of Hong Kong monthly news outlet Dong Xiang. It said a Chinese Ministry of Foreign Affairs junior minister invited Park Myung-ho, an official of North Korea, for a meeting. China’s Foreign Minister Wang Yi attended the meeting and asked his junior to read aloud the warning to the North over the nuclear test. The memorandum mentioned that China will condemn strongly, pull back on all economic cooperation and even blockade North Korea if it conducted the test.

It didn’t take Korea long to respond…

In an almost unprecedented criticism of China on Wednesday, North Korea’s state media said Chinese state media commentaries calling for tougher sanctions over Pyongyang’s nuclear program were undermining relations with Beijing and worsening tensions. As Reuters reports, a commentary carried by the official Korean Central News Agency (KCNA) slammed China’s “insincerity and betrayal,” referring to recent commentaries in China’s People’s Daily and Global Times newspapers, which it said were “widely known as media speaking for the official stand of the Chinese party and government.”

The response was terse and aggressive…

“A string of absurd and reckless remarks are now heard from China every day only to render the present bad situation tenser.”

 

“China had better ponder over the grave consequences to be entailed by its reckless act of chopping down the pillar of the DPRK-China relations,”

The KCNA commentary charged that the Chinese articles had attempted to shift the blame to Pyongyang for “deteriorated relations” between China and North Korea and U.S. deployment of strategic assets to the region. It also accused China of “hyping up” damage caused by North Korean nuclear tests to China’s three northeastern provinces.

Chinese state media calls for North Korea to dismantle its nuclear program were “a wanton violation of the independent and legitimate rights, dignity and supreme interests” of North Korea and constituted “an undisguised threat to an honest-minded neighboring country which has a long history and tradition of friendship,” it said.

North Korea’s “media” responded by explaining that the nuclear program was needed for the “existence and development” of the country and “can never be changed nor shaken.”

The bottom line is that the window for threading a diplomatic solution, brokered by China, is closing rapidly…

“The DPRK will never beg for the maintenance of friendship with China.”

b) REPORT ON JAPAN

c) REPORT ON CHINA

China is taking no chances: they have just issued an unprecedented warning to its citizens in North Korea to return home

(courtesy zero hedge)

China Issues Unprecedented Warning To Citizens In North Korea: Return Home

In an unprecedented move, the Chinese Embassy in North Korea has advised Korean-Chinese residents to return home amid concern that the North’s military provocations may trigger a U.S. attack on the North.

The Korea Times reports that the embassy began sending the message on Apr. 20, five days before the North celebrated the 85th anniversary of the Korean People’s Army with a show of military power, according to Radio Free Asia (a U.S.-based station specializes in North Korea).

The station cited a Korean-Chinese living in the North’s capital, who said he left for China late last month after the embassy contacted him. He said he has been visiting China every two to three months but, after being told he should “stay in China for a while,” left North Korea a month early.

“The embassy has never given such a warning. I was worried and left the country in a hurry,” said the man, whose name was withheld.

But he said that most Korean-Chinese residents in Pyongyang were ignoring the message.

The city’s “peaceful” atmosphere, despite the global crisis due to the state’s threats involving missiles and nuclear tests, might have kept them unaware of the situation, he added.

The embassy’s warning indicates that China is worried that the saber-rattling North and U.S. moves to destabilize the Kim Jong-un regime might affect Chinese citizens abroad.

end

China reportedly issues its final warning to North Korea to stop missile testing

(courtesy zero hedge)

China Reportedly Issues Final Warning To North Korea

With President Trump placing his faith in China’s ability to keep its neighbor under control – through threats, promises, or oil embargoes – it appears, according to unconfirmed rumors spreading widely on Chinese social media Tuesday, that North Korea just got its final warning.

As Korea Times reports, Chinese news outlets have previously said Beijing could turn its back on Pyongyang if the latter conducted a sixth nuclear test. But the rumor that China has given North Korea a final warning has drawn particular interest from Weibo users.

China has sent a final warning to North Korea over its military provocations.

The rumor cited the May issue of Hong Kong monthly news outlet Dong Xiang.

It said a Chinese Ministry of Foreign Affairs junior minister invited Park Myung-ho, an official of North Korea, for a meeting. China’s Foreign Minister Wang Yi attended the meeting and asked his junior to read aloud the warning to the North over the nuclear test.

 

The memorandum mentioned that China will condemn strongly, pull back on all economic cooperation and even blockade North Korea if it conducted the test.

A Chinese netizen said: “Maybe the bond between the nations is not that strong as we thought. North Korea is completely surrounded by enemies now.”

The Chinese government did not provide any explanation or correction to the rumor, but this follows reports of China’s embassy warning citizens in North Korea to “return home” as fears grow of escalation with the US.

end

4. EUROPEAN AFFAIRS

As I outlined to you in yesterday’s commentary, the EU has now given its bill to the EK for leaving the union at 100 billion euros.

As expected, the UK is quite angry and the pound falters. They should just walk away

(courtesy zero hedge/London’s Financial times)

EU Hikes Brexit “Bill” To €100 Billion Drawing Angry Response From UK, Pound Slumps

Sterling slumped overnight, and tensions between the UK and Europe escalated after EU negotiators hiked their initial demand for Birtain’s Brexit bill over recent weeks, widening the divide between Brussels and London, which in turn questions whether it owes anything at all before Brexit talks start next month. Hours before chief negotiator Michel Barnier was due to give more details on the EU’s standpoint, the Financial Times said the EU might seek an upfront payment in 2019 of up to €100 billion, drawing an immediate rejection from Britain’s Brexit Secretary David Davis that he would pay that sum.

The European Commission had initially given a ballpark estimate of the bill of about €60 billion but the FT said the calculations it referred to would result in a net payment from Britain of roughly that level, after subsequent reimbursements. One senior EU official involved in preparing for the talks after a British election on June 8 said he did not recognize the 100-billion-euro figure, although a number of private calculations of the bill have gone as high or even higher.

According to Reuters, last month, the Bruegel think-tank in Brussels put the up-front payment for Britain as high as €109 billion under one of many scenarios for the calculation. Later reimbursement would bring the net figure to 65 billion, Bruegel’s study showed.

Shortly after the FT story hit, UK Brexit Secretary Davis said Britain won’t be paying a €100BN Brexit bill, and would have no obligation to pay Brexit bill if it leaves the EU without a deal. Speaking on BBC Radio 4’s “Today” program Wednesday, Davis said “nobody is looking for that outcome” and added that “the simple truth is that when we leave we’ll go outside the remit of the European Court of Justice.”

He then summarized the overnight media reports by saying “what you’re seeing is the tough early stages of the negotiation.”

Meanwhile, over the past month, the 27 other EU member states have drafted negotiating guidelines for the executive Commission that leaders agreed on Saturday. In the course of drafting, governments insisted on clarifying that Britain be made to pay up front for, among other things, contingent liabilities for guarantees on loans made by, for example, the European Investment Bank.

A document seen by Reuters outlining Barnier’s plans for negotiations, showed he has a plan to calculate up-front payment for contingent liabilities, to be repaid later: “This calculation will also identify the amounts covering or guaranteeing loans which have to be reimbursed to the United Kingdom if uncalled, on the basis of the maturity of the loans.” Barnier has repeatedly said that the final amount cannot be calculated until Britain is leaving, since the EU budget will change. However, EU leaders want agreement on the “methodology” for the calculation among several conditions for opening the talks on a future free trade deal that Britain is seeking.

As Reuters adds, Brexit negotiating leaders hope that agreement could be reached by December. However, concern is rising in Brussels that talks might collapse as the rhetoric from both sides intensifies and British Prime Minister Theresa May fights a snap election she called last month, increasing the possibility of Britain leaving in a legal limbo in March 2019 that would be damaging all round. European Commission President Jean-Claude Juncker was quoted as saying after a dinner with May last week that he saw a major risk of failure as the two sides were so far apart.

* * *

Markets reacted negatively to the latest row, and the pound fell against the dollar amid signs that negotiations for Britain’s exit from the European Union have got off to a rocky start.

Sterling first fell after The Times reported that U.K. PM Theresa May has been told she will be prevented from joining discussions at future EU heads of state meetings. The pressure was increased after David Davis threatened to walk away from the bloc without a deal if provoked, while – as noted above – flatly rejecting the reported €100 billion exit bill.

As Bloomberg notes, reports added to the already fractious public atmosphere surrounding the talks following leaked details of a dinner meeting between May and European Commission President Jean-Claude Juncker, which alleged the latter was shocked by the Prime Minister’s approach

May vowed on Tuesday she wouldn’t be pushed about, saying that Juncker is learning she can be “bloody difficult.” While that may not bode well for the coming negotiations, it won’t necessarily hurt May’s chances as she seeks re-election on June 8 in a campaign defined by Brexit.

“I am quite negative on the pound,” said Richard Falkenhall, a strategist at SEB AB in Stockholm. “There are several parts in the negotiations which to me seem very tricky to find solutions on.”

In recent days the pound soared despite mixed economic data out of the UK as a record number of sterling shorts rushed to cover their position. That technical pressure may now be largely over.

“This sort of political uncertainty will continue to be reflected in sterling going forward, and on top of that you have to add the signs we have seen since the beginning of the year, where you’re seeing slower growth in the U.K.” Falkenall said. “What you will end up with toward the second half of the year is the situation where you have the political uncertainty having a negative impact on capital spending in the U.K. and on top of that you have growth slowdown from more cautious consumers. That sort of mix is not very positive for sterling”

As a result, GBPUSD fell 0.2% to 1.2910, having earlier weakened 0.4%.

Finally, here is Mint’s Bill Blain on the overnight row:

I can just imagine Junker and Barnier asking for Euro 100 bln with their little fingers in the corner of their mouths – just like twin Dr Evils. They can ask. What they get is the question….

 

I for one am shooting them a hard stare and the most violent gesture we Brits can make… a slightly raised eyebrow. (Forget Dodgy Davis immediately declaring war on Europe this morning…. he’s an excitable boy, they all say.)

 

Do you think the EU is trying to wind us up? Perhaps. The mindset revealed over recent days confirms the EU’s leadership default is to punish. These perfidious Brits can be cowed into apologising for their temerity at even daring to think we could leave Europe. Is the goal to bring us back crawling to Brussels in supplication for re-admittance?

 

Hmm. I suspect these bally foreigners haven’t been reading their history books. I would remind them: Nemo Me Impune Lacessit! and the rest..

 

I am conflicted on Europe. I don’t particularly want to leave – I love Europe and Europeans. I reject the underswell of racism and demands for border controls and immigration limits. But, I’m not convinced there is any point staying in an economically unfeasible Europe, becoming part of a damaging currency experiment, nor in becoming part of a single European polity. I’m quite happy to remain a Scotsman first, British second and associate European somewhere down the list.

 

I’m perfectly willing to support Europe becoming a homogenous political unity. I’m utterly convinced it will be our largest and most important trading partner – but that doesn’t mean we have to be part of it – just close to it.

 

But the EU leadership aren’t thinking that way. They fear, maybe rightly, if one country walks away, maybe others will.   

 

Many writers are looking for historical parallels. The one that frightens me is America in 1860. Maybe that sounds like hyperbole… but..

 

 

end

 

Cable (Great Britain Pound/USA dollar cross)  falls as European official have issued threats against the UK

(courtesy zero hedge)

Cable Drops As PM May Says European Officials Have Issued Threats Against UK

Following the ridiculously round number demands of EUR100 billion ransom to leave the EU, UK PM Theresa May has stated that EU officials have issued threats against The UK as Europe’s negotiating stance has toughened. Furthermore, May accuses EU countries of trying to maliciously influence UK general election result.

  • *MAY SAYS U.K. WANTS DEAL, BUT NO DEAL BETTER THAN BAD ONE
  • *MAY SAYS SOME IN BRUSSELS DO NOT WANT TALKS TO SUCCEED
  • *MAY SAYS SERIOUS CONSEQUENCES IF WE DON’T GET BREXIT RIGHT
  • *MAY SAYS LEAKS DELIBERATELY TIMED TO AFFECT ELECTION RESULT

“There are some in Brussels who do not want these talks to succeed, who do not want Britain to prosper.”

 

“In the last few days we’ve seen just how difficult these talks are going to be”

 

“Britain’s negotiating position in Europe has been misrepresented in the European press”

And cable is fading…

 

Here is Dan Hannan explaining the idiocy spewing forth from the EU…

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

The house bubble in Vancouver is back

(courtesy zero hedge)

The Vancouver Housing Bubble Is Back, And It’s (Almost) Bigger Than Ever

For a while it seemed that the Vancouver housing bubble, the direct result of a relentless tidal wave of Chinese “hot money”, had burst after last August the British Columbia province implemented a 15% property tax to stem the inflow of offshore funds. And indeed, in the immediate months that followed, Vancouver’s housing priced tumbled from record highs.

However, it was not meant to be, and less than a year later, the Vancouver housing bubble is back, and it’s (almost) bigger than ever.

Over the past few months, with many suspecting – as we did – that the housing market in Vancouver had finally normalized, attention shifted to what emerged as the next hotbed of rampant housing speculation in Canada, Toronto, where last month average selling prices surged by 33%.

As it now turns out, ignoring Vancouver, and underestimating the persistence of aggressive Chinese buyers turned out to be a mistake, because earlier today the Real Estate Board of Greater Vancouver announced in its latest monthly report that while home sales in the Vancouver housing market had predictably slowed down in April compared with a year ago, prices – which had dipped slightly in recent months- once again surged.

First the (somewhat) good news: the overall turnover in the Vancouver resi market slowed down appreciably, with property sales in the region totaling 3,553 in April 2017, a 25.7% decline compared to April 2016 when 4,781 homes sold and a 0.7% decrease from the 3,579 sales recorded in March 2017. Sales of single-family homes in April 2017 were hit the hardest, reaching 1,211, a decrease of 38.8% from the 1,979 detached sales recorded in April 2016. Meanwhile, sales of apartment, or condominium, properties reached 1,722 in April 2017, a decrease of 18.3 per cent compared to the 2,107 sales in April 2016.

Yet while sellers and buyers were less likely to agree on a closing price than just a few months ago, that does not mean that sellers were more aggressive, or that prices had declined at all. In fact quite the opposite: the benchmark price for all types of residential properties in Metro Vancouver, Canada’s most expensive real estate market, was C$941,100 ($686,583.50) in April. That was up 5 percent over the past three months and 11.4 percent higher compared with a year ago.

The breakdown was even more stark by category:

  • For condominiums, the benchmark price was C$554,100 last month, a 16.6% jump over the past 12 months and 3.1% more than March.
  • The benchmark price of an attached unit was $701,800, 15.3% more than a year ago, and a 2.4% increase compared to March 2017.
  • The benchmark price for detached properties is $1,516,500, an 8.1% increase over the last 12 months and a 1.8 per cent increase compared to March 2017.

And the visual testament to just how strongly the Vancouver housing bubble has returned, and as of April has almost surpassed last year’s all time highs:

In other words, all that the 15% surtax achieved was to drastically slowdown the rate of transactions (or perhaps home flipping). Meanwhile, as sellers held out to find more aggressive buyers, they were in luck as the new wave of buyers has emerged, and undeterred by the 15% premium, they have been slowly but surely lifting all available offers.

“In the condominium and townhome markets, demand has been increasing for months and supply is not keeping pace, said the board’s president, Jill Oudil. “This dynamic is causing prices to increase and making multiple-offer scenarios the norm,” she said in a statement.

She added that “Home buyers are looking to get into the market and they’re facing fierce competition”, and it mostly comes out of China. Or perhaps it is simply other Canadians armed with cheap money loans, rushing to fill the void, because as the following charts show, whether it is due to Chinese buyers or not, China has a very big housing problem on its hands, and explains why the recent collapse of alt-mortgage lender Home Capital Group, which accounts for just 1% of all loans in the market, has escalated all the way to the finance minister. The reason is simple: one the first domino falls, nobody knows just how far the resultant avalanche will go.

To put Canada’s housing market, and bubble, in perspective, first here is a chart of total Canadian household debt. Most of this is in the form of mortgages.

Next, despite Canada’s low rates, the debt service ratio of an average Canadian household is nearly 40% higher than when compared to the US.

And finally, the punchline: indexed home prices in Canada compared to the US.

In retrospect, perhaps Canada was lucky that the attempt to deflate the Vancouver housing bubble failed, had it succeeded and spread across the nation, leading to a collapse in collateral values and widespread defaults, the “mean-reversion” outcome may have been far more devastating. Which of course, is not to say that Canada’s problem has been fixed, but at least for the time being, the can has been kicked once again

end

7. OIL ISSUES

Oil tumbles again on inventory rise as well as a huge production rise
(courtesy zero hedge)

WTI/RBOB Tumble After Surprise Inventory Data, Production Rise

Following API’s surprisingly large drawdowns, DOE almost completely refuted it with an inventory build for gasoline and a very small draw for crude. WTI and RBOB prices dropped on the headlines, not helped by yet another increase in US crude production to cycle highs.

 

API

  • Crude -4.158mm (-3.5mm exp) – biggest since 2016
  • Cushing -215k
  • Gasoline -1.93mm (+1mm exp)
  • Distillates -436k

DOE

  • Crude -930k (-3mm exp)
  • Cushing -728k (-900k exp)
  • Gasoline +191k (+1mm exp)
  • Distillates -562k (+2mm exp)

3rd weekly build for gasoline and notably small draw for crude…

 

US Crude exports (which had helped shift the glut offshore) tumbled in the last week…

Bloomberg’s Javier Blas comments that oil bulls had been weeks waiting for Saudi Arabia output cuts to show up. But don’t look for them on U.S. imports figures. They aren’t to be found. For the third consecutive week, Saudi Arabia has shipped in excess of one million barrels a day into the U.S. (precisely 1.095 million b/d, slightly down from previous weeks of 1.191 million b/d, but up from late March nd early April levels ). Saudi Arabia shipped more crude into the U.S. in April 2017 than it did in the same month of 2016.

US Crude production rosae once again to August 2015 highs…

 

Both WTI and RBOB had faded some of the bounce after last night’s API data before DOE data hit, but the surprise build in gasoline (and small draw in crude) sent prices tumblimg…

 

 

8. EMERGING MARKETS

end

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

Euro/USA   1.0908 DOWN .0026/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 112.21 UP 0.236(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 1.2925 DOWN .0015 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.3718 UP .0012 (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 26 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.0908; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED DOWN 8.36 POINTS OR .27%     / Hang Sang  CLOSED  /AUSTRALIA  CLOSED DOWN .27% / EUROPEAN BOURSES CLOSED 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 

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

2/ CHINESE BOURSES / : Hang Sang CLOSED  / SHANGHAI CLOSED DOWN 8.36 POINTS OR .27% /Australia BOURSE CLOSED DOWN .86% /Nikkei (Japan)CLOSED   / INDIA’S SENSEX IN THE RED

Gold very early morning trading: $1253.90

silver:$16.81

Early WEDNESDAY morning USA 10 year bond yield: 2.298% !!! UP 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  2.98, UP 1  IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 99.11 UP 13  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: 3.465%  DOWN 10  in basis point(s) yield from TUESDAY 

JAPANESE BOND YIELD: +.021%  PAR   in   basis point yield from TUESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.614%  DOWN 4  IN basis point yield from TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.264 DOWN 4  POINTS  in basis point yield from TUESDAY 

the Italian 10 yr bond yield is trading 66 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.326% PAR 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 1.0919 DOWN .0016 (Euro DOWN 16 basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.34 UP  .374 (Yen DOWN 37 basis points/ 

Great Britain/USA 1.2913 DOWN 0.0027( POUND DOWN 27 basis points)

USA/Canada 1.3712 UP 0.0005(Canadian dollar DOWN 5 basis points AS OIL FELL TO $47.64

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This afternoon, the Euro was DOWN by 16 basis points to trade at 1.0919

The Yen FELL to 112.34 for a  LOSS of 37 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 FELL BY 27  basis points, trading at 1.2913/

The Canadian dollar fell by 5 basis points to 1.3712,  WITH WTI OIL FALLING TO :  $47.64

The USA/Yuan closed at 6.8989/
the 10 yr Japanese bond yield closed at +.021% PAR IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 1 IN basis points from TUESDAY at 2.293% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.945 DOWN 5  in basis points on the day /

Your closing USA dollar index, 99,05 UP  8  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 DOWN  15.52 POINTS OR .21%
German Dax :CLOSED UP 19.94 POINTS OR .16% 
Paris Cac  CLOSED DOWN 3.15 POINTS OR .06% 
Spain IBEX CLOSED  UP 46.70 POINTS OR .15%

Italian MIB: CLOSED  UP 26.06 POINTS/OR .13%

The Dow closed UP 8.01 OR 0.04%

NASDAQ WAS closed DOWN 22.81 POINTS OR 0.37%  4.00 PM EST
WTI Oil price;  47.64 at 1:00 pm; 

Brent Oil: 50.48 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.23 DOWN 20/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD REMAINS AT  +0.326%  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:$47.58

BRENT: $50.55

USA 10 YR BOND YIELD: 2.322%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.97%

EURO/USA DOLLAR CROSS:  1.0885 DOWN .0049

USA/JAPANESE YEN:112.72  UP 0.750

USA DOLLAR INDEX: 99.35  UP 38  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2872 : DOWN .0067  OR 67 BASIS POINTS.

Canadian dollar: 1.3730  UP .0022 (CAN DOLLAR DOWN 22 BASIS PTS)

German 10 yr bond yield at 5 pm: +.326%

END

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

TRADING IN GRAPH FORM FOR THE DAY

‘Blinkered’ Fed Spikes Dollar, Clobbers Commodities

 

Just ignore it…

 

More crazy pills…

 

Bonds and Bullion were sold post-Fed…

 

But all in all only The Dow managed to cling to gains – even with the panic-Buy The fucking Fed Dip… SPX closes the last 7 days….2388 2387 2388 2384 2388 2391 2387

 

VIX rose on the day… (despite a quick flash crash on The Fed)…but was monkey-hammered lower after The Fed to ensure

 

As Realized vols drop to near 90 year lows..

 

Treasury yields ended the day higher…

 

Except for 30Y which outperformed as chatter of ultra-long bond issuance was dismissed)…

 

The USD Index rallied, breaking to one-week highs, but in a very narrow range…

 

AUD weakness dominates along with JPY but Cable tumbled on comments from May about EU bitchiness…

 

The dollar strength did not help commodities which were already under pressure (Crude and Copper both hit by surges in inventories)

 

Just like in stockland, energy traders bought the inventories dip…

 

Gold and Silver tumbled into the close with the former busting below $1250 and its 100-day moving average…Gold sinks to 6 week lows.

 

And Dr. Copper was clubbed like a baby seal…

end

 

More garbage from the FED’s FOMC meeting today

(courtesy zero hedge)

“Hawkish” Fed Shrugs Off “Transitory” Weakness In Data, Signals More Rate Hikes Ahead

Having perfectly top-ticked US economic data with its March rate-hike, the subsequent collapse in ‘data’ has been shrugged off as transitory (or seasonal) and by all indications The Fed seems set on two more rate hikes this year no matter what (even as the market diverges dovishly).

  • *FED SAYS GROWTH SLOWDOWN IN 1Q LIKELY TO BE TRANSITORY
  • *FED SAYS 12-MONTH INFLATION RUNNING CLOSE TO ITS 2% GOAL
  • *FED: JOB GAINS SOLID, HOUSEHOLD SPENDING ROSE ONLY MODESTLY
  • *FED: LABOR MKT CONTINUED TO STRENGTHEN EVEN AS GROWTH SLOWED
  • *FED REPEATS IT MAINTAINING BALANCE-SHEET REINVESTMENT STRATEGY
  • *FED SAYS FOMC VOTE WAS UNANIMOUS

Here are some of the most notable changes (in bold):

  • “Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen even as growth in economic activity slowed
  • “Job gains were solid, on average, in recent months, and the unemployment rate declined”
  • Household spending rose only modestly, but the fundamentals underpinning the continued growth of consumption remained solid

The Fed commented that inflation is reaching its goal:

  • Inflation measured on a 12-month basis recently has been running close to the Committee’s 2 percent longer-run objective

… although:

  • “Excluding energy and food, consumer prices declined in March and inflation continued to run somewhat below 2 percent

But the key phrase: slowing growth was transitory:

  • The Committee views the slowing in growth during the first quarter as likely to be transitory and continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, labor market conditions will strengthen somewhat further, and inflation will stabilize around 2 percent over the medium term

On net: a more hawkish than dovish statement.

*  *  *

First things first, The Fed offered no explanation for the fact that they hiked rates during a quarter that saw just 0.7% GDP growth – the weakest quarter for a rate hike since 1980

 

Since The Fed hiked rates in March, things have not gone the way they may have hoped… Gold and bonds are bid, stocks are unchanged and banks have been battered…

 

It is perhaps noteworthy that The Fed rate hike in March was the absolute top-tick in post-Trump US economic data – the collapse since then has been anything but ‘transitory’…

 

Federal Reserve officials have suggested it will probably be appropriate to begin unwinding the central bank’s $4.5 trillion balance sheet later this year, but that guidance is premised in part on projections that they will be able to raise interest rates twice more before the year is out. However, investors see just one more hike in 2017 as more likely than two, according to the prices of federal funds futures contracts.

 

June rate hike odds continue to hover near 70% (despite economic data’s collapse)…

 

But the market remains notably less hawkish than The Fed…

 

All eyes are on any commentary with regard The Fed Balance Sheet…

 

And don’t forget, the maturation of The Fed balance sheet is chunky…

As Bloomerg reports, analysts expect the Fed will have to decide whether to roll over a certain percentage of its principal or announce a fixed dollar target of its Treasury and mortgage securities to unwind the $4.26 trillion of debt in a “passive and predictable manner.” Under the percentage option, the scale of the Fed’s balance-sheet reduction “will fluctuate significantly” from month-to-month.

Don’t worry – *BERNANKE: I’M “QUITE CALM” ABOUT PLAN TO SHRINK BALANCE SHEET

*  *  *

The FOMC word count continues to slide… The word count fell 4 from March to 517

 

Full Redline below:   (see zero hedge)

end

 

rate hike odds rise to 94% on the Fed’s B.S.  If they do raise the rates, you will see gold climb which is opposite to what one would expect

(courtesy zerohedge)

 

Bonds, Bullion Slip After Fed Sends June Rate Hike Odds Spiking To 94%

From just below 70% before to 94% now, June is on like Donkey Kong

 

No matter how shitty economic data is…

 

The reaction in asset markets is modest to say the least…

Citi: “Treasuries are only modestly weaker in the wake of the Fed, in line with the interpretation that very little was said and the big story of the day remains the lower odds of an ultra-long bond”

The Dollar Index is higher (though the siz of the move is marginal)

 

As I outlined to you yesterday, the one year temporary hold on bankruptcy litigation is over this weekend and as expected there are quite a few Puerto Rico lawsuits filed

(courtesy zero hedge)

As The Puerto Rico Lawsuits Begin “A Bankruptcy Is A When, Not An If”

Last July, Puerto Rico defaulted on hundreds of millions in debt, however under the PROMESA federal rescue law put together in the last minute, creditor litigation was put on hold – a kind of deferred debtor protection without the actual bankruptcy. The law was meant to encourage Puerto Rico and its federal financial oversight board to negotiate debt-cutting agreements with creditors. No deals were reached and on midnight of May 1 into Tuesday, the litigation freeze expired, opening the doors for creditors to take Puerto Rico to court, in hopes of blocking the next step in the Puerto Rico restructuring, namely Governor Ricardo Rossello’s plan to impose drastic repayment cuts. As a reminder, Puerto Rico defaulted on $1.3 billion of principal owed since the previous governor declared the $70 billion public debt load unpayable in June 2015.

And as expected, on Tuesday Puerto Rico and its federal financial oversight board were flooded with the first lawsuits from stakeholders, with more expected in the coming days, which could ultimately push the insolvent U.S. territory into bankruptcy.  The lawsuits, according to Reuters, include complaints from holders of Puerto Rican sales-tax-backed debt, from general obligation bondholders and from bond insurer Ambac Assurance Corp.

  • The first group, those holding sales-tax backed debt known as the COFINA bondholders, allege that the island’s debt-cutting plans violate the U.S. Constitution.
  • The second group, those holding general obligation debt which is guaranteed by the island’s constitution, are demanding payment on $242.5 million of debt defaulted upon since July, including damages and interest of more than $102 million.
  • Finally, there is Ambac which insures $2.2 billion of Puerto Rican bonds, and which filed four lawsuits, including two against the island’s government and another against U.S. Treasury Secretary Steven Mnuchin, seeking a lien on Puerto Rican rum taxes collected by the U.S. Treasury Department.

“Puerto Rico is no longer shielded from creditors rushing to the courthouse to lay claim to its assets – that includes the beaches, pieces of art, historical furniture and any assets whether they are nailed down or not. The people of Puerto Rico have had enough. The governor and the board have a moral imperative to act immediately” said Rep. Nydia Velazquez, a New York Democrat, who is calling on a federal control board overseeing Puerto Rico’s finances to seek a court-supervised debt restructuring similar to Chapter 9.

So with the lawsuits now pouring in, and with $70 billion in debt, a 45% poverty rate and near-insolvent public health and pension systems, the torrent of litigation could force Puerto Rico into a so-called Title III proceeding – an in-court debt-cutting process similar to U.S. bankruptcy. In fact, various experts cited by Reuters, see Title III as inevitable, the only question is when.

“At some point, Puerto Rico might run up against an adverse court ruling it would rather not have,” said Keefe Bruyette & Woods analyst Chas Tyson, who follows Puerto Rico.

 

“I continue to think (bankruptcy) is a when, not an if.”

Yet while the creditors can finally pursue their contractual rights, they will hardly win many supporters in the court of public opinion, as most of them are hedge funds, and who may have accumulated PR debt at prices below prevailing. For example, the COFINA plaintiffs include such hedge funds like Aurelius, Cyrus Capital and Tilden Park, best known for its founder Josh Birnbaum who in 2010 defended Goldman in the infamous Carl “Shitty Deal” Levin hearing. In a lawsuit filed in federal court in Puerto Rico, they collectively accuse the U.S. commonwealth, Rossello and other officials of “angling to repurpose the tax revenue earmarked to pay COFINA debt, which they say violates the due process clause of the U.S. Constitution.”

Further, they ask the court to block Rossello from implementing a blueprint for fiscal turnaround that was approved by the oversight board in March. According to that plan, the island is forecast to only have $800 million a year to pay debt, or less than a quarter of what it owes, implying draconian haircuts for all bondholders.

Among Ambac’s lawsuits, two lodged complaints against the PR government, adding as defendants the island’s oversight board and the board’s seven members.The bond insurer, which may be on the hook should the island default, also aims to block not only the fiscal blueprint, but the filing of any Title III bankruptcy based on that blueprint. The insurer said in one lawsuit that Puerto Rico’s oversight board exacerbated the island’s abuses by “giving its imprimatur to an ongoing scheme … that can only be called theft.”

AP puts things into perspective as follows: Puerto Rico could announce a historic, court-supervised restructuring for a portion of its $70 billion debt. By comparison, the U.S. city of Detroit had $9.3 billion of obligations when it filed for bankruptcy in 2013 in the biggest U.S. municipal bankruptcy ever. In fact, Puerto Rico’s situation is more dire than Detroit’s because the city, in part, had a firm set of rules in bankruptcy court, an option that the U.S. territory doesn’t have, said Greg Clark, head of municipal research at Debtwire.

Ahead of the May 1 deadline, the government on Saturday offered to pay 50 cents on the dollar to holders of general obligation and sales-tax bonds backed by Puerto Rico’s constitution. Bondholders rejected the offer.

But the biggest wildcard is what happens not so much to the creditors – who will be fine no matter the outcome – but to the ordinary people of Puerto Rico if the island does go bankrupt.  Puerto Rican officials have already imposed austerity measures, including cuts to worker benefits and pensions, and have said debt cuts are needed to spare the island from even more severe cuts to quality of life.

Two years ago we (and German finmin Wolfgang Schauble) joked that Puerto Rico could be the American Greece. Now with a Puerto Rico bankruptcy “only a question of when”, it is unfortunately no longer a joke.

 

 

end

 

This is going to hurt:  Puerto Rico files for bankruptcy protection and it will be the largest ever Municipal debt restructuring

(courtesy zero hedge)

Puerto Rico Files For Bankruptcy Protection In Largest Ever US Municipal Debt Restructuring

Update: PUERTO RICO FEDERAL BOARD FILES BANKRUPTCY CASE IN U.S. COURT

* * *

As per our report last night that following the expiration of the litigation freeze, Puerto Rico’s creditors had filed a barrage of lawsuits against the insolvent Commonwealth a bankruptcy was imminent,  moments ago Puerto Rico’s governor announced the commonwealth will request bankruptcy protection of a portion of the island’s $70 billion in debt, setting up a showdown with Wall Street firms owed billions of dollars, in what will be the largest-ever U.S. municipal debt restructuring and further complicating the U.S. territory’s efforts to pull itself out of a financial crisis.

The Puerto Rico restructuring would be far larger than Detroit’s record-setting bankruptcy, with little to no details how long a court proceeding would last or what cuts would are imposed on bondholders. The island’s financial recovery plan covers less than a quarter of the debt payments due over the next decade.

Cited by AP, Gov. Ricardo Rossello said Wednesday that a federal control board overseeing the island’s finances has agreed with his request to put the debts before a court. He told reporters that he has requested that the U.S. territory’s federal financial oversight board commence a Title III proceeding under last year’s Puerto Rico rescue law known as PROMESA. Title III is an in-court debt restructuring process similar to U.S. Bankruptcy.

“We have reached this decision because it protects the best interests of the people of Puerto Rico,” Rossello said.

“The board has agreed to submit Title III protection immediately and they will submit it.”

According to the WSJ, “the governor said he would petition Puerto Rico’s federal oversight board to invoke a quasi-bankruptcy law that puts its standoff with creditors before a judge. His decision marks the start to what could be a lengthy legal fight as Wall Street watches closely to see how other indebted municipal governments may fare in confrontations with investors.”

As a reminder, Puerto Rico and its agencies owe $73 billion to creditors, dwarfing the roughly $18 billion owed by the city of Detroit when it entered what was previously the largest municipal bankruptcy in 2013.

Finally, Bloomberg notes that the financial collapse promises to impose deep losses on bondholders who for years snapped up Puerto Rico’s securities, even as the government contended with a shrinking economy and chronic budget shortfalls. U.S. states can’t file for bankruptcy, and investors bought the bonds assured that it wasn’t a legal option for Puerto Rico either.

BBG further adds that Rossello’s latest offers to creditors last week shows the commonwealth believes general obligations should receive a better recovery than its sales-tax bonds. The latest proposal offered as much as 90 cents on the dollar to general-obligation bondholders. One such bond due in 2035, was among the most actively traded at a price of 66, up from 64.7 on Tuesday.

Conditions are not good in Baltimore as the Feds heed to the Mayor’s plea and sends in help as “murder is out of control”

(courtesy zero hedge)

Feds Send In Reinforcements After Baltimore Mayor Pleads For Help: “Murder Is Out Of Control”

There have been 108 homicides so far this year in the city of Baltimore.  According to the Baltimore Sun, there were five murders in the city just last weekend alone.

The only year that Baltimore has ever come close to recording so many murders in just the first 4 months of the year was in 1993 during the height of America’s gang wars that plagued inner cities all across the country.  In that year, some 24 years ago, 110 people were killed through the end of April. The city went on to record 353 homicides that year, the most in its history.  That said, Baltimore has about 110,000 fewer residents now than in 1993, making this year’s murder rate the highest ever, on a per capita basis.

Meanwhile, if the level of violent crime in Baltimore continues at the same rate as the first four months, for the remainder of the year, the city will blow right through the previous all time record high 353 homicides from 1993.

Baltimore

 

Therefore, it should come as little surprise that just yesterday we noted that Baltimore Mayor Catherine Pugh had publicly requested federal help from the FBI to combat the surging homicide rates in her city.  Per CBS Baltimore:

“I’m calling on all the assistance we can possibly get because I can’t imagine going into our summer months with our crime rate where it is today, what that’s going to look like by the end of the summer.”

 

“Murder is out of control.”

 

“We are looking for all the help that we can get.”

Now, just one day after a plea for help from a concerned mayor, the ATF has announced plans to send in reinforcements to help fight Baltimore’s surging violent crime…

On Tuesday, the Bureau of Alcohol, Tobacco, Firearms and Explosives plans to begin using a gun-tracing van in Baltimore to try to quickly solve gun crimes.

 

Daniel L. Board Jr., the ATF Baltimore Field Division special agent in charge, called the gun-tracing technology and the national database it connects to a “critical piece to solving and preventing gun violence in Baltimore.”

 

Bond said the van will be “a tremendous asset to Baltimore by supporting a timely and comprehensive collection of firearm-related evidence at crime scenes, which in turn will help us reduce and prevent violent crime.”

 

The network is used by law enforcement throughout the United States to generate leads in gun-related crimes. The van will be deployed in Baltimore starting this week and will be available throughout portions of the spring and summer, federal officials said.

…reinforcements which were gratefully received by concerned city officials.

“We’re grateful to the federal intervention in the city of Baltimore,” Pugh said. “We are looking for all the help we can get. Murder is out of control. There are too many guns on the streets.”

City Councilman Brandon Scott, chairman of the council’s Public Safety Committee, said he welcomed the federal resources.

 

“Every little bit helps,” Scott said. “It’s clear we have to do things differently. What we’re doing currently isn’t working. The strategy isn’t working.”

Ironically, Martin O’Malley, the former Mayor of Baltimore and a Democratic candidate for President in the 2016 election, took to his blog to advocate for cops to take a harsh stand against violent crime with a “zero tolerance” policy.

Former mayor and governor Martin O’Malley wrote in a recent blog post that “sadly, my own hometown of Baltimore chose to forget a lot of hard-earned lessons learned about crime reduction.”

 

O’Malley was known for a data-based policing policy that resulted in high arrest rates. While homicides and other crime declined, the “zero tolerance” policy was blamed in a Department of Justice report for harming the relationship between the police and the community.

Of course, such advocacy from a democrat is surprising in light of the efforts taken by Obama’s DOJ to intentionally undermine the authority of cops by labeling excessive enforcement actions as inherently ‘racist’ (for example, see: “DOJ Finds Pattern Of “Racial Discrimination” And Unconstitutional Use Of Force By Chicago Police“)

 

 

end

 

Usually the ADP report is glowing with employment gaines.  However the April ADP showed only  a 177,000 gain and the lowest growth in jobs since Oct 2016:

(courtesy/ADP/zero hedge)

 

ADP Employment Gains Slump To Weakest Since Trump – Weather & Amazon.com Blamed

After somewhat surprsingly surging to its highest levels since Dec 2014 in March (4 sigma beat), April ADP tumbled to 177k (and March was revised lower from 263k to 255k). This is the lowest growth in jobs since October 2016 – pre-Trump – with service-producing jobs gaining dramaticaly more than goods-producing (165k vs 12k).

The collapse in both ISM’s Manufacturing and Services Employment sub-indices suggested notable downside for jobs in April and sure enough the ADP print corrected and was revised lower…

 

Medium-sized companies (50-499 employees) added the most jobs (78 of the 177k) and large businesses the least (38 of the 177k).

Some comments from the report authors:

“In April we saw a moderate slowdown from the strong pace of hiring in the first quarter,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Despite a dip in job creation, the growth is more than strong enough to accommodate the growing population as the labor market nears full employment. Looking across company sizes, midsized businesses showed persistent growth for the past six months.”

Mark Zandi, chief economist of Moody’s Analytics said, “Job growth slowed in April due to a pullback in construction and retail jobs. The softness in construction is continued payback from outsized growth during the mild winter. Brick-and-mortar retailers cut jobs in response to withering competition from online merchants.”

The data charted:

Change in Nonfarm Private Employment

Change in Total Nonfarm Private Employment

 

Change in Total Nonfarm Private Employment by Company Size

Change in private employment by Selected Industry

 

And the always entertaining ADP infographic

<br /> ADP National Employment Report: Private Sector Employment Increased by 177,000 Jobs in April<br /> http://www.adpemploymentreport.com/2017/April/NER/images/infographic/mai…&#8221; width=”598″ />

 

end

Maybe Janet should have a look at these “transitory” inventory numbers for GM cars in the uSA:

its inventory has now hit a 10 yr high and it has not been this high since Nov 2007

(courtesy zero hedge)

 

GM Auto Inventory Hits 10 Year High: Most Since November 2007, One Month Before The Recession Started

When we summarized yesterday’s disappointing monthly car sales report, which badly missing expectations showing the fourth consecutive month of declining auto sales – the first time this has happened since July 2009 –  we noted what may be the biggest concern for the auto industry: inventory days continued to trend higher as OEMs push product on to dealer lots even though sale-through to end customers has seemingly stalled.

We highlighted GM, one of the few OEMs to actually disclose dealer inventories in monthly sales releases, which reported that April inventories increased to 100 days (935,758 vehicles) from 98 days at the end of March and just 71 days (681,402 vehicles) in April 2016. Indicatlvely, analysts say an overall inventory level of 60 to 70 days is healthy. 100 is not.

Of course, GM management was eager to deflect attention from this troubling statistic, and said that soaring inventories are normal and, somehow, “reflect strong sales”, as per the press release: “As planned, GM’s inventories reflect strong sales, lower car production and strategic, launch-related growth in truck and crossover stocks.”

Or maybe not, because around the time of our post, Automotive News reported Nick Bunkley pointed out something troubling: with 935,758 unsold GM units collecting dust in dealer lots, this was the highest inventory number in 9.5 years, the highest since Nov. 2007, and, as Bunkley reminds us, “one month before the recession officially began.

GM inventories now at 9.5-year high. 935,758 units (100-day supply) is most since Nov. 2007, 1 month before the recession officially began.

Here is what GM’s auto inventory since emergency from bankruptcy looks like.

Will this time the GM inventory cycle indicator be different? With widespread operating shutdowns planned in the coming weeks, it better be, or else something is far more broken with the US consumer than even the paltry 0.7% GDP would suggest.

END

More soft data nonsense: USA services rebounds despite the slump in enployment

 

(courtesy zero hedge)

US Services Sector Rebounds Despite Slump In Employment

Despite the hope-narrative-crushing drop in Manufacturing data (ISM/PMI), Services data in April (PMI/ISM) showed improvements. Markit PMI rose modestly despite continued input price inflation (21-month highs) and a plunge in employment (to its lowest growth since July 2010). ISM Services also showed employment slip but new orders exploded higher.

ISM Services printed 57.5 – above all 73 economists’ estimates…

 

With manufacturing plunging, Services apparently rebounded…

Full ISM Breakdown:

  • Business activity rose to 62.4 vs 58.9 prior month
  • New orders rose to 63.2 vs 58.9
  • Employment fell to 51.4 vs 51.6
  • Supplier deliveries rose to 53.0 vs 51.5
  • Inventory change rose to 52.5 vs 48.5
  • Prices paid rose to 57.6 vs 53.5
  • Backlog of orders rose to 53.5 vs 53
  • New export orders rose to 65.5 vs 62.5
  • Imports fell to 53.0 vs 56.5
  • Inventory sentiment fell to 60.0 vs 65.0

As miraculously, unadjusted new orders reached a record high…

 

So WTF is going on? Automation?

Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“The final services PMI came in above the earlier flash estimate but remained only marginally higher than March’s six-month low.

end

 

“Combined with a weak manufacturing PMI reading, the surveys suggest that business activity is growing at a slower pace than seen over the first quarter as a whole.

 

“However, a robust rise is likely to be seen in second quarter GDP as the official numbers exhibit greater seasonality than the PMI, with consistently weak first quarters being typically followed by a rebound in subsequent periods.

 

For this very reason, GDP data seemed to signal weaker growth than implied by the PMI in the first quarter of 2017.

 

DOJ Probing Goldman For Rigging Treasury Auctions

While we doubt anything material will emerge for various obvious reasons, the NY Post reports that the DOJ is probing Goldman Sachs for alleged Treasury auction rigging: the charge is that Goldman, one of the 23 US primary dealers, won almost all Treasury bond auctions from 2007 to about 2011 even after the Treasury department established safeguards to maintain competitiveness. The case is said to center on chats and emails showing Goldman traders sharing price information with traders at other banks:

Chats and emails believed to show Goldman traders sharing sensitive price information with traders at other banks are at the center of the case, according to sources familiar with the investigation.

 

“They didn’t lose many bids,” one person who has seen the bid data told The Post. The prices Goldman offered for Treasury bonds “would be very close” but just above offers from other banks, and typically arrived “at the end of the auction.”

While not the first time we have had news of a DOJ probe into Treasury market rigging – the Post itself reported last March virtually the same story, namely that “Goldman Sachs probed in alleged Treasury rigging“, and prior that in June of 2015 – the details are new, and suggest that collusion between the banks reaches far beyond merely FX. Also notable is the deference to Goldman by other banks, raising questions what was the quid pro quo. The timing is also notable, coming at a time when at least half a dozen Goldman Sachs alumni are in high levels of the executive branch. Which is perhaps why Goldman feels compelled to clarify that “No one has accused any bank, or Mnuchin or Cohn, of any wrongdoing.”

Some more details:

The investigation is currently focusing on Goldman’s interactions with the bedrock of the US financial system: the Treasury’s auctions for debt in the form of bonds and notes.

 

Those bonds, which are sold in about 300 auctions a year, not only finance the government’s operations, but also help set rates for everything from home mortgages to credit cards.

 

Goldman is one of 23 primary dealers that bids directly with the government and then distributes Treasury bonds to their clients. In the auctions, those primary dealers submit secret ballots before 11 a.m. for as much as 35 percent of the share of the offering. The bank with the highest bid wins.

The Post adds that the Treasury was aware of Goldman’s disproportionate winning streak at the time but “assumed that the bank was just better at pricing the bonds.” Perhaps, or maybe Goldman was just looking to frontrun other bidders: think of it as high frequency trading in one of the world’s slowest markets.

Treasury officials were aware that other major investors, including some central banks, had concerns that banks were front-running their own customers in order to make more money off of them. “There had been some nervousness on the part of large buyers,” the person said. “They were worried about being front-run sometimes.”

 

That concern contributed to a surge in direct bidders — investors who bypass the bank and try to get a chunk of the bonds through the auction process—around 2010, the source said.

 

At the time, big investors wanted “to put their money to work in the government-bond market without revealing their intentions to the primary dealers,” noted a January 2010 Wall Street Journal article about the rise in direct bidders. “When you see a surge in direct bidders, you have to ask what it means,” the person said.

Confirming that Primary Dealers felt trapped after the Post first broke news of the investigation in 2015, they promptly changed how they bid on auctions, according to the suit.

At the time that the rigging is believed the have happened, Cohn was the No. 2 person at Goldman, behind CEO Lloyd Blankfein. In Cohn’s position as president and co-chief operating officer — a position he later ran by himself — he oversaw the unit of the bank that submitted the bids to Treasury.”

Which is likely why if and when the DOJ finally cracks down on the responsible parties, Goldman’s name, despite its dominance in TSY auctions in the 2007-2011 period, will not be named. Conveniently for the bank that has spawned more central bankers and politicians in the modern era than anyone else, at least four other banks are being investigated for colluding with Goldman traders: Deutsche Bank, Royal Bank of Scotland, UBS, and BNP Paribas.

Treasury officials under former secretary, Jacob Lew, told the Post they found the investigation highly embarrassing, and pressed for a quick resolution of the probe. At least four other agencies—the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the New York Department of Financial Services, as well as the European Commission—are looking into the alleged rigging.

And at least when it comes to Goldman, they will find nothing wrong

 

 

end

 

The House may have enough votes to repeal Obamacare.  If so it may be voted upon on Saturday.  However it probably has no chance of passing in the Senate

(courtesy zero hedge)

Obamacare Repeal Suddenly Looks Possible After Two Key GOP Holdouts Flip

In what may be a critical flip for the passage of the Republican healthcare bill – not to mention boosting Trump’s image as dealmaker – moments ago Republican reps. Fred Upton and Billy Long both said Wednesday they will support the GOP’s ObamaCare repeal-and-replace bill with the addition of a new amendment Upton drafted. Until this morning, both had opposed the bill, and prompted us to write on Monday that Republicans are just one vote away from failure again.

The two Republicans told reporters at the White House after a meeting with President Trump that they are ready to vote for the bill once a new amendment Upton helped devise – which would boost funding for people with pre-existing conditions – is added. The amendment would provide $8 billion over the next 5 years to reduce premiums and other costs for those with pre-existing conditions who have a gap in coverage and reside in states that received waivers from some of Obamacare’s requirements.

Quoted by Bloomberg, Upton said that “I think it is likely now to pass the House” but hedged, adding that he’s “not in the whip count” and can’t definitively say there are enough votes for the bill to pass.  Upton said a vote could be held as soon as Thursday.

Majority Whip Steve Scalise told The Hill that the Upton amendment meant that he was putting both Upton and Long back in the “yes” column for his internal whip count. House GOP Conference Chairwoman Cathy McMorris Rodgers (R-Wash.) told The Hill the late change “absolutely” added net votes to the GOP tally.

Then again, maybe this is just the latest optimistic “false alarm”: Rep. Charlie Dent, a co-chairman of a group of House Republican moderates, said he still opposes the health bill, even with the latest changes. Another leading moderate, Leonard Lance of New Jersey, said he also hasn’t been swayed by the changes.

Further details from Bloomberg:

Democrats immediately blasted the change, with Senate Minority Leader Chuck Schumer saying: “The proposed Upton amendment is like administering cough medicine to someone with stage 4 cancer.”

 

Other Republicans haven’t seen details or text of the amendment, but health-care experts said the added funding is unlikely to make a big difference, unless very few states receive those waivers.

Other similary did not express much confidence: the $8 billion in funding is a “drop in the bucket,” said Matt Fiedler, a fellow at the Brookings Institution’s Center for Health Policy. He said the funding, even including the bill’s stability fund and risk-pool funding, wouldn’t be enough to fully protect people with pre-existing conditions from facing higher costs.

Still, it was enough for the White House which earlier expressed optimism, with budget director Mick Mulvaney telling Fox News on Wednesday that the chamber might vote on the health bill as early as Saturday. Mulvaney said he believes the amendment by Upton – the most significant Republican defection yet on Tuesday – will help draw moderates’ support for the legislation.

 

 

end

 

I will leave you tonight with this great interview of Axel Merk and Greg Hunter.

he is bang on with respect to China!

(courtesy Greg Hunter/USAWatchdog)

These Markets Can Be Tipped Over by Anything-Axel Merk

By Greg Hunter On May 3, 2017 In Market Analysis

http://usawatchdog.com/wp-content/uploads/2017/05/Alex- Merk.jpg http://usawatchdog.com/wp-content/uploads/2017/05/Alex- Merk.jpgBy Greg Hunter’s USAWatchdog.com

Money manager Axel Merk has a lot of uncertainty to navigate these days between the extreme geopolitical risks, such as China’s neighbor, North Korea, and heavy debt loads that are ballooning budget deficits. Merk says, “It’s amazing. If you are not confused, you are probably not paying attention. I am very worried when asset prices are very expensive, what’s going to happen to them. The thing I am most worried about is how a trade war might derail things. I don’t think a trade war is going to happen because of a border tax. . . . I think it’s going to happen because the Chinese are going to feel bullied or pushed by the Americans. Be that because of the THAAD System in South Korea or be that because of the islands being built up in the South China Sea, and the U.S. trying to push them back. The Chinese are potentially going to make things unbearable for corporate America. That’s what is going to have an impact on the markets and not what the President Tweets about what he likes or dislikes.”

Merk, who manages hundreds of millions of dollars, thinks the global economy is fragile and could be taken down by a variety of things, including the next federal budget deal in October. Merk says, “These October budget deadlines should be taken very seriously. It’s not so much I am too concerned about a government shutdown. If that were to happen, the markets haven’t fallen out of bed, although you never know what is going to derail the market. I happen to think these markets can be tipped over by anything. With hindsight, I’ll be able to tell you with certainty that it was a shutdown, or something in the South China Sea, or maybe some leader coughing somewhere. More importantly, in these October deadlines, some real reform can be pushed through. Nothing gets the administration moving like a good crisis.”

Merk says he sees a bubble when he looks at the sky high financial markets. Merk explains, “To me, the complacency expressed as volatility is the best bubble indicator. In the late 1990’s, I got out of stocks. In 2007, I got almost entirely out of stocks. The reason was you were in this Goldilocks economy. . . . It’s difficult to time exactly when the top is, but when volatility is low and asset prices move higher . . . at the very least, I would encourage people as things go up, you take some chips off the table. You rebalance, and people haven’t done it because there is nothing good to put it in. So, instead, people are trying to buy insurance or this or that. Cut it out. Be honest and take some chips off the table, and if nothing else, hold some cash.”

Merk contends the “easiest diversifier is gold.” Merk explains, “I do very much have gold. I have it in physical form and exchange traded form and other means of investing in gold. Yes, I say it’s the easiest diversifier. It’s not always the best diversifier. Again, I do like it. The reason why I say easy rather than best is if you do it for portfolio allocation, what you want is something that has a positive return and has a low correlation to what you have. In the long run, gold has proven that. . . . Since the early 1970s, gold has had an annual return of 8%. Going forward, people say yeah, but it doesn’t pay any interest. Maybe what is paying interest does not pay you a real rate of return. Otherwise, gold would not have an average 8% return per year. Even though the Fed is raising rates, I think the Fed is going to be behind the curve. So, I think gold will be doing just fine.”

Join Greg Hunter as he goes One-on-One with money manager Axel Merk, Founder ofMerkInvestments.com.

Video Link

http://usawatchdog.com/these-markets-can-be-tipped-over- by-anything-axel-merk/

-END-

Well that is all for today

I will see you tomorrow night

h.

 

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2 comments

  1. Harvey your work is very much appreciated!

    Like

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