May 11/Gold and silver equities perform well today/gold up $4.50 and silver is up 8 cents/Silver open interest rises close to 200,000/total amount of silver oz standing at the comex rises for the 9th consecutive day/total standing today: 22.12 million oz/Iron ore prices collapse sending collateral problems for China/6 Canadian banks downgraded by Moodys/Silver production globally at 886 million oz down .6%/Capital city of Connecticut, Hartford to file for bankruptcy protection using article 9/Retailers crash on poor earnings and outlook from Macy’s/

Gold: $1224.10  UP $4.50

Silver: $16.21  UP 8  cent(s)

Closing access prices:

Gold $1225.00

silver: $16.36

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

SHANGHAI GOLD FIX:  FIRST FIX  10 15 PM EST  (2:15 SHANGHAI LOCAL TIME)

SECOND FIX:  2:15 AM EST  (6:15 SHANGHAI LOCAL TIME)

SHANGHAI FIRST GOLD FIX: $1233.09 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1220.50

PREMIUM FIRST FIX:  $12.59

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SECOND SHANGHAI GOLD FIX: $1234.60

NY GOLD PRICE AT THE EXACT SAME TIME: 1222.20

Premium of Shanghai 2nd fix/NY:$12.40

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LONDON FIRST GOLD FIX:  5:30 am est  $1221.00

NY PRICING AT THE EXACT SAME TIME: $1222.60

LONDON SECOND GOLD FIX  10 AM: $1223.92

NY PRICING AT THE EXACT SAME TIME. $1223.15

For comex gold:

MAY/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  10 NOTICE(S) FOR 1000 OZ. 

 TOTAL NOTICES SO FAR: 465 FOR 46500 OZ    (1.4463 TONNES)

For silver:

For silver: MAY

55 NOTICES FILED TODAY FOR 275,000  OZ/

Total number of notices filed so far this month: 4286 for 21,430,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

For 9 consecutive days, the amount standing for physical has risen.  On First day notice 16.8 million oz were standing; tonight 22.12 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

.

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In silver, the total open interest SURPRISINGLY ROSE BY 3,743  contracts UP to 199,826  DESPITE THE SLIGHT RISE IN PRICE THAT SILVER TOOK WITH RESPECT TO YESTERDAY’S TRADING (UP  12 CENT(S). In ounces, the OI is still represented by just UNDER 1 BILLION oz i.e.  0.999 BILLION TO BE EXACT or 143% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 55 NOTICE(S) FOR 275,000  OZ OF SILVER

In gold, the total comex gold FELL BY 7781 contracts DESPITE THE RISE IN THE PRICE OF GOLD ($3.05 with YESTERDAY’S TRADING). The total gold OI stands at 425,252 contracts.  We are only 35000 contracts away from rock bottom OI. (390,000)

we had 10 notice(s) filed upon for 1000 oz of gold.

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

GLD:

We had no changes in tonnes of gold at the GLD:

Inventory rests tonight: 851.89 tonnes

.

SLV

Strange!!!  For 17 straight trading sessions, silver was down on 16 and up on only one and that was a few cents. Today: inventory rose by 3.833 million oz!!!!

THE SLV Inventory rests at: 338.610 million oz

it is also strange that during these past two weeks no silver left the silver vaults.

end

.

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

1. Today, we had the open interest in silver ROSE BY 3,743 contracts UP TO 199,826, (AND NOW CLOSER TO  THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21 AT 234,787), DESPITE THE  RISE IN PRICE FOR SILVER YESTERDAY (11 CENT(S)).

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 8.71 POINTS OR .29%  OR / /Hang Sang CLOSED UP 110.13 POINTS OR 0.44% .  The Nikkei closed UP 61.46 POINTS OR 0.31%/Australia’s all ordinaires  CLOSED UP .02%/Chinese yuan (ONSHORE) closed UP at 6.9022/Oil UP to 47.97 dollars per barrel for WTI and 50.45 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT SPAIN   ..Offshore yuan trades  6.9059 yuan to the dollar vs 6.9022 for onshore yuan. NOW  THE OFFSHORE IS  STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LITTLE BIT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS A LITTLE HAPPIER THIS MORNING

 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

 

 

i)NORTH KOREA

Afghanistan is the world’s largest producer of opium as 90% of the global production comes from there and the USA guards and protects the poppy fields..very strange.  With the cut off of coal trade and other sanctions, North Korea has now resumed poppy production which will now put the USA in a total conflict again with North Korea if they are to keep the Afghanistan route sound

( Whitney Webb/AntiMedia.org)

ii)Quite a story…A Canadian man jailed in North Korea claims that there are many more Americans locked up in prisons. It seems that this notorious regime under Kim Jong -Un  kidnap visitors to North Korea and they also kidnap ex pats in foreign countries and bring them to North Korea.

(Mac Slavo./SHFTplan.com)

b) REPORT ON JAPAN

c) REPORT ON CHINA

i)Iron Ore prices crash last night piercing their 6th month low support levels;

( zero hedge)

ii)Humour story..

Seems that certain individuals in China want to remove any Chinese “black swans”

( zero hedge)

4. EUROPEAN AFFAIRS

i)FRENCH ELECTION/ RUSSIA/USA: FIRST STRIKE

The following is alarming.  I will not comment on this but it surely is of great concern

( Craig Roberts)

ii)BANK OF ENGLAND/STATEMENT:

Mark Carney admits that England has no plan yet for a disorderly BREXIT:  down goes British stocks, the pound as well as bond yields

( zero hedge)

 

iii)A must read: if Europe is fixed why are they issuing long dated bonds

(Bill Blain/Mint Partners/zerohedge)

iv) The ECB head  Draghi was expecting some easy lob ball questions today from Dutch Parliamentarians.  Instead he was bombarded for all his QE actions:

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

i)CANADA

As many of you know, I am based here in Toronto Ontario Canada where lately we have been decimated on the economic front. Last night Moody;s slashes the rating on all the 6 major Canadian banks as they fear asset quality deterioration due to the huge rise in house prices and also the soaring household debt

(courtesy zero hedge)

ii)Has Canada reached its Minsky Moment?:

( George Stockus/BeatlesOnBanking.com)

7. OIL ISSUES

OPEC did not provide good news to the oil sector as the forecast a huge surge in Shale oilproduction as well as a bigger Saudi output.  So much for production cuts.

( zero hedge/OPEC)

8. EMERGING MARKETS

Venezuelan protesters have found novel ways to protest using “poop bombs”

( zerohedge)

9.   PHYSICAL MARKETS

i)At the retirement dinner, Eric Sprott recognizes GATA;s work even though quite a few WGC members were in the room.  Eric has guts going against the establishment..good for him and I am glad that GATA is getting the praise it deserves:

( Chris Powell/GATA)

ii)Cramer comments that with the USA’s constitutional crisis upon them, gold should be flying but somehow it is not.  Try massive manipulation

( Kitco/GATA)

iii)We have been highlighting this story to you all week:  India’s gold imports have risen 4 fold in April…and this does not include the smuggling.

( Bloomberg)

iv)It is about time;  the Arizona legislature ends income taxation on gold and silver:

( Money Metals/GATA)

v)The silver institute now claims that 2016 mine production was down .6% to 886 million oz. The reason for the drop is lower production of base metals.

We do know that both Russia and China produce around 190 million oz and none of their production is ever sold.

Thus the available silver supply for sale is now less than 700 million oz.

( Daniela Cambone/Kitco)

vi)Now we see that the LME wants to submit a proposal to run the London silver price fix. If they do get to run it, we will see the same sort of fraud in its setting of the fix price.

( Reuters)

 

 

10. USA stories

i)It is a well known fact that the state of Connecticut is in trouble financially. Now the state capital, Hartford is preparing for bankruptcy protection under Schedule 9 as Hedge fund revenue dissipate.

( zerohedge)

ii)More trouble in Obamacare as Aetna abandons its last two states. Now all 3 major healthinsurers are out of Obamacare altogether: Aetna, Human, and United Health

( MishShedlock/Mishtalk)

iii)A retail bloodbath this morning as Macy crashes after awful results.  This is dragging all department store stocks down this morning

Again, brick and mortar operations are getting killed!

( zero hedge)

iv) this is not good:  USA producer prices have now spiked to its higheslt level in 5 years as the PPI rose 2.5% year over year.  This is a forerunner of inflation.  It surely looks like we will be heading for stagflation as the economy refuses to grow despite advancing inflation

( zero hedge)

v)Interesting:  the Deputy AG who wrote the passage to Trump recommending the firing of James Comey is threatening to resign over that termination. Obviously we was put up to write the report to Trump

( zero hedge)

vi)I like Graham Summer’s short and sweet commentaries. Today he discusses a huge industry wide problem: the auto loan sector and he feels (and so do I) that it will trigger the bursting of other debt bubbles highlighted below

( Graham Summers/Phoenix Research Capital)

vii)Bets placed by huge increasing volumes of Eurodollar futures seems to suggest that a rate hike will not happen in June due to the deteriorating conditions inside the USA

( zero hedge)_

 

Let us head over to the comex:

The total gold comex open interest FELL BY 7781 CONTRACTS DOWN to an OI level of 425,252 DESPITE THE  RISE IN THE PRICE OF GOLD ( $3.05 with YESTERDAY’S trading).   The longs I guess had had enough  as they finally liquidated some more 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 LOSS OF 33 contract(s) FALLING TO 42. We had 43 notices filed yesterday so we GAINED 10 contracts or an additional 1000 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 11,327 contracts DOWN to 232,758.  The non active July contract LOST another 44 contracts to stand at 381 contracts. The next big active month is August and here the OI gained 2840 contracts up to 99,368.

To give you a good idea of the devastation of open interest contracts, last year on May 11 2016 we had at this exact time:    368,855 contracts of JUNE 2016 CONTRACTS OPEN.( compared to JUNE 2017: 235,125)

We had 10 notice(s) filed upon today for 1000 oz

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And now for the wild silver comex results.  Total silver OI ROSE BY A HUGE 3,743 contracts FROM 196,083 UP TO 199826  DESPITE YESTERDAY’S TINY 12 CENT PRICE GAIN. We again probably had  some attempted short covering by the banks which AGAIN did not succeed much.
We now know for certainty that private EFP contracts are given by the bankers when faced with an upcoming active delivery month.  We just do not know the makeup of that private deal.  It is my contention that the longs in silver at the end of April were given a fiat bonus plus a long “in the money” call for a  future May contract or a July contract. They were told not to exercise for a new contract until at least the first week of May is over so it would not look like a paper settlement which in reality it surely is.
So now everything makes sense: the obliteration of OI as we enter first day notice has not really occurred but replaced with a future contract with some bonus money for theie effort. No doubt by the end of May, the open interest in the silver contract month will be close to the OI we had around mid April/2017.
We are in the active delivery month is MAY  Here the open interest LOST 2 contracts FALLING TO 230 contracts. MY GOODNESS!! IT HAPPENED AGAIN!! We had 39 notices filed yesterday, so we gained another 37 notices or an additional 185,000 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 9 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 GAINED 6 contracts to stand at 921. The next big active month will be July and here the OI strangely gained 1,981 contracts up to 152,588.

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 55 notice(s) filed for 275,000 oz for the MAY 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 86,993 contracts which is poor

Yesterday’s confirmed volume was 218,755 contracts  which is good.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for MAY
 May 11/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
2411.25  oz
(75 kilobars)
Scotia
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
nil oz
No of oz served (contracts) today
 
10 notice(s)
1000 OZ
No of oz to be served (notices)
32 contracts
3200 oz
Total monthly oz gold served (contracts) so far this month
465 notices
46500 oz
1.4463 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   50,297.6 oz
Today we HAD  1 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 1 customer withdrawal(s)
i) out of Scotia: 2411.25 oz
75 kilobars
total customer withdrawal: 2411.25 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 10 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

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To calculate the initial total number of gold ounces standing for the MAY. contract month, we take the total number of notices filed so far for the month (465) x 100 oz or 46500 oz, to which we add the difference between the open interest for the front month of MAY (42 contracts) minus the number of notices served upon today (10) x 100 oz per contract equals 49,700 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 (465) x 100 oz  or ounces + {(42)OI for the front month  minus the number of  notices served upon today (10) x 100 oz which equals 49,700 oz standing in this non active delivery month of MAY  (1.5458 tonnes).  We gained 10 contracts or an additional 800 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.
 
 
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I have now gone over all of the final deliveries for this year and it is startling.
Here are the final deliveries for all of 2016 and the first 5 months of  2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes
Nov.    8.3950 tonnes.
DEC/2016.   29.931 tonnes
JAN/2017     3.9004 tonnes
FEB/ 18.734 tonnes
March: 0.5816 tonnes
April/2017: 2.8678
MAY:2017/  1.5458 TONNES
total for the 17 months;  249.162 tonnes
average 14.656 tonnes per month
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Total dealer inventory 915,933.163 or 28.489 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,926,219.548 or 277.64 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 277.64 tonnes for a  loss of 25  tonnes over that period.  Since August 8/2016 we have lost 76 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 11 MONTHS  76 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
MAY INITIAL standings
 May 11. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
43,370.100 oz
Brinks
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 nil  oz
No of oz served today (contracts)
 55 CONTRACT(S)
(275,000 OZ)
No of oz to be served (notices)
175 contracts
( 875,000 oz)
Total monthly oz silver served (contracts) 4286 contracts (21,430,000 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  4,891,037.1 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil  oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 1 customer withdrawal(s):
 i) Out of Brinks:43,370.01 oz
TOTAL CUSTOMER WITHDRAWALS: 43,370.100  oz
 We had 0 Customer deposits:
***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  nil oz
 
 we had 0 adjustment(s)
The total number of notices filed today for the MAY. contract month is represented by 55 contract(s) for 275,000 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 4286 x 5,000 oz  = 21,430,000 oz to which we add the difference between the open interest for the front month of MAY (230) and the number of notices served upon today (55) x 5000 oz equals the number of ounces standing

 

.
 
Thus the initial standings for silver for the MAY contract month:  4286(notices served so far)x 5000 oz  + OI for front month of APRIL.(230 ) -number of notices served upon today (55)x 5000 oz  equals  22,305,000 oz  of silver standing for the MAY contract month.
We actually gained another 37 contracts or an additional 185,000 oz will stand for delivery and again nobody wished to accept an EFP contract for a fiat bonus. It probably means that the entire 22.12 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 9 trading 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 33,887 which is fair
Yesterday’s  confirmed volume was 90,857 contracts which is huge
(TODAY’S CONFIRMED. VOLUME OF 90,857 CONTRACTS EQUATES TO 453 MILLION OZ OF SILVER OR 65% OF ANNUAL GLOBAL PRODUCTION OF SILVER EX CHINA EX RUSSIA). IN OUR HEARINGS THE COMMISSIONERS STRESSED THAT THE OPEN INTEREST SHOULD BE AROUND 3% OF THE MARKET.  
 
Total dealer silver:  33.541 million (close to record low inventory  
Total number of dealer and customer silver:   198.028 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
 
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.3 percent to NAV usa funds and Negative 7.3% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.3%
Percentage of fund in silver:37.6%
cash .+0.1%( May 10/2017) 
central fund did not provide data today.
 
2. Sprott silver fund (PSLV): Premium FALLS TO   +.59%!!!! NAV (May 11/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES to -0.73% to NAV  ( May 11 /2017)
Note: Sprott silver trust back  into POSITIVE territory at +.59% /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

http://www.cbc.ca/news/canada/calgary/sprott-takeover-bid-central-fund-c…

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

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

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

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

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

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

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

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

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

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

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

end

And now the Gold inventory at the GLD

may 11/no changes in GLD inventory/inventory rests at 851.09 tonnes

May 10/no changes in GLD inventory/inventory rests at 851.09 tonnes/

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

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

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

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

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

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

April 17/no changes at the GLD/Inventory remains at 848.92 tonnes

April 13/a deposit of 6.51 tonnes into the GLD/Inventory rests at 848.92 tonnes

this no doubt is a paper deposit/

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

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

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

April 10/1.77 tonnes added into inventory at the GLD/inventory rests at 838.29 tonnes

April 7/a small withdrawal of .28 tonnes from the GLD/Inventory rests at 836.49 tonnes

April 6/no change in gold tonnage at the GLD/Inventory rests at 836.77 tonnes

April 5/no change in gold tonnage at the GLD/Inventory rests at 836.77 tonnes

April 4/no change in gold tonnage at the GLD/Inventory rests at 836.77 tonnes

April 3.2017: a huge deposit of 4.45 tonnes of gold into the GLD/Inventory rests at 836.77 tonnnes

March 31/another withdrawal of 1.19 tonnes of gold inventory fro the GLD/this inventory would no doubt be heading for Shanghai/GLD inventory: 822.32 tonnes

March 30/no changes in gold inventory at the GLD/Inventory rests at 833.51 tonnes

March 29/a withdrawal of 1.78 tonnes of gold out of the GLD/Inventory rests tongith at 833.51 tonnes

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May 11 /2017/ Inventory rests tonight at 851.89 tonnes
*IN LAST 149 TRADING DAYS: 96.24 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 92 TRADING DAYS: A NET  31.19 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  56.53 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

May 11/no changes in silver inventory at the SLV/Inventory rests at 338.610 million oz

May 10/ a gigantic 3.833 million oz of silver added to the SLV and this occurred with the constant whacking of silver for the past 17 trading sessions/inventory rests at 338.610 million oz

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

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

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

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

April 17/no changes in inventory at the SLV/Inventory rests at 328.201 million oz

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

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

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

April 10/ a paper withdrawal of 11.231 million oz of silver from the SLV and this silver was used in the raid today. Inventory rests at 317.231 million oz

April 7./ a withdrawal of 947,000 oz of silver from the SLV/Inventory rests at 328.201 million oz.

April 6/a tiny withdrawal of 136,000 oz of silver from the SLV/Inventory rests at 329.148 million oz

April 5/ a withdrawal of 1.042 million oz from the SLV/Inventory rests at 329.284 million oz

April 4/no change in inventory at the SLV/Inventory rests at 330.326 million oz/

April 3.2017; a withdrawal of 568,000 oz from the SLV/Inventory rests at 330.326

million oz/

March 31/no change in inventory at the SLV/Inventory rests at the SLV/Inventory rests at 330.894 million oz/
March 30/a huge withdrawal of 2.746 million oz from the SLV/inventory rests at 330.894 million oz/
March 29/a deposit of 1.136 million oz into the SLV/Inventory rests at 333.640 million oz
May 11.2017: Inventory 338.610  million oz
 end

Major gold/silver trading/commentaries for THURSDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

 

U.S. Gold Exports To China and India Surge In 2017

Gold Exports From U.S. – Something Big Is Happening


by SRSRoccoReport.com

Most Americans didn’t realize it, but something BIG changed in the U.S. gold market in the beginning of 2017.  While precious metals sentiment and buying in the U.S. has dropped off considerably in the first quarter of 2017, the East continues to acquire gold, HAND OVER FIST.

How much gold?  Well, let’s just say…. U.S. gold exports have nearly doubled during JAN-FEB 2017 versus the same period last yearTotal U.S. gold exports JAN-FEB 2017 surged to 101 metric tons (mt), compared to 56.5 mt last year.  This is quite interesting because total U.S. gold mine supply plus gold imports for JAN-FEB 2017 only equaled 80 mt.  Thus, the U.S. suffered a 21 mt gold supply deficit in the first two months of the year.  Which means, someone had to liquidate an additional 21 mt of gold from their vaults to export to the East….. where they still understand the vital role of gold as REAL MONEY.

And where did the majority of U.S. gold exports head to?  You got it….. Hong Kong-China & India.

Of the 101 mt of U.S. gold exports JAN-FEB 2017, Hong Kong-China and India received 61.8 mt, or nearly two-thirds of the total.  Switzerland received 28 mt, U.K. imported 5.6 mt and the U.A.E. acquired 3.3 mt.  The remaining 2.3 mt went to various countries such as, Germany, Canada and Mexico.

What is also quite interesting, is that the majority of the year-over-year increase went to Hong Kong-China and India.  U.S. gold exports to Hong Kong-China and India doubled from 31 mt during JAN-FEB 2016 to 61.8 mt JAN-FEB 2017.

What does this all mean?  It means, as U.S. precious metals investors continue to BICKER, COMPLAIN, BELLY-ACHE and WHINE about the low gold price, the Chinese and Indians smile as they continue to exchange increasing worthless fiat money for shiny yellow metal.

Matter-a-fact, I have heard from several sources, that many precious metals investors in the U.S. are selling gold into the market.  This has to be one of the STUPIDEST things to do.  Of course, if a person needs to sell gold to purchase something or pay bills… that is understandable.  But, to sell gold because of low market sentiment, goes against all sound reasoning and logic to own gold.

People need to realize the U.S. and global financial and economic system are in the BIGGEST BUBBLE in history.

To sell one’s GOLD INSURANCE at this time, makes me wonder… what the hell happened to IQ’s recently?

Source: SRSRoccoReport.com

News and Commentary

Gold imports by India said to rise more than four-fold in April (Bloomberg.com)

Gold inches up from 8-week low as dollar weakens (Reuters.com)

U.S. Stocks Boosted by Oil Rally as Dollar Slips (Bloomberg.com)

U.S. import prices increase for fifth straight month (Reuters.com)

Europe Stocks Slip as Oil Leads Commodity Rebound: Markets Wrap (BloombergQuint.com)

Palladium set to overtake platinum – GFMS (EngineeringNews.co.za)

The Donald Finally Fired A Swamp Creature (DailyReckoning.com)

Eric Sprott praises GATA’s work at retirement dinner (Gata.org)

Panic! Like It’s 1837 (TheDailyBell.com)

Goldman Asks If Yellen Has Lost Control Of The Market, Warns Of Fed “Policy Shock” (ZeroHedge.com)

END

 

At the retirement dinner, Eric Sprott recognizes GATA;s work even though quite a few WGC members were in the room.  Eric has guts going against the establishment..good for him and I am glad that GATA is getting the praise it deserves:

(courtesy Chris Powell/GATA)

At retirement dinner, Eric Sprott praises GATA’s work

Section:

5:40p ET Wednesday, May 10, 2017

Dear Friend of GATA and Gold:

Sprott Asset Management founder and philanthropist Eric Sprott, honored last night in Toronto at a retirement testimonial dinner sponsored by the company, praised GATA’s work and called on GATA Chairman Bill Murphy and your secretary/treasurer to stand and be recognized. Some people in the audience of about 200 actually applauded, through the audience consisted mainly of ordinarily respectable people from the Canadian financial industry. Of course they may have just been trying to be polite and to humor Sprott. But some later confessed to following GATA’s work and to have been persuaded by it.

Sprott went on mischievously to contrast what he called “the GATA table,” at which Murphy and your secretary/treasurer were seated with Sprott Asset Management’s John Embry and economist Ian Gordon of Longwave Group, with what he called “the World Gold Council table,” at which two former chairmen of the council were seated: Franco-Nevada founder Pierre Lassonde and Goldcorp Chairman Ian Telfer. Sprott noted that during the dinner no rolls had been thrown from the GATA table toward the World Gold Council table.

Civility and cordiality were maintained though Lassonde repeatedly has dismissed complaints of gold market manipulation and has insisted that central banks couldn’t care less about gold —

http://www.gata.org/node/13105

— while GATA has dismissed the World Gold Council as an accomplice with central banks in gold price suppression, a facilitator of “paper gold” and the shorting of the monetary metal.

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

END

 

Cramer comments that with the USA’s constitutional crisis upon them, gold should be flying but somehow it is not.  Try massive manipulation

(courtesy Kitco/GATA)

Anomalous calm in markets, not volatility, has become the sign of crisis

Section:

6p ET Wednesday, May 10, 2017

Dear Friend of GATA and Gold:

Kitco’s Sarah Benali notes that CNBC market analyst Jim Cramer today marveled at gold’s inability to rise despite the growing political turmoil in Washington, particularly President Trump’s firing of FBI Director James Comey.

“If this is a ‘constitutional crisis,’ gold should be flying,” Cramer said on CNBC’s “Squawk on the Street” program. “If this is a constitutional crisis, the S&P should be down a percent and a half.”

Benali’s report and video of Cramer’s comments can be found at Kitco here:

http://www.kitco.com/news/2017-05-10/Jim-Cramer-Gold-Should-Be-Flying-If…

Of course such anomalous and counterintuitive behavior in the markets has been happening for a long time, and today’s behavior doesn’t mean that Comey’s firing is not a “constitutional crisis” or at least a political one. More likely it means that surreptitious intervention by governments in the markets has become more aggressive than ever.

Fortunately for the intervenors, apparently nothing will ever prompt CNBC’s Cramer or even Kitco’s Benali to try putting to government and central bank officials a few specific questions about such intervention, questions that arise from the documentation collected by GATA and compiled here:

http://www.gata.org/node/14839

Asking critical questions of government and central bank officials would constitute journalism, of which there is precious little in the financial markets and even less in the gold market these days.

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

 

END

 

We have been highlighting this story to you all week:  India’s gold imports have risen 4 fold in April…and this does not include the smuggling.

(courtesy Bloomberg)

Gold imports by India said to rise more than four-fold in April

Section:

By Shruti Srivastava and Swansy Afonso
Bloomberg News
Wednesday, May 10, 2017

Gold imports by India gained more than four-fold in April driven by jewelers restocking in anticipation of a recovery in sales during the wedding season that will last until mid-June.

Shipments rose to 98.3 metric tons last month from 22.2 tons a year earlier, according to a person familiar with provisional data from the finance ministry, who asked not to be identified as the data aren’t public. Imports were affected a year earlier because of a strike by jewelers to protest an excise tax on jewelery made and sold locally. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-05-10/gold-imports-by-india…

END

It is about time;  the Arizona legislature ends income taxation on gold and silver:

(courtesy Money Metals/GATA)

Arizona Legislature Ends Income Taxation on Gold & Silver

Commodities / Gold and Silver 2017May 10, 2017 – 06:48 PM GMT

By: MoneyMetals

By Jp Cortez : Phoenix, Arizona (May 10th, 2017) – Sound money advocates scored a major victory today when the Arizona state senate voted 16-13 to remove all income taxation of precious metals at the state level. The measure heads to Governor Doug Ducey, who is expected to sign it into law.

Under House Bill 2014, introduced by Representative Mark Finchem (R-Tucson), Arizona taxpayers will simply back out all precious metals “gains” and “losses” reported on their federal tax returns from the calculation of their Arizona adjusted gross income (AGI).

If taxpayers own gold to protect themselves against the devaluation of America’s paper currency, thanks to the inflationary practices of the Federal Reserve, they frequently end up with a “gain” when exchanging those metals back into dollars. However, this is not necessarily a real gain in terms of a gain in actual purchasing power. This “gain” is often a nominal gain because of the slow but steady devaluation of the dollar. Yet the government nevertheless assesses a tax.

Sound Money Defense League, former presidential candidate Congressman Ron Paul, and Campaign for Liberty helped secure passage of HB 2014 because it begins to dismantle the Federal Reserve’s monopoly on money.

“Arizona is helping lead the way in defending sound money and making it less difficult for citizens to protect themselves from the inflation and financial turmoil that flows from the abusive Federal Reserve System,” said Stefan Gleason, Director of the Sound Money Defense League.

Dr. Ron Paul noted, “HB 2014 is a very important and timely piece of legislation. The Federal Reserve’s failure to reignite the economy with record-low interest rates since the last crash is a sign that we may soon see the dollar’s collapse. It is therefore imperative that the law protect people’s right to use alternatives to what may soon be virtually worthless Federal Reserve Notes.”

A few state legislatures, including Utah and Idaho, have also taken steps toward eliminating income taxation on the monetary metals. Other states are rolling back sales taxes on gold and silver or setting up precious metals depositories to help citizens save and transact in gold and silver bullion.

Read more about what states can do to promote sound money policies here.

Jp Cortez is a graduate of Auburn University and a resident of Charlotte, North Carolina. He is a Mises University alumnus. He is the Assistant Director of the Sound Money Defense League, an organization working to bring back gold and silver as America’s constitutional money. Follow him on twitter, @JpCortez27

© 2005-2016 http://www.MarketOracle.co.uk

-END-

 

The silver institute now claims that 2016 mine production was down .6% to 886 million oz. The reason for the drop is lower production of base metals.

We do know that both Russia and China produce around 190 million oz and none of their production is ever sold.

Thus the available silver supply for sale is now less than 700 million oz.

(courtesy Daniela Cambone/Kitco)

 

Silver Mine Production Drops For First Time In 14 Years – Study

Daniela Cambone

Thursday May 11, 2017 08:17

(Kitco News) – (New York City) Global silver mine production in 2016 recorded its first decline since 2002, largely the result of lower by-product output from the lead/zinc and gold sectors – this according to the latest study by an organization committed to the metal’s cause, the Silver Institute.

The institute said that silver scrap supply to the market posted its lowest level since 1996; total silver supply decreased by 32.6 million ounces in 2016.

These findings, and other key components of the silver market, are discussed in the World Silver Survey 2017, released today by the Silver Institute and produced by the GFMS Team at Thomson Reuters (GFMS).

“Global silver mine production declined by 0.6 percent in 2016 to a total of 885.8 Moz. A large proportion of the drop was attributable to the lead/zinc and gold sectors, where production dipped by a combined 15.9 Moz,” the institute study said.

The study noted that Mexico registered the largest drop in production last year, followed by Australia and Argentina, yet those losses were partially offset by gains in Central and South America and Asia.

Silver Price

In 2016, the annual average silver price posted a 9.3 percent increase, its first rise since 2011, the study reported. “The average price last year, at US$17.14, registered 28 percent higher than 2007, when the silver price averaged US$13.38,” it found. GFMS is projecting an annual silver average price forecast in 2017 of $18.70/oz.

For the past month the silver market has seen significant selling pressure, giving up most of its gains seen at the start of the year. July Comex silver futures last traded at $16.32 an ounce, up 0.70% on the day.

Fabrication Demand

Silver demand in the solar sector surged 34 percent, driven by a 49 percent increase in global solar panel prices and a build-up of stocks. This is the largest growth since 2010, the study noted.

However, silver’s use in electrical and electronic applications fell last year, “victims of a still sluggish global economy,” the study noted.

-END-

Now we see that the LME wants to submit a proposal to run the London silver price fix. If they do get to run it, we will see the same sort of fraud in its setting of the fix price.

(courtesy Reuters)

LME throws hat into ring to run London silver price fix

HONG KONG, May 10 (Reuters) – The London Metal Exchange (LME) will submit a proposal to take over the London silver fix, a senior executive said on Wednesday, the first company to publicly express interest in replacing the current operators of the price benchmark.

James Proudlock, managing director and head of market development for the exchange and its clearing business, said the exchange would take part in the process after a request for proposals (RFP) was recently issued to find a replacement for CME Group and Thomson Reuters.

Those companies said in March they would step down from providing the silver price benchmark auction less than three years after successfully bidding to provide the process.

“There is a silver RFP for the silver benchmark. As a metal exchange, we will participate in the RFP,” said Proudlock.

Proudlock’s comments come as the world’s oldest and biggest metal market prepares to launch a new precious metals contracts in July 10.

The 140-year-old exchange took part in the bidding for the silver fix in 2014, but lost out to CME and Thomson Reuters. Sources have said more stringent banking regulations may complicate efforts by the London Bullion Market Association to find a successor.

The benchmark is used by silver producers and consumers around the world, including jewellers and electronics firms, to price their contracts in the multi-billion-dollar a day trade.

Other steps the LME is taking include continuing to look at listing a hot-rolled coil steel product, Proudlock said while at the LME Asia conference, although the exchange needs to consider the business case for it.

(Reporting by Josephine Mason; Editing by Christian Schmollinger)



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

 
 

1 Chinese yuan vs USA dollar/yuan A LITTLE STRONGER  6.9022(REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES A TOUCH STRONGER TO ONSHORE AT   6.9059/ Shanghai bourse CLOSED UP 8.71 POINTS OR .29%   / HANG SANG CLOSED UP 110.13 POINTS OR 0.44% 

2. Nikkei closed UP 61.46 POINTS OR 0.31%   /USA: YEN FALLS TO 114.00

3. Europe stocks OPENED ALL IN THE GREEN EXCEPT SPAIN       ( /USA dollar index FALLS TO  99.65/Euro DOWN to 1.0866

3b Japan 10 year bond yield: RISES TO   +.054%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 114.00/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  47.97 and Brent: 50.45

3f Gold UP/Yen UP

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

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

3h Oil 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  +.438%/Italian 10 yr bond yield DOWN  to 2.288%    

3j Greek 10 year bond yield FALLS to  : 5.61% ???  

3k Gold at $1223.30/silver $16.34 (8:15 am est)   SILVER ABOVE  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 52/100 in  roubles/dollar) 57.89-

3m oil into the 47 dollar handle for WTI and 50 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 114.00 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning  1.0078 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0949 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017 

3r the 10 Year German bund now POSITIVE territory with the 10 year RISES to  +0.438%

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 2.398% early this morning. Thirty year rate  at 3.034% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Europe, US Futures Slip Despite Brent Bouncing Back To $51

Asian stocks rose lifted by commodity names; European equities trade mostly lower but with little in the way of conviction or firm direction while the Italian banking index is at the highest level in a year following domestic earnings; S&P index futures are modestly in the red after the cash market closed at a record high Wednesday and investors prepared for earnings from retailers; we expect the now general vol selling program to promptly lift the S&P into new all time highs minutes after today’s open.

Global sentiment was boosted for the second day by a rebound in energy shares as oil prices rose, with Brent regaining the $51 level and reverse all of last week’s losses, after U.S. fuel inventories declined and Saudi Arabia cut supplies of crude to Asia more than expected.

The MSCI’s gauge of global stock markets was up 0.1 percent, bringing their gains for the year to nearly 10 percent, and into fresh record territory. After starting off deep in the red, the Shanghai Composite managed to recover and close green, despite another tumble in iron ore on SGX AsiaClear in Singapore, where it fell as much as 4.5% to $59 a ton, the lowest since October amid a clampdown on leverage in China, the top consumer, and expanding global supply.

European stocks dropped for the first time in three days as a rebound in mining and energy shares failed to offset a broader negative mood at least in early trading. The Stoxx Europe 600 Index slipped following a raft of corporate results. Companies including Telefonica, UniCredit and Maersk reported good earnings, but the index this week climbed to near the highest on record and as the Bloomberg chart below shows, it is now massively overbought.

European gov’t bond yields rose as rising oil prices reinforced expectations inflation would pick up, and raised risks of a hike or taper by the ECB. Those expectations also boosted the euro, which rose 0.3 percent against the dollar to $1.0868.

The problem for traders is a familiar one: while company earnings (if not so much U.S. data lately) are painting a picture of robust global growth – mostly on a non-GAAP basis of course – and political risk has eased following France’s presidential election, investors are “showing a lack of conviction as global equities trade at record-high levels and volatility evaporates. The path for interest rates will remain a major focus, with the Bank of England meeting today amid growing bets for a Fed increase in June and talk of tapering by the European Central Bank.”

Today, the paradox of “good news is bad news” was summarized by Ben Kumar, a London-based investment manager at Seven Investment Management, who said that “Investors are trying to make sense of contradictory forces. Everyone’s quite optimistic and companies are making lots of money and this is all good stuff, and they start thinking about Mario Draghi and the taper and how much that will hurt.”

In a note overnight, Goldman warned that despite the Fed’s two rate hikes in the past 5 months, financial conditions are the easiest in two years, which may prompt the Fed to “shock” markets.

Also of note: the reflation trade appears to have returned again, if only for the time being, and in addition to TSYs and Bunds, Japanese JGBs saw upward pressure on yields despite the strongest bidside demand for 30Y paper in the overnight auction in months.

In FX, the dollar weakened against a basket of major currencies, though most major currency pairs were all holding in tight ranges. Earlier in the Asian session, the New Zealand dollar sank as much as 1.5 percent after the country’s central bank stuck with a neutral bias on policy, warning markets they were reading the outlook wrong and expressing approval of the currency’s declines this year.

As SocGen’s Kit Juckes writes, “overnight currency drivers have been a pretty eclectic collection of unrelated developments. The biggest mover is the NZD which plunged to an 11 month low, weakened by the RBNZ’s policy decision, which left rates on hold and shows no sign of wanting to act any time soon. The second biggest mover is the Canadian dollar, undermined by Moody’s downgrading six banks on concerns about private sector debt. The Korean won was the main appreciating currency, rising with the equity market on anticipation of easier fiscal policy. And the final mover (apart from these four, very little happened) is the Australian dollar, down as iron ore prices fall again (a move which has weakened Chinese equities, too). The bounce in oil prices – Brent hit $51/bbl in early trading – is worthy of mention too.”

Elsewhere, “EUR/USD, USD/JPY and EUR/JPY for that matter, are marking time after recent moves. Mario Draghi was given a plastic tulip but didn’t take the bait and remained steadfastly dovish. EUR/USD needs Bund support and while both EUR/USD and EUR/JPY are a buy here, patience will be needed. The yen has fallen significantly on low vol and rising yields elsewhere. There is no data due today in the US and only one speaker (Dudley, this morning, in Mumbai).”

Oil rose after posting the biggest advance this year on Wednesday as U.S. crude stockpiles fell by more than twice what had been forecast, declining further from record and easing glut.  EIA data showed stockpiles -5.25m bbl last week, the 5th weekly drop and biggest fall this year; compared to a -2m bbl median estimate in Bloomberg survey. Gasoline, distillate supplies also shrank, helping allay concerns over gaining U.S. crude output.

“The support that we see relates directly to the larger- than-expected draw on crude inventories” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. “U.S. demand is a bit of a surprise factor for the market. Daily production has climbed again and stockpiles still remain very elevated, so that suggests this rally might not last too long.”

Brent crude rose another 1.3% following a 3 percent gain in the previous session. The advance helped Brent regain the $51 level and reverse all of last week’s losses.

“We saw the biggest draw in (U.S.) inventories for the year last week with stockpiles down more than 5 million barrels, and it looks like OPEC’s production cut is finally biting,” said Greg McKenna, chief market strategist at brokerage AxiTrader.

Gold was poised to snap its six-day losing streak amid a wider commodity bounce. The precious metal added 0.3 percent to $1,223.51 following the longest losing streak since October.

* * *

Market Snapshot

  • S&P 500 futures down 0.15% to 2,391.75
  • STOXX Europe 600 down 0.2% to 395.84
  • MXAP up 0.3% to 150.67
  • MXAPJ up 0.5% to 493.02
  • Nikkei up 0.3% to 19,961.55
  • Topix up 0.1% to 1,586.86
  • Hang Seng Index up 0.4% to 25,125.55
  • Shanghai Composite up 0.3% to 3,061.50
  • Sensex up 0.2% to 30,306.64
  • Australia S&P/ASX 200 up 0.05% to 5,878.34
  • Kospi up 1.2% to 2,296.37
  • German 10Y yield rose 3.0 bps to 0.452%
  • Euro up 0.1% to 1.0880 per US$
  • Italian 10Y yield fell 3.1 bps to 1.955%
  • Spanish 10Y yield rose 4.0 bps to 1.646%
  • Gold spot up 0.2% to $1,221.34
  • U.S. Dollar Index down 0.1% to 99.57
  • Brent Futures up 1.55% to $51.00/bbl

Top Overnight News from Bloomberg

  • Growth in the euro area will be slightly stronger this year than previously forecast, the European Commission said, adding that some risks to the outlook have eased following the defeat of populist parties in France and the Netherlands
  • Bank of England Governor Mark Carney may point to a first- quarter slowdown in economic growth and downside risks to inflation from Brexit and the imminent U.K. election as reasons to avoid rushing into an interest-rate increase
  • President Donald Trump’s firing of FBI director James Comey is an unwelcome distraction for a White House already straining to enact its agenda and could hamper its efforts to pass a repeal of Obamacare and cut taxes
  • New Zealand’s dollar dropped to an 11-month low after a central bank policy statement was unexpectedly dovish. Canada’s currency weakened after Moody’s Investors Service downgraded six of the nation’s banks
  • Calif. Judges Call for Utility Rate Decisions by Jan. 1, 2019
  • Florida High-Speed Rail Project Defeats Suit by Two Counties
  • JBS Said to Delay New York Initial Offering After Meat Scandal
  • BD Prices Offerings of $2.25b Shares, $2.25b Depositary Shares
  • Marriott Sees First Few Months of Starwood Merger Positive: COO
  • Microsoft Sees FY2017 Commercial Cloud Sales Close to $15b
  • Apple Supplier AAC Tumbles After Gotham Short-Selling Report
  • Seacor Spinoff to Trade on When-Issued Basis on May 18
  • Merck & Co’s Keytruda Combo Wins FDA Approval in Lung Cancer
  • Hawthorn Bancshares Declares 4% Stock Dividend
  • Abercrombie & Fitch Confirms Receiving Indications of Interest
  • Aetna Says It Will Quit All Obamacare Exchanges in 2018
  • Intertrust Accelerated Bookbuild Completed
  • US Foods Holding Files to Sell 35m Shares for Holders
  • Fidelity National Gets IRS Ruling on Tax-Free Distribution Plan
  • Adidas Drops Golf Handicap as Buyer Found After Yearlong Search
  • Deutsche Telekom CEO Eyeing Up Merger Partners for T- Mobile US

Asia equity markets traded mostly higher following a similar lead in the US where energy outperformed in the wake of the DoEs. This in turn supported energy names in the ASX 200 (+0.1%) with a continued recovery in the largest weighted financials sector also helping the index to stay afloat. Nikkei 225 (+0.3%) remained driven by recent JPY weakness as the index extended on its highest levels last seen in 2015 to draw closer to the 20,000 level. Hang Seng (+0.4%) and Shanghai Comp. (+0.3%) were mixed with the latter weighed amid a slump in Chinese commodity prices and tougher regulatory concerns. 10yr JGBs were lower as safe-haven demand was dampened amid gains in riskier Japanese assets, while the 30yr auction failed to support with the auction prices lower than last month.

Top Asian News

  • Moon Seeks to Mend China Ties Over Thaad in Call With Xi
  • China April Vehicle Sales Fall 2.2% on Year, CAAM Says
  • AAC Technologies Falls After Gotham Questions Profit Margins
  • China Sovereign Bond Rout Seen Ending Amid Stress on Economy
  • Wage Gains Set to Split Japan Inc. Into Winners and Losers
  • Taiwan Stock Index Rises Above 10,000 for First Time in 17 Years
  • China Said to Prepare Hong Kong Stock Support for Handover Day
  • Nikkei 225 Inches Closer to 20,000 With Yen Near Two-Month Low
  • China Small Caps Head for Lowest Close in More Than Two Years

In Europe it has been another morning dictated by earnings updates. Italian banking index has been propelled to the highest level in a year after the likes of UniCredit, Mediobanca and UBI report better than expected profits, as such, this has seen the FTSE MIB outperform against its counterparts. Telco names lag the session thus far amid soft financial figures from BT in which they announced that annual profits fell 19%. Elsewhere, a slew of UK companies are trading without entitlement to their latest dividend pay-out , consequently trimming roughly around 13.7 points off the FTSE 100. In credit markets, the German 10yr benchmark softens on a technical breach above 0.45% with the 10yr notably underperforming across the curve as yields tick up 4.4bps, levels of resistance to the upside reside at 0.5% through to 0.51 % (YTD high). Elsewhere, gilts saw a slight move higher in the wake of the aforementioned soft UK data release.

Top European News

  • EU Raises Euro-Area GDP Forecast, Says Risks Are More Balanced
  • EU Raises U.K. Growth Outlook, But Warns of Brexit Uncertainty
  • Trade Weighs on U.K. Growth as Deficit Widens in First Quarter
  • Concerns Over Thyssenkrupp’s Tata Steel Deal Are Spreading
  • Hikma, Vectura Drop; Generic Advair Approval Unlikely This Yr
  • Credit Agricole Tops Estimates on Mortgage Fees, Capital Markets
  • IPIC Says Settlement With 1MDB, Malaysia Now Unconditional
  • Gilts Fall Before Industrial Output Data; BOE Decision in Focus
  • Hedge Funds Help Zurich Absorb Hit From U.K. Rate Reform
  • Deutsche Telekom CEO: Merger Talks With T-Mobile US Very Likely

In currencies, the euro added 0.1 percent to $1.0882 as the Bloomberg Dollar Spot Index fell less than 0.1 percent. The kiwi fell 1.3 percent to 68.49 U.S. cents. The Reserve Bank of New Zealand kept its benchmark rate unchanged and said it will keep rates there for an extended period in expectation that inflation will slow. The Canadian dollar dropped 0.4 percent after Moody’s Investors Service downgraded six Canadian banks. The NZD remains lower by over a percent, to trade at 7-month lows as the RBNZ dispels hawkish speculation by stating that accommodative monetary policy will remain for a considerable amount of time, while Governor Wheeler noted that inflation expectations will have to rise in order to consider tightening. CAD continues to soften with USD/CAD meandering around 1.3700, the impetus this time caused by Moody’s downgrading 6 Canadian banks which was prompted by weakening credit conditions in Canada. EUR saw a modest push higher amid the pick in German bund yields which tripped above 0.45%, alongside this, EUR/GBP saw a break above 0.8400. Not so super so far with GBP taking a dip on soft construction, industrial and Mfg. figures, however remains above 1.29 with all eyes on the BoE QIR.

In commodities, West Texas oil rose 1.3 percent to $47.93 a barrel after jumping more than 3 percent Wednesday. Gold added 0.2 percent to $1,221.53 following the longest losing streak since October.  Iron ore on SGX AsiaClear in Singapore fell as much as 4.5 percent to $59 a ton, the lowest since October amid a clampdown on leverage in China, the top consumer, and expanding global supply. WTI and Brent crude futures remain at elevated levels post yesterday’s DoE report, Brent stalls just before USD 51, WTI briefly breaks above USD 48. Crude prices unfazed by comments out of Iraq in which the oil ministry stated that lifting output to 5mln bpd would not be a conflict with output cut agreement. Elsewhere, Price action across the commodities complex overnight was centred around China as Dalian iron ore futures resumed its recent rout and dropped 5% shortly after the open of metals trade in China. Copper was uneventful, edging minimal gains amid a mostly positive risk tone.

Looking at the day ahead, due out today are the latest economic forecasts from the European Commission. All this comes before the BoE policy meeting at midday. Over in the US the April PPI report is due, along with the latest weekly initial jobless claims print. Away from the data, the Fed’s Dudley is scheduled to speak at 6.25am ET on the topic of globalization. The ECB’s Praet also speaks this afternoon while BoE Governor Carney speaks after the BoE meeting decision. G7 finance ministers also meet in Italy for the start of a three-day meeting today.

US Event Calendar

  • 8:30am: PPI Final Demand MoM, est. 0.2%, prior -0.1%
    • PPI Ex Food and Energy MoM, est. 0.2%, prior 0.0%
    • PPI Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.1%
    • PPI Final Demand YoY, est. 2.2%, prior 2.3%
    • PPI Ex Food and Energy YoY, est. 1.6%, prior 1.6%
    • PPI Ex Food, Energy, Trade YoY, prior 1.7%
  • 8:30am: Initial Jobless Claims, est. 245,000, prior 238,000; Continuing Claims, est. 1.98m, prior 1.96m
  • 9:45am: Bloomberg Consumer Comfort, prior 50.9

DB’s Jim Reid concludes the overnight wrap

Despite an initial dip lower at the start, US equity markets were fairly unmoved by that news of President Trump dismissing FBI Director James Comey despite it potentially taking the focus away from some of the more market focused reform stuff. Instead it was Oil which was the big mover in an otherwise very quiet today yesterday. WTI rallied +3.16% to close at $47.33/bbl and back to the highest closing level since last Wednesday (although still remains some 12% off last month’s highs). The move higher yesterday came following the some supportive EIA data which revealed that US crude stockpiles declined by the most in a single week this year.

That data came out towards the end of the European session after we had already seen European bond yields generally edge lower (Bunds -1bp, Peripherals -2-3bps) on the back of decent auction demand. ECB President Draghi’s speech at the Dutch parliament didn’t really move the dial with the President not really shedding any light on policy and instead repeating the mantra that monetary policy needs to remain accommodative to build underlying inflation pressures which continue to remain benign. Treasury yields were also tracking the move in European yields however that move in Oil helped yields climb into the close, along with a fairly weak 10y auction. 10y yields finished at 2.414% which was about 5bps off the intraday lows.

Whether or not markets are a bit more exciting today might depend on if the BoE surprises in any sense when they deliver their MPC meeting outcome along with the minutes and an updated inflation report. Our economists caution against assuming that the weaker than expected Q1 GDP report and recent sterling appreciation (equating to less imported inflation) will substantially alter the sense of declining tolerance for higher inflation. They note that on the one hand the first estimate of UK GDP is notoriously inaccurate and the latest PMI data is more consistent with the MPC’s recently more constructive stance on growth.

On the other hand, sterling appreciation would mean lower inflation all else unchanged. However, other things have changed and our team expect the MPC forecasts for inflation to rise further above target in 2017 and 2018. In summary, their expectation for what we get today is as follows: (1) Interest rates and asset purchases to remain unchanged. (2) The “balanced risks” assessment to remain unchanged. (3) Kirsten Forbes to maintain her vote for a 25bp policy rate hike. They see significant risk that Michael Saunders will start voting for a hike also in the next few months; it cannot be ruled out that he votes for it in May. (4) They expect the sentence that “some members” could consider a more rapid tightening of policy to remain. (5) The concessions towards a more positive economic performance to remain in the minutes despite the weaker Q1 GDP number. (6) A repeat of the statement in the minutes that “some modest withdrawal of monetary stimulus over the course of the forecast period remains appropriate”.

That meeting is due at 12pm BST, followed by Governor Carney speaking shortly after. Before we get there, it’s a familiar story playing out in Asia this morning with most major bourses firmer, with the exception of China. The Nikkei (+0.15%), Hang Seng (+0.62%), Kospi (+1.01%) and ASX (+0.49%) are all higher with a consistent theme being the strong rally for energy names, however in China the Shanghai Comp is -0.36%. That in part may reflect the news that the PBoC is increasing its coordination with the banking, securities and insurance regulators in China on implementing fresh regulations. It’s worth noting that the Shanghai Comp is on course for its lowest close since September 2016 while the Hang Seng is at the highest level since July 2015. US equity futures are little changed this morning.

Moving on. The Fedspeak yesterday was again mostly focused on the non-voting Boston Fed’s Rosengren (who appears to have been particularly busy this week). The most significant takeaway from his speech was his mention of unwinding the balance sheet as being “appropriate” after one more rate hike (his call is for 3 more this year to prevent any overheating). Away from this and with regards to the macro data, in the US the import price index was revealed as rising more than expected in April (+0.5% mom vs. +0.1% expected) with ex-petroleum also high at +0.4% mom. The other data released was the federal budget which showed a budget surplus of $182bn which was more or less in line with market expectations.

Staying with the US, it’s worth highlighting that yesterday our US economists made changes to their forecasts in light of recent economic data and other developments. They argue that the passage of legislation entailing a substantial tax cut and significant fiscal stimulus now seems much less likely than it did in the wake of the US election results. Accordingly, they have marked down their forecast for US growth this year by a couple tenths (to a still above-consensus 2½%) and for 2018 by a full percentage point (to 2¼%). Despite the markdown of their growth forecast, their outlook for unemployment, inflation, and the Fed has moved in a slightly more hawkish direction. This is partly because smaller tax cuts and lower investment spending yield smaller gains in labour productivity and a slower pick up in supply-side growth. But they also think that the cyclical rebound in labour force participation now appears to have less room to run than they had assumed previously, resulting in an unemployment rate that falls noticeably below 4% next year. Recent soft inflation prints will weigh on core inflation in the near-term, which, combined with recent commodity price softness, will lower headline inflation. But they expect an uptrend in core inflation to resume later this year, with core PCE rising above the Fed’s 2% inflation target by end-2018. Their Fed outlook remains more hawkish than that implied by the median dot in the Fed’s own projections. They continue to expect two more rate hikes this year with the next occurring in June, and the Fed should announce the start of phasing out its reinvestment policy by year-end. In 2018, they expect the Fed to raise rates four times.

Looking at the day ahead, this morning in Europe the main data of note is from the UK where the March industrial and manufacturing production report is due (both expected to decline slightly) along with the March trade balance reading. Also due out today are the latest economic forecasts from the European Commission. All this comes before the aforementioned BoE policy meeting at midday. Over in the US this afternoon the April PPI report is due, along with the latest weekly initial jobless claims print. Away from the data, the Fed’s Dudley is scheduled to speak at 11.25am BST on the topic of globalization. The ECB’s Praet also speaks this afternoon while BoE Governor Carney speaks after the BoE meeting decision. G7 finance ministers also meet in Italy for the start of a three-day meeting today.

3. ASIAN AFFAIRS

i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed UP 8.71 POINTS OR .29%  OR / /Hang Sang CLOSED UP 110.13 POINTS OR 0.44% .  The Nikkei closed UP 61.46 POINTS OR 0.31%/Australia’s all ordinaires  CLOSED UP .02%/Chinese yuan (ONSHORE) closed UP at 6.9022/Oil UP to 47.97 dollars per barrel for WTI and 50.45 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT SPAIN   ..Offshore yuan trades  6.9059 yuan to the dollar vs 6.9022 for onshore yuan. NOW  THE OFFSHORE IS  STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LITTLE BIT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS A LITTLE HAPPIER THIS MORNING

3a)THAILAND/SOUTH KOREA/NORTH KOREA

 

i)NORTH KOREA

Afghanistan is the world’s largest producer of opium as 90% of the global production comes from there and the USA guards and protects the poppy fields..very strange.  With the cut off of coal trade and other sanctions, North Korea has now resumed poppy production which will now put the USA in a total conflict again with North Korea if they are to keep the Afghanistan route sound

(courtesy Whitney Webb/AntiMedia.org)

North Korea Is A Major Opium Producer (Making It A Prime Target For The CIA)

Authored by Whitney Webb via TheAntiMedia.org,

When the U.S. overthrew the Taliban in the wake of 9/11 as part of its newly launched “war on terror,” it set the stage for the explosive growth of Afghanistan’s dying opium industry. A few short months before the invasion took place, the Taliban made headlines for having “dramatically ended the country’s massive opium trade” after the leader of the fundamentalist group had declared the substance to be un-Islamic. At the time, Afghanistan’s opium was used to produce 75 percent of the world’s heroin.

But despite being squashed by the Taliban, the opium market made a dramatic comeback immediately following the U.S. invasion in October 2001. Not only was the opium trade restored, it surged drastically – rising from a production level of 185 tons under the Taliban (before the production ban) to 3,400 tons in 2002.

Over a decade later, the amount of opium harvested annually continues to rise. Afghanistan’s opium is now used to produce 90 percent of the world’s heroin. This increase has been directly overseen by U.S. forces, who openly guard Afghanistan’s poppy fields. Indeed, during that same time, the U.S. government claims to have spent $8.4 billion on counternarcotic programs within Afghanistan.

The dramatic increase in opium production in post-invasion Afghanistan has sparked speculation regarding the motives behind the aggressive action that the U.S. has recently taken towards North Korea, which is also a major opium producer.

While government-sanctioned opium production took a hit after Kim Jong-un assumed power in 2011, things have changed drastically in recent months, largely due to Chinese sanctions that were announced in mid-February. The sanctions, created in response to a North Korean ballistic missile test, led China to refuse imports of North Korean coal. Coal represents 40 percent of North Korea’s exports to China.

That drastic hit to the North Korean economy has apparently forced Kim Jong-un’s hand, as opium production has once again picked up. Kang Cheol-hwan, a North Korean defector and president of the North Korea Strategy Center, told the Yonhap News Agency that “the North is cultivating poppy fields again for drug smuggling as a way to secure funds to manage its regime.”

While North Korea’s opium production is small compared to that of post-invasion Afghanistan, it is still significant. North Korea, according to the Chosun Ilbo, produces around 40 tons of opium annually — comparable to Pakistan’s opium industry. Most of its opium is smuggled into and sold in China and cannot be targeted by sanctions, since it is hard to trace on the black market.

Some have speculated that North Korea’s return to opium production has caught the attention of the CIA, as the intelligence agency has a history of involving itself in opium trade and drug-running in general, as evidenced by its well-documented habit of managing drug supplies from Latin America to Asia.

In addition, opioid addiction – in the form of both legal opiate painkillers and illegal drugs – is growing out of control in the U.S., with more opium being consumed within America than ever before. The onset of this epidemic coincided with the U.S.’ occupation of Afghanistan as, between 2002 and 2013, U.S. heroin use jumped by 63 percent, reaching a 20-year high. Heroin overdoses quadrupled in the U.S. within that same timeframe.

The U.S. government’s actions also suggest that it seeks to protect opium production, as has been made clear in its occupation of Afghanistan. For instance, the U.S. vehemently opposes opium legalization efforts and the State Department refuses to acknowledge eradicating opium as a primary goal, despite the billions that have been spent on counternarcotic programs.

With tension increasing on the Korean Peninsula, the U.S. has put “all options on the table” in order  to prevent further missile tests and “provocations” from the Kim Jong-un regime, including warnings that the U.S. may soon find itself in a “major, major conflict” with North Korea.

end

 

Quite a story…A Canadian man jailed in North Korea claims that there are many more Americans locked up in prisons. It seems that this notorious regime under Kim Jong -Un  kidnap visitors to North Korea and they also kidnap ex pats in foreign countries and bring them to North Korea.

(Mac Slavo./SHFTplan.com)

Man Jailed In North Korea Warns “There’s A Lot More Americans Locked Up Here Than Anyone Knows”

Authored by Mac Slavo via SHTFplan.com,

We should all hope that the current level of antagonism between the US and North Korea eventually passes, as it has many times before. But if it does, North Korea will fade from the news cycle. And with that, most people are going to forget about some of the crazy things that country has done, including the fact that they routinely kidnap foreigners and imprison them years.

Currently there are four Americans who are known to be held by the North Korean regime. But as crazy as it might sound, there are probably many more Americans and other Westerners who are secretly being held captive there. You’d think that we would know about every single person who has been taken by that government, but there’s one reputable source who claims otherwise.

While visiting North Korea, a Canadian security consultant and businessman by the name of James Leigh was imprisoned and interrogated there for several days last month. He claims that while he was in prison, he spoke to Professor Tony Kim, a US citizen who was also recently jailed by the authorities in North Korea. Kim was apparently being housed in a cell next to Leigh’s room, and the two frequently spoke to each other. Kim revealed to him that there are far more Americans being held captive in North Korea than any of us realize. Here’s what Leigh revealed in a recent interview with Newsmax, not long after he was released:

He said during his two-and-a-half day imprisonment, Prof. Kim told him, “There’s a lot more Americans locked up here than anyone knows.

 

“I said, ‘Are you serious?’”

 

“He said, ‘Yeah, Canadians, Americans, Europeans. There’s a whole place to hold them.’”

And that place apparently, goes by a very chilling name

According to Leigh, Prof. Kim told him that many other foreign nationals have been secretly arrested and imprisoned in North Korea.

 

Prof. Kim told Leigh an associate had visited the facility where the prisoners are housed. According to Prof. Kim’s account as related by Leigh, locals refer to that prison as “the house of people with no name” or “the place without a name” — Leigh was uncertain of the precise phrase due to language difficulties.

 

“He was pretty specific about that,” says Leigh. “He knew about that. That was something he really wanted me to know. … There were Americans and Europeans. … He was pretty specific because that was probably where he was going.”

And it’s not just Kim’s story that makes Leigh think that North Korea has captured scores of Westerners. He claims that during an interrogation, he saw filing cabinets brimming with large folders that were labeled with Western-sounding names. The only thing that’s even creepier than that, is how so many of these people could have found themselves imprisoned in North Korea.

“He says there a lot more Americans than we know about being held,” says Leigh, who adds that given the thousands of U.S. ex-pats living in Asia and the limited resources available to track their whereabouts when they go missing, he does not find Prof. Kim’s claim farfetched or improbable.

It sounds like he’s implying that North Korea isn’t just arresting Westerners who visit the country. They’re sending out agents to kidnap tourists and ex-pats in neighboring countries, before sneaking them back into North Korea. There’s actually a precedent for this. In the past, Kim Jong-il admitted that his government had kidnapped 13 Japanese citizens from Japan’s coastline between 1977 to 1983.

Of course, it’s easy to make light of the countless abuses that have been committed by the North Korean regime. What’s harder to admit is that in the past, our own government has passed laws that allow agents of the state to imprison American citizens without trial, and make them disappear. Our own government has been caught training the military to intern Americans, and coerce them into forced labor. While North Korea has a horrific series of gulags designed to corral and subdue unruly citizens, we have plenty of FEMA camps waiting in the wings for the next serious national emergency.

What’s going on in North Korea should stand as a warning to Americans. It’s shockingly easy for a government to make anyone disappear. And if North Korea slips away from the daily news cycle again in the near future, let’s hope that this lesson isn’t forgotten.

b) REPORT ON JAPAN

c) REPORT ON CHINA

Iron Ore prices crash last night piercing their 6th month low support levels;

(courtesy zero hedge)

China Iron Ore Prices Crash Through Key Support To 6-Month Lows

After a few short days of respite – suggested by some as indicative that the worst is over – China commodities are crashing again tonight with Dalian Iron ore snapping below 460 to its lowest since before Trump’s election

 

This has erased the entire post-Trump reflation trade hope…

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.

With all the industrials now red post-Trump…

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.

 

 

END

Humour story..

Seems that certain individuals in China want to remove any Chinese “black swans”

(courtesy zero hedge)

 

Chinese Black Swans? No Problem!

With bonds, stocks, and commodities collapsing amid a renewed wave of Chinese monetray conditions tightening, concerns over potential butterfly effects and potential ‘black swans’ are beginning to appear. However, as The South China Morning Post reports, the people of Shanghai have a solution for that…

Two deliverymen have been accused of stealing a black swan from a park in Shanghai and cooking and eating part of it, according to a TV report.

Residents living near Xujiahui Park noticed that one of five black swans living in the area was missing, Radio and Television Shanghai reported.

Surveillance footage showed the pair grabbing the swan late at night.

The men, whose full names were not given, had originally planned to catch fish, but were deterred by security patrols in the park. The bird died before the men got it home and they then boiled its carcass and froze it, according to the report. The following day they cooked it with carrots, ate half, but threw the rest away because it tasted bad. The men have been arrested by the police for hunting and killing a protected species, the report said.

*  *  *

On a serious note, we have come to expect this kind of behavior from the increasingly despeate Venezuelans, but if this is becoming the norm in Shanghai, then China’s problems run far deeper than collapsing capital markets.

end

4. EUROPEAN AFFAIRS

BANK OF ENGLAND/STATEMENT:

Mark Carney admits that England has no plan yet for a disorderly BREXIT:  down goes British stocks, the pound as well as bond yields

(courtesy zero hedge)

Stocks, Sterling, Bond Yields Drop As BoE’s Carney Admits No Plan For Disorderly Brexit

US equity futures have legged lower this morning as Cable tumbles folLowing remarks from Bank of England governor Carney that they “haven’t modeled for a disorderly Brexit.”  It appears the omniscience of central bankers is very briefly in question….

Dow Futures legged 40 points lower as Cable broke below 1.29…

And as Citi notes, GBPUSD is not looking great – we’re now testing immediate support at 1.2865, and we are down almost 65 pips since the BoE initial announcement. Meanwhile EURGBP is edging higher, and GBPJPY is so much lower it might actually be causing a small squeeze in JPY elsewhere.

BoE Governor Carney has been the nail in the coffin for GBP hawks today. There has been little reference to the positive scenarios which would support removing accommodation sooner, and given that there was only one hawk calling for a rate hike (who is leaving in June), there’s not many positives from Super Thursday thus far.  In fact, Carney has just said that BoE stimulus isn’t excessive, it’s appropriate.

And 10Y TSY yields reversed their initial spike…

 

It also appears Carney’s comments that BOE Stimulus Isn’t Excessive, It’s Appropriate, have sparked a new round of dovish chatter.

END

FRENCH ELECTION/ RUSSIA/USA: FIRST STRIKE

The following is alarming.  I will not comment on this but it surely is of great concern

(courtesy Craig Roberts)

Paul Craig Roberts Warns “The French Election Is A Catastrophe For World Peace”

Authored by Paul Craig Roberts,

Marine Le Pen’s defeat, if the vote count was honest, indicates that the French are even more insouciant than Americans.

The week before the election the Russian high command announced that Washington had convinced the Russian military that Washington intended a preemptive nuclear first strike against Russia. No European leader saw danger in this annoucement except Le Pen.

No European leader, and no one in Washington, has stepped forward to reassure the Russians. In the US apparently only my readers even know of the Russian conclusion. Simply nothing is said in the Western media about the extraordinary risk of convincing Russia that the US is preparing a first strike against Russia.

Nothing in the 20th century Cold War comes close to this.

Le Pen, as Trump did prior to his castration by the military/security complex, understands that military conflict with Russia means death for humanity.

Why were the French voters unconcerned with what may be their impending deaths?

The answer is that the French have been brainwashed into believing that to stand for France, as Marine Le Pen does, is to place patriotism and nationalism above diversity and is fascist.

All of Europe, except for the majority of the British, has been brainwashed into the belief that it is Hitler-like or fascist to stand up for your country. For a French man or woman to escape the fascist designation, he or she must be Europeans, not French, German, Dutch, Italian, Greek, Spanish, Portuguese.

Brainwashed as the French are that it is fascist to stand up for France, the French voted for the international bankers and for the EU.

The French election was a disaster for Europeans, but it was a huge victory for the American neoconservatives who will now be able to push Russia to war without European opposition.

 

 

END

A must read: if Europe is fixed why are they issuing long dated bonds

Bill Blain/Mint Partners/zerohedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

CANADA

As many of you know, I am based here in Toronto Ontario Canada where lately we have been decimated on the economic front. Last night Moody;s slashes the rating on all the 6 major Canadian banks as they fear asset quality deterioration due to the huge rise in house prices and also the soaring household debt

(courtesy zero hedge)

Moodys Slashes Ratings On 6 Canadian Banks, Fears Asset-Quality Deterioration, Soaring Household Debt

Amid Poloz-described “unsustainable prices” in various cities, and just days after the collapse of Canadian mortgage lender Home Capital Group and our discussion of the dire state of Canadian savers (and their record household debt), Moodys has cut the ratings on six of Canada’s largest banks because of ongoing concerns that expanding levels of private-sector debt could weaken asset quality in the future.”

As a reminder, even Bank of Canada Governor Stephen Poloz noted that Toronto is out control tonight while answering questions following a speech in Mexico City…

pretty sure recent gains in Toronto home prices were not sustainable and that the city’s housing market had elements of speculation

 

“Financial stability is part of the Bank of Canada’s monetary policy decision making, but the central bank’s primary mission is inflation targeting,… it would be odd to use interest rates to target home prices in just one city.”

Perhaps Mr. Poloz,  but, as we showed previously,it doesn’t take a genius to figure out that this will end in tears.  Even the big Canadian banks are fretting. “Let’s drop the pretense. The Toronto housing market and the many cities surrounding it are in a housing bubble,” Bank of Montreal Chief Economist Doug Porter warned clients. But the bubble’s deflation would push the city into a fiscal and financial sinkhole.

So that’s the supposed ‘asset’ side, 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:

And of course the bank run at Home Capital Group…

 

It should hardly be a surprise that Moodys today downgraded the Baseline Credit Assessments (BCAs), the long-term ratings and the Counterparty Risk Assessments (CRAs) of six Canadian banks and their affiliates, reflecting Moody’s expectation of a more challenging operating environment for banks in Canada for the remainder of 2017 and beyond, that could lead to a deterioration in the banks’ asset quality, and increase their sensitivity to external shocks.

The banks affected are: Toronto-Dominion Bank, Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Canada, National Bank of Canada, and Royal Bank of Canada.

The BCAs, long-term debt and deposit ratings and CRAs of the banks and their affiliates were downgraded by 1 notch, excepting only Toronto-Dominion Bank’s CRA, which was affirmed. The short term Prime-1 ratings of the Canadian banks were affirmed. All relevant ratings for these banks continue to have negative outlooks, reflecting the expected introduction of an operational resolution regime in Canada.

“Today’s downgrade of the Canadian banks reflects our ongoing concerns that expanding levels of private-sector debt could weaken asset quality in the future. Continued growth in Canadian consumer debt and elevated housing prices leaves consumers, and Canadian banks, more vulnerable to downside risks facing the Canadian economy than in the past.” said David Beattie, a Moody’s Senior Vice President.

In the same action, Moody’s affirmed the BCAs, long-term ratings and CRAs of CIBC Mellon Trust (CIBC Mellon), the Fédération des caisses Desjardins du Québec (the Fédération) and Caisse centrale Desjardins.

In view of today’s actions, Moody’s does not expect any upward rating pressure on the affected banks in the near term. However, the Canadian banks’ ratings could be revised upwards if macro-economic conditions in Canada improve and the Canadian banks maintain sound financial metrics.

The affected banks’ ratings could be downgraded if their fundamentals weaken, as evidenced by an even more challenging operating environment and/or deterioration in their financial metrics.

*  *  *

Here is the full ratings rationale by bank…

Moody’s considers that weakening credit conditions in Canada — including an increase in private-sector debt to GDP to 185.0% as of the end of 2016, up from 179.3% for 2015 — present increasing risk to Canadian banks’ asset quality and profitability.

 

This increase has been led by household debt, which is now at a record high of 167.3% of disposable income (as at Q4 2016) and accompanying house price appreciation.

 

Despite macro-prudential measures put into place by Canadian policymakers in recent years — which have had some success in moderating the rate of housing price growth — house prices and consumer debt levels remain historically high. Business credit, the other component of private-sector debt, has also grown rapidly, at a 6.2% CAGR over the past 3 years.

 

We do note that the Canadian banks maintain strong buffers in terms of capital and liquidity. However, the resilience of household balance sheets, and consequently bank portfolios, to a serious economic downturn has not been tested at these levels of private sector indebtedness.

Toronto-Dominion Bank (TD, Aa2/Aa2 negative, a1); TD’s strong ratings are attributable to its very strong domestic retail franchise — which generates stable and recurring profitability and its business mix. This strength is due to leading market share positions in many personal & commercial financial services products, where TD typically has market shares in the high teens and holds first or second positions.

TD is the most retail oriented of its Canadian peers, with approximately 90% of earnings coming from retail (combined Canadian personal & commercial, wealth management and US personal & commercial, excluding corporate). While CM income has increased over recent quarters and capital allocated to the wholesale business is rising, we expect that reliance on this inherently volatile source of income will remain relatively modest.

Through acquisition and organic growth, TD has increased its exposure to unsecured Canadian consumer credit risk in recent years. In our view, however, the strength and stability of the earnings from TD’s Canadian personal and commercial banking franchise remain the primary credit strength supporting its ratings. The ratings of TD’s US affiliates benefit from support from the parent, and as such are also affected by this action.

Bank of Montreal (BMO A1/A1 negative, a3); BMO is one of the six major banks in Canada which benefit from the protection of significant barriers to entry and the stability of a prudent regulatory environment. Although its Canadian retail market shares are towards the lower end of the Canadian peer group, BMO has double digit market shares across all significant retail financial services and products, providing scale and recurring earnings power in its home market. In our view, however, the strength and stability of the earnings from BMO’s Canadian personal and commercial (P&C) banking franchise remain the primary credit strength supporting its ratings. BMO has a strong and improving US regional banking presence through BMO Harris, which adds important diversification away from reliance on Canadian P&C earnings. However, BMO does not enjoy the same franchise strength and pricing power in the more competitive US market that it does in Canada. The ratings of BMO Harris and affiliates benefit from support from the parent, and as such are also affected by this action.

Bank of Nova Scotia (BNS A1/A1 negative, a3); BNS is the most internationally active of the Canadian banks with approximately half of its earnings generated outside of Canada. BNS has taken significant measures to increase its profitability that signal a fundamental shift away from the bank’s traditionally low risk appetite. While the bank’s strategic actions are intended to enhance current profitability — in 2016, BNS reported domestic net interest margin lower than the six largest Canadian banks’ average- in our view, they increase the prospect of future incremental credit losses.

While BNS had strategically grown its credit card and auto finance portfolios – both of which are particularly prone to deterioration during an economic downturn and exhibit higher defaults and loss severities than mortgage portfolios — in recent years, growth in 2016 was flat. In addition, the bank has made a series of acquisitions away from its strong domestic franchise towards higher-growth but less stable international markets. BNS has aspirations to continue to grow its international earnings, which in Moody’s view adds to bondholder risk.

Canadian Imperial Bank of Commerce (CIBC A1/A1 negative, a3); CIBC is the most reliant of the Canadian banks on domestic P&C earnings, which generate approximately 65% of total earnings, excluding Corporate. In our view, however, the strength and stability of the earnings from CIBC’s Canadian personal and commercial banking franchise remain the primary credit strength supporting its ratings. CIBC has the second lowest proportionate exposure to unsecured and non-real estate secured consumer debt as a percentage of domestic consumer assets (roughly 11.5%), reflective of its very large book of insured mortgages.

CIBC is one of the six major banks in Canada that benefit from the protection of significant barriers to entry and the stability of a prudent regulatory environment. Although its Canadian retail market shares are mid-range relative to its Canadian peers, CIBC has solid double digit market shares across all significant retail financial services and products, providing scale and recurring earnings.

National Bank of Canada (NBC A1/A1 negative, baa1); NBC’s dominant position in commercial banking and strong second place share of market in retail banking in Québec are the primary credit strengths supporting its high ratings. The stability of the recurring earnings power of NBC’s regional retail franchise is, in Moody’s view, highly unlikely to be challenged. That being said, NBC’s asset base (CAD234 billion as of Q1 2017) and national deposit share (roughly 4%) are small relative to the other large Canadian banks whose branch systems are more national in scale. In our view, however, the strength and stability of the earnings from NBC’s Canadian personal and commercial banking franchise remain the primary credit strength supporting its ratings.

While each of the major Canadian banks enjoys the benefits of superior pricing power due to sustainable large market shares in many significant retail and commercial products and services, this is true for NBC only in the context of its regional market, the province of Québec. As such, the challenges in geographic diversification and earnings stability and the Québec credit concentrations offset partially the strength in local market share and sustainability. NBC is the Canadian bank most reliant upon inherently less stable capital markets earnings, which generated 38% of total earnings, excluding Corporate for 2016 (38% for 2015.)

Royal Bank of Canada (RBC A1/A1 negative, a3 ); RBC’s ratings reflect its profile as a strong and diversified universal bank with sustainable leading market shares across many retail products and services in its home market. The stable earnings from RBC’s domestic Personal and Commercial franchise are a key credit strength. RBC has had very low earnings volatility, supported by the stabilizing effect of the recurring profitability of RBC’s solid domestic retail banking franchise.

However, over the past four years RBC has demonstrated rapid growth in its Capital Markets business, led by growth in its US corporate loan book and the repo and securities finance business. We believe that RBC’s US-focused Capital Markets growth strategy increases its exposure to risks that could more rapidly erode its creditworthiness in volatile or adverse market conditions, and is therefore negative for the credit. To date, this risk has been well managed and its performance has been very stable. Maintaining this performance through more volatile markets will be key to RBC’s longer term risk management track record. We do not expect that this business will continue on this growth trajectory, and, in fact, that capital committed to the Capital Markets business will be more constrained.

Management plans to substantially grow the earnings of its recently acquired, California-based private and commercial bank, City National Bank, (deposits Aa3 stable, a2) both organically and through targeted acquisitions. Growth in the City National business presents less credit risk than continued growth in the Capital Markets area, in our view.

The ratings of two affiliates, RBC Capital Markets LLC and RBC (Barbados) Trading Bank Corporation were also affected by this action. In each case, both long and short term ratings were downgraded.

Fédération des caisses Desjardins du Québec (Aa2/Aa2 negative, a1 ); The Fédération is a cooperative entity responsible for governance and oversight activities for Desjardins Group (the Group). It acts as a control and supervisory body over the individual member caisses. The Fédération’s pivotal importance to the Group’s operations and performance, the application of regulatory supervision to the Group as a whole, as well as the strong strategic and financial cohesion among member caisses with a well-developed mutualist support framework, lead us to factor the strength of the Group into the Fédération’s BCA.

The Group has a secure retail banking franchise in rural Québec as well as strong capitalization and limited reliance on wholesale funding. Its regional banking concentration in Québec is offset in part by the Group’s national insurance and wealth management business.

The Fédération’s ratings were affirmed despite the Macro Profile change because Moody’s believes its operations to be largely isolated to the province of Quebec (which has experienced lower house price appreciation than other provinces) and because a large proportion of Desjardins’ net income is derived from non-banking sources, such as life and property and casualty insurance.

CIBC Mellon Trust (CIBC Mellon A1/A1 stable, a1); CIBC Mellon is a major player in the Canadian custody market, underpinning its franchise value. The operations and technology platform provided by BNY Mellon lends a further competitive advantage. BNY Mellon is the largest custodian, globally, and its operating platform allows CIBC Mellon to benefit from economies of scale and service not available to its primary domestic competitor.

CIBC Mellon’s risk management and control environment is strong, with an appropriate emphasis on operational risk issues and effective supervision by the joint venture’s owners. CMT does not make loans (other than short-term overdrafts to custody clients) but incurs credit risk through its securities portfolio. The investment portfolio is made up largely of short-duration Canadian government and provincial bonds as well as corporate debt.

CIBC Mellon’s ratings were affirmed despite the change in the Macro Profile because Moody’s believes its custody bank business model is directly unaffected by high consumer debt as it does not lend to consumers.

 

end

Has Canada reached its Minsky Moment?:

(courtesy George Stockus/BeatlesOnBanking.com)

 

Canada, Let’s Not Minsky Words

Authored by George Stockus via BeatlesOnBanking.com,

Stability breeds instability – this was economist Hyman Minsky‘s lasting contribution to the craft.  The Minsky Moment , popularized during the 07-09 US housing crisis, basically suggests breeding animal spirits too long creates systemic problems.

Essentially, the ongoing rises in asset prices back then created the sense of a new paradigm, that the elevated activity was safe, and home prices couldn’t fall – they’d never done so.  As the cycle progressed and prices rose, normal course mortgage lending turned to borrowing for speculation and then, ultimately, for ponzi-like leveraged derivative structures that proved unable to withstand volatility.  Turns out, Federal Reserve policy and over-sight engendered it all, and even Bernanke whistled into the then soon-to-be graveyard top of the market.

There’s no reason Minsky thinking couldn’t apply today.  Central banks have forced years of emergency level interest rates and QE upon the markets with the very intent of manipulating asset prices higher and preached this in the name of stability.  Normal course lending has lead to borrowing for speculation, seen in real estate and margin stock trading accounts everywhere.

As for Canadian real estate, the truth is Minsky instability could’ve been argued, say a year ago for example, and yet despite no real change in fundamental backdrop Toronto real estate prices have still risen by an additional 1/3 since.  The Canadian economy now relies on real estate for stability and growth and is in no position to cool the frenzy with higher interest rates.  Pretty safe to say that policy goals of stability are leading to instability.  So this is Minsky redux,  with a twist.  Central banks have created unstable market monsters that they neither can afford to feed nor fight.

Pretty scary.

Another truth is that it’s happened everywhere.  Increasingly, increasing the world’s cost of living to fight a world of too much debt places today’s central bankers in the history books as those who would double down on fighting Minsky’s warnings.

It’s hard to universally claim Canada is driven by ponzi-like lending, but it’s easy to point out that record consumer debt levels include a record stretch in borrowing to chase these rising home prices.  So Home Capital’s breakdown should be viewed as a warning sign.  In fact, Canada’s big 5 banks came out to support the Equitable Group – maybe this should be viewed as the industry trying to contain cracks in their system?

The stock price action in the big 5 banks seems to convey growing concern too, breaking down on higher volumes.  Is it just the HCG and mortgage market noise or are big picture markets sensing other issues in Canada too?

Other issues?

Oil.  Loonie.  NAFTA and Trump.  Metals markets.  Softwood lumber.  Seems Trump’s reflation trade could also be fading.  Between new questions over US trade policy and re-emerging China credit concerns buzzing again, the list of things that could unnerve Canadian markets over and above the real estate and consumer debt picture are popping up too.

Maybe the most troubling signs regarding our real estate markets come from the powers that be.  After years of being so sanguine, only now is CMHC issuing concerns over select regional markets.  Finance Minister Morneau suggests there is no link between risk in housing markets in Toronto/Vancouver and HCG.  We’ve had ultra-low rates for several years and Bank of Canada head Poloz actually claimed low interest rates have nothing to do with fuelling speculation!   Is this the height of detachment?  Arrogant deflection?  Has he not studied Minsky? After this last decade, this statement may go down as the most fantastical  I can remember.

Minsky laid out a salient concept and it was only several years ago that the world was brought to its economic knees experiencing it.  I know those in the position of policy influence are mandated to speak with tone and instil confidence.  Unfortunately recent history shows us that these powers that be, who steered us into the rocks, also end up being the ones who try to manage us out.  That makes me nervous.  That, and of course, the whistling.

A few select Ben Bernanke quotes from back in the day.

“House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals.” Oct 05

 

“Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise.” Feb 06

 

“At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”  Mar 07

 

“All that said, given the fundamental factors in place that should support the demand for housing, we believe the effect of the troubles in the subprime sector on the broader housing market will likely be limited, and we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.  The vast majority of mortgages, including even subprime mortgages, continue to perform well.  Past gains in house prices have left most homeowners with significant amounts of home equity, and growth in jobs and incomes should help keep the financial obligations of most households manageable.”  May 07

 

“It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.” Oct 07

 

“The Federal Reserve is not currently forecasting a recession.”  Jan 08

 

“The financial crisis appears to be mostly behind us, and the economy seems to have stabilized and is expanding again.” Aug 10

 

“One myth that’s out there is that what we’re doing is printing money. We’re not printing money.” Dec 10

 

“I wish I’d been omniscient and seen the crisis coming.” Dec 10

Pretty sure Minsky didn’t suggest omniscience was required to avoid repeating our mistakes.

end

7. OIL ISSUES

OPEC did not provide good news to the oil sector as the forecast a huge surge in Shale oilproduction as well as a bigger Saudi output.  So much for production cuts.

(courtesy zero hedge/OPEC)

OPEC Capitulates, Forecasts Surge In Shale Oil Production As Saudi Output Rises

The biggest highlight in today’s latest monthly OPEC oil market report for the month of May was OPEC finally capitulating to the “shale threat” and raising estimates for for non-OPEC supply growth in 2017 to 950Kbpd from the year prior, 64% or 370k higher than in the April estimate, amid a surge in U.S. output. In context, the outlook for non-OPEC growth is now 4 times higher than when OPEC announced cuts in November.

As shown in the table below, OPEC raised its 2017 U.S. supply growth outlook by 282kbpd in the past month, to 820k bpd.

The OPEC report also noted that OECD Inventories remains 276MM bbl above the five-year average. It also showed OPEC crude output declining by 2k bpd in April to 31.732m b/d according to secondary sources as 7 out of 13 members reduced output, however offset by a rebound in Saudi production to 9.954mmbpd, the highest since January. The biggest m/m changes:

  • Angola +97k b/d;
  • UAE, Libya -62k each
  • Saudi +49.2k b/d m/m to 9.954m b/d: OPEC secondary sources
  • Saudi +46.4k b/d to 9.946m b/d: Saudi direct comms to OPEC

The monthly report also kept its 2017 global oil demand growth forecast unchanged from previous month’s est. at 1.27m b/d y/y, suggesting that yesterday’s warning by Vitol about a decling in global demand continues to fall on deaf ears.

Finally, in its “feature article“, OPEC makes it clear that an extension of the supply cuts will be needed not only for H2 but into 2018:

A large part of the excess supply overhang contained in floating storage has been reduced and the improvement in the world economy should help support oil demand. However, continued rebalancing in the oil market by year-end will require the collective efforts of all oil producers to increase market stability, not only for the benefit of the individual countries, but also for the general prosperity of the world economy

… thus confirming that that the first 6 month supply cut has been a failure. Don’t worry though, the second one will surely work even as shale continues to pick up OPEC market share.

Source: OPEC

end

8. EMERGING MARKETS

Venezuelan protesters have found novel ways to protest using “poop bombs”

(courtesy zerohedge)

 

 

Venezuelan Protesters Unleash ‘Poop Bombs’ As Currency Collapses 99.5%

President Nicolas Maduro has overseen an unprecedented depreciation in his country’s currency since taking office, with the bolivar now down 99.5 percent to 5,100 per dollar in the black market that everyday Venezuelans use.

As Bloomberg reports, the sharp decline has wiped out savings and made buying imported goods all but impossible, helping fuel the anger directed at the government in street protests that have turned deadly in recent weeks.

While Maduro has raised the minimum wage almost 20 times during his tenure, it’s still the equivalent of just $40 a month.

So, with the Bolivar having lost 99.5% of its value in the last few years, a shortage of resources and the ferocity displayed by security forces tasked with breaking up increasingly desperate demonstrations have forced protesters to come up with creative new forms of self-defense

As El Pais reports, the devices have been dubbed “Puputov cocktails” on social media, and they are becoming the trending weapon at anti-government protests in Venezuela. That is pronounced  “poo-poo-tov,” and as the name indicates, they are nothing more and nothing less than bombs made with feces.

Opposition supporters use a giant sling shot ‘Crapapult’ to throw ‘Poopootovs’, a bottle filled with feces, during a rally against President Nicolas Maduro in Caracas.

This low-tech weapon is now being used by protesters facing riot officers from the National Guard and the Bolivarian National Police on the streets of a country in the grip of social, political and economic upheaval. The next protest is scheduled for Wednesday, and posters are calling it “La Marcha de la Mierda,” literally the Shit March.

The first recorded use of excrement bombs was last weekend at a skirmish in Los Teques, the capital of Miranda state, just a few kilometers out of Caracas. According to an account that soon went viral, around a dozen National Guard officers were pelted with excrement. Before moving out again, several members of this militarized police force were allegedly so disgusted that they vomited.

Whether accurate or not, the story served to fuel interest in Puputov cocktails, with many online users exchanging “recipes” for preparing them. Although it takes little more than water, human waste and a glass container, messages containing precise, step-by-step instructions are available on WhatsApp.

“These kids live in a dictatorship, they have no other option but to protest however they see fit,” said Maria Montilla, 49, behind lines of youths with masks, slingshots and makeshift wooden shields.

 

“There’s nothing explosive here. It’s our way of saying, ‘Get lost Maduro, you’re useless!'” said one young protester, who asked not to be named, between tossing bottles of feces.

As Reuters reports, the protests so far have failed to garner massive support from poorer, traditionally pro-Chavez sectors of Venezuela’s 30 million people. But a bigger cross-section of society has been apparent at recent marches, some of which drew hundreds of thousands.

Looting has been breaking out in some cities, especially at night.

Chavez’s former spy-master, Miguel Torres, has broken with Maduro’s government, despite having served as interior minister and fighting against protests in 2014. He warned on Wednesday that the violence in Venezuela may be getting out of control.

“What is happening may be the starting point for a huge armed confrontation between Venezuelans,” he told Reuters. “Nobody wants that.”

end

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

Euro/USA   1.0866 DOWN .0002/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA RAISING INTEREST RATES/EUROPE BOURSES IN THE GREEN (EXCEPT SPAIN)

USA/JAPAN YEN 114.00 DOWN 0.346(Abe’s new negative interest rate (NIRP), a total DISASTER/SIGNALS U TURN WITH INCREASED NEGATIVITY IN NIRP/JAPAN OUT OF WEAPONS TO FIGHT ECONOMIC DISASTER/KURODA:  HELICOPTER MONEY  ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST

GBP/USA 1.2862 DOWN .0066 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.3715 UP .0005 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS THURSDAY morning in Europe, the Euro FELL by 2 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.0866; 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 8.71 POINTS OR .29%     / Hang Sang  CLOSED  UP 101.13 POINTS OR 0.44% /AUSTRALIA  CLOSED UP .09% / 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 THURSDAY morning CLOSED UP 61.40 POINTS OR 0.31%

Trading from Europe and Asia:
1. Europe stocks  OPENED IN THE GREEN EXCEPT SPAIN

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 61.40 POINTS OR 0.29%  / SHANGHAI CLOSED UP 8.71 POINTS OR .29% /Australia BOURSE CLOSED UP .02% /Nikkei (Japan)CLOSED  UP 61.46 POINTS OR 0.31%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: $1222.75

silver:$16.36

Early THURSDAY morning USA 10 year bond yield: 2.398% !!! PAR IN POINTS from WEDNESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  3.034, UP 1  IN BASIS POINTS  from WEDNESDAY night.

USA dollar index early THURSDAY morning: 99.65 DOWN 2  CENT(S) from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

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And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 3.391%  down 0  in basis point(s) yield from WEDNESDAY 

JAPANESE BOND YIELD: +.042%  par   in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.647%  UP 4  IN basis point yield from WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.2941 UP 4  POINTS  in basis point yield from WEDNESDAY 

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

GERMAN 10 YR BOND YIELD: +.4320% up 2 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.0866 DOWN .0008 (Euro DOWN 8 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 113.91 DOWN  .425 (Yen DOWN 43 basis points/ 

Great Britain/USA 1.2871 DOWN 0.0058( POUND DOWN 58 basis points)

USA/Canada 1.3699 DOWN 0.0013(Canadian dollar UP  13 basis points AS OIL ROSE TO $47.95

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This afternoon, the Euro was DOWN by 8 basis points to trade at 1.0866

The Yen ROSE to 113.91 for a GAIN of 43 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL BY 58  basis points, trading at 1.2871/

The Canadian dollar ROSE by 13 basis points to 1.3699,  WITH WTI OIL RISING TO :  $47.94

The USA/Yuan closed at 6.9037/
the 10 yr Japanese bond yield closed at +.042% UP 0  IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP  2  IN basis points from WEDNESDAY at 2.405% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 3.047  UP 3  in basis points on the day /

Your closing USA dollar index, 99,63 DOWN 4  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED UP 1.30 POINTS OR .02%
German Dax :CLOSED DOWN 46.40 POINTS OR .36% 
Paris Cac  CLOSED DOWN 17.04 POINTS OR 0.32% 
Spain IBEX CLOSED  DOWN 173.40 POINTS OR 1.57%

Italian MIB: CLOSED  DOWN 70.29 POINTS/OR 0.33%

The Dow closed DOWN 23.69 OR 0.11%

NASDAQ WAS closed DOWN 13.18 POINTS OR 0.22%  4.00 PM EST
WTI Oil price;  47.95 at 1:00 pm; 

Brent Oil: 50.73 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.03 UP 43/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD REMAINS AT  +0.432%  FOR THE 10 YR BOND  4.PM EST EST

END

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

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

WTI CRUDE OIL PRICE 5:00 PM:$47.82

BRENT: $50.73

USA 10 YR BOND YIELD: 2.393%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 3.030%

EURO/USA DOLLAR CROSS:  1.0859 DOWN .0008

USA/JAPANESE YEN:113.87  DOWN 0.467

USA DOLLAR INDEX: 99.65  DOWN  2  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2887 : DOWN .0042  OR 42 BASIS POINTS.

Canadian dollar: 1.3697  DOWN .0013(CAN DOLLAR UP 13 BASIS PTS)

German 10 yr bond yield at 5 pm: +.432%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Bonds Bid, Stocks Skid But VIX Breaks Another Record

 

Anyone else feel like this?

 

Stocks dipped hard out of the gate – filling the gap to the first round of the French Election…

But the dip-buyers were instantly in… though unable to save markets into the green…Small Caps worst

 

VIX tagged 11.00 briefly…

 

But closed below it for a record 14th day in a row…

 

VIX remains notably decoupled from policy uncertainty…

 

Financials were the day’s worst performer…

 

The Big Banks were hit hard in the sell-off…

 

And of course, why should VIX be higher? After all Macy’s just had its worst day since Lehman…

 

And then there’s SNAP…

 

Despite a dismal 30Y auction (following yesterday’s ugly 10Y auction), bonds held on to gains today…30Y remains above 3.00%

 

The Dollar Index fell for the second day, but we note EUR is weakest on the week against the USD…

 

Cable tumbled on Carney’s comments…

 

 

Oh and in case you wondered what drove the buying panic? Simple – fun-durr-mentals…

 

Finally, fear has been banished…

end

It is a well known fact that the state of Connecticut is in trouble financially. Now the state capital, Hartford is preparing for bankruptcy protection under Schedule 9 as Hedge fund revenue dissipate.

(courtesy zerohedge)

 

 

Connecticut State Capital Prepares For Bankruptcy Amid Collapse In Hedge Fund Revenue

The state of Connecticut has been hit hard by the double whammy of a deteriorating local economy, coupled with a plunge in hedge fund profits – as well as hedge fund managers permanently relocating to Florida – leading to a collapse in tax revenues. According to the the latest Connecticut budget released last week, the state is reeling from the consequences of sliding tax revenue from the super-rich, i.e. the state’s hedge fund managers. The latest figures showed that tax revenue from the state’s top 100 highest-paying taxpayers declined 45% from 2015 to 2016. The drop adds up to a $200 million revenue loss for Connecticut.

In a dramatic, if of questionable credibility, soundbite Department of Revenue Services Commissioner Kevin Sullivan says these wealthy people are “dramatically less wealthy than they were before.” He was referring to annual income, not actual asset holdings, because judging by the all time high in the S&P, the local financial elite have never had a higher net worth.

“When you look at the top 75, top 50 … this is a group of wealthy people who are dramatically less wealthy than they were before,” said Kevin Sullivan, commissioner of the Connecticut Department of Revenue Services. “These folks, for a number of reasons, are either not realizing as much income or don’t have as much income.”
Just don’t expect tears from the general public. Sullivan also noted how several international hedge funds have recently failed, resulting in “significant retrenchment” from investors. That drop in tolerance for risk brings smaller margins and ultimately less personal income for the state to tax, he added. It’s fascinating how the Fed’s central planning, superficially meant to restore “confidence” in a rigged, manipulated market is having such proound and adverse 2nd and 3rd order effects on state budgets.

Sullivan also acknowledged part of revenue decline can also be attributed to “a handful” of wealthy individuals who moved to more tax-friendly states — an issue frequently raised by legislative Republicans, who argue Connecticut’s tax policies encourage the state’s super-rich to move out.

Of course, for tax purposes it’s the actual income that matters, and as a result the steep decline has exacerbated Connecticut’s budget woes. The projected deficit for the new fiscal year beginning July 1 has now jumped from about $1.7 billion to $2.3 billion, while the deficit predicted for the second year of the state’s two-year budget is now about $2.7 billion.

According to AP, lawmakers and the governor have already discussed the possibility of making deep cuts throughout state government, including to state colleges and universities and social services. Meanwhile, there’s a threat of about 4,000 layoffs if a $700 million labor concession deal isn’t reached with state employees. Lawmakers say these latest revenue figures make that agreement even more crucial.

* * *

Meanwhile, in a stark confirmation just how dire the state’s economic and fiscal situation has rapidly become, the Hartford Courant reports that city leaders in the state’s capital have taken a step toward bankruptcy, soliciting proposals from law firms that specialize in Chapter 9. It adds that the city is reviewing several firms and could hire an attorney as early as this week, sources with knowledge of the plans said.

Facing a $65 million deficit next year and a $14 million shortfall this year, Mayor Luke Bronin has hinted for months that Hartford could file for bankruptcy, and said during his budget release in April that he was “not in a position to rule anything out.” Bronin proposed cuts and concessions from the unions, but is still seeking $40 million in additional state aid to close next year’s budget gap. The city resorted to short-term borrowing to cover costs such as payroll payments this year.

The mayor confirmed Tuesday that the city was looking at firms. “We have not engaged bankruptcy counsel, but we have had initial conversations with firms that have experience in Chapter 9 and municipal restructuring,” Bronin said. “Given the uncertainty of the state budget process and the depth of the state budget crisis, it shouldn’t surprise anyone that we might engage counsel in the near future.”

Some, such as Council President Thomas Clarke II, who was briefed by Bronin on the prospect of hiring a bankruptcy lawyer, called the move premature. “I was told it was possible that a decision would be made before the end of this week,” Clarke said Tuesday. “It’s premature. We haven’t exhausted every option and every avenue for us to go down this road.”

Maybe not yet, but time is fast running out. Meanwhile, reminding the state that “we’re all in it together”, Bronin stressed that the state must be a partner in pulling Hartford “from the brink of financial ruin”, noting that more than half of the city’s properties are tax-exempt and that Hartford has limited options for revenue.

“We’ve made clear for more than a year that Hartford’s fiscal challenge cannot be responsibly solved at the local level alone with the tools that we have,” Bronin said, “and we continue to push hard to build a new partnership with the state of Connecticut to put our capital city on a path to solvency, stability and growth.”

However, as noted above, the itself has its own problems, with a more than $2 billion budget gap estimated for next year. It is unclear whether there is support in the General Assembly for bailing out Hartford.

* * *

Clarke said that if the city proceeds with legal representation, the council will look to hire its own lawyer. A key question members want answered is whether the mayor must get the council’s approval to file for bankruptcy, the Courant notes. The state statute covering municipal bankruptcy says that a city or town must receive consent from the governor, and that the governor “shall submit a report to the treasurer and the joint standing committee of the general assembly.” It doesn’t specify whether a mayor needs the council’s approval.

In other words, if Bronin intends to go through with it, Hartfort may be in bankruptcy within weeks, if not days.

Hartford wouldn’t be the first city in Connecticut to seek Chapter 9 protection. Bridgeport filed for bankruptcy in 1991, but a federal judge dismissed the petition, saying the city was capable of paying its bills. Other cities that have filed include Detroit, Stockton and San Bernardino, Calif., and nearby Central Falls, R.I.

 

 

end

More trouble in Obamacare as Aetna abandons its last two states. Now all 3 major healthinsurers are out of Obamacare altogether: Aetna, Human, and United Health

(courtesy MishShedlock/Mishtalk)

 

Aetna Abandons Obamacare Totally: See You In September?

Authored by Mike Shedlock via MishTalk.com,

Bye bye, so long farewell, Aetna fully exits Obamacare exchanges with pull-out in two states

Health insurer Aetna Inc said on Wednesday it will exit the 2018 Obamacare individual insurance market in Delaware and Nebraska – the two remaining states where it offered the plans.

 

Aetna had already said it would exit the individual commercial market in Virginia and Iowa, after pulling out of several other states last year.

 

Aetna has now “completely exited the exchanges,” the company said in an emailed statement.

 

Insurers Humana Inc and UnitedHealth Group Inc have also pulled out of most of the government-subsidized individual health insurance market.

 

Republicans in the U.S. House of Representatives last week voted to undo the Affordable Care Act, often called Obamacare, the signature domestic achievement of former President Barack Obama.

 

But even if the Republicans’ bill – known as the American Health Care Act – is passed by the Senate it would not solve a critical outstanding issue for insurers looking at 2018: Will the government continue to fund the cost-sharing subsidies that help individuals pay for care?

 

Health insurers have said they cannot plan amid the uncertainty. In addition, the balance of sick and healthy customers has been worse than expected, and premium rates on the individual insurance market went up 25 percent this year.

Republican Madness

I fail to understand House speaker Paul Ryan and president Trump attempting to fix Obamacare before it blows up.

The proper strategy would have been to wait for Obamacare to implode on its own merits.

A complete implosion cannot take more than another year or so, and at that time Democrats would have been begging the Trump administration to “do something”.

See You In September?

I am quite certain we will not see Aetna in September but by September we may have Senate revisions to the House Obamacare replacement.

Trumpcare

On a more serious note, on May 4 I wrote Republican Sponsored “Trumpcare” Passes House: Hooray?

Let’s assume that months from now (and that’s about how long it will take) some sort of compromise bill passes the Senate. Let’s also assume the House votes to go along.

 

Then there will be winners and losers, but far more losers than winners. The losers will be upset. Even those unaffected may be upset if they blame the bill for increasing their costs.

 

For What?

 

This folly could cost the Republicans their majority in the 2018 midterm election.

 

For what? The bill nibbles around the edges and provides no incentives to lower costs.

 

This is a disaster on-deck with virtually no chance of an upside. Republicans now own healthcare (Trumpcare) whether a compromise bill passes or not.

 

Hooray?

 

 

end

A retail bloodbath this morning as Macy crashes after awful results.  This is dragging all department store stocks down this morning

Again, brick and mortar operations are getting killed!

(courtesy zero hedge)

Retail Bloodbath: Macy’s Crashes After Woeful Results, Drags All Department Stores Lower

Retailer woes continued this morning when Macy’s reported another round of pitiful quarterly earnings, which saw comp store sales at owned plus licensed stores tumble -4.6%, below the already depressed estimate of -3.5%. On an “owned” basis, the miss was even worse, with Q1 comps sliding -5.2%,, almost twice as bad as the consensus estimate of -3.0%.

Earnings were just as bad with the company reported Q1 adjusted EPS 24c on sales of $5.34 billion, missing estimates of $5.45 billion, barely making the lowest estimate; the profit margin also disappointed with gross profit printing at 38.1%, below the 38.84% estimate. Meanwhile, with Q1 inventory of $5.63 billion rising from $5.4 billion at year end, more margin eroding liquidation sales are likely on deck.

The only good news was that Macy’s maintained its fiscal 2017 sales and earnings guidance, which however was not nearly enough for the market, which has dragged Macy’s stock lower by 12%, to the lowest since October 2011.

Macy’s (and Kohl’s which also reported and missed) numbers were so bad, they have dragged down the entire department store sector, with stocks sliding in the premarket as follows: Nordstrom -3%, J. C. Penney -4.6%. Earlier Dillard’s also reported 1Q net sales shortfall, with comps. down 4% y/y

Macy’s is just the first of many retailers set to report what are likely to be very disappointing results. According to FactSet just over a third of the companies that have yet to report actual results for the first quarter are retailers. This is how the retail sub-industry earnings are poised to look as they come out: needless to say General merchandise and food retail stores, as well as Department Stores are poised for a bloodbath.

Some more details from FactSet:

  • Of the 13 retail sub-industries in the S&P 500, just four have reported or are expected to report earnings growth for the first quarter, led by the Internet & Direct Marketing Retail and Home Improvement Retail sub-industries.
  • The Internet Direct Marketing Retail sub-industry is expected to report the highest earnings growth of all 13 retail sub-industries at 22.4%. However, only two of the five companies in this sub-industry have reported or are expected to report earnings growth for the first quarter: Amazon.com ($1.48 vs. $1.07) and Netflix ($0.40 vs. $0.06).
  • The Home Improvement Retail sub-industry is projected to report the second highest earnings growth at 9.6%. Both companies in this sub-industry are expected to report earnings growth for the quarter, led by Lowe’s Companies. The mean EPS estimate for Lowe’s Companies is $1.05, compared to year-ago EPS of $0.87. Lowe’s Companies is scheduled to release results on May 24.
  • At the company level, 18 of the 37 S&P 500 companies in these 13 retail sub-industries are expected to report or have already reported EPS growth for the first quarter, led by Netflix (+567%), Amazon.com (+38%), Ulta Beauty (+24%), and Lowe’s Companies (+21%).

end

 

this is not good:  USA producer prices have now spiked to its higheslt level in 5 years as the PPI rose 2.5% year over year.  This is a forerunner of inflation.  It surely looks like we will be heading for stagflation as the economy refuses to grow despite advancing inflation

(courtesy zero hedge)

Stagflation Builds As US Producer Prices Spike Most In 5 Years

For the 3rd month in a row, US Producer Prices have risen at a faster rate than The Fed’s mandate. April headline PPI rose 2.5% YoY – the most since Feb 2012, and well above the highest analyst estimate, despite disinflationary credit impulse pressures from China being seen in industrial metals. The biggest driver is surging costs for investment advice!

Core PPI (ex food and energy) rose 1.9% YoY – also above highest estimates – to the highest since Dec 2014.

The full breakdown shows that over a quarter of the April advance in the index for final demand services is attributable to prices for securities brokerage, dealing, investment advice, and related services, which increased 6.6 percent. The indexes for guestroom rental; loan services (partial); machinery, equipment, parts, and supplies wholesaling; portfolio management; and airline passenger services also moved higher.

In April, the index for cigarettes moved up 2.2 percent. Prices for gasoline, fresh and dry vegetables, fresh fruits and melons, residential natural gas, and pharmaceutical preparations also advanced. Conversely, the index for jet fuel fell 6.1 percent. Prices for carbon steel scrap and oilseeds also declined

In contrast, margins for fuels and lubricants retailing dropped 14.6 percent. The indexes for food and alcohol retailing and for deposit services (partial) also fell.

 

So Q1 saw The Fed hike as GDP growth plummeted (weakest quarterly growth for a rate hike since 1980) and inflation surged… this won’t end well.

 

end

 

Interesting:  the Deputy AG who wrote the passage to Trump recommending the firing of James Comey is threatening to resign over that termination. Obviously we was put up to write the report to Trump

(courtesy zero hedge)

More Drama: Deputy AG Threatens To Resign Over Comey Termination: Report

Two days after Trump’s termination of James Comey, more details about the circumstances of Comey’s departure continue to emerge and the most dramatic highlight from this morning’s news wrap comes from the WaPo, which reports that Deputy Attorney General Rod Rosenstein – the man who was instrumental in arranging Comey’s termination – may not stay at the DOJ much longer.

Recall that on Tuesday afternoon the White House released a memo written by the Deputy AG, which contained Rosenstein’s recommendation to sack Comey citing the FBI director’s handling of the FBI’s investigation into Hillary Clinton’s private server as a reason for Comey’s dismissal. However, critics say the 52-year-old Harvard graduate, with a reputation as straight-shooting and non-partisan, has been sucked into providing cover for Trump to push Comey out.

The details from WaPo are as follows:

Trump told Vice President Pence and several senior aides — Reince Priebus, Stephen K. Bannon and Donald McGahn, among others — that he was ready to move on Comey. First, though, he wanted to talk with Attorney General Jeff Sessions, his trusted confidant, and Deputy Attorney General Rod J. Rosenstein, to whom Comey reported directly. Trump summoned the two of them to the White House for a meeting, according to a person close to the White House.

 

The president already had decided to fire Comey, according to this person. But in the meeting, several White House officials said Trump gave Sessions and Rosenstein a directive: to explain in writing the case against Comey. The pair quickly fulfilled the boss’s orders, and the next day Trump fired Comey.

Recall that Rosenstein was overseeing the FBI’s probe into election interference because his own boss, Attorney General Jeff Sessions, has recused himself from it after a row over contacts with the Russian ambassador to the US.

And now, as a result of the “alleged scapegoating”, Rosenstein has “threatened to resign after the narrative emerging from the White House on Tuesday evening cast him as a prime mover of the decision to fire Comey and that the president acted only on his recommendation.” With the WaPo once again quoting an unnamed person “close to the White House, who spoke on the condition of anonymity because of the sensitivity of the matter” one should as usual take this with a grain of salt.

So did President Trump ask Mr Rosenstein specifically to investigate Mr Comey’s conduct? When White House press secretary Sean Spicer was asked, he initially said “it was all him” – of Rosenstein – but then corrected himself. “I guess I shouldn’t say that…. no-one from the White House. That was a DOJ [Department of Justice] decision,” he said.

The deputy attorney general must now decide what to do about growing demands from Democrats – and an unusually direct approach from the New York Times editorial board – to appoint an independent special prosecutor to investigate the Russia allegations.

* * *

Separately, Reuters reports that the anger behind Donald Trump’s firing of FBI Director James Comey on Tuesday had been building for months, but a turning point came when Comey refused to preview for top Trump aides his planned testimony to a Senate panel, White House officials said.

Trump, Attorney General Jeff Sessions and deputy Attorney General Rod Rosenstein had wanted a heads-up from Comey about what he would say at a May 3 hearing about his handling of an

 

investigation into former Democratic presidential candidate Hillary Clinton’s use of a private email server.

 

When Comey refused, Trump and his aides considered that an act of insubordination and it was one of the catalysts to Trump’s decision this week to fire the FBI director, the officials said.

“It gave the impression that he was no longer capable of carrying out his duties,” one official said. Previews of congressional testimony to superiors are generally considered courteous.

So far Trump has shrugged off the political firestorm he created with Comey’s dismissal as he met with former U.S. Secretary of State Henry Kissinger in the Oval Office on Wednesday. Asked by reporters why he fired Comey, Trump said, “He wasn’t doing a good job, very simply. He wasn’t doing a good job.”

However, judging by the media’s reaction which realized it has struck a goldmine in terms of secondary narratives, and Trump’s growing frustration by the Democrats’ reaction, this story is only just getting started. For a direct indicator of Trump’s general level of anxiety, just keep an eye on his Twitter feed.

Perhaps seeking to douse the firestorm that erupted with Comey’s termination, and to ease tensions with FBI employees, all of whom are now potential sources of embarrassing information leaked to the WaPo and NYT, Reuters also reports that Trump is expected to visit FBI headquarters in the next few days, a White House spokeswoman said on Thursday. White House spokeswoman Sarah Huckabee Sanders, in an interview on CBS News, said Trump would “very likely” make the trip to talk to agents.  The New York Times, citing an unnamed official, earlier reported Trump was considering visiting the FBI’s Washington headquarters on Friday but was not expected to discuss the investigation over possible collusion between Trump’s presidential campaign and Russia in the 2016 U.S. election.

 

end

I like Graham Summer’s short and sweet commentaries. Today he discusses a huge industry wide problem: the auto loan sector and he feels (and so do I) that it will trigger the bursting of other debt bubbles highlighted below

(courtesy Graham Summers/Phoenix Research Capital)

Subprime 2.0: Is It in Fact an Industry-Wide Problem?

As we’ve been outlining over the last few weeks, the auto-loan industry is increasingly looking like Subprime 2.0: the needle that will pop the credit bubble.

Since 2009, roughly 1/3 of all new auto-loans have been subprime. That in of itself is bad, but we are now discovering that the industry in general has a problem with fraud (shades of the Housing Bubble) as well. Remember, the real Housing Crisis was when contagion spread from subprime mortgages into the prime space. It looks as though there might be a similar situation in autolending today.

As many as 1 percent of U.S. car loan applications include some type of material misrepresentation, executives at data analytics firm Point Predictive estimated based on reports from banks, finance companies and others. Lenders’ losses from deception may double this year to $6 billion from 2015, the firm forecast.

Source: Bloomberg

Obviously, the auto-loan bubble is nowhere near as large as the housing bubble ($1.2 trillion vs. $14 trillion).

But I’m not saying auto-loans will be the crisis… I’m saying auto-loans will be the needle that triggers the crisis.

Since 2009, the Fed has created a massive bubble in debt securities.

This includes:

1)   Municipal Bonds

2)   Corporate Bonds

3)   Mortgages

4)   Consumer credit debt

5)   Auto-loans

Here it is in all its glory.

Just as housing was a small percentage of the debt build up to the 2008 crisis, auto-loans are a small percentage of the post-2008 debt buildup.

But both asset classes had fraud and subprime lending as an underpinning.

This is Subprime 2.0: the needle that will burst the debt bubble.

We offer a FREE investment report outlining when the bubble will burst as well as what investments will pay out massive returns to investors when this happens. It’s called The Biggest Bubble of All Time (and three investment strategies to profit from it).

We made 1,000 copies to the general public.

As I write we’re down to the last 45.

To pick up your FREE copy…

CLICK HERE!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

end

 

Bets placed by huge increasing volumes of Eurodollar futures seems to suggest that a rate hike will not happen in June due to the deteriorating conditions inside the USA

 

(courtesy zero hedge)_

 

Betting Against A June Rate Hike? Something’s Going On

We noted yesterday that the recent trend of increased volumes into Eurodollar future out-months was ‘odd’

But the sudden surge in interest in Eurodollar calls (vs puts) suggests more than just a few prop bets are being placed on the fact that The Fed does not hike rates in June.

As Bloomberg notes, preliminary futures open interest data for Wednesday shows steep increases in several Jun17 eurodollar call strikes, consistent with view that Fed won’t hike in June amid tightening FRA/OIS spread. However, these options bets have largely gone unnoticed as futures-market-implied odds (which the majority of investors are shown) of a June hike have been steady at around 80% for a week.

A second consecutive drop in 3-month dollar Libor setting Wednesday prompted a flurry of dovish Fed bets and waves of buying across Jun17 eurodollar futures.

And furthermore, the Fed Fund Futures curve has flattened dramatically – signalling lost faith in The Fed’s hiking trajectory…

And while these bets are being placed – against a June rate hike, the LIBOR-OIS spread – traditionally a signal of bank credit risk, has collapsed back to historic norms.

 

One probable explanation for this is the gusher of bank funding availability that the world’s central banks (and even more so China) has unleashed. Nowhere is that more evident than in the total decoupling between “easing” financial conditions, and “tightening” monetary policy…

Despite two rate hikes, Goldman’s financial conditions index has improived to its ‘easiest’ in 8 months – thanks to the world’s policy-makers fungible money spigot to keep the dream of reflation alive (as evidenced in the chart above by the S&P 500).

This means, according to Bloomberg’s Mark Cudmore, that The Fed’s room to tighten is being underappreciated.

The market adjustment, when it comes, will be felt more in the front end than the long end of the U.S. rates curve.

 

Rates markets are only pricing one-and-a-half more hikes in 2017. That seems reasonable in the blinkered context that inflation shows little sign of accelerating out of control. However, monetary policy analysis needs to be updated.

 

Amid an excess of global liquidity, inflation is being dominated by macro factors. Commodity prices and technological innovations, rather than marginal short-term interest rate adjustments, are top-most in people’s minds.

 

The last two Fed rate hikes had no sustained tightening impact. In fact, financial conditions in the U.S. are the loosest they have been in almost three years, and approaching the extreme of the historical range going back 27 years.

 

 

This suggests that the Fed has plenty of room to tighten policy. Why wouldn’t they take steps to normalize while they can get away with it?

 

Ignoring the fact that this yet again argues for a rethink of inflation targeting and using short-term interest rates as the primary policy tool, it’s important investors don’t misinterpret the rationale and implications of any tightening.

 

The next Fed moves won’t be driven by accelerating growth or runaway inflation, so the yield curve shouldn’t steepen. But a subsequently flatter yield curve shouldn’t be read as signifying a policy misstep.

 

This is just the way of the future. There is extremely abundant liquidity globally due to the expansion of central bank balance sheets. While that’s the case, old economic analysis frameworks are outdated and inadequate.

Which confirms what Morgan Stanley wrote,

Along with record high stocks, credit spreads at the tights since 2014, the broad dollar index continuing to hold little changed about 3% below the high hit in December, and longer-end yields remaining slightly lower year to date, historically low volatility across asset classes adds to a picture of very easy broad financial conditions. So does all the money in the short end helping keep CP yields and LIBOR lower as fed funds rate expectations have been moving up.

 

So the capitulation in pricing of a future reversal in the persistent LIBOR-OIS tightening trend in the past few months accelerated and had a large impact on swap spreads on top of more swapped issuance of corporate bonds by banks. The spot LIBOR-OIS spread fell another 0 7 by to 14 bp, another low since before the first Fed rate hike in 2015 after a 20 by drop in the past two months. That’s not far now from the 9bp average from 2004 through the first half of 2007 (before getting as high as 364bp on October 10. 2008. maybe the single most extreme financial market price of the whole crisis). The forward LIBOR-OIS spread to June fell to 14.8bp. down from 15.8bp Tuesday and 19.4bp Friday mostly giving up on any near-term widening. The LIBOR part of that was reflected in the Jun 17 eurodollar futures contract rallying 2bp to 1.265%, down from 1.305% Friday, even as Jul 17 fed funds futures held steady at 1.11%. pricing an 83% chance of a June rate hike, up from 1.095% Friday. Never mind seeing a transmission from the fed funds rate to broad financial conditions in impacts on stocks, long-end yields, the dollar. et al., if higher fed funds rate expectations struggle to even get traction in raising short-term market interest rates.

Which translated into english implies The Fed has lost control of the transmission mechanism of its operations, just as we noted Goldman concerned about, which brings up another question:

If the Fed retains its ability to steer financial conditions, why have financial conditions eased recently despite ongoing hikes? The answer is that Fed policy—especially Fed policy communicated around FOMC meetings—only accounts for a relatively small part of the ups and downs of financial conditions. And other developments such as the sharp pickup in global growth have been helpful for US financial conditions by boosting risk assets while keeping the US dollar from appreciating sharply in response to higher short-term interest rates. While it is difficult to say whether future non-monetary policy shocks will be positive or negative for US financial conditions, our finding that the impact of Fed policy on financial conditions remains (at least) similar to the longer-term average suggests that Fed officials should be able to achieve their goals for financial conditions by moving the funds rate if they try hard enough.

 

Fed Policy Retains Sizable Impact

What Goldman really meant to say is that the Fed’s 50 bps in rate hikes since December have been drowned and offset by the trillions in new credit created out of China. That credit expansion is now ending however, and China’s credit impulse has tumbled into negative territory (but that’s a different topic).

Going back to Goldman, Hatzius adds that “we find that the sensitivity of financial conditions to monetary policy shocks has been quite high recently, at least when we identify these shocks using bond market moves around FOMC meetings. This suggests that the easing of financial conditions is due to other factors, most obviously the improved global environment, not reduced traction of monetary policy.”

What form will this monetary tightening “shock” take place? ”

Our best (though uncertain) answer is that the committee will need to deliver 50-75bp more hikes per year than priced in the forwards to stabilize the economy at full employment. This is roughly consistent with our current funds rate call that we will see an average of 3-4 hikes per year through the end of 2019, compared with market pricing of just over 1 hike.”

Of course, if Goldman is wrong and the Fed has no intention of sending risk assets into a tailspin with a monetary policy “shock”, then there is no saying just how much further the combined effort of China’s gargantuan, if cooling, credit expansion, coupled with the “dovishly” hiking Fed can take stocks. However, by now it is becoming clear to even the most resentful permabulls – and even Goldman  – that the longer the Fed delays the day of reckoning out of pure fear of the unknown, the greater the chaos and loss in asset values when the Fed no longer has the luxury of picking when to pull the switch.

 

end

With today’s last word on events worth noting: David Stockman

 

(courtesy David Stockman/Daily Reckoning)

 

Hurricane Bearing Down on the Casino

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

 

 

Yesterday I said the Donald was absolutely right in canning the insufferable James Comey, but that he has also has stepped on a terminal political land-mine. And he did.

That’s because the entire Russian meddling and collusion narrative is a ridiculous, evidence-free attempt to re-litigate the last election. And now that the powers that be have all the justification they need. And what is already an irrational witch-hunt will be quickly turned into a scorched-earth assault on a sitting president.

I have no idea how this will play out, but as a youthful witness to history back in 1973-1974 I observed Tricky Dick’s demise in daily slow motion. But the most memorable part of the saga was how incredibly invincible Nixon seemed in early 1973.

Nixon started his second term, in fact, with a massive electoral landslide, strong public opinion polls and a completely functioning government and cabinet.

Even more importantly, he was still basking in the afterglow of his smashing 1972 foreign policy successes in negotiating detente and the anti-ballistic missile (ABM) treaty with Brezhnev and then the historic opening to China on his Beijing trip.

So I’ll take the unders from anyone who gives the Donald even the 19 months that Nixon survived.

After all, Trump lost the popular vote, is loathed by official Washington, barely has a functioning cabinet and is a whirling dervish of disorder, indiscipline and unpredictability.

To be sure, the terms of the Donald’s eventual exit from the Imperial City will ultimately by finalized by the 46th President in waiting, Mike Pence. But I’m pretty sure of one thing: Between now and then, there is not a snow ball’s chance in the hot place that Donald’s severance package will include the ballyhooed Trump Tax Cut and Fiscal Stimulus.

Markets slipped today because of carnage in the retail sector (which I’ve been warning readers about). But these fantasies are apparently still “priced-in” to a market that has now become just plain stupid.

What is surely coming down the pike after the Comey firing, however, is just the opposite.

That is, Washington will soon become a three-ring circus of investigations of Russia-gate and the “hidden” reasons for Trump’s action. The Imperial City will get embroiled in bitter partisan warfare and the splintering of the GOP between its populist and establishment wings.

In that context, what passes for “governance” will be reduced to a moveable Fiscal Bloodbath that cycles between debt ceiling showdowns and short-term continuing resolution extensions.

Progress on Obamacare “repeal and replace” or on a 2018 budget resolution that would enable consideration of tax reform will be nearly impossible.

Apparently, that’s not yet dawned on the Wall Street shills who are in the business of justifying a market that never stops rising. I heard a knucklehead from one of the dodgiest of these shops, Bespoke Investments, on Bloomberg yesterday re-spinning the entire history of the last six months.

The soaring post-election stock market supposedly had nothing to do with Trump or his stimulus and “growth agenda.”

Nope, it’s just about the “fundamentals,” according to the fantasy spinners at Bespoke Investments. Mr. Market doesn’t even care about Washington and will get by just fine even with a tax cut delay or even no tax cut at all. Wall Street is just pricing in a rebounding global economy and a return to double digit profits growth.

Not exactly.

The “recovery” is nearly 100 months old and exceedingly long-in-the-tooth by historic standards. Meanwhile, the Fed has clearly embarked on a tightening cycle for the worst of all reasons. That is, it knows it has not abolished the business cycle and is desperately raising rates so that it has dry powder to combat the next recession!

Beyond that, China is on the brink of a massive credit implosion and has already cranked back on debt growth, which hit an insane $4 trillion annualized rate (33% of GDP) in the first quarter. Accordingly, global trade and commodity prices are heading for a deflationary relapse — as sinking oil, iron ore and copper prices are already attesting.

In short, so much for the newly discovered “fundamentals.”

What this really means is that the robo-machines and day traders are playing chicken with the Imperial City. There is no basis whatsoever for the massive post-election re-rating of the stock market except for the fabled Trump Stimulus.

And that is now deader than a doornail. In fact, the reality is even worse than the certainty that no “hand-off” of the stimulus baton to fiscal policy is going to occur.

But for some reason, market volatility is at a  24-year low. That’s despite the unprecedented convergence of political, fiscal and monetary policy risks — to say nothing of foreign policy hot spots from Ukraine to Syria and the Korean peninsula.

Stated differently, the casino is completely unhinged. And the market moved hardly four S&P points — in the wrong direction — after the Comey firing.

To use a storm metaphor, I have never been in the eye of a hurricane. But I do reside only a few blocks from Wall Street. And I can feel the financial barometric pressure plummeting by the hour.

In fact, others than the five FAANG stocks (Facebook, Amazon, Apple, Netflix and Goggle), the market has been silently collapsing since March 1st.

That’s right. During the last 70 days, the FAANGS have gained $260 billion in value, while the other 495 companies in the S&P 500 have lost an identical amount. And on that utterly unmistakable pattern history is absolutely clear.

In fact, the market cap of the S&P 500 has risen from $19.5 trillion to $21.3 trillion during the last 29 months. But just five NASDAQ stocks (“Big 5”) consisting of Microsoft plus the FAANGs (less Netflix) account for 56% of that $1.8 trillion gain.

Stated differently, the combined market cap of the NASDAQ “Big 5” has soared from $1.9 trillion to nearly $3 trillion since early 2015, or by 55%. That compares to just a 4.5% gain in the aggregate market cap of the the other 495 S&P 500 stocks during that period.

That’s a radical narrowing of the market if there ever was one. It’s also evidence that they eye of a financial hurricane now sits dead atop the canyons of Wall Street.

When the market narrows to a handful of momo names, its all over but the shouting. Like the case of the Nifty Fifty back in the early 1970s, a crash is just around the corner.

In short, these five giant companies essentially account for the last spasm of a monumental financial bubble that has been building for nearly three decades.

Get out while you still can!

Regards,

David Stockman
for The Daily Reckoning

 

end

 

Well that about does it for tonight

I will see you tomorrow night

H.

 

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