May 9/The amount standing for physical silver increases for the 7th straight day: now up to 21.9 million oz/Markets react to North Korean ambassador’s war like rhetoric/Trump approves a plan to arm the Syrian Kurds: Turkey is not happy!/The Atlanta Fed drops 2nd quarter estimates down to 3.6%/

Gold: $1216.63  DOWN $11.07

Silver: $16.09  DOWN 18  cent(s)

Closing access prices:

Gold $1220.40

silver: $16.16










Premium of Shanghai 2nd fix/NY:$11.64


LONDON FIRST GOLD FIX:  5:30 am est  $1225.15




For comex gold:



 TOTAL NOTICES SO FAR: 412 FOR 41,200 OZ    (1.2814 TONNES)

For silver:

For silver: MAY


Total number of notices filed so far this month: 4192 for 20,960,000 oz



For 7 consecutive days, the amount standing for physical has risen.  On First day notice 16.8 million oz were standing; tonight 21.91 million oz. It looks to me that sovereign China wants its silver back.

stay tuned on this development..

Let us have a look at the data for today



In silver, the total open interest SURPRISINGLY ROSE BY 3,282  contracts UP to 193,587  DESPITE THE SLIGHT FALL IN PRICE THAT SILVER TOOK WITH RESPECT TO YESTERDAY’S TRADING (DOWN  1 CENT(S). In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.968 BILLION TO BE EXACT or 138% of annual global silver production (ex Russia & ex China).


In gold, the total comex gold FELL BY 5,985 contracts DESPITE THE SLIGHT RISE IN THE PRICE OF GOLD ($0.50 with YESTERDAY’S TRADING). The total gold OI stands at 437,358 contracts.  We are only 45,000 contracts away from rock bottom OI.

we had 38 notice(s) filed upon for 3800 oz of gold.


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


We had a big change in tonnes of gold at the GLD: a withdrawal of 1.19 tonnes

Inventory rests tonight: 851.89 tonnes



Strange!!!  Again we had no changes in silver inventory at the SLV today.

THE SLV Inventory rests at: 334.777 million oz Silver has been down 15 out of the last 16 days and yet nothing moves out of SLV???



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

1. Today, we had the open interest in silver ROSE BY 3282 contracts UP TO 1943.587, (AND NOW CLOSER TO  THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21 AT 234,787), DESPITE THE SMALL FALL IN PRICE FOR SILVER YESTERDAY (1 CENT(S)).

(report Harvey)


2.a) The Shanghai and London gold fix report



2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg



i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 1.91 POINTS OR .06%  OR / /Hang Sang CLOSED UP 311.12 POINTS OR 1.27% .  The Nikkei closed DOWN 52.70 POINTS OR 0.26%/Australia’s all ordinaires  CLOSED DOWN .40%/Chinese yuan (ONSHORE) closed DOWN at 6.9066/Oil UP to 46.54 dollars per barrel for WTI and 49.36 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT SPAIN   ..Offshore yuan trades  6.9166 yuan to the dollar vs 6.9066 for onshore yuan. NOW  THE OFFSHORE IS A LOT WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS  MUCH WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT A HAPPY CAMPER THIS MORNING




( zero hedge)


The markets seems to react to the words spoken by the North Korean Ambassador that they are ready to turn to ashes any USA strategic asset

( zerohedge)


This is not good for Japan as it continues to face the vicious monster, deflation.  Today wages fell at the fastest pace in 2 years and thus the stopping of QE is still distant despite the fact that they are running out of things to buy (QE)

( zero hedge)


My goodness:  banks are actually asking for real collateral? The following is extremely important and one of the points that Kyle Bass has warned us about: suspension of interbank business:

( zero hedge)




Turkey is not going to like this:  Trump approves a plan to direct arm the Syrian Kurds.  The Turkish lira tumbles badly on the news:

( zero hedge)



Canada is going in the same direction as Americans: 1/2 of all Canadians have 200 dollars or less in savings!

( zero hedge)


WTI spurts higher of biggest crude draw since 2016:

( zerohedge)



i)Bitcoin at 1700 dollars with gold at $1220.  So much for the CFTC’s mantra that the futures are a price discovery mechanism

( zero hedge)

ii)Ed Steer talks about the comex:

( Ed Steer/GATA)

iii)As we highlighted to you over these past few days, India’s imports of gold in April is double last year at 75 tonnes.  The country is back to normal. If we extrapolate 75 tonnes x 12 we get 900 tonnes which is very high.  However you must consider smuggling which is now part of their normal routine for getting gold as citizens try and avoid duty taxes of 10%l  Figure another 200-300 tonnes comes in through this route.

( Reuters/GATA)


iv)the LME will introduce a new gold/silver trading on July 10.  The investor has the option of a physical or cash settlement.

If the majority should choose the physical route, this platform will end in no time as already gold is in slight backwardation in London.

( GATA/South China Morning Post/Hong Kong)

v)A must read as Von Greyerz describes in detail the paper fraud orchestrated by bullion bankers and central bankers

( Egon Von Greyerz/GATA?Kingworldnews)

vi)Eric Sprott and First Majestic Silver;s CEO Keith Neumeyer discuss the irony of how junior miners are facing problems due to low prices which in turn is caused by lower bullion prices

( SGT report/GATA/Eric Sprott/Keith Neumeyer)

vii) Simon Black on silver

( Simon Black/


viii  Bill Holter’s public article for today


“Why you shouldn’t wear a nose ring?” (Public Article)

ix)This does not bode well for Chinese trading tonight:  Iron ore plummets again to 60. dollar per dry tonne and it is heading for a return to the 50 dollar range:

( zero hedge)



10. USA stories

i)This will be another drag on first quarter GDP as wholesale sales growth stalls in March. This may cause the finalized number to fall into the negative category.

( zero hedge)

ii)The JOLTS data seems to suggest a slight tightening in market conditions

(courtesy zero hedge)

(courtesy zerohedge)

iv)Economic confidence slumps to the lowest level since the trump election

(courtesy zero hedge)

v)Trump fires FBI director Comey

(courtesy zerohedge)

vi)The 2018 premiums in Obamacare are set to skyrocket on top of the huge premium rise in 2017.  And guess what they are blaming Trump:

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 25,985 CONTRACTS DOWN to an OI level of 437,358 DESPITE THE SLIGHT RISE IN THE PRICE OF GOLD ( $0.50 with YESTERDAY’S trading).   The longs I guess had had enough  as they finally liquidated some of their contracts with the constant torment they received over the past two weeks.  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 GAIN OF 16 contract(s) RISING TO 78. We had 15 notices filed yesterday so we GAINED 31 contracts or an additional 3100 oz are standing for delivery and no contracts 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 A WHOPPING 16,848 contracts DOWN to 255,800.  The non active July contract gained another 70 contracts to stand at 338 contracts. The next big active month is August and here the OI gained 9617 contracts up to 90,563.

We had 38 notice(s) filed upon today for 3800 oz

And now for the wild silver comex results.  Total silver OI ROSE BY A HUGE 3282 contracts FROM  190,305 UP TO 193,587  DESPITE FRIDAY’S SLIGHT 1 CENT PRICE FALL. We again probably had  some attempted short covering by the banks which did not succeed much.
We are in the active delivery month is MAY  Here the open interest LOST 25 contracts FALLING TO 274 contracts. MY GOODNESS!! IT HAPPENED AGAIN!! We had 99 notices filed on today, so we gained another 74 notices or an additional 370,000 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 for 7 straight days of the delivery cycle starting immediately after first day notice. No wonder JPMorgan is getting ready for a physical attack at the comex. I have never seen anything like this!!

The non active June contract LOST 8 contracts to stand at 914. The next big active month will be July and here the OI strangely gained 2757 contracts up to 149,072.

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 85 notice(s) filed for 425,000 oz for the MAY 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 238,780 contracts which is good

Yesterday’s confirmed volume was 229,725 contracts  which is good.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for MAY
 May 9/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
 nil oz
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
nil oz
No of oz served (contracts) today
38 notice(s)
3800 OZ
No of oz to be served (notices)
40 contracts
4000 oz
Total monthly oz gold served (contracts) so far this month
412 notices
41,200 oz
1.2814 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   47,788.3 oz
Today we HAD  0 kilobar transaction(s)/
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 0 customer withdrawal(s)
total customer withdrawal: nil 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 38 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

To calculate the initial total number of gold ounces standing for the MAY. contract month, we take the total number of notices filed so far for the month (412) x 100 oz or 41200 oz, to which we add the difference between the open interest for the front month of MAY (78 contracts) minus the number of notices served upon today (38) x 100 oz per contract equals 45,200 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 (412) x 100 oz  or ounces + {(78)OI for the front month  minus the number of  notices served upon today (38) x 100 oz which equals 45,400 oz standing in this non active delivery month of MAY  (1.4059 tonnes).  We gained 31 contracts or an additional 3100 oz are standing for delivery and 0 contracts were cash settled through the EFP route where they received a fiat bonus plus a futures contract in a private deal with the bankers.
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/  1.4099 TONNES
total for the 17 months;  249.014 tonnes
average 14.647 tonnes per month
Total dealer inventory 915,933.163 or 28.489 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,928,728.793 or 277.72 tonnes 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 277.72 tonnes for a  loss of 25  tonnes over that period.  Since August 8/2016 we have lost 76 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
And now for silver
MAY INITIAL standings
 May 9. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
nil oz
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 981,737.800  oz
No of oz served today (contracts)
(425,000 OZ)
No of oz to be served (notices)
189 contracts
( 945,000 oz)
Total monthly oz silver served (contracts) 4192 contracts (20,960,000 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  3,782,505.0 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):
 We had 1 Customer deposits:
 i) into Scotia; 981,737.800 oz
***deposits into JPMorgan have now stopped 
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  981,737.800 oz
 we had 0 adjustment(s)
The total number of notices filed today for the MAY. contract month is represented by 85 contract(s) for 425,000 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 4192 x 5,000 oz  = 20,960,000 oz to which we add the difference between the open interest for the front month of MAY (274) and the number of notices served upon today (85) x 5000 oz equals the number of ounces standing


Thus the initial standings for silver for the MAY contract month:  4192(notices served so far)x 5000 oz  + OI for front month of APRIL.(274 ) -number of notices served upon today (85)x 5000 oz  equals  21,905,000 oz  of silver standing for the MAY contract month.
We actually gained another 74 contracts or an additional 370,000 oz will stand for delivery and again nobody wished to accept an EFP contract for a fiat bonus. It probably means that the entire 21.91 million oz that are 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 (THROUGH THE EFP) 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 now had on 7 consecutive days, an increase in amount standing for silver.  For the past several years, this has never happened during an active silver delivery month.  Ladies and gentlemen:  the silver comex is being attacked for its physical metal and the attacker is Sovereign China. 
Volumes: for silver comex
Today the estimated volume was 64,280 which is excellent
Yesterday’s  confirmed volume was 57,633 contracts which is excellent
Total dealer silver:  33.541 million (close to record low inventory  
Total number of dealer and customer silver:   197.934 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

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.2 percent to NAV usa funds and Negative 7.3% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.4%
Percentage of fund in silver:37.5%
cash .+0.1%( May 9/2017) 
2. Sprott silver fund (PSLV): Premium FALLS TO   +.04%!!!! NAV (May 9/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.73% to NAV  ( May 9 /2017)
Note: Sprott silver trust back  into POSITIVE territory at +.04% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.73%/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…

Toronto-based Sprott Inc. said Wednesday it’s making an all-share hostile takeover bid worth $3.1 billion US for rival bullion holder Central Fund of Canada Ltd.

The money-management firm has filed an application with the Court of Queen’s Bench of Alberta seeking to allow shareholders of Calgary-based Central Fund to swap their shares for ones in a newly-formed trust that would be substantially similar to Sprott’s existing precious metal holding entities.

The company is going through the courts after its efforts to strike a friendly deal were rebuffed by the Spicer family that controls Central Fund, said Sprott spokesman Glen Williams.

“They weren’t interested in having those discussions,” Williams said.

 Sprott is using the courts to try to give holders of the 252 million non-voting class A shares a say in takeover bids, which Central Fund explicitly states they have no right to participate in. That voting right is reserved for the 40,000 common shares outstanding, which the family of J.C. Stefan Spicer, chairman and CEO of Central Fund, control.

If successful through the courts, Sprott would then need the support of two-thirds of shareholder votes to close the takeover deal, but there’s no guarantee they will make it that far.

“It is unusual to go this route,” said Williams. “There’s no specific precedent where this has worked.”

Sprott did have success last year in taking over Central GoldTrust, a similar fund that was controlled by the Spicer family, after securing support from more than 96 percent of shareholder votes cast.

The firm says Central Fund’s shares are trading at a discount to net asset value and a takeover by Sprott could unlock US$304 million in shareholder value.

Central Fund did not have any immediate comment on the unsolicited offer. Williams said Sprott had not yet heard from Central Fund on the proposal but that some shareholders had already contacted them to voice their support.

Sprott’s existing precious metal holding companies are designed to allow investors to own gold and other metals without having to worry about taking care of the physical bullion.


And now the Gold inventory at the GLD

May 9/a withdrawal of 1.19 tonnes from the GLD/Inventory rests tonight at 851.08 tonnes

May 8/no change in inventory at the GLD/Inventory rests at 853.08 tonnes

May 5/no changes in inventory at the GLD/Inventory rests at 853.08 tonnes

May 4/A tiny change in inventory at the GLD /a withdrawal of .28 tonnes to pay for fees/inventory rests at 853.08 tonnes

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

May 9 /2017/ Inventory rests tonight at 851.89 tonnes


Now the SLV Inventory

may 9Again, no movement of inventory at the SLV. Inventory rests at 334.777 million oz

May 8/no change in silver inventory at the SLV/inventory rests at 334.777 million oz/

May 5/Strange!! no change in silver inventory at the SLV/Inventory rests tonight at 334.777 million oz

May 4/a very tiny withdrawal of 144,000 oz to pay for fees/inventory rests tonight at 334.777 million oz/

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 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
May 9.2017: Inventory 334.777  million oz

Major gold/silver trading/commentaries for TUESDAY



Silver Investment Case Remains Extremely Compelling

Silver Investment Case Remains Very Compelling

Are we near a turning point in silver’s relentless decline?
Avert your eyes – this is one ugly silver chart
Gold silver ratio at 75 shows real value of silver
Mining CEO explains why silver could reach $136.67
Buy silver low, sell high

Money Week

The silver price has been in sharp decline for three weeks and silver prices have fallen from $18.61 on April 16 to $16.20/oz today.

However, every cloud has a silver lining and for Dominic Frisby writing in Money Week, silver is the silver lining and the silver investment case remains compelling.

Silver in USD – 12 Months

Many concur with Frisby including the CEO of one of the largest silver mining companies in the world who believes silver could reach as high as the very exact figure of $136.67/oz as pointed out by Sovereign Man.

We agree and believe investors and ‘silver stackers’ alike will again be well served by dollar, pound and euro cost averaging into a silver investment and accumulating silver coins and bars on this latest artificial, manipulative futures price dip



Gold trading this morning:

Gold Drops Below Macron Lows, Breaks Key Technical Level

Amid heavy volume, gold futures have broken below their 100-day moving average this morning and are trading below the mini-flash-crash lows from Sunday night’s relief at Macron’s victory



This has pushed gold to 2-month lows…


But the Gold-to-Silver ratio hovers above 75x at pre-Brexit highs…


Bitcoin at 1700 dollars with gold at 1220.  So much for the CFTC’s mantra that the futures are a price discovery mechanism

(courtesy zero hedge)

Bitcoin Soars Over $1700 – 2017’s Best-Performing Currency

Bitcoin is now up for 16 of the last 18 days, soaring over 50% in the last month and up almost 90% in 2017 – making its the year’s best performing currency.

There appears to be no specitic catalyst for today’s move as the surge in Japanese interest (as we detailed here) and news that Russia is considering, like Japan just did, to allow cryptocurrencies as a legal payment method are outweighing fears over ‘hard forks’, SEC rejections, and Chinese crackdowns.


One wonders whether this ‘spurious’ correlation has anything to do with Bitcoin’s rise – as Venezuela’s black market Bolivar plunges into hyperinflationary collapse, non-fiat currencies are bid…

We summarized the ongoing bitcoin frenzy as follows last week: “just as the Chinese bubble frenzy in bitcoin is fading, it may be replaced with a new one, in which thousands of Mrs. Watanabe traders shift their attention away from the FX market and toward digital currencies” and added that “If the transition is seamless, there is no telling just how far this particular bubble can grow.”

Five days later and $250 dollar higher, we are observing first hand how accurate this prediction may have been, although like last week, we have no way of telling how long this particular mania phase will last.




Ed Steer talks about the comex:

(courtesy Ed Steer/GATA)

Ed Steer: Are JPMorgan et al. done yet?


9:35a ET Monday, May 8, 2017

Dear Friend of GATA and Gold:

Saturday’s Gold & Silver Digest letter by GATA Board of Directors member Ed Steer has been posted in the clear at GoldSeek under the headline “So … Are JPMorgan et al. Done Yet?” You can find it here:

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


As we highlighted to you over these past few days, India’s imports of gold in April is double last year at 75 tonnes.  The country is back to normal. If we extrapolate 75 tonnes x 12 we get 900 tonnes which is very high.  However you must consider smuggling which is now part of their normal routine for getting gold as citizens try and avoid duty taxes of 10%l  Figure another 200-300 tonnes comes in through this route.


(courtesy Reuters/GATA)


India’s April gold imports more than double from year ago, GFMS says


By Rajendra Jadhav
Monday, May 8, 2017

MUMBAI, India — India’s gold imports in April more than doubled from a year ago to 75 tonnes on strong demand during a festival that prompts purchases and as jewellers stocked up ahead of a new national sales tax, provisional data from consultancy GFMS showed.

The rise in imports by the world’s second-biggest consumer of the precious metal will likely support global prices that are near their lowest in seven weeks, but could widen the South Asian country’s trade deficit.

Indians in the last week of April celebrated the annual Hindu and Jain holy festival of Akshaya Tritiya, when buying gold is considered auspicious.

“Retail demand was good during Akshay Tritiya. Many jewellers were stocking ahead of implementation of GST (Goods and Services Tax) in July,” said Sudheesh Nambiath, a senior analyst at GFMS, a division of Thomson Reuters, said today. …

… For the remainder of the report:





the LME will introduce a new gold/silver trading on July 10.  The investor has the option of a physical or cash settlement.

If the majority should choose the physical route, this platform will end in no time as already gold is in slight backwardation in London.

(courtesy GATA/South China Morning Post/Hong Kong)


LME introduces gold and silver trading on July 10


By Enoch Yiu
South China Morning Post, Hong Kong
Monday, May 8, 2017

London Metal Exchange, a subsidiary of Hong Kong Exchanges and Clearing, will launch gold and silver spot and futures trading in London on July 10 in a bid to capture the increasing demand for trading of precious metals in London, the exchange said today.

The LME gold and silver product will launch at a time when HKEX is planning to introduce gold futures in the third quarter of this year should it secure approval from the Securities and Futures Commission. The trading in the two markets, however, would remain separate, and there will be no cross trading.

“The HKEX and the LME gold products would be traded in different markets and different time zone,” said Kate Eded, LME head of precious metals who was speaking at a workshop in Hong Kong on Monday.

The gold and silver contracts to be launched at the LME would be traded in U.S. dollar, which will include spot trading and trading of future contracts with a maturity of up to five years. Investors could choose cash or physical settlement. Five banks including Morgan Stanley and Goldman Sachs would help quote prices to maintain liquidity of the markets. …

… For the remainder of the report:…



A must read as Von Greyerz describes in detail the paper fraud orchestrated by bullion bankers and central bankers

(courtesy Egon Von Greyerz/GATA?Kingworldnews)

Gold leasing by central banks is used to attack gold price, von Greyerz tells KWN


10:40a ET Monday, May 8, 2017

Dear Friend of GATA and Gold:

Swiss gold fund manager Egon von Greyerz, interviewed by King World News, notes that gold leasing by central banks is largely responsible for attacks on the gold price. The attacks, von Greyerz says, is shaking out the weak hands in the market but also costing central banks metal that they’ll never recover. Von Greyerz’s remarks are posted at KWN here:…

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




Eric Sprott and First Majestic Silver;s CEO Keith Neumeyer discuss the irony of how junior miners are facing problems due to low prices which in turn is caused by lower bullion prices

(courtesy SGT report/GATA/Eric Sprott/Keith Neumeyer)


Sprott, Neumeyer explain how too much demand drove junior miner prices down


11a ET Monday, May 8, 2017

Dear Friend of GATA and Gold:

Interviewed by the SGT Report, Sprott Asset Management founder Eric Sprott and First Majestic Silver CEO Keith Neumeyer discuss the irony of how too much interest in the junior gold mining stock fund GDXJ has prompted heavy selling of junior mining shares and driven their prices down. They are also asked about the suppression of gold and silver prices by the creation of seemingly infinite amounts of contracts for metal that doesn’t exist. The interview is 32 minutes long and can be heard at You Tube here:…

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




Simon Black on silver

(courtesy Simon Black/

Mining CEO Explains Why Silver Could Reach Over $136

Authored by Simon Black via,

His remarks started off like dozens of presentations that I had heard so many times before. . .

“Without silver,” began the speaker, “our entire society would go back to the Stone Age.”

The speaker was the CEO of one of the largest silver mining companies in the world, and he was a special keynote at the annual closed-door meeting of the Atlas 400.

CEOs of mining companies almost always start their presentations talking about how important their mineral is.

“If we didn’t have cobalt we would all be cave men again. . .” or “Without molybdenum our modern technology would cease to exist.”

It sounds impressive, but the same story applies to just about every industrial commodity in the world, from copper to lumber to recycled steel.

It’s hardly an original argument and doesn’t impress me enough to be bullish on their mineral.

The real investment thesis about silver is that it’s a precious metal that has industrial qualities and a long-standing tradition of value.

Like gold, silver was an ancient form of money. And for good reason.

Out of the 118 known elements that exist on the periodic table, gold and silver share certain chemical properties that made them ideal as a medium of exchange to our ancestors.

Gold and silver are solid at normal temperatures (as opposed to Helium). They’re not radioactive (like Plutonium).

They’re not explosive when they come into contact with water (like Cesium), nor do they rust when they get wet (like Iron).

Most importantly, gold and silver are rare enough to be valuable, but not so rare that it would be almost impossible to mine more.

Between the two, gold is obviously more rare… hence the higher price.

There’s an old estimate from the US Geological Survey from the late 1960s suggesting that the ratio of silver to gold in the earth’s crust is about 21:1.

(So assuming that’s true, the theoretical price ratio between the two should be around 21:1)

And in ancient times the price ratio between the two metals was frequently in the range of about 15:1, i.e. one ounce of gold was worth 15 ounces of silver.

Today the ratio is about 75, based on a gold price of about $1230 per ounce, and a silver price of $16.35.

This is fairly high even by modern standards as the long-term average over the past several decades is about 50.

This would suggest that silver should in increase in price relative to gold in order for the ratio to return to its historic average.

(A ratio of 50:1 would imply a silver price of $24.60 based on a gold price of $1230.)

Now, all of this is an argument that many of us have heard before.

But I did learn something over the weekend from the mining CEO; he told us that the current mining production ratio between the two metals is about 9:1.

This means that 9 ounces of silver are mined for every 1 ounce of gold that’s mined.

This is very interesting from a supply/demand perspective.

According to the Silver Institute, demand for silver hit an all-time high in 2016.

But the price of silver, at least relative to gold, is hovering near a multi-year low at 75:1. (Again, the historic average is around 50:1).

Moreover, even though the price is 75:1, the new supply of silver is only 9:1.

In theory if the new metal supply is 9:1, then the price should be 9:1 (which would be a silver price of $136.67).

Obviously that’s a purely academic postulate; reality rarely conforms to theory. And the mining CEO wasn’t projecting a $136+ silver price.

But it seemed clear to him that there’s an unsustainably wide gulf between the gold/silver price ratio versus the gold/silver supply ratio, especially when silver demand is at an all-time high.

Commodity prices tend to move dramatically when the market realizes there’s a serious supply/demand mismatch.

That seems to be the case with silver right now.

And while it would be silly to expect $100+ silver, there are certainly credible reasons why the ratio should close the gap and move MUCH lower.

Do you have a Plan B?





This does not bode well for Chinese trading tonight:  Iron ore plummets again to 60. dollar per dry tonne and it is heading for a return to the 50 dollar range:

(courtesy zero hedge)


China Commodity Crash Accelerates As Traders “Forced To Destock”

“Iron ore doesn’t have good fundamentals,” warns one analyst as while the crackdown on leverage in Chinese capital markets (which has tightened liquidity everywhere) is the immediate catalyst, “supply-side pressure is huge as ever, and mills are still seeking to draw down inventories.”

As Bloomberg reports,iron ore futures are under pressure again in Asia — signaling a possible return to the $50s for the benchmark spot price — as concern builds about the outlook for rising supply and China’s clampdown on leverage ripples through markets, possibly triggering forced sales. The most-active contract in Dalian lost as much as 1.8 percent, while the SGX AsiaClear futures in Singapore fell 0.9 percent to $59.30 a metric ton. After a five-day losing run, the spot price for 62 percent content is at $60.15 a dry ton, the lowest since October, according to Metal Bulletin Ltd. The commodity has sunk on concern mine supplies will go on rising just as China’s mills enter a weaker period for demand and policy makers in Asia’s top economy rein in leverage. Stockpiles at mainland ports are near a record after robust shipments from Australia and Brazil, with miner BHP Billiton Ltd. citing the inventories as among risk factors that may tug prices lower. Citigroup Inc. has said there may have been forced sales by some traders in China.

Of course, it’s not just Iron Ore that is suffering. The last two months have been a bloodbath for industrial metals…


As Citi warned over the weekend, “We suspect that a good number of physical traders that are financially leveraged up to five times have been forced to destock due to rising short-term borrowing costs and the recent sharp price corrections.”

Citigroup isn’t alone in saying that some traders may be compelled to sell holdings into a falling market as China tightens. Shanghai Cifco Futures Co. said this week signs are emerging that traders are dumping their holdings.


Why you shouldn’t wear a nose ring? (Public Article)

Did I pique your interest with such a goofy title?  We’ll get to that shortly but first let’s take a look at the question raised last week,  “what are the chances of gold being down 15 days in a row”.  I received the answer from statistician Jim Willie.  The answer, “in a vacuum” is once in every 32,800 trading days. 
  This is something like once every 130 years but again, in a “vacuum”.  This meaning strictly by chance such as a coin flip.  But we do not live in a vacuum, no, we are now living during THE most bullish backdrop in history for gold or conversely THE most fundamentally bearish backdrop for paper currencies and debt.  We do not live in a vacuum, we live in an era where the power structure is pulling all the stops to retain their system of power and control, namely U.S. dollar hegemony.  Without writing another entire piece on gold manipulation, please understand the world we live in is “painted”.  Let’s take a look at some of the artists and their work.
  It is obvious (to those who can see truth and took the correct pill), there is and has been a “war” going on for your mind.  This is not a recent event as we have seen this since the beginning of time.  A prime example is socialism vs. capitalism.  Other examples are liberalism vs. conservatism, the belief or non belief in a higher being (religion for a lack of better term), self reliance versus dependence, truth vs. non truth, or even good vs. bad.  This “war” has always been around, however, the current tools available to sway opinion have not.
  Specifically, the internet.  It now turns out and proof has been provided that many entities are “lying” to you.  We know many instances where government lies to us from economic numbers to climate theories, to false flag events, and even the money issued.  We suspected previously but now know for sure the media is biased as they don’t even bother trying to hide it other than calling anything they disagree with as “fake news”.  Companies like Google and Facebook  mess with the minds of younger people by “filtering” searches, spreading “their news” and basically “shaping thought”.  I would be remiss of course if I did not mention our universities and educational systems, “grabbing” impressionable minds at a young age is obviously the plan.
  On the flip side (and though not always correct) are people like Robert Mercer
We see more truth from this side as their arguments are generally more logical and actual proof provided in many instances.  But don’t be fooled as the “hunger for power” is just as strong.
  The “real news vs. fake news” war has gotten so bad that people don’t even know what to believe anymore.  I recently came across this link  Scientists are Attempting to ‘Prove’ that ‘Religious’ People are Crazy – Study which was of particular interest to me because it suggests I have brain damage and am “crazy”.  I have said we will not try to into the “God channel” because religious perspective is not why people seek our opinion.  I have however professed my faith as a Christian.  There is some very logical reasoning as to why there absolutely must be a higher being or creator.  (I will not go there now but will point you in the correct direction should you contact me.)  You can believe in a creator or not but you cannot argue the world would be a much better place were everyone to live their lives as Jesus displayed in the Bible!  Logically, “doing the right thing” is normally the more difficult thing because it requires an action of “good” versus an easier action of “bad”.  In any case, assuming you have read my work and heard interviews, I try to live within logic and with that comes truth.  Maybe I am wrong but the search for truth is quite high on my list, brain damage isn’t.
  OK, so what spurred such an odd title and writing.  My wife Kathryn recently had foot surgery so I have been doing some of her errands.  I went to the local producers market for locally grown food and met some really nice down to Earth folks, farmers.  Yesterday we ventured into south Austin (baby San Francisco) for pizza.  The crowd was mostly young (college students) and definitely “different”.  I noticed that at most of the tables and booths, no one was talking or even looking at each other (even couples).  Instead, they were texting (each other?), surfing the internet (posting to facebook?), talking on the phone or whatever …but not interacting with whom they were sitting (except for selfies). 
  A group of four sat down next to us and the “smart” phones immediately came out.  They were all eating pizza with one hand and using their phones with the other.  One of the young girls had a nose ring …with a big hunk of cheese hanging from it.  She didn’t know because she couldn’t see it …and no one sitting with her said anything because no one ever looked up from their phone.  Being the insensitive jerk that I am (because the truth sometimes hurts), I said to everyone at our table (after turning my palms up) …”so, now I know why you shouldn’t wear a nose ring at an Italian restaurant”.  Their table didn’t hear me and they walked out together with her cheese “hanging”…
  So what’s my point?  Please understand there is an absolute war on for your mind!  You can either sit back and be “fed” information, or you can actively “seek” information in a search for the truth.  Financially the entire world is about to go bust, this is factual mathematics.  I saw two opposite ends of the spectrum over the weekend, self reliant rural farmers and totally dependent (and brainwashed by technology) urban dwellers.  When the financial (and thus social) ship hits the sand, which of these groups will survive?  Which of these groups has the intellectual, social and moral fabric to survive in a world that stops because credit stops?  This is a very real question because there is no question credit will cease for a time … and maybe a very long time!

  To finish, it is up to you to decide what is “real” and what isn’t.  It is up to you to decide what is “truth” and what isn’t.  Do not let anyone, any group, entity, or government force feed you “reality” because maybe it really isn’t …or won’t be shortly.  YOU must decide what is real and take responsibility for your decisions because no one else is bound to and few will be able to.  Follow your own gut and use your own God given common sense!  I do not know who to attribute this quote to but it describes our world pretty well“Common sense is not a gift – it’s a punishment because you have to deal with everyone that doesn’t have it”

Standing watch while rubbing my eyes,
Bill Holter
Holter-Sinclair collaboration
Comments welcome

Your early TUESDAY 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 A LOT WEAKER  6.9066(DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES MUCH WEAKER TO ONSHORE AT   6.9166/ Shanghai bourse CLOSED UP 1.91 POINTS OR .06%   / HANG SANG CLOSED UP 311.12 POINTS OR 1.27% 

2. Nikkei closed DOWN 52.70 POINTS OR 0.26%   /USA: YEN RISES TO 113.77

3. Europe stocks OPENED ALL IN THE GREEN EXCEPT SPAIN       ( /USA dollar index RISES TO  99.36/Euro DOWN to 1.0897


3c Nikkei now JUST BELOW 17,000

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

3e WTI::  46.54 and Brent: 49.36

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 UP for WTI and UP for Brent this morning

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.427%/Italian 10 yr bond yield UP  to 2.270%    

3j Greek 10 year bond yield FALLS to  : 5.63% ???  

3k Gold at $1224.75/silver $16.22 (8:15 am est)   SILVER ABOVE  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 4/100 in  roubles/dollar) 58.26-

3m oil into the 46 dollar handle for WTI and 49 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 A GOOD SIZED DEVALUATION SOUTHBOUND 


30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0024 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0922 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.


3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +0.427%

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 2.385% early this morning. Thirty year rate  at 3.018% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Crushed Vol Boosts Dollar, Commodities; Futures Flat


Asian stocks declined, while European stocks rose to the highest since 2015, led by a rebound in commodities and basic resource stocks. U.S. stock-index futures were little changed at 2,395 – just shy of all time highs – as investors focused on corporate earnings after the French election, while the VIX hovered near its lowest level since 1993.

In another mostly quiet overnight session, the Bloomberg Dollar Spot Index rose a second day as the greenback hit multi-week highs versus the Australian dollar, with the USDJPY reaching 103.83, the strongest since March 15, and the EURUSD sliding below 1.09, the lowest since March 30, as the aftermath of the French vote saw no further catalyst and the common currency consolidates near the 1.09 handle. A drop in Treasuries supported the dollar amid speculation that a hawkish speech by the Federal Reserve Bank of Cleveland President Loretta Mester on Monday may have been the opener of a series of hawkish commentary by Fed officials this week. The Fed official said that the Fed needed to be vigilant against “falling behind the curve”, while Mester also said with regards to the balance sheet that “we could probably end re-investments and not see a big impact, as long we articulate it well”.

The odds of a move in June have already risen to 80 percent from 68 percent last week, based on overnight indexed swaps and the Fed funds effective rate, and speeches by Fed’s Neel Kashkari and James Bullard among others could cement expectations of a 25-basis-point increase by policy makers in nearly a month’s time. However according to Bloomberg’s FX team, further dollar gains aren’t that straightforward as strong resistance lies ahead, while a robust labor market isn’t coupled with relatively strong wage growth. The market is looking for two more increases by the Fed this year and the repricing of such expectations could be pivotal for the greenback to revert its downward trajectory since January.

Crude reversed an earlier decline ahead of government data which is expected to show inventories fell for a fifth week, while natural gas futures rebounded from the biggest loss in eight weeks. Copper for delivery in three months also bounced after the lowest close since December. That helped ensure basic resources shares were the biggest winners as the Stoxx Europe 600 Index advanced.

The big story, however, remains the near record low volatility, with the VIX dropping to a level not seen since 1993 and shares are trading at record levels.

Looking around global market, European stocks and bond yields rose on Tuesday, boosted by higher commodity prices and basid industries stocks, as well as record low volatility, continuing relief from this weekend’s French presidential election and solid corporate earnings. The Stoxx Europe 600 rose 0.4 percent, Germany’s DAX Germany’s DAX rose 0.3 percent, France’s CAC 40 and Britain’s FTSE 100 added 0.4 percent.

Asian stocks did not perform as well, with MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.1 percent and Japan’s Nikkei fell 0.26 percent. China’s Shanghai Composite narrowly avoiding a seventh consecutive loss, the longest losing streak for four years,  weighing on the region more broadly.

U.S. futures pointed to a slightly higher opening on Wall Street, which would see the S&P 500 moving even higher than Monday’s record 2,401 points.

“It’s calm sailing today for stock markets after the VIX had its lowest close since 1993,” ETX Capital senior markets analyst, Neil Wilson, said. Victory for business-friendly centrist Emmanuel Macron in France and earnings were also supportive for equities, he said. “So far, there is precious little to halt the rotation from bonds to stocks,” he said.

The FTSEuroFirst hit its highest for nearly two years, and the index of top 50 euro zone stocks its highest for 18 months. Germany’s DAX hugged close to Monday’s record high. Shares in Germany’s Commerzbank rose more than 2% after the bank posted forecast-beating profits in the first quarter, and mining companies were among the leading gainers.

The MSCI World index, which touched a record high overnight, dropped about 0.1 percent.

In bond markets the 10-year U.S. Treasury yield rose to 2.394 percent, its highest in a month. The two-year yield held steady at 1.33 percent, meaning the yield curve rose to its steepest for more than two weeks. The yield curve had flattened last week to its lowest since the U.S. presidential election in November as investors fretted over the impact higher interest rates will have on the economy.

In commodities, oil market sentiment swung between optimism over statements from major oil-producing countries that supply cuts could be extended into 2018 and lingering concerns over slowing demand and a rise in U.S. crude output. U.S. crude rose 0.5 percent to $46.66 a barrel, and global benchmark Brent also rose 0.5 percent to $49.57. Copper bounced from the four-month low touched on Monday after data showed a sharp drop on imports into China, the world’s biggest consumer. London copper rose 0.5 percent to $5,515 a ton on Tuesday, after falling to as low as $5,462.50 on Monday. Gold recovered from a seven-week trough touched on Monday. Spot gold rose about 0.1 percent to $1,226.60 an ounce.

Earnings continue to be released with Walt Disney Co., Mitsubishi Corp., Toyota Motor Corp. and Deutsche Telekom AG among those notable.

Market Snapshot

  • S&P 500 futures up 0.1% to 2,396
  • STOXX Europe 600 up 0.3% to 395.37Brent Futures up 0.2% to $49.45/bbl
  • MXAP down 0.5% to 149.85
  • MXAPJ down 0.09% to 488.04
  • Nikkei down 0.3% to 19,843.00
  • Topix down 0.3% to 1,581.77
  • Hang Seng Index up 1.3% to 24,889.03
  • Shanghai Composite up 0.06% to 3,080.53
  • Sensex up 0.09% to 29,953.37
  • Australia S&P/ASX 200 down 0.5% to 5,839.90
  • Kospi up 2.3% to 2,292.76
  • Gold spot down 0.05% to $1,225.61
  • U.S. Dollar Index up 0.2% to 99.25
  • German 10Y yield rose 2.2 bps to 0.44%
  • Euro down 0.09% to 1.0914 per US$
  • Brent Futures up 0.2% to $49.45/bbl
  • Italian 10Y yield rose 7.7 bps to 1.949%
  • Spanish 10Y yield rose 2.0 bps to 1.608%

Top Overnight News

  • Elliott Takes Akzo to Court to Oust Chairman in PPG Battle; Toshiba Warns Western Digital to Stop Impeding Chip Sale
  • Western Digital Aims to Acquire Majority of Toshiba Chips: NHK
  • Trump Names Picks for U.S. Energy Agency Crippled Without Quorum
  • NRG Board Members Said to Consider Sale of Entire Renewable Unit
  • Pandora Creates Independent Committee, Gets $150m KKR Investment
  • Facebook Says Fixed Issue That Triggered Outages for Some Users
  • SEC Probes Rental Home Values Backing Private-Equity Bond Deals
  • CIT Says New York Attorney General Is Probing Reverse Mortgages
  • Boeing Planning to Trim Another 580 Jobs From Seattle- Area Hub

Bulletin Headine Summary from RanSquawk

  • A modest rise in European equities this morning, as gains are supported by the upside in the commodities sector.
  • Another quiet London session, where limited data/event drivers have seen traders focusing on yield and to that end, the US dominate
  • Looking ahead, highlights include US JOLTS, APIs, Fed’s Kaplan, Kashkari and Rosengren

Major Asian stock indices traded mostly lower following a muted lead from the US where S&P 500 and DJIA closed unchanged, although the Nasdaq 100 posted a fresh record high as Apple surmounted the USD 800bIn market cap level. ASX 200 (-0.6%) underperformed following earnings from CBA. Furthermore, all Big 4 banks traded with firm losses ahead of the upcoming budget announcement which Treasurer Morrison signalled would fund the Productivity Commission enquiry into banks’ financial product sales and possible conflicts of interests. Nikkei 225 (-0.3%) was negative on pull-back from yesterday’s surge, while Shanghai Comp (+0.1%) and Hang Seng (+0.8%) were tentative after the PBoC refrained from liquidity injections for the 3rd consecutive day. South Korean markets were shut due to Presidential Elections and 10yr JGBs traded flat following weakness in T-notes, while today’s 10yr JGB auction also failed to support demand with the b/c slightly lower than prior. Australian Retail Sales (Mar) M/M -0.1% vs. Exp. 0.3% (Prey. -0.1%).

Top Asian News

  • China’s Deleveraging Pain Puts Investors on Alert for Contagion
  • China Stock Shakeout Creates Most Divided Market in 15 Years
  • China’s $9 Trillion Bond Market Lures Neuberger, Fidelity
  • India Auto Lobby Group Sees Post-GST Levy to Remain Unchanged
  • Jakarta Governor Verdict Dents Confidence on Stocks: Street Wrap
  • Real-Estate Agency Reported to Shutter 87 Outlets in Beijing
  • South Koreans Vote for a New Leader After Months of Turmoil
  • Temasek’s Fullerton Warns of Singapore Oil Bond Defaults
  • Japan Stocks Retreat From 17-Month High Amid Earnings Reports
  • Rupee Drops Most in a Month; State-Run Banks Buying Dollars: RBL

A modest rise in European equities this morning, as gains are supported by the upside in the commodities sector. The relief rally in oil prices continues with Brent crude futures looking to reclaim USD 50/bbl as investors grow optimistic that an extension to the current oil production cut is on the horizon. In stock specific news, Commerzbank is higher after the German bank beat analyst expectations with a 28% rise in Q1 net profit, as such, financial names are among the best performers. The laggard for the session has been the utilities sector following reports in UK press that if PM May is to be re-elected she will place a cap on unfair energy price rises, subsequently Centrica shares has slipped some 5%, while a soft earnings update from E.ON has also weighed on sentiment. In credit markets, the mild risk on sentiment has sapped demand safe haven flow with EGB yields ticking higher. The German curve has seen some mild bear steepening with the Schatz eying -0.64% (level not seen since mid-Jan) in which a break above this could see the next level of -0.58% tested in the near term. Across the UK curve, slight underperformance in the 10-yr benchmark with yields ticking higher by 0.34bps with the 10-yr looking to test 1.2%.

Top European News

  • UBS Chief Weber Sees ECB Announcing a Taper Around September
  • EON Profit Misses Estimate in Green Utility Earnings Debut
  • Munich Re Misses Estimates as Higher Claims Weigh on Profit
  • Renault Chief Ghosn Sees ‘Good News’ in Macron’s France Win
  • Micro Focus Falls Most in 5 Years as HPE Software Revenue Drops
  • Commerzbank Beats Estimates as Earnings From Trading Surge
  • Pandora A/S Shares Reverse Early Gains as Charm Growth Slows
  • Centrica Slumps After Conservatives Pledge Energy Price Cap
  • Austria Considers F-16, Rafale and Saab to Replace Eurofighters

In currencies, the Bloomberg Dollar Spot Index rose 0.2 percent after jumping 0.5 percent on Monday. The euro traded at $1.0917, down 0.1 percent. The currency fell 0.7 percent Monday following Macron’s victory as France’s next president, after trading at the highest level since November. It has been another quiet London session, where limited data/event drivers have seen traders focusing on yield and to that end, the US dominate. The belly of the curve has seen notable gains to push the 5yr above 190bps, with the 10yr approaching 240bps again. This has prompted a sustained move through the mid 113.00’s, and we are looking at test on 114.00 at some stage in the day. Strong resistance seen here. The fade in EUFt/USD also continues as a result, and we are now testing below 1.0900, but we ran into strong demand here last week, and this will prove a tougher test given the improving conditions in the Euro zone which have supported more longer term thinking. This is largely a USD move however, so all eyes on differentials.

In commodities, gold was little changed at $1,225.94 an ounce. The China Gold Association said demand in the biggest consumer could jump to a four-year high. West Texas Intermediate oil added 0.3 percent to $46.57 a barrel, reversing an earlier decline. Copper for delivery in three months rose 0.6 percent on the London Metal Exchange after Monday closing at the lowest level since Dec. 23. Looking across the commodity spectrum, we see the familiar drivers dampening prices across the board. As such, we can pretty much look to yesterday’s assessment over the market, but downside momentum has slowed. Oil prices are notably heavy despite the consistent run of comments from OPEC that output cut extensions are being mulled over — with a 9 month deal being discussed if the latest rhetoric is to be believed. The market is sceptical, so WTI struggles ahead of USD47.00 and Brent pre USD50.00. Copper continues to grapple with support in the USD2.45-50 zone, but oversupply will dictate as Chinese demand is in question after the recent run of PM! numbers. Gold has lost modest ground despite the fresh selling in Treasuries, but Silver is now closer to USD16.00 after failing to hold onto the (USD16.) 50 level.

Looking at the day ahead, this morning in Europe we’re kicking off in Germany where the March industrial production print came in at -0.4% (Exp. -0.6%), while the March trade report showed a €19.6BN trade surplus, less than expected and down from €21.2BN the month prior. There are a few data releases in the US also. The early release is the NFIB small business optimism reading for April which declined to 104.5 from 104.7, however beating expectations of 104. Following that we then get the March JOLTS survey and then the March wholesale inventories report. Away from the data it is another busy day of Fedspeak with Kashkari, George, Rosengren and Kaplan all scheduled. Earnings today are headlined by Walt-Disney.

US Event Calendar

  • 6am: NFIB Small Business Optimism, est. 104, prior 104.7
  • 10am: JOLTS Job Openings, est. 5,725, prior 5,743
  • 10am: Wholesale Inventories MoM, est. -0.1%, prior -0.1%; Wholesale Trade Sales MoM, prior 0.6%

Central Bank Speakers

  • May 8-May 9: Fed’s Bullard Speaks on Panel on Interest Rate Policy
  • 9am: Fed’s Kashkari to Speak to Minnesota High Tech Conference
  • 11:40am: Fed’s George Speaks in Santa Barbara
  • 1pm: Fed’s Rosengren Speaks at NYU Conference on Risk Management
  • 4:15pm: Fed’s Kaplan Speaks at Summit in Dallas

DB’s Jim Reid concludes the overnight wrap

At the moment we have more ducklings than digits on the VIX with the most noteworthy feature of the last 24 hours being its further collapse, closing down -7.57% last night to 9.77, the lowest close since December 1993. It last closed below 10 in November 2006 and of the 6889 trading days since data was first recorded in 1990, last night’s close was the 4th lowest one. The years that there has been a below 10 close are 2007 (1 day), 2006 (3 days), 1994 (1 day) and 1993 (4 days). On a similar note the S&P 500’s 30-day implied volatility tumbled below 7.5% to close at 7.22% last night, the lowest ever.

It was a similar story for volatility in Europe too yesterday. With the event risk of Sunday’s French election passing with no surprises, the VSTOXX tumbled 15% yesterday to close at 14.39. That’s near the bottom of the YTD range with the low mark set back on March 17th at 11.16 (the average in 2017 so far has been 19.98). FX Vol meanwhile, as measured by the CVIX Index, hit the lowest since October 2014.

No prizes for guessing that it wasn’t a hugely exciting day in equity markets yesterday then. In France the CAC spent all of about 4 minutes in positive territory before a wave of profit taking saw the index stoop to a -0.91% loss by the end of play. In fairness that was a reasonable underperformance relative to other European markets with the Stoxx 600 down a much more modest -0.13%. It was much the same in the US session where the S&P 500 spent most of the day in the red before paring losses to close unchanged by the closing bell. That means that the S&P 500 has closed with a daily move of less than 0.20% (up or down) in 8 of the last 9 trading days, with last Friday being the only exception.

Price action was only a little bit more exciting in sovereign bond markets yesterday. Bunds and OATs traded in tight ranges for much of the session before ending little changed in yield terms. Peripherals were weaker however with Spain and Portugal yields up nearly 3bps and Italy up just shy of 7bps. That underperformance appeared to be largely a result of supply pressure with the expectation of new BTP deals coming, although perhaps also a reflection that with France now out of the way the risk story could now turn over to Italy’s election, albeit one that is still some way off for now. Elsewhere, the Euro pared a very early gain in the Asia session to close down -0.67% versus the Greenback for its weakest day since March 30th. In Treasuries 10y yields edged up 3.8bps to close at 2.387% and the highest also since the end of March. Comments from the Cleveland Fed’s Mester may have contributed to that. The Fed official said that the Fed needed to be vigilant against “falling behind the curve”, while Mester also said with regards to the balance sheet that “we could probably end re-investments and not see a big impact, as long we articulate it well”.

Staying with the Fed, yesterday we got the release of the Fed’s Senior Loan Officer Survey. It showed that banks left their standards on commercial and industrial loans (C&I) essentially unchanged, whilst demand for C&I was also little changed. Interestingly though loan officers reported tightening their lending standards for commercial real estate loans (CRE), as well as reduced demand. Banks reported concerns about vacancy rates, property prices and capitalization rates.

Changing tune and refreshing our screens this morning, it’s been a similarly subdued session in Asia this morning. The Nikkei (-0.08%), Shanghai Comp (-0.03%) and ASX (-0.39%) are all modestly in the red, while the Hang Seng (+0.33%) is a touch firmer. Markets in South Korea are closed with residents going to the polls to elect the country’s next president. Commodity markets have remained relatively stable overnight with Oil holding in around the $46.50/bbl level.

Moving on. Yesterday we saw the latest ECB CSPP/PSPP numbers and it’s increasingly looking like they are tapering corporate purchases in line with Government bonds. It terms of CSPP, the average daily  purchases last week was €288mn well below the €364mn average since the program started. The CSPP/ PSPP ratio was 10.7% last week which is actually lower than the 11.64% average since July last year – the first full month of CSPP. It’s been at 12.23% over the 5 weeks of tapering so far. By my crude calculations if they’d decided not to taper CSPP at all the ratio between the two programs would be around 17%. So the proof of a relatively equal taper gets stronger each week. See Michal Jezek’s piece last week’s on the relative dynamics between the two programs albeit before yesterday’s numbers.

In terms of the other data in Europe yesterday, the most notable was the decent rise in the Sentix investor confidence reading for the Euro area by 3.5pts to 27.4, which is the highest reading since July 2007. Away from that factory orders in Germany rose a bit more than expected in March (+1.0% mom vs. +0.7% expected), driven largely by big ticket items. In the US the sole release was the Fed’s labour market conditions index which was reported as rising 3.5pts in April following an upwardly revised 3.6pt gain in March.

Looking at the day ahead, this morning in Europe we’re kicking off in Germany where the March industrial production print is due out along with the March trade report. Also out in Europe this morning is the Bank of France business sentiment reading for April. There are a few data releases in the US this afternoon also. The early release is the NFIB small business optimism reading for April which is expected to show a small decline to 104.0. Following that we then get the March JOLTS survey and then the March wholesale inventories report. Away from the data it is another busy day of Fedspeak with Kashkari (2pm BST), George (4.40pm BST), Rosengren (6pm BST) and Kaplan (9.15pm BST) all scheduled. Earnings today are headlined by Walt-Disney


i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 1.91 POINTS OR .06%  OR / /Hang Sang CLOSED UP 311.12 POINTS OR 1.27% .  The Nikkei closed DOWN 52.70 POINTS OR 0.26%/Australia’s all ordinaires  CLOSED DOWN .40%/Chinese yuan (ONSHORE) closed DOWN at 6.9066/Oil UP to 46.54 dollars per barrel for WTI and 49.36 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT SPAIN   ..Offshore yuan trades  6.9166 yuan to the dollar vs 6.9066 for onshore yuan. NOW  THE OFFSHORE IS A LOT WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS  MUCH WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE STRONGER DOLLAR. CHINA IS NOT A HAPPY CAMPER THIS MORNING




(courtesy zero hedge)

“North Korea’s Favored Candidate”, Liberal Moon Jae-in Wins South Korea Presidential Election

Having lost to Park Geun-hye in the 2012 presidential election, liberal Moon Jae-in is poised to become the new South Korea president according to an exit poll from today’s South Korean election, according to which Moon was estimated to have collected 41.4% of all votes. The front-runner was followed by Hong Joon-pyo of the conservative Liberty Korea Party with 23.3% . Ahn Cheol-soo of the center-left People’s Party came in third with 21.8%.

Moon Jae-in and his wife Kim Jung-sook

North Korea has indicated that Moon is its favored candidate, with state media recently calling on South Korean voters to “punish the puppet group of conservatives” associated with Park.

The son of North Korean refugees, Moon criticized the early installation of a U.S. missile shield on South Korean soil and has said he’d meet with Kim Jong Un under the right circumstances.

As Bloomberg observes, the left-leaning Moon has long led opinion polls in an election triggered by the impeachment of former President Park Geun-hye, who was ousted in March and is now in jail while on trial for corruption charges. He has pledged a softer touch with North Korea and tougher action against family-run conglomerates that dominate Asia’s fourth-biggest economy.

After casting his vote on Tuesday, Moon issued a call for unity. “I myself will be the first to make such efforts by embracing other candidates and their parties for harmony,” he said. “I hope the people do what they can do until the end of the election but come back as one after the election for the nation’s unity.”

Moon’s expected victory is perhaps most notable because Moon’s expected victory could herald an era of rapprochement with North Korea, and an unlikely meeting of minds with Donald Trump over Pyongyang’s nuclear and ballistic missile programmes. “We are a target’: South Korean village wakes up on frontline with North. The 64-year-old liberal has positioned himself as the only candidate qualified to reunite the country after the bitter divisions that opened up over that Park’s allegedly corrupt relationship with her longtime friend and confidante Choi Soon-sil.

A brief profile on the country’s new president from the Guardian:

While Park sits in detention awaiting trial on charges that could lead to her being sentenced to life in prison, Moon has tapped into the country’s appetite for change to open up a double-digit lead over his closest rival, the centrist software entrepreneur Ahn Cheol-soo. In a month of rising tensions on the Korean peninsula over Pyongyang’s nuclear and ballistic missile programmes, Moon has criticised the hard line pursued by Park and her predecessor, Lee Myung-bak, pointing out that a decade of conservative rule had done nothing to arrest the regime’s nuclear programme.


Eager to court the older conservative voters who consigned him to a narrow defeat five years ago, Moon has shown himself to be a pragmatist. He has stopped short of overtly criticising Trump’s aggressive tone during the most recent crisis on the Korean peninsula, and has declared that he and the US president are “on the same page” in regarding the Obama administration’s policy of “strategic patience” as a failure.


Working-level “talks about talks” with North Korea are a possibility, according to Moon’s foreign policy adviser, but, like Trump, the candidate has so far ruled out a summit with Kim Jong-un unless the regime commits to abandoning its nuclear ambitions.


Although Moon was critical of Washington’s “undemocratic” rush to deploy its missile defence system in a South Korean village late last month, he has said only that he would “review” its future if elected president. He also supports the reopening of the Kaesong industrial complex, a joint North-South project that was regarded as a symbol of cross-border cooperation until it was “temporarily” closed in early 2016.


Given the speculation that North Korea could be preparing to conduct its sixth nuclear test in just over a decade – a move that the White House has hinted could invite military retaliation – it is easy to forget that Tuesday’s vote, called seven months early, was initially prompted by issues closer to home.


Moon has promised to reform South Korea’s family-run conglomerates – or chaebol – whose shady ties to senior politicians were exposed by the Park scandal, and to address pressing domestic problems such as rising inequality and youth unemployment.


The eldest son of a refugee from North Korea, Moon can claim to have played a role in significant moments in South Korea’s modern history.


After a career as a human rights lawyer, he served as chief of staff to the then president Roh Moo-hyun, whose pursuit of his predecessor Kim Dae-jung’s “sunshine policy” of engagement with Pyongyang Moon hopes to emulate – this time as South Korea’s leader.

Since Moon’s stance on North Korea could put him at odds with U.S. President Donald Trump, who has stressed that he could take military action to halt the isolated nation’s nuclear ambitions, this may be another potential diplomatic fiasco in the making. Meanwhile, at home Bloomberg adds that Moon faces the task of healing a nation which is still reeling from the graft probe that culminated in Park’s arrest in March after months of street protests. He is expected to add fiscal stimulus to create jobs for disaffected youth and bolster an economy forecast to expand this year at the slowest pace since 2012.

If Moon’s is confirmed, Moon will be sworn in on Wednesday after the release of the official result. Most candidates, including Moon and Ahn, have said they would skip a lavish inauguration ceremony and start work straight away.

The new leader is expected to quickly name a prime minister, who will need parliamentary approval, and main cabinet positions, including national security and finance ministers, which do not need parliamentary confirmation.



The markets seems to react to the words spoken by the North Korean Ambassador that they are ready to turn to ashes any USA strategic asset

(courtesy zerohedge)

North Korea Ambassador Tells Sky: “We Are Ready To Turn To Ashes Any US Strategic Assets”

In a interview posted moments ago by Sky News, in response to a question “is a sixth nuclear test now imminent”, the answer of the North Korean Ambassador to the UK, Choe Il was “In regards to the sixth nuclear test, I do not know the scheduled time for it, as I am here in the UK, not in my home country. However, I can say that the nuclear test will be conducted at the place and time as decided by our supreme leader, Kim Jong-Un.”

Asked if he is afraid of a possible US military response, the ambassador answers that “we are developing our nuclear strength to respond to that kind of attack by the US. If the US attacks us, our military and people are fully ready to respond to any kind of attack. I do not think the US are considering a military attack against us.” 

Asked what would North Korea’s response be to a preemptive strike, he answer that: “The US cannot attack us first. If the US moves an inch, then we are ready to turn to ashes any available strategic assets of the US.”

He also added that “our nuclear power is our sovereign right”, which technically is true.

In reaction to his comments, stocks, and most FX pairs, have dropped to session lows.


This is not good for Japan as it continues to face the vicious monster, deflation.  Today wages fell at the fastest pace in 2 years and thus the stopping of QE is still distant despite the fact that they are running out of things to buy (QE)

(courtesy zero hedge)


Japanese Wages Fall At Fastest Pace In 2 Years; Kuroda Admits His Job Is “Challenging”

Buying stocks, bonds, and generally printing money willy-nilly is hard work according to BoJ Governor Kuroda who remarked tonight that “the job of a central banker is challenging.” Perhaps the reason for his emotional outburst is the fact that Japanese wages just plunged in March – the biggest drop since June 2015 as the economic rebound that we are constantly told about has evaporated once again.

Speaking to Parliament earlier tonight, Governor Kuroda said: JAPAN’S VIRTUOUS ECONOMIC CYCLE IS STRENGTHENING before admitting the JOB OF A CENTRAL BANK GOVERNOR IS CHALLENGING.

And then the dismal data struck… worse than the lowest estimate and 9 standard deviations below expectations… poses yet another setback for Prime Minister Shinzo Abe’s attempts to revitalise the economy.


As Reuters reports, the wages figures back recent data showing household spending fell more than expected and core consumer prices rose at a slower-than-expected pace in March, suggesting an exit from the central bank’s radical quantitative easing programme remains distant. Inflation-adjusted real wages dropped 0.8 percent in March from a year earlier to mark their biggest rate of decline since June 2015, labour ministry data showed on Tuesday. In nominal terms, wage earners’ cash earnings fell 0.4 percent year-on-year in March, also notching the biggest rate of decrease since June 2015.

The data underscores the fragile and patchy nature of Japan’s economic recovery. It also bodes ill for Abe, who has repeatedly urged companies to lift worker compensation to foster sustainable growth in the world’s third-largest economy through a virtuous cycle of increased household spending, higher business investment and production.

“We need to look at the data for April onward. We can’t say by looking at just this month that the trend (in wage growth) has shifted,” the official said

But the data sparked more selling in JPY…




My goodness:  banks are actually asking for real collateral? The following is extremely important and one of the points that Kyle Bass has warned us about: suspension of interbank business:

(courtesy zero hedge)



Some Chinese Banks Suspend “Interbank Business” As Regulator Demands That Collateral “Actually Exists”

With “risk” in most of the developed world seemingly a long forgotten four-letter word, as seen by today’s plunge in the VIX to a level not seen in 34 years, traders hoping for some “risk event” have been confined to the recent turmoil in China, where overnight not only did trade data disappoint, with both imports and exports missing, but bond yields jumped to the highest level since 2015, dragging stocks lower even as the local commodity crash slammed iron ore and copper to new YTD lows.

While largely a “controlled” tightening, meant to contain China’s out-of-control shadow banking system, the recent gyrations in Chinese capital markets are starting to have a profound impact on local funding, resulting in a collapse in new bond issuance, and according to FT calculations, in April the number of aborted issues rose to 154, up from 94 in March, 32 in February and 31 in January. 

As DB added, “local bond markets are practically shut for corporates. In fact, YTD issuance is down 40%+ yoy and net issuance has been negative in three out of the first four months this year. A number of issuers are being forced to cancel bond issuances (over RMB100 billion YTD) and there were reports (Bloomberg) of even CDB halting issuance (though subsequently denied). Some AA corporates are now issuing at north of 7%.”

These signs of mounting stress in China’s $9.3 trillion bond market come less than a month after the country’s banking regulator, Guo Shuqing, was quoted as supporting a campaign to sort out chaotic practices, and threatening to resign if the banking system became “a complete mess”.

Overnight, Deutsche Bank’s China analyst Harsh Agarwal noticed the “gyrations” in the bond market, and compared the current selloff in onshore bonds to the similar episode one year ago, saying “this time, it’s sharper and longer – AAA yield & spreads are almost 200bp and 100bp wider respectively in the past 6 months or so – because of China’s focus away from growth to deleveraging. This is far from over in our view. Every day we see headlines on new regulations trying to control leverage in different parts of the system – WMPs, insurance companies, banks, etc. Having said this, we do believe in China’s ability to make a U-turn quickly if the situation goes beyond control, and see these changes as a long term positive, hence we are not overly worried as of now.”

Maybe not as of now, but Agarwal is surely getting more concerned with every incremental negative news out of China, even as the PBOC refuses to inject more liquidity, as it just did moments ago when for the third day in a row, the central bank skipped open market operations.

Meanwhile, confirming that Beijing is clearly concerned about developments behind the scene, potentially culminating in the worst possible case for China’s banking system – a shadow bank run -China Banking Regulatory Commission said in guidelines on banks’ collateral management posted on its website.

Commercial banks should carry out pressure tests on collaterals at least once a year, China Banking Regulatory Commission (CBRC) posted new guidelines on banks’ collateral management, among which that banks should revalue collateral at least once a year; and that banks are being urged to prevent risks in the collateral business. Of course, since this is the country where due to “infinite rehypothecation” of collateral, thousands of tons of copper and aluminum were “found” to be missing at China’s Qingdao Port, urging Chinese banks to engage in collateral “quality control” seems like a lost cause.

In fact, the banking regulator itself appears to be in on the joke, because as Bloomberg’s Tom Orlik points out, the CBRC requires that collateral accepted by banks must actually exist, as explicitly stated in Chapter 3 on “Risk Mangement” in the just released Collateral Guidelines:

Article 15 The collateral received by a commercial bank shall meet the following basic conditions:

  • the collateral is real;
  • the relationship between the collateral is clear, the mortgage (pledged) has the right to dispose of the collateral;
  • the collateral conforms to the laws and regulations or the national policy requirements;
  • the collateral has a good ability to achieve liquidity.

That’s not all.

In a subsequent notice posted in the Securities Times, the Chinese outlet reports that some Chinese rural banks have suspended their interbank businesses including negotiable certificates of deposit (or NCDs) “temporarily” while regulators conduct spot checks. It further adds that at the end of March total interbank liabilities of 25 banks listed in China’s stock market dropped by 1.54t yuan from end-2016, report says, citing Wind Info data, suggesting a sharp contraction in shadow funding.

While it was not immediately clear what the underlying catalyst for the unexpected move was, recall that at the end of March, Deutsche Bank reported that in the most recent troubling trend involving Chinese banks, numerous smaller banks had become acutely reliant on such shadow banking funding mechanism as Certificates of Deposit, which had become the primary source of short-term funding for many of China’s banks mid-size and smaller banks.

As DB further explained, the banks most exposed to a shut down in this “shadow funding” pathway are medium-sized and small banks, for whome as of 1H16, wholesale funding made up 31% and 23%, a number that has risen substantially in the interim period.

As Deutsche reflected just over a month ago, “we view banks that are more reliant on CDs as more vulnerable to rising rates and tighter regulations.”

Reflecting tighter liquidity, the interbank CD rate has rallied
strongly, with the 6-month CD pricing at 4.6% on average. Some CDs
issued by smaller rural commercial banks have been priced close to 5%
. This would have pushed up the funding cost and notably for
smaller banks. If banks invest in low-risk assets such as mortgages,
discounted bills and treasury bonds, this would lead to a negative
spread. Alternatively, banks can lengthen asset duration, increase the
risk appetite, add leverage or slow down asset growth. Among these
alternatives, we believe a slowdown in asset growth is the most likely

And while it is tangential, here is a list of the banks most exposed to a sudden cardiac arrest involving CDs: INDB, SPDB and PAB are among the most exposed to interbank CDs.

We would not be surprised if these are among the banks that as of this evening have “suspended their interbank businesses.”

Which again brings us to the most important question: “Are we close to a “tipping point” in China?” For those who missed the answer the first time, here is Deutsche Bank’s conclusion as of mid-March. Note: since then the liquidity situation in China has gotten far more precarious.  Here’s Deutsche:

For now, probably not, especially in a year of leadership transition. In our view, the risk of an uncontrollable liquidity event is low, as the PBOC will do whatever it takes to inject liquidity if needed. In the domestic liquidity market, the PBOC exerts strong influence in both the volume and pricing of liquidity. With 90%+ of financial institutions directly or indirectly controlled by the government, PBOC will likely continue to give liquidity support. In 2H15, the central bank established an interest rate corridor to contain interbank rates within a narrow range and pledged to inject unlimited liquidity to support banks with funding needs.



However, continuing liquidity injections do not come without a cost. A bigger asset bubble, persistent capital outflow pressure and a lower yield curve over the longer term are side effects that China will have to bear. At the same time, the execution risk of PBOC itself is rising.

In other words, whether or not China keels over and has a hard (or worse) landing, will depend on the PBOC; when (not if) the central bank gets involved, will depend on how soon China’s banks and various CD-funded financial institutions run out of collateral (whether it exists or not) to sell, such as iron ore, copper, precious metals, bonds and even stocks. This will hardly come as a surprise. As we showed last month, the only reason the Chinese banking system hasn’t imploded, is due to nearly CNY 10 trillion in central bank liquidity support for the local banks, just under 100% of China’s GDP.


One thing, however, is certain: with western central banks refusing to let the market clear on its own, or deflate the $14 trillion liquidity bubble which has suppressed price formation for the past 8 years, the PBOC is merely doing what all of its “civilized” peers have been doing for years – kicking the can, and praying.

Until then, however, things may be about to get a whole lot worse for China’s capital and commodity markets.





Turkey is not going to like this:  Trump approves a plan to direct arm the Syrian Kurds.  The Turkish lira tumbles badly on the news:

(courtesy zero hedge)

Trump Approves Plan To Directly Arm Kurds; Turkish Lira Tumbles

Update: Reuters confirms that the US arming of yet another ethnic group in the middle east is now a “go”


* * *

Turkey’s ‘sultan for life’ Erdogan will not be happy. NBC News is reporting that two US defense officials have confirmed President Trump has approved a plan to arm the Syrian Kurdish militia – an important U.S. ally in Syria in the fight against ISIS.

As AP confirms, US officials say Trump administration approves providing heavier weapons to Syria’s Kurds, despite “sharp objections” from Turkey.  As a reminder, YPG forces have ties to the Kurdistan Workers’ Party (PKK), which is considered a terrorist group by both the U.S. and Turkey, and yet which due to its location and ideological alignment, has long been an ally of the US. Two weeks ago, the US even went so far as to deploy troops along the Syria-US border after a Turkish airstrike killed several Kurdish fighters.

One of the officials told NBC News that this policy decision is very significant “because it supports the notion that the Syrian Democratic Force is the fighting force that will eventually go in to Raqqa” the erstwile capital of ISIS, which however may soon succumb to allied forces.

The move also reinforces the idea that the entire Syrian Democratic Force, Syrian Kurds (YPG) and the Syrian Arab Coalition, has the backing of the U.S.

The officials could not say what might flow in first or how it would get there, but among the expected options are:

  • Breaching equipment — bulldozers, engineering equipment
  • more effective infantry equipment: rifles, ammunition, armor, communication gear (radios)

The officials said the equipment could be delivered by any number of methods: ground convoys, C-130s, and air drops are all possible, depending on what the equipment is and the area. What’s unclear is whether the U.S. may provide bigger equipment.

The Turks will be notified about this soon and the officials expect a strong reaction from them. In March, Secretary of State Rex Tillerson traveled to Turkish President Recep Tayyip Erdogan, who sees the YPG as terrorists, about his opposition.

Even more shockingly, Reuters reported just minutes ago that U.S. President Donald Trump’s defense secretary emerged upbeat on Tuesday from talks with a Turkish official about the fight against Islamic State but did not disclose any progress toward settling a row over U.S. backing for Kurdish fighters in Syria.

Turkey, a NATO ally, is adamant that Washington should switch support for the planned assault on the Syrian city of Raqqa from the Kurdish YPG militia to Syrian rebels Turkey has trained and led against Islamic State for the past year.


For the U.S. administration, which is skeptical that the Turkish-backed force is large enough or sufficiently trained, the decision sets Trump’s wish for quick battlefield victories against the need to maintain its strategic alliance with Turkey.


“Our intent is to work with the Turks, alongside one another, to take Raqqa down, and we’re going to sort it out and we’ll figure out how we’re going to do it,” Mattis told a news conference, after defense talks with members of the U.S.-led coalition battling Islamic State.


Pressed about the matter, Mattis said he did not want to disclose U.S. battlefield plans but suggested confidence that Washington and Ankara would get past the impasse.


“But we will work it out … War sometimes doesn’t give you all good options. That’s the nature of war. It’s not a good situation,” he said.

Well now we have the answer.

USDTRY has shot up from the 3.59 area towards 3.6200 (*lira weaker against the USD).

As Citi notes, while this is an arms, rather than military intervention plan, the decision is likely to upset the Turkish government. Note this comes amid broad reports of Trump’s new international plans. The Washington Post reported overnight that Trump is weighing a plan to send as many as 5k to Afghanistan following continued pushes from US General John Nicholson, who is the top commander in Afghanistan. Earlier today, he also formally extended the national emergency declaration in Syria.

The next question is – will this cause Erdogan to seek retaliation against Washington’s vassal states in Europe? Or run to Putin? (who also supports the Kurds if only on paper)



Canada is going in the same direction as Americans: 1/2 of all Canadians have 200 dollars or less in savings!

(courtesy zero hedge)

Half Of Canadians Have $200 Or Less In Savings

Two months ago, when quoting the CEO of cell phone insurer Assurant, who appeared on Bloomberg TV to discuss business trends, one of his quotes caught our attention: “the reality is, half of Americans can’t afford to write a $500 check,” Colberg said. We decided to look into the CEO’s claim about the woeful state of US finances. What we found is that according to a recent Bankrate survey of 1,000 adults, 57% of Americans don’t have enough cash to cover a mere $500 unexpected expense. Turns out the CEO was right. And while that may appear dire, it is a slight improvement from 2016, when 63% of U.S. residents said they wouldn’t be able to handle such an expense.

The Bankrate survey findings echoed research published last year by the Federal Reserve, which found that 46% of respondents said they would be challenged to come up with even less, or $400, to cover an emergency expense, and would likely borrow or sell something to afford it. When the Fed asked what types of emergency expenses Americans had actually faced in the last year, more than one out of five cited a major unexpected medical expense. The average expense: $2,782, or almost seven times higher than the Fed’s hypothetical $400 surprise bill.

How does this stunning statistic compare to some other developed nations?

It turns out that the state of half of US finances, deplorable as it may be is positively shining, not to mention “twice as good”, when compared to the country’s neighbor to the north, where a recent Ipsos survey on behalf of accounting firm MNP, found that more than half of Canadians are living within $200 per month of not being able to pay all their bills or meet their debt obligations. Needless to say, if $500 in savings is bad, half that amount is outright bizarre.

“With such a small amount of wiggle room, any kind of unanticipated hardship, such as a job loss or even a car repair, could send an already struggling family into financial despair,” Canada’s Global News quoted Grant Bazian, president of MNP’s personal insolvency practice, which is one of the largest in Canada.  He also revealed that for 10 per cent of Canadians, the margin of error when it comes to household finances is even thinner, at $100 or less.

It gets worse as those with anything at all left at the end of the month were in better shape than many: A whopping 31% of respondents said they already don’t make enough to meet all their financial obligations.

The poll also found that while debt is causing Canadians a fair bit of stress, few appear to be overly worried or on track to buff up their monthly financial cushion. Two-thirds of survey takers said they are “less than very confident” about their ability to create an emergency fund.

And then this hair-raising finding from the survey: “Roughly 60 per cent said they don’t have a firm grasp of how interest rates affect debt repayments.” According to Bazian, the statistic helps explain why many indebted Canadians end up taking on more debt and high-cost loans. “That’s how so many end up in an endless cycle of debt,” he noted. It also explains charts such as this one, showing the harrowing difference surge in Canadian household debt, which has grown by 60% since the start of the century.

According to Global News, the concerning data also raises the question of whether Canadians understand the implications of an interest rate hike by the Bank of Canada. A decision by the BoC to start lifting its key policy rate from historic lows would raise the cost of carrying debt across the country; should rates raise enough Barclays will have to change its caption in the chart above. A one percentage point rise in the BoC’s key interest rate would likely push up variable mortgage rates by a similar amount. A variable mortgage rate that’s currently set at 3 per cent, for example, would go up to 4 per cent, which represents a 33 per cent increase in interest payments for the mortgage holder. That’s an extra $83 a month for every $100,000 in outstanding mortgage debt.

And to show just how bad the debt situation in Canada truly is, here are some more charts which are largely self-explanatory.

And perhaps the most important – and troubling – chart of all:


WTI spurts higher of biggest crude draw since 2016:

(courtesy zerohedge)

WTI Bounces Back Above $46 After Biggest Crude Draw Since 2016

WTI and RBOB prices slipped lower today after EIA raised its 2017 US crude output forecast (and the dollar rallied) along with Libya production headlines. WTI bounced on a much bigger than expected draw from API (-5.789mm v -2mm exp), but RBOB slipped towards the lows of the day on another unexpectedly large gasoline build.



  • Crude -5.789mm (-2mm exp) – biggest since 2016
  • Cushing -133k (+60k exp)
  • Gasoline +3.169mm (+350k exp)
  • Distillates -1.174mm (-800k exp)

Hope (for the bulls) is that crude oil stocks have peaked (with seasonal declines due) and API appears to confirm that with the 5th weekly draw (and largest since December – if this holds for tomorrow’s DOE data). Gasoline saw another big build though…


Heading into the API print, WTI drifted up to test $46 and RBOB above $1.49 but the kneejerk reaction was crude bid and gasoline offered…

“The Libyan output increase is putting pressure on the market and there is a lot of new bearish interest coming from funds,” warns Clayton Rogers, an energy derivative broker at SCS Commodities Corp. in Jersey City, N.J..



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



GBP/USA 1.2927 DOWN .0014 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED


Early THIS TUESDAY morning in Europe, the Euro FELL by 30 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.0897; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED UP 1.91 POINTS OR .06%     / Hang Sang  CLOSED  UP 311.12 POINTS OR 1.23% /AUSTRALIA  CLOSED DOWN .40% / EUROPEAN BOURSES OPENED IN THE GREEN EXCEPT SPAIN

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 TUESDAY morning CLOSED DOWN 52.70 POINTS OR 0.26%

Trading from Europe and Asia:


Gold very early morning trading: $1225.75


Early TUESDAY morning USA 10 year bond yield: 2.385% !!! DOWN 0 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  3.018, DOWN  0  IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 99.36 UP 30  CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING


And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 3.437%  UP 3  in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.04%  UP 1   in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.621%  UP 3  IN basis point yield from MONDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.281 UP 4  POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 67 points HIGHER than Spain.





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

Euro/USA 1.0874 DOWN .0052 (Euro DOWN 52 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 114.20 UP  .987 (Yen DOWN 99 basis points/ 

Great Britain/USA 1.2939 DOWN 0.0002( POUND DOWN 2 basis points)

USA/Canada 1.3733 UP 0.0042(Canadian dollar DOWN 42 basis points AS OIL FELL TO $45.95


This afternoon, the Euro was DOWN by 52 basis points to trade at 1.0874


The POUND FELL BY 402  basis points, trading at 1.2939/

The Canadian dollar FELL by 42 basis points to 1.3733,  WITH WTI OIL FALLING TO :  $45.95

The USA/Yuan closed at 6.9074/
the 10 yr Japanese bond yield closed at +.04% UP 1 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 2  IN basis points from MONDAY at 2.405% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.035 UP 2  in basis points on the day /

Your closing USA dollar index, 99,57 UP 51  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 TUESDAY: 1:00 PM EST

London:  CLOSED UP 41.35 POINTS OR .57%
German Dax :CLOSED UP 54.57 POINTS OR .43% 
Paris Cac  CLOSED UP 15.06 POINTS OR 0.26% 

Italian MIB: CLOSED  UP 58.85 POINTS/OR 0.27%

The Dow closed DOWN 36.50 OR 0.17%

NASDAQ WAS closed UP 17.93 POINTS OR 0.29%  4.00 PM EST
WTI Oil price;  45.95 at 1:00 pm; 

Brent Oil: 48.77 1:00 EST




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

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


BRENT: $48.94


USA 30 YR BOND YIELD: 3.028%


USA/JAPANESE YEN:113.97  UP 0.754

USA DOLLAR INDEX: 99.58  UP  52  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2931 : DOWN .0008  OR 8 BASIS POINTS.

Canadian dollar: 1.3723  up .0028(CAN DOLLAR DOWN 28 BASIS PTS)

German 10 yr bond yield at 5 pm: +.430%


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


Stocks Stumble But VIX Breaks Another Record



It has now been 12 days in a row that VIX has closed below 11…


An all-time record streak of stock market complacency…


A chaotic day in VIX trading as every effort was made to defend Dow 21,000… (NOTE the plunge in VIX around 1325ET which appeared to have no news catalyst – just a run to 10.01) – worst day for Dow since April 19th…

Late-day weakness in stocks was due to North Korea headlines (Stocks once again rallied off the European close; the tumble around 1325 seemed to have no news catalyst – Fed’s Rosengren was speaking around that time – but seemed more technical)… Buy-The-Fucking-North-Korean-Ashes-Dip!!


Treasury yields ended the day modestly higher after rising rose once again across the curve in the EUR session…(but note the bid as North Korean headlines hit)


With 10Y and 30Y yields back above their 50DMA and 30Y yields at 7-week highs…


FX markets were a little chaotic today… AUD dumped overnight, then JPY (after dismal wage data), and then EUR…


The Dollar Index surged to 1-month highs – erasing Trump’s “dollar too strong” weakness…


EURUSD extended its post-Macron losses – to 2-week lows…


WTI and RBOB sank on the day – ahead of tonight’s API inventories data…


And as the dollar surges, gold is offered but Bitcoin is exploding…


Once again, spot gold was monkeyhammered lower into the London Fix…


Silver is down 15 of the last 16 days (the one up day was an extremely marginal gain)…


Oh, and finally, fun-durr-mentals…







This will be another drag on first quarter GDP as wholesale sales growth stalls in March. This may cause the finalized number to fall into the negative category AND A FURTHER DOWNDRAFT TO 2ND QUARTER GDP

(courtesy zero hedge)

Wholesales Sales Growth Stalls In March – Weakest In 8 Months

Final data for wholesale inventories and sales data in March show a modestly better than expected rise in inventories (+0.2% vs -0.1% MoM) and worse than expected sales which showed no growth in March – the weakest print since July 2016.

Auto inventory to sales rose in March (back towards Nov 2016 highs) but Lumber sales were the biggest drag in March (down 3.0% MoM) – which is perhaps why Trump stepped it up with Canada.

Just One Week Later, Atlanta Fed’s Q2 GDP Forecast Crumbles From 4.3% to 3.6%

It’s deja vu all over again.

Four months after the Atlanta Fed started off its Q1 GDP nowcast at 2.5%, then raised it just shy of 3.5% before eventually crashing, and closing the books at 0.2%, slightly below where the BEA reported Q1 GDP, on May 1 the regional Fed released its initial GDP forecast for Q2, and, as we noted last week, it came as no surprise to anyone that the initial estimate was just a tad optimistic at 4.3%, to which we commented that if past is prologue, “expect this number to end roughly 50% lower in three months when the first advance Q1 GDP report is released.

One week later, we are a third of the way there, because moments ago, the Atlanta Fed did just as expected, and chopped off a whopping 17% from its initial estimate, revising its Q2 GDP estimate from 4.3% as of May 1 (and 4.2% as of May 4) to 3.6%, due to a decline in forecast real consumer spending growth and real private fixed investment.

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 3.6 percent on May 9, down from 4.2 percent on May 4. The forecast for second-quarter real consumer spending growth and real private fixed investment growth declined from 3.0 percent and 6.9 percent to 2.7 percent and 5.3 percent, respectively, after the employment situation release by the U.S. Bureau of Labor Statistics on Friday. The model’s estimate of the dynamic factor for April—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—has fallen from 0.76 to 0.32 since the last GDPNow update on May 4. The forecast of the contribution of inventory investment to second-quarter growth decreased from 1.11 percentage points to 0.99 percentage points after this morning’s wholesale trade report from the U.S. Census Bureau.

The breakdown by component:

  • PCE contribution est. at 1.85%
  • Nonresidential equipment investment contribution est. at 0.34%
  • Nonresidential intellectual property products investment contribution est. at 0.17%
  • Nonresidential structures investment contribution est. at 0.13%
  • Residential investment contribution est. at 0.23%
  • Government contribution est. at 0.02%
  • Net exports contribution est. at -0.12%
  • Change in inventory investment contribution est. at 0.99%

Expect many more such cuts in the coming weeks as the Fed realizes that what it thought was “residual seasonality” – also known as “weather” – was actually a tapped out US consumer, who as the Fed disclosed yesterday, now has an aversion to credit cards and as a result demand for credit cards is now running at the lowest level in the past 5 years. Good luck hitting 3%, or even 2% GDP with no consumer spending.





Economic confidence slumps to the lowest level since the trump election

(courtesy zero hedge)

Economic Confidence Slumps To Lowest Since Trump’s Election

Just as US macroeconomic data surprises collapse back to reality (but stocks hit record highs), so it appears the animal spirits of American Consumers are tumbling…

Hope lasted a few months in the ‘real’ data… but has collapse in the last month.


And as Gallup reports, Americans’ views of the economy remain positive on balance, but just barely. Gallup’s U.S. Economic Confidence Index averaged +3 for the week ending May 7. The index is down four points from two weeks ago and now sits at a nominal low for the year after trending downward from its early March peak.


Gallup’s U.S. Economic Confidence Index is the average of two components: how Americans rate current economic conditions and whether they feel the economy is improving or getting worse. And that is where the bigger problem lies as it is ‘hope’ about the future that has really tumbled

Fewer Americans last week said the economy was “getting better” (45%) than said it was “getting worse” (49%), leaving the economic outlook component at -4, its worst score since Trump’s election (during the week of Nov. 7-13), when it measured -5. It is now nearly 20 points below its recent high of +15 set in early March and nine points lower than its average score in the post-election period.

So it seems record high stocks and recently dropping gas prices, along with a constant narrative of how well wages are growing, has done absolutely nothing to improve Americans’ perspective on the economic outlook.




Trump fires FBI director Comey

(courtesy zerohedge)

President Trump Fires FBI Director James Comey

The initially amicable, then increasingly more controversial, contentuous and, finally, rancorous relationship between President Donald Trump and FBI Director James Comey has just concluded with the utterance of two of Trump’s favorite words: ‘You’re fired.”

According to a statement issued by the White House, the firing of Comey comes at the recommendation of both Deputy Attorney General Rod Rosenstein and Attorney General Jeff Sessions.

Below is the full statement from the White House:

Today, President Donald J. Trump informed FBI Director James Comey that he has been terminated and removed from office. President Trump acted based on the clear recommendations of both  Deputy Attorney General Rod Rosenstein and Attorney General Jeff Sessions.


“The FBI is one of our Nation’s most cherished and respected institutions and today will mark a new beginning for our crown jewel of law enforcement,” said President Trump.


A search for a new permanent FBI Director will begin immediately.

Below is the letter from Sessions to Trump recommending Comey’s termination.

In a separate letter to Comey, Trump said that “you are not able to effectively lead” the FBI, new leadership is needed to restore trust.

More from Trump’s letter to Comey:

“… you are hereby terminated and removed from office, effective immediately. While I greatly appreciate you informing me, on three separate occasions, that I am not under investigation, I nevertheless concur with the judgement of the Department of Justice that you are not able to effectively lead the bureau.”

Full Trump letter to Comey below, where amusingly Trump notes that the FBI director told him ” on three separate occasions” that he wasn’t under investigation.



The 2018 premiums in Obamacare are set to skyrocket on top of the huge premium rise in 2017.  And guess what they are blaming Trump:

(courtesy zero hedge)

2018 Obamacare Premium Estimates Are Surging Again Leaving Obama’s “Legacy” On Life Support

Maryland, Virginia and Connecticut are the first three states to make their 2018 Obamacare premium estimates public and they paint a very bad picture for the future of Obama’s crowning legislative achievement.  On average, premiums for individual insurance are expected to increase 33% over 2017 with Maryland’s 4 insurers requesting a staggering 45% YoY increase.  Per Bloomberg:



Of course, 2018 premium hikes are only half the story because they come on top of staggering increases in 2017 as well.  Combined, residents of Connecticut, Maryland and Virginia are looking at total premium increases of 59%, 81% and 41%, respectively, over just a two-year period.  As a reminder, here is where rate increases came in, by state, for the 2017 plan year:



Of course, the panicked mainstream media is eagerly trying to pin the 2018 premium increases on the Trump administration rather than simply admitting that Obamacare was doomed from the start.  For ‘Exhibit A’ just look at this spin from Bloomberg:

Health insurers are asking for sharp increases in the cost of their Obamacare plans next year, thanks to instability in the law’s coverage markets that’s been compounded by the Trump administration.


The increases can be blamed in part on uncertainty among insurers about the strength of the law’s requirement that people carry insurance. The Trump administration has raised doubts about whether it will enforce what is considered by some insurers to be an already insufficient penalty.


“Failure to enforce the individual mandate makes it far more likely that healthier, younger individuals will drop coverage and drive up the cost for everyone,” Chet Burrell, Chief Executive Officer of CareFirst, said in a statement. The insurer is asking for an at least 50 percent increase in premiums in Maryland. Burrell said uncertainty over the mandate played a “significant role” in the insurer’s rate requests.

Yup, all Trump’s fault…just ignore the fact that Arizona’s rates jumped 145% in 2017…rates which were set in 2016 when Trump was just an unlikely Republican primary candidate.

Of course, earlier this week we noted that the esteemed professor of MIT, and one of the original architects of Obamacare, Jonathan Gruber, is also touring the media circuit blaming the epic collapse of Obamacare on President Trump.  Here is an exchange from last night with Chris Wallace on Fox News:

Gruber: “Look, and whose fault is this?  Before President Trump was elected there were no counties in America that did not have an insurer.  Since President Trump’s been elected, a massive degree of uncertainty…”


Wallace:  “Wait, you’re going to blame the problems with Obamacare on President Trump?”


Gruber:  “We had a situation under Obamacare where there was a one-time premium increase last year that made up for the fact that insurers massively under-priced in the first two years.   


The problem was fixed.  Insurer profits were trending positively.  Insurers were saying positive things about their ability to stay in the exchanges and succeed.


Then you have a President who comes in, undercuts open enrollment, doesn’t honor the obligations this law makes to insurers, and, as a result, premiums are going up and insurers are exiting.”


Who needs facts when you have a good narrative?

We’re sure all of Obamacare’s coverage issues going back to 2014 are also Trump’s fault in one way or another.



But sure, Obamacare is a great system and Republicans are trying to ‘ruin’ healthcare in America.


Well that about does it for tonight

I am giving you a little heads up.

I will be providing a commentary on Monday but it will be short

as I will be out of commission for most of the day


all the best



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